Management Report and Recommendations 12/31/1984

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City of Lino Lakes, Minnesota Management Report, Page 42 Fund Management Each fund of the City is designed to operate as a separate self - balancing set of accounts. Cash deficits in one fund must have compensating balances in another fund to avoid an overall cash deficit in the City. The City of Lino Lakes currently incurs cash deficits throughout the year in a number of funds. Compensating positive cash balances have thus far been provided by the Parks and Playgrounds Fund and the Special Assessment Debt Service Funds (primarily the Improvement Bonds of 1982 Fund). The Parks and Playgrounds Fund had $111,000 of cash and investments at December 31, 1984. In the absence of a major City Council expenditure authorization, this cash balance should remain available. The Special Assessment Debt Service Funds had over $316,000 of cash and investments at December 31, 1984. This cash balance, however, may not be available to the City in the next few years for the following reasons: • Debt payments are scheduled and cannot be delayed. • The cash balance is committed to meet these debt payment at a rate of just under $200,000 per year. • Future revenue sources are not assured because of: - cancelled property tax levies for the Improvement Bonds of 1982. - poor special assessment collection rates (see page 29). - assessments on property which was acquired by the City through tax for- feiture proceedings. The above factors indicate that the positive cash balance of the Special Assessment Debt Service Funds may diminish over the next several years. As stated earlier, the City has relied on positive cash balances to offset the cash deficits incurred throughout the year in the operating funds of the City. The General Fund incurs cash overdrafts in several months of the year because there is not an ade- quate "cash flow" reserve to offset the timing difference in the receipt of major reve- nues (see earlier section - General Fund).