05-11-2022 Council Packet - Laserfiche WebLink

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CITY OF LITTLE CANADA, MINNESOTA Management’s Discussion and Analysis (continued) Year Ended December 31, 2021 Other Major Governmental Funds The Economic Development fund had an increase in fund balance of $16,556, to arrive at an ending fund balance of $29,976. The increase in fund balance was due to issuance fee revenue received for conduit debt. The Canabury Square Condominiums HIA fund balance increased by $322,348 to end at a deficit fund balance of $227,487 at the end of the current fiscal year. The increase in fund balance is due to the receipts of special assessment payments. These payments were used to decrease the interfund loan in the fund. The deficit fund balance will be recovered when future special assessments are received from residents in the Canabury Square Condominiums HIA. The General Capital Improvements fund experienced an increase in fund balance of $731,986 during the current fiscal year to arrive at an ending fund balance of $2,691,850. The increase was due to planned revenue receipts that will be used to fund future capital improvement projects that have been identified in the City’s ten-year Capital Improvement Plan, and a transfer from the General Fund per the City’s Fund Balance Policy. The Infrastructure CIP fund had an increase in fund balance of $365,568 during the current fiscal year to arrive at an ending fund balance of $3,370,250. The increase was due to planned revenue receipts that will be used to fund future capital improvement projects that have been identified in the City’s ten-year Capital Improvement Plan. In addition, the increase is due to smaller street improvement projects in 2021 compared to 2020. The TIF 6-1 Masterpiece fund had an increase in fund balance of $60,375 to arrive at an ending fund balance deficit of $437,546. The fund balance increase is from the tax increment revenue that was received in the current fiscal year to fund TIF project costs that had occurred in prior years. The deficit fund balance will be recovered when future tax increment revenue is received in the future. The Owasso/Woodlyn Redevelopment Area fund had a decrease in fund balance of $243 to arrive at an ending fund balance of $672,375. The decrease is due to contractual service expenditures. The Water and Sewer Equipment Replacement fund had an increase in fund balance of $19,781 in the current fiscal year to arrive at an ending fund balance of $1,911,497. The increase was due to the planned revenue receipts that will be used to fund future water and sewer capital outlay purchases that have been identified in the City’s ten-year Capital Improvement Plan. Proprietary Funds The City of Little Canada’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. At the end of the current fiscal year, total net position of the Water and Sewer funds total $10,163,072 or $58,300 less than the prior fiscal year. Net position decreased due to a low interest rate environment for investments in 2021. Utility rate increases were approved in 2021 that had a positive effect on operating income in both funds. Operating income in 2021 was $101,368 compared to an operating loss in 2020 of ($88,868). The last utility rate increase was in 2018. A pause in rate changes occurred in 2019 and 2020 in order to complete the utility rate study that identified that 3% to 4% rate increases would be needed annually to fund operations. 26