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[COMMITTEE SUBSTITUTE FOR] ORDINANCE NO. 230157
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Sponsor: Mayor Quinton Lucas
Amending Chapter 2, Code of Ordinances, by repealing Section 2-1954 relating to the City's fund balance and reserve policy and enacting in lieu thereof one new section of like number and subject to modify the required funding floor and ceiling, respectively, of the emergency reserve funds and countercyclical reserve funds of the general fund and amending permissible uses for unassigned general fund balance.
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WHEREAS, the City has a thorough annual budget process, including quarterly budget analysis, and five-year business planning cycle during which Council, City staff, and residents have the opportunity to shape how the City spends taxpayer resources; and
WHEREAS, the City currently has a structural imbalance driven by expenditure growth exceeding revenue growth in the General Fund; and
WHEREAS, the City Council desires to maintain a prudent level of financial reserves to guard its citizens against service disruption in the event of unexpected temporary revenue shortfalls or unpredicted one-time expenditures, such as those seen in 2020 and 2021; and
WHEREAS, maintaining a strong fund balance can be critical in weathering an economic downturn, emergency capital repairs, or volatile revenue or unexpected expenditure; and
WHEREAS, fund balance is a focal point of credit rating agencies and investors; when governments maintain more fund balance, they are viewed more favorably and can achieve lower borrowing costs; and
WHEREAS, the Government Finance Officers Association (GFOA) recommends, at a minimum, no less than two months of regular general fund operating revenues or regular general fund operating expenditures for reserves and that local governments undertake a risk-based review of required reserves; and
WHEREAS, the Moody's Investors Service recommends a fund balance between fifteen (15) percent and thirty (30) percent of revenue...
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