Title
Staff Report for Resolution Authorizing Transfers from General Fund Fund Balance to Self Insurance Fund and Economic Uncertainty Reserve
Staffreport
RECOMMENDATION
Staff recommends that the City Council approve the resolution authorizing transfers from the General Fund fund balance to the Economic Uncertainty reserve and to the Self Insurance Fund. The transfer to the Self Insurance Fund was administratively approved by the City Manager to facilitate the preparation of the City’s 2010-11 financial statements. This transfer should be confirmed by City Council approval of the resolution. A separate transfer to the Economic Uncertainty reserve is also recommended by the Finance Committee.
BACKGROUND
The Finance Committee reviewed the 2010-11 Budget Review and Budget Amendment at its meeting on September 9, 2011. The report confirmed that the 2010-11 year-end forecast for the General Fund reflected a significant improvement over the adopted budget, largely due to an increase in projected revenues. Revised projections reflected an operating (revenue over expenditures) increase of $2,356,200. The adopted budget had shown an operating deficit of ($3,079,000). As a result of this improvement in the revenue and expenditure balance, the General Fund fund balance was similarly improved to about $4,000,000.
The attached worksheet shows reserve funds totaling $12,723,000 for General Fund reserve designations and $308,000 for Self Insurance reserves. The Major Emergencies reserve totals $5,000,000, a consistent amount since 2007-08. The Economic Uncertainty reserve amounted to $10,033,000 in 2007-08 and has declined over the past three years to the current amount of $3,796,500. The Major Emergencies and the Economic Uncertainty reserves are currently 13% of the General Fund operating expenditures.
The City Council initially established a philosophy for financial reserve funds over twenty years ago. In 1989-90, the City Council adopted a series of financia...
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