CC Resolution 10649
Resolution No. 10649
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAMPBELL
AUTHORIZING THE REVISION OF ADMINISTRATIVE POLICIES AND
PROCEDURES
WHEREAS, the City of Campbell Administrative Policies and Procedures
Manual, Financial Policies, Section V. Reserve Policies, establishes requirements for
various financial reserves, and;
WHEREAS, the City Council convened a Study Session on April 14, 2006, to
review recommended revisions to Reserve Policies, and;
WHEREAS, the City Council wishes to revise the Reserve Policies to better
reflect the needs of the community's current and anticipated financial enviornment;
NOW, THEREFORE BE IT RESOLVED, that the City Council of the City of Campbell
hereby approves the replacement of the current Reserve Policies with those
presented as Attachment 3 to the June 20, 2006 staff report;
PASSED AND ADOPTED this 20th day of June 2006, by the following roll call
vote:
AYES:
Councilmembers:
Kennedy, Hernandez, Burr, Furtado, Watson
NOES:
Councilmembers:
None
ABSENT:
Councilmembers:
None
Approved:
Jean~-:;r
Attest:
t2~
Anne Bybee, City Clerk
Attachment 3
V. RESERVE POLICIES
. The General Fund Emergency Reserve shall be maintained at a level of 10 % of the
General Fund revenue. This reserve will only be used in the case of dire need as a result
of physical or financial emergency as determined by the City Council.
· The General Fund Operating Reserve) shall be maintained at a level of $1 million. This
reserve may be used to meet necessary, but unbudgeted, expenditures during the fiscal
year, including mid-year budget adjustments, and/or to cover minor unanticipated
revenue shortfalls. Funds drawn from this reserve during the year shall be replenished
with the adoption of the ensuing fiscal year budget.
. An Economic Fluctuations Reserve shall be maintained, with a target of $6 million, to
provide budget stabilization during an economic downturn that could otherwise result in
significant reductions in service levels and/or organizational staffing. This Reserve shall
not be less than $2 million. However, if the reserve balance falls below $5 million, or
the City's five-year financial projections indicate the reserve will fall below the minimum
requirement at any time during this period, City staff shall present to Council, by the
following year's budget adoption, a plan to return to the target amount within five years.
· A Capital Improvement Program Reserve shall be maintained at a level to cover
unbudgeted capital improvement costs, to fund future capital and infrastructure
improvements, and to fund anticipated one-time expenditures in the operating budget.
This reserve shall be targeted at $5 million, including an annual funding target of $1.5
million specifically for infrastructure needs. Any unappropriated General Fund surplus,
Attachment 3
v. RESERVE POLICIES
not needed to fund other required reserves at fiscal year-end, shall be applied to this
reserve.
. A reserve shall be maintained sufficient to cover 50 % of outstanding compensated
absences.
. Reserves for the replacement of Motor Pool and Information Technology Pool assets
shall be evaluated annually and maintained at sufficient levels to provide for the
replacement of approximately 50 % of the equipment based on accumulated depreciation
and estimated replacement costs.
· The Workers' Compensation Self-Insurance Reserve will be maintained at a level deemed
adequate to meet projected liabilities as determined by an actuarial evaluation to be
conducted at least once every two years.
· The General Liability Insurance Reserve will be maintained at a level deemed adequate to
meet projected liabilities. This level may be determined by an actuarial evaluation or
derived from estimates provided by the City's third party risk pool provider, subject to a
minimum level equal to 100% of the self-insured retention (SIR).
· Other reserves required by law, contractual obligation or Generally Accepted Accounting
Principles (GAAP) shall be provided for.
Attachment 3
V. RESERVE POLICIES
. The City Manager may, at his/her discretion, establish additional reserves and/or
recommend annual reserve fund replenishments, deemed necessary and prudent to ensure
the fiscal health of the City, subject to City Council approval.