►
Description
San Bruno City Council Meeting January 22, 2013
10f. Approve the City of San Bruno Reserves Policy
B
Honorable
mayor
members
of
the
City
Council,
the
proposed
reserve
policy
is
before
you
this
evening
in
response
to
previous
discussions
that
occurred
during
the
development
of
the
2012-13
budget,
in
which
we
begin
discussions
on
the
creation
of
a
reserve
policy.
I
would
like
to
be
clear
that,
from
the
start,
that
this
is
what
I'm
viewing
as
a
starting
point
for
the
creation
of
a
reserve
policy
I'm
viewing
this
as
a
step-by-step
process
and
tonight.
B
What
I'd
like
to
do
is
walk
through
the
proposed
policy
and
hear
your
thoughts
and
receive
some
direction
on
this
policy.
Adoption
of
the
resolution
this
evening
is
not
necessary.
We
can
come
back
at
a
later
date
if
the
Council
of
desires
or
we
can
move
forward
tonight
with
a
first
step,
knowing
that
we
will
come
back
and
continue
to
add
and
revise
this
policy
over
time
as
we
collect
more
information.
B
So
what
I'd
like
to
do
is
start
by
going
into
you.
What
are
the
current
reserve
funds
that
we
have?
Just
because
we
don't
have
a
reserve
policy,
doesn't
necessarily
mean
that
we
don't
have
reserve
funds
at
this
point
in
time
we
have
what
two
separate
funds
that
are
undesignated
general
fund
reserve
funds-
those
are
the
general
fund
reserve
and
the
one-time
revenue
reserve.
Both
of
these
funds
have
been
funded
over
time
as
a
result
of
one-time
monies
we've
received,
as
well
as
any
type
of
budget
surplus
that
might
have
occurred
in
years.
B
Past
would
also
be
absorbed
into
a
general
fund
reserve,
and
so
these
neither
the
two
funds,
have
a
dedicated
ongoing
funding
source.
They
have
been
funded
over
time
through
one-time
monies.
The
second
to
the
latter,
two
items
the
self-insurance
fund
and
the
equipment
reserve
fund
are
both
reserved
internal
reservist
reserve
funds
that
are
currently
funded
through
the
operating
budget.
Each
year
we
look
at
what
the
need
is
in
each
of
those
departments
and
we
fund
based
on
allocation
from
departments.
So
those
are
reserve
funds
that
are
in
place.
B
The
polo's
proposed
policy
that
is
before
you
this
evening
does
not
include
a
discussion
on
the
self-insurance
fund
or
the
equipment
reserve
fund
only
because
those
funds
are
currently
established.
They
currently
have
a
funding
source
and
what
we'd
like
to
do
is
do
further
research
and
get
more
information
before
we
come
back
and
have
another
discussion
on
what
the
appropriate
fund
balance
levels
might
be
of
those
funds.
B
So
to
start,
why
do
we
have
a
reserve
policy?
What's
the
point
of
establishing
one?
It's
really
a
financial
management
best
practice.
It
allows
an
agency
to
be
prepared
to
deal
with
uncertainty
and
the
unexpected
financial
reserves
demonstrate
the
financial
stability
in
strength
of
an
organization.
They
allow
an
agency
to
maintain
good
standing
with
credit
rating
agencies,
and
we
actually
saw
this
firsthand
recently
in
early
December.
We
had
a.
B
We
did
a
credit
rating
presentation
for
the
issuance
of
the
pension
obligation,
bonds
with
Standard
&
Poor's,
and
one
thing
that
we
discussed
quite
a
bit
and
that
they
looked
at
where
our
current
reserve
balances.
They
wanted
those
assurances
that
the
city
could
deal
with
an
unexpected
event,
so
strength
and
financial
reserves.
I
feel
was
a
major
factor
in
us
being
able
to
secure
a
double
A
rating.
B
General
fund
reserves
are
typically
set
up,
as
they're
typically
established
as
a
percentage
of
overall
general
fund
expenditures.
That's
what's.
That
was
what
you
will
see
in
most
agencies.
The
GF
OA
recommends
that
an
agency
have
a
minimum
of
two
months.
Sixteen
point:
six
percent
of
general
fund
reserves
a
set
aside.
That
said,
it
can
range
from
anywhere
from
that
fifteen
percent
level,
two
as
high
as
forty
fifty
percent
and
above
so.
What
do
you
look
at
and
beginning
to
determine?
What
is
the
appropriate
level?
You
would
first
start
by
looking
at
the
risk
factors.
B
To
begin
with,
for
those
first
few
weeks
in
response
to
the
glenview
fire
were
in,
excess
is
six
million
dollars
in
a
situation
in
which
there
isn't
a
hundred
percent
recovery
reimbursement,
the
city,
the
agency,
could
be
liable
for
up
to
twenty
five
percent
of
those
costs,
so
those
are
some
things
to
keep
in
mind.
The
next
item
to
think
about
is
revenue
volatility.
B
San
Bruno
is
fortunate
to
have
a
stable
and
diverse
revenue
base.
We
don't
recurrently,
have
our
highest
single
revenue
source,
the
sales
tax
that
just
about
twenty
percent,
so
we
are
well
diversified.
However,
that
said
any
major
retailer
live
leaving
the
city
would
have
a
major
impact
on
the
budget,
so
nobody's
immune
from
revenue
volatility.
However,
we
do
have
a
somewhat
stable
base,
so
it's
something
to
keep
in
mind.
B
The
next
item
is
to
evaluate
the
potential
for
loss.
What
is
the
potential
for
current
liability
claims
outstanding,
and
is
there
any
potential
liability
for
us
and
not
recovered
for
those
situations?
The
self-insurance
fund
that
I
mentioned
earlier
currently
has
a
balance
of
2.1
million
dollars.
That's
cash
balance
of
2.1
million
dollars
and
that
amount
is
actually
sufficient
to
cover
the
calculated
liability
of
our
claims
at
this
point
in
time.
B
Additional
considerations
include
the
size
of
the
city.
You
tend
to
see
smaller
cities
having
larger
reserves
because
they
may
be
more
dependent
on
just
one
or
two
revenue
streams,
budget
practices.
If
a
city
is
if
the
city's
approach
to
budgeting
is
to
include
contingencies
or
a
lot
of
one-time
monies
makes
them
susceptible
to
economic
changes.
However,
the
city's
approach
has
been
a
very
conservative
approach
to
budgeting
and
finally,
looking
at
debt
levels,
we
have
a
very
very
low
debt
levels.
B
B
Beyond
determining
the
reserve
level,
some
thought
needs
to
be
given
to
the
guidelines
for
the
use
of
reserve
funds.
Typically,
you
want
to
find
the
appropriate
balance
between
language
that
provides
flexibility
for
those
anticipated
situations,
but
also
ensures
that
the
reserves
will
be
there
during
the
times
they
are
intended
for
what
we
attempted
to
do
with
this
policy
is
addressed
this
by
establishing
two
separate
general
fund
reserve
funds.
B
The
guidelines
for
the
use
of
the
general
fund
reserve
in
the
proposed
policy
would
be
in
situations
in
which
there
is
a
decrease
in
revenues
in
excess
of
five
percent
of
total
expenditures,
or
excuse
me
in
total
revenues
in
one
year
now,
keep
in
mind.
Five
percent
equates
to
1.5
million
dollars,
so
that
is
a
very
significant
amount,
and
so
that
said
something
to
keep
in
mind
of
whether
or
not
that's
a
reasonable
number
or
something
smaller
or
larger
may
be
of
more
comfort.
B
The
next
would
be
in
a
situation
in
which
there's
a
loss
of
revenues
from
another
government
entity,
and
the
first
thing
that
comes
to
mind
here
is
another
read
situation
similar
to
redevelopment
in
which
we
have
a
devastating
loss
of
revenue
to
the
city.
This
policy
would
allow
the
general
fund
reserve
to
be
utilized
in
those
types
of
situations.
B
Finally,
as
it
also
allows
the
flexibility
to
utilize
the
general
fund
reserve
for
one-time
non-recurring
initiatives
of
the
city
council
that
are
important,
so
it
allows
that
flexibility
to
fund
one-time
projects
that
may
have
no
other
funding
source
second
fund
that
we
are
proposing
to
be
established
would
be.
It
was
called
a
general
fund,
contingency
reserve,
and
this
would
have
a
goal
of
maintaining
a
target
fund
balance
of
1.5
million
dollars.
And
this
what
this
one
would
have
no
restrictions
on
its
use.
B
B
I
just
wanted
to
give
you
a
little
bit
of
perspective
of
what
some
of
the
general
fund
reserve
policies.
The
ranges
are
in
other
cities
in
San,
Mateo
County,
and
you
can
see
they
very
pretty
widely
Belmont
at
twenty
percent
Brisbane
at
six
million
dollars,
although
I
don't
have
a
percentage
of
their
budget
there,
but
they
are
a
smaller
agency
and
I
would
expect
them
to
have
a
far
higher
percentage
of
their
expenditures
reserved
for
men.
B
B
So,
moving
on
from
the
discussion
on
the
general
fund
reserve
funds,
the
proposed
policy
includes
some
discussion
on
the
development
of
additional
reserve
funds.
The
first
of
those
would
be
the
creation
of
an
emergency
disaster
reserve
fund
with
a
goal:
initial
goal
of
3
million
dollars,
funding,
target
balance,
and
this
fund
would
be
reserved
only
for
those
situations
in
which
a
declaration
of
emergency
were
declared,
and
then
those
funds
would
be
the
go-to
source
of
funds
for
that
situation.
The
capital
next
one
would
be
the
establishment
of
a
capital
improvement.
One
time
initiatives
fund.
B
We
currently
do
not
have
a
dedicated
funding,
source
or
fund
for
general
capital
improvement
projects
similar
to
the
archway.
Earlier
we
have
any
types
of
improvements
to
city
facilities,
whether
they
be
maintenance,
painting
projects
so
on
also
any
type
of
capital.
Improvements
to
city
parks
currently
have
no
dedicated
funding
source,
and
so,
as
a
first
step
towards
addressing
those
needs.
The
policy
recommends
establishing
a
capital
improvement,
one-time
initiatives
fund
with
a
target
balance
of
five
million
dollars
beyond
those
two
funds.
B
It
also
addresses
of
the
policy
to
have
a
25-percent
reserve
in
our
internal
service
operating
funds,
and
that
includes
the
central
garage
building,
a
facilities
fund
and
Technology,
and
why
these
funds
are
included
this
evening
is
really
because
these
are
also
critical
departments
that
need
to
be
able
to
continue
operating
in
an
emergency
situation.
So
therefore,
it
would
be
appropriate
to
have
twenty-five
percent
minimum
twenty
five
percent
Reserve
balance
and
those
funds.
B
B
The
receipt
of
one
time
and
unbudgeted
revenues
during
the
course
of
the
year,
along
with
any
surplus
that
might
remain
in
the
general
fund
at
year,
n
would
be
added
to
the
reserve
funds
in
a
certain
order,
so
it
would
start
with
the
general
fund
reserve
and
if
that
is
fully
funded,
move
on
to
the
general
fund
contingency
fund,
once
that
is
fully
funded,
move
on
to
the
emergency
disaster
fund
and
so
on.
Until
we've
met
those
obligations
as
target
gold
balances
in
those
funds,
but
the
language
is
flexible
in
that
it's
unbudgeted
fun.
B
So
this
isn't
to
say
that
the
establishment
of
a
reserve
policy
would
limit
the
City
Council's
ability
to
utilize
certain
one-time
revenues
to
balance
the
budget
if
appropriate.
It
is
simply
going
beyond
that.
If
it's
not
included
in
the
budget,
the
thought
would
be
to
put
it
in
one
of
the
reserve
funds.
B
So
that
all
said,
I
wanted
to
summarize
what
it
would
look
like
if
the
proposed
policy
that
is
before
you
this
evening
were
to
be
implemented.
So
where
we
would
end
up,
is
with
a
general
fund
reserve
at
twenty
percent
of
general
fund
expenditures
or
6.5
million
dollars,
we
would
have
a
general
fund
contingency
fund
of
1.5
million
dollars.
We
would
have
an
emergency
disaster
reserve
fund
of
3
million
dollars.
B
Although
I
would
just
bring
to
your
attention
of
that
6.3
million
dollars,
2.9
million
of
that
is
in
the
form
of
a
receivable
from
the
former
redevelopment
agency.
You
might
recall
that
the
loan
that
was
made
from
the
city
to
the
redevelopment
agency
to
fund
the
initial
startup
coughs
many
years
ago
was
from
the
equipment
reserve
fund,
and
so
the
outstanding
amount
of
2.9
million
is
from
the
equipment
reserve
fund.
We
do
believe
that
money
will
be
repaid
over
time.
B
However,
one
caveat
to
that
is:
twenty
percent
of
it
will
have
to
go
towards
low
and
moderate
income
housing
initiatives
per
the
legislation,
so
we
will
not
see
the
entire
2.9
back
in
there,
but
that's
for
another
discussion,
so
that
just
summarizes
where
we
would
be
at
the
end
of
the
day
with
this
policy.
So
with
that
I'd
like
to
hand
it
over
for
discussion
and
be
happy
to
answer
any
questions,
any.
C
B
I
I
mean
I
I
would
say
that
the
fund
at
this
point
in
time,
I,
was
uncomfortable
and
I
think
it's
sufficient
for
now
to
at
the
balance,
because
it
is
sufficient
to
cover
what
is
our
calculated
liability.
However,
it
would
make
sense
in
wood
for
us
to
look
at
that
further
and
see
if
that
reserve
is
sufficient,
if
we
need
to
consider
reserving
for
any
additional
potential
losses,
and
that
would
be
the
plan
would
be
to
come
back
and
discuss
that
further
in
addition
to
the
equipment
replacement
fund
at
some
point
in
time,.
D
E
Now
I've
seen
this
a
few
times,
but
yeah
I
did
have
one
question
about
the
building
and
facility
reserve
fund.
The
buildings
and
facilities
that
are
addressed
in
that
fund
are
what
we
would
consider.
General
fund
facilities,
not
Enterprise
facilities
and
the
enterprise
facilities
would
be
funded
by
an
Enterprise
Fund.
Is
that
correct?
Well,.
B
The
building
and
facilities
fund,
it
does
include
an
allocation
from
some
of
the
in
the
enterprise
funds
and
what
this
building
and
facilities
reserve
fund
I
want
to
be
clear
that
this.
This
is
really
the
operating
fund
for
the
ongoing
maintenance
of
city
facilities.
It
is
not
a
replacement.
It
isn't
currently
set
up
to
be
a
serve
as
a
replacement
fun
for
the
facilities,
but
rather
to
ensure
that
they
can
be
maintained
on
an
ongoing
basis,
and
so
because
it's
an
operating
department
and
it
does
serve
all
the
enterprise
funds
as
well.
C
So,
for
example-
and
this
is
I
mean
I-
think
it's
a
lot
clearer
if
you
give
an
example
of
what
we
would
use
it
for,
if
we
didn't
have
funding
to
paint
City
Hall,
would
that
would
would
that
be
the
first
reserve
fund?
And
if
we
had
that
building
of
facilities
reserve
fund
would
that
be
the
first
one
we
may
consider
so.
B
The
building
and
facilities
fun
does
not
have
any
restrictions
on
it
at
this
time,
it's
funded
through
an
internal
allocation
from
all
the
user
departments,
and
so
that
includes
not
only
general
fund
departments,
but
it
includes
the
enterprise
fund
departments,
but
the
money
that
is
sitting
in
the
building
facilities
fund
it
can
be
utilized
for
projects
such
as
the
painting
projects.
There's
no
restrictions
on
those
funds.
F
Let
me
see
if
I
could
address
what
it
might
be
a
little
bit
of
confusion
here.
The
building
of
facilities
fund
is
an
operating
fund
and
it
is
the
allocations
from
the
various
departments,
including
the
enterprise
funds,
are
made
in
an
amount
which
is
intended
to
cover
basic
operating
costs,
and
that
would
include
pretty
minor
types
of
normal
repair
and
maintenance
of
those
buildings.
F
F
You
know
some
of
the
more
significant
dollar
value,
a
capital,
repair
maintenance
or
replacement
cost
for
a
general
fund
non
Enterprise
facility,
City
Hall,
the
rec
center
parcs.
Those
types
of
things
would
not
be,
has
no
dedicated
funding
source,
and
would
it
would
be
the
general
intent
of
this
policy
to
fund
or
to
have
funds
a
limited
amount
of
funds
available
through
the
capital
reserve
in
order
to
be
able
to
at
least
have
some
money
available
to
go
to
for
those
types
of
issues.
I
hope
that
helps.
E
Yeah,
it
definitely
helps
in
the
amount
justing.
It
seemed
that
it
seemed
low
to
me
and
even
if
it
only
covers
minor
things,
I
think
as
the
plant
ages
I'm
sure
that
the
yearly
expenses
of
keeping
things
running
it's
actually
going
to
increase
I,
would
imagine
just
because
you
have
to
fix
more
things.
Things
start
falling
apart,
you're.
F
Talking
about
the
building
of
facilities
fender
so,
for
example,
if
there's
a
repair
needed
to
a
sink
or
a
you
know,
a
tile
comes
off
of
the
wall
in
the
restroom
it.
Those
types
of
really
pretty
simple
and
inexpensive
repairs
are
generally
captured
in
day-to-day
activities
funded
by
the
building
in
facilities
reserve.
D
F
Building
facilities,
fun,
where
the
city's
main,
I
would
say,
exposure
to
cost.
It
really
comes
at
those
bigger
ticket
items
for
our
major
facility.
This
building,
for
example,
that
many
city
facilities
that
we
rely
on
on
an
everyday
basis
for
normal
activities
should
they
need,
and
they
will
need
a
10-point
all
of
them
major
repairs
and
replacement.
E
G
Chair
this
is
one
thing
that
is
some
good
news
and
I
think
it's
a
policy
we
need
to
establish.
I
also
know
that
this
is
something
that
we
can
modify
and
change
over
time.
This
is
just
embarking
upon
some
foundations
of
groundwork.
I
would
you
know
I
know
when
I
came
in
it's
not
just
yesterday,
any
more
of
an
oh-6.
You
know
we
had
maybe
about
five
little
under
five
point:
nine
million
in
reserves.
G
With
this,
it's
always
better
to
have
and
worried
about
having
too
much
they're,
not
having
enough
I
believe
that
we
should
bring
this
back
up
at
the
budget
study
session
to
review
this
documents.
We
see
where
we're
at
today
where
we're
at
then
where
we
should
be
going
forward,
so
we
can
review
it
and
I
know
you're
looking
at
it
forward
to
budget
it's
just
around
the
corner.
So
anyway,
those
are
my
thoughts,
good.
C
Okay,
yeah,
with
all
that
said,
I
I
think
it
I
agree.
It's
it's
it's
great
to
have
the
nest.
Egg
say
is
that
we
we
really
don't
know
you
know
the
status
of
a
lot
of
our
facilities.
We
don't
know
what
things
we
may
have
to
anticipate
I.
Think
that's
something
that
we
not
necessarily
nuts
and
bolts,
but
I.
Think
we
need
to
hear
from
you
know,
have
some
sort
of
updated
report
as
to
where
we
are
in
certain
things
and
I
was
speaking
to
the
manager
earlier
and
I
know.
C
D
C
Roofs
and
the
roofs
are
always
deteriorating
and
and
it's
not
cheap,
because
we
have
some
large
facilities
and
it's
just
the
sheer
volume
so
I
think.
If,
if
we
have
an
idea
of
where,
where
we
are
in
the
life
of
some
of
our
facilities,
then
we
can
sort
of
gauge
or
establish
our
priorities
on
something
like
a
capital
improvement.
You
know
one
time
fun
so
I
think
that's
all
success
to
be
part
of
the
dialogue
and
in
establishing
these
funds.
H
Gary,
thank
you.
I
agree,
I,
think
it's
very
prudent
of
what
we're
doing
I'm
encouraged
that
you've
put
so
much
thought
the
staff
has
put
so
much
thought
into
what
you've
done
here.
I
would
like
us
to
also
hold
off
and
re-examine
this
during
the
budget.
Time
I
think
one
of
the
things
I'd
like
to
see
is
some
mechanism
or
some
thought
given
to
how
to
allocate
for
just
the
things
that
the
rest
of
the
council
has
been.
Speaking
of
so
this
building
hat
is
going
to
need
a
new
roof.
It's
probably
going
to
cost.
H
H
I
know
way
back
when
we
used
to
just
have
a
general
fund
reserve
and
that
took
care
of
everything
in
it
got
kind
of
dicey
about
who
got
what
and
how
much
went
where
and
then
we
started
allocating
costs
from
each
department
to
replenish
different.
Well,
we
polish
the
equipment
reserve
fund
was
one
and
two
just
allocate
like
to
the
City
Attorney's
time
to
reallocate
back
the
cost
of
his
time
for
each
different
Department.
H
D
A
H
Just
just
on
that
comment,
that's
a
we
had
no
culture
and
arts
commission
and
we
had
no
culture,
not
just
commissioned
money
until
we
established
that
and
establish
how
to
fund
it,
which
was
totally
separate
from
the
general
funds.
So
that
was
I.
Think
some
good
thought
went
into
doing
that
and
I
think
it
was
a
very
positive
thing
and
I
think
and
pretty
painless
to
the
residents
of
San
Bruno.
So
I
think
we
can
keep
on
doing
that.
A
Was
the
second
member
of
that
committee
with
councilmember
Salazar,
and
this
is
definitely
some
some
good
stuff
going
forward?
It's
always
good
to
know
what
you
have,
especially
if
you
don't
know
what's
coming
after
so
this
is
good.
It's
great
and
a
lot
of
work
went
into
this
with
the
Kim
and
her
staff
too.
So
I
appreciate
that
once
again,
so
we
have
received
a
report
and
they're
asking
for
a
resolution
to
be
adopted
this
evening,
with
the
understanding,
of
course,
that
we're
gonna
fine-tune
and
as
we
go
forward.