4-12-78 Meeting Attachment - Laserfiche WebLink

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The Ramsey County Law Enforcement Services Fund is currently experiencing cash flow problems due to increased costs for salaries and operating expenses. With the addition of the Arden Hills contract with the County in January 1978, it appears that we will no longer be able to operate within our current working capital provisions. One solution to this would be to seek an increase in working capital from the County Board. This would, however, increase the amount of interest that would have to be charged to the contracting cities. Another alternative would be to adopt a new billing system which would provide the necessary cash flow to operate the fund without additional capital. This is the preferred method, as it would represent a substantial savings in time on our part in preparing the billings, as well as savings to the contracting cities in interest costs. Under the current system, billings are prepared each month based on the cash expenses of the previous month. Due to the time needed to prepare the billings, to have payments approved by the contracting cities, and to process the payments, more than an additional month is needed to recover cash expenses. Therefore, cash is needed for more than two month's operating expenses. Under the new system, a detailed estimated billing based on the 1978 budget pro- jections (plus a provision for a 6% salary increase) would be sent out the first of each month for the upcoming month. Hopefully, this would allow the contracting cities to approve payments on a timely basis. Since the billings are estimates, they would be in the same amount each month, (except December). A detailed report showing actual costs would be provided twice a year. The first report would be sent out in July, covering expenses through June 30th. The final report would be sent out in February, at which time final adjustments would be made between amounts billed and actual costs. It is necessary to delay this report until February in order to accurately deter- mine all costs which have been incurred for the year. However, an estimate of costs will be made before the December 1st billing, and major adjustments will be reflected in that billing. At the time of the first estimated billing, contracting cities would be billed for two months - the preceding month and the upcoming month. In addition, an estimate of expenses which had accrued as of the end of the last month billed on the old system, but which had not yet been paid, would be included in this billing. For example, if the new billing system were to go into effect in April, each city would be sent an estimated billing for the months of March and April. Also, included would be any February expenses which had not yet been paid. These would not have been charged to the cities on the February billing, as those billings were on a cash basis. Clerk's exhibit no. ?6 Meeting-4-12-78 APR 7 1978 CITY OF LITTLE CANADA