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REQUEST FQR COUNC�L ACTI(?N 2 3 Date: 12/3/07 � I�eraa No: ��.e G Department A�praval: Manager Approved: Agenda Section: 7 �� ` �� _ �, � �taf�' Reports 9 Item Descripiion: Authoz�ize t�Ze I3ispositiozz a�d Txa�sfex of Mon�es froX�n the Taxpayer 10 Reduc�ion Fund 11 12 13 14 I5 16 17 18 19. �a 2� 22 23 24 25 26 27 2$ 29 34 �� 32 33 Y�trod�etioz� At �he �u1y 23, 2007 Co�ncil ixzee�ing the Co�zncil adopt�d a�� Opera�ing Fund Reserve Policy as part of the 2008 B�dget pracess. As it pertaans to t�e s�bject r�at�er below, t�e applicabte pari oi th� Policy is as fallovvs: 0 The City will maintain a general fund rese�ve of 50% of the gene�a2 fund's totaZ annual aperating budget Thzs ensu�es that lhe City hrrs adequate funds an hand to p�ovide for ope�c�tions be2�ween bi-annual property tax collection periods. Any surplus beyond the requaYed gene�ctl fund �ese�ve �tay be transferrec�' to another rese�ve fund with a funa'ing shoNtfalZ ❑ The City wz�l strive to create a. �ese�ve an the Rec�eation �'und to equal 25% of the annual recreatian buclget. This re,serve will provide a cash flo� cushion and r�educe the inter fund boNro�ving expense ta the Rec�eation Fund. Secause of more frequent cash in�lows, a 2S% reserve will be adequate to suppa�t the c�aily cash needs of thE fund D�trz�g t�Ze aiscussion, a inajor�ty af th� Co�ncil �xpressed an in�erest it� strengiheni�g �he Ciiy's General Fund and Parlcs & Recreatzon �'►�nd reserve levels by pexr�a�enil� trans�'erring the xz�onies available in the Ta�payer Reduction Fu�d. The amount available is approxirnateiy $�.9 millian. 34 The Crerzeral �'una c�rrent�� l�as a xeserve level af ap�xoxi��tely $39 million, or 36% of the 35 current operating budget. $y contrast, the Operating �'und Reserv� �'alicy calls i'or a inini�um 3& aperat�ng reserve af 50%. To achi�ve co�pliance with ihis �'olicy, the General F�nd wauld need 37 an addi�io�a� $I .S million in reserves. 38 39 40 41 42 43 44 The Par�s & Recreatron Funt� c�zrrently has a z'eserve leve] of approximaiely $250,000, or 7% of the curren� operatiz�� budget. By contrast, the Operating �'�nd Reserve I'a�icy ealls %r a mini�r��m operating reserve of 25%. Ta aclaiev� camp��ance witli t�is Policy, th� Recreatiaz� �`und would need an additianal $610,000 in reserves. Howeve�, i�' we first tra�sfer $1.5 million to �he General �'und, only $400,004 would be a�railable fnr the Recreatzan F�nd. With an ada'.ztiana� ��0,000, the Recreaiinn �und would l�ave a reserve level o� 19%.