Review of Current Policy Allocating Excess/Deficient General Fund Revenues

The City Council originally adopted a policy on February 22, 1994, known as the Excess/Deficient Revenue Policy (Resolution #94-02-045 - Resolution Establishing a Financial Policy for the Purpose of Allocation of Excess/Deficient General Fund Revenues) with the last amendment of this policy on May 10, 2016 (Resolution #16-05-089) a copy of which is attached.

The policy states that the General Fund fund balance will be at 50% of the next year's operating expenditures, plus any encumbrances and compensated absences.

At the March 23, 2021 City Council meeting when Resolution #21-073 was adopted to distribute the year ending 2020 excess revenue, the City Council stated that they wanted to review and possibly amend this policy prior to the distribution of an excess/deficient revenues applicable to year ending 2021.  The 2021 allocation is estimated at approximately $410,000 of excess revenue. 

The current policy distributes the excess/deficient revenue to 4 funds:  30% each to the funds of Equipment Replacement Fund, Capital Maintenance Fund and Public Improvement Revolving Fund.  The remaining 10% is allocated to the Public Facilities Fund.  Respective Draft Estimated Fund Balances are attached to show ending balances for each fund.  These reflect any excess revenue for 2021.   

The Pavement Management Cash flow is also attached as the use of the excess revenue be applied towards road funding was mentioned during the City Council meeting of March 23, 2021.

The purpose of this worksession is to decide if the council chooses to stay with the current allocated percentages or determine new percentages of how the excess revenue should be distributed.  





 

15 minutes

Finance Director

Review of Current Excess/Deficient Revenue Policy and recommend changes, if any, and review the distribution of the 2021 excess revenues.