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CITY OF LITTLE CANADA, MINNESOTA <br />Exhibit V <br />A RESOLUTION ESTABLISHING GENERAL FUND <br />RESERVES AND /OR DESIGNATIONS <br />WHEREAS, the City's auditors have, in their management report dated December 31, 1986, <br />recommended that the City maintain an adequate level of fund balance in the General Fund in <br />order to provide for the financial strength and integrity of the City; and <br />WHEREAS, the Council recognizes that an adequate level of fund balance is necessary to <br />provide for: <br />1. Cash flow requirements <br />2. Contingent employee benefit: <br />• Compensated absences <br />• Accrued sick leave <br />3. General contingencies and emergencies <br />NOW, THEREFORE BE IT RESOLVED, as a matter of City policy, that the following General <br />Fund reserves /designations be established and maintained as far as practicable: <br />1. Cash Flow Reserve /Designation equal to one -half of the General Fund property <br />tax levy plus anticipated State aids for the ensuing year ($451,000 at <br />December 31, 1986) <br />2. Contingent Employee Benefit Reserve /Designation for Compensated Absences and <br />Accrued Sick Leave equal to amounts computed at each December 31st based upon <br />existing City policy and generally accepted accounting principles ($59,298 at <br />December 31, 1986) <br />3. General Contingency (including emergencies) Reserve /Designation equal to 15% <br />of the City's General Fund Expenditures Budget for the ensuing year ($155,300 <br />at December 31, 1986) <br />4. Other Reserves /Designations may be deemed necessary to effect City Council <br />Policy. <br />BE IT FURTHER RESOLVED, that the Administration shall annually calculate the amounts of <br />the above Reserves /Designations (based upon the above) and report such <br />Reserves /Designations in the City's Annual Financial Report; <br />BE IT ALSO FURTHER RESOLVED, that the City Council shall periodically review its <br />Reserve /Designation needs and requirements and make such changes to this policy statement <br />as required to provide for the financial strength and integrity of the City. <br />Adopted this <br />day of , 1987. <br />PAGE -33 <br />Mayor <br />Clerk- Treasurer <br />