FINANCE COMMITTEE AGENDA
March 10, 2023 at 8:30 am
Meeting will be held in the Community Center
33 Church Street
Sutter Creek, CA
1. Call to Order – 8:30 AM.
2. Public Matters not on the Agenda
This is an opportunity for the public to comment on items that are not on the Committee’s agenda.
3. General Fund and Capital Fund Reserve Policies
Recommendation: For information and discussion.
4. Adjournment
In compliance with the Americans with Disabilities Act, if you are a disabled person and you need a disability-related modification or accommodation to participate in this meeting, please contact City Hall staff at (209) 267-5647 or (209) 267-0639 (fax). 18 Main St., Sutter Creek, CA 95685 • Telephone: (209)267-5647 • Fax: (209)267-0639 • TTY: 711 The City of Sutter Creek is an equal opportunity service provider and employer TO:
MEETING DATE:
FROM:
SUBJECT:
STAFF REPORT
THE MEMBERS OF THE FINANCE COMMITTEE
MARCH 10, 2023
JODI STENECK, ACCOUNTING SUPERVISOR
GENERAL OPERATING AND GENERAL CAPITAL RESERVE
POLICIES
RECOMMENDATION:
Review and approve the General Operating Reserve fund policy and the General Capital Reserve fund policy.
BACKGROUND:
The City of Sutter Creek does not have a reserve fund policy for General Operating or General Capital.
As the City has been budgeting into a General Operating Reserve fund and a General Capital Reserve fund it was discussed that a policy should be created to determine the process, use of funds, repayment, and a reasonable fund balance.
DISCUSSION:
The General Operating Reserve initial goal is 40% of the GF adopted annual budget revenues. Using the 2022-23 adopted budget with GF revenue of $2,187,545 the Operating Reserve fund goal would be $875,018. This may take several years to reach, but staff is recommending combining the General Saving (Fund 86) which has a fund balance of $50,029 to the General Operating Reserve fund which is currently $248,813 for a total of $298,842. Per the 22-23 budget, 1% ($21,875) of GF revenue will be transferred to the General Operating reserve which will increase the fund balance to $320,717.
BUDGET IMPACT:
None
IteItemm 3
City of Sutter Creek
General Capital Reserve Policy
Section 1: Purpose
The purpose of this policy is for the City of Sutter Creek to formally establish minimum levels and reserve targets of the General Capital Reserve fund balance. The purpose of the capital reserves is to ensure a strong foundation for the financing and completion of capital projects, an important component of capital improvement planning is long-term financial planning for future infrastructure improvements and acquisitions. These funds are reserved specifically for capital needs and are not to be used for generally operating purchases.
Section 2: Policy
The City of Sutter Creek is establishing reserves with the following designations:
General Capital Reserve:
The General Capital Reserve fund is a permanent fund for capital improvements that are critical for the continued operation of municipal services. Capital Reserves are directly tied to planned capital needs, with an estimated allowance for emergency repairs and replacement.
The City Manager will first evaluate the City’s financial condition and make a recommendation to City Council as to the need to makes contributions to the General Capital Reserve. This action will be done annually as part of the budget adoption and will include a capital asset report. The report will include estimated repair and replacement costs for a two-year period as well as the annual reserve funding amounts required to meet these obligations.
Use of Reserve Funds:
Capital Reserve balances are to be used for the repair and replacement of vehicles, equipment, building repair, and land improvements as approved by the City Council. Reserve funds may also be used to repair or replace items deemed necessary for continued public health and safety.
All uses of the General Capital Reserve must be approved by resolution of the City Council with a four-fifths vote. In the event of an emergency, purchases of equipment, materials, supplies or services determined by the City Manager to be necessary to meet an emergency which threatens the public health, safety or welfare, may be made without prior City Council approval, however the purchases will be provided to the City Council at the earliest practicable meeting time.
All Capital Reserve fund uses are to be repaid to the reserve over a period to be determined by the City Council at the time of usage approval, with a target repayment period of no more than three years.
Year-End Excess Revenue
As part of the annual budget adoption process, or at any time the City Manager deems necessary, the City Manager would recommend whether the excess year-end funds could be used as onetime funding to increase the Capital Reserve Fund.
Other Funds
In conjunction with approving the General Capital Fund Reserve Policy, the City Council expresses it intent to evaluate other Special Revenue and Enterprise funds to establish appropriateness of developing formal fund-specific reserve policies.
City of Sutter Creek
General Operating Reserve Policy
Section 1: Purpose
The purpose of this policy is for the City of Sutter Creek to formally establish General Operating Reserve fund balances based on budgeted revenue. The purpose of the operating reserves is to mitigate the effect of unanticipated situations such as natural disasters and unforeseen events.
Reserves also provide the City with stability in times of economic fluctuations that are nonreoccurring and/or unanticipated. Reserves help provide for a smooth, temporary transition to prevent drastic or devasting changes in service levels caused by changes in the City’s financial situation.
Section 2: Policy
The City of Sutter Creek is establishing reserves with the following designations:
General Operating Reserve:
The General Operating Reserve goal is 40% of the General Fund’s adopted annual budget revenues.
The City Manager will first evaluate the City’s financial condition and make a recommendation to City Council as to the need to make contributions to the General Operating Reserve. This action is done as part of the annual budget adoption; however, these actions can be completed at any time the City Manager deems necessary.
Use of Reserve Funds:
The following is provided to govern the appropriate use and replenishment of the City’s General Operating Reserve fund. The City Manager must present a report to the City Council to justify the use of the General Operating Reserve and provide the circumstances of the fiscal emergency.
All uses of the General Operating Reserve must be approved by resolution of the City Council with a three-fifths vote. Any such uses are to be repaid to the reserve over a period to be determined by the City Council at the time of usage approval, with a target repayment period of no more than two years.
Year-End Excess Revenue
As part of the annual budget adoption process, or at any time the City Manager deems necessary, the City Manager would recommend whether the year-end excess funds could be used as onetime funding to reach the General Operating Reserve goal.
Other Funds
In conjunction with approving the General Operating Fund Reserve Policy, the City Council expresses it intent to evaluate other Special Revenue, Enterprise and Capital funds to establish appropriateness of developing formal fund-specific reserve policies.
Funds Beg. Balance Cash In Cash Out Adj. Balance
01 - General Fund 4,823 172,062 149,559 (3,790) 23,536
39 -General Reserve 695,718 - - - 695,718
86 - General Savings 50,118 - - - 50,118
95 - General Operating Reserve 249,255 - - - 249,255
96 - General Capital Reserves 49,557 - - - 49,557
04 - Crestview Light District 4,334 - 84 - 4,250
07 - Cemetary (11,095) - 180 - (11,275)
17 - Monteverde Store (230) 265 120 - (85)
29 - Swimming Pool (44,696) - 1,057 (1) (45,754)
59 - Auditorium & Facility Rentals (16,112) 6,405 9,915 (78) (19,700) 03 - Streets and Sidewalks (19,263) 12,349 7,702 (30) (14,646) 91 - Road CIP 84,504 4,977 - - 89,481
10 - Sewer M&O 926,434 159,856 93,765 33,067 1,025,592
11 - Sewer WCRF Hook up Fees 604,473 - - - 604,473
12 - Sewer Line Replacement 605,263 - - - 605,263
14 - Sewer Cap Reserves 1,083,761 - - - 1,083,761
15 - Sewer Debt Service (10,755) - - - (10,755)
80 - Effluent Disposal (259,749) 24,305 25,558 (64) (261,066) 09 - HMGP Hazard Mitig. Grant Proj 1,214 - - - 1,214
19 - Knights Foundary Restore 2,957 - - - 2,957
20 - FEMA 9,162 - - - 9,162
28 - Public Safety/AB109, Grant 5,137 - - - 5,137
50 - COPS Fast Program 2,640 - - - 2,640
57 - First Time Home Buyers Grant - 187,100 - - 187,100 30-36 Traffic Mitigation Total 220,916 - - - 220,916
37 - Parking In Lieu 65,121 - - - 65,121
38 - Fire Service Fund 26,119 - - - 26,119
42 - AB1600 173,957 - - - 173,957
73 - Park Impact Fee 45,206 - - - 45,206
89 - Capital Improvement Projects (267,443) - 26,341 - (293,784) 48 - Covid-19 American Recovery Act 573,773 - - - 573,773 81 - Visitor Center (12,293) 876 3,613 - (15,030)
87 - Refuse 3,346 - - - 3,346
88 - City Council Discretionary 21,440 - - - 21,440
92 - Pension Reserve 135,821 - - - 135,821
93 - Vehicle Cap Reserve 17,142 - - - 17,142
94 - Vacation Cash Out and Accruals (184) - - - (184)
2022-23
Cash Balance Report
for the month of January 2023
Totals 5,020,371 568,195 317,894 29,104 5,299,776
Funds Beg. Balance Cash In Cash Out Adj. Balance
GF Operations:
01 - General Fund 4,823 172,062 149,559 (3,790) 23,536
03 - Streets and Sidewalks (19,263) 12,349 7,702 (30) (14,646) 04 - Crestview Light District 4,334 - 84 - 4,250
07 - Cemetary (11,095) - 180 - (11,275)
17 - Monteverde Store (230) 265 120 - (85)
29 - Swimming Pool (44,696) - 1,057 (1) (45,754)
59 - Auditorium & Facility Rentals (16,112) 6,405 9,915 (78) (19,700) 81 - Visitor Center (12,293) 876 3,613 (15,030)
87 - Refuse 3,346 - - - 3,346
GF Capital:
30-36 Traffic Mitigation Total 220,916 - - - 220,916
37 - Parking In Lieu 65,121 - - - 65,121
38 - Fire Service Fund 26,119 - - - 26,119
42 - AB1600 173,957 - - - 173,957
73 - Park Impact Fee 45,206 - - - 45,206
89 - Capital Improvement Projects (267,443) - 26,341 - (293,784) 91 - Road CIP 84,504 4,977 - - 89,481
93 - Vehicle Cap Reserve 17,142 - - - 17,142
96 - General Capital Reserves 49,557 - - - 49,557
Sewer Operations:
10 - Sewer M&O 926,434 159,856 93,765 33,067 1,025,592
15 - Sewer Debt Service (10,755) - - - (10,755)
80 - Effluent Disposal (259,749) 24,305 25,558 (64) (261,066) Sewer Capital:
11 - Sewer WCRF Hook up Fees 604,473 - - - 604,473
12 - Sewer Line Replacement 605,263 - - - 605,263
14 - Sewer Cap Reserves 1,083,761 - - - 1,083,761
Special/Restricted:
09 - HMGP Hazard Mitig. Grant Proj 1,214 - - - 1,214
19 - Knights Foundary Restore 2,957 - - - 2,957
20 - FEMA 9,162 - - - 9,162
28 - Public Safety/AB109, Grant 5,137 - - - 5,137
48 - Covid-19 American Recovery Act 573,773 - - - 573,773 50 - COPS Fast Program 2,640 - - - 2,640
2022-23
Cash Balance Report
for the month of January 2023
57 - First Time Home Buyers - 187,100 - - 187,100
88 - City Council Discretionary 21,440 - - - 21,440
Reserves:
39 -General Reserve 695,718 - - - 695,718
86 - General Savings 50,118 - - - 50,118
92 - Pension Reserve 135,821 - - - 135,821
94 - Vacation Cash Out and Accruals (184) - - - (184)
95 - General Operating Reserve 249,255 - - - 249,255
Totals 5,020,371 568,195 317,894 29,104 5,299,776