|
City of Lino Lakes, Minnesota
<br />Management Report, Page 2
<br />_ ACCOUNT BALANCE ANALYSIS OF THE
<br />COMBINED FINANCIAL STATEMENTS
<br />The combined financial statements of the City of Lino Lakes are presented in Statements 1
<br />through 5 of the 1993 Annual Financial Report. The following comments relate to the Combined
<br />Balance Sheet - All Funds (Statement 1).
<br />Cash and Investments
<br />Cash and investments were as follows at December 31, 1992 and 1993:
<br />December 31, Increase
<br />Description 1992 1993 (Decrease)
<br />Treasurer's balance - checking ($2,128) $1,909 $4,037
<br />Petty cash 150 150 0
<br />Investments:
<br />Certificates of deposit 3,042,947 389,659 (2,653,288)
<br />Commercial paper 0 1,347,997 1,347,997
<br />FNMA pool 761,013 1,468,090 707,077
<br />NOW account 460,576 596,553 135,977
<br />GNMA 326,715 0 (326,715)
<br />Investment pools 1,431,852 3,975,538 2,543,686
<br />Federal Farm Credit Bank 100,000 500,000 400,000
<br />Federal Home Loan Mortgage Corp. 595,773 200,000 (395,773)
<br />Treasury Security 1,525,693 2,604,485 1,078,792
<br />Federal Home Loan Bank 343,656 0 (343,656)
<br />Repurchase agreement 596,850 0 (596,850)
<br />Federal agriculture mortgage, discount notes 0 842,633 842,633
<br />Totals .$9,183,097 $11,927,014 . $2,743,917
<br />The City occasionally maintains a negative balance in the City's checking account. These
<br />negative balances are "book" balances only. These balances indicate that the City is depositing
<br />cash which is not needed for current expenses into interest bearing accounts. We concur with the
<br />City's practice of maintaining minimal balances in the City's checking account to increase interest
<br />earnings.
<br />_ Interest on investments totaled $615,011 in 1993 and $379,369 in 1992. The increase in
<br />interest earnings is the result of gains on sale of U.S. Treasury zero- coupon investments. The
<br />ability of a city to generate investment earnings is an indication of sound fiscal management. The
<br />interest earnings of the General Fund indicate that the City is maintaining operating reserves in this
<br />fund. Operating reserves are mandatory to compensate for cash flow timing differences in the
<br />receipt of major revenue sources and for various other purposes as discussed later in this report
<br />(see "General Fund ").
<br />
|