City council is taking the first steps to address maintaining its fund balance at consistent levels.
City Manager Paul Sabiston said following tonight’s work session a proposed general fund balance resolution is a checks and balances system which will require the city to watch expenditures.
According to a memo from Finance Director MeLinda Hite, the policy will do the following:
Provide sufficient cash flow for daily financial needs.
Secure and maintain investment grade bond ratings.
Offset significant economic downturns or revenue shortfalls.
Provide funds for unforeseen emergency expenditures.
While during a March retreat council discussed setting the percentage at 30 percent, council tonight discussed putting it at 25 percent and making sure it doesn’t below 15 percent.
The percentages would be tallied at the end of the fiscal year.
The highest the city’s fund balance has been recently was 32 percent in the 1997-1998 fiscal year. In the 2007-2008 fiscal year it dropped to 8.3 percent, Hite said.
Since the fund balance fluctuates throughout the year, Sabiston said, “I think the consistent way is to focus our goals at the end of the fiscal year.”
The city manager said the proposed measure, which will be considered at next Tuesday’s regular council meeting, means the city won’t spend funds without them being in the budget or they are authorized expenditures.
Sabiston expects the fund balance at the end of this fiscal year to be about 29 percent. “When you go back to 1997-1998 is when we were above 30 percent. That was before theater days and before bad economy days.”
Mayor Emery Doughtie said 15 percent would give the city two months of operating expenses while 24 percent would be about three months. “Twenty-four is halfway between the low and where we are expected to be next year. I don’t want us to deprive the citizens of the services we have to offer. Three months makes me feel a lot better if we had a tornado.”
In other matters tonight:
City council discussed outdoor dining which will be on the table at next week’s regular meeting.
Council had concerns about a $500 permit for restaurants and want to see that fee lowered to $150.
Approved a $250 Christmas bonus for employees.
