Loading...
HomeMy WebLinkAboutOrdinance No. 18-2012ORDINANCE NO. 18-2012 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CAPE CANAVERAL, BREVARD COUNTY, FLORIDA, AMENDING CHAPTER 2, ADMINISTRATION, ARTICLE V, FINANCE, DIVISION 1, GENERALLY, OF THE CAPE CANAVERAL CODE OF ORDINANCES; IMPLEMENTING A RECLASSIFICATION OF CITY RESERVES TO ENHANCE THE USEFULNESS OF THE FUND BALANCE REPORTING IN ACCORDANCE WITH GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB) STATEMENT 54, FUND BALANCE REPORTING AND GOVERNMENTAL FUND TYPE DEFINITIONS; PROVIDING FOR THE REPEAL OF PRIOR INCONSISTENT ORDINANCES AND RESOLUTIONS; INCORPORATION INTO CODE; SEVERABILITY; AND AN EFFECTIVE DATE. WHEREAS, the City is granted the authority, under Section 2(b), Article VIII, of the State Constitution, to exercise any power for municipal purposes, except when expressly prohibited by law; and WHEREAS, the City Council endorses sound financial policies and practices; and WHEREAS, the Governmental Accounting Standards Board has adopted Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions ("GASB 54"), a new standard for governmental fund balance reporting; and WHEREAS, the City Council desires to amend the Cape Canaveral City Code to implement GASB 54 requirements and to reclassify reserves and apply such requirements to its financial statements beginning with the October 1, 2012 to September 30, 2013 Fiscal Year and each fiscal year thereafter; and WHEREAS, the City Council of the City of Cape Canaveral, Florida hereby finds this Ordinance to be in the best interests of the public health, safety and welfare of the citizens of Cape Canaveral. BE IT ORDAINED by the City Council of the City of Cape Canaveral, Brevard County, Florida, as follows: Section 1. Recitals. The foregoing recitals are hereby fully incorporated herein by this reference as legislative findings and the intent and purpose of the City Council of the City of Cape Canaveral. Section 2. Code Amendment. Chapter 2, Administration, of the Code of Ordinances, City of Cape Canaveral, Florida, is hereby amended as follows (underlined type City of Cape Canaveral Ordinance 18-2012 Page 1 of 6 indicates additions and str-ikeetrt type indicates deletions, while asterisks (* * *) indicate a deletion from this Ordinance of text existing in Chapter 2. It is intended that the text in Chapter 2 denoted by the asterisks and set forth in this Ordinance shall remain unchanged from the language existing prior to adoption of this Ordinance): CHAPTER 2. ADMINISTRATION ARTICLE V. FINANCE DIVISION 1. GENERALLY Sec. 2-209. UtWzation of surplus resen,es. Reclassification of city reserves. (a) Definitions. Fund Balance - As defined by the Governmental Accounting, Auditing and Financial Reporting of the Government Finance Officers Association, fund balance is "The difference between assets and liabilities reported in a governmental fund." Non -Spendable Fund Balance — Amounts that are (a) not in spendable form or (b) legally or contractually required to be maintained intact. "Not in spendable form" includes items that are not expected to be converted to cash (such as inventories and prepaid amounts) and items such as long-term amount of loans and notes receivable, as well as property acquired for resale. The corpus (or principal) of a permanent fund is an example of an amount that is legally or contractually required to be maintained intact. Restricted Fund Balance — Amounts that can be spent only for specific purposes stipulated by (a) external resource providers such as creditors (by debt covenants), grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation. Committed Fund Balance — Amounts that can be used only for the specific purposes determined by a formal action (resolution) of the City Council, the City's highest level of decision making_ authority. Commitments may be changed or lifted only by the City Council taking the same formal action (resolution) that imposed the constraint originally. Resources accumulated pursuant to stabilization arrangements sometimes are reported in this category. Assikned Fund Balance — Includes spendable fund balance amounts established by management of the City that are intended to be used for specific purposes that are neither considered restricted or committed. City of Cape Canaveral Ordinance 18-2012 Page 2 of 6 Unassigned Fund Balance - Unassigned fund balance is the residual classification for the general fund. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific pumoses within the general fund. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those specific purposes. Unrestricted Fund Balance - The total of committed fund balance, assigned fund balance, and unassigned fund balance. Purpose. The City hereby establishes and will maintain Fund Balance, as defined herein, in accordance with Governmental Accounting and Financial Standards Board Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. Fund Balance shall be composed of non -spendable, restricted, committed, assigned and unassigned amounts. A Fund Balance Policy is adopted in order to secure and maintain investment-grade credit ratings, meet seasonal shortfalls in cash flow, and reduce susceptibility to emergency or unanticipated expenditures and/or revenue shortfalls. Fund balance information is used to identify the available resources to repay long-term debt, reduce property taxes, add new governmental programs, expand existing ones, or enhance the financial position of the City, in accordance with policies established by the City Council. This Fund Balance Policy establishes: The fund balance policy for the general fund; Reservations of fund balance for the general fund; The method of budgeting the amount of estimated unrestricted fund balance (also known as estimated be iinninz fund balance) available for appropriation during the annual budget adoption process (prior to the actual, audited fund balance being known) and what actions may need to be taken if the actual fund balance is significantly different than the budgeted fund balance; and The spending order of fund balances. in the event that the eamings balanee exeeeds ttar-esen,ed undesignated the ametints set fund balanee or- unfeserwed retained fefth above, the o e may be utilized for- lawful Pufpese. Nevertheless, the e*eess within the fund itis reeemmended-that in whieb it was fifstpfiefity be -given -to uti-lizi g generated. in er-der to minimize the lengteffn City of Cape Canaveral Ordinance 18-2012 Page 3 of 6 Sec. 2-210. Replenishment of reserve defiefts. Fund balance policy. (a) Restricted fund balance. There is no restricted fund balance in the General Fund. Amounts that can be spent only for specific purposes stipulated by external resource providers such as creditors (by debt covenants), grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation, will be budgeted and reported in special revenue funds, capital project funds or debt service funds. Committed fund balance. Commitment of fund balance may be made for such purposes including, but not limited to, (a) major maintenance and repair projects; (b) meeting future obligations resulting from a natural disaster; (c) accumulating resources pursuant to stabilization arrangements; (d) establishing reserves for disasters; and/or (e) for setting aside amounts for specific projects. Commitment of fund balance may be made from time -to time by resolution of the City Council. Commitments may be changed or lifted only the City Council taking the same formal action that imposed the constraint originallyresolution). The use (appropriation) of committed fund balances will be considered in conjunction with the annual budget adoption process or by amendment approved by resolution of City Council during the fiscal year. (c) Assigned fund balance. Assignment of fund balance may be (a) made for a specific purpose that is narrower than theeg neral purposes of the government itself, and/or (b) used to reflect the appropriation of a portion of existingunassigned fund balance to eliminate a projected deficit in the subsequent year's budget in an amount no greater than the projected excess of expected expenditures over expected revenues. Assigned fund balance shall reflect management's intended use of resources as set forth in the annual budget (and any amendments thereto). Assigned fund balance may or may not be appropriated for expenditure in the subsequent year depending on the timing of the project/reserve for which it was assigned. Non -spendable fund balance. Non -spendable fund balance is established to report items that are not expected to be converted to cash such as inventory and prepaid items; items not currently in cash form such as the long-term amount of loans and notes receivable as well as property acquired for resale; and, items legally or contractually required to be maintained intact such as the corpus (or principal) of a permanent fund. (e) Minimum level of unassigned fund balance. Unassigned fund balance is the residual classification for the general fund and represents fund balance that has not been restricted, committed or assigned to specific purposes within the general fund. City of Cape Canaveral Ordinance 18-2012 Page 4 of 6 If, after the annual audit, prior committed or assigned fund balance causes the unassigned fund balance to fall below 17% of general fund operating expenditures, the City Manager will so advise City Council in order for the necessary action to be taken to restore the unassigned fund balance to 20% of General Fund operating expenditures. The City Manager will prepare and submit a plan for committed and/or assigned fund balance reduction, expenditure reductions and/or revenue increases to City Council. The City shall take action necessary to restore the unassigned fund balance to acceptable levels within two years. if-, at the end of an), fiseal year-, the aettial amount of unfesefved, undesignated fund balanee or—anr-esei:ved retained eafnings falls below the managff shall prepare and submit a plan for- e�Ependitiar-e r-equir-ed levels set fet4h herein, or- e*pense r-eduetions ity the e f- and/or- revenue and amend the plan submit4ed by the eity manager- the fequir-ed ametint must be fester -ed no Wer- than the for- r-estefing the ametint end of the seeend fiseal year- of UHr-esefN, fellewing i Sec. 2-211. Annual revi Spending order of fund balances. The Citv uses restricted amounts to be spent first when both restricted and unrestricted fund balance is available unless there are legal documents/contracts that prohibit doing this, such as inrg ant agreements requiring dollar for dollar spending. Additionally, the City would first use committed fund balance, followed by assigned fund balance and then unassigned fund balance when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used. Sec. 2-212. ReseFved. Annual review and determination of fund balance policy. Compliance with the provisions of this Dolicv shall be reviewed as a Dart of the annual budget adoption process, and the amounts of restricted, committed, assigned, non -spendable and the minimum level of unassigned fund balance shall be determined during this Drocess. Section 3. Repeal of Prior Inconsistent Ordinances and Resolutions. All prior inconsistent ordinances and resolutions adopted by the City Council, or parts of prior ordinances and resolutions in conflict herewith, are hereby repealed to the extent of the conflict. Section 4. Incorporation Into Code. This Ordinance shall be incorporated into the Cape Canaveral City Code and any section or paragraph, number or letter, and any heading may be changed or modified as necessary to effectuate the foregoing. Grammatical, typographical, City of Cape Canaveral Ordinance 18-2012 Page 5 of 6 like errors may be corrected and additions, alterations, and omissions, not affecting the construction or meaning of this Ordinance and the City Code may be freely made. Section 5. Severability. If any section, subsection, sentence, clause, phrase, word or provision of this Ordinance is for any reason held invalid or unconstitutional by any court of competent jurisdiction, whether for substantive, procedural, or any other reason, such portion shall be deemed a separate, distinct and independent provision, and such holding shall not affect the validity of the remaining portions of this Ordinance. Section 6. Effective Date. This Ordinance shall become effective immediately upon adoption by the City Council of Cape Canaveral, Florida. ADOPTED BY the City Council of the City of Cape Canaveral, Brevard County, Florida, this 20th day a-Npvember, 2012. ATTEST_;_ `4% 4p, Angela Apperson, Assistant City Manager/ City Clerk Approved as to form and legal sufficiency for the of Cape Canaveral only: nthony . Garganese, City Attorney First Reading: October 16, 2012 Legal ad Published: is Second Reading: November 20, 2012 ATTEST_;_ `4% 4p, Angela Apperson, Assistant City Manager/ City Clerk Approved as to form and legal sufficiency for the of Cape Canaveral only: nthony . Garganese, City Attorney First Reading: October 16, 2012 Legal ad Published: October 25, 2012 Second Reading: November 20, 2012 (:?,4 4'? Q4& Rocky Randels, Mayor Name For John Bond X Robert Hoog x Buzz Petsos Second Rocky Randels X Betty Walsh Motion City of Cape Canaveral Ordinance 18-2012 Page 6 of 6 Against