HomeMy WebLinkAbout[04f] Equity Classifications
Council Agenda Item 4f
MEETING DATE: March 16, 2020
AGENDA ITEM: Equity Classifications –for Financial Year 2019
SUBMITTED BY: Finance
BOARD/COMMISSION/COMMITTEE RECOMMENDATION: None
PREVIOUS COUNCIL ACTION: The City Council adopted the fund balance policy \[revised\] on
12-15-11. Council also adopted Resolution 2011-024 committing specific revenue sources as required
under GASB 54.
BACKGROUND INFORMATION: The revised fund balance policy on 10-23-14 and Resolution
2011-024 dictate the classification of fund balance based on internal and external factors, and GASB 54.
The following classifications are provided for the governmental funds. The actual break-outs are
attached.
Nonspendable fund balances are for items not expected to be converted to cash. For 2019 the City had
prepaid expenses for the January life insurance premiums. By nature of the items, the amounts are set
aside as a prepaid asset.
Restricted fund balances are for items externally restricting the use of the funds. The restrictions include
unspent bond proceeds, TIF, park dedication, PEG access, charitable gambling and revolving loan
proceeds. State Statutes, grantors and creditors dictate the use of the funds with the City accepting the
restrictions.
Committed fund balances are amounts constrained for a specific purpose by Council resolution. The City
Council committed the remaining balance of the EDA for economic development functions.
Assigned fund balances are unspent non-general fund amounts not classified as nonspendable, restricted
or committed. The restraint of the use is self-imposed as approved by City Council and demonstrate a
specific purpose. The amounts may also include a portion of the general fund constrained in its use as
determined by the City Council.
Unassigned fund balance is for the general fund and residual deficit fund balances in other governmental
funds not classified in any other category. Unassigned amounts are available for any purpose. Council
established a stabilization arrangement for working capital of 4-6 months in the general fund. For year-
ended 2019, the calculated working capital for the general fund is approximately 5 months of the 2020
expenditures.
The Enterprise Funds have four classifications to the equity. The classifications are contributed from
other governmental funds, contributed from developers, designed for unspent capital outlay and
undesignated. The attached spreadsheet shows the allocation of the enterprise equity.
The amounts presented for unassigned are preliminary. A couple audit entries may come up with the
audit to consider recording. Working capital is not expected to change.
BUDGET/FISCAL IMPACT: Restrictions of the use of funds only.
ATTACHMENTS: Request for Council Action – Equity Classifications
Equity 2019 – GASB 54
Equity 2019 – Working Capital
Equity 2019 - Enterprise
REQUESTED COUNCIL ACTION: Approve the equity designations as presented.