HomeMy WebLinkAbout6.g. Redesignation of General Fund Balance
EXECUTIVE SUMMARY
City Council Meeting Date: March 2, 2021
AGENDA ITEM: Redesignation of General Fund Balance AGENDA SECTION:
Consent
PREPARED BY: Jeff May, Finance Director AGENDA NO. 6.g.
ATTACHMENTS: Resolution APPROVED BY: LJM
RECOMMENDED ACTION: Motion to adopt a Resolution Approving the Transfer of
Excess General Funds to the Equipment CIP Fund and the Assignment of Excess General
Funds for Future Health Insurance Costs .
BACKGROUND
With final bill payment and initial auditing underway, it is now appropriate to complete the designation of
excess 2020 General Funds as outlined in the City’s Fund Balance Policy. The City’s Fund Balance policy
establishes that 55% of the Operating Budget should be held in savings, unless a large project / need
arose, which is not the case this year. The 2020 estimated fund balance in excess of 55% of the 2021
General Fund operating budget is calculated to be $275,000.
Staff recommends using this amount in two parts. The first part would transfer $135,000 to the
Equipment CIP Fund to help offset future funding shortages. Our long-range projections show that
without a large increase in the annual levy for that fund we will have shortages starting in a couple of years
and continuing through the 10-year projections. This transfer would protect against the need for levy
increases within the Equipment CIP.
Staff is also recommending that the remaining $140,000 is assigned to an account that we have for future
health insurance premium costs. Several years ago, we set up an assigned account to protect us in the
years that we experienced large premium costs that were over what our original budgets planned for. As
Council is aware, this year we have experienced one of the largest increases we have ever incurred, and we
will be using a significant portion of the balance in this assigned account. The $140,000 will help replace
the amount that we will be utilizing and would continue to protect the City against future increases. We
also continue to explore changes to our benefits system to ensure that our rates / offerings remain
competitive and affordable.
RECOMMENDATION
Staff recommends the City Council approve the transfer of excess General Funds to the Equipment CIP
Fund and assignment of excess General Funds for future health insurance costs.
CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
RESOLUTION 2021 - xx
A RESOLUTION APPROVING THE TRANSFER OF EXCESS GENERAL FUNDS TO
THE EQUIPMENT CIP FUND AND APPROVING THE ASSIGNMENT OF EXCESS
GENERAL FUNDS FOR FUTURE HEALTH INSURANCE COSTS
WHEREAS, the City Council recognizes the need to transfer funds in excess of 55% of the 2021
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 and assign funds for the costs
incurred for future health insurance costs;
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Rosemount
hereby approves the transfer of $135,000 to the Equipment CIP Fund and the assignment of
$140,000 in the General Fund for future health insurance costs.
ADOPTED this 2nd day of March, 2021.
_____________________________
William H. Droste, Mayor
ATTEST:
__________________________
Erin Fasbender, City Clerk