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City of Lino Lakes, Minnesota
<br />Management Report, Page 8
<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 1992 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, 1991 and 1992:
<br />December 31, Increase
<br />Description 1991 1992 (Decrease)
<br />Treasurer's balance - checking ($29,132) ($2,128) $27,004
<br />Petty cash 150 150 0
<br />Investments:
<br />Certificates of deposit 5,296,747 3,042,947 (2,253,800)
<br />Commercial paper 598,997 (598,997)
<br />4M money market fund 65 (65)
<br />FNMA pool 178,301 761,013 582,712
<br />NOW account 765,841 460,576 (305,265)
<br />GNMA 129,745 326,715 196,970
<br />AIM 1,423,474 1,431,852 8,378
<br />Federal Farm Credit Bank 100,000 100,000
<br />Federal Home Loan Mortgage Corp. 595,773 595,773
<br />Treasury Security 1,525,693 1,525,693
<br />Federal Home Loan Bank 343,656 343,656
<br />Repurchase agreement 596,850 596,850
<br />Totals
<br />$8,364,188 $9,183,097 $818,909
<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 $379,369 in 1992 and $540,063 in 1991. The ability of a city
<br />to generate investment earnings is an indication of sound fiscal management. The interest earnings
<br />of the General Fund indicate that the City is maintaining operating reserves in this fund. Operating
<br />reserves are mandatory to compensate for cash flow timing differences in the receipt of major
<br />revenue sources and for various other purposes as discussed later in this report (see "General
<br />Fund ").
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