2003-25173 ResoRESOLUTION NO. 2003-25173
A RESOLUTION OF THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, APPRO-
PRIATING AN ADDITIONAL $1,751,444 TO THE RESERVE
FOR CONTINGENCIES IN THE GENERAL FUND (11%
EMERGENCY RESERVE) FROM THE UNDESIGNATED
FUND BALANCE OF THE GENERAL FUND.
WHEREAS, the Mayor and City Commission adopted Resolution No.
96-22014 on June 5, 1996, establishing a Reserve for Contingencies of $10
million in the General Fund; and
WHEREAS, on February 18, 1998, the existing resolution was amended to
bring the definition of emergency in line with the City Charter, which defined a public
emergency as one that affects life, health , property or public safety and requires
when such a condition exists that City Commission adopt an emergency ordinance
by a five -sevenths (5/7) vote; and
WHEREAS, bond rating agencies, (Fitch, Moody's, and Standard &
Poor's) view fund balance reserve policy and the related reserve adequacy as a
very significant criteria in assessing a government's credit worthiness; and
WHEREAS, said Resolution provided for said Reserve to be adjusted
annually, to equal 11% of the current General Fund Operating Budget; and
WHEREAS, said Resolution provides for the appropriation of an additional
$1,751,444 which will bring the said Reserve to $17,414,131 (includes $108,887
from the sale of the City owned property located at 1749 Jefferson Avenue,
Resolution No. 99-23396 adopted on November 17, 1999), which is 11% of the
Fiscal Year 2002/03 General Fund Operating Budget.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that an additional
$1,751,444 of the balance in the Undesignated Fund Balance in the General Fund
of the City be appropriated into the Reserve for Contingencies in the General Fund
(11% Emergency Reserve).
PASSED AND ADOPTED THIS 9th
A- Pax it,_
CITY CLERK
April 2003.
MAYOR
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
CITY OF MIAMI BEACH
COMMISSION ITEM SUMMARY
Condensed Title:
Resolution appropriating an additional $1,751,444 to the Reserve for Contingencies in the General Fund
(11% Emergency Reserve) from the Undesignated Fund Balance of the General Fund.
Issue:
The Reserve for Contingencies must remain at 11% of the General Fund Operating Budget for the current
fiscal year. The approval of this resolution will accomplish this goal. Bond rating agencies, (Fitch, Moody's,
and Standard & Poor's) view fund balance reserve policy and the related reserve adequacy as very
significant criteria in assessing a governments credit worthiness.
Item Summary/Recommendation:
Adopt the Resolution
Advisory Board Recommendation:
N/A
Financial Information:
Amount to be expended:
Source of
Funds:
Finance Dept.
1
2
I3
I 4
Total
Amount
Account Approved
$1,751,444 Undesignated Fund Balance of the
General Fund
Si n -Offs:
Department Director fr) Assistant City Manager
City Manager
AGENDA ITEM R7D
DATE 9'--1-03
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
h ttp:\\a . m i a m i -beach . fl. u s
COMMISSION MEMORANDUM
TO: Mayor David Dermer and
Members of the City Commission
FROM: Jorge M. Gonzalez
City Manager
V
DATE: April 9, 2003
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, APPROPRIATING AN ADDITIONAL
$1,751,444 TO THE RESERVE FOR CONTINGENCIES IN THE GENERAL
FUND (11% EMERGENCY RESERVE) FROM THE UNDESIGNATED
FUND BALANCE OF THE GENERAL FUND.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
ANALYSIS
The current reserve for contingencies is $15,662,687 which includes $108,887 from the
sale of the City owned property located at 1749 Jefferson Avenue (Resolution No. 99-
23396 adopted on November 17, 1999). As the City's General Fund Operating Budget
totals $157,320,404 for the 2002/03 fiscal year, the 11% reserve should now be
$17,414,131 (including the $108,887 mentioned above). The additional appropriation of
$1,751,444 in this resolution will bring the reserve to the required amount of $17,414,131,
which represents approximately 1.6 months (6 weeks) of General Fund operating
expenditures if the annual budget was expended ratably throughout the year. This
appropriation has historically been made as the year-end audit nears completion and the
results of the prior year's operations are known.
BACKGROUND
On June 5, 1996, the City Commission adopted Resolution No. 96-22014 which
established a permanent reserve in the General Fund for contingencies to be held for use
in an emergency. This resolution established the reserve at $10 million and required that
the reserve be maintained at a minimum amount of eleven percent (11%) of the existing
General Fund Budget. Expenditure of these funds was permitted only, if and when an
emergency was declared, and the expenditure was authorized by a majority of the City
Commission.
On February 18, 1998, it became necessary to further safeguard and clarify the use of
these funds. The existing resolution was amended to bring the definition of emergency in
line with the City Charter, which defined a public emergency as one that affects life, health ,
property or public safety and requires when such a condition exists that City Commission
adopt an emergency ordinance by a five -sevenths (5/7) vote.
Bond rating agencies, (Fitch, Moody's, and Standard & Poor's) view fund balance reserve
policy and the related reserve adequacy as very significant criteria in assessing a
government's credit worthiness. In fact, Fitch believes that "it is appropriate to explicitly
give greater weight in the credit rating process to such standards" and rates the best
practice of a fund balance reserve policy as perhaps the most effective practice an issuer
can use to enhance its credit rating.
In accordance with the resolution adopted by the City Commission on June 5, 1996, and
amended on February 18,1998, this action is required to maintain the reserve for
contingencies at the required level.
JMG/PDW/JC