06-03-2024 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 $34,017,053. Approximately 21% of this total amount ($7,083,189) constitutes fund balance restricted by external constraints established by creditors, grantors, contributors, or by state statutory provisions. Of the remaining fund balance, $727,460 is not in a spendable form, $355,635 has been committed, $20,707,533 has been assigned, and $5,143,236 is unassigned. The General fund balance increased by $497,363. Interest earnings surpassed budget expectations, position vacancies contributed to budget savings, while transfers out funded The Rookery Activity Center operations and comp plan updates. The Rookery Activity Center opened to the public in May 2022. The deficit fund balance improved from $263,755 to $5,067 in 2023 as a result of the transfer in from the General Fund. The Rookery operating expenditures (personnel, maintenance supplies, utilities, etc.) overshadowed revenues while membership grew. The tax levy increased $175,000 in 2024 with the goal of total revenues covering total expenditures in future years. 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 $1,353 and $0, respectively, and transferred $31,695 to the MSA Construction Fund. The G.O. Improvement Bonds of 2016B fund balance increased by $611,099. 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 Capital Equipment Replacement fund balance decreased by $1,579,347 due to the issuance of an interfund loan payable to finance two fire trucks. The interfund loan payable will be paid back with a tax levy over the next ten years. The fund accounts for the replacement of public safety and public works equipment and vehicles financed by a pay as you go tax levy. The Area and Unit Trunk fund has a total fund balance of $9,562,325, all of which is assigned for financing water and sewer capital improvements. The fund balance during the current year increased by $502,431 primarily due to investment earnings as trunk fees (either collected over time through special assessments or paid up front through charges for services) covered project costs. 26 33