Page 391 - Fort Worth City Budget 2019

Internal Service Fund Reserve Policy

Insurance Funds

VI. Policy:

Reserve Levels-The City will maintain the following minimum reserve levels
in all Internal Service Insurance Funds:

1. A minimum level of Working Capital in Insurance Funds between
two and three months of regular, on-going Operating Expenses (including
operating transfers out). This calculation shall not include Non-Recurring
Items and shall be performed using the operating fund only.

2. No Insurance Fund shall have a negative Unrestricted Net Position.
This calculation shall be performed by using all of the funds of the respective
reporting group of the specific insurance related internal service fund.

3. In addition, the City acknowledges that initially, not all funds will meet
the minimum requirement for Working Capital 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. The City will measure its compliance with this policy on an annual basis as
of September 30 each year or as soon as practical after final year-end
th
account 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.

B. If, based on staff’s analysis and forecasting, the target level of Reserves is
not met at fiscal year-end or is not likely to be met at any point within a
five-year time horizon, then during the annual budget process a plan to
replenish the Reserve levels will be developed by collaboration among
affected departments and the Department of Financial Management
Services and the Performance and Budget Office based on the requirements
outlined in this policy.

C. Funding the Reserve- Funding of internal service insurance funds Reserve
targets will generally come from excess revenues over expenses or one-time
revenues.

D. Periodic Review of the Targets – At a minimum, during the annual financial
planning/budget process staff shall review the current and five-year
projected Reserves to ensure that they are appropriate given the economic
and financial risk factors the City is subject to.

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