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From YouTube: Finance Transition Workgroup
Description
Finance Transition Workgroup
A
Okay,
yeah
sure
my
name
is
Dave,
we're
I,
guess
I
drew
the
short
straw
at
my
committee
and
the
opportunity
to
present
you
this
morning.
I
know:
there's
nothing.
People
want
to
do
first
thing
on
a
Friday,
more
abundance.
Geeks
talk
about
finance,
so
I'm
actually
delighted
enough
people
here
that
are
interested
in
this
topic,
because
it
is
quite
an
important
topic.
A
First
of
all,
I'd
like
to
thank
the
mayor
for
the
opportunity
to
participate
in
this
important
initiative,
I'd
like
to
acknowledge
the
contributions
of
the
rest
of
our
team.
Estelle
Berger
is
my
co-chair,
as
unfortunately
doing
civic
duty
elsewhere
today
serving
on
a
jury,
but
it
also
like
to
thank
Don,
Kirby,
clear
and
and
lost,
and
II
wallerstein
Ron
Martinez,
Ken,
Goodwin,
George,
Strickland,
Maya,
suiza
and
Scottie
Pierce
for
the
time
and
effort
that
they
put
into
this.
A
So
to
boil
down
what
the
mission
of
our
team
was
is
to
try
and
develop
a
set
of
steps
that
the
city
could
take
in
order
to
prepare
itself
for
the
next
serious
economic
financial
disruption
we
had
9
or
10
years
now
of
good
economic
environment.
The
city
has
had
an
expansion
since
2010,
but
we
all
know
that
economic
cycles
haven't
been
outlawed
and
will
be
another
downturn
at
some
point
and
so
in
there
recognizes
that
and
wants
to
make
sure
that
we're
planning
for
the
future.
A
So
our
committee
took
a
look
at
a
broad
set
of
issues,
the
two
most
informative
considerations
that
drove
our
recommendations
for
the
fact
that
Santa
faz
to
generate
revenues
to
be
operating
and
debt
service
requirements
very
heavily
dependent
upon
GRT
collections
and,
in
fact,
in
2018-19
budget
GRT
collections
represented
about
69
percent
of
the
revenue
for
the
general
funds
revenues.
So
that's
a
obviously
a
very
significant
exposure
that
we
have
and
the
second
thing
that
really
jumped
out
at
us
as
we
were.
You
know
peeling
back
the
onion
on
on
the
city's
finances.
A
It's
not
just
this
concentration,
but
how
volatile
GRT
levels
are
there
not
only
cyclical
but
they're
seasonal,
and
so
when
the
economy
slows
down?
To
put
it
simply,
the
revenues
that
are
associated
with
gr
to
revenues,
declines
and,
unfortunately,
the
expenditures
that
are
associated
with
city
services,
particularly
those
that
are
designed
for
low
income
taxpayers,
continue,
and
so
that
mismatch
is
something
that
we
as
a
city
have
suffered
through,
particularly
in
the
aftermath
of
the
last
recession,
and
so
our
committee
really
tried
to
focus
on.
A
How
could
we,
what
kind
of
steps
can
we
take
to
mitigate
that
type
of
a
shortfall
in
the
future,
so
that
we
could
smooth
out
the
mismatch
between
revenue
collections
and
expenditures
so
to
cut
to
the
chase?
Our
primary
recommendation
for
the
city
is
to
establish
a
permanent
financial
contingency
fund
fund
that
typically
referred
to
as
a
rainy
day
fund.
A
Obviously,
haven't
had
a
whole
lot
of
rain
lately,
either
literally
or
figuratively,
but
we
know
it
will
confident
on
having
this
fund
in
place
would
provide
a
pool
of
reserves
for
the
mayor
and
the
City
Council
to
be
able
to
supplement
the
budget
when
we
have
these
kinds
of
budget
deficits.
And
so
again
the
fund
is
designed
to
smooth
out
the
highs
and
lows
by
taking
surpluses
and
Goodyear's,
quite
simply
and
putting
them
aside,
so
that
they're
available
and
accessible
to
offset
shortfalls
from
revenue
declines
when
they
occur.
A
And
gets
the
attention
that
it
deserves
and
that
that
is
the
exposures
and
the
vulnerability
that
the
city
has
to
the
unexpected
emergencies,
such
as
repairs
need
for
public
infrastructure,
things
like
buildings,
storm
drain,
bridges,
etc
that
don't
typically
get
handled
through
the
operating
fund,
which
was
our
primary
area
of
focus
here.
But
our
very
large
exposures
for
the
city
and
to
the
extent
that
any
of
these
big
pieces
of
infrastructure
fail
or
get
destroyed
by
natural
disaster.
For
example,
the
exposures,
particularly
if
they're
uninsured,
obviously
could
be
substantial
for
the
city.
A
So
we
would
also
recommend,
at
the
city,
spend
some
time
examining
and
make
some
determination
about
the
replacement
cost
of
the
city's
infrastructure,
where
we
have
insurance,
where
we
don't
have
insurance
that
might
cover
these
types
of
disasters,
driven
losses
and
then
incorporate
that
examination
and
that
analysis
into
the
ultimate
final
product.
Whether
a
separate
fund
is
set
up
in
order
to
handle
these
types
of
financial
costs
that
are
associated
with
these
types
of
disruptions,
or
whether
the
permanent
contingency
fund
designed
to
support
the
operating
fund
large
in
order
to
provide
extra
reserves.
A
We
think
this
is
another
important
area
that
needs
to
be
needs
to
be
attended
to.
So
let
me
talk
for
a
minute
about
the
the
scope
of
our
work,
so
there
were
really
three
areas
of
investigation
that
we
focused
on
in
terms
of
the
establishment
of
this
fund.
The
first
is:
what
are
the
legal
authorizations
and
approvals
that
would
be
required
in
order
for
the
city
to
actually
establish
such
a
fund.
A
Second
would
be
what's
the
size
of
the
fund,
and
this
is
kind
of
the
we
jokingly
referred
to
as
the
elephant
in
the
room
is
where's
the
money
going
to
come
from.
It's
always
about
the
money
and
then
the
last
is
developing
a
set
of
rules
that
would
be
established
upfront
that
would
determine
both
the
usage
of
the
fund.
Under
what
circumstances
could
the
fund
to
be
used,
and
also,
how
would
the
fund
be
replenished
after
it
has
been
used
so
I'll
touch
on
each
one
of
these
areas?
A
A
It
would
require
a
resolution
by
the
City
Council
to
establish
this
fund
and
the
terms
governing
its
use
would
have
to
be
approved
by
a
majority
of
the
voters.
We
chose
this
particular
structure
because
it's
already
codified
in
the
state
law
and
we
think
that
the
legal
path
and
the
existing
precedence
precedent
precedent
sensors
for
establishing
such
a
fund
would
be
the
path
of
least
resistance.
A
There
are
other
alternatives
that
we
looked
at,
but
the
fact
that
this
animal
are
exists
and
it's
embedded
in
state
law
seemed
like
the
path
of
least
resistance
and
the
easiest
forum
to
implement.
So
on
fun-sized,
we
looked
at
best
practices
across
the
country,
both
at
the
state
level,
as
well
as
the
local
level
and
consulted
a
broad
universe
of
experts
in
this
space.
A
Everything
from
finance
directors
from
various
states
and
cities
to
professors
at
graduate
school
levels.
To
the
government,
finance
Officers
Association
about
what
the
best
practices
are
in
terms
of
setting
up
a
fund
like
this,
and
we
came
to
the
conclusion
that
a
fund
equal
to
about
twenty
to
twenty-five
percent
of
the
general
fund
revenues
would
be
appropriate
and
put
that
in
the
context.
For
you,
the
general
fund
revenue
budget
for
for
this
fiscal
year
is
about
ninety
four
million
dollars.
A
So
the
Permanent
Fund
that
we
are
recommending
would
be
in
the
range
of
19
million
to
24
million
dollars.
That's
a
lot
of
money,
and
but
if
you
look
at
the
fact
that
the
state
actually
requires
each
municipality
to
have
a
reserve
of
8.3
percent
of
its
general
fund,
the
city
of
Santa
Fe
is
actually
doing
better
than
that.
A
This
you
know
20
to
20
million
ish
amount
of
money
or
21
or
20
19
to
20
to
25
percent
of
the
budget,
also,
as
context
would
have
been
enough
to
cover
the
decline
and
GRT
revenue
that
occurred
between
2008
and
2010.
So
during
that
period
the
decline
was
about
21
million
dollars
and
so
and
also
just
a
little
bit
more
context.
A
Not
only
did
our
GRT
revenue
declined
21
million
dollars
during
those
two
or
three
years,
but
it
took
the
city
of
Santa
Fe
about
ten
years
just
to
get
back
to
the
peak
level
in
2008
of
GRT
revenue.
So
that's
the
context
around
the
sizing
for
the
fund.
We
also
believe
that
this
level
is
consistent
with
what
the
rating
agencies
look
at
when
they
look
at
the
bond
debt
ratings
for
cities,
it's
considered
to
be
a
best
practices
level
and
the
government
finance
Officers
Association
considers
an
adequate
baseline
to
be
about
16
percent
reserve.
A
We
think
the
city
of
Santa
Fe
should
be
higher
than
the
16%
baseline
because
of
the
volatility
and
our
heavy
reliance
on
the
GRT
revenue
stream,
so
that
our
Committee's
recommendation
was
to
do
something
in
excess
of
the
baseline.
So
all
that's
well
and
good,
where
the
heck
does
the
money
come
from
in
a
city
that
has
no
money
sloshing
around?
Well,
that's
why
you
get
paid
the
big
bucks
mr.
mayor,
so
the
there
are
some
stipulations
and
some
limitations
on
where
funding
for
this
type
of
a
fund
comes
from
state
law.
A
Dix
dictates
that
funds
for
a
permanent
contingency
fund
like
this,
the
source
from
what
they
call
the
unappropriated
general
fund
surplus.
So
this
is
money
in
the
budget
that
doesn't
get
designated
through
the
budget
process
for
specific
expenditures
and
a
portion
of
those
unappropriated
general
funds
could
then
be
set
aside
for
this
type
of
a
rainy
day
fund.
A
The
annual
contributions
to
the
fund
are
limited
to
a
portion
of
this
unappropriated
general
fund
surplus,
and
you
can
only
actually
go
after
fifty
percent
of
the
excess
of
any
prior
year's
fiscal
budget.
So
if
there
is
a
carryover
surplus
from
the
prior
year,
the
city
in
plain
English
can
take
up
to
fifty
percent
of
that
surplus
and
use
it
to
fund
this
contingency
fund.
A
There
are
other
ways
to
fund
this
type
of
a
rainy
day
fund.
You
can
fund
it
through
asset
sales.
You
can
fund
it
through
dedicated
taxes
that
would
be
approved
by
the
voters.
You
could
fund
it
through
use
fees.
You
know
that
currently
are
being
used
in
the
budget
for
other
purposes.
There's
a
broad
set
of
alternatives
here
beyond
just
this
unappropriated
surplus.
But
our
committee
felt
like
again
the
path
of
least
resistance
is
to
do
something
that
was
already
clearly
codified
in
state
law.
A
There
may
be
additional
funding
that
come
from
these
other
sources
that
the
mayor
and
the
City
Council
proposed
to
top
up.
You
know
this
fund
over
time.
There
are
a
lot
of
you
know,
considerations
when
thinking
about
those
alternatives,
financial
considerations,
political
considerations,
equity
considerations,
etc.
That
would
have
to
go
into
considering
those
alternatives
and
we
encourage
the
mayor
and
the
City
Council
to
think
about
those
as
well
so.
A
One
of
the
things
that
that
came
through
clearly,
as
we
talked
to
other
people
about
there
experience
with
these
types
of
funds,
is
that
it's
really
truly
a
balancing
act
to
figure
out
the
right
way
to
establish
the
usage
Mechanics
for
a
fund.
People
told
us
that
if
the
mechanics
are
too
easy
to
access
the
fund,
understandably,
that
you
are
in
a
situation
where
the
funds
may
be
used
in
short-sighted
ways
and
for
expedient
purposes.
A
On
the
other
hand,
if
you
make
it
too
difficult
for
the
government
to
access
these
funds,
then
you're
going
to
be
in
a
situation
where,
when
you
actually
need
them,
the
most
they're
difficult
to
access,
and
so
we
looked
at
a
wide
variety
of
trigger
mechanisms
for
using
this
fund
and
Mechanics
for
both
usage
and
replenishment.
The
details
of
those
are
kind
of
beyond
the
scope.
Probably
of
this
conversation
today,
we
have
outlined
some
of
those
some
of
our
thoughts
in
the
in
the
written
report,
but
I
think
that's
an
area.
Mr.
A
There's
a
lot
of
work
to
be
done,
obviously
between
the
mayor
and
the
City
Council,
the
finance
staff
working
with
bond
rating
agencies
and
the
city's
legal
staff
in
order
to
work
through
a
lot
of
the
details
here,
but
I
think.
The
framework
that
our
committee
recommended
is
is
pretty
straightforward,
so
with
that
I
just
will
open
it.
Up
to
my
colleagues
here
on
the
committee,
the
other
I.
C
Totally
endorse
and
applaud
the
mayor
staffer
consideration
of
a
contingency
fund
as
we
go
forward
in
time.
Given
the
you
know
the
911
and
2007-2008
recession,
it's
clear
that
we
have
to
have
a
horrible
business
perspective
on
how
we
manage
the
city's
revenues,
and
it's
amazing
to
me
that
we
have
survived
as
a
city
and
we're
not
in
dire
straits.
At
this
we
may
be
once
the
forensic
audit
comes
out,
but
Yohn
I'm,
just
surprised
that
it
hasn't
happened
up
to
this
point.
But
it's
a
very
positive
step
going
forward.
C
We've
got,
as
we
said,
a
number
of
ways
to
fund
this
in
terms
of
asset
sales
or
maybe
imposition
of
a
tax.
It
has
political
implications,
the
draw
down
or
the
funding
via
the
50%
of
excess
from
prior
revenues.
There
are
rather
painless
ways
to
fund
this,
but
it's
good
business,
good
business
and
I
as
a
person
as
a
citizen,
totally
endorse
this
concept
and
Scotty
I,
think
you're
going
to
say
so.
First.
D
Of
all
I'd
like
to
just
sort
of
echo
what
my
colleagues
have
said,
that
I
wanted
to
also
tell
you
that,
from
our
perspective,
there
were
a
variety
of
different
experiences
involved
in
terms
of
looking
at
the
financial
aspects
of
this.
But
the
working
group
and
I
really
applaud
the
mayor
for
his
foresight,
nurse
our
council
and
and
all
of
the
people
that
had
input
to
this.
Because
here's
the
bottom
line
we
have
no
contingency
for
a
contingency
and
that's
something.
D
That's
been
demonstrated
over
the
years,
both
in
China
the
crises
that
have
happened
external
to
the
city
as
well
as
that.
Those
events
that
happen
internally
to
the
city
and
so
I
think
I
would
just
urge
each
one
of
you
of
whether
or
not
you
have
an
interest
or
a
background
in
finance
to
take
a
look
at
this
report,
because
I
think
it
gives
a
start
and
a
baseline
and
that's
all
we're
really
sort
of
challenged
to
do.
D
I
would
like
to
also
tell
you
that
the
mayor
in
a
sports
item
is
when
he
invited
all
of
us
to
participate
in
this
all
for
true
I.
Think
for
a
120
of
us
said
that
we
had
several
months
to
work
on
this
and
because,
as
the
mayor
had
outlined,
that
transition
starts
after
the
fact.
Our
timeline
in
fact
was
shortened
to
today,
and
we
originally
had
agreed
that
we
would
have
at
least
one
more
month,
but
it
shows
you
that
you
know
the
work
always
expands
to
the
amount
of
time.
D
So
we
have
plenty
of
recommendations
and
I
just
like
to
echo
that
this
is
the
beginning
step.
And
the
last
thing
I'd
like
to
echo
is
the
tremendous
amount
of
work
that
everyone
on
this
committee
did,
but
especially
to
David
and
to
Estelle
for
their
leadership
and
I
would
say
that
the
important
thing
is
that
we
need
to
get
started
and
we
really
need
to
get
started
in
David's
words,
path
of
least
resistance.
Wouldn't
that
be
lovely.
A
E
A
B
B
Also
want
to
welcome
a
counselor
Aveda
this
morning
is
the
head
of
our
Finance
Committee,
and
their
timing
is
impeccable,
as
always
counseling.
Thank
you
for
coming
in
and
and
the
members
of
the
of
our
finance
team
were
here
this
morning,
listening
in
because
you
care
about
this
stuff
deeply
and
you've
already
been
working
hard
on
responding
to
audits
and
responding
to
findings
that
make
us
attend
to
some
of
the
work
that
this
contingency
group
was
addressing.
F
B
Specifically,
on
the
matter
of
capital
assets,
we're
already
like
I,
can
report
to
you
that
the
city
team
is
agrees
with
you
and
is
working
on
that.
It's
a
place
where
we
need
to
improve
our
housekeeping
to
know
not
only
where
our
vulnerabilities
are,
but
what
our
assets
are,
and
so
you're
you're
on
point
with
that,
one,
but
I
think
the
the
larger
effort
you
made
to
look
at
our
continued.
Our
need
for
a
contingency
financial
capability
is
really
where
I'm
focused
yeah.
B
I
do
have
one
very
specific
question
for
you
about
the
elephant
in
the
room.
Where
does
the
money
come
from
from
what
you
from
other
places
you
look
and
from
what
you
saw
in
other
practices?
Have
communities
at
any
level
adopted
a
one-time-only
tax
measure
to
pump
money
into
a
fund
with
the
recognition
that,
once
that
money
has
been
collected
and
deposited
in
a
rainy
day
fund
that
tax
then
disappears?
And
if
so,
what
kinds
of
things
have
other
communities
done?.
A
A
Here
it
could
be
done
on
a
temporary
basis
in
order
to
to
make
an
initial
funding
of
this
running
the
legal
traps
on
that
it's
going
to
require
a
little
bit
more
more
work.
There
are,
you
know
the
opportunity
for
expanding
use
fees.
There
could
be
asset
sale
proceeds,
for
example,
if
whether
its
water
unused
water
rights
or
buildings
that
the
city
doesn't
need
anymore,
that
would
generate
proceeds
they're
a
little
more
complicated
in
terms
of
how
you
access
those
within
the
constraints
of
the
cities
and
the
state's
governing
documents.
A
Well,
that's
again,
one
of
the
one
of
the
questions
that
has
both
practical.
You
know,
implications
political
implications
and
most
of
the
instances
that
we've
seen
there
are
requirements
to
replenish
the
fund
within
you
know
within
typically
a
four
year
period,
but
there
are
also
kind
of
safety
valves
that
if
there's
a
recession
that
lasts
longer
and
then
it
takes
longer
for
excess
funds
to
come
through
the
surplus
that
those
types
of
replenishment
requirements
can
be
mitigated.
A
E
A
H
H
G
This
is
regarding
infrastructure
that
is,
is
not
insured.
Is
there
a
pattern
regarding
these
categories,
for
example,
roads,
bridges
ensured
that
parks
are
not
are
the
locations
of
non
insured?
This
is
a
little
hard
to
read.
Excuse
me
are
not
insured
resources
concentrated
in
certain
areas
and
which
are
they.
D
Mechanism
for
risk,
analysis
and
I
think
if
we
could
revert
back
to
that
I
think
generally
that
kept
coming
up
in
our
committee.
No
matter
what
path
you
take,
there's
no
baseline
of
real
information
on
risk
analysis,
so
that's
bigger
than
a
breadbasket
and
bigger
than
this
task
force.
But
it's
something
that
the
mayor
did
say
is
a
place
to
start
and
it
I
think
you'll
find
probably
throughout
all
today,
no
matter
what
the
presentations
are.
Is
that
there's
a
lot?
A
So
the
state
statutes
actually
significantly
restrict
the
types
of
investments
that
could
be
made
with
this
type
of
fun,
not
surprisingly,
they're.
Very
conservative
investments
like
government
bonds
and
commercial
paper
and
money
market
funds
and
things
so
there's
a
very
you-
know
narrow
scope
of
the
types
of
investments
that
these
types
of
funds
can
be
used
for.
Okay,.
E
F
B
That
you're,
the
old
people
I,
would
I,
wouldn't
I,
wouldn't
ascribe
any
meaning
to
the
judges
comments
I
want
to
just
first
of
all,
I
want
to
thank
you,
I
think
you've
done
tremendous
work
in
an
area
that
the
city
absolutely
must
pay
critical
attention
to.
There
is
no
doubt,
as
Dave
said,
we
have
not
abolished
the
cycles
of
the
economy.
B
We
always
forget
the
last
downturn
after
it's
gone
and
we
think
we're
in
for
permanent
good
times
and
and
we're
so
shocked,
shocked
when
permanent
good
times
don't
stay
permanent.
So
your
your
recommendations
are
spot-on.
I've
been
I
want
to
assure
you.
This
is
what,
while
you
were
doing,
your
work
city
has
not
been
simply
waiting.
I've
been
meeting
weekly
with
the
finance
team
to
look
at
some
of
these
issues,
including
questions
of
art,
where
our
capital
assets
are
response
to
risk
assessment
audits
and
adding
more
audits
to
our
in-house
capabilities.
B
B
If
you,
if
you
require
or
request
a
permanent
fund,
then
you
become
permanent
assets
to
the
city
government
and
we're
going
to
tap
you
to
help
from
the
outside
to
keep
working
on
this
and
I
only
make
it
and
make
make
light
of
it,
because
it's
serious
and
you've
already
volunteered
some
extent
that
stay
in
engaged
and
to
pursue
these
issues.
These
are
critical.
We
don't
know
when
the
next
downturn
downturn
will
come.