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<br />. <br /> <br />. <br /> <br />. <br /> <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 are incurred somewhat evenly throughout the year. However, propel1y tax and state aid revenues are not <br />received until the second half of the year. An adequate fund balance will provide the cash Jlow required to finance the <br />general fund expenditures. <br /> <br />. The City is vulnerable to legislative actions at the State and Fcderallevel. The State eliminated HACA aid with the <br />200 1 legislative session and imposed reductions of market value credit aid and local government aid for some cities. <br />Levy limits have also been implemented for municipalities in past legislative sessions. 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, lmvsuits and other items. An adequate fund balance will provide the financing <br />needed for such expenditures. <br /> <br />. A strong fund balance will assist the City in maintaining, improving or obtaining a bond r<:lting. <br /> <br />The 2003 operations arc summarized as follows: <br /> <br />Revenue <br />Expenditures <br /> <br /> Variance - <br /> Favorable <br />~~J_ ^~~-w.L (Unfavorable ) <br />$ 2,748,060 $ 3,173,384 $ 425,324 <br /> 3,125,711 3,146.927 (2L216) <br /> (377.651 ) 26,457 404.1 08 <br /> 559,905 554,155 (5,750) <br /> (218.945 ) (218.945) <br />_ 340"9i>Q .~__m~!Q __Ji,750) <br /> <br />Excess (deficiency) of <br />revenue over expenditures <br /> <br />Other financing sources (uses) <br />Operating transfers in <br />Operating transfers out <br /> <br />Total other financing sources (uses) <br /> <br />Excess (deficiency) of revenue <br />and other financing sources over <br />expenditures and other financing uses <br /> <br />$ <br /> <br />361,667 $ <br /> <br />(36691 ) <br /> <br />398,358 <br /> <br />Fund balance, January I <br /> <br />753.172 <br /> <br />Fund balance, December 31 <br /> <br />LJ.lJ4,Jli2 <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 />1):>2.8:1:>.901)0 . fax 9.)2.8:~;d:261 <br /> <br />www.at"mcpa.._com <br />