HomeMy WebLinkAbout1992 Resolution No. 107RESOLUTI ON NO./J2
SERIE S OF 1992
A RESOLUTION IDENTIFYING THE CITY OF ENGLEWOOD 'S FUND BALANCE AND
OTHER FUNDS AS A RESERVE FUND AND NOT AS AN EMERGENCY RESERVE .
WHEREAS, Amendment J (Artic le X, Section 20 of the Colorado Constitution ), was
passed by voters on November 3, 1992; and
WHER EAS , Amendment 1 (Artic'e X, Section 20 of the Co lorad o Con stitull on), requires
the es tab lishm ent of an Emergency Reserve Fund ; and
WHEREAS, Amendment 1 (Article X, Section 20 of the Co lorado Constitution), provides
for Reserve Funds ;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
ENGLEWOOD, COLORADO, THAT :
~im..,;,. For purposes of Reserves (Article X, Section 20 of lhe Colorado Constitution) of
the City of Engl ewood, Colorado all fund balances, retained enmings and tho General Fund
Balance shall be Reserve Funds of the Cit )' of Englewood and not an Emergency Fund.
ADOPTED AND APPROVED this 21st day of December, 1992 .
ATTEST :
GJ£iv«4<4~
Patricia H. Crow, City Clerk
I, Patricia H. Crow, City Clerk for IJ!~ity of Englewood, Colorado, hereby certify the
above is a true copy of Resolutio n N<\l"A.:/, Series of 1992 .
{ ilt-✓;(·,V w a,·wJ
Patric ia H. Crow
11 k 1
Date
December 21. 1992
INl11ATED BY
STAFF SOURCE
COUNCIL COMMUNJC1,\nON
Agenda Item
11 k
City Manager
Subject Amendment I
Roger W. Fraser, City Manager
ISSUE/ AcnON PROPOSED
Staff recommenda that Ctty Council approve the attached resolution and ordinance
(II deslgnattng fund balances/retained e=mgs as reserves and (21 creattng an
Emergency Reserve Fund respectively.
PREVIOUS COUNCIL AcnON
None.
STAFF ANALYSIS
Destgnatlon of Fund Balances/Retained E!\flllniS as Reserves . City staff members
have attended several seminars and conducted their own examlnatlons of
Amendment I of the Colorado Constltutlon whlch was approved by the voters on
November 3, 1992 . Numerous possible lnterprctatlons abound for several Important
features of the amendment.
One such area of lnterpretatlon Is the deflnltlon of "res rves." The amendment
d efi n es "fiscal year spending" as "all district expenditures and reserve Increases"
except for certain excluded amounts. "Reserve " Is not defined , yet Its defln.:tlon 1s
very Important since fiscal ye ar spending Is restricted to prtor year spendlng adjusted
only by the Denver-Boulder CPI and the percentage change In actual value of r eal
property In the dlstrtct.
One Interpretation of Amendment 1 Is that reseives will b e defined as only those
monies actually designated by the district as "reseives." In that case, It would be to
the City's advantage to formally designate all of the City's fund balances/re tained
earnings as "r eseives" In 1992. By so doing, the City would be Increasing Its
"reseives" from 80 to approximately 86,000,000 In 1992 . When 1993 's spending
l.1mJt h1 calculated, It would Include all expenditure amounts In 1992 plus the
"r es eive Increase" of 86,000,000.
Other Interpreters of the amendment believe that r eseive Increases will ultimately b e
defined as any excesses of revenues over expenses durtng the fi scal year regardless
of the designation or title applied to them by the district (I .e ., any Increases to fund
balances/retaln.ed earntngs). Therefore, any action taken by the Ci ty to rename or
designate these monies will be Immaterial to the effect of the amendment.
It Is therefore In the City's best Interest to designate Its fund balances/retained
earntngs as "reserves" In 1992. lf the first Interpretation prevails, wc will have
benefltted significantly by doing so. lf the other Interpretation Is adopted, our
designation will do no harm nor good .
CreaUrJi an Emer@ncy Reserve Fund. Amendment 1 establishes "emergency
re!:erves• and req uires local districts to rcservc specified amonnta of thdr fiscal year
spending "to use for declared emergencies only." The attac}\•~ ordinance creates an A
Emergency Reseive Fund so that wc can easily demonstrate compliance with the •
amendment. J
FINANCIAL
The designation of fund balances/retained earnings a s "reserves" may have the effect
of Increasing our 1993 spending celling by approximately $6,000,000. The creation
of the Emergency Res er,e Fund will have no real financial Impact, but will assist In
financial reporttng. Funds will be transferred to the Emergency Reservc Fund after
the proposed ordinance L'I a dopted and published.