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<br />Financial Analysis of the Government's Funds
<br />Governmental Funds. 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 />$32;834,7] 8. Approximately 56% of this total amount ($18,375,117) constitutes unreserved fund balance, which is
<br />available for spending at the City's discretion. The remainder of fund balance ($14,459,601) 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 ($2,212,639), 2) capita]
<br />equipmenUprojects ($9,709,191), 3) landfill mitigation ($1,93>,921), or 4) a variety of other restricted purposes {$601,850).
<br />The General fund is the chief operating fund of the City of Elk River. The total fund balance of the Genera] fund increased
<br />by $535,6]8 during the current year, Key factors are as follows:
<br />• Licenses and permitfees exceeded budget by $117,000 resulting from a large industrial building project started in
<br />2007.
<br />• Intergovernmental revenues are over budget due to higher than anticipated police aid received from the state.
<br />• An increase in refunds and reimbursements for aiding the DNR in the northern Minnesota wildfires and shared
<br />building costs amibutable to Elk River Municipal Utilities.
<br />• Expenditures were under budget by 5342,830 due to personnel vacancies and sound fiscal control by city
<br />departments.
<br />• Increased transfers out funded the operations of the ice arena and golf course.
<br />The Library fund decreased by $2,627,861, due to the construction of a new library, The Improvement Bonds fiord
<br />decreased by $41,959, which is due to a reduction in tax levy needed to pay debt service requirements. The Street
<br />Improvements fund increased by $718,782, due primarily to prepaid special assessments and increased interest income.
<br />The Improvement Projects fund increased $391,872, due to prepaid special assessments and the payment of state-aid street
<br />funds. The YMCA fund increased $5,883,231, due to unspent bond proceeds issued to fund the construction of a recreation
<br />facility.
<br />Proprietary funds. The City of Ells 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 - $3,369,255, Garbage - $253,998, Sewer -
<br />S6,906,568, Water - $2,610,533, and Electric - S4,375,821. Alf 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 5124,150. The revenue and
<br />expenditure budgets were amended to reflect increased interest income due to market rate conditions and expenditure
<br />increases in the public safety category was due to increased activity and demand for services and the purchase of capital
<br />equipment.
<br />Capital Asset antl Debt Administration
<br />Capital Assets. The City of Elk River's investment in capital assets for its governmental and business type activities as of
<br />December 31, 2007, amounts to $188,331,156 (net of accumulated depreciation). This investment in capital assets includes
<br />land, buildings, improvements, equipment and infrastructure. The total increase in the City of Elk River's invest in capital
<br />assets for the current year was 6 percent (a 9 percent increase for governmental activities and a 3 percent increase for
<br />' business-type activities).
<br />Major capital asset events during the current fiscal year included the following:
<br />• $4,58Q448 for the completion of a library and construction on a recreation facility had reached $4,179,788 as of
<br />the end of the current fiscal year.
<br />• $1,335,392 in park acquisition and park improvements.
<br />• Street reconstruction projects in residential developments added $3,730,907 to construction in progress as of [he
<br />' end of the current year.
<br />• Additions of system improvements for Sewer - $590,720, Water - S 1,077,955 and Electric - $4,280,338.
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