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Honorable Mayor and <br />Members of the City Council <br />City of Lino Lakes <br />The above table provides a means for monitoring the status of the debt service funds. For the General <br />Debt funded solely by property taxes, it appears that there are adequate planned levies to retire the debt <br />when the future lease revenues scheduled to be received from the school district are included. <br />While in total the City has a surplus of total resources available over remaining scheduled debt service <br />based on the calculation above, certain individual funds are operating at a deficit. These deficits will <br />need to be funded by future adopted assessment rolls, special assessment levies, investment earnings, <br />transfers from other funds, property taxes or other available means. <br />Factors to consider when analyzing debt service funds: <br />Are all the anticipated assessment rolls being adopted as soon as appropriate? <br />Have all the planned financing sources been identified, such as pledged amounts from the area <br />and unit fund or future MSA funds? <br />Are there significant "prepayments" received from property owners? In the current investment <br />environment, will the earnings the City will receive on these prepayments be lower than the <br />interest rate that was being charged on the adopted assessment roll? <br />The Area and Unit Fund is committed to the debt service of some special assessment bonds as well as <br />toward the water revenue bonds. The City's five-year operating plan addresses the above issues and <br />therefore, this comment is simply a reminder of the extent that repayment of certain debt is based on <br />pledged sources from the Area and Unit fund. <br />Cash Receipts <br />During our audit, we performed walk throughs on the park and recreation cash receipting process. It <br />was noted during our procedures that there is not a review process in place for credits applied to <br />customers accounts. To provide proper control over the credit application process, we recommend an <br />individual from outside the department review credits applied to individual customer accounts for <br />reasonableness. <br />Information Technoloay <br />Software Administration — We noted that access to the server is authenticated via a generic admin user <br />ID and password. Best practices advise the City to implement complex passwords for the server hosting <br />the general ledger system. At a minimum, passwords should be 8 characters, alphanumeric, and <br />expiring at a minimum of every 90 days. <br />Physical Security — We noted that the server room is not temperature controlled. We therefore <br />recommend that the City consider installing environmental controls to adequately safeguard network <br />infrastructure from excessive heat, cold, dust, etc <br />Disaster Recovery Plan — We noted that the City has not established a formal, written business <br />continuity or disaster recovery plan to be used in the event of a disaster. We therefore recommend the <br />City develop a written plan to support the recovery of the technical infrastructure that can be used for <br />testing and training purposes. In addition, the plan should be constructed in a format that could be <br />followed by individuals not familiar with City operations in the event "key" information technology <br />personnel are affected by the disaster event and are not available to execute recovery activities. <br />(4) <br />