Agenda Item Wording:
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Surplus Policy - Review current General Fund surplus policy and consider making revisions to the policy.
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Prepared by: Renee Nagel, Finance & Technology Director 713-4475, renee.nagel@visalia.city Amee Swearingen, Budget Analyst 713-4170, amee.swearingen@visalia.city
Department Recommendation: Review current General Fund surplus policy and provide direction for revisions to the policy to be effective for FY 24/25, for future fiscal years, or to leave as is Council's current policy.
Summary:
On June 16, 2025, staff presented to Council the Mid Cycle Budget report which included updated projections for FY 2024/25 and 2025/26 for the General Fund. During the presentation, staff reviewed the current surplus policy and was directed to come back to Council for further discussion on possible revisions to the surplus policy.
Background Discussion:
The current General Fund emergency reserve and surplus policy was amended in March 2024. The policy states that any revenues in excess of actual expenditures would first be deposited in the emergency reserve to maintain the reserve at a maximum of 30% of operating expenditures and then all remaining surplus is to be deposited into the Civic Center Reserve Fund. The surplus policy also states that all one-time monies and land sales not otherwise required to be allotted to specific funds, will be deposited in the Civic Center Fund.
On June 16th, the projected surplus for FY 2024/25 was $5.4 million. Council appropriated $2.6 million in capital projects that night, leaving the surplus to be $2.8 million. Based on the Mid-Year Budget projections, $2.1 million of the surplus will need to be transferred at year end keeping the reserves at 30% of operating expenditures. The $2.1 million transfer will bring the reserve balance to $25.8 million.
Surplus Policy:
Once the emergency reserve has been funded, any remaining surplus at year-end is to be deposited to the Civic Center/Public Safety ...
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