CITY COUNCIL REGULAR MEETING AGENDA PACKET

Page 11 of 15 Storm Drain Operating Fund As shown in Table 9 below, the Storm Drain Operating Fund ended the year with a fund balance of approximately $0.6 million. While this program ended FY 2023/24 with a net income of approximately $0.3 million, this was possible with the General Fund subsidy and one-time transfer from the Storm Drain Capital Fund totaling almost $1.0 million. The Storm Drain Fund has been operating at a major funding deficit in recent years due to revenues generated from Urban Runoff Fees hovering around $0.5 million annually, while operating costs have been going up each year. An annual subsidy from the General Fund has been used to cover some of the operating costs. However, with the deficit growing each year, the level of subsidy has also been growing. This approach is not sustainable. As described earlier in this report, staff recommends an additional, one-time transfer of $0.8 million from the General Fund to address the ongoing operating deficit to prevent the fund balance from becoming negative again. Staff will explore options to solve the funding issue and present recommendations to the City Council at a later date. Table 9. Storm Drain Operating Fund – Amended Budget vs. Actual Cemetery Fund As shown in Table 10 below, the Cemetery Fund ended the year with a fund balance of less than $0.1 million. A one-time adjustment related to burial plot deposits from prior fiscal years and properly categorizing them as future revenues resulted in the overall revenue number being in negative. On the expenditure side, while the overall expenses came in slightly less than budget, the cost of cemetery maintenance based on the current contract continues to go up each year. The Cemetery Fund is another Enterprise Fund that is currently operating at a major deficit largely due to the cost of cemetery maintenance contract increasing each year while revenues generated from sales of burial plots have remained stagnant in recent years. With burial plot sales and corresponding expenditures related to burials, both of which are challenging to predict from year to year, the ongoing operating deficit is expected to continue, and the fund balance will run out as early as FY 2024/25. The General Fund budget includes a transfer of $50,000 to the Cemetery Fund, and this subsidy will likely need to be increased in future years. Staff is exploring opportunities to increase revenue streams and will present recommendations to the City Council at a future date. Table 10. Cemetery Fund– Amended Budget vs. Actual Page 240 of 658