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Attachment B Commissioner Bachhuber stated the target ranges for each fund would need to be reviewed to ensure they are set to an appropriate level. Once this is done, if a fund is above the target range the excess funds should be swept somewhere, for the City to use in other areas that may have a need. Chair Schroeder clarified the City Council would have the ability to decide where the excess funds in the cash carry forward fund would be spent. Commissioner Zeller stated if budgets are set to cover the CIP, operating and the maximum reserve and funds in excess of this are moved to the cash carry forward fund it could encourage under spending to increase the funds in the cash carry forward and these funds may not be used to reduce the tax levy. There is no maximum level set for the cash carry forward fund. If there are capital needs then the City should fund those needs. Commissioner Bachhuber agreed these funds would be over and above what the City needs and should be used to reduce the levy or fund the short falls in the CIP. Commissioner Zeller stated the City should budget according to the needs as they exist rather than incentivizing a cash carry forward fund. Commissioner Bachhuber stated the City should not need another account to grow money for future initiatives. Future initiatives should be identified and prioritized in the CIP and funded that way. Chair Schroeder stated moving the funds to a separate account is essentially the same as leaving them where they are unless there is a policy stating what to do with the funds. Ideally the fund would be zero because if it were a line item in the budget it would automatically adjust itself each year. Commissioner McRoberts stated the policy for the excess funds beyond the operating and CIP needs should be that these funds are reviewed as to why they occurred and make adjustments so they do not continue to occur. Commissioner Bachhuber stated the amount in this fund should be greater than zero and the amount would be dependent on the amount of reserve in each fund. The reserve targets for each fund could be lowered. The City does want to ensure they are prepared for unforeseen expenditures. Finance Director Miller stated it would not be in the public’s best interest to have funds that have zero balances. If the City is presenting financial statements there should not be accounts or funds with zero balances. The structure of the City’s finances might not be able to weather this change. Government operates in separate “pots” of money.