Laserfiche WebLink
Mayor & City Council <br />June 23, 1993 <br />Page 2 <br />2. Fully fund any unfunded General Fund reserves, <br />i.e. cash flow, contingent upon employee benefits <br />and general contingency designations (see sheet <br />attached). <br />3. Any remaining surplus will be transferred to the <br />General Capital Improvement Fund to provide a <br />source of financing for capital expenditures. It <br />is further understood that $66,068 will be <br />reserved in this fund to offset the possible <br />elimination of Local Government Aid in any <br />subsequent budget year. (This amount represents <br />our 1993 allocation of LGA.) <br />The benefits of this policy are as follows: <br />* By providing a source of funding for non - financed <br />interim construction costs, we reduce the <br />potential for negative fund balances in our audit <br />report. <br />We provide a source of funding without additional <br />taxation for future capital expenditures. <br />We provide a one time source of funding to offset <br />elimination of LGA in any given budget year which <br />will minimize the impact to our budget in that <br />year. <br />By allowing surplus amounts to go to the General <br />Capital Improvement Fund, we are providing an <br />incentive for employees to expend their budgets <br />wisely. By knowing that there will be a source of <br />funding for future capital improvements, each <br />department can help ensure that its capital <br />expenditure needs will be met in the future. <br />* We do not create un- designated fund balances which <br />could be negatively perceived by the State <br />officials. <br />* Future tax levy impacts are lessened by providing <br />a source of funding for capital expenditures that <br />do not previously exist. <br />I have briefly discussed this matter with the Auditors and <br />it is my opinion that they will concur with this <br />recommendation. By adopting this policy retroactive to <br />December 31, 1992, they can make the appropriate transfers <br />as part of the audit adjustments which will then be <br />reflected in the 1992 Annual Financial Report. <br />Should you have any comments or questions regarding this <br />matter, please let me know prior to Wednesday's meeting. <br />JRH:kpv <br />Page 5 <br />