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Ordinance to Amend Various Funds to Comply with Accounting Requirements of GASB Statements No. 87 Regarding Leases and No. 96 Regarding Subscription-Based Information Technology Agreements
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Department: |
Finance |
Meeting Date: |
6/17/2025 |
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Contact Name: |
Michael Pirsch |
Public Hearing: |
No |
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Contact Phone: |
910-342-2771 |
Advertising Date/Advertised By: |
N/A |
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Attachments: |
Attachment #1: Ordinance |
PURPOSE:
Attached for your consideration is an ordinance that maintains the City’s compliance with Governmental Accounting Standards Board ("GASB") Statement 87 regarding leases, and Statement 96 regarding subscription-based information technology arrangements.
BACKGROUND:
Staff has reviewed the City’s leases and subscription-based IT agreements, and has identified those that are subject to GASB requirements. For those leases and agreements subject to the standards, related operating lease or subscription payments will be converted to principal and interest expenses for financial reporting purposes. The additional budget impact of the standards involves agreements that began during the current fiscal year and where the City is the lessee or subscriber under the agreement. For any leases or agreements meeting these criteria, it is required to record a capital expense for the present value of all of the future lease or subscription payments offset by another-financing source. Accordingly, this ordinance appropriates debt service expense and capital expense for certain City lease and subscription agreements that are subject to the accounting standards.
BUDGET IMPACT:
Appropriated capitalized leases and subscription-based technology arrangements will increase the budget for these accounts by $409,746 and $4,375,038 respectively.
RECOMMENDATION / ACTION REQUESTED:
Passage of the attached ordinance is recommended.