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IMMO <br />City of Lino Lakes, Minnesota <br />Management Report, Page 28 <br />Debt Service Funds should be evaluated at least annually. The following chart summarizes <br />steps to consider. <br />Condition A <br />Fund balance plus <br />deferred revenue <br />meets or exceeds <br />bonds payable. <br />Cautions <br />.,. /1. Is the City experiencing favorable <br />collection rates for special assess- <br />ments? <br />2. Are anticipated investment interest <br />rates earned on prepayments ade- <br />quate to replace assessment interest? <br />3. Is the timing of receipts sufficient to <br />meet bonded debt payments as <br />they become due? <br />4. Are significant portions of assess- <br />ments not scheduled for collection <br />(green acres, tax forfeit,etc.)? <br />5. Is arbitrage or negative arbitrage <br />an issue? <br />Ism <br />Condition B <br />Fund balance plus <br />deferred revenue <br />is less than <br />bonds payable. <br />Questions <br />1. Are sufficient future assets <br />scheduled (such as property taxes) <br />to meet bonded debt payments? <br />2. Are cash assets sufficient to <br />generate investment earnings? <br />3. Are transfers or other funding <br />sources available? <br />4. Are there future assets to pledge <br />such as assessments, MSA allot- <br />ments, etc.? <br />Conclusion 1 <br />The debt service fund <br />is clearly nQ L adequately <br />funded. Plan for altern- <br />ative funding (taxes, <br />transfers, other sources). <br />Conclusion 2 <br />Variables and possible <br />outcomes are too diverse. <br />Prepare projections to <br />analyze possible <br />scenarios and options. <br />Conclusion 3 <br />