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<br /> <br />City of Arden Hills . <br />April 1, 2004 <br />Page Five <br /> <br />The purposes and benefits of a general fund balance are as follows: <br /> <br />Purposes and Benefits <br /> <br />. Expenditures arc incurred somewhat evenly throughout the year. However,. property tax and state aid revenues are not <br />received until the second half of the year. An adequate fund balance will:provide,the cash flow required to finance the <br />general fund expenditures, <br /> <br />. The City is vulnerable to legislative actions at the State and Fcdemllevel. The State eliminated HACA aid with the <br />20011egislative session and imposed reductions of market value credit aid and local govcmTIl'cnt._aid for some cities. <br />Levy limits have also been implemented for municipalities' in past legislative sessions. An adeqliatefund 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 itelTIS. Anadequate fund balance will provide the financing <br />nceded for such expenditures. <br /> <br />. A strong fund balance will assist the City in maintainin:g; improving or obtai_ning a bond rating. <br /> <br />The 2003 operations are summarized as follows; <br /> <br />Excf'Ss (deficiency) of <br />.' ::,rey"eiiue overexp~nditures <br /> <br /> Variance - . <br /> Favorable <br /> Budget Actual (Unfavorable ) <br />$ 2,748,060 $ 3,] 73.384 $ 425,324 <br /> 3.125.711 3.235.986 (] 10.275) <br /> (377.651 ) 162.602) 315.049 <br /> 559,905 554,155 (5,750) <br /> (218945) 12] 8.945) <br /> 340.960 335.210 15.750) <br /> <br />Revenue <br />Expenditures <br /> <br />:<.lther financing sources-'(u~s) <br />';':-;.::9perating transfers in . <br />pp.~rating transfers out <br /> <br />T otaliit~~t-:financing sources {ilses ) <br /> <br />Excess (deficiency) of revenue <br />and other finan~i-r1-~',~Qtl~c:es over <br />expenditures and'dth-er:-flhancing uses <br /> <br />$ <br /> <br />136691 ) <br /> <br />272,608 $ <br /> <br />309 222 <br /> <br />Fund balance, January I <br /> <br />753.1 72 <br /> <br />Fund balance, December 31 <br /> <br />Ll,025 780 <br /> <br />. The largest item of variance on the revenue side was licenses and permits. This item had a favorable variance of <br />$315,200 or 74 percent of the total revenue variance. <br /> <br />. The largest item of variance in expenditures was public safety. This item had an unfavorable variance of$71,936 or. <br />65 percent of the total expenditure variance. <br /> <br />952.8iJ5.9090 . Fax 952.83,'}3261 <br /> <br />www.at:fficpliS.CQIn <br />