10138-11 Transfer $25,000 Rainy Day Fund No. 102 to Umeployment Compensation Fund Fund No. 713

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COUNTY -CITY BUILDING 227 W. JEFFERSON BOULEVARD SOUTH BEND, IN 46601 r x 1 1 CITY OF SOUTH BEND STEPHEN J. LUECKE, MAYOR OFFICE OF ADMINISTRATION & FINANCE GREGG D. ZIENTARA, CITY CONTROLLER November 23, 2011 Mr. Derek Dieter President, South Bend Common Council 4th Floor, County -City Building South Bend, IN 46601 PHONE 574 - 235 -9216 FAX 574 - 235 -9928 Re: Ordinance of the Common Council Transferring Monies from the Rainy Day Fund to Support Temporary Cash Flow Issue Negative Cash Balances in Certain City Funds Dear President Dieter: Effective January 1, 2011, the City of South Bend established the Unemployment Compensation Insurance Fund #713 (Ordinance No. 10059 -10, adopted 12/13/2010) for the payment of unemployment insurance compensation claims in a single fund affecting an improved financial control over unemployment compensation claims required to be paid to former employees presented to the city by the Indiana Department,of Workforce Development. Ordinance 10059 -10 provided for the implementation of an "unemployment claim fee" to be charged to city operating departments to provide funding from departmental operations to the Unemployment Compensation Insurance Fund to affect payment of unemployment insurance claims. Due to a higher level of unemployment compensation insurance claims paid to former city employees than originally anticipated and projected, entirely the result of federal legislation extending the length in the months of benefit coverage, the Unemployment Compensation Insurance Fund is currently in a deficit balance. It is therefore necessary to temporarily transfer monies in the amount of $25,000 from the Rainy Day Fund 102 to the Unemployment Compensation Insurance Fund 713 to correct the deficit thereby meeting 2011 operational costs. The Rainy Day Fund has sufficient monies (in excess of $8.4 million) to accommodate this temporary cash transfer. I have attached a pro -forma cash flow schedule to this letter (not a part of the spending bill request) to provide Council with an improved understanding of the 2011 Unemployment Compensation Insurance Fund actual activity and a projection of forecasted 2012 cash flow activity. The pro -forma analysis demonstrates the high level of claim "payments ", the result of extended federal benefit coverage, paid for by the City of South Bend versus the projection of claim payments indicated as "receipts" on the pro -forma schedule. 0