Loading...
HomeMy WebLinkAboutResolution 2012-10 Adoption of Fund Balance Policy RESOLUTION NO. 2012-10 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA, ADOPTING A FUND BALANCE POLICY; PROVIDING FOR SEVERABILITY, REPEAL OF PRIOR INCONSISTENT RESOLUTIONS, AND AN EFFECTIVE DATE. WHEREAS, the Winter Springs City Commission endorses sound financial policies and practices; and WHEREAS, the City Commission desires to adopt the Fund Balance Policy attached hereto as Exhibit "A, "consistent with the Governmental Accounting Standards Board Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions; and WHEREAS, the City Commission of the City of Winter Springs deems that this Resolution is in the best interests of the public health, safety, and welfare of the citizens of Winter Springs. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER SPRINGS, SEMINOLE COUNTY, FLORIDA, AS FOLLOWS: Section 1. Incorporation of Recitals. The foregoing recitals are deemed true and correct and are hereby fully incorporated by this reference. Section 2. Adoption of Fund Balance Policy. The City Commission of the City of Winter Springs hereby adopts the Fund Balance Policy set forth in Exhibit "A," attached hereto and fully incorporated herein by this reference. Section 3. Repeal of Prior Inconsistent Resolutions. All prior resolutions or parts of resolutions in conflict herewith are hereby repealed to the extent of the conflict. Section 4. Severability. If any section, subsection, sentence, clause, phrase, word, or portion of this Resolution is for any reason held invalid or unconstitutional by any court of competent jurisdiction, or such court declares the banner program a public forum, this Resolution shall be immediately presented to the City Commission at their next regular meeting or special meeting for further consideration which may include amending or repealing this Resolution. Section 5. Effective Date. This Resolution shall become effective immediately upon adoption by the City Commission of the City of Winter Springs, Florida. RESOLVED by the City Commission of the City of Winter Springs, Florida, in a regular meeting assembled on the 12` day of March, 2012. City of Winter Springs Resolution 2012-10 Page 1 of 2 d e f :7,0,1 C H •. SL! �s�? yor ATT ' LORENZO- LUACES, City Clerk Approved o legal form and sufficiency for the City . "ter Springs only: AN ' /IV A. GARGANESE, City Attorney City of Winter Springs Resolution 2012 -10 Page 2 of 2 EXHIBIT "A" TO RESOLUTION 2012 -10 CITY OF WINTER SPRINGS FUND BALANCE POLICY PURPOSE The Fund Balance Policy is intended to provide guidelines for the budgeting process and to establish fund balance classifications that establish a hierarchy based on the extent to which the City of Winter Springs (the City) must observe constraints imposed upon use of the resources that are reported by the governmental funds. The main objective of establishing a fund balance policy is to maintain sufficient working capital to fund operations and to better prepare for taking advantage of future economic opportunities. More detailed fund balance financial reporting and the increased disclosures will aid the user of the financial statements in understanding the availability of resources. The fund balance will be comprised of three primary categories: 1) Nonspendable Fund Balance 2) Restricted Fund Balance 3) Unrestricted Fund Balance. DEFINITIONS Governmental Funds — are used to account for all or most of the City of Winter Springs' general activities, including the collection and disbursement of allocated monies (special revenue funds), the acquisition or construction of general capital assets (capital projects funds) and the servicing of general long -term debt (debt service funds). The General Fund is used to account for all activities of the City not accounted for in some other fund. Fund Balance — the difference between assets and liabilities in a Governmental Fund. Nonspendable Fund Balance — the portion of a Governmental Fund's net assets that are not available to be spent, either short-term or long -term, in either form or through legal restrictions (e.g., inventories, prepaid items). Restricted Fund Balance - the portion of a Governmental Fund's net assets that are subject to external enforceable legal restrictions (e.g., grantor, contributors and property tax levies). Unrestricted Fund Balance is made up of three components: • Committed Fund Balance - the portion of a Governmental Fund's net assets with self- imposed constraints or limitations that have been placed at the highest level of decision making. • Assigned Fund Balance - the portion of a Governmental Fund's net assets to denote an intended use of resources (e.g. Storm /Emergency Reserve). • Unassigned Fund Balance - available expendable financial resources in a governmental fund that are not the object of tentative management plan (i.e. assignments). Unassigned fund balance should exist only in the General Fund; for all other governmental funds, unassigned fund balance may only be reported in the case of a deficit fund balance position. EXHIBIT "A" TO RESOLUTION 2012 -10 FUND BALANCE PHILOSOPHY It is the City of Winter Springs' philosophy to support Tong -term financial strategies, where fiscal sustainability is its first priority, while also building funds for future growth opportunities. It is essential to maintain adequate levels of fund balance to mitigate current and future risks (e.g., revenue shortfalls and unanticipated expenditures) and to ensure stable tax rates. Fund balance levels are also a crucial consideration in long- term financial planning. SCOPE This policy establishes the hierarchy of fund balance and provides for the minimum amount of fund balance each governmental fund should maintain. MINIMUM FUND BALANCE LEVELS This Policy applies to the City of Winter Springs governmental funds as follows: 1. General Fund - The General Fund is a major fund and the general operating fund of the City of Winter Springs. It is used to account for administrative, police, public works and parks, and all financial resources except those that are accounted for in another fund. A. Each year a portion of the spendable fund balance will be determined as follows: I. Committed — A portion of the fund balance may be committed through formal action of the City Commission either through a resolution or ordinance. II. Assigned — Fiscal Sustainability. This assigned fund balance will be the minimum required as set forth in Resolution 2002 - 36.The minimum fund balance level is 20% of the current annual budgeted expenditures. This will be adjusted annually with the adoption of the annual budget and is calculated at a minimum of three months (20 %) of expenditures not including capital, debt service and interfund transfers. III. Unassigned — The unassigned fund balance will be reviewed annually during the budget process. Balances in excess of 20% of the current annual budgeted expenditures may be assigned for known liabilities and /or capital to include economic development and future growth opportunities. 2. Special Revenue Funds - Special revenue funds are used to account for and report the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes other than debt service or capital projects. Financing for most special revenue funds is provided by specific fees and assessments. These proceeds are devoted exclusively to the purposes for which the fees and assessments were authorized and are therefore legally restricted to the purpose of the fund. A. Road Improvements — This fund is funded through the optional 1 cent infrastructure surtax. The funds are held in trust with Seminole County EXHIBIT "A" TO RESOLUTION 2012 -10 on behalf of the City. As the City completes major road projects requests to draw from the trust are made. B. Solid Waste /Recycling — This fund is used to collect revenues from billed services for solid waste removal and recycling. Within the Solid Waste Fund the City Commission may commit or assign a portion of fund balance for storm /emergency disaster relief. To set aside funds in the event of a major storm or other event creating a significant increase in solid waste removal fees. C. Special Assessments TLBD/ Oak Forest Maintenance —Each of these funds are funded through the special assessments billed to the residents in its defined area. The monies are used exclusively for maintaining the capital improvements of these specific areas. D. Police Education —the purpose of this fund is to provide continued training and education to sworn officers. The revenue sources for this fund are fines and forfeitures collected as a result of carrying out law enforcement. E. Special Law Enforcement Trust Local /Federal — These funds are established strictly for the purpose of law enforcement. Sources for the Local fund are derived from property confiscated as a result of law enforcement and the Federal fund is a distributive share of federal monies Derived from law enforcement activities. F. Impact Fees. — These funds as allowed by Chapter 163, Florida Statutes, are established for the collection of fees from property developers. The fees are to be used exclusively to meet the capital needs of the City as a result of growth within the City. Such fees may provide for but are not limited to additional parks amenities (e.g. playground equipment) or the purchase of an additional police vehicle for the new officer needed as a result of the growth. G. Transportation Improvement — This fund is established for the exclusive collection of the Local Option Gas Tax (LOGT) that is collected and allocated between Seminole County and the seven cities in within the County according to the terms set forth in the inter local agreement. Expenditures are exclusively limited to the improvement of the transportation system within the borders of the City. H. Medical Transport Fees — This fund is established for the purpose of collecting fees to offset medical transport services. I. Arbor — Having received a "Tree City" designation, the City is committed to the preservation of trees and shrubs through the collection of arbor fees and violations. The funds collected are restricted to new plantings and maintenance of trees and shrubs within the City and community education about care and maintenance of the City's tree canopy. 3. Debt Service Fund - These funds were established to account for financial resources that are restricted, committed, or assigned for the expenditure of principal and interest. The City levies an amount approximately equal to the EXHIBIT "A" TO RESOLUTION 2012 -10 principal and interest that is anticipated to be paid per the outstanding bond and note resolutions. Any fund balance accumulation should be minimum and less than 10% and may be used for additional principal payments /early retirement of the debt. Fund balances in these funds are derived from property taxes and other fees for services (e.g. franchise fees, water /sewer utilities) and are therefore may be legally restricted to the purpose of the fund. 4. Capital Projects Fund — These funds are established to account for and report financial resources that are restricted, committed, or assigned for the expenditure of capital outlays including the acquisition or construction of capital facilities and other capital assets. These funds' fund balance will be considered restricted, committed, or assigned depending on the intended source /use of the funds. FLOW ASSUMPTIONS Some projects (funds) are funded by a variety of resources, including both restricted and unrestricted (committed, assigned and unassigned). The City's flow of funds assumption prescribes that the funds with the highest level of constraint are expended first. If restricted or unrestricted funds are available for spending, the restricted funds are spent first. If different levels of unrestricted funds are available for spending, the City of Winter Springs considers committed funds to be expended first followed by assigned and, lastly, unassigned funds. AUTHORITY A self- imposed constraint on spending the fund balance (Committed Fund Balance) must be approved by ordinance or resolution of the City Commission. Any modifications or removal of the self- imposed constraint must use the same action used to commit the fund balance. Formal action to commit fund balance must occur before the end of the fiscal year. The dollar amount of the commitment can be determined after year end. Authority for designating fund balance as assigned is delegated by the City Commission to the City Manager and /or Director of Finance and Administrative Services. MONITORING MINIMUM FUND BALANCE LEVELS The City's management staff will monitor revenue collection and available cash by reviewing monthly financial reports. During the year, if there is an expectation that fund balance levels will not be met by the end of the fiscal year, the City Manager may review all projected operational and capital expenditures with the management team, and accordingly, present a plan to the City Commission for a modification of goals and projects established in the adopted budget. Attachment "A" to Exhibit "A" (for Resolution 2012 -10) RESOLUTION NO. 2011-51 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA, FORMALLY ACKNOWLEDGING AND ESTABLISHING, PURSUANT TO GASB 54, THE SOLID WASTE FUND AND THE ARBOR FUND AS SPECIAL REVENUE FUNDS FOR THE CITY OF WINTER SPRINGS; PROVIDING FOR SEVERABILITY; PROVIDING FOR REPEAL OF PRIOR INCONSISTENT RESOLUTIONS; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City Commission of Winter Springs desires to comply with the Govemment Accotmting Standards Board Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions; and WHEREAS, the City Commission of Winter Springs deems that this Resolution is in the best interest of the public health, safety, and welfare of the citizens of Winter Springs. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER SPRINGS, SEMINOLE COUNTY, FLORIDA, AS FOLLOWS: Section 1. Incorporation of Recitals. The foregoing recitals are deemed true and correct and are hereby fitily incorporated by this reference. Section 2. Solid Waste Fund. The Winter Springs City Commission hereby formally establishes a Solid Waste Fund as a Special Revenue Fund, which shall combine and be comprised of the existing solid waste, storm reserve (casus fortuitus) and disaster recovery funds. Section Establishment of Arbor Fund. The Winter Springs City Commission hereby formally acknowledges and establishes the Arbor Fund as a Special Revenue Fund. Section 4. Repeal of Prior Inconsistent Resolutions. All prior resolutions or parts of resolutions in conflict herewith are hereby repealed to the extent of the conflict. Section Severability. If any section, subsection, sentence, clause, phrase, word, or portion of this Resolution is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and such holding shall not affect the validity of the remaining portion hereto. Section 6. Effective Date. This Resolution shall become effective immediately upon adoption by the City Commission of the City of Winter Springs, Fbrida. City of Winter Springs, Florida Resolution 2011 -51 Page 1 of 2 RESOLVED by the City Commission of the City of Winter Springs, Florida, in a public meeting assembled on this 26 day of September 2011. / - ./ s C 's Lacey, r ATTEST: r. LAMP , , Andrea , ces, City Clerk Approved legal form and sufficiency for The Ci ter Springs only: Anthony A. Garganese, City Attorney City of Winter Springs, Florida Resolution 2011 -51 Page 2 of 2 Attachment "B" to Exhibit "A" (for Resolution 2012 -10) RESOLUTION NUMBER 2002 -36 A RESOLUTION OF THE CITY OF WINTER SPRINGS, FLORIDA, ESTABLISHING A GENERAL FUND FUND BALANCE POLICY AND PROVIDING AN EFFECTIVE DATE WHEREAS, the City Commission, in and for the City of Winter Springs, Florida, hereinafter referred to as Commission, endorses sound financial policies and practices; and, WHEREAS, the Commission has determined that a fund balance policy for the General Fund tailored to the particular needs of the City is the most responsible way to insure against unanticipated events which would adversely affect the financial condition of the City and jeopardize the continuation of necessary public services; and, WHEREAS, it is essential that the Commission maintain an adequate fund balance in its general operating fund to provide the capacity to: (1) provide sufficient cash flow for daily financial needs, (2) secure and maintain investment grade (i.e. A or above) bond ratings, (3) offset significant economic downturns or revenue shortfalls, and (4) provide funds for unforeseen expenditures related to emergencies; and, WHEREAS, the City has an informal goal establishing an amount equal to three months operating expense of the General Fund to be the desired General Fund fund balance; and, WHEREAS, the Commission desires to adopt a formal General Fund fund balance policy, now therefore be it resolved as follows: SECTION I - Definition: I. General Fund Operating Expense — For purposes of this resolution, operating expense shall mean General Fund expenses other than capital outlay and debt. II. Capital Outlays — For purposes of this resolution, capital outlay shall mean vehicles, equipment, real estate and improvements to real estate. SECTION II — Unreserved Fund Balance Goal: It shall be the goal of the City to maintain at all times an unreserved General Fund fund balance in an amount equal to not less than 25% of the total operating expenses of the General Fund. SECTION III — Required Minimum Unreserved General Fund Fund Balance: Except as provided in Section IV herein, the City shall not reduce the unreserved General Fund fund balance below an amount equal to 20% of the total operating expenses of the General Fund. SECTION IV — Reduction of Unreserved General Fund Fund Balance Below the Minimum: By a super majority vote of the Commission, supplemental appropriation from unreserved General Fund fund balance may be authorized by the Commission for a General Fund purpose reducing the unreserved General Fund fund balance below the 20% minimum provided that the unreserved General Fund fund balance is restored to the minimum in the following year budget. SECTION V — Excess Unreserved General Fund Fund Balance: I. Unreserved General Fund fund balances in excess of the 20% minimum may be appropriated in the budget for capital outlays as defined herein or one time expenditures when required to balance the adopted final budget of a given year. II. During the fiscal period the Commission by a majority vote of the Commission may authorize supplemental appropriations to fund unforeseen expenses from unreserved General Fund fund balance in excess of the 20% minimum. SECTION VI — Effective Date: This Resolution shall take effect immediately upon its adoption. PASSED, APPROVED AND ADOPTED this 11 day of November, 2002. ■ TY 0 ' --- ER RIl\ = � .1S, II, IP A r i , Paul P. ' artyka, M City of Winter Springs, Florida' ArTEST: p dreaerenzo Luaces, City Clerk Cityerf Winter Springs, Florida eioi to form: City Attorney Resolution 2002 -36 Page 2 of 2