4.7. SR 05-06-2013 Elk REQUEST FOR ACTION
River
TO ITEM NUMBER
Mayor and City Council 4.7
AGENDA SECTION MEETING DATE PREPARED BY
Consent May 6, 2013 Tim Simon, Finance Director
ITEM DESCRIPTION REVIEWED By
Resolution Authorizing a Transfer from the General Fund to Cal Portner, City Administrator
the Capital Outlay Reserve Fund REVIEWED BY
ACTION REQUESTED
Approve by resolution a transfer from the General Fund to the Capital Outlay Reserve Fund.
BACKGROUND/DISCUSSION
Over the past several months,the Council has reviewed and updated all of our financial management
policies which the Council approved on April 15. As part of that process,we reviewed the fund balance
policies for our General, Special Revenue, Capital Project,Debt Service, and Enterprise Funds.
The fund balance policy sets a minimum and maximum fund balance in the General Fund of 40-45%.
During the 2013 budget process,the Council wanted to use any amount above our maximum amount
over a period of several years.
As you will recall,in accordance with Governmental Accounting Standard Boards (GASB) Statement#54
(reprinted below),the amount above our maximum, except the amount used in the subsequent year's
budget (2013),would be transferred to a capital project fund versus being able to assign the amount. We
maintain the flexibility each budget cycle to make an annual transfer back to the General Fund to reduce
the impact of the property tax levy as done in the past if/as fund balance changes.
Paragraph 16 of GASB Statement No. 54
16. An appropriation of existing fund balance to eliminate a projected budgetary deficit in the subsequent year's
budget in an amount no greater than the projected excess of expected expenditures over expected revenues
satisfies the criteria to be classified as an assignment of fund balance. As discussed in paragraph 15,
assignments should not cause a deficit in unassigned fund balance to occur.
FINANCIAL IMPACT
The amount above the 45%will be included as part of the 2014&2015 budget process. A budgeted
Transfer In from the Capital Outlay Reserve Fund may be used for the remaining fund balance.
ATTACHMENTS
■ Transfer Resolution
P O W E R E D BY
N:\Public Bodies\Agenda Packets\05-06-2013\4.7si Fund Balance UocationX£docx aA f U R E
RESOLUTION 13-
A RESOLUTION OF THE CITY OF ELK RIVER
A RESOLUTION AUTHORIZING A TRANSFER FROM THE GENERAL FUND
TO THE CAPITAL OUTLAY RESERVE FUND
WHEREAS, The City of Elk River's Financial Management Policies includes a General Fund
Balance policy in excess of 45% shall be allocated to other purposes at the discretion
of the City Council; and,
WHEREAS, The City Council has requested that the minimum unassigned fund balance in the
General Fund for 2012 be a minimum of 40% and a maximum 45%; and,
WHEREAS, The City Council has considered the various uses of the balance in excess of 45%;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Elk River
makes the following transfer of funds from the General Fund excess balance:
Capital Outlay Reserve Fund $308,208
Passed and adopted this 6`h day of May 2013.
John J Dietz,Mayor
ATTEST:
Tina Allard, City Clerk
N:APublic Bodies\Agenda Packets\05-06-2013\4.7si Fund Balance AllocationXf.docx