HomeMy WebLinkAboutR-2011-10 establishing fund balance policies as required by GASB 54 RESOLUTION NO. f! /0
A RESOLUTION OF THE CITY OF LA PORTE, TEXAS, ESTABLISING FUND
BALANCE POLICIES AS REQUIRED BY GASB 54; FINDING COMPLIANCE
WITH THE OPEN MEETINGS LAW; AND SETTING AN EFFECTIVE DATE
THEREOF
WHEREAS, the Governmental Accounting Standards Board (GASB) has adopted
Statement Number 54 (GASB 54), Fund Balance Reporting and Governmental Fund
Type Definitions, that is effective in fiscal year 2010 -2011, and
WHEREAS, the City of La Porte wishes to comply with GASB 54 as required
beginning with the current October 1, 2010 to September 30, 2011 fiscal year;
NOW THEREFORE BE IT RESOLVED that the City Council hereby adopts the
following policy:
FUND BALANCE POLICY
Fund balance measures the net financial resources available to finance expenditures
of future periods. The City of La Porte's Unassigned General Fund Balance will be
maintained to provide the City with sufficient working capital and a margin of safety to
address local emergencies without borrowing. The Unassigned General Fund Balance
may only be appropriated by resolution of the City Council.
Fund Balance of the City may be committed for a specific source by formal action of
the City Council. Amendments or modification to the committed fund balance must
also be approved by formal action of the City Council. Committed fund balance
does not lapse at year -end. The formal action required to commit fund balance
shall be by resolution or majority vote.
The City Council delegates authority to assign fund balance for a specific
purpose following approval by the Fiscal Affairs Committee to the City Manager
of the City of La Porte.
For purposes of fund balance classification, expenditures are to be spent from
restricted fund balance first and then unrestricted. Expenditures incurred in the
unrestricted fund balances shall be reduced first from the committed fund balance,
then from the assigned fund balance and lastly, the unassigned fund balance.
The City Council recognizes that good fiscal management comprises the
foundational support of the entire City. To make that support as effective as
possible, the City Council intends to maintain a minimum fund balance of 25 % of the
City's general fund annual operating expenditures. If a fund balance drops below
25 %, it shall be recovered at a rate of 1% minimally, each year. This policy should
be revisited each year for review.
/t
Louis R ••y,
•
Mayor
Patrice Fogarty,&' v
City Secretary
r
r
Clark Askins,
Assistant City Attorney