CITY COUNCIL MEETING AGENDA PACKET

Page 2 of 17 portion recorded in the General Fund. • At the time the FY 2024/25 mid-term budget was adopted, the General Fund expected to receive $532,000 from the Golf Fund for loan repayment and $3.1 million from the Capital Reserve Fund to support capital projects due to an anticipated budget gap. The golf course needs major renovation, as identified in the 2025-27 budget development, and only $32,000 of the anticipated $532,000 in funding will now be available to repay the General Fund. With sufficient revenues in the General Fund to cover expenditures, the $3.1 million from the Capital Reserve Fund was not transferred. The City’s Asset Management Plan is still under development, but the initial analysis has identified significant deferred maintenance/obligation in certain areas, such as fleet-related equipment. Staff recommends keeping the funds in the Capital Reserve Fund, so the Council has the flexibility to deploy the funds for critical capital projects when the Asset Management Plan is completed around December 2025. Please refer to the discussion below regarding the financial results for the General Fund and other key operating funds. This report also reflects proposed budget amendments for the General Fund and other funds due to changes to program activities. RECOMMENDATION Adopt a resolution to accept the FY 2024/25 Year-End Operating Budget report, approve budget amendments in multiple funds, and designate the June 30, 2025 General Fund balance. BACKGROUND Staff presents the year-end financial report (Report) annually 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 Annual Comprehensive Financial Report (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 2025 or January 2026. 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 2024/25. The amended budget is the original budget plus all budget amendments approved by the City Council through June 30, 2025. General Fund Table 1 below summarizes the FY 2024/25 General Fund revenues, net transfers, use of program reserves, expenditures, and year-end budget adjustments. Actual revenues were greater than the amended budget by $19.8 million or 12.9 percent. This excludes a net unrealized investment gain of approximately $3.6 million in FY 2024/25. Transfers in and out (net transfers) were $3.7 million less than the amended budget, and the use of program Page 348 of 399