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HomeMy WebLinkAbout06/24/1996 Council Minutes• • SPECIAL COUNCIL MEETING JUNE 24, 1996 CITY OF LINO LAKES MINUTES DATE : June 24, 1996 TIME STARTED : 5:30 p.m. TIME ENDED : 6:17 p.m. MEMBERS PRESENT : Kuether, Neal, Landers, Lyden MEMBERS ABSENT : Bergeson arrived at 5:55 p.m. Staff members present; City Administrator, Randy Schumacher and Clerk -Treasurer, Marilyn Anderson. Mr. Fred Espe of Voto, Tautges, Redpath was also present. The purpose of the meeting was to review the 1995 City audit. Mr. Espe explained that for 1995 the City will receive an unqualified audit. This means that the City is eligible for and can apply for the Award of Financial Reporting Achievement. Mr. Espe presented the highlights of the audit: He noted that the General Fund balance is $2,086,000. This balance has been designated. The inventory of fixed assets has been completed and he recommended that the fixed assets account be kept current. Investment earnings increased by a substantial amount which indicates good planning for investment earnings. The schedule of tax collection for the previous four (4) years indicates that the City has had a very good collection rate. The schedule of the Tax Increment Finance (TIF) receivables is also doing very well. Review of the schedule of Special Assessment Receivables indicates that the delinquent balance is very low. There is a deferred balance and these assessments will be collectable in future years. There is an assessment on a City owned parcel. If the City is not going to pay this assessment, it should be canceled and written off the audit. The amount of expenditures during 1995 increased but this expected in a growing city. See page 11 of the audit. • Provided a summary of revenue resources. See page 12 of the audit. PAGE 1 SPECIAL COUNCIL MEETING JUNE 24, 1996 Noted that the General Fund balance increased by $215,000. Revenues exceeded expenditures and expenditures were under budget. This is due partially to the City deciding not to hire personnel as planned. In addition, there were some Public Works projects that were not completed. The need for a one-half year cash balance was explained. The City now has adequate reserve to meet cash flow. However, the City has not met the employee contingency reserve of $254,000 as outlined in Resolution No. 03 - 91. Reduction of intergovernmental dollars was outlined. See page 17 of the audit. Noted the recreation program fund had increased. However, there is no formal budget for the recreation fund and a recommendation was made to formally adopt a recreation program budget. Reviewed the schedule of inflow and outflow of the debt funds. See page 20 of the audit. Reviewed all the bond issues. See page 22 of the audit. Reviewed all the Capital Project Funds. See page 23 of the audit. Noted a decrease in construction funds. Reviewed the Dedicated Park Fund. Provided an analysis of the Area and Unit Fund adopted in 1988. The current fund balance is over $5,000,000. Council Member Lyden asked if the fund balance in the Area and Unit Fund was rather large. Mr. Espe felt that it was not excessive. If improvements budgeted for 1996 are completed, the fund balance should be reduced by one-half. In addition, some of the Area and Unit Funds are dedicated for the repayment of three (3) debt funds. Reviewed the Construction Fund noting that the deficit in this fund will be eliminated by the reimbursement from MnDOT and Anoka County. Reviewed the Water and Sewer Fund. Both funds saw an increase in fund balance and the City is starting to reach the "break even" point. The City should be building reserves for the expansion and improvement to the systems. The single largest expense for the Sewer Fund is the MCES charges which is expected to be 9% in 1996. Gas Utility - The City of Circle Pines provides gas service to portions of Lino Lakes through a franchise agreement. Sales of gas to Lino Lakes shows an accumulated earning of $185,000. The City was commended for its successful efforts to receive supplemental revenues. PAGE 2 • • SPECIAL COUNCIL MEETING JUNE 24, 1996 A federal compliance report was prepared for the City. This report is required when a City receives $25,000 or more in federal funds. In 1995 the City received $72,452 of federal funds. The federal compliance audit was prepared as required and the audit was summarized as follows: Although the Lino Lakes Police Department has a drug testing program and written policies and procedures for a drug-free workplace, this program and its procedures had not been formally adopted by the City Council and were not in effect until January 1, 1996. The City has now adopted the policy and programs. Summary of Recommendations for 1996: Determine a financing source or delete the City property special assessment receivable from the City financial records. Continue to monitor the assessment collection rate and provide supplemental financing if assessment collections are not adequate to meet bonded debt payments. Continue to request improved special assessment collection data from Anoka County. Continue effort to maintain the fixed asset system. Consider budgeting activity in the Recreation Program Fund. Continue to monitor actual versus projected area and unit assessment collections to assure the debt payment requirements will be met in the Area and Unit Charge Fund. Continue to maintain detailed records of amounts due from developers and assure that adequate deposits are received prior to incurring expenses on a developer's behalf. Council Member Kuether asked how the City can improve its bond rating. Mr. Espe explained that Moody's looks favorably at the Certificate of Achievement. Mr. Schumacher commented that they also compare current audits to previous audits. Mr. Espe noted that this audit has not uncovered any serious concerns. However, as the City grows, there will be additional needs. He suggested increasing the General Fund Balance to accommodate the additional needs. He also suggested monitoring the Area and Unit Fund balance to be sure that it will meet all future needs. PAGE 3 SPECIAL COUNCIL MEETING JUNE 24, 1996 Council Member Kuether asked if there is a graph that could be used to determine how much reserve should be held to cover the debt. Mr. Espe said that every city is different and has different needs. Lino Lakes should determine its own needs and how much reserve is needed to support those needs. The amount should not be based on what some other city is doing. The meeting was adjourned at 6:17 p.m. These minutes were considered, corrected and approved at a regular Council meeting held on July 13, 1998. (.4d -e -A -14-""J Marilyn G. Anderson, Clerk -Treasurer PAGE 4