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REQUEST FOR COUNCIL ACTION <br /> Date: March 14, 2022 <br /> Item No.: 7.a <br />Department Approval City Manager Approval <br /> <br />Item Description: Receive the 2021 Cash Reserve Fund Report and consider transfers to other <br />funds <br />1 B ACKGROUND <br />2 At the April 27, 2020 City Council meeting, the Operating Fund Reserve Policy was updated to reflect <br />3 the new Cash Reserve Fund (Attachment A). The policy states that excess reserves above the maximum <br />4 reserve level for that specific fund (less funds needed for capital expenditures and funds received as <br />5 donations) shall be placed into the Cash Reserve Fund. <br />6 <br />7 Identifying Excess Cash Reserves <br />8 Attachment B shows the cash reserve levels along with the targets for each fund. In accordance with the <br />9 cash reserve policy, the following amounts have been identified to be in excess of the high target reserve <br />10 level for each fund. Therefore these amounts should be transferred to the cash reserve fund. <br />11 <br />12 Parks & Recreation fund $79,662 above the high target range of 30%. <br />13 Information Technology fund$360,160 above the high target range of 15%. <br />14 Total Transfer to the cash reserve fund $439,822 <br />15 <br />16 License Center fund would have ended the year with a deficit of $325,783, however, ARPA funds of <br />17 $688,000 which equaled the revenue loss in this fund for 2020 were transferred into the fund in 2021. <br />18 The year balance is 11%, which is slightly above the low target range. <br />19 <br />20 General Fund, exclusive of the cash reserve fund ended the year at a 46% cash reserve level which is a <br />21 good financial sign. When the City’s Comprehensive Annual Financial Report is prepared, the Cash <br />22 Reserve Fund is rolled up with this fund, so the audit report will show a higherreserve level. <br />23 <br />24 Communications fund ended the year with a 18% cash reserve level which is within the targetrange for <br />25 this fund. <br />26 <br />27 Information about other city fund balances will be included as part of the audit presentation in June. <br />28 <br />29 Financial Sustainability Impacts <br />30 As noted last year, the COVID-19 pandemic demonstrated why the City has reserves and the impacts that <br />31 can come from unforeseen events. The fund balance policies are set up to address such unforeseen <br />32 situations. Based on reserve fund policies and operational needs, staff recommends that the following <br />33 amounts should be transferred to the cash reserve fund: <br />34 <br />Page 1 of 2 <br /> <br />