10-09-07 FPAC Agenda - Laserfiche WebLink

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• MEMORANDUM TO: Mayor Blesener and Members of the City Council FROM: Shelly Rueckert, Finance Director DATE: September 20, 2007 RE: Reserve Policy Amendment The Council adopted the following policy in April of 2006, superseding the City's prior Reserve Policy and retiring the General Fund Surplus Transfer Policy. • ❖ City of Little Canada Reserve Policy Statement a. In order to provide adequate reserves for future expenditures,the City's General Fund balance and Special Revenue Fund balances should be at no time greater than 50%of the prior year's current expenditures. Current expenditures are defined as current expenditures in the General Fund, Special Revenue Funds, and Capital Projects Funds. b. Upon the receipt of the annual audit, the Finance Director will compute the transfer necessary to bring the prior year's fund balances in line with a 42.5%reserve ratio. The fund providing the transfer will be the General Fund. A copy of the initial calculation is attached as Exhibit A. c. The Parks and Recreation Special Fund, Economic Development Fund, Cable Fund, and Gambling Fund are excluded from the requirement to transfer funds because these funds were established for specific needs, therefore their fund balances should remain for those purposes. d. The reserve funds in excess of the 42.5%will be transferred and maintained in the General Capital Improvement Fund. These funds will only be available for future transfer back to the General Fund or for levy • adjustments which would have the same effect.