(A) Establishment; purpose. There is hereby established a minimum fund balance policy in and for the city. The purpose of this policy is to take a proactive approach to financial management in the city. The Policy will assist the city in maintaining the security of the General Fund, Water Operating Fund, Sewer Operating Fund and Solid Waste Disposal Fund and contribute to the financial stability of the city by maintaining adequate financial reserves. The policy also will allow the Administration and Council to recognize warning indicators of financial stress at an early date.
(B) Adjustment of annual appropriations. At the time of budget preparation, annual appropriations for the General Fund, Water Operating Fund, Sewer Operating Fund and Solid Waste Disposal Fund shall be adjusted to ensure that the projected fund balance is greater than or equal to the minimum fund balance. The minimum fund balance required shall be equal to 10% of the total operating and capital budget for each fund, excluding non-debt service transfers and any portion of the operating expenditures and capital projects funded by grants.
(C) Calculation of projected fund balance. The projected fund balance will be calculated at the time of budget preparation. Projected fund balance will be calculated by taking the budget year’s estimated beginning unencumbered fund balance, plus anticipated revenue, less total appropriations. The resulting fund balance must comply with the minimum fund balance established above.
(D) Application of policy. This policy will be applied to the proposed annual budget of the city prior to presenting the budget to Council. Any changes in the budget made by Council prior to or after the adoption of the annual appropriation ordinance must also comply with the restrictions established in this policy.
(E) Waiver of policy. If, during appropriation discussions, the Administration and/or Council determine that the city cannot meet the requirements of this policy, the requirements of this section may be waived by a majority vote of seven members of Council. A concise statement will be included in the annual appropriations ordinance explaining the decision to waive the policy. The statement should include the reason or reasons given for waiving the policy and a specific timetable for returning to the policy.
(Prior Code, § 234.10) (Ord. 194-2000, passed 10-23-2000)