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CITY OF LINO LAKES, MINNESOTA
<br />MANAGEMENT'S DISCUSSION AND ANALYSIS
<br />DECEMBER 31, 2015
<br />CAPITAL ASSET AND DEBT ADMINISTRATION
<br />Capital assets -The City of Lino Lakes' investment in capital assets for its governmental and business-
<br />type activities as of December 31, 2015, is $70,355,866. This investment in capital assets includes land,
<br />buildings, office equipment and furniture, vehicles, machinery and equipment, other capital assets, and
<br />infrastructure. This represents an increase in the City of Lino lakes' investment in capital assets of
<br />approximately 10%. Developer lead infrastructure additions for 2015 include NorthPointe 1"1 Addition as
<br />well as Saddle Club 181 Addition. The City completed construction of Well No. 6, while the pump house is
<br />still pending completion. Also sitting in construction in progress and pending final completion are, the
<br />Shenandoah Area Street Improvements, the construction of Fire Station #2, and the Birch Street tum
<br />lanes and infrastructure improvements.
<br />Capital Assets at Year-End
<br />(Net of Accumulated Depreciation)
<br />Governmental Activities Business-Type Activities
<br />2015 2014 2015 2014
<br />Total
<br />2015 2014
<br />Land
<br />Construction in Progress
<br />Buildings
<br />Office Equipment and Furniture
<br />Vehicles
<br />Machinery and Shop Equipment
<br />Other Equipment
<br />lnfrastrucrure
<br />Capital Assets, Net
<br />3,275,859 $ 3,275,859 ....---
<br />7,268,375 808,093 1,830,071
<br />2,802,413 3,116,839
<br />133,963 364,999
<br />1,141,371 1,170,030
<br />1,109,527 338,387 152,888 211,027
<br />193,122 167,804
<br />25,303,407 26,972,973 27,144,872 27,344,994
<br />$ 41,228,037 $ 36,212,994 $ 29,127,829 $ 27,556,021
<br />$-3,275,859
<br />9,098,448
<br />2,802,413
<br />133,963
<br />1,141,371
<br />1,262,413
<br />193,122
<br />52,448,279
<br />$ 76,355,886
<br />$ 3,275,859
<br />808,093
<br />3,116,839
<br />364,999
<br />1,170,030
<br />547,414
<br />167,804
<br />54,317,967
<br />$ 63, 789,oo5
<br />Additional information on the City's capital assets can be found in the notes to the financial statements on
<br />pages 48-49.
<br />long-term debt-At the end of the current fiscal year, the City of lino lakes had total bonded debt
<br />outstanding of $24,611,250. Of this amount $16,406,250 comprises tax supported debt and $6,485,000 is
<br />special assessment debt. All outstanding debt carries the general obligation backing for which the City is
<br />liable in the event of default by the property owners subject to the specific taxes, special assessments or
<br />revenues pledged to the retirement of the debt. In addition, the City carries a note to Anoka County for its
<br />share of the cost of the I-35E/County Road 14 Interchange project in the amount of $1,720,000.
<br />Governmental Activities Business-T~pe Activities Total
<br />2015 2014 2015 2014 2015 2014
<br />G.O. Bonds $ 16,406,250 $ 9,231,000 $ $ $ 16,406,250 $ 9,231,000
<br />G.O. Special Assessment Bonds 6,485,000 7,445,000 6,485,000 7,445,000
<br />Note Payable -Anoka County 1,720,000 2,080,000 1,720,000 2,080,000
<br />Total Outstanding Debt $ 24,611,250 $ 18,756,000 $ $ $ 24,611,250 $ 18,756,000
<br />The City of lino lakes' total bonded debt increased by $6,215,250 (37.3%) during the current fiscal year.
<br />The key factors for the change include the issuance of $198,250 in 2015A Equipment Certificates,
<br />$963,000 in 2015B Certificates, $3,095,000 of General Obligation Bonds to finance street reconstruction
<br />in the Shenandoah Area and public infrastructure improvements related ot the construction of Fire Station
<br />#2, and $4,350,000 in EDA lease Revenue Bonds to finance the construction of Fire Station #2 in the
<br />City of lino lakes. Principal in the amount of $2,391 ,000 was retired during the year. Additional
<br />information on the City's long-term debt can be found in the notes to the financial statements on pages
<br />50-52.
<br />CITY OF LINO LAKES, MINNESOTA
<br />MANAGEMENT'S DISCUSSION AND ANALYSIS
<br />DECEMBER 31, 2015
<br />ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
<br />The unemployment rate for the City of Lino Lakes at year-end is 3.3%, which is a great improvement
<br />from a rate of 4.5% in 2013. This is slightly lower than the state's average unemployment rate of
<br />3. 7% and significantly lower than the national average of 5.0% at the end of 2015.
<br />Residential growth in the City has continued to be significantly below the rates of the mid 2000's due
<br />to the general residential real estate market weakness, with about half of the number of new home
<br />permits issued in 2015 as in 2007, and less than 76% of new home permits issued in 2005. This is an
<br />improvement over recent years. Recently increased building and development activities are signalling
<br />a recovery of the housing market. Property values of the existing tax base are expected to increase
<br />slightly and will continue to have an impact on the City's tax base for 2016.
<br />Energy costs are expected to continue to remain steady or slightly increase over the coming months.
<br />This will have an impact on the City's budget for the coming year and thereafter.
<br />Property tax reforms have significantly impacted state aid payments the City of Lino Lakes receives.
<br />The City is exempted from local government aid and the state legislature has discontinued the market
<br />value homestead credit in favor of a new market value exclusion, which excludes a portion of
<br />residential homestead property value from property taxes.
<br />The Federal Reserve Board has continued the federal funds rates at historical lows, currently
<br />between 0.25% -0.50%, which is expected to result in reduced investment earnings.
<br />REQUESTS FOR INFORMATION
<br />This financial report is designed to provide a general overview of the City of Lino lakes' finances for all of
<br />those with an interest in the government's finances. Questions concerning any of the information provided
<br />in this report or requests for additional financial information should be addressed to the Director of
<br />Finance, City of Lino lakes, 600 Town Center Parkway, lino lakes, Minnesota, 55014. IV-7
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