Cedar City's new reserve policy: separate targets by fund, and two descriptions of the 25% floor

Cedar City's finance director brought a fund balance and reserve policy to a City Council work meeting on Sept. 16, 2026. The policy text sets separate targets for the general fund, the capital projects fund and the city's enterprise funds. ^[1]

The targets

The general fund is to hold reserves of "no less than 25% of General Fund 'Total Revenues' for the current fiscal period." The policy says Utah law "limits the accumulation of fund balance in the city General Fund to no more than 35% of total General Fund revenues." ^[1]

The capital projects fund target is no less than 50% of the average of the last 10 fiscal years' total capital projects fund expenditures. ^[1]

Each enterprise fund is to hold unrestricted net position of no less than 180 days of total operating expenses, with a goal of an additional 100% of the average of the last 10 years' capital expenses. ^[1]

If reserves fall below target, the policy requires a restoration plan with the annual budget: within three fiscal years for the general fund and five for the capital and enterprise funds. The finance director must report fund balance levels to the council at least annually. ^[1][2]

Two descriptions of the floor

The Sept. 16 staff report describes a "minimum unassigned General Fund balance equal to 25% of the subsequent fiscal year's General Fund operating expenditures," and says that represents about three months of operating expenditures. The policy text uses current-period total revenues instead. ^[1]

The policy in the Sept. 23 packet uses the total-revenues basis. That packet includes no staff report for the item. ^[2]

The votes

At the Sept. 16 work meeting, according to draft minutes, Councilmember Carter Wilkey asked about the 25% and 35% thresholds. Finance Director Terri Marsh said 25% is the city's minimum, 35% is the state maximum, and between the two the council decides whether to keep or transfer funds. Galan asked that the mayor be part of any reserve recovery plan. ^[3]

The Sept. 23 version assigns recovery planning to the mayor, the city manager and the finance director together. ^[2]

Draft minutes of the Sept. 23 meeting record Councilmember Robert Cox moving to adopt the policy and Wilkey seconding, with a 4-0 vote; Galan was absent. Those minutes are marked draft and are on the Oct. 14 consent agenda for approval. ^[3]