HomeMy WebLinkAboutReso 2011-099RESOLUTION NO. 2011-099
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING THE CATEGORIZATION OF UP
TO $2.4 MILLION IN THE ECONOMIC CONTINGENCY
RESERVE AS A COMMITTED FUND BALANCE FOR
FISCAL YEAR 2010/2011, IN ACCORDANCE WITH
GOVERNMENTAL ACCOUNTING STANDARDS BOARD
STATEMENT NO. 54
WHEREAS, in Februazy 2009, the Governmental Accounting Standards Boazd (GABS)
issued Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions; and
WHEREAS this new standard does not change the total amount of a given fund balance,
but it substantially alters the categories and terminology used to describe the components that
make up a fund balance; and
WHEREAS, the new categories and terminology reflect an approach that focuses, not on
financial resources available for appropriating within a fund, but on the extent to which the City
is bound to honor constraints on the specific purposes from which amounts in the fund can be
spent; and
WHEREAS, the term fund balance is used to describe the difference between assets
(what is owned) and liabilities (what is owed) reported within a fund; and
WHEREAS, in the past, fund balances have been classified into three sepazate
components: Reserve, Designated and Undesignated; and
WHEREAS, there are almost always important limitations on the purpose for which all or
a portion of the resources of a fund can be used; and
WHEREAS, the force of these limitations can vary significantly, depending on their
source; and
WHEREAS, the various components of the new fund balance reporting standard are
designed to indicate the extent to which the City is bound by these limitations placed upon the
resources; and
WHEREAS, GASB Statement No. 54 defines five new components of fund balance that
will replace the current existing three components; and
WHEREAS, the five new components aze Nonspendable Fund Balance, Restricted Fund
Balance, Committed Fund Balance, Assigned Fund Balance, and Unassigned Fund Balance; and
WHEREAS, the Fiscal Yeaz 2011/2012 proposed budget anticipates using $2.4 million
from the Economic Contingency Reserve to balance the Fiscal Year 2011/2012 budget; and
WHEREAS, the reserve will be funded from Fiscal Year 2010/2011 budgetary savings;
and
Resolution No. 2011-099
Page 2
WHEREAS, the funding of the Economic Contingency reserve is considered a
commitment of fund balance and therefore requires City Council action to approve the
designation in accordance with GASB 54; and
WHEREAS, the approval of the resolution will enable the classification of up to $2.4
million to Committed Fund Balance in the City's Fiscal Yeaz 2010/2011 audited financial
statements.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista does hereby approve the categorization of up to $2.4 million in the Economic Contingency
Reserve as a Committed Fund balance for Fiscal Year 2010/2011, in accordance with
Governmental Accounting Standazds Boazds Statement No. 54.
Presented by
~~ I 1 N ! ~I L- ~6/L~-
Mazia Cachadoorian
Director of Finance/Treasurer
Approved as to form by
_ ~
len . G oo gi
orney
PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista,
California, this 7th day of June 2011 by the following vote:
AYES: Councilmembers: Aguilaz, Bensoussan, Castaneda, Ramirez and Cox
NAYS: Councilmembers: None
ABSENT: Councilmembers: None
ATTEST:
Donna R. Norris, CM , Ci y Clerk
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
CITY OF CHULA VISTA
~~~~
Cheryl Cox, ay r
I, Donna R. Norris, City Clerk of Chula Vista, California, do hereby certify that the foregoing
Resolution No. 2011-099 was duly passed, approved, and adopted by the City Council at a
regular meeting of the Chula Vista City Council held on the 7th day of June 2011.
Executed this 7th day of June 2011.
(- 0
Donna R. Norris, CMC, rty Jerk