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City of Lino Lakes, Minnesota <br />Management Report, Page 4 <br />The above per household guarantee results in a "revenue guarantee ". This revenue guarantee is <br />compared to the City's 1987 tax capacity to compute an "initial aid" as follows: <br />City revenue guarantee (households times <br />the per household guarantee plus 8%) $1,263,453 <br />Less 1987 City tax capacity (835,103) <br />Initial aid $428,350 <br />The initial aid may increase if the 1988 City revenue (as increased for the applicable statutory <br />percent) exceeds the initially calculated amount of aid. The City of Lino Lakes' 1989 LGA does <br />not exceed the "initial aid" as calculated above. The City of Lino Lakes benefits from a 6% <br />increase factor used in the following schedule to determine the "formula aid increase" as follows: <br />1988 City revenue: <br />Property tax levy $1,146,879 <br />Local government aid 232,472 <br />Total 1988 City revenue 1,379,351 <br />1989 City revenue guarantee + 1,263,453 <br />Statutory ratio (1988 City revenue <br />divided by 1989 City revenue guarantee) = 1.09 <br />The preceding statutory ratio of 1.09 results in a 6% percent increase according to Minnesota <br />Statutes 477A.013. This 6% increase compares to a maximum available formula aid increase of <br />9 %. This percent increase, as applied to the 1988 City revenue, results in less of an increase than <br />initially calculated above. The final actual increase is as follows: <br />Total 1988 City revenue $1,379,351 <br />Expenditure/unlimited aid ratio <br />applicable percentage (formula aid increase) x 6.0% <br />1989 aid increase = 82,761 <br />1989 additional aid increase for low <br />per household tax capacity 15,992 <br />1988 aid 232,472 <br />Reduction for State demographer costs (13) <br />1989 local government aid $331,212 <br />1989 LGA percent increase 42.47% <br />