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1992 CAFR COMPREHENSIVE ANNUAL FINANCIAL REPORT y t S so'.F 4r, r iS Sr kip k r= t� �z • .4 %-.„ E • s Vim` Y y o- CITY OF FRIDLEY MINNESOTA FOR THE YEAR ENDED DECEMBER 31 9 1992 CITY OF FRIDLEY, MINNESOTA Comprehensive Annual Financial Report December 31, 1992 Prepared by: Department of Finance Richard D. Pribyl Finance Director Howard D. Koolick Assistant Finance Director CITY OF FRIDLEY. MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1992 TABLE OF CONTENTS EXHIBIT PAGE INTRODUCTORY SECTION List of Elected and Appointed Officials 1 Organizational Structure 2 City Manager's Letter of Transmittal 3 Chief Executive Officer's Letter of Transmittal 5 Certificate of Achievement for Excellence in Financial Reporting 15 FINANCIAL SECTION Auditors' Opinion 17 General Purpose Financial Statements Combined Financial Statements - Overview Combined Balance Sheet All Fund Types and Account Groups A-1 20 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types and Expendable Trust Funds A-2 24 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General and Special Revenue Fund Types A-3 26 Combined Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Types A-4 29 Combined Statement of Cash Flows All Proprietary Fund Types A-5 30 Notes to Financial Statements 32 Financial Statements of Individual Funds: General Fund: Comparative Balance Sheet B-1 65 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual B-2 66 Schedule of Revenues and Other Financing Sources - Budget and Actual B-3 67 Schedule of Expenditures and Other Financing Uses - Budget and Actual B-4 69 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1992 TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE 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 — Debt Service Funds: Combining Balance Sheet D-1 91 Combining Statement of Revenues, Expenditures and Changes in Fund Balances D-2 92 CITY OF FRIDLEY. MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31. 1992 TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE Capital Projects Funds: Combining Balance Sheet E-1 94 Combining Statement of Revenues, Expenditures and Changes in Fund Balances E-2 96 Capital Improvements Fund: Comparative Balance Sheet E-3 100 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual E-4 101 Enterprise Funds: Combining Balance Sheet F-1 103 Combining Statement of Revenues, Expenses and Changes in Retained Earnings F-2 104 Combining Statement of Cash Flows F-3 105 Liquor Fund: Comparative Balance Sheet F-4 106 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings F-5 107 Comparative Statement of Cash Flows F-6 108 Public Utility Fund: Comparative Balance Sheet F-7 109 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings F-8 110 Comparative Statement of Cash Flows F-9 111 Internal Service Funds: Combining Balance Sheet G-1 113 Combining Statement of Revenues, Expenses and Changes in Retained Earnings G-2 114 .._ Combining Statement of Cash Flows G-3 115 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1992 — TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE — Employee Benefits Fund: — Comparative Balance Sheet G-4 116 Comparative Statement of Revenues, Expenses and — Changes in Retained Earnings G-5 117 Comparative Statement of Cash Flows G-6 118 — Self Insurance Fund: Comparative Balance Sheet G-7 119 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-8 120 — Comparative Statement of Cash Flows G-9 121 Trust and Agency Funds: — Combining Balance Sheet H-1 124 Industrial Development Revenue Bond Trust Fund: —' Comparative Statement of Revenues, Expenditures and Changes in Fund Balance H-2 125 All Agency Funds: Combining Statement of Changes in Assets and Liabilities H-3 126 — General Fixed Assets: Comparative Schedule of General Fixed Assets 1-1 129 Schedule of Changes in General Fixed Assets - By Function — and Activity 1-2 130 Schedule of Changes in General Fixed Assets - By Function and Activity 1-3 131 — General Long-Term Debt: Comparative Schedule of General Long-Term Debt J-1 133 — SUPPLEMENTAL INFORMATION, Independent Auditor's Report on Compliance with Requirements Applicable to Nonmajor Federal Financial Assistance Program Transactions 135 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1992 TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE SUPPLEMENTAL INFORMATION (CONTINUED) Independent Auditor's Report on the Internal Control Structure in Accordance with Government Auditing Standards 137 Independent Auditor's Report on Internal Control Structure Used in Administering Federal Financial Assistance Programs 141 Independent Auditor's Report on Compliance with General Requirements Applicable to Federal Financial Assistance Programs 147 Independent Auditor's Report on Supplementary Information - ,,,. Schedule of Federal Financial Assistance 149 Compliance Report Based on an Audit of General Purpose Financial Statements Performed in Accordance with Government Auditing Standards 151 Schedule of Federal Financial Assistance K-1 153 Schedule of Assessed Valuation and Long-Term Debt for the Tax Increment Financing District K-2 154 Schedule of Sources and Uses of Public Funds for the Tax Increment Financing District K-3 155 STATISTICAL SECTION TABLE General Governmental Expenditures by Function - Last Ten Fiscal Years 1 157 General Revenues by Source - Last Ten Fiscal Years 2 158 _ Certified Property Tax Levies and Collections - Last Ten Fiscal Years 3 159 Assessed and Estimated Market Value of All Taxable Property - — Last Ten Fiscal Years 4 160 Significant Minnesota Tax Policies 162 Property Tax Rates Per $1,000 of Assessed Value and Calculated Tax Levies - All Overlapping Governments - Last Ten Fiscal Years 5 164 — Special Assessment Levies and Collections - Last Ten Fiscal Years 6 166 History of Certified Tax Levies and Actual Mill Rates - — Last Ten Fiscal Years 7 168 CITY OF FRIDLEY. MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31. 1992 — TABLE OF CONTENTS (CONTINUED) — TABLE PAGE STATISICAL SECTION (CONTINUED) _ Ratio of Net General Bonded Debt to Assessed Values and Net Bonded Debt Per Capita - Last Ten Fiscal Years 8 170 — Computation of Legal Debt Margin 9 172 Computation of Direct and Overlapping Bonded Debt and Comparative Debt Ratios 10 174 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Government Expenditures - Last Ten Fiscal Years 11 175 Revenue Bond Coverage - Last Ten Fiscal Years 12 176 Demographic Statistics - Last Ten Fiscal Years 13 177 "" Construction, Bank Deposits and Property Value - Last Ten Fiscal Years 14 178 — Principal Taxpayers 15 179 Insurance Coverage 180 Miscellaneous Statistical Information 181 General Information 184 INTRODUCTORY SECTION .. .■ 4 .. CITY OF FRIDLEY. MINNESOTA ELECTED AND APPOINTED OFFICIALS DECEMBER 31. 1992 ELECTED OFFICIALS • Term of Office Expires December Mayor William J. Nee 1992 Councilmember At Large Nancy J. Jorgenson 1992 Councilmember, Ward I Steven E. Billings 1994 Councilmember,Ward II Dennis L Schneider 1994 Councilmember,Ward III Edward J. Fitzpatrick 1994 Effective January 1993 Mayor William J. Nee 1996 Councilmember At Large Nancy J. Jorgenson 1996 Councilmember, Ward I Steven E. Billings 1994 Councilmember,Ward II Dennis L Schneider 1994 Councilmember,Ward III Edward J. Fitzpatrick 1994 APPOINTED OFFICIALS ,.., City Manager - William W. Burns City Attorney - Virgil C. Herrick 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 - James P. Hill 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 1992 Total Authorized Positions(137) I CITY MANAGER(6) I City Manager Asst to City Manager Personnel Technician Public Information Specialist Secretary to the City Manager Personnel Secretary I FINANCE(23) I I POLICE(44) I I FIRE(6) I I PUBLIC WORKS(39) I I RECREATION&NATURALIST(9)1 COMMUNITY DEVELOPMENT(10) Finance Director-Treasurer Assistant City Manager- Fire Chief Director of Public Works Director of Recreation&Nat Director of Community Develop Secretary Public Safety Director- Dep Fire Chief Oper Analyst Sr Citizen Program Coordinator Secretary Staff Accountant Civil Defense Director (3)Firefighter Secretary Secretary Accountant Secretary Secretary BUILDING INSPECTION(3) Dep Pub Safety Dir ENGINEERING(4) NATURALIST(4) Chief Bldg Official N ACCOUNTING(7) Lieutenant Asst Public Works Dir Nat Res Coordinator Mech/Bldg Inspector Met Finance Director (4)Sergeant Engineering Tech (2)Interpretive Specialist Secretary Accounting Specialist (3)Corporal Engineering Aide-Admin Receptionist/Clerk Typist Utility Billing Clk (23)Patrol Officer Engineering Tech/inspector PLANNING(5) General Accountant Pub Sfty Projects Coor RECREATION(2) Planning Coordinator Acctg-Data Proc Clk (2)Crime Prey Spec PW MAINTENANCE(32) Program Supervisor Code Enf Officer-Plan Aest Acctg-Data Proc CIk Office Supervisor Superintendant Program Specialist (2)Planning Assistant Acctg-Data Proc CIk (2)Senior Office Asst Secretary (1)Secretary (4)Office Asst Street Foreman ASSESSING(3) (6)PSW-D Assessor (3)Mechanic,Level B Appraiser (1)PSW-C Assmt Clk/Appraiser Asst (1)PSW-B (1)PSW-A MIS(2) Water Foreman MIS Technician (1)PSW-D MIS Specialist (2)PSW-C (1)PSW-A CITY CLERK-RECORDS(3) Sewer Foreman City Clerk (2)PSW-B Receptionist-Lic Clerk (2)PSW-A Records Retention Spec Park Foreman (6)PSW-D LIQUOR(4) 10 Store Manager Asst LQ Store Manager (2)LQ Store Clerk I 1 1 1 1 1 1 1 1 1 1 I I I I ) I 1 1 CITY OF FRIDLEY FRIDLEY MUNICIPAL CENTER •6431 UNIVERSITY AVE. N.E. FRIDLEY, MN 55432•(612)571-3450• FAX (612)571-1287 June 16, 1993 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, 1992. The Report includes an excellent and comprehensive letter from Richard D. Pribyl, Director of Finance and Howard D. Koolick, Assistant Finance Director, which provides a brief description of some of the activities the City is currently involved in. Also highlighted in the letter are some of the more important financial management practices employed by the City 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, 24/4,--vt.)171"44,-,4---1 William W. Burns City Manager AMMb 3 •■• Ili CITY OF FRIDLEY FRIDLEY MUNICIPAL CENTER •6431 UNIVERSITY AVE. N.E. FRIDLEY, MN 55432•(612)571-3450• FAX (612)571-1287 June 16, 1993 Mr. William W. Burns, City Manager Mayor William J. Nee and Council Members Fridley, Minnesota 55432 Dear Mr. Burns, Mayor Nee and Council Members: The Comprehensive Annual Financial Report of the City of Fridley, Minnesota, for the fiscal year ending — December 31, 1992, 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 1991. It is our belief that the accompanying fiscal year 1992 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 III 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. 5 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 a 1990 population of 28,335. 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 in the — past and for the future. LOCAL ECONOMY During the last half of 1991 and the first part of 1992, the Minneapolis area was fortunate enough to host a number of major sporting events that created a major influx of tourists to the area These events included the National Football League's Super Bowl, the United States Open Golf Championship, and — the National Collegiate Athletic Association (NCAA) Men's Basketball Final Four. While local businesses, especially those in the hospitality field, undoubtedly benefitted, events such as these provide only short term benefits. Long term growth in Fridley's economy will result from new construction and redevelopment within the City's industrial and commercial areas. During 1992, the City issued a building permit for the construction of a Wal-Mart Store in the northern portion of the City. By the end of 1992, the building — was mostly complete and the opening was scheduled for March of 1993. Also, in early 1992, McGlynn's Bakery opened in the vacant Totino's building, creating 300 new jobs. It is new development and redevelopment such as these projects that will help Fridley grow. — MAJOR INITIATIVES — During the year, the City of Fridley directed a number of construction projects including sealcoating of 13 miles of City streets, relining of sewer pipes, the diversion of Stonybrook Creek, construction of a service road on the west side of University Avenue and the annual overlay and reconstruction of various City streets. Internally, the City continued the installation of portions of the HTE, Inc. software purchased in 1991. On January 1, 1992, the general ledger, accounts payable and payroll modules were implemented after training and parallel testing were completed in 1991. In the fall of 1992, training, testing and 6 CITY OF FRIDLEY, MINNESOTA GENERAL INFORMATION (CONTINUED), MAJOR INITIATIVES (CONTINUED) implementation of the utility billing, licensing and building permit modules were completed. These modules were installed despite division head vacancies within the effected divisions during portions of the installation. In addition to the computer system, a consultant was chosen to review all City fees and make recommendations regarding fee and procedural changes. By year end, interviews with department managers and a detailed analysis of each fee was complete. The consultant's report will be issued in early 1993. Other notable initiatives included: preparation for and issuance of improvement, water revenue and tax increment bonds; receipt of a loan and grant from the State Department of Natural Resources for the reconstruction of Locke Lake Dam; reacquisition of the Lake Pointe property by the Housing and Redevelopment Authority; receipt of a grant from the State Department of Trade and Economic Development to aid McGlynn's Bakeries in creating jobs by converting a vacant property to meet their needs; and increasing the recycling program's tonnage by 57% from 1,370 tons in 1991 to 2,150 tons in 1992. _ We were also honored to receive the Distinguished Budget Presentation Award for our 1992 Budget. This represented the fourth consecutive year in which the City has received this award. '-' 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. One alternative is to share services and facilities between the City and -� neighboring cities. Along these lines,the City continues to investigate the feasibility of a regional senior citizen center to serve Fridley's and three neighboring cities senior citizens. The City will also be negotiating with the United States Army and a neighboring city to receive excess potable water generated from the Army's clean up efforts at the Twin Cities Army Ammunition Plant. Internally , we will continue to review our operation and to make changes to improve our effectiveness and efficiency. The budget and fixed asset modules of the HTE Inc. computer software are schedule "' for installation during 1993. In addition, increased familiarity with the report writer feature of the software will allow all users design reports tailored to their needs. Based on past reviews, we will be reorganizing our liquor store operations in an effort to increase their profitability. The new organization structure will be in place during the summer of 1993 and should begin to show results before the end of the year. A major fire training facility is planned for construction in 1993 to help train the City's volunteer firefighters. In addition, a housing coordinator will be hired to start up and oversee a housing rehabilitation program. Significant projects budgeted for 1993 in the five year capital improvement plan include: remodeling the fire department storage room; resurfacing of tennis courts; adding picnic shelters and construction of a parking lot at Moore Lake Park; construction of paths and the addition of picnic shelters within Riverview Heights Park; repair and modification of the Locke Filter Plant; relining of various storm and sanitary sewer lines; diversion of Highland Lake storm sewer; and the annual sealcoating, street reconstruction, well, reservoir and pump house maintenance programs. 7 CITY OF FRIDLEY, MINNESOTA 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 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 3.30%to 10.20%. 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, 1992 the City of Fridley's debt 1■4 service funds provided sufficient capital to cover the net general bonded debt. The City has numerous debt issues outstanding totalling $22,605,000. Of this outstanding debt, $4,215,000 represents special assessment debt with government commitment, $13,515,000 represents general obligation tax increment refunding bonds, $2,540,000 relates to tax increment issues supported by revenue from the established tax increment areas, $2,200,000 represents general obligation water revenue bonds and $135,000 represents a construction loan from the State of Minnesota During 1992, the city issued$840,000 of general obligation bonds to finance various improvement projects completed 8 CITY OF FRIDLEY, MINNESOTA FINANCIAL INFORMATION (CONTINUED) DEBT ADMINISTRATION (CONTINUED) and assessed against benefitted property and to call the 1980 Special Assessment Bonds at their next call date, February 1, 1993. In addition, $620,000 of general obligation water revenue bonds were issued in 1992 to finance various water utility improvements. These bonds are secured by the full faith and credit and taxing powers of the City and the net revenues of the City's water utility. Finally, $4,030,000 of general obligation tax increment bonds were sold to acquire property for future development. 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 areawide 'pool', and shared according to specific criteria TAX INCREMENT DISTRICTS The City Council took action on May 7, 1979 to form the first of nine 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. During the past few years there has been numerous development/redevelopment activities in various areas throughout the City. In the North Area the Springbrook apartments at Northtown were completed. In the Moore Lake area, three projects have been completed and the Northwest Racquet and Swim Club opened in the summer of 1990. There is also a new shopping center and an office complex which are in the process of leasing space. Two new areas were designated tax increment areas in 1992, and the City anticipates activity in these areas in the upcoming years. 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, 1992. Percent Increase/ Revenues Amount of Total (Decrease) Taxes and special assessments $7,336,538 45.42% $35,030 Licenses and permits 401,718 2.49% (23,305) Intergovernmental 4,538,566 28.10% 1,092,594 Charges for services 842,590 5.22% 57,628 Fines and forfeits 239,880 1.49% (46,279) Interest on investments 2,482,787 15.37% 97,578 Miscellaneous 308,946 1.91% (56,185) Total $16,151,025 100.00% $1,157,061 9 CITY OF FRIDLEY, MINNESOTA FINANCIAL INFORMATION (CONTINUED) — GENERAL GOVERNMENT FUNCTIONS (CONTINUED) — The most significant changes in revenues from the prior year were in the intergovernmental revenue, and interest income categories. The large increase in intergovernmental revenue is traceable to three — individual aids or grants. First, as discussed above, the City received a one-time $250,000 grant from the State Department of Trade and Economic Development. Second, the city received approximately $650,000 more money for the construction of streets than it received in 1991. Finally, the City received an additional $125,000 in local government aid from sales tax collections at the state level. Interest on investments was up significantly due to increased fund balance and favorable investment rates of which the City was able to take advantage. 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, 1992. Percent Expenditures Amount of Total Increase Current: General government $2,860,098 15.62% $329,398 Public safety 3,320,123 18.13% 50,887 Civic center 172,664 0.94% 6,696 Public works 2,306,970 12.60% 92,976 Community development 378,690 2.07% (43,691) Recreation and naturalist 702,421 3.85% 46,436 Debt service 1,884,325 10.29% 18,020 Capital outlay 6,684,269 36.51% 5,480,192 Total $18,309,560 100.01% $5,980,914 — The most significant increases are in the general government and capital outlay categories. The increase in general government is attributable to the pass-through of the aforementioned grant for McGlynn's Bakery and increases in the referendum returns from tax increments. The capital outlay increase is caused by the acquisition of the Lake Pointe property (4,230,000), taxes and on the propety at the time it was acquired (470,000) and the implemenation of a street reconstruction program (772,000) where overlays had been done previously. After factoring out capital outlay, the overall increase in other categories is 4.5% which is somewhat reflective of inflation and the imposition of a — new sales tax on City expenditures. However, a more detailed analysis among categories indicates the public safety increase relates to 1991 new employees beginning to progress through the salary steps. The public works category reflects increased amounts for sealcoating. The decline in Community Development category is due to decrease personal services resulting from the temporary — replacement of the Building Official position with a part-time employee. 10 CITY OF FRIDLEY, MINNESOTA FINANCIAL INFORMATION (CONTINUED) GENERAL GOVERNMENT FUNCTIONS (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 years 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 at 214 Mississippi Street. The City owns the store at the Highway 65 location and currently has a lease with one year options at 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 which use wholesale pricing. Retained earnings of the Liquor Fund were $1,274,852 on December 31, 1992 as compared to $1,112,630 at the closing of the last fiscal year. Income before operating transfers decreased from $165,116 in 1991 to $162,222 in 1992. 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 Waste Control Commission of $161,836 which represents the City's share of the equity in the Minneapolis Sewer System which was acquired by the Commission on January 1, 1971. This amount will be paid to the City by means of issuing credits against future sewer billings from the Commission. 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 and 1992. 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, 1992 were $10,266,263 compared to $10,102,711 at the closing 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 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. 11 CITY OF FRIDLEY, MINNESOTA OTHER INFORMATION PENSIONS — Employees in the City of Fridley are covered by five pension plans: 1) Fridley Fire Relief Association for Volunteer Firemen. 2) Fridley Police Relief Association, 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 the balance of the 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, 1991. The Certificate of Achievement is a prestigous 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. 12 CITY OF FRIDLEY, MINNESOTA OTHER INFORMATION (CONTINUED) ACKNOWLEDGEMENTS 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 Donna Tjomhom,Sharon Felting, 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, . /(c'ate1; Richard D. Pribyl Howard D. Koolick Finance Director Assistant Finance Director 13 _ 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, 1991 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. GE OFpk, Qr Of ,p ti WHO STATES y ANO 11, GNAO" ° President 6 WORK=SEAL /01-airroGe CNICA6� Executive Director INN 15 FINANCIAL SECTION 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 general purpose financial statements of the City of Fridley,Minnesota, as of and for the year ended December 31, 1992 as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards, 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 financial statements are free of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall 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, 1992, and the results of its operations and its cash flows of its proprietary fund types for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole.The combining,individual fund, account group financial statements, supporting schedules and statistical information in the table of contents is presented for purposes of additional analysis and is not a required part of the 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 10, 1993 '4 Itom. TAUTGES, REDPATH&CO., LTD. Certified Public Accountants 17 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 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 Combined Statement of Revenues, Expenditures, and Changes in Fund Balances - All Governmental Fund Types and Expendable Trust Funds Combined Statement of Revenues, Expenditures, and Changes In Fund Balances -Budget and Actual - General, Special Revenue and Budgeted Capital Project Fund Types Combined Statement of Revenues, Expenditures, 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 December 31, 1992 Governmental Fund Types Special Debt Capital — General Revenue Service Projects Assets Cash and cash equivalents $330 $10,000 $ $20,514 Investments 6,216,612 379,376 11,858,334 16,469,030 — Receivables: Accounts 15,475 27,535 5,344 Taxes 415,447 647,471 — Special assessments 11,061 2,597,538 36,180 Mortgage 951,718 Interest 1,094,432 86,261 — Loan 6,300 Developer note 137,730 Due from other funds 13,883 1,613 21,588 — Due from other governments 53,842 41,450 37,830 Inventories, at cost 26,428 Prepaid items 47,694 — 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 $8,039,234 $459,974 $14,455,872 $18,275,936 See Accompanying Notes to Financial Statements 20 Exhibit A-1 Fiduciary Proprietary Fund Types Fund Types Account Groups Totals Internal Trust and General General Long (Memorandum Only) Enterprise Service Agency Fixed Assets Term Debt 1992 1991 _ $2,154,639 $1,193,750 $ $ $ $3,379,233 $3,419,100 4,277,999 54,783 39,256,134 35,290,968 963,340 2,361 1,014,055 857,878 792 1,063,710 931,084 2,644,779 3,048,333 951,718 952,000 —' 1,180,693 1,101,894 6,300 137,730 3,432 1,485,383 1,525,899 2,629,243 19,874 152,996 105,861 275,433 301,861 343,567 204,947 252,641 212,693 279,428 279,428. 190,412 4,067,826 4,067,826 3,706,214 18,367,659 28,949,341 47,317,000 45,769,000 11,852,455 11,852,455 11,132,454 8,552,545 8,552,545 4,967,546 $26,546,751 $2,679,133 $4,125,762 $28,949,341 $20,405,000 $123,937,003 $114,658,247 21 CITY OF FRIDLEY, MINNESOTA COMBINED BALANCE SHEET-ALL FUND TYPES AND ACCOUNT GROUPS(CONTINUED) December 31, 1992 Governmental Fund Types Special Debt Capital General Revenue Service Projects Liabilities,fund equity and other credits — Liabilities — Accounts payable $155,075 $273,149 $7,886 $129,404 Deposits payable 500 10,000 105,621 Contracts payable 21,750 Salaries payable 115,482 697 Compensated absences payable Deferred revenue 545,294 2,573,943 1,634,471 Due to other funds 847,466 1,584 21,588 655,261 Due to other governments 9,710 32 238,555 Bonds payable -, Loans payables Other liabilities Total liabilities 1,673,527 285,462 2,603,417 2,785,062 Fund equity and other credits Contributed capital - Investment in general — fixed assets Retained earnings- Reserved Unreserved Fund balance: Reserved 172,362 3,538,227 7,582,357 Unreserved- Designated 4,769,761 174,512 8,174,996 Undesignated 1,423,584 8,314,228 (266,479) Total equity and other credits 6,365,707 174,512 11,852,455 15,490,874 Total liabilities, equity and other credits $8,039,234 $459,974 $14,455,872 $18,275,936 See Accompanying Notes to Financial Statements 22 Exhibit A-1 Continued Fiduciary Proprietary Fund Types Fund Types Account Groups Totals Internal Trust and General General Long (Memorandum Only) Enterprise Service Agency Fixed Assets Term Debt 1992 1991 $185,754 $16,967 $ $ $ $768,235 $358,110 4,107,338 4,223,459 3,863,269 35,831 57,581 187,784 9,618 60,028 185,825 128,590 905,758 905,758 1,005,971 ... 4,753,708 4,810,579 1,525,899 2,629,243 270,363 8,430 527,090 276,724 ., 2,200,000 20,270,000 22,470,000 17,715,000 135,000 135,000 47,518 47,518 118,412 2,749,084 982,753 4,115,768 20,405,000 35,600,073 31,093,682 12,256,552 1,000,000 13,256,552 13,581,903 28,949,341 28,949,341 27,313,817 3,111,186 696,380 3,807,566 2,859,567 8,429,929 8,429,929 8,865,984 11,292,946 10,398,505 13,119,269 12,243,516 9,994 9,481,327 8,301,273 23,797,667 1,696,380 9,994 28,949,341 88,336,930 83,564,565 $26,546,751 $2,679,133 $4,125,762 $28,949,341 $20,405,000 $123,937,003 $114,658,247 23 CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES-ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS ,_ Year Ended December 31, 1992 Governmental Fund Types Special Debt - General Revenue Service Revenues: - Taxes $3,590,062 $ $ Special assessments 3,524 528,603 Licenses and permits 317,243 84,475 Intergovernmental revenue 3,053,759 514,203 Charges for services 745,212 88,988 Fines and forfeits 228,505 11,375 Interest on investments 480,912 9,981 931,494 - Miscellaneous 142,939 189 Total revenues 8,562,156 709,211 1,460,097 Expenditures: Current General government 1,531,365 608,808 Public safety 3,312,190 7,933 Municipal center 172,664 Public works 2,088,263 - Community development 378,690 Recreation and naturalist 702,421 Debt service 1,884,325 Capital outlay 355,337 91,704 Total expenditures 8,540,930 708,445 1,884,325 Excess(deficiency)of revenues over expenditures 21,226 766 (424,228) Other financing sources(uses): -- Bond proceeds 4,266,681 Loan proceeds Operating transfers in 210,938 40,589 Operating transfers out (3,122,452) Total other financing sources(uses) 210,938 40,589 1,144,229 Excess(deficiency)of revenues and other financing sources over expenditures and other financing uses 232,164 41,355 720,001 Fund Balance January 1 6,103,596 133,157 11,132,454 Residual Equity Transfers in 29,947 - Residual Equity Transfers out Fund Balance December 31 $6,365,707 $174,512 $11,852,455 See Accompanying Notes to Financial Statements 24 Exhibit A-2 Fiduciary Fund Type Totals Capital (Memorandum Only) Projects Trust 1992 1991 $3,001,568 $6,591,630 $6,439,837 212,781 744,908 861,671 _ 401,718 425,023 970,604 4,538,566 3,445,972 8,390 842,590 784,962 239,880 286,159 1,056,080 4,320 2,482,787 2,385,209 165,818 308,946 365,131 5,415,241 4,320 16,151,025 14,993,964 717,363 2,562 2,860,098 2,530,700 3,320,123 3,269,236 172,664 165,968 218,707 2,306,970 2,213,994 378,690 422,381 702,421 655,985 _ 1,884,325 1,866,305 6,237,228 6,684,269 1,204,077 7,173,298 2,562 18,309,560 12,328,646 (1,758,057) 1,758 (2,158,535) 2,665,318 607,102 4,873,783 1,008,780 135,000 135,000 .., 2,981,318 3,232,845 1,713,674 (10,393) (3,132,845) (1,564,021) 3,723,420 (10,393) 5,108,783 1,158,433 1,965,363 (8,635) 2,950,248 3,823,751 13,555,458 18,629 30,943,294 27,119,543 29,947 (29,947) (29,947) $15,490,874 $9,994 $33,893,542 $30,943,294 25 CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUND TYPES(CONTINUED1 Year Ended December 31, 1992 With comparative totals for year ended December 31, 1991 - General Fund Variance Favorable - Budget Actual (Unfavorable) Revenues: Taxes $3,676,685 $3,590,062 ($86,623) Special assessments 1,312 3,524 2,212 Licenses and permits 329,708 317,243 (12,465) Intergovernmental revenue 2,843,509 3,053,759 210,250 Charges for services 715,191 745,212 30,021 Fines and forfeits 260,000 228,505 (31,495) Interest on investments 275,000 480,912 205,912 Miscellaneous 92,323 142,939 50,616 Total revenues 8,193,728 8,562,156 368,428 Expenditures: Current General government 1,646,675 1,531,365 115,310 - Public safety 3,358,576 3,312,190 46,386 Municipal center 179,054 172,664 6,390 Public works 2,163,445 2,088,263 75,182 Community development 415,149 378,690 36,459 Recreation and naturalist 737,778 702,421 35,357 Reserve for Contingency 147,369 147,369 - Capital outlay 418,744 355,337 63,407 Total expenditures 9,066,790 8,540,930 525,860 Excess(deficiency)of revenues over expenditures (873,062) 21,226 894,288 Other financing sources(uses): Operating transfers in 210,938 210,938 Operating transfers out - Total other financing sources(uses) 210,938 210,938 Excess(deficiency)of revenues and other financing sources over expenditures and other financing uses (662,124) 232,164 894,288 Fund balance January 1 6,103,596 6,103,596 878,175 Residual equity transfer in(out) 29,947 29,947 Fund Balance December 31 $5,441,472 $6,365,707 924,235 See Accompanying Notes to Financial Statements 26 Exhibit A-3 Special Revenue Fund Types Budgeted Capital Project Funds Variance Variance _ Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) - $ $ $ $70,550 $69,887 ($663) 98,957 84,475 (14,482) 541,401 514,203 (27,198) 289,000 929,764 640,764 88,657 88,988 331 8,390 8,390 - 11,375 11,375 9,377 9,981 604 506,779 603,748 96,969 189 189 20,000 44,415 24,415 749,767 709,211 (40,556) 886,329 1,656,204 769,875 - - 648,502 608,808 39,694 7,933 7,933 218,707 218,707 113,100 91,704 21,396 472,753 327,597 145,156 769,535 708,445 61,090 691,460 546,304 145,156 (19,768) 766 20,534 194,869 1,109,900 915,031 40,589 40,589 - (19,590) (19,590) 40,589 40,589 (19,590) (19,590) 20,821 41,355 20,534 175,279 1,090,310 915,031 133,157 133,157 7,164,160 7,164,160 $153,978 $174,512 $20,534 $7,339,439 $8,254,470 $915,031 27 Exhibit A-3 CITY OF FRIDLEY. MINNESOTA Continued COMBINED STATEMENT OF REVENUES, EXPENDITURES.AND CHANGES IN FUND BALANCES- BUDGET AND ACTUAL - GENERAL AND SPECIAL REVENUE FUND TYPES(CONTINUEDI Year Ended December 31. 1992 With comparative totals for year ended December 31, 1991 - Totals - (Memorandum Only) Variance- Favorable 1991 - Budget Actual (Unfavorable) Actual Revenues: -, Taxes $3,747,235 $3,659,949 ($87,286) $3,777,456 Special assessments 1,312 3,524 2,212 2,166 Licenses and permits 428,665 401,718 (26,947) 425,023 - Intergovernmental revenue 3,673,910 4,497,726 823,816 3,445,972 Charges for services 803,848 842,590 38,742 784,962 Fines and forfeits 271,375 239,880 (31,495) 286,159 Interest on investments 791,156 1,094,641 303,485 1,138,714 - Miscellaneous 112,323 187,543 75,220 136,898 Total revenues 9,829,824 10,927,571 1,097,747 9,997,350 Expenditures: Current General government 2,295,177 2,140,173 155,004 1,869,698 - Public safety 3,366,509 3,320,123 46,386 3,269,236 Municipal center 179,054 172,664 6,390 165,968 Public works 2,382,152 2,306,970 75,182 2,213,994 - Community development 415,149 378,690 36,459 422,381 Recreation and naturalist 737,778 702,421 35,357 655,985 Reserve for Contingency 147,369 147,369 - Capital outlay 1,004,597 774,638 229,959 764,220 Total expenditures 10,527,785 9,795,679 732,106 9,361,482 Excess(deficiency)of revenues over expenditures (697,961) 1,131,892 1,829,853 635,868 Other financing sources(uses): Operating transfers in 251,527 251,527 411,113 Operating transfers out (19,590) (19,590) (247,010) _ Total other financing sources(uses) 231,937 231,937 164,103 Excess(deficiency)of revenues and other - financing sources over expenditures and other financing uses (466,024) 1,363,829 1,829,853 799,971 Fund balance January 1 13,400,913 13,400,913 12,600,942 Residual equity transfer in(out) 29,947 29,947 Fund Balance December 31 $12,934,889 $14,794,689 $1,859,800 $13,400,913 See Accompanying Notes to Financial Statements 28 - - CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF REVENUES. EXPENSES AND CHANGES Exhibit A-4 IN RETAINED EARNINGS-ALL PROPRIETARY FUND TYPES Year Ended December 31. 1992 With Comparative Totals for Year Ended December 31, 1991 Proprietary Fund Types Totals Internal (Memorandum Only) Enterprise Service 1992 1991 -Sales and cost of sales: Sales $2,848,224 $ $2,848,224 $2,787,205 Cost of sales 2,244,851 2,244,851 2,219,230 - Gross profit 603,373 0 603,373 567,975 Operating revenues: _ Water sales and sewer rents 3,045,473 3,045,473 3,011,473 Other 65,811 137,871 203,682 247,347 Charges for services 11,240 11,240 Total operating revenues 3,111,284 149,111 3,260,395 3,258,820 Operating expenses: Personal services 1,007,284 39,949 1,047,233 1,072,898 - Supplies and other charges 2,657,451 36,155 2,693,606 2,421,436 Capital outlay 1,530 Depreciation 594,068 594,068 584,378 -- Total operating expenses 4,258,803 76,104 4,334,907 4,080,242 Operating(loss) (544,146) 73,007 (471,139) (253,447) -Non-operating revenues(expenses): Interest on investments 488,387 213,163 701,550 754,739 Debt service (131,761) (131,761) (148,449) - Loss on disposition of assets (2,895) (2,895) Other 12,285 12,285 2,000 Total non-operating revenues (expenses) 366,016 213,163 579,179 608,290 Income before operating transfers (178,130) 286,170 108,040 354,843 - Operating transfers in 347 Operating transfers out (100,000) (100,000) (150,000) - Total operating transfers 0 (100,000) (100,000) (149,653) Net income before extrordinary item (178,130) 186,170 8,040 205,190 -Extraordinary gain on issuance'of sewer availability charge credits 167,300 167,300 - Net income(loss) (10,830) 186,170 175,340 205,190 Credit arising from transfer of depreciation on contributed capital 336,604 336,604 336,458 Retained earnings January 1 $11,215,341 $510,210 11,725,551 11,183,903 ...Retained earnings December 31 $11,541,115 $696,380 $12,237,495 $11,725,551 See Accompanying Notes to Financial Statements 29 Exhibit A-5 CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES -- Year Ended December 31, 1992 With Comparative Totals for Year Ended December 31, 1991 Proprietary Fund Types Totals - Internal (Memorandum Only) Enterprise Service 1992 1991 Cash flows from operating activities: Operating income (loss) ($544,146) $73,007 ($471,139) ($253,447) Adjustments to reconcile operating income(loss)to net cash flows from operating activities: Depreciation 594,068 594,068 584,378 Changes in assets and liabilities: Decrease (increase) in receivables (137,116) 163 (136,953) (83,227) Decrease(increase) in due from other funds (3,432) 1,083,274 1,079,842 (1,199,127) Decrease(increase) in inventories 45,159 45,159 (5,684) - Decrease (increase)in prepaid items (40,588) (40,588) (17,009) Increase (decrease) in payables 90,407 (166,392) (75,985) 370,690 Other non-operating income 12,285 12,285 2,000 ^„ Use of sewer availability charge credits 56,000 56,000 Net cash flows from operating activities 72,637 990,052 1,062,689 (601,426) Cash flows from non-capital financing activities: Operating transfers in 347 Operating transfers out (100,000) (100,000) (150,000) Net cash flows from non-capital financing activities: 0 (100,000) (100,000) (149,653) _ Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (498,186) (498,186) (1,157,875) - Proceeds from sale of revenue bonds 620,000 620,000 1,615,000 Principal paid on revenue bonds (35,000) (35,000) Interest and paying agent fees on revenue bonds (131,761) (131,761) (148,449) Net cash flows from capital and related financing activities (44,947) 0 (44,947) 308,676 See Accompanying Notes to Financial Statements 30 Exhibit A-5 Continued CITY OF FRIDLEY. MINNESOTA COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES(CONTINUED] Year Ended December 31. 1992 With Comparative Totals for Year Ended December 31, 1991 Proprietary Fund Types Totals Internal (Memorandum Only) Enterprise Service 1992 1991 sash flows from investing activities: Purchase of investment securities (4,277,999) (4,277,999) Proceeds from sale of investment securities 3,621,077 3,621,077 Interest on investments 480,288 213,163 • 693,451 745,991 Interest received from MWCC 8,099 8,099 8,748 Net cash flows from investing activities (168,535) 213,163 44,628 754,739 .Jet increase(decrease) in cash and cash equivalents (140,845) 1,103,215 962,370 312,336 cash and cash equivalents-January 1 2,295,484 90,535 2,386,019 2,073,683 flash and cash equivalents-December 31 $2,154,639 $1,193,750 $3,348,389 $2,386,019 .Jon-cash investing, capital and financing activities: _ System assets of$11,925 were contributed by the Capital Projects Special Assessment Fund to the Public Utility Enterprise Fund in 1992. A receivable for sewer availability charge credits from the Metropolitan Waste Control Commission, in the amount of$167,300, was recognized in the Public Utility Enterprise Fund in 1992. See Accompanying Notes to Financial Statements 31 CITY OF FRIDLEY. MINNESOTA ,_ NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1992 1. Summary of Significant Accountings 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. Blended Component Unit - The Fridley Housing and Redevelopment Authority (HRA) is governed by commissioners appointed by the Fridley City Council. Although it is legally separate from the City, the HRA is reported as if it were a part of the City because its sole purpose is to provide housing and redevelopment assistance to the City's residents. The majority of funding for the various programs administered by the HRA is provided through the issuance of general obligation tax increment bonds guaranteed by the City. 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 Police and Volunteer Firefighters Relief Associations - These associations are organized as non-profit 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 Notes 9 and 10 for disclosures relating to the pension plans operated by these organizations.) -- 32 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1992 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 projects 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. 33 — CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1992 1. Summary of Significant Accounting Policies (Continued). >-B. Fund Accounting — 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. The 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. 34 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1992 1. Summary of Significant Accounting Policies (Continued) C. Measurement Focus (Continued) 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. 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 increases (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 measurable 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. 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. 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. 35 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1992 1. Summary of Significant Accounting Policies (Continued) — E. Budgets and Budgetary Accounting (Continued) 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 approved transfers. The City Charter limits appropriations to the total estimated revenues and fund balances. If actual revenues exceed the original estimates, appropriations may be increased by the Council up to the amount of revenue increases. There were no supplemental appropriations required or made during the year. 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. Formal budgetary integration is employed as a management control device during the year for the General Fund, Special Revenue Funds and Capital Improvement Capital ._ Projects Funds. Formal budgetary integration is not employed for Debt Service Funds because effective budgetary control is achieved through the bond indenture provisions. Budgetary control for other Capital Projects Funds is accomplished through the use of — project controls. 8. 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. — 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. 36 • CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1992 1. Summary of Significant Accounting Policies (Continued) F. Assets, Liabilities and Fund Equity (Continued) 1) Cash and Cash Equivalents, and Investments (Continued) The City provides temporary advances to funds that have insufficient cash balances by means of an advance from the internal service funds. This is classified as an interfund payable in the fund receiving the advance and as an offsetting interfund receivable in the internal service funds. 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 1992 taxes were adjusted downward $28,502 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. 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 37 • CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1992 — 1. Summary of Significant Accounting Policies (Continued) — F. Assets, Liabilities and Fund Equity (Continued) 2) Receivables (Continued) Special Assessments Receivable (Continued) 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. 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. 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 — 38 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1992 1. Summary of Significant Accounting Policies (Continued) F. Assets, Liabilities and Fund Equity (Continued) 4) Property and Equipment/General Fixed Assets (Continued) 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 16.) 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 approved leaves by employee. 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. 39 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED), DECEMBER 31. 1992 1. Summary of Significant Accounting Policies (Continued), ._ G. Revenues, Expenditures and Expenses (Continued) Interest Revenue on Special Assessments Receivable- Interest revenue is recognized in the year of collection of the current principal installment. 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 uncollectibies as delinquent accounts are certified as a special assessment lien against the property billed. Unbilied 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 changes in financial position in conformity with generally accepted accounting principles. Interfund eliminations have not been made in the aggregation of this data Cash Flows Statements The Governmental Accounting Standards Board Statement No. 9 requires that governments include a statement of cash flows for proprietary and nonexpendable trust funds to replace the statement of changes in financial position as a basic financial statement. GASB statement No. 9 was effective for fiscal periods beginning after December 15, 1989 and accordingly its requirements have been incorporated in the accompanying financial statements. 40 CITY OF FRIDLEY. MINNESOTA _ NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1992 2. Deposits and Investments A. Deposits In accordance with applicable Minnesota Statues, the City maintains deposits at depository banks authorized by the City Council. All such depositories are members of the Federal Reserve System. Minnesota Statutes require that all deposits be protected by insurance, surety bond or collateral. If collateral is pledged as protection for the deposits, State Statues 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. Balances at December 31, 1992 are as follows: Bank Carrying Balances Amount 1) Insured or collateralized by securities held by the City or its agent in the City's name $1,182,252 $662,343 2) Collateralized with securities held by the pledging institution trust department in the City's name 0 0 3) Uncollateralized or collateralized with securities not in the City's name 0 0 Totals $1,182,252 $662,343 Categories 2 and 3 are not procedures that are authorized by Minnesota statutes. 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. 41 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1992 2. Deposits and Investments (Continued) — B. Investments (Continued) (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. 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 Category 1 securities consist of the various investment types shown below which are held by a trustee 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 securities $6,985,748 $ $6,985,748 $8,898,658 U.S. Government agencies or instrumentalities 30,673,913 30,673,913 29,859,368 Commercial paper 991,058 991,058 991,058 "" Repurchase agreements 3,037,879 3,037,879 3,037,879 $38,650,719 $3,037,879 — Investment in money market fund (at market) 279,675 279,675 — Investment in deferred compensation plan (at market) 4,067,826 4,067,826 Total investments $46,036,099 $47,134,464 42 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1992 2. DepOsIts and Investments (Continued) Cash and Cash Equivalents and Investments per accompanying financial statement: Cash and cash equivalents $3,379,233 Investments 39,256,134 Total $42,635,367 —. 3. Special Assessments Receivable Special assessments receivable at December 31, 1992 are as follows: Special Special Assessment Assessment Capital General Debt Service Projects Total Unremitted $61 $23,595 $443 $24,099 Delinquent 7,955 114,070 4,196 126,221 Deferred 3,045 2,459,873 31,541 2,494,459 Total $11,061 $2,597,538 $36,180 $2,644,779 43 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED). DECEMBER 31. 1992 — 4. Due From Other Governments — Amounts due from other governments at December 31, 1992 are as follows: General Fund: State of Minnesota: a) State Aid Mainenance $20,010 a) Conference Refund 132 — Anoka County: a) Fines and Forfeits 18,146 b) Gas Reimbursement 306 — c) DWI Reimbursement 1,606 School District#16 3,975 City of Hilltop 9,349 — City of Columbia Heights Fire Department 213 School District#14 105 Total General Fund $53,842 Special Revenue Funds: State of Minnesota-Section 8 Housing $5,673 Anoka County: a) Community Development Block Grant 10,109 — b) Recycling 24,166 c) Drug Forfeiture 1,502 Total Special Revenue Funds $41,450 — Capital Project Funds: Anoka County-County's share of project costs $37,830 — Enterprise Funds: — Utility Funds: Metropolitan Waste Control Commission (MWCC)- Current portion of amounts due from MWCC 19,703 — City of Coon Rapids 171 $19,874 Non-current portion - long term receivable of amounts — due from MWCC $279,428 44 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1992 4. Due From Other Governments (Continued) The non-current receivable of $279,428 in the Utility Enterprise Fund is comprised of: 1. The balance due for the sale of the City's sewer interceptors is$161,836 (the interceptors were sold to the Metropolitan Waste Control Commission 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. 2. The amount of $6,292, which will be repaid with interest through 1998, is for advances made to the Commission during 1971 and 1972. 3. The credits for excess sewer availability charges of $111,300 arising from the change in use of various properties within the City. These credits will be offset against current availability charges as they occur. 5. Changes in General Fixed Assets A summary of changes in general fixed assets are as follows: Balance Balance Jan 1, 1992 Additions Deletions Dec 31, 1992 Land $2,101,614 $5,281 $1,220 $2,105,675 Buildings 4,515,210 278,306 26,020 4,767,496 Improvements other than buildings 15,454,342 511,720 47,982 15,918,080 Machinery and equipment 4,933,903 362,846 189,426 5,107,323 Construction in progress 308,748 1,087,222 345203 1,050,767 Total $27,313,817 $2,245,375 $609,851 $28,949,341 45 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1992 6. Summary of Proprietary Fund Property and Equipment — A summary of proprietary fund type property, plant and equipment at December 31, 1992 follows: Enterprise Public Liquor Utilities Total Land $66,961 $154,531 $221,492 — Buildings 178,897 1,523,661 1,702,558 Improvements other than buildings 86,759 4,686,774 4,773,533 — Machinery and equipment 236,228 2,252,849 2,489,077 Water and sewer lines 16,955,538 16,955,538 568,845 25,573,353 26,142,198 Less: Accumulated depreciation (255,414) (7,519,125) (7,774,539) Net property and equipment $313,431 $18,054,228 $18,367,659 7. Lona-Term Debt — The following is a summary of long-term debt transactions of the City for the year ended December 31, 1992: General Obligation Bonds Special Tax Water Construction Assessment Increment Revenue Loan Total Debt payable at January 1, 1992 $3,810,000 $12,290,000 $1,615,000 $ $17,715,000 — Debt issued 855,000 4,030,000 620,000 135,000 5,640,000 Debt retired (450,000) (265,000) (35,000) (750,000) Debt payable at December 31, 1992 $4,215,000 $16,055,000 $2,200,000 $135,000 $22,605,000 46 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1992 7. Long-Term Debt (Continued) Bonds payable at December 31, 1992 are comprised of the following individual issues (in thousands of dollars): General Long-Term Debt: $2,135,000 G.O. Special Assessment Bonds of 1972 due in annual installments of $50,000 through January 1, 1994; interest at 5.20% - 5.30% $ 50 $1,755,000 Special Assessment Bonds of 1980 due in varying annual installments of$25,000-$50,000 through February 1, 2001; interest at 7.50% - 8.40% 250 $1,425,000 Special Assessment Bonds of 1982 due in varying annual installments of$15,000-$90,000 through February 1, 1999; interest at 9.40% - 10.70% 210 $2,705,000 Refunding Improvement Bonds of 1986 due in varying annual installments of $180,000 - $290,000 through February 1, 2000; interest at 6.00% - 7.40% 1,910 $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% 2,540 $9,485,000 General Obligation Tax Increment Refunding Bonds of 1990 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 in varying annual installments of $35,000-$90,000 through February 1, 2005; interest at 5.6% - 6.6% 940 $855,000 General Obligation Special Assessment Bonds of 1992, Series A, due in annual installments of$50,000 to$95,000 through February 1, 2004; interest at 3.00% - 5.25% 855 $4,030,000 General Obligation Temporary Tax Increment Bonds of 1992, Series C, due on December 1, 1995; interest at 3.85% 4.030 Subtotal General Long-Term Debt 20.270 Water Revenue Bonds: $1,615,000 General Obligation Water Revenue Bonds of 1991 in varying 1,580 annual installments $35,000 - $140,000 through February 1, 2011; interest at 5.% - 6.8% $620,000 General Obligation Water Revenue Bonds of 1992, Series B, due in annual installments of $35,000 to $55,000 through February 1, 2007; interest at 3.0% to 5.7% 620 Subtotal Revenue Bonds 2.200 Total Bonds Payable 1.2_2_,470 47 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1992 7. Lona-Term Debt (Continued) — Construction Loan: $135,000 Locke Lake Dam Reconstruction loan from the State Department of Natural Resources in annual installments of$12,301 through April 1, 2012; — interest at 6.55% 135 — The Tax Increment Revenue Refunding Bonds are payable solely from increment revenue that is generated from the related increment district. 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 benefitted 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 Water Revenue Bonds are payable from the net revenues of the City's water system in addition to the general — obligation pledge. During 1992, the City issued three sets of General Obligation Bonds, The proceeds from the $855,000 General Obligation Special Assessment Bonds were used to finance various public improvements — completed and assessed. A portion of the proceeds, $212,635, will be used to call the remaining outstanding bonds from the$1,425,000 Special Assessment Bonds of 1980 on their next call date which is February 1, 1993. — The second issue, the $620,000 General Obligation Water Revenue Bonds, were issued to finance various improvements to the City's water system. In addition to the general obligation pledge, the net revenue of the City's water system are also pledged for the payment of debt service on these bonds. — The proceeds from the third bond issue, the $4,030,000 General Obligation Temporary Tax Increment Bonds, were used by the Housing and Redevelopment Authority to purchase the Lake Pointe property. The bonds will be repaid from the tax increments collected and the proceeds from the sale of the property. In addition to the bonds described above, the City received a $135,000 loan from the State of Minnesota to finance a portion of the reconstruction of the Locke Lake Dam. The loan is to be repaid in annual installments, including interest at 6.55% through April 1, 2012. 48 CITY OF FRIDLEY. MINNESOTA _ NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1992 7. Lona-Term Debt (Continued) Annual Requirements to Amortize Long Term Debt December 31, 1992 General Obligation Bonds Year Ending Special Water Locke Lake December 31 Assessment Redevelopment Revenue Dam Loan Total 1993 $692,707 $1,292,869 $168,092 $12,301 $2,165,969 1994 641,298 1,289,625 207,384 12,301 $2,150,608 1995 629,479 5,318,895 208,559 12,301 $6,169,234 1996 631,701 1,130,300 209,288 12,301 $1,983,590 1997 602,023 1,128,835 209,585 12,301 $1,952,744 1998-2002 2,083,129 5,178,535 1,042,196 61,505 $8,365,365 2003-2007 251,983 7,293,870 1,035,599 61,505 $8,642,957 2008-2012 2,806,700 582,080 61,501 $3,450,281 $5,532,320 $25,439,629 $3,662,783 $246,016 $34,880,748 $11,852,455 is available in the Debt Service Fund to service the Special Assessment and Redevelopment Bonds. $6,339,602 is available in the Water Fund, a component of the Public Utility Enterprise Funds, to service the Water Revenue Bonds. In 1990,the City advance refunded the$10,045,000 General Obligation Tax Increment Refunding Bonds of 1986 (1986 Bonds) by issuing the $9,485,000 General Obligation Tax Increment Refunding Bonds of 1990 (1990 Bonds). The proceeds of the 1990 Bonds were used by the City's escrow agent to acquire United States Treasury Securities-State and Local Govenment Series (SLGS) in amounts and maturities to match the debt payments on the 1986 Bonds until those bonds are called on February 1, 1994. As of December 31, 1992, the principal remaining on the 1986 Bonds is$8,095,000 while the assets held by the escrow agent totals $8,030,109. 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 State Statutes, the legal debt margin is 2% of the most recent market value less certain deductions. At December 31, 1992, the legal debt margin was $21,608,984. 49 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED). DECEMBER 31, 1992 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. 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, 1992, was $3,274,358 and $1,302,892, respectively; the City's total payroll was $5,776,079. 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 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 2.5 percent — of average salary for each of the first 25 years and 2 percent for each remaining year. 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. 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. 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 PEPEF 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. The actuary compares the actual contribution rate to a 'required' contribution rate. Current combined statutory contribution rates and actuarially required contribution rates for the plans are as follows: 50 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1992 8. Defined Benefit Pension Plans-Statewide (Continued) B. Contributions Required and Contributions Made (Continued) Statutory Rates: Required Employees Employer Rates • PERF: Basic& Coordinated plans 4.41% 4.74% 9.95% PEPFF 8.00% 12.00% 18.60% Total contributions made by the City during fiscal year 1992 were: Percentage of Amounts Covered Payroll Employees Employer Employees Employer PERF: Basic plan $28,001 $36,507 8.23% 10.73% Coordinated plan 124,114 131,449 4.23% 4.48% PEPFF 104,231 156,347 8.00% 12.00% Total $256,346 $324,303 The City's contribution for the year ended June 30, 1992, to the PERF represented .15 percent of total contributions required of all participating entities. For the PEPFF, contributions for the year ended June 30, 1992, represented .54 percent of total contributions required of all participating entities. 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, which is the actuarial present value of credited projected benefits, 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. PERA does not make separate measurements of assets and pension benefit obligation for individual employers. 51 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1992 8. Defined Benefit Pension Plans-Statewide (Continued), C. Funding Status and Progress (Continued) 1. Pension Benefit Obligation (Continued) — The pension benefit obligations of the PERA as of June 30, 1992, were as follows: Public Public Employees Employees Retirement Police& — Fund Fire (PERF) (in millions) (PEPFF) Total pension benefit obligations $4,868 $822 Net assets available for benefits, — at cost(Market values in millions) PERF=$4,068 PEPFF=$1,013 3,933 964 Unfunded(assets in excess of) pension benefit obligation $935 ($142) -_ — The measurement of the pension benefit obligation is based on an actuarial valuation as of June 30, 1992. Net assets available to pay pension benefits were valued as of June 30, 1992. -^ 2. Changes in Benefit Provisions Effective for the June 30, 1992, valuation, legislative activity since the last acturial — valuation resuled in some minor changes in benefit provision for the two funds. These changes did not have a significant impact on the PERF or the PEPFF. 52 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1992 8. Defined Benefit Pension Plans-Statewide (Continued) 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, 1992. 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, 1992, and for the fiscal year then ended, PERA held no securities issued by the City or other related parties. F. Federal insurance Contribution Act (Social Security) Approximately sixty (60%) percent of the permanent City employees are covered by Social Security. The 1992 contribution rate was 7.65% (6.2% is social security and 1.45% is medicare) up to a maximum in wages of$55,500 for Social Security and $130,200 for Medicare. The cost of Social Security for 1992 was $213,421. in addition, as of April 1, 1986 all newly hired or returning seasonal employees who are not covered by PERA and thus contributing to Social Security, must contribute 1.45% of their salary to Medicare with an equal match made by the - City. The 1992 cost for Medicare was $58,527. 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$5,776,079. 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 $74,130 and $74,238 in State Aid to the Association for 1992 and 1991 respectively. 53 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1992 10. Defined Benefit Pension Plan - Fridley Police Relief Association — A. Plan Description — The City contributes to the Fridley Police Relief Association (Association), a single-employer public employee retirement system that acts as a common investment and administrator for the City's police officers. The City's payroll for employees covered by the Association for the year ended December 31, 1992 was $312,768; the City's total payroll was $5,776,079. — Police officers of the City hired prior to December 15, 1975, are members of the Association. Police officers hired after December 15, 1975 are members of the PERA Public Employees — Police and Fire Fund. Association members are entitled to the following benefits: Age 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 of 36/75 if no spouse is receiving. 54 CITY OF FRIDLEY, MINNESOTA _ NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1992 10. Defined Benefit Pension Plan - Fridley Police Relief Association (Continued) A. Plan Description (Continued) 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. Post-Retirement Adlustment ('Escalator'), Each time base pay is changed, payments to all benefit recipients are simultaneously changed by the same percent that base pay is changed. (Exception - For members on age and service retirement with less than 20 years service, the maximum increase is 3% compounded annually. Also, applies to survivors of these retirants). Police officers who are members of the Association are required to pay 8 percent of their base pay to the Association; 75 percent of the member's contribution is refundable, without interest, if no benefit is payable upon separation of service. The City makes annual contributions to the relief association equal to the amount required by state statutes. 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 (i) help users assess the plan's funding status on a going-concern basis. (ii) assess progress being _ made in accumulating sufficient assets to pay benefits when due, and (iii) allow for comparisons among public employees retirement plans. The measure is independent of the actuarial funding method used to determine contributions to the plan. The pension benefit obligation was determined as part of an actuarial valuation of the plan as of December 31, 1992. 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 5.0% per year compounded annually, (b) projected salary increases of 3.5% per year compounded annually, attributable to inflation, and (c)the assumption that benefits will increase 3.5% per year after retirement. 55 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31. 1992 10. Defined Benefit Pension Plan - Fridley Police Relief Association (Continued) — B. Funding Status and Progress (Continued) As of December 31, 1992, 1991 and 1990, (actuarial valuation dates), the unfunded pension benefit obligation was determined as follows: 1992 1991 1990 Pension Benefit Obligation: Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits $5,648,796 $5,318,532 $5,248,980 Current employees— Accumulated employee contributions including — allocated investment income 306,998 322,209 295,542 Employer financed 1,297,693 1,481,255 1,384,248 Total Pension Benefit Obligation $7,253,487 $7,121,996 $6,928,770 Net assets available for benefits, at cost — (market value was$5,861,250 for 1990, $6,520,920 for 19991and$7,058,758 for 1992) 6,824,845 6,186,418 5,728,808 Unfunded Pension Benefit Obligation $428,642 $935,578 $1,199,962 Net assets available/Pension benefit obligation 94.09% 86.86% 82.68% — Unfunded pension benefit obligation/ Annual covered payroll 137.00% 273.88% 359.10% Employer contributions/Annual covered payroll 66.13% 47.77% 45.40% — No changes in actuarial assumptions or benefit provisions that would significantly affect the valuation of the pension benefit obligation occurred during 1992. 56 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1992 10. Defined Benefit Pension Plan - Fridley Police Relief Association (Continued) C. Contributions Required and Contributions Made Financial requirements of the Association are determined on an actuarial basis using the entry age normal actuarial cost method. Normal cost is funded on a current basis. The unfunded actuarial accrued liability is to be funded by December 31, 2010. The City's minimum obligation is the financial requirement for the year less anticipated member contributions and state aids. Any additional payments by the City shall be used to amortize the unfunded liability of the Association. The funding strategy for normal cost and the unfunded actuarial accrued liability should provide sufficient resources to pay Association benefits on a timely basis. Total contributions to the Association in 1992 amounted to $220,312, of which $30,471 and $25,969 were made by the City and its police officers respectively and of which $163,872 was state aid received by the City and remitted to the Association. The contributed amounts were actuarially determined as described above and were equal to the contribution requirements determined by an actuarial valuation of the plan as of December 31, 1990. The contributions represent funding for normal cost of $59,125 and the amortization of the unfunded actuarial accrued liability of $161,187. Contributions made by the City, state and its police officers represent 9.7 percent, 52.4 percent and 8.3 percent, respectively, of covered payroll for the year. -- Significant actuarial assumptions used to compute pension contribution requirements are substantially the same as those to determine the standardized measure of the pension obligation. The computation of the pension contribution requirements for 1992 was based on the same actuarial assumptions, benefit provision, actuarial funding method, and other significant factors used to determine pension contribution requirements in previous years. The contribution requirements based on the December 31, 1992 actuarial valuation and effective January 1, 1994 are $38,512 to amortize the unfunded actuarial accrued liability and $136,763 of employer contributions for normal costs. 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. 57 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED), DECEMBER 31, 1992 11. Interfund Receivables and Payables Interfund receivables and payables at December 31, 1992 are as follows: Interfund Interfund Receivables Payables Due From/Due To: General Fund $13,883 $847,466 Special Revenue Funds HRA Reimbursement Fund 1,613 1,584 — Debt Service Funds Special Assessment Fund 21,588 Capital Projects Funds — Capital Improvement Fund 11,904 Speical Assessment Fund 624,428 HRA Fund 21,588 1 8,929 — Enterprise Funds Public Utility Fund 3,432 Internal Service Funds — Employee Benefits Fund 1,245,576 Self Insurance Fund 239,807 — $1,525,899 $1,525,899 58 CITY OF FRIDLEY. MINNESOTA _ NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1992 12. Reserved Fund Balances/Retained Earnings The following reservations have been made of various fund balances/retained earnings at December 31, 1992. Fund Balance General Fund Reserved for: Encumbrances $98,240 Inventory 26,428 Prepaid items 47,694 $172,362 Debt Service Funds Reserved for Debt Service $3,538,227 Capital Projects Funds Reserved for: Encumbrances 79,474 Construction 7,502,883 $7,582,357 Total Governmental Funds $11,292,946 Retained Earnings Enterprise Funds Public Utilities Funds Reserved for capital outlay $2,499,895 Reserved for construction 611,291 Total Enterprise Funds $3,111,186 Internal Service Funds Employee Benefits Fund Reserved for employee benefits 279,605 Self-Insurance Fund Reserved for contingencies 416,775 Total Internal Service Funds $696,380 Total Proprietary Funds $3,807,566 59 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31, 1992 13. Designated Fund Balance — The following designations have been made of various fund balances at December 31, 1992: General Fund: Working Capital $3,029,348 Subsequent Year's Expenditures 308,160 Contingencies 908,366 Replacement of Fixed Assets 523,887 Total General Fund 4,769,761 Special Revenue Funds: Cable TV Fund- -' Subsequent Year's Expenditures 3,293 Cable TV Program 118,243 Grant Management Fund- — Subsequent Year's Expenditures 368 Solid Waste Abatement Fund Solid Waste Abatement 37,648 Drug and Gambling Forfeiture Fund Drug and Gambling Enforcement 14,960 Total Special Revenue Funds 174,512 — Capital Projects Funds: Capital Improvement Fund- — Replacement of Fixed Assets 1,798,084 Park Improvement 934,493 Street Improvements 5,442,419 — Total Capital Project Fund 8,174,996 Total of Designated Fund Balances $13,119,269 — 14. Contributed Capital A reconciliation of contributed capital is as follows: Public Utility Self Insurance — Enterprise Fund Internal Service Fund Balance January 1 $12,581,903 $1,000,000 Increases Current capital contributions 11,925 Decreases Depreciation of contributed — assets (336,604) Loss on disposition of contributed assets (672) Balance December 31 $12,256,552 $1,000,000 60 CITY OF FRIDLEY, MINNESOTA _ NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1992 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, 1992 is as follows: Total Enterprise Liquor Utility Funds Sales(less cost of sales of$2,244,851) $603,373 $ $603,373 Operating revenues 3,111,284 3,111,284 Operating expenses (494,117) (3,764,686) (4,258,803) Operating income(loss) 109,256 (653,402) (544,146) — Non-operating revenues (expenses)-net 52,966 313,050 366,016 Income(loss)before extraordinary item 162,222 (340,352) (178,130) Extraordinary gain on issuance of sewer availability charge credits 167,300 167,300 Net income(loss) $162,222 ($173,052) ($10,830) Depreciation expense included in operating expenses $23,933 $570,075 $594,008 Property and equipment- - Additions 17,329 492,782 510,111 Deletions 10,703 44,723 55,426 Working capital 961,421 5,732,868 6,694,289 Total assets 1,443,991 25,102,760 26,546,751 Fund equity- Contributed capital 12,256,552 12,256,552 Retained earnings 1,274,852 10,266,263 11,541,115 Total fund equity $1,274,852 $22,522,815 $23,797,667 Current capital contributions $11,925 $11,925 Bonds payable $2,200,000 $2,200,000 61 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1992 16. 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 plan, 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 the City's 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 are $4,067,826 stated at market on December 31, 1992 and are shown in the financial statements as 'Other assets' in the agency funds with a corresponding credit to 'Deposits payable'. 17. Litigation The City had the usual and customary type of miscellaneous claims pending at year-end, mostly of a minor nature and usually all covered by insurance carried for that purpose. At the present time, there is no significant litigation pending not covered by the City's insurance. 18. Leases The City leases the property at 214 Mississippi from the Fridley Housing and Redevelopment Authority — for a warehouse liquor store. The City and Housing and Redevelopment Authority have a lease with one year options. Rental expense is $21,250 annually. 19. Deficit Balances The following fund had a deficit balance at December 31, 1992: Capital Project Funds: Special Assessments $(266,479) This deficit balance will be funded by a future General Obligation Improvement Bond Issue. • 62 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED), -' DECEMBER 31. 1992 20. 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 $251,798 $869,315 $617,517 $0 $617,517 1981 2 71,077 838,514 767,437 0 767,437 1982 3 244,534 1,472,246 1,227,712 275,561 952,151 1983 4 105,308 138,794 33,486 0 33,486 1984 5 48,101 40,186 0 0 0 1985 6 137,028 172,546 35,518 0 35,518 1986 7 10,960 85,899 74,939 0 74,939 1986 8 26,742 35,989 9,247 0 9,247 1989 9 970,180 978,368 8,188 0 8,188 1990 10 20,938 4,888 0 0 0 1991 11 63,148 100,992 37,844 0 37,844 1992 12 110,573 109,342 0 0 0 $2,060,387 $4,847,079 $2,811,888 $275,561 $2,536,327 All debt issued is pooled debt. Total bonds issued is $42,605,000. Total amount of bonds ... redeemed is $26,550,000. Outstanding bonds at December 31, 1992, is $16,050,000. All taxable value is currently retained by the Housing and Redevelopment Authority. 21. Gain on Issuance of Sewer Availability Charge Credits In order to finance additions to the metropolitan area sewage disposal system,the Metropolitan Waste Control Commission (MWCC) requires cities to collect and remit a sewer availability charge as a property connects to the system. Credits are issued to a city when a property changes uses and generates less sewage. During 1992, MWCC determined that it owed the City $167,500 in such credits. These credits will be used to offset future availability collections by the City. 22. Restatement of Prior Years For the year ended December 31, 1992, the City implemented Statement 16 of the Government Accounting Standards Board, which resulted in recording as a liability the employer's share of Medicare and Social Security. The financial statements for the year ended December 31, 1991 have been restated to reflect this new accounting standard. The effect of this change was to increase Internal Service Fund liabilities and expenses in 1991 by $58,277. 23. Subsequent Event On February 1, 1993, the City redeemed the Special Assessment Bonds of 1980 by exercising the call provision contained in the bond resolution. The call of the remaining $250,000 was funded by a portion of the proceeds from the General Obligation Special Assessment Bonds of 1992, Series A. 63 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. CITY OF FRIDLEY, MINNESOTA Exhibit B-1 _ GENERAL FUND COMPARATIVE BALANCE SHEET December 31, 1992 and 1991 1992 1991 Assets Cash and cash equivalents $330 $330 Investments 6,216,612 6,902,800 Receivables: Accounts 15,475 7,551 Taxes- - Unremitted 25,184 102,791 Delinquent 390,263 312,440 Special Assessments- Unremitted 61 823 - Delinquent 7,955 10,097 Deferred 3,045 3,685 Interest 1,094,432 929,005 - Loans 6,300 Developer note 137,730 Due from other governments 53,842 48,649 - Due from other funds 13,883 14,125 Inventories, at cost 26,428 22,975 Prepaid items 47,694 48,171 Total assets $8,039,234 $8,403,442 Liabilities and Fund Balance Liabilities: Accounts payable $155,075 $138,253 Deposits payable 500 1,560 Salaries payable 115,482 55,340 Deferred revenue 545,294 326,222 "' Due to other governments 9,710 1,715 Due to other funds 847,466 1,776,756 Total liabilities 1,673,527 2,299,846 Fund balance: Reserved for encumbrances 98,240 260,285 Reserved for inventory 26,428 22,976 Reserved for prepaid items 47,694 48,171 Unreserved- Designated for working capital 3,029,348 3,113,463 - Designated for contingencies 908,366 887,140 Designated for subsequent year's expenditures 308,160 487,437 Designated for fixed asset replacement 523,887 519,052 Undesignated 1,423,584 765,072 Total fund balance 6,365,707 6,103,596 Total liabilities and fund balance $8,039,234 $8,403,442 65 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. 1992 With Comparative Actual Amounts for Year Ended December 31, 1991 1992 -- Variance Favorable 1991 Budget Actual (Unfavorable) Actual Revenues: Taxes $3,676,685 $3,590,062 ($86,623) $3,704,876 Special assessments 1,312 3,524 2,212 2,166 - Licenses and permits 329,708 317,243 (12,465) 342,713 Intergovernmental revenue 2,843,509 3,053,759 210,250 2,820,558 Charges for services 715,191 745,212 30,021 693,661 Fines and forfeits 260,000 228,505 (31,495) 238,906 Interest on investments 275,000 480,912 205,912 521,352 Miscellaneous 92,323 142,939 50,616 124,656 Total revenues 8,193,728 8,562,156 y 368,428 8,448,888 - Expenditures: - Current- General government 1,646,675 1,531,365 115,310 1,498,935 Public safety 3,358,576 3,312,190 46,386 3,233,501 Civic center 179,054 172,664 6,390 165,968 - Public works 2,163,445 2,088,263 75,182 2,031,122 Community development 415,149 378,690 36,459 422,381 Recreation and naturalist 737,778 702,421 35,357 655,985 - Reserve for contingency 147,369 147,369 Capital outlay 418,744 355,337 63,407 381,469 Total expenditures 9,066,790 8,540,930 525,860 8,389,361 - Excess(deficiency)of revenues over expenditures (873,062) 21,226 894,288 59,527 Other financing sources(uses): Operating transfers in 210,938 210,938 370,700 Operating transfers out (20,823) - Total other financing sources(uses) 210,938 210,938 0 349,877 Deficiency of revenues and - other financing sources over expenditures and other financing uses (662,124) 232,164 894,288 409,404 - Fund balance January 1 6,103,596 6,103,596 5,694,192 Residual Equity Transfers in(out) 29,947 29,947 - Fund balance December 31 $5,441,472 $6,365,707 $924,235 $6,103,596 66 Exhibit B-3 - CITY OF FRIDLEY. MINNESOTA, GENERAL FUND SCHEDULE OF REVENUES AND OTHER FINANCING SOURCES-BUDGET AND ACTUAL - Year Ended December 31, 1992 With Comparative Actual Amounts for Year Ended December 31, 1991 1992 Variance - Favorable 1991 Budget Actual (Unfavorable) Actual - Taxes and special assessments: Current ad valorem taxes $3,598,640 $3,531,381 ($67,259) $3,681,556 Delinquent ad valorem taxes 45,000 34,847 (10,153) 7,822 - Penalties and interest 27,636 22,926 (4,710) 11,030 Forfeited sale-taxes 5,409 908 (4,501) 4,468 Special assessments 1,312 3,524 2,212 2,166 _ Total taxes and special assessments 3,677,997 3,593,586 (84,411) 3,707,042 Licenses and permits: - Licenses- Contractor 18,530 13,264 (5,266) 18,705 Business 71,454 78,015 6,561 77,943 All other 33,849 32,167 (1,682) 31,271 Permits 205,875 193,797 (12,078) 214,794 Total licenses and permits 329,708 317,243 (12,465) 342,713 - Intergovernmental revenue: Civil defense 5,620 5,703 83 5,545 - State maintenance aid 168,778 200,115 31,337 186,278 State credits 947,971 953,473 5,502 856,066 Local government aid 1,478,960 1,604,858 125,898 1,506,376 -- Other state grants 6,000 31,690 25,690 31,600 Police and fire pension 230,820 238,055 7,235 231,666 Other 5,360 19,865 14,505 3,027 - Total intergovernmental revenue 2,843,509 3,053,759 210,250 2,820,558 Charges for services: - General government 512,884 543,608 30,724 477,885 Public safety 52,786 49,512 (3,274) 67,929 Conservation of health 2,371 2,482 111 2,370 - Recreation 147,150 149,610 2,460 145,477 Total charges for services 715,191 745,212 30,021 693,661 - Fine and forfeits 260,000 228,505 (31,495) 238,906 Interest on investments 275,000 480,912 205,912 521,352 67 Exhibit B-3 Continued CITY OF FRIDLEY. MINNESOTA GENERAL FUND - SCHEDULE OF REVENUES AND OTHER FINANCING SOURCES- BUDGET AND ACTUAL Year Ended December 31, 1992 With Comparative Actual Amounts for Year Ended December 31, 1991 - 1992 - Variance Favorable 1991 Budget Actual (Unfavorable) Actual - Miscellaneous revenue: Rent income $5,600 $5,327 ($273) $5,186 - Sale of property 15,423 22,299 6,876 27,404 Donations 14,125 27,636 13,511 25,918 Miscellaneous refunds 57,175 87,677 30,502 66,148 _ Total miscellaneous revenue 92,323 142,939 50,616 124,656 Total revenues 8,193,728 8,562,156 368,428 8,448,888 Other financing sources: Operating transfers in- Employee Benefit Fund 100,000 100,000 100,000 - Special Assessment Encumbrance Fund 13,530 Liquor Fund 50,000 Cable TV Fund 5,000 - IRDB Deposit Fund 10,393 10,393 9,898 Special Assessment Debt Service Fund 100,545 100,545 192,272 Total other financing sources 210,938 210,938 0 370,700 - Total revenues and other financing sources $8,404,666 $8,773,094 $368,428 $8,819,588 -- 68 Exhibit B-4 CITY OF FRIDLEY. MINNESOTA GENERAL FUND, - SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES-BUDGET AND ACTUAL Year Ended December 31. 1992 With Comparative Actual Amounts for Year Ended December 31, 1991 - 1992 Variance Favorable 1991 Budget Actual (Unfavorable) Actual General government: - Mayor and Council- Personal services $49,639 $49,569 $70 $49,128 Supplies and other charges 55,178 43,552 11,626 41,577 104,817 93,121 11,696 90,705 Planning commission- Supplies and other charges 3,829 597 3,232 572 - 3,829 597 3,232 572 Other commissions- - Supplies and other charges 5,586 1,789 3,797 16,065 5,586 1,789 3,797 16,065 - City manager- Personal services 240,607 238,274 2,333 225,586 Supplies and other charges 47,774 42,583 5,191 43,367 288,381 280,857 7,524 268,953 Personnel- Personal services 69,081 69,081 62,575 _ Supplies and other charges 13,103 13,103 10,363 82,184 82,184 0 72,938 Legal- Supplies and other charges 168,000 159,828 8,172 169,696 168,000 159,828 8,172 169,696 Elections- Personal services 37,678 22,126 15,552 2,072 -- Supplies and other charges 8,386 3,581 4,805 1,151 46,064 25,707 20,357 3,223 - (Continued) 69 - Exhibit B-4 Continued CITY OF FRIDLEY, MINNESOTA GENERAL FUND SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES- BUDGET AND ACTUAL - Year Ended December 31. 1992 With Comparative Actual Amounts for Year Ended December 31, 1991 1992 Variance Favorable 1991 - Budget Actual (Unfavorable) Actual General government(continued): Accounting- - Personal services $430,084 $419,397 10,687 $430,112 Supplies and other charges 81,166 80,439 727 48,376 511,250 499,836 11,414 478,488 - Assessing- Personal services 141,208 135,295 5,913 134,454 - Supplies and other charges 15,687 9,709 5,978 15,110 156,895 145,004 11,891 149,564 MIS- Personal services 94,075 94,075 92,088 Supplies and other charges 62,455 48,387 14,068 61,388 - 156,530 142,462 14,068 153,476 City clerk/records- _ Personal services 78,614 75,104 3,510 73,210 Supplies and other charges 8,666 6,057 2,609 5,796 87,280 81,161 6,119 79,006 - Nondepartmental- Personal services 1,009 1,009 4,837 Supplies and other charges 34,850 17,810 17,040 11,412 - 35,859 18,819 17,040 16,249 Total general government 1,646,675 1,531,365 115,310 1,498,935 (Continued) 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, 1992 With Comparative Actual Amounts for Year Ended December 31, 1991 - 1992 Variance - Favorable 1991 Budget Actual (Unfavorable) Actual Public safety: -- Police- Personal services $2,423,340 $2,421,627 $1,713 $2,339,423 Supplies and other charges 261,138 261,138 258,432 - 2,684,478 2,682,765 1,713 2,597,855 Fire- - Personal services 568,349 524,455 43,894 527,377 Supplies and other charges 97,397 97,397 100,181 665,746 621,852 43,894 627,558 Civil defense- Supplies and other charges 8,352 7,573 779 8,088 8,352 7,573 779 8,088 Total public safety 3,358,576 3,312,190 46,386 3,233,501 Municipal center: _ Personal services 25,269 25,269 22,738 Supplies and other charges 153,785 147,395 6,390 143,230 Total municipal center 179,054 172,664 6,390 165,968 Public works: _ Engineering- Personal services 358,676 344,128 14,548 348,811 Supplies and other charges 30,964 30,964 25,708 389,640 375,092 14,548 374,519 - Public works and Parks: Personal services 1,042,363 994,217 48,146 996,402 - Supplies and other charges 731,442 718,954 12,488 660,201 1,773,805 1,713,171 60,634 1,656,603 - Total public works 2,163,445 2,088,263 75,182 2,031,122 - (Continued) 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. 1992 With Comparative Actual Amounts for Year Ended December 31, 1991 1992 Variance Favorable 1991 - Budget Actual (Unfavorable) Actual Community Development: - Building inspection Personal services $136,297 $116,962 $19,335 $133,316 Supplies and other charges 47,446 40,909 6,537 37,710 - 183,743 157,871 25,872 171,026 Planning- - Personal services 202,704 194,798 7,906 224,415 Supplies and other charges 28,702 26,021 2,681 26,940 231,406 220,819 10,587 251,355 Total community development 415,149 378,690 36,459 422,381 Recreation and Naturalist: Recreation- Personal services 371,647 365,179 6,468 339,866 Supplies and other charges 134,994 116,661 18,333 104,775 - 506,641 481,840 24,801 444,641 Naturalist- -Personal services 169,662 162,889 6,773 155,196 Supplies and other charges 61,475 57,692 3,783 56,148 231,137 220,581 10,556 211,344 - Total recreation and naturalist 737,778 702,421 35,357 655,985 Reserve for contingency- 147,369 147,369 - (Continued) 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, 1992 With Comparative Actual Amounts for Year Ended December 31, 1991 - 1992 Variance Favorable 1991 Budget Actual (Unfavorable) Actual - Capital outlay expenditures- City council $2,500 $ $2,500 $ City manager 2,250 1,649 601 1,608 - Accounting 3,990 Assessing 500 500 Elections 416 416 416 - MIS 23,860 17,653 6,207 227,084 City clerk/Records 525 525 469 Police 110,512 99,604 10,908 4,467 Fire 52,540 51,055 1,485 4,172 Civil defense 350 350 Municipal center 4,234 4,225 9 4,591 Building inspection 15,000 15,000 627 � ' Planning 2,000 1,649 351 Engineering 63,000 46,711 16,289 10,528 Public works 121,140 117,347 3,793 119,405 - Naturalist 8,973 7,987 986 2,089 Recreation 10,944 7,457 3,487 2,023 Total capital outlay 418,744 355,337 63,407 381,469 - Total expenditures 9,066,790 8,540,930 525,860 8,389,361 - Other financing uses: Operating transfers out- Capital Improvement Fund 20,823 - Total other financing uses 0 0 0 20,823 Total expenditures and other financing uses $9,066,790 $8,540,930 $525,860 $8,410,184 73 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. CITY OF FRIDLEY. MINNESOTA SPECIAL REVENUE FUNDS, — COMBINING BALANCE SHEET December 31, 1992 With Comparative Totals for December 31, 1991 Solid Waste — Cable Grant Abatement TV Management Fund Assets Cash and cash equivalents $10,000 $ $ _, Investments 109,193 240,114 16,089 Accounts receivable 21,531 661 5,343 Due from other funds Due from other governments 15,782 24,166 Total assets $140,724 $256,557 $45,598 Liabilities and Fund Balance Liabilities: Accounts payable $9,188 $255,492 $7,950 Deposits payable 10,000 — Salaries payable 697 Due to other funds Due to other governments Total liabilities 19,188 256,189 7,950 Fund balance: Reserved for encumbrances Unreserved- Designated for subsequent — year's expenditures 3,293 368 Designated for special revenue programs 118,243 37,648 Total fund balance 121,536 368 37,648 — Total liabilities and fund balance $140,724 $256,557 $45,598 .. 76 Exhibit C-1 Drug& Gambling HRA Forfeiture Totals Reimbursement Fund 1992 1991 $ $ $10,000 $10,000 - 13,980 379,376 114,111 27,535 26,079 1,613 1,613 2,958 "' 1,502 41,450 38,266 $1,613 $15,482 $459,974 $191,414 $29 $490 $273,149 $22,362 10,000 10,000 697 360 1,584 1,584 25,535 -- 32 32 1,613 522 285,462 58,257 955 3,661 5,135 14,960 170,851 127,067 - 0 14,960 174,512 133,157 - $1,613 $15,482 $459,974 $191,414 77 CITY OF FRIDLEY. MINNESOTA SPECIAL REVENUE FUNDS, COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Year Ended December 31. 1992 With Comparative Totals for Year Ended December 31, 1991 Solid Waste Cable Grant Abatement — TV Management Fund Revenues: Charges for services $ $ $88,988 — Fines and forfeits Licenses and permits 84,475 Intergovernmental revenue 411,907 52,358 Interest on investments 9,981 — Miscellaneous 189 Total revenues 94,456 412,096 141,346 Expenditures: Current- General government 83,026 323,497 152,347 — Public safety Capital outlay 2,804 88,900 Total expenditures 85,830 412,397 152,347 Excess(deficiency)of revenues over expenditures 8,626 (301) (11,001) Other financing sources(uses): Operating transfers in 40,589 Total other financing(uses) 0 0 40,589 Excess(deficiency)of revenues — over expenditures and other financing uses 8,626 (301) 29,588 — Fund balance January 1 $112,910 $669 $8,060 Fund balance December 31 $121,536 $368 $37,648 78 Exhibit C-2 Drug& Gambling HRA Forfeiture Totals Reimbursement Fund 1992 1991 _ $ $ $88,988 $91,301 11,375 11,375 47,253 84,475 82,310 49,938 514,203 307,061 9,981 8,402 189 816 49,938 11,375 709,211 537,143 49,938 608,808 370,763 7,933 7,933 35,735 91,704 80,715 49,938 7,933 708,445 487,213 3,442 766 49,930 �- 40,589 (5,000) 0 0 40,589 (5,000) 3,442 41,355 44,930 $0 $11,518 $133,157 $88,227 $0 $14,960 $174,512 $133,157 79 Exhibit C-3 — CITY OF FRIDLEY. MINNESOTA CABLE TV SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET _ December 31, 1992 and 1991 1992 1991 — Assets Cash and cash equivalents $10,000 $10,000 Investments 109,193 101,734 Accounts receivable 21,531 20,113 — Total assets $140,724 $131,847 Liabilities and Fund Balance Liabilities: Accounts payable $9,188 $8,937 Deposits payable 10,000 10,000 — Salaries payable Total liabilities 19,188 18,937 Fund balance: Reserved for encumbrances 955 Unreserved- — Designated for subsequent year's expenditures 3,293 4,466 Designated for cable TV program 118,243 107,489 Total fund balance 121,536 112,910 _ Total liabilities and fund balance $140,724 $131,847 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, 1992 With Comparative Amounts for Year Ended December 31, 1991 - 1992 Variance Favorable 1991 Budget Actual (Unfavorable) Actual Revenues: - Licenses-franchise fee $98,957 $84,475 ($14,482) $82,310 Interest on investments 9,377 9,981 604 8,402 Total revenues 108,334 94,456 (13,878) 90,712 Expenditures: Current - General government- Personal services 37,756 34,701 3,055 11,225 Supplies and other charges 50,099 48,325 1,774 46,177 - Capital outlay 3,100 2,804 296 2,453 Total expenditures 90,955 85,830 5,125 59,855 - Excess(deficiency)of revenues over expenditures 17,379 8,626 (8,753) 30,857 - Other financing sources(uses): Operating transfers out (5,000) -- Excess(deficiency)of revenues over expenditures and other financing uses 17,379 8,626 (8,753) 25,857 Fund balance January 1 112,910 112,910 87,053 - Fund balance December 31 $130,289 $121,536 ($8,753) $112,910 81 ■ Exhibit C-5 CITY OF FRIDLEY, MINNESOTA — GRANT MANAGEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1992 and 1991 -- 1992 1991 -- Assets Investments $240,114 $ Accounts receivable 661 Due from other governments 15,782 18,904 — Total assets $256,557 $18,904 Liabilities and Fund Balance — Liabilities: Due to other funds $ $13,319 _ Accounts payable 255,492 4,556 Salaries payable 697 360 Total liabilities 256,189 18,235 Fund balance: Unreserved- _ Designated for subsequent year's expenditures 368 669 Total liabilities and fund balance $256,557 $18,904 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, 1992 With Comparative Amounts for Year Ended December 31, 1991 1992 Variance Favorable 1991 Budget Actual (Unfavorable) Actual Revenues: — Intergovernmental revenue- Federal $187,730 $152,572 ($35,158) $174,141 State 260,733 259,335 (1,398) 1,463 — Donations 189 189 Miscellaneous 675 Total revenues 448,463 412,096 (36,367) 176,279 Expenditures: Current General government- Personal services 46,801 43,321 3,480 36,827 Supplies and other charges 291,662 280,176 11,486 61,695 Capital outlay 110,000 88,900 21,100 78,262 Total expenditures 448,463 412,397 36,066 176,784 Excess(deficiency)of revenues over expenditures and other financing sources (301) (301) (505) Fund balance January 1 669 669 1,174 — Fund balance December 31 $669 $368 ($301) $669 83 Exhibit C-7 CITY OF FRIDLEY, MINNESOTA -- SOLID WASTE ABATEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1992 and 1991 -- 1992 1991 — Assets Investments $16,089 $ Accounts receivable $5,343 $5,966 Due from other governments 24,166 19,362 _ Total assets $45,598 $25,328 Liabilities and Fund Balance Liabilities: Due to other funds $ $9,716 Accounts payable 7,950 7,552 — Total liabilities 7,950 17,268 — Fund balance: Unreserved-designated for solid waste abatement 37,648 8,060 Total liabilities and fund balance $45,598 $25,328 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. 1992 With Comparative Amounts for Year Ended December 31, 1991 • 1992 Variance Favorable 1991 Budget Actual (Unfavorable) Actual - Revenues: Intergovernmental revenue- State $43,000 $52,358 $9,358 $82,178 - Charges for services 88,657 88,988 331 91,301 Miscellaneous 110 Total revenues 131,657 141,346 9,689 173,479 Expenditures: Current General government- Personal services 47,631 44,508 3,123 7,450 Supplies and other charges 124,615 107,839 16,776 158,079 Total expenditures 172,246 152,347 19,899 165,529 Excess of revenues over expenditures (40,589) (11,001) 29,588 8,060 Other financing sources(uses): _ Operating transfers in- Special Assessment Debt Service Fund 40,589 40,589 _ Excess(deficiency)of revenues and other financing sources over expenditures 29,588 29,588 _ Fund balance January 1 8,060 8,060 Fund balance December 31 $8,060 $37,648 $29,588 $8,060 85 Exhibit C-9 CITY OF FRIDLEY, MINNESOTA, — HRA REIMBURSEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1992 and 1991 — 1992 1991 — Assets Investments $ $594 Due from other funds 1,613 2,958 Total assets $1,613 $3,552 Liabilities and Fund Balance Liabilities: — Accounts payable $29 $1,052 Due to other funds 1,584 2,500 Total liabilities 1,613 3,552 — Fund balance: Unreserved-undesignated 0 0 — Total liabilities and fund balance $1,613 $3,552 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, 1992 With Comparative Amounts for Year Ended December 31, 1991 — 1992 — Variance Favorable 1991 Budget Actual (Unfavorable) Actual — Revenues: Intergovernmental revenue- — Housing Redevelopment Authority $49,938 $49,938 $ $49,279 Miscellaneous 31 Total revenues 49,938 49,938 0 49,310 Expenditures: Current — General government- Supplies and other charges 49,938 49,938 49,310 Total expenditures 49,938 49,938 0 49,310 Excess of revenues over expenditures 0 0 0 Fund balance January 1 0 0 0 — Fund balance December 31 $0 $0 $0 $0 87 Exhibit C-11 CITY OF FRIDLEY, MINNESOTA — DRUG AND GAMBLING FORFEITURE SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1992 and 1991 — 1992 1991 ._ Assets Investments $13,980 $11,783 Due from other governments 1,502 — Total assets $15,482 $11,783 Liabilities and Fund Balance Liabilities: — Accounts payable $490 $265 Due to other governments 32 Total liabilities $522 $265 — Fund balance: Unreserved-designated for drug and — gambling enforcement $14,960 $11,518 Total liabilities and fund balance $15,482 $11,783 — 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. 1992 With Comparative Amounts for Year Ended December 31, 1991 — 1992 — Variance Favorable 1991 Budget Actual (Unfavorable) Actual — Revenues: Fines and forfeits $11,375 $11,375 $ $47,253 Total revenues 11,375 11,375 0 47,253 Expenditures: — Current Public safety- Supplies and other charges 7,933 7,933 35,735 — Total expenditures 7,933 7,933 0 35,735 Excess of revenues over — expenditures 3,442 3,442 11,518 Fund balance January 1 11,518 11,518 Fund balance December 31 $14,960 $14,960 $0 $11,518 89 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 be benefited from such improvements. HRA 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 FUNDS COMBINING BALANCE SHEET December 31. 1992 With Comparative Totals for December 31, 1991 Special Totals Assessment HRA 1992 1991 Assets Cash and cash equivalents $ $ $ $419 Investments 11,445,159 413,175 11,858,334 11,150,930 Receivables: Special Assessments- — Unremitted 23,595 23,595 3,170 Delinquents 114,070 114,070 203,660 Deferred 2,459,873 2,459,873 2,716,679 Total assets $14,042,697 $413,175 $14,455,872 $14,074,858 Liabilities and Fund Balance _ Liabilities: Accounts payable $205 $7,681 $7,886 $419 Deferred revenue 2,573,943 2,573,943 2,920,572 _ Due to other funds 21,588 21,588 21,413 Total liabilities 2,595,736 7,681 2,603,417 2,942,404 Fund balance: Reserved for debt service 3,132,733 405,494 3,538,227 3,475,448 Unreserved- undesignated 8,314,228 8,314,228 7,657,006 Total fund balance 11,446,961 405,494 11,852,455 11,132,454 Total liabilities and fund balance $14,042,697 $413,175 $14,455,872 $14,074,858 91 Exhibit D-2 CITY OF FRIDLEY, MINNESOTA DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND — CHANGES IN FUND BALANCES, Year Ended December 31, 1992 With Comparative Totals for Year Ended December 31, 1991 — Special Totals Assessment HRA 1992 1991 — Revenues: Special assessments $528,603 $ $528,603 $770,576 Interest on investments 882,876 48,618 931,494 889,311 Total revenues 1,411,479 48,618 1,460,097 1,659,887 — Expenditures: Debt service- Principal retirement 450,000 265,000 715,000 685,000 Interest and fiscal charges 260,818 908,507 1,169,325 1,181,305 Total expenditures 710,818 1,173,507 1,884,325 1,866,305 — Excess(deficiency)of revenues over expenditures 700,661 (1,124,889) (424,228) (206,418) — Other financing sources(uses): — Operating transfers in (out)- Bond Proceeds 240,509 4,026,172 4,266,681 31,363 HRA Capital Projects Fund (2,969,393) (2,969,393) 1,081,374 General Fund (100,545) (100,545) (192,272) — Public Utility Fund (347) Special Assessment Capital Projects Fund (11,925) (11,925) Solid Waste Abatement Fund (40,589) (40,589) — Total other financing sources 87,450 1,056,779 1,144,229 920,118 Excess(deficiency)of revenues and other financing sources over expenditures 788,111 (68,110) 720,001 713,700 Fund balance January 1 10,658,850 473,604 11,132,454 10,418,754 Fund balance December 31 $11,446,961 $405,494 $11,852,455 $11,132,454 92 CAPITAL PROJECTS FUNDS Capital Projects Funds are used to account for the resources expended to acquire permanent or long term assets. These funds are established to provide special accounting for bond proceeds, grants and contributions designated for the acquisition of capital assets. 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 which are to be paid for primarily by the benefited property owner. HRA Fund This fund receives revenues from general property taxes in the form of tax increment and also from land sale proceeds. A board of commissioners is appointed by the City Council and they use these funds to purchase land in the City of Fridley for resale to developers of commercial facilities. CITY OF FRIDLEY, MINNESOTA CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET December 31, 1992 With Comparative Totals for December 31, 1991 Capital Special Improvements Assessments Assets Cash and cash equivalents $ $ ._ Investments 8,275,393 426,923 Receivables: Accounts ., Taxes- Unremitted 454 Delinquent 8,695 Specials- — Unremitted 443 Delinquent 4,196 Deferred 31,541 — Mortgage- Current Delinquent Deferred Interest Due from other funds Due from other governments 37,830 Total assets $8,284,542 $500,933 Liabilities and Fund Balance Liabilities: Accounts payable $4,919 — Deposits payable 89,088 Contracts payable 3,591 18,159 Deferred revenue 8,695 35,737 — Due to other funds 11,904 624,428 Due to other governments 963 Total liabilities 30,072 767,412 — Fund balance: Reserved for encumbrances 79,474 — Reserved for construction Unreserved- Designated for fixed asset replacement 1,798,084 Designated for park improvements 934,493 Designated for street improvements 5,442,419 Undesignated (266,479) .. Total fund balance 8,254,470 (266,479) Total liabilities and fund balance $8,284,542 $500,933 94 Exhibit E-1 Totals - HRA 1992 1991 $20,514 $20,514 $1,022,332 7,766,714 16,469,030 13,436,982 5,344 5,344 17,298 454 12,713 .,, 638,322 647,017 501,702 443 136 4,196 2,007 - 31,541 108,076 951,718 951,718 952,000 86,261 86,261 172,889 - 21,588 21,588 43,503 37,830 $9,490,461 $18,275,936 $16,269,638 - - $124,485 $129,404 $27,437 16,533 105,621 103,141 21,750 34,214 1,590,039 1,634,471 1,563,785 18,929 655,261 805,435 237,592 238,555 180,168 - 1,987,578 2,785,062 2,714,180 - 79,474 59,938 7,502,883 7,502,883 6,530,732 - 1,798,084 1,725,183 934,493 1,092,696 5,442,419 4,286,343 - (266,479) (139,434) 7,502,883 15,490,874 13,555,458 $9,490,461 $18,275,936 $16,269,638 95 CITY OF FRIDLEY, MINNESOTA CAPITAL PROJECTS FUNDS, COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended December 31, 1992 With Comparative Totals for Year Ended December 31, 1991 Capital Special Improvements Assessments Revenues: Taxes- Tax increment $ $ — Current ad valorem taxes 69,190 Delinquent ad valorem taxes 697 Special assessments 100,722 ._ Total taxes 69,887 100,722 Intergovernmental revenue- State credits 17,941 State aid for construction 911,823 40,840 Total intergovernmental revenue 929,764 40,840 Charges for services- General government 8,390 Total charges for services 8,390 0 Interest on investments 603,748 31,593 Miscellaneous revenue- Rental income Donations 34,415 Other 10,000 Total miscellaneous revenue 44,415 0 Total revenues 1,656,204 173,155 (Continued) 96 Exhibit E-2 Totals HRA 1992 1991 $2,931,681 $2,931,681 $2,662,381 69,190 72,284 697 296 112,059 212,781 88,929 3,043,740 3,214,349 2,823,890 17,941 15,000 952,663 303,353 0 970,604 318,353 8,390 0 8,390 0 420,739 1,056,080 961,053 86,834 86,834 108,414 34,415 11,120 34,569 44,569 120,125 121,403 165,818 239,659 3,585,882 5,415,241 4,342,955 97 CITY OF FRIDLEY, MINNESOTA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE(Continued) Year Ended December 31, 1992 With Comparative Totals for Year Ended December 31, 1991 Capital Special Improvements Assessments Expenditures: Current- General government $ $ — Public works 218,707 Capital outlay 327,597 1,024,280 Total expenditures 546,304 1,024,280 ._ Excess(deficiency)of revenues over expenditures 1,109,900 (851,125) — Other financing sources(uses): Bond proceeds 607,102 Loan proceeds 135,000 Operating transfers in(out)- General Fund HRA Debt Service Fund Special Assessment Debt Service Fund 11,925 Capital Improvement Fund HRA Capital Project Fund (19,590) Special Assessment Capital Projects Fund Total other financing sources(uses) (19,590) 754,027 Excess(deficiency)of revenues and other financing sources over expenditures and other financing uses 1,090,310 (97,098) Fund balance January 1 7,164,160 (139,434) _ Residual Equity Transfer in(out) (29,947) Fund balance(deficit) December 31 $8,254,470 ($266,479) 98 Exhibit E-2 Continued Totals HRA 1992 1991 $717,363 $717,363 $661,002 218,707 182,872 4,885,351 6,237,228 741,893 5,602,714 7,173,298 1,585,767 (2,016,832) (1,758,057) 2,757,188 607,102 977,417 135,000 7,293 2,969,393 2,969,393 (1,081,374) 11,925 201,597 19,590 19,590 (221,187) 2,988,983 3,723,420 (96,664) 972,151 1,965,363 2,660,524 6,530,732 13,555,458 10,894,934 (29,947) $7,502,883 $15,490,874 $13,555,458 99 Exhibit E-3 CITY OF FRIDLEY, MINNESOTA, — CAPITAL IMPROVEMENTS CAPITAL PROJECT FUND COMPARATIVE BALANCE SHEET December 31, 1992 and 1991 — 1992 1991 Assets — Cash and cash equivalents $ $69,153 Investments 8,275,393 7,095,955 Receivables: Accounts 2,870 — Taxes- Unremitted 454 1,947 Delinquent 8,695 6,336 — Due from other funds 19,590 Total assets $8,284,542 $7,195,851 — Liabilities and Fund Balance — Liabilities: Accounts payable $4,919 $18,557 Contracts payable 3,591 6,798 Deferred revenue 8,695 6,336 Due to other governments 963 Due to other funds 11,904 — Total liabilities 30,072 31,691 Fund balance: — Reserved for encumbrances 79,474 59,938 Unreserved- Designated for fixed asset replacement 1,798,084 1,725,183 — Designated for park improvements 934,493 1,092,696 Designated for street improvements 5,442,419 4,286,343 Total fund balance 8,254,470 7,164,160 — Total liabilities and fund balance $8,284,542 $7,195,851 100 CITY OF FRIDLEY. MINNESOTA CAPITAL IMPROVEMENTS CAPITAL PROJECT FUND Exhibit E-4 STATEMENT OF REVENUES. EXPENDITURES AND -" CHANGES IN FUND BALANCE- BUDGET AND ACTUAL Year Ended December 31. 1992 With Comparative Amounts for Year Ended December 31, 1991 1992 Variance - Favorable 1991 Budget Actual (Unfavorable) Actual 'revenues: Taxes- Current ad valorem taxes $70,550 $69,190 ($1,360) $72,284 - Delinquent ad valorem taxes 697 697 296 Total taxes 70,550 69,887 (663) 72,580 - Intergovenmental revenue- State credits 15,000 17,941 2,941 15,000 State aid for construction 274,000 911,823 637,823 303,353 - Total intergovernmental revenue 289,000 929,764 640,764 318,353 Charges for services- .... General Government 8,390 8,390 Total charges for services 8,390 8,390 Interest on investments 506,779 603,748 96,969 608,960 Miscellaneous revenue- Donations 20,000 34,415 14,415 11,120 _ Other 10,000 10,000 306 Total miscellaneous revenue 20,000 44,415 24,415 11,426 Total revenues 886,329 1,656,204 769,875 1,011,319 :xpenditures: Current Public works 218,707 218,707 182,872 Capital outlay 472,753 327,597 145,156 302,036 Total expenditures 691,460 546,304 145,156 484,908 Excess(deficiency)of revenues over expenditures 194,869 1,109,900 915,031 526,411 "')they financing sources(uses): Operating transfers in(out): General Fund 20,823 - HRA Capital Project Fund (19,590) (19,590) 19,590 Special Assessment Capital Projects Fund (221,187) Total other financing sources(uses) (19,590) (19,590) (180,774) Excess(deficiency)of revenues an other financing sources over expenditures and other financing uses 175,279 1,090,310 915,031 345,637 .and balance January 1 7,164,160 7,164,160 6,818,523 -cund balance December 31 $7,339,439 $8,254,470 $915,031 $7,164,160 101 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. CITY OF FRIDLEY. MINNESOTA ENTERPRISE FUNDS Exhibit F-1 COMBINING BALANCE SHEET December 31. 1992 With Comparative Totals for December 31, 1991 Public Totals Liquor Utilities 1992 1991 Assets urrent Assets: Cash and cash equivalents $858,923 $1,295,716 $2,154,639 $2,295,484 - Investments 3,666,708 3,666,708 3,621,077 Accounts receivable 963,340 963,340 804,868 Due from other funds 3,432 3,432 - Due from other governments 19,874 19,874 18,946 Inventories, at cost 265,012 10,421 275,433 320,592 Prepaid items 6,625 198,322 204,947 164,359 -. Total current assets 1,130,560 6,157,813 7,288,373 7,225,326 estricted Assets: Investments 611,291 611,291 long-term receivable- Metro Waste Control Commission 279,428 279,428 190,412 Property and equipment, at cost: - Property and equipment 568,845 25,573,353 26,142,198 25,687,513 Less: accumulated depreciation (255,414) (7,519,125) (7,774,539) (7,232,330) Net property and equipment 313,431 18,054,228 18,367,659 18,455,183 Total assets $1,443,991 $25,102,760 $26,546,751 $25,870,921 Liabilities and Fund Equity Jurrent liabilities: Accounts payable $138,690 $47,064 $185,754 $168,942 - Contracts payable 35,831 35,831 153,570 Salaries payable 3,017 6,601 9,618 5,413 Due to other governments 27,432 242,931 270,363 87,340 "- Accrued interest payable 47,518 47,518 43,412 Bonds payable-current 45,000 45,000 35,000 Total current liabilities 169,139 424,945 594,084 493,677 ong-term liabilities: Bonds payable 2,155,000 2,155,000 1,580,000 Total liabilities 169,139 2,579,945 2,749,084 2,073,677 Fund equity: - Contributed capital 12,256,552 12,256,552 12,581,903 Retained earnings- Reserved for capital outlay 2,499,895 2,499,895 2,291,080 _ Reserved for construction 611,291 611,291 Unreserved 1,274,852 7,155,077 8,429,929 8,924,261 Total retained earnings 1,274,852 10,266,263 11,541,115 11,215,341 Total fund equity 1,274,852 22,522,815 23,797,667 23,797,244 Total liabilities and fund equity $1,443,991 $25,102,760 $26,546,751 $25,870,921 103 CITY OF FRIDLEY. MINNESOTA Exhibit F-2 ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES. EXPENSES AND CHANGES IN RETAINED EARNINGS Year Ended December 31, 1992 With Comparative Totals for Year Ended December 31, 1991 Public Totals Liquor Utilities 1992 1991 Sales and cost of sales: Sales $2,848,224 $ $2,848,224 $2,787,205 Cost of sales 2,244,851 2,244,851 2,219,230 - Gross profit 603,373 603,373 567,975 Operating revenues: - Water sales and sewer rents 3,045,473 3,045,473 3,011,473 Other 65,811 65,811 103,964 Total operating revenues 3,111,284 3,111,284 3,115,437 - Operating expenses: Personal services 312,413 694,871 1,007,284 957,192 Supplies and other charges- Disposal charges 1,877,692 1,877,692 1,600,457 Other 157,711 622,048 779,759 728,156 Depreciation 23,993 570,075 594,068 584,378 Total operating expenses 494,117 3,764,686 4,258,803 3,870,183 Operating income(loss) 109,256 (653,402) (544,146) (186,771) Non-operating revenues(expenses): Interest on investments 53,889 434,498 488,387 542,061 Debt service (131,761) (131,761) (148,449) Loss on disposition of fixed assets (1,139) (1,756) (2,895) Other 216 12,069 12,285 2,000 Total non-operating revenues(expenses) 52,966 313,050 366,016 395,612 Income before operating transfers 162,222 (340,352) (178,130) 208,841 Operating transfers in(out): General Fund (50,000) Special Assessment Debt Service Fund 347 Total operating transfers 0 0 0 (49,653) Net income(loss)before extraordinary item 162,222 (340,352) (178,130) 159,188 ., Extraordinary gain on issuance of sewer availability charge credits 167,300 167,300 -• Net income (loss) 162,222 (173,052) (10,830) 159,188 Credit arising from transfer of depreciation on contributed capital 336,604 336,604 336,458 Retained earnings January 1 1,112,630 10,102,711 11,215,341 10,719,695 Retained earnings December 31 $1,274,852 $10,266,263 $11,541,115 $11,215,341 104 CITY OF FRIDLEY, MINNESOTA ENTERPRISE FUNDS Exhibit F-3 COMBINING STATEMENT OF CASH FLOWS Year Ended December 31, 1992 With Comparative Totals for Year Ended December 31, 1991 Public Totals Liquor Utilities 1992 1991 sash flows from operating activities: Operating income(loss) $109,256 ($653,402) ($544,146) ($186,771) Adjustments to reconcile operating income(loss) ... to net cash flows from operating activities: Depreciation 23,993 570,075 594,068 584,378 Changes in assets and liabilities: Decrease(increase) in receivables (137,116) (137,116) (86,651) Decrease(increase)in due from other funds (3,432) (3,432) Decrease (increase) in inventories 54,220 (9,061) 45,159 (5,684) Decrease(increase)in prepaid items 17,226 (57,814) (40,588) (17,009) Increase(decrease) in payables 26,263 64,144 90,407 217,293 Other non-operating revenue 216 12,069 12,285 2,000 _ Use of sewer availability charge credits 56,000 56,000 et cash flows from operating activities 231,174 (158,537) 72,637 507,556 rash flows from non-capital financing activities: Operating transfers out (50,000) Operating transfers in 347 ""et cash flows from non-capital financing activities 0 0 0 (49,653) Cash flows from capital and related financing activities: -- Acquisition and construction of fixed assets (17,329) (480,857) (498,186) (1,157,875) Proceeds from sale of revenue bonds 620,000 620,000 1,615,000 Principal paid on revenue bonds (35,000) (35,000) - Interest and paying agent fees on revenue bonds (131,761) (131,761) (148,449) et cash flows from capital and related financing activities (17,329) (27,618) (44,947) 308,676 ash flows from investing activities: Purchase of investment securities (4,277,999) (4,277,999) Proceeds from sale of investment securities 3,621,077 3,621,077 -Interest on investments 53,889 426,399 480,288 533,313 Interest received from MWCC 8,099 8,099 8,748 Net cash flows from investing activities 53,889 (222,424) (168,535) 542,061 3t increase(decrease)in cash and cash equivalents 267,734 (408,579) (140,845) 1,308,640 cash and cash equivalents-January 1 591,189 1,704,295 2,295,484 986,844 Lash and cash equivalents-December 31 $858,923 $1,295,716 $2,154,639 $2,295,484 )n-cash investing, capital and financing activities: System assets of$11,925 were contributed by the Capital Projects Special -Assessment Fund to the Public Utility Enterprise Fund in 1992. A receivable for sewer availability charge credits from the Metropolitan Waste Control Commission, in the amount of$167,300, was recognized in the Public Utility Enterprise Fund in 1992. 105 . Exhibit F-4 CITY OF FRIDLEY, MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE BALANCE SHEET — December 31, 1992 and 1991 1992 1991 Assets — Current Assets: Cash and cash equivalents $858,923 $591,189 — Inventories, at cost 265,012 319,232 Prepaid items 6,625 23,851 Total current assets 1,130,560 934,272 —. Property and equipment, at cost: Land 66,961 66,961 ., Buildings 178,897 179,764 Improvements other than building 86,759 76,320 Machinery and equipment 236,228 239,174 — 568,845 562,219 Less: accumulated depreciation (255,414) (240,985) Net property and equipment 313,431 321,234 — Total assets $1,443,991 $1,255,506 — Liabilities and Fund Equity Current Liabilities: Accounts payable $138,690 $113,761 Contracts payable 450 Salaries payable 3,017 2,063 Due to other governments 27,432 26,602 Total current liabilities 169,139 142,876 — Fund equity: - Retained earnings-unreserved 1,274,852 1,112,630 Total liabilities and fund equity $1,443,991 $1,255,506 106 Exhibit F-5 CITY OF FRIDLEY. MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Years Ended December 31, 1992 and 1991 1992 1991 Sales and cost of sales: Sales $2,848,224 $2,787,205 -- Cost of sales 2,244,851 2,219,230 Gross profit 603,373 567,975 Operating expenses: Selling: Personal services 168,729 168,023 Supplies and other charges 38,175 35,329 Total selling expenses 206,904 203,352 ..., Administration and overhead Personal services 143,684 125,697 Supplies and other charges 119,536 113,862 Depreciation 23,993 19,204 Total administration and overhead 287,213 258,763 Total operating expenses 494,117 462,115 Operating income 109,256 105,860 Non-operating revenues: Interest on investments 53,889 57,256 Loss on disposition of fixed assets (1,139) Other 216 2,000 Total non-operating revenues 52,966 59,256 Income before operating transfers 162,222 165,116 _ Operating transfers out: General Fund (50,000) Total operating transfers 0 (50,000) Net income(loss) 162,222 115,116 Retained earnings January 1 1,112,630 997,514 Retained earnings December 31 $1,274,852 $1,112,630 107 Exhibit F-6 CITY OF FRIDLEY. MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE STATEMENT OF CASH FLOWS — Years Ended December 31, 1992 and 1991 1992 1991 Cash flows from operating activities: Operating income $109,256 $105,860 Adjustments to reconcile operating income (loss)to net cash flows from operating activities: Depreciation 23,993 19,204 Changes in assets and liabilities: Decrease(increase) in inventories 54,220 (6,199) Decrease(increase) in prepaid items 17,226 (4,280) Increases(decrease) in payables 26,263 29,405 Other non-operating revenue 216 2,000 Net cash flows from operating activities 231,174 145,990 Cash flows from non-capital financing activities: — Operating transfers out to General Fund (50,000) Cash flows from capital and related — financing activities: Acquisition and construction of fixed assets (17,329) (127,966) Cash flows from investing activities: Interest on investments 53,889 57,256 Net increase(decrease)in cash and cash equivalents 267,734 25,280 Cash and cash equivalents-January 1 591,189 565,909 — Cash and cash equivalents-December 31 $858,923 $591,189 108 CITY OF FRIDLEY. MINNESOTA Exhibit F-7 PUBLIC UTILITY ENTERPRISE FUND - COMPARATIVE BALANCE SHEET December 31, 1992 and 1991 - 1992 1991 Assets _ Current assets: Cash&cash equivalents $1,295,716 $1,704,295 Investments 3,666,708 3,621,077 Receivables: Accounts 960,405 802,339 Taxes 2,935 2,529 Due from other funds 3,432 "- Due from other governments 19,874 18,946 Inventories, at cost 10,421 1,360 Prepaid items 198,322 140,508 Total current assets 6,157,813 6,291,054 Restricted assets: Investments 611,291 " Long-term receivable- Metropolitan Waste Control Commission 279,428 190,412 Property and equipment, at cost: Land 154,531 154,531 Buildings 1,523,661 1,524,072 Improvements other than building 4,686,774 4,234,441 Machinery and equipment 2,252,849 2,267,717 Water and sewer lines 16,955,538 16,944,533 25,573,353 25,125,294 Less: accumulated depreciation (7,519,125) (6,991,345) Net property and equipment 18,054,228 18,133,949 Total assets $25,102,760 $24,615,415 Liabilities and Fund Equity Current liabilities: Accounts payable $47,064 $55,181 Contracts payable 35,831 153,120 Salaries payable 6,601 3,350 Due to other governments 242,931 60,738 Accrued interest payable 47,518 43,412 Bonds payable-current 45,000 35,000 Total current liabilities 424,945 350,801 Long term liabilities: Bonds payable 2,155,000 1,580,000 - Total liabilities 2,579,945 1,930,801 Fund Equity: Contributed capital 12,256,552 12,581,903 -' Retained earnings: Reserved for capital outlay 2,499,895 2,291,080 Reserved for construction 611,291 - Unreserved 7,155,077 7,811,631 Total Retained Earnings 10,266,263 10,102,711 Total fund equity 22,522,815 22,684,614 - Total liabilities and fund equity $25,102,760 $24,615,415 109 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, 1992 and 1991 1992 1991 Operating Revenues: Water sales and sewer rents $3,045,473 $3,011,473 — Other 65,811 103,964 Total Operating Revenues 3,111,284 3,115,437 Operating Expenses: —' Personal services 694,871 663,472 Supplies and other charges- Disposal charges 1,877,692 1,600,457 — Other 622,048 578,965 Depreciation: Purchased assets 233,471 228,716 Contributed assets 336,604 336,458 Total Operating Expenses 3,764,686 3,408,068 Operating loss (653,402) (292,631) Non-Operating Revenues(Expenses): — Interest on investments 434,498 484,805 Debt service (131,761) (148,449) Loss disposition of fixed assets (1,756) — Other 12,069 Total non-operating revenues (expenses) 313,050 336,356 Income(loss)before operating transfers (340,352) 43,725 Operating transfers from (to): Special Assessment Debt Service Fund 347 Total operating transfers 0 347 Net income before extraordinary item (340,352) 44,072 Extraordinary gain on issuance of sewer availability — Charge credits 167,300 Net income(loss) (173,052) 44,072.00 — Credit arising from transfer of depreciation on contributed capital 336,604 336,458 Retained Earnings January 1 10,102,711 9,722,181 Retained Earnings December 31 $10,266,263 $10,146,783 110 CITY OF FRIDLEY. MINNESOTA PUBLIC UTILITY ENTERPRISE FUND Exhibit F-9 _ COMPARATIVE STATEMENT OF CASH FLOWS Years Ended December 31, 1992 and 1991 '- 1992 1991 Cash flows from operating activities: Operating income(loss) ($653,402) ($292,631) Adjustment to reconcile operating income(loss)to net cash flows from operating activities: Depreciation 570,075 565,174 Changes in assets and liabilities: Decrease(increase) in receivables (137,116) (86,651) Decrease(increase) in due from other funds (3,432) Decrease(increase) in inventories (9,061) 515 Decrease(increase)in prepaid items (57,814) (12,729) Increase(decrease)in payables 64,144 187,888 Other non-operating revenue 12,069 Use of sewer availability charge credits 56,000 Net cash flows from operating activities (158,537) • 361,566 Net cash flows from non-capital financing activities: Operating transfer from Special Assessment Debt Service Fund 347 Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (480,857) (1,029,909) _ Proceeds from sale of revenue bonds 620,000 1,615,000 Principal paid on revenue bonds (35,000) Interest and paying agent fees on revenue bonds (131,761) (148,449) Net cash flows from capital and related financing activities (27,618) 436,642 Cash flows from investing activities: _ Purchase of investment securities (4,277,999) Proceeds from sale of investment securities 3,621,077 Interest on investments 426,399 476,057 Interest received from MWCC 8,099 8,748 Net cash flows from investing activities (222,424) 484,805 Net increase(decrease)in cash and cash equivalents (408,579) 1,283,360 Cash and cash equivalents-January 1 1,704,295 420,935 Cash and cash equivalents-December 31 $1,295,716 $1,704,295 Non-cash investing, capital and financing activities: System assets of$11,925 were contributed by the Capital Projects Special Assessment Fund to the Public Utility Enterprise Fund in 1992. A receivable for sewer availability charge credits from the Metropolitan Waste Control Commission in the amount of$167,300 was recognized in the Public Utility Enterprise Fund in 1992. 111 • INTERNAL SERVICE FUNDS Internal Service Funds are used to account for goods and services that are provided on a cost reimbursement or fee basis to departments or agencies within the City. These funds are essential for segregating costs for determining the total cost of providing a service and for assuring that the goods and services provided are properly utilized. These funds are accounted for on a capital maintenance measurement focus and use the accrual basis of accounting. Employee Benefits Fund This fund is used to account for the expenses associated with providing fringe benefits for the City of Fridley employees. Self Insurance Fund This fund is used to account for all revenues and expenditures associated with the $50,000 deductible in the City general liability policy. Exhibit G-1 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUNDS COMBINING BALANCE SHEET December 31, 1992 With Comparative Totals for December 31, 1991 Employee Self Totals Benefits Insurance 1992 1991 Assets Current assets: Cash and cash equivalents $ $1,193,750 $1,193,750 $90,535 Due from other funds 1,245,576 239,807 1,485,383 2,568,657 Accounts receivable 163 Total assets $1,245,576 $1,433,557 $2,679,133 $2,659,355 Liabilities and Fund Equity Current liabilities: Accounts payable $185 $16,782 $16,967 $697 Payroll deductions payable 60,028 60,028 67,477 Compensated absences payable 905,758 905,758 1,005,971 Accrued claims liability 75,000 Total liabilities 965,971 16,782 982,753 1,149,145 Fund equity: Contributed capital 1,000,000 1,000,000 1,000,000 — Retained earnings-reserved 279,605 416,775 696,380 510,210 Total fund equity 279,605 1,416,775 1,696,380 1,510,210 Total liabilities and fund equity $1,245,576 $1,433,557 $2,679,133 $2,659,355 113 Exhibit G-2 CITY OF FRIDLEY. MINNESOTA / - INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES. EXPENSES AND - CHANGES IN RETAINED EARNINGS Year Ended December 31. 1992 With Comparative Totals for Year Ended December 31, 1991 - Employee Self Totals Benefits Insurance 1992 1991 Operating revenues: Charges for services $11,240 $ $11,240 $ Insurance reimbursement 137,871 137,871 143,383 Total operating revenues 11,240 137,871 149,111 143,383 Operating expenses: Personal services 39,949 39,949 /115,70 _ Supplies and other charges 3,851 32,304 36,155 2,823 Capital outlay 1,530 Total operating expenses 43,800 32,304 76,104 210,059 Operating income(loss) (32,560) 105,567 73,007 (66,676) Non operating revenues: Interest on investments 104,231 108,932 213,163 212,678 Income before operating transfers 71,671 214,499 286,170 146,002 Operating transfers out: -- General Fund (100,000) (100,000) (100,000) Net income(loss) (28,329) 214,499 186,170 46,002 _ Retained earnings January 1 307,934 202,276 510,210 464,208 Retained earnings December 31 $279,605 $416,775 $696,380 $510,210 114 Exhibit G-3 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS Year Ended December 31, 1992 With Comparative Totals for Year Ended December 31, 1991 ..., Employee Self Totals Benefits Insurance 1992 1991 Cash flows from operating activities: - Operating income(loss) ($32,560) $105,567 $73,007 ($66,676) 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 135,643 947,631 1,083,274 (1,199,127) Decrease(increase)in accounts receivable 163 163 3,424 Decrease(increase)in prepaid items Increase(decrease)in accounts payable 185 16,085 16,270 (2,176) Increase (decrease) in accrued claims liability (75,000) (75,000) 75,000 _ Increase(decrease)in compensated absences payable (100,213) (100,213) 13,096 Increase(decrease) in payroll deductions payable (7,449) (7,449) 67,477 Net cash flows from operating activities (4,231) 994,283 990,052 (1,108,982) — Cash flows from non-capital financing activities: Operating transfers to General Fund (100,000) (100,000) (100,000) — Net cash flows from non-capital financing activities (100,000) (100,000) (100,000) Cash flows from investing activities: — Interest on investments 104,231 108,932 213,163 212,678 Net increase in cash and cash equivalents 1,103,215 1,103,215 (996,304) Cash and cash equivalents-January 1 90,535 90,535 1,086,839 — Cash and cash equivalents-December 31 $0 $1,193,750 $1,193,750 $90,535 115 Exhibit G-4 CITY OF FRIDLEY, MINNESOTA — EMPLOYEE BENEFITS INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31, 1992 and 1991 1992 1991 Assets Due from other funds $1,245,576 $1,381,219 Accounts receivable 163 Total assets $1,245,576 $1,381,382 Liabilities and Fund Eauitv Current Liabilities: Accounts payable $185 $ Compensated absences payable 905,758 1,005,971 Payroll deductions payable 60,028 67,477 — Total current liabilities 965,786 1,073,448 Fund equity: Retained earnings- Reserved for employee benefits 279,605 307,934 Total current liability and fund equity $1,245,391 $1,381,382 116 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, 1992 and 1991 1992 1991 Operating revenues: Charges for services $11,240 $ Operating expenses: General government- _ Personal services 39,949 115,706 Supplies and other charges 3,851 Total operating expenses 43,800 115,706 Operating income(loss) (32,560) (115,706) _ Non-operating revenues: Interest on investments 104,231 113,507 Total non-operating revenues 104,231 113,507 Income before operating transfers 71,671 (2,199) Operating transfers out: General Fund (100,000) (100,000) Net income(loss) (28,329) (102,199) Retained earnings January 1 307,934 410,133 Retained earnings December 31 $279,605 $307,934 117 Exhibit G-6 — CITY OF FRIDLEY, MINNESOTA EMPLOYEE BENEFITS INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years Ended December 31, 1992 and 1991 -- 1992 1991 Cash flows from operating activities: Operating income(loss) ($32,560) ($115,706) 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 135,643 (11,689) Decrease(increase)in accounts receivable 163 1,106 Increase(decrease)in accounts payable 185 — Increase(decrease)in compensated absences payable (100,213) 13,096 Increase(decrease)in payroll — deductions payable (7,449) 67,477 Net cash flows from operating activities (4,231) (45,716) — Cash flows from non-capital financing activities: Operating transfer to General Fund (100,000) (100,000) — Cash flows from investing activities: Interest on investments 104,231 113,507 Net increase(decrease)in cash and cash equivalents 0 (32,209) Cash and cash equivalents-January 1 0 32,209 Cash and cash equivalents-December 31 $0 $0 _ 118 Exhibit .G-7 CITY OF FRIDLEY, MINNESOTA SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET -' December 31, 1992 and 1991 1992 1991 Assets Cash and cash equivalents $1,193,750 $90,535 Due from other funds 239,807 1,187,438 Total assets $1,433,557 $1,277,973 Liabilities and Fund Eouiity Current liabilities: Accounts payable $16,782 $697 Accrued claims liability 75,000 Total current liabilities 16,782 75,697 Fund equity: Contributed capital 1,000,000 1,000,000 Retained earnings- Reserved for contingencies 416,775 202,276 Total fund equity 1,416,775 1,202,276 Total liabilities and fund equity $1,433,557 $1,277,973 119 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, 1992 and 1991 1992 1991 Operating revenues: Insurance reimbursement $137,871 $143,383 Total operating revenues 137,871 143,383 Operating expenses: Supplies and other charges 32,304 92,823 _ Capital outlay 1,530 Total operating expenses 32,304 94,353 Operating income(loss) 105,567 49,030 Non-operating revenues: — Interest on investments 108,932 99,171 Net income(loss) 214,499 148,201 "" Retained earnings January 1 202,276 54,075 Retained earnings December 31 $416,775 $202,276 120 Exhibit G-9 CITY OF FRIDLEY. MINNESOTA SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years Ended December 31, 1992 and 1991 1992 1991 Cash flows from operating activities: Operating income(loss) $105,567 $49,030 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 947,631 (1,187,438) Decrease(increase) in accounts receivable 2,318 Increase(decrease) in accounts payable 16,085 (2,176) Increase(decrease)in accrued claims liability (75,000) 75,000 Net cash flows from operating activities 994,283 (1,063,266) Cash flows from investing activities: Interest on investments 108,932 99,171 Net increase in cash and cash equivalents 1,103,215 (964,095) Cash and cash equivalents-January 1 90,535 1,054,630 Cash and cash equivalents-December 31 $1,193,750 $90,535 121 i• tT � r lo---, 'r TRUST AND;AGENCY FUNDS Trust and Agency Funds are used to account for assets held by a government in a'trustee or +; agent capacity for individuals; private organizations,other governments or other funds. '` n.„ E 'erciable Trust Ftzna , 1 :? The City of Fridley maintains only urie Expendable Trust Fund that is used to aefray thP� City airriinistrative`costs associated with the issuance of industrial revenue develppment bonds. s Six •Cities Watershed Ac enc to rd 3 f This fund was establisherd to accouiit•for the collection of taxes received from the County on .x behalf of the Six Cities,Ntatershe:l Distc-ict: jyy , , .. , , ,, ',„ : '' ,,, ' + Hotelikilota=l Ager c; `tint `f This fund was,established to,account,€or.the cpllection.of a three percent tax that has been. 4 i� `r• imposed on all the hotels an motels in ttie north suburban area The collection process is rh "1"s,+ administered by the City on behalf of the.North Metro Converrtion and Tourism Bureau which will,; use the' he`money;to provide,information to visitors;andi create an awareness of the facilities available , r . t� t! in this area. !.. r: Deferred Compensation AAc;ency Fungi! >. This fund accounts for deposits held in trust with the International City Managers,:Association �a. •; 1''' , (ICMA)on behalf of theCity of Fridley.employees_: Employees make pretax contributions to this organization throughout their careers which are used as a retirement benefit.= 1f`;• . tz.. a fp a k�y ft' ' ' - , ' , - ,- ",,---;-4,:,l'o 0 Exhibit H-1 CITY OF FRIDLEY. MINNESOTA TRUST AND AGENCY FUNDS COMBINING BALANCE SHEET December 31. 1992 With Comparative Totals for December 31, 1991 ., Expendable Agency Totals Trust Funds 1992 1991 Assets — Investments $49,506 $5,277 $54,783 $65,068 Receivables: — Accounts 2,361 2,361 2,082 Taxes- Unremitted 11 11 133 Delinquent 781 781 1,305 Other assets 4,067,826 4,067,826 3,706,214 — Total assets $49,506 $4,076,256 $4,125,762 $3,774,802 Liabilities and Fund Balance — Liabilities: Deposits payable 39,512 4,067,826 $4,107,338 $3,748,568 Due to other governments 8,430 8,430 7,501 Due to other funds 104 Total liabilities 39,512 4,076,256 4,115,768 3,756,173 — Fund balance: Unreserved-undesignated 9,994 9,994 18,629 Total liabilities and fund balance $49,506 $4,076,256 $4,125,762 $3,774,802 124 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, 1992 and 1991 1992 1991 Revenues: Interest on investments $4,320 $5,091 Expenditures: Current: General government 2,562 Excess of revenues over expenditures 1,758 5,091 Other financing uses: Operating transfers out (10,393) (9,898) Total other financing uses (10,393) (9,898) Increase(deficiency)of revenues over expenditures and other financing uses (8,635) (4,807) Fund balance,January 1 18,629 23,436 — Fund balance, December 31 $9,994 $18,629 125 - Exhibit H-3 CITY OF FRIDLEY, MINNESOTA, ALL AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES(Continued) - Year Ended December 31, 1992 Balance Balance January 1 Additions Deletions December 31 SIX CITIES WATERSHED AGENCY FUND - Assets Investments $4,085 $3,407 $4,217 $3,275 - Taxes receivable: Unremitted 133 11 133 11 Delinquent 1,305 242 766 781 Total assets $5,523 $3,660 $5,116 $4,067 Liabilities Due to other governments $5,523 $3,500 $4,956 $4,067 - Total liabilities $5,523 $3,500 $4,956 $4,067 HOTEUMOTEL TAX AGENCY FUND Assets Investments $ $33,757 $31,755 $2,002 Accounts receivable 2,082 2,361 2,082 2,361 Total assets $2,082 $36,118 $33,837 $4,363 Liabilities _ Due to other governments $1,978 $4,363 $1,978 $4,363 Due to other funds 104 104 Total liabilities $2,082 $4,363 $2,082 $4,363 126 Exhibit H-3 ' Continued CITY OF FRIDLEY, MINNESOTA ALL AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES(Continued) Year Ended December 31, 1992 Balance Balance January 1 Additions Deletions December 31 DEFERRED COMPENSATION AGENCY FUND Assets — Deferred compensation-at market $3,706,214 $520,088 $158,476 $4,067,826 Total assets $3,706,214 $520,088 $158,476 $4,067,826 Liabilities Deposits payable $3,706,214 $520,088 $158,476 $4,067,826 Total liabilities $3,706,214 $520,088 $158,476 $4,067,826 -- TOTALS-All AGENCY FUNDS Assets Investments $4,085 $37,164 $35,972 $5,277 Receivables: Accounts 2,082 2,361 2,082 2,361 Taxes- Unremitted 133 11 133 11 Delinquent 1,305 242 766 781 Other assets 3,706,214 520,088 158,476 4,067,826 Total assets $3,713,819 $559,866 $197,429 $4,076,256 Liabilities Deposits payable $3,706,214 $520,088 $158,476 $4,067,826 Due to other governments 7,501 7,863 6,934 8,430 Due to other funds 104 104 _ Total liabilities $3,713,819 $527,951 $165,514 $4,076,256 127 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 1-1 CITY OF FRIDLEY, MINNESOTA COMPARATIVE STATEMENT OF GENERAL FIXED ASSETS December 31, 1992 and 1991 1992 1991 General fixed assets: Land $2,105,675 $2,101,614 Building 4,767,496 4,515,210 Improvements other than building 15,918,080 15,454,342 Machinery and equipment 5,107,323 4,933,903 Construction in progress 1,050,767 308,748 Total general fixed assets $28,949,341 $27,313,817 Investment in general fixed assets from: General obligation bonds 856,597 856,597 Federal and state aid 1,682,960 1,682,960 General fund revenues 10,477,735 10,381,044 Special revenue fund revenues 1,557,662 1,466,624 Special assessments 10,890,116 9,864,750 Private gifts 770,888 764,675 Other sources 2,713,383 2,297,167 Total investment in general fixed assets $28,949,341 $27,313,817 129 Exhibit 1-2 CITY OF FRIDLEY, MINNESOTA SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS- BY FUNCTION AND ACTIVITY - Year Ended December 31, 1992 General Fixed General Fixed Assets Assets 1/1/92 Additions Deletions 12/31/92 Function and Activity General government City manager $30,022 $1,649 $1,237 $30,434 Cable TV 41,023 2,083 3,242 39,864 Accounting 49,314 5,074 44,240 Management information systems 549,837 17,653 20,228 547,262 Assessing 4,541 2,651 2,467 4,725 Elections 92,804 812 91,992 City clerk/records 1,585 1,600 3,185 Planning 146,822 1,649 1,620 146,851 Municipal center 3,725,216 3,313 4,191 3,724,338 Total general government 4,641,164 30,598 38,871 4,632,891 Public safety Public protection 618,109 112,315 46,988 683,436 Fire protection 1,478,124 51,055 45,208 1,483,971 Inspectional services 10,631 349 10,282 Civil defense 147,302 369 146,933 Total public safety 2,254,166 163,370 92,914 2,324,622 Public works Engineering 87,367 46,711 3,445 130,633 Street improvements 11,478,228 369,697 11,847,925 _• Traffic signal 156,602 16,157 461 172,298 City garage 1,921,589 120,419 35,038 2,006,970 Parks 5,104,724 391,265 78,092 5,417,897 - Total public works 18,748,510 944,249 117,036 19,575,723 Recreation/Naturalist Recreation 143,156 8,420 5,249 146,327 Naturalist 1,218,073 13,114 12,176 1,219,011 Total recreation/naturalist 1,361,229 21,534 17,425 1,365,338 Construction in progress 308,748 1,087,222 345,203 1,050,767 Total general fixed assets $27,313,817 $2,246,973 $611,449 $28,949,341 130 Exhibit 1-3 CITY OF FRIDLEY. MINNESOTA SCHEDULE OF GENERAL FIXED ASSETS _ BY FUNCTION AND ACTIVITY December 31, 1992 - Improvements Machinery Other than and Total Land Buildings Buildings Equipment Function and Activity General government City manager $30,434✓ $ $ $ $30,434 Cable TV 39,864' 39,864 - Accounting 44,240" 44,240 Management information systems 547,262" 5,990 541,272 Assessing 4,725'' 4,725 - Elections 91,992- 91,992 City clerk/records 3,185' 3,185 Planning 146,851•4 124,804"' 22,047 - Municipal center 3,724,338✓ 52,496" 2,849,206 42,961 779,675 Total general government 4,632,891 177,300 2,849,206 48,951 1,557,434 - Public safety Public protection 683,436 ✓ 166,871 516,565 Fire protection 1,483,971,f 58,656/ 497,922 98,549 828,844 _ Inspectional services 10,282 '` 10,282 Civil defense 146,933 I 110,527 36,406 Total public safety 2,324,622 58,656 497,922 375,947 1,392,097 Public works Engineering 130,633" 130,633 Street improvements 11,847,925 5,426 11,842,499 Traffic signal 172,298 167,420 4,878 City garage 2,006,970 v 139,592`- 386,266 214,744 1,266,368 _ Parks 5,417,897` 1,418,643 582,786 2,835,341 581,127 Total public works 19,575,723 1,563,661 969,052 15,060,004 1,983,006 _ Recreation/Naturalist Recreation 146,327✓ ✓ 8,096 138,231 Naturalist 1,219,011 306,058 451,316 425,082 36,555 Total recreation/naturalist 1,365,338 306,058 451,316 433,178 174,786 Total general fixed assets allocated to functions $27,898,574 $2,105,675 $4,767,496 $15,918,080 $5,107,323 Construction in progress 1,050,767 Total fixed assets $28,949,341 131 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, 1992 and 1991 1992 1991 _ Amount available and to be provided for the payment of general long-term debt Amount available in Debt Service Funds $11,852,455 $11,132,454 Amount to be provided by future taxes 8,552,545 4,967,546 Total available and to be provided $20,405,000 $16,100,000 General long-term debt payable General long-term debt payable: General obligation special assessment improvement bonds $4,215,000 $3,810,000 General obligation tax increment refunding bonds 9,485,000 9,485,000 General obligation temporary tax increment bonds 4,030,000 Tax increment revenue refunding bonds 2,540,000 2,805,000 Construction loan payable 135,000 Total general long-term debt payable $20,405,000 $16,100,000 133 SUPPLEMENTAL SECTION TAUTGES, REDPATH & CO., LTD. CERTIFIED PUBLIC ACCOUNTANTS .., Independent Auditor's Report on Compliance With Specific Requirements Applicable to Nonmajor Federal. Financial Assistance Program Transactions To the Honorable Mayor and Members of the City Council — City of Fridley, Minnesota We have audited the general purpose financial statements of the City of Fridley,Minnesota as of and for the year ended December 31, 1992, and have issued our report thereon dated June 10, 1993. In connection with our audit of the general purpose financial statements of the City of Fridley, Minnesota,and with our consideration of the City of Fridley's control structure used to administer federal financial assistance programs,as required by Office of Management and Budget Circular A- - 128, "Audits of State and Local Governments," we selected certain transactions applicable to certain nonmajor federal financial assistance programs for the year ended December 31, 1992. As required by Circular A-128,we have performed auditing procedures to test compliance with the requirements governing the allowability of services and program expenditures that are applicable to — those transactions. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the City of Fridley Minnesota's compliance with these requirements. Accordingly, we do not express such an opinion. With respect to the items tested,the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the preceding paragraph. With respect to items not — tested,nothing came to our attention that caused us to believe that the City of Fridley,Minnesota had not complied, in all material respects,with those requirements. This report is intended for the information of the City of Fridley, Minnesota and the Federal Cognizant Audit Agency. However,this report is a matter of public record and its distribution is not limited. %a(,..i.9.a f e "J". TAUTGES, REDPATH&CO.,LTD. — Certified Public Accountants June 10, 1993 — 135 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426-7000 • FAX/426-5004 • Member of HLB International TA UTGES, REDPA TH & CO., LTD. CERTIFIED PUBLIC ACCOUNTANTS Independent Auditor's Report on the Internal Control Structure in Accordance with Government Auditing Standards To the Honorable Mayor and Members of the City Council City of Fridley,Minnesota We have audited the general purpose financial statements of the City of Fridley,Minnesota, as of and for the year ended December 31, 1992, and have issued our report thereon dated June 10, 1993. 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. In planning and performing our audit of the general purpose financial statements of the City of Fridley, Minnesota,for the year ended December 31, 1992,we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on the internal control structure. The management of the City of Fridley, Minnesota,is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility,estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition,and that transactions are executed in accordance with _ management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure,errors or irregularities may nevertheless occur and not be detected. Also,projections of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. For the purpose of this report,we have classified the significant internal control structure policies and procedures in the following categories;receivables,cash receipts, billings,accounts payable, cash disbursements and payroll. For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation,and we assessed control risk. 137 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426-7000 • FAX/426-5004 • Member of HLB International Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would — be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above. This report is intended for the information of the City of Fridley,Minnesota and the Federal Cognizant Audit Agency. This restriction is not intended to limit the distribution of this report, which is a matter of public record. Z44 A4 1/ ‘ TAUTGES,REDPATH&CO.,LTD. Certified Public Accountants June 10, 1993 139 TA UTGES, REDPA TH & CO., LTD. CERTIFIED PUBLIC ACCOUNTANTS Independent Auditor's Report on the Internal Control Structure Used in Administering Federal Financial Assistance Programs To the Honorable Mayor and Members of the City Council City of Fridley,Minnesota We have audited the general purpose financial statements of the City of Fridley,Minnesota, as of and for the year ended December 31, 1992, and have issued our report thereon dated June 10, 1993. We conducted our audits in accordance with generally accepted auditing standards;Government Auditing Standards,issued by the Comptroller General of the United States; and Office of Management and Budget(OMB)Circular A-128,Audits of State and Local Governments. Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement and about whether the City of Fridley,Minnesota,complied with laws and regulations, noncompliance with which would be material to a federal financial assistance program. In planning and performing our audits for the year ended December 31, 1992, we considered the City's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinions on the City's general purpose financial statements. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to federal financial assistance programs. We have addressed policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated June 10, 1993. The management of the City of Fridley,Minnesota is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility,estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable,but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition,that transactions are executed in accordance with — management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles,and that federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure,errors,irregularities,or instances of noncompliance may nevertheless occur and not be detected. Also,projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate 141 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426-7000 • FAX/426-5004 • Member of HLB International For the purpose of this report,we have classified the significant internal control structure policies and procedures used in administering federal financial assistance programs in the following categories: General Requirements: Specific Requirements: Political Activity Types of Services Civil Rights Eligibility Cash Management Special Tests and Provisions Relocation Assistance and Real Property Claims for Reimbursement Acquisition Allowable Costs/Cost Principles Administrative Requirements For all of the internal control structure categories listed above,we obtained an understanding of the design of relevant policies and procedures and determined whether they have been placed in operation, and we assessed control risk. During the year ended December 31, 1992,the City of Fridley,Minnesota had no major federal financial assistance programs and expended 68%of its total federal financial assistance under the -. Community Development Block Grant nonmajor federal financial assistance program. We performed tests of controls,as required by OMB Circular A-128,to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we have considered relevant to preventing or detecting material noncompliance with specific requirements, general requirements,and requirements governing claims for reimbursements applicable to the aforementioned nonmajor programs. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly,we do not express such an opinion. We noted no matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to out attention relating to significant deficiencies in the design or operation of the internal control structure that,in our judgment,could adversely affect the City's ability to administer federal financial assistance programs in accordance with applicable laws and regulations. _ A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and,accordingly,would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. 143 This report is intended for the information of the City of Fridley,Minnesota and the Federal Cognizant Audit Agency. This restriction is not intended to limit the distribution of this report, which is a matter of public record. -- 7LG'4 f le -1-4 TAUTGES,REDPATH&CO.,LTD. Certified Public Accountants June 10, 1993 145 TAUTGES, REDPATH & CO., LTD. CERTIFIED PUBLIC ACCOUNTANTS Independent Auditor's Report on Compliance with General Requirements Applicable to Federal Financial Assistance Programs To the Honorable Mayor and Members of the City Council City of Fridley,Minnesota —. We have audited the general purpose financial statements of the City of Fridley,Minnesota, as of and for the year ended December 31, 1992, and have issued our report thereon dated June 10, 1993. We have applied procedures to test the City of Fridley,Minnesota's compliance with the following requirements applicable to its federal financial assistance programs,which are identified in the schedule of federal financial assistance,for the year ended December 31, 1992. The general requirements tested were: Political Activity Relocation Assistance and Civil Rights Real Property Acquisition Cash Management Allowable Costs/Cost Principles Administrative Requirements Our procedures were limited to the applicable procedures described in the Office of Management and Budget's Compliance Supplement for Single Audits of State and Local Governments. Our procedures were substantially less in scope than an audit,the objective of which is the expression of an opinion on the City of Fridley, Minnesota's compliance with the requirements listed in the preceding paragraph. Accordingly,we do not express such an opinion. With respect to the items tested,the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested,nothing came to our attention that caused us to believe that the City of Fridley, Minnesota had not complied,in all material respects,with those requirements. This report is intended for the information of the City of Fridley,Minnesota and the Federal Cognizant Audit Agency. However,this report is a matter of public record and its distribution is not limited. 7;04,1 Agoefios.4 G.4frt. TAUTGES,REDPATH& CO.,LTD. Certified Public Accountants June 10, 1993 147 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426-7000 • FAX/426-5004 • Member of HLB International TAUTGES, REDPATH & CO., LTD. CERTIFIED PUBLIC ACCOUNTANTS Independent Auditor's Report on Supplementary Information - Schedule of Federal Financial Assistance To the Honorable Mayor and Members of the City Council City of Fridley, Minnesota We have audited the general purpose financial statements of the City of Fridley, Minnesota,for the year ended December 31, 1992,and have issued our report thereon dated June 10, 1993. These general purpose financial statements are the responsibility of the City of Fridley, Minnesota'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 financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Our audit was made for the purpose of forming an opinion on the general purpose financial statements of the City of Fridley, Minnesota,taken as a whole. The accompanying schedule of federal financial assistance is presented for purposes of additional analysis and is not a required part of the general purpose financial statements. The information in that schedule has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and,in our opinion,is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. 0440‘4 TAUTGES,REDPATH&CO.,LTD. Certified Public Accountants June 10, 1993 149 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426-7000 • FAX/426-5004 • Member of HLB International TAUTGES, REDPATH & CO., LTD. CERTIFIED PUBLIC ACCOUNTANTS Compliance Report Based on an Audit of General Purpose Financial Statements Performed in Accordance With Government Auditing Standards To the Honorable Mayor and Members of the City Council City of Fridley, Minnesota We have audited the general purpose fmancial statements of the City of Fridley,Minnesota as of and for the year ended December 31, 1992, and have issued our report thereon dated June 10, 1993. 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. Compliance with laws,regulations,contracts, and grants applicable to the City of Fridley, Minnesota is the responsibility of the City of Fridley,Minnesota's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the City's compliance with certain provisions of laws,regulations,contracts, and grants. However, our objective was not to provide an opinion on overall compliance with such provisions. Accordingly,we do not express such an opinion. The results of our tests indicate that,with respect to the items tested,the City of Fridley,Minnesota — complied,in all material respects,with the provisions referred to in the preceding paragraph. With respect to items not tested,nothing came to our attention that caused us to believe that the City had not complied, in all material respects,with those provisions. This report is intended solely for the use of the City of Fridley,Minnesota and the Federal Cognizant Audit Agency. This restriction is not intended to limit the distribution of this report, .,. which, is a matter of public record. 74e3 rst A 04.4 f t o /ft- - TAUTGES,REDPATH&CO.,LTD. Certified Public Accountants — June 10, 1993 151 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426-7000 • FAX/426-5004 • Member of HLB International Exhibit K-1 CITY OF FRIDLEY, MINNESOTA SCHEDULE OF FEDERAL GRANT INFORMATION For The Year Ended December 31, 1992 Catalog# Accrued Accrued Federal Funding Source/ Federal Revenue at Revenue at Pass Through Agency/ Domestic January 1, Revenue December 31 Program Title Assistance 1992 Recognized Expenditures 1992 -- U.S. Department of Housing and Urban Development: Anoka County: Community Development Block Grant- Entitlement Grant 14.219 $15,703 $116,775 $116,775 $10,109 _ Metropolitan Council Housing and Redevelopment Authority: Housing Assistance Payments Program for Low Income Families 14.156 3,201 35,797 35,797 5,673 Total Department of Housing and Urban Development 18,904 152,572 152,572 15,782 U.S. Department of Health and Human Services: Greater Minneapolis Council of Churches: Special Programs for the Aging-Title Ill, Part C-Nutrition Services 13.635 7,850 7,850 416 U.S. Forest Service: Minnesota Department of Natural Resources: Oak Wilt Suppression Program Subgrant 10.664 6000 6000 Federal Emergency Management _ Association: Minnesota Department of Public Safety: Civil Defense 83.516 5,703 5,703 Total Federal Assistance $18,904 $172,125 $172,125 $16,198 153 Exhibit K-2 CITY OF FRIDLEY, MINNESOTA SCHEDULE OF ASSESSED VALUATION AND LONG-TERM DEBT FOR THE TAX INCREMENT FINANCING DISTRICT — DECEMBER 31, 1992 — Redevelopment District Original Tax Capacity $2,060,387 Current Tax Capacity 4,847,079 — Captured Tax Capacity- retained by the Authority 2,536,327 Bonds Issues: General Obligation Tax Increment Bonds of 1981 $2,200,000 General Obligation Tax Increment Bonds of 1982 625,000 General Obligation Tax Increment Bonds of 1983 600,000 Tax Increment Revenue Refunding Bonds of 1985 4,070,000 General Obligation Tax — Increment Redevelopment Bonds of 1985 11,550,000 General Obligation Tax — Increment Refunding Bonds of 1986 10,045,000 General Obligation Tax — Increment Refunding Bonds of 1990 9,485,000 General Obligation Temp Tax — Increment Bonds of 1992C 4,030,000 Total bonds issued 42,605,000 — Amounts Redeemed: Paid (3,270,000) — Bonds defeased-prior (23,280,000) Total amount redeemed (26,550,000) Outstanding bonds at December 31, 1992 $16,055,000 154 Exhibit K-3 CITY OF FRIDLEY. MINNESOTA SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS — FOR THE TAX INCREMENT FINANCING DISTRICT INCEPTION TO DECEMBER 31. 1992 Current Year Prior Years Total — Sources of Funds: Proceeds of bond sale $4,026,172 $40,199,956 $44,226,128 Tax increments received 2,931,681 12,714,320 15,646,001 Special assessments 112,059 72,591 184,650 Interest on invested funds 469,357 4,635,553 5,104,910 Sale of property 34,363 501,971 536,334 Rental 86,834 463,286 550,120 Home ownership revenue 10,125 10,125 Other 206 307,028 307,234 Total sources of funds 7,660,672 58,904,830 66,565,502 Uses of Funds: Land acquisition 4,749,411 10,787,235 15,536,646 — Building acquisition 1,193,971 1,193,971 Site improvements or preparation costs 116,350 3,956,879 4,073,229 — Installation of public utilities and improvements 1,096,775 1,096,775 Bond payments Principal 265,000 13,935,000 14,200,000 Interest and fiscal charges 884,697 6,780,312 7,665,009 Refunding bond issuance cost 83,655 83,655 Payment to refunded bond escrow agent 9,257,980 9,257,980 Refund to school districts 368,500 786,618 1,155,118 Refund of tax increment overpayment 94,897 94,897 — Administrative costs 265,212 3,315,381 3,580,593 Other 107,461 628,878 736,339 Total uses of funds 6,756,631 51,917,581 58,674,212 — District Balance $904,041 $6,987,249 $7,891,290 155 STATISTICAL SECTION AM. Table 1 CITY OF FRIDLEY. MINNESOTA GENERAL GOVERNMENT EXPENDITURES BY FUNCTION (1) LAST TEN FISCAL YEARS Fiscal General Public Civic Public Community Recreation, Debt Year Government Safety Center Works Development(2) Naturalist Service Total — 1983 $796,799 $2,148,834 $156,708 $1,414,165 $910,204 $773,998 $6,200,708 1984 850,963 2,201,155 149,332 2,054,223 442,917 835,729 6,534,319 1985 985,091 2,270,691 162,220 2,212,406 535,801 768,547 6,934,756 1986 1,877,676 2,576,847 180,839 1,886,888 535,430 1,515,823 8,573,503 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 Notes (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. 157 Table 2 CITY OF FRIDLEY — GENERAL REVENUE BY SOURCE(11 LAST TEN FISCAL YEARS General — Property Taxes& Intergovern- Fiscal Special Licenses mental Charges For Miscellaneous Year Assessments &Permits Revenue Services Revenue Total 1983 $3,552,876 $320,964 $3,145,321 $131,018 $2,212,796 $9,362,975 .. 1984 4,069,579 411,054 3,570,422 145,394 2,247,486 10,443,935 1985 4,269,937 422,606 3,402,703 153,483 2,506,575 10,755,304 1986 4,885,669 358,962 3,652,179 157,829 3,571,207 12,625,846 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 16,146,705 Note (1) Includes General, Special Revenue, Capital Projects and Debt Service Funds. • 158 Table 3 — CITY OF FRIDLEY, MINNESOTA CERTIFIED PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Ratio Current Percent Collection of Total Outstanding Fiscal Certified Tax of Levy of Prior Total Collections Delinquent — Year Tax levy Collections(1X2) Collected Year's Taxes Collections to Tax Levy Taxes 1983 $3,151,324 $3,086,091 97.93% $55,382 $3,141,473 .9969:1 $124,610 — 1984 3,152,952 3,049,773 96.73% 45,490 3,095,263 .9817:1 132,652 1985 3,178,325 3,072,588 96.67% 76,894 3,149,482 .9909:1 150,983 1986 3,232,877 3,152,249 97.51% 44,094 3,196,343 .9887:1 180,738 — 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 (3) Notes — (1) Includes Homestead Credit. (2) Excludes collections from properties pledged to tax increment. (3) Taxes were adjusted$28,502 by Anoka County due to abatements and court ordered settlements. See Footnote 1.F.2. 159 CITY OF FRIDLEY, MINNESOTA ESTIMATED MARKET VALUE AND TAXABLE VALUE OF ALL PROPERTY LAST TEN FISCAL YEARS Fiscal Year Payable 1983 1984 1985 1986 Assessment Year 1982 1983 1984 1985 Population,fiscal year 29,810 29,750 29,440 29,423 Real Property: Estimated market value $776,074,092 $802,180,000 $807,910,500 $839,392,000 Taxable value- Homestead $94,445,737 $94,343,673 $91,923,166 $91,343,841 Excess and non-homestead 126,066,013 130,295,079 132,234,317 143,450,918 Less fiscal disparities contribution (25,629,645) (27,102,595) (29,835,444) (29,730,694) Less tax increment value (3,951,300) (2,765,895) (5,458,497) (9,032,222) Taxable value $190,930,805 $194,770,262 $188,863,542 $196,031,843 Personal property: Estimated market value $19,741,300 $21,263,600 $21,534,300 $26,208,700 Taxable value $8,488,759 $9,143,348 $9,259,749 $11,245,936 — Totals: Estimated market value $795,815,392 $823,443,600 $829,444,800 $865,600,700 — Taxable value $199,419,564 $203,913,610 $198,123,291 $207,277,779 Per market value ratios Taxable value .251:1 .248:1 .239:1 .239:1 Per capita valuations Estimated market value $26,696 $27,679 $28,174 $29,419 Taxable value $6,690 $6,854 $6,730 $7,045 Real property Taxable value- ._ Fiscal disparities distribution $12,509,174 $15,369,625 $18,142,244 $18,296,235 Notes (1) The 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 1989 thru 1992. (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, — 1991 upon which the 1992 levy was based was$20,649,025. 160 Table 4 1987 1988 1989 1990 1991 1992 1986 1987 1988(1) 1989(1) 1990(1) 1991 (1) 29,310 29,336 29,250 28,335 28,313 28,313 $879,498,600 $907,274,900 $941,136,600 $998,231,500 $1,002,812,900 $1,057,532,000 $94,010,922 $94,216,387 $11,864,707 $6,858,848 $7,009,982 $6,763,333 153,262,018 152,658,373 19,425,676 19,728,534 20,147,442 20,555,478 (34,112,779) (37,235,245) (4,351,931) (4,435,055) (4,853,513) (4,684,322) _ (11,348,839) (14,921,389) (2,524,911) (2,368,717) (2,840,385) (3,073,122) $201,811,322 $194,718,126 $24,413,541 $19,783,610 $19,463,526 $19,561,367 - $26,531,000 $26,731,000 $26,452,800 $27,116,700 $27,606,700 $22,917,200 $11,393,525 $11,479,525 $1,385,766 $1,369,388 $1,115,388 $1,087,658 $906,029,600 $934,005,900 $967,589,400 $1,025,348,200 $1,030,419,600 $1,080,449,200 $213,204,847 $206,197,651 $25,799,307 $21,152,998 $20,578,914 $20,649,025 .235:1 .221:1 .027:1 .021:1 .020:1 .019:1 $30,912 $31,838 $33,079 $36,187 $36,393 $38,101 - $7,274 $7,029 $882 $747 $727 $729 $20,639,055 $23,382,622 $3,428,008 $3,817,118 $4,079,539 $3,753,494 161 CITY OF FRIDLEY, MINNESOTA SIGNIFICANT MINNESOTA TAX POLICIES DECEMBER 31, 1992 GENERAL All non-exempt property in Minnesota is subject to taxation by local taxing districts. 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. A tax rate is determined by the County Auditor by dividing each taxing jurisdictions tax levy by the ^ jurisdiction's adjusted net tax capacity. The taxes on a property are then computed by multiplying this tax rate by the property's tax capacity. The schedule below shows some of the major classes of property and their applicable class rates. Type of Property 1992 Class Rates Residential Homestead First $72,000 1.00% $72,000 - 115,000 2.00 Over $115,000 2.50 Commercial/Industrial — First $100,000 3.10 Over $100,000 4.75 Rentals Apartments: 4+ units 3.50 Less than 4 units 3.80 Title II, MFHA, Sect. 8 2.30 Property Tax Refund. Residential property tax credits are gauged by percentages of the net property tax to household income: to the extent a homeowners income (1.2% for incomes below $1,000, up to 4% for incomes of $60,000) homeowners may receive State refunds up to $400. 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 10 percent. The refund is equal to 75 percent of the first $275 of the increase and 90 percent of the increase over $275. ., 162 CITY OF FRIDLEY, MINNESOTA PROPERTY TAX RATES AND CALCULATED TAX LEVIES ALL OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS -, Property Tax Rates(1) School School School School Fiscal District District District District Year City No. 11 No. 13 No. 14 No. 16(2) County 1983 14.908 45.474 50.156 55.679 62.837 26.594 1984 14.340 55.225 56.227 60.332 63.739 28.363 1985 14.654 52.830 50.487 59.675 60.914 27.017 1986 14.256 55.740 53.797 60.919 63.878 28.738 1987 14.555 54.926 63.234 57.087 60.989 29.414 1988 14.992 62.181 60.733 67.454 70.880 30.766 1989 14.995% 51.384% 51.364% 55.193% 53.212% 27.425% 1990 14.995 47.893% 41.329% 43.158% 43.334% 28.846% 1991 15.832% 51.779% 53.249% 49.727% 49.867% 31.400% 1992 15.453% 56.525% 61.847% 58.025% 49.798% 32.990% Certified Levies Calculated Tax Levies - School School School School Fiscal District District District District Year City No. 11 No. 13 No. 14 No. 16(2) County 1983 3,151,324 461,623 2,597,543 5,576,373 3,052,396 5,630,016 1984 3,152,952 563,791 2,960,066 6,228,287 3,310,710 5,728,438 1985 3,163,427 536,388 2,650,406 6,152,690 3,122,134 5,825,992 1986 3,232,877 576,032 2,894,115 6,402,200 3,555,419 6,451,056 "" 1987 3,406,825 585,299 3,522,818 6,298,305 3,500,364 6,864,334 1988 3,440,107 647,200 3,599,278 7,437,847 3,817,013 7,031,655 1989 3,652,452 708,533 3,692,407 7,836,416 3,448,538 7,939,936 -- 1990 4,509,208 566,098 2,930,508 5,953,244 3,097,572 9,883,766 1991 4,751,465 586,640 3,353,377 6,279,991 3,477,136 9,717,317 1992 4,751,465 627,737 3,778,068 6,979,677 3,813,412 9,308,025 - Notes - (1) 1983-1988 tax rates are expressed as mills; 1989-1992 rate is expressed as a tax capacity rate. (2) Vocational/Technical District#916 included in District No. 16. (3) Six Cities Watershed District included with School District No. 11 beginning in 1985. - (4) Rice Creek Watershed District included with School District No. 13,14 and 16. 164 Table 5 Totals Total School School School School - Special District District District District Districts No. 11 (3) No. 13(4) No. 14(4) No. 16(2),(4) - 4.649 91.170 96.307 101.830 108.988 4.916 100.336 101.571 105.676 109.083 5.229 99.480 97.257 106.445 107.684 4.956 103.502 101.673 108.795 111.754 5.761 104.299 112.889 106.742 110.644 5.531 113.334 112.022 118.743 122.169 4.679% 95.813% 95.908% 99.737% 97.756% 4.399% 95.851% 89.554% 91.383% 92.498% 4.767% 103.420% 105.226% 101.704% 101.844% .., 5.119% 109.711% 115.388% 111.566% 103.339% Net _ Total Total Yearly Contribution Tax Total Special All Local Percentage To Metro Increment Tax Districts Tax Levies Change Tax Pool Districts Levies 924,841 21,394,116 (2.02)% 1,402,913 340,539 23,137,568 1,044,451 22,988,695 7.45% 1,209,389 311,160 24,509,244 1,073,929 22,524,966 (2.02)% 1,343,511 573,946 24,442,423 1,080,737 24,192,436 7.40% 1,298,052 867,372 26,357,860 1,269,417 25,447,362 5.19% 1,608,958 993,610 28,049,930 1,246,009 27,219,109 6.96% 1,799,575 1,530,798 30,549,482 - 1,321,824 28,600,106 5.07% 91,973 2,357,865 31,049,944 1,442,262 28,382,658 (.08)% 92,659 2,510,294 30,985,611 1,426,691 29,592,617 4.26% 122,535 2,662,381 32,377,533 "' 1,497,874 30,756,258 3.93% 143,841 3,146,849 34,046,948 165 Table 6 CITY OF FRIDLEY. MINNESOTA SPECIAL ASSESSMENT LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS 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 1983 $845,916 $739,977 87.48% $99,458 $839,435 99.23% $429,947 1984 811,722 710,323 87.51% 144,614 854,937 105.32% 371,951 1985 893,674 802,910 89.84% 133,182 936,092 104.75% 344,254 1986 765,737 730,149 95.35% 143,891 874,040 114.14% 176,879 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% 216,221 S 166 CITY OF FRIDLEY, MINNESOTA HISTORY OF CERTIFIED TAX LEVIES AND TAX RATES LAST TEN FISCAL YEARS 1983 1984 1985 1986 Certified tax levies General Fund $3,070,254 $3,071,882 $3,083,270 $3,141,859 General Debt Service Funds 36,300 36,300 35,175 35,628 Capital Improvement Fund 44,770 44,770 44,982 45,521 Subtotal 3,151,324 3,152,952 3,163,427 3,223,008 Agency Fund 14,898 9,869 Total $3,151,324 $3,152,952 $3,178,325 $3,232,877 -. Mill rate(1983-1988);Tax Capacity Rate(1989-1992) General Fund 14.525 13.970 14.283 13.895 — General Debt Service Funds 0.172 0.166 0.163 0.158 Capital Improvement Fund 0.211 0.204 0.208 0.203 Subtotal 14.908 14.340 14.654 14.256 Agency Fund 0.240 0.074 Total 14.908 14.340 14.894 14.330 • 168 Table 7 1987 1988 1989 1990 1991 1992 $3,311,826 $3,345,190 $3,556,166 $4,421,519 $4,660,276 $4,535,276 85,542 86,320 87,689 87,689 87,689 87,689 3,397,368 3,431,510 3,643,855 4,509,208 4,747,965 4,622,965 - 9,457 8,597 8,597 3,439 3,500 3,500 $3,406,825 $3,440,107 $3,652,452 $4,512,647 $4,751,465 $4,626,465 14.188 14.614 12.192% 14.705% 15.548% 15.020% 0.367 0.378 0.300% 0.290% 0.284% 0.312% - 14.555 14.992 12.492% 14.995% 15.832% 15.332% 0.075 0.066 0.052% 0.015% 0.022% 0.022% - 14.630 15.058 12.544% 15.010% 15.854% 15.354% 169 CITY OF FRIDLEY, MINNESOTA RATIO OF NET GENERAL BONDED DEBT TO TAXABLE VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS ., Deduct City Debt Special Total Service Fund Assessment, Fiscal Taxable Gross Monies Revenue and Year Population Value Bonded Debt Available HRA Bonds 1983 29,810 $199,419,654 $8,285,000 $84,240 $8,180,000 1984 29,750 203,913,610 7,470,000 86,709 7,400,000 1985 29,440 198,123,291 22,125,000 86,117 22,090,000 1986 29,423 207,277,779 34,035,000 91,510 34,035,000 1987 29,310 213,204,847 33,195,000 -0- 33,195,000 — 1988 29,336 206,197,651 31,845,000 -0- 31,845,000 1989 29,250 25,799,307 (1) 30,060,000 -0- 30,060,000 1990 28,335 21,152,998 (1) 15,765,000 -0- 15,765,000 "' 1991 28,313 20,578,914 (1) 17,715,000 -0- 17,715,000 1992 28,313 20,649,025 (1) 22,470,000 -0- 22,470,000 Notes — (1)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- 1992. -- 170 Table 8 Ratio of Net General Bonded Net General Net General Debt to Total Bonded Debt Bonded Debt Taxable Value Per Capita $20,760 0.01% $0.70 -0- - - -0- - - _. -0- - - -0- - - -0- - - -0- - - -0- - - -0- - - -0- - - - 171 Table 9 CITY OF FRIDLEY,MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN DECEMBER 31, 1992 Market Value $1,080,449,200 (A) Debt Limit 2% of Market Value $21,608,984 Amount of Debt Applicable to Debt Limit: — Total Bonded Debt $22,605,000 (B) Deductions: -, Tax Increment Redevelopment Bonds $16,055,000 Special Assessment Bonds 4,215,000 Revenue Bonds 2,200,000 Construction 135,000 22,605,000 Total Amount of Debt Applicable to Debt Limit -0- Legal Debt Margin $21,608,984 Notes (A) M.S.A. Section 475.53(see following page) (B) M.S.A. Section 475.51 (see following page) 172 CITY OF FRIDLEY. MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN (CONTINUED) YEAR ENDED DECEMBER 31. 1992 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, and public lighting, heating or power systems, and of 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.' 173 Table 10 CITY OF FRIDLEY. MINNESOTA COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT AND COMPARATIVE DEBT RATIOS DECEMBER 31. 1992 Debt % of Debt Net Debt Gross Service Net Applicable Applicable Governmental Unit Debt Funds Debt to City to City Direct and overlapping debt Direct debt: City of Fridley $22,470,000 $14,052,455 $8,417,545 100.00% $8,417,545 Overlapping debt: School Districts No. 11 $60,913,635 $5,805,907 $55,107,728 1.16% $639,250 No. 14 150,000 215,912 No. 16 5,100,000 569,397 4,530,603 36.80% 1,667,261 Metro Transit 5,850,000 2,900,000 2,950,000 1.29% 38,055 — Metro Council 424,975,000 100,967,755 324,007,245 1.19% 3,855,686 Anoka County 88,855,712 37,781,913 51,073,799 18.04% 9,213,713 North Suburban Hospital District 13,768,960 827,350 12,941,610 44.73% 5,788,782 Vocational/Technical — District No. 916 11,060,000 83,806 10,976,194 2.21% 242,574 Overlapping debt 610,673,307 149,152,040 461,587,179 21,445,321 Total direct and overlapping debt $633,143,307 $163,204,495 $470,004,724 $29,862,866 174 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 Ratio of Debt Total Total Service to Fiscal Debt General General Year Principal Interest Service Expenditures(1) Expenditure 1983 $35,000 $738,998 $773,998 $6,200,708 .1248.1 1984 85,000 750,729 835,729 6,534,319 .1279.1 1985 120,000 648,547 768,547 6,934,756 .1108.1 1986 215,000 1,300,823 1,515,823 8,573,503 .1768.1 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 15,789,169 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 Notes (1) Includes General, Special Revenue, Debt Service and Capital Projects. 175 Table 12 CITY OF FRIDLEY, MINNESOTA REVENUE BOND COVERAGE LAST TEN FISCAL YEARS -y Net ., Operating Revenue Direct Direct Available Fiscal Operating Operating For Debt Debt Service Requirements Year Revenue (1) Expenses (2) Service Principal Interest Total Coverage 1983 $1,928,973 $1,850,966 $78,007 $50,000 $8,659 $58,659 1.33 1984 2,401,206 2,043,653 357,553 50,000 6,907 56,907 6.28 1985 2,296,415 2,253,164 43,251 50,000 5,152 55,152 0.78 1986 2,434,100 2,522,048 (87,948) 50,000 3,400 53,400 - 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 - Notes (1) Total operating revenue exclusive of interest on investments. (2) Total operating expenses including depreciation. 176 Table 13 CITY OF FRIDLEY. MINNESOTA DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS Annual Average Fiscal Per Capita Median School Unemployment Year Population(1) Income Age(4) Enrollment(3) Rate(5)(6) 1983 $29,810 $9,188 28.3 5,238 7.4% 1984 29,750 9,647 28.6 5,007 5.0% 1985 29,440 10,129 28.9 4,833 4.9% _ 1986 29,423 10,635 29.2 4,660 4.3% 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 (7) 32.6 (2) 4,371 4.5% 1991 28,313 16,347 32.6 (2) 4,392 4.5% 1992 28,313 (8) 16,055 32.6 (2) 4,361 4.1% Sources: (1) 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 by property tax dollars — (4) Source book of Demographic and Buying Power (5) Minnesota Department of Economic Security-Twin Cities Labor Market (6) 1983- 1989 Unemployment Rate as reported is area wide for the County of Anoka rather than for the City of Fridley (7) National Planning Data Corporation (8) 1992 estimate was not available at the time of publication 177 Table 14 CITY OF FRIDLEY, MINNESOTA CONSTRUCTION, BANK DEPOSITS AND PROPERTY VALUE LAST TEN FISCAL YEARS Commercial Construction Residential Construction Estimated Market Value Number Number Bank(1) Fiscal of of Deposits Taxable Non- Year Units Value Units Value (Thousands) Property Taxable(2) Total 1983 48 $8,921,297 348 $2,969,417 $26,099 $795,815,392 $110,559,039 $906,374,431 1984 67 19,332,432 345 4,388,689 27,917 823,443,600 110,559,039 934,002,639 1985 54 12,729,783 365 5,430,598 24,074 829,444,800 110,559,039 940,003,839 1986 41 10,871,941 379 5,409,450 27,025 865,600,700 177,123,840 1,042,724,540 1987 54 9,845,600 435 23,413,715 33,201 906,029,600 177,123,840 1,083,153,440 1988 70 17,421,494 340 3,660,384 29,030 934,005,900 177,123,840 1,111,129,740 1989 93 30,529,963 301 3,522,035 30,329 967,589,400 177,123,840 1,144,713,240 1990 83 12,883,850 349 3,321,362 29,902 1,025,348,200 177,123,840 1,202,472,040 1991 75 11,946,068 360 2,525,711 33,520 1,030,419,600 177,123,840 1,207,543,440 1992 73 10,329,409 407 2,873,240 48,098 1,080,449,200 177,123,840 1,257,573,040 Sources: (1) Fridley State Bank (2) Non-taxable property is reevaluated by the city assessors every six years 178 Table 15 CITY OF FRIDLEY. MINNESOTA PRINCIPAL TAXPAYERS DECEMBER 31. 1992 Fiscal Year 1992 Percent 1991* of Total '— Taxable Taxable Rank Taxpayer Type of Business Valuation Valuation** 1 Dayton Hudson Target discount store,warehouse and office $1,521,238 5.35% 2 Medtronic, Inc. Electro-medical devices 1,090,850 3.84% _ 3 Onan Corporation Portable electric generators 866,351 3.05% 4 Burlington Northern Railroad Operating property 695,875 2.45% 5 FMC Corporation Naval ordinance 683,732 2.41% 6 Dow Brands Cosmetics 542,942 1.91% 7 Maurice Fillister Georgetown apartments 371,000 1.31% 8 University Avenue Associates Springbrook apartments 317,293 1.12% 9 East River Road Business Center Business and retail complex 301,538 1.06% 10 Holiday Plus Discount department store 261,291 0.92% Total $6,652,110 23.42% Notes * The 1992 levy was based upon the January 2, 1991 taxable value. ** Before contribution to Metropolitan Tax Pool and tax increment financing 179 CITY OF FRIDLEY. MINNESOTA INSURANCE COVERAGE, DECEMBER 31. 1992 All risk perils, 100% coinsurance Buildings and contents Blanket, agreed amount endorsement, replacement cost coverage $21,676,727 Contractor's equipment 986,325 Boiler and machinery 3,000,000 Municipal general liability Each occurrence limit 600,000 Products/completed operations aggregate limit 600,000 Fire damage limit 50,000 Medical expense limit 1,000 ... Medical expense aggregate occurrence limit 10,000 Limited pollution liability 600,000 Automobile liability Liability 600,000 Personal injury protection 40,000 Uninsured/underinsured motorist 600,000 Comprehensive Actual cash value Liquor liability Bodily injury Each person 1,000,000 Each occurrence 1,000,000 Property damage Each occurrence 1,000,000 Loss of means of support 1,000,000 — Law Enforcement professional liability Combined single limit per loss Personal injury, bodily injury, property damage, punitive damages 600,000 Municipal errors and omissions liability 600,000 Employee benefit programs liability 600,000 — Worker's compensation Statutory PRINCIPAL OFFICIALS' BONDS DECEMBER 31. 1992 All employees are covered by a blanket of faithful performance bond of$100,000. 180 CITY OF FRIDLEY. MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION DECEMBER 31. 1992 Date of Incorporation(Village of 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 - Federal Presidential November 3, 1992 Registered voters 19,837 Number of votes cast 15,553 Percent(%)of registered voters voting 78.4% 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 — 1985 Estimated by Metropolitan Counci 29,440 1986 Estimated by Metropolitan Counci 29,423 1987 Estimated by Metropolitan Counci 29,310 1988 Estimated by Metropolitan Counci 29,336 1989 Estimated by Metropolitan Counci 29,250 1990 Federal Census 28,335 1991 Estimated by Metropolitan Counci 28,313 _ 1992 Estimated by Metropolitan Counci 28,313 Permanent Employees--As of December 31 Number _ 1982 123 1983 119 1984 119 1985 125 1986 125 1987 125 1988 126 1989 126 1990 126 1991 137 1992 137 181 CITY OF FRIDLEY, MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION (CONTINUED) DECEMBER 31, 1992 Fire protection Number of stations 3 Volunteer firefighters 33 Full-time firefighters 5 Fire rating Class 3 ., Police protection Number of stations 1 Number of sworn officers 33 Number of street lights 1,038 ., Number of traffic signal installations 33 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 125.64 Trunk highways 10.79 County roads 14.56 Sidewalks 10.98 Miles of sewer Storm 42.76 Sanitary 102.93 Miles of water mains 111.94 Municipal water system source City of Fridley Water Plant (13 wells)--capacity of 15 million gallons per day Number of water connections December 31, 1992 8,235 connections — Daily average consumption(gallons) 5.2 million gallons Elevated storage capacity 2 million gallons Water storage reservoirs 4.5 million gallons Number of fire hydrants 1,075 Municipal sewer system Disposal--through Metropolitan Waste Control Commission Number of connections December 31, 1992 7,987 -- Average daily flow(includes infiltration/inflow) 5.1 million gallons 182 CITY OF FRIDLEY. MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION (CONTINUED) DECEMBER 31. 1992 Parks and Recreation Areas City 316 Acres County 282 Acres Total 598 Acres City and County Parks Schools Total Number of: — Hockey rinks 6 2 8 General skating rinks 15 2 17 Playgrounds 29 4 33 Swimming beaches 1 0 1 Swimming pools 0 1 1 Day camp sites 1 0 1 Baseball diamonds 4 3 7 Softball diamonds 24 7 31 Outdoor basketball courts 19 4 23 Tennis courts 24 19 43 Horseshoe courts 16 0 16 Archery ranges 1 0 1 Permanent playground buildings 3 0 3 Permanent picnic shelters 12 0 12 Soccer/football fields 7 8 15 183 CITY OF FRIDLEY, MINNESOTA GENERAL INFORMATION DECEMBER 31, 1992 Location - Transportation The City of Fridley, with a total land area of eleven square miles and an estimated population of 28,313, is located at the northern boundaries of Minneapolis and Columbia Heights, about eight miles from the Minneapolis central business district. Freight service is provided in the area by local and interstate — truck lines and Burlington Northern Railroad. Commuter 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 air 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 No. 14. The Fridley School District operates two elementary schools, a '- junior high and senior high school, employing 167 certified personnel in the education of about 2,564 students. Grace Parochial High School has an enrollment of approximately 867. Portions of the Columbia Heights School District (13), the Spring Lake Park School District (16) and Anoka/Hennepin School District (11) also lie within the City of Fridley. Those districts have an estimated enrollment of 1,800 students living within the City of Fridley. Colleges and universities, vocational-technical and specialized training schools are located throughout the metropolitan area within easy commuting distances of Fridley. 184 CITY OF FRIDLEY, MINNESOTA GENERAL INFORMATION (CONTINUED) DECEMBER 31. 1992 Larder Employers Larger employers in the City of Fridley include: Full-Time Employer Product or Service Employees FMC Corporation Pumps and naval ordinance 2,100 Onan Corporation Portable generators, electronic equipment 1,600 Medtronics, Inc. Electro-medical devices and hdqtrs. 1,808 Unity Hospital Medical services 1,376 Burlington Northern Railroad Northtown yard 1,000 Target Stores,Warehouse Discount department store 841 Minco Products, Inc. Electronic devices 597 Kurt Manufacturing Machine parts 510 Dow Brands Cosmetics 435 Independent School District#14 Fridley school district 350 McGlynn's Bakery 300 Safetran Systems Corporation Railroad accessories 244 Longview Fiber Company Packaging supplies 165 185