City Council Minutes 2015 09 21 SP

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City Council Meeting Minutes September 21, 2015 Page 4 of 17 DISCUSSION /DIRECTION 2016 PROPOSED BUDGET City Manager Fleming stated staff listed the topics Council members raised at the last meeting. The issues could be discussed in any order Council wished. Mayor Muckle was satisfied with the draft policies, but asked if Council members had questions they would like to address. Council member Lipton noted only a couple of the policies affect the ability to put together a budget for this year. He asked for a conversation on the reserve policies and how the numbers were determined and how those would be met. He wanted to look at resident and non - resident fees at the Recreation Center. City Manager Fleming noted two sets of policies in the packet; current and proposed. He asked Finance Director Watson to go over the reserve policies. Reserve Policies Finance Director Watson stated some changes have been made based on what staff heard at the Budget Retreat. The General Fund Reserve was set with a minimum fund balance of 15% with an added target of 20% of current operating expenditures. Open Space & Parks Fund reserves are set at a minimum of 15% of current operating expenditures within the fund; additionally a targeted higher fund balance including the amount sufficient to cover the City share of the three highest priority properties. The Cemetery Fund minimum reserve was defined because this fund receives an ongoing subsidy transfer from the General Fund and administratively, it makes sense to have a minimum amount in the fund. The Combined Utility Fund has the biggest jump to 25% of current operating expenditures; current policy is 15 %. Taken out were the provisions for the City Manager to lower the fund balance down to 20% and a Council action requirement to go below 15 %. City Manager Fleming noted a change in the Open Space and Parks Fund reserves; as the highest priority properties are purchased, the amount necessary to reserve will be adjusted. Mayor Muckle asked if language needs to be added to the utility reserve for bond repayment. Finance Director Watson felt it was covered in some of the debt policies where it talks about full compliance with all covenant on bond issues. Council member Lipton had suggested on the General Fund Forecast a percentage scale and he would like to see that information. He would like a higher reserve target, 22 -23 %, as prior to the flood. Council member Stolzmann asked if GFOA (Government Finance Officers Association) had a recommended target for sales tax dependent cities. Finance Director Watson