To:    Mayor Vera Katz

   Commissioner Jim Francesconi

   Commissioner Randy Leonard

   Commissioner Dan Saltzman

   Commissioner Erik Sten

   City Auditor Gary Blackmer

From:  Mark Murray, Budget Director

Date:  September 10, 2003

Subject:  Resolution re: Beginning Fund Balance – Strategic Use Proposal

With this memo, I am sending to you a resolution to be heard by City Council next week. This resolution will direct the Office of Management and Finance to allocate additional beginning fund balance in accordance with the Strategic Use Proposal developed by the Mayor and OMF.

You have each been briefed this week on the projected amount of discretionary fund balance carried over from FY 2002-03, and have reviewed the proposed use of the estimated $11.4 million. In accordance with the City’s Comprehensive Financial Management Policy, City bureaus with excess program revenue are allowed to receive 50% of these revenues. Therefore, a portion of the Strategic Use Proposal involves the transfer of $803,991 to the Police Bureau, and $115,056 to the Fire Bureau.

With this resolution and the Strategic Use Proposal, Council will direct that additional fund balance of $5.4 million be used to pay back the line of credit the City used to fund school support in FY 2002-03. As well, another $5.1 million will be used to buy down the Business Licenses Fee surcharge annually for three years.

Please contact me if you have any questions regarding this matter. I will be out of the office as of September 12, so if you have questions after that time, please contact Drew Barden at 823-6954 or Celia Heron at 823-6952.