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Attachment B Continue Discussion on Establishing a Cash Reserve Fund Finance Director Miller stated the consensus at the January meeting seemed to be that the FC wanted to wrap up consideration of this item. The staff report highlights the important discussion points of the Commission (pages 1-2) as well as the nuances behind what staff recommended (starting on page 3). The staff has suggested using excess funds already in the general funds, and not use other operating funds like IT and the License Center. The report gives the staff’s emphasis of best practices that most Municipalities follow. Staff thinks it should be narrow in scope and let that play out for a couple years to see whether it achieves the outcome some are looking for. Ultimately, however, it is up to the FC to give a recommendation to the City Council. Chair Schroeder asked about the public donations referenced on the chart on page 2. Finance Director Miller explained the general public provides donations for specific purposes. That does not carry a legally binding mandate but there is a lot of intent. Thus, the City should think hard about honoring that intent. Moving those funds to another purpose will undermine public trust. Regardless of what happens with the cash reserve fund, staff suggests the City continues to honor the donations. Commissioner McRoberts stated he understands the logic, but this is giving an artificially low picture of the reserves available at Parks and Rec. Finance Director Miller noted the purpose of this memo was the last column, and it was in response to a question about how much cash is available. In response to a question, Finance Director Miller explained how the target is decided upon: to be sure there are enough cash reserves in between revenue collection periods, for the next 12 months. Chair Schroeder noted staff has suggested just doing the one fund. Finance Director Miller noted staff feels strongly that, in the absence of Council discussion, these other funds were created with intent and evolved over a period of decades. That conversation with the Council has not yet taken place. Rather than automatically taking the money out because it is excess and place it in the cash carry-forward fund, there ought to be a careful process before undoing what has been done for decades. Commissioner McRoberts clarified the Commission has said, if the funds are swept, then the Council can more appropriately see the funds. Chair Schroeder also recalled the CIP should be taken out of these funds before anything is done. The sweeping does not work if capital is included in the funds.