[Ord. No. 2022-3263, 9-6-2022]
A.
The
purpose of the Reserve Policy is to ensure the City remains a financially
stable organization by maintaining appropriate reserves. In concert
with the City's other financial policies, the City's Reserve Policy
serves as an important tool to guide the use of City resources in
meeting the City's financial commitments and provides a framework
for addressing unexpected future events in a fiscally prudent manner.
More specifically, the Reserve Policy works to:
1.
Position the City of Aurora to effectively plan for cash funded needs,
as well as unplanned needs caused by significant economic downturns.
2.
Manage the consequences of outside agency actions that may result
in revenue reductions.
3.
Address unexpected emergencies, such as natural disasters, catastrophic
events caused by human activity, or excessive liabilities or legal
judgments against the organization.
4.
Prevent unplanned alterations in the services that are provided to
the Aurora Community due unanticipated events beyond the City's control.
5.
Ensure that the City of Aurora maintains sufficient resources to
continue the regular replacement of vehicles, capital equipment and
other necessary capital purchases to ensure continuity of operations
and services to the Aurora community.
6.
Provide financial stability of operational budgets/funds through
changes in Council Members, Administration and staff and provide insight
to the goals and intentions of the City Council towards the goal of
ensuring financial resiliency through unforeseen circumstances.
[Ord. No. 2022-3263, 9-6-2022]
A.
The
following City of Aurora Funds shall be subject to the Reserve Policy:
B.
The
balance of reserve funds shall be calculated annually for each fund
and shall be maintained at fifty percent (50%) of operational expenditures
unless otherwise stated hereunder.
C.
One-time
capital expenses will not be included in the calculation of the reserve
funds to be maintained.
D.
Annual
debt service expenses of one (1) year, if any, shall be the required
cash reserve for non-operational funds where annual debt payments
are expensed.
E.
Reserve
funds from each operational fund may be accessed through the process
set forth hereunder.
[Ord. No. 2022-3263, 9-6-2022]
A.
The
General Fund is the central operating fund that provides for essential
general services provided by the City, such as public safety, community
development and administration. The General Fund accounts for all
general revenues of the City and for expenditures related to the provision
of the City's general services. The General Fund is considered to
have a high level of risk to operations due to its dependence on revenue
streams that are susceptible to economic downturns and revenue reduction
impacts from outside agency actions. In addition, the General Fund
is the main funding source when responding to unexpected events or
emergencies.
B.
The
General Fund shall maintain a minimum reserve of fifty percent (50%)
of annual operational expenditures.
[Ord. No. 2022-3263, 9-6-2022]
A.
Park
and Recreation and Stormwater Fund. The Park and Recreation and Stormwater
Fund shall maintain a minimum reserve of fifty percent (50%) of annual
operational expenditures.
B.
Transportation
Fund. The Transportation Fund shall maintain a minimum reserve of
fifty percent (50%) of annual operational expenditures.
C.
Police
And Fire Facility (Capital Improvement) Fund. The Police and Fire
Facility (Capital Improvement) Fund shall maintain a minimum reserve
of fifty percent (50%) of annual operational expenditures.
D.
Wastewater
Fund. The Wastewater Fund shall maintain a minimum reserve of fifty
percent (50%) of annual operational expenditures.
E.
Recreation
Center Fund. The Recreation Center Fund shall maintain a minimum reserve
of fifty percent (50%) of annual operational expenditures.
F.
Any
new fund created by the City Council shall maintain a minimum reserve
of fifty percent (50%) of operational expenditures unless otherwise
established by the Aurora City Council.
[Ord. No. 2022-3263, 9-6-2022]
A.
It
will be the general policy of the City of Aurora to invest reserve
funds whenever feasible in accordance with the City of Aurora Investment
Policy in order to maximize growth opportunities for reserve funds.
B.
Reserve
fund minimum balances for all funds subject to this policy shall be
reviewed and adjusted by resolution during the first quarter of each
fiscal year with the approval of the City Council.
C.
Reserve
funds may be accessed from the Reserve Fund for each operational fund
through the following process:
1.
Approval of a resolution that includes the dollar amount that the
reserve fund shall be reduced and a statement of the reason for the
use of the reserve funds; and
2.
The resolution shall include a plan to replenish the funds that were
accessed within three (3) years or as stipulated within the resolution;
and
3.
The resolution shall require passage with an affirmative vote of
two-thirds (2/3) of the City Council.
D.
Should
reserve funds for any operational fund fall below the minimum amount
as established by this policy, a plan shall be formulated to restore
minimum reserve within three (3) years and approved by resolution
by the City Council.
