City policy looks to maintain secure fund balance
Pickerington City Council unanimously approved legislation Jan. 2 that will allow the city's General Fund to be replenished in case of an emergency or unforeseen expenditures.
City officials maintain that the "Fund Balance Policy" will help to ensure financial stability for budgetary planning and forecasting by establishing the city's definition of a secure fund balance.
"The purpose is to designate a percentage the city will strive to maintain in its unrestricted General Fund Balance," said Chris Schornack, Pickerington's Director of Finance.
"This ensures (Pickerington) has immediate funding available regardless of any unanticipated events that may adversely effect the financial situation of the city," Schornack said.
According to Schornack, the policy sets the percentage at 25 percent "of the budgeted expenditures in the General Fund."
Schornack said the budgeted expenditures for 2013 will be $8,342,000, and 25 percent of that figure will equal $2,030,000. Thus, the General Fund would have to be down by $2,030,000 for the policy to activate.
"At that time, the city would attempt to replenish the balance over a three-year period to get it back to the desired level," Schornack said.
He said the fund balance policy will be particularly beneficial when the city dips into its reserves to fund future matching grants.
"For the (state Route 256) safety grant, the city is required to pay 10 percent of the $5 million," Schornack said.
"That could use reserve funds rather than borrowing," he said.