PREPARED BY: J. KELLY SESSIONS DATE OF MEETING: 08/06/18
SUBJECT:
TITLE
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN PABLO APPROVING FY 2017/18 GENERAL FUND DESIGNATED RESERVES AMENDMENT #4 AT $5,800,483 PER ADOPTED FISCAL RESILIENCY RESERVE POLICY
Label
CITY MANAGER RECOMMENDATION
Recommendation
Adopt resolution.
Body
Compliance statements
FY 2018-2021 Council Priority Workplan Compliance Statement
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.
Upon completion of the FY 2017 audit, City Council established the GFDR at $9,525,937 on January 16, 2018 (Resolution 2018-003). This GFDR comprised a year-to-date fund balance of $6,525,937 as of December 31, 2016, plus an additional $3,000,000 available as a result of the FY 2017 Audit. The GFDR has been amended multiple times since then, most recently on May 21, 2018 by Resolution 2018-067 when the amount was set at $6,508,483. A total of $708,000 has been appropriated since then, leaving a remaining balance of $5,800,483 as follows:
• FY 2017/18 Amendment #4 GFDR Begin Balance $ 6,508,483
• Appropriations from 5/21/18 - 6/30/18 ( $ 708,000 )
• GFDR Balance as of 6/30/18 $ 5,800,483
Staff proposes GFDR Amendment #4, a slight change to the prior adopted, Amendment #3. Previously, Measure Q funding was split between three entities (i.e. the EDC, Police Department and Community Services), but when Childhood Obesity Prevention was added to the Measure Q funding split, it had the net effect of reducing funding to the other three programs. Therefore, to allow scheduled programming to continue, staff determined that it was necessary to make the three entities whole in their funding.
Staff proposes to carve $187,500 out of existing allocations to add $62,500 each to the EDC, Police Department and Community Services Measure Q funding. This allocation would come from earmarks for improvements to the City-owned Medical Office Building (an allocation decrease from $1 million to $837,983) and from the City-wide Annexation, Economic Development, Telecom & TOD Projects line (a decrease from $25,000 to $0) as follows:
Staff presented GFDR Amendment #4 to the Budget, Fiscal & Legislative Standing Committee on July 24, 2018, which supported the amendment and recommended forwarding to City Council for approval.
FISCAL IMPACT
This action sets the FY 2017/18 GFDR Amendment #4 allocations at $5,800,483. 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 merely earmarks funds in the current FY 2017/18 GFDR fund balance 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.