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Hays commission adopts financial policy, capping budget stabilization reserve at $3 million
Summary
The Hays City Commission unanimously approved revisions to its Comprehensive Financial Management Policy that set a $3,000,000 cap on the Budget Stabilization Reserve and replaced GAAP audit references with the Kansas Municipal Audit and Accounting Guide (KMAG). The change removes obsolete sections and narrows reporting requirements.
The Hays City Commission voted 5–0 on Jan. 22 to adopt revisions to the city’s Comprehensive Financial Management Policy that set a $3,000,000 cap on the Budget Stabilization Reserve (BSR).
Kim Rupp, director of finance, told commissioners the policy updates clarify terminology, set a cap on the BSR, delete an outdated revenue-mix section and replace prior GAAP audit language with references to the Kansas Municipal Audit and Accounting Guide (KMAG). "These numbers are unaudited at this point," Rupp said when summarizing year-end figures, noting the changes are intended to align practice with audit and budget procedures.
Commissioners asked whether a lower cap on the BSR would reduce funds available for projects or debt payoff. Rupp and an assistant city manager explained the BSR is unrestricted emergency cash and that the city typically draws on other reserves (general fund cash carryover, commission capital reserve) before tapping the BSR. The assistant city manager described the BSR as an "emergency fund" to bridge severe downturns and said past uses included transfers to stabilize the budget when revenue fell short.
The adopted revisions also remove a requirement for a written status report associated with monthly financial reports and delete language on revenue mix considered irrelevant to the policy. Rupp said auditors assisted with aligning the policy to KMAG and that the changes reflect current practice.
The commission approved the policy on a 5–0 vote. Staff said the revised policy formalizes practices already in use and improves clarity about reserve roles and audit standards.
The commission’s next steps will be administrative: implementing the updated policy language in the city’s budget documents and continuing routine monthly reporting.
