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should equal the amount of accumulated depreciation recorded on all park system <br />assets. <br />^ Within each enterprise fund, the City shall establish a funding mechanism to provide for <br />the genera] replacement of related infrastructure throughout the community. The <br />funding should equal the amount of accumulated depreciation recorded on all enterprise <br />fund system assets. <br />^ From time to time the City Council shall establish additional replacement fiords as the <br />need and funding ability becomes available <br />^ The City should periodically review and follow industry-recommended replacement <br />schedules for all City capital assets. <br />Implementation <br />The City shall use replacement funds to assist in the replacement of equipment, vehicles, and <br />building maintenance. New equipment or buildings are to be funded from new dollars, unless <br />they are designated to replace currently depreciated assets. Funds from the replacement funds <br />maybe used up to the amount available from depreciation of the replaced asset. Any additional <br />funding shall be from new sources. <br />Operating Fund Reserve Policy <br />Purpose <br />^ To provide a cushion against unexpected revenue and income interruptions <br />^ To provide working capital by ensuring sufficient cash flow to meet the City's needs <br />throughout the year <br />Policv <br />^ The City will maintain a general fund reserve of 50% of the general fund's total annual <br />operating budget. This ensures that the City has adequate funds on hand to provide for <br />operations between bi-annual property tax collection periods. Any surplus beyond the <br />required general fund reserve maybe transferred to another reserve fund with a funding <br />shortfall <br />^ The City will strive to create a reserve in the Recreation Fund to equal 25% of the <br />annual recreation budget. This reserve will provide a cash flow cushion and reduce the <br />inter-fund borrowing expense to the Recreation Fund. Because of more frequent cash <br />inflows, a 25% reserve will be adequate to support the daily cash needs of the fund <br />^ The Community Development Fund is supported solely by building permit fees and <br />charges. Because the economic environment has a major effect on this Fund, a fund <br />balance of 25-50 % of the annual budget is a reasonable target. 1t is expected that as <br />7 <br />