§ 2-551. Creation of reserve accounts.

There is hereby created, in each of the various governmental fund types (general fund, special revenue funds, debt service funds, and capital projects funds) and proprietary fund type (enterprise funds) of the city, reserve accounts equal to the following:

(1) General fund—Emergency sinking account. In the general fund, there shall be created an emergency sinking account with a lower limit of fifteen (15) percent and an upper limit of twenty (20) percent of general fund operating expenditures calculated based on the original adopted fiscal year budget. The purposes of the sinking account shall be:

a. To advance the funds necessary to pay for non-discretionary expenses such as payroll and insurance premiums that must be paid during the first quarter of the fiscal year and that will be reimbursed when ad valorem revenues are received; and

b. To advance the funds necessary to pay for construction of grant-funded projects that will be reimbursed by federal or state agencies; and

c. To advance financial resources necessary for responding to emergencies that will be reimbursed by insurance proceeds or grants from FEMA or other federal or state agencies; and

d. To mitigate current and future revenue shortfalls, unanticipated expenditures, and to ensure stable tax rates.

(2) Special revenue funds. By definition, special revenue funds are created to account for the proceeds of specific revenue sources (other than expendable trusts or for major capital projects) that are legally committed to expenditure for specified purposes. As such, no specific reservation of funds is created by virtue of enactment of this division; rather the amount of any reservation of funds shall be governed by the legal authority underlying the commitment.

(3) Debt service fund. Debt service funds are typically subjected to the creation of very specific committed amounts as a part of the ordinance or resolution which authorizes the issuance of the debt instrument which is being repaid. Therefore, this policy does not create any specific reservation of funds within the debt service fund; rather, reserve requirements for any outstanding city debt instruments will be as derived from the ordinance or resolution authorizing the issuance of the debt.

(4) Capital projects fund. The capital projects fund was created to account for financial resources to be used for the acquisition and construction of major capital facilities and improvements. Occasionally, these projects may extend beyond a single fiscal year. At a minimum at fiscal year-end committed funds, coupled with estimated revenues for the ensuing fiscal year, must be sufficient to fund all outstanding fund obligations.

(5) Utility system—Emergency sinking account. In the utility system fund, there shall be created an emergency sinking account with a lower limit of fifteen (15) percent and an upper limit of twenty (20) percent of utility system operating expenses based on the original adopted fiscal year budget. The purposes of the sinking account shall be:

a. To advance the funds necessary to pay for construction of grant-funded projects that will be reimbursed by federal or state agencies; and

b. To advance financial resources necessary for responding to emergencies that will be reimbursed by insurance proceeds or grants from FEMA or other federal or state agencies; and

c. To mitigate current and future revenue shortfalls, unanticipated expenditures, and to ensure stable fee structure.

(Ord. No. 2011-11, § 1, 7-19-11)