2020-11-12 CC Packet - Laserfiche WebLink

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Enterprise Funds The Water and Sewer funds maintain healthy balances. The Water fund has had its rates reduced by the amount of increase in the Storm Water Fund. This is in accordance to the plan of the City Council when the 5% annual increases were adopted in order to restore adequate fund balance in the Storm Water fund after the spending in conjunction with the downtown street project. We have healthy reserves in our General Fund, Water Fund, and Sewer Fund. These reserves can be used wherever necessary as determined by the City Council. Our cash flow forecast is designed to ensure money is in our bank account when needed. We have reviewed investment maturities and the timing of expenditures and receipts to make sure need to sell investments at a loss to cover our cash flow needs. We have addressed many of the concerns recently identified by the League of Minnesota Cities. We reduced our anticipated proceeds from building permits and pull-tab gambling receipts. We have conservatively budgeted for interest income at 1% of our cash balances. While short-term rates have dropped below that amount, our current investments are staggered out with maturities coming due over the next five years. Our portfolio should maintain a return within a reasonable margin of error of 1% over the next several years. Lastly, we are not highly dependent on Local Government Aid (LGA) from the state. Even a 20% decrease in this $75,626 aid represents only about a $15,000 revenue loss. Staff is happy to discuss any of these long-range financial issues and answer questions at any time with council, property owners, and residents. We plan to review these projections at least annually in order to keep the City Council informed on our financial progress.