CITY COUNCIL MEETING AGENDA PACKET

Page 12 of 17 from year to year. The General Fund budget includes a transfer of $50,000 to the Cemetery Fund, and this subsidy will likely need to be increased if costs are not kept under control. Table 10. Cemetery Fund– Amended Budget vs. Actual Internal Service Funds Internal Service Funds account for the financing of goods or services provided by one department to another department on a cost-reimbursement basis. Three examples of this are the Retirees Medical Reserve Fund, the Repair and Replacement Funds, and the Self Insurance Fund. These funds not only account for current-year expenditures but also long- term liabilities of the City. These liabilities may not result in actual expenditures in the short term, but will lead to future expenditures for the replacement of equipment or the payment of retiree employee medical benefits in the future. In accordance with the City’s adopted financial policies, the City recognizes costs as they accrue and sets money aside to fund these future expenditures, rather than allowing these costs to accumulate and become a future financial burden. Retirees Medical Reserve Fund. The FY 2024/25 actual revenues and expenditures reflect the OPEB actuarial study recommendations and actual retiree medical payments. As shown in Table 11 below, actual revenues were less than $60,000 of the amended budget. Actual expenses, including transfers, were approximately $590,000 less than budgeted, which is related to unused retiree medical benefits that occur when eligible retirees have their medical benefits provided through another means such as a spouse or another job. The Retirees Medical Reserve Fund does not require a fund balance. Staff will monitor the level of activities in FY 2025/26 and propose to make necessary adjustments to utilize the fund balance of $1.9 million in the 2027-29 budget cycle. Table 11. Retirees Medical Reserve Funds - Amended Budget vs. Actual Page 358 of 399