3.d Update on General Fund year-end fund balance
Staff Report
Date of Meeting: March 6, 2019
To: City Council
From: Neil Soltis, Administrator
Re: Update on the General Fund Year-end Fund balance
Background: The Fund Balance policy adopted by the Council provides for the following:
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 65% 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.
In approving the 2019 budget the certified maximum levy was reduced so that the property tax
levy to be collected in 2019 is the same amount as the previous 3 years. The budgeted 2019
year-end balance reflects the reduced levy amount.
At the end of 2019 the unassigned balance in the General Fund is currently projected to be
approximately $1,587,653. The 2019 expenditure budget for the General Fund is $1,697,600.
Based on the Fund Balance policy the target balance in the General Fund at the end of 2019
would range from $848,800 (50% of $1,697,600) and $1,103,440 (65% of $1,697,600). Using
these amounts and the General Fund balance projected for 12/31/2019, the amounts in excess
of the target fund balance are $738,853 (50%) and $484,213 (65%).
65% 50%
Projected Fund Balance 12/31/2019 $ 1,587,653 $ 1,587,653
2019 Budgeted Expenditures $ 1,697,600 $ 1,697,600
Target Fund Balance (% of Budget) $ 1,103,440 $ 848,800
Excess Fund Balance (Year-end less Target) $ 484,213 $ 738,853
Note that the projected 2019 year-end balance reflects the Council’s decision to reduce the
certified maximum levy and approve a property tax levy at the same amount as the previo us 3
years.
The fund balances in the City’s four (4) Capital funds, which would be the potential recipients of
the excess fund balance are as follows:
Fund Projected Balance –
12/31/2018
Budgeted Balance –
12/31/2019
Capital Improvement Fund $620,134 650,134
Park Capital Fund $104,615 $88,695
Equipment Replacement Fund $276,977 $244,977
Local Road Improvement Fund - $1,362,995 1,374,635
This an update and no action is needed at this time. This information is based on the financial
submitted for audit and will be updated based on the final audited financial information.