Laserfiche WebLink
<br />II <br /> <br />City of Centerville <br />May 4, 2006 <br />Page Fifteen <br /> <br />Fund balance should be maintained for the following reasons: <br /> <br />Purposes and Benefits <br /> <br />. Expenditures are incurred somewhat evenly throughout the year. However, currently, property tax and state aid revenues <br />are not received until the second half of the year. An adequate fund balance will provide the cash flow required to <br />finance the General fund expenditures until these revenue somces are received. <br /> <br />. The City is vulnerable to legislative actions at the State and Federal level. The State eliminated HACA aid with the 2001 <br />legislative session and imposed reductions of market value credit aid and local government aid for some cities. Levy <br />limits have also been implemented for municipalities in past legislative sessions. An adequate fund balance will provide <br />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 financing <br />needed for such expenditures. <br /> <br />. A strong fund balance will assist the City in obtaining, maintaining or improving its bond rating. The result will be better <br />interest rates in future bond sales. <br /> <br />A summary of the 2005 operations is as follows: <br /> <br />Excess of revenues over expenditures <br /> <br /> Variance with <br /> Final Final Budget <br /> Budgeted Actual Positive <br /> Amounts Amounts (Negative) <br />$ 2,107,900 $ 2,162,998 $ 55,098 <br /> 2,046,000 1,912,328 133,672 <br /> 61,900 250,670 188,770 <br /> <br />Revenues <br />Expenditures <br /> <br />Other financing sources (uses) <br />Sale of capital assets <br />Transfers in <br />Transfers out <br /> <br /> 66,989 <br /> 40,000 65,791 <br /> (102,000) (150,197) <br /> (62,000) (17,417) <br /> (lOO) 233,253 <br /> 1,316,103 1,316,103 <br />$ 1,316,003 $ 1,549,356 <br /> <br />66,989 <br />25,791 <br />(48,197) <br /> <br />Total other financing sources (uses) <br /> <br />44,583 <br /> <br />Net change in fund balances <br /> <br />233,353 <br /> <br />Fund balances, January 1 <br /> <br />Fund balances, December 31 <br /> <br />$ 233,353 <br /> <br />. The majority of the favorable variance in expenditures resulted from unspent general government capital outlay. <br /> <br />952.835.9090 · Fax 952.835.3261 <br /> <br />www.aemcpas.CODl <br />