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BACKGROUND Annually staff presents the year-end financial report (Report) to Council for approval. The Report summarizes the actual results of the financial activities for the fiscal year and details changes in reserves and recommended budget amendments or adjustments. The City's Comprehensive Annual Financial Report (CAFR) is still in progress; therefore, the financial information included in this Report is based on unaudited figures. The audited information will be presented to City Council in the CAFR once the City's independent auditor has issued its opinion and the CAFR has been reviewed by the Audit Committee. All of this is expected to occur in January 2020. Any changes to the information presented in this Report as a result of the audit will be brought to Council's attention at the time the audit is presented to Council for acceptance in January or February of 2020. DISCUSSION The following discussion addresses the General Fund, Enterprise Funds, and Internal Services Funds. General Fund As shown in Table 1, in FY 2018/19 actual revenues received were greater than the Midyear budget by $3.3 million or 2.7 percent. The Midyear budget is the original budget plus all budget amendments approved by Council through June 30, 2019. Transfers In/Out (net transfers) were less than the Midyear budget by $277,512 and Expenditures were $2.2 million or 1.9 percent less than the Midyear budget. Overall, inflows of cash exceeded outflows of cash by $5.7 million'. A detailed explanation of these variances is included in Tables 2, 3, 4 and 5 in this Report. Table 1. General Fund Amended Budget to Actual Revenues, Expenditures & Transfers Revenues,Transfers and FY 2018/19 FY 2018/19 Expenditures Midyear Actual Variance Variance % Revenues $122,743,656 $126,031,456 $3,287,800 2.7% Net Transfers (9,884,925) (9,607,413) 277,512 -2.8% Expenditures (113,579,909) (111,414,636) 2,165,273 -1.9% Difference ($721,178) $5,009,408 $5,730,586 -794.6% Staff is recommending allocating the $5.7 million surplus as follows: Operating Reserve $1,790,292 CIP — Fire Station #3 1,970,147 Repair & Replacement Reserves 1,970,147 Total FY 2018/19 Surplus $5,730,586 1 The FY 2018/19 midyear deficit of$721,178 identified in Table 1 is a transfer out to the PERS Rate Stabilization fund that Council approved as part of the FY 2017/18 mid-year budget surplus and reflected in the FY 2018/19 midyear budget. The result was to reduce the FY 2018/19 midyear fund balance by $721,178. Excluding that S721.178. the City's General Fund has an operating surplus of$5,730,586. Page 2 of 11