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The four utility funds are operating under budget. Water fund revenue is up with a dry <br />summer. The rate study in the five year financial plan indicates the need for a dime <br />increase in water rates for 2013 or about $8 annually. The Sanitary Sewer proposed <br />increase for 2013 is 4% or about $10 annually. The Street Light fund will have a proposed <br />$.25 per quarter increase or $1 annually. The Storm Water fund indicates no increase for <br />2013. <br /> <br />Investments: <br />The City will continue to experience lower investment income as a result of lower rates <br />most likely through 2014 and into 2015. Investment income for 2012 is $325,174 <br />compared with $354,366 for the same period in 2011. Our portfolio for September 30, <br />2012 was 28,533,657 compared with $28,964,199 for 2011. I have attached the <br />September 30th investment statements and pooled cash report for you review. <br /> <br />Treasury Securities 2012 2011 <br /> 2 year .27 .27 <br /> 5 year .69 1.06 <br />10 year 1.68 2.17 <br />Cert. of Deposit <br /> 1 year .25 .25 <br /> <br />The Federal Open Market Committee (FOMC) has maintained the current discount rate at <br />0% to .25%. They have indicated that they will keep rates low into 2014. Credit continues <br />to be tight and is still a concern for small businesses. There is some concern that the <br />economy might double-dip but that has abated somewhat recently. The Federal Reserve <br />is currently buying approximately 40 billion in government bonds and mortgages per month <br />indefinitely as part of the latest quantitative easing program. <br /> <br />State unemployment as of September 30th was 5.8% state-wide compared to national <br />unemployment of 7.8%. Ramsey County unemployment stands at 6.5%. Economists see <br />the national number declining slightly in 2013 and into 2014. The State number has been <br />about 2% below the national rate. The job market is a lagging indicator of an economic <br />recovery so will be one of the last things to show improvement. <br /> <br />Finance Department Operations – 4th quarter: <br /> <br />Finance staff will be busy during the fourth quarter finalizing the 2013 budget which will <br />culminate with a truth-in-taxation hearing and adoption of the 2013 budget and tax levy in <br />December. Delinquent utility bills, administrative offense fines, diseased tree charges and <br />unpaid property charges were presented to the Council for certification and will be sent to <br />the County at the end of November. Staff is currently working on our insurance policy <br />renewal and we will begin preparations for the annual financial audit. <br /> <br />Respectfully Submitted, <br /> <br /> <br /> <br />Mark Beer, Finance Director