Recommended FY 2022-2024 Operating Budget and CIP

Fiscal Policies (continued)

policy action must be taken no later than the next budget year such that structural budget balance is projected to be regained within three years of the 25% floor being pierced. Once structural budget balance is regained, steady progress toward the 25% long-term goal for reserves must continue. 5. At other times, i.e., when reserves are 25% or greater and projected to remain so, achieving structural balance may be postponed to the last year of the five-year financial forecast. 6. Spending cuts prompted by the need to achieve structural budget balance and/or rebuild General Fund reserves will consist of service-level reductions, mitigated as much as possible by changes to employee work schedules. Service level reductions almost certainly will require layoffs and/or renegotiation of current labor costs. 7. With its bargaining units the City will normally enter into new labor contracts of no more than 12 months’ duration, unless General Fund reserves are back up to the long term goal of 25%, and projected to remain there for the subsequent five years. 8. To reduce the rate of increase in labor costs, the City will engage in good-faith negotiations with bargaining units to make cost saving changes in retirement plans and to reduce the City-paid share of

health benefits. 9. Funds shall be allocated from the annual General Fund budget savings as follows: a. 50% to the Unassigned General Fund Reserve

b. 20% to Fund 308 Street CIP for pavement and rehabilitation of City streets c. 20% to Section 115 Trusts for OPEB and PERS Rate Stabilization Funds d. 10% to Fund 302 Park Maintenance for maintaining of City parks e. In addition, any funding to the Section 115 Trusts from the General Fund budget savings will be matched by 20% funding from the Enterprise Funds as this is the percentage share of the Enterprise Funds of the unfunded liabilities.

B. Water and Sewer Operating Funds – The City shall make every effort to keep a minimum reserve level of 25% of the appropriated operating budget for the Sewer operating fund and the Water operating fund. C. Water and Sewer 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 accounted for in the Sewer operating budget and 20% of the annual estimated utility usage revenue accounted for in the Water operating budget. D. Water and Sewer System Replacement

GENERAL INFORMATION 43