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City of Lino Lakes, Minnesota <br />Management Report <br />General Fund <br />O The 1990 increase in designated fund balance reflects the City's adoption of a reserve <br />policy 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 75% of budget 1998 revenue sources of the General Fund. This revenue is not received <br />until July and December of each year (the second half of the year). As a result, the City is <br />required to have sufficient reserves at the beginning of the year to fund operations of the first half <br />of the year. The City's cash flow reserve requirement is computed as follows: <br />1998 Budgeted Levy $2,889,626 <br />1998 Anticipated HACA 384,900 <br />1998 Anticipated Local Government Aid 144,100 <br />1998 Anticipated Local Performance Aid 18,230 <br />Total $3,436,856 <br />Cash -Flow Reserve (50% of total) $1,718,428 <br />