(A) Fiscal responsibility and sound budgetary practices. The city shall establish a system of financial policies demonstrating fiscal responsibility through sound budgetary practices. Sound budgetary practices include, but may not be limited to, the funding of the risk management function in accordance with generally accepted accounting principles and at a level that will maintain adequate reserves to meet the program claims and obligations.
(B) Budget requirements.
(1) The city shall, through the annual budget process:
(a) Establish adequate fees to the General Fund and other insured funds and programs, to ensure, to the extent possible, that the respective internal service funds' equity remains actuarially adequate; and
(b) Adopt an annual budget which funds each internal service fund based on a sound actuarial basis.
(2) Operating deficits of any risk management internal service fund reported in the annual financial statements of the city, will be funded in the budget for the first fiscal year beginning after the issuance of the statements. However, if the operating deficit is sufficiently large, and is a result of an isolated extraordinary event or events, that are not recurring in nature, and will result in a fee increase that is excessive in nature, the Mayor may, upon the advice of the RMAS, request Board of Aldermen approval of an amortization of the extraordinary item(s) over a reasonable period of time, but not more than three years. Conversely, no more than 1/3% of any operating surplus in an internal service fund shall be used in any given fiscal year to provide budgetary relief to the general fund.
(C) Program reserve funds. The RMAS shall recommend the amount of reserves for each program and develop a funding plan to systematically amortize, through fees charged to participating funds and programs, the deficiency in such reserves. The amortization period shall be established for a duration that will accomplish adequate funding levels in a reasonable amount of time.
(Ord. passed 4-7-2003)