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2008 CAFR CITY OF FRIDLEY, MINNESOTA Comprehensive Annual Financial Report For the Fiscal Year Ended December 31, 2008 Prepared by: Finance Department Richard D. Pribyl Finance Director CITY OF FRIDLEY CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2008 TABLE OF CONTENTS EXHIBITPAGE I. INTRODUCTORY SECTION Letter of Transmittal3 Certificate of Achievement for Excellence in Financial Reporting5 Elected and Appointed Officials7 City Administrative Organizational Structure 20088 II. FINANCIAL SECTION Independent Auditor's Report13 Management's Discussion and Analysis15 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net AssetsA-127 Statement of ActivitiesA-228 Fund Financial Statements: Balance Sheet - Governmental FundsA-330 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental FundsA-432 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesA-535 Statement of Net Assets - Proprietary FundsA-636 Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary FundsA-738 Statement of Cash Flows - Proprietary FundsA-840 Statement of Fiduciary Net AssetsA-942 Notes to Financial Statements43 Required Supplementary Information: Budgetary Comparison Schedule - General FundB-180 Budgetary Comparison Schedule - Grant Management FundB-284 Budgetary Comparison Schedule - Note to RSI85 Schedule of Funding Progress - Retiree Health Plan86 Combining and Individual Fund Statements and Schedules: Combining Balance Sheet - Nonmajor Governmental FundsC-194 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental FundsC-295 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2008 TABLE OF CONTENTS EXHIBITPAGE Subcombining Balance Sheet - Nonmajor Special Revenue FundsC-396 Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue FundsC-498 Special Revenue Funds: Cable TV Fund: Comparative Balance SheetD-1100 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-2101 Solid Waste Abatement Fund: Comparative Balance SheetD-3102 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-4103 HRA Reimbursement Fund: Comparative Balance SheetD-5104 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-6105 Drug and Gambling Forfeiture Fund: Comparative Balance SheetD-7106 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-8107 F. C. C. Donations Fund: Comparative Balance SheetD-9108 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-10109 Police Activity Fund: Comparative Balance SheetD-11110 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-12111 Springbrook Nature Center Fund: Comparative Balance SheetD-13112 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-14113 Capital Project Fund: Capital Improvement Fund: Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualE-1116 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2008 TABLE OF CONTENTS EXHIBITPAGE Internal Service Funds: Combining Statement of Net AssetsF-1118 Combining Statement of Revenues, Expenses and Changes in Net AssetsF-2119 Combining Statement of Cash FlowsF-3120 Employee Benefits Fund: Comparative Statement of Net AssetsF-4121 Comparative Statement of Revenues, Expenses and Changes in Net AssetsF-5122 Comparative Statement of Cash FlowsF-6123 Self Insurance Fund: Comparative Statement of Net AssetsF-7124 Comparative Statement of Revenues, Expenses and Changes in Net AssetsF-8125 Comparative Statement of Cash FlowsF-9126 Information Systems Fund: Comparative Statement of Net AssetsF-10127 Comparative Statement of Revenues, Expenses and Changes in Net AssetsF-11128 Comparative Statement of Cash FlowsF-12129 Housing and Redevelopment Authority (Component Unit): Balance Sheet - Governmental FundsG-1132 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental FundsG-2134 Subcombining Balance Sheet - Nonmajor Capital Project FundsG-3136 Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Capital Project FundsG-4138 Agency Funds: Statement of Changes in Assets and LiabilitiesH-1142 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2008 TABLE OF CONTENTS EXHIBITPAGE III. STATISTICAL SECTION (Unaudited) Financial Trends: Net Assets by ComponentTable 1145 Changes in Net AssetsTable 2146 Fund Balances - Governmental FundsTable 3148 Changes in Fund Balances - Governmental FundsTable 4149 Revenue Capacity: Tax Capacity Value and Estimated Market Value of Taxable PropertyTable 5150 Direct and Overlapping Property Tax Capacity RatesTable 6152 Principal Property TaxpayersTable 7154 Debt Capacity: Property Tax Levies and CollectionsTable 8155 Ratios of Outstanding Debt by TypeTable 9156 Direct and Overlapping Govermental Activities DebtTable 10158 Demographic and Economic: Legal Debt Margin InformationTable 11159 Pledged Revenue CoverageTable 12160 Operating Information: Demographic and Economic StatisticsTable 13162 Principal EmployersTable 14163 Full-time-Equivalent City Government Employees by Function/ProgramTable 15164 Operating Indicators by Function/ProgramTable 16166 Capital Asset Statistics by Funciton/ProgramTable 17168 I. INTRODUCTORY SECTION 1 CITY OF FRIDLEY 2 5 CITY OF FRIDLEY 6 CITY OF FRIDLEY, MINNESOTA ELECTED AND APPOINTED OFFICIALS DECEMBER 31, 2008 ELECTED OFFICIALS Term of Office Expires December MayorScott J.Lund2012 Councilmember At LargeRobert L. Barnette2012 Councilmember, Ward IJames T. Saefke2010 Councilmember, Ward IIDolores M. Varichak2010 Councilmember, Ward IIIAnn R. Bolkcom 2010 APPOINTED OFFICIALS City ManagerWilliam W. Burns City AttorneyFrederic W. Knaak Prosecuting AttorneyCarl J. Newquist City ClerkDebra A. Skogen Department Heads: Finance Director/TreasurerRichard D. Pribyl Director of Public Safety and Civil DefenseDonovan W. Abbott Fire ChiefJohn D. Berg Director of Public WorksJames P. Kosluchar Director of Recreation and Natural ResourcesJack G. Kirk Director of Community DevelopmentScott J. Hickok Director of Human ResourcesDeborah K. Dahl 7 CITY ADMINISTRATIVE ORGANIZATIONAL STRUCTURE 2008 City of Fridley Authorized Full-Time "40 Hours A Week" General Fund Positions - 108 CITY MANAGEMENT (3) City Manager Admin Assistant to the City Manager Non-General Fund CABLE TV FUND Cable Administrator FINANCE (22)POLICE (45)HUMAN RESOURCES (2) Finance Director - TreasurerPublic Safety DirectorHuman Resources Director Administrative AssistantAdministrative AssistantAdministrative Assistant (2) Accountants PATROL OPERATIONS (29) ACCOUNTING (4)Captain Assistant Finance Director (6) Sergeants Payroll Coordinator(22) Patrol Officers Accounting Specialist Acctg-Data Processing Clerk TECHNICAL SUPPORT (14) ASSESSING (2)Captain City Assessor Lieutenant Appraiser(7) Detectives Projects Coordinator MIS (2) Crime Prevention Specialist IT Manager Office Supervisor PC Technician(2) Police Technicians (Also 3 at 32 hrs/week) CITY CLERK - RECORDS (2) City ClerkFIRE (9) Licensing & Records Technician Fire Chief Administrative Assistant Assistant Chief Non-General FundFire Marshal LIQUOR (6) (3) Full-time Firefighters Liquor Operations Manager RENTAL INSPECTIONS (2) Assistant Manager (4) Lead Liquor Store Clerks Rental Inspection Asst. Full-time Firefighter WATER ADMIN (2) Utility Billing Clerk Acctg-Data Processing Clerk 8 PUBLIC WORKS (35)PARKS &COMMUNITY RECREATION (8)DEVELOPMENT (9) Public Works Director Parks & Recreation DirectorCommunity Development Administrative Assistant Director Recreation Office Coordinator (2) Program SupervisorsOffice Coordinator ENGINEERING (3) Sr Citizens Program Supervisor Assistant Public Works DirectorBUILDING INSPECTION (3) Chief Building Official (2) Engineering Technician Non-General FundBuilding Inspector PW MAINTENANCE (20)SPRINGBROOK NATURE Permit Technician CENTER (3) Administrative Assistant Nature Center DirectorPLANNING Fleet Services SupervisorPlanning Manager Program Supervisor (2) MechanicProgram Admin Assist Street Supervisor Non-General Fund SOLID WASTE (8) Public Service Worker Environmental Planner Parks Supervisor SECTION 8 HOUSING (6) Public Service Worker Coordinator (.75 FTE) Non-General Fund WATER (5)HRA Water Supervisor Assistant Executive Director (4) Public Service Worker SEWER (5) Sewer Supervisor (4) Public Service Worker 9 CITY OF FRIDLEY 10 II. FINANCIAL SECTION 11 CITY OF FRIDLEY 12 MANAGEMENT’S DISCUSSION AND ANALYSIS As management of the City of Fridley, we offer readers of the City of Fridley’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2008. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 3 and 4 of this report. Financial Highlights The assets of the City of Fridley exceeded its liabilities at the close of the most recent fiscal year by $62,779,980 (Net assets). Of this amount, $26,714,191 (unrestricted net assets) may be used to meet the government’s ongoing obligations to citizens and creditors in accordance with the City's fund designations and fiscal policies. During 2008, the City’s total net assets increased by $905,427. As of the close of the current fiscal year, the City of Fridley’s governmental funds reported combined ending fund balances of $19,634,145. Of this total amount, $13,597,036, or 69% is designated or reserved through legal restrictions and City Council authorization. At the end of the current fiscal year the general fund balance of $4,586,785, which included $48,561 reserved and $4,538,224 designated. The City’s total debt increased by $3,374,334 during the current fiscal year, it went from $15,030,051 to $18,404,385. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of Fridley’s basic financial statements. The City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements . The government-wide financial statements are designed to provide readers with a broad overview of the City of Fridley’s finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of the City of Fridley’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City of Fridley is improving or deteriorating. 15 Managements Discussion and Analysis ’ The statement of activities presents information showing how the City’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City of Fridley that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City of Fridley include general government, public safety, public works, community development, and recreation and naturalist. The business-type activities of the City of Fridley include liquor, water, sewer and storm water. The government-wide financial statements can be found on pages 27 through 29 of this report. Fund financial statements . A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Fridley, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of Fridley can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds . Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financial requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statement. By doing so, readers may better understand the long-term impact of the City's near term financial decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures, and change in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. 16 Managements Discussion and Analysis ’ The City of Fridley maintains six individual major governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the general fund, grant management fund, special assessment debt service fund, tax increment debt service fund, special assessment construction capital projects fund and capital improvements fund all of which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The City of Fridley adopts an annual appropriated budget for its general fund, special revenue funds and capital improvements capital projects fund. A budgetary comparison statement has been provided for those funds to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 30 through 35 of this report. Proprietary funds . The City of Fridley maintains four enterprise funds and three internal service funds as a part of its proprietary fund type. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City of Fridley uses enterprise funds to account for its liquor, water, sewer, and storm water operations. The City of Fridley uses internal service funds to account for its employee benefits, self insurance and information systems. Because these services predominately benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water, sewer, storm water and liquor operations, all of which are considered to be major funds of the City of Fridley. Conversely, the internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements can be found on pages 36 through 41 of this report. Fiduciary funds . Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City of Fridley’s own program. The accounting used for fiduciary funds is much like that used for proprietary funds. 17 Managements Discussion and Analysis ’ The basic fiduciary fund financial statement can be found on page 42 of this report. Notes to the financial statements . The notes provide additional information that is essential to a full understanding of the data provided in the government–wide and fund financial statements. The notes to the financial statements can be found on pages 43 through 78 of this report. Other information. The combining statements referred to earlier in connection with the non-major governmental funds are presented immediately following the required supplementary information on budgetary comparisons. Combining and individual fund statements and schedules can be found on pages 92 through 142 of this report. Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City of Fridley, assets exceeded liabilities by $62,779,980at the close of the most recent fiscal year. The largest portion of the City of Fridley's net assets ($33,872,379 or 46 percent) reflects its investment in capital assets (e.g. land, buildings, machinery and equipment) less any related debt used to acquire those assets that is still outstanding. The City of Fridley uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Fridley's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. CITY OF FRIDLEY'S NET ASSETS Governmental ActivitiesBusiness-TypeTotals 200720082007200820072008 Current and other assets$26,342,042$27,267,273$8,223,336$11,227,712$34,565,378$38,494,985 Capital assets24,310,26525,105,93619,962,14020,376,49144,272,40545,482,427 Total assets$50,652,307$52,373,209$28,185,476$31,604,203$78,837,783$83,977,412 Long-term liabilities outstanding$9,215,138$9,018,580$2,711,055$5,861,623$11,926,193$14,880,203 Other liabilities4,236,1594,825,277800,8781,491,9525,037,0376,317,229 Total liabilities$13,451,297$13,843,857$3,511,933$7,353,575$16,963,230$21,197,432 Net assets: Invested in capital assets, net of related debt$18,245,265$17,490,936$16,951,085$16,381,443$35,196,350$33,872,379 Restricted1,711,2552,193,410 - - 1,711,2552,193,410 Unrestricted17,244,49018,845,0067,722,4587,869,18824,966,94826,714,194 Total net assets$37,201,010$38,529,352$24,673,543$24,250,631$61,874,553$62,779,983 18 Managements Discussion and Analysis ’ A portion of the of the City of Fridley's net assets represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets ($26,714,191) may be used to meet the City's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City of Fridley is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business-type activities. Governmental Activities Governmental activities increased the City of Fridley's net assets by $1,328,342. Capital grants and contributions increased by $1,243,824 due to an increase in street construction activity. Investment earnings decreased by $423,451 because of lower interest rates, and Community development expenses increased by $615,605 because of costs associated with the Northstar Commuter Rail Project. City of Fridley's Changes in Net Assets Governmental ActivitiesBusiness-Type ActivitiesTotals 200720082007200820072008 Revenues: Program revenues: Charges for services$3,265,413$3,312,232$11,096,588$11,664,456$14,362,001$14,976,688 Operating grants and contributions930,593818,805 - - 930,593818,805 Capital grants and contributions834,7482,078,572 - - 834,7482,078,572 General revenues: Property taxes8,986,9249,068,718 - - 8,986,9249,068,718 Grants and contributions not restricted to specific programs3,152,4213,240,081 - - 3,152,4213,240,081 Unrestricted investment earnings1,111,116687,665245,172168,3941,356,288856,059 Gain on sale of property59,438(24,802)1,278 - 60,716(24,802) Other29,238267 - - 29,238267 Total revenues18,369,89119,181,53811,343,03811,832,85029,712,92931,014,388 Expenses: General government4,074,4803,646,436 - - 4,074,4803,646,436 Public safety6,260,8066,774,610 - - 6,260,8066,774,610 Public works4,208,7654,771,748 - - 4,208,7654,771,748 Community development863,8501,479,455 - - 863,8501,479,455 Recreation and naturalist1,312,5021,303,063 - - 1,312,5021,303,063 Interest on long-term debt416,850377,884 - - 416,850377,884 Liquor - - 4,920,5114,937,7764,920,5114,937,776 Water - - 2,279,0342,378,1012,279,0342,378,101 Sewer - - 3,798,0534,065,8993,798,0534,065,899 Storm water - - 381,944373,989381,944373,989 Total expenses 17,137,25318,353,19611,379,54211,755,76528,516,79530,108,961 Increase (decrease) in net assets before transfers1,232,638828,342(36,504)77,0851,196,134905,427 Transfers600,000500,000(600,000)(500,000) - - Change in net assets1,832,6381,328,342(636,504)(422,915)1,196,134905,427 Net assets - January 135,368,37237,201,01025,310,04724,673,54360,678,41961,874,553 Net assets - December 31$37,201,010$38,529,352$24,673,543$24,250,628$61,874,553$62,779,980 19 Managements Discussion and Analysis ’ Below are specific graphs which provide comparisons of the governmental activities revenues and expenses: Governmental Activities -Revenues Unrestricted investment Other earnings Charges for services 0% Grants and contributions not restricted to 4% 17% specific programs 17% Operating grants and contributions Gain on 4% sale of 0% property Capital grants and contributions 11% 47% Property taxes Governmental Activities -Expenses Interest on Recreation long-term debt and naturalist General government Community 2% 7% Developement20% 8% Public works 26% 37% Public safety 20 Managements Discussion and Analysis ’ Business-Type Activities Business-type activities decreased net assets by $422,915. Charges for utility services ($6,388,989) did not keep up with expenses for the utilities ($6,817,989). This is because utility rates are playing catch up for the many years the increase was restricted by the City Charter; this restriction was lifted in November of 2007: Unrestricted investment earnings 1% 99% Charges for services Storm water Water Liquor ` Sewer 21 Managements Discussion and Analysis ’ Financial Analysis of the Government's Funds Governmental Funds . The focus of the City of Fridley’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Fridley’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. At the end of the current fiscal year, the City of Fridley's governmental funds reported combined ending fund balances of $19,634,145. Approximately 90 percent of this amount ($17,718,217) constitutes unreserved fund balance. The remainder of the fund balance ($1,915,928) is reserved because it has already been committed 1) to provide for inventory ($48,561), 2) to pay debt service ($1,564,217), 3) for long-term receivable ($277,560) and 4) for police purposes ($25,590). The General Fund’s fund balance decreased by $685,521 in 2008. This was a little better than the $861,453 decrease originally budgeted for. The key reason for this improvement is expenditures came in under budget for a number of departments. The Special Assessment Debt Service Fund’s fund balance increased by $53,978 due to prepaid special assessments collected on the 2008 Street Reconstruction Project. The Capital Improvements Fund’s fund balance increased by $778,754 in 2008. This was due to an increase in state aid funds for street construction. Proprietary funds . The City of Fridley’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The net assets in the respective proprietary funds are liquor $1,190,312, water $9,394,272, sewer $8,103,647 and storm water $5,562,397. The liquor, water, and sewer funds had decreases in net assets of $157,945, $195,665, and $120,919 respectively, while the storm water fund had an increase in net assets of $51,614. Budgetary Highlights General Fund The original budget was amended to move $384,153 in state aid credits from taxes to intergovernmental revenue. The budget for police expenditures was increased by $28,474 due to their assistance at the Republican National Convention. The original budget for contingency was decreased by $88,295 during the year. This was due to its budget being allocated to budgets in other departments. Expenditures in total were less than the final budgetary estimates by $467,238. Significant variances include the Legal department which expended $46,124 less than anticipated, the 22 Managements Discussion and Analysis ’ Fire department which expended $63,757 less than anticipated, the Building Inspection department which expended $47,006 less than anticipated and the Parks and Recreation department which expended $82,308 less than anticipated. Capital Asset and Debt Administration Capital assets . The City of Fridley’s, investment in capital assets for its governmental and business type activities as of December 31, 2008, amounts to $45,482,427 (net of accumulated depreciation). This investment in capital assets includes land, buildings and structures, improvements other than buildings, machinery and equipment, infrastructure and construction in progress. City of Fridley’s Capital Assets (Net of Depreciation ) Governmental ActivitiesBusiness-Type ActivitiesTotals 200720082007200820072008 Land$2,841,516$2,841,516$306,477$306,477$3,147,993$3,147,993 Buildings and structures2,865,6752,566,3041,904,8541,818,2204,770,5294,384,524 Improvements other than buildings1,092,3381,113,5495,735,3135,430,9676,827,6516,544,516 Machinery and equipment2,378,6542,121,761674,069570,8833,052,7232,692,644 Infrastructure15,028,11616,325,50011,341,42711,232,53326,369,54327,558,033 Construction in progress103,966137,306 - 1,017,411103,9661,154,717 Total capital assets$24,310,265$25,105,936$19,962,140$20,376,491$44,272,405$45,482,427 Additional information on the City of Fridley’s capital assets can be found in Note 4. Long-term debt . At the end of the current fiscal year, the City of Fridley had total bonded debt outstanding of $17,455,000, an increase of $3,265,000 from 2007. $7,615,000 of this is for general obligation improvement debt which is supported by special assessments and a property tax levy, an additional $3,400,000 is for general obligation tax increment debt which financed the City’s housing and redevelopment program, and $6,440,000 is general obligation utility revenue bonds which financed utility improvements. In 2008, the City issued $1,915,000 in general obligation improvement bonds and $3,725,000 in general obligation water revenue bonds. In addition, there is long-term debt in the amount of $952,762 for compensated absences. Additional information on the City of Fridley’s long-term debt can be found in Note 5. 23 Managements Discussion and Analysis ’ City of Fridley’s Outstanding Debt General Obligation Improvement Bonds, General Obligation Tax Increment Bonds, General Obligation Revenue Bonds, and Compensated Absences (excluding bond discounts) are as follows: Governmental ActivitiesBusiness-Type ActivitiesTotals 200720082007200820072008 General Obligation Improvement Bonds6,065,000$ $ 7,615,000$ -$ -$ 6,065,000$ 7,615,000 General Obligation Tax Increment Bonds5,110,000 3,400,000 - - 5,110,000 3,400,000 General Obligation Revenue Bonds - - 3,015,000 6,440,000 3,015,000 6,440,000 Compensated Absences 843,996 952,762 - - 843,996 952,762 Total$ 12,018,996$ 11,967,762$ 3,015,000$ 6,440,000$ 15,033,996$ 18,407,762 The City of Fridley has an Aa2 rating from Moody's Investors Service. State statutes limit the amount of general obligation debt a Minnesota city may issue to 3% of total Estimated Market Value. The current debt limitation for the City of Fridley is $81,041,664. None of the City's outstanding debt is counted within the statutory limitation. Requests for information. This financial report is designed to provide a general overview of the City of Fridley’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Director, 6431 University Avenue NE, Fridley, Minnesota 55432. 24 BASIC FINANCIAL STATEMENTS 25 CITY OF FRIDLEY 26 Exhibit A-1 CITY OF FRIDLEY, MINNESOTA STATEMENT OF NET ASSETS December 31, 2008 Component Unit Primary GovernmentHousing & Redevelopment GovernmentalBusiness-TypeTotalsAuthority ActivitiesActivities2008200720082007 Assets: Cash and investments$23,638,977$5,935,693$29,574,670$29,062,048$13,337,736$16,340,746 Restricted cash and investments - 2,441,5752,441,575 - - - Receivables: Accounts416,7901,951,5992,368,3891,964,72935,82633,474 Taxes291,5212291,523259,377163,326227,435 Special assessments2,102,62114,9222,117,5431,790,311 - Mortgage - - - - 1,081,8531,023,082 Interest - - - 55,5335,7805,822 Loan from component unit277,560 - 277,560348,441 - - Notes - - - 9,182 - - Due from component unit56,932 - 56,93254,418 - - Due from other governments434,3115,683439,99479,389107,860 - Due from primary government - - - - 535,00018,480 Prepaid items - 264,618264,618249,7502,4105,499 Inventories - at cost48,561613,620662,181692,200 - Land held for resale - - - - 4,926,0002,608,738 Capital assets (net of accumulated depreciation): Land2,841,516306,4773,147,9933,147,9932,023,511 - Buildings and structures2,566,3041,818,2204,384,5244,770,529 - - Improvements other than buildings1,113,5495,430,9676,544,5166,827,651 - - Machinery and equipment2,121,761570,8832,692,6443,052,723 - - Infrastructure16,325,50011,232,53327,558,03326,369,543 - - Construction in progress137,3061,017,4111,154,717103,966 - - Total assets52,373,20931,604,20383,977,41278,837,78322,219,30220,263,276 Liabilities: Due to primary government - - - - 56,93254,418 Accounts payable219,362283,378502,740677,8961,233,963381,513 Deposits payable 53,311 - 53,31153,711 - - Contracts payable71,404399,220470,624289,350 - - Due to other governments35,36770,984106,351137,7348,918 - Due to component unit535,000 - 535,00018,480 - - Salaries payable469,51747,801517,318415,517 - - Accrued interest payable165,58191,501257,082220,706 - - Compensated absences payable: Due within one year734,182 - 734,182728,858 - - Due in more than one year218,580 - 218,580115,138 - - Other post employment benefits payable: Due in more than one year189,09924,068213,167 - - - Unearned revenue137,454 - 137,454119,785 - - Loan payable to primary government: Due within one year - - - - 74,47070,882 Due in more than one year - - - - 203,090277,559 Bonds payable: Due within one year2,215,000575,0002,790,0002,375,000 - - Due in more than one year8,800,0005,861,62314,661,62311,811,055 - - Total liabilities13,843,8577,353,57521,197,43216,963,2301,577,373784,372 Net assets: Invested in capital assets, net of related debt17,490,93616,381,44333,872,37935,196,3502,023,511 - Restricted for: Debt service2,167,820 - 2,167,8201,690,977 - - Public safety25,590 - 25,59020,278 - - Tax increment purposes - - - - 1,727,9502,233,653 Unrestricted18,845,0067,869,18526,714,19124,966,94816,890,46817,245,251 Total net assets$38,529,352$24,250,628$62,779,980$61,874,553$20,641,929$19,478,904 The accompanying notes are an integral part of these financial statements. 27 CITY OF FRIDLEY, MINNESOTA STATEMENT OF ACTIVITIES For The Year Ended December 31, 2008 Program Revenues Operating Charges ForGrants and ExpensesServicesContributions Functions/Programs Primary government: Governmental activities: General government$3,646,436$1,600,769$10,770 Public safety6,774,610759,892451,862 Public works4,771,74864,042214,881 Community development1,479,455510,908116,171 Parks, recreation and naturalist1,303,063376,62125,121 Interest on long-term debt377,884 - - Total governmental activities18,353,1963,312,232818,805 Business-type activities: Liquor4,937,7765,275,467 - Water2,378,1012,110,621 - Sewer4,065,8993,873,806 - Storm water373,989404,562 - Total business-type activities11,755,76511,664,4560 Total primary government$30,108,961$14,976,688$818,805 Component unit: Housing and Redevelopment Authority$3,781,235$9,600$ - Total component unit$3,781,235$9,600$0 General revenues: Property taxes Tax increment collections Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain (loss) on sale of property Other Transfers Total general revenues and transfers Change in net assets Net assets - January 1 Net assets - December 31 The accompanying notes are an integral part of these financial statements. 28 Exhibit A-2 Net (Expense) Revenue and Changes in Net AssetsComponent Unit Primary GovernmentHousing & Redevelopment Capital TotalsAuthority Grants andGovernmentalBusiness-Type ContributionsActivitiesActivities2008200720082007 $ - ($2,034,897)$ - ($2,034,897)($2,605,781)$ - $ - - (5,562,856) - (5,562,856)(4,992,260) - - 2,078,572(2,414,253) - (2,414,253)(3,101,034) - - - (852,376) - (852,376)(83,258) - - - (901,321) - (901,321)(907,316) - - - (377,884) - (377,884)(416,850) - - 2,078,572(12,143,587)0(12,143,587)(12,106,499)00 - - 337,691337,691332,399 - - - - (267,480)(267,480)(288,987) - - - - (192,093)(192,093)(336,438) - - - - 30,57330,57310,072 - - 00(91,309)(91,309)(282,954)00 $2,078,572(12,143,587)(91,309)(12,234,896)(12,389,453)$0$0 $535,000($3,236,635)($4,042,967) $535,000(3,236,635)(4,042,967) 9,068,718 - 9,068,7188,986,924368,628373,572 - - - - 3,322,5043,586,097 3,240,081 - 3,240,0813,152,42146,95958,361 687,665168,394856,0591,356,288556,893709,192 (24,802) - (24,802)60,71671,891154,616 267 - 26729,23832,78532,126 500,000(500,000) - - - - 13,471,929(331,606)13,140,32313,585,5874,399,6604,913,964 1,328,342(422,915)905,4271,196,1341,163,025870,997 37,201,01024,673,54361,874,55360,678,41919,478,90418,607,907 $38,529,352$24,250,628$62,779,980$61,874,553$20,641,929$19,478,904 The accompanying notes are an integral part of these financial statements. 29 CITY OF FRIDLEY, MINNESOTA BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2008 Special GrantAssessment General FundManagementDebt Service Assets Cash and investments$4,898,198$127,084$7,834,781 Receivables: Accounts100,083 - - Taxes264,317 -14,182 Special assessments74,954 - 1,925,641 Interest - - - Loan receivable from component unit - -277,560 Developer note - - - Due from other funds39,526 - - Due from component unit46,605 - - Due from other governments30,27115,684 - Inventories, at cost48,561 - - Total assets$5,502,515$142,768$10,052,164 Liabilities and Fund Balances Liabilities: Accounts payable$191,135$2,544$ - Deposits payable53,311 - - Contracts payable3,055 - - Due to other governments28,582 - - Due to component unit - -300,000 Due to other funds - - - Salaries payable359,9862,770 - Deferred revenue279,661137,4541,933,876 Total liabilities915,730142,7682,233,876 Fund balances: Reserved for: Inventory48,561 - - Long-term receivables - -277,560 Public safety - - - Debt service - - 1,564,217 Unreserved: Designated reported in: General Fund4,538,224 - - Special Revenue Funds - - - Capital Project Funds - - - Undesignated reported in: Special Revenue Funds - - - Debt Service Funds - - 5,976,511 Capital Project Funds - - - Total fund balances4,586,78507,818,288 Total liabilities and fund balances$5,502,515$142,768$10,052,164 The accompanying notes are an integral part of these financial statements. 30 Exhibit A- 3 Special AssessmentOther Tax Increment ConstructionCapitalGovernmentalIntra-Activity Debt ServiceCapital ProjectsImprovementsFundsEliminations Totals Governmental Funds 20082007 $ - $135,389$5,530,039$1,232,661$ - $19,758,152$19,835,962 - - - 81,707 - 181,790145,112 - - 3,2209,802 - 291,521259,296 - 102,026 - - - 2,102,6211,772,865 - - - - - - 55,533 - - - - - 277,560348,441 - - - - - - 9,182 - - - - (39,526) - - - - - 10,058 -56,66354,149 - - 353,20635,150 - 434,31175,437 - - - - - 48,56156,346 $0$237,415$5,886,465$1,369,378($39,526)$23,151,179$22,612,323 $ -$83$ - $25,199$ - $218,961$317,730 - - - - - 53,31153,711 -68,349 - - - 71,404289,350 -6,359 -426 -35,36770,598 - - - - - 300,00018,480 - - - 39,526(39,526) - - - - - 11,910 - 374,666293,578 - 102,0262,5077,801 - 2,463,3252,098,831 0176,8172,50784,862(39,526)3,517,0343,142,278 - - - - - 48,56156,346 - - - - - 277,560357,623 - - - 25,590 -25,59020,726 - - - - - 1,564,2171,214,519 - - - - - 4,538,2245,206,778 - - - 1,258,926 - 1,258,9261,192,896 - - 5,883,958 - - 5,883,9585,105,204 - - - - - - (3,756) - - - - - 5,976,5116,201,350 -60,598 - - - 60,598118,359 060,5985,883,9581,284,516019,634,14519,470,045 $0$237,415$5,886,465$1,369,378($39,526)$23,151,179$22,612,323 Fund balance reported above$19,634,145$19,470,045 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources, and therefore, are not reported in the funds.24,891,22424,055,564 Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds.2,325,8711,979,046 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds.(11,369,680)(11,351,176) Internal service funds are used by management to charge the cost of certain activities to individual funds. The assets and liabilities are included in the governmental statement of net assets.3,047,7923,047,531 Net assets of governmental activities$38,529,352$37,201,010 The accompanying notes are an integral part of these financial statements. 31 CITY OF FRIDLEY, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For The Year Ended December 31, 2008 Special GrantAssessment ManagementDebt Service General Fund Revenues: Taxes$8,140,643$ - $518,649 Special assessments23,170 -561,221 Licenses and permits725,794 - - Intergovernmental revenue1,387,799110,76521,747 Charges for services1,636,350 - - Fines and forfeits287,776 - - Investment income151,883 -204,676 Interest on loan - -16,547 Miscellaneous: Other197,2093,308 - Received from component unit - - - Total revenues12,550,624114,0731,322,840 Expenditures: Current: General government2,711,656 - - Public safety6,295,741 - - Public works3,161,630 - - Community development774,960114,073300,000 Parks, recreation and naturalist858,850 - - Debt service - -596,676 Capital outlay243,849 - - Total expenditures14,046,686114,073896,676 Excess (deficiency) of revenues over (under) expenditures(1,496,062)0426,164 Other financing sources (uses): Bonds issued - - - Proceeds from sale of capital assets13,101 - - Transfers in817,440 - - Transfers out(20,000) - (372,186) Total other financing sources (uses)810,5410(372,186) Net change in fund balance(685,521)053,978 Fund balance - January 15,272,306 - 7,764,310 Fund balance - December 31$4,586,785$0$7,818,288 The accompanying notes are an integral part of these financial statements. 32 Exhibit A-4 Special AssessmentOther Tax Increment ConstructionCapitalGovernmentalIntra-Activity Debt ServiceCapital ProjectsImprovementsFundsEliminationsTotals Governmental Funds 20082007 $ - $ - $99,236$294,191$ - $9,052,719$8,927,963 -5,399 - - - 589,790635,817 - - - 220,491 - 946,2851,080,787 - - 1,162,09360,577 - 2,742,9811,872,643 -37,641 - 341,805 - 2,015,7961,830,416 - - - 28,870 - 316,646298,359 -2,353168,76132,956 - 560,629920,850 - - - - - 16,54719,962 - - - 160,294 - 360,811418,371 1,859,465 - - - - 1,859,4651,869,938 1,859,46545,3931,430,0901,139,184018,461,66917,875,106 -15,8832,984607,705 - 3,338,2283,893,952 - - - 28,169 - 6,323,9105,999,557 - 244,838 - - - 3,406,4683,025,157 - - - - - 1,189,033861,872 - - 113,499393,805 - 1,366,1541,194,290 1,859,465 - 7,338 - - 2,463,4792,226,996 - 2,349,72752,40738,955 - 2,684,9383,114,203 1,859,4652,610,448176,2281,068,634020,772,21020,316,027 0(2,565,055)1,253,86270,5500(2,310,541)(2,440,921) - - 1,915,000 - - 1,915,0001,910,000 - - - - - 13,10158,313 - 2,981,569102,55425,000(3,380,023)546,540600,000 - (474,275)(2,492,662)(20,900)3,380,023 - - 02,507,294(475,108)4,10002,474,6412,568,313 0(57,761)778,75474,6500164,100127,392 - 118,3595,105,2041,209,866 - 19,470,04519,342,653 $0$60,598$5,883,958$1,284,516$0$19,634,145$19,470,045 The accompanying notes are an integral part of these financial statements. 33 CITY OF FRIDLEY 34 Exhibit A-5 CITY OF FRIDLEY, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For The Year Ended December 31, 2008 20082007 Amounts reported for governmental activities in the statement of activities (Exhibit A-2) are different because: Net changes in fund balances - total governmental funds (Exhibit A-4)$164,100$127,392 Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period.835,6601,435,868 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds.346,825192,534 The issuance of long-term debt (e.g., bonds, leases) provides current resources to governmental funds, while the repayment of the principal of financial long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. This amount is the net effect of these differences in the treatment of long-term debt and related items.160,000(85,000) Internal service funds are used by management to charge the cost of certain activities to individual funds. This amount is net revenue attributable to governmental activities.261176,698 Other post employment benefits in the statement of activities does not require the use of current financial resources and, therefore, is not reported as expenditures in governmental funds.(189,099) - Accrued interest reported in the statement of activities does not require the use of current financial resources and, therefore, is not reported as expenditures in governmental funds.10,595(14,854) Change in net assets of governmental activities (Exhibit A-2)$1,328,342$1,832,638 The accompanying notes are an integral part of these financial statements. 35 CITY OF FRIDLEY, MINNESOTA STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 31, 2008 Business-Type Activities - Enterprise Funds Assets:LiquorWater Current assets: Cash and cash equivalents$410,473$2,237,982 Restricted cash and cash equivalents - 2,441,575 Accounts receivable129865,359 Taxes receivable: Delinquent - - Special assessments receivable - 5,223 Due from component units - - Due from other governments - - Inventories, at cost598,66614,954 Prepaid items - - Total current assets1,009,268 5,565,093 Noncurrent assets: Capital assets: Land151,946154,531 Buildings and structures130,2113,124,015 Improvements other than buildings650,2456,447,871 Machinery and equipment208,9301,560,537 Infrastructure - 8,853,416 Construction in progress - 1,017,411 Total capital assets1,141,332 21,157,781 Less: Allowance for depreciation(666,403)(10,292,328) Net capital assets474,92910,865,453 Total noncurrent assets474,92910,865,453 Total assets1,484,19716,430,546 Liabilities: Current liabilities: Accounts payable221,73958,731 Accrued interest payable - 91,501 Contracts payable - 399,220 Due to other governments47,63723,347 Due to component unit - - Salaries payable17,40517,100 Payroll deductions payable - - Compensated absences payable - - Bonds payable - current - 575,000 Total current liabilities286,781 1,164,899 Noncurrent liabilities: Other post employment benefits7,1049,752 Compensated absences - noncurrent - - Bonds payable - noncurrent - 5,861,623 Total noncurrent liabilities7,104 5,871,375 Total liabilities293,8857,036,274 Net assets: Invested in capital assets, net of related debt474,9296,870,405 Unrestricted715,3832,523,867 Total net assets$1,190,312$9,394,272 The accompanying notes are an integral part of these financial statements. 36 Exhibit A-6 Governmental Activities - Business-Type Activities - Enterprise Funds Internal Service Funds SewerStorm WaterTotals 20082007 $2,516,231$771,007$5,935,693$5,496,636$3,880,825 - -2,441,575 - - 976,382109,7291,951,5991,819,617235,000 -2281 - -9,69914,92217,446 - - - - -269 5,683 -5,6833,952 - - -613,620635,854 - 264,618 -264,618249,750 - 3,762,914 890,437 11,227,712 8,223,336 4,116,094 - -306,477306,477 - 8,770 -3,262,9963,246,401 - 2,246,3681,872,81811,217,30211,118,291 - 941,500 -2,710,9672,797,9151,404,562 6,732,6177,074,18522,660,21822,262,777 - - -1,017,411 - - 9,929,255 8,947,003 41,175,371 39,731,861 1,404,562 (5,565,448)(4,274,701)(20,798,880)(19,769,721)(1,189,850) 4,363,8074,672,30220,376,49119,962,140214,712 4,363,8074,672,30220,376,49119,962,140214,712 8,126,7215,562,73931,604,20328,185,4764,330,806 2,566342283,378355,229401 - -91,50144,530 - - -399,220 - - - -70,98467,136 - - - - -235,000 13,296 -47,80133,983 - - - - -94,851 - - - -734,182 - -575,000300,000 - 15,862 342 1,467,884 800,878 1,064,434 7,212 -24,068 - - - - - -218,580 - -5,861,6232,711,055 - 7,212 0 5,885,691 2,711,055 218,580 23,0743427,353,5753,511,9331,283,014 4,363,8074,672,30216,381,44316,951,085214,712 3,739,840890,0957,869,1857,722,4582,833,080 $8,103,647$5,562,397$24,250,628$24,673,543$3,047,792 The accompanying notes are an integral part of these financial statements. 37 CITY OF FRIDLEY, MINNESOT A STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS For The Year Ended December 31, 2008 Business-Type Activities - Enterprise Funds LiquorWater Sales$5,275,467$ - Cost of sales(4,017,891) - Gross profit1,257,5760 Operating revenues: Customer billings - 2,102,441 Charges for services - 7,578 Other revenues - 637 Total operating revenues0 2,110,656 Total gross profit and operating revenues1,257,576 2,110,656 Operating expenses: Personal services543,621745,653 Supplies and other charges: Disposal charges - - Other326,025823,056 Depreciation50,274622,707 Total operating expenses919,920 2,191,416 Operating income (loss)337,656 (80,760) Nonoperating revenues (expenses): Intergovernmental revenue - - Investment income4,39971,780 Bond issuance costs - (37,204) Insurance reimbursement - - Payment to component unit - - Interest expense - (149,481) Special assessments - - Gain (loss) on disposal of capital assets - - Total nonoperating revenues (expenses)4,399 (114,905) Income (loss) before transfers342,055 (195,665) Transfers: Transfers out(500,000) - Change in net assets(157,945)(195,665) Net assets - January 1 1,348,2579,589,937 Net assets - December 31$1,190,312$9,394,272 The accompanying notes are an integral part of these financial statements. 38 Exhibit A-7 Governmental Activities - Business-Type Activities - Enterprise Funds Internal Service Funds SewerStorm WaterTotals 20082007 $ -$ -$5,275,467$5,252,910$ - - -(4,017,891)(4,000,159) - 001,257,5761,252,7510 3,873,806403,7376,379,9845,832,904 - - -7,5787,578252,597 - -6371,972 - 3,873,806 403,737 6,388,199 5,842,454 252,597 3,873,806 403,737 7,645,775 7,095,205 252,597 622,186109,6002,021,0601,905,496130,773 3,013,046 -3,013,0462,732,51196,468 120,87751,9791,321,9371,441,826 - 309,790212,4101,195,1811,191,091141,375 4,065,899 373,989 7,551,224 7,270,924 368,616 (192,093)29,748 94,551 (175,719)(116,019) - - - -10,770 71,17421,041168,394245,172110,580 - -(37,204) - - - - - -276,496 - - - -(235,000) - -(149,481)(108,459) - -8258251,224 - - - -1,278(26) 71,174 21,866 (17,466)139,215 162,820 (120,919)51,614 77,085 (36,504)46,801 - -(500,000)(600,000)(46,540) (120,919)51,614 (422,915)(636,504)261 8,224,5665,510,78324,673,54325,310,0473,047,531 $8,103,647$5,562,397$24,250,628$24,673,543$3,047,792 The accompanying notes are an integral part of these financial statements. 39 CITY OF FRIDLEY, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For The Year Ended December 31, 2008 Business-Type Activities - Enterprise Funds LiquorWater Cash flows from operating activities: Receipts from customers and users$5,275,658$1,983,240 Receipts from interfund services provided(4,367,978) - Payment to suppliers -(807,894) Payment to employees(531,265)(731,394) Net cash flows from operating activities376,415443,952 Cash flows from noncapital financing activities: Transfers out(500,000) - Special assessment collections -(473) Net cash flows from noncapital financing activities(500,000)(473) Cash flows from capital and related financing activities: Acquisition of capital assets -(874,076) Intergovernmental - - Insurance reimbursement - - Principal paid on revenue bonds -(300,000) Proceeds from sale of bonds -3,725,000 Interest and paying agent fees on revenue bonds -(139,146) Proceeds from sale of capital assets - - Net cash flows from capital and related financing activities02,411,778 Cash flows from investing activities: Investment income4,39971,780 Net increase (decrease) in cash and cash equivalents(119,186)2,927,037 Cash and cash equivalents - January 1529,6591,752,520 Cash and cash equivalents - December 31$410,473$4,679,557 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) $337,656($80,760) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation50,274622,707 Changes in assets and liabilities: Decrease (increase) in receivables191(127,416) Decrease (increase) in prepaid items - Decrease (increase) in inventories23,787(1,553) Increase (decrease) in payables(35,493)30,974 Total adjustments38,759524,712 Net cash provided by operating activities$376,415$443,952 Noncash capital and related financing activities: Acquisition of capital assets on account$0$399,220 The accompanying notes are an integral part of these financial statements. 40 Exhibit A-8 Governmental Activities - Business-Type Activities - Enterprise Funds Internal Service Funds SewerStorm WaterTotals 20082007 $3,874,622$398,243$11,531,763$10,870,861$ - (1,731) -(4,369,709)(3,952)252,597 (3,165,607)(72,032)(4,045,533)(8,351,926)(101,004) (610,915)(109,600)(1,983,174)(1,897,810)(15,112) 96,369216,6111,133,347617,173136,481 - -(500,000)(600,000)(46,540) -3,8223,3496,792 - 03,822(496,651)(593,208)(46,540) (244,986)(91,250)(1,210,312)(383,064)(101,386) - - - -10,770 - - - -41,496 - -(300,000)(405,000) - - -3,725,000 -(26) - -(139,146)(113,346) - - - -1,278 - (244,986)(91,250)2,075,542(900,132)(49,146) 71,17421,041168,394245,172110,580 (77,443)150,2242,880,632(630,995)151,375 2,593,674620,7835,496,6366,127,6313,729,450 $2,516,231$771,007$8,377,268 $5,496,636 $3,880,825 ($192,093)$29,748$94,551($175,719)($116,019) 309,790212,4101,195,1811,191,091141,375 (915)(5,494)(133,634)(228,455) - (14,868) -(14,868)(23,443) - - -22,234113,039 - (5,545)(20,053)(30,117)(259,340)111,125 288,462186,8631,038,796 792,892 252,500 $96,369$216,611$1,133,347$617,173$136,481 $0$0$399,220$0$0 The accompanying notes are an integral part of these financial statements. 41 Exhibit A-9 CITY OF FRIDLEY, MINNESOTA STATEMENT OF FIDUCIARY NET ASSETS December 31, 2008 20082007 Assets: Cash and investments$32,393$31,607 Receivables: Accounts2,1482,098 Taxes: Unremitted5234 Delinquent170163 Total assets$34,763$33,902 Liabilities: Due to other governments$34,763$33,902 The accompanying notes are an integral part of these financial statements. 42 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 1. Summary of Significant Accounting Policies The City of Fridley, Minnesota was incorporated July 1, 1949, under Chapter 410.03 of the Statutes of the State of Minnesota providing for a council-manager form of government under the “Home Rule Charter City” concept. The City provides the following services as authorized by its charter: general administrative services, public safety (police and fire), public improvements, planning and zoning, and culture and recreation. The financial statements of the City of Fridley, Minnesota have been prepared in conformity with generally accepted accounting principles as applied to governmental units by the Governmental Accounting Standards Board (GASB). The following is a summary of the significant accounting policies. A. Financial Reporting Entity As required by generally accepted accounting principles, the financial statements of the reporting entity include those of the City of Fridley, Minnesota (the primary government) and its component units. The component units discussed below are included in the City's reporting entity because of the significance of their operational or financial relationships with the City. Component Units In conformity with generally accepted accounting principles, the financial statements of the component units have been included in the financial reporting entity as discretely presented component units. Discretely Presented Component Unit - The Fridley Housing and Redevelopment Authority (HRA) is governed by commissioners appointed by the Fridley City Council. The HRA is responsible for providing housing and redevelopment assistance to the City and its residents. Funding for the various programs administered by the HRA is provided through the issuance of tax increment revenue bonds and general obligation tax increment bonds guaranteed by the City. Separate financial statements are not prepared for the HRA. B.Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements.Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or business-type activity is offset by program revenues.Direct expenses are those that are clearly identifiable with a specific function or business-type activity.Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or business-type activity and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or business-type activity. Taxes and other items not included among program revenues are reported instead as general revenues. 43 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the Proprietary Fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers all revenues, except reimbursement grants, to be available if they are collected within 60 days of the end of the current fiscal period. Reimbursement grants are considered available if they are collected within one year of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, special assessments, intergovernmental revenues, charges for services and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government. The government reports the following major governmental funds: The general fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Thegrant management special revenue fund administers grants received from a variety of intergovernmental agencies. In most cases, grant funds are provided on a reimbursement basis following proper documentation of expenditures, however, in some cases the money is provided in advance to spend on specific activities outlined in the grant. Thespecial assessment debt service fund services debt on the general obligation improvement bonds that were issued to finance construction of public improvements. Special assessment improvements are paid for completely or in part by property owners deemed to have benefited from such improvements. Thetax increment debt service fund services the debt of the tax increment bonds. Tax increment money is used to service the debt on redevelopment related bonds. 44 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 Thespecial assessment construction capital projects fund is used to account for the construction of public improvements, such as residential streets, sidewalks, and storm sewers or for the provision of services that are to be paid primarily by the benefited property owner. Thecapital improvements fund is used to account for the monies received from property taxes that are used to finance major improvements and the acquisition of assets that require a large capital outlay. The government reports the following major proprietary funds: Theliquor fund accounts for operations of the municipal liquor stores. Thewater fund accounts for the water service charges which are used to finance the water system operating expenses. Thesewer fund accounts for the sewer service charges which are used to finance the sanitary sewer system operating expenses. Thestorm water fund accounts for storm sewer charges which are used to finance the storm sewer operating expenses. Additionally, the government reports the following fund types: Internal Service Funds are used to account for employee fringe benefits, insurance deductibles and maintenance and upgrading of information systems that are provided on a cost reimbursement or fee basis to departments or agencies within the City. These funds are essential for segregating costs for determining the total cost of providing a service and for assuring that the goods and services provided are properly utilized. Agency Funds are used to account for monies on behalf of the Six Cities Watershed District and the North Metro Convention and Tourism Bureau. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary-fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private-sector guidance. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are transactions that would be treated as revenues, expenditures or expenses if they involved external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City of Fridley. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. 45 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operatingrevenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the liquor, water, sewer and storm water enterprise funds are charges to customers for sales and services.Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for an allowable use, it is the government’s policy to use restricted resources first, then unrestricted resources as they are needed. D. Budgets The City Charter grants the City Council full authority over the financial affairs of the City. The City Manager is charged with the responsibility of preparing the estimates of the annual budget and the enforcement of the provisions of the budget as specified in the City Charter. Upon adoption of the annual budget resolution by the Council, it becomes the formal appropriation budget for City operations. All budget adjustments must be approved by the Council. Budgets for the General, Special Revenue and Capital Improvement Capital Projects Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Budgeted expenditure appropriations lapse at year end. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the appropriation, is not employed by the City because it is, at present, not considered necessary to assure effective budgetary control or to facilitate effective cash management. E. Legal Compliance Budgets The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is legally enacted through passage of a resolution. 46 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 4. The City Council may authorize transfer of budgeted amounts between departments within any fund. 5. Reported budget amounts are as originally adopted or as amended by Council approved transfers. The City Charter limits appropriations to the total estimated revenues and fund balances. If actual revenues exceed the original estimates, appropriations may be increased by the Council up to the amount of revenue increases. 6. All budget amounts lapse at the end of the year to the extent they have not been expended or encumbered. Encumbrances are reappropriated into the following year’s budget. 7. Annual budgets are legally adopted for the General Fund and Special Revenue Funds. Formal budgeting integration is employed as a management control device during the year for each of these funds. Formal budgetary integration is not employed for Debt Service Funds because effective budgetary control is achieved through the bond indenture provisions. Budgetary control for other Capital Projects Funds is accomplished through the use of project controls. 8. As required by the City Charter, budgetary control is maintained within department at the level of three major categories of expenditures: salaries and wages; ordinary expenses; and capital outlay. This is the level of control at which expenditures may not legally exceed appropriations. 9. The General Fund budget includes prior year encumbrances which were reappropriated to the current year. Expenditures for the items encumbered are included in the current year’s expenditures. F. Cash and Investments Cash balances from all funds are combined and invested to the extent available in certificates of deposit, U.S. government securities and other securities authorized by State Statute. Investment income is allocated to the respective funds on the basis of applicable cash balance participation by each fund. Investments are stated at fair value, based upon quoted market prices as of the balance sheet date. Investment income is accrued at the balance sheet date. The City provides temporary advances to funds that have insufficient cash balances by means of an advance from another fund shown as interfund receivables in the advancing fund, and an interfund payable in the fund with the deficit, until adequate resources are received. These interfund balances are eliminated on the government-wide financial statements. For purposes of the statement of cash flows the City considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. All of the cash and investments allocated to the proprietary funds have original maturities of 90 days or less. Therefore the entire balance in the Proprietary Funds is considered cash equivalents. Restricted cash balances relate to unspent bond proceeds. 47 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 G. Receivables and Payables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. Short-term interfund loans are classified as “interfund receivables/payables.” All short-term interfund receivables and payables at December 31, 2008 are planned to be eliminated in 2009. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” Uncollectible property taxes and special assessments are not material and therefore have not been reported. Because utility bills are considered liens on property, no estimated uncollectible amounts are established. Uncollectible amounts are not material for other receivables and have not been reported. H. Property Tax Revenue Recognition The City Council annually adopts a tax levy and certifies it to the County in December (levy/assessment date) of each year for collection in the following year. The County is responsible for billing and collecting all property taxes for itself, the City, the local School District and other taxing authorities. Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. Real property taxes are payable (by property owners) on May 15 and October 15 of each calendar year. Personal property taxes are payable by taxpayers on February 28 and June 30 of each year. These taxes are collected by the County and remitted to the City on or before July 7 and December 2 of the same year. Delinquent collections for November and December are received the following January. The City has no ability to enforce payment of property taxes by property owners. The County possesses this authority. Government-Wide Financial Statements The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible property taxes are not material and have not been reported. Governmental Fund Financial Statements The City recognizes property tax revenue when it becomes both measurable and available to finance expenditures of the current period. In practice, current and delinquent taxes and State credits received by the City in July, December and January are recognized as revenue for the current year. Taxes collected by the County by December 31 (remitted to the City the following January) and taxes and credits not received at year end are classified as delinquent and due from County taxes receivable. The portion of delinquent taxes not collected by the City in January is fully offset by deferred revenue because they are not available to finance current expenditures. I. Market Value Homestead Credit Property taxes on residential agricultural homestead property (as defined by State Statutes) are partially reduced by market value homestead credit (MVHC). This credit is paid to the City by the State in lieu of taxes levied against homestead property. The State remits this credit through installments each year. The credit is recognized as revenue by the City at the time of collection. 48 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 J. Special Assessment Revenue Recognition Special assessments are levied against the benefited properties for the assessable costs of special assessment improvement projects in accordance with State Statutes. The City usually adopts the assessment rolls when the individual projects are complete or substantially complete. The assessments are collectible over a term of years generally consistent with the term of years of the related bond issue. Collection of annual installments is handled by the County in the same manner as property taxes. Property owners are allowed to prepay future installments without interest or prepayment penalties. Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale. Proceeds of sales from tax forfeit properties are remitted to the City in payment of delinquent special assessments. Pursuant to State Statutes, a property shall be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or seasonal recreational land in which event the property is subject to such sale after five years. Government-Wide Financial Statements The City recognizes special assessment revenue in the period that the assessment roll was adopted by the City Council. Uncollectible special assessments are not material and have not been reported. Governmental Fund Financial Statements Revenue from special assessments is recognized by the City when it becomes measurable and available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by the City are recognized as revenue for the current year. Special assessments that are collected by the County by December 31 (remitted to the City the following January) are also recognized as revenue for the current year. All remaining delinquent, deferred and special deferred assessments receivable in governmental funds are completely offset by deferred revenues. K. Inventories Governmental Funds Inventories of the general fund are stated at cost, which approximates market, using the first-in, first out (FIFO) method. The primary government does not maintain material amounts of inventory within the other governmental funds. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Proprietary Funds Liquor fund inventories are valued on the average cost basis. Other proprietary funds inventory items are expensed at the time they are sold or used (consumption method). 49 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 L. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. M. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business- type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 (with the exception of computer equipment) (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. In the case of the initial capitalization of general infrastructure assets (i.e., those reported by governmental activities) the government chose to include all such items regardless of their acquisition date or amount. The City was able to estimate the historical cost for the initial reporting of these assets through back-trending (i.e., estimating the current replacement cost of the infrastructure to be capitalized and using an appropriate price-level index to deflate the cost of the infrastructure to be capitalized and using an appropriate price-level index to deflate the cost to the acquisition year or estimated acquisition year). The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. For the year ended December 31, 2008, no interest was capitalized in connection with construction in progress. Property, plant and equipment of the primary government, and the component units, are depreciated using the straight line method over the following estimated useful lives: Assets Improvements other than building 20 – 25 years Buildings and structures 20 – 25 years Machinery and equipment 5 – 10 years Infrastructure 25 years 50 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 N. Compensated Absences All liabilities for compensated absences, both current and long-term, for annual leave, severance and separation pay are accounted for in the Employee Benefit Fund, an Internal Service Fund. Each year compensated absence expenditures and expenses are recorded in the Governmental and Proprietary Funds respectively, equivalent to the full amount accrued by fund employees during the year. These charges are offset by a corresponding transfer of assets from the home department funds to the Employee Benefit Fund to fund the liability. This liability represents the maximum possible dilution of Employee Benefit Fund assets by retirements or extended leaves by employees. The personnel ordinance limits the annual accumulation of benefits that can be accumulated from year-to-year. O. Long-Term Obligations In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are generally immaterial and are expensed in the year of bond issuance.Material premiums and discounts are deferred and amortized over the life of the bonds. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. P. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts not appropriable for expenditure or legally segregated for a specific future use. Designated fund balances represent tentative plans for future use of financial resources. Q. Interfund Transactions Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. Interfund loans are reported as an interfund loan receivable or payable which offsets the movement of cash between funds. All other interfund transactions are reported as transfers. 51 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 R. Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires management to make estimates that affect amounts reported in the financial statements during the reporting period. Actual results could differ from such estimates. S. Reconciliation of Government-Wide and Fund Financial Statements 1. Explanation of certain differences between the governmental fund balance sheet and the government-wide statement of net assets The governmental fund balance sheet includes reconciliation between fund balance – total governmental funds and net assets – governmental activities as reported in the government- wide statement of net assets. One element of that reconciliation explains that “long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds.” The details of this $11,369,680 difference are as follows: Bonds payable$11,015,000 Accrued interest payable165,581 Other post employment benefits payable189,099 Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities$11,369,680 2. Explanation of certain differences between the governmental fund statement of revenues, expenditures and changes in fund balances and the government-wide statement of activities The governmental fund statement of revenues, expenditures and changes in fund balances includes reconciliation between net changes in fund balances – total governmental funds and changes in net assets of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that “governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.” The details of this $835,660 difference are as follows: Loss on disposal of capital assets($36,759) Capital outlay2,675,687 Depreciation expense(1,803,268) Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities$835,660 52 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 Another element of that reconciliation states that “revenues on the statement of activities that do not provide current financial resources are not reported as revenues in the funds.” The details of this $346,825 difference are as follows: General property taxes deferred revenue: At December 31, 2007($209,659) At December 31, 2008225,658 Special assessments deferred revenue: At December 31, 2007(1,769,387) At December 31, 20082,100,213 Net adjustments to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities$346,825 Another element of that reconciliation states that “the issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal on long-term debt consumes the current financial resources of governmental funds.” Neither transaction, however, has any effect on net assets. The details of this $160,000 difference are as follows: Debt issued: Improvement bonds($1,915,000) Principal repayments: G.O. Improvement bonds365,000 Tax increment bonds1,710,000 Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities$160,000 T. Reclassifications Certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year’s presentation. 53 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 2. Deposits and Investments A.Deposits In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized by the City Council, all of which are members of the Federal Reserve System. Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds. Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City Treasurer or in a financial institution other than that furnishing the collateral. Authorized collateral includes the following: a) United States government treasury bills, treasury notes, treasury bonds; b) Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service available to the government entity; c) General obligation securities of any state or local government with taxing powers which is rated “A” or better by a national bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated “AA” or better by a national bond rating service; d) Unrated general obligation securities of a local government with taxing powers may be pledged as collateral against funds deposited by that same local government entity: e) Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence that the bank’s public debt is rated “AA” or better by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation; and f) Time deposits that are fully insured by any Federal agency. Custodial credit risk is the risk that in the event of a bank Custodial Credit Risk – Deposits: failure, the City’s deposits may not be returned to it. State Statutes require that insurance, surety bonds or collateral protect all City deposits. The market value of collateral pledged must equal 110% of deposits not covered by insurance or bonds. As of December 31, 2008, the bank balance of the City’s deposits was covered by federal depository insurance or covered by collateral pledged and held in the City’s name. B. Investments Minnesota Statutes authorize the City to invest in the following: a) Direct obligations or obligations guaranteed by the United States or its agencies, its instrumentalities or organizations created by an act of congress, excluding mortgage-backed securities defined as high risk. 54 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities described in (a) above, general obligation tax-exempt securities, or repurchase or reverse repurchase agreements. c) Obligations of the State of Minnesota or any of its municipalities as follows: 1) any security which is a general obligation of any state or local government with taxing powers which is rated “A” or better by a national bond rating service; 2) any security which is a revenue obligation of any state or local government with taxing powers which is rated “AA” or better by a national bond rating service; and 3) a general obligation of the Minnesota housing finance agency which is a moral obligation of the State of Minnesota and is rated “A” or better by a national bond rating agency. d) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System. e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. f) Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000; a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York; certain Minnesota securities broker-dealers; or, a bank qualified as a depositor. g) General obligation temporary bonds of the same governmental entity issued under section 429.091, subdivision 7; 469.178, subdivision 5; or 475.61, subdivision 6. As of December 31, 2008 the City had the following investments and maturities: Investment Maturities (in Years) FairLessOver Investment TypeRatingValueThan 11-56-1010 Years Federal Home Loan BankAAA$2,994,000$2,994,000$ - $ - $ - Money marketN/A28,197,27928,197,279 - - - Total$31,191,279$31,191,279$0$0$0 Total investments$31,191,279 Deposits852,809 Petty cash4,550 Total cash and investments$32,048,638 55 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 As of December 31, 2008 the HRA had the following investments and maturities: Investment Maturities (in Years) FairLessOver Investment TypeRatingValueThan 11-56-1010 Years United States Treasury BondAAA$205,042$ - $ - $205,042$ - FHLB Discount NoteAAA2,994,0002,994,000 - - - Money marketN/A10,034,41310,034,413 - - - Total$13,233,455$13,028,413$0$205,042$0 Total investments$13,233,455 Deposits104,281 Total cash and investments$13,337,736 C. Investment Risks The City’s investment policy is to follow Minnesota State Statutes as described above which reduces the City’s exposure to credit, custodial credit, and interest rate risks. Specific risk information for the City is as follows: Custodial credit risk - investments – For investments in securities, custodial credit risk is the risk that in the event of a failure of the counterparty, the City will not be able to recover the value of its investments that are in the possession of an outside party. As of December 31, 2008, all investments of the City were insured, registered and held by the City or its agent in the City’s name. Investments in mutual funds are not evidenced by securities that exist in physical or book forms and therefore, are not subject to custodial credit risk. Interest rate risk – The City’s investment policy requires the City to diversify its investment portfolio to eliminate the risk of loss resulting from over concentration of assets in a specific maturity. The policy also states the City’s investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated. Credit risk – State law limits investments in commercial paper to the top rating issued by at least two of the nationally recognized statistical rating organizations. State law also limits investments in money market funds to those that meet the conditions of SEC rule 2a-7 and rated in one of the two highest rating categories by at least one NRSRO. The City invests in a First American Treasury Obligation Fund money market fund which is managed pursuant to the requirements of Rule 2a-7 and seeks to maintain a one dollar share price. As of December 31, 2008, the City’s investments in the FHLB notes were all rated AAA by Standard and Poor’s. Concentration of credit risk – The City places no limit on the amount the City may invest in any one issuer. More than 5% of the City’s investments are in various holdings as follows: Federal Home Loan Bank 10% Money market: Federal Government Obligation Fund 65% Federated Government Prime Obligations Fund 15% First American Treasury Obligation Fund 10% 56 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 Concentration of credit risk – The HRA places no limit on the amount the HRA may invest in any one issuer. More than 5% of the HRA’s investments are in various holdings as follows: Federal Home Loan Mortgage 23% Money market – Federated Prime Obligation Fund 76% 3. Receivables Significant receivables balances not expected to be collected within one year of December 31, 2008 are as follows: Primary Government Major Funds Special Special AssessmentCapital AssessmentNonmajor GeneralDebt ServiceImprovementsCapital ProjectsFundsTotal Special assessments receivable$56,645$1,455,434$ - $77,103$ - $1,589,182 Loans receivable - 203,090 - - - 203,090 Delinquent property taxes73,163 - 896 - 6,64180,700 $129,808$1,658,524$896$77,103$6,641$1,872,972 HRA Component Unit Major Funds RevolvingNorthCenter LoanAreaCityTotal Mortgage receivable$917,496$35,653$ - $953,149 Allowance for uncollectible accounts(55,458) - - (55,458) Delinquent tax increment - 79,97017,44097,410 $862,038$115,623$17,440$995,101 57 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows: UnavailableUnearnedTotal Delinquent property taxes receivable (General Fund)$204,707$ - $204,707 Delinquent property taxes receivable (Capital Improvements Fund)2,507 - 2,507 Delinquent property taxes receivable (Special Assessment Debt Service Fund)10,642 - 10,642 Delinquent property taxes receivable (Nonmajor Funds)7,801 - 7,801 Special assessments not yet due (General Fund)74,954 - 74,954 Special assessments not yet due (Special Assessment Construction Fund)102,026 - 102,026 Special assessments not yet due (Special Assessment Debt Service Fund)1,923,234 - 1,923,234 Unearned grant funds (Grant Management Fund) - 137,454137,454 Total deferred/unearned revenue for governmental funds$2,325,871$137,454$2,463,325 4. Capital Assets Capital asset activity for the year ended December 31, 2008 was as follows: BeginningEnding Primary Government BalanceIncreasesDecreasesBalance Governmental activities: Capital assets, not being depreciated: Land$2,841,516$ - $ - $2,841,516 Construction in progress103,96633,340 - 137,306 Total capital assets, not being depreciated2,945,48233,34002,978,822 Capital assets, being depreciated: Buildings and structures7,924,991 - (16,595)7,908,396 Machinery and equipment8,235,137376,776(105,770)8,506,143 Improvements4,347,565213,835(150,538)4,410,862 Infrastructure31,528,9882,153,148(579,262)33,102,874 Total capital assets, being depreciated52,036,6812,743,759(852,165)53,928,275 Less accumulated depreciation for: Buildings and structures5,059,316299,371(16,595)5,342,092 Machinery and equipment5,856,483696,587(168,688)6,384,382 Improvements3,255,227190,855(148,769)3,297,313 Infrastructure16,500,872855,764(579,262)16,777,374 Total accumulated depreciation30,671,8982,042,577(913,314)31,801,161 Total capital assets being depreciated - net21,364,783701,18261,14922,127,114 Governmental activities capital assets - net$24,310,265$734,522$61,149$25,105,936 58 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 BeginningEnding Primary Government BalanceIncreasesDecreasesBalance Business-type activities: Capital assets, not being depreciated: Land$306,477$ - $ - $306,477 Construction in progress - 1,017,411 - 1,017,411 Total capital assets, not being depreciated306,477001,323,888 Capital assets, being depreciated: Buildings and structures3,246,40116,595 - 3,262,996 Improvements other than buildings11,118,291146,436(47,425)11,217,302 Machinery and equipment2,797,91558,373(145,321)2,710,967 Infrastructure22,262,777397,441 - 22,660,218 Total capital assets, being depreciated39,425,384618,845(192,746)39,851,483 Less accumulated depreciation for: Buildings and structures1,341,547103,229 - 1,444,776 Improvements other than buildings5,382,978444,382(41,025)5,786,335 Machinery and equipment2,123,846157,830(141,592)2,140,084 Infrastructure10,921,350506,335 - 11,427,685 Total accumulated depreciation19,769,7211,211,776(182,617)20,798,880 Total capital assets being depreciated - net19,655,663(592,931)(10,129)19,052,603 Business-type activities capital assets - net$19,962,140($592,931)($10,129)$20,376,491 Component unit: Capital assets, not being depreciated: Land$0$2,023,511$0$2,023,511 59 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government$172,954 Public safety269,195 Public works, including depreciation of general infrastructure assets1,247,046 Community development - Recreation and naturalist114,072 Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets141,375 Total depreciation expense - governmental activities$1,944,642 Business-type activities: Liquor$50,274 Water622,707 Sewer309,790 Storm water212,410 Total increases in accumulated depreciation$1,195,181 60 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 5. Long-Term Debt The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. The reporting entity’s long-term debt is segregated between the amounts to be repaid from governmental activities and amounts to be repaid from business-type activities. As of December 31, 2008, the governmental long-term bonded debt and loans of the financial reporting entity consisted of the following: Governmental Activities: $1,915,000 General Obligation Improvement Bonds, Series 2008A due in varying annual installments of $165,000 - $225,000 through February 1, 2019 interest at 2.95% - 4.0%.$1,915,000 $1,910,000 General Obligation Improvement Bonds, Series 2007A due in varying annual installments of $155,000 - $230,000 through August 1, 2018 interest at 3.5% - 3.85%.1,910,000 $3,920,000 General Obligation Tax Increment Refunding Bonds of 2004 due in varying annual installments of $230,000 - $605,000 through February 1, 2012; interest at 2.00% - 4.35% February 1, 2012; interest at 5.10% - 5.65%.2,240,000 $1,805,000 General Obligation Improvement Bonds of 2005 due in varying annual installments of $155,000 - $210,000 through February 1, 2016; interest at 2.80% - 3.750%.1,490,000 $4,645,000 General Obligation Tax Increment Refunding Bonds of 2005 due in varying annual installments of $1,090,000 - $1,160,000 through February 1, 2009; interest at 8.00%.1,160,000 $2,505,000 General Obligation Improvement Bonds of 2006 due in varying annual installments of $205,000 - $305,000 through February 1, 2017; interest at 4.00%.2,300,000 Subtotal governmental activities11,015,000 Business-Type Activities: $1,180,000 General Obligation Water Revenue Bonds of 1998, due in varying annual installments of $90,000 - $130,000 through February 1, 2011.$375,000 $1,790,000 General Obligation Water Revenue Bonds of 2004 due in varying annual installments of $50,000 - $230,000 through February 1, 2019; interest at 2.5% - 4.00%.1,740,000 $1,205,000 General Obligation Water and Storm Water Revenue Bonds of 2004 due in varying annual installments of $160,000 - $235,000 through February 1, 2012; interest at 2.0% - 3.25%.600,000 $3,725,000 General Obligation Water Revenue Bonds of 2008B due in varying annual installments of $240,000 - $315,000 through February 1, 2023; interest at 2.95% - 4.50%.3,725,000 Unamortized discount(3,377) Subtotal business-type activities6,436,623 Total primary government$17,451,623 Component Units: $1,500,000 loan payable to primary government interest at 5%. The HRA issued a check payable to the City on January 26, 2009 to pay off the balance of this loan.$277,560 61 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 Annual debt service requirements to maturity for general obligation bonds and loans are as follows: Primary GovernmentComponent Unit Governmental ActivitiesBusiness-Type ActivitiesHRA Year EndingG.O. ImprovementTax IncrementRevenue BondsLoan Payable December 31,PrincipalInterestPrincipalInterestPrincipalInterestPrincipalInterest 2009$535,000$270,005$1,680,000$96,495$575,000$220,300$74,470$12,959 2010725,000252,899545,00059,906515,000212,39178,2409,188 2011745,000227,051570,00038,003535,000194,33482,2015,227 2012780,000199,803605,00013,159555,000175,86442,6491,066 2013810,000170,963 - - 390,000160,239 - - 2014840,000140,085 - - 410,000146,034 - - 2015870,000107,315 - - 420,000130,510 - - 2016910,00072,890 - - 440,000114,085 - - 2017730,00040,835 - - 450,00096,841 - - 2018445,00017,728 - - 475,00078,598 - - 2019225,0004,500 - - 495,00059,198 - - 2020 - - - - 275,00043,660 - - 2021 - - - - 290,00032,005 - - 2022 - - - - 300,00019,688 - - 2023 - - - - 315,0006,694 - - Total$7,615,000$1,504,072$3,400,000$207,563$6,440,000$1,690,438$277,560$28,440 Long-term liability activity for the year ended December 31, 2008, was as follows: BeginningEndingDue Within BalanceAdditionsReductionsBalanceOne Year Governmental activities: Bonds payable: G.O. improvement bonds$6,065,000$1,915,000($365,000)$7,615,000$535,000 Tax increment bonds5,110,000 - (1,710,000)3,400,0001,680,000 Total bonds payable11,175,0001,915,000(2,075,000)11,015,0002,215,000 Compensated absences843,996868,949(760,183)952,762734,182 Total government activity long-term debt$12,018,996$2,783,949($2,835,183)$11,967,762$2,949,182 Business-type activities: Bonds payable: G.O. revenue bonds$3,015,000$3,725,000($300,000)$6,440,000$575,000 Component units: Loan payable$348,441$ - ($70,881)$277,560$74,470 Compensated absences are generally liquidated by the General Fund. The loan payable is liquidated by the HRA Revolving Loan Fund. All long-term bonded indebtedness outstanding at December 31, 2008 is backed by the full faith and credit of the City, including improvement and revenue bond issues. Delinquent assessments receivable at December 31, 2008 totaled $131,536. 62 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 Revenues Pledged Revenue PledgedCurrent Year Percent ofDebt servicePrincipalPledged Use oftotalas a % ofTerm ofRemainingand InterestRevenue Bond IssueProceedsTypedebt servicenet revenuesPledgePrincipalpaidreceived 2008AStreet ImprovementsProperty Taxes and100%2008-$1,915,000$ - $194,002 Special Assessments2019 2007AStreet ImprovementsProperty Taxes and100%2007-$1,910,000$81,062215,201 Special Assessments2018 2006AStreet ImprovementsProperty Taxes and100%2007-2,300,000301,100268,415 Special Assessments2017 2005AStreet ImprovementsProperty Taxes and100%2006-1,490,000213,163241,084 Special Assessments2016 Refunded bonds of 1997A 2005Binitial project was for Tax Increment100%2006-1,160,0001,262,9501,262,950 redevelopment2009 Refunded bonds of 1998B 2004initial project was for Tax Increment100%2005-2,240,000596,065596,065 land acquisition2012 2004 Water Revenue BondsInfrastructure improvementsWater Customer100%6.41%2004-375,000135,2512,110,656 Net Revenue2019 2004 Water & Storm RevenueInfrastructure improvementsWater and Storm 100%4.47%2004-1,740,000112,5102,514,393 BondsCustomer Net Revenue2012 1998A Water Revenue BondsInfrastructure improvementsWater Customer100%7.30%1998-600,000154,1812,110,656 Net Revenue2011 2008B Water Revenue BondsInfrastructure improvementsWater Customer100%0.00%2008-3,725,000 - 2,110,656 Net Revenue2023 6. Defined Benefit Pension Plans-Statewide A. Plan Description All full-time and certain part-time employees of the City of Fridley are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) and the Public Employees Police and Fire Fund (PEPFF) which are cost-sharing, multiple-employer retirement plans. These plans are established and administered in accordance with Minnesota Statute, Chapters 353 and 356. PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership by statute are covered by the PEPFF. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by State Statute, and vest after three years of credited service. The defined retirement benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. 63 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 PERA issues a publicly available financial report that includes financial statements and required supplementary information for PERF and PEPFF. That report may be obtained on the web at mnpera.org, by writing to PERA at 60 Empire Drive #200, St. Paul, Minnesota, 55103-2088 or by calling (651)296-7460 or 1-800-652-9026. B. Funding Policy Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. PERF Basic Plan members and Coordinated Plan members were required to contribute 9.10% and 6%, respectively, of their annual covered salary. PEPFF members were required to contribute 8.6% of their annual covered salary in 2008. That rate will increase to 9.4% in 2009. The City of Fridley, Minnesota is required to contribute the following percentages of annual covered payroll: 11.78% for Basic Plan PERF members, 6.5% for Coordinated Plan PERF members, and 12.9% for PEPFF members. Employer contribution rates for the Coordinated Plan and PEPFF will increase to 6.75% and 14.1% respectively, effective January 1, 2009. The City’s contributions for the years ending December 31, 2008, 2007 and 2006 equal to the contractually required contributions for each year as set by state statute for PERF and PEPFF as follows: PERFPEPFF 2006$283,926$321,681 2007315,035371,932 2008346,545434,512 C. Public Employees Retirement Association (PERA) - Defined Contribution Plan Description All council members of the City of Fridley are covered by a defined contribution pension plan administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Defined Contribution Plan (PEDCP) which is a multiple- employer deferred compensation plan. Benefit Provisions and Contribution Rates The PEDCP is a tax qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal. Plan benefits depend solely on amounts contributed to the plan plus investment income, less administrative expenses. Minnesota Statutes, Chapter 353D.03, specifies the employee and employer contribution rates for those qualified personnel who elect to participate. An eligible elected official who decides to participate contributes 5 percent of salary which is matched by the elected official's employer. For ambulance service personnel, employer contributions are determined by the employer, and for salaried employees must be a fixed percentage of salary. Employer contributions for volunteer personnel may be a unit value for each call or period of alert duty. Employees who are paid for their services may elect to make member contributions in an amount not to exceed the employer share. Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts of the Minnesota 64 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 Supplemental Investment Fund. For administering the plan, PERA receives 2 percent of employer contributions and four-tenths of one percent of the assets in each member's account. Total contributions made by the City during fiscal year 2008 were: Percentage of AmountCovered PayrollRequired EmployeesEmployerEmployeesEmployerRates PEDCP$2,044$2,0445.00%5.00%5.00% 7. Defined Contribution Pension Plan - Fridley Volunteer Firefighters Relief Association Plan Description The Fridley Volunteer Firefighters Relief Association (Association), is a single employer public employee retirement system that acts as a common investment administrator for all of the City’s firefighters. Pursuant to a 1987 amendment to its by-laws, the pension plan is a defined contribution plan, prior to 1987 the pension plan was a defined benefit pension plan. Benefits and contribution requirements are established by Association’s by-laws and can be amended by the Association’s Board of Trustees with approval from the City of Fridley, Minnesota. All provisions are within limitations established by Minnesota Statutes. Type of Benefit The exclusive pension provided by the Association is a “Defined Contribution Lump Sum Service Pension,” as defined in Minnesota Statutes §424A.02, Subdivision 4. Contribution Made The City collected and remitted $121,925 and $144,649 in State Aid to the Association for 2008 and 2007, respectively. During 2008 and as of December 31, 2008, the Association held no securities issued by the City or other related parties. 65 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 8. Other Post-Employment Benefits In 2008, the City prospectively implemented the requirement of a new accounting pronouncement, GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions. A. Plan Description In addition to providing the pension benefits described in Note 6, the City provides post- employment health care benefits (as defined in paragraph B) for retired employees and police and firefighters disabled in the line of duty, through a single-employer defined benefit plan. The termPlan refers to the City’s requirement by State Statute to provide retirees with access to health insurance. The OPEB plan is administered by the City. The authority to provide these benefits is established in Minnesota Statutes Sections 471.61 Subd. 2a, and 299A.465. The benefits, benefit levels, employee contributions and employer contributions are governed by the City and can be amended by the City through its personnel manual and collective bargaining agreements with employee groups. The Plan is not accounted for as a trust fund, an irrevocable trust has not been established to account for the Plan. The Plan does not issue a separate report. B. Benefits Provided Retirees The City is required by State Statute to allow retirees to continue participation in the City’s group health insurance plan if the individual terminates service with the City through service retirement or disability retirement. Covered spouses may continue coverage after the retiree’s death. The surviving spouse of an active employee may continue coverage in the group health insurance plan after the employee’s death. All health care coverage is provided through the City’s group health insurance plans. The retiree is required to pay 100% of their premium cost for the City-sponsored group health insurance plan in which they participate. The premium is a blended rate determined on the entire active and retiree population. Since the projected claims costs for retirees exceed the blended premium paid by retirees, the retirees are receiving an implicit rate subsidy (benefit). The coverage levels are the same as those afforded to active employees. Upon a retiree reaching age 65 years of age, Medicare becomes the primary insurer. The monthly retiree premiums effective January 1, 2008 were: SingleMarried Plan 1 (medical and dental)$496$1,429 Plan 2 (medical and dental)5371,548 Plan 3 (medical and dental)4011,155 66 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 C. Participants As of the actuarial valuation dated July 2008, participants consisted of: Retired participants and beneficiaries currently receiving benefits9 Active employees85 Total94 Participating employers1 D. Funding Policy The additional cost of using a blended rate for actives and retirees is currently funded on a pay- as-you-go basis. The City Council may change the funding policy at any time. E. Annual OPEB Costs and Net OPEB Obligation The City’s annual other post employment benefit (OPEB) cost is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45.The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The net OPEB obligation as of December 31, 2008, was calculated as follows: Annual required contribution (ARC)$264,648 Interest on net OPEB obligation - Annual OPEB cost264,648 Contributions made during the year(51,481) Increase in net OPEB obligation213,167 Net OPEB obligation - beginning of year - Net OPEB obligation - end of year$213,167 67 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 The City first had an actuarial valuation performed for the Plan as of January 1, 2008 to determine the funded status of the Plan as of that date as well as the employer’s annual required contribution (ARC) for the fiscal year ended December 31, 2008. The City’s annual OPEB cost (expense) of $264,648 was equal to the ARC for the fiscal year, as the transition liability was set at zero as of December 31, 2007. The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan and the net OPEB obligation for 2008 was as follows: Percentage of Fiscal YearAnnual OPEBEmployer Annual OPEB CostNet OPEB EndedCostContributionsContributedObligation December 31, 2008$264,648$51,48119.4%$213,167 F. Funded Status and Funding Progress The City currently has no assets that have been irrevocably deposited in a trust for future health benefits; therefore, the actuarial value of assets is zero. The funded status of the Plan was as follows: Unfunded ActuarialActuarialUAAL as a ActuarialActuarialAccruedAccruedFundedCoveredPercentage of ValuationValue of AssetsLiability (AAL)*Liability (UAAL)RatioPayrollCovered Payrol Date(a)(b)(b-a)(a/b)(c) ( (b-a) / c) January 1, 2008$ - $1,910,670$1,910,6700.0%$9,303,57620.5% *Using the entry age normal actuarial pay cost method. Note, the first OPEB actuarial valuation was conducted as of January 1, 2008. There is no data available prior to the first valuation. G. Actuarial Methods and Assumptions Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality and the health care cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions (ARC) of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to financial statements, presents multi-year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions 68 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 used include techniques that are designed to reduce the effect of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the January 1, 2008 actuarial valuation, the Projected Unit Credit Actuarial cost method was used. The actuarial assumptions included a 4.0% investment rate of return (net of administrative expenses) and an initial annual health care cost trend rate of 10% reduced by 0.5% each year to arrive at an ultimate health care cost trend rate of 5.0%. The actuarial value of assets was $0. The plan’s unfunded actuarial accrued liability is being amortized using the level percentage of projected payroll method over 30 years on a closed basis. The remaining amortization period at December 31, 2008, was 29 years. 9. Interfund Receivables, Payables and Transfers Interfund payables and receivables are representative of lending/borrowing arrangements to cover deficit cash balances at the end of the fiscal year. Interfund receivables and payables of the City are as follows: InterfundInterfund ReceivablesPayables Due From/Due To: Major Funds: General Fund$39,526$ - Nonmajor Governmental Funds: Special Revenue Funds: HRA Reimbursement Fund - 10,058 Solid Waste Abatement Fund - 29,468 $39,526$39,526 69 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 Interfund receivables and payables of the HRA component unit at December 31, 2008 are as follows: InterfundInterfund ReceivablesPayables Due From/Due To: General Fund$3,675,825$ - Capital Projects Funds: Lake Pointe - 785,303 Gateway East - 824,653 Gateway West - 1,519,109 University / Osborne - 107,000 57th Avenue Redevelopment - 128,760 McGlynn Bakeries - 104,000 Satellite Lane Apts. - 162,000 Tax Increment District #19 - 45,000 $3,675,825$3,675,825 The above balances are not expected to be eliminated within one year of December 31, 2008. Interfund Transfers: Transfer InTransfer Out Governmental Funds: Major Funds: General Fund$817,440$20,000 Special Assessment Debt Service - 372,186 Capital Improvements102,5542,492,662 Special Assessment Construction Capital Projects2,981,569474,275 Nonmajor Funds25,00020,900 Total governmental funds3,926,5633,380,023 Proprietary Funds: Liquor - 500,000 Internal Service Funds: Self Insurance Fund - 46,540 Total$3,926,563$3,926,563 Interfund transfers allow the City to allocate financial resources to the funds that receive benefit from services provided by another fund. Most of the City’s interfund transfers fall under that category. 70 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 10. Reserved Fund Balances The following reservations have been made of various fund balances of the primary government at December 31, 2008: General Fund: Reserved for: Inventory$48,561 Special Revenue Funds: Reserved for police activity25,590 Debt Service Funds: Reserved for long-term receivable277,560 Reserved for debt service1,564,217 Total Debt Service Funds1,841,777 Total Governmental Funds$1,915,928 The HRA component unit had reserved fund balances at December 31, 2008: Reserved for: Debt service$3,400,000 Mortgage receivable1,137,311 $4,537,311 71 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 11. Designated Fund Balance The following designations have been made of various fund balances at December 31, 2008: General Fund: Working capital$4,538,224 Special Revenue Funds: Cable TV Fund: Cable TV operations1,088,373 Solid Waste Abatement fund: Recycling operations2,790 Drug and Gambling Forfeiture Fund: Drug and gambling enforcement20,343 Spring Brook Nature Fund: Nature Center61,350 F.C.C. Donations: Fridley community center86,070 Total Special Revenue Funds1,258,926 Capital Projects Funds: Capital Improvements Fund: Future improvements5,883,958 Total of designated fund balances$11,681,108 72 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 12. Tax Increment Districts The HRA is the administering authority for the following Tax Increment Districts: FiscalRetained YearTax Capacity ValuesDisparityBy EstablishedDistrictDistrict NameCurrentOriginalCapturedAdjustmentsAuthority 19791Center City$779,861$119,311$660,550$ - $660,550 19812Moore Lake1,905,20833,6901,871,518 - 1,871,518 19823North Area931,22490,170841,054 - 841,054 19856Lake Pointe78,58083,780(5,200) - (5,200) 19867Winfield437,7783,582434,196 - 434,196 19899Onan/Old Central Avenue80,40442,64637,758 - 37,758 199211University/Osborne83,36426,47856,886 - 56,886 199212McGlynn's57,56141,25416,307 - 16,307 199513Satellite Lane Apartments36,1122,33433,778 - 33,778 19971657th Avenue Replacement53,6437,77645,867 - 45,867 200017Gateway East10,1245,0425,082 - 5,082 200718Gateway West6,3114,2142,097 - 2,097 200719TIF #1943,08845,628(2,540) - (2,540) 1995HR1/04Housing Replacement2,5565432,013 - 2,013 1995HR1/05Housing Replacement6,3922706,122 - 6,122 1995HR1/06Housing Replacement2,4476861,761 - 1,761 1995HR1/Q2Housing Replacement2,1373181,819 - 1,819 1995HR1/Q3Housing Replacement6,8613936,468 - 6,468 1995HR1/Q4Housing Replacement2,5617811,780 - 1,780 1995HR1/S3Housing Replacement2,6815162,165 - 2,165 1995HR1/S4Housing Replacement2,0855631,522 - 1,522 1995HR1/S5Housing Replacement2,0543751,679 - 1,679 1995HR1/S6Housing Replacement2,2424431,799 - 1,799 1995HR1/T7Housing Replacement43,08864042,44842,448 Totals$4,578,362$511,433$4,066,929$0$4,066,929 13. Commitments and Contingencies A. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. During 1987, the City established the Self Insurance Fund (an Internal Service Fund) to account for and finance its uninsured risks of loss. Workers compensation coverage is provided through a pooled self-insurance program through the League of Minnesota Cities Insurance Trust (LMCIT). The City pays an annual premium to the LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through Workers Compensation Reinsurance Association (WCRA) as required by law. For workers compensation, the City is subject to a $500 deductible. Property and casualty insurance coverage is provided through a pooled self-insurance program through LMCIT. The City pays an annual premium to the LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through commercial companies for claims in excess of various amounts. For property (other than 73 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 vehicles for which the City is self-insured) and casualty coverage, the City has a $50,000 deductible per occurrence with a $100,000 annual maximum. This deductible gets paid out of the Self-Insurance Fund as necessary. The City continues to carry commercial insurance for all other risks of loss, including employee health and disability insurance. There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years. In 1990, the General Fund contributed $1,000,000 to the Self Insurance Fund in lieu of the Self Insurance Fund charging losses back to each fund. There is no recorded liability for unpaid claims because the amount of such claims, if any, is considered to be immaterial. As of December 31, 2008, the Self Insurance Fund has accumulated equity in the amount of $1,718,076 to cover future claims and losses. B. Litigation The City attorney has indicated that existing and pending lawsuits, claims and other actions in which the City is a defendant are either covered by insurance; of an immaterial amount; or, in the judgment of the City attorney, remotely recoverable by plaintiffs. C. Federal and State Funds The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and are subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31, 2008. D. Tax Increment Districts The City’s tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they are not aware of any instances of noncompliance which would have a material effect on the financial statements. 74 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 E. Contingent Liability The HRA entered into various limited tax increment revenue notes with developers whereby the HRA shall pay the developers the lesser of the scheduled payment or available tax increment. Whether a payment will occur, and if so, the amount of the payment(s) are uncertain since all payments are dependent on the HRA receiving tax increments from the developer’s project. As such, this liability has not been recorded in the financial statements. The HRA has issued various Tax Increment Revenue Notes. These notes are not a general obligation of the HRA and are payable solely from available tax increments. Accordingly, these notes are not reflected in the financial statements of the HRA. A schedule of outstanding notes at December 31, 2008 is as follows: Original InterestMaturity NotePrincipalRateDate Medtronic$10,000,0006.75%August 1, 2025 Linn175,0008.50%February 1, 2012 TIF #191,500,0007.00%February 1, 2025 F. Construction Commitments At December 31, 2008, the City had construction project contracts in progress. The commitments related to the remaining contract balances are summarized as follows: Remaining ProjectCommitment Commons Park Water Treatment Plant Improvement$588,000 G. Commitments - HRA The HRA has pledged future tax increments to the City of Fridley, Minnesota for the City’s general obligation tax increment debt. 75 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 14. Leases A. Lease Expense The City leases space for one of its liquor stores. Total costs for this lease was $103,943 for the year ended December 31, 2008. The future minimum lease payments for this lease are as follows: Year Ending December 31,Amount 2009$98,200 2010109,981 2011109,981 2012109,981 2013109,981 201491,650 Total$629,774 B. Lease Revenue The City receives revenue from agreements for the lease of space above its water towers to communication companies. The space is used for antennas and other equipment necessary to provide radio communications. For accounting purposes, the leases are considered operating leases. Lease revenue for the year ended December 31, 2008, totaled $179,147. Terms of each lease are as follows: Annual Lease AdjustmentExpirationRenewal LesseeFactor*DateOptions T-Mobile-CommonsGreater of 3% or CPI12/31/111 Five Year Renewal T-Mobile Highway 65Greater of 3% or CPI12/31/122 Five Year Renewals T-Mobile - Marion HillsGreater of 2% or CPI up to 5%10/30/124 Five Year Renewals AT&T - GarageGreater of 5% or CPI08/25/133 Five Year Renewals AT&T - Marion HillsGreater of 5% or CPI06/30/103 Five Year Renewals Sprint - Highway 65Greater of 5% or CPI09/30/103 Five Year Renewals Sprint - Well #13Greater of 5% or CPI09/30/132 Five Year Renewals *Amounts for future lease receipts are unavailable because they are based on the Consumer Price Index. 76 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 15. Conduit Debt Obligation From time to time, the City has issued Industrial Revenue Bonds to provide financial assistance to private-sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private-sector entity served by the bond issuance. Neither the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2008, there were 30 series of Industrial Revenue Bonds issued. The aggregate principal amount payable for the eight series issued after July 1, 1995 is $24,912,365. The aggregate principal amount payable for the twenty-two series issued prior to July 1, 1995, could not be determined; however, their original issue amounts totaled $65.2 million. 16. Deficit Fund Balances At December 31, 2008, individual funds with a deficit fund balance are as follows: Component unit: Lake Pointe$671,980 Gateway East819,135 Gateway West1,515,564 57th Avenue Redevelopment126,655 Tax Increment District #1943,457 University / Osborne106,639 McGlynn Bakeries103,322 Satellite Lane Apartments155,801 17. Contingent Receivable In 1999, the HRA entered into an agreement with Medtronic for the sale of land from the HRA to Medtronic. The original principal amount of the receivable was $5,000,000. Interest is added quarterly at a rate of 8.25%. Payments on the note receivable are made in an amount equal to 11.11% of tax increment note payments received by Medtronic through 2012, and 22.22% of tax increment note payments receivable from 2012 through 2026. 77 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2008 18. Recently Issued Accounting Standards The Governmental Accounting Standards Boards (GASB) recently approved the following statements which were not implemented for these financial statements: Statement No. 51 Accounting and Financial Reporting for Intangible Assets.The provisions of this Statement are effective for financial statements for periods beginning after June 15, 2009. Statement No. 53 Accounting and Financial Reporting for Derivative Investments. The provisions of this Statement are effective for financial statements for periods beginning after June 15, 2009. Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions. The provisions of this Statement are effective for financial statements for periods beginning after June 15, 2010. The effect these standards may have on future financial statements is not determinable at this time. 78 REQUIRED SUPPLEMENTARY INFORMATION 79 Exhibit B-1 Page 1 of 4 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARYCOMPARISONSCHEDULE-GENERALFUND - BUDGETARYCOMPARISONSCHEDULEGENERALFUND For The Year Ended December 31, 2008 With comparative actual amounts for the year ended December 31, 2007 2008 Variance with Final Budget - 2007 Budgeted AmountsActualPositiveActual g OriginalFinalAmounts(Negative)Amounts Revenues: Taxes and special assessments: Current ad valorem taxes$8,571,572$8,187,419$8,049,121($138,298)$8,119,621 Delinquent ad valorem taxes46,00046,00081,45835,45870,335 Penalties and interest7,5007,50010,0642,5647,896 Special assessments8,0008,00023,17015,17026,644 Totaltaxesandspecialassessmentsoaaxes an speca assessmens8633072,,8248919,,8163813,,(85106),8224496,, Ttltdilt863307282489198163813(85106)8224496 Licenses and permits: Licenses: Rental80,00080,00095,58215,58281,008 Business85,50085,50080,305(5,195)104,659 All other29,00029,00029,95595529,345 Permits461,150461,150519,95258,802663,411 Total licenses and permits655,,650655,,650725,,79470,,144878,,423 Totallicensesandpermits65565065565072579470144878423 Intergovernmental revenue: Federal grants7,00050,29939,222(11,077)39,495 State maintenance aid190,000190,000199,6039,603199,420 State credits - 384,153338,986(45,167)423,109 Local government aid722,306722,306361,153(361,153)382,341 Other state grants3,0003,00015,27812,27834,006 Police and fire pension422,282437,903433,557(4,346)465,034 TtlitTotal intergovernmental revenue1,344,5881,787,6611,387,799(399,862)1,543,405tl134458817876611387799(399862)1543405 Charges for services: General government995,330995,3301,059,92364,593951,924 Public safety221,600267,575288,59121,016292,482 Public works49,50049,50026,351(23,149)26,970 Community development20,00020,0009,108(10,892)16,816 Recreation240,000240,000252,37712,377282,243 Totalchargesforservices1526430,,1572405,,1636350,,63945,1570435,, Totalchargesforservices152643015724051636350639451570435 Fines and forfeits200,000200,000287,77687,776275,431 Investment income197,000197,000151,883(45,117)204,260 Miscellaneous revenue: Insurance and other reimbursements57,50057,68677,01919,33355,311 Gambling tax70,00070,00068,257(1,743)80,993 Donations - 45,97042,946(3,024)19,333 Miscellaneous63,00063,0008,987(54,013)68,132 () Total miscellaneous revenue190,500236,656197,209(39,447)223,769 Total revenues12,747,240 12,898,291 12,550,624 (347,667)12,920,219 80 Exhibit B-1 Page 2 of 4 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARYCOMPARISONSCHEDULE-GENERALFUND - BUDGETARYCOMPARISONSCHEDULEGENERALFUND For The Year Ended December 31, 2008 With comparative actual amounts for the year ended December 31, 2007 2008 Variance with Final Budget - 2007 Budgeted AmountsActualPositiveActual g OriginalFinalAmounts(Negative)Amounts Expenditures: General government: Mayor and council: Personal services$87,311$87,311$83,925$3,386$83,152 Supplies and other charges31,26131,26128,1253,13630,021 Total mayor and council118,572118,572112,0506,522113,173 Citymanager:y manager: Cit Personal services215,833225,144225,144 - 215,398 Supplies and other charges67,87358,56254,0064,55651,308 Total City manager283,706283,706279,1504,556266,706 Human resources: Personal services177,894184,214184,214 - 169,589 Supplies and other charges22,78226,96226,8917118,514 Total human resources200,,676211,,176211,,10571188,,103 Totalhumanresources20067621117621110571188103 Legal: Supplies and other charges408,920408,920362,79646,124356,948 Elections: Personal services4014,6554,655 - 1,308 Supplies and other charges42,15848,65748,657 - 12,101 Total elections42,55953,31253,312013,409 Accounting: PliPersonal services641688641,688654,907654,907 - 616,789654907654907616789 Supplies and other charges86,39086,39085,64374782,301 Total accounting728,078741,297740,550747699,090 Assessing: Personal services183,409183,409178,5454,864176,260 Supplies and other charges9,2979,2978,1941,1037,880 Total assessing192,706192,706186,7395,967184,140 MIS: MIS: Personal services194,117195,714195,714 - 181,393 Supplies and other charges88,82787,23060,66926,56163,434 Total MIS282,944282,944256,38326,561244,827 City clerk/records: Personal services134,464134,464134,005459124,553 Supplies and other charges21,73221,73220,6211,11120,391 Total City clerk/records156,196156,196154,6261,570144,944 y Nondepartmental: Personal services9,0009,0008,58541524,934 Supplies and other charges69,17581,66281,662 - 66,154 Total nondepartmental78,17590,66290,24741591,088 81 Exhibit B-1 Page 3 of 4 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARYCOMPARISONSCHEDULE-GENERALFUND - BUDGETARYCOMPARISONSCHEDULEGENERALFUND For The Year Ended December 31, 2008 With comparative actual amounts for the year ended December 31, 2007 2008 Variance with Final Budget - 2007 Budgeted AmountsActualPositiveActual g OriginalFinalAmounts(Negative)Amounts Expenditures: (continued) General government: (continued) Municipal center: Personal services$36,881$36,881$33,177$3,704$32,768 Supplies and other charges249,198249,198231,52117,677256,093 Total municipal center286,079286,079264,69821,381288,861 Total general government2,778,6112,825,5702,711,656113,9142,591,289 Expenditures: Public safety: Police: Personal services4,321,9694,402,7374,402,737 - 4,114,952 Supplies and other charges558,994534,807534,807 - 545,677 Total police4,880,9634,937,5444,937,54404,660,629 Fire: Personal services1,054,7021,059,1471,037,82921,3181,061,007 Supplies and other charges200,836210,458168,01942,439159,852 Total fire1,255,5381,269,6051,205,84863,7571,220,859 Rental inspections: Personal services126,770126,770121,5975,17366,942 Supplies and other charges17,71417,71410,6727,04210,103 Totalrentalinspections144484,144484,132269,12215,77045, Totalrentalinspections1444841444841322691221577045 Civil defense: Supplies and other charges22,93726,21220,0806,13219,533 Total public safety6,303,9226,377,8456,295,74182,1045,978,066 Public works: Engineering: Personal services470,346470,346457,88812,458405,058 SlidthhSupplies and other charges7900679,00679,00675,1163,89070,0617900675116389070061 Total engineering549,352549,352533,00416,348475,119 Public works and parks: Personal services1,659,0441,668,5881,657,98510,6031,551,394 Supplies and other charges1,011,5551,059,449970,64188,808998,644 Total public works and parks2,670,5992,728,0372,628,62699,4112,550,038 Total public works3,219,9513,277,3893,161,630115,7593,025,157 Community development: Building inspection: Personal services235,420235,420227,5507,870213,707 Supplies and other charges130,543130,54391,40739,136134,619 Total building inspection365,963365,963318,95747,006348,326 82 Exhibit B-1 Page 4 of 4 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARYCOMPARISONSCHEDULE-GENERALFUND - BUDGETARYCOMPARISONSCHEDULEGENERALFUND For The Year Ended December 31, 2008 With comparative actual amounts for the year ended December 31, 2007 2008 Variance with Final Budget - 2007 Budgeted AmountsActualPositiveActual OriginalFinalAmounts(Negative)Amounts OriginalFinalAmounts(Negative)Amounts Expenditures: (continued) Community development: (continued) Planning: Personal services$369,410$370,919$370,919$ - $349,070 Supplies and other charges93,53992,03085,0846,94656,690 Total planning462,949462,949456,0036,946405,760 Totalcommunitydevelopment828,912,828,912,774,960,53,952,754,086, Totalcommunitydevelopment82891282891277496053952754086 Parks and recreation: Personal services650,844650,844587,29763,547566,423 Supplies and other charges268,113290,314271,55318,761266,531 Total parks and recreation918,957941,158858,85082,308832,954 Contingency: Current: Current: Supplies and other charges100,00011,705 - 11,705 - Capital outlay: Public safety114,340170,664170,664 - 260,459 Public works94,00080,68173,1857,496125,841 Culture and recreation - - - Total capital outlay208,340251,345243,8497,496386,300 Total expenditures14,358,69314,513,92414,046,686467,23813,567,852 Excess (deficiency) of revenues over (under) expenditures(1,611,453)(1,615,633)(1,496,062)119,571(647,633) Other financing sources (uses): Proceeds from sale of capital assets - - 13,10113,10158,313 Transfersinransersn750000,817440,817440, -1921127,, Tfi7500008174408174401921127 Transfers out - (20,000)(20,000) - - Total other financing sources (uses)750,000797,440810,54113,1011,979,440 Net change in fund balance($861,453)($818,193)(685,521)$132,6721,331,807 Fund balance - January 15,272,3063,940,499 Fund balance - December 31$4,586,785$5,272,306 FundbalanceDecember31$4,586,785$5,272,306 83 Exhibit B-2 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GRANT MANAGEMENT FUND ForTheYearEndedDecember312008, ForTheYearEndedDecember312008 With comparative actual amounts for the year ended December 31, 2007 2008 Variance with Final Budget - 2007 Budgeted AmountsActualPositiveActual OriginalFinalAmounts(Negative)Amounts g(g) Revenues: Intergovernmental: Federal grants$92,034$114,073$110,765($3,308)$107,429 Miscellaneous revenue: Donations - - 3,3083,308357 Total revenues92,034 114,073 114,073 0 107,786 Expenditures:xpenures: Edit Current: Community development: Personal services83,13999,92399,923 - 92,217 Supplies and other charges8,89514,15014,150 - 15,569 Total expenditures92,034 114,073 114,073 0 107,786 Excess(deficiency)ofrevenuesover Excess(deficiency)ofrevenuesover (under) expenditures$0$00$00 Fund balance - January 1 - - Fund balance - December 31$0$0 84 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE NOTE TO RSI December 31, 2008 Note A BUDGETS The General Fund and Grant Management Fund budgets are legally adopted on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control is at the expenditure category level. 85 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF FUNDING PROGRESS - RETIREE HEALTH PLAN For The Year Ended December 31, 2008 Unfunded ActuarialActuarialUAAL as a ActuarialActuarialAccruedAccruedFundedCoveredPercentage of ValuationValue of AssetsLiability (AAL)*Liability (UAAL)RatioPayrollCovered Payroll Date(a)(b)(b-a)(a/b)(c) ( (b-a) / c) January 1, 2008$ - $1,910,670$1,910,6700.0%$9,303,57620.5% *Using the entry age normal actuarial pay cost method. Note, the first OPEB actuarial valuation was conducted as of January 1, 2008. There is no data available prior to the first valuation. 86 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 87 CITY OF FRIDLEY 88 NONMAJOR GOVERNMENTAL FUNDS 89 CITY OF FRIDLEY 90 SPECIAL REVENUE FUNDS A Special Revenue Fund accounts for revenues derived from specific taxes or other earmarked revenue sources. They are usually required by statute or local ordinance and/or resolution to finance particular functions, activities or governments. 91 Exhibit C-1 CITY OF FRIDLEY, MINNESOTA BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2008 With comparative amounts for December 31, 2007 Nonmajor Special Revenue 20082007 Assets Cash and investments$1,232,661$1,171,210 Receivables: Accounts81,70776,954 Taxes9,8029,090 Due from component unit10,0588,941 Due from other governments35,15037,846 Total assets$1,369,378$1,304,041 Liabilities and Fund Balance Liabilities: Accounts payable$25,199$27,003 Due to other governments426275 Due to other funds39,52650,841 Salaries payable11,9108,344 Deferred revenue7,8017,712 Total liabilities84,86294,175 Fund balance (deficit): Reserved25,59020,726 Unreserved: Designated1,258,9261,192,896 Undesignated -(3,756) Total fund balance (deficit)1,284,5161,209,866 Total liabilities and fund balance$1,369,378$1,304,041 92 Exhibit C-2 CITY OF FRIDLEY, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For The Year Ended December 31, 2008 With comparative amounts for the year ended December 31, 2007 Nonmajor Special Revenue 20082007 Revenues: Taxes$294,191$288,502 Licenses and permits220,491202,364 Intergovernmental revenue60,57769,292 Charges for services341,805333,414 Fines and forfeits28,87022,928 Investment income32,95656,031 Miscellaneous160,294134,205 Total revenues1,139,184 1,106,736 Expenditures: Current: General government607,705633,797 Public safety28,16921,491 Parks, recreation and naturalist393,805361,336 Capital outlay38,955 - Total expenditures1,068,6341,016,624 Excess (deficiency) of revenues over (under) expenditures70,55090,112 Other financing sources (uses): Transfers in25,000 - Transfers out(20,900)(190,000) Total other financing sources (uses)4,100(190,000) Net change in fund balance74,650(99,888) Fund balance - January 11,209,8661,309,754 Fund balance - December 31$1,284,516$1,209,866 93 CITY OF FRIDLEY 94 NONMAJOR SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for revenues derived from specific taxes or other earmarked revenue sources. They are usually required by statute, charter provision or local ordinance to finance particular governmental functions or activities. Cable TV Fund - This fund receives revenues from the issuance of a franchise agreement with the cable TV provider. These revenues are used for the operation and maintenance of a government access channel. Solid Waste Abatement Fund - This fund receives grants, recycling fees and yard waste fees. These revenues finance the City’s curbside recycling pickup and operation of the yard waste transfer site. HRA Reimbursement Fund - This fund receives revenues from the Housing and Redevelopment Authority. These revenues are used to reimburse the City for professional services provided by City staff for HRA related activities. Drug and Gambling Forfeiture Fund - This fund receives forfeited property in connection with illegal gambling or drug activity. Pursuant to Minnesota Statutes, the proceeds are disbursed between the investigating agency and the prosecuting agency. F.C.C. Donations Fund - This fund is used to account for donations received and used in improving and furnishing the Fridley Community Center. Police Activity Fund - This fund is used to track the revenue and expenditures of externally funded police positions. Springbrook Nature Center Fund - This fund was established in 2005 after a $275,000 referendum supporting the Springbrook Nature Center was approved by the voters in November of 2004. The revenues from the annual levy are used for the on-going operation of the nature center and the capital improvement projects required in the park. 95 CITY OF FRIDLEY, MINNESOTA SUBCOMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS December312008, December312008 With comparative totals for December 31, 2007 Solid Waste AssetsCable TVAbatement Cash and investments$1,034,259$ - Receivables: Accounts56,33125,376 Taxes - - Due from component unit - - Due from other governments -31,712 Totalassetsoa asses$1090590,,$57088, Ttlt$1090590$57088 Liabilities and Fund Balance Liabilities: Accounts payable$143$22,799 Due to other governments - - Duetootherfunds-29,468, Duetootherfunds-29468 Salaries payable2,0742,031 Deferred revenue - - Total liabilities2,21754,298 Fund balance: Reserved for public safety - - Unreserved: Designated for special revenue programs1,088,3732,790 Undesignated - - Total fund balance1,088,3732,790 Total liabilities and fund balance$1,090,590$57,088 96 Exhibit C-3 Drug and Springbrook HRAGamblingF.C.C.Nature Center Totals Nonmajor Special ReimbursementForfeitureDonationsPolice ActivityFund Revenue Funds 20082007 $ - $21,787$86,070$22,302$68,243$1,232,661$1,171,210 - - - - - 81,70776,954 - - - - 9,8029,8029,090 10,058 - - - - 10,0588,941 - 150 - 3,288 - 35,15037,846 $10058,$21937,$86070,$25590,$78045,$1369378,,$1304041,, $10058$21937$86070$25590$78045$1369378$1304041 $ - $1,168$ - $ - $1,089$25,199$27,003 - 426 - - - 426275 10,058,---- 39,526,50,841, 10058----3952650841 - - - - 7,80511,9108,344 - - - - 7,8017,8017,712 10,0581,5940016,69584,86294,175 - - - 25,590 - 25,59020,726 - 20,34386,070 - 61,3501,258,9261,192,896 - - - - - - (3,756) 020,34386,07025,59061,3501,284,5161,209,866 $10,058$21,937$86,070$25,590$78,045$1,369,378$1,304,041 97 CITY OF FRIDLEY, MINNESOTA SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31, 2008 With comparative totals for the year ended December 31, 2007 Solid Waste Cable TVAbatement Revenues: Taxes$ - $ - Licenses and permits220,491 - Intergovernmental revenue - 31,712 Charges for services700251,690 Fines and forfeits - - Investment income29,229 - Miscellaneous272157,022 Total revenues250,692440,424 Expenditures: Current: General government145,142438,878 Public safety - - Parks, recreation and naturalist - - Capital outlay24,780 - Total expenditures169,922438,878 Excess (deficiency) of revenues over (under) expenditures80,7701,546 Other financing sources (uses): Transfers in -5,000 Transfers out - - Total other financing sources (uses)05,000 Net change in fund balance80,7706,546 Fund balance - January 11,007,603(3,756) Fund balance - December 31$1,088,373$2,790 98 Exhibit C-4 Drug and Springbrook HRAGamblingF.C.C.Nature Center Totals Nonmajor Special ReimbursementForfeitureDonationsPolice ActivityFund Revenue Funds 20082007 $ - $ - $ - $ - $294,191$294,191$288,502 - - - - - 220,491202,364 23,685 - - 5,180 - 60,57769,292 - - - - 89,415341,805333,414 - 28,870 - - - 28,87022,928 - - 2,48958465432,95656,031 - - - - 3,000160,294134,205 23,68528,8702,4895,764387,2601,139,1841,106,736 23,685 - - - - 607,705633,797 - 28,169 - - - 28,16921,491 - - - - 393,805393,805361,336 - 14,175 - - - 38,955 - 23,68542,34400393,8051,068,6341,016,624 0(13,474)2,4895,764(6,545)70,55090,112 - - - 20,000 - 25,000 - - - - (20,900) - (20,900)(190,000) 000(900)04,100(190,000) 0(13,474)2,4894,864(6,545)74,650(99,888) - 33,81783,58120,72667,8951,209,8661,309,754 $0$20,343$86,070$25,590$61,350$1,284,516$1,209,866 99 Exhibit D-1 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - CABLE TV FUND COMPARATIVE BALANCE SHEET December 31, 2008 and 2007 Assets 20082007 Cash and investments$1,034,259$958,136 Accounts receivable56,33151,007 Total assets$1,090,590$1,009,143 Liabilities and Fund Balance Liabilities: Accounts payable$143$ - Salaries payable2,0741,540 Total liabilities2,2171,540 Fund balance: Unreserved: Designated for special revenue programs1,088,3731,007,603 Total liabilities and fund balance$1,090,590$1,009,143 100 Exhibit D-2 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - CABLE TV FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2008 With comparative actual amounts for the year ended December 31, 2007 20082007 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Licenses - franchise fee$200,000$200,000$220,491$202,364 Charges for services800800700700 Investment income57,00057,00029,22943,546 Miscellaneous - - 2721,516 Total revenues257,800 257,800 250,692 248,126 Expenditures: Current: General government: Personal services127,217127,770127,769122,581 Supplies and other charges17,68417,68417,3738,506 Capital outlay8,30032,64424,780 - Total expenditures153,201 178,098 169,922 131,087 Excess (deficiency) of revenues over (under) expenditures$104,599$79,70280,770117,039 Fund balance - January 11,007,603890,564 Fund balance - December 31$1,088,373$1,007,603 101 Exhibit D-3 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - SOLID WASTE ABATEMENT FUND COMPARATIVE BALANCE SHEET December 31, 2008 and 2007 Assets 20082007 Accounts receivable$25,376$24,631 Due from other governments31,71237,846 Total assets$57,088$62,477 Liabilities and Fund Balance Liabilities: Accounts payable$22,799$22,572 Salaries payable2,0311,489 Due to other governments -272 Due to other funds29,46841,900 Total liabilities54,29866,233 Fund balance: Unreserved: Designated for special revenue programs2,790 - Undesignated -(3,756) Total fund balance2,790(3,756) Total liabilities and fund balance$57,088$62,477 102 Exhibit D-4 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - SOLID WASTE ABATEMENT FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2008 With comparative actual amounts for the year ended December 31, 2007 20082007 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Intergovernmental revenue: State$59,000$59,000$31,712$48,950 Charges for services248,500248,500251,690247,347 Miscellaneous131,600131,600157,022131,474 Total revenues439,100 439,100 440,424 427,771 Expenditures: Current: General government: Personal services66,71268,08168,08263,005 Supplies and other charges407,196405,827370,796412,520 Total expenditures473,908 473,908 438,878 475,525 Excess (deficiency) of revenues over (under) expenditures(34,808)(34,808)1,546(47,754) Other financing sources: Transfers in34,80834,8085,000 - Net change in fund balance$0$06,546(47,754) Fund balance (deficit) - January 1(3,756)43,998 Fund balance (deficit) - December 31$2,790($3,756) 103 Exhibit D-5 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - HRA REIMBURSEMENT FUND COMPARATIVE BALANCE SHEET December 31, 2008 and 2007 Assets 20082007 Due from component unit$10,058$8,941 Total assets$10,058$8,941 Liabilities and Fund Balance Liabilities: Due to other funds$10,058$8,941 Fund balance - - Total liabilities and fund balance$10,058$8,941 104 Exhibit D-6 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - HRA REIMBURSEMENT FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2008 With comparative actual amounts for the year ended December 31, 2007 20082007 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Intergovernmental revenue: Housing and Redevelopment Authority$ - $23,685$23,685$20,342 Expenditures: Current: General government: Supplies and other charges - 23,68523,68520,342 Excess (deficiency) of revenues over (under) expenditures$0$000 Fund balance - January 1 - - Fund balance - December 31$0$0 105 Exhibit D-7 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - DRUG AND GAMBLING FORFEITURE FUND COMPARATIVE BALANCE SHEET December 31, 2008 and 2007 Assets 20082007 Cash and investments$21,787$33,817 Due from other governments150 - Total assets$21,937$33,817 Liabilities and Fund Balance Liabilities: Accounts payable$1,168$ - Due to other governments426 - Total liabilities1,5940 Fund balance: Unreserved: Designated for special revenue programs20,34333,817 Total liabilities and fund balance$21,937$33,817 106 Exhibit D-8 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - DRUG AND GAMBLING FORFEITURE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2008 With comparative actual amounts for the year ended December 31, 2007 20082007 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Fines and forfeits$ - $42,345$28,870$22,928 Expenditures: Current: Public safety Supplies and other charges - 28,17028,16921,491 Capital outlay - 14,17514,175 - Total expenditures042,34542,34421,491 Excess (deficiency) of revenues over (under) expenditures$0$0(13,474)1,437 Fund balance - January 133,81732,380 Fund balance - December 31$20,343$33,817 107 Exhibit D-9 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - F.C.C. DONATIONS FUND COMPARATIVE BALANCE SHEET December 31, 2008 and 2007 Assets 20082007 Cash and investments$86,070$83,581 Total assets$86,070$83,581 Liabilities and Fund Balance Liabilities$ - $ - Fund balance: Unreserved: Designated for special revenue programs86,07083,581 Total liabilities and fund balance$86,070$83,581 108 Exhibit D-10 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - F.C.C. DONATIONS FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2008 With comparative actual amounts for the year ended December 31, 2007 20082007 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Investment income$ - $ - $2,489$4,111 Expenditures: Current: General government: Supplies and other charges - - - 6,843 Excess (deficiency) of revenues over (under) expenditures$0$02,489(2,732) Fund balance - January 183,58186,313 Fund balance - December 31$86,070$83,581 109 Exhibit D-11 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - POLICE ACTIVITY FUND COMPARATIVE BALANCE SHEET December 31, 2008 and 2007 Assets 20082007 Cash and investments$22,302$20,726 Due from other governments3,288 - Total assets$25,590$20,726 Liabilities and Fund Balance Liabilities$ - $ - Fund balance: Reserved for police activity25,59020,726 Total liabilities and fund balance$25,590$20,726 110 Exhibit D-12 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - POLICE ACTIVITY FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2008 With comparative actual amounts for the year ended December 31, 2007 20082007 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Intergovernmental$ - $ - $5,180$ - Investment income - - 5847,595 Total revenues005,7647,595 Expenditures - - - - Excess of revenues over expenditures005,7647,595 Other financing sources (uses): Transfers in: General Fund - 20,00020,000 - Transfers out: General Fund - (20,900)(20,900)(190,000) Total other financing sources (uses)0(900)(900)(190,000) Net change in fund balance$0($900)4,864(182,405) Fund balance - January 120,726203,131 Fund balance - December 31$25,590$20,726 111 Exhibit D-13 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - SPRINGBROOK NATURE CENTER FUND COMPARATIVE BALANCE SHEET December 31, 2008 and 2007 Assets 20082007 Cash and investments$68,243$74,950 Receivables: Accounts -1,316 Taxes9,8029,090 Total assets$78,045$85,356 Liabilities and Fund Balance Liabilities: Accounts payable$1,089$4,431 Salaries payable7,8055,315 Due to other governments -3 Deferred revenue7,8017,712 Total liabilities16,69517,461 Fund balance: Unreserved: Designated for special revenue programs61,35067,895 Total liabilities and fund balance$78,045$85,356 112 Exhibit D-14 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - SPRINGBROOK NATURE CENTER FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2008 With comparative actual amounts for the year ended December 31, 2007 20082007 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Taxes$295,200$295,200$294,191$288,502 Charges for service79,50089,06089,41585,367 Investment income - - 654779 Miscellaneous - 3,0003,0001,215 Total revenues374,700387,260387,260375,863 Expenditures Current: Parks, recreation and naturalist Personal services299,167320,442320,443294,613 Supplies and other charges74,45673,36373,36266,723 Total expenditures373,623 393,805 393,805 361,336 Excess (deficiency) of revenues over (under) expenditures$1,077($6,545)(6,545)14,527 Fund balance - January 167,89553,368 Fund balance - December 31$61,350$67,895 113 CITY OF FRIDLEY 114 CAPITAL PROJECTS FUNDS Capital Projects Funds are used to account for the resources expended to acquire permanent or long-term assets. These funds are established to provide special accounting for bond proceeds, grants and contributions designated for the acquisition of capital assets. 115 Exhibit E-1 CITY OF FRIDLEY, MINNESOTA CAPITAL PROJECT FUND - CAPITAL IMPROVEMENT FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2008 With comparative actual amounts for the year ended December 31, 2007 20082007 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Taxes$104,600$99,912$99,236$97,388 Intergovernmental revenue: State445,000449,6881,162,09370,526 Investment income155,631155,631168,761328,386 Miscellaneous10,00010,000 - 43,378 Total revenues715,231 715,231 1,430,090 539,678 Expenditures: Current: General government: Supplies and other charges - 2,9842,98451,628 Parks, recreation and naturalist: Supplies and other charges - 113,499113,499149,137 Debt service - - 7,33841,635 Capital outlay252,70073,21752,40789,592 Total expenditures252,700 189,700 176,228 331,992 Excess of revenues over expenditures462,531525,5311,253,862207,686 Other financing sources (uses): Bonds issued2,891,0002,891,0001,915,0001,910,000 Transfers In - 102,554102,554 - Transfers out(3,476,000)(3,476,000)(2,492,662)(2,482,916) Total other financing sources (uses)(585,000)(482,446)(475,108)(572,916) Net change in fund balance($122,469)$43,085778,754(365,230) Fund balance - January 15,105,2045,470,434 Fund balance - December 31$5,883,958$5,105,204 116 INTERNAL SERVICE FUNDS Internal Service Funds are used to account for goods and services that are provided on a cost reimbursement or fee basis to departments or agencies within the City. These funds are essential for segregating costs for determining the total cost of providing a service and for assuring that the goods and services provided are properly utilized. These funds are accounted for on a capital maintenance measurement focus and use the accrual basis of accounting. Employee Benefits Fund – This fund is used to account for the expenses associated with providing fringe benefits for employees. Self-Insurance Fund – This fund is used to account for all revenues and expenses associated with the $50,000 deductible in the City’s general liability policy. Information Systems Fund – This fund is used to account for all revenues and expenses associated with maintaining and upgrading the City’s computerized information systems. 117 Exhibit F-1 CITY OF FRIDLEY, MINNESOTA COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS December 31, 2008 With comparative totals for December 31, 2007 EmployeeSelfInformation BenefitsInsuranceSystems Totals Assets:20082007 Current assets: Cash and investments$1,251,717$1,718,076$911,032$3,880,825$3,729,450 Accounts receivable - 235,000 - 235,000 - Due from component unit269 -269269 Total current assets1,251,9861,953,076911,0324,116,0943,729,719 Capital assets, at cost: Machinery and equipment - - 1,404,5621,404,5621,349,969 Less: accumulated depreciation - - (1,189,850)(1,189,850)(1,095,268) Net capital assets00214,712214,712254,701 Total assets1,251,9861,953,0761,125,7444,330,8063,984,420 Liabilities: Current liabilities: Accounts payable - - 4014014,937 Due to component unit - 235,000 - 235,000 - Payroll deductions payable94,851 - - 94,85187,956 Compensated absences payable - current portion734,182 - - 734,182728,858 Total current liabilities829,033235,0004011,064,434821,751 Noncurrent liabilities: Compensated absences payable218,580 - - 218,580115,138 Total liabilities1,047,613235,0004011,283,014936,889 Net assets: Invested in capital assets - - 214,712214,712254,701 Unrestricted204,3731,718,076910,6312,833,0802,792,830 Total net assets$204,373$1,718,076$1,125,343$3,047,792$3,047,531 118 Exhibit F-2 CITY OF FRIDLEY, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS INTERNAL SERVICE FUNDS For The Year Ended December 31, 2008 With comparative totals for the year ended December 31, 2007 EmployeeSelfInformation BenefitsInsuranceSystems Totals 20082007 Operating revenues: Charges for services$113,506$ - $139,091$252,597$216,001 Operating expenses: Personal services117,08513,688 - 130,77371,197 Supplies and other charges3,07266,27127,12596,46863,725 Depreciation - - 141,375141,375148,319 Total operating expenses120,15779,959168,500368,616283,241 Operating income (loss)(6,651)(79,959)(29,409)(116,019)(67,240) Nonoperating revenues: Investment income32,92650,91926,735110,580170,332 Intergovernmental - 10,77010,770 - Insurance reimbursement - 276,496 - 276,49672,481 Payment to component unit - (235,000) - (235,000) - Loss on disposal of capital assets - - (26)(26)1,125 Total nonoperating revenues32,926103,18526,709162,820243,938 Income (loss) before transfers26,27523,226(2,700)46,801176,698 Transfers: Transfers out - (46,540) - (46,540) - Change in net assets26,275(23,314)(2,700)261176,698 Net assets - January 1178,0981,741,3901,128,0433,047,5312,870,833 Net assets - December 31$204,373$1,718,076$1,125,343$3,047,792$3,047,531 119 Exhibit F-3 CITY OF FRIDLEY, MINNESOTA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For The Year Ended December 31, 2008 With comparative totals for the year ended December 31, 2007 EmployeeSelfInformation BenefitsInsuranceSystems Totals 20082007 Cash flows from operating activities: Receipts from interfund services provided$113,506$ - $139,091$252,597$216,164 Payment to suppliers(3,257)(66,771)(30,976)(101,004)(82,401) Payment to employees(1,424)(13,688) - (15,112)(25,084) Net cash flows from operating activities108,825(80,459)108,115136,481108,679 Cash flows from noncapital financing activites: Transfers to other funds - (46,540) - (46,540) - Cash flows from capital and related financing activities: Acquisition of capital assets - - (101,386)(101,386)(77,111) Intergovernmental revenue - 10,770 - 10,770 - Insurance reimbursement - 41,496 - 41,49672,481 Proceeds from sale of capital assets - - (26)(26)1,125 Net cash flows from capital and and related financing activities 052,266(101,412)(49,146)(3,505) Cash flows from investing activities: Investment income32,92650,91926,735110,580170,332 Net increase (decrease) in cash and cash equivalents141,751(23,814)33,438151,375275,506 Cash and cash equivalents - January 11,109,9661,741,890877,5943,729,4503,453,944 Cash and cash equivalents - December 31$1,251,717 $1,718,076 $911,032 $3,880,825 $3,729,450 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) ($6,651)($79,959)($29,409)($116,019)($67,240) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation - - 141,375141,375148,319 Changes in assets and liabilities: Decrease (increase) in receivables - - - - 163 Increase (decrease) in payables115,476(500)(3,851)111,12527,437 Total adjustments115,476 (500)137,524 252,500 175,919 Net cash provided by operating activities$108,825($80,459)$108,115$136,481$108,679 120 Exhibit F-4 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - EMPLOYEE BENEFITS FUND COMPARATIVE STATEMENT OF NET ASSETS December 31, 2008 With comparative totals for December 31, 2007 20082007 Assets: Current assets: Cash and investments$1,251,717$1,109,966 Due from component unit269269 Total current assets1,251,9861,110,235 Liabilities: Current liabilities: Payroll deductions payable94,85187,956 Accounts payable -185 Compensated absences payable - current portion734,182728,858 Total current liabilities829,033816,999 Noncurrent liabilities: Compensated absences payable 218,580115,138 Total liabilities1,047,613932,137 Net assets: Unrestricted204,373178,098 Total net assets$204,373$178,098 121 Exhibit F-5 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - EMPLOYEE BENEFITS FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS For The Year Ended December 31, 2008 With comparative amounts for the year ended December 31, 2007 20082007 Operating revenues$113,506$67,237 Operating expenses: Personal services117,08571,197 Supplies and other charges3,0721,549 Total operating expenses120,15772,746 Operating income (loss)(6,651)(5,509) Nonoperating revenues: Investment income32,92648,867 Change in net assets26,27543,358 Net assets - January 1178,098134,740 Net assets - December 31$204,373$178,098 122 Exhibit F-6 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - EMPLOYEE BENEFITS FUND COMPARATIVE STATEMENT OF CASH FLOWS For The Year Ended December 31, 2008 With comparative amounts for the year ended December 31, 2007 20082007 Cash flows from operating activities: Receipts from interfund services provided$113,506$67,400 Payment to suppliers(3,257)(1,580) Payment to employees(1,424)(25,084) Net cash flows from operating activities108,82540,736 Cash flows from investing activities: Investment income32,92648,867 Net increase in cash and cash equivalents141,75189,603 Cash and cash equivalents - January 11,109,9661,020,363 Cash and cash equivalents - December 31$1,251,717 $1,109,966 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) ($6,651)($5,509) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Changes in assets and liabilities: (Increase) decrease in receivables -163 Increase (decrease) in payables115,47646,082 Total adjustments115,476 46,245 Net cash provided (used) by operating activities$108,825$40,736 123 Exhibit F-7 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - SELF INSURANCE FUND COMPARATIVE STATEMENT OF NET ASSETS December 31, 2008 With comparative amounts for December 31, 2007 20082007 Assets: Current assets: Cash and investments$1,718,076$1,741,890 Accounts receivable235,000 - Total assets1,953,0761,741,890 Liabilities: Current liabilities: Accounts payable -500 Due to component unit235,000 - Total liabilities235,000500 Net assets: Unrestricted1,718,0761,741,390 Total net assets$1,718,076$1,741,390 124 Exhibit F-8 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - SELF INSURANCE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS For The Year Ended December 31, 2008 With comparative amounts for the year ended December 31, 2007 20082007 Operating revenues$ - $ - Operating expenses: Supplies and other charges66,27149,904 Personal services13,688 - Total operating expenses79,95949,904 Operating income (loss)(79,959)(49,904) Nonoperating revenues (expenses): Intergovernmental10,770 - Investment income50,91981,498 Insurance reimbursement276,49672,481 Payment to Component Unit(235,000) - Total nonoperating revenues (expenses)103,185153,979 Income before transfers23,226104,075 Transfers: Transfers out(46,540) - Change in net assets(23,314)104,075 Net assets - January 11,741,3901,637,315 Net assets - December 31$1,718,076$1,741,390 125 Exhibit F-9 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - SELF INSURANCE FUND COMPARATIVE STATEMENT OF CASH FLOWS For The Year Ended December 31, 2008 With comparative amounts for the year ended December 31, 2007 20082007 Cash flows from operating activities: Payment to employees($13,688)$ - Payment to suppliers(66,771)(52,113) Net cash flows from operating activities(80,459)(52,113) Cash flows from noncapital financing activites: Transfers to other funds(46,540) - Cash flows from capital and related financing activities: Intergovernmental revenue10,770 - Insurance reimbursement41,49672,481 Net cash flows provided from capital and related financing activities52,26672,481 Cash flows from investing activities: Investment income50,91981,498 Net increase (decrease) in cash and cash equivalents(23,814)101,866 Cash and cash equivalents - January 11,741,8901,640,024 Cash and cash equivalents - December 31$1,718,076 $1,741,890 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) ($79,959)($49,904) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Changes in assets and liabilities: Increase (decrease) in payables(500)(2,209) Total adjustments(500)(2,209) Net cash provided (used) by operating activities($80,459)($52,113) 126 Exhibit F-10 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - INFORMATION SYSTEMS FUND COMPARATIVE STATEMENT OF NET ASSETS December 31, 2008 With comparative amounts for December 31, 2007 20082007 Assets: Current assets: Cash and investments$911,032$877,594 Capital assets, at cost: Property and equipment1,404,5621,349,969 Less: accumulated depreciation(1,189,850)(1,095,268) Net capital assets214,712254,701 Total assets1,125,7441,132,295 Liabilities: Current liabilities: Accounts payable4014,252 Net assets: Invested in capital assets, net of related debt214,712254,701 Unrestricted910,631873,342 Total net assets$1,125,343$1,128,043 127 Exhibit F-11 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - INFORMATION SYSTEMS FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS For The Year Ended December 31, 2008 With comparative amounts for the year ended December 31, 2007 20082007 Operating revenues: Charges for services$139,091$148,764 Operating expenses: Supplies and other charges27,12512,272 Depreciation141,375148,319 Total operating expenses168,500160,591 Operating income (loss)(29,409)(11,827) Nonoperating revenues: Investment income26,73539,967 Gain (loss) on disposal of fixed assets(26)1,125 Total nonoperating revenues26,70941,092 Change in net assets(2,700)29,265 Net assets - January 11,128,0431,098,778 Net assets - December 31$1,125,343$1,128,043 128 Exhibit F-12 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - INFORMATION SYSTEMS FUND COMPARATIVE STATEMENT OF CASH FLOWS For The Year Ended December 31, 2008 With comparative amounts for the year ended December 31, 2007 20082007 Cash flows from operating activities: Receipts from interfund services provided$139,091$148,764 Payment to suppliers(30,976)(28,708) Net cash flows from operating activities108,115120,056 Cash flows from capital and related financing activities: Acquisition of capital assets(101,386)(77,111) Proceeds from sale of capital assets(26)1,125 Net cash flows from capital and related financing activities(101,412)(75,986) Cash flows from investing activities: Investment income26,73539,967 Net increase in cash and cash equivalents33,43884,037 Cash and cash equivalents - January 1877,594793,557 Cash and cash equivalents - December 31$911,032$877,594 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) ($29,409)($11,827) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation141,375148,319 Changes in assets and liabilities: Increase (decrease) in payables(3,851)(16,436) Total adjustments137,524131,883 Net cash provided (used) by operating activities$108,115$120,056 129 CITY OF FRIDLEY 130 HOUSING AND REDEVELOPMENT AUTHORITY COMPONENT UNIT 131 CITY OF FRIDLEY, MINNESOTA BALANCE SHEET - GOVERNMENTAL FUNDS HOUSING AND REDEVELOPMENT AUTHORITY December 31, 2008 With comparative totals for December 31, 2007 General FundHousing LoanCenter City Assets Cash and investments$3,673,363$3,352,283$3,014,072 Receivables: Accounts35,826 - - Interest5,780 - - Taxes: Unremitted2,636 - - Delinquent9,152 - 25,357 Mortgage: Deferred - 1,097,635 - Allowance for uncollectible accounts -(55,458) - Prepaid expenses -2,410 - Due from other governments78,668 - 17,104 Due from other funds3,675,825 - - Due from primary government535,000 - - Land held for resale4,453,446 - - Total assets$12,469,696$4,396,870$3,056,533 Liabilities and Fund Balance Liabilities: Accounts payable$552,374$ - $ - Due to primary government56,932 - - Due to other governments - - 2,300 Due to other funds - - - Deferred revenue4,462,598 - 25,357 Loan payable to primary government - 277,560 - Total liabilities5,071,904277,56027,657 Fund balance: Reserved for debt service - - 1,711,726 Reserved for mortgage receivable - 1,097,635 - Unreserved, undesignated7,397,7923,021,6751,317,150 Total fund balance7,397,7924,119,3103,028,876 Total liabilities and fund balance$12,469,696$4,396,870$3,056,533 132 Exhibit G-1 Other North Area / Governmental Univ. Ind. ParkLake PointeOnanGateway WestFunds Totals Governmental Funds 20082007 $1,683,319$435,610$392,816$3,722$782,551$13,337,736$16,340,746 - - - - - 35,82633,474 - - - - - 5,7805,822 5,355613314 - 899,00719,600 116,2738041,6391,0913154,319160,418 39,676 - - - - 1,137,3111,115,399 - - - - - (55,458)(44,900) - - - - - 2,4105,499 - - - 38011,708107,860 - - - - - - 3,675,8253,313,825 - - - - - 535,00018,480 192,00050,000 - 155,55475,0004,926,0002,608,738 $2,036,623$487,027$394,769$160,747$869,351$23,871,616$23,577,101 $ - $322,466$ - $ - $359,123$1,233,963$381,513 - - - - - 56,93254,418 4004345665574,6618,918 - - 785,303 - 1,519,1091,371,4133,675,8253,313,825 308,27350,8041,639156,64575,0035,080,3192,769,156 - - - - - 277,560348,441 308,6731,159,0072,2051,676,3111,810,20010,333,5176,867,353 1,688,274 - - - - 3,400,0003,000,000 39,676 - - - - 1,137,3111,115,399 - (671,980)392,564(1,515,564)(940,849)9,000,78812,594,349 1,727,950(671,980)392,564(1,515,564)(940,849)13,538,09916,709,748 $2,036,623$487,027$394,769$160,747$869,351$23,871,616$23,577,101 Fund balance reported above$13,538,099$16,709,748 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources, and therefore, are not reported in the funds2,023,511 - Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds5,080,3192,769,156 Net assets of governmental activities$20,641,929$19,478,904 133 CITY OF FRIDLEY, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS HOUSINGANDREDEVELOPMENTAUTHORITY HOUSINGANDREDEVELOPMENTAUTHORITY For The Year Ended December 31, 2008 With comparative totals for the year ended December 31, 2007 General FundHousing LoanCenter City Revenues: Tax increment$ - $ - $597,743 Property taxes367,942 - - Investment income173,881129,386100,319 Intergovernmental revenue17,767 -17,104 Mortgage interest earnings4,89447,659 - Rental9,600 - - Saleofrealestateae o rea esae71891, - - Slfltt71891 Miscellaneous -18,410 - Receipt from primary government535,000 - - Total revenues1,180,975195,455715,166 Expenditures: Personal services107,214 - - Supplies and other charges275,,99851,,0727,,005 Suppliesandothercharges275998510727005 Capital outlay1,347,540 - - Developer assistance - - - Interest expense -16,547 - Payment to primary government - - - Total expenditures1,730,75267,6197,005 Excess (deficiency) of revenues over (d)dit(under) expenditures(549777)(549,777)127836127,836708161708,161 Fund balance - January 17,947,5693,991,4742,320,715 Fund balance - December 31$7,397,792$4,119,310$3,028,876 134 Exhibit G-2 Other North Area / Governmental Univ. Ind. ParkLake PointeOnanGateway WestFunds Totals Governmental Funds 20082007 $1,319,401$718,986$379,598$3,980$309,581$3,329,289$3,586,097 - - - - - 367,942351,957 37,6935,13323,84031833,770504,340659,721 - - - 38011,70846,95958,361 - - - - - 52,55351,708 - - - - - 9,6009,600 - - - - - 71891,154616, 71891154616 - - - 14,375 - 32,78514,976 - - - - - 535,00017,150 1,357,094724,119403,43819,053355,0594,950,3594,904,186 - - - - - 107,214109,569 2,,8201,,5321,,7897,,034196,,250543,,500488,,232 2820153217897034196250543500488232 - - 1,690,00061,3871,825,0224,923,9491,718,000 - 647,087 - - 24,246671,333673,852 - - - - - 16,54719,963 1,819,400 - - - 40,0651,859,4652,530,260 1,822,220648,6191,691,78968,4212,085,5838,122,0085,539,876 (465126)(465,126)75,500(1,288,351)(49,368)(1,730,524)(3,171,649)(635,690)75500(1288351)(49368)(1730524)(3171649)(635690) 2,193,076(747,480)1,680,915(1,466,196)789,67516,709,74817,345,438 $1,727,950($671,980)$392,564($1,515,564)($940,849)$13,538,099$16,709,748 Amounts reported for governmental activities in the statement of activities (ExhibitA2)aredifferentbecause:- (ExhibitA2)aredifferentbecause: Net changes in fund balances - total above($3,171,649)($635,690) Governmental funds reported capital outlays as expenditures to purchase land. However, in the statement of activities, these expenditures are not shown because the asset is recorded on the statement of net assets.4,340,773 - ,30,3 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds(6,099)1,506,687 Change in net assets of governmental activities (Exhibit A-2)$1,163,025$870,997 135 CITY OF FRIDLEY, MINNESOTA SUBCOMBINING BALANCE SHEET NONMAJOR CAPITAL PROJECT FUNDS HOUSING AND REDEVELOPMENT AUTHORITY December 31, 2008 With comparative totals for December 31, 2007 Moore Lake University / AreaWinfieldGateway EastOsborne Assets Cash and investments$ - $120,504$1,317$104,654 Due from other governments - - 4,890 - Receivables: Taxes: Unremitted -70 - 8 Delinquent - - 3 - Land held for resale - - - - Total assets$0$120,574$6,210$104,662 Liabilities and Fund Balance Liabilities: Accounts payable$ - $ - $ - $103,511 Due to primary government - - - - Due to other governments -391689790 Due to other funds - - 824,653107,000 Deferred revenue - - 3 - Total liabilities0391 825,345 211,301 Fund balance (deficit): Unreserved, undesignated - 120,183(819,135)(106,639) Total fund balance (deficit)0 120,183 (819,135)(106,639) Total liabilities and fund balance$0$120,574$6,210$104,662 136 Exhibit G-3 McGlynnSatellite Lane 57th Avenue Housing Totals Nonmajor Capital Project BakeriesApts.RedevelopmentTIF #19Replacement #1 Funds 20082007 $88,970$158,531$14,594$1,934$292,047$782,551$1,856,923 - 4,322 - - 2,49611,708 - - - 11 - - 892,581 - - - - - 38,100 - - - - 75,00075,000180,000 $88,970$162,853$14,605$1,934$369,543$869,351$2,047,604 $87,511$156,000$12,101$ - $ - $359,123$10,416 - - - - - - - 7816543993915664,661 - 104,000162,000128,76045,000 - 1,371,4131,059,413 - - - - 75,00075,003188,100 192,292 318,654 141,260 45,391 75,566 1,810,200 1,257,929 (103,322)(155,801)(126,655)(43,457)293,977(940,849)789,675 (103,322)(155,801)(126,655)(43,457)293,977 (940,849)789,675 $88,970$162,853$14,605$1,934$369,543$869,351$2,047,604 137 CITY OF FRIDLEY, MINNESOTA SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR CAPITAL PROJECT FUNDS HOUSING AND REDEVELOPMENT AUTHORITY For The Year Ended December 31, 2008 With comparative totals for the year ended December 31, 2007 Moore Lake University / AreaWinfieldGateway EastOsborne Revenues: Tax increment$ - $72,420$42,968$51,543 Investment income1199,0961,6614,072 Intergovernmental revenue - - 4,890 - Total revenues11981,51649,51955,615 Expenditures: Supplies and other charges6311,4452,03059,213 Developer assistance - - - - Payment to primary government40,065 - - - Capital outlay - 578,000 - 403,511 Total expenditures40,696579,4452,030462,724 Excess (deficiency) of revenues over (under) expenditures(40,577)(497,929)47,489(407,109) Fund balance (deficit) - January 140,577618,112(866,624)300,470 Fund balance (deficit) - December 31$0$120,183($819,135)($106,639) 138 Exhibit G-4 Housing McGlynnSatellite Lane 57th Avenue Replacement Totals Nonmajor Capital Project BakeriesApts.Redevelopment#1 TIF #19Funds 20082007 $40,260$48,478$26,939$ - $26,973$309,581$827,287 2,7815,21811814610,55933,77070,404 - 4,322 - - 2,49611,70822,129 43,04158,01827,05714640,028355,059919,820 59,19558,5601,46210,5453,169196,25048,239 - - 24,246 - - 24,24620,965 - - - - - 40,0651,291,935 287,511556,000 - - - 1,825,022 - 346,706614,56025,70810,5453,1692,085,5831,361,139 (303,665)(556,542)1,349(10,399)36,859(1,730,524)(441,319) 200,343400,741(128,004)(33,058)257,118789,6751,230,994 ($103,322)($155,801)($126,655)($43,457)$293,977($940,849)$789,675 139 CITY OF FRIDLEY 140 AGENCY FUNDS 141 Exhibit H-1 CITY OF FRIDLEY, MINNESOTA STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For The Year Ended December 31, 2008 BalanceBalance January 1,December 31, 2008AdditionsDeletions2008 Six Cities Watershed Assets: Cash and investments$29,367$3,134$ - $32,501 Receivables: Taxes: Unremitted34523452 Delinquent163170163170 Total assets$29,564$3,356$197$32,723 Liabilities: Due to other governments$29,564$3,356$197$32,723 Hotel/Motel Tax Assets: Cash and investments$2,240$2,098$4,446($108) Receivables: Accounts2,0982,1482,0982,148 Total assets$4,338$4,246$6,544$2,040 Liabilities: Due to other governments$4,338$2,040$4,338$2,040 Totals Assets: Cash and investments$31,607$5,232$4,446$32,393 Receivables: Accounts2,0982,1482,0982,148 Taxes: Unremitted34523452 Delinquent163170163170 Total assets$33,902$7,602$6,741$34,763 Liabilities: Due to other governments$33,902$5,396$4,535$34,763 142 III. STATISTICAL SECTION (UNAUDITED) 143 Statistical Section (Unaudited) This part of the City of Fridley's statistical's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health. ContentsPage Financial Trends145 These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. Revenue Capacity150 These schedules contain information to help the reader assess the factors affecting the City's ability to generate its property tax. Debt Capacity155 These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. Demographic and Economic Information159 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments. Operating Information162 These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The City implemented Statement 34 in 2003; the City has chosen to provide information for that year forward. Ultimately, these schedules will contain information for the last ten years. 144 Table 1 CITY OF FRIDLEY, MINNESOTA NET ASSETS BY COMPONENT Last six fiscal years(1) (Accrual Basis of Accounting) 200320042005200620072008 Governmental activities: Invested in capital assets, net of related debt$18,930,543$18,305,647$18,458,113$18,635,605$18,245,265$17,490,936 Restricted2,395,446 1,664,772 1,540,531 1,591,936 1,711,255 2,193,410 Unrestricted10,326,790 11,735,908 13,331,115 15,140,831 17,244,490 18,845,006 Total governmental activities net assets$31,652,779$31,706,327$33,329,759$35,368,372$37,201,010$38,529,352 Business-type activities: Invested in capital assets, net of related debt$17,003,867$14,528,247$16,454,772$17,354,621$16,951,085$16,381,443 Restricted - - - - - - Unrestricted9,663,80711,814,6499,258,9847,955,4267,722,4587,869,185 Total business-type activities net assets$26,667,674$26,342,896$25,713,756$25,310,047$24,673,543$24,250,628 Primary government: Invested in capital assets, net of related debt$35,934,410$32,833,894$34,912,885$35,990,226$35,196,350$33,872,379 Restricted2,395,4461,664,7721,540,5311,591,9361,711,2552,193,410 Unrestricted19,990,59723,550,55722,590,09923,096,25724,966,94826,714,191 Total primary government net assets$58,320,453$58,049,223$59,043,515$60,678,419$61,874,553$62,779,980 (1) The City implemented GASB Statement No. 34 for the fiscal year ended December 31, 2003. Therefore, information for years prior to 2003 is not available. 145 Table 2 Page 1 of 2 CITY OF FRIDLEY, MINNESOTA CHANGES IN NET ASSETS Last six fiscal years(1) (Accrual basis of accounting) 200320042005200620072008 Expenses Governmental activities: General government$3,944,682$3,513,065$4,448,175$4,177,829$4,074,480$3,646,436 Public safety5,166,9755,468,0145,514,3306,023,3356,260,8066,774,610 Public works3,749,4123,612,3184,105,8603,868,5174,208,7654,771,748 Community development939,918602,335793,8361,118,661863,8501,479,455 Parks, recreation and naturalist1,105,240993,570767,5991,147,9661,312,5021,303,063 Interest on long-term debt605,639544,478443,533397,036416,850377,884 Total governmental activities expenses15,511,86614,733,78016,073,33316,733,34417,137,25318,353,196 Business-type activities: Liquor5,010,6365,005,1984,919,4584,793,4194,920,5114,937,776 Water2,030,6542,086,5132,070,0322,138,3712,279,0342,378,101 Sanitary sewer3,419,1003,256,3713,570,1133,629,3613,798,0534,065,899 Storm water359,189334,906320,596331,039381,944373,989 Total business-type activities expenses10,819,57910,682,98810,880,19910,892,19011,379,54211,755,765 Total primary government expenses$26,331,445$25,416,768$26,953,532$27,625,534$28,516,795$30,108,961 Program revenues Governmental activities: Charges for services: General government$1,301,146$1,032,130$1,263,265$1,443,361$1,468,699$1,600,769 ,,,,,, Publicsafety542725539334569993609721709209759892 Publicsafety542725539334569993609721709209759892 Public works77,166286,165189,766197,96849,39964,042 Community development411,300441,649599,870470,733656,674510,908 Parks, recreation and naturalist293,142369,736331,298346,382381,432376,621 Operating grants and contributions1,481,7231,009,8611,121,7261,304,510930,593818,805 Capital grants and contributions1,012,151882,2921,657,1061,919,108834,7482,078,572 Total governmental activities program revenues5,119,3534,561,1675,733,0246,291,7835,030,7546,209,609 Business-type activities: Charges for services: Liquor5,364,5885,376,4285,283,2295,136,0295,252,9105,275,467 Water1,806,3581,763,6231,771,8461,929,5731,990,0472,110,621 Sanitary sewer3,183,2603,248,9523,299,9573,345,0173,461,6153,873,806 Storm water366,667381,360384,860391,032392,016404,562 Operating grants and contributions37,976208600514 - - Capital grants and contributions - - - - - - Total business-type activities program revenues10,758,84910,770,57110,740,49210,802,16511,096,58811,664,456 Total primary government program revenues$15,878,202$15,331,738$16,473,516$17,093,948$16,127,342$17,874,065 146 Table 2 Page 2 of 2 CITY OF FRIDLEY, MINNESOTA CHANGES IN NET ASSETS Last six fiscal years(1) (Accrual basis of accounting) 200320042005200620072008 Net (expense) revenue: Governmental activities($10,392,513)($10,172,613)($10,340,309)($10,441,561)($12,106,499)($12,143,587) Business-type activities(60,730)87,583(139,707)(90,025)(282,954)(91,309) Total primary government net (expense) revenue(10,453,243)(10,085,030)(10,480,016)(10,531,586)(12,389,453)(12,234,896) General revenues and other changes in net assets Governmental activities: General property taxes$5,273,363$5,816,656$7,428,226$8,253,653$8,986,924$9,068,718 Grants not restricted to programs3,751,5603,436,4733,365,7392,623,4073,152,4213,240,081 Investment earnings423,215413,743511,464998,1541,111,116687,665 Gain on sale of property10,4686804343,35759,438(24,802) Other - - - 1,60329,238267 Transfers - - - 600,000600,000500,000 Total governmental activities9,458,6069,667,55211,305,86312,480,17413,939,13713,471,929 Business-type activities: Investment earnings118,029146,248168,445281,316245,172168,394 Gain on sale of property6,530 - - 5,0001,278 - Other6,502 - - - - - Transfers - - - (600,000)(600,000)(500,000) Total business-type activities131,061146,248168,445(313,684)(353,550)(331,606) rimarovernment9,589,6679,813,80011,474,30812,166,49013,585,58713,140,323 Total pyg$,,$,,$,,$,,$,,$,, Totalprimarygovernment$9589667$9813800$11474308$12166490$13585587$13140323 Change in net assets: Governmental activities($933,907)($505,061)$965,554$2,038,613$1,832,638$1,328,342 Business-type activities70,331233,83128,738(403,709)(636,504)(422,915) Total primary government($863,576)($271,230)$994,292$1,634,904$1,196,134$905,427 (1) The City implemented GASB Statement No. 34 for the fiscal year ended December 31, 2003. Therefore, information for years prior to 2003 is not available. 147 Table 3 CITY OF FRIDLEY, MINNESOTA FUND BALANCES, GOVERNMENTAL FUNDS Last six fiscal years(1) (Modified accrual basis of accounting) 200320042005200620072008 General Fund: Reserved$43,502$83,822$81,662$77,476$65,528$48,561 Unreserved: General fund4,338,4634,080,0124,020,2853,863,0235,206,7784,538,224 Designated for employee benefits - - - - - - Designated for contingencies - - - - - - Undesignated - - - - - - Total general fund$4,381,965$4,163,834$4,101,947$3,940,499$5,272,306$4,586,785 All other governmental funds: Reserved for: Long-term receivables$645,330$541,244$480,123$415,908$348,441$277,560 Public safety - 1,155,225688,214203,13120,72625,590 Debt service609,992509,547389,197721,8661,214,5191,564,217 Unreserved, reported in: Special revenue funds2,172,012541,7481,098,9951,106,6231,189,1401,258,926 Capital projects funds6,490,4287,001,3906,881,5236,963,5245,223,5635,883,958 Debt service5,508,8085,522,6475,976,8885,991,1026,201,350 - Total all other governmental funds$15,426,570$15,271,801$15,514,940$15,402,154$14,197,739$9,010,251 (1) The City implemented GASB Statement No. 34 for the fiscal year ended December 31, 2003. Therefore, information for years prior to 2003 is not available. iftifit2003itilbl 148 Table 4 CITY OF FRIDLEY, MINNESOTA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS (1) Last six fiscal years 200320042005200620072008 Revenues: General property taxes$5,305,289$5,809,631$7,397,381$8,220,943$8,927,963$9,052,719 Special assessments470,648300,389550,909691,764635,817589,790 Licenses and permits722,541785,582865,848876,9031,080,787946,285 Intergovernmental4,075,0233,207,4822,767,7242,663,9091,872,6432,742,981 Charges for services1,500,4291,533,2531,736,1811,855,1771,830,4162,015,796 Fines and forfeits216,368176,878164,104261,535298,359316,646 Earnings on investments330,133325,307411,333828,877920,850560,629 Interest on loan32,05629,25326,30823,21319,96216,547 Other2,023,5442,085,0692,625,8992,154,6562,288,3092,220,276 Total revenues14,676,031 14,252,844 16,545,687 17,576,977 17,875,106 18,461,669 Expenditures: Current: General government3,569,9523,155,6174,244,4963,567,5033,893,9523,338,228 Public safety4,925,5255,156,5295,204,5515,821,5235,999,5576,323,910 Public works2,712,4212,608,3162,940,8692,944,9113,025,1573,406,468 Community development934,151593,393671,1731,113,543861,8721,189,033 Parks, recreation and naturalist1,068,875960,723737,0941,118,3921,194,2901,366,154 Debt service: Principal1,180,0005,155,0006,095,0001,555,0001,825,0002,075,000 Interest 627,899561,045422,366330,431359,010379,340 Bond issuance costs2,20132,96835,99731,74242,9869,139 Capital outlay1,705,270869,7703,112,7004,452,5003,114,2032,684,938 - - - - - Contingency907 Contingency907 Total expenditures 16,726,294 19,093,361 23,465,153 20,935,545 20,316,027 20,772,210 Revenues over (under) expenditures (2,050,263) (4,840,517) (6,919,466) (3,358,568) (2,440,921) (2,310,541) Other financing sources (uses): Refunding bond issues - 3,920,000 - - - - Bonds issued - - 6,450,0002,505,0001,910,0001,915,000 Premium/(discount) on bonds issue - (10,992)(7,160)(30,720) - - Proceeds from sale of capital assets - - - 10,05458,31313,101 Transfers in579,109558,609657,8784,966,400600,0003,926,563 Transfers out - - - (4,366,400) - (3,380,023) Total other financing sources (uses) 579,109 4,467,617 7,100,718 3,084,334 2,568,313 2,474,641 Net change in fund balance($1,471,154)($372,900)$181,252($274,234)$127,392$164,100 Debt service as a percentage of noncapital expenditures12.1%31.5%32.2%11.6%12.9%13.6% Debt service as percentage of total expenditures10.8%30.1%27.9%9.2%11.0%11.9% (1) The City implemented GASB Statement No. 34 for the fiscal year ended December 31, 2003. Therefore, information for years prior to 2003 is not available. 149 CITY OF FRIDLEY, MINNESOTA TAX CAPACITY VALUE AND ESTIMATED MARKET VALUE OF TAXABLE PROPERTY Last Ten Fiscal Years Commercial/ FiscalResidentialIndustrialPublicAll YearPropertyPropertyUtilityOther 1999 2000 Information Not Availiable 2001 2002 2003 2004$11,163,343$12,740,016$44,539$3,388,828 200512,619,94812,517,53246,5633,762,125 200614,320,78613,166,65746,8613,833,436 200715,074,00814,500,00846,9534,236,896 200815,334,12615,809,59442,7384,370,011 Source: Continuing Disclosure Document 150 Table 5 Less: TotalFiscalAdjustedTotalEstimatedTax Capacity TaxDisparityTax CapacityDirect TaxMarketas a Percent CapacityContributionValueRateValueof EMV $24,858,801$4,337,632$20,521,16918.326$1,293,664,300121.14% 25,967,4244,312,75921,654,66517.0701,335,542,900119.92% 29,851,6804,769,07425,082,60616.3501,518,347,800119.01% 22,380,1593,223,21419,156,94529.9061,688,141,100116.83% 25,007,7893,579,12821,428,66128.6161,958,021,100116.70% 27,336,7264,292,06123,044,66530.2482,149,055,100118.62% 28,946,1684,624,09124,322,07733.5652,278,619,300119.01% 31,367,7404,115,59527,252,14531.9412,469,670,100115.10% 33,857,8654,587,79428,341,51431.3492,616,727,300119.46% 35,556,4695,221,35530,303,83230.3242,701,388,800117.33% 151 CITY OF FRIDLEY MINNESOTA DIRECT AND OVERLAPPING PROPERTY TAX CAPACITY RATES Last Ten Fiscal Years SchoolSchoolSchool FiscalDistrictDistrictDistrict YearCityNo. 11No. 13No. 14 199918.326%54.856%68.837%67.728% 200017.070%51.792%66.685%61.655% 200116.350%52.281%47.452%45.466% 200229.906%29.082%38.614%17.855% 200328.616%26.941%20.303%29.966% 200430.248%21.050%22.833%22.683% 200533.565%21.492%19.993%21.606% 200631.941%20.046%19.571%20.830% 200731.349%19.353%17.183%24.175% 200830.324%16.983%15.942%26.033% Source: Continuing Disclosure Document Notes: (1) Vocational/Technical District #916 is included in District No. 16. (2) Six Cities Watershed District is included with School District No. 11. (3) Rice Creek Watershed District is included with School District No. 13, 14 and 16. (4) Stonybrook Creek Subwatershed is included with School District No. 11 and 14. 152 Table 6 SchoolTotalSchoolSchoolSchoolSchool DistrictSpecialDistrictDistrictDistrictDistrict (1)(2, 4)(3)(3, 4)(1, 3) No. 16No. 11No. 13No. 14No. 16 CountyDistricts 61.111%32.265%6.603%114.104%128.158%127.049%120.765% 51.440%30.861%8.224%108.610%123.385%118.575%108.621% 39.458%28.859%8.218%106.287%101.819%99.833%94.139% 25.985%37.976%7.528%105.313%115.198%94.439%102.639% 22.054%37.714%7.666%102.483%96.360%105.925%98.111% 21.421%35.221%7.623%95.446%97.758%97.525%96.346% 16.118%33.080%8.085%96.945%96.329%97.942%92.454% 17.437%32.096%7.411%92.136%92.813%94.072%90.679% 25.779%30.696%6.829%88.666%87.770%94.762%96.366% 26.213%31.078%7.803%86.608%87.135%97.226%97.406% 153 Table 7 CITY OF FRIDLEY, MINNESOTA PRINCIPAL PROPERTY TAXPAYERS Current year and nine years ago 20081999 Percentage Percentage Taxableof Total CityTaxableof Total City CapacityCapacityCapacityCapacity TaxpayerValueRankValueValueRankValue Medtronic, Inc.$1,785,02015.02%$931,95323.75% TargetCorporation727,988 2 2.05%1,144,708 1 4.60% Shamrock Investments629,196 3 1.77%388,175 3 1.56% Retail Trust IV (Wal-Mart/Sam's)388,230 4 1.09%347,597 6 1.40% Cummins Power (Onan)301,990 5 0.85%0 10 0.00% Northwest Racquet & Swim Club300,394 60.84%365,926 5 1.47% Maurice Fillister (Georgetown)278,674 7 0.78%71,700 8 0.29% University Avenue Associates269,458 8 0.76%387,252 4 1.56% Riverpointe Apartments212,332 9 0.60%207,376 7 0.83% Burlington Northern Railroad14,668 10 0.04%30,111 9 0.12% Total$4,907,95013.80%$3,874,79815.58% Total All Property$35,556,469$24,858,801 Source: City Assessor 154 Table 8 CITY OF FRIDLEY, MINNESOTA PROPERTY TAX LEVIES AND COLLECTIONS Last ten fiscal years Collected Within The FiscalTaxesCollections Fiscal Year of the LevyTotal Collections to Date YearLeviedin EndedFor ThePercentageSubsequentPercentage 31-DecFiscal YearAmount(1)of LevyYearsAmountof Levy 1999$4,034,919$4,064,819100.74%$36,168$4,100,987101.64% 20004,035,671 3,928,752 97.35%44,5653,973,31798.45% 20014,205,000 4,147,788 98.64%8,6234,156,41198.84% 20025,613,1315,579,77799.41%40,3545,620,131100.12% 20035,825,8555,763,09798.92%40,7805,803,87799.62% 20046,483,7456,310,42997.33%39,2106,349,63997.93% 20058,067,9497,699,29095.43%27,8697,727,15995.78% 20068,757,1888,517,85597.27%132,0478,649,90298.77% 20079,200,4269,332,688101.44%103,4939,436,181102.56% 20089,527,4339,324,10097.87%N/A9,324,10097.87% (1) Excess TIF collections included of $235,704 Source: City Finance Department. 155 CITY OF FRIDLEY, MINNESOTA RATIOS OF OUTSTANDING DEBT BY TYPE Last ten fiscal years Governmental Activities Percentage of Estimated FiscalImprovementTax IncrementMarket Value YearBondsBondsTotalof Property 1999$1,070,000$13,685,000$14,755,0001.14% 2000845,00013,610,00014,455,0001.08% 2001615,00012,735,00013,350,0000.88% 2002465,00011,735,00012,200,0000.72% 2003315,00010,705,00011,020,0000.56% 2004190,0009,595,0009,785,0000.46% 20051,805,0008,335,00010,140,0000.45% 20064,310,0006,780,00011,090,0000.45% 20076,065,0005,110,00011,175,0000.43% 20087,615,0003,400,00011,015,0000.41% 156 Table 9 Business Type Activities EstimatedTotal Market ValueSewer/WaterTotalPer PrimaryPer of PropertyPopulationBondsBusiness TypeCustomerGovernmentCapita $1,293,664,30028,623$5,325,000$5,325,000650$20,080,000515 1,335,542,90027,4493,880,0003,880,00047318,335,000527 1,518,347,80027,8543,530,0003,530,00042816,880,000479 1,688,141,10027,8773,170,0003,170,00038315,370,000438 1,958,021,10027,4602,800,0002,800,00033813,820,000401 2,149,055,10027,4805,405,0005,405,00065715,190,000356 2,278,619,30027,0883,815,0003,815,00045813,955,000374 2,469,670,10026,6793,420,0003,420,00041514,510,000416 2,616,727,30026,6033,015,0003,015,00036614,190,000420 2,701,388,80026,4596,440,0006,440,00078217,455,000416 157 Table 10 CITY OF FRIDLEY, MINNESOTA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT December 31, 2008 Estimated EstimatedShare of DebtPercentageOverlapping Governmental UnitOutstandingApplicable*Debt Debt repaid with property taxes: Independent School District No. 11$202,962,1991.60%$3,247,395 Independent School District No. 1326,380,00031.46%8,299,148 Independent School District No. 1438,585,000100.00%38,585,000 Independent School District No. 16119,515,00036.80%43,981,520 Metro Council1,116,379,8761.19%13,284,921 Anoka County143,551,35918.04%25,896,665 Vocational/Technical District No. 9169,710,0002.21%214,591 Subtotal - overlapping debt133,509,240 City of Fridley - Direct debt17,455,00014,190,000 Total direct and overlapping debt$147,699,240 158 Table 11 CITY OF FRIDLEY, MINNESOTA LEGAL DEBT MARGIN INFORMATION Last ten fiscal years Market Value$2,701,388,800 Debt Limit 3% of Market Value$81,041,664 Amount of Debt Applicable to Debt Limit: Total Debt$17,455,000 Deductions: Tax Increment Redevelopment Bonds$3,400,000 Improvement Bonds7,615,000 Revenue Bonds6,440,00017,455,000 Total Amount of Debt Applicable to Debt Limit - Legal Debt Margin$81,041,664 Legal Debt Margin Calculation for the last 10 Fiscal Years Net DebtLegalAmount of Debt FiscalDebtApplicable toDebtApplicable to YearLimitLimitMarginDebt Limit 1999$25,486,970$ - $25,486,9700.00% 200026,327,646 - 26,327,6460.00% 200129,985,162 - 29,985,1620.00% 200233,380,154 - 33,380,1540.00% 200338,755,912 - 38,755,9120.00% 200442,589,016 - 42,589,0160.00% 200545,168,942 - 45,168,9420.00% 200649,393,402 - 49,393,4020.00% 200752,334,546 - 52,334,5460.00% 200881,041,664 - 81,041,6640.00% 159 CITY OF FRIDLEY, MINNESOTA PLEDGED-REVENUE COVERAGE Last ten fiscal years Improvement BondsUtility Revenue Bonds SpecialUtilityLess FiscalAssessmentDebt ServiceServiceOperating YearCollectionsPrincipalInterestCoverageRevenuesExpenses 1999$494,241$220,000$63,4261.74$5,389,003$5,242,663 2000507,953 225,000 51,874 1.835,150,374 4,965,373 2001497,208230,00039,7701.844,994,6695,148,461 2002463,579150,00029,6082.585,016,2335,251,371 2003449,867150,00021,6082.625,330,6035,664,739 2004273,81390,00010,3582.735,371,6625,430,082 2005542,548190,0005,3402.785,435,3615,821,541 2006671,204 - 67,4669.955,648,7205,977,607 20066712046746699556487205977607 2007602,988155,000160,4231.915,832,9046,350,572 2008561,221365,000230,3250.946,379,9846,631,304 160 Table 12 Utility Revenue BondsTax Increment Bonds Net Tax Debt ServiceDebt Service AvaliableIncrement RevenuePrincipalInterestCoverageCollectionsPrincipalInterestCoverage $146,340$300,000$281,9750.25$2,818,753$535,000$687,1632.31 185,001 1,445,000 197,277 0.112,819,343 75,000 701,189 3.63 (153,792)350,000175,115-0.293,145,594875,000697,7012.00 (235,138)360,000158,422-0.452,564,0401,000,000654,6641.55 (334,136)370,000141,002-0.653,624,9681,030,000606,2912.22 (58,420)390,000334,960-0.083,078,4265,065,000546,9100.55 (386,180)1,590,000139,200-0.223,224,2045,905,000417,0260.51 (328,887)395,000121,164-0.642,649,0201,555,000262,9651.46 (328887)39500012116406426490201555000262965146 (517,668)305,000108,351-1.253,586,0971,670,000199,4881.92 (251,320)300,000149,481-0.563,329,2891,710,000149,0151.79 161 Table 13 CITY OF FRIDLEY, MINNESOTA DEMOGRAPHIC AND ECONOMIC STATISTICS Last ten fiscal years Total Per Capita FiscalUnemploymentPersonalPersonal YearPopulationRateIncomeIncome 199928,6232.3%$690,186,399$24,113 200027,4492.8%696,024,29325,357 200127,8543.6%724,064,73025,995 200227,8774.4%789,588,14828,324 200327,4604.3%622,985,02022,687 200427,4804.8%691,644,12025,169 200527,0884.2%695,674,01625,682 200626,6794.2%703,978,77326,387 200726,6034.8%712,747,57626,792 200826,4595.7%708,889,52826,792 Sources: Metropolitan Council (population), Continuing Disclosure Document (unemployment rate) 162 Table 14 CITY OF FRIDLEY, MINNESOTA PRINCIPAL EMPLOYERS Current year and nine years ago 20081999 Percentage Percentage of Total Cityof Total City EmployerEmployeesRankEmploymentEmployeesRankEmployment Medtronic,, Inc..2,,500110.58%4.,,250116.19%. MedtronicInc250011058%425011619% 1,8002 7.62%1,32135.03% United Defense Systems 1,7273 7.31%1,53025.83% Cummins Power (Onan) Unity Medical Center1,4004 5.92%44081.68% Target6005 2.54%415101.58% Minco Products5006 2.12%68542.61% 3507 1.48%65052.48% Kurt Manufacturing Park Construction3008 1.27% - 0.00% Parsons Electric3009 1.27%46071.75% Wal-Mart26210 1.11% - 0.00% -0.00%43591.66% Burlington McGlynn's -0.00%46361.76% Total9,73941.21%10,64940.56% Total City Employment23,63526,257 Source: Continuing Disclosure Documents, Minnesota Department of Employment and Economic Development and the Met Council. 163 CITY OF FRIDLEY, MINNESOTA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM Last Ten Fiscal Years Full-Time Equivalent Employees as of December 31, Function/Program1999200020012002 General government: City Administration4434 Finance21212424 Human Resource2222 Community Development991010 Public safety: Police department49495050 Fire department7788 Public works: Administration6555 Engineering4443 Mechanic2333 Streets9999 Water6666 Sewer5565 Parks6666 Parks and recreation: Recreation and Naturalist8888 Total138138144143 Source: City Finance Department 164 Table 15 Full-Time Equivalent Employees as of December 31, 200320042005200620072008 433333 242323232222 222222 10881079 504646474444 988998 544422 322244 333333 999999 655555 555555 777777 9581188 146130133140130131 165 CITY OF FRIDLEY, MINNESOTA OPERATING INDICATORS BY FUNCTION/PROGRAM Last Ten Fiscal Years Fiscal Year Function/Program199920002001 Police: Physical arrests1,8501,3291,645 Parking violationsN/A1,344513 Traffic violationsN/A1,7241,435 Fire: Emergency responses2,2672,2942,293 Fires occurred121113105 Inspections (Fire and Rental)N/A3231,145 Refuse collection: Recyclables collected (tons per day)6.906.896.80 Building inspection: Permits issued: Residential1,632836667 Commercial909670 Total permit valuation$42,636,736$101,645,877$21,808,039 Other public works: Street resurfacing (miles)4.21.31.2 Water: Connections8,1818,1958,209 Storage capacity (gallons)6,500,0006,500,0006,500,000 Average daily demand (gallons)550,000550,000550,000 Peak daily demand (gallons)900,000900,000900,000 Sewer: Connections8,1908,1858,219 Sources: Various City departments. No operating indicators were available for the Parks, recreation and naturalist function. 166 Table 16 Fiscal Year 2002200320042005200620072008 1,4471,3339561,2051,2921,2901,357 635532644884572792419 2,2092,4292,1291,7895,1524,0354,994 2,5572,5492,4062,7192,5682,8042,827 144124137107127109116 1,4271,4251,6511,4671,0155,6931,994 6.756.706.706.696.956.966.12 7306426247507681,2061,444 52659986115366418 $11,619,328$16,078,198$22,029,469$25,057,537$21,750,596$47,871,624$39,105,158 1.21.21.24.14.83.74.1 8,2548,2798,2888,2328,2358,2308,233 6,500,0006,500,0006,500,0006,500,0006,500,0006,500,0006,500,000 550,000550,000646,000550,000550,000550,000550,000 900,000900,0001,319,0001,000,0001,099,0001,099,0001,099,000 8,2638,2888,2978,2508,2448,2388,242 167 CITY OF FRIDLEY, MINNESOTA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Last Ten Fiscal Years Fiscal Year Function/Program1999200020012002 Police: Stations1111 Squad cars11111112 Fire stations3333 Other public works: Streets (miles)126.1127.2127.2127.2 Highways (miles)10.810.810.810.8 Streetlights1,0541,0541,0541,054 Traffic signals35353535 Parks, recreation and naturalist: Acreage682682682682 Playgrounds29292929 Baseball/softball diamonds22222222 Soccer/football fields2222 Community centers1111 Citt1111 Water: Water mains (miles)112.9112.9112.9112.9 Fire hydrants1,084998998998 Storage capacity (gallons)6.5 million6.5 million6.5 million6.5 million Wastewater: Sanitary sewers (miles)103.0103.0103.0103.0 Storm sewers (miles)46.649.349.349.3 Sources: Various City departments. 168 Table 17 Fiscal Year 200320042005200620072008 111111 121212121212 333333 127.2127.0127.0127.0127.0127.0 10.810.811.011.011.011.0 1,0541,0541,0551,0551,0551,055 353535353535 682682682682682682 292929292929 222222222222 222222 111111 111111 112.9112.9112.9113.0113.0113.0 9989981,0121,0131,0131,013 6.5 million6.5 million6.5 million6.5 million6.5 million6.5 million 103.0103.0103.0103.0103.0103.0 49.349.350.052.052.052.0 169 CITY OF FRIDLEY 170