From
Diana G. Ortiz
Title
Resolution updating the City's Financial Management Policy
Presenter
Diana G. Ortiz, Chief Financial Officer
Recommended Action
Approve
Analysis
The City's Financial Management Policy is a formally approved document that serves as the guidelines and parameters in developing and maintaining a sound financial position for the city. It is reviewed annually for necessary updates and presented to the Finance and Government (F & G ) Committee for consideration.
The F & G committee reviewed the proposed update to the policy at the meeting held on August 7, 2012. They unanimously supported the update and recommended it be forwarded for approval by City council. The update consists of new language in section IX. FINANCIAL CONDITION AND RESERVES, D. Risk Management Reserves for Employee Insurance Fund as follows:
Employee Insurance Stop Loss Reserves - The City will self-fund its employee health insurance stop loss. A cash reserve will be established to fund the stop loss reserve. The City's goal will be a $2,000,000 stop loss reserve. This goal will be reviewed on an annual basis during the budget preparation process to evaluate the funding level for adequacy.
Contingency Reserves - The City will self-fund a reserve in the employee insurance fund, up to $1,000,000, to help offset claim years that result in higher than expected losses in order to preserve stability in the fund. This reserve is not actuarially required, but has been determined a sound process by actuaries reviewing the insurance fund due to volatility of claims that can occur. This reserve will be rebuilt, in whole or part, as funding is available, up to the maximum, during each budget year.
Financial Consideration
There is no financial impact.
Body
A RESOLUTION OF THE CITY OF GRAND PRAIRIE, TEXAS, AMENDING THE CITY'S FINANCIAL MANAGEMENT POLICY
Whereas, it is the goal of the City to maintain a long-term stable and positive financial condition; and
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