Budget and Financial Policies_rev June 2017

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- In order to ensure proper maintenance of a continued balanced budget the City Council will adopt e compensation and retirement benefit directive that provides guidance and conforms with the established budget directives and reserve requirements asoutlined in this policy. One -Time Monies Fund Balance determined to be one-time in nature, indud�ng but not limited to: ending operating balance, una||ocatedfundba|anuaorum-appropriated°Assigned"fundba|anceishereino|assifiedas°Qne'Trnennonies". Utilization of one-time monies is allowable upon two-thirds approval by the City Council to be utilized in the event a structural budget deficit exists. Use of one-time funds is allowable for one-year and may be eligible for two consecutive years upon further consideration bythe City Council. Unassigned Fund Balance In accordance with Governmental Accounting Standards Board (GASB) 54 and continuing to ensure a continued orderly operation ofCity Government a,ndaddress any unforeseen economic occurrences, the City shall establish the following Reserve Accounts within the Unassigned Fund, Balance category: w Operating Reserve • Economic Uncertainty Reserve w Uma||ocatedAmount As a result of the GASB 54, the following fund balance categories were also created- Non -Spendable; Restricted; Committed; Assigned and Unassigned. Operating Reserve Account As a olea�suna ofprudent fiscal health and recommendations made byGF0A, the City created an Operating Reserve Account, disclosing a range where two months (approximately 15.57%) up to twenty percent (2096) of recurring General Fund (011) operating revenues or expenditures (including transfers) are maintained. At no time is it perrmissib|efor the Operating Reserve requirement tofall below the above -referenced threshold range. Such Operating Reserves shall not be used to fund any form of operating expenditures or to cover any budgetary shortfall other than tnpreserve ongoing cash flow needs for the City. Ifatany point intime itisdeemed that the City budget is perfomming at a budgetary structural deficit and a "Fiscal Emergency" is declared, the use of the above -referenced Operating Reserve account is permissible for up to two consecutive fiscal years upon approval by two thirds of the City Council. The utilization of the Operating Reserve in Year Two (2) reqWres u plan to replenish the funds utilized. Asamatter of prudence and fiscal solvency and inthe event of a projected and/or realized structural deficit (budget bass),the City will utilize Economic Uncertainty (see below for account description) account funds prior to accessing the Operating Reserve account. Economic Uncertainty Acmount It is hereby established that upon fulfillment ofachieving a minimum Unassigned Reserve Account of 10%, the City shall consider the establishment of a reserve account for Economic Uncertainty. The reserve for Economic Uncertainty �s established to offset any major variations in tax receipts as well as fees and charges or unforeseen cost increases. |tishereby established the City maintain mminimum reserve level of1to1U%mfrecurring General Fund revenues with anobjective ofattaining a,maximum goal of1OY6. - Upon determination by the Finance Department, that negative variations in projected revenues from the largest revenue sources defined as Sales tax, Property tax, Property tax in Lieu, Utility Users tax, Business Tax, and Hote� Visitors tax exceed 296with no corresponding General Fund expenditure offset, then the Budget & Financial Pokes (Rev. 6/2017) Page 2