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Finance committee approves clarification to Monroe's fund-balance policy, keeps 25% target
Summary
The Finance and Taxation Committee approved clarifying language to the City of Monroe's Comprehensive Finance Policy Section 5.8 to specify the 25% fund-balance target applies to operational expenditures only and to finalize the amount after the annual audit; the motion passed unanimously.
The Finance and Taxation Committee voted unanimously to approve clarifying edits to the City of Monroe's Comprehensive Finance Policy Section 5.8 (Fund Balance Policy), keeping the existing 25% target but specifying that the calculation should use operational expenditures only.
Administrator Rindy told the committee the edits stem from language raised during the 2025 audit process with Baker Tilly and Baumann Associates and that the audit presentation will be at next week's council meeting. "Our current policy is that the city must maintain or commit 25% of our expenditures," Rindy said, adding the state's recommendation is 16.7 percent, which she described as roughly two months of expenditures.
Rindy said the proposed changes are intended to clarify that the fund-balance target excludes debt service and capital outlay because those are funded differently. She also proposed removing a fixed February 28 deadline for determining the fund-balance amount and instead finalizing the figure after the completion of the annual audit, which she said typically occurs in the first week of March.
Rindy noted the city used part of the general fund balance last year to support a one-time capital investment in an industrial park expansion. "We made a determination to use some of that general fund balance to support that investment into the expansion of our industrial park," she said, referring to roughly $1.5 million used to purchase land.
A committee member raised a liquidity concern, saying shifting liquid assets into less-liquid capital reduces immediate liquidity even if the funds remain on the books. The committee member said, "I always look at it as just taking a liquid asset and putting it in something that's not so liquid, but it's still there."
After brief discussion, the committee member moved to approve the edits; the motion was seconded and the clerk recorded a roll-call vote: Alder Truhart, Alder Tolman, Alder Schaeffer and Alder McGuire all voted Aye. The motion passed unanimously.
The committee then addressed any other business and adjourned. The audit presentation related to the policy was scheduled for the council meeting the following week.
