§ 16-4-105 — Accumulated retained earnings or fund surplus; capital improvements reserve

(a) A municipality may accumulate retained earnings in any
enterprise or intragovernmental service fund or accumulate a
fund surplus in any other fund. With respect to the general fund
the accumulated fund balance may be used to meet any legal
obligation of the municipality or to:
(i) Provide cash to finance expenditures from the
beginning of the budget year until general property taxes and
other revenues are collected;
(ii) Provide a reserve to meet emergency
expenditures; or
(iii) Provide a reserve by the carryover from one (1)
biennium to another of any surplus generated by community
service and continuing education programs operated by community
colleges.
(b) A municipality may appropriate funds from estimated
revenue in any budget year to a reserve for capital improvements
and for depreciation within any capital improvements fund, and
for the purpose of purchasing or replacing specified equipment
or a depreciation reserve for equipment, which has been duly
established by ordinance. Money in the reserves may be allowed
to accumulate from year to year until the accumulated total is
sufficient to permit economical expenditure for the specified
purposes. Disbursements from reserves shall be made only by
transfer to a revenue account within a capital improvements fund
pursuant to an appropriation for the fund. The amount
appropriated to reserves under this subsection in any budget
year shall not exceed ten percent (10%) of the municipality's
total revenues for that budget year.
(c) Expenditures from capital improvement or equipment
budget accounts shall conform to all requirements of this act as
it relates to the execution and control of budgets.