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• The general fund will receive 5 percent of all investment earnings as administrative fees for the finance director's and city administrator's time. The city will invest funds for the highest rate of return possible allowed under state and federal law, while maintaining a diversified investment portfolio. The city will regularly review its cash position and investment performance as documented by its financial records. IV. RESERVE POLICIES A. Purpose The city will maintain reserves sufficient to provide stable funding for city services, to provide working capital for maintaining infrastructure and capital assets, and to secure a high credit rating. B. Policy The city will hold no more of the taxpayer's money than is necessary. • The city will maintain specified Fund reserves at the level required by state statute (principally TIF and Bond Funds). The city will strive to maintain a total reserve equal to 75% of the average of the previous five-year's actual total expenditures, including capital projects. The reserve will be distributed among the Funds to meet cash flow needs and in anticipation of future expenditures. The city will address an excessive or deficient reserve on a rolling four-year basis. The city's goal is to maintain a general fund balance reserve of 45 percent of the general fund's operating budget for working capital to provide cash flow between its two semi-annual state aid and tax payments (July and December). At year-end, if the general fund balance has a reserve for working capital at a minimum balance of 45% of the next year's operating budget, the remaining reserves will be transferred to the capital improvement funds on a projected needs basis as determined by the five-year capital improvement plan by city council approval. /C