MINUTES FOR THE STUDY SESSION
ASHLAND CITY COUNCIL
Monday, September 30, 2013
1175 E. Main Street
Council Chair Mike Morris called the meeting to order at 6:32 p.m. in the Siskiyou Room.
Councilor Lemhouse, Slattery, Voisin, Rosenthal, Morris, and were present. Mayor Stromberg was absent.
1. Look Ahead review
City Administrator Dave Kanner reviewed items on the Look Ahead.
2. Discussion regarding Review of financial management policy
Finance Director Lee Tuneberg explained Financial Management Policies addressed how the City managed finances, funds, and met state requirements for Oregon Budget Law. The Accounting Methods document followed GAAP accounting (Generally Accepted Accounting Principles). Major changes to both documents included:
- Updating language for a biennial budget and other housekeeping corrections.
- Adding the Health Benefits internal service fund.
- Review of required ending fund balance/carry forward minimums and calculations needed with a biennium budget. This revision proposes lowering the General Fund Ending Fund Balance to 10%, to reflect two year’s worth of property taxes receipted in as operating income.
- Consistent language and methodology for Contingency calculation is provided. Normally, a minimum of 3% of operating expenditures is used to calculate Contingency for a fund.
- Clarification that reserves for debt service are held where required or recommended.
- An update of the expenditures for services provided in the General Fund.
- An update to the types of revenue recorded in the Ashland Parks and Recreation Fund recognizing the payment for services from the City rather than allocation of taxes receipts.
- Clarification of the fund type for the Ashland Parks & Recreation Fund as a general type fund.
Mr. Tuneberg explained Resolution 2011-17 identified the Parks and Recreation Department as a General Type Fund and a Special Revenue Fund.Staff assigned percentages by reviewing each fund, determining whether it had enough cash and the susceptibility on the revenue stream.Staff assigned fixed amounts for funds based on risk exposure.The current targets were established 2010, reviewed throughout the year as large transfers or loans occurred with a formal evaluation that should happen every few years.
Councilor Marsh questioned removing revenues from property taxes and retaining charges for services and miscellaneous sources. City Administrator Dave Kanner clarified a transfer from the General Fund was a charge for service as a payment from the General Fund to the Parks and Recreation Funds.Mr. Tuneberg further explained Parks and Recreation was a component unit, transfers would create an imbalance and went against GAAP accounting, and the auditors considered it payment for services. This year, staff moved all the property taxes into the General Fund to ensure Parks and Recreation had money to accomplish what was in their budget.Instead of using a transfer, staff treated it as a payment to the Parks and Recreation Department for service and showed it as revenue in the Parks and Recreation Fund.
The percentage and dollar format in Resolution 2010-05 was close to the current biennium budget.In addition to the budget document showing that data by fund, staff would provide a separate comparison to Council. The bigger question was whether to set the General Fund at 10% or 12%.When staff built the budget document, they calculated each percentage annually instead of biennially to avoid the excess a biennium could cause.It also provided the opportunity to consider changing conditions yearly.
- Clarification of the fund policy for the Ashland Parks and Recreation Fund.
- Clarification of Council authority for committing or assigning fund balances and subsequently changing them per GASBS 54.
- Adding the Health Benefits Fund.
- In general, correcting titles or typographical errors.
Mr. Tuneberg went on to review changes to the Financial Management Policies document. Councilor Voisin suggested making the annual management letter a requirement even if the content just verified a letter was not required for the year. Under Capital Projects Funds
, Capital Improvements Fund
, staff changed revenue to operating expenditures to make it consistent with previous changes.
Under Enterprise Funds
, Wastewater Fund
, staff would change “Revenues are from charges for service,”
to “Revenues are from charges and taxes.”
, Mr. Tuneberg explained 20% of the Food and Beverage tax went into City’s CIP (Capital Improvement Program) with the City paying into the Parks and Recreation CIP fund for their projects as a payment for services, not a transfer. SDCs (Systems Development Charges) that belonged to Parks and Recreation also went into the City’s CIP with the City reimbursing the Parks and Recreation Department as needed. The Wastewater Fund received 80% of the Food and Beverage tax for debt service. As an enterprise, the Wastewater Department carried their own debt service.
Meeting adjourned at 7:23 p.m.
Assistant to the City Recorder