Management Report and Recommendations 12/31/1987

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City of Lino Lakes, Minnesota Management Report, Page 43 Agency Funds The City maintained three Agency Funds in 1987 as follows: • Contractor's Deposits • Investment Fund • Deferred Compensation An Agency Fund is designed to account for transactions for other individuals, pri- vate organizations and /or other funds. The Contractor's Deposits Fund is used to account for "pass through" types of expen- ditures 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 detail records of amounts due from developers and assure that adequate deposits are received prior to incurring expenses on a developer's behalf. The Deferred Compensation Fund is a new fund which reports qualified IRS 457 plan activity. The cash is held by the escrow agent on behalf of City employees in the plan. Franchise Agreement - Gas Utility Portions of the City of Lino Lakes have gas service through a franchise agreement between the City of Circle Pines and the City of Lino Lakes. The City of Circle Pines operates the gas utility. The City of Lino Lakes has rights to receive payment of net income after the accumu- lated retained earnings deficit is eliminated. Prior to 1988, the City received no such distributions. The Circle Pines gas utility has accumulated a positive retained ear- nings balance in excess of $500,000 while the Lino Lakes retained earnings account is in a deficit position.