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<br />GENERAL FUND FINANCIAL POSITION
<br />
<br />The City’s General Fund accounts for the financial activity of the basic services provided to the
<br />community. The primary services included within this fund are the administration of the municipal
<br />operation, police and fire protection, building inspection, streets and highway maintenance, culture and
<br />recreation, and economic development. The graph below illustrates the change in the General Fund
<br />financial position over the last 10 years. We have also included a line representing annual revenues to
<br />reflect the change in the size of the General Fund operation over the same period.
<br />
<br />$–
<br /> $1,000,000
<br /> $2,000,000
<br /> $3,000,000
<br /> $4,000,000
<br /> $5,000,000
<br /> $6,000,000
<br /> $7,000,000
<br /> $8,000,000
<br /> $9,000,000
<br /> $10,000,000
<br /> $11,000,000
<br /> $12,000,000
<br />2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
<br />General Fund Financial Position
<br />Year Ended December 31,
<br /> Fund Balance Cash Balance Revenue
<br />
<br />The City’s General Fund cash and investments balance at December 31, 2024, was $8,320,693, a decrease
<br />of $353,595 from the previous year. Total fund balance at year-end was $8,076,660, a decrease of
<br />$474,690 from the prior year, as compared to the final budget that projected a decrease of $2,028,440.
<br />The City Council approved significant transfers from the General Fund to other funds in the current year
<br />for street and other special projects, largely accounting for the decrease in the cash and fund balance
<br />levels.
<br />
<br />As the graph illustrates, the City has generally been able to maintain healthy cash and fund balance levels
<br />as the volume of financial activity has fluctuated. This is an important factor because a government, like
<br />any organization, requires a certain amount of equity to operate. A healthy financial position allows the
<br />City to avoid volatility in tax rates; helps minimize the impact of state funding changes; allows for the
<br />adequate and consistent funding of services, repairs, and unexpected costs; and is a factor in determining
<br />the City’s bond rating and resulting interest costs.
<br />
<br />A trend that is typical to Minnesota local governments, especially the General Fund of cities, is the
<br />unusual cash flow experienced throughout the year. The City’s General Fund cash disbursements are
<br />made fairly evenly during the year, other than the impact of seasonal services, such as snowplowing,
<br />street maintenance, and park activities. Cash receipts of the General Fund are quite a different story.
<br />Property taxes comprise about 61.0 percent of the fund’s total annual revenue. Approximately half of
<br />these revenues are received by the City in July and the rest in December. Consequently, the City needs to
<br />have adequate cash reserves to finance its everyday operations between these payments.
<br />
<br />The City’s unassigned General Fund balance of $4,309,823 at the end of the 2024 fiscal year represents
<br />50.6 percent of annual expenditures based on 2024 levels.
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