RES 92218 - Laserfiche WebLink

Staff will be performing a detailed review of the 1991-92 and 1992-93 Capital Improvement Programs before the 1993-94/1997-98 CIP is prepared this spring. Staff will return to Council with an update report at Midyear. Appendix H contains a table showing major capital improvement revenues in 1991-92, projected versus actual. APPROPRIATION OF FUND BALANCES Each year the City Council is required by law to adopt the City's Appropriation Limit (Prop.4). The City's limit in 1991-92 was $60.161.759. Appropriations subject to limitation were $26.865.696, which was not in excess of the limit. However, all funds were not spent by June 30, 1992. The City is allowed to appropriate the additional funds that are within its limit to a contingency reserve to meet existing and future, known and unknown obligations. This will allow the City to exclude these funds from the City's appropriation limit when the funds are expended in a future fiscal year. Although not all funds have revenues which are subject to the appropriations limit, it is still advisable to fully appropriate all fund balances of the operating, internal service, capital, special revenue, enterprise and expendable trust funds. Therefore, staff recommends that Council fully appropriate all such balances to contingency reserves. CONCLUSION Although feeling the recession, most of the City's Funds were able to meet budget projections. The financial policies the Council adopted in 1990 have provided a framework for prudent fiscal management, from which we are already benefitting. The City has been able to maintain a 10% Reserve for Economic Uncertainties in the General Fund to be used in the event of unforeseen economic situations or emergencies. The City has established funding mechanisms to provide for replacement of equipment, vehicles, water and sewer infrastructure, and major facility maintenance. Excess General Fund revenues have been given back to the community in the form of capital projects, the most recent being the City's share of the Pleasanton Middle School Gym ($3 million). Additionally, three-fourths of the funding for the Harvest Park Gym has been identified ($2.275 million). The City will now be able to pay cash for this project instead of issuing debt and obligating itself to $300,000 in annual fixed costs for debt service for the next 20 years. The debt that was recently incurred to build the Senior Center was greatly reduced from the original plan because the General Fund was able to contribute almost $1 million in cash, also in an effort to minimize the City's debt and reduce the City's fixed annual costs. One of the primary areas to be addressed in the next few years is the Water Fund. The Fund has been operating at a deficit for years and reserves are at a minimum level. As part of the rate studies done in 1991 for the Water Fund, a plan was made to ensure the financial health of the Fund. However, it is estimated that it will take about three years of gradual rate increases, improvements in operations, and phasing of asset replacement funding to get the Water Fund in a position of breaking even financially, maintaining adequate reserves, and ensuring the financial ability to replace the components of the City's water system as it ages. SR 92:432 9