9.e Resolution No. 05-21-19-06 amend budget transfer to cap imp fund
Staff Report
Date of Meeting: May 21, 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 2018 the audit report shows that unassigned balance in the General Fund is
$1,629,410. 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 budgeted General Fund balance as of 12/31/2019, the amounts in excess of the target
fund balance are $738,853 (50%) and $484,213 (65%).
65% 50%
Projected Unassigned Fund Balance 12/31/2019 $ 1,542,402 $ 1,542,402
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) $ 438,962 $ 693,602
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 previous 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 Audited Balance –
12/31/2018
Budgeted Balance –
12/31/2019
Capital Improvement Fund $648,001 631,096
Park Capital Fund $104,614 $88,195
Equipment Replacement Fund $276,977 $244,977
Local Road Improvement Fund - $1,363,159 1,374,799
The following resolution transfers the excess fund balance over 65% of the 2019 General Fund
expenditures to the Capital Improvement Fund. That allocation can be amended before the
resolution is adopted or the funds can be transferred to other capital funds in a future
resolution.
CITY OF SCANDIA
RESOLUTION NO: 05-21-19-06
RESOLUTION AMENDING THE 2019 GENERAL FUND BUDGET
WHEREAS, the City of Scandia 2019 Budget approved Resolution No. 12-18-18-06 adopting
the 2019 Operating and Capital Budget, and
WHEREAS, the City Council has adopted a policy that the City maintain a fund balance of 50%
to 65% of total annual General Operating Fund expenditures and, if the balance of the unassigned
account rises above 65% at the end of the fiscal year, the amount above 65% shal l either be
budgeted in the next year’s annual operating budget or transferred to a capital improvement fund ,
and
WHEREAS, the City Council in adopting the 2019 budget utilized a portion of the fund
balance to maintain the property tax levy to be collected in 2019 at the same amount as in 2017 and
2018, and
WHEREAS, the 2018 audit report indicates an unassigned balance in the General fund of
$1,629,410 which is 96% of 2019 budgeted General Fund expenditures, and
WHEREAS, based on the 2019 budget the projected unassigned year end fund at 12/31/2019
will be $1,542,402, and
WHEREAS, the target fund balance based on reserving 65% of budgeted expenditures is
$1,103,440.
NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF
SCANDIA, WASHINGTON COUNTY, MINNESOTA, that it should and hereby does amend the 2019
Budget as follows:
Line Item: Description Change:
101-41000-710 Administration & Finance – Residual
Equity transfers
+$438,962
401-48000-39200 Interfund Operating Transfer +438,962
Adopted by the Scandia City Council this 21st day of May, 2019.
________________________________
Christine Maefsky, Mayor
ATTEST:
___________________________________
Brenda Eklund, Deputy Clerk