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5.j Resolution 10-16-18-05 Amending the Fund Balance Policy CITY OF SCANDIA RESOLUTION NO. 10-16-18-05 A RESOLUTION AMENDING THE FUND BALANCE POLICIES AS REQUIRED BY GASB 54 WHEREAS, the Governmental Accounting Standards Board ("GASB") has adopted Statement 54 ("GASB 54"), a new standard for governmental fund balance reporting and governmental fund type definitions that became effective in governmental fiscal years starting after June 15, 2010, and WHEREAS, the City Council passed Resolution 11-20-12-01 approving a fund balance policy, assigning fund balances and establishing a fund balance goal, WHEREAS, the City Council has determined that the fund balance goal is not sufficient to ensure the funds will be available for operations since the first half of property tax revenues are not disbursed until July of each year. NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCANDIA, WASHINGTON COUNTY, MINNESOTA, that it should and hereby does adopt the attached “Fund Balance Policy”, said policy taking precedence over any other policy that may have been established in the past that may be in conflict. Adopted by the Scandia City Council this 16th day of October, 2018. ________________________________ Christine Maefsky, Mayor ATTEST: ___________________________________ Neil Soltis, Administrator/Clerk Resolution No.: 10-16-18-05 Page 2 of 2 FUND BALANCE POLICY Fund balances measure the net financial resources available to finance expenditures of future periods. The City’s fund balances will be maintained to provide the city with sufficient working capital and a margin of safety to address emergencies without borrowing. The fund balances may only be appropriated by approval of the City Council. In circumstances where an expenditure is to be made for a purpose for which amounts are available in multiple fund balance classifications, the order in which resources will be expended is as follows: restricted fund balance, followed by committed fund balance, assigned fund balance, and lastly, unassigned fund balance. ASSIGNMENT OF FUND BALANCES:  Capital Improvement Fund: The existing fund balance is assigned to various infrastructure improvement projects within the City, except those projects paid from business type activities (enterprise fund).  Park Improvement Fund: The existing fund balance is assigned to acquisition and development of city parks.  Equipment Replacement Fund: The existing fund balance is assigned to purchasing motor vehicles and heavy machinery.  Local Road Improvement Fund: The existing fund balance is assigned for road infrastructure project. FUND BALANCE GOAL General Fund: Maintain fund balance of 50% to 65% of total annual General Operating Fund expenditures. If the balance of the unassigned account rises above 65% at the end of the fiscal year, the amount above 50% shall either be budgeted in the next year’s annual operating budget or transferred to a capital improvement fund. The City Administrator shall annually report the projected unassigned fund balance of the General Fund when the annual budget for the forthcoming year is presented to the City Council.