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Consent-General Government # 19.
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| Board of Supervisors |
Financial Services |
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| Subject |
| Adopt the revised Fund Balances and Reserves policy to address reserves for the Yolo County Central Landfill Enterprise Funds. (No general fund impact) (Rinde) |
| Recommended Action |
| Adopt the revised Fund Balances and Reserves policy to address reserves for the Yolo County Central Landfill Enterprise Funds. |
| Strategic Plan Goal(s) |
| Operational Excellence |
| Reason for Recommended Action/Background |
The Yolo County Central Landfill (Landfill) is currently working with a financial advisor, KNN Public Finance (KNN), in order to prepare for the issuance of the 2019 Solid Waste Financing. As a result, during the preparation of the documents associated with financing, there was a review of the Landfill's current financial practices. The Landfill currently maintains certain reserves however there is a desire to formalize the reserve practices. Formal policies demonstrate sound fiscal management practices and may be viewed favorably by credit rating agencies or other outside parties.
In coordination with KNN and the Department of Financial Services, a review was done of the Landfill's current practices as well as reviewing best practice guidance issued by the Government Finance Officers Association (GFOA), on the topic of Working Capital Targets for Enterprise Funds. From this, it was determined that an update is needed to the County's policy on Fund Balances and Reserves.
GFOA guidance (Att.C) suggests that working capital targets should be developed to target an amount that is appropriate for local conditions and that to arrive at a customized target amount, governments should start with a baseline of 90 days of working capital and then adjust based on the enterprise fund in question. These adjustments could include a variety of factors including but not limited to support from general government, cash cycles, customer concentration, demand for service, control over rates and revenues, asset age and condition, expense volatility, management plans, and debt position.
Based on taking these considerations into account, it was determined appropriate to set the revision to the Policy for Enterprise funds for a minimum of 90 days with a target of 150 days of operating reserve. |
| Collaborations (including Board advisory groups and external partner agencies) |
| The Department of Financial Services collaborated with the staff from the Integrated Waste Management Division of the Department of Community Services, County Counsel, and KNN Public Finance who is advising the Landfill Solid Waste Revenue Bond Financing. |
| Competitive Bid Process |
| Not applicable. |
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