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29 <br /> Honorable Mayor and Members of the City Council <br /> City of St. Anthony, Minnesota <br /> Financial Summary, continued <br /> General Fund, continued <br /> As previously noted, the surplus in the General Fund was achieved without the benefit <br /> of making budgeted transfers of $250,000. , These resources have been subsequently <br /> committed to the City's budget for 2001. <br /> The fund balance of the General Fund is designated or reserved for the following <br /> purposes: <br /> Working Capital and Revenue Stabilization $814,035 <br /> Insurance (Self-insurance) 79,660 <br /> Public Safety (Unemployment Benefits and Other) 47,960 <br /> Prepaid Insurance and Other Items 34,868 <br /> ------------ <br /> $976,523 <br /> The major portion, $814,035, has been designated for working capital purposes. This <br /> reserve provides financing of current operations until tax settlements and state aids <br /> are received. This reserve also serves as a safeguard against potential revenue <br /> shortages or unexpected expenditures which may occur throughout the year. This <br /> reserve for working _capital represents approximately -23.13% of budgeted expenditures <br /> 'for 2001, compared to 23.87% for 2000. The total fund balance represents approxi- <br /> mately 27.75% of the current year's budgeted expenditures. Although the City's <br /> financial consultant indicated the City should maintain a fund balance reserve of <br /> 50% in the General Fund, this amount would appear to be excessive and a more rea- <br /> sonable amount would be 35% to 40%. <br /> Council and management have realized the importance of providing a sufficient level <br /> of working capital by establishing and maintaining this reserve. The amount of <br /> this reserve is required because it was noted during the audit that in June and <br /> November the General Fund internally borrowed funds from other City funds to sus- <br /> tain its operations until tax collections and state aids were received. To preserve <br /> this level of working capital reserve in the General Fund, council and management <br /> must continually monitor its financial position throughout the year to avoid adverse <br /> changes impacting its financial stability. <br /> Special Revenue Funds <br /> Each of the special revenue funds are maintained for a specific purpose. These <br /> funds remain financially sound at December 31, 2000, with sufficient fund balance <br /> reserves available to finance their respective activities in 2000. <br /> The fund balance of the General Reserve Fund of $250,000 has been committed or <br /> designated for revenue stabilization purposes (revenue shortages) in the General <br /> Fund or for capital acquisitions in 2001. <br /> • <br />