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REQUEST FOR ACTION <br />To Item Number <br />Ci -Council 5.1. <br />Agenda Section Meeting Date Prepared by <br />Administration A x117, 2008 Tim Simon, Finance Director <br />Item Description Reviewed by <br />2007 Fund Balance Allocation Lori ohnson, Ci ~ Administrator <br /> Reviewed by <br />Action Requested <br />Approval on the 2007 unreserved fund balance in the General Fund. <br />Background/Discussion <br />'The City's financial management plan provides that the City's General Fund maintain an unreserved <br />balance of not less than 40 percent of the next year's budgeted expenditures. If the year-end amount <br />exceeds that threshold, the City Council will consider the need to retain the excess and increase the <br />minimum fund balance before allocating the monies to other uses. <br />In previous years the City Council has set the unreserved fund balance at 41.5 percent of next year's <br />General Fund budgeted expenditures and allocated the amount over that fox capital equipment, pay <br />adjustments, ox other one-time expenditures. The amount in excess of 41.5 percent of next year's General <br />Fund budget is $161,284. With the projected uncertainty in regards to the 2009 budget and potential <br />LGA formula changes it is recommended that the balance remain in the general fund to be used in the <br />2009 budget. Moody's has consistently reviewed the fund balance level as a financial condition of the city. <br />Financial Impact <br />The 2007 unreserved fund balance will be 42.8 percent of next year's budgeted expenditures with the <br />intention of using the $161,284 in the 2009 budget. <br />Attachments <br />• Statement of Position -Fund Balances fox Local Governments <br />AetlOn Motion by _ Second by _ Vote <br />Follow Up <br />C:\Documents and Settings\jxnillex\Local Settings\Temparaxy Internet <br />Files\ OLK3E\2007genexalfund.doc <br />