FOLEY - During the Aug. 2 council meeting, the City of Foley council approved a resolution to amend the city’s fund balance policy. The new policy will increase calculations from 25 percent of the …
FOLEY - During the Aug. 2 council meeting, the City of Foley council approved a resolution to amend the city’s fund balance policy. The new policy will increase calculations from 25 percent of the city’s operating expenditures to 35 percent, effectively increasing the minimum fund balance from slightly under $10 million to slightly under $15 million.
“As part of the budget each year, Mike [Thompson, City Administrator] and I review the fund balance policy,” said Finance Director Sue Steigerwald. “What it’s based on right now, or the calculation, is the effects of Hurricane Ivan on our general fund operations. Then we kind of look at how much do we think we might have to fund out of pocket for a period of time until we get any sort of reimbursements. Now we have a new storm to look at, named Sally, and we have removed almost three times as much debris in this storm than we did in Ivan.”
Steigerwald said the increase would help the city better prepare for the next disaster scenario.
Mayor Ralph Hellmich said increasing the fund balance will also help the city’s financial rating as it shows the council and city are “being proactive in preparing for natural disasters.” According to Hellmich, ensuring the city has the funds set aside for emergency situations is akin to a family putting aside a savings account.
“This makes sure that we have prepared for problems that are unforeseen,” he said. “And of course we’ve grown a lot more than when we were here during Ivan, and therefore we need a larger fund balance to address the needs of our citizens. We also have other things in our budgets, this is not the only money that we have, but it’s good to have this minimum fund balance.”