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IV-6CITY OF ELK RIVER MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2019 Business-type activities. Business-type activities increased the City of Elk River's net position by $2,570,632 in 2019 as compared to an increase in net position of $3,845,545 in 2018. Key elements of this decrease in net income are as follows: • capital grants and contributions decreased $1,017,408 due to utility connection fees related to building activity in 2019. • Investment earnings increased $236,805 due to 2019 being a better investing year than 2018 for the types of investment held by the City. • Liquor fund operating expenses increased $538,714 due to inventory purchases related to increased liquor sales. • Garbage fund operating expenses decreased $132,474 due to a reduction in waste disposal fees. • Stormwater fund operating expenses increased $390,855 due to storm water pond maintenance projects conducted every other year. • Electric fund operating expenses decreased $479,925 due to purchased power expenses decreased 7%. $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Expenses and Program Revenues-Business-Type Activities II •• ----•• Municipal Liquor Sewer Garbage StonnW-Electric w-"Raveruea •Expenses CITY OF ELK RIVER MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2019 Revenues by Source-Business-Type Activities ca pita I Grants and Contributions, 2.31%._ ------... Unrestricted Investment Earnings, 1.28% Financial Analysls of the Government's Funds -·---·ChargesforServlces, 96.41% Governmental funds. The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. in particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $57,018,186. Approximately 9% of this total amount ($4,859,907) constitutes unassigned fund balance. The remainder of fund balance ($52, 158,279) is not available for new spending because it is either 1) nonspendable ($249,322), 2) restricted ($28,548,680), 3) committed ($10,182,700) or 4) assigned ($13,177,577) for other purposes. The General fund is the chief operating fund of the City of Elk River. The total fund balance of the General fund increased $210,041 during the current year, resulting primarily from budgeted transfers in. The Active ER Projects fund increased $24,554,769 due to the issuance of the 2019A G.O. Sales Tax Revenue Bonds in the amount of $32,715,000, issued to finance the acquisition and betterment of certain recreational facility improvements, park improvements, trail improvements, and the dredging of Lake Orono, which was partially offset by expenditures incurred on the related projects. The Pavement Management fund decreased $535,789 due to current year expenditures exceeding the collection of franchise fees and intergovernmental revenues. 154
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