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NNW
<br />UNNI
<br />WPM
<br />City of Lino Lakes, Minnesota
<br />Management's Discussion and Analysis
<br />December 31, 2003
<br />FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS:
<br />As noted earlier, the City of Lino Lakes uses fund accounting to ensure and demonstrate compliance with finance
<br />related legal requirements.
<br />Governmental Funds. The focus of the City of Lino Lakes' governmental funds is to provide information on
<br />near -term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the
<br />City of Lino Lakes' financing requirements. In particular, unreserved fund balance may serve as a useful
<br />measure of a government's net resources available for spending at the end of the fiscal year.
<br />As of the end of the current fiscal year, the City of Lino Lakes' governmental funds reported combined ending
<br />fund balances of $15,454,578, an increase of $1,603,747. Approximately 70% of this total amount, or
<br />$10,890,096, constitutes unreserved fund balance, which is available for spending at the government's discretion.
<br />The remainder of fund balance is reserved to indicate that it is not available for new spending because it has
<br />already been committed 1) to liquidate contracts and purchase orders of the prior period ($135,680), 2) to pay
<br />debt service or interfund advances ($3,439,296), or 3) to fund land held for resale for future development
<br />($989,506).
<br />The general fund is the chief operating fund of the City of Lino Lakes. At the end of the current fiscal year,
<br />unreserved fund balance of the general fund was $4,775,969, while the total fund balance was $4,909,890. As a
<br />measure of the general fund's liquidity, it may be useful to compare unreserved fund balance and total fund
<br />balance to total fund expenditures. Unreserved fund balance represents 75 percent of total general fund
<br />expenditures, while total fund balance represents 78 percent of that same amount.
<br />The fund balance of the City of Lino Lakes' general fund increased by $556,872 during the current fiscal year.
<br />The primary reason for this increase was an intentional decrease in spending in response to a cut in aid payments
<br />from the state by the state legislature. Overall, the general fund's revenues were slightly below the amended
<br />budget due primarily to decreased building activity and lower than expected investment returns, while
<br />expenditures were well below budgeted levels.
<br />The G.O. taxable improvement bonds 200B fund has a total fund balance of $521,795, all of which is reserved for
<br />the retirement of related debt. The net increase of $456,445 in fund balance is the result of prepayments of special
<br />assessments.
<br />The dedicated parks fund has total fund balance of ($699,225), the result of the purchase of land for a recreation
<br />complex in 1998. The net increase of $41,293 in fund balance is the direct result of increased park dedication
<br />fees.
<br />The area and unit charge fund has a total fund balance of $7,788,560, of which $957,112 is reserved for advances
<br />to other funds, and $6,831,448 is unreserved and available for financing capital improvements. The decrease in
<br />fund balance during the current year was $285,546 and was the result of funding infrastructure projects within the
<br />city and transfers for debt service payments.
<br />The municipal state aid fund has a total fund balance of ($391,389), a decrease of $27,057 during the year. The
<br />decrease in fund balance is primarily due to city funding of project costs that will be reimbursed by other
<br />governments or funds.
<br />Proprietary funds. The City of Lino Lakes' proprietary funds provide the same type of information found in the
<br />government -wide financial statements, but in more detail.
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