Resolution 6105 - Laserfiche WebLink

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61 � 5 CITY OF ORONO FUND BALANCE POLICY I. PURPOSE The City understands it has a responsibility to maintain prudent financial operations to ensure stable city operations for the benefit of city residents and businesses. Fund balance reserves are an important component in ensuring the overall financial health of a community, by giving the City cushion to meet contingency or cash-flow timing needs. The Office of the State Auditor recommends that at year-end, local governments maintain an unreserved fund balance in their general fund and special revenue funds of approximately 35 to 50% of fund operating revenues, or no less than five months of operating expenditures. II. POLICY 1. The City will maintain a minimum��a unassi�ned General Fund balance of 45% of the fund's annual operating budget. a) Unassigned fund balances in excess of 50% will be transferred to the Community Investment Construction Fund. Such transfer is pursuant to Council approval. b) Unassigned fund balance of less than 45%will be addressed through the budgeting process or by transfers in from other funds. c) An assignment or restriction of fund balance may be used to offset revenues earned in one year where substantial services axe rec�uired to be performed in the next fiscal e� riod• 2. When both restricted and unrestricted resources are available for use, it is the Citv's policv to first use restricted resources and then use unrestricted resources as they are needed. When unrestricted resources are available for use it is the Citv's policv to use resources in the following order• 1) committed 2) assi�ned 3) unassi�ned. These fund balance classifications apply onlv to Governmental Funds not Enterprise Funds. ai + + +�.,. ., ,.+ �v,..,ii.,„t,i;,�.,*oa u,:ii �.o ao�:,..,.,�oa « .,.,..,.,. �..,..� .,..�._.,. _-a" v .,., .a_--� ..--- -- ----a----'---