HomeMy WebLinkAbout5.12 Special Designation of General Fund Reserves for Fiscal Year 2023-24r
DUBLIN
CALIFORNIA
STAFF REPORT
CITY COUNCIL
DATE: .Line 25, 2024
TO: Honorable Mayor and City Councilmembers
FROM: Linda Smith, City Manager
Agenda Item 5.12
SU B.ECT: Special Designation of General Fund Reserves for Fiscal Year 2023-24
Prepared by: JayBaksa, Finance Director
EXECUTIVE SUMMARY:
The City Council will consider special designations of General Fund reserves for Fiscal Year 2023-
24.
STAFF RECOMMENDATION:
Adopt the Resolution Authorizing a Special Designation of General Fund Committed Reserves for
Fiscal Year 2023-24, and confirm changes to General Fund Assigned Reserves.
FINANCIAL IMPACT:
Approval of special designations in the General Fund will not result in any change to total fund
balance but would shift resources among reserve categories. The Fiscal Year 2023-24 Unassigned
(Cash Flow) Reserve is projected at $58.4 Million after Staffs recommendation of special
designations, which is equivalent to over six months of the Fiscal Year 2024-25 General Fund
operating budget. This is above the targeted cash flow of two to four months of the operating
budget.
DESCRIPTION:
Background
Governmental Accounting Standards Board Statement No. 54 (GASB 54), Fund Balance Reporting
and Governmental Type Definitions, requires fund balance to be classified into different categories
for governmental funds depending on the extent to which the use of resources is constrained for
specific purposes.
Per GASB 54, the five fund balance classifications are:
• Non -Spendable - amounts that cannot be spent because they are either (a) not in
spendable form, or (b) legally or contractually required to be maintained.
Page 1 of 4
1
• Restricted - balance with constraints placed of the use of the resources which are either (a)
externally imposed by creditors, contributors, or laws and regulations of other agencies, or
(b) imposed by law through constitutional provisions or enabling legislation.
• Committed - amounts that can only be used for specific purposes pursuant to formal action
of the agency's governing body. These are considered legally restricted and can only be
removed or changed by formal action of the governing body. Action to constrain resources
should occur prior to the end of the fiscal year, though the exact amount may be
determined subsequently.
• Assigned - amounts that are constrained by the governing body's intent to be used for
specific purposes but are neither restricted nor committed.
Fiscal Year 203-24 Year -End
Staff is projecting an operating surplus of $19.2 million in Fiscal Year 2023-24, before transfers
and other contributions. Taking into account the budgeted transfers out to capital improvement
projects that are funded by reserves, contributions to the facilities replacement fund and the
advances to Public Facility Fees, and transfers in, the result is an overall decrease to reserves of
$44.6 Million.
Table 1: Reserve Balance Summary
FY 2022-23 Reserve Balance
$249.7 Million
FY 2023-24 Projected Operating Surplus (revenues less expenditures)
Transfers Out (CIP) Assigned/Committed Reserves
Transfers Out (CIP) Unassigned Cash Flow
Contributions to ISF
Advance to Public Facility Fees
Transfers In
FY 2023-24 Reserve Balance (Projected)
Difference
$19.2 Million
($33.9 Million)
($17.3 Million)
($2.0 Million)
($10.7 Million)
$0.1 Million
$205.1 Million
($44.6 Million)
The General Fund Reserves Summary (Attachment 2) provides a listing of reserve balances by
category. Many of the reserve changes are due to the spending down of Committed Reserves for
budgeted capital improvement projects and the spending down of carry-over reserves from the
prior year. It should be noted that the Fiscal Year 2023-24 year-end balances are not final until the
City closes its financial books, at which time Staff will bring an update to the reserve designations.
Reserve Designation Recommendations
This Staff Report also transmits a Resolution (Attachment 1) which confirms designations and
changes only of Committed Reserves for Fiscal Year 2023-24, as City Council approval of Assigned
Reserves is not necessary by resolution. Staff recommends the following reserve designations as
of June 30, 2024:
Page 2 of 4
2
Committed Reserves:
• Downtown Public Improvement Reserve - Increase $4,000,000
This is in accordance with the City Council's Strategic objective #1a: Continue support of the
Downtown Preferred Vision and Downtown Dublin Specific Plan including improving visual and
environmental quality and evaluating specific business uses.
• Lease Revenue Bond Payment - Increase $1,000,000
This is in accordance with the City Council's Strategic objective #4c: Make annual contributions to
reserves for the early payoff of the energy efficiency bonds.
Assigned Reserves:
Staff underwent a review of the reserve designations to identify reserves that could be shifted to
other areas based on updated priorities and identified the following.
• Fiscally Responsible Adjustment - Decrease $325,000
Based on a change in budgeting practices, Staff is recommending eliminating this reserve. In lieu of
budgeting contingencies in the reserves, Staff now includes, when necessary, contingencies as
appropriations in the annual budget.
• Contribution to ISF - Decrease $1,500,000
As with the Fiscally Responsible Adjustment Reserve, Staff now allocates contributions to the
City's ISF's as a transfer out to the ISF Funds, instead of designating funds in a reserve.
• Dublin Boulevard Extension Advance - Increase $7,000,000
The City Council directed Staff to allocate $7 million of Fiscal Year 2023-24 General Fund surplus
to fill the funding gap of the Dublin Boulevard Extension. The reserve is a cash flow advance to the
Eastern Dublin Traffic Impact Fee program and General Fund will be reimbursed by the fee
program as development occurs. With the additional designation, the total set -aside for the
Dublin Boulevard Extension will be $49.5 million.
STRATEGIC PLAN INITIATIVE:
Strategy 1: Downtown Dublin and Economic Development
Objective A: Continue support of the Downtown Preferred Vision and the Downtown Dublin
Specific Plan including improving visual and environmental quality and evaluating specific
business uses.
Strategy 4: Organizational Health
Objective C: Make annual contributions to reserves for the early payoff of the energy efficiency
bonds.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
The City Council Agenda was posted.
ATTACHMENTS:
Page 3 of 4
3
1) Resolution Authorizing a Special Designation of General Fund Reserves for Fiscal Year 2023-24
2) Fiscal Year 2023-24 General Fund Reserves Summary
Page 4 of 4
4
Attachment I
RESOLUTION NO. XX — 24
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
AUTHORIZING A SPECIAL DESIGNATION OF GENERAL FUND COMMITTED RESERVES
FOR FISCAL YEAR 2023-24
WHEREAS, the City's Fund Balance and Reserves Policy requires special fund balance
allocations to be adopted by the City Council, and allows the City Council to take action prior to
the end of the fiscal year to direct a specific assignment of the fund balance; and
WHEREAS, Staff reviewed updated information regarding fund balance and estimated
one-time revenues during the preparation of the Fiscal Year 2024-25 Budget.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does
hereby make a special allocation of the estimated Fiscal Year 2023-24 year-end balance to the
Committed fund balance as follows:
• Increase the reserve for Downtown Public Improvement Reserve by $4,000,000
• Increase the reserve for Lease Revenue Bond Payoff by $1,000,000
BE IT FURTHER RESOLVED that, any net resources remaining after special designations,
and after meeting the Fund Balance and Reserves Policy requirements, will be left in the
Unassigned (Available) Reserve.
PASSED, APPROVED AND ADOPTED this 25th day of June 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor
ATTEST:
City Clerk
Reso. No. XX-24, Item 5.12, Adopted 06/25/2024 Page 1 of 1 5
Attachment 2
FISCAL YEAR 2023-24 GENERAL FUND RESERVES SUMMARY
RESERVE DESCRIPTION
on -Spendable
Prepaid Expenses
estricted
Actual Increase Decrease Net Change Projected
2022-23 2023-24 2023-24 2023-24 2023-24
$4,859
4,859
$4,324,132
Cemetery Endowment 60,000
Developer Contribution - Downtown 1,490,000
Developer Contribution - Heritage Park 19,000
Developer Contribution - Nature Park 60,000
Section 115 Trust - Pension 1,945,132
Heritage Park Maintenance 750,000
Committed
$0 $4,859
4,859
$0 $4,324,132
60,000
1,490,000
19,000
60,000
1,945,132
750,000
$76,016,420 $5,000,000 ($20,345,135) ($15,345,135) $60,671,285
Advance to Public Facility Fee 10,747,169 (10,747,169) (10,747,169)
Downtown Public Improvement 22,139,587 4,000,000 (384,375) 3,615,625
Economic Stability 8,000,000
Emergency Communications 532,113
Fire Services Pension/OPEB 2,211,094
Innovations and New Opportunity 894,498
One -Time Initiative - Capital 1,918,620 (1,419,112) (1,419,112)
One -Time Initiative - Operating 503,860
Public Safety Reserve 4,600,000
Specific Committed Reserves
Contribution to Public Facility Fee 6,000,000
Cultural Arts Center (CIP) 7,139,197 (6,964,197) (6,964,197)
Don Biddle Park (CIP) 675,193 (675,193) (675,193)
Fallon Sports Park III Contingency 100,000 (100,000) (100,000)
Lease Revenue Bond Payoff 7,000,000 1,000,000 1,000,000
Maintenance Facility (CIP) 55,089 (55,089) (55,089)
Utility Undergrounding (CIP) 3,500,000
Assigned
25,755,212
8,000,000
532,113
2,211,094
894,498
499,508
503,860
4,600,000
6,000,000
175,000
8,000,000
3,500,000
$125,043,297 $7,000,000 ($36,361,796) ($29,361,796) $95,681,501
Accrued Leave 1,301,506
Catastrophic Loss 17,714,064
CIP Carryovers 6,535,032 (6,535,032) (6,535,032)
Fiscally Responsible Adjustment 325,000 (325,000) (325,000)
Municipal Regional Permit 1,869,152 (1,845,428) (1,845,428)
Non -Streets CIP Commitments 3,276,777 (464,277) (464,277)
Operating Carryovers 2,014,571 (2,014,571) (2,014,571)
Parks and Streets Contingency 201,270
Pension and OPEB 18,000,000
Relocate Parks Department 500,000
Service Continuity 3,150,000
Dublin Blvd Extension Advance 42,500,000 7,000,000 (20,000,000) (13,000,000)
Specific Assigned Reserves
ARPA Revenue Replacement 990,187
Climate Action Plan 2,823,760 (498,157) (498,157)
Contribution to ISF 1,500,000 (1,500,000) (1,500,000)
Facade Improvement Grants 429,972
Library Tenant Improvement 1,000,000 (1,000,000) (1,000,000)
Civic Center Improvements (CIP) 3,010,829 (1,728,152) (1,728,152)
Pavement Management 2,000,000
Public Safety Complex (CIP) 1,022 (1,022) (1,022)
Village Parkway Pavement Reconstruction 15,900,156 (450,156) (450,156)
Unassigned
Unassigned -Unrealized Gains
Unassigned (Available)
TOTAL RESERVES
$44,347,900 $45,959,762
(14,061,701)
58,409,602
$249,736,608 $57,959,762
1,301,506
17,714,064
23,723
2,812,500
201,270
18,000,000
500,000
3,150,000
29,500,000
990,187
2,325,603
429,972
1,282,677
2,000,000
15,450,000
($45,911,176) $48,586 $44,396,486
(14,061,701)
58,458,188
(8102,618,107) ($44,658,345) $205,078,263
6