In order to protect against the need to reduce service levels or raise taxes and fees due to temporary revenue shortfalls or unpredicted onetime expenditures, the village shall establish cash and investments balance (generically referred to as fund balance) levels for each fund as hereinafter provided, and the following reserve policies shall be followed in the administration of the business of the village:
(A) General Fund:
1. Fund balance shall be equal to at least three (3) months of the average monthly expenditure.
2. Any additional designation of fund balance for specific reserves shall be approved by the board of trustees.
3. If the unreserved balance falls below the minimum, the board of trustees shall be immediately notified and a plan will be developed to return to the minimum balance within a reasonable period of time.
(B) Water And Sewer Funds:
1. Fund balances shall be equal to at least two (2) months of the average monthly expenditures.
2. If the unreserved balance falls below the minimum, rates will be adjusted so as to gradually return to the minimum within a reasonable period of time. If the balances exceed the maximum, the overage will be used to keep future rate increases lower.
(C) Commuter Parking Lot Fund: Fund balance shall be equal to at least two (2) months of the average monthly expenditures.
(D) Police Pension Fund: The police pension fund balance shall be equal to the recommended fund balance as determined by an actuarial study, as required by law.
(E) All Other Funds: These funds are special revenue funds used primarily to fund special projects. The fund balances will be reviewed annually by the village board during the budget preparation to determine their adequacy to fund special projects. The village board shall pursue short term funding mechanisms such as lines of credit to provide temporary relief in cases of revenue shortfalls, expenditure increase, or fund balance decline. (Ord. 2015-13, 10-1-2015)