Special Notice / Hearing: None__
Vote Required: 4/5ths
To: Honorable Board of Supervisors
From: Michael P. Callagy, County Executive
Roberto Manchia, County Chief Financial Officer
Subject: Update of County Reserves Policy
RECOMMENDATION:
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Adopt a resolution approving an updated County Reserves Policy to increase reserve requirements, set maximum reserve amounts, and establish procedures for additional oversight, as set forth in Attachment A.
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BACKGROUND:
Maintenance of appropriate fiscal reserves are critical to the County's capacity to manage revenue volatility. The County's Fund Balance and Reserves policies help reduce the negative impact of economic downturns and potential loss of funding from other governmental agencies. Fund Balance and Reserves are generally only used for one-time purposes or as part of a multi-year financial plan to balance the budget.
To establish and ensure consistent reserves policy for the General Fund and across County departments, the Board of Supervisors approved the County Reserves Policy in April 1999. In February 2010, the policy was updated after the Board directed staff to review and revise the policy following the 2008 economic crisis. Among other elements, the current County Reserves policy sets a minimum General Fund reserves level at 10% and requires County departments to maintain reserves at 2% of their respective Net County Appropriations. The policy has not been updated since that time.
DISCUSSION:
To ensure continued sound management of the County's finances in view of increased expenditures, inflation and risk of revenue volatility, staff is proposing that the Board approve an updated County Reserves Policy. The updated policy was prepared by a staff workgroup which analyzed the current Fund Balance and Reserves policies, including departmental and non-departmental reserves, and trends in ongoing expenditures. The updates to the County Reserves Policy are designed to strengt...
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