March 21, 2006 CCP - Laserfiche WebLink

Home Browse Search

City of Lake Ehno February 17, 2006 Page Eight Other Matters Financial Position and Results of Operations General Fund The General fund is used to account for resources traditionally associated with government, which are not required legally or by sound principal management to be accounted for in another fund. The fund balance decreased $128,188 to $2,245,735 at December 31, 2005. The total fund balance represents 63 percent of the 2006 budgeted expenditures. We recommend the fund balance be maintained at a level sufficient to fund operations until the major revenue sources are received in June. We feel a reserve of approximately 40 percent to 50 percent of planned expenditures and transfers out is adequate to meet working capital and small emergency needs. The City has made the following reservations and designations of fund balance: Reserved for interhind advance Designated for: Community opinion survey Public access Building projects Administrative contingency Cash flow Total 500,000 2004 500,000 10,000 10,000 77,465 77,465 1,258,640 1,258,640 40,000 40,000 359,630 487,818 $ 2,245,735 $ 2,373,923 The Minnesota Office of the State Auditor classifies unreserved fund balance levels relative to expenditures as follows Extremely low Under 20% Loa' 21 - 34 Acceptable 35 - 50 Moderately high 51 - 64 High 65 - 100 Very high 100 - 150 Extremely high Above 150 They do group all General, special revenue and Debt Service funds of the City when making this calculation where our calculation is based only on the General funds. Although there is no legislation regulating fund balance, it is a good policy to designate intended use of fund balance. This helps address citizen concerns as to the use of fund balance and tax levels. The City currently has designated fund balances for various uses. This is a good practice in planning future outlays. 952.835.9090 • Fax 952.835.3261 w .aemcpas.com