CP089 (Fund Balance)CITY OF JANESVILLE Policy No. 89_
Page 1 of 3
CITY COUNCIL POLICY STATEMENT
Date Issued 8/23/11
Revised 5/10/21
General Subject: Financial Sustainability
Effective Date 5/11/21
Special Subject: Fund Balance
Cancellation Date
Supersedes No.
Responsible
Department, Division or Office: Finance Office
PURPOSE
The objectives of this fund balance policy are as follows:
• Preserve the credit worthiness (credit rating) of the City
for borrowing monies at favorable interest rates.
• Provide working capital for the City to meet cash flow needs
during the year.
• Provide a comfortable margin of safety to address
unanticipated expenditures / emergencies and unexpected
declines in revenue due to economic downturns, natural
disasters, etc.
• Meet the best practices of the Government Finance Officers
Association’s Fund Balance Guidelines for the General Fund.
• Provide a resource to stabilize fluctuations from year to
year in the property taxes paid by the City taxpayers.
STATEMENT OF POLICY
This statement identifies the amount the City of Janesville will
strive to maintain in its unrestricted General Fund balance, how
the fund balance will be funded, and the conditions under which
fund balance may be spent.
1. Fund Balance Reporting Categories
This policy follows the Fund Balance reporting categories
stated in Government Accounting Standards Board (GASB)
Statement No. 54, Fund Balance Reporting and Governmental
Fund Type Definitions. This statement impacts governmental
fund types. The fund balance will be reported in these five
categories: Nonspendable Fund Balance, Restricted Fund
Balance, Committed Fund Balance, Assigned Fund Balance and
Unassigned Fund Balance.
2. Flow of Funds
It is the policy of the City of Janesville that in cases where
multiple types of funds are available to pay for expenditures
in the various funds, restricted resources will be used first,
followed by committed, assigned, and finally unassigned.
Unrestricted fund balance includes committed, assigned and
CITY OF JANESVILLE Policy No. 89_
Page 2 of 3
CITY COUNCIL POLICY STATEMENT
Date Issued 8/23/11
Revised 5/10/21
General Subject: Financial Sustainability
Effective Date 5/11/21
Special Subject: Fund Balance
Cancellation Date
Supersedes No.
Responsible
Department, Division or Office: Finance Office
unassigned fund balances.
3. Procedures
In order to achieve the objectives of this policy, the
following guidelines shall be adhered to by the Common
Council:
3.1 The unrestricted General Fund balance should be between
16.7 and 25 percent (2 to 3 months) of the budgeted
General Fund operating expenditures for the subsequent
year.
3.2 The City will maintain appropriate commitments or
assignments of General Fund, special revenue funds, debt
service funds and capital projects funds for specified
purposes, including but not limited to contingencies,
compensated absences or similar items. Commitments
and/or assignments of fund balance shall be made
pursuant to appropriate legislation adopted by the City
Council.
3.3 As part of the annual budget process, the Finance
Director will estimate the surplus or deficit for the
current year and prepare a projection of the year-end
unrestricted General Fund balance. Such projection will
include an analysis of trends in fund balance levels on
an historical and future projection basis. Any
anticipated balance in excess of the minimum
unrestricted General Fund balance may be assigned to
other purposes, or budgeted to reduce the ensuing year’s
property tax levy.
3.4 Funds in excess of the targeted unrestricted General
Fund balance may be considered to supplement “pay as you
go” capital outlay expenditures (including reduction of
anticipated debt issues). Unrestricted fund balance
above the targeted unrestricted General Fund balance may
CITY OF JANESVILLE Policy No. 89_
Page 3 of 3
CITY COUNCIL POLICY STATEMENT
Date Issued 8/23/11
Revised 5/10/21
General Subject: Financial Sustainability
Effective Date 5/11/21
Special Subject: Fund Balance
Cancellation Date
Supersedes No.
Responsible
Department, Division or Office: Finance Office
be used to support recurring operating expenditures in
times of fiscal stress, but this practice is
discouraged.
3.5 Withdrawal of any amount of unrestricted General Fund
balance in excess of the targeted minimum of the amount
budgeted under (3.1) above, for the sole purpose of
reducing the ensuing year’s property tax levy, may be
made only upon a supermajority vote of the City Council.
3.6 The Common Council, by majority vote, can declare a
fiscal emergency and withdraw any amount of unrestricted
General Fund balance for purposes of addressing the
fiscal emergency. Any such action must also provide for
necessary appropriations to restore the unrestricted
General Fund balance to the minimum balance within a
three-year period.
3.7 This policy will be reviewed by the Finance Office every
three years following adoption or sooner at the
direction of the Common Council.
3.8 It is the policy of this government that assignments of
fund balances and resources within a fund may be
determined by the Finance Director.