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2) For General Fund assets, the City will establish and maintain Equipment Replacement Funds (Information Services, Garage, and Building Maintenance) to provide for the timely replacement of vehicles, capital equipment, and major building maintenance projects. Under the City's current definition of capital outlay, this includes items with an individual replacement cost of $2,500 or more. The City will maintain a minimum fund balance in the Equipment Replacement Funds of at least 20% of the original purchase cost of the items accounted for in these funds. The annual contributions to the Funds will generally be based on the annual use allowance (depreciation) which is determined based on the estimated life of the vehicle or equipment and its original purchase cost. Interest earnings and sales of surplus equipment as well as any related damage and insurance recoveries will be credited to the Equipment Replacement Funds. 3) Reserves for replacing capital improvements and equipment (capital assets) will be accumulated over the life of an asset on a "pay -as -you -use" basis. 4) The Council may designate specific fund balance or reserve levels apart from 3a above for future development of capital projects, which it has determined to be in the best long term interests of the City. 5) In addition to the designations noted above, fund balance levels will be sufficient to meet funding requirements for projects approved in prior years which are carried forward into the new year•, debt service reserve requirements; reserves for encumbrances; and other reserves or designations required by contractual obligations, state law, or generally accepted accounting principles. 6) Long-term financial planning methods will continually be evaluated and implemented, such as a multi -year capital improvement program, and the use of multi -year revenue and operating expense forecasting techniques. 7) Opportunities for consolidation of resources and activities with other agencies and jurisdictions will be actively pursued. D. Provision for Community Commitment 1) The community will be involved in development of budget strategies and determination of appropriate levels of service. 2) Staff will continually recommend and find funding for programs and projects that improve the quality of life or otherwise benefit the welfare, health, and safety of the community. 3) The City will work in partnership with the residential, business, commercial and education communities. 3 a23