HomeMy WebLinkAbout2023-09-26; City Council; ; General Fund Surplus Policy: Approval of Fiscal Year 2022-23 Budget Carryforward Requests and Appropriation of Funds to Fiscal Year 2023-24CA Review JRT
Meeting Date: Sept. 26, 2023
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Zach Korach, Finance Director
zach.korach@carlsbadca.gov or 442-339-2127
Subject: General Fund Surplus Policy: Approval of Fiscal Year 2022-23 Budget
Carryforward Requests and Appropriation of Funds to Fiscal Year 2023-24
Districts: All
Recommended Action
Adopt the following:
1.A resolution approving the fiscal year 2022-23 budget carryforward requests and
appropriation of funds to fiscal year 2023-24 and authorizing capital outlay purchases.
2.A resolution approving the restriction of General Fund reserves in fiscal year 2023-24 to
fund the initial contribution to a Section 115 Trust.
3.A resolution approving the use of the fiscal year 2022-23 General Fund surplus for
appropriation and transfer to the city’s Workers’ Compensation Fund in fiscal year 2023-
24.
4.A resolution approving the use of the fiscal year 2022-23 General Fund surplus for
appropriation and transfer to the city’s Risk Management Fund in fiscal year 2023-24.
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 2023-24 for the City
Council’s consideration and approval. The requests are detailed below.
Staff are also reporting that the city is in conformance with City Council Policy No. 74 on the
General Fund Reserve and with 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 City Council, and because the City Council’s approval
is required for individual carryforwards greater than $100,000.
Sept. 26, 2023 Item #11 Page 1 of 21
Discussion
Items approved by prior City Council action
The City Council has already approved carrying forward the budget for various items from FY
2022-23 to FY 2023-24. A list of unspent grant funding and developer deposits previously
approved by the City Council through the FY 2023-24 operating budget resolution (Resolution
No. 2023-161, adopted on June 13, 2023) is included as Exhibit 3. These items include:
• Grant funding approved but not yet completely expended by the end of the fiscal year
for various programs and services, including:
o $171,330 in unspent grant funding in the General Fund
o $3,505,645 in total unspent grant funding in all other funds
• Unspent developer deposits received for developer-funded studies and plan check
services that were not expended by fiscal year-end. These total $32,777 in the General
Fund.
Council Policy No. 87 – General Fund Surplus Policy
This policy established the process of using surplus funds after a fiscal year has ended. 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.
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
$141.3 million, or 65% of the FY 2023-24 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 unfunded liability is the difference between pension assets and liabilities, while the
funded ratio or status is the ratio of pension assets to liabilities. Over the last six years,
the city has taken proactive steps to address pension contribution volatility and manage
the unfunded liability. Since fiscal year 2016-17, the city has contributed $56.4 million in
additional discretionary payments to CalPERS, which has significantly helped increase
the plan’s funded status.
As of CalPERS’ June 30, 2021, actuarial valuation, the city’s plan had a total actuarial
liability of $828.8 million, an unfunded liability of $115.9 million and a funded status of
86%. No additional contribution was required at that time. However, in fiscal year 2021-
22, CalPERS experienced an investment loss of -6.1%, which significantly reduced the
city’s funded status. As of June 30, 2022, actuarial valuation (released in August 2023),
the city’s plans, in total, have an actuarial liability of $874.4 million, an unfunded liability
of $222.4 million and a funded status of 74.6%. While CalPERS’ -6.1% investment
performance in fiscal year 2021-22 will not impact the city’s required contributions until
fiscal year 2024-25, the city’s current funded status is 74.6%, putting it below the policy
target of 80%. To achieve an 80% funded status, the city would need to contribute an
additional discretionary payment of $47,553,869 to CalPERS.
Sept. 26, 2023 Item #11 Page 2 of 21
Policy No. 86 also states that “in the event the city is unable to meet the minimum
combined pension funded ratio of 80% with current resources (i.e., without borrowing
or using reserves), the Finance Director or Deputy City Manager of Administrative
Services will identify a reasonable period to return to a minimum 80% funded ratio
status.” Rather than making a one-time payment of $47.5 million to CalPERS, staff
recommend the difference between the current funded status of 74.6% and the 80%
target be contributed to the Section 115 Trust over a five-year period. The city would
make an initial trust contribution of $10.0 million followed by four annual contributions
of $7.5 million with General Fund dollars. Over the five-year period and beyond, assets
in the trust will be invested, in accordance with the city’s Pension Trust Investment
Policy, with a “balanced” investment strategy. Staff project that at the end of fiscal year
2027-28, assets in the trust will meet the 80% funded status target.
While this will ensure an 80% combined funded ratio is maintained, the ultimate funding
goal would be for the city to have sufficient assets in the trust to be prepared for further
discount rate reductions by CalPERS. Following the funding schedule of an initial
contribution of $10 million, followed by four annual contributions of $7.5 million, and
assuming an annual rate of return of 6.25%, not only would the city’s funded status
reach 80% over a five-year period, but over a 20-year period there would be sufficient
assets in the trust to fund a potential reduction in CalPERS’ discount rate from the
current 6.8% to 6.25%. This potential reduction in CalPERS’ discount rate represents an
additional $118 million in currently unfunded costs.
The accounting for this $10 million contribution does not require the City Council to
approve a budget appropriation or transfer of General Funds. Instead, if the City Council
approves the contribution, this money will be marked as restricted and presented as
such in the city’s financial statements.
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 ongoing services, programs or
personnel.
In July 2023, 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. The City Manager
approved $770,636 in General Fund carryforward requests and $130,067 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 City Manager completed a preliminary review of department-submitted budget
carryforward requests greater than $100,000 for submission to the City Council. The
requested items over $100,000 requiring City Council approval are listed and described in
the following section. The General Fund carryforward requests total $2,802,416 and the
Sept. 26, 2023 Item #11 Page 3 of 21
non-General Fund requests total $3,550,506. A listing of these requests is included as
Attachment A to Exhibit 1.
General Fund requests for City Council approval
• Planning Division on-call contract support $150,000
o The Planning Division Community Development workload is subject to market
conditions, and variables such as land value, home values, construction costs and
lending rates have combined to have significant variability in the discretionary
work proposed. Its workload is also changing from handling master planned
communities to infill developments and smaller projects by homeowner
applicants (such as for accessory dwelling units). Permit numbers were at a
record in FY 2022-23 and have been just below that in FY 2023-24.
o The budget request will be used to have contracts available with up to three
consultants that could help process discretionary projects for the planning
division only when and if workload increases. This is a temporary solution in case
the department experiences an increase in permit activities in the current year.
• Ambulance gurney replacement $620,000
o Fire Department uses ambulance gurneys during every patient transport to
package, treat and relocate a patient from the incident location to the ambulance
and then from the ambulance to a hospital bed. The gurney is also the means of
safely securing a patient while in transit on the road. The department’s gurneys
are outside of their warranty life and are showing signs of failure earlier than
anticipated. The Fire Department requests carryforward budget to purchase and
install new ambulance gurneys ahead of schedule. The proposed replacements
provide greater load capacity and an electrically powered lifting and loading
capability. Neighboring agencies have implemented the same technology and
have seen a decrease in workers’ compensation related back injuries and
experienced greater reliability and patient safety.
• Take-home vehicle program costs - $513,176
o On Aug. 30, 2022, the City Council approved the purchase and outfitting of 34
fully outfitted marked police vehicles. On Dec. 6, 2022, City Council approved
additional funding for the take-home vehicle program. The funds for the vehicles
and radios have been encumbered. The remaining funding will be used to outfit
the take-home vehicles with necessary police equipment such as restraints,
protective gear, first aid kits, fire extinguishers, flares, blankets and safety tools.
Supply chains are still recovering from the effects of the COVID-19 pandemic,
which has delayed this process, thus requiring a request for a budget
carryforward.
• M500 in-car video systems - $338,356
o On August 30, 2022, the City Council approved the purchase and installation of
the M500 in-car video systems for police patrol vehicles. The Police Department
has not yet received all of the equipment. Due to the delays in receiving the
Sept. 26, 2023 Item #11 Page 4 of 21
cameras ordered, this process is taking longer than expected, thus requiring a
request for this budget carryforward.
• Taser replacements - $622,164
o The Police Department’s inventory of 140 Tasers will be entirely beyond their
useful lives beginning in January 2024 and no longer covered under the vendor’s
liability insurance policy, so the department is requesting a budget carryforward
to fully replace the current inventory.
• Local traffic safety emergency distribution - $558,720
o The City Council declared a local traffic safety emergency on Aug. 30, 2022, and
appropriated $2 million for various projects to address the emergency. As of
2022-23 fiscal year-end, $558,720 of budget is still available. On July 11, 2023, the
City Council extended the emergency through Sept. 8. This request carries
forward the full remaining balance of budget related to the emergency
declaration. Staff stated at the July 11 City Council meeting that they plan to
return to the City Council in Oct. 2023 when they have a full year of data with a
comprehensive report on the emergency.
Non-General Fund requests for City Council approval
• Complete FY 2022-23 approved vehicle purchases - $1,270,000
o Due to supply chain issues vehicle and equipment availability some vehicles
slated for replacement in FY 2022-23 were unable to be procured before the end
of the fiscal year. This request carries forward budget to replace the remaining
vehicles as originally planned in the fiscal year 2022-23 budget.
• Pending agricultural mitigation fee grants - $112,206
o The city approved several appropriations of grant funds in fiscal year 2022-23,
including for a regional beach sand project, to the Agua Hedionda Lagoon
Foundation, Buena Vista Audubon Society, Flower Fields at Carlsbad Ranch, and
Carlsbad Aquafarms, Inc. This request is for the total amount of budget not yet
encumbered or spent before fiscal year-end related to these grants.
• Complete FY 2022-23 approved Information Technology replacements - $484,454
o This request carries forward budget to complete the remaining replacements
planned in the fiscal year 2022-23 budget. The budget is needed to ensure all
city hardware is replaced on a timely basis. Items remaining to be purchased
include computers, switches, servers, routers, firewalls and miscellaneous
infrastructure. No item costs over $100,000.
• Potable water master plan update - $650,000
o The Potable Water Master Plan update provides a system evaluation and
capacity assessment of the potable water system and recommends a capital
improvement program project to provide for continued reliable water service
through buildout conditions, which are projected to occur by 2045 or later. By
updating this master plan, the project will help guide Carlsbad in spending
precious funds in the most cost-effective manner. The plan was last updated in
2019, and it is an industry best practice to update every five years to reflect
Sept. 26, 2023 Item #11 Page 5 of 21
changing conditions such as development, zoning and water availability. The
process can take a year or more, so Utilities staff recommend initiating it now.
• Wastewater master plan update - $650,000
o The Wastewater Master Plan update provides a system evaluation and capacity
assessment of the wastewater system and recommends a capital improvement
program to provide for continued reliable wastewater service through buildout
conditions, which are projected to occur by 2045 or later. By updating this
master plan, the resulting capital improvement program (CIP) will help guide
Carlsbad in spending precious funds in the most cost-effective manner. The Plan
was last updated in 2019, and it is an industry best practice to update every five
years to reflect changing conditions such as development, zoning, and system
replacement needs. The process can take a year or more, so Utilities
recommends initiating now.
• Convert several trucks in the Utilities fleet - $145,000
o This request is a combined effort to convert two trucks slated for replacement to
utility trucks, combine the planned replacements of two vehicles for one utility
truck, and the outfitting costs for a separate utility truck. The conversion of two
trucks to utility trucks will offer a utility bed for greater operational capability.
The combined replacement of two vehicles for one utility truck was identified as
an effort to reduce the department’s number of vehicles in its Fleet. The
outfitting costs are to install a crane in the back of a truck to lift fire hydrants
that weigh 500 pounds, which is necessary, especially with the recent hiring of a
senior SCADA technician and a utility locator position. All costs noted above are
affiliated with vehicle replacements already approved during one of the city’s
budgeting processes.
• Opioid settlement - $238,846
o Under the Janssen and Distributor Settlement agreements dated as of July 21,
2021, the City of Carlsbad is entitled to receive annual settlement payments
totaling $1.8 million over the next 16 years.1 The settlement funds are to be
committed and/or expended within a period of five years after receiving and
must be used primarily on high-impact abatement activities. The amount
requested to be carried forward represents the settlement funds received as of
June 30, 2023. In collaboration with the city’s Fire, Police and Housing &
Homeless Services departments, these funds will be used in accordance with the
allowability requirements set forth in the respective settlement agreements.
Transfer items
The city is self-insured for both Risk Management and Workers’ Compensation claims. During
fiscal year 2022-23, both funds encountered higher expenses than anticipated, prompting the
City Manager to appropriate additional budget in the amount of $1.3 million to the Workers’
1 The Janssen and Distributor settlement agreements are two separate agreements finalized in 2022 to resolve
liabilities in over 3,000 opioid crisis-related lawsuits. The settlements are estimated to pay out more than $50
billion to state and local governments over the next 18 years. California is estimated to receive approximately
$2.05 billion through 2028.
Sept. 26, 2023 Item #11 Page 6 of 21
Compensation Fund and $5 million to the Risk Management Fund. The City Manager has the
authority to do so in accordance with the resolution adopting the city’s fiscal year 2022-23
operating budget.
The Workers’ Compensation expenses exceeded budget for several reasons, including:
• A high volume of new claims and both old and new claims being closed and settled
• Increasing surgical and other high-cost claims
• 33 additional full-time equivalent positions in the Fire and Police departments from FY
2019-20 to FY 2021-22
• An increase in reserves of $2.8 million during FY 2022-23
The Risk Management expenses also exceeded budget based on the following factors:
• An increase in reserves of $1.9 million for several large claims, including three landslide
claims
• An increased cost for legal defense and for experts, such as engineers
The additional spending above budget resulted in the Workers’ Compensation nearly depleting
its available fund balance and the Risk Management Fund experiencing a temporary deficit at
the end of the 2022-23 fiscal year. To put the funds in a positive position and provide a
conservative fund balance to support their operations, staff recommend the City Council
approve General Fund transfers of $1.3 million to the Workers’ Compensation Fund and $5
million to the Risk Management Fund.
Options
Options for surplus budget and the General Fund reserve
Several options to deploy budget surplus from FY 2022-23 are presented for the City Council’s
consideration:
A: Adopt a resolution approving General Fund transfers of $10 million to the Section 115 Trust
Pro
• The city would not need to make an immediate payment to CalPERS for $47.5 million.
Rather, over a five-year period, the city will contribute assets to the Section 115 Trust
to reach a combined 80% funded status.
Con
• Funds that would have otherwise been contributed to the trust could be used for
other purposes.
B: Adopt a resolution approving a General Fund of $1.3 million to the Workers’ Compensation
Fund
Pro
• The city will have sufficient fund balance to support operations funded out of the
Workers’ Compensation Fund.
Con
• Funds that would have otherwise been contributed to the Workers’ Compensation
Fund could be used for other purposes.
C: Adopt a resolution approving General Fund transfers of $5 million to the Risk Management
Fund
Sept. 26, 2023 Item #11 Page 7 of 21
Pro
• The city will have sufficient fund balance to support operations funded out of the Risk
Management Fund.
Con
• Funds that would have otherwise been transferred to the Risk Management Fund
could be used for other purposes.
D: Take no action on the transfer requests brought forward for City Council approval.
Pro
• Funds that would have otherwise been contributed to the trust and transferred to the
Risk Management and Workers’ Compensation funds could be used for other
purposes.
Con
• If a five-year funding strategy to reach an 80% funded ratio is not approved, then an
immediate $47.5 million contribution to CalPERS may be needed in accordance with
City Council Policy No. 86.
• The city’s Risk Management Fund would be nearly depleted, and the Workers’
Compensation Fund would be temporarily in a deficit position and not have sufficient
fund balances to support their operations.
Options for carryforward requests
Staff provide the following options in response to the carryforward requests brought forward
for the City Council’s consideration:
1. 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 2023-24
Pro
• 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.
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.
Staff recommend Option 1.
Sept. 26, 2023 Item #11 Page 8 of 21
Fiscal Analysis
Council Policy No. 87 defines “surplus” as actual revenues less actual expenditures, plus any
unspent and unencumbered expenditure budget. The table below calculates the surplus
available for the City Council’s consideration in accordance with the policy. All figures presented
below are unaudited.
Summary of General Fund surplus at 2022-23 fiscal year-end
Unassigned at end of FY 2021-22 $120,554,527
Revenues 225,859,521
Expenditures* 205,160,746
Surplus $20,698,775
Unassigned at end of FY 2022-23 $141,253,302
Unspent and unencumbered budget 10,822,333
Carryforward authority (surplus + unspent budget) $31,521,108
*Excludes encumbrances
The table below presents the effect on the budget surplus if the City Council were to approve
all presented carryforward requests and additional staff-recommended options.
Summary of staff recommended General Fund budget actions
Carryforward authority (surplus + unspent budget) $31,521,108
Previously approved grants/developer deposits 204,107
Initial Section 115 Trust contribution* 10,000,000
City Manager approved carryforward requests below $100,000 770,636
City Council approved carryforward requests above $100,000 2,802,416
Transfer to Workers’ Compensation Fund 1,300,000
Transfer to Risk Management Fund 5,000,000
Total spending $20,077,159
Remaining authority $11,443,949
*Does not require appropriation
The following table presents a summary of the General Fund at 2022-23 fiscal year-end after
considering approval of the items presented above and the new General Fund reserve in
comparison to policy.
Effect of carryforward budget decision on the General Fund reserve
Reserve
balance
Reserve
percent*
Initial unassigned fund balance as of 2022-23 FYE $141,253,302 65%
Proposed use of surplus -20,077,159 -9%
Updated estimated unassigned fund balance $121,176,143 56%
40% minimum reserve policy $86,771,842 40%
Funds in excess of reserve requirement $34,404,301 16%
*Calculated as a percentage of the FY 2023-24 adopted budget of $216,929,604
Sept. 26, 2023 Item #11 Page 9 of 21
The city’s current pension-funded ratio is 74.6%, which is $47.5 million below the 80% policy
target. Rather than immediately contributing the $47.5 million to CalPERS, $40 million will be
contributed to the Section 115 Trust over a five-year period with an annual target rate of return
of 6.25%. Contributions to the trust will move the funds from “unassigned” fund balance to
“restricted” fund balance in the General Fund. These funds will be available to count towards
the city’s funded ratio as set forth in City Council Policy 86, as amended, and mitigate budgetary
pressures resulting from potential volatility in CalPERS’ required contributions made by the city.
If approved, the city will contribute $10 million from the General Fund to the Section 115 Trust,
and the remaining funds over a five-year period. The City Council will have the opportunity to
review and approve each transfer in the coming years.
Next Steps
All City Council and City Manager-approved carryforward requests will be appropriated to the
fiscal year 2023-24 budget. If approved, General Fund reserve will be restricted to make the
initial $10 million contribution to the Section 115 trust. If approved, the budget for General
Fund transfers to the Workers’ Compensation and Risk Management funds will be appropriated
and the transfers will be completed. The annual fiscal year audit is currently underway for FY
2022-23. 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
This action does not require environmental review because it does not constitute a project
within the meaning of the California Environmental Quality Act under California Public
Resources Code Section 21065 in that it has no potential to cause either a direct physical
change or a reasonably foreseeable indirect physical change in the environment.
Exhibits
1.City Council resolution - carryforward approval
2.List of City Manager-approved FY 2022-23 General Fund and non-General Fund carryforward
budget requests
3.Items approved by previous City Council action, including unspent grant and developer
balances
4.City Council resolution - contribution to Section 115 Trust
5.City Council resolution - transfer to Workers’ Compensation Fund
6.City Council resolution - transfer to Risk Management Fund
Sept. 26, 2023 Item #11 Page 10 of 21
RESOLUTION NO. 2023-251
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING THE FISCAL YEAR 2022-23 BUDGET
CARRYFORWARD REQUESTS AND. APPROPRIATION OF FUNDS TO FISCAL
YEAR 2023-24 AND AUTHORIZING CAPITAL OUTLAY PURCHASES
WHEREAS, the City Council of the City of Carlsbad, California established its General Fund
Surplus Policy (City Council Policy No. 87} 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 2022-23, the city's unaudited General Fund reserve balance
is 65% and has exceeded its General Fund Reserve Policy (City Council Policy No. 74} target of 40%; and
WHEREAS, at the close of fiscal year 2022-23, the remaining unaudited unspent and
unencumbered expenditure budget for the General Fund is $10.8 million of which approximately
$200,000 has been carried forward because of a previous City Council resolution, resulting in an
available surplus of $10.6 million; and
WHEREAS, at the close of fiscal year 2022-23, the General Fund surplus, or actual revenues less
actual expenditures, is $20.7 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 $770,636 in General Fund carryforward requests and
$130,067 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
$2,802,416 in General Fund carryforward requests and $3,550,506 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 2022-23 to fiscal year 2023-24.
Exhibit 1
Sept. 26, 2023 Item #11 Page 11 of 21
3.That the City Manager, or designee, is authorized to purchase the capital outlay items
as shown in Attachment A.
4.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 26th day of Sept., 2023, by the following vote, to wit:
AYES:
NAYS:
ABSTAIN:
ABSENT:
Blackburn, Bhat-Patel, Acosta, Burkholder, Luna.
None.
None.
None.
KEITH BLACKBURN, Mayor
�
,rsHERRY FREISINGER, City Clerk
(SEAL)
Sept. 26, 2023 Item #11 Page 12 of 21
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Attachment A
Sept. 26, 2023 Item #11 Page 13 of 21
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Sept. 26, 2023 Item #11 Page 14 of 21
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Exhibit 3
Sept. 26, 2023 Item #11 Page 15 of 21
RESOLUTION NO. 2023-252
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING THE RESTRICTION OF GENERAL FUND RESERVES
IN FISCAL YEAR 2023-24 TO FUND THE INITIAL CONTRIBUTION TO A SECTION
115 TRUST
WHEREAS, City Council's General Fund Surplus Policy (City Council Policy No. 87) 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 2022-23, the city's unaudited General Fund reserve balance
is 65% and has exceeded its General Fund Reserve Policy (City Council Policy No. 74) target of 40%; and
WHEREAS, at the close of fiscal year 2022-23, the remaining unaudited unspent and
unencumbered expenditure budget for the General Fund is $10.8 million of which approximately
$200,000 has been carried forward because of a previous City Council resolution, resulting in an
available surplus of $10.6 million; and
WHEREAS, at the close of fiscal year 2022-23, the General Fund surplus, or actual revenues less
actual expenditures, is $20.7 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, a Section 115 Trust for pension was established by the City Council on September
12,2023;and
WHEREAS, City Council Policy No. 86 strives to maintain a combined pension-funded status of
80% and allows assets in the city's Section 115 Trust for pension to count towards the city's combined
pension-funded status; and
WHEREAS, as of CalPERS' June 30, 2022, actuarial valuation report, the city's combined funded
status was 74.6%; and
WHEREAS, the city's Section 115 Trust shall be funded over a period of five fiscal years in order
to achieve and maintain an 80% combined pension-funded status.
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.
Exhibit 4
Sept. 26, 2023 Item #11 Page 16 of 21
2.That a contribution to the city's Section 115 Trust for pension in the amount of
$10,000,000 is approved.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 26th day of Sept., 2023, by the following vote, to wit:
AYES:
NAYS:
ABSTAIN:
ABSENT:
Blackburn, Bhat-Patel, Acosta, Burkholder, Luna.
None.
None.
None.
v KEITH BLACKBURN, Mayor
SHERRY FREISINGER, City Clerk
(SEAL)
Sept. 26, 2023 Item #11 Page 17 of 21
~ ----
RESOLUTION NO. 2023-253
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING THE USE OF THE FISCAL YEAR 2022-23 GENERAL
FUND SURPLUS FOR APPROPRIATION AND TRANSFER TO THE CITY'S
WORKERS' COMPENSATION FUND IN FISCAL YEAR 2023-24
WHEREAS, City Council's General Fund Surplus Policy (City Council Policy No. 87) 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 2022-23, the city's unaudited General Fund reserve balance
is 65% and has exceeded its General Fund Reserve Policy (City Council Policy No. 74) target of 40%; and
WHEREAS, at the close of fiscal year 2022-23, the remaining unaudited unspent and
unencumbered expenditure budget for the General Fund is $10.8 million of which approximately
$200,000 has been carried forward because of a previous City Council resolution, resulting in an
available surplus of $10.6 million; and
WHEREAS, at the close of fiscal year 2022-23, the General Fund surplus, or actual revenues less
actual expenditures, is $20.7 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 Workers' Compensation Fund on June 30, 2023, is nearly
depleted due to unanticipated costs and costs 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 Workers' Compensation Fund in the amount of $1.3 million,
is approved.
Exhibit 5
Sept. 26, 2023 Item #11 Page 18 of 21
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 26th day of Sept., 2023, by the following vote, to wit:
AYES:
NAYS:
ABSTAIN:
ABSENT:
Blackburn, Bhat-Patel, Acosta, Burkholder, Luna.
None.
None.
None.
KEITH BLACKBURN, Mayor
SHERRY FREISINGER, City Clerk
(SEAL)
Sept. 26, 2023 Item #11 Page 19 of 21
-L
RESOLUTION NO. 2023-254
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING THE USE OF THE FISCAL YEAR 2022-23 GENERAL
FUND SURPLUS FOR APPROPRIATION AND TRANSFER TO THE CITY'S RISK
MANAGEMENT FUND IN FISCAL YEAR 2023-24
WHEREAS, City Council's General Fund Surplus Policy (City Council Policy No. 87) 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 2022-23, the city's unaudited General Fund reserve balance
is 65% and has exceeded its General Fund Reserve Policy (City Council Policy No. 74) target of 40%; and
WHEREAS, at the close of fiscal year 2022-23, the remaining unaudited unspent and
unencumbered expenditure budget for the General Fund is $10.8 million of which approximately
$200,000 has been carried forward because of a previous City Council resolution, resulting in an
available surplus of $10.6 million; and
WHEREAS, at the close of fiscal year 2022-23, the General Fund surplus, or actual revenues less
actual expenditures, is $20.7 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, 2023, is in a temporary
deficit position due to unanticipated costs and costs 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 the amount of $5 million, is
approved.
Exhibit 6
Sept. 26, 2023 Item #11 Page 20 of 21
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 26th day of Sept., 2023, by the following vote, to wit:
AYES:
NAYS:
ABSTAIN:
ABSENT:
Blackburn, Bhat-Patel, Acosta, Burkholder, Luna.
None.
None.
None.
KEITH BLACKBURN, Mayor r SHERRY FREISINGER, City Clerk
(SEAL)
Sept. 26, 2023 Item #11 Page 21 of 21
WL
Tammy Cloud-McMinn
From:
Sent:
To:
Council Internet Email
Monday, September 25, 2023 7:44 AM
City Clerk
Subject: FW: Public comment on 9/26/2023 City Council Item #11 : Budget Carryforward
Requests
From: Steve Linke <splinke@gmail.com>
Sent: Friday, September 22, 2023 10:28 PM
To: Council Internet Email <CityCouncil@carlsbadca.gov>
All Receive -Agenda Item# /.L
For the Information of the:
~f.11)',SOUNCIL
Datio/~CA ~c .--
CM ...!CACM _v1XM (3) .:::::::-
Subject: Public comment on 9/26/2023 City Council Item #11: Budget Carryforward Requests
Mayor, Mayor Pro-Tern, and Councilmembers:
I noted on Page 492 of the agenda packet that the City Manager approved a $60,000 budget request for a consultant to
update the Sustainable Mobility Plan (SMP) with Vision Zero language. When this item came before the traffic
commission, staff was proposing $150,000 for a consultant to create a standalone Vision Zero Plan, and I made a
successful motion to recommend instead just updating our existing SMP with a few sentences with similar goals (with
the intent to save the $150,000). I am not sure now why the city would have to spend up to $60,000 to have a
consultant add some Vision Zero language to the SMP.
I have expressed how "the commitment" to Vision Zero to eliminate all serious and fatal traffic-related injuries is an
unachievable goal, and that it is well-documented that it has not worked in other cities. In that regard, it is interesting to
note that last month's Carlsbad police report to the traffic commission sadly included one traffic fatality and one severe
injury. The fatality was due to loss of control of a car that hit a tree on the roadside, and the severe injury was a
motorcyclist who lost control going ove r one of the new speed cushions on Tamarack Avenue.
It is unclear how staff is going to re-engineer all city streets to prevent any cars from losing control and hitting trees, and
it is quite ironic that it was the very installation of a traffic calming device consistent with Vision Zero (speed cushion)
that led to the severe injury. We also know that installation of roundabouts leads to increased crashes into the
roundabout itself. I supported and still support the speed cushions on Tamarack and some (but not all) roundabouts.
However, these incidents exemplify why you should not spend up to $60,000 of taxpayer money on the absurd Vision
Zero commitment.
Just have staff spend five minutes copying and pasting the Vision Zero goals into a paragraph in the SMP, and then use
the $60,000 you save in cons ulting fees to pay for actual safety projects. No hypothetical future grant relies on a
consultant adding the Vision Zero language.
Best regards,
Steve Linke
CAUTION: Do not open attachments or click on links unless you recognize the sender and know the content i
safe.
1