The city's annual budget shall be prepared in accordance with North Carolina General Statutes, the operating budget shall cover a fiscal year beginning July 1 and ending June 30 and shall be consistent with the North Carolina Local Government Budget and Fiscal Control Act. The City Council shall approve the budget before July 1 of the applicable fiscal year.
(A) Expenditures.
(1) Budget management. Expenditures are monitored continually throughout the fiscal year. Budgeted funds by department will only be spent for departmental purposes for which they were intended. The annual operating budget ordinance defines staff authorization for operating budget adjustments.
(2) Monthly reporting. In accordance with G.S. § 159-25(a)(3) as often as may be requested financial statements will be provided to the City Manager and Council. These reports shall include, but are not limited to, an analysis of fiscal year to date budgeted and actual revenues and expenditures.
(3) Fund transfers.
(a) The Finance Officer shall transfer funds to enable the timely completion of the position's mandated responsibilities consistent with adopted budget authorization and as may be amended from time to time.
(b) Transfers between operating departments and from general fund to capital projects shall be accomplished only by Council authorization. Copies of budget amendments as approved by the Council shall be documented within minutes maintained by the City Clerk.
(4) Payroll. Payroll preparation shall be the responsibility of the Finance Officer and administered by city personnel to provide separation of duties required by prudent internal control procedures. Payroll will be administered in accordance with the Personnel Policy of the city.
(B) Reserve funds.
(1) Fund balance. Funds not appropriated for expenditures in a fiscal year are part of the fund balance. Such funds will be invested in accordance with the city's Investment Policy found in § 36.34(E). In the governmental fund, the financial statement of fund balance is composed of five classifications designed to disclose the hierarchy of constraints placed on how the fund balance can be spent and are as follows:
(a) Non-spendable fund balance. This classification includes amounts that cannot be spent because they are either:
1. Not in spendable form; or
2. Legally or contractually required to be maintained intact.
(b) Restricted fund balance. This classification includes amounts constrained for a specific purpose by external parties such as creditors, constitutional provision or enabling legislation. Restrictions are to be listed by purpose.
(c) Committed fund balance. This classification includes amounts that can only be used for specific purposes approved by a majority vote of the Council. Any changes or removal of specific purpose requires majority action by the Council. Action to constrain financial resources must occur prior to year-end, however, the amount can be determined in the subsequent period.
(d) Assigned fund balance. For the general fund, a portion of fund balance that the Council intends to use for specific purposes. Any amount to be appropriated for subsequent year's expenditures shall be approved during the annual budget adoption process.
(e) Unassigned fund balance. For the general fund, amounts not classified as non-spendable, restricted, committed or assigned.
(2) Minimum fund balance policy.
(a) For the general fund, management shall conduct the business of the city in such a manner that available fund balance is at least equal to or greater than 16% of budgeted expenditures for the succeeding fiscal year.
(b) The Council may appropriate fund balances that will reduce available fund balance below the percentage established above for the purposes of a declared fiscal emergency or other such global purpose as to protect the long-term fiscal security of the city. In such circumstances the Council will adopt a plan to restore the available fund balances to the policy level within 36 months from the date of appropriation. If restoration cannot be accomplished within such time without severe hardship to the city, then the Council will establish a different but appropriate time period.
(3) Capital reserve fund. The Council may establish a capital reserve fund for the purpose of providing capital for substantial improvements in city infrastructure and/or significant planned asset acquisitions. Monies from this fund shall be expended only for the purpose and to the extent designated by Council authorization.
(C) Budget preparation.
(1) Annual budget. The Budget Officer or his or her designee shall prepare annually a budget schedule for submission to the Council setting forth components of the budget process and deadlines for each leading to budget adoption.
(2) Budget schedule. Deadlines in the budget schedule are to include but are not limited to distribution of the budget calendar, departmental budget requests, budget retreat, submission of the draft budget, submission of draft budget with message, public hearing on the budget and adoption of the budget ordinance. The Budget Officer shall formally present the city's budgets, including budget message at a regular Council meeting. Public hearings and Council adoption shall be accomplished in accordance with the North Carolina General Statutes.
(Ord. passed 11-14-2016)