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SUBJECT: 2025/2026 BUDGET RETREAT <br />DATE: JULY 24, 2024 <br />The City's Reserve Policy for the Recreation Fund states, <br />PAGE 13 OF 16 <br />The minimum fund balance of the Recreation Fund shall be maintained at or <br />above 15% of current operating expenditures. For purpose of this policy, <br />operating expenditures are defined as all expenditures, excluding interfund <br />transfers and capital outlay. <br />In addition to maintaining an operating reserve, the Recreation Fund will also <br />maintain a capital asset renewal and replacement reserve. The purpose of this <br />reserve is to accumulate funds for the timely renewal and replacement of <br />Recreation Center and Memory Square Pool assets. The methodology for <br />calculating this reserve will be approved by the Finance Committee. <br />The City Council recognizes that the dedicated sales tax and user fee revenues <br />may not be sufficient and the Recreation Fund may also need to rely on annual <br />General Fund transfers. The annual General Fund transfer will be calculated by <br />taking the General Fund subsidy for the Recreation Center/Memory Square Pool <br />in 2017 ($986,300) and inflating that amount on an annual basis by the regional <br />Consumer Price Index for All Urban Consumers. The 2017 General Fund <br />subsidy level is the starting point for the calculation, since that is the last year <br />that the Recreation Center and Memory Square Pool were funded within the <br />General Fund. <br />In addition to the annual General Fund transfer towards the annual operating <br />costs, minimum fund balance requirements, and capital asset renewal and <br />replacement reserves, this policy also authorizes an annual transfer from the <br />Capital Projects Fund to the Recreation Fund in the amount of $125,000 for 2019 <br />and each year thereafter inflated on an annual basis by the regional Consumer <br />Price Index for All Urban Consumers. This transfer is restricted for capital outlay. <br />Capital Projects Fund <br />Incorporating the latest information, the following graph summarizes historical and <br />forward -looking projections of revenue, expenditures, and fund balances for the Capital <br />Projects Fund. <br />CITY COUNCIL COMMUNICATION <br />14 <br />