Management Report and Recommendations 12/31/1999

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- Honorable Mayor and Members of the City Council City of Lino Lakes Page 19 1998 Construction Fund (Continued) The 1998A G.O. Improvement bonds provided $2,400,565 toward financing the Lake Drive Utility project and the 1998B Improvement bonds provided $1,980,000 for the Lakes Addition project. Two other projects are also being accounted for here, the 21st Ave Street and Utilities and the Apollo Drive Phase III projects. These two projects were not included as part of either of the bond issues and a final financing source will need to eventually be determined. The 21st Ave Street and Utilities and the Apollo - Drive Phase III projects have expenditures of $618,047 and $491,586, respectively. We reemphasize that there are usually other financing sources to a project other than bond proceeds and often these transfers are made after the project is complete. As was mentioned earlier, it is possible that not all the - anticipated special assessment rolls for these projects have been adopted. SAC Revolving The SAC Revolving Fund was established in 1990 to account for a refund from the MCES (formerly MWCC) of past SAC charges which were paid by residents that had not hooked up to the sewer system. A summary of financial activity of this fund is as follows: Prior Years 1999 Total Revenue SAC refund $ 365,175 $ 3,641 $ 368,816 Investment earnings 208,597 - 208,597 Total revenue 573,772 3,641 577,413 Expenditures: Refunds 226,372 3,847 230,219 Fund balance - December 31, 1999 347,194 The City is allowing current homeowners to request a refund with 4% interest. If refunds and claims are - not submitted, the City will pay the full SAC charge from this fund at the time of hook -up. This policy will likely require a supplemental future revenue source if future MCES SAC charges exceed available balances and any investment earnings. There are approximately 472 potential connections and /or refunds remaining that could be made in the future. At the 1999 connection rate of $1,100 per connection, there is potentially a liability of $519,200 _ if everyone were to connect in 2000. If the MCES SAC fees continue to increase at a rate that is faster than the investment earnings rate, other revenue sources will be needed in the future to fund the actual connections when they occur. - We understand that staff is in the process of identifying lots that are unlikely to be connected in the future.