FYE 14 Budget prelim - City of Norman

CITY OF NORMANNET REVENUE STABILIZATION FUNDBUDGETHIGHLIGHTSBackgroundIn fiscal year 2011, Council directed staff to prepare a formal policy in Ordinance formcodifying the City’s reserve policies and complying with Governmental Accounting StandardsBoard Statement # 54. Direction was given to establish a separate “Rainy Day Fund” which couldnot be used except in unusual circumstances. The Ordinance (effective July 28, 2011) establishes aNet Revenue Stabilization of “Rainy Day Fund”, which would have minimum fund balance of threepercent (3%) of annual budgeted General Fund expenses, a target fund balance of four and a halfpercent (4.5%) of General Fund expenses and a maximum fund balance of six percent (6%) ofannual General fund expenses. The Ordinance also requires a minimum General Fund OperatingReserve fund balance of three percent (3%) of General Fund expenses and would require that thetwo percent (2%) Emergency Reserve allocation be included in future year budgets. Under theOrdinance, Net Revenue Stabilization Fund balance could only be appropriated for expenditure bythe City Council if at least one of three circumstances is met:1.) The General Fund Operating Reserve fund balance is projected to fall below one percent(1%) of budgeted expenditures.2.) A natural or man-made disaster has occurred; AND the City of Norman has spent orobligated to spend the two percent Emergency Reserve account in the General Fund3.) A major one-time or capital expenditure has been necessitated, such as for major repairsto or replacement of City of Norman facilities.On June 28, 2011, City Council approved Ordinance O-1011-58 which amends Article VIII,Sections 8-103 and 8-104 of Chapter 8 of the Code of the City of Norman to create the Net RevenueStabilization Fund and the requirements to maintain Net Revenue Stabilization Fund Balances.FYE 14 BudgetCouncil agreed to transfer $1,500,000 into the Net Revenue Stabilization Fund in FYE 12.In FYE 14 there is no budgeted transfer from the General Fund to the Net Revenue StabilizationFund.ANNUAL BUDGET57