FY2023 Adopted Budget

and storm water infrastructure. Included in the operating budget are transfers and internal charges to the replacement reserves for the purpose of funding the replacement of these types of equipment, facilities, and infrastructure. Equipment Fund transfers are equivalent to the annual depreciation on the equipment so that these replacements are fully funded when they are necessary. The replacement reserve for transit buses and facilities is funded at 20% of accumulated depreciation due to the availability of state and federal grants to make these purchases. Transit buses and facilities are depreciated using the straight-line method over an eight-year useful life. These grants typically fund 80% - 85% of the acquisition cost of the bus. The projected balances for replacement funds for fiscal year 2023 are as follows: Reserve Fund Balance Library equipment equipment General 452,635 $ Public transportation buses & facilities Transit 6,408,312 $ Facility replacement General 12,900,000 $ Vehicles and heavy equipment Equipment 16,392,078 $ Cable television equipment General 114,100 $ Info technology equipment ITS 1,462,772 $ Wastewater infrastructure & facilities Wastewater 6,312,236 $ Water infrastructure & facilities Water 3,450,663 $ Airport infrastructure & facilities Airport 186,258 $ Stormwater infrastructure & facilities Storm Water 674,000 $ The City also collects funds to replace copy machines through a charge-per-copy that is collected in the Central Services Fund. This fund is projected to have $791,348 in fund balance at the end of fiscal year 2023 available for the replacement of copy machines. Risk Management and Health & Dental Insurance Reserves (OPEB) The City contracts for actuarial services for the purpose of calculating and maintaining reserves that are intended to provide for certain liabilities. Actuarial calculations regarding liabilities for future expenditures are determined for risk management (liability, workers compensation, and property insurance) payments, health and dental insurance payments, and retiree health and dental insurance benefits. Actuarial calculations are updated annually and help determine internal charge rates and premium rates for risk management and health insurance charges. The estimated Risk Management fund reserve for fiscal year 2023 is $4,138,379. The estimated Health Insurance reserve for fiscal year 2023 is $12,361,551 of which $9,697,868 is being reserved for Other Post Employment Benefit (OPEB) liabilities. The OPEB liability was calculated with the actuarial assumption of a 2.19% discount rate, an inflation rate of 2.6% per annum, a salary increase rate of 3.25%, and an annual medical trend rate of 8.00% decreasing 0.5% each year to a 4.5% ultimate medical trend rate. The estimated Dental Insurance reserve for fiscal year 2023 is $480,557. Capital Project Plan The five-year capital improvement program (CIP) is developed and updated annually through a process involving all City departments in the collection and review of the capital improvement needs of the City. The plan reviews, plans, and prioritizes the capital replacement and capital expansion needs of the City in coordination with the City’s financial and operational demands. The City’s five

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