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Management's Discussion and Analysis
<br />Financial Analysis of the Government's Funds
<br />Governmental Funds. The focus of the City's governmental funds is to provide information
<br />on near-term inflows, outflows, and balances of spendable resources. Such information is
<br />useful in assessing the City's financing requirements. In particular, unassigned fund balance
<br />may serve as a useful measure of a government's net resources available for spending at the
<br />end of the fiscal year.
<br />At the end of the current fiscal year, the City's governmental funds reported combined
<br />ending fund balances of $27,830,769. Approximately 23% of this total amount ($6,502,424)
<br />constitutes fund balance restricted by external constraints established by creditors, grantors,
<br />contributors, or by state statutory provisions. $326,334 of fund balance is not in a spendable
<br />form, $170,950 has been committed, $15,778,480 has been assigned, and $5,052,581 is
<br />unassigned.
<br />The fund balance of the General Fund increased by $309,778 in 2016, while the City
<br />anticipated the use of $423,000 of the general fund balance. Overall, signs of continued
<br />economic recovery are being seen with increased building and development activities taking
<br />place which resulted in increased license and permit revenues for the year. In addition,
<br />reduced expenditures, primarily for personal services through vacant positions, fuel costs,
<br />and professional services helped to increase the year end fund balance.
<br />The G.O. Improvement Bonds of 2005A fund balance increased by $2,566,307 due to the
<br />receipt of $1,975,000 of refunding bond proceeds and $996,679 of tax forfeit land received
<br />and sold in lieu of special assessments. On February 1, 2017, the fund made a debt service
<br />payment of approximately $2,420,000.
<br />The G.O. Improvement Note of 2009A fund, to service the debt issued by Anoka County as
<br />the City's financial commitment for the I -35E interchange project, ended the year with a fund
<br />balance of $22, a decrease of $7,362. Special assessment revenue and transfers in are meant
<br />to approximate the fund's debt service commitment each year. The outstanding balance on
<br />the note as of December 31, 2016 was $1,345,000.
<br />The Area and Unit Charge fund has a total fund balance of $6,266,200, all of which is
<br />assigned for financing capital improvements. The fund balance during the current year
<br />increased by $1,843,595 due to the collection of prepaid special assessments and trunk utility
<br />development fees.
<br />The combined fund balance of other governmental funds increased $3,062,436 during 2016.
<br />Primary reasons for the increase include the issuance of $1,600,000 of G.O. Tax Abatement
<br />Refunding Bonds, Series 2016C, the proceeds from which were used to pay-off the G.O. Tax
<br />Abatement Bonds of 2006C on February 1, 2017. Also, the fund balance of the G.O. Bond
<br />Fund of 2014A increased $858,219 as special assessment collections significantly exceeded
<br />debt service payments during 2016.
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