Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Fund Balance Policy topic
No spam. Unsubscribe anytime.
Orono council lowers minimum unassigned general fund reserve to 40%; vote 4–1
Summary
Council adopted an amendment to the city's fund balance policy reducing the minimum unassigned general fund reserve to 40% of annual operating budget; Council Member Benson opposed and cited historic reserve levels and a desire to spend less rather than lower the policy threshold.
The Orono City Council voted on Sept. 23 to amend its fund balance policy to set the minimum unassigned general fund reserve at 40% of the annual operating budget. Staff said many peer cities use a 40% threshold and cited guidance from the Government Finance Officers Association and the state auditor’s office. The council approved the resolution 4–1, with Council Member Benson dissenting.
Benson said she opposed lowering the policy target because the city’s current unassigned reserve is about 36% and reducing the target would, in her view, lower fiscal discipline. Benson gave a multi-year run of reserve percentages to illustrate trends and argued that the city should consider spending reductions to rebuild reserves rather than lowering the minimum target. "That's not something that I support, because we'd essentially need $1,180,000 next year to get back up to that reserve of 45% from where we are now at 36," she said.
Supporters said the 40% policy aligns Orono with other cities and that the city’s budgeting and capital planning process will ensure priorities are funded. The resolution passed and staff will incorporate the amended policy into the city’s financial procedures and ongoing budget work.
