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2002 Approved Budget
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2002 Approved Budget
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6/19/2012 1:16:02 PM
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Operating Fund Reserve Policies <br />PT TRPOSSF <br />To provide a cushion against unexpected revenue and income interruptions. <br />To provide working capital by ensuring sufficient cash flow to meet the City's needs throughout the <br />year. <br />P(-)T ,Tcv <br />• The City will maintain a general fund reserve of 50% of the general fund's total annual operating <br />budget. Any surplus beyond the required general fund reserve may be transferred to another reserve <br />fund with a funding shortfall. <br />• The City will strive to create a reserve in the Recreation Fund to equal 25% of the annual recreation <br />budget. This reserve will provide a cash flow cushion and reduce the interfund borrowing expense to <br />the Recreation Fund. Because of more frequent cash inflows, a 25% reserve will be adequate to <br />support the daily cash needs of the fund. <br />• The Community Development Fund is supported solely by building permit fees and charges. Because <br />the economic environment has a major effect on this Fund, a fund balance of 100% of the annual <br />budget is a reasonable goal. It is expected that as economic downturns take place, this reserve will <br />provide for a transition period during which the Council will be able to assess and to better match <br />operations with the economic need. <br />• City enterprise funds shall have operating cash reserves sufficient to provide for monthly cash flow, <br />and for a reasonable level of equipment and infrastructure replacement. Major reconstruction or <br />system upgrades, may need to be funded from enterprise revenue bonds. Annual utility rate reviews <br />will be made in regard to projected operating expenses and capital improvements. The Council will, <br />on an annual basis, establish rates in accordance to operating cost recovery and the projected capital <br />improvements. <br />All other operational funds e.g. license center, Information Technology, gambling, etc are expected to <br />operate with positive reserve balances of at least 25% of the annual operating budget. However, as <br />many of these funds are for a short duration or are supporting specific projects, those balances may be <br />above or below that limit in any given year. Each operational fund shall be reviewed on an annual <br />basis to assure the fund balance is in line with the fund's objectives. <br />• A one time capital gain on the City's treasury portfolio has provided a fund which has been dedicated <br />to providing an ongoing tax reduction to Roseville property taxpayers. The projection and business <br />plan is to reduce the required tax levy increase by approximately 2/3 annually. This Fund is a <br />permanent fund under GASB 34. <br />IMPLEMENTATION <br />All fund reserves shall be reviewed each year at the time of the annual budget preparation. Budgets shall <br />be prepared on an "All Resources" basis, so that the City Council and Community can readily discern the <br />current and projected management of all reserves. <br />II -19 <br />
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