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Reserve Policies <br /> SE <br /> 1. To provide a cushion against unexpected revenue and income interruptions. <br /> 2. To provide working capital to MSUM sufficient cash flow to meet the City's needs throughout the year. <br /> LIB <br /> JU City will maintain a general fund reserve of 50% of the gmaW Ws total annual operating budget. <br /> Any surplus beyond the required general fund reserve may be transferred to another reserve ffiand with a <br /> shortfiall. <br /> The City will strive to create a reserve in the Recreation Fund to equal 25%of the annual recreation budget. <br /> This resem will provide a aish flow cushion and reduce the interfund borrowing expense to We Recreation <br /> Fun. Because of more frequent cash inflows, a 25%reserve will be adequate to support the daily cash needs <br /> Of the fimd <br /> 0 The Community Development Fund is supported solely by budding permit fees and charges. Because the <br /> economic environment has a major effect on this Fund,a fund balance of 100%of the annual budget is a <br /> reasonable goal. It is expected OW as economic downturns take platy,this reserve will provide for a transition <br /> a <br /> period during which the Council will be able to assess and to better match operations with the econonuc <br /> need. <br /> 0 City enterprise fim&shall have operating cash reserves sufficient to provide for monthly cash flow,and for a <br /> reasonable level of equipment and influstructure replacement. Major reconshwtion or system upgradek may <br /> need to be funded from enterprise revenue bonds. Annual utility no reviews will be made in regard to <br /> projecWd operating expenses and capital n'nprovements. The Council will,on an annual basis,establish rates in <br /> acwrdance to operating cost recovery and the projected capital improvements. <br /> 0 All other operational funds e.g.license center,wireless,gambling,ete are cxpccW to operate m positive <br /> reserve balances of at least 25%.However,as many of these funds are for a short duration or are supporting <br /> specific projects,those balances may be above or below that limit in any given year. Each operational fund <br /> shall be mvicwcd on an annual basis to assure the fund balance is in line with the fund!s objectives. <br /> NffiWrAnON <br /> All fund reserves"I be reviewed each year at the fime of the annual budget preparation. Budgets dWI be <br /> on an uAll Rmurces"basis, so that the City Council and Community can readily discern the current and <br /> projected nmugemak of all reserves. <br /> U-12 <br />