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LAFCO adopts 15% minimum reserve policy for general fund amid implementation caveats
Summary
The commission adopted a reserve policy requiring LAFCO to hold at least 15% of its annual LAFCO budget (or enough to cover departing staff severance pay), clarifying the policy covers the general fund and not the CCA special fund. Staff estimated the current reserve near $300,000.
The Local Agency Formation Commission adopted draft reserve policy language that sets a minimum reserve equal to 15% of the annual LAFCO budget or enough to cover departing staff severance pay, whichever is greater.
Jason Fried, LAFCO staff, said the agency had drawn down a once-larger reserve and that the draft policy helps set a future floor as funding sources shift. "When I looked at it... we were in the 350 range... my estimate was that we would end this fiscal year with about 300,000 to 310,000 in our reserve account," Fried said, noting the proposed policy would not touch the separate CCA fund.
Commission discussion stressed that any reserve policy should not hamper near-term work on Clean Power SF or other priorities and asked staff to clarify that the reserve language applies to the LAFCO general fund when the annual budget is established. A majority vote is required under the draft language to draw down the reserve.
Public commenters supported having a reserve and urged attention to the memorandum of understanding with the San Francisco Public Utilities Commission that affects CCA funds. The commission read the 15% clause into the record and took the motion without objection.
Note: the transcript contains an inconsistent later line that reads '50%' in one instance; the language read aloud and adopted in the meeting text was 15%, and staff and chair discussed placing the clause in the LAFCO budget section to avoid confusion.
