Finance Highlights 2011 1202 - Laserfiche WebLink

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In 1989 -90, the City Council adopted a policy for funding financial reserves and a series of financial values that were to be utilized in the development of the future budgets (the "Financial Goals Statement "). The Financial Goals Statement identifies and formalizes the financial principles by which the City is guided; it provides direction for preparing annual budget strategies and budgets and for conducting the day -to -day and long -term municipal affairs. In part, the Financial Goals Statement states that the City will maintain reserve fund or working capital balances of at least 20% of operating expenditures in the General Fund and Enterprise Funds. This is considered the minimum level necessary to maintain the City's credit worthiness and to adequately provide for (i) economic uncertainties, local disasters, and other financial hardships or downturns in the local or national economy. (ii) contingencies for unseen operating or capital needs. and (iii) cash flow requirements. Reflecting this policy goal, the City maintains: (i) a Major Emergencies Reserve Fund and (ii) an Economic Recovery Reserve Fund, the value of which Funds, together, are targeted to equal 20% of operating Expenditures in the City's General Fund and Enterprise Fund, when possible. The City also maintains a Self Insurance Fund. The amount of the Major Emergencies Reserve has remained unchanged during the recent years of depressed economics. This Reserve has remained at $5,000,000 since 2007- 08. The Economic Recovery Reserve, valued at $10,033,000 in 2007 -08, was partially utilized for operations over the past several years. That said, the City's Fiscal Year 2011 -12 budget was approved without any further draw -down of the Economic Recovery Reserve. In Fiscal Year 2007 -08, the Major Emergencies and the Economic Uncertainty Reserves together totaled about 19% of the General Fund operating expenditures ($77,397,000). The aggregate Reserve amounts declined over the past several years and were recorded at [$10,796,000, about 15 %] of the General Fund operating expenditures, as of [December 31], 2011. [This recent aggregate Reserve amount reflects a one -time transfer of $2,000,000 from the General Funds fund balance to the Economic Uncertainty Reserve as part of the mid -2011- 12 Fiscal Year budget amendment resolution approved by to the City Council, which transfer moved the aggregate Reserve amount percentage significantly closer to the City Council's goal of 20% from where it has been earlier in the same fiscal year.] [Brackets to be removed on the occurrence of this planned transfer.] 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 [December 31], 2011, the City's total liability amounted to $ and the Self Insurance Fund fund balance was recorded at $ , reflecting a fund balance deficit of ($ ). In recent years, the City Manager has, from time to time, authorized transfers from the General Fund fund balance to the Self Insurance Fund to allow year -end financial statements for the Self Insurance Fund to be prepared without a fund balance deficit, and transfers from the Self Insurance Fund to the General Fund have been utilized as a budget strategy to balance the General Fund. on