PREPARED BY: REINA SCHWARTZ DATE OF MEETING: 02/04/19
SUBJECT:
TITLE
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN PABLO ESTABLISHING ALLOCATIONS FOR THE GENERAL FUND DESIGNATED RESERVES AT $10,338,114 FOR FISCAL YEAR 2018/19 (MID-YEAR) PER ADOPTED FISCAL RESILIENCY RESERVE POLICY
Label
CITY MANAGER RECOMMENDATION
Recommendation
Adopt Resolution
Body
Compliance statements
Budget Spending Controls and General Fund Reserves Protection / Fund Balance are adopted policy items under the FY 2018-21 Council Priority Workplan, effective November 1, 2017.
CEQA Compliance Statement
This is not a project as defined by CEQA as a budget or financing mechanism pursuant to 14 Cal. Code of Regulations section 15378(b).
BACKGROUND
In order to protect the fiscal solvency of the City and to achieve greater fiscal resiliency, the City Council took the important step of establishing the Fiscal Resiliency Reserve Policy on October 21, 2013 (Resolution 2013-159). This policy established new reserves and determined to fund each by formula (the Catastrophic Reserve, Budget Stabilization Reserve, and City Manager’s Contingency Account) or by a set amount within the General Fund Designated Reserve and Future Capital Projects Reserve (collectively the “GFDR” or Designated Reserves). The purpose of the reserves was to protect against natural disasters or manmade economic calamities and to set aside funding for other future known, but as of yet, unbudgeted one-time expenses.
On January 16, 2018, City Council approved the FY 2017/18 Designated Reserves at $9,525,937. Since then, City Council has appropriated $3,725,454 from the GFDR, leaving a remaining balance of $5,800,483 as of December 31, 2018.
The 2018 Comprehensive Annual Financial Report (CAFR), identified an increase in audited fund balance of $2,868,525. Additionally, the City has received reimbursement of $1,856,606 from CalTrans for work completed in the last year. Together, there is now $4,725,131 which is available for assignment within the FY 2018/19 Designated Reserves.
• FY 2017/18 GFDR Beginning Balance $ 9,525,937
• Expenditures & Appropriations since 1/16/18 ( $ 3,725,454 )
• Year to Date Fund Balance (12/31/18) $ 5,800,483
• Year-end Audited Fund Balance Available (6/30/18) $ 4,725,131
• FY 2018/19 GFDR Available Balance $ 10,338,114
Proposed GFDR Allocations for FY 2018/19 (Mid-year)
Staff proposes to set the FY 2018/19 mid-year GFDR allocations at $10,338,114. This amount includes $1,312,500 in Major Operating Contingencies and $9,025,614 in Future Capital Projects & Professional Services Reserves as follows:
Budget, Fiscal & Legislative Standing Committee Review
On January 28, 2019, the Budget, Fiscal & Legislative Standing Committee reviewed the year-to-date expenditures through December 31, 2018 from the FY 2018/19 General Fund Designated Reserves, as well as the audited fund balance figure from the 2018 CAFR and grant reimbursement available for assignment to the GFDR. The Standing Committee took action to recommend approval by the City Council as proposed in the above table.
FISCAL IMPACT
This action sets the FY 2018/19 mid-year GFDR allocations at $10,338,114. The action, however, does not involve the expenditure of funds or the creation of new budgets; hence, there is no associated fiscal impact. Approval of these designations earmarks funds in the current FY 2018/19 budget for potential future appropriation by the City Council to an approved capital improvement project or departmental expenditure account. This action demonstrates the City’s continued commitment to prudent financial management and will assist the City in planning for expected costs in the future.