HomeMy WebLinkAboutRes 19-04 Amending the Fund Balance Policy by increasing the number of Operating Days TOWN OF WESTLAKE
RESOLUTION NO. 19-04
A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF WESTLAKE,
AMENDING THE FUND BALANCE POLICY BY INCREASING THE OPERATING
DAYS FROM A MINIMUM OF 90 TO 180 DAYS AND IMPLEMENTING A PLAN FOR
PRIORITIZED UTILIZATION OF FUND BALANCE RESERVES IN EXCESS OF THE
MINIMUM OPERATING THRESHOLD.
WHEREAS, a fund balance policy is a key element of financial stability; and
WHEREAS, the maintenance of adequate levels of unassigned fund balance will
mitigate financial risk from unforeseen revenue fluctuations, unanticipated expenditures, and
other similar circumstances; and
WHEREAS, the Town Council desires to amend the current Fund Balance Policy and
Implement a plan for prioritized utilization of fund balance reserves in excess of the minimum
operating threshold;
NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN
OF WESTLAKE, TEXAS:
SECTION 1: That, all matters stated in the Recitals hereinabove are found to be true
and correct and are incorporated herein by reference as if copied in their entirety.
SECTION 2: That the Town of Westlake Town Council hereby approves the amendment
to the current Fund Balance Policy from a minimum of 90 operating days to 180 operating days
and the implementation of a plan for prioritized utilization of Fund Balance reserves in excess of
the minimum operating threshold.
SECTION 3: If any portion of this Resolution shall, for any reason, be declared invalid
by any court of competent jurisdiction, such invalidity shall not affect the remaining provisions
hereof and the Council hereby determines that it would have adopted this Resolution without the
invalid provision.
Resolution 19-04
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SECTION 4: That this resolution shall become effective from and after its date of
passage.
PASSED AND APPROVED ON THIS 28TH DAY OF JANUARY 2019.
ATTEST: Loa i,1�
Laura L. Wheat, Mayor
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KelO Edwar= own Secretary Thomas E. ryme , T wn M na er
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APPROV - AST ( RM: �O:
L S ton Lo , T wn Attorn T g
Resolution 19-04
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L FUND BALANCE/RETAINED EARNINGS
A. General Fund Undesignated Fund Balance-The Town shall strive to maintain the General Fund
undesignated minimum fund balance at,or in excess of, 180 days of operation.
B. Retained Earnings of Other Operating Funds-in the Utility Fund,the Town shall strive to
maintain positive retained earnings positions to provide sufficient reserves for emergencies and
revenue shortfalls.
C. Use of Fund Balance Generally—The Council delegates the responsibility to assign funds to the
Town Manager or his/her designee. The Council shall have the authority to assign any amount of
funds. Assignments may occur subsequent to fiscal year-end. The Council will utilize ftuids in the
following spending order: Restricted,Committed,Assigned,or Unassigned.
Fund Balance will be targeted to only be used with Council approval and can be only be used for the
following:
• Emergencies,
• non-recurring expenditures such as technology/FF&E(furniture,fixtures and equipment),or
major capital purchases that cannot be accommodated through current year savings.
• Should such use reduce the balance below the appropriate level set as the objective for that
fund,recommendations will be made on how to restore it.
• The Council shall approve all commitments by formal action. The action to commit funds must
occur prior to fiscal year-end,to report such commitments in the balance sheet of the respective
period,even though the amount may be determined subsequent to fiscal year-end.
• A commitment can only be modified or removed by the same formal action.
D. General Fund Balance Specifically- Amounts of the General Fund's Fund Balance above the
180 day minimum in the General Fund may,with Council approval,be used for the following in
descending order of priority:
• Emergencies such as natural disaster response or repairs to major equipment failure or
damage.
• Specific capital improvement projects or be transferred to the Capital Projects Fund.
• Major maintenance projects not meeting Capital Project criteria as identified in the Adopted
Budget's Capital Improvement Plan.
• Acquisition of technology hardware and/or software such as Geographic Information
Systems(GIS),public safety technology enhancements,and fiber optic technology.
• Local matches on State or Federal grants.
• One-time(i.e.non-reoccurring)employee performance pay
Resolution 19-04
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