Laserfiche WebLink
Financial Management Policies Page 15 <br />first 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 city’s policy to use <br />resources in the following order: 1) committed 2) assigned and 3) unassigned. <br />C. Enterprise Funds <br />The city will 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 <br />and quantified in a written plan for the fund which shall be included in the city’s annual Capital <br />Improvement Plan (CIP). <br />The city will maintain a reserve balance at a level which takes into consideration the following: <br />▪Cash Flow <br />o Six months of projected operation expenditures (Sewer, Storm Water and Garbage). <br />o One year of projected operation expenditures (Liquor). <br />o Debt service obligations – 100% of next year’s principal and interest. <br />▪Contingency <br />o Potentially volatile revenue sources. <br />o Unforeseen natural or man-made disasters and emergencies. <br />▪Savings <br />o Planned one-time expenditures and grant matching opportunities. <br />o Impact of significant capital projects identified in a long-term plan. <br />▪Other Factors <br />o Impact on city’s bond rating. <br />o Requirements by external funding source. <br />D. Special Revenue Funds <br />The city will maintain reserves in the Special Revenue Funds at levels sufficient to provide working <br />capital for current expenditure needs plus an amount that is estimated to be needed to meet legal <br />restrictions, requirements by external funding sources and/or pay for future capital projects. Future <br />capital projects must be identified and quantified in a written plan for the fund, which shall be <br />included in the city’s annual CIP. <br />E. Debt Service Funds <br />The city will maintain reserves in the Debt Service Funds at levels sufficient to provide working <br />capital for current expenditure needs plus an amount that is estimated to be needed to meet legal <br />restrictions and requirements by external funding sources. <br />F. Capital Project Funds <br />The city will maintain reserves in the Capital Project Funds at levels sufficient to provide working <br />capital for current expenditure needs plus an amount that is estimated to be needed to meet legal <br />restrictions, requirements by external funding sources and/or pay for future capital projects. Future <br />capital projects must be identified and quantified in a written finance plan for the fund, which shall <br />be included in the city’s annual CIP. <br />G. Monitoring and Reporting <br />The Finance Manager shall annually review with the City Council the status of the fund balances <br />with this policy and present it to the City Council in conjunction with the development of the <br />annual budget and/or other long-term financial planning documents such as the CIP. <br />The city will annually review the adequacy of the reserve balances. <br />Page 61 of 294