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HomeMy WebLinkAbout6.d. Redesignation of General Fund Balance EXECUTIVE SUMMARY City Council Meeting Date: March 5, 2019 AGENDA ITEM: Redesignation of General Fund Balance AGENDA SECTION: Consent PREPARED BY: Jeff May, Finance Director AGENDA NO. 6.d. ATTACHMENTS: Resolution, Fund Balance Worksheets APPROVED BY: LJM RECOMMENDED ACTION: Motion to adopt a Resolution Approving the Transfer of Excess General Funds to the Insurance Fund. ISSUE The annual redesignation of excess General Fund balances per the City’s Fund Balance Policy. BACKGROUND The City Council is asked to complete the designation of excess 2018 General Funds as outlined in the City’s Fund Balance Policy. When the Fund Balance Policy was updated in 2011 the policy was changed to allow the excess fund balance to dip to 45% of the next year’s budget if the City Council had a special project / need that arose. That is not necessary at this time. As such, the 2018 fund balance in excess of 55% of the 2019 General Fund operating budget is calculated to be $203,000. This amount is recommended to be transferred to the Insurance Fund to help replenish this fund for the large amount of deductibles that have been paid over the last 5 years since we switched to a higher deductible plan for our general liability insurance. The Insurance Fund has seen a levy increase the last few years to keep up with the rising premium costs, but the deductible payments have been mostly shouldered by the fund balance that had built up in that fund over a long period of time. With the switch to the higher deductible plan ($100,000 / $200,000) that fund balance has been completely eliminated and we currently have a small deficit in that fund. The hope is that with this infusion of funds we may be able to minimize future levy increases for this fund for the next few years. RECOMMENDATION Staff is recommending the adoption of the attached resolution. CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA RESOLUTION 2019 - A RESOLUTION APPROVING THE TRANSFER OF EXCESS GENERAL FUNDS TO THE INSURANCE FUND WHEREAS, the City Council recognizes the need to transfer funds in excess of 55% of the 2019 General Fund operating budget as outlined in the City’s Fund Balance Policy to the Insurance Fund; NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Rosemount hereby approves the transfer of $203,000 to the Insurance Fund. ADOPTED this 5th day of March, 2019. _____________________________ William H. Droste, Mayor ATTEST: __________________________ Erin Fasbender, City Clerk GENERAL FUND (FUND 101) PROJECTED YEAR-END FUND BALANCE WORKSHEET (After Assignments and City Year-End Adjustments) 12/31/17 Balance - "Designated for Working Capital":7,333,742 Projected Revenues (and Transfers ) Thru 12/31/18 (As of 2/22/19):13,543,104 Less Projected Expenditures (and Transfers) Thru 12/31/18 (As of 2/22/19):13,095,849 --------------------- Projected Surplus(Deficit) for Year:447,255 --------------------- Projected "Designated for Working Capital" as of 12/31/18:7,780,997 (Before Final Year-End Adjustments) Plus Adjustment to Fund Balance to reflect 12/31/18 Compensated Absences Balance (Per Fund Balance Policy): (40,938) (-$39,702 for 2013; -$9,919 for 2014; +$179,675 for 2015; -$82,819 for 2016 & +$437 for 2017) Plus Charter 4th Quarter Franchise Fees (Estimated) (Paid 2/15/19)0 --------------------- Projected "Designated for Working Capital" as of 12/31/18:7,740,058 (Before Adjustment Per Fund Balance Policy) 2019 General Fund Operating Budget:13,702,700 Percentage of Fund Balance to Next Year's Budget:56.49% =========== 55% of 2019 General Fund Operating Budget:7,536,485 --------------------- Amount to be Redesignated:203,573 (Per Fund Balance Policy)===========