LEGISLATIVE ACTION ITEM
SPONSOR: Grover C. Robinson, IV, Mayor
SUBJECT:
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RESOLUTION NO. 2022-022 - AMENDING THE FUND BALANCE POLICY OF GOVERNMENTAL FUNDS - COUNCIL RESERVE (GENERAL FUND)
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RECOMMENDATION:
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That City Council adopt Resolution No. 2022-022:
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PENSACOLA, FLORIDA AMENDING THE FUND BALANCE POLICY OF GOVERNMENTAL FUNDS OF THE CITY COUNCIL RELATED TO COUNCIL RESERVE (GENERAL FUND); PROVIDING SEVERABILITY; PROVIDING AN EFFECTIVE DATE.
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HEARING REQUIRED: No Hearing Required
SUMMARY:
On September 9, 2010, City Council adopted Resolution No. 31-10 which created the Fund Balance Policy of Governmental Funds in accordance with Governmental Accounting and Financial Standards Board Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. The policy aimed to more clearly define the nature and extent of the constraints placed on a government’s fund balance. The policy included a section on General Fund Council Reserves which set a minimum reserve of fifteen percent of the General Fund beginning adopted appropriations and outlined the use, replenishment and funding of such reserves.
On October 9, 2014, City Council adopted Ordinance No. 39-14 which created Section 3-1-13 of the Code of the City of Pensacola, Florida in order to commit the Council Reserve fund balance in the General Fund. The ordinance mirrored the General Fund Council Reserves section of the Fund Balance Policy of Governmental Funds.
On January 12, 2017, City Council approved amending the Council Reserves (General Fund) section of the Fund Balance Policy to increase Council Reserves from fifteen percent to twenty percent.
On March 9, 2017, City Council adopted Ordinance No. 04-17 amending the minimum reserve to twenty percent in order to comply with Fund Balance Policy.
The City has exceeded the twenty percent minimum reserve requirement every year since the ordinance was amended and as of September 30, 2021, City Council reserve was at 22.77% of the fiscal year 2022 beginning adopted appropriations.
On February 24, 2022, City Council adopted Ordinance No. 05-22, amending the Section 3-1-11 to allow the Finance Director the discretion to determine if annual interest earnings should be applied to the reserve balance each year or allow the interest earnings to remain in the general fund to be used towards general fund operations.
Adoption of Resolution No. 2022-022 will amend such section of the Fund Balance Policy in order to keep the policy consistent with City code.
PRIOR ACTION:
September 9, 2010 - City Council adopted Resolution No. 31-10 which committed the Council reserves fund balance in the general fund.
October 9, 2014 - City Council adopted Ordinance No. 39-14 which committed the Council reserves fund balance in the general fund.
January 12, 2017 - City Council approved amending the Council reserves fund balance in the general fund to increase Council Reserves from 15 percent to 20 percent.
March 9, 2017 - City Council adopted Ordinance No. 04-17 on second reading amending the Council reserves fund balance in the general fund to increase Council Reserves from 15 percent to 20 percent.
February 24, 2022 - City Council adopted Ordinance No. 05-22 on second reading amending the Council reserves fund balance in the general fund to allow the Finance Director the discretion to determine if annual interest earnings should be applied to the reserve balance each fiscal year.
FUNDING:
N/A
FINANCIAL IMPACT:
Annual interest earnings not applied to the reserve balance will allow the interest earnings to remain in the general fund to be used towards general fund operations.
LEGAL REVIEW ONLY BY CITY ATTORNEY: Yes
1/18/2022
STAFF CONTACT:
Kerrith Fiddler, City Administrator
Amy Miller, Deputy City Administrator - Administration & Enterprise
Amy Lovoy, Finance Director
ATTACHMENTS:
1) Resolution No. 2022-022
PRESENTATION: No end