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GENERAL FUND
<br />The City's General Fund accounts for the fmancial activity of the basic services provided to the
<br />community. The primary services included within this fund are the administration of the municipal
<br />operation, police and fire protection, building inspection, streets and highway maintenance, and culture
<br />and recreation. The following graph displays the City's General Fund trends of financial position and
<br />changes in the volume of financial activity. Fund balance and cash balance are typically used as
<br />indicators of financial health or equity, while annual revenue is often used to measure the size of the
<br />operation.
<br />$10,000,000
<br />$9,000,000
<br />$8,000,000
<br />$7,000,000
<br />$6,000,000
<br />$5,000,000
<br />$4,000,000
<br />$3,000,000
<br />$2,000,000
<br />$1,000,000
<br />General Fund Financial Position
<br />Year Ended December 31,
<br />rir I
<br />Fund Balance O Cash Balance —Revenue
<br />1
<br />IT
<br />2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
<br />The City's General Fund cash and investments balance (net of interfund borrowing) at December 31,
<br />2012 was $6,910,921, an increase of $310,335 from the previous year. Total fund balance at year -end
<br />was $6,725,283, an increase of $336,651 from the prior year.
<br />The stability of the General Fund's financial position is greatly attributed to the City's "Fund Balance and
<br />Excess Revenue Policy" as well as the general budgeting policies. These policies have allowed the City
<br />to provide funding for equipment replacement and recurring capital maintenance programs without
<br />disrupting the General Fund's financial position. This is an important factor because a government, like
<br />any organization, requires a certain amount of equity to operate. The amount of required equity increases
<br />as the size of the operation increases. Increase in the size of the operation is natural, caused by such
<br />things as inflation, population growth, desired increases in services, and — something which has impacted
<br />cities significantly in recent years— mandated increases in services and administrative requirements.
<br />The graph above shows the rapid yet steady growth in fund equity, absent of significant year -to -year
<br />fluctuations through 2009. This indicates a stable operation with effective financial controls. The
<br />decrease in 2010 cash and fund balance is largely due to the City's change in its fund balance policy,
<br />which was amended to require 50 percent of the following years' adopted budgeted expenditures. Prior to
<br />2010, this requirement was at 60 percent. The City transferred the amount above, the 50 percent required,
<br />in accordance with the fund balance policy, thereby decreasing the ending balance when compared to the
<br />previous year.
<br />Generally, a healthy financial position allows the City to avoid volatility in tax rates; helps minimize the
<br />impact of state funding changes; allows for the adequate and consistent funding of services, repairs, and
<br />unexpected costs; and can be a factor in determining the City's bond rating and resulting interest costs.
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