FY 2425 2526 Recommended Operating Budget

B. Water and Wastewater Operating Funds – The City shall make every effort to keep a minimum reserve level of 25% of the appropriated operating budget for the Wastewater operating fund and the Water operating fund. C. Water and Wastewater Rate Stabilization Funds – The City shall make every effort to keep a minimum reserve level equal to 20% of the annual estimated utility usage revenue Fiscal Policies (continued) annual estimated utility usage revenue accounted for in the Water operating budget. D. Water and Wastewater System Replacement Funds—The January 2016 Rate Study approved by the City Council establishes Capital System Replacement Reserve target of a minimum of 3% of net depreciable capital assets, which equates to a 33 year replacement cycle for capital assets. This target serves as a starting point for addressing long - term capital system needs. E. Unemployment – The City shall make every effort to maintain a minimum reserve level in the Unemployment Fund equal to 100% of the appropriation for unemployment claims. F. Workers ’ Compensation – The City shall make every effort to maintain a minimum reserve level for Workers ’ Compensation equal to the sum of twice the self insured amount for a single claim. accounted for in the Wastewater operating budget and 20% of the

G. General Liability – The City shall make every effort to maintain a minimum reserve level equal to four times the self insured retention for general liability claims. Budgetary Designations A. A portion of the General Fund Balance will be designated for economic uncertainties and not be reflected in available fund balance for budget purposes. This is to avoid the need for service level reductions in the event an economic downturn causes revenues to come in lower than budget. B. Reserves for Encumbrances and Continuing Appropriations are established at the end of every fiscal year to reserve fund balance in the amount equal to the City ’ s unpaid obligations and unfinished projects at year - end. C. Other reserves, such as for cash flow needs or anticipated costs for service enhancements, will be established each fiscal year as needed. 3. CASH MANAGEMENT A. City investments and cash management will be the responsibility of the City Treasurer. B. In accordance with Section 53646 of the Government Code, the City Council will review and update periodically, a specific investment policy. The primary purpose of this policy is to set forth the City ’ s investment philosophy and objectives. The City ’ s investment

GENERAL INFORMATION 44