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City of Lino Lakes, Minnesota <br />Management Report <br />Other Matters <br />to receive the same net (after -tax) benefit as is currently available, significantly greater funds <br />would need to be provided. <br />This proposed federal legislation would not impact the City; however, it would adversely <br />impact the recipients of future tax increment benefits because they would have an additional tax <br />at the federal level for any such amounts received. <br />Strategic pricing <br />As is discussed later in this report, the Governmental Accounting Standards Board (GASB) <br />is considering sweeping changes in the financial reporting model for cities. The changes in the <br />financial reporting model will require the presentation on a statement of a Statement of Net <br />Activities. This statement will eventually require the "full loading" of expenses for each activity <br />of the City. Specifically, the additional amounts included in activity expense will be capital use <br />charges (depreciation) to each activity of the City. The fully- loaded activity cost will then <br />present a deduction for direct revenues generated by that activity to determine the subsidy level <br />that the local government provides to each activity. <br />b We believe that this type of presentation will prompt questions regarding charges for <br />services that the City provides. Pricing within cities is often cost recovery based. We believe <br />there can be significant benefit for local government to review prices from the standpoint of the <br />value of the service delivered. Several points to consider when evaluating your prices would <br />include targeting the following overall outcomes: <br />1. Develop an equitable approach <br />2. Develop a self - sustaining approach <br />3. Understand the role of the costs in delivering services and cost allocation systems <br />'— within the City <br />4. Be able to provide better justification to constituents <br />Vow <br />Page 68 <br />