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City of Lino Lakes, Minnesota
<br />Management's Discussion and Analysis
<br />December 31, 2008
<br />FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS (CONTINUED)
<br />Proprietary funds (Continued) The water and sewer rates remained the same in 2008 as in 2007. A rate
<br />study was performed in 2007 and was accepted in June, 2008. Water rate adjustments, reflecting water
<br />conservation efforts through a tiered rate structure, were approved in late 2008 and will go into affect
<br />beginning in 2009. Sewer Rates will remain unchanged in 2009.
<br />GENERAL FUND BUDGETARY HIGHLIGHTS
<br />The original budget was amended several times during the year reflecting donations and grants received
<br />primarily for police personnel and equipment, and reallocating resources within the original budget.
<br />Revenues were $317,778 under budget. This is due to a few major factors. The Governor used his
<br />unallotment powers to withhold one -half of the Market Value Credit the City was to receive from the State
<br />in 2008, amounting to over $120,000 of lost revenue. Property taxes were lower due to higher
<br />delinqencies in tax payments. Investment earnings, due to declining interest rates were also significantly
<br />under budget. Lower building activity and, therefore, fewer new construction building permits being issued
<br />was also a factor. State intergovernmental revenues for police PERA aid were well over budgeted revenue
<br />for the year due to increased state funding in these areas. Local government grants were slightly under
<br />budget due to lower grant funds allocated by the granting entity. Public safety charges for service were
<br />also well over budget due to greater than expected traffic control contracts. Fines and forfeitures were
<br />over budgeted amounts due to Operation Nitecap and other programs aimed at increased patrolling for
<br />vehicular violations. Expenditures came in under the budgeted amounts by $428,600 due mainly to lower
<br />than expected personal services costs and savings in contractual service costs. Energy costs for fuels and
<br />electricity were higher than budgeted amounts, although at year end the costs for these areas had
<br />decreased significantly from the high costs experienced during the summer months. There were also net
<br />transfers from the general fund of $806,180, $65,180 over budgeted transfers. This resulted in a net fund
<br />balance increase of $46,110 for the fiscal year.
<br />CAPITAL ASSET AND DEBT ADMINISTRATION
<br />Capital assets The City of Lino Lakes' investment in capital assets for its governmental and business -
<br />type activities as of December 31, 2008, is $78,787,048 (net of accumulated depreciation). This
<br />investment in capital assets includes land, buildings, office equipment and furniture, vehicles, machinery
<br />and equipment, other capital assets, and infrastructure. This represents a decrease in the City of Lino
<br />Lakes' investment in capital assets (net of accumulated depreciation) of 3.2 %. This decrease is entirely
<br />within the governmental activities and is attributable to the depreciation of constructed streets,
<br />underground infrastructure and vehicles. Within the business -type activities the most significant increases
<br />occurred in infrastructure installation in relation to the water and sewer funds.
<br />Land
<br />Construction in Progress
<br />Buildings
<br />Office Equipment and Furniture
<br />Vehicles
<br />Machinery and Shop Equipment
<br />Other Equipment
<br />Infrastructure
<br />Capital Assets, Net
<br />Capital Assets at Year -End
<br />(Net of Accumulated Depreciation)
<br />Governmental Activities
<br />2008 2007
<br />$ 2,809,059 $ 2,809,059
<br />2,762,525 5,738,921
<br />4,162,757 4,376,812
<br />443,209 491,145
<br />1,311,603 1,157,749
<br />215,050 246,652
<br />351,186 391,712
<br />34,831,339 34,474,650
<br />$ 46,886,728 $ 49,686,700
<br />Business -Type Activities Total
<br />2008 2007 2008
<br />$ $ $ 2,809,059
<br />13,054 13,054 2,775,579
<br />4,162,757
<br />443,209
<br />1,311,603
<br />218,523 132,135 433,573
<br />351,186
<br />31,668,743 31,526,631 66,500,082
<br />$ 31,900,320 $ 31,671,820 $ 78,787,048
<br />2007
<br />$ 2,809,059
<br />5,751,975
<br />4,376,812
<br />491,145
<br />1,157,749
<br />378,787
<br />391,712
<br />66,001,281
<br />$ 81,358,520
<br />Additional information on the City's capital assets can be found in the notes to the financial statements on
<br />pages 34 -57.
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