The city conducts an annual audit which puts the city’s
finances in perspective as to what was spent, what was collected, and what are
the balances in the various accounts of the city. After the audit these balances are compared
to a threshold that was established in the city’s Comprehensive Fund Balance
Policy. The policy in general provides
for a minimum amount of cash to be held as undesignated reserves to be used for
cash flow and/or unbudgeted expenses.
The threshold for the General Fund is 40% to 45% of the
following years budgeted expenses. The
threshold for the sewer fund has been maintained at 45% but there is no formal
threshold for sewer funds. Sewer funds
are split into either operating or capital improvement accounts. Sewer funds in excess of the amounts are transferred to long term resource accounts.
If funds were to dip under the threshold a decision would need to be
made as to how those funds would be replenished.
In reviewing these balances from year end the General Fund
fell within the 40-45% threshold so no transfer was recommended. The Sewer Fund on the other hand had
resources in excess of 45% in the operating fund. The amount that exceeded the threshold was
$23,469. These funds were recommended to
be placed in the Sewer Capital Improvement Fund. As such the council approved the transfer and
funds will be moved.
