10.1. SR 11-19-2012Gbj *.4
I REQUEST FOR ACTION
V r
ACTION REQUESTED
Review city Fund Balance Policy, discuss excess fund balance accounting and consider options for use of
excess fund balance.
ACKGROUND/ ISCUSSION
Last week the Council reviewed the 2013 General Fund budget and wanted to further discuss the use of
excess General Fund fund balance.
At the end of 2011, we have a total accumulated fund balance available of $493,358 based on the audited
financial statements and the adopted 2012 budget. Our fund balance policy requites a minimum fund
balance of 40% of the next year's budget to cash flow out expenses. The updated 2013 budget requites
$97,650 of this available fund balance. We have historically maintained a fund balance of 41.5 %,in case
of unexpected expenditures, tax court cases, unplanned revenue shortfalls or emergencies, and to
maintain out minimum balance.
From time to time we can have excess fund balance resulting from expenditures come under budget,
vacant positions and unexpected revenues (grants), but the same could also happen where we go over
budget on expenditures and we experience a significant number of tax revenue delinquencies or revenue
loss.
We will review the illustration in detail at the meeting and discuss some options regarding using excess
fluid balance going forward. Those options will center around the following bullet points.
• Using over multiple years
• Using over a year or two
Transferring out any excess to capital project funds
• Fund Balance illustration
• Fund Balance Survey
2013 Budget adjustment worksheet
Mu
C: \Documents and Settings \1ziemer \Local Settings \Temporary Internet
Piles \Conteut.Outlook \OXPP9NI IG \budgets taffreport01119. dots
C: \Documents and Settings \lziemer \Local Settings \Temporary Internet Piles\ Content. Outlook\ OXFP9NI- IG \Uudgetstaffreport01119.docx
CITY OF ANYTOWN
FUND BALANCE ILLUSTRATION
SCENARIO 1- USE OF EXCESS FUND BALANCE IN 2013
SCENARIO 2- USE OF EXCESS FUND BALANCE OVER TINE
2011
2012
%
2013
%
2014
%
2015
ACTUAL
BUDGET
INC.
BUDGET
INC.
BUDGET
INC.
REVENUES
BUDGET
INC.
BUDGET
INC.
GENERALTAXES
$
9,000,000
$
8,880,000
-1.33%
$
9,031,260
1,70%
$
9,550,872
5.75%
OTHER REVENUE
1,000,000
1,020,000
2.00%
1,040,400
2.00%
GENERALTAXES
1,061,208
2.00%
EXCESS FUND BALANCE
8,980,000
-
$
300,000
2.04%
$
332,340
3.59%
$
-
2.62%
TOTAL REVENUE
$
10,000,000
$
10,200,000
2.00%
$
10,404,000
2.00%
10,612,080
2.00%
EXPENDITURES
1,082,432
2.00%
EXCESS FUND BALANCE
-
200,000
200,000
BUDGET
57,907
10,000,000
10,200,000
2.00%
TOTAL REVENUE
10,404,000
2,00%
$
10,612,080
2.00%
ACTUAL
10,404,000
9,700,000
10,000,000
3.09%
10,404,000
4.04%
10,612,080
2.00%
REVENUES OVER EXPENDITURES
$
300,000
$
200,000
$
-
$
-
TARGETED FUND BALANCE (41.5 %)
$
4,233,000
$
4,317,660
$
4,404,013
10,000,000
$
4,492,093
2.00%
ACTUAL FUND BALANCE
$
4,750,000
$
4,650,000
2.00%
$
4,317,660
2.00%
$
4,317,660
9,700,000
EXCESS FUND BALANCE
$
517,000
$
332,340
4.04%
$
(86,353)
2.00%
$
(174,433)
1.30%
SCENARIO 2- USE OF EXCESS FUND BALANCE OVER TINE
2011
2012
%
2013
%
2014
%
2015
%
ACTUAL
BUDGET
INC.
BUDGET
INC.
BUDGET
INC.
BUDGET
INC.
REVENUES
GENERALTAXES
$
9,000,000
$
8,980,000
-0.22%
$
9,163,600
2.04%
$
9,492,965
3.59%
$
9,741,889
2.62%
OTHER REVENUE
1,000,000
1,020,000
2.00%
1,040,400
2.00%
1,061,208
2.00%
1,082,432
2.00%
EXCESS FUND BALANCE
-
200,000
200,000
57,907
-
TOTAL REVENUE
$
10,000,000
$
10,200,000
2.00%
$
10,404,000
2.00%
10,612,080
10,824,322
EXPENDITURES
BUDGET
$
10,000,000
$
10,200,000
2.00%
$
10,404,000
2.00%
$
10,612,080
2.00%
$
10,824,322
2.00%
ACTUAL
$
9,700,000
$
10,000,000
3.09%
$
10,404,000
4.04%
$
10,612,080
2.00%
$
10,750,000
1.30%
REVENUES OVER EXPENDITURES
$
300,000
$
200,000
$
-
$
-
$
74,322
TARGETED FUND BALANCE (41.5 %)
$
4,233,000
$
4,317,660
$
4,404,013
$
4,492,093
$
4,581,935
ACTUAL FUND BALANCE
$
4,750,000
$
4,750,000
$
4,550,000
$
4,492,093
$
4,566,415
EXCESS FUND BALANCE
$
517,000
$
432,340
$
145,987
$
(0)
$
(15,521)
Fund Balance Survey
City
Min. Level FB
Calculated
Excess
Lino Lakes
40 -50%
% of NY budget
General Fund
Shorview
50% of levy and state aids
50% of levy and state aids
One -time expenditures
10% NY budget
10% NT budget
start -up expenditures
transfer to CIP funds
White Bear Lake
35%
% of NY budget
transfer to CIP funds
Prior Lake
40%
% of NY budget
One -time expenditures
transfer to CIP funds
property tax mitigation
Farmington
25 -50%
% of NY budget
transfer out to other funds
Owatonna
50%
% of NY budget
General Fund
Austin
42%
CY expenditures
transfer out to other funds
informally 42 -48%
South St.Paul
35%
% of NY budget
transfer to CIP funds
Faribault
45%
% of NY budget
General Fund
Chanhassen
50%
NY property taxes & State aids
transfer to CIP funds
plus $1m emergency
Elk River 40% % of NY budget General Fund
informally 41.5%
N: i Departments iFinanceiFinanceiBUDGETiBudget Folders by year12013 budgets iFundbalancereview 1111612012
Notes
(1)= addition 5 hours going from 20 hrs to 25hrs per week.
Tax Levy (General Fund)
$ 9,303,135
09/04/2012
Revenues
Expenditures
Difference
Maximum adopted levy
$ 12,737,000
$ 12,874,250
$ (137,250)
Adjustments (Discussion Items)
Revenues
Expenditures
Fund Balance
Custodian position(1)
5,400
Insurance (Opt -out)
(45,000)
Fuel - currently $3.25 per gallon
2013 Proposed
$ 12,737,000
12,834,650
$ (97,650)
2012 Adopted
$ 12,311,900
$ 12,678,050
$ (366,150)
% change
3.45%
1.24%
Notes
(1)= addition 5 hours going from 20 hrs to 25hrs per week.