HomeMy WebLinkAboutOther Auditor Reports 12/31/2002CITY OF LINO LAKES, MINNESOTA
OTHER AUDITOR REPORTS
FOR THE YEAR ENDED DECEMBER 31, 2002
CITY OF LINO LAKES, MINNESOTA
TABLE OF CONTENTS
DECEMBER 31, 2002
law
Page
Independent Auditor's Report on Compliance and on
Internal Control over Financial Reporting Based on an Audit of
— Financial Statements Performed in Accordance with
Government Auditing Standards 1 -2
— Independent Auditor's Report on Legal Compliance 3
Other Required Auditor Communications 4 -7
—
Management Letter 8 -15
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INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND
ON INTERNAL CONTROL OVER FINANCIAL REPORTING
BASED ON AN AUDT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
We have audited the general purpose financial statements of the City of Lino Lakoo, Minnesota as of
and for the year ended December 31, 2002 and have issued our report thereon dated March 20, 2003.
We conducted our audit in accordance with U.S. generally accepted auditing standards and the
standards applicable to financial audits contained in Government Auditing Sta7daxds, issued by the
Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether the City of Lino Lakes, Minnesota's financial
statements are free of material misstatement, we performed tests of its compliance with certain
provisions of laws, FegU|8tinn3, cVnt[aCtS, and grantS, noncompliance with which could have a direct and
Ol@tehal effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit, and @CCo(diOg|y, we do not express
such an opinion. The results of our tests disclosed no instances of noncompliance that are required to
be reported under GovernmentAuditing Standards. However, we noted a certain immateriat instance of
noncompliance, which has been reported to management of the City of Lino Lakes in a separate letter
dated March 20, 2003.
Internal Control over Financial Reporting
In planning and performing our audit, we considered the City of Lino Lakes, Minnesota's internal control
Over financial reporting in order to determine our auditing procedures for the purpose of expressing our
opinion on the financial statements and not to provide assurance on the internal control structure over
financial reporting. Our consideration of the internal control over financial reporting would not
necessarily disclose all matters in the internal control over financial reporting that might be material
weaknesses. A material weakness is a condition in which the design or operation of one or more of the
internal control components does not reduce to a relatively low level the risk that misstatements in
amounts that would be material in relation to the financial statements being audited may occur and not
be detected within a timely period by employees in the normal course of performing their assigned
functions. We noted no matters involving the internal control over financial reporting and its operation
that we consider to be material weaknesses. Hovvever, we noted other matters involving the internal
control over financial naporting, which we have reported to management in a separate letter dated
March 20, 2003.
(1)
Larson, Allen, Weishair & Go., LL
This report is intended solely for the use of the City of Lino Lakes, Minnesota, the Office of the State
Auditor, and other state and federal awarding agencies, and is not intended to be and should not be
used by anyone other than these specified parties.
Austin, Minnesota
March 20, 2003
(2)
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INDEPENDENT AUDITOR'S REPORT ON LEGAL COMPLIANCE
To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
We have audited the general purpose financial statements of the City of Lino Lakes, Minnesota as of
and for the year ended December 31, 2002, and have issued our report thereon dated March 20, 2003.
We conducted our audit in accordance with generally accepted auditing standards and the provisions of
the Minnesota Legal Compliance Audit Guide for Local Government, promulgated by the Legal
Compliance Task Force pursuant to Minn. Stat. §6.65. Accordingly, the audit included such tests of the
accounting records and such other auditing procedures as we considered necessary in the
circumstances.
The Minnesota Legal Compliance Audit Guide for Local Government covers five main categories of
compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public
indebtedness, and claims and disbursements. Our study included all of the listed categories.
The results of our tests indicate that for the items tested the City of Lino Lakes, Minnesota complied with
the material terms and conditions of applicable legal provisions, except as noted below.
Finding:
Minnesota Statute 471.345 subdivision 3 requires that for contracts issued over $50,000, the City
retain all the bids received on file. For one of the contract items selected for testing, the bids
received were not retained on file.
Response:
The City will retain all bids received on file.
This report is intended solely for the use of the City of Lino Lakes, Minnesota, the Office of the State
Auditor, and other state agencies, and is not intended to be and should not be used by anyone other
than these specified parties.
Austin, Minnesota
March 20, 2003
(3)
LARSON, ALLEN, WEISHAIR & CO., LLP
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OTHER REQUIRED AUDITOR COMMUNICATIONS
March 28, 2002
To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
Dear Committee Members:
We have audited the general purpose financial statements of the City of Lino Lakes for the year ended
December 31, 2002, and have issued our report thereon dated March 20, 2003. Professional standards
require that we provide you with the following information related to our audit.
Our Responsibility Under U.S. Generally Accepted Auditing Standards
As stated in our engagement letter dated December 5, 2002, our responsibility, as described by
professional standards, is to plan and perform our audit to obtain reasonable, but not absolute,
assurance about whether the general purpose financial statements are free of material misstatement.
Because of the concept of reasonable assurance and because we did not perform a detailed
examination of all transactions, there is a risk that material errors, irregularities, or illegal acts, including
fraud and defalcations, may exist and not be detected by us.
As part of our audit, we considered the internal control structure of the City of Lino Lakes. Such
considerations were solely for the purpose of determining our audit procedures and not to provide any
assurance concerning such internal control structure.
Other Information in Documents Containing Audited Financial Statements
Our responsibility for other information in documents containing the City of Lino Lakes financial
statements, including the supplementary information, does not extend beyond the information identified
in our report on the financial statements, and we have no professional responsibility to perform audit
procedures on such other information.
(4)
Larson, Allen, Weishair & Co., LI
Significant Accounting Policies
Management has the responsibility for selection and use of appropriate accounting policies. In
accordance with the terms of our engagement letter, we will advise management about the
appropriateness of accounting policies and their application. The significant accounting policies used
by the City of Lino Lakes are described in Note 1 to the general purpose financial statements. No new
accounting policies were adopted and the application of existing policies was not changed during 2002.
We noted no transactions entered into by the City during the year that were both significant and
unusual, and of which, under professional standards, we are required to inform you, or transactions for
which there is a lack of authoritative guidance or consensus.
Management Judgments and Accounting Estimates
Accounting estimates are an integral part of the general purpose financial statements prepared by
management and are based on management's current judgments. Certain accounting estimates are
particularly sensitive because of their significance to the financial statements and because of the
possibility that future events affecting them may differ significantly from management's current
judgments. The most sensitive estimates affecting the financial statements were:
Annual depreciation is provided in the proprietary funds using rates sufficient to fully
depreciate the related fixed assets over their useful lives based on past experiences.
The year end valuation of investments at fair value.
The City records allowances for uncollectible receivables based upon an analysis of the
collectibility of individual accounts and notes, taking into account delinquencies and payment
histories.
The City has recognized sick leave payable in the general long -term debt account
group. The amount recorded includes amounts earned through December 31, 2002
by employees eligible for retirement at that date. In addition, an amount is recorded
for those individuals not eligible for retirement at December 31, 2002, but for whom
pay -out of the amount earned to that date is reasonably expected. This estimate is
derived by an analysis of the pay -out history and current and anticipated future
employment conditions.
Significant Audit Adjustments
For purposes of this letter, professional standards define an audit adjustment as a proposed correction
of the general purpose financial statements that, in our judgment, may not have been detected except
through our auditing procedures. An audit adjustment may or may not indicate matters that could have
a significant effect on the City's financial reporting process (that is, cause future financial statements to
be materially misstated). In our judgment, none of the adjustments we proposed, whether recorded or
unrecorded by the City, either individually or in the aggregate, indicate matters that could have a
significant effect on the City's financial reporting process.
In addition, the attached schedule summarizes misstatements of the financial statements. Management
has determined that their effects are immaterial, both individually and in the aggregate to the financial
statements taken as a whole.
(5)
Disagreements with Management
—
For purposes of this letter, professional standards define a disagreement with management as a matter,
whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing
matter that could be significant to the general purpose financial statements or the auditor's report. We
are pleased to report that no such disagreements arose during the course of our audit.
— Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
— accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation
involves application of an accounting principle to the governmental unit's general purpose financial
statements or a determination of the type of auditor's opinion that may be expressed on those
statements, our professional standards require the consulting accountant to check with us to determine
that the consultant has all the relevant facts. To our knowledge, there were no such consultations with
other accountants.
—
purpose.
Sincerely,
Issues Discussed Prior to Retention of Independent Auditors
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management prior to retention as the City's auditors. However, these discussions
occurred in the normal course of our professional relationship and our responses were not a condition
to our retention.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing our audit.
This information is intended solely for the use of the Finance Committee, Board of Directors, and
management of the City of Lino Lakes and is not intended to be, and should not be used for any other
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Cumulative Net Audit Differences
$ 2,336,238
$ 29,394,747
F/S Caption Totals
Net audit differences as % of F/S captions
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To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
In planning our audit of the General purpose financial statements of the City of Lino Lakes as of and for
the year ended December 31, 2002, we considered its internal control structure in order to determine
our auditing procedures for the purpose of expressing our opinion on the general purpose financial
statements and not to provide assurance on the internal control structure.
During the course of our audit, several items came to our attention that we feel could be addressed by
the City of Lino Lakes to more efficiently run the City's operations or improve its internal controls. We
herein submit the following suggestions to the City of Lino Lakes for their consideration.
Auditor Comments:
Capital Project Deficits
The financial statements for the capital project funds are presented in Statements 13 and 14 of the
2002 Annual Financial Report. As of December 31, 2002 many of the capital project funds have deficit
fund balances. These deficits total $5,587,948. The fund balances at December 31, 2002 and 2001 for
these funds are as follows:
Fund
Dedicated Parks
MSA Construction
1997 Construction
1998 Construction
- Town Center Project
Lake /Apollo Dr Improvement Market Place
Tax Increment Administrative
Tax Increment # 1 -5
Tax Increment # 1 -7
Tax Increment # 1 -8
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Fund Balance (Deficit)
December 31,
2001 2002
$ (397,460)
(438,615)
(343,018)
(2,661,374)
(29,501)
(360,084)
(17,726)
(138,243)
(18,861)
$ (740,518)
(364,332)
(698,540)
(2,662,115)
(1,081,320)
(26,695)
(14,428)
Increase
(Decrease)
$ (343,058)
74,283
(355,522)
(741)
(1,051,819)
360,084
17,726
111,548
4,433
$ (4,404,882) $ (5,587,948) $ (1,183,066)
The City needs to review each of these funds to determine how the deficits will be eliminated. In some
cases, transfers from other funds may be needed to eliminate the deficits. These transfers should be
made as soon as the amount can be determined so as not to overstate the fund balances in the
transferring funds. We also recommend that the City close funds once the related projects are
complete. The following summary of the Town Center project provides a good example to follow for
reviewing the capital projects deficits.
(8)
Larson, Allen, Weishair & Co., LL
Town Center Construction Fund
Over the past five years, the City has purchased and improved land in the "Village Area" of Lino Lakes
for the purpose of reselling the property for development. Future land sales are intended to cover the
purchase of these parcels. In addition, the proceeds from the sale of the former police station land and
adjacent Iots will also go toward covering these costs after repaying an iOtarfund loan made by the
Water and Sewer Fund in 1998.
The following is a summary of project costs and related revenues prepared by management. This
summary reflects the net costs and sales proceeds needed for the City to recover these costs.
Expenditures:
Land Acquisition/Planning & Design (1):
Interest Expense
Village Infrastructure (V |ageDr. & TC Pkwy)
Total-A
$ 2,001.704
224,548
565,242
$ 2,881,494
Repayment of lnterfund Loan - Enterprise Funds $ 130,634
Grand Total-B $ 3.012.128
Revenues:
Proceeds from TIF 1-1 & 1-2 $ 547,478
Net Land Sales (2) 158,257
Assessments for Clinic & Bank (3) 71,826
Total 777,561
Total to Break Even A
Total to Break Even B
Estimated cost per acre based nn11.7Oocrun+A(4)
Estimated cost per acre based on 11.70 acres-B (4)
Estimated cost per square foot (509,652 sq ft) - A
Estimated cost per square foot (5O9.G52oq ft) 'B
(1) Includes purchase from Anoka County (Regional Park Land).
(2) Represents profit from land sales to bank & clinic. Land Acquisition figure includes
remaining dollars received.
(3) Assessments levied against bank & clinic included Surface Water Management Fees.
These have been removed from this figure.
(4) Based on total available area.
$ 2,103,933
$ 2.234.567
$ 179,823
$ 190,989
$ 4.13
$ 4.38
We recommend that the City continue to closely monitor the status of the Town Center Fund and
identify other revenue sources if and when it is determined they are needed.
(9)
SAC Revolving
— The SAC Revolving Fund was established in 1990 to account for a refund from the MCES (formerly
MWCC) of past SAC charges which were paid by residents that had not hooked up to the sewer
system.
A summary of financial activity of this fund is as follows:
W m
Prior
Years 2002 Total
Revenue
SAC refund $ 368,816 $ - $ 368,816
—
Investment earnings 238,589 8,037 246,626
Total revenue 607,405 8,037 615,442
Expenditures:
Refunds 243,353 5,223 248,576
Fund balance - December 31, 2002
366,866
The City is allowing current homeowners to request a refund with 4% interest. If refunds and claims are
— not submitted, the City will pay the full SAC charge from this fund at the time of hook -up. This policy will
likely require a supplemental future revenue source as the current MCES SAC charges times the
potential hookups exceeds the available balance.
If the MCES SAC fees continue to increase at a rate that is faster than the investment earnings rate,
other revenue sources will be needed in the future to fund the actual connections when they occur.
Area and Unit Charge Fund
On January 11, 1988, the City Council approved Resolution 1 -88, which established the Area and Unit
Charge Fund for the City. The purpose of this fund is to collect various area and unit charges to be
used to meet debt payments. Before October 1 of each year, the City estimates the required transfer
needed to meet debt payments for the subsequent year. In December, these estimated amounts are
— transferred to the various debt funds. We recommend that the City continue to closely monitor actual
versus projected area and unit assessment collections to assure that debt payment requirements will
be met.
Designations of balances required for debt service is necessary to define discretionary construction
balances available to the City. The financing plan for the following bond issues have pledged area and
_ unit charges for the repayment of debt service:
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• Improvement Refunding Bonds of 1999A
• Improvement Bonds of 1996A
• Water Revenue Bonds of 1999B
• Water Revenue Bonds of 1996B
The Improvement Refunding Bonds of 1999A and the Improvement Bonds 1996A have future debt
service requirements totaling $1,536,326 and $2,223,200 (principal and interest).
(10)
During 2002, a transfer of $391,681 was made to the Improvement Refunding Bonds of 1999A debt
service fund. A transfer was not made to the Improvement Bond of 1996A debt service fund, which
ends the year with a deficit fund balance of $521,668.
The Water Revenue Bonds of 1999B and 1996B have future debt service requirements totaling
$684,726 and $3,481,099 (principal and interest). The City annually transfers amounts from the Area
and Unit Charge Fund to the Water Fund sufficient to help cover the debt services of these bonds.
During 2002, a transfer of $304,075 was made to the Water Fund.
It is the City's intention to repay the Water Revenue Bonds of 1999B and 1996B with revenues of the
Water Fund. If revenues are not sufficient to meet the debt requirements, funds will be transferred from
the Area and Unit Charge Fund.
DEBT SERVICE FUNDS
The combining financial statements for the debt service funds are presented in Statements 11 and 12
of the 2002 Annual Financial Report. Debt service funds are a type of governmental fund used to
account for the accumulation of resources for the payment of principal and interest on general
obligation debt (other than enterprise fund debt). Debt service funds may have one or a combination of
revenue sources pledged to retire debt including property taxes, tax increments, special assessments
and area and unit charges.
The diverse nature of the type of debt included in the same fund type requires careful analysis to
determine the adequacy of the fund balance and projected fund balance. The following schedule
extracts information from Exhibits 1, 2 and 3 of the 2002 Annual Financial Report to assist in this
analysis. The following schedule compares outstanding debt with assets pledged for debt retirement.
This comparison provides a means to judge (at least on a preliminary basis) the financial position of
each individual debt service fund.
December 31, 2002 Remaining Scheduled Final
Fund Deferred Debt Service Property Maturity
Fund Description Balance Revenue Total Scheduled Taxes Date
General Debt:
Certificates of Indebtedness $ 87,862 $ 4,095 $ 91,957 $ 519,417 $ 546,018 12/31/05
Lease Revenue Bonds of 1998A 892,344 3,560 895,904 7,577,183 6,867,851 02/01/10
99C Public Project Revenue Bonds 323,775 1,354 325,129 916,849 615,181 02/01/10
$ 1,303,981 $ 9,009 $ 1,312,990 $ 9,013,449 $ 8,029,050
Special Assessment Debt:
Improvement Bonds of 1996A $ (521,668) $ 33,391 $ (488,277) $ 2,223,200 $ 02/01/07
Improvement Bonds of 1998A (91,275) 259,536 168,261 4,862,125 02/01/15
Improvement Bonds of 1998B 320,856 370,414 691,270 2,361,999 1,855,655 02/01/15
Refunding Imp. Bonds of 1999A 108,610 23,343 131,953 1,536,326 1,227,856 02/01/06
Improvement Bonds of 2002A 20,062 20,062 751,469 55,424
Improvement Bonds of 20028 65,350 1,991,683 2,057,033 2,805,104 -
$ (98,065) $ 2,678,367 $ 2,580,302 $ 14,540,223 $ 3,138,935
Note: Deferred revenue in the above table does not include the future scheduled "interest portion" of
the adopted assessment rolls. The 1996A and 1999A Improvement Bonds also include a pledge from
the Area and Unit Fund that has not been included above.
The above table provides a means for the monitoring the status of the debt service funds. For the
General Debt funded solely by property taxes, it appears that there are adequate planned levies to
retire the debt when the future lease revenues scheduled to be received from the school district are
included.
Iwo
DEBT SERVICE FUNDS (Continued)
Schedule of Special Assessment Debt:
Total resources available
+ Scheduled property tax levies
$ 2,580,312
3,138,935
$ 5,719,247
- Debt Service 14,540,223
Deficit in scheduled funding (at 12/31/02) $ (8,820,976)
This deficit will need to be funded by future adopted assessment rolls, special assessment levies,
investment earnings, transfers from other funds, property taxes or other available means.
Factors to consider when analyzing debt service funds:
• Are all the anticipated assessment rolls being adopted as soon as appropriate?
• Have all the planned financing sources been identified, such as pledged amounts from the area and
unit fund or future MSA funds?
• Are there significant "prepayments" received from property owners? In the current investment
environment, will the earnings the City will receive on these prepayments be lower than the interest
rate that was being charged on the adopted assessment roll?
• Have the scheduled debt service payments been scheduled around the anticipated assessment
rolls in addition to any anticipated prepayments to avoid accumulating excess balances and
generating excess earnings that potentially could be subject to arbitrage?
We recommend that all Debt Service Funds of the City be reviewed at least annually by applying the
above criteria.
The Area & Unit Fund is committed to the debt service of some special assessment bonds as well as
toward the water revenue bonds. We recommend that the City determine the full commitment of the
Area and Unit Fund whenever this fund is used to pledge toward future bond issues and construction
projects.
Undeveloped Special Assessments
As noted above in the discussion of Capital Project Deficits and Debt Service Funds, the City has many
funds with current deficits or projected deficits. City staff believe many of these deficits will be
eliminated as various properties are developed and can be assessed for improvements that have
already been made.
Currently, the City Charter allows property owners to defer special assessments on undeveloped
property until it is developed and owners are using applicable services. As noted above, this results in
cash flow problems for the City and can provide a road block for future expansion.
We feel the City should review its Charter in regards to assessments on undeveloped property. We
have seen some cities adopt a policy of only deferring assessments for a short period, say two to five
years.
If the City feels the Charter should not be changed, then it needs to re -think how it will pay for future
projects. One possibility is to require developers to pay a larger share of infrastructure improvements.
Another possibility is for the Area and Unit Fund or General Fund to loan the money to the applicable
project. These funds would be paid back when the applicable properties are actually assessed. The
key is the project should not get done unless the City has a plan for covering the costs of the project
(12)
DEBT SERVICE FUNDS (Continued)
Developer Escrow Accounts
The City maintains a Trust and Agency Fund to account for the activity related to developer escrows. It
is our understanding that developers deposit an escrow prior to a project beginning and that certain
costs may be applied against this escrow. We noted that there are several escrow accounts that carry
a "negative" balance, which represents an additional receivable balance from the developer. We
recommend that the City monitor these escrow balances and if they go negative that the developer be
contacted so that an additional deposit can be made.
Utility Account Reconciliation
During our audit, we noted the Utility clerk had not reconciled the detail billing register to the City's
general ledger at December 31, 2002. A reconciliation was provided upon our request.
Reconciling the detail billing register to the general ledger on a monthly basis is an important internal
control procedure. Subsequent to year end, we have noted this reconciliation is being done.
Reporting Model
The Governmental Accounting Standards Board (GASB) has issued Statement No. 34 on issues
related to the Governmental Financial Reporting Model. The implementation date for an organization
the size of the City is the year 2003. This new reporting model significantly changes governmental
accounting, which will impact the internal financial accounting and external financial reporting of the
City. As a result, it will involve a significant commitment of time by the finance department staff. A
summary of the key provisions of the statement is presented below:
Key features of the new model. Even though the new governmental financial reporting model has deep
roots in traditional public sector accounting and financial reporting, it offers many new features. The
most important of these new features are:
• Government -wide financial reporting. For the first time, users of state and local government financial
reports have access to government -wide financial statements that provide a clear picture of the
government as a single, unified entity. These new government -wide financial statements
complement rather than replace traditional fund -based financial statements.
• Additional long -term focus for governmental activities. Traditional reporting for tax - supported
(governmental) activities has focused on near -term inflows, outflows, and balances of spendable
financial resources. The new financial reporting model retains this short-term focus in the
governmental fund financial statements while providing a long -term perspective on these same
activities in the government -wide financial statements.
• Narrative overview and analysis. The new governmental financial reporting model provides financial
report users with a simple narrative introduction, overview, and analysis of the basic financial
statements in the form of management's discussion and analysis (MD &A).
(13)
Reporting Model (Continued)
• Information on major funds. It is widely agreed that fund information is most useful when presented
for individual funds rather than for aggregations of funds (e.g., all special revenue funds).
Accordingly, the new governmental financial reporting model presents individual fund data for each
of a government's major funds.
• Expanded budgetary reporting. In the past, budgetary comparisons were based solely on the final
amended budget. Under the new governmental financial reporting model, information on the original
budget is also presented. In addition, the new model eliminates aggregated budget presentations
(e.g., totals for all budgeted special revenue funds) in favor of comparisons for the general fund and
each individual major fund.
Infrastructure reporting. As with any major change, adoption of a new governmental financial reporting
model sparked some controversy. Specifically, many preparers of state and local government financial
statements generally supported the new model but were not persuaded that the proposed benefits of
capitalizing and depreciating a government's general infrastructure assets (e.g., roads, bridges, dams)
outweigh the related costs.
Accordingly, the Government Finance Officers Association (GFOA) has formally taken the position that
each government must make its own decision on whether to comply with the infrastructure reporting
provisions of GASB Statement No. 34 based on its own evaluation of the relative costs and benefits of
infrastructure reporting. For governments that elect to implement the infrastructure reporting provisions
of GASB Statement No. 34, GFOA recommends adopting a least-cost implementation strategy
consistent with the provisions of that statement. The practical application of such a strategy would
reflect the following recommendations:
• Limit the retroactive reporting requirements for infrastructure to major classes of infrastructure
assets.
Define major classes of infrastructure as narrowly as possible.
Limit infrastructure reporting to assets acquired during fiscal years ended after June 30, 1980.
Use estimates whenever possible.
• Use composite approaches to calculate depreciation expense.
Conclusion
We welcome the opportunity to discuss the points mentioned in this letter or any other accounting and
procedural issues in order to coordinate our efforts with you, the mutual objective being the
development of more effective accounting procedures for the City. We understand that some of the
aforementioned points are in the process of implementation or may already have been implemented;
however, these points are noted so that effective follow-up can be accomplished.
(14)
We sincerely appreciate all the courtesies and cooperation extended to us by you and the staff of the
City, and thank you for the opportunity to be of service to you. We look forward to working with you in
the future.
This report is intended solely for the information and use of the City, its management, the City Council
and others within the administration.
Austin, Minnesota
March 20, 2003
(15)
LARSON, ALLEN, WEISHAIR & CO., LLP