COUNCIL COMMUNICATION
TO: Honorable Mayor and Council
FROM: Jill Olsen, Administrative Services Director
SUBJECT:Title
Adopt Resolution No. 24-3724 Adopting by Reference a Fiscal Sustainability Policy (Jill Olsen)
y
FUNDING SOURCE:
N/A
PURPOSE:
The City has a responsibility to its citizens to accurately account for public funds and to manage City finances properly. A Fiscal Sustainability Policy is a tool to be used to provide policy information for adequately funding core services to the community.
BACKGROUND:
The City updated its Fiscal Sustainability Policy in 2020. Staff has further updated the policy to reflect the Budget Stabilization Reserve (BSR) percentage for the General Fund, which was increased to 50% of the average actual fund revenues for the most recent five fiscal years. This increase was made two years ago and is prudent due to the type of revenue that most supports the General Fund operations, which is the transaction privilege tax, commonly known as a sales tax. Due to the City’s economy relying so heavily on tourism, the largest funding source in the General Fund is sales tax revenue.
The Water Fund, Wastewater Fund, and Highway User Revenue Fund are recommended to continue with BSR levels of 15% of the average actual fund revenues for the most recent five fiscal years. This level of funding will allow each of the funds to provide sufficient working capital to address emergencies and for capital replacement reserves.
Other changes are minor administrative corrections to terminology, punctuation and grammar.
COMMUNITY IMPACT:
A Fiscal Sustainability Policy will allow the citizens to know and understand the funding goals set by the City Council for managing the fiscal resources of the City.
FISCAL IMPACT:
There is no fiscal impact with the adoption of this policy.
ATTACHMENTS:
Resolution 24-3724
Fiscal Sustainability Policy
SUGGESTED MOTION:Recommended Action
I move to adopt Resolution 24-3724 adopting by reference a Fiscal Sustainability Policy.