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12/28/92
RESOLUTION NO. 7041
A RESOLUTION ESTABLISHING RESERVE INCREASES
WITH RESPECT TO FISCAL YEAR SPENDING
WHEREAS, Article X, Section 20(2)(e) of the Colorado Consti-
tution defines "fiscal year spending" to include "reserve
increases," and
WHEREAS, it would be in th
establish by action of the City
reserve increases be considered a
year spending" and that all year
as a "reserve." NOW, THEREFORE,
e best interest of the City to
Council that any and all 1992
part of the City's 1992 "fiscal
end fund balances be considered
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
Any and all 1992 increases to net fund balances shall consti-
tute and be considered a "reserve increase" and therefore a part
of 1992 "fiscal year spending" within the meaning of Article X,
Section 20(2)(e) of the Colorado Constitution.
gPrTTOM ') _
Any and all 1992 year end fund balances shall constitute and
be considered a "reserve" and all subsequent expenditures and
transfers from such "reserve" shall be excluded from "fiscal year
spending" within the meaning of Article X, Section 20(2)(e) of the
Colorado Constitution.
INTRODUCED: December 28, 1992
ATTEST:
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City Clerk
By CHRIS WEAVER
Councilperson
APPROVED:
Pre si ent of thb City Council
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.low
City of Pueblo
OFFICE OF THE CITY ATTORNEY
127 Thatcher Building
MEMORANDUM PUEBLO, COLORADO 81003
TO: Members of the City Council
FROM: City Attorney
DATE: December 28, 1992
RE: Reserve Increases Under Amendment No. 1
Amendment No. 1 states that "initial district bases are current
fiscal year spending and 1991 property tax collected in 1992."
Fiscal year spending is defined to mean "all district expenditures
and reserve increases except . . . reserve transfers or expendi-
tures . . .." The Amendment does not answer what constitutes
"reserve increases" for purpose of calculating the 1992 spending
base.
There appears to be three different interpretations with respect
to reserve increases for the initial establishment of the 1992
spending base:
(a) 1992 reserve increases are not considered as part of the
spending base.
(b) any increase to net fund balances during 1992 is con-
sidered to be a reserve increase and part of the spending base.
(c) all 1992 fund balances are considered to be reserve
increases and part of the spending base.
For example, 1991 fund balance is $9 million, 1992 fund balance is
$10 million. Under (a) the $1 million increase in fund balance
would not be included in 1992 fiscal year spending; under (b) the
$1 million increase in fund balance would be included in 1992
fiscal year spending; and under (c) the $10 million fund balance
would be included in 1992 fiscal year spending.
The Colorado Municipal League has indicated that legislative
bodies might designate as reserve increases all year end fund
balances, (c) above, apparently on the theory that an Amendment
No. 1 reserve did not exist before 1993 and any money set aside in
a reserve is an increase. We believe the more supportable and
interpretation consistent with the language of Amendment No. 1
would be (b) above and included it as Section 1 in the attached
Resolution.
The interpretations appear to be consistent, that all 1992 fund
balances should be considered a reserve which may be expended
without limitation in 1993 and subsequent years and without being
part of the City's fiscal year spending for the year in which the
reserve is spent. We included this interpretation as Section 2 of
the attached Resolution.
Thomas C. Jagger
65.2/jp
Attachment