CITY OF EMERYVILLE
EXPENDITURE AND RESERVE POLICIES
(September 2024)
GENERAL FUND
Economic Uncertainty Fund
The purpose of the Economic Uncertainty fund is to provide the fiscal capacity to absorb one-time problems without disrupting day-to-day operations and services and for more systemic and ongoing problems, to take time needed to fully identify the impacts and develop and implement a thoughtful longer-term strategy.
The City shall maintain a target reserve of 50% of the General Fund annual operating budget. Appropriations are to be reserved for emergency situations and limited to one-time or short-term (one or two fiscal years) use. Examples of such emergencies include, but are not limited to:
Unplanned, major event such as a catastrophic disaster requiring expenditures over 5% of the General Fund adopted budget.
Economic uncertainties, local disasters and other hardships or downturns in the local economy.
Budgeted revenue taken by another government entity.
Drop in projected/actual revenue of more than 5% of the General Fund adopted revenue budget.
Should the Economic Uncertainty fund be used and its level falls below the target amount of 50%, the goal is to replenish the fund within three fiscal years.
Disaster Reserve Fund
The purpose of the Disaster Reserve Fund is to provide funding in response to a disaster or other imminent or emergency event for which a declaration of a state of emergency has or could be declared.
The City shall maintain a target reserve of $5 million in the Disaster Reserve Fund.
In adopting this policy, it is the intent of the City Council that these funds remain uncommitted to permit the City Manager access to them without prior council approval in the event of a disaster or similar emergency.
Unassigned General Fund
This reserve is considered primarily a working capital requirement, bridging the gap between the time expenses are paid and the time revenues are collected. Undesignated reserve balances will fluctuate from time to time and reflect annual operating results. This fund has no minimum threshold although sufficient balances are maintained to provide contingencies for unseen operating or capital needs and cash flow requirements.
EMERYVILLE MEASURE F FUNDS
In March 2020, Emeryville voters approved Measure F, a one quarter-cent sales tax levy which has permissible uses that are codified by the measure in Emeryville Municipal Code, Section 3-3.354. Pursuant to these authorizations and limitations, the City Council has adopted the following policies for the expenditure and reserve of Measure F funds.
Expenditure Policy
In each budget year, Measure F funds shall be expended in the following order of priority:
Provision of funding for one Code Enforcement Officer position; Provision of funding for one Engineer position in the Public Works Department; Funding to cover the costs of the Emeryville Child Development Center (ECDC), including maintenance of the Measure F Reserve Fund at the Reserve Policy funding level; Funding to support the permissible public safety investments approved by voters, with position designations to be determined by the City Council; and Any funds not expended in a given budget year for the above priorities shall be allocated to the Measure F Reserve Fund Reserve Policy/Measure F Reserve Fund
The City shall create and maintain a Measure F Reserve Fund. The primary purpose of this fund is to provide funds to secure the long-term stability of the Emeryville Child Development Center (ECDC) in the event of economic uncertainty.
The City shall maintain a minimum balance of $4 million in the Measure F Reserve Fund. This $4 million is reserved exclusively for the use of supporting the Emeryville Child Development Center. Any funds deposited in the Measure F Reserve Fund in excess of the $4 million minimum shall be reserved for additional public safety staff positions with 50% for additional police officer positions or public safety support positions and 50% for additional firefighter positions.
Real Property Transfer Tax Policy
Real Property Transfer Tax revenues include both the Residential Property Transfer Tax and the Commercial Property Transfer Tax revenues. To the extent that the City Council has adopted any prior policies governing the use of these revenues, those policies are hereby rescinded.
Expenditure Policy
For each budget year, the Real Property Transfer Tax revenues shall be deposited in the City’s General Fund subject to the following priorities:
At the end of each fiscal year, a contribution from the General Fund shall be made in the amount necessary to replenish the Critical Needs Fund to a minimum balance of $1 million; At the end of each fiscal year, if the Real Property Transfer Tax revenues exceed their budgeted amount in the General Fund, including budget adjustments made during the fiscal year, 50% of the excess revenues will be allocated to the City’s Capital Improvement Program (CIP) and the remaining 50% will be allocated to the City’s unfunded liabilities, including pension liability, Other Post-Employment Benefits (OPEB) and the City’s Section 115 Pension Trust. Allocation of these funds shall be determined by the City Council, upon recommendation of the Budget and Governance Committee and the Budget Advisory Committee.
Critical Needs Fund
The City shall create and maintain a Critical Needs Fund for the purpose of providing the City with funds to address one-time maintenance and/or service needs for which the costs are not part of the City’s regular budget and which are not reasonably anticipated to be an ongoing cost that should be budgeted as part of the biannual budget process. The City Manager shall have discretion in authorizing the release of these funds for materials, labor and contracts necessary to complete or repair a City facility or support an urgent service need up to the City Manager’s approval authority. Priority shall be given to infrastructure maintenance, environmental projects and programs, housing and homelessness services, and public safety services or programs. 2