HomeMy WebLinkAboutReg 2012-10-01 Item 4B.1 - Resolution - Financial Reserve PolicyCOUNCIL AGENDA SYNOPSIS
Initials
ITEMNO.
Meeting Date Prepared by Mayor's review
Counczl review
09/24/12 I PMc
10/01/12 I PMc
4 B
ITEM INFORMATION
STAFF SPONSOR: PEGGY MCCARTHY
I ORIGINAL AGENDA DATE: 9/24/12
AGENDA I TITLE Financial Reserve Policy
CATEGORY Discussion Motion Resolution Ordinance Bid Award Public Hearing Other
Mtg Date 9124112 Mtg Date Mtg Date 1011112 Mtg Date 1011112 Mtg Date Mtg Date Mtg Date
SPONSOR Council Mayor .HR DCD Finance Fire IT P &R Police P1V
SPONSOR'S Approve revisions to the City's Reserve Policy that simplify policy administration while
SUMMARY sustaining fiscal safeguards.
The Council is being asked to approve:
1. A resolution adopting a financial reserve policy.
2. An ordinance repealing Ordinance #2266, relating to the City's cash reserve policy.
REVIEWED BY COW Mtg. CA &P Cmte F &S Cmte Transportation Cmte
Utilities Cmte Arts Comm. Parks Comm. Planning Comm.
DATE: 5/22,7/17&9/5/12 COMMITTEE CHAIR: QUINN
RECOMMENDATIONS:
SPONSOR /ADMIN. FINANCE DEPARTMENT
COMMITTEE Forward to Committee of the Whole for discussion
COST IMPACT FUND SOURCE
EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED
Fund Source:
Comments:
I MTG. DATE I RECORD OF COUNCIL ACTION
1 9/24/12 IForward to next Regular Meeting
MTG. DATE
9/24/12
1011112
ATTACHMENTS
Informational Memorandum dated 9/18/12
Resolution adopting the reserve policy
Ordinance repealing Ordinance #2266
Mintues from the Finance and Safety (FS) Meeting of 9/5/12
Minutes from the FS Meeting of 7/17/12, with draft policy for that meeting (per request)
Minutes from the FS Meeting of 5/22/12, with draft policy for that meeting (per request)
Reserve Policy effective 12/11/09
Resolution and Ordinance in final form 23
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City of Tukwila
Washington
Resolution No.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON, ADOPTING A FINANCIAL RESERVE
POLICY TO MAINTAIN AN ADEQUATE FUND BALANCE,
ALLOWING MITIGATION OF RISKS TO REVENUES.
WHEREAS, for the well -being and sustainability of the community, its residents,
and businesses, it is important that the City of Tukwila be prepared to respond to any and
all situations that could result in a risk and/or crisis to the City's finances, including but not
limited to revenue shortfalls and unanticipated expenditures; and
WHEREAS, it is the responsibility of the City Council of the City of Tukwila to provide
policy direction for the City's biennial budget through the passage of motions and
ordinances, adoption of resolutions, and final approval of said budget; and
WHEREAS, a financial reserve policy establishes, attains, and restores minimum
fund balances, including self- insured health care reserve funds, and specifies review and
reporting of such;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
Section 1. At the close of each fiscal year, the General Fund balance and the
Reserve Fund balance shall each equal or exceed 10% of the previous year General
Fund revenue, exclusive of significant non operating, non recurring revenues such as
real estate sales or transfers in from other funds. In regard to the Enterprise Funds, at
the close of each fiscal year the unrestricted fund balance shall equal or exceed 20%
of the previous year revenue, exclusive of significant non operating, non recurring
revenues such as real estate sales, transfers in from other funds or debt proceeds.
Section 2. All expenditures from the Reserve Fund shall be authorized by the City
Council.
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Section 3. The prescribed minimum fund balances outlined in Section 1 shall be
attained no later than the end of the 2014 fiscal year. Should a fund balance decline
below the prescribed minimum balance after 2014, City Administration shall establish
a plan, no later than the end of the fiscal year following the year of decline, to restore
the fund balance to the prescribed minimum level. The plan shall be presented to and
approved by the City Council.
Section 4. In regard to the self- insured health care funds, the City shall maintain a
reserve balance in each of its self- insured health care funds in an amount equal to 2.5
times, or 250 of the actuarially determined IBNR (incurred but not reported)
reserve. The contingency reserve balance will be combined with the IBNR reserve
balance and recorded as one liability in each of the self- insured health care plan
funds.
Section 5. A report showing compliance with the Financial Reserve Policy shall
be provided to the City Council on an annual basis, no later than July 1 of each year.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON,
at a Regular Meeting thereof this day of 1 2012.
ATTEST /AUTH Et4TICATED:
Christy O'Flaherty, MMC, City Clerk Verna Seal, Council President
APPROVED AS TO FORM BY:
Filed with the City Clerk:
Passed by the City Council:
Resolution Number:
Shelley M. Kerslake, City Attorney
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