Dalton OKs new fund balance policy

DALTON, Ga. -- City officials now must maintain a minimum fund balance equal to 25 percent of the city budget, or about $6 million.

The City Council on Monday approved a new fund balance policy, replacing one that was in place for about two years, said Finance Director Cindy Jackson.

The old policy required the city to retain 5 percent of its gross revenues as a fund balance. The new policy requires the city maintain 25 percent of its expenditure budget.

"Revenues are so volatile that you really can't control them as much," said Mrs. Jackson.

She said the new requirement will mean a fund balance that is slightly higher than the old policy. The amount equates to three months of operating expenses for the city.

According to the policy, the purpose is to ensure the city has a strong financial position "to weather negative economic trends."

Mayor David Pennington said in an interview before the meeting that the city has a fund balance over 50 percent of its budget and it's a goal to keep the balance higher than required by policy.

"That's the absolute drop-dead number," he said.

City Alderman Charlie Bethel said that under the new policy, should the city fund balance drop below 25 percent of the budget, officials are committed to restoring the balance within the next year.

City Council members also approved an amendment to the employee pension plan. Retirees now can opt to take accrued sick and vacation hours all at once or over time.