FY23 FULL BUDGET REPORT ADOPTED

Committed fund balance includes amounts that can be used only for the specific purposes imposed by majority vote of a quorum of the Town Council a formal action of the government’s highest level of decision-making authority. Commitments may be changed or lifted only by the government taking the same formal action that originally imposed the constraint. Assigned fund balance comprises amounts intended to be used by the government for specific purposes. Intent can be expressed by the governing body or by an official or body to which the governing body delegates the authority. In governmental funds other than the general fund, assigned fund balance represents the amount that is not restricted or committed. This indicates that resources in other governmental funds are, at a minimum, intended to be used for the purpose of that fund. Unassigned fund balance is the residual classification for the general fund and includes all amounts not contained in the other classifications. Unassigned amounts are technically available for any purpose. If another governmental fund has a fund balance deficit, then it will be reported as a negative amount in the unassigned classification in that fund. Positive unassigned amounts will be reported only in the General Fund. Fund balance range is the range of amounts this policy has set within which the Town means to maintain the unassigned fund balance. Surplus is the amount by which the unassigned fund balance exceeds the upper limit of the fund balance range. Shortfall is the amount by which the unassigned fund balance drops below the lower limit of the fund balance range. Expenditures are all uses of financial resources, budgeted for any purpose, and include operating and capital expenses, debt service, and transfers to other funds. Operating expenditures are uses of financial resources for personnel, supplies, services, and materials, and exclude capital expenses, debt service, and transfers to other funds. Policy: The Unassigned Fund Balance range for the General Fund shall be no less than three (3) months operating expenditures or twenty-five (25%) percent of the total budgeted operating expenditures. In the event of an extreme emergency, the Town Council may utilize unassigned fund balance that will reduce fund balance below the 25% policy for the purpose of providing for: • Exposure to natural disasters (i.e., hurricanes or other events that threaten the health or safety of the residents • Taking advantage of an unforeseen significant opportunity that may be otherwise lost to the community • To protect the long-term fiscal security of the Town of Morrisville If Fund Balance falls below twenty-five (25%) percent, the Town Council will adopt a written plan as part of the following year’s budget process to restore the Fund Balance available to the policy level within twenty - four (24) months from the date of the budget adoption. This plan may require reduction of services, increases in taxes, fees, or rates, or some combination thereof. • An unanticipated revenue shortfall

If Unassigned Fund Balance available as calculated as part of closing-out a fiscal year is in excess of forty- five (45%) percent, the Town Council may appropriate or designate the excess for one-time Capital

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