Capital improvement sales tax held as a project ‘holding account’; funds earmarked for roads, police and fire

At the April 21 pre‑council meeting finance staff explained that the city’s capital improvement sales tax fund is designed to accumulate receipts and transfer them to project funds when work is scheduled.

‘‘This whole fund is…meant for that money to come in and get transferred to other funds,’’ Finance Director Matthew Lou said. Staff projected roughly $9 million in revenue for the capital improvement sales tax in 2025 and modest growth in later years based on current plans.

Councilmembers asked whether the fund keeps a cash balance and how emergency repairs are handled. Lou and staff said there is not a formal 20% reserve target on this fund because its purpose is to hold receipts until projects are funded; reserves for individual projects reside in the funds that receive transfers. Staff said emergency repairs (for example, a sewer failure that undermines a road) typically come from enterprise funds such as stormwater or utilities rather than from the CIP holding account.

Staff also noted project timing affects the appearance of the fund: years with planned large projects will show higher expenditures and lower ending cash. The finance presentation referenced coordination with public‑works staff (referred to in the meeting as Shane) on the schedule of road and sidewalk projects tied to the CIP sales tax.

No formal council action was taken; the presentation was informational and intended to clarify how the capital improvement sales tax functions and how project timing affects fund balances.