(a) The Yolo County Board of Supervisors shall adopt a policy on fund balances and financial reserves, as recommended by the Chief Financial Officer and the County Administrator. The policy shall be in accordance with accounting and financial reporting standards as promulgated by the Governmental Accounting Standards Board and best practices as defined by the Government Finance Officers Association for purposes relating to the classification and use of fund balances and financial reserves to support the strategic goal of financial sustainability in county government.
(b) The policy on fund balances and financial reserves shall establish a general reserve, the purpose of which is to protect the County's essential services from the potential impacts of unanticipated events and circumstances not occurring during the normal course of operations, for example:
i. Severe economic downturn such as when the National Bureau of Economic Research declares a recession;
ii. Severe funding reductions from funding agencies necessitating significant decreases in essential health and safety services even after other mitigating options have been implemented;
iii. Severe state budget impact necessitating significant decreases in essential health and safety services even after other mitigating options have been implemented;
iv. Disasters resulting in a declared state of emergency by either or both the Governor and the President requiring significant expenditure of local resources.
(c) The target balance in the reserve shall be set at ten percent of the average total expenditures reported by the General Fund and the Public Safety Fund in the County annual financial report of the preceding three fiscal years. A ten percent reserve is considered a prudent amount that could fund essential health and safely services for approximately two months. The County Chief Financial Officer shall calculate the annual required contribution and provide this information to the County Administrator during the annual budget development.
(d) Drawdown on the General Reserve shall only be authorized by the Board of Supervisors in a four-fifth vote resolution or during the adoption of the annual budget. The General Reserve shall be funded and replenished according to a plan recommended by the County Chief Financial Officer and the County Administrator and adopted by the Board of Supervisors.
(§ 2, Ord. 1503, eff. November 8, 2018)