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SUPPLEMENTAL MATERIAL <br />1 <br /> <br />Responses to City Council Agenda Items – February 17, 2026 <br /> <br />Regular Meeting <br /> <br />Agenda Item #5: Accept the FY 2025/26 Mid-Year Budget Update report including a <br />presentation on the General Fund forecast, and adopt a resolution approving FY <br />2025/26 budget amendments <br /> <br />1. I’d like to make sure I understand the current activity in the Rainy Day / Capital <br />Reserve account <br />a. From the 11/2025 report, we had that surplus, and I believe we were able <br />to fully restore the budgeted draw on the account by putting $3.08M back <br />into the account. Council discussed using these funds to offset / delay the <br />Draw on the FAS 115 account/fund ($1M in FY26, $2M in FY27). <br />A. Please see the response below in section 1b. <br />b. It appears we now are offsetting the FAS 115 draw, but not from the <br />$3.08M, as now FY26 operations are sufficient to cover it / stave off the <br />115 draw? <br />A. We are no longer needing to draw $1.00M from the Section 115 <br />Pension Trust Fund in FY 2025/26 based on the combination of two <br />actions: 1) the recommended mid-year adjustments to reduce the <br />overall General Fund expenditure budget by just over $0.57M, and 2 ) <br />increasing the transfer from the Capital Reserve Fund to the General <br />Fund by $0.50M, going from $1.00M in the adopted budget to the <br />$1.50M with the recommended mid-year adjustment. <br />With the Council-approved action at the November 18, 2025, meeting <br />to not transfer $3.08M from the Capital Reserve Fund to the General <br />Fund, the Capital Reserve Fund ended FY 2024/25 with $6.62M. With <br />the recommended $1.50M transfer, there will be $5.12M remaining in <br />the Capital Reserve Fund at the end of the current fiscal year. <br />c. It appears on Exhibit A that there is a $1M budget transfer on the Rainy <br />Day / Capital Reserve account (+ the $500k which was discussed in the <br />staff report). Can you help me understand what this $1M is? It appears <br />there are several potential areas for it, is it going to the Sewer Enterprise? <br />A. The adopted budgeted amount of $1.00M transfer from the Capital <br />Reserve Fund to the General Fund, which will become $1.50M based <br />on the recommended mid-year adjustment, is not necessarily <br />earmarked specifically for one or multiple funds, but it has been us ed