Flowery Branch ended its 2010 budget year on June 30 with a higher surplus than expected, reversing a downward trend since the Great Recession hit.

Earlier records showed the city ended 2010 with $716,975 in its reserve account, but numbers now show that figure is about $1.16 million.

City Manager Bill Andrew said he is encouraged by the news. “It’s obviously a good sign,” he said Wednesday.

The budget is being adjusted as part of state audit requirements for a balanced budget, and takes into account such changes as the revenue-adding acceptance of roads in the Sterling on the Lake subdivision, Andrew said.

The City Council is scheduled to take action on the adjustment at today’s meeting, which is set for 6 p.m. and takes place at City Hall, 5517 Main St.

The South Hall city has had a roller coaster fund balance for several years, with a low of $431,268 in fiscal 2006 and a peak of $1.15 million in fiscal 2007. The reserve slid downward the next two years.

The city tightened up finances in those years, including enacting, as many governments have done, monthly employee furloughs. But as the budget began to brighten last year, the city ended furloughs.

The city is in the middle of fiscal 2011, which ends June 30.

 Over the next several months, the city will begin planning for its fiscal 2012 budget, holding meetings and hearings up to the final adoption.

As a rule, Andrew said, Flowery Branch aims to keep enough money in the bank to pay for three months of city operating expenses.

With a general fund budget of $2.6 million, that amount is $653,859. So, the city has an excess amount of about $500,000.

“There’s nothing formal about saying you have a 90-day reserve — it’s just generally a good practice,” Andrew said. “It’s not required from the state or anything like that.”

He added that the city’s goal “should be to take whatever that excess is ... and start programming that into the capital improvement plan. As a rule, every year, we ought to have three or four hundred thousand dollars we can plug into a capital program.”

The funding issue could be tackled at the city’s annual retreat, which is set for March 11-12.

City officials have identified a variety of projects, particularly transportation ones, that need to be addressed.

If, for example, the city was dealing with $400,000 in excess reserve this year, “we might want to set aside $100,000 of that to save up for a $500,000 project in five years and then spend the other $300,000 on various projects now,” Andrew said.

Mayor Mike Miller has said he would like the city to develop a 10-year plan for addressing roads, utilities and other needs.

“We’ve got growth coming — we know that, so we’ve got to put that vision on paper,” he said. “We’ve got transportation and some infrastructure things we need to address.”