5.1. SR 05-14-2001 - Laserfiche WebLink

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City of Elk River March 15, 2001 Page Four It is important to maintain an adequate fund balance for the following reasons: • Expenditures are incurred somewhat evenly throughout the year. However, property tax and state aid revenues are not received until the second half of the year. An adequate fund balance will provide the cash flow required to finance the General Fund expenditures. • The City is vulnerable to legislative actions at the State and Federal level. The State continually adjusts the local government aid and property tax credit formulas and also has implemented levy limits. An adequate fund balance will provide a temporary buffer against those aid adjustments and the effects of levy limits. Over 70 percent of the General Fund revenue is from property taxes, property tax credits and local government aid. • Expenditures not anticipated at the time the annual budget was adopted may need immediate Council action. These would include capital outlay replacement, lawsuits and other items. An adequate fund balance will provide the financing needed for such expenditures. • A strong fund balance will assist the City in maintaining or improving its bond rating. A summary of the 2000 operations is as follows: Variance - Favorable Bud eg t Actual (Unfavorable) Revenue $ 5,872,100 $ 6,043,721 $ 171,621 Expenditures 5,877,000 5,804,752 72,248 Excess (Deficiency) of Revenue Over Expenditures (4,900) 238,969 243,869 Other Financing Sources (Uses) Operating transfers in 276,400 276,400 - Operating transfers out (132,637) (132,637) - Total Other Financing Sources (Uses) Excess (Deficiency) of Revenue and Other Financing Sources Over Expenditures and Other Financing Uses Fund Balance, January 1 143,763 143.763 - $ 138.863 382,732 24 69 2,312,880 Fund Balance, December 31 &105fil2