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STAFF REPORT <br />TO:Mayor Fisher and Members of City Council <br />FROM:Sam Magureanu, Finance Director <br />DATE:September 10, 2025 <br />RE:General Fund Balance Transfer to the General Capital Improvement Fund <br />ACTION TO BE CONSIDERED: <br />Motion to approve a transfer of $750,000 from the General Fund 100 to the General Capital <br />Improvement Fund 400. <br />BACKGROUND: <br />The General Fund is used to account for and report all financial resources that are not required <br />to be reflected in another fund. <br />According to the City’s Finance Policy, the unassigned fund balance for the General Fund <br />shall be between 42.5% and 65% of the subsequent year’s budget. Since a significant source of <br />revenue in the General Fund comes from property taxes, maintaining an adequate unassigned <br />fund balance ensures that sufficient resources are available to fund basic City functions <br />between the property tax settlements that are received in July and December. The State <br />Auditor recommends municipalities carry a fund balance of 35% to 50%. <br />If the unassigned fund balance rises above or falls below the desired range at year-end, the <br />City Administrator and/or Finance Director shall report such amounts to the City Council as <br />soon as practicable after the end of the fiscal year. Should the actual amount of unassigned <br />fund balance fall below the desired range, the City shall create a plan to restore the appropriate <br />levels. Should the actual amounts of unassigned fund balance rise above the desired range; <br />excess funds will be transferred to the General Capital Improvement Fund (Fund 400). <br />At the end of 2024, the Unassigned Fund Balance for the General Fund was $4,374,339 or <br />76.25% of the 2025 General Fund budgeted expenditures. <br />STAFF RECOMMENDATION: <br />Since the unassigned fund balance at the end of 2024 was above the 65% maximum policy <br />threshold, city staff recommends a one-time transfer in the amount of $750,000 to the General <br />Capital Improvement fund 400. After the transfer, the General fund balance is estimated to go <br />down to approximately 62%. <br />Not only is this transfer triggered by our Finance policy, but after careful analysis, it is <br />considered essential to continue funding the capital needs in the General Capital Improvement <br />Fund 400.