HomeMy WebLinkAbout16.1 Reserves 2014.06.10 2 POLICY
Section Policy No. Page
ill Financial 16-1 1 of 2
Co my Policy Title Date: Resolution
'"� No.
Reserves June 10, 2014 234/14
Purpose:
To establish guidelines and procedures for County reserves.
Policy Statement
Kneehill County will be committed to providing the ongoing dedication of funds to specific reserves.Operating
reserves are established primarily for the commitments required for specific non capital (TCA) projects and
purchases, to stabilize revenue and expense fluctuations, and stabilize property tax increases.Capital reserves
are established to minimize borrowing on long term projects, apportion costs of tangible capital assets over
useful lives, thereby stabilizing the tax impact of large costs and assist in long term financial planning.
Policy Guidelines
1. Approval
a. Approval for the establishment,transfers to and from reserves,will be done through the
budget process, special resolution, Council motion or by-law, or where there may be externally
restricted funds. Council may cancel or close any internally restricted reserve or reallocate
between them at any time by way of motion.
2. Administration and Accounting
a. Administration of reserves will be the responsibility of Chief Administrative Officer or
designate.
b. Transfers to and from reserves will be restricted as follows:
• Amounts approved through the annual Operating and Capital Budgets
• Allocations from annual operating surplus funds as approved by Council
• Special Motions made by Council resulting from unforeseen expenditures or
emergencies
• Cash receipts, sales of tangible capital assets,grant funds, special development
agreement conditions or other funds that Council deems important to restrict for
future use,as approved by Council
• Funds carried over to a subsequent year as a result of projects,programs, or other
expenditures not completed by the prior year end, as approved by Council
c. Unless otherwise directed through policy or legislation, interest will not be accrued.
d. Reserves will be used so that in most cases,the County will not need to use long term
borrowing to complete initiatives, and to avoid paying interest. When a large, long term
POLICY
Section Policy No. Page
Financial 16-1 2 of 2
Policy Title Date: Resolution
No.
Reserves June 10,2014 234/14
project is identified,the County will begin funding that reserve incrementally so the funds are
available to pay for those costs as the project is taking place.
e. Reserves will be also be used to avoid short term borrowing costs. Reserve funds are expected
to be used to provide short term internal financing between January 1 and when taxes are
collected. Reserve funds shall not be collected for the purpose of short term borrowing.
Reserves will remain backed by cash or convertible into cash instruments.
f. The County Chief Administrative Officer or designate will monitor the County's long term
investment portfolio to ensure reserves are fully funded.
3. Reporting
a. Annual budget approval documentation identifying proposed transfers in and out of reserves.
b. Reserve activity will be reported to Council,at a minimum, on a quarterly basis.
c. Annual financial statement note disclosure.
Bob Long, gHog an,
Reeve CAO
Approved: September 9, 2003 433/03
Amended: June 22, 2004 321/04
Amended: June 10, 2014 234/14
Review Date: June 10,2017