Trenton council adopts fund balance, debt management and capital asset policies; investment policy updated

At the May 19 Trenton City Council meeting, City Controller Cooper asked council to adopt formal fund balance, debt management and capital asset policies and to approve revisions to the city investment policy following a recent S&P review tied to bond issuance.

City Controller Cooper told council the S&P report praised the city's stable rating but noted a lack of certain formal policies. "While we were given a stable rating, the report made mention of our relatively average financial management practices and policies and a lack of other policies," Cooper said. Bond advisers Benzinski and Company provided sample policies that Cooper tailored for the city.

The changes to the investment policy include increasing diversification limits for certain security types from 25% to 50% and raising the maximum maturity for bonds from three years to five years. Cooper said all four policies have been reviewed by the city attorney and asked the council to adopt the fund balance, debt management and capital asset policies and an updated investment policy.

Councilman Rodriguez asked whether the changes would raise the city's S&P rating further. Cooper said the policies could help on future bond issuances but would not affect the city's current $43.5 million bond package.

The council moved, supported and adopted the policies; the motion was recorded as unanimous.

Why it matters: formalizing these fiscal policies responds to a rating agency suggestion and may help on future financings by clarifying management practices and investment parameters.