HomeMy Public PortalAbout10) 10A 1st Reading and Intro Ord. No. 15-1006 Budget Reserve Fund Balance RequirementsCity Council
September 15, 2015
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as follows:
• Emergency/Disasters at $50,000;
• Liquidity at $2,000,000; and
• Local Economic Uncertainty at $1,450,000.
CONCLUSION:
In order to meet the City Council's objective of maintaining budgeted reserves for fund
balances, it is recommended the City Council adopt the attached Ordinance, amending the
Reserves thresholds to accurately reflect the purpose of the Reserves for
Emergencies/Disasters, Liquidity and Local Economic Uncertainty. The adoption of an
Ordinance is a best practice to ensure budgeted reserve levels cannot be changed without
a thoughtful process and 4/5 vote by the City Council.
FISCAL IMPACT:
This action does not have an impact on the FY 2015-16 City Budget.
ATTACHMENT:
A. Ordinance No. 15-1006, an Ordinance of the City Council of the City ofTemple City,
California, Amending Chapter 5.5 "Budget Reserve Fund Balance Requirements" of
Title 2 "Administration" of the Temple City Municipal Code
ATTACHMENT A
ORDINANCE NO. 15-1006
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF TEMPLE CITY, CALIFORNIA, AMENDING CHAPTER
5.5 "BUDGET RESERVE FUND BALANCE
REQUIREMENTS" IN TITLE 2 "ADMINISTRATION" OF THE
TEMPLE CITY MUNICIPAL CODE.
WHEREAS, On June 5, 2012, the City Council adopted Ordinance No. 12-
953, adopting Chapter 5.5 "Budget Reserve Fund Balance Requirements" in Title 2
"Administration" of the Temple City Municipal Code;
WHEREAS, to ensure adequate fiscal resources and stable delivery of City
services during emergencies, fiscal emergencies, annual revenue fluctuation,
liquidity shortages, or severe economic downturns, the City desires to amend the
General Fund reserve requirements, and;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TEMPLE
CITY HEREBY ORDAINS AS FOLLOWS:
SECTION 1. Amend Chapter 5.5, 2-5.5-2
The City will maintain combined General Fund reserves as follows:
(a) Emergency/Disaster Reserve -$50,000.
(1) Use of these funds is allowable only when the following conditions
have been met: (i) The City Council has declared the existence of either
an "Emergency" or "Fiscal Emergency"; and (ii) The use of the reserve
has been approved by 4/51h vote of the membership of the City Council.
(2) Within 6 months after the Council's determination in paragraph (1)
above the City Manager shall present a plan to the City Council to
replenish this fund.
(3) If all or a portion of the Reserve is utilized, the Reserve will be
restored to the original level as adopted within the next five years or
whenever reasonably possible.
(b) Liquidity Reserve-$2,000,000.
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(1) Funds are to be set-aside to provide cash flow for timing of revenues
and expenditures. For example, while payroll costs are bi-weekly and
fairly predictable, state and county tax payments can vary. The City may
also from time to time have major projects that are grant funded on a
reimbursement basis that require large cash outlays. A "Liquidity
Reserve" is established to provide the cash-on-hand needed in between
large revenue payments and grant reimbursements and will alleviate the
need for short-term borrowing.
(2) If all or a portion of the Reserve is utilized, the Reserve will be
restored to the original level as adopted within the next five years or
whenever reasonably possible.
(c) Local Economic Uncertainty Reserve -$1,450,000
(1) Funds are to be set aside for the purpose of stabilizing the delivery of
City services during periods of operational budget deficits resulting from
the conditions as described in the definition above "Economic Stabilization
Reserve.
(2) Use of the funds are allowable only when the City Council, upon the
4/51h vote of its membership, has approved the use of the fund.
(3) If all or a portion of the Reserve is utilized, the Reserve will be restored
to the original level as adopted within the next five years or whenever
reasonably possible
SECTION 2. Severability. The City Council hereby declares that, should any
provision, section, subsection, paragraph, sentence, clause, phrase, or word of this
Ordinance or any part thereof, be rendered or declared invalid or unconstitutional by any
final court action in a court of competent jurisdiction or by reason of any preemptive
legislation, such decision or action shall not affect the validity of the remaining section or
portions of the Ordinance or part thereof. The City Council hereby declares that it would
have independently adopted the remaining provisions, sections, subsections, paragraphs,
sentences, clauses, phrases, or words of this Ordinance irrespective of the fact that any
one or more provisions, sections, subsections, paragraphs, sentences, clauses, phrases,
or words may be declared invalid or unconstitutional.
SECTION 3. Publication. The City Clerk shall certify to the passage and
adoption of this Ordinance and to its approval by the Mayor and shall cause the same to
be published according to law.
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PASSED, APPROVED, AND ADOPTED this 6th day of October, 2015.
MAYOR
ATTEST: APPROVED AS TO FORM:
City Clerk City Attorney
City Clerk
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