06-06-2022 Council Work Session Packet

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Management’s Discussion and Analysis Financial Analysis of the Government's Funds Governmental Funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. At the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $33,927,326. Approximately 25% of this total amount ($8,437,406) constitutes fund balance restricted by external constraints established by creditors, grantors, contributors, or by state statutory provisions. $565,192 of fund balance is not in a spendable form, $602,501 has been committed, $19,533,784 has been assigned, and $4,788,443 is unassigned. The General fund balance increased by $620,028 in 2021, while the City anticipated an increase in fund balance of $485,695 based on its final budget. Increased license and permit revenues and reduced personnel expenditures, primarily for police position vacancies, helped to increase the year end fund balance. The G.O. Improvement Note of 2009A fund was established to service the debt issued by Anoka County as the City’s financial commitment for the I-35E interchange project. The City prepaid the remaining balance of the note in 2017 using MSA funds. As deferred special assessments are received, MSA funds will be replenished. The fund began and ended the year with a fund balance of $0 and $141, respectively, and transferred $65,330 to the MSA Construction fund. The G.O. Improvement Bonds of 2016B fund decreased by $145,413. The 2016B series bonds were issued to refund the 2005A series bonds and fund the Legacy at Woods Edge improvements. The bonds matured in 2021 and future tax increment is expected to cover the interfund loan payable. The Area and Unit Charge fund has a total fund balance of $9,659,930, all of which is assigned for financing capital improvements. The fund balance during the current year increased by $665 due Water Tower #3 construction costs and transfers out for debt service payments offsetting special assessment and charges for services revenue. The MSA Construction fund has a total fund balance of $3,134,847, all of which is assigned to capital improvements for City MSA designated roadways. The fund balance during the current year increased by $50,936 primarily due to Municipal State Aid received in excess of transfers out for debt service payments. 24