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w <br /> RESOLUTION No. 5513 <br /> A RESOLUTION ADOPTING A GENERAL GOVERNMENT FUND BALANCE <br /> POLICY <br /> WHEREAS, a stable General Government fund balance is critical to the financial <br /> well being of the City of Everett; and <br /> WHEREAS, the City Council wishes to formalize its fund balance management <br /> practices through the adoption of a formal policy; and <br /> WHEREAS, a formal General Government fund balance policy will facilitate the <br /> annual budget development and budget amendment processes; <br /> NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF EVERETT DOES <br /> HEREBY RESOLVE to adopt a General Government fund balance policy as <br /> follows: <br /> SECTION 1: INTRODUCTION <br /> "Fund Balance" is defined as the excess of assets over liabilities, which is an unreserved, <br /> undesignated resource that remains part of the City's General Government budget. The <br /> City desires to maintain a prudent level of financial resources to guard against service <br /> disruption in the event of unexpected temporary revenue shortfalls or unpredicted <br /> expenditures. The Fund Balance has been accumulated to meet this purpose, to provide <br /> stability and flexibility to respond to unexpected adversity and/or opportunities. <br /> SECTION 2: GENERAL GOVERNMENT LONG-TERM FUND BALANCE <br /> TARGET <br /> The Fund Balance long-term target is to maintain a rolling beginning fund balance equal <br /> to 20% of operating revenues. A Fund Balance of 20% of operating revenues will: <br /> A. Provide approximately three months of operating expenses when <br /> combined with the Rainy Day Fund; <br /> B. Provide the liquidity necessary to accommodate the City's uneven cash <br /> flow, which is inherent in its periodic tax collection schedule; and <br /> C. Provide liquidity to respond to contingent liabilities. <br />