Fountain Hills council moves $4.7 million of excess reserves into capital, streets and facilities funds
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Summary
Council approved staff's recommended transfers of $4.7 million in excess general-fund reserves into the capital projects, streets and facilities reserve funds to align balances with council priorities.
The Fountain Hills Town Council unanimously approved staff's recommendation to transfer $4.7 million of excess general-fund reserves into the town's capital projects, streets and facilities reserve funds.
Paul, a town finance staff member, told council that the town closed fiscal year 2025 with general fund revenues above projections and expenditures below budget, producing a positive variance that left about $4.7 million in excess reserves after the council-mandated minimum fund balance. He summarized the recommendation: allocate roughly $1.5 million to the capital projects fund, $1.5 million to the streets fund and $1.7 million to facilities reserves (of which $1.0 million would be held specifically for a lake-liner project).
"Our general fund revenues ended the year at 28,400,000, which exceed our projections by about 2,600,000," Paul said during the presentation. He explained that the town's policy requires a minimum fund balance (about $10 million for the year) and that council had latitude to transfer excess amounts to align with priorities.
Council members asked about whether the transfers affected operating budgets such as community-center fees and whether interest income could be moved among funds; Paul said investment earnings are generally unrestricted and transfers between funds are possible so long as the revenue is not legally restricted.
The motion to approve the transfers carried on a roll call vote of 7-0. Staff will move the amounts into the indicated funds and allocate $1 million specifically for the lake-liner project within facilities reserves.
The transfers are intended to strengthen fund balances for upcoming capital work, support the town's $12 million capital-improvement plan for the year and maintain capacity for a budget that includes an elevated street-paving program in FY26.
Action: transfer of $4,700,000 excess general-fund reserves into capital, streets and facilities funds ' outcome: approved (7-0).