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BACKGROUND Annually, staff presents the year-end financial report for the Capital Improvement Program (Report) to Council for approval. The Report summarizes the actual results of the financial activities for the CIP Budget, details changes in budget amendments or adjustments in year-end balances and recognizes budget carryovers to the following year'. The City's Comprehensive Annual Financial Report (CAFR) is still in progress; therefore, the financial information included in this Report is unaudited. The audited information will be reflected in the CAFR and will be presented to Council once the City's independent auditor has issued its opinion on the CAFR and the Audit Committee has reviewed it. This is expected to occur in January 2019. If there are any differences in the financial information presented in this report and the CAFR as a result of the audit, those changes will be highlighted for the Council at the time the CAFR is presented to the Council for acceptance in January or February of 2019. DISCUSSION This Report presents the status of the CIP as of June 30, 2018. It compares actual revenues and expenditures to the projections for the year and recommends Council approval of certain increases, decreases or transfers of funds between projects and the carryover of project funds from FY 2017/18 to FY 2018/19. Sewer CIP Funds Table 1A summarizes the FY 2017/18 activity for the Sewer CIP Funds. The Amended Budget is the original budget plus all budget amendments approved by Council through June 30, 2018. The Adjusted Budget includes the recommended year-end budget amendments brought forth in this Report. Actual revenues exceeded the adjusted budget by $142,685, which is primarily due to interest earnings on the fund balance exceeding the budget. The actual expenditures were less than the adjusted budget by $10.1 million mainly due to budgeted projects not completed during the fiscal year, the majority ($6.8 million) of which have been carried forward to the FY 2018/19 as presented in Table 1 B. During the year-end review, staff returned unused budget from closed projects to fund balance. Staff is recommending through this Report that Council approve additional budget amendments totaling ($1,000) as follows: • Increase in revenue budget of$1,305 to account for additional interest earnings on developer contributions. • Increase in expenditure budget of$2,305 to account for total interest earnings received but not budgeted in FY 2017/18. ' Staff carried forward FY 2017/18 CIP project budgets for projects that were still in progress in July of 2018 based on estimates of unspent project balances. The past practice of waiting to carry CIP budgets forward until after closing the fiscal year resulted in staff not having access to CIP budgets to charge contractual expenditures, which caused confusion and additional work. The City's financial policies do not require City Council approval to carryforward CIP project budgets to subsequent fiscal years. Thus, starting with this CIP report, staff will identify which projects have been carried forward. 2