19 - Memo to GB - Proposed FY24-25 Budget - July 2024 (002)

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continue that service. Therefore, the City of Paris does not support any of its routine expenditures with surplus funds. On the other end of the spectrum, we have one-time sizable expenses that are not routine year after year (ex: certain equipment, studies, etc.). We commonly refer to these as capital purchases(note: our annual ambulance and police car replacement programs are both capital purchases butare routinely done each year and therefore excluded from consideration of surplus funds).While we routinely have capital purchases each year, the purpose, number, size, amount, dollar requirement, etc. is quite dynamic and difficult to predict. When surplus funds are not available, reoccurringand/or new revenue must be reallocated and/or raisedto fund non-reoccurringcapital purchases. This is not always possible,and the City must make difficult decisions on what services it will be able to provide year after year. However, when surplus funds are available and assuming the reserve is healthy without the addition of these surplus funds, then opportunities to expand our reach within our capital purchase list become possible. This will not always be the case for the City of Paris, but as with last year, this opportunity is available to us this year. The City of Paris had an approximate amount in excess of $3 million in surplusrevenue upon the close of FY22/23. This is predominately because of excellent sales tax and interest receipts beyond what was budgeted in the balancing of the FY22/23budget. To be in excess by this much is indeed rare and cannot be expected each year. However, it presentsus with an opportunity to pursue some significant one-time capital expenses not normally possible. So long as a healthy reserve exists, citizens would prefer to see their tax dollars beyond minimum reserve amounts usedrather than stored away. The Airport Fund (Fund 03) does not have any reserve. In fact, the General Fund will transfer a set amount to help subsidize the Airport Fund in FY24/25. The Water and Sewer Fund (Fund 10) doesnot have excess reserve available for capital purchases, therefore all expenses within thisfund are supported with reoccurring revenue streams raised in FY24/25.Due to scheduled changes in debt payments, the FY24/25 budget shows the possibility of improving the Water and Sewer Fund reserve. In addition to the operating funds, the City still has some remaining ARPA (Fund 04) and CARES (Fund 05) funding. Through our past efforts, we have de-obligated this funding under the lost revenue category authorized by the Federal government, thus openingit up to other purposes as needed. It is our understanding that this funding has an expiration date upcoming, but we plan to have it spent before these deadlines hit. The items supported with this funding will be shown later in this memorandumand have been selectedprimarilybased on their long-termimpactonour operations and service to the communityas well as our ability to spend the funds prior to the deadlines. One final helpful key, the City’s accounting system is structured based on account numbers.We utilize consistent numbering for each of the departments, but it firsttakes some trainingto learn how to read the system.The following is an example of atypical account number: “01-0101-12-00”.To assist you in reading this, please take the following example: AA-BBBBB-CC-DDD “AA” =Fund Number Example: General Fund, Water and Sewer Fund, etc. “BBBBB”=Line Item Example: Salaries and Wages, Office Supplies, Communications, Buildings and Grounds, etc.; these are consistent throughout all departments.So “0101” in all Departments is “Salaries and Wages”. “CC”=Department Number Example: City Council, Police, Fire, Library, Water Production, etc. “DDD”=Sub-Department Number and/or Special Sub-Accounts Example: Pool (Sub-Department of Parks), Capital Purchase Accountssuch as a Vehicle or Heavy Equipment, etc. Page 4of 18