Management Report and Recommendations 12/31/1982

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City of Lino Lakes I Management Report, Page 24 1 1 1 1 1 1 1 1 1 1 1 1 1 1 The overall fund balance of the General Fund has been as follows for the past several years: Year Ended December 31, 1978 1979 1980 1981 1982 Fund Balance (Deficit) Designated $ 11,464 14,655 18,766 19,876 46,466 Increase (Decrease) in Undesignated Undesignated $ 51,249 50,652 $ (597) (19,730) (70,382) 30,109 49,839 13,355 (16,754) The amounts presented for all years in the above schedule as "designated" consist of prepaid insurance and amounts designated for road improvements. Prepaid insurance is not available for other expendable purposes and therefore is designated for ensuing years expenditures. The amount designated at December 31, 1982 also includes a $30,000 designation 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, IIbut rather is designated for transfers to the LAWCON Fund for the City's share of the Country Lakes Park project. That project is funded 28% State, 30% Federal, with the balance of 42% to be paid by the City. The total City share is estimated to be $82,000: (see later comments regarding LAWCON Fund). A common critique of local governments is the appearance of building and maintaining unnecessary reserve balances. Prudent financial management, however, demands the main- tenance of adequate reserves and is the responsbility of the governing body. Operating reserves (for tax levy supported funds) are mandatory and not optional. The primary purpose for maintaining operating surpluses is to provide for cash flow requirements (working capital) during the first half of each calendar year before the City receives its property tax settlement from the County. Property taxes are used to finance the General and Special Revenue operating budgets of the City. These monies generally