2019_0318_CCPacket - Laserfiche WebLink

Home

Attachment B Memo To:Roseville Finance Commission From:Chris Miller, Finance Director Date:August 16, 2018 Re: Item #6:Discuss Recommendations on Establishing a Cash Reserve Fund Background Over the past eighteen months, the Finance Commission has held a number of discussions regarding the establishment of a Cash Reserve Fund. The Commission provided some preliminary feedback on those discussions to the City Council at the joint City Council-Finance Commission on September 18, 2017. After receiving the Commission’s preliminary feedback, the Council directed the Commission to continue working on this matter. Throughout these conversations, two primary benefits have been expressed with regard to the creation of a Cash Reserve Fund. They include: Having a more simple display of the amount of excess monies within our discretionary operating funds above and beyond what is needed for cash-flow purposes or for meeting our capital replacement needs. Knowing the amount of available funds for future purposes such as property tax relief or new programs or initiatives. While the concept of creating this Fund appears to have broad support among Commission Members, most of the recent conversations have focused on three policy-related issues: 1)How do we determine if our discretionary operating funds have ‘excess’ reserves (i.e. what is the appropriate calculation?) 2)What if excess reserves are removed and it’s subsequently determined that they were needed all along? Are there other pitfalls? 3)What Role do Cash Reserves Play in Preserving the City’s Financial Strength Information and supporting comments involving these issues are provided below.