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464 <br />months of operating and three months operating listed, and stressed the need to <br />have a minimum operating cash balance at all times through the year of at least <br />two months of operating budget and three months is preferable to that. Mr. <br />Anderson said there are certain times in the year where the cash balance will <br />exceed that because the cash flows are not equal through the year. He said if he <br />was doing this report at the end of January, the cash balance would be <br />substantially more because the bulk of the property tax revenue comes in during <br />January. Anytime the cash flow gets below the two months operating figure <br />there should be concern. <br />Mr. Anderson said the bond ordinance requirement of 1.263 millions dollars has <br />been shown and in the bond covenant, the city is required in the Water and <br />Sewer Fund to keep an equivalent of one -sixth of the operating and maintenance <br />current budget as a reserve. Mr. Anderson advised that where the city should <br />be, as a minimum, in the Water and Sewer Fund is this 1.2 million dollars. He <br />said that the city is in the hole in this fund and it needs to be addressed. Mr. <br />Anderson said he has given the City Council what the current balances are and <br />emphasized the fact that there are things such as accounts receivable, accounts <br />payable, and contractual obligations that could affect that number, and if he was <br />doing a full accrual set of financial statements, he would account for those. If <br />the City Council would look at the cash number, Mr. Anderson said it should <br />give a quick clue where the City is financially. <br />Mr. Anderson advised that if you compare last years' balance with this years' <br />balance, you will note that it is up to just over a million dollars. He said this is <br />due to a one time settle up. payment from TXU and the city received about <br />$130,000.00 from litigation. Also, there were timing differences in other <br />franchise payments, increase in the property tax collections from a larger tax <br />roll, reimbursements received on grants, and increased sales tax collections. <br />Mr. Anderson said that the second page of his report contains key revenue, <br />budget verses actual. The first one listed is current property taxes and only the <br />operating and maintenance part of the tax, not the debt related tax, was <br />considered. He said in the current year 27.62% of the budget was compared to <br />