Central ND News

At its July 15 meeting, the City Commission approved an updated General Fund Balance Policy to improve the city’s financial stability. The General Fund supports daily operations and essential services such as public safety and public works.

The key change in the policy increases the minimum fund balance or operating cash reserve from 17% to 25% of annual operating expenditures. This recommendation came from the City’s Budget & Finance Committee. Previously, the city followed a guideline aligned with the Government Finance Officers Association, which advises maintaining at least two months of operating expenditures as reserves.

Finance Director Greg Welch explained, “Due to the recent passage of North Dakota House Bill 1176 which created a property tax cap, local governments in the state may need to find other revenue sources or to utilize fund balance or operating cash reserves to pay for essential public services on an annual basis. Consequently, the property tax cap could impact the bond rating for local governments in North Dakota since available fund balance and cash reserve ratios comprise a significant portion of a local government’s credit rating.”

The policy update aims to strengthen Mandan’s current credit rating by increasing its minimum reserve percentage in response to uncertainty over how credit rating agencies will view new limits on property tax collections for local governments in North Dakota.

A strong credit rating allows Mandan to borrow funds at lower costs on the bond market, which can benefit property owners through reduced interest rates on special assessment projects.

The city states that this policy demonstrates its commitment to fiscal responsibility and proactive planning. The guidelines are intended to help Mandan maintain financial health and continue providing services for residents.

Residents can review the full policy by accessing the agenda packet from the July 15 City Commission meeting at https://cityofmandan.com/meetings or by contacting the Finance Department.