HomeMy WebLinkAbout2005-25850 Reso
RESOLUTION NO.
2005-25850
A RESOLUTION OF THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, APPRO-
PRIATING AN ADDITIONAL $1,193,443 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 $1 0 million in
the General Fund (the Resolution); 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, the Resolution provided for said Reserve to be adjusted
annually, to equal 11 % of the current General Fund Operating Budget; and
WHEREAS, the Resolution provides for the appropriation of an additional
$1,193,443 which will bring the said Reserve to $18,607,574 (includes $108,887
from the sale of the City owned property located at 1749 Jefferson Avenue,
pursuant to Resolution No. 99-23396 adopted on November 17, 1999), which is
11 % of the Fiscal Year 2004/05 General Fund Operating Budget.
NOW, THEREFORE, BE IT DULY RESOLVED BYTHE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that an additional
$1,193,443 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 16th
March
2005.
Attest~~~ PiM-~
CITY CLERK
MAYOR
APPROVED AS TO
FORM & LANGUAGE
. fOR EXECUTION
~1-~
CITY OF MIAMI BEACH
COMMISSION ITEM SUMMARY
~
Condensed Title:
Resolution appropriating an additional $1,193,443 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 government's credit worthiness.
Item Summary/Recommendation:
I Adopt the Resolution. .
i:,:SO!l' Board Recommendation:
Financial Information:
D
Finance Dept.
Undesignated Fund Balance of the
General Fund
Source of
Funds:
City Clerk's Office Legislative Tracking:
I
AGENDA ITEM
DATE
I? 73
3-(6~
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
www.miamibeachfl.gov
COMMISSION MEMORANDUM
From:
Mayor David Dermer and Date: March 16,2005
Members of the City Commission
Jorge M. Gonzalez }~L" ;---
City Manager 0 '0
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, APPROPRIATING AN ADDITIONAL
$1,193,443 TO THE RESERVE FOR CONTINGENCIES IN THE GENERAL
FUND (11% EMERGENCY RESERVE) FROM THE UNDESIGNATED
FUND BALANCE OF THE GENERAL FUND.
To:
Subject:
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
ANALYSIS
The current reserve for contingencies is $17,414,131 which includes the additional
$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 $168,169,878 for the 2004/05 fiscal year, the 11 % reserve should
now be $18,607,574 (including the $108,887 mentioned above). The additional
appropriation of $1 ,193,443 in this resolution will bring the reserve to the required amount
of $18,607,574 which represents approximately 6 weeks of General Fund operating
expenditures if the annual budget was expended ratably throughout the year. The funding
for this appropriation is from the Undesignated Fund Balance of the General Fund.
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 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 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 it's 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/KGB/JC
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