Council shall create and maintain a capital improvement reserve fund and shall transfer or appropriate thereto the unencumbered balance remaining in the general fund of the Village at the end of each fiscal year; provided, however, that Council shall retain in the general fund at the end of each fiscal year for general fund purposes for the succeeding fiscal year the lesser of: (1) the year-end balance of the general fund; or (2) an amount equal to 20% of the aggregate general fund expenditures for the fiscal year then ended. The foregoing moneys so retained shall not be taken into account in preparing the appropriations budget for the ensuing year.