10-09-07 FPAC Agenda - Laserfiche WebLink

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-AREN HILLS • October. Noah is from Virginia; his wife is originally from Roseville. V. FUND BALANCE POLICY DISCUSSION Finance Director Iverson discussed priorities with City Council. hey decided to start with general fund balance policy. We gathered fund balance policies from surrounding cities and reviewed auditing requirements. The plan is to start small and work towards improving the policy. We will discuss Capital improvement fund and others-at a later date. Keep it separate from the general fund balance policy. Finance Director Iverson drafted a policy to be discussed and built on. This ;draft s> a hybrid of the City of Roseville, City of Shoreview and parts of the City of Cloquet Guidelines are from the GFOA and from the auditors. If complete we can present this policy to the Council on the 19th. Policies can be amended once adoption. Most of our revenue is from our tax levy and a little from other sources. No local govern ent Did; our main source of aid is the market value homestead credit. In 2t 0 we toad:total,revenue or $3.3 million; of that $2.4 million is general property taxes, $122000 is inter-governmental revenue. The rest 4111 consists of fines and forfeitures, franchise fees and very little form other sources. Do we have reserves in the enterprise funds? There is...a, sufficient amount for normal cash flow and infrastructure replacement Rate studies are conducted each year to make changes accordingly Monthly revenue goes to each fund except for the recycling fund. According to recording standards we!rtustshow that we have funds set a side to fully compensate an employee if their employment,is terminated. Our Enterprise fund is full accrual To give more flexibility we;could provide a range for the fund balance. At the end of 2006 we were at 53% Are expenditures level throughout the year? No, as invoices vary €rom month to month; some invoices are only paid twice per year for a full year contract Ourincome revenue is based off of the two tax payments. Other cities may depend en othp.r revenues throughout the year. Our risk is within our major businesses taxes•during.the year. Are contingencies built into the budget? This year we are trying to, last yearthere was a little, although it was designated. There haven't been many budgeted contingencies. Some cities budget 10% contingency each year based off the previous years budget. They take previous years expenditures for the levy, less any debt levy and less any transfers. This amount was used as well as a separate contingency fund; both are budgeted each year. End of the year requirements io are establish to decide where those funds will go. Budget contingencies cannot be City of Arden Hills