Agenda - Council Work Session - 06/14/2011

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The following table summarizes the City's long -term liabilities: Govemmental Activities 2010 2009 Bonds $ 24,695,000 $ 26,570,000 Capital equipment certificates 335,000 695,000 Compensated absences 742,211 726,607 Other Post - Employment Benefits (OPEB) 141,817 70,231 Total $ 25,914,028 $ 28,061,838 During the current fiscal year, The City saw a decrease of $2.235 million in bonds and certificates as normal pay down of scheduled principle payments. The compensation absence liability increased $15,604 due to increased longevity of employees. State statutes limit the amount of general obligation debt a governmental entity may issue to three percent of its total assessed valuation. The current debt limitation for the City is $65,717,394. The City has sufficient funds on hand to make all required bond payments, and anticipates an ongoing stream of revenue to make future bond payments. Additional details of the long-term debt activity for the year can be found in Note 5 of the notes to basic financial statements. Economic Factors and Next Year's Budgets and Rates • The unemployment rate for the City of Ramsey is currently 7.3 %, which is a decrease from a rate of 7.8% a year ago. The state of Minnesota shows an average unemployment rate of 6.9%, whereas, nationally the unemployment rate is 9.4 %. • The number of foreclosures in the City of Ramsey decreased from 350 units in 2009 to 200 in 2010. In comparison, the State of Minnesota saw an 11% increase in foreclosures from 23,129 in 2009 to 25,673 in 2010. • Inflationary trends in the region compare favorably to national indices. All of these factors were considered in preparing the City of Ramsey's budget for the 2011 fiscal year. During the current fiscal year, unreserved, undesignated fund balance in the General Fund decreased by $833,841 to $0. The city amended its fund balance policy in 2010 to require approximately 50% of the following years adopted budgeted expenditures be retained within the General Fund. In prior years the city's General Fund retained a fund balance equivalent to approximately 60% of the following years budgeted expenditures -10% of which was attributed to unreserved, undesignated fund balance. Due to this policy change, the fund balance in the General Fund was reduced by approximately $834,000. Also, per the city's fund policy, any excess over the 50% General Fund level is transferred to designated funds. In this case, the Public Improvement Revolving Fund received the transferred funds for future project/budget needs. The City of Ramsey does not anticipate a need for an undesignated fund balance in 2011, due to conservative budgeting which resulted in an approximately 5% decrease in tax levy. The water, sewer and storm water utility rates were increased for the 2011 budget year. The water utility, which has a tiered rate structure, will increase by an average of 5% for all customers. This rate increase is to help offset the construction costs of future capital improvements, most likely a water treatment plant. The sewer and storm utilities will increase an average of 3 %. The increased rates are to not only offset current maintenance costs and depreciation, but to help finance 2011 sewer and storm utility projects. REQUESTS FOR INFORMATION Questions concerning any of the information provided in this report or requests for additional information should be addressed by writing to the City of Ramsey, 7550 Sunwood Drive Northwest, Ramsey, MN 55303 or by calling (763) 427 -1410.