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GENERAL FUND
<br /> The City's General Fund accounts for the financial 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 parks and
<br /> recreation. The graph below illustrates the change in the General Fund financial position over the last
<br /> five years. We have also included a line representing annual revenues to reflect the change in the size of
<br /> the General Fund operation over the same period.
<br /> General Fund Financial Position
<br /> Year Ended December 31,
<br /> $1610001000
<br /> $1410001000
<br /> $12001000
<br /> $1010001000
<br /> $8,000,000
<br /> $6,000,000
<br /> $4,000,000
<br /> $210001000
<br /> $— 2017 2018 2019 2020 2021
<br /> Fund Balance $7,912,618 $8,4901127 $8,880,446 $101090,053 $10,44%489
<br /> o Cash(Net) $810041958 $8,4221544 $8,846,081 $101098,653 $101548,733
<br /> Revenue $10,583,302 $11,856,968 $12,305,492 $151101,548 $13,613,351
<br /> The City's General Fund cash and investments balance at December 31, 2021 was $10,548,733, an
<br /> increase of$450,080 from the previous year. Total fund balance at year-end was $10,449,489, an increase
<br /> of$359,436 from the prior year.
<br /> As the graph illustrates,the City has generally been able to maintain healthy cash and fund balance levels
<br /> as the volume of financial activity has fluctuated. This is an important factor because a government, like
<br /> any organization, requires a certain amount of equity to operate. A healthy financial position allows the
<br /> City to avoid volatility in tax rates; helps minimize the impact of state funding changes; allows for the
<br /> adequate and consistent funding of services, repairs, and unexpected costs; and is a factor in determining
<br /> the City's bond rating and resulting interest costs. Maintaining an adequate fund balance has become
<br /> increasingly important given the fluctuations in state funding for cities in recent years.
<br /> A trend that is typical to Minnesota local governments, especially the General Fund of cities, is the
<br /> unusual cash flow experienced throughout the year. The City's General Fund cash disbursements are
<br /> made fairly evenly during the year other than the impact of seasonal services, such as snowplowing, street
<br /> maintenance, and park activities. Cash receipts of the General Fund are quite a different story. Taxes
<br /> comprise about 82.2 percent of the fund's total annual revenue. Approximately half of these revenues are
<br /> received by the City in July and the rest in December. Consequently, the City needs to have adequate
<br /> cash reserves to finance its everyday operations between these payments.
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