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2001 CAFR COMPREHENSIVE ANNUAL FINANCIAL REPORT I 1 � CITY OF FRIDLEY MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2001 a a a CITY OF FRIDLEY, MINNESOTA a Comprehensive Annual Financial Report — December 31, 2001 a a a a a a _ Prepared by: Finance Department Richard D. Pribyl a Finance Director a CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2001 TABLE OF CONTENTS EXHIBIT PAGE INTRODUCTORY SECTION •- Elected and Appointed Officials 3 City Administrative Organizational Structure 2001 4 City Manager's Letter of Transmittal 7 Chief Executive Officer's Letter of Transmittal 9 Certificate of Achievement for Excellence in Financial Reporting 19 FINANCIAL SECTION Independent Auditor's Report 23 General Purpose Financial Statements-Combined Financial Statements: Combined Balance Sheet-All Fund Types and Account Groups and Discretely Presented Component Unit A-1 29 Combined Statement of Revenues, Expenditures and Changes in Fund Balance-All Governmental Fund Types and Expendable Trust Funds and Discretely Presented Component Unit A-2 36 Combined Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual -General, Special Revenue and Budgeted Capital Projects Fund Types A-3 38 Combined Statement of Revenues, Expenses and Changes in Retained Earnings-All Proprietary Fund Types A-4 40 Combined Statement of Cash Flows-All Proprietary Fund Types A-5 41 Notes to Financial Statements 43 Financial Statements of Individual Funds: General Fund: i Comparative Balance Sheet B-1 74 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual B-2 75 Schedule of Revenues and Other Financing Sources- Budget and Actual B-3 76 Schedule of Expenditures and Other Financing Uses-Budget and Actual B-4 79 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT ,-k YEAR ENDED DECEMBER 31, 2001 TABLE OF CONTENTS EXHIBIT PAGE Special Revenue Funds: Combining Balance Sheet C-1 84 Combining Statement of Revenues, Expenditures and Changes in Fund Balance C-2 86 Cable TV Fund: Comparative Balance Sheet C-3 88 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual C-4 89 Grant Management Fund: ^ Comparative Balance Sheet C-5 90 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual C-6 91 Solid Waste Abatement Fund: Comparative Balance Sheet C-7 92 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual C-8 93 HRA Reimbursement Fund: Comparative Balance Sheet C-9 94 .-. Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual C-10 95 Drug and Gambling Forfeiture Fund: Comparative Balance Sheet C-11 96 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual C-12 97 Housing Revitalization Fund: Comparative Balance Sheet C-13 98 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual C-14 99 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2001 TABLE OF CONTENTS EXHIBIT PAGE Special Revenue Funds: (continued) Chemical Assessment Team Fund: Comparative Balance Sheet C-15 100 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual C-16 101 F. C. C. Donations Fund: Comparative Balance Sheet C-17 102 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual C-18 103 .. Police Activity Fund: Comparative Balance Sheet C-19 104 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual C-20 105 Debt Service Funds: Combining Balance Sheet D-1 108 Combining Statement of Revenues, Expenditures and Changes in Fund Balance D-2 109 Capital Projects Funds: Combining Balance Sheet E-1 113 Combining Statement of Revenues, Expenditures and Changes in Fund Balance E-2 114 Capital Improvements Fund: Comparative Balance Sheet E-3 116 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual E-4 117 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2001 TABLE OF CONTENTS EXHIBIT PAGE Enterprise Funds: Combining Balance Sheet F-1 120 Combining Statement of Revenues, Expenses and Changes in Retained Earnings F-2 121 Combining Statement of Cash Flows F-3 122 Liquor Fund: Comparative Balance Sheet F-4 123 — Comparative Statement of Revenues, Expenses and Changes in Retained Earnings F-5 124 Comparative Statement of Cash Flows F-6 125 Public Utilities Fund: .. Comparative Balance Sheet F-7 126 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings F-8 128 Comparative Statement of Cash Flows F-9 129 Internal Service Funds: Combining Balance Sheet G-1 132 Combining Statement of Revenues, Expenses and ,.. Changes in Retained Earnings G-2 133 Combining Statement of Cash Flows G-3 134 Employee Benefits Fund: Comparative Balance Sheet G-4 135 — Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-5 136 Comparative Statement of Cash Flows G-6 137 a CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2001 TABLE OF CONTENTS — EXHIBIT PAGE a Internal Service Funds: (continued) Self Insurance Fund: Comparative Balance Sheet G-7 138 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-8 139 Comparative Statement of Cash Flows G-9 140 Information Systems Fund: Comparative Balance Sheet G-10 141 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-11 142 Comparative Statement of Cash Flows G-12 143 Trust and Agency Funds: Combining Balance Sheet H-1 146 a Industrial Development Revenue Bond Trust Fund: — Comparative Statement of Revenues, Expenditures and Changes in Fund Balance H-2 147 All Agency Funds: Combining Statement of Changes in Assets and Liabilities H-3 148 General Fixed Assets Account Group: Comparative Schedule of General Fixed Assets I-1 150 a Schedule of Changes in General Fixed Assets-By Function and Activity 1-2 151 Schedule of General Fixed Assets-By Function and Activity 1-3 152 a General Long Term Debt Account Group: Comparative Schedule of General Long Term Debt J-1 154 a CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2001 TABLE OF CONTENTS EXHIBIT PAGE STATISTICAL SECTION: General Government Expenditures by Function - Last Ten Fiscal Years 1 157 General Revenues by Source-Last Ten Fiscal Years 2 158 Certified Property Tax Levies and Collections-Last Ten Fiscal Years 3 159 Estimated Market Value and Taxable Value of All Property- Last Ten Fiscal Years 4 160 Significant Minnesota Tax Policies 5 163 Tax Capacity Rates-Direct and Overlapping Governments-Last Ten Fiscal Years 6 164 Special Assessment Levies and Collections- Last Ten Fiscal Years 7 167 History of Certified Tax Levies and Tax Rates-Last Ten Fiscal Years 8 168 Ratio of Net General Bonded Debt to Taxable Value and Net Bonded Debt Per Capita - Last Ten Fiscal Years 9 171 Computation of Legal Debt Margin 10 172 Computation of Direct and Overlapping Bonded Debt and Comparative Debt Ratios 11 174 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Government Expenditures-Last Ten Fiscal Years 12 175 Revenue Bond Coverage- Last Ten Fiscal Years 13 176 Demographic Statistics-Last Ten Fiscal Years 14 177 Construction and Property Value- Last Ten Fiscal Years 15 178 Principal Taxpayers 16 179 Insurance Coverage 17 180 Miscellaneous Statistical Information 18 181 General Information 19 184 OMR INTRODUCTORY SECTION saMa Oft r• 1 CITY OF FRIDLEY, MINNESOTA ELECTED AND APPOINTED OFFICIALS December 31, 2001 ELECTED OFFICIALS Term of Office _ Expires December Mayor Y Scott J. Lund 2004 Councilmember At Large Robert R. Barnette 2004 Councilmember, Ward I Steven E. Billings 2002 Councilmember, Ward II Richard P. Wolfe 2002 Councilmember, Ward Ill Ann R. Bolkcom 2002 APPOINTED OFFICIALS City Manager William W. Burns City Attorney Frederic W. Knaak Prosecuting Attorney Carl J. Newquist City Clerk Debra A. Skogen Department Heads: Finance Director/Treasurer Richard D. Pribyl Director of Public Safety and Civil Defense David H. Sallman Fire Chief Charles J. McKusick Director of Public Works Jon H. Haukaas Director of Recreation and Natural Resources Jack G. Kirk Director of Community Development Scott J. Hickok a Director of Human Resources Deborah K. Dahl a r 3 CITY ADMINISTRATIVE ORGANIZATIONAL STRUCTURE 2001 Total Authorized Postions (144) CITY MANAGEMENT(3) City Manager Secretary to the City Manager Management Assistant FINANCE(24) POLICE (50) HUMAN RESOURCES(2) Finance Director-Treasurer Public Safety Director- Human Resources Director Secretary Emergency Mgmt Director HR Assistant (2) Staff Accountant Secretary OPERATIONS(37) ACCOUNTING (7) Deputy Public Safety Director .. Assistant Finance Director (5) Sergeant General Accountant (2) Corporal Accounting Specialist (29) Patrol Officer Utility Billing Clerk (3)Acctg-Data Processing Clerk TECHNICAL SUPPORT(11) Lieutenant ASSESSING (2) Projects Coordinator Assessor Crime Prevention Specialist Appraiser Outreach Coordinator Office Supervisor MIS(2) (5) Police Technicians MIS Coordinator (3 of the 5 are job shared) MIS Technician CSO Coordinator CITY CLERK-RECORDS (3) FIRE (8) City Clerk Receptionist-License Clerk Fire Chief Records Assistant Secretary Ass't Chief for Operations LIQUOR(6) Fire Marshall Liquor Operations Manager (4) Firefighter (5) Liquor Store Clerk .i. 4 PUBLIC WORKS(39) RECREATION & COMMUNITY NATURALIST(8) DEVELOPMENT(10) Director of Public Works Secretary Director of Recreation & Director of Community Oper Analyst Natural Resources Development Recreation Office Coordinator (2) Secretary ENGINEERING (4) Program Supervisor Assistant Public Works Director Program Specialist Engineering Tech Sr Citizen Prog Coord BUILDING INSPECTION (3) Engineering Tech Inspector Chief Building Official GIS Technician Building Inspector NATURALIST(3) Secretary PW MAINTENANCE (32) Natural Res. Coordinator Superintendant Interpretive Specialist PLANNING (4) Secretary Secretary Planning Coordinator Lead Mechanic (3) Planning Assistant (2) Mechanic, Level B Street Supervisor (8) Public Services Worker Water Supervisor (5) Public Services Worker Sewer Supervisor (5) Public Services Worker Park Supervisor (5) Public Services Worker 5 C[TYOF FRIDLEY FRIDLEY MUNICIPAL CENTER•6431 UNIVERSITY AVE.N.E. FRIDLEY,MN 55432•(763)571-3450•FAX(763)571-1287 May 24, 2002 The Honorable Mayor and Members of the City Council City of Fridley Council Members: In accordance with the Charter, we hereby transmit the Comprehensive Annual Financial Report of the City of Fridley for the year ended December 31, 2001. The Report includes an excellent and comprehensive letter from Richard D. Pribyl, Director of Finance and Alan D. Folie, Assistant Finance Director, which provides a brief description of some of the activities in which the City is currently involved. Also highlighted in the letter are some of the more important financial management practices employed by the City's administrative staff. I would like to express my appreciation and commendation to them and the Finance Department staff for the manner in which the accounts are kept and the Report presented. I would also like to express appreciation for the commendable administrative financial management of the several departments and divisions by the respective department and division heads as revealed by this Report. Very truly yours, William W. Burns City Manager 7 AM. CIZYOF FRIDLEY FRIDLEY MUNICIPAL CENTER•6431 UNIVERSITY AVE. N.E. FRIDLEY,MN 55432•(763)571-3450•FAX(763)571-1287 May 24, 2002 Dr.William W. Burns, City Manager Mayor Scott J. Lund and Council Members Fridley, Minnesota 55432 Dear Dr. Burns, Mayor Lund and Council Members: The Comprehensive Annual Financial Report of the City of Fridley, Minnesota, for the fiscal year ended December 31, 2001, is submitted herewith: The organization, form, and contents of this report were prepared in accordance with the standards prescribed by the Government Finance Officers Association of the United States and Canada, the American Institute of Certified Public Accountants, the Governmental Accounting Standards Board, and the Minnesota State Auditor's Office. The Government Finance Officers Association awards Certificates of Achievement for Excellence in Financial Reporting to those governments whose annual financial IMOD reports are judged to conform substantially to high standards of public financial reporting including accounting principles generally accepted in the United States of America promulgated by the Governmental Accounting Standards Board. The City of Fridley was awarded a Certificate of Achievement for Excellence in Financial Reporting for its annual financial report for the fiscal year 2000. It is our belief that the accompanying fiscal year 2001 financial report continues to meet program standards and it will be submitted to the Government Finance Officers Association for review. This report was prepared by the City's finance staff and consists of three sections: Section I is the introductory section and contains the table of contents, letter of transmittal, and other appropriate material. AMINE Section II is the financial section and contains the auditors' opinion, the combined financial statements, notes to the financial statements, combining statements, individual fund statements, and account group statements. Section III is the statistical section that includes the previous year's financial and non-financial data. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. We believe that the data, as presented, is accurate in all material aspects, that it is presented in a manner designed to fairly set forth the financial position and results of operations of the City as measured by the financial activity of its various funds, and that all disclosures necessary to enable the reader to gain the maximum understanding of the City's financial activity have been included. 9 CITY OF FRIDLEY,MINNESOTA The City's financial statements include all funds and account groups. Services provided by the City include police and fire protection; water and sanitary sewer utilities; the construction and maintenance of streets and infrastructure; recreational activities and cultural events. In addition to general government activities, the activities of the Fridley Housing and Redevelopment Authority (HRA) have been included since they serve the entire City and the City Council has the ability to control the actions of the HRA. However, the Fridley School Districts and the Fridley Volunteer Firefighters Relief Association have not met the established criteria for inclusion in the reporting entity, and accordingly are excluded from this report. GENERAL INFORMATION BACKGROUND AND LOCATION The City of Fridley is a first ring suburban community with a 2000 Census population of 27,449. The City is located 10 minutes north of downtown Minneapolis and 25 minutes northwest of downtown St. Paul. Incorporated in July of 1949, Fridley covers 11 square miles of area and is now home to some of the most important industries in the Midwest, nation, and the world. An industrial spine around the rail corridor has served the City well and has provided the city with nearly as many jobs as the number of citizens who reside in the community. Fridley is home to the largest number of employees in Anoka County. LOCAL ECONOMY _. Minneapolis - St. Paul and the surrounding metropolitan area has continued to experience a strong economy. Unemployment remains relatively low, though over the last year some major corporations experienced some downturn in their markets and some employee layoff activity was a result. Overall, ... the market place for local products and services remains strong. Continued long-term growth is anticipated as Fridley continues to aggressively pursue redevelopment opportunities. Phase I of the 1,000,000 square foot Medtronic World Headquarter campus was nearly completed by the beginning of the year 2001. With Phase I, came 520,000 square feet of new building valuation and a showplace setting along the intersection of Highway 1-694 and Highway 65. The estimated market value of the 3-phase project will be well over$100 million. At build-out of the campus, _ an additional 3,000 jobs will have been added to the City's already impressive employment figures. The existing Rice Creek Corporate campus is now being entirely renovated internally to function as the World Headquarters for Medtronic Inc.'s Cardiac Division. MAJOR INITIATIVES During the year 2001, the City continued its focus on the quality of its housing stock and enjoyed much success with its programs. With programs such as 6% Revolving Loan programs, citizens with qualifying incomes were given an opportunity to enjoy the benefits of these loans for their home improvement projects. A total of twenty-seven loans and grants were given with a total dollar amount of $349,234. Staff is very encouraged by the success of the programs and the enthusiasm of the public regarding the City's emphasis on re-investment in its community's housing stock. As a fully developed community, the City's number of new housing starts is low and may be unimpressive when compared to edge developments in the region; however, the City is proud of those housing starts it is seeing and is equally as proud of the residential re-investment that is occurring. In 2001, the Building Department issued 1,567 permits. Permits were issued for 15 residential single- family units, 8 townhouse units, no multiple dwelling units, 15 residential garages, and 629 residential 11 CITY OF FRIDLEY,MINNESOTA GENERAL INFORMATION (CONTINUED) alterations or additions. In the area of commercial and industrial development, 121 permits were issued ranging from 6 new starts to 7 wrecking and moving permits, with the remainder of activity including alterations and business sign applications. Internally, the 2002 budget work sessions were relatively free from major budgetary issues. The gap between revenues and expenditures increased in the 2002 budget from the 2001 budget. This increase was due mainly to increasing costs for personnel. Much of the discussion at the work sessions focused ..� on major expenditure proposals rather than budget detail. The budget sessions ended with an increase in property taxes and the planned use of$827,556 of reserves resulting in a balanced 2002 budget that Council adopted in December. PLANS FOR THE FUTURE The future for the City of Fridley may be filled with change and restructuring depending on future legislative actions that may change the state's tax structure, municipal redevelopment methods, and revenue streams. Traditional levels of service are a concern as the City looks at potential reductions in various state controlled tax sharing revenues and also tax revenues that had been generated from more traditional forms of redevelopment practices that are now restricted from use by the state. The City •► continues to applaud the efforts of the legislature to get a handle on unfunded state mandates, and the City will continue to investigate alternatives that will allow creative solutions to the delivery of services. In 2001 City officials watched the groundbreaking for a 28-unit town home development at a key entry point to the City along University Avenue. Appropriately named, Gateway East, the development will provide yet another alternative to comfortable, convenient living in the City of Fridley. With individual unit pricing at$160,000 to$190,000, staff is excited for the project. It has not only helped to fill a market segment that needs filling, but it has also begun to provide a bright new image as motorists travel through the community. Beyond the Gateway East development, the City of Fridley will embark on the complimentary anchor to the Gateway East development with a project called Gateway West, which will likely provide an additional 19 to 21 townhome units. The importance of this small development is the balance and positive image it will provide as people enter the community on University Avenue. Pftt Finally, a proposal by the North Star Corridor Development Authority proposes to connect Fridley to the region through the use of the existing Burlington Northern Santa Fe rail lines and new convenient passenger rail cars. The proposal would offer an alternative mode of transportation for residents who are commuting into Minneapolis or who now commute as far north as Rice, Minnesota. If the Fridley City Council ultimately approves the proposal, additional neighborhood and rail compatible development may occur on remaining acreage near the station site. Implementation of a citywide imaging system continued during 2001. This project will increase the availability of data and the efficiency in which City staff can access it and respond to resident's requests. Significant projects budgeted for 2002 in the five year capital improvement plan include: replacement of the pedestrian bridge at the Municipal Center; remodeling of the Municipal Garage; a major street reconstruction project in Ward 3; and the annual well, reservoir and pump house maintenance programs. 12 CITY OF FRIDLEY,MINNESOTA FINANCIAL INFORMATION INTERNAL CONTROLS In developing and improving the City's accounting system, consideration is given to the adequacy of internal accounting controls. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and the evaluation of costs and benefits requires estimates and judgments by management. All internal control evaluations occur within the above framework. We believe that the City's internal accounting controls adequately safeguard assets and provide reasonable assurance of the proper recording of financial transactions. • ■ BUDGETARY CONTROLS A complete budgetary system of accounts is maintained for the General and Special Revenue Funds. Budgetary control is maintained in compliance with the City Charter Requirements. The Charter provides that it is the duty of the City Manager to strictly enforce the provisions of the budget. The management policy of the City is such that the existence of a particular item or appropriation in the approved budget does not mean that it will or must be automatically expended. It is the policy of the City to control budgets at the expenditure category level. Budget adjustments between City divisions are made upon the approval of a resolution by the City Council. The City Charter provides that the City Council shall not have power to increase the total amount of the budget, whether by insertion of new items or otherwise, beyond the estimated revenue unless the actual revenue exceeds such revenue estimates, and in that event not beyond such actual revenue. There is a constant review process. Expenditures are not approved until it has been determined that 1) the expenditure is necessary, 2) adequate funds have been appropriated, and 3)funds are available. CASH MANAGEMENT All temporary cash surpluses during the year are invested in various securities that State statutes permit. The City's policy is to invest all available monies at competitive interest rates in accordance with the City's over-all fiscal plan coordinated with operating needs and programs projected over the ensuing 12-month period. Investment yields on investments held during the year ranged from 3.0% to 6.1%. DEBT ADMINISTRATION Net general bonded debt per capita and the percentage of the net general bonded debt to taxable value are useful indicators of the City's debt position. At December 31, 2001 the City of Fridley's debt service funds provided sufficient capital to cover the net general bonded debt. The City has numerous debt issues outstanding totaling $16,880,000. Of this outstanding debt, $615,000 represents special assessment debt with government commitment, $12,735,000 represents general obligation tax increment refunding bonds, and $3,530,000 represents general obligation water, sewer and storm water revenue bonds. The City of Fridley has, since 1982, maintained a credit rating of Aa1 on its long-term bonds. 13 CITY OF FRIDLEY,MINNESOTA FINANCIAL INFORMATION (CONTINUED) FISCAL DISPARITIES ow, The commonly referred to "Fiscal Disparity Law" was adopted by the Legislature in 1971. The area of the fiscal disparity district encompasses all the properties located within the seven-county metropolitan area. The law provides that 40% of all new commercial/industrial property valuations or growth be placed in an area wide"pool,"and shared according to specific criteria. TAX INCREMENT DISTRICTS The City Council took action on May 7, 1979 to form the first of twelve tax increment districts. In 1985, the individual districts were combined into one redevelopment district to more easily manage the overall activities. All of the districts have been established in economically depressed areas within the City. With the successful relationship that the City and the Housing and Redevelopment Authority have developed, many benefits have been derived. GENERAL GOVERNMENT FUNCTIONS The following schedule presents a summary of the General, Special Revenue, Debt Service, Capital Projects and Expendable Trust Funds' revenues for the fiscal year ended December 31, 2001. The most significant changes in revenues from the prior year were decreases in licenses and permits, intergovernmental revenue, and investment income. Licenses and permits decreased by$499,723 due sok to the decrease in building permits issued in 2001. Intergovernmental revenue decreased by $3,136,463 due in large part to the $2,242,586 in residual assets refunded to the City from the Public Employees Retirement Association's police consolidation account in 2000. The investment income decrease of$489,997 was due to decreasing yields, as well as having less money to invest during the year. Percent of Increase/ Revenues Amount Total (Decrease) Taxes and special assessments $4,579,022 36.91% $49,306 .. Licenses and permits 776,892 6.26% (499,723) Intergovernmental 4,032,903 32.51% (3,136,463) Charges for services 1,471,113 11.86% 79,910 Fines and forfeits 211,487 1.70% 14,355 Investment income 1,117,260 9.01% (489,997) Miscellaneous 217,023 1.75% (113,127) Total $12,405,700 100.00% ($4,095,739) The following schedule presents a summary of the General, Special Revenue, Debt Service, Capital Projects and Expendable Trust Funds' expenditures for the fiscal year ended December 31, 2001. The most significant change in expenditures from the prior year was an increase in debt service. This increase was due to the payment schedule for existing bonds. 14 CITY OF FRIDLEY,MINNESOTA FINANCIAL INFORMATION (CONTINUED) Percent of Increase/ Expenditures Amount Total _(Decrease) Current: General government $3,004,385 18.64% $116,324 Public safety 4,467,947 27.73% 75,922 Municipal center 241,662 1.50% 16,548 Public works 2,863,228 17.77% 201,301 Community development 708,749 4.40% (66,563) Recreation and naturalist 1,106,058 6.86% 74,884 Debt service 1,844,640 11.45% 785,868 Capital outlay 1,877,602 11.65% (47,060) Total $16,114,271 100.00% 1,157,224 General Fund Balance The fund balance is used to provide working capital for the fund until tax settlements and state aids are received in July and December of each year, to provide funds for unknown events that could have an adverse effect on the fund, and to help finance future budgets. In 1990 the City Council adopted a formal policy designating portions of the general fund's fund balance for working capital, subsequent year's expenditures, contingencies and for replacement of fixed assets at the end of each fiscal year. ENTERPRISE OPERATIONS The Enterprise Funds account for the financing of services to the general public in which all or most of the costs involved are paid in the form of charges by the users of such services. In the City of Fridley, Enterprise Funds are used to account for the operation of the public utility system and two municipal liquor stores. Except for ownership, Enterprise Funds bear a close resemblance to privately owned utility or service enterprises. Liquor Fund The Liquor Fund was established to account for the operation and financing of the City-owned municipal •11 liquor stores. The City began 2001 operating three liquor stores, one at 6289 Highway 65, one next to the Fridley Cub Foods Store, and the other at the Holly Shopping Center. In February of 2001, in order to increase efficiencies, the store at the Holly Shopping Center was closed. The City owns the store at the Highway 65 location and currently leases space for the other store. In 1984, the City changed its sales philosophy to the wholesale approach so that we could remain competitive with the three neighboring communities that use wholesale pricing. Retained earnings of the Liquor Fund were $1,975,567 on December 31, 2001 as compared to $1,940,508 at the close of the prior fiscal year. Income before operating transfers increased from $183,568 in 2000 to$335,059 in 2001. This increase is primarily due to the increase in sales at the store next to Cub Foods. Public Utilities Fund This fund accounts for the operation and financing of the City-owned sewer and water systems. The assets for the Water and Sewer Distribution system, originally financed by special assessments, were transferred from General Fixed Assets to the Public Utilities Fund in 1978. Additional Fixed Assets a 15 CITY OF FRIDLEY,MINNESOTA FINANCIAL INFORMATION (CONTINUED) were transferred in 1979, 1984, 1989, 1990, 1991, 1992, 1993, 1994 and 1995. Those improvements to the utility system paid for or financed directly by the Public Utilities Fund have always been carried in the Public Utilities Fund and depreciated. Retained earnings on December 31, 2001 were $15,421,398 compared to$14,999,268 at the close of the prior fiscal year. RISK MANAGEMENT The Self Insurance Fund was set up to account for all revenues and expenditures associated with the $50,000 deductible on the general liability policy. Self insuring a larger deductible has reduced the annual premiums that allow us to directly benefit from our good experience rating. In the future an analysis will be made of the feasibility of self insuring all or a portion of other policies. In 1990, $1,000,000 was transferred from the General Fund to the Self-Insurance Fund. OTHER INFORMATION PENSIONS City of Fridley employees are covered by one of three pension plans: 1) Fridley Fire Relief Association for Volunteer Firemen. 2) Public Employees Retirement Police and Fire Plan, covering the City's full-time Firemen and Police Officers. 3) Coordinated Public Employees Retirement Plan, which covers other City civilian employees. The employees covered by the Coordinated P.E.R.A. Plan are also covered by Social Security. The City is currently making all pension contributions required by law. For additional background information on the pension plans covering City employees, see Notes to the Financial Statements. INDEPENDENT AUDIT Section 7.13 of the City Charter requires an annual audit to be made of the books of account, financial records and transactions of all administrative departments of the City by a certified public accountant or the State Auditor's Office of the State of Minnesota. This requirement has been complied with and the opinion of HLB Tautges Redpath, Ltd. is included in this report. CERTIFICATE OF ACHIEVEMENT The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Fridley, Minnesota, for its comprehensive annual financial report for the fiscal year ended December 31, 2000. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both accounting principles generally accepted in the United States of America and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. 16 ANN CITY OF FRIDLEY,MINNESOTA OTHER INFORMATION (CONTINUED) ACKNOWLEDGMENTS The preparation of this report on a timely basis could not have been accomplished without the efficient and dedicated services of all members of the Finance Department, with special recognition to Craig Ellestad, Paul Eisenmenger, Carol Meyer, and Marcy Everette and to our auditors HLB Tautges Redpath, Ltd. for their professional guidance. We would also like to express our appreciation to the Mayor and members of the City Council for their interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner. Respectfully submitted, Richard D. Pribyl Alan D. F ie Finance Director Assistant Finance Director 17 Certificate of Achievement for Excellence in Financial Reporting Presented to City of Fridley, Minnesota For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 2000 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest — standards in government accounting and financial reporting. ti oFFrn� k� DFTN � — h Dro STA y w AND N ,&zew‘r I �NADA Pr sident corm s 900 $7EffiII 4:;r- New 4` Executive Director 19 •■ FINANCIAL SECTION 21 AUDITOR'S OPINION Oft HLB Tautges Redpath, Ltd. Certified Public Accountants and Consultants "' INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of the City Council City of Fridley, Minnesota We have audited the accompanying general purpose financial statements of the City of Fridley, Minnesota, as of and for the year ended December 31, 2001 as listed in the table of contents. These general purpose financial statements are the responsibility of the City of _ Fridley, Minnesota's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. ,_ Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Fridley, Minnesota, as of December 31, 2001, and the results of its operations and cash flows of its proprietary fund types for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards,we have also issued a report dated April 25, 2002 on our consideration of the City of Fridley, Minnesota's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grants. That report is an integral part of an audit performed in "' accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. 4810 White Bear Parkway,White Bear Lake, Minnesota 55110, USA Telephone: 651 426 7000 Fax: 651 426 5004 ...% HLB Tautges Redpath,Ltd is a member of International.A world-wide organization of nunting firms and business advisers. Our audit was performed for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The combining, individual fund and account group financial statements and statistical information as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the general purpose fmancial statements of the City of Fridley, Minnesota. Such information, except for that portion .r marked "unaudited," on which we express no opinion, has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly stated in all material respects, in relation to the general purpose financial statements taken as a whole. April 25, 2002 aid k HLB TAUTGES REDPATH, LTD. Certified Public Accountants 25 COMBINED FINANCIAL IAL STATEMENTS N The combined statements are intended to provide an overview and broad perspective of the City's financial position and operations.These statements present a summary set of information needed to control and analyze current operations to determine compliance with legal and budgetary limitations and to assist in financial planning.The following combined statements are presented: Combined Balance Sheet —All Fund Types and Account Groups and Discretely Presented Component Units Combined Statement of Revenues, Expenditures, and Changes in Fund Balances - All Governmental Fund Types and Expendable Trust Funds and Discretely Presented Component Units Combined Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual — General, Special Revenue Fund and Budgeted Capital Project Types Combined Statement of Revenues, Expenses and Changes in Retained Earnings — All Proprietary Fund Types Combined Statement of Cash Flows—All Proprietary Fund Types — Exhibit A-1 ,� Page 1 of 4 CITY OF FRIDLEY, MINNESOTA COMBINED BALANCE SHEET-ALL FUND TYPES AND ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNIT December 31, 2001 Governmental Fund Types Special Debt Capital General Revenue Service Projects Assets Cash and investments $6,217,785 $2,888,159 $8,884,314 $4,235,581 Cash with escrow agent - - - - — Receivables: Accounts 99,960 63,540 - - Taxes 171,068 - - 5,237 Special assessments 4,181 - 1,233,486 60,322 Mortgage - - - - Interest 153,477 - - - Loan receivable - - - - Loan receivable from component unit - - 707,497 - Developer note 65,320 - - - Due from other funds 76,598 - - - Due from component unit 13,040 1,545 - - Due from other governments 36,945 177,119 - - Inventories, at cost 37,344 - - - Prepaid items - - - _ Property and equipment (Net of depreciation) - - - - Amount available in debt service fund - - - - Amount to be provided for retirement of general long term debt - - - - — Total assets $6,875,718 $3,130,363 $10,825,297 $4,301,140 See Accompanying Notes to Financial Statements 29 CITY OF FRIDLEY, MINNESOTA COMBINED BALANCE SHEET-ALL FUND TYPES AND ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNIT December 31, 2001 Fiduciary Proprietary Fund Types Fund Types Internal Trust and Enterprise Service Agency Assets Cash and investments $8,830,747 $3,632,284 $45,498 Cash with escrow agent - - - Receivables: Accounts 1,341,775 39,397 2,979 Taxes 297 - 550 Special assessments 127,657 - - ,-• Mortgage - - - Interest - - - Loan receivable - - - Loan receivable from component unit - - - Developer note - - - Due from other funds 834 - - Due from component unit - 272 - Due from other governments 4,120 4,290 - Inventories, at cost 520,998 - - Prepaid items 186,484 - - -- Property and equipment (Net of depreciation) 20,539,340 344,359 - Amount available in debt service fund - - - Amount to be provided for retirement of general long term debt - - - Total assets $31,552,252 $4,020,602 $49,027 —, See Accompanying Notes to Financial Statements 30 Exhibit A-1 Page 2 of 4 - Account Groups Totals Primary Government Component Totals Reporting Entity General General Long (Memorandum Only) Unit (Memorandum Only) Fixed Assets Term Debt 2001 2000 HRA 2001 2000 $ - $ - $34,734,368 $36,126,489 $12,382,154 $47,116,522 $46,684,218 - - - - 912,134 912,134 - - - 1,547,651 1,535,205 2,889 1,550,540 1,535,205 - - 177,152 177,087 60,667 237,819 413,385 . - - 1,425,646 1,767,458 - 1,425,646 1,767,458 - - - - 2,171,954 2,171,954 2,839,162 - - 153,477 327,791 99,249 252,726 426,662 ,,,, - - - 6,300 - - 6,300 - - 707,497 757,662 - 707,497 757,662 - - 65,320 75,548 - 65,320 75,548 - - 77,432 61,759 2,286,104 2,363,536 2,586,223 - - - 14,857 14,408 - 14,857 14,408 - - 222,474 320,042 - 222,474 344,309 - - 558,342 690,650 - 558,342 690,650 - - - 186,484 185,555 - 186,484 185,555 42,383,633 - 63,267,332 62,016,902 - 63,267,332 62,016,902 - 9,595,015 9,595,015 9,334,218 - 9,595,015 9,334,218 - 3,754,985 3,754,985 5,120,782 - 3,754,985 5,120,782 - $42,383,633 $13,350,000 $116,488,032 $118,517,856 $17,915,151 $134,403,183 $134,798,647 See Accompanying Notes to Financial Statements 31 Exhibit A-1 Page 3 of 4 CITY OF FRIDLEY, MINNESOTA _ COMBINED BALANCE SHEET-ALL FUND TYPES AND ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNIT December 31,2001 r Governmental Fund Types Special Debt Capital General Revenue Service Projects Liabilities,fund equity and other credits Liabilities Accounts payable $216,244 $25,155 $ - $2,523 Deposits payable 19,463 10,192 - - Contracts payable - - - 2,475 Salaries payable 341,004 11,682 - 382 Compensated absences payable - - - - — Deferred revenue 138,029 149,228 1,230,282 64,675 Due to other funds 706 76,397 - - Due to primary government - - - - Due to other governments 17,823 757 - 3,406 Bonds payable - - - - Loan payable to primary government - - - - Accrued interest payable - - - - — Total liabilities 733,269 273,411 1,230,282 73,461 Fund equity and other credits Contributed capital _ _ - - Investment in general fixed assets - - - - Retained earnings: Reserved - - - - Unreserved - - - - Fund balance: .. Reserved 102,664 - 1,166,055 91,973 Unreserved: Designated 6,039,785 2,888,173 - 4,135,706 .— Undesignated - (31,221) 8,428,960 - Total fund equity and other credits 6,142,449 2,856,952 9,595,015 4,227,679 Total liabilities, fund equity and other credits $6,875,718 $3,130,363 $10,825,297 $4,301,140 See Accompanying Notes to Financial Statements 33 CITY OF FRIDLEY, MINNESOTA COMBINED BALANCE SHEET-ALL FUND TYPES AND ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNIT ... December 31,2001 Fiduciary Proprietary Fund Types Fund Types Internal Trust and Enterprise Service Agency Liabilities,fund equity and other credits Liabilities Accounts payable $406,043 $75,330 $ - Deposits payable - - 12,591 Contracts payable - - - "` Salaries payable 37,661 68,910 - Compensated absences payable - 765,918 - Deferred revenue - - 486 .. Due to other funds 128 - 201 Due to primary government - - - Due to other governments 68,627 - 14,203 Bonds payable 3,513,709 - - ' ■ Loan payable to primary government - - - Accrued interest payable 71,609 - - Total liabilities 4,097,777 910,158 27,481 . Fund equity and other credits r, Contributed capital 10,057,510 1,826,917 - Investment in general fixed assets - - - Retained earnings: Reserved 9,348,000 175,463 - 'd' Unreserved 8,048,965 1,108,064 - Fund balance: Reserved - - - Unreserved: Designated - - - Undesignated - - 21,546 Total fund equity and other credits 27,454,475 3,110,444 21,546 .... Total liabilities,fund equity and other credits $31,552,252 $4,020,602 $49,027 .-, .1. See Accompanying Notes to Financial Statements .. 34 Exhibit A-1 Page 4 of 4 - Account Groups Totals Primary Government Component Totals Reporting Entity General General Long (Memorandum Only) Unit (Memorandum Only) Fixed Assets Term Debt 2001 2000 HRA 2001 2000 $ - $ - $725,295 $570,963 $59,950 $785,245 $604,831 - - 42,246 83,872 - 42,246 83,872 ..., - - 2,475 22,132 264,638 267,113 22,132 - - 459,639 441,405 1,647 461,286 444,611 - - 765,918 805,858 - 765,918 805,858 - - 1,582,700 1,823,903 43,935 1,626,635 1,863,430 - - - 77,432 61,759 - 77,432 2,586,223 - - - - 14,857 14,857 14,408 - - 104,816 141,190 2,286,104 2,390,920 141,190 - - 13,350,000 16,863,709 18,316,779 - 16,863,709 18,316,779 - - - - 707,497 707,497 757,662 - - 71,609 78,231 - 71,609 78,231 _- 0 13,350,000 20,695,839 22,346,092 3,378,628 24,074,467 25,719,227 - - 11,884,427 12,255,397 - 11,884,427 12,255,397 42,383,633 - 42,383,633 40,903,920 - 42,383,633 40,903,920 - - 9,523,463 9,408,325 - 9,523,463 9,408,325 - - 9,157,029 9,010,584 - 9,157,029 9,010,584 - - 1,360,692 1,928,856 5,201,954 6,562,646 4,867,018 - - 13,063,664 14,743,129 - 13,063,664 14,743,129 - - 8,419,285 7,921,553 9,334,569 17,753,854 17,891,047 42,383,633 0 95,792,193 96,171,764 14,536,523 110,328,716 109,079,420 - $42,383,633 $13,350,000 $116,488,032 $118,517,856 $17,915,151 $134,403,183 $134,798,647 See Accompanying Notes to Financial Statements 35 CITY OF FRIDLEY, MINNESOTA „� COMBINED STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE-ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS AND DISCRETELY PRESENTED COMPONENT UNIT Year Ended December 31, 2001 "^ Governmental Fund Types Special Debt Capital `` General Revenue Service Projects Revenues: Taxes $4,076,689 $ - $ - $74,841 ... Special assessments 5,059 - 407,575 14,858 Licenses and permits 600,956 175,936 - - Intergovernmental revenue 3,361,703 656,200 - 15,000 Charges for services 1,262,412 208,701 - - Fines and forfeits 163,015 48,472 - - Investment income 334,828 127,215 418,625 234,959 Miscellaneous 112,320 4,300 37,263 63,140 '" Total revenues 9,916,982 1,220,824 863,463 402,798 Expenditures: ... Current: General government 1,967,881 1,036,504 - - Public safety 4,418,340 49,607 - - Municipal center 241,662 - - - "'.. Public works 2,687,201 - - 176,027 Community development 708,749 - - - Recreation and naturalist 1,102,451 3,607 - - ,., Debt service - - 1,844,640 - Capital outlay 387,927 17,927 - 1,471,748 Total expenditures 11,514,211 1,107,645 1,844,640 1,647,775 Excess (deficiency)of revenues over(under)expenditures (1,597,229) 113,179 (981,177) (1,244,977) Other financing sources (uses): o:. Sale of fixed assets 31,531 - - - Operating transfers in 876,005 108,356 - 917,255 Operating transfers out (30,335) (278,457) (242,500) (907,655) „� Operating transfers from component unit - - 1,573,296 - Operating transfers to component unit - - (88,822) - Operating transfers from primary government - - - - Operating transfers to primary government - - - - "' Total other financing sources (uses) 877,201 (170,101) 1,241,974 9,600 Excess (deficiency)of revenues and other financing sources over(under) expenditures .. and other financing uses (720,028) (56,922) 260,797 (1,235,377) Fund balance-January 1 6,862,477 2,913,874 9,334,218 5,463,056 Prior period adjustment - - - - Fund balance-January 1 as restated 6,862,477 2,913,874 9,334,218 5,463,056 Fund balance- December 31 $6,142,449 $2,856,952 $9,595,015 $4,227,679 See Accompanying Notes to Financial Statements 36 Exhibit A-2 - - Fiduciary Fund Type Totals Primary Government Component Totals Reporting Entity ". Expendable (Memorandum Only) Unit (Memorandum Only) Trust 2001 2000 HRA 2001 2000 $ - $4,151,530 $3,982,030 $3,362,340 $7,513,870 $6,990,719 - 427,492 547,686 - 427,492 547,686 - 776,892 1,276,615 - 776,892 1,276,615 - 4,032,903 7,169,366 9,518 4,042,421 7,278,128 - 1,471,113 1,391,203 - 1,471,113 1,391,203 - 211,487 197,132 - 211,487 197,132 1,633 1,117,260 1,607,257 584,568 1,701,828 2,255,304 217,023 330,150 403,026 620,049 825,493 1,633 12,405,700 16,501,439 4,359,452 16,765,152 20,762,280 - 3,004,385 2,888,061 571,799 3,576,184 3,809,802 - 4,467,947 4,392,025 - 4,467,947 4,392,025 - 241,662 225,114 - 241,662 225,114 - 2,863,228 2,661,927 - 2,863,228 2,661,927 - 708,749 775,312 - 708,749 775,312 - 1,106,058 1,031,174 - 1,106,058 1,031,174 - 1,844,640 1,058,772 37,264 1,881,904 1,098,453 - 1,877,602 1,924,662 762,048 2,639,650 2,161,233 0 16,114,271 14,957,047 1,371,111 17,485,382 16,155,040 1,633 (3,708,571) 1,544,392 2,988,341 (720,230) 4,607,240 - 31,531 33,666 - 31,531 33,666 - 1,901,616 2,495,215 3,141,314 5,042,930 5,463,121 - - (1,458,947) (2,209,981) (3,141,314) (4,600,261) (5,177,887) - 1,573,296 776,188 - 1,573,296 776,188 _ - (88,822) (78,919) - (88,822) (78,919) - - - 88,822 88,822 78,919 - - - (1,573,296) (1,573,296) (776,188) 0 1,958,674 1,016,169 (1,484,474) 474,200 318,900 1,633 (1,749,897) 2,560,561 1,503,867 (246,030) 4,926,140 19,913 24,593,538 22,032,977 12,907,656 37,501,194 32,575,054 - - - 125,000 125,000 - 19,913 24,593,538 22,032,977 13,032,656 37,626,194 32,575,054 $21,546 $22,843,641 $24,593,538 $14,536,523 $37,380,164 $37,501,194 See Accompanying Notes to Financial Statements 37 CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL GENERAL,SPECIAL REVENUE AND BUDGETED CAPITAL PROJECTS FUND TYPES Year Ended December 31,2001 '-■ General Special Revenue Funds •••■ Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) Revenues: o. Taxes $4,051,314 $4,076,689 $25,375 $ - $ - $ - Special assessments 6,000 5,059 (941) - - - Licenses and permits 839,000 600,956 (238,044) 144,000 175,936 31,936 , Intergovernmental revenue 3,322,051 3,361,703 39,652 673,609 656,200 (17,409) � Charges for services 1,205,735 1,262,412 56,677 204,123 208,701 4,578 Fines and forfeits 190,500 163,015 (27,485) 16,599 48,472 31,873 Investment income 435,000 334,828 (100,172) 121,000 127,215 6,215 - Miscellaneous 162,145 112,320 (49,825) 17,906 4,300 (13,606) Total revenues 10,211,745 9,916,982 (294,763) 1,177,237 1,220,824 43,587 Expenditures: Current: General government 2,063,780 1,967,881 95,899 1,062,467 1,036,504 25,963 Public safety 4,425,273 4,418,340 6,933 49,607 49,607 - Municipal center 241,662 241,662 - - - - " Public works 2,705,233 2,687,201 18,032 - - - Community development 750,592 708,749 41,843 - - - Recreation and naturalist 1,102,451 1,102,451 - 3,607 3,607 - Capital outlay 395,505 387,927 7,578 267,927 17,927 250,000 Total expenditures 11,684,496 11,514,211 170,285 1,383,608 1,107,645 275,963 Excess(deficiency)of revenues over(under)expenditures (1,472,751) (1,597,229) (124,478) (206,371) 113,179 319,550 .� Other financing sources(uses): Sale of fixed assets 20,000 31,531 11,531 - - - Operating transfers in 882,424 876,005 (6,419) 358,356 108,356 (250,000) �` Operating transfers out (30,335) (30,335) - (284,876) (278,457) 6,419 Total other financing sources(uses) 872,089 877,201 5,112 73,480 (170,101) (243,581) .. Excess(deficiency) of revenues and other financing sources over(under) expenditures and other financing uses ($600,662) (720,028) ($119,366) ($132,891) (56,922) $75,969 •-■ Fund balance-January 1 6,862,477 2,913,874 Residual equity transfer - - Fund balance-December 31 $6,142,449 $2,856,952 See Accompanying Notes to Financial Statements 38 Exhibit A-3 Totals Budgeted Capital Projects Funds (Memorandum Only) Variance Variance Favorable Favorable 2000 Budget Actual (Unfavorable) Budget Actual (Unfavorable) Actual $70,550 $74,841 $4,291 $4,121,864 $4,151,530 $29,666 $3,982,030 - 1,206 1,206 6,000 6,265 265 9,969 - - - 983,000 776,892 (206,108) 1,276,615 - 15,000 15,000 - 4,010,660 4,032,903 22,243 7,169,366 - - - 1,409,858 1,471,113 61,255 1,391,203 - - - 207,099 211,487 4,388 197,132 417,225 224,402 (192,823) 973,225 686,445 (286,780) 996,676 30,000 34,265 4,265 210,051 150,885 (59,166) 284,245 532,775 349,714 (183,061) 11,921,757 11,487,520 (434,237) 15,307,236 - - - 3,126,247 3,004,385 121,862 2,888,061 - - - 4,474,880 4,467,947 6,933 4,392,025 - - - 241,662 241,662 - 225,114 99,177 99,177 - 2,804,410 2,786,378 18,032 2,552,991 - - - 750,592 708,749 41,843 775,312 - - - 1,106,058 1,106,058 - 1,031,174 632,577 537,844 94,733 1,296,009 943,698 352,311 851,991 731,754 637,021 94,733 13,799,858 13,258,877 540,981 12,716,668 (198,979) (287,307) (88,328) (1,878,101) (1,771,357) 106,744 2,590,568 - - - 20,000 31,531 11,531 33,666 - - - 1,240,780 984,361 (256,419) 519,467 (985,310) (907,655) 77,655 (1,300,521) (1,216,447) 84,074 (1,273,015) (985,310) (907,655) 77,655 (39,741) (200,555) (160,814) (719,882) - ($1,184,289) (1,194,962) ($10,673) ($1,917,842) (1,971,912) ($54,070) 1,870,686 4,971,191 14,747,542 12,876,856 205,654 205,654 - $3,981,883 $12,981,284 $14,747,542 See Accompanying Notes to Financial Statements 39 Exhibit A-4 CITY OF FRIDLEY, MINNESOTA -. COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS-ALL PROPRIETARY FUND TYPES Year Ended December 31,2001 Proprietary Fund Types Totals Internal (Memorandum Only) Sales and cost of sales: Enterprise Service 2001 2000 Sales $5,011,326 $ - $5,011,326 $5,200,127 Cost of sales 3,907,397 - 3,907,397 4,134,935 Gross profit 1,103,929 0 1,103,929 1,065,192 Operating revenues: Water sales and sewer rents 4,994,669 - 4,994,669 5,150,374 Charges for services - 693,554 693,554 688,926 Other revenues 8,911 58,102 67,013 13,403 Total operating revenues 5,003,580 751,656 5,755,236 5,852,703 Operating expenses: Personal services 1,524,258 8,429 1,532,687 1,539,671 Supplies and other charges 3,390,654 831,759 4,222,413 4,012,651 Depreciation 1,050,852 151,029 1,201,881 1,118,379 Total operating expenses 5,965,764 991,217 6,956,981 6,670,701 Operating income (loss) 141,745 (239,561) (97,816) 247,194 Nonoperating revenues (expenses): Intergovernmental revenue - - - 34,945 Investment income 401,243 185,719 586,962 855,648 Debt service (176,142) - (176,142) (199,893) Special assessments 9,378 - 9,378 30,271 `" Gain (loss)on disposal of fixed assets 7,400 - 7,400 (59,554) Other revenues 3,500 - 3,500 - Total nonoperating revenues (expenses) 245,379 185,719 431,098 661,417 Income (loss) before operating transfers 387,124 (53,842) 333,282 908,611 Operating transfers: Operating transfer in - 7,331 7,331 - Operating transfer out (300,000) (150,000) (450,000) (285,234) Total operating transfers (300,000) (142,669) (442,669) (285,234) Net income (loss) 87,124 (196,511) (109,387) 623,377 Credit arising from transfer of depreciation on contributed capital 370,065 905 370,970 373,092 Retained earnings-January 1 16,939,776 1,479,133 18,418,909 17,422,440 Retained earnings-December 31 $17,396,965 $1,283,527 $18,680,492 $18,418,909 01. See Accompanying Notes to Financial Statements I- 40 Exhibit A-5 CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES Year Ended December 31,2001 — Proprietary Fund Types Totals Internal (Memorandum Only) Enterprise Service 2001 2000 Cash flows from operating activities: " Operating income(loss) $141,745 ($239,561) ($97,816) $247,194 Adjustments to reconcile operating income(loss)to net cash flows from operating activities: Depreciation 1,050,852 151,029 1,201,881 1,118,379 Change in assets and liabilities: – Decrease(increase) in receivables 91,892 (17,795) 74,097 (43,928) Decrease(increase) in due from other funds 911 - 911 (846) _. Decrease(increase) in due from component unit - 272 272 (518) Decrease(increase) in due from other governments (979) (4,290) (5,269) 25,851 Decrease(increase) in inventories 131,139 - 131,139 102,202 — Decrease(increase) in prepaid items (929) - (929) 693 Increase(decrease)in payables 107,390 (32,783) 74,607 (244,229) Net cash flows from operating activities 1,522,021 (143,128) 1,378,893 1,204,798 — Cash flows from noncapital financing activities: Intergovernmental revenue - - - 34,945 Operating transfers in (out) (300,000) (142,669) (442,669) (285,234) Special assessment collections 9,378 - 9,378 30,271 Other non-capital items 3,500 - 3,500 - Net cash flows from noncapital financing activities (287,122) (142,669) (429,791) (220,018) — Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (742,985) (241,347) (984,332) (719,322) Principal paid on revenue bonds (350,000) - (350,000) (1,443,070) Interest and paying agent fees on revenue bonds (174,212) - (174,212) (199,893) Proceeds from sale of fixed assets 19,134 - 19,134 - Net cash flows from capital and related financing activities (1,248,063) (241,347) (1,489,410) (2,362,285) — Cash flows from investing activities: Investment income 401,243 185,719 586,962 855,648 Net increase(decrease) in cash and cash equivalents 388,079 (341,425) 46,654 (521,857) Cash and cash equivalents-January 1 8,442,668 3,973,709 12,416,377 12,938,234 Cash and cash equivalents-December 31 $8,830,747 $3,632,284 $12,463,031 $12,416,377 See Accompanying Notes to Financial Statements 41 NOTES TO FINANCIAL STATEMENTS • CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2001 1. Summary of Significant Accounting Policies The City of Fridley was incorporated July 1, 1949, under Chapter 410.03 of the Statutes of the State of Minnesota providing for a council-manager form of government under the "Home Rule Charter City" concept. The City provides the following services as authorized by its charter: general administrative services, public safety (police and fire), public improvements, planning and zoning, and culture and recreation. The accounting policies of the City of Fridley conform to generally accepted accounting policies applicable to governmental units. The following is a summary of the more significant policies: A. Principles used in the determination of the scope of the Governmental entity The City has implemented Government Accounting Standards Boards Statement 14, The Financial Reporting Entity. As required by Statement 14, these financial statements present the City and its component units. The component unit discussed below is included in the reporting entity because of the significance of their operation and financial relationship with the City. _ Discretely Presented Component Unit - The Fridley Housing and Redevelopment Authority(HRA) is governed by commissioners appointed by the Fridley City Council. The HRA is responsible for providing housing and redevelopment assistance to the City and its residents. Funding for the various programs administered by the HRA is provided through �• the issuance of tax increment revenue bonds and general obligation tax increment bonds guaranteed by the City. Complete financial statements of the HRA may be obtained from William W. Burns, Executive Director, 6431 University Avenue NE, Fridley, Minnesota 55432. B. Fund Accounting The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures, or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the financial statements in this report, into seven generic fund types and three broad categories as follows: GOVERNMENTAL FUNDS Governmental Funds include the General Fund, Special Revenue Funds, Debt Service Funds and Capital Projects Funds. The Governmental Fund measurement focus is based upon the determination of financial position and changes in financial position (sources, uses and balances of financial resources rather than upon net income determination). These funds are maintained on the modified accrual basis of accounting (explained further under Significant Accounting Policies). 43 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2001 General Fund - The General Fund is the primary operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds -Special Revenue Funds are used to account for the proceeds of certain specific revenue sources that are restricted to expenditures for specified purposes. Debt Service Funds - Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest, and related costs. Capital Projects Funds - Capital Projects Funds are used for the acquisition or construction of major capital facilities other than those financed by Proprietary Funds. PROPRIETARY FUNDS Proprietary Funds include Enterprise Funds and Internal Service Funds. The Proprietary /=• Fund measurement focus is based upon the determination of net income, financial position and changes in financial position. The accounting principles generally accepted in the United States of America here are those applicable to similar businesses in the private sector and thus these funds are maintained on the accrual basis of accounting. Enterprise Funds - Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises - where the intent is that -� the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. Internal Service Funds - Internal Service Funds are used to account for the financing of goods or services provided by one department to other departments of the City on a cost- reimbursement basis. FIDUCIARY FUNDS Fiduciary Funds include Expendable Trust and Agency Funds. The measurement focus of the Expendable Trust Funds is the same as Governmental Funds and is, therefore, maintained on the modified accrual basis of accounting. Trust Fund - The Trust Fund is used to account for assets held by the City in a trustee capacity for individuals, private organizations, other governments, and/or all other funds. The City's Trust Fund is classified as an Expendable Trust Fund and is accounted for in essentially the same manner as Governmental Funds. Agency Funds - Agency Funds are clearing type funds for the collection of taxes or deposits held in trust, on behalf of individuals, private organizations and other governments. The funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operation. 44 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2001 C. Measurement Focus The accounting and reporting treatment applied to a fund is determined by its measurement focus. All Governmental Funds and Expendable Trust Funds are accounted for on a spending or"current financial resources" measurement focus. This means that only current assets and current liabilities are generally included on the balance sheets. (Their reported fund balance is considered a measure of"available spendable resources.") Governmental Fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. Fixed assets used in Governmental Fund type operations (general fixed assets) are recorded at historical costs and accounted for in the General Fixed Assets Account Group. Public domain ("infrastructure") general fixed assets consisting of roads, bridges, curbs and gutters, are capitalized along with other general fixed assets. No depreciation has been provided on general fixed assets. Long-term liabilities expected to be financed from Governmental Funds are accounted for in the General Long-Term Debt Account Group, not in the Governmental Funds. These two account groups are not"funds." They are concerned only with the measurement of financial position. They are not involved with measurement of results of operations. Noncurrent portions of long-term receivables due to Governmental Funds are reported on their balance sheets, in spite of their measurement focus. However, special reporting treatments are used to indicate in all Governmental Funds that they should not be considered "available spendable resources," since they do not represent net current assets. Recognition of revenues in these funds represented by noncurrent receivables is deferred until they become current receivables. Because of their spending measurement focus, expenditure recognition for Governmental Fund types excludes amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as Governmental Fund type expenditures or fund liabilities. They are instead reported as liabilities in the General Long- Term Debt Account Group. Proprietary Funds are accounted for on a cost of services or "capital maintenance" measurement focus. This means that all assets, including fixed assets, and all liabilities, including long-term liabilities, associated with their activity are included on their balance sheets. Their reported fund equity is segregated into contributed capital and retained earnings components. Proprietary Fund type operating statements present increases (revenues)and decreases (expenses) in net total assets. 45 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2001 D. Basis of Accounting Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. Governmental Funds and Expendable Trust Funds are accounted for using the modified ., accrual basis of accounting. Their revenues are recognized when they become susceptible to accrual, i.e., both measurable and available. Substantially all revenues are accrued. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred, except for principal and interest on general long-term debt which is recognized when due. Agency Fund assets and liabilities are accounted for on the modified accrual basis of accounting. Proprietary Funds are accounted for using the accrual basis of accounting. Revenues are recognized when they are earned, and expenses are recognized when they are incurred. The City has implemented Statement No. 20 of the Governmental Accounting Standards Board (GASB), Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting. This statement provides guidance on business-type accounting and financial reporting for proprietary activities. Proprietary activities should apply to all applicable GASB pronouncements as well as the following pronouncements issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements: Statements of Interpretations of the Financial Accounting Standards Board (FASB), Accounting Principles Board Opinion, and Accounting Research Bulletins of the Committee on Accounting -- Procedures. In addition, a proprietary activity may elect to apply all FASB Statements and Interpretations issued after November 30, 1989, except for those that conflict with GASB pronouncements. The City has elected not to apply FASB Statements and Interpretations .■ issued after November 30, 1989. E. Budgets and Budgetary Accounting The City Charter grants the City Council full authority over the financial affairs of the City. The City Manager is charged with the responsibility of preparing the estimates of the annual budget and the enforcement of the provisions of the budget as specified in the City Charter. Upon adoption of the annual budget resolution by the Council, it becomes the formal appropriation budget for City operations. All budget adjustments must be approved by the Council. 46 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS — December 31,2001 The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is legally enacted through passage of a resolution. 4. The City Council may authorize transfer of budgeted amounts between departments within any fund. 5. Reported budget amounts are as originally adopted or as amended by Council approved transfers. The City Charter limits appropriations to the total estimated - revenues and fund balances. If actual revenues exceed the original estimates, appropriations may be increased by the Council up to the amount of revenue increases. There were no supplemental appropriations required or made during the year. 6. All budget amounts lapse at the end of the year to the extent they have not been expended or encumbered. Encumbrances are reappropriated into the following year's budget. 7. Annual budgets are legally adopted for the General Fund, Special Revenue Funds and Capital Improvement Capital Projects Fund. Formal budgeting integration is employed as a management control device during the year for each of these funds. Formal budgetary integration is not employed for Debt Service Funds because effective budgetary control is achieved through the bond indenture provisions. Budgetary control for other Capital Projects Funds is accomplished through the use of project controls. (See Note 16 for further information on budgeted and unbudgeted Capital Projects Funds.) 8. 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. 9. As required by the City Charter, budgetary control is maintained within department at the level of three major categories of expenditures: salaries and wages; ordinary expenses; and capital outlay. This is the level of control at which expenditures may not legally exceed appropriations. 10. The General Fund budget includes prior year encumbrances which were reappropriated to the current year. Expenditures for the items encumbered are included in the current year's expenditures. 47 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2001 F. Assets, Liabilities and Fund Equity 1) Cash and Cash Equivalents,and Investments Cash balances from all funds are combined and invested to the extent available in certificates of deposit, U.S. government securities and other securities authorized by —, State Statute. 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. Investments with original maturities of three months or less are classified as cash equivalents. The City provides temporary advances to funds that have insufficient cash balances by means of an advance from the Internal Service and Enterprise Funds. This is classified as an interfund payable in the fund receiving the advance and as an offsetting interfund receivable in the Internal Service and Enterprise Funds. In accordance with authorized investment laws, the City invests in various mortgage- backed securities, such as collateralized mortgage obligations. These securities are reported at cost in the balance sheet. They are reported in aggregate as U.S. Government Agencies in the disclosure of custodial credit risk. (See Note 2 on Investments). 2) Receivables Property Taxes The property tax levy was set by the City Council in November and was certified to the County for collection the following year. In Minnesota, counties act as collection agents for all property taxes. The County spreads the levies over all taxable property in the City. Such taxes become ..., receivables of the City as of January 1. Property taxes are payable in equal installments by property owners to the County as follows: Personal property- February 28 and June 30 Real property-May 15 and October 15 The County remits the collections to the City and other taxing districts four times a year, in January, April, July and December. During 2001 taxes were adjusted downward $45,551 by Anoka County due to abatements and court ordered settlements. Unpaid taxes at December 31 become liens on the respective property and are classified in the financial statements as delinquent taxes receivable. The receivable is fully offset by deferred revenue as it is not available to finance current expenditures. Taxes payable on homestead property (as defined by State Statutes) are partially reduced by Homestead and Agriculture Credit Aid. This aid is paid to the City by the State in lieu of taxes levied against homestead property. The State remits this aid in two equal installments in July and December each year. 48 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS "` December 31, 2001 Special Assessments Receivable Special assessments are levied against the benefited properties for the assessable costs of special assessment improvement projects in accordance with State Statutes. The City usually adopts the assessment rolls when the individual projects are complete - or substantially complete. The assessments are collectible over a term of years generally consistent with the term of years of the related bond issue. Collection of annual installments (including interest) is handled by the County in the same manner as property taxes. Property owners are allowed to prepay total future installments without interest or prepayment penalties. Special assessments receivable includes the following components: Unremitted - amounts collected by Anoka County and not remitted to the City prior to year end. Delinquent-amounts billed to property owners but not paid. Deferred - assessment installments which will be billed to property owners in future years. 3) Inventories Inventory in the General Fund consists of expendable supplies held for consumption and is recorded at cost on a first in first out basis. The cost is recorded as an expenditure at the time individual inventory items are used. Reported inventories are equally offset by a fund balance reserve which indicates that they do not constitute "available spendable resources" even though they are a component of net current assets. Proprietary Funds inventory items are expensed at the time they are sold or used. (Consumption method). Liquor inventories are recorded on the average cost basis. 4) Property and Equipment/General Fixed Assets All fixed assets are recorded at historical cost or estimated historical cost, if the original cost was not available. Donated fixed assets are carried at the fair market value on the date donated. Additions to general fixed assets for general City purposes, including public domain (infrastructure) fixed assets are recorded as expenditures of the applicable fund in the year in which the fixed asset was purchased or constructed, and are capitalized in the General Fixed Asset Account Group. Depreciation is not recorded on these assets. 49 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2001 Property and equipment of the Proprietary Funds are capitalized in these funds. Depreciation of exhaustible property and equipment of the Proprietary Funds is charged as an expense against their operations and accumulated depreciation is reported on Proprietary Fund balance sheets. Depreciation has been provided over the estimated useful lives using the straight line method. The estimated useful lives are as follows: Improvements Other Than Building 20-50 years Buildings 20 -50 years Machinery and Equipment 5- 10 years Land N/A 5) Compensated Absences P.., 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 I., 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. 6) Encumbrances Encumbrances represent purchase commitments. Encumbrances outstanding at year end are reported as reservations of fund balance since they do not constitute expenditures or liabilities. G. Revenues, Expenditures and Expenses The following transactions are accounted for as described below: General Property Taxes/Special Assessments - Revenue is recognized in the year of collection, with amounts due from the County and received early in the following year set up as receivable (unremitted receivables). Uncollected (delinquent) taxes and special assessments receivable are fully offset by deferred revenue until they become available to finance current expenditures. General property taxes and special assessments are recognized when cash is received to prevent overstating due to delinquencies. Principal Portion of Special Assessments - Revenue is recognized in the year the assessments are collected. Interest Revenue on Special Assessments Receivable - Interest revenue is recognized in the year of collection of the current principal installment. 50 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2001 Intergovernmental Revenue - Intergovernmental revenue in the form of state aids are recorded as revenue when allocations are made by statutory formula. Other ■ ■ intergovernmental revenue received as reimbursements for specific purposes or projects are recognized based upon the expenditures incurred. Intergovernmental revenue received through abatements or shares are recorded in the year determined to be measurable and available. Investment Income- Interest is recorded as revenue in the year earned. "' Water and Sewer Service Charges- Revenue is recognized when earned with no allowance for uncollectibles as delinquent accounts are certified as a special assessment lien against the property billed. Unbilled service charges are included in receivables at year end. Other Revenues - Licenses, fines, penalties and miscellaneous revenues are recorded as revenues when received in cash because they are generally not measurable until actually received. Interest Expense on Bonded Indebtedness - Interest expense is recorded as an expenditure when paid in the Governmental Fund types and accrued when incurred in the Proprietary Fund types. Bond and Interest Payments Due January 1 - Expenditures are recognized when amounts are remitted to the paying agent(usually in December)for payment of bonds and interest. H. Comparative Data Comparative total data for the prior year have been presented in the accompanying combined financial statements in order to provide an understanding of changes in the City's financial position and operations. However, comparative (i.e., presentation of prior year totals by fund type) data have not been presented in all statements since their inclusion would make the statements unduly complex and difficult to read. Total columns on the combined statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or cash flows in conformity with accounting principles generally accepted in the United States of America. Interfund eliminations have not been made in the aggregation of this data. Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (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. Iamb 51 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2001 2. Deposits and Investments A. Deposits In accordance with applicable Minnesota Statutes, the City maintains deposits at depository banks authorized by the City Council. All such depositories are members of the Federal Reserve System. Minnesota Statutes require that all deposits be protected by insurance, surety bond or collateral. If collateral is pledged as protection for the deposits, State Statutes require that it be held by a third party in the City's name. The market value of the collateral must, at a minimum, be 110% of the deposits not covered by insurance or bonds (140% in the case of mortgage backed collateral). Repurchase agreements are intentionally overcollateralized at 105% to insure that the safety of investment principal is attained and losses do not occur from rapid overnight deterioration. Due to wire transfers and tax settlements credited by the bank at the end of the day, there were several occasions during the year where overnight deposits were undercollateralized. On each occasion, the uncollateralized balance was invested with another financial institution on the following day. Balances at December 31, 2001 are as follows: Bank Carrying Balances _ Amount City $110,803 $225,611 HRA 139,643 1,797 The entire bank balances are covered by Federal Depository Insurance or collateral held by the City/H RA's agent in the City/H RA's name. B. Investments The City is authorized by Minnesota Statutes to invest in the following: (a) Direct obligations or obligations guaranteed by the United States or its agencies. (b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities described in (a) above. (c) General obligations of the State of Minnesota or any of its municipalities. (d) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System. .� (e) Commercial paper issued by United States Corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. 52 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2001 (f) Repurchase or reserve repurchase agreements with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a primary ..1% reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker dealers. (g) Future contracts sold under authority of Minnesota Statutes 471.56, subd. 5. The City invests in collateralized mortgage obligations (a form of mortgage backed security). These securities allow cash flows to be split so that different classes of securities with different maturities and coupons may be created. The City, by policy, is only allowed to invest in these types of securities if they are classified as a Planned Amortization Class 1 (PAC 1) with a stated maturity of 3 years or less. The City's investments are categorized below to give an indication of the level of risk assumed at year end. The level of risk is defined by the following criteria set out by the Governmental Accounting Standards Board within Statement No. 3. Category 1 includes investments that are insured or - registered for which the securities are held by the City or its agent in the City's name. Category 2 includes uninsured and unregistered investments for which the securities are held by the counterparty's trust department or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counterparty, or by its trust department or agent but not in the City's name. The fair value and credit risk of the investments held by the City at year end are as follows: Credit Risk Category Fair Value Securities Type 1 2 3 Amount — U.S. government agencies or instrumentalities $13,892,058 $ - $ - $13,892,058 ■ • Investments not subject to categorization: Mutual funds 20,616,699 Total investments $34,508,757 NM. /.. 53 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2001 The fair value and credit risk of the investments held by the HRA at year end are as follows: Credit Risk Category Fair Value Securities Type 1 2 3 Amount Commercial paper $274,100 $ - $ - $274,100 "' Repurchase agreement 588,458 - - 588,458 U.S. government securities 206,635 - - 206,635 U.S. government agencies .... or instrumentalities 3,708,271 - - 3,708,271 $4,777,464 $0 $0 4,777,464 Investments not subject to categorization: Money market fund 94,576 Mutual fund 8,420,451 Total investments $13,292,491 3. Special Assessments Receivable Special assessments receivable at December 31, 2001 are as follows: Capital Special Special Improvements Assessment Public Assessment Capital Capital Utilities General Debt Service Projects Projects Enterprise Total Unremitted $230 $3,204 $68 $73 $5,569 $9,144 — Delinquent 1,754 5,386 177 3,269 134 10,720 Deferred 2,197 1,224,896 4,256 52,479 121,954 1,405,782 Total $4,181 $1,233,486 $4,501 $55,821 $127,657 $1,425,646 54 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2001 4. Due From Other Governments Amounts due from other governments at December 31, 2001 are as follows: General Fund: State of Minnesota: a) State Aid Maintenance $21,400 b) PERA and other reimbursements 1,372 c) Department of Revenue 761 Anoka County: a) Fines and forfeits 13,302 Other 110 Total General Fund $36,945 Special Revenue Funds: State of Minnesota: a) Highway improvements $19,523 b) Chemical Assessment Team 9,828 c) Department of Revenue 14,743 Anoka County: a) Community Development Block Grant 20,725 b) Recycling 41,090 b) Drug forfeitures 19,143 Federal 44,595 Met Council-Section 8 7,472 Total Special Revenue Funds $177,119 Enterprise Funds: City of Coon Rapids $3,175 Other 945 Total Enterprise Funds $4,120 Internal Service Funds: Reimbursement $4,290 55 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2001 5. Changes in General Fixed Assets A summary of changes in general fixed assets are as follows: — Balance Balance January 1, December 31, 2001 Additions Deletions 2001 Land $2,735,987 $ - $ - $2,735,987 Buildings 6,934,214 52,390 2,550 6,984,054 Improvements other than buildings 25,182,749 1,190,900 35,758 26,337,891 Machinery and equipment 6,050,970 809,648 534,917 6,325,701 .� Total $40,903,920 $2,052,938 $573,225 $42,383,633 6. Summary of Proprietary Fund Property and Equipment A summary of Proprietary Fund type property, plant and equipment at December 31, 2001 follows: Internal Enterprise Service Funds Funds Public Information Liquor Utilities Systems Total Land $151,946 $154,531 $ - $306,477 Buildings 130,211 1,519,535 - 1,649,746 Improvements other than buildings 661,315 11,161,010 - 11,822,325 Machinery and equipment 257,310 2,171,479 941,373 3,370,162 Water and sewer lines - 18,041,570 - 18,041,570 1,200,782 33,048,125 941,373 35,190,280 Less: Accumulated depreciation (319,099) (13,390,468) (597,014) (14,306,581) Net property and equipment $881,683 $19,657,657 $344,359 $20,883,699 56 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS — December 31, 2001 7. Long-Term Debt The following is a summary of long-term debt transactions of the City for the year ended December 31, 2001: — Proprietary General Long-Term Debt Account Group Funds General Obligation Bonds General — Special Tax Obligation Assessment Increment Total Revenue Bonds Debt payable-January 1, 2001 $845,000 $13,610,000 $14,455,000 $3,880,000 Debt issued - - - - Debt retired (230,000) (875,000) (1,105,000) (350,000) Unamortized discount - - - (16,291) Debt payable-December 31, 2001 $615,000 $12,735,000 $13,350,000 $3,513,709 57 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2001 --- Bonds payable at December 31, 2001 are comprised of the following individual issues (in thousands of dollars): General Long-Term Debt: $1,020,000 Special Assessment Bonds of 1991 due in varying annual installments of$35,000-$90,000 through February 1,2005; interest at 5.60%-6.60%. $150 $855,000 General Obligation Special Assessment bonds of 1992, Series A, due in varying annual installments of$50,000-$95,000 through February 1, 2004; interest at 3.00%-5.25%. 195 4'1% $150,000 Special Assessment Bonds of 1994 due in varying annual installments of$5,000-$60,000 through February 1,2005; interest at 4.75%-6.10%. 90 $320,000 Special Assessment Bonds of 1996 due in varying annual installments of$30,000-$35,000 through February 1, 2007; interest at 4.05%-4.95%. 180 $9,575,000 General Obligation Tax Increment Bonds of 1997 due in varying annual installments of$75,000-$1,175,000 through August 1, 2009; interest at 4.60% -5.12%. 8,550 $4,185,000 General Obligation Tax Increment Refinancing Bonds of 1998, .� due in varying annual installments of$75,000-$62,000 through February 1,2012;interest at 5.10%-5.65%. 4,185 Subtotal General Long-Term Debt 13,350 Revenue Bonds: $620,000 General Obligation Water Revenue Bonds of 1992,Series B, due in varying annual installments of$35,000-$55,000 through February 1, 2007; interest at 3.00%-5.70%. 315 $335,000 General Obligation Water, Sewer and Storm Water Revenue Bonds of 1994 due in varying annual installments of$5,000-$25,000 through February 1, 2005; interest at 4.75%-6.10%. 165 $2,615,000 General Obligation Water and Storm Water Revenue Bonds of 1996 due in varying annual installments of$65,000-$165,000 through February 1, 2012; interest at 4.05%-5.30%. 1,960 $1,180,000 General Obligation Water Revenue Bonds of 1998,due in varying annual installments of$90,000-$130,000 through February 1,2011. 1,090 Unamortized discount (16) Subtotal Revenue Bonds 3,514 Total Bonds Payable $16,864 58 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2001 The General Obligation Tax Increment Refunding Bonds are payable primarily from tax increment revenue with any deficiency to be provided by general property taxes. General Obligation Special Assessment Bonds are payable from assessments levied against benefited properties. While it is anticipated that the assessment will be adequate to make the required debt payments, the City is responsible for any deficiency that may occur. The General Obligation Revenue Bonds are payable from the net revenues of the City's water, sewer and storm water systems in addition to the general obligation pledge. Annual Requirements to Amortize Long-Term Debt December 31, 2001 General Obligation Bonds Year Ending Special Tax December 31, Assessment Increment-City Revenue Total 2002 $179,608 $1,654,664 $523,477 $2,357,749 2003 171,607 1,636,291 516,355 2,324,253 2004 139,135 1,733,001 518,240 2,390,376 2005 136,810 1,734,334 523,656 2,394,800 2006 32,213 1,955,451 464,384 2,452,048 2007-2011 30,742 7,046,871 1,669,320 8,746,933 2012 - 642,657 169,373 812,030 $690,115 $16,403,269 $4,384,805 $21,478,189 $9,595,015 is available in the Debt Service Funds to service the Special Assessment and Redevelopment Bonds. $6,073,398 is available in the Public Utilities Enterprise Funds, to service the Water, Sewer and Storm Water Revenue Bonds. There are a number of limitations and restrictions contained in the various bond indentures. The City is in compliance with all significant limitations and restrictions. Legal Debt Margin - Under applicable State Statutes, the legal debt margin is 2% of the most recent market value less certain deductions. At December 31, 2001, the legal debt margin was$29,985,162. 8. Defined Benefit Pension Plans-Statewide A. Plan Description All full-time and certain part-time employees of the City of Fridley are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) and the Public Employees Police and Fire Fund (PEPFF)which are cost-sharing, multiple-employer .., retirement plans. These plans are established and administered in accordance with Minnesota Statute, Chapters 353 and 356. PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership by statute are covered by the PEPFF. 59 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2001 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. Two methods are used to compute benefits for PERF's Coordinated and Basic Plan members. The retiring member receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2% of average salary for each of the first 10 years of service and 2.7%for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first 10 years and 1.7% for each remaining year. Under Method 2, the annuity accrual rate is 2.7% of average salary for Basic Plan members and 1.7%for Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate is 3.0%for each year of service. For all PEPFF and PERF members whose annuity is calculated using Method 1, a full annuity is available when age plus years of service equal 90. A reduced retirement annuity is also available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A normal annuity is a lifetime annuity that ceases upon the death of the retiree-no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will reduce the monthly normal annuity amount, because the annuity is payable over joint lives. Members may also leave their contributions in the fund upon termination of public service in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last terminated their public service. PERA issues a publicly available financial report that includes financial statements and required supplementary information for PERF and PEPFF. That report may be obtained by writing to PERA, 60 Empire Drive#200, St. Paul, Minnesota, 55103-1855 or by calling (651)296-7460 or 1-800-652-9026. B. Funding Policy Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. PERF Basic Plan members and Coordinated Plan members are required to contribute -� 8.75% and 4.75%, respectively, of their annual covered salary. PEPFF members are required to contribute 6.20% of their annual covered salary. The City of Fridley is required to contribute the following percentages of annual covered payroll: 11.43%for Basic Plan PERF members, 5.18%for Coordinated Plan PERF members, and 9.30%for PEPFF members. Member and employer contribution rates for Basic and Coordinated members will increase by 0.35% effective January 2002. The City's contributions for the years ending 60 OM CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS - December 31, 2001 December, 1999, 2000 and 2001 are equal to the contractually required contributions for each year as set by state statute for PERF and PEPFF as follows: PERF PEPFF "' 1999 $225,626 $201,709 2000 235,249 226,412 2001 235,602 238,207 C. Public Employees Retirement Association (PERA) - Defined Contribution Plan Description Three council members of the City of Fridley are covered by defined contribution pension plan administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Defined Contribution Plan (PEDCP)which is a multiple-employer deferred compensation plan. Benefit Provisions and Contribution Rates The PEDCP is a tax qualified plan under Section 401(a)of the Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal. Plan benefits depend solely on amounts contributed to the plan plus investment income, less administrative expenses. Minnesota Statutes, Chapter 353D.03, specifies the employee and employer contribution rates for those qualified personnel who elect to participate. An eligible elected official who decides to participate contributes 5 percent of salary which is matched by the elected official's employer. For ambulance service personnel, employer contributions are determined by the employer, and for salaried employees must be a fixed percentage of salary. Employer contributions for volunteer personnel may be a unit value for each call or period of alert duty. Employees who are paid amm 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 six accounts of the Minnesota Supplemental Investment Fund. For administering the plan, PERA receives 2 percent of employer contributions and four- ". tenths of one percent of the assets in each member's account. Total contributions made by the City during fiscal year 2001 were: Percentage of Amount Covered Payroll Required Employees Employer Employees Employer Rates PEDCP $1,792 $1,792 5.00% 5.00% 5.00% 61 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2001 9. 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. 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. 'ft Contribution Made The City remitted $97,542 and $100,841 in State Aid to the Association for 2001 and 2000, respectively. During 2001 and as of December 31, 2001, the Association held no securities issued by the City or other related parties. .., 10. Defined Benefit Pension Plan - Police and Fire Consolidation Fund Plan Description Until July 1, 1999, the City of Fridley was a participant in the Police and Fire Consolidation . Fund (PFCF), an agent, multiple-employer defined benefit plan. Effective July 1, 1999, this plan was terminated and all assets and liabilities were transferred to the Public Employee's Retirement Association (PERA) Police and Fire Fund, a cost sharing multiple-employer plan. At the time of termination the PFCF was over funded, and the City received a refund on April 13, 2000. These funds are accounted for in a Special Revenue Fund and are restricted to public safety expenditures. 62 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2001 11. Interfund Receivables and Payables Interfund receivables and payables of the primary government at December 31, 2001 are as follows: Interfund Interfund Receivables Payables Due From/Due To: General Fund $76,598 $706 Special Revenue Fund: Solid Waste Abatement Fund - 67,598 HRA Reimbursement Fund - 641 Chemical Assessment Team Fund - 8,158 Enterprise Funds: Public Utilities Fund 834 37 Liquor Fund - 91 Trust and Agency Funds: Hotel/Motel Tax Agency Fund - 201 $77,432 $77,432 Interfund receivables and payables of the HRA component unit at December 31, 2001 is as follows: Interfund Interfund Receivables Payables Due From/Due To: General Fund $2,286,104 $ - Capital Projects Funds: Lake Pointe - 1,080,303 Shorewood - 16,007 57th Avenue Redevelopment - 124,760 Gateway East - 1,065,034 $2,286,104 $2,286,104 63 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2001 12. Reserved Fund Balances/Retained Earnings The following reservations have been made of various fund balances/retained earnings of the primary government at December 31, 2001: General Fund: Reserved for: Inventory $37,344 Long-term receivables 65,320 --, Total General Fund 102,664 Debt Service Funds: Reserved for debt service 458,558 `~ Reserved for long-term receivable 707,497 Total Debt Service Funds 1,166,055 Capital Projects Funds: Reserved for encumbrances 91,973 Total Governmental Funds $1,360,692 Retained Earnings: Enterprise Funds: Reserved for capital outlay $9,348,000 Internal Service Funds: Employee Benefits Fund: Reserved for employee benefits 175,463 ,. Total Proprietary Funds $9,523,463 The HRA component unit had reserved fund balances at December 31, 2001: Reserved for: Mortgage receivable $2,201,954 Debt service 3,000,000 Total reserved fund balances $5,201,954 64 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2001 13. Designated Fund Balance The following designations have been made of various fund balances at December 31, 2001: General Fund: Working capital $4,302,047 Contingencies 910,182 Subsequent year's expenditures 827,556 Total General Fund 6,039,785 Special Revenue Funds: Cable TV Fund: Cable TV operations 309,492 Grant Management: Subsequent years expenditures 15,020 HRA Reimbursement: Professional services 588 Drug and Gambling Forfeiture Fund: Drug and gambling enforcement 50,675 Housing Revitalization Program: Housing revitalization 250,000 F.C.C. Donations: Fridley community center 87,053 Police Activity: Public safety expenditures 2,175,345 Total Special Revenue Funds 2,888,173 Capital Projects Funds: Capital Improvements Fund: Replacement of fixed assets 1,095,707 Park improvements 1,560,602 Street improvements 1,233,601 Special Assessments Fund: Street improvements 245,796 Total Capital Projects Funds 4,135,706 Total of designated fund balances $13,063,664 65 .o. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2001 �^ 14. Contributed Capital A reconciliation of contributed capital is as follows: ._ Self Information Public Insurance Systems Utilities Internal Internal Enterprise Service Service Fund Fund Fund -, Balance-January 1 $10,427,575 $1,000,000 $827,822 Increases: "~ Current capital contributions - - - Decreases: Depreciation of contributed assets (370,065) - (905) Balance- December 31 $10,057,510 $1,000,000 $826,917 a- 66 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2001 15. Segment Information for Enterprise Funds The City maintains operating funds for Liquor and Public Utilities (water, sewer, storm sewer operations). Segment information for the year ended December 31, 2001 is as follows: ,r Total Public Enterprise Liquor Utilities Funds Sales(less cost of sales of$3,907,397) $1,103,929 $ - $1,103,929 Operating revenues - 5,003,580 5,003,580 Operating expenses (817,303) (5,148,461) (5,965,764) Operating income(loss) 286,626 (144,881) 141,745 Nonoperating revenues (expenses) - net 48,433 196,946 245,379 Operating transfers in (out) (300,000) - (300,000) Net income $35,059 $52,065 $87,124 Depreciation expense included in operating expenses $77,337 $973,515 $1,050,852 Property and equipment: Additions (including capital contributions) - 265,377 265,377 Working capital 1,093,884 8,974,960 10,068,844 Total assets 2,390,135 29,162,117 31,552,252 Bonds payable - 3,513,709 3,513,709 Fund equity: Contributed capital - 10,057,510 10,057,510 Retained earnings 1,975,567 15,421,398 17,396,965 Total fund equity $1,975,567 $25,478,908 $27,454,475 67 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2001 --ti 16. Unbudgeted Capital Projects Funds The City does not budget all Capital Projects Funds, and accordingly, the applicable columns of the Combined Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Exhibit A-3) excludes amounts relating to unbudgeted funds. A reconciliation of actual results for budgeted and unbudgeted funds is as follows: Fund Other Balance Financing (Deficit) Sources December 31, Revenues Expenditures (Uses) 2001 All Capital Projects Funds $402,798 $1,647,775 $9,600 $4,227,679 Less unbudgeted funds: Special Assessments Fund (53,084) (1,010,754) (917,255) (245,796) Budgeted Capital Projects Funds $349,714 $637,021 ($907,655) $3,981,883 17. Risk Management �. The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. During 1987, the City established the Self Insurance Fund (an Internal Service Fund) to account for and finance its uninsured risks of loss. The Self Insurance Fund provides coverage for up to a maximum of $50,000 for each liability and ,.. property claim with an annual aggregate of $100,000 for all claims. The City purchases insurance through the League of Minnesota Cities Insurance Trust for claims in excess of coverage provided by the fund and for all other risks of loss. The City's workers compensation insurance policy is retrospectively rated. With this type of policy, final premiums are determined after loss experience is known. The amount of premium adjustment, if any, is not reasonably estimable and is not recorded until received or paid. Effective September 1, 1999 the City began to self insure for health insurance. The Self Insurance Fund pays claims up to a maximum of$25,000. The City purchases insurance for claims in excess of coverage provided by the fund. In 1990, the General Fund contributed $1,000,000 to the Self Insurance Fund in lieu of the Self Insurance Fund charging losses back to each fund. There is no recorded liability for unpaid claims because the amount of such claims, if any, are considered to be immaterial. As of December 31, 2001, the Self Insurance Fund has accumulated equity in the amount of $1,906,846 to cover future claims and losses. 68 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2001 18. Commitments and Contingencies A. 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. B. 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 is 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, 2001. C. 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. r r 69 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2001 D. 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, 2001 is as follows: Original Interest Maturity Note Principal Rate Date Medtronics $10,000,000 6.75% August 1, 2025 Rylund 32,000 8.00% February 1, 2004 McGlynn's 701,172 9.50% February 1, 2009 Bob's Produce 90,936 9.50% December 31, 2002 .., Paschke 60,000 7.00% August 2, 2005 Linn 175,000 8.50% February 1, 2012 Onan Murphy 496,303 8.00% February 1, 2016 Banfill 683,156 8.00% August 1, 2007 19. Leases A. Lease Expense During 2001, the City leased space for two of its liquor stores, one of which closed during the year. Total costs for these leases were $114,237 for the year ended December 31, 2001. The future minimum lease payments for these leases are as follows: Year Ending December 31, 2002 $83,319 2003 83,319 2004 85,404 2005 95,850 2006 95,850 Thereafter 821,463 Total $1,265,205 70 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS - December 31,2001 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, 2001, totaled $74,615. Terms of each lease are as follows: Annual Lease Adjustment Expiration Renewal Lessee Factor* Date Options Voice Stream Greater of 3%or CPI 12/31/06 2 Five Year Renewals AT&T Wireless Greater of 5% or CPI 06/30/05 4 Five Year Renewals Qwest Wireless Greater of 3%or CPI 12/31/02 3 Five Year Renewals Sprint Hwy 65 Greater of 5%or CPI 09/30/05 4 Five Year Renewals Sprint Well#13 Greater of 5% or CPI 09/30/03 4 Five Year Renewals *Amounts for future lease receipts are unavailable because they are based on the — Consumer Price Index. 20. 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, 2001, there were twenty-seven series of Industrial Revenue Bonds issued. The aggregate principal amount payable for the five series issued after July 1, 1995 was $17,850,000. The aggregate principal amount payable for the twenty-two series issued prior to July 1, 1995, could not be determined; however, their original issue amounts totaled$65.2 million. 21. Prior Period Adjustment In 1999 the HRA deposited $125,000 in an escrow account anticipating future development in the North Area/University Industrial Park. This amount was shown as an expenditure in the 1999 financial statements. A project has not developed as of December 31, 2001 and therefore the January 1, 2001 fund balance has been increased by$125,000. 71 GENERAL FUND The General Fund was established to account for the revenues and expenditures necessary to carry out basic governmental activities of the City, such as general government, public safety, and public works. Revenues are recognized by source, such as property taxes, licenses and permits, fines and forfeits, charges for services and state-shared taxes. General Fund expenditures are made primarily for current day to day operations and are recorded by functional classifications and by operating departments. This fund accounts for all financial transactions not accounted for in another fund. • Exhibit B-1 CITY OF FRIDLEY, MINNESOTA - GENERAL FUND COMPARATIVE BALANCE SHEET December 31, 2001 and 2000 Assets 2001 2000 Cash and investments $6,217,785 $6,816,089 Receivables: Accounts 99,960 40,835 Taxes: Unremitted 43,860 57,526 - Delinquent 127,208 113,817 Special assessments: Unremitted 230 2,205 Delinquent 1,754 496 Deferred 2,197 7,549 Interest 153,477 327,791 Loan receivable - 6,300 Developer note 65,320 75,548 Due from other funds 76,598 60,014 Due from component unit 13,040 12,502 Due from other governments 36,945 57,648 Inventories, at cost 37,344 38,513 Total assets $6,875,718 $7,616,833 Liabilities and Fund Balance ., Liabilities: Accounts payable $216,244 $212,285 Deposits payable 19,463 60,947 Contracts payable - 22,132 Salaries payable 341,004 315,989 Deferred revenue 138,029 128,732 - Due to other funds 706 1,542 Due to other governments 17,823 12,729 Total liabilities 733,269 754,356 - Fund balance: Reserved for encumbrances - 5,478 - Reserved for inventory 37,344 38,513 Reserved for long-term receivables 65,320 81,848 Unreserved: Designated for working capital 4,302,047 4,186,141 Designated for contingencies 910,182 1,166,402 Designated for subsequent year's expenditures 827,556 595,184 Designated for fixed asset replacement - 788,911 '-' Total fund balance 6,142,449 6,862,477 Total liabilities and fund balance $6,875,718 $7,616,833 -- 74 Exhibit B-2 CITY OF FRIDLEY, MINNESOTA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL Year Ended December 31, 2001 With comparative actual amounts for year ended December 31,2000 2001 Variance -. Favorable 2000 Budget Actual (Unfavorable) Actual Revenues: - Taxes $4,051,314 $4,076,689 $25,375 $3,910,473 Special assessments 6,000 5,059 (941) 8,419 Licenses and permits 839,000 600,956 (238,044) 1,155,877 Intergovernmental revenue 3,322,051 3,361,703 39,652 3,463,918 .. Charges for services 1,205,735 1,262,412 56,677 1,185,202 Fines and forfeits 190,500 163,015 (27,485) 183,972 Investment income 435,000 334,828 (100,172) 518,312 Miscellaneous 162,145 112,320 (49,825) 203,902 Total revenues 10,211,745 9,916,982 (294,763) 10,630,075 .. Expenditures: Current: General government 2,063,780 1,967,881 95,899 1,864,752 Public safety 4,425,273 4,418,340 6,933 4,341,248 Municipal center 241,662 241,662 - 225,114 Public works 2,705,233 2,687,201 18,032 2,508,029 Community development 750,592 708,749 41,843 775,312 Recreation and naturalist 1,102,451 1,102,451 - 1,031,174 Capital outlay 395,505 387,927 7,578 478,199 Total expenditures 11,684,496 11,514,211 170,285 11,223,828 Excess (deficiency)of revenues over(under)expenditures (1,472,751) (1,597,229) (124,478) (593,753) 0 Other financing sources (uses): Sale of fixed assets 20,000 31,531 11,531 33,666 Operating transfers in 882,424 876,005 (6,419) 432,900 Operating transfers out (30,335) (30,335) - (86,567) Total other financing sources (uses) 872,089 877,201 5,112 379,999 Excess(deficiency)of revenues and other financing sources over(under) expenditures and other financing uses ($600,662) (720,028) ($119,366) (213,754) Fund balance-January 1 6,862,477 7,076,231 .. Fund balance- December 31 $6,142,449 $6,862,477 75 Exhibit B-3 Page 1 of 2 , CITY OF FRIDLEY, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES AND OTHER FINANCING SOURCES- BUDGET AND ACTUAL Year Ended December 31, 2001 With comparative actual amounts for year ended December 31, 2000 2001 Variance Favorable 2000 -- Budget _ Actual (Unfavorable) Actual Taxes and special assessments: Current ad valorem taxes $3,997,314 $4,058,126 $60,812 $3,844,528 ,.., Delinquent ad valorem taxes 20,000 8,471 (11,529) 43,623 Penalties and interest 14,000 10,071 (3,929) 20,055 Forfeited sale-taxes 20,000 21 (19,979) 2,267 Special assessments 6,000 5,059 (941) 8,419 Total taxes and special assessments 4,057,314 4,081,748 24,434 3,918,892 Licenses and permits: '" Licenses: Contractor 47,300 46,689 (611) 44,481 Business 98,700 112,293 13,593 98,086 All other 40,000 28,521 (11,479) 66,209 Permits 653,000 413,453 (239,547) 947,101 Total licenses and permits 839,000 600,956 (238,044) 1,155,877 ,..,, Intergovernmental revenue: Civil defense 5,000 4,933 (67) 1,199 ., Federal grants - - - 792 FEMA disaster aid - - - 3,597 State maintenance aid 190,000 213,996 23,996 214,293 State credits 1,687,729 1,687,729 - 1,077,816 - Local government aid 1,069,173 1,078,082 8,909 1,738,876 Other state grants 1,500 958 (542) 44,014 Police and fire pension 360,950 367,905 6,955 336,383 - Other 7,699 8,100 401 46,948 Total intergovernmental revenue 3,322,051 3,361,703 39,652 3,463,918 Charges for services: General government 806,410 833,749 27,339 713,620 Public safety 150,525 121,673 (28,852) 184,783 Conservation of health 12,500 1,183 (11,317) 7,523 - Recreation 236,300 305,807 69,507 279,276 Total charges for services 1,205,735 1,262,412 56,677 1,185,202 Fines and forfeits 190,500 163,015 (27,485) 183,972 Investment income 435,000 334,828 (100,172) 518,312 76 Exhibit B-3 Page 2 of 2 CITY OF FRIDLEY, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES AND OTHER FINANCING SOURCES-BUDGET AND ACTUAL Year Ended December 31, 2001 With comparative actual amounts for year ended December 31, 2000 2001 Variance Favorable 2000 Budget Actual (Unfavorable) Actual Miscellaneous revenue: Insurance and other reimbursements $77,500 $61,342 ($16,158) $66,439 Gambling tax 67,000 35,718 (31,282) 97,563 Donations 8,545 12,289 3,744 10,260 _ Miscellaneous 9,100 2,971 (6,129) 29,640 Total miscellaneous revenue 162,145 112,320 (49,825) 203,902 Total revenues 10,211,745 9,916,982 (294,763) 10,630,075 Other financing sources: Sale of fixed assets 20,000 31,531 11,531 33,666 Operating transfers in: Liquor fund 300,000 300,000 - 200,000 Special assessment debt service fund 232,900 232,900 - 232,900 Police Activity special revenue fund 199,524 193,105 (6,419) - Employee Benefit internal service fund 150,000 150,000 - - Total other financing sources 902,424 907,536 5,112 466,566 Total revenues and other financing sources $11,114,169 $10,824,518 ($289,651) $11,096,641 S 77 Exhibit B-4 _ Page 1 of 3 CITY OF FRIDLEY, MINNESOTA GENERAL FUND SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES-BUDGET AND ACTUAL Year Ended December 31, 2001 With comparative actual amounts for year ended December 31,2000 2001 Variance - Favorable 2000 Budget Actual (Unfavorable) Actual General government: Mayor and council: Personal services $72,722 $64,760 $7,962 $60,958 Supplies and other charges 46,658 37,745 8,913 37,907 - Total mayor and council 119,380 102,505 16,875 98,865 Planning commission: Supplies and other charges 1,760 463 1,297 159 Other commissions: Supplies and other charges 3,351 878 2,473 1,718 City manager: Personal services 238,340 238,340 - 235,735 - Supplies and other charges 62,412 62,412 - 41,878 Total City manager 300,752 300,752 0 277,613 Human resources: Personal services 126,949 123,500 3,449 117,660 Supplies and other charges 14,024 12,336 1,688 11,767 Total human resources 140,973 135,836 5,137 129,427 Legal: - Supplies and other charges 296,298 249,646 46,652 277,651 Elections: Personal services - - - 29,506 Supplies and other charges 1,025 38 987 2,106 Total elections 1,025 38 987 31,612 Accounting: Personal services 515,015 515,015 - 481,296 Supplies and other charges 87,700 84,987 2,713 73,596 Total accounting 602,715 600,002 2,713 554,892 - Assessing: Personal services 137,643 136,616 1,027 136,067 Supplies and other charges 12,043 12,043 - 8,973 Total assessing 149,686 148,659 1,027 145,040 "" MIS: Personal services 126,350 125,393 957 116,955 Supplies and other charges 76,082 58,301 17,781 50,479 Total MIS 202,432 183,694 18,738 167,434 City clerk/records: Personal services 130,489 130,489 - 112,666 Supplies and other charges 23,921 23,921 - 12,894 Total City clerk/records 154,410 154,410 0 125,560 79 Exhibit B-4 Page 2 of 3 CITY OF FRIDLEY, MINNESOTA GENERAL FUND SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES-BUDGET AND ACTUAL Year Ended December 31, 2001 With comparative actual amounts for year ended December 31, 2000 2001 Variance Favorable 2000 Budget Actual (Unfavorable) Actual Nondepartmental: Personal services $1,044 $1,044 $ - $1,080 Supplies and other charges 89,954 89,954 - 53,701 Total nondepartmental 90,998 90,998 0 54,781 Total general government 2,063,780 1,967,881 95,899 1,864,752 Public safety: Police: Personal services 3,135,273 3,135,273 - 3,106,917 Supplies and other charges 350,463 350,463 - 334,235 Total police 3,485,736 3,485,736 0 3,441,152 Fire: Personal services 741,235 741,235 - 684,970 Supplies and other charges 140,296 140,296 - 150,839 Total fire 881,531 881,531 0 835,809 Rental inspections: Personal services 35,256 30,849 4,407 41,994 Supplies and other charges 7,121 6,214 907 10,911 Total rental inspections 42,377 37,063 5,314 52,905 Civil defense: Supplies and other charges 15,629 14,010 1,619 11,382 Total public safety 4,425,273 4,418,340 6,933 4,341,248 a Municipal center: Personal services 23,802 23,802 - 17,481 Supplies and other charges 217,860 217,860 - 207,633 Total municipal center 241,662 241,662 0 225,114 Public works: Engineering: Personal services 398,465 398,465 - 393,174 Supplies and other charges 95,806 95,806 - 72,696 Total engineering 494,271 494,271 0 465,870 Public works and parks: Personal services 1,317,274 1,317,274 - 1,203,845 Supplies and other charges 893,688 875,656 18,032 838,314 Total public works and parks 2,210,962 2,192,930 18,032 2,042,159 Total public works 2,705,233 2,687,201 18,032 2,508,029 80 Exhibit B-4 Page 3 of 3 CITY OF FRIDLEY, MINNESOTA GENERAL FUND _ SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES-BUDGET AND ACTUAL Year Ended December 31, 2001 With comparative actual amounts for year ended December 31,2000 2001 Variance Favorable 2000 Budget Actual (Unfavorable) Actual Community development: _„ Building inspection: Personal services $194,406 $182,096 $12,310 $190,688 Supplies and other charges 110,141 107,236 2,905 89,635 Total building inspection 304,547 289,332 15,215 280,323 - Planning: Personal services 367,280 340,652 26,628 353,026 Supplies and other charges 78,765 78,765 - 141,963 • Total planning 446,045 419,417 26,628 494,989 Total community development 750,592 708,749 41,843 775,312 - Recreation and naturalist: Recreation: Personal services 557,456 557,456 - 527,497 - Supplies and other charges 267,376 267,376 - 238,116 Total recreation 824,832 824,832 0 765,613 Naturalist: Personal services 207,285 207,285 - 204,065 Supplies and other charges 70,334 70,334 - 61,496 Total naturalist 277,619 277,619 0 265,561 Total recreation and naturalist 1,102,451 1,102,451 0 1,031,174 Capital outlay: Police 95,261 95,261 - 103,594 Fire 34,478 31,900 2,578 20,116 Municipal center 5,000 - 5,000 4,000 Public works 253,160 253,160 - 350,489 Naturalist 7,606 7,606 - - Total capital outlay 395,505 387,927 7,578 478,199 Total expenditures 11,684,496 11,514,211 170,285 11,223,828 Operating transfers out: Special Revenue Fund 30,335 30,335 - 86,567 - Total expenditures $11,714,831 $11,544,546 $170,285 $11,310,395 i 81 SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for revenues derived from specific taxes or other earmarked revenue sources. They are usually required by statute, charter provision or local ordinance to finance particular governmental functions or activities. Cable TV Fund This fund receives revenues from the issuance of a franchise agreement with the cable TV provider. These revenues are used for the operation and maintenance of a government access channel. Grant Management Fund This fund administers grants received from a variety of intergovernmental agencies. In most cases, grant funds are provided on a reimbursement basis following proper documentation of expenditures, however, in some cases the money is provided in advance to spend on specific activities outlined in the grant. Solid Waste Abatement Fund This fund receives grants, recycling fees and yard waste fees. These revenues finance the City's curbside recycling pickup and operation of the yard waste transfer site. Drug and Gambling Forfeiture Fund This fund receives forfeited property in connection with illegal gambling or drug activity. Pursuant to Minnesota Statutes the proceeds are disbursed equally between the investigating agency and the prosecuting agency. HRA Reimbursement Fund This fund receives revenues from the Housing and Redevelopment Authority. These revenues are used to reimburse the City for professional services provided by City staff for HRA related activities. Housing Revitalization Fund This fund receives revenues to administer the City Council's priority of improving housing rehabilitation programs to revitalize aging neighborhoods in the community. Chemical Assessment Team Fund This fund receives grant revenues and accounts for expenditures related to training and coordinating a multi-city chemical assessment team. 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 account for the residual assets refunded to the City from the Public Employees Retirement Association's police consolidation account. CITY OF FRIDLEY, MINNESOTA -, SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET December 31,2001 With comparative totals for December 31, 2000 Cable Grant Solid Waste HRA Assets TV Management Abatement Reimbursement Cash and investments $277,164 $66,525 $ - $ - Accounts receivable 44,809 - 18,731 - Due from component unit - - - 1,545 Due from other governments - 107,058 41,090 - Total assets $321,973 $173,583 $59,821 $1,545 Liabilities and Fund Balance Liabilities: Accounts payable $385 $2,528 $21,084 $24 Deposits payable 10,192 - - - Salaries payable 1,904 6,590 2,360 292 Deferred revenue - 149,228 - - Due to other funds - - 67,598 641 Due to other governments - 217 - - Total liabilities 12,481 158,563 91,042 957 Fund balance: Unreserved: Designated for subsequent year's expenditures - 15,020 - - Designated for special revenue programs 309,492 - - 588 Undesignated - - (31,221) - Total fund balance 309,492 15,020 (31,221) 588 Total liabilities and fund balance $321,973 $173,583 $59,821 $1,545 84 Exhibit C-1 .... Drug and Chemical Gambling Housing Assessment F.C.C. Police Totals Forfeiture Revitalization Team Donations Activity 2001 2000 $31,532 $250,000 $ - $87,593 $2,175,345 $2,888,159 $2,886,543 - - - - - 63,540 59,180 - - - - 1,545 1,362 19,143 - 9,828 - - 177,119 196,659 $50,675 $250,000 $9,828 $87,593 $2,175,345 $3,130,363 $3,143,744 $ - $ - $1,134 $ - $ - $25,155 $37,599 - - - - 10,192 10,334 - - 536 - - 11,682 10,617 - - - - - 149,228 108,686 - - 8,158 - - 76,397 59,790 - - - 540 - 757 2,844 0 0 9,828 540 0 273,411 229,870 - - - 15,020 1,444 50,675 250,000 - 87,053 2,175,345 2,873,153 2,912,430 - - (31,221) 50,675 250,000 0 87,053 2,175,345 2,856,952 2,913,874 ^ $50,675 $250,000 $9,828 $87,593 $2,175,345 $3,130,363 $3,143,744 a 85 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended December 31, 2001 With comparative totals for year ended December 31, 2000 Cable Grant Solid Waste HRA TV Management Abatement Reimbursement Revenues: Licenses and permits $175,936 $ - $ - $ - Intergovernmental revenue - 532,502 74,680 9,882 Charges for services 941 - 207,760 - Fines and forfeits - - - - Investment income 11,361 - - - Donations - - - - Miscellaneous - 1,582 2,718 - Total revenues 188,238 534,084 285,158 9,882 Expenditures: Current: General government 88,518 620,089 317,823 10,074 Public safety - - - - Recreation and naturalist - - - - Capital outlay - - - - Total expenditures 88,518 620,089 317,823 10,074 Excess(deficiency) of revenues over(under) expenditures 99,720 (86,005) (32,665) (192) Other financing sources (uses): Operating transfers in - 108,356 - - — Operating transfers out - (7,331) - - Operating transfer to component unit - - - - Total other financing sources(uses) 0 101,025 0 0 ... Excess (deficiency)of revenues and other financing sources over(under) expenditures and other financing uses 99,720 15,020 (32,665) (192) Fund balance-January 1 209,772 - 1,444 780 Fund balance- December 31 $309,492 $15,020 ($31,221) $588 86 Exhibit C-2 ... Drug and Chemical Gambling Housing Assessment F.C.C. Police Totals .. Forfeiture Revitalization Team Donations Activity 2001 2000 $ - $ - $ - $ - $ - $175,936 $120,738 - - 39,136 - - 656,200 2,998,663 - - - - - 208,701 206,001 48,472 - - - - 48,472 13,160 - - - 4,494 111,360 127,215 113,059 - - - - - - 5,000 - - - - 4,300 12,214 48,472 0 39,136 4,494 111,360 1,220,824 3,468,835 - - - - - 1,036,504 1,023,309 10,471 - 39,136 - - 49,607 50,777 - - 3,607 - 3,607 - 6,128 - - 11,799 - 17,927 53,586 16,599 0 39,136 15,406 0 1,107,645 1,127,672 "' 31,873 - - (10,912) 111,360 113,179 2,341,163 - - - - - 108,356 86,567 - - - - (271,126) (278,457) - - - - - - - (3,420) 0 0 0 0 (271,126) (170,101) 83,147 31,873 - - (10,912) (159,766) (56,922) 2,424,310 18,802 250,000 - 97,965 2,335,111 2,913,874 489,564 .. $50,675 $250,000 $0 $87,053 $2,175,345 $2,856,952 $2,913,874 a I 87 Exhibit C-3 CITY OF FRIDLEY, MINNESOTA CABLE TV SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31,2001 and 2000 Assets 2001 2000 Cash and investments $277,164 $181,167 Accounts receivable 44,809 40,794 Total assets $321,973 $221,961 Liabilities and Fund Balance Liabilities: Accounts payable $385 $337 Deposits payable 10,192 10,334 Salaries payable 1,904 1,518 Total liabilities 12,481 12,189 Fund balance: Unreserved: Designated for special revenue programs 309,492 209,772 Total liabilities and fund balance $321,973 $221,961 88 Exhibit C-4 ._ CITY OF FRIDLEY, MINNESOTA CABLE TV SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL Year Ended December 31, 2001 With comparative actual amounts for year ended December 31, 2000 2001 Variance Favorable 2000 Budget Actual (Unfavorable) Actual Revenues: Licenses-franchise fee $144,000 $175,936 $31,936 $120,738 Charges for services 1,000 941 (59) 532 Investment income 6,000 11,361 5,361 13,547 Miscellaneous - - - 5,000 Total revenues 151,000 188,238 37,238 139,817 Expenditures: Current: General government: Personal services 67,314 66,521 793 63,080 Supplies and other charges 47,167 21,997 25,170 21,614 Capital outlay - - - 44,704 Total expenditures 114,481 88,518 25,963 129,398 Excess (deficiency)of revenues over(under)expenditures $36,519 99,720 $63,201 10,419 Fund balance-January 1 209,772 199,353 Fund balance-December 31 $309,492 $209,772 89 Exhibit C-5 CITY OF FRIDLEY, MINNESOTA GRANT MANAGEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 2001 and 2000 Assets 2001 2000 Cash and investments $66,525 $1,936 Due from other governments 107,058 127,471 Total assets $173,583 $129,407 Liabilities and Fund Balance Liabilities: Accounts payable $2,528 $13,810 Salaries payable 6,590 6,776 .� Deferred revenue 149,228 108,686 Due to other governments 217 135 Total liabilities 158,563 129,407 Fund balance: Unreserved: .� Designated for subsequent year's expenditures 15,020 - Total liabilities and fund balance $173,583 $129,407 90 Exhibit C-6 ._ CITY OF FRIDLEY, MINNESOTA GRANT MANAGEMENT SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL Year Ended December 31, 2001 With comparative actual amounts for year ended December 31, 2000 2001 Variance Favorable 2000 Budget Actual (Unfavorable) Actual Revenues: Intergovernmental revenue: Federal $302,358 $373,880 $71,522 $450,628 State 247,041 158,622 (88,419) 162,656 Miscellaneous - 1,582 1,582 2,068 Total revenues 549,399 534,084 (15,315) 615,352 Expenditures: Current: General government: Personal services 321,564 321,564 - 235,684 Supplies and other charges 298,525 298,525 - 376,483 Total expenditures 620,089 620,089 0 612,167 Excess (deficiency)of revenues over(under) expenditures (70,690) (86,005) (15,315) 3,185 Other financing sources (uses): _ Operating transfers in (out): General Fund 30,335 30,335 - 235 Police Activity 78,021 78,021 - - Information Systems (7,331) (7,331) - - "' Component Unit - - - (3,420) Total other financing sources (uses) 101,025 101,025 0 (3,185) Excess(deficiency)of revenues and other financing sources over(under) expenditures and other financing uses $30,335 15,020 ($15,315) 0 Fund balance-January 1 - - Fund balance-December 31 $15,020 $0 a 91 Exhibit C-7 CITY OF FRIDLEY, MINNESOTA SOLID WASTE ABATEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 2001 and 2000 Assets 2001 2000 Accounts receivable $18,731 $17,779 Due from other governments 41,090 55,632 Total assets $59,821 $73,411 Liabilities and Fund Balance Liabilities: Accounts payable $21,084 $20,157 Salaries payable 2,360 2,010 Due to other funds 67,598 49,800 Total liabilities 91,042 71,967 Fund balance: Unreserved: Designated for subsequent year's expenditures - 1,444 Undesignated (31,221) - Total fund balance (31,221) 1,444 Total liabilities and fund balance $59,821 $73,411 92 Exhibit C-8 CITY OF FRIDLEY, MINNESOTA SOLID WASTE ABATEMENT SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL Year Ended December 31, 2001 With comparative actual amounts for year ended December 31, 2000 2001 Variance -- Favorable 2000 Budget Actual (Unfavorable) Actual Revenues: _ Intergovernmental revenue: State $75,000 $74,680 ($320) $75,218 Charges for services 203,123 207,760 4,637 205,469 Miscellaneous 2,500 2,718 218 2,921 Total revenues 280,623 285,158 4,535 283,608 Expenditures: Current: General government: Personal services 55,679 55,679 - 52,011 Supplies and other charges 262,144 262,144 - 260,697 Total expenditures 317,823 317,823 0 312,708 Excess(deficiency) of revenues over(under)expenditures (37,200) (32,665) 4,535 (29,100) Other financing sources(uses): Operating transfer in: General Fund - - - 78,283 Excess (deficiency)of revenues and other financing sources over(under) expenditures and other financing uses ($37,200) (32,665) $4,535 49,183 -- Fund balance(deficit) -January 1 1,444 (47,739) Fund balance(deficit)-December 31 ($31,221) $1,444 a 93 Exhibit C-9 CITY OF FRIDLEY, MINNESOTA r. HRA REIMBURSEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 2001 and 2000 Assets 2001 2000 Due from component unit $1,545 $1,362 Total assets $1,545 $1,362 Liabilities and Fund Balance Liabilities: Accounts payable $24 $125 Salaries payable 292 Due to other funds 641 457 Total liabilities 957 582 Fund balance: Unreserved: Designated for special revenue programs 588 780 Total liabilities and fund balance $1,545 $1,362 iv rp a- 94 Exhibit C-10 CITY OF FRIDLEY, MINNESOTA HRA REIMBURSEMENT SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL Year Ended December 31, 2001 With comparative actual amounts for year ended December 31,2000 2001 Variance Favorable 2000 Budget Actual (Unfavorable) Actual Revenues: Intergovernmental revenue: Housing and Redevelopment Authority $10,074 $9,882 ($192) $14,405 Miscellaneous - - - 115 Total revenues 10,074 9,882 (192) 14,520 Expenditures: Current: �. General government: Supplies and other charges 10,074 10,074 - 13,740 Excess (deficiency)of revenues over(under)expenditures $0 (192) ($192) 780 Fund balance-January 1 780 - Fund balance-December 31 $588 $780 95 Exhibit C-11 CITY OF FRIDLEY, MINNESOTA DRUG AND GAMBLING FORFEITURE SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 2001 and 2000 Assets 2001 2000 Cash and investments $31,532 $18,195 Due from other governments 19,143 607 Total assets $50,675 $18,802 Liabilities and Fund Balance .•r Liabilities $ - $ - Fund balance: Unreserved: Designated for special revenue programs 50,675 18,802 Total liabilities and fund balance $50,675 $18,802 96 Exhibit C-12 CITY OF FRIDLEY, MINNESOTA DRUG AND GAMBLING FORFEITURE SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL Year Ended December 31, 2001 With comparative actual amounts for year ended December 31,2000 2001 Variance Favorable 2000 Budget Actual (Unfavorable) Actual Revenues: Fines and forfeits $16,599 $48,472 $31,873 $13,160 Expenditures: Current: Public safety: Supplies and other charges 10,471 10,471 - 11,832 Capital outlay 6,128 6,128 - 4,105 Total expenditures 16,599 16,599 0 15,937 Excess(deficiency)of revenues over(under) expenditures $0 31,873 $31,873 (2,777) Fund balance-January 1 18,802 21,579 Fund balance-December 31 $50,675 $18,802 97 Exhibit C-13 CITY OF FRIDLEY, MINNESOTA HOUSING REVITALIZATION SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 2001 and 2000 Assets 2001 2000 Cash and investments $250,000 $250,000 Total assets $250,000 $250,000 Liabilities and Fund Balance Liabilities $ - $ - Fund balance: Unreserved: Designated for special revenue programs 250,000 250,000 Total liabilities and fund balance $250,000 $250,000 98 Exhibit C-14 _ CITY OF FRIDLEY, MINNESOTA HOUSING REVITALIZATION SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL Year Ended December 31, 2001 With comparative actual amounts for year ended December 31, 2000 2001 Variance Favorable 2000 Budget Actual (Unfavorable) Actual Revenues $ - $ - $ - $ - Expenditures: Capital outlay 250,000 - 250,000 - Excess (deficiency) of revenues over(under)expenditures (250,000) 0 250,000 0 -- Other financing sources(uses): Operating transfer in: Special Assessment Debt Service Fund 250,000 - (250,000) - Excess(deficiency)of revenues and other financing sources over(under) expenditures and other financing uses $0 0 $0 0 Fund balance-January 1 250,000 250,000 — Fund balance-December 31 $250,000 $250,000 r 99 Exhibit C-15 CITY OF FRIDLEY, MINNESOTA CHEMICAL ASSESSMENT TEAM SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 2001 and 2000 .a. Assets 2001 2000 Due from other governments $9,828 $13,556 Total assets $9,828 $13,556 Liabilities and Fund Balance Liabilities: Accounts payable $1,134 $3,170 Salaries payable 536 313 Due to other funds 8,158 9,533 Due to other governments - 540 Total liabilities 9,828 13,556 Fund balance: Unreserved: Undesignated - - Total liabilities and fund balance $9,828 $13,556 100 Exhibit C-16 CITY OF FRIDLEY, MINNESOTA CHEMICAL ASSESSMENT TEAM SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL Year Ended December 31, 2001 With comparative actual amounts for year ended December 31, 2000 2001 Variance -- Favorable 2000 Budget Actual (Unfavorable) Actual ,` Revenues: Intergovernmental revenue: Federal $ - $ - $ - $447 State 39,136 39,136 - 52,608 Miscellaneous - - - 2,225 Total revenues 39,136 39,136 0 55,280 Expenditures: Current: Public safety: Personal services 10,741 10,741 - 9,989 Supplies and other charges 28,395 28,395 - 28,956 Total expenditures 39,136 39,136 0 38,945 Excess (deficiency)of revenues over(under) expenditures 0 0 0 16,335 _ Other financing sources (uses): Operating transfer in: General Fund - - - 8,049 Excess(deficiency)of revenues and other financing sources over(under) expenditures and other financing uses $0 0 $0 24,384 Fund balance (deficit) -January 1 - (24,384) Fund balance-December 31 $0 $0 101 Exhibit C-17 CITY OF FRIDLEY, MINNESOTA F.C.C. DONATIONS SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 2001 and 2000 Assets 2001 2000 Cash and investments $87,593 $100,134 Total assets $87,593 $100,134 Liabilities and Fund Balance Liabilities: Due to other governments $540 $2,169 Fund balance: Unreserved: Designated for special revenue programs 87,053 97,965 Total liabilities and fund balance $87,593 $100,134 102 Exhibit C-18 CITY OF FRIDLEY, MINNESOTA F.C.C. DONATIONS SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL Year Ended December 31, 2001 With comparative actual amounts for year ended December 31,2000 2001 Variance Favorable 2000 Budget Actual (Unfavorable) Actual Revenues: Investment income $ - $4,494 $4,494 $6,987 Donations 15,406 - (15,406) 5,000 Total revenues 15,406 4,494 (10,912) 11,987 Expenditures: Current: Recreation and naturalist: Supplies and other charges 3,607 3,607 - - Capital outlay 11,799 11,799 - 4,777 Total expenditures 15,406 15,406 0 4,777 Excess (deficiency)of revenues over(under)expenditures $0 (10,912) ($10,912) 7,210 Fund balance-January 1 97,965 90,755 Fund balance-December 31 $87,053 $97,965 103 Exhibit C-19 CITY OF FRIDLEY, MINNESOTA POLICE ACTIVITY SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 2001 and 2000 Assets 2001 2000 Cash and investments $2,175,345 $2,335,111 Total assets $2,175,345 $2,335,111 Liabilities and Fund Balance Liabilities $ - $ - Fund balance: Unreserved: Designated for special revenue programs 2,175,345 2,335,111 Total liabilities and fund balance $2,175,345 $2,335,111 f4 104 Exhibit C-20 CITY OF FRIDLEY, MINNESOTA POLICE ACTIVITY SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL Year Ended December 31, 2001 With comparative actual amounts for year ended December 31, 2000 2001 Variance ,r Favorable 2000 Budget Actual (Unfavorable) Actual Revenues: Intergovernmental: PERA refund $ - $ - $ - $2,242,586 Investment income 115,000 111,360 (3,640) 92,525 Total revenues 115,000 111,360 (3,640) 2,335,111 Expenditures - - - - ` Excess (deficiency) of revenues over(under)expenditures 115,000 111,360 (3,640) 2,335,111 Other financing sources (uses): Operating transfer out: General Fund (199,524) (193,105) 6,419 - Grant Management (78,021) (78,021) - - Total other financing sources (uses) (277,545) (271,126) 6,419 0 Excess (deficiency) of revenues and other financing sources over(under) expenditures and other financing uses ($162,545) (159,766) $2,779 2,335,111 Fund balance-January 1 2,335,111 - Fund balance-December 31 $2,175,345 $2,335,111 105 DEBT SERVICE FUNDS Debt Service Funds are used to finance and account for the payment of principal and interest on all general obligation debt excluding those accounted for in the proprietary funds. Special Assessment Fund This fund services debt on the general obligation improvement bonds that were issued to finance construction of public improvements. Special assessment improvements are paid for completely or in part by property owners deemed to have benefited from such improvements. Tax Increment Fund This fund services the debt of the tax increment bonds. Tax increment money is used to service the debt on redevelopment related bonds. Exhibit D-1 CITY OF FRIDLEY, MINNESOTA .--, DEBT SERVICE FUNDS COMBINING BALANCE SHEET December 31, 2001 and 2000 Special Tax Totals Assets Assessment Increment 2001 2000 — Cash and investments $8,845,296 $39,018 $8,884,314 $8,556,709 Receivables: Special assessments: Unremitted 3,204 - 3,204 23,746 Delinquent 5,386 - 5,386 3,204 Deferred 1,224,896 - 1,224,896 1,511,616 Loan receivable from component unit 707,497 - 707,497 757,662 Total assets $10,786,279 $39,018 $10,825,297 $10,852,937 Liabilities and Fund Balance Liabilities: Deferred revenue $1,230,282 $ - $1,230,282 $1,514,820 Due to other governments - - - 3,899 Total liabilities 1,230,282 0 1,230,282 1,518,719 Fund balance: Reserved for debt service 419,540 39,018 458,558 652,315 Reserved for long term receivable 707,497 - 707,497 757,662 Unreserved: Undesignated 8,428,960 - 8,428,960 7,924,241 Total fund balance 9,555,997 39,018 9,595,015 9,334,218 — Total liabilities and fund balance $10,786,279 $39,018 $10,825,297 $10,852,937 108 Exhibit D-2 CITY OF FRIDLEY, MINNESOTA DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended December 31, 2001 With comparative totals for year ended December 31, 2000 Special Tax Totals Assessment Increment 2001 2000 Revenues: Special assessments $407,575 $ - $407,575 $522,431 Investment income 418,625 - 418,625 603,321 Interest on loan 37,263 - 37,263 39,680 Total revenues 863,463 0 863,463 1,165,432 Expenditures: Debt service: Principal retirement 230,000 875,000 1,105,000 300,000 -, Interest and fiscal charges 40,826 698,814 739,640 754,872 Miscellaneous - - - 3,900 Total expenditures 270,826 1,573,814 1,844,640 1,058,772 Excess (deficiency)of revenues over(under)expenditures 592,637 (1,573,814) (981,177) 106,660 Other financing sources (uses): Operating transfers in (out): General Fund (232,900) - (232,900) (232,900) Capital Improvements Fund (9,600) - (9,600) (707,486) HRA Component Unit (88,822) 1,573,296 1,484,474 700,689 Total other financing sources (uses) (331,322) 1,573,296 1,241,974 (239,697) Excess (deficiency)of revenues and other financing sources over(under) expenditures and other financing uses 261,315 (518) 260,797 (133,037) Fund balance-January 1 9,294,682 39,536 9,334,218 9,467,255 Fund balance-December 31 $9,555,997 $39,018 $9,595,015 $9,334,218 109 CAPITAL PROJECT FUNDS Capital Projects Funds are used to account for the resources expended to acquire permanent or long term assets. These funds are established to provide special accounting for bond proceeds, grants and contributions designated for the acquisition of capital assets. Capital Projects Funds provide a formal mechanism, which enables administrators to ensure that revenues designated for specific purposes are properly used. Capital Improvement Fund This fund is used to account for the monies received from property taxes that are used to finance major improvements and the acquisition of assets that require a large capital outlay. Special Assessment Fund This fund is used to account for the construction of public improvements, such as residential streets,sidewalks, and storm sewers or for the provision of services that are to be paid for primarily by the benefited property owner. Exhibit E-1 CITY OF FRIDLEY, MINNESOTA CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET December 31,2001 _ With comparative totals for December 31, 2000 Capital Special Totals Assets Improvements Assessments 2001 2000 - Cash and investments $3,986,069 $249,512 $4,235,581 $5,400,729 Receivables: Taxes: _ Unremitted 744 - 744 920 Delinquent 4,493 - 4,493 4,020 Special assessments: Unremitted 68 73 141 266 Delinquent 177 3,269 3,446 2,433 Deferred 4,256 52,479 56,735 64,785 Due from other governments - - - 62,594 Total assets $3,995,807 $305,333 $4,301,140 $5,535,747 Liabilities and Fund Balance Liabilities: Accounts payable $2,523 $ - $2,523 $1,025 Contracts payable 2,475 - 2,475 - Salaries payable - 382 382 259 Deferred revenue 8,926 55,749 64,675 71,238 Due to other governments - 3,406 3,406 169 Total liabilities 13,924 59,537 73,461 72,691 Fund balance: "' Reserved for encumbrances 91,973 - 91,973 393,040 Unreserved: Designated for fixed asset replacement 1,095,707 - 1,095,707 1,170,123 - Designated for park improvements 1,560,602 - 1,560,602 1,572,971 Designated for street improvements 1,233,601 245,796 1,479,397 2,349,523 Undesignated - - - (22,601) amh Total fund balance 3,981,883 245,796 4,227,679 5,463,056 Total liabilities and fund balance $3,995,807 $305,333 $4,301,140 $5,535,747 113 Exhibit E-2 Page 1 of 2 CITY OF FRIDLEY, MINNESOTA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended December 31, 2001 With comparative totals for year ended December 31, 2000 Capital Special Totals - Improvements Assessments 2001 2000 Revenues: Taxes and special assessments: Current ad valorem taxes $74,682 $ - $74,682 $70,744 Delinquent ad valorem taxes 159 - 159 813 Special assessments 1,206 13,652 14,858 16,836 Total taxes and special assessments 76,047 13,652 89,699 88,393 Intergovernmental revenue: State credits 15,000 - 15,000 15,000 State aid for construction - - - 659,615 Other - - - 32,170 Total intergovernmental revenue 15,000 0 15,000 706,785 -. Investment income 224,402 10,557 234,959 370,326 Miscellaneous revenue: Refunds and reimbursements - 28,225 28,225 - Other 34,265 650 34,915 69,354 ., Total miscellaneous revenue 34,265 28,875 63,140 69,354 Total revenues 349,714 53,084 402,798 1,234,858 a- 114 Exhibit E-2 Page 2 of 2 CITY OF FRIDLEY, MINNESOTA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended December 31, 2001 With comparative totals for year ended December 31, 2000 Capital Special Totals Improvements Assessments 2001 2000 Expenditures: Current: Public works $99,177 $76,850 $176,027 $153,898 Capital outlay 537,844 933,904 1,471,748 1,392,877 Total expenditures 637,021 1,010,754 1,647,775 1,546,775 Excess(deficiency)of revenues over(under) expenditures (287,307) (957,670) (1,244,977) (311,917) Other financing sources(uses): Operating transfers in (out): ... Water Fund - - - 85,234 Special Assessment Debt Service Fund - 9,600 9,600 707,486 Capital Improvement Fund - 907,655 907,655 1,183,028 Special Assessments Capital Projects Fund (907,655) - (907,655) (1,183,028) Total other financing sources (uses) (907,655) 917,255 9,600 792,720 Excess (deficiency)of revenues and other financing sources over(under)expenditures and other financing uses (1,194,962) (40,415) (1,235,377) 480,803 -- Fund balance-January 1 4,971,191 491,865 5,463,056 4,982,253 - Residual equity transfers 205,654 (205,654) - - Fund balance-December 31 $3,981,883 $245,796 $4,227,679 $5,463,056 115 Exhibit E-3 CITY OF FRIDLEY, MINNESOTA CAPITAL IMPROVEMENTS CAPITAL PROJECTS FUND COMPARATIVE BALANCE SHEET December 31, 2001 and 2000 Totals Assets 2001 2000 Cash and investments $3,986,069 $4,908,267 Receivables: Taxes: Unremitted 744 920 Delinquent 4,493 4,020 Special assessments: Unremitted 68 266 Delinquent 177 - Deferred 4,256 5,320 Due from other governments - 62,594 Total assets $3,995,807 $4,981,387 — Liabilities and Fund Balance Liabilities: Accounts payable $2,523 $687 Contracts payable 2,475 - Deferred revenue 8,926 9,340 Due to other governments - 169 Total liabilities 13,924 10,196 Fund balance: Reserved for encumbrances 91,973 393,040 Unreserved: Designated for fixed asset replacement 1,095,707 1,170,123 Designated for park improvements 1,560,602 1,572,971 Designated for street improvements 1,233,601 1,835,057 .... Total fund balance 3,981,883 4,971,191 Total liabilities and fund balance $3,995,807 $4,981,387 116 Exhibit E-4 CITY OF FRIDLEY, MINNESOTA CAPITAL IMPROVEMENTS CAPITAL PROJECTS FUND STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL Year Ended December 31, 2001 With comparative actual amounts for year ended December 31, 2000 2001 Variance Favorable 2000 - Budget Actual (Unfavorable) Actual Revenues: Taxes: Current ad valorem taxes $70,550 $74,682 $4,132 $70,744 - Delinquent ad valorem taxes - 159 159 813 Total taxes 70,550 74,841 4,291 71,557 Special assessments - 1,206 1,206 1,550 Intergovernmental revenue: State credits 15,000 15,000 - 15,000 State aid for construction - - - 659,615 Other - - - 32,170 Total intergovernmental revenue 15,000 15,000 0 706,785 Investment income 417,225 224,402 (192,823) 360,305 Miscellaneous revenue: Other 30,000 34,265 4,265 68,129 - Total revenues 532,775 349,714 (183,061) 1,208,326 Expenditures: Current: Public works 99,177 99,177 - 44,962 Capital outlay 632,577 537,844 94,733 320,206 _ Total expenditures 731,754 637,021 94,733 365,168 Excess (deficiency)of revenues over (under)expenditures (198,979) (287,307) (88,328) 843,158 Other financing sources(uses): Operating transfers in (out): - Special Assessment Capital Projects Fund (985,310) (907,655) 77,655 (1,183,028) Excess (deficiency)of revenues and other financing sources over(under)expenditures and other financing uses ($1,184,289) (1,194,962) ($10,673) (339,870) - Fund balance-January 1 4,971,191 5,311,061 Residual equity transfers 205,654 - Fund balance-December 31 $3,981,883 $4,971,191 117 ENTERPRISE FUNDS Enterprise Funds are used to account for the operations of self-supporting governmental activities that render services or goods to the public.The accounting records are maintained on an accrual basis. The reporting for enterprise funds is similar to comparable private enterprises. Creditors, legislators or the general public can evaluate the performance of a municipal enterprise on the same basis as they can the performance of investor-owned enterprises. Liquor Fund This fund accounts for the operation of the City's off-sale liquor establishments. Public Utilities Fund This fund accounts for the operations of the City-owned sewer and water systems. Exhibit F-1 CITY OF FRIDLEY, MINNESOTA ENTERPRISE FUNDS COMBINING BALANCE SHEET December 31, 2001 With comparative totals for December 31, 2000 Public Totals Assets Liquor Utilities 2001 2000 Current assets: Cash and investments $987,937 $7,842,810 $8,830,747 $8,442,668 Accounts receivable 6,788 1,334,987 1,341,775 1,410,146 Taxes receivable: Unremitted - 81 81 182 Delinquent - 216 216 135 Special assessments receivable - 127,657 127,657 151,158 Due from other funds - 834 834 1,745 Due from other governments - 4,120 4,120 3,141 Inventories, at cost 513,727 7,271 520,998 652,137 Prepaid items - 186,484 186,484 185,555 Total current assets 1,508,452 9,504,460 11,012,912 10,846,867 - Property and equipment, at cost: Property and equipment 1,200,782 33,048,125 34,248,907 33,640,535 Less: accumulated depreciation (319,099) (13,390,468) (13,709,567) (12,781,594) �` Net property and equipment 881,683 19,657,657 20,539,340 20,858,941 Total assets $2,390,135 $29,162,117 $31,552,252 $31,705,808 Liabilities and Fund Equity Current liabilities: Accounts payable $347,381 $58,662 $406,043 $287,334 Salaries payable 15,897 21,764 37,661 44,172 Due to other funds 91 37 128 203 Due to other governments 51,199 17,428 68,627 66,738 Accrued interest payable - 71,609 71,609 78,231 Bonds payable-current - 360,000 360,000 350,000 Total current liabilities 414,568 529,500 944,068 826,678 Long-term liabilities: Bonds payable - 3,153,709 3,153,709 3,511,779 - Total liabilities 414,568 3,683,209 4,097,777 4,338,457 Fund equity: Contributed capital - 10,057,510 10,057,510 10,427,575 Retained earnings: Reserved for capital outlay - 9,348,000 9,348,000 9,128,000 Unreserved 1,975,567 6,073,398 8,048,965 7,811,776 Total fund equity 1,975,567 25,478,908 27,454,475 27,367,351 Total liabilities and fund equity $2,390,135 $29,162,117 $31,552,252 $31,705,808 120 Exhibit F-2 CITY OF FRIDLEY, MINNESOTA ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Year Ended December 31, 2001 With comparative totals for year ended December 31, 2000 "" Public Totals Liquor Utilities 2001 2000 Sales and cost of sales: -. Sales $5,011,326 $ - $5,011,326 $5,200,127 Cost of sales 3,907,397 - 3,907,397 4,134,935 Gross profit 1,103,929 0 1,103,929 1,065,192 - Operating revenues: Water sales and sewer rents - 4,994,669 4,994,669 5,150,374 Other revenues - 8,911 8,911 13,403 - Total operating revenues 0 5,003,580 5,003,580 5,163,777 Operating expenses: Personal services 410,773 1,113,485 1,524,258 1,531,577 Supplies and other charges: Disposal charges - 2,470,086 2,470,086 2,439,370 Other 329,193 591,375 920,568 902,187 .. Depreciation 77,337 973,515 1,050,852 1,018,648 Total operating expenses 817,303 5,148,461 5,965,764 5,891,782 Operating income (loss) 286,626 (144,881) 141,745 337,187 Non-operating revenues (expenses): Intergovernmental revenue - - - 34,945 Investment income 31,878 369,365 401,243 579,258 Debt service - (176,142) (176,142) (199,893) Special assessments - 9,378 9,378 30,271 Gain (loss) on disposal of fixed assets 13,055 (5,655) 7,400 (59,554) Other revenues 3,500 - 3,500 - Total non-operating revenues (expenses) 48,433 196,946 245,379 385,027 _ Income before operating transfers 335,059 52,065 387,124 722,214 Operating transfers in (out): General Fund (300,000) - (300,000) (200,000) - Special Assessment Capital Projects Fund - - - (85,234) Total transfers in (out) (300,000) 0 (300,000) (285,234) Net income 35,059 52,065 87,124 436,980 Credit arising from transfer of depreciation on contributed capital - 370,065 370,065 370,065 - Retained earnings-January 1 1,940,508 14,999,268 16,939,776 16,132,731 Retained earnings-December 31 $1,975,567 $15,421,398 $17,396,965 $16,939,776 121 Exhibit F-3 CITY OF FRIDLEY, MINNESOTA ENTERPRISE FUNDS COMBINING STATEMENT OF CASH FLOWS Year Ended December 31, 2001 With comparative totals for year ended December 31, 2000 Public Totals Liquor Utilities 2001 2000 Cash flows from operating activities: Operating income (loss) $286,626 ($144,881) $141,745 $337,187 Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation 77,337 973,515 1,050,852 1,018,648 Change in assets and liabilities: Decrease(increase) in receivables (3,938) 95,830 91,892 (24,024) Decrease(increase) in due from other funds - 911 911 (846) Decrease(increase) in due from other governments - (979) (979) 25,851 Decrease(increase) in inventories 132,205 (1,066) 131,139 102,202 Decrease(increase) in prepaid items - (929) (929) 693 Increase (decrease) in payables 117,676 (10,286) 107,390 (215,223) Net cash flows from operating activities 609,906 912,115 1,522,021 1,244,488 Cash flows from noncapital financing activities: Intergovernmental revenue - - - 34,945 Operating transfers in (out) (300,000) - (300,000) (285,234) Special assessment collections - 9,378 9,378 30,271 Other non-capital items 3,500 - 3,500 - Net cash flows from noncapital financing activities (296,500) 9,378 (287,122) (220,018) Cash flows from capital and related financing activities: -- Acquisition and construction of fixed assets - (742,985) (742,985) (576,939) Principal paid on revenue bonds - (350,000) (350,000) (1,443,070) Interest and paying agent fees on revenue bonds - (174,212) (174,212) (199,893) Proceeds from sale of fixed assets 13,055 6,079 19,134 - Net cash flows from capital and related financing activities 13,055 (1,261,118) (1,248,063) (2,219,902) Cash flows from investing activities: Investment income 31,878 369,365 401,243 579,258 Net increase(decrease) in cash and cash equivalents 358,339 29,740 388,079 (616,174) Cash and cash equivalents-January 1 629,598 7,813,070 8,442,668 9,058,842 Cash and cash equivalents-December 31 $987,937 $7,842,810 $8,830,747 $8,442,668 122 Exhibit F-4 CITY OF FRIDLEY, MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE BALANCE SHEET December 31, 2001 and 2000 Assets 2001 2000 Current assets: Cash and investments $987,937 $629,598 Accounts receivable 6,788 2,850 Inventories, at cost 513,727 645,932 Total current assets 1,508,452 1,278,380 Property and equipment, at cost: Land 151,946 151,946 Buildings 130,211 130,211 Improvements other than buildings 661,315 661,315 Machinery and equipment 16,440 16,440 Office equipment and furniture 240,870 300,423 Total property and equipment 1,200,782 1,260,335 Less: accumulated depreciation (319,099) (301,315) Net property and equipment 881,683 959,020 Total assets $2,390,135 $2,237,400 Liabilities and Fund Equity Current liabilities: r.. Accounts payable $347,381 $227,774 Salaries payable 15,897 15,967 Due to other funds 91 179 Due to other governments 51,199 52,972 Total current liabilities 414,568 296,892 — Fund equity: Retained earnings- unreserved 1,975,567 1,940,508 Total liabilities and fund equity $2,390,135 $2,237,400 123 Exhibit F-5 CITY OF FRIDLEY, MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Years ended December 31, 2001 and 2000 2001 2000 Sales and cost of sales: Sales $5,011,326 $5,200,127 Cost of sales 3,907,397 4,134,935 — Gross profit 1,103,929 1,065,192 Operating expenses: Selling: Personal services 264,120 307,493 Supplies and other charges 51,572 69,341 Total selling expenses 315,692 376,834 Administration and overhead: Personal services 146,653 141,466 Supplies and other charges 277,621 330,174 Depreciation 77,337 77,935 Total administration and overhead 501,611 549,575 -- Total operating expenses 817,303 926,409 Operating income 286,626 138,783 Non-operating revenues(expenses): Investment income 31,878 44,785 Gain on disposal of fixed assets 13,055 - Other revenues 3,500 - Total non-operating revenues 48,433 44,785 "" Income before operating transfers 335,059 183,568 Operating transfers in (out): General Fund (300,000) (200,000) Net income (loss) 35,059 (16,432) Retained earnings-January 1 1,940,508 1,956,940 Retained earnings-December 31 $1,975,567 $1,940,508 124 Exhibit F-6 CITY OF FRIDLEY, MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31,2001 and 2000 2001 2000 Cash flows from operating activities: Operating income $286,626 $138,783 Adjustments to reconcile operating income to net — cash flows from operating activities: Depreciation 77,337 77,935 Changes in assets and liabilities: Decrease(increase) in receivables (3,938) (2,030) Decrease(increase) in inventories 132,205 102,626 Decrease(increase) in prepaid items - 17,096 Increase(decrease) in payables 117,676 (188,544) Net cash flows from operating activities 609,906 145,866 Cash flows from noncapital financing activities: "" Operating transfers in (out) (300,000) (200,000) Other non-capital items 3,500 - Net cash flows from noncapital financing activities (296,500) (200,000) Cash flows from capital and related financing activities: Acquisition and construction of fixed assets - (36,185) Proceeds from sale of fixed assets 13,055 - Net cash flows from capital and related financing activities 13,055 (36,185) Cash flows from investing activities: Investment income 31,878 44,785 Net increase (decrease) in cash and cash equivalents 358,339 (45,534) ... Cash and cash equivalents-January 1 629,598 675,132 Cash and cash equivalents-December 31 $987,937 $629,598 125 Exhibit F-7 Page 1 of 2 CITY OF FRIDLEY, MINNESOTA PUBLIC UTILITIES ENTERPRISE FUND COMPARATIVE BALANCE SHEET December 31, 2001 and 2000 Assets 2001 2000 -- Current assets: Cash and investments $7,842,810 $7,813,070 Receivables: Accounts 1,334,987 1,407,296 Taxes: Unremitted 81 182 Delinquent 216 135 Special assessments 127,657 151,158 Due from other funds 834 1,745 Due from other governments 4,120 3,141 Inventories, at cost 7,271 6,205 Prepaid items 186,484 _ 185,555 Total current assets 9,504,460 9,568,487 Property and equipment, at cost: Land 154,531 154,531 Buildings 1,519,535 1,519,535 Improvements other than buildings 11,161,010 10,517,640 Machinery and equipment 2,160,829 2,136,274 Office equipment and furniture 10,650 10,650 Water and sewer lines 18,041,570 18,041,570 Total property and equipment 33,048,125 32,380,200 Less: accumulated depreciation (13,390,468) (12,480,279) Net property and equipment 19,657,657 19,899,921 Total assets $29,162,117 $29,468,408 126 Exhibit F-7 Page 2 of 2 CITY OF FRIDLEY, MINNESOTA PUBLIC UTILITIES ENTERPRISE FUND ., COMPARATIVE BALANCE SHEET December 31,2001 and 2000 Liabilities and Fund Equity 2001 2000 Current liabilities: — Accounts payable $58,662 $59,560 Salaries payable 21,764 28,205 Due to other funds 37 24 ,r Due to other governments 17,428 13,766 Accrued interest payable 71,609 78,231 Bonds payable-current 360,000 350,000 Total current liabilities 529,500 529,786 — Long-term liabilities: Bonds payable 3,153,709 3,511,779 Total liabilities 3,683,209 4,041,565 Fund equity: Contributed capital 10,057,510 10,427,575 Retained earnings: Reserved for capital outlay 9,348,000 9,128,000 . Unreserved 6,073,398 5,871,268 Total fund equity 25,478,908 25,426,843 Total liabilities and fund equity $29,162,117 $29,468,408 127 Exhibit F-8 CITY OF FRIDLEY, MINNESOTA PUBLIC UTILITIES ENTERPRISE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Years ended December 31, 2001 and 2000 2001 2000 Operating revenues: Water $1,644,814 $1,712,797 Sewer 3,018,519 3,114,030 Storm sewer 331,336 323,547 Other revenues 8,911 13,403 Total operating revenues 5,003,580 5,163,777 Operating expenses: Personal services 1,113,485 1,082,618 — Supplies and other charges: Disposal charges 2,470,086 2,439,370 Other 591,375 502,672 Depreciation: "` Purchased assets 603,450 570,648 Contributed assets 370,065 370,065 Total operating expenses 5,148,461 4,965,373 Operating income (loss) (144,881) _ 198,404 ^ Nonoperating revenues (expenses): Intergovernmental revenue - 34,945 Investment income 369,365 534,473 Debt service (176,142) (199,893) Special assessments 9,378 30,271 Gain (loss)on disposal of fixed assets (5,655) (59,554) Total nonoperating revenues (expenses) 196,946 340,242 Income before operating transfers 52,065 538,646 Operating transfers in (out): Special Assessment Capital Project Fund - (85,234) Net income 52,065 453,412 Credit arising from transfer of depreciation on contributed capital 370,065 370,065 — Retained earnings-January 1 14,999,268 14,175,791 Retained earnings-December 31 $15,421,398 $14,999,268 128 Exhibit F-9 CITY OF FRIDLEY, MINNESOTA PUBLIC UTILITIES ENTERPRISE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31, 2001 and 2000 2001 2000 Cash flows from operating activities: Operating income (loss) ($144,881) $198,404 Adjustments to reconcile operating income (loss)to net cash flows from operating activities: Depreciation 973,515 940,713 Change in assets and liabilities: Decrease(increase) in receivables 95,830 (21,994) Decrease(increase) in due from other funds 911 (846) Decrease(increase) in due from other governments (979) 25,851 Decrease (increase) in inventories (1,066) (424) Decrease(increase) in prepaid items (929) (16,403) Increase(decrease) in payables (10,286) (26,679) Net cash flows from operating activities 912,115 1,098,622 Cash flows from noncapital financing activities: Intergovernmental revenue - 34,945 Operating transfers in (out) - (85,234) Special assessment collections 9,378 30,271 Net cash flows from noncapital financing activities 9,378 (20,018) Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (742,985) (540,754) Principal paid on revenue bonds (350,000) (1,443,070) Interest and paying agent fees paid on revenue bonds (174,212) (199,893) Proceeds from sale of fixed assets 6,079 Net cash flows from capital and related financing activities (1,261,118) (2,183,717) Cash flows from investing activities: Investment income 369,365 534,473 Net increase (decrease) in cash and cash equivalents 29,740 (570,640) Cash and cash equivalents-January 1 7,813,070 8,383,710 Cash and cash equivalents-December 31 $7,842,810 $7,813,070 129 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 general liability policy, and for the self-insurance health plan for City employees. 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. Exhibit G-1 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUNDS COMBINING BALANCE SHEET December 31,2001 ,,,. With comparative totals for December 31,2000 Employee Self Information Totals Assets Benefits Insurance Systems 2001 2000 Current assets: Cash and investments $1,010,291 $1,937,288 $684,705 $3,632,284 $3,973,709 Accounts receivable - 39,397 - 39,397 21,602 Due from component unit - 272 - 272 544 Due from other governments - - 4,290 4,290 - Total current assets 1,010,291 1,976,957 688,995 3,676,243 3,995,855 Property and equipment, at cost: Property and equipment - - 941,373 941,373 733,948 Less: accumulated depreciation - - (597,014) (597,014) (479,907) Net property and equipment 0 0 344,359 344,359 254,041 Total assets $1,010,291 $1,976,957 $1,033,354 $4,020,602 $4,249,896 Liabilities and Fund Equity Current liabilities: - Accounts payable $ - $70,111 $5,219 $75,330 $32,720 Payroll deductions payable 68,910 - - 68,910 70,368 Compensated absences payable 765,918 - - 765,918 805,858 Due to other governments - - - , � - 33,995 Total liabilities 834,828 70,111 5,219 910,158 942,941 Fund equity: Contributed capital - 1,000,000 826,917 1,826,917 1,827,822 Retained earnings: Reserved for employee benefits 175,463 - - 175,463 280,325 ^ Unreserved - 906,846 201,218 1,108,064 1,198,808 Total fund equity 175,463 1,906,846 1,028,135 3,110,444 3,306,955 Total liabilities and fund equity $1,010,291 $1,976,957 $1,033,354 $4,020,602 $4,249,896 132 Exhibit G-2 CITY OF FRIDLEY, MINNESOTA - INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND _ CHANGES IN RETAINED EARNINGS Year Ended December 31, 2001 With comparative totals for year ended December 31, 2000 - Employee Self Information Totals Benefits Insurance Systems 2001 2000 Operating revenues: Charges for services $2,130 $574,969 $116,455 $693,554 $688,926 Insurance and other reimbursements - 53,812 4,290 58,102 - Total operating revenues 2,130 628,781 120,745 751,656 688,926 Operating expenses: Personal services 8,429 - - 8,429 8,094 Supplies and other charges 1,100 807,307 23,352 831,759 671,094 Depreciation - - 151,029 151,029 99,731 - Total operating expenses 9,529 807,307 174,381 991,217 778,919 Operating income(loss) (7,399) (178,526) (53,636) (239,561) (89,993) Nonoperating revenues: Investment income 52,537 97,154 36,028 185,719 276,390 Income (loss) before operating transfers 45,138 (81,372) (17,608) (53,842) 186,397 Operating transfers in (out): - Special Revenue Fund - - 7,331 7,331 - General Fund (150,000) - - (150,000) - Total operating transfers in (out) (150,000) 0 7,331 (142,669) 0 Net income (loss) (104,862) (81,372) (10,277) (196,511) 186,397 Credit arising from transfer of i depreciation on contributed capital - - 905 905 3,027 Retained earnings-January 1 280,325 988,218 210,590 1,479,133 1,289,709 Retained earnings-December 31 $175,463 $906,846 $201,218 $1,283,527 $1,479,133 133 Exhibit G-3 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS Year Ended December 31,2001 With comparative totals for year ended December 31,2000 .. Employee Self Information Totals Benefits Insurance Systems 2001 2000 Cash flows from operating activities: 'R Operating income(loss) ($7,399) ($178,526) ($53,636) ($239,561) ($89,993) Adjustments to reconcile operating income(loss) to net cash flows from operating activities: Depreciation - - 151,029 151,029 99,731 Change in assets and liabilities: (Increase)decrease in accounts receivable - (17,795) - (17,795) (19,904) (Increase)decrease in due from component unit - 272 - 272 (518) (Increase)decrease in due from other governments - - (4,290) (4,290) - Increase(decrease)in accounts payable (8,720) 39,891 2,719 33,890 5,019 Increase(decrease)in due to other governments - - (33,995) (33,995) - Increase(decrease)in compensated absences payable (39,940) - - (39,940) (33,008) Increase(decrease)in payroll deductions payable 7,262 - - 7,262 (1,017) .. Net cash flows from operating activities (48,797) (156,158) 61,827 (143,128) (39,690) Cash flows from noncapital financing activities: Operating transfers in(out) (150,000) - 7,331 (142,669) - Cash flows from capital and related financing activities: Acquisition of fixed assets - - (241,347) (241,347) (142,383) Cash flows from investing activities: Investment income 52,537 97,154 36,028 185,719 276,390 .-. Net increase(decrease)in cash and cash equivalents (146,260) (59,004) (136,161) (341,425) 94,317 Cash and cash equivalents-January 1 1,156,551 1,996,292 820,866 3,973,709 3,879,392 Cash and cash equivalents-December 31 $1,010,291 $1,937,288 $684,705 $3,632,284 $3,973,709 loftr 134 Exhibit G-4 CITY OF FRIDLEY, MINNESOTA EMPLOYEE BENEFITS INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31,2001 and 2000 Assets 2001 2000 Cash and investments $1,010,291 $1,156,551 Total assets $1,010,291 $1,156,551 Liabilities and Fund Equity Current liabilities: Accounts payable $ - $8,720 Payroll deductions payable 68,910 61,648 Compensated absences payable 765,918 805,858 Total current liabilities 834,828 876,226 Fund equity: Retained earnings: Reserved for employee benefits 175,463 280,325 Total liabilities and fund equity $1,010,291 $1,156,551 135 Exhibit G-5 CITY OF FRIDLEY, MINNESOTA .� EMPLOYEE BENEFITS INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS ,^ Years ended December 31, 2001 and 2000 2001 2000 Operating revenues: Charges for services $2,130 $ - Operating expenses: General government: Personal services 8,429 8,094 ,t Supplies and other charges 1,100 2,087 Total operating expenses 9,529 10,181 Operating income(loss) (7,399) (10,181) Nonoperating revenues: Investment income 52,537 79,124 Income before operating transfers 45,138 68,943 Operating transfers in (out): General Fund (150,000) - Net income(loss) (104,862) 68,943 Retained earnings-January 1 280,325 211,382 Retained earnings-December 31 $175,463 $280,325 136 Exhibit G-6 CITY OF FRIDLEY, MINNESOTA EMPLOYEE BENEFITS INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CASH FLOWS ^ Years ended December 31,2001 and 2000 2001 2000 - Cash flows from operating activities: Operating income (loss) ($7,399) ($10,181) Change in assets and liabilities: Increase(decrease) in accounts payable (8,720) 534 Increase (decrease) in payroll deductions payable 7,262 (1,017) Increase(decrease) in compensated absences payable (39,940) (33,008) - Net cash flows from operating activities (48,797) (43,672) Cash flows from noncapital financing activities: Operating transfers in (out) (150,000) - Cash flows from investing activities: Investment income 52,537 79,124 Net increase (decrease) in cash and cash equivalents (146,260) 35,452 Cash and cash equivalents-January 1 1,156,551 1,121,099 Cash and cash equivalents-December 31 $1,010,291 $1,156,551 137 Exhibit G-7 CITY OF FRIDLEY, MINNESOTA SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31, 2001 and 2000 Assets 2001 2000 Cash and investments $1,937,288 $1,996,292 Accounts receivable 39,397 21,602 Due from component unit 272 544 Total assets $1,976,957 $2,018,438 Liabilities and Fund Equity Current liabilities: Accounts payable $70,111 $30,220 Fund equity: Contributed capital 1,000,000 1,000,000 '1/4 Retained earnings: Unreserved 906,846 988,218 Total fund equity 1,906,846 1,988,218 Total liabilities and fund equity $1,976,957 $2,018,438 a 138 Exhibit G-8 CITY OF FRIDLEY, MINNESOTA SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Years ended December 31, 2001 and 2000 2001 2000 Operating revenues: Charges for services $574,969 $587,119 Insurance reimbursements 53,812 - Total operating revenues 628,781 587,119 Operating expenses: Supplies and other charges 807,307 622,041 Operating income (loss) (178,526) (34,922) Nonoperating revenues: Investment income 97,154 141,344 Net income (loss) (81,372) 106,422 Retained earnings-January 1 988,218 881,796 Retained earnings-December 31 $906,846 $988,218 139 Exhibit G-9 CITY OF FRIDLEY, MINNESOTA .� SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31, 2001 and 2000 2001 2000 Cash flows from operating activities: Operating income (loss) ($178,526) ($34,922) Adjustments to reconcile operating income (loss)to net cash flows from operating activities: +� Change in assets and liabilities: (Increase)decrease in accounts receivable (17,795) (19,904) (Increase) decrease in due from component unit 272 (518) Increase (decrease) in accounts payable 39,891 (27,613) Net cash flows from operating activities (156,158) (82,957) Cash flows from investing activities: Investment income 97,154 141,344 Net increase (decrease) in cash and cash equivalents (59,004) 58,387 Cash and cash equivalents-January 1 1,996,292 1,937,905 Cash and cash equivalents-December 31 $1,937,288 $1,996,292 ••r 140 Exhibit G-10 CITY OF FRIDLEY, MINNESOTA INFORMATION SYSTEMS INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31,2001 and 2000 Assets 2001 2000 Current assets: Cash and investments $684,705 $820,866 Due from other governments 4,290 - Total current assets 688,995 820,866 Property and equipment, at cost: Property and equipment 941,373 733,948 Less: accumulated depreciation (597,014) (479,907) Net property and equipment 344,359 254,041 Total assets $1,033,354 $1,074,907 Liabilities and Fund Equity Current liabilities: Accounts payable $5,219 $2,500 Due to other governments - 33,995 Total liabilities 5,219 36,495 Fund equity: Contributed capital 826,917 827,822 Retained earnings: Unreserved, undesignated 201,218 210,590 Total fund equity 1,028,135 1,038,412 Total liabilities and fund equity $1,033,354 $1,074,907 .. 141 Exhibit G-11 CITY OF FRIDLEY, MINNESOTA ., INFORMATION SYSTEMS INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Years ended December 31,2001 and 2000 2001 2000 Operating revenues: Charges for services $116,455 $101,807 Other cities and county reimbursements 4,290 - Total operating revenues 120,745 101,807 Operating expenses: +. General government: Supplies and other charges 23,352 46,966 Depreciation 151,029 99,731 .. Total operating expenses 174,381 146,697 Operating income (loss) (53,636) (44,890) Nonoperating revenues: Investment income 36,028 55,922 Income(loss) before operating transfers (17,608) 11,032 Operating transfers in (out): Special Revenue Fund 7,331 - Net income (loss) (10,277) 11,032 Credit arising from transfer of depreciation on contributed assets 905 3,027 Retained earnings-January 1 210,590 196,531 Retained earnings-December 31 $201,218 $210,590 142 Exhibit G-12 CITY OF FRIDLEY, MINNESOTA INFORMATION SYSTEMS INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31, 2001 and 2000 2001 2000 — Cash flows from operating activities: Operating income (loss) ($53,636) ($44,890) Adjustments to reconcile operating income (loss)to net cash flows from operating activities: Depreciation 151,029 99,731 Change in assets and liabilities: Decrease (increase) in due from other governments (4,290) - Increase(decrease) in accounts payable 2,719 32,098 Increase(decrease) in due to other governments (33,995) - Net cash flows from operating activities 61,827 86,939 Cash flows from noncapital financing activities: Operating transfers in (out) 7,331 - Cash flows from capital and related financing activities: Acquisition of fixed assets (241,347) (142,383) Cash flows from investing activities: Investment income 36,028 55,922 Net increase (decrease) in cash and cash equivalents (136,161) 478 Cash and cash equivalents-January 1 820,866 820,388 Cash and cash equivalents- December 31 $684,705 $820,866 143 TRUST AND AGENCY FUNDS Trust and Agency Funds are used to account for assets held by a government in a trustee or agent capacity for individuals, private organizations, other governments or other funds. 9 P Y Expendable Trust Fund The City of Fridley maintains only one Expendable Trust Fund that is used to defray the City administrative costs associated with the issuance of industrial revenue development bonds. Six Cities Watershed Agency Fund This fund was established to account for the collection of taxes received from the County on behalf of the Six Cities Watershed District. Hotel/Motel Agency Fund This fund was established to account for the collection of a three percent tax that has been imposed on all the hotels and motels in the north suburban area. The collection process is administered by the City on behalf of the North Metro Convention and Tourism Bureau, which uses the money to provide information to visitors and create an awareness of the facilities available in this area. Exhibit H-1 CITY OF FRIDLEY, MINNESOTA TRUST AND AGENCY FUNDS COMBINING BALANCE SHEET December 31,2001 With comparative totals for December 31,2000 '1 Expendable Agency Totals Assets Trust Funds 2001 2000 Cash and investments $34,137 $11,361 $45,498 $50,042 Receivables: Accounts - 2,979 2,979 3,442 Taxes: . Unremitted - 64 64 60 � Delinquent - 486 486 427 Total assets $34,137 $14,890 $49,027 $53,971 Liabilities and Fund Balance Liabilities: Deposits payable $12,591 $ - $12,591 $12,591 Deferred revenue - 486 486 427 -- Due to other funds - 201 201 224 Due to other governments - 14,203 14,203 20,816 Total liabilities 12,591 14,890 27,481 34,058 Fund balance: Unreserved: — Undesignated 21,546 - 21,546 19,913 Total liabilities and fund balance $34,137 $14,890 $49,027 $53,971 t. 14 6 Exhibit H-2 CITY OF FRIDLEY, MINNESOTA INDUSTRIAL DEVELOPMENT REVENUE BOND TRUST FUND COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Years ended December 31, 2001 and 2000 2001 2000 Revenues: Investment income $1,633 $2,239 Expenditures - - Excess(deficiency)of revenues over(under) expenditures 1,633 2,239 Fund balance-January 1 19,913 17,674 Fund balance-December 31 $21,546 $19,913 147 Exhibit H-3 CITY OF FRIDLEY, MINNESOTA ALL AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Year ended December 31, 2001 Balance Balance January 1 Additions Deletions December 31 SIX CITIES WATERSHED AGENCY FUND Assets Cash and investments $17,538 $ - $6,177 $11,361 - Taxes receivable: - - - - Unremitted 60 4 - 64 Delinquent 427 59 - 486 Total assets $18,025 $63 $6,177 $11,911 Liabilities Due to other governments $17,598 $ - $6,173 $11,425 Deferred revenue 427 59 - 486 Total liabilities $18,025 $59 $6,173 $11,911 HOTEUMOTEL TAX AGENCY FUND Assets Accounts receivable $3,442 $ - $463 $2,979 Total assets $3,442 $0 $463 $2,979 Liabilities Due to other funds $224 $ - $23 $201 Due to other governments 3,218 - 440 2,778 Total liabilities $3,442 $0 $463 $2,979 Balance Balance January 1 Additions Deletions December 31 TOTAL-ALL AGENCY FUNDS ., Assets Cash and investments $17,538 $ - $6,177 $11,361 Receivables: Accounts 3,442 - 463 2,979 Taxes: Unremitted 60 4 - 64 Delinquent 427 59 - 486 Total assets $21,467 $63 $6,640 $14,890 Liabilities Due to other funds $224 $ - $23 $201 Due to other governments 20,816 - 6,613 14,203 Deferred revenue 427 59 - 486 Total liabilities $21,467 $59 $6,636 $14,890 148 GENERAL FIXED ASSET ACCOUNT GROUP The General Fixed Asset Account Group is set up to account for long-lived assets not accounted for in an enterprise, trust or internal service fund. a Exhibit I-1 CITY OF FRIDLEY, MINNESOTA COMPARATIVE SCHEDULE OF GENERAL FIXED ASSETS December 31, 2001 and 2000 a 2001 2000 General fixed assets: Land $2,735,987 $2,735,987 Buildings 6,984,054 6,934,214 Improvements other than buildings 26,337,891 25,182,749 Machinery and equipment 6,325,701 6,050,970 Total general fixed assets $42,383,633 $40,903,920 Investment in general fixed assets from: General obligation bonds $1,176,647 $1,176,647 Federal and state aid 7,981,344 7,981,344 General Fund revenues 12,226,518 12,265,944 Special Revenue Fund revenues 1,810,327 1,828,576 Special assessments 13,553,928 13,131,789 Private gifts 911,881 902,728 Other sources 4,722,988 3,616,892 a Total investment in general fixed assets $42,383,633 $40,903,920 150 Exhibit 1-2 � , CITY OF FRIDLEY, MINNESOTA SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY December 31, 2001 - General Fixed General Fixed Assets Assets Function and Activity 1/1/01 Additions Deletions 12/31/01 General government: Cable TV $143,162 $83,158 $18,249 $208,071 Accounting 19,717 - - 19,717 Elections 63,064 - - 63,064 Management information systems 2,450 - 2,450 - City clerk/records 141,139 - - 141,139 Planning 35,845 - - 35,845 Municipal center 3,658,679 136,655 92,083 3,703,251 Total general government 4,064,056 219,813 112,782 4,171,087 Public safety: Public protection 885,027 94,430 79,556 899,901 Fire protection 2,293,676 318,896 164,253 2,448,319 Inspection services 7,164 - - 7,164 Civil defense 93,473 - - 93,473 Total public safety 3,279,340 413,326 243,809 3,448,857 Public works: Engineering 55,137 15,181 8,193 62,125 Street improvements 24,153,438 1,106,953 92,271 25,168,120 Traffic signal 270,682 - - 270,682 Parks 5,729,121 211,855 98,458 5,842,518 Total public works 30,208,378 1,333,989 198,922 31,343,445 - Recreation/naturalist: Recreation 2,104,089 17,346 8,371 2,113,064 Naturalist 1,248,057 68,464 9,341 1,307,180 Total recreation/naturalist 3,352,146 85,810 17,712 3,420,244 Total general fixed assets $40,903,920 $2,052,938 $573,225 $42,383,633 - - 151 Exhibit 1-3 CITY OF FRIDLEY, MINNESOTA SCHEDULE OF GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY For year ended December 31, 2001 Improvements Machinery Other Than and - Function and Activity Total Land Buildings Buildings Equipment General government: - Cable TV $208,071 $ - $ - $ - $208,071 Accounting 19,717 - - - 19,717 Management information systems - - - - - Elections 63,064 - - - 63,064 -. City clerk/records 141,139 - - - 141,139 Planning 35,845 - - - 35,845 Municipal center 3,703,251 17,496 2,838,486 180,691 666,578 Total general government 4,171,087 17,496 2,838,486 180,691 1,134,414 Public safety: - Public protection 899,901 - - 154,365 745,536 Fire protection 2,448,319 58,656 644,674 193,723 1,551,266 Inspection services 7,164 - - - 7,164 Civil defense 93,473 - - 66,734 26,739 Total public safety 3,448,857 58,656 644,674 414,822 2,330,705 Public works: Engineering 62,125 - - - 62,125 Street improvements 25,168,120 454,180 374,017 22,916,468 1,423,455 Traffic signal 270,682 - - 270,682 - Parks 5,842,518 1,901,053 676,405 2,032,167 1,232,893 Total public works 31,343,445 2,355,233 1,050,422 25,219,317 2,718,473 Recreation/naturalist: Recreation 2,113,064 - 1,923,198 66,804 123,062 Naturalist 1,307,180 304,602 527,274 456,257 19,047 Total recreation/naturalist 3,420,244 304,602 2,450,472 523,061 142,109 Total fixed assets $42,383,633 $2,735,987 $6,984,054 $26,337,891 $6,325,701 - 152 GENERAL LONG-TERM DEBT ACCOUNT GROUP The General Long-Term Debt Account Group is set up to account for unmatured principal of bonds, warrants, notes, or other forms of long-term indebtedness that are secured by the full faith and credit of the City and is not deemed the primary obligation of any specific enterprise fund of the City. Exhibit J-1 CITY OF FRIDLEY, MINNESOTA — COMPARATIVE SCHEDULE OF GENERAL LONG TERM DEBT December 31,2001 and 2000 2001 2000 Amount Available And To Be Provided For The Payment of General Long-Term Debt Amount available in Debt Service Funds $9,595,015 $9,334,218 Amount to be provided by future taxes 3,754,985 5,120,782 Total available and to be provided $13,350,000 $14,455,000 General long-term debt payable: General obligation special assessment improvement bonds $615,000 $845,000 General obligation tax increment refunding bonds 12,735,000 13,610,000 — Total general long-term debt payable $13,350,000 $14,455,000 154 STATISTICAL SECTION 155 Table 1 CITY OF FRIDLEY, MINNESOTA GENERAL GOVERNMENT EXPENDITURES BY FUNCTION(1) LAST TEN FISCAL YEARS (UNAUDITED) Fiscal General Public Municipal Public Community Recreation/ Debt Year Government Safety Center Works Development Naturalist Service Total 1992 $2,857,536 $3,320,123 $172,664 $2,306,970 $378,690 $702,421 $1,884,325 $11,622,729 1993 2,612,941 3,413,297 169,493 2,376,990 407,470 720,759 2,207,891 11,908,841 1994 3,206,942 3,552,812 180,104 2,473,128 462,615 780,242 3,495,789 14,151,632 1995 3,954,875 3,821,230 195,949 2,375,472 530,230 850,329 5,636,711 17,364,796 1996 (2) 2,145,143 3,863,105 185,917 2,306,088 535,496 759,457 1,102,010 10,897,216 1997 2,488,576 4,109,283 214,490 2,625,869 572,817 813,356 10,635,507 21,459,898 1998 2,585,108 4,098,048 205,480 2,826,545 648,842 902,159 5,141,866 16,408,048 1999 2,585,352 4,243,682 235,308 2,879,627 721,120 996,584 1,029,680 12,691,353 2000 2,888,061 4,392,025 225,114 2,661,927 775,312 1,031,174 1,058,772 13,032,385 2001 3,004,385 4,467,947 241,662 2,863,228 708,749 1,106,058 1,844,640 14,236,669 (')Includes General,Special Revenue, Capital Projects, Debt Service and Expendable Trust Funds and excludes capital outlay. (2)Prior to 1996,the HRA was included as a blended component unit of the City. 157 Table 2 CITY OF FRIDLEY, MINNESOTA GENERAL REVENUES BY SOURCE(') LAST TEN FISCAL YEARS (UNAUDITED) General Property Taxes& Inter- Fiscal Special Licenses governmental Charges For Miscellaneous Year Assessments &Permits Revenue Services Revenue Total 1992 $7,336,538 $401,178 $4,538,566 $842,590 $3,027,293 $16,146,165 1993 7,521,395 410,135 4,417,835 928,736 3,619,903 16,898,004 — 1994 6,915,475 528,111 3,808,828 1,038,863 2,393,463 14,684,740 1995 6,966,331 554,182 4,003,592 1,015,048 2,547,453 15,086,606 1996 (2) 4,420,212 828,652 3,986,987 1,299,495 1,841,698 12,377,044 1997 4,312,005 792,622 5,410,058 1,313,705 2,176,543 14,004,933 1998 4,520,684 846,145 5,603,676 1,514,548 1,967,013 14,452,066 1999 4,475,051 937,084 5,417,384 1,291,819 1,437,381 13,558,719 2000 4,529,716 1,276,615 7,169,251 1,391,203 2,136,893 16,503,678 2001 4,579,022 776,892 4,032,903 1,471,113 1,545,770 12,405,700 (')Includes General, Special Revenue, Capital Projects, Debt Service and Expendable Trust Funds. . � (2)Prior to 1996, the HRA was included as a blended component unit of the City. 158 Table 3 CITY OF FRIDLEY, MINNESOTA CERTIFIED PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (UNAUDITED) Collection Ratio of Certified Current Percent of Prior Total Outstanding Fiscal Tax Tax of Levy Year's Total Collections to Delinquent Year Levy Collections(1)(2) Collected Taxes Collections Tax Levy Taxes 1992 $4,751,465 $4,575,242 96.29% $36,480 $4,611,722 0.9706 :1 $399,739 1993 4,626,465 4,563,742 98.64% 162,911 4,726,653 1.0217 :1 217,536 1994 3,678,665 3,578,604 97.28% 6,764 3,585,368 0.9746 :1 32,416 (3) 1995 3,667,686 3,606,902 98.34% 105,526 3,712,428 1.0122 :1 84,303 1996 3,897,629 3,849,004 98.75% 21,977 3,870,981 0.9932 :1 72,063 1997 3,891,612 3,809,416 97.89% 22,115 3,831,531 0.9846 :1 120,696 1998 4,010,570 3,935,004 98.12% 3,584 3,938,588 0.9821 :1 83,110 �- 1999 4,034,919 4,064,819 100.74% 36,168 4,100,987 1.0164 :1 36,583 2000 4,035,671 3,928,752 97.35% 44,565 3,973,317 0.9845 :1 118,399 2001 4,205,000 4,147,788 98.64% 8,623 4,156,411 0.9884 :1 132,403 - (')For years prior to 1994, the tax levy and collections include Homestead and Agricultural Aid Credit (HACA). Beginning in 1994, state law required the City to certify its tax levy after subtracting HACA. Total HACA received in 2000 and 2001 was$1,092,816 and $1,093,082, respectively. (2)Excludes collections from properties pledged to tax increment. - (3)Taxes were adjusted $105,234 by Anoka County due to abatements, court ordered settlements and corrections of prior errors by the County. 159 CITY OF FRIDLEY, MINNESOTA ., ESTIMATED MARKET VALUE AND TAXABLE VALUE OF ALL PROPERTY LAST TEN FISCAL YEARS (UNAUDITED) Fiscal year payable 1992 1993 1994 1995 Assessment year 1991(1) 1992(1) 1993(1) 1994(1) Population,fiscal year 28,369 28,287 28,104 28,204 Real property: Estimated market value $1,057,532,000 $1,064,099,200 $1,068,474,200 $1,090,023,902 Taxable value: Homestead $6,763,333 $6,980,161 $7,008,373 $7,374,709 Excess and nonhomestead 20,555,478 19,609,068 19,250,219 19,253,892 Less fiscal disparities contribution (4,684,322) (5,274,175) (5,000,902) (4,946,278) Less tax increment value (3,073,122) (2,536,327) (2,581,487) (2,642,692) — Taxable value $19,561,367 $18,778,727 $18,676,203 $19,039,631 Personal property: Estimated market value $22,917,200 $23,184,800 $23,308,700 $19,952,700 Taxable value $1,087,658 $1,088,969 $1,071,329 $916,940 Totals: Estimated market value $1,080,449,200 $1,087,284,000 $1,091,782,900 $1,109,976,602 Taxable value $20,649,025 $19,867,696 $19,747,532 $19,956,571 Per market value ratios: Taxable value .019:1 .018:1 .018:1 .018:1 Per capita valuations: ^ Estimated market value _ $38,086 $38,438 $38,848 $39,355 Taxable value $728 $702 $703 $708 — Real property: Taxable value ., Fiscal disparities distribution $3,753,494 $3,463,663 $3,349,769 $2,827,323 Notes: — (')The Minnesota Legislature enacted legislation which changed the method of computing property taxes in 1988, 1989, 1990 and 1993. Those changes have been reflected in the computation of the taxable value for taxes payable in 1989 through 2001. (2)The Anoka County Auditor's Office determines taxable values on January 2 of each year pursuant to State Statutes. The Total Taxable Value on January 2, 2000 upon which the 2001 levy was based was$21,808,988. 160 Table 4 — 1996 1997 1998 1999 2000 2001 1995(1) 1996(1) 1997(1) 1998(1) 1999(1) 2000(1) — 28,267 28,419 28,335 28,623 27,449 27,854 $1,120,412,065 $1,152,674,700 $1,209,684,500 $1,274,348,500 $1,316,382,300 $1,499,258,100 $7,784,740 $8,199,059 $8,307,553 $8,556,633 $9,152,661 $10,201,895 19,554,250 20,139,316 18,039,448 16,302,168 16,814,763 19,002,890 (4,974,987) (5,147,086) (4,685,134) (4,337,632) (4,312,759) (4,769,074) (2,692,879) (2,760,628) (2,638,263) (2,381,402) (2,475,455) (3,272,618) $19,671,124 $20,430,661 $19,023,604 $18,139,767 $19,179,210 $21,163,093 $19,576,200 $19,576,200 $19,164,700 $19,315,800 $19,160,600 $19,089,700 $916,940 $916,940 $766,322 $673,798 $668,384 $645,895 $1,139,988,265 $1,172,250,900 $1,228,849,200 $1,293,664,300 $1,335,542,900 $1,518,347,800 $20,588,064 $21,347,601 $19,789,926 $18,813,565 $19,847,594 $21,808,988 .018:1 .018:1 .015:1 .015:1 .015:1 .014:1 $40,329 $41,249 $43,369 $45,197 $48,655 $54,511 — $728 $751 $698 $657 $723 $783 $3,007,783 $3,222,432 $3,116,450 $2,941,279 $3,355,535 $3,677,471 161 Table 5 CITY OF FRIDLEY, MINNESOTA SIGNIFICANT MINNESOTA TAX POLICIES December 31,2001 GENERAL All non-exempt property in Minnesota is subject to taxation by local taxing districts. The tax levied on a property is determined by computing its tax capacity, which is the property's market value multiplied by the appropriate class rate. The taxes on a property are computed by multiplying the tax rate by the property's tax capacity. The tax rate is determined by the County Auditor, dividing each tax levy by the taxing jurisdiction's adjusted net tax capacity. Properties are physically reviewed by assessors at least once every four years. The assessors market value is multiplied by the appropriate class rates to arrive at the adjusted net tax capacity (taxable value). The class rates vary by class of property. Type of Property 2001 Class Rates Residential Homestead First$76,000 1.00% Over$76,000 1.65% Commercial/Industrial First$150,000 2.40% Over$150,000 3.40% Rentals Apartments: 4+ units 2.40% Less than 4 units 1.65% Title II, MFHA, Sect. 8 1.00% Property Tax Refund. Residential property tax credits are indexed by the percentage of net property tax to household income to the extent a homeowners property tax exceeds a percentage of household income. The percentage ranges from 1.0%for incomes below$1,189 up to 4%for incomes of$77,519. The maximum refund amount is$1,450. In 1989, the Minnesota Legislature also enacted a targeting property tax credit program. This program provides refunds to homestead property owners for part of their tax increase in excess of 12 percent, if the increase is at least $100. The refund is equal to 60 percent of the increase over 12 percent. The maximum refund is$1,000. Property Tax Deferred. In 1993, the Minnesota legislature enacted a law commonly known as "This Old House" which exempts from the property tax all or a portion of the value of improvements made to homes 35 years of age or older. Homestead property owners could exclude the property tax on those improvements for 10 years. At the end of 10 years, the value of the improvements is added to the market value of the home in equal installments every five years. There are limits to the dollar amount eligible for the tax exclusion: $25,000 on homes 45 to 69 years old; and $50,000 on homes 70 years or older. Only improvements adding $5,000 or more of market value are eligible. r 163 CITY OF FRIDLEY, MINNESOTA TAX CAPACITY RATES DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS ._ (UNAUDITED) School School School School Fiscal District District District District Year City No. 11 No. 13 No. 14 No. 16(1) 1992 15.474% 56.525% 61.847% 58.025% 49.798% 1993 15.390% 63.717% 68.142% 61.406% 58.922% 1994 16.005% 57.161% 69.161% 60.840% 53.355% 1995 16.098% 61.402% 77.730% 63.296% 58.566% 1996 16.565% 64.387% 60.182% 71.790% 67.583% 1997 15.242% 55.588% 84.748% 66.129% 61.268% 1998 17.119% 51.824% 68.491% 69.402% 58.662% 1999 18.326% 54.856% 68.837% 67.728% 61.111% 2000 17.070% 51.792% 66.685% 61.655% 51.440% 2001 16.350% 52.281% 47.452% 45.466% 39.458% 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. a 164 Table 6 - Total School School School School Special District District District District County Districts No. 11(2 4) No. 13(3) No. 14(3 4) No. 16(1,3) 32.990% 5.119% 109.711% 115.388% 111.566% 103.339% 32.779% 5.668% 116.910% 122.707% 115.221% 114.723% - 32.680% 5.452% 110.879% 123.277% 114.956% 108.899% 32.765% 6.022% 115.811% 132.593% 118.159% 113.801% 31.036% 6.122% 117.662% 113.880% 125.488% 121.656% 30.091% 6.044% 108.218% 137.656% 119.067% 114.551% .. 30.618% 6.603% 107.400% 124.314% 125.225% 114.679% 32.265% 6.603% 114.104% 128.158% 127.049% 120.765% 30.861% 8.224% 108.610% 123.385% 118.575% 108.621% 28.859% 8.218% 106.287% 101.819% 99.833% 94.139% 165 Table 7 CITY OF FRIDLEY, MINNESOTA - SPECIAL ASSESSMENT LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (UNAUDITED) - Total - Current Current Collections Delinquent Collections Outstanding Fiscal Assessments Assessments to Amount Assessments Total to Current Delinquent Year Due Collected Due Collected Collected Assessment Assessments a 1992 $636,842 $573,413 90.04% $68,982 $642,395 100.87% $126,221 1993 603,004 553,927 91.86% 68,367 622,294 103.20% 91,010 1994 581,591 536,450 92.24% 31,201 567,651 97.60% 118,994 1995 526,207 478,762 90.98% 8,123 486,885 92.53% 156,253 1996 483,347 461,929 95.57% 73,178 535,107 110.71% 104,909 - 1997 540,313 507,588 93.94% 47,068 554,656 102.65% 74,711 1998 524,560 483,721 92.21% 44,464 528,185 100.69% 70,596 1999 482,364 457,546 94.85% 36,695 494,241 102.46% 61,103 2000 489,933 473,705 96.69% 34,248 507,953 103.68% 33,050 2001 505,054 494,686 97.95% 2,522 497,208 98.45% 41,327 167 CITY OF FRIDLEY, MINNESOTA HISTORY OF CERTIFIED TAX LEVIES AND TAX RATES LAST TEN FISCAL YEARS (UNAUDITED) 1992 1993 1994(1) Certified tax levies: General Fund $4,660,276 $4,535,276 $3,603,266 Capital Improvement Fund 87,689 87,689 72,689 Subtotal 4,747,965 4,622,965 3,675,955 Enterprise Fund - - - -- Agency Fund - 3,500 3,500 2,710 Total $4,751,465 $4,626,465 $3,678,665 Tax Capacity Rate: General Fund 15.548% 15.153% 15.076% Capital Improvement Fund 0.284% 0.300% 0.314% Enterprise Fund 0.000% 0.000% 0.000% Subtotal 15.832% 15.453% 15.390% Agency Fund 0.022% 0.021% 0.022% — Total 15.854% 15.474% 15.412% Notes: ("Beginning in 1994, the State law required the City to certify its tax levy after subtracting Homestead and Agricultural Aid Credit(HACA). Total HACA for 2000 and 2001 was$1,092,816 and $1,093,082, respectively. p- 168 Table 8 1995(1) 1996(1) 1997(1) 1998(1) 1999(1) 2000(1) 2001(1) a $3,592,295 $3,821,853 $3,806,950 $3,921,159 $3,947,133 $3,947,882 $4,117,233 - 72,689 72,689 72,689 72,689 72,689 72,689 72,667 3,664,984 3,894,542 3,879,639 3,993,848 4,019,822 4,020,571 4,189,900 .... - - 8,900 8,900 8,900 8,900 8,900 2,702 3,087 3,073 7,822 6,197 6,200 6,200 $3,667,686 $3,897,629 $3,891,612 $4,010,570 $4,034,919 $4,035,671 $4,205,000 15.778% 16.258% 15.399% 16.807% 17.995% 16.761% 16.049% a 0.320% 0.307% 0.294% 0.312% 0.331% 0.309% 0.283% 0.000% 0.000% 0.625% 0.516% 0.687% 0.613% 0.534% 16.098% 16.565% 16.318% 17.635% 19.013% 17.683% 16.866% 0.022% 0.024% 0.023% 0.067% 0.049% 0.045% 0.043% 16.120% 16.589% 16.341% 17.702% 19.062% 17.728% 16.909% a 169 r Table 9 CITY OF FRIDLEY, MINNESOTA — RATIO OF NET GENERAL BONDED DEBT TO TAXABLE VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS — (UNAUDITED) Ratio of — Net General Net City Debt Bonded Debt General Total Gross Service Fund Special Net General to Total Bonded ... Fiscal Taxable Bonded Monies Assessment, Bonded Taxable Debt Year Population Value Debt Available and Revenue Debt Value Per Capita 1992 28,369 $20,649,025 $22,470,000 $ - $22,470,000 $ - $ - $ - "" 1993 28,287 19,867,696 21,500,000 - 21,500,000 - - - 1994 28,104 19,747,532 19,600,000 - 19,600,000 - - - 1995 28,204 19,956,571 19,075,000 - 19,075,000 - - - 1996 28,267 20,588,064 20,100,000 - 20,100,000 - - - 1997 28,419 21,347,601 19,880,000 - 19,880,000 - - - 1998 28,335 19,789,926 20,675,000 - 20,675,000 - - - 1999 28,623 18,813,565 20,080,000 - 20,080,000 - - - — 2000 27,449 19,847,594 18,335,000 - 18,335,000 - - - 2001 27,854 21,808,988 16,880,000 - 16,880,000 - - - ... a r 171 Table 10 Page 1 of 2 CITY OF FRIDLEY, MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN December 31, 2001 (UNAUDITED) Market Value $1,499,258,100 (A)Debt Limit 2% of Market Value $29,985,162 Amount of Debt Applicable to Debt Limit: Total Debt $16,880,000 (B)Deductions: Tax Increment Redevelopment Bonds $12,735,000 Special Assessment Bonds 615,000 Revenue Bonds 3,530,000 16,880,000 — Total Amount of Debt Applicable to Debt Limit - Legal Debt Margin $29,985,162 Notes: (A)M.S.A. Section 475.53 (see following page) ._ (B)M.S.A. Section 475.51 (see following page) 172 — Table 10 Page 2 of 2 CITY OF FRIDLEY MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN (CONTINUED) December 31, 2001 (UNAUDITED) Note(A): M.S.A. Section 475.53 et seq. Limit on Net Debt "Subdivision 1. Generally, except as otherwise provided in sections 475.51 to 475.75, no municipality, except a school district or a city of the first class, shall incur or be subject to a net debt in excess of two percent of the market value of taxable property in the municipality." Note(B): M.S.A. Section 475.51 Definitions "Subdivision 4. "Net Debt"means the amount remaining after deducting from its gross debt the amount of current revenues which are applicable within the current fiscal year to the payment of any debt, and the aggregate of the principal of the following: (1) Obligations issued for improvements which are payable wholly or partly from the proceeds of special assessments levied upon property specially benefited thereby, including those which are "" general obligations of the municipality issuing them, the municipality is entitled to reimbursement in whole or in part from the proceeds of the special assessments. (2) Warrants or orders having no definite or fixed maturity. (3) Obligations payable wholly from the income from revenue producing conveniences. (4) Obligations issued to create or maintain a permanent improvement revolving fund. (5) Obligations issued for the acquisition and betterment of public waterworks systems, public lighting, heating or power systems, and any combination thereof, or for any other public convenience from which a revenue is or may be derived. (6) Debt service loans and capital loans made to a school district under the provisions of sections 124.42 and 124.431. (7) Amount of all money and the face value of all securities held as a debt service fund for the extinguishment of obligations other than those deductible under this subdivision. (8) Obligations to repay loans made under section 216C.37. (9) Obligations to repay loans made from money received from litigation or settlement of alleged violations of federal petroleum pricing regulations. (10) All other obligations which under the provisions of law authorizing their issuance are not to be included in computing the net debt of the municipality. 173 Table 11 CITY OF FRIDLEY, MINNESOTA COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT AND COMPARATIVE DEBT RATIOS December 31, 2001 (UNAUDITED) Net Percent of Net General Debt Debt General Bonded Gross Service Net Applicable Bonded Debt Governmental Unit Debt Funds Debt to City Debt Per Capita Direct&overlapping debt: Direct debt: ^� City of Fridley $16,880,000 $9,526,057 $7,353,943 100.00% $7,353,943 $264 Overlapping debt: School Districts: No. 11 199,799,157 19,977,853 179,821,304 1.60% 2,877,141 103 No. 14 17,420,000 255,000 17,165,000 100.00% 17,165,000 616 No. 16 28,235,000 2,392,505 25,842,495 36.80% 9,510,038 341 Metro Council 742,353,915 48,804,000 693,549,915 1.19% 8,253,244 296 Anoka County 103,700,000 29,440,303 74,259,697 18.04% 13,396,449 481 Vocational/Technical "' District No. 916 17,955,000 1,129,253 16,825,747 2.21% 371,849 13 Overlapping debt 1,109,463,072 101,998,914 1,007,464,158 51,573,721 1,852 ►, Total direct and overlapping debt $1,126,343,072 $111,524,971 $1,014,818,101 $58,927,664 $2,116 174 Table 12 CITY OF FRIDLEY, MINNESOTA RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT TO TOTAL GENERAL GOVERNMENT EXPENDITURES LAST TEN FISCAL YEARS (UNAUDITED) Ratio to Total Total Debt Service Fiscal Debt General to General Year Principal Interest Service Expenditures(') Expenditure 1992 $715,000 $1,169,325 $1,884,325 $11,662,729 .1616:1 1993 925,000 1,270,590 2,195,590 11,908,841 .1844:1 1994 2,305,000 1,147,551 3,452,551 14,151,632 .2440:1 1995 4,530,000 1,079,838 5,609,838 17,364,796 .3231:1 1996 175,000 896,011 1,071,011 10,897,216 .0983:1 1997 9,675,000 897,930 10,572,930 21,459,898 .4927:1 1998 4,310,000 796,329 5,106,329 16,408,048 .3112:1 1999 295,000 729,889 1,024,889 12,691,353 .0808:1 2000 14,455,000 753,063 15,208,063 13,032,385 1.1669:1 2001 13,350,000 737,471 14,087,471 14,236,669 .9895:1 — Notes: (')Includes General, Special Revenue, Debt Service and Capital Projects and Expendable Trust Funds and excludes capital outlay. (2)Prior to 1996, the HRA was included as a blended component unit of the City. r 175 Table 13 CITY OF FRIDLEY, MINNESOTA .. REVENUE BOND COVERAGE LAST TEN FISCAL YEARS (UNAUDITED1 ,� Net Operating Revenue Direct Direct Available Fiscal Operating Operating For Debt Debt Service Requirements Year Revenue ) Expenses(2) Service Principal Interest Total Coverage 1992 $3,111,284 $3,764,686 ($653,402) $ - $131,761 $131,761 $ - 1993 3,557,088 4,360,448 (803,360) 45,000 129,944 174,944 - 1994 3,985,612 4,534,059 (548,447) 80,000 127,301 207,301 - --. 1995 4,476,900 5,283,552 (806,652) 85,000 142,943 227,943 - 1996 5,791,287 5,648,603 142,684 115,000 173,553 288,553 0.49 1997 6,660,575 5,339,754 1,320,821 120,000 256,459 376,459 3.51 ,,,, 1998 6,520,948 5,469,928 1,051,020 260,000 275,498 535,498 1.96 1999 5,389,003 5,242,663 146,340 5,325,000 281,975 5,606,975 0.03 2000 5,150,374 4,965,373 185,001 3,880,000 197,277 4,077,277 0.05 2001 4,994,669 5,148,461 (153,792) 3,530,000 175,115 3,705,115 (0.04) Notes: (1)Total operating revenue. (2)Total operating expenses including depreciation. 176 Table 14 CITY OF FRIDLEY, MINNESOTA — DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS (UNAUDITED) — Annual — Per Average Fiscal Capita Median School Unemployment Year Population') Income Age(4) Enrollment(3) Rate(5) 1992 28,369 $16,055 32.6 4,361 4.1% 1993 28,287 $15,261 30.3 4,200 4.4% 1994 28,104 $15,535 30.5 3,942 3.4% 1995 28,204 $17,642 31.2 3,960 3.2% 1996 28,267 $18,672 32.5 4,249 3.4% ""` 1997 28,419 $20,808 36.4 4,272 2.6% 1998 28,335 $22,405 36.3 3,524 2.1% 1999 28,623 $24,113 36.9 3,534 2.3% 2000 27,449 (2) $25,357 37.2 3,543 2.8% 2001 27,854 $25,995 36.2 3,888 3.6% Notes: (1)Estimated ' (2)2000 Population Report-Bureau of the Census (3)Estimated -excludes Grace Parochial High School as it is not supported by property tax dollars. (4)1991 - 1994 amounts for Anoka County. (5)Minnesota Department of Economic Security-Twin Cities Labor Market (6)Maxfield Research r 1 / / Table 15 CITY OF FRIDLEY, MINNESOTA CONSTRUCTION AND PROPERTY VALUE LAST TEN FISCAL YEARS (UNAUDITED) a Commercial Construction Residential Construction Number Number Estimated Market Value Fiscal of of Taxable Non- Year .� Units Value Units Value Property Taxable) Total 1992 73 $10,329,409 407 $2,873,240 $1,080,449,200 $173,900,300 $1,254,349,500 1993 69 6,778,632 474 3,536,547 1,087,284,000 177,929,400 1,265,213,400 1994 115 17,510,011 711 6,365,829 1,091,782,900 191,559,200 1,283,342,100 1995 116 18,280,651 608 7,618,320 1,109,976,602 185,043,100 1,295,019,702 1996 108 20,141,727 719 9,971,879 1,139,988,265 185,043,100 1,325,031,365 1997 101 16,046,463 737 8,894,213 1,208,684,500 191,559,200 1,400,243,700 1998 111 9,605,305 2,977 11,766,221 1,254,840,000 209,634,200 1,464,474,200 1999 90 27,149,247 1,632 15,487,489 1,293,664,300 208,033,400 1,501,697,700 2000 96 93,625,644 836 8,020,233 1,335,542,900 208,409,300 1,543,952,200 2001 70 11,362,547 667 10,445,492 1,470,697,000 205,912,700 1,676,609,700 Note: (1)Non-taxable property is reevaluated by the city assessors every six years a a a a 178 Table 16 CITY OF FRIDLEY, MINNESOTA PRINCIPAL TAXPAYERS December 31,2001 (UNAUDITED) Fiscal Year 2001 Percent 2000* of Total Taxable Taxable Rank Taxpayer Type of Business Valuation Valuation 1 Target Corporation Target discount store,warehouse and office $34,734,600 2.29% 2 Medtronic, Inc. Electro-medical devices 34,058,000 2.99% 3 Shamrock Investments Murphy Warehouses 27,058,000 2.37% 4 Springbrook Apartments Springbrook Apartments 18,405,000 1.61% 5 Cummins Power(Onan) Portable electric generators 14,264,100 1.25% 6 Burlington Northern Railroad Operating property 13,270,000 1.16% 7 Maurice Fillister(Georgetown) Georgetown apartments 12,342,000 1.08% 8 Retail Trust IV(Wal-Mart/Sam's) WaI-Mart/Sam's Club discount stores 11,239,600 0.99% 9 Northwest Racquet&Swim Club Health and Tennis Club 11,069,300 0.97% 10 Riverpointe Apartments Riverpointe Apartments 10,504,300 0.92% Total $186,944,900 15.64% 179 Table 17 CITY OF FRIDLEY, MINNESOTA INSURANCE COVERAGE December 31, 2001 (UNAUDITED) Municipal Property&Crime: Property $29,365,418 Mobile Property(also refered to as Inland Marine): Scheduled Over$25,000 1,493,107 Unsched $25,000&Less 508,004 Crime (inside/outside&forgery) 100,000 Bonds 350,000 Municipal Liability: Each occurance limit $1,000,000 Automobile Liability: Liability $1,000,000 Personal Injury Protection Mn Statutory Coverage Uninsured/Underinsured Motorist 1,000,000 Deductibles on the above insurance are as follows: Each Occurrence Deductible 50,000 General Annual Aggregate Deductible 100,000 .. If the General Annual Aggregate Deductible is exceeded then the following deductible applies 1,000 Liquor Liability: Each Occurrence Limit 1,000,000 General Aggregate Limit 2,000,000 Medical Payments Limit 10,000 "" Employee Dishonesty 25,000 Money&Securities Inside the Premises 10,000 Money& Securities Outside the Premises 5,000 -- Boiler& Machinery: Equipment Breakdown Limit 3,000,000 Accident Plan for Volunteers: Accidental Death/Permanent Impairment 100,000 Weekly Disability (max of 26 weeks) 400 Medical Benefit 1,000 Total Limit of Liability per Accident 500,000 a Worker's compensation: Bodily Injury-Each Occurrence 1,000,000 • 180 Table 18 Page 1 of 3 CITY OF FRIDLEY, MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION December 31, 2001 (UNAUDITED) Date of Incorporation (Village Fridley) July 1, 1949 Date of Adoption of City Charter September 10, 1957 effective September 25, 1957 Form of Government Council/Manager Fiscal year begins January 1 -- Area of City 11 square miles Bond rating (Moody's Investors Service, Incorporated) Aa-1 Elections: Last election -General Federal, State& Local November 4, 2000 Registered voters 18,686 Number of votes cast 13,873 Percent(%)of registered voters voting 74.0% Population: 1950- Federal Census 3,796 1960- Federal Census 15,182 1970-Federal Census 29,233 1980- Federal Census 30,228 1990- Federal Census 28,335 1994- Estimated 28,104 1995- Estimated 28,204 1996-Estimated 28,267 1997- Estimated 28,419 —i 1998- Estimated 28,335 1999- Estimated 28,623 2000- Federal Census 27,449 2001 - Estimated 27,854 Permanent Employees--As of December 31 1991 137 1992 137 1993 135 1994 140 1995 136 1996 136 1997 136 1998 140 1999 142 2000 138 2001 138 181 Table 18 Page 2 of 3 .. CITY OF FRIDLEY, MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION (CONTINUED) December 31, 2001 (UNAUDITED) Fire protection: Number of stations 3 Volunteer firefighters 25 Full-time firefighters 6 Fire rating Class 3 Police protection: Number of stations 1 �. Number of sworn officers 39 Number of street lights 1,054 —• Number of traffic signal installations 35 Number of other special signal installations 2 Number of civil defense warning sirens 8 Miles of streets and sidewalks(including State and County): City streets 127.20 Trunk highways 10.79 County roads 14.56 Sidewalks and bikeways 14.48 Miles of sewer: Storm 49.34 .. Sanitary 102.96 Miles of watermains 112.93 Municipal water system source City of Fridley Water Plant (13 wells) --capacity of 15 million gallons per day "" Number of water connections December 31, 2000 8,187 Daily average consumption (gallons) 5.2 million gallons -� Elevated stored capacity 3.5 million gallons Water storage reservoirs 3.0 million gallons Stand pipe 1.5 million gallons Number of fire hydrants 998 Municipal sewer system: Disposal --through Metropolitan Council Environmental Service Number of sewer connections December 31, 2000 8,226 Average daily flow(includes infiltration/inflow) 5.06 million gallons a 182 Table 18 Page 3 of 3 CITY OF FRIDLEY, MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION (CONTINUED) December 31, 2001 (UNAUDITED) Parks and recreation areas: — Developed 420 Acres Undeveloped 262 Acres — Total 682 Acres City and -- County Parks Schools Total Number of: — Hockey rinks 6 2 8 General skating rinks 10 3 13 Playgrounds 29 4 33 — Swimming beaches 1 0 1 Swimming pools 0 1 1 Picnic grounds 19 0 19 -- Day camp sites 1 0 1 Baseball diamonds 4 5 9 Softball diamonds 21 3 24 — Outdoor basketball courts 19 4 23 Tennis courts 22 19 41 Horseshoe courts 16 0 16 Archery ranges 1 0 1 Permanent playground buildings 3 0 3 Permanent picnic shelters 15 0 15 Soccer/football fields 8 3 11 — 183 Table 19 CITY OF FRIDLEY, MINNESOTA GENERAL INFORMATION December 31,2001 (UNAUDITED) • Location -Transportation The City of Fridley, with a total land area of eleven square miles and an estimated population of 27,854, is located at the northern boundaries of Minneapolis and Columbia Heights, about eight miles from the Minneapolis central business district. Freight service is provided in the area by local and interstate truck lines and Burlington Northern Railroad. -- Commuter transportation is available through Metropolitan Transit Commission facilities. Highways serving Fridley include Interstate #694 (beltline around the metropolitan area) and State Highways. An International Airport, located approximately twenty-five miles south of Fridley, and private business aviation facilities located at the Anoka County and Crystal Airports, provide air transportation and are operated by the Metropolitan Airport Commission. Medical Facilities Medical facilities in Fridley include Health One Unity Hospital, a 275-bed hospital with an adjacent clinic (Unity Professional Building), Fridley Plaza Clinic, Fridley Medical Center, and Lynwood Health Care Center. Education Fridley is served by four school districts, a major portion of the City is located within Fridley Independent School District No. 14. The Fridley School District operates two elementary schools, a junior high and senior high school, employing 161 certified personnel in the education of about 2,605 students. Grace Parochial High School has an enrollment of approximately 1,087. Portions of the Columbia Heights School District (13), the Spring Lake Park School District (16) and Anoka/Hennepin School District(11) also lie within the City of Fridley. Those districts have an estimated enrollment of 1,283 students living within the City of Fridley. Colleges and universities, vocational-technical and specialized training schools are located throughout the metropolitan area within easy commuting distances of Fridley. Larger Employers Larger employers in the City of Fridley include: Full-Time Employer Product or Service Employees Medtronic, Inc. Electro-medical devices and headquarters 2,600 Cummins (Onan) Portable generators, electronic equipment 1,615 United Defense Systems Pumps and naval ordinance 1,466 Minco Products Electronic devices 670 Burlington Northern Railroad Railroad company 650 Unity Hospital Medical services 466 Kurt Manufacturing Machine parts 450 Parsons Electric Electric contractor 400 Target Stores, Warehouse Discount department store 377 McGlynn's Bakery 280 184