7.3. SR 11-20-2006 - Laserfiche WebLink

Home Browse Search

P respectively. WELL MANAGED AND STABLE FINANCIAL OPERATION EXPECTED TO CONTINUE Moody's believes that future city operations will remain stable and healthy, given the city's demonstrated record of sound management with forward looking planning. Historically it has maintained healthy financial operations. Following five consecutive years of operating surpluses, the General Fund balance increased from $2.7 million, or 44.6% of General Fund revenues, in fiscal 2000, to $4.6 million, or 45.5% of revenues, in fiscal 2005. Despite the recent reductions in state aid, the city maintained healthy reserve levels and structural balance with prudent management strategies and tight expenditure controls in personnel and capital needs. Additionally, the city maintains over $4 million in the Municipal Liq'uor Fund, and historically transfers on an annual basis into the General Fund, and over half of the balance is liquid and available for operational purposes. Management maintains a General Fund policy of 41.5% of budgeted expenditures, and has never fallen below these levels. City officials expect to realize a modest surplus in the General Fund in fiscal 2006, and balanced operations for fiscal 2007. Given the conservative budgeting practices and history of prudent fiscal management, Moody's expects the city to maintain healthy financial operations over the near term. ABOVE AVERAGE DEBT BURDEN REFLECTS GROWING REGION Including the city's lease debt, the city's 6.1 % overall debt burden is above the state median of 3.4%, and largely reflects a growing region, and overlapping entities, such as Elk River Independent School District. The city's direct debt level of 1.4% is more manageable, with a portion of direct debt supported by special assessments and enterprise system revenues, thus further mitigating the impact on taxpayers. The city expects to issue over the near term for ongoing capital and infrastructure needs, including a recent voter-approved bond referendum for a new YMCA facility, $1.5 million for street repairs and improvements, and approximately $2 million for an electric utility system expansion. Given relatively quick principal amortization (77.5% retired in ten years), sustained tax base growth, significant supporting revenue streams (a sizeable portion is backed by special assessments on affected property), Moody's believes the city's debt profile should remain manageable over the near to medium term. KEY STATISTICS 2005 Population (Estimate): 21,000 2005 Full Value: $1.8 billion 2005 Full Value Per Capita: $88,331 2000 Per Capita Income, as a % of state: 94.0% 2000 Median Family Income, as a % of state: 115.1 % 2000 Median Home Value, as a % of US: 121.1 % Direct debt burden: 1.4%