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GENERAL FUND FINANCIAL POSITION
<br />The City's General Fund accounts for the financial activity of the basic services provided to the community.
<br />The primary services included within this fund are the administration of the municipal operation, police
<br />and fire protection, building inspection, streets and highway maintenance, and parks and recreation. The
<br />graph below illustrates the change in the General Fund financial position over the last five years. We have
<br />also included a line representing annual revenues to reflect the change in the size of the General Fund
<br />operation over the same period.
<br />General Fund Financial Position
<br />Year Ended December 31,
<br />.p L V, kik/V' A/
<br />$18,000,000
<br />$16,000,000
<br />$14,000,000
<br />$12,000,000
<br />$10,000,000
<br />$8,000,000
<br />$6,000,000
<br />$4,000,000
<br />$2,000,000
<br />$-
<br />2020
<br />2021
<br />2022
<br />2023
<br />2024
<br />$10,090,053
<br />$10,449,489
<br />$11,095,052
<br />$12,265,915
<br />$13,324,373
<br />Fund Balance
<br />$10,098,653
<br />$10,548,733
<br />$10,850,120
<br />$12,382,617
<br />$13,542,157
<br />O Cash (Net)
<br />$15,101,548
<br />$13,613,351
<br />$14,718,976
<br />$16,896,225
<br />$18,919,100
<br />Revenue
<br />The City's General Fund cash and investments balance on December 31, 2024, was $13,542,157, an
<br />increase of $1,159,540 from the previous year. Total fund balance at year-end was $13,324,373, an increase
<br />of $1,058,458 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.
<br />A trend that is typical to Minnesota local governments, especially the General Fund of cities, is the unusual
<br />cash flow experienced throughout the year. The City's General Fund cash disbursements are made fairly
<br />evenly during the year, other than the impact of seasonal services, such as snowplowing, street maintenance,
<br />and park activities. Cash receipts of the General Fund are quite a different story. Property taxes comprise
<br />about 78.0 percent of the fund's total annual revenue. Approximately half of these revenues are received
<br />by the City in July and the rest in December. Consequently, the City needs to have adequate cash reserves
<br />to finance its everyday operations between these payments.
<br />As of December 31, 2024, the City continued to meet the fund balance policy goal of the General Fund,
<br />which is to maintain an unassigned amount equal to 50.0 percent of the following years adopted operating
<br />budget plus prior year encumbrances (if any).
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