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C - 37 City of Pleasanton Operating Budget • FY 2023/24 - FY 2024/25 APPENDIX C 3. Internal Services Fund Reserves - Facility and Infrastructure Replacement and Renovation: If financial resources are available, the following Internal Service Funds shall strive to maintain a reserve of between 30.0% and 40.0% of the previous year’s expenditures with a target of 35.0% for each fund: • Streetlight Replacement • Traffic Signal Replacement • Facilities Renovation • Park & Median Renovation 4. Internal Services Fund Reserves - Equipment Replacement: If financial resources are available, the following Internal Service Funds shall strive to maintain a reserve of between 10.0% and 20.0% of the previous year’s operating expenditures with a target of 15.0% for each fund: • Equipment Replacement • Livermore Pleasanton Fire Department Apparatus Replacement • Police Vehicle Replacement 5. An appropriated fund/reserve (e.g., a reserve made for the purpose of repairing, replacing, and procuring City assets) may be created and developed as necessary by the City Manager or their designee. Use of Reserve Funds 1. Economic Uncertainty: For use to mitigate annual revenue shortfalls (actual revenues less than projected revenues) due to a temporary slowdown in general economic conditions as well as a short-term reduction in revenues caused by actions of the State or Federal government. If any unanticipated reductions in revenue are deemed to be recurring, adjustments should be made to the budget to reflect the new revenue expectations. 2. Emergency: For use to mitigate costs associated with unforeseen emergencies, including natural disasters. 3. Enterprise Fund and Internal Service Fund Reserves shall only be used for unexpected expenses that would normally be paid by that fund. For example, the Streetlight Replacement reserve may only be used in the event of an unexpected streetlight malfunction.