City Council Agenda and Packet 2014 06 24 SP

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Please note that all these assumptions and targets are simply a "place to start" the 2015 budget process and will be revised numerous times over the next five months as we get updated information on the local economy and building projects. Fund Forecasts Using the initial assumptions and targets shown above, coupled with the recommended C -I -P, we have developed preliminary five -year financial plans for all the funds containing capital projects. The remainder of this transmittal letter summarizes the projected revenue, expenditures, and fund balances for each of these funds. These fund projections will be continuously updated as we proceed through the 2015 budget process. General Fund and Capital Projects Fund The Capital Projects Fund was created to account for the additional one - percent (1 %) sales tax approved by voters and effective July 1, 1989. Using this portion of the sales tax, the Capital Projects Fund has typically financed various capital improvements including street resurfacing and reconstruction, sidewalks, park improvements, traffic improvements and similar items. The Capital Projects Fund also accounts for that portion of the salaries and benefits of staff that can appropriately be allocated to capital projects. Another important revenue source for the Capital Projects Fund is the transfer of impact fees from the Impact Fee Fund. We transferred nearly $2.4 million from 2008 through 2013. We project another $400,000 to be transferred in 2014 and $1.6 million from 2015 through 2019. It is important to note that the assumptions on building - related revenue (primarily building use tax. impact fees. and tap fees) are a key element of the financial projections for the Capital Projects Fund. the Open Space & Parks Fund. and the Water and Wastewater Utility Funds. Recall that in 2012, Council approved a $2 million one -time transfer from the General Fund to the Capital Projects Fund. The Council approved a $5 million one -time transfer from the General Fund to the Capital Projects Fund for 2014. In order to fund the additional amount of capital projects recommended in the C -I -P, I also recommend an additional $1.1 million transfer from the General Fund to the Capital Projects Fund between in 2015. We incorporated all these proposed transfers into transactions affecting each fund and we applied the assumptions and targets discussed above (as well as many others) to generate five -year projections of revenue, expenditures, and reserves for each fund. The following line graph shows a fourteen -year history, current year estimate, and a five -year projection of revenue, expenditures, and fund balances for the General Fund. Graphs for the other funds are included elsewhere in this transmittal letter. VI 11