Financial Policies

Reserve Policy

The City’s reserve policy is to maintain a General Fund Reserve equal to not less than 50% of projected General Fund Expenditures + Fire Fund Transfers + Pension Related Debt Service Payments. The goal of the policy is to have sufficient funds to continue to operate for six months in the event of an external shock.

Investment Policy

The City invests its reserve funds and current-year operating balances in a manner that prioritizes safety, liquidity, and yield. All our investments are very safe and consistent with Government Code Sections 53600 to 53610. The City maintains a small balance with our FDIC-insured banking partner, with all remaining funds invested through LAIF and CalTRUST.

Pension Funding Policy

The City’s pension funding policy aims to have assets to cover 100% of accrued pension liabilities valued at a prudential discount rate by 2040. Each year, we set aside funds into a Section 115 Trust to meet this goal, above and beyond our required payments to CalPERS. The current assumed discount rate is 5.8% versus a CalPERS rate of 6.8%.

To learn more about the policy, please click here.

To view the latest pension funding review, please click here.

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