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CITY OF CAMBRIDGE <br /> • GENERAL FUND FUND BALANCE POLICY <br /> Page 2 <br /> 3. To provide for emergencies or contingencies,such as revenue shortfalls,that the City <br /> may encounter as part of its operations. This reserve shall be set at five percent(5%) <br /> of the ensuing years General Fund operating expenditures (not including capital <br /> outlay, debt service or transfers to other Funds). <br /> 4. For specific purposes as authorized by the City Council <br /> Funds shall be designated first for compensated absences,second for cash flow needs and lastly for <br /> emergencies/contingencies. <br /> 4. Shortages from the requirements of this policy shall be built up through the annual budget <br /> process. Funds shall be budgeted as emergency reserves and then not spent in the ensuing <br /> year. Shortage shall be defined as having less than the minimum policy requirement at the <br /> prior year-end,or having a projection at budget time that would indicate the policy will not <br /> be met at the current year-end <br /> Shortages of less than two percent (2%) of the policy requirement shall be made up in one <br /> 0 year. Shortages of more than two percent (2%) shall be made up by a minimum of two <br /> percent (2%)per year. <br /> 5. Overages from the requirements shall be used in one of the following ways. First, any <br /> excess, or portion thereof, may be transferred to other funds as authorized by the City <br /> Council (i.e., Revolving Capital Project Fund for future funding source for City projects). <br /> Second, the overage, or any portion thereof, may be used to offset a projected shortfall in <br /> current or future years projections. Third, the excess or any part thereof, may be used to <br /> reduce the property tax levy required for the ensuing year. <br /> 0 Adopted by the Cambridge City Council on November 23, 1998 <br />