2008 CAFR - Laserfiche WebLink

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Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of St. Anthony operates. Local economy: The Minneapolis -St. Paul metropolitan area has continued to experience a relatively stable economy. The market place for local products and services remains strong. St. Anthony is a fully -developed City. However, continued long-term growth is anticipated as St. Anthony continues to aggressively pursue redevelopment opportunities. Because of these efforts, the City's tax capacity and tax base have consistently increased over the last five years. Long-term financial planning: The City maintains internal service funds for the replacement of various capital assets. The Capital Equipment Fund provides funding for the replacement of the City's fleet including all vehicles and heavy equipment that have a value of $5,000 or more and a useful life of at least two years. The Road Improvement Fund has been established for the replacement of the City's roads and infrastructure, including the resurfacing and reconstruction of City's streets, sidewalks and storm water system. The City combines the use of Goal Setting and Key Financial Management Planning to identify and prioritize all City improvement projects. On an on-going basis, projects are identified, discussed and prioritized by the City Council. Once the project is identified, a complete analysis is done to review the impact, examine the funding sources available to determine the appropriate funding source and budget for the costs. Cash management policies and practices: The City's foremost investment objective is to preserve capital. Secondary considerations are liquidity and lastly yield. Accordingly, deposits are either insured by federal depository insurance or collateralized. All temporary cash surpluses during the year are invested in various securities defined by Minnesota Statutes. The City's policy is to invest all available monies at competitive interest rates in accordance with the City's over-all fiscal plan and coordinate them with operating needs and programs projected over the ensuing 12 months. The average yield on the City's cash and investments in 2008 was 4.7%. Risk Management: The City has been actively working to limit its liability risk and insurance costs. To assist employees who are injured while on duty, a Managed Care Program was implemented which aids in reducing medical expenses and other costs relating to the injury. The program assists employees with a treatment plan and reduces lost workdays, replacement workers, etc. In addition, a safety committee consisting of employees from every department meets monthly throughout the year to discuss safety related items, review accident reports and provide recommendations to reduce the City's exposure to liability. The City's general liability insurance is with the League of Minnesota Cities Insurance Trust. In order to reduce the cost of insurance, a $10,000 per occurrence/$50,000 aggregate deductible is maintained and funded through insurance dividends paid by the League of Minnesota Cities. s L_