Duluth to consider adding new operating reserve fund

Based on recommendations from Duluth’s 2016 Citizens Budget Review Advisory Committee, the city is considering establishing a reserve/contingency “Operating Reserve” fund to be able to take advantage of strategic opportunities, unexpected expenditures and building maintenance renovations.

The city’s current “Capital Reserve” fund would be maintained as set forth in the budget, with interest going back to Capital Reserve. Withdrawal requires a vote of four council members. The “Operating Reserve” account seeks to maintain unassigned fund balance equal or greater than four months of operating expenses.

The city council discussed and made numerous recommendations about how these funds might be spent, with priority given to items that relieve budget or financial operating pressure in future periods. The new Operating Reserve will seek to maintain an assigned fund balance equal to or greater than four months of operating expenditures and other financing uses based on the current fiscal year’s budget.