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RELEVANT LINKS: <br />League of Minnesota Cities Handbook for Minnesota Cities 9/10/2024 <br />Municipal Budgeting Chapter 20 | Page 6 <br /> <br /> As explained in more detail below, property taxes are the largest source of <br />revenue for cities. In order to balance the budget, total estimated revenues <br />must be equal to or exceed total estimated expenditures. The budget sets out <br />a council’s yearly plan to maintain, change, add or drop services and <br />activities. <br /> <br />Fund Balances for Local <br />Governments, Statement of <br />Position, Office of the State <br />Auditor, Feb. 2014. <br />LMC website: “City Fund <br />Balances 101”. <br />Planning a city budget includes a fund balance, or unrestricted money <br />available to cover unexpected costs. The state auditor recommends but does <br />not require that cities keep a minimum of five months’ operating costs on <br />hand and accessible to cover such unanticipated costs. Some city councils <br />believe that higher fund balances provide more protection against <br />unforeseen emergencies. <br />Section VIII, Capital <br />Improvements. Cities often budget and plan separately for capital improvements because the <br />process covers more than one year. Capital improvements include planning <br />for replacing, repairing and maintaining infrastructure such as streets, <br />sidewalks, water and sewer systems, transportation, buildings and parks. <br />Planning for future infrastructure costs is essential. Without it, cities run the <br />risk of costly emergency repairs to local infrastructure. <br /> A. Local Performance Measures <br />Minn. Stat. § 6.91. <br /> <br />Performance Measurement <br />Program, Office of the State <br />Auditor <br />Cities that elect to participate in the standard measures program must report <br />its results to its citizens annually through publication, direct mailing, and <br />posting on the jurisdiction’s website, or through a public hearing at which <br />the budget and levy will be discussed and public input allowed. Participating <br />cities must report their results to the state auditor. The state auditor must <br />compile the results, make them available to all interested parties, publish <br />them on the auditor’s website, and report them to the legislative tax <br />committees. <br />Minn. Stat. § 6.91. <br /> A city that elects to participate in the standard measures program may <br />benefit in these ways: <br /> • Eligible for reimbursement of 14 cents per capita, but not to exceed <br />$25,000 for any government entity. <br />• Exempt from levy limits for taxes payable in the following year, if levy <br />limits are in effect. <br /> B. Budget cycle <br />Budget Process, City of <br />Hopkins. The process of annual budget preparation occurs within the framework of <br />the state property tax system. Property taxes are generally the primary <br />revenue source for Minnesota cities. Each fall, cities submit their property <br />tax levies for the upcoming year to the county auditor. <br />15