City Council Minutes 2018 09 17 - Laserfiche WebLink

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City Council Meeting Minutes September 17, 2018 Page 3 of 11 1) Creation of a new recreation fund for Recreation Center and Memory Square Pool revenues and expenditures. The hope is to set up a capital asset renewal and replacement reserve that will be restricted to the Recreation and Memory Square Pool assets. To do this we will remove the revenue and expenditures for recreation center and pool out of the General Fund. In the past, the General Fund has covered the deficit for those areas at about 30% of the operating expenditures for the Recreation center and Pool. By creating its own fund the General Fund support will become an inter -fund transfer to the new fund. The capital outlay proposed for the Recreation Center and Memory Square Pool will remain in the Capital Projects fund. Once the Finance Committee is done with their review of the capital assets we may reclassify those assets to the recreation fund and then have an additional transfer from either the General Fund or the Capital Projects Fund. 2) Changes to the golf course fund are needed as it is apparent it may not be able to fund its own operations and it cannot fund its capital needs. To give it the resources it needs to compete with other golf courses we are proposing to remove the capital from the Golf Course Fund and provide an operating support transfer from the General Fund. Director Watson reviewed the revenue projections noting the sales tax, consumer use tax, auto use tax, and building materials use tax are all affected by the new recreation center sales tax rate so the increases are 4.3% for that. Based upon discussions in August, staff has reduced the sales tax revenue assumption from 4% to 3%. He noted the mill levy will stay steady. Director Watson reviewed expenditure projections noting the 5% expenditure growth for merit increases and market increase for employees and new FTEs. However there are no specific FTEs in the later years. He reviewed proposed inter -fund transfers from the General Fund to the Open Space & Parks Fund and the Cemetery Fund which are the historic transfers we have made and now there are two more transfers for the Recreation Fund and Golf Fund. The General Fund is now going to have four recurring transfers to other funds for operations. If the General Fund comes under fiscal stress so will those funds. He noted the first transfer to the Recreation and Golf Funds are higher because it sets up the minimum fund balances for each fund. He reviewed the long-term financial plan noting the General Fund minimum fund balance is met and increasing above the minimum. He noted there are deficits in the fund in 2022-2024 and later so that will need to be monitored. Open Space & Parks Fund shows it approaching the minimum fund balance in 2024 but he noted without the transfer from the General Fund the Open Space & Parks Fund would not be able to sustain itself. He noted the Capital Project Fund doesn't have a set minimum balance. Staff wanted to leave money in the out years for the fund to allow flexibility in spending. He noted the Utility Fund has healthy reserves.