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Southwest Ranches adopts 25% unassigned fund-balance policy to preserve reserves
Summary
Council unanimously adopted a fund-balance policy that sets a minimum unassigned general-fund balance target of 25% to ensure multi-month operating reserves and guide future use of excess funds.
The Town Council adopted a fund-balance policy that establishes a minimum of 25% in unassigned general-fund balance, which the finance director presented as roughly equivalent to three months of operating expenditures under the town’s accounting assumptions.
Finance staff explained that Governmental Accounting Standards Board guidance and GFOA best practices inform reserve policies; using audited FY23 figures the town’s general fund expenditures were described in the presentation and staff noted the town currently holds a substantial unassigned balance relative to the recommendation. The proposed policy also sets guidance for replenishment procedures if reserves fall below the threshold and for when excess funds may be used for one-time purposes.
Council members discussed the town’s relatively high reserve levels and said the policy provides a framework to responsibly reallocate excess funds to capital projects or resident benefit programs without compromising fiscal stability.
Motion to adopt the fund-balance policy passed unanimously. Staff will implement the policy and propose replenishment or use plans as part of future budgets.
