Public Notices Archive

The term “fund balance” is often misunderstood in the world of local government finance. A common misconception is that fund balance is an actual “savings account,” an amount of surplus cash. In fact however, fund balance is nothing more than an accounting principle. It is the difference between any of the Town funds’ current assets—cash, short-term investments, inventories, receivables, and other unrestricted assets expected to be available to finance operations in the immediate future—and the Town’s current liabilities. A positive difference of current assets over current liabilities gives an indication of the resources immediately available to finance the Town’s ongoing operations.

Any of the Town’s fund balance which is not appropriated in the following year’s budget for specific expenditures and which is not designated or reserved for specific purposes, is considered “unassigned fund balance” and serves as an operating reserve for the Town. Depending on the Town’s rate of revenue growth each year, or actual use of the unassigned fund balance by amending the budget during the year, the unassigned fund balance can increase or decrease. This Town’s unassigned fund balance is established and maintained above a minimum established by Town policy to protect the Town in case of emergency. A prime example is the necessity of your Town having to out lay cash for expenses to recover from devastating effects of a hurricane on our infrastructure (streets, bridges, beaches, etc.). Recovering from such devastation and getting back to normal routine and business as quickly as possible is important to our citizens and the local economy. Neither reimbursement from FEMA nor the State of North Carolina for these storm expenses is ever guaranteed nor ever timely! The uncertainty of such reimbursements makes a healthy unassigned fund balance an important requirement for your Town to maintain its ongoing operations with adequate cash flow.

The North Carolina Local Government Commission (LGC) monitors each local government’s unassigned fund balance through inspection of required annual audits, which report the financial condition of a local government as of June 30, the last day of the fiscal year. The LGC insures that all local governments in the State, including the Town of Southern Shores, comply with the North Carolina Local Government Budget and Fiscal Control Act which incorporates general accounting principles and recommendations of the State Treasurer.

A recent history of the Town of Southern Shores’ General Fund’s unassigned fund balances as of June 30 of each ending fiscal year:

 

2019  $4,173,321

2018  $4,752,187

2017 $ 3,461,071

2016 $ 3,761,481

2015 $ 3,366,840

2014 $ 4,488,249

2013 $ 3,958,821

2012 $ 3,653,593

2011 $ 3,166,984

2010 $ 2,106,029

2009 $ 3,009,816

Please contact Town finance staff if you have any questions whatsoever regarding your Town’s finances and unassigned fund balance.