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19 <br />City of Elk River <br />Management’s Discussion and Analysis <br /> <br /> <br />As management of the City of Elk River, Minnesota (the City), we offer readers of the City’s financial <br />statements this narrative overview and analysis of the financial activities of the City for the fiscal <br />year ended December 31, 2023. We encourage readers to consider the information presented here in <br />conjunction with additional information that we have furnished in our letter of transmittal, which <br />can be found starting on page 3 of this report. <br /> <br />FINANCIAL HIGHLIGHTS <br /> <br /> The assets and deferred outflows of resources of the City exceeded its liabilities and deferred <br />inflows of resources at the close of the most recent fiscal year by $253,740,871 (net position). <br />Of this amount, $52,639,649 (unrestricted net position) may be used to meet the City’s ongoing <br />obligations to citizens and creditors. <br /> <br /> The net position of business-type activities increased by $5,728,390 and net position of the <br />governmental activities increased by $2,696,722. This resulted in a total net position increase <br />of $8,425,112 for the City. <br /> <br /> As of the close of the current fiscal year, the City’s governmental funds reported combined <br />ending fund balances of $42,785,245, an increase of $263,062 from the prior year. <br /> <br /> At the end of the current fiscal year, unassigned fund balance for the General Fund was <br />$9,240,805. The City’s policy is to maintain a minimum of 40-45% of the following year’s budget <br />in unassigned fund balance. At year end, the unassigned fund balance is 43% of the 2024 <br />budgeted General Fund expenditures. <br /> <br />OVERVIEW OF THE FINANCIAL STATEMENTS <br /> <br />This discussion and analysis is intended to serve as an introduction to the City’s basic financial <br />statements. The City’s basic financial statements comprise three components: 1) government-wide <br />financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. <br />This report also contains other supplemental information in addition to the basic financial <br />statements themselves. <br /> <br />The financial statements also include notes that explain some of the information in the financial <br />statements and provide more detailed data. The statements are followed by a section of “combining <br />and individual fund financial statements and schedules” that further explains and supports the <br />information in the financial statements. Figure 1 shows how the required parts of this annual report <br />are arranged and relate to one another. In addition to these required elements, we have included a <br />section with “combining and individual fund financial statements and schedules” that provide details <br />about nonmajor governmental funds, which are added together and presented in a single column for <br />governmental activities in the basic governmental financial statements. <br /> <br />Page 140 of 464