A. Purpose: The purpose of this section is to establish a cash reserve balance policy tailored to the needs of the city to ensure against unforeseen events that would adversely affect the financial condition of the city and jeopardize the continuation of necessary public services. This section will ensure the city maintains an adequate cash reserve balance in the city's general fund to provide the ability to:
1. Provide sufficient cash flow for daily financial needs.
2. Support the highest possible bond rating.
3. Offset significant economic downturns or revenue shortfalls.
4. Provide funds for unforeseen emergency expenditures.
B. Definition: Cash reserve balance is the term that will be used to represent the general fund cash set aside from operating funds to be used for the purposes as described in subsection A of this section.
C. General Policy:
1. The cash reserve balance for the general fund shall be maintained at a minimum level equal to or greater than twenty five percent (25%) of the general fund current year budgeted expenditures including transfers from the general fund less capital outlays supported by specific revenue sources.
2. The cash reserve balance shall be reviewed annually during the budget process.
3. If at any time during or after the budget process, the city council determines that a portion of the twenty five percent (25%) reserve must be used, the city council will take all necessary actions to increase the cash reserve balance to the twenty five percent (25%) threshold in future years. (Ord. 3004, 10-10-2011)