FYE 14 Budget prelim - City of Norman

Net Revenue Stabilization Fund balances are considered to be “Restricted” fund balancesunder accounting standards. The combination of these Fund balance reserverequirements results in a minimum of eight percent of General Fund expenditures to beheld in reserve, a target of 9.5% and a maximum of 11 percent (11%).During fiscal year 2012-2013, the City Council considered making a deposit to the RainyDay Fund in Finance Committee discussions, but a decision on whether to do so has notbeen made as of this writing. Approximately $1,500,000 has been deposited to the NetRevenue Stabilization Fund. By the City of Norman’s adopted reserve ordinance, then,approximately an additional $640,000 must be appropriated and held in the Rainy DayFund by the end of fiscal year 2013-2014 to meet the minimum Fund balance mandatedby City Ordinance, and approximately $1,700,000 would need to be deposited to meet thetargeted (4.5% of General Fund expenditures) Rainy Day Fund balance.The City of Norman’s operating revenues have been exceeded by ongoing operatingexpenditures in recent years, causing fund balance to be drawn down below the levels setby City policy:Because of the inherent volatility in Norman’s primary sources of General Fund revenue(sales and use tax) and Norman’s susceptibility to extreme weather conditions(necessitating unexpected emergency expenditures), it is even more important forNorman to maintain adequate fund balances than the average municipality. The FYE2013 General Fund “Operating” balance is projected to meet the level mandated byCity’s Reserve Ordinance. The Net Revenue Stabilization (“Rainy Day”) Fund balancev