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SUPPLEMENTAL MATERIAL to subsidize/offset future burial costs which is on top of the current $50k/year subsidy. With the average 3 -year loss being $156k/year, they are basically asking for a $206k/year ($50k + $156k) subsidy until all previously sold units are buried. So, they are basically asking taxpayers to pay for their mistake of inaction. To their credit, they are pausing casket sales so the problem won't keep growing, but they could have recommended pausing or slowing casket sales earlier. A. The financial detail in the report is focused on operating activity, and all figures are presented pre -subsidy so as not to make assumptions about the level or source of funding that might offset the operating loss. The intent of the recommendations is not to perpetuate subsidies but to reduce and eventually eliminate them. The goal is to move the cemetery toward a break- even operation by simplifying service delivery, streamlining partner/vendor relationships, and reducing the expense base. Pausing casket sales was an important first step to prevent the problem from compounding, and the broader set of recommendations are designed to stabilize operations, address legacy commitments, and create a more sustainable model moving forward. To clarify, the cemetery has the following assets/liabilities: • The Cemetery Operating Fund currently has a $170,000 fund balance. The annual subsidy from the General Fund over the last several years was $50,000. The subsidy for FY 2025/26 and FY 2026/27 is budgeted at $170,000 and $50,000. • The Cemetery Capital Improvement Project currently has $632,655 in unspent budget. However, these funds are restricted. • The Unearned Revenue (liability) account for the cemetery had a balance of $919,084.78 at the end of FY 2023/24. Funds are set aside to pay these liabilities associated with the services (e.g. burial) that are sold pre - need at the cemetery. • The Cemetery also owes the General Fund $500,000 in loan funds/advances for the establishment of the Cemetery Master Plan Implementation Reserve Fund. 10. Single Partner reads like one contractor runs the whole thing, but in the Detailed Cost Breakdown, Responsible Party (Slide 31) the City is still responsible for half the work. Shared Services (Slide 30) is according to the footnote in Slide 31, the single contractor model (assumes full operations of the site). Why is it not mentioned in Economic Impact of Available Options (Slide 11)? Is Current Model the same as Shared Services or are both options available? If they are the same option, they contradict each other. A. The $100-150K expense shown as Management costs under the "Shared Services" model (slide 31) represents the annual subsidy the City would pay to a shared services partner to take on full cemetery operations. In this model, 9