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American River Flood Control District Reserve Policy


The American River Flood Control District Board of Trustees adopted Resolution 2003-05 in June 2003 to establish a Flood Emergency Response Fund, an Emergency Repair Reserve Fund, and a Capital Outlay Reserve Fund.  Any funds not included in the three reserve funds were held in the District’s undesignated Operations and Maintenance Fund.  In December 2007 the Board directed staff to establish a Retiree Health Benefit Reserve Fund, and adopted Resolution 2008-03 to create this fund.  The allocation among District funds shall be reviewed on an annual basis when adopting the budget for each fiscal year.  The followings sections summarize the fund descriptions and uses.

The structure of investment accounts for individual reserve funds is shown in Appendix A.

Flood Emergency Response Fund

The District has agreements with local contractors to respond with materials, equipment and labor during a flood emergency on a 24-hour/7-day a week basis.  As the “first responder” to a flood emergency, the District must be prepared to underwrite the costs for an initial flood fight without assistance from other local agencies, the State or Federal governments.  In 2003, the District prepared a hypothetical flood scenario which estimated the District’s costs for a flood emergency response could be approximately $1 million.  This estimate anticipates the Corp of Engineers assumes control of the flood fight at the most critical sites after two days while the District continues operations at less critical sites.

The Flood Emergency Response Fund may be used, but is not limited to the following:

·         Purchase and deployment of materials for flood fighting

·         Purchase of flood fight equipment and vehicles

·         Overtime for District staff

·         Supplemental staff from outside agencies

·         Rental of equipment and vehicles for use during a flood emergency response

·         Payment to contractors for labor, equipment and materials

·         Construction observation services to monitor contractor’s activities and prepare records of work done including labor, equipment and materials

·         Retention of consultants or other experts to assist the District in evaluating its facilities, recommending an emergency action or otherwise managing the flood emergency response

·         Use of California Conservation Corps or Department of Forestry and Fire Protection workforce to prepare for a flood such as filling sandbags and/or actually conducting a flood fight

·         Payment for the care (food and shelter) of volunteers and/or paid flood responders

·         Services rendered to document flood damages and prepare damage reports or other records necessary to request federal and state disaster assistance funds

·         Any other purpose as approved by the Board of Trustees

Since the District’s Flood Emergency Reserve Fund was established, Hurricane Katrina demonstrated the need for higher funding levels to carry out effective emergency response measures in a major flood event.  The District shall strive to maintain a high level of funding as in its Flood Emergency Reserve Fund.  The target funding level for this reserve fund is between $1 million and $2 million.

Emergency Repair Fund

Following a flood, interim repairs to damaged or breached levees are necessary to strengthen the system before more complete repairs can be made at the end of flood season.   In addition, the District would be responsible for the local cost share of permanent repairs conducted by the Corps of Engineers under Public Law 84-99.  The local cost share for levee repairs following a major flood was estimated to be between $600,000 and $1,000,000 in 2003.  Levee repair unit costs have grown in recent years due to the large number of critical erosion repair projects leading to a higher demand for materials in addition to higher fuel costs. 

The Emergency Repair Fund may be used for, but is not limited to the following:

  • Labor, equipment and materials to repair damaged levees or other District facilities
  • Equipment rental by District staff needed for repairs
  • Consulting services including legal, environmental, design, survey, geotechnical and construction management
  • Services needed to conduct damage survey assessments to submit for federal and state disaster assistance.
  • Management and consultant services needed to negotiate an agreement with Corps of Engineers and then managing the work thereafter
  • Any other purpose as approved by the Board of Trustees.

The target funding level for this reserve fund is between $1 million and $2 million.

Capital Outlay Fund

The District may undertake capital improvement projects to repair damaged levees, improve the reliability of the system and/or increase the District’s ability to monitor the system and respond in a flood emergency.  In the recent past, the majority of the capital improvements have been erosion protection placed on levee and riverbank slopes.  High velocity flows during floods which scour the river banks and levee slopes are responsible for the damage.  Along the American River, the flows are regulated by Folsom Dam.  Construction of the Folsom Dam auxiliary spillway will provide additional overall flood protection, however it will also result in moderate flood releases more often and for longer durations which will potentially increase erosion damage on the levees.  Erosion also affects the river’s banks, and if not arrested, will eventually begin erosion of the levee itself.  Currently significant bank protection work has been done along the American River primarily by the Corps of Engineers, the Reclamation Board, and the Sacramento Area Flood Control Agency.  The District may undertake smaller erosion repair projects on its own at sites that are not included in the federal bank protection program. 

The Capital Outlay Fund may be used for, but is not limited to the following:

  • Staff time to plan, design and manage various capital improvement projects
  • Consulting services including real estate, environmental, design, survey, geotechnical and construction management associated with capital improvement projects
  • Preparation of environmental documents, construction documents and all securing all required permits.
  • Securing all easements and rights of way necessary to implement the project
  • Relocation of any utility which conflicts with the proposed project
  • All construction costs associated with the project
  • Required environmental mitigation
  • Any other purpose as approved by the Board

The target funding level for this reserve fund is between $1 million and $2 million.

Retiree Health Benefit Reserve Fund

In 2007, the District commissioned an actuarial study to determine its liability for retiree health benefits to comply with the Government Accounting Standards Board Rules 43 and 45.  The Board of Trustees is reviewing options for establishing a trust fund for this purpose.  In the interim, the Board directed staff to set aside the Annual Required Contribution in a Retiree Health Benefit Reserve Fund.  This reserve fund may be reallocated to other uses such as flood emergency response until the Board formally approves enrolling in a trust fund to be used for retiree health benefits. The target funding level for this reserve fund shall be based on recommendations from an actuarial study to be performed every three years.