FINANCIAL MANAGEMENT POLICY STATEMENTS

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Fund Balance/Retained Earnings

To maintain the fund balance and retained earnings of the various operating funds at levels sufficient to protect the City’s creditworthiness, as well as its financial position from unforeseeable emergencies.

1. General Fund Undesignated Fund Balance
   The City shall strive to maintain the General Fund undesignated fund balance at around 20 percent of current year anticipated budget expenditures.

2. Retained Earnings of Enterprise Operating Funds
   The City shall strive to maintain positive retained earnings positions to provide sufficient reserves for emergencies and revenue shortfalls in the three utility enterprise funds. The Water and Sewer Funds operating and contingency reserves will be established and maintained at between 20 and 25 percent of the current year’s budget appropriation. The Electric Fund operating, contingency and fuel/purchase power reserves will be established and maintained at between 20 and 25 percent of the current year’s budget appropriation. Other reserves shall be maintained to comply with bond ordinances and debt reserves specific to the abovementioned funds.

3. Use of Fund Balance/Retained Earnings
   Fund Balance/Reserves shall be used only for emergencies, non-recurring expenditures, or major capital purchases that cannot be accommodated through current year savings. Should such use reduce the balance below the appropriate level set as the objective for that fund, restoration recommendations will accompany the decision to utilize said balance.

4. Debt Service Funds
   The City shall maintain sufficient reserves in its debt service fund, which shall equal or exceed the reserve fund balances required by bond ordinances.

5. Special Revenue Funds
   Special Revenue funds shall maintain sufficient reserves as determined on a fund-by-fund basis as determined by the City Manager and the Director of Finance as directed by the City Commission.