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Attachment 2 FinanceDepartment Memo To: Roseville City Council cc: Patrick Trudgeon, City Manager From: Michelle Pietrick, Finance Director Date: December 1, 2025 Re: Projected 2025 Budget Surplus/Deficit for Unrestricted Operating Funds Background The City Council is expected to adopt the final 2026 Budget and Tax Levy at the December 8, 2025, meeting. The City Council has adopted an Operating Fund Cash Reserve Policy and implemented a Cash Reserve Fund. To assist the City Council in making a final levy decision, staff have prepared projected year-end financial results for the City’s unrestricted operating funds. Cash Reserve Levels: Unrestricted Operating Funds Audited ProjectedProjectedProjected 12/31/2024202512/31/202512/31/202512/31/202512/31/2025 CashSurplusCashReservesVariance fromVariance from Operating Fund Reserves(Deficit)ReservesLevelLow TargetHigh Target General: Primary *$ 7 ,420,034$ (627,000)$ 8,161,00031.53%(896,979)$ $ (4,778,970) General: Cash Reserve Fund * 1,365,926 (503,296) 862,630 Parks & Recreation 1,834,578 36,372 1,870,95028.90%576,397$ (70,881) Communications 67,813 (34,000) 33,813 4.98%(34,061)$ (169,808) License Center ** 505,668 300,000 805,668 36.71%586,185$ 476,444 Cash Reserve Target Levels TargetTarget Operating FundLowHigh General (unrestricted portion)35%50% Parks & Recreation20%30% Communications10%30% Information Technology10%15% License Center10%15% *$525,000 of fund balance is applied in the 2025 budget for CIP funds ** Excess cash will be used to pay for costs associated with new building It should be noted that these projections are based on preliminary financial results through October 31, 2025, along with estimated financial activity for the remainder of the year. For the General Fund, the margin of error is +/- 3% ($400,000) that can be expected given these assumptions. Qbhf!2:!pg!259