Title
A Resolution repealing Resolution 2004-196 and amending Resolution 2012-25, to establish General Fund and Insurance Fund Reserve policies; and providing for an effective date.
Body
On September 4, 2004 the City Commission approved Resolution 2004-196 to adopt a reserve policy in order to build General Fund reserves. At that time, acceptable reserve amounts were between 10% and 15% of the annual operating budget. Resolution 2004-196 set the reserve level at 10%.
On January 24, 2012 the City Commission approved Resolution 2012-25 to adopt a fund balance policy in compliance with Government Accounting Standards Board Statement No. 54. This resolution defined and explained the various levels of fund balance, e.g. Restricted, Committed, Assigned and Unassigned. However it did not include language addressing or changing reserve requirements.
Current acceptable reserve levels, especially for Cities with excellent S&P and Moody’s bond ratings are now in a higher range of 20% to 25%. This resolution repeals Resolution 2004-196 and amends Resolution 2012-25 to officially raise the General Fund reserve percentage from 10% to 25% and to include reserve requirement language in the fund balance policy.