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<br />GENERAL FUND
<br />
<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, street maintenance, and parks and recreation.
<br />The graph below illustrates the change in the General Fund financial position over the last five years. We
<br />have also included a line representing annual expenditures and transfers out to reflect the change in the
<br />size of the General Fund operation over the same period.
<br />2018 2019 2020 2021 2022
<br /> Fund Balance $3,340,369 $3,215,583 $3,380,506 $3,169,812 $3,366,237
<br /> Cash Balance $3,850,270 $3,946,278 $4,032,832 $5,194,930 $5,667,878
<br /> Exp & Trans Out $5,181,629 $5,549,691 $5,064,618 $5,515,284 $5,305,552
<br />$–
<br /> $500,000
<br /> $1,000,000
<br /> $1,500,000
<br /> $2,000,000
<br /> $2,500,000
<br /> $3,000,000
<br /> $3,500,000
<br /> $4,000,000
<br /> $4,500,000
<br /> $5,000,000
<br /> $5,500,000
<br /> $6,000,000
<br />General Fund Financial Position
<br />Year Ended December 31,
<br />
<br />The City’s General Fund cash and investments balance at December 31, 2022 was $5,667,878, an
<br />increase of $472,948 from the prior year. Total fund balance at December 31, 2022 was $3,366,237, an
<br />increase of $196,425 from the prior year. This fund balance level represents approximately 65 percent of
<br />the City’s annual General Fund expenditures based on 2022 expenditure levels, which compares to a
<br />prior year fund balance level of 64 percent. The overall impact of operations on fund balance was
<br />$616,885 better than anticipated in the final budget.
<br />
<br />As the graph illustrates, the City has generally been able to maintain stable cash and fund balance levels
<br />as the volume of financial activity has fluctuated. This is an important factor because governments, like
<br />any organization, requires a certain amounts 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 />
<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,
<br />street maintenance, and park activities. Cash receipts of the General Fund are quite a different story.
<br />Property taxes comprise approximately 72 percent of the fund’s total annual revenue. Approximately half
<br />of these revenues are received by the City in July and the rest in December. Consequently, the City needs
<br />to have adequate cash reserves to finance its everyday operations between these payments.
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