CITY COUNCIL REGULAR MEETING AGENDA PACKET

Page 2 of 15 o Approximately $13 million in projected average annual deficit o Approximately $22 million in projected average annual deficit (recession scenario) • Significant infrastructure funding gap o Approximately $900 million for both General Fund and Enterprise Funds over 10 years • Unfunded retiree medical and pension liabilities o Over $200 million. RECOMMENDATION Adopt a resolution to accept the FY 2023/24 Year-End Operating Budget report, approve budget amendments in multiple funds, and designate the June 30, 2024 General Fund balance. BACKGROUND Annually, staff presents the year-end financial report (Report) to the City Council for approval. The Report summarizes the actual results of the financial activities for the fiscal year and details changes in reserves and recommended budget amendments or adjustments. Development of the City’s ACFR is still in progress; therefore, the financial information included in this Report is based on unaudited figures. The audited information will be presented to the City Council in the ACFR once the City’s independent auditor has issued its opinion and the ACFR has been reviewed by the Audit Committee. This is expected to occur in December 2024 or January 2025. Any changes to the information presented in this Report as a result of the audit will be brought to the City Council’s attention at that time. DISCUSSION The following discussion addresses the General Fund, Enterprise Funds, and Internal Services Funds, examining the amended budget versus actuals for FY 2023/24. The amended budget is the original budget plus all budget amendments approved by the City Council through June 30, 2024. General Fund Table 1 below summarizes the FY 2023/24 General Fund revenues, net transfers, expenditures, and year-end budget adjustments. Actual revenues were greater than the amended budget by $5.3 million or 3.6 percent. This excludes a net unrealized investment adjustment of approximately $3.0 million in FY 2023/24. Transfers in and out (net transfers) were $0.1 million less than the amended budget. Actual expenditures were $5.5 million or 3.7 percent less than the amended budget. A detailed explanation of the amended budget versus actuals is included in Tables 2, 3, 4, and 5 in this Report. It should be noted that any investment gain or loss is not realized as the City intends to hold its securities until maturity. However, the Governmental Accounting Standards Board (GASB) requires reporting of unrealized investment or fair market value adjustment in the ACFR. Additionally, based on new GASB implementations related to leases and subscription-based information technology arrangements (SBITAs), required adjustments resulted in actual revenue and expenditure numbers both increasing by approximately $1.5 million and $2.1 Page 231 of 658