City Adopts $37 Million Policy

MORENO VALLEY>> The City of Moreno Valley announced the adoption of a financial reserve policy to direct the city's $37 million in reserves for specific purposes. "The policy will help maintain the city's financial stability, protect against future economic downturns which bring unpredictable shortfalls in tax revenue, better prepare the city, its residents and its businesses for a catastrophic natural disaster," said Marshall Eyerman, Chief Financial Officer of Moreno Valley. With 22 percent of its general fund in emergency reserves, Eyerman said the city currently meets the new reserve policy's minimum standards and exceeds the emergency reserve levels of other cities in California. Moreno Valley was recently ranked the third most financially stable city in the nation among cities with a population larger than 200,000. The city's modest debt loads and healthy general reserve funds were credited with helping the city rise to the top of the rankings. "The City of Moreno Valley remains committed to fiscal prudence while ensuring residents receive the quality services they have come to expect," said Mayor Yxstian Gutierrez. "The steps we are taking today will ensure a brighter tomorrow." Moreno Valley's new financial reserves policy formalizes the city's long-standing practice of maintaining reserves, and splits the reserve funds into three categories: Cash Flow, Rainy Day and an Emergency fund. The city does not receive property tax revenue until the end of January - seven months after the start of the city's fiscal year. Eyerman said maintaining a Cash Flow reserve with a minimum of 17 percent of the city's general fund expenses will allow the city to provide day-to-day services until property tax revenue is received. "Allocating a minimum of 10 percent of the city's general fund to a Rainy Day fund will ensure that the city has the flexibility to continue to deliver quality services during future economic downturns," Eyerman said. "Setting aside these funds is particularly important because economic recessions can reduce sales and property tax revenues which support the full range of services provided to the community." A minimum of 12 percent of the city's general fund will be assigned to an emergency fund which can be used in response to a catastrophic earthquake, flood, fire or other disaster. The fund will also provide a financial buffer in the event that the city is forced to wait for receipt of federal disaster relief funds.