Management Report and Recommendations 12/31/1990

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City of Lino Lakes, Minnesota Management Report, Page 48 Bad Debts Intenvptible Sales Increase / (Decrease) Increase / (Decrease) Year Amount Amount Percent Amount Amount Percent 1981 $105,143 1982 118,734 $13,591 12.93% 1983 146,092 27,358 23.04% 1984 155,626 9,534 6.53% 1985 149,590 (6,036) (3.88)% 1986 92,822 (56,768) (37.95)% 1987 $3,334 $3,334 3.25% 88,509 (4,313) (4.65)% 1988 2,757 (577) (17.31)% 83,363 (5,146) (5.81)% 1989 3,394 637 23.10% 111,977 28,614 34.32% 1990 53 (3,341) (98.44)% 108,699 (3,278) (2.93)% Prior to 1987, bad debts were netted with sales. The City of Lino Lakes had rights to receive payment of net income after the accumulated retained earnings deficit is eliminated. Prior to 1988, the City received no such distributions. The Circle Pines gas utility has accumulated a positive retained earnings balance in excess of $800,000 and for the first time at December 31, 1990 the Lino Lakes Franchise has a positive fund balance of $19,000. The City has taken the following actions regarding the gas utility operations: — • Successfully worked to gain special State legislation to allow a greater number of members on the Joint Gas Utility Commission. • Reviewed optional criteria for representation on the Commission to allow for a fair and equitable method of appointing members from each City. • Analyzed accounting methods of allocating expenses between each City's gas operation. • Negotiated a new franchise agreement. • Considered exercising the City's option to purchase the gas utility.