07-10-07 FPAC Agenda - Laserfiche WebLink

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CITY OF MISSION VIEJO • MANAGEMENT AND BUDGET POLICIES (AS AMENDED JULY 6, 1999) RESERVES General Fund Reserves A. A Contingency Reserve account will be budgeted every two years, and appropriated annually to provide for unanticipated expenditures of a nonrecurring nature and/or to meet unexpected increases in costs. B. An Economic Uncertainty Reserve account will be budgeted every two years, and appropriated annually to avoid the need for service level reductions in the event an economic downturn causes revenues to come in lower than budget. C. An Exposures Reserve will be maintained for the purpose of setting aside resources for costs not covered by the City's insurance programs, such as claim costs within the City's deductibles, self-insured retentions and/or major costs associated with disasters and other events, which will not be reimbursable from insurance or from the Federal or State government. The amount of this reserve will be analyzed every two years to determine the appropriate funding level. D. A Reserve for Infrastructure, which will receive residual fund balance not apportioned to the Reserves listed under Sections A through C and Sections H and I, will be maintained to fund future infrastructure and other one-time expenditures, such as for capital projects that were not anticipated in the biennial budget process or could not be entirely financed from current revenues. E. Reserves for Encumbrances and Continuing Appropriations are established at the end of every fiscal year to reserve fund balance in the amount equal to the City's unpaid obligations and unfinished projects at year-end. F. Other reserves, such as for cash flow, in the event that current cash flow needs exceed combined fund balances, or anticipated costs for service enhancements, will be established each fiscal year as needed. G. Combined unappropriated fund balance and appropriated reserves in the General Fund will not be allowed to fall below 15% of the current year General Fund operating budget. Funding levels of all General Fund reserves will be reviewed during periods of economic stagnation to avoid reductions in operating service levels. Other Reserve Funds H. A Computer, Equipment, Furnishings, and Vehicle (CEFV) Replacement Fund will be maintained, at a rate of 100% accumulated depreciation, and as a separate fund, to fund the replacement costs of existing equipment, vehicles, computers and office furnishings • when they reach the end of their useful lives.