10-6-116 - Accumulated fund balances -- Limitations -- Excess balances -- Unanticipated excess of revenues -- Reserves for capital improvements.
10-6-116. Accumulated fund balances -- Limitations -- Excess balances --Unanticipated excess of revenues -- Reserves for capital improvements.
(1) Cities are permitted to accumulate retained earnings or fund balances, as appropriate,in any fund. With respect to the General Fund only, any accumulated fund balance is restrictedto the following purposes:
(a) to provide working capital to finance expenditures from the beginning of the budgetperiod until general property taxes, sales taxes, or other applicable revenues are collected,thereby reducing the amount which the city must borrow during the period, but this Subsection(1)(a) does not permit the appropriation of any fund balance for budgeting purposes except asprovided in Subsection (4);
(b) to provide a resource to meet emergency expenditures under Section 10-6-129; and
(c) to cover a pending year-end excess of expenditures over revenues from anunavoidable shortfall in revenues. This provision does not permit the appropriation of any fundbalance to avoid an operating deficit during any budget period except as provided underSubsection (4), or for emergency purposes under Section 10-6-129.
(2) The accumulation of a fund balance in the General Fund may not exceed 18% of thetotal estimated revenue of the General Fund.
(3) If the fund balance at the close of any fiscal period exceeds the amount permittedunder Subsection (2), the excess shall be appropriated in the manner provided in Section10-6-117.
(4) Any fund balance in excess of 5% of the total revenues of the General Fund may beutilized for budget purposes.
(5) (a) Within a capital improvements fund the governing body may, in any budgetperiod, appropriate from estimated revenue or fund balance to a reserve for capital improvementsfor the purpose of financing future specific capital improvements, under a formal long-rangecapital plan adopted by the governing body.
(b) The reserves may accumulate from fiscal period to fiscal period until the accumulatedtotal is sufficient to permit economical expenditure for the specified purposes.
(c) Disbursements from these reserves shall be made only by transfer to a revenue ortransfer account within the capital improvements fund, under a budget appropriation in a budgetfor the fund adopted in the manner provided by this chapter.
(d) Expenditures from the above appropriation budget accounts shall conform to allrequirements of this chapter relating to execution and control of budgets.
Amended by Chapter 378, 2010 General Session