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City Of <br />Louisville <br />COLORADO • SINCE 1.878 <br />FINANCE COMMITTEE <br />COMMUNICATION <br />ITEM #2 <br />SUBJECT: RENEWAL & REPLACEMENT RESERVE CALCULATION FOR <br />RECREATION & SENIOR CENTER <br />DATE: JUNE 15, 2023 <br />PRESENTED BY: RYDER BAILEY, CPA, FINANCE DIRECTOR <br />KATHY MARTIN, SUPERINTENDENT OF RECREATION AND <br />SENIOR SERVICES <br />SUMMARY: <br />Section 2.5 Recreation Fund Reserves of the City's Financial Policies state: <br />"The minimum fund balance of the Recreation Fund shall be maintained at or above 15% <br />of current operating expenditures. For purpose of this policy, operating expenditures are <br />defined as all expenditures, excluding interfund transfers and capital outlay. <br />In addition to maintaining an operating reserve, the Recreation Fund will also maintain a <br />capital asset renewal and replacement reserve. The purpose of this reserve is to <br />accumulate funds for the timely renewal and replacement of Recreation Center and <br />Memory Square Pool assets. The methodology for calculating this reserve will be <br />approved by the Finance Committee." <br />The Finance Committee has developed a calculation methodology for the renewal and <br />replacement reserve. The attached worksheet summarizes the calculations using an <br />updated equipment listing/aging for 2023 and refreshed formulas. The attachment is very <br />difficult to read, staff will share the Excel version with the Committee during the meeting. <br />The highlighted bottom <br />Replacement Reserve: <br />• 2019 = $391,009 <br />• 2020 = $839,074 <br />• 2021 = $1,382,971 <br />• 2022 = $1,701,066 <br />• 2023 = $2,306,866 <br />• 2024 = $2,930,840 <br />• 2025 = $3,137,563 <br />• 2026 = $3,394,067 <br />• 2027 = $3,675,751 <br />• 2028 = $3,968,189 <br />line of the worksheet represents the Targeted Renewal & <br />FINANCE COMMITTEE COMMUNICATION <br />7/75 <br />