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• General Fund Reserves Use Policy Resolution #34722 <br /> Adopt a General Reserve Use Policy. (Resolution) <br /> WHEREAS, over the past three years,and continuing with the approved FY 1990-91 budget the City Council has <br /> endeavored to rebuild General Fund reserves; and <br /> WHEREAS,as a result of annual transfers and one-time unexpected revenues Council was able to achieve a five <br /> percent General Reserve in just three years;and <br /> WHEREAS,the Auditor's Annual Financial Condition Report has recommended establishment to reserve levels equal <br /> to 10 to 15 percent of annual General Fund operating revenues,and a written financial management policy that includes <br /> policies on reserve requirement; and <br /> WHEREAS,an increase in the City's reserves decreases the City's need for short-term borrowing which is an <br /> indication of the City's financial health; and <br /> WHEREAS,actions taken in the FY 1990-91 Approved Budget transfer$2 million toward a second five percent <br /> reserve;and <br /> WHEREAS, it is important for Council to adopt a policy governing Council's use of the General Fund Reserve Fund. <br /> NOW THEREFORE,BE IT RESOLVED by the Council of the City of Portland,Oregon that the attached General <br /> Fund Reserve Fund Use Policy(summarized below)be adopted: <br /> 1. The first five percent reserve is defined as an emergency reserve available to fund one-time,emergency, <br /> unanticipated expenditure requirements or offset unanticipated revenue fluctuations occurring within a fiscal year. <br /> 2. The emergency reserve will only be accessed when the result of emergency expenditures or an unexpected <br /> revenue reduction would likely result in a negative ending balance for the General Fund. <br /> 3. Emergency Reserve resources must begin to be restored in the fiscal year following their use.Restoration will be <br /> consistent with the Council's past practice of budgeting transfers totaling a minimum of$1 million dollars a year to <br /> the General Reserve Fund. <br /> 4. The second five percent reserve is defined as counter cyclical reserve available to either maintain General Fund <br /> current service level programs or transition expenditure growth to match slower revenue growth during the first 18 <br /> to 24 months of a recession. <br /> 5. The counter cyclical reserve may be used when basic revenue growth(where"basic revenue"is defined as the <br /> sum of General Fund property tax,business license,utility license/franchise fees,cigarette and liquor taxes, <br /> transient lodging taxes,and interest income)falls to below 5.5 percent for two consecutive quarters or the Financial <br /> Forecast estimates basic revenue growth will be below 5.5 percent for the next fiscal year,and one or more of the <br /> following conditions occurs in conjunction with slower revenue growth: <br /> • The Portland Metropolitan Area unemployment rate is reported above 6.5 percent for two consecutive quarters <br /> or the Financial Forecast estimates unemployment will average in excess of 6.5 percent for the next fiscal year. <br /> .• The property tax delinquency rate exceeds 8 percent. <br /> • Actual business license year-to-year revenue growth falls below 5.5 percent for two consecutive quarters of the <br /> Financial Forecast estimates Business License revenue growth at less than 5.5 percent for the next fiscal year. <br /> 6. The Council should begin to restore counter cyclical reserves within 24 months of their first use. <br /> 7. Revenue shortfalls associated with bureau service reimbursement income, contract income,or cost recovery <br /> income may not be offset by a transfer of resources from the General Reserve Fund. <br /> • <br /> City of Portland,Oregon—FY 1999-00 Adopted Budget 293 <br />