Finance Committee Agenda and Packet 2021 08 23

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SUBJECT: RESERVE POLICIES DATE: AUGUST 23, 2021 PAGE 2 OF 3 2.2 Open Space & Parks Fund Reserves. • The policy sets the minimum reserves at 15% of current operating expenditures. • The Open Space & Parks Fund requires a recurring annual transfer from the General Fund. This annual transfer is calculated by taking the amount of funding provided by the General Fund for Parks in 2007 ($626,900) and inflating that amount on an annual basis by the regional Consumer Price Index for All Urban Consumers. The 2007 funding level for Parks is the starting point for the calculation, since that was the last year that Parks was funded within the General Fund. • The policy states that the City Council will annually consider interfund transfers of excess General Fund or Capital Project Fund balances to the Open Space & Parks Fund for property acquisition reserves. 2.3 Cemetery Fund Reserves. • The policy sets the minimum reserves at 15% of current operating expenditures. • The Cemetery Fund requires a recurring annual transfer from the General Fund. This transfer is adjusted on an annual basis to ensure that the unrestricted fund balance of the Cemetery Fund is maintained at or above 15% of current operating expenditures. 2.4 Combined Utility Fund Reserves. • The policy sets the minimum reserves (working capital) at 25% of current operating expenditures (budgetary basis). • This reserve requirement is higher than the other operating funds to further mitigate risk and to ensure a stable fee structure and service level. 2.5 Recreation Fund Reserves. • The policy sets the minimum reserves at 15% of current operating expenditures. • The policy also requires a capital asset renewal and replacement reserve. The purpose of this reserve is to accumulate funds for the timely renewal and replacement of Recreation Center and Memory Square Pool assets. The methodology for calculating this reserve is approved by the Finance Committee. CITY COUNCIL COMMUNICATION