RES 1991-46 - 00003675r—
RESOLUTION NO. 46 - 1991
RESOLUTION DESIGNATING 14INIININ FUND BALANCES
WHEREAS, major revenue sources of the city's general fund are received in the
latter part of each fiscal year with disbursements occurring relatively evenly
throughout the year; and
WHEREAS, this timing difference between cash receipts and cash disbursements
creates cash flow deficiencies unless sufficient fund balance levels are
designated to meet the working capital needs in the first half of the year; and
WHEREAS, unforeseen reductions in major intergovernmental revenues or
unanticipated expenditure needs remain a recurring threat to cities; and
WHEREAS, establishment of a minimum designation of fund balance for such
contingencies would mitigate the adverse effects of aid reductions or
unanticipated expenditures; and
WHEREAS, anticipated uses of fund balances for planned future obligations should
be disclosed in the annual financial statements by designation of fund balances;
and
WHEREAS, formal establishment of minimum general fund balance levels helps
maintain the city's favorable bond rating which translates into lower borrowing
costs.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Fridley, that
to the extent of available total fund balance, that designations of fund balance
be established at the end of each year in the order set forth as follows:
1. A designation for working capital equalling 50a of the ensuing year's
budgeted local government aid plus the property tax levy (including any
state paid portion);
2. A designation for subsequent years' expenditures for use of fund
balance as set forth in the ensuing year's adopted annual budget;
3. A designation for contingencies equal to 10% of the general fund
budgeted expenditures and other financing uses for the ensuing year;
4. A designation for replacement of fixed assets in an amount not less
than 50 of the General Fund investment in General Fixed Assets as
identified in the Comprehensive Annual Financial Report.
PASSED AND ADOPTED BY THE CITY CUNCIL OF THE CITY OF FRIDLEY THIS 20Th DAY OF
MAY, 1991. V V
WILLIAM J. NEE - YOR
ATTEST:
CLERK :
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