HomeMy WebLinkAbout412 - Establishment of Unreserved Fund Balance
CITY OF REDDING, CALIFORNIA
COUNCIL POLICY
SUBJECT RESOLUTION
NUMBER
POLICY
NUMBER
EFFECTIVE
DATE
PAGE
ESTABLISHMENT OF LONG-RANGE
FINANCIAL PLANS AND UNRESERVED
CASH BALANCE
92-110
412
03/17/92
1
BACKGROUND
Fiscal stability is an important factor to any city. The budget decisions made today will have an impact on
the City’s future in not only what is accomplished, but what resources are available in the future. Being
concerned with only making ends meet this year, with little planning about what the future will hold is
shortsighted. Many governments become too shortsighted with their budget process, which causes crisis for
them down the road. The decisions made today could have a profound impact on the City’s future.
PURPOSE
Just as a city must look ahead at land use needs, it must also forecast its financial needs in order to avoid
serious deficiencies or over-commitments to programs and projects. Establishing a long-range financial plan
and minimum reserve levels will assist in accomplishing the City’s goal and objectives and provide for
orderly provisions of services to the citizens of Redding.
POLICY
It is the policy of the City Council of the City of Redding:
1. To prepare long-range financial plans for each of the City’s major funds and update those plans at
least biennially.
2. To maintain at a minimum an estimated ten percent of projected expenditures unreserved cash
balance at year end throughout the long-range financial plan.
3. When approval of additional appropriations is requested of Council the effect on the long-range
financial plan should be considered.
4. A requested appropriation that would cause the estimated end of year cash reserve in any year of the
long-range financial plan to drop below ten percent needs to be submitted with a plan to insure the
fiscal stability of the major fund’s financial position.
5. During the budget process, the City Council will evaluate the cash balance to determine if adequate
levels of cash are maintained based on the economic conditions of the area or other circumstances.
Amended August 4, 2020, by Resolution No. 2020-101