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REQUEST FOR COUNCIL ACTION <br /> Date: 09/22/2014 <br /> Item No.: <br />13.g <br />Department Approval City Manager Approval <br />Item Description: Consider Amending the City’s Operating Fund Cash Reserve Policy <br />B <br />ACKGROUND <br />1 <br />At the September 8, 2014 City Council meeting, the Council formally amended the City’s Operating <br />2 <br />Fund Cash Reserve Policy in conjunction with a recommendation from the City’s Finance Commission. <br />3 <br />The Commission had recommended the following language to be added to the Policy’s Implementation <br />4 <br />section: <br />5 <br />6 <br />If aggregate reserves are outside of targeted goals, the Council is advised <br />7 <br />to create a plan to get reserves into targeted goal ranges by committing <br />8 <br />reserve funds using aggregate excess reserves to reduce the levy or make <br />9 <br />appropriate budget or tax levy adjustments. <br />10 <br />11 <br />In making their recommendation, the Commission noted that the ‘aggregate reserves’ category applies <br />12 <br />to the aggregate unrestricted cash reserves held in the City’s various operating funds; which currently <br />13 <br />includes the General, Recreation, IT, Communications, and License Center Funds. <br />14 <br />15 <br />After some discussion the Council chose to adopt the following language (in markup form from the <br />16 <br />Commission’s 08/21/14 language): <br />17 <br />18 <br />If aggregate unrestricted reserves in tax-supported operating funds are <br />19 <br />outside of targeted goals, the Council is advised to create a plan to get <br />20 <br />reserves into targeted goal ranges by committing reserve funds, using <br />21 <br />aggregate excess reserves to reduce the levy, or makeing appropriate <br />22 <br />budget or tax levy adjustments. <br />23 <br />24 <br />The following day at the Finance Commission’s September meeting, a couple of members had noted <br />25 <br />that they viewed the Council’s discussion on the Policy and felt that the amendments approved by the <br />26 <br />Council did not fully reflect the Commission’s intent. They therefore have asked the Council to <br />27 <br />consider clarifying the language as follows (in markup form from the 09/08/14 Council language): <br />28 <br />29 <br />If aggregate unrestricted reserves in tax-supported operating funds are <br />30 <br />outside of targeted goals, the Council is advised to create a plan to get <br />31 <br />reserves into targeted goal ranges by; committing reserve funds, using <br />32 <br />aggregate excess reserves to reduce the levy, or making appropriate <br />33 <br />budget or tax levy adjustments. <br />34 <br />Page 1 of 5 <br />