12-27-1989 Council Agenda - Laserfiche WebLink

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_i ty of Littla Clnd.'.A May 24, 1989 Page 4 ALLOCATED IN 1990 BUDGET 1. General Fund: o The CASH FLOW RESERVE and OTHER DEDICATED RESERVES (Items 1A and 18 above) are dedicated for specific purposes. The Cash Flow Reserve is necessary to allow the City to maintain positive cash balances prior to receipt of property taxes and local government aid. The other designated reserves are committed for specific future costs. Accordingly, these reserves should not be considered as available for expenditure purposes. o The GENERAL CONTINGENCY RESERVE (Item 1C above) has been established by the City Council at 15% of the annual operating budget and for a possible future municipal building. At the discretion of the City Council (and with the understanding that overall reserve balances will probably permanently decrease) this reserve could be rede- signated towards the Fire Station /City Hall project. o The UNDESIGNATED BALANCE (Item 1D above) has not been designated for any specific purpose. At the discretion of the City Council (and with the understanding that overall reserve balances will probably permanently decrease) this reserve (or a portion thereof) could be designated toward the Fire Station /City Hall project. o The GENERAL CONTINGENCY RESERVE and UNDESIGNATED BALANCE total $324,100 at December 31, 1988 and represent 34% of the total balance of the General Fund. Under today's State Legislative "climate" it will be extremely difficult to replace such reserves. Accordingly, it may not be prudent to expend the entire amount of these reserves. Rather the City may wish to consume only a portion of these reserves ($200,000 - $250,000) and leave the balance ($74,000 - $124,000) intact. 2. GENERAL CAPITAL IMPROVEMENT FUND: o The balances of the General Capital Improvement Fund represent monies previously set aside by the City Council for various capital improvements and /or equipment purchases. This balance totals $53,600 at December 31, 1988 and should probably be left as is to finance future capital equipment. Accordingly, this reserve should not be considered as available for the Fire Station /City Hall pro- ject. 3. STATE AID ROAD FUND: o The City's State Aid Road Fund has been in a deficit position for several years due primarily to underfunding of several MSA projects. During 1986, 1988 and 1989 (Budget) the City has /will transfer $146,200 from the General Fund to partially finance such deficits. However, the City's Storm Sewer Construction Program is near comple- tion and is projected to result in a $241,000 surplus balance. Such balance should be designated as excess MSA monies to avoid Federal arbitrage problems related to unexpended bond proceeds and trans - fered to the City's State Aid Road Fund to finance other MSA pro- ject deficits. Should the City Council approve this course of action, the State Aid Roads Fund will have excess reserve balances Page 88