Page 387 - Fort Worth City Budget 2019

Enterprise Fund

Reserve Policy

VI. Policy:

Reserve Levels -The City will maintain the following minimum reserve levels in each
Enterprise Fund, consistent with State law and the terms of ordinances pursuant to
which obligations have been issued or incurred that are secured in whole or in part
by revenues held in or credited to an Enterprise Fund:

1. A goal of a minimum level of Working Capital in Enterprise
Funds equivalent to three (25%) months of regular, on-going
Operating Expenses (including operating transfers out). This
calculation shall not include Non-Recurring Items and shall be
performed against the operating fund only.

2. A goal of a minimum level of Working Capital in Enterprise
Funds equivalent to three (25%) months of the amount being
paid in Debt Service payments for the subsequent fiscal year.
This calculation shall be performed against the operating fund
only.

3. A minimum Reserve of 100 Days Cash on Hand with a goal of
150 Days Cash on Hand. This calculation shall be performed
against the operating fund only.

4. The City’s goal is that no Enterprise Fund shall have a negative
Unrestricted Net Position. This calculation shall be performed
by using all of the funds for respective reporting group.

5. In addition, the City acknowledges that initially, not all funds
will meet the minimum requirement for Working Capital
and/or Days Cash on Hand outlined in this policy. A fund will
be considered compliant with this policy as long as the financial
position shows continuous improvement each fiscal year.

VII. Monitoring Performance

A. For purposes of this calculation, Working Capital will include long-term
investments that can be liquidated within five business days. The City will
measure its compliance with this policy on an annual basis as of September
30th each year or as soon as practical after final fiscal year-end financial
information becomes available. During the course of the fiscal year the
Department of Financial Management Services and the Performance and
Budget Office shall closely monitor the City’s revenues and expenses to ensure
Reserves are not used beyond any planned usage.

2 | P a g e

387