Management Report and Recommendations 12/31/1992

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City of Lino Lakes, Minnesota Management Report, Page 46 • The cost of application to the FERC was estimated in 1986 at $12,200. The cost of the delivery (border) facility was estimated at $50,000. These amounts may be significantly different than estimated. Minnesota Statutes 216B.46 and 412.321 subd.2 require an election for the acquisition of a gas utility operation. • A more favorable revenue bond rate is probably available if the issue is "general _ obligation." The City's charter may require a vote to pledge property taxes to the purchase of the system. Dealings with the City of Circle Pines have the potential to be less than harmonious. Legal and accounting fees may, therefore, fluctuate significantly. • The City's accounting and billing computer system must be re- evaluated to determine if gas utility billings will be facilitated with the current system. • The City must determine the cost of additional equipment that must be purchased in addition to the Circle Pines system. • Evaluation of the adequacy of existing City staff to absorb all or a portion of the task associated with the gas utility. • The likelihood of voters to approve the acquisition. • Gas purchase price and contract demand negotiations. • Probability of growth of the system. AGENCY FUNDS At December 31, 1992, the City had four Agency Funds as follows: • Contractor's Deposits • Pending Assessments • Investment Fund • Deferred Compensation An Agency Fund is designed to account for transactions for other individuals, private organizations and/or other funds. The Contractor's Deposits Fund is used to account for "pass through" types of expenditures relating to prospective developers. The City pays certain legal, engineering and planning amounts to assure compliance with various City ordinances relating to pertinent applications. The City receives deposits and/or bills the various developers for costs incurred. We recommend that the City continue to maintain detailed records of amounts due from developers and assure that adequate deposits are received prior to incurring expenses on a developer's behalf (see later comments).