HomeMy WebLinkAbout4.16 Special Designation of General Fund Reserves for Fiscal Year 2021-22STAFF REPORT
CITY COUNCIL
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Agenda Item 4.16
DATE:June 21, 2022
TO:Honorable Mayor and City Councilmembers
FROM:Linda Smith, City Manager
SUBJECT:Special Designation of General Fund Reserves for Fiscal Year 2021-22Preparedby: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 2021-22.
STAFF RECOMMENDATION:Adopt the Resolution Authorizing a Special Designation of General Fund Reserves for Fiscal Year 2021-22.
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 2021-22 Unassigned (Cash Flow) Reserve is projected at $70,483,123,after Staff’s recommendation of special designations, which is equivalent to nine months of the Fiscal Year 2022-23 General Fund operating budget.
DESCRIPTION:BackgroundGovernmental 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 2021-22Staff is projecting Fiscal Year 2021-22 with an operating surplus of $16.8 million with an available surplus of approximately $10.0 million, after subtracting budgeted transfers out to CIPs that are funded by Undesignated Reserve, contributions to pension unfunded liability and facilities replacement fund. The General Fund Reserves Summary (Attachment 2) provides a listing of reserve balances by category. While the Fiscal Year 2021-22 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 2021-22and 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 only of Committed Reserves for Fiscal Year 2021-22, 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 Improvement Reserve -Increase $2,200,000In 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, Staff recommends the addition of $2.2 million to this reserve.
One-Time Initiative - Capital- Increase $1,500,000In accordance with the City Council’s Strategic objective #4d: Conduct a feasibility study into the fiber connectivity between City facilities. Staff recommends the addition of $1.5 million to this reserve to provide future funding needs for major citywide technological and infrastructure upgrades.
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Lease Revenue Bond Payment - Increase $2,000,000In accordance with the City Council’s Strategic objective #4c: Make annual contributions to reserves for the early payoff of the energy efficiency bonds. Staff recommends the addition of $2.0 million to this reserve.Assigned Reserves:
American Rescue Plan Act (ARPA) Revenue Replacement – Create the new reserve and add $665,878The City Council has allocated $665,878 from the first tranche of American Rescue Plan Act Revenue Replacement category. Per the Treasury Department rule, the use of such funds must go towards current fiscal year City expenditures and may not be directly deposited into a reserve fund. The City could then shift the General Fund savings into an Assigned Reserve for future unexpected pandemic expenditures. The City has utilized the fund to offset General Fund expenditure for polices services contract cost and purchase of computers.
Non-Streets CIP Commitments -Increase $1,000,000In accordance with the City Council’s Strategic objective #3b: Provide on-going condition assessments of aging city facilities and assets. Staff recommends the addition of $1.0 million to this reserve to fund future capital endeavors on infrastructure maintenance and reinvestment.
Pavement Management - Create the new reserve and add $2,000,000In accordance with the City Council’s Strategic objective #3c: c.Explore finance options for long-term pavement management needs. Staff recommends the creation of the reserve and add $2.0 million to this reserve to provide funding to optimize the pavement condition within the City.
STRATEGIC PLAN INITIATIVE:Special Designation of General Fund Reserves is directly associated with the Two-Year Strategic Plan for Fiscal Years 2022-23 and 2023-24.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:The City Council Agenda was posted.
ATTACHMENTS:1) Resolution Authorizing a Special Designation of General Fund Reserves for Fiscal Year 2021-222) Fiscal Year 2021-22 General Fund Reserves
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Attachment 1
Reso. No. XX-22, Item X.X, Adopted 06/21/22 Page 1 of 1
RESOLUTION NO. XX – 22
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
AUTHORIZING A SPECIAL DESIGNATION OF GENERAL FUND RESERVES FOR
FISCAL YEAR 2021-22
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 2022-23 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 2021-22 year-end balance to the Committed
fund balance as follows:
Increase the reserve for Downtown Public Improvement Reserve by $2,200,000
Increase the reserve for One-Time Initiative - Capital by $1,500,000
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 21st day of June 2022, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
______________________________
Mayor
ATTEST:
_________________________________
City Clerk
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Attachment 2FISCAL YEAR 2021-22 GENERAL FUND RESERVES
RESERVE DESCRIPTION
Actual
2020-21
Increase
2021-22
Decrease
2021-22
Net
Change
Projected
2021-22
Non-Spendable $13,266 $13,266
Prepaid Expenses 13,266 13,266
Restricted $4,493,314 $4,493,314
Cemetery Endowment 60,000 60,000
Developer Contr - Downtown 1,490,000 1,490,000
Developer Contr - Heritage Pk 19,000 19,000
Developer Contr - Nature Pk 60,000 60,000
Section 115 Trust - Pension 2,114,314 2,114,314
Heritage Park Maintenance 750,000 750,000
Committed $70,694,542 $5,700,000 ($16,634,077)($10,934,077)$59,760,465
Advance to Public Facility Fee 9,857,639 (7,074,270)(7,074,270)2,783,369
Downtown Public Improvement 13,000,000 2,200,000 (200,000)2,000,000 15,000,000
Economic Development 53,319 (53,319)(53,319)
Economic Stability 8,000,000 8,000,000
Emergency Communications 532,113 532,113
Fire Svcs Pension/OPEB 5,671,094 5,671,094
Innovations & New Opport 1,031,719 (137,220)(137,220)894,498
One-Time Initiative - Capital 4,966,110 1,500,000 (1,476,078)23,922 4,990,032
One-Time Initiative - Operating 503,860 503,860
Public Safety Reserve 2,600,000 2,600,000
Specific Committed Reserves
Cemetery Expansion (CIP)1,173,549 (1,173,549)(1,173,549)
Contribution to Public Facility Fee 6,000,000 6,000,000
Cultural Arts Center 4,539,197 (4,364,197)(4,364,197)175,000
Don Biddle Park (CIP)2,100,000 (2,100,000)(2,100,000)
Fallon Sports Park 3 Contingency 3,110,500 3,110,500
Lease Revenue Bond Payment 4,000,000 2,000,000 2,000,000 6,000,000
Maintenance Facility (CIP)55,443 (55,443)(55,443)
Utility Undergrounding (CIP)3,500,000 3,500,000
Assigned $66,743,520 $4,665,878 ($1,810,019)$2,855,859 $69,599,380
Accrued Leave 1,296,514 1,296,514
Catastrophic Loss 17,710,320 17,710,320
CIP Carryovers 2,735,111 2,735,111
Fiscally Responsible Adj 325,000 325,000
Municipal Regional Permit 2,212,931 (418,403)(418,403)1,794,528
Non-Streets CIP Commitments 2,366,100 1,000,000 (93,600)906,400 3,272,500
Operating Carryovers 1,882,745 1,882,745
Parks and Streets Contingency 201,270 201,270
Pension & OPEB 16,000,000 1,000,000 1,000,000 17,000,000
Relocate Parks Dept 500,000 500,000
Service Continuity 3,150,000 3,150,000
Specific Assigned Reserves
ARPA Revenue Replacement (New)665,878 665,878 665,878
Climate Action Plan 3,000,000 3,000,000
Contribution to ISF 1,500,000 1,500,000
Façade Improvement Grants 374,157 374,157
HVAC Replace. & Civic Ctr Improv. (CIP)3,337,009 (1,145,652)(1,145,652)2,191,357
Pavement Management (New)2,000,000 2,000,000 2,000,000
Public Safety Complex (CIP)152,363 (152,363)(152,363)
Village Pkwy Pavemt Recon 10,000,000 10,000,000
Unassigned $67,819,852 $18,444,095 ($11,264,065)$7,180,030 $74,999,883
Unassigned-Unrealized Gains 4,516,760 4,516,760
Unassigned (Available)63,303,092 70,483,123
TOTAL RESERVES $209,764,495 $28,809,973 ($29,708,160)($898,187)$208,866,308
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