HomeMy WebLinkAboutOrdinance No. 2228-2007Suggested by: Finance Director
CITY OF KENAI
ORDINANCE NO. 2228-2007
AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AMENDING
KMC 7.32.020 AND 7.32.030 BY REPEALING THE EXISTING LANGUAGE AND
REPLACING IT WITH NEW LANGUAGE TO REFLECT CHANGES IN GOVERNMENT
ACCOUNTING PRACTICES WHILE KEEPING TI-IE REQUIREMENT OF A $500,000
RESTRICTED CASH RESERVE FOR REPAIR AND MAINTENANCE OF THE
CONGREGATE HOUSING FACILITY,
WHEREAS, Ordinance No. 1505-92 established the Congregate Housing Fund which
included a repair and replacement reserve to provide funding for future repair and
maintenance of the Congregate Housing Facility; and,
WHEREAS, the intent of the repair and replacement reserve was to maintain a
$500,000 repair and replacement reserve while providing for transfer of excess reserve
funds to the city's general fund; and,
WHEREAS, changes in governmental accounting practices and terminology require
amendment of 7.32.020 and 030 to reflect new accounting practices; and,
WHEREAS, it is in the best interest of the city to repeal and replace the existing
language in KMC 7.32.020 and 030.
NOW, THEREFORE, BE Pf ORDAINED BY THE COUNCIL OF THE CITY OF KENAI,
ALASKA, that KMC 7.32.20 and 030 are amended as follows.
7.B2.020 Repair and replacement reserve.
[THERE SHALL BE ESTABLISHED A RESERVED RETAINED EARNINGS
ACCOUNT WHICH SEGREGAI`ES EQUITY FOR SIGNIFICANT REPAIRS, RENEWALS,
AND REPLACEMENTS OF ASSETS OF THE FUND. THE ANNUAL DEPOSIT INTO THE
RESERVE ACCOUNT SHALL BE THE SUM OF (A) AND (B) BELOW:
(A) THE GREATER OF (1) OR (2) BELOW:
(1) THE FIRST FIFTY THOUSAND DOLLARS ($50,000.00) OF ANNUAL
OPERATING INCOME, AFTER INCREASING FINANCIAL STATEMENT OPERATING
INCOME BY DEPRECIATION ON ASSETS FINANCED BY GRANTS EXTERNALLY
RESTRICTED FOR CAPITAL ACQUISITIONS.
(2) ONE-HALF OF ANNUAL OPERATING INCOME, AFTER INCREASING
FINANCIAL STATEMENT OPERATING INCOME BY DEPRECIATION ON ASSETS
FINANCED BY GRANTS EXTERNALLY RESTRICTED FOR CAPITAL ACQUISITIONS.
(B) INTEREST REVENUE EARNED BY THE FUND BASED UPON A REASONABLE
METHOD OF ALLOCATION.
(C) NO ADDITION TO THE RESERVE ACCOUNT, INDIVIDUALLY OR
CUMULATIVELY, SHALL CREATE A DEFICIT IN UNRESERVED RETAINED
Ordinance No. 2228-2007
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EARNINGS. IT MAY BE NECESSARY TO REDUCE THE RESERVE ACCOUNT TO
ELIMINATE A DEFICIT IN UNRESERVED RETAINED EARNINGS.
(D) THE GOAL OF THE CITY IS TO CONTINUE SUCH ANNUAL RESERVE
ACCOUNT DEPOSITS TO OBTAIN AND MAINTAIN A BALANCE OF FIVE HUNDRED
THOUSAND DOLLSRS ($500,000.00) IN THE RESERVE ACCOUNT.
(E) RESERVED EQUITY MAY ONLY BE SPENT FOR PURPOSES THAT ARE
DETERMINED BY THE CITY COUNCIL TO BE SIGNIFICANT REPAIRS, RENEWALS,
OR REPLACEMENTS TO THE FIXED ASSETS OF THE FUND. ANY SUCH
APPROPRIATIONS SHALL BE MADE BY ORDINANCE.]
There shall. be established a restricted cash balance of $500,000 within the
Con regate Housing Fund, the purnose of which is to provide funding for major
repairs, renewals or replacements of fixed assets of the senior citizen residential
housing complex.
7.32.(13® Transfer to G~nera2 Fund.
[THERE SHALL BE AN ANNUAL OPERATING TRANSFER FROM THE
CONGREGATE HOUSING FUND TO THE GENERAL FUND IN THE AMOUNT OF (A)
MINUS (B) BELOW:
(A) INCOME BEFORE OPERATING TRANSFERS, AFTER INCREASING SUCH
FINANCIAL STATEMENT INCOME BY DEPRECIATION ON ASSETS FINANCED BY
GRANTS EXTERNALLY RESTRICTED FOR CAPITAL ACQUISITIONS,
(B) THE ANNUAL RESERVE DEPOSIT REQUIRED BY KMC 7.32.020 ABOVE.
(C) NO ANNUAL OPERATING TRANSFER SHALL CREATE A DEFICIT IN
UNRESERVED RETAINED EARNINGS.]
If the cash balance, including restricted cash, plus accounts receivable in the
Con rebate Housing Fund less liabilities exceeds $500,000, the excess shall be
transferred to the General Fund. If the restricted cash balance falls below 5500 000
the account will be replenished from the unrestricted cash balance.
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this second day of
May, 2007.
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PAT PORTER, MAYOR
ATT ST:
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Carol L. Freas, City Clerk
Introduced: April 18, 2007
Adopted: May 2, 2007
Effective: June 2, 2007