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<br />Mayor and City Council <br />Page 3 <br />November 14, 1996 <br /> <br />CONTINGENCY REQUEST TOTAL <br /> <br />$377 870 <br /> <br />With respect to Measure 20-75, the funds and FTEs requested are based on the fiscal impact <br />analysis prepared in September and are based on assumptions that will only be validated or <br />invalidated once the program is designed and operational. In other words, the startup and <br />operating costs could be higher or lower. Funds requested are for startup and FY98 operations <br />because there is one-time monies currently available to fund this effort; funds for FY98 will be <br />incorporated into the FY98 Budget Recommendation. I should also note that legal fees to defend <br />against any challenges are not included in the request, and further, given the passage of Measure <br />47, it is unclear as to the legality of imposing any fees to support the program without another <br />vote. <br /> <br />The current balance in General Fund Contingency is $600,000. Staff is recommending that <br />$303,024 from Marginal Beginning Working Capital be added to this amount (see below), <br />bringing the total to $903,024. If the above requests are approved, the balance would be <br />$525,154 after Supplemental Budget #1. <br /> <br />General Fund Mar~inal Beginning Working Capital <br /> <br />The Marginal Beginning Working Capital for FY97, net of the amount to be reappropriated for <br />projects authorized in FY96 but not complete, is $1,182,183. In addition, the Council passed a <br />resolution in September moving funds from the Reserve for Prior Year Encumbrances into <br />department operating budgets. At that time, staff noted that $453,491 in excess Reserves <br />remained and would be allocated at Supplemental Budget # 1. So the total to allocate is <br />$1,635,674. <br /> <br />In developing a recommendation, the Financial Management Goals and Policies offer the <br />following direction: <br /> <br />"The highest priorities for use of Marginal Beginning Working Capital (difference between <br />Actual Ending Working Capital in the prior year and Budgeted Beginning Working <br />Capital in the current year) are: General Capital Projects Fund; Unappropriated Ending <br />Fund Balance; General Fund Contingency (not in priority order)." <br /> <br />Based on that direction, Executive Managers recommend the following allocation: <br /> <br />General Capital Projects <br /> <br />Increase reserve for FY98 Capital Projects <br /> <br />$600,000 <br />