HomeMy WebLinkAboutApprove Resolution No 4322, Closing Four Funds.pdf Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Anna Rosenberry, Finance Director
Chris Kukulski, City Manager
SUBJECT: Resolution No 4322 – Closing Four Special Revenue Funds into the
General Fund at the End of Fiscal Year 2011 and Adding their Assets and
Liabilities to the General Fund.
MEETING DATE: June 27, 2011
AGENDA ITEM TYPE: Consent
RECOMMENDATION: Adopt Resolution No. 4322
BACKGROUND: The City Manager’s Recommended Budget contains changes to the City’s
Financial Policies that bring the City in compliance with the new requirements of the
Governmental Accounting Standards Board’s Statement No 54 “Fund Balance Reporting and
Certain Governmental Fund Types.” During our analysis of Funds for implementation of this
Statement we identified four funds that merely collect tax levies and transfer the revenues to the
General Fund each year. Upon further review, we noted that all four of these levies became
subject to our maximum mill levy restriction under Montana Code Annotated 15-10-420.
Fund 104 Comprehensive Insurance (Property & Liability Insurance)
Fund 105 Public Employees Retirement
Fund 106 Police Retirement
Fund 107 Firefighter Retirement
In order to comply with the Statement and make it clearer to delineate all-purpose tax levies that
support the general fund, we recommend closing these funds and adding these levies to the All-
Purpose Levy that is deposited directly into the General Fund each year. The City Manager’s
Recommended Budget Levy Sheet (page 50) for FY12 has been prepared using this method.
The City will continue to expend money for these purposes, and will continue to levy taxes to
support these purposes.
Incidentally, Fund 103 – Medical Insurance (Permissive Medical Levy) will NOT be effected by
this resolution.
UNRESOLVED ISSUES: None.
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ALTERNATIVES: We could continue with the current fund and levy structure. If we did,
GASB Statement No. 54 would require us to report the fund balance of Funds 104, 105, 106, and
107 in the City’s General Fund. It would be simpler to just close the funds going forward.
FISCAL EFFECTS: There will be no additional, unanticipated dollars to the General Fund,
since these funds had been budgeted to transfer all money to the General Fund each year. There
will be a small amount of taxes receivable for delinquent taxes that will be moved to the General
Fund on June 30, 2011.
Attachments: Resolution No. 4322
Report compiled on: June 17, 2011
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COMMISSION RESOLUTION NO. 4322
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
BOZEMAN, MONTANA, CLOSING FOUR SPECIAL REVENUE FUNDS
INTO THE GENERAL FUND AT THE END OF FISCAL YEAR 2011, AND
ADDING THEIR ASSETS AND LIABILITES TO THE GENERAL FUND.
WHEREAS, the City Commission did, on the 6th day of June, 2011, hear the City Manager’s
presentation of the Budget Recommendations for Fiscal Year 2011-2012 (Fiscal Year 2012, also FY12);
and
WHEREAS, the City Manager’s Recommended Budget contains changes to the City’s
Financial Policies that bring the City in compliance with the new requirements of the Governmental
Accounting Standards Board’s Statement No 54 “Fund Balance Reporting and Certain Governmental
Fund Types,”; and
WHEREAS, for decades, the City has maintained separate Special Revenue Funds to receive
tax levies related to “Police Retirement”, “Firefighter Retirement”, “Public Employees Retirement”, and
“Comprehensive Insurance” and transfer these monies to the General Fund; and
WHEREAS, in 1999 these tax levies became subject to the provisions of the City’s All
Purpose Tax levy under Montana Code Annotated Title 15, Section 10, Part 4; and
WHEREAS, all of the expenditures related to these purposes have been recorded in the
General Fund; and
WHEREAS, the Governmental Accounting Standards Board’s Statement No 54 “Fund
Balance Reporting and Certain Governmental Fund Types,” would require these monies to be reported
in the City General Fund absent any specific commitment of the revenues; and
WHEREAS, the City Manager’s Recommended Budget notes that the tax levies that are
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subject to Montana Code Annotated Title 15, Section 10, Part 4 for “Police Retirement”, “Firefighter
Retirement”, “Public Employees Retirement”, and “Comprehensive Insurance” have been included in
the City’s “All Purpose Levy” for Fiscal Year 2012.
WHEREAS, the City intends to continue to levy taxes and pay the costs associated with
“Police Retirement”, “Firefighter Retirement”, “Public Employees Retirement”, and “Comprehensive
Insurance” in the General Fund.
NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman,
Montana, to wit:
Section 1
That at the end of Fiscal Year 2011 (June 30, 2011) the following Special Revenue Funds will
be closed:
Fund 104 Comprehensive Insurance
Fund 105 Public Employees Retirement
Fund 106 Police Retirement
Fund 107 Firefighter Retirement
Section 2
In closing each fund, the fund’s assets and liabilities will be transferred to the General Fund.
Section 3
The City will continue to levy for the purposes of “Police Retirement”, “Firefighter
Retirement”, “Public Employees Retirement”, and “Comprehensive Insurance” in its All Purpose
Tax Levy, deposited to the General Fund.
Section 4
This resolution shall become effective upon passage.
Section 5
That should it be found by any court of competent jurisdiction that any section, clause,
portion, sentence, word, or phrase of this resolution is deemed to be contrary to any existing law or
regulations, that in this instance, it is the intent of the City Commission of the City of Bozeman,
Montana, that all other portions, sections, words, clauses, phrases, or paragraphs of this document shall
remain in full force and effect.
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PASSED AND APPROVED by the City Commission of the City of Bozeman, Montana, at a
regular session thereof held on the 27th day of June, 2011
________________________________________
JEFFREY K. KRAUSS
Mayor
ATTEST:
_____________________________________
STACY ULMEN, CMC
City Clerk
APPROVED AS TO FORM:
________________________________________
GREG SULLIVAN
City Attorney
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