Adopted February 10, 2015

PURPOSE

This policy sets a formula for determining the District’s annual reserves for its General and Assessment budgets.

BASIC POLICY AND OBJECTIVES

The Mission Oaks Recreation and Park District reserve policy is guided by sound accounting principles.  By maintaining a prudent level of financial reserves in its annual budget the District gains significant benefits including a means to accommodate savings from the previous annual budget and funds for emergency preparedness. Reserves also allow a structure for dedicating funds for future capital projects, savings for property acquisition opportunities, and be a hedge against fluctuations in property tax revenues.  Should the District ever be required to borrow money, a substantial reserve will assist with its bond rating.

The District will maintain an unassigned fund balance reserve of not less than 10% of budgeted General Fund and Assessment Fund budgets.  The Board may alter this amount for extenuating circumstances at the Board’s discretion.   

Because amounts in the nonspendable, restricted, committed and assigned categories are subject to varying constraints on their use, the Reserve for economic uncertainties consists of balances that are otherwise unassigned.