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The annual State Auditor's report shows city fund balances as a percentage of total current <br />expenditures for the year. Graph B illustrates the general fund cash balance as a percentage of <br />the general fund budget for a suburban city. In December, when the State Auditor's report <br />measures fund balances, the city's general fund cash balance is over 40 percent of budgeted <br />expenditures. That percentage dips below 20 percent in May and November in each of the past <br />two years. <br />Savings for projects or dedicated uses <br />Prior to undertaking a capital project, the city may increase reserves to help pay for a portion of <br />the project, thus reducing the need to issue debt. City fund balances may include savings for a <br />major project. <br />Graph C shows a two-year fund balance for the city of Arlington. In 2000 the city began <br />construction of a community center, for which it had funds saved. By the end of June 2001, the <br />project was complete and the city’s flmd balance was about one-third as large as it had been in <br />December 1999. The most recent State Auditor's report shows fund balances from December 31 <br />1999, which greatly overstates the actual current ftmd balance of cities like Arlington. <br />Graph C: City of Arlington Fund Balance