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Reserves for governmental entities are generally considered appropriate in order to:

Maintain Working Capital:

  1. Meet cash flow requirements.
  2. Provide contingencies for unpredictable revenue sources.
  3. Provide contingencies for emergencies (such as natural disasters) and unpredictable expenditures.

Fund Capital Asset Replacement and Debt Retirement:

  1. Provide funding for capital asset replacement.
  2. Meet debt reserve covenants/requirements.
  3. Prepay outstanding debt.

The appropriate level of reserves for a given governmental entity depends on an analysis of these six (6) factors, along with any statutory requirements or other applicable criteria.

It is the policy of the Board of County Commissioners (BOCC) to maintain prudent reserves for established funds based on the six (6) factors listed above.

All reserve policies shall be analyzed on a periodic basis according to the six (6) factors listed above.

Reserves are the difference between the current assets (cash, accounts receivable, investments, etc.) and the current liabilities (salary and wages payable, accounts payable, etc.) of each County fund. Reserves are also known by other names, such as rainy day funds, and contingency funds.

Resolution No. 122-02
Revision Number: Original
Date of Last Review: Adopted 12-19-02 Revised 02-28-13

Policy Number: