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HomeMy WebLinkAboutOrdinance 4435 ORDINANCE NO. 4435 AN ORDINANCE REPEALING ORDINANCE NO. 1085 AND ESTABLISHING A REPLACEMENT AND DISASTER RECOVERY FUND WHEREAS, Ordinance No. 1085 was passed on June 20, 1955, and established the Vehicle and Maintenance Equipment Replacement Fund and required $1,400.00 to be deposited monthly into this fund; and WHEREAS, the Vehicle and Maintenance Equipment Replacement Fund currently has a designated fund balance of about $4,181,665.00; and WHEREAS, $3,000,000.00 of this fund should be reserved in an account entitled "Disaster Recovery Account' so that the City will have substantial available resources if a disaster befalls our city; and WHEREAS, this $3,000,000.00 and the remaining $1,181,665.00 balance should be transferred to a new fund designated as the Replacement and Disaster Recovery Fund. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1 . That the City Council of the City of Fayetteville, Arkansas hereby repeals Ordinance No. 1085 and establishes a new fund "Replacement and Disaster Recovery Fund" into which all moneys from the "Vehicle and Maintenance Replacement Fund" shall be transferred. Section 2. That the City Council of the City of Fayetteville, Arkansas hereby designated $3,000,000.00 of the Replacement and Disaster Recovery Fund to be reserved and not dispersed until and unless the City Council determines by Resolution that a disaster or emergency requiring use of those funds has occurred. As soon as feasible after any such disbursement of funds from the Replacement and Disaster Recovery Fund, these funds should be restored to bring the Replacement and Disaster Recovery Fund up to the Three Million Dollar ($3,000,000.00) fund balance. a Section 3. That the City Council of the City of Fayetteville, Arkansas hereby adopts the policy attached as Exhibit "A" for the use and disposition of funds within the Replacement and Disaster Recovery Fund in excess of the Three Million Dollars ($3,000,000.00) reserved disaster or emergency amount. Section 4. That the City Council of the City of Fayetteville, Arkansas hereby states that the policy (attached as Exhibit "A") describes procedures for the purchase, replacement, insurance costs, license fee, repairs and maintenance of items that cost $10,000.00 or less currently on the motor pool schedule. PASSED and APPROVED this the 19thday of November, 2002. APPROVED: By: • s• ,� ` )+f�. DAN COODY, May 0 By' % Bather Woodruff, City CIVrk CITY OF FAYETTEVILLE, ARKANSAS POLICY AND PROCEDURE SUBJECT: Replacement & Disaster Recovery Fund NUMBER: GA-5 EFFECTIVE DATE: December 19, 2002 REVISIONS : GA-5.0 PURPOSE: The purpose of this policy is to provide the guidelines for implementing Ordinance Number titled "AN ORDINANCE REPEALING ORDINANCE NO. 1085 AND ESTABLISHING A REPLACEMENT AND DISASTER RECOVERY FUND" and adopted on November 19, 2002. I. Establishment of a Disaster Recovery Account in the amount of $3 .0 million dollars. The Accounting Division, Administrative Services Department, City of Fayetteville, Arkansas will establish and maintain a general ledger account entitled Disaster Recovery. The Accounting Division will cause an entry to be made in the amount of $3 .0 million dollars in this account from reserved fund balance. The funds in this account cannot be spent without a specific resolution of the Fayetteville City Council that declares a disaster or emergency and authorizes the expenditure of the moneys in the designated account. II. The remaining money' s (at least $ 1 , 181 ,665 .00) are to be restricted to be used to purchase replacement public safety vehicles for use by the City of Fayetteville Fire Department, Police Department or Animal Services division. III. An additional use of this fund is to serve as a repository of moneys from the operating divisions funded in General Fund, Street Fund and Parks Development Fund for the purchase of small vehicles and equipment. This policy describes procedures for the purchase, replacement, insurance costs, license fee, repairs and maintenance of items that cost $ 10,000 or less currently on the motor pool schedule. These items will be removed from the motor pool schedule. All items meeting this criteria will become the property of the division in possession of the equipment. Fleet operations will no longer charge nor track this equipment through motor pool The division in possession of this equipment will be responsible for budgeting these items in their operational funds. GA-5. 1 POLICIES & PROCEDURES: A. Replacement of Equipment: 1 . The user Division is responsible for accumulating replacement costs. A replacement expense account will be set up for each division by the Accounting Manager to capture replacement costs. The money recorded in the account, on an annual basis, may be unexpended amounts at the end of the year or a budget r r transfer from operations throughout the year. To allow Division Heads a beginning list for maintaining records and schedules, Fleet Operations will provide a listing of equipment indicating purchase price and the projected year of replacement. Stranded capital cost will be left in the Shop Fund and the receiving division will not be billed. 2. When replacing equipment, the Division must follow Purchasing Policy for bid procedures, bid openings, etc. Bid specifications will be cleared through Fleet Operations to maintain consistency and interchangeability. An equipment or fixed asset number will be assigned to each unit for tracking purposes by the Fleet Operations Division. A separate replacement schedule will be developed for each division during the City's annual budget to determine the current year replacement schedule and funding requests. 3. When replacement costs for equipment (that originally cost less than $ 10,000) exceeds $ 10,000, the Division will pay the first $ 10,000 and Fleet Operations will pay the difference. The equipment will then be placed on the motor pool schedule and the division will be charged monthly motor pool and replacement costs. Equipment replacement costs that are $ 10,000 or less will remain with the division that has possession. 4. Items will not be removed from the vehicle inventory list that Fleet Operations maintains. When a division receives approval to buy an item under $ 10,000, they shall phone Fleet Office and get the next available unit number for the item. This will keep all city vehicles and equipment numbered in an organized fashion. This number should be noted on the Purchase Order. For example, if the item is over $5000, and the unit number is #9079, the fixed asset number in the City's General Ledger will be 709079, as is currently done. B. Repairs and Maintenance: 1 . The Division is responsible for budgeting costs associated with upkeep and repairs of equipment. The costs will be budgeted in the Vehicle & Equipment Maintenance account in the operational budget. 2. Fleet Operations may be used to perform any repairs and maintenance on the equipment. The division will be invoiced by Fleet Operations for the cost of the work performed. The Fleet office should be contacted to schedule the work. 3 . The Division may seek outside vendors to perform repairs and maintenance on the equipment. If an outside vendor is chosen, purchasing policy will be followed. Divisions are responsible for performing preventative maintenance services and tracking maintenance through the Municipal Management System (Hansen). C. Other Costs: 1 . Insurance costs and license fees associated with the equipment will be the responsibility of the Division. These costs will be budgeted in the operational budget. The Division is responsible for reporting the equipment to the Purchasing Manager to obtain and keep appropriate insurance coverage and obtain the proper license. 2. Other costs associated with the equipment will be the responsibility of the Division and will be budgeted in the operational budget. D. Request for Expansion/Replacement Equipment: 1 . The Division will complete a Request for Expansion/Replacement Equipment form (Exhibit A, as adapted from the Fleet Operations form requesting new/replacement vehicles/equipment) when equipment is to be added or replaced. 2. The request will be completed and signed by the Division Head and approved by the Department Director, Fleet Operations Superintendent, Budget Manager and Purchasing Manager. 3. The form should clearly state the description and justification of the equipment to be added or replaced. 4. After approvals are obtained, the Division Head will prepare the bid specifications and submit them to the Purchasing Manager. 5. Equipment purchased by a division may be sold/exchanged/transferred to another division. The transferring Division is responsible for completing the required fixed asset transfer forms to move the equipment to the receiving division. The Accounting Division, upon receipt of the fixed asset transfer form, will record the transfer of the asset and prepare the journal entry to record the transfer price to the receiving division. The receiving division will be responsible for adding the transferred equipment to the Hansen system and removing it from its home division. APPROVAL: ayor Date STAFF REVIEW FORM X AGENDA REQUEST CONTRACT REVIEW GRANT REVIEW For the Fayetteville City Council Meeting of : November 5, 2002 FROM : Marsha Farthing Accounting and Audit Administrative Services Name Division Department Staff is seeking Council approval of the use of the Replacement Fund to accumulate funds for the $10 , 000 and under vehicles and machinery for governmental funds of the City . Staff is also requesting approval of a required reserve in the Replacement Fund of $3 , 000 , 000 . COST TO CITY : No costs $ - Cost of this request Category/ Project Budget Program Category / Project Name Account Number Funds Used to Date Program / Project Category Name Project Number Remaining Balance Fund Name BUDGET REVIEWW: Budgeted Item Budget Adjustment Attached Budget Man r Date AdministrativeServicesDirector Date CONTRACT/GRANT/LEASE ,R REVIEW : 49a /r (Z�Z �l ( l c • fD _ /0 17 fib a- Accounting Manager J Date Internal Audi Vr Date fjza, b�. s4 n, J*/ (D 1171d Cit Atf-orneV Date ADA Coordinator Date 10 f 104 Purchasing Manager Date Grant Coordinator Date STAFF RECOMMENDATION : Cross Reference Division Head Date New Item : Yes . � No Department D ' rector Date Previous Ord/ Res # : X0` 2/ ^oy Orig . Contract Date Admin ' trative Services Director Date Orig . Contract Number Mayor Date Staff Review Form - Page 2 Description Meeting Date November 5 , 2002 Comments : Reference Comments : Budget Manager Accounting Manager City Attorney 4L VAR . I oid ,. .m T{ �% �nsJfu( �QJo I .{ �: .W A. f- G74 Zo. J+ A Ow ov i ,n Purchasing Manager ADA Coordinator Internal Auditor Grants Coordinator FAYETTEVI LtE THE CITY OF FAYETTEVILLE, ARKANSAS DEPARTMENTAL CORRESPONDENCE To: Steve Davis, Interim Administrative Services Director From: Marsha Farthing, Accounting Manager Date: October 11 , 2002 Subject: Replacement Fund The Fayetteville City Council established a "Vehicle and Maintenance Equipment Replacement Fund through the adoption of Ordinance 1085 dated June, 1955 (please see attachment). The fund was to be used for the accumulation of funds for the replacement of depreciated and obsolete vehicles and other maintenance equipment for all departments of the City except Water and Sewer. The Ordinance further states that the appropriations to the fund shall not be diverted by City Council except in the event of an emergency. Emergency is defined as "a sudden, unexpected and unforeseen condition or occurrence in municipal affairs of such public gravity and exigency as to require forthwith municipal action, and does not mean expediency, convenience, or best interests". The fund functioned and accumulated monies in this manner through 1973 . The availability of a federal revenue sharing program eliminated the need for the continued accumulation of funds from 1975 through 1981 . In 1982, the City reactivated the fund due to the elimination of the revenue sharing program. The fund has been viewed as a "disaster recovery" fund since the establishment of the Shop Fund which has purchased virtually all City vehicles and related equipment since 1982. For more in depth details of the history of this fund see the attached letter dated June 26, 1992. A change in internal policy has created the need to activate this fund. Replacement funds for vehicles and machinery, such as trailers and motorcycles, that cost $ 10,000 or under will now need to be budgeted and accumulated outside of the Shop Fund. The expenses for this equipment will be budgeted in each City division that has the need. City staff recommends the Replacement Fund as the best place to accumulate these funds to replace the $ 10,000 and under equipment for divisions in Governmental type funds. At year end 2001 , the Replacement Fund had a designated fund balance of $4, 181 ,665. City staff proposes restricting 53,000,000 of that amount for disaster recovery. All other monies in the fund, including interest earnings from the $3,000,000, will be used to replace vehicles and equipment. Staff is seeking the City Council 's approval to activate the Replacement Fund and to restrict $3,000,000 of the Replacement Fund Balance for disaster recovery. AN ORDINANCE APPROPRIATING : 1,400.00 MONTHLY FROM GENERAL REVENUES FOR THE PURPOSE OF PROVIDING FUNDS FOR THE MAINTENANCE AND REPLACEMENT OF VEHICLES AND MAINTENANCE EQUIPMENT ii'ITHIN THE CORPORATE LIMITS OF THE CITY OF FAYETTEVILLE, ARKANSAS, AND FOR OTHER PURPOSES . WHERFAS, it is the desire of the City Council of the City of Fayetteville, Arkansas , to create a cash fund for the purpose of replacing depreciated and obsolete vehicleo and other maintenanco equipment uscd by all departments of the. City except the fir, and Water Departments, . NOW, THEREFORE, DE IT OIW&INED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS : j Section 1. That there is hereby appropriated from the general revenue funds of the City of Fayetteville, the sum of One Thousand Four Hundred Dollars ($1, 400.O0) per month to be credited to a fund which is hereby designated as the "Vehicle and Maintenance Equipment Replacement Fund, " for the purpose of providing funds for the replacement of depreciated and obsolete vehicles and other maintenance equipment used by all departments of the City, except the 01000P� and Water Departments. Section 2 . That each and every month, from and after the passage and approval of this ordinance, until terminated by appropriate action of the City Council, there shall be appropriated from the general revenue funds of the City of Fayetteville, the eum of One Thousand Four Hundred Dollars ($1, 400.00 ) per month which shall be credited to the "Vehicle and Maintenance Equipment Replacement Fund" for the purposes set forth in Section 1 hereof. Section j . That the City Council may at any time hereafter direct the deposit of the funds credited to the "Vehicle and Maintenance Equipment Replacement Fund" , as a general deposit in any bank or banks of this City, either in a checking or .�I savings account, or the investment of said funds in bonds which are the direct _ obligations of or the principal and income of which are unconditionally guaranteed by the United States of America . ' Section 4. That all revenues and expenditures from the "Vehicle and Maintenance Equipmeht Replacement Fund" shall be accounted for independently of ether funds. Section 5 . That the appropriations hereinabove authorized shall not be diverted �'. by the City Council except in the event of emergency. For the purposes of this section "emergency" shall be defined as a sudden, unexpected and unforeseen condition or occurence in mdnicipal affairs of such public gravity and exigency as to require J� forthwith municipal action, and does not mean expediency, convenience, or best interests. Section 6. For the purposes of this ordinance, "vehicle and maintenance �i m .te� ifc�s o /Ca" r4'r %rr/�sa71 ek n<.is of `tJir C1tyr ex<crti' Oc s. , . equipment" shall mean any and alln used byn IT AsBIq�Aw�iia+YA�errwed ' aucJ. Vlatc�. ; '.1CS.i..pNCMED j ' Departments of the City of Fayetteville, Arkansas . D.CfC r 1918 • Section 7 . All ordinances or parts of ordinances in conflict h .� J 7 hereby repealed and this ordinance shall take effect and be in full 8 3 s from and after its passage and approval. '! s PASSED AND APPROVED Td1S 7- D DAY OF JUNE 1955. 1 �r A , SwTT� Mayor . . p� ATTEST :77 .. •� J. YY, McGEHEE� City Clerk 41 ^i . s, i !i I `i t i RESOLUTION NO, 4Z A RESOLUTION ESTABLISHING A REPLACEMENT FUND FOR THE CITY OF FAYETTEVILLE , ARKANSAS; PROVIDING FOR THE REPLACING OF MONEYS USED FROM A REPLACEMENT FUND; FIXING THE RESPONSIBILITY FOR UTILIZING A REPLACEMENT FUND; PROVIDING A BUDGET FOR A REPLACEMENT FUND; AND FOR OTHER PURPOSES . WHEREAS , the City of Fayetteville has a substantial investment in vehicles and machinery that is used by the various departments of the City , and WHEREAS , the replacement of vehicles and machinery is a major financial problem in the operations of the City of Fayetteville , and WHEREAS , Ordinance Number 1085 , passed and approved June 20 , 1955 , pro- vides a "Vehicle and Maintenance Equipment Replacement Fund " , which is inadequate for today ' s needs , and WHEREAS, Ordinance Number 1382 , passed and approved January 13 , 1964, provides for the establishment of funds ; NOW , THEREFORE : BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: SECTION 1 . That there is hereby appropriated from the unappropriated sur - plus of the General Fund the . sum of $ from the unappropriated surplus of the Public Works Fund the sum of $ d,s9o � �" and from the unappropriated surplus of the Shop Fund the sum of $ resp. © L' all of which to be credited to a fund which is hereby designated as the "Replacement Fund ' l , for the purpose of pro- viding funds for the replacement of vehicles and machinery used by all department of the City . SECTION 2 . That each and every month from and after the passage and Lpproval of this resolution , until terminated by appropriate action of the City Council , there shall be appropriated from the General Fund the sum of s per month , from the Public Works Fund the stun of �D^, � �' $ b per month , and from the Shop Fund, the sum of $ per month , all of which shall be credited to the "Replacement Fund " , for the purpose set forth in Section 1 hereof. SECTION 3 . Expenditures :rorri the Replacement Fund shall be made by resolution passed and approved by the City r;ouncil in special or regular session and only for the replacement of vehicles and machinery listed on the schedule which is attached and hereby made a part r_f this resolution as Exhibit 1 .