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Cemetery District of the Redwoods Reserve Policy

Purpose

Cemetery District of the Redwoods (the District) shall maintain reserve funds. This policy establishes the level of reserves necessary for maintaining the District's credit worthiness and for adequately providing for:

  • Funding infrastructure replacement.
  • Economic uncertainties and other financial hardships.
  • Loss of significant revenue sources such as property tax receipts.
  • Local disasters or catastrophic events.
  • Future debt or capital obligations.
  • Cash flow requirements.
  • Unfunded mandates including costly regulatory requirements.

Policy

Operating Reserves

The minimum amount of operating reserves will equal two months of operating expenses. There is no maximum operating reserves limitation.

Capital Reserves

Capital reserves will be accumulated to fund infrastructure projects. Currently, there is no official Ten-Year Forecast. A key objective for accumulating capital reserves is to minimize external borrowing and interest expense. The minimum amount of capital reserves will equal one year's capital spending. The maximum amount of capital reserves is not limited.

Self-Insurance Reserves

 We do not have a current annual health insurance expense budget.

Rate Stabilization Fund

We do not have a Rate Stabilization Fund.

Procedure for Using Reserve Funds

Operating and Self-Insurance Reserves

Operating reserves can not be used at any time to meet cash flow requirements of District operations. Authority to use the funds only occurs when budgeted amounts are not available and require a letter stating such need, signed by the board of directors and submitted to the County of Mendocino for authorization.

Capital Reserves

Capital Reserves are not shown as a budgeted asset and can only be accessed through stringent oversight by the Board of Supervisors of the County of Mendocino, California.

Rate Stabilization Fund

Our District has no Rate Stabilization Funds.

Procedure for Monitoring Reserve Levels

The Board of Directors as a whole shall perform a reserve analysis upon the occurrence of the following events:

  • Deliberation of the annual budget;
  • Deliberation of a service charge rate increase;
  • When a major change in conditions threatens the reserve levels established.

If the analysis indicates projected or actual reserve levels falling 10% below or above the levels outlined in this policy, at least one of the following actions shall be included with the analysis:

  • An explanation of why the reserve levels are not at the targeted level, and/ or
  • An identified course of action to bring reserve levels within the minimum and maximum levels prescribed.