Board of Directors Regular Meeting Agenda
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Receive, consider and act upon a review of Resolution No. 014-13 Establishing Guidelines for Operating, Capital Replacement and Economic Development Reserves;
The budget may be impacted if revisions are made to the current Reserve Guidelines.
At the December 2013 Board meeting, Director Bass requested that Resolution No. 014-13 Establishing Guidelines for Operating, Capital Replacement and Economic Development Reserves be placed on the January 2014 agenda for the Board’s review. The resolution is attached for the Board’s reference. Following is a brief history and summary of this resolution.
At the Board’s direction, the 2014 Budget and related Five-Year Plan were developed based on changes to reserve guidelines that had originally been approved in 2009. In order to align the adopted 2014 Budget and the revised reserve guidelines, Resolution No. 014-13 Establishing Guidelines for Operating, Capital Replacement and Economic Development Reserves was adopted by the Board in August 2013.
Specifically, the minimum level of the Operating Reserve balance was revised from 20% of consolidated operating revenues to 20% of general fund operating expenditures. Additionally, funding for the capital replacement reserve was changed to reflect an annual transfer from the general fund in an amount approved annually by the Board of Directors ($3.5 million for 2014), plus 75% of funds generated by annual favorable budget variances, as long as the allocation of favorable variances does not cause the total capital replacement reserve balance to exceed the balance recommended by the most recent capital reserve study for that particular budget year. The Economic Development Reserve continues to be funded by directing 25% of annual favorable budget variances to that account.
To be determined by the Board of Directors
Resolution No. 014-13
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