C Review of 2002 AuditCITYOF
CHANHASSEN
690 City Center Drive
PO Box 147
Chanhassen, Minnesota 55317
Phone
952. 937.1900
General Fax
952.937.5739
Engineering Department Fax
952.937.9152
Building Department Fax
952.934.2524
Web Site
www. ci. c hanhassen, mn. us
TO:
FROM:
DATE:
SUBJECT:
Mayor
City Council
Bruce M. DeJong, Finance Director
July 23, 2003
Review of 2002 Audit
Dave Mol and Melanie Accola of HLB Tautges, Redpath will be present on
Monday evening to discuss the audit results and their findings with the City
Council. The audit went well this year as the Finance Department staff gains
more understanding of how to prepare information for the auditors.
An overview of the financial results show that the city increased fund balances by
$1,621,750 for the year. This includes $311,251 in the general fund and over
$2,069,571 in the enterprise funds (Sewer & Water and Storm Water). However,
the net decrease in the debt service funds was over $3,734,458. This decrease was
anticipated as our tax increment revenues dropped from over $8,000,000 in 2001
to less than $4,200,000 in 2002.
Interfund borrowing continues, especially from the Historic Preservation Trust
Fund to the TIF districts. These loans are generally temporary advances until
revenues are sufficient to pay off all expenses.
The auditors noted that we need to find an ongoing revenue stream for the
Environmental Protection Fund. We have used fund balance to cover operations,
but that money will run out in about three and one half years at the current pace.
Of the ten internal control issues identified in the 2001 audit, staff has
successfully resolved eight. The two remaining items regarding delinquent taxes
and industrial revenue bonds will be addressed this year.
Finally, the report notes that auditing standards and city financial reporting
requirements change for 2003. The annual report formats we have used in the past
will change, but should provide more of a whole enterprise perspective.
Attachments: Comprehensive Annual Financial Report, Audit Management
Letter, Report on Compliance, Report on Internal Control
The City of Chanhassen. A growing communi{y with clean lakes, quali~y schools, a charming downtown, thriving businesses, and beautiful parks. A great place to live, work, and play.