Attachment A
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF SANTA MARIA, CALIFORNIA,
APPROVING AN UPDATED CITY GENERAL FUND RESERVE POLICY
AND DIRECTING THE DIRECTOR OF FINANCE TO TAKE STEPS TO
ESTABLISH A SECTION 115 TRUST AND TO FUND THOSE ACCOUNTS
WHEREAS, the City has current policies on establishing and maintaining Reserve funds, and support for Reserves are a best practice recommendation from the Government Finance Officers Association (GFOA) and various credit rating agencies; and WHEREAS, the City’s current policies on reserves have been reviewed and policy modifications are recommended in accordance with GFOA guidance, credit agency recommendations, and best practices; and
WHEREAS, the GFOA supports Section 115 irrevocable trusts because they help governments responsibly manage long-term liabilities for other post-employment benefit and pension costs.
NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of the City of Santa Maria, California, as follows:
1. A new General Fund reserve policy, outlined as Attachment B is approved, and authorizes:
a. The “Economic Stabilization” Reserve shall be retitled to the “General Reserve” with a savings target of 16.7 percent of the prior fiscal year’s budgeted General Fund and Measure U Fund operating expenditures; b. Maintaining the Local Economic Augmentation Fund reserve with the target of 10 percent to 15 percent of the prior fiscal year’s budgeted General Fund and Measure U Fund operating expenditures; c. Establishing an Emergency/ Catastrophic Reserve with the target of 5 percent to 10 percent of the prior fiscal year’s budgeted General Fund operating expenditures;
d. Establishing a General Fund Appropriation for C ontingencies with the target of 5 percent of the fiscal year’s budgeted General Fund operating expenditures. Appropriations for Contingencies should not be less than 1 percent of the approved General Fund operating expenditures in any given year;
e. The Director of Finance is authorized to adjust reserves in the City financial system in accordance with the policy and year -end financial actual results as outlined; and
Attachment A
2. The Director of Finance is authorized and directed to take the steps necessary to establish a Section 115 Irrevocable Trust with the intent to prefund the City’s long-term debt for other post-employment benefits and unfunded pension liability costs.
3. The Chief Deputy City Clerk is hereby authorized to make minor changes herein to address clerical errors, so long as substantial conformance of the intent of this document is maintained. In doing so, the Chief Deputy City Clerk shall consult with the City Manager and City Attorney concerning any changes deemed necessary.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Santa Maria, California, held this 4th day of August 2026.
ATTEST:
Chief Deputy City Clerk
Mayor
APPROVED AS TO FORM:
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City Attorney
APPROVED AS TO CONTENT:
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Department Director
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City Manager