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<br />r I ---,} <br />( )j <br />~Iil <br /> <br />ITEM 5.15 <br /> <br /> <br />MEMORANDUM <br /> <br />FROM: <br /> <br />Mayor & City Council <br />Lori Johnson, Finance Director # <br /> <br />December 19, 1994 <br /> <br />DATE: <br /> <br />SUBJECT: 1994 Budget Amendments <br /> <br />Throughout the course of the year, the Council has taken various actions <br />which affect the 1994 budget. In order to incorporate those actions and to <br />reflect significant changes in revenues, budget amendments are being <br />presented to the Council for approval. Please keep in mind that budget <br />amendments are not intended to mirror actual revenues or expenditures, but <br />to acknowledge significant changes that have taken place in the budget <br />throughout the year. Budget amendments also allow the Council to increase <br />expenditures if revenues exceed budget projections. <br /> <br />. <br /> <br />In addition to reviewing budget amendments, it is necessary to review the <br />status of the General Fund cash flow reserve. It is important that the <br />reserve continue to keep pace with the increased budget for the upcoming <br />year. At the end of 1993, the unreserved General Fund balance was 27.79% <br />of the 1994 budget. Based on a proposed 1995 General Fund Budget of <br />$3,732,250, the 1994 ending fund balance should be in excess of $1,045,000 <br />or an increase of approximately $100,000 over the 1993 ending balance. This <br />is one item that the rating agencies focus on when reviewing the City's <br />financial condition and rating our bond issues. As we have discussed in the <br />past, our target is that the unreserved fund balance be approximately 35% of <br />the upcoming year's budget. Although we have continued to make slow but <br />steady progress over the last six years, there is still room for improvement. <br />Without a sufficient reserve, the General Fund would not have sufficient cash <br />to meet its expenditure obligations for the first six months of each year. <br />Even with the balance at approximately 28%, there are times when the <br />General Fund cash balance is in a deficit position. <br /> <br />Budget amendment detail will be distributed to the Council for discussion <br />and approval on Monday night. Preliminary numbers indicate that revenues <br />will exceed projections and expenditures will be close to projected levels. <br /> <br />. council:bdgtamen <br /> <br />13065 Orono Parkway · P.O. Box 490. Elk River, MN 55330. (612) 441-7420. Fax: (612) 441-7425 <br />