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Resolution No. 2020-53RCITY OF CLERMONT ��� RESOLUTION NO.2020-53R A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLERMONT, LAKE COUNTY, FLORIDA ADOPTING A RESERVES POLICY FOR THE CITY OF CLERMONT; REPEALING ALL PRIOR RESOLUTIONS IN CONFLICT HEREWITH; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Clermont deems it advisable and in the best interest of the City to establish a Reserves Policy. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Clermont as follows: SECTION 1. The City Council does hereby adopt the City of Clermont Reserves Policy as set forth in Exhibit A, attached hereto and incorporated herein. The City Council of the City of Clermont may amend the Reserves Policy by Resolution when deemed necessary and in the best interest of the City of Clermont. SECTION 2. Any resolution previously adopted by the City Council and in conflict herewith is hereby repealed to the extent of the conflict. SECTION 3. This Resolution shall take effect immediately upon its adoption. CITY OF CLERMONT CLEM' RESOLUTION NO.2020-53R DONE AND RESOLVED by the Mayor of the City Council of the City of Clermont, Lake County, Florida, this 3' day of September 2020. CITY OF CLERMONT /i Gail L. Ash, Ma.1d Tracy Ackroyd owe, City Clerk Approved as t and legality: Daniel F. Mantzaris, City Attorney CL NT CLERYfONT Choice of Champions` A. Purpose CITY OF CLERMONT RESOLUTION NO.2020-53R EXHIBIT A Reserves Policy The purpose of the Reserves Policy is to provide sufficient cash flow for daily financial needs, to secure and maintain investment -grade bond ratings, to offset significant economic downturns resulting in revenue shortfalls and to provide funds for unforeseen expenditures. Reserves information is used to identify the available resources to repay long-term debt, reduce property taxes, add, expand or enhance existing programs, or enhance the financial position of the City, in accordance with the policies established by the City Council. B. Definitions 1. Reserves — Total of cash, investments and receivables less current liabilities. 2. Restricted Reserves — The portion of reserves that is restricted by external sources such as debt covenants, grantors, and contributors, regulations of other governments or laws through constitutional provisions of enabling legislature or by the City Council. 3. Unrestricted Reserves — The portion of total reserves that is not restricted. 4. Operating Expenditures — Total expenditures less capital outlay and any other non - reoccurring expenditures. C. Restricted Reserves Established by the City Council The City establishes a restricted reserve amount in the General Fund, Water Fund, Sewer Fund, Stormwater Fund and Sanitation Fund identified as an Emergency Reserve. The reserve is established to ensure funding of public services during disaster situations such as, but not limited to hurricanes. The amount shall be twenty-five (25%) percent of the funds' operating expenditures included in the budget approved at the beginning of each fiscal year. In addition, the City Council may establish additional restricted reserve amounts identified as Capital Replacement Reserves in order to set aside funds for future major capital projects. The amounts shall be set by the City Council through the annual budget adoption process. CITY OF CLERMONT RESOLUTION NO.2020-53R The City shall strive to maintain the twenty-five (25%) reserve threshold in the Building Services Fund and Employee Group Medical Self Insurance Fund as well. All reserve restrictions amounts and descriptions shall be clearly identified in the annual budget. D. Reserves Spending Order The City considers restricted reserves to be spent first when both restricted and unrestricted reserves are available unless there are external and/or internal restrictions that prohibit doing this, such as grant agreements requiring dollar for dollar spending. E. Annual Review Compliance with the provisions of this Policy shall be reviewed as part of the annual budget adoption process. Minimum reserve targets may also be reviewed during the budget process. In any year, the City Council may deviate from the targeted amounts established herein based on unusual or unforeseen circumstances. F. Effective Date This Policy shall take effect immediately upon adoption.