3.05.080 Reserve policies.
A. Fund Balance Policy. Fund balance is the uncommitted resources of a fund. Borough policy is to construct the various fund balance budgets in such a way that there will be sufficient uncommitted resources to cover cash flow needs at all times, regardless of seasonal fluctuations in expenditures or reserves, and to provide adequate reserves for emergency needs.
The borough will maintain a fund balance designated for fiscal cash liquidity purposes (i.e., fiscal reserve) that will provide sufficient cash flow to minimize the potential of short-term tax anticipation borrowing. Specific fund balance reserves and the purposes of these reserves are as follows:
1. General Fund Operating Reserves. The borough will maintain a general fund operating reserve to provide for adequate cash flow, budget contingencies, and insurance reserves. The cash flow reserve within the general fund is an amount equal to six months of budgeted operating expenditures and one-half the current liability insurance deductible amount.
2. Education Support Fund. The borough will maintain a cash flow reserve to provide for unexpected revenue shortfalls. The cash flow reserve within the education support fund is equal to $75,000.
3. Debt Service Fund. The borough will maintain a cash flow reserve to provide for unexpected revenue shortfalls. The cash flow reserve within the debt service fund is equal to $275,000.
4. Solid Waste Disposal and Collection Fund. The borough will maintain an operating reserve to provide for adequate cash flow, budget contingencies and loan payment reserves. The cash flow reserve within the solid waste disposal and collection fund is an amount equal to six months of budgeted operating expenditures and the loan payment reserve is the following year’s total loan payments.
B. Use and Restoration of Reserves.
1. All expenditures drawn from reserve accounts require prior assembly approval unless previously authorized by the assembly for expenditure within the assembly approved annual budget.
2. If reserves and/or fund balances fall below the required level set in subsection A of this section, the assembly shall include within its annual budget a plan to restore reserves and/or fund balance to the required levels. [Ord. FY2020-10 §2, 2019; Ord. 90-10 §2, 1990. Formerly §3.01.080].