Council moves $4.7 million of excess reserves into capital, streets and facilities funds

The Fountain Hills Town Council approved staff'recommended transfers of $4.7 million in excess general‑fund reserves during the October meeting. The transfers move money from the general fund into the town's capital projects fund, streets fund and facilities reserve.

Why it matters: Staff said the transfers align available reserves with council priorities—carrying more funding for capital projects and paving in the near term—while retaining the council's required policy balance for ongoing operations.

Financial and policy details - Year‑end general fund balance (06/30/2025): $14.7 million, per staff presentation. Staff said council policy requires keeping about $10.0 million in combined unassigned and reserved funds (20% of a five‑year average of general fund revenues), leaving about $4.7 million available as excess reserves. - Staff recommended split: $1.5 million to the capital projects fund, $1.5 million to the streets fund (to support the town's $10 million paving budget for the coming year), and $1.7 million to the facilities reserve. Of the facilities allocation, $1.0 million was identified as set aside specifically for the lake liner project; $700,000 would be available for other facility repairs and maintenance.

Council action: The motion to approve the transfers passed on roll call, 7–0. Staff said these transfers will be recorded and reported in quarterly financial updates.

Background: Staff described fiscal year 2025 as finishing with revenues of about $28.4 million and expenditures of approximately $22.5 million, producing a positive variance of about $5.9 million. The town also closed an environmental fund and consolidated certain costs into the general fund.

Next steps: Finance staff will post the transfers, update fund balances, and include the changes in the next quarterly financial report to council.