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Attachment B Available ‘excess’ cash reserves The amounts shown in the table below represent the unrestricted monies held in key operating funds as of 12/31/17. Less12/31/201712/31/2017 12/31/2017LessReservedAvailable12/31/2017Amount CashFromForCashReserveAbove Low Operating FundsReservesDonationsCapitalReservesLevelTarget % General (unrestricted portion)$ 5,803,701$ (44,100)$ -$ 5,759,60138%427,405$ Parks & Recreation1,945,172(306,726)-1,638,44634%443,190 Communications431,608-(298,215)133,39325%80,036 Information Technology1,125,426-(456,791)668,63525%401,181 License Center976,492-(515,836)460,65625%276,394 $ 8,660,731$ 1,628,206 TargetTarget Operating FundsLowHigh General (unrestricted)35%45% Parks & Recreation25%25% Communications10%25% Information Technology10%25% License Center10%25% In the first table, the far-right column identifies the amount available above the minimumtarget level. Collectively this amounts to approximately $1,682,000. In contrast, the amount available above the high targeted range is approximately $443,000. It should be noted that the 2018 Adopted Budget calls for the spend-down of cash reserves in the amount of $681,000, $80,000, and $103,000 for the General, Communication, and License Center funds respectively. This will significantlyreduce the amount available for 2019 and beyond, although any number of varying events could change this result. Staff Recommendation As noted earlier, the City maintains an Operating Fund Cash Reserve Policy to govern the appropriate level of cash reserves for its day-to-day activities. A copy of this Policy is included in Attachment A. In establishing this Policy, it was recognized that there are a number of important roles that cash reserves play including the following: Provide cash flow to support operations in between revenue collection periods Provide interest earnings to fund current operations in lieu of higher property taxes or fees Address unforeseen circumstances including loss of revenue sources or unexpected expenditures (i.e. Business Risk) Provide for future capital expenditures Strengthen overall financial condition and bond (credit) rating As the Commission reflects on the amount of cash reserves the City should maintain, and whether to create a separate Cash Reserve Fund, it is suggested that these considerations be taken into account.