HomeMy WebLinkAboutAGENDA REPORT 2018 0620 CCSA REG ITEM 10HCITY OF MOORPARK,
CALIFORNIA
City Council Meeting
of June 20, 2018
ACTION Adopted Reso No.
2018-3721
BY M. Benson
H. Consider Resolution Designating Fund Balance Commitments and Assignments
as Required by GASB 54. Staff Recommendation: Adopt Resolution No. 2018-
___, designating fund balance commitments and assignments for FY 2017/18 as
required by GASB 54. ROLL CALL VOTE REQUIRED
Item: 10.H.
MOORPARK CITY COUNCIL
AGENDA REPORT
TO: Honorable City Council
FROM: Ron Ahlers, Finance Director
DATE: 6/20/18 Regular Meeting
SUBJECT: Consider Resolution Designating Fund Balance Commitments and
Assignments as Required by GASB 54
BACKGROUND
In March 2009, the Governmental Accounting Standards Board (GASB) issued
Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions,
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 2017/18. 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.
889
Honorable City Council
6/20/ 2018 Regular Meeting
Page 2
Overview of GASB 54
GASB 54 has set forth the following classifications of fund balance.
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
The City currently has one fund reported as Special Revenue with a majority of its
revenue as general purpose property taxes (Library Fund). 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 which is more
ministerial in nature because these funds have previously been used to provide library
services.
890
Honorable City Council
6/20/ 2018 Regular Meeting
Page 3
Fund Balance Classification
GASB 54 requires the governing body to take action on fund balance classifications
prior to each fiscal year end (June 30, 2018). In other words, Commitments and
Assignments appearing on the June 30, 2018 balance sheet must be acted on prior to
June 30, 2018. The action does not need to include the exact dollar amount, but should
provide clear direction to determine the amount once the City's 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 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) and DDA
Settlement Capital (3007). 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.
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 Comprehensive Annual
Financial Report (CAFR) reporting of the Governmental Funds of the City.
891
Honorable City Council
6/20/ 2018 Regular Meeting
Page 4
STAFF RECOMMENDATION (ROLL CALL VOTE REQUIRED)
Adopt Resolution No. 2018-____, designating fund balance commitments and
assignments for FY 2017/18 as required by GASB 54.
Attachment: Resolution No. 2018-____
892
RESOLUTION NO. 2018-______
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
MOORPARK, CALIFORNIA, DESIGNATING FUND BALANCE
COMMITMENTS AND ASSIGNMENTS FOR FISCAL YEAR
(FY) 2017/18 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. 2017-3610 on July 5, 2017.
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 2017/18: Library Fund (1010) for the purpose of providing library services.
SECTION 2. The City Council designates the following Assigned Fund Balances for
FY 2017/18 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 MRA Bond Proceeds (3005),
PEG Capital (3006) and DDA Settlement Capital (3007). 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.
PASSED AND ADOPTED this 20th day of June, 2018.
____________________________
Janice S. Parvin, Mayor
ATTEST:
___________________________________
Maureen Benson, City Clerk
893