Item T4 County of Monroe BOARD OF COUNTY COMMISSIONERS
,Q
73'r \ Mayor Sylvia Murphy,District 5
wu Mayor Pro Tern Danny Kolhage,District 1
The Florida Keys Michelle Coldiron,District 2
Heather Carruthers,District 3
David Rice,District 4
County Commission Meeting
September 18, 2019
Agenda Item Number: T.4
Agenda Item Summary #6080
BULK ITEM: Yes DEPARTMENT: Budget and Finance
TIME APPROXIMATE: STAFF CONTACT: Tina Boan (305) 292-4470
N/A
AGENDA ITEM WORDING: Approval to correct scrivener's errors, change wording for 21.0
from unassigned to unrestricted within the Financial Policy and bring the Financial Policy in line
with Governmental Financial Officers Association (GFOA) Best Practices/Fund Balance Guidelines
for the General Fund.
ITEM BACKGROUND: GFOA recommends that governments establish a formal policy on the
level of unrestricted fund balance that should be maintained in the general fund for generally
accepted accounting principles (GAAP) and budgetary purposes.
PREVIOUS RELEVANT BOCC ACTION: On December 14, 2011 the BOCC approved the
Financial Policy, as required by the Governmental Accounting Standards Board (GASB) Statement
54, effective beginning with the Fiscal Year Ending 2011.
CONTRACT/AGREEMENT CHANGES:
N/A
STAFF RECOMMENDATION: Approval.
DOCUMENTATION:
GFOA Fund Balance Guidelines for the General Fund
MC BOCC Fund Balance Policy FY19 - Clean
MC BOCC Fund Balance Policy FY19 with changes
FINANCIAL IMPACT:
Effective Date: N/A
Expiration Date: N/A
Total Dollar Value of Contract: N/A
Total Cost to County:
Current Year Portion:
Budgeted:
Source of Funds:
CPI:
Indirect Costs:
Estimated Ongoing Costs Not Included in above dollar amounts:
Revenue Producing: If yes, amount:
Grant:
County Match:
Insurance Required:
Additional Details:
REVIEWED BY:
Tina Boan Completed 09/10/2019 12:34 PM
Christine Limbert Completed 09/10/2019 3:51 PM
Kathy Peters Completed 09/10/2019 3:52 PM
Board of County Commissioners Completed 09/18/2019 9:00 AM
3/25/2019 Fund Balance Guidelines for the General Fund
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Fund Balance Guidelines for the
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BACKGROUND:
In the context of financial reporting, the term fund balance is used to describe the net position of
governmental funds calculated in accordance with generally accepted accounting principles (GAAP).
Budget professionals commonly use this same term to describe the net position of governmental
funds calculated on a government's budgetary basis.' While in both cases fund balance is intended
to serve as a measure of the financial resources available in a governmental fund; it is essential that
differences between GAAP fund balance and budgetary fund balance be fully appreciated.
1. GAAP financial statements report up to five separate categories of fund balance based on the
type and source of constraints placed on how resources can be spent(presented in
descending order from most constraining to least constraining): nonspendable fund balance,
restricted fund balance, committed fund balance, assigned fund balance, and unassigned
fund balance.2 The total of the amounts in these last three categories (where the only
constraint on spending, if any, is imposed by the government itself) is termed unrestricted
fund balance. In contrast, budgetary fund balance, while it is subject to the same constraints
on spending as GAAP fund balance, typically represents simply the total amount accumulated
from prior years at a point in time.
2. The calculation of GAAP fund balance and budgetary fund balance sometimes is complicated
by the use of sub-funds within the general fund. In such cases, GAAP fund balance includes
amounts from all of the subfunds, whereas budgetary fund balance typically does not.
3. Often the timing of the recognition of revenues and expenditures is different for purposes of
GAAP financial reporting and budgeting. For example, encumbrances arising from purchase
orders often are recognized as expenditures for budgetary purposes, but never for the
preparation of GAAP financial statements.
The effect of these and other differences on the amounts reported as GAAP fund balance and
budgetary fund balance in the general fund should be clarified, understood, and documented.
It is essential that governments maintain adequate levels of fund balance to mitigate current and
future risks(e.g., revenue shortfalls and unanticipated expenditures) and to ensure stable tax rates.
In most cases, discussions of fund balance will properly focus on a government's general fund.
Nonetheless, financial resources available in other funds should also be considered in assessing the
adequacy of unrestricted fund balance in the general fund.
RECOMMENDATION:
www.gfoa.org/print/5024 1/4
3/25/2019 Fund Balance Guidelines for the General Fund
GFOA recommends that governments establish a formal policy on the level of unrestricted fund
balance that should be maintained in the general fund for GAAP and budgetary purposes.3 Such a
guideline should be set by the appropriate policy body and articulate a framework and process for
how the government would increase or decrease the level of unrestricted fund balance over a
specific time period.4 In particular, governments should provide broad guidance in the policy for
how resources will be directed to replenish fund balance should the balance fall below the level
prescribed.
Appropriate Level. The adequacy of unrestricted fund balance in the general fund should take into
account each government's own unique circumstances. For example, governments that may be
vulnerable to natural disasters, more dependent on a volatile revenue source, or potentially subject
to cuts in state aid and/or federal grants may need to maintain a higher level in the unrestricted fund
balance. Articulating these risks in a fund balance policy makes it easier to explain to stakeholders
the rationale for a seemingly higher than normal level of fund balance that protects taxpayers and
employees from unexpected changes in financial condition. Nevertheless, GFOA recommends, at a
minimum, that general-purpose governments, regardless of size, maintain unrestricted budgetary
fund balance in their general fund of no less than two months of regular general fund operating
revenues or regular general fund operating expenditures.5 The choice of revenues or expenditures
as a basis of comparison may be dictated by what is more predictable in a government's particular
circumstances.6 Furthermore, a government's particular situation often may require a level of
unrestricted fund balance in the general fund significantly in excess of this recommended minimum
level. In any case, such measures should be applied within the context of long-term forecasting,
thereby avoiding the risk of placing too much emphasis upon the level of unrestricted fund balance in
the general fund at any one time. In establishing a policy governing the level of unrestricted fund
balance in the general fund, a government should consider a variety of factors, including:
1. The predictability of its revenues and the volatility of its expenditures(i.e., higher levels of
unrestricted fund balance may be needed if significant revenue sources are subject to
unpredictable fluctuations or if operating expenditures are highly volatile);
2. Its perceived exposure to significant one-time outlays (e.g., disasters, immediate capital
needs, state budget cuts);
3. The potential drain upon general fund resources from other funds, as well as, the availability
of resources in other funds;
4. The potential impact on the entity's bond ratings and the corresponding increased cost of
borrowed funds;
5. Commitments and assignments (i.e., governments may wish to maintain higher levels of
unrestricted fund balance to compensate for any portion of unrestricted fund balance already
committed or assigned by the government for a specific purpose). Governments may deem it
appropriate to exclude from consideration resources that have been committed or assigned to
some other purpose and focus on unassigned fund balance, rather than on unrestricted fund
balance.
Use and Replenishment.
The fund balance policy should define conditions warranting its use, and if a fund balance falls below
the government's policy level, a solid plan to replenish it. In that context, the fund balance policy
should:
1. Define the time period within which and contingencies for which fund balances will be used;
2. Describe how the government's expenditure and/or revenue levels will be adjusted to match
any new economic realities that are behind the use of fund balance as a financing bridge;
3. Describe the time period over which the components of fund balance will be replenished and
the means by which they will be replenished.
www.gfoa.org/print/5024 2/4
3/25/2019 Fund Balance Guidelines for the General Fund
Generally, governments should seek to replenish their fund balances within one to three years of
use. Specifically, factors influencing the replenishment time horizon include:
1. The budgetary reasons behind the fund balance targets;
2. Recovering from an extreme event;
3. Political continuity;
4. Financial planning time horizons;
5. Long-term forecasts and economic conditions;
6. External financing expectations.
Revenue sources that would typically be looked to for replenishment of a fund balance include
nonrecurring revenues, budget surpluses, and excess resources in other funds (if legally permissible
and there is a defensible rationale). Year-end surpluses are an appropriate source for replenishing
fund balance.
Unrestricted Fund Balance Above Formal Policy Requirement. In some cases, governments can
find themselves in a position with an amount of unrestricted fund balance in the general fund over
their formal policy reserve requirement even after taking into account potential financial risks in the
foreseeable future. Amounts over the formal policy may reflect a structural trend, in which case
governments should consider a policy as to how this would be addressed. Additionally, an education
or communication strategy, or at a minimum, explanation of large changes in fund balance is
encouraged. In all cases, use of those funds should be prohibited as a funding source for ongoing
recurring expenditures.
(Votes
1. For the sake of clarity, this recommended practice uses the terms GAAP fund balance and
budgetary fund balance to distinguish these two different uses of the same term.
2. These categories are set forth in Governmental Accounting Standards Board (GASB)
Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions.
3. Sometimes restricted fund balance includes resources available to finance items that typically
would require the use of unrestricted fund balance (e.g., a contingency reserve). In that case,
such amounts should be included as part of unrestricted fund balance for purposes of
analysis.
4. See Recommended Practice 4.1 of the National Advisory Council on State and Local
Budgeting governments on the need to"maintain a prudent level of financial resources to
protect against reducing service levels or raising taxes and fees because of temporary
revenue shortfalls or unpredicted one-time expenditures" (Recommended Practice 4.1).
5. In practice, a level of unrestricted fund balance significantly lower than the recommended
minimum may be appropriate for states and America's largest governments(e.g., cities,
counties, and school districts) because they often are in a better position to predict
contingencies(for the same reason that an insurance company can more readily predict the
number of accidents for a pool of 500,000 drivers than for a pool of fifty), and because their
revenues and expenditures often are more diversified and thus potentially less subject to
volatility.
6. In either case, unusual items that would distort trends(e.g., one-time revenues and
expenditures)should be excluded, whereas recurring transfers should be included. Once the
decision has been made to compare unrestricted fund balance to either revenues and/or
expenditures, that decision should be followed consistently from period to period.
This best practice was previously titled Appropriate Level of Unrestricted Fund Balance in the
General Fund.
www.gfoa.org/print/5024 3/4
3/25/2019 Fund Balance Guidelines for the General Fund
203 IN 1L..a3alllle Street Sulite 2700 1 Chicago, 111L..60601 1210 1 �::'Ihoine:(312)977 9700 ll:::ax:(312)977 4806
www.gfoa.org/print/5024 4/4
Monroe County Board of County Commissioners
Financial Policy
BACKGROUND
The Monroe County Board of County Commissioners (`BOCC') recognizes its
responsibility to manage the tax-payers money in a financially prudent way to promote
fiscal sustainability and accountability while ensuring the health, safety and welfare of
the citizens. The BOCC believes that sound financial management principles require that
sufficient funds be retained by the County to provide a stable financial base at all times.
To retain this stable financial base, the County needs to maintain a fund balances
sufficient to fund all cash flows of the County, to provide financial reserves for
unanticipated expenditures and/or revenue shortfalls for an emergency nature, to provide
funds for the disparity in timing between property tax collection, sales tax distributions
as well as other revenues and expenditures, and to secure and maintain investment grade
bond ratings.
General Policy
1.0 The Operating Budget authorizing the expenditure of county funds will be
adopted annually by the BOCC at the fund level.
2.0 The Budgeted expenditures and reserves of each fund including the reserve for
contingencies, reserve for cash, cash carry forward, and all other purposes will
equal the sum of projected beginning balances for the fiscal year and all revenues
which reasonably can be expected to be received during the fiscal year. That is,
the budget shall be balanced;the total estimated revenue including balances
brought forward, shall equal the total of the appropriations and reserves.
3.0 The Office of Management & Budget (OMB) shall estimate 100%of all revenue
reasonably anticipated from all sources, a 5% holdback for non-collection will be
applied. This will be the basis for budgeted revenue (95% of anticipated receipts).
1
Budgetary Control Policy
4.0 Adoption and amendment of the budget during each fiscal year will be in
accordance with the laws of Florida.
4.1.1 Transfers among expenditure and revenue accounts may be made
during the fiscal year within a cost center. All transfers must be
approved by OMB or the County/Assistant County Administrator.
4.1.2 The BOCC has increased the level of control for cost center
(departmental) budgetary changes by requiring a County Commission
resolution for cost center transfers.
Revenue Policy
5.0 The use of ad Valorem tax revenues will be limited to the General Fund,
Fine & Forfeiture Fund, General Purpose Municipal Service Taxing Unit
funds, Local Road Patrol Law Enforcement District, Lower & Middle Keys
Fire & Ambulance Dist. 1, and Municipal Service Taxing Districts.
6.0 The use of Gas taxes will be limited to the Road &Bridge Fund for operating
and capital projects as authorized by statute.
7.0 Tourist Development Tax Proceeds will be appropriate in accordance with
the formula contained in the Tourist Development Tax Ordinance.
8.0 All other Sales Tax Revenue will be used as statutorily authorized.
9.0 The use of revenues that have been pledged to bondholders will conform in
every respect to the bond covenants that commit those revenues.
10.0 Fee revenues will be anticipated for purposes of budget preparation
conservatively using fee schedules that have been adopted by the Board and
historical collection rates.
11.0 Cash balances remaining in any fund at year-end will stay in that fund for
subsequent years.
12.0 Revenues that are reasonably expected to be unexpended and unencumbered at
the end of the fiscal year shall revert to fund balance.
2
13.0 Special Revenues collected for specific purpose will be used as statutorily
authorized.
14.0 Impact Fee Revenue shall always be used for projects related to "growth" and
not be used to correct existing deficiencies.
Capital Improvement Projects Policy
15.0 The Capital Improvement Plan (CIP) Budget showing estimated annualized
costs of capital projects will be updated on an annual basis.
16.0 A capital project may not be added or deleted without approval of the Board.
17.0 An adopted capital project may not be amended or changed more than necessary
to fulfill the original intent of the project. No funds may be added or deleted
which change the outcome of the project without Board approval.
COMPREHENSIVE FUND BALANCE POLICIES
The Governmental Accounting Standards Board ("GASB") issued Statement No. 54,
Fund Balance Reporting and Governmental Fund Type Definitions ("GASB-54').One
objective of this standard was to improve, including the understandability, the
usefulness of fund balance information by providing clear fund balance classifications.
GASB-54 abandons the reserved, unreserved, and designated classifications of fund
balance and replaced them with five classifications: non-spendable, restricted,
committed, assigned, and unassigned. The requirements of this statement are effective
for the BOCC's financial statements for the fiscal year ending September 30,2011.
GASB-54 requires local governments to focus on the constraints imposed upon
resources when reporting fund balance in governmental funds. The fund balance
classifications indicate the level of constraints placed upon how resources can be spent
and identify the sources of those constraints. The following five classifications serve
to inform readers of the financial statements of the extent to which the County is
bound to honor constraints on the specific purposes for which resources in a fund can
be spent.
3
Definitions
Non-spendable Fund Balance — Fund balance reported as "non-spendable"
represents fund balance that is (a)not in a spendable form such as prepaid items or
(b)legally or contractually required to be maintained intact such as an endowment.
Restricted Fund Balance — Fund balance reported as "restricted" consists of
amounts that can be spent only on the specific purposes stipulated by law or by the
external providers ofthose resources.
Committed Fund Balance —Fund balance reported as "committed" are self-imposed
limitations set in place prior to the end of the fiscal period.These amounts can be used
only for the specific purposes determined by a formal action of the BOCC, which is
the highest level of decision-making authority, and that require the same level of
formal action to remove the constraint.
Assigned Fund Balance — Fund balance reported as "assigned" consists of amounts
that are subject to a purpose constraint that represents an intended use established by
the BOCC or by their designated body or official. The purpose of the assignment must
be narrower than the purpose of the General Fund. Formal action is not necessary to
impose, remove, or modify a constraint in Assigned Fund Balance. Additionally, this
category is used to reflect the appropriation of a portion of existing fund balance to
eliminate a projected deficit in the subsequent year's budget.
Unassigned Fund Balance — Fund balance reported as "unassigned" represents the
residual classification of fund balance and includes all spendable amounts not
contained within the other classifications.
18.0 Policy on committing funds
In accordance with GASB-54, it is the policy of the Monroe County Board of
County Commissioners (BOCC") that fund balance amounts will be reported
as"Committed Fund Balance" only after formal action and approval by BOCC.
The action to constrain amounts in such a manner must occur prior to year-end;
however, the actual dollar amount may be determined in the subsequent period.
For example, the BOCC may approve a motion prior to year-end to report
within the year-end financial statements, if available, up to a specified dollar
amount as Committed Fund Balance for capital projects. The exact dollar
amount to be reported as Committed Fund Balance for capital projects may not
be known at the time of approval due to the annual financial audit not yet being
4
completed. This amount can be determined at a later date when known and
appropriately reported within the year-end financial statements due to the
governing body approving this action before year-end.
It is the policy of the BOCC that the County may commit fund balance for any
reason that is consistent with the definition of Committed Fund Balance
contained within GASB-54. Examples of reasons to commit fund balance
would be to display intentions to use portions of fund balance for future capital
projects, stabilization funds, or to earmark special General Fund revenue
streams unspent at year-end that are intended to be used for specific purposes.
After approval by the BOCC, the amount reported as Committed Fund Balance
cannot be reversed without utilizing the same process required to commit the
funds. Therefore, in accordance with GASB-54, it is the policy of the BOCC
that funds can only be removed from the Committed Fund Balance category
after motion and approval by the BOCC.
19.0 Policy on Committed General Fund Balance
The BOCC has the responsibility of responding to emergency disaster and will
set a goal of $10 million dollars in disaster reserve funds to ensure adequate
cash flow is available in post-disaster situations. In the event these funds fall
below the set amount an action plan to begin the replenishment to the
appropriate level will be addressed in the ensuing budget year.
20.0 Policy on assigning funds
In accordance with GASB-54, funds that are intended to be used for a specific
purpose but have not received the formal approval action at the governing body
level may be recorded as Assigned Fund Balance. Likewise, redeploying assigned
resources to an alternative use does not require formal action by the governing
body. GASB-54 states that resources can be assigned by the governing body or by
another internal body or person whom the governing body gives the authority to
do so, such as a committee or employee of the County. Therefore, having
considered the requirements to assign fund balance, it is the policy of the BOCC
that the County Administrator will have the authority to assign fund balance of
this organization based on intentions for use of fund balance communicated by the
BOCC.
5
21.0 Policy on Unrestricted General Fund Balance
Unrestricted fund balance is the amount of fund balance that the BOCC has placed
constraints on its use (committed or assigned fund balance) plus the fund balance
that does not have any specific purpose identified for the use of those net resources
(unassigned fund balance).
It is the goal of the BOCC to achieve and maintain an unrestricted General Fund
balance equal to four months of budgeted expenditures. The County considers a
balance of less than four months to be a cause for concern, barring unusual or
deliberate circumstances, and a balance of more than six months as excessive. An
amount in excess of six months is to be considered for reservation to accumulate
funding for capital projects and equipment, and/or to reduce the tax levy
requirements, and shall be determined in conjunction with the annual budget
process. In the event that the unrestricted General Fund balance is less than the
policy anticipates, the County shall plan to adjust budgeted resources in the
subsequent fiscal years to restore the balance. Appropriation from unrestricted
General Fund balance shall require the approval of the BOCC and shall be only
for one-time expenditures, such as capital purchases, and not for ongoing
expenditures unless a viable plan designated to sustain the expenditures is
simultaneously adopted.
6
Monroe County Board of County Commissioners
Financial Policy
BACKGROUND
The Monroe County Board of County Commissioners (`BOCC') recognizes its
responsibility to manage the tax-payers money in a financially prudent way to promote
fiscal sustainability and accountability while ensuring the health, safety and welfare of
the citizens. The BOCC believes that sound financial management principles require that
sufficient funds be retained by the County to provide a stable financial base at all times.
To retain this stable financial base, the County needs to maintain a fund balances
sufficient to fund all cash flows of the County, to provide financial reserves for
unanticipated expenditures and/or revenue shortfalls for an emergency nature, to provide
funds for the disparity in timing between property tax collection, sales tax distributions
as well as other revenues and expenditures, and to secure and maintain investment grade
bond ratings.
General Policy
1.0 The Operating Budget authorizing the expenditure of county funds will be
adopted annually by the BOCC at the fund level.
2.0 The Budgeted expenditures and reserves of each fund including the reserve for
contingencies, reserve for cash, cash carry forward, and all other purposes will
equal the sum of projected beginning balances for the fiscal year and all revenues
which reasonably can be expected to be received during the fiscal year. That is,
the budget shall be balanced;the total estimated revenue including balances
brought forward, shall equal the total of the appropriations and reserves.
3.0 The Office of Management & Budget (OMB) shall estimate 100%of all revenue
reasonably anticipated from all sources, a 5% holdback for non-collection will be
applied. This will be the basis for budgeted revenue (95% of anticipated receipts).
1
Budgetary Control Policy
4.0 Adoption and amendment of the budget during each fiscal year will be in
accordance with the laws of Florida.
4.1.1 Transfers among expenditure and revenue accounts may be made
during the fiscal year within a cost center. All transfers must be
approved by OMB or the County/V)epiil � A,'I'�,',,u ,Is'u-m ,olflul:
Administrator.
4.1.2 The BOCC has increased the level of control for cost center
(departmental) budgetary changes by requiring a County Commission
resolution for cost center transfers.
Revenue Policy
5.0 The use of ad Valorem tax revenues will be limited to the General Fund,
Fine & Forfeiture Fund, General Purpose Municipal Service Taxing Unit
funds, Local Road Patrol Law Enforcement District, Lower & Middle Keys
Fire & Ambulance Dist. 1, and Municipal Service Taxing Districts.
6.0 The use of Gas taxes will be limited to the Road &Bridge Fund for operating
and capital projects as authorized by statute.
7.0 Tourist Development Tax Proceeds will be appropriate in accordance with
the formula contained in the Tourist Development Tax Ordinance.
8.0 All other Sales Tax Revenue will be used as statutorily authorized.
9.0 The use of revenues that have been pledged to bondholders will conform in
every respect to the bond covenants that commit those revenues.
10.0 Fee revenues will be anticipated for purposes of budget preparation
conservatively using fee schedules that have been adopted by the Board and
historical collection rates.
11.0 Cash balances remaining in any fund at year-end will stay in that fund for
subsequent years.
12.0 Revenues that are reasonably expected to be unexpended and unencumbered at
the end of the fiscal year shall revert to fund balance.
2
13.0 Special Revenues collected for specific purpose will be used as statutorily
authorized.
14.0 Impact Fee Revenue shall always be used for projects related to "growth" and
not be used to correct existing deficiencies.
Capital Improvement Projects Policy
15.0 The Capital Improvement Plan (CIP) Budget showing estimated annualized
costs of capital projects will be updated on an annual basis.
16.0 A capital project may not be added or deleted without approval of the Board.
17.0 An adopted capital project may not be amended or changed more than necessary
to fulfill the original intent of the project. No funds may be added or deleted
which change the outcome of the project without Board approval.
COMPREHENSIVE FUND BALANCE POLICIES
The Governmental Accounting Standards Board ("GASB") issued Statement No. 54,
Fund Balance Reporting and Governmental Fund Type Definitions ("GASB-54').One
objective of this standard was to improve, including the understandability, the
usefulness of fund balance information by providing clear fund balance classifications.
GASB-54 abandons the reserved, unreserved, and designated classifications of fund
balance and replaced them with five classifications: non-spendable, restricted,
committed, assigned, and unassigned. The requirements of this statement are effective
for the BOCC's financial statements for the fiscal year ending September 30,2011.
GASB-54 requires local governments to focus on the constraints imposed upon
resources when reporting fund balance in governmental funds. The fund balance
classifications indicate the level of constraints placed upon how resources can be spent
and identify the sources of those constraints. The following five classifications serve
to inform readers of the financial statements of the extent to which the County is
bound to honor constraints on the specific purposes for which resources in a fund can
be spent.
3
Definitions
Non-spendable Fund Balance — Fund balance reported as "non-spendable"
represents fund balance that is (a)not in a spendable form such as prepaid items or
(b)legally or contractually required to be maintained intact such as an endowment.
Restricted Fund Balance — Fund balance reported as "restricted" consists of
amounts that can be spent only on the specific purposes stipulated by law or by the
external providers ofthose resources.
Committed Fund Balance —Fund balance reported as "committed" are self-imposed
limitations set in place prior to the end of the fiscal period.These amounts can be used
only for the specific purposes determined by a formal action of the
��C , which is the highest level of decision-making authority, and that
require the same level of formal action to remove the constraint.
Assigned Fund Balance — Fund balance reported as "assigned" consists of amounts
that are subject to a purpose constraint that represents an intended use established by
the BOCC or by their designated body or official. The purpose of the assignment must
be narrower than the purpose of the General Fund. Formal action is not necessary to
impose, remove, or modify a constraint in Assigned Fund Balance. Additionally, this
category is used to reflect the appropriation of a portion of existing fund balance to
eliminate a projected deficit in the subsequent year's budget.
Unassigned Fund Balance — Fund balance reported as "unassigned" represents the
residual classification of fund balance and includes all spendable amounts not
contained within the other classifications.
18.0 Policy on committing funds
In accordance with GASB-54, it is the policy of the Monroe County Board of
County Commissioners (BOCC") that fund balance amounts will be reported
as "Committed Fund Balance" only after formal action and approval by sty
B0t:;"t:;". The action to constrain amounts in such a manner must occur
prior to year-end; however, the actual dollar amount may be determined in the
subsequent period.
For example, the BOCC may approve a motion prior to year-end to report
within the year-end financial statements, if available, up to a specified dollar
amount as Committed Fund Balance for capital projects. The exact dollar
4
amount to be reported as Committed Fund Balance for capital projects may not
be known at the time of approval due to the annual financial audit not yet being
completed. This amount can be determined at a later date when known and
appropriately reported within the year-end financial statements due to the
governing body approving this action before year-end.
It is the policy of the BOCC that the County may commit fund balance for any
reason that is consistent with the definition of Committed Fund Balance
contained within GASB-54. Examples of reasons to commit fund balance
would be to display intentions to use portions of fund balance for future capital
projects, stabilization funds, or to earmark special General Fund revenue
streams unspent at year-end that are intended to be used for specific purposes.
After approval by the BOCC, the amount reported as Committed Fund Balance
cannot be reversed without utilizing the same process required to commit the
funds. Therefore, in accordance with GASB-54, it is the policy of the BOCC
that funds can only be removed from the Committed Fund Balance category
after motion and approval by the BOCC.
19.0 Policy on Committed General Fund Balance R*YJ &
The BOCC has the responsibility of responding to emergency disaster and will
set a goal of $10 million dollars in disaster reserve funds to ensure adequate
cash flow is available in post-disaster situations. In the event these funds fall
below the set amount an action plan to begin the replenishment to the
appropriate level will be addressed in the ensuing budget year.
20.0 Policy on assigning funds
In accordance with GASB-54, funds that are intended to be used for a specific
purpose but have not received the formal approval action at the governing body
level may be recorded as Assigned Fund Balance. Likewise, redeploying assigned
resources to an alternative use does not require formal action by the governing
body. GASB-54 states that resources can be assigned by the governing body or by
another internal body or person whom the governing body gives the authority to
do so, such as a committee or employee of the County. Therefore, having
considered the requirements to assign fund balance, it is the policy of the BOCC
that " t]e County Administrator will have the authority to assign fund balance
of this organization based on intentions for use of fund balance communicated by
the BOCC.
5
21.0 Policy on r..e s tIJ c t..e d General Fund fimd-b4m' '� .B. a]1.1.1 c e.
(Jnrestricted. fand.balance is Jig ai-nount of fund.balance tliat tlie BOCC has )Lace(]
.....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................)dace(].
constraints on. its use fund. balance
...................................................................................................... .................. ........................
tliat does not have ')ecifi entified. for tlie use of t1iose net resources
................................................................................................................................................
(unassi ne(]�fun(] balance
It is the goal of the BOCC to achieve and maintain an
.....................................................
General Fund ftffK4-balance equal to four months of budgeted expenditures. The
County considers a balance of less than four months to be a cause for concern,
barring unusual or deliberate circumstances, and a balance of more than six months
as excessive. An amount in excess of six months is to be considered for reservation
to accumulate funding for capital projects and equipment, and/or to reduce the tax
levy requirements, and shall be determined in conjunction with the annual budget
process. In the event that the u+w,,siff.me&-.0 p. r e s t r J c t e ................General Fund fttf+d.
balance is less than the policy anticipates, the County shall plan to adjust budget.e d..
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resources in the subsequent fiscal years to restore the balance. Appropriation from
........ ...... General Fund feel.-balance shall require the approval of
........................ ................ ........................the BOCC and shall be only for one-time expenditures, such as capital purchases,
and not for ongoing expenditures unless a viable plan designated to sustain the
expenditures is simultaneously adopted.