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HomeMy WebLinkAboutPOL-014-23 Restricted Surplus COUNTY OF NEWELL - POLICY HANDBOOK POLICY NO: POL-014-23 TITLE: RESTRICTED SURPLUS ADOPTED: February 23, 2023 (C-60/23) SUPERCEDES NO: 2017-PAD-062 PAGE NO: 1 of 3 POLICY PURPOSE: The purpose of this policy is to establish specific restricted surplus funds to provide for emergent financial needs, stabilize tax rates, set aside funds for the replacement of equipment, machinery, vehicles, infrastructure and facilities and to minimize the financing needs of the County. POLICY GUIDELINES: 1. Healthy surplus levels are important in achieving County goals including financial health and stability. 2. The County will strive to be a leader in terms of financial health and stability. 3. Actual surplus balances need to be benchmarked with pre-determined targets on an ongoing basis to gauge whether financial health is being achieved. 4. Surplus goals need to be consistent with and supportive of realistic longer-term financial plans. 5. Surplus appropriations need to conform to the statutory/legal requirements of the Municipal Government Act, generally accepted accounting principles (GAAP) and public sector accounting board (PSAB) recommendations. 6. Funds collected through special tax and maintained in a restricted surplus fund must be used for the purpose it was collected and may not be diverted as per legislation. 7. The annual budget documents shall include separate statements for each restricted surplus fund and provide estimated additions and uses for at least a 5-year period. 8. Restricted surplus reporting will be included in quarterly financial reports to Council. ROLES & RESPONSIBILITIES: The Controller or their designate shall be responsible for:  Administration of restricted surplus funds.  Including the necessary contributions and transfers in budget to maintain surplus funds in accordance with this policy.  Conducting an annual review of all surplus funds and reporting the results to council.  Prepare an action plan to return a restricted surplus fund back into compliance when a fund is either over or under funded. Council shall be responsible for approving, through the budget process, or by separate resolution:  The establishment, and purpose of, new restricted surplus funds.  Contributions to, and withdrawals from, restricted surplus funds.  Closure of restricted surplus funds that are no longer required. POL-014-23 RESTRICTED SURPLUS Page 2 of 3 Fund Purpose Funding Source(s) Minimum Level Maximum $ Rationale for $ Levels Level Established Stabilization Fund To provide for unanticipated a) An annual transfer as determined in Not to fall below 10% N/A Minimum: one month of expenditures of a non-recurring the approved budget. of the current year operating expenditures. nature and/or meet unexpected b) Transfer of annual surpluses remaining operating budget increases in costs. after any Council approved transfers expenses. to restricted surplus funds as part of the year-end process. Future Projects Fund To build funds to support new a) An annual transfer as determined in N/A N/A Expansion needs to be programs, capital purchases the approved budget. funded with minimal and projects planned to be b) Other sources as approved by Council. debt financing. Funding completed in future years. levels are contingent on planned changes. Infrastructure Fund To provide funds for the An annual transfer equal to at least 50% 25% of the Fully funded Borrowing and reliance rehabilitation or replacement of the annual amortization on the County’s accumulated infrastructure on grant funding should costs of existing County infrastructure. amortization balance plan based on be limited for infrastructure when it reaches for the County’s replacement cost. replacement of existing the end of its useful life. infrastructure classes infrastructure. of TCA. Vehicle, Machinery To provide funds for the a) An annual transfer equal to at least 100% of the Fully funded Borrowing should be and Equipment Fund scheduled replacement of 100% of the annual amortization on accumulated vehicle, avoided for replacement existing vehicles, equipment, the County’s vehicles, equipment, and amortization balance equipment and of existing vehicles, machinery, and office machinery classes of TCA. for the County’s machinery capital equipment, and furnishings when they reach b) Proceeds from the sale of items from vehicles, equipment, plan based on machinery. the end of their useful lives. the related classes of TCA. and machinery replacement cost. classes of TCA. Facilities Fund To provide funds for the a) An annual transfer equal to at least 50% of the Fully funded Borrowing and reliance rehabilitation or replacement 50% of the annual amortization on accumulated facilities capital on grant funding should costs of existing County County buildings. amortization balance plan based on be limited for buildings when they reach the b) Proceeds from the sale of items from for the County’s replacement cost. replacement of existing end of their useful lives. the related classes of TCA. facility classes of facilities. TCA. Paving Fund To build funds for paving a) To be funded through a special paving N/A N/A Funding levels will be projects on County roads. tax to be assessed annually at a mill contingent on tax rate of 0.5000 to all applicable assessments and these properties. funds must be applied to paving projects as outlined in the MGA section 386(1). Fire Fund To build funds for future An annual transfer based on the fire 100% of the Fully funded fire Borrowing should be replacement of fire apparatus capital plan as determined in the approved accumulated apparatus & limited for the and facilities of the various fire budget. amortization balance facilities capital replacement of fire districts within the County. for the County’s fire plan based on apparatus and facilities. apparatus. replacement cost. POL-014-23 RESTRICTED SURPLUS Page 3 of 3 Fund Purpose Funding Source(s) Minimum Level Maximum $ Rationale for $ Levels Level Established Regional To extend the regional collaboration philosophy N/A – This fund will be N/A N/A This fund is intended to be Enhancement Fund of the Regional Enhancement & Cooperation closed when the used for those programs and agreement and support capital projects that remaining balance in the services which benefit both have a regional benefit, on a cost-shared basis, fund has been County and local with the other municipalities within the County. exhausted. municipality ratepayers. Municipalities in the region seeking funding may apply using the prescribed forms available at the County office. Recreation Fund To build funds for future replacement, or new To be funded through an N/A Fully funded Borrowing should be limited construction, of recreation facilities within the annual transfer as recreation facility for the replacement of region of the County. Municipalities in the determined in the capital plan based existing recreation facilities. region seeking funding may apply using the approved budget. on replacement prescribed forms available at the County office. cost.