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EXCERPT FROM FINANCIAL MANAGEMENT PLAN <br /> <br />9.1 <br /> <br />9.2 <br /> <br />9.3 <br /> <br />The balance in the General Fund is an essential part of the overall <br />financial management of the City. The General Fund balance <br />indicates the City's overall financial condition Fund balance <br />trends point to financial management practices. The Fund balance <br />is essential in financing operations. This balance is needed to <br />provide adequate cash flow during the first six months of the <br />year, to fund unexpected, unbudgeted expenditures, to provide a <br />temporary buffer against legislative actions that may reduce state <br />aid payments, to provide revenue base stabilization, and to <br />maintain or improve the City's bond rating. <br /> <br />The General Fund shall have an unreserved balance of not less <br />than 40 percent of the next year's budgeted expenditures. This <br />calculation is made at the end of each fiscal year. If the year-end <br />fund balance exceeds this threshold, the City Council will <br />consider the need to retain the excess and increase the minimum <br />fund balance before allocating the monies to other uses. <br /> <br />The unreserved balance in excess of the minimum in 9.2 shall be <br />allocated to other purposes at the discretion of the City Council. <br />The Council shall annually approve a resolution designating the <br />use of the surplus prior to finalizing the Comprehensive Annual <br />Financial Report (CAFR) for the fiscal year just ended. The <br />resolution shall include the following: (1) The amount of the <br />surplus and (2) The specific uses of the surplus. <br /> <br />General Fund Balance <br /> <br />Page <br /> 27 <br /> <br /> <br />