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1 <br />J <br />June 4, 2018 <br />Honorable Mayor, Members of the City Council, <br />and Citizens of Elk River: <br />The Comprehensive Annual Financial Report (CAFR) for the City of Elk River for the fiscal year ended December <br />31, 2017, is hereby submitted. Minnesota State Statutes and the City’s ordinance require an annual audit of the <br />City’s accounts by the State Auditor’s Office or by independent certified public accountants. The firm of <br />CliftonLarsonAllen, LLP was selected to perform the City’s audit and their unmodified opinion has been included in <br />this report. The independent auditors’ report is included in the financial section of this report. <br />This report was prepared by the City’s Finance Department and responsibility for both the completeness and <br />accuracy of this data, as well as the fairness of this presentation including all enclosures, rests with the City. To the <br />best of my knowledge and belief, the enclosed data are accurate in all material respects and are recorded in a manner <br />designed to present fairly the financial position and the results of operations of the various funds of the City. To <br />provide a reasonable basis for making these representations, management of the City has established a <br />comprehensive internal control framework that is designed to both protect the City’s assets from loss, theft, or <br />misuse, and to compile sufficient reliable information for the preparation of these financial statements in accordance <br />with generally accepted accounting principles (GAAP). Internal accounting controls are designed to provide <br />reasonable but not absolute assurance regarding the safeguarding of the City’s assets against loss, theft, or misuse, <br />and ensuring that adequate financial records are maintained for preparing financial statements, and maintaining <br />accountability for assets. The development of an appropriate internal control system requires estimates and <br />judgments by management to ensure that the costs do not exceed the benefits of the system. The City of Elk River’s <br />internal control structure is designed so that the estimated costs of control do not exceed the benefits. <br />Generally accepted accounting principles require that management provide a narrative introduction, overview and <br />analysis to accompany the basic financial statements in the form of a Management’s Discussion and Analysis <br />(MD&A). This letter of transmittal is designed to compliment the MD&A and should be read in conjunction with it. <br />The City of Elk River’s MD&A immediately follows the independent auditors’ report and provides a narrative <br />introduction, overview, and analysis of the basic financial statements. <br />Profile of the Government <br />The City of Elk River was originally incorporated in 1880 and consolidated with Elk River Township in 1978 to <br />form a city of 44 square miles. The City of Elk River is located in Sherburne County and serves as the county seat. <br />Elk River is located approximately halfway between the metropolitan areas of Minneapolis/St. Paul and Saint Cloud <br />along the Mississippi River. The City of Elk River has been growing and will not reach full development in the near <br />future. The current population is approximately 24,650. Urban services are available to about one-third of the land <br />area in the City. <br />The City of Elk River operates under a statutory form of government consisting of a four member City Council and a <br />Mayor who is also a voting member. Council members are elected by ward to a four-year term with two Council <br />seats up for election each even year. The Mayor is also elected to a four-year term. The City Council is responsible <br />for adopting the City’s budget and tax levy, passing resolutions and ordinances, all hiring and firing decisions, policy <br />making, development and growth planning, and overall direction of the City. <br />In addition to providing general government services, the City of Elk River provides a full range of other services <br />including police and fire protection, building and other safety inspections, planning and zoning, economic <br />development, environmental services, parks and recreation, library, street, snow removal, infrastructure maintenance <br />and repair, and others. The City also provides municipal water, sewer, storm water, garbage, and electric services <br />and operates two off-sale liquor stores.