City staff presented an update to Fort Lauderdale’s Financial Integrity Principles and Policies to the Budget Advisory Board on Dec. 10 and asked for the board’s input and recommendation to the City Commission.

Keith Farrell, assistant budget manager, said the 2026 update was prompted by the creation of a formal emergency reserve fund and by a desire to align the principles with current practice and statutory deadlines. Staff proposed that the emergency reserve be available for declared emergencies and recovery efforts (ideally to match anticipated federal or state disaster recovery funds) and that the reserve target be a minimum of 1% of general fund operating expenditures (excluding pass-throughs) with an upper observation/transfer point of 5%—funds above that level could be transferred to the general fund with Commission authorization for primarily one-time or capital uses.

Keith noted the dollar context: at current appropriation levels a 1% emergency-reserve target equals about $4.8 million, and staff cited Hurricane Irma as an example of a prior recovery match need (about $3.6 million in 2017). The proposed revisions also formalize the commission’s existing fund-balance target (a commission target of three months and a two-month minimum), require staff to develop a three-year plan to restore minimums if the balance falls below the minimum, and add guidance on cost-recovery analyses and benchmarking with neighboring municipalities.

Board action and caveats: A motion to recommend the updated Financial Integrity Principles to the City Commission carried by roll call. The board asked that two caveats accompany the recommendation: first, that any transfer of reserve funds in excess of 5% into the general fund be explicitly limited to capital and other one-time uses (rather than ongoing operating expenses); second, that the recommendation explicitly reference compliance with Florida statutes in addition to Government Finance Officers Association (GFOA) best practices. Staff indicated it would incorporate board feedback as it prepares the item for commission consideration.

Next steps: Staff intends to send the updated policy to the City Commission in early calendar-year 2026 for formal adoption; the board’s recommendation and caveats will be included in the transmittal. Staff also said quarterly projection reports and updated timelines will be provided to the board during the FY2027 budget process.

Representative quote: "Our proposal is that the reserve fund aims to maintain a minimum of 1% of our general fund operating expenses ..." Keith Farrell explained during the presentation.