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6.A. - Page 42 of 114 "Financial Overview — Half Moon Bay," this projected draw down of the general fund balance would be due, in part, to the City's decision to make approximately $12 million of investments into capital improvement projects from FY 2017-18 through FY 2023-24 (spending an average of $1.73 million per year on improvements during that period).312 Notwithstanding the draw -down of the general fund balance, Half Moon Bay expects to continue to maintain an operating contingency reserve of at least 30 percent of operating general fund expenses each year 313 and the City has also established an economic uncertainty reserve with the goal of holding an amount in that reserve equal to at least 20 percent of general fund operating expenses. The City projects that at the end of FY 2019- 20, the contingency reserve will equal $5.04 million (30 percent of general fund operating expenses of $16.79 million) and the new economic uncertainty reserve will equal $2.61 million (15.6 percent of general fund operating expenses).314 The City also notes that in FY 2019-20, it plans to make a one-time payment of $11 million to pay off (ahead of schedule) its outstanding judgement obligation bonds, which will leave the City largely debt free, except for repayment over the next ten years, on an interest-free basis, of $6 million that San Mateo County advanced to the City to help build the City's new library. 315 Long -Term Financial Forecast — Half Moon Bay Half Moon Bay included a five-year general fund financial forecast in its readily -accessible FY 2018-19 budget316 and in its FY 2019-20 recommended budget .317 Hillsborough Pension Contribution Costs - Hillsborough Hillsborough's pension contribution costs in FY 2017-18 were $2.41 million, up $0.254 million (11.8 percent) from $2.16 million in FY 2016-17.318 The Town's FY 2017-18 pension contribution costs represented 23.6 percent of that year's covered payroll (down from 24.9 percent the preceding year) and 10.8 percent of its total general fund spending (up from 10.2 percent the preceding year).319 312 lbid., p. 82. 313 Staff note that this 30 percent compares favorably with the recommendation of the Government Finance Officers Association (GFAO) that municipalities maintain unrestricted reserves (which would include contingency reserves) equal to at least two months (17 percent) of general fund revenues or expenses. GFAO website (https://www.gfoa.org/fund-balance-guidelines-general-fund ). Grand Jury interview. 31a Half Moon Bay, Fiscal Year 2019-20 Recommended Operating Budget, p. 73. Grand Jury interview. 31s Grand Jury interview. 316 Half Moon Bay Adopted Operating Budget FY 2018-19, p. 94. 317 Half Moon Bay, Fiscal Year 2019-20 Recommended Operating Budget, p. 82. "' Appendix A. 319 lbld. 2018-2019 San Mateo County Civil Grand Jury 35 46