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SUBJECT: FINANCIAL STATEMENTS <br />DATE: MARCH 21, 2022 PAGE 3 OF 4 <br />The projected ending fund balance is $3,370,000 greater than the minimum reserve <br />amount. Historically, the excess reserves in the Open Space & Parks Fund have been <br />retained as reserves for property acquisition. <br />Recreation Fund <br />The ending Recreation Fund balance is projected to increase by approximately $770,000 <br />to $2,140,000. This is $560,000 greater than last year's estimate and is due to higher - <br />than -expected revenue and an operating turnback over 8% <br />The Financial Policies stipulate a minimum Recreation Fund reserve equal to 15% of <br />annual operating expenditures. The preliminary calculation of minimum reserves equals <br />about $600,000. The Financial Policies also require a Capital Asset Renewal and <br />Replacement reserve. The most recent calculation of this reserve equals $1,420,000. <br />Therefore, the total minimum reserve is recommended at $2,020,000. <br />Capital Projects Fund <br />The ending Capital Projects Fund balance is projected to increase by approximately <br />$24,000 to $6,700,000. This is $6,600,000 greater than last year's estimate and is due <br />to an unspent capital budget of $7,800,000 (48% unspent). Staff anticipates most of this <br />unspent capital budget will be re -appropriated for 2022 and later years. <br />The Financial Policies do not require minimum reserves for the Capital Project Fund. <br />Water Utility Fund <br />The ending working capital for the Water Utility Fund is projected to decline by <br />approximately $1,100,000 to $17,700,000. This is only $74,000 less than last year's <br />estimate. <br />Please note that the projected sales of water rights ($5,400,000) has been delayed, the <br />operational turnback is projected at a negative 1 %, and the unspent capital budget is <br />projected at $5,900,000 (51 % unspent). Staff anticipates most of this unspent capital <br />budget will be re -appropriated for 2022 and later years. <br />The Financial Policies stipulate a minimum Combined Utility Fund reserve equal to 25% <br />of annual operating expenditures. The preliminary calculation of minimum reserves for <br />the Water Utility Fund equals about $1,190,000. The projected ending working capital is <br />$16,600,000 greater than the minimum reserve amount. <br />CITY COUNCIL COMMUNICATION <br />E <br />