06-04-2018 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 $24,056,122. Approximately 22% of this total amount ($5,289,641) constitutes fund balance restricted by external constraints established by creditors, grantors, contributors, or by state statutory provisions. $344,976 of fund balance is not in a spendable form, $175,401 has been committed, $14,581,669 has been assigned, and $3,664,435 is unassigned. The fund balance of the General Fund increased by $560,734 in 2017, while the City anticipated the use of $518,000 of the general fund balance. Overall, signs of continued economic recovery are being seen with increased building and development activities taking place which resulted in increased license and permit revenues for the year. The City also saw a significant increase in the number of roofing and siding permits issued during the year due to a storm causing significant damage throughout the City in June of 2017. Finally, reduced expenditures, primarily for personal services through vacant positions, fuel costs, and professional and contractual services helped to increase the year end fund balance. The G.O. Improvement Bonds of 2005A fund balance decreased by $226,135. The 2005A series bonds were refunded in 2016 and the fund made a debt service payment of $2,420,000 in February 2017. The G.O. Improvement Note of 2009A fund, to service the debt issued by Anoka County as the City’s financial commitment for the I-35E interchange project, ended the year with a fund balance of $0, a decrease of $22. The City prepaid the note in 2017 using MSA funds. As deferred special assessments are received the MSA funds will be replenished. The outstanding balance on the note as of December 31, 2017 was $0. The G.O. Improvement Bonds of 2016B fund decreased by $1,932,000. The 2016B series bonds were issued to refund the 2005A series bonds and fund the Legacy at Woods Edge improvements. Future tax increment and land sale proceeds are expected to cover debt service and the interfund loan payable. The Area and Unit Charge fund has a total fund balance of $7,656,155, all of which is assigned for financing capital improvements. The fund balance during the current year increased by $1,389,955 due to the collection of prepaid special assessments and trunk utility development fees. 26