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General Fund Reserves Use Policy Resolution#34722 • Table 5: Case 1 Reserve Calculation CASE 1 Cyclical Reserve Calculations Use Lower Bound Revenue Forecast FY 1990-91 General Fund Net Revenues $174,087,688 Item Required Reserve Unexpected Expense.(5.00%) $8,704,384 Counter cyclical Reserve $9,912,685 Required Reserve Fund Level $18,617,070 Reserve Level Percent- age 10.7% Table 5 -Case 1 Reserve Calculation CASE 2 Case 2 uses the lowest overall historical year-to-year growth rate of 0.6 percent to compute a counter cyclical reserve element.Under this alternative the difference between the"Most Likely"forecast and lower 0.6 percent discretionary revenue growth translates into about$7.7 million gap between revenues and expenditures.As shown at the top of Table 6,the required reserve level amounts to about$16.4 million or about 9.4 percent of revenues. The counter cyclical reserve element would total about$7.7 million. Comparison with Case 1,suggests that this would be large enough to get through a 12 to 18 month period of slow revenue growth. CASE 4 Case 3 uses the lowest growth rate for each major category shown in Table 4 and estimated year-end FY 1989-90 revenues to compute an overall lower bound revenue estimate for FY 1990-91. For example,Transient Lodging Taxes are forecast to increase by about 7 percent during FY 1990-91.Table 4 shows a worst case growth of-9.2 percent. The difference between the forecast and negative growth results in a revenue gap. Doing this for other major categories yields an estimated shortfall of about$9.9 million. The required reserve level for this case is$18.6 million. This equates to about 10.7 percent of forecast FY 1990-91 General Fund revenues net of short-term borrowing.A counter- cyclical reserve totaling$9.9 million would,judging from Case 1,probably be sufficient to offset slower revenue growth over an 18 to 24 month period. • 300 City of Portland, Oregon—FY 1999-00 Adopted Budget