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City of Lino Lakes,MVlinnesota
<br />Management Report, Page 3
<br />A schedule of cash and investment balances by fund type (as adjusted for interfund
<br />payables/receivables) is as follows:
<br />Fund
<br />December 31, Increase
<br />1995 1996 (Decrease)
<br />General $1,937,813 $2,671,992 $734,179
<br />Special Revenue (75) 21,653 21,728
<br />Debt Service 562,860 246,555 (316,305)
<br />Capital Project 7,975,681 10,434,809 2,459,128
<br />Enterprise 552,116 1,984,735 1,432,619
<br />Agency 130,997 113,856 (17,141)
<br />Total $11,159,392 $15,473,600 $4,314,208
<br />Overall cash balances increased by $4,314,208 of which $3,131,754 consists of unspent bond
<br />proceeds which are restricted for future contruction costs.
<br />Accounting Standards
<br />The Governmental Accounting Standards Board (GASB) issued in March, 1997, a final
<br />statement on accounting and financial reporting for certain investments (Statement No. 31).
<br />This statement will require investments in (a) interest- earning investment contracts, (b)
<br />external investment pools, (c) open -end mutual funds, (d) debt securities, and (e) equity securities
<br />to be reported at fair value. Fair value is the amount at which a financial investment could be
<br />exchanged in a current transaction between willing parties.
<br />Essentially, this statement will require the City to record virtually all investments at fair value.
<br />Currently, the City's investments are recorded at amortized cost in accordance with current
<br />accounting principles. The change in fair value of investments is required to be allocated to all
<br />funds participating in the City's investment pool. This change may result in greater "swings" in
<br />investment earnings because of market changes. At December 31, 1996, the carrying value and
<br />market value of the City's investments was $14,395,191 and $14,180,870 respectively, a
<br />difference of $215,000.
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