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RESERVE POLICIES <br />PURPOSE <br />1. To provide a stable source of funding for those areas of <br />expenditure that fluctuate significantly from year to year; <br />' i.e., equipment replacement and facility maintenance. <br />2. To provide a cushion against unexpected revenue problems. <br />3. To provide for working capital to ensure sufficient cash flow <br />to meet the City's needs throughout the year. <br />4. To maintain and improve the City's credit rating. <br />POLICY <br />. The City will maintain a general fund reserve at 52 percent <br />of the general and recreation fund's total annual operating <br />budget. <br />. Any surplus beyond the required general fund reserve shall be <br />transferred to another reserve fund with a funding shortfall. <br />. The City will establish an equipment reserve fund, and will <br />appropriate funds to it annually to provide for timely <br />replacement of equipment. The amount will be maintained at <br />an amount equal to the accumulated depreciation plus 3 <br />percent to provide for equipment replacement. <br />. The City will establish a physical plant maintenance reserve <br />fund, and will appropriate funds to it annually to provide <br />for timely maintenance of all buildings and plants supported <br />by the general fund. <br />. The City will establish a reserve fund to provide for physi- <br />cal plant replacement; i.e., City Hall, maintenance garage, <br />etc. <br />E-9 <br />