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<br />REVOLVING LOAN FUNDS <br />The City has two Revolving Loans Funds, one for housing and one for downtown economic <br />development. Staff has removed these two Funds from the Operating Budget presentation <br />because the Fund Balances recorded in accordance with accounting rules are not reflective of <br />resources available to make new loans. For budget purposes, the cash balances in these Funds <br />provide a more meaningful number. Therefore, staff has prepared a separate accounting <br />presentation for these two Funds in Appendix D. <br />DESIGNATION OF FUND BALANCES <br />As a final step in closing the 2004-05 books, staff is recommending that the City Council fully <br />appropriate and make specific designations for uses of General Fund Reserves, as was <br />previously discussed. In addition, staff recommends that the fund balances in all other Funds be <br />fully appropriated and designated as contingency reserves for existing and future, known and <br />unknown obligations. With recent changes in governmental accounting rules (GASB 34), the <br />City will no longer be able to reflect internal reservations or designations of fund balance in its <br />financial statements. However, to facilitate compliance with long-term financial goals in the <br />City's General Plan, it is still important to make these designations. <br />SR 05:300 17 <br />