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Regular City Council Meeting Monday,June 5, 2023 Page 6 Commissioner Bester explained the $1.5 million is fifteen percent of the $10 million that is typically carried as investible funds. Mayor Roe knew there were some limitations in the State law that allows cities to do this as well as in the City's own policies. He indicated the return mentioned is on that $1.5 million with the ten percent average return versus the two percent interest. That is where the net return of$1.2 million comes from on the initial $1.5 million. Mayor Roe noted he wanted to clarify those numbers for folks that might not have been tracking that at home. Councilmember Groff asked when the projections were made on the last sheet. He wondered if any actual averages were used from the ten or twenty years or was that just an example. Commissioner Bester explained the second page of the packet shows the forty-year history of the S&P 500 and that on average has increased in value by 10.1 percent per year over that forty-year period. Councilmember Schroeder indicated she knew that the Finance Commission had been working on this for a while, all the way back to getting the policy changed to now going from policy change to actions. She appreciated all of the work the Finance Commission had done on this. She particularly appreciated the examples because that helps people understand what is being talked about. Chair Davies explained another issue she wanted to get the Council's feedback on is the unusual situation with the General Fund and the Excess Cash Reserve Fund, which most cities do not have. It had occurred to her that it may be confusing to the average citizen. She explained the Finance Commission would like to explore a little bit more into why the City has these two funds, if it is necessary, or if it should be folded into the General Fund. Mayor Roe thought the Excess Cash Reserve Fund was a part of the General Fund already and from the point of view of the City's financial reporting and auditing, it is part of the General Fund but was a segregated, specific portion that is dedicated to this purpose. The notion being that if the City happens to receive more revenue than the City has spent money in particular funds over the course of the previous year, and it puts the City above its target policy range for balances in those funds, then the excess on top of the upper range of the balance can be swept into this fund. He noted the City may have either unexpected purchases or may have unexpected costs related to something like Emerald Ash Borer, or something like that. Or, the City may wish to use that to provide short-term property tax relief if there is a particularly high increase to the budget because of certain things the City needs to do but may not want to increase the tax levy quite so high for the taxpayers. He explained the City is capturing some funds that otherwise may be in excess of what individual operating areas of the City may need by policy, according to the range