El Paso oversight committee backs formal fund‑balance guideline, sets 60‑day minimum

The Financial Oversight and Audit Committee voted unanimously to approve an amendment to the city’s budget policies to formalize fund‑balance guidelines for the general fund, setting a recommended minimum of 60 days (about 17% of operating revenues).

The change, presented by Robert Cortinas, staff member, was described as creating a formal target where none currently exists beyond a city‑charter cash reserve. Cortinas told the committee, “We are recommending that we set it at 17% in 60 days. We are currently at about 22%,” and noted that the city’s unrestricted fund balance equates to roughly 83 days at the end of FY 2024.

The committee heard that the city charter already requires a restricted cash reserve equal to 5% of the prior‑year general fund operating budget, and that chartered cash reserve may be used only for capital and must be repaid within 12 months if tapped. Cortinas said the proposed amendment formalizes additional categories — committed, assigned and unassigned balances — into an explicit fund‑balance policy and sets use/replenishment rules. He cited guidance from the Government Finance Officers Association recommending roughly 60 days as a baseline, but noted communities may adopt different targets depending on revenue volatility and infrastructure needs.

Committee members pressed staff on how the number interacts with the annual budget. Cortinas explained the 17%/60‑day metric is calculated on the adopted budget and rises as the budget rises, and he warned that planned uses of fund balance (for example, to smooth costs from collective‑bargaining settlements) could put pressure on meeting the target in future years. Cortinas gave several figures during the presentation: the committee was told the city’s unrestricted fund balance was about $35.6 million, unassigned balance just under $40.6 million, and a total general‑fund fund balance in the ballpark of $168 million (numbers presented by staff during the discussion).

Committee members asked for a clear table to accompany the council item showing days, the 17% calculation and the dollar equivalent (cost per operating day). Several members said that framing would make the policy easier for the City Council to evaluate.

Motion and outcome: A member moved to approve the amendment; the motion carried unanimously. The committee will forward the proposed amendment to the full City Council for final action.

Ending: Committee discussion also noted potential one‑time uses of fund balance for capital pay‑as‑you‑go projects if surplus conditions permit, but stressed any use would require City Council approval under the proposed policy.