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File Number: 11 -327 30, 2011. Staff recommends a transfer of $2,000,000 from the General Funds fund balance to the Economic Uncertainty reserve. This transfer will bring the Major Emergency reserve and the Economic Uncertainty reserve total to $11,096,500, about 15% of the General Fund operating expenditures. This transfer moves the percentage significantly closer to the City Council's goal of 20 %. The Self Insurance Fund provides the City insurance protection against public liability cases and worker's compensation claims related to injuries to City employees. The Fund's balance sheet records the liability for Claims and Judgments for outstanding cases and claims. As of June 30, 2011, the total liability amounted to $7,931,100. In addition, as noted on the reserve worksheet, the Self Insurance Fund fund balance was recorded at $308,000. The preliminary year -end close for the Self Insurance Fund reflected a fund balance deficit of ($1,192,000). The deficit occurred as a result of significantly higher Fund expenditures in 2010 -11. One unanticipated cost was that case reserves for liability and workers' compensation increased by $2,361,400. The City Manager authorized a transfer of $1,500,000 from the General Fund fund balance to the Self Insurance Fund allowing the year -end financial statements to be prepared without a fund balance deficit. Staff recommends that the City Council confirm this transfer and direct that this transfer be included in the budget amendment resolution to be presented to the City Council. It should be noted that $3,000,000 has been transferred from the Self Insurance Fund to the General Fund since 2007 -08 as a budget strategy to balance the General Fund. Current City Council Policy The City Council initially established a philosophy for financial reserve funds over twenty years ago. In 1989 -90, the City Council adopted a series of financial values that were utilized to develop the budget. The Financial Goals Statement identifies and formalizes the financial principles by which the organization is guided. Previous City Council Action The City Council reviewed the 2010 -11 Budget Review and Budget Amendment at its meeting on September 9, 2011. The report confirmed that the 2010 -11 year -end forecast for the General Fund reflected a significant improvement over the adopted budget, largely due to an increase in projected revenues. City Council Committee Review and Action The Finance Committee reviewed and recommended this action at its meeting on October 21, 2011. Attachment Attachment 1, Fund Reserves Worksheet. CONCLUSION Staff recommends that the City Council approve the resolution authorizing transfers from the City of San Leandro Page 3 Printed on 11/1/2011