(a) Purpose. In order to maintain adequate resources to support uninterrupted level of services, the Municipality shall maintain an unencumbered fund balance in specific funds. This Fund Reserve Policy shall serve as a tool to sustain day-to-day operations, avoid cash-flow interruptions, and serve as a safeguard for possible unanticipated emergencies and disasters. The specific level of reserve is specified below for each fund subject to said policy, but as a general rule, the Fund Reserve Policy applies to only those funds that support personnel and is set at a level of twenty percent (20%) of current fiscal year's fund appropriation for the year-end, unencumbered balance.
(b) Fund Reserve Levels.
(1) General Fund (101) The minimum fiscal year-end, unencumbered balance for the General Fund shall not be less than twenty percent (20%) of the total annual General Fund appropriations for the current fiscal year.
(2) Road Fund (201) The minimum fiscal year-end, unencumbered balance for the Road Fund shall not be less than twenty percent (20%) of the total annual Road Fund appropriation for the current fiscal year.
(3) Fire Fund (209) The minimum year-end, unencumbered balance for the Fire Fund shall not be less than twenty percent (20%) of the total annual Fire Fund appropriations for the current fiscal year.
(4) Police Fund (245) The minimum year-end, unencumbered balance for the Police Fund shall not be less than twenty percent (20%) of the total annual Police Fund appropriations for the current fiscal year.
(5) Sewer Fund (602) The minimum year-end, unencumbered balance for the Sewer Fund shall not be less than twenty percent (20%) of the total annual Sewer Fund appropriations for the current fiscal year.
(6) Water Fund (603) The minimum year-end, unencumbered balance for the Water Fund shall not be less than twenty percent (20%) of the total annual Water Fund appropriations for the current fiscal year.
(7) Refuse Fund (604) The minimum year-end, unencumbered balance for the Refuse Fund shall not be less than twenty percent (20%) of the total annual Refuse Fund appropriations for the current fiscal year.
(c) Designation and Use of Surplus Funds.
(1) At the end of the fiscal year, the Director of Finance shall certify which funds have fund balances greater than the of twenty percent (20%) minimum reserve balance of this policy. Funds in excess of this fund reserve policy shall been designated as surplus funds.
(2) Surplus funds shall be available for use as recommended by staff and approved by Council during the budget process.
(d) Use of Reserve Funds and Restoring Fund Reserve Levels.
(1) Use of reserve funds that result the fund to go below the twenty percent (20%) fund balance shall only be used to mitigate annual unforeseen shortfalls or actual revenues less than projected revenues or to maintain current level of services due to economic conditions, or actions, policies, or mandates of the state and/or federal government, or unforeseen emergencies. Should any unanticipated reductions in revenues be deemed to be recurring, adjustments shall be made in the following fiscal year's budget to reflect revised, accurate revenue projections.
(2) If the reserve fund level falls below the established policy, then the fund reserve level shall be restored in the following fiscal year's budget unless approved by Council to be restored for a multi-year period due to extraordinary circumstances.
(e) Amending. Though these specific fund balances are set, they may be periodically adjusted upon staff recommendation and Council approval based on anticipated future funding needs, historical trends, revenue projections, the economy and contractual obligations.
(f) Authority. It is the responsibility and authority of the Director of Finance to ensure this policy is followed and to recommend any amendments to said policy.
(Ord. 20-18. Passed 10-9-18.)