Management Report and Recommendations 12/31/1984

Home Search

City of Lino Lakes, Minnesota Management Report, Page 43 The Water and Sewer Fund continues to maintain cash overdrafts. Rates are currently not adequate to cover the expenses incurred in that fund. In addition to the operating funds, the City has incurred cash overdrafts in two grant funded Capital Project Funds (i.e., CDBG and LAWCON - see earlier sections of this report). These overdrafts are anticipated to be funded by future grant proceeds and /or other City participation. Three Special Assessment Debt Service Funds have cash overdrafts at December 31, 1984. Over $33,000 of these overdrafts are the result of expending project monies prior to bonding. Additionally, the City has not remitted over $24,000 of SAC charges which are due and payable to the MWCC. The various funds which incur cash overdrafts are cause for concern and action by the City Council. Effectively, the City is utilizing the concept of "using Peter to pay Paul ". This cannot continue for an indefinite period. Potential reductions in State and Federal aid could severely curtail the City's ability to provide minimum levels of basic services. This situation is probably manageable, if the City takes timely action to respond to the current situation. In response to the current adverse financial position of various funds, the City should increase efforts to respond to the ever changing financial mana- gement environment. Future actions and efforts should include: • A plan of action to develop adequate and appropriate reserve balances in the governmental funds and enterprise funds of the City. • Cash -flow projections, review, analysis and interpretations related thereto for all (general, revenue and special assessment) bond issues of the City. • Re- evaluation of all programs and services provided by the City as to appropriateness based upon the existing financial environment including a re- evaluation of levels of services and the costs thereof. • Continued improvements and enhancements to the financial accounting and financial management systems of the City to provide the necessary data to enable the City to plan and manage the financial operations of the City. • Regular and ongoing meetings related solely to the financial management and planning of the City.