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Garden City council adopts fund-balance policy, sets 25% minimum reserve
Summary
The Garden City Council on Aug. 4 adopted a formal fund balance policy that establishes a 25% minimum reserve target (about three months of operating expenditures) and recommends a 35% guidance level for surplus use; the motion passed 7-0.
Garden City — The Garden City City Council voted 7-0 Monday to adopt a fund-balance policy that sets a minimum target of 25% of operating expenditures (roughly three months of operations) and a recommended upper guidance of 35% for surplus funds.
City Treasurer Shepherd told the council the policy is intended to "ensure that we're being fiscally responsible" and described it as "basically...a framework" that classifies fund balances and sets monitoring and reporting requirements. Shepherd said the policy applies to the general fund and to enterprise funds such as water and sewer, and can be applied to other funds as the council desires.
The policy directs staff to provide more detailed budget-to-actual financial reporting so the council can identify overspending earlier. "If we're overspending by month 3, then we know that our fund balance is...we're either gonna need to use it or we're gonna need to curb the spending," Shepherd said.
Council members asked how the policy would prevent past problems in the water fund. Council member Kara Fotis asked whether the policy was intended to prevent a repeat of the city’s prior water-fund shortfall; Shepherd and other staff said earlier and improved monitoring would provide earlier warning that reserves were approaching policy thresholds. The council noted one concrete figure discussed during the meeting: the council heard an example that 25% of the water fund equates to about $3,000,000.
Mayor Pro Tem Dole, who moved adoption of the policy, and other members discussed what to do with surplus above the 35% guidance, including options such as pension contributions, capital improvements or reducing legacy liabilities. Council member Hughes asked who would decide how to spend amounts above the guidance; Treasurer Shepherd replied that the city manager and treasurer would typically propose uses, with council oversight for significant allocations.
The council adopted the policy by motion. Votes earlier in the meeting also included routine procedural approvals; the council approved the meeting agenda and the consent agenda by the same 7-0 margin.
Votes at a glance - Motion to approve agenda (Aug. 4 meeting): Moved by Council member Witt; support from Mayor Pro Tem Dole; outcome: passed 7-0. - Motion to approve consent agenda items A1–A3: Moved by Council member Witt; support from Council member Hughes; outcome: passed 7-0. - Motion to adopt attached fund-balance policy for the City General Fund: Moved by Mayor Pro Tem Dole; support recorded as "Support from council member Dold"; outcome: passed 7-0.
Why this matters: The policy formalizes reserve targets and a reporting cadence the city says will surface budget trends earlier, which the council and staff said should reduce the risk of unplanned reserve draws. The council discussed how the policy could be adjusted by fund type and reaffirmed that any significant use of surplus would remain subject to council oversight and existing legal constraints on tax rates.
What happens next: Staff will implement the policy’s monitoring and reporting changes, including a budget-to-actual report described in the meeting; council members expressed interest in receiving the enhanced reports at least monthly and in bringing surplus discussions back to the council when thresholds are approached.
