They also use budget transfers from one department to another. Each year, all unspent money, whether in reserve funds or departmental accounts, are the fund balance or cash carryover to the next year. Spending all the reserve before the end of the year would be unwise. Local government cannot do deficit financing. But the council has excellent auditors and they can warn the council when reserves run low.
Government needs checks and balances.
But government can't function, if it is handcuffed. This is less necessary with local government, which is closer and more responsive to the people. If 10 members of the council vote to spend money unwisely, they can explain at the next election. But, under Lanahan's Law, if you have 10 votes you can even change the weather. Enter words describing a concept or keywords.