Management Report and Recommendations 12/31/1985

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City of Lino Lakes, Minnesota Management Report, Page 33 an increase of 2 %. The combination of these factors increased the City's estimated cost in 1986 by 11 %. As the system gains users, the increased usage part of the overall increase should be offset by the billings to new users. The per unit portion of the increase, however, must be borne in full by existing users or be subsidized by overall City operations. The City has no control over the billings from the MWCC for the sewer treatment costs. This operating expense comprises 66% of the 1985 customer billings for sewer service charges. The City must set rates at levels adequate to pay for the pass through costs from MWCC plus other city expenses. In view of this arrangement with MWCC, the City's ability to exercise control over its sewer operations is limited. The City can be construed to be acting as an agent for the MWCC with regard to sanitary sewer opera- tions. Agency Funds The City maintained three Agency Funds in 1985 as follows: • Contractor's Deposits • Minnesota Housing Revenue Bonds • Investment Fund 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 that adequate deposits are received prior to incurring expenses on a developer's behalf.