Town of Portsmouth, RI Chapter 65 Unrestricted General Fund Balance

[HISTORY: Adopted by the Town Council of the Town of Portsmouth 6-27-2011 by Ord. No. 2011-06-27A. Amendments noted where applicable.]

§ 65-1 Maintenance at certain level required.

The unrestricted general fund balance of the Town of Portsmouth will be maintained at a level sufficient to provide for the required resources to:

A. Maintain creditworthiness with bond rating agencies;

B. Ensure short-term cash availability when revenue is unavailable or unanticipated expenditures occur;

C. Minimize interest expense for operating budget needs (short term-borrowing) and capital projects;

D. Provide for investment income;

E. Provide for stable tax rates; and

F. Enhance planning for contingencies and long-term planning.

§ 65-2 Exclusions.

The unrestricted general fund balance does not include the nonspendable fund balance or restricted fund balance. Specifically excluded are inventories, long-term receivables, principal of trust funds and external constraints by grantors, creditors, laws of other governments or constitutional provisions or enabling legislation.

§ 65-3 Minimum balance.

The Town will maintain a minimum unrestricted general fund balance of 8% of the current period's budgeted expenditures.

§ 65-4 Use of balance in excess of minimum.

An unrestricted general fund balance in excess of the minimum recommended level may be utilized for the following purposes:

A. Stabilizing tax rates or fluctuations in cash flow requirements;

B. Meeting future capital needs;

C. Counterbalancing difficult economic periods; and

D. Accommodating emergency situations.

§ 65-5 Maximum balance.

To avoid a balance in excess of the level deemed sufficient for prudent fiscal management, the Town will maintain a maximum unrestricted general fund balance of 16% of the current period's budgeted expenditures. Excess amounts will be available for appropriation by the Town Council in a subsequent fiscal year to fund capital, operating or debt service expenditures as determined by the Town Council during the budget process for that subsequent fiscal year.

§ 65-6 Adjustment of revenues.

If the unrestricted general fund balance falls outside of the above minimum or maximum parameters, the Town Council will adjust budgeted revenues to be either greater or lesser than budgeted expenditures in subsequent fiscal years to bring the unrestricted general fund balance into compliance with this policy.

§ 65-7 Appropriations.

The Town Council shall not appropriate any moneys out of the fund balance unless notice of the proposal to do so, reasonably detailed as to purpose and extent, appears in the call for the meeting.