Management Report and Recommendations 12/31/1987

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City of Lino Lakes, Minnesota Management Report, Page 37 • Establish several revenue accounts to segregate connection /area charges by debt service commitment. • Maintain a subsidiary record of collections by debt issue and adjust annually for II transfers to arrive at remaining designated balance. • Allocate interest within the fund by designated balance. We are available to assist the City in the above areas. Administrative Construction Charges /Public Improvement Policy The City incurs expenditures in the General Fund through use of administrative time and effort in the completion of construction projects. It is appropriate for the City to charge an interfund administrative fee for these services during the construction phase of the project. A common basis for the fee is a percent of the project or of the contract (either a flat percent or a sliding percent based on the size of the project). During 1984, the City established a policy regarding administrative charges (Resolution #84 -4). The policy includes a "step down" administrative charge based on the size of the project. We concur with this approach and, in our opinion, the percen- tages used are reasonable and comparable to those used by other suburban metropolitan cities. The policy (as implemented) requires one time transfers of administrative charges from the special assessment construction funds. However, the policy was unclear as to when the transfer for administrative charges should be made. The Public Improvement Policy now clarifies this issue. The City engineer is to calculate the charge when the project is 85% - 100% complete. We recommend that the City record the charge when received from the City engineer. On January 11, 1988, the Lino Lakes City Council approved resolution 2 -88 adopting the Lino Lakes Public Improvement Policy. The policy covers the following areas: