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<br />May 25. 2011 <br /> <br />Background: <br />. City Code, Article I, Sec. 2-2 (attached) regulates the School Board Risk <br />Management and Insurance Fund. City Code states, "Annually, as part of the budget <br />process, the city council shall appropriate for the purpose of education the total amount <br />of all funds estimated to be available for the ensuing fiscal year in the school board risk <br />management and insurance fund." In accordance with Sec. 2-2 (b) unspent <br />appropriations to PPS Risk Management and Insurance fund should lapse and return to <br />the City's coffers. <br />. The PPS Comprehensive Annual Financial Report (CAFR) for FY201 0 (attached) <br />shows the Total Assets in the Risk Management and Insurance Fund of $6,481,837 on <br />June 30,2010. The CAFR also shows Total Liabilities of $2,510,742. Additionally, the <br />CAFR shows an Unrestricted balance of $3,971,095. These accumulated funds did not <br />revert to the City and remained in the PPS coffers. <br /> <br />Discussion: <br />. An estimated $915,393 of $3.97M PPS Risk fund balance will be used in FY2011 <br />to pay PPS insurance premiums and claims. <br />. An estimated $955,702 of the $3.97M will be available in FY2012 in the event <br />there are unforeseen and unpredictable Risk fund liabilities' or claims' expenditures. <br />. On May 10, 2011 City Council appropriated $49,571,413 of local funds to PPS <br />for FY12, of which $955,702 was appropriated to the FY2012 PPS Risk fund for <br />estimated and expected expenses. The combination of the two appropriations results <br />in $1,911,404 available in the PPS Risk fund for FY2012. <br />. The City proposed authorizing the School Board to use $2.1 M of the $3.97M for <br />its FY2012 Operating Fund. <br />. In order for PPS to expend the $3,971,095 from their FY2010 Risk fund balance <br />for FY2011 and FY2012 Risk fund and FY12 general operational expenditures, an <br />appropriation by City Council is required. <br />. In essence, the proposed ordinance results in the following appropriation: <br />. $ 3,971,095 from FY2010 PPS Risk fund balance <br />. - 915,393 to FY2011 PPS Risk fund <br />. - 955,702 to FY2012 PPS Risk fund <br />. - 2,100,000 to FY2012 PPS general operations <br />. At the close of FY12 any unspent Risk funds must revert back to the City as <br />required by law. <br /> <br />Financial Impact: <br />. These funds will be used to reduce the impact of the reduction of over $12 million <br />in Virginia and American Recovery and Reinvestment Act (ARRA) funds from the <br />School Board Budget between FY2009 and FY2012. <br /> <br />Staff Recommends: <br />. Adoption of proposed appropriation ordinance. Vision Principle: Lifelong Learning <br />Community. <br /> <br />Motion by Mr. Moody, and seconded by Ms. Randall, to adopt the following <br />ordinance, and was adopted by the following vote: <br /> <br />"ORDINANCE TO APPROPRIATE THE SUMS OF $915,393 IN THE FY 2010-11 <br />SCHOOL BOARD RISK MANAGEMENT AND INSURANCE FUND; $955,702 IN THE <br />FY 2011-12 SCHOOL BOARD RISK MANAGEMENT AND INSURANCE FUND; AND <br />$2,100,000 IN THE FY 2011-12 EDUCATION--SCHOOL OPERATING FUND FROM <br />THE FY 2010-11 PORTSMOUTH PUBLIC SCHOOLS RISK MANAGEMENT FUND <br />BALANCE." <br /> <br />Ayes: Cherry, Edmonds, Heretick, Moody, Randall, Whitehurst, Wright <br />Nays: None <br />