Audit Shows St. Cloud Maintains Strong Financial Rating but Faces Slowing Revenue Growth and Budget Pressures

(KNSI) – St. Cloud’s financial audit reveals that the city has maintained its impressive AA+ rating from Standard & Poor’s and received an unmodified “clean” opinion on its financial statements from independent auditors BerganKDV, Ltd.

The numbers paint a picture of strong financial health. According to the 2024 Annual Comprehensive Financial Report, the total market value of all properties within the city exceeds $6 billion. At the end of 2024, the city’s assets topped its liabilitiesby $524 million, with approximately 84% of that value tied to physical assets like buildings, land, cash, and investments. To put this in context, it’s similar to a homeowner being in good financial shape when their savings and property outweigh their loans. The city has seen ten consecutive years of improving balance sheets, with equity jumping by $40 million compared to 2023.

However, despite these positive indicators, St. Cloud faces significant challenges ahead. The biggest concern is a sharp slowdown in property tax base growth, which serves as the city’s main source of income. After robust growth of 15.67% in 2023 and 9.82% in 2024, the City Assessor projects just a 1.41% increase in 2025 and only 1% to 2% in 2026. This steep decline could make it much harder for the city to fund services, maintain operations, and invest in future projects without raising tax rates or finding alternative revenue sources.

Shortfalls in the street and utility light fund, reduced revenue from electric franchise fees, increases in compensation, rising insurance costs, and a drop in hotel/motel tax revenue add to the budget pressures. The report says while St. Cloud’s strong financial foundation provides options and time to plan, city leaders will need to address these emerging challenges to maintain their current fiscal health.

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