• Transfers to Capital Improvement or Equipment and Vehicle Replacement Programs to enhance funding for capital purchases, • Funding accrued liabilities, such as debt service, pension, or other post-employment benefits (with priority being given to items that reduce operating expenditures in future fiscal periods), or • Appropriated to reduce the amount of future bond issuance. During extraordinary circumstances, in accordance with their purposes, such reserves may need to be drawn down below the levels specified in this policy. Examples of such circumstances would include: • Meeting unexpected nonrecurring cash flow needs, • Covering a short-term revenue/expenditure gap, or • Covering a structural revenue/expenditure gap until the imbalance can be corrected. In a case where the City falls below the minimum established by this policy, the Finance Director shall prepare a replenishment plan to bring the City back into compliance and submit said plan to City Council. Replenishment sources may include nonrecurring revenues, budget surpluses, expenditur e reductions, or excess balances from other funds, where allowable. For operating funds not covered in the table above, the City shall strive to maintain a positive unrestricted net position sufficient to provide reserves for emergencies and possible revenue shortfalls. Operating/Capital Expenditure Accountability - An independent audit will be performed annually by a public accounting firm who will issue an official opinion on the annual financial statements and a management letter detailing areas that need improvement. Full disclosure will be provided in the financial statements and in bond official statement presentations. The Financial Services department will prepare for the City Manager and the City Council each month a report of the financial condition of the City by budget item, budget estimate compared to actual for the preceding month and fiscal year to date. Additionally, Finance will prepare quarterly capital project financial status reports for senior management review. Financial systems will be maintained to monitor expenditures and revenues on a monthly basis, with thorough analysis.
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