Sec. 5-15. - Fund balance and budget act

(1)

Except as explicitly authorized herein, every budget act enacted in any given fiscal year must allocate at least one percent (1%) of anticipated general fund operating revenues for any given fiscal year to the Fund Balance.

(a)

Any given fiscal year budget act's aggregate expenditures may only exceed ninety-nine percent (99%) of anticipated general fund operating revenues if the Fund Balance is greater than twelve percent (12%) of the prior fiscal year general fund operating revenues.

(2)

There is hereby established a Fund Balance. Said Fund Balance is funded with monies that are not otherwise allocated within any given fiscal year budget act.

(a)

The Fund Balance shall be segregated into two (2) parts, the restricted Fund Balance and the unrestricted Fund Balance.

(b)

The restricted Fund Balance shall take funding priority over the unrestricted Fund Balance. No funds may be allocated to the unrestricted Fund Balance until the restricted Fund Balance is equal to at least seven percent (7%) of the general fund operating revenues.

(c)

The restricted Fund Balance must be kept in reserve and will not be included in the general fund operating budget, unless:

i.

The City forecasts or experiences a loss in total revenues and the loss is certified by the director of finance;

ii.

The City experiences or anticipates an emergency situation, which shall be deemed to exist when the City experiences or anticipates health insurance costs, retirement contributions or utility expenditures which exceed the prior fiscal year's health insurance costs, retirement contributions or utility expenditures by a percentage greater than ten and one-half percent (10.5%);

iii.

The City forecasts or experiences debt services expenditures net of any state aid reimbursement which exceed the prior year's debt service expenditures by an amount greater than three and one-half percent (3.5%) and which are the result of bonded debt issued in a manner consistent with general law or a special act;

iv.

The City experiences substantial growth in its tax base as the result of major new construction which necessitates either significant infrastructure or school housing expenditures by the City or a significant increase in the need for essential municipal services and such increase in expenditures or demand for services is certified by the director of finance.

(d)

The amount between the applicable percentage in subsection (1) and one hundred percent (100%) of the anticipated general fund operating revenues for any fiscal year shall be transferred in any given fiscal year into the Fund Balance; provided, however, that no such payment will be made which would increase the total of the Fund Balance to more than ten percent (10%) of only the anticipated general operating fund as set by subsection (1).

(e)

In the event that the payment to be made into the Fund Balance would increase the amount in said account to more than twelve percent (12%) of anticipated general operating fund revenues that said amount shall be transferred to a capital fund to be used solely for funding capital projects.

(3)

Capital Projects shall not include debt reduction, principal or interest payments on debt, or for any other type of financing arrangement, but shall only be used for payment of direct actual expenses incurred for capital projects.

(4)

For the purpose of this section, general fund operating revenues is defined as the city and school budget, less the state aid and federal aid restricted to the school budget.

(Amd. of 8-24-2017)