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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 $65,002,295. 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 6 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 2.8%, which is a increase from a rate of 2.2% a year ago. The state of Minnesota shows an average unemployment rate of 3.2%, whereas, nationally the unemployment rate is 3.3%. • The booming housing market has increased Ramsey's estimated market value from $3.346 billion in 2021/taxes payable 2022 to $4.125 billion in 2022/taxes payable 2023 for a percentage increase of approximately 23%. • In an attempt to suppress inflation, the Federal Reserve was very aggressive in raising short-term interest rates. The Federal Reserve increased interest rates seven times from March 2022 thru December 2022 with the interest rate increasing from 0.25% to 4.4%. This vast increase effected the City's operations and is expected to continue to impact the City's finances and operations in fiscal 2023 and beyond. 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 2023 fiscal year. The water and sewer rates are proposed to increase in July 2023. The water utility, which has a tiered rate structure, will increase by an average of 10% for all customers. The sewer utility, which has a flat rate structure for residential accounts only, will also see an increase of 10%. Commercial sewer accounts, whose charges are based on their water usage, will also see a rate increase of 10%. The increased rates not only offset current maintenance costs and depreciation, but will help finance the construction of a water treatment plant and other future utility improvements that are documented in the City's ten-year Capital Improvement Plan. 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