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As mentioned in the State Auditors recommended fund balance of 35-50% they include <br />Special Revenue Funds. The City does not include special revenue funds in the <br />calculation of the fund balance percentage. The city's special revenue funds which <br />consists of TIF, EDA, Revolving Loan Fund, Developer Contributions for Sealcoating, <br />Tree & Sod Escrows, Lawful Gambling, Peace Officers Special Fund, HRA, and Storm <br />Water Management are made up of funds that need to be used for specific purposes and <br />have restrictions placed upon them. <br />Recommendation: <br />Staff recommends that the Financial Policy for the Purpose of the Allocation of <br />Excess/Deficient General Fund Revenues be amended to reflect that the fund balance will <br />be an amount equal to 50% of the next years adopted operating budget plus prior year <br />encumbrances (if any) plus compensated absences and remove the additional 10% <br />allocation. <br />Committee: <br />Motion to recommend to City Council to adopt Resolution #10-04-XXX Establishing a <br />Financial Policy for the Purpose of Allocation of Excess/Deficient General Fund <br />Revenues. <br />And <br />Motion to recommend to City Council to adopt Resolution #10-04-XXX Authorize the <br />transfer of the 10% General Fund Reserve Allocation to the PIR fund. <br />Reviewed By: <br />City Administrator: <br />Finance Officer <br />Attachments: <br />Resolution #04-10-320 reflecting policy currently followed <br />State Auditors recommendation <br />FC: 4-13-10 <br />