HomeMy WebLinkAboutAGENDA REPORT 2024 0619 CCSA REG ITEM 10ECITY OF MOORPARK, CALIFORNIA
City Council Meeting
of June 19, 2024
ACTION APPROVED STAFF
RECOMMENDATION INCLUDING
ADOPTION OF RESOLUTION NO. 2024-
4259. (ROLL CALL VOTE: UNANIMOUS)
BY A. Hurtado.
E. Consider Resolution Designating Fund Balance Commitments and Assignments
as Required by GASB 54 for Fiscal Year End 2022/23. Staff Recommendation:
Adopt Resolution No. 2024-4259, designating fund balance commitments and
assignments for FY 2023/24 as required by GASB 54. (Staff: Hiromi Dever,
Interim Finance Director) (ROLL CALL VOTE REQUIRED)
Item: 10.E.
MOORPARK CITY COUNCIL
AGENDA REPORT
TO: Honorable City Council
FROM: Hiromi Dever, Interim Finance Director
DATE: 06/19/2024 Regular Meeting
SUBJECT: Consider Resolution Designating Fund Balance Commitments and
Assignments as Required by GASB 54 for Fiscal Year End 2022/23
BACKGROUND
In March 2009, the Governmental Accounting Standards Board 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 (FYE) June 30, 2011, and maintain it each year
thereafter. The City Council adopted a fund balance policy (Policy 5.8) on June 15, 2011.
The City Council then adopted updated Resolution No. 2022-4097 on May 18, 2022,
which renumbered this Policy to 5.5.
GASB 54 requires that the fund balance policies be adopted each year by the City Council
prior to FYE on June 30. 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 Fiduciary Funds, 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 FYE 2023/2024.
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.E.
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Honorable City Council
06/19/2024 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 government 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.
Special Revenue Fund Clarification
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.
473
Honorable City Council
06/19/2024 Regular Meeting
Page 3
Library Fund Classification as Special Revenue Fund
The City currently has one fund reported as Special Revenue with a majority of its revenue
as general purpose property taxes (Library Fund-1010). Consistent with Resolution No.
2006-2549, the City established the Library Fund to account separately for revenue and
expenditures of library operations. Staff recommends that this fund continue to exist as
a Special Revenue Fund. Staff recommends the City Council “Commit” these funds for
the purpose of providing Library services.
Fund Balance Classification
GASB 54 requires the governing body to take action on fund balance classifications prior
to each FYE (June 30, 2024). 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 - Certain funds may have a portion of their fund balances classified
as Nonspendable in the normal course of business operations, which typically
includes the General Fund (1000) and Community Development (2200).
Restricted - With exception of the Library Fund as previously described, all
Special Revenue fund balances will be classified as Restricted.
Committed - Due to the specific nature of fund balance Commitments, which
require the highest level of decision-making authority (resolution or ordinance),
staff recommends the following commitments of fund balance: the Library Fund,
and both the Economic Contingency and Economic Uncertainty Reserve within the
General Fund.
Assigned - Staff recommends that the City Council approve the Assignment of the
entire fund balance of all 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 MRA Bond Proceeds (3005), PEG Capital (3006), DDA Settlement
Capital (3007), IT Equipment Replacement (3008), Vehicle Replacement (3009)
Facilities Replacement (3010) and Technology Enhancement Fund (3011). 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.
474
Honorable City Council
06/19/2024 Regular Meeting
Page 4
Unassigned – Surplus 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.
ENVIRONMENTAL DETERMINATION
This action is exempt from the California Environmental Quality Act (CEQA) as it does
not constitute a project, as defined by Section 15378 of the State CEQA Guidelines.
Therefore, no environmental review is required.
FISCAL IMPACT
There are no fiscal impacts as a result 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. 2024-____, designating fund balance commitments and
assignments for FY 2023/24 as required by GASB 54.
Attachment: Draft Resolution No. 2024-____
475
ATTACHMENT
RESOLUTION NO. 2024-______
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
MOORPARK, CALIFORNIA, DESIGNATING FUND
BALANCE COMMITMENTS AND ASSIGNMENTS FOR
FISCAL YEAR (FY) 2023/2024 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 5.5, Fund Balance Reporting as
Required by Governmental Accounting Standards Board Statement No. 54 (GASB 54),
in City Council Policies Resolution No. 2022-4097 on May 18, 2022.
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 2023/2024: the Library Fund (1010) for the purpose of providing library services,
and within the General Fund (1000), amounts set aside for the Economic Contingency
Reserve and the Economic Uncertainty Reserve.
SECTION 2. The City Council designates the following Assigned Fund Balances
for FY 2023/2024 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 2023/2024 for future equipment replacements and
enhancements: PEG Capital (3006), IT Equipment Replacement (3008), Vehicle
Replacement (3009), Facilities Replacement (3010), and Technology Enhancement Fund
(3011). 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).
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.
476
Resolution No. 2024-____
Page 2
PASSED AND ADOPTED this 19th day of June, 2024.
____________________________
Chris R. Enegren, Mayor
ATTEST:
___________________________________
Ky Spangler, City Clerk
477