Management Report and Recommendations 12/31/1984

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City of Lino Lakes, Minnesota Management Report, Page 6 Combined Financial Statements The Combined Financial Statements of the City are presented in Statements 1 through 5 of the 1984 Annual Financial Report. The following comments relate to those state- ments. Cash and Investments Cash and Investments held by the City at December 31, 1984 totaled $541,791 as com- pared to 1983 balance of $581,790. These balances were deposited in various accounts and investments are summarized below: December 31, Increase Description 1984 1983 (Decrease) Treasurer's balance - checking $(23,450) $ 3,219 $(26,669) Petty cash 150 150 Investments: Certificate of deposits 300,000 400,000 (100,000) Small Business Administration (SBA) 80,926 100,630 (19,704) Government National Mortgage Association 98,727 98,727 Savings account 15 (15) NOW account 85,438 77,776 7,662 Totals $541,791 $581,790 $(39,999) The City in 1983 had interest earnings on investments of $33,226 as compared to 1984 earnings of $45,284. The increase in interest earnings was directly effected by increasing interest rates available. In 1983, rates ranged from 8% to 9.25% and in 1984 ranged from 8.5% to 12.25 %. Additionally, the average cash available to invest throughout 1984 was greater than the prior year. During 1984 and 1983, the City maintained an average negative balance of approxima- tely $24,000 and $27,000 respectively in the City's checking account. These negative balances are "book" balances only. These balances indicate that the City is depositing cash which is not needed for current expenses into interest bearing accounts. We recom- mend that the City continue this practice of minimal balances in the City's checking account.