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1996 CAFR COMPREHENSIVE ANNUAL FINANCIAL REPORT sue'` CITY OF FRIDLEY MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 1996 CITY OF FRIDLEY, MINNESOTA Comprehensive Annual Financial Report December 31, 1996 Prepared by: Finance Department Richard D. Pribyl Finance Director CITY OF FRIDLEY.MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31.1996 TABLE OF CONTENTS EXHIBIT PAGE INTRODUCTORY SECTION ... List of Elected and Appointed Officials 1 Organizational Structure 2 City Manager's Letter of Transmittal 5 Chief Executive Officer's Letter of Transmittal 7 —. Certificate of Achievement for Excellence in Financial Reporting 17 — FINANCIAL SECTION Auditors'Opinion 19 — General Purpose Financial Statements Combined Financial Statements-Overview Combined Balance Sheet-All Fund Types and Account Groups and Discretely Presented Component Units A-1 22 Combined Statement of Revenues, Expenditures and Changes in Fund Balances-All Governmental Fund Types and Expendable Trust Funds and Discretely Presented Component Units A-2 26 Combined Statement of Revenues,Expenditures and • Changes in Fund Balances-Budget and Actual- General,Special Revenue and Budgeted Capital Project Fund Types A-3 28 Combined Statement of Revenues, Expenses and Changes in Retained Earnings-All Proprietary Fund Types A-4 31 Combined Statement of Cash Flows All Proprietary Fund Types A-5 32 Notes to Financial Statements 34 Financial Statements of Individual Funds: General Fund: Comparative Balance Sheet B-1 67 Statement of Revenues, Expenditures and Changes in Fund Balance-Budget and Actual B-2 68 Schedule of Revenues and Other Financing Sources- Budget and Actual B-3 69 CITY OF FRIDLEY. MINNESOTA — COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31.1996 TABLE OF CONTENTS(CONTINUED) EXHIBIT PAGE FINANCIAL SECTION (CONTINUED) -� General Fund:(continued) Schedule of Expenditures and Other Financing Uses — Budget and Actual B-4 71 Special Revenue Funds: Combining Balance Sheet C-1 76 Combining Statement of Revenues, Expenditures and Changes in Fund Balances C-2 78 — Cable TV Fund: Comparative Balance Sheet C-3 80 Statement of Revenues, Expenditures and Changes in Fund Balance-Budget and Actual C-4 81 Grant Management Fund: Comparative Balance Sheet C-5 82 Statement of Revenues,Expenditures and Changes in Fund Balance-Budget and Actual C-6 83 Solid Waste Abatement Fund: — Comparative Balance Sheet C-7 84 Statement of Revenues, Expenditures and Changes in Fund Balance-Budget and Actual C-8 85 HRA Reimbursement Fund: — Comparative Balance Sheet C-9 86 Statement of Revenues, Expenditures and Changes in Fund Balance-Budget and Actual C-10 87 Drug and Gambling Forfeiture Fund: Comparative Balance Sheet C-11 88 — Statement of Revenues, Expenditures and Changes in Fund Balance-Budget and Actual C-12 89 CITY OF FRIDLEY.MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31.1996 TABLE OF CONTENTS(CONTINUED) ,_ EXHIBIT PAGE FINANCIAL SECTION (CONTINUEDI Housing Revitalization Special Revenue Fund: Balance Sheet C-13 90 Statement of Revenues, Expenditures and Changes in Fund Balance-Budget and Actual C-14 91 Chemical Assessment Team Special Revenue Fund Comparative Balance Sheet C-15 92 Statement of Revenues, Expenditures and Changes in Fund Balance-Budget and Actual C-16 93 Debt Service Funds: Combining Balance Sheet D-1 95 Combining Statement of Revenues, Expenditures and Changes in Fund Balance D-2 96 _. Capital Projects Funds: Combining Balance Sheet E-1 98 • —. Combining Statement of Revenues, Expenditures and Changes in Fund Balances E-2 99 Capital Improvements Fund: Comparative Balance Sheet E-3 102 Statement of Revenues, Expenditures and Changes in Fund Balance-Budget and Actual E-4 103 Enterprise Funds: Combining Balance Sheet F-1 105 Combining Statement of Revenues, Expenses and Changes in Retained Earnings F-2 106 Combining Statement of Cash Flows F-3 107 Liquor Fund: Comparative Balance Sheet F-4 108 Comparative Statement of Revenues, Expenses and �- Changes in Retained Earnings F-5 109 CITY OF FRIDLEY. MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31.1996 TABLE OF CONTENTS(CONTINUED) — — FINANCIAL SECTION(CONTINUED) EXHIBIT PAGE Liquor Fund: (continued) Comparative Statement of Cash Flows F-6 110 Public Utility Fund: Comparative Balance Sheet F-7 111 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings F-8 112 — Comparative Statement of Cash Flows F-9 113 Internal Service Funds: — Combining Balance Sheet G-1 115 Combining Statement of Revenues, Expenses and — Changes in Retained Earnings G-2 116 Combining Statement of Cash Flows G-3 117 Employee Benefits Fund: Comparative Balance Sheet G-4 118 — G Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-5 119 — Comparative Statement of Cash Flows G-6 120 Self Insurance Fund: — Comparative Balance Sheet G-7 121 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-8 122 — Comparative Statement of Cash Flows G-9 123 Information Systems Fund: — Comparative Balance Sheet G-10 124 Comparative Statement of Revenues, Expenses and — Changes in Retained Earnings G-11 125 Comparative Statement of Cash Flows G-12 126 CITY OF FRIDLEY. MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1996 TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE FINANCIAL SECTION (CONTINUED) Trust and Agency Funds: Combining Balance Sheet H-1 128 Industrial Development Revenue Bond Trust Fund: Comparative Statement of Revenues, Expenditures and Changes in Fund Balance H-2 129 All Agency Funds: Combining Statement of Changes in Assets and Liabilities H-3 130 General Fixed Assets: Comparative Schedule of General Fixed Assets I-1 133 Schedule of Changes in General Fixed Assets-By Function and Activity 1-2 134 Schedule of Changes in General Fixed Assets-By Function .,. and Activity 1-3 135 General Long-Term Debt: Comparative Schedule of General Long-Term Debt J-1 137 STATISTICAL SECTION TABLE PAGE General Governmental Expenditures by Function -Last Ten Fiscal Years 1 139 .- General Revenues by Source-Last Ten Fiscal Years 2 140 Certified Property Tax Levies and Collections -Last Ten Fiscal Years 3 141 Estimated Market Value and Taxable Value of All Taxable Property- Last Ten Fiscal Years 4 142 Significant Minnesota Tax Policies 144 Property Tax Rates-All Overlapping Governments- Last Ten Fiscal Years 5 146 Special Assessment Levies and Collections-Last Ten Fiscal Years 6 148 CITY OF FRIDLEY. MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31.1996 TABLE OF CONTENTS(CONTINUED) TABLE PAGE STATISTICAL SECTION(CONTINUED) History of Certified Tax Levies and Tax Rates- Last Ten Fiscal Years 7 150 — Ratio of Net General Bonded Debt to Taxable Value and Net Bonded Debt Per Capita-Last Ten Fiscal Years 8 152 Computation of Legal Debt Margin 9 154 Computation of Direct and Overlapping Bonded Debt and Comparative Debt Ratios 10 156 — Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Government Expenditures-Last Ten Fiscal Years 11 157 Revenue Bond Coverage-Last Ten Fiscal Years 12 158 Demographic Statistics-Last Ten Fiscal Years 13 159 Construction, Bank Deposits and Property Value -Last Ten Fiscal Years 14 160 Principal Taxpayers 15 161 — Insurance Coverage 162 Miscellaneous Statistical Information 163 — General Information 166 r.. .. INTRODUCTORY SECTION .. a ■• CITY OF FRIDLEY. MINNESOTA ELECTED AND APPOINTED OFFICIALS DECEMBER 31.1996 ELECTED OFFICIALS Term of Office Expires December Mayor Nancy J.Jorgenson 2000 Councilmember At Large Robert L. Barnette 2000 Councilmember,Ward I Steven E. Billings 1998 Councilmember,Ward ll Dennis L. Schneider 1998 Councilmember,Ward III Ann R. Bolkcom 1998 APPOINTED OFFICIALS City Manager William W. Burns City Attorney Frederick W. Knaak - Prosecuting Attorney Carl J. Newquist Treasurer Richard D. Pribyl City Clerk William A. Champa Department Heads: Director of Finance Richard D. Pribyl - Director of Public Safety and Civil Defense Director David H. Sallman Fire Chief Charles J. McKusick Director of Public Works John G. Flora - Director of Recreation and Natural Resource Jack G. Kirk Director of Community Development Barbara J. Dacy 1 CITY ADMINISTRATIVE ORGANIZATIONAL STRUCTURE 1996 — Total Authorized Postions(136) CITY MANAGER(5) City Manager Assistant to City Manager Human Resources/Public Information Technician Secretary to the City Manager Personnel Secretary FINANCE (22) POLICE (48) FIRE (7) Finance Director-Treasurer Public Safety Director- Fire Chief Secretary Emergency Mgmt Director Secretary Staff Accountant Secretary Dep Fire Chief Accountant Dep Pub Safety Dir (4) Firefighter Lieutenant ACCOUNTING (7) (4)Sergeant Assistant Finance Director (3)Corporal Accounting Specialist (21)Patrol Officer Utility Billing Clerk Pub Sfty Projects Coor General Accountant (2)Crime Prey Spec Acctg-Data Processing Clerk Office Supervisor Acctg-Data Processing Clerk (2)Senior Office Asst Acctg-Data Processing Clerk (3)Office Asst Outreach Worker — ASSESSING (2) CSO Coordinator Assessor (2) Investigators Appraiser (2)Problem Response Team — School Resource Officer MIS(2) MIS Technician — MIS Specialist CITY CLERK-RECORDS(2) City Clerk Receptionist-License Clerk LIQUOR(5) Liquor Operations Manager (2)Liquor Store Manager (2)Liquor Store Head Clerk 2 CITY ADMINISTRATIVE ORGANIZATIONAL STRUCTURE 1996 (cont) I PUBLIC WORKS (37) I RECREATION & COMMUNITY NATURALIST(8) DEVELOPMENT(9) — Director of Public Works Secretary Director of Recreation & Director of Community Oper Analyst Natural Resources Development — Secretary Secretary ENGINEERING (4) Sr. Citizen Prog. Coordinator Assistant Public Works Director — Engineering Tech NATURALIST(3) BUILDING INSPECTION (2) Engineering Tech Inspector Natural Res. Coordinator Chief Building Official GIS Technician Interpretive Specialist Secretary Receptionist/Clerk Typist _ PW MAINTENANCE(30) PLANNING (5) Suoerintendant RECREATION (2) Planning Coordinator Secretary Program Supervisor (3)Planning Assistant Street Foreman Program Specialist (1)Secretary (3)PSW-D (3)Mechanic, Level B — PSW-C PSW-B (3) PSW-A — Water Foreman (3)PSW-D PSW-A Sewer Foreman _ (3) PSW-D PSW-A Park Foreman — (4)PSW-D PSW-B 3 '-' CI1Y OF FRIDLEY FRIDLEY MUNICIPAL CENTER•6431 UNIVERSITY AVE.N.E. FRIDLEY, MN 55432•(612)571-3450•FAX(612)571-1287 August 18, 1997 The Honorable Mayor and Members of the City Council City of Fridley Council Members: In accordance with the Charter, we hereby transmit the Comprehensive Annual Financial Report of the City of Fridley for the year ending December 31, 1996. The Report includes an excellent and comprehensive letter from Richard D. Pribyl, Director of Finance and Susan Lemieux, Assistant Finance Director, which provides a brief description of some of the activities in which the City is currently involved. Also highlighted in the letter are some of the more important financial management practices employed by the City's administrative staff. I would like to express my _ appreciation and commendation to them and the Finance Division staff for the manner in which the accounts are kept and the Report presented. I would also like to express appreciation for the commendable administrative financial management of the several departments and divisions by the respective department and division heads as revealed by this Report. Very truly yours, . .etaiwPS/J-- William W. Bums City Manager 5 CITY OF FRIDLEY FRIDLEY MUNICIPAL CENTER•6431 UNIVERSITY AVE. N.E. FRIDLEY,MN 55432•(612)571-3450•FAX(612)571-1287 July 1, 1997 Mr.William W. Burns, City Manager Mayor William J. Nee and Council Members Fridley, Minnesota 55432 Dear Mr. Bums, Mayor Nee and Council Members: The Comprehensive Annual Financial Report of the City of Fridley, Minnesota,for the fiscal year ending December 31, 1996, is submitted herewith: The organization, form, and contents of this report were prepared in accordance with the standards ,.., prescribed by the Government Finance Officers Association of the United States and Canada, the American Institute of Certified Public Accountants, the Governmental Accounting Standards Board, and the Minnesota State Auditor's Office. The Government Finance Officers Association awards Certificates of Achievement for Excellence in Financial Reporting to those governments whose annual -- financial reports are judged to conform substantially with high standards of public financial reporting including generally accepted accounting principles promulgated by the Governmental Accounting Standards Board. The City of Fridley was awarded a Certificate of Achievement for Excellence in Financial Reporting for its annual financial report for the fiscal year 1995. It is our belief that the accompanying fiscal year 1996 financial report continues to meet program standards and it will be submitted to the Government Finance Officers Association for review. This report was prepared by the City's finance staff and consists of four sections: Section I is the introductory section and contains the table of contents, letter of transmittal, and other appropriate material. Section II is the financial section and contains the auditors' opinion, the combined financial statements, notes to the financial statements, combining statements, individual fund statements, and account group statements. Section Ill is the supplemental information section which includes information regarding federal programs and tax increment financing activity. Section IV is the statistical section which includes the previous year's financial and non-financial data. 7 CITY OF FRIDLEY,MINNESOTA Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. We believe the data as presented is accurate in all material aspects, that it is presented in a manner designed to fairly set forth the financial position — and results of operations of the City as measured by the financial activity of its various funds, and that all disclosures necessary to enable the reader to gain the maximum understanding of the City's financial activity have been included. — The City's financial statements include all funds and account groups. Services provided by the City include police and fire protection;water and sanitary sewer utilities;the construction and maintenance of streets and infrastructure; recreational activities and cultural events. In addition to general government — activities, the activities of the Fridley Housing and Redevelopment Authority (HRA) have been included since they serve the entire City and the City Council has the ability to control the actions of the HRA. However, the Fridley School Districts, the Fridley Police Relief Association and the Fridley Volunteer Firefighters Relief Association have not met the established criteria for inclusion in the reporting entity, — and accordingly are excluded from this report. GENERAL INFORMATION BACKGROUND AND LOCATION The City of Fridley is an older metropolitan community with an estimated 1996 population of 28,204. The City is located just north of downtown Minneapolis and covers 11 square miles of area. The City was incorporated July 1, 1949 and is currently committed to redevelopment. With the help of the Housing and Redevelopment Authority, the City has been successful in attracting redevelopment projects. LOCAL ECONOMY — The Minneapolis-St. Paul area economy has continued to be relatively stable over the last several years. Unemployment for Anoka County has ranged around 3.2% for the last several years with very little change. Office and retail space continue to be readily available. The market values for these —' properties have begun to recover after several years of decline. The Twin City area continues to receive a large influx of tourists to visit the Mall of America, the nation's largest mall that includes a seven acre indoor amusement park. While the hospitality industry adjacent to and near the Mall is — benefiting, the City of Fridley, located 25 miles from the Mall, receives little or no benefit from the tourist traffic. Long term growth in Fridley's economy will result from new construction and redevelopment within the — City's industrial and commercial areas. During 1996, the City welcomed a number of new businesses. Murphy Warehouse completed its storage and delivery facility. In addition, Home Depot, a national home improvement retail chain, completed negotiations and constructed a 130,000 square foot store in ..., the southern portion of the City. The store opened for business in the spring of 1996. MAJOR INITIATIVES During 1996, the City Council continued its focus on the quality of the housing stock within the City and enjoyed a great deal of success with the 5% home remodeling program. During the year, 126 loans were closed, totaling $1,624,146. In addition, 18 remodeling loans totaling $135,798 were provided to — rental owners to improve apartment buildings. These programs help residents improve and maintain their properties. They also encourage residents to stay in Fridley by being able to improve their existing home instead of losing a resident to the outlying communities. 8 CITY OF FRIDLEY,MINNESOTA GENERAL INFORMATION (CONTINUED) In addition, the City council approved a $1.5 million dollar loan to the Housing and Redevelopment Authority to continue the revolving loan fund for home remodeling loans. It is projected that the loan pool will"pay for itself in fifteen years. The Housing and Redevelopment Authority has also sponsored a very successful remodeling fair, that _ will become an annual event. The HRA also hired a part time "Remodeling Advisor" to assist homeowners with their remodeling ideas. The redevelopment of the Southwest Quadrant, an area bounded by University Avenue and Mississippi Street, began in 1995 with the HRA acquiring four apartment buildings and a number of businesses. Rottlund Homes was selected as the developer and is currently building a combination of single family residences and townhomes on this fourteen acre site. Construction has passed its half way _ development point. The project will provide 118 owner occupied units, of the 118, 63 are either under construction or have been sold. The project is expected to be completed by the end of 1998. Since the City's warehouse liquor store was one of the businesses required to relocate as the Southwest Quadrant project moved forward, the City continued to search for potential sites for a new liquor store while the relocated store maintained its presence in the Holly Shopping Center. While several potential sites were reviewed, no decision on a future home for the warehouse liquor store was made in 1996. The City took over the operation of the Recycling Center on January 1, 1997. The Recycling Center provides a "drop off" service for Anoka County and north area metro residents and businesses for all .... types of recyclable. Customer service surveys reveal high marks for site cleanliness and friendly staff. Currently under discussion is a proposal to expand the types of materials to include appliances, fluorescent lights,and scrap metal. During 1996 the City of Fridley had its highest building permit volume in the City's history. During 1996, $37,036,673 of value was identified through the building permit process. This construction boom was a result of some major new residential construction along with major remodeling projects at Unity Hospital — and two elementary schools. Four new industrial buildings were also constructed totaling $4,732,925 in permit value. These new industrial sites also created 150-200 new jobs. During the year a number of other City projects were completed such as resurfacing of a number of tennis courts, upgrading old playground equipment with newer and safer equipment, the relining of a portion of the City's sanitary sewer system, regular maintenance and upgrading of the City's wells. The Water Fund Capital Improvements included the design and start of construction of a Filtration System attached to the City's well#12. With the additional of this filtration plant, 90% of the city's summer peak water demand will be filtered. Internally, the 1997 budget work sessions were relatively free from major budgetary issues. While the City is still operating within the context of financial constraints, the gap between revenues and expenditures that was present in the 1996 budget process was not as marked in the 1997 budget process. The most intense discussion at the work session focused on a proposal to reclassify twenty- seven positions. In addition to the reclassification issues, the Council focused on a variety of other issues, many of which were related to cuts made in the 1996 Budget. As a result of these and other issues, a balanced budget was attained with no increase in property taxes and the planned use of $395,367 of reserves resulting in a balanced 1996 budget that Council adopted in December. We were also honored to receive the Distinguished Budget Presentation Award for our 1995 Budget. This represented the sixth consecutive year in which the City has received this award. 9 CITY OF FRIDLEY,MINNESOTA GENERAL INFORMATION (CONTINUED) PLANS FOR THE FUTURE — The future of the City of Fridley, like all units of government is filled with change and restructuring. The federal deficit and shortfalls in state revenue have and will continue to have a trickle down effect to lower levels. Cities are faced with the problems of financing their own traditional levels of service while - simultaneously coping with cuts in intergovernmental revenues and the implementation of both federal and state mandates. The City applauds the efforts of the Minnesota State Legislature in their attempt to curtail unfounded state mandates. The City will continue to investigate new funding and cost sharing — alternatives as well as reviewing our operations in order to decrease the reliance on intergovernmental revenues. During 1996, the review of potential sites for a new liquor store continued. The operation continued the search for a new location during 1996 with no success. It appears the Holly Center site will continue to be the center of the operation for the near future. Relocating the store to a larger more permanent location is important, but will be a long term goal of the Liquor operation. Implementation of an imaging system continued during 1996. This project will increase the availability of data and the efficiency in which City staff can access it and respond to resident's requests. Significant projects budgeted for 1997 in the five year capital improvement plan include: The joint cooperative project with School District 14 to construct a new adult gymnasium at Hayes Elementary School and to construct a new addition to the Community Education Center; rewiring the data cable within City Hall; upgrading playground equipment by replacing the old equipment with new safer and accessible equipment; street reconstruction including concrete curb and gutter with new asphalt pavement on a number of City streets; construction of well#12 filter system to provide additional filtered water; rebuild Pump House No. 1 and Well No. 1 Booster Station; and the annual sealcoating, well, — reservoir and pump house maintenance programs. FINANCIAL INFORMATION — INTERNAL CONTROLS In developing and improving the City's accounting system, consideration is given to the adequacy of internal accounting controls. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control — should not exceed the benefits likely to be derived and the evaluation of costs and benefits requires estimates and judgments by management. — All internal control evaluations occur within the above framework. We believe that the City's internal accounting controls adequately safeguard assets and provide reasonable assurance of the proper recording of financial transactions. — BUDGETARY CONTROLS A complete budgetary system of accounts is maintained for the General and Special Revenue Funds. — Budgetary control is maintained in compliance with the City Charter Requirements. The Charter provides that it is the duty of the City Manager to strictly enforce the provisions of the budget. The management policy of the City is such that the existence of a particular item or appropriation in the approved budget does not mean that it will or must be automatically expended. It is the policy of the City to control budgets at the expenditure category level. Budget adjustments between City divisions 10 CITY OF FRIDLEY,MINNESOTA FINANCIAL INFORMATION (CONTINUED) BUDGETARY CONTROLS (CONTINTUED) are made upon the approval of a resolution by the City Council. The City Charter provides that the City Council shall not have power to increase the total amount of the budget, whether by insertion of new items or otherwise, beyond the estimated revenue unless the actual revenue exceeds such revenue estimates, and in that event not beyond such actual revenue. There is a constant review process. Expenditures are not approved until it has been determined that 1) the expenditure is necessary, 2) adequate funds have been appropriated, and 3)funds are available. CASH MANAGEMENT All temporary cash surpluses during the year are invested in various securities which State statutes permit. The City's policy is to invest all available monies at competitive interest rates in accordance with the City's over-all fiscal plan coordinated with operating needs and programs projected over the ensuing 12 month period. Investment yields on investments held during the year ranged from 4.85% to 7.00%. DEBT ADMINISTRATION Net general bonded debt per capita, and the percentage of the net general bonded debt to taxable value are useful indicators of the City's debt position. At December 31, 1996 the City of Fridley's debt service funds provided sufficient capital to cover the net general bonded debt. The City has numerous debt issues outstanding totaling $20,219,747 Of this outstanding debt, $1,700,000 represents special assessment debt with government commitment, $13,575,000 represents general obligation tax increment refunding bonds, $4,825,000 represents general obligation water, sewer and storm water revenue bonds, $119,747 represents a construction loan from the State of Minnesota. In 1997,the Minnesota Legislature is considering forgiving this loan in full. The City of Fridley has, since 1982, maintained a credit rating of a Aa1 on its long-term bonds. FISCAL DISPARITIES The commonly referred to "Fiscal Disparity Law"was adopted by the Legislature in 1971. The area of the fiscal disparity district encompasses all the properties located within the seven-county metropolitan area. The law provides that 40% of all new commercial/industrial property valuations or growth be placed in an area wide"pool,"and shared according to specific criteria. TAX INCREMENT DISTRICTS — The City Council took action on May 7, 1979 to form the first of twelve tax increment districts. In 1985, the individual districts were combined into one redevelopment district to more easily manage the overall activities. All of the districts have been established in economically depressed areas within the City. - With the successful relationship that the City and the Housing and Redevelopment Authority have developed, many benefits have been derived. 11 CITY OF FRIDLEY,MINNESOTA FINANCIAL INFORMATION (CONTINUED) GENERAL GOVERNMENT FUNCTIONS — The following schedule presents a summary of the General, Special Revenue, Debt Service, Capital Projects and Expendable Trust Funds'revenues for the fiscal year ended December 31, 1996. The most significant changes in revenues from the prior year were increases in taxes and special assessments, licenses and permits and charges for services. Taxes increased by $151,894 due an increase in taxes levied and an increase in taxes collected. $125,868 more in special assessments were collected on various improvement projects. Licenses and permit revenue increased because of an increase in license fees for rental property and pawn shop license fees and due to building and related permit fees increasing by$153,346 because of increased construction activity in the City. The increase in charges for services is due to more administration being charged out to other funds. -- Percent of Increase/ Revenues Amount Total (Decrease) — Taxes and special assessments $4,420,212 35.71% $277,762 Licenses and permits 828,652 6.70% 274,470 Intergovernmental 3,986,987 32.21% (16,605) Charges for services 1,299,495 10.50% 284,447 Fines and forfeits 176,060 1.42% (7,382) Interest on investments 1,374,812 11.11% 6,673 — Miscellaneous 290,826 2.35% 45,351 Total $12,377,044 100.00% $864,716 — The following schedule presents a summary of the General, Special Revenue, Debt Service, Capital Projects and Expendable Trust Funds'expenditures for the fiscal year ended December 31, 1996. _ The most significant change in expenditures is in the general government, public works, recreation debt service and capital outlay categories. The decrease in general government, public works and recreation is due to the efforts by the City to decrease expenditures. In addition, the general — government category in 1995 included the cost of the City-wide Cleanup Days ($188,221) and costs for more grant management activity. The decrease in debt service expenditures is caused by the maturity of the 1992 Temporary Tax Increment Bonds being paid in 1995 in the amount of $4,030,000. The — increase in capital outlay is due to an increase in the City infrastructure improvements in 1996. Percent of Increase/ Expenditures Amount Total (Decrease) — Current: General government 2,145,143 16.53% (304,238) .mm% Public safety 3,863,105 29.77% 41,875 Municipal center 185,917 1.43% (10,032) Public works 2,306,088 17.77% (69,384) Community development 535,496 4.13% 5,266 Recreation and naturalist 759,457 5.85% (90,872) Debt service 1,102,010 8.49% (4,048,865) Capital outlay 2,079,739 16.03% 931,507 Total $12,976,955 100.00% ($3,544,743) 12 CITY OF FRIDLEY,MINNESOTA FINANCIAL INFORMATION(CONTINUED) General Fund Balance The fund balance is used to provide working capital for the fund until tax settlements and state aids are received in July and December of each year, to provide funds for unknown events which could have an adverse effect on the fund, and to help finance future budgets. In 1990 the City Council adopted a formal policy designating portions of the general fund's fund balance for working capital, subsequent year's expenditures, contingencies and for replacement of fixed assets at the end of each fiscal year. ENTERPRISE OPERATIONS The Enterprise Funds account for the financing of services to the general public in which all or most of the costs involved are paid in the form of charges by the users of such services. In the City of Fridley, Enterprise Funds are used to account for the operation of the public utility system and two municipal liquor stores. Except for ownership, Enterprise Funds bear a close resemblance to privately owned utility or service enterprises. Liquor Fund The Liquor Fund was established to account for the operation and financing of the City-owned municipal liquor stores. The City operates two liquor stores, one at 6289 Highway 65, and the other in the Holly Shopping Center. The City owns the store at the Highway 65 location and currently leases space for the other store. In 1984, the City changed its sales philosophy to the wholesale approach so that we could remain competitive with the three neighboring communities that use wholesale pricing. Retained earnings of the Liquor Fund were$1,613,015 on December 31, 1996 as compared to $1,478,181 at the closing of the last fiscal year. Income before operating transfers increased from $14,086 in 1995 to $209,834 in 1996. This increase is primarily due to a reduction in relocation costs from 1995 to 1996. Public Utility Fund �- This fund accounts for the operation and financing of the City-owned sewer and water systems. Included in the assets of the fund is a receivable from the Metropolitan Council Environmental Service Division of$74,818 representing the City's share of the equity in the Minneapolis Sewer System which was acquired by the Metropolitan Council in January 1, 1997. This amount will be paid to the City by means of issuing credits against future sewer billings. These credits will be applied in annual installments with interest through 1999. The assets for the Water and Sewer Distribution system, originally financed by special assessments, were transferred from General Fixed Assets to the Public Utility Fund in 1978. Additional Fixed Assets were transferred in 1979, 1984, 1989, 1990, 1991, 1992, 1993, 1994 and 1995. Those improvements to _ the utility system paid for or financed directly by the Public Utility Fund have always been carried in the Public Utility Fund and depreciated. Retained earnings on December 31, 1996 were $10,668,535 compared to$10,111,705 at the close of the last fiscal year. RISK MANAGEMENT The Self Insurance Fund was set up to account for all revenues and expenditures associated with the $50,000 deductible on the general liability policy. Self insuring a larger deductible has reduced the annual premiums which allow us to directly benefit from our good experience rating. In the future an analysis will be made of the feasibility of self insuring all or a portion of other policies. In 1990, $1,000,000 was transferred from the General Fund to the Self Insurance Fund. 13 CITY OF FRIDLEY,MINNESOTA OTHER INFORMATION PENSIONS — City of Fridley employees are covered by one of five pension plans: 1) Fridley Fire Relief Association for Volunteer Firemen. -- 2) Public Employees Police and Fire Consolidation Plan for police officers hired prior to December 15, 1975. 3) Public Employees Retirement Police and Fire Plan, covering the City's full-time Firemen and Police Officers hired after December 15, 1975. 4) The basic Public Employees Retirement Plan, which covers certain other City civilian employees. 5) Coordinated Public Employees Retirement Plan, which covers certain other City civilian employees. The employees covered by the Coordinated P.E.R.A. Plan are also covered by Social Security. The City is currently making all pension contributions required by law. For additional background information on the pension plans covering City employees, see Notes to the Financial Statements. — INDEPENDENT AUDIT — Section 7.13 of the City Charter requires an annual audit to be made of the books of account, financial records and transactions of all administrative departments of the City by a certified public accountant or the State Auditor's Department of the State of Minnesota. This requirement has been complied with and the opinion of Tautges, Redpath &Co., Ltd., is included in this report. CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE The Government Finance Officers Association of the United States and Canada (GFOA) awarded a — Certificate of Achievement for Excellence in Financial Reporting to the City of Fridley, Minnesota, for its comprehensive annual financial report for the fiscal year ended December 31, 1995. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for -- preparation of State and local government financial reports. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. — A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to the Certificate of Achievement Program requirements, and we are submitting it to GFOA to determine its eligibility for another certificate. 14 CITY OF FRIDLEY,MINNESOTA OTHER INFORMATION(CONTINUED) ACKNOWLEDGMENTS The preparation of this report on a timely basis could not have been accomplished without the efficient and dedicated services of all members of the Finance Department, with special recognition to Paul Hansen, Craig Ellestad and Marcy Everette and to our auditors Tautges, Redpath & Co., Ltd. for their professional guidance. We would also like to express our appreciation to the Mayor and members of the City Council for their interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner. Respectfully submitted, , Rdtdo—Q—n Q,,,.1aQ / i Richard D. Pribyl Susan Lemieux Finance Director Assistant Finance Director — • 15 Certificate of Achievement for Excellence in Financial Reporting Presented to City of Fridley, Minnesota For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 1995 — A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. ?ZZ, uTA_ N X GANA0A Preside + s -fee SEAL twat z‘.,„ Executive Director 17 i FINANCIAL SECTION OM. OMNI OEM AUDITOR'S OPINION TAUTGES, REDPATH & CO., LTD. CERTIFIED PUBLIC ACCOUNTANTS — INDEPENDENT AUDITOR'S REPORT -- To the Honorable Mayor and Members of the City Council City of Fridley,Minnesota We have audited the accompanying general purpose financial statements of the City of Fridley,Minnesota,as of and for the year ended December 31, 1996 as listed in the table of contents. These general purpose financial — statements are the responsibility of the City's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. — We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards,issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining,on a test basis,evidence supporting the amounts and — disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall general purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion,the general purpose financial statements referred to above present fairly,in all material respects, the financial position of the City of Fridley,Minnesota,as of December 31, 1996,and the results of its operations — and cash flows of its proprietary fund types for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards,we have also issued a report dated June 27, 1997 on our — consideration of the City of Fridley,Minnesota's internal control structure and a report dated June 27, 1997 on its compliance with laws and regulations. — Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole.The combining and individual fund and account group financial statements,supporting schedules and statistical information listed in the table of contents are presented for purposes of additional analysis and are not a — required part of the general purpose financial statements of the City of Fridley,Minnesota. Such information, except for that portion marked"unaudited,"on which we express no opinion,has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and,in our opinion,is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. — June 27, 1997 — 7� / a 4 . TAUTGES,REDPATH&CO.,LTD. Certified Public Accountants — 4810 White Bear Parkway • White Bear Lake, Minnesota 551160 • 612/426-7000 • FAX/426-5004 • Member of HLB International COMBINED FINANCIAL STATEMENTS The combined statements are intended to provide an overview and broad perspective of the City's financial position and operations.These statements present a summary set of information needed to control and analyze current operations to determine compliance with legal and budgetary limitations and to assist in financial planning.The following combined statements are presented: Combined Balance Sheet —All Fund Types and Account Groups and Discretely Presented Component Units Combined Statement of Revenues, Expenditures, and Changes in Fund Balances — All Governmental Fund Types and Expendable Trust Funds and Discretely Presented Component Units Combined Statement of Revenues, Expenditures, and Changes in Fund Balances- Budget and Actual — General, Special Revenue Fund and Budgeted Capital Project Types Combined Statement of Revenues, Expenses and Changes in Retained Earnings — All Proprietary Fund Types Combined Statement of Cash Flows—All Proprietary Fund Types CITY OF FRIDLEY. MINNESOTA COMBINED BALANCE SHEET-ALL FUND TYPES AND ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNITS December 31. 1996 Governmental Fund Types Special Debt Capital — General Revenue Service Projects Assets Cash and investments $6,936,716 $168,404 $10,504,602 $8,039,483 Receivables: Accounts 76,926 48,754 Taxes 111,175 4,856 Special assessments 7,435 1,913,988 73,245 Mortgage-net of allowance Interest 291,893 — Loan 6,300 Developer note 116,460 Due from other funds 84,821 892,091 Due from HRA 125 Due from other governments 38,265 120,361 20,000 Inventories, at cost 24,904 _ Prepaid items Long term receivable Other assets Property and equipment — (Net of depreciation) Amount available in debt service fund Amount to be provided for — retirement of general long term debt Total Assets $7,694,895 $337,519 $12,418,715 $9,029,675 .� See Accompany Notes to Financial Statements 22 Exhibit A-1 Continued I IFiduciary Totals Reporting Entity Proprietary Fund Types Fund Types Account Groups Totals Primary Government Component 'tals 17 andum Only) Internal Trust and General General Long (Memorandum Only) FiRA 1996 1995 I I Enterprise Service Agency Fixed Assets Term Debt 1996 1995 $6,856,135 $3,724,154 43,174 $36,272,668 $33,236,352 $6,368,086 $42,640,754 $39,720,844 1,674,225 1,483,802 1,530,910 2,752 1,659,342 1,483,802 14,883 326,920 I 116,513 131,123 140,851 257,364 482 1,994,859 2,112,211 191 1,994,859 2,112,211 2,662,215 2,662,215 1,224,070 46,638 338,531 242,625 I 291,893 - 209,405 6,300 6,300 6,300 6,300 116,460 136,393 116,460 136,393 976,912 1,679,406 I 976,912 1,679,406 125 18,847 125 19,847 276,664 24,005 202,631 276,664 278,839 267,120 253,935 278,839 267,120 278,801 289,379 279,201 279,201 289,379 301,052 213,818 301,052 301,052 213,818 6,081,022 5,453,445 6,058,906 6,058,906 5,440,158 22,116 I52,245,515 49,313,984 20,732,529 $285,405 31,227,581 52,245,515 49,313,984 11,426,662 10,701,642 10,505,332 10,505,332 9,794,932 921,330 4,889,415 4,889,415 5,472,665 I 343,670 5,233,085 6,185,955 $29,977,958 $4,009,559 $6,105,314 $31,227,581 $15,394,747 $116,195,963 $110,083,559 26,715752 $119,654,425 $10,519,789 $1 I k See Accompany Notes to Financial Statements 23 CITY OF FRIDLEY, MINNESOTA COMBINED BALANCE SHEET-ALL FUND TYPES AND ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNITS December 31, 1996 Governmental Fund Types Special Debt Capital — General Revenue Service Projects Liabilities,fund equity and other credits. Liabilities Accounts payable 250,358 $53,990 $5,425 $138,694 — Deposits payable 18,988 10,228 1,000 Contracts payable 104,989 Salaries payable 223,716 3,191 Compensated absences payable Deferred revenue 74,898 7,279 1,907,958 77,278 Due to other funds 84,821 892,091 Due to City Due to other governments 2,448 215 65,708 Bonds payable Loans payable Other liabilities Total liabilities 570,408 159,724 1,913,383 1,279,760 Fund equity and other credits Contributed capital ,_ Investment in general fixed assets Retained earnings: Reserved — Unreserved Fund balance: Reserved 168,861 623,517 1,182,367 Unreserved: — Designated 6,750,512 246,168 7,281,866 Undesignated 205,114 (68,373) 9,881,815 (714,318) Total equity and other credits 7,124,487 177,795 10,505,332 7,749,915 — Total liabilities, equity and other credits $7,694,895 $337,519 $12,418,715 $9,029,675 See Accompany Notes to Financial Statements 24 I Exhibit A-1 1 Continued 1 Fiduciary Proprietary Fund Types Fund Types Account Groups Totals Primary Government Component Totals Reporting Entity 1 Enterprise Internal Trust and Agency General General Long (Memorandum Only) Unit (Memorandum Only) Service Fixed Assets Term Debt 1996 1995 HRA 1996 1995 1 $214,884 $17,726 $681,077 $531,704 I 1,556 6,070,869 6,102,641 5,484,405 $29,990 $711,067 $563,850 37 42,116 6,144,757 5,517,692 5,318 480,307 61,691 480,307 61,691 20,808 69,973 317,688 249,582 3,291 320,979 251,383 I 850,962 850,962 879,599 850,962 879,599 2,067,413 2,168,275 75,309 2,142,722 2,272,048 976,912 1,679,406 976,912 1,679,406 I 290,125 125 125 19,847 12,639 371,135 586,112 172,461 543,596 750,313 4,810,144 15,275,000 20,085,144 17,455,000 1,265,000 21,350,144 19,075,000 119,747 119,747 123,931 119,747 123,931 I 76,029 76,029 72,172 76,029 72,172 5,788,864 938,661 6,083,508 15,394,747 32,129,055 29,291,877 1,588,292 33,717,347 31,266,932 I 11,907,544 1,904,392 13,811,936 14,228,643 13,811,936 14,228,643 31,227,581 31,227,581 29,329,873 31,227,581 29,329,873 2,547,493 103,285 2,650,778 3,732,115 2,650,778 3,732,115 9,734,057 1,063,221 10,797,278 8,840,167 10,797,278 8,840,167 I1,974,745 7,492,517 3,660,545 5 63 290 9,623,297 14,278,546 13,799,378 14,278,546 13,799,378 21,806 9,326,044 3,368,989 5,270,952 14,596,996 8,834,020 24,189,094 3,070,898 21,806 31,227,581 84,066,908 80,791,682 8,931,497 92,998,405 88,387,493 I $29,977,958 $4,009,559 $6,105,314 $31,227,581 $15,394,747 $116,195,963 $110,083,559 $10,519,789 $126,715,752 $119,654,425 ISee Accompany Notes to Financial Statements 25 CITY OF FRIDLEY,MINNESOTA COMBINED STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN _, BALANCES-ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST AND DISCRETELY PRESENTED COMPONENT UNITS Year Ended December 31,1996 Governmental Fund Types Special Debt Capital - General Revenue Service Projects Revenues: Taxes $3,803,136 $ $ $71,777 Special assessments 2,575 531,273 11,451 - Licenses and permits 722,122 106,530 Intergovernmental revenue 3,222,589 272,120 492,278 Charges for services 1,154,140 145,355 - Fines and forfeits 176,060 - Interest on investments 286,724 8,101 585,054 493,027 Miscellaneous 228,241 107 62,478 Total revenues 9,595,587 532,213 1,116,327 1,131,011 - Expenditures: Current: General government 1,661,024 484,119 - Public safety 3,850,597 12,508 Municipal center 185,917 Public works 2,140,438 165,650 - Community development 535,496 Recreation and naturalist 759,457 Debt service 14,572 1,072,004 15,434 Capital outlay 331,880 68,724 1,679,135 - Total expenditures 9,479,381 565,351 1,072,004 1,860,219 Excess(deficiency)of revenues over expenditures 116,206 (33,138) 44,323 (729,208) - Other financing sources(uses): Bond proceeds 3,555 320,050 Operating transfers in 209,843 Operating transfers out (134,843) 322,392 Operating transfers from HRA 797,365 Operating transfers to City --ti Total other financing sources(uses) 209,843 666,077 642,442 Excess(deficiency)of revenues and other financing sources over expenditures and other financing uses 326,049 (33,138) 710,400 (86,766) -' Fund balance-January 1 6,798,438 210,933 9,794,932 7,836,681 Fund balance-December 31 $7,124,487 $177,795 $10,505,332 $7,749,915 --_d See Accompanying Notes to Financial Statements 26 Exhibit A-2 Fiduciary Fund Type Totals Primary Government Component Totals Reporting Entity Expendable (Memorandum Only) Unit (Memorandum Only) Trust 1996 1995 HRA 1996 1995 $ $3,874,913 $3,723,019 $3,274,851 $7,149,764 $6,465,075 545,299 419,431 88,822 634,121 501,256 828,652 554,182 828,652 554,182 3,986,987 4,003,592 3,986,987 4,003,592 1,299,495 1,015,048 1,299,495 1,015,048 176,060 183,442 176,060 183,442 1,906 1,374,812 1,368,139 429,199 1,804,011 1,797,917 290,826 245,475 1,069,492 1,360,318 568,313 1,906 12,377,044 11,512,328 4,862,364 17,239,408 15,088,825 _ 2,145,143 2,449,381 1,416,139 3,561,282 3,954,875 3,863,105 3,821,230 3,863,105 3,821,230 185,917 195,949 185,917 195,949 2,306,088 2,375,472 2,306,088 2,375,472 535,496 530,230 535,496 530,230 759,457 850,329 759,457 850,329 1,102,010 5,150,875 482,019 1,584,029 5,636,711 2,079,739 1,148,232 831,155 2,910,894 5,067,825 12,976,955 16,521,698 2,729,313 15,706,268 22,432,621 1,906 (599,911) (5,009,370) 2,133,051 1,533,140 (7,343,796) 323,605 4,074,311 323,605 4,074,311 209,843 909,713 6,969,646 7,179,489 1,887,109 187,549 (784,713) (6,969,646) (6,782,097) (1,762,109) 797,365 649,130 797,365 649,130 (797,365) (797,365) (649,130) 1,518,362 4,848,441 (797,365) 720,997 4,199,311 1,906 918,451 (160,929) 1,335,686 2,254,137 (3,144,485) 19,900 24,660,884 24,821,813 7,595,811 32,256,695 35,401,180 $21,806 $25,579,335 $24,660,884 $8,931,497 $34,510,832 $32,256,695 See Accompanying Notes to Financial Statements 27 CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENDITURES.AND CHANGES IN FUND - BALANCES -BUDGET AND ACTUAL GENERAL, SPECIAL REVENUE FUND AND BUDGETED CAPITAL PROJECT TYPES Year Ended December 31, 1996 - General Special Revenue Fund Types .., Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) Revenues: Taxes $3,778,985 $3,803,136 $24,151 $ $ $ Special assessments 2,530 2,575 45 Licenses and permits 534,949 722,122 187,173 96,125 106,530 10,40° Intergovernmental revenue 3,129,579 3,222,589 93,010 316,748 272,120 (44,62E Charges for services 1,014,688 1,154,140 139,452 147,574 145,355 (2,219) Fines and forfeits 203,573 176,060 (27,513) - Interest on investments 425,000 286,724 (138,276) 5,264 8,101 2,837 Miscellaneous 146,357 228,241 81,884 107 107 Total revenues 9,235,661 9,595,587 359,926 565,711 532,213 (33,49$1, Expenditures: Current: General government 1,780,519 1,661,024 119,495 548,961 484,119 64,842_ Public safety 3,871,162 3,850,597 20,565 12,508 12,508 C Municipal center 196,593 185,917 10,676 Public works 2,179,969 2,140,438 39,531 _ Community development 541,802 535,496 6,306 Recreation and naturalist 798,658 759,457 39,201 Reserve for contingency 98,136 98,136 Debt service 14,572 14,572 Capital outlay 358,810 331,880 26,930 282,265 68,724 213,541 Total expenditures 9,840,221 9,479,381 360,840 843,734 565,351 278,383 Excess(deficiency)of revenues - over expenditures (604,560) 116,206 (720,766) (278,023) (33,138) 244,88: Other financing sources (uses): Capital lease obligation Issuance of long term note receivable Operating transfers in 209,843 209,843 250,000 (250,000) Operating transfers out -- Total other financing sources (uses) 209,843 209,843 250,000 (250,00( Excess (deficiency)of revenues and other financing sources over - expenditures and other financing uses (394,717) 326,049 (720,766) (28,023) (33,138) (5.115) Fund balance-January 1, 6,798,438 6,798,438 210,933 210,933 - Fund balance-December 31 $6,403,721 $7,124,487 ($720,766) $182,910 $177,795 ($5,115.L See Accompanying Notes to Financial Statements 28 - Exhibit A-3 Totals - Budgeted Capital Project Funds (Memorandum Only) Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) $70,550 $71,777 $1,227 $3,849,535 $3,874,913 $25,378 2,110 2,110 2,530 4,685 2,155 -- 631,074 828,652 197,578 665,000 492,278 (172,722) 4,111,327 3,986,987 (124,340) 1,162,262 1,299,495 137,233 - 203,573 176,060 (27,513) 271,036 481,713 210,677 701,300 776,538 75,238 31,500 62,478 30,978 177,857 290,826 112,969 _ 1,038,086 1,110,356 72,270 10,839,458 11,238,156 398,698 - 2,329,480 2,145,143 184,337 3,883,670 3,863,105 20,565 196,593 185,917 10,676 392,862 41,933 350,929 2,572,831 2,182,371 390,460 - 541,802 535,496 6,306 798,658 759,457 39,201 98,136 98,136 - 14,572 14,572 1,111,593 378,267 733,326 1,752,668 778,871 973,797 1,504,455 420,200 1,084,255 12,188,410 10,464,933 1,723,478 (466,369) 690,156 1,156,525 (1,348,952) 773,223 680,644 459,843 209,843 (250,000) _ (710,845) (710,845) (710,845) (710,845) (710,845) (710,845) (251,002) (501,002) (250,000) (1,177,214) (20,689) 1,156,525 (1,599,954) 272,221 430,644 - 8,484,922 8,484,922 8,004,330 8,484,922 - $7,307,708 $8,464,233 $1,156,525 $6,404,376 $8,757,143 $430,644 See Accompanying Notes to Financial Statements 29 s Exhibit A-4 CITY OF FRIDLEY. MINNESOTA - COMBINED STATEMENT OF REVENUES. EXPENSES AND CHANGES IN RETAINED EARNINGS -ALL PROPRIETARY FUND TYPES Year Ended December 31. 1996 _.. With comparative totals for the year ended December 31, 1995 - Proprietary Fund Types Totals Internal (Memorandum Only) Sales and cost of sales: Enterprise Service 1996 1995 - Sales $3,071,737 $ $3,071,737 $3,073,197 Cost of sales 2,424,824 2,424,824 2,472,464 Gross profit 646,913 646,913 600,733 Operating revenues: Water sales and sewer rents 5,639,422 5,639,422 4,383,174 Other 151,865 151,865 94,026 Charges for services 100,640 100,640 81,673 Total operating revenues 5,791,287 100,640 5,891,927 4,558,873 Operating expenses: Personal services 1,240,653 22,644 1,263,297 1,126,351 Supplies and other charges 4,164,012 40,294 4,204,306 4,173,215 - Depreciation 747,617 99,758 847,375 786,154 Total operating expenses 6,152,282 162,696 6,314,978 6,085,720 Operating income (loss) 285,918 (62,056) 223,862 (926,114) Nonoperating revenues (expenses): Intergovernmental revenue 50,000 50,000 Interest on investments 247,386 198,478 445,864 409,370 - Debt service (173,553) (173,553) (142,943) Special assessments 229,666 229,666 40,000 Loss on disposition of fixed assets (45,409) Other 295 295 68,690 Total nonoperating revenues (expenses) 353,794 198,478 552,272 329,708 ,_ Income before operating transfers 639,712 136,422 776,134 (596,406) Operating transfers out (397,392) (397,392) (125,000) Total operating transfers (397,392) (397,392) (125,000) Net income before extraordinary item 242,320 136,422 378,742 (721,406) Extraordinary gain on issuance of - sewer availability charge credits 80,327 80,327 22,100 Net income (loss) 322,647 136,422 459,069 (699,306) _ Credit arising from transfer of depreciation on contributed capital 369,017 47,688 416,705 425,679 Retained earnings -January 1 11,589,886 982,396 12,572,282 12,845,909 ._ Retained earnings - December 31 $12,281,550 $1,166,506 $13,448,056 $12,572,282 See Accompanying Notes to Financial Statements 31 Exhibit A-5 Continued CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES Year Ended December 31, 1996 With comparative totals for year ended December 31, 1995 Proprietary Fund Types Totals Internal (Memorandum Only) Enterprise Service 1996 1995 Cash flows from operating activities: Operating income(loss) $285,918 ($62,057) $223,861 ($926,114) Adjustments to reconcile operating income (loss)to net cash flows from operating activities: Depreciation 747,617 99,758 847,375 786,154 Change in assets and liabilities: Decrease(increase)in receivables 125,796 125,796 (317,514) Decrease(increase)in due from other funds 3,312 1,675,706 1,679,018 622,449 Decrease(increase)in inventories (11,961) (11,961) 93,214 Decrease(increase)in prepaid items (1,361) (1,361) (19,877) Increase(decrease)in payables 137,861 (21,410) 116,451 41,813 Intergovernmental revenue 50,000 50,000 Other nonoperating income 295 295 68,690 Use of sewer availability charge credits 223,550 Net cash flows from operating activities 1,337,477 1,691,997 3,029,474 572,365 Cash flows from noncapital financing activities: — Operating transfers out (397,392) (397,392) (125,000) Net cash flows from noncapital financing activities (397,392) 0 (397,392) (125,000) — Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (1,740,624) (140,574) (1,881,198) (588,286) Contributed capital 2,595,143 2,595,143 Proceeds from sale of revenue bonds (115,000) (115,000) - Prinicipal paid on revenue bonds (85,000) Interest and paying agent fees on revenue bonds (173,553) (173,553) (142,943) Special assessment collections 31,278 31,278 14,209 Net cash flows from capital and related financing activities 597,244 (140,574) 456,670 (802,020) See Accompanying Notes to Financial Statements 32 Exhibit A-5 Continued CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF CASH FLOWS _ ALL PROPRIETARY FUND TYPES Year Ended December 31, 1996 With comparative totals for year ended December 31, 1995 Proprietary Fund Types Totals Internal (Memorandum Only) Enterprise Service 1996 1995 Cash flows from investing activities: Purchase of investment securities —' Proceeds from sale of investment securities 2,106,671 Interest on investments 247,386 198,478 445,864 407,124 Interest received from MCES Net cash flows from investing activities 247,386 198,478 445,864 2,513,795 — Net increase(decrease)in cash and cash equivalents 1,784,715 1,749,901 3,534,616 2,159,140 Cash and cash equivalents-January 1 5,071,420 1,974,253 4,886,533 — Cash and cash equivalents-December 31 $6,856,135 $3,724,154 $3,534,616 $7,045,673 — Noncash investing, capital and financing activities: Special assessments of$229,666 were levied to finance a portion of the 1994 Water,Sewer, and Storm Water Revenue Bonds. See Accompanying Notes to Financial Statements 33 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31.1996 — 1. Summary of Significant Accounting Policies The City of Fridley 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 accounting policies of the City of Fridley conform to generally accepted accounting policies applicable to governmental units. The following is a summary of the more significant policies: A. Principles used in the determination of the scope of the Governmental entity — The City has implemented Government Accounting Standards Boards Statement 14, The Financial Reporting Entity. As required by Statement 14, these financial statements present the City and its component units. The component unit discussed below is included in the reporting entity because of the significance of their operation and financial relationship with the City. 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. Complete financial statements of the HRA may be obtained from William W. Bums, Executive Director, 6431 University Avenue NE, Fridley, Minnesota _ 55432. The following governmental entities are not included in these financial statements since they do not meet the criteria contained in Statement 14: Independent School District#11/Independent School District#13/Independent School District #14/Independent School District #16 - These four school districts either reside wholly within the City of Fridley or overlap within the City boundaries. According to Minnesota State Statutes, Minnesota school districts are totally independent of all other governing jurisdictions. The City has no authority to appoint board members and has no fiscal responsibility. School districts are able to levy taxes and issue debt in their own name. Fridley Volunteer Firefighters Relief Associations - These associations are organized as nonprofit organizations by their members to provide pension and other benefits to such members in accordance with Minnesota Statutes. Their boards of directors are elected by the membership of the Association. All funding is conducted in accordance with Minnesota Statutes, whereby state aids flow to the associations, tax levies are determined by the — associations and are only reviewed by the City. The associations pay benefits directly to their members. The associations may certify tax levies to the County directly if the City does not carry out this function. Because the associations are able to fund their programs independently of the City, they are excluded from these financial statements. (See Note 9 for disclosures relating to the pension plan operated by this organization.) 34 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 1. Summary of Significant Accounting Policies(Continued] B. Fund Accounting The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, - liabilities, fund equity, revenues and expenditures, or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the financial statements in this report, into seven generic fund types and three broad categories as follows: GOVERNMENTAL FUNDS Governmental funds include the general fund, special revenue funds, debt service funds and capital project funds. The governmental fund measurement focus is based upon the determination of financial position and changes in financial position (sources, uses and balances of financial resources rather than upon net income determination). These funds are maintained on the modified accrual basis of accounting (explained further under Significant Accounting Policies). General Fund - The General Fund is the primary operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds-Special Revenue Funds are used to account for the proceeds of certain specific revenue sources that are restricted to expenditures for specified purposes. Debt Service Funds - Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest, and related costs. Capital Projects Funds - Capital Projects Funds are used for the acquisition or construction of major capital facilities other than those financed by proprietary funds. PROPRIETARY FUNDS Proprietary funds include enterprise funds and internal service funds. The proprietary fund — measurement focus is based upon the determination of net income, financial position and changes in financial position. The generally accepted accounting principles here are those applicable to similar businesses in the private sector and thus these funds are maintained •• on the accrual basis of accounting. Enterprise Funds - Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises - where the intent is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through use charges. Internal Service Funds - Internal Service Funds are used to account for the financing of goods or services provided by one department to other departments of the City on a cost- reimbursement basis. IMN 35 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 — 1. 5ymmary of Significant Accounting Policies(Continued) — B. Fund Accounting (Continued) FIDUCIARY FUNDS — Fiduciary funds include expendable trust and agency funds. The measurement focus of the expendable trust funds is the same as governmental funds and is, therefore, maintained on the modified accrual basis of accounting. Trust Fund - The Trust Fund is used to account for assets held by the City in a trustee capacity for individuals, private organizations, other governments, and/or all other funds. The City's Trust Fund is classified as an Expendable Trust Fund and is accounted for in essentially the same manner as governmental funds. Agency Funds - Agency Funds are clearing type funds for the collection of taxes or deposits held in trust, on behalf of individuals, private organizations and other governments. The funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operation. ., C. Measurement Focus The accounting and reporting treatment applied to a fund is determined by its measurement — focus. All governmental funds and expendable trust funds are accounted for on a spending or "current financial resources" measurement focus. This means that only current assets and current liabilities are generally included on the balance sheets. (Their reported fund — balance is considered a measure of"available spendable resources.") Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" — during a period. Fixed assets used in governmental fund type operations(general fixed assets)are recorded ,■ at historical costs and accounted for in the General Fixed Assets Account Group. Public domain ("infrastructure") general fixed assets consisting of roads, bridges, curbs and gutters, are capitalized along with other general fixed assets. No depreciation has been provided on general fixed assets. — Long-term liabilities expected to be financed from governmental funds are accounted for in the General Long-Term Debt Account Group., not in the governmental funds. These two account groups are not"funds." They are concerned only with the measurement of financial position. They are not involved with measurement of results of operations. Noncurrent portions of long-term receivables due to governmental funds are reported on their balance sheets, in spite of their measurement focus. However, special reporting treatments are used to indicate in all governmental funds that they should not be considered"available spendable resources,"since they do not represent net current assets. Recognition of revenues in these funds represented by noncurrent receivables is deferred until they become current receivables. Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type — expenditures or fund liabilities. They are instead reported as liabilities in the General Long- Term Debt Account Group. 36 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 1. Summary of Significant Accounting Policies C. Measurement Focus(Continued) NMI Proprietary funds are accounted for on a cost of services or "capital maintenance" measurement focus. This means that all assets, including fixed assets, and all liabilities, including long-term liabilities, associated with their activity are included on their balance —' sheets. Their reported fund equity is segregated into contributed capital and retained earnings components. Proprietary fund type operating statements present increase (revenues)and decreases (expenses)in net total assets. D. Basis of Accounting Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. Governmental Funds and Expendable Trust Funds are accounted for using the modified accrual basis of accounting. Their revenues are recognized when they become susceptible to accrual, i.e., both measureable and available. Substantially all revenues are accrued. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred, except for principal and interest on general long- term debt which is recognized when due. Agency Fund assets and liabilities are accounted for on the modified accrual basis of accounting. Proprietary funds are accounted for using the accrual basis of accounting. Revenues are recognized when they are earned, and expenses are recognized when they are incurred. The City has implemented Statement No. 20 of the Governmental Accounting Standards Board (GASB), Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting. This statement provides guidance on business-type accounting and financial reporting for proprietary activities. Proprietary activities should apply all applicable GASB pronouncements as well as the .— following pronouncements issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements: Statements of Interpretations of the Financial Accounting Standards Board (FASB), Accounting Principles Board Opinions, and Accounting Research Bulletins of the Committee on Accounting Procedures. In addition, a proprietary activity may elect to apply all FASB Statements and Interpretations issued after November 30, 1989, except for those that conflict with GASB pronouncements. The City has elected not to apply FASB Statements and Interpretations issued after November 30, 1989. E. Budgets and Budgetary Accounting 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. 37 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 — 1. Summary of Significant Accounting Policies(Continued) — E. Budgets and Budgetary Accounting (Continued) 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. 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 approval. 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, Special Revenue Funds and Capital Improvement Capital Projects 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. (See Note 16 for further information on budgeted and unbudgeted capital project funds.) 8. Budgets for the General, Special Revenue and Capital Improvement Capital Projects Funds are adopted on a basis consistent with generally accepted accounting principles. 9. 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. — 10. 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. 11. In 1996, expenditures exceeded appropriations as follows: Solid Waste Abatement Special Revenue Fund: Budget Actual Over Budget Supplies and other charges $194,523 $203,181 $(8,658) 38 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 1. Summary of Significant Accounting Policies(Continued). F. Assets, Liabilities and Fund Equity 1) Cash and Cash Equivalents,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. Earnings from such investments are allocated to the respective funds on the basis of applicable cash balance participation by each fund. With exception of the Deferred Compensation Agency Fund which states investments in a deferred compensation plan at market, all investments are stated at cost which approximates market. Investments with original maturities of three months or less are classified as cash equivalents. The City provides temporary advances to funds that have insufficient cash balances by means of an advance from the internal service and enterprise funds. This is classified as an interfund payable in the fund receiving the advance and as an offsetting interfund receivable in the internal service and enterprise funds. In accordance with authorized investment laws, the City invests in various mortgage- backed securities, such as collateralized mortgage obligations. These securities are -- reported at cost in the balance sheet. They are reported in aggregate as U.S. Government Agencies in the disclosure of custodial credit risk. (See Note 2 on Investments). 2) Receivables Property Taxes The property tax levy was set by the City Council in November and was certified to the County for collection the following year. In Minnesota, counties act as collection agents for all property taxes. The County spreads the levies over all taxable property in the City. Such taxes become receivables of the City as of January 1. Property taxes are payable in equal installments by property owners to the County as follows: — Personal property- February 28 and June 30 Real property-May 15 and October 15 — The County remits the collections to the City and other taxing districts four times a year, in January, April, July and December. During 1996 taxes were adjusted downward $60,765 by Anoka County due to abatements and court ordered settlements. — Unpaid taxes at December 31 become liens on the respective property and are classified in the financial statements as delinquent taxes receivable. The receivable is fully offset by deferred revenue as it is not available to finance current expenditures. Taxes payable on homestead property (as defined by State Statutes) are partially reduced by Homestead and Agriculture Credit Aid. This aid is paid to the City by the State in lieu of taxes levied against homestead property. The State remits this aid in — two equal installments in July and December each year. 39 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 -- 1. Summary of Significant Accounting Policies(Continued) _ F. Assets, Liabilities and Fund Equity(Continued) 2) Receivables(Continued) Special Assessments Receivable 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 (including interest) is handled by the County in the same manner as property taxes. Property owners are allowed to prepay total future installments without interest or prepayment penalties. Special assessments receivable includes the following components: Unremitted - amounts collected by Anoka County and not remitted to the City prior to year end. Delinquent-amounts billed to property owners but not paid. Deferred - assessment installments which will be billed to property owners in _ future years. 3) Inventories Inventory in the General Fund consists of expendable supplies held for consumption and is recorded at cost on a first in first out basis. The cost is recorded as an expenditure at the time individual inventory items are used. Reported inventories are equally offset by a fund balance reserve which indicates that they do not constitute "available spendable resources" even though they are a component of net current assets. Proprietary Funds inventory items are expensed at the time they are sold or used. (Consumption method). Liquor inventories are recorded on the average cost basis. 4) Property and Equipment/General Fixed Assets All fixed assets are recorded at historical cost or estimated historical cost, if the original cost was not available. Donated fixed assets are carried at the fair market value on the -- date donated. Additions to general fixed assets for general City purposes, including public domain (infrastructure) fixed assets are recorded as expenditures of the applicable fund in the — year in which the fixed asset was purchased or constructed, and are capitalized in the General Fixed Asset Account Group. Depreciation is not recorded on these assets. 40 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 1. Summary of Sianificant Accounting Policies(Continued) F. Assets,Liabilities and Fund Equity(Continued) 4) Property and Equipment/General Fixed Assets(Continued) Property and equipment of the proprietary funds are capitalized in these funds. Depreciation of exhaustible property and equipment of the proprietary funds is charged — as an expense against their operations and accumulated depreciation is reported on proprietary fund balance sheets. Depreciation has been provided over the estimated useful lives using the straight line method. The estimated useful lives are as follows: Improvements Other Than Building 20-50 years Buildings 20-50 years Machinery and Equipment 5- 10 years Land N/A 5) Other Assets This account represents the market value of investments and other assets held in an agency fund for the City's deferred compensation plan. (See Note 17.) 6) 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. 7) Encumbrances Encumbrances represent purchase commitments. Encumbrances outstanding at year end are reported as reservations of fund balance since they do not constitute expenditures or liabilities. G. Revenues, Expenditures and Expenses The following transactions are accounted for as described below: General Property Taxes/Special Assessments - Revenue is recognized in the year of — collection, with amounts due from the County and received early in the following year set up as receivable (unremitted receivables). Uncollected (delinquent) taxes and special assessments receivable are fully offset by deferred revenue until they become available to finance current expenditures. General property taxes and special assessments are recognized when cash is received to prevent overstating due to delinquencies. Principal Portion of Special Assessments - Revenue is recognized in the year the assessments are collected. Interest Revenue on Special Assessments Receivable - Interest revenue is recognized in the year of collection of the current principal installment. 41 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 — 1. Summary of Significant Accountings Policies(Continued) — G. Revenues, Expenditures and Expenses (Continued) Intergovernmental Revenues - Intergovernmental revenues in the form of state aids are -- recorded as revenue when allocations are made by statutory formula. Other intergovernmental revenues received as reimbursements for specific purposes or projects are recognized based upon the expenditures incurred. Intergovernmental revenues received through abatements or shares are recorded in the year determined to be measurable and available. Interest on Investments- Interest is recorded as revenue in the year earned. Water and Sewer Service Charges- Revenue is recognized when earned with no allowance for uncollectibles as delinquent accounts are certified as a special assessment lien against the property billed. Unbilled service charges are included in receivables at year end. "' Other Revenues - Licenses, fines, penalties and miscellaneous revenues are recorded as revenues when received in cash because they are generally not measurable until actually — received. Interest Expense on Bonded Indebtedness - Interest expense is recorded as an expenditure when paid in the governmental fund types and accrued when incurred in the proprietary fund types. Bond and Interest Payments Due January 1 - Expenditures are recognized when amounts — are remitted to the paying agent(usually in December)for payment of bonds and interest. H. Comparative Data Comparative total data for the prior year have been presented in the accompanying combined financial statements in order to provide an understanding of changes in the City's financial position and operations. However, comparative (i.e., presentation of prior year totals by fund type) data have not been presented in all statements since their inclusion would make the statements unduly complex and difficult to read. Total columns on the combined statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or cash flows in conformity with generally accepted accounting principles. Interfund eliminations have not been made in the aggregation of this data. Beginning in 1996, the HRA component unit is presented using the discrete method in accordance with GASB No. 14. Certain prior year totals have been reclassified to be — consistent with the current year presentation. 2. Deposits and Investments — A. Deposits In accordance with applicable Minnesota Statutes, the City maintains deposits at depository banks authorized by the City Council. All such depositories are members of the Federal Reserve System. 42 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 2. Deposits and Investments(Continued} A. Deposits(Continued) Minnesota Statutes require that all deposits be protected by insurance, surety bond or collateral. If collateral is pledged as protection for the deposits, State Statutes require that it be held by a third party in the City's name. The market value of the collateral must at a minimum be 110% of the deposits not covered by insurance or bonds (140% in the case of mortgage backed collateral). Repurchase agreements are intentionally overcollateralized at 105%to insure that the safety of investment principal is attained and losses do not occur from rapid overnight deterioration. Due to wire transfers and tax settlements credited by the bank at the end of the day, there were several occasions during the year where overnight deposits were undercollateralized. On each occasion, the uncollateralized balance was invested with another financial institution on the following day. Balances at December 31, 1996 are as follows: Bank Carrying Balances Amount City $505,367 $1,003,515 HRA $145,352 $143,285 The entire bank balances are covered by Federal Depository Insurance or collateral held by -- the City/HRA's agent in the City/HRA's name. B. Investments The City is authorized by Minnesota Statutes to invest in the following: (a) Direct obligations or obligations guaranteed by the United States or its agencies. (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. (c) General obligations of the State of Minnesota or any of its municipalities. (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 reserve 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, or certain Minnesota securities broker dealers. (g) Future contracts sold under authority of Minnesota Statutes 471.56, subd. 5. 43 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 — 2. Deposits and Investments(Continued) — B. Investments(Continued) The City invests in collateralized mortgage obligations (a form of mortgage back security). These -- securities allow cash flows to be split so that different classes of securities with different maturities and coupons may be created. The City by policy is only allowed to invest in these types of securities if they are classified as a Planned Amortization Class 1 (PAC 1) with a stated maturity of 3 years or less. The City's investments are categorized below to give an indication of the level of risk assumed at year end. The level of risk is defined by the following criteria set out by the Governmental Accounting Standards Board within Statement No. 3. Category 1 includes investments that are insured or registered for which the securities are held by the City or its agent in the City's name. Category 2 includes uninsured and unregistered investments for which the securities are held by the — counterparty's trust department or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counterparty, or by its trust department or agent but not in the City's name. The carrying value, market value and credit risk of the investments held by the City at year end are as follows: Credit Risk Category Carrying Market Securities Type 1 2 3 Amount Value U.S.Government agencies or instrumentalities $24,736,369 $24,736,369 $24,359,353 Commercial paper 4,947,044 4,947,044 4,947,044 — $29,683,413 29,683,413 29,306,397 Investment in money — market and mutual funds 5,580,885 5,512,013 Investment in deferred compensated plans(at market) 6,058,906 6,058,906 Total investments $41,323,204 $40,877,316 44 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 2. Deposits and Investments(Continued) B. Investments(Continued) The carrying value, market value and credit risk of the investments held by the HRA at year end are as follows: Credit Risk Category Carrying Market Securities Type 1 2 3 Amount Value U.S.Government securities $132,474 $132,474 $199,336 U.S.Government agencies or instrumentalities 4,675,205 4,675,205 4,617,393 Certificate of Deposit 97,000 97,000 93,120 $4,904,679 4,904,679 4,909,849 Investment in money market fund(at market) 1,320,121 1,320,121 Investment in deferred compensated plans(at market) 22,116 22,116 Total investments $6,246,916 $6,252.086 3. Special Assessments Receivable Special assessments receivable at December 31, 1996 are as follows: — Capital Special Special Improvements Assessment Public Assessment Capital Capital Utilities General Debt Service Projects Projects Enterprise Total Unremitted $138 $6,030 $ $ $ $6,168 Delinquent 98 79,766 191 80,055 Deferred 7,199 1,828,192 11,089 62,156 1,908,636 Total $7,435 $1,913,988 $11,089 $62,156 $191 $1,994,859 45 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 — 4. Due From Other Governments — Amounts due from other governments at December 31, 1996 are as follows: General Fund: — State of Minnesota: a)State Aid Maintenance $19,459 Anoka County: ,_ a) Fines and Forfeits 14,253 b)Gas Reimbursement 381 Housing and Redevelopement Authority 4,172 Total General Fund $38,265 Special Revenue Funds: — Anoka County: a)Community Development Block Grant $14,006 b)Project Safety Net 27,643 c) Recycling 42,586 United Way a)Chore Services 435 — State of Minnesota a) Rap Grant 14,292 b)Cops More Grant 8,771 Metropolitan Council —' a) Section 8 11,897 HRA a) Reimbursement 731 — Total Special Revenue Funds $120,361 Capital Project Funds: — Spring Lake Park Fire Department $20,000 Enterprise Funds: Metropolitan Council Environmental Services (MCES)- Current portion of amounts due from MCES $23,200 Anoka County WCA 955 .— $24,155 Metropolitan Council Environmental Services (MCES)- Noncurrent portion -long term receivable of amounts due from MCES $74,818 — The noncurrent receivable of$74,818 in the Utility Enterprise Fund is comprised of the balance due for the sale of the City's sewer interceptors sold to the Metropolitan Council Environmental Service January 1, 1971. This receivable will be paid to the City in annual installments with interest through 1999. Repayment will be made by issuing credits against future disposal charges from the Commission. — 46 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 5. Chances in General Fixed Assets A summary of changes in general fixed assets are as follows: Balance Balance January 1 December 31, 1996 Additions Deletions 1996 • Land $2,484,913 $41,991 $2,526,904 Buildings 4,894,763 4,894,763 Improvements other than buildings 16,520,604 1,676,438 18,197,042 Machinery and equipment 5,429,593 379,423 200,144 5,608,872 Total $29,329,873 $2,097,852 $200,144 $31,227,581 6. Summary of Proprietary Fund Property and Equipment A summary of proprietary fund type property, plant and equipment at December 31, 1996 follows: — Internal Enterprise Service Funds Funds -_ Public Information Liquor Utilities Systems Total Land $66,961 $154,531 $221,492 Buildings 130,210 1,529,236 1,659,446 Improvements other than 32,163 buildings 8,452,485 8,452,485 Machinery and equipment 184,668 2,461,786 1,024,012 3,670,466 Water and sewer lines 18,041,569 18,041,569 414,002 30,639,607 1,024,012 32,045,458 Less: Accumulated depreciation (235,271) (10,085,809) (738,606) (11,059,686) Net property and equipment $178,731 $20,553,798 $285,406 $20,985,772 7. Lona-Term Debt '— The following is a summary of long-term debt transactions of the City for the year ended December 31, 1996. General Obligation Bonds Special Tax Construction Capital Tax Assessment Increment-City Revenue Loan Lease Total Increment-HRA Debt payable-January 1,1996 $1,555,000 $13,575,000 $2,325,000 $123,931 $13,666 $17,592,597 $1,620,000 Debt issued 320,000 2,615,000 2,935,000 Debt retired (175,000) (115,000) (4,184) (13,666) (307,850) (355,000) Debt payable-December 31,1996 $1,700,000 $13,575,000 $4,825,000 $119,747 $ $20,219,747 $1,265,000 47 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 — 7. Long-Term Debt(Continued) — Bonds payable at December 31, 1996 are comprised of the following individual issues (in thousands of dollars): — General Long-Term Debt: $9,485,000 General Obligation Tax Increment Refunding Bonds of 1990 due —" in varying annual installments of$810,000-$1,270,000 through August 1, 2009; interest at 6.60%-7.00%. $9,485 $1,020,000 Special Assessment Bonds of 1991 due in varying annual installments of$35,000-$90,000 through February 1, 2005; interest at 5.6%-6.6%. 600 $855,000 General Obligation Special Assessment bonds of 1992, Series A, due in varying annual installments of$50,000 to$95,000 through February 1,2004; interest at 3.00%-5.25%. 635 $4,090,000 General Obligation Temporary Tax Increment Bonds of 1995, due on November 1, 1998; interest at 4.10%. 4,090 — $150,000 Special Assessment Bonds of 1994 due in varying annual installments of$5,000-$60,000 through February 1, 2005; interest at 4.75% — to 6.10%. 145 $320,000 Special Assessment Bonds of 1996 due in varying annual — installments of$30,000-$35,000 through February 1,2007; interest at 4.05% to 4.95%. 320 — Subtotal General Long-Term Debt 15,275 Revenue Bonds: $1,615,000 General Obligation Water Revenue Bonds of 1991 due in varying — annual installments $35,000-$140,000 through February 1, 2011; interest at 5%-6.8%. 1,385 $620,000 General Obligation Water Revenue Bonds of 1992, Series B, due in varying annual installments of$35,000 to$55,000 through February 1, 2007; interest at 3.0%to 5.7%. 515 $335,000 General Obligation Water, Sewer and Storm Water Revenue Bonds of 1994 due in varying annual installments of$5,000-$25,000 through February 1,2005; interest at 4.75%to 6.10%. 310 — $2,615,000 General Obligation Water and Storm Water Revenue Bonds of 1996 due in varying annual installments of$65,000-$165,000 through — February 1,2012; interest at 4.05%to 5.30%. 2615 Subtotal Revenue Bonds 4,825 — Total Bonds Payable $20,100 48 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 - 7. Lona-Term Debt(Continued) Non-bonded indebtedness at December 31, 1996 is comprised of the following: -- Construction Loan: $135,000 Locke Lake Dam Reconstruction loan from the State Department of Natural Resources due in annual installments of$12,301 through April 1,2012;interest at 6.55%. In 1997,the Minnesota Legislature is considering forgiving this loan in full. $120 The General Obligation Tax Increment Refunding Bonds are payable primarily from tax increment revenue with any deficiency to be provided by general property taxes. General Obligation Special Assessment Bonds are payable from assessments levied against benefited properties. While it is anticipated that the assessment will be adequate to make the required debt payments, the City is responsible for any deficiency that may occur. The General Obligation Revenue Bonds are payable from the net revenues of the City's water, sewer and storm water systems in addition to the general obligation pledge. Annual Requirements to Amortize Long-Term Debt December 31, 1996 General Obligation Bonds Year Ending Special Tax Construction Tax December 31, Assessment Increment-City Revenue Loan Total Increment-HRA 1997 271,110 816,820 344,917 12,301 1,445,148 479,705 1998 294,530 4,906,820 506,874 12,301 5,720,525 479,775 1999 283,426 649,130 533,645 12,301 1,478,502 480,700 2000 277,474 649,130 528,927 12,301 1,467,832 2001 269,769 1,459,130 537,693 12,301 2,278,893 - •=01 2002-2006 659,372 7,293,940 2,594,405 61,505 10,609,222 - 2007-2011 30,742 4,267,300 1,721,970 61,505 6,081,517 - 2012 - - 169,373 12,301 181,674 - $2,086,423 $20,042,270 $6,937,804 $196,816 $29,263,313 $1,440,180 $10,505,332 is available in the Debt Service Fund to service the Special Assessment and _ Redevelopment Bonds. $10,668,535 is available in the Public Utility Enterprise Funds, to service the Water, Sewer and Storm Water Revenue Bonds. There are a number of limitations and restrictions contained in the various bond indentures. The City is in compliance with all significant limitations and restrictions. Legal Debt Margin - Under applicable Statute Statutes, the legal debt margin is 2% of the most recent market value less certain deductions. At December 31, 1996, the legal debt margin was $22,799,765. HRA bonds payable at December 31, 1996 comprised of the following issues (in thousands of dollars): Revenue Bonds: $4,070,000 Tax Increment Revenue Refunding Bonds of 1985 due in varying annual installments of$265,000-$460,000 through February 1, 1999; interest at 6.75%-9.00%. $1,265 49 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 8. 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 pension 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 public employee retirement systems. These plans are established and �' administered in accordance with Minnesota Statutes, Chapters 353 and 356. PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated members are covered by Social Security and Basic 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. The payroll for employees covered by PERF and PEPFF for the year ended December 31, 1996 was "' $3,625,858 and$1,658,084 respectively; the City's total payroll was$6,477,360. 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 member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for Coordinated and Basic members. The retiring member receives the higher of step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rates for a Basic member is 2 percent of average salary for each of the first 10 years of service and 2.5 percent for each remaining year. For a Coordinated member, the annuity accrual is 1 percent of average salary for each of the first 10 years and 1.5 percent of each remaining year. Using Method 2, the annuity accrual rate is 2.5 percent of average salary for Basic members and 1.5 percent for Coordinated members. For PEPFF members, the annuity accrual rate is 2.65 percent of average salary for each year of service. For PERF members whose annuity is calculated using Method 1, and for all PEPFF members, a full annuity is available when age plus years of service equal 90. A _ reduced retirement annuity is also available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A normal annuity is a lifetime annuity that ceases upon the death of the retiree. No survivor annuity is payable. There are also various types of joint and survivor annuity options available which will reduce the monthly normal annuity amount, because the annuity is payable over joint lives. Members may also leave their contributions in the fund upon termination of public service, in order to qualify for a deferred annuity at retirement age. Refunds of ... contributions are available at any time to members who leave public service, but before retirement benefits begin. The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active participants. Vested, terminated employees who are entitled to benefits, but are not receiving them yet, are bound by the provisions in effect at the time they last terminated their public service. AMP 50 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 8. Defined Benefit Pension Plans-Statewide(Continued) B. Contributions Required and Contributions Made Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. The City makes annual contributions to the pension plans equal to the amount required by State Statutes. According to Minnesota Statutes Chapter 356.215, Subdivision 4 (g), the date of full funding required for the PERF and the PEPFF is July 1, 2020. As part of the annual actuarial valuation, PERA's actuary determines the sufficiency of the statutory contribution rates towards meeting the required full funding deadline. The actuary compares the actual contribution rate to a "required" contribution rate. The required contribution rate consists of(a) normal costs based on entry age normal costs methods, (b) OWN a supplemental contribution for amortizing any unfunded actuarial accrued liability by the date required for full funding, and © an allowance for administrative expenses. Current combined statutory contribution rates and actuarially required contribution rates for the plans are as follows: Statutory Rates: Required Employees Employer Rates* PERF: PERF (A blended rate for both the Basic and Coordinated plans 4.3% 4.6% 9.6% PEPFF 7.6% 11.4% 19.0% The recommended rates scheduled above represent the required rates for fiscal year 1996 contributions as reported in the July 1, 1995 actuarial valuation reports. Total contributions made by the City during fiscal year 1996 were: Percentage of Amounts Covered Payroll Employees Employer Employees Employer PERF $156,703 $167,644 4.32% 4.62% PEPFF 126,041 189,021 7.60% 11.40% Total $282,744 $356,665 The City's contribution for the year ended June 30, 1996, to the PERF represented .13 percent of total contributions required of all participating entities. For the PEPFF, contributions for the year ended June 30, 1996, represented .51 percent of total contributions required of all participating entities. 51 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 — 8. Defined Benefit Pension Plans-Statewide(Continued) C. Funding Status and Progress 1. Pension Benefit Obligation The "pension benefit obligation" is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and — step-rate benefits, estimated to be payable in the future as a result of employee service to date. The measure is the actuarial present value of credited projected benefits and is intended to help users assess PERA"s funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among Public Employees Retirement Systems and among employers. The measure is independent of the actuarial funding method used to determine required contributions, which is discussed in Section B. PERA does not — make separate measurements of assets and pension benefit obligation for individual employers. — The pension benefit obligations of PERA s of June 30, 1996,were as follows: PERF PEPFF Total pension benefit obligations $6,608,646 $1,243,429 Net assets available for benefits, — At cost 5,702,248 1,592,671 Unfunded (assets in excess of) _ pension benefit obligation $906,398 ($349,242) Net assets available for benefits, At market $5,954,697 $1,713,687 The pension benefit obligation was determined as part of an actuarial valuation at July 1, 1996. For the PERF, significant actuarial assumptions used in the calculation of the pension _ benefit obligation include (a) a rate of return on the investment of present and future assets of 8.5 percent per year, compounded annually, prior to retirement, and 5 percent per year, compounded annually, following retirement; (b) projected salary increases taken from an age related table which incorporates a 5 percent base inflation — assumption; (c)payroll growth at 6 percent per year, consisting of 5 percent for inflation and 1 percent due to growth in group size; (d) post-retirement benefit increases that are accounted for by the 5 percent rate of return assumption following retirement; and _ (e) mortality rates based on the 1983 Group Annuity Mortality Table set forward one year for retired members and set back five years for each active member. 52 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS -- DECEMBER 31. 1996 8. Defined Benefit Pension Plans-Statewide(Continued) C. Funding Status and Progress(Continued) 1. Pension Benefit Obligation(Continued) Actuarial assumption used in the calculation of the PEPFF include (a) a rate of return on the investment of present and future assets of 8.5 percent per year, compounded - annually, prior to retirement, and 5 percent per year, compounded annually following retirement; (b) projected salary increases of 6.5 percent per year, compounded annually, attributable to the effects of inflation; (c) post-retirement increases that are accounted for the 5 percent rate of return assumption following retirement; and (d) mortality rates based on the 1971 Group Annuity Mortality Table projected to 1984 for males and females. 2. Changes in Actuarial Assumptions Potential changes in the actuarial assumptions used for the PEPFF may be made in the future. Results of an experience study for the fund during the four-year period ending June 30, 1994, disclosed (a) retirees are living longer; (b)the expected active member death rate is declining; (c) the trend toward earlier retirement continues; and (d) the pattern of salary increases varies substantially by ages, with a strong merit and seniority component evident at the younger ages. Based on these results, PERA will soon consider revising the actuarial assumptions for retirement age, mortality, payroll growth, and individual salary increases. These changes, if adopted within fiscal year 1996,will significantly impact the July 1, 1997 actuarial valuation of the PEPFF. 3. Changes in Benefit Provisions Since the July 1, 1995 actuarial valuation, there were no changes in actuarial assumptions of the PERA and the PEPFF which impacted funding costs. D. Ten-Year Historical Trend Information Ten-year historical trend information is presented in PERA's Comprehensive Annual Financial Report for the year ended June 30, 1996. This information is useful in assessing the pension plan's accumulation of sufficient assets to pay pension benefits as they become due. E. Related Party Investments As of June 30, 1996, and for the fiscal year then ended, PERA held no securities issued by the City or other related parties. 53 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 -- 9. Defined Contribution Pension Plan -Fridley Volunteer Firefighter Relief Association A. 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. The City's annual payroll was $6,477,360. There are no payroll earnings for volunteer firefighters subject to pension contributions; however, in — accordance with the Associations bylaws, each active and deferred member contributes $150 per year to the Association. The City also remitted $97,782 and $76,077 in State Aid to the Association for 1996 and 1995 respectively. ._ Currently the City does not levy any taxes on behalf of the Association. In the event that the state aid formulas would change, the City would pick up the shortfall. The contribution benefits for each member (and earnings allocated to each members account)are vested as follows: Years of Percent Service Vested 0 thru 9 years 0.00% 10 years 60.00% 11 years 64.00% 12 years 68.00% 13 years 72.00% 14 years 76.00% 15 years 80.00% — 16 years 84.00% 17 years 88.00% 18 years 92.00% — 19 years 96.00% 20 years and over 100.00% Normal Retirement Eligibility 50 years of age and 20 years of service. — Deferred Vested Eligibility On termination after completion of 10 years of service, a deferred benefit is payable at age .... 50 equal to the accrued benefit times the vesting percentage. Lump Sum Death Benefit Payment of an amount not to exceed $1,000 as a funeral benefit to the surviving spouse, or if no surviving spouse, the estate of the deceased Association member. During 1996 and as of December 31, 1996 the Association held no securities issued by the City or other related parties. 54 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 10. Defined Benefit Pension Plan -Fridley Police Consolidation with Statewide Plan A. Plan Description The City of Fridley Police Relief Association, a single-employer public employee retirement system consolidated with the Public Employees Retirement Association of Minnesota's (PERA) Police and Fire Consolidation (PFCF), an agent multiple employer retirement plan, on November 30, 1993. Police officers of the City hired prior to December 15, 1975, were members of the Association. Police officers hired after December 15, 1975 are members of the PERA Public Employees Police and Fire Fund. The City's payroll for employees covered by PFCF for the year ended December 31, 1996 was $392,856; the City's total payroll was$6,477,360. PFCF members have the option to choose benefits identical to these of the Public Employees Police & Fire Fund identified if Note 8; otherwise, they are covered by the benefit provisions of the relief association at the time of consolidation, which were as follows: Ante and Service Retirement Eligibility 50 years of age and 10 years of service Amount For first 10 years of service, 15/75 of base pay. For each year in excess of 10, an additional 2/75 is added. For each year in excess of 20, an additional 1/75 is added up to a maximum of 42/75 of base pay. Pay Used for Plan Purposes For benefit determination purposes, "base pay" means the salary of a first grade patrolman for the second month of the previous fiscal year. For contribution purposes, it means the present base pay of a first grade patrolman. Disability Retirement Eligibility Disabled to the extent that member is no longer able to perform the duties of a — police officer before being eligible for age and service retirement. Amount 36/75 of base pay. Member's Death while Active,or in Deferred Status or Retired Eligibility Spouse Legally married to member at least one year prior to separation from service and residing with member at time of death. Benefits terminate upon remarriage. Child Younger than age 18. Amount Spouse 18/75 of base pay. Child 6/75 of base pay per child. Children's maximum is 18/75 if spouse is receiving benefits; 36/75 if spouse is not receiving benefits. Vested Deferred 10 years of service and separated before age 50. Maximum benefit is 40/75 of base pay. Payment beginning is deferred to attainment of age 50. 55 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 -- 10. Defined Benefit Pension Plan -Fridley Police Consolidation with Statewide Plan A. Plan Description (Continued) Post-Retirement Adjustment("Escalator") Each time base pay was changed, payments to all benefit recipients were simultaneously changed by the same percent that base pay was changed. (Exception - For members on age and service retirement with less than 20 years service, the maximum increase was 3% compounded annually. Also, applies to survivors of these retirees). B. Funding Status and Progress The amount shown below as the "pension benefit obligation" is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases, estimated to be payable in the future as a result of employee service to date. The measure is the actuarial present value of credited projected benefits and is -, intended to (a) help users assess the plan's funding status on a going-concern basis; (b) assess progress being made in accumulating sufficient assets to pay benefits when due; and, (c) allow for comparisons among public employees retirement plans. The _ measurement is independent of the actuarial funding method used to determine contributions to the plan. The pension benefit obligation was determined as part of the most recent actuarial valuation — of the plan which was dated June 30, 1996. Significant actuarial assumptions used in determining the pension benefit obligation include (a) a rate of return on the investment of present and future assets of 8.5% per year compounded annually, (b) projected salary _ increases of 6.5% percent per year, compounded annually, attributable to the effects of inflation; (c) post-retirement increases that are accounted for the 5 percent rate of return assumption following retirement; and (d) mortality rates based on the 1971 Group Annuity Mortality Table projected to 1984 for males and females. .■ mwm 56 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 10. Defined Benefit Pension Plan -Fridley Police Consolidation with Statewide Plan B. Funding Status and Progress(Continued) As of June 30, 1996 and 1995, the actuarial valuation dates, the unfunded pension benefit obligation was determined as follows: 1996 1995 — Pension Benefit Obligation: Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits 492,122,440 $449,334,670 Current employees: Accumulated employee contributions including allocated investment income 50,471,964 48,901,438 Employer financed 226,536,905 _ 224,538,159 Total Pension Benefit Obligation 769,131,309 722,774,267 Net assets available for benefits, at cost (market value was $768,245,000 for 1996 and $682,337,000 for 1995) 746,670,641 671,829,079 Unfunded Pension Benefit Obligation $22,460,668 $50,945,188 Net assets available/Pension Benefit Obligation 97.08% 92.95% No changes in actuarial assumptions or benefit provisions that would significantly affect the valuation of the pension benefit obligation occurred during 1995. C. Contributions Required and Contributions Made Minnesota Statutes Chapter 353 sets the rate for employer and employee contributions. The City makes annual contributions to the pension plans equal to the amount required by State Statutes. According to Minnesota Statutes Chapter 356.215, Subdivision 4 (g), the date of full funding required for the PFCF is the year 2020. As part of the annual actuarial valuation, PERA's actuary determines the sufficiency of the statutory contribution rates towards meeting the required full funding deadline. Contributions actuarially required are - equal to contributions made due to the additional municipal contribution, if any, paid by the employer. Current combined statutory contribution rates and actuarially required contribution rates for the PFCF are 7.60%for the employee and 11.40%for the employer. Total contributions made by the City and its employees for the year ended December 31, 1996, were $44,785 and $29,857, respectively. The contributions represented 11.40% and 7.60% of covered payroll. The City contributions for the year ended December 31, 1996 .„ represented .41%of the total contributions required of all participating entities. 57 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 -- 10. Defined Benefit Pension Plan-Fridley Police Consolidation with Statewide Plan D. Historical Trend Information Historical trend information related to the pension plan is presented in the Association's _ annual financial report. The information is presented to enable the reader to assess the progress made by the Association in accumulating sufficient assets to pay pension benefits as they become due. 11. Interfund Receivables and Payables — Interfund receivables and payables at December 31, 1996 are as follows: Interfund Interfund Receivables Payables — Due From/Due To: General Fund $84,821 $ Special Revenue Funds: — Grant Management Fund 40,857 HRA Reimbursement Fund 155 Housing Revitalization Fund 42,035 CAT Fund 1,774 Capital Projects Funds: Capital Improvements Fund 892,091 Special Assessment Fund 892,091 — $976,912 $976,912 58 CITY OF FRIDLEY.MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31.1996 12. Reserved Fund Balances/Retained Earnings The following reservations have been made of various fund balances/retained earnings at December 31, 1996: General Fund: Reserved for: _ Encumbrances $21,197 Inventory 24,904 Long-term receivables 122,760 168,861 Debt Service Funds: Reserved for Debt Service 623,517 Capital Projects Funds: Reserved for: Encumbrances 1,182,367 Total Governmental Funds $1,974,745 Retained Earnings: Enterprise Funds: Public Utilities Funds: Reserved for capital outlay $2,547,493 Internal Service Funds: Employee Benefits Fund: Reserved for employee benefits 103,285 Total Proprietary Funds $2,650,778 HRA Reserved for Debt Service $921,330 Reserved for Mortgage Receivable $2,739,215 Total HRA $3,660,545 59 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 -- 13. Designated Fund Balance The following designations have been made of various fund balances at December 31, 1996: General Fund: — Working capital $3,954,657 Subsequent year's expenditures 491,084 Contingencies 1,002,971 — Replacement of fixed assets 1,301,800 Total General Fund 6,750,512 Special Revenue Funds: — Cable TV Fund: Subsequent year's expenditures 25,736 Cable TV program 133,216 — Grant Management Fund: Subsequent year's expenditures 24,146 Solid Waste Abatement Fund: Subsequent year's expenditures 52,640 HRA Reimbursement Subsequent year's expenditures 512 Drug and Gambling Forfeiture Fund Drug and Gambling Enforcement 9,918 Total Special Revenue Funds 246,168 Capital Projects Funds: Capital Improvement Fund: Replacement of fixed assets 1,696,045 — Park improvement 681,997 Street improvements 4,903,824 Total Capital Project Fund 7,281,866 Total of Designated Fund Balances $14,278,546 60 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS — DECEMBER 31.1996 14. Contributed Capital — A reconciliation of contributed capital is as follows: Self Information Public Insurance Systems Utility Internal Internal _ Enterprise Service Service Fund Fund Fund Balance-January 1 $12,276,562 $1,000,000 $952,081 — Increases: Current capital contributions — Decreases: Depreciation of contributed assets (369,018) (47,689) — Balance-December 31 $11,907,544 $1,000,000 $904,392 61 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 — 15. Segment Information for Enterprise Funds The City maintains operating funds for Liquor and Utility (water, sewer, storm sewer operations). Segment information for the year ended December 31, 1996 is as follows: Total Enterprise Liquor Utility Funds — Sales(less cost of sales of$2,424,824) $646,913 $646,913 Operating revenues $5,791,287 $5,791,287 Operating expenses (503,678) (5,648,604) (6,152,282) Operating income (loss) 143,235 142,683 285,918 Nonoperating revenues (expenses)-net 66,599 287,195 353,794 — Operating transfers in (out) (75,000) (322,392) (397,392) Net income(loss) $134,834 $107,486 $242,320 Depreciation expense included in operating expenses $18,386 $729,231 $747,617 Property and equipment: Additions (including capital contributions) 1,740,624 1,740,624 Working capital 1,434,284 6,411,373 7,845,657 Total assets 1,775,986 28,201,972 29,977,958 Fund equity: Contribution capital 11,907,544 11,907,544 Retained earnings 1,613,015 10,668,535 12,281,550 Total fund equity $1,613,015 $22,576,079 $24,189,094 Current capital contributions $ 0 — Bonds payable $4,810,144 $4,810,144 62 CITY OF FRIDLEY.MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 199¢ _ 16. Unbudgeted Capital Project Funds The City does not budget all Capital Project Funds, and accordingly, the applicable columns of the Combined Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Exhibit A-3) excludes amounts relating to unbudgeted funds. A reconciliation of actual results for budgeted and unbudgeted funds is as follows: Other Fund - Financing Balance Sources December 31, Revenues Expenditures (Uses) 1996 All Capital Project Funds $1,131,011 $1,860,219 $642,442 $7,749,915 _ Less unbudgeted funds: Special Assessment Fund 20,655 1,440,019 1,353,287 (714,318) Budgeted Capital Project Funds $1,110,356 $420,200 ($710,845) $8,464,233 17. Deferred Compensation Plan The City offers its employees a deferred compensation plan established in accordance with Internal Revenue Code Section 457. The plan, available to all employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plans, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employees or other beneficiary) solely the property and rights of the City, subject only to the claims of the City's general creditors. Participants' rights under the plan are equal to those of general creditors of the City in an amount equal to the fair market value of the deferred account for each participant. It is the opinion of legal counsel that the City has no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor. The City believes that it is unlikely that it will use the assets to satisfy the claims of general creditors in the future. Plan assets, stated at market on December 31, 1996, are $6,058,906 for the City and are shown in the financial statements as "Other assets" in the agency funds with a corresponding credit to "Deposits payable." 63 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1996 -- 18. 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. The Self Insurance Fund provides coverage for up to a maximum of $50,000 for each liability and property claim with an annual aggregate of $100,000 for all claims. The City purchases insurance through the League of Minnesota Cities Insurance Trust for claims in excess of coverage provided by the fund and for all other risks of loss. The City's workers compensation insurance policy is retrospectively rated. With this type of policy, final premiums are determined after loss experience is known. The amount of premium adjustment, if any, is not reasonable estimable and is not recorded until received or paid. 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, are considered to be immaterial. As of December 31, 1996, the Self Insurance Fund has accumulated equity in the amount of — $1,810,087 to cover future claims and losses. Settlements of claims has not exceeded insurance coverage for each of the past three years. 19. Commitments Operating Lease The City leases property at the Holly Shopping Center for a warehouse liquor store. The City renewed the lease on March 1, 1996 for the period ending February 28, 1997. Total rental expense for 1996 was$48,200. Construction Commitments There were significant construction commitments at December 31, 1996, were in regard to the Water Treatment Plant No. 3 project. The bid on the project was awarded in the amount of$1,507,485 with $829,363 completed to date and a remaining commitment of$678,122. 20. Deficit Balances The following funds had a deficit balance at December 31, 1996: Special Revenue Funds: Housing Revitalization ($42,379) — Chemical Assessment Team ($2,670) Capital Projects Funds: Special assessments ($714,318) These deficit balance will be funded by grant reimbursements and transfers from other funds. 64 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS .-. DECEMBER 31. 1996 21. Tax Increment Districts The Fridley Housing and Redevelopment Authority is the administrating authority for the following Tax Increment Financing Districts: Retained Year Tax Capacity Values Fiscal By Established District Original Current Captured Disparity Authority 1979 1 $238,844 $820,898 $582,054 ($5,202) $576,852 1981 2 71,893 808,562 736,669 736,669 1982 3 244,445 1,780,270 1,535,825 (341,136) 1,194,689 1985 6 1986 7 10,960 79,328 68,368 68,368 1986 8 28,429 34,740 6,311 6,311 1989 9 941,465 872,057 1991 11 61,952 94,983 33,031 33,031 1992 12 106,711 183,670 76,959 76,959 1995 13 1995 14 $1,704,699 $4,674,508 $3,039,217 ($346,338) $2,692,879 All debt issued is pooled debt. Total bonds issued are $46,695,000. Total amount of bonds .., redeemed are $31,855,000. Outstanding bonds at December 31, 1995, are $13,575,000; HRA outstanding bonds at December 31, 1996 are $1,265,000 All taxable value is currently retained by the Housing and Redevelopment Authority. 22. Contingent Liabilities and Subsequent Events In 1996, the City agreed to loan the HRA $1,500,000 in order to assist the HRA with its housing rehabilitation program. The loan was made to the HRA in 1997 and is to be repaid to the City over a period of 15 years. The HRA is involved in ongoing litigation regarding the condemnation of certain property acquired in 1995. In 1996, the Anoka County Condemnation Commissioners changed the acquisition value on the property to 1.5 million, an increase of approximately$300,000 from the 1.2 million the HRA paid in 1995 to acquire the condemned property. The HRA is appealing the award and their attorney has indicated that the final award will more than likely be close to the 1.5 million. 23. 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, 1996, there were twenty three series of Industrial Revenue Bonds issued. The aggregate principal amount payable for the only series issued after July 1, 1995 was $2,575,000. 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. 65 GENERAL FUND The General Fund was established to account for the revenues and expenditures necessary to carry out basic governmental activities of the City, such as general government, public safety, and public works. Revenues are recognized by source, such as property taxes, licenses and permits, fines and forfeits, charges for services and state-shared taxes. General Fund expenditures are made primarily for current day to day operations and are recorded by functional classifications and by operating departments. This fund accounts for all financial transactions not accounted for in another fund. • Exhibit B-1 CITY OF FRIDLEY. MINNESOTA GENERAL FUND COMPARATIVE BALANCE SHEET December 31, 1996 and 1995 Totals Asses 1996 1995 Cash and investments $6,936,716 $7,608,746 - Receivables: Accounts 76,926 26,867 Taxes: Unremitted 43,575 45,935 Delinquent 67,600 79,570 Special assessments: Unremitted 138 Delinquent 98 3,644 Deferred 7,199 1,026 Interest 291,893 209,405 Loans 6,300 6,300 Developer note 116,460 136,393 Due from other funds 84,821 Due from other governments 38,265 52,799 Inventories, at cost 24,904 25,147 Prepaid items 11,539 Total assets $7,694,895 $8,207,371 Liabilities and Fund Balance Liabilities: Accounts payable $250,358 $241,840 Deposits payable 18,988 16,088 Salaries payable 223,716 170,881 Deferred revenue 74,898 84,295 Due to other funds 886,818 Due to other governments 2,448 9,011 Total liabilities 570,408 1,408,933 Fund balance: Reserved for encumbrances 21,197 52,669 Reserved for inventory 24,904 25,147 Reserved for prepaid items 11,539 ,... Reserved for long-term receivables 122,760 142,693 Unreserved: Designated for working capital 3,954,657 3,938,021 Designated for contingencies 1,002,971 979,048 Designated for subsequent year's expenditures 491,084 395,367 Designated for fixed asset replacement 1,301,800 1,122,648 _ Undesignated 205,114 131,306 Total fund balance 7,124,487 6,798,438 Total liabilities and fund balance $7,694,895 $8,207,371 67 Exhibit B-2 CITY OF FRIDLEY. MINNESOTA - GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL _ Year Ended December 31, 1996 With comparative actual amounts for year ended December 31, 1995 1996 Variance Favorable 1995 Budget Actual (Unfavorable) Actual Revenues: Taxes $3,778,985 $3,803,136 $24,151 $3,650,088 - Special assessments 2,530 2,575 45 959 Licenses and permits 534,949 722,122 187,173 458,180 Intergovernmental revenue 3,129,579 3,222,589 93,010 3,176,728 . Charges for services 1,014,688 1,154,140 139,452 868,368 Fines and forfeits 203,573 176,060 (27,513) 183,165 Interest on investments 425,000 286,724 (138,276) 435,917 - Miscellaneous 146,357 228,241 81,884 168,713 Total revenues 9,235,661 9,595,587 359,926 8,942,118 Expenditures: Current: General government 1,780,519 1,661,024 119,495 1,668,392 - Public safety 3,871,162 3,850,597 20,565 3,821,230 Municipal center 196,593 185,917 10,676 195,949 Public works 2,179,969 2,140,438 39,531 2,186,984 - Community development 541,802 535,496 6,306 530,230 Recreation and naturalist 798,658 759,457 39,201 850,329 Reserve for contingency 98,136 98,136 - Capital outlay 358,810 331,880 26,930 379,652 Debt service 14,572 14,572 14,572 Total expenditures 9,840,221 9,479,381 360,840 9,647,338 Excess (deficiency)of revenues over expenditures (604,560) 116,206 720,766 (705,220) Other financing sources(uses): Operating transfers in 209,843 209,843 391-,526 Total other financing sources (uses) 209,843 209,843 391,526 Excess (deficiency) in of revenues and other financing sources over expenditures and other - financing uses (394,717) 326,049 720,766 (313,694) Fund balance-January 1 6,798,438 6,798,438 7,112,132 - Fund balance- December 31 $6,403,721 $7,124,487 $720,766 $6,798,438 68 Exhibit B-3 Continued CITY OF FRIDLEY. MINNESOTA GENERAL FUND SCHEDULE OF REVENUES AND OTHER FINANCING SOURCES-BUDGET AND ACTUAL - Year Ended December 31.1996 With comparative actual amounts for year ended December 31, 1995 1996 - Variance Favorable 1995 Budget Actual (Unfavorable) Actual Taxes and special assessments: Current ad valorem taxes 3703641 3752724 $49,083 $3,532,811 Delinquent ad valorem taxes 40,000 21,550 (18,450) 72,497 Penalties and interest $32,706 $27,585 (5,121) 13,288 Forfeited sale-taxes 2,638 1,277 (1,361) 31,492 Special assessments 2,530 2,575 45 959 Total taxes and special assessments 3,781,515 3,805,711 24,196 3,651,047 Licenses and permits: Licenses: - Contractor 14,145 11,980 (2,165) 10,745 Business 67,640 75,480 7,840 62,269 All other 70,337 156,946 86,609 60,796 - Permits 382,827 477,716 94,889 324,370 Total licenses and permits 534,949 722,122 187,173 458,180 - Intergovernmental revenue: Civil defense 4,116 8,036 3,920 7,898 State maintenance aid 200,000 194,598 (5,402) 187,353 - State credits 1,024,834 1,033,435 8,601 1,076,582 Local government aid 1,625,082 1,625,082 - 1,577,235 Other state grants 22,118 22,281 163 44,861 - Police and fire pension 246,015 331,185 85,170 277,211 Other 7,414 7,972 558 5,588 Total intergovernmental revenue 3,129,579 3,222,589 93,010 3,176,728 Charges for services: General government 769,802 873,982 104,180 598,116 - Public safety 68,580 105,649 37,069 84,752 Conservation of health 4,658 (668) (5,326) 3,334 Recreation 171,648 175,177 3,529 182,166 - Total charges for services 1,014,688 1,154,140 139,452 868,368 Fines and forfeits 203,573 176,060 (27,513) 183,165 Interest on investments 425,000 286,724 (138,276) 435,917 69 Exhibit B-3 Continued _ CITY OF FRIDLEY, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES AND OTHER FINANCING SOURCES -BUDGET AND ACTUAL _ Year Ended December 31. 1996 With comparative actual amounts for year ended December 31, 1995 1996 Variance - Favorable 1995 Budget Actual (Unfavorable) Actual Miscellaneous revenue: Rent income $4,759 $2,390 ($2,369) $2,962 Sale of property 14,456 32,155 17,699 13,333 Donations 48,690 52,501 3,811 31,026 Miscellaneous 78,452 141,195 62,743 121,392 - Total miscellaneous revenue 146,357 228,241 81,884 168,713 Total revenues 9,235,661 9,595,587 359,926 8,942,118 Other financing sources: Operating transfers in: - Employee Benefit Fund 50,000 Liquor Fund 75,000 75,000 75,000 Special Assessment Debt Service Fund 134,843 134,843 266,526 Total other financing sources (uses) 209,843 209,843 391,526 Total revenues and other financing sources $9,445,504 $9,805,430 $359,926 $9,333,644 70 - Exhibit B-4 Continued CITY OF FRIDLEY.MINNESOTA GENERAL FUND SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES-BUDGET AND ACTUAL Year Ended December 31.1996 With comparative actual amounts for year ended December 31, 1995 - 1996 - Variance Favorable 1995 Budget Actual (Unfavorable) Actual - General government Mayor and council: Personal services $52,633 $50,723 $1,910 $50,860 Supplies and other charges 44,114 35,109 9,005 34,439 - Total mayor and council 96,747 85,832 10,915 85,299 Planning commission: - Supplies and other charges 3,518 593 2,925 606 Other commissions: Supplies and other charges 6,961 3,238 3,723 3,741 - City manager. Personal services 227,547 224,717 2,830 255,152 - Supplies and other charges 47,602 43,398 4,204 51,818 Total City manager 275,149 268,115 7,034 306,970 _ Personnel: Personal services 73,367 73,367 77,255 Supplies and other charges 17,551 17,551 11,473 Total personnel 90,918 90,918 88,728 Legal: Supplies and other charges 252,700 230,527 22,173 223,418 Elections: Personal services 26,468 26,468 5,294 Supplies and other charges 3,184 3,184 884 Total elections 29,652 29,652 6,178 Accounting: - Personal services 454,818 451,846 2,972 446,358 Supplies and other charges 81,644 71,229 10,415 72,974 Total accounting 536,462 523,075 13,387 519,332 Assessing: Personal services 109,201 109,201 120,206 Supplies and other charges 8,109 8,109 6,912 - Total assessing 117,310 117,310 127,118 MIS: -- Personal services 98,022 83,562 14,460 95,568 Supplies and other charges 61,118 56,067 5,051 59,092 Total MIS 159,140 139,629 19,511 154,660 - City clerk/records: Personal services 99,101 92,115 6,986 89,355 Supplies and other charges 7,922 7,769 153 7,222 Total City clerk/records 107,023 99,884 7,139 96,577 • 71 Exhibit B-4 Continued CITY OF FRIDLEY.MINNESOTA GENERAL FUND - SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES-BUDGET AND ACTUAL Year Ended December 31.1996 With comparative actual amounts for year ended December 31,1995 1996 Variance -, Favorable 1995 Budget Actual (Unfavorable) Actual Nondepartmental: - Personal services $35,666 $35,666 $ $4,967 Supplies and other charges 69,273 36,585 32,688 50,798 Total nondepartmental 104,939 72,251 32,688 55,765 Total general government 1,780,519 1,661,024 119,495 1,668,392 Public safety: - Police: Personal services 2,755,699 2,738,597 17,102 2,732,931 Supplies and other charges 322,044 322,044 303,875 Total police 3,077,743 3,060,641 17,102 3,036,806 Fire: Personal services 577,677 577,677 581,183 - Supplies and other charges 105,891 102,732 3,159 107,388 Total fire 683,568 680,409 3,159 688,571 Rental inspections: Personal services 89,025 89,025 78,110 Supplies and other charges 10,976 10,976 8,561 _ Total rental inspections 100,001 100,001 86,671 Civil defense: Supplies and other charges 9,850 9,546 304 9,182 - Total public safety 3,871,162 3,850,597 20,565 3,821,230 - Municipal center Personal services 28,314 24,549 3,765 23,408 Supplies and other charges 168,279 161,368 6,911 172,541 - Total municipal center 196,593 185,917 10,676 195,949 Public works: - Engineering: Personal services 381,138 350,467 30,671 419,472 Supplies and other charges 54,479 45,619 8,860 53,332 - Total engineering 435,617 396,086 39,531 472,804 Public works and parks Personal services 1,031,792 1,031,792 1,015,125 Supplies and other charges 712,560 712,560 699,055 Total publicworks and parks 1,744,352 1,744,352 1,714,180 Total public works 2,179,969 2,140,438 39,531 2,186,984 72 "' Exhibit B-4 Continued CITY OF FRIDLEY.MINNESOTA .-. GENERAL FUND SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES-BUDGET AND ACTUAL Year Ended December 31.1996 With comparative actual amounts for year ended December 31, 1995 1996 Variance Favorable 1995 Budget Actual (Unfavorable) Actual ... Community development: Building inspection: Personal services $138,589 $138,589 $ $87,318 Supplies and other charges 63,818 57,512 6,306 115,134 Total building inspection 202,407 196,101 6,306 202,452 Planning: _ Personal services 282,723 282,723 254,598 Supplies and other charges 56,672 56,672 73,180 Total planning 339,395 339,395 327,778 - Total community development 541,802 535,496 6,306 530,230 Recreation and naturalist: Recreation: Personal services 395,054 381,303 13,751 436,401 Supplies and other charges 192,375 174,305 18,070 160,425 .,, Total recreation 587,429 555,608 31,821 596,826 Naturalist: Personal services 147,888 147,888 184,896 - Supplies and other charges 63,341 55,961 7,380 68,607 Total naturalist 211,229 203,849 7,380 253,503 -. Total recreation and naturalist 798,658 759,457 39,201 850,329 Reserve for contingency 98,136 98,136 - Capital outlay expenditures: City manager 603 Personnel - Accounting 1,126 MIS 2,500 City clerk/records 2,500 2,407 93 - - Police 103,900 103,900 77,361 Fire 18,366 18,366 11,946 Rental inspections 1,171 1,171 Municipal center 1,672 1,672 10,052 - Building inspection 15,651 15,651 Planning Engineering 1,921 1,921 21,268 - Public works 207,489 186,053 21,436 240,416 Naturalist 8,802 Recreation 6,140 739 5,401 5,578 ,_ Total capital outlay 358,810 331,880 26,930 379,652 73 Exhibit B-4 — Continued CITY OF FRIDLEY.MINNESOTA GENERAL FUND — SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES-BUDGET AND ACTUAL. Year Ended December 31.1996 With comparative actual amounts for year ended December 31,1995 1996 Variance Favorable 1995 Budget Actual (Unfavorable) Actual Debt service: Principal $12,816 $12,816 $ $12,816 Interest 1,756 1,756 _ 1,756 Total debt service 14,572 14,572 14,572 Total expenditures $9,840,221 $9,479,381 $360,840 $9,647,338 74 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. Grant Management Fund This 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 be spent on specific activities outlined in the grant. 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. 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 equally between the investigating agency and the prosecuting agency. 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. Housing Revitalization Fund This fund receives revenues to administer the City Council's priority of improving housing rehabilitation programs to revitalize aging neighborhoods in the community. Chemical Assessment Team Fund This fund receives grant revenues and accounts for expenditures related to training and coordinating a multi-city chemical assessment team. 1 CITY OF FRIDLEY. MINNESOTA — SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET December 31. 1996 — With comparative totals for December 31, 1995 Solid Waste Cable Grant Abatement Assets TV Management Fund Cash and investments $153,947 $ $4,539 — Receivables: Accounts 34,296 14,458 Due from other funds Due from other governments 77,044 42,586 — Total assets $188,243 $77,044 $61,583 Liabilities and Fund Balance Liabilities: Accounts payable $11,019 $9,813 $32,069 — Deposits payable 10,228 Salaries payable 765 2,228 198 Deferred revenue 7,279 — Due to other funds 40,857 Due to other governments Total liabilities 29,291 52,898 32,267 Fund balance: Reserved: Reserved for encumbrances Reserved for long-term receivables Unreserved: — Designated for subsequent years expenditures 25,736 52,640 Designated for special revenue programs 133,216 24,146 Undesignated (23,324) Total fund balance 158,952 24,146 29,316 Total liabilities and fund balance $188,243 $77,044 $61,583 r- 76 Exhibit C-1 Drug & Gambling Chemical HRA Forfeiture Housing Assessment Totals - Reimbursement Fund Revitalization Team 1996 1995 $ $9,918 $ $ $168,404 $171,083 48,754 46,139 - 388 - 731 120,361 149,970 $731 $9,918 $0 $0 $337,519 $367,580 $64 $ $344 $681 $53,990 $47,725 10,228 10,296 3,191 2,337 7,279 7,279 155 42,035 1,774 84,821 89,010 215 215 -- 219 42,379 2,670 159,724 156,647 7,289 78,376 37,579 512 9,918 167,792 166,065 - (42,379) (2,670) (68,373) 512 9,918 (42,379) (2,670) 177,795 210,933 -. $731 $9,918 $0 ($0) $337,519 $367,580 77 CITY OF FRIDLEY. MINNESOTA — SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES Year Ended December 31. 1996 With comparative totals for year ended December 31, 1995 Solid Waste Cable Grant Abatement TV Management Fund -- Revenues: Licenses and permits $106,530 $ $ Intergovernmental revenue 166,215 78,286 Charges for services 145,355 Fines and forfeits Interest on investements 8,101 Miscellaneous 107 Total revenues 114,631 166,215 223,748 Expenditures: Current: General government 95,089 139,357 232,548 Public safety Capital outlay 6,380 8,771 11,050 Total expenditures 101,469 148,128 243,598 — Excess (deficiency)of revenues over expenditures 13,162 18,087 (19,850) Other financing sources (uses): Operating transfers in Total other financing sources (uses) — Excess(deficiency)of revenues and other financing sources over expenditures and other financing uses 13,162 18,087 (19,850) — Fund balance-January 1 145,790 6,059 49,166 Fund balance-December 31 $158,952 $24,146 $29,316 78 Exhibit C-2 Drug & Gambling Chemical HRA Forfeiture Housing Assessment Totals - Reimbursement Fund Revitalization Team 1996 1995 $ $ $ $ $106,530 $96,002 17,249 $10,370 272,120 347,545 145,355 146,680 277 - 8,101 7,797 107 2,465 17,249 10,370 532,213 600,766 - 16,737 388 484,119 780,989 12,508 12,508 - 41,991 532 68,724 17,038 - 16,737 42,379 13,040 565,351 798,027 512 (42,379) (2,670) (33,138) (197,261) 191,629 - 191,629 512 (42,379) (2,670) (33,138) (5,632) 9,918 210,933 216,565 - $512 $9,918 ($42,379) ($2,670) $177,795 $210,933 79 Exhibit C-3 CITY OF FRIDLEY. MINNESOTA _ CABLE TV SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1996 and 1995 Asses 1996 1995 Cash and investments $153,947 $10,296 Investments 139,164 Accounts receivable 34,296 32,172 Total assets $188,243 $181,632 Liabilities and Fund Balance — Liabilities: Accounts payable $11,019 $17,916 Deposits payable 10,228 10,296 Salaries payable 765 351 Deferred revenue 7,279 7,279 Total liabilities 29,291 35,842 — Fund balance: Reserved for encumbrances 6,889 Unreserved: — Designated for subsequent year's expenditures 25,736 21,766 Designed for cable TV program 133,216 117,135 Total fund balance 158,952 145,790 Total liabilities and fund balance $188,243 $181,632 80 Exhibit C-4 CITY OF FRIDLEY. MINNESOTA CABLE TV SPECIAL REVENUE FUND STATEMENT OF REVENUES. EXPENDITURES.AND _ CHANGES IN FUND BALANCE -BUDGET AND ACTUAL Year Ended December 31. 1996 With comparative amounts for year ended December 31, 1995 1996 Variance Favorable 1995 Budget Actual (Unfavorable) Actual Revenues: - Licenses-franchise fee $96,125 $106,530 $10,405 $96,002 Interest on investments 5,264 8,101 2,837 7,797 Total revenues 101,389 114,631 13,242 103,799 Expenditures: Current: General government: Personal services 46,541 41,468 5,073 39,215 Supplies and other charges 58,259 53,621 4,638 56,208 - Capital outlay 12,300 6,380 5,920 12,272 Total expenditures 117,100 101,469 15,631 107,695 - Excess (deficiency)of revenues over expenditures (15,711) 13,162 28,873 (3,896) Fund balance-January 1 145,790 145,790 149,686 Fund balance-December 31 $130,079 $158,952 $28,873 $145,790 F 81 Exhibit C-5 CITY OF FRIDLEY. MINNESOTA GRANT MANAGEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1996 and 1995 — Assets 1996 1995 Accounts receivable $ $589 Due from other governments 77,044 98,011 Total assets $77,044 $98,600 Liabilities and Fund Balance Liabilities: Accounts payable $9,813 $2,694 Deposits payable Salaries payable 2,228 1,225 Due to other funds 40,857 88,622 Total liabilities 52,898 92,541 — Fund balance: Reserved: Reserved for encumbrances 400 Unreserved: —' Designated for subsequent year's expenditures 24,146 5,659 Total fund balance 24,146 6,059 Total liabilities and fund balance $77,044 $98,600 82 Exhibit C-6 CITY OF FRIDLEY. MINNESOTA GRANT MANAGEMENT SPECIAL REVENUE FUND STATEMENT OF REVENUES. EXPENDITURES,AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL Year Ended December 31. 1996 With comparative amounts for year ended December 31, 1995 1996 Variance Favorable 1995 Budget Actual (Unfavorable) Actual Revenues: Intergovernmental revenue: Federal $205,507 $163,722 ($41,785) $247,585 State 3,167 2,493 (674) 2,039 -' Other 1,200 Donations 24 Total revenues 208,674 166,215 (42,459) 250,848 Expenditures: Current: General government: Personal services 110,485 110,485 51,299 Supplies and other charges 89,418 28,872 60,546 196,926 Capital outlay 8,771 8,771 4,024 Total expenditures 208,674 148,128 60,546 252,249 - Excess (deficiency)of revenues over expenditures 18,087 18,087 (1,401) Fund balance-January 1 6,059 6,059 7,460 Fund balance-December 31 $6,059 $24,146 $18,087 $6,059 83 Exhibit C-7 CITY OF FRIDLEY. MINNESOTA SOLID WASTE ABATEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1996 and 1995 — Assets 1996 1995 Cash and investments $4,539 $11,705 Accounts receivable 14,458 13,378 _ Due from other governments 42,586 51,959 Total assets $61,583 $77,042 — Liabilities and Fund Balance — Liabilities: Accounts payable $32,069 $27,115 Salaries payable 198 761 Total liabilities 32,267 27,876 Fund balance: Unreserved: — Designated for subsequent year's expenditures 52,640 10,154 Designated for solid waste abatement 39,012 Undesignated (23,324) — Total fund balance 29,316 49,166 Total liabilities and fund balance $61,583 $77,042 84 Exhibit C-8 _ CITY OF FRIDLEY. MINNESOTA SOLID WASTE ABATEMENT SPECIAL REVENUE FUND STATEMENT OF REVENUES. EXPENDITURES.AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL Year Ended December 31. 1996 With comparative amounts for year ended December 31, 1995 1996 _ Variance Favorable 1995 Budget Actual (Unfavorable) Actual Revenues: - Intergovernmental revenue: State $80,455 $78,286 ($2,169) $82,980 Charges for services 147,574 145,355 (2,219) 146,680 - Donations 1,275 Miscellaneous revenue 107 107 1,166 Total revenues 228,029 223,748 (4,281) 232,101 Expenditures: Current: General government: Personal services 32,610 29,367 3,243 43,243 Supplies and other charges 194,523 203,181 (8,658) 376,949 Capital outlay 11,050 11,050 Total expenditures 238,183 243,598 (5,414) 420,192 - Excess (deficiency)of revenues over expenditures (10,154) (19,850) (9,696) (188,091) Other financing sources(uses): - Operating transfers in: Special Assessment Debt Service Fund 188,221 Total other financing sources(uses) 188,221 Excess(deficiency)of revenues and other financing sources over expenditures (10,154) (19,850) (9,696) 130 Fund balance-January 1 49,166 49,166 49,036 - Fund balance-December 31 $39,012 $29,316 ($9,696) $49,166 85 Exhibit C-9 CITY OF FRIDLEY. MINNESOTA — HRA REIMBURSEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31. 1996 and 1995 _, Asses 1996 1995 Due from other funds $731 $388 — Total assets $731 $388 Liabilities and Fund Balance Liabilities: Accounts payable $64 $ Due to other funds 155 388 Total liabilities 219 388 — Fund balance: Unreserved-designated HRA reimbursement 512 Total liabilities and fund balance $731 $388 86 Exhibit C-10 — CITY OF FRIDLEY. MINNESOTA HRA REIMBURSEMENT SPECIAL REVENUE FUND STATEMENT OF REVENUES. EXPENDITURES.AND — CHANGES IN FUND BALANCE -BUDGET AND ACTUAL Year Ended December 31.1996 With comparative amounts for year ended December 31, 1995 1996 Variance — Favorable 1995 Budget Actual (Unfavorable) Actual Revenues: Intergovernmental revenue: Housing Redevelopment Authority $17,249 $17,249 $ $13,741 Total revenues 17,249 17,249 13,741 Expenditures: Current: — General government: Personal services 132 132 Supplies and other charges 16,605 16,605 13,741 — Total expenditures 16,737 16,737 13,741 Excess (deficiency)of revenues over expenditures 512 512 Fund balance-January 1 — Fund balance-December 31 $512 $512 $ 0 $ 0 87 Exhibit C-11 CITY OF FRIDLEY. MINNESOTA _ DRUG AND GAMBLING FORFEITURE SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1996 and 1995 — Assets 1996 1995 _ Cash and investments $9,918 $9,918 Total assets $9,918 $9,918 Liabilities and Fund Balance Liabilities $ $ Fund balance: Unreserved -designated for drug and gambling enforcement 9,918 9,918 Total liabilities and fund balance $9,918 $9,918 88 Exhibit C-12 CITY OF FRIDLEY. MINNESOTA — DRUG AND GAMBLING FORFEITURE SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES.AND — CHANGES IN FUND BALANCE -BUDGET AND ACTUAL Year Ended December 31, 1996 With comparative amounts for year ended December 31, 1995 1996 Variance — Favorable 1995 Budget Actual (Unfavorable) Actual Revenues: Fines and forfeits $ $ $ $277 Total revenues 277 -'- Expenditures: Current: Public safety: — Supplies and other charges Capital outlay 742 Total expenditures 742 Excess (deficiency)of revenues over expenditures (465) — Fund balance-January 1 9,918 10,383 Fund balance-December 31 $0 $9,918 $0 $9,918 89 Exhibit C-13 CITY OF FRIDLEY. MINNESOTA — HOUSING REVITALIZATION FUND COMPARATIVE BALANCE SHEET December 31, 1996 and 1995 Assets 1996 1995 Total assets $0 $0 — Liabilities and Fund Balance Liabilities: Accounts payable $344 $0 — Due to other funds 42,035 Total liabilities 42,379 Fund balance: Unreserved-undesignated (42,379) Total fund balance (42,379) "' Total liabilities and fund balance $0 $0 90 Exhibit C-14 _ CITY OF FRIDLEY. MINNESOTA HOUSING REVITALIZATION SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES.AND _ CHANGES IN FUND BALANCE -BUDGET AND ACTUAL Year Ended December 31. 1996 With comparative amounts for year ended December 31, 1995 1996 Variance Favorable 1995 Budget Actual (Unfavorable) Actual Expenditures: — Current: General government: Supplies and other charges $ 388 $388 $ $3,408 Capital outlay 249,612 41,991 207,621 Total expenditures 250,000 42,379 207,621 3,408 — Excess (deficiency)of revenues over expenditures 250,000 (42,379) 207,621 3,408 Other financing sources(uses) Operating transfer in- Special Assessment Debt Service Fund 250,000 250,000 3,408 — Excess (deficiency)of revenues and other financing sources over expenditures (42,379) (42,379) — Fund balance-January 1 Fund balance- December 31 $0 ($42,379) ($42,379) $D 91 Exhibit C-15 CITY OF FRIDLEY. MINNESOTA CHEMICAL ASSESSMENT TEAM SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1996 and 1995 Assets 1996 1995 Total assets $0 $0 — Liabilities and Fund Balance Liabilities: — Accounts payable $681 $ Due to other funds 1,774 Due to other governments 215 — Total liabilities 2,670 Fund balance: Unreserved-undesignated (2,670) —' Total fund balance (2,670) Total liabilities and fund balance $0 $0 '^ 92 Exhibit C-16 CITY OF FRIDLEY. MINNESOTA CHEMICAL ASSESSMENT TEAM SPECIAL REVENUE FUND STATEMENT OF REVENUES. EXPENDITURES.AND _ CHANGES IN FUND BALANCE -BUDGET AND ACTUAL Year Ended December 31.1996 With comparative amounts for year ended December 31, 1995 1996 Variance Favorable 1995 Budget Actual (Unfavorable) Actual Revenues: Intergovernmental revenue State $10,370 $10,370 $ $ Total revenues 10,370 10,370 Expenditures: Current: Public safety: Personal services 2,623 2,623 Supplies and other charges 9,885 9,885 Capital outlay 532 532 Total expenditures 13,040 13,040 — Excess (deficiency)of revenues over expenditures (2,670) (2,670) Fund balance-January 1 Fund balance-December 31 ($2,670) ($2,670) $0 $0 93 DEBT SERVICE FUNDS Debt Service Funds are used to finance and account for the payment of principal and interest on all general obligation debt excluding those accounted for in the proprietary funds. Special Assessment Fund This 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. Tax Increment Fund This fund services the debt of the tax increment bonds. Tax increment money is used to service the debt on redevelopment related bonds. Exhibit D-1 CITY OF FRIDLEY. MINNESOTA DEBT SERVICE FUND COMBINING BALANCE SHEET _ December 31. 1996 With comparative totals for December 31, 1995 Special Tax Totals —' Asses Assessment Increment 1996 1995 Cash and investments $10,504,602 $ $10,504,602 9,772,051 Receivables: Special assessments: Unremitted 6,030 6,030 7,056 Delinquents 79,766 79,766 126,799 Deferred 1,828,192 1,828,192 1,889,066 Due from HRA 125 125 19,847 Total assets $12,418,590 $125 $12,418,715 $11,814,819 Liabilities and Fund Balance. Liabilities: Accounts payable $5,300 $125 $5,425 $1,944 Deferred revenue 1,907,958 1,907,958 2,015,865 Due to other governments 2,078 Total liabilities 1,913,258 125 1,913,383 2,019,887 Fund balance: Reserved for debt service 623,517 623,517 463,877 Unreserved-undesignated 9,881,815 9,881,815 9,331,055 Total fund balance 10,505,332 10,505,332 9,794,932 Total liabilities and fund balance $12,418,590 $125 $12,418,715 $11,814,819 95 Exhibit D-2 CITY OF FRIDLEY. MINNESOTA — DEBT SERVICE FUND COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES Year Ended December 31. 1996 With comparative totals for year ended December 31, 1995 Special Tax Totals — Assessment Increment 1996 1995 Revenues: Special assessments $531,273 $ $531,273 $405,203 Interest on investments 585,054 585,054 473,755 Total revenues 1,116,327 1,116,327 878,958 Expenditures: — Debt service: Principal retirement 175,000 175,000 4,200,000 Interest and fiscal charges 79,066 816,945 896,011 891,780 Bond issuance costs 993 993 32,222 Total expenditures 255,059 816,945 1,072,004 5,124,002 Excess (deficiency)of revenues over expenditures 861,268 (816,945) 44,323 (4,245,044) Other financing sources (uses): — Bond proceeds 3,555 3,555 4,074,311 Operating transfers in (out): General Fund (134,843) (134,843) (266,526) Housing Revitalization Special Revenue Fund (3,408) Solid Waste Abatement Fund (188,221) Capital Improvements Fund (35,000) — Special Assessments Capital Project Fund 183,464 HRA Component Unit 797,365 797,365 649,130 Total other financing sources (uses) (131,288) 797,365 666,077 4,413,750 — Excess(deficiency)of revenues and other financing sources over expenditures and other financing uses 729,980 (19,580) 710,400 168,706 — Fund balance-January 1 9,775,352 19,580 9,794,932 9,626,226 Fund balance-December 31 $10,505,332 $0 $10,505,332 $9,794,932 96 CAPITAL PROJECT 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. Capital Projects Funds provide a formal mechanism, which enables administrators to ensure that revenues designated for specific purposes are properly used. Capital Improvement Fund This 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. Special Assessment Fund This 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 for primarily by the benefited property owner. Exhibit E-1 CITY OF FRIDLEY. MINNESOTA CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET December 31. 1996 With comparative totals for December 31, 1995 Capital Special Totals - Assets Improvements Assessments 1996 1995 Cash and investments $7,658,070 $381,413 $8,039,483 $8,594,314 - Receivables: Accounts receivable Taxes: - Unremitted 823 823 848 Delinquent 4,033 4,033 4,253 - Specials: Delinquent 44,263 Deferred 11,089 62,156 73,245 12,320 Mortgage: Deferred Due from other funds 892,091 892,091 Due from other governments 20,000 20,000 20,000 - Total assets $8,586,106 $443,569 $9,029,675 $8,675,998 Liabilities and Fund Balance Liabilities: Accounts payable $100,911 $37,783 $138,694 $903 - Deposits payable 1,000 1,000 Contracts payable 104,989 104,989 40,217 Deferred revenue 15,121 62,157 77,278 60,836 - Due to other funds 892,091 892,091 699,878 Due to other governments 5,841 59,867 65,708 37,483 Total liabilities 121,873 1,157,887 1,279,760 839,317 Fund balance: Reserved for encumbrances 1,182,367 1,182,367 1,324,272 - Reserved for construction Reserved for long-term receivables - Unreserved: - Designated for fixed asset replacement 1,696,045 1,696,045 1,701,913 Designated for park improvements 681,997 681,997 743,026 - Designated for street improvements 4,903,824 4,903,824 4,715,711 Undesignated (714,318) (714,318) (648,241) Total fund balance 8,464,233 (714,318) 7,749,915 • 7,836,681 - Total liabilities and fund balance $8,586,106 $443,569 $9,029,675 $8,675,998 98 Exhibit E-2 Continued CITY OF FRIDLEY. MINNESOTA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES Year Ended December 31.1996 With comparative totals for year ended December 31, 1995 Capital Special Totals Improvements Assessments 1996 1995 Revenues: - Taxes: Current ad valorem taxes $71,339 $ $71,339 $71,475 Delinquent ad valorem taxes 438 438 1,456 - Special assessments 2,110 9,341 11,451 13,269 Total taxes 73,887 9,341 83,228 86,200 - Intergovernmental revenue: State credits 15,000 15,000 15,000 State aid for construction 411,160 411,160 120,909 -" Other 66,118 66,118 343,410 Total intergovernmental revenue 492,278 492,278 479,319 -- Interest on investments 481,713 11,314 493,027 448,451 Miscellaneous revenue: -- Rental income Donations 21,500 21,500 74,198 Other 40,978 40,978 99 Total miscellaneous revenue 62,478 62,478 74,297 Total revenues 1,110,356 20,655 1,131,011 1,088,267 99 Exhibit E-2 Continued _ CITY OF FRIDLEY. MINNESOTA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES Year Ended December 31. 1996 With comparative totals for year ended December 31, 1995 — Capital Special Totals Improvements Assessments 1996 1995 Expenditures: Current: Public works $41,933 $123,717 $165,650 $188,488 Debt service: — Loan principal 4,183 4,183 3,926 Interest 8,117 8,117 8,375 Bond issuance costs 3,134 3,134 Capital outlay 378,267 1,300,868 1,679,135 751,542 Total expenditures 420,200 1,440,019 1,860,219 952,331 — Excess (deficiency)of revenues over expenditures 690,156 (1,419,364) (729,208) 135,936 Other financing sources (uses): "' Bond proceeds 320,050 320,050 Operating transfers in (out): Storm Sewer Fund 322,392 322,392 — Special Assessement Debt Service Fund (148,464) Capital Improvement Fund 710,845 710,845 108,094 Special Assessments Capital Projects Fund (710,845) (710,845) (108,094) — Total other financing sources (uses) (710,845) 1,353,287 642,442 (148,464) Excess (deficiency)of revenues and other financing sources over expenditures and other financing uses (20,689) (66,077) (86,766) (12,528) — Fund balance-January 1 8,484,922 (648,241) 7,836,681 7,849,209- Fund balance (deficit)- December 31 $8,464,233 ($714,318) $7,749,915 $7,836,681 100 Exhibit E-3 CITY OF FRIDLEY. MINNESOTA _ CAPITAL IMPROVEMENTS CAPITAL PROJECT FUND COMPARATIVE BALANCE SHEET December 31, 1996 and 1995 Totals Assets 1996 1995 —" Cash and investments $7,658,070 $8,503,891 Receivables: —' Taxes: Unremitted 823 848 Delinquent 4,033 4,253 — Special assessments: Deferred 11,089 12,320 Due from other funds 892,091 — Due from other governments 20,000 20,000 Total assets $8,586,106 $8,541,312 Liabilities and Fund Balance Liabilities: Accounts payable $100,911 $47 Contracts payable 2,287 "' Deferred revenue 15,121 16,573 Due to other governments 5,841 37,483 Total liabilities 121,873 56,390 Fund balance: Reserved for encumbrances 1,182,367 1,324,272 Unreserved: Designated for fixed asset replacement 1,696,045 1,701,913 Designated for park improvements 681,997 743,026 Designated for street improvements 4,903,824 4,715,711 Total fund balance 8,464,233 8,484,922 Total liabilities and fund balance $8,586,106 $8,541,312 102 Exhibit E-4 CITY OF FRIDLEY. MINNESOTA CAPITAL IMPROVEMENTS CAPITAL PROJECT FUND STATEMENT OF REVENUES, EXPENDITURES,AND _ CHANGES IN FUND BALANCE -BUDGET AND ACTUAL Year Ended December 31, 1996 With comparative actual amounts for year ended December 31, 1995 1996 Variance Favorable 1995 Budget Actual (Unfavorable) Actual Revenues: Taxes: Current ad valorem taxes $70,550 $71,339 $789 $71,475 Delinquent ad valorem taxes 438 438 1,456 Total taxes 70,550 71,777 1,227 72,931 Special assessments 2,110 2,110 3,111 Intergovernmental revenue: State credits 15,000 15,000 15,000 State aid for construction 650,000 411,160 (238,840) 120,909 Other 66,118 66,118 40,000 Total intergovernmental revenue 665,000 492,278 (172,722) 175,909 Interest on investments 271,036 481,713 210,677 431,908 .... Miscellaneous revenue: Donations 21,500 21,500 74,198 Other 10,000 40,978 30,978 99 Total miscellaneous revenue 31,500 62,478 30,978 74,297 Total revenues 1,038,086 1,110,356 72,270 758,156 Expenditures: Current: Public works 392,862 41,933 350,929 95,425 Capital outlay 1,111,593 378,267 733,326 492,963 Total expenditures 1,504,455 420,200 1,084,255 588,388 Excess (deficiency)of revenues over expenditures (466,369) 690,156 1,156,525 169,768 Other financing sources (uses): Operating transfers in (out): Special Assessment Capital Projects Fund (710,845) (710,845) (108,094) - Excess (deficiency)of revenues and other financing sources over expenditures and other financing uses (1,177,214) (20,689) 1,156,525 61,674 Fund balance-January 1, as restated 8,484,922 8,484,922 8,423,248 Fund balance-December 31 $7,307,708 $8,464,233 $1,156,525 $8,484,922 103 ENTERPRISE FUNDS Enterprise Funds are used to account for the operations of self-supporting governmental activities which render services or goods to the public. The accounting records are maintained on an accrual basis. The reporting for enterprise funds is similar to comparable private enterprises. Creditors, legislators or the general public can evaluate the performance of a municipal enterprise on the same basis as they can the performance of investor-owned enterprises. Liquor Fund This fund accounts for the operation of two off-sale liquor establishments. Public Utilities Fund This fund accounts for the operations of the City-owned sewer and water systems. Exhibit F-1 CITY OF FRIDLEY. MINNESOTA ENTERPRISE FUNDS COMBINING BALANCE SHEET December 31, 1996 - With comparative totals for December 31, 1995 .. Public Totals Assets Liquor Utilities 1996 1995 Current Assets: Cash and investments $1,337,923 $5,518,212 $6,856,135 $5,071,420 Investments Accounts receivable 1,530,910 1,530,910 1,407,490 _ Special assessments 191 191 130 Due from other funds 3,312 Due from other governments 24,005 24,005 53,895 Inventories, at cost 248,206 5,729 253,935 241,973 Prepaid items 11,126 268,075 279,201 277,840 - Total current assets 1,597,255 7,347,122 8,944,377 7,056,060 - Non-current Assets: Long-term receivable: Metropolitan Council Environmental Services 74,818 74,818 213,818 - Special assessments 226,234 226,234 27,907 Total noncurrent assets 301,052 301,052 241,725 Property and equipment, at cost: - Property and equipment 414,002 30,639,607 31,053,609 29,314,713 Less: accumulated depreciation (235,271) (10,085,809) (10,321,080) (9,575,192) Net property and equipment 178,731 20,553,798 20,732,529 19,739,521 Total assets $1,775,986 $28,201,972 $29,977,958 $27,037,306 Liabilities and Fund Eauity ..- Current liabilities: Accounts payable $156,800 $58,084 $214,884 $221,174 Deposits payable 1,556 1,556 1,556 _ Contracts payable 375,318 375,318 21,474 Salaries payable 6,171 14,637 20,808 14,009 Due to other governments 290,125 290,125 529,139 Accrued interest payable 76,029 76,029 58,506 - Bonds payable-current 120,000 120,000 115,000 Total current liabilities 162,971 935,749 1,098,720 960,858 - Long-term liabilities: Bonds payable $4,690,144 $4,690,144 $2,210,000 Total long-term liabilities 4,690,144 4,690,144 2,210,000 - Fund equity: Contributed capital 11,907,544 11,907,544 12,276,562 Retained earnings: - Reserved for capital outlay 2,547,493 2,547,493 3,500,340 Unreserved 1,613,015 8,121,042 9,734,057 8,089,546 Total fund equity 1,613,015 22,576,079 24,189,094 23,866,448 Total liabilities and fund equity $1,775,986 $28,201,972 $29,977,958 $27,037,306 105 Exhibit F-2 CITY OF FRIDLEY. MINNESOTA - ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Year Ended December 31, 1996 With comparative totals for year ended December 31, 1995 Public Totals Liquor Utilities 1996 1995 Sales and cost of sales: Sales $3,071,737 $3,071,737 $3.073.i Cost of sales 2,424,824 2,424,824 2,472.464 Gross profit 646,913 646,913 600.733 Operating revenues: Water sales and sewer rents 5,639,422 5,639,422 4,383.174 Other 151,865 151,865 93,726 Total operating revenues 5,791,287 5,791,287 4,476,900 Operating expenses: Personal services 284,482 956,171 1,240,653 1,098,556 Supplies and other charges: Disposal charges 3,112,047 3,112,047 3,162,003 Other 200,810 851,155 1,051,965 915,951 Depreciation 18,386 729,231 747,617 709,041 Total operating expenses 503,678 5,648,604 6,152,282 5,885,551 Operating income(loss) 143,235 142,683 285,918 (807,918) Non-operating revenues (expenses): _ Intergovernmental revenue 50,000 50,000 Interest on investments 66,599 180,787 247,386 231,603 Debt service (173,553) (173,553) (142,943) Special assessments 229,666 229,666 40,000 Loss on disposition of fixed assets (45,409) Other 295 295 68,690 _ Total non-operating revenues (expenses) 66,599 287,195 353,794 151,941 Net income (loss)before operating transfers 209,834 429,878 639,712 (655,977) Operating transfers in (out): General Fund (75,000) (322,392) (397,392) (75,000) Net income (loss)before extraordinary item 134,834 107,486 242,320 (730,977) Extraordinary gain on issuance of sewer availability charge credits 80,327 80,327 22,100 Net income(loss) 134,834 187,813 322,647 (708,877) - Credit arising from transfer of depreciation on contributed capital 369,017 369,017 369,017 Retained earnings-January 1 1,478,181 10,111,705 11,589,886 11,929,746 - Retained earnings-December 31 $1,613,015 $10,668,535 $12,281,550 $11,589,886 106 Exhibit F-3 CITY OF FRIDLEY, MINNESOTA ENTERPRISE FUNDS COMBINING STATEMENT OF CASH FLOWS _ Year Ended December 31. 1996 With comparative totals for year ended December 31, 1995 Public Totals Liquor Utilities 1996 1995 Cash flows from operating activities: Operating income $143,235 $142,683 $285,918 ($807,918) Adjustments to reconcile operating income(loss) to net cash flows from operating activities: Depreciation 18,386 729,231 747,617 709.0.1' Changes in assets and liabilities: Decrease(increase)in receivables 2,500 123,296 125,796 (330,417) Decrease(increase)in due from other funds 3,312 3,312 232,148 Decrease (increase)in inventories (9,702) (2,259) (11,961) 93,214 - Decrease(increase)in prepaid items (10,679) 9,318 (1,361) (19,877) Increase (decrease)in payables (51,954) 189,815 137,861 148,427 Intergovernmental revenue 50,000 50,000 Other non-operating revenue 295 295 68,690 Use of sewer availability charges 223,550 - Net cash flows from operating activities 91,786 1,245,691 1,337,477 316,858 Cash flows from non-capital financing activities: Operating transfers in (out) (75,000) (322,392) (397,392) (75,000) - Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (1,740,624) (1,740,624) (524,420) Proceeds from sale of revenue bond 2,595,143 2,595,143 Principal paid on revenue bonds (115,000) (115,000) (85,000) Interest and paying agent fees on revenue bonds (173,553) (173,553) (142,943) Special assessment collections 31,278 31,278 14,209 _ Net cash flows from capital and related financing activities 0 597,244 597,244 (738,154) Cash flows from investing activities: -i Purchase of investment securities Proceeds from sale of investment securities 456,903 Interest on investments 66,599 180,787 247,386 229,357 - Net cash flows from investing activities 66,599 180,787 247,386 686,260 Net increase(decrease)in cash and cash _ equivalents 83,385 1,701,330 1,784,715 189,964 Cash and cash equivalents-January 1 1,254,538 3,816,882 5,071,420 4,881,456 Cash and cash equivalents-December 31 $1,337,923 $5,518,212 $6,856,135 $5,071,420 Non-cash investing, capital and financing activities: Special assessments of$229,666 were levied to finance a portion of the 1996 Water, Sewer and Storm Water Revenue Bonds. 107 Exhibit F-4 CITY OF FRIDLEY. MINNESOTA — LIQUOR ENTERPRISE FUND COMPARATIVE BALANCE SHEET December 31, 1996 and 1995 Totals Assets 1996 1995 Current assets: Cash and investments $1,337,923 $1,254,538 — Investments Accounts receivable 2,500 Due from other funds — Inventories, at cost 248,206 238,503 Prepaid items 11,126 447 Total current assets 1,597,255 1,495,988 Property and equipment, at cost: Land 66,961 66,961 Buildings 130,211 130,211 Improvements other than building 32,163 32,163 Machinery and equipment 184,667 184,667 -- 414,002 414.002 Less: accumulated depreciation (235,271) (216,88b) Net property and equipment 178,731 197,117 — Total assets $1,775,986 $1,693,105 Liabilities and Fund Equity Current liabilities: — Accounts payable $156,800 $181,396 Salaries payable 6,171 4,900 Due to other governments 28,628 — Total current liabilities 162,971 214,924 Fund equity: Retained earnings-unreserved 1,613,015 1,478,181 Total liabilities and fund equity $1,775,986 $1,693,105 — 108 Exhibit F-5 _, CITY OF FRIDLEY. MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE STATEMENT OF REVENUES. EXPENSES AND CHANGES IN RETAINED EARNINGS Years ended December 31, 1996 and 1995 Totals 1996 1995 Sales and cost of sales: — Sales $3,071,737 $3,073,197 Cost of sales 2,424,824 2,472,464 Gross profit 646,913 600,733 Operating expenses: Selling: — Personal services 109,402 112,600 Supplies and other charges 53,707 60,142 Total selling expenses 163,109 172,742 Administration and overhead: Personal services 175,080 205,531 "- Supplies and other charges 147,103 192,760 Depreciation 18,386 30,966 Total administration and overhead 340,569 429,257 Total operating expenses 503,678 601,999 — Operating income(loss) 143,235 (1,266) Non-operating revenues: — Interest on investments 66,599 54,451 Loss on disposition of fixed assets (45,409) Other 6,310 — Total non-operating revenues 66,599 15,352 Net income(loss)before operating transfers 209,834 14,086 Operating transfers in (out): General Fund (75,000) (75,000) Net income (loss) 134,834 (60,914) Retained earnings-January 1 1,478,181 1,539,095 Retained earnings-December 31 $1,613,015 $1,478,181 109 Exhibit F-6 CITY OF FRIDLEY.MINNESOTA _ LIQUOR ENTERPRISE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31, 1996 and 1995 — Totals 1996 1995 Cash flows from operating activities: Operating income $143,235 ($1,266) _ Adjustments to reconcile operating income(loss)to net cash flows from operating activities: Depreciation 18,386 30,966 _ Changes in assets and liabilities: Decrease(increase)in receivables 2,500 (2,500) Decrease(increase)in due from other funds 235,460 Decrease(increase)in inventories (9,702) 90,690 '^ Decrease(increase)in prepaid items (10,679) (447) Increase(decrease)in payables (51,954) 2,005 Other non-operating revenue 6,310 — Net cash flows from operating activities 91,786 361,218 Cash flows from non-capital financing activities: Operating transfers in (out) (75,000) (75,000) Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (1,029) Cash flows from investing activities: Proceeds from sale of investment securities 456,903 Interest on investments 66,599 54,451 Net cash flows for investing activities 66,599 511,354 Net increase(decrease)in cash and cash equivalents 83,385 796,543 Cash and cash equivalents-January 1 1,254,538 457,995 Cash and cash equivalents-December 31 $1,337,923 $1,254,538 110 Exhibit F-7 _ CITY OF FRIDLEY. MINNESOTA PUBLIC UTILITY ENTERPRISE FUND COMPARATIVE BALANCE SHEET December 31, 1996 and 1995 Totals Assets 1996 1995 - Current assets: Cash and investments $5,518,212 $3,816,882 Receivables: _ Accounts 1,527,703 1,403,156 Taxes 3,207 1,834 Special assessments 191 130 Due from other funds 3,312 Due from other governments 24,005 53,895 Inventories, at cost 5,729 3,470 Prepaid items 268,075 277,393 -' Total current assets 7,347,122 5,560,072 Noncurrent assets: Long-term receivables: Metropolitan Council Environmental Services 74,818 213,818 Special assessments receivable 226,234 27,907 Total noncurrent assets 301,052 241,725 Property and equipment, at cost: Land 154,531 154,531 Buildings 1,529,236 1,529,236 _ Improvements other than building 8,452,485 6,769,754 Machinery and equipment 2,461,786 2,405,621 Water and sewer lines 18,041,569 18,041,569 30,639,607 28,900,711 Less: accumulated depreciation (10,085,809) (9,358,307) Net property and equipment 20,553,798 19,542,404 Total assets $28,201,972 $25,344,201 Liabilities and Fund Equity Current liabilities: .... Accounts payable $58,084 $39,778 Deposits payable 1,556 1,556 Contracts payable 375,318 21,474 Salaries payable 14,637 9,109 Due to other governments 290,125 500,511 Accrued interest payable 76,029 58,506 _ Bonds payable-current 120,000 115,000 Total current liabilities 935,749 745,934 Long-term liabilities: Bonds payable 4,690,144 2,210,000 Total liabilities 5,625,893 2,955,934 Fund equity: Contributed capital 11,907,544 12,276,562 Retained earnings: Reserved for capital outlay 2,547,493 3,500,340 _ Unreserved 8,121,042 6,611,365 Total fund equity 22,576,079 22,388,267 Total liabilities and fund equity $28,201,972 $25,344,201 111 Exhibit F-8 CITY OF FRIDLEY. MINNESOTA — PUBLIC UTILITY ENTERPRISE FUND COMPARATIVE STATEMENT OF REVENUES. EXPENSES AND CHANGES IN RETAINED EARNINGS _ Years ended December 31, 1996 and 1995 — Totals 1996 1995 Operating revenues: Water sales and sewer rents $5,639,422 $4,383,174 — Other 151,865 93,726 Total operating revenues 5,791,287 4,476,900 Operating expenses: Personal services 956,171 780,425 — Supplies and other charges: Disposal charges 3,112,047 3,162,003 Other 851,155 663,049 — Depreciation: Purchased assets 360,213 309,058 Contributed assets 369,018 369,017 Total operating expenses 5,648,604 5,283,552 — Operating income(loss) 142,683 (806,652) Nonoperating revenues (expenses): Intergovernmental revenue 50,000 Interest on investments 180,787 177,152 — Debt service (173,553) (142,943) Special assessments levied 229,666 40,000 Other 295 62,380 — Total nonoperating revenues (expenses) 287,195 136,589 Net income(loss)before operating transfers 429,878 (670,063) — Operating transfers in (out) General Fund (322,392) — Net income(loss)before extraordinary item 107,486 (670;063) Extraordinary gain on issuance of sewer availability Charge credits 80,327 22,100 Net income(loss) 187,813 (647,963) Credit arising from transfer of depreciation — on contributed capital 369,017 369,017 Retained earnings-January 1 10,111,705 10,390,651 — Retained earnings-December 31 $10,668,535 $10,111,705 112 Exhibit F-9 CITY OF FRIDLEY. MINNESOTA PUBLIC UTILITY ENTERPRISE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31, 1996 and 1995 Totals 1996 1995 Cash flows from operating activities: Operating income $142,683 ($806,652) — Adjustments to reconcile operating income(loss)to net cash flows from operating activities: Depreciation 729,231 678.075 Changes in assets and liabilities: Decrease (increase)in receivables 123,296 (327,917) Decrease(increase) in due from other funds 3,312 (3,312) Decrease(increase)in inventories (2,259) 2,524 Decrease (increase) in prepaid items 9,318 (19,430) Increase(decrease)in payables 189,815 146,422 — Intergovernmental revenue 50,000 Other non-operating revenue 295 62,380 Use of sewer availability charge credits 223,550 Net cash flows from operating activities 1,245,691 (44,360) — Cash flows from non-capital financing activities Operating transfers out (322,392) — Net cash flows from non-capital financing activities (322,392) — Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (1,740,624) (523,391) Proceeds from sale of revenue bonds 2,595,143 0 Principal paid on revenue bonds (115,000) (85.000) Interest on paying agent fees on revenue bonds (173,553) (142,943) Special assessment collections 31,278 14,209 — Net cash flows from capital and related financing activities 597,244 (737,125) Cash flows from investing activities: _ Interest on investments 180,787 174,906 Net cash flows from investing activities 180,787 174,906 Net increase(decrease)in cash and cash equivalents 1,701,330 (606,579) Cash and cash equivalents-January 1 3,816,882 4,423,461 Cash and cash equivalents-December 31 $5,518,212 $3,816,882 Noncash investing, capital and financing activities: Special assessments of$229,666 were levied to finance a portion of the 1996 Water, Sewer and Storm Water Revenue Bonds. 113 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 se re. ating 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 capita! maintenance measurement focus and use the accrual basis of accounting. ir Employee Benefits Fund I r=. This fund is used to account for the expenses associated with providing fringe benefits for the City of Fridley employees. 1 ' Self Insurance Fund This fund is used to account for all revenues and expenses associated with the $50,000 deductible in the City general liability policy. InL mrrration Systems Fund This fund is used to account for all revenues and expenses associated with maintaining and upgrading • : the City's computerized information systems. Exhibit G-1 _ CITY OF FRIDLEY. MINNESOTA INTERNAL SERVICE FUNDS COMBINING BALANCE SHEET December 31, 1996 With comparative totals for December 31, 1995 Employee Self Information Totals Assets Benefits Insurance Systems 1996 1995 Current assets: Cash and investments $1,024,490 $1,827,493 $872,171 $3,724,154 $1,974,253 Investments '-' Due from other funds 1,675,706 Total current assets 1,024,490 1,827,493 872,171 3,724,154 3,649,959 — Property and equipment, at cost: Property and equipment 1,024,012 1,024,012 883,438 Less: accumulated depreciation (738,606) (738,606) (638,848) Net property and equipment 285,405 285,405 244,590 Total assets $1,024,490 $1,827,493 $1,157,576 $4,009,559 $3,894,549 Liabilities and Fund Equity — Current liabilities: Accounts payable $270 $17,406 $50 $17,726 $18,118 Payroll deductions payable 69,973 69,973 62,355 Compensated absences payable 850,962 850,962 879,599 Due to other funds Total liabilities 921,205 17,406 50 938,661 960,072 Fund equity: Contributed capital 1,000,000 904,392 1,904,392 1,952,081 Retained earnings: Reserved for employee benefits 103,285 103,285 66,953 Reserved for equipment acquisition 164,822 Unreserved 810,087 253,134 1,063,221 750,621 Total fund equity 103,285 1,810,087 1,157,526 3,070,898 2,934,477 Total liabilities and fund equity $1,024,490 $1,827,493 $1,157,576 $4,009,559 $3,894,549 115 Exhibit G-2 CITY OF FRIDLEY. MINNESOTA - INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES. EXPENSES AND CHANGES IN RETAINED EARNINGS _ Year Ended December 31. 1996 With comparative totals for year ended December 31, 1995 Employee Self Information Totals Benefits Insurance Systems 1996 1995 Operating revenues: _ Charges for services $881 $99,758 $100,640 $81,673 Insurance reimbursement 300 Total operating revenues 881 99,758 100,640 81,973 Operating expenses: Personal services 14,568 2,835 5,241 22,644 27,795 _' Supplies and other charges 4,460 35,833 40,294 95,261 Depreciation 99,758 99,758 77,113 Total operating expenses 19,029 38,668 104,999 162,696 200,169 Operating income(loss) (18,148) (38,668) (5,241) (62,056) (118,196) Nonoperating revenues: Interest on investments 54,479 98,134 45,865 198,478 177,767 - Income before operating transfers 36,331 59,466 40,624 136,421 59,571 Operating transfers out: General Fund (50,000) Net income(loss) 36,331 59,466 40,624 136,421 9,571 - Credit arising from transfer of depreciation on contributed capital 47,688 47,688 56,662 Retained earnings-January 1 66,953 750,621 164,822 982,396 916,163 Retained earnings- December 31 $103,284 $810,087 $253,134 $1,166,506 $982,396 116 Exhibit G-3 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS Year Ended December 31.1996 With comparative totals for year ended December 31,1995 Employee Self Information Totals Benefits Insurance Systems 1996 1995 Cash flows from operating activities: Operating income(loss) ($18,148) ($38,668) ($5,241) ($62,057) ($118,196) Adjustments to reconcile operating income(loss) to net cash flows from operating activities: Depreciation 99,758 99,758 77,113 Changes in assets and liabilities: Decrease(increase)in due from other funds 1,675,706 1,675,706 390,301 Decrease(increase)in accounts payable 17,371 (15,632) 1,739 Increase(decrease)in accounts payable (2,130) (2,130) 12,903 Increase(decrease)in compensated absences payable (28,637) (28,637) 58,844 Increase(decrease)in payroll deductions payable 7,618 7,618 4,648 Increase(decrease)in due from other funds (170,106) Net cash flows from operating activities (41,297) 1,654,409 78,885 1,691,997 255,507 Cash flows from non-capital financing activities: Operating transfers to General Fund (50,000) — Cash flows from capital and related financing activities: Aquisition of fixed assets (140,574) (140,574) (63,866) .... Contributed capital Net cash flows from capital and related financing activities (140,574) (140,574) (63,866) Cash flows from investing activities: Purchase of investment securities Proceeds from sale of investment securities 1,649,768 Interest on investments 54,479 98,134 45,865 198,478 177,767 Net cash flows from investing activities 54,479 98,134 45,865 198,478 1,827,535 Net increase(decrease)in cash and cash equivalents 13,182 1,752,543 (15,824) 1,749,901 1,969,176 Cash and cash equivalents-January 1 1,011,308 74,950 887,995 1,974,253 5,077 — Cash and cash equivalents-December 31 $1,024,490 $1,827,493 $872,171 $3,724,154 $1,974,253 117 Exhibit G-4 CITY OF FRIDLEY. MINNESOTA EMPLOYEE BENEFITS INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31,1996 and 1995 Totals Assets 1996 1995 Cash and investments $1,024,490 $1,011,308 Total assets $1,024,490 $1,011,308 -" Liabilities and Fund Eauity Current liabilities: Accounts payable $270 $2,401 Compensated absences payable 850,962 879,599 Payroll deductions payable 69,973 62,355 Total current liabilities 921,205 944,355 Fund equity: Retained earnings: Reserved for employee benefits 103,285 66,953 Total liabilities and fund equity $1,024,490 $1,011,308 118 Exhibit G-5 CITY OF FRIDLEY, MINNESOTA EMPLOYEE BENEFITS INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Years ended December 31, 1996 and 1995 Totals 1996 1995 Operating revenues: Charges for services $881 $4,560 Operating expenses: General government: Personal services 14,568 27,795 Supplies and other charges 4,460 3,723 -' Total operating expenses 19,029 31,518 Operating income(loss) (18,148) (26,958) Nonoperating revenues: Interest on investments 54,479 52,231 Income before operating transfers 36,331 25,273 — Operating transfers out: General Fund (50,000) Net income (loss) 36,331 (24,727) Retained earnings-January 1 66,953 91,680 Retained earnings-December 31 $103,284 $66,953 119 Exhibit G-6 CITY OF FRIDLEY. MINNESOTA EMPLOYEE BENEFITS INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31, 1996 and 1995 Totals 1996 1995 Cash flows from operating activities: Operating income (18,148) (26,958) Adjustments to reconcile operating income (loss)to net -" cash flows from operating activities: Changes in assets and liabilities: Decrease(increase)in due from other funds 1,139,509 Decrease (increase)in accounts receivable Increase(decrease) in accounts payable (2,130) (1,937) Increase(decrease) in compensated absences payable (28,637) 58,844 Increase(decrease) in payroll deductions payable 7,618 4,648 Increase(decrease) in due to other funds (170,106) Net cash flows from operating activities (41,297) 1,004,000 Cash flows from noncapital financing activities: Operating transfer to General Fund (50,000) Cash flows from investing activities: _ Interest on investments 54,479 52,231 Net increase (decrease)in cash and cash equivalents 13,182 1,006,231 Cash and cash equivalents-January 1 1,011,308 5,077 Cash and cash equivalents-December 31 $1,024,490 $1,011,308 • 120 Exhibit G-7 CITY OF FRIDLEY.MINNESOTA SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31, 1996 and 1995 Totals Assets 1996 1995 Cash and investments $1,827,493 $74,950 Due from other funds 1,675,706 Total assets $1,827,493 $1,750,656 Liabilities and Fund Equity Current liabilities: Accounts payable $17,406 $35 Fund equity: Contributed capital 1,000,000 1,000,000 Retained earnings: Unreserved 810,087 750,621 Total fund equity 1,810,087 1,750,621 Total liabilities and fund equity $1,827,493 $1,750,656 121 Exhibit G-8 CITY OF FRIDLEY. MINNESOTA — SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF REVENUES. EXPENSES AND CHANGES IN RETAINED EARNINGS Years ended December 31, 1996 and 1995 Totals 1996 1995 Operating revenues: — Insurance reimbursement $ $300 Operating expenses: — Personal services 2,835 Supplies and other charges 35,833 91,538 Total operating expenses 38,668 91,538 Operating income(loss) (38,668) (91,238) Nonoperating revenues: "' Interest on investments 98,134 86,595 Net income(loss) 59,466 (4,643) — Retained earnings-January 1 750,621 755,264 Retained earnings-December 31 $810,087 $750,621 122 Exhibit G-9 CITY OF FRIDLEY. MINNESOTA SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31, 1996 and 1995 Totals 1996 1995 Cash flows from operating activities: Operating income(loss) ($38,668) ($91,238) '-' Adjustments to reconcile operating income(loss)to net cash flows from operating activities: Changes in assets and liabilities: Decrease(increase)in due from other funds 1,675,706 (749,208) Increase(decrease)in accounts payable 17,371 (842) — Net cash flows from operating activities 1,654,409 (841,288) Cash flows from investing activities: Proceeds from sale of investment securities 829,643 Interest on investments 98,134 86,595 Net cash flows from investing activities 98,134 916,238 Net increase(decrease)in cash and cash equivalents 1,752,543 74,950 Cash and cash equivalents-January 1 74,950 Cash and cash equivalents-December 31 $1,827,493 $74,950 123 Exhibit G-10 CITY OF FRIDLEY. MINNESOTA INFORMATION SYSTEMS INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31, 1996 and 1995 Totals Assets 1996 1995 Current assets: Cash and investments $872,171 $887,995 Total current assets 872,171 887,995 — Property and equipment, at cost: Machinery and equipment 1,024,012 883,438 — Less: accumulated depreciation (738,606) (638,848) Net property and equipment 285,405 244,590 Total assets $1,157,576 $1,132,585 Liabilities and Fund Eauity Current liabilities: Accounts payable $50 $15,682 — Fund equity: Contributed capital 904,392 952,081 — Retained earnings: Unreserved, undesignated 253,134 164,822 Total fund equity 1,157,526 1,116,903 Total liabilities and fund equity $1,157,576 $1,132,585 124 Exhibit G-11 CITY OF FRIDLEY, MINNESOTA INFORMATION SYSTEMS INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Years ended December 31, 1996 and 1995 —' Totals 1996 1995 Operating revenues: Charges for services $99,758 $77,113 Operating expenses: General government: Supplies and other charges 5,241 Depreciation 99,758 77,113 Total operating expenses 104,999 77,113 Operating income(loss) (5,241) 0 Nonoperating revenues: Interest on investments 45,865 38,941 Net income (loss) 40,624 38,941 Credit arising from transfer of depreciation on contributed assets 47,688 56,662 Retained earnings-January 1 164,822 69,219 Retained earnings- December 31 $253,134 $164,822 125 Exhibit G-12 CITY OF FRIDLEY, MINNESOTA INFORMATION SYSTEMS INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31, 1996 and 1995 Totals 1996 1995 Cash flows from operating activities: Operating income ($5,241) $ Adjustments to reconcile operating income(loss)to net cash flows from operating activities: Depreciation 99,758 77,113 Changes in assets and liabilities: Increase(decrease)in accounts payable (15,632) 15,682 Net cash flows from operating activities 78,885 92,795 — Cash flows from capital and related financing activities: Acquisition of fixed assets (140,574) (63,866) ^ Contributed capital 0 Net cash flows from capital and related financing activities (140,574) (63,866) — Cash flows from investing activities: Proceeds from sale of investment 820,125 _ Interest on investments 45,865 38,941 Net cash flows from investing activities 45,865 859,066 Net increase(decrease) in cash and cash equivalents (15,824) 887,995 Cash and cash equivalents-January 1 887,995 — Cash and cash equivalents-December 31 $872,171 $887,995 126 U: LL -- ' ' - ' ' ' - .,. ,.,. • ' . ' ' ' - ., . „ �: i �r TRUST Air DAGENCY FUN OS , '> C. 5,:. p r e .. { Trust and Agency Funds are used fo account.for assets held by a government in a'trustee or . agent 7! ):-.-city;for rod duals,private organizations$other governments or other funds, _ a `'+, r - Ex renctabte' rust Funs t n The City of Fridley maintains only.:one Expendable Trust Fund.that is used to defray the City administrative costs assoc fated with the issuance of industrial revenue development.bonds.• Six Cities Watershed f Ac a Fund 6' This fund was esablished tb account for'the coliection of taxes received prom`the b' ounty,'on w rf � ;_ t‘. behalf of the Six Cities Watershed District. ``` e. ,, irk fg ,:::4:7,,.''' y £ 41, i ' HotelliMfotel Asrencv:FUnd 'r h Th's fund was.;establrs d t,o account for the oltectton.,of a three percent tax that has been rt .*� tle „)imposed 6i-). 1,1''•a 'the hotels a"nd motels rn the north suburban..area. The;collection process is` �r ' ��i.1! administered by the Cit on>behalt of the North Metro Convention and�Touns Bureau which will � 7,�1;' fi arse the money to provide information to ors:tors and create an awareness ofthe facilities available t A r in this area. ., : s { Deferred Compensation Agency',Fund f .�, • Thrs fund accounts for deposits field in trust with the International C;ty Managers;Association ' ; (ICtvtA)on behalf of the.City,;of Fridley.em`ployees. erppioyees;make,pretax•contributions'to this y _§ `�,µF { �: ;:organization throughout their Careers which are user#? ,s:a retirement benefit. _, fit' rfT !S `*Y p'.f n i ,r#fib '^ dr CR,}a ,: , o( 9 ,a dy-a V}t yt, °1 4, r y z � $ v r ��,��I 1 1 k 1* ,s .°, # gg 7s Exhibit H-1 CITY OF FRIDLEY, MINNESOTA — TRUST AND AGENCY FUNDS COMBINING BALANCE SHEET December 31,1996 _ With comparative totals for December 31, 1995 Expendable Agency Totals Assets Trust Funds 1996 1995 — Cash and investments $33,769 $9,405 $43,174 $44,485 Receivables: Accounts 2,752 2,752 3,306 _ Taxes: Unremitted 52 52 38 Delinquent 430 430 479 Other assets 6,058,906 6,058,906 5,440,158 Total assets $33,769 $6,071,545 $6,105,314 $5,488,466 Liabilities and Fund Balance — Liabilities: Deposits payable $11,963 $6,058,906 $6,070,869 $5,456,465 Due to other governments 12,639 12,639 12,101 Total liabilities 11,963 6,071,545 6,083,508 5,468,566 Fund balance: Unreserved, undesignated 21,806 21,806 19,900 — Total fund balance 21,806 0 21,806 19,900 Total liabilities and fund balance $33,769 $6,071,545 $6,105,314 $5,488,466 128 Exhibit H-2 CITY OF FRIDLEY. MINNESOTA INDUSTRIAL DEVELOPMENT REVENUE BOND TRUST FUND COMPARATIVE STATEMENT OF REVENUES. _ EXPENDITURES AND CHANGES IN FUND BALANCE Years ended December 31, 1996 and 1995 Totals 1996 1995 Revenues: '- Interest on investments $1,906 $2,219 Increase(deficiency)of revenues over expenditures 1,906 2,219 Fund balance-January 1 19,900 17,681 — Fund balance-December 31 $21,806 $19,900 129 Exhibit H-3 Continued CITY OF FRIDLEY. MINNESOTA ALL AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Year ended December 31, 1996 Balance Balance January 1 Additions Deletions December 31 SIX CITIES WATERSHED AGENCY FUND Assets "' Cash and investments $5,516 $3,876 $2,714 $6,678 Taxes receivable: - Unremitted 38 52 38 52 Delinquent 479 23 72 430 Total assets $6,033 $3,951 $2,824 $7,160 Liabilities Due to other governments $6,033 $3,087 $1,960 $7,160 Total liabilities $6,033 $3,087 $1,960 $7,160 HOTEL/MOTEL TAX AGENCY FUND Assets Cash and investments $2,762 $53,071 $53,106 $2,727 Accounts receivable 3,306 2,752 3,306 2,752 _ Total assets $6,068 $55,823 $56,412 $5,479 Liabilities Due to other governments $6,068 $53,106 $53,695 $5,479 Total liabilities $6,068 $53,106 $53,695 $5,479 - DEFERRED COMPENSATION AGENCY FUND Assets Deferred compensation-at market $5,440,158 $944,742 $325,994 $6,058,906 - Total assets $5,440,158 $944,742 $325,994 $6,058,906 Liabilities Deposits payable $5,440,158 $944,742 $325,994 $6,058,906 Total liabilities $5,440,158 $944,742 $325,994 $6,058,906 130 Exhibit H-3 Continued CITY OF FRIDLEY, MINNESOTA ALL AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Year ended December 31,1996 Balance Balance January 1 Additions Deletions December 31 TOTAL-ALL AGENCY FUNDS, Assets Cash and investments $8,278 $56,947 $55,820 $9,405 Receivables: "- Accounts 3,306 2,752 3,306 2,752 Taxes: Unremitted 38 52 38 52 Delinquent 479 23 72 430 Other assets 5,440,158 944,742 325,994 6,058,906 Total assets $5,452,259 $1,004,516 $385,230 $6,071,545 Liabilities Deposits payable $5,440,158 $944,742 $325,994 $6,058,906 "- Due to other governments 12,101 56,193 55,655 12,639 Total liabilities $5,452,259 $1,000,935 $381,649 $6,071,545 131 GENERAL FIXED ASSET ACCOUNT GROUP The General Fixed Asset Account Group is set up to account for long-lived assets not accounted for in an enterprise, trust or internal service fund. Exhibit I-1 CITY OF FRIDLEY.MINNESOTA COMPARATIVE SCHEDULE OF GENERAL FIXED ASSETS December 31, 1995 and 1996 1996 1995 General fixed assets: Land $2,526,904 $2,484,913 Building 4,894,763 4,894,763 Improvements other than building 18,197,042 16,520,604 Machinery and equipment 5,608,872 5,429,593 Total general fixed assets $31,227,581 $29,329,873 Investment in general fixed assets from: General obligation bonds 1,176,647 856,597 —. Federal and state aid 1,682,960 1,682,960 General fund revenues 11,373,257 10,498,548 Special revenue fund revenues 1,668,029 1,668,029 Special assessments 12,625,391 12,625,391 Private gifts 774,548 774,548 Other sources 1,926,749 1,223,800 Total investment in general fixed assets $31,227,581 $29,329,873 133 Exhibit 1-2 CITY OF FRIDLEY. MINNESOTA SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS - BY FUNCTION AND ACTIVITY Year Ended December 31, 1996 - General Fixed General Fixed Assets Assets 1/1/96 Additions Deletions 12/31/96 - Function and Activity General government City manager $5,555 $ $ $ 5,555 Cable TV 67,849 6,380 74,229 Accounting 30,713 30,713 Management Information Systems 15,045 15,045 Elections 92,592 92,592 .., City Clerk/Records 8,500 85,350 93,850 Planning 149,918 53,041 202,959 Municipal center 3,775,479 1,672 3,777,151 - Total general government 4,145,651 146,443 4,292,094 Public safety - Public protection 769,107 112,871 79,733 802,245 Fire protection 1,913,699 20,924 1,934,623 - Inspectional services 4,917 4,917 Civil defense 148,352 148,352 Total public safety 2,836,075 133,795 79,733 2,890,137 - Public works Engineering 87,097 1,921 12,875 76,143 Street improvements 13,505,615 1,442,401 58,089 14,889,927 Traffic signal 256,862 99,537 356,399 _ City garage 2,180,816 2,180,816 Parks 4,925,971 260,655 49,447 5,137,179 Total public works 20,956,361 1,804,514 120,411 22,640,464 - Recreation/Naturalist Recreation 161,318 10,188 171,506 - Naturalist 1,230,468 2,912 1,233,380 Total recreation/naturalist 1,391,786 13,100 1,404,886 Total general fixed assets $29,329,873 $2,097,852 $200,144 $ 31,227,581 134 - Exhibit 1-3 CITY OF FRIDLEY,MINNESOTA - SCHEDULE OF GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY December 31, 1996 - Improv Machinery Other than and Total Land Buildings Buildings Equipment Function and Activity General government City manager $ 5,555 $ $ $ $ 5,555 Cable TV 74,229 74,229 Accounting 30,713 30,713 Management Information Systems 15,045 15,045 Elections 92,592 92,592 City Clerk/Records 93,850 93,850 Planning 202,959 166,795 11,050 25,114 Municipal center 3,777,151 53,948 2,849,206 53,302 820,695 Total general government 4,292,094 220,743 2,849,206 64,352 1,157,793 - Public Safety Public protection 802,245 166,871 635,374 Fire protection 1,934,623 58,656 504,212 135,160 1,236,595 - Inspectional services 4,917 4,917 Civil defense 148,352 148,352 Total public safety 2,890,137 58,656 504,212 450,383 1,876,886 - Public works Engineering 76,143 76,143 Street improvements 14,889,927 197,500 1,174 14,475,209 216,044 Traffic signal 356,399 351,521 4,878 City garage 2,180,816 142,940 386,266 239,888 1,411,722 - Parks 5,137,179 1,601,007 702,589 2,168,216 665,367 Total public works 22,640,464 1,941,447 1,090,029 17,234,834 2,374,154 - Recreation/Naturalist Recreation 171,506 20,037 151,469 Naturalist 1,233,380 306,058 451,316 427,436 48,570 Total recreation/naturalist 1,404,886 306,058 451,316 447,473 200,039 - Total general fixed assets $ 31,227,581 $2,526,904 $4,894,763 $ 18,197,042 $ 5,608,872 135 GENERAL LONG-TERM DEBT ACCOUNT GROUP The General Long-Term Debt Account Group is set up to account for unmatured principal of bonds, warrants, notes, or other forms of long-term indebtedness that are secured by the full faith and credit of the City and is not deemed the primary obligation of any specific enterprise fund of the City. Exhibit J-1 CITY OF FRIDLEY. MINNESOTA COMPARATIVE SCHEDULE OF GENERAL LONG-TERM DEBT — December 31. 1996 and 1995 1996 1995 — Amount Available And To Be Provided For The Payment of General lona-Term Debt Amount available in Debt Service Funds $10,505,332 $9,794,932 Amount to be provided by future taxes 4,889,415 5,472,665 Total available and to be provided $15,394,747 $15,267,597 General long-term debt payable: General long-term debt payable: General obligation special assessment improvement bonds $1,700,000 $1,555,000 ...- General obligation tax increment refunding bonds 9,485,000 9,485,000 General obligation temporary tax increment bonds 4,090,000 4,090,000 Capital lease payable 13,666 Construction loan payable 119,747 123,931 Total general long-term debt payable $15,394,747 $15,267,597 137 STATISTICAL SECTION IMNA iMmob Table 1 CITY OF FRIDLEY. MINNESOTA GENERAL GOVERNMENT EXPENDITURES BY FUNCTIONUI LAST TEN FISCAL YEARS (UNAUDITED) Fiscal General Public Municipal Public Community Recreation/ Debt Year Government Safety Center Works Development(2) Naturalist Service Total 1987 $1,927,147 $2,707,681 $160,222 $1,992,949 $ $530,066 $2,248,809 $9,566,874 1988 2,366,779 2,741,465 205,654 2,014,957 589,771 2,803.027 10.721.653 1989 2,013,513 3,030,507 273,095 2,222,203 628,397 3,181,419 11,349,134 1990 2,470,439 3,008,700 173,260 2,592,638 641,432 15,789,169 24,675,638 1991 2,566,435 3,233,501 165,968 2,213,994 422,381 655,985 1,866,305 11,124,569 1992 2,857,536 3,320,123 172,664 2,306,970 378,690 702,421 1,884,325 11,622,729 1993 2,612,941 3,413,297 169,493 2,376,990 407,470 720,759 2,207,891 11,908,841 1994 3,206,942 3,552,812 180,104 2,473,128 462,615 780,242 3,495,789 14,151,632 1995 3,954,875 3,821,230 195,949 2,375,472 530,230 850,329 5,636,711 17,364,796 1996 (3) 2,145,143 3,863,105 185,917 2,306,088 535,496 759,457 1,102,010 10,897,216 (1)Includes General,Special Revenue,Capital Projects and Debt Service Funds and excludes capital outlay. (2)Prior to 1991,Community Development was included with Public Works. (3)Prior to 1996,the HRA was included as a blended component unit of the City. 139 Table 2 CITY OF FRIDLEY. MINNESOTA GENERAL REVENUE BY SOURCE(1) LAST TEN FISCAL YEARS (UNAUDITED) General Property Taxes& Inter- Fiscal Special Licenses governmental Charges For Miscellaneous Year Assessments &Permits Revenue Services Revenue Total 1987 $4,767,980 $405,583 $3,302,438 $164,617 $3,086,280 $11,726,898 1988 5,296,520 378,553 3,744,038 160,255 2,938,911 12,518,277 '^ 1989 7,353,139 477,192 4,968,720 158,663 2,682,242 15,639,956 — 1990 6,900,089 408,966 3,564,426 630,015 2,570,467 14,073,963 1991 7,301,508 425,023 3,445,972 784,962 3,031,408 14,988,873 1992 7,336,538 401,178 4,538,566 842,590 3,027,293 16,146,165 1993 7,521,395 410,135 4,417,835 928,736 3,619,903 16,898,004 1994 6,915,475 528,111 3,808,828 1,038,863 2,393,463 14,684,740 — 1995 6,966,331 554,182 4,003,592 1,015,048 2,547,453 15.086.606 1996 (2) 4,420,212 828,652 3,986,987 1,299,495 1,841,698 12,377,044 wIncludes General, Special Revenue, Capital Projects and Debt Service Funds. -" (2)Prior to 1996, the HRA was included as a blended component unit of the City. 140 Table 3 CITY OF FRIDLEY. MINNESOTA CERTIFIED PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (UNAUDITEDZ Collection Ratio of Certified Current Percent of Prior Total Outstanding Fiscal Tax Tax of Levy Year's Total Collections to Delinquent Year Levy Collections")(2) Collected Taxes Collections Tax Levy Taxes 1987 $3,406,825 $3,253,858 95.51% $49,299 $3,303,157 .9696:1 $284,407 1988 3,440,107 3,373,355 98.06% 106,318 3,479,673 1.0115:1 244,842 1989 3,652,452 3,574,837 97.87% 36,610 3,611,447 .9888:1 285,847 1990 4,512,647 4,393,986 97.37% 64,357 4,458,343 .9880:1 300,854 1991 4,751,465 4,620,032 97.23% 12,633 4,632,665 .9750:1 320,081 1992 4,751,465 4,575,242 96.29% 36,480 4,611,722 .9706:1 399,739 1993 4,626,465 4,563,742 98.64% 162,911 4,726,653 1.0019:1 217,536 1994 3,678,665 3,578,604 97.28% 6,764 3,585,368 .9746:1 32,416 1995 3,667,686 3,606,902 98.34% 105,526 3,712,428 1.0122:1 84,303 1996 3,897,629 3,849,004 98.75% 21,977 3,870,981 .9876.1 72,063 (')For years prior to 1994, the tax levy and collections include Homestead and Agricultural Aid Credit (HACA). Beginning in 1994, state law required the City to certify its tax levy after subtracting HACA. Total HACA received in 1996 and 1995 was$1,040,658 and $1,083,779, respectively. (2)Excludes collections from properties pledged to tax increment. (3)Taxes were adjusted$105,234 by Anoka County due to abatements, court ordered settlements and corrections of prior errors by the County. See Footnote 1.F.2. 141 CITY OF FRIDLEY. MINNESOTA _ ESTIMATED MARKET VALUE AND TAXABLE VALUE OF ALL PROPERTY LAST TEN FISCAL YEARS JUNAUDITED) — Fiscal year payable 1987 1988 1989 1990 Assessment year 1986 1987 1988(') 1989m'm — Population, fiscal year 29,310 29,336 29,250 28,335 Real property: Estimated market value $879,498,600 $907,274,900 $941,136,600 $998,231,500 Taxable value: Homestead $94,010,922 $94,216,387 $11,864,707 $6,858,848 Excess and nonhomestead 153,262,018 152,658,373 19,425,676 19,728,534 Less fiscal disparities contribution (34,112,779) (37,235,245) (4,351,931) (4,435,055) Less tax increment value (11,348,839) (14,921,389) (2,524,911) (2,368,717) Taxable value $201,811,322 $194,718,126 $24,413,541 $19,783,610 Personal property: Estimated market value $26,531,000 $26,731,000 $26,452,800 $27,116,700 Taxable value $11,393,525 $11,479,525 $1,385,766 $1,369,388 Totals: Estimated market value $906,029,600 $934,005,900 $967,589,400 $1,025,348,200 Taxable value $213,204,847 $206,197,651 $25,799,307 $21,152,998 Per market value ratios: Taxable value .235:1 .221:1 .027:1 .021:1 Per capita valuations: Estimated market value $30,912 $31,838 $33,079 $36,187 — Taxable value $7,274 $7,029 $882 $747 Real property: Taxable value Fiscal disparities distribution $20,639,055 $23,382,622 $3,428,008 $3,817,118 Notes: — mThe Minnesota Legislature enacted legislation which changed the method of computing property taxes in 1988, 1989 and 1990. Those changes have been reflected in the computation of the taxable value for taxes payable in 1988 through 1996. (2)The Anoka County Auditor's Office determines taxable values on January 2 of each year pursuant to State Statutes. The Total Taxable Value on January 2, 1995 upon which the 1996 levy was based was $20,588,064. 142 Table 4 1991 1992 1993 1994 1995 1996 1990") 1991" 1992" 1993(183) 19941) 1995(1) 28,313 28,369 28,287 28,104 28,204 28.267 $1,002,812,900 $1,057,532,000 $1,064,099,200 $1,068,474,200 $1,090,023,902 $1,120,412,065 - $7,009,982 $6,763,333 $6,980,161 $7,008,373 $7,374,709 $7,784,740 - 20,147,442 20,555,478 19,609,068 19,250,219 19,253,892 19,554,250 (4,853,513) (4,684,322) (5,274,175) (5,000,902) (4,946,278) (4,974,987) (2,840,385) (3,073,122) (2,536,327) (2,581,487) (2,642,692) (2,692,879) $19,463,526 $19,561,367 $18,778,727 $18,676,203 $19,039,631 $19,671,124 $27,606,700 $22,917,200 $23,184,800 $23,308,700 $19,952,700 $19,576,200 - $1,115,388 $1,087,658 $1,088,969 $1,071,329 $916,940 $916,940 $1,030,419,600 $1,080,449,200 $1,087,284,000 $1,091,782,900 $1,109,976,602 $1,139,988,265 - $20,578,914 $20,649,025 $19,867,696 $19,747,532 $19,956,571 $20,588,064 - .020:1 .019:1 .018:1 .018:1 .018:1 .018:1 - $36,393 $38,086 $38,438 $38,848 $39,355 $40,419 $727 $728 $702 $703 $708 $730 - $4,079,539 $3,753,494 $3,463,663 $3,349,769 $2,827,323 $3,007,783 143 CITY OF FRIDLEY.MINNESOTA SIGNIFICANT MINNESOTA TAX POLICIES December 31. 1996 —' GENERAL All non-exempt property in Minnesota is subject to taxation by local taxing districts. The tax levied on a property is — determined by computing its tax capacity, which is the property's market value multiplied by the appropriate class rate. The taxes on a property are computed by multiplying the tax rate by the property's tax capacity. The tax rate is determined by the County Auditor, dividing each tax levy by the taxing jurisdiction's adjusted net tax capacity. Properties are physically reviewed by assessors at least once every four years. The assessors market value is multiplied by the appropriate class rates to arrive at the adjusted net tax capacity (taxable — value). The class rates vary by class of property. Type of Property 1996 Class Rates — Residential Homestead First$72,000 1.00% ._ Over$72,000 2.00 Commercial/Industrial First$100,000 3.00 Over$100,000 4.60 Rentals Apartments: 4+ units 3.40 Less than 4 units 2.30 -, Title II, MFHA, Sect.8 2.30 Property Tax Refund. Residential property tax credits are indexed by the percentage of net property tax to household _ income to the extent a homeowners property tax exceeds a percentage of household income. This percentage ranges from 1.2%for incomes below$1,000 up to 4%for incomes of$61,930. The maximum refund if$440. In 1989 the Minnesota Legislature also enacted a targeting property tax credit program. This program provides refunds to — homestead property owners for part of their tax increase in excess of 12 percent, if the increase is at least $100. The refund is equal to 75 percent of the increase over 12 percent. The maximum refund is$1,500. Property Tax Deferred. In 1993, the Minnesota legislature enacted a law commonly known as "This Old House" which — exempts from the property tax all or a portion of the value of improvements made to homes 35 years of age or older. Homestead property owners could exclude the property tax on those improvements for 10 years. At the end of 10 years, the value of the improvements is added to the market value of the home in equal installments every five years. There are — limits to the dollar amount eligible for the tax exclusion: $25,000 on homes 35 to 69 years old; and $50,000 on homes 70 years or older. Only improvements adding$1,000 or more of market value are eligible. This is effective for improvements made through January 2,2003. 144 CITY OF FRIDLEY. MINNESOTA PROPERTY TAX RATES ALL OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS (UNAUDITED} School School School School ' Fiscal District District District District Year City No. 11 No. 13 No. 14 No. 1612 1987 14.630 54.926 63.234 57.087 60.989 - 1988 15.058 62.181 60.733 67.454 70.880 1989 12.544% 51.384% 51.364% 55.193% 53.212% 1990 15.010% 47.893% 41.329% 43.158% 43.334% 1991 15.854% 51.779% 53.249% 49.727% 49.867% 1992 15.474% 56.525% 61.847% 58.025% 49.798% 1993 15.390% 63.717% 68.142% 61.406% 58.922% 1994 16.005% 57.161% 69.161% 60.840% 53.355% ''" 1995 16.098% 61.402% 77.730% 63.296°/o 58 566° 1996 16.565% 64.387% 60.182% 71.790% 67.583% Notes: (1)1997-1998 tax rates are expressed as mills; 1989-1996 rate is expressed as a tax capacity rate. - (2)Vocational/Technical District#916 is included in District No. 16. (3)Six Cities Watershed District is included with School District No. 11 beginning in 1985. (4)Rice Creek Watershed District is included with School District No. 13, 14 and 16. 146 Table 5 - Total School School School School Special District District District District County Districts No. 1113) No. 13(4) No. 14(4) No. 16(2'4) 29.414 5.761 104.299 112.889 106.742 110.644 - 30.766 5.531 113.334 112.022 118.743 122.169 27.425% 4.679% 95.813% 95.908% 99.737% 97.756% 28.846% 4.399% 95.851% 89.554% 91.383% 92.498% - 31.400% 4.767% 103.420% 105.226% 101.704% 101.844% 32.990% 5.119% 109.711% 115.388% 111.566% 103.339% 32.779% 5.668% 116.910% 122.707% 115.221% 114.723% - 32.680% 5.452% 110.879% 123.277% 114.956% 108.899% 32.765% 6.022% 115.811% 132.593% 118.159% 113.801% 31.036% 6.122% 117.662% 113.880% 125.488% 121.656% 147 Table 6 CITY OF FRIDLEY, MINNESOTA SPECIAL ASSESSMENT LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (UNAUDITED) ., Total Current Current Collections Delinquent Collections Outstanding Fiscal Assessments Assessments to Amount Assessments Total to Current Delinquent Year Due Collected Due Collected Collected Assessment Assessments 1987 $917,525 $845,716 92.17% $30,524 $876,240 95.50% $221,994 1988 782,079 779,413 99.66% 41,719 821,132 104.99% 202,296 - 1989 743,555 706,442 95.01% 52,374 758,816 102.05% 168,014 1990 604,960 577,064 95.39% 41,913 618,977 102.32% 151,658 1991 737,712 652,011 88.38% 28,616 680,627 92.26% 215,764 - 1992 636,842 573,413 90.04% 68,982 642,395 100.87% 126,221 1993 603,004 553,927 91.86% 68,367 622,294 103.20% 91,010 1994 581,591 536,450 92.24% 31,201 567,651 97.60% 118,994 1995 526,207 478,762 90.98% 8,123 486,885 92.53% 156,253 1996 483,347 461,929 95.57% 73,178 535,107 110.71% 104.909 148 CITY OF FRIDLEY, MINNESOTA ,^ HISTORY OF CERTIFIED TAX LEVIES AND TAX RATES LAST TEN FISCAL YEARS (UNAUDITED) 1987 1988 1989 Certified tax levies: General Fund $3,311,826 $3,345,190 $3,556,166 General Debt Service Funds - - - Capital Improvement Fund 85,542 86,320 87,689 Subtotal 3,397,368 3,431,510 3,643,855 Agency Fund 9,457 8,597 8,597 Total $3,406,825 $3,440,107 $3,652,452 Mill rate (1985-1988);Tax Capacity Rate (1989-1994) General Fund 13.895 14.188 14.614 General Debt Service Funds 0.158 0.000 0.000 Capital Improvement Fund 0.203 0.367 0.378 Subtotal 14.256 14.555 14.992 Agency Fund 0.074 0.075 0.066 Total 14.330 14.630 15.058 Notes: ('Beginning in 1994,the State law required the City to certify its tax levy after subtracting Homestead and — Agricultural Aid Credit(HACA). Total HACA for 1996 and 1995 was$1,040,658 and $1,083,779, respectively. 150 Table 7 1990 1991 1992 1993 1994(1) 1995(1) 1996") - $4,421,519 $4,660,276 $4,660,276 $4,535,276 $3,603,266 $3,592,295 $3,821,853 87,689 87,689 87,689 87,689 72,689 72,689 72,689 4,509,208 4,747,965 4,747,965 4,622,965 3,675,955 3,664,984 3,894.542 3,439 3,500 3,500 3,500 2,710 2,702 3,087 $4,512,647 $4,751,465 $4,751,465 $4,626,465 $3,678,665 $3,667,686 $3,897,629 12.192% 14.705% 15.548% 15.153% 15.076% 15.778% 16 258 - 0.000% 0.000% 0.000% 0.000% 0.000% 0.000% 0.000% 0.300% 0.290% 0.284% 0.300% 0.314% 0.320% 0.307% 12.492% 14.995% 15.832% 15.453% 15.390% 16.098% 16.565% 0.052% 0.015% 0.022% 0.021% 0.022% 0.022% 0.024% - 12.544% 15.010% 15.854% 15.474% 15.412% 16.120% 16.589% 151 CITY OF FRIDLEY. MINNESOTA RATIO OF NET GENERAL BONDED DEBT TO TAXABLE VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS (UNAUDITED) —' City Debt Total Gross Service Fund Special Net General Fiscal Taxable Bonded Monies Assessment, Bonded Year Population Value Debt Available and Revenue Debt 1987 29,310 $213,204,847 $33,195,000 $ - $33,195,000 $ - 1988 29,336 206,197,651 31,845,000 - 31,845,000 - 1989 29,250 25,799,307 30,060,000 - 30,060,000 - 1990 28,335 21,152,998 15,765,000 - 15,765,000 - 1991 28,313 20,578,914 17,715,000 - 17,715,000 - 1992 28,369 20,649,025 22,470,000 - 22,470,000 - 1993 28,287 19,867,696 21,500,000 - 21,500,000 - 1994 28,104 19,747,532 19,600,000 - 19,600,000 - 1995 28,204 19,956,571 19,075,000 - 19,075,000 - 1996 28,267 20,588,064 20,100,000 - 20,100,000 - Notes: ( The Minnesota Legislature enacted legislation in 1988 and 1989 which changed the method of computing property taxes. Those changes have been reflected in the computation of the taxable value for taxes payable in 1989- 1996. 152 Table 8 -" Ratio of Net General Net Bonded Debt General to Total Bonded Taxable Debt Value Per Capita $ - $ - OMR MMM mmw 153 Table 9 CITY OF FRIDLEY. MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN December 31. 1996 (UNAUDITED) Market Value $1,139,988,265 — (A)Debt Limit 2%of Market Value $22,199,532 Amount of Debt Applicable to Debt Limit: Total Debt $21,484,747 "" (B)Deductions: Tax Increment Redevelopment Bonds $14,840,000 — Special Assessment Bonds 1,700,000 Revenue Bonds 4,825,000 Construction Loan 119,747 21,484,747 — Total Amount of Debt Applicable to Debt Limit -0- — Legal Debt Margin $22,199,532 Notes: (A)M.S.A. Section 475.53(see following page) (B)M.S.A. Section 475.51 (see following page) 154 CITY OF FRIDLEY.MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN(CONTINUED) YEAR ENDED DECEMBER 31.1996 Note(A): M.S.A. Section 475.53 et seq. Limit on Net Debt "Subdivision 1. Generally, except as otherwise provided in sections 475.51 to 475.75, no municipality, except a school district or a city of the first class, shall incur or be subject to a net debt in excess of two percent of the market value of taxable property in the municipality." Note(B): M.S.A. Section 475.51 Definitions "Subdivision 4. "Net Debt" means the amount remaining after deducting from its gross debt the amount of current revenues which are applicable within the current fiscal year to the payment of any debt, and the aggregate of the principal of the following: (1) Obligations issued for improvements which are payable wholly or partly from the proceeds of special assessments levied upon property specially benefited thereby, including those which are general obligations of the municipality issuing them, if the municipality is entitled to reimbursement in whole or in part from the proceeds of the special assessments. (2) Warrants or orders having no definite or fixed maturity. (3) Obligations payable wholly from the income from revenue producing conveniences. (4) Obligations issued to create or maintain a permanent improvement revolving fund. (5) Obligations issued for the acquisition and betterment of public waterworks systems, public lighting, heating or power systems, and any combination thereof, or for any other public convenience from which a revenue is or may be derived. (6) Debt service loans and capital loans made to a school district under the provisions of sections 124.42 and 124.431. (7) Amount of all money and the face value of all securities held as a debt service fund for the extinguishment of obligations other than those deductible under this subdivision. (8) Obligations to repay loans made under section 216C.37. (9) Obligations to repay loans made from money received from litigation or settlement of alleged violations of federal petroleum pricing regulations. (10) All other obligations which under the provisions of law authorizing their issuance are not to be included in computing the net debt of the municipality." 155 Table 10 CITY OF FRIDLEY. MINNESOTA COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT AND COMPARATIVE DEBT RATIOS December 31. 1996 (UNAUDITED) Net Percent of General — Debt Debt Bonded Gross Service Net Applicable Debt Governmental Unit Debt Funds Debt to City Per Capita Direct and overlapping debt: Direct debt: "" City of Fridley $21,365,000 $6,199,143 $15,165,857 100.00% $15,165,857 Overlapping debt: "" School Districts: No. 11 141,687,792 35,093,431 106,594,361 1.60% 1,705,510 No. 16 34,140,000 3,109,030 31,030,970 36.80% 11,419,397 Metro Council 384,835,000 49,444,954 335,390,046 1.19% 3,991,142 Anoka County 96,501,750 41,247,106 55,254,644 18.04% 9,967,938 Vocational/Technical District No. 916 14,795,000 7,201,683 7,593,317 2.21% 167,812 Overlapping debt 671,959,542 136,096,204 535,863,338 27,251,798 Total direct and overlapping debt $693,324,542 $142,295,347 $551,029,195 $42,417,655 -- 156 Table 11 _ CITY OF FRIDLEY, MINNESOTA RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT TO TOTAL GENERAL — GOVERNMENT EXPENDITURES LAST TEN FISCAL YEARS (UNAUDITED) Ratio to — Total Total Debt Service Fiscal Debt General to General Year Principal Interest Service Expenditures" Expenditure — 1987 $740,000 $1,508,809 $2,248,809 $9,566,874 .2351:1 1988 1,380,000 1,423,027 2,803,027 10,721,653 .2614:1 1989 1,640,500 1,540,919 3,181,419 11,349,134 .2803:1 1990 14,720,000 1,069,169 1 5,789,169 24,675,638 .6399:1 1991 685,000 1,181,305 1,866,305 11,124,569 .1678:1 1992 715,000 1,169,325 1,884,325 11,662,729 .1616:1 1993 925,000 1,270,590 2,195,590 11,908,841 .1844:1 1994 2,305,000 1,147,551 3,452,551 14,151,632 .2440:1 1995 4,530,000 1,079,838 5,609,838 17,364,796 .3231:1 1996 175,000 896,011 1,071,011 10,897,216 .0983:1 Notes: ('Includes General, Special Revenue, Debt Service and Capital Projects. ("Prior to 1996, the HRA was included as a blended component unit of the City. 157 Table 12 CITY OF FRIDLEY. MINNESOTA REVENUE BOND COVERAGE LAST TEN FISCAL YEARS (UNAUDITED) Net "' Operating Revenue Direct Direct Available — Fiscal Operating Operating For Debt Debt Service Requirements Year Revenue) Expenses(2) Service Principal Interest Total Coverage 1987 $2,473,814 $2,513,721 ($39,907) $50,000 $1,646 $51,646 - 1988 2,725,742 2,943,443 (217,701) 20,000 380 20,380 - 1989 2,879,180 3,134,235 (255,055) - — 1990 3,049,658 3,213,227 (163,569) - 1991 3,115,437 3,408,068 (292,631) 148,449 148,449 - 1992 3,111,284 3,764,686 (653,402) 131,761 131,761 - 1993 3,557,088 4,360,448 (803,360) 45,000 129,944 174,944 - 1994 3,985,612 4,534,059 (548,447) 80,000 127,301 207,301 - 1995 4,476,900 5,283,552 (806,652) 85,000 142,943 227,943 - 1996 5,791,287 5,648,603 142,684 115,000 173,553 288,553 0.49 _. Notes: (1 Total operating revenue. (2)Total operating expenses including depreciation. ,.. 158 Table 13 CITY OF FRIDLEY. MINNESOTA DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS (UNAUDITED) Annual Per Average Fiscal Capita Median School Unemployment Year Population ) Income") Age") Enrollment') Rate", 1987 29,310 13,238 29.9 4,453 4.7% 1988 29,336 13,241 29.9 4,367 3.1% 1989 29,250 13,241 31.0 4,362 2.9% 1990 28,335 (2) 16,431 32.6 (2) 4,371 4.5% 1991 28,313 16,347 32.6 (2) 4,392 4.5% 1992 28,369 16,055 32.6 (2) 4,361 4.1% 1993 28,287 15,261 30.3 4,200 4.4% 1994 28,104 15,535 30.5 3,942 3.4% 1995 28,204 17,642 31.2 3,960 3.2% 1996 28,267 18,672 32.5 4,249 3.4% Notes: ("Estimated by Metropolitan Council. (2)1990 Population Report-Bureau of the Census (3)Estimated -excludes Grace Parochial High School as it is not supported by property tax dollars. — (4)1985- 1989 and 1991 - 1994 amounts for Anoka County. Amounts for the City of Fridley are not available. (5)Minnesota Department of Economic Security-Twin Cities Labor Market (6)1985- 1989 Unemployment Rate as reported is area-wide for the County of Anoka rather than for the City of Fridley "National Planning Data Corporation 159 Table 14 CITY OF FRIDLEY. MINNESOTA CONSTRUCTION AND PROPERTY VALUE �► LAST TEN FISCAL YEARS (UNAUDITED2 Commercial Construction Residential Construction �' Number Number Estimated Market Value Fiscal of of Taxable Non- Year Units Value Units Value Property Taxable") Total — 1987 54 $9,845,600 435 $23,413,715 $906,029,600 $177,123,840 $1,083,153,440 1988 70 17,421,494 340 3,660.384 934,005,900 177,123,840 1,111,129,740 1989 93 30,529,963 301 3,522,035 967,589,400 177,123,840 1,144,713,240 .- 1990 83 12,883,850 349 3,321,362 1,025,348,200 177,123,840 1,202,472,040 1991 75 11,946,068 360 2,525,711 1,030,419,600 177,123,840 1,207,543,440 1992 73 10,329,409 407 2,873,240 1,080,449,200 173,900,300 1,254,349,500 1993 69 6,778,632 474 3,536,547 1,087,284,000 177,929,400 1,265,213,400 1994 115 17,510,011 711 6,365,829 1,091,782,900 191,559,200 1,283,342,100 1995 116 18,280,651 608 7,618,320 1,109,976,602 185,043,100 1,295,019,702 1996 108 20,141,727 719 9,971,879 1,139,988,265 185,043,100 1,325,031,365 .-. Note: "Mon-taxable property is reevaluated by the city assessors every six years 160 Table 15 CITY OF FRIDLEY. MINNESOTA PRINCIPAL TAXPAYERS December 31.1996 (UNAUDITED) Fiscal Year 1996 Percent _ 1995* of Total Taxable Taxable Rank Taxpayer Type of Business Valuation Valuation** 1 Dayton Hudson Target discount store,warehouse and office $1,880,493 6.66% 2 Medtronic, Inc. Electro-medical devices 1,372,135 4.86% 3 Onan Corporation Portable electric generators 957,632 3.39% 4 Northwest Racquet&Swim Club Health and Tennis Club 810,480 2.87% 5 Burlington Northern Railroad Operating property 588,651 2.08% 6 Electric Hair Styling Cosmetics 586,130 2.07% 7 United Defense Systems Naval ordinance 464,572 1.64% 8 Maurice Fillister Georgetown apartments 433,182 1.53% 9 East River Road Business Center Business and retail complex 432,510 1.53% — 10 Retail Trust IV Wal-Mart discount store 378,259 1.34% Total $7,904,044 27.97% Notes: *The 1996 levy was based upon the January 2, 1995 taxable value. - **Before contribution to Metropolitan Tax Pool and tax increment financing. 161 CITY OF FRIDLEY. MINNESOTA INSURANCE COVERAGE December 31. 1996 (UNAUDITED) All risk perils, 100%coinsurance: Buildings and contents: Blanket,agreed amount endorsement, replacement cost coverage 23,920,727 Contractor's equipment 1,015,572 Boiler and machinery 3,000,000 Municipal general liability: — Each occurrence limit 600,000 Products/completed operations aggregate limit 600,000 Failure to supply annual aggregate limit 600,000 — EMF annual aggregate limit 1,200,000 Fire Damage Limit 50,000 Medical expense limit each occurance 1,000 Medical expense aggregate limit 10,000 Limited pollution liability 600,000 Lead and asbestos liability limit 200,000 Land use regulation limit 600,000 Automobile liability: Liability 600,000 Personal injury protection Statutory Uninsured/underinsured motorist 600,000 Comprehensive Actual cash value Liquor liability: General total limit 2,000,000 Bodily injury: Each person 1,000,000 — Each occurrence 1,000,000 Advertising injury each person 1,000,000 Products and completed work 2,000,000 Law Enforcement professional liability: Combined single limit per loss Personal injury,bodily injury,property damage,punitive damages 600,000 Employee benefit programs liability 600.000 — Worker's compensation Statutory ., PRINCIPAL OFFICIALS'BONDS December 31. 1996 All employees are covered by a blanket of faithful performance bond of$350,000. 162 CITY OF FRIDLEY. MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION December 31. 1996 (UNAUDITED) Date of Incorporation (Village Fridley) July 1, 1949 Date of Adoption of City Charter September 10, 1957 effective September 25, 1957 — Form of Government Council/Manager Fiscal year begins January 1 Area of City 11 square miles Bond rating (Moody's Investors Service, Incorporated) Aa-1 _ Elections: Last election-State and Local General November 5, 1996 Registered voters 18,767 Number of votes cast 13,324 Percent(%)of registered voters voting 71.0% Population: 1950- Federal Census 3,796 1960- Federal Census 15,182 1965- Federal Census 24,789 1970- Federal Census 29,233 1980- Federal Census 30,228 1990- Federal Census 28,335 1991 - Estimated by Metropolitan Council 28,313 1992- Estimated by Metropolitan Council 28,369 ,., 1993- Estimated by Metropolitan Council 28,287 1994- Estimated by Metropolitan Council 28,104 1995- Estimated by Metropolitan Council 28,204 ,r 1996- Estimated by Metropolitan Council 28,267 Permanent Employees--As of December 31 1985 125 1986 125 1987 125 1988 126 1989 126 1990 126 _ 1991 137 1992 137 1993 135 1994 140 1995 136 1996 136 163 CITY OF FRIDLEY. MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION (CONTINUED) December 31. 1996 (UNAUDITED) Fire protection: Number of stations 3 Volunteer firefighters 32 —" Full-time firefighters 5 Fire rating Class 3 Police protection: Number of stations 1 Number of sworn officers 36 Number of street lights 1,042 Number of traffic signal installations 35 Number of other special signal installations 2 Number of civil defense warning sirens 8 Miles of streets and sidewalks(including State and County): City streets 126.09 Trunk highways 10.79 County roads 14.56 Sidewalks and bikeways 14.48 Miles of sewer: Storm 43.56 Sanitary 103.02 Miles of watermains 112.80 — Municipal water system source City of Fridley Water Plant (13 wells)—capacity of 15 million gallons per day Number of water connections December 31, 1996 8,296 connections Daily average consumption (gallons) 4.80 million gallons Elevated stored capacity 2 million gallons Water storage reservoirs 4.5 million gallons Number of fire hydrants 1,080 Municipal sewer system: Disposal—through Metropolitan Council Environmental Service Number of connections December 31, 1996 8,045 connections Average daily flow(includes infiltration/inflow) 6.25 million gallons • 164 CITY OF FRIDLEY. MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION (CONTINUED) December 31. 1996 (UNAUDITED) — Parks and recreation areas: Developed 420 Acres Undeveloped 262 Acres Total 682 Acres City and County Parks Schools Total — Number of: Hockey rinks 6 2 8 General skating rinks 14 2 11 Playgrounds 28 4 32 Swimming beaches 1 0 1 Swimming pools 0 1 1 Picnic grounds 19 0 19 Day camp sites 1 0 1 Baseball diamonds 4 5 9 Softball diamonds 21 3 24 Outdoor basketball courts 20 4 24 Tennis courts 23 19 42 Horseshoe courts 16 0 16 Archery ranges 1 0 1 Permanent playground buildings 3 0 3 Permanent picnic shelters 15 0 15 Soccer/football fields 8 3 11 165 CITY OF FRIDLEY. MINNESOTA GENERAL INFORMATION December 31. 1996 — (UNAUDITED) Location -Transportation —' The City of Fridley, with a total land area of eleven square miles and an estimated population of 28,267, is located at the northern boundaries of Minneapolis and Columbia Heights, about eight miles from the Minneapolis central business distric+-- Freight service is provided in the area by local and interstate truck lines and Burlington Northern Railroad. Commut transportation is available through Metropolitan Transit Commission facilities. Highways serving Fridley include Interstate #694 (beltline around the metropolitan area)and State Highways. An International Airport, located approximately twenty-five miles south of Fridley, and private business aviation facilities located at the Anoka County and Crystal Airports, provide transportation and are operated by the Metropolitan Airport Commission. Medical Facilities Medical facilities in Fridley include Health One Unity Hospital, a 275-bed hospital with an adjacent clinic (Unity Professional Building), Fridley Plaza Clinic, Fridley Convalescent Home, the Fridley Medical Center, and Lynwood Health Care Center. Education Fridley is served by four school districts, a major portion of the City is located within Fridley Independent School District Nu. 14. The Fridley School District operates two elementary schools, a junior high and senior high school, employing 196 certified personnel in the education of about 2,698 students. Grace Parochial High School has an enrollment r approximately 1040. Portions of the Columbia Heights School District (13), the Spring Lake Park School District (16) an Anoka/Hennepin School District(11)also lie within the City of Fridley. Those districts have an estimated enrollment of 1,551 students living within the City of Fridley. Colleges and universities, vocational-technical and specialized training schools are located throughout the metropolitan are within easy commuting distances of Fridley. Larger Employers Larger employers in the City of Fridley include: — Full-Time Employer Product or Service Employees — Medtronics, Inc. Electro-medical devices and hdqtrs. 2,500 Unity Hospital Medical services 1,400 United Defense Systems Pumps and naval ordinance 1,800 Onan Corporation Portable generators, electronic equipment 1,727 Burlington Northern Railroad Northtown yard 1,100 Minco Products Electronic devices 500 Kurt Manufacturing Machine parts 350 Independent School District#14 Fridley school district 357 Electric Hair Styling Cosmetics 350 — Target Stores,Warehouse Discount department store 600 McGlynn's Bakery 350 Safetran Systems Corporation Railroad accessories 232 166