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Attachment B Memo To:Roseville Finance Commission From:Chris Miller, Finance Director Date:September 11, 2018 Re: Item #5: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. At the July meeting, the Commission asked for one additional piece of information in advance of finalizing their recommendations to the Council. Specifically, the Commission wanted to see the hypothetical result of sweeping excess funds above and beyond the high-targetcash reserve levels over the past few years for each of the five key operating funds that have been the focus of this discussion. The hypothetical results are presented in following table. City of Roseville 2015-2017 Excess Cash Reserve Calculation Op. Cash12/31/201512/31/201612/31/2017 Resrve PolicyREVISEDAmountAmountAmount TargetTargetTargetTargetAbove HighAbove HighAbove High Operating FundsLowHighLowHighTarget %Target %Target % General (unrestricted portion)35%45%35%45%$ -$ 30,935$ - Parks & Recreation25%25%25%25%-174,675443,190 Communications10%25%10%30%217,471154,694- Information Technology10%25%10%15%306,799186,562267,454 License Center10%25%10%15%712,259206,863184,262 $ 1,236,529$ 753,730$ 894,906 As shown in the table, the amount of excess cash reserves using this calculation method ranged from $753,000 to $1,236,000 over the past three years. This analysis is based on the revised target-high cash reserve levels noted at the July meeting. The revised targets are highlighted in yellow.