Stories indexed with the term ‘fund balance policy’

When the University of Michigan Wolverines play Big Ten opponents in football, the video record of some plays can be reviewed by game officials – under conditions set forth by the conference. One kind of reviewable play is the completion of a forward pass: Did that player actually receive the ball from the quarterback in a way that, under the rules of American football, constitutes a completed pass than can be carried forward on the field of play?

For its proceedings, the Ann Arbor city council does not have a video replay rule.

But if it did, here’s the kind of play that might be reviewable: Did a city council-appointed board receive advice from the city’s financial quarterback in a way that, under ordinary rules of plain American English discourse, constitutes a recommendation that should be carried forward in a future board policy?

At issue is whether two seasons ago, back in February 2009, city of Ann Arbor CFO Tom Crawford recommended to the Ann Arbor Downtown Development Authority that the DDA have a policy to maintain a minimum fund balance as a reserve, and specifically, whether a minimum reserve amount was specified.

The question was important over the last two years in the course of negotiations between the DDA and the city about the contract under which the DDA manages Ann Arbor’s public parking system.

The remarks made by Crawford – which everyone seems to recall (albeit differently) – took place in plain view on the public field of play, at the Feb. 17, 2009 city council meeting.

What made the public conversation remarkable in the waning stages of contract negotiations, was that it was based on what the different players (including Crawford) recalled Crawford saying. Why not just take an approach familiar to the Big Ten college football conference, and review the tape to find out exactly what Crawford said? [Full Story]

At its June 20, 2011 meeting, the Ann Arbor city council adopted a new fund balance policy to comply with the Governmental Accounting Standards Board (GASB) Statement No. 54, and revised the city’s debt policy to include two new sections – one on defeasance of debt and another on inter-fund loans.

The new GASB standard requires a finer-grained explication of the components of a fund balance. The breakdown of fund balance categories is: (1) non-spendable – not in spendable form or legally/contractually unable to be spent; (2) restricted – constraints on funds placed by creditors or through enabling legislation; (3) committed – specific constraints placed on use of funds by the city council (for example, funds set aside by council resolution); (4) assigned – constrained by the intent of the city, but not restricted or committed (for example, those funds to which authority for assignment is given to the chief financial officer); and (5) unassigned – fund balance that does not fit into any other classification. [.pdf of fund balance policy]

The debt policy as it relates to inter-fund loans includes a provision that addresses the ability of the city to make loans to specific funds from the investment pool. [The city invests its fund balances in a pool, not for each fund.] The policy notes that while such inter-fund loads may be prudent in certain situations, they are ultimately backed by the city’s general fund. So such inter-fund loans should only be approved if the credit worthiness is high for the fund to which a loan is made. [.pdf of debt management policy]

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron. A more detailed report will follow: [link] [Full Story]