Increasing City Reserves
For the past 20 years, the City has managed finances to support consistently low tax rates while providing high-quality services to the residents. Significant cash reserves were built up during a period of sustained growth throughout the City, and at the end of 2002, cash balances neared $180 million across all funds. When this growth slowed and the nation faced a recession, the City's revenues declined as costs increased. To alleviate financial pressure on residents and businesses, the City leveraged cash balances to maintain services provided to the community. However, this model became unsustainable as the City transitioned from a growth community to a maintenance community and the reserves could no longer offset operational and capital expenses. In response, the City recently developed a multi-year financial strategy with accompanying principles to accomplish the City's financial goals.
One of those goals is to increase General Fund reserves from the existing 20 percent requirement to 25 percent by 2023. The goal is meant to maintain an appropriate level of reserves that will balance future financial risks and appropriate tax rates. Increased reserves will allow the City flexibility in case of a financial downturn or changes in variables outside the City's control. By minimizing the community’s long-term financial risks, the City can maintain the existing quality of life and service levels provided to our residents and businesses. To measure progress on this goal, the City is evaluating the amount of reserves held in the General Fund. The reserves in this particular fund are the focus of this goal because they support the general operations of the City and are directly funded through taxes that directly impact residents and businesses.