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City reports about $1 million general‑fund surplus for 2024; enterprise funds mostly positive, fiber fund shows large deficit
Summary
Finance Director Dan Mike reported an unaudited roughly $1 million surplus in the general fund for 2024 driven by higher revenues (grants, police aid, investment income) and departmental savings; enterprise funds performed better than budget in several areas, while the city’s fiber‑optic fund carries a multi‑million dollar deficit.
Finance Director Dan Mike told the council the city finished 2024 with an unaudited general fund surplus of about $1 million and he explained the primary drivers behind that result.
Mike attributed approximately $330,000 of the surplus to higher‑than‑budgeted revenues — including additional grants and an estimated $161,000 in police aid plus roughly $170,000 in market‑value/investment income — and about $580,000 to departmental expenditure savings (administration, finance, police, street maintenance and parks), which together make up the roughly $910,000 Mike highlighted toward the $1 million surplus.
He cautioned the numbers are unaudited and that several year‑end adjusting journal entries remain (capital and depreciation entries, pension liability entries that affect enterprise funds, compensated absences and a recent GASB change). City policy requires retaining part of the savings as fund balance (Mike said the policy target is 50% of the subsequent year’s budget) and the remainder will be presented to council as one‑time options rather than to offset ongoing operations.
On enterprise funds, Mike said the water fund outperformed budgeted fund‑balance expectations (projected increase of $682,000, actual near $737,000), noting lower water usage partly offset by about $246,000 in other revenues (market value adjustments). Wastewater and surface water funds also exceeded budget in part due to investment income; surface water benefited from capital projects not yet completed and lower pavement rehabilitation spending. The electric fund saw charges for services decline by roughly $720,000 versus budget but was offset by about $412,000 in market/investment gains, $123,000 in penalties and $130,000 in processing fees; the electric fund also transferred $1.1 million for pavement preservation and is now projected to have a smaller-than‑expected drawdown.
Mike warned the fiber‑optic fund has a negative fund balance of over $2 million and likely will take decades to reach break‑even under current terms; the fund receives revenue from long‑term contracts (Mike cited Oakdale and Maplewood) and internal charges to city departments, but historic assumptions did not materialize to the expected scale.
He also flagged several operational priorities coming out of year‑end work: pursuing a payroll/HR system replacement (RFP in draft), implementing purchase‑order tracking to meet state statutes, addressing security and staff redundancy/succession planning in finance, and continuing audit close‑out tasks.
Ending: Mike said the overall results put the city in a stronger position heading into the 2026 budget cycle, and noted staff will present options for one‑time uses of the surplus during the formal budget process. No formal budget decisions were made at the workshop.
