5.j) Staff Report-Local Road Improvement FundSCANDIA.
Staff Report
Date of Meeting: January 21, 2014
To: City Council
From: Kristina Handt, City Administrator
Re: Local Road Improvement Fund
Background:
As discussed during the budget meetings last year, the 2014 budget approved by the Council last month
include a new fund beginning this year -the Local Road Improvement Fund(LRIF). In order to properly
document the creation of the fund, staff has provided a resolution in your packet.
Issue:
Should the Council create the Local Road Improvement Fund and transfer $200,000?
Proposal Details:
The resolution in your packet makes reference to the fund balance policy adopted by the Council in 2012.
Per that policy, the Council may appropriate fund balances. Additionally, the policy and GASB 54
identify five different types of fund balance categories. Staff is recommending the LRIF be categorized
as committed fund balance. This is the category that constrains funds for a specific purpose by a
government using its highest level of decision-making authority.
Lastly, the resolution moves $200,000 from the unassigned fund balance of the General Fund to the LRIF,
as provided in the 2014 budget. Following the amendments to the fund balance policy in 2012,
provisions were added that allowed any amount in the General Fund unassigned balance greater than 50%
of the General Fund operating expenditures to be transferred to a capital improvement fund or applied to
the following year's operating costs.
Fiscal Impact;
The unassigned fund balance of the General Fund was $1,117,870 as of 12/31/12 or 61% of 2012 General
Fund operating expenses (excluding transfers). This means there is an additional $198,371 above the
50% of General Fund operating expenses (excluding transfers) planned for 2014. Staff is confident the
2013 fund balance will increase by at least $2,000 in 2013 given that a number of expenses are projected
to come in lower than budget (i.e. legal fees, fire dept personnel, etc).
Options:
1) Approve Resolution 1-21-14-04
2) Amend and then Approve Resolution 1-21-14-04
3) Do not Approve Resolution 1-21-14-04
Recommendation:
Option 1.