(A) The unrestricted non-committed General Fund balance will be maintained at a level sufficient to provide for the required resources to:
(1) Plan for contingencies, and
(2) Maintain good standing with rating agencies, and
(3) Avoid interest expense for operating budget needs and capital projects, and
(4) Provide for investment income, and
(5) Ensure short-term cash availability when anticipated revenue is unavailable.
(B) (Reserved).
(C) The town will maintain a minimum unrestricted non-committed General Fund balance of 8% of the current period’s budgeted expenditures. The unrestricted non-committed General Fund balance does not include the non- spendable, restricted or committed fund balance that is either inherently non-spendable, has externally enforceable limitations on use, or has limitations imposed by the Town Council.
(D) To avoid a balance in excess of the level deemed sufficient for prudent fiscal management, the town will maintain a maximum unrestricted non-committed General Fund balance of 16% of the current period’s budgeted expenditures. Excess surpluses will be available for appropriation by the Town Council in a subsequent fiscal year to fund capital, operating, or debt service expenditures as determined by the Town Council during the budget for that subsequent fiscal year.
(E) An unrestricted non-committed General Fund balance in excess of the minimum recommended level may be utilized for the purposes listed below.
(1) Meeting future capital needs, or
(2) Offsetting difficult economic times, or
(3) Stabilizing fluctuations in cash flow requirements, or
(4) Provisions for emergency situations.
(F) If the unrestricted non-committed General Fund balance falls outside of the above parameters, budgeted revenues will be either greater or less than budgeted expenditures in subsequent years to bring the unrestricted non-committed General Fund balance into compliance with this policy.
(Ord. passed 4-18-05; Am. Ord. 2011-13, passed 12-19-11)