4.8 SR 10-21-2024 - Laserfiche WebLink

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Financial Management Policies Page 15 2.Restricted Amounts subject to externally enforceable legal restrictions. Examples include grants, tax increment and bond proceeds. 3.Unrestricted The total of committed fund balance, assigned fund balance, and unassigned fund balance: ▪Committed fund balance – amounts that can be used only for the specific purposes determined by a formal action of the government’s highest level of decision-making authority. Commitments may be changed or lifted only by the government taking the same formal action that imposed the constraint originally. ▪Assigned fund balance – amounts a government intends to use for a specific purpose; intent can be expressed by the government body or by an official or body to which the governing body delegates the authority. ▪Unassigned fund balance – residual amounts that are available for any purpose in the general fund. The General Fund should be the only fund that reports a positive unassigned fund balance amount. This classification is also used to account for deficit fund balances in other governmental funds. B. General Fund ▪The city will maintain an unassigned General Fund balance of not less than 40-45% of budgeted operating expenditures; however, this need could fluctuate with each year’s budget objectives. ▪Annual proposed General Fund budgets shall include this benchmark policy. Council shall review the amounts in fund balance in conjunction with the annual budget approval and adjust as necessary to meet expected cash-flow needs. ▪In the event the unassigned General Fund balance will be calculated to be less than the minimum requirement at the completion of any fiscal year, the city shall plan to adjust budget resources in the subsequent fiscal years to bring the fund balance into compliance with this policy. ▪The City Council may consider appropriating (for authorized purposes) year-end fund balance more than the policy level or increasing the minimum fund balance. An example of preferred use of excess fund balance would be for one-time expenditures, such as: 1. An expenditure of significant long-term benefit or legacy to the community. 2. A one-time (non-recurring) expenditure or grant match opportunity. 3. Catch-up funding or long-term obligations not previously recognized. 4. A one-time unplanned revenue shortfall. 5. An unplanned expenditure due to an emergency or disaster. 6. Retirement of existing debt. 7. To fund policy shifts by other governmental entities having a negative impact on the city. 8. To moderate property taxes. ▪Appropriation from the minimum fund balance shall require the approval of the City Council and shall be used only for non-recurring expenditures, unforeseen emergencies or immediate capital needs that cannot be accommodated through current year savings. Replenishment recommendations will accompany the decision to utilize fund balance. ▪At the discretion of the City Council, fund balance may be committed for specific purposes by resolution designating the specific use of fund balance and the amount. The resolution would need to be approved no later than the close of the reporting period and will remain binding unless removed in the same manner. ▪The City Council authorizes the finance manager or city administrator to assign fund balance that reflects the city’s intended use of those funds. ▪When both restricted and unrestricted resources are available for use, it is the city’s policy to Page 60 of 294