HomeMy WebLinkAbout06/27/1994 Council Minutes242
COUNCIL WORK SESSION
CITY OF LINO LAKES
COUNCIL MINUTES
JUNE 27, 1994
DATE : June 27.1994
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IME..ST.ARTE..D 6:0.0 PM,
TIME ENDED 6:35.. P.N.
MEMBERS:: PRESENT:: Neal, Kuether, Elliot
MEMBERS ABSENT Bergeson, Reinert
Staff members present: City Administrator, Randy Schumacher,
City Auditor, Fred Espe and Clerk -Treasurer Marilyn Anderson.
The purpose of the special meeting was to review the 1993 Annual
Audit.
Mr. Espe noted that the 1993 Audit consists of three (3)
documents. They are the Annual Financial Report for Year Ending
December 31, 1993; the Management Report and Recommendations and
the Federal Financial Assistance for Year Ending December 31,
1993. Mr. Espe used the Management Report document to present
the review of the Audit.
Page two (2) of the Management Report consists of Account Balance
Analysis of the Combined Financial Statements. This report
indicates that the capital accounts have increased 2.7 million
dollars. Mr. Espe noted that the interest on investments
accounts for a large portion of the increase and this means that
the City is investing its reserves wisely.
Page four (4), Property Taxes Receivable, shows that the
collection rate in 1993 was 102%. This includes both current and
delinquent taxes. The City has experienced a solid tax
collection rate over the past five (5) years.
Acting Mayor Neal asked if this means that sewer and water
collection is also good. Mr. Espe indicated that this includes
the General Fund and the Certificates of Indebtedness only.
Page six (6), Special Assessment Summary, indicates that the rate
of collection has increased. Timely collection of special
assessments is required to assure timely availability of cash to
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meet the scheduled debt payments.
Page eight (8), is a breakdown of funding sources for 1993.
Property taxes as a percent of total revenue has consistently
been approximately 45%. As income from state aids has dropped,
the City has made up the difference from income other than taxes.
Mr. Schumacher explained that it is important to note that the
City has held property taxes at a constant level and not allowed
any "peaks or valleys" to occur.
Council Member Kuether noted that income from licenses and
permits increased considerably during 1993. Mr. Espe explained
that the increase in the number of building permits accounted for
a large portion of the increase.
Page 11, Fund Balance, indicates that $350,363.00 was added to
the fund balance in 1993. Mr. Espe presented a detailed analysis
of the increase. The total General Fund balance is now
$1,756,659.00.
Page 12, shows how the City's cash flow reserve requirement is
calculated. He also noted that the City adopted a reserve policy
that addresses three (3) areas: 1) cash flow requirements; 2)
contingent employee benefits, and 3) general contingencies. The
cash flow requirements and the general contingencies have been
met, however, the contingency for employee benefits is short by
about $172,000.00. Mr. Espe did not feel that this is critical
since it is highly unlikely that all employees would retire or
quit work and demand all their accrued vacation and sick leave
benefits.
Mr. Schumacher said he felt that this is the time to contact
Moody's and try to get them to raise the City's bond rating.
Page 13, is a discussion regarding the reasons for reserves.
Council Member Kuether asked if the City had to provide the
additional $172,000.00 for employee benefit reserves. Mr. Espe
said no, however, this is a target that should be met at some
time.
Page 19, Capital Projects Funds is a schedule of all fund
balances. Mr. Espe noted that the Area and Unit Charge Fund is
very positive. He felt that it is important to keep this Fund
healthy since it is used to pay off bond issues instead of
soliciting refinancing at possible higher interest rates.
Page 21, explains the purpose of the Area and Unit Charge Fund.
Page 23, shows a schedule of actual sewer and water connections
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COUNCIL WORK SESSION JUNE 27, 1994
verses budgeted by bond issue. This is a very positive report.
Page 31, is a discussion of the Utility Fund. Sewer and Water
accounting is now separated so that each utility area can be
monitored. This allows the City Council to determine if rate
increases are necessary.
Page 33, is a discussion of how the Metropolitan Waste Control
Commission fees impact the overall Utility Fund.
Page 37, addresses the current gas franchise with the City of
Circle Pines. The City currently receives 7% of the sales except
for interruptible sales which are based on 3%.
Page 39, describes the Federal Single Audit which is a
requirement of the City to obtain federal compliance if the City
receives over $25,000.00 in federal funds in a year. During
1993, the City received $68,952.00. Council Member Kuether asked
what the cost of the Federal Single Audit was. This information
was not available. Mr. Espe did note that the threshold of
$25,000.00 may be moved up to $100,000.00. This would mean that
no audit is necessary unless the City receives more than
$100,000.00 per year in federal funds.
Mr. Schumacher explained that the audit is set out in a manner
that shows that the City is becoming financially stronger each
year and that there are no "roller coaster" ups and downs. It
does show that the Utility Fund is weak but it also shows that
the City is addressing the problem.
Appendix A is a list of Legislative actions that may impact the
City. The most notable is that cities are now required to pay to
the county auditor the -administrative expenses incurred by the
county auditor for administering the collection of special
assessments. This may change the manner in which this City
handles assessments each year. Mrs. Anderson was asked to check
with the Anoka County Auditor to determine how this will affect
Lino Lakes.
The Council thanked Mr. Espe for his presentation.
The meeting adjourned at 6:35 P.M.
These minutes were considered, corrected and approved at the
regular City Council meeting held on July 11, 1994.
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COUNCIL WORK SESSION JUNE 27, 1994
Marily G. Anderson,
Vernon F. Reinert,
Clerk -Treasurer Mayor
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