HomeMy WebLinkAboutAGENDA REPORT 2021 0707 CCSA REG ITEM 10HCITY OF MOORPARK, CALIFORNIA
City Council Meeting
of July 7, 2021
ACTION ADOPTED RESOLUTION NO.
2021-4028. (ROLL CALL VOTE:
UNANIMOUS).
BY B. Garza.
H. Consider Resolution Designating Fund Balance Commitments and Assignments
as Required by GASB 54 for Fiscal Year 2020/21. Staff Recommendation: Adopt
Resolution No. 2021-4028, designating fund balance commitments and
assignments for FY 2020/21 as required by GASB 54. (ROLL CALL VOTE
REQUIRED) (Staff: Kambiz Borhani, Finance Director)
Item: 10.H.
MOORPARK CITY COUNCIL
AGENDA REPORT
TO: Honorable City Council
FROM: Kambiz Borhani, Finance Director
DATE: 07/07/2021 Regular Meeting
SUBJECT: Consider Resolution Designating Fund Balance Commitments and
Assignments as Required by GASB 54 for Fiscal Year 2020/21
BACKGROUND
In March 2009, the Governmental Accounting Standards Board (GASB) issued
Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions
(GASB 54), to address issues related to how fund balance was being reported in
governmental financial statements. The intent of the Statement is to bring greater
clarity and consistency to fund balance reporting in the governmental sector. The City
was required to implement GASB 54 as of the fiscal year (FY) ending June 30, 2011,
and maintain it each year thereafter. The City Council adopted a fund balance policy
(Policy 5.8) on June 15, 2011.
GASB 54 requires that the fund balance policies be adopted each year prior to June
30th by the City Council. The funds comprising the Successor Agency to the
Redevelopment Agency of the City of Moorpark are not listed since GASB requires
these funds to be accounted as a Fiduciary Fund, specifically a “Private Purpose Trust
Fund”. They are held separate and apart from the City of Moorpark.
A new resolution is proposed to designate the commitments and assignments of fund
balance for FY 2020/21. There are no changes to the fund designations from the prior
year.
DISCUSSION
GASB 54 has fund balance classifications with specific definitions for purposes of
financial statement reporting. GASB 54 redefined governmental fund types, most
notably the Special Revenue fund type.
Item: 10.H.
354
Honorable City Council
07/07/2021 Regular Meeting
Page 2
Overview of GASB 54
GASB 54 has set forth the following classifications of fund balance based on the
constraints imposed upon the use of the resources.
Nonspendable - amounts that are not in a spendable form (such as petty cash,
pre-paid items, inventory, or land/property held for resale).
Restricted - amounts constrained to specific purposes by their providers (such as
grantors, bondholders, and higher levels of government), through constitutional
provisions, or by enabling legislation.
Committed - amounts constrained to specific purposes by a government itself,
using its highest level of decision-making authority (resolution or ordinance); to
be reported as Committed, amounts cannot be used for any other purpose
unless the government takes the same highest-level action to remove or change
the constraint.
Assigned - amounts a government intends to use for a specific purpose; intent
can be expressed by the governing body or by an official or body to which the
governing body delegates the authority.
Unassigned - amounts that are available for any purpose; these amounts are
reported only in the General Fund.
In addition, GASB 54 redefines the Special Revenue fund type. GASB 54 clarifies that
a Special Revenue fund may only be established when at least one revenue source is
Restricted or Committed to purposes other than capital projects or debt service. Finally,
GASB 54 requires disclosure in the Notes to the Financial Statements to provide
additional detail regarding:
The purposes of Restrictions, Commitments, and Assignments;
The decision-making authority and formal action that result in Committed fund
balance;
The bodies or persons with authority to express intended uses of resources that
result in Assigned fund balance;
The order in which the government spends Restricted, Committed, Assigned and
Unassigned fund balance;
Information about minimum fund balance policies; and
The purpose and revenue sources for each Special Revenue fund.
Library Fund
On June 21, 2006, City Council elected to withdraw from the Ventura County Free
Library System effective January 1, 2007. During the transition it was recommended
that library generated revenues, including the property tax revenues, be used for library
operations with the accumulated fund balance set aside and identified for future library
projects. Consistent with Resolution No. 2006-2549, the City established the Library
355
Honorable City Council
07/07/2021 Regular Meeting
Page 3
Fund (1010) to account for revenue and expenditures of the library operations. Staff
recommends that this fund continue to exist as a Special Revenue Fund and
recommends the City Council continue to “commit” these funds for the purpose of
providing Library services.
Fund Balance Classification
GASB 54 requires the governing body to act on fund balance classifications prior to
each fiscal year end (June 30, 2021). At the June 16, 2021, meeting, staff informed
Council that this item will be brought forth at the first meeting of July. The action does
not need to include the exact dollar amount, but should provide clear direction to
determine the amount once the City's financial books are closed for the fiscal year.
GASB 54 recommends that the City Council take formal action either by resolution or
ordinance to Commit fund balance. GASB 54 allows the governing body to delegate a
level of authority to assign fund balance. Staff recommends that Commitments and
Assignments of fund balance be made by resolution of the City Council.
Nonspendable - These funds may have a portion of their fund balances
classified as Nonspendable: General Fund (1000).
Restricted - All Special Revenue fund balances will be classified as Restricted.
Committed - Due to the specific nature of fund balance Commitments, such as a
contractual obligation for a particular project, staff recommends one commitment
of fund balance; that for the Library Fund as mentioned previously.
Assigned - Staff recommends that the City Council assign the entire fund
balance of the Capital Projects Funds for the equipment replacement and/or
future design and construction of infrastructure improvement projects. These
funds are: Capital Projects (3000), City Hall Improvement (3001), Police Facilities
(3002), Equipment Replacement (3003), Special Projects (3004), Remaining
Bond Proceeds (3005), PEG Capital (3006), DDA Settlement Capital (3007), IT
Equipment Replacement (3008), Vehicle Replacement (3009) and Facilities
Replacement (3010). If the City Council adopts staff's recommendation, any
future changes to the Assignment of the Capital Project Funds fund balance
would need to be adopted by the City Council.
Unassigned - Unassigned fund balance will only be reported in the General
Fund. If there is a deficit fund balance to be reported in any other fund, it will be
classified as Unassigned.
Creation of New Funds
When the City creates new funds, staff will recommend which fund balances will be
committed or assigned, if any. The City Council will approve of such committed or
assigned fund balances by the adoption of a resolution.
356
Honorable City Council
07/07/2021 Regular Meeting
Page 4
FISCAL IMPACT
There are no fiscal impacts because of GASB 54. GASB 54 deals with the terminology
and designation of “fund balance” within the Annual Comprehensive Financial Report
(ACFR) reporting of the Governmental Funds of the City.
COUNCIL GOAL COMPLIANCE
This action does not support a current strategic directive.
STAFF RECOMMENDATION (ROLL CALL VOTE REQUIRED)
Adopt Resolution No. 2021-____, designating fund balance commitments and
assignments for FY 2020/21 as required by GASB 54.
Attachment: Draft Resolution No. 2021-____
357
ATTACHMENT
RESOLUTION NO. 2021-______
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
MOORPARK, CALIFORNIA, DESIGNATING FUND
BALANCE COMMITMENTS AND ASSIGNMENTS FOR
FISCAL YEAR (FY) 2020/2021 AS REQUIRED BY
GOVERNMENTAL ACCOUNTING STANDARDS BOARD
(GASB) 54
WHEREAS, GASB issued Statement No. 54, Fund Balance Reporting and
Governmental Fund Type Definitions (GASB 54); and
WHEREAS, for financial statement reporting purposes, GASB 54 defines
Committed amounts as those constrained to specific purposes by the government itself;
and
WHEREAS, for financial statement reporting purposes, GASB 54 defines
Assigned amounts as those the government intends to use for a specific purpose; and
WHEREAS, the City Council adopted Policy 5.8, Fund Balance Reporting as
Required by Governmental Accounting Standards Board Statement No. 54 (GASB 54),
in City Council Policies Resolution No. 2019-3851 on September 18, 2019.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK
DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. The City Council designates the following Committed Fund
Balances for FY 2020/2021: Library Fund (1010) for the purpose of providing library
services.
SECTION 2. The City Council designates the following Assigned Fund
Balances for FY 2020/2021 for the future design and construction of infrastructure
improvement projects: Capital Projects (3000), City Hall Improvement (3001), Police
Facilities (3002), Equipment Replacement (3003), Special Projects (3004), Remaining
Bond Proceeds (3005), and DDA Settlement Capital (3007). The City Council
designates the following Assigned Fund Balances for FY 2020/2021 for future
equipment replacements: PEG Capital (3006), IT Equipment Replacement (3008),
Vehicle Replacement (3009) and Facilities Replacement (3010). The City Council
designates the following Assigned Fund Balances for use only within the departments
the funds represent: Community Development (2200) and Engineering/Public Works
(2205).
358
Resolution No. 2021-____
Page 2
SECTION 3. The City Clerk shall certify to the adoption of this resolution and
shall cause a certified resolution to be filed in the book of original resolutions.
PASSED AND ADOPTED this 7th day of July 2021.
____________________________
Janice S. Parvin, Mayor
ATTEST:
___________________________________
Ky Spangler, City Clerk
359