Finance committee weighs formal carryover-reserve policy requiring five-year forecasts

The Finance Committee reviewed a draft city policy that would set minimum carryover (reserve) thresholds, require an ongoing five-year forecast, and create rules for using and replenishing surpluses.

Committee members considered a proposal that would require the general fund carryover balance to “equal 30% of the previous year’s operating expenses” and set the enterprise-fund threshold at 25%. The draft would also require the finance director to maintain and update a supporting five-year forecast and to submit the forecast and explanatory notes to council semiannually at the first meetings of November and July.

Why it matters: Committee members said the thresholds and an ongoing forecast are intended to keep the city from repeating past fiscal emergencies…