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2017 Annual Report • Finance Department • St. Anthony Village, Minnesota <br /> <br /> <br /> <br />12 <br /> <br />MINIMUM FUND BALANCE POLICY – CONTINUED COMPLIANCE FOR 2017 <br />The purpose of the City’s Minimum Fund Balance Policy is to ensure that sufficient cash <br />holdings exist to meet day to day operating needs. The policy states that ending unassigned <br />General fund balance should be at 30%-35% of the upcoming year’s budgeted expenditures. This <br />requirement is based on the fact that City receives tax collections in July and December. <br />Therefore the fund balance at year end provides the necessary working capital to manage cash <br />flow throughout the upcoming year. <br />The City’s fund balance at the end of 2016 was 38.35% which included 2016 costs associated with <br />the officer involved shooting. For the 2017 levy process the future costs associated with the <br />officer involved shooting were not included into the 2017 levy. The extent of these costs were <br />unknown at the time and the City’s fund balance was above its policy minimum. Legal and <br />settlement costs associated with the officer involved shooting were again paid by the General <br />Fund in 2017. A capital fund reserves transfer <br />of $370,000 was recorded at year-end to <br />maintain the ending 2017 General fund balance <br />at 35%. The estimated actual 2017 General fund <br />balance is currently at 36.88% per chart below. <br /> <br />Maintaining an adequate fund balance is <br />necessary for operations and is a key factor <br />used in bond ratings. <br /> <br />