HomeMy WebLinkAbout2022-09-27; City Council; ; General Fund Surplus Policy: Approval of Fiscal Year 2021-22 Budget Carryforward Requests and Appropriation of Funds to FY 2022-23CA Review CKM
Meeting Date: Sept. 27, 2022
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Zach Korach, Finance Director
zach.korach@carlsbadca.gov, 442-339-2127
Subject: General Fund Surplus Policy: Approval of Fiscal Year 2021-22 Budget
Carryforward Requests and Appropriation of Funds to FY 2022-23
District: All
Recommended Action
1. Adopt a resolution:
• Approving the fiscal year 2021-22 budget carryforward request list of individual items
over $100,000, which totals $1,174,750 in the General Fund and $120,000 outside of the
General Fund, appropriating the funds to the FY 2022-23 budget and authorizing capital
outlay purchases
2. Consider adopting resolutions to approve three additional uses of the General Fund budget
surplus from FY 2021-22 and General Fund reserve:
• An additional transfer to the Workers’ Compensation Fund, to fund it at an estimated
50% confidence level according to the most recent actuarial study
• An additional transfer to the Risk Management Fund, which is temporarily in a deficit
position and incurring legal and settlement costs in fiscal year 2022-23 that are trending
above budget
• An additional transfer to the Fleet Maintenance Fund, which is temporarily in a deficit
position and incurring fuel and parts costs in fiscal year 2022-23 that are trending above
budget, and appropriation $290,000 for those increased fuel and parts costs
Executive Summary
The City of Carlsbad, like other governments, usually has surplus funds at the end of each fiscal
year as a result of the city’s actual revenue exceeding what it actually spent, plus any unspent
and unencumbered funds that had been budgeted to have been spent in that fiscal year.
These unspent funds can be moved into the budget for the following fiscal year in what is
referred to as a budget carryforward of funds. The city’s General Fund Surplus Policy was
established by City Council Policy No. 87. In accordance with Policy No. 87, staff are presenting
the list of budget carryforward requests and appropriation of funds to FY 2022-23 for the City
Council’s consideration and approval. The requests are detailed below.
Sept. 27, 2022 Item #11 Page 1 of 19
Staff are also reporting that the city is in conformance with City Council Policy No. 74 on the
General Fund Reserve and City Council Policy No. 86 on pension funding. This item is before the
City Council because council policies require reporting the status of the reserve levels relative
to the policy to the council, and because the council’s approval is required for individual
carryforwards greater than $100,000.
Discussion
The FY 2021-22 budget surplus, or unspent and unencumbered expenditure budget, for the
General Fund on June 30, 2022, was $14.7 million. This balance decreased to $8.8 million after
considering previous City Council actions carrying forward balances into FY 2022-23 (additional
details are provided below). The unspent balance is the result of several factors, including, but
not limited to, salary savings from position vacancies for part of the year, prudent spending
from departments, and items or activities that were budgeted in FY 2021-22 but for various
reasons were not purchased or encumbered by fiscal year’s end.
Items approved by prior City Council action
The City Council has already approved carrying forward the budget for various items from FY
2021-22 to 2022-23. A list of unspent grant funding, developer deposits, and other items
approved previously by the City Council is included as Exhibit 3. These items include:
•Unspent budget for grant balances and developer deposits approved by the City Council
through the FY 2022-23 operating budget resolution (Resolution No. 2022-135, adopted
on June 14, 2022)
o Grant funding approved but not yet completely expended by the end of the fiscal
year for various programs and services included:
$64,483 in unspent grant funding in the General Fund
$1,044,628 in total unspent grant funding in all other funds
o Unspent developer deposits received for developer-funded studies and plan
check services that were not expended by fiscal year end. These total $397,575
in the General Fund
•$2 million of unspent General Fund budget to support the city’s coordinated efforts
addressing the bicycle, e-bike and motorized mobility device safety local emergency to
increase attention and resources on a range of solutions, including infrastructure,
safety, enforcement, and safe driving and riding education (Resolution No. 2022-214,
adopted Aug. 30, 2022)
•$3.2 million of unspent General Fund budget to purchase 34 police vehicles in
accordance with the 2022-24 Memorandum of Understanding between the City of
Carlsbad and the Carlsbad Police Officers’ Association (Resolution No. 2022-210,
adopted Aug. 30, 2022)
•$276,399 of unspent General Fund budget approved by the City Council to authorize the
planning and engineering design services agreement with Fehr & Peers for various
transportation initiatives (Resolution No. 2022-220, adopted Sept. 13, 2022)
•$446,625 of unspent Information Technology Operations budget approved by the City
Council to renew the master services agreement for hosting and professional services
with Navisite Inc. for the Lawson Human Capital Management System software and
management of the system (Resolution No. 2022-211, adopted Aug. 30, 2022)
Sept. 27, 2022 Item #11 Page 2 of 19
Council Policy No. 87 – General Fund Surplus Policy
This policy established the process of using surplus funds after a fiscal year is closed. The policy
dictates that the city will take the four actions listed below, in order. Each action is followed by
staff’s updates and recommendations.
City Council reserve policy update
Staff manage city funds in accordance with the City Council’s policies on pension funding
and reserves.
Action 1 - The city will use surplus funds to replenish any General Fund reserve deficiencies,
up to 40%, as set forth in the City Council General Fund Reserve Policy No. 74.
• The city’s General Fund reserve is projected to end the fiscal year at approximately
$122.3 million, or 62% of the FY 2022-23 budget, excluding the funds set aside for
economic uncertainty, which total $9.6 million.
Action 2 - The city will use surplus funds to replenish any pension liability deficiencies to
achieve a pension funded ratio of no less than a minimum of 80%, with a target funded ratio
range of 80% to 85%.
• The city’s combined miscellaneous and safety pension funded ratio as of June 30, 2021,
is 86% funded,1 exceeding the 80% funded ratio as required by City Council policy. The
city does not need to contribute any additional funds to increase the pension funded
ratio at this time.
Carryforward process
In July 2022, the Finance Department asked city departments to submit budget carryforward
requests for one-time expenses and not for ongoing services, programs or personnel. The
requests were reviewed by the City Manager. According to Council Policy No. 87, the City
Manager may approve the carry forward of any unspent and unencumbered budget for
individual items less than $100,000 into the following fiscal year. All items equal to or greater
than $100,000 must be brought forward to the City Council for approval.
Action 3 - The City Manager is authorized to approve the carrying forward of any unspent
and unencumbered budget for a particular item equal to or less than $100,000 into the
following fiscal year. These items will be one-time expenditures and not for on-going
services, programs or personnel.
• The City Manager approved $690,160 in General Fund carryforward requests and
$1,275,102 in carryforward requests for other non-General Fund funds. All individual
items are less than $100,000. A listing of all City Manager-approved requests is included
as Exhibit 2 of this staff report.
Action 4 - Items equal to or greater than $100,000 will be brought forward for City Council
consideration to approve the use of any remaining surplus funds.
• The requested items over $100,000 requiring City Council approval are listed and
described in the following section. The General Fund carryforward requests total
$1,174,750 and the non-General Fund requests total $120,000. A listing of these
requests is included as Attachment A to Exhibit 1.
1 As of June 30, 2021, based on the most recent CalPERS actuarial report, the city’s total pension assets are
$712,858,578 and city’s total pension liability is $828,831,527.
Sept. 27, 2022 Item #11 Page 3 of 19
General Fund requests for City Council Approval
Staff request the City Council approve the following budget carryforward requests, which total
$1,174,750.
Parking In-Lieu Program Fee Update Study - $150,000
The Parking In-Lieu Fee Program, adopted in 1999, funds projects that reduce parking demand.
The fee amount has not been updated since the program was adopted, and the program
currently does not support the construction of parking facilities.
On Nov. 16, 2021, the City Council directed staff to pursue an update to the Parking In-Lieu Fee
program as part of the Village and Barrio Master Plan. Funding has not yet been allocated to
this update. This carryforward request will pay for a fee study that will identify ways to fund
structured parking and evaluate potential updates to the fee amount and structure. Staff
anticipate a substantial increase in revenue to the city with this fee update.
Self-contained breathing apparatus replacement - $850,000
Self-contained breathing apparatuses are critical personal protective equipment for incidents
involving structural firefighting, confined space rescues and in dealing with hazardous
materials. These types of incidents require protection from environments that pose an
immediate danger to firefighters’ health. One apparatus consists of an air pack harness with a
regulator, alarm system, air bottle, mask and voice amplifier. The service life for these units is
limited to 15 years by the U.S. Department of Transportation. The existing inventory is 13 years
old. Due to their age, all units are beyond warranty and continued serviceability.
The cost of the replacement apparatuses is quoted at $968,000, and staff are requesting capital
outlay authority for this item up to $1 million, to account for potential rising costs. The Fire
Department requests a budget carryforward of $850,000 to replace all self-contained breathing
apparatuses and will fund the remaining cost of the replacement with the department’s existing
budget.
License plate reader installation - $174,750
The City Council approved the purchase of 85 replacement fixed license plate reader cameras,
six mobile cameras, and an additional 43 cameras through Vigilant Solutions on May 10, 2022.
At the time, the cost of the installation was unknown, and the resolution the City Council
adopted (Resolution No. 2022-106) stated that staff would return to the City Council to request
the appropriate funding for the installation of the 128 fixed cameras at a later date.
After a competitive bidding process, the city awarded a contract in the amount of $174,750 to
Bear Electrical Solutions to install the cameras. The Police Department is now requesting the
funding for the contract so that the cameras can be installed.
Sept. 27, 2022 Item #11 Page 4 of 19
Non-General Fund requests for City Council approval
Staff are also requesting one budget carryforward of $120,000 that is not in the city’s General
Fund.
Compliance evaluation contract - $120,000
The Environmental Sustainability Department is requesting carryforward funding to hire an
experienced consultant to help develop a performance review process and conduct audits of
the city's waste hauling and transfer station contracts. This project will allow the department to
develop systems to ensure compliance with both the city’s contract and state law and
determine any potential liquidated damages. These services would fulfill a need for a one-time
program setup.
Options
Options for carryforward requests
Staff have identified the following options in response to the carryforward requests brought
forward for City Council approval:
Option 1: Staff’s recommended actions
a. Approve all or a combination of individual carryforward requests equal to or
greater than $100,000 presented above and listed in Attachment A to Exhibit 1
of this staff report. Staff will appropriate the City Council-approved carryforward
requests to FY 2022-23
Pros
• Provides the needed resources to execute city programs as detailed in
Attachment A to Exhibit 1.
Con
• The funds used would not be available for other programs the City Council
might wish to fund.
Option 2: Take no action on the carryforward requests brought forward for City Council
approval.
Pro
• Funds would be returned to the reserve account and be available to support
future needs.
Con
• Departments will be unable to fully implement planned programs and
expenditures
Sept. 27, 2022 Item #11 Page 5 of 19
Options for surplus funds
If the recommended action is chosen, there remains a projected $6.9 million in budget surplus
funds available. Staff offer the following four options to deploy these unused funds from FY
2021-22 for the City Councils consideration:
Option A: Approve an additional transfer of $8.2 million to the Workers’ Compensation
Fund to increase the estimated liability to what is known as a 50% confidence level.2 The
city is self-insured for workers’ compensation. The city’s Workers’ Compensation Fund is
assessed annually by an external actuary firm that estimates the city’s outstanding
losses based on current claims, case reserves and incurred but not reported claims. The
most recent report, when compared to the current fund balances, indicates the city has
additional potential exposure that could be mitigated.
Confidence
level
Estimated
outstanding losses
Balance of Workers’
Compensation Fund
Current funding
shortfall
50% $22,009,758 $13,801,506 $8,208,252
70% $26,411,710 $13,801,506 $12,610,204
80% $31,033,759 $13,801,506 $17,232,253
90% $38,737,174 $13,801,506 $24,935,668
Pros
• The city’s Workers’ Compensation Fund would have additional funds to
mitigate potential future exposure
• The city’s reserve balance would be reduced to a level closer to the 40%
target
Con
• These funds, once appropriated for this purpose, would not be available for
other purposes.
Option B: Approve an additional transfer of $1 million to the Risk Management Fund to
bring the fund out of a deficit and absorb unanticipated cost increases in FY 2022-23.
The fund incurred substantial unanticipated costs in FY 2021-22, temporarily putting the
fund in a deficit position. Legal and settlement costs are already trending above budget
in FY 2022-23.
Pros
• The city’s Risk Management Fund would have additional funds to absorb
increasing costs that are trending above the FY 2022-23 budget
• The city’s reserve balance would be reduced to a level closer to the 40%
target
2 A 50% confidence level, the city’s expected confidence level, means that there is an equal likelihood that the
city’s actual outstanding losses may emerge higher or lower than the estimates. The city’s outstanding losses have
a 50% chance of emerging higher or lower than $22,009,758. The actuary’s expected outcome is $22,009,758.
Similarly, the city’s outstanding losses have a 10% chance of emerging higher than $38,737,174 and a 90% chance
of emerging lower than $38,737,174. The actuary’s expected outcome is $22,009,758.
Sept. 27, 2022 Item #11 Page 6 of 19
Con
• These funds would not be available for other purposes once they are
appropriated.
Option C: Approve an additional transfer of $1.4 million to the Fleet Maintenance Fund
to establish a healthy minimum fund balance and an appropriation of $290,000 to
account for fuel and parts costs trending above budget in FY 2022-23. The fund recently
collected less revenue because the previous methodology for variable maintenance
costs resulted in a lag in revenue generation and the fund collecting less revenue than
budgeted. Costs for fuel, oil, and parts is trending higher than anticipated when the
budget for FY 2022-23 was originally submitted in February 2022.
Pros
• The city’s Fleet Maintenance Fund would have a healthy minimum fund
balance moving forward and be pulled out of a deficit position.
• The city’s reserve balance would be reduced to a level closer to the 40%
target
Cons
• Funds, once appropriated, would not be available for other purposes.
Option D: Take no additional action and allow the surplus to increase the General Fund
reserve balance
Pros
• Funds would be available for other uses in the future
Cons
• The city’s reserve balance would be above its targeted level
Fiscal Analysis
The unspent and unencumbered budget balance as of June 30, 2022, for the General Fund and
the amounts of the department carryforwards are as follows:
Initial surplus budget funds (unaudited) $14,659,885
Previous City Council-approved carryforwards -$5,902,457
Available surplus budget funds $8,757,428
General Fund reserve replenishment required -
Pension liability deficiency -
City Manager-approved carry forward requests -$690,160
Carryforward requests for City Council approval -$1,174,750
Ending total of surplus budget funds $6,892,518
Sept. 27, 2022 Item #11 Page 7 of 19
The impact of each associated action on the city’s General Fund reserve balance are shown
below:
Reserve
balance Reserve %*
Beginning projected unassigned General Fund balance 122,315,475 62%
Previously approved carryforward requests -5,902,457 -3%
City Manager approved carryforward requests -690,160 -0.40%
Carryforward requests for City Council approval -1,174,750 -0.60%
Projected unassigned General Fund balance after
carryforwards 114,548,108 62%
Reserve balance requirement (40% of budget) 73,840,000 40%
Excess reserve 40,708,108 22%
*Calculated as a percentage of the FY 2021-22 adopted budget of $184.6 million
Next Steps
All City Council-approved carryforward requests will be appropriated to FY 2022-23. The annual
fiscal year audit is currently underway for FY 2021-22. City staff will return to the City Council to
present the results of the financial audit and the status of the city’s General Fund reserve after
the final audit opinion has been issued.
Environmental Evaluation
In accordance with California Public Resources Code Section 21065, this action does not
constitute a project within the meaning of the California Environmental Quality Act in that it
has no potential to cause either a direct physical change in the environment, or a reasonably
foreseeable indirect physical change in the environment. Therefore, it does not require
environmental review.
Public Notification
This item was noticed in keeping with the Ralph M. Brown Act and it was available for public
viewing and review at least 72 hours before the scheduled meeting date.
Exhibits
1.City Council Resolution – Carryforward approval
2.Listing of City Manager-approved FY 2021-22 General Fund and non-General Fund
carryforward budget requests
3.Items approved by previous City Council action and unspent grant and developer balances
4.City Council resolution – Transfer to Workers’ Compensation Fund
5.City Council resolution – Transfer to Risk Management Fund
6.City Council resolution – Transfer to Fleet Maintenance Fund
Sept. 27, 2022 Item #11 Page 8 of 19
RESOLUTION NO. 2022-229
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING FISCAL YEAR 2021-22 BUDGET CARRYFORWARD
REQUESTS AND APPROPRIATION OF FUNDS TO FISCAL YEAR 2022-23 AND
AUTHORIZING CAPITAL OUTLAY PURCHASES
WHEREAS, the City Council of the City of Carlsbad, California established City Council Policy No.
87 -General Fund Surplus Policy for the appropriation of surplus funds resulting from General Fund
actual revenues exceeding total actual expenditures, plus any unspent and unencumbered
expenditures budgeted for a given fiscal year; and
WHEREAS, at the close of fiscal year 2021-22, the city's unaudited General Fund reserve balance
is 62% and has exceeded its General Fund Reserve Policy target of 40%; and
WHEREAS, at the close of fiscal year 2021-22, the remaining unaudited unspent and
unencumbered expenditures budget for the General Fund is $14.7 million of which $5.9 million has
been carried forward as a result of previous City Council resolutions, resulting in an available surplus
of $8.8 million; and
WHEREAS, in accordance with City Council Policy No. 87, the City Manager has approved
individual items of less than $100,000 that total $690,160 in General Fund carryforward requests and
$1,275,102 in carryforward requests for other non-General Fund funds; and
WHEREAS, City Council Policy No. 87 requires City Council approval for the carryforward of any
unspent and unencumbered budget for a particular item equal to or greater than $100,000; and
WHEREAS, department carryforward requests submitted for City Council approval that total
$1,174,750 in General Fund carryforward requests and $120,000 in carryforward requests for other
non-General Fund funds are listed in Attachment A to this resolution.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1.That the above recitations are true and correct.
2.That the budget carryforward requests shown in Attachment A to this resolution are
approved for carryforward from fiscal year 2021-22 to fiscal year 2022-23.
3.That the City Manager, or designee, is authorized to purchase the capital outlay items
as shown in Attachment A.
Exhibit 1
Sept. 27, 2022 Item #11 Page 9 of 19
4.That the City Manager, or designee, is authorized to purchase the self-contained
breathing apparatuses described in Attachment A for an amount up to $1,000,000.
5.That the Deputy City Manager, Administrative Services, is authorized to appropriate
carryforward budgets to the funds in the amounts shown in Attachment A.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 27th day of September, 2022, by the following vote, to wit:
AYES:
NAYS:
ABSENT:
Blackburn, Bhat-Patel, Acosta, Norby.
Hall.
None.
MATT HALL, Mayor
FAVIOLA MEDINA, City Clerk Services Manager
(SEAL)
Sept. 27, 2022 Item #11 Page 10 of 19
DEPARTMENT FUND DESCRIPTION
REQUEST
TYPE
AMOUNT
Community Development General Fund Parking In-Lieu Program Fee Update Other 150,000
Fire General Fund Replace Self-Contained Breathing Apparatus prior to expiration Capital Outlay 850,000
Police General Fund License Plate Reader installation Professional Services 174,750
Environmental Sustainability Non General Fund Contract for Compliance Evaluation Professional Services 120,000
General Fund Total 1,174,750
Non-General Fund Total 120,000
GRAND TOTAL 1,294,750$
CARRYFORWARD BUDGET REQUESTS FOR CITY COUNCIL CONSIDERATION
CITY OF CARLSBAD FY 2021-22 TO FY 2022-23
(ITEMS EQUAL TO OR GREATER THAN $100,000)Attachment ASept. 27, 2022Item #11 Page 11 of 19
DEPARTMENT FUND DESCRIPTION
REQUEST
TYPE
AMOUNT
City Manager General Fund Funding professional service agreement Professional Services 8,000
City Manager General Fund Sustainability efforts - Kitchen supplies, appliances, modifications Equipment & Supplies 12,500
City Manager General Fund Training opportunities Professional Services 1,000
City Manager General Fund State of the City event tickets Other 1,500
Housing & Homeless Services General Fund New staff furniture, equipment, supplies Equipment & Supplies 21,981
Housing & Homeless Services General Fund Winning teams grants Equipment & Supplies 20,268
Parks & Recreation General Fund Office Renovation & Security Capital Outlay 10,000
Parks & Recreation General Fund Consultant Services for Park in Lieu Fee Survey Study/Reports 40,000
Parks & Recreation General Fund Sandag Regional Beach Sand Replenishment Project III - Prelim Study/Eval (Phase I)Other 40,000
City Clerk General Fund Desktop to Laptop Conversion for future City Clerk Equipment & Supplies 1,540
Environmental Sustainability General Fund Comprehensive CAP Update - additional costs Professional Services 20,000
Finance General Fund Additional conference Budget Other 4,300
Finance General Fund Consultant costs for cost recovery policy Professional Services 11,000
Finance General Fund FEMA claim related consulting services Professional Services 98,000
Fire General Fund iPad Replacement Program Capital Outlay 9,000
Fire General Fund EMS Supplies - replace expiring items Equipment & Supplies 10,000
Fire General Fund Three additional portable radios for EOC Capital Outlay 23,000
Fire General Fund Boat dock installation at Temporary Fire Station 7 Capital Outlay 50,000
Fire General Fund Update emergency alerting system at Fire Station 6 Capital Outlay 7,000
Fire General Fund Urban Search & Rescue Appartus equipment Capital Outlay 96,000
Fire General Fund Installation of ambulance decals to show new staffing model Equipment & Supplies 8,000
Fire General Fund Purchase two reserve gurneys for ambulances Capital Outlay 24,000
Fire General Fund Purchase 20 Fire Apparatus Decontamination Units Equipment & Supplies 43,000
Fire General Fund Outfit replacement apparatus with updated equipment Capital Outlay 42,000
Fleet & Facilities General Fund EV Charging Station and connectivity kit Capital Outlay 26,084
Police General Fund Hotel Voucher Program Professional Services 15,000
Police General Fund Purchase Police K9 and academy costs Capital Outlay 18,000
Police General Fund Lockbox for property pick up Equipment & Supplies 3,792
Police General Fund Computers for employees Capital Outlay 25,195
Fleet Replacement General Fund-ISF Complete planned vehicles and outfitting*Other 459,358
Information Technology General Fund-ISF Fluid mesh wireless devices implementation services Professional Services 50,000
Information Technology General Fund-ISF Azure cloud storage devices - Pilot Professional Services 50,000
Information Technology General Fund-ISF Harris (Utility Billing System) domain migration Professional Services 18,000
Information Technology General Fund-ISF Navisite Lawson domain migration Professional Services 5,850
Information Technology General Fund-ISF Finance Enterprise (FE) - upgrade/domain migration Professional Services 21,240
Information Technology General Fund-ISF ECS Credits - Laserfiche support Professional Services 7,500
Information Technology General Fund-ISF IT Training video and document services Professional Services 25,000
Information Technology - Repl General Fund-ISF Annual Replacement Fund carryforward*Capital Outlay 626,359
Utilities Non General Fund Saw Cut machine for water construction maintenance Capital Outlay 11,795
General Fund Total 690,160
Non-General Fund Total 1,275,102
GRAND TOTAL 1,965,262$
*Totals are comprised of individual items less than $100,000
CARRYFORWARD BUDGET REQUESTS APPROVED BY CITY MANAGER
CITY OF CARLSBAD FY 2021-22 TO FY 2022-23
(ITEMS LESS THAN $100,000)Exhibit 2Sept. 27, 2022Item #11 Page 12 of 19
DEPARTMENT FUND DESCRIPTION
REQUEST
TYPE AMOUNT
Transportation General Fund Update to the Sustainable Mobility Plan Element Professional Services 276,399
Multiple Departments General Fund Declaration of Local Emergency Other 2,000,000
Police General Fund Take Home Vehicles Capital Outlay 3,164,000
Community Development General Fund Unspent Developer Deposits Deposits 397,575
Library & Cultural Arts General Fund Adult Learning Grant Balance Unspent Grant Balance 41,091
Library & Cultural Arts General Fund State Grant Balance Unspent Grant Balance 15,892
Environmental Sustainability General Fund CAP Grant Balance Unspent Grant Balance 7,500
Information Technology General Fund-ISF Navisite Lawson hosting extension Other 446,625
Housing & Homeless Services Non General Fund CDBG Grant Balance Unspent Grant Balance 18,208
Housing & Homeless Services Non General Fund CDBG Community Support Grant Balance Unspent Grant Balance 944,157
Police Non General Fund JAG Grant Balance Unspent Grant Balance 18,285
Fire Non General Fund Homeland Security Grant Balance Unspent Grant Balance 54,612
Environmental Sustainability Non General Fund FY 2021 Beverage Container Grant Balance Unspent Grant Balance 220
Environmental Sustainability Non General Fund FY 2022 Beverage Container Grant Balance Unspent Grant Balance 27,354
General Fund Total 5,902,457
Non-General Fund Total 1,509,461
GRAND TOTAL 7,411,918$
CITY OF CARLSBAD FY 2021-22 TO FY 2022-23 CARRYFORWARD
BUDGET LISTINGITEMS APPROVED BY PREVIOUS CITY COUNCIL ACTION ANDUNSPENT GRANT AND DEVELOPER BALANCES
Exhibit 3Sept. 27, 2022Item #11 Page 13 of 19
RESOLUTION NO. 2022-230
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING THE APPROPRIATION AND TRANSFER FROM
GENERAL FUND RESERVES IN FISCAL YEAR 2022-23 TO THE CITY'S WORKERS'
COMPENSATION FUND
WHEREAS, City Council Policy No. 87 -General Fund Surplus Policy allows for General Fund
reserve levels in excess of the 40% target requirement to be used for one-time opportunity cost
purposes at the discretion of the City Council; and
WHEREAS, at the close of fiscal year 2021-22, the city's unaudited General Fund reserve balance
is 62% and has exceeded its General Fund Reserve Policy (City Council Policy No. 74) target of 40%; and
WHEREAS, at the close of fiscal year 2021-22, the remaining unaudited unspent and
unencumbered expenditures budget for the General Fund is $14.7 million of which $5.9 million has
been carried forward as a result of previous City Council resolutions, resulting in an available surplus
of $8.8 million; and
WHEREAS, City Council Policy No. 87 requires City Council approval for the carryforward of any
unspent and unencumbered budget for a particular item equal to or greater than $100,000; and
WHEREAS, the city is self-insured for workers' compensation; and
WHEREAS, an external actuary firm estimated the city's outstanding losses based on current
claims, case reserves and incurred but not reported claims, and determined that when compared to
current fund balances, the city has additional potential exposure that could be mitigated; and
WHEREAS, the balance of the city's Workers' Compensation fund at June 30, 2022 is
$13,801,506, which is $8,208,252 less that the actuary firm's expected loss outcome of $22,009,758.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1.That the above recitations are true and correct.
2.That a transfer to the city's Workers' Compensation Fund in an amount �s determined
by the City Council and set forth in the minutes of the City Council meeting of Tuesday,
Sept. 27, 2022, is approved to help mitigate potential future exposure based on the
most recent report from the external actuary firm.
Exhibit 4
Sept. 27, 2022 Item #11 Page 14 of 19
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 27th day of September, 2022, by the following vote, to wit:
AYES:
NAYS:
ABSENT:
Blackburn, Bhat-Patel, Acosta, Norby.
Hall.
None.
MATT HALL, Mayor
� � FAVIOLA MEDINA, City Clerk Services Manager 1" (SEAL)
Sept. 27, 2022 Item #11 Page 15 of 19
RESOLUTION NO. 2022-231
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING THE APPROPRIATION AND TRANSFER FROM
GENERAL FUND RESERVES IN FISCAL YEAR 2022-23 TO THE CITY'S RISK
MANAGEMENT FUND
WHEREAS, City Council Policy No. 87 -General Fund Surplus Policy allows for General Fund
reserve levels in excess of the 40% target requirement to be used for one-time opportunity cost
purposes at the discretion of the City Council; and
WHEREAS, at the close of fiscal year 2020-21, city's unaudited General Fund reserve balance is
57% and has exceeded its General Fund Reserve Policy (City Council Policy No. 74) target of 40%; and
WHEREAS, at the close of fiscal year 2021-22, the remaining unaudited unspent and
unencumbered expenditures budget for the General Fund is $14.7 million of which $5.9 million has
been carried forward as a result of previous City Council resolution, resulting in an available surplus of
$8.8 million; and
WHEREAS, City Council Policy No. 87 requires City Council approval for the carryforward of any
unspent and unencumbered budget for a particular item equal to or greater than $100,000; and
WHEREAS, the balance of the city's Risk Management Fund at June 30, 2022 is in a temporary
deficit position of $472,000 due to unanticipated costs and costs are trending above budget for Fiscal
Year 2022-2023.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1.That the above recitations are true and correct.
2.That a transfer to the city's Risk Management Fund in an amount as determined by the
City Council and set forth in the minutes of the City Council meeting of Tuesday, Sept. 27,
2022, is approved.
Exhibit 5
Sept. 27, 2022 Item #11 Page 16 of 19
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 27th day of September, 2022, by the following vote, to wit:
AYES:
NAYS:
ABSENT:
Blackburn, Bhat-Patel, Acosta, Norby.
Hall.
None.
J!;& L FAVIOLA MEDINA, City Clerk Services Manager 1v -(SEAL)
Sept. 27, 2022 Item #11 Page 17 of 19
RESOLUTION NO. 2022-232
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING THE APPROPRIATION AND TRANSFER FROM
GENERAL FUND RESERVES IN FISCAL YEAR 2022-23 TO THE CITY'S FLEET
MAINTENANCE FUND
WHEREAS, City Council Policy No. 87 -General Fund Surplus Policy allows for General Fund
reserve levels in excess of the 40% target requirement to be used for one-time opportunity cost
purposes at the discretion of the City Council; and
WHEREAS, at the close offiscal year 2021-22, the city's unaudited General Fund reserve balance
is 62% and has exceeded its General Fund Reserve Policy (City Council Policy No. 74) target of 40%; and
WHEREAS, at the close of fiscal year 2021-22, the remaining unaudited unspent and
unencumbered expenditures budget for the General Fund is $14.7 million of which $5.9 million has
been carried forward as a result of previous City Council resolutions, resulting in an available surplus
of $8.8 million; and
WHEREAS, City Council Policy No. 87 requires City Council approval for the carryforward of any
unspent and unencumbered budget for a particular item equal to or greater than $100,000; and
WHEREAS, the balance of the city's Fleet Maintenance Fund is expected to be in a deficit during
fiscal year 2022-23 due to a lag in revenue collection and unanticipated increase in fuel, oil and parts
costs.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1.That the above recitations are true and correct.
2.That a transfer to the city's Fleet Maintenance Fund in an amount as determined by the
City Council and set forth in the minutes of the City Council meeting of Tuesday, Sept. 27,
2022, is approved.
3.That the Deputy City Manager, Administrative Services, is authorized to transfer
$290,000 from the General Fund to the Fleet Maintenance Fund and appropriate
$290,000 to the Fleet Maintenance operating budget.
Exhibit 6
Sept. 27, 2022 Item #11 Page 18 of 19
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 27th day of September, 2022, by the following vote, to wit:
AYES:
NAYS:
ABSENT:
Blackburn, Bhat-Patel, Acosta, Norby.
Hall.
None.
� FAVIOLA MEDINA, City Clerk Services Manager
{SEAL)
Sept. 27, 2022 Item #11 Page 19 of 19
General Fund Surplus Policy:
Fiscal Year 2021-22 Review
Zach Korach, Finance Director
Finance Department
September 27, 2022
COUNCIL POLICY NO. 87
ITEM 11: GENERAL FUND SURPLUS
•General Fund Surplus Policy
•Established a policy for the appropriation of any actual
revenues less actual expenditures, in a given fiscal year,
plus any unspent and unencumbered expenditure budget
FISCAL YEAR 2021-22 GENERAL FUND
RESERVE SUMMARY
Year -end Summary:Total
Unassigned at 2020-21 FYE $120,998,762
Revenues 198,898,098
Expenditures 197,581,385
Surplus 1,316,713
Unassigned at 2021-22 FYE $122,315,475
ITEM 11: GENERAL FUND SURPLUS
FISCAL YEAR 2021-22 GENERAL FUND
BUDGET SUMMARY
Spending category:Working Budget Unspent budget
at year end
% Unspent
M&O and capital outlay $76,636,438 $8,492,533 11%
Personnel 120,853,689 6,167,353 5%
Transfers 26,927,804 -0%
Grand Total $224,417,931 $14,659,885 6.5%
ITEM 11: GENERAL FUND SURPLUS
BUDGET SURPLUS FUNDS
USED TO:
•Replenish reserve deficiencies, if needed
•Replenish any pension liability deficiencies, if needed
•Used for one-time expenditures that will not create new ongoing services, programs or personnel
ITEM 11: GENERAL FUND SURPLUS
CARRYFORWARD REQUESTS EQUAL
TO OR GREATER THAN $100,000 FOR
CITY COUNCIL APPROVAL
ITEM 11: GENERAL FUND SURPLUS
•General Fund ($1,174,750):
–Community Development: Parking In-Lieu Program
Fee Update ($150,000)
–Fire: Replace self-contained breathing apparatus prior
to expiration ($850,000)
–Police: License plate reader installation ($174,750)
CARRYFORWARD REQUESTS EQUAL
TO OR GREATER THAN $100,000 FOR
CITY COUNCIL APPROVAL
ITEM 11: GENERAL FUND SURPLUS
•Non-General Fund ($120,000):
–Environmental Sustainability: Contract for compliance
evaluation ($120,000)
OPTIONS FOR REMAINING
GENERAL FUND SURPLUS:
•Transfer remaining budget surplus, and some of the city’s General Fund reserve, to a combination
of the city’s internal service funds
•Workers’ Compensation
•Risk
•Fleet Maintenance
ITEM 11: GENERAL FUND SURPLUS
SUMMARY OF
FISCAL YEAR
2021-22 SURPLUS
Available according to Policy
Actual surplus $1,316,713
Unspent and unencumbered budget 14,659,885
Total available $15,976,598
Spending
Previously approved:
Unspent grants and developer deposits $462,058
Declaration of Emergency 2,000,000
Police Take Home Vehicles 3,164,000
Sustainable Mobility Plan Update 276,399
City Manager approved <$100,000 690,160
Council approved >$100,000 1,174,750
Internal Service Fund transfers:
Workers’ Compensation 8,208,252
Risk Management 1,000,000
Fleet Maintenance 1,400,000
Total spending $18,375,619
Additional spending under Council’s discretion $2,399,021
FISCAL YEAR 2021-22 GENERAL
FUND RESERVE SUMMARY
Year -end Summary:Total
Ending Unassigned $122,315,475
Surplus budget used as summarized thus far 14,659,885
Revenue excess and one-time General Fund reserve use 3,715,734
Estimated ending unassigned as of June 30, 2022 $103,939,856
40% minimum reserve policy 73,840,000
General Fund available for use in excess of reserve requirement $30,099,856
ITEM 11: GENERAL FUND SURPLUS
PROPOSED ACTION
ITEM 11: GENERAL FUND SURPLUS
•Adopt a resolution approving and appropriating fiscal
year 2021-22 budget carryforward requests of
individual items equal to or greater than $100,000
•Consider adopting a resolution transferring General
Fund dollars to the previously mentioned internal
service funds and appropriating $290,000 to Fleet
Maintenance’s budget for fuel, oil and parts