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6.C. - Page 25 of 196 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 above the 15 percent reserve threshold 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. It is anticipated that a portion of the available excess fund balance as of June 30, 2020 will be redirected to support recovery activities in response to the crises of 2020 and in alignment with the strategies to respond, restore and reimagine services; as well as retained to cover future anticipated revenue shortfalls. 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. The City is currently in the process of implementing a new Enterprise Resource Planning system (ERP), which is expected to begin operation in July 2021. In preparation for the new ERP, City staff, in conjunction with consultants from the Government Finance Officers Association, are reviewing financial policies and procedures and recommending updates as needed. 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 growth in inflation and population during each fiscal year. Inflation is measured as the year -over -year growth in per capita personal income, while population growth is based on a weighted growth measure that blends growth in the civilian population with growth in K-12 and community college average daily attendance. 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 2019-20 was $741,875,879, while the actual appropriations subject to the limit amounted to $110,923,088. The FY 2019-20 appropriation limit increased from FY 2018-19 due primarily to the increase of 3.85 percent in 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 Maze and Associates, certified public accountants appointed by the City Council. The independent auditor's report is part of this report, starting on page 1. Awards The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Redwood City for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2019. This is the 33rd consecutive year that Redwood City has received this prestigious award. In order to be awarded a certificate of achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both accounting principles generally accepted in the United States of America and applicable legal requirements. A certificate of achievement is valid for a period of one year only. We believe our current CAFR continues to meet the certificate xi 112