5A Public Hearings 2021 0628 - Laserfiche WebLink

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1 City of San Leandro Reserve Policy DATE Purpose The reserve policy of the City of San Leandro establishes the foundation designating funds to reserves that support the City Council’s goal of ensuring fiscal stability and the sustainability of operations. Establishing designated reserve funds is an important step in shaping the long-term financial plan. Creating this reserve policy meets the following objectives of the City:  Ensure financial stability  Maintain operations in times of economic uncertainty The City shall establish reserve funds in accordance with the above objectives. The fund level is a goal, and it is the City’s intent to maintain the targeted fund balance. Compliance with the policy will be evaluated annually upon closing the City’s financial books at fiscal year-end. The General Fund reserves are categorized as follows:  Economic Uncertainty Reserve  Major Emergency Reserve  Undesignated Fund Balance Reserve for Economic Uncertainty The Reserve for Economic Uncertainty shall be established with a goal of maintaining a target fund balance of 20% of budgeted General Fund operating expenditures, excluding any significant one-time expenditures. The Reserve for Economic Uncertainty may be utilized with a resolution of the City Council. Appropriation of these funds may occur in the following circumstances:  A decrease in General Fund operating revenues exceeding 5% of the total budgeted revenues in a 12-month period.  Economic uncertainties, local disasters and other hardships or downturns in the local economy.  Loss of significant revenues from another governmental agency or budgeted revenue taken by another government entity that would result in a significant reduction in critical city services. Should the Economic Uncertainty reserve be used and its level falls below the target amount of 20%, the goal is to replenish the reserve within three fiscal years. In addition, 20