HomeMy Public PortalAboutResolution 11-19 Fund Balance PolicyRESOLUTION 11-19
Fund Balance Policy
A RESOLUTION OF THE CITY OF MCCALL, IDAHO, PROVIDING FOR A FUND
BALANCE POLICY RELATING TO GOVERNMENTAL ACCOUNTING STANDARDS
BOARD (GASB) STATEMENT NO. 54; ADOPTING A FUND BALANCE POLICY
COVERING THE GENERAL FUND, SPECIAL REVENUE FUNDS, AND ENTERPRISE
FUNDS; AND PROVIDING AN EFFECTIVE DATE
WHEREAS, the City of McCall may not expend funds in excess of their appropriation, Idaho
Code 50-1006; and
WHEREAS, the City of McCall receives revenues at different intervals than it expends funds;
and
WHEREAS, the City of McCall must make prompt payments of debts and obligations, Idaho
Code 67-2302; and
WHEREAS, the City of McCall's auditors recommend maintaining a fund balance that enables
the City to meet debts and obligations when due; and
WHEREAS, on March 14, 2002 the McCall City Council adopted Resolution 02-04, establishing
minimum fund balances; and
WHEREAS, the Governmental Accounting Standards Board (GASB) has adopted Statement 54
(GASB 54), a new standard for governmental fund balance reporting and governmental fund
type definitions that became effective in governmental fiscal years starting after June 15, 2010;
and
WHEREAS, on September 23, 2011 McCall City Council conducted a work session and
received information from the City Treasurer on GASB 54 changes in fund balance categories
and classifications; and
WHEREAS, the City Council of McCall directed staff to bring forth a fund balance policy
incorporating GASB 54 fund balance categories and classifications; and
WHEREAS, the City Council of McCall directed staff to bring forth a minimum required fund
balance policy for the governmental funds, specifically the General Fund and Special Revenue
Funds.
NOW, THEREFORE, it is resolved by the Mayor and City Council of the City of McCall,
Valley County, Idaho, that:
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Resolution 11-19 Fund Balance Policy
November 3, 2011
Section 1: The McCall City Council hereby adopts The City of McCall Fund Balance Policy, a
copy of which is attached as Attachment A, and incorporated herein by this reference. This new
policy supersedes and replaces the fund balance policy adopted in Resolution 02-04.
Section 2: This resolution shall be in full force and effective immediately upon its adoption and
approval.
Passed and approved this 3 day of November, 2011.
CITY OF MCCALL
Valley County, Idaho
,'.' a__.
Donald C. Bailey, Mayor
ATTEST:
BessieJo : gner, Cit 'Clerk
Resolution 11-19 Fund Balance Policy
November 3, 2011
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City of McCall
Fund Balance Policy
Fund Balance is an important indicator of the City's financial position. Fund Balance is the
difference between assets and liabilities in the governmental funds. Maintaining minimum fund
balances is considered a prudent management practice. Adequate fund balances are maintained
to allow the City to continue providing services to the community in case of unforeseen revenue
fluctuations, unanticipated expenditures, and to ensure the City has sufficient cash flows.
The following classifications will apply to fund balances in the City's governmental funds:
• Nonspendable Fund Balance — amounts that are non cash or legally or contractually
required to be maintained intact such as inventory, long term loans receivable, property
held for sale, endowment or permanent fund principal, and prepaid items.
• Restricted Fund Balance — amounts that have externally enforceable limitations on their
uses; amounts constrained to specific purposes by their providers (such as grantors,
bondholders, and higher levels of government), through constitutional provisions or by
enabling legislation.
• Committed Fund Balance — amounts constrained to specific purposes by the City Council
itself; to be reported as committed, amounts cannot be used for any other purpose unless
the City Council takes the same level of action to remove or change the constraint.
• Assigned Fund Balance — amounts the City Council intends to use for a specific purpose;
intent can be expressed by the Council or by an official designated by the Council by
resolution.
• Unassigned Fund Balance — amounts that are available for any purpose; these amounts
are reported only in the General Fund.
The Treasurer is authorized to classify available fund balance for specific purposes in accordance
with Government Accounting Standards Board (GASB) Statement No. 54. The City will follow
the GASB recommendation that the restricted, committed, and assigned fund balances are spent
first followed by the unassigned fund balance.
Minimum Fund Balance Policy
To ensure sufficient cash flow to maintain services between property tax receipts and to provide
budget stabilization, the City will maintain minimum fund balances in the General Fund and the
Special Revenue Funds for both cash flow and budget stabilization as described below:
Cash Flow:
• General Fund — an amount equal to twenty-five percent (25%) of the current years'
operating budget.
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