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<br /> <br />a. Proposed annual General Fund budgets shall include this benchmark policy. Council shall review <br />the amounts in fund balance in conjunction with the annual budget approval and adjust as <br />necessary to meet expected cash-flow needs. <br />b. In the event the unassigned General Fund balance will be calculated to be less than the minimum <br />requirement at the completion of any fiscal year, the city shall plan to adjust budget resources in <br />the subsequent fiscal years to bring the fund balance into compliance with this policy. <br />c. The Council may consider appropriating (for authorized purposes) year-end fund balance in <br />excess of the policy level or increasing the minimum fund balance. A preferred use of excess <br />fund balance would be for one-time expenditures, such as: <br />i. an expenditure of significant long-term benefit or legacy to the community <br />ii. a one-time (non-recurring) expenditure or grant match opportunity <br />iii. to provide catch-up funding or long-term obligations not previously recognized <br />iv. a one-time unplanned revenue shortfall <br />v. an unplanned expenditure due to an emergency or disaster <br />vi. to retire existing debt <br />vii. to fund policy shifts by other governmental entities having a negative impact on the city <br />viii. to moderate property taxes <br />d. Appropriation from the minimum fund balance shall require the approval of the City Council <br />and shall be used only for non-recurring expenditures, unforeseen emergencies or immediate <br />capital needs that cannot be accommodated through current year savings. Replenishment <br />recommendations will accompany the decision to utilize fund balance. <br />e. At the discretion of the City Council, fund balance may be committed for specific purposes by <br />resolution designating the specific use of fund balance and the amount. The resolution would <br />need to be approved no later than the close of the reporting period and will remain binding <br />unless removed in the same manner. <br />f. The City Council authorizes the finance director and/or city administrator to assign fund balance <br />that reflects the c <br />g. When both restricted and unrestricted resources are available for use, it is the c <br />use restricted resources, and then use unrestricted resources as they are needed. When <br />committed, assigned or unassigned resources are available for use, it is the c <br />resources in the following order; 1) committed 2) assigned and 3) unassigned. <br />3. Enterprise Funds <br />The city shall maintain reserves in enterprise funds at levels sufficient to provide adequate working <br />capital for current expenditure needs, for the replacement of capital assets within the fund over their <br />estimated useful life and to pay for future capital projects. Future capital projects must be identified and <br />Improvement Plan (CIP). <br />The city will maintain a reserve balance at a level considering the following: <br />a. Cash Flow <br />i. Six months of projected operation expenditures (Sewer, Storm Water and Garbage) <br />ii. One year of projected operation expenditures (Liquor Operations) <br />iii. Debt service obligations <br />b. Contingency <br />i. Potentially volatile revenue sources <br />ii. Unforeseen natural or man-made disasters and emergencies <br />c. Savings <br />i. Planned one-time expenditures and grant matching opportunities <br />Financial Management Policies Page 6 <br /> <br />