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CITY OF COLUMBIA HEIGHTS, MINNESOTA
AUDIT MANAGEMENT LETTER
December 31, 2020
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55 5th Street East, Suite 1400, St. Paul, MN, 55101 www.redpathcpas.com
To the Honorable Mayor and
Members of the City Council
City of Columbia Heights, Minnesota
We have completed the 2020 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. Other reports included in
the Comprehensive Annual Financial Report are:
Report on Compliance with Minnesota Legal Compliance Audit Guide for Cities
Report on Internal Control over Financial Reporting and on Compliance and Other
Matters Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards
Report on Compliance for Each Major Program and on Internal Control over
Compliance and Report on the Schedule of Expenditures and Federal Awards
Required by the Uniform Guidance
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.
REDPATH AND COMPANY, LTD.
St. Paul, Minnesota
June 14, 2021
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City of Columbia Heights, Minnesota
Audit Management Letter
Report Summary
2
REPORT SUMMARY
Several reports are issued in conjunction with the audit. A brief summary of each report
is as follows:
Report Name Elements of Report Overview
Required Reports
Comprehensive Annual Financial
Report
Financial statements
Footnotes
Supplemental information
Unmodified (“clean”) opinion
on the Basic Financial
Statements
Report on Internal Control over
Financial Reporting and on
Compliance and Other Matters
Results of testing
Internal controls over financial
reporting
Compliance with laws,
regulations, contracts and
grants
No reported findings
State Legal Compliance Report Results of testing certain
provisions of Minnesota
Statutes
No reported findings
Report on Compliance for Each
Major Program and on Internal
Control over Compliance and
Report on the Schedule of
Expenditures and Federal Awards
Required by the Uniform Guidance
Results of testing
Compliance for each major
program
Internal controls over
compliance
Schedule of expenditures of
federal awards
No reported findings
City of Columbia Heights, Minnesota
Audit Management Letter
Summary of Financial Activity
3
SUMMARY OF FINANCIAL ACTIVITY
The financial statement document is very complex and individual fund information is
presented in several different sections of the document. The schedule below is a financial
summary of all governmental funds.
Increase
Interfund (Decrease) in Fund
Transfers Fund Balance
Fund Type Revenues Expenditures (Net) Balance 12/31/2020
General Fund $13,322,000 $12,545,000 ($275,000) $502,000 $8,377,000
Special Revenue Funds 3,739,000 4,171,000 27,000 (405,000) 3,602,000
Debt Service Funds 2,472,000 3,072,000 50,000 (550,000) 2,863,000
Capital Project Funds 3,877,000 3,590,000 574,000 861,000 15,669,000
Total $23,410,000 $23,378,000 $376,000 $408,000 $30,511,000
City of Columbia Heights, Minnesota
Audit Management Letter
General Fund
4
GENERAL FUND
The General Fund of the City is maintained to account for the current operating and
capital outlay expenditures common to all cities. These basic services include (but are not
limited to) public safety, public works, culture and recreation, and general government.
State aids and property taxes account for approximately 85% of the total revenue of the
General Fund. A history of General Fund revenue is as follows:
LGA & MVHC Property Taxes All Other Total
Year Amount Percent Amount Percent Amount Percent Amount Percent
2011 $1,067,990 11% $7,263,658 73% $1,650,362 17% $9,982,010 100%
2012 898,730 9% 7,626,258 75%1,584,537 16% 10,109,525 100%
2013 895,180 9% 8,142,980 79%1,240,267 12% 10,278,427 100%
2014 1,104,176 10% 8,551,642 75%1,744,197 15% 11,400,015 100%
2015 1,191,541 10% 8,781,533 77%1,505,143 13% 11,478,217 100%
2016 475,000 4% 8,751,484 81%1,514,087 14% 10,740,571 100%
2017 475,000 4% 8,981,751 82%1,521,447 14% 10,978,198 100%
2018 475,000 4% 9,601,516 82%1,582,277 14% 11,658,793 100%
2019 453,631 4% 10,156,071 81%1,968,842 16% 12,578,544 100%
2020 450,000 3% 11,274,608 85%1,594,916 12% 13,319,524 100%
General Fund - Sources of Revenue
City of Columbia Heights, Minnesota
Audit Management Letter
General Fund
5
A graph of General Fund revenue by source is as follows:
City of Columbia Heights, Minnesota
Audit Management Letter
General Fund
6
A chart of 2020 expenditures by function is as follows:
City of Columbia Heights, Minnesota
Audit Management Letter
General Fund
7
The fund balance of the General Fund at December 31, 2020 was $8,377,213. During 2020,
the fund balance of the General Fund increased by $501,459 as follows:
Budget Budget
Original Amendments Final Actual Variance
Revenues and transfers in:
Property taxes $10,963,000 $ - $10,963,000 $11,274,608 $311,608
Licenses and permits 348,100 - 348,100 334,596 (13,504)
Intergovernmental 921,500 38,227 959,727 955,096 (4,631)
Charges for services 620,500 - 620,500 447,822 (172,678)
Fines and forfeitures 91,000 - 91,000 101,309 10,309
Investment income 75,000 - 75,000 186,334 111,334
Other 15,400 - 15,400 19,759 4,359
Transfers in 507,000 (10,000) 497,000 497,000 -
Sale of capital assets - - - 2,030 2,030
Total 13,541,500 28,227 13,569,727 13,818,554 248,827
Expenditures and transfers out:
General government 2,394,100 15,598 2,409,698 2,340,486 (69,212)
Public safety 7,281,161 22,630 7,303,791 6,692,165 (611,626)
Public works 1,847,837 - 1,847,837 1,606,427 (241,410)
Parks and recreation 1,905,873 - 1,905,873 1,570,452 (335,421)
Capital outlay 7,000 - 7,000 335,806 328,806
Transfers out 158,000 600,000 758,000 771,759 13,759
Total 13,593,971 638,228 14,232,199 13,317,095 (915,104)
Net change in fund balance ($52,471) ($610,001) ($662,472) $501,459 $1,163,931
City of Columbia Heights, Minnesota
Audit Management Letter
General Fund
8
The City’s General Fund balance has been as follows for the past several years:
Year Ended Increase
December 31, Fund Balance (Decrease)
2011 $5,869,055 $526,816
2012 6,076,909 207,854
2013 6,397,277 320,368
2014 7,373,820 976,543
2015 7,011,902 (361,918)
2016 7,444,227 432,325
2017 7,701,808 257,581
2018 6,839,672 (862,136)
2019 7,875,754 1,036,082
2020 8,377,213 501,459
City of Columbia Heights, Minnesota
Audit Management Letter
General Fund
9
Property taxes and state aids account for approximately 84% of the revenue of the General
Fund. Property taxes and state aids are not 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 working
capital goal. This goal is an amount equal to forty-five percent of the ensuing year’s budgeted
expenditures. A summary of components of the General Fund’s balance is as follows:
Fund Balance Component 2019 2020
Nonspendable - prepayments $137,545 $131,857
Assigned - ensuing year appropriation 52,471 177,389
Unassigned - working capital 6,117,287 6,467,103
Unassigned 1,568,451 1,600,864
Total fund balance - December 31 $7,875,754 $8,377,213
The amount of General Fund balance at December 31, 2020 was sufficient to fulfill the
City’s working capital goal. The working capital is calculated as follows:
2021 budgeted expenditures $14,371,339
Working capital goal percentage x 45%
Working capital goal 6,467,103
Balance available 8,067,967
Amount of fund balance over
working capital goal $1,600,864
City of Columbia Heights, Minnesota
Audit Management Letter
Special Revenue Funds
10
SPECIAL REVENUE FUNDS
The financial statements of the Special Revenue Funds are presented in Statements 19
through 31 of the 2020 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 2020:
Revenue Expenditures Interfund Increase
Fund and Other and Other Transfers (decrease) Fund Balance
Fund No. Sources Uses (Net) in Fund Balance 12/31/2020 Comments
1 Special Revenue:
2 Planning and Inspections Fund 201 $351,058 $402,669 $115,500 $63,889 $417,132
2020 budget was balanced. 2020 license and permit revenue was
more than budget by $25k.
3 Cable Television 225 221,810 115,144 (65,400) 41,266 1,101,638
2020 budget anticpated an decrease of $7.7k. Revenues exceeded
budget by $21k and expenditures were under budget by $28k.
4 Police Forfeiture 265 4,189 - - 4,189 20,948
5 Library 240 1,023,801 994,636 (3,500) 25,665 720,124
2020 budget was balanced. Personal service expenditures were
less than budgeted by $32k.
6 Special Projects 226 142,297 73,489 (10,000) 58,808 823,349
7 After-School Programs 261 1,636 2,895 - (1,259) 104,077
2020 budget anticpated a decrease in fund balance of $22k. 2020
expenditures were less than budget by $40k.
8 Downtown Parking Fund 228 18,300 23,406 10,000 4,894 16,767
9 Contributed Projects - Recreation 881 23,900 7,980 - 15,920 209,895
10 Contributed Projects - Other 883 24,326 24,621 - (295) 221,541
11 Twenty-first Century Arts 262 47,180 47,180 - - 7
12 Anoka County Comm. Dev. Programs 202 36,455 719,840 - (683,385) (616,546) 2020 expenditures relate to the cell tower settlement
13 Public Safety Grant 272 1,590,875 1,590,875 - - - this fund accounted for the CARES funding
14 Housing and Redevelopment Authority:
15 Parkview Villa North and South 203/213 - - - - -
16 EDA:
17 Economic Development Authority Administration 204 253,407 168,334 (19,500) 65,573 583,554
18 Total $3,739,234 $4,171,069 $27,100 ($404,735) $3,602,486
City of Columbia Heights, Minnesota
Audit Management Letter
Debt Service Funds
11
DEBT SERVICE FUNDS
Debt Service Funds are a type of governmental fund used 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 governmental fund debt at December 31, 2020 is as follows:
Fund Debt
Balance at Payable at Source of
Bond Issue 12/31/2020 12/31/2020 Repayment
G.O. Improvement Bonds:
Taxable G.O. Housing Improvement Area Series 2008A (315)$250,105 $345,000 Special assessments (receivable was
$279,904 at 12/31/20)
G.O. Improvement / Revenue Bonds 2013A (345)107,173 85,000 Special assessments
Other General Obligation Bonds:
G.O. Library Bonds of 2015A (346)407,689 5,795,000 Property taxes
G.O. Public Safety Center Bonds of 2017B (347)459,592 7,655,000 Property taxes
G.O. Public Facilities Bonds of 2018A (348)247,630 1,935,000 Property taxes and special assessments
Revenue Bonds:
T.I.F. Revenue Bonds of 2016 (372)802,461 1,935,000
Total $2,274,650 $17,750,000
City of Columbia Heights, Minnesota
Audit Management Letter
Capital Project Funds
12
CAPITAL PROJECT FUNDS
The fund balances of the Capital Project Funds were as follows at December 31, 2020:
Revenue Expenditures Interfund Increase
Fund and Other and Other Transfers (decrease) Fund Balance
Fund No. Sources Uses (Net) in Fund Balance 12/31/2020 Comments
1 Capital Project:
2 MSA State Aid Street 212/402 $259,984 $357,988 $310 ($97,694) $506,793 This fund accounts for the use of MSA monies
3 EDA Redevelopment Project Fund 408 1,887,459 181,876 - 1,705,583 4,199,821
This fund includes a one-time sale of redevelopment property in the
City's downtown area, and includes a special item for $1.6Mil
4 Capital Improvements General Government Buildings 411 771,700 237,223 623,000 1,157,477 6,045,437
2020 revenues are primarily from the allocation of $700K of state aid
revenue (LGA). There was a one time transfer of $600K of surplus from
the general fund to accumulate funds for future building improvement
and replacements.
5 Capital Equipment Replacement General Government 431 124,929 649,025 - (524,096) 2,629,344
2020 expenditures include western star truck ($227k), front-end loader
($107k).
6 Capital Improvements PIR Fund 415 524,522 1,011,940 (49,019) (536,437) 333,455
2020 revenue is primarily special assessments. 2020 expenditures
included Alley construction and street rehab zone 4. The decrease in
fund balance is due to project expenditures exceeding special
assessment collections.
7 Capital Improvement Development 420 102,441 1,906 - 100,535 966,844
8 Capital Improvement Parks 412 134,530 403,850 - (269,320) 110,943
2020 expenditures include boat landing reconstruction at Silver lake
9 Infrastructure Replacement 430 71,000 746,280 - (675,280) 875,999
2020 expenditures included Alley construction and street rehab zone 4
10 Total $3,876,565 $3,590,088 $574,291 $860,768 $15,668,636
City of Columbia Heights,
Minnesota
Audit Management Letter
Enterprise Funds
13
ENTERPRISE FUNDS
Cash Flows
The financial statements include a schedule of Enterprise Funds cash flows. The cash
flow schedule discloses cash generated by operating activities and the use of those cash
flows for debt service and capital asset acquisition.
Below is a summary of Enterprise Fund cash flows:
Storm
Water Sewer Refuse Sewer Liquor Total
Cash flows from operating activities $1,180,446 $187,844 $79,257 $54,764 $278,315 $1,780,626
Cash flows from noncapital financing activities (102,000) (102,000) 9,495 - (86,809) (281,314)
Cash flows from capital activities:
Debt service (88,497) (59,199) - (62,961) (317,892) (528,549)
Purchase of capital assets (1,360,043) (699,459) - (3,849) (17,909) (2,081,260)
Cash flows from investing activities:
Investment income 9,200 11,499 18,000 7,500 15,700 61,899
Net change in cash and investments ($360,894) ($661,315) $106,752 ($4,546) ($128,595) ($1,048,598)
Cash and investments - December 31 $958,232 $569,911 $1,746,270 $502,755 $1,647,609 $5,424,777
City of Columbia Heights,
Minnesota
Audit Management Letter
Enterprise Funds
14
Presented below is a graph of the year-end cash balances of each utility enterprise fund:
As shown above, the year-end cash balances declined from 2016 through 2017,
increased from 2018 through 2019, and declined in 2020. We recommend the City continue
to consider the appropriate amount of the year-end cash balance needed in each fund. The
sharp decrease in water fund and sewer fund cash from 2019 to 2020 is primarily the result
of the acquisition of capital assets in 2020. The sharp increase in water fund cash from 2017
to 2018 is primarily the result of deferring the annual watermain lining program for one
year.
City of Columbia Heights,
Minnesota
Audit Management Letter
Enterprise Funds
15
Municipal Liquor Fund 609A
Comparison With Other Municipal Liquor Stores
The Office of the State Auditor (OSA) annually publishes “An Analysis of Minnesota
Municipal Liquor Store Operations.” The most recent report available is for 2019. The
following analysis compares Columbia Heights’ liquor operations with those reported in the
OSA report.
It 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 volume/lower margin.
The following table shows the top 10 ranked cities in terms of gross sales for the most
recent 6 years available:
2014 2015 2016 2017 2018 2019
1 Lakeville Lakeville Lakeville Lakeville Lakeville Lakeville
2 Edina Edina Edina Edina Edina Edina
3 Eden Prairie Eden Prairie Eden Prairie Richfield Richfield Richfield
4 Richfield Richfield Richfield Eden Prairie Eden Prairie Eden Prairie
5 Apple Valley Apple Valley Apple Valley Apple Valley Apple Valley Apple Valley
6 Columbia Heights Columbia Heights Columbia Heights Columbia Heights Columbia Heights Columbia Heights
7 Elk River Brooklyn Center Elk River Elk River Elk River Elk River
8 Saint Anthony Saint Anthony Detroit Lakes Detroit Lakes Detroit Lakes Detroit Lakes
9 Brooklyn Center Fridley Brooklyn Center Brooklyn Center Brooklyn Center Brooklyn Center
10 Detroit Lakes Farmington Hutchinson Wayzata Wayzata Wayzata
City of Columbia Heights,
Minnesota
Audit Management Letter
Enterprise Funds
16
An analysis of 2020 activity is as follows:
Amount Percent Amount Percent Amount Percent Amount Percent
Operating revenues $4,339,199 100.0% $2,528,214 100.0% $717,970 100.0% $7,585,383 100.0%
Cost of goods sold 3,232,383 74.5% 1,882,071 74.4% 534,871 74.5% 5,649,325 74.5%
Gross margin 1,106,816 25.5% 646,143 25.6% 183,099 25.5% 1,936,058 25.5%
Other operating expenses 832,026 19.2% 650,597 25.7% 172,167 24.0% 1,654,790 21.8%
Net income from operations $274,790 6.3% ($4,454) (0.2%) $10,932 1.5% $281,268 3.7%
2020 TotalHeights LiquorTop Valu IITop Valu
Gross Margin 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 Metro
Sales of Sales Amount Percent Average
(1)
2014 $8,415,371 $6,343,663 $2,071,708 24.6% 25.9%
2015 8,399,943 6,338,891 2,061,052 24.5% 25.3%
2016 8,468,098 6,392,090 2,076,008 24.5% 25.6%
2017 8,422,452 6,289,295 2,133,157 25.3% 26.0%
2018 8,588,576 6,448,223 2,140,353 24.9% 26.5%
2019 8,914,878 6,686,021 2,228,857 25.0% 26.7%
2020 7,585,383 5,649,325 1,936,058 25.5% Not Available
(1)Source: Minnesota Office of the State Auditor - Metropolitan Area Off-Sale Operations
City of Columbia Heights,
Minnesota
Audit Management Letter
Enterprise Funds
17
Operating Expenses
Operating expenses for the past seven years have been as follows:
Percent of Sales
Metro
Year Amount City Average
(1)
2013 $1,490,279 17.7% 16.8%
2014 1,536,982 18.3% 18.6%
2015 1,534,703 18.1% 19.4%
2016 1,686,513 20.0% 20.5%
2017 1,614,158 19.2% 19.9%
2018 1,708,034 19.9% 19.7%
2019 1,725,057 19.4% 20.0%
2020 1,654,790 21.8% Not Available
(1)Source: Minnesota Office of the State Auditor -
Metropolitan Area Off-Sale Operations
Net Income from Operations
Net income for the past seven years is as follows:
Percent of Sales
City Metro
Year Amount City Average
(1)
2013 $679,174 7.7%8.8%
2014 534,726 6.1%7.3%
2015 526,349 6.3%5.9%
2016 389,495 4.6%5.0%
2017 518,999 6.2%5.9%
2018 432,319 5.0%8.8%
2019 503,800 5.7%7.1%
2020 281,268 5.7% Not available
(1)Source: Minnesota Office of the State Auditor -
Metropolitan Area Off-Sale Operations
City of Columbia Heights,
Minnesota
Audit Management Letter
Internal Service Funds
18
INTERNAL SERVICE FUNDS
Internal 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 2020, the City maintained the following Internal Service Funds:
Municipal Employee
Service Information Risk Benefits
Center Systems Management Fund 2020 2019
Assets:
Cash $1,025,495 $541,945 $1,338,534 $1,184,462 $4,090,436 $3,985,753
Other current assets 50,822 44,379 64,561 - 159,762 125,645
Capital assets 949,354 41,549 - - 990,903 1,040,715
Total assets 2,025,671 627,873 1,403,095 1,184,462 5,241,101 5,152,113
Deferred outflows of resources:
Related to pensions - - - 2,660,937 2,660,937 3,719,131
Total assets and deferred outflows $2,025,671 $627,873 $1,403,095 $3,845,399 $7,902,038 $8,871,244
Liabilities, Deferred Inflows, and Net Position
Liabilities:
Current liabilities $42,325 $15,205 $6,813 $ - $64,343 $96,994
Compensated absences payable - - - 1,184,462 1,184,462 1,123,708
Other postemployment benefits payable - - - 1,527,677 1,527,677 1,420,635
Net pension liability/deferred inflows - - - 9,031,244 9,031,244 7,958,096
Total liabilities 42,325 15,205 6,813 11,743,383 11,807,726 10,599,433
Deferred inflows of resources:
Related to pensions - - - 3,271,948 3,271,948 6,006,578
Net position 1,983,346 612,668 1,396,282 (11,169,932) (7,177,636) (7,734,767)
Total liabilities, deferred inflows and net position $2,025,671 $627,873 $1,403,095 $3,845,399 $7,902,038 $8,871,244
Totals
City of Columbia Heights,
Minnesota
Audit Management Letter
Excellence in Financial Reporting
19
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.
City of Columbia Heights,
Minnesota
Audit Management Letter
Communication With Those Charged
With Governance
20
COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE
We have audited the financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of
Columbia Heights, Minnesota (the City) for the year ended December 31, 2020. Professional
standards require that we provide you with information about our responsibilities under
generally accepted auditing standards, Government Auditing Standards, and the Uniform
Guidance, as well as certain information related to the planned scope and timing of our
audit. We have communicated such information in our letter to you dated January 6, 2021.
Professional standards also require that we communicate to you the following information
related to our audit.
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies.
The significant accounting policies used by the City 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 2020. We noted no transactions entered into by the City
during the year for which there is a lack of authoritative guidance or consensus. All
significant transactions have been recognized in the financial statements in the proper
period.
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
City of Columbia Heights,
Minnesota
Audit Management Letter
Communication With Those Charged
With Governance
21
particularly sensitive because of their significance to the financial statements and because
of the possibility that future events affecting them may differ significantly from those
expected. The most sensitive estimates affecting the City’s financial statements was
management’s estimates of the net pension liability, the pension related deferred inflows
and outflows of resources, and the liability reported for OPEB. Estimates related to these
items are based on actuarial studies. We evaluated the key factors and assumptions used
to develop the estimates in determining that they are reasonable in relation to the financial
statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their
significance to financial statement users. Determining sensitivity is subjective, however, we
believe the disclosures most likely to be considered sensitive are Note 10 – Defined Benefit
Pension Plans - Statewide and Note 12 – Post Employment Benefits Other than Pensions
(OPEB).
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing 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 clearly trivial, and communicate them
to the appropriate level of management. We detected one instance of understatement of
City of Columbia Heights,
Minnesota
Audit Management Letter
Communication With Those Charged
With Governance
22
revenue in the Capital Improvements PIR Fund for $93,127, which was a self-correcting
understatement from an overstatement of revenue in 2019. Management has determined
that its effect is immaterial to the financial statements taken as a whole. In addition, none
of the misstatements detected as a result of audit procedures and corrected by
management were material, either individually or in the aggregate, to each opinion unit’s
financial statements taken as a whole.
Disagreements with Management
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 dated June 14, 2021.
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 City’s 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.
City of Columbia Heights,
Minnesota
Audit Management Letter
Communication With Those Charged
With Governance
23
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 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.
Other Matters
We applied certain limited procedures to the management’s discussion and analysis,
budgetary comparison schedule, schedule of changes in the total OPEB liability and related
ratios, schedules of employer’s proportionate share of plan net pension liability and
schedules of pension contributions, which are required supplementary information (RSI)
that supplements the basic financial statements. Our procedures consisted of inquiries of
management regarding the methods of preparing the information and comparing the
information for consistency with management’s responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We did not audit the RSI and do not express an opinion or provide any
assurance on the RSI.
We were engaged to report on the supplementary financial information section, which
accompanies the financial statements but is not RSI. With respect to this supplementary
information, we made certain inquiries of management and evaluated the form, content,
and methods of preparing the information to determine that the information complies with
accounting principles generally accepted in the United States of America, the method of
preparing it has not changed from the prior period, and the information is appropriate and
complete in relation to our audit of the financial statements. We compared and reconciled
City of Columbia Heights,
Minnesota
Audit Management Letter
Communication With Those Charged
With Governance
24
the supplementary information to the underlying accounting records used to prepare the
financial statements or to the financial statements themselves.
We were not engaged to report on the introductory and the other information sections,
which accompany the financial statements but are not RSI. Such information has not been
subjected to the auditing procedures applied in the audit of the basic financial statements,
and accordingly, we do not express an opinion or provide any assurance on it.
Other Reports
Various reports on compliance and internal controls are contained in the Other Required
Reports section of the audited financial statements document.
Restriction on Use
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.
City of Columbia Heights, Minnesota Audit Management Letter Appendix A 25 Revenue Expenditures Interfund Increase (Decrease) in Fund Balance/ CashFund and Other and Other Transfers Fund Balance/ Net Position BalanceFund No. Sources Uses (Net) Net Position 12/31/2020 12/31/20201General101 $13,321,554 $12,545,336 ($274,759) $501,459 $8,377,213 $8,169,0752Special Revenue:3 Planning and Inspections Fund 201 351,058 402,669 115,500 63,889 417,132 425,6174 Anoka County Comm. Dev. Programs 202 36,455 719,840 - (683,385) (616,546) - 5 Cable Television 225 221,810 115,144 (65,400) 41,266 1,101,638 1,048,6936 Special Projects 226 142,297 73,489 (10,000) 58,808 823,349 859,7147 Downtown Parking Fund 228 18,300 23,406 10,000 4,894 16,767 19,9588 Library 240 1,023,801 994,636 (3,500) 25,665 720,124 738,8739 After-School Programs 261 1,636 2,895 - (1,259) 104,07799,08310 Twenty-first Century Arts 262 47,180 47,180 - - 7 - 11 Police Forfeiture 265 4,189 - - 4,189 20,948 31,95612 Public Safety Grant 272 1,590,875 1,590,875 - - - - 13 Contributed Projects - Recreation 881 23,900 7,980 - 15,920 209,895 209,39514 Contributed Projects - Other 883 24,326 24,621 - (295) 221,541 221,04115 Housing and Redevelopment Authority:16 Parkview Villa North and South 203/213 - - - - - - 17 EDA:18 Economic Development Authority Administration 204 253,407 168,334 (19,500) 65,573 583,554 599,05619Debt Service:20 G.O. Housing Improvement Area Bonds 2008A 315 107,796 99,198 - 8,598 250,105 249,70521 G.O. Public Facilities Bonds 2009A 344 - - - - - - 22 G.O. Improvement/Revenue 2013A 345 1,000 50,513 41,572 (7,941) 107,173 106,97323 G.O. Library Bonds 2015A 346 470,608 458,202 - 12,406 407,689 399,79924 G.O. Public Safety Center Bonds 2017B 347 545,943 532,958 - 12,985 459,592 450,14225 G.O. Public Facilities Bonds 2018A 348 199,693 197,266 8,896 11,323 247,630 241,12626 EDA:27 Tax Increment Bonds 376 12,879 5,930 - 6,949 612,199 300,95128 Multi-Use Redevelopment Plan 385 34,706 253,159 37,655 (180,798) - - 29 TIF Transition Block 389 60,783 55,704 - 5,079 76,307 102,95430 TIF 47th and Central Avenue 371 6,200 496,796 (37,655) (528,251) - - 31 TIF Huset Park Area Fund 372 791,317 725,098 - 66,219 802,461 1,009,66832 TIF Central Valu Center Fund 374 - - - - (2,638) - 33 TIF 47th and Grand Fund 375 197,406 190,960 - 6,446 5,404 119,06034 TIF Scattered Site 391 43,906 6,320 - 37,586 (102,656) 100
City of Columbia Heights, Minnesota Audit Management Letter Appendix A 26 Revenue Expenditures Interfund Increase (Decrease) in Fund Balance/ CashFund and Other and Other Transfers Fund Balance/ Net Position BalanceFund No. Sources Uses (Net) Net Position 12/31/2020 12/31/202035Capital Project:36 MSA State Aid Street 212/402 259,984 357,988 310 (97,694) 506,793 482,66637 EDA Redevelopment Project Fund 408 5,879,684 4,174,101 - 1,705,583 4,199,821 3,322,76038 Capital Improvements General Government Buildings 411 771,700 237,223 623,000 1,157,477 6,045,437 6,037,28339 Capital Improvements PIR Fund 415 524,522 1,011,940 (49,019) (536,437) 333,455 395,55240 Capital Improvement Development 420 102,441 1,906 - 100,535 966,844 690,08441 Capital Improvement Parks 412 134,530 403,850 - (269,320) 110,943 137,33942 Infrastructure Replacement 430 71,000 746,280 - (675,280) 875,999 872,49943 Capital Equipment Replacement General Government 431 124,929 649,025 - (524,096) 2,629,344 2,624,34444Enterprise:45 Water 601 3,776,130 2,910,464 (102,000) 763,666 8,196,123 958,23246 Sewer 602 2,253,677 2,154,154 (102,000) (2,477) 4,499,909 569,91147 Refuse 603 2,225,685 1,969,714 (94,200) 161,771 2,291,796 1,746,27048 Storm Sewer 604 531,011 574,953 - (43,942) 2,250,191 502,75549 Liquor 609 7,605,574 7,357,604 (90,900) 157,070 5,375,909 1,647,60950Internal Service:51 Municipal Service Center 701 896,216 899,698 - (3,482) 1,983,346 1,025,49552 Information Systems 720 413,200 444,464 12,000 (19,264) 612,668 541,94553 Risk Management 884 766,227 682,596 - 83,631 1,396,282 1,338,53454 Employee Benefits Fund 890 2,185,058 1,688,812 - 496,246 (11,169,932) 1,184,46255 Total $48,054,593 $46,113,426 $0 $1,941,167 $45,887,748 $39,480,679