Management Report and Recommendations 12/31/1998

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IIMIN IMor WRIO Honorable Mayor and Members of the City Council City of Link Lakes Page 5 Budgeting for Multi -Year Projects (Continued) One example could be: Received/ Remaining Original Expended budget for Budget in 1998 future vear(s) Revenues Bond Issue $ 1,000 $ 1,000 $ Transfer from fund 25 25 1,025 1,000 25 Expenditures Construction 900 750 150 Engineering 80 50 30 Prof services, legal 25 15 10 '- Bond issue costs 20 20 - AMP 1.025 835 190 Year 2000 Issues With the year 2000 rapidly approaching, many computer systems, as well as a number of other systems, may be impacted by the change to the year 2000. The issue is based on the ability of your current systems to read a two -digit year (00) as the year 2000 as opposed to 1900. Computer programmers have historically used only two digits to designate the year within computer software. A number of systems will, therefore, read 00 as 1900. If this occurs, corrupt data may be generated inside your computer software as well as other systems (fax machines, VCRs, clocks, air conditioning units, switchboards, alarm systems, information backup systems, and e-mail just to name a few). We understand that the City has spent considerable time in evaluating its systems and has replaced its finance software and fileserver, in addition to building a new building that hopefully will include compliant systems. We recommend that the city continue its efforts to identify other systems that may be impacted. — Reporting Model The Governmental Accounting Standards Board (GASB) has issued an "exposure draft" document on — issues related to the Govemmental Financial Reporting Model and recently released implementation dates based on the size of govemmental entities. The tentative implementation date for an organization the size of the City is the year 2003. This new reporting model significantly changes govemmental accounting which will impact the intemal financial accounting and external financial — reporting of the City. As a result, it will involve a significant commitment of time by the finance department staff. A summary of the key provisions of the exposure draft document is presented below: