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<br />City of Arden Hills <br />March 31, 2000 <br />Page Three <br /> <br />. <br /> <br />It is important to maintain an adequate fund balance for the following reasons: <br /> <br />Expenditures are incurred somewhat evenly throughout the year. However, property tax and state aid revenues are <br />not received until the second half of the year. An adequate fund balance will provide the cash flow required to <br />fmance the General Fund expenditures. <br /> <br />The City is vulnerable to legislative actions at the State and Federal1eveI. In recent years, the State had adjusted the <br />local government aid and property tax credit formulas and implemented levy lintits. An adequate fund balance will <br />provide a temporary buffer against those aid adjustments and levy limits. <br /> <br />Expenditures not anticipated at the time the annual budget was adopted may need immediate Council action. These <br />would include capital outlay replacement, lawsuits and other items. An adequate fund balance will provide the <br />fmancing needed for such expenditures. <br /> <br />A strong fund balance has assisted the City in determining its bond rating. The City received an AAA rating from <br />Standard and Poors on its 1998 bond issue. <br /> <br /> A sunnnary of the 1999 operations is as follows: <br /> V ariance ~ <br /> Favorable <br /> Budget Actual (Unfavorable ) <br /> Revenue $ 2,540,814 $ 2,825,921 $ 285,107 <br />. Expenditures 2.357.910 2.20 1.250 156.660 <br /> Excess of Revenue Over Expenditures 182.904 624.671 441.767 <br /> Other Financing Sources (Uses) <br /> Operating transfers in 2,200 (2,200) <br /> Operating transfers out (I 82.550) (598.500 ) (415.950) <br /> Total Other Financing Sources (Uses) (I 80.350) (598.500 ) (418.150) <br /> Excess of Revenue and Other Financing <br /> Sources Over Expenditures and <br /> Other Uses $ 2554 26,171 $ 23617 <br /> Fund Balance, January I 575.223 <br /> Fund Balance, December 31 $ 601.394 <br /> <br />DRAFT <br /> <br />. <br />