Agenda - Council - 06/27/2023 - Laserfiche WebLink

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GENERAL FUND The City's General Fund accounts for the financial activity of the basic services provided to the community. The primary services included within this fund are the administration of the municipal operation, police and fire protection, building inspection, streets and highway maintenance, and parks and recreation. The graph below illustrates the change in the General Fund financial position over the last five years. We have also included a line representing annual revenues to reflect the change in the size of the General Fund operation over the same period. $1610001000 $1400,000 $121000,000 $101000,000 $810001000 $610001000 $410005000 $210001000 � Fund Balanc o Cash (Net) Revenue General Fund Financial Position Year Ended December 31, e 2018 $854901127 $814221544 2019 $898801446 2020 $1050901053 $1010981653 2021 $10,449,489 $1015481733 $13,613,351 2022 $1150951052 $10,850,120 $14,718,976 $818461081 $1118561968 $12,305,492 $15,101,5487 The City's General Fund cash and investments balance at December 31, 2022 was $10,850,120, an increase of $301,387 from the previous year. Total fund balance at year-end was $11,095,052, an increase of $645,563 from the prior year. As the graph illustrates, the City has generally been able to maintain healthy cash and fund balance levels as the volume of financial activity has fluctuated. This is an important factor because a government, like any organization, requires a certain amount of equity to operate. 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 is a factor in determining the City's bond rating and resulting interest costs. A trend that is typical to Minnesota local governments, especially the General Fund of cities, is the unusual cash flow experienced throughout the year. The City's General Fund cash disbursements are made fairly evenly during the year other than the impact of seasonal services, such as snowplowing, street maintenance, and park activities. Cash receipts of the General Fund are quite a different story. Taxes comprise about 81.3 percent of the fund's total annual revenue. Approximately half of these revenues are received by the City in July and the rest in December. Consequently, the City needs to have adequate cash reserves to finance its everyday operations between these payments. As of December 31, 2022, the City continued to meet the fund balance policy goal of the General Fund, which is to maintain an unrestricted amount equal to 50 percent of the following years adopted operating budget. -11-