HomeMy WebLinkAboutAgenda Report - April 20, 2022 I-05CITY OF
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CALIFORNIA
AGENDA ITEM T685
COUNCIL COMMUNICATION
AGENDA TITLE: Adopt Resolution Approving the Use of One Time General Fund Surplus Funds Accrued
as a Result of Conservative Pandemic Budgeting, Strong Economic Activity, and Federal
Reimbursements for Pandemic Related Spending, and Appropriating Funds ($700,000)
MEETING DATE: April 20, 2022
PREPARED BY: Deputy City Manager
RECOMMENDED ACTION: Adopt resolution approving the use of one time General Fund surplus funds
accrued as a result of Conservative pandemic budgeting, strong economic
activity, and federal reimbursements for pandemic related spending, and
appropriating funds ($9,580,000).
BACKGROUND INFORMATION: At the outset of the COVID-19 pandemic, the City froze positions within
the general fund and reverted projected revenues to the last full fiscal year
prior to the pandemic (FY 2018-19) to project revenue for the first full fiscal
year of the pandemic (FY 2020-21). A similarly conservative growth
approach was taken going into the FY 2021-22 budget year. Actual revenues have exceeded those estimates
and even the pre -pandemic trends the City was forecasting.
On a cash flow basis, this revenue was spent to fund pandemic related activities including responding directly to
the emergency to ensure employee and public health and safety. The primary spending was on the Great Plates
Delivered program which delivered meals to senior and individuals at high risk of severe COVID complications.
All these activities were fully reimbursed by the federal government. Those reimbursements have been received
by the City, freeing up additional General resources above and beyond the City's required 16% General Fund
reserve set by Council policy and those created by the City's normal operating budget surpluses.
The City's Pension Stabilization Policy (PSP) requires all reserves in excess of 16% in the General Fund to be
sent to a Pension Stabilization Fund (PSF) to provide resources to reduce the City's Unfunded Accrued Liability
(UAL) with CalPERS in the future. The City has taken significant strides to address the UAL and this historic,
one time infusion of funds due to pandemic related budgeting practices and available resources presents a
unique opportunity to provide substantial community benefit while not ignoring the long term UAL liability.
Per the PSP, staff took all reserves in excess of 16% and invested those in the PSF based on the closing fund
balance at the end of FY 2020-21. However, in preforming the calculation, staff netted out all pandemic related
spending and reimbursements. This resulted in a total General Fund contribution to the PSF of $1,669,145 and
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Adopt Resolution Approving the Use of One Time General Fund Surplus Funds Accrued as a Result of Conservative Pandemic Budgeting,
Strong Economic Activity and Federal Reimbursements for Pandemic Related Spending and Appropriating Funds ($700,000)
April 20, 2022
Page 2 of 2
a total PSF contribution of $2,230,107 with the difference being contributed by other operating funds based on
their share of pension costs. The result is $10,280,000 in un -programmed General Fund reserves for Council to
allocate. $9,580,000 is addressed in a previous staff report. $700,000 will be allocated in this report. Staff is
recommending considering using this one-time money outside the PSP and programming these funds for the
Access Center Project.
At the April 12, 2022 shirtsleeve meeting, City Council provided input on the proposed projects for funding. The
attached resolution incorporates input from that discussion.
FISCAL IMPACT: There is no fiscal impact from this action. The source of the $700,000 is General Fund
reserves above the targeted policy.
FUNDING: Reserve funds that are the subject of this action are in excess of the 16% target reserve
policy.
Andrew Keys
Deputy City Manager/Internal Services Director
BLUE SHEET
27,,5
RESOLUTION NO. 2022-
A RESOLUTION OF THE LODI CITY COUNCIL APPROVING THE USE
OF ONE TIME GENERAL FUND SURPLUS FUNDS ACCRUED AS A
RESULT OF CONSERVATIVE PANDEMIC BUDGETING, STRONG
ECONOMIC ACTIVITY, AND FEDERAL REIMBURSEMENTS FOR
PANDEMIC RELATED SPENDING; AND FURTHER APPROPRIATING
FUNDS ($700,000)
WHEREAS, the City Council has taken significant action to improve the City's
financial position through enacting sound financial policy, addressing long term liabilities,
limiting spending, and built substantial reserves; and
WHEREAS, as a result of these forward thinking financial decisions, the City of
Lodi was able to enter the COVID-19 pandemic in a sound financial position and approach
budgeting cautiously without drastic cutbacks; and
WHEREAS, even without substantial cuts, the City did freeze positions and reduce
spending on general operations during the pandemic; and
WHEREAS, despite public health restrictions on economic activity, the City's
revenues continued to increase during the pandemic at a rate that exceeded pre -
pandemic estimates; and
WHEREAS, the City was able to fund pandemic related public health and safety
measures, including those to protect employees and minimize the spread of COVID-19 to
vulnerable populations through meal delivery (Great Plates Delivered program) out of
general revenue that otherwise would have been available for programming; and
WHEREAS, the federal government has reimbursed the City in full for all pandemic
related spending at 100%; and
WHEREAS, the City Treasurer is required by the City Council adopted Pension
Stabilization Policy to invest reserves in excess of 16% of General Fund revenues to be
invested in a Pension Stabilization Fund to be used to help offset future Unfunded Accrued
Liability (UAL) payments to CalPERS or to buy down the City's UAL; and
WHEREAS, given the historic nature of the pandemic reimbursements, the amount
available in excess of 16% far exceeded expectations; and
WHEREAS, the Treasurer has calculated the Fiscal Year 2020-21 year end fund
balance and fund balance requirement net of all pandemic related spending and
reimbursements and invested the $1,669,145 in excess of 16% using this calculation into
the PSF already, bringing the PSF balance to over $23 million; and
WHEREAS, the pandemic related reimbursements that still remain in the General
Fund balance total $10,280,000 and per policy, the Treasurer is required to invest those
funds in the PSF; and
WHEREAS, the one-time resources available present a unique opportunity for City
Council to address substantial community needs in addition to the continued focus on long
term liabilities and stay in compliance with the City's fund balance reserve policy; and
WHEREAS, $9,980,000 of this funding was allocated by separate Council
resolution.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Lodi
approves the use of one time General Fund surplus funds and appropriates funds in the
amount of $700,000 for the Access Center Safety/Security for approximately 2.5 years;
and
BE IT FURTHER RESOLVED that the Lodi City Council does hereby authorize
the appropriations and expenditures authorized in this resolution to be carried
forward into subsequent fiscal years until fully spent.
Dated: April 20, 2022
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I hereby certify that Resolution No. 2022- was passed and adopted by the
City Council of the City of Lodi in a regular meeting held April 20, 2022 by the following
vote:
AYES:
COUNCIL MEMBERS —
NOES:
COUNCIL MEMBERS —
ABSENT:
COUNCIL MEMBERS —
ABSTAIN
COUNCIL MEMBERS —
OLIVIA NASHED
City Clerk
2022-
RESOLUTION NO. 2022-105
A RESOLUTION OF THE LODI CITY COUNCIL APPROVING THE USE
OF ONE TIME GENERAL FUND SURPLUS FUNDS ACCRUED AS A
RESULT OF CONSERVATIVE PANDEMIC BUDGETING, STRONG
ECONOMIC ACTIVITY, AND FEDERAL REIMBURSEMENTS FOR
PANDEMIC RELATED SPENDING; AND FURTHER APPROPRIATING
FUNDS ($700,000)
WHEREAS, the City Council has taken significant action to improve the City's
financial position through enacting sound financial policy, addressing long term liabilities,
limiting spending, and built substantial reserves; and
WHEREAS, as a result of these forward thinking financial decisions, the City of
Lodi was able to enter the COVID-19 pandemic in a sound financial position and approach
budgeting cautiously without drastic cutbacks; and
WHEREAS, even without substantial cuts, the City did freeze positions and reduce
spending on general operations during the pandemic; and
WHEREAS, despite public health restrictions on economic activity, the City's
revenues continued to increase during the pandemic at a rate that exceeded pre -
pandemic estimates; and
WHEREAS, the City was able to fund pandemic related public health and safety
measures, including those to protect employees and minimize the spread of COVID-19 to
vulnerable populations through meal delivery (Great Plates Delivered program) out of
general revenue that otherwise would have been available for programming; and
WHEREAS, the federal government has reimbursed the City in full for all pandemic
related spending at 100%; and
WHEREAS, the City Treasurer is required by the City Council adopted Pension
Stabilization Policy to invest reserves in excess of 16% of General Fund revenues to be
invested in a Pension Stabilization Fund to be used to help offset future Unfunded Accrued
Liability (UAL) payments to CalPERS or to buy down the City's UAL; and
WHEREAS, given the historic nature of the pandemic reimbursements, the amount
available in excess of 16% far exceeded expectations; and
WHEREAS, the Treasurer has calculated the Fiscal Year 2020-21 year end fund
balance and fund balance requirement net of all pandemic related spending and
reimbursements and invested the $1,669,145 in excess of 16% using this calculation into
the PSF already, bringing the PSF balance to over $23 million; and
WHEREAS, the pandemic related reimbursements that still remain in the General
Fund balance total $10,280,000 and per policy, the Treasurer is required to invest those
funds in the PSF; and
WHEREAS, the one-time resources available present a unique opportunity for City
Council to address substantial community needs in addition to the continued focus on long
term liabilities and stay in compliance with the City's fund balance reserve policy; and
WHEREAS, $9,980,000 of this funding was allocated by separate Council
resolution.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Lodi
approves the use of one time General Fund surplus funds and appropriates funds in the
amount of $700,000 for the Access Center Safety/Security for approximately 2.5 years;
and
BE IT FURTHER RESOLVED that the Lodi City Council does hereby authorize the
appropriations and expenditures authorized in this resolution to be carried forward into
subsequent fiscal years until fully spent.
Dated: April 20, 2022
I hereby certify that Resolution No. 2022-105 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held April 20, 2022 by the following vote:
AYES: COUNCIL MEMBERS — Hothi, Khan, Kuehne, and Nakanishi
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — Mayor Chandler
ABSTAIN: COUNCIL MEMBERS — None
-
OLIVIA NASHED
City Clerk
2022-105