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S.B. 158





Chief Sponsor: Deidre M. Henderson

House Sponsor: John Knotwell

             7      LONG TITLE
             8      General Description:
             9          This bill amends the percentage of excess fund balance that a municipality may keep in
             10      its general fund.
             11      Highlighted Provisions:
             12          This bill:
             13          .    amends the percentage of excess fund balance that a municipality may keep in its
             14      general fund from 18% to 25%.
             15      Money Appropriated in this Bill:
             16          None
             17      Other Special Clauses:
             18          None
             19      Utah Code Sections Affected:
             20      AMENDS:
             21          10-6-116, as last amended by Laws of Utah 2010, Chapter 378
             23      Be it enacted by the Legislature of the state of Utah:
             24          Section 1. Section 10-6-116 is amended to read:
             25           10-6-116. Accumulated fund balances -- Limitations -- Excess balances --
             26      Unanticipated excess of revenues -- Reserves for capital improvements.
             27          (1) Cities are permitted to accumulate retained earnings or fund balances, as

             28      appropriate, in any fund. With respect to the general fund only, any accumulated fund balance
             29      is restricted to the following purposes:
             30          (a) to provide working capital to finance expenditures from the beginning of the budget
             31      period until general property taxes, sales taxes, or other applicable revenues are collected,
             32      thereby reducing the amount [which] the city must borrow during the period, but this
             33      Subsection (1)(a) does not permit the appropriation of any fund balance for budgeting purposes
             34      except as provided in Subsection (4);
             35          (b) to provide a resource to meet emergency expenditures under Section 10-6-129 ; and
             36          (c) to cover a pending year-end excess of expenditures over revenues from an
             37      unavoidable shortfall in revenues. This provision does not permit the appropriation of any
             38      fund balance to avoid an operating deficit during any budget period except as provided under
             39      Subsection (4), or for emergency purposes under Section 10-6-129 .
             40          (2) The accumulation of a fund balance in the general fund may not exceed [18%] 25%
             41      of the total estimated revenue of the general fund.
             42          (3) If the fund balance at the close of any fiscal period exceeds the amount permitted
             43      under Subsection (2), the excess shall be appropriated in the manner provided in Section
             44      10-6-117 .
             45          (4) Any fund balance in excess of 5% of the total revenues of the general fund may be
             46      utilized for budget purposes.
             47          (5) (a) Within a capital improvements fund, the governing body may, in any budget
             48      period, appropriate from estimated revenue or fund balance to a reserve for capital
             49      improvements for the purpose of financing future specific capital improvements, under a
             50      formal long-range capital plan adopted by the governing body.
             51          (b) The reserves may accumulate from fiscal period to fiscal period until the
             52      accumulated total is sufficient to permit economical expenditure for the specified purposes.
             53          (c) Disbursements from these reserves shall be made only by transfer to a revenue or
             54      transfer account within the capital improvements fund, under a budget appropriation in a
             55      budget for the fund adopted in the manner provided by this chapter.
             56          (d) Expenditures from the above appropriation budget accounts shall conform to all
             57      requirements of this chapter relating to execution and control of budgets.

Legislative Review Note
    as of 1-16-13 4:04 PM

Office of Legislative Research and General Counsel

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