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Page 6 of 13 <br />the procurement of books for the Library. <br /> <br />General Fund Reserves and Fund Balance – Projected total General Fund reserves at the <br />end of FY 2025/26 are $53.64 million, with the unrestricted General Fund reserve at $31.45 <br />million. The City’s current reserve policy requires a minimum reserve between 16.7 and 25.0 <br />percent of operating expenses, with a target of 20.0 percent. The unrestricted General Fund <br />reserve of $31.45 million equals 20.4 percent of the General Fund operating expenses. <br /> <br />Table 3. General Fund Reserves <br /> <br /> <br />Enterprise Funds <br />Water Operations and Maintenance Fund – As shown in Table 4 below, recommended <br />changes to the Water Operations and Maintenance Fund include increases of $2.93 million in <br />revenues and $2.38 million in operating expenses. The result of these adjustments is an <br />increase in net income by $0.56 million and an estimated ending fund balance of $14.35 <br />million, which equals 34.6 percent of the total FY 2025/26 operating expenses. The City’s <br />reserve policy requires reserves to stay between 30.0 and 40.0 percent, with a target of 35.0 <br />percent. <br /> <br />Based on year-to-date actual water and recycled water usage data and a projected year-end <br />total, as well as accounting for the new rate effective January 1, 2026, staff recommends <br />increasing the water sales revenue budget by $2.98 million and the recycled water sales <br />revenue budget by $0.05 million. These are offset by a decrease of $0.10 million in water <br />meter installation and credit card convenience fee revenues. <br /> <br />Some expenditure adjustments are recommended. The largest increase is to the water <br />purchase budget by $1.24 million based on the updated water and recycled water usage <br />projections. Other operating budget adjustments include a $0.11 million increase in contract <br />service and machinery and equipment costs for required state-mandated water testing; $0.07 <br />million for additional utility costs; $0.10 million for valve repair replacements, $0.29 million for <br />purchasing a valve truck; $0.57 million in additional professional service costs for several <br />operating projects and initiatives, such as water system operations manual and Supervisory <br />Control and Data Acquisition (SCADA) standards developments, water modeling/fire flow <br />analysis, asset management program support, and cross connection control plan. <br /> <br /> <br /> <br />Page 75 of 144