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<br /> <br />• Expenditures not anticipated at the time the annual budget was adopted may need immediate Council action. These <br />would include capital outlay replacement, lawsuits acrd other items. An adequate fund balance will provide the <br />financing needed for such expenditures. <br />' The purposes and benefits of a General fund balance are as follows: <br />' Purposes and SeneLts <br />• Expenditures are incurred somewhat evenly throughout Lhe year. However, currently, property tax and state aid <br />revenues are not received until the second half of the year. An adequate fund balance will provide the cash flow <br />required to finance the General fund expenditures until these revenue sources are received. <br />• The City is vulnerable Yo legislative actions at the State and Federal level. The State continually adjusts the local <br />government aid and property tax credit formulas. We also have seen the State mandate levy limits for cities over <br />2,500 in population. An adequate fund balance will provide a temporary buffer against those aid adjustments or levy <br />limits. <br /> <br /> <br /> <br />• A strong fund balance will assist the Cit)~ in obtaining, maintaining or improving its bond rating. The result will be <br />better interest rates in fuh~re bond sales. <br />The 2007 operations are sununarized as follows: <br />Revenues <br />Expenditures <br />~I] <br /> <br /> <br />1 <br /> <br /> <br /> <br /> <br />Excess (deficiency) of revenues <br />over (under) expenditures <br />Other financing sources (uses) <br />Transfers ni <br />Transfers out <br />Total other financing sources (uses) <br />net change in fund balances <br />Fund balances, January 1 <br />Fund balances, December 31 <br />Some of the line items with significant variances are highlighted below: <br />Final <br />Budgeted Actual <br />Amounts Amounts <br />City of Elk River <br />March 13, 2008 <br />Page 7 <br />Variance with <br />Final Budget - <br />Positive <br />(negative) <br />$ 11,335,750 $ 11,474,914 $ 139,164 <br />11,453,400 11,110,570 342,830 <br />(117,650) 364,344 481,994 <br />436,400 441,803 >,403 <br />(194,600) (270,529) (75,929) <br />241,800 171,274 (70,526) <br />124,150 535,618 411.,468 <br />4,816,386 4,816,386 - <br />$ 4,940,536 $ 5,352,004 $ 411,468 <br />• The City received $117,008 in licenses and permits more than anticipated. <br />• The general govenunent department expenditures were $134,853 under budget. <br />952.835.9090 Fax 902.835.3261 <br />www.aemepas.com <br />