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Regular City Council Meeting Monday,June 16, 2014 Page 15 Other Reserves Mayor Roe noted that the 2013 annual financial report reviewed the current re- serve policy goal of 35%-45% for the General Fund based on its annual operating budget. With Councilmember Etten recognizing that the reserve percentage was 43%, Mayor Roe addressed the unrestricted side was above that at the 45% level, and whether the City Council chose to reduce that level some but remain within the 40% target goal. Mayor Roe stated that this would be one of his suggestions to consider using up to an additional $75,000 in General Fund reserves toward the 2015 levy. Councilmember Willmus noted that, during budget discussions held in December of 2013, he had asked Mr. Miller for his forecast for General Fund growth in 2014, and he anticipated an increase of$50,000, but in actuality, was approaching $200,000, minus the funds used for emergency tree and storm damage. Coun- cilmember Willmus questioned that factored into such a large discrepancy in those projections; noting that the year-end 2012 to year-end 2013 reserves in- creased by almost$198,000. Mr. Miller clarified that the General Fund declined by $350,000. Mr. Miller fur- ther clarified that the City Council was looking at two different things, only one of which was cash reserves. Mr. Miller advised that he had been basing his pro- jections on what happened and what would happen in operations, and he would need more specifics to address how and why there more cash reserves than antici- pated. In his April 4, 2014 memorandum, Mr. Miller noted the General Fund tar- get level of 43% reserves, with a $494,000 plus excess reserve, with the General Fund calling for $346,000 in reserves, as well as Park & Recreation reserves, which could also decline before year-end 2014 as well, opining that the natural re- serve level would decline in 2014. In the April 2014 memorandum from Mr. Miller, Mayor Roe clarified that need for the City Council to understand the 2014 budget levels versus 2013 reserves, noting that his 45% calculation was based on 2013 reserves, reconciled at year- end 2013. However, over that year, Mayor Roe noted a higher than 40% target, using $269,000 of that from 2013 that remained in savings, and that left about $75,000 which could be applied to the 2015 levy. Mr. Miller noted that as the General Fund increased, the funding percentage would decline accordingly. Councilmember Etten noted that Information Technology (IT) reserves increased dramatically over that same year's period, and questioned if that was a one-time spike or if it would continue.