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Utilizing Cash Reserves <br />35 <br />To the extent that the Council might consider the use of Cash Reserves to provide for the 2014 Budget, <br />36 <br />there are a number of public policy considerations that should be considered. The City’s Operating <br />37 <br />Budget Policy and Operating Fund Cash Reserve Policy highlight those considerations. They are <br />38 <br />included as Attachments A & B respectively. <br />39 <br />40 <br />The unassigned cash reserve levels as of December 31, 2012 are as follows: <br />41 <br />42 <br />43 <br />44 <br />Based on current operating trends, we do not expect any significant changes in these reserve levels in <br />45 <br />2013. With respect to the enterprise funds (water, sewer, etc.) there isn’t a specific target reserve level <br />46 <br />given that the reserves not only provide for day-to-day operations but also for capital replacements. As <br />47 <br />a result, they can fluctuate significantly from year to year. <br />48 <br />49 <br />Generally speaking Staff agrees with the guidance set forth in the Operating Budget and Operating <br />50 <br />Fund Cash Reserve Policies. However, it’s recognized that under unique circumstances the use of cash <br />51 <br />reserves to fund current expenditures is acceptable as long as there is a commitment to abstain from <br />52 <br />perpetually using reserves for on-going expenditures. In other words, the use of reserves for a <br />53 <br />warranted purpose should be accompanied by a plan to eliminate its use in a timely fashion. <br />54 <br />55 <br />Revisiting Budget Program Priorities <br />56 <br />Absent specific Council direction to the contrary, the 2014 Budget will most likely be a ‘status-quo’- <br />57 <br />type budget given our fiscal restraints. If the Council has specific items that ought to receive high <br />58 <br />priority funding including new initiatives, then those items should be identified to ensure that they’re <br />59 <br />included in the Recommended Budget. <br />60 <br />61 <br />Similarly, the Council is also asked to identify any programs or services that could receive less funding <br />62 <br />in order to ensure the proper funding for high priority items. <br />63 <br />64 <br />Final Comments <br />65 <br />At a number of prior Council meetings, Staff identified a number of major impact items that should <br />66 <br />receive Council consideration. The following tables summarize the projected budget reductions and <br />67 <br />potential budget impact items. <br />68 <br />69 <br />70 <br />Page 2 of 3 <br /> <br />