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Mounds View City Council June 12, 2000
<br />Regular Meeting Page 12
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<br />represented a very good collection rate, and there is very little discretion in the timing and cash
<br />that is presently foregone for delinquent taxes. He indicated this was a very good sign that the
<br />property taxes were being collected in a timely manner. He added that this was also the case with
<br />Special Assessments receivables. He explained that there were very few new assessments in
<br />1999, with an ending balance of $154,000, and most of this was in current deferred tax
<br />assessments that would be forthcoming in the next five to ten years for various projects. He
<br />stated these trends were also very good.
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<br />Mr. Wischman provided the Council with a chart, which depicted the composition of the City’s
<br />General Fund revenues. He stated approximately 51 percent of the total General Fund operating
<br />revenues are generated from property and franchise taxes. He indicated State and Local
<br />Government Aids comprise approximately 33 percent of these revenues, Licenses and Permits
<br />represent 6 percent, Charges for Services represent 3 percent, Investment Income is 2 percent, in
<br />addition to various miscellaneous revenues. He advised that these percentages were very
<br />consistent with prior years, and fairly typical of cities within the same geographical area. He
<br />noted that property tax revenues alone were approximately 45.5 percent, therefore, approximately
<br />6 percent of the General Fund revenue was generated through the franchise and other taxes.
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<br />Mr. Wischman stated the major portion of the General Fund expenditures, approximately 39
<br />percent, is in the area of public safety, and again, is fairly consistent with prior years. He
<br />indicated General Government expenditures were 30 percent, Streets and Highways, 9 percent,
<br />and Culture and Recreation, approximately 10 percent. He advised that Capital Outlay and Debt
<br />Service represented approximately 12.5 percent of the General Fund expenditures. He explained
<br />that the Capital Outlay percentage could change fairly significantly from year to year, if there is a
<br />large investment year in terms of street equipment, Police vehicles, and items of this nature. He
<br />advised that this was the one variable in the General Fund, however, these figures were very
<br />consistent with prior years.
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<br />Mr. Wischman stated they have taken the assets and subtracted the liabilities in the General
<br />Fund, to determine the Fund balance. He advised that at the end of 1988, the Fund balance was
<br />$100,294,000, and at the end of 1999, an eleven or twelve-year period, the Fund balance is
<br />$200,912,894. He indicated they generally look for a benchmark of approximately 6 months of
<br />operating expenditures as a Fund balance, to carry the City through the cash flow cycle. He
<br />advised that the City was at approximately 9 months of operating expenditures at the end of
<br />1999, which was very good. He explained that in terms of future trends, the City might find that
<br />the Fund balance is somewhat pressured, particularly with the variables of the Franchise tax and
<br />items of this nature, therefore, it was appropriate to have a Fund balance in excess of 6 months,
<br />in order to continue to operate the City in an efficient manner.
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<br />Mr. Wischman provided the Council with a graph, which depicted the cash flow fluctuation. He
<br />advised that cash flow varies quite significantly in a City because the City receives large portions
<br />of tax and intergovernmental revenues in May and June, and also in November and December.
<br />He explained that as a result of this, there is somewhat of a spend-down pattern through May and
<br />June, after which the City receives a large chunk of money, which is generally spent through
<br />November. He indicated the month of December is generally the highpoint for the cash flow
<br />cycle of the General Fund. He stated at the low point of approximately $1.5 million dollars, the
<br />City was significantly lower than the ending balance, and the highpoint in the cycle was
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