Purpose

Arden Park Recreation and Park District (the District) shall maintain reserve funds. This policy establishes the level of reserves necessary for maintaining the District's credit worthiness and for adequately providing for:

• Funding infrastructure replacement.
• Economic uncertainties and other financial hardships.
• Loss of significant revenue sources such as property tax receipts or connection fees.
• Local disasters or catastrophic events.
• Future debt or capital obligations.
• Cash flow requirements.
• Unfunded mandates including costly regulatory requirements.

Policy

Operating Reserves

The minimum amount of operating reserves will equal six months of operating expenses. The maximum amount of operating reserves will equal three months of operating expenses.

Procedure for Using Reserve Funds

Operating  Reserves

Operating and self-insurance reserves can be used at any time to meet cash flow requirements of District operations. Authority to use the funds will be consistent with the District's Purchasing Policy.

Capital Reserves

The Board of Directors will authorize use of capital reserves during the budget process. Capital reserves are also available for unplanned (unbudgeted) capital replacement. Authorization for the use of capital reserves for unplanned capital replacement will be consistent with the District's Purchasing Policy.