3.13 Transfer of Funds in Accordance with Fund Balance Policy
Request for
City Council Action
DEPARTMENT INFORMATION
ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE:
Administration City Administrator/Finance Director Flaherty December 12, 2022
PRESENTER(s) REVIEWED BY: ITEM #:
Consent 3.13 – Interfund Transfer
STRATEGIC VISION
MEETS: THE CITY OF OTSEGO:
X Is a strong organization that is committed to leading the community through innovative
communication.
Has proactively expanded infrastructure to responsibly provide core services.
Is committed to delivery of quality emergency service responsive to community needs and
expectations in a cost-effective manner.
Is a social community with diverse housing, service options, and employment opportunities.
Is a distinctive, connected community known for its beauty and natural surroundings.
AGENDA ITEM DETAILS
RECOMMENDATION:
City staff is recommending that the City Council approve a resolution approving transfer of funds.
ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED?
No No
BACKGROUND/JUSTIFICATION:
The City has an adopted Fund Balance Policy. Within said policy, Section 03.03.07, Paragraph “C”
establishes the minimum fund balance for the City’s General Fund as 45% of the subsequent year
expenditure budget. The policy also outlines the procedures when the actual fund balance exceeds the
defined minimum. In the instance where fund balance exceeds the 45% level, the excess will be transferred
to the Capital Improvements Revolving fund with the City Council reviewing the future use of said funds.
The City Council and staff reviewed this transfer throughout the 2023 budget discussions. The
Administrative Subcommittee further reviewed the proposed transfer at the December 7 meeting with
direction to follow the established policy.
The Fund Balance Policy further outlines that the City Council will review the future use of any amounts
transferred to the Revolving Capital Improvements Fund and may determine that the monies may be used
for any public purpose.
The transfer of $1,266,290 will be between the General Fund and the Capital Improvement Revolving Fund
and will be reflected in the City’s Annual Comprehensive Financial Report for the year ended December 31,
2022.
SUPPORTING DOCUMENTS ATTACHED:
• Fund Balance Policy
• Calculation of Proposed Transfer
• Resolution 2022-95
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES:
Motion to adopt Resolution 2022-95 approving the transfer of funds in accordance with the City’s Fund
Balance Policy.
BUDGET INFORMATION
FUNDING: BUDGETED:
N/A
N/A
City of OtsegoFund Balance Policy General Fund Transfer2022Calculation Comments2022 General Fund Budget 7,347,416 Resolution 2021‐100Minimum Fund Balance 3,306,337 The City's Fund Balance states that the minimum General Fund Balance should be 45% of the subsequent year budget.2021 Ending Fund Balance 5,199,901 Per Audited Financial Statements(245,758) Less: Fund Balance from Insurance Reserve Fund (#204) ‐ Grouped with General for Financial Reporting(27,043) Less: Fund Balance from Educational Programming Fund (#215) ‐ Grouped with General for Financial Reporting(152,273) Less: Nonspendable Fund Balance ‐ Financial Reporting Requirement ‐ Funds actually have alredy been expended.(202,200) Less: Nonspendable Fund Balance ‐ Financial Reporting Requirement ‐ Future funds from land for resale proceeds.4,572,627 Fund Balance Available (Unassigned)Transfer (2022 Budget) 1,266,290 DRAFT ‐ Presented to City Council on December 12, 2022Y:\Budget\2023\Calculation of Fund Balance Policy Transfers2022
1
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2022-95
APPROVING TRANSFER OF FUNDS
WHEREAS, the City of Otsego has an adopted Fund Balance Policy; and
WHEREAS, Section 03.03.07 Paragraph C of the Fund Balance Policy establishes the minimum fund balance
for the City’s General Fund as 45% of the subsequent year expenditure budget; and
WHEREAS, the Fund Balance Policy outlines the procedures when the actual fund balance exceeds the
defined minimum; and
WHEREAS, that in the instance where fund balance exceeds the minimum, the excess will be transferred upon
review of the City Council; and
WHEREAS, the City Council has reviewed the transfer of funds throughout the 2023 budget discussions; and
WHEREAS, upon recommendations by the Finance Director, the transfer of funds would aid the financial
stability of the City’s Capital Improvement Plan; and
WHEREAS, governmental accounting requires that monies dedicated to specific projects or activities are
accounted for within a separate fund of the City.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA:
1. That in accordance with the City’s Fund Balance Policy, a transfer of funds in the amount of
$1,266,290 will be made from the City’s General Fund to the Capital Improvements Revolving Fund.
2. That the transfer of funds will be recorded within the City’s financial records for the year ended
December 31, 2022.
2
ADOPTED by the Otsego City Council this 12th day of December, 2022.
MOTION BY:
SECONDED BY:
IN FAVOR:
OPPOSED:
CITY OF OTSEGO
__________________________________
Jessica L. Stockamp, Mayor
ATTEST:
__________________________________
Audra Etzel, City Clerk