Comprehensive Annual Financial Report 12/31/2015

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CITY OF LINO LAKES, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2015 FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS (CONTINUED) Proprietary funds — The City of Lino Lakes' proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. The water fund has total net position at year-end of $20,401,628, of which $5,822,834 is unrestricted. The increase in net position of $1,579,872 was primarily due to capital contributions, partially offset by a net operating loss. Total net position in the sewer fund at the end of 2015 was $23,398,831, of which $8,849,796 was unrestricted. The increase in net position of $854,246 was primarily due to capital contributions, partially offset by a net operating loss for the year. The water rates, which reflect water conservation efforts through a tiered rate structure, and sewer rates were adjusted by 2% and 3%, respectively, in 2015. A review of utility rates is planned for 2016. GENERAL FUND BUDGETARY HIGHLIGHTS The original budget was amended several times during the year reflecting increases in business license revenue, building permit revenue, MSA maintenance aid, lease revenues and SCORE grants; reductions in police revenues and fines and forfeits; and reallocating resources within the original budget. The final amended budget is $148,650 greater than the original adopted budget. Revenues were $51,277 over budget for the year. Fiscal disparities revenues came in under budget by $178,439. This variance was more than offset by greater than anticipated license and permit revenues as well as intergovernmental state aid revenues. Expenditures came in under budget by $374,464 due to many factors including lower than expected personal services costs from vacant positions. Fuel costs were much lower than anticipated and spending on contractual services was lower overall from budgeted levels primarly due to contracted storm system maintenance that was delayed in 2015. There were also transfers from the general fund of $590,245. This resulted in a net fund balance increase of $639,878 for the fiscal year, compared to the planned reduction of $170,000. 19