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but please consider our future city and establish a formal MX Sunset Stabilization now in order to plan for this decrease in MX revenue in the future...this should also be a priority albeit one that will result in delayed gratification. Please consider at a minimum formally setting aside the growth in MX revenue each year into the Stabilization Fund-or even a portion such as 50% of the growth of MX revenue. The council established the Pension Stabilization Fund and the refinancing of the pension debt which will help our future obligations, but it is simply not enough. A MX stabilization fund needs to be formally established now. This can easily be done by adding another layer of general fund reserve to the 18% revenue policy that is existing right now...18%of revenue PLUS the MX Stabilization Fund. Break it out in 2 separate policies. In the Budget Presentation, Slide 3 titled "City Manager Overview',the city manager indicated on the slide and in the presentation on last Tuesday,there is indication of a long-range plan for the MX rate reduction in 2029, however, I did not really hear what that plan was during the presentation. Maybe I missed it but the city's plan should include reserving of funds now in order to not have a drastic reduction in services to our city residents and businesses. Again, I urge you to formally come up with a MX Stabilization Fund in order to prepare for the future. Please do not rely solely upon the general fund balance compared to the 18% Reserve Requirement. In fact, during the upcoming budget season,the current proposal has a REDUCTION to the excess general fund balance of approx $21M. This is a big reduction. The estimated Beg Balance is expected to be approx$97.5M while the estimated Ending Balance after the proposed budget which you are contemplating will be approx$76.5M...again, a reduction of the general fund balance. This will still be beyond the 18% reserve requirement(18%of revenue) as set forth by the council policy but again,we should be trying to increase the general fund in anticipation of the MX sunset instead of decreasing it IMO or provide additional information to us all in terms of the entire MX sunset "plan". See picture below. Recapwith additions General Fund Summary Estimated Revenu@ $390,112,94Q Estirnaled8eginr0rM SalancrPS97,462,861 Recurring Baseline Spending 362,038,301 Net Activity 2,204, Proposed Additions to Recurring 19,121,149 Less One-Tune Spend ing 23 157,310 Transfer to Pension 5tabilitation 7,748,81.1 Estimated End ink Balance $76,510,Z10 NetRuurring Art ivity $ 2,204r679 18%Reserve Requirement 70,220,329 Rre postd ane-Tiwif 5ptnding 2.1,157,310 Exeexs Available $6,Z�4,401 2G Yes,there is about$23M of one time spending but when one-time spending is consistently done this can start to feel like recurring expenditures. In order to not reduce the "excess available",the city will need to limit future one time spending while controlling recurring spending to only the increase in revenue, but this will also mean we are not increasing the general fund reserve balance. Intentions and priorities matter here...I believe that the council need to put its formal priorities in place showing that its intention is to increase the reserves to prepare for the MX sunset. We do not want to be in the same situation that Westminster is in to where some serious budget cuts will need to be made which will only compound existing issues. Please consider putting your concern for the future MX sunset into a formal policy...now instead of later. Show your intentions and priorities instead of relying upon the general fund budget process that we have done in the past. Action 38