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Home My WebLink About2007 AMLCITY ~F C4LU~IB~~A HElCHTS, MIN~NES~TA AU~QIT M~ANAGENiENT LETTER December 3~ , 24Q7 ,. Tautges Redpath, Ltd. Certified Pubic Accountants and Consultants To the Honorable Mayor and Members of the City Council City of Columbia. Heights, Minnesota VVe have completed the Zoo? audit of the financial statements of the City of Columbia Heights, Minnesota and have issued our report thereon. Our Independent Auditor's Report is included in the City's Comprehensive Annual Financial Report ~CAFR}. Other reports included in the CAFR are: • Independent Auditors' Report on Compliance with Minnesota Legal Compliance Audit Guide for Local Government • Independent Auditor's Report on Internal Control and Compliance • Single Audit Reports This Management Letter provides the City an independent review and analysis of City finances. we also issue a separate Management Letter for the Economic Development Authority. Page 3 contains an Executive Summary of our recommendations with page references to the areas~discussed. ~i~r~ ~~~~~ ~~' HLB TAUTGES REDPATH, LTD. VL~hite Bear Lake, Minnesota June 19, ZOOS 4810 White Bear Parkway ~J1lhite Bear fake, Minnesota 55110 1651 426 7000 651 426 5004 Fax I www.hlbtr.com HLB Tautges Redpath, Ltd. is a member of International, a world-wide organization of accounting firms and business advisors. ~ Equal Opportunity Employer ~4e~ort Summary REPORT SUMMARY Several reports are issued in conjunction with the audit. Avery brief summary is as follows: Required Reports Comprelzensive Annual Financial • Financial statements « Unqualified ("clean") opinion Report {CAFR} • Footnotes on the Basic Financial • Su lemental information Statements Report on internal Control over Results of testing • Two deficiencies in internal Financial Reporting and on • Internal controls over financial control Co~nplrance and Other Matters reporting • Compliance with laws, regulations, contracts and Qrants State Legal Compliance Report • Results of testing certain • No reported findings provisions of Minnesota Statutes Schedule of Rxpenditures of • Results of testing certain • Two reported findings Federal Awards and independent provisions of Minnesota Auditor's Reports Statutes {Federal Sirr le Audit} Audit Management Letter Executive Summary EXECUTIVE SUMMARY A summary of our recommendations contained in this report is as follows: The City continues to experience a gaud property tax collection rate - 9S.S4~lo for 2007. Page 6 The General Fund balance increased $353,298 during 2007. The fund balance at December 31, 2007 was not sufficient to fulfill the reserve requirement for Pages 14 working capital. The shortfall was $205,76b. and 16 The Library Fund balance at December 31, 2007 was not sufficient to fulfill the reserve requirement for working capital. The shortfall was $53,332. Page 1 S We have issued a separate management report addressed to the EDAIHRA. Page 19 The Sewer operating account reported a loss of $199,355 after transfers out. Page 30 Net income from the City liquor operations increased $6b,412 over the prior year. Page 33 The City's Comprehensive Annual Financial Report received the Certificate of Achievement for Excellence in Financial Reporting. Page 40 We have a summary of the status of prior year internal control findings. Pages 42 and 43 Audit Management Letter Government-Wide Financia! Statements ACCOUNT BALANCE ANALYSIS OF THE GOVERNMENT-WIDE FINANCIAL STATEMENTS The basic financial statements of the City of Columbia Heights are presented in Statements l through Statement 9 of the 2007 Comprehensive Annual Financial Report. The following comments relate to these Financial Statements. Summary of Financial Activity A summary of financial activity for 2007 is as follows: Revenue Expenditures Interfund Increase in Fund Balancel Cash CAFR and Other and Other Transfers Fund Balancel Net Assets Balance Fund no. Sources Uses Nei Net Assets 121311D7 12/31107 1 General 42 $8,527,987 $8,417,602 5272,913 $383,298 $3,979,146 54,315,897 z Special Revenue: 3 Cammunit Develo ment Fund 105 310,126 517,841 93,661 114,D54 45,652 57,6D0 4 Cable Television 1D5 162,318 15,859 1DD,581 45,878 139,303 99,118 s Libra 105 690,548 646,122 X10,194 34,232 52,268 79,619 6 D.A.R.E Pro ram 107 2,058 5,365 9,000 5,693 42,943 42,943 7 S ecial Pro'ects 106 169,806 36,644 8,670 124,492 202,048 242,980 a C.H.A.S.E 106 3,580 44 - 3,536 60,155 59,675 s Twent -First Centu Grant 106 43,037 38,629 - 4,408 27,478 26,988 1o Confiscated Pro erf 106 2,001 7,221 - 5,22D 82 392 11 Local Law Enforcement Block Grant - - - - - - 1z Police Grants -Other 107 103,974 103,974 - - - - 13 Recreation Gontributed Pro'ects 107 49,439 33,602 8,670 24,507 63,024 62,564 14 Contributed Proects 107 30,301 4,436 500 25,365 61,733 61,733 15 Anoka Coun CDBG 105 296,240 296,240 - - 11,872 - 16 Flex Benefit 107 8,878 2,654 - 6,224 39,678 45,379 ~ 17~ Flousing and Redevelopment Authority: ~ 1a Parfcview Villa Narfh 122 70D,271 588,464 - 111,807 649,506 553,596 1s Parkview Villa South 122 299,682 219,936 - 79,746 3DD,828 306,87D 20 Reniallaousin 122 - - - - 40,688 40,688 ~ zi ~ EDA: 2z Economic Develo ment Authorit Admin 42 287,435 - 317,228 29,793 363,631 48,899 23 Business Revoivin Laan Fund 107 70,583 - - 70,583 454,857 310,336 24 Lease Revenue Bonds 20078 42 5,040,DOD - - S,04D,DOD 5,04D,D00 - 3a Debt Service: 31 Sheffield TIF Redevela ment 134 79,D59 19,197 - 59,862 280,682 48,184 32 lax Increment Bands 134 850,972 35,766 643,80D 171,4D6 364,712 374,228 33 Multi-Use Redevela meet Plan 134 29,T04 49,120 - 19,416 18,478 52,D6D 34 Tax Increment Refundin Bands of 2D04A 133 9,15D 643,906 643,$DO 9,044 29,136 27,916 35 G.O. Im rovement 1999A t33 22,620 102,211 25,421 54,17D 400,699 397,619 3G G.D. Im rovementlRevenue 2D03A 133 - 127,371 1D3,D25 24,346 69,182 69,182 37 G.O. Im rovementlRevenue 2006A 133 1,98D 71,528 644,076 574,528 574,528 574,528 38 TIF District #2 134 6,506 264 - 6,242 5,295 5,295 3s TLF Medtronic 135 237 293,983 - 293,746 - - 4a TIF Scattered Site 135 66,688 1,809 - 64,879 156,438 155,163 4i TIF Transition Block 135 57,423 47,684 - 9,739 26,490 51,454 4z TlF Central Avenue 135 185,382 - - 185,382 245,162 243,371 43 EDA TIF Revenue 2D07 135 2,895,430 146,293 2,537,846 211,291 2i 1,291 210,571 44 TIF Huset Park Area Fund 42 35,954 2,538,110 2,537,846 35,690 38,326 35,645 Audit Management Letter Government-Wide Financial Statements Revenue Expenditures Intertund increase in Fund Balancel Cash CAFR and Other and Qther 7ransters Fund Balancel Net Assets Balance Fund no. Sources Uses Net Net Assess 12/31/07 12!31107 a5 Capital Project: as MSA State Aid Street 43 408,325 148,595 28,710 231,020 36,488 - 4r Communit Cenler Ca ilal Buildin Fund 43 252,84D 47,865 - 2D4,975 4,218,683 4,185,233 as Ca ital lm rovements General Government Buildin 140 49,170 73,404 88,837 64,6D3 752,893 645,967 49 Ca ital E ui ment Re lacement General Governm 43 371,060 366,380 100,OD0 104,680 5,063,037 4,215,331 50 Ca ital Im rovements PIR Fund 43 1,351,752 1,D73,862 546,083 2fi8,193 1,139,691 981,776 51 Ca ital Im rovement 140 684 9,577 - 8,893 635,138 45,015 52 Qowntawn Parkin Maintenance 140 15,610 17,719 - 2,109 163,492 161,412 5s Ca ital Sheffield Redevefo ment 140 57,740 - - 57,740 969,953 962,253 54 Ca ital Im rovement Parks 141 94,299 104,074 50,000 40,225 765,925 795,015 55 Ca ital Im rovement PWS 141 1,710 - - 1,710 28,745 28,515 5s Ca ital lm rovement I)evelo ment 43 1,279,962 1,324,935 201,867 156,894 1,883,259 754,950 57 Infrastructure Re lacement 141 1,031,920 309,20D 85,130 637,590 778,727 774,467 58 Ga ital E ui ment Fire 141 16,240 111,410 - 95,17D 178,830 241,021 59 Ca ital E ui ment Cable TV 141 4,880 - - 4,880 81,891 81,241 sa Ca ital Buildin Libra 141 - - - - 2DD,OOD 200,000 s1 Police Com uter E ui ment 141 160 3,23D - 3,07D - - ! s2lEntergr ss Water 145 2,320,852 2,085,741 111,813 123,298 2,998,519 47fi,579 sa Sewer 148 1,571,962 1,643,869 111,812 183,719 5,102,605 1,430,565 s5 Refuse 151 1,356,132 1,132,155 183,212 40,765 526,255 247,$72 s6 Storm Sewer 154 309,689 207,820 - tD1,869 856,701 165,885 s~ Li uor 159 6,770,799 6,502,207 214,70D 53,892 2,917,888 3,306,938 se Internal Service: s9 Cenlral Gara a 165 1,695,428 476,545 113,837 1,105,046 1,568,710 437,703 7o Information S stems 165 92,060 234,185 235,000 92,875 724,162 700,390 ~~ Insurance 165 467,837 408,479 - 59,358 685,049 621,253 72 Compensated Absences 165 45,890 - - 45,890 99,852 772,092 ~s To1al 340,606,370 331,293,127 30 $8,929,945 $44,955,886 $31,092,026 Audit Management Letter Government-Wide Fr"nancia~ Statements Pro ert Tapes Receivable Delinquent taxes receivable related to the general property tax levy increased from $200,669 at December 3l, 200b to $257,897 at December 31, 20D7. Tax collections were 98.84% of the 2007 levy. A history of tax collections is presented in Table 5 of the Comprehensive Annual Financial Report. Tax Levies, Tax Rates and Tax Capacity ~~,~, A comparison of values for taxes payable 2005 through 2008 is as follows: Zoos 2006 zoo? 2008 Market value $1,203,032,800 $1,271,030,500 $1,387,050,100 $1,454,932,200 Tax capacity values: Real estate $11,94 l ,3b9 $13,247,486 $14,721,372 $15,714,527 Personal property 104,386 101,071 106,885 101,382 Subtotal 12,045,755 l 3,348,557 14,528,257 15,815,909 Fiscal disparity contribution X417,605} (453,305} X443,665} X485,657} Fiscal disparity distribution 2,275,591 2,324,9 l 7 2,473,140 2,877,432 Total $ l 3,903,741 $ l 5,220, l b9 $16,857,732 $ l 8,207,684 Tax capacity rates 47.857 44.736 41.511 42.703 Tax levy does not include HRA} $6,263,903 $6,SOO,613 $6,916,895 $6,916,895 Audit Management Letter Government-Wide Financial Statements Special Assessments Receivable Special assessments receivable consisted of the following amounts at December 31, 2007 and 2006: December 31, Increase Description 2006 2007 Decrease} Delinquent $19,283 $28,117 $8,834 Deferred 2,929,283 2,962,663 33,380 Unremitted 3,377 11,379 8,002 Totals $2,951,943 $3,002,159 $50,216 Delinquent special assessments receivable consist of amounts which have been spread for collection in 2007 and prior years but have not been collected at December 31, 2007. The pity collected approximately 97%o of the current assessments due in 2007. Deferred assessments receivable consist of the remaining balance of council adopted assessment rolls. These assessments are collectible at various terms and interest rates. Balance at January 1, 2007 $2,929,283 Less 2007 principal levy X323,364} Plus new assessment rolls 1,084,993 Less prepayments (728,250} Balance at December 3 l , 2047 $2,962,662 Audit Management Letter Governmer~~-Wive Finarrcia! Statements Interfund Receivables A schedule of activity of tong term interfund loans is as follows: Balance New _ Payments Balance Fund with Payable 12/31106 Loans __ Principal Interest 12/31/07 Shel'fiel~ TIF - 652 $385,558 $ - $52,832 $18,579 $332,726 EDA - 390 600,000 - - - 600,000 EDA - 420 800,000 - - - 800,000 Totals $1,7$5,558 $0 $52,832 $18,579 $ I ,732,726 The Sheffield TIE loan is authorized by Resolution 2003-5. The EDA laans are authorized by Resolution 2004-4 and 2004-b0. Audit Management Letter General Fund GENERAL FUND The General Fund of the City is maintained to account for the current operating and capital outlay expenditures common to al] cities. These basic services include abut are not limited to} public safety, public works, culture and recreation, and general government. State aids and property taxes account for approximately S7°Io of the total revenue of the General Fund. A history of General Fund revenue is as follows: General Fund -Sources of Revenue State Aid Pro ert Taxes All 4tl~er Tatal Year Amount Percent Amount Percent Amount Percent Amount Percent 1996 $3,153,299 49%n $2,403,017 37% $924,756 14% $6,4$ },072 100%~ 1997 3,333.6}5 49°]0 2,505,45b 37% 1,006,133 15°]0 6,$45,204 100% 199$ 3,3$2,1$7 47% 2,b62,2$S 37% 1,123,767 16% 7,16$,242 l 00%r~ 1999 3,44$,758 48% 2,658,59$ 37% 1,026,541 14% 7,133.897 100% 2000 3,509,577 47% 2,737,854 37% 1,167,656 16%a 7,415,0$7 100% 2001 3,577,31$ 47% 2,954,511 3$%a 1,14$,842 15% 7,6$0,671 100%r 2002 3,362,902 41 % 3,534,854 44% 1,225,$$9 15% 8,123,645 100% 2003 2,$]1,$70 3$°10 3,646,155 49% 967,382 13% 7,425,407 104% 2004 2,413,$50 30% 4,336,$02 53% 1,398,7$6 17°Io $,149,43$ 100% 2005 1,$0$,144 23% 4,360,66$ 62% 1,175,625 15% 7,944,440 100% 2006 1,737,$69 22% 5,202,$26 66% 944,379 l2% 7,$$5,074 100% 2007 1,9$$,013 23% 5,4$3,751 64% 1,056,223 12% $,527,9$7 100% Audit Management Letter State aids for the General Fund have consisted of the following amounts far the Iasi two years: Increase Description 2007 2006 Decrease) Local government aid $1,0$8,532 $878,425 $210,107 MVHC 473, l 73 517,322 (44,149} Police aid 229,167 212,825 16,342 Fire aid 59,645 106,189 (16,544} All other 107,496 23,108 54,388 Totals $l,9$S,ol3 $1,737,869 $250,144 A graph of General Fund revenue by source is as follows: Audit Management Letter General Fund General Fund A chart of 2007 revenue by source is as follows: Genera! ~'ued 2007 Revenue by Source 1111 {llh~r 1 ?.~ ~!f 1 Yf. l !f {icneral I'rupedy'faxes Audit Management Letter Genera! Fund A chart of 2007 expenditures by function is as fo~~ows: Audit Management Letter General Fund The fund balance of the General Fund at December 31, 2447 was $3,979, t 46. During 2447, the fund balance of the General Fund increased by $383,298 as follows: Favorable Unfavorable} Budget Actual Variance Revenues and transfers in: Property taxes $5,381,794 $5,483,751 $101,957 Licenses and permits l 2D,60o 137,787 17,187 Intergovernmental 2,004,050 1,988,013 (l 6,037) Charges for services 521,556 572,697 51,141 Fines and forfeitures 120,000 142,568 22,568 Investment income ?5,000 167,832 92,532 Qther 40,326 35,339 X4,987) Transfers in 470,012 470,512 500 Total 8,733,338 5,998,499 265,161 Expenditures and transfers out: General government 1,663,491 1,585,304 78,187 Public safety 4,082,057 3,996,791 55,266 Public works 1,385,420 1,336,759 45,661 Parks and recreation 1,400,879 1,486,251 X85,372} Contingencies 44,836 12,497 32,339 Transfers out 155,000 197,599 (I 2,599} Total 5,761,683 8,615,201 146,482 Net change in fund balance x$28,345} $383,298 $411,643 Audit Management Letter General Funa~ The City's General Fund balance has been as follows for the past several years: Year Ended Increase December 31, Fund Balance (Decrease} 1993 $3,1 S 1,939 $256,073 1994 3,444,408 262,469 1995 3,591,224 l 46,816 1996 3,839,350 248,126 1997 4,060,594 221,244 1998 4,744,231 683,637 1999 5,015,965 271,734 2000 4,$01,418 X214,547) 2001 3,897,376 X904,042) 2DD2 3,515,606 X381,770) 2003 3,423,232 (92,374} 2004 4,140,110 716,578 2005 3,350,128 X789,982) 2006 3,595,848 245,720 2007 3,979,146 383,298 Audit Management Letter General Fund Audit Management Letter General Fund Property taxes and state aids account for approximately S7%a of the revenue of the General Fund. Property taxes and state aids are nit received until July and December of each year ~i.e., the second half of the year}. As a result, the City is required to have sufficient reserves at the beginning of the year to fund operations of the first half of the year. As such, the City adopted resolution 95-40 establishing a General Fund cash flow reserve. This reserve is an amount equal to forty-five percent of the ensuing year's budgeted expenditures. A summary of General Fund designations is as follows: Fund Balance Component Reserved for prepayments Designated for working, capital Undesignated Total fund balance -December 3I 2007 $35,710 3,943,43 ~~ mn ~ ~ti ~nn~ $35,323 3,Sb0,525 ~~ ~o~ ~n ~ The amount of General Fund balance at December 31, 2047 was not sufficient to fulfill the City's reserve goal. The reserve requirement is calculated as follows: 20x8 budgeted expenditures Reserve requirement percentage Reserve requirement Balance available Amount of fund balance under reserve requirement $9,220,448 A ~, 01„ `f, ~ ~F7,LU~ ~z o~~ ~z~ $2o5,7bb Audit Management Letter Special Revenue ~ur~ds SPECIAL REVENUE FUNDS The financial statements of the Special Revenue Funds are presented in Statements 12 through 34 of the 2047 Comprehensive Annual Financial Report. Special Revenue Funds are a classification of funds to account for revenues (and expenditures related thereto) segregated by City policy or Federal or State statutes for specific purposes. The City maintained the following Special Revenue Funds during 2007 and 20ob: Fund Balance Deficit} December 31, Increase Fund 2007 2006 (Decrease) Flex Benefits $39,67$ $33,454 $6,224 Anoka County CDBG ~ l l ,872} ~ 11,872} - Cab1eTelevision 139,303 93,425 45,878 D.A.R.E. Program 42,943 37,250 5,693 Library 52,268 l $,036 34,232 Community Development 45,652 159,706 ~l 14,054} Twenty-First Century Grant 27,478 23,070 4,408 Recreation Contributed Projects 63,024 38,517 24,507 Contributed Projects 61,733 36,368 25,365 Special Projects 202,048 77,556 124,492 Confiscated Property 82 5,302 X5,220} C.H.A.S.E. 60,155 56,619 3,536 Housing & Redevelopment Authority: Parkview Villa North 649,506 537,699 111,807 Parkview villa South 300,528 22l ,082 79,746 Rental Housing 40,b88 40,688 - EconomicDevelopment Authority: Business Revolving Loan Fund 464,$57 394,274 70,583 E.D.A. Administration X363,631} (333,83$} X29,793} Totals $1,$14,740 $1,42?,336 $387,404 Audit Management Letter Special Revenue Funds Library Fund_~240} This fund was established in 1993 to account for the library operations. Prior to 1993, this activity had been accounted for in the General Fund. The primary revenue source of this fund is property taxes which are not received until the second-half of the year ~3uly and December}. Resolution 95-40 established a reserve for cash flaw in an amount equal to forty- five percent of the ensuing year's budgeted expenditures. A summary of fund balance is as follows: December 31, 2007 2446 Designated for working capital $48,924 $14,677 Reserved for prepayments 3,344 3,359 Total $52,268 $ ] 8,036 The fund balance at December 31, 2007 was not sufficient to fulfill the established reserve. A comparison of the required reserve and the fund balance available is as follows: $738,346 2008 budgeted expenditures x 45% Reserve requirement percentage 332,256 Reserve requirement 200,000 Balance available in Capita] Equipment Replacement Fund 48,924 Balance available in Library Fund $83,332 Amount of fund balance under reserve requirement Effective December 31, 2002, the City transferred $200,000 aut of this fund to establish the Capital Equipment Replacement -Library Fund. Audit Management Letter Specra! Revenue Funds Community Development ~20~) This fund was established in 1 ~9b to account for the financial activity related to building inspections and community development administration. A summary of the financial activity of this fund is as follows: Revenues and transfers in: Investment income Licenses and permits Charges for services Transfer from General Fund Transfer from EDA Total 2DO5 2oD6 2007 $2,891 $6,920 $3,D8D - 469,73D 307,D46 - 2,089 - 293,630 247,331 317,228 223,791 -- - 520,312 726,070 627,354 Expenditures and transfers out: Expenditures 471,589 488,507 517,841 Transfer to Capital Improvement Development - 191,604 201,567 Transfer out to General Fund administrative charge) 23,341 22,989 2I,7DD Total 494,930 703, l OD 741,408 Net change in fund balance 25,382 22,974 (114,054} Fund balance -January l Fund balance -December 31 The fund balance decrease for 2007 is the result of licenses and permits revenue far 2047 was less than budgeted by $253,000. HRA and EDA Comments and analysis of the HRA and EDA Funds are presented in a separate report addressed to the EDA. Audit Management Letter Debt Service Funa~s DEBT SERVICE FUNDS Debt Service Funds are a type of governmental fund to account for the accumulation of resources for the payment of interest and principal on debt (other than Proprietary Fund debt). A summary of bonded debt at December 31, 2007 is as follows: Bond Issue Fund Del,t Balance at Payable at 12/31/07 l 2131107 Source of Repayment G.Q. Tax Increment Refunding Bands of 2004A (350) $29,13b $775,000 Tax increment G.O. lmprovemem Bands of 1999A (387} 400,b99 235,000 G.O. Improvement Bonds of 2003A (388} b9,182 1,004,74b Transfers from Capital Improvement P1R G.D. Improvement Bonds of 2006A 574,52$ 2,759,550 Transfers from Capital improvement P1R G.O. Street Rehabilitation Series 2007A 2l 1,291 1,004,000 Property taxes Total $ l ,2$4,83b $5,774,296 All tax increments to be used for bond payments are receipted into the Tax Increment Bonds Fund (376) and subsequently transferred out to the Debt Service Funds as debt payments are made. Audit Management Letter Capital Project F~rnds CAPITAL PROJECT FUNDS The fund balances (deficits) of the Capital Project Funds were as follows at December 31, 2047 and 2006: Fund Balance Deficit} December 31, Increase Fund 2007 2006 (Decrease} Municipal State Aid 2121402 $36,488 x$194,532} $231,020 Community Center Capital Building Fund 418 4,218,683 4,013,708 204,975 Capital Improvement Development 420 1,883,259 1,726,365 156,894 Capital Improvement 4411390 635,13$ 644,031 X8,893} Downtown Parking Maintenance 4051290 163,492 165,601 X2,109} Capital Sheffield Redevelopment 410 969,953 912,213 57,740 Capital Improvement General Government Buildings 411 752,893 688,290 64,603 Capital Improvement Parks 412 765,925 725,70D 40,225 Capital Improvement PVVS 414 28,745 27,035 l ,710 Capital Improvement Projects PIR 415 1,139,691 1,407,884 (268,193) Infrastructure Replacement 430 778,727 141,137 637,590 Capital Equipment Replacement 431 S,D63,037 4,958,357 l 04,68D Capital Equipment Fire 439 178,530 274,000 X95,170} Capital Equipment Cable TV 440 81,891 77,01 l 4,580 Capital Building Library 454 200,OOD 200,D00 - Anoka County ~LEC Police Computer Equipment 481 - 3,070 (3,070} Totals $16,596,752 $15,769,870 $ l ,126,882 Audit Management Letter Capital Project Funds Municipal State Aid ~212141~2~ ~~ This fund was established to account for MSA maintenance and construction allotments. For the past three years, the fund balance of this fund consisted of the following: December 3 ~ , Account 2005 2406 2007 Maintenance $ l 24,542 $ l 47,501 $ 3 32,766 ConstFUCtion (220,906} (342,033) (96,278} Total ($9b,064} ~$ ~ 94,532} $36,488 Audit Management Letter Capital Project Funa~s A summary of 24x7 activity ~s as foltows: 212 4a2 Maintenance Construction Total Revenue: MSA $133,829 $2b8,391 $402,220 Charges for services 3,105 3,000 b,105 Total Revenue 13b,934 271,391 408,325 Expenditures: Personal services bb,343 5,457 71,800 Supplies 9,539 18,89b 28,435 Other services and charges 75,787 X27,427} 48,3b0 Transfers out: ~I Fund 415 - 28,710 28,710 ~i Total expenditures 151,bb9 25,b3b 177,305 Net change in fund balance (14,735} 245,755 231,020 Fund balance -January 1 147,501 (342,033} (194,532) Fund balance -December 31 $132,7bb ~$9b,278} $3b,488 Audit Management Letter Capital Improvement General Government Buildings X411} ~., A summary of financial activity is as follows: 2005 200b 2007 Revenue: Investment income $72,b41 $32,470 $49,174 Transfer from Garage Fund 72,500 89,998 88,837 Total revenue 145,141 122,4b8 138,007 Expenditures: Project costs: MSC building repairs 453,541 b5 ] ,949 73,404 Gther 23,330 24,073 - Transfers out - 1,800,000 - Total expenditures 47b,871 2,475,982 73,404 Net change in fund balance (331,730} X2,353,514} 64,b03 Fund balance -January 1 3,373,534 3,043,504 b88,290 Fund balance _ December 31 $3,04 3 ,804 $b88,290 $752,893 During 2001, the City adopted Resolution 2001-54 which authorized the transfer of $1,400,000 from the General Fund to this fund. Pursuant to the resolution, these funds are "dedicated to future improvements to general government buildings." Also, the resolution requires afour-fifths vote to expend any unbudgeted, undesignated fund balance. Audit Management Letter Capital Project Funds Capi~a~ Project Funds Capital Improvement PVVS X414} This fund was established in 2001 by Resolution 2001-S4 to account for monies dedicated for future improvement or replacement of the building. A summary of financed activity is as follows: Zoos 2006 zoo? Revenues: Investment income $55 l $940 $1,7 ~ 0 Expenditures: Transfer to CAB's of ~ 990 - - - Net change in fund balance 55 ~ 940 1,710 Fund balance _ January 1 25,544 26,095 27,035 Fund balance -December 3l $26,095 $27,035 $2$,745 The resolution establishing this fund requires afour-fifths vote to expend any unbudgeted, undesignated fund balance. The transfer was approved through Resolution 2004-$Z. Audit Management Letter Capita! Prajec~ Funds Capital Improvements PIR X415) A summary of the activity of this fund is as fotiows: 2005 2oob 2007 Financial sources: Special assessments $520,031 $1,011,553 $ l ,137,57b Intergovernmental - ?31,701 - Chargesfor services - 229,986 14b,90b Investment income - - b7,270 Issuance of bonds - 2,759,550 - Bondpremium - 26,343 - Transfers from General Fund 83,471 3,700 12,599 Transfers from Municipal State Aid Fund 285,000 15,004 - Transfers from Sewer Utility Fund 2,500 - - Transfers from Infrastructure Replacement Fund - 107,384 185,130 Transfers from Debt Service Fund - 384,081 - 4ther 71,353 - - Tatalfinancial sources 9b2,355 5,2b9,258 1,549,481 Financial uses: Transfer to Capital Improvements Development 4,b26 l b,5b9 - Transfer to General Fund 2,b4b - - Transfer to Debt Service Fund 290,4b2 133,244 743,512 Transfer to Infrastructure Replacement Fund - - Transfer to Utility Funds 9,923 - - Issuancecosts - 25,1 l 4 - Qther 50,3b2 - - Pro jest expenditures l ,242,728 3, l 35,820 1,073,8b2 Total financial uses 1,b00,747 3,310,747 1,817,b74 Net change in fund balance ~b38,392) 1,958,511 ~2b8,193} Fund balance deficit} - January 1 87,7b5 X550,627} 1,4U7,884 Fund balance ~def cit} -December 31 ~$550,b27} $ l ,407,884 $ l ,139,b91 Audit Management Letter Capital Project Funds The projects accounted for in this fund are financed by the following sources: ~ Capital Equipment Replacement Fund • water Capital Construction Fund • Sewer Capital Construction Fund • General Fund • Special assessments The financing provided by other City funds is basically a cash transfer from those funds. The financing provided by special assessments is not an immediate repayment. Special assessments are extended out over a period of up to fifteen years. The Capital Improvement Projects Fund is therefore required to finance the special assessment receivables until they are collected. The amount of special assessments receivable at December 31, 2DD7 was $3,DD2, i 59. Audit Management Letter Capifa! Pro~ecf Funa~s A summary of the active projects in this fund is as follows: Praj ect Funding to Date Project Project Casts Funding Prior MSA General Excessl Project 2407 Years Total Assessments Other Construction Fund Total Deficiency} 4444 $3,267 $3,797,677 $3,800,944 $1,672,459 $1,381,672 $677,189 $52,233 $3,783,553 t$17,391) 0502 14,870 1,964,408 1,979,278 856,460 679,997 300,000 142,530 1,978,987 (291} 4602 7,991 17,691 25,682 - - - 17,3b0 17,3b0 (8,322) OGOG 25,459 21,793 47,252 - 47,252 47,252 - 0701 109,74b 250 109,996 109,746 - - 250 109,996 - 0702 1,456,084 31,862 1,487,946 812,992 626,525 - 48,429 1,487,946 - 0705 1,169 - 1,169 - 1,169 - - 1,1b9 - Total $1,618,5$6 $5,833,681 $7,452,267 $3,451,657 $2,73b,b15 $977,189 $260,802 $7,426,2b3 ($26,004} The City does not formally adopt budgets for projects. Under current practice, estimated costs and potential funding sources are disclosed with information included in the City council packet. Chapter 7 of the City Charter indicates budgets and modifications to budgets should be approved by council resolution. We recommend the City formally adopt project budgets by resolution, prior to approving the project. The proj ect budget should include project costs along with specific funding sources and the dollar amount from each funding source. Audit Management Letter Enterprise Funds ENTERPRISE FUNDS Water Fund Uperat~n~ Account 601 A graph of the water operations is presented below: The City increased rates effective August 1, 200. Audit Management Letter Enterprise Funds Sewer Fund Uperatin~ Account X02 ,,,....~ A graph of sever operations is presented belov~. {HH} 4IH) '~1 5 , . 1.4[x),fHH) Sewev Ufility Fund I :ifH) [HH) Revenue and . . 51 ;a) fxH} Expenses IfH) IHH) $1 . . Sl.)Ix1.iHx) IHH] '~BIH] 1•'I'r~nslcr w Deh~ 5erviee . S~IH).fHH) MCIS $7{H} {HH) f 1'~Otf~r OpCralin~ L'xrx;n~ts . 57 H).fHH} f0~cr~iing Revenue (H] lHH1 ~( ~ . SlilH).lHH) rl.:: ~; a z ; ~ ;:s:y ~ Q i ' '~ µ, „ ~.r~ G~ r 'S3IH).IHH} ?a ~~5;;: ~ ~a. '~~; ~ ~~~;> ;. S2lH}.IHH} ~1IH).(HH} ~„ ,tip,. ;~.~.~-z.<<.,::>.:<, x, ~ ~~ ~ t ,;; ~. 2 d _ ~Y~ .. < ~ ~ C The decrease in operating revenue for 2004 is related to a revised rate structure adopted in December 2003 (Resolution 2003-50). The revised rate structure established a fixed fee and eliminated a minimum billing amount. Audit Management Letter Enterprise Funds Refuse Fund 6D3 A graph of refuse operations is presented below: 500 00n $I . . $I.Sf}(}.(}(}(} 0[}{) $3 400 $1 4 I ( R f Utilit . . . )0 0 ).0 e use y .~ .. $ I.2f)0.0fH) $1.20().!)0(} $9f}0.000 ~ $90U.0[1<) O~er~ting l~x{xnscs $800.000 ii $800.{)fX) }t~Ocr~~ing Itevcnue $700.000 $7U(}.000 $50Q0{)U $500.0!}0 $~(}0.00(} $400.000 $300.000 ~30o.00f) $2[)0.[10!} a ~ $?Of},Of)() $ 100.0[X} Y '°~° tik:: ~ i ' ' ' ' ~ $ } 0(1.000 . ~:: ~ ,1 j Fy fit,: AF,: o: .~ti ~ $0 2003 ?{}IW 2005 2flflh ?(}f)1 Audit Management Letter Enterprise Funafs Storm Sewer Fund 604 A graph of operations is presented below: This fund is responsible for a portion of the debt service on the 1999B and 2003A bond issues. The outstanding liability on the bonds was $7b0,704 at December 31, 2007. Additionally, the Storm Sewer Debt Service account ~b34} had a deficit of $59S,OS0 at December 31, 2047 . Audit Management Letter Enferprise Funds Municipal Liquor Fund b09 An analysis of 2007 activity is as follows: ()rx;rating revenues Cost ol'eoods sold Gross margin ()thrr operalin~ expenses Net income from operations Tup Valu Top Yalu II _ Heights Liquor 2[]t17 Trna! 2[lllb Total Amount Percent Amount Percent Amount Pcrccnt Amount 1'cr~ent Amtwnt i'4rccnt X3,156,[)51 lflf}.[){1`l~ $2,51[1,863 1{){}.{)ll~/ ~i,[}55,476 1L)f}.I1[}`I S~fi.7'?2.3411 it}t1.[H1'7 ~fi.546.491 ]I}f}.[][1`l, 733,3!17 23.23'l~ 589,717 23.49`!. 254,484 24.111 1.577,St}8 23.47`! 1.5[17.173 23.{12°l~ 6I8,i188 ]9.58`% 485,268 19.33'! 2115,588 19.48'1 1.3f}8,)44 I9.47`l 1.3t15.I121 19.93`/ $115,219 3.65`l~ ~l{}4,449 4,16'!. X48,896 4.63'% ~?68.5fi4 4.[}[1`lr $2412.152 3.{19'% The following comments relate to the above table: • Sales increased by approximately $ l 7b,000 • Gross margin percent increased from 23.02% to 23.47% which resulted in increasing gross margin by $70,000 • Net income from operations increased approximately $66,000 from 2006 to 2007. Audit Management Letter Fn~erpr~se Funds Income from operations as a percent of totaa saes for the past eighteen years are scheduled below: Net Income From Operations % of Top Top Heights Total Year Valu Valu IZ L~gaor Total Sales 1959 Site tnformatian---------------- $22$,557 6.2% 1990 --Not Available----------------- 261,509 6.2% 1991 $297,37$ $ - $97,341 394,719 8.2~/c 1992 246,739 ~ 100,907 347,646 7.2% ] 993 148, ] 50 (62,60$) 103,476 1$9,01$ 3.6% 1994 146,350 5,902 l Ol ,453 253,735 4.6~/a 1995 141,235 37,749 l 15,595 294,579 5.2% 1996 124,471 S0,$$5 150,649 356,005 5.9% 1997 6$,002 92,250 15 l ,023 31 l ,275 5.1 1995 151,974 l 23,436 l $ ] ,752 457,162 7.2% 1999 146,576 130,763 226, l 16 503,455 7.5% 2000 152,630 145,749 128,359 3$6,76$ 6.0% 2001 153,202 10$,788 167,557 459,577 6.7% 2002 ]59,242 161,35$ 175,799 496,399 7.2% 2003 30,672 165,$91 135,709 332,272 4.$% 2004 16$,475 144,$12 $6,440 399,727 5.7% 2005 14,526 98,334 $7,211 200,071 3.0% 2006 62, l 00 93,540 46,512 202, l 52 3.1 °Io 2007 115,219 104,449 48,$96 26$,564 4.0% As shown above, liquor operations have been an important revenue source for the City. Audit Management Letter Enterprise Funds Comparison With Other Municipal Liquor Stares The Office of the State Auditor (OSA) annually publishes "An Analysis of Minnesota .1V~unicil~al Liquor Store operations. " The most recent report available is for 24Ob. The following analysis compares Columbia Heights' liquor operations with those reported in the OSA report. There are eighteen cities in the metropolitan area that operate off sale only operations. The City of Columbia Heights ranks sixth in sales among metro area cities behind Lakeville, Edina, Richfield, Eden Prairie, and Apple Valley. tt should be noted that the following comparisons are strictly a comparison of amounts reported. There are a number of factors that affect operating results that are not included in this comparison. These factors include the mix of product sold and philosophy regarding sales techniques such as high volumellower margin. Audit Management Letter Fnferprise Funds Gross Mar ~n Analysis Gross margin measures the sales less the direct cost of products sold. A comparison to state averages for Minnesota municipal off sale operations is as follows: Cost Gross Margin State Sales of Sales Amount Percent AverageEl~ l 996 $6,01 l ,907 $4,774,90$ $ l ,236,999 20.6°]a 23.1 % 1997 6,135,166 4,878,712 l ,256,454 20.5% 22.7% 1998 6,367,689 5,009,923 1,357,766 21.3% 23.2%a I 999 6,669,376 5,238,023 l ,43 ] ,353 2 I.5%a 23.6%a 2000 6,425,021 5,051,575 1,373,446 21.4% 23.8% 2001 6,796,354 5,267,398 1,528,9$6 22.4%a 24.0%a 2002 6,857,307 5,254,598 1,602,709 23.3%a 24.4% 2003 6,934,572 5,366,137 1,56$,435 22.6%a 23.9% 2004 6,946,058 5,318,331 1,627,727 23.4%a 24.1 %a 2005 6,7 13,932 5,21 O,S6l l ,503,071 22.4%a 24.6%a 2006 6,546,491 5,039,318 1,507,173 23.0%a 24.4%a 2007 6,722,390 5,144,882 1,577,508 23.5°]o Not Available ~~~Source: Minnesota Gffice of the State Auditor -Metropolitan Area Off Sale Operations Audit Management Letter Fnterpr~se Funds ~peratin~ Expenses operating expenses for the past several years have been as follows: Percent of Sales Year Amount Cit State Av . 1994 $7$$,424 14.3% 16.0% 1995 830,817 14.6% 16.8% 1996 580,994 14.7% 16.3% 1997 945,179 15.4% 16.5% 1995 900,604 14.1 % 16.1 % 1999 927,595 13.9% 16.2% 2000 986,678 15.4% 16.5% 2001 1,069,409 15.7% 16.6% 2002 1,106,310 l 6.1 %a 16.2% 2003 l ,236,163 l 7.8% 17.8% 2004 l ,256,934 15.1 % 17.9% 2005 1,303,000 19.4% 17.Oalo 2006 1,305,021 19.9% 17.9% 2007 1,308,944 19.5% NIA Audit Management Letter Fr~terprise Funds operating expenses for 2007 and 2006 were as follows: Increase 2007 2006 (Decrease} Personnel costs $834,089 $836,994 ($6,905) Rent 201,949 228,961 (27,012) Utilities 64,750 49,643 15,107 Credit card fees 7l ,940 56,988 14,952 Insurance 19,$93 19,893 - Advertising 20,297 1$,253 2,044 All other 100,026 94,259 5,737 Total $1,308,944 $ l ,305,021 $3,923 Net Income from operations Net income for the past several years is as follows: Percent of sales City State Year Amount City Average 1994 $253,735 4.b% 7.2%a 1995 294,579 5.2% 6.S%a ~ 996 356,oa5 5.9%a 7.5%a 1997 ~ 11,275 5. l % 6.9% 1998 457,162 7.2% 7.5% 1999 503,455 7.5% 7.5%a 2000 3$6,76$ 6.0% 7.2% 2001 459.577 6.7% 7.3% 2002 496T399 7.2% $.1 % 2003 :332,272 4.8% b.1 % 2004 37Q,793 5.3°10 6.6%a 2005 200,071 3.0%a 7.8%a 200b 202,152 3.l %a 7.0% 2007 265,564 4.0% Not Available Audit Management Letter Internal Service Funds INTERNAL SERVICE FUNDS fraternal Service Funds are used to account for the financing on a cost reimbursement basis of goods or services provided by one department to another department within the City. During 2007, the City maintained the following fraternal Service Funds: Cash Balance December 31, Fund 204b 2007 Central Garage $388,$71 $437,703 Information Systems bb9,4b9 700,390 Insurance 552,150 b21,253 Compensated Absences 737,425 772,092 Total $2,377,918 $2,531,438 Audit Management Letter Certificate of Achievement CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING The City submits the Comprehensive Annual Financial Report to the Government Finance Officers Association of the United States and Canada (GFOA) for a review. The program is a review of all facets of financial reporting for disclosure, clarity and consistency with national reporting standards. The City received the award for each year since 1990. We commend the City for this achievement. Audit Management Letter Accounting Star~a~ards ACCOUNTING STANDARDS Governmental Accounting Standards Board (GASB) statements that are required to be implemented in future years that may affect the City are as follows: City Implementation Upcoming GASB Statements Required By Statement No. 45. Accaun.ting acid Financial Reporting by Employers for Post 200$ Employment Benefits Ot1~.er T1rar1 Pension Plans. This Statement establishes standards for the measurement, recognition, and display of 4PEB expenselexpenditures and related liabilities bassets}, note disclosures, and, if applicable, required supplementary information ~RSI} in the financial reports of state and local governmental employers. Statement No. 49. Accounting and Fil~rancial Deporting for Pollution Re~7~ediation. 2008 4l~ligation. The provisions of this Statement are effective for financial statements for periods beginning after December 15, 2007. Statement No. 5Q Pension Disclosures - aj~t a~alerrdnaent of GASB Stater~ients No. 25 2008 acid No. 27. The provisions of this Statement are effective for financial statements for periods beginning alter June l 5, 2007. Statement No. 5l. Accounting acrd Financial Reporting for Intangible Assets. The 2010 provisions of this Statement are effective far financial statements for periods beginning after June 15, 2009. Audit Management Letter Communication With those C~rarged Wit~i Communication COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE we have substantially completed the audit of the City of Columbia Heights, Minnesota as of and for the year ended December 31, 2447, and have issued draft reports. Professional standards require that we provide you with the following information related to our audit. fur Responsibility under U.S. ~enera~ly Accepted Auditing Standards and government Auditing Standards As stated in our engagement letter dated September 19, 2007, our responsibility, as described by professional standards, is to express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, inconformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities. In planning and performing our audit, we considered the City of Columbia Heights, Minnesota's internal control over financial reparting in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide assurance on the internal control over financial reporting. we also considered internal control aver compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. As part of obtaining a reasonable assurance about whether the City of Columbia Heights, Minnesota's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants, noncompliance with which could have a direct and material effect on the determination of Audit Management Letter Commurricalion With Those Gf~argeaf Wien Communication financial statement amounts. However, providing an apinion on compliance with those provisions was not an objective of our audit. Also in accordance with OMB Circular A-133, we examined, an a test basis, evidence about the City of Columbia Heights, Minnesota's compliance with the types of compliance requirements described in the I.S. Dffice of iVlanagement anti Budget {DN~B~ Circular A-I33 Compliance Supplement applicable to each of its major federal programs for the purpose of expressing an opinion on the City of Columbia Heights, Minnesota's compliance with those requirements. 'While our audit provides a reasonable basis for our opinion, it does not provide a legal determination on the City of Columbia Heights, Minnesota's compliance with those requirements. Planned Scope and Timing of the Audit ~Ve performed the audit according to the planned scope identified in our engagement letter and within our anticipated time frame. Significant Audit Results Qualitative Aspects of Accounting Practices Management is responsible for the 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 Columbia Heights, Minnesota are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2007. we noted no transactions entered into by the governmental unit during the year for which there is a lack of authoritative guidance or consensus. There are no significant transactions that have been recognized in the financial statements in a different period than when the transaction occurred. Audit Management Letter Communication With Those Charged With Communication Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the passibility that future events affecting them may differ significantly from those expected. The most sensitive estimate affecting the financial statements was management's estimation on the depreciation of capital assets and the value of land held for resale. We evaluated the key factors and assumptions used to develop the depreciation of capital assets and the value of land held for resale in determining that it is reasonable in relation to the financial statements taken as a whole. The disclosures in the financial statements are neutral, consistent, and clear. Difficulties Encountered in Perfarmin the Audit We encountered no difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Management has not recorded bond discounts in the government-wide financial statements. Management has determined that their efforts are immaterial to the financial statements taken as a whole. Audit Management Letter Gommur~ication With Those Charged Wifh Gommur~ica~r'on Disa reements with Mana ement For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter. Management 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 financial statements or a determination of the type of auditor's opinion that maybe 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. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the governmental unit's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Audit Management Letter Daher Matters OTHER MATTERS During our audit for the year ended December 31, 2007, we noted the following matter: Interfund Loan to TIF Fund Minnesota Statutes require the Interfund loans to TIF funds to be authorized by council resolution. M.S. 4b9.17S, subdivision 7 reads In part as follows: ~'he authority or municiparity may advance or loan more}? to finance expenditures under section 469.176, subdivision 4, from its general fund or any other fund under which it has legal authority to do so. The loan or crdva~zce must be authorized, by resolution of the govenzing body or of the authority, whichever has jurisdiction over the fund from which the advance or loan is made, before money is transferred, advances, or spent, whichever is earliest. The resolutio~i may generally grant to the authority the power to make interfuncl lonns under one or more tax increment financing plans or for one or more districts. The terms and conditions for repayment of the loan must be provided in writing and include, at a minimum, the principal amount, the interest rate, and maximum term. The maximum rate of interest peYrrtitted to be charged is Zimited to the greater of the rates specified under Section 270C.40 or 549.09 as of the date of advance is made, unless written agreement states that the maximum interest rate will fluctuate as the interest rates specified under Section 270C.40 or 549.09 are from time-to-time adjusted. The Council approved the Huset Parkway TIF Interfund loan when it approved the Development agreement. However, the specific terms of the Interfund loan for Huset Parkway TIF was not authorized by council resolution. Audit Management Letter 4~her Matters The following is the status of internal control comments identified during the 2006 audit: Comment Status 2006-1 Inadequate documentation of During 2007, staff completed documentation components of internal control. Although the of internal controls. City has certain controls documented, controls far all areas are not documented. 2046-2 Recreation revenue. Documentation During the 2007 audit process, the auditors is not maintained that provides for verifying met with Finance staff and Recreation staff to the completeness of recreation revenue. develop documentationlreconciliation procedures. Z~06-3 Time deporting -salaried employees. During 2007, all salaried employees, with the Salaried employees do not routinely submit exception of the City Manager, began timesheet 1 exception reports. The danger of submitting reports on use of paid leave for this system is that unintentional errors may each period. occur as a result of employees not submitting an exception report in a period when vacation or sick time is actually used. This information is intended solely for the information and use of management, members of the City Council and others within the City of Columbia Heights, Minnesota and is not intended to be, and should not be, used by anyone other than these specified parties. Audit Management Letter