186060
1 ORDINANCE NO, 18,606
2
3 AN ORDINANCE TO AMEND ARTICLE VI, CHAPTER 2, OF THE
4 REVISED CODE OF ORDINANCES TO ESTABLISH A RESTRICTED
5 RESERVE FUND AS A REQUIREMENT FOR ANNUAL CITY BUDGETS;
6 TO DECLARE AN EMERGENCY; AND FOR OTHER PURPOSES.
7
8 WHEREAS, the City has historically maintained a reserve fund as a part of the annual
9 budget process with the idea that the monies in the reserve fund would not be readily available for
10 appropriation or expenditure, but would be used if there was a need to do so because of some
11 extraordinary circumstance not foreseen during the fiscal year, and
12 WHEREAS, there is no state law requirement to maintain a reserve fund for City General
13 Fund purposes, but the Board of Directors believes that such a policy should be required by City
14 ordinance, and
15 WHEREAS, the practice to create such a fund has been voluntary to date, but now the
16 Board wishes to formalize its policies in regards to a restricted reserve fund,
17 NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE
18 CITY OF LITTLE ROCK, ARKANSAS:
19 Section 1. Article VI, Chapter 2 of the City of Little Rock, Arkansas, Revised Code of
20 Ordinances is hereby amended to include the following provisions.
21 Section 2. Title. This ordinance shall be known as the "Restricted Reserve Fund"
22 ordinance for the City of Little Rock, Arkansas.
23 Section 3. Definition of Restricted Reserve Fund. The Restricted Reserve Fund
24 means a portion of the Governmental Fund Type's net assets that are accounted for in a restricted
25 fund balance which is not available for appropriation without a special and specific actions of the
26 Board of Directors.
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1 Section 4. Size of the Restricted Reserve Fund. The Restricted Reserve Fund shall be
2 considered to be fully funded as a part of the annual City budget when the restricted fund balance
3 shows an amount equal to ten million dollars ($10,000,000), or ten percent (10 %) of the annual
4 general fund revenues for a budgeted year, whichever amount is greater.
5 Section 5. Timeline for initial funding of the Restricted Reserve Fund. Absent express
6 action of the Board of Directors to the contrary, as a part of the annual City budget process,
7 revenues shall be deposited in the Restricted Reserve Fund in such amounts determined by the
S Board of Directors to assure that the Restricted Reserve Fund shall be fully funded by December
9 31, 2005.
10 Section 6. Limitation on appropriations from Restricted Reserve Fund. The restricted
Ll fund balance which constitutes the Restricted Reserve Fund shall not be available for
12 appropriation without the passage of an express ordinance by the Board of Directors, after
13 recommendation from the City Manager, to spend funds in the Restricted Reserve Fund. The City
14 Manager shall not recommend the appropriation of any monies in the Restricted Reserve Fund
15 unless the recommendation:
16 (A) Is presented to the Board of Directors:
17 (1) In writing at least seventy -two (72) hours prior to the regular meeting of the
is Board at which the issue will be discussed; or
19 (2) At a special meeting called for the express purpose and considering such an
20 appropriation; and
21 (B) The City Manager demonstrates that no other funds are available to meet the special
22 obligation under consideration; and,
23 (C) The City Manager demonstrates that the appropriation is necessary:
24 (1) To meet a unique opportunity for the overall well -being of the City and
25 there is not sufficient time to meet this opportunity as part of the regular
26 City budget process; or,
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1 (2) To continue to operate budgeted City services at the level set forth in the
2 annual budget because of some catastrophic event, or some unforeseen
3 economic downturn that could not be reasonably predicted and considered
4 as a part of the annual budget process; or
3 (3) To meet some legal obligation imposed upon the City as a result of
6 administrative or legal action not reasonably anticipated at the time of the
7 annual budget process.
8 (D) Until the Restricted Reserve Fund is fully funded in accordance with Section 4 of
9 this ordinance, the City Manager should consider a recommendation to expend funds from the
10 Restricted Reserve Fund only as a last resort and, only if he reasonably believes that it is absolutely
11 necessary to meet a serious and imminent situation facing the City.
12 Section 7. Notice of downward economic trends. The City Manager and Director of
13 Finance shall notify the Board of Directors in writing at the first available opportunity if economic
14 trends indicate that the revenues projected as a part of the annual City budget are not meeting
15 projections and require the Board to consider reductions in force, City services or the use of
16 Restricted Reserve Fund monies to meet the City's obligations funded in the annual City budget.
17 Section S. Severability. In the event any title, section, paragraph, item, sentence, clause,
18 phrase, or word of this ordinance is declared or adjudged to be invalid or unconstitutional, such
19 declaration or adjudication shall not affect the remaining portions of the ordinance which shall
20 remain in full force and effect as if the portion so declared or adjudged invalid or unconstitutional
21 was not originally a part of the ordinance.
22 Section 9. Repealer. All ordinances and resolutions are hereby repealed to the extent that
23 they conflict with the provisions of this ordinance.
24 Section 10. Supplemental nature of ordinance. This ordinance shall be considered
25 supplemental to the other provisions contained in Article VI, Chapter 2 of the Little Rock,
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Arkansas, Revised Code of Ordinances, and all terms in this ordinance that are otherwise defined
in this article and chapter shall share the same definition.
Section 11. Emergency. It is essential to the public health, safety and welfare to establish and
have in place codified and definite guidelines for the establishment and use of a Restricted Reserve Fund for
the City of Little Rock, Arkansas, particularly as the City considers, passes, and implements its annual
budget ordinances; an emergency is, therefore, declared to exist and this ordinance shall be in full force and
effect from and after the date of its passage.
PASSED: December 18, 2001
ATTEST: APPROVED: l
7
Nancy Wo d, City Clerk
APPROVED AS TO LEGAL FORM:
kA - t=-�"}�h-�II
Thomas M. Carpenter, City hVkrney
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Ordinance
Restricted Reserve Fund
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Ji Dailey, Mayor