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Home My WebLink AboutDocumentation_Regular_Tab 07_08/08/2013 �> \; �"r�� Tabled from 7/11/13 � � �;° ��,� ��°�� `�� t��.. � . 7. vt�.�� t�►vc�o� t��i��: I�ieefir�c� [��te: Nleeting TYpee F��gular� July 11, ?.013 --- �o�y�e��c ��:rnd�: Yes R€;��9��ec�f� Y}: 22-13 - -- C3�•i�iii�i:or�c� M��t6�r�f��, 6�i��r��a�c> -- - -- �. ��t.1��1A I`�'�Il� `I�I`��l=.�: (Worcling �orm fh� �lJE3JfnL I� line oi your sf�ff r�pnrt) �dc�pt AmPndmenis to f==und l3�lar�ce f'olicy f�e �over�nmenfal tYund� ir� �cc�rdarlc� with GASE3 5fatement No. jli. 3a B�11��`i' � F'If�I If 0 l��;ca�u.�i�� Ncs9 1�/� �ii�caL��: ��i' i:@�so3 ii;eraa N//� --- -- ��i•re�� Ladgeted �1�r��9�y�: �av�ifat�l�: ��a�gnt F�c��i��e�g ��t�r iteb�: ��; 0 N/n ��dg�f 1 �•�rnsfieb• Rec�ui��e�: fVo A��r�o�ari�fie ��nd �3ala��e: �: �i�r,��b�:, .;rx i;��;,��. N/A ��. �.X� CIJ'C'IV� �111�If�i,�f3Y �F fVi�JC)R ISSU��: (This is a snap shot description of the agend i tem) �C�n�3$ �aiTBiTief1tt:�i1'1�f1S:� '�� I'1.�61E� �21Ie��iG(: ��DIiCy i�f'1CI If1l�9IE:6�(iP,il� �� I� J� -- �. A�'F'R�\d�\I_.�: — ----- — -- ; t/ � � i ; � � �,� I ;'/ Gje�t. i�ead:.-- __� ----- __.. _ _._____ -, �°md1�r��;c i�ii•c��:c��•:. �;'!:.��;��.__��_�______-�---_ --- , ! l��o�•r�Py: (f�i� lee��l �aaf��w�;ier�cy) _ -- T____ -- � Yes �� No �] �I \/ill�q� i1ll��c�e�°: ._. _.__.__ ____ _--_,_ _ _ a �U�3NI�"� FOR CC��N�B�� C�I�C��J��I��I: ��] o �f'�'Ft(�v� IT�i�J. (___) 0 1:.�1�NY Il°�f111� [� 1 �.� ��"1�✓��9�l��CJl�� l F r'i , � �t=. I� .'� �'�� r�,� , ��r', ��I� �E4'�'�;< ��T�.� �, �013 �'�a I�i[��I�I:JC, 22a CU[7��4 `i7II�I,AGI; It/�r�th�AG:�':=�. I+120I��e ��AI�Ii�T �+t)I��"I��;, 7+'TT+Ir�I�1C�, DIIt�;C"�'O�2 I$�: R��,�J`� Y�Iad �2--13 t,i�/IE��d� "�"I-�� IIRI2�IV'�"" �+U1�7I� Y3AI,AiVC.� 1'�L,�C�"Y �� discusseci, �itar,he�i is � co��y oi'�esolt�tion 22•�13 �,_r�lei�c�i�i� 9:�1e �ill�ge of Tec�uest�'3 t��uncl ��?lance I�olicy ivitl� t1�E; fol7nwing ctz�n��;s ��s cietailecl irz Exhi�it `�'. �'The t�i�iimurn iit��si�necl li�iicl t»l�ilce 1��s ��een ch��ri��cl �°om i��o rnontha of o��er��tiilg �,;��1�e;�ciitu�•�s iza ilze gene�•a1 fu�icl �to ori� rr�o�l�l�i o This cl1�n�;e alTows ihe �i11��e to �.rse a�;re�:�er ��nount of utlassigr�ed fiinci baianc;e to �cc�mplish k�t�c�geted needs. �'The classificatiori of "I�is�stez° Reserve" h��s t�een �han£7ec� f�•oin �'o�ramitted I'iuld I�al�-nce to �',ssi�;riecl I�t�ncl I3alance o Tl�irs �ssipntneilt is ofi:en d�sei�ssecl di�;i�1� ��ci��eti�� ancl rhis chang� a.11�ws t11e �Iill��e to �ei ttle �moii�lt in �his a�sipn�rnen� wit�iou� rec�ui��ixig a resolutioti o�� oj•clint�tlE;e �;h?n�e. RESOLUTION NO 22-13 A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF TEQUESTA, FLORIDA, AMMENDING THE CURRENT FUND BALANCE POLICY FOR THE VILLAGE OF TEQUESTA; PROVIDING AN EFFECTNE DATE; AND FOR OTHER PURPOSES. WHEREAS, the Village Council of the Village of Tequesta, Florida, desires to amend the current Fund Balance Policy consistent with the Governmental Accaunting Standards Board Statement No. 54, Fund Balance Reporting and' Governmental Fund Type Definitions ; and WHEREAS, the current policy has been amended to set the minimum unassigned fund balance at one month of operating expenditures in the general fund; and 'WHEREAS, the current policy has been amended to reclassify "Disaster Reserve" from a "Conunitted " to Assigned"; and WHEREAS, such a policy has been prepared and a copy thereof is attached hereto NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF THE VILLAGE OF TEQUESTA, PALM BEACH COUNTY, FLORIDA, AS FOLLOWS: Sectlon l: The Village Council of the Village of Tequesta, Florida, hereby ammends the "Village of Tequesta Fund Balance Palicy", attached hereto as "E�ibit A", and hereby directs the Village Manager to irnplement said policy. Section 2: All resalutions or parts of resolutions in canflict herewith shall be and hereby are repealed. Section 3: Ttus Resolution sha11 take effect immediately upon passage. VILLAGE OF TEQUESTA, FLORIDA FUND BALANCE POLICY EXHIBIT A A. PIJRPOSE The Village hereby estabiishes and will maintain Fund Balance,, as defined herein, in accordance with Governmental Accaunting and Financial Standards Board Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. Fund Balance sha11 be cornposed of non-spendable, restricted, committed, assigned and unassigned amounts. A Fund Baiance Policy is adopted in order to secure and maintain investment- grade credit ratings, meet seasonal shortfalls in cash flow, and reduce susceptibility to emergency or unanticipated expenditures and/ar revenue shortfalls. Fund balance information is used to identify the available resources to repay long-term debt, reduce property taxes, add new governmental programs, expand existing ones, or enhance the fmancial position of the Ci�y, in accordance with policies established by the Village Council. 'This Fund Balance Policy establishes: a) Fund balance policy for the general fund; b) Reservations of fund balance for the general fund; c) The method of budgeting the amount of estimated unrestricted fund balance (also known as estimated beginning fund balance) available for appropriation during the annual budget adoption process (prior to the actual, audited fund balance being known) and what actions may need to be taken if the actual fund balance is significantly different than the budgeted fund balance; and d) Estabiish the spending order of fund balances. B. FUND BALANCE CLASSIFICATIONS Fund Balance - As defined by the Governmental Accounting, Auditing and Financial Reporting of the Government Finance Officers Association, fund balance is "The difference between assets and liabilities reported in a governmental fund." The following are the GASB 54 Classifications of Fund Balance3 NON-SPENDABLE FUND BALANCE Non-Spendable Fand Balance — Amounts that are (a) not in spendable form or (b) Iegally or contractually required to be maintained intact. Non-spendabie fund balance is established to report items that are not expected to be canverted to cash such as inventory and prepaid items; items not currently in cash form such as the long-term amount of loans and notes receivable as well as property acquired for resale; and, items legally or contractually required to be maintained intact such as the corpus (or principal) of a permanent fund. RESTRICTED FUND BALANCE Restricted Fund Balance — Amounts that can be spent only for specific purposes stipulated by (a) external resource providers such as creditors (by debt covenants), grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation. Restricted fund balance includes amounts constrained for a specific purpose changed anly with consent of the outside party and legally enforceable. Such restrictions typically are imposed by parties altogether outside the government such as; a. Creditors (e.g., through debt covenants); b. Grantors; c. Contributors; and d. Other governments (e.g., through laws and regulations) COMMITTED FUND BALANCE Committed Fund Balance — Represents resources whose use is constrained by limitations that the government irnposes upon itself at its highest level of decision making and that remain binding unless removed in the same manner. The underlying action that imposed the limitation would need to occur no later than the close of the reporting period. Commitment of fund balance may be made for such purposes including, but not limited to, a) major maintenance and repair projects; b) meeting future obligations resulting from a natural disaster; c) accumulating resources pursuant to stabilization arrangements; d) establishing reserves for disasters; and/or e) for setting aside amounts for specific projects. Commitment of fiind balance may be made from time-to time by formal action of the Village Council limiting use of resaurces for anly the specified purposes stipulated in the action. Commitments may be changed or lifted only by the Village Cou.ncil taking the same formal action that imposed the constraint. The farmal action must occur prior to the end of the reporting period. The amount which will be subject to the constraint may be determined in the subsequent period. T'he Village Council hereby establishes the foliowing committed fund balance reserves in the General Fund: b) Insurance Deductible Reserve — The insurance deductible reserve fund baiance is committed by the Village Council as set forth in the annual budget (and any amendments thereto) to ensure coverage of the City's insurance deductible on its insured properties and equipment. ASSIGNED FUND BALANCE Assigned Fund Balance — Comprised of amounts intended to be used for specific purposes that are neither restricted not committed. Intent can be expressed by the Village Council or delegate(s}. The term assigned fund balance is used to describe the portion of fund balance that reflects a government's intended use of resources. Such intent has tv be established by either the Village Council or by a body or official(s) to which the Village Councit delegates the authority. For this purposes the Village Council delegates this authority to the Village Manager and/or the Finance Director. Assigned fund balance can be used to eliminate a projected budgetary deficit in the subsequent year's budget, not to exceed the excess of expected expenditures over expected revenues. Since a government cannot assign resources that it does not have, the amount reported as assigned fund balance should not exceed totai fund balance less its non-spenda.ble, restricted, and committed camponents. The Village hereby establishes the follawing assigned fund balance reserves in the Genexal Fu.nd: a} Assignment to Subsequent Year's Budget — The subsequent year's budget fund balance reserve is assigned by Village management as se� forth in the annual budget (and any amendments thereto) to appropriate a portion of existing unassigned fund balance to eliminate a projected deficit in the subsequent year's budget in an amount no greater than the projected excess of expected expenditures over expected revenues. b) Disaster Reserve Y The disaster reserve fund balance is conunitted by the Viltage Council as set forth in the annual budget (and any amendrnents thereto} to ensure the mainteaance of services to the public during disaster situations such as, but not limited to, hurricanes. UNASSIGNED FUND BALANCE Unassigned Fund Balance — Unassigned fund balance is the residua.l fund balance classification for the general fund af'ter deducting non-spendable, restricted, committed and assigned fund balance. If, after the annual audit, prior committed or assigned fund balance causes the unassigned fund balance to fall below an amount equal to one month of operating expenditures, the Village Manager and/or the Finance Director will so advise Village Council in order for the necessary action to be taken to restore the unassigned fund balance to an amount equal ta one manth of General Fund operating expenditures. The Village Manager and/or the Finance Director will prepare and submit a plan for committed andlor assigned fund balance reduction, expenditure reductions andlor revenue increases to Village Council. The Village shall take action necessary to restore the unassigned fund balance to acceptable Ievels within three years. C. BUDGETING APPROPRIATI�N OF UNRESTRICTED FUND BALANCE The actual amount of unrestricted fund balance (total of commzited fund balance, assigned fund badance and unassigned fund balance) is not known until the compietion of the annual audit which takes place between three to six months after the end of the fiscal year being audited. However, an estimate of unrestrictetl fund balance {also called estirrcated beginning fund balanee) must be made during the annual budget adoption process �July through September) which is prior to the end of the fiscal year, September 30� . ESTIMATED BEGINNING FUND BALANCE. In order to achieve the most accurate estimate possible, the Village Manager or Finance Director shall project both Sources of Funds (revenues, prior years unrestricted fund balances carried farward and other financing sources) and Uses of Funds (operating and non-operating expenditures), including accruals, through September 30�` of the then current fiscal year. These projections will be shown in a separate colutnn entitled "Estimated Actual". The difference between the estimated actual sources of funds and estimated actual uses of funds is the calculated estimated beginning fund 6alance for the subsequent fiscal year ESTIMATED ENDING FUND BALANCE Far the year being budgeted, a calculation of estimated ending fund balance sha11 also be made. This calculation sha11 be the difference between the budgeted sources of fiands and the budgeted �zses of funds as described above. If, after the a.nnual audit, the actuai general fund unassigned fund halance is greater than one month of operating expenditures in the general fund, the excess may be used in one or a combination of the following ways: a} Left in the general fund to earn interest and roll forward into the subsequent year's beginning fund balance; b) Appropriated by resolution of Village Council for a one-time expenditure or opportunity that does not increase recurring operating costs; c) Committed to establish or increase a formal sta.bilization arrangement ox reserve (including but not limited to economic stabilizatian, contingency resezves or disaster reserves); or d) Appropriated far start-up expenditures of new programs undertaken at mid-year. D. �PENDING ORDER OF FUND BALANCES This policy considers restricted amounts to be spent before unrestricted fund balance when an expenditure is incurred for purposes for which both restricted and unrestricted {committed, assigned and unassigned) amounts are available. Similazly, �vithin unrestricted fund baiance, committed, assigned then unassigned amounts, in that order, will be spent when an expenditure is incurred for a purpose for which amount in any of those unrestricted fund balance classifications could be used. E. ANNUAL REVIEW AND DETERMINATIUN OF FUND BALANCE POLICY Compliance with the provisions of this policy sha11 be reviewed as a part of the annual budget adr�ption process, and the amounts of restricted, cammitted, assigned, nan-spendable and the minixnum level of unassigned fund balance shall be deterrnined during this process. F. C LASSIFICATION OF FUND BAL ANCES AND ADDITIONAL INFORMATTON. REQUIREMENTS/RESPONSIBILITIES The •Finance Director is authorized to evaluate existing fund balance classifications (designations, reserves and unreservedlundesignated) and reclassify them in accordance with GASB Statement 54, for implementation effective the fiscal year ending September 30, 201 l. It will be the responsibility of the Finance Director to keep this policy current. G. EFFECTIVE DATE This Policy shali take effect immediately upon adoption and will be applied beginning with the preparation of the Village's September 30, 2011 Comprehensive Annuai Financial Report and adoption of the Village's Fiscal Year 2011-12 Budget. Original Issue Date: Approved: