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APPROVED BUDGET FISCAL YEAR 2022-2023

Change in Fund Balance Explanation

1. Debt Service Fund – Fund balance is projected to decrease by approximately 14%. This
decrease is expected with recent state legislative changes to the tax rate calculation
formula. Any excess revenues associated with the debt portion of the tax rate need to be
utilized in future years to ensure no cities do not build up large fund balances in their debt
service funds. This recent change requires the City to utilize a portion of reserves for debt
service and is not anticipated to create any future challenges fulfilling our annual debt service
obligations.

2. Special Projects Funds – This fund is utilized year over year to assist with cash funding of
priority projects. The fund may experience strong year over year changes associated with
any excess revenues from operating funds which are transferred into the special projects fund
at year end or with planned use of reserves for priority capital or community projects funded
on a cash or pay-go basis. The fund is estimated to experience a 16% decrease in fund
balance; however, this associated with planned projects to support capital investment
without issuing debt.

3. Bond/CIP Funds – The 77% decrease is associated with bond funds being expended in
accordance with their stated purposes and no immediate plans to issue additional debt.

4. Loss Reserve Fund – This fund accounts for the City’s self-insurance program for employer
provided health care benefits. Through the renegotiation of existing contracts we are
expecting to achieve additional carrier credits and RX rebates to help offset increased
costs. Additionally, the City has worked to increases contributions to help ensure this fund’s
financial help. The 16% increase is based upon budget and we expect to see future decreases
associated with changes in our stop loss coverage.

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