11-801 Adopting City of Meridian Fund Balance PolicyJ
CITY OF MERIDIAN RESOLUTION N0.
Y THE CITY COUNCIL: BIRD, HOAGLUN, ROUNTREE, ZAREMBA
B
A RESOLUTION ADOPTING THE FUND BALANCE POLICY FOR THE CITY
OF MERIDIAN; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS on Au ust 23, 201 1, the City Council of Meridian received a report from
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the Finance De artment regarding the draft City of Meridian Fund Balance Policy; and
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WHEREAS, after receiving said report, the City Council directed that the City of
Meridian Fund Balance Policy be brought forward in Resolution form to establish the Fund
Balance Policy for the City of Meridian.
NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY
COUNCIL OF THE CITY OF MERIDIAN CITY, IDAHO:
Section 1. That the City of Meridian Fund Balance Policy be adopted, a copy of which is
attached to this Resolution and incorporated herein by this reference.
Section 2. That this Resolution shall be in full force and effect immediately upon its
adoption and approval.
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ADOPTED by the City Council of City of Meridian, Idaho t y
2011.
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ED b the Ma or of the Cit of Meridian, Idaho, this ~ day of
APPROV y y y
2011.
APPROVED:
TAMMY WEERD, MAYOR
ATTEST:
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RESOLUTION FOR CITY OF MERIDIAN FUND BALANCE POLICY -1 of 1
CITY of MERIDIAN
FUND BALANCE POLICY
''Y`~ Department ofFinance -August 2011
Pur,~ose
The purpose of this policy is to establish guidelines as er GASB 54 to '
p categorize the City governmental
fund balances from the current 3 categories to the new 5 cate ories. These f '
, g and balances are essential to
maintain adequate levels to provide financial stability from unforeseen revenue fluctuati
ons,
unanticipated expenditures and ensure the City has sufficient cash flows.
Fund Balance Designations
l , NONSPENDABLE Fund Balance
This fund balance is for those assets that are non cash or le '
gaily or contractually required to be
maintained intact. Such as inventory, long term loans receivable, ro ert held for sale endow
p p y ment
or permanent fund principal and prepaid items.
2. RESTRICTED Fund Balance
This fund balance is constrained for a s ecific ur ose and 1
p p p egally restricted by external parties, such
as State or Federal agencies.
3. COMMITTED Fund Balance
This fund balance constraint is self im osed b the Cit Council. F '
p y y ormal action is required by City
~~ Council to commit funds and must occur prior to year end; however, the actual dollar amoun
be t may
determined in the subsequent period.
4, ASSIGNED Fund Balance
This fund balance is intended for a s ecific u ose and the au " '
p p rp thorny to assign is delegated to the
City Chief Financial Officer. Formal action is not necessar to im ose remove or modif
Y p ~ y an
Assigned Fund Balance.
5. UNASSIGNED Fund Balance
This is the remaining fund balance that has no internal or exte '
real restr~ctlons. Unassigned amounts
are available for any purpose, Although there is generally no sets endin lan there is a need to
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maintain a certain funding level. The unassigned fund balance is commonl used for emer enc
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expenditures or reserves needed to ensure cash flow.
Minimum Fund Balance
GASB refers to a minimum fund balance as a Stabilization Arran ement. The Cit has estab '
, g y lashed the
practice of reserving 4 months of the current year budget of personnel and ear to ear o eratin
Y y p g costs as
the amount needed to reserve to ensure we have sufficient cash flow to maintain services
between
property tax receipts. This reserve will be in the unassigned fund balance unless the Cit Chief
Financial Officer desi n y
gates otherwise.
,~. Spending Fund Balance
GASB recommends the restricted, committed, assigned are s ent first followed b the una '
. p y ssigned. The
City will follow this rule unless Council approves to do otherwise thru the bud et rocess r '
g p o the capital
improvement plan.