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<br />78 <br />Page 1 <br /> <br />REPORT <br /> <br />To the Honorable Mayor and CUy Council <br />From the Finance Committee <br /> <br />January 8, 2007 <br /> <br />Subject <br />General Fund Transfer to Self Insurance Fund <br /> <br />Recommendation <br />The City Council Finance Committee recommends that the City Council adopt a resolution <br />appropriating and transferring $1 ,100,000 from the General Fund unreserved fund balance <br />to the Self Insurance Fund. <br /> <br />Background <br />During fiscal year 2004-05, the-City's Self Insurance Fund experienced a net loss of $1.7 <br />million due to the rising costs of the workers compensation claims. This net loss caused <br />the Self Insurance Fund to have a deficit balance of $1.5 million at June 30, 2005. During <br />fiscal year 2005-06, the Self Insurance Fund experienced net income of $437,000, leaving <br />a deffcit balance of $1.1 million at June 30, 2006. <br /> <br />At the City Council meeting of May 22, 2006, the Finance Director presented a financial <br />update which included a summary of items that may have adverse effects on the general <br />fund. The deficit balance of the Self Insurance Fund was included in this summary. <br /> <br />For the fiscal year ended June 30, '2006, resources available for subsequent years' <br />expenditures in the General Fund increased from $17.9 million to $2t.9 million. On <br />December 11, 2006 the City Council appropriated $2.5 million of this amount to <br />supplement the budget for the Redwood Shores Library construction project. <br /> <br />Alternative <br />The City Council may reject the recommendation and allow the Self Insurance Fund to <br />maintain a deficit balance. <br /> <br />Fiscal Impact <br />Approval of the transfer from the General Fund to the Self Insurance Fund will reduce the <br />General Fund available balance by $1.1 million. <br /> <br />tl>. U <br /> <br /> <br />~._._- <br />" <br /> <br />"_. <br />;' <br />. ."..r' <br /> <br />Councilmember <br />Jeff Ira <br /> <br />~-- <br /> <br />Vice Mayor <br />Rosanne Foust <br /> <br />subsequent years' expenditures in the General Fund increased from $17.9 million to <br /> <br />$21.9 million; and <br /> <br />WHEREAS, On December 11 r 2006 the City Council appropriated $2.5 million of <br /> <br />this amount to supplement the budget for the Redwood Shores Library construction <br /> <br />project; and <br /> <br />WHEREAS, additionally on December 11, 2006 the City Council Finance <br /> <br />Committee held a meeting to discuss the possible uses of the General Fund Reserves. <br /> <br />It was decided that the best use at this time would be to cover the deficit balance in the <br /> <br />City's Self Insurance Fund; and <br />