City of Weatherford, OK Stabilization Reserve Fund and Capital Reserve Fund

[Added 11-30-2022 by Ord. No. 2022-04]

There is hereby created a reserve fund to be known as the "stabilization reserve fund". The amounts deposited in this reserve fund are to be used only for the purposes defined in this section.

The stabilization reserve fund shall be created for the purpose of receiving, holding, and accounting for amounts designated as stabilization reserves. These funds are to be contributed by the general fund, water operating fund, wastewater operating fund, the sanitation operating fund, and other funds as deemed appropriate by resolution of the City Commission.

The minimum amount to be contained in the stabilization reserve fund is sixteen (16%) percent of budgeted annual non-capital operating expenses for each of the funds contributing stabilization reserves into the stabilization reserve fund.

The maximum amount to be contained in the stabilization reserve fund is thirty-five (35%) percent of budgeted annual non-capital operating expenses for each of the funds contributing stabilization reserves into the stabilization reserve fund.

Minimum funding for the stabilization reserve fund when the balance is less than the maximum level as established in subsection 4 of this section shall not be less than two (2%) percent of budgeted non-capital operating expenditures. This funding is to be transferred annually from the participating funds to the stabilization reserve fund.

Amounts held in the stabilization reserve fund are to be designated by purpose for use only by the fund from which the funds were contributed. Accounting process shall be established to provide for reporting by purpose.

Amounts held in the stabilization reserve fund in excess of the "minimum amount" established in this section may only be expended when certain specific circumstances exist. The circumstances requiring the expenditure of stabilization funds are not expected to recur on a routine basis. The circumstances when it is necessary to appropriate or spend stabilization amounts are subject to the objective criteria outlining the parameters of acceptable uses of stabilization funds included below. The existence of the circumstances must be declared by a four-fifths majority vote of all members of the governing body establishing that one or more of the criteria listed below exists:

Expenditures for emergency situations for life, health, or public safety issues for which no existing appropriation exists;

Situations where a significant revenue decline arises that could not have been reasonably been foreseen, and for which new revenue is not available and transfers of existing appropriations are not considered feasible or appropriate in maintaining existing service levels;

Correcting the results of an inaccurate estimate, accounting error, or budgeting error;

Expenditures where the proposed use is of a nonoperational nature involving capital or technical purchases having a useful life of greater than five years that will improve the efficiency of the City government. These efficiency improvements should result in tangible benefits that can be measured financially, through better service to the citizens, or in increased productivity for City employees;

Expenditures where the proposed use is of a nonrecurring nature, such as a study, start-up costs of a program whose ongoing costs are otherwise funded, or matching funds for a grant. These expenditures should result in tangible benefits that can be measured financially, through better service to the citizens, or in increased productivity for City employees;

Amounts held in the stabilization reserve fund that are below the minimum threshold may be expended only under specific limited circumstances. The circumstances when it is necessary to appropriate or spend below the "minimum amount" required by this section, are set out below. The existence of circumstances must be declared by a four-fifths majority vote of all of the members of the governing body establishing that one or more of the criteria listed below exists:

Expenditures for emergency situations for life, health, or public safety issues for which no existing appropriation exists;

Correcting the results of an inaccurate estimate, accounting error, or budgeting error.

[Added 11-30-2022 by Ord. No. 2022-04]

There is hereby created a reserve fund to be known as the "capital reserve fund". The amounts deposited in this reserve fund are to be used only for the purposes defined in this section.

The capital reserve fund shall be created for the purpose of accumulating funds for the purpose of making purchases of capital items including but not limited to land, infrastructure, equipment, and vehicles. These funds are to be contributed by the water operating fund, wastewater operating fund, the sanitation operating fund, and other funds as deemed appropriate by resolution of the City Commission.

The funding level for all funds participating in the capital reserve funs is to be determined in accordance with long term capital plans adopted specific to each participating fund. The funding is to be transferred annually from the participating funds to the capital reserve fund.

Amounts held in the capital reserve fund are to be designated by purpose for use only by the fund from which the funds were contributed. Accounting processes shall be established to provide for reporting by purpose.

Amounts held in the capital reserve fund are intended to only be expended in accordance with a multi-year capital plan. The circumstances when it is appropriate to spend capital amounts outside of this plan are subject to the objective criteria outlining the parameters of acceptable uses of capital funds as outlined below. The existence of the circumstances must be declared by a majority vote of the governing body establishing that one or more of the criteria listed below exists:

Situation in which an unexpected capital need has arisen outside of the bounds of the established multi-year capital plan that could not have been foreseen;

Circumstances when amounts included in the capital reserve fund are determined to be in excess of the amounts needed to fund the current multi-year capital plan and a need for other capital items outside of the current capital plan exists;

Expenditures for emergency situations for life, health, or public safety issues that involve public infrastructure for which no existing appropriation exists. Under these circumstances, the City Commission may also elect to allow capital reserve balances from other purposes to be borrowed for a definite period of time.

The initial funds required to participate in the capital reserve fund for which no current long term capital plan exists, must create a long-term capital plan prior to the adoption of the fiscal year 2023 budget. These funds will begin contributing to the capital reserve fund at that time. Funds that are required to participate by a Resolution of the commission shall be given 15 months from the adoption of said resolution to create a long-term capital plan and will begin participating in the budget year immediately following the adoption of the capital plan.