Comprehensive Annual Financial Report 12/31/1996

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DEBT ADMINISTRATION At year end, the City had a number of debt issues outstanding. These issues included $1,378,000 of general obligation bonds, $7,675,000 of general improvement bonds with special assessments pledged and $4,265,000 of revenue bonds. During 1996, the City issued $225,000 of equipment certificates, the proceeds of which were used to purchase equipment. The City issued $4,685,000 of general improvement bonds in 1996 to finance infrastructure for three residential developments, a new school, and a new lift station. The City issued $3,320,000 in revenue bonds to finance the construction of a water tower, pumphouse, and water main extensions. The 1994 Temporary General Obligation bonds and the contract for deed on the purchase of land were called one year early and paid for with cash on hand. RISK MANAGEMENT .,. The City's workers' compensation insurance and general property and liability coverage is provided through the League of Minnesota Cities Insurance Trust (LMCIT) The workers' compensation program is a joint self - insurance plan designed to hold down the costs and assure coverage is available. Each city deposits a premium at the beginning of the insurance year determined by calculating estimated payroll and applying experience modification ratios. An audit is performed at the end of the insurance year, which may produce a refund or an adjustment due. LMCIT's reserves and rates are reviewed annually by an actuary to assure that the program remains financially strong. INDEPENDENT AUDIT Minnesota State law requires that cities over 2,500 population submit annual financial statements attested by a certified public accountant or the State Auditor to the State Auditor by June 30th of the following year. This requirement has been met with the auditors' report of Tautges, Redpath, and Co. LTD included in this report. CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING _ The Government Finance Officers Association of the United State and Canada (GFOA) awards the Certificate of Achievement for excellence in financial reporting to cities that meet certain criteria. A governmental unit must publish an easily readable and efficiently organized comprehensive annual financial report, the contents of which conform to program requirements. The City of Lino Lakes received its first award for the year ended December 31, 1995. The City is issuing the 1996 report to GFOA for consideration of the Certificate of -- Achievement for Excellence in Financial Reporting. We believe our current report conforms to the program requirements. 15