City of Spokane

Spokane Municipal Code

***Note: Many local criminal codes can now be located under Chapter 10.60 SMC while others are now cited under the Revised Code of Washington (RCW), which was incorporated into the municipal code in 2022. (See SMC 10.58.010). Code Enforcement, including Noise Control and Animal Regulations are located in Chapters 10.62 through 10.74.

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Title 07
Chapter 07.08
Section 07.08.010
 

Title 07 Finance

Chapter 07.08 Funds

Article I. General Fund

Section 07.08.010 General Fund and Reserve Accounts – Establishment
  1. There is established a “general fund” into which all sums of money collected by the City for any purpose whatsoever shall be deposited unless otherwise provided by ordinance directing the deposit into some specific fund other than the general fund.
  1. There is established within the general fund a revenue stabilization account which shall consist of a specific portion of the unappropriated general fund balance as determined by this section and which shall be used for the revenue stabilization for future city operations and to fund ordinary and ongoing city activities that would otherwise be reduced in scope, suspended, or eliminated due to unanticipated shortfalls in general fund revenues. The revenue stabilization account and other dedicated reserve accounts listed in 07.08.010 shall be funded as follows.
  1. At the conclusion of each and every fiscal year, that year’s positive general fund variance, net of unrealized gains/losses, shall be automatically transferred into the dedicated reserve accounts in the following order until such time as the dedicated reserve accounts are funded to the targeted funding level as listed in this section:
  1. Contingency reserve account;
  1. Revenue stabilization account;
  1. Strategic reserve account.
  1. Additional funds may be added to the revenue stabilization account during the ensuing fiscal year when approved by the city council.
  1. The targeted funding level for revenue stabilization account shall initially be three and one-half percent (3.5%) of current-year budgeted general fund revenues.
  1. Annually during each budget cycle, the chief financial officer, or designee, shall report to the city council on the revenue stabilization account including current and proposed future funding levels consistent with revenue growth projected in the City’s long-term general fund financial forecast and a discussion of investment activity within the account for the period and investment planning in place for future periods. This annual report shall also include analysis and consideration of the proper targeted funding level going forward in relation to changing conditions and prudent fiscal practices.
  1. Disbursements from the revenue stabilization account may be made to mitigate a general fund revenue shortfall deemed by the city council, in consultation with the chief financial officer or designee to meet the following criteria:
  1. The revenue shortfall results from revenue collections considered to be materially short of the amount budgeted, or the revenue shortfall results from projected baseline (existing) budgeted revenues for any ensuing year increasing by less than the assumed long-term revenue growth rate in the City’s six-year general fund projection for the immediate year; and
  1. The revenue shortfall is expected to persist through the end of the fiscal year; and
  1. The revenue shortfall is reasonably expected to persist for a period no longer than three (3) years. A revenue shortfall expected to persist beyond three (3) years shall be directly addressed in the current annual budget process through long-term budget measures.
  1. Disbursements from the revenue stabilization account may include amounts budgeted in the general fund to supplement revenue shortfalls that occur in other City funds.
  1. Appropriation from the revenue stabilization account is by the standard special budget ordinance procedure.
  1. There is established within the general fund a contingency reserve account which shall consist of a specific portion of the unappropriated general fund balance.
  1. Annual allocations to the contingency reserve account shall be in accordance with SMC 07.08.010(B)(1).
  1. Additional funds may be added to the contingency reserve account in such amounts and at such additional times during the ensuing fiscal year when approved by the city council.
  1. The targeted funding level within the contingency reserve account shall be ten percent (10%) of current-year budgeted general fund expenditures.

During each budget cycle, the chief financial officer, or designee, shall report to the city council on the contingency reserve account including current and estimated future funding levels consistent with the City’s long-term general fund financial forecast. This annual report shall include analysis and consideration of the proper targeted funding level in relation to changing conditions and prudent fiscal practices.

  1. Disbursements from the contingency reserve account are for the purpose of meeting extraordinary expenditures as deemed by the city council, in consultation with the chief financial officer or designee, to meet the following criteria:
  1. Unforeseen circumstances arising after the adoption of the annual budget which require an unavoidable and non-continuing allocation; or
  1. Unforeseen emergency threatening health and/or safety of the citizens; or
  1. Unanticipated non-continuing expenses are needed to fulfill an unfunded legislative mandate; or
  1. Significant operating efficiencies can be achieved resulting in clearly identified near-term and offsetting cost savings.
  1. Appropriation from the contingency reserve account is by the standard special budget ordinance procedure.
  1. There is established within the general fund a strategic reserve account which shall consist of a specific portion of the unappropriated general fund balance. 
  1. Annual allocations to the strategic reserve account shall be in accordance with SMC 07.08.010(B)(1). 
  1. Additional funds may be added to the strategic reserve account during the year when approved by the city council.
  1. The targeted funding level within the strategic reserve account shall initially be 1% of current year budgeted general fund expenditures.
  1. Disbursements from the strategic reserve account may be made for the following purposes.
  1. To fund a strategic program or initiative in the areas of housing, environmental protection, innovation, or
  1. Any other project, program, or initiative determined by City Council to be of strategic significance to the City or its people.
  1. Appropriation from the strategic reserve account is by the standard special budget ordinance procedure or funds may be appropriated as part of the annual budget process.
  1. During such time that the revenue stabilization, contingency reserve and strategic reserve accounts are at the targeted funding levels, any unappropriated fund balance in ensuing years should first be used to pay for existing obligations rather than to fund new programs.
  1. The transfers required by SMC 07.08.010(B)(1), (C)(1) and (D)(1) shall be accomplished as part of the year-end closing process.
  1. The City recognizes the need to maintain a healthy reserve fund balance to have adequate cash availability and to maintain exemplary financial ratings. 
    1. The city shall maintain a minimum General Fund Reserve balance of 25% of ongoing expenses in the General Fund. The General Fund minimum balance shall be defined as the dollar amount of unencumbered general fund balance. 
    1. This fund threshold shall include the aforementioned revenue stabilization, contingency, and strategic reserve funds and subsequent mentioned tactical reserve balance.
    1. There is established within the general fund reserve balance a tactical unassigned reserve balance which shall consist of all general fund reserve balances that exceed the aforementioned contingency reserve, revenue stabilization, and strategic reserve balances to be utilized for tactical unexpected expenditures. 
  1. During year-end financial closing for the City, if the City falls below the minimum threshold identified in 07.08.010 (G), the City must replenish the reserve fund balance by no less than 2% the following fiscal year and will continue each fiscal year to return the fund balance back to the aforementioned 25% reserve.
  1. 2% minimum replenishment shall be explicitly identified in the annual budget.
  1. The replenishment of funds to the 25% target, must occur within five years, or less.
  1. The replenishment fund schedule in 07.08.010 (H) (1) can be paused (and extended) during times where the City has seen a decrease in general fund sales tax revenue from prior year(s)

Date Passed: Monday, December 12, 2022

Effective Date: Thursday, January 19, 2023

ORD C36346 Section 1