To: BUDGET AND FINANCE COMMISSION
From: LORI YAMASAKA, ACTING FINANCE DIRECTOR
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DISCUSSION AND RECOMMENDATIONS TO THE CITY COUNCIL REGARDING ASSIGNMENTS OF THE GENERAL FUND BALANCE FOR THE FISCAL YEAR ENDED JUNE 30, 2022
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EXECUTIVE SUMMARY
Each year, the Financial Services Department presents budget carryovers from one fiscal year to the next and fund balance constraints to the City Council for its consideration of approval. The carryovers and classifications are part of the City's efforts, with independent outside auditors, to prepare the City's Annual Comprehensive Financial Report (ACFR).
As shown on the General Fund Constraints schedule (Attachment 1) and described below, the City's General Fund balance (including the CalPERS Reserve Fund) at fiscal year end June 30, 2022 is expected to be roughly $30.3 million (up from $18,279,165 at June 30, 2021, primarily due to proceeds from the Lease Revenue Bond that was utilized in the payoff of the CalPERS Unfunded Liability debt and the receipt of American Rescue Plan Act (ARPA) funds. Of the year-end balance, $71,426 is non-spendable and $8,599,208 is committed for the City's 8.33% General Fund Reserve required by the City Council's Financial Principles.
Other significant General Fund constraints include regular encumbrances ($1,270,389), compensated absences ($785,832), carryover assignments ($1,845,807), the set aside for the CalPERS Reserve Fund ($4,975,712), and appropriations made by the City Council during the adoption of the FY 2022-23 Budget ($8,531,279), which leave a remaining available Fund Balance of $4,207,538.
Of the available Fund Balance, staff is recommending the traditional $1,000,0000 annual transfer to the Capital Projects Fund (which would be allocated as part of the FY 2023-24 Capital Improvement Program), a $3,000,000 transfer to the newly titled Employee Compensation, Benefit and Pension Reserve Fund (formally titled the CalPERS Reserve Fund) bringing the tot...
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