(A) There is hereby created a reserve fund to be known as the “Stabilization Reserve Fund.” The amounts deposited in this reserve fund are to be used only for the purposes defined in this section.
(B) This fund shall be created for the purpose of receiving, holding, and accounting for amounts designated as stabilization reserves. These funds are to be contributed by the General Fund, Alva Utility Authority Fund, Airport Fund, Cemetery Fund, Alva Economic Development Fund, and other funds as deemed appropriate by resolution of the City Council.
(C) The minimum amount to be contained in the Stabilization Reserve Fund is 16% of budgeted annual non-capital operating expenses for each of the funds contributing stabilization reserves into the Stabilization Reserve Fund.
(D) The maximum amount to be contained in the Stabilization Reserve Fund is 35% of budgeted annual non-capital operating expenses for each of the funds contributing stabilization reserves into the Stabilization Reserve Fund.
(E) Minimum funding for the Stabilization Reserve Fund when the balance is less than the maximum level as established in subsection (D) above of this section shall not be less than 2% of budgeted non-capital operating expenditures. This funding is to be transferred annually from the participating funds to the Stabilization Reserve Fund.
(F) Amounts held in the Stabilization Reserve Fund are to be designated by purpose for use only by the fund from which the funds were contributed. Accounting processes shall be established to provide for reporting by purpose.
(G) Amounts held in the Stabilization Reserve Fund in excess of minimum amounts may only be expended when certain specific circumstances exist. The circumstances requiring the expenditure of stabilization funds are not expected to recur on a routine basis. The circumstances when it is necessary to appropriate or spend stabilization amounts are subject to the objective criteria outlining the parameters of acceptable uses of stabilization funds included below. The existence of the circumstances must be declared by seven of the eight voting members of the governing body establishing that one or more of the criteria listed below exists:
(1) Expenditures for emergency situations as defined above for life, health, or public safety issues for which no existing appropriation exists;
(2) Situations where a significant expense or revenue decline arises that could not have reasonably been foreseen, and for which new revenue is not available and transfers of existing appropriations are not considered feasible or appropriate in maintaining existing service levels;
(3) Expenditures where the proposed use is of a nonoperational nature involving capital or technical purchases having a useful life of greater than five years that will improve the efficiency of the city government;
(4) Expenditures where the proposed use is of a nonrecurring nature, such as a study, or for start-up costs of a program whose ongoing costs are otherwise funded; or
(5) Correcting the results of an inaccurate estimate, accounting error, or budgeting error.
(H) Amounts held in the Stabilization Reserve Fund that are below the minimum threshold may be expended only under specific limited circumstances. The circumstances when it is necessary to appropriate or spend minimum required amounts, even in circumstances where the amounts on hand may fall shy of established minimum levels, are set out below. The existence of the circumstances must be declared by seven of the eight voting members of the governing body establishing that one or more of the criteria listed below exists:
(1) Expenditures for emergency situations as defined above for life, health, or public safety issues for which no existing appropriation exists;
(2) Situations where a significant expense or revenue decline arises that could not have reasonably been foreseen, and for which new revenue is not available and transfers of existing appropriations are not considered feasible or appropriate in maintaining existing service levels; or
(3) Correcting the results of an inaccurate estimate, accounting error, or budgeting error.
(Prior Code, § 20-220) (Ord. 2015-050, passed 4-6-2015)