Management Report and Recommendations 12/31/1985

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City of Lino Lakes, Minnesota Management Report, Page 30 Interim Construction This fund was established in 1985 to account for the preliminary construction costs prior to permanent bonding or other financing determination. We concur with the City in establishing this fund. 1985 activity of this fund was for preliminary costs of the 4th Avenue bridge pro- ject and the 80th Avenue project. Costs incurred to date are as follows: Engineering 4th Avenue 80th Avenue Total $ 16,021 $ 87 $ 16,108 ▪ Rice Lakes Estates Addition The City began this project in 1985. The project is scheduled for completion in 1986. We recommend that this fund be closed to the Temporary Improvement Bond after final completion of construction. Administrative Construction Charges 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). Maw 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. The City has made such administrative • charges in 1985 for projects bonded for with the 1985 issue.