CC 10-15-2024 Item No. 8 Unassign funds from the Committed Sales Tax Repayment Reserve_Written CommunicationsCC 10-15-2024
Item No. 8
Unassign funds from the
Committed Sales Tax
Repayment Reserve
Written Communications
From:Peggy Griffin
To:City Council
Cc:City Clerk
Subject:2024-10-15 City Council Meeting-AGENDA ITEM 8-Sales Tax Repayment Committed Reserve
Date:Friday, October 11, 2024 1:05:45 PM
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MEETING AGENDA ITEM.
Dear City Council,
I appreciate Finance Manager Jonathan Orozco’s Staff Report. It’s clear and with specific
data. Thank you!
In my previous email, I said that moving these funds to the General Fund means “they can be
spent with less oversight”. What I meant was that once the money is in the General Fund,
budget “adjustments” come before Council all the time. Director Alfaro said this is the norm
but this is where a pile of money can be depleted gradually with incremental changes to the
budget over time.
Many contract increases appear under Consent. I’m not sure if any budget adjustments
appear under Consent. Consent is where a lot of money just gradually is spent over time.
Contracts get increased then budgets need to be bumped up.
When the pile of money is sitting in a restricted committed fund, a specific action by Council
to move the money must appear before Council, as do budget adjustments. The results are
the same in each case, that money is moved to be spent. The BIG difference is it is very clear
that THIS money is being spent! That you are dipping into a safety net.
REQUEST
Please DO NOT transfer these funds to the General Fund. Instead,
RENAME this restricted fund (leave it as restricted)
FROM: “Sales Tax Repayment Committed Reserve”
TO: something like “Economic Uncertainty Committed Reserve”
Sincerely,
Peggy Griffin
FOR REFERENCE FROM THE STAFF REPORT
From:Peggy Griffin
To:City Council
Cc:City Clerk
Subject:2024-10-15 City Council Meeting-AGENDA ITEM 8-Sales Tax Repayment Committed Reserve
Date:Friday, October 11, 2024 12:38:11 PM
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MEETING AGENDA ITEM.
Dear City Council,
We are facing 10 years of a structural budget deficient. From what I understand, it means that
the city’s income will be less than the city’s expenses leading to a negative balance that will
grow over time. This is a scary thought and one that should not be taken lightly.
From the Staff Report, it sounds like the city has earned $3.1M in interest by moving the
$74.5M restricted funds into an interest bearing account! That was about how much our
deficient was before this year’s budget was adjusted to balance it! The $74.5M sitting in this
restricted fund provides safety AND the interest it earns goes into the General Fund to help
balance the budget! This is a win-win situation-having these funds available but requiring
stricter oversight yet allowing the interest it earns to supplement the General Fund.
SUGGESTION
Rather than transfer these restricted funds into the general fund where they can be spent with
less oversight, I suggest that you
RENAME this restricted fund (leave it as restricted)
FROM: “Sales Tax Repayment Committed Reserve”
TO: something like “Economic Uncertainty Committed Reserve”
Please do not move these funds into the General Fund where it can be spent with less
oversight.
Sincerely,
Peggy Griffin