Target reserve levels are the amounts municipalities aim to maintain in various reserve funds to ensure adequate financial flexibility and security. Targets are typically expressed as percentages of operating budget, dollar amounts, or based on specific risks or planned expenditures. Reserve policies establish targets for different reserve types: operating reserves (often 5-15% of budget), capital reserves (based on asset replacement needs), and special purpose reserves (based on intended uses). Targets provide benchmarks for assessing reserve adequacy. Being below target indicates potential vulnerability; significantly above target suggests possible overtaxation. Council-approved reserve policies guide contributions, withdrawals, and target-setting. Credit rating agencies consider reserve levels when assessing municipal fiscal health.