CR 11-122 Approve Resolution Committing Specific Revenue Sources in the Special Revenue Funds in Accordance with GASB 54December 20, 2011 Council Report 2011-122
City of Hopkins
APPROVE RESOLUTION COMMITTING SPECIFIC REVENUE SOURCES
IN THE SPECIAL REVENUE FUNDS IN ACCORDANCE WITH GASB 54
Proposed Action
Staff recommends adoption of the following motion: Move to adopt Resolution 2011-071 committing specific revenue
sources in special revenue funds in accordance with GASB 54.
It is recommended that the Council approve the resolution committing revenues in accordance with GASB 54
regulations.
Overview
The Governmental Accounting Standards Board (GASB) released Statement 54 -"Fund Balance Reporting and
Governmental Fund Type Definitions" on March 11, 2009 which is effective for fiscal year ending June 30, 2011 or
later. This new Statement is intended to improve the usefulness of the amount reported in fund balance by providing
more structured classification. This Statement applies to fund balance reported in the General Fund, Special Revenue
Funds, Debt Service Funds, Capital Projects Funds and Permanent Fund. This Statement does not apply to Enterprise
Funds, Internal Service Funds, and extremely restricted reserves.
Currently fund balance is classified as "reserved" or "unreserved." Unreserved fund balance may be further allocated
into designated and undesignated. GASB 54 will change how fund balance is reported. The hierarchy of five possible
GASB 54 classifications is as follows:
• Non -spendable Fund balance includes amounts not in spendable form, such as inventory, or amounts required
to be maintained intact legally or contractually (principal endowment) (e,g, inventory, pre -paid items, long-
term receivables).
• Restricted Fund Balance includes amounts constrained for a specific purpose by external parties (e.g. Debt
Service, Capital Projects, State and Federal Grant Funds).
• Committed Fund Balance includes amounts constrained for a specific purpose by a government using its
highest level of decision making authority (e.g. Major Maintenance, Capital Replacement Reserve, etc.).
• Assigned Fund Balance includes general fund amounts constrained for a specific purpose by a governing
board or by an official that has been delegated authority to assign amounts.
• Unassigned Fund Balance is the residual classification for the general fund.
The Statement also modifies the definition of a special revenue fund stating that special revenue funds are used to
account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for
specified purposes other than debt service or capital projects. The term "proceeds of specific revenue sources"
establishes that one or more specific restricted or committed revenues should be the foundation for a special revenue
fund and comprise a substantial portion of the fund's revenues and investment earnings and transfers from other funds
do not meet the definition of a specific revenue source.
Primary Issues to Consider
• Are commitments of Specific Revenue Sources and Fund Balances appropriate
Supportina Information
• Resolution 2011-071 Financial Impact: $ none Budgeted: Y/N
Source:
• �� Related Documents (CIP, ERP, etc.):
Notes:
Christine M. Harkess, CPA, CGFM
Finance Director
•
U
C7
CITY OF HOPKINS
Hennepin County, Minnesota
RESOLUTION NO. 2011-071
A RESOLUTION COMMITTING REVENUES AND FUND BALANCES
IN ACCORDANCE WITH GASB 54
WHEREAS, the Governmental Accounting Standards Board (GASB) has adopted Statement 54
(GASB 54), a new standard for governmental fund balance reporting and governmental fund
type definitions that became effective in governmental fiscal years starting after June 15,
2010, and
WHEREAS, the City Council of the City of Hopkins elects to implement GASB 54 requirements,
and to apply such requirements to its financial statements beginning with the current
(January 1, - December 31, 2011) fiscal year; and
WHEREAS, GASB 54 requires the governing body to formalize the commitment of the specific
revenue sources to specified purposes.
NOW THEREFORE BE IT RESOLVED, by the Hopkins City Council that effective December 31,
2011, the specific revenue source of each special revenue fund and the specific purposes for
which they are committed are as follows:
Fund
Economic Development
Real Estate Purchases
Parking
Communications
Depot Coffee House
Art Center
Specific Revenue Source
Tax Levy
Permits
Charges for Service
Fees, Licenses, and Permits
Charges for Service
Charges for Service
Committed For
Economic Development
Economic Development
Parking Operations
Communication Operations
Depot Coffee House Operations
Hopkins Center for the Arts
AND BE IT FURTHER RESOLVED, that any unrestricted fund balance in any special revenue
fund is committed by the council to the specific purpose of that fund.
Adopted by the City Council of the City of Hopkins this 20th day of December 2011.
ATTEST:
Kristine A. Luedke, City Clerk
LIM
Eugene Maxwell, Mayor