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HomeMy WebLinkAbout7041SUBSTITUTED COPY 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: ;Q i City Clerk By CHRIS WEAVER Councilperson APPROVED: Pre si ent of thb City Council -u D D D .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