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BACKGROUND Staff regularly monitors expenditures, cautiously forecasts revenues, and makes recommendations to address changes as quickly as possible in order to maintain a balanced Budget. The Midyear Budget report helps staff address budget variances in a timely manner. DISCUSSION General Fund Overview As described below, staff recommends increasing revenue estimates by $2.8 million and increasing expenditure estimates by $1.4 million. As a result of these changes, staff currently anticipates the General Fund to have a $2.2 million surplus at the end FY 2017/18, an increase of$1.3 million from original estimates. Staff recommends to allocate that $2.2 million surplus as follows: Maintain General Fund Reserves equal to 22% of Operating Expenses $1,476,974 Prefund Pension Liabilities' 721,177 Total Allocated Surplus $2,198,151 Table 1. General Fund Overview FY 2017/18 Original Recommended Md-Year Budget Adjustments Budget Revenues $115,155,893 $2,807,607 $117,963,500 Net Transfers (6,384,591) 0 (6,384,591) Expenditures (107,938,638) (1,442,120) (109,380,758) Difference $832,664 $1,365,487 $2,198,151 General Fund Revenues - Table 2 identifies the total recommended revenue increases of$2.8 million based on revenues received to date. Those increases include: Property Taxes ($2 million), grants and LPFD strike team reimbursements ($383,644), Business License Taxes ($161,804), Interest Income ($135,000), Development Services Fees ($98,000), Sales Tax Safety ($40,000), and Franchise Fees ($20,550). ' Staff recommends that the$721,177 pension prefunding allocation be deposited into the Section 115 Pension Trust fund that staff is proposing to create through a separate item. Page 2 of 6