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Home My WebLink About1780Resolution No. 1780 (Amending or Repealing Resolutions) CFN = 104 -Finance Passed-2/19/2008 Capital Asset Replacement Fund Policy RESOLUTION NO. /7 ?D A RESOLUTION of the City Council of the City of Kent, Washington, establ1shmg an expanded Cap1tal Asset Replacement Fund pol1cy. RECITALS A. The City, in 1ts annual budget adopt1on process, includes spec1f1c fmanc1al policies as part of 1ts adopted budget. The City Council's 2008 budget, adopted by Ordmance 3867, incorporated the 2008 prellmmary budget, wh1ch sets forth the 2008 f1nanc1al polic1es on pages twenty-one through twenty-four. B. The adopted financial policies are intended to establish "best practices" in the areas of public debt, cash management and investments, budget development and adJustment, and revenue collection. C. Under 1ts "Financial Stab1l1ty Policies" section, this budget addresses the c1ty's "Equ1pment Rental Replacement Fund," and contmues the c1ty's pol1cy to maintain th1s fund by settmg as1de monies on a regular schedule to be held m reserve so that adequate funds ex1st to replace equipment as 1t becomes necessary to take the equ1pment out of serv1ce. 1 Capital Asset Replacement Fund Policy D. Although not specifically addressed in this policy, the city has applied this same reserve fund pract1ce for 1ts cap1tal assets, mclud1ng, w1thout l1m1tation, fleet vehicles, street overlays, equ1pment, bu1ldmg mamtenance, and a reserve fund for replacement and refurbishment for the Kent Event Center. E. On the recommendation of the city's Finance Director, the c1ty counc1l has determmed that th1s reserve fund practice helps keep the City in a sound fiscal pos1t10n. Accordmgly, the c1ty council has determined to restate 1ts financial pol1cy to clanfy that the c1ty's reserve fund protocol should apply generally to the c1ty's cap1tal assets 1n 2008 and 1n the future. RESOLUTION THE CITY COUNCIL OF THE CITY OF KENT, WASHINGTON, DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. -Fmancial Stability Policies amended. The City of Kent Financ1al Stability Policies, as mcorporated mto the 2008 c1ty budget through budget adopt1on Ordinance 3867, enacted on December 11, 2007, which appear on page 21 of the 2008 Preilmmary Budget, and which were mcorporated mto the 2008 budget ordmance, shall be revised as follows: FINANCIAL STABILITY POLICIES General Fund Reserves -Per Resolution #1327, begmnmg w1th the 1993 budget, the target for the General Fund Contmgency Account IS 10% of the General Fund budgeted expenditures. The pol1cy is des1gned to prov1de a fiscal cush1on, meet seasonal cash flow shortfalls, and meet emergency cond1t1ons. The 2008 budget meets that target. 2 Capital Asset Replacement Fund Policy Equipmettt Retttal Replaeemettt Ftttttl Capital Asset Replacement Funds -The City w1ll maiAtam aA EqUipmeAt ReAtal FuAd adequately fuAded to replace a fleet of vehicles aAd other heavy eqUipmeAt, IAcludmg fire apparatus, at the1r scheduled replacemeAt t1meThe City w1ll adequately ma1ntam funds that replace, refurbish and restore c1ty facil1t1es, assets and Infrastructure. These funds shall be appropnated In the Annual Budget process and disbursed to the rece1vmg funds dunng that f1scal year. Examples include fleet vehicles, street overlays, equipment, bu1ld1ng mamtenance and, begmn1ng with the 2008 budget, at least $300,000 per annum for the Kent Event Center. Self Insurance Program -The City Will mamtam an actuarially sound self msurance program for unemployment, worker's compensation, 11ab111ty msurance and health Insurance. All of the msurance programs are accounted for as separate cost centers Within one parent msurance fund. The l1ab1lity msurance fund IS funded through the Washmgton City's Insurance Authonty for cla1ms over $100,000. The Health Insurance program IS budgeted to mamtam fund balance at 2 t1mes IBNR, usmg a multiple year forecast to smooth the effects of necessary rate Increases. Pension Funds -The City w1ll ma1ntam an actuanally sound Firemen's Relief and Pens1on Fund. SECTION 2. -Capital Asset Replacement Fund to be Permanent Policy. The "Capital Asset Replacement Fund" policy established as part of the City's 2008 budget Fmanc1al Policies by this resolution shall become the permanent policy of the c1ty of Kent, unless amended by future budget ordmances or separate resolution. SECTION 3. -Severability. If any section, subsection, paragraph, sentence, clause or phrase of th1s resolution 1s declared unconst1tut1onal or invalid for any reason, such dec1sion shall not affect the val1d1ty of the remam1ng port1ons of th1s resolution. SECTION 4. -Ratification. Any act cons1stent with the authonty and prior to the effective date of this resolution 1s hereby rat1f1ed and affirmed. 3 Capital Asset Replacement Fund Policy SECTION 5. -Effective Date. This resolution shall take effect and be in force 1mmed1ately upon 1ts passage. PASSED at a regular open public meeting by the City Council of the City of Kent, Washmgton, th1s !tf day of ~/-, 2008. CONCURRED in by the Mayor of the City of Kent th1s t2 day of ~,2008. ATTEST: --"· .: ..:. APPROVED AS TO FORM: I hereby certify that this is a true and correct copy of Resolution No. /78'0 passed by the City Counc1l of the City of Kent, Washmgton, the 1'1 day of ~ , 2008. K'L..dl.J~~ BRENDA JACOBE , CITY CLERK P \CIVI~Res®ltion\Repla~e~entFundPollcy doc 4 Capital Asset Replacement Fund Policy