AgdaPkt 2011-08-22 - Laserfiche WebLink

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6.1.G. - Page 3 Recommendation A.1. The City Council, by July 1, 2012 should either revise the existing or implement a new policy for specific levels of reserves using language consistent with the new GASB Statement 54 hierarchy. a. Establish in the policy the required level of General Fund Balance for classifications that are spendable within the complete control of the government's local decision making authority. b. Require in the policy development of specific plans to restore the required level of reserves in the event they fall below that level. c. Include the policy in the annual CAFR and budget documents. Response: a. This recommendation has been implemented by the City Council on June 27, 2011, at which time the City Council adopted by resolution the classification of certain amounts as "committed" pursuant to GASB 54, and reviewed its previously adopted policy of maintaining minimum General Fund Balance at 15-20% of estimated General Fund revenues. b. This recommendation will not be implemented because the City believes that it is not reasonable to develop specific plans to restore reserves, as different actions may be necessary to restore reserves depending upon the severity and circumstances which will dictate a unique plan for replenishment. c. This recommendation will be implemented with the issuance of the City's Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2011. Recommendation A.2. The City Council, by July 1, 2012 should direct their City Managers to direct their Finance Directors to collaboratively develop a standard "scorecard" that shows how the City is doing with respect to key measures of fiscal health and make this available on City website. Update it at least semi-annually or when major changes occur. Response: This recommendation will not be implemented as the City does not agree that development of a standard "scorecard" will be productive in achieving a better understanding of a government's financial health. The City has always complied with the financial reporting requirements established by the Governmental Accounting Standards Board (GASB) and other authoritative guidance. In doing so, the City's CAFR format is consistent with and comparable to those CAFRs produced by other cities. The external audit annually ensures that the standards and guidelines promulgated by GASB are appropriately applied. In an effort to more fully communicate the City's financial status to the public, the City has ten years of CAFRs and adopted Budgets available on the City's website. Recommendation A.3. The City Council, by July 1, 2012 should direct their City Manager to formally evaluate the value of a clearly defined Running Liquidity metric as an additional measure of the