FUND BALANCE POLICY
CITY COUNCIL
OCTOBER 10, 2023
NICK PEGUEROS
CHIEF FINANCIAL OFFICER
REQUESTED ACTION
Adopt recommended Resolution to:
• Rescind existing Reserve Policy
• Approve a Fund Balance Policy
2 FUND BALANCE POLICY
• Short-term fiscal stability – smooth impacts of:
• Emergency
• Cyclical economic downturns
• Long-term fiscal stability – investments in:
• Infrastructure
• Long-term liabilities such as unfunded pension liabilities • Compliance with generally accepted accounting principles (GAAP)
3 GENERAL FUND RESERVES
Recommended Reserve
Current Reserve Current Target Proposed Target & Notes
Contingency Reserve n/a 10% of General Fund operating expenditures.
Approx. $6.5MM FY24
General Fund $1.5MM Consolidated with Contingency Reserve Emergency Disaster Fund $3.0MM Consolidated with Contingency Reserve 4 GENERAL FUND RESERVES
Recommended Reserve
Current Reserve Current Target Proposed Target & Notes
Contingency Reserve n/a 10% of General Fund operating expenditures.
Approx. $6.5MM FY24
General Fund $1.5MM Consolidated with Contingency Reserve Emergency Disaster Fund $3.0MM Consolidated with Contingency Reserve Budget Stabilization Reserve n/a 20% of General Fund operating expenditures.
Approx. $13.0MM in FY24
General Fund Reserve 25% of General Fund
budget. Approx.
$16.25MM in FY24
Renamed Budget Stabilization Reserve
5 GENERAL FUND RESERVES
Recommended Reserve
Current Reserve Current Target Proposed Target & Notes
Contingency Reserve n/a 10% of General Fund operating expenditures.
Approx. $6.5MM FY24
General Fund $1.5MM Consolidated with Contingency Reserve Emergency Disaster Fund $3.0MM Consolidated with Contingency Reserve Budget Stabilization Reserve n/a 20% of General Fund operating expenditures.
Approx. $13.0MM in FY24
General Fund Reserve 25% of General Fund
budget. Approx.
$16.25MM in FY24
Renamed Budget Stabilization Reserve
One-Time Revenue Reserve n/a Non-recurring revenue without an intended purpose
General Capital/ One-Time Revenue
Reserve
$5.0MM Renamed One-Time Revenue Reserve
6 OTHER ADDITIONS
• Fund balance designations
• Clarity on classification
• Required reporting on informal interfund loans
• Use of unassigned fund balance
• Fund definitions
7 NEXT STEPS
October 24th Council meeting
• Preliminary fiscal year 2022-23 year-end close
• Reserves re-balancing
• Interfund loans report
• Fiscal year 2023-24 First Quarter Report
8 QUESTIONS
9 10
GENERAL FUND RESERVES
Recommended Reserve
Current Reserve Current Target Proposed Target
Contingency Reserve n/a 10% of General Fund operating expenditures.
Approx. $6.5MM FY24
General Fund $1.5MM Consolidated with Contingency Reserve Emergency Disaster Fund $3.0MM Consolidated with Contingency Reserve Budget Stabilization Reserve n/a 20% of General Fund operating expenditures.
Approx. $13.0MM in FY24
General Fund Reserve 25% of General Fund
budget. Approx.
$16.25MM in FY24
Renamed Budget Stabilization Reserve
One-Time Revenue Reserve n/a Non-recurring revenue without an intended purpose
General Capital/ One-Time Revenue
Reserve
$5.0MM Renamed One-Time Revenue Reserve
11 TEMPORARY PURCHASING
AUTHORITY FOR POLICE
PATROL VEHICLES
CITY COUNCIL
OCTOBER 10, 2023
NICK PEGUEROS
CHIEF FINANCIAL OFFICER
REQUESTED ACTION
Adopt recommended Resolution to:
• Waive bidding procedures for budgeted public safety vehicles previously bid and authorized by City Council in the amount of $830,241 • Authorize City Manager to execute purchase agreements to acquire and outfit up to 9 police patrol vehicles in an amount not to exceed $830,241 2 CURRENT VEHICLE ACQUISITION
PROCESS
Staff
• Evaluate fleet needs
• Recommend vehicle replacements in
budget
Council • Considers budget request
• Adopts a budget
Staff
• Source vehicles, if total purchase is over
$75,000 then
• Recommend contract award to vendor(s)
Council • Consider and approve
recommended contracts
3 9 AUTHORIZED AND BUDGETED VEHICLES
PENDING DELIVERY
Vehicles Pending Delivery Fiscal Year Authorized by
City Council
Authorized
Budget
4 Police patrol vehicles 2021-22 $367,494
2 Police patrol vehicles 2022-23 $183,747
3 Police patrol vehicles 2023-24 $279,000
Total $830,241
4 CHALLENGES IMPACTING DELIVERY
Staff
• Evaluate fleet needs
• Recommends vehicle replacements in
budget
Council • Considers budget request
• Adopts a budget
Staff
• Source vehicles, if total purchase is over
$75,000 then
• Recommend contract award to vendor(s)
Council • Consider and approve
recommended contracts
5 Low vehicle supply
• Order backlog
• Supply chain disruptions
• Impacts of UAW negotiations
RECOMMENDATION
City staff sources Police
patrol vehicles;
recommends purchase
City Manager evaluates
recommendation
considering need and
cost
If approved by the City
Manager, staff executes
purchase(s)
Report purchase(s) to
City Council
6 REQUESTED ACTION
Adopt recommended resolution to:
• Waive bidding procedures for budgeted public safety vehicles previously bid and authorized by City Council in the amount of $830,241 • Authorize City Manager to execute purchase agreements to acquire and outfit up to 9 police patrol vehicles in an amount not to exceed $830,241 7 QUESTIONS