HomeMy WebLinkAboutResolution 2010-061 '
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RESOLUTION NO. 2010-061
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ATASCADERO, CALIFORNIA, ESTABLISHING A GENERAL FUND .
RESERVE POLICY
WHEREAS, Reserves are a function of revenues, expenses and remaining fund balances;
and,
WHEREAS, Fiscal stability is a critical factor in the overall health and sustainability of
the City of Atascadero; and,
WHEREAS, Sound financial management includes the practice and discipline of
maintaining adequate reserve funds; and,
WHEREAS, It is a Council goal to keep General Fund expenditures stable, smoothing out
large swings in General Fund revenues; and
WHEREAS, It is a Council responsibility to maintain a sufficient level of reserve funds to
provide for the continuation of services in the event of natural or fiscal emergency; and,
WHEREAS, It is in the City's best interest to avoid excessive reserves, and to use
available funds to provide services to the community; and
WHEREAS, The prudent level of reserves is not a static number or percentage of general
fund expenditures, but instead is a function of the economic climate, exposure to risk, cash flow
needs and other factors.
NOW,THEREFORE,BE IT RESOLVED,by the City Council of the City of Atascadero
SECTION 1. The City's general underlying and overriding financial reserve strategy is
to continue to build reserves in periods of financial growth and to judiciously use those reserves
in periods of economic downturn.
SECTION 2. Reserves should be evaluated, funding goals considered and the
accumulation and/or expenditure of reserves determined as part of adoption of the biennial budget;
SECTION 3. As part of the biennial budget process, eleven key measurements should be
evaluated both independently and in conjunction with one another to determine the prudent level
of general fund reserves for that two-year budget cycle:
1. State of the economy
2. The level of diversity in General Fund revenues
'A 3'. The stability of the revenue base
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City of Atascadero
Resolution No. 2010-061
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4. Potential actions of State and Federal agencies
5. Cash flow needs
6. Costs of potential natural disasters and emergencies
7. Asset replacement requirements
8. The consistency desired in service levels
9. Available opportunities
10. Needs of future commitments
11. Interest income earned on reserves;
SECTION 4. There shall be no upper limit on the amount of General Fund Reserve; rather
reserve levels shall be set based on the criteria set in Section 3
SECTION 5. Except in the case of natural or fiscal emergencies, the City's General Fund
Reserve shall not fall below 20% of budgeted General Fund expenditures.
SECTION 6. In the event of natural or fiscal emergencies, the General Fund Reserve
level may fall below 20%; however, within 6 months of the declared emergency, the City
Council shall adopt a long-term financial plan to bring the General Fund Reserves up to the
minimum level prescribed above.
SECTION 7. The City Manager and Director of Administrative Services are hereby
authorized and directed to implement the policy hereby established.
On motion by Council Member O'Malley and seconded by Council Member Clay, the
foregoing Resolution is hereby adopted in its entirety on the following roll call vote:
AYES: Council Members Beraud, Clay, Kelley, O'Malley and Mayor Fonzi
NOES: None
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ABSENT: None
ADOPTED: July 27, 2010
OF ATASCADE O
By:
Roberta Fonzi, NWor
<-- ATTEST! —
Marcia'!McClure•Torgerson, C.M.C., City#Ierk
APPROVED A TO FORM:
Brian A. Pierik, City Attorney