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Home My WebLink About3.a. Fund Balance PolicyY CITY OF ROSEMOUNT EXECUTIVE SUMMARY FOR DISCUSSION. COUNCIL WORKSESSION MEETING DATE: February 11, 2004 The Fund Balance Policy was discussed at the November 12 and December 10 meetings for your initial review and comment. At that time, the policy was generally accepted with the exception of the compensated absences and how it to the overall fund balance percentage. Discussion occurred and it was decided to adopt the policy with the understanding that the compensated` absences would be transferred from the General Fund annually into a separate fund that would handle all compensated absences for all funds. This was done on December 16 After speaking to our auditors in early January when they were here doing preliminary audit work, it was decided that from an accounting standpoint this would only work if we were to set up this fund as a true Internal Service Fund. Doing so would mean that we would have to completely change the way we do our payroll, our budgeting and our financial reporting. From a staffing standpoint, this is not a viable alternative at this time. We can however easily account for the compensated absences by simply designating a portion of our General Fund as encumbered for compensated absences. We had talked about doing this previously and the Council was not comfortable with handling it this way. Unfortunately, I feel that this is the only choice that we have at the present time. It will remove that portion of our General Fund's fund balance from the "undesignated" portion and separate between what is "available" and unavailable" for working capital. I have attached the current policy and the proposed new policy. There is just a change to one sentence and the spirit of the policy remains unchanged. With your direction I will bring this back to the Council at the February 17 meeting for adoption, CITY OF ROSEMOUNT EXECUTIVE SUMMARY FOR DISCUSSION CITY COUNCIL WORK SESSION MEETING DATE: FEBRUARY 11, 2004 AGENDA: KEY FINANCIAL STRATEGIES AGENDA SECTION: DISCUSSION PREPARED BY: JAMIE VERBRUGGE, CITY ADMINISTRATOR AGENEM ATTACHMENTS: NONE APPROVED BY: This meeting represents Session #1 in the KFS process. Staff had previously sent to Council by electronic mail the documents that will be the basis of discussion at this session. Please contact staff if you have not received this information. The Ehlers team of Jim Prosser and Rebecca Kurtz will be present at the meeting and will lead discussion for Session #3. RECOMMENDED ACTION: DISCUSSION OF KEY FINANCIAL STRATEGIES. NO ACTION IS REQUESTED. 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