HomeMy WebLinkAboutresolution.council.062-05RESOLUTION NO.
Series 2005
A RESOLUTION OF THE CITY OF ASPEN, COLORADO, APPROVING A FUND
BALANCE POLICY FOR THE CITY OF ASPEN, AND AUTHORIZING THE CITY
COUNCIL TO APPROVE SAID DOCUMENT(S) ON BEHALF OF THE CITY OF
ASPEN, COLORADO.
WHEREAS, fund balance serves as a standard measure of the financial resources
available in a governmental fund.
WHEREAS, adequate fund balance levels are a necessary component of the City's
overall financial management strategy and a key indicator of the City's financial health.
WHEREAS, a fund balance policy is necessary to ensure that City programs and current
service levels are protected from changes in revenue growth or expenditure requirements.
WHEREAS, the Government Finance Officers Association (GFOA) recommends the
establishment of a formal policy on the level of fund balance that should be maintained in
the General Fund and encourages the adoption of similar policies for other types of
governmental funds.
NOW, WHEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF ASPEN, COLORADO:
That the City Council of the City of Aspen hereby adopts the following Fund Balance
Policy:
General Fund: It will be the policy of the City to maintain an audited fund balance in
the General Fund of no less than ninety (90) days of annual appropriated expenditures at
year end, as identified in the Long Range Financial Plan (LRP).
In the event of unforeseen expenditure increases or revenue shortfalls that would result in
the General Fund drawing upon the reserve account, the first twenty (20) % of the
minimum General Fund balance as herein defined may be drawn upon on
recommendation of Staff with City Council approval to compensate for the resulting
shortfall. Staff's recommendation to draw upon this reserve must include a
replenishment schedule to begin within twelve months of the draw, and result in full
replenishment of the reserve requirement within thirty-six months of the draw.
Replenishment of the reserve will be realized by using the following financial strategies,
in this priority order:
1. The City will reallocate property tax revenues from the General Fund Asset
Management Plan (AMP) to fund any resulting shortfall in fund balance. It is the
City's practice to allocate an average of 65% of annual property tax collections to
cash funded general government capital improvements. Subsequently, capital
expenditures will be reprioritized and rescheduled.
2. If necessary, the City will reduce General Fund operating budget appropriations
on a prioritized basis to allow for minimum adverse impact on General Fund
departments while permitting a return to the minimum fund balance level required
by policy.
3. If necessary the City will evaluate and recommend options for increasing General
Fund revenues through the adoption of increased fees and taxes in compliance
with all state and local requirements for such increases.
The remaining eighty (80) °A of the General Fund Balance may be drawn upon
subsequent to the declaration by City Council of a state of emergency. A state of
emergency shall occur when the City Council determines that the health, welfare and
safety of the City is threatened. In such event Staff shall develop a plan to replenish the
reserve in a prudent and reasonable time as determined by Staff and City Council.
Parks and Open Space Fund: It will be the policy of the City to maintain an audited
fund balance in the Parks and Open Space Fund of no less than forty-five (45) days of
annual expenditures at year end, as identified in the City's audited Annual Financial
Report and Long Range Financial Plan (LRP).
In the event of unforeseen expenditure increases or revenue shortfalls that would result in
the Parks and Open Space Fund drawing upon the fund balance, the first twenty (20) %
of the Parks and Open Space Fund minimum fund balance may be drawn upon on
recommendation of Staff with City Council approval. Staff's recommendation to draw
upon this reserve must include a replenishment schedule to begin within twelve months
of the draw, and result in full replenishment of the fund balance requirement within
thirty-six months of the draw. Replenishment of the reserve will be realized by using the
following financial strategies, in this priority order:
1. Reallocating sales tax revenues from the Parks and Open Space Asset
Management Plan (AMP) to address the fund balance shortfall. The Asset
Management Plan provides funds for prioritized capital improvements from
annual sales tax revenues. It is the City's practice to allocate an average of $1
million per year of annual sales mx collections to cash-funded parks and open
space capital improvements. Subsequently, capital expenditures will be
reprioritized and rescheduled.
2. If necessary, the City will reduce Parks and Open Space operating budget
appropriations on a prioritized basis to allow for minimum adverse impact on
Parks operations while permitting a return to the minimum fund balance level
required by policy.
3. If necessary, the City will evaluate and recommend options for increasing Parks
and Open Space fund revenues through the adoption of increased fees and taxes,
in compliance with all state and local requirements for such increases.
The remaining eighty (80) % of the Parks and Open Space Fund reserve may be drawn
upon subsequent to the declaration by City Council of a state of emergency. A state of
emergency shall occur when the health, welfare and safety of the City is threatened. In
such event Staff shall develop a plan to replenish the reserve in a prudent and reasonable
time as determined by Staff and City Council.
Dated: ~ ~.~, 2005.
I, Kathryn S. Koch, duly appointed and acting City Clerk do certify that the foregoing is
true and accurate copy of the resoluti~dopted by the City Council of the City of
Aspen, Colorado, at a meeting held(..~~ Z~, 2005.~
Kathryn S. K~,' 1C~y Cl~erk