Management Report and Recommendations 12/31/1995

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WNW MEW City of Lino Lakes, Minnesota Management Report, Page 6 A summary of assessment collections for the past four years is as follows: Delinquent balance - January 1 1992 1993 1994 1995 $126,088 $118,690 $43,036 $36,497 Add: Current installment 379,521 632,067 387,200 394,770 Amount collectible 505,609 750,757 430,236 431,267 Less: Current collections 306,443 580,678 355,543 353,424 Delinquent collections 82,664 39,313 32,743 26,051 Total collections 389,107 619,991 388,286 379,475 Adjustments 2,188 (87,730) (5,453) (14,451) Delinquent balance - December 31 $118,690 S43,036 $36,497 $37,341 Current collection rate 81% 92% 92% 90% Total collections as a percent of current levy 103 % 98 % 100 % 96 % As shown above, the City continues to experience a stable collection rate. The primary funding of debt payments is special assessments. Timely collection of special assessments is required to assure timely availability of cash to meet the scheduled debt payments. We recommend the City continue to monitor the collection rate and provide supplemental financing if assessment collections are not adequate to meet bonded debt payments. Prepayments temporarily provide cash and in the short term, favorably affect the City's ability to meet temporary bond issues debt payments. If, however, prepayments are invested at significantly lower interest rates, and/or consumed to meet current debt requirements for permanent debt issues, the City incurs a "loss" because the interest which would have been earned on the assessment amount is not adequately replaced by investment income. During 1994 and 1995 the City collected $1,560,816 and $1,222,771 of prepayments respectively.