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6.A. - Page 20 of 191 In FY 2017-18 and FY 2018-19, the City received $5.6 million and $11.0 million, respectively. FY 2018-19 revenue was much higher than estimated due to a one-time acceleration in the timing of payments. This level of funding is higher than can be expected in the future due to the accelerated timing of payments, and recent and potential changes in school financing, which the County Controller has indicated could significantly reduce this revenue source in future fiscal years. The City's policy is to budget what can reasonably be estimated, which was $4.0 million, or about 36 percent of the FY 2018-19 actual amount received. The City has budgeted to receive $4.2 million in FY 2019-20. Successor Agency to the Redevelopment Agency As of July 1, 2018, the Oversight Board of the Successor Agency to the Redevelopment Agency of Redwood City was reorganized and combined with other oversight boards in San Mateo County, thus creating one Countywide Oversight Board. Going forward, action on behalf of the Successor Agency to the Redevelopment Agency of Redwood City will be taken by the San Mateo County Countywide Oversight Board. The City continues to focus on the disposition of the $10.3 million in funds that had been in the former Redevelopment Agency's possession, which were encumbered for below-market rate housing through an agreement with the Legal Aid Society. The control of these funds has been in dispute with the State of California Department of Finance (DOF) since the Redevelopment Agency was dissolved in FY 2011-12. The City filed suit against the State of California challenging the DOF's position that these funds are unencumbered and must be 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 updated the General Fund reserve policy, where the unreserved portion of the General Fund's fund balance shall be 15 percent of anticipated General Fund revenues. With the FY 2019-20 Adopted Budget, the City Council approved a strategy to utilize 80 percent of the excess balance, above the 15 percent reserve threshold, to pay down the City's unfunded liabilities, including pension and retiree health liabilities, and 20 percent as one-time funding towards the City Council's priorities in the areas of housing, transportation, and children and youth. The excess balance is 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, contribute to a Section 115 Pension Trust Account for pension liabilities, and for one-time funding towards City Council priorities. The City Council has adopted a Debt Disclosure Policy and 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 for bond rating agencies and potential investors. Such policies also provide the resources to react to financial needs in a prudent manner. vi 27