LEGISLATIVE ACTION ITEM
SPONSOR: Grover C. Robinson, IV, Mayor
SUBJECT:
title
PROPOSED ORDINANCE NO. 02-22 - AMENDING SECTION 3-1-11 COUNCIL RESERVE (GENERAL FUND)
end
RECOMMENDATION:
recommendation
That City Council adopt Proposed Ordinance No. 02-22 on second reading.
AN ORDINANCE AMENDING SECTION 3-1-11 OF THE CODE OF THE CITY OF PENSACOLA, FLORIDA, COUNCIL RESERVE (GENERAL FUND) TO PROVIDE THE FINANCE DIRECTOR THE AUTHORITY TO DETERMINE IF ANNUAL INTEREST EARNINGS SHOULD BE APPLIED TO THE RESERVE BALANCE; PROVIDING FOR SEVERABILITY; REPEALING CLAUSE; AND PROVIDING AN EFFECTIVE DATE.
end
body
HEARING REQUIRED: No Hearing Required
SUMMARY:
On September 9, 2010, City Council adopted Resolution No. 31-10 which created the Fund Balance Policy of Governmental Funds in accordance with Governmental Accounting and Financial Standards Board Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. The policy aimed to more clearly define the nature and extent of the constraints placed on a government’s fund balance. The policy included a section on General Fund Council Reserves which set a minimum reserve of fifteen percent of the General Fund beginning adopted appropriations and outlined the use, replenishment and funding of such reserves.
On October 9, 2014, City Council adopted Ordinance No. 39-14 which created Section 3-1-13 of the Code of the City of Pensacola, Florida in order to commit the Council Reserve fund balance in the General Fund. The ordinance mirrored the General Fund Council Reserves section of the Fund Balance Policy of Governmental Funds.
On January 12, 2017, City Council approved amending the Council Reserves (General Fund) section of the Fund Balance Policy to increase Council Reserves from fifteen percent to twenty percent.
On March 9, 2017, City Council adopted Ordinance No. 04-17 amending the minimum reserve to twenty percent in order to comply with Fund Balance Policy. The City has exceeded the twenty percent minimum reserve requirement every year since the ordinance was amended and as of September 30, 2021, City Council reserve was at 22.77% of the fiscal year 2022 beginning adopted appropriations.
With the twenty percent requirement constantly being met, staff would like to amend the ordinance to allow the Finance Director the discretion to determine if annual interest earnings should be applied to the reserve balance each year or allow the interest earnings to remain in the general fund to be used towards general fund operations.
Should City Council approve Proposed Ordinance No. 02-22, amending Section 3-1-11, the City Council’s Fund Balance Policy will also need to be amended by resolution.
PRIOR ACTION:
February 10, 2022 - City Council voted to approve Proposed Ordinance No. 02-22 on first reading.
September 9, 2010 - City Council adopted Resolution No. 31-10 which committed the Council reserves fund balance in the general fund.
October 9, 2014 - City Council adopted Ordinance No. 39-14 which committed the Council reserves fund balance in the general fund.
January 12, 2017 - City Council approved amending the Council reserves fund balance in the general fund to increase Council Reserves from 15 percent to 20 percent.
March 9, 2017 - City Council approved Ordinance No. 04-17 on second reading amending the Council reserves fund balance in the general fund to increase Council Reserves from 15 percent to 20 percent.
FUNDING:
N/A
FINANCIAL IMPACT:
Annual interest earnings not applied to the reserve balance will allow the interest earnings to remain in the general fund to be used towards general fund operations.
LEGAL REVIEW ONLY BY CITY ATTORNEY: Yes
1/20/2022
STAFF CONTACT:
Kerrith Fiddler, City Administrator
Amy Miller, Deputy City Administrator - Administration & Enterprise
Amy Lovoy, Finance Director
ATTACHMENTS:
1) Proposed Ordinance No. 02-22
PRESENTATION: No end