Comprehensive Annual Financial Report 12/31/2019

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Management’s Discussion and Analysis The 2018 Street Reconstruction fund has a total fund balance of $1,010,945. The fund balance decreased during the year by $4,289,134 due to expending proceeds from the 2018 bond issuance for the West Shadow Lake Drive and LaMotte Area Street Reconstruction project. The combined fund balance of other governmental funds increased by $1,518,608 during 2019. Primary reasons for the increase include increased investment earnings, increased tax increment revenues, and increased development activities resulting in increased developer fee revenues (park dedication, seal coating, surface water management). Increases are partially offset by increased spending for park and trail improvements, Cedar Street Reconstruction improvements, and a transfer out for the Civic Complex roof replacement project. Proprietary funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The water fund has total net position at year-end of $25,527,564, of which $6,097,611 is unrestricted. The increase in net position of $2,045,656 was primarily due to capital contributions and strong investment earnings, partially offset by a net operating loss and a transfer to the Pavement Management Fund for watermain system repairs associated with the 2019 Mill & Overlay project. The sewer fund has total net position at year-end of $27,100,484 of which $10,139,617 is unrestricted. The increase in net position of $2,302,486 was primarily due to capital contributions and strong investments earnings, partially offset by a net operating loss. Budgetary Highlights General Fund The General Fund budget was amended during the year to reflect increased charges for services and municipal and police state aid and a slight decrease in revenues relative to building and licensing activities, fines and forfeitures, and refunds and reimbursements. In the budget was amended to account for a transfer in from the Municipal Buildings and Facilities Fund for the Civic Complex Roof Replacement project. The City also received $711,854 of insurance proceeds associated with the damage to the Civic Complex roof. Changes to expenditure areas include decreased personal services due to personnel vacancies, a net decrease to professional and contracted services, a decrease in parts/supplies spending, increased capital outlay, increased expenditures associated with the Civic Complex Roof project, and transfers for the comprehensive plan and summer playground program temporary staff. The final amended expenditure budget was $726,331 more than the original adopted budget. Revenues were $114,171 over budget for the year. General property tax, special assessments, and fines and forfeits were $71,543 under budget; however, this variance was 25