26BUDGET(FULL-LINKED) - Flipbook - Page 282
Unrestricted fund balance - Unrestricted fund balance includes committed, assigned and
unassigned fund balance categories. Governments may deem it appropriate to exclude
from consideration resources that have been committed or assigned to some other purpose
and focus on unassigned fund balance rather than on unrestricted fund balance.
Policy
The responsibility for designating funds to specific classifications shall be as follows:
Committed Fund Balance – The City Commission is the City’s highest level of decisionmaking authority, and the formal action that is required to be taken to establish, modify, or
rescind a fund balance commitment is a resolution approved by the City Commission.
Assigned Fund Balance – The City Commission has authorized the city manager and
administration as officials authorized to assign fund balance to a specific purpose as
approved by this fund balance policy.
Minimum Unassigned Fund Balance
It is the goal of the City to achieve and maintain an unrestricted fund balance in the general
fund be no less than two months (16%) and not more than (50%) of regular general fund
operating revenues. If the unrestricted fund balance at fiscal year-end falls below the goal,
the City shall develop a restoration plan to achieve and maintain the minimum fund balance.
Should unassigned fund balance of the general fund ever exceed the maximum (50%)
range, the City will consider such fund balance surplus for one-time expenditures that are
non-recurring in nature, and which will not require additional expense outlays for
maintenance, additional staffing or other recurring expenditures.
Budget Stabilization Fund
In addition to the general fund reserve, the City shall maintain a budget stabilization fund
pursuant to Public Act 30 of 1978, as amended for the purpose of setting aside a reserve to
meet unanticipated expenditure needs, unanticipated revenue shortfalls, or other
emergencies. The unrestricted fund balance should be no less than $550,000, but not more
than the state statute maximum of 15% of general fund revenues.
Fund Balance Restoration
Should the fund balance reserve or budget stabilization fund need to be utilized, after the
annual analysis calculation, administration will notify the City Commission and bring a plan
within 90 days, should balances fall outside of policy limits. Incorporating into the multi-year
budget is the goal to restore fund balance within three years for the general fund and ten
years for the budget stabilization fund. Generally, restoration comes from excess revenues
over expenditures but may also come from one-time revenue sources.
Order of Expenditure of Funds
When multiple categories of fund balance are available for expenditure (e.g., a project is
being funded partly by a grant, funds set aside by the City Commission, and unassigned
fund balance), the City will start with the most restricted category and spend those funds
first before moving down to the next category with available funds.
Adopted May 15, 2023
