(A) The General Fund Operating Reserve Fund is accumulated and maintained to provide stability and flexibility in responding to unexpected adversity and/or opportunities.
(B) The policy establishes the amounts the city shall strive to maintain in its General Fund Operating Reserve Fund, how the Fund shall be funded and the circumstances under which the Fund may be used.
(C) In addition, the policy is intended to document the appropriate reserve level to protect the city’s credit worthiness.
(D) It is the goal of the city to maintain a General Fund Operating Reserve Fund balance equivalent to at least three months of budgeted operating revenues to meet the general operating expenses of the city during periods of economic uncertainty. The General Fund Operating Reserve Fund balances can provide for operations and continued tax stability should budgetary shortfalls occur.
(E) The city shall evaluate the degree of risk it faces on an annual basis and make a decision as to the level of financial resources that it wishes to maintain not only for contingencies but for any transitional budgetary shortfalls.
(F) The funding of the General Fund Operating Reserve Fund will generally come from excess revenues over expenditures or one-time revenues.
(G) It is the intent of the city to limit use of the General Fund Operating Reserve Fund to address unanticipated, non-recurring needs. The General Fund Operating Reserve Fund shall not normally be applied to annual operating expenditures. The General Fund Operating Reserve Fund may, however, be used to allow time for the city to restructure its operations in a deliberate manner (as might be required in an economic downturn), but such use will only take place in the context of an adopted long-term plan.
(H) In the event that reserves are used resulting in a balance below the three months minimum, a comprehensive plan shall be developed and included in the formulation of the five-year forecast presented during the annual budget process.
(I) To effectively manage the intent of this policy in light of the changing accounting nature of the General Fund Operating Reserve Fund, an annual review of the Fund shall be undertaken.
(1984 Code, § 42.03) (Ord. O-05-19, passed 3-12-2019)