HomeMy WebLinkAbout24-119 Adopting the Town Working Reserve Policy 12-18-20241 1 1
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WHEREAS, the Town of Firestone ("Town") previously adopted a Working Reserve
Policy ("Policy"); and
WHEREAS, the Board of Trustees finds that the Policy should be updated with the goal of
promoting and supporting the efficient, beneficial and effective use of the Town's resources; and
WHEREAS, the Town Manager, Director of Finance and the Finance Committee
collaborated to develop an updated policy, which has been presented to the Board of Trustees; and
WHEREAS, the Board of Trustees finds that the proposed policy meets the goals it
established and also supports the Town's fiscal. responsibilities.
NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF
THE TOWN OF FIRESTONE, COLORADO:
Section 1. The Board of Trustees hereby approves and adopts the Town of Firestone
Working Reserve Policy, in substantially the same form as the copy which is attached hereto and
made a part of this resolution.
Section 2. All prior Working Reserve Policies or amendments thereof adopted by the
Town are repealed in their entirety.
INTRODUCED, READ AND ADOPTED this 18th day of December 2024.
TOWN OF
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TOWN OF FIRESTONE WORKING RESERVE POLICY
ADOPTED DECEMBER 2024
The Town of Firestone (Town) Board of Trustees (Board) has determined it to be prudent financial
practice to maintain adequate levels of working reserve in the Town's General Fund in order to mitigate
current and future risks such as revenue shortfalls and unanticipated expenditures as well as to buffer
the Town from downturns in the economy and to provide an additional source of accumulated funding
for major capital improvement projects. The Town believes that establishing and maintaining adequate
working reserve levels will assist the Town in taking greater advantage of the "pay as you go"
philosophy and is a critical consideration to the Town's long-term financial planning.
MINIMUM, MAXIMUM AND TARGET LEVELS
The Town will maintain a minimum working reserve of at least 25% of the current year's General
Fund operating appropriations. The Town's maximum working reserve shall not exceed 100% of the
General Fund budgeted operating appropriations. In the event the Town has excess funds of over the
100% maximum amount, the Town will reserve such excess funds for future capital projects or for
such other purposes as designated by the Board. The working reserve levels will be determined by the
Board annually during the budget process.
USE OF FUNDS
The Town understands that circumstances may arise that may warrant the Town using its working
reserve temporarily. The Town has determined the following circumstances to be permissible instances
where it may elect to use its working reserve:
• An economic downturn in which revenues are significantly/materially under budget
• Unexpected and unappropriated price increases to service and maintain essential Town
operations
• Non -budgeted and unexpected emergencies, natural disaster costs, or litigation
• Early retirement of Town debt or loans
• Grant matching and public/private partnership matching
• Provide coverage to other funds due to a shortfall in budgeted revenues
• Capital asset acquisition, construction and improvement projects
The use of the working reserve in a given budget year will require approval by a simple majority vote
by the entire Board.
TERMS FOR REPLENISHMENT
In the event the Town elects to use its working reserve for the aforementioned purposes, the Town will
concurrently establish a formal plan to replenish its working reserve to the minimum working reserve
level. It will be the policy of the Town to replenish the working reserve to its minimum level as follows:
As soon as revenues are reasonably available,and
With priority given to replenishment over any future budgeted, new discretionary spending by
the Board (either capital or operational in nature), and
With replenishment complete no later than 5 years subsequent to the utilization of such funds.
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POLICY REVIEW
The Finance l)irector will be responsible for reviewing the Working Reserve Policy annually in
connection with the Town's annual budgeting process to ensure that the Town is maintaining adequate
levels of working reserve Binds as set forth in this policy. Furthermore, the Finance Committee and
Finance Director will be responsible for reviewing the Working Reserve Policy every two years and will
make recommendations for revisions to the policy as deemed appropriate. Adoption and modifications to
this policy will require the approval of a simple majority vote by the entire Town Board.
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Missy Carranco, Deputy 'l of rn Clerk
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TO: Board of Trustees
FROM: Finance Committee
DATE: November 20, 2024
RE: Working Reserve Policy
The proposed Working Reserve Policy has been reviewed by the Finance Committee at the November
20, 2024 meeting. With a vote ofd for and O against, the Finance Committee of the Town of
Firestone recommends the approval of the Working Reserve Policy.
FINANCE,QOMMITTE
Frank A. Jimenez;'Chair
ATT ST:
Missy Carranco, Secretary