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City of Mounds View,Minnesota it <br /> Management Report,Page 17 <br /> k <br /> Avoids <br /> or Favorable bond rating indicator. <br /> temporary overdrafts <br /> prior to major receipts. <br /> I <br /> .r City may study effects of <br /> +' Supplements revenues revenue cuts before gradual <br /> with investment earning& program reductions. <br /> I <br /> Benefits of <br /> Reserves I <br /> Provides the City <br /> greater options to deal <br /> sr Provides resources - with unexpected events. <br /> for minor projects or <br /> feasibility reports. • <br /> 411 <br /> sr Avoids overburdening <br /> of annual budgets for <br /> certain capital outlay. <br /> • <br /> The amount of General Fund reserve required to meet emergency and/or unanticipated <br /> expenditures is not readily quantifiable. Rather,the level of this requirement must be established <br /> it <br /> by the City based on the history of the City and the philosophy of"adequate"reserve coverage. <br /> ._ • ,s•. • • 14 . ■ • ten- - - • • r • w• ■■- • r. ■- - I - •-.I I•! • • <br /> difficult to quantify. State and Federal legislation dealing with shared aids is somewhat <br /> unpredictable. The City must strive to remain current on the effects of changing legislation and <br /> budget such aids accordingly. A reserve balance in the City's General Fund will mitigate the <br /> adverse effects of aid reductions which are received after expenditure budget commitments are I <br /> made. <br /> The State of Minnesota is apparently developing a unique view of what constitutes prudent <br /> fiscal management for Minnesota cities. Currently, the Minnesota Department of Revenue is <br /> exploring options for reducing LGA and HACA to cities as a method of reducing the State's <br /> budget shortfall. One method that has been under consideration for cutting aids is based upon city <br /> reserve balances. Presumably,cities with "large"reserve balances would experience "large" aid <br /> cuts. <br /> I <br />