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are growing, there is a need for a continued and growing General Fund subsidy, unless the
<br />assessments are increased or other revenue sources identified. Faced with only a dwindling fund
<br />balance to draw upon, staff has included as part of the midyear update of FY05, a transfer of
<br />$100,000 tO subsidize the operations of this Fund. This is not an unexpected event, as the potential
<br />need was identified in the last two-year budget. Furthermore, similar transfers are included in the
<br />upcoming FY06/FY07 operating budget.
<br />
<br />General Fund Reserves
<br />
<br />With the changes that staff is recommending to the General Fund FY05 Budget, the ending fund
<br />balance is projected to be $14.95 million. Actual Beginning Reserves, budget adoption and
<br />amendments to date, and recommended midyear changes are shown in the table below. The
<br />recommended amendments include the use of carryover funds as planned at the end of FY04 to
<br />partially offset PERS increases ($300,000) and to fund Public Works inspection services
<br />($500,000) provided in FY05 that were paid for in the last few months of FY04.
<br />
<br /> Projected General Fund Reserves 2004-05
<br />
<br /> Actual Adopted Budget Recommended Adjusted
<br /> Be~innimt &Amendments Amendments Ending
<br />
<br /> Reserve for Econ Uncertainties $7,800,000 0 10,000 $7,810,000
<br /> Reserve for Carryovers 5,247,704 (4,040,905) (806,799) 400,000
<br /> Reserve for Inventory 44,607 0 0 44,607
<br /> Temporary Recession Reserve 5,100,000 0 0 5,100,000
<br /> Capital Projects Reserve 1,000,000 0 600,000 1,600,000
<br />
<br /> Total $19,192,311 ($2,661,108) $(196,799) $14,954,607
<br />
<br />Capital Project Reserve Transfer in FY06 to Increase Golf General Fund Debt/Cash Flow Reserve
<br />
<br />Due to the delayed opening of the golf course to late this fall, the first year of full debt service will
<br />need to be paid largely (if not completely) from a $1.6 million Golf General Fund Reserve already
<br />set aside for future uncertainties. The proposed FY06 budget provides for this reserve to be
<br />backfilled in a like amount with one-time monies from the Capital Project Reserve. Besides
<br />meeting the need for a cash flow reserve, this action also provides a layer of protection to the rest
<br />of the budget and CIP from potential future impacts, such as any debt service not met from golf
<br />operating revenues. No matter how well or how poorly the course performs financially, these
<br />funds will ensure the debt service can be paid. Certainly the hope would be that as few funds as
<br />possible would be drawn from this reserve in the coming two years, so that it can be kept intact as a
<br />future layer of protection for the General Fund and CIP. This transfer also provides initial cash
<br />flow dollars, as needed by most start up companies. The proposed reserve is similar to debt service
<br />and cash flow reserves maintained for the Sewer and Water Funds.
<br />
<br />While the start up of the golf course has raised many concerns about the General Fund's
<br />involvement, it should be pointed out that the City also subsidized the Water Fund initially
<br />
<br />SR 05:166 Page 6
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