AgdaPkt 2018-12-17 Joint Special

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6.G. - Page 19 of 187 remitted to the County Controller. Although the State prevailed in the Superior Court trial, the City has filed an appeal. The appeal is fully briefed and the City has been awaiting a court date since 2015. In the meantime, new State legislation (SB107) was passed in September 2015 requiring that all obligations determined by the DOF be paid in order for successor agencies to receive the benefits of a finding of completion. The City remitted the funds prior to the end of calendar year 2015 for distribution to the taxing entities while it continues to pursue its appeal. The City advised the taxing entities to hold the funds in case the City prevails in this appeal. The City also continues to work with the State of California regarding the disposition of several former Redevelopment Agency land parcels. Relevant Financial Policies In FY 2016-17, the City Council adopted a General Fund reserve policy, where the unreserved portion of the general fund's fund balance shall be 15 percent of anticipated General Fund revenues. Any excess balance above a 15 percent reserve threshold was approved to be utilized to fund future pension obligations or other one-time City Council priorities that do not require an ongoing commitment. As a result of implementing GASB 54, these excess balances, if any, are reported under the category "Unassigned Fund Balances." In recent fiscal years, the City has used balances in excess of the reserve policy to pay down unfunded liabilities and contribute to a Section 115 Pension Trust Account for pension liabilities. In addition, the City Council adopted a Debt Disclosure Policy and updated the Investment Policy. The City reviews these policies regularly and uses them to maintain sound fiscal practices. The City has also established cash management, accounting, budgetary and risk management policies and practices that are essential to the City's long-term fiscal health. These financial policies and practices also promote public confidence and increase the City's credibility in the eyes of bond rating agencies and potential investors. Such policies also provide the resources to react to financial needs in a prudent manner. Appropriation Limit Article XIIIB of the California State Constitution, which became effective in FY 1979-80, and which was modified (by Proposition 111) in November 1989, establishes, by formula, an appropriation limit for governmental agencies. Using the appropriations of FY 1978-79 as the base year, the limit is modified by the change in the composite consumer price index, population, and the value of commercial property development within the City limits during each fiscal year. Article XIIIB also sets the guidelines as to what is to be included in the appropriation limits. The appropriation limit for Redwood City for FY 2017-18 was $676,181,900, while the actual appropriations subject to the limit amounted to $101,361,951. The FY 2017-18 appropriation limit increased from FY 2016-17 due primarily to the increase (3.69 percent) in Statewide per capita personal income, one of the factors used in calculating the change in the appropriation limit. OTHER INFORMATION Annual Independent Audit The annual audit of the books and financial records of the City was completed by Badawi and Associates, certified public accountants appointed by the City Council. The independent auditor's report is part of this report, starting on page 1. vi 198