06-05-2023 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. At the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $33,545,198. Approximately 25% of this total amount ($8,248,742) constitutes fund balance restricted by external constraints established by creditors, grantors, contributors, or by state statutory provisions. Of the remaining fund balance, $670,234 is not in a spendable form, $313,065 has been committed, $19,492,211 has been assigned, and $4,820,946 is unassigned. The General fund balance decreased by $61,233. The decrease was a result of transfers out and unrealized losses on investments. Transfers out funded capital equipment and comp plan updates. Unrealized losses on investments overshadowed interest on investments due to rising interest rates. The Rookery Activity Center opened to the public in May 2022. Of the $2,884,961 of current expenditures, $1,609,067 or 56% accounts for spending of Federal ARPA grant dollars to reopen the former YMCA facility as a City facility. The Rookery fund balance decreased by $324,097 in 2022 due to operating expenditures (personnel, maintenance supplies, utilities, etc.) incurred while membership grew. 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 are replenished. The fund began and ended the year with a fund balance of $141 and $1,353, respectively, and transferred $757,433 to the MSA Construction fund. The G.O. Improvement Bonds of 2016B fund balance increased by $130,779. 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 Building and Facilities fund has a total fund balance of $2,717,074, all of which is assigned for financing future facility maintenance and improvements. The fund balance increased by $117,058 due to lease revenues in excess of expenditures. The fund accounts for cellular tower antenna and ambulance lease revenues. Future tax increment is expected to cover the interfund loan receivable. The Area and Unit Charge fund has a total fund balance of $9,059,894, all of which is assigned for financing capital improvements. The fund balance during the current year decreased by $600,036 due to Hodgson Road/County Road J Lift Station project costs. 26