1996 AGN JUL 16 I29 - Laserfiche WebLink

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1_:06 FROM ':Ire OF COLTON RDA TO CITY rip P.04 Reserve Analysh General Fund Enver MY Reserve 1 City Council Fiscal Policy: Maintain a reserve of no less than '% of General Fund operating oMenditures. The purpose of this reserve is to provide for a set aside for significant economic downturns, lasting two years or mote, and for unforeseen catastrophic events. This reserve's to be acecssed only upon the occza eaee of serious conditions warranting emergency measures. An K reserve level is based on the City's aging infrastructure, history of naturally caused damage (flooding, storms, etc.), potaiiW recessionary or inflationary, conditions and other such fscton. Additionally, rating agencies generally acknowledge the need for a General Fund reserve ofbetwoen. %9 depending on the factors indicated above. The 19 LTFP noted an historic decline in unreserved fund balance due to operational losses incurred beginning in FY 19 . The 19. , LTFP recommended an annual boost of S per year in order to achieve the '°A reserve level by FY 19 . Due to the continuing 1 downturn in the City's economic resources only S. , . was designaW to be added to the General Fund ace =elated fund balance, bringing the reserve to % of General Fund operating c�cgcndihm. I 11 1 I 1 0J 7 I I I I The 19 LTFP recommc3ded postponing any actions until afterthc mid -year budget review was completed to determine the full impact of various cost reduction measures implemented during that fiscal year in order to have a more accurate basis: on which to assess the 8% reserve requir neat and the cantsponding annual dollar contribution. It was assumed that a contribution between S and S per year would be needed Doe to limited resources available in FY 19. it was not considered feasible to contribute the entire amount recommended in the 19 LTFP, therefore only S ' was allocated in the budget to the Emergency R=ace bringing the amount ftmded to. `% of General Fund operating expenditures. In order to provide for the full % emergency reserve, a total contribution of S would be rcgWrcd in FY 19: .. The increase in the amount required is due to the projected increase in the General Fund operating budget for FY 19 in order to continue the phasing in approach and obtain full finding of the reserve by FY 19 it seems economically reasonable m comributo the following amounts: Yeatr Mrottrr! % • FY 19 S :% • FY 19 S No • FY 19 S. *% Tbb will b" the total Atading for the Emergency Reserve to S million or % by FY 19 . Annual allocations beginning in FY 19 ' ' will only require minor adjustments based on the actual incase in the General Fund operations budget. M