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Reserve Policy <br />In accordance with state statute, appropriated fund balance in any fund will not exceed the sum of cash <br />and investments minus the sum of liabilities, encumbrances and deferred revenues arising from cash <br />receipts. <br />The County will maintain an unrestricted, unassigned fund balance that exceeds eight percent (8%) of <br />annual general fund expenditures in accordance with the North Carolina Local Government <br />Commission's (LGC) recommendation. For a County our size, a recommended target goal of fifteen <br />percent (15%) should be maintained. These funds will be used to avoid cash-flow interruptions, generate <br />interest income, eliminate the need for short -tens borrowing, assist in maintaining an investment-grade <br />bond rating, and sustain operations during unanticipated emergencies and disasters. <br />On lune 14, 2005 (revised March 15, 2010), the Board of Commissioners adopted a resolution <br />formalizing the following fiscal management policies to be incorporated into the County's budget <br />document beginning with the 2006 fiscal year: <br />1. Recurring, operational expenses expenditures of the County government will only be funded <br />through recurring revenue sources; <br />2. The County will maintain an unassigned fund balance equal to 15% of general fund <br />expenditures; and <br />3. Upon the completion of the annual audit of the County finances, any unrestricted, <br />uncommitted, unassigned fund balance above 15% will be transferred to the Capital Reserve <br />Fund, to reduce reliance on debt financing; or to the Self -Funded Hospitalization and Dental <br />Fund, Workers Compensation and Liability Fund as required to maintain the integrity of those <br />funds. <br />4. Notwithstanding the requirements of items 1, 2, and 3 above, fund balance may be committed <br />or assigned for any use in the general fund to overcome revenue shortfalls related to significant <br />downturns in the economy. <br />On lune 18, 2018, the Board of Commissioners adopted a resolution formalizing the following fiscal <br />management policies to be incorporated into the County's budget document beginning with the 2019 <br />fiscal year: <br />If unassigned fund balance at the end of the current fiscal year is less than the approved fund balance <br />level, the deficiency should be replenished in the coming fiscal years, not to exceed a total of three <br />consecutive years. <br />Aftchmenl number 1 \n <br />F-3 Page 43 <br />