City Council Meeting

Andrew Grosnicostaffequity of the local government or the entity is referred to as net position and so for that standpoint the primary government so the the governmental activities and the enterprise activities of the city reported total net position at June 30th 2024 of 121.4 million and that represented an increase of 6.3 million from the prior year the other basis of accounting is what you use more on a day-to-day basis in your governance it's sometimes referred to as the budgetary basis of accounting or the modified accrual basis of accounting and that only includes your near-term assets and liabilities, and under that basis, the residual or the equity retained earnings is referred to as fund balance. And so for the governmental funds, which is your general fund, your capital projects fund,

your special revenue funds, the total governmental fund fund balance at the year in June 30, 2024 was $73.4 million, and that represented an increase of $28.9 million from the prior year. Within the fund balance itself, you have different buckets of fund balance based on different levels of restriction. So there's some fund balance that's non-spendable, some that is restricted for certain purposes, committed or assigned, and then the residual is the unassigned fund balance. And at the year end of June 30, 2024, the general fund fund balance that was unassigned was $32.3 million. dollars. General fund revenues exceeded final budgeted amounts for FY24 by 11.3 million, and general fund expenditures were basically right on budget. They exceeded budget by $8,585.

Just have a couple of charts and graphs to go over. The first one is the change in net position, just showing the last four years of the overall city net position that you can see it's trended up from a little under $100 million to now over $115 million. And again, that's on the full accrual basis when taking into account all of your long-term assets and long-term liabilities. And then the general fund fund balance we just referenced, we mentioned fund balance on that modified accrual basis. And your general fund fund balance, you'll see the trend there. a couple years where fund balance had decreased in the general fund, and then this year it's up to $43.6 million. The next two charts are pie charts that both give a little breakdown

Lynn GuzmanstaffSo the top portion of this slide shows an estimate that was and the bottom half now incorporate audited financial information. On October 22nd, the estimated fund balance allocation to the budget stabilization fund was half a percent, which is $1.5 million. The general fund unassigned fund balance was 17.9%, which is $32.8 million. For the adopted financial policy, the general fund unassigned fund balance minimum is 15%. $27.5 million. Projected positive variance over the financial policy was 2.9%, $5.3 million. The aspirational targeted fund balance ratio is 22%, $40.3 million. Highlighted in yellow reflects the changes from what was presented on October 22nd. The fund balance allocation to the budget stabilization fund is 2.6% versus half a percent

and is $4.3 million. The FY24 general unassigned fund balance is 18%, $32.3 million, and the minimum per adopted financial policy is $27 million. Projected positive variance over financial policy is 3%, and the aspirational target The limited fund balance ratio is $40 million. This slide shows a screenshot of note one in the ACFER for the assigned and unassigned fund balance in the general fund. Highlighted in orange reflects the changes from what was presented on October 22nd. $4.3 million was allocated to the budget stabilization fund and the unassigned fund balance is $32.3 million. For the first time in six years, there is now a line item in the assigned fund balance for the budget stabilization fund.

JC MartinezstaffThank you. Mayor Council again, as presented during the October 22nd work session, summarize below are the staff's recommendation for the FY 2025 fall supplemental appropriations totaling $650,000 for all funds. The capital improvement program, also known as the CIP fund, will be receiving an additional $50,000 from the NVTA 30% and applied towards the transit development plan for Q. The net impact of the proposed general fund appropriation results in a reduction of $600,000 for the FY 2025 general fund balance. The proposed general fund supplemental appropriation is about 0.3% of the FY 2025 adopted general fund budget. Of listed there, $600,000 will be for the seven city manager work plan items

Melissa Shinaberryclerkcouncilmember Greenfield councilmember Ross aye councilmember Lim aye Councilmember Doyle Feingold. Aye. Councilmember Bates. Aye. Motion passed unanimously. The last public hearing is a public hearing and council action on a resolution for the reappropriation of general funds in the amount of $5 million within the approved FY 2025 budget. JC Martinez, Chief Financial Officer, will provide the staff report.

JC MartinezstaffThank you again. Mayor, council, the finance team is requesting a reappropriation of general funds currently appropriately appropriated in the FY 2025 approved budget, specifically a $5 million reduction of the general fund transfer to the capital improvement program fund, making the new transfer amount $7,136,540 versus $12,136,540. This revised transfer amount represents 4% of the budgeted general fund expenditures. When incorporating the city's use of annual debt service payments towards capital projects of $11,226,147, the total reinvestment in capital planning equipment equals 10.2%, well above the 5% financial policy. The reappropriated amount, again $5 million, will be allocated to the Economic Development

Sure. Council Member Lim, so the money and appropriated in FY25. I would be moving money from the transfer from the general fund to the CIP over to the EDO. I'm not requesting any additional funds to be reappropriated or appropriated for this cause.

So LimRight so for the money that we needed for CIP are we having to take on additional loans or transfer the money from the ones we're getting the loans from or does it I guess the general fund versus the debt ratio, does that change?

JC MartinezstaffThat's an excellent question, Council Member Lynn. It would impact the amount of what we would call pay-go funds from the general fund to the CIP. As listed here on the staff report, we were projecting to do about a 12 million contribution, basically cash fund from the general fund to the CIP. That amount is being reduced. we currently have about a 40% cash fund basis and a 60% debt issuance of that percentage would change ever so slightly at least in this fiscal year so we would be utilizing potentially more debt to cover those CIPs and less actual general fund transfer just

if i understand correctly council member ross um in your example when you say shifting money from the general fund to the cip it's still within the city and we're paying down debt that is going positively to our debt ratios in this instance money would be basically leaving the city but i think to the city manager's point the next section that we're going to get to with the agreement we would potentially be realizing that money back at a certain point potentially with some interest is not the right word but some type of additional premium on on that principle from a rating agency perspective five million dollars in the grand scheme of the city's finances and our total debt issuance is a very nominal amount so i don't see it negatively

Jon Stehle JrThank you, Mayor Reed. I move to introduce a resolution to reappropriate general funds within the approved FY 2025 budget as detailed on the attached list

me try that again I move to approve a resolution to reappropriate general funds within the approved 20 FY 2025 budget as detailed on the attached list

So Limyou know there's goes of saying it takes money to make money I get that but I just don't feel comfortable spending five million dollars of course yeah we are re appropriating it but when we talk about it does impact us as far as interest any changes are general funds versus debt ratio. So I will not be supporting this motion. Thank you.