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Mendocino LAFCo Reserve Policy

Purpose

Mendocino LAFCo (LAFCo) shall maintain reserve funds. Policy 5.1.5 establishes the level of reserves necessary for adequately providing for:

  • Unanticipated operating expenses.
  • Economic uncertainties and other financial hardships.
  • Cash flow requirements.
  • Unfunded mandates.

Policy 5.1.5

Reserves for Fiscal Stability, Cash Flow, and Contingencies

Mendocino LAFCo will strive to maintain reserves for fiscal stability, unforeseen operating or capital needs, cash flow requirements, revenue source stability from revenue shortfalls, and unanticipated legal fees. The reserves consist of an Operating Reserve of 25 percent of the annual operating budget and a Legal Reserve of $35,000 and are to be maintained in separate accounts.