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Attachment B Commissioner McRoberts stated each fund has an upper and lower excess threshold and if funds that are swept out are those that are over the upper threshold amount then there should not be instability or volatility in the fund because there is still an excess in the fund. Finance Director Miller asked where the ongoing funding for the capital needs for these funds would come from. Part of the reason for segregating some of these funds was for accountability. If the department knows they will need funds and they know that the decision to make the capital investment is so critical they do not want there to be a choice in doing it or not, they can have the item already funded. Commissioner McRoberts asked why the City would prioritize capital items if there were different capital funds for each department. Chair Schroeder stated the Commission was in agreement to separate the capital from the operating. Commissioner Bachhuber stated departments would need to trust in the prioritization and the work the City does on the CIP to know that these capital needs would be done appropriately. He suggested that the amount that each department contributes to the CIP is based on what their CIP needs and would be part of the departments budgeted expenditures. Then anything that is in excess of the target surplus could be swept into a cash fund. Finance Director Miller asked what would happen if the fund falls below the target range. Commissioner McRoberts stated this would occur through budgeting. If a department falls below the target levels then they should not be spending as much. Finance Director Miller stated if the City lowers budgets and departments fall below the target reserves then the City would have less flexibility to respond to unforeseen expenditures that may arise. Chair Schroeder clarified the Commission would recommend taking the capital out of these funds and have it in its own separate CIP fund. Commissioner McRoberts stated if the funds in the CIP fund are greater than what is needed to fund the 10-year CIP then the excess funds should be moved out. Commissioner Hodder asked where public safety capital and operational needs would be found. Finance Director Miller stated the operational needs are in the general fund and both police and fire have separately managed capital equipment replacement funds. Commissioner Zeller suggested removing the prioritization from the discussion at this time. Separating the CIP from the operations would be a first step in establishing a cash carry over fund.