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The City Council is required to adopt a final budget by late December for the subsequent year. The budget
<br />is prepared by fund, function (e.g., public safety), and department (e.g., police). Transfers of appropriations
<br />between funds require the approval of the City Council. The legal level of budgetary control is the fund
<br />level. Budgeted amounts may be amended by the City Council. Governmental funds with annually adopted
<br />budgets include the General Fund and most special revenue funds. A budget was not legally adopted for
<br />the two special revenue funds established for specific short-term projects: Karth Lake Improvement District
<br />and American Rescue Plan Act Funds.
<br />The City's capital improvement program (covering five years), the pavement management plan (covering
<br />five years), and the Twin Cities Army Ammunition Plant (TCAAP) development plan, along with the
<br />annual budget, serve as the foundation for the City's financial planning, and the annual budget serves as
<br />the budget control.
<br />LOCAL ECONOMY
<br />A number of high -profile leaders in the medical, technology, and business sectors, including
<br />Boston Scientific, Land O'Lakes, Intricon, Delkor, Venture Solutions, Colder Products Company, and
<br />Presbyterian Homes, are located within the City. These leaders of industry provide high -paying jobs to
<br />skilled employees, which in turn creates a strong base for economic diversity, quality housing, and an
<br />involved citizenry.
<br />Because of its location in a region with a varied economic base, unemployment is relatively stable. During
<br />the past 10 years, the unemployment rate has fluctuated from a high of 7.0 percent in 2020, to a low of
<br />2.6 percent in 2022. The current rate is 2.7 percent.
<br />During the past 10 years, property taxes have remained a stable and significant source of total General Fund
<br />and special revenue fund revenues. Intergovernmental makes up approximately 2.9 percent of total revenues
<br />in the General Fund and special revenue funds for the current fiscal year.
<br />LONG-TERM FINANCIAL PLANNING
<br />The unassigned General Fund balance of $2,878,628 (47.4 percent of total subsequent year General Fund
<br />expenditures budgeted) does not meet the 50.0 percent target set by the City Council for budgetary and
<br />planning purposes. The total General Fund balance also includes $39,554 of nonspendable equity for
<br />prepaid items, $105,483 of assigned equity for compensated absences, and $182,070 assigned equity for
<br />the subsequent year's budget.
<br />The City's five-year capital improvement program and pavement management plan serve as the foundation
<br />for the City's long-term financial planning. To ensure the timely replacement of infrastructure, the City
<br />prepares long-term cost projections for the replacement of all city assets. Funding needs for capital
<br />replacements are reflected in tax levies and special assessments for capital assets, and are reflected in user
<br />fees established for the Water, Sewer, Surface Water Management, and Recycling Funds.
<br />Projections for the next 10 years indicate that property tax contributions, user fees, and investment income
<br />will need to be reevaluated to support scheduled replacements. In 2012, the City entered into a Joint Powers
<br />Agreement with Ramsey County to form a Joint Development Authority to acquire and develop a portion
<br />of the Army property, formerly known as TCAAP. Ramsey County officially acquired this property
<br />April 15, 2013, and has cleaned it to residential standards. The City completed the TCAAP Redevelopment
<br />Code in late 2016, which guides the land use on the site. In 2019, Ramsey County brought litigation against
<br />the City; however, that litigation was resolved in 2021 in the City's favor. The land remains
<br />shovel ready, pending future development agreements; any future development on the site is expected to
<br />add to the City's tax base and could include commercial/industrial, residential, and civic uses. The site is
<br />approximately 430 acres.
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