RES 94132A - Laserfiche WebLink

With the positive results from fiscal year 1993-94, no funds will need to be drawn from the Temporary Recession Reserve. The current balance in the reserve is $3.7 million. Since there are still many unknowns about the State's economic future in the next few fiscal years, staff still recommends that this reserve be maintained at this level. City revenues still at risk in the near term for reallocation to other levels of government include the City's $1.7 million in Motor Vehicle fmes, and its remaining AB 8 property tax bailout funds ($500,000). Should the State take additional revenues from the City, the $3.7 million in the Recession Reserve should be adequate to fund about two years in reductions while we take the steps necessary to realign our revenues and expenditures once again. In the long term, the City could potentially be a loser in any statewide plans to restructure revenues such as sales tax. As recent as two weeks ago, a public meeting was held in Sacramento to discuss this topic. However, staff would expect that any restructuring, if it does takes place, would take years to evolve, and that there would be some transitional plan for phasing in the restructuring. In the meanwhile, it is important that the City continue to maintain as diverse a revenue base as possible to miuimize impacts, and be proactive to State legislative issues that impact us. Capital Proiects Reserve The General Fund Capital Project Reserve was reduced by a net $688,000 in 1993-94, as was budgeted. A total of $250,000 in one-time revenue was added, with $938,000 being transferred to the Miscellaneous CIP ($700,000 for the new public safety radio system, $238,000 for 'a future site for Fire Station #4.). Carryover Reserve $757,000 in funds were carried over from 1992-93 and used in 1993-94. As was discus,sed previously, staff is now recommending that $953,000 be added to the reserve for use in 1994-95, as detailed in appendix E. Thus the net additions/uses of the reserve in 1993-94 would be $196,000. Carrvover Balance (Undesignated) After all of the above reserves are established, $962,000 remains in the General Fund. Staff recommends that these funds be left as an undesignated fund balance until staff can bring back to Council recommendations regarding the use of these funds. Staff expects to prepare a repon for Council within one month regarding the results of actuarial studies to determine adequate annual funding and reserve levels for the Workers' Compensation Reserve Fund and the Retirees' Medical Insurance Reserve Fund. These actuarials are SR 94:365 12