Agenda Packets - 1997/03/03 - Laserfiche WebLink

Home Browse Search

r . Item No. /0 Staff Report No. 97—/9f9edS Meeting Date: March 3, 1997 • Type of Business: WK WK: Work Session;PH:Public Hearing; CA: Consent Agenda; CB: Council Business City of Mounds View Staff Report To: Honorable Mayor and members of the City Council 1 From: Bruce Kessel, Finance Director 4_ Item Title/Subject: Proposed consolidation of funds and departments Date of Report: February 27, 1997 At the present time, I believe that the City's accounting system has too many funds and departments which makes the system unduly complicated and confusing. Generally accepted accounting principals for governmental entities states "Only the minimum number of funds consistent with legal and operating requirements should be established, because unnecessary funds result in inflexibility, undue complexity, and inefficient financial administration." As such, I am proposing a number of changes which could be completed prior to closing the records for 1996, budget modifications for 1997, and additional changes which could be completed in 1998. These changes are as follows: SPECIAL REVENUE FUNDS 1110 Franchise Fee Fund. Move activity to the General Fund in 1996. Presently,the only activity in the fund is the collection of the fee and the transfer of the funds to the general fund or other designated funds. The amount collected will be reported as a separate revenue line item and as such, can be monitored as easily as the present format. On the expenditure side,the majority of the funds are used to "buy down"property taxes while other uses have been in lieu of general fund contributions. It is difficult to make a strong argument that a specific general revenue source (HACA, LGA, property taxes, franchise fee, etc.) is funding a specific expenditure,therefore it would simplify accounting and reporting to include the Franchise fee in the general fund and transfer out any amounts that are used to fund any other specific project. We would set up a reserved cash account and a designated fund balance account which would provide for the same level of detail and reporting as having a separate "fund". DEBT SERVICE FUNDS Tax Increment Financing Funds Presently, these funds are accounted for by bond issue and type of activity,resulting in ten funds for our three districts. State statutes require them to be reported for by District. At the present time,there is three types of reporting: 1)the general ledger or financial accounting, which at year end is reported in the audit report(ten funds); 2) the sources and uses of TIF funds in the audit report(required state reporting); and 3) annual TIF reporting on forms prepared by the State Auditors office and/or Dept of Finance and • Revenue. For 1995 and prior, the amounts reported in each of these three sources did not agree resulting in three separate sets of amounts; it is unclear why the reports did not