For Economic Development Committee [May 27, 2020]
TO: Honorable Economic Development Committee Members
APPROVAL: Rod Foster, City Manager
FROM: Edward Carrillo, City Treasurer
Stephen Erlandson, Deputy City Manager
Title
Request Economic Development Committee to Review and Discuss the Draft General Fund Economic Reserve Policy and Direct Staff to Forward the Item to the City Council for Consideration.
Body
BACKGROUND:
On November 2, 2004, the City Council adopted the current City of Rialto General Fund Reserve Policy. The current policy contains a provision requiring an annual analysis by the Finance Department at the time of year-end closing and audit preparation. As a result of the most recent audit, the City Treasurer and Deputy City Manager determined that the policy should be updated to comply with Governmental Accounting Standards Board (GASB) Statement No. 54 and to address the City Treasurer's concern regarding what portion of the City's General Fund reserves are cash.
ANALYSIS/DISCUSSION:
The City Treasurer and Deputy City Manager worked closely in developing the Draft General Fund Economic Reserve Policy. The key provisions/enhancements of the draft policy are:
* The addition of definitions/acronyms to assist users of the policy in understanding terms that are used throughout the policy document.
* The retitling of the reserve to "General Fund Economic Reserve" to better demonstrate the purpose of the reserve.
* More specific uses of the reserve related to severe economic impacts resulting from natural disasters/catastrophic events, the loss or reduction of a major revenue source, and economic uncertainties including downturns in the local, state, or national economy.
* Since the General Fund Economic Reserve is meant to be used only for the purposes as noted in the previous bullet point, which are more restrictive than in the current policy, a 50% reserve level for economic contingencies is not necessary. As such, we propose a...
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