Item 3: Ratification of Unanimous IGR Actions and Action on Non-Unanimous IGR Actions

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Comments: Support and monitor. Red flags: I did not see a provision that disallows local vehicle rental fees; however, that would be a major red flag to look for. Also, very broad enabling clause. In general, defer to Larry Hill's analysis. At a quick read, it seems like the City would support this bill because the additional revenue from the proposed motor vehicle rental tax would go to the State Highway Trust Fund and be allocated per existing formula (i.e., the City of Eugene would get a portion of the new revenue). HB 2561 Relating Clause: Relating to financial institutions. Title: Directs public officials to deposit public funds in certain community banks. Sponsored by: Introduced and printed pursuant to House Rule 12.00. Presession filed (at the request of House Interim Committee on Revenue) URL: http://www.leg.state.or.us/11reg/measpdf/hb2500.dir/hb2561.intro.pdf Contact Respondent Dept Updated Priority Recommendation Twylla Miller CS-FIN 1/24/2011 Pri 2 Oppose Comments: I oppose this bill. This bill directs public officials to deposit public funds with community banks if the cost to provide banking services (multiplied by a factor of 0.9) is lower than the cost for services charged by a bank that is not a community bank. Public entities should have the flexibility to manage their resources and place public funds with banks that are able to provide the unique services needed by the public sector while providing competitive rates. The City's current depository and primary lending banks are not community banks. It has been our experience that community banks do not have the knowledge base/experience to deal with the unique needs of large public entities. The City's main (depository) bank is selected through an RFP process - through which all banks are eligible to compete for our business. The bulk of the City’s funds that aren’t otherwise invested are held in the Local Government Investment Pool - managed by the State. Under ORS the allowable balance is about $42M, with unlimited deposits and withdrawals, making the pool a good tool to handle the daily cash flow needs of the City. While the City could open accounts at several different banks, we do not do so as there is a cost both in staff time & fees to having accounts at several banks. We do value our community banks and place funds through certificates of deposit via a competitive bid process in which any bank with a presence in Eugene is invited to participate. Local banks usually win such bids as their CD rates are much better than the national banks. 10