REPORT TO THE CITY COUNCIL
DATE: August 3, 2017
FROM: MICHAEL LIMA, Finance Director/Controller
Finance Department
BY: MAVET MORA, Assistant Finance Director/Controller
Finance Department
SUBJECT
Title
Authorize the Controller to use cash in the General Fund Emergency Reserve to cover short-term deficit cash balances at year-end resulting from timing differences in the receipt of grant revenues/reimbursements and the incurrence of grant-funded expenditures.
Body
RECOMMENDATION
Staff recommends that the Controller be authorized to use monies in the General Fund Emergency Reserve to cover short-term year-end deficit cash balances in grant funds.
EXECUTIVE SUMMARY
Temporary negative cash balances in certain funds may result from timing differences in the receipt of revenue compared to when expenditures must be incurred. This is particularly true at fiscal year-end, and especially when funds are heavily supported by grant funding. The Reserve Management Act (RMA) allows for monies held in the General Fund Emergency Reserve to be made available for temporary loans at fiscal year-end with Council approval. Staff is recommending that the Controller be authorized to draw from the General Fund Emergency Reserve amount equal to that which is necessary to ensure the proper close out of the 2017 Fiscal Year. As required under the RMA, the loans will be repaid within 90 days after the end of the fiscal year.
BACKGROUND
It is not unusual for local governments to loan resources from one fund to another fund experiencing a temporary cash shortage. These temporary shortages may result from timing differences in the receipt of revenue as compared to when expenditures must be incurred. This condition is particularly true at fiscal year-end, and especially when funds are heavily supported by grant funding. The City maintains the Treasury Cash Pool (Pool) in which all City monies are invested. While cash for all City monies are pooled together for ...
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