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10 <br />11 <br />12 <br />13 <br />14 <br />15 <br />16 <br />17 <br />18 <br />19 <br />20 <br />21 <br />22 <br />23 <br />24 <br />25 <br />26 <br />27 <br />28 <br />29 <br />30 <br />31 <br />32 <br />33 <br />34 <br />35 <br />36 <br />37 <br />38 <br />39 <br />40 <br />41 <br />42 <br />43 <br />44 <br />45 <br />City Council Regular Meeting Minutes <br />November 22, 2011 <br />Page 5 <br />Motion carried unanimously. <br />VI. GENERAL BUSINESS OF COUNCIL. <br />A. Approve the Fund Balance Policy. <br />Peggy Moeller, CPA, HLB Tautges Redpath, Ltd., presented a summary of the new accounting <br />standards required to be implemented by December 31, 2011, under the Governmental <br />Accounting Standards Board (GASB) #54 related to fund balance reporting in the City's <br />financial statements. She reviewed the current standards which report fund balances as reserved <br />or unreserved and explained that GASB 954 will have five new classifications, namely <br />nonspendable, restricted, committed, assigned, and unassigned. She stated that the nonspendable <br />classification includes items not expected to be converted to cash and which are legally or <br />contractually required to be maintained intact. She also reviewed the restricted fund balance, <br />committed fund balance, assigned fund balance, and unassigned fund balance, providing <br />examples of funds in each of these categories. She discussed the City's General Fund cash flow <br />reserve and noted that the only way the City can show cash flow is in the unassigned fund <br />balance. She recommended that the City authorize a minimum fund balance policy which will <br />enable the City to have a footnote in its financial statements which explains its cash flow needs, <br />why it needs such a large unassigned fund balance in the General Fund, and that the fund balance <br />is necessary even though it is unassigned. She also recommended that the City formalize its cash <br />flow assumptions and adopt a Fund Balance Policy. She then reviewed the Special Revenue <br />Funds under GASB #54 and stated that the City currently has six Special Revenue Funds with <br />one fund affected by the requirements of GASB #54 related to its water filtration and purification <br />fund. She recommended that the City Council adopt a resolution to formalize its commitment of <br />the revenue sources that make up the five remaining special revenue funds and to reclassify its <br />water filtration and purification fund to an enterprise fund. <br />Councilmember Roth stated that the City has kept its fund balance at 30-35% and asked if this <br />amount is adequate to cover the City's expenses. <br />Ms. Moeller replied that she felt the City's fund balance was adequate and added if the fund <br />balance were lowered, the City would have cash flow issues in the first six months of the year <br />due to the timing of real estate tax payments to Minnesota cities. She stated that she felt GASB <br />#54 will have a positive impact on cities and will make it easier for the public to compare cities <br />with one another. <br />Motion by Councilmember Roth, seconded by Councilmember Gray, to approve the Fund <br />Balance Policy as presented. <br />Motion carried unanimously. <br />B. Resolution 11-074; Resolution Committing Specific Revenue Sources in Special <br />Revenue Funds for the City of St. Anthony. <br />