HomeMy WebLinkAbout1993 Ordinance No. 004ORDINANCE NO . 4
SERIES OF -+99:1 1993
BY AlITHORITY
COUNCIL BILL NO. 53
INTRODUCED BY COUNCIL
MEMBER HATHAWAY
AN ORDINANCE CREATING AN EMERGENCY RESERVE FUND FOR THE PURPOSE OF
COMPLYING WITH AMENDMENT 1, BY AMENDING TITLE 4, CHAl-TER 3, BY THE
ADDITION OF A NEW SECTION 12, ENTITLED EMERGENCY RESERVE FUND.
WHEREAS, Amendmen t 1 (Article X, Section 20 of the Colorado Con stitutio~), was passed
by voters on November 3, 1992: nnd
WHEREAS, Amendment l (Articl e X, S ec tion 20 of the Colorado Constitution), r eq ui res th•
establishment or an Emergency Re serve Fund;
NOW, THEREFORE, BE rr ORDAINED BY THE CITY COUNCIL OF THE CITY OF
ENGLEWOOD, COLORADO, AS FOLLOWS :
s.w.iJin..1. For purposes of Amendment 1 (Article X, Se ctio n 20 of the Co lorado
Constitution), the City of Englewood, Colorado establishe s an Emergency Fund by amending
Title 4, Chapter 3, by add ing a naw Section 12, wh ich shall read as fo ll ows :
4-3-12 : EMERGE NCY RESERVE FUND. Th ere is hereby establi sh ed an Em ergency
Reserve Fund for the purpose of compl ying wi th Am endm ent l (Article X, Section
20 of the Colorado Con sti t uti on ).
Introduced , read in full , and passed on fir st re ading on the 21st day of Dece mber, 1992.
Published as a Bill for an Ordinance on the 24th day of December, 199?..
Read by title and passed on final r eading on the 4th day of January, 1993 .
Publi shed by t itle as Ordinance No._, Series of 1993 , on the 7th day of January, 1993 .
ATTEST:
C:it/,,:(d &Gur
Patricia H. Crow , City Cl erk
I, Patricia H. Crow, City Cle rk of the City of Engl ewood , Colorado , h ereby certify that the
abov e and foregoing is a tr u,e copy of the Ord inance passed on fin al rea din g and publi shed
by titl e as Ordina nce No .'±_, Series of 1993 .
-1 .
COUNCIL COMMUNICA11ON
Date Agenda Item Subject Amendment 1
December 21, 1992
INl11ATED BY C1 y Mauager
STAFF SOURCE Roger W. Fraser, City Manager
ISSUE/AC11ON PROPOSED
Staff recommends that City Council approve the attached resolution and ordinance
(1) designating fund balances /retained earnmgs as reserves and (2) creating an
Emergency Reserve Fund respectively.
PREVIOUS COUNCIL AC11ON
None .
STAFF ANALYSIS
Designation of Fund Balances/Retained Eamlngs as Reserves . City staff members
have attended several semlnars and conducted their own examinations of
Amendment 1 of the Colorado Constitution which was approved by the voters on
November 3 , 1992 . Numerous possible lntapretations abound for several tmportar.t
features of the amendment.
One such area of Interpretation Is the definition of "reserves ." ni.e amendment
defines "fiscal year spend.Ing'' as "all dl~tr1ct expenditures and reserve Increases"
except for certain excluded amounts . "Aeserve" Is not defined , yet Its deflnltlon Is
yery Important since fiscal year spending is restrict ed to pnor year spending adjusted
only by the Denver-Boulder CPI and the percentage change In actual value of real
property In the district.
I
One Interpretation of.t\mendment 1 Is that reserves will be defined as only those
monies actually designated by the district as "reseIVCS." 1n that case, tt would be to
the City's advantage to formally designate all of the City's fund balances/retained
eamtngs as "reserves" !n 1992 . By so doing, the City would be mcreastng Its
"reserves" from $0 to ap.l'rox:lmatcly $6,000,000 In 1992. When 1993's spending
llmJt Is calculated, tt would Include all cxpemllture amounts In 1992 plus the
"reserve Increase" of $6,000,000.
Other Interpreters of the amendment bclleve that reserve Increases will ulttmately be
defined as any excesses of revenues over expenses durtng the fiscal year regardless
of the designation or title applied to them by the district (I .e., any Increases to fund
balances/retained earntngs). Therefore, any action taken by the City to rename or
designate these monies will be Immaterial to the effect of the amendment.
It Is therefore In the City's best Interest to designate Its fund balances/retained
earnings as "reserves" In 1992 . If the first Interpretation prevails, we will have
benefltted significantly by doing so. If the other Interpretation Is adopted, our
designation will do no harm nor good .
Creattng an Emergency Reserve Fund. Amendment 1 establishes "emergency
reserves" and requires local districts to reserve specified amounts of their fiscal year
spending "to use for declared emergencies only." The attached ordinance creates an
Emergen, . .1 Reserve Fund so that we can easily demonstrate compllance with the
amendment.
FINANCIAL
The designation of fund balances/retained earrungs as ''reserves" may have the effect
of Increasing our 1993 spending celling by approximately $6,000,000. The creation
of the Emergency Reserve Fund will have no real financial Impact, but will assist In
financial reporting. Funds will be transferred to the Emergency Reserve Fund after
the proposed ordinance Is adopted and published.