Comprehensive Annual Financial Report 12/31/2003

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Profile of the Government The City of Lino Lakes, incorporated in 1955, is a growing community in the southeast corner of the County of Anoka. It covers an area of 33 square miles and has a population of approximately 18,261. The population has more than doubled from the 1990 census figure of 8,807. Within the City's borders lies the 2,550 acre Rice Creek Chain of Lakes Regional Park. Access to St. Paul and Minneapolis is provided by I -35W and I -35E. The City Charter, as amended, establishes a mayor - council form of government and grants the City Council full policy - making and legislative authority to the mayor and four council members. The City Council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and hiring a city administrator. The City Administrator has the responsibility of carrying out the policies and ordinances of the City Council, for overseeing the day -to -day operation of the City. The City Council is elected at -large on a non- partisan basis, with council members serving four -year terms and the mayor serving a two -year term. Elections are held every two years with two council seats and the mayor being up for election each election cycle. The City provides a full range of municipal services. These services include: general government, public safety (police & fire), public works (streets & fleet), parks and recreation, conservation of natural resources (environmental & solid waste abatement), public improvements, providing and maintaining sanitary and storm sewer, water infrastructure, and two enterprise funds, the water and sewer funds. The annual budget is the foundation for the City of Lino Lakes' financial planning and control. All divisions are required to submit appropriations requests to the City Administrator for review and consolidation into a proposed budget. The City Administrator is responsible for submitting the proposed annual budget to the City Council in August of each year. The City Council is required to hold a public hearing on the proposed budget and to adopt by resolution a final budget and certify it no later than December 28. The budget amounts cannot increase beyond the estimated receipts except to the extent that actual receipts exceed the estimate. Division directors may make transfers of appropriations within a department, but transfers of appropriations between departments require council approval. Budget -to- actual comparisons for the general fund, the only fund for which an annual budget has been adopted, are provided in this report beginning on page 53. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Lino Lakes operates. Local economy. The economic development effort established in 1993 by the City Council has begun to have an impact in the diversity of the City's tax base. Since 1993, the City has added more than $60 million in additional commercial /industrial market value. The Apollo Business Park on I -35W and the Clearwater Creek Development Center on I -35E continue to attract industrial development. A new commercial retail center on Lake Drive and Apollo Drive in the Town Center area, known as the Lino Lakes Marketplace, has begun development and the two anchor tenants, Target and Kohl's, were completed and opened in 2002. A weak economy led to fewer housing permits being issued in 2003. However, commercial /industrial development continued at a steady pace. A Dairy Queen Grill `n Chill restaurant was completed and opened in 2003, and a Discount Tire store will open in mid -2004 in the Lino Lakes Marketplace. A 265,000 square foot distribution center on the southwest quadrant of I -35W and Lake Drive began construction and should be operational by mid -2004, further contributing jobs and adding approximately $9 million in value to the City's growing commercial /industrial tax base. 4