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REQUEST FOR COUNCIL ACTION Date: 09/08/2014 Item No.: 13.b Department Approval City Manager Approval Item Description: Consider Amending the City’s Operating Fund Cash Reserve Policy B ACKGROUND 1 At the February 24, 2014 City Council meeting the Council considered the proposed 2015 Budget 2 Calendar which outlined a series of steps to establish an eventual budget. To date, the budget process 3 has included the following steps: 4 5 May 12, 2014 Preliminary report on budget and tax levy impact items 6 May 22, 2014 Departmental budget presentations 7 Jun 16, 2014 Discussion on City Council Budget Goals & Priorities 8 Jul 14, 2014 Presentation of the 2015 City Manager Recommended Budget 9 Aug 11, 2014 Budget Hearing 10 Aug 25, 2014 Review the 2015-2034 CIP & Funding Strategies 11 Aug 25, 2014 Continue discussions on the preliminary 2015 Budget and Tax Levy 12 13 During the discussion on the budget, Finance Commission representatives presented a recommendation 14 to the Council to amend the City’s Operating Fund Cash Reserve Policy. Their recommendation was to 15 add the following policy language in the Implementation Section: 16 17 If aggregate reserves are outside of targeted goals, the Council is advised 18 to create a plan to get reserves into targeted goal ranges by committing 19 reserve funds using aggregate excess reserves to reduce the levy or make 20 appropriate budget or tax levy adjustments. 21 22 In making their recommendation, the Commission noted that the ‘aggregate reserves’ category applies 23 to the aggregate unrestricted cash reserves held in the City’s various operating funds. The attached 24 resolution calls for the inclusion of the revised language in the Policy. 25 PO OLICYBJECTIVE 26 The formal approval of financial and budget-related policies is consistent with the City’s Performance 27 Management Program, prior Council actions, and industry-recommended practices. 28 FI INANCIAL MPACTS 29 Not applicable. 30 31 Page 1 of 5