HomeMy WebLinkAbout6.f. Redesignation of General Fund Balance
EXECUTIVE SUMMARY
City Council Meeting Date: March 4, 2020
AGENDA ITEM: Redesignation of General Fund Balance AGENDA SECTION:
Consent
PREPARED BY: Jeff May, Finance Director AGENDA NO. 6.f.
ATTACHMENTS: Resolution APPROVED BY: LJM
RECOMMENDED ACTION: Motion to adopt a Resolution Approving the Transfer of
Excess General Funds to the Building CIP Fund and Approving the Assignment of Excess
General Funds for Future Employee Retirements .
BACKGROUND
Staff has worked with the City’s auditors to close out the 2019 General Fund. As such, it is appropriate to
complete the designation of excess 2019 General Funds as outlined in the City’s Fund Balance Policy.
The City’s fund balance policy was adopted in 2011 and establishes that the City aims to retain a 55% fund
balance to cover an unanticipated shortfall in property tax receipts and other intermittent revenues. This
policy allows the City to pay ongoing expenditures throughout the year, without relying on property tax
payments that are received only twice annually. The 2019 estimated fund balance in excess of 55% of the
2020 General Fund operating budget is calculated to be $219,000.
Staff is recommending using this amount in two parts. The first part would be transferring $100,000 to the
Building CIP Fund to be added to the $500,000 that is already assigned for “Future Indoor Recreational
Opportunities”. This allows the City to have fluid capital available for ongoing costs related to the Indoor
Rec Center project. There is an additional $1 million assigned to the “Municipal Buildings Fund” that could
be accessed for this project as well for land acquisition or a bond write-down.
Staff is recommending that the remaining $119,000 is assigned to a new account that will help offset the
costs that we will be incurring in the next few years for employee retirements. When projecting the status
of our current workforce, we are anticipating a number of retirements of long-tenured staff in the next
several years. These retirements will generate a larger than usual amount of funds expended in the form of
benefit disbursements, so the establishment of this fund balance will minimize impacts of these expenditures.
Staff asserts that it will be a wise use of some of these excess funds to establish an assignment account that
will help future budgets withstand the costs as they are incurred.
RECOMMENDATION
Staff is recommending the adoption of the attached resolution.
CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
RESOLUTION 2020 - 33
A RESOLUTION APPROVING THE TRANSFER OF EXCESS GENERAL FUNDS TO
THE BUILDING CIP FUND AND APPROVING THE ASSIGNMENT OF EXCESS
GENERALFUNDS FOR FUTURE EMPLOYEE RETIREMENTS
WHEREAS, the City Council recognizes the need to transfer funds in excess of 55% of
the 2020 General Fund operating budget as outlined in the City’s Fund Balance Policy
to one of the Capital Improvements Program (CIP) funds to be used for future costs
related to an indoor recreation facility and assign funds for the costs incurred for future
employee retirement costs that the City will incur;
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Rosemount
hereby approves the transfer of $100,000 to the Building CIP Fund and the assignment
of $119,000 in the General Fund for future employee retirement costs that will be
incurred by the City.
ADOPTED this 4th day of March, 2020.
_____________________________
William H. Droste, Mayor
ATTEST:
__________________________
Erin Fasbender, City Clerk