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City of Roseville — 2004 Budget ❑ The City shall establish a Parks and Recreation Infrastructure Maintenance Fund for the maintenance and replacement of specialized recreational facilities such as the skating center and new park shelters which have been constructed from the Recreational Facilities Bond Fund. Funding shall be the annual appropriation of the 5% set out in the tax increment policy as the infrastructure replacement fund. The use of this fund shall be limited to 60% of the annual interest income earned, until the year 2004, at which time the fund balance will permit the use to become on the basis of the other replacement funds. i.e. funding should equal the amount of accumulated depreciation recorded on the newly added recreational facilities including annual fund interest earnings. ❑ The City shall establish a Street Infrastructure Replacement Fund to provide for the general replacement of streets and related infrastructure throughout the community. The funding should equal the amount of accumulated depreciation recorded on all general governmental streets and related structures including annual fund interest earnings. The annual MSA capital allocation, will be included as part of the source of funds for computing the adequacy of this fund. This Fund has been established as a permanent fund under GASB 34 ❑ From time to time the City Council shall establish additional replacement funds as the need and funding ability becomes available. Implementation The City shall use replacement funds to assist in the replacement of equipment, vehicles, and building maintenance. New equipment or buildings are to be funded from new dollars, unless they are designated to replace currently depreciated assets. Funds from the replacement funds may be used up to the amount available from depreciation of the replaced asset. Any additional funding shall be from new sources. Operating Fund Reserve Policy Purpose ❑ To provide a cushion against unexpected revenue and income interruptions. ❑ To provide working capital by ensuring sufficient cash flow to meet the City's needs throughout the year. Polic ❑ The City will maintain a general fund reserve of 50% of the general fund's total annual operating budget. Any surplus beyond the required general fund reserve may be transferred to another reserve fund with a funding shortfall. ❑ The City will strive to create a reserve in the Recreation Fund to equal 25% of the annual recreation budget. This reserve will provide a cash flow cushion and reduce the interfund borrowing expense to the Recreation Fund. Because of more frequent cash inflows, a 25% reserve will be adequate to support the daily cash needs of the fund. ❑ The Community Development Fund is supported solely by building permit fees and charges. Because the economic environment has a major effect on this Fund, a fund balance of 100% of the annual budget is a reasonable goal. It is expected that as economic downturns take place, this reserve will provide for a transition period during which the Council will be able to assess and to better match operations with the economic need. 1M