9509-04 Amend Chapter 2, Article 14 - Entitled Rainy Day Fund (#102)

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Ms. White Page 2 May 10, 2004 (5) Per the Common Council's request, a subpart has been added to provide that interest earned on rainy day funds shall remain in rainy day account #102. (6) A subpart has been added to provide that if the Rainy Day Fund is terminated, funds remaining in the account shall be transferred to the City's General Fund. City Controller Rick Ollett will present Substitute Bill #26-04 to the Council's Personnel and Finance Committee and will make the presentation to the full Council on second reading at its meeting on May 10, 2004. Certain Council members questioned whether the City presently has reserves in any funds, and if so whether specific fund reserves should be deposited into the new rainy day fund. Reserves do presently exist in certain city funds where managers have been particularly efficient in their budgeting or where anticipated expenditures were less than projected. The rainy day fund created in Bill No. 26-04 (substitute version) is separate and distinct from these miscellaneous fund reserves because it is the repository of unused COLT and general or special levy funds at year end by act of the Indiana legislature. The Controller does not believe specific, designated funds carrying reserves should have those reserves transferred to new Fund 102 because it would eliminate any incentive for city department managers to conserve and prudently manage their budgets. Although Indiana statutes appear to use the word reserve fund as a synonym for rainy day fund, I could find no state law requiring that all reserve funds of a municipality be consolidated in one account. L Thank you for your consideration of this substitute version of Bi1126-04. Sincerely, ~~ ~~~~ Aladean M. DeRose Chief Assistant City Attorney cc: Frederick B. Ollett III Kathleen Cekanski-Farrand Filed to Clerk's Office ~.s'~.~' '~.,. ~5.. 4'V.tV..«..., ~.~v ~ i.... _,.-rn CfTr CLERK, S0. BEND,