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City of Lino Lakes, Minnesota
<br />Management Report, Page 14
<br />The City's December 31, 1996 fund balance totaled $2,723,025. The City's General Fund
<br />balance has been as follows for the past ten years:
<br />December 31,
<br />1987
<br />1988
<br />1989
<br />1990
<br />1991
<br />1992
<br />1993
<br />1994
<br />1995
<br />1996
<br />Fund Balance
<br />Reserved/
<br />Designated
<br />$52,593
<br />96,626
<br />53,290
<br />1,169,624
<br />1,265,236
<br />1,406,296
<br />1,673,039
<br />1,870,934
<br />2,086,231
<br />2,723,025
<br />Undesignated Total Increase
<br />$589,799 $642,392
<br />747,836 844,462 $202,070
<br />976,763 1,030,053 185,591
<br />1,169,624 139,571
<br />1,265,236 95,612
<br />1,406,296 141,060
<br />83,620 1,756,659 350,363
<br />1,870,934 114,275
<br />2,086,231 215,297
<br />2,723,025 636,794
<br />The 1990 increase in designated fund balance reflects the City's adoption of a reserve policy
<br />pursuant to resolution 91 -3. The reserve policy addresses three areas: 1) Cash flow
<br />requirements, 2) Contingent employee benefits, and 3) General contingencies.
<br />Cash Flow Reserve. As previously stated, property taxes and related state aids account for
<br />over 74% of budget 1997 revenue sources of the General Fund. This revenue is not received until
<br />July and December of each year (the second half of the year). As a result, the City is required to
<br />have sufficient reserves at the beginning of the year to fund operations of the first half of the year.
<br />The City's cash flow reserve requirement is computed as follows:
<br />1997 Budgeted Levy
<br />1997 Anticipated HACA
<br />1997 Anticipated Local Government Aid
<br />1997 Anticipated Local Performance Aid
<br />Total
<br />Cash -Flow Reserve (50% of total)
<br />$2,646,110
<br />381,340
<br />150,170
<br />14,770
<br />$3,192,390
<br />$1,596,195
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