TimeAlarms Library alarms not calling functions

How do I have the function manipulate the global variable?

Do not redeclare it in the function.

void dailyReset(){
 //int initBit = 1;
 initBit = 1;
 Serial.println();
 Serial.print("Daily Reset:");
 Serial.print(initBit); 
}

Even if that is the case, the function is still not being called, as the print functions fail to occur. How do I get the time alarms to call the function?

Your problem is not with Alarm.alarmRepeat( 1, 0, 0, dailyReset); or with the access of time from the RTC. When I load an rtc with 0 hrs, 59 minutes, 0 seconds and run a stripped down version of your sketch I get the dailyReset to run. I think your sketch is hanging up somewhere or the Time Lord is messing with the time.

When I leave out all the non time/rtc related libraries and functions depending on them in your sketch the dailyReset is entered and I see the printout.

#include <Wire.h>
#include <RTClib.h>
#include <Time.h>
#include <TimeAlarms.h>
#define dtNBR_ALARMS 20
//#include <Adafruit_MCP23017.h>
//#include <Adafruit_RGBLCDShield.h>
//#include <NewPing.h>
//#include <DHT.h>
//#include <TimeLord.h>
//#define DHTTYPE DHT11