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/ e a1n th®n ilia e DATE : APPROVAL : January 12, 1987 T O : Mayor and Councilmembers J FROM : David M. Childs, City Manager I T EM : END OF YEAR TRANSFER STAFF RECOMMENDATION: Recommend approval of the total transfer from the Liquor Fund for 1986 be reduced to $250,000 (a $50,000 reduction) . COUNCIL ACTION: By motion, approve Resolution 87-007. BACKGROUND: As you will note, the 3rd Quarter Report from the liquor operation shows a net profit through September of about $150,000. This is lower than earlier projections due to increased insurance costs, increased rental costs and the spreading of administrative overhead costs due to the closing of the Stonehouse off-sale in January. The 1986 City budget projected a transfer of $300,000 from the Liquor Fund to the General Fund., Since the Liquor Fund will have net profits in 1986 substantially below that amount, it is advisable not to transfer the full $300,000 if the General Fund does not need the dollars to balance. Expenditures for 1986 in the General Fund will be below budget in spite of the fact that actual insurance costs were well above the projections we had made in the summer of 1985. Revenues in the General Fund have been generally on target with permit fees about $40,000 above projections and miscellaneous reserves about $20-25,000 below projections. Approval of Resolution 87-007 will allow the General Fund to be in balance as of December 31, 1986 and will allow an extra $50,000 in operating funds to remain in the Liquor Fund. We have taken more from the Liquor Fund than they have made for the past couple of years, and .this of course cannot be done indefinitely. The consequence of this action on the General Fund is that the fund balance will rise by $50,000 less than it otherwise might have, but to jeopardize the ability of the Liquor Department to continue to operate would certainly have a more far-reaching impact. 1 cjk:1 .13.87