3.8 Approving Transfer of Funds - Fund Balance Policy
Request for
City Council Action
DEPARTMENT INFORMATION
ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE:
Administration City Administrator/Finance Director Flaherty December 11, 2023
PRESENTER(s) REVIEWED BY: ITEM #:
Consent 3.8 – Transfer of Funds – Fund
Balance Policy
STRATEGIC VISION
MEETS: THE CITY OF OTSEGO:
Is a strong organization that is committed to leading the community through innovative communication.
X 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 the 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 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
City Council and staff reviewed this transfer throughout the 2024 budget discussions. The City Council concurred that the
funds will be evaluated for use in offsetting the property tax levies for future City facilities.
The transfer of $710,829 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, 2023.
SUPPORTING DOCUMENTS ATTACHED:
• Fund Balance Policy
• Calculation of Proposed Transfer
• Resolution 2023-83
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES:
Motion to adopt Resolution 2023-83 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 Transfer2023Calculation Comments2023 General Fund Budget 7,976,649 Resolution 2022-98Minimum Fund Balance 3,589,492 The City's Fund Balance states that the minimum General Fund Balance should be 45% of the subsequent year budget.2022 Ending Fund Balance 4,951,443 Per Audited Financial Statements(260,757) Less: Fund Balance from Insurance Reserve Fund (#204) - Grouped with General for Financial Reporting(66,575) Less: Fund Balance from Educational Programming Fund (#215) - Grouped with General for Financial Reporting(121,590) 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.4,300,321 Fund Balance Available (Unassigned)Transfer 710,829 DRAFT - Presented to City Council on December 11, 2023Y:\Budget\2024\Calculation of Fund Balance Policy Transfers2023
1
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2023-83
APPROVING TRANSFER OF FUNDS
WHEREAS, the City of Otsego adopted a Fund Balance Policy in April 2011; 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 2024 budget discussions; and
WHEREAS, the City Council will review the future use of any amounts transferred and may determine that the funds be used
for any public purpose; 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 $710,829 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, 2023.
2
ADOPTED by the Otsego City Council this 11th day of December, 2023.
MOTION BY:
SECONDED BY:
IN FAVOR:
OPPOSED:
CITY OF OTSEGO
__________________________________
Jessica L. Stockamp, Mayor
ATTEST:
__________________________________
Audra Etzel, City Clerk