2021 CAFR - Laserfiche WebLink

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CAPITAL ASSETS AND LONG-TERM LIABILITIES (CONTINUED) State statutes limit the amount of general obligation debt a governmental entity may issue to three percent of its total assessed valuation. The current legal debt margin for the City is $65,526,968. 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 2.2%, which is a decrease from a rate of 4.4% a year ago. The state of Minnesota shows an average unemployment rate of 2.6%, whereas, nationally the unemployment rate is 3.7%. • The booming housing market has increased Ramsey's estimated market value from $3.346 billion in 2021 to $4.140 billion in 2022 for a percentage increase of approximately 24%. • The COVID-19 pandemic, beginning in year 2020, caused substantial volatility in the economy and changes to the City's operations and is expected to continue to impact the City's finances and operations in fiscal 2022 and beyond. Significant uncertainty remains about the breadth and duration of the pandemic. At this time, the City is unable to determine what effect this may have on its future financial condition. All of these factors were considered in preparing the City of Ramsey's budget for the 2022 fiscal year. The water and recycling utility rates were increased for the 2022 budget year. The water utility, which has a tiered rate structure, will increase by an average of 2.5% for all customers. The sewer utility, which has a flat rate structure for residential accounts only, will see an increase of 1%. Commercial sewer accounts, whose charges are based on their water usage, will also see a rate increase of 1%. The increased rates not only offset current maintenance costs and depreciation, but help finance future utility improvements that are documented in the City's ten-year Capital Improvement Plan. Most notably, the city's water treatment facility that is to begin construction in the summer of 2022. The funding mechanism for the City's Pavement Management Program has changed for 2022. The city will no longer be collecting quarterly franchise fees from the respective gas and electric utilities, but have instead placed the respective funding for roads on the property tax levy. 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. 36