Page 15 - FY 2021-22 CAO Overview of Proposed Budget

FINANCIAL POLICY COMPLIANCE: GENERAL FUND RESERVES

General Fund reserves are at historic highs, and we strongly recommend that

they be maintained as proposed.

• For the first time, the General Fund reserves have met the Financial Policy
goal of 10 percent, hitting 11.27 percent.

• It is essential to maintain these reserves as proposed:

– The Proposed Budget assumes that second tranche of the American Rescue
Plan will arrive in May. Even if it does, the City will need to rely on its reserves,

in combination with larger cash flow borrowing to have adequate cash during
2020-21.
– If the second tranche is delayed past May, or worse into 2022-23, the General

Fund reserves will be essential to cover the revenue shortfall until the funds
arrive.

– The General Fund reserves can be used in 2022-23 to continue the high level
of new programming in 2021-22 that may otherwise not be sustainable.
– The General Fund reserves can be used in 2022-23 to cover the $134 million in
ongoing spending that is paid for in 2021-22 with one-time revenues.

2021-22 Proposed Budget

Presentation to the Budget and Finance Committee