HomeMy WebLinkAboutReso 33-15RESOLUTION NO.33-15
RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF MORRO BAY, CALIFORNIA,
RESCINDING SECTION 5 OF RESOLUTION NO.55-93,
RESCINDING RESOLUTIONS NO.27-10 AND 42-11 IN THEIR ENTIRETY,
AND ESTABLISHING THE GENERAL FUND EMERGENCY RESERVE FUND
POLICY AND ACCEPTING MANAGEMENT PARTNERS' FINANCIAL FORECAST
ASSUMPTIONS
THE CITY COUNCIL
City of Morro Bay, California
WHEREAS, on June 28, 1993, the Morro Bay City Council adopted Resolution No. 55-
93, which adopted the Fiscal Year 1993-94 Budget and Appropriations Limit; and
WHEREAS, Section 5 of Resolution No. 55-93 states "A reserve for emergencies of
$800, 000 shall be established out of the City's General Fund. This amount will be reported in
the General Fund's Equity section of the balance sheet. The City Administrator must receive
prior approval from the City Council for any use of these reserve funds;" and
WHEREAS, with this Resolution, the Morro Bay City Council is rescinding Section 5 of
Resolution No. 55-93; and
WHEREAS, on May 24, 2010, the Morro Bay City Council adopted Resolution No. 27-
10, which established the parameters for use of the General Fund (Accumulation) Reserve; and
WHEREAS, with this Resolution, the Morro Bay City Council is rescinding Resolution
No. 27-10 in its entirety; and
WHEREAS, on June 28, 2011, the Morro Bay City Council adopted Resolution No. 42-
11, which amended the parameters of Resolution No. 27-10; and
WHEREAS, with this Resolution, the Morro Bay City Council is rescinding Resolution
No. 42-11 in its entirety; and
WHEREAS, the City Council desires to establish the GENERAL FUND
EMERGENCY RESERVE FUND POLICY to identify the parameters and use of this Fund.
NOW THEREFORE BE IT RESOLVED by the City Council of the City of Morro
Bay, California, as follows:
A. The General Fund Emergency Reserve ("GFER") Fund is named and established, and
the GFER Fund Policy is described, below, sets the parameters for and use of the GFER
Fund as follows:
Resolution No. 33-15
Page 2
a. The GFER Fund target balance is set at 27.5%.
b. Annually, the GFER Fund balance is calculated by using the average of three -
years' actual General Fund operating revenues (for example, for the Fiscal Year
2015/16 calculation, the actual operating revenues for Fiscal Years 2013/14,
2012/13 and 2011/12 are added together, and divided by 3).
c. Based on the existing balance in the General Fund, as compared to the target
calculated balance, amounts, greater than the 27.5% target balance, will be
deemed available for use, as determined by the City Council, during the annual
budget adoption process or budget amendments as may be approved by the
Council.
d. Each use of GFER Fund must be approved by the City Council.
B. Based on the Management Partners' Financial Forecast, a copy of which is attached to
this Resolution, the following assertions are accepted:
a. The Management Partner's Financial Forecast predicts a moderate recession in
2017.
b. The City's Ca1PERS actuarial assumptions contain increased contribution rates
for Fire and Police Safety plans over the next five fiscal years ending in
2020/2021.
c. The continuing drought in California may affect revenues (i.e., TOT).
d. The schedule of year-end minimum reserve levels is set at:
1. FY 2014/15 - $3.385m (33.4% of General Fund revenues calculation)
2. FY 2015/16 - $3.583m (32.7% of General Fund revenues calculation)
3. FY 2016/17 - $3.272m (30.2% of General Fund revenues calculation)
4. FY 2017/18 - $2.685m (24.5% of General Fund revenues calculation)
5. FY 2018/19 - $2.802m (24.7% of General Fund revenues calculation)
6. FY 2019/20 - $2.797m (23.6% of General Fund revenues calculation)
7. FY 2020/21 - $2.983m (24.6% of General Fund revenues calculation)
8. FY 2021/22 - $3.097m (25.0% of General Fund revenues calculation)
e. Based on the above schedule, the City is authorized to present deficit spending
budgets in FY 2016/17 and FY 2017/18.
f. If annual revenues are below forecast, then expenditures must be adjusted to meet
these targets.
g. Those assumptions will be reviewed annually, as established by the budget
calendar, based on the current fiscal environment.
Resolution No. 33-15
Page 3
PASSED AND ADOPTED, by the City Council of the City of Morro Bay, at a regular
meeting thereof held on the 9t' day of June, 2015, by the following vote:
AYES:
Irons, Headding, Johnson, Makowetski, Smukler
NOES:
None
ABSENT:
None
J E L. IRONS, Mayo
ATTEST:
DANA SWANSON, City Clerk