Fund Reserves - Laserfiche WebLink

Home Browse Search

B. FINANCIAL POLICIES Fund Reserves OPTION 2 It is the policy of the city of Decatur, Illinois to maintain fund reserves sufficient to maintain normal governmental cash flow requirements during the course of the year, provide resiliency against catastrophic loss, buffer for the occurrence of one or more community emergencies, and/or endure a sustained economic downturn. The desire to maintain fund reserves in the General Fund should be tempered by the City Council's obligation to maintain taxes at a rate that is not burdensome. Consistently maintained cash reserves also serve to demonstrate that the city has the capacity to properly manage its finances, and this often contributes directly to lower debt financing costs. Since the primary function of a restricted cash reserve is to insure uninterrupted operations and municipal service delivery: the city will, over several years, incrementally increase its General Fund cash reserves to equal 6.0 90 days (one sib fourth of the annual General Fund expenditure budget), NOT INCLUDING CAPITAL EXPENDITURES VALUED AT MORE THAN $100,000. Month-to-month reserves will vary based on expenditure demands and fluctuating revenue patterns, but 90 days of reserve will be the goal. Fund reserves for funds other than the General Fund may be separately approved from time-to-time by the City Council. OPTION 3 It is the policy of the city of Decatur, Illinois to maintain fund reserves sufficient to maintain normal governmental cash flow requirements during the course of the year, provide resiliency against catastrophic loss, buffer for the occurrence of one or more community emergencies, and/or endure a sustained economic downturn. The desire to maintain fund reserves in the General Fund should be tempered by the City Council's obligation to maintain taxes at a rate that is not burdensome. Consistently maintained cash reserves also serve to demonstrate that the city has the capacity to properly manage its finances, and this often contributes directly to lower debt financing costs. To insure sufficient financial reserves, the city will create a separate "rainy day reserve fund" distinct from the General Fund with a fund balance equal to 60 days of operating reserves based on non-capital General Fund expenditures in the current year budget. Withdrawals from the"rainy day reserve fund"will be authorized by a majority vote of the City Council and may be used for any lawful governmental purpose. In addition to this separate "rainy day reserve fund,"the city will seek to maintain at least 30 days of reserve