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2010 CAFR CITY OF FRIDLEY, MINNESOTA Comprehensive Annual Financial Report December 31, 2010 Prepared by: Finance Department Darin R. Nelson Finance Director CITY OF FRIDLEY CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2010 TABLE OF CONTENTS EXHIBITPAGE I. INTRODUCTORY SECTION Letter of Transmittal3 Elected and Appointed Officials5 City Administrative Organizational Structure 20106 II. FINANCIAL SECTION Independent Auditor's Report11 Management's Discussion and Analysis13 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net AssetsA-125 Statement of ActivitiesA-226 Fund Financial Statements: Balance Sheet - Governmental FundsA-328 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental FundsA-430 Reconciliation of the Statement of Revenues, Expenditures and Ch Fund Balances of Governmental Funds to the Statement of Activiti Statement of Net Assets - Proprietary FundsA-634 Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary FundsA-736 Statement of Cash Flows - Proprietary FundsA-838 Statement of Fiduciary Net AssetsA-940 Notes to Financial Statements41 Required Supplementary Information: Budgetary Comparison Schedule - General FundB-178 Budgetary Comparison Schedule - Grant Management FundB-282 Budgetary Comparison Schedule - Note to RSI83 Schedule of Funding Progress - Retiree Health Plan84 Combined, Combining and Individual Fund Statements and Schedules Combined Balance Sheet - Nonmajor Governmental FundsC-188 Combined Statement of Revenues, Expenditures and Changes in Fund Nonmajor Governmental FundsC-289 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2010 TABLE OF CONTENTS EXHIBITPAGE Combining Balance Sheet - Nonmajor Special Revenue FundsC-392 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue FundsC-494 Special Revenue Funds: Cable TV Fund: Comparative Balance SheetD-196 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-297 Solid Waste Abatement Fund: Comparative Balance SheetD-398 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-499 HRA Reimbursement Fund: Comparative Balance SheetD-5100 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-6101 Drug and Gambling Forfeiture Fund: Comparative Balance SheetD-7102 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-8103 F. C. C. Donations Fund: Comparative Balance SheetD-9104 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-10105 Police Activity Fund: Comparative Balance SheetD-11106 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-12107 Springbrook Nature Center Fund: Comparative Balance SheetD-13108 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-14109 Capital Project Fund: Capital Improvement Fund: Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualE-1112 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2010 TABLE OF CONTENTS EXHIBITPAGE Internal Service Funds: Combining Statement of Net AssetsF-1114 Combining Statement of Revenues, Expenses and Changes in Net Ass Combining Statement of Cash FlowsF-3116 Employee Benefits Fund: Comparative Statement of Net AssetsF-4117 Comparative Statement of Revenues, Expenses and Changes in Net A Comparative Statement of Cash FlowsF-6119 Self Insurance Fund: Comparative Statement of Net AssetsF-7120 Comparative Statement of Revenues, Expenses and Changes in Net A Comparative Statement of Cash FlowsF-9122 Information Systems Fund: Comparative Statement of Net AssetsF-10123 Comparative Statement of Revenues, Expenses and Changes in Net A Comparative Statement of Cash FlowsF-12125 Housing and Redevelopment Authority (Component Unit): Balance Sheet - Governmental FundsG-1128 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental FundsG-2130 Subcombining Balance Sheet - Nonmajor Capital Project FundsG-313 Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Capital Project FundsG-4134 Agency Funds: Statement of Changes in Assets and LiabilitiesH-1138 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2010 TABLE OF CONTENTS EXHIBITPAGE III. STATISTICAL SECTION (Unaudited) Financial Trends: Net Assets by ComponentTable 1140 Changes in Net AssetsTable 2142 Fund Balances - Governmental FundsTable 3146 Changes in Fund Balances - Governmental FundsTable 4148 Revenue Capacity: Tax Capacity Value and Estimated Market Value of Taxable Propert Direct and Overlapping Property Tax Capacity RatesTable 6152 Principal Property TaxpayersTable 7154 Debt Capacity: Property Tax Levies and CollectionsTable 8155 Ratios of Outstanding Debt by TypeTable 9156 Direct and Overlapping Govermental Activities DebtTable 10158 Demographic and Economic: Legal Debt Margin InformationTable 11159 Pledged Revenue CoverageTable 12160 Operating Information: Demographic and Economic StatisticsTable 13162 Principal EmployersTable 14163 Full-time-Equivalent City Government Employees by Function/Progr Operating Indicators by Function/ProgramTable 16166 Capital Asset Statistics by Funciton/ProgramTable 17168 I. INTRODUCTORY SECTION 1 CITY OF FRIDLEY 2 CITY OF FRIDLEY, MINNESOTA ELECTED AND APPOINTED OFFICIALS DECEMBER 31, 2010 ELECTED OFFICIALS Term of Office Expires December MayorScott J.Lund2012 Councilmember At LargeRobert L. Barnette2012 Councilmember, Ward IJames T. Saefke2014 Councilmember, Ward IIDolores M. Varichak2014 Councilmember, Ward IIIAnn R. Bolkcom 2014 APPOINTED OFFICIALS City ManagerWilliam W. Burns City AttorneyFrederic W. Knaak Prosecuting AttorneyCarl J. Newquist City ClerkDebra A. Skogen Department Heads: Finance Director/TreasurerDarin R. Nelson Director of Public Safety and Civil DefenseDonovan W. Abbott Fire ChiefJohn D. Berg Director of Public WorksJames P. Kosluchar Director of Recreation and Natural ResourcesJack G. Kirk Director of Community DevelopmentScott J. Hickok Director of Human ResourcesDeborah K. Dahl 5 CITY ADMINISTRATIVE ORGANIZATIONAL STRUCTURE 2010 City of Fridley General Fund Authorized Full-Time Positions - 104(A) (Minimum Of 32 Hours A Week) Total Authorized Full-Time Positions - 128 (A) (Minimum Of 32 Hours A Week) rev. 11/10/2009 CITY MANAGEMENT (2) City Manager Admin Assistant to the City Manager Non-General Fund CABLE TV FUND Cable Administrator FINANCE (19)POLICE (44)FIRE (9) Finance Director - TreasurerPublic Safety DirectorFire Chief AccountantAdministrative AssistantAdministrative Assistant Assistant Chief ACCOUNTING (4)PATROL OPERATIONS (28) Fire Marshal Assistant Finance DirectorCaptain (3) Captains Payroll Coordinator(5) Sergeants Accounting Specialist(22) Patrol Officers RENTAL INSPECTIONS (2) Acctg-Data Processing Clerk Rental Inspection Asst. ASSESSING (2)TECHNICAL SUPPORT (13) Full-time Firefighter City AssessorCaptain AppraiserLieutenant HUMAN RESOURCES (2) (3) Detectives MIS (2) Pawn Detective IT ManagerHuman Resources Director School Resource Officer PC TechnicianAnoka-Henn DTF SergeantAdministrative Assistant Special Projects Coordinator CITY CLERK - RECORDS (2) Crime Prevention Specialist City Clerk Office Supervisor Licensing & Records Technician(2) Police Technicians (Also 3 at 32 hrs/week) Non-General FundNon-General Fund LIQUOR (5)DEA Detective (1) Liquor Operations Manager Fed Agency-Drug Enforcement Agency (4) Lead Liquor Store Clerks WATER ADMIN (2) Utility Billing Clerk Acctg-Data Processing Clerk (A) An "Authorized Position" is defined as one that works at least 32 hours a week and receives a full-time benefit package. 6 PUBLIC WORKS (35)PARKS &COMMUNITY RECREATION (8)DEVELOPMENT (9) Public Works Director Parks & Recreation DirectorCommunity Development Admin Assist/Main't Coord Director Recreation Office Coordinator (2) Program SupervisorsOffice Coordinator ENGINEERING (3) Sr Citizens Program Supervisor Assistant Public Works DirectorBUILDING INSPECTION (3) Chief Building Official (2) Engineering Technician Building Inspector PW MAINTENANCE (20) Permit Technician Administrative Assistant PLANNING Fleet Services SupervisorPlanning Manager (2) Mechanic Street Supervisor (8) Public Service Worker Parks Supervisor (6) Public Service Worker Non-General FundNon-General FundNon-General Fund WATER (5)SPRINGBROOK NATURESOLID WASTE Water SupervisorCENTER (3) Environmental Planner Nature Center Director (4) Public Service Worker SECTION 8 HOUSING Program Supervisor Coordinator SEWER (5) Program Admin Assist (32 hrs/week) Sewer Supervisor HRA (4) Public Service Worker Assistant Executive Director 7 CITY OF FRIDLEY 8 II. FINANCIAL SECTION 9 CITY OF FRIDLEY 10 MANAGEMENT’S DISCUSSION AND ANALYSIS As management of the City of Fridley, we offer readers of the City of Fridley’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2010. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 3 and 4 of this report. Financial Highlights The assets of the City of Fridley exceeded its liabilities at the close of the most recent fiscal year by $62,994,816 (Net assets). Of this amount, $28,941,318 (unrestricted net assets) may be used to meet the government’s ongoing obligations to citizens and creditors in accordance with the City's fund designations and fiscal policies. During 2010, the City’s total net assets increased by $441,376. As of the close of the current fiscal year, the City of Fridley’s governmental funds reported combined ending fund balances of $21,039,707. Of this total amount, $14,572,539, or 69% is designated or reserved through legal restrictions and City Council authorization. At the end of the current fiscal year the general fund balance of $5,785,219, included $348,831 reserved and $5,436,388 designated. The City’s total debt increased by $1,613,991 during the current fiscal year, it went from $15,637,731 to $17,251,722. Overview of the Financial Statements The discussion and analysis are intended to serve as an introduction to the City of Fridley’s basic financial statements. The City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements . The government-wide financial statements are designed to provide readers with a broad overview of the City of Fridley’s finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of the City of Fridley’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City of Fridley is improving or deteriorating. 13 Managements Discussion and Analysis ’ The statement of activities presents information showing how the City’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City of Fridley that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City of Fridley include general government, public safety, public works, community development, and recreation and naturalist. The business-type activities of the City of Fridley include liquor, water, sewer and storm water. The government-wide financial statements can be found on pages 27 through 29 of this report. Fund financial statements . A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Fridley, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of Fridley can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds . Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financial requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statement. By doing so, readers may better understand the long-term impact of the City's near term financial decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures, and change in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. 14 Managements Discussion and Analysis ’ The City of Fridley maintains six individual major governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, grant management fund, special assessment debt service fund, tax increment debt service fund, special assessment construction capital projects fund and capital improvements fund all of which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The City of Fridley adopts an annual appropriated budget for its general fund, special revenue funds and capital improvements capital projects fund. A budgetary comparison statement has been provided for those funds to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 30 through 33 of this report. Proprietary funds . The City of Fridley maintains four enterprise funds and three internal service funds as a part of its proprietary fund type. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City of Fridley uses enterprise funds to account for its liquor, water, sewer, and storm water operations. The City of Fridley uses internal service funds to account for its employee benefits, self insurance and information systems. Because these services predominately benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water, sewer, storm water and liquor operations, all of which are considered to be major funds of the City of Fridley. Conversely, the internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements can be found on pages 36 through 41 of this report. Fiduciary funds . Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City of Fridley’s own program. The accounting used for fiduciary funds is much like that used for proprietary funds. 15 Managements Discussion and Analysis ’ The basic fiduciary fund financial statement can be found on page 42 of this report. Notes to the financial statements . The notes provide additional information that is essential to a full understanding of the data provided in the government–wide and fund financial statements. The notes to the financial statements can be found on pages 43 through 77 of this report. Other information. The combining statements referred to earlier in connection with the non-major governmental funds are presented immediately following the required supplementary information on budgetary comparisons. Combining and individual fund statements and schedules can be found on pages 90 through 140 of this report. Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City of Fridley, assets exceeded liabilities by $62,994,816at the close of the most recent fiscal year. The largest portion of the City of Fridley's net assets ($30,651,722 or 50 percent) reflects its investment in capital assets (e.g. land, buildings, machinery and equipment) less any related debt used to acquire those assets that is still outstanding. The City of Fridley uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Fridley's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. CITY OF FRIDLEY'S NET ASSETS Governmental ActivitiesBusiness-TypeTotals 200920102009201020092010 Current and other assets$25,637,464$27,812,083$8,928,704$11,519,394$34,566,168$39,331,477 Capital assets24,941,95823,377,14320,899,12320,104,22145,841,08143,481,364 Total assets$50,579,422$51,189,226$29,827,827$31,623,615$80,407,249$82,812,841 Long-term liabilities outstanding$6,869,604$7,967,110$5,386,088$7,681,212$12,255,692$15,648,322 Other liabilities4,501,3882,980,6511,096,7291,189,0525,598,1174,169,703 Total liabilities$11,370,992$10,947,761$6,482,817$8,870,264$17,853,809$19,818,025 Net assets: Invested in capital assets, net of related debt$16,141,958$15,546,219$15,880,914$15,105,503$32,022,872$30,651,722 Restricted2,790,2203,401,776 - - 2,790,2203,401,776 Unrestricted20,276,25221,293,4707,464,0967,647,84827,740,34828,941,318 Total net assets$39,208,430$40,241,465$23,345,010$22,753,351$62,553,440$62,994,816 16 Managements Discussion and Analysis ’ A portion of the of the City of Fridley's net assets represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets ($28,941,318) may be used to meet the City's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City of Fridley is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business-type activities. Governmental Activities Governmental activities increased the City of Fridley's net assets by $1,033,035. Capital grants and contributions increased by $475,945 due to the increase in street construction activity. Property taxes increased by $965,231 because of a higher levy, and Public works expenses increased by $851,598 due to this same increase in street construction activity. City of Fridley's Changes in Net Assets Governmental ActivitiesBusiness-Type ActivitiesTotals 200920102009201020092010 Revenues: Program revenues: Charges for services$3,316,861$3,405,054$11,634,262$11,721,331$14,951,123$15,126,385 Operating grants and contributions930,765939,123 - - 930,765939,123 Capital grants and contributions1,476,9891,952,934 - - 1,476,9891,952,934 General revenues: - - Property taxes9,175,88810,141,119 - - 9,175,88810,141,119 Grants and contributions not restricted to specific programs3,390,6332,718,979 - - 3,390,6332,718,979 Unrestricted investment earnings96,817208,56525,90857,098122,725265,663 Gain (loss) on sale of property12,98220,112(237,923)112(224,941)20,224 Other - - - - - - Total revenues18,400,93519,385,88611,422,24711,778,54129,823,18231,164,427 Expenses: General government3,324,6983,272,470 - - 3,324,6983,272,470 Public safety6,847,5716,756,698 - - 6,847,5716,756,698 Public works5,065,1785,916,776 - - 5,065,1785,916,776 Community development1,036,549966,909 - - 1,036,549966,909 Recreation and naturalist1,605,3061,521,106 - - 1,605,3061,521,106 Interest on long-term debt342,555268,892 - - 342,555268,892 Liquor - - 4,654,8114,542,1804,654,8114,542,180 Water - - 2,423,1292,438,3992,423,1292,438,399 Sewer - - 4,350,5764,617,9914,350,5764,617,991 Storm water - - 399,349421,630399,349421,630 Total expenses 18,221,85718,702,85111,827,86512,020,20030,049,72230,723,051 Increase (decrease) in net assets before transfers179,078683,035(405,618)(241,659)(226,540)441,376 Transfers500,000350,000(500,000)(350,000) - - Increase in net assets679,0781,033,035(905,618)(591,659)(226,540)441,376 Net assets - January 138,529,35239,208,43024,250,62823,345,01062,779,98062,553,440 Net assets - December 31$39,208,430$40,241,465$23,345,010$22,753,351$62,553,440$62,994,816 17 Managements Discussion and Analysis ’ Below are specific graphs which provide comparisons of the governmental activities revenues and expenses: Governmental Activities -Revenues Unrestricted investment earnings Grants and contributions not restricted to Charges for services specific programs 1% 14% 18% Gain on sale of 0% Operating grants and property contributions 5% Capital grants and contributions 10% 52% Property taxes Governmental Activities -Expenses Interest on Recreation long-term debt and naturalist Community General government 1% 8% Developement 18% 5% Public works 32% 36% Public safety 18 Managements Discussion and Analysis ’ Business-Type Activities Business-type activities decreased net assets by $591,659. Charges for utility services ($6,865,451) did not keep up with expenses for the utilities ($7,478,020).This is in large part due to sewer charges to utility customers not keeping up with sewer disposal charges from the Metropolitan Council Environmental Services to the City of Fridley: Business-Type Activities -Revenues Unrestricted investment earnings 0% 100% Charges for services Business-Type Activities -Expenses Loss on sale of property Storm water 4% 0% Water 20% Liquor 38% ` 38% Sewer 19 Managements Discussion and Analysis ’ Financial Analysis of the Government's Funds Governmental Funds . The focus of the City of Fridley’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Fridley’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. At the end of the current fiscal year, the City of Fridley's governmental funds reported combined ending fund balances of $21,039,707. Approximately 89 percent of this amount ($18,624,144) constitutes unreserved fund balance. The remainder of the fund balance ($2,415,563) is reserved because it has already been committed 1) to provide for inventory ($59,755) 2) to purchase capital equipment ($289,076) and 3) to pay debt service ($2,066,732). The General Fund’s fund balance increased by $1,125,303 in 2010. This was much better than the $211,281 decrease originally budgeted for. The key reason for this improvement is the selling of Equipment Certificates to fund capital equipment purchases. The Special Assessment Debt Service Fund’s fund balance increased by $513,847 in 2010. This was due to issuing improvement bonds. The Capital Improvements Fund’s fund balance increased by $697,039 in 2010. This was due to an increase in intergovernmental revenues. Proprietary funds . The City of Fridley’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The unrestricted net assets in the respective proprietary funds are liquor $972,941, water $9,142,307, sewer $7,004,414 and storm water $5,633,689. The liquor, water, and sewer funds had decreases in net assets of $35,821, $17,885, and $547,724 respectively, while the storm water fund had an increase in net assets of $9,771. Budgetary Highlights General Fund The original budget was amended to move $426,240 in state aid credits from taxes to intergovernmental revenue. The budget for garage expenditures was increased by $62,566 to fund a hoist originally not expected to be replaced until 2011. The original budget for contingency was decreased by $54,934 during the year. This was due to its budget being allocated to budgets in other departments. Expenditures in total were less than the final budgetary estimates by $713,665. Significant variances include the Municipal Center department which expended $70,203 less than 20 Managements Discussion and Analysis ’ anticipated, the Public Works and Parks Maintenance department which expended $188,860 less than anticipated, the Rental Inspections department which expended $52,209 less than anticipated and the Parks and Recreation department which expended $142,807 less than anticipated. Capital Asset and Debt Administration Capital assets . The City of Fridley’s, investment in capital assets for its governmental and business type activities as of December 31, 2010, amounts to $43,481,364 (net of accumulated depreciation). This investment in capital assets includes land, buildings and structures, improvements other than buildings, machinery and equipment, infrastructure and construction in progress. City of Fridley’s Capital Assets (Net of Depreciation ) Governmental ActivitiesBusiness-Type ActivitiesTotals 200920102009201020092010 Land$2,841,516$2,841,516$306,477$306,477$3,147,993$3,147,993 Buildings and structures 2,310,433 2,032,153 1,731,584 1,644,950 4,042,017 3,677,103 Improvements other than buildings 2,225,569 2,033,251 7,390,976 7,345,743 9,616,545 9,378,994 Machinery and equipment 2,020,247 1,900,863 641,568 579,499 2,661,815 2,480,362 Infrastructure 15,480,741 10,711,641 10,227,552 26,192,38224,790,912 14,563,360 Construction in progress 63,452 6,000 116,877 - 180,329 6,000 Total Capital Assets$24,941,958$23,377,143$20,899,123$20,104,221$45,841,081$43,481,364 Additional information on the City of Fridley’s capital assets can be found in Note 4. Long-term debt . At the end of the current fiscal year, the City of Fridley had total bonded debt outstanding of $16,280,000, an increase of $1,615,000 from 2009. $7,570,000 of this is for general obligation improvement debt which is supported by special assessments and a property tax levy, an additional $550,000 is for general obligation equipment certificate debt which financed the City’s capital equipment purchases, and $8,160,000 is general obligation utility revenue bonds which financed utility improvements. In 2010 the City issued $1,215,000 in General Obligation Improvement Bonds, $550,000 in General Obligation Equipment Certificates, and $2,810,000 in General Obligation Revenue Bonds. In addition, there is long-term debt in the amount of $973,963 for compensated absences. Additional information on the City of Fridley’s long-term debt can be found in Note 5. 21 Managements Discussion and Analysis ’ City of Fridley’s Outstanding Debt General Obligation Improvement Bonds, General Obligation Tax Increment Bonds, General Obligation Equipment Certificates, General Obligation Revenue Bonds, and Compensated Absences (excluding bond discounts) are as follows: Governmental ActivitiesBusiness-Type ActivitiesTotals 200920102009201020092010 General Obligation Improvement Bonds7,080,000$ $ 7,570,000$ -$ -$ 7,080,000$ 7,570,000 General Obligation Tax Increment Bonds1,720,000 - - - 1,720,000 - General Obligation Revenue Bonds - -5,865,000 8,160,000 5,865,000 8,160,000 General Obligation Equipment Certificates - 550,000.00 - - - 550,000 Compensated Absences 975,540 973,963 - - 975,540 973,963 Total$ 9,775,540$ 9,093,963$ 5,865,000$ 8,160,000$ 15,640,540$ 17,253,963 The City of Fridley has an Aa1 rating from Moody's Investors Service. State statutes limit the amount of general obligation debt a Minnesota city may issue to 3% of total Estimated Market Value. The current debt limitation for the City of Fridley is $76,835,199. Only $550,000 of the City's outstanding debt is counted within the statutory limitation because all other debt is either wholly or partially repaid by revenues other than general property tax levies. Requests for information. This financial report is designed to provide a general overview of the City of Fridley’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Director, 6431 University Avenue NE, Fridley, Minnesota 55432. 22 BASIC FINANCIAL STATEMENTS 23 CITY OF FRIDLEY 24 Exhibit A-1 CITY OF FRIDLEY, MINNESOTA STATEMENT OF NET ASSETS December 31, 2010 With comparative totals for December 31, 2009 Component Unit Primary GovernmentHousing & Redevelopment GovernmentalBusiness-TypeTotalsAuthority ActivitiesActivities2010200920102009 Assets: Cash and investments$24,721,089$5,270,973$29,992,062$27,474,987$8,106,540$11,661,595 Restricted cash and investments - 3,159,0413,159,041843,982 - - Receivables: Accounts175,2232,224,4872,399,7102,305,89145,79643,117 Taxes386,621 - 386,621421,74862,66597,852 Special assessments1,889,76322,8131,912,5762,130,258 - - Mortgage - - - - 1,042,7881,168,629 Interest116,576 - 116,57655,08323,35510,989 Due from component unit64,038 - 64,038188,149 - - Due from other governments399,0183,872402,890228,285 - - Due from primary government - - - - - - Prepaid items - 285,103285,103287,1263,6383,638 Inventories - at cost59,755553,105612,860630,659 - - Land held for resale - - - - 4,251,0513,861,156 Capital assets (net of accumulated depreciation): Land2,841,516306,4773,147,9933,147,9932,023,5112,023,511 Buildings and structures2,032,1531,644,9503,677,1034,042,017 - - Improvements other than buildings2,033,2517,345,7439,378,9949,616,545 - - Machinery and equipment1,900,863579,4992,480,3622,661,815 - - Infrastructure14,563,36010,227,55224,790,91226,192,382 - - Construction in progress6,000 - 6,000180,329 - - Total assets51,189,22631,623,61582,812,84180,407,24915,559,34418,870,487 Liabilities: Due to primary government - - - - 64,038188,149 Accounts payable194,997332,833527,830417,048540,294389,748 Deposits payable 17,711 - 17,71152,511 - - Contracts payable296,605 - 296,605218,815 - - Due to other governments39,567143,918183,485187,227 - 8,417 Due to component unit - - - - - - Salaries payable537,84556,671594,516596,794 - - Accrued interest payable118,966120,630239,596231,917 - - Compensated absences payable: Due within one year799,284 - 799,284775,962 - - Due in more than one year174,679 - 174,679199,578 - - Other post employment benefits payable: Due in more than one year472,43158,453530,884353,923 - - Unearned revenue175,676 - 175,676157,843 - - Bonds payable: Due within one year800,000535,0001,335,0002,960,000 - - Due in more than one year7,320,0007,622,75914,942,75911,702,191 - - Total liabilities10,947,7618,870,26419,818,02517,853,809604,332586,314 Net assets: Invested in capital assets, net of related debt15,546,21915,105,50330,651,72232,022,8722,023,5112,023,511 Restricted for: Debt service3,345,972 - 3,345,9722,761,978 - - Public safety55,804 - 55,80428,242 - - Tax increment purposes - - - - - 1,720,000 Unrestricted21,293,4707,647,84828,941,31827,740,34812,931,50114,540,662 Total net assets$40,241,465$22,753,351$62,994,816$62,553,440$14,955,012$18,284,173 The accompanying notes are an integral part of these financial statements. 25 CITY OF FRIDLEY, MINNESOTA STATEMENT OF ACTIVITIES For The Year Ended December 31, 2010 With comparative totals for the year ended December 31, 2009 Program Revenues Operating Charges ForGrants and ExpensesServicesContributions Functions/Programs Primary government: Governmental activities: General government$3,272,470$1,755,123$48,441 Public safety6,756,698717,003513,437 Public works5,916,77666,938217,973 Community development966,909501,897130,506 Parks, recreation and naturalist1,521,106364,09328,766 Interest on long-term debt268,892 - - Total governmental activities18,702,8513,405,054939,123 Business-type activities: Liquor4,542,1804,855,880 - Water2,438,3992,390,836 - Sewer4,617,9914,052,800 - Storm water421,630421,815 - Total business-type activities12,020,20011,721,3310 Total primary government$30,723,051$15,126,385$939,123 Component unit: Housing and Redevelopment Authority$5,925,039$11,800$ - Total component unit$5,925,039$11,800$0 General revenues: Property taxes Tax increment collections Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain (loss) on sale of property Other Transfers Total general revenues and transfers Change in net assets Net assets - January 1 Net assets - December 31 The accompanying notes are an integral part of these financial statements. 26 Exhibit A-2 Net (Expense) Revenue and Changes in Net AssetsComponent Unit Primary GovernmentHousing & Redevelopment Capital TotalsAuthority Grants andGovernmentalBusiness-Type ContributionsActivitiesActivities2010200920102009 $ - ($1,468,906)$ - ($1,468,906)($1,527,838)$ - $ - - (5,526,258) - (5,526,258)(5,637,794) - - 1,944,383(3,687,482) - (3,687,482)(3,359,562) - - - (334,506) - (334,506)(422,740) - - 8,551(1,119,696) - (1,119,696)(1,206,753) - - - (268,892) - (268,892)(342,555) - - 1,952,934(12,405,740)0(12,405,740)(12,497,242)00 - - 313,700313,700318,189 - - - - (47,563)(47,563)(3,729) - - - - (565,191)(565,191)(566,576) - - - - 18518558,513 - - 00(298,869)(298,869)(193,603)00 $1,952,934(12,405,740)(298,869)(12,704,609)(12,690,845)$0$0 $3,439($5,909,800)($4,966,943) $3,439(5,909,800)(4,966,943) 10,141,119 - 10,141,1199,175,888470,659471,474 - - - - 1,709,8401,952,867 2,718,979 - 2,718,9793,390,63333,66151,904 208,56557,098265,663122,725112,16668,301 20,11211220,224(224,941)233,17043,117 - - - - 21,14321,524 350,000(350,000) - - - - 13,438,775(292,790)13,145,98512,464,3052,580,6392,609,187 1,033,035(591,659)441,376(226,540)(3,329,161)(2,357,756) 39,208,43023,345,01062,553,44062,779,98018,284,17320,641,929 $40,241,465$22,753,351$62,994,816$62,553,440$14,955,012$18,284,173 The accompanying notes are an integral part of these financial statements. 27 CITY OF FRIDLEY, MINNESOTA BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2010 With comparative totals for December 31, 2009 Special GrantAssessment General FundManagementDebt Service Assets Cash and investments$5,870,280$148,988$8,040,889 Receivables: Accounts65,354 - - Taxes345,763 -28,952 Special assessments47,967 - 1,828,936 Interest116,576 - - Due from other funds132,081 - - Due from component unit48,877 - - Due from other governments40,52435,886 - Inventories, at cost59,755 - - Total assets$6,727,177$184,874$9,898,777 Liabilities and Fund Balances Liabilities: Accounts payable$164,049$2,680$ - Deposits payable17,711 - - Contracts payable1,309 - - Due to other governments34,042758 - Due to other funds - - - Salaries payable418,6595,760 - Deferred revenue306,188175,6761,848,620 Total liabilities941,958184,8741,848,620 Fund balances: Reserved for: Inventory59,755 - - Capital equipment289,076 - - Debt service - - 2,066,732 Unreserved: Designated reported in: General Fund5,436,388 - - Special Revenue Funds - - - Capital Project Funds - - - Undesignated reported in: Special Revenue Funds - - - Debt Service Funds - - 5,983,425 Capital Project Funds - - - Total fund balances5,785,21908,050,157 Total liabilities and fund balances$6,727,177$184,874$9,898,777 The accompanying notes are an integral part of these financial statements. 28 Exhibit A-3 Special AssessmentOther Tax Increment ConstructionCapitalGovernmentalIntra-Activity Debt ServiceCapital ProjectsImprovementsFundsEliminationsTotals Governmental Funds 20102009 $ - $577,679$5,254,478$1,399,127$ - $21,291,441$18,842,707 - - - 109,869 - 175,223205,020 - - 53811,368 - 386,621421,748 -12,860 - - - 1,889,7632,117,201 - - - - - 116,57655,083 - - - - (132,081) - - - - - 15,023 -63,900187,918 - 262,5002,20357,905 - 399,018176,554 - - - - - 59,75558,928 $0$853,039$5,257,219$1,593,292($132,081)$24,382,297$22,065,159 $ - $ - $ - $26,766$ - $193,495$183,879 - - - - - 17,71152,511 - 295,296 - - - 296,605159,918 -4,33734288 -39,56733,615 - - - 132,081(132,081) - - - - - 18,341 - 442,760453,255 -12,8604928,616 - 2,352,4522,599,960 0312,493834185,892(132,081)3,342,5903,483,138 - - - - - 59,75558,928 - - - - - 289,076 - - - - - - 2,066,7321,734,624 - - - - - 5,436,3884,600,988 - - - 1,464,203 - 1,464,2031,357,889 - - 5,256,385 - - 5,256,3854,559,346 - - - (56,803) - (56,803)(28,242) - - - - - 5,983,4255,801,686 - 540,546 - - - 540,546496,802 0540,5465,256,3851,407,400021,039,70718,582,021 $0$853,039$5,257,219$1,593,292($132,081)$24,382,297$22,065,159 Fund balance reported above$21,039,707$18,582,021 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources, and therefore, are not reported in the funds.23,098,57924,661,304 Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds.2,176,7762,442,117 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds.(8,711,397)(9,254,861) Internal service funds are used by management to charge the cost of certain activities to individual funds. The assets and liabilities are included in the governmental statement of net assets.2,637,8002,777,849 Net assets of governmental activities$40,241,465$39,208,430 The accompanying notes are an integral part of these financial statements. 29 CITY OF FRIDLEY, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For The Year Ended December 31, 2010 With comparative totals for the year ended December 31, 2009 Special GrantAssessment ManagementDebt Service General Fund Revenues: Taxes$9,197,725$ - $666,520 Special assessments51,632 -555,997 Licenses and permits745,901 - - Intergovernmental revenue1,440,308239,1261,330 Charges for services1,696,127 - - Fines and forfeits182,044 - - Investment income45,319 -67,308 Interest on loan - - - Miscellaneous: Other135,386 - - Received from component unit - - - Total revenues13,494,442239,1261,291,155 Expenditures: Current: General government2,454,332 - - Public safety6,234,420 - - Public works3,023,542 - - Community development728,361239,126 - Parks, recreation and naturalist808,445 - - Debt service18,356 - 1,004,637 Capital outlay283,151 - - Total expenditures13,550,607239,1261,004,637 Excess (deficiency) of revenues over (under) expenditures(56,165)0286,518 Other financing sources (uses): Bonds issued550,000 -474,601 Bond premiums14,96838,195 Proceeds from sale of capital assets16,500 - - Transfers in600,000 - - Transfers out - - (285,467) Total other financing sources (uses)1,181,4680227,329 Net change in fund balance1,125,3030513,847 Fund balance - January 14,659,916 - 7,536,310 Fund balance - December 31$5,785,219$0$8,050,157 The accompanying notes are an integral part of these financial statements. 30 Exhibit A-4 Special AssessmentOther Tax Increment ConstructionCapitalGovernmentalIntra-Activity Debt ServiceCapital ProjectsImprovementsFundsEliminations Totals Governmental Funds 20102009 $ - $ - $272$313,852$ - $10,178,369$9,072,267 -14,471 - - - 622,100665,038 - - - 228,084 - 973,985965,363 - 262,5001,296,42570,942 - 3,310,6313,140,553 -7,579 - 376,643 - 2,080,3492,021,708 - - - 58,836 - 240,880255,014 -84051,35711,433 - 176,25774,840 - - - - - - 6,939 - - 35,06767,456 - 237,909266,757 1,755,062 - - - - 1,755,0621,776,495 1,755,062285,3901,383,1211,127,246019,575,54218,244,974 -11,4012,116542,986 - 3,010,8353,086,442 - - - 94,934 - 6,329,3546,446,712 -88,376 - - - 3,111,9183,376,642 - - - - - 967,487895,057 - - 51,939432,399 - 1,292,7831,301,140 1,755,062 - - - - 2,778,0552,583,301 - 1,482,26832,02714,641 - 1,812,0872,144,649 1,755,0621,582,04586,0821,084,960019,302,51919,833,943 0(1,296,655)1,297,03942,2860273,023(1,588,969) - 740,399 - - - 1,765,000 - 53,163 - - - - - - 16,50036,845 - 600,000 - 35,467 - 1,235,467500,000 - - (600,000) - - (885,467) - 01,340,399(600,000)35,46702,184,663536,845 043,744697,03977,75302,457,686(1,052,124) - 496,8024,559,3461,329,647 - 18,582,02119,634,145 $0$540,546$5,256,385$1,407,400$0$21,039,707$18,582,021 The accompanying notes are an integral part of these financial statements. 31 CITY OF FRIDLEY 32 Exhibit A-5 CITY OF FRIDLEY, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For The Year Ended December 31, 2010 With comparative amounts for the year ended December 31, 2009 20102009 Amounts reported for governmental activities in the statement of activities (Exhibit A-2) are different because: Net changes in fund balances - total governmental funds (Exhibit A-4)$2,457,686($1,052,124) Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period.(1,562,725)(229,920) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds.(265,341)116,246 The issuance of long-term debt (e.g., bonds, leases) provides current resources to governmental funds, while the repayment of the principal of financial long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. This amount is the net effect of these differences in the treatment of long-term debt and related items.680,0002,215,000 Internal service funds are used by management to charge the cost of certain activities to individual funds. This amount is net revenue attributable to governmental activities.(140,049)(269,943) Other post employment benefits in the statement of activities does not require the use of current financial resources and, therefore, is not reported as expenditures in governmental funds.(157,405)(125,927) Accrued interest reported in the statement of activities does not require the use of current financial resources and, therefore, is not reported as expenditures in governmental funds.20,86925,746 Change in net assets of governmental activities (Exhibit A-2)$1,033,035$679,078 The accompanying notes are an integral part of these financial statements. 33 CITY OF FRIDLEY, MINNESOTA STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 31, 2010 With comparative totals for December 31, 2009 Business-Type Activities - Enterprise Funds Assets:LiquorWater Current assets: Cash and cash equivalents$394,204$2,034,911 Restricted cash and cash equivalents -2,581,678 Accounts receivable -1,023,922 Special assessments receivable -18,239 Due from other governments - - Inventories, at cost540,28312,822 Prepaid items - - Total current assets934,4875,671,572 Noncurrent assets: Capital assets: Land151,946154,531 Buildings and structures130,2113,124,015 Improvements other than buildings650,2458,658,880 Machinery and equipment208,9301,566,855 Infrastructure -8,863,916 Construction in progress - - Total capital assets1,141,33222,368,197 Less: Allowance for depreciation(747,178)(11,420,166) Net capital assets394,15410,948,031 Total noncurrent assets394,15410,948,031 Total assets1,328,64116,619,603 Liabilities: Current liabilities: Accounts payable273,29552,603 Accrued interest payable -109,056 Contracts payable - - Due to other governments49,40819,774 Salaries payable16,85023,629 Payroll deductions payable - - Compensated absences payable - - Bonds payable - current -535,000 Total current liabilities339,553740,062 Noncurrent liabilities: Other post employment benefits16,14724,475 Compensated absences - noncurrent - - Bonds payable - noncurrent -6,712,759 Total noncurrent liabilities16,1476,737,234 Total liabilities355,7007,477,296 Net assets: Invested in capital assets, net of related debt394,1546,281,950 Unrestricted578,7872,860,357 Total net assets$972,941$9,142,307 The accompanying notes are an integral part of these financial statements. 34 Exhibit A-6 Activities - Internal Service Funds Business-Type Activities - Enterprise FundsTotals SewerStorm Water20102009 $1,817,230$1,024,628$5,270,973$5,060,206$3,429,648 228,139349,2243,159,041843,982 - 1,087,997112,5682,224,4872,100,871 - -4,57422,81313,057138 3,872 -3,87251,731 - - -553,105571,731 - 285,103 -285,103287,126 - 3,422,341 1,490,994 11,519,394 8,928,704 3,429,786 - -306,477306,477 - 8,770 -3,262,9963,262,996 - 2,651,0232,004,40513,964,55313,465,184 - 1,036,771172,2152,984,7712,905,5941,622,539 6,732,6177,100,48822,697,02122,660,218 - - - -116,877 - 10,429,181 9,277,108 43,215,818 42,717,346 1,622,539 (6,205,468)(4,738,785)(23,111,597)(21,818,223)(1,343,975) 4,223,7134,538,32320,104,22120,899,123278,564 4,223,7134,538,32320,104,22120,899,123278,564 7,646,0546,029,31731,623,61529,827,8273,708,350 6,270665332,833220,8031,502 6,6114,963120,63092,082 - - - -58,897 - 74,736 -143,918153,476 - 16,192 -56,67156,471 - - - - -95,085 - - - -799,284 - -535,000515,000 - 103,809 5,628 1,189,052 1,096,729 895,871 17,831 -58,45338,897 - - - - -174,679 520,000390,0007,622,7595,347,191 - 537,831 390,000 7,681,212 5,386,088 174,679 641,640395,6288,870,2646,482,8171,070,550 3,931,8524,497,54715,105,50315,880,914278,564 3,072,5621,136,1427,647,8487,464,0962,359,236 $7,004,414$5,633,689$22,753,351$23,345,010$2,637,800 The accompanying notes are an integral part of these financial statements. 35 CITY OF FRIDLEY, MINNESOTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS For The Year Ended December 31, 2010 With comparative totals for the year ended December 31, 200 9 Business-Type Activities - Enterprise Funds LiquorWater Sales$4,855,880$ - Cost of sales(3,655,045) - Gross profit1,200,8350 Operating revenues: Customer billings -2,388,015 Charges for services - - Other revenues -2,821 Total operating revenues02,390,836 Total gross profit and operating revenues1,200,8352,390,836 Operating expenses: Personal services497,334806,662 Supplies and other charges: Disposal charges - - Other357,799686,719 Depreciation32,002715,086 Total operating expenses887,1352,208,467 Operating income (loss)313,700182,369 Nonoperating revenues (expenses): Intergovernmental revenue - - Investment income47929,678 Bond issuance costs - - Insurance reimbursement - - Interest expense -(229,932) Special assessments - - Gain (loss) on disposal of capital assets - - Total nonoperating revenues (expenses)479(200,254) Income (loss) before transfers314,179(17,885) Transfers: Transfers out(350,000) - Change in net assets(35,821)(17,885) Net assets - January 1 1,008,7629,160,192 Net assets - December 31$972,941$9,142,307 The accompanying notes are an integral part of these financial statements. 36 Exhibit A-7 Governmental Activities - Business-Type Activities - Enterprise Funds Internal Service Funds SewerStorm WaterTotals 20102009 $ -$ -$4,855,880$4,973,000$ - - -(3,655,045)(3,765,499) - 001,200,8351,207,5010 4,046,283421,1436,855,4416,611,611 - 6,5172376,754 -29,831 - -2,82149,021 - 4,052,800 421,380 6,865,016 6,660,632 29,831 4,052,800 421,380 8,065,851 7,868,133 29,831 693,512125,2002,122,7082,074,03738,080 3,460,966 -3,460,9663,268,34649,939 145,62856,4541,246,6001,286,015 - 311,274235,0121,293,3741,212,520127,789 4,611,380 416,666 8,123,648 7,840,918 215,808 (558,580)4,714 (57,797)27,215 (185,977) - - - -10,010 17,3559,58657,09825,90832,308 - - - - - - - - - - (6,611)(4,964)(241,507)(221,448) - -435435630 - 112 -112(237,923)3,610 10,856 5,057 (183,862)(432,833)45,928 (547,724)9,771 (241,659)(405,618)(140,049) - -(350,000)(500,000) - (547,724)9,771 (591,659)(905,618)(140,049) 7,552,1385,623,91823,345,01024,250,6282,777,849 $7,004,414$5,633,689$22,753,351$23,345,010$2,637,800 The accompanying notes are an integral part of these financial statements. 37 CITY OF FRIDLEY, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For The Year Ended December 31, 2010 With comparative totals for the year ended December 31, 2009 Business-Type Activities - Enterprise Funds LiquorWater Cash flows from operating activities: Receipts from customers and users$4,855,880$2,349,179 Receipts from interfund services provided - - Payment to suppliers(3,888,372)(742,443) Payment to employees(494,372)(795,915) Net cash flows from operating activities473,136810,821 Cash flows from noncapital financing activities: Transfers out(350,000) - Special assessment collections - - Net cash flows from noncapital financing activities(350,000)0 Cash flows from capital and related financing activities: Acquisition of capital assets -(164,813) Intergovernmental - - Insurance reimbursement - - Principal paid on revenue bonds -(515,000) Proceeds from sale of bonds -1,900,000 Interest and paying agent fees on revenue bonds -(212,390) Proceeds from sale of capital assets - - Net cash flows from capital and related financing activities01,007,797 Cash flows from investing activities: Investment income47929,678 Net increase (decrease) in cash and cash equivalents123,6151,848,296 Cash and cash equivalents - January 1270,5892,768,293 Cash and cash equivalents - December 31$394,204$4,616,589 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) $313,700$182,369 Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation32,002715,086 Changes in assets and liabilities: Decrease (increase) in receivables -(41,657) Decrease (increase) in prepaid items - - Decrease (increase) in inventories16,1762,450 Increase (decrease) in payables111,258(47,427) Total adjustments159,436628,452 Net cash provided by operating activities$473,136$810,821 The accompanying notes are an integral part of these financial statements. 38 Exhibit A-8 Governmental Activities - Business-Type Activities - Enterprise Funds Internal Service Funds SewerStorm WaterTotals 20102009 $3,963,008$467,316$11,635,383$11,514,191$ - - - - -29,924 (3,602,641)(64,931)(8,298,387)(8,298,673)(60,939) (687,465)(125,200)(2,102,952)(2,050,538)(31,640) (327,098)277,1851,234,0441,164,980(62,655) - -(350,000)(500,000) - -4354353,626 - 0435(349,565)(496,374)0 (292,646)(41,014)(498,473)(2,378,795)(125,699) - - - -10,010 - - - - - - -(515,000)(575,000) - 520,000390,0002,810,000 - - - -(212,390)(220,299) - 112 -1126,5003,610 227,466348,9861,584,249(3,167,594)(112,079) 17,3559,58657,09825,90832,308 (82,277)636,1922,525,826(2,473,080)(142,426) 2,127,646737,6605,904,1888,377,2683,572,074 $2,045,369$1,373,852$8,430,014 $5,904,188 $3,429,648 ($558,580)$4,714($57,797)$27,215($185,977) 311,274235,0121,293,3741,212,520127,789 (89,792)45,936(85,513)(196,449)93 2,023 -2,023(22,508) - - -18,62641,889 - 7,977(8,477)63,331102,313(4,560) 231,482272,4711,291,841 1,137,765 123,322 ($327,098)$277,185$1,234,044$1,164,980($62,655) The accompanying notes are an integral part of these financial statements. 39 Exhibit A-9 CITY OF FRIDLEY, MINNESOTA STATEMENT OF FIDUCIARY NET ASSETS December 31, 2010 With comparative amounts for December 31, 2009 20102009 Assets: Cash and investments$9,312$24,479 Receivables: Accounts2,5511,746 Taxes: Unremitted8232 Delinquent228293 Total assets$12,173$26,550 Liabilities: Due to other governments$12,173$26,550 The accompanying notes are an integral part of these financial statements. 40 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 1. Summary of Significant Accounting Policies The City of Fridley, Minnesota was incorporated July 1, 1949, under Chapter 410.03 of the Statutes of the State of Minnesota providing for a council-manager form of government under the “Home Rule Charter City” concept. The City provides the following services as authorized by its charter: general administrative services, public safety (police and fire), public improvements, planning and zoning, and culture and recreation. The financial statements of the City of Fridley, Minnesota have been prepared in conformity with generally accepted accounting principles as applied to governmental units by the Governmental Accounting Standards Board (GASB). The following is a summary of the significant accounting policies. A. Financial Reporting Entity As required by generally accepted accounting principles, the financial statements of the reporting entity include those of the City of Fridley, Minnesota (the primary government) and its component units. The component units discussed below are included in the City's reporting entity because of the significance of their operational or financial relationships with the City. Component Units In conformity with generally accepted accounting principles, the financial statements of the component units have been included in the financial reporting entity as discretely presented component units. Discretely Presented Component Unit - The Fridley Housing and Redevelopment Authority (HRA) is governed by commissioners appointed by the Fridley City Council. The HRA is responsible for providing housing and redevelopment assistance to the City and its residents. Funding for the various programs administered by the HRA is provided through the issuance of tax increment revenue bonds and general obligation tax increment bonds guaranteed by the City. Separate financial statements are not prepared for the HRA. B.Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements.Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or business-type activity is offset by program revenues.Direct expenses are those that are clearly identifiable with a specific function or business-type activity.Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or business-type activity and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or business-type activity. Taxes and other items not included among program revenues are reported instead as general revenues. 41 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the Proprietary Fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers all revenues, except reimbursement grants, to be available if they are collected within 60 days of the end of the current fiscal period. Reimbursement grants are considered available if they are collected within one year of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, special assessments, intergovernmental revenues, charges for services and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government. The government reports the following major governmental funds: The general fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Thegrant management special revenue fund administers grants received from a variety of intergovernmental agencies. In most cases, grant funds are provided on a reimbursement basis following proper documentation of expenditures, however, in some cases the money is provided in advance to spend on specific activities outlined in the grant. Thespecial assessment debt service fund services debt on the general obligation improvement bonds that were issued to finance construction of public improvements. Special assessment improvements are paid for completely or in part by property owners deemed to have benefited from such improvements. Thetax increment debt service fund services the debt of the tax increment bonds. Tax increment money is used to service the debt on redevelopment related bonds. 42 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Thespecial assessment construction capital projects fund is used to account for the construction of public improvements, such as residential streets, sidewalks, and storm sewers or for the provision of services that are to be paid primarily by the benefited property owner. Thecapital improvements fund is used to account for the monies received from property taxes that are used to finance major improvements and the acquisition of assets that require a large capital outlay. The government reports the following major proprietary funds: Theliquor fund accounts for operations of the municipal liquor stores. Thewater fund accounts for the water service charges which are used to finance the water system operating expenses. Thesewer fund accounts for the sewer service charges which are used to finance the sanitary sewer system operating expenses. Thestorm water fund accounts for storm sewer charges which are used to finance the storm sewer operating expenses. Additionally, the government reports the following fund types: Internal Service Funds are used to account for employee fringe benefits, insurance deductibles and maintenance and upgrading of information systems that are provided on a cost reimbursement or fee basis to departments or agencies within the City. These funds are essential for segregating costs for determining the total cost of providing a service and for assuring that the goods and services provided are properly utilized. Agency Funds are used to account for monies on behalf of the Six Cities Watershed District and the North Metro Convention and Tourism Bureau. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary-fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private-sector guidance. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are transactions that would be treated as revenues, expenditures or expenses if they involved external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City of Fridley. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. 43 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operatingrevenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the liquor, water, sewer and storm water enterprise funds are charges to customers for sales and services.Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for an allowable use, it is the government’s policy to use restricted resources first, then unrestricted resources as they are needed. D. Budgets The City Charter grants the City Council full authority over the financial affairs of the City. The City Manager is charged with the responsibility of preparing the estimates of the annual budget and the enforcement of the provisions of the budget as specified in the City Charter. Upon adoption of the annual budget resolution by the Council, it becomes the formal appropriation budget for City operations. All budget adjustments must be approved by the Council. Budgets for the General, Special Revenue and Capital Improvement Capital Projects Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Budgeted expenditure appropriations lapse at year end. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the appropriation, is not employed by the City because it is, at present, not considered necessary to assure effective budgetary control or to facilitate effective cash management. E. Legal Compliance Budgets The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is legally enacted through passage of a resolution. 44 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 4. The City Council may authorize transfer of budgeted amounts between departments within any fund. 5. Reported budget amounts are as originally adopted or as amended by Council approved transfers. The City Charter limits appropriations to the total estimated revenues and fund balances. If actual revenues exceed the original estimates, appropriations may be increased by the Council up to the amount of revenue increases. 6. All budget amounts lapse at the end of the year to the extent they have not been expended or encumbered. Encumbrances are reappropriated into the following year’s budget. 7. Annual budgets are legally adopted for the General Fund and Special Revenue Funds. Formal budgeting integration is employed as a management control device during the year for each of these funds. Formal budgetary integration is not employed for Debt Service Funds because effective budgetary control is achieved through the bond indenture provisions. Budgetary control for other Capital Projects Funds is accomplished through the use of project controls. 8. As required by the City Charter, budgetary control is maintained within department at the level of three major categories of expenditures: salaries and wages; ordinary expenses; and capital outlay. This is the level of control at which expenditures may not legally exceed appropriations. 9. The General Fund budget includes prior year encumbrances which were reappropriated to the current year. Expenditures for the items encumbered are included in the current year’s expenditures. F. Cash and Investments Cash balances from all funds are combined and invested to the extent available in certificates of deposit, U.S. government securities and other securities authorized by State Statute. Investment income is allocated to the respective funds on the basis of applicable cash balance participation by each fund. Investments are stated at fair value, based upon quoted market prices as of the balance sheet date. Investment income is accrued at the balance sheet date. The City provides temporary advances to funds that have insufficient cash balances by means of an advance from another fund shown as interfund receivables in the advancing fund, and an interfund payable in the fund with the deficit, until adequate resources are received. These interfund balances are eliminated on the government-wide financial statements. For purposes of the statement of cash flows the City considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. All of the cash and investments allocated to the proprietary funds have original maturities of 90 days or less. Therefore the entire balance in the Proprietary Funds is considered cash equivalents. Restricted cash balances relate to unspent bond proceeds. Investments are stated at fair value, based upon quoted market prices, except for investments in 2a7-like external investment pools, which are stated at amortized cost. Investment income is accrued at the balance sheet date. 45 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 G. Receivables and Payables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. Short-term interfund loans are classified as “interfund receivables/payables.” All short-term interfund receivables and payables at December 31, 2010 are planned to be eliminated in 2011. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” Uncollectible property taxes and special assessments are not material and therefore have not been reported. Because utility bills are considered liens on property, no estimated uncollectible amounts are established. Uncollectible amounts are not material for other receivables and have not been reported. H. Property Tax Revenue Recognition The City Council annually adopts a tax levy and certifies it to the County in December (levy/assessment date) of each year for collection in the following year. The County is responsible for billing and collecting all property taxes for itself, the City, the local School District and other taxing authorities. Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. Real property taxes are payable (by property owners) on May 15 and October 15 of each calendar year. Personal property taxes are payable by taxpayers on February 28 and June 30 of each year. These taxes are collected by the County and remitted to the City on or before July 7 and December 2 of the same year. Delinquent collections for November and December are received the following January. The City has no ability to enforce payment of property taxes by property owners. The County possesses this authority. Government-Wide Financial Statements The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible property taxes are not material and have not been reported. Governmental Fund Financial Statements The City recognizes property tax revenue when it becomes both measurable and available to finance expenditures of the current period. In practice, current and delinquent taxes and State credits received by the City in July, December and January are recognized as revenue for the current year. Taxes collected by the County by December 31 (remitted to the City the following January) and taxes and credits not received at year end are classified as delinquent and due from County taxes receivable. The portion of delinquent taxes not collected by the City in January is fully offset by deferred revenue because they are not available to finance current expenditures. I. Market Value Homestead Credit Property taxes on residential agricultural homestead property (as defined by State Statutes) are partially reduced by market value homestead credit (MVHC). This credit is paid to the City by the State in lieu of taxes levied against homestead property. The State remits this credit through installments each year. The credit is recognized as revenue by the City at the time of collection. 46 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 J. Special Assessment Revenue Recognition Special assessments are levied against the benefited properties for the assessable costs of special assessment improvement projects in accordance with State Statutes. The City usually adopts the assessment rolls when the individual projects are complete or substantially complete. The assessments are collectible over a term of years generally consistent with the term of years of the related bond issue. Collection of annual installments is handled by the County in the same manner as property taxes. Property owners are allowed to prepay future installments without interest or prepayment penalties. Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale. Proceeds of sales from tax forfeit properties are remitted to the City in payment of delinquent special assessments. Pursuant to State Statutes, a property shall be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or seasonal recreational land in which event the property is subject to such sale after five years. Government-Wide Financial Statements The City recognizes special assessment revenue in the period that the assessment roll was adopted by the City Council. Uncollectible special assessments are not material and have not been reported. Governmental Fund Financial Statements Revenue from special assessments is recognized by the City when it becomes measurable and available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by the City are recognized as revenue for the current year. Special assessments that are collected by the County by December 31 (remitted to the City the following January) are also recognized as revenue for the current year. All remaining delinquent, deferred and special deferred assessments receivable in governmental funds are completely offset by deferred revenues. K. Inventories Governmental Funds Inventories of the general fund are stated at cost, which approximates market, using the first-in, first out (FIFO) method. The primary government does not maintain material amounts of inventory within the other governmental funds. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Proprietary Funds Liquor fund inventories are valued on the average cost basis. Other proprietary funds inventory items are expensed at the time they are sold or used (consumption method). 47 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 L. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. M. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business- type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 (with the exception of computer equipment) (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. In the case of the initial capitalization of general infrastructure assets (i.e., those reported by governmental activities) the government chose to include all such items regardless of their acquisition date or amount. The City was able to estimate the historical cost for the initial reporting of these assets through back-trending (i.e., estimating the current replacement cost of the infrastructure to be capitalized and using an appropriate price-level index to deflate the cost of the infrastructure to be capitalized and using an appropriate price-level index to deflate the cost to the acquisition year or estimated acquisition year). The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. For the year ended December 31, 2010, no interest was capitalized in connection with construction in progress. The City implemented GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets effective January 1, 2010 which required the City to capitalize and amortize intangible assets. Pursuant to GASB Statement No. 51, the retroactive reporting of permanent easements is not required and therefore, the City has elected not to report permanent easements acquired in years prior to 2010. The City did not acquire any intangible assets for the year ending December 31, 2010. Property, plant and equipment of the primary government, and the component units, are depreciated using the straight line method over the following estimated useful lives: Assets Improvements other than building 20 – 25 years Buildings and structures 20 – 25 years Machinery and equipment 5 – 10 years Infrastructure 25 years 48 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 N. Compensated Absences All liabilities for compensated absences, both current and long-term, for annual leave, severance and separation pay are accounted for in the Employee Benefit Fund, an Internal Service Fund. Each year compensated absence expenditures and expenses are recorded in the Governmental and Proprietary Funds respectively, equivalent to the full amount accrued by fund employees during the year. These charges are offset by a corresponding transfer of assets from the home department funds to the Employee Benefit Fund to fund the liability. This liability represents the maximum possible dilution of Employee Benefit Fund assets by retirements or extended leaves by employees. The personnel ordinance limits the annual accumulation of benefits that can be accumulated from year-to-year. O. Long-Term Obligations In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are generally immaterial and are expensed in the year of bond issuance.Material premiums and discounts are deferred and amortized over the life of the bonds. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. P. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts not appropriable for expenditure or legally segregated for a specific future use. Designated fund balances represent tentative plans for future use of financial resources. Q. Interfund Transactions Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. Interfund loans are reported as an interfund loan receivable or payable which offsets the movement of cash between funds. All other interfund transactions are reported as transfers. 49 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 R. Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires management to make estimates that affect amounts reported in the financial statements during the reporting period. Actual results could differ from such estimates. S. Reconciliation of Government-Wide and Fund Financial Statements 1. Explanation of certain differences between the governmental fund balance sheet and the government-wide statement of net assets The governmental fund balance sheet includes reconciliation between fund balance – total governmental funds and net assets – governmental activities as reported in the government- wide statement of net assets. One element of that reconciliation explains that “long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds.” The details of this $8,711,397 difference are as follows: Bonds payable$8,120,000 Accrued interest payable118,966 Other post employment benefits payable472,431 Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities$8,711,397 2. Explanation of certain differences between the governmental fund statement of revenues, expenditures and changes in fund balances and the government-wide statement of activities The governmental fund statement of revenues, expenditures and changes in fund balances includes reconciliation between net changes in fund balances – total governmental funds and changes in net assets of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that “governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.” The details of this ($1,562,725) difference are as follows: Capital outlay$1,812,087 Less maintenance projects not capitalized(1,440,982) Depreciation expense(1,933,830) Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities($1,562,725) 50 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Another element of that reconciliation states that “revenues on the statement of activities that do not provide current financial resources are not reported as revenues in the funds.” The details of this ($265,341) difference are as follows: General property taxes deferred revenue: At December 31, 2009($329,279) At December 31, 2010292,029 Special assessments deferred revenue: At December 31, 2009(2,112,838) At December 31, 20101,884,747 Net adjustments to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities($265,341) Another element of that reconciliation states that “the issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal on long-term debt consumes the current financial resources of governmental funds.” Neither transaction, however, has any effect on net assets. The details of this $680,000 difference are as follows: Bonds issued($1,765,000) Principal repayments: G.O. Improvement bonds725,000 Tax increment bonds1,720,000 Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities$680,000 T. Reclassifications Certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year’s presentation. 51 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 2. Deposits and Investments A.Deposits In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized by the City Council, all of which are members of the Federal Reserve System. Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds. Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City Treasurer or in a financial institution other than that furnishing the collateral. Authorized collateral includes the following: a) United States government treasury bills, treasury notes, treasury bonds; b) Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service available to the government entity; c) General obligation securities of any state or local government with taxing powers which is rated “A” or better by a national bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated “AA” or better by a national bond rating service; d) Unrated general obligation securities of a local government with taxing powers may be pledged as collateral against funds deposited by that same local government entity: e) Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence that the bank’s public debt is rated “AA” or better by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation; and f) Time deposits that are fully insured by any Federal agency. Custodial credit risk is the risk that in the event of a bank Custodial Credit Risk – Deposits: failure, the City’s deposits may not be returned to it. State Statutes require that insurance, surety bonds or collateral protect all City deposits. The market value of collateral pledged must equal 110% of deposits not covered by insurance or bonds. As of December 31, 2010, the bank balance of the City’s deposits was covered by federal depository insurance or covered by collateral pledged and held in the City’s name. B. Investments Minnesota Statutes authorize the City to invest in the following: a) Direct obligations or obligations guaranteed by the United States or its agencies, its instrumentalities or organizations created by an act of congress, excluding mortgage-backed securities defined as high risk. 52 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities described in (a) above, general obligation tax-exempt securities, or repurchase or reverse repurchase agreements. c) Obligations of the State of Minnesota or any of its municipalities as follows: 1) any security which is a general obligation of any state or local government with taxing powers which is rated “A” or better by a national bond rating service; 2) any security which is a revenue obligation of any state or local government with taxing powers which is rated “AA” or better by a national bond rating service; and 3) a general obligation of the Minnesota housing finance agency which is a moral obligation of the State of Minnesota and is rated “A” or better by a national bond rating agency. d) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System. e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. f) Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000; a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York; certain Minnesota securities broker-dealers; or, a bank qualified as a depositor. g) General obligation temporary bonds of the same governmental entity issued under section 429.091, subdivision 7; 469.178, subdivision 5; or 475.61, subdivision 6. As of December 31, 2010 the City had the following investments and maturities: Investment Maturities (in Years) FairLessOver Investment TypeRatingValueThan 11-56-1010 Years Federal Home Loan BankAAA1,990,160$ - $1,990,160$ - $ - Federal National Mortgage AssociationAAA3,350,111 - 3,350,111 - - Federal Agricultural Mortgage CorporationAAA500,650500,650 - - - Local government bondsAA 5,091,4792,202,9182,888,561 - - Local government bondsA6,153,7451,000,0005,153,745 - - US Mutuals - Brokered CDsN/R9,828,6659,828,665 - - - Money marketN/R161,225161,225 - - - Total$27,076,035$13,693,458$13,382,577$0$0 Total investments$27,076,035 Deposits6,079,829 Petty cash4,550 Total cash and investments$33,160,414 53 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Following is a reconciliation to the City’s cash and investment balances as of December 31, 2010: Cash and investments - primary government: Governmental and business-type (statement A-1)$29,992,062 Restricted cash business-type (statement A-1)3,159,041 Fiduciary (statement A-9)9,312 $33,160,415 As of December 31, 2010 the HRA had the following investments and maturities: Investment Maturities (in Years) FairLessOver Investment TypeRatingValueThan 11-56-1010 Years US Mutuals - Brokered CDsN/R$2,964,318$2,964,318$ - $ - $ - Wells Fargo - Brokered CDsN/R1,775,5591,775,559 - - - United States Treasury BondAAA187,060 - 187,060 - - Federal National Mortgage AssociationAAA991,424 - 991,424 - - Local government bondsA1,006,260 - 1,006,260 - - Money marketN/R49,698 - - - - Total$6,974,319$4,739,877$2,184,744$0$0 Total investments$6,974,319 Deposits1,132,221 Total cash and investments$8,106,540 C. INVESTMENT RISKS Custodial credit risk – investments – For investments in securities, custodial credit risk is the risk that in the event of failure of the counterparty to a transaction, the City will not be able to recover the value of its investment securities that are in the possession of an outside party. Investments in investment pools and money markets are not evidenced by securities that exist in physical or book entry form, and therefore are not subject to custodial credit risk disclosures. The City policy is to limit its exposure by holding investments in securities with a major bank’s corporate trust department. Investments are delivered to the City’s trust account and then payment is released to the broker-dealer. Interest rate risk – Interest rate risk is the risk that changes in interest rates of debt investments could adversely affect the fair value of an investment. The City’s investment policy requires the City to diversify its investment portfolio to eliminate the risk of loss resulting from over concentration of assets in a specific maturity. The policy also states the City’s investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated. Credit Risk– Credit risk is the risk that an issuer or other counterparty to an investment will be unable to fulfill its obligation to the holder of the investment. State law limits investments to commercial paper to those rated in the highest quality category by at least two nationally recognized rating agencies; in any security of the State of Minnesota or any of its municipalities which is rated “A” or better by a national bond rating service for general obligation and rated “AA” or better for a revenue obligation; a general obligation of the Minnesota Housing Finance Agency to those rated “A” or better by a national bond rating agency; mutual funds or money market 54 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 funds whose investments are restricted to securities described in MS 118A.04. The City’s investment policy does not place further restrictions on investment options. Concentration of credit risk – Concentration of credit risk is the risk of loss that may be attributed to the magnitude of a government’s investment in a single issuer. The City places no limit on the amount the City may invest in any one issuer.Investments in a single issuer exceeding 5% of the City’s overall investment portfolio are in various holdings as follows: Federal Home Loan Bank7.35% Federal National Mortgage Association12.37% Local government bonds41.53% US Mutuals - brokered CDs36.30% Concentration of credit risk – Concentration of credit risk is the risk of loss that may be attributed to the magnitude of a government’s investment in a single issuer. The HRA places no limit on the amount the HRA may invest in any one issuer. Investments in a single issuer exceeding 5% of the HRA’s overall investment portfolio are in various holdings as follows: US Mutuals - Brokered CDs42.50% Wells Fargo - Brokered CDs25.46% Federal National Mortgage Association14.22% Local government bonds14.43% 3. Receivables Significant receivables balances not expected to be collected within one year of December 31, 2010 are as follows: Primary Government Major Funds Special Special AssessmentCapital AssessmentNonmajor GeneralDebt ServiceImprovementsCapital ProjectsFundsTotal Special assessments receivable$37,372$1,481,782$ - $10,437$ - $1,529,591 Delinquent property taxes142,18210,9064,912158,000 $179,554$1,481,782$0$21,343$4,912$1,687,591 HRA Component Unit Major Funds RevolvingGeneral NorthCenter LoanFundAreaCityTotal Mortgage receivable$1,118,147$ - $ - $ - $1,118,147 Allowance for uncollectible accounts(75,359) - - - (75,359) Delinquent tax increment - 9,5268,70014,85533,081 $1,042,788$9,526$8,700$14,855$1,075,869 55 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows: UnavailableUnearnedTotal Delinquent property taxes receivable (General Fund)$260,138$ - $260,138 Delinquent property taxes receivable (Capital Improvements Fund)492 - 492 Delinquent property taxes receivable (Special Assessment Debt Service Fund)22,783 - 22,783 Delinquent property taxes receivable (Nonmajor Funds)8,616 - 8,616 Special assessments not yet due (General Fund)46,050 - 46,050 Special assessments not yet due (Special Assessment Construction Fund)12,860 - 12,860 Special assessments not yet due (Special Assessment Debt Service Fund)1,825,837 - 1,825,837 Unearned grant funds (Grant Management Fund) - 175,676175,676 Total deferred/unearned revenue for governmental funds$2,176,776$175,676$2,352,452 4. Capital Assets Capital asset activity for the year ended December 31, 2010 was as follows: BeginningEnding Primary GovernmentBalanceIncreasesDecreasesBalance Governmental activities: Capital assets, not being depreciated: Land$2,841,516$ - $ - $2,841,516 Construction in progress63,452 - (57,452)6,000 Total capital assets, not being depreciated2,904,9680(57,452)2,847,516 Capital assets, being depreciated: Buildings and structures7,948,72114,640 - 7,963,361 Machinery and equipment8,631,026408,851(401,273)8,638,604 Improvements5,721,734130,765(86,309)5,766,190 Infrastructure33,150,978 - - 33,150,978 Total capital assets, being depreciated55,452,459554,256(487,582)55,519,133 Less accumulated depreciation for: Buildings and structures5,638,288292,920 - 5,931,208 Machinery and equipment6,610,779528,235(401,273)6,737,741 Improvements3,496,165323,083(86,309)3,732,939 Infrastructure17,670,237917,38118,587,618 Total accumulated depreciation33,415,4692,061,619(487,582)34,989,506 Total capital assets being depreciated - net22,036,990(1,507,363)020,529,627 Governmental activities capital assets - net$24,941,958($1,507,363)($57,452)$23,377,143 56 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 BeginningEnding Primary Government BalanceIncreasesDecreasesBalance Business-type activities: Capital assets, not being depreciated: Land$306,477$ - $ - $306,477 Construction in progress116,877 - (116,877) - Total capital assets, not being depreciated423,35400306,477 Capital assets, being depreciated: Buildings and structures3,262,996 - - 3,262,996 Improvements other than buildings13,465,184499,369 - 13,964,553 Machinery and equipment2,905,59479,177 - 2,984,771 Infrastructure22,660,21836,803 - 22,697,021 Total capital assets, being depreciated42,293,992615,349042,909,341 Less accumulated depreciation for: Buildings and structures1,531,41286,634 - 1,618,046 Improvements other than buildings6,074,208544,602 - 6,618,810 Machinery and equipment2,264,026141,246 - 2,405,272 Infrastructure11,948,577520,892 - 12,469,469 Total accumulated depreciation21,818,2231,293,374023,111,597 Total capital assets being depreciated - net20,475,769(678,025)019,797,744 Business-type activities capital assets - net$20,899,123($678,025)$0$20,104,221 Component unit: Capital assets, not being depreciated: Land$2,023,511$0$0$2,023,511 57 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government$180,310 Public safety250,516 Public works, including depreciation of general infrastructure assets1,310,518 Recreation and naturalist192,486 Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets127,789 Total depreciation expense - governmental activities$2,061,619 Business-type activities: Liquor$32,002 Water715,086 Sewer311,274 Storm water235,012 Total increases in accumulated depreciation$1,293,374 58 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 5. Long-Term Debt The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. The reporting entity’s long-term debt is segregated between the amounts to be repaid from governmental activities and amounts to be repaid from business-type activities. As of December 31, 2010, the governmental long-term bonded debt and loans of the financial reporting entity consisted of the following: Governmental Activities: $1,915,000 General Obligation Improvement Bonds, Series 2008A due in varying annual installments of $165,000 - $225,000 through February 1, 2019; interest at 2.95% - 4.0%.$1,750,000 $1,910,000 General Obligation Improvement Bonds, Series 2007A due in varying annual installments of $155,000 - $230,000 through August 1, 2018; interest at 3.5% - 3.85%.1,590,000 $1,215,000 General Obligation Improvement Bonds, Series 2010C due in varying annual installments of $55,000 - $135,000 through February 1, 2021; interest at 2.0% - 3.0%.1,215,000 $1,805,000 General Obligation Improvement Bonds of 2005 due in varying annual installments of $155,000 - $210,000 through February 1, 2016; interest at 2.80% - 3.750%.1,155,000 $2,505,000 General Obligation Improvement Bonds of 2006 due in varying annual installments of $205,000 - $305,000 through February 1, 2017; interest at 4.00%.1,860,000 $550,000 General Obligation Equipment Certificates, Series 2010B du in varying annual installments of $50,000 - $70,000 through February 1, 2020; interest at 2.0% - 3.0%550,000 Subtotal governmental activities$8,120,000 Business-Type Activities: $1,180,000 General Obligation Water Revenue Bonds of 1998, due in varying annual installments of $90,000 - $130,000 through February 1, 2011.130,000 $1,790,000 General Obligation Water Revenue Bonds of 2004 due in varying annual installments of $50,000 - $230,000 through February 1, 2019; interest at 2.5% - 4.00%.1,640,000 $1,005,000 General Obligation Water and Storm Water Revenue Bonds of 2004 due in varying annual installments of $160,000 - $235,000 through February 1, 2012; interest at 2.0% - 3.25%.310,000 $3,725,000 General Obligation Water Revenue Bonds of 2008B due in varying annual installments of $240,000 - $315,000 through February 1, 2023; interest at 2.95% - 4.50%.3,270,000 $2,810,000 General Obligation Utility Revenue Bonds of 2010A due in varying annual installments of $160,000 - $265,000 through February 1, 2026; interest at 2.50% - 3.50%2,810,000 Unamortized discount(2,241) Subtotal business-type activities8,157,759 Total primary government$16,277,759 59 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Annual debt service requirements to maturity for general obligation bonds and loans are as follows: Primary Government Governmental ActivitiesBusiness-Type Activities G.O. ImprovementG.O. Equipment CertificatesRevenue Bonds Year Ending December 31,PrincipalInterestPrincipalInterestPrincipalInterest 2011$800,000$258,135$ - $13,834$535,000$280,063 2012890,000 229,503 50,000 13,450 555,000 262,314 2013925,000 198,413 55,000 12,400 655,000 243,376 2014955,000 165,235 60,000 11,250 570,000 223,459 2015990,000 129,815 60,000 10,050 585,000 203,060 20161,030,000 92,090 60,000 8,700 610,000 181,610 2017855,000 56,360 65,000 6,975 625,000 159,191 2018570,000 29,503 65,000 5,025 655,000 135,623 2019355,000 12,450 65,000 3,075 680,000 110,748 2020135,000 3,975 70,000 1,050 465,000 89,585 202165,000 975 - - 490,000 72,080 2022 - - - - 505,000 53,688 2023 - - - - 530,000 34,125 2024 - - - - 225,000 20,281 2025 - - - - 235,000 12,513 2026 - - - - 240,000 4,200 Total$7,570,000$1,176,453$550,000$85,809$8,160,000$2,085,915 Long-term liability activity for the year ended December 31, 2010, was as follows: BeginningEndingDue Within BalanceAdditionsReductionsBalanceOne Year Governmental activities: Bonds payable: G.O. improvement bonds$7,080,000$1,215,000($725,000)$7,570,000$800,000 G.O. equipment certificates - 550,000550,000 - Tax increment bonds1,720,000(1,720,000) - - Total bonds payable7,080,0001,765,000(725,000)8,120,000800,000 Compensated absences975,540730,044(731,621)973,963799,284 Total government activity long-term debt$8,055,540$2,495,044($1,456,621)$9,093,963$1,599,284 Business-type activities: Bonds payable: G.O. revenue bonds$5,865,000$2,810,000($515,000)$8,160,000$535,000 Compensated absences are generally liquidated by the Employee Benefits Fund. All long-term bonded indebtedness outstanding at December 31, 2010 is backed by the full faith and credit of the City, including improvement and revenue bond issues. Delinquent assessments receivable at December 31, 2010 totaled $34,715. 60 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Revenues Pledged Revenue PledgedCurrent Year Percent ofDebt servicePrincipalPledged Use oftotalas a % ofTerm ofRemainingand InterestRevenue Bond IssueProceedsTypedebt servicenet revenuesPledgePrincipalpaidreceived 2010BCapital EquipmentProperty Taxes100%2011-$550,000$ - $ - 2020 2010CStreet ImprovementsProperty Taxes and100%2011-1,215,000 - - Special Assessments2021 2008AStreet ImprovementsProperty Taxes and100%2008-1,750,000233,988218,953 Special Assessments2019 2007AStreet ImprovementsProperty Taxes and100%2007-1,590,000226,796207,872 Special Assessments2018 2006AStreet ImprovementsProperty Taxes and100%2007-1,860,000303,900254,945 Special Assessments2017 2005AStreet ImprovementsProperty Taxes and100%2006-1,155,000213,215225,293 Special Assessments2016 Refunded bonds of 1998B 2004initial project was for Tax Increment100%2005- - 1,755,0631,755,063 land acquisition2012 Water, Sewer and 2010A Utility Revenue BondsInfrastructure improvementsStorm Customer100% - 2011-2,810,000 - - Net Revenue2026 2008B Water Revenue BondsInfrastructure improvementsWater Customer100%13.66%2008-3,270,000326,6352,390,836 Net Revenue2023 2004 Water Revenue BondsInfrastructure improvementsWater Customer100%4.60%2004-1,640,000109,8852,390,836 Net Revenue2019 2004 Water & Storm RevenueInfrastructure improvementsWater and Storm 100%5.57%2004-310,000156,6942,812,216 BondsCustomer Net Revenue2012 1998A Water Revenue BondsInfrastructure improvementsWater Customer100%5.61%1998-130,000134,1782,390,836 Net Revenue2011 6. Defined Benefit Pension Plans-Statewide A. Plan Description All full-time and certain part-time employees of the City of Fridley are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the General Employees Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF) which are cost-sharing, multiple-employer retirement plans. These plans are established and administered in accordance with Minnesota Statute, Chapters 353 and 356. 61 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership by statute are covered by the PEPFF. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by State Statute, and vest after three years of credited service. The defined retirement benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. PERA issues a publicly available financial report that includes financial statements and required supplementary information for GERF and PEPFF. That report may be obtained on the web at mnpera.org, by writing to PERA at 60 Empire Drive #200, St. Paul, Minnesota, 55103-2088 or by calling (651)296-7460 or 1-800-652-9026. B. Funding Policy Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. GERF Basic Plan members and Coordinated Plan members were required to contribute 9.10% and 6.0%, respectively, of their annual covered salary in 2010. PEPFF members were required to contribute 9.4% of their annual covered salary in 2010. The City of Fridley, Minnesota was required to contribute the following percentages of annual covered payroll in 2010: 11.78% for Basic Plan GERF members, 7.0% for Coordinated Plan GERF members, and 14.1% for PEPFF members. Employer contributions rates for the Coordinated Plan will increase to 7.25% and rates for PEPFF will increase to 14.4% effective January 1, 2011. The City’s contributions for the years ending December 31, 2010, 2009 and 2008 equal to the contractually required contributions for each year as set by state statute for GERF and PEPFF as follows: GERFPEPFF 2008$346,545$434,512 2009370,215499,795 2010387,554487,524 C. Public Employees Retirement Association (PERA) - Defined Contribution Plan Description All council members of the City of Fridley are covered by a defined contribution pension plan administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Defined Contribution Plan (PEDCP) which is a multiple- employer deferred compensation plan. Benefit Provisions and Contribution Rates The PEDCP is a tax qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal. 62 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Plan benefits depend solely on amounts contributed to the plan plus investment income, less administrative expenses. Minnesota Statutes, Chapter 353D.03, specifies plan provisions, including the employee and employer contribution rates for those qualified personnel who elect to participate. An eligible elected official who decides to participate contributes 5 percent of salary which is matched by the elected official's employer. For ambulance service personnel, employer contributions are determined by the employer, and for salaried employees must be a fixed percentage of salary. Employer contributions for volunteer personnel may be a unit value for each call or period of alert duty. Employees who are paid for their services may elect to make member contributions in an amount not to exceed the employer share. Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts of the Minnesota Supplemental Investment Fund.For administering the plan, PERA receives 2 percent of employer contributions and twenty-five hundredths of one percent of the assets in each member's account. Total contributions made by the City during fiscal year 2010 were: Percentage of AmountCovered PayrollRequired EmployeesEmployerEmployeesEmployerRates PEDCP$2,106$2,1065.00%5.00%5.00% 7. Defined Contribution Pension Plan - Fridley Volunteer Firefighters Relief Association Plan Description The Fridley Volunteer Firefighters Relief Association (Association), is a single employer public employee retirement system that acts as a common investment administrator for all of the City’s firefighters. Pursuant to a 1987 amendment to its by-laws, the pension plan is a defined contribution plan, prior to 1987 the pension plan was a defined benefit pension plan. Benefits and contribution requirements are established by Association’s by-laws and can be amended by the Association’s Board of Trustees with approval from the City of Fridley, Minnesota. All provisions are within limitations established by Minnesota Statutes. Type of Benefit The exclusive pension provided by the Association is a “Defined Contribution Lump Sum Service Pension,” as defined in Minnesota Statutes §424A.02, Subdivision 4. Contribution Made The City collected and remitted $106,278 and $104,427 in State Aid to the Association for 2010 and 2009, respectively. During 2010 and as of December 31, 2010, the Association held no securities issued by the City or other related parties. 63 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 8. Other Post-Employment Benefits A. Plan Description In addition to providing the pension benefits described in Note 6, the City provides post- employment health care benefits (as defined in paragraph B) for retired employees and police and firefighters disabled in the line of duty, through a single-employer defined benefit plan. The termPlan refers to the City’s requirement by State Statute to provide retirees with access to health insurance. The OPEB plan is administered by the City. The authority to provide these benefits is established in Minnesota Statutes Sections 471.61 Subd. 2a, and 299A.465. The benefits, benefit levels, employee contributions and employer contributions are governed by the City and can be amended by the City through its personnel manual and collective bargaining agreements with employee groups. The Plan is not accounted for as a trust fund, an irrevocable trust has not been established to account for the Plan. The Plan does not issue a separate report. B. Benefits Provided Retirees The City is required by State Statute to allow retirees to continue participation in the City’s group health insurance plan if the individual terminates service with the City through service retirement or disability retirement. Covered spouses may continue coverage after the retiree’s death. The surviving spouse of an active employee may continue coverage in the group health insurance plan after the employee’s death. All health care coverage is provided through the City’s group health insurance plans. The retiree is required to pay 100% of their premium cost for the City-sponsored group health insurance plan in which they participate. The premium is a blended rate determined on the entire active and retiree population. Since the projected claims costs for retirees exceed the blended premium paid by retirees, the retirees are receiving an implicit rate subsidy (benefit). The coverage levels are the same as those afforded to active employees. Upon a retiree reaching age 65 years of age, Medicare becomes the primary insurer. The monthly retiree premiums effective January 1, 2008 were: SingleMarried Plan 1 (medical and dental)$483$1,392 Plan 2 (medical and dental)3571,028 Plan 3 (medical and dental)327941 64 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 C. Participants As of the actuarial valuation dated July 2008, participants consisted of: Retired participants and beneficiaries currently receiving benefits9 Active employees85 Total94 Participating employers1 D. Funding Policy The additional cost of using a blended rate for actives and retirees is currently funded on a pay- as-you-go basis. The City Council may change the funding policy at any time. E. Annual OPEB Costs and Net OPEB Obligation The City’s annual other post employment benefit (OPEB) cost is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45.The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The net OPEB obligation as of December 31, 2010, was calculated as follows: Annual required contribution (ARC)$240,570 Interest on net OPEB obligation14,157 Adjustment to ARC(20,647) Annual OPEB cost234,080 Contributions made during the year(57,119) Increase in net OPEB obligation176,961 Net OPEB obligation - beginning of year353,923 Net OPEB obligation - end of year$530,884 65 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 The City first had an actuarial valuation performed for the Plan as of January 1, 2008 to determine the funded status of the Plan as of that date as well as the employer’s annual required contribution (ARC) for the fiscal year ended December 31, 2008. The City’s annual OPEB cost (expense) of $264,648 was equal to the ARC for the fiscal year, as the transition liability was set at zero as of December 31, 2007. The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan and the net OPEB obligation for 2008 to 2010 was as follows: Percentage of Fiscal YearAnnual OPEBEmployer Annual OPEB CostNet OPEB EndedCostContributionsContributedObligation December 31, 2008$264,648$51,48119.4%$213,167 December 31, 2009189,74248,98725.8%353,923 December 31, 2010234,08057,11924.4%530,884 F. Funded Status and Funding Progress The City currently has no assets that have been irrevocably deposited in a trust for future health benefits; therefore, the actuarial value of assets is zero. The funded status of the Plan was as follows: Unfunded ActuarialActuarialUAAL as a ActuarialActuarialAccruedAccruedFundedCoveredPercentage of ValuationValue of AssetsLiability (AAL)*Liability (UAAL)RatioPayrollCovered Payrol Date(a)(b)(b-a)(a/b)(c) ( (b-a) / c) January 1, 2008$ - $1,910,670$1,910,6700.0%$9,303,57620.5% *Using the projected unit credit actuarial cost method. Note, the first OPEB actuarial valuation was conducted as of January 1, 2008. There is no data available prior to the first valuation. G. Actuarial Methods and Assumptions Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality and the health care cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions (ARC) of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to financial statements, presents multi-year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. 66 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effect of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the January 1, 2008 actuarial valuation, the Projected Unit Credit Actuarial cost method was used. The actuarial assumptions included a 4.0% investment rate of return (net of administrative expenses) and an initial annual health care cost trend rate of 10% reduced by 0.5% each year to arrive at an ultimate health care cost trend rate of 5.0%. The actuarial value of assets was $0. The plan’s unfunded actuarial accrued liability is being amortized using the level percentage of projected payroll method over 30 years on a closed basis. The remaining amortization period at December 31, 2010, was 27 years. 9. Interfund Receivables, Payables and Transfers Interfund payables and receivables are representative of lending/borrowing arrangements to cover deficit cash balances at the end of the fiscal year. Interfund receivables and payables of the City are as follows: InterfundInterfund ReceivablesPayables Due From/Due To: Major Funds: General Fund$132,081$ - Nonmajor Governmental Funds: Special Revenue Funds: Police Activity Fund - 70,517 HRA Reimbursement Fund - 14,946 Solid Waste Abatement Fund - 46,618 $132,081$132,081 67 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Interfund receivables and payables of the HRA component unit at December 31, 2010 are as follows: InterfundInterfund ReceivablesPayables Due From/Due To: General Fund$5,025,825$ - Capital Projects Funds: Lake Pointe - 685,303 Gateway East - 824,653 Gateway West - 1,519,109 University / Osborne - 107,000 57th Avenue Redevelopment - 128,760 McGlynn Bakeries - 104,000 Satellite Lane Apts. - 162,000 Tax Increment District #19 - 45,000 Gateway Northeast - 1,450,000 $5,025,825$5,025,825 The above balances are not expected to be eliminated within one year of December 31, 2010. Interfund Transfers: Transfer InTransfer Out Governmental Funds: Major Funds: General Fund$600,000$ - Special Assessment Debt Service - 285,467 Capital Improvements - 600,000 Special Assessment Construction Capital Projects600,000 - Nonmajor Funds35,467 - Total governmental funds1,235,467885,467 Proprietary Funds: Liquor - 350,000 Total$1,235,467$1,235,467 Interfund transfers allow the City to allocate financial resources to the funds that receive benefit from services provided by another fund. Most of the City’s interfund transfers fall under that category. 68 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 10. Reserved Fund Balances The following reservations have been made of various fund balances of the primary government at December 31, 2010: General Fund: Reserved for: Inventory$59,755 Debt Service Funds: Reserved for debt service2,066,732 Total Governmental Funds$2,126,487 The HRA component unit had reserved fund balances at December 31, 2010: Reserved for: Mortgage receivable$1,118,147 $1,118,147 69 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 11. Designated Fund Balance The following designations have been made of various fund balances at December 31, 2010: General Fund: Working capital$5,725,464 Special Revenue Funds: Cable TV Fund: Cable TV operations1,265,256 Solid Waste Abatement fund: Recycling operations17,043 Drug and Gambling Forfeiture Fund: Drug and gambling enforcement25,573 Spring Brook Nature Fund: Nature Center87,573 F.C.C. Donations: Fridley community center68,758 Total Special Revenue Funds1,464,203 Capital Projects Funds: Capital Improvements Fund: Future improvements5,256,385 Total of designated fund balances$12,446,052 70 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 12. Tax Increment Districts The HRA is the administering authority for the following Tax Increment Districts: FiscalRetained YearTax Capacity ValuesDisparityBy EstablishedDistrictDistrict NameCurrentOriginalCapturedAdjustmentsAuthority 19856Lake Pointe1,026,708 83,780942,928 - 942,928 19867Winfield70,648 3,58267,066 - 67,066 19899Onan/Old Central Avenue439,747 42,722397,025 - 397,025 199211University/Osborne96,898 26,47870,420 - 70,420 199212McGlynn's83,364 41,25442,110 - 42,110 199513Satellite Lane Apartments50,467 2,33448,133 - 48,133 19971657th Avenue Replacement33,334 7,30126,033 - 26,033 200017Gateway East45,171 5,04240,129 - 40,129 200718Gateway West14,824 4,25810,566 - 10,566 1995HR1/05Housing Replacement2,361 2702,091 - 2,091 1995HR1/06Housing Replacement5,887 6865,201 - 5,201 1995HR1/Q2Housing Replacement2,208 3181,890 - 1,890 1995HR1/Q3Housing Replacement1,966 3931,573 - 1,573 1995HR1/Q4Housing Replacement6,184 7815,403 - 5,403 1995HR1/S3Housing Replacement2,425 5161,909 - 1,909 1995HR1/S4Housing Replacement2,506 5631,943 - 1,943 1995HR1/S5Housing Replacement1,881 3751,506 - 1,506 1995HR1/S6Housing Replacement1,894 4431,451 - 1,451 1995HR1/T7Housing Replacement2,058 6401,418 - 1,418 8199,844 45,628154,216 - 154,216 Totals2,090,375 267,3641,823,011-1,823,011 13. Commitments and Contingencies A. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. During 1987, the City established the Self Insurance Fund (an Internal Service Fund) to account for and finance its uninsured risks of loss. Workers compensation coverage is provided through a pooled self-insurance program through the League of Minnesota Cities Insurance Trust (LMCIT). The City pays an annual premium to the LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through Workers Compensation Reinsurance Association (WCRA) as required by law. For workers compensation, the City is subject to a $500 deductible. Property and casualty insurance coverage is provided through a pooled self-insurance program through LMCIT. The City pays an annual premium to the LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through commercial companies for claims in excess of various amounts. For property (other than vehicles for which the City is self-insured) and casualty coverage, the City has a $50,000 deductible per occurrence with a $100,000 annual maximum. This deductible gets paid out of the Self-Insurance Fund as necessary. 71 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 The City continues to carry commercial insurance for all other risks of loss, including employee health and disability insurance. There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years. In 1990, the General Fund contributed $1,000,000 to the Self Insurance Fund in lieu of the Self Insurance Fund charging losses back to each fund. There is no recorded liability for unpaid claims because the amount of such claims, if any, is considered to be immaterial. As of December 31, 2010, the Self Insurance Fund has accumulated equity in the amount of $1,528,206 to cover future claims and losses. B. Litigation The City attorney has indicated that existing and pending lawsuits, claims and other actions in which the City is a defendant are either covered by insurance; of an immaterial amount; or, in the judgment of the City attorney, remotely recoverable by plaintiffs. C. Federal and State Funds The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and are subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31, 2010. D. Tax Increment Districts The City’s tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they are not aware of any instances of noncompliance which would have a material effect on the financial statements. 72 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 E. Contingent Liability The HRA entered into various limited tax increment revenue notes with developers whereby the HRA shall pay the developers the lesser of the scheduled payment or available tax increment. Whether a payment will occur, and if so, the amount of the payment(s) are uncertain since all payments are dependent on the HRA receiving tax increments from the developer’s project. As such, this liability has not been recorded in the financial statements. The HRA has issued various Tax Increment Revenue Notes. These notes are not a general obligation of the HRA and are payable solely from available tax increments. Accordingly, these notes are not reflected in the financial statements of the HRA. A schedule of outstanding notes at December 31, 2010 is as follows: Original InterestMaturity NotePrincipalRateDate Medtronic$10,000,0006.75%August 1, 2025 Linn175,0008.50%February 1, 2012 TIF #191,500,0007.00%February 1, 2025 F. Construction Commitments At December 31, 2010, the City had construction project contracts in progress. The commitments related to the remaining contract balances amounted to approximately $18,000. 14. Leases A. Lease Expense The City leases space for one of its liquor stores. Total costs for this lease was $119,422 for the year ended December 31, 2010. The future minimum lease payments for this lease are as follows: Year Ending December 31,Amount 2011$109,981 2012109,981 2013109,981 201491,650 Total$421,593 73 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 B. Lease Revenue The City receives revenue from agreements for the lease of space above its water towers to communication companies. The space is used for antennas and other equipment necessary to provide radio communications. For accounting purposes, the leases are considered operating leases. Lease revenue for the year ended December 31, 2010, totaled $216,854. Terms of each lease are as follows: Annual Lease AdjustmentExpirationRenewal LesseeFactor*DateOptions T-Mobile-CommonsGreater of 2% or CPI up to 5%07/01/154 Five Year Renewals T-Mobile Highway 65Greater of 3% or CPI12/31/112 Five Year Renewals T-Mobile - Marion HillsGreater of 2% or CPI up to 5%09/01/124 Five Year Renewals AT&T - GarageGreater of 5% or CPI12/01/133 Five Year Renewals AT&T - Marion HillsGreater of 5% or CPI06/30/153 Five Year Renewals Sprint - Highway 65Greater of 5% or CPI09/30/153 Five Year Renewals Crown Castle - Well #13Greater of 5% or CPI09/30/132 Five Year Renewals ClearWire Legacy-Marion HillsGreater of 4% or CPI08/01/154 Five Year Renewals ClearWire Legacy-Hwy65Greater of 4% or CPI08/01/154 Five Year Renewals ClearWire Legacy-CommonsGreater of 4% or CPI06/05/154 Five Year Renewals 15. Conduit Debt Obligation From time to time, the City has issued Industrial Revenue Bonds to provide financial assistance to private-sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private-sector entity served by the bond issuance. Neither the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2010, there were 30 series of Industrial Revenue Bonds issued. The aggregate principal amount payable for the eight series issued after July 1, 1995 is $14,381,346. The aggregate principal amount payable for the twenty-two series issued prior to July 1, 1995, could not be determined; however, their original issue amounts totaled $65.2 million. 74 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 16. Deficit Fund Balances At December 31, 2010, individual funds with a deficit fund balance are as follows: Primary government: Non major Special Revenue Fund: Police Activity$56,803 Component unit: Lake Pointe556,093 Gateway East734,734 Gateway West1,505,633 57th Avenue Redevelopment122,112 TIF #1918,138 McGlynn Bakeries20,019 Satellite Lane Apartments51,201 Gateway NorthEast1,002,836 17. Contingent Receivable In 1999, the HRA entered into an agreement with Medtronic for the sale of land from the HRA to Medtronic. The original principal amount of the receivable was $5,000,000. Interest is added quarterly at a rate of 8.25%. Payments on the note receivable are made in an amount equal to 11.11% of tax increment note payments received by Medtronic through 2012, and 22.22% of tax increment note payments receivable from 2012 through 2026. 18. Recently Issued Accounting Standards The Governmental Accounting Standards Boards (GASB) recently approved the following statements which were not implemented for these financial statements: Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions. The provisions of this Statement are effective for financial statements for periods beginning after June 15, 2010. The effect these standards may have on future financial statements is not determinable at this time. 75 CITY OF FRIDLEY 76 REQUIRED SUPPLEMENTARY INFORMATION 77 Exhibit B-1 Page 1 of 4 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2010 With comparative actual amounts for the year ended December 31, 2009 2010 Variance with Final Budget - 2009 ActualPositiveActual Budgeted Amounts OriginalFinalAmounts(Negative)Amounts Revenues: Taxes and special assessments: Current ad valorem taxes$9,101,421$8,675,181$9,034,099$358,918$8,002,893 Delinquent ad valorem taxes85,00085,000143,95958,95978,414 Penalties and interest8,5008,50019,66711,16731,773 Special assessments23,00023,00051,63228,63251,675 Total taxes and special assessments9,217,9218,791,6819,249,357457,6768,164,755 Licenses and permits: Licenses: Rental104,230104,230125,16320,93397,088 Business65,80065,80093,15127,35186,970 All other29,50029,50029,175(325)28,635 Permits348,700348,700498,412149,712528,350 Total licenses and permits548,230548,230745,901197,671741,043 Intergovernmental revenue: Federal grants7,00028,68740,12811,44146,865 State maintenance aid210,000210,000217,9737,973211,502 State credits - 426,24017,343(408,897)361,640 Local government aid759,414759,414759,414 - 974,898 Other state grants - - 6,9766,97617,962 Police and fire pension417,282430,905398,474(32,431)420,069 Total intergovernmental revenue1,393,6961,855,2461,440,308(414,938)2,032,936 Charges for services: General government1,121,8001,121,8001,191,98170,1811,185,541 Public safety181,900192,690243,40850,718242,276 Public works47,00047,00024,019(22,981)17,804 Community development8,9078,90721,49512,5888,978 Recreation262,000262,000215,224(46,776)219,878 Total charges for services1,621,6071,632,3971,696,12763,7301,674,477 Fines and forfeits270,000270,000182,044(87,956)217,464 Investment income90,00090,00045,319(44,681)18,501 Miscellaneous revenue: Insurance and other reimbursements64,50064,50057,095(7,405)53,090 Gambling tax65,00065,00050,447(14,553)61,626 Donations - 9,90016,0616,16115,422 Miscellaneous45,00045,11511,783(33,332)25,744 Total miscellaneous revenue174,500184,515135,386(49,129)155,882 Total revenues13,315,954 13,372,069 13,494,442 122,373 13,005,058 78 Exhibit B-1 Page 2 of 4 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2010 With comparative actual amounts for the year ended December 31, 2009 2010 Variance with Final Budget - 2009 Budgeted AmountsActualPositiveActual OriginalFinalAmounts(Negative)Amounts Expenditures: General government: Mayor and council: Personal services$89,380$89,380$88,005$1,375$85,287 Supplies and other charges29,99029,99027,4172,57327,028 Total mayor and council119,370119,370115,4223,948112,315 City manager: Personal services221,590225,792225,792 - 225,373 Supplies and other charges60,88056,67849,6267,05250,365 Total City manager282,470282,470275,4187,052275,738 Human resources: Personal services190,441191,604191,604 - 190,914 Supplies and other charges15,82814,6659,0825,58316,777 Total human resources206,269206,269200,6865,583207,691 Legal: Supplies and other charges377,400377,400368,8468,554351,179 Elections: Personal services4,6574,6572,0362,621438 Supplies and other charges49,04649,04638,69710,34912,966 Total elections53,70353,70340,73312,97013,404 Accounting: Personal services607,624607,624560,90946,715610,135 Supplies and other charges69,53069,53067,8531,67760,036 Total accounting677,154677,154628,76248,392670,171 Assessing: Personal services202,680202,680187,64115,039196,752 Supplies and other charges6,0286,0284,6331,3955,711 Total assessing208,708208,708192,27416,434202,463 MIS: Personal services202,696202,696201,1801,516196,342 Supplies and other charges27,25327,25319,7857,46820,462 Total MIS229,949229,949220,9658,984216,804 City clerk/records: Personal services147,993147,993140,6747,319142,309 Supplies and other charges19,35919,35917,0022,3577,363 Total City clerk/records167,352167,352157,6769,676149,672 Nondepartmental: Personal services10,00022,08722,087 - 13,448 Supplies and other charges25,10025,10021,2323,86817,501 Total nondepartmental35,10047,18743,3193,86830,949 79 Exhibit B-1 Page 3 of 4 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2010 With comparative actual amounts for the year ended December 31, 2009 2010 Variance with Final Budget - 2009 Budgeted AmountsActualPositiveActual OriginalFinalAmounts(Negative)Amounts Expenditures: (continued) General government: (continued) Municipal center: Personal services$37,744$37,744$24,308$13,436$33,661 Supplies and other charges242,690242,690185,92356,767193,537 Total municipal center280,434280,434210,23170,203227,198 Total general government2,637,9092,649,9962,454,332195,6642,457,584 Public safety: Police: Personal services4,294,9244,363,4174,363,417 - 4,514,396 Supplies and other charges464,642484,730484,730 - 460,093 Total police4,759,5664,848,1474,848,14704,974,489 Fire: Personal services1,109,6321,120,6951,120,695 - 1,129,938 Supplies and other charges184,324177,141156,39320,748144,776 Total fire1,293,9561,297,8361,277,08820,7481,274,714 Rental inspections: Personal services132,637132,63786,12046,51778,320 Supplies and other charges12,57212,5726,8805,6927,227 Total rental inspections145,209145,20993,00052,20985,547 Civil defense: Supplies and other charges21,96523,26616,1857,08112,939 Total public safety6,220,6966,314,4586,234,42080,0386,347,689 Public works: Engineering: Personal services462,763462,763459,8422,921466,657 Supplies and other charges55,20655,20644,11411,09266,033 Total engineering517,969517,969503,95614,013532,690 Public works and parks: Personal services1,681,5491,681,5491,651,90129,6481,681,213 Supplies and other charges1,026,8971,026,897867,685159,212865,194 Total public works and parks2,708,4462,708,4462,519,586188,8602,546,407 Total public works3,226,4153,226,4153,023,542202,8733,079,097 Community development: Building inspection: Personal services241,440245,532245,532 - 241,253 Supplies and other charges69,37565,28357,7477,53664,761 Total building inspection310,815310,815303,2797,536306,014 80 Exhibit B-1 Page 4 of 4 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2010 With comparative actual amounts for the year ended December 31, 2009 2010 Variance with Final Budget - 2009 Budgeted AmountsActualPositiveActual OriginalFinalAmounts(Negative)Amounts Expenditures: (continued) Community development: (continued) Planning: Personal services$372,343$378,449$378,449$ - $378,565 Supplies and other charges66,25060,14446,63313,51145,497 Total planning438,593438,593425,08213,511424,062 Total community development749,408749,408728,36121,047730,076 Parks and recreation: Personal services656,955656,955582,16774,788597,278 Supplies and other charges289,097294,297226,27868,019235,239 Total parks and recreation946,052951,252808,445142,807832,517 Contingency: Current: Supplies and other charges105,00050,066 - 50,066 - Capital outlay: Public safety81,75581,75574,5957,160109,315 Public works160,000222,566208,55614,010162,494 Total capital outlay241,755304,321283,15121,170271,809 Total expenditures14,127,23514,245,91613,532,251713,66513,718,772 Excess (deficiency) of revenues over (under) expenditures(811,281)(873,847)(37,809)836,038(713,714) Other financing sources (uses): Bonds issued - 550,000550,000 - - Bond premiums and issuance costs - net - - (3,388)(3,388) - Proceeds from sale of capital assets - - 16,50016,50036,845 Transfers in600,000600,000600,000 - 750,000 Total other financing sources (uses)600,0001,150,0001,163,11213,112786,845 Net change in fund balance($211,281)$276,1531,125,303$849,15073,131 Fund balance - January 14,659,9164,586,785 Fund balance - December 31$5,785,219$4,659,916 81 Exhibit B-2 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GRANT MANAGEMENT FUND For The Year Ended December 31, 2010 With comparative actual amounts for the year ended December 31, 2009 2010 Variance with Final Budget - 2009 Budgeted AmountsActualPositiveActual OriginalFinalAmounts(Negative)Amounts Revenues: Intergovernmental: Federal grants$116,812$118,965$118,965$ - $159,282 State Grants120,161120,161 - 5,650 Miscellaneous revenue: Donations - - 48 Total revenues116,812 239,126 239,126 0 164,980 Expenditures: Current: Community development: Personal services105,449141,233141,233 - 107,763 Supplies and other charges11,36397,89397,893 - 57,217 Total expenditures116,812 239,126 239,126 0 164,980 Excess (deficiency) of revenues over (under) expenditures$0$00$00 Fund balance - January 1 - - Fund balance - December 31$0$0 82 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE NOTE TO RSI December 31, 2010 A. BUDGETS The General Fund and Grant Management Fund budgets are legally adopted on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control is at the expenditure category level. 83 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF FUNDING PROGRESS - RETIREE HEALTH PLAN For The Year Ended December 31, 2010 Unfunded ActuarialActuarialUAAL as a ActuarialActuarialAccruedAccruedFundedCoveredPercentage of ValuationValue of AssetsLiability (AAL)*Liability (UAAL)RatioPayrollCovered Payroll Date(a)(b)(b-a)(a/b)(c) ( (b-a) / c) January 1, 2008$ - $1,910,670$1,910,6700.0%$9,303,57620.5% *Using the projected unit credit actuarial cost method. Note, the first OPEB actuarial valuation was conducted as of January 1, 2008. There is no data available prior to the first valuation. 84 COMBINED, COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 85 NONMAJOR GOVERNMENTAL FUNDS 86 SPECIAL REVENUE FUNDS A Special Revenue Fund accounts for revenues derived from specific taxes or other earmarked revenue sources. They are usually required by statute or local ordinance and/or resolution to finance particular functions, activities or governments. 87 Exhibit C-1 CITY OF FRIDLEY, MINNESOTA COMBINED BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2010 With comparative amounts for December 31, 2009 Nonmajor Special Revenue 20102009 Assets Cash and investments$1,399,127$1,300,624 Receivables: Accounts109,869107,037 Taxes11,36811,696 Due from component unit15,02340,117 Due from other governments57,90591,494 Total assets$1,593,292$1,550,968 Liabilities and Fund Balance Liabilities: Accounts payable$26,766$52,432 Due to other governments88624 Due to other funds132,081142,035 Salaries payable18,34117,053 Deferred revenue8,6169,177 Total liabilities185,892221,321 Fund balance: Unreserved: Designated1,464,2031,357,889 Undesignated(56,803)(28,242) Total fund balance1,407,4001,329,647 Total liabilities and fund balance$1,593,292$1,550,968 88 Exhibit C-2 CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For The Year Ended December 31, 2010 With comparative amounts for the year ended December 31, 2009 Nonmajor Special Revenue 20102009 Revenues: Taxes$313,852$299,728 Licenses and permits228,084224,320 Intergovernmental revenue70,942113,281 Charges for services376,643343,651 Fines and forfeits58,83637,550 Investment income11,4334,770 Miscellaneous67,456109,327 Total revenues1,127,246 1,132,627 Expenditures: Current: General government542,986594,692 Public safety94,93499,023 Parks, recreation and naturalist432,399382,426 Capital outlay14,64145,327 Total expenditures1,084,9601,121,468 Excess (deficiency) of revenues over (under) expenditures42,286 11,159 Other financing sources (uses): Transfers in35,46733,972 Total other financing sources (uses)35,467 33,972 Net change in fund balance77,753 45,131 Fund balance - January 11,329,6471,284,516 Fund balance - December 31$1,407,400$1,329,647 89 CITY OF FRIDLEY 90 NONMAJOR SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for revenues derived from specific taxes or other earmarked revenue sources.They are usually required by statute, charter provision or local ordinance to finance particular governmental functions or activities. Cable TV Fund - This fund receives revenues from the issuance of a franchise agreement with the cable TV provider. These revenues are used for the operation and maintenance of a government access channel. Solid Waste Abatement Fund - This fund receives grants, recycling fees and yard waste fees. These revenues finance the City’s curbside recycling pickup and operation of the yard waste transfer site. HRA Reimbursement Fund - This fund receives revenues from the Housing and Redevelopment Authority. These revenues are used to reimburse the City for professional services provided by City staff for HRA related activities. Drug and Gambling Forfeiture Fund - This fund receives forfeited property in connection with illegal gambling or drug activity. Pursuant to Minnesota Statutes, the proceeds are disbursed between the investigating agency and the prosecuting agency. F.C.C. Donations Fund - This fund is used to account for donations received and used in improving and furnishing the Fridley Community Center. Police Activity Fund - This fund is used to track the revenue and expenditures of externally funded police positions. Springbrook Nature Center Fund - This fund was established in 2005 after a $275,000 referendum supporting the Springbrook Nature Center was approved by the voters in November of 2004.The revenues from the annual levy are used for the on-going operation of the nature center and the capital improvement projects required in the park. 91 CITY OF FRIDLEY, MINNESOTA COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS December 31, 2010 With comparative totals for December 31, 2009 Solid Waste AssetsCable TVAbatement Cash and investments$1,210,299$ - Receivables: Accounts57,89551,080 Taxes - - Due from component unit - - Due from other governments -38,785 Total assets$1,268,194$89,865 Liabilities and Fund Balance Liabilities: Accounts payable$87$23,761 Due to other governments - - Due to other funds - 46,618 Salaries payable2,8512,443 Deferred revenue - - Total liabilities2,93872,822 Fund balance: Unreserved: Designated for special revenue programs1,265,25617,043 Undesignated - - Total fund balance1,265,25617,043 Total liabilities and fund balance$1,268,194$89,865 92 Exhibit C-3 Drug and Springbrook HRAGamblingF.C.C.Nature Center Totals Nonmajor Special ReimbursementForfeitureDonationsPolice ActivityFund Revenue Funds 20102009 $ - $24,549$68,758$ - $95,521$1,399,127$1,300,624 - 894 - - - 109,869107,037 - - - - 11,36811,36811,696 15,023 - - - - 15,02340,117 - 130 - 16,3122,67857,90591,494 $15,023$25,573$68,758$16,312$109,567$1,593,292$1,550,968 $64$ - $ - $ - $2,854$26,766$52,432 13 - - - 7588624 14,946 - - 70,517 - 132,081142,035 - - - 2,59810,44918,34117,053 - - - - 8,6168,6169,177 15,0230073,11521,994185,892221,321 - 25,57368,758 - 87,5731,464,2031,357,889 - - - (56,803) - (56,803)(28,242) 025,57368,758(56,803)87,5731,407,4001,329,647 $15,023$25,573$68,758$16,312$109,567$1,593,292$1,550,968 93 CITY OF FRIDLEY, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31, 2010 With comparative totals for the year ended December 31, 2009 Solid Waste Cable TVAbatement Revenues: Taxes$ -$ - Licenses and permits228,084 - Intergovernmental revenue - 48,441 Charges for services700277,074 Fines and forfeits - - Investment income10,910 - Miscellaneous6625,540 Total revenues239,760351,055 Expenditures: Current: General government142,436382,922 Public safety - - Parks, recreation and naturalist - - Capital outlay - - Total expenditures142,436382,922 Excess (deficiency) of revenues over (under) expenditures97,324(31,867) Other financing sources (uses): Transfers in - 35,467 Total other financing sources (uses)035,467 Net change in fund balance97,3243,600 Fund balance - January 11,167,93213,443 Fund balance - December 31$1,265,256$17,043 94 Exhibit C-4 Drug and Springbrook HRAGamblingF.C.C.Nature Center Totals Nonmajor Special ReimbursementForfeitureDonationsPolice ActivityFund Revenue Funds 20102009 $ - $ - $ - $ - $313,852$313,852$299,728 - - - - - 228,084224,320 17,224 - - 5,277 - 70,942113,281 - - - - 98,869376,643343,651 - 23,941 - 34,895 - 58,83637,550 - - 765(516)27411,4334,770 - - - - 41,85067,456109,327 17,22423,94176539,656454,8451,127,2461,132,627 17,224 - 404 - - 542,986594,692 - 26,717 - 68,217 - 94,93499,023 - - - - 432,399432,399382,426 - - 14,641 - - 14,64145,327 17,22426,71715,04568,217432,3991,084,9601,121,468 0(2,776)(14,280)(28,561)22,44642,28611,159 - - - - - 35,46733,972 0000035,46733,972 0(2,776)(14,280)(28,561)22,44677,75345,131 - 28,34983,038(28,242)65,1271,329,6471,284,516 $0$25,573$68,758($56,803)$87,573$1,407,400$1,329,647 95 Exhibit D-1 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - CABLE TV FUND COMPARATIVE BALANCE SHEET December 31, 2010 and 2009 Assets 20102009 Cash and investments$1,210,299$1,114,310 Accounts receivable57,89556,212 Total assets$1,268,194$1,170,522 Liabilities and Fund Balance Liabilities: Accounts payable$87$91 Salaries payable2,8512,499 Total liabilities2,9382,590 Fund balance: Unreserved: Designated for special revenue programs1,265,2561,167,932 Total liabilities and fund balance$1,268,194$1,170,522 96 Exhibit D-2 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - CABLE TV FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2010 With comparative actual amounts for the year ended December 31, 2009 20102009 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Licenses - franchise fee$230,000$230,000$228,084$224,320 Charges for services800800700700 Investment income30,00030,00010,9104,470 Miscellaneous2002006677 Total revenues261,000 261,000 239,760 229,567 Expenditures: Current: General government: Personal services136,490136,490135,182131,877 Supplies and other charges9,8449,8447,2549,851 Capital outlay - - - 8,280 Total expenditures146,334 146,334 142,436 150,008 Excess of revenues over expenditures$114,666$114,66697,32479,559 Fund balance - January 11,167,9321,088,373 Fund balance - December 31$1,265,256$1,167,932 97 Exhibit D-3 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - SOLID WASTE ABATEMENT FUND COMPARATIVE BALANCE SHEET December 31, 2010 and 2009 Assets 20102009 Accounts receivable$51,080$50,825 Due from other governments38,78563,700 Total assets$89,865$114,525 Liabilities and Fund Balance Liabilities: Accounts payable$23,761$47,929 Salaries payable2,4432,357 Due to other governments -9 Due to other funds46,61850,787 Total liabilities72,822101,082 Fund balance: Unreserved: Designated for special revenue programs17,04313,443 Total fund balance17,04313,443 Total liabilities and fund balance$89,865$114,525 98 Exhibit D-4 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - SOLID WASTE ABATEMENT FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2010 With comparative actual amounts for the year ended December 31, 2009 20102009 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Intergovernmental revenue: State$65,000$65,000$48,441$63,700 Charges for services316,524316,524277,074257,759 Miscellaneous10,00010,00025,54077,999 Total revenues391,524 391,524 351,055 399,458 Expenditures: Current: General government: Personal services70,31270,31259,01469,262 Supplies and other charges356,679356,679323,908353,515 Total expenditures426,991 426,991 382,922 422,777 Excess (deficiency) of revenues over (under) expenditures(35,467)(35,467)(31,867)(23,319) Other financing sources: Transfers in35,46735,46735,46733,972 Net change in fund balance$0$03,60010,653 Fund balance (deficit) - January 113,4432,790 Fund balance - December 31$17,043$13,443 99 Exhibit D-5 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - HRA REIMBURSEMENT FUND COMPARATIVE BALANCE SHEET December 31, 2010 and 2009 Assets 20102009 Due from component unit$15,023$40,117 Total assets$15,023$40,117 Liabilities and Fund Balance Liabilities: Accounts payable$64$ - Due to other governments1319 Due to other funds14,94640,098 Total liabilities15,02340,117 Fund balance - - Total liabilities and fund balance$15,023$40,117 100 Exhibit D-6 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - HRA REIMBURSEMENT FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2010 With comparative actual amounts for the year ended December 31, 2009 20102009 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Intergovernmental revenue: Housing and Redevelopment Authority$ - $17,224$17,224$26,805 Expenditures: Current: General government: Supplies and other charges - 17,22417,22426,805 Excess (deficiency) of revenues over (under) expenditures$0$000 Fund balance - January 1 - - Fund balance - December 31$0$0 101 Exhibit D-7 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - DRUG AND GAMBLING FORFEITURE FUND COMPARATIVE BALANCE SHEET December 31, 2010 and 2009 Assets 20102009 Cash and investments$24,549$28,349 Due from other governments130 - Accounts receivable894 - Total assets$25,573$28,349 Liabilities and Fund Balance Liabilities$ - $ - Fund balance: Unreserved: Designated for special revenue programs25,57328,349 Total liabilities and fund balance$25,573$28,349 102 Exhibit D-8 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - DRUG AND GAMBLING FORFEITURE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2010 With comparative actual amounts for the year ended December 31, 2009 20102009 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Fines and forfeits$ - $26,717$23,941$23,382 Expenditures: Current: Public safety Supplies and other charges - 26,71726,7178,329 Capital outlay - - - 7,047 Total expenditures026,71726,71715,376 Excess (deficiency) of revenues over (under) expenditures$0$0(2,776)8,006 Fund balance - January 128,34920,343 Fund balance - December 31$25,573$28,349 103 Exhibit D-9 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - F.C.C. DONATIONS FUND COMPARATIVE BALANCE SHEET December 31, 2010 and 2009 Assets 20102009 Cash and investments$68,758$83,038 Total assets$68,758$83,038 Liabilities and Fund Balance Liabilities$ - $ - Fund balance: Unreserved: Designated for special revenue programs68,75883,038 Total liabilities and fund balance$68,758$83,038 104 Exhibit D-10 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - F.C.C. DONATIONS FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2010 With comparative actual amounts for the year ended December 31, 2009 20102009 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Investment income$ - $765$765$350 Expenditures: Current: General government: Supplies and other charges - 4044043,382 Capital outlay - 14,64114,641 - Total expenditures015,04515,0453,382 Excess (deficiency) of revenues over (under) expenditures$0($14,280)(14,280)(3,032) Fund balance - January 183,03886,070 Fund balance - December 31$68,758$83,038 105 Exhibit D-11 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - POLICE ACTIVITY FUND COMPARATIVE BALANCE SHEET December 31, 2010 and 2009 Assets 20102009 Due from other governments$16,312$25,794 Total assets$16,312$25,794 Liabilities and Fund Balance Liabilities: Salaries payable$2,598$2,886 Due to other funds70,51751,150 Total liabilities73,11554,036 Fund balance: Undesignated(56,803)(28,242) Total liabilities and fund balance$16,312$25,794 106 Exhibit D-12 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - POLICE ACTIVITY FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2010 With comparative actual amounts for the year ended December 31, 2009 20102009 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Intergovernmental$ - $ - $5,277$22,776 Investment income - - (516)(82) Fines and forfeits - - 34,89514,168 Total revenues0039,65636,862 Expenditures87,93889,93868,21790,694 Excess (deficiency) of revenues over (under) expenditures($87,938)($89,938)(28,561)(53,832) Fund balance - January 1(28,242)25,590 Fund balance (deficit) - December 31($56,803)($28,242) 107 Exhibit D-13 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - SPRINGBROOK NATURE CENTER FUND COMPARATIVE BALANCE SHEET December 31, 2010 and 2009 Assets 20102009 Cash and investments$95,521$74,927 Receivables: Taxes11,36811,696 Due from other governments2,6782,000 Total assets$109,567$88,623 Liabilities and Fund Balance Liabilities: Accounts payable$2,854$4,412 Salaries payable10,4499,311 Due to other governments75596 Deferred revenue8,6169,177 Total liabilities21,99423,496 Fund balance: Unreserved: Designated for special revenue programs87,57365,127 Total liabilities and fund balance$109,567$88,623 108 Exhibit D-14 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - SPRINGBROOK NATURE CENTER FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2010 With comparative actual amounts for the year ended December 31, 2009 20102009 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Taxes$314,400$314,400$313,852$299,728 Charges for service83,70091,50998,86985,192 Investment income - - 27432 Miscellaneous4,00045,72541,85031,251 Total revenues402,100451,634454,845416,203 Expenditures: Current: Parks, recreation and naturalist Personal services316,924326,202326,201321,508 Supplies and other charges65,943106,199106,19860,918 Capital outlay - - - 30,000 Total expenditures382,867 432,401 432,399 412,426 Excess (deficiency) of revenues over (under) expenditures$19,233$19,23322,4463,777 Fund balance - January 165,12761,350 Fund balance - December 31$87,573$65,127 109 CITY OF FRIDLEY 110 CAPITAL PROJECT FUND The Capital Project Fund is used to account for the resources expended to acquire permanent or long-term assets. This fund is established to provide special accounting for bond proceeds, grants and contributions designated for the acquisition of capital assets. 111 Exhibit E-1 CITY OF FRIDLEY, MINNESOTA CAPITAL PROJECT FUND - CAPITAL IMPROVEMENT FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2010 With comparative actual amounts for the year ended December 31, 2009 20102009 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Taxes$ - $ - $272$1,053 Intergovernmental revenue: State520,750526,6591,296,42514,909 Investment income168,128168,12851,35721,620 Miscellaneous10,00010,00035,0671,500 Total revenues698,878 704,787 1,383,121 39,082 Expenditures: Current: General government: Supplies and other charges15,0006,9892,11616,017 Parks, recreation and naturalist: Supplies and other charges67,00055,00051,93986,197 Capital outlay21,00051,56932,02769,480 Total expenditures103,000 113,558 86,082 171,694 Excess of revenues over expenditures595,878591,2291,297,039(132,612) Other financing sources (uses): Transfers out(600,000)(600,000)(600,000)(1,192,000) Net change in fund balance($4,122)($8,771)697,039(1,324,612) Fund balance - January 14,559,3465,883,958 Fund balance - December 31$5,256,385$4,559,346 112 INTERNAL SERVICE FUNDS Internal Service Funds are used to account for goods and services that are provided on a cost reimbursement or fee basis to departments or agencies within the City. These funds are essential for segregating costs for determining the total cost of providing a service and for assuring that the goods and services provided are properly utilized. These funds are accounted for on a capital maintenance measurement focus and use the accrual basis of accounting. Employee Benefits Fund – This fund is used to account for the expenses associated with providing fringe benefits for employees. Self-Insurance Fund – This fund is used to account for all revenues and expenses associated with the $50,000 deductible in the City’s general liability policy. Information Systems Fund – This fund is used to account for all revenues and expenses associated with maintaining and upgrading the City’s computerized information systems. 113 Exhibit F-1 CITY OF FRIDLEY, MINNESOTA COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS December 31, 2010 With comparative totals for December 31, 2009 EmployeeSelfInformation BenefitsInsuranceSystems Totals Assets:20102009 Current assets: Cash and investments$1,282,942$1,529,708$616,998$3,429,648$3,572,074 Due from component unit138 - - 138231 Total current assets1,283,0801,529,708616,9983,429,7863,572,305 Capital assets, at cost: Machinery and equipment - - 1,622,5391,622,5391,575,671 Less: accumulated depreciation - - (1,343,975)(1,343,975)(1,295,017) Net capital assets00278,564278,564280,654 Total assets1,283,0801,529,708895,5623,708,3503,852,959 Liabilities: Current liabilities: Accounts payable - - - - 12,502 Due to component unit - 1,502 - 1,502 - Payroll deductions payable95,085 - - 95,08587,068 Compensated absences payable - current portion799,284 - - 799,284775,962 Total current liabilities894,3691,5020895,871875,532 Noncurrent liabilities: Compensated absences payable174,679 - - 174,679199,578 Total liabilities1,069,0481,50201,070,5501,075,110 Net assets: Invested in capital assets - - 278,564278,564280,654 Unrestricted214,0321,528,206616,9982,359,2362,497,195 Total net assets$214,032$1,528,206$895,562$2,637,800$2,777,849 114 Exhibit F-2 CITY OF FRIDLEY, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS INTERNAL SERVICE FUNDS For The Year Ended December 31, 2010 With comparative totals for the year ended December 31, 2009 EmployeeSelfInformation BenefitsInsuranceSystems Totals 20102009 Operating revenues: Charges for services$19,277$ - $10,554$29,831$42,073 Operating expenses: Personal services19,27718,803 - 38,08045,818 Supplies and other charges1,83048,109 - 49,939164,229 Depreciation - - 127,789127,789128,702 Total operating expenses21,10766,912127,789215,808338,749 Operating income (loss)(1,830)(66,912)(117,235)(185,977)(296,676) Nonoperating revenues: Investment income11,78314,3986,12732,30815,038 Intergovernmental - 10,010 - 10,01010,239 Insurance reimbursement - - - - 1,456 Gain on disposal of capital assets - - 3,6103,610 - Total nonoperating revenues11,78324,4089,73745,92826,733 Income (loss) before transfers9,953(42,504)(107,498)(140,049)(269,943) Net assets - January 1204,0791,570,7101,003,0602,777,8493,047,792 Net assets - December 31$214,032$1,528,206$895,562$2,637,800$2,777,849 115 Exhibit F-3 CITY OF FRIDLEY, MINNESOTA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For The Year Ended December 31, 2010 With comparative totals for the year ended December 31, 2009 EmployeeSelfInformation BenefitsInsuranceSystems Totals 20102009 Cash flows from operating activities: Receipts from interfund services provided$19,370$ - $10,554$29,924$42,111 Payment to suppliers(1,830)(46,607)(12,502)(60,939)(152,128) Payment to employees(12,837)(18,803) - (31,640)(30,823) Net cash flows from operating activities4,703(65,410)(1,948)(62,655)(140,840) Cash flows from capital and related financing activities: Acquisition of capital assets - - (125,699)(125,699)(194,644) Intergovernmental revenue - 10,010 - 10,01010,239 Insurance reimbursement - - - - 1,456 Proceeds from sale of capital assets - - 3,6103,610 - Net cash flows from capital and and related financing activities 010,010(122,089)(112,079)(182,949) Cash flows from investing activities: Investment income11,78314,3986,12732,30815,038 Net increase (decrease) in cash and cash equivalents16,486(41,002)(117,910)(142,426)(308,751) Cash and cash equivalents - January 11,266,4561,570,710734,9083,572,0743,880,825 Cash and cash equivalents - December 31$1,282,942 $1,529,708 $616,998 $3,429,648 $3,572,074 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) ($1,830)($66,912)($117,235)($185,977)($296,676) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation - - 127,789127,789128,702 Changes in assets and liabilities: Decrease (increase) in receivables93 - - 9338 Increase (decrease) in payables6,4401,502(12,502)(4,560)27,096 Total adjustments6,533 1,502 115,287 123,322 155,836 Net cash provided by operating activities$4,703($65,410)($1,948)($62,655)($140,840) 116 Exhibit F-4 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - EMPLOYEE BENEFITS FUND COMPARATIVE STATEMENT OF NET ASSETS December 31, 2010 With comparative totals for December 31, 2009 20102009 Assets: Current assets: Cash and investments$1,282,942$1,266,456 Due from component unit138231 Total current assets1,283,0801,266,687 Liabilities: Current liabilities: Payroll deductions payable95,08587,068 Compensated absences payable - current portion799,284775,962 Total current liabilities894,369863,030 Noncurrent liabilities: Compensated absences payable 174,679199,578 Total liabilities1,069,0481,062,608 Net assets: Unrestricted214,032204,079 Total net assets$214,032$204,079 117 Exhibit F-5 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - EMPLOYEE BENEFITS FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS For The Year Ended December 31, 2010 With comparative amounts for the year ended December 31, 2009 20102009 Operating revenues$19,277$25,939 Operating expenses: Personal services19,27728,826 Supplies and other charges1,8302,594 Total operating expenses21,10731,420 Operating income (loss)(1,830)(5,481) Nonoperating revenues: Investment income11,7835,187 Change in net assets9,953(294) Net assets - January 1204,079204,373 Net assets - December 31$214,032$204,079 118 Exhibit F-6 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - EMPLOYEE BENEFITS FUND COMPARATIVE STATEMENT OF CASH FLOWS For The Year Ended December 31, 2010 With comparative amounts for the year ended December 31, 2009 20102009 Cash flows from operating activities: Receipts from interfund services provided$19,370$25,977 Payment to suppliers(1,830)(2,594) Payment to employees(12,837)(13,831) Net cash flows from operating activities4,7039,552 Cash flows from investing activities: Investment income11,7835,187 Net increase in cash and cash equivalents16,48614,739 Cash and cash equivalents - January 11,266,4561,251,717 Cash and cash equivalents - December 31$1,282,942 $1,266,456 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) ($1,830)($5,481) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Changes in assets and liabilities: (Increase) decrease in receivables9338 Increase (decrease) in payables6,44014,995 Total adjustments6,533 15,033 Net cash provided by operating activities$4,703$9,552 119 Exhibit F-7 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - SELF INSURANCE FUND COMPARATIVE STATEMENT OF NET ASSETS December 31, 2010 With comparative amounts for December 31, 2009 20102009 Assets: Current assets: Cash and investments$1,529,708$1,570,710 Total assets1,529,7081,570,710 Liabilities: Current liabilities: Accounts payable1,502 - Net assets: Unrestricted1,528,2061,570,710 Total net assets$1,528,206$1,570,710 120 Exhibit F-8 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - SELF INSURANCE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS For The Year Ended December 31, 2010 With comparative amounts for the year ended December 31, 2009 20102009 Operating revenues$ - $ - Operating expenses: Supplies and other charges48,109148,613 Personal services18,80316,992 Total operating expenses66,912165,605 Operating income (loss)(66,912)(165,605) Nonoperating revenues (expenses): Intergovernmental10,01010,239 Investment income14,3986,544 Insurance reimbursement - 1,456 Total nonoperating revenues (expenses)24,40818,239 Income before transfers(42,504)(147,366) Net assets - January 11,570,7101,718,076 Net assets - December 31$1,528,206$1,570,710 121 Exhibit F-9 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - SELF INSURANCE FUND COMPARATIVE STATEMENT OF CASH FLOWS For The Year Ended December 31, 2010 With comparative amounts for the year ended December 31, 2009 20102009 Cash flows from operating activities: Payment to employees($18,803)($16,992) Payment to suppliers(46,607)(148,613) Net cash flows from operating activities(65,410)(165,605) Cash flows from capital and related financing activities: Intergovernmental revenue10,01010,239 Insurance reimbursement -1,456 Net cash flows provided from capital and related financing activities10,01011,695 Cash flows from investing activities: Investment income14,3986,544 Net increase (decrease) in cash and cash equivalents(41,002)(147,366) Cash and cash equivalents - January 11,570,7101,718,076 Cash and cash equivalents - December 31$1,529,708 $1,570,710 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) ($66,912)($165,605) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Changes in assets and liabilities: Increase (decrease) in payables1,502 - Total adjustments1,5020 Net cash provided (used) by operating activities($65,410)($165,605) 122 Exhibit F-10 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - INFORMATION SYSTEMS FUND COMPARATIVE STATEMENT OF NET ASSETS December 31, 2010 With comparative amounts for December 31, 2009 20102009 Assets: Current assets: Cash and investments$616,998$734,908 Capital assets, at cost: Property and equipment1,622,5391,575,671 Less: accumulated depreciation(1,343,975)(1,295,017) Net capital assets278,564280,654 Total assets895,5621,015,562 Liabilities: Current liabilities: Accounts payable - 12,502 Net assets: Invested in capital assets, net of related debt278,564280,654 Unrestricted616,998722,406 Total net assets$895,562$1,003,060 123 Exhibit F-11 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - INFORMATION SYSTEMS FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS For The Year Ended December 31, 2010 With comparative amounts for the year ended December 31, 2009 20102009 Operating revenues: Charges for services$10,554$16,134 Operating expenses: Supplies and other charges -13,022 Depreciation127,789128,702 Total operating expenses127,789141,724 Operating income (loss)(117,235)(125,590) Nonoperating revenues: Investment income6,1273,307 Gain (loss) on disposal of fixed assets3,610 - Total nonoperating revenues9,7373,307 Change in net assets(107,498)(122,283) Net assets - January 11,003,0601,125,343 Net assets - December 31$895,562$1,003,060 124 Exhibit F-12 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - INFORMATION SYSTEMS FUND COMPARATIVE STATEMENT OF CASH FLOWS For The Year Ended December 31, 2010 With comparative amounts for the year ended December 31, 2009 20102009 Cash flows from operating activities: Receipts from interfund services provided$10,554$16,134 Payment to suppliers(12,502)(921) Net cash flows from operating activities(1,948)15,213 Cash flows from capital and related financing activities: Acquisition of capital assets(125,699)(194,644) Proceeds from sale of capital assets3,610 - Net cash flows from capital and related financing activities(122,089)(194,644) Cash flows from investing activities: Investment income6,1273,307 Net increase in cash and cash equivalents(117,910)(176,124) Cash and cash equivalents - January 1734,908911,032 Cash and cash equivalents - December 31$616,998$734,908 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) ($117,235)($125,590) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation127,789128,702 Changes in assets and liabilities: Increase (decrease) in payables(12,502)12,101 Total adjustments115,287140,803 Net cash provided by operating activities($1,948)$15,213 125 CITY OF FRIDLEY 126 HOUSING AND REDEVELOPMENT AUTHORITY COMPONENT UNIT 127 CITY OF FRIDLEY, MINNESOTA BALANCE SHEET - GOVERNMENTAL FUNDS HOUSING AND REDEVELOPMENT AUTHORITY December 31, 2010 With comparative totals for December 31, 2009 General FundHousing LoanCenter City Assets Cash and investments$2,128,887$2,845,956$14,490 Receivables: Accounts45,796 - - Interest23,355 - - Delinquent taxes14,188 - 20,584 Mortgage: Deferred - 1,118,147 - Allowance for uncollectible accounts -(75,359) - Prepaid expenses -3,638 - Due from other funds5,025,825 - - Land held for resale2,965,682 - - Total assets$10,203,733$3,892,382$35,074 Liabilities and Fund Balance Liabilities: Accounts payable$12,860$8$ - Due to primary government64,038 - - Due to other governments - - - Due to other funds - - - Deferred revenue2,979,870 - 20,584 Total liabilities3,056,768820,584 Fund balance (deficit): Reserved for debt service - - - Reserved for mortgage receivable - 1,118,147 - Unreserved, undesignated7,146,9652,774,22714,490 Total fund balance (deficit)7,146,9653,892,37414,490 Total liabilities and fund balance$10,203,733$3,892,382$35,074 128 Exhibit G-1 Other North Area / Governmental Univ. Ind. ParkLake PointeOnanGateway WestFunds Totals Governmental Funds 20102009 $33,710$556,653$1,126,261$13,476$1,387,107$8,106,540$11,661,595 - - - - - 45,79643,117 - - - - - 23,35510,989 12,0555,3768,408 - 2,05462,66597,852 - - - - - 1,118,1471,243,988 - - - - - (75,359)(75,359) - - - - - 3,6383,638 - - - - - 5,025,8254,175,825 - 50,000 - 155,5541,079,8154,251,0513,861,156 $45,765$612,029$1,134,669$169,030$2,468,976$18,561,658$21,022,801 $ - $427,443$ - $ - $99,983$540,294$389,748 - - - - - 64,038188,149 - - - - - - 8,417 - 685,303 - 1,519,1092,821,4135,025,8254,175,825 12,05555,3768,408155,5541,081,8684,313,7153,959,008 12,0551,168,1228,4081,674,6634,003,2649,943,8728,721,147 - - - - - - 1,720,000 - - - - - 1,118,1471,243,988 33,710(556,093)1,126,261(1,505,633)(1,534,288)7,499,6399,337,666 33,710(556,093)1,126,261(1,505,633)(1,534,288)8,617,78612,301,654 $45,765$612,029$1,134,669$169,030$2,468,976$18,561,658$21,022,801 Fund balance reported above$8,617,786$12,301,654 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources, and therefore, are not reported in the funds2,023,5112,023,511 Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds4,313,7153,959,008 Net assets of governmental activities$14,955,012$18,284,173 129 CITY OF FRIDLEY, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS HOUSING AND REDEVELOPMENT AUTHORITY For The Year Ended December 31, 2010 With comparative totals for the year ended December 31, 2009 General FundHousing LoanCenter City Revenues: Tax increment$ - $ - $ - Property taxes472,870 - - Propertytaxes472,870 Investment income14,31316,1269,548 Intergovernmental revenue21,004 - - Mortgage interest earnings3,64250,778 - Rental11,800 - - Sale of real estate233,170 - - Miscellaneous6321,080 - Receipt from primary government3,4345 - TtlTotal revenues760296760,2968798987,98995489,548 Expenditures: Personal services114,959 - - Supplies and other charges284,770106,442473 Capital outlay -209,802 - Developer assistance - - - Interestexpense--- Interestexpense--- Decertification of tif district - - 1,515,224 Payment to primary government - - 1,755,062 Total expenditures399,729316,2443,270,759 Excess (deficiency) of revenues over (under) expenditures360,567(228,255)(3,261,211) Fund balance (deficit) - January 16,786,3984,120,6293,275,701 Fund balance (deficit) - December 31$7,146,965$3,892,374$14,490 130 Exhibit G-2 Other North Area / Governmental Univ. Ind. ParkLake PointeOnanGateway WestFunds Totals Governmental Funds 20102009 $ - $933,829$347,787$10,138$451,062$1,742,816$2,016,580 - - - - - 472 ,870464,228 472,870464,228 - 3,1216,316728,25057,74616,656 - - - 58712,07033,66151,904 - - - - - 54,42051,645 - - - - - 11,80013,350 - - - - - 233,17043,117 - - - - - 21,14321,524 - - - - - 3,439 - 00936,950354,10310,797471,3822,631,0652,679,0049369503541031079747138226310652679004 - - - - - 114,959110,117 4741,5624741,847241,771637,813533,188 - - - - 971,5921,181,394638,009 - 902,250 - - 204,6101,106,860850,701 ------ 6,939, ------6939 3,621 - - - - 1,518,845 - - - - - - 1,755,0621,776,495 4,095903,8124741,8471,417,9736,314,9333,915,449 (4,095)33,138353,6298,950(946,591)(3,683,868)(1,236,445) 37,805(589,231)772,632(1,514,583)(587,697)12,301,65413,538,099 $33,710($556,093)$1,126,261($1,505,633)($1,534,288)$8,617,786$12,301,654 Amounts reported for governmental activities in the statement of activities (Exhibit A-2) are different because: Netchangesinfundbalancestotalabovee cangesnunaances - oa aove($3683868),,($1236445),, Nthifdblttlb($3683868)($1236445) Governmental funds reported capital outlays as expenditures to purchase land. However, in the statement of activities, these expenditures are not shown because the asset is recorded on the statement of net assets.811,349317,920 Revenues in the statement of activities that do not provide current financial Revenuesinthestatementofactivitiesthatdonotprovidecurrentfinancial resources are not reported as revenues in the funds(35,187)(1,439,231) Change in net assets of governmental activities (Exhibit A-2)($2,907,706)($2,357,756) 131 CITY OF FRIDLEY, MINNESOTA SUBCOMBINING BALANCE SHEET NONMAJOR CAPITAL PROJECT FUNDS HOUSING AND REDEVELOPMENT AUTHORITY December 31, 2010 With comparative totals for December 31, 2009 University / McGlynn WinfieldGateway EastOsborneBakeries Assets Cash and investments$255,592$89,919$134,093$83,981 Delinquent taxes receivable472 - 159 - Land held for resale - - - - Total assets$256,064$89,919$134,252$83,981 Liabilities and Fund Balance Liabilities: Accounts payable$ - $ - $ - $ - Due to other governments - - - - Due to other funds - 824,653107,000104,000 Deferred revenue472 - 159 - Total liabilities472 824,653 107,159 104,000 Fund balance (deficit): Unreserved, undesignated255,592(734,734)27,093(20,019) Total fund balance (deficit)255,592 (734,734)27,093 (20,019) Total liabilities and fund balance$256,064$89,919$134,252$83,981 132 Exhibit G-3 Satellite Lane 57th Avenue HousingGateway Totals Nonmajor Capital Project Apts.RedevelopmentTIF #19Replacement #1NorthEast Funds 20102009 $110,799$19,783$85,980$159,796$447,164$1,387,107$1,401,967 881103439 - - 2,0542,592 - - - 356,203723,6121,079,81575,000 $111,680$19,886$86,419$515,999$1,170,776$2,468,976$1,479,559 $ - $13,135$59,118$27,730$ - $99,983$13,115 - - - - - - 5,136 162,000128,76045,000 - 1,450,0002,821,4131,971,413 881103439356,202723,6121,081,86877,592 162,881 141,998 104,557 383,932 2,173,612 4,003,264 2,067,256 (51,201)(122,112)(18,138)132,067(1,002,836)(1,534,288)(587,697) (51,201)(122,112)(18,138)132,067 (1,002,836)(1,534,288)(587,697) $111,680$19,886$86,419$515,999$1,170,776$2,468,976$1,479,559 133 CITY OF FRIDLEY, MINNESOTA SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR CAPITAL PROJECT FUNDS HOUSING AND REDEVELOPMENT AUTHORITY For The Year Ended December 31, 2010 With comparative totals for the year ended December 31, 2009 University / McGlynn WinfieldGateway EastOsborneBakeries Revenues: Tax increment$64,239$34,927$68,130$44,357 Investment income1,433478752471 Intergovernmental revenue -4,653 - - Total revenues65,67240,05868,88244,828 Expenditures: Supplies and other charges473474474473 Developer assistance - - - - Capital outlay - - - - Total expenditures473474474473 Excess (deficiency) of revenues over (under) expenditures65,19939,58468,40844,355 Fund balance (deficit) - January 1190,393(774,318)(41,315)(64,374) Fund balance (deficit) - December 31$255,592($734,734)$27,093($20,019) 134 Exhibit G-4 Housing Satellite Lane 57th Avenue ReplacementGateway Totals Nonmajor Capital Project Apts.RedevelopmentTIF #19#1NorthEastFunds 20102009 $49,005$29,530$132,854$28,020$ - $451,062$457,236 5951114828903,0388,250290 4,722 - - 2,695 - 12,07011,864 54,32229,641133,33631,6053,038471,382469,390 47447386357,364180,703241,77129,702 - 26,458178,152 - - 204,61086,446 - - - 146,421825,171971,59290 47426,931179,015203,7851,005,8741,417,973116,238 53,8482,710(45,679)(172,180)(1,002,836)(946,591)353,152 (105,049)(124,822)27,541304,247 - (587,697)(940,849) ($51,201)($122,112)($18,138)$132,067($1,002,836)($1,534,288)($587,697) 135 CITY OF FRIDLEY 136 AGENCY FUNDS Agency Funds account for assets held by a governmental unit in a trustee capacity or as an agent for individuals, private organizations, other governmental units, and/or other funds. 137 Exhibit H-1 CITY OF FRIDLEY, MINNESOTA STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For The Year Ended December 31, 2010 BalanceBalance January 1,December 31, 2010AdditionsDeletions2010 Six Cities Watershed Assets: Cash and investments$24,567$6,008$21,135$9,440 Receivables: Taxes: Unremitted3250 - 82 Delinquent293 - 65228 Total assets$24,892$6,058$21,200$9,750 Liabilities: Due to other governments$24,892$5,993$21,135$9,750 Hotel/Motel Tax Assets: Cash and investments($88)$31,982$32,022($128) Receivables: Accounts1,746805 - 2,551 Total assets$1,658$32,787$32,022$2,423 Liabilities: Due to other governments$1,658$2,423$1,658$2,423 Totals Assets: Cash and investments$24,479$37,990$53,157$9,312 Receivables: Accounts1,746805 - 2,551 Taxes: Unremitted3250 - 82 Delinquent293 - 65228 Total assets$26,550$38,845$53,222$12,173 Liabilities: Due to other governments$26,550$8,416$22,793$12,173 138 III. STATISTICAL SECTION (UNAUDITED) 139 CITY OF FRIDLEY, MINNESOTA NET ASSETS BY COMPONENT (1) Last Seven Fiscal Years (Accrual Basis of Accounting) 200320042005 Governmental activities: Invested in capital assets, net of related debt$18,930,543$18,305,647$18,458,113 Restricted 2,395,446 1,664,772 1,540,531 Unrestricted 10,326,790 11,735,908 13,331,115 Total governmental activities net assets$31,652,779$31,706,327$33,329,759 Business-type activities: Invested in capital assets, net of related debt$17,003,867$14,528,247$16,454,772 Restricted - - - Unrestricted9,663,80711,814,6499,258,984 Total business-type activities net assets$26,667,674$26,342,896$25,713,756 Primary government: Invested in capital assets, net of related debt$35,934,410$32,833,894$34,912,885 Restricted 2,395,446 1,664,772 1,540,531 Unrestricted 19,990,597 23,550,557 22,590,099 Total primary government net assets$58,320,453$58,049,223$59,043,515 140 Table 1 20062007200820092010 $18,635,605$18,245,265$17,490,936$16,141,958$15,546,219 1,591,936 1,711,255 2,193,410 2,790,220 3,401,776 15,140,831 17,244,490 18,845,006 20,276,252 21,293,470 $35,368,372$37,201,010$38,529,352$39,208,430$40,241,465 $17,354,621$16,951,085$16,381,443$15,036,932$15,105,503 - - - - - 7,955,4267,722,4587,869,1858,308,0787,647,848 $25,310,047$24,673,543$24,250,628$23,345,010$22,753,351 $35,990,226$35,196,350$33,872,379$31,178,890$30,651,722 1,591,936 1,711,255 2,193,410 2,790,220 3,401,776 23,096,257 24,966,948 26,714,191 28,584,330 28,941,318 $60,678,419$61,874,553$62,779,980$62,553,440$62,994,816 141 CITY OF FRIDLEY, MINNESOTA CHANGES IN NET ASSETS (1) Last Seven fiscal years (Accrual basis of accounting) 200320042005 Expenses Governmental activities: General government$3,944,682$3,513,065$4,448,175 Public safety5,166,9755,468,0145,514,330 Public works3,749,4123,612,3184,105,860 Community Development939,918602,335793,836 Parks, recreation and naturalist1,105,240993,570767,599 Interest on long-term debt605,639544,478443,533 Total governmental activities expenses15,511,86614,733,78016,073,333 Business-type activities: Liquor5,010,6365,005,1984,919,458 Water2,030,6542,086,5132,070,032 Sanitary sewer3,419,1003,256,3713,570,113 Storm water359,189334,906320,596 Total business-type activities expenses10,819,57910,682,98810,880,199 Total primary government expenses$26,331,445$25,416,768$26,953,532 Program revenues Programrevenues Governmental activities: Charges for services: General government$1,301,146$1,032,130$1,263,265 Public safety$542,725$539,334$569,993 Public works$77,166$286,165$189,766 Community Development$411,300$441,649$599,870 Parks, recreation and naturalist$293,142$369,736$331,298 Operating grants and contributions1,481,7231,009,8611,121,726 Capital grants and contributions1,012,151882,2921,657,106 Total governmental activities program revenues5,119,3534,561,1675,733,024 Business-type activities: Charges for services: Liquor5,364,5885,376,4285,283,229 Water1,806,3581,763,6231,771,846 Sanitary sewer3,183,2603,248,9523,299,957 Storm water366,667381,360384,860 Operating grants and contributions37,976208600 Capital grants and contributions - - - Total business-type activities program revenues10,758,84910,770,57110,740,492 Total primary government program revenues$15,878,202$15,331,738$16,473,516 142 Table 2 Page 1 of 2 20062007200820092010 $4,177,829$4,074,480$3,646,436$3,324,698$3,272,470 6,023,3356,260,8066,774,6106,847,5716,756,698 3,868,5174,208,7654,771,7485,065,1785,916,776 1,118,661863,8501,479,4551,036,549966,909 1,147,9661,312,5021,303,0631,605,3061,521,106 397,036416,850377,884342,555268,892 16,733,34417,137,25318,353,19618,221,85718,702,851 4,793,4194,920,5114,937,7764,654,8114,542,180 2,138,3712,279,0342,378,1012,423,1292,438,399 3,629,3613,798,0534,065,8994,350,5764,617,991 331,039381,944373,989399,349421,630 10,892,19011,379,54211,755,76511,827,86512,020,200 $27,625,534$28,516,795$30,108,961$30,049,722$30,723,051 $1,468,699$1,600,769$1,733,160$1,755,1231,443,361 609,721709,209759,892690,115717,003 197,96849,39964,04223,03466,938 470,733656,674510,908523,508501,897 346,382381,432376,621347,044364,093 1,304,510930,593818,805930,765939,123 1,919,108834,7482,078,5721,476,9891,952,934 6,291,7835,030,7546,209,6095,724,6156,297,111 5,136,0295,252,9105,275,4674,973,0004,855,880 1,929,5731,990,0472,110,6212,419,4002,390,836 3,345,0173,461,6153,873,8063,784,0004,052,800 391,032392,016404,562457,862421,815 514 - - - - - - - - - 10,802,16511,096,58811,664,45611,634,26211,721,331 $17,093,948$16,127,342$17,874,065$17,358,877$18,018,442 143 CITY OF FRIDLEY, MINNESOTA CHANGES IN NET ASSETS (1) Last Seven fiscal years (Accrual basis of accounting) 200320042005 Net (expense) revenue: Governmental activities($10,392,513)($10,172,613)($10,340,309) Business-type activities(60,730)87,583(139,707) Total primary government net (expense) revenue(10,453,243)(10,085,030)(10,480,016) General revenues and other changes in net assets Governmental activities: General property taxes$5,273,363$5,816,656$7,428,226 Grants not restricted to programs3,751,5603,436,4733,365,739 Investment earnings423,215413,743511,464 Gain on sale of property10,468680434 Other - - - Transfers - - - Total governmental activities9,458,6069,667,55211,305,863 Business-type activities: Investment earnings118,029146,248168,445 Gain on Sale of Property6,530 - - Other6,502 - - Transfers - - - Total business-type activities131,061146,248168,445 Total primary government$9,589,667$9,813,800$11,474,308 Change in net assets: Governmental activities($933,907)($505,061)$965,554 Business-type activities70,331233,83128,738 Total primary government($863,576)($271,230)$994,292 (1) The City implemented GASB Statement No. 34 for the fiscal year ended Deember 31, 2003. Therefore, information for years prior to 2003 is not available. 144 Table 2 Page 2 of 2 20062007200820092010 ($10,441,561)($12,106,499)($12,143,587)($12,497,242)($12,405,740) (90,025)(282,954)(91,309)(193,603)(298,869) (10,531,586)(12,389,453)(12,234,896)(12,690,845)(12,704,609) $8,253,653$8,986,924$9,068,718$9,175,888$10,141,119 2,623,4073,152,4213,240,0813,390,6332,718,979 998,1541,111,116687,66596,817208,565 3,35759,438(24,802)12,98220,112 1,60329,238267 - - 600,000600,000500,000500,000350,000 12,480,17413,939,13713,471,92913,176,32013,438,775 281,316245,172168,39425,90857,098 5,0001,278 -(237,923)112 - - - - - (600,000)(600,000)(500,000)(500,000)(350,000) (,)(,)(,)(,)(,) (313,684)(353,550)(331,606)(712,015)(292,790) $12,166,490$13,585,587$13,140,323$12,464,305$13,145,985 $2,038,613$1,832,638$1,328,342$679,078$1,033,035 (403,709)(636,504)(422,915)(905,618)(591,659) $1,634,904$1,196,134$905,427($226,540)$441,376 145 CITY OF FRIDLEY, MINNESOTA FUND BALANCES, GOVERNMENTAL FUNDS (1) Last Seven fiscal years (Modified accrual basis of accounting) 200320042005 General Fund: Reserved$43,502$83,822$81,662 Unreserved: General fund4,338,4634,080,0124,020,285 Designated for employee benefits - - - Designated for contingencies - - - Undesignated - - - Total general fund$4,381,965$4,163,834$4,101,947 All other governmental funds: Reserved for: Long-term receivables$645,330$541,244$480,123 Public safety -1,155,225688,214 Debt service609,992509,547389,197 Unreserved, reported in: Special revenue funds2,172,012541,7481,098,995 Capital projects funds6,490,4287,001,3906,881,523 Debt service5,508,8085,522,6475,976,888 Total all other governmental funds$15,426,570$15,271,801$15,514,940 (1) The City implemented GASB Statement No. 34 for the fiscal year ended Deember 31, 2003. Therefore, information for years prior to 2003 is not available. 146 Table 3 20062007200820092010 $77,476$65,528$48,561$58,928$59,755 - 3,863,0235,206,7784,538,2244,600,9885,725,464 - - - - - - - - - - - - - - - $3,940,499$5,272,306$4,586,785$4,659,916$5,785,219 $415,908$348,441$277,560$ - $ - 203,13120,72625,590 - - 721,8661,214,5191,564,2171,734,6242,066,732 - 1,106,6231,189,1401,258,9261,329,6471,407,400 6,963,5245,223,5635,944,5565,056,1485,796,931 5,991,1026,201,3505,976,5115,801,6865,983,425 $15,402,154$14,197,739$15,047,360$13,922,105$15,254,488 147 CITY OF FRIDLEY, MINNESOTA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS (1) Last Seven fiscal years 200320042005 Revenues: General property taxes$5,305,289$5,809,631$7,397,381 Special assessments470,648300,389550,909 Licenses and permits722,541785,582865,848 Intergovernmental4,075,0233,207,4822,767,724 Charges for services1,500,4291,533,2531,736,181 Fines and forfeits216,368176,878164,104 Earnings on investments330,133325,307411,333 Interest on loan32,05629,25326,308 Other2,023,5442,085,0692,625,899 Total revenues 14,676,031 14,252,844 16,545,687 Expenditures: Current: General government3,569,9523,155,6174,244,496 Public safety4,925,5255,156,5295,204,551 Public works2,712,4212,608,3162,940,869 Communitu development934,151593,393671,173 Parks, recreation and naturalist1,068,875960,723737,094 Debt service: Principal1,180,0005,155,0006,095,000 Interest 627,899561,045422,366 ,,, Bond issuance costs2,20132,96835,997 Capital outlay:1,705,270869,7703,112,700 Contingency - -907 Total expenditures 16,726,294 19,093,361 23,465,153 Revenues over (under) expenditures (2,050,263) (4,840,517) (6,919,466) Other financing sources (uses): Refunding bond issues -3,920,000 - Bonds issued - -6,450,000 Premium/(discount) on bonds issue -(10,992)(7,160) Proceeds from sale of capital assets - - - Transfers in579,109558,609657,878 Transfers out - - - Total other financing sources (uses) 579,109 4,467,617 7,100,718 Net change in fund balance($1,471,154)($372,900)$181,252 Debt service as a percentage of noncapital expenditures12.1%31.5%32.2% Debt service as percentage of total expenditures 10.8%30.1%27.9% (1) The City implemented GASB Statement No. 34 for the fiscal year ended December 31, 2003. ereore,normaonor years proros no avaae. Thfiftifit2003itilbl 148 Table 4 20062007200820092010 $8,220,943$8,927,963$9,052,719$9,072,267$10,178,369 691,764635,817589,790665,038622,100 876,9031,080,787946,285965,363973,985 2,663,9091,872,6432,742,9813,140,5533,310,631 1,855,1771,830,4162,015,7962,021,7082,080,349 261,535298,359316,646255,014240,880 828,877920,850560,62974,840176,257 23,21319,96216,5476,939 - 2,154,6562,288,3092,220,2762,043,2521,992,971 17,576,977 17,875,106 18,461,669 18,244,974 19,575,542 3,567,5033,893,9523,338,2283,086,4413,010,835 5,821,5235,999,5576,323,9106,446,7146,329,354 2,944,9113,025,1573,406,4683,376,6413,111,918 1,113,543861,8721,189,033895,057967,487 1,118,3921,194,2901,366,1541,301,1401,292,783 1,555,0001,825,0002,075,0002,215,0002,445,000 330,431359,010379,340366,500287,961 ,,,,, 31,74242,9869,1391,80145,094 4,452,5003,114,2032,684,9382,144,6491,812,087 - - - - 20,935,545 20,316,027 20,772,210 19,833,943 19,302,519 (3,358,568) (2,440,921) (2,310,541) (1,588,969) 273,023 - - - - - 2,505,0001,910,0001,915,000 -1,765,000 (30,720) - - -53,163 10,05458,31313,10136,84516,500 4,966,400600,0003,926,5632,500,4211,235,467 (4,366,400) -(3,380,023)(2,000,421)(885,467) 3,084,334 2,568,313 2,474,641 536,845 2,184,663 ($274,234)$127,392$164,100($1,052,124)$2,457,686 11.6%12.9%13.6%14.6%15.9% 9.2%11.0%11.9%13.0%14.4% 149 CITY OF FRIDLEY, MINNESOTA TAX CAPACITY VALUE AND ESTIMATED MARKET VALUE OF TAXABLE PROPERTY Last Ten Fiscal Years Commercial/ FiscalResidentialIndustrialPublicAll YearPropertyPropertyUtilityOther 2001 Information Not Availiable 2002 2003 2004$11,163,343$12,740,016$44,539$3,388,828 200512,619,94812,517,53246,5633,762,125 200614,320,78613,166,65746,8613,833,436 200715,074,00814,500,00846,9534,236,896 200815,334,12615,809,59442,7384,370,011 200914,716,96716,788,86038,6804,455,969 201013,494,27916,457,27537,3084,523,767 Source: Continuing Disclosure Document 150 Table 5 Less: TotalFiscalAdjustedTotalEstimatedTax Capacity TaxDisparityTax CapacityDirect TaxMarketas a Percent CapacityContributionValueRateValueof EMV $29,851,680$4,769,074$25,082,60616.350%$1,518,347,800119.01% 22,380,1593,223,21419,156,94529.906%1,688,141,100116.83% 25,007,7893,579,12821,428,66128.616%1,958,021,100116.70% 27,336,7264,292,06123,044,66530.248%2,149,055,100118.62% 28,946,1684,624,09124,322,07733.565%2,278,619,300119.01% 31,367,7404,115,59527,252,14531.941%2,469,670,100115.10% 33,857,8654,587,79428,341,51431.349%2,616,727,300119.46% 35,556,4695,221,35530,303,83230.324%2,701,388,800117.33% 36,000,4765,757,07331,758,13328.640%2,698,943,700113.36% 34,512,6296,128,31830,862,68232.258%2,561,173,300111.83% 151 CITY OF FRIDLEY MINNESOTA DIRECT AND OVERLAPPING PROPERTY TAX CAPACITY RATES Last Ten Fiscal Years SchoolSchoolSchool FiscalDistrictDistrictDistrict YearCityNo. 11No. 13No. 14 200116.350%52.281%47.452%45.466% 200229.906%29.082%38.614%17.855% 200328.616%26.941%20.303%29.966% 200430.248%21.050%22.833%22.683% 200533.565%21.492%19.993%21.606% 200631.941%20.046%19.571%20.830% 200731.349%19.353%17.183%24.175% 200830.324%16.983%15.942%26.033% 200928.640%18.263%23.411%31.172% 201032.258%19.939%24.398%38.795% Source: Continuing Disclosure Document Notes: (1) Vocational/Technical District #916 is included in District No. 16. (2) Six Cities Watershed District is included with School District No. 11. (3) Rice Creek Watershed District is included with School District No. 13, 14 and 16. (4) Stonybrook Creek Subwatershed is included with School District No. 11 and 14. 152 Table 6 SchoolTotalSchoolSchoolSchoolSchool DistrictSpecialDistrictDistrictDistrictDistrict (1)(2, 4)(3)(3, 4)(1, 3) No. 16No. 11No. 13No. 14No. 16 CountyDistricts 39.458%28.859%8.218%106.287%101.819%99.833%94.139% 25.985%37.976%7.528%105.313%115.198%94.439%102.639% 22.054%37.714%7.666%102.483%96.360%105.925%98.111% 21.421%35.221%7.623%95.446%97.758%97.525%96.346% 16.118%33.080%8.085%96.945%96.329%97.942%92.454% 17.437%32.096%7.411%92.136%92.813%94.072%90.679% 25.779%30.696%6.829%88.666%87.770%94.762%96.366% 26.213%31.078%7.803%86.608%87.135%97.226%97.406% 27.155%32.078%8.783%86.183%92.840%100.601%96.584% 31.654%35.189%9.089%94.964%100.897%115.294%108.153% 153 Table 7 CITY OF FRIDLEY, MINNESOTA PRINCIPAL PROPERTY TAXPAYERS Current year and nine years ago 2010 2001 Percentage Percentage Taxableof Total CityTaxableof Total City CapacityCapacityCapacityCapacity TaxpayerValueRankValueValueRankValue Medtronic, Inc.$1,955,39015.67%$957,79623.21% TargetCorporation772,694 2 2.24%1,176,476 1 3.94% Shamrock Investments488,872 3 1.42%916,971 3 3.07% Retail Trust IV (Wal-Mart/Sam's)410,046 4 1.19%379,149 7 1.27% Cummins Power (Onan)306,654 5 0.89%483,485 4 1.62% Northwest Racquet & Swim Club297,664 60.86%374,856 8 1.26% Maurice Fillister (Georgetown)270,734 7 0.78%296,208 9 0.99% University Avenue Associates263,463 8 0.76%441,720 5 1.48% Riverpointe Apartments206,984 9 0.60%252,103 10 0.84% Burlington Northern Railroad28,744 10 0.08%410,274 6 1.37% Total$5,001,24514.49%$5,689,03819.05% Total All Property$34,512,629$29,851,680 Source: City Assessor 154 Table 8 CITY OF FRIDLEY, MINNESOTA PROPERTY TAX LEVIES AND COLLECTIONS Last ten fiscal years FiscalTaxesCollections Collected Within The YearLeviedFiscal Year of the LevyinTotal Collections to Date EndedFor ThePercentageSubsequentPercentage Dec. 31Fiscal YearAmountof LevyYearsAmountof Levy 2001$4,205,000$4,147,78898.64%$56,916$4,204,70499.99% 20025,613,1315,579,77799.41%31,9955,611,77299.98% 20035,825,8555,763,09798.92%62,6655,825,762100.00% 20046,483,7456,310,42997.33%173,1846,483,613100.00% 20058,067,9497,699,29095.43%367,7898,067,07999.99% 20068,757,1888,517,85597.27%236,3668,754,22199.97% 20079,200,4269,332,688(1101.44%127,6739,460,361102.83% ) 20089,527,4339,483,67499.54%30,1709,513,84499.86% 20099,472,4879,587,322(1101.21%63,0549,650,376101.88% ) 201010,120,16210,714,845(1105.88%N/A10,714,845105.88% ) (1) Excess TIF collections included of $235,704 in 2007, $101,714 in 2009 and $499,779 in 2010 Source: City Finance Department. 155 CITY OF FRIDLEY, MINNESOTA RATIOS OF OUTSTANDING DEBT BY TYPE Last Ten fiscal years Governmental Activities Percentage of EstimatedEstimated FiscalImprovementTax IncrementEquipmentMarket ValueMarket Value YearBondsBondsCertificatesTotalof Propertyof Property 2001$615,000$12,735,000$ - $13,350,0000.88%$1,518,347,800 2002465,00011,735,000 - 12,200,0000.72%1,688,141,100 2003315,00010,705,000 - 11,020,0000.56%1,958,021,100 2004190,0009,595,000 - 9,785,0000.46%2,149,055,100 20051,805,0008,335,000 - 10,140,0000.45%2,278,619,300 20064,310,0006,780,000 - 11,090,0000.45%2,469,670,100 20076,065,0005,110,000 - 11,175,0000.43%2,616,727,300 20087,615,0003,400,000 - 11,015,0000.41%2,701,388,800 20097,080,0001,720,000 - 8,800,0000.33%2,698,943,700 20107,570,000 - 550,0007,570,0000.30%2,561,173,300 156 Table 9 Business Type Activities Total Sewer/WaterTotalPer PrimaryPer PopulationBondsBusiness TypeCustomerGovernmentCapita 27,854$3,530,000$3,530,000428$16,880,000479 27,8773,170,0003,170,00038315,370,000438 27,4602,800,0002,800,00033813,820,000401 27,4805,405,0005,405,00065715,190,000356 27,0883,815,0003,815,00045813,955,000374 26,6793,420,0003,420,00041514,510,000416 26,6033,015,0003,015,00036614,190,000420 26,4596,440,0006,440,00078117,455,000416 26,4225,865,0005,865,00071214,665,000333 27,2088,160,0008,160,00099215,730,000278 157 Table 10 CITY OF FRIDLEY, MINNESOTA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT December 31, 2010 Estimated EstimatedShare of DebtPercentageOverlapping Governmental UnitOutstandingApplicable*Debt Debt repaid with property taxes: Independent School District No. 11$184,196,1651.60%$2,947,139 Independent School District No. 1323,810,00031.46%7,490,626 Independent School District No. 1442,930,000100.00%42,930,000 Independent School District No. 16130,320,00036.80%47,957,760 Metro Council1,283,405,5361.19%15,272,526 Anoka County165,392,43318.04%29,836,795 Vocational/Technical District No. 9167,395,0002.21%163,430 Subtotal - overlapping debt146,598,276 City of Fridley - Direct debt$16,280,000100.00%16,280,000 Total direct and overlapping debt$162,878,276 158 Table 11 CITY OF FRIDLEY, MINNESOTA LEGAL DEBT MARGIN INFORMATION Last ten fiscal years Market Value$2,561,173,300 Debt Limit 3% of Market Value$76,835,199 Amount of Debt Applicable to Debt Limit: Total Debt$16,280,000 Deductions: Improvement Bonds$7,570,000 Revenue Bonds8,160,00015,730,000 Total Amount of Debt Applicable to Debt Limit550,000 Legal Debt Margin$76,285,199 Legal Debt Margin Calculation for the last 10 Fiscal Years Net DebtLealmount of Debt gA NetDebtLegalAmountofDebt FiscalDebtApplicable toDebtApplicable to YearLimitLimitMarginDebt Limit 2001$29,985,162$ - $26,327,6460.00% 200233,380,154 - 29,985,1620.00% 200338,755,912 - 33,380,1540.00% 200442,589,016 - 38,755,9120.00% 200545,168,942 - 42,589,0160.00% 200649,393,402 - 45,168,9420.00% 200752,334,546 - 49,393,4020.00% 200854,027,776 - 52,334,5460.00% 200980,968,311 - 54,027,7760.00% 201076,835,199550,00076,285,1990.72% 159 CITY OF FRIDLEY, MINNESOTA PLEDGED-REVENUE COVERAGE Last ten fiscal years Improvement BondsUtility Revenue Bonds SpecialUtilityLess FiscalAssessmentDebt ServiceServiceOperating YearCollectionsPrincipalInterestCoverageRevenuesExpenses 2001$497,208$230,000$39,7701.84$4,994,669$5,148,461 2002463,579150,00029,6082.585,016,2335,251,371 2003449,867150,00021,6082.625,330,6035,664,739 2004273,81390,00010,3582.735,371,6625,430,082 2005542,548190,0005,3402.785,435,3615,821,541 2006671,204 - 67,4669.955,648,7205,977,607 2007602,988155,000160,4231.915,832,9046,350,572 2008561,221365,000230,3250.946,379,9846,631,304 2009658,406535,000270,0050.826,611,6116,951,906 2010555,997725,000252,8990.576,855,4417,236,513 160 Table 12 Utility Revenue BondsTax Increment Bonds Net Tax AvaliableDebt ServiceIncrementDebt Service RevenuePrincipalInterestCoverageCollectionsPrincipalInterestCoverage ($153,792)$350,000$175,115-0.29$3,145,594$875,000$697,7012.00 (235,138)360,000158,422-0.452,564,0401,000,000654,6641.55 (334,136)370,000141,002-0.653,624,9681,030,000606,2912.22 (58,420)390,000334,960-0.083,078,4265,065,000546,9100.55 (386,180)1,590,000139,200-0.223,224,2045,905,000417,0260.51 (328,887)395,000121,164-0.642,649,0201,555,000262,9651.46 (517,668)305,000108,351-1.253,586,0971,670,000199,4881.92 (251,320)300,000149,481-0.563,329,2891,710,000149,0151.79 (340,295)575,000221,449-0.432,016,5801,680,00096,4951.14 (381,072)515,000241,508-0.501,742,8161,720,00035,0630.99 161 Table 13 CITY OF FRIDLEY, MINNESOTA DEMOGRAPHIC AND ECONOMIC STATISTICS Last ten fiscal years Total Per Capita FiscalUnemploymentPersonalPersonal YearPopulationRateIncomeIncome 200127,8543.6%724,064,73025,995 200227,8774.4%789,588,14828,324 200327,4604.3%622,985,02022,687 200427,4804.8%691,644,12025,169 200527,0884.2%695,674,01625,682 200626,6794.2%703,978,77326,387 200726,6034.8%712,747,57626,792 200826,4595.7%708,889,52826,792 200926,4227.9%688,160,99026,045 201027,2087.3%744,138,80027,350 Sources: Metropolitan Council (population), Continuing Disclosure Document (unemployment rate) 162 Table 14 CITY OF FRIDLEY, MINNESOTA PRINCIPAL EMPLOYERS Current year and nine years ago 2010201020012001 Percentage Percentage of Total Cityof Total City EmployerEmployeesRankEmploymentEmployeesRankEmployment Medtronic, Inc.3,076118.96%2,60019.90% 1,4122 8.70%1,46635.58% BAE Systems CumminsPower(Onan)1700,31048%.1615,2615%. CumminsPower(Onan)170031048%16152615% Unity Medical Center1,5704 9.68%46661.77% Target8425 5.19%37791.44% 74864.61%67042.55% Minco Products Kurt Manufacturing2867 1.76%45071.71% Wal-Mart2308 1.42% - 0.00% Lofthouse Bakery2159 1.33%280101.07% 17510 1.08% - 0.00% Park Construction Parsons Electric -0.00%40081.52% Burlington -0.00%65052.48% Total10,25463.20%8,97434.18% Total City Employment16,22526,257 Source: Continuing Disclosure Documents, Minnesota Department of Employment and Economic Development and the Met Council. 163 CITY OF FRIDLEY, MINNESOTA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM Last Ten Fiscal Years Full-Time Equivalent Employees as of December 31, Function/Program2001200220032004 General government: City Administration3443 Finance24242423 Human Resource2222 Community Development1010108 Public safety: Police department50505046 Fire department8898 Public works: Administration5554 Engineering4332 Mechanic3333 Streets9999 Water6665 Sewer6555 Parks6677 Parks and recreation: Recreation and Naturalist8895 Total144143146130 Source: City Finance Department 164 Table 15 Full-Time Equivalent Employees as of December 31, 200520062007200820092010 333333 232322221919 222222 8107977 464744444542 899888 442222 224444 333333 999999 555555 555555 777777 8118888 133140130131127124 165 CITY OF FRIDLEY, MINNESOTA OPERATING INDICATORS BY FUNCTION/PROGRAM Last Ten Fiscal Years Fiscal Year Function/Program200120022003 Police: Physical arrests1,6451,4471,333 Parking violations513635532 Traffic violations1,4352,2092,429 Fire: Emergency responses2,2932,5572,549 Fires occurred105144124 Commercial Inspections8421,0681,126 Rental Inspections303359299 Refuse collection: Recyclables collected (tons per day)6.806.756.70 Building inspection: Permits issued: Residential667730642 Commercial705265 Total permit valuation$21,808,039$11,619,328$16,078,198 Other public works: Street resurfacing (miles)1.21.21.2 Water: Connections8,2098,2548,279 Storage capacity (gallons)6,500,0006,500,0006,500,000 Average daily demand (gallons)550,000550,000550,000 Peak daily demand (gallons)9,000,0009,000,0009,000,000 Sewer: Connections8,2198,2638,288 Sources: Various City departments. No operating indicators were available for the Parks, recreation and naturalist function. 166 Table 16 Fiscal Year 2004200520062007200820092010 9561,2051,2921,2901,3571,3051,318 644884572792419382778 2,1291,7895,1524,0354,9942,9342,929 2,4062,7192,5682,8042,8272,8642,772 137107127109116141116 1,1801,1717844,5171,2391,021868 4712962311,176755888597 6.706.696.956.966.126.475.89 6247507681,2061,4441,5991,905 9986115366418386434 $22,029,469$25,057,537$21,750,596$47,871,624$39,105,158$45,564,657$30,441,199 1.24.14.83.74.14.94.9 8,2888,2328,2358,2308,2338,2318,226 6,500,0006,500,0006,500,0006,500,0006,500,0006,500,0006,500,000 646,000550,000550,0004,270,0004,270,0003,458,4823,014,425 13,190,00010,000,00010,990,00010,990,00010,800,00019,350,8928,119,207 8,2978,2508,2448,2388,2428,2388,237 167 CITY OF FRIDLEY, MINNESOTA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Last Ten Fiscal Years Fiscal Year Function/Program2001200220032004 Police: Stations1111 Squad cars11121212 Fire stations3333 Other public works: Streets (miles)125.3125.3125.3125.3 Highways (miles)10.310.310.310.3 Streetlights1,0541,0541,0541,054 Traffic signals35353535 Parks, recreation and naturalist: Acreage682682682682 Playgrounds29292929 Baseball/softball diamonds22222222 Soccer/football fields2222 Community centers1111 Water: Water mains (miles)112.9112.9112.9112.9 Fire hydrants998998998998 Storage capacity (gallons)6.5 million6.5 million6.5 million6.5 million Wastewater: Sanitary sewers (miles)103.0103.0103.0103.0 Storm sewers (miles)49.349.349.349.3 Sources: Various City departments. 168 Table 17 Fiscal Year 200520062007200820092010 111111 121212121212 333333 125.3125.3125.3125.3125.3125.3 10.310.310.310.310.310.3 1,0551,0551,0591,0591,0591,059 353636363636 682682682682682682 292929292929 222222222222 222222 111111 112.9113.0113.0113.0113.0113.0 1,0121,0131,0131,0131,0131,013 6.5 million6.5 million6.5 million6.5 million6.5 million6.5 million 103.0103.0103.0103.0103.0103.0 50.052.052.052.052.052.0 169 CITY OF FRIDLEY 170