Operating and CIP Budget Fiscal Year 2015-16

Fiscal Policies (continued)

operating budget.

e. At other times, i.e., when reserves are 25% or greater and projected to remain so, achieving structural balance may be post- poned to the last year of the five-year fi- nancial forecast. f. 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. g. With its bargaining units the City will nor- mally 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. h. 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. 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

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D. Community Development Fund – The City shall make every effort to keep a minimum reserve level of 30% of the appropriated operating budget for the Community Development Fund, in order to pro- vide for those temporary periods when less devel- opment activity occurs and less revenue is col- lected by the City. E. Unemployment – The City shall make every effort to maintain a minimum reserve level in the Unem- ployment 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. G. General Liability – The City shall make every effort to maintain a minimum reserve level equal four times the self insured retention for general liability claims. A. A portion of General Fund Balance will be desig- nated for economic uncertainties and not be re- flected in available fund balance for budget pur- poses. 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 Appro- priations 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 pro- jects at year-end. C. Other reserves, such as for cash flow needs or an- ticipated costs for service enhancements, will be established each fiscal year as needed. Budgetary Designations

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