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Home My WebLink About8.2 - 2714 Special Designation of General Fund Reserve Page 1 of 3 STAFF REPORT CITY COUNCIL DATE: June 18, 2019 TO: Honorable Mayor and City Councilmembers FROM: Christopher L. Foss, City Manager SUBJECT: Special Designation of General Fund Reserves for Fiscal Year 2018 -19 Prepared by: Colleen Tribby, Director of Administrative Services EXECUTIVE SUMMARY: In accordance with the City's Fund Balance and Reserves Policy, the City Council will consider special designations of General Fund reserves for Fiscal Year 2018 -19. STAFF RECOMMENDATION: Adopt the Resolution Authorizing a Special Designation of General Fund Reserves for Fiscal Year 2018-19. 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 r eserve categories. The Fiscal Year 2018-19 Unassigned (Cash Flow) Reserve is projected at $38,937,885, which is 5.6 months of the Fiscal Year 2019-20 General Fund 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. • 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 Page 2 of 3 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. • Unassigned - used by General Fund for residual classification of positive funds. Recommended Reserve Designations for Fiscal Year 2018 -19 The General Fund Reserves Summary (Attachment 1) provides a listing of reserve balances by category and includes a description of the re ason for any change. While the Fiscal Year 2018 -19 year -end balances are not yet final until the City closes its financial books, Staff can make reasonable assumptions about estimated reserve balances at this point. Many of the reserve changes are due to the spending down of Committed Reserves for budgeted capital improvement project expenses during Fiscal Year 201 8-19 and the spending down of carry-over reserves from the prior year. Other shifts are related to year-end accounting policies. This Staff Report also transmits a Resolution (Attachment 2) which confirms designations only of Committed Reserves for Fiscal Year 2018-19, as City Council approval of Assigned Reserves is not necessary by resolution. However, Staff seeks City Council direction on each of the following recommended designations: Committed Reserves: • Downtown Public Investment – Increase this reserve by $1,000,000 for a total of $4,000,000 for future investment in the Downtown; renamed from Downtown Public Improvements. • Fallon Sports Park – Increase this reserve by $3,000,000 for a total of $3,100,505 to allow for the potential of additional project costs for Phase 3 of the park. • Don Biddle Community Park – Create this new reserve with $1,000,000 in funding in the event of cost escalation as part of the park’s development. Assigned Reserves: (These reserves may further be adjusted when the City closes the Fiscal Year 2018-19 books) • Catastrophic Loss – Increase this reserve by $1,000,000 for a total of $15,765,599 in preparation for adding the new Public Safety Complex to the City’s asset inventory. Page 3 of 3 • Pension and OPEB – Increase this reserve by $2,000,000 for a total of $14,000,000 to protect the City against the impacts of potential lowered CalPERS discount rates. • Civic Center Renovation – Increase this reserve by $1,000,000 for a total of $2,962,100 to provide seed funding for the future renovation of the Civic Center wing that currently houses Police Services. • Contribution to Internal Service Funds (ISF) – Increase this reserve by $500,000 to end the year with a balance of $1,000,000 to cover the planned transfer from the General Fund to the Internal Service Funds that is included in the Fiscal Year 2019 - 20 Budget. STRATEGIC PLAN INITIATIVE: Strategy 1: Assure the City’s long-term financial sustainability. Strategy Objective 1A: Maintain strong conservative fiscal policies. NOTICING REQUIREMENTS/PUBLIC OUTREACH: None. ATTACHMENTS: 1. FY 2018-19 General Fund Reserves 2. Resolution Authorizing a Special Designation of General Fund Reserves for Fiscal Year 2018-19 GENERAL FUND FY 2018-19 RESERVES Reserve Balances Actual 2017-18 Increase 2018-19 Decrease 2018-19 NET CHANGE Projected 2018-19 Non-Spendable 7,432$ -$ -$ -$ 7,432$ Prepaid Expenses 7,432 - 7,432 Advance to Public Facility Fees - - - Advance to PERS Side Fund - - - - Restricted 1,938,000$ -$ -$ -$ 1,938,000$ Heritage Park Maintenance 750,000 - 750,000 Cemetery Endowment 60,000 - 60,000 Developer Contr - Downtown 1,049,000 - 1,049,000 Developer Contr - Nature Pk 60,000 - 60,000 Developer Contr - Heritage Pk 19,000 - 19,000 Committed 43,740,494$ 5,000,000$ (6,643,448)$ (1,643,448)$ 42,097,046$ Economic Stability 8,000,000 - 8,000,000 Public Safety Reserve 2,000,000 - 2,000,000 Downtown Public Investment 3,000,000 1,000,000 (545,375) 454,625 3,454,625 Economic Development 3,000,000 - 3,000,000 Emergency Communications 741,000 - 741,000 Fire Svcs OPEB 3,584,672 - 3,584,672 Innovations & New Opportunities 1,813,408 - 1,813,408 One-Time Initiative 6,341,408 (2,387,901) (2,387,901) 3,953,507 Specific Committed Reserves - Maintenance Facility 71,753 (71,753) (71,753) - Don Biddle Park 1,000,000 1,000,000 1,000,000 Cemetery Renovation & Expansion 5,270,876 (1,491,737) (1,491,737) 3,779,138 Fallon Sports Park 110,500 3,000,000 (9,995) 2,990,006 3,100,505 Civic Ctr Expansion 22,746 (22,746) (22,746) - Storm Drain Trash Capture 118,303 (118,303) (118,303) - Shannon Center Parking Lot - - - Utility Undergrounding 1,170,190 - 1,170,190 Contribution to Public Facility Fee 6,000,000 - 6,000,000 Dublin Sports Ground 2,495,638 (1,995,638) (1,995,638) 500,000 Assigned 57,267,840$ 4,824,000$ (14,615,505)$ (9,791,505)$ 47,476,335$ Accrued Leave 1,072,508 - 1,072,508 Operating Carryovers 2,169,276 (2,169,276) (2,169,276) - CIP Carryovers 4,272,555 324,000 (4,596,555) (4,272,555) - Non-Streets CIP Commitments 4,000,000 - 4,000,000 Catastrophic Loss 14,764,599 1,000,000 1,000,000 15,764,599 Service Continuity 3,150,000 - 3,150,000 Pension Rate Stabilization Plan 2,000,000 - 2,000,000 Chevron Debt Payoff 4,656,742 (4,656,742) (4,656,742) - Pension & OPEB 12,000,000 2,000,000 2,000,000 14,000,000 Fiscally Responsible Adj 325,000 - 325,000 Municipal Regional Permit 2,370,030 (192,932) (192,932) 2,177,098 HVAC Replacement 2,000,000 (2,000,000) (2,000,000) - Relocate Parks Dept 250,000 - 250,000 Parks and Streets Contingency 250,000 Specific Assigned Reserves - Civic Ctr Renovation-Police 1,962,100 1,000,000 1,000,000 2,962,100 Façade Improvement Grants 234,157 - 234,157 Contribution to ISF 1,500,000 500,000 (1,000,000) (500,000) 1,000,000 Fire Equipment Replacement 290,873 - 290,873 Unassigned 39,161,620$ 21,258,953$ (18,481,825)$ 2,777,127$ 41,938,747$ Unassigned-Unrealized Gains 3,000,862 3,000,862 Unassigned (Available)36,160,758 21,258,953$ (18,481,825) 2,777,127$ 38,937,885 TOTAL RESERVES 142,112,668$ 31,082,953$ (39,740,778)$ (8,657,825)$ 133,454,843$ ATTACHMENT 2 RESOLUTION NO. XX – 18 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ******************************* AUTHORIZING A SPECIAL DESIGNATION OF GENERAL FUND RESERVES FOR FISCAL YEAR 2018-19 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 2019-20 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 2018-19 year -end balance to the Committed fund balance sub -categories as follows: 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 18th day of June, 2019 by the following vote: Reserve Balances Actual 2017-18 Increase 2018-19 Decrease 2018-19 NET CHANGE Projected 2018-19 Committed 43,740,494$ 5,000,000$ (6,643,448)$ (1,643,448)$ 42,097,046$ Economic Stability 8,000,000 - 8,000,000 Public Safety Reserve 2,000,000 - 2,000,000 Downtown Public Investment 3,000,000 1,000,000 (545,375) 454,625 3,454,625 Economic Development 3,000,000 - 3,000,000 Emergency Communications 741,000 - 741,000 Fire Svcs OPEB 3,584,672 - 3,584,672 Innovations & New Opportunities 1,813,408 - 1,813,408 One-Time Initiative 6,341,408 (2,387,901) (2,387,901) 3,953,507 Specific Committed Reserves - Maintenance Facility 71,753 (71,753) (71,753) - Don Biddle Park 1,000,000 1,000,000 1,000,000 Cemetery Renovation & Expansion 5,270,876 (1,491,737) (1,491,737) 3,779,138 Fallon Sports Park 110,500 3,000,000 (9,995) 2,990,006 3,100,505 Civic Ctr Expansion 22,746 (22,746) (22,746) - Storm Drain Trash Capture 118,303 (118,303) (118,303) - Shannon Center Parking Lot - - - Utility Undergrounding 1,170,190 - 1,170,190 Contribution to Public Facility Fee 6,000,000 - 6,000,000 Dublin Sports Ground 2,495,638 (1,995,638) (1,995,638) 500,000 ATTACHMENT 2 AYES: NOES: ABSENT: ATTEST: ___________________ ___________________ City Clerk Mayor