Res. No. 145-01-11293A RESOLUTION • THE MAYOR AND CITY COMMISSION • THE CITY
OF SOUTH MIAMI, FLORIDA; ADOPTING A CASH MANAGEMENT
POLICY THAT REQUIRES • LESS THAN 10% OF THE BUDGET TO BE
MAINTAINED AT ALL TIMES BY THE CITY AS CONTINGENCY
RESERVES FUND TO BE USED SOLELY FOR CATASTROPHES OR
OTHER UNSCHEDULED EMERGENCIES; PROVIDING AN EFFECTIVE
DATE.
WHEREAS, when the City's Comprehensive Financial Report was issued for FY
1994/95, the Auditors, Sharpton, Brunson & Company recommended the creation of a
Contingency Reserves Fund to be funded from the cash carryover balance in the General Fund;
and
WHEREAS, at that time City Administration reviewed the Auditor's recommendation
and considered it to be feasible and beneficial to the City's financial stability; and
WHEREAS, the Contingency Reserves Fund was created with a balance of
$1,000,000.00 to be maintained at all times and adopted a policy that would restrict the use of
this fund to catastrophes and other unscheduled emergencies.
WHEREAS, the Mayor and City Commission desire to change the policy to provide for a
Contingency Reserves Fund of no less than 10% of the Budget.
NOW THEREFORE BE IT RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF SOUTH MIAMI, FLORIDA;
Section 1. A Cash Management Policy is hereby adopted to provide for a
Contingency Reserves Fund balance of no less than 10% of the Budget.
Section 2. This resolution shall take effect with the FY 2002/2003 Budget.
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PASSED AND ADOPTED this —2 day of September, 2001.
ATTEST:
CITY CLERK
READ AND APPROVED AS TO FORM
CITY ATTORNEY
I a Is
MAYOR
Commission Vote:
4-0
Mayor Robaina:
Yea
Vice Mayor Feliu:
Yea
Commissioner Wiscombe: Not
present
Commissioner Bethel: Yea
Commissioner Russell:
Yea
Additions shown by underlining and deletions shown by evefstriking.
Excellence, Integrity, Inclusion
To: Honorable Mayor, Vice Mayor Date: October 2, 2001
and City Commission
�'-)
From: Charles Scurr Re: Agenda Item
City Manager Adopting a Cash Management of 10% of
FY 200212003 Budget
The attached resolution sponsored by Mayor Robaina adopts a Cash Management Policy that
requires 10% of the budget to be maintained at all times by the City as Contingency Reserve
Fund, starting with FY 200212003 Budget.
In 1996, the City Commission by Resolution No. 77 -96 -9531, adopted a Cash Management
Policy requiring $1,000,000.00 be maintained at all times. The fund served to
1. Contingency to be used only in the event of a catastrophe, such as a hurricane; and
2. Reserves for settlement of lawsuits in the event the claim is above the City's excess
insurance coverage limit; and
3. Supplement to the budget for operations during the first three months of the fiscal year
when tax payments are received slowly.
RECOMMENDATION
Approval is recommended
RESOLUTION NO 77-96-9831
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF SOUTH MIAMI,FLORIDA, ADOPTING A CASH
MANAGEMENT POLICY THAT REQUIRES $1,000,000.00 BE
MAINTAINED AT ALL TIMES BY THE CITY AS
CONTINGENCY RESERVES FUND TO BE USED SOLELY FOR
CATASTROPHES OR OTHER UNSCHEDULED EMERGENCIES.
WHEREAS, the City Auditors, Sharpto'n, Brunson & Co.,
has completed the audit of the City financial transactions
for 1994/95 fiscal year, and issued the Comprehensive Annual
Financial Report for the same year; and
WHEREAS, as part of their responsibilities for
recommending improvements to our accounting control and
evaluating the financial soundness of the City, the Auditors
have recommended the creation of Contingency Reserves Fund
to be fui-ided from the cash carryover balance in the
WHEREAS, the City Administration has reviewed the
Auditors' recommendations, and considers it to be feasible
and beneficial to the City financial stability; and
WHEREAS, the City Manager is recommending the creation
of Contingency Reserves Fund with a balance of $1,000,000.00
to be maintained at all times and adoption Of Policy that
will restrict the use of this fund to catastrophes and other
unscheduled emergencies.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF SOUTH MIAMI:
Section 1. That the City Commission concurs with the
recommendation of the City Manager to create a Contingency
Reserves Fund, and adopts a policy that will restrict its
use to catastrophes and unscheduled emergencies.
Section 2. That the funding for creation of the
reserve fund be taken from the General Fund cash carryover
balance.
Section 3. That this resolution shall take effect
immediately upon approval.
PASSED AND ADOPTED this 16th
ATTEST
CITY CLERK
CITY ATTORNEY
day of April 1996.
MAYOR
COMMISSION VOTE: 5-0
Mayor Cunningham:
Vice Mayor Robaina:
Commissioner Price:
Commissioner Bethel:
Commissioner Price:
Yea
Yea
Yea
Yea
Yea
CITY OF sou'rH MIAMI
S1 30 Sunset Drive, South Miami, FL 33143
TO: Mayor and Commission DATE
FROM: Eddie Cox, e--it yM*'anager RE:
April 11, 1996
a A
Agenda Item #L4
C�
Commission Meeting
April 16, 1996
Contingency Reserves Fund
The attached resolution authorizes the creation of $1,000,000 Contingency Reserve Fund, and
adopts a policy of maintaining the same amount at all times by the City, as recommended by the
City Auditors, Sharpton, Brunson and Company in the 1994195 fiscal year Comprehensive Annual
Financial Report.
This fund will serve as:
1. Contingency to be used only in the event of a catastrophe, such as a hurricane, when
emergencies develop and unexpected expenses are incurred by the City. For example,
during the immediate two month-period after Hurricane Andrew, the City hurricane
related expenses totaled almost $600,000. Fortunately, this two month-period was in
August and September, long after the ad-valorem taxes havc��,c collected and we
were able to re-arrange our expenses to accommodate the unexpected situation.
Although, the Federal Government eventually reimbursed part of these expenses, the
City had to pay almost $1,000,000 by itself before the first check was received from
FEMA. This was a situation that could have been worst for us had the hurricane hit
our City as hard as it did the City of Homestead.
2. Reserves for settlement of lawsuits in the event the claim is above our excess
insurance coverage limit, which is currently $1,000,000 a year. The City may be
involved in one or two EEOC or Automobile Accident claims which might exceed this
limit and require use of city funds to settle. If this happens, as things stand right now,
it will definitely cause financial strain on the City and result in borrowing fiends from
the bank at higher interest rate in order to meet our day-to-day operations or impose
higher property taxes on our taxpayers to alleviate the problem.
3. Supplement to the budget for operations during the first three months of the fiscal year
when tax payments are received slowly, and in most cases expenses are higher than
revenue collections.
From the audit report, we have determined our cash carryover at the beginning of the 1995196
fiscal year to be $1,491,399. Of this amount, $566,887 was approved by the City Commission to
be used in the current fiscal year. This leaves a balance of $924,512. At the current rate of
spending, it is tentatively projected that we will under-expend the budget by enough to reach the
$1,000,000 goal and transfer the remainder to supplement next year's budget.
I
to my opinion, approval of this Fesolution, will bring financial stability to the City and allow us the
opportunity to firmly determine the amount of cash reserve that should be used to balance each
year's budget because any unused appropriation, or surplus generated from sound fiscal
management in any given year will not be transferred to the Contingency Reserves Fund, but the
budget.
I strongly recommend approval.
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