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SUBJECT: FINANCIAL STATEMENTS <br />DATE: MARCH 21, 2022 PAGE 2 OF 4 <br />The focus of the meeting presentation will be on the preliminary ending fund balance (or <br />working capital) and how it compares to last year's final estimates and to the minimum <br />and targeted fund balances defined in the Financial Policies. <br />Staff will be present at the meeting to discuss each statement and answer questions. <br />Some of the more notable items from the statements are summarized below. <br />General Fund <br />The ending General Fund balance is projected to increase by approximately $1,160,000 <br />to $12,460,000. This is $2,380,000 greater than last year's estimate and is due to higher - <br />than -expected revenue and a turnback percentage of over 11 %. The term "turnback" <br />refers to a positive actual -to -budget variance. The turnback percentage refers to the <br />amount of unspent budget "turned back" to reserves. <br />The Financial Policies stipulate a targeted General Fund reserve equal to 25% of annual <br />operating expenditures. The preliminary calculation of targeted reserves equals <br />$5,130,000. <br />The projected ending fund balance is $7,330,000 greater than the target reserve amount. <br />The Financial Policies state: <br />The City Council will annually consider one-time transfers of excess reserves to <br />other funds for one-time uses. Examples include transfers to the Capital Projects <br />Fund to help fund specific capital projects or transfers to the Open Space & Parks <br />Fund for property acquisition reserves <br />Based on these preliminary statements, the City Council can begin discussions on one- <br />time uses of excess General Fund reserves. <br />Open Space & Parks Fund <br />The ending Open Space & Parks Fund balance is projected to increase by approximately <br />$580,000 to $3,810,000. This is $1,210,000 greater than last year's estimate and is due <br />to an operating turnback of nearly 10% and an unspent capital budget of $1,230,000 (70% <br />unspent). Staff anticipates most of this unspent capital budget will be re -appropriated for <br />2022 and later years. <br />The Financial Policies stipulate a minimum Open Space & Parks Fund reserve equal to <br />15% of annual operating expenditures. The preliminary calculation of minimum reserves <br />equals about $440,000. <br />CITY COUNCIL COMMUNICATION <br />E <br />