Management Report and Recommendations 12/31/1985

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City of Lino Lakes, Minnesota Management Report, Page 15 The City increased the overall fund balance by $185,400 in 1985. A portion of the balance is committed to specific uses as follows: • LAWCON (special levy) which must be used for matching expenditures or be substantiated through the allocation of "in -kind" costs. • Prepaid insurance Total $ 30,000 47,624 $ 77,624 A graphic illustration of fund balance compared to expenditures and transfers out is as follows: $1 X00 $1,100 $1,000 $900 $800 $700 $600 $500 $400 --t $300 ,- $200 $100 ($100) 1978 1979 1980 1981 1982 1983 1984 1985 $1,200 $1,100 $1,000 $900 ;800 $700 $600 $500 $400 $300 $200 $100 ($100) 0 Expenditures and Transfers -46 Fud Balance The amount of General Fund reserve required to meet emergency and /or unanticipated expenditures is not readily quantifiable. Rather, the level of this requirement must be established by the City based on the history of the City and the philosophy of "adequate" reserve coverage. The reserve requirement to deal with unforeseen intergovernmental revenue reductions is also difficult to quantify. State and Federal legislation dealing with shared aids is somewhat unpredictable. The City must strive to remain current on the effects of changing legislation and budget such aids accordingly. A reserve balance in the City's General Fund will mitigate the adverse effects of aid reductions which are received after expenditure budget commitments are made.