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May 16, 2017 <br />Orange County has therefore adopted a policy that requires management to maintain an <br />unassigned balance as follows: <br />1. The County will strive to maintain an unassigned fund balance in the General Fund of 16% <br />percent of budgeted general fund operating expenditures each fiscal year. The amount of <br />unassigned fund balance maintained during each fiscal year should not fall below 8% <br />percent of budgeted general fund operating expenditures, as recommended by the North <br />Carolina Local Government Commission. <br />2. To the extent that the General Fund unassigned fund balance exceeds 16% percent, the <br />balances may be utilized to fund capital expenditures or pay down outstanding County <br />debt. <br />3. The County’s budget and revenue spending policy provides for programs with multiple <br />revenue sources. The Financial Services Director will use resources in the following <br />hierarchy: bond proceeds, Federal funds, State funds, local non-county funds, county <br />funds. For purposes of fund balance classification, expenditures are to be spent from <br />restricted fund balance first, followed in-order by committed fund balance, assigned fund <br />balance, and lastly, unassigned fund balance. The Financial Services Director has the <br />authority to deviate from this policy if it is in the best interest of the County with Board of <br />County Commissioner’s approval. <br />4. Management is expected to manage the budget so that revenue shortfalls and expenditure <br />increases do not impact the County’s total unassigned fund balance. If a catastrophic <br />economic event occurs that requires a 10% or more deviation from total budgeted revenues <br />or expenditures, then unassigned fund balance can be reduced by action from the Board of <br />County Commissioners; the Board also will adopt a plan of action to return spendable fund <br />balance to the required level. <br />Enterprise Funds - (Solid Waste, Efland Sewer, and the Orange County Sportsplex) – The <br />County will strive to maintain unrestricted net assets greater than 8% of total operating <br />revenues at fiscal year-end, net of any donated assets recognized, to provide reserves for <br />operations and future capital improvements. <br />Restrictions, reservations, and designations of Net Assets for Enterprise Funds <br />For external reporting purposes, net assets will be reported as restricted or unrestricted in <br />accordance with GAAP. For internal purposes, net assets will be reserved or designated as <br />follows: <br />1. Encumbered balances to continue existing projects are designated. <br />2. Designations for funding of planned projects in a future period to reduce the financial <br />demands placed upon a subsequent budget. <br />Internal Service Funds – Dental Insurance Fund - total net assets shall maintain a positive <br />balance to illustrate the internal nature of recovery fees for services performed in self-insuring <br />employees of the County. Additionally, the net assets of the fund will demonstrate adequate <br />funding for incurred, but not reported claims. <br />213