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MIN
<br />Honorable Mayor and Members of the City Council
<br />City of Link Lakes
<br />Page 7
<br />COMBINED FINANCIAL STATEMENT ANALYSIS
<br />The combined financial statements of the City of Lino Lakes are presented in Statements 1 through 5 of
<br />the 1998 Annual Financial Report. The following comments relate to the Combined Balance Sheet - All
<br />Funds (Statement 1).
<br />Cash and Investments
<br />Cash and investments were as follows at December 31, 1998 and 1997:
<br />Description:
<br />Checking Balance
<br />Petty Cash
<br />Investments:
<br />Certificates of Deposit
<br />Commercial Paper
<br />Mutual Funds & Investment Pools
<br />U.S. Government Investments
<br />Municipal Bonds
<br />Certificates of Indebtedness
<br />Total
<br />December 31,
<br />1997 1998
<br />$ 93,344 $ 140,306
<br />760 760
<br />940,515
<br />2,925,926
<br />1,358,928
<br />9,688,224
<br />300,000
<br />375,000
<br />$ 15,682,697
<br />937,393
<br />400,000
<br />3,134,711
<br />14,632,870
<br />327,900
<br />512,734
<br />$ 20,086,674
<br />Increase
<br />(Decrease)
<br />$ 46,962
<br />(3,122)
<br />(2,525,926)
<br />1,775,783
<br />4,944,646
<br />27,900
<br />137,734
<br />$ 4,403,977
<br />Investment earnings totaled $1,155,931 in 1998 and $766,675 in 1997. The increase was due primarily
<br />to increased average cash and investment balances and the implementation of GASB 31.
<br />During 1998, the City implemented GASB 31, which requires that investments be valued at their fair
<br />value. Fair value is the amount that the city would receive if they chose to sell the investment as of the
<br />end of the year. This valuation at fair value may cause significant variances in investment earnings
<br />from year to year as market conditions change. The investment eamings for 1998 included an
<br />adjustment to fair value of approximately $202,000 related to implementing GASB 31. The
<br />implementation of GASB 31 also required adjusting the beginning fund balances down by
<br />approximately $88,800 for the adjustment of the fair value of investments at December 31, 1997.
<br />A schedule of cash and investment balances by fund type, including Investments Held in Escrow (as
<br />adjusted for interfund payables /receivables) is as follows:
<br />Fund Type
<br />General
<br />Special Revenue
<br />Debt Service
<br />Captial Project
<br />Enterprise
<br />Agency
<br />Total
<br />December 31,
<br />1997
<br />$ 3,045,734
<br />32,712
<br />1,007,370
<br />10,415,147
<br />900,497
<br />281,237
<br />$ 15,682,697
<br />1998
<br />$ 3,309,600
<br />41,124
<br />1,938,690
<br />13,789,874
<br />708,666
<br />298,720
<br />$ 20,086,674
<br />Increase
<br />(Decrease)
<br />$ 263,866
<br />8,412
<br />931,320
<br />3,374,727
<br />(191,831)
<br />17,483
<br />$ 4,403,977
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