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Financial Analysis of the Government’s Funds
<br />Governmental funds.
<br /> 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 requirements.
<br />In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for
<br />spending at the end of the fiscal year.
<br />As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of
<br />$27,957,749. Approximately 64% of this total amount ($17,978,723) constitutes unreserved fund balance, which is
<br />available for spending at the City’s discretion. The remainder of fund balance ($9,979,026) is reserved to indicate that it is
<br />not available for new spending because it has already been committed to provide for 1) debt service ($2,262,414), 2) capital
<br />equipment/projects ($5,602,916), 3) landfill mitigation ($1,950,625), or 4) a variety of other restricted purposes ($163,071).
<br />The General fund is the chief operating fund of the City of Elk River. The total fund balance of the General fund increased
<br />by $215,005 in 2006, which was primarily due to increased revenues collected for licenses and permits, charges for services
<br />and interest income. In addition, expenditures were under budget due primarily to personnel vacancies.
<br />The Park Dedication fund decreased by $1,332,006, due to the acquisition of a golf course and park land. The
<br />Improvement Bonds fund decreased by $4,338,873, which is due to the early redemption of several bond issues. The
<br />Capital Projects fund increased by $384,897, due primarily to transfers in of closed improvement bond funds.
<br />Proprietary funds.
<br /> 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.
<br />Unrestricted net assets in the respective proprietary funds are Municipal Liquor - $2,674,926, Garbage - $184,426, Sewer -
<br />$5,619,169, Water - $2,446,495, and Electric - $3,134,032. All proprietary funds had increases in net assets.
<br />General Fund Budgetary Highlights
<br />Differences between the original budget and the final budget for the General fund amounted to $339,650. The revenue and
<br />expenditure budgets were amended to reflect increased revenues in licenses and permits, charges for services, and interest
<br />income and expenditure increases in the public safety category was due to increased activity and demand for services and
<br />the purchase of a public safety records management system.
<br />Capital Asset and Debt Administration
<br />Capital Assets
<br />. The City of Elk River’s investment in capital assets for its governmental and business type activities as of
<br />December 31, 2006, amounts to $178,174,218 (net of accumulated depreciation). This investment in capital assets includes
<br />land, buildings, improvements, equipment and infrastructure.
<br />Additional information on the City’s capital assets can be found in Note 3C on pages 45 - 47 of this report.
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