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Management's Discussion and Analysis
<br />The combined fund balance ofother governmental funds decreased $3,567,167 during 2017.
<br />Primary reasons for the decrease include the issuance of $1,600,000 of G.O. Tax Abatement
<br />Refunding Bonds, Series 2016C, the proceeds from which were used to pay-off the G.O. Tax
<br />Abatement Bonds of 2006C on February 1, 2017. Also, the fund balance of the Municipal
<br />State Aid (MSA) Construction fund decreased $1,169,000 as MSA funds were used to
<br />prepay the 2009A Note with Anoka County for the city's share of the 35E Interchange
<br />project.
<br />Proprietary funds. The City's proprietary funds provide the same type of information
<br />found in the government-wide financial statements, but in more detail.
<br />The water fund has total net position at year-end of$22,621,564, of which $5,455,247 is
<br />unrestricted. The increase in net position of $602,293 was primarily due to capital
<br />contributions, partially offset by a net operating loss.
<br />The sewer fund has total net position at year-end of $24,056,431, of which $9,390,798 is
<br />unrestricted. The increase in net position of $351,645 was primarily due to capital
<br />contributions, partially offset by a net operating loss.
<br />Budgetary Highlights
<br />General Fund
<br />The General Fund budget was amended several times during the year to reflect increased
<br />revenues relative to building and licensing activities, state aid, and other operating transfers,
<br />as well as changes in expenditure areas due to personnel vacancies, changes to professional
<br />and contracted services, variances in supplies, investment in the Civic Complex air
<br />conditioning units, and finally the transfer for the park land loan and the comprehensive plan
<br />update budgeted over 3 years (2016-2018). The final amended expenditure budget was
<br />$150,759 less than the original adopted budget.
<br />Revenues were $5,934 over budget for the year. General property tax, intergovernmental
<br />revenue, and miscellaneous refunds and reimbursements were $66,444 under budget;
<br />however, this variance was more than offset by greater than anticipated license and permit
<br />revenues, fines and forfeits, and investment earnings.
<br />Expenditures came in under budget by $311,492 due to many factors including lower than
<br />expected personal service costs from vacant positions. Fuel and fleet maintenance supply
<br />costs were much lower than anticipated and the Civic Complex air-conditioning upgrades
<br />were not completed in 2017, resulting in favorability in capital outlay.
<br />Management's Discussion and Analysis
<br />Capital Asset and Debt Administration
<br />Capital assets. The City's investment in capital assets for its governmental and business-
<br />type activities as of December 31, 2017, amounted to $74,442,977 (net of accumulated
<br />depreciation), an increase of$1,427,942 from the prior year. This investment in capital
<br />assets includes land, wetland credits, construction in progress, buildings, equipment,
<br />vehicles, and infrastructure. The City completed the Shenandoah Area street improvements,
<br />NorthPointe 2nd Addition infrastructure improvements, Fire Station #2, Pump House #6, the
<br />reconditioning of Water Tower #1, Aqua Lane to Blackduck Drive water main
<br />improvements, the build-out of two Ford F-650 light rescue fire vehicles, and the upgrade of
<br />the air conditioning system (Phase I ) at the Civic Complex. The City has continued to work
<br />to complete the Birch Street tum lanes and infrastructure improvements in 2017. In addition,
<br />the City began land preparation activities for NorthPointe Park, the upgrade of the air
<br />conditioning system (Phase II) at the Civic Complex, and the Council Chambers upgrade.
<br />Developer lead infrastructure improvements at various stages of completion include
<br />NorthPointe 3rd, 4'h, 5th, and 6th Additions, Saddle Club 2nd and 3rd Additions, Century Farms
<br />6th Addition, Woods Edge 1st and 2nd Additions, Clearwater Creek, St Clair Estates, and
<br />Chavez Estates.
<br />Land
<br />Wetland credits
<br />Construction in progress
<br />Buildings
<br />Office equipment and furniture
<br />Vehicles
<br />Machinery and shop equipment
<br />Other equipment
<br />Infrastructure
<br />Total
<br />City of Lino Lakes' Capital Assets
<br />(Net of Depreciation)
<br />Governmental Activities Business-T~ee Activities
<br />2017 2016 2017 -----1Q.1i
<br />$3,320,059 $3,275,859
<br />162,372
<br />2.482,238 8,961.062 1,507,153 5,617,436
<br />6,376,011 2,706,355
<br />236,777 157,704
<br />2,016,355 1,370,732
<br />1,133,624 1,017,332 147,568 167,440
<br />267,096 206,385
<br />26,616,495 23 458,996 30,177,229 26,075,734
<br />$42,611,027 $41,154,425 $31,831,950 $31,860,610
<br />Totals
<br />2017
<br />$3,320,059
<br />162,372
<br />3,989,391
<br />6,376,011
<br />236,777
<br />2,016,355
<br />1,281,192
<br />267,096
<br />56,793,724
<br />$74,442,977
<br />2016
<br />$3,275,859
<br />14,578,498
<br />2,706,355
<br />157,704
<br />1,370,732
<br />1,184,772
<br />206,385
<br />49,534,730
<br />$73,015,035
<br />Additional information on the City's capital assets can be found in Note 5 to the financial
<br />statements. IV-7
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