Agenda Packets - 2026/05/11 - Laserfiche WebLink

Home Browse Search

FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS As noted earlier,the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds—The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular,assigned and unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year,the City's governmental funds reported combined ending fund balances of$19,540,832, an increase of$110,226 in comparison with the prior year. The General Fund is the chief operating fund of the City.At the end of the current fiscal year,the unassigned fund balance was $4,695,761. Due to the pattern of receipt of taxes and intergovernmental revenues mandated by the state,Minnesota cities do not receive any significant revenues in their General Fund until July of each year. The City's policy is to end the year with a fund balance equal to 35.0 percent to 50.0 percent of the subsequent year's budgeted revenues and transfers, or a minimum of five months expenditures and transfers.Unassigned fund balance represents 50.0 percent of the 2026 budgeted General Fund revenue and transfers from other funds. Fund balance for the City's General Fund increased by$469,724 during the current fiscal year. A decrease in fund balance was anticipated as approved in the budget. A discussion of budget variances follows later in this management's discussion and analysis. Revenues and transfers out were both down in the current year with a change in how the annual property tax levy was set and applied directly to individual funds. Expenditures remained similar to the prior year,with shifting between functions. With resources available from current and prior year operations, the City Council approved a General Fund transfer of$385,000 to finance capital improvements. The Economic Development Authority Special Revenue Fund reported an increase in fund balance of $73,427. The annual EDA levy,investment earnings,and support by way of transfers from other funds was more than enough to support$184,525 of economic development spending in the current year. The Community Center Special Revenue Fund reported a decrease in fund balance of$73,807, which compares to a decrease of$65,201 reported in the prior year. The additional expenditures to provide the level of programming with increased participation surpassed the growth in revenues in the current year. The Tax Increment Financing District No. 5 Special Revenue Fund reported an increase in fund balance of $9,126.The increase is anticipated by design of the fund's purpose which is to collect and make community development incentive payments.Payments are limited to the amount of incremental tax payments received, less an administrative fee retained by the City. The Vehicle and Equipment Fund (Capital Projects) and the Special Projects Fund (Capital Projects) reported decreases in fund balance of$412,040 and $351,514,respectively. Both of these capital projects funds received transfers in the current year(largely from the General and Utility Funds)to finance current and future projects. The Street Improvement Fund(Capital Projects)reported an increase in fund balance of$199,375, due to an increase in taxes and intergovernmental revenue received. Overall capital spending was up in the current year, as the City had more major project activity ongoing in the current year. Proprietary Funds — The City's proprietary funds provide the same type of information found in the government-wide financial statements,but in more detail. The three major utility funds (Water, Sewer, and Storm Water) saw improved results for changes in total net position:the Water Fund increased by$123,020;the Sewer Fund increased by$257,448; and the Storm Water Fund increased by $462,132. Rate increases and usage changes helped produce an overall increase in utility revenues. Approved increases for sales/user fees contributed to the overall growth in proprietary fund revenues. Other revenues for one-time judgements helped improve the net position of the Water Fund in the current year. -12-