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Citv of ��$� '� �� �il n ira€�I$, L�S� Purpose Operating Fund Reserve Policy CI To provide a cushion against unexpected revenue and income interruptions ❑ To provide working capital by ensuring sufficient cash flow to meet the City's needs throughout the year I�� I :�.�... f� The City will maintain a general fund reserve of 50% of the general fund's total annual operating budget. Any surplus beyond the required general fund reserve may be transferred to another reserve fund with a funding shortfall � Comment � the current reserve level for this find is only 30%. An additional $2 million is needed to comply with this policy. Current General Fund revenues and budgeting practices are unlikely to produce the surpluses needed to comply with this policy. Cl The City will strive to create a reserve in the Recreation Fund to equal 25% of the annual recreation budget. This reserve will provide a cash flow cushion and reduce the inter-fund borrowing expense to the Recreation Fund. Because of more frequent cash inflows, a 25% reserve will be adequate to support the daily cash needs of the fund '� Comment " the current reserve level for this find is S%. An additional $800 thousand is needed to comply with this policy. Current Recreation progi^am fee mechanisms and budgetingpractices are unlikely to produce the surpluses needed to comply with this policy. 0 The Community Development Fund is supported solely by building permit fees and charges. Because the economic environment has a major effect on this Fund, a fund balance of 25-50 %�� of the annual budget is a reasonable kf��,�:f ge�. It is expected that as economic downturns take place, this reserve will provide for a transition period during which the Council will be able to assess and to better match operations with the economic need * Comment * the current reserve level for this fund is at 35%. I�