Management Report and Recommendations 12/31/1982

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City of Lino Lakes Management Report, Page 14 Combined Financial Statements The Combined Financial Statements of the City are presented in Statements 1 through 5 of the 1982 Annual Financial Report. The following comments relate to those statements. Cash And Investments December 31, Increase Description 1982 1981 (Decrease) Treasurer's balance $ 1,242 $ 770 $ 472 Investments - at cost 292,165 333,220 (41,055) Savings account 116,154 111,541 4,613 Totals $ 409,561 $ 445,531 $(35,970) The treasurer's balance consists of the checking account balance and the City's petty cash fund. During 1982 and 1981, the City maintained an average negative balance IIof approximately $1,400 and $1,200 in the City's checking acocunt. These negative balances are "book" balances only. These balances indicate that the City is depositing cash not needed for current operations into interest bearing accounts. We recommend that the City continue this practice of minimal balances in the City's checking account to maximize investment earnings. The City's savings account is used for daily investment purposes. During 1982 and II1981, the City maintained an average month -end balance in this account of $44,000. This account earns interest at a rate of 5.25% daily versus interest earned on certificates of deposits or repurchase agreements in 1982 of 15.37% to 8.25 %. During the latter part of 1982, the City reduced the usage of the 5.25% savings account and correspondingly established a NOW account to improve the yield on very short period investments. We concur with the strategy to maximize interest yields and recom- mend that the City continue innovative techniques as market conditions change.