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A strong reserve level can also produce a better bond rating. Currently, the City enjoys an `Aaa'
<br />rating from Moody's, and an `AA' rating from Standard & Poor's, which places the City in the
<br />upper 5% nationally. If our bond rating should fall, it would translate into higher borrowing
<br />costs. A bond rating that is reduced by just one tier from `Aaa' to Aal' could result in an
<br />additional $25,000-$35,000 in interest costs for each $1 million issued in today's markets.
<br />Restricted vs. Unrestricted
<br />As noted above, all municipalities must distinguish between Nestr�icted and unrestricted cash
<br />reserves. Restr^icted reserves are monies that have constraints placed on them by either external
<br />entities such as debt covenants, grantors, or laws and regulations of another government; or by
<br />laws through constit�tional provisions or enabling legislation.
<br />Examples of Restricted Funds include:
<br />a) Community Development (building permit fees)
<br />b) Communications (franchise fees)
<br />c) Water, Sanitary Sewer, Storm Sewer (fees)
<br />Because these funds are restricted, they are unavailable for general purposes such as police, fire,
<br />streets, etc. They can only be used for the purpose in which the fees were imposed.
<br />In contrast, unr�estNicted cash reserves such as those held in the General Fund can be used for any
<br />public purpose. It should be noted however that these funds are oftentimes segregated or
<br />earmarked for specific programs and services. Re-purposing these funds will likely have an
<br />impact on service levels,
<br />Current Cash Reserve I,evels
<br />The following table depicts the City's current cash reserve levels as of 12/31/12 (the last year for
<br />which audited financial statements are available) for lcey oberatin� funds:
<br />Fund
<br />General
<br />Parlcs & Recreation
<br />Community Development
<br />Communications
<br />Infonnation Technology
<br />License Center
<br />Water
<br />Sewer
<br />Stormwater
<br />Recycling
<br />Golf Course
<br />2013 12/31 /2012
<br />Bud�et Reserves
<br />$ 12,836,937 $ 5,568,600
<br />4,008,105 922,537
<br />1,045,990 367,417
<br />374,698 591,108
<br />1,562,060 226,365
<br />1,195,295 790,951
<br />n/a -
<br />n/a 1,476,000
<br />n/a 2,974,000
<br />n/a 264,000
<br />n/a 315,000
<br />$ 13,495,978
<br />Target Actual
<br />Pct. Pct.
<br />40% 43%
<br />25% 23%
<br />35% 35%
<br />20% 158%
<br />20% 14%
<br />20% 66%
<br />n/a n/a
<br />n/a n/a
<br />n/a n/a
<br />n/a n/a
<br />n/a n/a
<br />As indicated in the chart, the City has approximately $13.5 million in cash reserves in its key
<br />operating funds which generally provide for day-to-day activities. It should be noted that some
<br />of these reserves, such as the amounts depicted in the information technology, communications,
<br />and water & sewer funds also provide for capital replacements.
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