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Southern Pines finance staff review fund-balance policy; available reserves shown at $4.2 million (June 30, 2024)
Summary
Finance staff reviewed fund-balance categories, recommended maintaining available and assigned fund balance of at least 25% of budgeted expenditures, and reported an available fund balance of $4.2 million as of June 30, 2024, noting timing and accruals (sales-tax three-month lag) affect interim snapshots.
Finance staff provided council with a multi-slide briefing explaining the town's fund-balance categories, the rationale for a 25% policy target and how timing and accruals affect year‑to‑date snapshots.
Staff explained five fund-balance categories and described committed and assigned funds versus available balances. "Our policy is to maintain available and assigned fund balance of at least 25% or greater than 25% of our budgeted expenditures," said a finance presenter (Speaker 9). The presentation included historical percentages and a note that the Local Government Commission's bare-minimum target is about 8%.
Staff said available fund balance at June 30, 2024, was $4,200,000 and cautioned that the December 31, 2024, snapshot reflects three months of sales-tax distributions due to the three-month lag; the fiscal-year picture will look different on June 30 and again at the April budget retreat after quarter‑three estimates are complete.
Council discussed the three‑year rolling average approach to sales-tax forecasting and the town's approach to planned capital purchases. Staff said if revenue drops — for example in a recession — the town would look first to fund balance to smooth operations and then reduce spending as necessary.
