The URL can be used to link to this page

Home My WebLink AboutResolution 2011-48 Actions Re: Energy Independent Loan and Aquatic Center FundsCITY OF PALM DESERT FINANCE DEPARTMENT STAFF REPORT Request: Approve Resolution No. 2011- 48 committing the funds within the Energy Independence Loan and Aquatic Center Fund, and transferring all funds from Fund 241, Golf Course Maintenance, to Fund 441, Golf Course Capital, and transfer funds from Fund 239, Citywide Business License Fund, to Fund 110, General Fund, and assign the use of identified funds for capital, maintenance and operation -related expenditures. Submitted by: Paul S. Gibson, Finance Director Date: June 9, 2011 Contents: Resolution No. 2011- 48 Exhibit A — Components and Definitions of Fund Balance Categories Recommendation By Minute Motion, that the City Council: Approve Resolution No. 2011- 48 committing the funds within the Energy Independence Loan and Aquatic Center Fund, and transferring all funds from Fund 241, Golf Course Maintenance, to Fund 441, Golf Course Capital, and transfer funds from Fund 239, Citywide Business License Fund, to Fund 110, General Fund; and 2. Assign the use of the following funds for capital, maintenance and operational related expenditures: a. Golf Course Maintenance Fund 441: assign for capital improvements, equipment purchasing perimeter maintenance, operational cost of Desert Willow and transfers to the General Fund. b. Capital Project Reserve Fund 400: assign for capital improvements, equipment purchasing, and operational cost of the City. c. Drainage Facilities Fund 420: assign for drainage capital improvements and maintenance. d. Parks and Recreation Facilities Fund 430: assign for parks capital improvements and maintenance. e. Signalization Fund 440: assign for traffic signals capital improvements and maintenance. f. Buildings Fund 450: assign for the capital improvements and maintenance of city owed buildings. g. Library Fund 452: assign for the capital purchases and operations of the Multi -Agency Library. Staff Report Approval of Resolution No. 2011- 48 June 9, 2011 Page 2 of 2 Background In February 2009, the Governmental Accounting Standards Board (GASB) issued Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. Implementation of Statement No. 54 for the City of Palm Desert begins on June 30, 2011. Statement No. 54 redefines the categories and terminology used to describe the components that make up a fund balance. It is solely a housekeeping action and does not change the total amount already provided in any given fund. The new categories and terminology reflect an approach that focuses not on financial resources available for appropriation within a fund, but on the extent to which the City is bound to honor restrictions on the specific purposes for which amounts in the fund can be spent. In order to comply with GASB No. 54 and its requirement to provide administrative clarification of fund balance categories, staff recommends that Council take the actions as described in the above recommendation. In-depth explanation of new fund balance categories is included and attached hereto as Exhibit A. Fiscal Impact Approval of this recommendation will allow the City to comply with the new GASB standard. Submitted by: Paul S. Gibson Director of Finance/City Treasurer Approval: PSG:JLE:nmo CITY C'OUNCILACTION APPKON,r' D DENTED RE(A' I't'I:D OTHER - NJ F 1, i'4i4G.DA AY F',: _6La". ABSI: N _UL ABSTI(',i N: �,L4. I YERIF"A) 13Y.O— , l'S Mry-s— Origi11M o„ File with City Clerk's Office C:\Userslnortega\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.0utlook\VF496YYN\Inv report GASB 54 docx EXHIBIT A Components and Definitions of Fund Balance Categories Prior to the new standard, fund balances were classified into three separate components: Reserved, Designated, and Undesignated. GASB No. 54 requires that the City replace these three components with five new components. The five components and definitions are as followed: 1. Nonspendable Fund Balance: The nonspendable fund balance component represents amounts that cannot be spent because they are either: a) Not in spendable form (e.g. fund balance associated with inventories and prepaid items). It also includes the long-term amount of loans and notes receivable, as well as property acquired for resale. However, if the use of the proceeds from the collection of those receivables or from the sale of those properties is restricted, committed, or assigned, then they should be included in those classifications. b) Legally or contractually required to be maintained intact. Impacted Funds: General Fund. All governmental funds that have inventories, and prepaid items. 2. Restricted Fund Balance: Fund balance should be reported as restricted when constraints placed on the use of amounts are either: a) Externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments: or b) Imposed by law through constitutional provisions or enabling legislation. Impacted Funds: General Fund. Special Revenues Funds: Prop. A Fire Tax, RDA Low-income Housing, Traffic Safety, Gas Tax, Measure A, Housing Mitigation Fee, CDBG, New Construction Tax, Planned Drainage, Park & Recreation Facilities, Traffic Signals, Recycling, Public Safety Police Grants, El Paseo Assessment District, Air Quality Management, Landscape & Lighting District, Child Care Program, Fire Facilities Restoration, RDA Housing Authority. Debt Service Funds: RDA Financing Authority, RDA Debt Service, City Highlands Undergrounding. Capital Project Funds: Art in Public Places, RDA Capital Projects, Assessment District No. 94-3 Merano, Silver Spur Ranch, Highlands Undergrounding, CFD University, Assessment District 29. 3. Committed Fund Balance: Amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government's highest level of decision -making authority should be reported as committed fund balance. Those committed amounts cannot be used for any other purpose unless the government removes or changes the constraint by taking the same type of action (e.g. legislation, resolution, ordinance) it employed to previously commit those amount. Impacted Funds: General Fund, Special Revenues Fund: Energy Independence loan fund and Aquatic Center fund. -1- EXHIBIT A 4. Assigned Fund Balance: Amounts that are constrained by the government's intent to be used for specific purposes, but are neither restricted nor committed, should be reported as assigned fund balance. Intent should be expressed by (a) the governing body itself or (b) a body or official to which the governing body had delegated the authority to assign amounts to be used for specific purposes. a) All remaining amounts (except for negative balance) that are reported in governmental funds, other than the general fund, that are not classified as nonspendable and are neither restricted nor committed. b) Amounts in the general fund that are intended to be used for specific purpose in accordance with the provisions above. Impacted Funds: General Fund. Capital Project Funds: Golf Course Capital, Capital Project Reserve, Drainage Facilities, Park & Recreation Facilities, Signalization, Buildings, Library. 5. Unassigned Fund Balance: Unassigned fund balance is the remaining classification for the general fund. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, limited, or assigned to specific purposes within the general fund. The general should be the only fund that reports a positive unassigned fund balance amount. Impacted Funds: General Fund. All other funds with a negative unassigned fund balance. -2- RESOLUTION NO. 2011- 48 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA COMMITTING THE FUNDS WITHIN THE ENERGY INDEPENDENCE LOAN AND AQUATIC CENTER FUND, AND TRANSFERRING ALL FUNDS FROM FUND 241, GOLF COURSE MAINTENANCE, TO FUND 441, GOLF COURSE CAPITAL, AND TRANSFERRING ALL FUNDS FROM FUND 239, CITYWIDE BUSINESS LICENSE FUND, TO FUND 110, GENERAL FUND AS OF JUNE 30, 2011 WHEREAS, the Governmental Accounting Standards Board (GASB) has issued Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions which require compliance by June 30, 2011; and WHEREAS, Statement No. 54 redefines the categories and terminology used to describe the components that make up a fund balance and does not alter fund balances. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Palm Desert, California, that the following actions are hereby taken as follows: 1. Commit the funds within the Energy Independence Loan and Aquatic Center Fund; and 2. Transfer all funds from Fund 241, Golf Course Maintenance to Fund 441, Golf Course Capital; and from Fund 239, Citywide Business License to Fund 110, General Fund. PASSED, APPROVED AND ADOPTED by the City Council of the City of Palm Desert, California, at its regular meeting held on the 9`h of June, 2011, by the following vote to wit: AYES: NOES: ABSENT: ABSTAIN: JEAN M. BENSON, MAYOR ATTEST: RACHELLE D. KLASSEN, CITY CLERK CITY OF PALM DESERT, CALIFORNIA