Utah Code 10-6-116. Accumulated fund balances — Limitations — Excess balances — Unanticipated excess of revenues — Reserves for capital improvements
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(1)
Terms Used In Utah Code 10-6-116
- Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
- Appropriation: means an allocation of money by the governing body for a specific purpose. See Utah Code 10-6-106
- Budget: means a plan of financial operations for a fiscal period which embodies estimates of proposed expenditures for given purposes and the proposed means of financing them. See Utah Code 10-6-106
- Budget period: means the fiscal period for which a budget is prepared. See Utah Code 10-6-106
- City: means a municipality that is classified by population as a city of the first class, a city of the second class, a city of the third class, a city of the fourth class, or a city of the fifth class, under Section
10-2-301 . See Utah Code 10-1-104 - City general fund: means the general fund used by a city. See Utah Code 10-6-106
- Estimated revenue: means the amount of revenue estimated to be received from all sources during the budget period in each fund for which a budget is being prepared. See Utah Code 10-6-106
- Fiscal period: means the annual or biennial period for accounting for fiscal operations in each city. See Utah Code 10-6-106
- Fund: is a s defined by generally accepted accounting principles as reflected in the Uniform Accounting Manual for Utah Cities. See Utah Code 10-6-106
- General fund: is a s defined by the Governmental Accounting Standards Board as reflected in the Uniform Accounting Manual for All Local Governments prepared by the Office of the Utah State Auditor. See Utah Code 10-6-106
- Governing body: means a city council, or city commission, as the case may be, but the authority to make any appointment to any position created by this chapter is vested in the mayor in the council-mayor optional form of government. See Utah Code 10-6-106
- Property: includes both real and personal property. See Utah Code 68-3-12.5
(1)(a) A city may accumulate retained earnings or fund balances, as appropriate, in any fund. With respect to the city general fund only, any accumulated fund balance is restricted to the following purposes:
(1)(a)(i) to provide working capital to finance expenditures from the beginning of the budget period until general property taxes, sales taxes, or other applicable revenues are collected, thereby reducing the amount the city must borrow during the period;
(1)(a)(ii) to provide a resource to meet emergency expenditures under Section 10-6-129; and
(1)(a)(iii) to cover a pending year-end excess of expenditures over revenues from an unavoidable shortfall in revenues.
(1)(b) Notwithstanding Subsection (1)(a)(i), a city may not appropriate a fund balance for budgeting purposes except as provided in Subsection (4).
(1)(c) Notwithstanding Subsection (1)(a)(iii), a city may not appropriate a fund balance to avoid an operating deficit during any budget period except as provided under Subsection (4), or for emergency purposes under Section 10-6-129.
(2) The accumulation of a fund balance in the city general fund may not exceed 35% of the total revenue of the city general fund for the current fiscal period.
(3) If the fund balance at the close of any fiscal period exceeds the amount permitted under Subsection (2), the excess shall be appropriated in the manner provided in Section 10-6-117.
(4) Any fund balance in excess of 5% of the total revenues of the city general fund may be utilized for budget purposes.
(5)
(5)(a) Within a capital improvements fund, the governing body may, in any budget period, appropriate from estimated revenue or fund balance to a reserve for capital improvements for the purpose of financing future specific capital improvements, under a formal long-range capital plan adopted by the governing body.
(5)(b) The reserves described in Subsection (5)(a) may accumulate from fiscal period to fiscal period until the accumulated total is sufficient to permit economical expenditure for the specified purposes.
(5)(c) Disbursements from reserves described in Subsection (5)(a) shall be made only by transfer to a revenue or transfer account within the capital improvements fund, under a budget appropriation in a budget for the fund adopted in the manner provided by this chapter.
(5)(d) Expenditures from the above appropriation budget accounts shall conform to all requirements of this chapter relating to execution and control of budgets.