Fund Balance Policy Review

Tuesday, March 11th 2014

Christopher M. Quinn, MACC, CPA, CFE, CGFO, CGMAFinance Director

Purpose of Policy

Establish level of “Working Capital” (cash) in operating & other funds

Hedge against sudden decreases in revenue or unexpected expenditures

Provide guidance for increasing/decreasing levels of fund balance

Why Update? Changes in GASB terminology

Net Assets = Net Position

Changes in operations or goals of specific funds

Newly established funds to include in the policy

Existing funds not previously included

Proposed Changes “Net Position” terminology

Tennis Center & Golf Course operations

Establish policy for existing internal services funds

Tennis & Golf FundsAuditor suggested we consider policy changes to reflect actual operations.Option 1 Eliminate minimum level of fund balance required Support as needed from General Fund

Option 2 Incorporate into General Fund as part of our Parks

& Recreation budget, Examples: Pool, Indian Trails Sports Complex

Internal Services Funds Fleet Fund

Minimum level set at total amount of estimated fleet replacements, divided by estimated average life

Consistent with current practice

Estimated Fleet Replacements $15,029,238Average Life (years) 7.25

Minimum Fund Balance $2,072,998

Internal Services Funds Self Insured Health Fund

Minimum level set at 50% of difference between expected cost & maximum cost

Consistent with current practice

Maximum Plan Cost $3,818,896Expected Plan Cost $3,254,774 Difference $564,122

x 50%Minimum Fund Balance $282,061

Next Step

Approve Resolution updating the Fund Balance Policy

Questions?