Management Report and Recommendations 12/31/1993

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City of Lino Lakes, Minnesota Management Report, Page 37 The current franchise agreement provides a revenue source to the City of Lino Lakes. Key features of the new agreement are as follows: 1. Term: January 1, 1987 through March 31, 2012. 2. Revenue to the City of Lino Lakes based on 7% of sales except for interruptible sales which are based on 3 %. 3. Cancelable by the City of Circle Pines commencing on January 1, 1992. The City of Lino Lakes has the right to cancel the franchise agreement through the purchase of this system beginning on January 1, 1992. 4. Right to inspect the financial/accounting records to verify revenue calculations. 5. Revenue began accruing on January 1, 1987. Revenue will be received four and one- half months after the year end (i.e., first receipt was in May, 1988). 6. The City has the right to purchase the system at stated terms beginning on January 1, 1992. We commend the City for the successful efforts to receive a supplemental financing source for the City. The City received $31,675 in 1994 which represents the 1993 share of earnings. Earnings from inception of the new a -zement total $124,680. Financial uncertainties facing metropolitan cities require diversity of revenue sources to assure adequate funding of operations without severe property tax increases.