05/29/2012 Council Packet - Laserfiche WebLink

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CITY OF LINO LAKES, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2011 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 assets at year -end of $17,857,797, of which $3,875,049 are unrestricted. The increase in net assets of $135,114 was primarily due to operating income and investment earnings. Total net assets in the sewer fund at the end of 2011 were $22,560,431, of which $7,326,313 was unrestricted. Net assets decreased $93,973 during the current year resulting primarily from operations, most notably increases in MCES sewage treatment costs. The water rates, which reflect water conservation efforts through a tiered rate structure, and sewer Rates were unchanged in 2011. A review of utility rates is scheduled for 2012. GENERAL FUND BUDGETARY HIGHLIGHTS The original budget was amended several times during the year reflecting donations and grants received primarily for police personnel and equipment, a reduction in expected state aid, and reallocating resources within the original budget. Revenues were $134,212 under budget for the year. This is due primarily to higher delinqencies in property tax collections. MSA maintenance payments came in over budget due to adjusted distribution formulas which increased the City's allocation. Investment earnings were slightly higher than the amended budget as a result of unrealized gains from increased market value of investments held. Lower building activity due to the recessed economy and, therefore, fewer new construction building permits being issued was also a factor. State intergovernmental revenues for police PERA aid were below budgeted levels for the year due to position vacancies. Local government grants were slightly over budget due to slightly higher grant funds allocated by the granting entity. Public safety charges for service were slightly over budget due to higher than expected traffic control contracts. Fines and forfeitures were over budgeted amounts due to the success of the City's Achieving Compliance through Education (ACE) program. Expenditures came in under the revenues by $720,339 due mainly to lower than expected personal services costs from vacant positions and reduced benefit costs. Energy costs for fuels and electricity were higher than budgeted amounts, and supplies costs were generally lower than anticipated. There were also net transfers from the general fund of $741,964. This resulted in a net fund balance decrease of $21,625 for the fiscal year. 18