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1987 CAFR COMPREHENSIVE MiliFj ANNUAL FINANCIAL REPORT . . . . ,, .,, „ ,,. ....•.....„.A . .• : ra, it �r � .,t'''''' I -;- 2'-_ter/ ' ►' 74' 4%- � Air , ter •• b " 4 - 1) �.- _ ,r. _ ..,,,--- 5.— -011 -t-' —te:.. " - 4.:. FOR THE YEAR ENDED DECEMBER 31, 1987 CITY OF FRIDLEY , MINNESOTA CITY OF FRIDLEY, MINNESOTA Comprehensive Annual Financial Report December 31 , 1987 i i �. Prepared by: Department of Finance Richard D. Pribyl Director of Finance Julie M. Burt Assistant Finance Director CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1987 TABLE OF CONTENTS EXHIBIT PAGE INTRODUCTORY SECTION List of Elected and Appointed Officials 1 Organizational Structure 2 City Manager's Letter of Transmittal 5 Chief Executive Officer's Letter of Transmittal 7 Certificate of Achievement for Excellence in Financial Reporting 27 FINANCIAL SECTION Auditors' Opinion 29 General Purpose Financial Statements .� Combined Financial Statements - Overview Combined Balance Sheet - All Fund Types and Account Groups A-1 32 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental -• Fund Types and Expendable Trust Funds A-2 36 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General and Special Revenue Fund Types A-3 38 Combined Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Types A-4 40 Combined Statement of Changes in Financial Position - All Proprietary Fund Types A-5 41 Notes to Financial Statements 42 Financial Statements of Individual Funds: General Fund: Comparative Balance Sheet B-1 75 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual B-2 76 '-' Schedule of Revenues and Other Financing Sources - Budget and Actual B-3 77 Schedule of Expenditures and Other Financing Uses - Budget and Actual B-4 79 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1987 _ TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE Special Revenue Funds: Combining Balance Sheet C-1 84 Combining Statement of Revenues, Expenditures _ and Changes in Fund Balances C-2 86 Municipal State Aid Fund: Comparative Balance Sheet C-3 88 Statement of Revenues, Expenditures and _, Changes in Fund Balance - Budget and Actual C-4 89 Revenue Sharing Fund: Comparative Balance Sheet C-5 90 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-6 91 Cable TV Fund: Comparative Balance Sheet C-7 92 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-8 93 Grant Management Fund: Comparative Balance Sheet C-9 94 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-10 95 HRA Reimbursement Fund: _ Comparative Balance Sheet C-11 96 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-12 97 Debt Service Funds: — Combining Balance Sheet D-1 99 Combining Statement of Revenues, Expenditures and Changes in Fund Balances D-2 100 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1987 TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE Capital Projects Funds: Combining Balance Sheet E-1 104 Combining Statement of Revenues, Expenditures and Changes in Fund Balances E-2 106 Enterprise Funds: Combining Balance Sheet F-1 111 Combining Statement of Revenues, Expenses and Changes in Retained Earnings F-2 112 OM. Combining Statement of Changes in Financial Position F-3 113 Liquor Fund: Comparative Balance Sheet F-4 114 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings F-5 115 Comparative Statement of Changes in Financial Position F-6 116 Public Utilities Fund: Comparative Balance Sheet F-7 117 _ Comparative Statement of Revenues, Expenses and Changes in Retained Earnings F-8 118 Comparative Statement of Changes in Financial Position F-9 119 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1987 TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE –' Internal Service Funds: Combining Balance Sheet G-1 122 Combining Statement of Revenues, Expenses and Changes in Retained Earnings G-2 124 Combining Statement of Changes in Financial Position G-3 126 — Employee Benefits Fund: Comparative Balance Sheet G-4 128 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-5 129 Comparative Statement of Changes in Financial Position G-6 130 _ Management Information Services Fund: Comparative Balance Sheet G-7 131 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-8 132 Comparative Statement of Changes in Financial Position G-9 133 Self Insurance Fund: Comparative Balance Sheet G-10 134 — Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-11 135 _ Comparative Statement of Changes in Financial Position G-12 136 Trust and Agency Funds: Combining Balance Sheet H-1 137 -- Trust Fund Comparative Statement of Revenues, Expenditures and Changes in Fund Balance H-2 138 ,^ CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1987 TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE Agency Funds Combining Statement of Changes in Assets and Liabilities H-3 139 Statement of Changes in Assets and Liabilities for Individual Funds Six Cities Watershed H-4 140 Hotel/Motel H-4 140 Deferred Compensation H-5 141 General Fixed Assets: Comparative Statement of General Fixed Assets I-1 143 Schedule of General Fixed Assets - By Function and Activity I-2 144 Schedule of Changes in General Fixed Assets - By Function and Activity I-3 145 General Long-Term Debt: Comparative Statement of General Long-Term Debt J-1 147 STATISTICAL SECTION TABLE PAGE General Governmental Expenditures by Function - Last Ten Fiscal Years 1 149 " General Revenues by Source - Last Ten Fiscal Years 2 150 Certified Property Tax Levies and Collections - ,_, Last Ten Fiscal Years 3 151 Assessed and Estimated Market Value of All Taxable Property - Last Ten Fiscal Years 4 152 Statement of Valuations and Levies By Classes of Property 5 154 CITY OF FRIDLEY, MINNESOTA — COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1987 TABLE OF CONTENTS (CONTINUED) — TABLE PAGE — Significant Minnesota Tax Policies 156 Property Tax Rates Per $1,000 of Assessed Value and Calculated Tax Levies - All Overlapping Governments - Last Ten Fiscal Years 6 158 Special Assessment Levies and Collections - Last Ten Fiscal Years 7 160 History of Certified Tax Levies and Actual Mill Rates - Last Ten Fiscal Years 8 162 Ratio of Net General Bonded Debt to Assessed Values and net Bonded Debt Per Capita - Last Ten Fiscal Years 9 164 Computation of Legal Debt Margin 10 166 Computation of Direct and Overlapping Bonded Debt — and Comparative Debt Ratios 11 168 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Government -- Expenditures - Last Ten Fiscal Years 12 169 Revenue Bond Coverage - Last Ten Fiscal Years 13 170 _ Demographic Statistics - Last Ten Fiscal Years 14 171 Construction, Bank Deposits and Property Value - — Last Ten Fiscal Years 15 172 Principal Taxpayers 16 173 — Insurance Coverage 174 Miscellaneous Statistical Information 175 General Information 178 SUPPLEMENTAL INFORMATION EXHIBIT PAGE Schedule of Assessd Valuation and Long-Term Debt — for the Tax Increment Financing District K-1 181 Schedule of Sources and Uses of Public Funds _ for the Tax Increment Financing District K-2 182 INTRODUCTORY SECTION I CITY OF FRIDLEY, MINNESOTA ELECTED AND APPOINTED OFFICIALS DECEMBER 31, 1987 ELECTED OFFICIALS Term of Office — Expires December Mayor William J. Nee 1989 Councilmember At Large Nancy J. Jorgenson 1989 Councilmember, Ward I Brian A. Goodspeed 1987 Councilmember, Ward II Dennis L. Schneider 1988 Councilmember, Ward III Edward J. Fitzpatrick 1987 Effective January 1988 — Mayor William J. Nee 1989 Councilmember At Large Nancy J. Jorgenson 1989 Councilmember, Ward I Steven E. Billings 1990 Councilmember, Ward II Dennis L. Schneider 1988 Councilmember, Ward III Edward J. Fitzpatrick 1990 APPOINTED OFFICIALS City Manager - Nasim M. Qureshi City Attorney - Virgil C. Herrick Prosecuting Attorney - Carl J. Newquist Treasurer - Richard D. Pribyl — City Clerk - Shirley A. Haapala Department Heads: Director of Finance - Richard D. Pribyl Director of Public Safety and Civil Defense Director - James P. Hill Fire Chief - Robert D. Aldrich Director of Public Works - John G. Flora Director of Recreation and Natural Resource - Jack G. Kirk Director of Community Development - John L. Robertson — Division Heads: Public Works Superintendent - Ralph S. Volkman Chief Building Official - Darrel G. Clark — City Planner - James L. Robinson Liquor Stores Manager - Kathleen L. Schmitz 1 _.,__________________...__.___________._.._____ imi CITY ADMINISTRATIVE CITY OF FRIDLEY Total Authorized Positions (125) CITY MANAGER (7) — City Manager - Asst to City Manager - Administrative Asst - - Management Assistant - City Clerk - Administrative Secretary - Clerk-Typist 1 1 FINANCE (20) POLICE (42) FIRE (6) Finance Director-Treasurer Assistant City Manager- Fire Chief — Public Safety Director- - MIS Technician Civil Defense Director - Dep Fire Chief - Acctg-Data Proc Clk L Secretary - Captain — - Receptionist-Lic Clk - Dep Pub Safety Dir - (2) Firefighter - Records Retention Spec. - Lieutenant - Clk Typist II (Civil Defense) — ACCOUNTING (9) - (3) Sergeant Asst Finance Director - (3) Corporal - Staff Accountant - -- (23) Patrol Officer - Accounting Specialist - Pub Sfty Projects Coor - Sr Utility Billing Clk - Crime Prey Spec - - General Accountant - Office Supervisor - Acctg-Data Proc Clk - (2) Senior Office Asst -_ Acctg-Data Input Clk - (4) Office Asst Acctg-Data Input Clk ASSESSING (3) Assessor Appraiser [ ■ •■ Tax Assessment Clk LIQUOR (4) — L4 Store Manager - Head LQ Clerk - LQ Store Clerk — - LQ Store Clerk 2 ORGANIZATIONAL STRUCTURE 1987 � 1 I PUBLIC WORKS (38) RECREATION & NATURALIST (5) COMMUNITY DEVELOPMENT (6) Director of Public Works Director of Recreation & Nat pirector of Comm Devel-HRA r ` Oper Analyst ` Secretary CODE ENFORCEMENT (3) Secretary Chief Bldg Official —NATURALIST (2) —ENGINEERING (3) Nat-Res Coordinator Plumbing Inspector Asst Pub Works Dir Interpretive Specialist Secretary Engineering Tech —RECREATION (1) Engineering Aide-Admin. L PLANNING (2) Program Supervisor (Planning Coordinator — —PW MAINTENANCE (32) L Planning-Code Enf. Clerk Superintendant L Secretary Stleet Foreman Water Foreman Sewer Foreman Park iLoreman - (3) Maint III - (2) Maint III - (1) Maint III - (2) Opr & Maint Spec - (1) Opr & Maint Spec - (2) Opr & Maint Spec - (5) Maint II - (2) Maint II - (1) Maint II - (3) Maint II (2) Maint I - (1) Maint I - (1) Maint I 3 CITYOF FRIDLEY CIVIC CENTER • 6431 UNIVERSITY AVE. N.E. FRIDLEY, MINNESOTA 55432 • PHONE(612)571-3450 May 4, 1988 The Honorable Mayor and City Council City of Fridley Fridley, Minnesota 55432 Gentlemen: In accordance with the Charter, we hereby transmit the _ Comprehensive Annual Financial Report of the City of Fridley for the year ending December 31, 1987. The Report includes an excellent and comprehensive letter -' from Mr. Richard D. Pribyl, Director of Finance and Julie M. Burt, Assistant Finance Director, which assists in a ready understanding of the various accounts and funds and matters covered by the Report. I 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 also 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, 14.44:4 -- Nasim M. Qureshi City Manager 5 MY OF FRIDLEY CIVIC CENTER • 6431 UNIVERSITY AVE. N.E. FRIDLEY,MINNESOTA 55432 • PHONE(612)571-3450 May 4, 1988 Mr. Nasim M. Qureshi, City Manager _. Mayor William J. Nee and Council Members Fridley, Minnesota 55432 Dear Mr. Qureshi, Mayor Nee and Council Members: The Comprehensive Annual Financial Report of the City of Fridley Minnesota, for the fiscal year ending December 31, 1987, 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 1986. It is our belief that the accompanying fiscal year 1987 financial report continues to meet program standards and it will be submitted to the Government Finance Officers Association for review. The 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 statistical section which includes the previous year's financial and non-financial data. Section IV is the supplemental information section which includes information regarding tax increment financing activity. 7 CITY OF FRIDLEY, MINNESOTA Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures , rests with the City. We believe the data as presented is accurate in all material aspects, that it is presented in a manner designed to fairly set _- forth the financial position and results of operations of the City as measured by the financial activity of its various funds , and that all disclosures necessary to enable the reader to gain the maximum understanding of the City's — financial activity have been included. ACCOUNTING SYSTEM AND BUDGETARY CONTROL The accounting sytem provides for a complete self-balancing group of accounts for each fund of the City. Accounting records are maintained on the modified accrual basis of accounting for the governmental type funds and the trust and agency funds , and the accrual basis of accounting is utilized for the proprietary type funds as defined in the notes to the financial statements. — 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 judgements 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. 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. THE REPORTING ENTITY AND ITS SERVICES The City's financial statements include all funds , account groups , departments, agencies, boards, commissions, and other organizations over which City officials exercise oversight responsibility. 8 CITY OF FRIDLEY, MINNESOTA Oversight responsibility includes such aspects as appointment of governing body members, approval of property tax levies, outstanding debt secured by the City's full faith and credit or revenues , and responsibility for funding deficits. As a result of applying the entity definition criteria of the Governmental Accounting Standards Board, certain organizations have been included or excluded from the City's financial statements, as follows: Included The Fridley Housing and Redevelopment Authority (HRA) is a separate legal entity. The chairperson and board of commissioners is appointed by the Council and is under their immediate control . As such the activities of this board are included as part of this financial statements. Excluded The Fridley School Districts, (Independent School District Nos. 11, 13, 14 and 16) all reside wholly within the City of Fridley or overlap within the City boundaries. Like all school districts in Minnesota, they are completely independent of any governmental entity. It has its own elected Board of Education, levies its own taxes, and prepares . its own financial reports. The Fridley Police Relief Association and the Fridley Volunteer Firefighters Relief Association are organized as non-profit organizations by their memebers 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 respective associations. All funding is conducted in accordance with Minnesota statutes, whereby state aids flow to the associations, tax levies are determined by the associations and 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 the reporting entity. (See Notes 11 and 12 for _ disclosures relating to the pension plans operated by the associations. ) Based on criteria set forth by the National Council on Governmental Accounting Statement No. 3, Defining the Governmental Entity, the City does not exercise oversight responsibility over the Independent School District Nos. 11 , 13 , 14 and 16 , Fridley Police Relief Association or the Fridley Volunteer Firefighters Relief Association, therefore , financial statements for these entities are not included in this report. The City provides a full range of municipal services. These include police, fire, parks and recreation, public improvements, street maintenance, sanitary sewer and water utilities, liquor sales, planning and general administrative services. 9 CITY OF FRIDLEY, MINNESOTA CITY FINANCIAL PROSPECTS FOR THE FUTURE The financial position of the City has remained sound over the past year, with actual results exceeding original estimates. The financial outlook for the -- future also looks good considering our stable condition. The City of Fridley is an older metropolitan community and with the help of — the Housing and Redevelopment Authority has been successful in attracting many redevelopment projects to the City in the past, and for the future. During 1987, the Springbrook Apartments were completed and have added roughly $7 . 5 — million in assessed value to our tax base. Other projects that are currently in the works include the Northwest Racquet and Swim Club with an estimated assessed value of $10 million and the revitalization of the Shorewood Plaza shopping center with an estimted $3 million in assessed value upon completion. During 1987, negotiations continued on a proposed project that will provide a unique combination of senior housing with retail and commercial office space. Also during the year, site improvements neared completion for a multimillion dollar office complex. In keeping with the external revitalization of the community, the City has -- been making plans for its own infrastructure improvements . Over the years , fund balances have been building in anticipation of this reinvestment that should increase the efficiency of internal staff along with improved — accessability and efficiency in serving the public. Early in the year, architects were hired to review existing space needs in _ City Hall and propose a plan for remodeling. The plans were revised several times and final plans for expansion and remodeling were approved by year end. Actual construction shall begin in mid 1988. Consultants were also hired to review the records management function of the City. The proposal was made and — accepted to implement a central filing system along with a complete database of all files in the City and an updated disaster recovery plan. A records retention specialist was hired to coordinate and implement these plans . The — first phase is the development of a state approved retention schedule and the destruction of obsolete files. Actual implementation of the central filing system will be delayed and incorporated with the remodeling of City Hall. Also early in the year, a computer consultant was hired to review the current management information operations and assess future needs. Later in the year our financial software vendor went out of business and unfortunately the — current system has not met our needs satisfactorily for the past couple of years. While the existing vendor had plans to upgrade their systems they were unable to follow through. Consequently, we are left with no alternative but _ to acquire new software. In conjunction with this decision, both the hardware and software needs of all departments are being assessed so that we will have a cohesive and efficient system in the end. The undertaking of these projects will result in reduced investment earnings which has been taken into consideration for the planning of future budgets . The City feels this is an investment in itself, with benefits that will .... outweigh the lost revenue. 10 CITY OF FRIDLEY, MINNESOTA 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 ranged from 6. 32% to 13.4% during the year. The 1987 earnings, shown with prior years ' earnings, were distributed to the following fund types: 1987 1986 1985 1984 General $ 409,560 $ 459,024 $ 444,013 $ 397,975 Special Revenue 123,632 150,254 143,946 237,632 Debt Service 977,502 1,202,572 790,618 842,741 Capital Projects 921,014 1,099,624 371,826 236,683 •• Enterprise 421,601 493,004 459,648 454,084 Internal Service 97,356 115,560 103,455 77,818 Expendable Trust 5,051 7,526 1,486 3,725 $2,955,716 $3,527,564 $2,314,992 $2,250,658 ... DEBT ADMINISTRATION Net general bonded debt per capita, and the percentage of the net general bonded debt to assessed value are useful indicators of the City ' s debt position. At December 31, 1987 the City of Fridley' s debt service funds provided more capital than necessary to cover the net general bonded debt. When reviewing the following schedule, it is important to note that the two 1985 Variable Rate issues have in accordance with state statues and the opinion of legal counsel been effectively defeased with the issuance of the ._ 1986 fixed rate Crossover Bonds. The proceeds from the Crossover Bonds are held in trust with an escrow agent to pay for 85% of the principal of the Variable Rate Bonds and 100% of the interest on themselves . Funds to retire the remaining 15% percent of principal on the Variable Rate Bonds have been reserved in the Debt Service Fund. It is the opinion of the Governmental Accounting Standards Board that it is ^, not possible to defease variable rate debt due to the uncertainty of the interest. On the other hand, it is the opinion of the City and its bond counsel that with the issuance of the Crossover Bonds we have eliminated that uncertainty. If variable rates were to rise to a level greater than those on '-' the fixed rates, we would crossover or completely refund the Variable Rate Bonds. 11 CITY OF FRIDLEY, MINNESOTA Remaining Date of Amount Years Interest Issue Outstanding of Issue Rate — 1986 10,045,000 13 6.00 - 7.40% 1986 2,705,000 13 6.00 - 7.40% 1985 11,550,000 13 Variable - Max. 10% -- 1985 3,100,000 13 Variable - Max. 11% 1985 3,700,000 12 6.25 - 9.00% 1982 790,000 12 9.20 - 10.70% — 1980 850,000 14 8.10 - 8.40% 1977 100,000 2 4.80 - 4.90% 1976 75,000 3 5.60 - 6.00 1975 10,000 2 6.00% 1972 300,000 6 5.20 - 5.30% 1965 20,000 1 3.40% $33,245,000 — None of the above debt are demand bonds. The City of Fridley has, since 1982, maintained a credit rating of a Aal on its long-term bonds. As of December 31, 1987, the City had issued $83,115,000 in Industrial Revenue Bonds which are permitted under Minnesota Statutes, Chapter 474. Listed below are the bonds issued: Company Date of Issue Amount Safetrans 03/21/77 $ 1,500,000 — Perlman Rocque 05/07/79 2,500,000 Medtronics 11/05/79 1,000,000 Simer Pump 06/02/80 550,000 _ G. T. A. 10/20/80 6,000,000 Win-Stevens Datsun, Inc. 01/12/81 600,000 WWH Properties 11/23/81 1,250,000 Webb Company 12/14/81 9,000,000 — LaMaur, Inc. 02/02/82 1,000,000 Gerald Paschke I 05/03/82 750,000 Columbia Park Properties 06/07/82 4,000,000 — Kuether Distributing, Inc. 10/04/82 2,000,000 73rd Avenue Partnership 10/25/82 1,500,000 ELO Engineering 09/12/83 1,300,000 _ Skywood Mall 11/21/83 7,000,000 Frank Shear Associates 12/19/83 2,175,000 Johnson Printing 12/19/83 2,400,000 Gerald Paschke III 03/26/84 990,000 — Longview Fibre Company 03/26/84 3,200,000 River Road Investors 07/16/84 6,190,000 North Freeway Investors 07/16/84 7,730,000 _ Gerald W. Paschke, IV 07/01/85 720,000 Columbia Park Properties 12/16/85 4,360,000 Fridley Business Plaza 09/22/86 2,800,000 53rd Way Investors 10/06/86 6,300,000 Industrial Boulevard Investors 10/06/86 6,300,000 $83,115,000 12 CITY OF FRIDLEY, MINNESOTA These Industrial Revenue Bonds are not a liability of the City and as such are not pledged by the full faith and credit of the City. We act only as an _ administrating agent in the issuance of these bonds . The bonds are a liability of each company referenced above. 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. The Fiscal Disparity Law has had the following impact on the taxable valuations of the City for taxes collectible for years 1987 , 1986 , 1985 , and 1984: 1987 1986 1985 1984 Taxable values- City — Personal property $ 11,393,525 $ 11,245,936 $ 9,259,749 $ 9,143,348 Real estate 247,272,940 234,794,759 224,157,483 224,638,752 Less tax increment project valuations (11,348,839) (9,032,222) (5,458,497) (2,765,895) Subtotal City 247,317,626 237,008,473 227,958,735 231,016,205 Areawide allocation Contribution to "Pool" (34,112,779) (29,730,694) (29,835,444) (27,102,595) Distribution from "Pool" 20,639,055 18,296,235 18,142,244 15,369,625 Subtotal Pool (13,473,724) (11,434,459) (11,693,200) (11,732,970) Total Taxable Value $233,843,902 $225,574,014 $216,265,535 $219,283,235 TAX INCREMENT DISTRICTS — The City Council took action on May 7 , 1979 to form the first of eight 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 four years, the Center City Tax Increment Area has realized the largest amount of growth. A clinic for a major health maintenance organization and two multi-level office complex's were completed. This year, Center City still remains the site for a potential six story apartment 13 CITY OF FRIDLEY, MINNESOTA building with a retail sales center to be built around it. In the future, this area will be benefited by a City wide project that will upgrade the appearance of the main thoroughfares in the City with the use of improved lighting and landscaping. The project also includes plans to upgrade the major intersections for improved traffic control and pedestrian accessability. This year was also full of negotiations and plans for our Lake Pointe (100 Twin) District which is the site of a proposed multi-structure office park. When completed, the Corporate Center will be unlike any other in the City. CAPITAL IMPROVEMENT FINANCING POLICY The policy of the City of Fridley regarding financing of major capital — improvements is as follows: Street, Curb and Gutter, Sidewalk and Storm Sewer Improvements _ Assess 100% of the cost of street surfacing, curb and gutter improvements and storm sewer improvements against benefitted properties , less aid for construction received from the State of Minnesota. Properties owned by the — City, the school districts, or other tax exempt organizations are treated in the same manner and assessed at the same rate as taxable properties. Water and Sewer Improvements Water and sewer lateral improvements are 100% assessed against benefitted properties. Properties owned by tax exempt organizations are treated the same _ as taxable properties. The water and sewer main system has been substantially assessed against benefited properties. An exception to the above policy has been the cost of looping certain water system main lines which benefitted no particular properties. This unassessed portion of the improvement cost is being financed by the Public Utility Fund. Wells, Reservoirs, Pumping Stations, Etc. These improvements have been financed from the income of the Public Utility Fund. Acquisition of Park Land and Improvements Finance small park capital improvements out of the current General Fund operating budget. It is the policy of the City to finance major park capital improvements, such as the purchase of large parcels of land, with general obligation bonds. There are no debts outstanding at this time. Other Capital Improvements Finance capital improvements such as fire trucks and public works equipment, etc. from the current General Fund operating budget . The construction or improvement of major physical facilities and/or the purchase of major assets that provide benefits to the organazation as a whole rather than a specific department, are financed through the Capital Improvement Fund. 14 CITY OF FRIDLEY, MINNESOTA GENERAL FUND The General Fund accounts for all financial transactions not accounted for in any other fund. Revenues (including transfers) of the General Fund totaled $7 ,161 ,197 , a decrease of $39 ,439 from 1986 . Expenditures ( including transfers) for the General Fund totaled $6,945 , 065 , an increase of $310 , 378 — over the previous year. The fund balance increased by $216 , 132 and was $6,856,931 at the end of the year. 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. The following table shows the beginning-year General Fund Unreserved- Undesignated balances as compared to the adopted budget of the year indicated. Undesignated Fund Balance General Beginning of Year Fund Budget Amount % of Budget 1983 6,366,475 610,071 9.6 _ 1984 7,230,491 1,531,908 21.2 1985 7,413,769 796,365 10.7 1986 7,186,500 1,298,310 18.1 1987 7,390,868 1,724,841 23.3 The amount of revenue from various sources and the changes from the previous year are summarized in the following graph and table. GENERAL FUND REVENUES BY SOURCE - MISCELLANEOUS (4.2%) TRANSFERS (1.9%) INTEREST ON INVESTMENTS (5.7%) 1774.; FINES AND FORFEITS (4.0%) { GENERAL PROPERTY TAXES (37.0%) tt - CHARGES FOR SERVICES (2.3%) # :. INTERGOVERNMENTAL REVENUE (40.0%) LICENSES AND PERMITS (4.9%) 15 CITY OF FRIDLEY, MINNESOTA Increase 1987 Percent (Decrease) Revenues by Source Amount of Total from 1986 General property taxes $2,647,334 37.0 $ 49,226 Licenses and permits 352,580 4.9 48,552 Intergovernmental revenue 2,861,677 40.0 77,455 —. Charges for services 164,617 2.3 6,788 Fines and forfeits 282,914 4.0 (4,796) Interest on investments 409,560 5.7 (49,464) _ Miscellaneous 303,939 4.2 69,391 Transfers 138,576 1.9 (236,591) Total revenue $7,161,197 100.0% $ (39,439) General property taxes accounted for 37.0% of the General Fund revenues (36.1% in 1986) and current tax collections were 95 . 51% of the total tax levy for 1987. Total revenue is down due largely to the fact that there was less -- construction activity and therefore, transfers from the state aid fund were less than anticipated. GENERAL FUND EXPENDITURES BY FUNCTION 1.i.m rtRS (1.1%) CAPITAL OUTLAY (6.0%) 15.38 GENERAL GOVERNMENT NATURALIST (7.6%) RECREATION A ND N AT' •r. a ' •••\' — 60.. itylk \ , , �a i3ti h '• �'*tk ,PUBLIC WORKS (28.78) � , !�A�,, � A }• �.g'� � '*''� ��� • ��� PUBLIC SAFETY 39.08 ?•.,•s..� a� Ursa�.ak, a+:;t• k� k,,\.s.\C• �a, +�1 A jy�•X• '+ A • •CIVIC CENTER (2.3%) 16 CITY OF FRIDLEY, MINNESOTA Changes in levels of expenditures for major functions of the City over the preceding year are shown in the following graph and table. Increase 1987 Percent (Decrease) Expenditures by Function Amount of Total from 1986 General government $1,062,891 15.3 $143,396 Public safety 2,707,681 39.0 130,834 Civic center 160,222 2.3 (20,617) Public works 1,992,949 28.7 106,061 Recreation and Naturalist 530,066 7.6 (5,364) Capital outlay 418,819 6.0 78,567 Transfers 72,437 1.1 (122,499) Total expenditures $6,945,065 100.0% $310,378 -' Total expenditures are up this year as a result of hiring consultants for records management, remodeling and the computer. Another factor contributing to the increases is the comparable worth adjustments mandated by the state. The mill rates by purpose for the past two fiscal years are as follows: _ Purpose 1987 1986 General Fund 14.188 13.895 Debt Service .158 Capital Improvement .367 .203 Agency Fund .075 .074 14.630 14.330 SPECIAL REVENUE FUNDS Purpose 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 provisions , or local ordinance to finance particular functions or activities of government. Municipal State-Aid Fund State gasoline tax apportioned to the City by the State of Minnesota for street construction is accounted for in this fund. Gasoline tax apportionments used for maintenance purposes are accounted for in the General Fund. Transfers are also made back to this fund from Special Assessment -' Funds. Such funds are derived from the excess of the construction funds received from the State of Minnesota plus the special assessments levied less the cost of the project. This excess is transferred back to the Municipal State-Aid Fund where the funds are earmarked for seal coating projects or the City's share of sidewalk or street improvement projects. 17 CITY OF FRIDLEY, MINNESOTA The fund balance at December 31, 1987 was $1,471,837 which was a decrease from the previous year of $38 , 890 . Revenues totaled $138 ,882 , which is the combination of State Aid and interest earned on the cash held in this fund. The State Aid portion of the revenues decreased from the previous year by — $372,701. The expenditures from this fund were in the form of transfers to other funds and decreased this year by $82,671. Revenue Sharing Fund The Revenue Sharing Fund was established to account for the revenue received from the Federal Government in accordance with the "State and Local Fiscal '–' Assistance Act of 1972 . " Expenditure of these funds can be made only in accordance with the provisions of that act. Revenue Sharing funds are transferred from the Revenue Sharing Fund to the General Fund where the _. detailed amounts are budgeted. The 1986 Revenue Sharing funds granted to the City were substantially reduced _ from prior years and not reauthorized for future years . The program was terminated on September 16, 1986 due to the federal budget reductions required by the Gramm-Rudman-Hollings Act. Cable TV Fund The Cable Television Fund was established to account for franchise fees (5% of CATV subscriber revenues) . These revenues are dedicated to three uses : 1) establish a comprehensive Broadband Telecommunications Network regulating program, 2) develop and operate governmental and other access channels , 3) establish a CATV Advisory Committee, advising the City Council on CATV matters. As of December 31, 1987 the fund balance totaled $91,674. Grant Management Fund _ The Grant Management Fund was established to administer 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 funds are provided in advance to be spent on specific activities outlined in the grant. 18 CITY OF FRIDLEY, MINNESOTA Grant funds received during 1987 totaled $180,879, an increase of $25,420 from 1986. The fund balance as of December 31, 1987 was $(2,125) which represents a combination of grant funds waiting to be expended and expenditures that have not yet been reimbursed. HRA Reimbursement Fund The HRA Reimbursement Fund was originally set-up to control all grant proceeds and expenditures that were related to the home ownership and rehabilitation function. This type of activity within the City has diminished to the point where the function of this fund has changed in character. During 1987 , the fund was used to account for the reimbursement of providing professional services from the City staff to the Fridley Housing and Redevelopment Authority. The expenditures during 1987 in the form of professional services were $182 , 621, of which there was an equal amount of reimbursement for services rendered leaving the fund balance at December 31, 1987 at zero. DEBT SERVICE FUNDS Purpose The Debt Service Funds are used for the accumulation of monies for the payment of general obligation bonds and interest thereon. City Fund The City Fund was established to account for the property taxes levied on behalf of the construction of the Fridley Civic Center in 1965 . The final payment on the bonds was made in 1986. Revenues this year included delinquent taxes and interest. The residual fund balance at year end of $99 ,044 was transfered to the Civic Center Improvement capital projects fund to be used for the current remodeling project. Special Assessment Fund The Special Assessment Fund is used to account for the collection of assessments against benefited property owners and the disbursement of assessment collections for the payment of the correlating improvement bonds and interest thereon. It also handles the receipt of bond proceeds and the disbursement of the proceeds for construction work performed by the capital projects funds. Fund balance at December 31, 1987 was $13,746,028, $6,405,162 of which is reserved for debt service. Housing and Redevelopment Fund The Housing and Redevelopment Fund is used to account for the payment of the General Obligation Tax Increment Refunding Bonds and the interest thereon. Tax increment money provides the revenue for service of this debt, however, it arrives in the debt service fund in the form of a transfer . Reserved Fund Balance at December 31, 1987 was $12,214,975. 19 CITY OF FRIDLEY, MINNESOTA CAPITAL PROJECTS FUNDS Purpose — Capital Projects Funds are used for acquisition and construction of capital facilities other than those financed by Enterprise funds. Capital Improvement Fund This fund was established to account for the revenues and expenditures of a — revolving type Capital Improvement Fund. The City concluded that the current and future cost of replacing or repairing many of the large assets owned by the City is growing steadily. The monies set aside in this fund are to finance future replacement of assets that are aging or have become obsolete. — As of December 31, 1987, the fund balance was $1,982,574. Sears Fund ., This fund was set up to account for revenues and expenditures relating to the purchase and development of park land formerly owned by Sears Roebuck. The _ objective of the City is to create a major outdoor athletic recreational facility. This facility includes six softball fields , four football fields and a central building that houses pressboxes, a first aid room and concession areas. The grounds have picnic areas and walking trails that tie into the — rest of the City's walkways. During 1987, $4,851 was earned from interest on investments and $59,930 was transferred to the Special Assessment Capital Projects Fund for paving of the parking lot and installation of an irrigation _ system. The residual fund balance of $6,963 was transferred to the Capital Improvement Fund. Civic Center Improvement Fund — This fund was established to account for the revenues and expenditures relating to the improvement of the Fridley Civic Center. During 1987 , — expenditures totaled $66,079 and a residual equity transfer of $99 ,044 from the City Debt Service Fund was received, leaving a fund balance at December 31, of $677,588. Special Assessment Fund Special Assessment Funds are used to finance and account for the construction — and financing of certain public improvements such as street improvements, sidewalk improvements, storm sewers, and water and sewer lines which may be paid wholly or in part from the special assessments levied against benefited _ property. The fact that the special assessments are paid for completely or in part by property owners in a limited geographical area who specifically benefit distinguishes them from improvements which benefit the entire community and which are paid for out of general revenue or through the — issuance of general obligation bonds. 20 CITY OF FRIDLEY, MINNESOTA HRA Fund The HRA Fund was established to account for the activity of the Fridley Housing and Redevelopment Authority (HRA) . The Fridley HRA has established eight tax increment areas that are financing tax increment debt and project costs. The major development that occurred during 1987 was the construction of the Springbrook Apartments. The project added approximately $7 . 5 million dollars in assessed value to the tax base. Other projects that are in the works are the Northwest Racquet and Swim Club which is estimated to add $10 million in assessed value and the renovation of the Shorewood Plaza shopping mall with and estimated $3 million. Site improvements on the Lake Pointe site neared completion and negotiations continue on the construction of a multimillion dollar office complex . Negotiations also continued on the proposed development of a unique combination of senior housing with retail and commercial office space. The Housing and Redevelopment Authority uses the Tax Increment Financing tool which has been very successful, wihtout it many of these developments would not have occurred. Generally speaking, the Housing and Redevelopment Authority uses bond proceeds to correct problems with site locations , that in the past made certain prime locations undesirable. •. During 1987, expenditures and other financing uses exceeded revenues and other financing sources by $2,421,563, leaving a fund balance at December 31 , 1987 of $7,398,419. ENTERPRISE FUNDS Purpose 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 one year lease at the other store. In 1984, the City changed its sales philosophy to the wholesale approach so that we could remain competitive with three of the neighboring communities which use wholesale pricing. As the numbers indicate below, 1985 was not a good year for the liquor stores . With that in mind for 1986 and 1987 , we applied a more aggressive marketing strategy , reviewed the effectiveness of our pricing and did an overall evaluation of the operating policies and procedures of the business. 21 CITY OF FRIDLEY, MINNESOTA Shown below is a summary of liquor store operations for the years 1987 , 1986 , 1985, 1984, and 1983. 1987 1986 1985 1984 1983 Sales $2,596,379 $2,547,533 $2,303,732 $1,645,005 $1,618,204 Gross profit 404,148 485,813 324,535 272,073 314,653 Net income (loss) before transfers 28,289 105,059 (48,139) 15,201 102,385 Transfers to General Fund $ 10,000 $ 50,000 $ -0- $ 120,000 $ 150,000 Retained earnings of the Liquor Fund were $906 , 347 on December 31, 1987 , compared to $888,058 on December 31, 1986. — Public Utility Fund This fund accounts for the operation and financing of the City-owned sewer and water systems. In 1969, the fund assumed a $770,000 liability for bonds payable along with -" future interest obligations of the Water No. 75 Improvement Bonds . A total principal amount of $20,000 for this bond issue was outstanding on December 31, 1987. Although deferred tax levies were set forth in the resolution for — retirement of the bonds and interest , it is the intention of the City to cancel the tax levies annually for this bond issue and to provide the necessary revenue from the Public Utility Fund. _ Included in the assets of the fund is a receivable from the Metropolitan Waste Control Commission of $288,326 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 and 1984. 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, 1987 were $7,426,340 compared to $7 ,055 , 851 on December 31, 1986. _ Shown below is a summary of operations of the Public Utility Fund for the years 1987, 1986, 1985, 1984, and 1983. 1987 1986 1985 1984 1983 Operating revenue $2,473,814 $2,434,100 $2,296,415 $2,401,206 $1,928,973 Operating expenses 2,513,721 2,522,048 2,253,164 2,043,653 1,850,966 Operating income (loss) $ (39,907)$ (87,948)$ 43,251 $ 357,553 $ 78,007 22 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUNDS Purpose Internal Service Funds are set up to account for goods and services provided by designated departments on a cost reimbursement basis to other departments within a single governmental unit. Employee Benefits Fund This fund was originally set up to account for all fringe benefits in one central location. With the use of the new in-house computer system, it is now possible to allocate costs to the proper departments when incurred. Health, Life and Dental insurance are still charged here and then allocated back to the benefited departments. Under the old system, it was necessary to charge all fringe benefits to the Employee Benefits Fund to centralize the costs for management review. Management now can call for these same costs to be summarized through the use of a simple program. This type of procedure enhances the City's budgetary control. Amounts accumulated for annual leave are maintained in this fund. The City has a policy that effectively places a ceiling on annual leave amounts to keep the dilution of City assets to a minimum upon employee retirement. During 1987 , operating and non-operating revenues exceeded operating expenses by $64,927 resulting in a fund equity at December 31, 1987 of $501,591. Management Information Services Fund This fund was created to account for revenues and expenses associated with the operation of a computerized information system the City has placed into use. Three years ago, the City determined that an in-house computer was the �- solution to cost containment in the information processing area. During this time, our internal staff has been able to improve on the existing software by creating custom reports necessary for individual needs . However, even with the level of expertise we have on staff, we are unable to meet all of our needs via the existing computer system. The vendor of the existing software has since gone out of the business leaving us no alternative but to look for other software. In 1987, a consultant was hired to prepare a needs analysis along with a proposal. A phased approach that will encompass the needs of all departments ._. was approved by council for acquisition of new hardware and software . During 1988 , there will be demonstrations of new equipment and the writing of specifications. Chances are there will be only minor financial commitments made during 1988 which is the year the original loan to start this fund will be paid off. Revenues in the form of charges for services during 1987 amount to $122 , 328 �- and the expenses were $87,072. The fund balance as of December 31 , 1987 was $155,803. 23 CITY OF FRIDLEY, MINNESOTA Self-Insurance Fund This fund was created to account for the revenues and expenditures associated with the City's $50,000 maximum annual aggregate deductible option on it ' s general liability policy. This option resulted in a premium savings of $50,723 on the City's 1987 insurance package. Each department was charged a pro rata share of the $50 , 723 to start the fund up . The City shall appropriate from time to time, sufficient funds to maintain or increase the initial balance. During the year, the City received a reimbursement (rebate) of $32,817 on its policies held with the League of Minnesota Cities Trust. The money was placed in this fund to build the balance. At some future time, it may be feasible to _ increase our deductible and further reduce our annual premiums. Operating and non-operating revenues for the year totaled $86 , 957 while operating expenses were only $13,388 resulting in a net income of $73,569. TRUST AND AGENCY FUNDS Purpose Trust and Agency Funds account for assets held by the City as a trustee or agent for individuals, private organizations and other governmental units. Expendable Trust Fund — This fund maintained by the City is for the purpose of holding escrow deposits relating to industrial development revenue bond and mortgage issues. The fund _ balance as of December 31, 1987 was $20,070. Agency Funds - Six Cities Watershed This fund maintained by the city is for the purpose of collecting taxes _ received on behalf of an overlapping governmental unit, the Six Cities Watershed District. The funds are collected and disbursed to the Six Cities Watershed Management Organization. Hotel/Motel This fund is maintained by the City for the purpose of collecting a three — percent tax that has been imposed on all the hotels and motels in the north suburban area. The collection process is administered by the City and the funds are then disbursed to the North Metro Convention and Tourism Bureau. Deferred Compensation This fund is maintained by the City to account for deposits held in trust with the International City Managers Association (ICMA) on behalf of the City of Fridley employees. Employees make pretax contributions to this organization throughout their careers and it is used as a retirement benefit. These _ contributions remain property of the City and are subject to claims of the City's creditors until withdrawn by the employee . The possibility of these being used for City creditors is remote. 24 CITY OF FRIDLEY, MINNESOTA GENERAL FIXED ASSETS ACCOUNT GROUP Purpose General Fixed Assets are those fixed assets of a governmental jurisdiction which are not accounted for in an Enterprise or Internal Service Fund. To be -. classified as a fixed asset in this category, a specific piece of property must possess three attributes: 1) it must be tangible in nature ; 2) it must have a life longer than the fiscal year ; and 3) it must be of significant value. GENERAL LONG TERM DEBT ACCOUNT GROUP Purpose .. General obligation bonds and other forms of long-term debt supported by general revenues are obligations of a governmental unit as a whole and not its individual constituent funds . Moreover, the proceeds of such debt may be m. spent on facilities which are utilized in the operation of several funds. For these reasons, the amount of unmatured long-term indebtedness which is backed by the full faith and credit of the City are accounted for and reported in a separate self-balancing group of accounts entitled "General Long Term Debt -� Account Group" . The group includes (in addition to conventional term debt) general obligation bonds, time warrants and notes which have a maturity of more than one year from the date of issuance. PENSIONS Employees in the City of Fridley are covered by five pension plans: 1) Fridley Fire Relief Association for Volunteer Firemen. m. 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. 25 CITY OF FRIDLEY, MINNESOTA - 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 the George M. Hansen Company P.A. , Certified — Public Accountants is included in this report. CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE The Governmental 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, 1986. 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. — ACKNOWLEDGEMENTS The preparation of this report on a timely basis could not have been accomplished without the efficient and dedicated services of the Finance Department and the professional guidance of George M. Hansen, Company, P.A. — 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 V?) &—,1 -- Richard D. Pribyl ulie M. Burt Finance Director Assistant Finance Director — 26 - 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, 1986 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to governmental units and public employee retirement systems whose comprehensive annual financial reports (CAFR's) are judged to substantially conform to.program standards. PNGE OFF/ e. C 1 0.MiC+� tJ�+ J rTNE •�9,r • UNITED STATES\y f c iJJ President CAAN CORPORATION/a 1 E�4� Executive Director 27 FINANCIAL SECTION .m. p.m owe AUDITOR'S OPINION G M I-I C o GEORGE M. HANSEN COMPANY, P.A. A Professional Corporation of Certified Public Accountants -.. AUDITORS' OPINION City Council Fridley, Minnesota We have examined the general purpose financial statements of the City of Fridley, Minnesota as of and for the year ended December 31 , 1987, as listed in the table of contents. Our examination was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting -MI records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the general purpose financial statements referred to above present fairly the financial position of the City of Fridley, Minnesota at December 31 , 1987, and the results of its operations and the changes in financial position of its proprietary fund types for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year after giving retroactive effect to the changes, with which we concur, as described in Note 2 to the financial statements. Our examination 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 and schedules and supplemental information listed in the table of contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the City of Fridley, Minnesota. Such information has been subjected to the auditing procedures applied in the examination 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. Our examination did not _. include the statistical information listed in the table of contents. 717 4"e1/1-- 6°77 it4 May 4, 1988 1433 UTICA AVENUE SOUTH, SUITE 175 MINNEAPOLIS, MINNESOTA 55416 61 2/546-2566 29 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 and Special Revenue Fund Types Combined Statement of Revenues , Expenditures , and Changes in Retained Earnings - All Proprietary Fund Types Combined Statement of Changes in Financial Position - All Proprietary Fund Types CITY OF FRIDLEY, MINNESOTA COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS December 31, 1987 Governmental Fund Types Special Debt Capital General Revenue Service Projects Assets — Cash $ 995,862 $ $ 5 $ 618 Cash in escrow 12,452,500 _ Investments 5,352,933 1,567 ,736 13,531,139 12,308,527 Receivables: Accounts 3,253 38,446 Taxes 373,561 385,898 — Special Assessments 7,205 3,239,304 140,476 Mortgage 959,960 Interest 591,634 86,548 _ Due from other funds 26,663 78,770 Due from other governments 31,265 102,680 36,710 Advance to other funds _ Inventories 18,861 Prepaid expenditures/expense 27,469 Long term receivable Restricted assets: — Cash Investments Other assets _ Property and equipment (Net of depreciation) Amount available in debt service fund — Amount to be provided for retirement of general long term debt .-. Total assets $7,402,043 $1,735,525 $29,222,948 $13,997,507 (Continued) _ 32 Exhibit A-1 Fiduciary Totals Proprietary Fund Types Fund Types Account Groups (Memorandum Only) Internal Trust and General General Long 1986 Enterprise Service Agency Fixed Assets Term Debt 1987 (Restated) $ 3,320 $ $ $ $ $ 999,805 $ 1,130,656 12,452,500 12,452,500 5,553,828 1,490,743 79,645 39,884,551 40,047,870 543,927 2,145 587,771 728,880 990 760,449 994,042 3,386,985 3,996,368 959,960 678,182 792,380 105,433 138,327 105,092 275,747 235,548 25,000 399,855 418,716 495,077 126,501 153,970 167,944 272,131 272,131 294,430 16,217 20,000 20,000 59,913 1,789,790 1,789,790 1,425,898 12,670,027 65,371 25,659,551 38,394,949 36,685,121 25,961,003 25,961,003 25,247,114 7,263,997 7,263,997 8,717,886 $19,694,681 $1,556,114 $1,872,570 $25,659,551 $33,225,000 $134,365,939 $133,651,171 33 CITY OF FRIDLEY, MINNESOTA — COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS (Continued) December 31, 1987 Governmental Fund Types Special Debt Capital — General Revenue Service Projects Liabilities and Fund Equity — Liabilities Advance from city's -- general account $ $ 149,967 $ 21,990 $ 826,439 Accounts payable 117,420 19,526 651 48,385 Deposits payable 13,796 116,614 -- Contracts payable 98,586 Salaries payable 125,167 4,646 Leave payable — Deferred revenue 285,069 3,239,304 1,468,910 Due to other funds 80,433 Due to other governments 3,660 Advance from other fund — Bonds payable Total liabilities 545,112 174,139 3,261,945 2,639,367 — Fund Equity — Contributed capital Investment in general fixed assets -- Retained earnings - Reserved Unreserved — Fund balance: Reserved 702,505 18,620,137 8,651,256 Unreserved - _ Designated 5,666,870 1,982,574 Undesignated 487,556 1,561,386 7,340,866 724,310 Total retained earnings -- and fund balance 6,856,931 1,561,386 25,961,003 11,358,140 Total fund equity 6,856,931 1,561,386 25,961,003 11,358,140 — Total liabilities and fund equity $7,402,043 $1,735,525 $29,222,948 $13,997,507 — See Accompanying Notes to Financial Statements 34 Exhibit A- 1 Continued Fiduciary Totals Proprietary Fund Types Fund Types Account Groups (Memorandum Only) -. Internal Trust and General General Long 1986 Enterprise Service Agency Fixed Assets Term Debt 1987 (Restated) $ $ $ $ $ $ 998,396 $ 1,091,939 155,276 1,998 343,256 312,077 1,842,098 1,972,508 1,647,904 279,917 378,503 48,216 18,198 29 148,040 138,147 798,153 798,153 797,583 692 4,993,975 4,294,987 25,000 105,433 138,326 27,418 9,681 40,759 51,044 •-. 25,000 20,000 33,225,000 33,245,000 34,035,000 500,809 825,151 1,852,500 -0- 33,225,000 43,024,023 42,580,223 10,861,185 10,861,185 10,861,185 25,659,551 25,659,551 24,450,546 730,963 730,963 558,325 8,332,687 8,332,687 7,937,516 27,973,898 33,605,992 7,649,444 6,265,732 20,070 10,134,188 7,391,652 8,332,687 730,963 20,070 -0- -0- 54,821,180 55,759,217 19,193,872 730,963 20,070 25,659,551 -0- 91,341,916 91,070,948 $19,694,681 $1,556,114 $1,872,570 $25,659,551 $33,225,000 $134,365,939 $133,651,171 35 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, 1987 Governmental Fund Types Special Debt General Revenue Service Revenues: Taxes and special assessments $2,647,334 $ $ 1,035,017 Licenses and permits 352,580 53,003 -- Intergovernmental revenue 2,861,677 384,520 Charges for services 164,617 Fines and forfeits 282,914' — Interest on investments 409,560' 123,632) 977,502 Miscellaneous 303,9391 Total revenues 7,022,621 561,155 2,012,519 Expenditures: Current General government 1,062,891 380,879 9,281 Public safety 2,707,681 Civic center 160,222 Public works 1,992,949 — Recreation and naturalist 530,066 Debt service 2,203,059 Capital outlay 418,819 57,191 _ Total expenditures 6,872,628 438,070 2,212,340 Excess (deficiency) of revenues over expenditures 149,993 123,085 (199,821) Other financing sources (uses) : Bond proceeds — Operating transfers in 138,576 1,141,992 Operating transfers out (72,437) (177,772) (129,238) Total other financing sources (uses) 66,139 (177,772) 1,012,754 — Excess (deficiency) of revenues and other financing sources over _ expenditures and other financing uses 216,132 (54,687) 812,933 Fund balance January 1 as - previously reported 6,640,799 1,616,073 630,064 Adjustments: See Note 2 24,617,050 — Fund balance January 1 as restated 6,640,799 1,616,073 25,247,114 Residual Equity Transfer in (out) (99,044) Fund balance December 31 $6,856,931 $1,561,386 $25,961,003 _ See Accompanying Notes to Financial Statements 36 Exhibit A-2 ... Fiduciary Totals Fund Type (Memorandum Only) Capital Trust and 1986 Projects Agency 1987 (Restated) $ 1,085,629 $ $ 4,767,980 / $ 4,885,669 405,583 358,962 56,241 3,302,438 3,652,179 164,617 157,829 282,914 287,710 921,014 5,051 2,436,759 2,919,000 67,719 371,658 439,923 2,130,603 5,051 11,731,949 12,701,272 474,096 1,927,147 1,906,936 2,707,681 2,576,847 160,222 180,839 1,992,949 1,886,888 530,066 535,430 45,750 2,248,809 2,265,270 3,190,016 3,666,026 2,729,150 3,709,862 -0- 13,232,900 12,081,360 (1,579,259) 5,051 (1,500,951) 619,912 10,011,944 324,801 1,605,369 5,869,652 (1,230,817) (1,610,264) (5,832,269) (906,016) -0- (4,895) 10,049,327 (2,485,275) 5,051 (1,505,846) 10,669,239 12,280,284 15,019 21,182,239 15,571,826 1,464,087 26,081,137 13,536,183 13,744,371 15,019 47,263,376 36,594,137 99,044 $11,358,140 $20,070 $45,757,530 $47,263,376 37 CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUND TYPES Year Ended December 31, 1987 General Fund Variance Favorable ., Budget Actual (Unfavorable) Revenues: Taxes and special assessments $2,715,640 $2,647,334 $(68,306) Licenses and permits 302,657 352,580 49,923 Intergovernmental revenue 2,775,055 2,861,677 86,622 Charges for services 134,892 164,617 29,725 - Fines and forfeits 207,568 282,914 75,346 Interest on investments 320,000 409,560 89,560 Miscellaneous 82,571 303,939 221,368 Total revenues 6,538,383 7,022,621 484,238 Expenditures: Current - General government 1,089,466 1,062,891 26,575 Public safety 2,733,397 2,707,681 25,716 Civic center 180,483 160,222 20,261 - Public works 2,062,041 1,992,949 69,092 Recreation and naturalist 597,763 530,066 67,697 Capital outlay 557,055 418,819 138,236 Total expenditures 7,220,205 6,872,628 347,577 Excess (deficiency) of revenues _ over expenditures (681,822) 149,993 831,815 Other financing sources (uses) : Operating transfers in 188,576 138,576 (50,000) Operating transfers out (170,663) (72,437) 98,226 Total other financing sources (uses) 17,913 66,139 48,226 Excess (deficiency) of revenues and other financing sources over expenditures and other financing uses (663,909) 216,132 880,041 Fund balance January 1 6,640,799 6,640,799 -0- Fund balance December 31 $5,976,890 $6,856,931 $880,041 See Accompanying Notes to Financial Statements 38 Exhibit A-3 Totals Special Revenue Fund Types (Memorandum Only) Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) $ $ $ $2,715,640 $2,647,334 $ (68,306) 51,725 53,003 1,278 354,382 405,583 51,201 629,895 384,520 (245,375) 3,404,950 3,246,197 (158,753) 134,892 164,617 29,725 207,568 282,914 75,346 118,165 123,632 5,467 438,165 533,192 95,027 .� 82,571 303,939 221,368 799,785 561,155 (238,630) 7,338,168 7,583,776 245,608 374,770 380,879 (6,109) 1,464,236 1,443,770 20,466 2,733,397 2,707,681 25,716 180,483 160,222 20,261 2,062,041 1,992,949 69,092 597,763 530,066 67,697 ,... 52,000 57,191 (5,191) 609,055 476,010 133,045 426,770 438,070 (11,300) 7,646,975 7,310,698 336,277 373,015 123,085 (249,930) (308,807) 273,078 581,885 188,576 138,576 (50,000) (373,015) (177,772) 195,243 (543,678) (250,209) 293,469 (373,015) (177,772) 195,243 (355,102) (111,633) 243,469 -0- (54,687) (54,687) (663,909) 161,445 825,354 1,616,073 1,616,073 -0- 8,256,872 8,256,872 -0- $1,616,073 $1,561,386 $ (54,687) $7,592,963 $8,418,317 $ 825,354 39 Exhibit A-4 CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANCES IN RETAINED EARNINGS - ALL PROPRIETARY FUND TYPES Year Ended December 31, 1987 Proprietary Fund Types Totals Internal (Memorandum Only) Enterprise Service 1987 1986 - Sales and cost of sales: Sales $2,596,379 $ $2,596,379 $2,547,533 - Cost of sales 2,192,231 2,192,231 2,061,720 Gross profit 404,148 -0- 404,148 485,813 Operating revenues: Water sales and sewer rents 2,362,437 2,362,437 2,277,244 Other 111,377 111,377 156,856 _ Charges for services 403,238 403,238 322,665 Total operating revenues 2,473,814 403,238 2,877,052 2,756,765 Operating expenses: Personal services 736,457 1,336 737,793 741,035 Supplies and other charges 1,826,456 311,902 2,138,358 2,130,227 Depreciation 353,133 41,142 394,275 365,572 - Total operating expenses 2,916,046 354,380 3,270,426 3,236,834 Operating income (loss) (38,084) 48,858 10,774 5,744 -- Non-operating revenues (expenses) : Interest on investments 421,601 97,356 518,957 608,564 _ Interest expense (1,646) (1,646) (8,650) Other 2,012 32,817 34,829 1,807 Total non-operating revenues 421,967 130,173 552,140 601,721 Income before operating transfers 383,883 179,031 562,914 607,465 Operating transfers in 14,895 14,895 15,624 -- Operating transfers out (10,000) (10,000) (53,007) Total operating transfers 4,895 -0- 4,895 (37,383) _ Net income 388,778 179,031 567,809 570,082 Retained earnings January 1 7,943,909 551,932 8,495,841 7,925,759 Retained earnings December 31 $8,332,687 $730,963 $9,063,650 $8,495,841 See Accompanying Notes to Financial Statements 40 Exhibit A-5 CITY OF FRIDLEY, MINNESOTA -. COMBINED STATEMENT OF CHANGES IN FINANCIAL POSITION - ALL PROPRIETARY FUND TYPES Year Ended December 31, 1987 Proprietary Fund Types Totals -. Internal (Memorandum Only) Enterprise Service 1987 1986 Sources of working capital: Operations: Net income for the year $ 388,778 $179,031 $ 567,809 $570,082 Items not requiring working capital - .. Depreciation 353,133 41,142 394,275 365,572 Loss on disposal of equipment 223 Working capital provided by operations 741,911 220,173 962,084 935,877 Proceeds from sale of equipment 8,000 Decrease in long term receivable 22,299 22,299 22,444 Decrease in restricted assets 56,130 56,130 32,101 Total sources of working capital 820,340 220,173 1,040,513 998,422 .. Uses of working capital: Acquisition of property and equipment 892,345 2,753 895,098 216,799 Decrease in long term bonds payable 20,000 20,000 50,000 Decrease in long term advance from -. Capital Improvement Fund 25,000 25,000 25,000 Total uses of working capital 912,345 27,753 940,098 291,799 Increase (decrease) in working capital $ (92,005) $192,420 $ 100,415 $706,623 Elements of increase (decrease) in working capital: „. Cash $(139,383) $ (328) $ (139,711) $(34,403) Investments 488,536 181,975 670,511 442,327 Accounts receivable (137,814) (137,814) 62,328 Interest receivable (23,081) (5,507) (28,588) 28,326 Due from other governments 43,884 43,884 (33,592) Inventories (77,470) (77,470) 112,155 Prepaid expenses (5,978) (5,978) 132,479 ... Advance from city's general account 17,734 17,734 (17,734) Accounts payable 8,013 (884) 7,129 (36,085) Contracts payable (279,917) (279,917) -. Salaries payable 1,104 1,104 (3,652) Leave payable (570) (570) 36,718 Due to other funds 1,771 1,771 (1,771) Due to other governments (1,670) (1,670) 19,527 -- Bonds payable 30,000 30,000 Increase (decrease) in working capital $ (92,005) $192,420 $ 100,415 $706,623 See Accompanying Notes to Financial Statements 41 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1987 1. Summary of Significant Accounting Policies The City of Fridley was incorporated July 1, 1949, under Chapter 410 .03 of the Statutes of the State of Minnesota providing for a council-manager form of government under the "Home Rule Charter City" concept. The City provides the following services as authorized by its charter: general administrative services, public safety (police and fire) , public improvements , planning and zoning, and culture and recreation. -- The accounting policies of the City of Fridley conform to generally accepted accounting policies applicable to governmental units . The following is a .� summary of the more significant policies: A. Principles used in the determination of the scope of the Governmental entity The City has implemented National Council on Governmental Accounting Statement 3, Defining the Governmental Reporting Entity. In accordance with Statement 3 , for financial reporting purposes the City ' s financial ._ statements include all funds, account groups, departments, agencies, boards, commissions and other organizations over which City officials exercise oversight responsibility. _ Oversight responsibility includes such aspects as appointment of governing body members, budget approval, approval of property tax levies, outstanding debt secured by City full faith and credit or revenues, responsibility for funding deficits and others. Based on the foregoing criteria the financial statements of the following organization have been incorporated in the accompanying financial statement: Fridley Housing and Redevelopment Authority (HRA) - The HRA was created to provide housing and redevelopment assistance to its citizens . The HRA provides this assistance through the administration of various programs . A majority of the funding is provided through the issuance of general obligation tax increment bonds guaranteed by the City. The City would also _ be responsible for deficits, therefore, the HRA is considered a component unit of the City. The operations of the HRA are reported in separate Debt Service and Capital Project Funds. _ The following entities are not part of the City of Fridley and are excluded from the accompanying financial statements: 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. 42 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 1. Summary of Significant Accounting Policies (Continued) A. Principles used in the determination of the scope of the Governmental entity (Continued) 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 the reporting entity. (See Notes 11 and 12 for disclosures relating to the pension plans operated by these organizations. ) 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 eight generic fund types and three broad categories as follows: OMD 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. 43 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 — 1. Summary of Significant Accounting Policies (Continued) — B. Fund Accounting (Continued) GOVERNMENTAL FUNDS (Continued) 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. FIDUCIARY FUNDS Fiduciary funds include expendable trust and agency funds. The measurement focus of these funds is the same as governmental funds and are 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 an overlapping governmental unit. The funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operation. 44 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 Amt 1. Summary of Significant Accounting Policies (Continued) 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 "financial flow" measurement focus. This means that only current assets and current liabilities are generally included on their 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. 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. 45 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 1. Summary of Significant Accounting Policies (Continued) 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 follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1 . The operating budget includes expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is legally enacted through passage of a resolution. 4. The City Council may authorize transfer of budgeted amounts between departments within any fund. 5. Reported budget amounts are as originally adopted or as amended by Council 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. --N. --N. 46 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 1. Summary of Significant Accounting Policies (Continued) E. Budgets and Budgetary Accounting (Continued) 7. Formal budgetary integration is employed as a management control device during the year for the General Fund and Special Revenue 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 Capital Projects Funds is accomplished through the use of project controls. 8. Budgets for the General and Special Revenue Funds are adopted on a basis consistent with generally accepted accounting principles. '-' 9. Budgetary control is maintained at the expenditure category level within each division. Budgetary control, by departments or divisions , and by category is required by the City Charter. 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 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. Investments are stated at cost which approximates market. The City provides temporary advances to funds that have insufficient cash balances by means of an advance from the general account. This is classified as a liability of the fund until adequate resources are received. 2) Cash in Escrow Cash in escrow represents the net proceeds after issuance costs from the sale of two bond issues ; 1) $10, 045 , 000 Crossover Tax Increment Refunding Bonds of 1986 and 2) $2 , 705 , 000 Crossover Improvement Refunding Bonds of 1986. The proceeds are being used to refund 85% of the principal on the 1985 Variable Rate Issues and pay 100% of the interest on themselves. 47 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 1. Summary of Significant Accounting Policies (Continued) F. Assets, Liabilities and Fund Equity (Continued) 3) Receivables ,.., Property Taxes Property tax levies are set by the City Council in October each year and are 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, on or before January 25 , April 19 , July 5 and December 4. 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. -. Cities in Minnesota operate under a levy limitation law which allows an increase in the tax levy each year equal to the Implicit Price Deflator increase or 5%, whichever is greater, further indexed by the percentage increase in households or population, whichever is greater. Levies for bonded indebtedness are not limited by the law. Taxes payable on homestead property (as defined by State Statutes) are partially reduced by a homestead credit. This credit is paid to the City by the State in lieu of taxes levied against homestead property. The State remits this credit in two equal installments in July and December each year. 48 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 1. Summary of Significant Accounting Policies (Continued) F. Assets, Liabilities and Fund Equity (Continued) 3) Receivables (Continued) Special Assessments Receivable Special assessments are levied against the benefited properties for the assessable costs of special assessment improvement projects in accordance with State Statutes. The City usually adopts the assessment rolls when the individual projects are complete or substantially complete. The assessments are collectible over a term of years generally consistent with the term of years of the related bond issue. Collection of annual installments (including interest) is handled by the County in the same manner as property taxes . Property owners are — allowed to prepay total future installments without interest or prepayment penalties. Special assessments receivable includes the following components: Unremitted - amounts collected by Anoka County and not remitted to the City. Delinquent - amounts billed to property owners but not paid. _ Deferred - assessment installments which will be billed to • property owners in future years. 4) Inventories Inventories are stated at the lower of F.I.F.O. cost or market based on perpetual inventory systems. Inventory in the General Fund consists of expendable supplies held for consumption. 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) . 49 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 _. 1. Summary of Significant Accounting Policies (Continued) — F. Assets, Liabilities and Fund Equity (Continued) 5) 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 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: Land Improvements 20 - 50 years Buildings 20 - 50 years _.. ' Furniture and Fixtures 5 - 10 years Machinery and Equipment 5 - 10 years Other Improvements 20 years - 6) Annual Leave The personnel ordinance limits the annual accumulation of benefits that — can be accumulated from year to year. The Employee Benefits Internal Service Fund reflects the City's accrued liabilities for annual leave and other benefits for all City employees. That liability is stated in the Employee Benefits Fund and represents the maximum possible dilution of fund assets by retirements or extended approved leaves by employees. 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. 50 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 1. Summary of Significant Accounting Policies (Continued) G. Revenues, Expenditures and Expenses m. 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 as they are not available to finance current expenditures. General property taxes and special assessments are recognized when cash is received to prevent overstating due to delinquencies. Principal Portion of Special Assessments - Revenue is recognized in the year the assessments are collected. Interest Revenue on Special Assessments Receivable - Interest revenue is recognized in the year of collection of the current principal installment. 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 such as in the State Aid Fund. Interest on Investments - Interest is recorded as revenue in the year earned. — Water and Sewer Service Charges - Revenue is recognized when earned with no allowance for uncollectibles as delinquent accounts are certified as a special assessment lien against the property billed. Unbilled service charges are included in receivables at year-end. Other Revenues - Licenses, fines, penalties and miscellaneous revenues are recorded as revenues when received in cash because they are generally not measurable until actually received. Interest Expense on Bonded Indebtedness - Interest expense is recorded as an expenditure when paid in the governmental fund types and accrued when incurred in the proprietary fund types. • 51 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 1. Summary of Significant Accounting Policies (Continued) G. Revenues, Expenditures and Expenses (Continued) 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 . Certain 1986 amounts have been reclassified to conform to the 1987 presentation. 2. Accounting Changes A. Special Assessments The City has implemented the provisions of Statement No . 6 of the Governmental Accounting Standards Board, Accounting and Financial Reporting .... for Special Assessments. In the past, special assessments (improvement) projects and related debt were accounted for in special assessment funds in a separate fund type. Statement No. 6 provides that such projects are to be accounted for in capital projects funds, and the general obligation debt is to be accounted for in the general long-term debt account group and related debt service funds. The change in accounting for special assessments has been applied retroactively in the accompanying financial statements. The effect of the change was to eliminate the special assessment funds, increase the January _ 1, 1986 fund balances in the debt service fund type by $14, 207 , 323 and decrease the January 1, 1986 fund balance in the capital projects fund type by $671 , 140, and transfer the special assessment (improvement) bonds outstanding of $5,380,000 at January 1, 1986, to the general long-term debt account group. 52 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) —. DECEMBER 31, 1987 2. Accounting Changes (Continued) A. Special Assessments (Continued) Individual fund balances (deficits) at January 1 , 1986 were restated as follows: As Previously Fund Reported As Restated Special Assessment funds: Special Assessment $ 3,747,122 $ Revolving 734,061 $ 4,481,183 $ -0- Debt Service funds: City $ 86,117 $ 86,117 Special Assessment 14,207,323 Housing and Redevelopment Authority 502,353 502,353 $ 588,470 $14,795,793 Capital Projects funds: Capital Improvement $ 1,623,470 $ 1,623,470 Sears 56,511 56,511 Civic Center Improvement 499,400 499,400 Special Assessment (671,140) Housing and Redevelopment Authority 12,803,975 12,803,975 $14,983,356 $14,312,216 Additionally, as a result of this change, the excess of revenues and other sources over expenditures and other uses for the debt service fund type increased $812,933 and $10,451,321 in 1987 and 1986, respectively, and for the capital projects fund type decreased $(2,485,275) and $(567,845) in 1987 and 1986, respectively. Individual funds were affected as follows: . . . .Increase (Decrease) . . . . Fund 1987 1986 Debt Service funds: City $ 7,534 $ 5,393 Special Assessment 730, 700 (1,191,995) ._. Housing and Redevelopment Authority 74,699 11,637,923 .., $ 812,933 $10,451,321 53 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 — 2. Accounting Changes (Continued) — A. Special Assessments (Continued) . . . .Increase (Decrease) . . . . Fund 1987 1986 Capital Projects funds: — Capital Improvement $ 178,379 $ 173,762 Sears (55,079) 5,531 Civic Center Improvement (22,484) 101,628 Satellite Fire Station 13,000 Special Assessment (177,528) 2,135,227 Housing and Redevelopment Authority (2,421,563) (2,983,993) — $(2,485,275) $ (567,845) B. Advance Refunding In accordance with the provisions of Statement No . 7 of the (GASB) Governmental Accounting Standards Board, Advance Refundings Resulting in Defeasance of Debt, the City has restated it' s accounting for the 1986 Crossover Refunding Bonds. In 1986, the bonds were treated as an advance -- refunding of the 1985 Variable Rate Bonds. In accordance with the GASB it is not possible to refund variable rate debt due to the uncertainty of the future debt service requirements. - The change in accounting has been applied retroactivly in the accompanying financial statements . The effect of the change was to eliminate the _ Defeasance Agency Trust Fund, and increase the January 1, 1987 fund balance in the Debt Service Funds by $11,601,722. Individual Fund Balances at January 1, 1987 were restated as follows: -' As Previously Fund Reported As Restated Debt Service funds: City $ 91,510 $ 91,510 — Special Assessment 13,015,328 13,015,328 Housing and Redevelopment Authority 538,554 12,140,276 $13,645,392 $25,247,114 3. Deficit Fund Balance The Grant Management Special Revenue Fund had a deficit fund balance of $(2,125) at December 31, 1987 the City plans to eliminate this deficit in 1988. 54 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 — 4. Cash and Investments Cash and investments at year end consists of the following: Bank deposits with maturities under 1 year $ 100,000 U.S. Government securities 12,573,976 U.S. Government agencies or instrumentalities 14,667,825 Commercial paper 7,704,575 Certificates of deposit 2,003,184 Repurchase agreements 2,854,991 39,904,551 Demand deposits and change funds 1,409 $39,905,960 In accordance with applicable Minnesota statutes, the City maintains deposits at depository banks authorized by the City Council . All such depositories are members of the Federal Reserve System. Minnesota statutes require that all deposits be protected by insurance , surety bond or collateral. If collateral is pledged as protection for the deposits , 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. State statutes authorize the City to invest in all the types of instruments shown above and due care is taken to insure the safety of principal. 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 Bank deposits with $ 100,000 $ $ $ 100,000 $ 100,000 maturities under 1 -• year U.S. Government 11,573,976 1,000,000 12,573,976 10,975,958 securities U.S. Government 14,667,825 14,667,825 14,471,723 angencies or instrumentalities Commercial paper 7,704,575 7,704,575 7,704,575 Certificates of deposit 2,003,184 2,003,184 1,945,682 Repurchase agreements 2,854,991 2,854,991 2,854,991 Total Investments $38,904,551 $ 0 $1,000,000 $39,904,551 $38,052,929 Demand Deposits and Change Funds 1,409 1,409 $39,905,960 $38,054,338 55 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 — 4. Cash and Investments (Continued) The City's investments are categorized above 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 brokers or dealers trust department or agent in the City' s name . Category 3 includes uninsured and unregistered investments for which the securities are held by the broker or dealer, 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 above which are held by a trustee in the City's name. — Cash and Investments per accompanying financial statement: Cash $ 999,805 Investments 39,884,551 Restricted Assets: Investments 20,000 — Advance from city's general account (998,396) Total $39,905,960 5. Special Assessments Receivable Special assessments receivable at December 31, 1987 are as follows: — Special Special Assessment Assessment Capital — General Debt Service Projects Total Deferred $1,489 $3,025,269 $138,204 $3,164,962 — Delinquent 5,716 214,035 2,272 222,023 Total $7,205 $3,239,304 $140,476 $3,386,985 — 56 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) -. DECEMBER 31, 1987 6. Due From Other Governments Amounts due from other governments at December 31, 1987 are as follows: General Fund: State of Minnesota — a) State Aid - Maintenance $ 11,638 b) Civil Defense 1,012 Anoka County a) Fines and Forfeits 17,935 b) Gas Reimbursement 229 c) Auctions 350 City of Hilltop, Fire Protection Service 29 - City of Columbia Heights, Hazardous Materials Service 36 City of Blaine, Hazardous Materials Service 36 $ 31,265 Special Revenue Funds: State of Minnesota a) MSA - Construction, Money Expended in 1984 $ 5,461 b) Section 8 Housing 5,614 c) Civil Defense 11,381 Anoka County a) Community Development Block Grant 77,830 b) Recycling 2,394 $102,680 Capital Projects Special Assessment Fund: State of Minnesota, Water Reclamation $ 36,710 Enterprise Funds: Utility Funds: Metropolitan Waste Control Commission (MWCC) Refund of overpayment $ 88,897 Current portion of amounts due from MWCC 16,195 _ Total current portion 105,092 Non-current portion - long-term receivable of amounts due from MWCC $272,131 57 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 .-. 6. Due From Other Governments (Continued) _ The non-current receivable in the Utility Enterprise Fund represents: 1. The balance for the sale of the City's sewer interceptors is $253 , 060 (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 $19,071, which will be repaid with interest through 1998 , is _ for advances made to the Commission during 1971 and 1972. 7. Changes in General Fixed Assets — A summary of changes in general fixed assets are as follows: Balance Balance Jan 1, 1987 Additions Deletions Dec 31, 1987 Land $ 1,717,078 $ 50,000 $ $ 1,767,078 — Buildings 1,773,058 9,779 1,782,837 Improvements other than buildings 17,591,857 327,651 17,919,508 _ Machinery and equipment 2,431,565 313,825 64,510 2,680,880 Construction in progress 936,988 763,337 191,077 1,509,248 Total $24,450,546 $1,464,592 $ 255,587 $25,659,551 ., Construction in progress is composed of the following: Contracted Expended to Unexpended Amount Dec. 31, 1987 Balance Moore Lake Improvement $1,006,194 $1,134,943 $(128,749) 1987 Street Projects 195,203 20,750* N/A Water & Sewer #169 399,254 353,555 45,699 $1,600,651 $1,509,248 $ (83,050) .., *This project is complete and will be assessed in the fall of 1988. The majority of the expenses were funded by the City. 58 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 8. Summary of Proprietary Fund Property and Equipment A summary of proprietary fund type property, plant and equipment at December 31, 1987 follows: Internal Enterprise Service Management Public Information Liquor Utility Total Services Land $ 66,961 $ 154,881 $ 221,842 $ Buildings 174,116 1,166,566 1,340,682 Improvements other than buildings 18,677 866,331 885,008 Machinery and equipment 208,963 2,174,465 2,383,428 207,412 Water and sewer lines 10,861,185 10,861,185 468,717 15,223,428 15,692,145 207,412 Less: Accumulated depreciation (189,086) (2,833,032) (3,022,118) (142,041) Net property and equipment $279,631 $12,390,396 $12,670,027 $ 65,371 9. Long-Term Debt The following is a summary of long-term debt transactions of the City for the year ended December 31, 1987: General Enterprise Long-Term Funds Debt Total Bonds payable at January 1, 1987 $ 70,000 $33,965,000 $34,035,000 Bonds retired (50,000) (740,000) (790,000) Bonds payable at December 31, 1987 $ 20,000 $33,225,000 $33,245,000 59 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 9. Long-Term Debt (Continued) Bonds payable at December 31, 1987 are comprised of the following individual issues (in thousands of dollars) : General Long-Term Debt: $1 , 220 ,000 Refunding Bonds of 1975 due in varying annual installments of $10 , 000 - $45 , 000 through January 1, 1989 ; _ interest at 6.00% 10 $2,135,000 G.O. Special Assessment Bonds of 1972 due in varying annual installments of $50, 000 - $75 , 000 through January 1 , 1994; interest at 5.20% - 5.30% 300 $1 , 550 ,000 Special Assessment Bonds of 1976 due in varying — annual installments of $25 ,000 through February 1 , 1990 ; interest at 5.60% - 6.00% 75 $1 , 115 ,000 Special Assessment Bonds of 1977 due in varying annual installments of $50,000 - $115 ,000 through February 1 , 1989; interest at 4.80% - 4.90% 100 $1 , 755 ,000 Special Assessment Bonds of 1980 due in varying annual installments of $25,000 - $155 ,000 through February 1 , 2001; interest at 7.35% - 8.40% 850 _ $1 ,425 ,000 Special Assessment Bonds of 1982 due in varying annual installments of $15,000 - $175 ,000 through February 1, 1999; interest at 9.20% - 10.70% 790 –' $3 , 100 ,000 Variable Rate Improvement Bonds of 1985 due in varying annual installments of $178 , 250 - $385 , 250 through _ February 1 , 2000 ; interest will vary depending on economic condition with a ceiling of 11% per annum 3,100 $2,705,000 Refunding Improvement Bonds of 1986 due in varying annual installments of $140,000 - $290,000 through February 1 , 2000; interest at 6.00% - 7.40% 2,705 $4,070,000 Tax Increment Revenue Refunding Bonds of 1985 due in varying annual installments of $180,000-460,000 through February 1, 1999; interest at 6.25% - 9.00% 3,700 _, $11,550,000 Variable Rate Tax Increment Bonds of 1985 due in varying annual installments of $293 , 250 - $2 , 800 , 250 through February 1 , 2000 ; interest will vary depending on economic conditions with a ceiling of 10% per annum 11,550 $10,045,000 General Obligation Tax Increment Refunding Bonds of — 1986 due in varying annual installments of $230,000 - $2,095,000 through February 1, 2000; interest at 6.00% - 7.40% 10,045 $33,225 _ 60 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 9. Long-Term Debt (Continued) Enterprise Fund: $780,000 General Obligation (G.O. ) Water Revenue Bonds of 1965 due in annual installments of $50,000 through February 1 , 1987 and $20, 000 on the final maturity date , February 1 , 1988 ; interest at 3.50% $ 20 Annual Requirements to Amortize Long-Term Debt December 31, 1987 General Obligation Year Ending Special December 31 Assessment Redevelopment Enterprise Total 1988 1,028,465 1,682,664 20,350 2,731,479 1989 1,030,248 2,015,401 3,045,649 1990 767,327 1,517,445 2,284,772 1991 668,023 1,546,964 2,214,987 1992 567,943 1,641,470 2,209,413 1993 - 1997 2,083,601 8,473,754 10,557,355 1998 - 2001 1,084,432 5,822,030 6,906,462 $7,230,039 $22,699,728 $ 20,350 $29,950,117 The preceding debt service requirements do not include interest on the Variable Rate Improvement and Tax Increment Bonds of 1985 due to their uncertainty. Currently rates approximate 5%. There is , however, a ceiling of 11% and 10% respectively. It should also be noted that $12,452,500 is being held in escrow to make principal payments on the variable rate bonds and interest payments on the crossover bonds. The debt service on the variable rate issues is completely eliminated in the year 1990 as the City will crossover to the fixed rate General Obligation Bonds of 1986 at this time. $25 , 961, 003 is available in the Debt Service Fund to service the General Obligation Bonds. The Tax Increment Revenue Bonds are payable primarily from increment revenue that is generated from the related district. 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 7.33% of the most recent assessed valuation less certain deductions . At December 31, 1987, the legal debt margin was $17,140,758. 61 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 9. Long-Term Debt (Continued) A. Prior-Year Defeasance of Debt In prior years, the City defeased certain general obligation (and other) bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not _ included in the City's financial statements . At December 31 , 1987 , $3,375,000 of bonds outstanding are considered defeased. 10. Defined Benefit Pension Plans-Statewide A. Plan Description — The majority of 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 and the Public Employees Police and Fire Fund which are cost-sharing multiple-employer public employee retirement systems . The payroll for employees covered by PERA plans for the year ended December 31, 1987, was $3,468,508; the City's total payroll was $4,499,368. All full-time employees and certain part-time employees are eligible to participate in the PERA plans. Public Employees Retirement Fund members belong to either the Coordinated Fund or the Basic Fund. Coordinated _ members are covered by Social Security and Basic members are not. All police officers, fire fighters and peace officers who qualify for membership by statute are covered by the Police and Fire Fund. The PERA plans provide pension benefits , deferred annuity, and death and disability benefits . — Benefits are established by State statute. Retirement benefits for members of the Basic and Coordinated Funds are as _ follows: (a) When age plus years of service equal 90, the full unreduced normal annuity is payable. — (b) As early as age 55 with at least 5 years of paid service credit ; annuity reduced 1/4 percent for each month under age 65. _ (c) Any age with at least 30 years, reduced by 1/4 percent for each month under age 62. (d) Age 65 or older with at least one but less than 5 years of paid service credit (proportionate annuity) . Must terminate service at age 65 or older. (e) Age 55 with at least 5 years of paid service credit or any age with at least 30 years representing PERA service combined with other fund coverage. Retirement benefits for members of the Police and Fire Funds are as follows: 62 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 10. Defined Benefit Pension Plans-Statewide (Continued) A. Plan Description (Continued) (a) When age plus years of service equal 90 , the full unreduced normal annuity is payable. (b) Age 55 or older with at least 5 years service credit. (c) Age 55 or older with at least 5 years paid service credit representing PERA service combined with other fund coverage. (d) Age 65 or older with at least 1 year of paid service credit (proportionate annuity) . Must terminate service at age 65 or older. A member who terminates public service with five or more years of credited allowable service may leave his or her amount in the fund to qualify for an annuity at retirement age. The annuity as determined under the formula will be increased from the first of the month following date of termination at prescribed interest rates. The former member may accept a refund at any time prior to the date retirement annuity begins. The funds also provide various death and disability benefits , whereby the disabled employee or surviving spouse is entitled to receive amounts determined as defined by the funds. B. Contributions Required and Made Covered employees are required by State statute to contribute fixed percentages of their gross earnings to the pension plans . The City makes annual contributions to the pension plans equal to the amount required by State statutes. Current contribution rates for the plans are as follows: Additional •. Employee Employer Employer Public Employees Retirement Fund: Basic Fund 8% 8% 2 1/2% Coordinated Fund 4% 4% 1/4% Police and Fire Fund 8% 12% 0 Total contributions made during fiscal year 1987 amounted to $444 , 646 , of which $248,738 was made by the City and $195 , 908 was made by employees . These contributions represented 7 . 17 percent (City) and 5 . 65 percent (employees) of the covered payroll. C. Funding Status and Progress 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 the PERA' s funding status on a going-concern basis , assess 63 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 10. Defined Benefit Pension Plans-Statewide (Continued) C. Funding Status and Progress (Continued) progress made in accumulating sufficient assets to pay benefits when due, — and make comparisons among Public Employees Retirement Systems and employers. The PERA does not make separate measurements of assets and pension benefit obligation for individual employers. _ The pension benefit obligations of the PERA as of June 30, 1987 , were as follows: Public Public Employees Employees Retirement Police & _ Fund Fire (in millions) Total pension benefit obligations $2,839 $ 437 Net assets available for benefits, 2,609 550 at market — Unfunded pension benefit obligation $ 230 $(113) The actuarial calculations of annual contributions include amounts that would be required to achieve full (100 percent) funding by the year 2009. The measurement of the pension benefit obligation is based on an actuarial valuation as of June 30, 1987. Net assets available to pay pension benefits were valued as of June 30, 1987. The City's contribution for the year to PERA plans represented 0.33 percent of total contributions required of all participating entities. Ten-year historical trend information is presented in PERA' s Comprehensive Annual Financial Report for the year ended June 30, 1987. This information is useful in assessing the pension plan's accumulation of sufficient assets to pay pension benefits as they become due. D. Related Party Investments During 1987 and as of June 30, 1987, PERA held no securities issued by the City or other related parties. E. Federal Insurance Contribution Act (Social Security) Approximately sixty (60%) percent of the permanent City employees are covered by Social Security. The 1987 contribution rate was 7.15% on $43,800 in wages. The cost of Social Security for 1987 was $146,406. In addition, as of April 1, 1987 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 with an equal match made by the City. The 1987 cost for Medicare was $4,986. 64 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) -. DECEMBER 31, 1987 _ 11. Defined Benefit 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 and administrator for some of the City' s firefighters . The City's payroll for employees covered by the Association for the year ended December 31, 1987 was $76,988; the City's total payroll was $4,499,368. Firefighters of the City hired after October 4, 1951 , are members of the Association, and are entitled to pension benefits as follows: ,_. Normal Retirement Benefit Eligibility 55 years of age and 20 years of service Amount The plan provides a monthly benefit of $12 per year of service (maximum 30 years) . Disability Benefit Upon permanent disability a member with 10 or more years of service is entitled to the vested accrued normal retirement benefit . Benefit payments begin immediately is disability occurred in the line of duty. Otherwise, payments commence upon attainment of age 50. Lump Sum Death Benefit $1,000 payable on death of any active or inactive member at discretion of the Board. Survivors Benefit On death of any active member with 10 or more years of service or inactive member, the vested accrued normal retirement is payable to the surviving spouse or children. Benefits cease upon remarriage of the spouse or childs attainment of age 18. On death of any active member with less than 10 years of service, $14,400 is payable to the survivors. Deferred Vested Benefit On termination after completion of 10 years of service, a deferred benefit is payable at age 50 equal to the accrued benefit times the vesting _ percentage. The vesting percentage is 60% after 10 years plus 4% per year in excess of 10 to a maximum of 100% after 20 years. 65 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 11. Defined Benefit Pension Plan - Fridley Volunteer Firefighter Relief Association (Continued) — B. Related Party Investments During 1987 and as of December 31, 1987 the Association held no securities issued by the City or other related parties. C. Funding Status and Progress The Fridley Fire Relief Association is fully funded as of December 31, 1987. It is the intention of the City and the Relief Association to convert this plan to a defined contribution plan as of January 1, 1988. At December 31, 1987 the plan was funded in excess of its obligations by $414,561, determined as follows: Pension Benefit Obligations: — Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits $ 629,281 Current employees -- Accumulated employee contributions including allocated investment income 681,045 Total Pension Benefit Obligation 1,310,326 Net assets available for benefits, at Market 1,724,887 Unfunded Pension Benefit Obligation $ (414,561) No changes in actuarial assumptions or benefit provisions that would significantly affect the valuation of the pension benefit obligation occurred during 1987. — D. Contributions Required and Contributions Made Currently neither the City or the members are required to make any contributions to the Association. The plan is funded by state aids which are paid to the City and remitted directly to the Association. E. 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. 66 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 12. 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 some of the City's Police Officers . The City's payroll for employees covered by the Association for the year ended December 31, 1987 was $498,605; the City's total payroll was $4,499,368. Police Officers of the City hired prior to December 15, 1975, are members of the Association, and are entitled to pension benefits as follows: 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 or 36/75 if no spouse is receiving. 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. 67 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 12. Defined Benefit Pension Plan - Fridley Police Relief Association (Continued) A. Plan Description (Continued) Post-Retirement Adjustment ("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. Related Party Investments During 1987 and as of December 31, 1987 the Association held no securities issued by the City or other related parties. C. 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, 1986 . 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. 68 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 _.. 12. Defined Benefit Pension Plan - Fridley Police Relief Association (Continued) C. Funding Status and Progress (Continued) At December 31 , 1986 , the unfunded pension benefit obligation was $1,429,437, determined as follows: Pension Benefit Obligation: Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits $3,377,784 Current employees -- Accumulated employee contributions including allocated investment income 319,741 Employer financed 1,646,571 Total Pension Benefit Obligation 5,344,096 Net assets available for benefits, at cost (market value was $4,109,012) 3,914,659 Unfunded Pension Benefit Obligation $1,429,437 No changes in actuarial assumptions or benefit provisions that would significantly affect the valuation of the pension benefit obligation occurred during 1987. D. 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. 69 CITY OF FRIDLEY, MINNESOTA r NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 12. Defined Benefit Pension Plan - Fridley Police Relief Association (Continued) D. Contributions Required and Contributions Made (Continued) Total contributions to the Association in 1987 amounted to $128 , 513 , of _ which $94,548 and $33,965 were made by the City and its police officers respectively. The contributed amounts were actuarially determined as described above and were based on an actuarial valuation as of December 31 , 1986. $141 , 585 was received in state aids that were remitted to the Association. The contributions represent funding for normal cost ($138,694) and the amortization of the unfunded actuarial accrued liability ($131,404) . Contributions made by the City and its police officers represent 19 percent .-. and 6.8 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 1987 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. _ E. 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. -- 13. Interfund Receivables and Payables ,^ Interfund receivables and payables at December 31, 1987 are as follows: Interfund Interfund Receivables Payables Due From/Due To: -- Special Revenue Funds - HRA Reimbursement Fund $ 26,663 $ Capital Projects Funds - Capital Improvement Fund 25,000 Special Assessment Funds 53,770 HRA Fund 80,433 Internal Service Fund - Management Information Services Fund 25,000 $105,433 $105,433 70 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 14. Reserved Fund Balances/Retained Earnings The following reservations have been made of various fund balances/retained earnings at December 31, 1987: Fund Balance General Fund — Reserved for: Encumbrances $ 192,099 Park construction 464,076 Inventory 18,861 Prepaid expenditures 27,469 702,505 Debt Service Funds Reserved for Debt Service 18,620,137 Capital Projects Funds Reserved for: Encumbrances 562,249 Construction 5,053,169 Debt service 3,035,838 8,651,256 Retained Earnings Internal Service Funds Employee Benefits Fund Reserved for employee benefits 501,591 Management Information Services Fund Reserved for capital outlay 155,803 Self-Insurance Fund Reserved for contingencies 73,569 $ 730,963 ^ 71 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 _ 15. Designated Fund Balance The following designations have been made of various fund balances at December 31, 1987: General Fund Working Capital $3,000,000 Subsequent Year's Expenditures 666,870 _ Replacement of Fixed Assets 2,000,000 5,666,870 Capital Projects Capital Improvement Fund Replacement of Fixed Assets 1,919,375 ... Park Improvement 63,199 1,982,574 Total $7,649,444 72 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 16. Segment Information for Enterprise Funds - The City maintains operating funds for Liquor and Utility (Water and Sewer Operations) . Segment information for the year ended December 31 , 1987 is as follows: Total Enterprise Liquor Utility Funds _ Sales (less cost of sales of $2,192,231) $ 404,148 $ -0- $ 404,148 Operating revenues -0- 2,473,814 2,473,814 Operating expenses (402,325) (2,513,721) (2,916,046) Operating income (loss) 1,823 (39,907) (38,084) — Non-operating revenues (expenses) - net 26,466 395,501 421,967 — Income before operating transfers 28,289 355,594 383,883 Operating transfers from other — funds -0- 14,895 14,895 Operating transfers to other funds (10,000) -0- (10,000) Net income $ 18,289 $ 370,489 $ 388,778 Depreciation expense included in operating expenses 28,017 325,116 353,133 Property and equipment '-' Additions 4,357 887,988 892,345 Deletions (176) -0- (176) Working capital 626,716 5,604,998 6,231,714 Total assets 1,054,125 18,640,556 19,694,681 Fund equity - Contributed 10,861,185 10,861,185 Retained earnings $ 906,347 $ 7,426,340 $ 8,332,687 73 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1987 17. Deferred Compensation Plan The City offers its employees a deferred compensation plan established in accordance with Internal Revenue Code Section 457. The plan, available to all employees, permits them to defer a portion of their salary until future years . The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the 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 $1,789,790 stated at market on December 31, 1987 and are shown —' in the financial statements as "Other assets" in the agency funds with a corresponding credit to "Deposits Payable. " 18. 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. 19. Leases The City leases the property at 214 Mississippi from the Fridley Housing and Redevelopment Authority for a warehouse liquor store. The lease was for 3 years terminating in December of 1987 . The City and Housing and Redevelopment Authority have agreed to extend the lease for a period of one year. Rental expense is $21,250 annually. 74 GENERAL FUND The General Fund was established to account for the revenues and expenditures necessary to carry out basic governmental activities of the City, such as general government, public safety, and public works. Revenues are recognized by source, such as property taxes, licenses and permits, fines and forfeits, charges for services and state-shared taxes. General Fund expenditures are made primarily for current day to day operations and are recorded by functional classifications and by operating departments.This fund accounts for all financial transactions not accounted for in another fund. • • Exhibit B- 1 CITY OF FRIDLEY, MINNESOTA GENERAL FUND COMPARATIVE BALANCE SHEET December 31, 1987 and 1986 1987 1986 Assets Cash $ 995,862 $ 366,557 Investments 5,352,933 5,473,886 Receivables: Accounts 3,253 27,140 Taxes - Unremitted 95,697 323,121 Delinquent 277,864 174,680 Special Assessments - Deferred 1,489 3,530 Delinquent 5,716 5,421 Interest 591,634 583,162 Due from other governments 31,265 53,244 Inventories 18,861 17,752 Prepaid expenditures 27,469 35,465 Total assets $7,402,043 $7,063,958 Liabilities and Fund Balance Liabilities: Accounts payable $ 117,420 $ 97,367 Deposits payable 13,796 25,189 ... Salaries payable 125,167 113,471 Deferred revenue 285,069 183,631 Due to other governments 3,660 3,501 Total liabilities 545,112 423,159 Fund balance: Reserve for encumbrances 192,099 195,858 Reserve for park construction 464,076 224,952 Reserve for inventory 18,861 17,752 Reserve for prepaid expenditures 27,469 35,465 Unreserved - Designated for working capital 3,000,000 3,000,000 Designated for subsequent year's expenditures 666,870 291,931 Designated for replacement of fixed assets 2,000,000 1,150,000 Undesignated 487,556 1,724,841 Total fund balance 6,856,931 6,640,799 Total liabilities and fund balance $7,402,043 $7,063,958 75 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, 1987 With Comparative Actual Amounts for Year Ended December 31, 1986 - 1987 '-' Variance- Favorable 1986 Budget Actual (Unfavorable) Actual - Revenues: Taxes and special assessments $2,715,640 $2,647 ,334 $ (68,306) $2,598,108 - Licenses and permits 302,657 352,580 49,923 304,028 Intergovernmental revenue 2,775,055 2,861,677 86,622 2,784,222 Charges for services 134,892 164,617 29,725 157,829 _ Fines and forfeits 207,568 282,914 75,346 287 ,710 Interest on investments 320,000 409,560 89,560 459,024 Miscellaneous 82,571 303,939 221,368 234,548 Total revenues 6,538,383 7,022,621 484,238 6,825,469 - Expenditures: Current - General government 1,089,466 1,062,891 26,575 919,495 Public safety 2,733,397 2,707,681 25,716 2,576,847 Civic center 180,483 160,222 20,261 180,839 _ Public works 2,062,041 1,992,949 69,092 1,886,888 Recreation and naturalist 597,763 530,066 67,697 535,430 Capital outlay 557,055 418,819 138,236 340,252 Total expenditures 7,220,205 6,872,628 347,577 6,439,751 - Excess (deficiency) of revenues over expenditures (681,822) 149,993 831,815 385,718 - Other financing sources (uses) : Operating transfers in 188,576 138,576 (50,000) 375,167 - Operating transfers out (170,663) (72,437) 98,226 (194,936) Total other financing sources (uses) 17,913 66,139 48,226 180,231 - Excess (deficiency) of revenues and other financing sources over expenditures and other - financing uses (663,909) 216,132 880,041 565,949 Fund balance January 1 6,640,799 6,640,799 -0- 6,074,850 - Fund balance December 31 $5,976,890 6,856,931 880,041 6,640,799 76 -. Exhibit B-3 CITY OF FRIDLEY, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES AND OTHER FINANCING SOURCES - BUDGET AND ACTUAL .. Year Ended December 31, 1987 With Comparative Actual Amounts for Year Ended December 31, 1986 1987 Variance- Favorable 1986 -' Budget Actual (Unfavorable) Actual Taxes and special assessments: .. Current ad valorem taxes $2,639,838 $2,571,472 $(68,366) $2,491,778 Delinquent ad valorem taxes 42,500 45,917 3,417 39,376 Penalties and interest 24,500 24,581 81 58,648 -. Forfeited sale-taxes 2,000 2,107 107 3,524 Special assessments 6,802 3,257 (3,545) 4,782 Total taxes 2,715,640 2,647,334 (68,306) 2,598,108 .' Licenses and permits Licenses - Contractor 12,498 13,406 908 14,287 -. Business 100,377 81,915 (18,462) 81,475 All other 34,333 34,045 (288) 45,468 Permits 155,449 223,214 67,765 162,798 .. Total licenses and permits 302,657 352,580 49,923 304,028 Intergovernmental revenue: Civil defense 10,000 6,166 (3,834) 6,816 State maintenance aid 117,000 122,117 5,117 132,454 State credits 591,212 591,212 588,366 Local government aid 1,903,288 1,900,826 (2,462) 1,858,643 -. Other state grants 5,000 25,618 20,618 16,611 Police and fire pension 148,555 215,738 67,183 181,332 Total intergovernmental revenue 2,775,055 2,861,677 86,622 2,784,222 Charges for services: General government 12,549 18,495 5,946 20,407 .. Public safety 19,414 22,934 3,520 19,625 Conservation of health 4,179 4,168 (11) 2,980 Recreation 98,750 119,020 20,270 114,817 Total charges for services 134,892 164,617 29,725 157,829 Fines and forfeits 207,568 282,914 75,346 287,710 •. Interest on investments 320,000 409,560 89,560 459,024 (Continued) 77 Exhibit B 3 Continued CITY OF FRIDLEY, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES AND OTHER FINANCING SOURCES - BUDGET AND ACTUAL Year Ended December 31, 1987 With Comparative Actual Amounts for Year Ended December 31, 1986 1987 Variance- _ Favorable 1986 Budget Actual (Unfavorable) Actual Miscellaneous revenue: Rent income $ $ 5,285 $ 5,285 $ Sale of property 36,800 21,529 (15,271) 95,061 Donations 22,700 250,427 227,727 92,599 - Miscellaneous refunds 23,071 26,698 3,627 46,888 Total miscellaneous revenue 82,571 303,939 221,368 234,548 Total revenues 6,538,383 7,022,621 484,238 6,825,469 Other financing sources: _ Operating transfers in - Municipal State Aid Fund 128,576 128,576 142,863 Revenue Sharing Fund 179,297 Civic Center Debt Service 50,000 (50,000) Liquor Fund 10,000 10,000 50,000 Employee Benefit Fund 3,007 Total other financing sources 188,576 138,576 (50,000) 375,167 - Total revenues and other financing sources $6,726,959 $7,161,197 $434,238 $7,200,636 .- 78 - Exhibit B-4 CITY OF FRIDLEY, MINNESOTA GENERAL FUND - SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES - BUDGET AND ACTUAL Year Ended December 31, 1987 With Comparative Actual Amounts for Year Ended December 31, 1986 1987 Variance- Favorable 1986 _ Budget Actual (Unfavorable) Actual General government: -. Mayor and council - Personal services $ 79,979 $ 79,963 $ 16 $ 69,792 Supplies and other charges 41,765 41,765 29,558 121,744 121,728 16 99,350 Planning commission - Personal services 26,505 23,793 2,712 17,904 Supplies and other charges 7,187 6,618 569 5,154 33,692 30,411 3,281 23,058 ., Other commissions - Personal services 9,838 3,151 6,687 1,811 Supplies and other charges 13,478 13,438 40 3,694 23,316 16,589 6,727 5,505 City Manager - Personal services 143,958 143,927 31 150,736 - Supplies and other charges 70,480 70,466 14 60,650 214,438 214,393 45 211,386 Personnel - Personal services 48,441 48,426 15 49,490 Supplies and other charges 10,133 6,756 3,377 13,357 58,574 55,182 3,392 62,847 Legal - Personal services 5,363 2,751 2,612 857 Supplies and other charges 143,955 143,873 82 121,438 149,318 146,624 2,694 122,295 Elections - " Personal services 8,639 2,333 6,306 7,863 Supplies and other charges 5,679 5,622 57 19,806 14,318 7,955 6,363 27,669 Accounting - Personal services 182,262 181,963 299 147,840 Supplies and other charges 136,759 136,595 164 78,582 319,021 318,558 463 226,422 Assessing - - Personal services 126,077 126,024 53 114,410 Supplies and other charges 28,968 25,427 3,541 26,553 155,045 151,451 3,594 140,963 Total general government 1,089,466 1,062,891 26,575 919,495 (Continued) 79 Exhibit B 4 CITY OF FRIDLEY, MINNESOTA _. Continued GENERAL FUND SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES - BUDGET AND ACTUAL ,- Year Ended December 31, 1987 With Comparative Actual Amounts for Year Ended December 31, 1986 1987 Variance- Favorable 1986 -- Budget Actual (Unfavorable) Actual Public safety: _ Police - Personal services $1,905,405 $1,905,234 $ 171 $1,817,843 Supplies and other charges 247,471 242,148 5,323 220,871 - 2,152,876 2,147,382 5,494 2,038,714 Fire - Personal services 426,504 426,314 190 407,770 - Supplies and other charges 95,311 86,664 8,647 85,627 521,815 512,978 8,837 493,397 Civil defense - Personal services 54,096 43,757 10,339 41,052 Supplies and other charges 4,610 3,564 1,046 3,684 58,706 47,321 11,385 44,736 - Total public safety 2,733,397 2,707,681 25,716 2,576,847 Civic center: Personal services 62,079 41,920 20,159 70,712 Supplies and other charges 118,404 118,302 102 110,127 180,483 160,222 20,261 180,839 "" Public Works: Code enforcement - _ Personal services 188,337 135,683 52,654 129,670 Supplies and other charges 41,293 40,815 478 38,274 229,630 176,498 53,132 167,944 Planning - Personal services 102,590 92,071 10,519 102,041 Supplies and other charges 27,264 23,411 3,853 23,787 - 129,854 115,482 14,372 125,828 Engineering - _ Personal services 132,087 131,608 479 118,459 Supplies and other charges 33,621 33,540 81 36,124 165,708 165,148 560 154,583 Public Works and Parks - Personal services 881,630 881,012 618 833,705 Supplies and other charges 655 ,219 654, 80° 410 604,828 - 1,536, 849 1,535 ,821 1,028 1,438,533 Total public works 2,062,041 1,992,949 69,092 1,886,888 (Continued) 80 - Exhibit B-4 Continued CITY OF FRIDLEY, MINNESOTA GENERAL FUND -. SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES - BUDGET AND ACTUAL Year Ended December 31, 1987 With Comparative Actual Amounts for Year Ended December 31, 1986 1987 Variance- ... Favorable 1986 Budget Actual (Unfavorable) Actual Recreation and naturalist: " Naturalist - Personal services $ 109,333 $ 106,342 $ 2,991 $ 77,909 Supplies and other charges 51,377 38,600 12,777 46,445 - 160,710 144,942 15,768 124,354 Recreation - Personal services 296,722 261,156 35,566 291,883 Supplies and other charges 140,331 123,968 16,363 119,193 437,053 385,124 51,929 411,076 Total recreation and naturalist 597,763 530,066 67,697 535,430 Capital outlay expenditures - City manager 2,345 124 2,221 1,785 Elections 236 236 Accounting 946 124 822 1,402 Assessing 760 760 - Police 122,850 114,254 8,596 122,895 Fire 37,356 37,331 25 4,376 Civil defense 1,404 1,404 Civic center 33,250 10,600 22,650 5,933 Code enforcement 1,500 1,500 Planning 1,500 1,379 121 446 Engineering 2,300 1,879 421 " Public works 344,443 243,751 100,692 200,625 Naturalist 6,865 5,188 1,677 1,912 Recreation 1,300 1,285 15 878 .-. Total capital outlay 557,055 418,819 138,236 340,252 Total expenditures 7,220,205 6,872,628 347,577 6,439,751 Other financing uses: Operating transfers out - Grant Management Fund 8,000 .. Capital Improvement Fund 12,563 12,563 76,904 Special Assessment Capital Projects Fund 158,100 59,874 98,226 110,032 .. Total other financing uses 170,663 72,437 98,226 194,936 Total expenditures and other financing uses $7,390,868 $6,945,065 $445,803 $6,634,687 81 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. Municipal State Aid Fund This fund is used to account for the City' s allocation of the state collected highway user tax. The allocation is based on both population and the need for construction of state aid streets in the City. Transfers are made from this fund to the Special Assessment Capital Projects Fund for current year road construction activity. Revenue Sharing Fund This fund was established to receive and account for the City's allocation of Federal Revenue Sharing money. Fridley has been using revenue sharing money for the reduction of general property taxes , however, in 1986 the funds granted to the City were reduced and not reauthorized for future years. The program was terminated September 16, 1986 due to the federal budget reductions required by the Gramm-Rudman-Hollings Act. Cable TV Fund This fund receives revenues from issuance of 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. 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, 1987 With Comparative Totals for December 31, 1986 Municipal State Cable Grant Aid TV Management — Assets Cash $ $ $ Investments 1,499,736 68,000 Receivables: _ Accounts 38,446 Interest Due from other funds Due from other governments 5,461 97,219 — Total assets $1,505,197 $106,446 $97,219 Liabilities and Fund Balance Liabilities: — Advance from city's general account $ 33,360 $ $96,487 Accounts payable 14,038 1,808 Salaries payable 734 1,049 — Due to other funds Due to other governments Total liabilities 33,360 14,772 99,344 Fund balance (deficit) : Unreserved - Designated for subsequent - year's expenditures Undesignated 1,471,837 91,674 (2,125) Total fund balance 1,471,837 91,674 (2,125) Total liabilities and fund balance $1,505,197 $106,446 $97,219 — 84 Exhibit C- 1 HRA Totals ... Reimbursement 1987 1986 $ $ $ 8,316 1,567,736 1,588,239 38,446 17,690 8,100 26,663 26,663 13,687 102,680 104,506 $26,663 $1,735,525 $1,740,538 $20,120 $ 149,967 $ 98,974 3,680 19,526 1,813 2,863 4,646 4,590 10,000 9,088 26,663 174,139 124,465 1,569 1,561,386 1,614,504 .. -0- 1,561,386 1,616,073 $26,663 $1,735,525 $1,740,538 .. 85 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUNDS _ COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Year Ended December 31, 1987 _ With Comparative Totals for Year Ended December 31, 1986 Municipal State Cable Grant Aid TV Management Revenues: Licenses and permits $ $ 53,003 $ Intergovernmental revenue 21,020 180,879 _ Interest on investments 117,862 5,770 Miscellaneous Total revenues 138,882 58,773 180,879 Expenditures: Current - General government 63,685 134,573 Capital outlay 7,191 50,000 Total expenditures -0- 70,876 184,573 Excess (deficiency) of revenues over expenditures 138,882 (12,103) (3,694) Other financing sources (uses) : Operating transfers in Operating transfers out (177,772) Total other financing sources (uses) (177,772) -0- -0- Excess (deficiency) of revenues and other financing sources over expenditures and other financing uses (38,890) (12,103) (3,694) Fund balance January 1 1,510,727 103,777 1,569 Fund balance (deficit) December 31 $1,471,837 $ 91,674 $ (2,125) 86 Exhibit C-2 HRA Totals Reimbursement 1987 1986 $ $ 53,003 $ 54,934 182,621 384,520 778,576 123,632 150,254 14,005 $182,621 561,155 997,769 182,621 380,879 310,880 57,191 54,242 182,621 438,070 365,122 -0- 123,085 632,647 19,381 (177,772) (439,740) -0- (177,772) (420,359) -0- (54,687) 212,288 -0- 1,616,073 1,403,785 $ -0- $1,561,386 $1,616,073 87 Exhibit C-3 — CITY OF FRIDLEY, MINNESOTA MUNICIPAL STATE AID SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET — December 31, 1987 and 1986 1987 1986 Assets _, Cash $ $ 8,316 Investments 1,499,736 1,489,283 Interest receivable 7,668 '- Due from other governments 5,461 5,460 Total assets $1,505,197 $1,510,727 — Liability and Fund Balance Liability: Advance from city's general account $ 33,360 $ -0- Fund balance: Unreserved - undesignated 1,471,837 1,510,727 --Total liability and fund balance $1,505,197 $1,510,727 88 Exhibit C-4 _ CITY OF FRIDLEY, MINNESOTA MUNICIPAL STATE AID SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 1987 With Comparative Actual Amounts for Year Ended December 31, 1986 1987 Variance- " Favorable 1986 Budget Actual (Unfavorable) Actual Revenues: Intergovernmental - Minnesota state aid $ 261,895 $ 21,020 $(240,875) $ 393,721 Interest on investments 111,120 117,862 6,742 130,263 Total revenues 373,015 138,882 (234,133) 523,984 Other financing uses: General Fund (128,576) (128,576) (142,863) Special Assessment Capital Projects Fund (244,439) (49,196) 195,243 (117,580) Total other financing uses (373,015) (177,772) 195,243 (260,443) Excess (deficiency) of revenues over other financing uses -0- (38,890) (38,890) 263,541 Fund balance January 1 1,510,727 1,510,727 -0- 1,247,186 Fund balance December 31 $1,510,727 $1,471,837 $ (38,890) $1,510,727 89 Exhibit C-5 CITY OF FRIDLEY, MINNESOTA REVENUE SHARING SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1987 and 1986 _ 1987 1986 Asset Due from other governments $ -0- $3,349 — Liability and Fund Balance Liability: Advance from city's general account $ -0- $3,349 Fund balance: Unreserved - undesignated Total liability and fund balance $ -0- $3,349 90 Exhibit C-6 CITY OF FRIDLEY, MINNESOTA REVENUE SHARING SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 1987 With Comparative Actual Amounts for Year Ended December 31, 1986 1987 Variance- Favorable 1986 _ Budget Actual (Unfavorable) Actual Revenues: Intergovernmental - Revenue sharing $ $ $ $127,907 Interest on investments 9,726 Total revenues -0- -0- -0- 137,633 Expenditures: Current General government - Supplies and other charges -0- -0- -0- 172 Excess of revenues over expenditures -0- -0- -0- 137,461 Other financing uses: Operating transfers out - General fund -0- -0- -0- (179,297) Deficiency of revenues over expenditures and other financing uses -0- -0- -0- (41,836) Fund balance January 1 -0- -0- -0- 41,836 Fund balance December 31 $ -0- $ -0- $ -0- $ -0- ... 91 Exhibit C-7 — CITY OF FRIDLEY, MINNESOTA CABLE TV SPECIAL REVENUE FUND _ COMPARATIVE BALANCE SHEET December 31, 1987 and 1986 1987 1986 Assets — Investments $ 68,000 $ 98,956 Receivables: — Accounts 38,446 17,690 Interest 432 — Total assets $106,446 $117,078 Liabilities and Fund Balance — Liabilities: Advance from city's general account $ $ 3,755 Accounts payable 14,038 2 — Salaries payable 734 456 Due to other governments 9,088 Total liabilities 14,772 13,301 — Fund balance: Unreserved - undesignated 91,674 103,777 Total liabilities and fund balance $106,446 $117,078 92 Exhibit C-8 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, 1987 With Comparative Actual Amounts for Year Ended December 31, 1986 .. 1987 Variance- Favorable 1986 Budget Actual (Unfavorable) Actual Revenues: Licenses - franchise fee $ 51,725 $ 53,003 $ 1,278 $ 54,934 Interest on investments 7,045 5,770 (1,275) 10,265 Donations 14,005 Total revenues 58,770 58,773 3 79,204 Expenditures: Current General government - Personal services 23,000 25,219 (2,219) 22,678 Supplies and other charges 33,770 38,466 (4,696) 34,900 Capital outlay 2,000 7,191 (5,191) 23,479 �- Total expenditures 58,770 70,876 (12,106) 81,057 Deficiency of revenues over expenditures -0- (12,103) (12,103) (1,853) Fund balance January 1 103,777 103,777 -0- 105,630 Fund balance December 31 $103,777 $ 91,674 $(12,103) $103,777 93 Exhibit C-9 — CITY OF FRIDLEY, MINNESOTA — GRANT MANAGEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1987 and 1986 _ 1987 1986 Asset Due from other governments $97,219 $95,697 — Liabilities and Fund Balance Liabilities: Advance from city's general account $96,487 $81,249 Accounts payable 1,808 1,800 Salaries payable 1,049 1,079 Due to other funds 10,000 Total liabilities 99,344 94,128 — Fund balance (deficit) : Designated for subsequent years expenditures 1,569 --Unreserved - undesignated (2,125) Total liabilities and fund balance $97,219 $95,697 94 Exhibit C- 10 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, 1987 With Comparative Actual Amounts for Year Ended December 31, 1986 1987 Variance- ' Favorable 1986 Budget Actual (Unfavorable) Actual Revenues: Intergovernmental revenue - Federal $155,000 $151,992 $(3,008) $ 76,725 State 30,000 28,887 (1,113) 50,504 Local 28,230 Total revenues 185,000 180,879 (4,121) 155,459 Expenditures: Current General government - �. Personal services 42,000 41,590 410 50,038 Supplies and other charges 93,000 92,983 17 101,603 Capital outlay 50,000 50,000 30,763 Total expenditures 185,000 184,573 427 182,404 Deficiency of revenues over expenditures -0- (3,694) (3,694) (26,945) Other financing sources: Operating transfers in - .. General Fund 8,000 Special Assessment Capital Projects Fund 11,381 Total other financing sources -0- -0- -0- 19,381 Deficiency of revenues and other financing sources over expenditures -0- (3,694) (3,694) (7,564) Fund balance January 1 1,569 1,569 -0- 9,133 Fund balance (deficit) December 31 $ 1,569 $ (2,125) $(3,694) $ 1,569 95 Exhibit C- 1 1 — CITY OF FRIDLEY, MINNESOTA — HRA REIMBURSEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1987 and 1986 — 1987 1986 — Asset Due from other funds $26,663 $13,687 Liabilities and Fund Balance — Liabilities: Advance from city's general account $20,120 $10,621 Accounts payable 3,680 11 Salaries payable 2,863 3,055 Total liabilities 26,663 13,687 Fund balance: Unreserved - undesignated -0- -0- Total liabilities and fund balance $26,663 $13,687 96 Exhibit C- 12 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, 1987 With Comparative Actual Amounts for Year Ended December 31, 1986 1987 Variance- Favorable 1986 — Budget Actual (Unfavorable) Actual Revenues: Intergovernmental - Housing Redevelopment Authority $183,000 $182,621 $(379) $101,489 Expenditures: Current General government - Personal services 120,500 120,432 68 81,190 Supplies and other charges 62,500 62,189 311 20,299 Total expenditures 183,000 182,621 379 101,489 Excess of revenues over expenditures -0- -0- -0- -0- Fund balance January 1 -0- -0- -0- -0- Fund balance December 31 $ -0- $ -0- $ -0- $ -0- 97 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. City Fund This fund services the debt on one bond issue from 1965 for the construction of the City's Civic Center. Provisions are made in the City's general property tax levy so that sufficient resources are available to meet the general obligation debt. 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, 1987 With Comparative Totals for December 31, 1986 Totals _ Special 1986 Assessment HRA 1987 (Restated) Assets Cash $ 5 $ $ 5 $ 535,113 Cash in escrow 2,635,000 9,817,500 12,452,500 12,452,500 Investments 11,133,664 2,397,475 13,531,139 12,695,336 Receivables: Taxes - Unremitted 3,662 Delinquent 2,589 Special assessments - Delinquent 214,035 214,035 169,140 Deferred 3,025,269 3,025,269 3,752,713 Interest 42,820 Total assets $17,007,973 $12,214,975 $29,222,948 $29,653,873 Liabilities and Fund Balance Liabilities: Advance from city's general account $ 21,990 $ $ 21,990 $ 480,454 Accounts payable 651 651 1,213 Deposits payable 651 Deferred revenue 3,239,304 3,239,304 3,924,441 Total liabilities $ 3,261,945 -0- 3,261,945 4,406,759 Fund balance: Reserved for debt service 6,405,162 12,214,975 18,620,137 22,159,487 Unreserved - undesignated 7,340,866 7,340,866 3,087,627 Total fund balance 13,746,028 12,214,975 25,961,003 25,247,114 Total liabilities and fund balance $17,007,973 $12,214,975 $29,222,948 $29,653,873 99 CITY OF FRIDLEY, MINNESOTA — DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES _ Year Ended December 31, 1987 With Comparative Totals for Year Ended December 31, 1986 Special City Assessment HRA Revenues: Taxes $ 522 $ $ Special assessments 1,034,495 — Intergovernmental - Homestead credit Interest on investments 7,012 783,562 186,928 Total revenues 7,534 1,818,057 186,928 Expenditures: General government 9,281 Debt service - Principal retirement 550,000 190,000 Interest and fiscal charges 398,838 1,064,221 Issuance expense — Total expenditures -0- 958,119 1,254,221 Excess (deficiency) of revenues — over expenditures 7,534 859,938 (1,067,293) Other financing sources (uses) : _ Bond proceeds Operating transfers in (out) - HRA Capital Projects Fund 1,141,992 Special Assessment Capital -- Projects Fund (129,238) Total other financing sources (uses) -0- (129,238) 1,141,992 Excess of revenues and other financing sources over expenditures and other — financing uses 7,534 730,700 74,699 Fund balance January 1 as previously reported 91,510 -0- 538,554 Adjustments: See Note 2 13,015,328 11,601,722 — Fund balance January 1 as restated 91,510 13,015,328 12,140,276 Residual equity transfer (99,044) Fund balance December 31 $ -0- $13,746,028 $12,214,975 100 Exhibit D-2 Totals 1986 1987 (Restated) $ 522 $ 27,654 1,034,495 1,348,167 7,519 977,502 1,202,572 2,012,519 2,585,912 9,281 108,894 740,000 790,000 1,463,059 1,173,164 174,447 2,212,340 2,246,505 (199,821) 339,407 9,998,772 --. 1,141,992 2,649,677 (129,238) (2,536,535) ,^ 1,012,754 10,111,914 812,933 10,451,321 630,064 588,470 24,617,050 14,207,323 25,247,114 14,795,793 (99,044) $25,961,003 $25,247,114 101 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 project 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 money received from property taxes that are used to finance major improvements and the acquistion of assets that require a large capital outlay. Sears Fund This fund is used to account for the revenues and expenditures that are related to the construction of an outdoor athletic recreation facility. Civic Center Improvement Fund This fund was established to account for the revenues and expenditures associated with the remodeling of the Fridley Civic Center. Satellite Fire Station Fund This fund is used to account for the revenues and expenditures that are related to the construction of the new Satellite Fire Station. 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, 1987 With Comparative Totals for December 31, 1986 Civic Capital Center Satellite Improvement Improvement Fire Station - Assets Cash $ $ $ Investments 1,957,819 687,592 13,000 Receivables: Taxes - -- Unremitted 2,471 Delinquent 5,851 Specials - ..., Delinquent Deferred Mortgage - Delinquent Deferred Interest Due from other funds 25,000 Due from other governments Advance to Management Information Services Fund Total assets $1,991,141 $687,592 $13,000 Liabilities and Fund Balance Liabilities: Advance from city's general account $ $ 1,237 $ Accounts payable 2,716 8,767 Deposits payable ' Contracts payable Salaries payable Deferred revenue 5,851 _ Due to other funds Due to other governments Total liabilities 8,567 10,004 -0- _ Fund balance: Reserved for encumbrances Reserved for advance to other fund Reserved for construction 677,588 13,000 Reserved for debt service Unreserved - _ Designated for fixed asset replacement 1,919,375 Designated for park improvement 63,199 Undesignated Total fund balance 1,982,574 677,588 13,000 Total liabilities and fund balance $1,991,141 $687,592 $13,000 104 Exhibit E-1 Totals Special 1986 Assessment HRA 1987 (Restated) $ $ 618 $ 618 $ 75,824 2,224,590 7,425,526 12,308,527 13,847,137 14,953 17,424 367,584 362,623 368,474 120,548 2,272 2,272 2,319 138,204 138,204 63,245 7,960 7,960 952,000 952,000 86,548 86,548 129,438 53,770 78,770 124,640 36,710 36,710 16,590 .. 25,000 $2,455,546 $8,850,228 $13,997,507 $14,772,325 $ 825,202 $ $ 826,439 $ 494,777 .„ 19,078 17,824 48,385 47,281 116,614 116,614 147,121 67,617 30,969 98,586 48,216 784 - 140,476 1,322,583 1,468,910 186,112 80,433 80,433 101,555 2,108 - 1,168,987 1,451,809 2,639,367 1,027,954 .„ 562,249 562,249 526,468 25,000 4,362,581 5,053,169 6,375,407 3,035,838 3,035,838 4,045,603 1,919,375 1,709,033 63,199 113,199 -. 724,310 724,310 949,661 1,286,559 7,398,419 11,358,140 13,744,371 $2,455,546 $8,850,228 $13,997,507 $14,772,325 105 CITY OF FRIDLEY, MINNESOTA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND — CHANGES IN FUND BALANCES Year Ended December 31, 1987 With Comparative Totals for Year Ended December 31, 1986 _ Civic Capital Center Satellite Improvement Sears Improvement Fire Station Revenues: Taxes - Tax increment $ $ $ $ Current ad valorem taxes 66,419 _ Delinquent ad valorem taxes 668 Special assessments Total taxes 67,087 -0- -0- -0- Intergovernmental revenue - State credits 15,271 State grant Total intergovernmental revenue 15,271 -0- -0- -0- Interest on investments 142,099 4,851 43,595 -0- — Miscellaneous revenue - Rental income Sale of property Other Total miscellaneous revenue -0- -0- -0- -0- Total revenues 224,457 4,851 43,595 -0- (Continued) 106 Exhibit E-2 ... Totals Special 1986 Assessment HRA 1987 (Restated) $ $ 983,476 $ 983,476 $ 858,253 66,419 36,102 668 581 35,066 35,066 16,804 35,066 983,476 1,085,629 911,740 10,134 25,405 17,399 30,836 30,836 64,463 30,836 10,134 56,241 81,862 163,307 567,162 921,014 1,099,624 53,650 53,650 52,150 4,000 4,000 120,043 10,069 10,069 19,177 -� 10,069 57,650 67,719 191,370 239,278 1,618,422 2,130,603 2,284,596 107 CITY OF FRIDLEY, MINNESOTA — CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (Continued) — Year Ended December 31, 1987 With Comparative Totals for Year Ended December 31, 1986 Civic Capital Center _ Improvement Sears Improvement Expenditures: Current - ,— General government $ $ $ Debt service Capital outlay 44,641 66,079 ._ Total expenditures 44,641 -0- 66,079 Excess (deficiency) of revenues over expenditures 179,816 4,851 (22,484) Other financing sources (uses) : Bond proceeds ._ Operating transfers in (out) - General Fund 12,563 Municipal State Aid Fund _ Grant Management Fund Special Assessment Debt Service Fund HRA Debt Service Fund Capital Improvement Fund Sears Fund Satellite Fire Station Fund (14,000) Special Assessment Capital Projects Fund (59,930) — Public Utilities Fund Total other financing sources (uses) (1,437) (59,930) -0- Excess (deficiency) of revenues and other financing sources over expenditures and other financing uses 178,379 (55,079) (22,484) Fund balance January 1 as previously reported 1,797,232 62,042 601,028 Adjustment: See Note 2 Fund balance January 1 as restated 1,797,232 62,042 601,028 Residual equity transfers 6,963 (6,963) 99,044 Fund balance December 31 $1,982,574 $ -0- $677,588 108 Exhibit E-2 Continued Totals ., Satellite Special 1986 Fire Station Assessment HRA 1987 (Restated) $ $ $ 474,096 $ 474,096 $ 567,667 45,750 45,750 127,659 — 1,000 654,399 2,423,897 3,190,016 2,334,656 1,000 700,149 2,897,993 3,709,862 3,029,982 (1,000) (460,871) (1,279,571) (1,579,259) (745,386) 13,172 59,874 72,437 186,936 — 49,196 49,196 117,580 (11,381) 129,238 (1,141,992) (1,012,754) 2,520,687 _, 14,000 14,000 (2,649,677) 59,930 59,930 (14,000) (59,930) (14,895) (14,895) 224 14,000 283,343 (1,141,992) (906,016) 177,541 — 13,000 (177,528) (2,421,563) (2,485,275) (567,845) -0- -0- 9,819,982 12,280,284 14,983,356 1,464,087 1,464,087 (671,140) " -0- 1,464,087 9,819,982 13,744,371 14,312,216 99,044 $13,000 $1,286,559 $7,398,419 $11,358,140 $13,744,371 109 ENTERPRISE FUNDS Enterprise Funds are used to account for the operations of self-supporting governmental activities which render services or goods to the public. The accounting records are maintained on an accrual basis. The reporting for enterprise funds is similar to comparable private enterprises. Creditors, legislators or the general public can evaluate the performance of a municipal enterprise on the same basis as they can the performance of investor-owned enterprises. Liquor Fund This fund accounts for the operation of two off-sale liquor establishments. Public Utilities Fund This fund accounts for the operations of the City-owned sewer and water systems. Exhibit F- 1 CITY OF FRIDLEY, MINNESOTA ENTERPRISE FUNDS .." COMBINING BALANCE SHEET December 31, 1987 With Comparative Totals for December 31, 1986 Public Totals Liquor Utilities 1987 1986 .. Assets Current assets: Cash $ 3,200 $ 120 $ 3,320 $ 142,703 Investments 345,303 5,208,525 5,553,828 5,065,292 Receivables: Accounts 543,927 543,927 681,741 Interest 23,081 Due from other governments 105,092 105,092 61,208 Inventories 395,955 3,900 399,855 477,325 Prepaid expenses 30,036 96,465 126,501 132,479 .' Total current assets 774,494 5,958,029 6,732,523 6,583,829 Long term receivable - Metropolitan Waste Control Commission -0- 272,131 272,131 294,430 Restricted assets (for debt service) : Cash 16,217 Investments, at cost 20,000 20,000 59,913 Total restricted assets -0- 20,000 20,000 76,130 Property and equipment, at cost: - Property and equipment 468,717 15,223,428 15,692,145 14,799,978 Less: accumulated depreciation (189,086) (2,833,032) (3,022,118) (2,669,163) Net property and equipment 279,631 12,390,396 12,670,027 12,130,815 Total assets $1,054,125 $18,640,556 $19,694,681 $19,085,204 Liabilities and Fund Equity Current liabilities: Accounts payable $ 119,284 $ 35,992 $ 155,276 $ 163,289 Contracts payable 279,917 279,917 Salaries payable 5,108 13,090 18,198 19,302 Due to other funds 1,771 Due to other governments 23,386 4,032 27,418 25,748 Bonds payable 20,000 20,000 50,000 Total current liabilities 147,778 353,031 500,809 260,110 Long-term liabilities: Bonds payable (net of current portion) -0- -0- -0- 20,000 Total liabilities 147,778 353,031 500,809 280,110 Fund equity: Contributed capital -0- 10,861,185 10,861,185 10,861,185 Retained earnings - Reserved for debt service 6,393 Unreserved 906,347 7,426,340 8,332,687 7,937,516 _ Total retained earnings 906,347 7,426,340 8,332,687 7,943,909 Total fund equity 906,347 18,287,525 19,193,872 18,805,094 Total liabilities and fund equity $1,054,125 $18,640,556 $19,694,681 $19,085,204 111 Exhibit F--2 CITY OF FRIDLEY, MINNESOTA ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES .� AND CHANGES IN RETAINED EARNINGS Year Ended December 31, 1987 With Comparative Totals for Year Ended December 31, 1986 _ Public Totals _ Liquor Utilities 1987 1986 Sales and cost of sales: Sales $2,596,379 $ $2,596,379 $2,547,533 "' Cost of sales 2,192,231 2,192,231 2,061,720 Gross profit 404,148 -0- 404,148 485,813 Operating revenues: Water sales and sewer rents 2,362,437 2,362,437 2,277,244 Other 111,377 111,377 156,856 Total operating revenues -0- 2,473,814 2,473,814 2,434,100 _ Operating expenses: Personal services 224,731 511,726 736,457 741,035 Supplies and other charges - Disposal charges 1,126,427 1,126,427 1,121,622 Other 149,577 550,452 700,029 738,689 -- Depreciation 28,017 325,116 353,133 327 ,852 Total operating expenses 402,325 2,513,721 2,916,046 2,929,198 Operating income (loss) 1,823 (39,907) (38,084) (9,285) Non-operating revenues (expenses) : _ Interest on investments 24,454 397,147 421,601 493,004 Interest expense (1,646) (1,646) (3,400) Other 2,012 2,012 1,807 Total non-operating revenues (expenses) 26,466 395,501 421,967 491,411 Income before operating - transfers 28,289 355,594 383,883 482,126 Operating transfers in (out) : ._ General Fund (10,000) (10,000) (50,000) Special Assessment Capital Project Fund 14,895 14,895 15,624 _ Total operating transfers (10,000) 14,895 4,895 (34,376) Net income 18,289 370,489 388,778 447,750 Retained earnings January 1 888,058 7,055,851 7,943,909 7,496,159 Retained earnings December 31 $ 906,347 $7,426,340 $8,332,687 $7,943,909 - 112 '" Exhibit F-3 CITY OF FRIDLEY, MINNESOTA -. ENTERPRISE FUNDS COMBINING STATEMENT OF CHANGES IN FINANCIAL POSITION Year Ended December 31, 1987 With Comparative Totals for Year Ended December 31, 1986 Public Totals ,." Liquor Utilities 1987 1986 Sources of working capital: Operations: Net income for the year $ 18,289 $ 370,489 $ 388,778 $447,750 Items not requiring working capital Depreciation 28,017 325,116 353,133 327,852 Loss on disposal of equipment 223 Working capital provided -. by operations 46,306 695,605 741,911 775,825 Proceeds from sale of equipment 8,000 Decrease in long-term receivable 22,299 22,299 22,444 Decrease in restricted assets 56,130 56,130 32,101 Total sources of working capital 46,306 774,034 820,340 838,370 Uses of working capital: Acquisition of property and equipment 4,357 887,988 892,345 190,942 -' Decrease in long-term bonds payable 20,000 20,000 50,000 Total uses of working capital 4,357 907,988 912,345 240,942 Increase (decrease) in working capital $ 41,949 $(133,954) $ (92,005) $597,428 Elements of increase (decrease) in working capital: Cash $(109,478) $ (29,905) $(139,383) $(14,895) Investments 242,121 246,415 488,536 362,042 Accounts receivable (5,681) (132,133) (137,814) 62,328 Interest receivable (1,186) (21,895) (23,081) 22,819 "" Due from other governments 43,884 43,884 (33,592) Inventories (77,750) 280 (77,470) 112,155 Prepaid expenses (7,198) 1,220 (5,978) 132,479 - Accounts payable (2,115) 10,128 8,013 (51,153) Contracts payable (279,917) (279,917) Salaries payable 1,711 (607) 1,104 (3,652) Due to other funds 1,771 1,771 (1,771) Due to other governments (246) (1,424) (1,670) 10,668 Bonds payable 30,000 30,000 Increase (decrease) in working capital $ 41,949 $(133,954) $ (92,005) $597,428 - 113 Exhibit F-4 - CITY OF FRIDLEY, MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE BALANCE SHEET - December 31, 1987 and 1986 1987 1986 Assets Current assets: Cash $ 3,200 $ 112,678 Investments 345,303 103,182 - Receivables: Accounts 5,681 Interest 1,186 - Inventories 395,955 473,705 Prepaid expense 30,036 37,234 Total current assets 774,494 733,666 Property and equipment, at cost: Land 66,961 66,961 Buildings 174,116 174,116 - Improvements other than buildings 18,677 14,791 Machinery and equipment 208,963 208,670 468,717 464,538 - Less: accumulated depreciation (189,086) (161,247) Net property and equipment 279,631 303,291 Total assets $1,054,125 $1,036,957 Liabilities and Fund Equity Liabilities: Accounts payable $ 119,284 $ 117,169 - Salaries payable 5,108 6,819 Due to other funds 1,771 Due to other governments 23,386 23,140 - Total liabilities 147,778 148,899 Fund equity: - Retained earnings - unreserved 906,347 888,058 Total liabilities and fund equity $1,054,125 $1,036,957 - 114 Exhibit F-5 CITY OF FRIDLEY, MINNESOTA LIQUOR ENTERPRISE FUND _. COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Years Ended December 31, 1987 and 1986 1987 1986 - Sales and cost of sales: Sales $2,596,379 $2,547,533 Cost of sales 2,192,231 2,061,720 - Gross profit 404,148 485,813 Operating expenses: Selling: Personal services 149,703 152,075 Supplies and other charges 3,247 3,466 Total selling expenses 152,950 155,541 Overhead: Supplies and other charges 133,819 128,797 Depreciation 28,017 27,351 Total overhead expenses 161,836 156,148 - Administrative: Personal services 75,028 81,921 Supplies and other charges 12,511 13,540 Total administrative expenses 87,539 95,461 Total operating expenses 402,325 407,150 Operating income 1,823 78,663 Non-operating revenues: Interest on investments 24,454 24,589 Other 2,012 1,807 Total non-operating revenues 26,466 26,396 Income before operating transfers 28,289 105,059 Operating transfers (out) : General Fund (10,000) (50,000) Total operating transfers (10,000) (50,000) Net income 18,289 55,059 Retained earnings January 1 888,058 832,999 - Retained earnings December 31 $ 906,347 $ 888,058 115 Exhibit F--6 CITY OF FRIDLEY, MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE STATEMENT OF CHANGES IN FINANCIAL POSITION Years Ended December 31, 1987 and 1986 1987 1986 — Sources of working capital: Operations: _ Net income for the year $ 18,289 $ 55,059 Items not requiring working capital Depreciation 28,017 27,351 Loss on disposal of equipment 223 "'- Working capital provided by operations 46,306 82,633 Proceeds from sale of equipment 8,000 Total sources of working capital 46,306 90,633 Uses of working capital: Acquisition of property and equipment 4,357 1,135 Increase in working capital $ 41,949 $ 89,498 Elements of increase (decrease) in working capital: Cash $(109,478) $(16,219) Investments 242,121 (38,322) — Accounts receivable (5,681) 5,681 Interest receivable (1,186) 1,186 Inventories (77,750) 111,522 _ Prepaid expense (7,198) 37,234 Accounts payable (2,115) (21,047) Salaries payable 1,711 (551) Due to other funds 1,771 (1,771) Due to other governments (246) 11,785 Increase in working capital $ 41,949 $ 89,498 116 -' Exhibit F-7 CITY OF FRIDLEY, MINNESOTA PUBLIC UTILITY ENTERPRISE FUND COMPARATIVE BALANCE SHEET December 31, 1987 and 1986 1987 1986 Assets Current assets: '^ Cash $ 120 $ 30,025 Investments 5,208,525 4,962,110 Receivables: Accounts 543,927 676,060 Interest 21,895 Due from other governments 105,092 61,208 Inventories, at cost 3,900 3,620 - Prepaid expense 96,465 95,245 Total current assets 5,958,029 5,850,163 Long-term receivable - Metropolitan Waste Control Commission 272,131 294,430 Restricted assets: Cash 16,217 Investments, at cost 20,000 59,913 Total restricted assets 20,000 76,130 Property and equipment, at cost: Land 154,881 154,881 Buildings 1,166,566 824,078 Improvements other than buildings 866,331 324,016 Machinery and equipment 2,174,465 2,171,280 Water and sewer lines 10,861,185 10,861,185 15,223,428 14,335,440 .� Less: accumulated depreciation (2,833,032) (2,507,916) Net property and equipment 12,390,396 11,827,524 Total assets $18,640,556 $18,048,247 Liabilities and Fund Equity Current liabilities: Accounts payable $ 35,992 $ 46,120 Contracts payable 279,917 Salaries payable 13,090 12,483 Due to other governments 4,032 2,608 Bonds payable 20,000 50,000 Total current liabilities 353,031 111,211 Long-term liabilities: Bonds payable (net of current portion) 20,000 Total liabilities 353,031 131,211 Fund equity: Contributed capital 10,861,185 10,861,185 Retained earnings - Reserved for debt service 6,393 Unreserved 7,426,340 7,049,458 Total retained earnings 7,426,340 7,055,851 Total fund equity 18,287,525 17,917,036 Total liabilities and fund equity $18,640,556 $18,048,247 117 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, 1987 and 1986 1987 1986 Operating revenues: — Water sales and sewer rents $2,362,437 $2,277,244 Other 111,377 156,856 Total operating revenues 2,473,814 2,434,100 — Operating expenses: Personal services 511,726 507,039 _ Supplies and other charges - Disposal charges 1,126,427 1,121,622 Other 550,452 592,886 Depreciation 325,116 300,501 — Total operating expenses 2,513,721 2,522,048 Operating loss (39,907) (87,948) — Non-operating revenues (expenses) : Interest on investments 397,147 468,415 ,^ Interest expense (1,646) (3,400) Total non-operating revenues (expenses) 395,501 465,015 Income before operating transfers 355,594 377,067 — Operating transfers from: Special Assessment Capital Projects Fund 14,895 15,624 Total operating transfers 14,895 15,624 Net income 370,489 392,691 -- Retained earnings January 1 7,055,851 6,663,160 Retained earnings December 31 $7,426,340 $7,055,851 118 -' Exhibit F-9 CITY OF FRIDLEY, MINNESOTA PUBLIC UTILITY ENTERPRISE FUND COMPARATIVE STATEMENT OF CHANGES IN FINANCIAL POSITION Years Ended December 31, 1987 and 1986 1987 1986 Sources of working capital: .� Operations: Net income for the year $ 370,489 $392,691 Items not requiring working capital Depreciation 325,116 300,501 Working capital provided by operations 695,605 693,192 Decrease in long-term receivable 22,299 22,444 Decrease in restricted assets 56,130 32,101 Total sources of working capital 774,034 747,737 Uses of working capital: Acquisition of property and equipment 887,988 189,807 Decrease in long-term revenue bonds payable 20,000 50,000 Total uses of working capital 907,988 239,807 Increase (decrease) in working capital $(133,954) $507,930 Elements of increase (decrease) in working capital: Cash $ (29,905) $ 1,324 Investments 246,415 400,364 Accounts receivable (132,133) 56,647 Interest receivable (21,895) 21,633 Due from other governments 43,884 (33,592) Inventories 280 633 Prepaid expense 1,220 95,245 Accounts payable 10,128 (30,106) Contracts payable (279,917) Salaries payable (607) (3,101) Due to other governments (1,424) (1,117) Bonds payable 30,000 Increase (decrease) in working capital $(133,954) $507,930 119 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. Management Information Services Fund This fund is used to account for all revenues and expenses associated with the City operated computerized information system that handles the information processing needs of the City. 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. CITY OF FRIDLEY, MINNESOTA — INTERNAL SERVICE FUNDS COMBINING BALANCE SHEET December 31, 1987 — With Comparative Totals for December 31, 1986 Management Self Employee Information Insurance Benefits Services Fund Assets Current assets: — Cash $ $ $ Investments 1,300,168 116,231 74,344 Interest receivable -- Total current assets 1,300,168 116,231 74,344 Property and equipment, at cost: — Machinery and equipment 207,412 Less: accumulated depreciation (142,041) Net property and equipment -0- 65,371 -0- Total assets $1,300,168 $181,602 $74,344 Liabilities and Fund Equity Current liabilities: — Advance from city's general account $ $ $ Accounts payable 424 799 775 Leave payable 798,153 — Due to other funds 25,000 Total current liabilities 798,577 25,799 775 Long-term liability: Advance from Capital Improvement Fund (net of current portion) Total liabilities 798,577 25,799 775 — Fund equity: Retained earnings - reserved 501,591 155,803 73,569 — Total fund equity 501,591 155,803 73,569 Total liabilities and — fund equity $1,300,168 $181,602 $74,344 122 Exhibit G- 1 Totals —. 1987 1986 $ $ 328 1,490,743 1,308,768 5,507 1,490,743 1,314,603 207,412 204,659 (142,041) (100,899) ... 65,371 103,760 $1,556,114 $1,418,363 $ $ 17,734 1,998 1,114 — 798,153 797,583 25,000 25,000 825,151 841,431 .. 25,000 825,151 866,431 730,963 551,932 730,963 551,932 $1,556,114 $1,418,363 123 CITY OF FRIDLEY, MINNESOTA_ - INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS - Year Ended December 31, 1987 With Comparative Totals for Year Ended December 31, 1986 Management Self Employee Information Insurance Benefits Services Fund - Operating revenues: Charges for services $230,187 $122,328 $50,723 - Operating expenses: Personal services 1,336 _ Supplies and other services 45,930 12,052 Benefit payments 253,920 Depreciation 41,142 Total operating expenses 253,920 87,072 13,388 - Operating income (loss) (23,733) 35,256 37,335 Non-operating revenues (expenses) : Interest on investments 88,660 5,279 3,417 Interest expense Insurance reimbursement 32,817 Total non-operating revenues (expenses) 88,660 5,279 36,234 Income before operating transfers 64,927 40,535 73,569 Operating transfer out: General Fund Total operating transfers -0- -0- -0- Net income 64,927 40,535 73,569 Retained earnings January 1 436,664 115,268 -0- Retained earnings December 31 $501,591 $155,803 $73,569 - 124 Exhibit G-2 Totals 1987 1986 $403,238 $322,665 1,336 57,982 40,314 253,920 229,602 41,142 37,720 354,380 307,636 48,858 15,029 97,356 115,560 (5,250) 32,817 -• 130,173 110,310 179,031 125,339 .. (3,007) -0- (3,007) 179,031 122,332 551,932 429,600 $730,963 $551,932 125 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CHANGES IN FINANCIAL POSITION Year Ended December 31, 1987 With Comparative Totals for Year Ended December 31, 1986 Management Self -- Employee Information Insurance Benefits Services Fund Sources of working capital: Operations: Net income for the year $64,927 $40,535 $73,569 Items not requiring working '" capital - depreciation 41,142 Total sources of working capital 64,927 81,677 73,569 — Uses of working capital: Acquisition of machinery and equipment 2,753 — Decrease in long-term advance from Capital Improvement Fund 25,000 Total uses of working capital -0- 27,753 -0- Increase in working capital $64,927 $53,924 $73,569 Elements of increase (decrease) in working capital: Cash $ $ (328) $ —' Investments 53,359 54,272 74,344 Interest receivable (5,391) (116) Advance from city's general account 17,734 ._ Accounts payable (205) 96 (775) Leave payable (570) Due to other governments Increase in working capital $64,927 $53,924 $73,569 126 Exhibit G-3 Totals 1987 1986 ... $179,031 $122,332 41,142 37,720 220,173 160,052 " 2,753 25,857 25,000 25,000 27,753 50,857 $192,420 $109,195 $ (328) $(19,508) 181,975 80,285 (5,507) 5,507 " 17,734 (17,734) (884) 15,068 (570) 36,718 •. 8,859 $192,420 $109,195 127 Exhibit G-- 4 — CITY OF FRIDLEY, MINNESOTA EMPLOYEE BENEFITS INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31, 1987 and 1986 1987 1986 Assets Investments $1,300,168 $1,246,809 _ Interest receivable 5,391 Total assets $1,300,168 $1,252,200 Liabilities and Fund Equity Liabilities: Advance from city's general account $ $ 17,734 Accounts payable 424 219 — Leave payable 798,153 797,583 Total liabilities 798,577 815,536 Fund equity: Retained earnings - Reserved for employee benefits 501,591 436,664 Total liabilities and fund equity $1,300,168 $1,252,200 128 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, 1987 and 1986 1987 1986 Operating revenues: Charges for services $230,187 $204,424 Operating expenses: Benefit payments 253,920 229,602 Operating loss (23,733) (25,178) Non-operating revenues: Interest on investments 88,660 112,581 Total non-operating revenues 88,660 112,581 Income before operating transfers 64,927 87,403 •� Operating transfer out: • General Fund (3,007) Total operating transfers -0- (3,007) Net income 64,927 84,396 Retained earnings January 1 436,664 352,268 Retained earnings December 31 $501,591 $436,664 129 Exhibit G-6 CITY OF FRIDLEY, MINNESOTA EMPLOYEE BENEFITS INTERNAL SERVICE FUND -- COMPARATIVE STATEMENT OF CHANGES IN FINANCIAL POSITION Years Ended December 31, 1987 and 1986 1987 1986 Sources of working capital: Operations: Net income $64,927 $ 84,396 Elements of increase (decrease) in working capital: Cash $ $(19,836) Investments 53,359 71,217 Interest receivable (5,391) 5,391 ., Advance from city's general account 17,734 (17,734) Accounts payable (205) (219) Leave payable (570) 36,718 _ Due to other governments 8,859 Increase in working capital $64,927 $ 84,396 130 Exhibit G-7 CITY OF FRIDLEY, MINNESOTA MANAGEMENT INFORMATION SERVICES INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31, 1987 and 1986 1987 1986 Assets Current assets: Cash $ $ 328 Investments 116,231 61,959 Interest receivable 116 Total current assets 116,231 62,403 .� Property and equipment, at cost: Machinery and equipment 207,412 204,659 Less: accumulated depreciation (142,041) (100,899) Net property and equipment 65,371 103,760 Total assets $181,602 $166,163 Liabilities and Fund Equity Current liabilities: Accounts payable $ 799 $ 895 Due to other funds 25,000 25,000 Total current liabilities 25,799 25,895 Long-term liability: -- Advance from Capital Improvement Fund (net of current portion) 25,000 Total liabilities 25,799 50,895 Fund equity: Retained earnings - Reserved for capital outlay 155,803 115,268 Total fund equity 155,803 115,268 Total liabilities and fund equity $181,602 $166,163 131 Exhibit G-8 CITY OF FRIDLEY, MINNESOTA _ MANAGEMENT INFORMATION SERVICES INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Years Ended December 31, 1987 and 1986 1987 1986 Operating revenues: Charges for services $122,328 $118,241 `" Operating expenses: Supplies and other services 45,930 40,314 -- Depreciation 41,142 37,720 Total operating expenses 87,072 78,034 Operating income 35,256 40,207 Non-operating revenues (expenses) : _ Interest on investments 5,279 2,979 Interest expense (5,250) Total non-operating revenues (expenses) 5,279 (2,271) Net income 40,535 37,936 Retained earnings January 1 115,268 77,332 — Retained earnings December 31 $155,803 $115,268 132 Exhibit G-9 CITY OF FRIDLEY, MINNESOTA MANAGEMENT INFORMATION SERVICES INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CHANGES IN FINANCIAL POSITION Years Ended December 31, 1987 and 1986 1987 1986 Sources of working capital: Operations: Net income for the year $40,535 $37,936 Items not requiring working capital - depreciation 41,142 37,720 Total sources of working capital 81,677 75,656 Uses of working capital: Acquisition of machinery and equipment 2,753 25,857 Decrease in long-term advance from Capital Improvement Fund 25,000 25,000 Total uses of working capital 27,753 50,857 Increase in working capital $53,924 $24,799 Elements of increase (decrease) in working capital: Cash $ (328) $ 328 —. Investments 54,272 9,068 Interest receivable (116) 116 Accounts payable 96 15,287 Increase in working capital $53,924 $24,799 133 Exhibit G 10 _ CITY OF FRIDLEY, MINNESOTA SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31, 1987 and 1986 1987 1986 '- Asset Investments $74,344 $ -0- Liability and Fund Equity Liability: — Accounts payable $ 775 $ Total liability 775 -0- Fund equity: Retained earnings - Reserved for contingencies 73,569 Total fund equity 73,569 -0- -" Total liability and fund equity $74,344 $ -0- 134 Exhibit G-1 1 CITY OF FRIDLEY, MINNESOTA SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF REVENUES, •• EXPENSES AND CHANGES IN RETAINED EARNINGS Years Ended December 31, 1987 and 1986 1987 1986 Operating revenues: Charges for services $50,723 $ -0- Operating expenses: Personal services 1,336 Supplies and other services 12,052 Total operating expenses 13,388 -0- Operating income 37,335 -O- .. Non-operating revenues: Interest on investments 3,417 Insurance reimbursement 32,817 Total non-operating revenues 36,234 -0- Net income 73,569 -0- Retained earnings January 1 -0- -0- Retained earnings December 31 $73,569 $ -0- 135 Exhibit G-12 CITY OF FRIDLEY, MINNESOTA _ SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CHANGES IN FINANCIAL POSITION Years Ended December 31, 1987 and 1986 _ 1987 1986 Sources of working capital: Operations: Net income for the year $73,569 $ — Total sources of working capital 73,569 -0- Increase in working capital $73,569 $ -0- — Elements of increase (decrease) in -- working capital: Investments $74,344 $ Accounts payable (775) Increase in working capital $73,569 $ -0- 136 9 TRUST AND AGENCY FUNDS Trust and Agency, Funds ',ire,used try at r?tint for assets held by a government in a•trustee or {�" agent capacity for individuals, private organizations, other governments or other funds. ' E weldable Trust Forte The City of Fridley maintains only one Expendable Trust Fund that is used to defray the City ,- 1 a urilinistrative costs associated with the issuance of industrial revenue development bonds. y " Six Cities Watershed Al.1 ncy Fu Vic! This fund was established to account for the collection of taxes'received from the county on `-':',.'''''''.';':.1.'-', l behalf of the Six Cities Watershed eai;stiict_ E' Notel,Motel Agency Furst ;1 *hR. , This fund was establistied to.account for the collection of a three percent tax that has been { �� imposed on all!the hotels rind motels in the north suburban area The collection process is , � i administered by the City on behalf of the North Metro Convention and Tourism Bureau which will use'the''money to provide inforrriation_to visitors.and create an awareness of the.facilities availably ,, ,t�f r in this area. '` t`4"•deterred Compensation Agency Fungi max. This fund accounts for deposits held in trust with the International City Managers`Ass'ociation " , >'` '' " (ICMA)on behalf of,the'City of Fridley employees, Erpployees:make pretax contributions to this, F organization throughout their.careers which are used as a retirement benefit,- , ; t.,,, -6 ` b 1111 4 a �yt F Y 1 H ray.. .. 'r. Exhibit H- 1 _.. CITY OF FRIDLEY, MINNESOTA TRUST AND AGENCY FUNDS COMBINING BALANCE SHEET December 31, 1987 With Comparative Totals for December 31, 1986 Expendable Agency Totals Trust Funds 1987 1986 Assets Cash $ $ $ $ 1,815 Investments 72,407 7,238 79,645 69,212 Receivables: Accounts 2,145 2,145 2,309 Taxes - Unremitted 298 298 1,055 Delinquent 692 692 803 Interest 272 Other assets 1,789,790 1,789,790 1,425,898 Total assets $72,407 $1,800,163 $1,872,570 $1,501,364 Liabilities and Fund Balance Liabilities: Deposits payable $52,308 $1,789,790 $1,842,098 $1,474,943 Salaries payable 29 29 Deferred revenue 692 692 803 '-' Due to other governments 9,681 9,681 10,599 Total liabilities 52,337 1,800,163 1,852,500 1,486,345 Fund balance: Unreserved - undesignated 20,070 -0- 20,070 15,019 Total liabilities and fund balance $72,407 $1,800,163 $1,872,570 $1,501,364 137 Exhibit H-2 — CITY OF FRIDLEY, MINNESOTA TRUST FUND — COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Years Ended December 31, 1987 and 1986 _ 1987 1986 Revenues: Interest on investments $ 5,051 $ 7,526 Fund balance January 1 15,019 7,493 Fund balance December 31 $20,070 $15,019 — 138 Exhibit H-3 CITY OF FRIDLEY, MINNESOTA AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES YEAR ENDED DECEMBER 31, 1987 Balance Balance January 1 Additions Deletions December 31 Assets Cash $ 1,263 $ 44,432 $ 45,695 $ Investments 5,972 7,238 5,972 7,238 -' Receivables: Accounts 2,309 2,145 2,309 2,145 Taxes - Unremitted 1,055 298 1,055 298 Delinquent 803 111 692 Other assets 1,425,898 377,707 13,815 1,789,790 Total assets $1,437,300 $ 431,820 $ 68,957 $1,800,163 Liabilities Deposits payable $1,425,898 $ 377,707 $ 13,815 $1,789,790 Deferred revenue 803 111 692 Due to other governments 10,599 36,296 37,214 9,681 Total liabilities $1,437,300 $ 414,003 $ 51,140 $1,800,163 139 Exhibit H-4 - CITY OF FRIDLEY, MINNESOTA - SIX CITIES WATERSHED AGENCY FUND STATEMENT OF CHANGES IN ASSETS AND LIABILITIES YEAR ENDED DECEMBER 31, 1987 Balance Balance January 1 Additions Deletions December 31 Assets Cash $(1,055) $16,297 $15,242 $ Investments 5,972 5,310 5,972 5,310 Taxes receivable: - Unremitted 1,055 298 1,055 298 Delinquent 803 111 692 Total assets $ 6,775 $21,905 $22,380 $6,300 - Liabilities Deferred revenue $ 803 $ $ 111 $ 692 Due to other governments 5,972 9,568 9,932 5,608 Total liabilities $ 6,775 $ 9,568 $10,043 $6,300 CITY OF FRIDLEY, MINNESOTA HOTEL/MOTEL AGENCY FUND STATEMENT OF CHANGES IN ASSETS AND LIABILITY - YEAR ENDED DECEMBER 31, 1987 Balance Balance January 1 Additions Deletions December 31 --Assets Cash $ 2,318 $28,135 $30,453 $ Investments 1,928 1,928 - Accounts receivable 2,309 2,145 2,309 2,145 Total assets $ 4,627 $32,208 $32,762 $4,073 -- Liability Due to other governments $ 4,627 $26,728 $27,282 $4,073 Total liability $ 4,627 $26,728 $27,282 $4,073 - 140 Exhibit H-5 CITY OF FRIDLEY, MINNESOTA DEFERRED COMPENSATION AGENCY FUND STATEMENT OF CHANGES IN ASSET AND LIABILITY YEAR ENDED DECEMBER 31, 1987 Balance Balance January 1 Additions Deletions December 31 Asset Other assets - Deferred compensation - at market $1,425,898 $ 377,707 $ 13,815 $1,789,790 Total asset $1,425,898 $ 377,707 $ 13,815 $1,789,790 Liability Deposits payable $1,425,898 $ 377,707 $ 13,815 $1,789,790 Total liability $1,425,898 $ 377,707 $ 13,815 $1,789,790 141 GENERAL FIXED ASSET ACCOUNT GROUP The General Fixed Asset Account Group is set up to account for long-lived assets not accounted for in an enterprise, trust or internal service fund. Exhibit I- 1 CITY OF FRIDLEY, MINNESOTA COMPARATIVE STATEMENT OF GENERAL FIXED ASSETS December 31, 1987 and 1986 1987 1986 General fixed assets: Land $ 1,767,078 $ 1,717,078 Building 1,782,837 1,773,058 Improvements other than building 17,919,508 17,591,857 Machinery and equipment 2,680,880 2,431,565 Construction in progress 1,509,248 936,988 Total general fixed assets $25,659,551 $24,450,546 Investment in general fixed assets from: General obligation bonds $ 856,597 $ 856,597 Federal and state aid 1,682,960 1,632,960 General fund revenues 5,823,691 5,433,322 Special revenue fund revenues 97,871 90,680 Special assessments 15,799,123 15,037,678 Private gifts 730,628 730,628 Other sources 668,681 668,681 Total investment in general fixed assets $25,659,551 $24,450,546 143 Exhibit 1-2 - CITY OF FRIDLEY, MINNESOTA -- SCHEDULE OF GENERAL FIXED ASSETS - BY FUNCTION AND ACTIVITY December 31, 1987 - Improvements Machinery ,_ Other than and Total Land Buildings Buildings Equipment Function and activity General government City manager $ 25,447 $ $ $ $ 25,447 - Cable TV 45,756 45,756 Accounting 53,306 53,306 Assessing 7,080 7,080 ._ Elections 33,790 33,790 Planning 65,658 50,000 15,658 Civic center 750,924 52,496 602,440 38,568 57,420 Total general government 981,961 102,496 602,440 38,568 238,457 Public safety Police protection 469,939 200 35,809 433,930 i' Fire protection 654,177 142,532 39,306 472,339 Inspectional services 12,720 12,720 Civil defense 57,805 30,763 27,042 _ Total public safety 1,194,641 -0- 142,732 105,878 946,031 Public works _ Engineering 45,024 45,024 Street improvements 10,639,259 5,764 10,633,495 Storm sewer 5,357,817 5,357,817 Traffic signal 138,243 138,243 City garage 1,409,612 97,940 347,698 21,872 942,102 Parks 3,546,489 1,254,820 253,799 1,561,622 476,248 Total public works 21,136,444 1,358,524 601,497 17,713,049 1,463,374 - Recreation/Naturalist Recreation 2,961 143 2,818 _ Naturalist 834,296 306,058 436,168 61,870 30,200 Total recreation/naturalist 837,257 306,058 436,168 62,013 33,018 Total general fixed assets allocated to functions 24,150,303 $1,767,078 $1,782,837 $17,919,508 $2,680,880 Construction in progress 1,509,248 Total fixed assets $25,659,551 144 Exhibit 1-3 CITY OF FRIDLEY, MINNESOTA SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS - BY FUNCTION AND ACTIVITY Year Ended December 31, 1987 General General "' Fixed Fixed Assets Assets 1/1/87 Additions Deductions 12/31/87 Function and activity -. General government City manager $ 25,323 $ 124 $ $ 25,447 Cable TV 38,565 7,191 45,756 Accounting 52,402 904 53,306 ▪ Assessing 7,080 7,080 Elections 33,790 33,790 Planning 12,779 52,879 65,658 -. Civic center 740,520 10,404 750,924 Total general government 910,459 71,502 -0- 981,961 - Public safety Public protection 381,919 137,939 49,919 469,939 Fire protection 599,344 59,555 4,722 654,177 Inspectional services 13,480 760 12,720 -- Civil defense 57,955 150 57,805 Total public safety 1,052,698 197,494 55,551 1,194,641 - Public works Engineering 48,967 1,879 5,822 45,024 Street improvements 10,639,259 129,255 10,768,514 _ Water, sewer and storm sewer 5,228,562 5,228,562 Traffic signal 138,243 138,243 City garage 1,271,012 . 139,230 630 1,409,612 Parks 3,392,387 155,422 1,320 3,546,489 Total public works 20,718,430 425,786 7,772 21,136,444 Recreation/Naturalist -- Recreation 1,676 1,285 2,961 Naturalist 830,295 5,188 1,187 834,296 Total recreation/naturalist 831,971 6,473 1,187 837,257 Construction in progress 936,988 763,337 191,077 1,509,248 -. Total general fixed assets $24,450,546 $1,464,592 $255,587 $25,659,551 145 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 STATEMENT OF GENERAL LONG-TERM DEBT December 31, 1987 and 1986 1986 1987 Restated Amount available and to be provided for the payment of general long-term debt Amount available in Debt Service Fund $25,961,003 $25,247,114 Amount to be provided by future taxes 7,263,997 8,717,886 Total available and to be provided $33,225,000 $33,965,000 General long-term debt payable General long-term debt payable: General obligation special assessment improvement bonds $ 7,930,000 $ 8,480,000 Variable rate general obligation tax increment bonds 11,550,000 11,550,000 General obligation tax increment refunding bonds 10,045,000 10,045,000 Tax increment revenue refunding bonds 3,700,000 3,890,000 Total general long-term debt payable $33,225,000 $33,965,000 147 STATISTICAL SECTION a a — Table 1 — CITY OF FRIDLEY, MINNESOTA GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION (1) LAST TEN FISCAL YEARS Fiscal General Public Civic Public Recreation, Debt Year Government Safety Center Works Naturalist Service Total 1978 572,381 1,446,302 102,444 1,028,594 822,095 34,422 4,006,238 1979 581,800 1,495,493 103,387 1,056,758 909,317 38,561 4,185,316 1980 618,215 1,737,883 128,795 1,111,066 839,271 53,569 4,488,799 1981 725,095 1,994,788 137,976 1,430,657 1,087,811 52,545 5,428,872 1982 829,434 1,939,996 115,893 1,321,993 911,141 232,793 5,351,250 1983 796,799 2,148,834 156,708 1,881,666(2) 442,703(2) 325,707 5,752,417 — 1984 1,017,807 2,201,155 149,332 1,887,379(2) 442,917(2) 386,140 6,084,730 1985 1,267,563 2,270,691 162,220 1,929,934(2) 535,801(2) 354,029 6,520,238 1986 1,872,200 2,576,847 180,839 1,886,888(2) 535,430(2) 1,006,771 8,058,975 1987 1,927,147 2,707,681 160,222 1,992,949(2) 530,066(2) 2,203,059(3) 9,521,124 Note (1) Includes General, Special Revenue, Capital Projects (HRA Fund only) and Debt _ Service Funds (2) Parks Maintenance activity is now under Public Works (3) Special Assessment Debt Service Fund included 149 Table 2 — • CITY OF FRIDLEY, MINNESOTA _ GENERAL REVENUES BY SOURCE (1) LAST TEN FISCAL YEARS General Property Inter- Charges Taxes & govern- For — Fiscal Special Licenses mental Current Miscellaneous Total Year Assessments(2) & Permits Revenue Services Revenue Revenue 1978 $ 1,846,370 $ 265,657 $1,576,630 $104,069 $ 285,311 $ 4,078,037 1979 1,948,751 303,639 1,646,918 103,267 400,317 4,402,892 1980 1,974,874 229,148 2,659,608 108,547 558,006 5,530,183 1981 2,115,674 233,901 3,040,678 129,887 684,794 6,204,934 — 1982 2,725,738 360,949 2,238,358 145,551 937,761 6,408,357 1983 2,794,763 320,964 2,994,968 131,018 943,014 7,184,727 1984 2,851,420 411,054 3,386,532 145,394 1,181,901 7,976,301 1985 3,146,086 422,606 3,228,902 153,483 1,299,011 8,250,088 1986 3,484,015 358,962 3,579,436 157,829 2,205,177 9,785,419 — 1987 4,662,570(2) 405,583 3,256,331 164,617 2,529,385 11,018,486 Note — (1) Includes General, Special Revenue, Capital Projects (HRA Fund only) and Debt Service Funds (2) Special Assessment Debt Service Fund included — 150 Table 3 CITY OF FRIDLEY, MINNESOTA CERTIFIED PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Collections Percentage Collection Of Current of Levy of Prior Total Certified Year's Taxes Collected Years' Taxes Ratio Outstanding Tax levy During During During of Total Current and Fiscal For Fiscal Fiscal Fiscal Fiscal Total Collections Delinquent Year Period Period(1) Period Period Collections to Tax Levy Taxes 1978 2,199,318 2,177,318 99.00 48,922 2,226,240 1.0122:1 46,119 1979 2,348,124 2,318,648 98.74 41,503 2,360,151 1.0051:1 41,316 1980 2,512,176 2,461,402 97.98 46,345 2,507,747 .9982:1 54,254 1981 2,767,955 2,502,610 90.41 49,166 2,551,776 .9219:1 283,600 1982 2,920,626 2,777,691 95.11 21,771 2,799,462 .9585:1 153,574 1983 3,151,324 3,086,799 97.95 54,674 3,141,473 .9969:1 124,610 1984 3,152,952 3,049,773 96.72 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 Note (1) Includes Homestead Credit 151 CITY OF FRIDLEY, MINNESOTA — ASSESSED AND ESTIMATED MARKET VALUE OF ALL TAXABLE PROPERTY LAST TEN FISCAL YEARS Fiscal Year Payable 1978 1979 1980 1981 Assessment Year 1977 1978 1979 1980 Population, fiscal year 33,450 32,644 30,228 30,200 Real property: Estimated market value $456,038,596 $474,610,022 $555,096,298 $632,523,959 Assessor's limited market value $408,865,261 $458,973,683 $522,308,032 $ N/A (2) Assessed value - Homestead $ 20,453,732 $ 21,633,558 $ 24,392,539 $ 59,013,036 — Excess and non-homestead 124,640,289 134,204,943 141,946,084 121,924,290 Less area wide net allocation (6,271,738) (7,376,217) (8,858,508) (10,022,598) Less tax-increment value (954,050 (2,708,711) — Assessed value (taxable) $138,822,283 $148,462,284 $156,526,065 $168,206,017 Personal property: Estimated market value $ 19,340,803 $ 17,424,500 $ 17,899,900 $ 18,731,800 Assessor's limited market value $ 17,348,700 $ N/A (4) $ N/A (4) $ N/A (4) Assessed value (taxable) $ 7,459,941 $ 7,492,535 $ 7,696,957 $ 8,054,674 Totals: Estimated market value $475,379,399 $492,034,522 $572,996,198 $651,255,759 Assessor's limited market value $426,213,961 $458,973,683 $522,308,032 $ N/A (2) Assessed value (taxable) $146,282,224 $155,954,819 $164,223,022 $176,260,691 Per market value ratios Assessor's limited market value .897 :1 .968:1 .943:1 N/A (2) _ Assessed value (taxable) .308:1 .317:1 .287:1 .271:1 Per capita valuations — Estimated market value $ 14,212 $ 15,073 $ 18,956 $ 21,565 Assessed value (taxable) $ 4,373 $ 4,777 $ 5,433 $ 5,836 Notes — (1) The Anoka County Auditor's Office determines assessed values on January 2 of each year pursuant to State Statutes and determines Total Assessed Value (Taxable) . The Total Assessed Value (Taxable) on January 2, 1986 upon which the 1987 levy was based was — $233,843,902. 152 Table 4 1982 (3) 1983 1984 1985 1986 1987 1981 1982 1983 1984 1985 1986 29,920 29,810 29,750 29,440 29,423 29,310 $723,016,622 $776,074,092 $802,180,000 $807,910,500 $839,392,000 $879,498,600 $ N/A (2) $ N/A (2) $ N/A (2) N/A (2) N/A (2) N/A (2) $ 65,308,228 $ 94,445,737 $ 94,707,547 $ 91,923,166 $ 91,343,841 $ 94,010,922 142,031,048 126,066,013 129,931,205 132,234,317 143,450,918 153,262,018 .. (9,340,006) (13,120,471) (11,732,970) (11,693,200) (11,434,459) (13,473,724) (2,892,948) (3,951,300) (2,765,895) (5,458,497) (9,032,222) (11,348,839) $195,106,322 $203,439,979 $210,139,887 $207,005,786 $214,328,078 $222,450,377 $ 19,328,400 $ 19,741,300 $ 21,263,600 $ 21,534,300 $ 26,208,700 $ 26,531,000 "' $ N/A (4) $ N/A (4) $ N/A (4) N/A (4) N/A (4) N/A (4) $ 8,311,212 $ 8,488,759 $ 9,143,348 $ 9,259,749 $ 11,245,936 $ 11,393,525 $742,345,022 $795,815,392 $823,443,600 $829,444,800 $865,600,700 $906,029,600 — $ N/A (2) $ N/A (2) $ N/A (2) N/A (2) N/A (2) N/A (2) $203,417,534 $211,928,738 $219,283,235 $216,265,535 $225,574,014 $233,843,902 N/A (2) N/A (2) N/A (2) N/A (2) N/A (2) N/A (2) .274: 1 .266:1 .266:1 .261:1 .261:1 .258:1 $ 24,811 $ 26,696 $ 27,679 $ 28,174 $ 29,419 $ 30,912 — $ 6,799 $ 7,109 $ 7,371 $ 7,346 $ 7,667 $ 7,978 (2) In 1980, Limited Market Value was omitted as a consideration in determining taxable value. (3) Real property estimated market value includes $8 , 174 , 200 of new value from railroad operating property brought onto the tax roles . (4) Beginning in Fiscal Year Payable 1979 , the Assessor' s value for Assessment Year 1978 was discontinued and is no longer available. 153 CITY OF FRIDLEY, MINNESOTA STATEMENT OF VALUATIONS AND LEVIES BY CLASSES OF PROPERTY — DECEMBER 31, 1987 Assessed Valuation Assessed Before Valuation Assessed _ Contribution Contribution Value Class of to Metro Tax to Metro Tax Received from Property Pool Pool Metro Tax Pool Commercial $ 44,331,652 $ (11,257 ,217) Industrial 73,191,687 (19 ,444,284) _ F. M. C. #85 6,416,245 (1,739,752) Gas 1,273,574 (511,692) Electric 3,703,706 (989,270) Public utilities* 538,021 (170,564) Vacant land, residential 1,138,400 _ Apartments 23,079,090 Residential 104,994,090 — Distribution (1) $20,639,055 Total $258,666,465 $(34,112,779) $20,639,055 Notes *Real Estate and Machinery _ (1) This represents the "assessed value" distributed to Fridley from the metro tax pool. The assessed value for the first six classes of property shown above has been reduced for local taxable value to 86 . 81% of the actual assessed value. This taxable value is multiplied by the applicable local mill _ rates. The remaining 13 . 19% of assessed value is multiplied by the Metro Mill Rate of 112.238 mills. This money goes into the Metro Pool . The City of Fridley received $294,230 from this pool in 1987. 154 — Table 5 Assessed Valuation Dollars of Allocated to Adjusted Percent Certified Tax Increment Assessed of Total City Tax Financing Value City Tax Levy $ (1,066,791) $ 32,007,644 13.69 $ 466,394 53,747,403 22.98 782,888 4,676,493 2.00 68,137 761,882 0.32 10,902 2,714,436 1.16 39,519 367,457 0.16 5,451 — (90,791) 1,047,609 0.45 15,331 (9,986,978), 13,092,112 5.60 190,782 (204,279) 104,789,811 44.81 1,526,598 20,639,055 8.83 300,823 $(11,348,839) $233,843,902 100.00 $3,406,825 The tax shown for Residential is the total amount received by the City . Owners of Homestead Residential properties do not pay this full amount. The State pays up to $700 per homestead in credit. An additional refund may be received by the taxpayer from the State depending on income , age and amount — of real estate tax for their homestead property. 155 CITY OF FRIDLEY, MINNESOTA SIGNIFICANT MINNESOTA TAX POLICIES — DECEMBER 31, 1987 GENERAL All non-exempt property in Minnesota is subject to taxation by local taxing — districts. The tax levied on a property is determined by multiplying its assessed value by the tax rate. The tax rate (mills) is determined by the County Auditor, dividing each tax levy by the taxable assessed valuation. Properties are physically reviewed by assessors at least once every four years. The Minnesota Department of Revenue analyzes sales of properties annually, comparing sale prices with the local assessors market value. This establishes a sales ratio. The sales ratio is also used in determining municipal and school district state aids. The assessors market value is multiplied by the appropriate percentage to arrive at assessed value. This percentage varies by class of property. — Residential homestead property. Part of the market value said to be "homestead" ($65,000 for taxes due in 1987) is assessed at 18%, and the _ balance at 28%. The assessed value of a homestead residence with a market value of $60,000 would be $10, 800 for taxes collectible in 1987 (see "Homestead Credit" note below) . Residential non-homestead property of 1-2-or-3 units is assessed at 28% of its market value . The assessed value of a non-homestead residence (rental property) with a MV of $50,000 is $14,000. Apartments of 4 units or more are — assessed at 34% ($50,000 value x 34% _ $17,000) . Industrial/commercial/utility property is assessed at 28% of the first $60,000 of estimated market value, and 43% of balance. Market value of utilities is — computed by the Minnesota Department of Revenue. HOMESTEAD CREDIT Homestead taxes are reduced by a 54% credit (maximum $700) . _. This credit is subtracted on the tax statement, and the taxpayer pays only the net amount; homestead credits are reimbursed by the State to the taxing districts in proportion to their levies , thus relieving the property tax — burden. Property tax refund. Further residential property tax credits are gauged by percentages of the net property tax to household income : To the extent a -- homeowners income (1% for lower income groups , up to 4% for incomes of $40,000) homeowners or renters may receive State credits up to $1 , 825 (combined homestead and income-adjusted credits) . _ 156 CITY OF FRIDLEY, MINNESOTA PROPERTY TAX RATES PER $1,000 OF ASSESSED VALUE AND CALCULATED TAX LEVIES ALL OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS Property Tax Rates School School School School '- District District District District Fiscal City No. 11 No. 13 No. 14 No. 16* County Year (Mills) (Mills) (Mills) (Mills) (Mills) (Mills) - 1978 15.05 55.84 46.53 54.26 61.68 24.40 1979 15.06 47.71 45.04 47.17 62.25 24.29 - 1980 15.306 43.21 46.73 45.08 61.83 25.84 1981 15.722 38.00 41.48 41.12 51.08 27.91 1982 14.278 46.847 48.266 46.365 65.542 26.113 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 Certified Levies Calculated Tax Levies School School School School Fiscal District District District District Year City No. 11 No. 13 No. 14 No. 16* County - 1978 2,199,318 355,565 1,568,135 3,987,358 2,017,736 3,569,286 _ 1979 2,348,124 330,743 1,634,858 3,668,695 2,204,204 3,788,253 1980 2,512,176 319,712 1,786,183 3,606,461 2,395,401 4,235,650 1981 2,767,955 296,393 1,795,295 3,493,129 2,144,854 4,904,234 1982 2,920,626 447,988 2,383,069 4,412,574 3,130,401 5,332,248 - 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 3,223,008 576,032 2,894,115 6,402,200 3,555,419 6,451,056 1987 3,397,368 585,299 3,522,818 6,298,305 3,500,364 6,864,334 *Vocational/Technical District #916 included in District No, 16 beginning in 1975. **Six Cities Watershed District included with School District No. 11 beginning in 1985. ***Rice Creek Watershed District included with School District No. 13, 14 and 16. - 158 Table 6 '' Totals Total School School School School Special District District District District .- Districts No. 11** No. 13*** No. 14*** No. 16*,*** (Mills) (Mills) (Mills) (Mills) (Mills) ._ 3.14 98.43 89.12 96.85 104.27 3.35 90.41 87.74 89.87 104.95 3.60 87.44 91.48 89.83 106.58 4.36 85.54 89.47 89.11 99.07 -. 4.057 90.864 92.714 90.813 109.990 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 Net Total Total Yearly Contribution Tax Total .. Special All Local Percentage To Metro Increment Tax Districts Tax Levies Change Tax Pool Districts Levies "" 426,450 14,123,848 6.39% 14,123,848 470,367 14,445,244 2.28% 922,702 15,367,946 542,080 15,397,663 6.59% 1,083,986 85,221 16,566,870 ... 718,810 16,120,670 4.70% 1,113,318 193,763 17,427,751 779,684 19,406,590 20.38% 925,052 304,517 20,636,159 924,841 21,394,116 10.24% 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 1,101,118 24,203,948 7.41% 1,298,052 867,372 26,369,372 1,288,391 25,556,879 5.18% 1,608,958 867,372 28,033,209 159 Table 7 - CITY OF FRIDLEY, MINNESOTA SPECIAL ASSESSMENT LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Total Collec- Delin- Collec- Outstand- Current Current tions to quent tions to ing and _ Assess- Assess- Amount Assess- Current Delinquent Fiscal ments ments Due ments Total Levy Assess- Year Due Collected (Percent) Collected Collected (Percent) ments 1978 777,077 699,145 89.98 288,525 987,670 127.11 439,385 1979 678,501 606,763 89.43 134,352 741,115 109.23 379,149 . 1980 699,330 628,753 89.91 95,451 724,204 103.56 404,012 1981 785,128 755,588 96.24 87,206 842,794 107.34 347,975 1982 946,330 780,838 82.51 65,666 846,504 89.45 432,530 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 765,737 682,762 89.16 143,891 826,653 107.95 176,879 - 1987 917,525 827,504 90.19 30,524 858,028 93.52 221,994 160 CITY OF FRIDLEY, MINNESOTA HISTORY OF CERTIFIED TAX LEVIES AND ACTUAL MILL RATES LAST TEN FISCAL YEARS — 1978 1979 1980 1981 Certified tax levies General Fund $2,114,917 $2,264,856 $2,428,376 $2,684,615 General Debt Service Funds 41,000 39,900 38,800 38,570 — Capital Improvement Fund 43,401 43,368 45,000 44,770 Subtotal 2,199,318 2,348,124 2,512,176 2,767,955 Agency Fund -- Total $2,199,318 $2,348,124 $2,512,176 $2,767,955 Actual mill rate General Fund 14.47 14.52 14.795 15.248 General Debt Service Funds .28 .26 .274 .220 — Capital Improvement Fund .30 .28 .237 .254 Subtotal 15.05 15.06 15.306 15.722 Agency Fund — Total 15.05 15.06 15.306 15.722 Notes (1) Property values include net amount allocated pursuant to Laws of 1971, Extra Session, Chapter 23, from Area-Wide "Pool" . Beginning with taxes collectable in 1975, the value on which the City of Fridley's mill rate is calculated, is not the City's assessed value but a taxable value based — on the City of Fridley's assessed value and the net addition or reduction from the Metropolitan Tax Pool. 162 -' Table 8 1982 1983 1984 1985 1986 1987 $2,838,504 $3,070,254 $3,071,882 $3,083,270 $3,141,859 $3,311,826 37,352 36,300 36,300 35,175 35,628 44,770 44,770 44,770 44,982 45,521 85,542 - 2,920,626 3,151,324 3,152,952 3,163,427 3,223,008 3,397,368 14,898 9,869 9,457 ., $2,920,626 $3,151,324 $3,152,952 $3,178,325 $3,232,877 $3,406,825 .. 13.877 14.525 13.970 14.283 13.895 14.188 .183 .172 .166 .163 .158 .218 .211 .204 .208 .203 .367 14.278 14.908 14.340 14.654 14.256 14.555 .240 .074 .075 14.278 14.908 14.340 14.894 14.330 14.630 163 CITY OF FRIDLEY, MINNESOTA — RATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUES AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS — Deduct Total City Debt Special — Assessed Service Fund Assessment, Fiscal Value Gross Monies Revenue and Year Population (Taxable) Bonded Debt Available HRA Bonds — 1978 33,450 $146,282,224 $ 6,385,000 $60,071 $ 6,125,000 1979 32,664 155,954,819 6,545,000 64,383 6,315,000 1980 30,228 164,223,022 6,105,000 69,480 5,905,000 1981 30,200 176,260,691 8,954,000 76,953 8,784,000 1982 29,920 203,417,534 9,160,000 82,255 9,020,000 — 1983 29,810 211,928,738 8,285,000 84,240 8,180,000 1984 29,750 219,283,235 7,470,000 86,709 7,400,000 "- 1985 29,440 216,265,535 22,125,000 86,117 22,090,000 1986 29,423 225,574,014 19,385,000 91,510 19,385,000 1987 29,310 233,843,902 18,595,000 -0- 18,595,000 — 164 Table 9 Percent of Net Bonded Debt to Total Assessed Net General Net General Value Bonded Debt Bonded Debt (Taxable) Per Capita $ 199,929 .14% $ 5.98 165,617 .11% 5.07 130,520 .08% 4.32 93,047 .05% 3.08 57,745 .03% 1.93 20,760 .01% .70 -0- - - -0- - - -0- - - -0- - - 165 Table 10 — CITY OF FRIDLEY, MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN — DECEMBER 31, 1987 Assessed Value $233,843,902 (A) Debt Limit 7.33% of Assessed Value $17,140,758 — Amount of Debt Applicable to Debt Limit: Total Bonded Debt $18,595,000 — (B) Deductions: Tax Increment Redevelopment Bonds $10,045,000 Special Assessment Bonds 4,830,000 "- Water Revenue and Improvement Bonds 20,000 Tax Increment Revenue Bonds 3,700,000 18,595,000 Total Amount of Debt Applicable to Debt Limit -0- Legal Debt Margin $17,140,758 — Notes (A) M.S.A. Section 475.53 (see following page) (B) M.S.A. Section 475.51 (see following page) 166 — CITY OF FRIDLEY, MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN (CONTINUED) YEAR ENDED DECEMBER 31, 1987 Note (A) : M.S.A. Section 475.53 et seq. Limit on Net Debt "Subdivision 1. Generally, except as otherwise provided in section 475.51, 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 7 . 33 percent of the assessed value. " Note (B) : M.S.A. Section 475.51 Definitions "Subdivision 4. "Net Debt" means the amount remaining after deduction 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 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 124.43. (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 116J.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. " 167 Table 11 — CITY OF FRIDLEY, MINNESOTA COMPUTATION OF DIRECT AND OVERLAPPING — BONDED DEBT AND COMPARATIVE DEBT RATIOS DECEMBER 31, 1987 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 $ 18,595,000 $ 3,848,795 $ 14,746,205 100.00 $14,746,205 — Overlapping debt: School Districts — No. 11 $ 24,585,000 $ 1,054,285 $ 23,530,715 1.49 $ 350,608 No. 13 395,000 185,694 209,306 33.61 70,348 No. 14 372,000 755,956 -0- 100.00 -0- No. 16 8,952,309 3,181,394 5,770,915 39.19 2,261,622 "" Metro Transit 16,350,000 5,313,000 11,037,000 1.53 168,866 Metro Council 338,692,000 63,985,565 274,706,435 1.42 3,900,831 Anoka County 10,800,000 559,114 10,240,886 19.59 2,006,190 — Vocational/Technical District No. 916 7,330,000 672,961 6,657,039 2.12 141,129 Overlapping debt 407,476,309 75,707,969 332,152,296 8,899,594 — Total direct and overlapping debt $426,071,309 $79,556,764 $346,898,501 $23,645,799 — 168 — Table 12 — 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(l) Expenditures 1978 25,000 9,422 34,422 4,006,238 .0086:1 -. 1979 30,000 8,500 38,561 4,185,316 .0092:1 1980 42,725 10,844 53,569 4,488,799 .0119:1 "' 1981 43,743 8,802 52,545 5,428,872 .0097:1 1982 44,845 187,948 232,793 5,351,250 .0435:1 1983 35,000 290,707 325,707 5,752,417 .0566:1 1984 85,000 301,140 386,140 6,084,730 .0635:1 1985 120,000 234,029 354,029 6,520,238 .0543:1 — 1986 215,000 791,771 1,006,771 8,058,975 .1249:1 1987(2) 740,000 1,463,059 2,203,059 9,521,124 .2314:1 (1) Includes General, Special Revenue, Debt Service and Capital Projects (HRA Fund Only) — (2) Special Assessment Debt Service Fund included 169 Table 13 - CITY OF FRIDLEY, MINNESOTA REVENUE BOND COVERAGE LAST TEN FISCAL YEARS -- Net - Operating Revenue Direct Direct Available _ Fiscal Operating Operating For Debt Debt Service Requirements Year Revenue Expenses Service Principal Interest Total Coverage 1978 1,404,459 1,299,988 104,471 101,724 30,486 132,210 0.79 1979 1,394,580 1,237,504 157,076 101,724 25,781 127,505 1.23 1980 1,477,709 1,376,970 100,739 106,964 20,957 127,921 0.79 1981 1,560,081 1,681,670 (121,589) 107,750 16,065 123,815 - _ 1982 1,753,918 1,767,818 (13,900) 97,500 11,545 109,045 - 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 .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 51,646 170 — Table 14 — CITY OF FRIDLEY, MINNESOTA DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS Annual .. Average Fiscal Per Capita Median School Unemployment Year Population (1) Income (3) Age (4) Enrollment (3) Rate (5) (6) 1978 33,450 $ 6,980 25.9 7,119 2.7% 1979 32,644 7,239 26.2 6,666 2.8% 1980 30,228 (2) 8,654 (2) 27.4 (2) 6,331 4.4% (2) 1981 30,200 8,700 27.7 (3) 5,915 4.7% 1982 29,920 8,750 28.0 (3) 5,595 6.6% ... 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% Sources: '-' (1) Estimated by Metropolitan Council (2) Current Population Report - Bureau of the Census (3) Estimated by the City of Fridley Planning Department - excludes — Grace Parochial High School as it is not supported by property tax dollars (4) Sales Market Management Survey of Buying Power (Anoka County) (5) Minnesota Department of Economic Security - Twin Cities Labor Market .. Information Center (6) Beginning in 1983, Unemployment Rate as reported is area wide for the County of Anoka rather than for the City of Fridley only 171 Table 15 — CITY OF FRIDLEY, MINNESOTA CONSTRUCTION, BANK DEPOSITS AND PROPERTY VALUE — LAST TEN FISCAL YEARS Commercial Residential Construction Construction Estimated Market Value Number Number Bank (1) _ Fiscal of of Deposits Taxable Non- Year Units Value Units Value (Thousands) Property Taxable (2) Total 1978 51 $ 5,247,268 385 $ 4,673,528 $18,033 $475,379,399 $ 63,489,810 $ 538,869,209 — 1979 47 7,755,397 404 4,107,660 17,885 492,034,522 63,489,810 555,524,332 1980 36 23,922,267 367 2,374,966 18,763 572,996,198 63,489,810 636,486,008 1981 32 4,589,180 348 2,809,033 19,399 651,255,759 109,749,739 761,005,498 1982 60 5,498,098 305 3,012,844 22,875 742,345,022 109,749,739 852,904,061 1983 48 8,921,297 348 2,969,417 26,099 795,815,392 109,749,739 905,565,131 1984 67 19,332,432 345 4,388,689 27,917 823,443,600 109,749,739 933,193,339 1985 54 12,729,783 365 5,430,598 24,074 829,444,800 109,749,739 939,194,539 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 Source: (1) Fridley State Bank, Annual Financial Statement (2) Non-taxable property is reevaluated by the county assessors every six years 172 Table 16 CITY OF FRIDLEY, MINNESOTA PRINCIPAL TAXPAYERS DECEMBER 31, 1987 Fiscal Year 1987 Percent 1986* of Total Assessed Assessed Rank Taxpayer Type of Business Valuation Valuation** 1. Medtronics, Inc. Electro-medical devices $ 9,460,000 3.66 2. Onan Corporation Portable electric generators 7,859,828 3.04 3. Target Stores Discount store, warehouse and office 6,806,646 2.63 4. LaMaur, Inc. Cosmetics 3,928,553 1.52 5. Burlington N. Railroad Operating property 3,528,150 1.36 6. Maurice Fillister Georgetown apartments 3,220,514 1.25 7. Holiday Plus Discount department store 2,425,141 0.94 8. FMC Corporation Naval ordinance 2,188,945 0.85 9. Carter-Day Air control equipment 2,010,280 0.78 10. Five Sands Meadow Run apartments 1,980,296 0.77 11. JCH, Inc. Warehousing, oil blending 1,797,000 0.70 .. 12. The Pillsbury Company Totino's Pizza 1,769,265 0.68 Total $46,974,618 18.18 Notes *The 1986 Assessed Value was used to determine the Taxable Value on January 2, 1986, upon which the 1987 levy was based. " **Before contribution to Metropolitan Tax Pool. 173 CITY OF FRIDLEY, MINNESOTA INSURANCE COVERAGE DECEMBER 31, 1987 All risk perils, 100% coinsurance — Buildings and contents Blanket, agreed amount endorsement, replacement cost coverage $ 11,969,093 ` Contractor's equipment 663,998 Miscellaneous equipment 191,705 Voting machines 10,000 Neon and outdoor signs 18,818 Boiler and machinery 500,000 Comprehensive general liability Bodily injury -- Each occurrence 600,000 Aggregate 600,000 Property damage — Each occurrence 600,000 Aggregate 600,000 Automobile liability — Bodily injury and property damage 600,000 Personal injury protection 40,000 Uninsured/underinsured motorist 600,000 — Comprehensive Actual cash value Collision Actual cash value Liquor liability — Bodily injury Each person 1,000,000 Each common cause 1,000,000 Property damage Each common cause 1,000,000 Loss of means of support 1,000,000 Police professional liability — Combined single limit per loss Personal injury, bodily injury, property damage, punitive damages 600,000 Money and securities, inside and outside premises: 6431 University Avenue (City Hall) 15,000 214 Mississippi Street (Liquor Warehouse) 25,000 — 6289 Highway 65 (Liquor Warehouse Annex) 15,000 Public officials' liability 600,000 Employee benefits liability 600,000 Workers compensation Statutory PRINCIPAL OFFICIALS' BONDS _ DECEMBER 31, 1987 All employees are covered by a blanket of faithful performance bond of $100,000. 1 74 CITY OF FRIDLEY, MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION DECEMBER 31, 1987 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 - Councilmember, Ward I and Ward III November 3, 1987 -- Registered Voters 10,530 Number of votes cast 1,489 Percent (%) of registered voters voting 14% Population 1950 Federal Census 3,796 1960 Federal Census 15,182 1965 Federal Census 24,789 1970 Federal Census 29,233 1971 Estimated by Metropolitan Council 29,636 �. 1972 Estimated by Metropolitan Council 30,240 1973 Estimated by Metropolitan Council 31,143 1974 Estimated by Metropolitan Council 32,542 ... 1975 Estimated by Metropolitan Council 32,486 1976 Estimated by Metropolitan Council 31,570 1977 Estimated by Metropolitan Council 31,940 1978 Estimated by Metropolitan Council 33,450 1979 Estimated by Metropolitan Council 32,644 1980 Federal Census 30,228 1981 Estimated by Metropolitan Council 30,200 1982 Estimated by Metropolitan Council 29,920 1983 Estimated by Metropolitan Council 29,810 1984 Estimated by Metropolitan Council 29,750 1985 Estimated by Metropolitan Council 29,440 1986 Estimated by Metropolitan Council 29,423 1987 Estimated by Metropolitan Council 29,310 Permanent Employees -- As of December 31 Number 1976 129* 1977 148* 1978 141* 1979 122 1980 126 1981 129 — 1982 123 1983 119 1984 119 1985 125 1986 125 1987 125 *Includes CETA employees 175 CITY OF FRIDLEY, MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION (CONTINUED) DECEMBER 31, 1987 Fire protection Number of stations 1 Volunteer Firefighters 28 Full-time Firefighters 5 Fire rating Class 4 Police protection Number of stations 1 Number of sworn officers 33 Number of street lights 984 — Number of traffic signal installations 31 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 125.11 Trunk highways 10.80 _ County roads 14.56 Sidewalks 10.98 Miles of sewer Storm 40.21 Sanitary 101.66 Miles of water mains 109.39 Municipal water system source _ Primary source City of Fridley Water Plant (13 wells)--Capacity of 15 million gallons per day Secondary source City of Minneapolis (Mississippi River)--35 million gallons per day — Number of water connections December 31, 1987 8,156 Connections Daily average consumption (gallons) 4.4 million gallons _ Elevated storage capacity .5 million gallons Water storage reservoirs 4.5 million gallons Number of fire hydrants 1,070 Municipal Sewer System Disposal--through Metropolitan Waste Control Commission Number of connections December 31, 1987 8,256 Average daily flow (includes infiltration/inflow) 3.15 million gallons 176 CITY OF FRIDLEY, MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION (CONTINUED) DECEMBER 31, 1987 Parks and Recreation Areas Developed 425 Acres Undeveloped 125 Acres Total 550 Acres City Parks Schools Total Number of: Hockey rinks 9 0 9 General skating rinks 15 0 15 Playgrounds 29 8 37 .- Swimming beaches 1 0 1 Swimming pools 0 1 1 Picnic grounds 2 0 2 Day camp sites 1 0 1 Baseball diamonds 4 5 9 Softball diamonds 27 11 38 Outdoor basketball courts • 21 9 30 Tennis courts 25 19 44 Horseshoe courts 16 0 16 Archery Ranges 1 0 1 _. Permanent playground buildings 1 0 1 Permanent picnic shelters 7 0 7 Soccer fields 7 2 9 Football fields 8 8 16 177 CITY OF FRIDLEY, MINNESOTA GENERAL INFORMATION DECEMBER 31, 1987 Location - Transportation The City of Fridley, with a total land area of eleven square miles and an .- estimated population of 29 , 310 , 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 , Burlington Northern Railroad and Minnesota Transfer Railway. 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 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 Manor — nursing home. 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 170 certified personnel in the education of about 2 , 583 students. Grace Parochial High School has an enrollment of 890 . 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 enrollment of 1 , 870 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. — 178 CITY OF FRIDLEY, MINNESOTA GENERAL INFORMATION (CONTINUED) DECEMBER 31, 1987 Larger Employers Larger employers in the City of Fridley include: Full-Time Employer Product or Service Employees FMC Corporation Pumps and naval ordinance 3,400 Onan Corporation Portable generators, electronic 1,850 equipment Medtronics, Inc. Electro-medical devices and hdqtrs. 1,591 Burlington Northern Railroad Northtown Yard 1,028 Unity Hospital Medical services 476 Kurt Manufacturing Machine parts 730 LaMaur, Inc. Cosmetics 695 Target Stores, Warehouse Discount department store 360 Minco Products, Inc. Electronic devices 436 Midwest Printing Printing TV Guide 270 The Pillsbury Company Totino's Frozen Foods 226 Independent School District #14 Fridley School District 236 _ Safetran Systems Corporation Railroad accessories 208 Longview Fiber Company Packaging supplies 138 Strite-Anderson Manufacturing Aluminum die castings 100 City of Fridley Governmental Entity 125 Barry Blower Marly Corporation Air moving devices 130 179 SUPPLEMENTAL SECTION Exhibit K-1 r CITY OF FRIDLEY, MINNESOTA SCHEDULE OF ASSESSED VALUATION AND LONG-TERM DEBT _ FOR THE TAX INCREMENT FINANCING DISTRICT December 31, 1987 Redevelopment District Original Assessed Value $ 7,595,883 r Current Assessed Value $19,739,001 Captured Assessed Value - retained by the Authority $12,143,118 Bonds Issued: 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 1982 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 Total bonds issued $29,090,000 Amounts Redeemed: Paid $ (420,000) Defeased (3,375,000) Total amount redeemed (3,795',000) Outstanding bonds at December 31, 1987 $25,295,000 181 Exhibit K-2 CITY OF FRIDLEY, MINNESOTA SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS FOR THE TAX INCREMENT FINANCING DISTRICT INCEPTION TO DECEMBER 31, 1987 Current Year Prior Years Total Sources of Funds: — Bond proceeds $ $30,805,467 $30,805,467 Tax increments received 993,610 2,659,372 3,652,982 Interest on invested funds 754,090 1,868,382 2,622,472 — Real estate sales 4,000 380,471 384,471 Rental 53,650 164,325 217,975 Home Ownership revenue 10,125 10,125 Other 296,507 296,507 — Total sources of funds 1,805,350 36,184,649 37,989,999 Uses of Funds: — Land acquisition 1,014,201 9,103,902 10,118,103 Building acquisition 69,829 69,829 Site improvements or _ preparation costs 1,339,867 730,497 2,070,364 Installation of public utilities and improvements 7,917 7,917 Bond payments — Principal 190,000 315,000 505,000 Interest and fiscal charges 1,064,221 1,983,344 3,047,565 Administrative costs 401,244 2,034,205 2,435,449 — Other 72,852 49,526 122,378 Total uses of funds 4,152,214 14,224,391 18,376,605 District Balance $(2,346,864) $21,960,258 $19,613,394 182