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currently preparing a Master Plan for the facility. The Master Plan will be presented to the Council in 2014/15FY. Internal Service Funds Internal Service Funds are used as a method to allocate certain internal costs to operating departments as a cost allocation tool. The City has eighteen Internal Service Funds. They include: • Risk Management (1) • Workers Compensation (2) • Employee Benefits (1) • Retiree Medical Reserve (2) • Public Art Acquisition & Maintenance (2) • Replacement& Renovation (10) In accordance with adopted financial policies and the General Plan, the City maintains ten Replacement and Renovation Funds. The purpose of these Funds is to provide ongoing replacement of City assets -- equipment, vehicles, street lights and traffic lights -- and to make major repairs and renovations to facilities, parks, medians, and city wide tree trimming in order to extend the lives of these assets. Adopted financial policies call for the establishment and maintenance of reserves including major maintenance and renovations of buildings, parks, and medians. This is accomplished by charging operating programs an annual charge pursuant to a 20 to 30 year funding plan based on the asset replacement cost and estimated life of the capital asset. A majority of the projected increase in the Internal Service Funds is due to the City increasing the annual charge to the departments for repair and replacement of the City's assets by $1 million to $3.5 million in 2014/15FY; continuing the City repayment of the PERS Side Fund for the Police Officers Group (currently outstanding in the amount of $5.4M). For the next six years (2019/20FY) the General Fund will be repaying the retiree medical reserve for the advance of these funds. Finally, the City will begin repaying the retiree medical reserve for the advance of funds to pay off the Golf Course COPs in 2014/15FY. The City borrowed $6.48 million in 2013 to fund the payoff of the Golf Course COPs. All Other Operating Funds Projected revenues and expenditures for all other Operating Funds, including Trust and Debt Service Funds, are contained in the body of the budget document. Attachments to Section I: A. FY 2014-15 Housing and Human Services Grant(HHSG) Funding Allocation B. FY 2014-15 Community Grant(CG) Funding Allocation 14