Enterprise Fund vs. Special Revenue Fund
When asked about Pebble Creek Golf Course and what they were trying to accomplish, the founders of Pebble Creek, stated clear and concise goals for why a golf course in Becker was a great investment in the City and its residents. The idea behind Pebble Creek was to build an attraction to draw people to Becker, use the City’s financial position to leverage the building of a community rich with amenities while fostering a high quality of life and showcasing existing amenities like the local schools. In addition, Pebble Creek was intended to create another opportunity to recreate locally and was conceptualized to provide jobs for our kids and our retired residents.
Some of the founders also shared that Pebble Creek wasn’t necessarily built to be financially independent. In fact, it was built knowing the likelihood of a profit, especially in the early years, was not going to happen. Early on, Pebble Creek was envisioned to be a special revenue fund as opposed to an enterprise fund; profit was not meant to drive the decision to build or not to build. Pebble Creek was built to be an amenity and improve quality of life; it was intended to be an instrument of development and a place for entrepreneurs to conduct business. A vision for generations to utilize for years to come for business and pleasure.
During the 2017 budget cycle, the Becker City Council had conversations centered around its entire book of business and how to best manage, maintain and improve the community. Those conversations eventually included Pebble Creek Golf Course and redefining Pebble Creek from an enterprise fund to a special revenue fund. The Government Finance Officers Association (GFOA) defines each fund:
Enterprise Funds may be used to report any activity for which a fee is charged to external users for goods or services. Activities are required to be reported as enterprise funds if any one of the following criteria is met. Governments should apply each of these criteria in the context of the activity’s principal revenue sources.
- The activity is financed with debt that is secured solely by a pledge of the net revenues from fees and charges of the activity. Debt that is secured by a pledge of net revenues from fees and charges and the full faith and credit of a related primary government or component unit—even if that government is not expected to make any payments—is not payable solely from fees and charges of the activity. (Some debt may be secured, in part, by a portion of its own proceeds but should be considered as payable “solely” from the revenues of the activity.)
- Laws or regulations require that the activity’s costs of providing services, including capital costs (such as depreciation or debt service), be recovered with fees and charges, rather than with taxes or similar revenues.
- The pricing policies of the activity establish fees and charges designed to recover its costs, including capital costs (such as depreciation or debt service).
Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. The term proceeds of specific revenue sources establishes that one or more specific restricted or committed revenues should be the foundation for a special revenue fund. Those specific restricted or committed revenues may be initially received in another fund and subsequently distributed to a special revenue fund. Those amounts should not be recognized as revenue in the fund initially receiving them; however, those inflows should be recognized as revenue in the special revenue fund in which they will be expended in accordance with specified purposes. Special revenue funds should not be used to account for resources held in trust for individuals, private organizations, or other governments.
Regardless of the fund type, the expectation of the Becker City Council is performance. Performance that meets budget expectations, remains transparent, minimizes expenses and maximizes revenues each year so as to minimize the burden on residents. Pebble Creek as an enterprise fund has become a barrier to maintaining Pebble Creek.
The City Council’s objective is to maintain and improve all of the City’s holdings, regardless of the fund type, including Pebble Creek Golf Course. The goal is to make certain we protect all City assets and invest in future generations. The Becker City Council does have the authority to make this fund change. The City Council, in consultation with its finance professionals, is conducting research on the mechanics of the change and how it will be implemented. In addition, the Becker City Council commissioned a long range financial plan that will be completed in 2018. This financial plan will help the City Council better manage its entire book of business from a long-range or legacy perspective. This long-range approach will systematically and methodically maintain and improve all City assets and amenities.
For years the City’s audit firms have made a case for a different approach for accounting for Pebble Creek’s finances. That is to say, the data shows that Pebble Creek has not been self-sustaining and maybe a different approach should be considered. To that end, the Becker City Council plans on continuing the conversation to move Pebble Creek to a special revenue fund as it will produce a budget process that is more robust, transparent, and accurate.
Exciting Projects on the Horizon
Hello, Residents of Becker,
2017 has been a catalyst year for growth within the City of Becker and surrounding communities!
The Streets Department recently completed the 2017 street improvement projects along with the newly expanded parking lot in T-Town. We are planning ahead with our Streets and Engineering team for the 2018 projects. Not only will the City be completing multiple street projects, MnDOT will also be completing an intersection safety improvement project at the intersection of Highway 10 and County Road 23. The intersection is known as a “Reduced Conflict Intersection” or also known as “J-Turn” or “RCUT.” With the higher number of accidents at this intersection, we look forward to the necessary safety improvements.
You may have also heard about the Transportation Report that was completed in August. This plan helps us visualize the possibilities that could be implemented within the Industrial Park to better leverage the great assets already in place to better position Becker for industrial growth and development. With the transition of the Sherco Power Plant, now is the time to leverage the upcoming economic transition to promote Becker’s valuable infrastructure and current assets. With I-94 a short distance from the Industrial Park, local linkages via County Road 8 and Highway 25 are going to be indispensable for a healthy economy. The Transportation Report gives City Council multiple ideas and options for transportation improvements that would provide for better access to the Clearwater I-94 connection to make our Industrial Park even more competitive and attractive. If you are interested in reviewing the concept layouts, the report is available on the City’s website. A specific layout has not been adopted, but it is a great development tool to help the City move forward.
As you can imagine, transportation and infrastructure improvements can be costly. City Staff is collaborating with area partners to prepare applications for submission to the Federal Economic Development Administration and other government grant programs to assist in the new infrastructure construction costs. We are confident that our strong public and private partnerships will make our grant applications competitive.
The City of Becker is also partnering with area communities to conduct a study to establish the most feasible location to build an additional crossing over the Mississippi River between Wright and Sherburne Counties. The increase in mobility between Counties and throughout our region will help grow our regional and local economies and strengthen our tax base.
The City of Becker recently purchased the tan and brown corner building at the intersection of Hancock Street and 1st Street. With the Highway 10 Corridor improvement plan that was adopted in early 2016, the City began implementing the plan to transform the highway corridor into a more attractive, economically vibrant and mixed-use corridor. Such goals include the expansion of the City’s 1st street right-of-way to improve safety along the corridor’s local streets. The City is working with the current renters on a new lease. At this time there is not a set date for demolition, but the acquisition of the building is a great step forward for the Highway 10 - 1st Street Corridor Plan.
With so many exciting projects in the works and on the horizon, we look forward to a groundbreaking 2018!
Tracy Bertram, Mayor
City of Becker, Minnesota
State of the City AddressBelow is the State of the City Address as delivered by Mayor Tracy Bertram on May 10, 2017 to the Becker Area Chamber of Commerce.
A PowerPoint Presentation was given in conjunction with the presentation and is incorporated in the address below. To view the PowerPoint presentation individually click here.
I am very pleased to be able to spend time with you all this afternoon to provide another annual update on the state of our city.
We can begin with the basic assessment first: Becker continues to be in a very good state, and we continue to be well-positioned to stay that way for the foreseeable future.
Becker continues to benefit from a strong local and State economy as well as our excellent location within the region. We can be proud of our employment base, businesses, innovative and forward-thinking school district and educational institutions, our great parks and trails system and other amenities, as well as our solid transportation connections.
2016 was a great year! An abridged version of accomplishments, including:
- Recapitalization of the industrial wastewater treatment plant;
- Realignment of Hancock Street South to improve safety, traffic flow, and to position the city to implement a Train Whistle Free Quiet Zone;
- Improvements to the Becker Community Center as we invested in an air handling/dehumidification system that was twenty-two years old.
So much of what gives us those advantages and assets in which we can take such pride comes from the hard work and commitment of the people who live here, work here, own businesses here, volunteer here, and care about their community.
I believe the best thing we can do as the local unit of government is be sure that everything we do contributes to the success of all those other efforts – or at the very least stays out of the way of those efforts.
These priorities have developed through our community’s vision, and in my opinion serve as a useful means to measure where we are. The priorities include:
- Financial Sustainability
- Community Growth and Development
- Promote a Safe and Healthy Community
- Partnerships and Collaboration
- Improve Becker’s Brand
You will also notice that as we converse, each and every topic we discuss today will fit below one or more of the above priorities. By design. We want to become stronger as a community. We will work smarter. We will work more efficiently. We will leverage our current resources to better position our community for the next generations.
As you may have heard, Xcel Energy will be decommissioning two of the three coal fired power generating units in the next decade or so. One of our top priorities will be to collaborate with Xcel Energy in an effort to change the tax structure from taxing equipment to an energy production tax. This change will help stabilize the City’s budgeting process and financial future as this new structure will allow the city to forecast future revenue and better plan for our distant future.
Even though the decommissioning may have seemed like the end of the road for us, I believe it is just the beginning of something bigger. For example, the 2017 Legislature (Representative Newberger, Senator Mathews, and Senator Brown) passed a Bill and Governor Dayton signed it into law to build an 800-megawatt natural gas fired power generating plant right here in Becker. This $800 million gas plant will not be a retrofit to one of the retired and mothballed units. This will be a brand-new freestanding facility that will create a large number of construction jobs as it is being built. In addition, the transmission line will create additional opportunities as we will have additional gas capacity.
The collaborative efforts that lead up to the Natural Gas Plant bill signing has created stronger relationships between the City, Xcel Energy, Sherburne County, the MN Department of Employment and Economic Development (DEED) and the Governor’s office. The City had the honor of meeting with the Commissioner of DEED and the Governor’s office regarding the transition from a coal based economy to a more diversified economy in the coming years. The Governor has instructed DEED and other departments and staff to assist the City with our transitional efforts. This is a great opportunity to bolster our economic development efforts with extra resources from the State of Minnesota.
Xcel Energy is also partnering with the City on economic development projects. Our Community Development Department has been working tirelessly to get our City owned industrial park lots certified and marketed as “shovel ready.” These certified lots allow the City to broaden the marketing efforts of our Industrial Park. Not only is the City promoting business to locate or expand in Becker, but Xcel Energy is also promoting our community as a great location for businesses to build and grow. In fact, just last week at the Greater St. Cloud Development Corporation annual meeting I witnessed firsthand Xcel promoting the City of Becker. Not only are we talking about them, they are talking about us on a regional/national level. In addition, Xcel Energy is marketing Xcel-owned property for future growth of the industrial park. One example that stands out as a potential new resident is the site acquisition slated for Northern Metal Recycling. This 53-acre site would be used to locate NMR to property close to the Sherco plant and close to the BNSF railroad.
Mayor's Welcoming Message
Hello Residents of Becker!
I am humbled by the opportunity you have given me to lead the City of Becker. Becker is on the cusp of something great and I’m absolutely thrilled to be part of this community during these exciting times.
My family and I have called Becker our home for over 20 years. One of my family’s favorite things to do here in Becker is to take in the sights of Snuffy’s Landing while kayaking on the Mississippi River. One of my personal favorites is the people who call Becker home. I am amazed every day by the community pride each of us has. I have met a lot of you at various community activities, while sitting on various committees throughout Becker and by being on City Council for the past 8 years.
My family’s values fit well into what I see as the city’s priorities:
- Augmenting the City’s collaborative efforts;
- Promoting economic vitality;
- Continuing to strengthen the City’s financial position;
- Reinforcing the organization as a number one employer;
- Enhancing our community’s safe, healthy and sustainable lifestyle.
Becker has so much to offer:
- Great schools;
- Great recreational opportunities;
- Great transportation;
- Great corporate partners;
- Superb volunteers;
- Competitive tax rate.
The Becker City Council and I have hit the ground running. It is true we have some challenges in front of us. It is also true that we look forward to meeting those challenges. We have exciting times ahead!
You have my pledge to make Becker a better place, our government more effective, and our image more positive. I have great confidence in what we can accomplish as we move into the future.
Becker truly is a great place to live and will only become better!
Tracy Bertram, Mayor
City of Becker, Minnesota