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Res 19-04 Amending the Fund Balance Policy by increasing the number of Operating Days TOWN OF WESTLAKE RESOLUTION NO. 19-04 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, AMENDING THE FUND BALANCE POLICY BY INCREASING THE OPERATING DAYS FROM A MINIMUM OF 90 TO 180 DAYS AND IMPLEMENTING A PLAN FOR PRIORITIZED UTILIZATION OF FUND BALANCE RESERVES IN EXCESS OF THE MINIMUM OPERATING THRESHOLD. WHEREAS, a fund balance policy is a key element of financial stability; and WHEREAS, the maintenance of adequate levels of unassigned fund balance will mitigate financial risk from unforeseen revenue fluctuations, unanticipated expenditures, and other similar circumstances; and WHEREAS, the Town Council desires to amend the current Fund Balance Policy and Implement a plan for prioritized utilization of fund balance reserves in excess of the minimum operating threshold; NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS: SECTION 1: That, all matters stated in the Recitals hereinabove are found to be true and correct and are incorporated herein by reference as if copied in their entirety. SECTION 2: That the Town of Westlake Town Council hereby approves the amendment to the current Fund Balance Policy from a minimum of 90 operating days to 180 operating days and the implementation of a plan for prioritized utilization of Fund Balance reserves in excess of the minimum operating threshold. SECTION 3: If any portion of this Resolution shall, for any reason, be declared invalid by any court of competent jurisdiction, such invalidity shall not affect the remaining provisions hereof and the Council hereby determines that it would have adopted this Resolution without the invalid provision. Resolution 19-04 Page 1 of 3 SECTION 4: That this resolution shall become effective from and after its date of passage. PASSED AND APPROVED ON THIS 28TH DAY OF JANUARY 2019. ATTEST: Loa i,1� Laura L. Wheat, Mayor uva` KelO Edwar= own Secretary Thomas E. ryme , T wn M na er we APPROV - AST ( RM: �O: L S ton Lo , T wn Attorn T g Resolution 19-04 Page 2 of 3 L FUND BALANCE/RETAINED EARNINGS A. General Fund Undesignated Fund Balance-The Town shall strive to maintain the General Fund undesignated minimum fund balance at,or in excess of, 180 days of operation. B. Retained Earnings of Other Operating Funds-in the Utility Fund,the Town shall strive to maintain positive retained earnings positions to provide sufficient reserves for emergencies and revenue shortfalls. C. Use of Fund Balance Generally—The Council delegates the responsibility to assign funds to the Town Manager or his/her designee. The Council shall have the authority to assign any amount of funds. Assignments may occur subsequent to fiscal year-end. The Council will utilize ftuids in the following spending order: Restricted,Committed,Assigned,or Unassigned. Fund Balance will be targeted to only be used with Council approval and can be only be used for the following: • Emergencies, • non-recurring expenditures such as technology/FF&E(furniture,fixtures and equipment),or major capital purchases that cannot be accommodated through current year savings. • Should such use reduce the balance below the appropriate level set as the objective for that fund,recommendations will be made on how to restore it. • The Council shall approve all commitments by formal action. The action to commit funds must occur prior to fiscal year-end,to report such commitments in the balance sheet of the respective period,even though the amount may be determined subsequent to fiscal year-end. • A commitment can only be modified or removed by the same formal action. D. General Fund Balance Specifically- Amounts of the General Fund's Fund Balance above the 180 day minimum in the General Fund may,with Council approval,be used for the following in descending order of priority: • Emergencies such as natural disaster response or repairs to major equipment failure or damage. • Specific capital improvement projects or be transferred to the Capital Projects Fund. • Major maintenance projects not meeting Capital Project criteria as identified in the Adopted Budget's Capital Improvement Plan. • Acquisition of technology hardware and/or software such as Geographic Information Systems(GIS),public safety technology enhancements,and fiber optic technology. • Local matches on State or Federal grants. • One-time(i.e.non-reoccurring)employee performance pay Resolution 19-04 Page 3 of 3