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PURPOSE <br />The purpose of this policy is to establish a target level of reserve for the General Fund as well <br />as specified Enterprise Funds and Internal Service Funds. Designating funds to reserves <br />supports the City Council's goal of ensuring fiscal stability. For the purpose of this policy, the <br />General Fund does not include any sub -funds of the General Fund such as the Rainy Day <br />Fund. <br />This reserve policy meets the following objectives of the City: <br />1. Ensure financial stability; <br />2. Maintain operations in the event of economic uncertainty or emergency; and <br />3. Make necessary repairs and replacements in the event of one-time, large-scale capital <br />breakdown. <br />Reserve Levels and Establishment <br />1. General Fund Reserves <br />Unassigned Fund Balance: The City shall maintain an unassigned fund balance of between <br />16.7% to 25.0% of annual General Fund operating expenditures excluding transfers to other <br />funds and significant one-time expenditures. The target level for the reserve is 20.0%. The <br />reserve shall be calculated using next fiscal year's budget or the current fiscal year budget if <br />next fiscal year's budget is not available. <br />Should the Unassigned Fund Balance fall below 16.7%, one-time revenues/contributions <br />should be evaluated for the reserve. For example, it may be necessary to make a one-time <br />contribution from the Rainy Day Fund. <br />Restricted Fund Balance: PARS 115 Pension Trust: The City Council has implemented <br />proactive measures to pay down the City's unfunded pension obligation. A pension trust <br />has been established and funds in the trust account can only be used for pension <br />contributions. Funds can be withdrawn during challenging times in accordance with the <br />PARS Trust Withdrawal Policy adopted by the City Council in February 2020. <br />Committed and Assigned Fund Balance: Program reserves such as Crisis Response <br />approved by the City Council or City Manager shall not be counted toward the General Fund <br />reserve level stated above. <br />2. Enterprise Fund Reserves: The following enterprise funds shall maintain a reserve of <br />between 30.0% and 40.0% of the operating expenditures for each fund: Water and Sewer. <br />The target level for these reserves is 35.0°/x. <br />3. Internal Services Fund Reserves -Facility and Infrastructure Replacement and <br />Renovation: If financial resources are available, the following Internal Service Funds shall <br />259 <br />