Laserfiche WebLink
City of Lino Lakes <br />Management Report, Page 36 <br />The City of Lino Lakes may receive payment of net income after the accumulated <br />retained earnings deficit is eliminated. The retained earnings for the gas utilities <br />have been as follows: <br />Retained Earnings (Deficit) <br />City of City of <br />Circle Pines Lino Lakes <br />December 31, Amount Amount Total <br />1978 $ 85,581 $(108,627) $(23,046) <br />1979 124,685 (95,997) 28,688 <br />1980 147,248 (92,392) 54,856 <br />1981 153,463 (83,716) 69,747 <br />1982 224,418 (64,129) 160,289 <br />The above two schedules indicate that the Circle Pines gas utility operation has <br />been more profitable than the Lino Lakes operation. Additionally, the Circle Pines gas <br />utility has a positive retained earnings balance in excess of $224,000 while the Lino <br />Lakes retained earnings account is in a deficit position. <br />The City of Lino Lakes has certain rights with regard to the gas utility franchise <br />agreement. One of those rights is a purchase option after twenty -five years. This <br />option will be available within the next several years. <br />The City has raised certain questions with regard to the allocation of operating <br />results and other questions regarding their rights under the agreement. Interpretation <br />of legal rights under the agreement should be directed to the City attorney. We are <br />available to assist in gathering further data upon request. <br />Internal Accounting Controls <br />As part of our examination, we made a study and evaluation of the system of internal <br />accounting control of the City of Lino Lakes to the extent we considered necessary to <br />evaluate the system, as required by generally accepted auditing standards. The purpose <br />of our study and evaluation was to determine the nature, timing and extent of the <br />