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515 little Canada Road, Little Canada, MN 55117 -1600 <br />(612) 484 -2177 / FAX: (612) 484 -4538 <br />MEMORANDUM <br />TO: Mayor Hanson & Members of the <br />City Council <br />FROM: Joel Hanson, City Administrator <br />DATE: June 17, 1993 <br />RE: General Fund Surplus Transfer Policy <br />MAYA <br />Raymond G. Hansa <br />COUNCIL <br />Beverly Scaizi <br />Jim LaValle <br />Steve Moreian <br />Sob Pedersen <br />AD WSA p <br />Joei R. Hanson <br />According to some preliminary information from our <br />Auditors, it appears the General Fund will have a fairly <br />substantial surplus at the end of 1992. This surplus is <br />attributable to higher than expected revenue collections <br />associated with interest earnings, building permit fees, <br />tax collections, Local Government Aid, and refunds and <br />reimbursements. It also resulted from lower than <br />anticipated expenditures which relates to our prudent <br />spending practices. (The exact make -up of this surplus <br />will be discussed in detail when we review the 1992 audit <br />with Bob Voto.) <br />While I am very proud of our ability to generate this <br />surplus, I am concerned that we do not have a un- designated <br />fund balance in our 1992 audit which could be negatively <br />viewed by the State legislature. When one considers the <br />fact that Little Canada has not been levying or budgeting <br />for major capital expenditures, it seems apparent that <br />these additional funds could be put to good use from a <br />capital expenditure standpoint. Furthermore, we typically <br />experience some unfunded project costs which have been <br />located in our Interim Construction Funds, The General <br />Fund has typically been the source of financing to cover <br />these unfunded balances. <br />Based on these two factors, it is my recommendation that we <br />adopt a policy whereby any General Fund surplus from a <br />budget year will be applied as follows: <br />1. Existing surplus to <br />construction costs. <br />to the City Council <br />transfer of funds.) <br />be applied to unfunded interim <br />(A listing will be provided <br />for ratification prior to the <br />