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STUART J. BONNIWELL • Certified Public Accountant 7101 York Avenue South- Suite 50 Office: (612)921-3325 Minneapolis,MN 55435 Fax: (612)921-3331 The CFA.Never UidNesUmale The Ve4ie:' March 30, 1999 Honorable Mayor and Members of the Ci-ty Council City of St. Anthony, Minnesota The following comments are presented for your information and consideration based on the audit of the general purpose financial statements of the City of St. Anthony for the year ended December 31 , 1998. Financial Summary The financial condition of the City continues to remain strong. The City improved its overall financial stability for the year ended December 31 , 1998, as evidenced by the increase in fund balance of its operating funds, consisting of the General , Special Revenue, Debt Service, and Capital Project Funds. The overall increase in fund balance of these operating funds was approximately $406,000 for the year. The City continues the practice of transferring the surplus generated by the General Fund to Capital Project Funds to fund special projects and capital acquisitions. The operations of the City's enterprise funds (liquor and utility) also improved significantly during the year. This improvement was highlighted by the increased profitability of the liquor operations; net income (before transfers) of $195,676 in 1998 compared to $53,931 in 1997. The strong financial condition of the City is reflected by the bond rating received by the City from Moody's Investors Services. The comments offered by the City's bond consultant also supports this strong financial condition. Following is a brief summary of significant activities of these funds. General Fund Revenues exceeded expenditures by approximately $185,000 before transfers. Reve- nues of $3,045,000 exceeded budgeted estimates by $161 ,000, attributed to inter- governmental revenues (state police and street aids) and other revenues (franchise fees, insurance dividends, and reimbursements). Actual expenditures of $2,860,000 were less than budgeted estimates by $196,000, with favorable variances in expendi- tures in general government and public works. The surplus in the General Fund was achieved without the benefit of making budgeted transfers of $182,000; although anticipated, it was determined these transfers were not required and accordingly were not made. The City has approved transferring a portion of the surplus ($145,561 ) to Capital Project Funds and designated these funds for various capital improvements and acquisitions.