Loading...
HomeMy WebLinkAbout4.8 - 3277 FY 19-20 General Fund Reserve Designations Page 1 of 3 STAFF REPORT CITY COUNCIL DATE: June 16, 2020 TO: Honorable Mayor and City Councilmembers FROM: Linda Smith, City Manager SUBJECT: Special Designation of General Fund Reserves for Fiscal Year 2019 -20 Prepared by: Lisa Hisatomi, 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 2019 -20. STAFF RECOMMENDATION: Adopt the Resolution Authorizing a Special Designation of General Fund Reserves for Fiscal Year 2019-20. 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 2019-20 Unassigned (Cash Flow) Reserve is projected at $68,008,054, which is equivalent to 10 months of the Fiscal Year 2020-21 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 p rior 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 2019-20 The General Fund Reserves Summary (Attachment 1) provides a listing of reserve balances by category. While the Fiscal Year 2019 -20 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 2019 -20 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 2019-20, 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: • Fire Service Pension/OPEB - Increase this reserve by $317,325 utilizing budget savings from the FY 2018-19 fire service contract that was carried over to Fiscal Year 2019-20, for a total of $3,901,997, to fund both pension and OPEB obligations; renamed from Fire Services OPEB. • Cultural Arts Center - Create the new reserve and transfer $3,779,138 from the reserve for the Cemetery Expansion to fund the additional identified programmatic elements and needed structural upgrades in the Cultu ral Arts Center project, as identified in the schematic design approved by the City Council. • Advance to Public Facility Fee - Create a new reserve and set aside half of the expected surplus in FY 2019-20 to advance the construction of Wallis Ranch Community Park, Jordan Ranch Neighborhood Square, and Library Tenant Improvement projects. These projects are included in the 2020-2025 Capital Improvement Program but are funded by the Public Facility Fees Fund which currently has insufficient cash flow to cover these projects. The year-end surplus is Page 3 of 3 estimated $8.8 million, therefore the addition to this reserve is recommended at $4.4 million. The reserve may further be adjusted when the year-end balance is finalized. • Rename the current Advance to Public Facility Fee reserve in the amount of $6 million to Contribution to Public Facility Fee as this is the anticipated shortfall in the Fee Program. Assigned Reserves: • Village Parkway Pavement Reconstruction - Create this reserve to set aside $2 million each year to accumulate funding for the planning, design, and reconstruction of Village Parkway north of Amador Valley Boulevard to the City limit. The estimated total project cost is $10 million. The project is currently identified in the Future Years section of the recently adopted Capital Improvement Program. • Contribution to Internal Service Funds (ISF) – Increase this reserve by $1,000,000 to cover the planned transfer from the General Fund to the Internal Service Funds that is included in the Fiscal Year 2020-21 Budget. STRATEGIC PLAN INITIATIVE: None. NOTICING REQUIREMENTS/PUBLIC OUTREACH: None. ATTACHMENTS: 1. Fiscal Year 2019-20 General Fund Reseves 2. Resolution Authorizing a Special Designation of General Fund Reserves for Fiscal Year 2019-20 FY 2019-20 GENERAL FUND RESERVES RESERVE DESCRIPTION Actual 2018-19 Increase 2019-20 Decrease 2019-20 Net Change Projected 2019-20 Non-Spendable $12,818 $12,818 Prepaid Expenses 12,818 12,818 Restricted $1,938,000 $441,000 $441,000 $2,379,000 Heritage Park Maintenance 750,000 750,000 Cemetery Endowment 60,000 60,000 Developer Contr - Downtown 1,049,000 441,000 441,000 1,490,000 Developer Contr - Nature Pk 60,000 60,000 Developer Contr - Heritage Pk 19,000 19,000 Committed $47,267,326 $8,496,463 ($14,178,995)($5,682,532)$41,584,794 Economic Stability 8,000,000 8,000,000 Public Safety Reserve 2,000,000 2,000,000 Downtown Public Impr 4,000,000 (545,375)(545,375)3,454,625 Economic Development 2,806,486 (2,806,486)(2,806,486) Emergency Communications 532,113 (1,736)(1,736)530,377 Fire Svcs Pension/OPEB 3,584,672 317,325 317,325 3,901,997 Innovations & New Opport 1,133,753 (239,299)(239,299)894,455 One-Time Initiative - Operating 503,860 503,860 One-Time Initiative - Capital 5,837,548 (2,387,901)(2,387,901)3,449,647 Specific Committed Reserves Maintenance Facility (CIP)71,753 (71,753)(71,753) Don Biddle Park (CIP)1,000,000 (600,000)(600,000)400,000 Cemetery Expansion (CIP)5,270,875 (5,270,875)(5,270,875) Cultural Arts Center (CIP)3,779,138 3,779,138 3,779,138 Fallon Sports Park II (CIP)110,500 (9,995)(9,995)100,505 Fallon Sports Park III Contingency 3,000,000 3,000,000 Utility Undergrounding (CIP)1,170,190 1,170,190 Advance to Public Facility Fee 4,400,000 4,400,000 4,400,000 Contribution to Public Facility Fee 6,000,000 6,000,000 Dublin Sports Ground (CIP)2,245,576 (2,245,576)(2,245,576) Assigned $60,771,811 $5,776,949 ($19,901,961)($14,125,012)$46,646,798 Accrued Leave 1,001,744 1,001,744 Operating Carryovers 2,805,459 1,418,394 (4,223,853)(2,805,459) CIP Carryovers 4,006,912 1,358,555 (5,365,467)(4,006,912) Non-Streets CIP Commitments 2,462,100 2,462,100 Catastrophic Loss 15,764,599 15,764,599 Service Continuity 3,150,000 3,150,000 Pension Rate Stabilization Plan 2,000,000 2,000,000 Pension & OPEB 14,000,000 14,000,000 Fiscally Responsible Adj 325,000 325,000 Municipal Regional Permit 2,360,673 (1,183,575)(1,183,575)1,177,098 HVAC Replacement (CIP)2,000,000 (2,000,000)(2,000,000) Relocate Parks Dept 250,000 250,000 Parks and Streets Contingency 250,000 250,000 Specific Assigned Reserves Civic Ctr Renovation-Police Wing 2,962,100 2,962,100 Village Pkwy Pavement (Future CIP)2,000,000 2,000,000 2,000,000 Public Safety Complex (CIP)5,900,000 (5,900,000)(5,900,000) Façade Improvement Grants 304,157 304,157 Contribution to ISF 1,000,000 1,000,000 (1,000,000)1,000,000 Fire Equipment Replacement 229,066 (229,066)(229,066) Unassigned $61,235,819 $34,080,956 ($25,121,831)$8,959,126 $70,194,945 Unassigned-Unrealized Gains 2,186,891 2,186,891 Unassigned (Available)59,048,929 68,008,054 TOTAL RESERVES $171,225,773 $48,795,368 ($59,202,787)($10,407,419)$160,818,355 ATTACHMENT 1 RESOLUTION NO. XX – 20 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ******************************* AUTHORIZING A SPECIAL DESIGNATION OF GENERAL FUND RESERVES FOR FISCAL YEAR 2019-20 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 2020-21 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 2019-20 year-end balance to the Committed fund balance as follows: • Create a new reserve for Cultural Arts Center and transfer $3,779,138 from reserve for Cemetery Expansion • Increase the reserve for Fire Service Pension/OPEB by $317,325 • Create a new reserve for Advance to Public Facility Fee, funded with half of the Fiscal Year 2019-20 surplus after the year-end balance is finalized, for Wallis Ranch Community Park, Jordan Ranch Neighborhood Square, and Library Tenant Improvements projects. 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 16th day of June 2020 by the following vote: AYES: NOES: ABSENT: ___________________ Mayor ATTEST: ___________________ City Clerk