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Request for Adoption of the Strategic Allocation for Variance & Economic Resilience (S.A.V.E.R.) Reserve Policy
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Whereas, the City of Rochester Hills recognizes that construction market volatility and supply chain inflation pose significant risks to the timely completion of approved capital projects; and
Whereas, the Administration desires to establish a dedicated financial mechanism to mitigate these risks and ensure the continuity of the City’s Capital Improvement Plan without compromising the City’s General Fund operating reserves; and
Whereas, the proposed S.A.V.E.R. Reserve Policy capitalizes a "financial shock absorber" using only prior-year General Fund operating surpluses, ensuring no new tax dollars are required to fund this initiative; and
Whereas, the Policy establishes strict governance, including a "Payor of Last Resort" protocol and the requirement for City Council appropriation prior to the expenditure of any funds.
Now, Therefore, Be It Resolved:
1. The Strategic Allocation for Variance & Economic Resilience (S.A.V.E.R.) Reserve Policy, attached hereto as Exhibit A, is hereby ADOPTED.
2. The Chief Financial Officer is authorized to establish the S.A.V.E.R. Reserve as a "Committed" Fund Balance classification within the Capital Improvement Fund, with an initial Target Cap of $2,500,000.
3. Administration is authorized to implement the funding and usage procedures as defined within the Policy, subject to the continued legislative oversight of the City Council for all future appropriations.
4. S.A.V.E.R. account will be evaluated with the 2026 4th Quarter Budget Amendment to determine if it met its objectives and will come back to Council for renewal.