HomeMy WebLinkAbout2.d. Budget EncumbrancesCITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
City Council Work Session Meeting Date March 9, 2005
AGENDA ITEM:
Encumbrance of 2004 Budget Items and
AGENDA SECTION:
General Fund Balance Excess
Discussion
Reallocation
PREPARED BY:
Jeff May, Finance Director
AGED 2
ATTACHMENTS:
Proposed 2004 Encumbrances, General
Fund Balance Worksheet, Proposed
2004 Excess General Fund
APPROVED BY:
Encumbrance General Journal Entry,
Fund Balance Polic
RECOMMENDED ACTION: Discussion only
ACTION:
ISSUE The annual encumbrance of General Fund and CIP Funds items forward
from the prior year to the current year and the redesignation of excess General Fund
balances per the City's Fund Balance Policy.
BACKGROUND This item is on the agenda for Council review staffs proposed
encumbrances and to discuss the fund balance of the General Fund per the City's Fund
Balance Policy Ti ese items will be brought forward to the City Council for formal action at
the March 15 meeting One item not included in the General Fund calculations was the
possible loss of $350,000 in 2005 for the Market Value Homestead Credit (MVHC) Staff felt
that it would be best to reflect the 55% final year -end fund balance without encumbering for
this potential cut We would propose to review this matter sometime later in the year after the
legislative session is completed and we know the cut is a certainty and after we can review
the current year's revenues and expenditures to see if the cut could possibly be absorbed in
the current year's operations If that is not a possibility we would look at redesignation of the
funds being set aside at this time
SUMMARY
Give staff direction to prepare the information for approval at the March 15 meeting
2004 Encumbrance General Journal Entries
101 41110 -01 -225 00 14,185 00 SKB Tree Program
101 -24420 14,185 00
To encumber 2004 SKB funds received and not expended for the $25,000 annual payment
101- 41110 -01 -598 00 198,000 00 Purchase of 3205 143rd Street
101 -24421 198,000 00
To encumber excess 2004 funds for the house located at 3205 143rd Street
101 41810 -01 -393 00 22,000 00 Docuware Equipment
101 -24422 22,000 00
To encumber excess 2004 funds for docuware equipment for Public Works Parks Recreation
101- 41940 01-401 02 10,00000 Siren Repairs
101 -24455 10,000 00
To encumber 2004 Government Buildings funds not expended for future siren repairs
101 43100 -01 -221 00 15,000.00 Equipment Parts /Repairs Contingencies
101 -24406 15,000 00
To encumber 2004 Fleet Maint Dept funds forward to 2005 for unanticipated equipment parts costs
101 43121 -01 -410 02 117,000 00 Sidewalk/ Curb Program
101 -24411 117,000 00
To encumber 2004 Street Marnt Dept (Sidewalk/Curb Program) funds forward to 2005 for future projects
207 49007 -01 -584 00 10,000 00 SCBA Unit Replacements (1991 Units;
207 -24495 10,000 00
207- 490007 01-586 00 5,000 CO Police Field Reporting Software
207 -24496 5,00000
To encumber 2004 Equipment CIP funds forward to 2005 for delayed purchases /projects
GENERAL FUND (FUND 101)
PROJECTED YEAR -END FUND BALANCE WORKSHEET
12131/03 Balance "Designated for Working Capital"
Projected Revenues Thru 12/31/04
Less Projected Expenditures Thru 12/31104
Projected Surplus (Deficit) for Year
Projected "Designated for Working Capital" as of 12/31/04
(Before Final Year -End Adjustments)
Less 2004 Encumbrances
Less Adjustment to Fund Balance to reflect 12/31104
Compensated Absences Balance (Per Fund Balance Policy)
Projected "Designated for Working Capital" as of 12/31/04
(Before Adjustment Per Fund Balance Policy)
Adopted 2005 General Fund Operating Budget
Percentage of Fund Balance to Next Year's Budget
55% of 2005 General Fund Operating Budget
Amount to be Redesignated to CIP Funds
(Per Fund Balance Policy)
4,076,414
8,483,308
7,110,332
1,372,976
5,449,390
376,185
85,314
4,987,891
7,996,100
6238%
4,397,855
590,036
2004 Excess General Fund Encumbrance General Journal Entry
202 49002 -01 -525 00 590,000 00
202 -24434 590,000 00
To encumber 2004 Building CIP Funds forward for future building projects
CITY OF ROSEMOUNT
POLICY TITLE
EFFECTIVE DATE:
POLICY NUMBER
PROPOSED BY
DATE APPROVED
BY COUNCIL
FUND BALANCE POLICY
December 16, 2003
F -7
FINANCE
December 16, 2003 (Amended February 17, 2004)
PURPOSE
The purpose of this policy is to set up guidelines and procedures for dealing with fund
balances of the General Fund, and indirectly, all other operating funds This policy will
allow the City to provide a cushion against unexpected revenue shortfalls, to provide for
working capital to ensure sufficient cash flow to meet the City's needs throughout the
year, and to maintain and improve the City's credit rating
POLICY
The City will attempt to maintain an undesignated General Fund reserve of at
least 55% of the next years operating budget This 55% reserve will be
considered "Designated for Working Capital" and will be the funds that will
enable the City to meet its daily operating needs Fund balances that are
reserved for encumbrances and reserved for compensated absences will be
excluded from the calculation of the 55% as they are designated for a specific
purpose
b Any surplus exceeding 55 as of the completion of the previous year's audit,
will be transferred to one of the three Capital Improvement Program (CiP)
funds (Budding CIP, Street CIP or Equipment CIP) at the discretion of the City
Council by formal action If at all possible, as part of this action, the Council
should reserve these transferred funds for specific capital needs (budding
improvements, street rehabilitation projects, squad cars, fire equipment, etc)
If the Council feels the necessity to use these funds for another purpose,
action will be taken accordingly at the same time that the normal transfer
authorization would take place with a special designation made for those funds
in excess of the 55%
c To avoid interest expense charges that would reduce the amount of funds
available for current operations the City shall not use tax anticipation
borrowing to cover operating expenses If it becomes apparent that the City
may need to do this, the policy shall be adjusted by Council action to raise the
fund balance percentage to a larger figure to prevent this from happening in
the future
d The City will also review and update the schedule of all other fund balances,
reserves, and working capital in all other operating funds of the City and
determine adequacy of those money balances in conjunction with the budgets
set annually