Fraser council adopts 25% target for general fund unrestricted balance

The Fraser City Council voted March 13 to adopt a general‑fund unrestricted fund balance policy that sets a 25% target (roughly three months of operating expenditures) as the council’s guideline for minimum reserves.

Staff said auditors have recommended a 25% minimum and presented a draft policy compiled from practices used in other municipalities. "They are pretty much recommending a minimum 25% for fund balance," a city staffer said. The draft policy will serve as a target rather than an absolute cap; staff said council can lower the target by resolution if circumstances require it.

Council members supported the policy as a planning tool. Council member Shornack said the policy was overdue and moved to approve it. "I'd like to approve the policy for the general fund unrestricted fund balance policy presented," Shornack said.

The policy will give staff and council a consistent benchmark for budgeting and will be used in assembling the upcoming fiscal year budget. Staff noted auditors suggested a future discussion about establishing an upper threshold for undesignated fund balance should the city reach a level the council wishes to constrain.

The council approved the policy by motion; the measure passed without recorded dissent. Staff will apply the policy in budget preparation and return budget documents showing the fund balance position relative to the new target.