2022.04.26 CC Packet - Laserfiche WebLink

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REQUEST FOR COUNCIL CONSIDERATION ITEM DESCRIPTION: CONSIDERATION OF A RESOLUTION AUTHORIZING A TRANSFER FROM THE GENERAL FUND TO THE COMMUNITY REINVESTMENT FUND AND AMENDING THE 2022 GENERAL FUND BUDGET DEPARTMENT HEAD’S APPROVAL: Gina Foschi CITY MANAGER’S APPROVAL: No comments to supplement this report ___ Comments attached ___ Recommendation: Accept the Resolution Authorizing a Transfer from the General Fund to the Community Reinvestment Fund and Amending the 2022 General Fund Budget. Legislative History: The City’s Fund Balance Policy establishes targeted and minimum amounts for fund balance of the General Fund. The targeted balance includes an amount for cash flows for the subsequent year’s operating budget, plus an amount for contingencies. At a minimum, the City is to maintain a year‐end unassigned fund balance of at least 35% of the subsequent year’s budgeted operating expenditures. In the event that the year‐end unassigned fund balance exceeds the minimum, 41‐45% of the subsequent year’s budgeted expenditures must be retained before considering a transfer out to other funds. Financial Impact: The fund balance of the General Fund is above its targeted amount as of December 31, 2021 by $2,949,231. It is my recommendation to transfer $2,356,100 to the Community Reinvestment Fund, as calculated per the policy. The General Fund ended 2021 with an unassigned fund balance of $10,457,281 with a targeted amount of $7,508,050. The detailed calculation of the targeted fund balance is attached. Explanation: According to the Fund Balance Policy, amounts in excess of the targeted balance may be utilized in subsequent year’s budgets and/or transferred to other funds. The reserves in the Community Reinvestment Fund are committed for future community projects, improvements, interfund loans or new initiatives as approved by management and Council. The majority of this fund balance transfer is related to the City’s use of ARPA funding. The City elected to use $2,186,498 of its ARPA allocation for the provision of government services in 2021. Levy dollars and other general revenues previously budgeted for these services went unspent, resulting in excess fund balance at the close of 2021. On January 4, 2022, staff presented at a City Council Work Session a preliminary strategy to use the 2021 excess fund balance for additional costs in response to the COVID‐19 pandemic. Any expenditures using these funds will be brought forward to Council in a manner consistent with all other expenditures. Agenda Section: Consent Report Date: April 20, 2022 Council Meeting Date: April 26, 2022