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Page 7 of 23
<br />policy requires a minimum reserve between 16.7 and 25.0 percent of operating
<br />expenses, with a target of 20.0 percent. The unrestricted General Fund reserve of
<br />$29.57 million equals 19.2 percent of the Mid-Term General Fund operating expenses.
<br />
<br />Table 5. General Fund Reserves
<br />
<br />
<br />Enterprise Funds
<br />Water Operations and Maintenance Fund
<br />As shown in Table 6 below, recommended changes to the Water Operations and
<br />Maintenance Fund include an increase of $4.28 million in revenues, an increase of net
<br />transfers by $0.42 million, and a decrease of $0.12 million in operating expenses. The
<br />result of these adjustments is an increase in net income by $5.24 million and an
<br />estimated ending fund balance of $11.51 million which equals 32.0 percent of the total
<br />FY 2024/25 operating expenses, which is 2.0 percent above the recommended
<br />minimum of 30.0 percent. The City’s reserve policy requires reserves to stay between
<br />30.0 and 40.0 percent with a target of 35.0 percent. The City Council approved a two-
<br />year rate increase at the November 7, 2023 meeting. Projected additional revenues
<br />based on these rate increases, combined with keeping the operating budget minimal,
<br />were critical in the City securing an AA rating from the S&P recently for the 2024 Water
<br />Revenue Bonds, which is scheduled to be issued in June 2024 to fund critical water
<br />infrastructure and capacity improvement projects. Obtaining a high rating positions the
<br />City to lower borrowing costs to fund major capital needs.
<br />
<br />Table 6. Water Operations and Maintenance Fund Overview
<br />
<br />
<br />Sewer Operations and Maintenance Fund
<br />As shown in Table 7 below, recommended changes to the Sewer Operations and
<br />Maintenance Fund include increasing revenues and expenditures by $0.86 million and
<br />$0.71 million, respectively. The result of this adjustment is an estimated ending fund
<br />FY 2023 FY 2024 FY 2024 FY 2025 FY 2025
<br />General Fund Ending Approved Projected Ending Recommendeded Projected Ending
<br />Fund Balance Fund Balance Adjustments Fund Balance Adjustments Fund Balance
<br />Unrestricted General Fund Reserve $29,559,876 $7,710 $29,567,586 $6,472 $29,574,058
<br />COVID Response & Recovery 399,150 (80,000) 319,150 (30,000) 289,150
<br />Crisis Response Program 400,000 (400,000) - - -
<br />Mobile Outreach Vehicle 280,000 (280,000) 280,000 (280,000) -
<br />Strategic Plan Implementation Reserve 800,000 (420,572) 379,428 - 379,428
<br />Emergency Reserve 500,000 - 500,000 - 500,000
<br />Restricted General Fund Reserve 18,725,569 - 18,725,569 - 18,725,569
<br />Total $50,664,595 ($1,172,862) $49,771,733 ($303,528) $49,468,205
<br />FY 2024 Adopted Recommended Mid-Term
<br />Water/Recycled Water (O&M) Modified Budget Budget Adjustments Budget
<br />Beginning Balance $7,372,000 $6,272,727 $6,272,727
<br />Revenues 34,501,564 37,757,041 $4,277,957 42,034,998
<br />Net Transfers (1,049,252) (375,622) (415,263) (790,885)
<br />Expenses
<br />Zone 7 Purchased Water (22,110,000) (23,310,000) - (23,310,000)
<br />All other expenses (12,441,585) (12,816,702) 124,436 (12,692,266)
<br />Total Expenses (34,551,585) (36,126,702) 124,436 (36,002,266)
<br />Net Income (1,099,273) 1,254,717 3,987,130 5,241,847
<br />Ending Balance $6,272,727 $7,527,444 $11,514,574
<br />FY 2025
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