Resolution No. 6254RESOLUTION NO. 6254
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CYPRESS, CALIFORNIA
APPROVING FUND BALANCE CLASSIFICATIONS, COMMITMENTS AND
AUTHORIZATIONS IN ACCORDANCE WITH GOVERNMENTAL ACCOUNTING
STANDARDS BOARD (GASB) STATEMENT NO. 54
WHEREAS, the Governmental Accounting Standards Board (GASB) has issued
Statement No. 54, "Fund Balance Reporting and Governmental Fund Type Definitions"
with the intent of improving financial reporting by providing fund balance categories that
will be more easily understood; and
WHEREAS, the City Council of the City of Cypress has previously approved a
reserve policy that established a general contingency amount equal to 25 percent of the
General Fund's annual operating budget; and
WHEREAS, the City Council of the City of Cypress has previously approved a
reserve policy that established an emergency /cash flow contingency amount equal to 30
percent of the General Fund's annual operating budget; and
WHEREAS, the City Council desires to implement the provisions of GASB
Statement No. 54 and further desires to formally commit the fund balances of the
previously established contingency and emergency /cash flow reserves; and
WHEREAS, the City Council desires to authorize the Director of Finance to
determine and define the amounts of those components of fund balance that are
classified as "Assigned Fund Balance ".
NOW, THEREFORE BE IT RESOLVED that the City Council of the City of
Cypress, hereby adopts as follows:
SECTION 1. The above recitals are all true and correct.
SECTION 2. The classification and reporting of fund balance components as
required by Governmental Accounting Standards Board (GASB) Statement No. 54 will
become effective starting with the fiscal year ended June 30, 2011.
SECTION 3. The commitment of a fund balance amount equal to 25 percent of
the General Fund's annual operating budget for unforeseen situations (such as a
temporary revenue interruption due to business activity or disaster) is hereby created.
This amount can be considered for use should estimated annual revenues be projected
to decrease from budget by a minimum of 10 percent, or annual estimated expenditures
be projected to increase over the budget by a minimum of 10 percent. In addition to the
10 percent variances discussed above, it should further be established that such
variances in revenues and /or expenditures must create a situation in which the City's
ability to provide basic services (as defined by the City Council) is threatened. In addition
to the above constraints, City Council authorization is required for the use of this amount.
SECTION 4. The commitment of a fund balance amount equal to 30 percent of
the General Fund's annual operating budget for emergency capital needs is hereby
created. This amount is available for use for capital project needs in the event of an
emergency (such as a natural disaster that damages City assets). City Council
authorization is required for the use of this amount.
SECTION 5. The City Council appoints the Director of Finance to determine and
define the amounts of those components of fund balance that are classified as "Assigned
Fund Balance ".
PASSED AND ADOPTED by the City Cou cil of the City of Cypress at a regular
meeting held on the 13th day of June, 2011.
A 0 ' • ' THE CITY OF CYPRESS
447
ATTEST:
IC ,h,c.OL &V
CITY CLERK OF THE CITY OF CYPRESS
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS
448
I, DENISE BASHAM, City Clerk of the City of Cypress, DO HEREBY CERTIFY
that the foregoing Resolution was duly adopted at a regular meeting of the said City
Council held on the 13th day of June, 2011, by the following roll call vote:
AYES: 5 COUNCIL MEMBERS: Bailey, Luebben, Narain, Seymore, and Mills
NOES: 0 COUNCIL MEMBERS: None
ABSENT: 0 COUNCIL MEMBERS: None
CITY CLERK OF THE CITY OF CYPRESS