PowerPoint Presentation

Fund Balance Policy – General Fund
June 13, 2023

Agenda
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• Fund Balance Definition
• GASB 54 – Accounting Standard for Fund Balance
• GFOA Best Practice Recommendations
• Glendale Fund Balance Policy – General Fund 
• Valley Wide Comparisons
• Recommendation

Fund Balance – Definition
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General Fund Fund Balance is defined as the 
excess of fund assets over liabilities in the general 
fund at a specific point in time.
GF Assets – GF Liabilities = Fund Balance

GASB 54 – Accounting Standard
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• Issued in 2009 and sought to provide consistency, comparability, and 
understandability in the reporting of fund balance.
• Provided a hierarchy basis for fund balance based on the nature of the 
constraints on how the funds can be spent.
• Fund balance is reported as:
• Non-spendable – Amounts not spendable (inventories)
• Restricted – Amount constrained by provider (grants)
• Committed – Amounts constrained by Government (council) 
• Assigned – Amounts intended for a specific use (manager)
• Unassigned – Amounts for any purpose and reported only in the general fund

Fund Balance Guidelines for General Fund
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Government Finance Officers Association (GFOA) 
recommends:
• Governments should establish a policy regarding fund balance
• Policy should include guidance for the prescribed level of fund balance
• Guidance should also be provided for how to replenish fund balance if it 
falls below the prescribed level.
• Recommends, at a minimum, governments maintain unrestricted 
budgetary fund balance in their general fund of no less than two months 
of regular general fund operating revenues or regular general fund 
operating expenditures.

Glendale’s Fund Balance Policy
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Minimum fund balance in the general fund, which is 
defined as the unassigned amount, shall be 25% of 
the total annual ongoing revenues
• Provides continuing services
• Cushion in economic downturns
• Emergencies
• Loss of revenue
• Unanticipated needs
• Non-recurring obligations
• Unforeseen opportunities

Other City Policies
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City/Name
Percentage Measurement Focus
Avondale
35%
Actual General Fund expenditures from prior fiscal year
Chandler
25%
Budgeted General Fund revenues (excludes Transfers In)
Gilbert
25%
General Fund working capital
Phoenix
5%
Total expenditures
Mesa
8-10%
Budgeted General Fund expenditures for following year
Peoria
35%
Average Actual General Fund revenues previous 5 years
Scottsdale
20%
General Fund Operating expenditures
Surprise
25%
Budget General Fund Operating expenditures
Tempe
20-30%
Actual General Fund current year operating revenues
Goodyear
>15%
Budgeted General Fund ongoing revenue

Recommendation
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• Staff recommends changing the current policy of a 
minimum unassigned fund balance in the general 
fund to 25% of budgeted ongoing expenditures. 
• This will simplify the process and allow us to 
present a calculated number as part of the annual 
budget process.

Glendale Fund Balance Policy Recommendation
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• 25% of budgeted general fund ongoing operating 
expenditures
FY22 Budget
Budgeted General Fund Ongoing Expenditures
221,979,899
Budgeted General Fund One-Time Expenditures
2,645,129
25% of Budgeted Ongoing Expenditures
55,494,975

General Fund Forecast
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FY23 Revised Budget
Beginning Fund Balance
173,086,283 
Ongoing Operating Revenue
300,620,374 
One-time Operating Revenue
46,032,424 
Ongoing Operating Expenditures
(257,156,158)
One-time Operating Expenditures
(7,366,120)
Net Transfers
(36,461,037)
Contingency
(5,000,000)
Total Surplus/(Deficit)
40,669,483 
Ending Fund Balance
213,755,766 
Assigned Fund Balance
144,321,724 
Ending Unassigned Fund Balance
69,434,042 
Current GF Fund Balance Policy
75,155,094 
New GF Fund Balance Policy
64,289,040

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Questions?