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Management's Discussion and Analysis
<br />Business-Type Activities
<br />Business-type activities increased the City's net position by $953,938 during 2017. The
<br />increase was due to contributions of capital assets from private sources, as well as the City's
<br />governmental activities, in the amount of$1,006,239.
<br />Below are specific graphs which provide comparisons of the business-type activities
<br />revenues and expenses:
<br />Capital grants and
<br />contributions
<br />22%
<br />Business-Type Activities -Revenues
<br />Business-Type Activities -Expenses
<br />s,-
<br />60%
<br />Unrestricted investment
<br />earnings
<br />3%
<br />Charges for services
<br />75%
<br />Water
<br />40%
<br />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$24,056,122. Approximately 22% of this total amount ($5,289,641)
<br />constitutes fund balance restricted by external constraints established by creditors, grantors,
<br />contributors, or by state statutory provisions. $344,976 of fund balance is not in a spendable
<br />form, $175,401 has been committed, $14,581,669 has been assigned, and $3,664,435 is
<br />unassigned.
<br />The fund balance of the General Fund increased by $560,734 in 2017, while the City
<br />anticipated the use of $518,000 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. The City also saw
<br />a significant increase in the number of roofmg and siding permits issued during the year due
<br />to a storm causing significant damage throughout the City in June of 2017. Finally, reduced
<br />expenditures, primarily for personal services through vacant positions, fuel costs, and
<br />professional and contractual services helped to increase the year end fund balance.
<br />The G.O. Improvement Bonds of2005A fund balance decreased by $226,135. The 2005A
<br />series bonds were refunded in 2016 and the fund made a debt service payment of$2,420,000
<br />in February 2017.
<br />The G.O. Improvement Note of2009A 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 $0, a decrease of $22. The City prepaid the note in 2017 using MSA funds. As
<br />deferred special assessments are received the MSA funds will be replenished. The
<br />outstanding balance on the note as of December 31, 2017 was $0.
<br />The G.O. Improvement Bonds of2016B fund decreased by $1,932,000. The 2016B series
<br />bonds were issued to refund the 2005A series bonds and fund the Legacy at Woods Edge
<br />improvements. Future tax increment and land sale proceeds are expected to cover debt
<br />service and the interfund loan payable.
<br />The Area and Unit Charge fund has a total fund balance of$7,656,155, all of which is
<br />assigned for financing capital improvements. The fund balance during the current year
<br />increased by $1,389,955 due to the collection of prepaid special assessments and trunk utility
<br />development fees. IV-6
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