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Res 1622 09/13/2022 Fund Bal. Policy Of C/ . ""�nnnrmro:,w �O r �. TEXAS "City of Choice" RESOLUTION NO.1622 A:RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CIBOLO, TEXAS .APPROVING AN.AMENDED FUND BALANCE POLICY OF THE CITY OF CIBOLO; PROVIDING FOR A REPEALING CLAUSE; PROVIDING FOR A SEVERABILITY CLAUSE; AND PROVIDING FOR AN EFFECTIVE DATE.. WHEREAS, the Cibolo.City Council adopted a fund balance policy in fiscal year 2011 to implement .GASB 54 requirements for fund balance reporting and establish conservative . . guidelines-for minimum levels of unassigned fund balance; WHEREAS, the City of Cibolo amended the fund balance policy in August of 2015.to change the unassigned:fund balance requirement from 40% to 35%; WHEREAS, City'Council was briefed on the fund balance policy at its meeting on August 9, 2022, and reviewed a draft policy changing the unassigned fund balance requirement from 35%to 28% at-its meeting on August 23,.2022; . WHEREAS, the Cibolo City Council elects to amend the .guidelines established for minimum levels of unassigned fund balance in the.General Fund to ensure fiscal stability of the City while balancing fiscal accountability to the taxpayer; NOWJHEREFORE, BE IT RESOLVED that the City Council:of the City of Cibolo, Texas hereby amends the.attached:Fund Balance Policy, effective:October 1, 2022.: - SECTION 1. That this Resolution and the Fund Balance Policy attached hereto as Exhibit,"A" is hereby amended and supersedes all prior resolutions and Fund Balance Policies in conflict with the provisions hereof. SECTION 2. It is hereby officially found and determined that the a meeting at which this Policy was .. approved was open to the public, and:public notice of the time, place and purpose of the meeting was given, all as required by the Texas Open Meetings Act. SECTION 3. If any section, paragraph, clause or provision of this Resolution shall for any reason : be held .to be invalid or unenforceable, the invalidity .or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution.- SECTION:4. All orders, resolutions and ordinances, or parts thereof, inconsistent herewith are- hereby repealed to the extent of such inconsistency. SECTION.5. This Resolution shall become effective on October 1, 2022, for the Fiscal Year 2023 -- upon-its. ,passage. APPROVED AND ADOPTED ON THIS 13th DAY OF September 2022. Stosh Boy Mayor ATTEST:- Peggy Cimics, TRMC City Secretary EXHIBIT A Fund Balance Policy L PURPOSE The purpose of this policy,is to establish guidelines for.fund balances and reporting requirements in compliance with the Governmental Accounting Standards Board(GASB)Statement No.54_Fund Balance Reporting and Governmental.Fund Type Definitions. The Fund Balance Policy:of the City of Cibolo provides the framework for the overall fiscal management of-the City. Revenue projections are conservative and authorized expenditures are closely monitored. In stable economic times; the combination of these two_ strategies.leads to revenue collections higher than. -actual expenditures. The accumulation of these reserves protects the City,from uncontrollable increases in expenditures or unforeseen reductions in revenue,or a combination of the two. This allows for the prudent financing of capital projects. II. SCOPE This policy applies to all City Fund Balances and Reserves.It is the goal of the City to achieve and maintain a minimum-unassigned fund balance in the General Fund. III. DEFINITIONS Appropriation—A specific amount of money authorized by the City Council for an approved expenditure. Expenditure—The actual spending of funds set aside by appropriation for identified goods and/or services.: Fund - A set of.inter-related accounts to record revenues and expenditures associated .with a specific purpose. Fund Balance—The amount of financial resources available.for use,derived from unencumbered resources available in a fund from the prior/current year after payment of the prior/current year expenditures. An accounting distinction is made between the.portions of fund equity:that are spendable and nonspendable. These are broken up into five categories: Nonspendable Fund Balance-amounts that cannot be spent because:they are either not in spendable form, or legally or contractually required .to be maintained intact. • Restricted Fund Balance-.amounts that are restricted for specific purpose. The.spending - constraints placed on the.use of fund balance amounts are externally imposed by creditors, grantors, contributors, laws or:regulation of other governments, or imposed by-law through constitutional provisions or enabling legislation that are legally enforceable. • Committed Fund Balance-amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the City Council either by.resolution or ordinance. The committed amounts cannot be used for any other purpose unless the City . Council removes or changes the specified use,by taking the same type of formal action it employed to previously commit those amounts. • Assigned Fund Balance-amounts that are constrained by.the City's intent to be,used for specific purposes but are neither restricted not committed. Intent is expressed by City City of Cibolo Fund Balance Policy Council through an information action or Council can delegate the authority to express intent to the City Manager on a case-by-case basis. All uses of Assigned Funds must be approved by City Council, except in the case of an emergency or mediate public necessity as determined by the City Manager: Funds held im ..as Assigned maybe appropriated during the budget year and may also be used for ensuing budget years if additional expenditures are required to maintain appropriate levels of service and exceed projected revenues. •, Unassigned Fund Balance-amounts represent the remaining fund balance after amounts are set:aside for:other classifications. Unassigned amounts'are technically available for any purpose. Fund Equity—.A fund's equity is generally the difference between its assets and its liabilities'. Reappropriation=A specific amount of money authorized by City:Council.for an approved expenditure during a previous period and carried forward to the subsequent year,also known as a carryover expenditure. Reserve—An account which sets aside a portion of a Fund's balance for some future use: These Funds are not available:for Appropriation or Expenditure.except when qualifying events occur. Revenue-Funds received from the collection of taxes, fees, permits, licenses, interest, and grants during: the year.: IV.- POLICY The following policies are, established for the Committed Fund Balance, .Assigned Fund Balance; and . Unassigned Fund Balance:: • :Committed Fund Balance.The:City Council will take formal-action to.establish,modify,or rescind a fund balance commitment by resolution approved by the Council. • Assigned Fund Balance. The City Council authorizes the City Manager as the, official authorized to assign fund balance to a,specific purpose as,approved:by this fund balance - - policy.: •- Unassigned Fund Balance(Minimum).It is the goal -of the City-to achieve and maintain an g. (Mini ) g lY unassigned fund balance in the General-Fund equal to twenty-eight percent(28%)of recurring operating expenditures barring any unusual or deliberate circumstances. - If unassigned fund balance in the General Fund falls below .the goal or-has a deficiency,the City will irnplement the following budget strategies until fund balance has.been replenished Wan acceptable level. • Reduction of expenditures to minimum levels including; but not.limited to.reduction iri discretionary spending such as travel and training.:and implementation of a hiring freeze for:non-essential positions. ■ Increase revenues or pursue other funding sources. ■ Or some combination of the two. Reporting:Requirements: the fund balance of each fund will be presented to City Council in conjunction with the presentation of-the annual audit.