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Page 12 of 15 <br /> <br /> <br />Internal Service Funds <br />Internal Service Funds account for the financing of goods or services provided by a <br />department to other departments on a cost-reimbursement basis. Three examples of this are <br />the Retirees Medical Reserve Fund, the Repair and Replacement Funds, and the Self <br />Insurance Fund. These funds not only account for current-year expenditures but also long- <br />term liabilities of the City. These liabilities may not result in actual expenditures in the short <br />term but will result in future expenditures for the replacement of equipment or the payment in <br />the future for retiree employee medical benefits. In accordance with the City’s adopted <br />financial policies, the City recognizes costs as they accrue, and sets money aside to fund <br />these future expenditures, rather than allowing these costs to accumulate and become a <br />future financial burden. <br /> <br />Retirees Medical Reserve Fund. The FY 2023/24 actual revenues and expenditures reflect <br />the 2023 OPEB actuarial study recommendations and actual retiree medical payments. <br /> <br />As shown in Table 11 below, actual revenues were less than $0.1 million of the amended <br />budget due to reduced actual expenses. Actual expenses, including transfers, were <br />approximately $0.7 million less than budgeted, which is related to unused retiree medical <br />benefits that occur when eligible retirees have their medical benefits provided through another <br />means such as a spouse or another job. The Retirees Medical Reserve Fund does not require <br />a fund balance. Staff will monitor the level of activities in FY 2023/24 and propose to make <br />necessary adjustments to utilize the fund balance of $1.3 million. <br /> <br />Table 11. Retirees Medical Reserve Funds - Amended Budget vs. Actual <br /> <br />Repair and Replacement Funds. In accordance with the City’s financial policies, the City <br />maintains various Repair and Replacement Funds. The purpose of these funds is to provide <br />ongoing replacement of City equipment, vehicles, traffic signals, streetlights, and to make <br />major repairs/renovations to City facilities, parks, and medians to extend their useful lives. <br />Page 241 of 658