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Home My WebLink About15-094 - Resolutions RESOLUTION NO. 15-094 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA COMMITTING TO THE LEVEL OF FISCAL RESERVES FOR THE CITY OF RANCHO CUCAMONGA WHEREAS, the Rancho Cucamonga City Council desires to protect existing services, and; WHEREAS, the Rancho Cucamonga City Council desires to be prepared for emergencies, and; WHEREAS, the Rancho Cucamonga City Council desires to maintain good fiscal management and fiscal structure to operate a municipal corporation, and; WHEREAS, the Rancho Cucamonga City Council desires to maintain the financial strength required to obtain beneficial bond ratings for the City; NOW, THEREFORE, the City Council of the City of Rancho Cucamonga, California does hereby resolve on this 18"' day of June 2015 that the level of fiscal reserves maintained by the City of Rancho Cucamonga as of fiscal year end are committed to the goals as outlined in the City's Fund Balance Policy, attached to this resolution as Exhibit A. RESOLUTION NO. 15-094 - Page 1 of 7 PASSED, APPROVED, AND ADOPTED this 18" day of June 2015. AYES: Alexander, Kennedy, Michael, Spagnolo, Williams NOES: None ABSENT: None ABSTAINED: None ennis Michael, Mayor ATTEST: L. G • J nice C. Reynolds, City Clerk I, JANICE C. REYNOLDS, CITY CLERK of the City of Rancho Cucamonga, California, do hereby certify that the foregoing Resolution was duly passed, approved and adopted by the City Council of the City of Rancho Cucamonga, California, at a Special Meeting of said City Council held on the 18'" day of June 2015. Executed this 181" day of June 2015, at Rancho Cucamonga, California. Lam, � ice C. Reynolds, City 6lerk RESOLUTION NO. 15-094 - Page 2 of 7 CITY OF RANCHO CUCAMONGA f RANCHO CUCAMONGA t FIRE PROTECTION DISTRICT yY FUND BALANCE POLICY RANCHO CUCAMONGA POLICY NO.: _ PAGE OF EFFECTIVE: June 15,2011 REVISED: June I8,2015 APPROVED: PURPOSE This Fund Balance Policy establishes the procedures for the reporting of unrestricted fund balance in the City General Fund and Fire District financial statements. Certain commitments and assignments of fund balance will help ensure that there will be adequate financial resources to protect the City against unforeseen circumstances and events such as revenue shortfalls and unanticipated expenditures. The policy also authorizes and directs the Finance Director to prepare financial reports which accurately categorize fund balance as per Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. GENERAL POLICY Fund balance is essentially the difference between the assets and liabilities reported in a governmental fund. There are five separate components of fund balance, each of which identifies the extent to which the City/Fire District is bound to honor constraints on the specific purposes for which amounts can be spent. • Nonspendable fund balance (inherentlynonspendable) • Restricted fund balance (externally enforceable limitations on use) • Committed fund balance (self-imposed limitations on use) • Assigned fund balance (limitationresultingfrom intended use) • Unassigned fund balance (residual net resources) The first two components listed above are not addressed in this policy due to the nature of their restrictions. An example of nonspendable fund balance is inventory. Restricted fund balance is either imposed by law or constrained by grantors, contributors, or laws or regulations of other governments. This policy is focused on financial reporting of unrestricted fund balance, or the last three components listed above. These three components are further defined below. RESOLUTION NO. 15-094 - Page 3 of 7 Fund Balance Policy Page 2 of 5 Committed Fund Balance The City Council (which also acts as the Board of Directors for the Rancho Cucamonga Fire Protection District), as the City's highest level of decision-making authority, may commit fund balance for specific purposes pursuant to constraints imposed by formal actions taken, such as an ordinance or resolution. These committed amounts cannot be used for any other purpose unless the City Council/Fire Board removes or changes the specified use through the same type of formal action taken to establish the commitment. City Council/Fire Board action to commit fund balance needs to occur within the fiscal reporting period; however, the amount can be determined subsequently. • Changes in Economic Circumstances The City's General Fund balance committed for changes in economic circumstances is established at a goal of a six month reserve, or 50% of the City General Fund operating budget for the upcoming fiscal year. The Fire District's fund balance committed for changes in economic circumstances is established at a goal of a six month reserve, or 50% of the Fire District's operating budget for the upcoming fiscal year. As defined in the resolution establishing this commitment, the specific uses are listed as the declaration of a state or federal state of emergency or a local emergency as defined in Rancho Cucamonga Municipal Code Section 2.36.020;or a change in economic circumstances in a given fiscal year that results in revenues to the City/Fire District being insufficient to cover expenditures for one or more fiscal years. The City Council/Fire Board may, by the affirming vote of three members, change the amount of this commitment and/or the Specific uses of these monies. • City Facilities Capital Repair The City's General Fund balance committed for City facilities capital repair and property acquisition is established at a minimum goal of 50% of capital assets value comprised of construction in progress (excluding infrastructure), building improvements, and improvements other than building for governmental activities. • Fire District Facilities Capital Repair The Fire District's fund balance committed for the Fire District facilities capital repair is hereby committed to a minimum goal of 50% of capital assets value comprised of construction in progress (excluding infrastructure), building improvements, and improvements other than building for public safety-fire activities. • Workin Cg apital The City's General Fund balance committed for Working Capital is established at a goal of a minimum of 5% of the City's General Fund operating budget for the upcoming fiscal RESOLUTION NO. 15-094 - Page 4 of 7 Fund Balance Policy Page 3 of 5 year. The Fire District's fund balance committed for Working Capital is established at a goal of a minimum of 50% of the District's operating budget for the upcoming fiscal year. • Self-Insurance The City's General Fund balance committed for payment of general liability claims primarily through the use of interest earnings on the reserve but not limited to such in the event of an unfavorable interest rate environment is established at a minimum goal of seven times the City's total yearly SIR for all types of insurance coverage. • Employee Leave Payouts The City's General Fund balance and the Fire District's fund balance committed for employee leave payouts as valued in accordance with the City's labor contracts as of the last day of the fiscal year. • PERS Rate Stabilization The City's General Fund and Fire District's fund balance committed to offset projected rate increases identified in the respective annual CaIPERS actuarial valuation for two fiscal years after the year of financial reporting and identified by the City's actuarial consultant for three more years for a total of five years' projection. • Booking Fees The City's General Fund balance committed to provide funding for an increase in the booking fees charged to the City by the County of San Bernardino in the event that backfill funding is not provided by the State of California. • Vehicle and EquiRment Replacement The Fire District's fund balance committed for the replacement of fire safety vehicles and equipment as determined based on the District's replacement criteria is established at a minimum goal of 50% of District vehicle and equipment replacement value. • Law Enforcement The City's General Fund balance committed for public safety purposes. • Family Sports Center Replacement The City's General Fund balance committed for construction of the Family Sports Center Replacement and for the future replacement and repair of major capital assets comprising the new Family Sports Center. This reserve is established at a minimum goal of 105% of the estimated construction cost of the Center. RESOLUTION NO. 15-094 - Page 5 of 7 Fund Balance Policy Page 4 of 5 Assiened Fund Balance Amounts that are constrained by the City/Fire District's intent to be used for specific purposes, but are neither restricted nor committed, should be reported as assigned fund balance. This policy hereby delegates the authority to assign amounts to be used for specific purposes to the City Manager and/or Finance Director for the purpose of reporting these amounts in the annual financial statements. The following are a few non-exclusive examples of assigned fund balance. • Economic and Community Development Special Services The City's General Fund balance committed for contract services associated with Economic and Community Development (ECD) special projects or ECD initiatives/Council goals (such as economic strategy and Development Code contract services) as well as a one year value of staffing costs for Planning, Building and Safety, and Engineering (not including capital and project management). • Sphere of Influence Issues Established to provide funds for a multi-year effort to analyze the physical constraints and opportunities within the sphere area,provide required environmental analysis,and plan for the eventual annexation of the remaining unincorporated areas within the City sphere of influence.This reserve will also support the creation of a multi-species habitat conservation plan as well as acquisition of habitat conservation land. • Dispatch System Acquisition The Fire District's fund balance committed to JPA membership for the District's current dispatch system. Unassigned Fund Balance These are residual positive net resources of the General Fund and Fire District funds in excess of what can properly be classified in one of the other four categories. Fund Balance Classification The accounting policies of the City/Fire District consider restricted fund balance to have been spent first when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available. Similarly, when an expenditure is incurred for purposes for which amounts in any of the unrestricted classifications of fund balance could be used, the City/Fire District considers committed amounts to be reduced first, followed by assigned amounts and then unassigned amounts. RESOLUTION NO. 15-094 - Page 6 of 7 Fund Balance Policy Page 5 of 5 This policy is in place to provide a measure of protection for the City/Fire District against unforeseen circumstances and to comply with GASB Statement No. 54. No other policy or procedure supersedes the authority and provisions of this policy. RESOLUTION NO. 15-094 - Page 7 of 7