Discussion:
Each year the City's General Fund is reviewed as part of the closing process as we near the fieldwork portion of our annual audit. Since I didn't clarify in the recent revision to the fund balance policy as to its effective date, I am pegging the 2018 General Fund, fund balance to the previous policy which targets 40 to 45 percent of expenditures. I am assuming this range is in relation to the 2019 expenditure budget and not the 2018 expenditure budget.
The General Fund has an estimated unassigned fund balance of $14,437,659 as of December 31, 2018. It is only estimated at this time because it is unaudited. The fieldwork portion of our audit begins on April 15. It is not anticipated that there will be any changes to the fund balance. Based on the policy of maintaining a 45 percent fund balance, the General Fund will end the year with a $2,187,0000 surplus.
In the past, any excess fund balance has been directed towards one-time events such as capital improvements, future debt service payments, etc. This year's request is no different. Staff is requesting General Fund transfers to the City Hall Construction Fund and the Capital Improvement Fund of $848,283.01 and $1,338,716.99, respectively.
As you may recall, the financing of city hall involved various transfers. Most transfers were one-time upfront transfers, but there is also long-term financing involving yearly transfers from the Building Internal Service Fund of $170,000 per year through 2024. This transfer will eliminate those remaining future transfers and close the fund in 2019.
The $1,338,716.99 transfer to the CIF will be used for future one-time capital projects that will be identified in the 2020-2024 Capital Improvement Plan (CIP).