A Contingency Reserve of not less than three percent (3%) or more than five percent (5%) of the estimated revenue for the current year shall be maintained for the General Fund.
The purpose of the Contingency Reserve is to allow the District to absorb any unpredicted revenue shortfall, to maintain cash flow, and to minimize the borrowing needs of the District.
Each year during the budgeting process, the administration will estimate the amount of fund balance to be available and the amount of the contingency to be available for the following year. This amount will always be an estimate and will vary because of the exact amount of revenue and expenditures will not be known until after the close of the fiscal year. The estimates will be used to prepare the budget for the following year. [IC 33-506(1), 33-801A] (6-18-02)