Minutes_2014_August - Laserfiche WebLink

Home

Finance Commission Minutes August 21, 2014 Page 2 of 9 Consider Cash Reserve Policy Recommendations Commissioner Zeller provided a bench handout showing the Cash Reserve analysis from 2002 to 2014. He stated he would like this to be a document the Commission can use to build off. He reviewed the budget amounts versus actual amounts for the different funds. He explained the percentage calculation does not include the restricted reserve balance and is an annual reserve percent of the budget expenses. This was used based on the Reserve Policy. He reviewed the charts for each of the funds that had a goal amount established in the Reserve Policy. Commissioner Rohloff asked Finance Director Miller how a negative Reserve Balance would occur. Finance Director Miller explained this could be a situation where there may have been a large up front expenditure that was needed to provide programs or services and rather than taking the money from another fund an internal loan may be done. This puts the fund into a negative cash position for that note and over time the fund will pay back that loan. Chair Schroeder asked if there was interest paid on these internal loans. Finance Director Miller stated the City does not currently pay interest on internal loans. Commissioner Zeller reviewed the data and charts showing the actual combined Reserve dollars versus the goal combined Reserve dollars. According to this information, as recently as 2009 the Reserve balances were under the goals established in the Reserve Policy. The improved economy had pushed the Reserve Fund over the goal amount. He reviewed the Telecommunications Fund separately because the Reserve Policy did not establish a goal for this fund. Vice Chair Rohloff stated the different operating reserves for the funds had been received at the last meeting. The Communications balances are similar to the Telecommunications Fund. He asked if these were the same fund. Commissioner Zeller stated they were the same fund. Vice Chair Rohloff stated the goal for the Communications Fund is 20% based on the Reserve Policy and it would be a restricted fund. Finance Director Miller explained the restricted funds are to be used for a specific purpose and there are legal restrictions that come with the acceptance of these funds. Chair Schroeder clarified that there were funds earmarked in the unrestricted funds. Finance Director Miller explained the City has decided to segregate the unrestricted funds for planning and management purposes. There may be needs that will be occurring that could