Workshop Item - Joe Huss, Finance Director/Asst. City Manager; Ali Bong, Deputy Finance Director
Title
Title
Strategic Priorities Policy Discussion
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Background
The City’s strategic priorities fund was last discussed at the January 29 Winter Council Retreat.
The strategic priorities fund was established May 2019 from the proceeds of the dissolution of the North Suburban Hospital District (NSHD). On May 6, 2019 Council directed that the proceeds of $2,648,000 from the NSDH dissolution be placed in a strategic priorities fund to be used pursuant to Council priorities as established at a later date. Additionally, Council directed that $100,000 of this amount be set aside as a matching grant to assist in funding the new Veterans Memorial Park. Subsequent levies have included direct allocations to the Strategic Priorities Fund: $325,000 in the 2021 budget, adopted December 21, 2020; $250,000 in the 2022 budget, adopted December 19, 2021. An additional transfer of $4.2 million of unrestricted General Fund reserves was approved by Council at the end of 2021, bringing the total strategic priority fund balance to $7.2 million.
While there was not a lot of time to fully discuss the policy at the January retreat, Council did provide sufficient feedback and thoughts as to the formation of the policy. Still, it was felt that a consensus was not reached as to the direction Council wanted to pursue, hence the continuation of the discussion at the Spring Retreat.
Below is the current framework for a draft policy based on the information above and subsequent feedback received from Council. Furthermore, the most current draft of the policy is attached to the Legistar item.
1. Policy Statement - the purpose of the Strategic Priorities Fund is:
a. To fund items that the Council considers to be of high priority for accomplishing established strategic initiatives.
b. In the event of an economic downturn, to relieve the reliance on property tax levy increases and provide a funding source from which to draw to maintain basic service levels.
2. For Strategic Priorities
a. Expenditures or transfers from the Strategic Priorities Fund shall be made only after careful deliberation of the City Council.
b. The city council must identify that:
i. The project/strategic priority will advance or achieve one or more of the strategic initiatives identified in the City’s adopted Strategic Plan; and
ii. The project/strategic priority has sufficient community-wide benefit consistent with other city goals, programs, or policies.
3. For Economic Downturns - The City Council will consider the use of the Strategic Priorities Fund as a supplemental funding source for the General Fund in the event of an economic turndown as measured by:
a. A decline in the City’s overall taxable property value of 0.5%;
b. A decline in non-property tax revenue equal to 5% of annual revenue;
c. A mid-year decline in revenue to the extent that the General Fund’s reserves are depleted;
4. Expenditures or transfers from the Strategic Priorities Fund are to be made only upon the adoption of a resolution approved by an affirmative vote of at least five (5) Councilmembers.
Staff Recommendation
Review the draft policy and determine the next steps for formal adoption of the policy.