Laserfiche WebLink
City of <br />� � <br />��r � <br />�i�,����.r,t„, i-;�,� <br />Purpose <br />Operating Fund Reserve Policy <br />(� To provide a cushion against unexpected revenue and income interruptions <br />❑ To provide worl�ing capital by ensuring sufficient cash flow to meet the City's needs <br />throughout the year <br />_P�Ji��. <br />i� The City will maintain a general Fi.int� reserve of 50% of the general fund's total annual <br />operating budget. Any surplus beyond the required general funti� reserve may be <br />transferred to another reserve fund with a funding shortfall <br />i� 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 100% of the annual budget is a reasonable goal. It is expected that as <br />economic downturns take place, this reserve will provide for a transition period during <br />which the Council will be able to assess and to better match operations with the <br />economic need <br />4 City enterprise funds shall have operating cash reserves sufficient to provide for <br />monthly cash flow, and for a reasonable level of equipment and infrastructure <br />replacement. Major reconstruction or system upgrades, may need to be funded from <br />enterprise revenue bonds. Annual utility rate reviews will be made in regard to <br />projected operatingexpenses and capital improvements. The Gouncil will, on an annual <br />basis, establish rates in accordance to operating cost recovery and the projected capital <br />improvements <br />L� All other operational funds e.g. license center, Information Technology, gambling, etc <br />are expected to operate with positive reserve balances of at least 25% of the annual <br />operating budget. However, as many of these funds are for a short duration or are <br />supporting specific projects, those balances may be above or below that limit in any <br />given year. Each operational fund shall be reviewed on an annual basis to assure the <br />fund balance is in line with the fund's objectives <br />t �7 <br />