Formal Reserve Policy Details
"Learn about the newly established formal Reserve Policy aimed at enhancing fiscal stability and planning. The policy outlines Assigned and Unassigned Reserves, their intended use, minimum targets, replenishment requirements, oversight, and annual review processes. Explore the options and recommendations presented for approval." (Maximum 492 characters)
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Presentation Transcript
RESERVE POLICY June 26, 2025 TYLER SALCIDO, EXECUTIVE OFFICER
PURPOSE OF THE POLICY Establish formal Reserve Policy Policy codifies existing Assigned Emergency Reserves Establishes formal target for Unassigned Reserves Strengthens fiscal stability and planning 2
BACKGROUND LAFCo has maintained informal reserves: Litigation Reserve: $40,000 Catastrophic Building Damage Reserve: $460,000 Total Assigned Reserves: $500,000 No written policy until now Commission directed staff to formalize policy and set target for Unassigned Reserves 3
WHATS IN THE RESERVE POLICY? Assigned Emergency Reserves: $40,000 for litigation $460,000 for catastrophic building damage Use requires Commission approval Unassigned Reserves: Minimum target: 10% of annual operating expenses Reviewed and set annually Flexible use: cash flow, revenue shortfall, emergency needs 4
RESERVE USE & REPLENISHMENT Assigned Reserves: Only for designated purposes Commission approval required Unassigned Reserves: For emergencies, shortfalls, unplanned projects If below 10% target: Commission must adopt a replenishment plan 5
OVERSIGHT & ANNUAL REVIEW Reserve levels reviewed every year as part of budget process Executive Officer reports reserve status, makes recommendations as needed Policy can be amended only by Commission action 6
OPTIONS & RECOMMENDATION Options: Adopt, Revise, or Decline the Policy. Recommendation: Approve and adopt the Reserve Policy as presented 7
