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,- RIQEN�HILLS MEMORANDUM DATE: June 22,2012 TO: Honorable Mayor and City Council Members Patrick Klaers, City Administrator FROM: Sue Iverson, Director of Finance and Administrative Services SUBJECT: 2013 — 2017 Capital Improvement Plan (CIP) Estimated Fund Balances At last Monday's worksession, an incorrect copy of the "Sources and Uses of Funds" (Blue Sheets) were included in your book. Attached is a corrected copy of this report. I apologize for not being at the meeting and the confusion, as I instructed Kyle to put in the fund balances and estimates for operating revenues and expenditures, but did not instruct him to use "cash" balances for the enterprise funds (Water, Sewer, and Surface Water Management). Governmental funds carry only "current resources" so their balances are primarily "cash balances". Enterprise funds are "full accrual" accounting, so they carry all costs including "fixed assets" and depreciation. This means that the fund balances that were reflected in the report were incorrect for the all of the enterprise funds as the balances included all assets, not just cash. I have run preliminary numbers and estimates, but they are just rough estimates at this time as we have not gone through the entire budget process yet. The numbers calculated for the beginning balances for 2013 are actual 2011 balances with the 2012 budget estimates for revenues and expenditures included. There are a few assumptions that I have built into these numbers that we will talk with the council about at the July worksession. One of these includes a transfer of$188,893 from the PIR fund to the Park fund to cover the remaining expenditures from the Safe Routes to School and Elmer L. Anderson trail project. While we used Park dedication fees and grants, there remains costs that we need to cover from the PIR fund. Another was a transfer from the General fund to the EDA Operating fund of$124,955. This is the transfer of the Presbyterian Homes Conduit Debt Fee that we have talked about in the past, but have not officially decided to transfer yet. The deficit in the Equipment, Building & Replacement fund will be addressed by transfers built into the operating budget and will recover, but these transfer amounts will be addressed during the budgeting process and will change as we analyze the actual City Council Meeting P:\Finance\Finance Director\2013 Budget\CIP\2013 CIP Preliminary-Follow-up Memo.docx Page 1 of 2