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Financial Analysis of the Government's Funds
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<br />As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal
<br />requirements.
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<br />Governmental funds. The focus of the City's governmental funds is to provide information on near-term inflows,
<br />outflows and balances of spendable resources. Such information is useful in assessing the City's financing
<br />requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources
<br />available for spending at the end of the fiscal year.
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<br />As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of
<br />$24,310,175. Approximately 48% of this total amount ($11,711,817) constitutes unreserved fund balance, which is
<br />available for spending at the City's discretion. The remainder of fund balance ($12,598,358) is reserved to indicate that
<br />it is not available for new spending because it has already been committed to provide for 1) debt service ($6,391,702),
<br />2) capital projects ($3,376,718), 3) landfill mitigation ($2,280,724), or 4) a variety of other restricted purposes
<br />($549,214).
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<br />The general fund is the chief operating fund of the City of Elk River. The general fund increased by $541,460 in 2003,
<br />which was primarily due to the increase in building related permit revenues.
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<br />The improvement bonds increased by $499,503, which is primarily due to the prepayment of assessments on
<br />improvement projects. The public safety/city hall expansion decreased by $5,498,114, which is attributable to timing
<br />differences in project revenues and expenses.
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<br />Proprietary funds. The City of Elk River's proprietary funds provide the same type of information found in the
<br />government-wide statements, but in more detail.
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<br />Unrestricted net assets in the respective proprietary funds are municipal liquor - $2,545,947, garbage - $50,885, sewer -
<br />$4,961,544, water o $3,019,902, and electric - $2,592,904. All proprietary funds had increases in net assets, with the
<br />exception of the garbage fund. The garbage fund net assets were intentionally decreased through a rate subsidy to
<br />customers.
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<br />General Fund Budgetary Highlights
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<br />Differences between the original budget and the final budget for the general fund amounted to $243,200. The revenue
<br />and expenditure budgets were amended for the loss of state-aid funds and higher than anticipated building related
<br />revenues. While revenues exceeded budgetary estimates and expenditures were less than budgetary estimates, the fund
<br />realized an increase in fund balance of $541,460.
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<br />Capital Asset and Debt Administration
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<br />Capital Assets. The City of Elk River's investment in capital assets for its governmental and business type activities
<br />as of December 31, 2003, amounts to $140,699,830 (net of accumulated depreciation). This investment in capital
<br />assets includes land, buildings, improvements, equipment and in~astructure.
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