Management Report and Recommendations 12/31/1987

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IICity of Lino Lakes, Minnesota Management Report, Page 6 1 1 1 1 1 1 1 1 1 1 1 1 1 Combined Financial Statements The Combined Financial Statements of the City are presented in Statements 1 through 5 of the 1987 Annual Financial Report. The following comments relate to those state- ments. Cash and Investments Cash and investments held by the City at December 31, 1987 totaled $2,296,090 as compared to the 1986 balance of $1,415,996. Additionally, the City increased the fund balance of the General Fund (see later comments). Cash and investments are summarized as follows: December 31, Increase Description 1987 1986 (Decrease) Treasurer's balance - checking $ 13,452 $ (55,091) $ 68,543 Petty cash 150 150 Investments: Certificate of deposits 1,752,331 706,932 1,045,399 Small Business Administration (SBA) 67,970 71,577 (3,607) FNMA Pool 304,722 398,114 (93,392) NOW account 157,465 294,314 (136,849) Totals $2,296,090 $1,415,996 $ 880,094 The City had interest earnings on investments of $108,098 in 1987 as compared to 1986 earnings of $146,689. The decrease in interest earnings was caused primarily by lower cash balances available throughout 1987. The City maintains an average negative balance in the City's checking account. These negative balances are "book" balances only. These balances indicate that the City is depositing cash which is not needed for current expenses into interest bearing accounts. We recommend that the City continue this practice of minimal balances in the City's checking account to increase interest earnings.