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1 <br /> <br /> <br />POLICY INFORMATION <br /> <br />Policy Name: Fund Balance Policy <br />Policy Type: ☐ Financial Policy <br />☐ Greenhouse Gas Policy <br />☐ Personnel Policy <br />☐ Public Disclosure Policy <br />☐ Purchasing Policy <br />☐ Records Management <br />Policy <br />☐ Safety Policy <br />☐ Technology Policy <br />☐ Travel Policy <br />☐ Other: <br />New/Revised Policy: ☒ This is a new policy. ☐ This is a revision to a current policy. <br /> <br /> <br />POLICY CONTENT <br /> <br />1 Scope <br />This policy applies to all Departments and Offices within Kittitas County. It does not restrict the appropriations <br />authority of the Board of County Commissioners (BOCC) or the authority of independently elected officials. <br /> <br />2 Purpose/Background <br />This policy establishes guidelines for maintaining financial stability and responsibly managing county resources in <br />alignment with Generally Accepted Accounting Principles (GAAP), Governmental Accounting Standards Board <br />(GASB) standards, and Government Finance Officers Association (GFOA) best practices. It governs all county <br />funds, prioritizing the Unrestricted General Fund as the primary measure of financial health to ensure <br />operational flexibility. Departments and Offices shall optimize the use of restricted funds for their designated <br />purposes to preserve Unrestricted General Fund balances and enhance resilience against economic uncertainties <br />or emergencies. <br /> <br />3 Definitions <br />Unrestricted General Fund Balance: Funds available for discretionary use to meet operational needs. The <br />General Fund balance is the primary indicator of financial health. <br /> <br />Restricted Funds: Funds with specific revenue sources and legal expenditure obligations. Departments and <br />Offices should prioritize these funds for their intended purposes to minimize reliance on the General Fund. <br /> <br />Designated General Fund Reserve (DGFR): A portion of the Unrestricted General Fund balance restricted during <br />the annual budget process. The DGFR may only be accessed by BOCC resolution to support critical county <br />functions during severe financial stress. <br /> <br />Accumulated Reserve Balance (ARB): A calculation tool used to assess the health of our accumulated <br />Unrestricted General Fund Balance. Accumulated Reserve Balance (ARB): Unrestricted GF Balance / ((Total GF <br />Expenditure + GF Transfers out – GF Restricted Expenditure)/12) <br /> <br />Unrestricted Balance Trend (UBT): A calculation tool used to assess the impact of expense/revenue trends on <br />our Unrestricted General Fund Balance. ((GF Total Expense + GF Transfers Out – GF Restricted Expenditures) / (GF <br />Total Revenues + GF Transfers In - Restricted Revenues)) – 1 <br /> <br />Structural Deficit: Ongoing revenues less ongoing expenditures equals the structural net. When expenses exceed <br />revenues after accounting for one-time revenues/expenditures that are not expected to continue and targeted <br />expenditures from reserves, this creates a structural deficit.