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<br />400 Robert Street North, Suite 1600, St. Paul, MN, 55101   651.426.7000 www.redpathcpas.com  <br />COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE <br /> <br /> <br />To the Honorable Mayor and <br />Members of the City Council <br />City of Lino Lakes, Minnesota <br /> <br /> <br />We have audited the financial statements of the governmental activities, the business-type <br />activities, each major fund, and the aggregate remaining fund information of the City of Lino <br />Lakes, Minnesota (the City) for the year ended December 31, 2023. Professional standards <br />require that we provide you with information about our responsibilities under generally accepted <br />auditing standards and Government Auditing Standards, as well as certain information related to <br />the planned scope and timing of our audit. We have communicated such information in our letter <br />to you dated January 22, 2024. Professional standards also require that we communicate to you <br />the following information related to our audit. <br /> <br />Significant Audit Matters <br /> <br />Qualitative Aspects of Accounting Practices <br /> <br />Management is responsible for the selection and use of appropriate accounting policies. The <br />significant accounting policies used by the City are described in Note 1 to the financial <br />statements. Effective January 1, 2023, the City implemented Governmental Accounting <br />Standards Board Statement No. 96, Subscription-Based Information Technology Arrangements, <br />but it had no effect on the financial statements or note disclosures. The application of existing <br />policies was not changed in 2023. We noted no transactions entered into by the City during the <br />year for which there is a lack of authoritative guidance or consensus. All significant transactions <br />have been recognized in the financial statements in the proper period. <br /> <br />Accounting estimates are an integral part of the financial statements prepared by management <br />and are based on management’s knowledge and experience about past and current events and <br />assumptions about future events. Certain accounting estimates are particularly sensitive because <br />of their significance to the financial statements and because of the possibility that future events <br />affecting them may differ significantly from those expected. <br /> <br />The most sensitive estimates affecting the City’s financial statements are the estimated present <br />value of the lease receivable, and estimates used to calculate the net pension liability, the pension <br />related deferred outflows and inflows of resources, and pension expense. These estimates are <br />based on the City’s estimated incremental borrowing rate at lease inception and actuarial studies. <br />We evaluated the key factors and assumptions used to develop the estimates in determining that <br />they are reasonable in relation to the financial statements taken as a whole. <br /> <br />166