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VOTO, TAUTGES, REDPATH & CO., LTD. <br />CERTIFIED PUBLIC ACCOUNTANTS <br />V1:K. <br />Birch Lake Professional Building • 1310 E. Hwy. 96 • White Bear Lake, MN 55110 • Phone 426 -3263 <br />To the Honorable Mayor and <br />Members of the City Council <br />City of Lino Lakes, Minnesota <br />ROBERT J. VOTO, CPA <br />ROBERT G. TAUTGES, CPA <br />JAMES S. REDPATH, CPA <br />The Annual Financial Report of the City is complete and has been transmitted to <br />the City Council. In conjunction with our examination of the financial statements, <br />we have prepared this report to assist the City in the analysis of: <br />• Financial results. <br />• Financial trends. <br />• Internal control systems (and weaknesses, if any). <br />• The fund balances of the various funds of the City. <br />• Compliance procedures related to Federal and State regulations <br />and /or statutes as they directly relate to financial matters. <br />• Actual and potential effects of State legislation regarding <br />the financing of City government. <br />Based on the above areas, we offer recommendations for improvement as appropriate <br />with a summary of such recommendations on the last page of this report. <br />Additionally, we are available to discuss the contents of this report with the City <br />Council upon request. <br />STATE LEGISLATION - EFFECTS ON FINANCING LOCAL GOVERNMENT <br />The 1987 State legislature has reviewed proposed changes to the property tax <br />system and the method of calculating State aids for local governments. The proposed <br />legislation would have significant effects on how cities receive revenue to carry out <br />basic services. The most significant proposals (related to property taxes) have been <br />tabled for consideration at a future session. It appears that the 1987 legislation <br />will not reduce 1987 local government aid. The law will, however, freeze 1988 local <br />government aid at the 1987 level. Additionally, it appears as though extremely <br />restrictive legislation has been approved affecting the overall levy increase <br />(excluding debt) to 3% of the 1987 revenue base (levies and local government aid). <br />We recommend that the City review the provisions (and exceptions) of this legislation <br />to prepare for the 1988 levy /budget process. <br />MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • PRIVATE COMPANIES PRACTICE SECTION <br />MINNESOTA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS <br />GOVERNMENT FINANCE OFFICERS ASSOCIATION • MINNESOTA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS <br />