09-11-07 FPAC Agenda - Laserfiche WebLink

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• APJ EN HILLS MEMORANDUM DATE: September 7, 2007 TO: Financial Planning and Analysis Committee FROM: Sue Iverson, Finance Director` " SUBJECT: Fund Balance Policy Discussions BACKGROUND: One of the priorities that the Council has assigned to this committee is to work on a Fund Balance Policy. At the August 14, 2007 meeting we began these discussions. We looked at the reasons and objectives for such a policy and discussed factors that we wanted to consider in • developing our policy. We also looked at what information we would need in order to make these decisions. DISCUSSION: As a result of the last meeting,we determined that we still have some questions to be answered. One of these was how rating agencies look at these factors and how do they compare with what is done in the private sector. As a way to better help answer those questions and also give the committee a broader prospective I have asked a friend of mine who used to work for Moody's Investor Services to speak at our meeting. He will explain how these policies are looked at by the rating agencies and how they compare to private sector. He will also be able to give you examples of various projects or policies that they used in making determinations in issuing credit ratings. Whether we use bonding,Tax Increment Financing(TIF), other financing tools, or just our own resources; this will be relevant information to answer your questions and also explain how outside agencies, creditors, or the public may look at our policies and structure. Feel free to ask him any questions you may have. Our goal is to establish 1) How financial resources are to be set aside for unreserved fund balances, 2)Determine the appropriate size of unreserved fund balances, and 3) Methods for utilizing unreserved fund balance resources. S