RES 92218 - Laserfiche WebLink

Carryovers The reserve for carryovers is to provide the funds for specific goods and services which were budgeted in 1991-92 but which had not been received or completed by June 30, 1992 (see Appendix F). Similar reserves are recommended in the Water and Sewer Operating Funds and the Capital Improvement Funds. Approving these types of carryovers has been routinely done each year. These carryovers will be reflected as amendments to the 1992-93 budget. Temporary Recession Reserve During the 1991-92 Midyear Budget review, staff recommended the establishment of a temporary reserve to help transition the City's operations as we reduce our expenditure levels over the next couple of years to match our revenues. Although Pleasanton still projects increases in revenues for 1992-93 over 1991-92, revenue growth has slowed due to the lingering recession in California. As a result of the State's budget problems, the City will have $1.1 million (9%) of its largest revenue source, property taxes, being diverted to other public agencies. Furthermore, it is projected that an economic recovery in California will not occur before the end of 1994, which means there is a good possibility that the State will take additional revenues from the cities in fiscal year 1993-94 and potentially again in 1994-95. When the City adopted its 1992-93 budget, $800,000 of the funds used to balance the budget came from one-time revenue sources (PERS refunds) and reserves. The City is not expecting any further large one-time revenues in the coming years. Therefore, in the 1993-94 budget year we will be faced with closing this $800,000 funding gap, plus the loss of about $1.2 million in property dollars to the State. In addition, we face potential other losses of revenues to the State and other agencies (or the pass through of additional costs), and any direct impacts to the City resulting from the recession. This means we must begin in 1992-93 reducing our expenditure levels to prepare us for the coming fiscal year. To do this, staff has started the process of identifying the costs of specific services provided, so informed decisions regarding service levels can be made. Staff has been asked to make suggestions as to how our operations can be streamlined and costs contained. A report will be presented to Council as part of the Midyear review. Staff is recommending that the remaining $95,000 in excess income from 1991-92 be added to the existing $2 million in the temporary Recession Reserve, bringing its total to $2.1 million. These funds will be used in part to make up for the $1.1 million loss in property tax revenues in 1992-93 due to State actions taken after the City adopted its current budget. The remaining funds may be used to help balance the 1993-94 budget. Reserve for Economic Uncertainties The 10% Reserve for Economic Uncertainties is an ongoing reserve to meet unexpected emergencies such as natural disasters, and economic deficiencies such as the temporary loss of a major revenue source due to a fire. This Reserve was established in 1990 with the adoption of the City's Financial Policies. An additional $91,245 was added to this reserve at the end of 1991-92 so that it now totals $3,134,050, which again brings it to 10% of the General Fund operating budget (i.e. 10% of expenditures and net operating transfers for capital leases, etc). SR 92:432 6