HomeMy WebLinkAbout4.19 Special Designation of General Fund Reserves for Fiscal Year 2022-23II
DUBLIN
CALIFORNIA
STAFF REPORT
CITY COUNCIL
DATE: .Line 6, 2023
TO: Honorable Mayor and City Councilmembers
FROM: Linda Smith, City Manager
Agenda Item 4.19
SU B.ECT: Special Designation of General Fund Reserves for Fiscal Year 2022-23
Prepared by: Lisa Hisatomi, Director of Administrative Services
EXECUTIVE SUMMARY:
The City Council will consider special designations of General Fund reserves for Fiscal Year 2022-
23.
STAFF RECOMMENDATION:
Adopt the Resolution Authorizing a Special Designation of General Fund Reserves for Fiscal Year
2022-23.
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 2022-23 Unassigned
(Cash Flow) Reserve is projected at $52,651,242 after Staff's recommendation of special
designations, which is equivalent to six months of the Fiscal Year 2023-24 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.
• Restricted - balance with constraints placed of the use of the resources which are either (a)
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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.
• Unassigned - used by General Fund for residual classification of positive funds.
Recommended Reserve Designations for Fiscal Year 2022-23
Staff is projecting an operating surplus of $15 million in Fiscal Year 2022-23 with an available
surplus of approximately $10 million, after subtracting budgeted transfers out to capital
improvement projects that are funded by Unassigned Reserves, and contributions to the City's
unfunded pension liability and facilities replacement fund.
The General Fund Reserves Summary (Attachment 2) provides a listing of reserve balances by
category. While the Fiscal Year 2022-23 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 projects and an additional payment to the City's prorated share of the
unfunded pension liability for the Dougherty Regional Fire Authority, 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 1) which confirms designations and
changes only of Committed Reserves for Fiscal Year 2022-23, as City Council approval of Assigned
Reserves is not necessary by resolution. Staff recommends the following reserve designations as
of June 30, 2023:
Committed Reserves:
• Reduce Economic Stability ($8,000,000) and One -Time Initiative - Capital ($4,500,000) and
reassign to Dublin Boulevard Extension Advance Reserve
In March 2023, the City Council approved the re -assignment of the two committed reserves
($12.5 million) to the Dublin Boulevard Extension Advance Reserve, as the Eastern Dublin
Transportation Impact Fee (EDTIF) program currently does not have sufficient cash flow to
cover the project costs. The General Fund reserve is only an advance of funding for the project,
which will be reimbursed by the EDTIF program as development occurs.
• Downtown Public Improvement Reserve - Increase $2,000,000
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.
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• 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:
• Dublin Boulevard Extension Advance - Increase $10,000,000
The City Council directed Staff to allocate $10 million of Fiscal Year 2022-23 General Fund
surplus to fill the funding gap of the Dublin Boulevard Extension. The reserve is a cash flow
advance to the EDTIF program and General Fund will be reimbursed by the fee program. With
the reassignment from Economic Stability and One -Time Initiative - Capital reserves and the
additional designation, $42.5 million will be set aside for the project.
• American Rescue Plan Act (ARPA) Revenue Replacement - Increase $324,308.50
Staff recommends the allocation of $324,308.50 to the American Rescue Plan Act Revenue
Replacement category. Per the Treasury Department rule, the use of such funds must go
towards current fiscal year expenditures. The City then shifts the General Fund savings into an
Assigned Reserve for future unexpected pandemic expenditures. In Fiscal Year 2022-23, the
City utilized the fund to offset General Fund expenditure for polices services. With the addition,
total reserve is $990,186.50.
• Library Improvements - Increase $1,000,000
At the City Council's direction during the budget adoption in May 2023, a new reserve has been
created and $1 million has been set aside for the Dublin Library improvements. This increases
the potential funding for the improvements to a total of $2,835,665.
• Pension and OPEB - Increase $1,000,000
Staff recommends the addition of the budgeted $1.0 million to this reserve to cover potential
future increases in the City's unfunded pension liability, for a total of $18 million.
• Village Parkway Pavement Reconstruction Reserve - Increase $5,000,000
In June 2020, the City Council approved the creation of the reserve to fund planning, design,
and reconstruction of Village Parkway north of Amador Valley Boulevard to the City limit. The
total estimated project cost is approximately $18.4 million and there is currently $10 million
set aside in the reserve. Staff recommends adding $5 million to the reserve. Staff will also
continue seeking potential outside funding sources for the project.
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.
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Strategy 4: Organizational Health
Objective A: Use existing reserves to address the unfunded Dougherty Regional Fire Authority
pension liability.
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:
1) Resolution Authorizing a Special Designation of General Fund Reserves for Fiscal Year 2022-23
2) Fiscal Year 2022-23 General Fund Reserves Summary
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Attachment 1
RESOLUTION NO. XX — 23
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
AUTHORIZING A SPECIAL DESIGNATION OF GENERAL FUND RESERVES FOR
FISCAL YEAR 2022-23
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 2023-24 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 2022-23 year-end
balance to the Committed fund balance as follows:
• Reduce Economic Stability reserve by $8,000,000 and One -Time Initiative —
Capital reserve by $4,500,000, and re -assign the funds to Dublin Boulevard
Extension Advance Assigned reserve.
• Increase the reserve for Downtown Public Improvement Reserve by
$2,000,000
• 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 6th day of June 2023 by the following
vote:
AYES:
NOES:
ABSENT:
ATTEST:
Mayor
City Clerk
Reso. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 1 of 1
774
FISCAL YEAR 2022-23 GENERAL FUND RESERVES
Attachment 2
RESERVE DESCRIPTION
on -Spendable
Prepaid Expenses
estricted
Cemetery Endowment
Developer Contribution - Downtown
Developer Contr - Heritage Park
Developer Contr - Nature Park
Section 115 Trust - Pension
Heritage Park Maintenance
Actual
2021-22
$10,541
10,541
$4,261,640
60,000
1,490,000
19,000
60,000
1,882,640
750,000
Increase
2022-23
Decrease
2022-23
Net
Change
Projected
2022-23
$10,541
10,541
$4,261,640
60,000
1,490,000
19,000
60,000
1,882,640
750,000
Committed
$73,346,367
$3,000,000 ($35,269,786) ($32,269,786)
$41,076,582
Advance to Public Facility Fee
Downtown Public Improvement
Economic Stability
Emergency Communications
Fire Svcs Pension/OPEB
Innovations & New Opportunity
One -Time Initiative - Capital
One -Time Initiative - Operating
Public Safety Reserve
Suecific Committed Reserves
Cemetery Expansion (CIP)
Contribution to Public Facility Fee
Cultural Arts Center (CIP)
Don Biddle Park (CIP)
Fallon Sports Park III Contingency
Lease Revenue Bond Payoff
Maintenance Facility (CIP)
Utility Undergrounding (CIP)
9,523,096
15,176,230
8,000,000
532,113
5,671,094
1,026,591
6,419,657
503,860
2,600,000
13,748
6,000,000
7,139,197
675,193
510,500
6,000,000
55,089
3,500,000
2,000,000
1,000,000
(9,523,096)
(426,221)
(8,000,000)
(3,460,000)
(132,093)
(5,920,149)
(13,748)
(6,964,197)
(675,193)
(100,000)
(55,089)
(9,523,096)
1,573,779
(8,000,000)
(3,460,000)
(132,093)
(5,920,149)
(13,748)
(6,964,197)
(675,193)
(100,000)
1,000,000
(55,089)
16,750,009
532,113
2,211,094
894,498
499,508
503,860
2,600,000
6,000,000
175,000
410,500
7,000,000
3,500,000
Assigned
$93,266,322
$29,824,309 ($23,375,736) $6,448,572
$99,714,894
Accrued Leave
Catastrophic Loss
CIP Carryovers
Fiscally Responsible Adjustment
Municipal Regional Permit
Non -Streets CIP Commitments
Operating Carryovers
Parks and Streets Contingency
Pension & OPEB
Relocate Parks Dept
Service Continuity
Dublin Blvd Extension Advance
Specific Assigned Reserves
ARPA Revenue Replacement
Climate Action Plan
Contribution to ISF
Facade Improvement Grants
Library Tenant Improvement
HVAC Replace. & Civic Ctr Improv. (CIP)
Pavement Management
Public Safety Complex (CIP)
Village Pkwy Pavement Reconstruction
Unassigned
Unassigned -Unrealized Gains
1,308,044
17,710,320
4,088,843
325,000
2,209,778
3,276,777
1,600,546
201,270
17,000,000
500,000
3,150,000
20,000,000
665,878
3,000,000
1,500,000
364,256
3,278,409
2,000,000
87,200
11,000,000
$52,972,635
(11,008,294)
1,000,000
22, 500, 000
324,309
1,000,000
5,000,000
$58,645,522
(4,088,843) (4,088,843)
(2,182,419)
(4,277)
(1,600,546)
(13, 742,559)
(62,000)
(1,307,892)
(87,200)
(300,000)
($58,966,915)
(2,182,419)
(4,277)
(1,600,546)
1,000,000
8,757,441
324,309
(62,000)
1,000,000
(1,307,892)
(87,200)
4,700,000
($321,392)
1,308,044
17,710,320
325,000
27,359
3,272,500
201,270
18,000,000
500,000
3,150,000
28,757,441
990,187
2,938,000
1,500,000
364,256
1,000,000
1,970,517
2,000,000
15,700,000
$52,651,242
(11,008,294)
Unassigned (Available)
63,980,929
63,659,537
TOTAL RESERVES
$223,857,505
$91,469,831 ($117,612,437) ($26,142,606) $197,714,899
775