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Attachment B Commissioner Bachhuber stated when the City uses two or three different ways to do things it is not transparent to the public or easy for the public to get involved and understand how their government is running. Chair Schroeder stated the Commissioner should look at considering taking the CIP out of the operating funds for the License Center, IT Fund, and other departments that might include CIP items in their operating budgets. These should be included in the CIP funds. Commissioner Zeller asked if the IT capital needs were listed in the master list of capital needs for the City. Finance Director Miller stated the IT CIP items are included in the master list but the funding comes out of the IT Fund rather than a separate CIP fund. The City had set this up in an attempt to capture fiscal operations for both the expenditures and revenues. Commissioner Zeller stated it would be possible to do and have the visibility of what is in the surplus balance, how much of it is operational carry forward that’s required for capital needs. Chair Schroeder shared comments submitted by Commissioner Harold: As noted in a prior meeting, a cash carry over fund should receive all surplus operating monies not restricted by law. This is contrary to the recommendation by staff, which indicated only general funds surplus be added. He also believes the use of this fund should allow for sufficient Council discretion with the primary purposes being bolstering deficient areas of the CIP and property tax relief. Commissioner Zeller stated he would recommend a different approach to these operating reserves. He would recommend they be taken into account during the budgeting process. The City should budget to the target reserve level as a matter of policy. The reserve would be a line item in the budget. The operating reserve is for carrying the City through the revenue cycles. The CIP is a separate issue. With this approach there would not be a cash carry over fund. Commissioner Bachhuber asked if all the CIP items would be n a separate fund. Commissioner Zeller stated the CIP would remain separate from the operating fund. Commissioner Bachhuber stated one thing that concerns him with managing to the target is this could create volatility in the tax levy year over year. Commissioner Zeller stated continually moving surplus funds to the CIP is not a sustainable funding source. If there are no surpluses then the CIP does not get funded. He foresees a lot discussion concerning the proposed future initiatives fund proposed by staff. Commissioner Bachhuber stated the operating levy should be just what the City needs to operate and there should not be large surpluses every year. Commissioner Hodder asked how maintenance would work in this scenario.