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(Draft January 2002) Key Financial Strategies
<br /> For Elk River
<br />
<br />Equipment
<br />Acquisition
<br />Replacement
<br />
<br />and
<br />
<br />Capital equipment is an essential element of municipal
<br />services. The City creates and maintains 10-year
<br />projections of equipment acquisition and replacement
<br />needs.
<br />
<br />Timing On-going
<br />Estimated Cost
<br />
<br />Funding
<br />
<br />$500,000 to $600,000 per year.
<br />The City does not currently have a long-term funding plan
<br />for capital equipment. In the past, purchases have been
<br />financed with a combination of operating revenues,
<br />reserves and debt. While the City has the ability to borrow
<br />money for all types of capital equipment, a cash-based
<br />funding plan avoids the additional finance and interest
<br />expense.
<br />
<br />Equipment is currently financed through the General Fund
<br />and the Capital Outlay Reserve. The General Fund
<br />budgets approximately $320,000 for equipment purchases.
<br />The Capital Outlay Reserve receives $120,000 in transfer of
<br />funds from municipal utilities.
<br />
<br />Additional annual revenues will be needed in 2002 and
<br />beyond to provide for a sustainable funding plan. Property
<br />taxes and enterprise funds are the most likely sources.
<br />
<br />Financing all costs through the Capital Outlay Reserve
<br />would improve the ability for long-term planning.
<br />
<br />Capital Outlay Resewe
<br />
<br />R6,verlue
<br />
<br /> 1997 1998 1999 2000
<br />Property tax 299 0 0 0
<br />Landfill surcharge 0 0 0 0
<br />Interest 26,400 25,294 15,285 20,137
<br />C~her 207,340 70,495 210,973 145,699
<br />
<br />234,039 95,789 226,258 165,836
<br />
<br />Expenditures
<br />
<br />Current 46,113 27,097 29,663 103,360
<br />Capital 222,705 148,767 403,371 1187621
<br />
<br />268,818 175,864 433,034 221,981
<br />
<br />Ne~ transfers
<br />
<br />105,182 66,976 18,439 103,623
<br />
<br />Surplus/Defidt
<br />Fund Balance
<br />
<br /> 70,403 (13,099) (188,337) 47,478
<br />
<br />Begin 437,139 514,339 501,240 312,903
<br />End 507,542 501,240 312,903 360,381
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