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STAFF AGENDA REPORT
DATE:
8C
RALPH TESCHNER, FINANCE DIRECTOR
CONSIDER APPROVAL OF RESOLUTION 96-92
DESIGNATING VARIOUS GENERAL FUND RESERVE
APPROPRIATIONS
SEPTEMBER 3,1996
AGENDA #:
PREPARED BY:
SUBJECT:
INTRODUCTION:
The General Fund balance for the City increased by $483,004 from
$1,485,015 to $1,968,019 during the past year as indicated within
the 1995 Financial Report. In accordance with the City Council's
previous direction, we are requesting specific designation of these
funds.
The increase in the 1995 year end General Fund balance was
created by two circumstances. The first was careful expenditure of
budgeted funds. The City Manager, Finance Director and City
department and division supervisors expect that purchases are made
only if needed, even if funds are available. The second source is
revenues which exceeded our projections. In this case, the major
revenue categories that were above projections were elastic
building related revenues and the Police and Fire agreement income
with the Dakota Community.
BACKGROUND:
In previous years, the Council has designated the use of fund
balances. For communities like Prior Lake, this designation is one
of the only means available to establish necessary "rainy day"
funds.
On 7/15/91 the Council approved a $75,000 transfer to the Capital
Park Fund for the completion of a park trail through Lakefront Park
from CSAH 21. On 7/6/92 the Council approved an $85,000
transfer for the purpose of a concrete walk along Franklin Trail.
Approved in the 1992 Audit was the transfer of $200,000 to
provide funding for the City's compensated absence liability
(vacation and sick leave accrual) as recommended by the State
Auditor's Office.
Most recently on June 6, 1994 the City Council approved
Resolution 94-27 which not only established a revolving equipment
fund with a $300,000 appropriation but also established a working
capital designation of the City's General Fund balance equivalent
to 300/0 of the current year's Operating Budget. It was the decision
of the Council at that time, based upon the availability of excess
16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
4. Equipment Fund - $100,000
The City's present balance in the Equipment Fund is maintained at
approximately $206,000. The original balance was $300,000. The
intent by the Council when creating this fund was that it would
stabilize our debt level associated with equipment certificate
financing and thereby minimize property tax increases. This
allocation would build the fund back to an amount, adjusted for
inflation, slightly above its beginning appropriation and ensure
adequate resources for equipment replacement without the added
property tax burden.
ISSUES:
There are other alternatives for the Council to consider as well. All
of the unexpended budget appropriations could remain in the
General Fund balance, thereby preserving our savings balance.
Such action would increase the balance above the 30% level and
would be responsive to the auditor's suggestion that the balance be
more like 350/0 or 400/0. Attached is an excerpt from a State
Auditors' Office report showing the General Fund balances, as a
percentage of total expenditures, for all Minnesota cities over 2,500
in population. As indicated, Prior Lake appears to be in the median
range.
The Council could use the excess revenue to reduce the city's
operating budget tax levy. The problem with this is that it is a short
term fix and unless you provide for this tax relief on an ongoing
basis, the next year's budget is encumbered with an automatic price
inflator. We are then forced to make up this difference before any
other budgetary increases are factored in. The result is highly
fluctuating property tax rates. Nor has anything of long term value
been accomplished.
Staff has identified the first four as prominent needs that the
Council has previously recognized. Obviously there are many other
needs which individual councilmembers may perceive. In
evaluating these considerations, Staff believes it is important that
the $483,000 be leveraged in such a manner as to avoid anyone
time utilization that may not have any long standing impact upon
the taxes. Instead, these monies should ideally be set aside as
reserves that will benefit the City on a longer term basis.
We are pleased that through careful budgeting and a positive
development market in our community that these funds. are
available to be earmarked by the Council to add to the fiscal
strength of Prior Lake and provide immediate tangible benefits to
its taxpayers.
A9607.DOC
ALTERNATIVES:
Recapping the options, the following alternatives are available to
the City Council:
1. Appropriate the funds according to the following amounts and
purposes:
a) Satellite Fire Station Site Acquisition - $60,000
b) Lakefront Park Improvements - $75,000
c) Severance Compensation Fund - $100,000
d) Equipment Fund - $100,000
2. Maintain 100% of the excess reserves within the existing
General Fund balance.
3. Approve a portion or all of the available $483,000 to specific
expenditures or fund reserves as identified by the Council.
4. Consider a one-time property tax reduction in an amount to be
determined by the City Council.
RECOMMENDATION: Staff would recommend Alternative # 1.
FISCAL IMPACT: Depending upon Council action, the General Fund balance of
$1,968,000 would be reduced to a maximum of the $1,633,000
necessary to support the 30% working capital threshold.
MOTION REQUIRED: Motion and second to approve Resolution 96-92 Designating
Various General Fund Reserve Appropriations as determined by the
City Council.
A9607.DOC
RESOLUTION 96-92
RESOLUTION DESIGNATING VARIOUS
GENERAL FUND
RESERVE APPROPRIATIONS
MOTION BY: SECOND BY:
WHEREAS, The City of Prior Lake's General Fund balance on December 31,1995 increased by
$483,004.00 to an amount of$1,968,019.00; and
WHEREAS, It is the decision of the City Council to review, on an annual basis, the availability of
such reserves and to allocate these funds in a manner that would best serve the
community on a long term basis.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, that the
following appropriation transfers from the General Fund balance are hereby authorized as follows:
Purpose
Fund Transfer
Amount
1. Satellite Fire Station Site Acquisition
2. Lakefront Park Improvements
3. Compensated Absence Reserve
4. Equipment Reserve
5 . Working Capital Increase
Construction Fund Account
Construction Fund Account
Severance Compensation Fund
Equipment Fund
General Fund
Total Reserve Designations...
$60,000
$75,000
$100,000
$100,000
$148.000
$483,000
Passed and adopted this 3rd day of September, 1996.
YES
NO
Andren
Greenfield
Kedrowski
Mader
Schenck
Andren
Greenfield
Kedrowski
Mader
Schenck
{ Seal}
City Manager
City of Prior Lake
RES9692.DOC
16200 Eagle Creek Ave. S.E.. Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
Table 3
1994 Unreserved General Fund Balance
As a Percent of Total Current Expenditures *
Cities Over 2,500 in Population
Unreserved as
Total A Percent of
Unreserved Unreserved Total Curren t Total
City Desi~ated Undesi~ated Unreserved ExPen d itu res ExPenditures
MAHIOMEOI ..1,502',560 .. :"5'1,824 1~54,384 1,180,151 131.7%
DELANO 641,372 1,137,175 1,778,547 1,397,324 127.3%
DEEPHA YEN 1,.451,047 0 . <lA51,047 1,333,572 '108.8%
KASSON 35,000 1,039,142 1,074,142 993,293 108.1%
LAUDERDALE 0 473,073 473,073 437,976 108.0%
IN1ERNATIONAL FALLS 0 4,808,933 4,808,933 4,503,560 106.8%
ST. PAUL PARK 545,300 754,375 1,299,675 1,312,713 99.0%
ST. JOSEPH 606,016 199,411 805,427 818,553 98.4%
GRAND RAPIDS 3,930,746 0 3,930,746 4,164,118 94.4%
W AfIE PARK 82,689 1,281,405 1,364,094 1.460,343 93.4%
GLENWOOD 967,654 0 967,654 1,053,070 91.9%
CANNON FALLS 679,000 838,510 1.517,510 1,683 ,217 90.2%
HERMA.N1OWN 777,000 681,013 1,458,013 1,620,~81 90.0%
MEDINA 0 1,243 ,920 1,243,920 1,400,664 88.8%
cmCLE PINES 899,188 90,213 989,401 1,143,161 86.5 %
MONTICELLO 1,474,071 484,290 1,958,361 2,284,258 85.7%
SARTELL 1,001,102 0 1,001,102 1,206.402 83.0%
SHOREWOOD 1,497.678 0 1,497,678 1,852.877 80.8%
LAKE ELMO 813,322 0 813,322 1,010,938 80.5%
VIRGINIA 4,522,362 1,047,911 5,5iO,2i3 6.987,847 79.7%
lAKE CITY 500,000 716,219 1,216,219 1,572,447 77.3%
STEW ARTVn..LE 83,571 749,794 833,365 1,150,436 72.4%
GOLDEN V ALLEY 5,855,292 220,191 6,075,483 8,394,909 72.4%
OAK PARK HEIGHI'S 1,194,682 3,153 1,197,835 1.657,526 72.3%
OLIVIA 455,000 224,212 679,212 946,448 71.8%
MORA 0 900,316 900,316 1,273 ,342 70.7%
UTILE CANADA 1,059,798 0 1,059,798 1,509,919 70.2%
OAK GROVE 0 602,680 602.680 862.667 69.9%
STAPLES 200,000 407,200 607,200 869,171 69.9%
V ADNAlS HEIGHTS 820,000 895,480 1,715,480 2,480,849 69.1 %
WASECA 1.958,096 0 1,958,096 2,833,390 69.1 %
EAST BEIHEL 0 626,605 626,605 92..1,414 67.9%
OAKDALE 2,515 ,511 870,622 3,386,133 5,023,855 67.4%
BAYPORT 73,969 706,932 780,901 1,159,376 67.4%
MELROSE .606,761 239,554 846,315 1,267,753 66~8%
FAIRMONT 2,657,986 244,167 ~902,153 4,369,804 66.4%
FALCON HEIGHTS 548,317 "::183,490 731,807 .1,110,745 65.9%
HAM LAKE . . 875,267 0 875,267 1,342,646 65.2%
WESTST~.PAUL ..... . . .. .. .:.3'~S29 ,795 .. ')\\303 ',229' . . '.><3~833,024 5',949,359 .' ..64.4%
FRIDLEY 6,574,914 228,316 6,803,230 10,655,843 63.8%
wn..LMAR ".:.5',213,041 ..0.. 5,213,041 8,167,174 <63~8%
LONG pRAIRIE 400,000 16.1,589 561,589 897 ,493 62.6%
NEW'PRAGUE . .' 733,257 . ...2.11,047 944;;04 1,530,104 >61..7%
RAMSEY 1,480,115 266,195 1,746,310 .2,863,954 61.0%
ROCKFORD .::~96,551 . Q . . ,.::.:.396,551 '., ..:'658,28..1 . ........... ::::>:::@~%
HASTINGS 2,189,553 1,123,937 3,313,490 5,518,181 60.0%
ALBERT LEA . 2,004 ,208 ...3',1'78,832 5,183,040 8,690,429 . . ..... .....59.6%
21
Table 3
1994 Unreserved General Fund Balance
As a Percent of Total Current Expenditures (continued) *
Cities Over 2,500 in Population
City
Unreserved
Desienated
Unreserved
Undesienated
Total
Unreserved
Total
Current
Expenditures
Unreserved as
A Percent of
Total
Expenditures
NORm OAKS 540,832 0 540,832 907,151 59.6%
SmL W A1ER 2~921,033 0 2,921,033 4,941,866 c. '59~ 1%.
PRINCETON 641,800 39,771 681,571 1,164,108 58.5%
MOUNDS VIEW 1,937',130 62~204 1,999,334 3,420,519 . ':58.5%
BEMIDJI 2,395,932 272,432 2,668,364 4,575,195 58.3%
BELLE PLAINE 0 507,599 507,599 874,469 58.0%
MENOOTA HEIGHIS 1,272,360 478,662 1,751,022 3,066,373 57.1%
MANKA TO 6,190,000 379,098 6,569,098 11,525,168 57.0%
BENSON 317,425 515,376 832,801 1,504,731 55.3%
EDINA 6,867,639 994,414 7,862,053 14,341,855 54.8%
FARIBAUL T 3,754,850 0 3,754,850 6,930,020 54.2%
UNO LAKES 1,800,196 0 1,800,196 3,368,895 53.4%
BIG LAKE 574,342 0 574,342 1,120,450 51.3%
ST. JAMES 608,994 83,588 692,582 1,381,007 50.2%
SLEEPY EYE 0 659,506 659,506 1,315,776 50.1 %
AUSTIN 3,571,884 1,060,334 4,632,218 9,371,528 49.4%
BROOKL YN CENTER 5,109,339 0 5,109,339 10,397,797 49.1%
PARK RAPIDS 0 495,253 495,253 1,010,782 49.0%
CRYSTAL 2,853,003 402,950 3,255,953 6,685,773 48.7%
NEW BRIGI-ITON 4,569,234 0 4,569,234 9,530,504 47.9%
BLAINE 4,182,119 0 4,182,119 8,791,161 47.6%
BRECKENRllXiE 851,979 0 851,979 1,793 ,520 47.5%
LUVERNE 685,793 0 685,793 1,445,361 47.4%
ST. CHARLES 0 392,885 392,885 833,955 47.1 %
WOODBURY 5,127,817 350,017 5,477,834 11,743,189 46.6%
DElROrr LAKES 249,730 1,106,528 1,356,258 2,920,442 46.4%
EAGAN 5,000,000 1,077,697 6,077,697 13 ,097,810 46.4%
NEW HOPE 2,799,720 369,602 3,169,322 6,919,757 45.8%
MAPLEWOOD 5,092,102 0 5,092,102 11,263,971 45.2%
Q.OQUET 1,752,525 546,756 2,299,281 5,088,721 . 45'.2%
ORONO 137,421 1,248 ,592 1,386,013 3,091,541 44.8%
COTIAGE GROVE 3,460,799 0 3,460,799 7,732,391 .44~8%
DILWORTII 295,458 0 295,458 667,739 44.2%
JACKSON . '.624,505 0 . 624,505 1,415,755 '. <'>":..::,44.1%.
SHAKOPEE 650,000 1,577,747 2,227,747 5,055,430 44.1 %
COLUMBIA HEIGfITS." '3,431,144 '0 .. .... .'. :3,431,144 7,825 ,747 ':::"}::':.:::'43.8%
WINONA 5,154,193 0 5,154,193 11,823,607 43.6%
OWAlONNA .' ...3,500,000 . .:.Y82,863" . 3,582,863 8,356,757 ...... .42.9%
JORDAN 402,674 0 402,674 944,085 42.7%
RED. WING. 3,783,965 0 3,783,965" 9J028,192 . .............-... ,':~L9%
HOPKINS 0 2,817,505 . 2,817,505 6,769,355 41.6%
. .
MINNETQNKA U .5,590,703' .. . : <:5,590,703 13,723,255 .' \:4().7%
..................
lAKEVILLE 3,162,536 0 3,162,536 7,852,397 403%
BURNsvn.LE ::.3",650,319 '.:..2~.703 ~()60 ... .. 6,353,979 15,809,362 .. · :.:.:) :??::::\:40.2%
. . . . .. ......' ,. .
...... . ..' ..
WHITE BEAR LAKE 0 2,417 ,09~ .' ..... 2,417,099 6,040,355 . 40.0%
WACDNIA' .. .. :: ::.- ....:.: ~;':::-;':::":.: :.:::. ":.:<::94,604 }'437~.o91".. . .:.' · ./:.:. '." 531,695 .. ':.-1,328,790' .' ': .....:/:.:.,:.:::::::.40.0%
. . ...... ...
. . ....
PL YMOUIH 5,852,769 0 5,852,769 14,778,104 39.6%
22
Table 3
1994 Unreserved General Fund Balance
As a Percentof Total CurrentExpenditures(continued) *
Cities Over 2,500 in population
Table 3
1994 Unreserved General Fund Balance
As a Percent of Total Current Expenditures (continued) *
Cities Over 2,500 in Population
Unreserved as
Total A Percent of
Unreserved Unreserved Total Current Total
City DesiVlated Undesipated Unreserved Expenditures Expenditures
lWO HAROORS 0 422,929 422,929 2,087,704 20.3%
EDENPRAIRIE 0 1,779A61 3,779,461 19,351,281 :19.5%
MONTEVIDEO 460,655 0 460,655 2,400,065 19.2%
EAST GRAND FORKS' 636~987 582,827 1,219,814 6,420,260 ::-19.0%
RICHFIELD 2,770,643 0 2,770,643 14,964,652 18.5%
OTSEGO 0 214,919 214,919 1,206,609 ..:47.8%
AFION 0 117,167 117,167 717,256 16.3%
ROBBINSDALE 0 854,042 854,042 5,453,280 15.7%
ST. PETER 0 491,299 491,299 3,204,022 15.3%
LA CRESCEJ.'IT 137,154 0 137,154 918,683 14.9%
GRANITE FALLS 164,325 0 164,325 1,115 ,096 14.7%
NEW ULM 817,878 0 817,878 5,98J,848 13.7%
OSSFD 0 96,469 96,469 709,576 13.6%
LITGIFIELD 0 320,967 320,967 2,430,654 13.2%
ST. PAUL 24,247,286 386,292 24,633,578 206,323,226 11. 9%
NORTIiFIELD 0 557,483 557,483 5,014,884 11.1%
MAPLE GROVE 276,825 898,427 1,175,252 12,366,754 9.5%
DULUTI-I 1,497,422 3,815,751 5,313,173 55,955,619 9.5%
CHANHASSEN 1,210,72.1 0 1,210,72.1 13,100,535 9.2%
GOODVIEW 0 63, 155 6.1,155 713,855 8.8%
ELY 224,571 (26,931) 197,640 2,260,289 8.7%
~'vffiRIIXiE 0 129,580 129,580 1,602,978 8.1%
INDEPENDENCE 67,084 0 67,084 966,937 6.9%
HIBBING 0 720,906 720,906 10,585,677 6.8%
MINNEAPOLIS 4,091,385 13,901,936 17,993,321 290,482,845 6.2%
MOUNTAIN mON 0 95,486 95,486 1,564,492 6.1%
FOREST LAKE 0 128,781 128,781 2,114,925 6.1%
ST. MICHAEL 0 49,433 49,433 850,460 5.8%
BROOKLYN PARK 18,500 1,172,115 1,190,615 21,406,196 5.6%
LITILE FALLS . 132,386 0 132,386 2,435,615 5..4%
ST. a.OUD 1,218,880 0 1,218,880 23,594,787 5.2%
ALEXANDRIA 0 73,616 73,616 3,560,709 2.1%
scum ST. PAUL 156,533 0 156,533 8,685,024 1.8%
1HIEF RIVER FALLS 0 81,262 81,262 . 4,598,828 L8%
CROOKSTON 0 73 ,95 1 73,951 5,061,880 1.5%
CALEOONIA 0 ..2,728 2,.728 '.1,345,918 0.2%
WINDOM 0 0 0 1,449,218 0.0%
REDWOOD FALlS. 0 o. . ...0 .2,277,999 ::0.0%
NORTII MANKAlO 0 0 0 3,327 t 738 0.0%
DAYlON . . 0 ..: (~l,98Q) (11,980) .921,631:. .:::~13%
SAUK CEN'lRE 124,604 (299,705) (175,101) 1,600,138 . -10.9%
Total $277.950.570 $93.515.873 $371.466.443 $1.421.148.899 26.1 %
. Current expenditures excludes debt service and capital outlay.
24