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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
<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 />General Fund Financial Position
<br />Year Ended December 31,
<br />,0U,VVV,VVV
<br />$5,500,000
<br />$5,000,000
<br />$4,500,000
<br />$4,000,000
<br />$3,500,000
<br />$3,000,000
<br />$2,500,000
<br />$2,000,000
<br />$1,500,000
<br />$1,000,000
<br />$500,000
<br />2019
<br />2020
<br />2021
<br />2022
<br />2023
<br />Fund Balance
<br />$3,215,583
<br />$3,380,506
<br />$3,169,812
<br />$3,366,237
<br />$3,205,735
<br />o Cash Balance
<br />$3,946,278
<br />$4,032,832
<br />$5,194,930
<br />$5,667,878
<br />$4,253,316
<br />Exp & Trans Out.1
<br />$5,549,691
<br />$5,064,618
<br />$5,515,284
<br />$5,305,552
<br />$5,514,657
<br />The City's General Fund cash and investments balance on December 31, 2023, was $4,253,316, a
<br />decrease of $1,414,562 from the prior year. Total fund balance on December 31, 2023, was $3,205,735, a
<br />decrease of $160,502 from the prior year. This fund balance level represents approximately 60.0 percent
<br />of the City's annual General Fund expenditures based on 2023 expenditure levels, which compares to a
<br />prior year fund balance level of 64.7 percent. The overall impact of operations on fund balance was
<br />$232,388 better than anticipated in the final budget.
<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 />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, street
<br />maintenance, and park activities. Cash receipts of the General Fund are quite a different story. Property
<br />taxes comprise approximately 74.0 percent of the fund's total annual revenue. Approximately half of
<br />these revenues are received by the City in July and the rest in December. Consequently, the City needs to
<br />have adequate cash reserves to finance its everyday operations between these payments.
<br />In
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