AGENDA TITLE:
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Adopt a Resolution Establishing a Finance Committee, Committee Objectives and Appointment Guidelines (CM)
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MEETING DATE:
August 20, 2025
PREPARED BY:
James Lindsay, Acting City Manager
recommendation
RECOMMENDED ACTION:
Adopt a Resolution establishing a Finance Committee, committee objectives and appointment guidelines.
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BACKGROUND INFORMATION:
At the August 6, 2025 Regular City Council meeting, Mayor Bregman and Councilmember Craig-Hensley requested an item for Council discussion on the formation of a Finance Committee that could include two City Councilmembers and one Lodi resident with financial expertise. One of the observations from the June 2025 Internal Controls Review was the City’s investments are overseen by one employee, the City Treasurer. The review stated that one individual managing investments can pose several risks, including lack of diversification, limited perspective, and overreliance on individual judgment. The City Council received a presentation (Attachment 1) from staff on March 19, 2025 on how other cities use Finance Committees to guide the review and development of finance polices, review the preparation of financial statements, review internal controls, and monitor investments.
The Internal Controls Review contained suggested two methods to address the investment management concern:
1. Form an investment committee comprising individuals with diverse expertise, including finance, risk management, and relevant industry knowledge.
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2. Contract with a third-party fiduciary to manage the City’s investments.
Staff recommends the second method, whereby a third-party would manage of a portion of the City’s portfolio that can be invested and not held for liquidity. Staff could continue to manage the liquid portion of the portfolio that is required to fund the day-to-day operations of the City. A new Finance Committee, together with the City Treasurer, could provide oversight of a third-party investment manager and the pension stabilization trust held with Public Agency Retirement Solutions. The City’s Investment Policy is provided as Attachment 2 and the Pension Stabilization Policy as Attachment 3.
Attachment 4 is a draft resolution for the Council to consider if it is ready to move forward with forming a Finance Committee. The resolution provides for a Committee with the following provisions:
1. The Finance Committee will be a standing committee, adhering to the Ralph M. Brown Act and its open meeting requirements.
2. Initial advisory tasks include:
a. Review of internal controls policies and procedures
b. Provide recommendations to the City Council regarding new or updated financial policies
c. Provide oversight of City investments in coordination with the City Treasurer
d. Review comprehensive annual financial statements
e. Provide recommendations to the City Council on budget policy matters
3. Committee Membership:
a. Two Councilmembers appointed by the City Council
b. One community member appointed by the City Council
4. Secretary to the Committee - City Treasurer
Staff recommends the City Council approve the establishment of the Financial Advisory Committee and appoint two members of the City Council and one Lodi resident with financial expertise to serve on the committee. At the annual confirmation of Boards and Commissions assignments of the City Council after its Reorganization, the City Council may update Council appointments to the Finance Committee as desired. The term of the resident member can be determined by the Committee and the Council at a later date.
STRATEGIC VISION:
3C. Fiscal Health: Ensure elected leaders & staff retain focus on fiscal priorities.
FISCAL IMPACT:
Establishment of a Finance Committee can provide greater fiscal oversight and reassure residents that the City is committed to the careful management of public funds.
FUNDING AVAILABLE:
Not applicable.