Financial Analysis & Management Considerations Report 12/31/1997

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City of Lino Lakes, Minnesota Management Report Capital Project Funds 2) Sanitary sewer and water services to be provided by Shoreview to single family residential dwelling (II). 3) Lino Lakes responsible for constructing facilities in the area in accordance with plans and specifications which have been approved by the Shoreview engineer (IIIA). 4) All direct or indirect connections must be approved by the Shoreview engineer (IIIA5). 5) Prior to connection, connection charges, as computed by the Shoreview engineer, shall be paid to Shoreview, including area charges and front footage charges (IIIB) 6) Lino Lakes is responsible for installing and reading meters to accommodate Shoreview's billing for user charges (IIIC). 7) Violation of terms entitled Shoreview to $75 per day damages (IIIF). 8) Amendment No. 1 dated May 4, 1987 eliminated the sewer front foot charge for a specified area in which Lino Lakes was to construct sewer services. 9) Amendment No. 2 dated June 19, 1989, reduced certain charges based on a sunset provision whereby it was anticipated that Lino Lakes would construct watermain facilities within three years to provide water to the defined area. Although user charges have been paid from the inception of the Agreement, connection charge payments had not been made. Since April 24, 1997 our office has expanded audit and other procedures with the following objectives: 1. To obtain additional audit evidential support to conclude that the 1997 financial statements are free of material misstatements, and 2. To gain an understanding of the events which resulted in contractual non - compliance in order to communicate our results to the City Council and to advise the City regarding improved controls.