2019-2020 Biennial Operating & Capital Budget

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2. An initial fund balance transfer of $676,250. This sets an initial fund balance within the Recreation Fund roughly equal to 15% of operational expenditures. A formal reserve policy will be established in 2019. There is also a recurring Capital Projects Fund transfer to the Recreation Fund beginning in 2019. The 2019 transfer amount is $125,000. For 2020 through 2024, this transfer amount is inflated each year by the estimated regional Consumer Price Index. These operating and capital transfers result in a growing fund balance in the Recreation Fund, which is projected at approximately $2,500,000 at the end of 2024. This is very close to the projected combination of the capital asset renewal and replacement reserve ($1,850,000) and the 15% operating reserve ($740,000) at the end of 2024. Capital Projects Fund Incorporating the revenue assumptions, the operating expenditure targets, interfund transfer projections, and the Capital Improvements Plan into the long-term financial planning model results in the following graph, which summarizes a history and six -year projection of revenue, expenditures, and fund balances for the Capital Projects Fund. 16,000..000 14,000,000 1�000..000 10..000..000 $000..000 6..00131..000 4.ua9:1o K 2,000400 Capital Projects Fund IIIhillf-II 2008 2UQ9 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Revenue - Expenditures * Fund Balance Large fluctuations in revenue, expenditures, and fund balances within capital project funds are typical. The City does not have a formal reserve policy for its Capital Projects Fund. However, the City has historically attempted to maintain enough reserves to mitigate current and future risks (revenue shortfalls, unanticipated expenditures, etc.) 18