If any circumstances noted above occur, and the Reserve for Financial and Economic Certainty falls below the City Council policy designated level, all excess Unassigned fund balance in future years shall first be used to replenish the Reserve for Financial and Economic Uncertainty until it reaches the policy designated level. The City Council shall replenish the Reserve for Financial and Economic Uncertainty prior to expending unassigned fund balance for other purposes. E. Reserve for Compensable Accrued Unused Vacation and Sick Leave The City will maintain a Reserve for Compensable Accrued Unused Vacation and Sick Leave based on estimated long‐term liabilities on June 30 of each fiscal year. F. Reserve for Other Post-Employment Benefits The City will maintain a Reserve for Other Post-Employment Benefits (OPEB) equal to 50% of the OPEB liability on June 30 of each fiscal year. G. Reserve for Unfunded Pension Liability The City will fund a Reserve for Unfunded Pension Liability, in the form of a Section 115 Pension Trust. The City will maintain a $2 million target in this reserve; any excess funds will be considered as part of the annual budget process. If the City’s Unfunded Pension Liability is or becomes fully funded, as part of the annual budget process, the City will consider drawing down the Section 115 Pension Trust funds below the $2 million target for authorized pension expenditures. H. Reserve for Infrastructure Replacement and Deferred Maintenance The City will maintain a Reserve for Infrastructure Replacement and Deferred Maintenance. After allocating General Fund balance to the Reserve for Financial and Economic Uncertainty and City Council designated projects and purposes, any remaining fund balance shall be apportioned to the Reserve for Infrastructure Replacement and Deferred Maintenance. I. City Council Designation of Reserves The City Council may designate portions of General Fund unreserved fund balance for future capital projects, continuing or carry‐over appropriations from FINANCIAL RESERVES POLICY 2 of 3 COUNCIL POLICY ADOPTED 6/4/2024 125