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Attachment B <br />Determining Excess Cash Reserves <br />Most of the discussion surrounding the appropriate calculation of excess cash reserves has focused on <br />the amount of cash needed for cash-flow purposes throughout the fiscal year. It’s recognized that each <br />fund has unique cash-flow needs and therefore require varying levels of cash at year-end. <br />This consideration played a key role in developing the City’s Operating Fund Cash Reserve Policy which <br />establishes the following cash reserve levels for the city’s discretionary funds: <br />TargetTarget <br />Operating FundsLowHigh <br />General (unrestricted)35%45% <br />Parks & Recreation25%25% <br />Communications10%25% <br />Information Technology10%25% <br />License Center10%25% <br />At the July meeting, a number of Commission Members suggested that excess cash reserves should be <br />defined by those amounts that exceed the hightarget level for each fund. However, a broader question <br />emerged on whether the target levels were still appropriate given recent years’ financial activity.The <br />following analysis is presented below to provide greater insight into that question. <br />General Fund Cash-Flow Analysis <br />The following graphs provide the financial activity for the General Fund for the 2016, 2017, and 2018 <br />(through June): <br />General Fund (2016 Activity) <br /> $8,000,000 <br />50% of Budget <br /> $7,000,000 <br /> $6,000,000 <br /> $5,000,000 <br /> $4,000,000 <br /> $3,000,000 <br /> $2,000,000 <br /> $1,000,000 <br /> $- <br />JanFebMarAprMayJunJulAugSepOctNovDec <br /> $(1,000,000) <br />'16 Rev'16 Exp'16 Cash Balance <br /> <br />