Comprehensive Annual Financial Report 12/31/2003

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LarsonAlleri" CPAs, Consultants & Advisors www.larsonallen.com INDEPENDENT AUDITORS' REPORT Honorable Mayor and Members of the City Council City of Lino Lakes, Minnesota We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Lino Lakes, Minnesota as of and for the year ended December 31, 2003, which collectively comprise the City's basic financial statements as listed in the table of contents. These basic financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these basic financial statements based on our audit. We conducted our audit in accordance with U.S. generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of - the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes ▪ assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Lino Lakes, Minnesota as of December 31, 2003, and the respective changes in financial position and cash flows, where applicable, thereof and the for the year then ended in conformity with U.S. generally accepted accounting principles. As described in the notes to the basic financial statements, the City adopted the provisions of Governmental ▪ Accounting Standards Board Statement No. 34, Basic Financial Statements — and Management's Discussion and Analysis — for State and Local Governments, as of December 31, 2003. This results in a change to the format and content of the basic financial statements. In accordance with Government Auditing Standards, we have also issued a report dated March 25, 2004 on our consideration of the City of Lino Lakes Minnesota's internal control over financial reporting and our tests of its - compliance with certain provisions of laws, regulations, contracts, and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. The management's discussion and analysis and budgetary comparison information as listed in the table of contents are not a required part of the basic financial statements but are supplemental information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquires of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. 8 Larson, Allen, Weishair & Co., LLP I An Independent Member of Baker Tilly International