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Honorable Mayor and Members of the City Council . City of St. Anthony, Minnesota Financial Summary, continued The transfers referred to previously will provide needed resources to assist in financing certain initiatives being contemplated by the Council. However,, Counc-il has realized the importance of maintaining adequate reserves by providing for a sufficient level of working capital in the General Fund. In addition, Council has established budget reserves in other funds as additional security. Special Revenue Funds - Each of these funds remain financially sound with suffi- cient fund balance reserves to finance their respectively activities in 1998. The fund balance of the General Reserve Fund of $155,407 has been designated for revenue stabilization purposes (revenue shortages) in the General Fund. This amount will be utilized only if needed. Debt Service Funds - Fund balances of the debt service funds related to the City street improvement program increased during the year largely from the collection (prepayment) of assessments received by the City. The fund balance, combined with annual levy amounts, are sufficient to satisfy current debt service requirements. These fund balances are reserved for debt service purpose and are not available for other purposes until the debt is retired. The debt service funds related to the Housing and Redevelopment Authority currently have positive fund balances. It is anticipated, based on current collection of tax increment revenues continuing, suffi- cient revenues will be generated from the .tax increment districts to satisfy .current debt service requirements. Capital Project Funds - Each of the capital project funds have a positive fund balance. As a result of the transfers from the General Fund noted previously, the fund balance of the Revolving Improvement Fund increased to $1 ,106,902. The City is able to internally finance minor improvement projects, capital acquisitions, or provide funding for other improvements and renovations with these available funds. The fund balance of this fund has been designated by Council ; major designations are: $464,000 for capital equipment acquisitions; $255,902 for park improvements; $175,000 for stormwater renovation projects; $112,000 for public works projects; and $100,000 for budget/levy reserves. The fund balance of the Storm Water Improvement Fund is $264,897 at December 31 , 1997. Significant activities related to the Housing and Rede- velopment Authority include the completion of construction of the community center/ city hall complex and purchase of property and building for use by liquor operations. Enterprise Funds - The financial condition of each enterprise fund improved as a result of net income from operations. Liquor Fund - Income from liquor operations was $53,931 for the year compared to $20,002 in 1996. In addition, the City issued bonds for construction of a new liquor outlet. Construction was completed in mid-November and one of the existing outlets was moved to this location. It is anticipated that profitability of liquor opera- tions will continue to improve in 1998. Utility Fund - The Utility Fund maintained its strong financial position. Revenues generated are sufficient to meet current operating expenses. Internal Service Fund - Funding for the payment of accrued vacation and severance was maintained at $250,000. Funding of this liability has been limited due to the unlikelihood that this entire amount would be expended in one year for such payments.