City Council Agenda
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Memo to: |
Manteca City Council |
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From: |
Matthew Boring, Interim Finance Director |
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Date: |
June 3, 2025 |
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Subject: |
Amendment to the City’s Fund Balance Reserve Policy |
Recommendation:
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Adopt a resolution amending the City’s Fund Balance Reserve Policy.
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Background:
Establishing a target minimum reserve is a mechanism that acts as an insurance policy against current and future risks to economic variances. It is a prudent and conservative fiscal policy for unforeseen situations.
The appropriate level of reserve depends upon the unique circumstances of each governmental agency and the specific funding source; for example, some may be at higher risk for natural disasters or dependent upon certain types of grants and other volatile revenues.
Circumstances where taking reserves below policy levels would be appropriate include responding to the risks that reserves are intended to mitigate, such as one-time uses in meeting cash-flow needs, closing projected short-term revenue/expenditure gaps, and responding to unexpected revenue shortfalls.
The proposed amendments include establishing a 5% reserve for the Measure Q Fund and reducing the reserve from 25% to 15% for the Golf Fund, as well as minor language cleanup to make the reserve calculations consistent throughout the policy.
Fiscal Impact:
There is no direct fiscal impact associated with this action; however, lowering the Golf Fund reserve requirement may reduce the amount of support the General Fund needs to provide in the future.
Documents Attached:
1. Attachment 1 - Resolution
2. Attachment 2 - Exhibit “A” to Resolution: Revised Fund Balance Reserve Policy
3. Attachment 3 - Revised Fund Balance Reserve Policy - Redline Version