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City of Lino Lakes, Minnesota
<br />Management Report, Page 45
<br />We have reviewed the initial distribution of gas franchise profits received by the
<br />City of Lino Lakes under the terms of the franchise agreement. The revenue was calcu-
<br />lated on the following basis:
<br />Residential and Commercial Revenue $102,653 @ 7% = $ 7,186
<br />Interruptible Service 88,509 @ 3% = 2,655
<br />Total $191,162 9,841
<br />Remitted by Circle Pines 9,615
<br />Difference $ 226
<br />The above difference is related to bad debts within the City of Lino Lakes. The
<br />franchise agreement allows for adjustment from gross revenue of net bad debts. The City
<br />of Lino Lakes had bad debts of approximately $3,300 in 1987. The City of Circle Pines
<br />reports such bad debts on a combined expense line - "administrative - other ". We recom-
<br />mend the following:
<br />1. •Request that Circle Pines provide their calculation of franchise fee
<br />remittances including bad debt adjustments.
<br />2. Review with Circle Pines their methods of enforcing collection and consider
<br />adopting such procedures within the City such as including significant
<br />outstanding delinquent billings on assessment search records.
<br />3. Annually update the following schedule to analyze fluctuation in revenue data.
<br />Residential Commercial Total
<br />Increase /(Decrease) Increase /(Decrease) Increase /(Decrease)
<br />Year Amount Amount Percent Amount Amount Percent Amount Amount Percent
<br />1981 $ 67,387 $ 16,526 $ 83,913
<br />1982 88,195 $ 20,808 30.88% 18,781 $ 2,255 13.65% 106,976 $ 23,063 27.48%
<br />1983 96,272 8,077 9.16 22,478 3,697 19.68 118,750 11,774 11.01
<br />1984 97,007 735 0.76 23,829 1,351 6.01 120,836 2,086 1.76
<br />1985 102,156 5,149 5.31 29,356 5,527 23.19 131,512 10,676 8.84
<br />1986 90,407 (11,749) (11.50) 24,764 (4,592) (15.64) 115,171 (16,341) (12.43)
<br />1987 82,787 (7,620) (8.43) 19,866 (4,898) (19.78) 102,653 (12,518) (10.87)
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