(A) In an effort to provide fiscal stability for the city and allow city management to apply fiscal prudence in managing the budgetary condition of the city, a desired stabilization fund balance level is established. The amounts for the desired stabilization fund balance shall be deposited into a separate bank account (hereafter referred to as “Stabilization Account”) and accounted for in the General Fund. The amounts deposited in the Stabilization Account (including interest) are to be used only for the purposes defined in this section. In addition, the city may, at its discretion, invest some of the stabilization monies of this separate bank account in to longer term investments, such as fully-insured certificates of deposit, US treasuries backed by the full faith and credit of the United States government, and ad valorem-back judgments assessed against the city.
(B) The minimum amount to be contained in the Stabilization Account is $1,000,000. The General Fund will exclude any additional funds added for reporting purposes.
(C) Minimum funding for the Stabilization Account when the balance is less than the minimum level as established in division (B) above shall not be less than 75% fund balance that falls into the categories of assigned and unassigned as of the most recent financial statements. This funding is to be transferred annually to the Stabilization Account.
(D) All interest and investment income earned from the balance of the Stabilization Account shall be left in the Stabilization Account.
(E) Amounts held in the Stabilization Account in excess of the minimum amount established in this section may only be expended when certain specific circumstances exist. The circumstances requiring the expenditure of Stabilization Account funds are not expected to recur on a routine basis. The circumstances when it is necessary to appropriate or spend Stabilization Account funds are subject to the objective criteria outlining the parameters of acceptable uses of Stabilization Account funds included below. The existence of the circumstances must be declared by a five-sevenths majority vote of all of the members of the governing body establishing that one or more of the criteria listed below exists:
(1) Expenditures for emergency situations for life, health, or public safety issues for which no existing appropriation exists;
(2) Situations where a significant revenue decline in excess of 5% of General Fund original budgeted estimated revenues (excluding transfers in) 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) Correcting the results of an inaccurate estimate, accounting error, or budgeting error in excess of 5% of General Fund original budgeted estimated revenues (excluding transfers in);
(4) 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. These efficiency improvements should result in tangible benefits that can be measured financially, through better service to the citizens, or in increased productivity for city employees;
(5) Expenditures where the proposed use is of a nonrecurring nature, such as start-up costs of a program whose ongoing costs are otherwise funded, matching funds for a grant, or up-front payment of grant eligible expenses to be reimbursed by grant revenues. These expenditures should result in tangible benefits that can be measured financially, through better service to the citizens, or in increased productivity for city employees;
(6) Expenditures and/or longer term investments where the proposed use is related to a judgment against the city as determined by any court of competent jurisdiction or an administrative law judge or an administrative agency designated by the state Legislature to issue workers’ compensation judgments, decisions and determinations.
(F) Amounts held in the Stabilization Account that are below the minimum threshold may be expended only under specific limited circumstances. The circumstances when it is necessary to appropriate or spend below the minimum amount required by this section, are set out below. The existence of the circumstances must be declared by a five-sevenths majority vote of all of the members of the governing body establishing that one or more of the criteria listed below exists:
(1) Expenditures for emergency situations resulting from natural disasters for life, health, or public safety issues for which no existing appropriation exists;
(2) Situations where a significant revenue decline in excess of 5% of General Fund original budgeted estimated revenues (excluding transfers in) 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) Correcting the results of an inaccurate estimate, accounting error, or budgeting error in excess of 5% of General Fund original budgeted estimated revenues (excluding transfers in);
(4) Expenditures and/or longer term investments where the proposed use is related to a judgment against the city as determined by any court of competent jurisdiction or an administrative law judge or an administrative agency designated by the state Legislature to issue workers’ compensation judgments, decisions and determinations.
(Ord. 3239, passed 8-21-12; Am. Ord. 3276, passed 10-20-15; Am. Ord. 3308, passed 6-20-17)