Management Report and Recommendations 12/31/1983

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City of Lino Lakes Management Report, Page 16 The amounts presented for all years in the above schedule as "designated" consist of prepaid insurance and amounts designated for road improvements (1981 and prior). Prepaid insurance is not available for other expendable purposes and therefore is designated for ensuing years expenditures. The amount designated at December 31, 1983 and 1982 also includes a $30,000 designa- tion for the City matching share of the LAWCON Grant. This amount was levied for collection in 1982 under special levy authority. As such it is not available for general City purposes, but rather is designated for transfers to the LAWCON Fund for the City's share of the Country Lakes Park project. Temporary cash overdrafts of certain funds must have offsetting cash balances in other City funds to maintain an overall positive cash balance for a City. The General Fund should maintain adequate cash balances to maintain operations without experiencing cash overdrafts. The cash overdraft of the General Fund was in excess of $186,000 at June 30, 1983. For 1983, the General Fund had a positive cash balance only in the month of December. No local government aid will be available to the City until July for 1984 and the first half tax allocation will also not be available until July, 1984. The City improved the financial position and reserve balance of the General Fund substantially over the past year. We encourage the City to increase efforts toward improving this financial position until an appropriate level of reserve balance is achieved. The level of fund balance of the City's General Fund is one indicator of the finan- cial strength or independence of a city. This often becomes critical during periods of high inflation; decreasing State aids; and poor economic growth. With adequate reserves, these external factors are more mangeable by the City.