Description: AGENDAHED.JPG
 

Item No:                    5H.(1)- Substitute for 5H.

 

Meeting Date:           September 24, 2012

 

From:                          Bill Spinelli, Finance Director, CPA

 

Subject:                      Resolution approving a transfer from the Worker’s Compensation Fund to the General Fund in the amount of $568,000 to offset the FY 2012-13 General Fund Budget Shortfall

 

 


Staff Recommendation:

Staff recommends approval of a transfer from the Worker’s Compensation Fund to the General Fund in the amount of $568,000 to offset the FY 2012-13 General Fund Budget Shortfall.

 

Analysis:

Last year, the Health Insurance Fund had insufficient reserves, which necessitated the City to reserve $568,000.  The funds were available in the Worker’s Compensation Fund and were restricted as a back-stop to the Healthcare Fund.  The reserves in the Healthcare Fund have now been restored allowing the City to un-restrict the $568,000 which is now available to be transferred to the General Fund to offset a portion of the FY 2012-13 General Fund Budget Shortfall.   This does not compromise the fiscal health of the Worker’s Compensation Fund. 

 

After further review of the City’s projected budget shortfall for FY 2012-13 an alternative strategy has been developed to use the $568,000 to offset recurring General Fund expenses in the FY 2012-13 Budget.  While this is not a recurring option and the General Fund FY 2013-14 Budget will not have these same funds available, it does lessen the amount of the General Fund FY 2012-13 shortfall. 

 

In an effort to improve its cash position, staff updated and the City Commission adopted new cash policies in fiscal year 2007.  Ordinance 07-80, Section 2-230 provides for utilization of surplus cash which is defined as cash that exceeds 115% of the minimum acceptable level of cash reserve.  Utilization of Surplus Cash can be approved for any one of the following; elimination of shortfalls in related funds, reduction or avoidance of debt, funding of a renewal and replacement program, one time capital needs and for use in funding tax, fee or rate stabilization.  In addition to the Surplus Cash test, Ordinance 07-82 provides for a five year pro forma cash flow projection to determine the financial impact if any on the fund from which the transfer is drawn (attached).   The following test reflects the amount of Surplus Cash available as of September 30, 2012:

 

Minimum Cash Reserve Requirement                         $1,167,797

Add 15% Reserve                                                           175,169

Minimum Level of Acceptable Cash Reserve              $1,342,966

Unaudited Cash Balance as of September  2012          2,017,504

                                                Surplus Cash                $  674,538

 

The calculation as reflects adequate surplus cash to allow for the special transfer.

 

Options:

1.  Approve the transfer from the Worker’s Compensation Fund to the General Fund in the amount of $568,000; Or

2.  Such alternative action as the Commission may deem appropriate

 

 

Fiscal Impact: 

The impact on the surplus cash of the Worker’s Compensation Fund would be minimal decreasing the surplus cash from $674,538 to $106,538.  In addition, pro forma cash flow projections for the next five years reflect continued growth in cash reserves.

 

 

Submission Date and Time:    9/24/2012 3:34 PM____

 

Department: ______________________

Prepared by:  ______________________                     

Attachments:         Yes____   No ______

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Attorney Review :       Yes___  No ____

                                                 

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head ________

 

Finance  Dept. __________________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ___________________

 

Account No. 065-1350-581-9501 __

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________

 

RESOLUTION NO.___________

 

 

RESOLUTION OF THE CITY COMMISION OF THE CITY OF LEESBURG, FLORIDA AUTHORIZING A TRANSFER FROM THE WORKER'S COMPENSATION FUND TO THE GENERAL FUND NOT TO EXCEED $568,000; AND PROVIDING AN EFFECTIVE DATE.

 

BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:

 

            THAT the City Commission hereby authorizes the transfer of $568,000 from the Worker’s Compensation Fund to the General Fund to offset the General Fund FY 2012-13 budget shortfall.

 

             THAT this resolution shall become effective immediately.

 

PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the _24TH ____ day of _September________ 2012.

 

 

 

                                                                            __________________________

                                                                             Mayor

 

ATTEST:

 

 

_________________________________

City Clerk