Agenda - Council Work Session - 06/12/2012

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The graph on the previous page shows the rapid yet steady growth in fund equity, absent of significant year -to -year fluctuations through 2009. This indicates a stable operation with effective financial controls. The decrease in 2010 cash and fund balance is largely due to the City's change in its fund balance policy, which was amended to require 50 percent of the following years' adopted budgeted expenditures. Prior to 2010, this requirement was at 60 percent. The City transferred the amount above, the 50 percent required, in accordance with the fund balance policy, thereby decreasing the ending balance when compared to the previous year. Generally, a healthy financial position allows the City to avoid volatility in tax rates; helps minimize the impact of state funding changes; allows for the adequate and consistent funding of services, repairs, and unexpected costs; and can be a factor in determining the City's bond rating and resulting interest costs. The following graph reflects the City's General Fund revenues, budget and actual, for 2011: Taxes Intergovemmental Fines and forfeits Licenses and Permits Charges for Services Other General Fund Revenues Budget and Actual cr � dZ, t � � T & T T Jj °° °o s o ° o 3 2 ° o s o ° o ) (2 o ) ° o ) ° o °°° ° ° ° o ° ° ° o ° ° ° o ° ° ° o ° ° ° o ° ° ° o ° ° ° o °° o o (2.0 ° ° ° o ° ° °o ° ° ° o °° ° o • Actual • Budget Total General Fund revenues for 2011 were $8,655,880, a decrease of $133,399 from the previous year and $25,003 more than budget. Property tax revenue decreased by $218,764, due to a decrease in the approved levy adopted as discussed earlier in this report. Investment earnings surpassed budget expectations by $42,881, due to conservative budgeting in this area due to the volatility in the nature of this source.