FY2024 Proposed Budget

Capital replacement reserves The City maintains long-term replacement reserves including cable television equipment, library equipment, vehicles and heavy equipment, information technology equipment replacement, transit system buses and facilities, parking facilities, water and wastewater facilities, airport infrastructure, 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 2024 are as follows:

Reserve

Fund

Balance

Library equipment

General Parking

$ $ $ $ $ $

248,888 163,702

Parking infrastructure & facilities

Public transportation buses & facilities Transit

11,065,245 13,492,000 9,301,249

Facility replacement

General

Vehicles and heavy equipment Cable television equipment Info technology equipment

Equipment

General

133,118

ITS $ Wastewater infrastructure & facilities Wastewater $ Water infrastructure & facilities Airport infrastructure & facilities $ Stormwater infrastructure & facilities Stormwater $ Water Airport $

1,163,694 4,246,236

793,500 191,649 834,000

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 $816,439 in fund balance at the end of fiscal year 2024 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 2024 is $2,841,603. The estimated Health Insurance reserve for fiscal year 2024 is $15,562,882 of which $8,123,615 is being reserved for Other Post Employment Benefit (OPEB) liabilities. The OPEB liability was calculated with the actuarial assumption of a 4.09% discount rate, an inflation rate of 2.6% per annum, a salary increase rate of 3.25%, and an annual medical trend rate of 7.50% decreasing 0.5% each year to a 4.5% ultimate medical trend rate. The estimated Dental Insurance reserve for fiscal year 2023 is $531,834.

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