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Home My Public Portal AboutCC-106_Capital Reserve Fund Policy_Effective 08-03-22 City of Lebanon New Hampshire COUNCIL POLICY Capital Reserve Fund Policy Policy Number Effective Date Last Revision Page No. CC-106 06/20/2018 08/04/2021 Page 1 of 5 Approved by: City Council Section 1.0: Purpose To achieve and maintain capital reserve fund capacity and capability as a pay-go financing supplement or alternative to debt issuance. Section 2.0: Scope This Policy applies to all major operating funds of the City. Section 3.0: Definitions 1) Major Operating Funds – General Fund, Solid Waste Disposal Fund, Water Treatment and Distribution Fund, Sewage Collection and Disposal Fund and Municipal Airport Fund. 2) Pay-go Financing – is a method of using current revenues to pay for capital projects in place of or in addition to traditional debt financing. Resources are generally pooled to finance large projects. Capital reserve funds are an example of pooled funds. 3) Pay-use Financing – is debt financing. Section 4.0: Policy Detail To ensure a strong foundation for the financing and completion of capital projects, an important component of capital improvement planning is long-term financial planning for future infrastructure improvements and acquisitions including saving-up for projects where pay-go financing will be used. 1) It is the Policy of the City that annual contributions be made into capital reserves funds sufficient for infrastructure and equipment needs as identified and planned in connection with the annually adopted six-year Capital Improvement Program. 2) Capital Reserve Funds Associated with the City’s Major Operating Funds: a. General Fund (Tax Rate Supported): • Fire Department Equipment and Vehicles Capital Reserve Fund – established to aggregate resources for the acquisition of, and effecting capital repairs and maintenance to, Fire Department related equipment and City of Lebanon New Hampshire COUNCIL POLICY Capital Reserve Fund Policy Policy Number Effective Date Last Revision Page No. CC-106 06/20/2018 08/04/2021 Page 2 of 5 Approved by: City Council vehicles. The City Manager is named agent of the City to carry out the purpose of the Fund. • DPW Equipment and Vehicles Capital Reserve Fund – (December 15, 2010) established to aggregate resources for future capital needs related to Department of Public Works equipment and vehicle acquisition. The City Manager is named agent of the City to carry out the purpose of the Fund. • Recreation and Parks Improvements and Equipment Capital Reserve Fund – (December 17, 2014) established to aggregate resources to acquire, effect major repairs, maintenance and/or upgrades of related equipment and vehicles. (December 16, 2015) Purpose expanded to include related infrastructure and facility improvements; fund renamed Recreation and Parks Improvements and Equipment Capital Reserve Fund; the City Manager is named agent of the City to carry out the purpose of the fund. • Self Insurance Trust – established unknown. • Parking Facilities Repairs and Maintenance Capital Reserve Fund -- Contributions made contingent on source of financing (lease payment) continuing. (December 16, 2015) established to aggregate resources to effect repairs, maintenance and/or upgrades of infrastructure and facilities including the acquisition, installation and maintenance of related appurtenances. The City Manager is named agent of the City to carry out the purpose of the Fund. Background: Maintenance and repairs to be made from the Capital Reserve Fund. There is no budget. At some point establishing a Parking Fund (a special revenue fund where resources -- that is, revenues – and requirements – that is, expenditures – are segregated) may be warranted. That point seems to be in the future when other revenue sources are developed. • Police Department Equipment, Vehicles and Improvements Capital Reserve Fund – (December 20, 2017) established to aggregate resources to effect acquisitions, and capital repairs, maintenance and/or upgrades of Police Department related equipment, vehicles and facilities. The City Manager is named agent of the City to carry out the purpose of the fund. • Library Facilities Capital Reserve Fund – renamed from Property Acquisition Capital Reserve Fund (December 18, 2019). The purpose of the fund is to City of Lebanon New Hampshire COUNCIL POLICY Capital Reserve Fund Policy Policy Number Effective Date Last Revision Page No. CC-106 06/20/2018 08/04/2021 Page 3 of 5 Approved by: City Council “acquire property, construct new facilities, or renovate existing library facilities.” The City Manager is named agent of the City to carry out the purpose of the fund. • Dana House Capital Reserve Fund – (December 18, 2019) established to provide for the improvements needed to restore and maintain the historical integrity of the Dana House; and that the City Manager be named agent of the City to carry out the purpose of the fund. • Accrued Benefits Liability Expendable Trust Fund – (December 18, 2019) established to provide for the payment of accrued time owed to employees upon separation or retirement; and that the City Manager be named agent of the City to carry out the purpose of the fund. • Cemetery Maintenance & Preservation Trust Fund – (September 2, 2020) established for maintenance & preservation efforts (mostly related to monument maintenance & preservation). The fund is funded through the interest income derived from the Perpetual Care Trust Fund as well as fees for monument foundations and any private donations received. This fund is overseen by the City’s Trustee of Trust Funds with authority to expend granted to the Board of Cemetery Trustees. b. Solid Waste Disposal Fund (User Fee Supported): • Landfill Extended Long-Term Monitoring and Maintenance Entire Facility Capital Reserve Fund – established to aggregate resources to ensure that additions are made as needed for anticipated long-term monitoring and maintenance encompassing the entire landfill site including the unsecured (unlined), construction and demolition debris and secured (lined) landfills. Established as a City initiative, the expenditure of these funds does not require the knowledge and consent of the New Hampshire Department of Environmental Services. The City Manager is named agent of the City to carry out the purpose of the fund. • Landfill Closeout/Long-Term Monitoring and Maintenance Secured (Lined) Facility Capital Reserve Fund – Owners of municipal solid-waste landfills are required to provide financial assurance that they will meet their legal obligation to close, monitor, and properly maintain (30-year period) landfill sites once no longer in active use. This fund was mandated by the State and established to aggregate resources on an annual basis sufficient to City of Lebanon New Hampshire COUNCIL POLICY Capital Reserve Fund Policy Policy Number Effective Date Last Revision Page No. CC-106 06/20/2018 08/04/2021 Page 4 of 5 Approved by: City Council ensure that monthly additions are made with payments based on a per ton rate – determined annually by the City's engineers – applied to processed tonnage. Moneys set aside contemporaneously and cumulatively shall be used only for the purpose for which the Capital Reserve Fund was established which shall not be changed without the knowledge and consent of the New Hampshire Department of Environmental Services. • Landfill Equipment Capital Reserve Fund – established to aggregate resources for future capital needs related to landfill equipment and vehicle acquisition, repairs and maintenance. The City Manager is named agent of the City to carry out the purpose of the fund. • Landfill Improvements Capital Reserve Fund – established to aggregate resources for future capital needs related to landfill infrastructure and facilities improvements, repairs and maintenance. The City Manager is named agent of the City to carry out the purpose of the fund. • Accrued Benefits Liability Expendable Trust Fund – (December 18, 2019) established to provide for the payment of accrued time owed to employees upon separation or retirement; and that the City Manager be named agent of the City to carry out the purpose of the fund. c. Water Treatment and Distribution Fund (User Fee Supported): • Water Treatment and Distribution Improvements and Equipment Capital Reserve Fund – established to aggregate resources for future capital needs related to water treatment and distribution facilities, equipment (including vehicles) and infrastructure development, improvement and acquisition (including maintenance and repairs). The City Manager is named agent of the City to carry out the purpose of the fund. • Accrued Benefits Liability Expendable Trust Fund – (December 18, 2019) established to provide for the payment of accrued time owed to employees upon separation or retirement; and that the City Manager be named agent of the City to carry out the purpose of the fund. d. Sewage Collection and Disposal Fund (User Fee Supported) • Sewage Collection and Disposal Improvements and Equipment Capital Reserve Fund -- (December 18, 2007) established to aggregate resources for future capital needs related to sewage collection and disposal facilities, equipment and infrastructure development, improvement and acquisition. City of Lebanon New Hampshire COUNCIL POLICY Capital Reserve Fund Policy Policy Number Effective Date Last Revision Page No. CC-106 06/20/2018 08/04/2021 Page 5 of 5 Approved by: City Council City Manager named agent of the City to carry out the purpose of the fund. This Policy shall be reviewed annually by the City Council and revised as warranted. • Accrued Benefits Liability Expendable Trust Fund – (December 18, 2019) established to provide for the payment of accrued time owed to employees upon separation or retirement; and that the City Manager be named agent of the City to carry out the purpose of the fund. e. Airport • Accrued Benefits Liability Expendable Trust Fund – (December 18, 2019) established to provide for the payment of accrued time owed to employees upon separation or retirement; and that the City Manager be named agent of the City to carry out the purpose of the fund. 3) This policy shall be reviewed annually by the City Council and revised as warranted. Section 5.0: References (Charter/Code/State Statues) 1) NH RSA 34:1 Establishment of Reserves Authorized. 2) NH RSA 34:1-a Establishment of Non-Capital Reserves Authorized. Section 6.0: Policy & Procedure Revision History Section Revisions Date Original Adoption 6/20/18 Amendment 4.0 (2.a) Reviewed by Council; adoption not required 7/10/19 Amendment Reviewed by Council; adoption not required 7/15/20 Amendment Header Re-numbered policy to CC-106 4/30/21 Amendment 4.0 (2.a, b, c, d) Reviewed by Council; adoption required 8/04/21 Reviewed 8/03/22