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1998 CAFR ,,9-- --, COMPREHENSIVE ANNUAL FINANCIAL REPORT , ,,, ,„ .,;,...,,.,4,4,ra'IU'tX,V-4,1, -ilk, : ' . ` ,aa.I t f apa �i � tfsP 4 F 3 5, '� 'T� Y m''-�i�f"f'a�(F'Y o .:;,:;:':. a t � 1 xJ u s r. ::t. PIK•4=‘,4--;.'4 I $ ,a Ol ..x 4x4 I I 1 CITY OF FRIDLEY MINNESOTA 1 I I N FOR THE YEAR ENDED DECEMBER 31, 1998 I CITY OF FRIDLEY, MINNESOTA _ Comprehensive Annual Financial Report December 31, 1998 "' Prepared by: Finance Department Richard D. Pribyl Finance Director CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1998 TABLE OF CONTENTS EXHIBIT PAGE INTRODUCTORY SECTION Elected and Appointed Officials 3 City Administrative Organizational Structure 1998 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 Units A-1 31 Combined Statement of Revenues, Expenditures and Changes in Fund Balances-All Governmental Fund Types and Expendable Trust Funds and Discretely Presented Component Units A-2 36 "' Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual -General, Special Revenue and Budgeted Capital Project 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 Required Supplementary Information: Year 2000 Issue (Unaudited) 75 Financial Statements of Individual Funds: General Fund: Comparative Balance Sheet B-1 78 Statement of Revenues, Expenditures and Changes in Fund Balance - '— Budget and Actual B-2 79 Schedule of Revenues and Other Financing Sources - Budget and Actual B-3 80 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1998 TABLE OF CONTENTS EXHIBIT PAGE Schedule of Expenditures and Other Financing Uses - Budget and Actual B-4 83 Special Revenue Funds: Combining Balance Sheet C-1 88 Combining Statement of Revenues, Expenditures and Changes in Fund Balance C-2 90 Cable TV Fund: Comparative Balance Sheet C-3 92 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-4 93 • Grant Management Fund: Comparative Balance Sheet C-5 94 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-6 95 Solid Waste Abatement Fund: Comparative Balance Sheet C-7 96 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-8 97 ,_ HRA Reimbursement Fund: — Comparative Balance Sheet C-9 98 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-10 99 Drug and Gambling Forfeiture Fund: Comparative Balance Sheet C-11 100 Statement of Revenues, Expenditures and Changes in Fund Balance - "" Budget and Actual C-12 101 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1998 TABLE OF CONTENTS EXHIBIT PAGE Special Revenue Funds: (continued) Housing Revitalization Special Revenue Fund: Comparative Balance Sheet C-13 102 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-14 103 Chemical Assessment Team Fund: Comparative Balance Sheet C-15 104 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-16 105 F. C. C. Donations Fund: _ Comparative Balance Sheet C-17 106 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual C-18 107 Debt Service Funds: Combining Balance Sheet D-1 110 Combining Statement of Revenues, Expenditures and Changes in Fund Balance D-2 111 Capital Projects Funds: Combining Balance Sheet E-1 115 Combining Statement of Revenues, Expenditures and Changes in Fund Balance E-2 117 Capital Improvements Fund: Comparative Balance Sheet E-3 118 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual E-4 119 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1998 TABLE OF CONTENTS EXHIBIT PAGE Enterprise Funds: Combining Balance Sheet F-1 122 Combining Statement of Revenues, Expenses and Changes in Retained Earnings F-2 123 Combining Statement of Cash Flows F-3 124 Liquor Fund: Comparative Balance Sheet F-4 125 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings F-5 126 Comparative Statement of Cash Flows F-6 127 Public Utility Fund: — Comparative Balance Sheet F-7 128 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings F-8 130 Comparative Statement of Cash Flows F-9 131 Internal Service Funds: Combining Balance Sheet G-1 134 Combining Statement of Revenues, Expenses and Changes in Retained Earnings G-2 135 ., Combining Statement of Cash Flows G-3 136 Employee Benefits Fund: — Comparative Balance Sheet G-4 137 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-5 138 Comparative Statement of Cash Flows G-6 139 • CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1998 TABLE OF CONTENTS EXHIBIT PAGE Self Insurance Fund: Comparative Balance Sheet G-7 140 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-8 141 Comparative Statement of Cash Flows G-9 142 Information Systems Fund: Comparative Balance Sheet G-10 143 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-11 144 Comparative Statement of Cash Flows G-12 145 Trust and Agency Funds: Combining Balance Sheet H-1 148 Industrial Development Revenue Bond Trust Fund: Comparative Statement of Revenues, Expenditures and Changes in Fund Balance H-2 149 All Agency Funds: Combining Statement of Changes in Assets and Liabilities H-3 150 General Fixed Assets Account Group: Comparative Schedule of General Fixed Assets I-1 152 Schedule of Changes in General Fixed Assets- By Function and Activity 1-2 153 Schedule of General Fixed Assets- By Function and Activity 1-3 154 General Long-Term Debt Account Group: Comparative Schedule of General Long Term Debt J-1 156 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1998 TABLE OF CONTENTS EXHIBIT PAGE STATISTICAL SECTION: General Government Expenditures by Function - Last Ten Fiscal Years 1 159 — General Revenues by Source- Last Ten Fiscal Years 2 160 Certified Property Tax Levies and Collections - Last Ten Fiscal Years 3 161 Estimated Market Value and Taxable Value of All Taxable Property- Last Ten Fiscal Years 4 162 Significant Minnesota Tax Policies 165 Property Tax Rates- Direct and Overlapping Governments - Last Ten Fiscal Years 5 166 Special Assessment Levies and Collections - Last Ten Fiscal Years 6 169 History of Certified Tax Levies and Tax Rates - Last Ten Fiscal Years 7 170 Ratio of Net General Bonded Debt to Taxable Value and Net Bonded Debt Per Capita- Last Ten Fiscal Years 8 172 Computation of Legal Debt Margin 9 173 Computation of Direct and Overlapping Bonded Debt and Comparative — Debt Ratios 10 174 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Government Expenditures - Last Ten Fiscal Years 11 175 Revenue Bond Coverage- Last Ten Fiscal Years 12 176 — Demographic Statistics - Last Ten Fiscal Years 13 177 ., Construction and Property Value- Last Ten Fiscal Years 14 178 Principal Taxpayers 15 179 Insurance Coverage 16 180 Miscellaneous Statistical Information 17 181 General Information 18 184 a .. INTRODUCTORY SECTION 1 CITY OF FRIDLEY. MINNESOTA ELECTED AND APPOINTED OFFICIALS DECEMBER 31, 1998 ELECTED OFFICIALS Term of Office Expires December Effective January, 1998: Mayor Nancy J. Jorgenson 2000 Councilmember At Large Robert L. Barnette 2000 Councilmember, Ward I Steven E. Billings 1998 Councilmember, Ward II Dennis L. Schneider 1998 Councilmember, Ward Ill Ann R. Bolkcom 1998 Effective January, 1999: Mayor Nancy J. Jorgenson 2000 Councilmember At Large Robert L. Barnette 2000 Councilmember, Ward I Steven E. Billings 2002 Councilmember, Ward II Richard P. Wolfe 2002 Councilmember, Ward III 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: Director of Finance/Treasurer Richard D. Pribyl Director of Public Safety and Civil Defense David H. Sallman Fire Chief Charles J. McKusick Director of Public Works John G. Flora Director of Recreation and Natural Resource Jack G. Kirk Director of Community Development Barbara J. Dacy 3 CITY ADMINISTRATIVE ORGANIZATIONAL STRUCTURE 1998 Total Authorized Postions (138) CITY MANAGER (4) .-. City Manager Secretary to the City Manager Management Assistant Video Specialist FINANCE (21) POLICE (49) I HUMAN RESOURCES (2) I FIRE (7) Finance Director-Treasurer Public Safety Director- Human Resources Director Fire Chief Secretary Emergency Mgmt Director HR Assistant Secretary Staff Accountant Secretary Dep Fire Chief — Accountant (4) Firefighter OPERATIONS (28) ACCOUNTING (7) Deputy Public Safety Director Assistant Finance Director (4) Sergeant General Accountant (2) Corporal Accounting Specialist (21) Patrol Officer -- Utility Billing Clerk (3) Acctg-Data TECHNICAL SUPPORT (19) Processing Clerk Lieutenant Investigative Sergeant ASSESSING (2) (2) Investigators Assessor (2) Problem Response Team Appraiser School Resource Officer Projects Coordinator MIS (1) Crime Prevention Specialist MIS Coordinator Outreach Coordinator Office Supervisor CITY CLERK- RECORDS (2) (5) Police Technicians City Clerk (3 of the 5 are job shared) Receptionist- License Clerk CSO Coordinator Narcotics LIQUOR (5) Rental Housing NRO Liquor Operations Manager (2) Liquor Store Manager (1) Assistant Manager ^" (1) Liquor Store Clerk 4 CITY ADMINISTRATIVE ORGANIZATIONAL STRUCTURE 1998 (Continued) _ ( PUBLIC WORKS (38) I RECREATION & COMMUNITY NATURALIST (8) DEVELOPMENT (9) Director of Public Works Secretary Director of Recreation & Director of Community Open Analyst Natural Resources Development Recreation Office Coordinator Secretary ENGINEERING (4) Program Supervisor Assistant Public Works Director Program Specialist Engineering Tech Sr. Citizen Prog. Coord. BUILDING INSPECTION (2) Engineering Tech Inspector Chief Building Official GIS Technician NATURALIST (3) Secretary Natural Res. Coordinator PW MAINTENANCE (31) Interpretive Specialist PLANNING (5) Superintendant Secretary Planning Coordinator Secretary (3) Planning Assistant Lead Mechanic Secretary (2) Mechanic, Level B Street Supervisor (8) Public Services Workers Water Supervisor (5) Public Services Workers Sewer Supervisor (4) Public Services Workers Park Supervisor (5) Public Services Workers 5 CITY OF FRIDLEY FRIDLEY MUNICIPAL CENTER•6431 UNIVERSITY AVE. N.E. FRIDLEY, MN 55432•(612)571-3450• FAX(612)571-1287 June 22, 1999 The Honorable Mayor and Members of the City Council City of Fridley Council Members: In accordance with the Charter, we hereby transmit the Comprehensive Annual Financial Report of the City of Fridley for the year ending December 31, 1998. a 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 Division staff for the manner in which the accounts are kept and the Report presented. I would also like to express appreciation for the commendable administrative financial management of the several departments and divisions by the respective department and division heads as revealed by this Report. Very truly yours, William W. Burns City Manager 7 CITY OF FRIDLEY FRIDLEY MUNICIPAL CENTER•6431 UNIVERSITY AVE. N.E. FRIDLEY, MN 55432•(612)571-3450• FAX (612)571-I287 June 22, 1999 Dr. William W. Burns, City Manager Mayor Nancy Jorgenson and Council Members Fridley, Minnesota 55432 Dear Dr. Burns, Mayor Jorgenson and Council Members: The Comprehensive Annual Financial Report of the City of Fridley, Minnesota, for the fiscal year ending December 31, 1998, is submitted herewith: The organization, form, and contents of this report were prepared in accordance with the standards prescribed by the Government Finance Officers Association of the United States and Canada, the American Institute of Certified Public Accountants, the Governmental Accounting Standards Board, and — the Minnesota State Auditor's Office. The Government Finance Officers Association awards Certificates of Achievement for Excellence in Financial Reporting to those governments whose annual financial reports are judged to conform substantially with high standards of public financial reporting including generally accepted accounting principles promulgated by the Governmental Accounting Standards Board. The City of Fridley was awarded a Certificate of Achievement for Excellence in Financial Reporting for its annual financial report for the fiscal year 1997. It is our belief that the accompanying fiscal year 1998 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. 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 an older metropolitan community with an estimated 1998 population of 28,335. The City is located just north of downtown Minneapolis and covers 11 square miles of area. The City was incorporated July 1, 1949 and is currently committed to redevelopment. With the help of the Housing and Redevelopment Authority, the City has been successful in attracting new industries as well as completing redevelopment projects. LOCAL ECONOMY The Minneapolis-St. Paul area economy has continued to be relatively stable over the last several years. Unemployment for Anoka County has ranged around 3% for the last several years with very little change. Fridley is home to the largest amount of employees in Anoka County. Approximately 22,000 employees work in over 800 businesses across Fridley. Long term growth in Fridley's economy will result from redevelopment projects and new construction. The City has averaged $33 million in building permit valuation over the last three years. The future economy of Fridley will be further bolstered by the construction of Medtronic Inc.'s world headquarters. Beginning in 1999, Medtronic plans to build at least 1,000,000 square feet of corporate office space, research and associated facilities. The estimated market value of the project will be well over $100 million. About 3,000 new employees are anticipated to work out of the new campus. The existing Medtronic campus will become the company's Cardiac Division headquarters. It is extremely unusual for a community of Fridley's size to have two corporate campuses within its borders. MAJOR INITIATIVES •- During 1998, the City continued its focus on the quality of the housing stock within the City and enjoyed a great deal of success with the 5% home remodeling program. During the year, 61 loans were closed, totaling $803,800. In addition, 2 remodeling loans totaling $57,500 were provided to rental owners to improve apartment buildings. These programs help residents improve and maintain their properties. They also encourage residents to stay in Fridley by being able to improve their existing home instead of losing a resident to the outlying communities. ,. The Housing and Redevelopment Authority maintains a revolving loan fund for home remodeling loans. It is projected that the loan pool will "pay for itself" in fifteen years. The Housing and Redevelopment Authority has also sponsored four successful remodeling fairs and hired a part time "Remodeling Advisor" to assist homeowners with their remodeling ideas. In 1998, the Authority, with the help of the remodeling advisor, published a Remodeling Plan Book to encourage homeowners to remodel. 11 CITY OF FRIDLEY, MINNESOTA GENERAL INFORMATION (CONTINUED) An extensive amount of remodeling activity took place in Fridley in 1998, primarily as a result of a major storm. Over 2,800 permits were issued for new windows, roofs, or new siding. This is four times the typical number of permits. The valuation for residential permit activity was also the highest in 10 years, totaling $11.7 million. This means a significant part of the city's housing stock was dramatically improved. The redevelopment of the Southwest Quadrant, an area bounded by University Avenue and Mississippi Street, began in 1995 with the HRA acquiring four apartment buildings and a number of businesses. Rotund Homes was selected as the developer and has completed the construction of the 118 owner occupied units. Since the City's warehouse liquor store was one of the businesses required to relocate as the Southwest Quadrant project moved forward, the City continued to search for potential sites for a new liquor store while the relocated store maintained its presence in the Holly Shopping Center. In 1999, the City is expected to enter into a lease agreement with Lyndale Terminal Co. to lease 13,000 square feet adjacent to Cub Foods on 57th Avenue and 1-694. Commercial and industrial activity continued to flourish, although not as high as the two previous years. Bachman's Inc. opened a new 38,000 square foot facility in 1998. Spikers Grill and Beach Club also opened its door in 1998 featuring six indoor volleyball courts and a new restaurant. Walgreen's opened — a new 13,000 square foot facility at the northeast corner of University Avenue and Mississippi Street. Plunkett's Pest Control built a new 18,150 square foot industrial building on 52nd Way. Internally, the 1999 budget work sessions were relatively free from major budgetary issues. The gap between revenues and expenditures widened in the 1999 budget from the 1998 budget. Much of the discussion at the work sessions focused on the future of the City's recycling center. The budget sessions ended with no increase in property taxes and the planned use of $886,782 of reserves resulting in a balanced 1999 budget that Council adopted in December. PLANS FOR THE FUTURE The future of the City of Fridley, like all units of government is filled with change and restructuring. The federal deficit and shortfalls in state revenue have and will continue to have a trickle down effect to lower levels. Cities are faced with the problems of financing their own traditional levels of service while simultaneously coping with cuts in intergovernmental revenues and the implementation of both federal and state mandates. The City applauds the efforts of the Minnesota State Legislature in their attempt to curtail unfunded state mandates. The City will continue to investigate new funding and cost sharing alternatives as well as reviewing our operations in order to decrease the reliance on intergovernmental revenues. Implementation of an imaging system continued during 1998. This project will increase the availability of data and the efficiency in which City staff can access it and respond to resident's requests. The most significant project in the City's history was approved in early 1999. Medtronic, Inc. will build its world headquarters at the Fridley Executive Center site at the northwest corner of T.H. 65 and 1-694. First phase construction began in June 1999 on 460,000 square feet of development. Ultimately, the site may be developed up to 1.6 million square feet, and at minimum, 1 million square feet of corporate office space is planned. 12 CITY OF FRIDLEY, MINNESOTA GENERAL INFORMATION (CONTINUED) The first phase (estimated value at $46 million) will consist of five buildings. The centerpiece of the development will be the corporate headquarters office, which will be flanked by two additional buildings, the Research Center and the Education Center. The fourth building will be the headquarters for the Neurological Division of the company. Finally, the fifth building will house the support functions of the development including the employee cafeteria, resource center, auditorium and fitness center. Multi-level parking ramps are necessary to provide adequate parking for the campus. The ramps for the first phase will be six levels (two below grade) and will contain about 1,000 parking spaces. Medtronic anticipates that the project when fully developed will create 3,000 new jobs. Significant projects budgeted for 1999 in the five year capital improvement plan include: The purchasing of a new Class A Pumper Truck for the Fire Department; upgrading playground equipment by replacing the old equipment with new safer and accessible equipment; a major street reconstruction project in the Riverview Heights neighborhood; and the annual well, reservoir and pump house maintenance programs. FINANCIAL INFORMATION INTERNAL CONTROLS In developing and improving the City's accounting system, consideration is given to the adequacy of internal accounting controls. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and the evaluation of costs and benefits requires estimates and judgments by management. All internal control evaluations occur within the above framework. We believe that the City's internal accounting controls adequately safeguard assets and provide reasonable assurance of the proper recording of financial transactions. BUDGETARY CONTROLS A complete budgetary system of accounts is maintained for the General and Special Revenue Funds. Budgetary control is maintained in compliance with the City Charter Requirements. The Charter provides that it is the duty of the City Manager to strictly enforce the provisions of the budget. The management policy of the City is such that the existence of a particular item or appropriation in the approved budget does not mean that it will or must be automatically expended. It is the policy of the '- City to control budgets at the expenditure category level. Budget adjustments between City divisions 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. • 13 CITY OF FRIDLEY, MINNESOTA FINANCIAL INFORMATION (CONTINUED) CASH MANAGEMENT All temporary cash surpluses during the year are invested in various securities which State statutes permit. The City's policy is to invest all available monies at competitive interest rates in accordance with the City's over-all fiscal plan coordinated with operating needs and programs projected over the ensuing 12 month period. Investment yields on investments held during the year ranged from 4.2% to 6.9%. 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, 1998 the City of Fridley's debt service funds provided sufficient capital to cover the net general bonded debt. The City has numerous debt issues outstanding totaling $20,675,000. Of this outstanding debt, $1,290,000 represents special assessment debt with government commitment, $13,760,000 represents general obligation tax increment refunding bonds, $5,625,000 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. FISCAL DISPARITIES The commonly referred to "Fiscal Disparity Law" was adopted by the Legislature in 1971. The area of the fiscal disparity district encompasses all the properties located within the seven-county metropolitan area. The law provides that 40% of all new commercial/industrial property valuations or growth be placed in an area wide"pool,"and shared according to specific criteria. TAX INCREMENT DISTRICTS The City Council took action on May 7, 1979 to form the first of twelve tax increment districts. In 1985, the individual districts were combined into one redevelopment district to more easily manage the overall activities. All of the districts have been established in economically depressed areas within the City. With the successful relationship that the City and the Housing and Redevelopment Authority have developed, many benefits have been derived. 14 CITY OF FRIDLEY, MINNESOTA FINANCIAL INFORMATION (CONTINUED) GENERAL GOVERNMENT FUNCTIONS The following schedule presents a summary of the General, Special Revenue, Debt Service, Capital Projects and Expendable Trust Funds' revenues for the fiscal year ended December 31, 1998. The most significant changes in revenues from the prior year were increases in taxes, intergovernmental, and charges for services. Taxes increased by$242,757 mainly due to an increase in the levy. Intergovernmental revenue increased by $193,618 mainly due to an increase in Municipal State Aid for Street Projects. The charges for services increase shown was due primarily to antennae rental charges. .— Percent of Increase/ Revenues Amount Total (Decrease) .. Taxes and special assessments $4,520,684 31.28% $208,679 Licenses and permits 846,145 5.85% 53,523 Intergovernmental 5,603,676 38.78% 193,618 Charges for services 1,514,548 10.48% 200,843 Fines and forfeits 202,732 1.40% 16,101 Investment income 1,278,615 8.85% (169,751) Miscellaneous 485,666 3.36% (55,880) Total $14,452,066 100.00% $447,133 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, 1998. 15 CITY OF FRIDLEY, MINNESOTA FINANCIAL INFORMATION (CONTINUED) The most significant change in expenditures is in the public safety, community development and debt service categories. The increase in public works is due to an increase in street construction projects. The increase in community development is primarily due to the contracting of outside help to handle the increase in building inspections as a result of a spring hailstorm. The decrease in debt service is due to 1997 being unusually high due to the refunding of a bond issue. Percent of Increase/ Expenditures Amount Total (Decrease) Current: General government $2,585,108 13.05% $96,532 Public safety 4,098,048 20.68% (11,235) Civic center 205,480 1.04% (9,010) Public works 2,826,545 14.27% 200,676 Community development 648,842 3.27% 76,025 Recreation and naturalist 902,159 4.55% 88,803 Debt service 5,141,866 25.96% (5,493,641) Capital outlay 3,407,317 17.18% (116,895) Total $19,815,365 100.00% ($5,168,745) General Fund Balance The fund balance is used to provide working capital for the fund until tax settlements and state aids are received in July and December of each year, to provide funds for unknown events which could have an adverse effect on the fund, and to help finance future budgets. In 1990 the City Council adopted a formal policy designating portions of the general fund's fund balance for working capital, subsequent year's expenditures, contingencies and for replacement of fixed assets at the end of each fiscal year. I. ENTERPRISE OPERATIONS The Enterprise Funds account for the financing of services to the general public in which all or most of the costs involved are paid in the form of charges by the users of such services. In the City of Fridley, Enterprise Funds are used to account for the operation of the public utility system and two municipal liquor stores. Except for ownership, Enterprise Funds bear a close resemblance to privately owned -- utility or service enterprises. Liquor Fund .•. The Liquor Fund was established to account for the operation and financing of the City-owned municipal liquor stores. The City operates two liquor stores, one at 6289 Highway 65, and the other in the Holly Shopping Center. The City owns the store at the Highway 65 location and currently leases space for the — other store. In 1984, the City changed its sales philosophy to the wholesale approach so that we could remain competitive with the three neighboring communities that use wholesale pricing. Retained earnings of the Liquor Fund were $1,919,315 on December 31, 1998 as compared to $1,792,335 at the closing of the prior fiscal year. Income before operating transfers increased from $254,320 in 1997 to $266,980 in 1998. This increase is primarily due to an increase in sales from 1997 to 1998. 16 CITY OF FRIDLEY, MINNESOTA FINANCIAL INFORMATION (CONTINUED) Public Utility Fund This fund accounts for the operation and financing of the City-owned sewer and water systems. Included in the assets of the fund is a receivable from the Metropolitan Council Environmental Service Division of $25,915 representing the City's share of the equity in the Minneapolis Sewer System that was acquired by the Metropolitan Council in January 1, 1971. The assets for the Water and Sewer Distribution system, originally financed by special assessments, were transferred from General Fixed Assets to the Public Utility Fund in 1978. Additional Fixed Assets were transferred in 1979, 1984, 1989, 1990, 1991, 1992, 1993, 1994 and 1995. Those improvements to the utility system paid for or financed directly by the Public Utility Fund have always been carried in the Public Utility Fund and depreciated. Retained earnings on December 31, 1998 were $13,954,194 compared to$12,299,536 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 which allow us to directly benefit from our good experience rating. In the future an analysis will be made of the feasibility of self insuring all or a portion of other policies. In 1990, $1,000,000 was transferred from the General Fund to the Self Insurance Fund. OTHER INFORMATION PENSIONS City of Fridley employees are covered by one of five pension plans: 1) Fridley Fire Relief Association for Volunteer Firemen. 2) Public Employees Police and Fire Consolidation Plan for police officers hired prior to December 15, 1975. 3) Public Employees Retirement Police and Fire Plan, covering the City's full-time Firemen and Police Officers hired after December 15, 1975. 4) The basic Public Employees Retirement Plan, which covers certain other City civilian employees. 5) Coordinated Public Employees Retirement Plan, which covers certain other City civilian employees. The employees covered by the Coordinated P.E.R.A. Plan are also covered by Social Security. The City is currently making all pension contributions required by law. For additional background information on the pension plans covering City employees, see Notes to the Financial Statements. 17 CITY OF FRIDLEY,MINNESOTA OTHER INFORMATION (CONTINUED) CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Fridley, Minnesota, for its comprehensive annual financial report for the fiscal year ended December 31, 1997. The Certificate of Achievement is a prestigious national award that recognizes conformance with the highest standards for preparation of State and local government financial reports. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to the Certificate of Achievement Program requirements, and we are submitting it �. to GFOA to determine its eligibility for another certificate. 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, Julie Vogel, 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, P-4"4-11)' 011044 2,. D. Pribyl Alan D. Folie Finance Director Assistant Finance Director 18 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, 1997 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. ♦ a ANO NTIED STALES qy -yr d7.4 CANADA ° President ortr1nN ,.. Z SEAL ,st, mime Affr,�` �"„,„ Executive Director 19 FINANCIAL SECTION a 21 AUDITOR'S OPINION 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, 1998 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 generally accepted auditing standards 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, 1998, and the results of its operations and cash flows of its proprietary fund types for the year then ended in conformity with generally accepted accounting principles. As discussed in Note 22 to the general purpose financial statements, during 1998 the City of Fridley, Minnesota changed its method of accounting for investments to conform with Governmental Accounting Standards Board (GASB)No. 31,Accounting and Financial Reporting for Certain Investments and for External Investment Pools. The year 2000 supplementary information on pages 75 and 76 is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the information and do not express an opinion on it. In addition, we do not provide assurance that the City of Fridley, Minnesota is or IMO 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 MI International. A world-wide organization of accounting firms and business advisers. 23 will become year 2000 compliant, that the City of Fridley, Minnesota's year 2000 remediation efforts will be successful in whole or in part, or that parties with which the City of Fridley, Minnesota does business are or will become year 2000 compliant. In accordance with Government Auditing Standards, we have also issued a report dated June 11, 1999 on our consideration of the City of Fridley, Minnesota's internal control over financial reporting and on its compliance with certain provisions of laws, regulations, contracts and grants. 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, supporting schedules 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 financial statements of the City of Fridley, Minnesota. Such information, except for that portion marked "unaudited," on which we express no opinion, has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly stated in all material respects, in relation to the general purpose financial statements taken as a whole. June 11, 1999 #I67;44- ' HLB TAUTGES REDPATH, LTD. Certified Public Accountants 25 COMBINED FINANCIAL STATEMENTS The combined statements are intended to provide an overview and broad perspective of the City's financial position and operations.These statements present a summary set of information needed to control and analyze current operations to determine compliance with legal and budgetary limitations and to assist in financial planning.The following combined statements are presented: Combined Balance Sheet — All Fund Types and Account Groups and Discretely Presented Component Units Combined Statement of Revenues, Expenditures, and Changes in Fund Balances — All Governmental Fund Types and Expendable Trust Funds and Discretely Presented Component Units Combined Statement of Revenues, Expenditures, and Changes in Fund Balances- Budget and Actual — General, Special Revenue Fund and Budgeted Capital Project Types Combined Statement of Revenues, Expenses and Changes in Retained Earnings — All Proprietary Fund Types Combined Statement of Cash Flows—All Proprietary Fund Types Exhibit A-1 Page 1 of 4 CITY OF FRIDLEY, MINNESOTA COMBINED BALANCE SHEET-ALL FUND TYPES AND ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNITS December 31, 1998 Governmental Fund Types Special Debt Capital General Revenue Service Projects Assets — Cash and investments $7,279,914 $578,743 $8,288,693 $7,288,525 Receivables: Accounts 124,633 68,558 - 4,186 — Taxes 251,467 - - 4,601 Special assessments 4,332 - 1,342,304 69,962 Mortgage - - - - Interest 261,472 - - - Loan receivable 6,300 - - - Loan receivable from component unit - - 1,394,917 - _ Developer note 96,004 - - - Due from other funds 79,826 - - 1,078,758 Interfund loan receivable - - - - Due from component unit - 1,301 - - — Due from other governments 80,841 108,659 - 281,153 Inventories, at cost 46,802 - - - Prepaid items - - - - — Long term receivable - - - - Property and equipment (Net of depreciation) - - - - Amount available in debt service fund - - - - Amount to be provided for retirement of general long term debt - - - - Total assets $8,231,591 $757,261 $11,025,914 $8,727,185 _ See Accompanying Notes to Financial Statements 29 Fiduciary Proprietary Fund Types Fund Types Internal Trust and _ Enterprise Service Agency Assets Cash and investments $9,259,058 $3,824,797 $45,565 — Receivables: Accounts 1,773,027 - 3,021 Taxes 174 - 586 Special assessments 233,804 - - Mortgage - - - Interest 31,483 - - • Loan receivable - - - Loan receivable from component unit - - - Developer note - - - Due from other funds 1,326 - - Interfund loan receivable - - - Due from component unit - - - Due from other governments 228,814 - - Inventories, at cost 303,952 - - Prepaid items 250,492 - - Long term receivable 25,915 - - Property and equipment (Net of depreciation) 20,961,309 168,474 - Amount available in debt service fund - - - Amount to be provided for retirement of general long term debt - - - Total assets $33,069,354 $3,993,271 $49,172 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 1998 1997 HRA 1998 1997 $ - $ - $36,565,295 $33,635,817 $9,587,066 $46,152,361 $42,550,273 - - 1,973,425 1,862,715 - 1,973,425 1,905,342 - - 256,828 195,909 271,688 528,516 291,140 - - 1,650,402 1,731,890 - 1,650,402 1,731,890 - - - - 2,784,956 2,784,956 2,842,706 - - 292,955 360,832 56,616 349,571 401,394 - - 6,300 6,300 - 6,300 6,300 - - 1,394,917 1,465,834 - 1,394,917 1,465,834 _ 96,004 111,346 - 96,004 111,346 - - 1,159,910 694,992 3,379,881 4,539,791 694,992 - - - - 13,184,622 13,184,622 - - - 1,301 - - 1,301 - 699,467 352,278 - 699,467 352,278 - 350,754 304,320 - 350,754 304,320 - 250,492 276,806 - 250,492 276,806 - - - 25,915 618,562 - 25,915 618,562 36,950,041 - 58,079,824 55,624,486 - 58,079,824 55,624,486 - 9,681,268 9,681,268 9,521,076 460,000 10,141,268 10,460,851 - 5,368,732 5,368,732 5,653,924 - 5,368,732 5,594,149 $36,950,041 $15,050,000 $117,853,789 $112,417,087 $29,724,829 $147,578,618 $125,232,669 -- 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 UNITS December 31, 1998 Governmental Fund Types Special Debt Capital General Revenue Service Projects Liabilities,fund equity and other credits Liabilities Accounts payable $181,156 $86,509 $10,000 $12,726 Deposits payable 18,203 10,221 - - Contracts payable - - - 57,627 .. Interfund loan payable _ - - - Salaries payable 255,925 9,039 - - Compensated absences payable - - - - .. Deferred revenue 86,743 59,455 1,331,899 72,778 Due to other funds 1,136 79,896 - 1,078,759 Due to primary government - - - Due to other governments 5,597 55,495 2,747 718,213 Bonds payable _ - - - Loan payable to primary government - - - - Accrued interest payable - - - - Total liabilities 548,760 300,615 1,344,646 1,940,103 Fund equity and other credits Contributed capital - - - Investment in general fixed assets - - - - Retained earnings: Reserved - - - - Unreserved - - - - Fund balance: .. Reserved 169,421 - 2,163,366 1,208,913 Unreserved: Designated 7,223,686 500,285 - 7,012,837 .. Undesignated 289,724 (43,639) 7,517,902 (1,434,668) Total equity and other credits 7,682,831 456,646 9,681,268 6,787,082 Total liabilities, equity and other credits $8,231,591 $757,261 $11,025,914 $8,727,185 See Accompanying Notes to Financial Statements 33 Fiduciary Proprietary Fund Types Fund Types — Internal Trust and Enterprise Service Agency Liabilities,fund equity and other credits Liabilities Accounts payable $265,270 $19,763 $ - .. Deposits payable - - 5,591 Contracts payable - - - Interfund loan payable - - - ._ Salaries payable 28,499 62,959 - Compensated absences payable - 842,050 - Deferred revenue - - 369 Due to other funds 119 - - Due to primary government - - - Due to other governments 9,171 - 17,798 Bonds payable 5,602,919 - - — Loan payable to primary government - - - Other liabilities 122,162 - - Total liabilities 6,028,140 924,772 23,758 _, Fund equity and other credits Contributed capital 11,167,705 1,844,830 - Investment in general fixed assets - - - Retained earnings: Reserved 2,567,000 188,933 - Unreserved 13,306,509 1,034,736 - Fund balance: Reserved - - - Unreserved: Designated - - - Undesignated - - 25,414 Total equity and other credits 27,041,214 3,068,499 25,414 Total liabilities, equity and other credits $33,069,354 $3,993,271 $49,172 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 1998 1997 HRA 1998 1997 -- $ - $ - $575,424 $371,148 $38,185 $613,609 $383,515 - 34,015 34,589 26,750 60,765 59,589 - 57,627 81,294 - 57,627 81,294 - - - - - 13,184,622 13,184,622 - - - 356,422 359,680 6,980 363,402 364,850 - - 842,050 858,690 - 842,050 858,690 - - 1,551,244 1,855,478 66,877 1,618,121 1,895,643 - 1,159,910 694,992 3,379,881 4,539,791 694,992 - - - - 1,300 1,300 - - - 809,021 211,651 142,264 951,285 387,802 - 15,050,000 20,652,919 19,866,283 460,000 21,112,919 20,746,283 - - - - 1,394,917 1,394,917 1,465,834 - - 122,162 105,389 - 122,162 105,389 - 0 15,050,000 26,160,794 24,439,194 18,701,776 44,862,570 27,043,881 - 13,012,535 13,408,243 - 13,012,535 13,408,243 36,950,041 - 36,950,041 34,165,584 - 36,950,041 34,165,584 2,755,933 2,443,789 - 2,755,933 2,443,789 - 14,341,245 12,942,383 - 14,341,245 12,942,383 - - 3,541,700 3,085,466 - 3,541,700 6,966,947 - - 14,736,808 14,423,733 2,883,956 17,620,764 14,423,733 - - - 6,354,733 7,508,695 8,139,097 14,493,830 13,838,109 36,950,041 0 91,692,995 87,977,893 11,023,053 102,716,048 98,188,788 $36,950,041 $15,050,000 $117,853,789 $112,417,087 $29,724,829 $147,578,618 $125,232,669 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 UNITS Year Ended December 31, 1998 - Governmental Fund Types Special Debt Capital - General Revenue Service Projects Revenues: Taxes $4,007,547 $ - $ - $72,730 Special assessments 3,682 - 416,746 19,979 Licenses and permits 712,975 133,170 - - Intergovernmental revenue 3,409,671 492,849 - 1,701,156 Charges for services 1,209,668 304,880 - - Fines and forfeits 196,448 6,284 - - Investment income 376,741 17,731 496,813 385,564 Miscellaneous 207,529 153,309 72,417 52,411 Total revenues 10,124,261 1,108,223 985,976 2,231,840 Expenditures: Current: General government 1,710,258 874,858 - - Public safety 4,058,203 39,845 - - Municipal center 205,481 - - - Public works 2,224,219 - - 602,318 Community development 648,839 - - - Recreation and naturalist 897,288 4,873 - - ., Debt service - - 5,141,116 750 Capital outlay 315,601 164,390 - 2,927,326 Total expenditures 10,059,889 1,083,966 5,141,116 3,530,394 Excess (deficiency) of revenues over (under) expenditures 64,372 24,257 (4,155,140) (1,298,554) Other financing sources (uses): Bond proceeds - - 4,160,329 - Sale of fixed assets 34,912 4,000 - - Operating transfers in 372,902 251,500 - 1,394,127 Operating transfers out - - (482,902) (1,394,127) Operating transfers from component unit - - 722,860 - Operating transfers to component unit - - (84,955) - - Operating transfers from primary government - - - - Operating transfers to primary government - - - - Total other financing sources (uses) 407,814 255,500 4,315,332 0 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 472,186 279,757 160,192 (1,298,554) Fund balance-January 1 7,210,645 176,889 9,521,076 8,085,636 - Fund balance - December 31 $7,682,831 $456,646 $9,681,268 $6,787,082 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 1998 1997 HRA 1998 1997 .• $ - $4,080,277 $3,837,520 $3,008,462 $7,088,739 - $7,135,484 - 440,407 474,485 - 440,407'%A 474,485 - 846,145 792,622 - 846,145- 792,622 _ - 5,603,676 5,410,058 - 5,603,676'i-(''' 5,410,058 - 1,514,548 1,313,705 - 1,514,548 : ' ' 1,313,705 - 202,732 186,631 - 202,732 186,631 1,766 1,278,615 1,448,366 568,973 1,847,588 )r 2,062,840 - - 485,666 541,546 284,857 770,523 627,972 1,766 14,452,066 14,004,933 3,862,292 18,314,358 18,003,797 2,585,116 2,488,576 831,880 3,416,996 3,788,138 4,098,048 4,109,283 - 4,098,048 4,109,283 - 205,481 214,490 - 205,481 214,490 - 2,826,537 2,625,869 - 2,826,537 2,625,869 - 648,839 572,817 - 648,839 572,817 - - 902,161 813,356 - 902,161 813,356 - 5,141,866 10,635,507 480,585 5,622,451 11,153,725 - 3,407,317 3,524,212 1,099,764 4,507,081 3,666,583 0 19,815,365 24,984,110 2,412,229 22,227,594 26,944,261 1,766 (5,363,299) (10,979,177) 1,450,063 (3,913,236) (8,940,464) 4,160,329 ��� 9,490,146 - 4,160,329 9,490,146 - 38,912 1,^, 18,830 - 38,912 18,830 - - c--1---s. 2,018,529 2,658,042 21,857,167 01-'r 23,875,696 4- 8,955,566 - (1,877,029) (2,508,597) (21,857,167)0-t o (23,734,196) (8,806,121) - O* FK co.'r w-:-t 722,860 854,559 - 722,860 T 854,559 - (84,955) (95,244) - (84 955) (95,244) - - - 84,955 4,955 95,244 - - - (722,860) 722,860 (854,559) 0 4,978,646 10,417,736 (637,905) 4,340,741 9,658,421 - 1,766 (384,653) (561,441) 812,158 427,505 717,957 • 23,648 25,017,894 25,579,335 10,210,895 35,228,789 34,510,832 $25,414 $24,633,241 $25,017,894 $11,023,053 $35,656,294 $35,228,789 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, 1998 - General Special Revenue Funds Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) Revenues: Taxes $3,889,419 $4,007,547 $118,128 $ - $ - $ - Special assessments 928 3,682 2,754 - - - Licenses and permits 616,727 712,975 96,248 113,000 133,170 20,170 Intergovernmental revenue 3,330,974 3,409,671 78,697 487,488 492,849 5,361 Charges for services 1,140,618 1,209,668 69,050 321,454 304,880 (16,574) Fines and forfeits 181,083 196,448 15,365 6,284 6,284 - Investment income 362,120 376,741 14,621 16,833 17,731 898 Miscellaneous 162,833 207,529 44,696 70,544 153,309 82,765 Total revenues 9,684,702 10,124,261 439,559 1,015,603 1,108,223 92,620 Expenditures: Current: General government 1,812,822 1,710,258 102,564 893,319 874,858 18,461 Public safety 4,111,879 4,058,203 53,676 39,845 39,845 - Municipal center 205,481 205,481 - - - - Public works 2,311,111 2,224,219 86,892 - - - Community development 662,996 648,839 14,157 - - - ^" Recreation and naturalist 925,064 897,288 27,776 4,873 4,873 - Capital outlay 328,480 315,601 12,879 177,319 164,390 12,929 Total expenditures 10,357,833 10,059,889 297,944 1,115,356 1,083,966 31,390 - Excess (deficiency) of revenues over (under) expenditures (673,131) 64,372 737,503 (99,753) 24,257 124,010 Other financing sources (uses): Sale of fixed assets 24,037 34,912 10,875 - 4,000 4,000 Operating transfers in 372,902 372,902 - 250,000 251,500 1,500 Operating transfers out - - - - - - Total other financing sources (uses) 396,939 407,814 10,875 250,000 255,500 5,500 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses ($276,192) 472,186 $748,378 $150,247 279,757 $129,510 Fund balance-January 1 7,210,645 176,889 Fund balance- December 31 $7,682,831 $456,646 See Accompanying Notes to Financial Statements 38 Exhibit A-3 .. Totals Budgeted Capital Projects Funds (Memorandum Only) Variance Variance Favorable Favorable 1997 Budget Actual (Unfavorable) Budget Actual (Unfavorable) Actual $70,550 $72,730 $2,180 $3,959,969 $4,080,277 $120,308 $3,837,520 2,189 2,189 928 5,871 4,943 12,426 - - - 729,727 846,145 116,418 792,622 1,656,678 1,685,763 29,085 5,475,140 5,588,283 113,143 4,649,547 - - - 1,462,072 1,514,548 52,476 1,313,705 - - - 187,367 202,732 15,365 186,631 353,150 378,115 24,965 732,103 772,587 40,484 808,251 10,000 21,673 11,673 243,377 382,511 139,134 513,569 2,090,378 2,160,470 70,092 12,790,683 13,392,954 602,271 12,114,271 - - - - 2,706,141 2,585,116 121,025 2,488,576 - - - 4,151,724 4,098,048 53,676 4,109,283 - - - 205,481 205,481 - 214,490 231,974 41,166 190,808 2,543,085 2,265,385 277,700 2,337,681 - - - 662,996 648,839 14,157 572,817 - - - 929,937 902,161 27,776 813,356 1,239,678 847,913 391,765 1,745,477 1,327,904 417,573 2,602,290 --- 1,471,652 889,079 582,573 12,944,841 12,032,934 911,907 13,138,493 618,726 1,271,391 652,665 (154,158) 1,360,020 1,514,178 (1,024,222) - - - 24,037 38,912 14,875 18,830 - - 622,902 624,402 1,500 1,777,709 - (1,394,127) (1,394,127) - (1,394,127) (1,394,127) - (806,812) (1,394,127) (1,394,127) 0 (747,188) (730,813) 16,375 989,727 ($775,401) (122,736) $652,665 ($901,346) 629,207 $1,530,553 (34,495) 8,344,486 15,732,020 15,766,515 $8,221,750 $16,361,227 $15,732,020 - 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, 1998 Proprietary Fund Types Totals Internal (Memorandum Only) Sales and cost of sales: Enterprise Service 1998 1997 Sales $3,219,049 $ - $3,219,049 $3,079,567 , Cost of sales 2,555,072 - 2,555,072 2,440,954 Gross profit 663,977 0 663,977 638,613 Operating revenues: Water sales and sewer rents 6,512 -_ 163 � - 6,512,163 6,648,102 Other t,o,D�_�C,- 8,785) - 8,785 12,473 Charges for services - 98,697 98,697 155,579 -, Total operating revenues 6,520,948 98,697 6,619,645 6,816,154 1 Operating expenses: Personal services 1,254,417 11,556 1,265,973 1,257,822 Supplies and other charges 3,813,725 295,934 4,109,659 3,823,754 Depreciation ( 882,009 ) 96,931 978,940 988,325 Total operating expenses 5,950,151 404,421 6,354,572 6,069,901 Operating income (loss) 1,234,774 (305,724) 929,050 1,384,866 Nonoperating revenues (expenses): Intergovernmental revenue 124,441 - 124,441 - Investment income 431,542 209,303 640,845 479,032 Debt service (306,481) - (306,481) (256,460) Special assessments 68,943 - 68,943 76,274 Other - - - 156 Total nonoperating revenues (expenses) 318,445 209,303 527,748 299,002 Income (loss) before operating transfers 1,553,219 (96,421) 1,456,798 1,683,868 Operating transfers: •, Operating transfer in - - - 923 Operating transfer out (141,500) - (141,500) (150,367) Total operating transfers (141,500) 0 (141,500) (149,444) - Net income (loss) 1,411,719 (96,421) 1,315,298 1,534,424 Credit arising from transfer of depreciation on contributed capital 369,919 25,789 395,708 403,693 " Retained earnings -January 1 14,091,871 1,294,301 15,386,172 13,448,055 Retained earnings- December 31 $15,873,509 $1,223,669 $17,097,178 $15,386,172 -, See Accompanying Notes to Financial Statements 40 Exhibit A-5 _ CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES Year Ended December 31, 1998 - Proprietary Fund Types Totals Internal (Memorandum Only) Enterprise Service 1998 1997 - Cash flows from operating activities: Operating income (loss) $1,234,774 ($305,724) $929,050 $1,384,866 Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation (882,009. 96,931 978,940 988,325 Loss on sale of fixed assets 184,733 72,072 256,805 - Discount amortization - - - 694 Change in assets and liabilities: Decrease (increase) in receivables 82,002 - 82,002 (539,257) Decrease (increase) in due from other funds 3 - 3 (1,329) Decrease (increase) in due from other governments 25,608 - 25,608 (4,967) Decrease (increase) in inventories (33,854) - (33,854) (16,163) Decrease (increase) in prepaid items 26,314 - 26,314 2,395 - Increase (decrease) in payables (83,5.67) (9,131) (92,698) (474,692) Intergovernmental revenue _124,441 ,> - 124,441 - Other nonoperating income 156 Net cash flows from operating activities 2,442,463 (145,852) 2,296,611 1,340,028 Cash flows from noncapital financing activities: Operating transfers in '/ - - - 923 Operating transfers out (141,500) - (141,500) (150,367) - Net cash flows from noncapital financing activities (141,500) 0 (141,500) (149,444) Cash flows from capital and related financing activities: - Acquisition and construction of fixed assets (871,696) (34,929) (906,625) (1,428,848) Proceeds from sale of revenue bonds 1,171,191 - 1,171,191 - Prinicipal paid on revenue bonds (260,000) - (260,000) (120,000) Interest and paying agent fees on revenue bonds (306,481) - (306,481) (256,460) Special assessment collections 68,943 - 68,943 76,274 Net cash flows from capital and related financing activities (198,043) (34,929) (232,972) (1,729,034) Cash flows from investing activities: Investment income 431,542 209,303 640,845 479,032 Net cash flows from investing activities 431,542 209,303 640,845 479,032 Net increase (decrease) in cash and cash equivalents 2,534,462 28,522 2,562,984 (59,418) Cash and cash equivalents -January 1 6,724,596 3,796,275 10,520,871 10,580,289 Cash and cash equivalents - December 31 $9,259,058 $3,824,797 $13,083,855 $10,520,871 See Accompanying Notes to Financial Statements 41 NOTES TO FINANCIAL STATEMENTS • CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 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. The following governmental entities are not included in these financial statements since they do not meet the criteria contained in Statement 14: Independent School District #11/Independent School District #13/Independent School District#14/Independent School District#16 - These four school districts either reside wholly within the City of Fridley or overlap within the City boundaries. According to Minnesota State Statutes, Minnesota school districts are totally independent of all other governing jurisdictions. The City has no authority to appoint board members and has no fiscal responsibility. School districts are able to levy taxes and issue debt in their own name. Fridley Volunteer Firefighters Relief Association - This association is organized as a nonprofit organization by its members to provide pension and other benefits to such members in accordance with Minnesota Statutes. The board of directors is elected by the membership of the Association. All funding is conducted in accordance with Minnesota Statutes, whereby state aids flow to the association, tax levies are determined by the association and is only reviewed by the City. The association pays benefits directly to its members. The association may certify tax levies to the County directly if the City does not carry out this function. Because the association is able to fund its program independently of the City, it is excluded from these financial statements. (See Note 9 for disclosures relating to the pension plan operated by this organization.) ^ 43 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 B. Fund Accounting The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures, or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the financial statements in this report, into seven generic fund types and three broad categories as follows: GOVERNMENTAL FUNDS Governmental funds include the general fund, special revenue funds, debt service funds and capital projects funds. The governmental fund measurement focus is based upon the determination of financial position and changes in financial position (sources, uses and balances of financial resources rather than upon net income determination). These funds are maintained on the modified accrual basis of accounting (explained further under Significant Accounting Policies). General Fund - The General Fund is the primary operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of certain specific revenue sources that are restricted to expenditures for specified purposes. Debt Service Funds - Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest, and related costs. Capital Projects Funds - Capital Projects Funds are used for the acquisition or construction of major capital facilities other than those financed by proprietary funds. PROPRIETARY FUNDS Proprietary funds include enterprise funds and internal service funds. The proprietary fund measurement focus is based upon the determination of net income, financial position and changes in financial position. The generally accepted accounting principles here are those applicable to similar businesses in the private sector and thus these funds are maintained on the accrual basis of accounting. "^ Enterprise Funds - Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises - where the intent is that the costs ^ (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through use charges. Internal Service Funds - Internal Service Funds are used to account for the financing of goods or services provided by one department to other departments of the City on a cost- reimbursement basis. 44 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1998 FIDUCIARY FUNDS Fiduciary funds include expendable trust and agency funds. The measurement focus of the expendable trust funds is the same as governmental funds and is, therefore, maintained on the modified accrual basis of accounting. Trust Fund -The Trust Fund is used to account for assets held by the City in a trustee capacity for individuals, private organizations, other governments, and/or all other funds. The City's Trust Fund is classified as an Expendable Trust Fund and is accounted for in essentially the same manner as governmental funds. Agency Funds - Agency Funds are clearing type funds for the collection of taxes or deposits held in trust, on behalf of individuals, private organizations and other governments. The funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operation. C. Measurement Focus The accounting and reporting treatment applied to a fund is determined by its measurement focus. All governmental funds and expendable trust funds are accounted for on a spending or "current financial resources" measurement focus. This means that only current assets and current liabilities are generally included on the balance sheets. (Their reported fund balance is considered a measure of "available spendable resources.") Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of"available spendable resources"during a period. ■• Fixed assets used in governmental fund type operations (general fixed assets) are recorded at historical costs and accounted for in the General Fixed Assets Account Group. Public domain ("infrastructure") general fixed assets consisting of roads, bridges, curbs and gutters, are capitalized along with other general fixed assets. No depreciation has been provided on general "' fixed assets. Long-term liabilities expected to be financed from governmental funds are accounted for in the General Long-Term Debt Account Group, not in the governmental funds. These two account groups are not "funds." They are concerned only with the measurement of financial position. They are not involved with measurement of results of operations. Noncurrent portions of long-term receivables due to governmental funds are reported on their balance sheets, in spite of their measurement focus. However, special reporting treatments are used to indicate in all governmental funds that they should not be considered "available spendable resources," since they do not represent net current assets. Recognition of revenues in these funds represented by noncurrent receivables is deferred until they become current receivables. Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. They are instead reported as liabilities in the General Long- Term Debt Account Group. awe 45 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 Proprietary funds are accounted for on a cost of services or "capital maintenance" measurement focus. This means that all assets, including fixed assets, and all liabilities, including long-term liabilities, associated with their activity are included on their balance sheets. Their reported fund equity is segregated into contributed capital and retained earnings components. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net total assets. D. Basis of Accounting Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. Governmental Funds and Expendable Trust Funds are accounted for using the modified accrual —. basis of accounting. Their revenues are recognized when they become susceptible to accrual, i.e., both measurable and available. Substantially all revenues are accrued. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred, except for principal and interest on general long-term debt which is recognized when due. Agency Fund assets and liabilities are accounted for on the modified accrual basis of accounting. Proprietary funds are accounted for using the accrual basis of accounting. Revenues are recognized when they are earned, and expenses are recognized when they are incurred. The City has implemented Statement No. 20 of the Governmental Accounting Standards Board (GASB), Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting. This statement provides guidance on business- type accounting and financial reporting for proprietary activities. Proprietary activities should apply all applicable GASB pronouncements as well as the following pronouncements issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB ^ pronouncements: Statements of Interpretations of the Financial Accounting Standards Board (FASB), Accounting Principles Board 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, 1998 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. a 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 Funds. Formal budgeting integration is employed as a management control device during the year for each of these funds. Formal budgetary integration is not employed for Debt Service Funds because effective budgetary control is achieved through the bond indenture provisions. Budgetary control for other Capital Projects Funds is accomplished through the use of project controls. (See Note 16 for further information on budgeted and unbudgeted capital projects funds.) 8. Budgets for the General, Special Revenue and Capital Improvement Capital Projects Funds are adopted on a basis consistent with generally accepted accounting principles. 9. As required by the City Charter, budgetary control is maintained within department at the level of three major categories of expenditures: salaries and wages; ordinary expenses; and capital outlay. This is the level of control at which expenditures may not legally exceed appropriations. 10. The General Fund budget includes prior year encumbrances which were reappropriated to the current year. Expenditures for the items encumbered are included in the current year's expenditures. 47 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 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. With exception of the Deferred Compensation Agency Fund which states investments in a deferred compensation plan at market, all investments are stated at cost which approximates market. Investments with original maturities of three months or less are classified as cash equivalents. The City provides temporary advances to funds that have insufficient cash balances by means of an advance from the internal service and enterprise funds. This is classified as an interfund payable in the fund receiving the advance and as an offsetting interfund receivable in the internal service and enterprise funds. In accordance with authorized investment laws, the City invests in various mortgage-backed securities, such as collateralized mortgage obligations. These securities are reported at cost in the balance sheet. They are reported in aggregate as U.S. Government Agencies in the disclosure of custodial credit risk. (See Note 2 on Investments). 2) Receivables Property Taxes The property tax levy was set by the City Council in November and was certified to the County for collection the following year. In Minnesota, counties act as collection agents for all property taxes. The County spreads the levies over all taxable property in the City. Such taxes become receivables of the City as of January 1. Property taxes are payable in equal installments by property owners to the County as follows: - Personal property- February 28 and June 30 Real property- May 15 and October 15 The County remits the collections to the City and other taxing districts four times a year, in January, April, July and December. During 1998 taxes were adjusted downward$78,310 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, 1998 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 Oft 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, 1998 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 All liabilities for compensated absences, both current and long-term, for annual leave, severance and separation pay are accounted for in the Employee Benefit Fund, an internal service fund. Each year compensated absence expenditures and expenses are recorded in the governmental and proprietary funds respectively, equivalent to the full amount accrued by fund employees during the year. These charges are offset by a corresponding transfer of assets from the home department funds to the Employee Benefit Fund to fund the liability. This liability represents the maximum possible dilution of Employee Benefit Fund assets by retirements or extended leaves by employees. The personnel ordinance limits the annual accumulation of benefits that can be accumulated from year to year. 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 ,1 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, 1998 Intergovernmental Revenues - Intergovernmental revenues in the form of state aids are recorded as revenue when allocations are made by statutory formula. Other intergovernmental revenues received as reimbursements for specific purposes or projects are recognized based upon the expenditures incurred. Intergovernmental revenues received through abatements or shares are recorded in the year determined to be measurable and available. 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 generally accepted accounting principles. Interfund eliminations have not been made in the aggregation of this data. Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires management to make estimates that affect amounts reported in the financial statements during the reporting period. Actual results could differ from such estimates. 51 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 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, 1998 are as follows: Bank Carrying —. Balances Amount City $532,811 $594,454 HRA 152,893 140,177 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, 1998 (f) Repurchase or reserve repurchase agreements with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a primary reporting — dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker dealers. (g) Future contracts sold under authority of Minnesota Statutes 471.56, subd. 5. The City 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 carrying value, market value and credit risk of the investments held by the City at year end are as follows: Carrying/ Credit Risk Category Fair Value Securities Type 1 2 3 Amount U.S. government agencies or instrumentalities $28,399,852 $ - $ - $28,399,852 Commercial paper 3,908,218 - - 3,908,218 $32,308,070 $0 $0 32,308,070 Investment in money market and mutual funds 3,662,771 Total investments $35,970,841 aMa 53 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 The carrying value, market value and credit risk of the investments held by the HRA at year end are as follows: Credit Risk Category Carrying Securities Type 1 2 3 Amount U.S. government securities $1,810,430 $ - $ - $1,810,430 U.S. government agencies or instrumentalities 3,969,000 - - 3,969,000 Commercial paper 1,974,594 - - 1,974,594 — $7,754,024 $0 $0 7,754,024 Investment in money market and mutual funds 1,692,865 Total investments $9,446,889 3. Special Assessments Receivable "' Special assessments receivable at December 31, 1998 are as follows: Capital Special Special Improvements Assessment Public Assessment Capital Capital Utilities — General Debt Service Projects Projects Enterprise Total Un rem itted $592 $10,406 $ - $ - $14,653 $25,651 Delinquent - 24,147 101 1,200 824 26,272 Deferred 3,740 1,307,751 7,448 61,213 218,327 1,598,479 Total $4,332 $1,342,304 $7,549 $62,413 $233,804 $1,650,402 54 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 4. Due From Other Governments Amounts due from other governments at December 31, 1998 are as follows: General Fund: State of Minnesota: a) State Aid Maintenance $18,658 b) FEMA 23,003 c) Department of Revenue 4,053 Anoka County: a) Fines and Forfeits 15,548 School District#16 6,715 Other 12,864 Total General Fund $80,841 •- Special Revenue Funds: State of Minnesota: a) Family Grant $23,973 b) RAP Grant 11,990 c) Cops Overtime 4,303 Anoka County: a) Community Development Block Grant 16,381 b) Recycling 24,750 c) Project Safety Net 3,913 d)Auto Theft Group 5,443 e) Sheriffs Office 4,327 Met Council- Section 8 3,969 Fridley HRA 1,301 Other 8,309 Total Special Revenue Funds $108,659 Capital Projects Funds: State of Minnesota-Cover Level Grant $280,250 Fridley HRA 903 Total Capital Projects Funds $281,153 Enterprise Funds: Metropolitan Council Environmental Services (MCES) - Current portion of amounts due from MCES $225,450 Other 3,364 Total Enterprise Funds $228,814 Metropolitan Council Environmental Services (MCES) - Noncurrent portion -long term receivable of amounts due from MCES $25,915 55 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 5. Changes in General Fixed Assets A summary of changes in general fixed assets are as follows: Balance Balance January 1 December 31, 1998 Additions Deletions 1998 Land $2,528,221 $149,414 $227,989 $2,449,646 Buildings 6,598,683 360,755 25,787 6,933,651 Improvements other than buildings 19,272,288 2,835,483 502,325 21,605,446 Machinery and equipment 5,766,392 679,774 484,868 5,961,298 ^ Total $34,165,584 $4,025,426 $1,240,969 $36,950,041 6. Summary of Proprietary Fund Property and Equipment A summary of proprietary fund type property, plant and equipment at December 31, 1998 follows: Internal Enterprise Service Funds Funds Public Information Liquor Utilities Systems Total — Land $151,946 $154,531 $ - $306,477 Buildings 130,211 1,520,821 1,651,032 Improvements other than buildings 49,047 9,824,570 - 9,873,617 Machinery and equipment 174,632 2,038,855 573,892 2,787,379 Water and sewer lines - 18,041,570 - 18,041,570 505,836 31,580,347 573,892 32,660,075 Less: Accumulated depreciation (265,867) (10,859,007) (405,418) (11,530,292) -- Net property and equipment $239,969 $20,721,340 $168,474 $21,129,783 56 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 7. Long-Term Debt The following is a summary of long-term debt transactions of the City for the year ended December 31, 1998. Proprietary General Long-Term Debt Account Group Funds General Obligation Bonds General Tax Special Tax Obligation Increment Assessment Increment Total Revenue Bonds HRA Debt payable-January 1, 1998 $1,510,000 $13,665,000 $15,175,000 $4,705,000 $880,000 Debt issued - 4,185,000 4,185,000 1,180,000 - Debt retired (220,000) (4,090,000) (4,310,000) (260,000) (420,000) Debt payable-December 31, 1998 $1,290,000 $13,760,000 $15,050,000 $5,625,000 $460,000 a aft 57 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 Bonds payable at December 31, 1998 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 5.6% -6.6%. $420 r $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%. 465 $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%. 120 ►, $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%. 285 $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%. 9,575 $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 15,050 ^ Revenue Bonds: $1,615,000 General Obligation Water Revenue Bonds of 1991 due in varying annual installments$35,000-$140,000 through February 1,2011; interest at 5% -6.8%. 1,270 $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 3.0% -5.7%. 435 $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%. 260 $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%. 2,480 $1,180,000 General Obligation Water Revenue Bonds of 1998, due in varying annual installments of$90,000-$130,000 through February 1, 2011. 1,180 Subtotal Revenue Bonds 5,625 - Total Bonds Payable $20,675 58 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 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, 1998 General Obligation Bonds Year Ending Special Tax Tax December 31, Assessment Increment-City Revenue Total Increment- HRA 1999 $220,000 $75,000 $300,000 $595,000 $480,700 2000 225,000 75,000 310,000 610,000 - .� 2001 230,000 875,000 425,000 1,530,000 - 2002 150,000 1,000,000 435,000 1,585,000 - 2003 150,000 1,030,000 450,000 1,630,000 - ... 2004 - 2008 315,000 7,250,000 2,330,000 9,895,000 - 2009-2012 - 3,455,000 1,375,000 4,830,000 - $1,290,000 $13,760,000 $5,625,000 $20,675,000 $480,700 $9,681,268 is available in the Debt Service Fund to service the Special Assessment and Redevelopment Bonds. $13,954,194 is available in the Public Utility Enterprise Funds, to service the Water, Sewer and Storm Water Revenue Bonds. There are a number of limitations and restrictions contained in the various bond indentures. The City is in compliance with all significant limitations and restrictions. Legal Debt Margin - Under applicable State Statutes, the legal debt margin is 2% of the most recent market value less certain deductions. At December 31, 1998, the legal debt margin was$25,870,264. HRA bonds payable at December 31, 1998 comprised of the following issues (in thousands of dollars): _ Revenue Bonds: $4,070,000 Tax Increment Revenue Refunding Bonds of 1985 due in varying annual installments of$265,000-$460,000 through February 1, 1999; interest at 6.75% -9.00%. $460 59 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 .. CROSSOVER REFUNDING On May 1, 1998, the City issued $1,180,000 in General Obligation Water Revenue Refunding Bonds with an average interest rate of 4.64%to advance refund $1,135,000 of outstanding 1991 General Obligation Water Revenue Bonds with an average interest rate of 6.73%. The net proceeds of "' $1,143,395 (after payment of$29,485 of issuance costs) were used to purchase U.S. Government Securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for the interest on the refunding bonds before the crossover date and called principal on the refunded — bonds on February 1, 2001. b w The City advance refunded the 1 1 General Obligation Water Revenue Bonds to reduce its total debt service payments over next 11 years by$124,409 and to obtain an economic gain (difference between the present vale f the debt service payments on the old and new debt) of$90,281. The City is respon i for the debt service of the 1991 refunded bonds through the crossover date (February 1, 2001 nd the debt service of the 1998 refunding bonds after the crossover date. The debt service of the 1998 refunding bonds before the crossover date is payable from the escrow account. Assets held with the escrow agent total $1,140,520 at December 31, 1998. The financial statements present both bond issues and the escrow account assets pursuant to SFAS No. 76. The effect on the financial statements is to report greater debt than, in substance, the City will be responsible for paying. 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. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by State Statute, and vest after three years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. PERA issues a publicly available financial report that includes financial statements and required supplementary information for PERF and PEPFF. That report may be obtained by writing to PERA, 514 St. Peter Street#200, St. Paul, Minnesota, 55102 or by calling (651)296-7460 or 1-800-652-9026. 60 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 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 7.60% 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 11.40%for PEPFF members. The City's contributions for the years ending December, 1996, 1997 and 1998 equal to the contractually required contributions for each year as set by state statute for PERF and PEPFF as follows: Ammil PERF PEPFF .,, 1996 $167,644 $189,021 1997 177,375 207,015 1998 207,829 206,140 "� 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 earnings, 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 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 one- tenth of one percent of the assets in each member's account. 61 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 Total contributions made by the City during fiscal year 1998 were: Percentage of Amount Covered Payroll Required Employees Employer Employees Employer Rates PEDCP $975 $975 5.00% 5.00% 5.00% 9. Defined Contribution Pension Plan - ridle Volunteer Firefi•hters Relief Association A. Plan Desch• • 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. There are no payroll earnings for volunteer firefighters subject to pension contributions; however, in accordance with the Associations bylaws, each active and deferred member contributes $150 per year to the Association. The City also remitted $97,482 and $94,158 in State Aid to the Association for 1998 and 1997 respectively. — Currently the City does not levy any taxes on behalf of the Association. In the event that the state aid formulas would change, the City would pick up the shortfall. — The contribution benefits for each member (and earnings allocated to each members account) are vested as follows: Years of Percent Service Vested 0 thru 9 years 0% 10 years 60% 11 years 64% 12 years 68% 13 years 72% 14 years 76% 15 years 80% — 16 years 84% 17 years 88% 18 years 92% — 19 years 96% 20 years and over 100% Normal Retirement Eligibility 50 years of age and 20 years of service. 62 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 Deferred Vested Eligibility On termination after completion of 10 years of service, a deferred benefit is payable at age 50 equal to the accrued benefit times the vesting percentage. Lump Sum Death Benefit Payment of an amount not to exceed $1,000 as a funeral benefit to the surviving spouse, or if no surviving spouse, the estate of the deceased Association member. During 1998 and as of December 31, 1998, the Association held no securities issued by the City or other related parties. 10. Defined Benefit Pension Plan - Police Consolidation Fund A. Plan Description The City of Fridley Police Relief Association was consolidated into the Police and Fire Consolidation Fund (PFCF) of the Statewide Public Employee's Retirement Association (PERA). Essentially, this means that administration of Associations' affairs will henceforth be handled by PERA, with the Associations' Board of Directors being abolished. It also means that nonretired members of the Associations have the choice of receiving benefits under the Associations by-laws, or the PERA Police and Fire Fund (PEPFF) benefits schedule. The PFCF is an agent, multiple-employer defined benefit plan. This plan provides retirement and disability benefits to members, and benefits to survivors upon death of eligible members. All benefit provisions and the obligation to make contributions are established and administered in accordance with Minnesota Statutes. PERA issues a publicly available financial report that includes financial statements and required supplementary information for PFCF. That report may be obtained by writing to PERA, 514 St. Peter Street#200, St. Paul, Minnesota 55102 or by calling (651)296-7460 or 1-800-652-9026. 63 CITY OF FRIDLEY, MINNESOTA _ NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 B. Funding Policy PFCF members and the City are required to contribute 7.6% and 11.4%, respectively, of members covered payroll. The City is required to contribute an additional lump sum which is calculated annually to eliminate any unfunded liability. The contribution requirements are established by Minnesota Statutes and may be amended by State legislature. Actuarial information is as follows: — Valuation Date 6/30/97 Actuarial Cost Method Entry Age Amortization Method Level Percent Closed Remaining Amortization Period 13 years Asset Valuation Method Cost + 1/3 Unrealized Gains or Losses Actuarial Assumptions: Investment Rate of Return 8.50% Projected Salary increases 5.25% - 11.5% Assumed Inflation Rate 5.00% — Payroll Growth Rate 6.00% Mortality Table - Active 1983 GAM Set Back 5 Years Mortality Table - Retired 1983 GAM — Cost of Living Adjustment 2.50% C. Three Year Trend Information — Annual Percentage Net Year Pension of APC Pension Ended Cost (APC) Contributed Obligation — Police Account 6/30/96 $74,642 100% $0 6/30/97 75,429 100% 0 6/30/98 76,034 100% 0 D. Required Supplementary Information — 11 Ict. (Unfunded) c-., to UAAL Actuarial Actuarial Actuarial /Assets As A% Valuation Value of Accrued In Excess Of Funded Covered of Covered Date Assets Liability (AAL) AAL(UAAL) Ratio Payroll Payroll Police Account 6/30/96 $8,545,375 $7,091,228 $1,454,147 121% $360,570 N/A Fully Funded 6/30/97 9,587,063 7,654,218 1,932,845 125% 396,995 N/A Fully Funded 6/30/98 10,949,002 8,131,627 2,817,375 135% 393,519 N/A Fully Funded _ 64 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 11. Interfund Receivables and Payables Interfund receivables and payables of the primary government at December 31, 1998 are as follows: Interfund Interfund Receivables Payables Due From/Due To: General Fund $79,826 $1,136 Special Revenue Fund: HRA Reimbursement - 1,531 Solid Waste Abatement Fund - 60,517 Chemical Assessment Team Fund - 17,848 Capital Projects Funds: Capital Improvements 1,078,758 - Special Assessments - 1,078,759 Enterprise Funds: Public Utilities Fund 1,326 32 Liquor - 87 $1,159,910 $1,159,910 Interfund receivables and payables of the HRA component unit at December 31, 1998 is as follows: Interfund Interfund Receivables Payables Due From/Due To: General Fund $3,379,881 $ - Special Revenue Fund: Housing Program - 3,127,681 Capital Projects Funds: Center City - 13,526 Onan - 6,231 Shorewood - 24,430 Business Center - 83,372 Community Railway - 124,641 $3,379,881 $3,379,881 65 CITY OF FRIDLEY, MINNESOTA _ NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 12. Reserved Fund Balances/Retained Earnings The following reservations have been made of various fund balances/retained earnings at December 31, 1998: General Fund: Reserved for: r Encumbrances $20,314 Inventory 46,803 Long-term receivables 102,304 169,421 Debt Service Funds: -- Reserved for debt service 764,581 Reserved for long-term receivable 1,398,785 2,163,366 Capital Projects Funds: Reserved for: Encumbrances 1,208,913 Total Governmental Funds $3,541,700 Retained Earnings: Enterprise Funds: — Public Utilities Funds: Reserved for capital outlay $2,567,000 Internal Service Funds: Employee Benefits Fund: Reserved for employee benefits 188,933 Total Proprietary Funds $2,755,933 66 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 13. Designated Fund Balance The following designations have been made of various fund balances at December 31, 1998: General Fund: Working capital $4,064,726 Subsequent year's expenditures 886,782 Contingencies 1,107,494 Replacement of fixed assets 1,164,684 Total General Fund 7,223,686 Special Revenue Funds: Cable TV Fund: Subsequent year's expenditures 56,938 Cable TV program 118,622 Grant Management Fund: Subsequent year's expenditures 22,083 Drug and Gambling Forfeiture Fund: Drug and Gambling Enforcement 13,974 Housing Revitalization Program: Housing Revitalization 189,749 F.C.C. Donations: Fridley Community Center 98,919 Total Special Revenue Funds 500,285 Capital Projects Funds: Capital Improvement Fund: Replacement of fixed assets 1,450,313 Park improvement 388,874 Street improvements 5,173,650 Total Capital Project Fund 7,012,837 Total of designated fund balances $14,736,808 67 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 14. Contributed Capital A reconciliation of contributed capital is as follows: Self Information Public Insurance Systems Utility Internal Internal Enterprise Service Service Fund Fund Fund Balance - January 1 $11,537,624 $1,000,000 $870,619 Increases: Current capital contributions - - - Decreases: Depreciation of contributed assets (369,919) - (25,789) Balance - December 31 $11,167,705 $1,000,000 $844,830 68 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 15. Segment Information for Enterprise Funds The City maintains operating funds for Liquor and Utility (water, sewer, storm sewer operations). Segment information for the year ended December 31, 1998 is as follows: Total Public Enterprise Liquor Utilities Funds Sales (less cost of sales of$2,555,072) $663,977 $ - $663,977 Operating revenues - 6,520,948 6,520,948 Operating expenses (480,223) (5,469,928) (5,950,151) Operating income 183,754 1,051,020 1,234,774 Nonoperating revenues (expenses) - net 83,226 235,219 318,445 Operating transfers in (out) (140,000) (1,500) (141,500) Net income $126,980 $1,284,739 $1,411,719 Depreciation expense included in operating expenses $18,665 $849,222 $867,887 Property and equipment: Additions (including capital contributions) 91,479 784,757 876,236 Working capital 1,679,346 9,677,565 11,356,911 Total assets 2,134,636 30,934,718 33,069,354 Bonds payable - 5,602,919 5,602,919 Fund equity: Contributed capital - 11,167,705 11,167,705 Retained earnings 1,919,315 13,954,194 15,873,509 Total fund equity $1,919,315 $25,121,899 $27,041,214 69 CITY OF FRIDLEY, MINNESOTA — NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 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) 1998 All Capital Projects Funds $2,231,840 $3,530,394 $ - $6,787,082 Less unbudgeted funds: Special Assessment Fund (71,370) (2,641,315) (1,394,127) 1,434,668 Budgeted Capital Projects Funds $2,160,470 $889,079 ($1,394,127) $8,221,750 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. 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, 1998, the Self Insurance Fund has accumulated equity in the amount of $1,822,591 to cover future claims and losses. 70 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 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. The HRA is involved in ongoing litigation regarding the condemnation of certain property acquired in 1995. In 1996, the Anoka County Condemnation Commissioners changed the acquisition value on the property to $1.5 million, an increase of approximately $300,000 from the $1.2 million the HRA paid in 1995 to acquire the condemned property. The HRA is appealing the award and their attorney has indicated that the final award will more than likely be close to the$1.5 million. 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, 1998. 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. 19. Leases Operating Lease The City leased property at the Holly Shopping Center for a warehouse liquor store. The City renewed the lease on March 1, 1998 for the period ending February 28, 1999. Total rental expense for 1998 was $50,050. 71 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 20. Deficit Balances The following funds had deficit balances at December 31, 1998: Special Revenue Funds: Solid waste abatement ($24,685) Chemical assessment team (18,954) Capital Projects Funds: Special assessments (1,434,668) — These deficit balances will be funded by a combination of future General Obligation Improvement Bonds and transfers from other funds. 21. 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, 1998, there were twenty-four series of Industrial Revenue Bonds issued. The aggregate principal amount payable for the two series issued after July 1, 1995 was $6,545,000. 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. 22. Change in Accounting Principle The City implemented Governmental Accounting Standards Board (GASB) Statement No. 31, Accounting and Financial Reporting for Certain Investments and External Investment Pools, during 1998. GASB Statement 31 requires that investments be reported at fair value on the balance sheet with changes in the fair value of investments reported on the operating statement. The effect of implementing GASB 31 during 1998 was to decrease investment income by approximately$1,f2,0QQ. The effect of implementing GASB 31 was immaterial at December 31, 1997 and accordingly 1997 financial statements have not been restated. 72 REQUIRED SUPPLEMENTARY INFORMATION 73 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION YEAR 2000 ISSUE December 31, 1998 YEAR 2000 INFORMATION (UNAUDITED) The City is currently addressing year 2000 issues relating to its computer systems and other electronic equipment. The year 2000 issue refers to the fact that many computer programs use only the last two digits to refer to a year. Therefore, both 1900 and 2000 would be referred to as "00." Computer programs have to be adjusted to recognize the difference between those two years or the programs will fail or create errors. Also, some programs may not be able to recognize that 2000 is a leap year. Further, the year 2000 issue could affect electronic equipment—such as vehicles, pump stations and phone systems—containing computer chips that have date recognition features. In 1998, the City created a Project Team to help address the year 2000 issue. The Project Team has identified various computer systems and pieces of electronic equipment that are critical to conducting the entity's operations and that need to be year 2000 compliant. The Project Team is monitoring year 2000 compliance efforts at the various departments on a quarterly basis and is providing assistance and assigning resources to accelerate compliance for all mission-critical systems and equipment. The Project Team also is monitoring and assisting the department's efforts to develop contingency plans should year 2000 failures adversely affect the department's mission-critical operations. STAGES OF WORK The City has identified three computer systems that are mission critical (that is, critical to conducting operations). Then we are subjecting those systems and equipment to the following stages of work to address year 2000 issues: • Awareness stage— Establishing a budget and project plan for dealing with the year 2000 issue. • Assessment stage— Identifying the systems and components for which year 2000 compliance work is needed. _ • Remediation stage— Making changes to systems and equipment. • Validation/testing stage—Validating and testing the changes that were made during the remediation stage. The City's year 2000 remediation work for its mission-critical systems and equipment are in the following stages of work. Financial Accounting Systems. The City has made plans with its current software vendor to upgrade to their Y2K compliant version of financial accounting software. Police Records System. The MIS and Police staffs are in the process of implementing a new system. Telephone and Voice Mail Systems. The telephone and voice mail systems will be replaced with Y2K compliant versions during the first half of 1999. 75 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION YEAR 2000 ISSUE December 31, 1998 SEC DISCLOSURE. The City has identified external parties whose preparedness for year 2000 could affect the City's ability to provide services and meet its obligations, including the timely payment of its indebtedness. Examples of such external parties are as follows: External Party Description — Anoka County The County is responsible for billing and collecting property taxes and special assessments. The County reports that it is currently assessing its billing and collection systems. Financial Institutions Our main financial institution has completed the validation stage and are year 2000 compliant. They will begin testing with the Federal Reserve System in early 1999. — Various financial institutions are the paying agents for the City bond issues. They report that they are currently testing its wire transfer — and paying agent related systems. Investments of the City are held by various financial institutions. They report that they are currently remediating all wire transfer and investment related systems. As of December 31, 1998, other than internal staff time, the City has spent zero dollars associated with fixing year 2000 issues, and estimates future expenditures of approximately$300,000. The City has not incurred losses because of the year 2000 issue. The City had no liabilities associated with year 2000 issues at December 31, 1998. UNCERTAINTIES Because of the unprecedented nature of the year 2000 issue, its effects and the success of related remediation efforts will not be fully determinable until the year 2000 and thereafter. Management cannot assure that the City is or will be year 2000 ready, that the City's remediation efforts will be successful in whole or in part, or that parties with whom the City does business will be year 2000 ready. 76 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, 1998 and 1997 Assets 1998 1997 - Cash and investments $7,279,914 $6,785,988 Receivables: - Accounts 124,633 57,529 Taxes: Unremitted 171,351 73,828 - Delinquent 80,116 117,421 Special assessments: Unremitted 592 1,708 Delinquent - 143 Deferred 3,740 1,591 Interest 261,472 360,832 Loan receivable 6,300 6,300 Developer note 96,004 111,346 Due from other funds 79,826 170,580 Due from other governments 80,841 64,515 Inventories, at cost 46,802 34,222 Total assets $8,231,591 $7,786,003 - Liabilities and Fund Balance Liabilities: Accounts payable $181,156 $163,836 Deposits payable 18,203 16,303 Salaries payable 255,925 253,665 Deferred revenue 86,743 119,154 Due to other funds 1,136 1,165 - Due to other governments 5,597 21,235 Total liabilities 548,760 575,358 Fund balance: Reserved for encumbrances 20,314 16,307 Reserved for inventory 46,803 34,222 Reserved for long-term receivables 102,304 117,646 Unreserved: Designated for working capital 4,064,726 4,036,426 - Designated for contingencies 1,107,494 1,028,854 Designated for subsequent year's expenditures 886,782 276,807 Designated for fixed asset replacement 1,164,684 1,307,113 Undesignated 289,724 393,270 Total fund balance 7,682,831 7,210,645 Total liabilities and fund balance $8,231,591 $7,786,003 78 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, 1998 With comparative actual amounts for year ended December 31, 1997 1998 Variance - Favorable 1997 Budget Actual (Unfavorable) Actual Revenues: - Taxes $3,889,419 $4,007,547 $118,128 $3,765,946 Special assessments 928 3,682 2,754 9,866 Licenses and permits 616,727 712,975 96,248 675,067 - Intergovernmental revenue 3,330,974 3,409,671 78,697 3,473,314 Charges for services 1,140,618 1,209,668 69,050 1,094,715 Fines and forfeits 181,083 196,448 15,365 185,541 _ Investment income 362,120 376,741 14,621 385,185 Miscellaneous 162,833 207,529 44,696 292,397 Total revenues 9,684,702 10,124,261 439,559 9,882,031 - Expenditures: Current: General government 1,812,822 1,710,258 102,564 1,699,882 Public safety 4,111,879 4,058,203 53,676 4,058,669 Municipal center 205,481 205,481 - 214,490 Public works 2,311,111 2,224,219 86,892 2,256,227 Community development 662,996 648,839 14,157 572,817 Recreation and naturalist 925,064 897,288 27,776 804,379 Capital outlay 328,480 315,601 12,879 424,060 - Total expenditures 10,357,833 10,059,889 297,944 10,030,524 Excess (deficiency) of revenues -- over (under) expenditures (673,131) 64,372 737,503 (148,493) Other financing sources (uses): - Sale of general fixed assets 24,037 34,912 10,875 13,830 Operating transfers in 372,902 372,902 - 220,821 Total other financing sources (uses) 396,939 407,814 10,875 234,651 - Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses ($276,192) 472,186 $748,378 86,158 Fund balance -January 1 7,210,645 7,124,487 - Fund balance - December 31 $7,682,831 $7,210,645 79 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, 1998 - With comparative actual amounts for year ended December 31, 1997 1998 Variance Favorable 1997 - Budget Actual (Unfavorable) Actual Taxes and special assessments: Current ad valorem taxes $3,825,521 $3,926,220 $100,699 $3,726,656 - Delinquent ad valorem taxes 33,098 3,584 (29,514) 21,488 Penalties and interest 19,403 14,224 (5,179) 16,482 Forfeited sale-taxes 11,397 63,519 52,122 1,320 _ Special assessments 928 3,682 2,754 9,866 Total taxes and special assessments 3,890,347 4,011,229 120,882 3,775,812 Licenses and permits: - Licenses: Contractor 43,385 48,338 4,953 12,680 Business 78,732 85,667 6,935 57,458 - All other 61,394 63,580 2,186 101,616 Permits 433,216 515,390 82,174 503,313 Total licenses and permits 616,727 712,975 96,248 675,067 - Intergovernmental revenue: Civil defense 6,713 2,828 (3,885) 6,801 -- Fema disaster aid - 49,626 49,626 94,239 State maintenance aid 184,730 186,582 1,852 288,360 State credits 1,039,739 1,048,920 9,181 1,048,338 - Local government aid 1,677,068 1,677,068 - 1,643,908 Local performance aid 37,466 37,466 - 31,801 Other state grants 62,034 41,291 (20,743) 11,673 - Police and fire pension 301,551 317,201 15,650 319,360 Other 21,673 48,689 27,016 28,834 Total intergovernmental revenue 3,330,974 3,409,671 78,697 3,473,314 Charges for services: General government 810,481 866,385 55,904 760,730 Public safety 116,990 140,577 23,587 151,577 _ Conservation of health 3,970 187 (3,783) 1,093 Recreation 209,177 202,519 (6,658) 181,315 Total charges for services 1,140,618 1,209,668 69,050 1,094,715 - Fines and forfeits 181,083 196,448 15,365 185,541 Investment income 362,120 376,741 14,621 385,185 80 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, 1998 With comparative actual amounts for year ended December 31, 1997 1998 Variance Favorable 1997 Budget Actual (Unfavorable) Actual Miscellaneous revenue: — Rent income $3,466 $74 ($3,392) $195 Sale of property 12,985 608 (12,377) 323 Donations 13,823 22,807 8,984 46,785 Miscellaneous 132,559 184,040 51,481 245,094 Total miscellaneous revenue 162,833 207,529 44,696 292,397 Total revenues 9,684,702 10,124,261 439,559 9,882,031 Other financing sources (uses): _ Sale of general fixed assets 24,037 34,912 10,875 13,830 Operating transfers in: Liquor fund 372,902 372,902 - 75,000 Special assessment debt service fund - - - 145,821 Total other financing sources (uses) 396,939 407,814 10,875 234,651 Total revenues and other financing sources $10,081,641 $10,532,075 $450,434 $10,116,682 81 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, 1998 With comparative actual amounts for year ended December 31, 1997 1998 Variance Favorable 1997 Budget Actual (Unfavorable) Actual General government: - Mayor and council: Personal services $51,018 $51,018 $ - $51,079 Supplies and other charges 43,641 38,543 5,098 35,394 - Total mayor and council 94,659 89,561 5,098 86,473 Planning commission: Supplies and other charges 1,889 636 1,253 951 Other commissions: Supplies and other charges 10,796 616 10,180 1,892 City manager: Personal services 231,640 201,814 29,826 232,601 Supplies and other charges 51,820 51,820 - 73,212 Total City manager 283,460 253,634 29,826 305,813 _ Personnel: Personal services 91,002 91,002 - 81,703 Supplies and other charges 18,179 18,179 - 12,587 Total personnel 109,181 109,181 0 94,290 Legal: Supplies and other charges 272,780 272,780 - 262,735 Elections: Personal services 24,191 24,191 - - Supplies and other charges 2,955 1,665 1,290 38 Total elections 27,146 25,856 ' 1,290 38 - Accounting: Personal services 480,514 445,534 34,980 421,300 Supplies and other charges 91,063 91,063 - 105,523 - Total accounting 571,577 536,597 34,980 526,823 Assessing: Personal services 127,119 127,119 - 111,540 - Supplies and other charges 9,794 9,794 - 8,049 Total assessing 136,913 136,913 0 119,589 MIS: Personal services 95,531 95,531 - 43,279 Supplies and other charges 48,184 28,247 19,937 97,523 Total MIS 143,715 123,778 19,937 140,802 City clerk/records: Personal services 103,365 103,365 - 114,412 Supplies and other charges 8,674 8,674 - 7,964 Total City clerk/records 112,039 112,039 0 122,376 83 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, 1998 With comparative actual amounts for year ended December 31, 1997 1998 Variance Favorable 1997 - Budget Actual (Unfavorable) Actual Nondepartmental: Personal services $1,508 $1,508 $ - $2,351 - Supplies and other charges 47,159 47,159 - 35,749 Total nondepartmental 48,667 48,667 0 38,100 Total general government 1,812,822 1,710,258 102,564 1,699,882 Public safety: _ Police: Personal services 2,957,668 2,956,820 848 2,903,628 Supplies and other charges 290,913 290,913 - 321,672 - Total police 3,248,581 3,247,733 848 3,225,300 Fire: Personal services 641,441 611,171 30,270 616,114 Supplies and other charges 120,846 115,183 5,663 109,393 - Total fire 762,287 726,354 35,933 725,507 Rental inspections: Personal services 77,017 63,673 13,344 82,351 - Supplies and other charges 13,849 10,712 3,137 13,440 Total rental inspections 90,866 74,385 16,481 95,791 Civil defense: - Supplies and other charges 10,145 9,731 414 12,071 Total public safety 4,111,879 4,058,203 53,676 4,058,669 - Municipal center: Personal services 27,808 27,808 - 27,058 - Supplies and other charges 177,673 177,673 - 187,432 Total municipal center 205,481 205,481 0 214,490 _ Public works: Engineering: - Personal services 369,672 367,108 2,564 359,679 Supplies and other charges 72,300 50,244 22,056 61,731 Total engineering 441,972 417,352 24,620 421,410 Public works and parks: Personal services 1,123,743 1,074,360 49,383 1,068,656 Supplies and other charges 745,396 732,507 12,889 766,161 Total public works and parks 1,869,139 1,806,867 62,272 1,834,817 - Total public works 2,311,111 2,224,219 86,892 2,256,227 84 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, 1998 With comparative actual amounts for year ended December 31, 1997 - 1998 Variance Favorable 1997 - Budget Actual (Unfavorable) Actual Community development: Building inspection: - Personal services $163,651 $163,651 $ - $150,636 Supplies and other charges 106,871 106,871 - 55,377 Total building inspection 270,522 270,522 0 206,013 Planning: Personal services 319,226 305,069 14,157 313,694 Supplies and other charges 73,248 73,248 - 53,110 Total planning 392,474 378,317 14,157 366,804 Total community development 662,996 648,839 14,157 572,817 Recreation and naturalist: Recreation: Personal services 430,707 430,634 73 400,381 Supplies and other charges 249,638 221,935 27,703 184,132 Total recreation 680,345 652,569 27,776 584,513 Naturalist: Personal services 184,792 184,792 - 162,181 - Supplies and other charges 59,927 59,927 - 57,685 Total naturalist 244,719 244,719 0 219,866 Total recreation and naturalist 925,064 897,288 27,776 804,379 Capital outlay expenditures: City clerk/records - - - 4,389 _ Police 72,743 72,743 - 70,419 Fire 24,540 14,761 9,779 57,782 Municipal center 1,379 1,379 - 6,798 Engineering - - - 1,636 Public works 224,217 222,917 1,300 276,456 Naturalist 797 797 - 1,780 Recreation 4,804 3,004 1,800 4,800 Total capital outlay 328,480 315,601 12,879 424,060 Total expenditures $10,357,833 $10,059,889 $297,944 $10,030,524 85 SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for revenues derived from specific taxes or other earmarked revenue sources. They are usually required by statute, charter provision or local ordinance to finance particular governmental functions or activities. Cable TV Fund This fund receives revenues from the issuance of a franchise agreement with the cable TV provider. These revenues are used for the operation and maintenance of a government access channel. Grant Management Fund This fund administers grants received from a variety of intergovernmental agencies. In most cases, grant funds are provided on a reimbursement basis following proper documentation of expenditures, however, in some cases the money is provided in advance to be spent on specific activities outlined in the grant. Solid Waste Abatement Fund This fund receives grants, recycling fees and yard waste fees. These revenues finance the City s curbside recycling pickup and operation of the yard waste transfer site. Drug and Gambling Forfeiture Fund This fund receives forfeited property in connection with illegal gambling or drug activity. Pursuant to Minnesota Statutes the proceeds are disbursed equally between the investigating agency and the prosecuting agency. HRA Reimbursement Fund This fund receives revenues from the Housing and Redevelopment Authority. These revenues are used to reimburse the City for professional services provided by City staff for HRA related activities. Housing Revitalization Fund This fund receives revenues to administer the City Council s priority of improving housing rehabilitation programs to revitalize aging neighborhoods in the community. Chemical Assessment Team Fund This fund receives grant revenues and accounts for expenditures related to training and coordinating a multi-city chemical assessment team. F.C.C. Donations Fund This fund is used to account for donations received and used in improving and furnishing the Fridley Community Center. CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET December 31, 1998 With comparative totals for December 31, 1997 — Solid Waste Cable Grant Abatement Assets TV Management Fund — Cash and investments $152,971 $73,078 $ - Accounts receivable 34,230 - 34,328 _ Due from other funds - - - Due from other governments - 78,236 24,750 Total assets $187,201 $151,314 $59,078 — Liabilities and Fund Balance Liabilities: Accounts payable $181 $64,218 $21,147 Deposits payable 10,221 - - — Salaries payable 1,239 5,558 2,099 Deferred revenue - 59,455 - Due to other funds - - 60,517 Due to other governments - - - Total liabilities 11,641 129,231 83,763 — Fund balance: Unreserved: Designated for subsequent year's expenditures 56,938 22,083 - Designated for special revenue programs 118,622 - - — Undesignated - - (24,685) Total fund balance 175,560 22,083 (24,685) Total liabilities and fund balance $187,201 $151,314 $59,078 88 Exhibit C-1 - Drug and Gambling Chemical HRA Forfeiture Housing Assessment F.C.C. Totals - Reimbursement Fund Revitalization Team Donations 1998 1997 $ - $8,531 $189,749 $ - $154,414 $578,743 $224,224 - - - - - - 68,558 57,402 1,301 - - - - 1,301 - 230 5,443 - - - 108,659 165,451 - $1,531 $13,974 $189,749 $0 $154,414 $757,261 $447,077 $ - $ - $ - $963 $ - $86,509 $12,317 - - - - - 10,221 10,226 - - - 143 - 9,039 10,997 - - - - - 59,455 17,761 - 1,531 - - 17,848 - 79,896 218,837 - - - - 55,495 55,495 50 1,531 0 0 18,954 55,495 300,615 270,188 - - - - - 79,021 27,439 - 13,974 189,749 - 98,919 421,264 220,012 - - - (18,954) - (43,639) (70,562) 0 13,974 189,749 (18,954) 98,919 456,646 176,889 $1,531 $13,974 $189,749 $0 $154,414 $757,261 $447,077 89 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended December 31, 1998 With comparative totals for year ended December 31, 1997 Solid Waste Cable Grant Abatement TV Management Fund — Revenues: Licenses and permits $133,170 $ - $ - Intergovernmental revenue - 367,163 75,220 — Charges for services - 249 304,631 Fines and forfeits - - - Investment income 8,398 - - — Donations 82,833 - - Miscellaneous 687 - 245 Total revenues 225,088 367,412 380,096 — Expenditures: Current: General government 125,473 337,518 397,663 Public safety - - - Recreation and naturalist - - Capital outlay 10,185 23,920 - Total expenditures 135,658 361,438 397,663 Excess (deficiency) of revenues over (under) expenditures 89,430 5,974 (17,567) — Other financing sources: Sale of fixed assets - 4,000 - — Operating transfers in - 1,500 - Total other financing sources 0 5,500 0 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 89,430 11,474 (17,567) Fund balance (deficit) - January 1 86,130 10,609 (7,118) Fund balance (deficit) - December 31 $175,560 $22,083 ($24,685) 90 Exhibit C-2 Drug and Gambling Chemical HRA Forfeiture Housing Assessment F.C.C. Totals - Reimbursement Fund Revitalization Team Donations 1998 1997 $ - $ - $ - $ - $ - $133,170 $117,555 - 13,969 - - 36,497 - 492,849 493,500 - - - 304,880 218,990 - 6,284 - - - 6,284 1,090 - - - - - 9,333 17,731 11,049 - - - - 69,544 152,377 187,732 - - - 932 1,000 13,969 6,284 0 36,497 78,877 1,108,223 1,030,916 14,204 - - - - 874,858 788,694 852 - 38,993 - 39,845 50,614 - - - - 4,873 4,873 8,977 - 2,311 12,071 959 114,944 164,390 188,537 14,204 3,163 12,071 39,952 119,817 1,083,966 1,036,822 (235) 3,121 (12,071) (3,455) (40,940) 24,257 (5,906) - - - - - 4,000 5,000 - - 250,000 - - 251,500 - 0 0 250,000 0 0 255,500 5,000 (235) 3,121 237,929 (3,455) (40,940) 279,757 (906) 235 10,853 (48,180) (15,499) 139,859 176,889 177,795 ._ $0 $13,974 $189,749 ($18,954) $98,919 $456,646 $176,889 91 Exhibit C-3 CITY OF FRIDLEY, MINNESOTA CABLE TV SPECIAL REVENUE FUND — COMPARATIVE BALANCE SHEET December 31, 1998 and 1997 Assets 1998 1997 Cash and investments $152,971 $72,811 Accounts receivable 34,230 37,180 Total assets $187,201 $109,991 Liabilities and Fund Balance — Liabilities: Accounts payable $181 $5,296 _ Deposits payable 10,221 10,226 Salaries payable 1,239 1,060 Deferred revenue - 7,279 — Total liabilities 11,641 23,861 Fund balance: —, Unreserved: Designated for subsequent year's expenditures 56,938 16,830 Designated for cable TV program 118,622 69,300 _ Total fund balance 175,560 86,130 Total liabilities and fund balance $187,201 $109,991 92 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, 1998 With comparative amounts for year ended December 31, 1997 1998 Variance - Favorable 1997 Budget Actual (Unfavorable) Actual Revenues: - Licenses -franchise fee $113,000 $133,170 $20,170 $117,555 Investment income 7,500 8,398 898 6,589 Donations - 82,833 82,833 - - Miscellaneous - 687 687 167 Total revenues 120,500 225,088 104,588 124,311 Expenditures: Current: General government: Personal services 60,125 58,453 1,672 56,229 Supplies and other charges 67,020 67,020 - 107,900 Capital outlay 10,185 10,185 - 33,004 Total expenditures 137,330 135,658 1,672 197,133 Excess (deficiency) of revenues over (under) expenditures ($16,830) 89,430 $106,260 (72,822) Fund balance -January 1 86,130 158,952 Fund balance - December 31 $175,560 $86,130 93 Exhibit C-5 CITY OF FRIDLEY, MINNESOTA — GRANT MANAGEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1998 and 1997 Assets 1998 1997 Cash and investments $73,078 $ - Due from other governments 78,236 159,369 Total assets $151,314 $159,369 Liabilities and Fund Balance — Liabilities: Accounts payable $64,218 $2,949 — Salaries payable 5,558 7,776 Deferred revenue 59,455 10,482 Due to other funds - 127,553 _ Total liabilities 129,231 148,760 Fund balance: Unreserved - designated for subsequent year's expenditures 22,083 10,609 Total fund balance 22,083 10,609 Total liabilities and fund balance $151,314 $159,369 94 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, 1998 With comparative amounts for year ended December 31, 1997 1998 Variance Favorable 1997 Budget Actual (Unfavorable) Actual Revenues: - Intergovernmental revenue: Federal $307,580 $303,788 ($3,792) $290,836 State 53,770 63,375 9,605 51,840 - Charges for services - 249 249 249 Total revenues 361,350 367,412 6,062 342,925 - Expenditures: Current: General government: Personal services 196,974 196,974 - 207,657 Supplies and other charges 140,544 140,544 - 42,693 Capital outlay 23,920 23,920 - 111,112 Total expenditures 361,438 361,438 0 361,462 Excess (deficiency) of revenues over (under) expenditures (88) 5,974 6,062 (18,537) Other financing sources: Sale of fixed assets - 4,000 4,000 5,000 Operating transfers in (out): Storm Water Fund - 1,500 1,500 - Total other financing sources 0 5,500 5,500 5,000 - Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses ($88) 11,474 $1 1,562 (13,537) Fund balance -January 1 10,609 24,146 - Fund balance - December 31 $22,083 $10,609 95 Exhibit C-7 CITY OF FRIDLEY, MINNESOTA SOLID WASTE ABATEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1998 and 1997 Assets 1998 1997 Accounts receivable $34,328 $20,222 Due from other governments 24,750 6,082 Total assets $59,078 $26,304 Liabilities and Fund Balance — Liabilities: Accounts payable $21,147 $969 _ Salaries payable 2,099 2,078 Due to other funds 60,517 30,375 Total liabilities 83,763 33,422 Fund balance: Unreserved: Undesignated (24,685) (7,118) Total fund balance (24,685) (7,118) Total liabilities and fund balance $59,078 $26,304 96 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, 1998 With comparative amounts for year ended December 31, 1997 1998 Variance Favorable 1997 Budget Actual (Unfavorable) Actual Revenues: Intergovernmental revenue: State $75,672 $75,220 ($452) $96,673 Charges for services 321,454 304,631 (16,823) 218,741 Miscellaneous revenue 1,000 245 (755) 833 Total revenues 398,126 380,096 (18,030) 316,247 Expenditures: Current: General government: Personal services 76,098 71,859 4,239 68,826 Supplies and other charges 338,354 325,804 12,550 282,790 Capital outlay - - - 1,065 Total expenditures 414,452 397,663 16,789 352,681 Excess (deficiency) of revenues over (under) expenditures ($16,326) (17,567) ($1,241) (36,434) Fund balance (deficit) -January 1 (7,118) 29,316 Fund balance (deficit) - December 31 ($24,685) ($7,118) 97 Exhibit C-9 CITY OF FRIDLEY, MINNESOTA HRA REIMBURSEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1998 and 1997 Assets 1998 1997 Cash and investments $ - $239 Due from other funds 1,301 - Due from other governments 230 - — Total assets $1,531 $239 Liabilities and Fund Balance Liabilities: — Accounts payable $ - $4 Due to other funds 1,531 - Total liabilities 1,531 4 Fund balance: Unreserved - undesignated - 235 Total liabilities and fund balance $1,531 $239 98 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, 1998 With comparative amounts for year ended December 31, 1997 1998 Variance Favorable 1997 Budget Actual (Unfavorable) Actual Revenues: — Intergovernmental revenue: Housing Redevelopment Authority $13,969 $13,969 $ - $16,521 Total revenues 13,969 13,969 0 16,521 Expenditures: Current: General government: Supplies and other charges 14,204 14,204 - 16,798 Total expenditures 14,204 14,204 0 16,798 Excess (deficiency) of revenues over (under) expenditures ($235) (235) $0 (277) Fund balance -January 1 235 512 Fund balance - December 31 $0 $235 99 Exhibit C-11 CITY OF FRIDLEY, MINNESOTA DRUG AND GAMBLING FORFEITURE SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1998 and 1997 Assets 1998 1997 Cash and investments $8,531 $10,853 Due from other governments 5,443 - Total assets $13,974 $10,853 Liabilities and Fund Balance — Liabilities $ - $ - Fund balance: Unreserved - designated for drug and gambling enforcement 13,974 10,853 Total liabilities and fund balance $13,974 $10,853 100 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, 1998 With comparative amounts for year ended December 31, 1997 1998 Variance Favorable 1997 Budget Actual (Unfavorable) Actual Revenues: — Fines and forfeits $6,284 $6,284 $ - $1,090 Total revenues 6,284 6,284 0 1,090 Expenditures: Current: Public safety: Supplies and other charges 852 852 - 155 Capital outlay 2,311 2,311 - - Total expenditures 3,163 3,163 0 155 — Excess (deficiency) of revenues over expenditures $3,121 3,121 $0 935 Fund balance -January 1 10,853 9,918 Fund balance - December 31 $13,974 $10,853 101 Exhibit C-13 CITY OF FRIDLEY, MINNESOTA HOUSING REVITALIZATION SPECIAL REVENUE FUND — COMPARATIVE BALANCE SHEET December 31, 1998 and 1997 Assets 1998 1997 Cash and investments $189,749 $ - Total assets $189,749 $0 Liabilities and Fund Balance Liabilities Due to other funds $ - $48,180 Total liabilities 0 48,180 _ Fund balance: Unreserved - designated for special revenue programs 189,749 - _ Unreserved - undesignated - (48,180) Total liabilities and fund balance $189,749 $0 102 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, 1998 With comparative amounts for year ended December 31, 1997 1998 Variance Favorable 1997 Budget Actual (Unfavorable) Actual — Revenues $ - $ - $ - $ - Expenditures: Current: General government: Supplies and other charges - - - 5,801 Capital outlay 25,000 12,071 12,929 - Total expenditures 25,000 12,071 12,929 5,801 Excess (deficiency) of revenues over (under) expenditures (25,000) (12,071) 12,929 (5,801) 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 $225,000 237,929 $12,929 (5,801) Fund balance (deficit) -January 1 (48,180) (42,379) Fund balance (deficit) - December 31 $189,749 ($48,180) 103 Exhibit C-15 CITY OF FRIDLEY, MINNESOTA CHEMICAL ASSESSMENT TEAM SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1998 and 1997 Assets 1998 1997 Assets $ - $ - Liabilities and Fund Balance — Liabilities: Accounts payable $963 $2,637 _ Salaries payable 143 83 Due to other funds 17,848 12,729 Due to other governments - 50 Total liabilities 18,954 15,499 Fund balance: — Unreserved - undesignated (18,954) (15,499) Total liabilities and fund balance $0 $0 104 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, 1998 With comparative amounts for year ended December 31, 1997 1998 Variance Favorable 1997 Budget Actual (Unfavorable) Actual — Revenues: Intergovernmental revenue: State $36,497 $36,497 $ - $37,630 Total revenues 36,497 36,497 0 37,630 Expenditures: Current: Public safety: Personal services 11,801 11,801 - 9,338 Supplies and other charges 27,192 27,192 - 41,121 Capital outlay 959 959 - - Total expenditures 39,952 39,952 0 50,459 Excess (deficiency) of revenues over (under) expenditures $76,449 (3,455) $0 (12,829) Fund balance (deficit) -January 1 (15,499) (2,670) Fund balance (deficit) - December 31 ($18,954) ($15,499) 105 Exhibit C-17 CITY OF FRIDLEY, MINNESOTA F.C.C. DONATIONS SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1998 and 1997 Assets 1998 1997 Cash and investments $154,414 $140,321 Total assets $154,414 $140,321 — Liabilities and Fund Balance Liabilities: Accounts payable $ - $462 Due to other governments 55,495 - Total liabilities 55,495 462 Fund balance: Unreserved - designated for Fridley Community Center 98,919 139,859 Total fund balance 98,919 139,859 Total liabilities and fund balance $154,414 $140,321 106 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, 1998 With comparative amounts for year ended December 31, 1997 1998 Variance Favorable 1997 Budget Actual (Unfavorable) Actual Revenues: Investment income $9,333 $9,333 $ - $4,460 Donations 69,544 69,544 - 187,732 Total revenues 78,877 78,877 0 192,192 Expenditures: Current: _ Recreation and naturalist: Supplies and other charges 4,873 4,873 - 8,977 Capital outlay 114,944 114,944 - 43,356 Total expenditures 119,817 119,817 0 52,333 Excess (deficiency) of revenues over (under) expenditures ($40,940) (40,940) $0 139,859 Fund balance -January 1 139,859 - Fund balance - December 31 $98,919 $139,859 107 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, 1998 and 1997 Special Tax Totals Assets Assessment Increment 1998 1997 — Cash and investments $8,247,951 $40,742 $8,288,693 $8,005,404 Receivables: Special assessments: Unremitted 10,406 - 10,406 4,868 Delinquent 24,147 - 24,147 42,723 Deferred 1,307,751 - 1,307,751 1,593,594 Loan receivable from component unit 1,394,917 - 1,394,917 1,465,834 Due from other funds - - - 48,179 Total assets $10,985,172 $40,742 $11,025,914 $11,160,602 Liabilities and Fund Balance Liabilities: Accounts payable $10,000 $ - $10,000 $ - Deferred revenue 1,331,899 - 1,331,899 1,636,318 ` Due to other governments 2,747 - 2,747 3,208 Total liabilities 1,344,646 0 1,344,646 1,639,526 Fund balance: Reserved for debt service 723,839 40,742 764,581 757,586 Reserved for long term receivable 1,398,785 - 1,398,785 1,465,834 --- Unreserved - undesignated 7,517,902 - 7,517,902 7,297,656 Total fund balance 9,640,526 40,742 9,681,268 9,521,076 Total liabilities and fund balance $10,985,172 $40,742 $11,025,914 $11,160,602 110 Exhibit D-2 CITY OF FRIDLEY, MINNESOTA DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended December 31, 1998 With comparative totals for year ended December 31, 1997 Special Tax Totals Assessment Increment 1998 1997 Revenues: Special assessments $416,746 $ - $416,746 $451,753 — Investment income 496,813 - 496,813 602,944 Interest on loan 72,417 - 72,417 37,500 Total revenues 985,976 0 985,976 1,092,197 Expenditures: Debt service: Principal retirement 220,000 4,090,000 4,310,000 9,675,000 Interest and fiscal charges 75,921 722,860 798,781 941,657 Bond issuance costs - 29,587 29,587 - Miscellaneous 2,748 - 2,748 6,549 Total expenditures 298,669 4,842,447 5,141,116 10,623,206 Excess (deficiency) of revenues over (under) expenditures 687,307 (4,842,447) (4,155,140) (9,531,009) Other financing sources (uses): Bond proceeds - 4,160,329 4,160,329 9,490,146 Operating transfers in (out): General Fund (232,902) - (232,902) (145,821) Capital Improvements Fund - - - (1,556,887) Special Revenue Fund (250,000) - (250,000) - HRA Component Unit (84,955) 722,860 637,905 759,315 Total other financing sources (uses) (567,857) 4,883,189 4,315,332 8,546,753 Excess (deficiency) of revenues and other financing — sources over (under) expenditures and other financing uses 119,450 40,742 160,192 (984,256) • Fund balance -January 1 9,521,076 - 9,521,076 10,505,332 Fund balance - December 31 $9,640,526 $40,742 $9,681,268 $9,521,076 111 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, 1998 With comparative totals for December 31, 1997 Capital Special Totals Assets Improvements Assessments 1998 1997 Cash and investments $6,892,767 $395,758 $7,288,525 $8,057,697 Receivables: Accounts 4,186 - 4,186 - - Taxes: Unremitted 1,771 - 1,771 1,368 Delinquent 2,830 - 2,830 2,703 - Special assessments: 0"," Delinquent 101 1,200 1,301 105 Deferred 7,448 61,213 68,661 79,437 Due from other funds 1,078,758 - 1,078,758 474,904 Due from other governments 281,153 - 281,153 93,340 Total assets $8,269,014 $458,171 $8,727,185 $8,709,554 Liabilities and Fund Balance Liabilities: Accounts payable $10,487 $2,239 $12,726 $17,783 Contracts payable 16,453 41,174 57,627 45,434 Deferred revenue 10,379 62,399 72,778 82,245 Due to other funds - 1,078,759 1,078,759 474,903 Due to other governments 9,945 708,268 718,213 3,553 Total liabilities 47,264 1,892,839 1,940,103 623,918 Fund balance: Reserved for encumbrances 1,208,913 - 1,208,913 693,871 Unreserved: Designated for fixed asset replacement 1,450,313 - 1,450,313 1,622,742 Designated for park improvements 388,874 - 388,874 628,554 Designated for street improvements 5,173,650 - 5,173,650 5,399,319 Undesignated - (1,434,668) (1,434,668) (258,850) Total fund balance 8,221,750 (1,434,668) 6,787,082 8,085,636 Total liabilities and fund balance $8,269,014 $458,171 $8,727,185 $8,709,554 115 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, 1998 With comparative totals for year ended December 31, 1997 Capital Special Totals - Improvements Assessments 1998 1997 Revenues: Taxes: Current ad valorem taxes $72,663 $ - $72,663 $71,155 Delinquent ad valorem taxes 67 - 67 419 Special assessments 2,189 17,790 19,979 12,866 Total taxes 74,919 17,790 92,709 84,440 Intergovernmental revenue: State credits 15,000 - 15,000 15,000 State aid for construction 1,361,428 - 1,361,428 1,351,505 Other 309,335 15,393 324,728 76,739 Total intergovernmental revenue 1,685,763 15,393 1,701,156 1,443,244 Investment income 378,115 7,449 385,564 409,846 Miscellaneous revenue: Donations - - - 1,300 Other 21,673 30,738 52,411 59,117 Total miscellaneous revenue 21,673 30,738 52,411 60,417 Total revenues 2,160,470 71,370 2,231,840 1,997,947 116 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, 1998 With comparative totals for year ended December 31, 1997 Capital Special Totals Improvements Assessments 1998 1997 Expenditures: Current: Public works $41,166 $561,152 $602,318 $369,642 Debt service: - - Loan principal - - - 4,457 Interest - - - 7,844 Bond issuance costs - 750 750 - Capital outlay 847,913 2,079,413 2,927,326 2,911,615 Total expenditures 889,079 2,641,315 3,530,394 3,293,558 Excess (deficiency) of revenues over (under) expenditures 1,271,391 (2,569,945) (1,298,554) (1,295,611) )ther financing sources (uses): Operating transfers in (out): Storm Sewer Fund - - - 74,444 Special Assessment Debt Service Fund - - - 1,556,888 Capital Improvement Fund - 1,394,127 1,394,127 805,889 Special Assessments Capital Projects Fund (1,394,127) - (1,394,127) (805,889) Total other financing sources (uses) (1,394,127) 1,394,127 0 1,631,332 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses (122,736) (1,175,818) (1,298,554) 335,721 =und balance (deficit) -January 1 8,344,486 (258,850) 8,085,636 7,749,915 =und balance (deficit) - December 31 $8,221,750 ($1,434,668) $6,787,082 $8,085,636 117 Exhibit E-3 CITY OF FRIDLEY, MINNESOTA CAPITAL IMPROVEMENTS CAPITAL PROJECTS FUND COMPARATIVE BALANCE SHEET December 31, 1998 and 1997 Totals Assets 1998 1997 Cash and investments $6,892,767 $7,896,569 Receivables: — Account 4,186 - Taxes: Unremitted 1,771 1,368 — Delinquent 2,830 2,703 Special assessments: Delinquent 101 105 — Deferred 7,448 9,088 Due from other funds 1,078,758 474,904 Due from other governments 281,153 Total assets $8,269,014 $8,384,737 Liabilities and Fund Balance Liabilities: Accounts payable $10,487 $5,226 Contracts payable 16,453 19,576 Deferred revenue 10,379 11,896 Due to other governments 9,945 3,553 Total liabilities 47,264 40,251 Fund balance: -- Reserved for encumbrances 1,208,913 693,871 Unreserved: Designated for fixed asset replacement 1,450,313 1,622,742 — Designated for park improvements 388,874 628,554 Designated for street improvements 5,173,650 5,399,319 Total fund balance 8,221,750 8,344,486 Total liabilities and fund balance $8,269,014 $8,384,737 11 b' 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, 1998 With comparative actual amounts for year ended December 31, 1997 - 1998 Variance Favorable 1997 - Budget Actual (Unfavorable) Actual Revenues: Taxes: - Current ad valorem taxes $70,550 $72,663 $2,113 $71,155 Delinquent ad valorem taxes - 67 67 419 Total taxes 70,550 72,730 2,180 71,574 Special assessments - 2,189 2,189 2,560 Intergovernmental revenue: - State credits 15,000 15,000 - 15,000 State aid for construction 1,361,428 1,361,428 - 667,733 Other 280,250 309,335 29,085 - -- Total intergovernmental revenue 1,656,678 1,685,763 29,085 682,733 Investment income 353,150 378,115 24,965 412,017 _ Miscellaneous revenue: Donations - - 1,300 Other 10,000 21,673 11,673 31,140 Total miscellaneous revenue 10,000 21,673 11,673 32,440 Total revenues 2,090,378 2,160,470 70,092 1,201,324 Expenditures: - Current: Public works 231,974 41,166 190,808 81,454 Capital outlay 1,239,678 847,913 391,765 1,989,693 - Total expenditures 1,471,652 889,079 582,573 2,071,147 Excess (deficiency) of revenues over (under) expenditures 618,726 1,271,391 652,665 (869,823) Other financing sources (uses): Operating transfers in (out): Storm Sewer Fund - - - (923) Special Assessment Debt Service Fund - - - 1,556,888 Special Assessment Capital Projects Fund (1,394,127) (1,394,127) - (805,889) Total other financing sources (uses) (1,394,127) (1,394,127) 0 750,076 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses ($775,401) (122,736) $652,665 (119,747) Fund balance -January 1 8,344,486 8,464,233 Fund balance - December 31 $8,221,750 $8,344,486 • 119 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, 1998 With comparative totals for December 31, 1997 Public Totals Assets Liquor Utilities 1998 1997 - Current assets: Cash and investments $1,585,744 $6,532,794 $8,118,538 $6,724,596 Restricted investments - 1,140,520 1,140,520 - "` Accounts receivable 29 1,772,998 1,773,027 1,745,127 Taxes receivable - 174 174 - Accrual interest receivable - 31,483 31,483 - - Special assessments t-e ,v-LA - 233,804 233,804 7,721 Due from other funds - 1,326 1,326 1,329 Due from other governments - 228,814 228,814 28,972 - Inventories, at cost 296,163 7,789 303,952 270,098 Prepaid items 12,731 237,761 250,492 276,806 Total current assets 1,894,667 10,187,463 12,082,130 9,054,649 Non-current assets: Long-term receivable: Metropolitan Council Environmental Services - 25,915 25,915 251,365 Special assessments - - - 367,197 Total noncurrent assets 0 25,915 25,915 618,562 - Property and equipment, at cost: Property and equipment 505,836 31,580,347 32,086,183 32,277,460 Less: accumulated depreciation (265,867) (10,859,007) (11,124,874) (11,121,107) Net property and equipment 239,969 20,721,340 20,961,309 21,156,353 Total assets $2,134,636 $30,934,718 $33,069,354 $30,829,564 Liabilities and Fund Equity Current liabilities: Accounts payable $206,631 $58,639 $265,270 $172,299 Contracts payable - - - 35,860 - Salaries payable 8,603 19,896 28,499 24,717 Due to other funds 87 32 119 87 Due to other governments - 9,171 9,171 170,434 - Accrued interest payable - 122,162 122,162 105,389 Bonds payable - current - 300,000 300,000 260,000 Total current liabilities 215,321 509,900 725,221 768,786 Long-term liabilities: Bonds payable - 5,302,919 5,302,919 4,431,283 Total long-term liabilities 0 5,302,919 5,302,919 4,431,283 - Fund equity: Contributed capital - 11,167,705 11,167,705 11,537,624 Retained earnings: Reserved for capital outlay - 2,567,000 2,567,000 2,301,000 Unreserved 1,919,315 11,387,194 13,306,509 11,790,871 Total fund equity 1,919,315 25,121,899 27,041,214 25,629,495 - Total liabilities and fund equity $2,134,636 $30,934,718 $33,069,354 $30,829,564 122 Exhibit F-2 _ CITY OF FRIDLEY, MINNESOTA ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Year Ended December 31, 1998 With comparative totals for year ended December 31, 1997 Public Totals Liquor Utilities 1998 1997 Sales and cost of sales: - Sales $3,219,049 $ - $3,219,049 $3,079,567 Cost of sales 2,555,072 - 2,555,072 2,440,954 Gross profit 663,977 0 663,977 638,613 Operating revenues: Water sales and sewer rents - 6,512,163 6,512,163 6,648,102 Other 3.6^76;,5..�_ 8,785 8,785 12,473 - Total operating revenues 0 6,520,948 6,520,948 6,660,575 Operating expenses: - Personal services 292,783 961,634 1,254,417 1,242,295 Supplies and other charges: Disposal charges - 2,086,475 2,086,475 3,195,340 Other 154,653 1,572,597 1,727,250 526,938 Depreciation 32,787 849,222 882,009 835,033 Total operating expenses 480,223 5,469,928 5,950,151 5,799,606 - Operating income 183,754 1,051,020 1,234,774 1,499,582 Non-operating revenues (expenses): 6'1'`-�,,,_, ix Intergovernmental revenue ■ k'NT ,,.- `-s S'�` - 124,441 124,441 - Investment income ,t :N, � 83,226 124,441 431,542 270,293 Debt service ��lyy y - (306,481) (306,481) (256,460) Special assessments - 68,943 68,943 76,274 - Other - - - 156 Total non-operating revenues (expenses) 83,226 235,219 318,445 90,263 - Income before operating transfers 266,980 1,286,239 1,553,219 1,589,845 Operating transfers in (out): General Fund (140,000) - (140,000) (150,367) Special Revenue Fund - (1,500) (1,500) - Capital Improvement Fund - - - 923 Total transfers in (out) (140,000) (1,500) (141,500) (149,444) Net income 126,980 1,284,739 1,411,719 1,440,401 Credit arising from transfer of depreciation on contributed capital - 369,919 369,919 369,920 Retained earnings -January 1 1,792,335 12,299,536 14,091,871 12,281,550 - Retained earnings - December 31 $1,919,315 $13,954,194 $15,873,509 $14,091,871 123 Exhibit F-3 CITY OF FRIDLEY, MINNESOTA ENTERPRISE FUNDS COMBINING STATEMENT OF CASH FLOWS Year Ended December 31, 1998 With comparative totals for year ended December 31, 1997 — Public Totals Liquor Utilities 1998 1997 — Cash flows from operating activities: Operating income $183,754 $1,051,020 $1,234,774 $1,499,582 Adjustments to reconcile operating income (loss) — to net cash flows from operating activities: Depreciation 32,787 849,222 882,009 835,033 Loss on sale of fixed assets 172 184,561 184,733 - Discount amortization - - - 694 — Change in assets and liabilities: Decrease (increase) in receivables 235 81,767 82,002 (539,257) Decrease (increase) in due from other funds - 3 3 (1,329) — Decrease (increase) in due from other governments - 25,608 25,608 (4,967) Decrease (increase) in inventories (32,163) (1,691) (33,854) (16,163) Decrease (increase) in prepaid items (7,325) 33,639 26,314 2,395 — Increase (decrease) in payables 62,379 (145,946) (83,567) (469,934) Intergovernmental revenue - - 124,441 124,441 - Other non-operating revenue - - - 156 — Net cash flows from operating activities 239,839 2,202,624 2,442,463 1,306,210 Cash flows from noncapital financing activitie — Operating transfers in (out) (140,000) (1,500) (141,500) (149,444) Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (91,479) (780,217) (871,696) (1,258,412) Proceeds from sale of revenue bond - 1,171,191 1,171,191 - Principal paid on revenue bonds - (260,000) (260,000) (120,000) — Interest and paying agent fees on revenue bonds - (306,481) (306,481) (256,460) Special assessment collections - 68,943 68,943 76,274 Net cash flows from capital and related financing activities (91,479) (106,564) (198,043) (1,558,598) Cash flows from investing activities: — Investment income 83,226 348,316 431,542 270,293 Net cash flows from investing activities 83,226 348,316 431,542 270,293 Net increase (decrease) in cash and cash equivalents 91,586 2,442,876 2,534,462 (131,539) Cash and cash equivalents -January 1 1,494,158 5,230,438 6,724,596 6,856,135 — Cash and cash equivalents - December 31 $1,585,744 $7,673,314 $9,259,058 $6,724,596 124 Exhibit F-4 CITY OF FRIDLEY, MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE BALANCE SHEET December 31, 1998 and 1997 Totals Assets 1998 1997 Current assets: — Cash and investments $1,585,744 $1,494,158 Accounts receivable 29 264 Inventories, at cost 296,163 264,000 Prepaid items 12,731 5,406 Total current assets 1,894,667 1,763,828 .,. Property and equipment, at cost: Land 151,946 66,961 Buildings 130,211 130,211 Improvements other than buildings 49,047 49,633 Machinery and equipment 79,556 197,719 Office equipment and furniture 95,076 - .� 505,836 444,524 Less: accumulated depreciation (265,867) (263,075) Net property and equipment 239,969 181,449 Total assets $2,134,636 $1,945,277 Liabilities and Fund Equity Current liabilities: Accounts payable $206,631 $145,321 Salaries payable 8,603 7,534 Due to other funds 87 87 Total current liabilities 215,321 152,942 Fund equity: q tY: Retained earnings - unreserved 1,919,315 1,792,335 Total liabilities and fund equity $2,134,636 $1,945,277 125 Exhibit F-5 CITY OF FRIDLEY, MINNESOTA — LIQUOR ENTERPRISE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Years ended December 31, 1998 and 1997 — Totals 1998 1997 Sales and cost of sales: Sales $3,219,049 $3,079,567 — Cost of sales 2,555,072 2,440,954 Gross profit 663,977 638,613 Operating expenses: Selling: Personal services 132,012 132,727 -, Supplies and other charges 24,658 13,862 Total selling expenses 156,670 146,589 — Administration and overhead: Personal services 160,771 150,544 Supplies and other charges 129,995 134,916 Depreciation 32,787 27,803 Total administration and overhead 323,553 313,263 Total operating expenses 480,223 459,852 Operating income 183,754 178,761 Non-operating revenues: Investment income 83,226 75,559 Total non-operating revenues 83,226 75,559 Income before operating transfers 266,980 254,320 Operating transfers in (out): General Fund (140,000) (75,000) Net income 126,980 179,320 Retained earnings -January 1 1,792,335 1,613,015 _ Retained earnings- December 31 $1,919,315 $1,792,335 126 Exhibit F-6 CITY OF FRIDLEY, MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31, 1998 and 1997 Totals . 1998 1997 Cash flows from operating activities: Operating income $183,754 $178,761 — Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation 32,787 27,803 — Loss on sale of fixed assets 172 - Changes in assets and liabilities: Decrease (increase) in receivables 235 (264) Decrease (increase) in inventories (32,163) (15,794) Decrease (increase) in prepaid items (7,325) 5,720 Increase (decrease) in payables 62,379 (10,029) a Net cash flows from operating activities 239,839 186,197 _ Cash flows from noncapital financing activities: Operating transfers in (out) (140,000) (75,000) Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (91,479) (30,521) Cash flows from investing activities: a Investment income 83,226 75,559 Net increase in cash and cash equivalents 91,586 156,235 Cash and cash equivalents -January 1 1,494,158 1,337,923 Cash and cash equivalents - December 31 $1,585,744 $1,494,158 a a 127 Exhibit F-7 Page 1 of 2 CITY OF FRIDLEY, MINNESOTA — PUBLIC UTILITIES ENTERPRISE FUND COMPARATIVE BALANCE SHEET December 31, 1998 and 1997 — Totals Assets 1998 1997 — Current assets: Cash and investments $6,532,794 $5,230,438 Restricted Investments 1,140,520 - Receivables: Accounts 1,772,998 1,744,622 Accrual interest 31,483 - Taxes 174 241 Special assessments 233,804 7,721 — Due from other funds 1,326 1,329 Due from other governments 228,814 28,972 Inventories, at cost 7,789 6,098 Prepaid items 237,761 271,400 Total current assets 10,187,463 7,290,821 Noncurrent assets: Long-term receivables: Metropolitan Council Environmental Services 25,915 251,365 Special assessments - 367,197 — Total noncurrent assets 25,915 618,562 Property and equipment, at cost: Land 154,531 154,531 Buildings 1,520,821 1,529,236 Improvements other than buildings 9,824,570 9,576,637 Machinery and equipment 2,027,044 2,530,963 Office equipment and furniture 11,811 Water and sewer lines 18,041,570 18,041,569 Total property and equipment 31,580,347 31,832,936 Less: accumulated depreciation 10,859,007 (10,858,032) Net property and equipment 20,721,340 20,974,904 _ Total assets $30,934,718 $28,884,287 128 Exhibit F-7 Page 2 of 2 CITY OF FRIDLEY, MINNESOTA PUBLIC UTILITIES ENTERPRISE FUND COMPARATIVE BALANCE SHEET December 31, 1998 and 1997 Totals Liabilities and Fund Equity 1998 1997 Current liabilities: • Accounts payable $58,639 $26,978 Contracts payable - 35,860 Salaries payable 19,896 17,183 Due to other funds 32 - Due to other governments 9,171 170,434 Accrued interest payable 122,162 105,389 Bonds payable-current 300,000 260,000 Total current liabilities 509,900 615,844 Long-term liabilities: Bonds payable 5,302,919 4,431,283 Total liabilities 5,812,819 5,047,127 Fund equity: Contributed capital 11,167,705 11,537,624 Retained earnings: Reserved for capital outlay 2,567,000 2,301,000 Unreserved 11,387,194 9,998,536 Total fund equity 25,121,899 23,837,160 Total liabilities and fund equity q y $30,934,718 $28,884,287 129 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, 1998 and 1997 Totals — 1998 1997 Operating revenues: Water sales and sewer rents $6,512,163 $6,648,102 Other 8,785 12,473 Total operating revenues 6,520,948 6,660,575 Operating expenses: Personal services 961,634 959,024 Supplies and other charges: - -- Disposal charges 2,086,475 3,195,340 Other 1,572,597 378,160 Depreciation: ., Purchased assets 479,302 437,310 Contributed assets 369,920 369,920 Total operating expenses 5,469,928 5,339,754 Operating income 1,051,020 1,320,821 Nonoperating revenues (expenses): Intergovernmental revenue 124,441 - Investment income 348,316 194,734 Debt service (306,481) (256,460) Special assessments 68,943 76,274 Other - 156 Total nonoperating revenues (expenses) 235,219 14,704 Income before operating transfers 1,286,239 1,335,525 Operating transfers in (out): General Fund - (75,367) Special Revenue Fund (1,500) - — Capital Improvement Fund - 923 Total transfers in (out) (1,500) (74,444) Net income 1,284,739 1,261,081 Credit arising from transfer of depreciation on contributed capital 369,919 369,920 Retained earnings-January 1 12,299,536 10,668,535 Retained earnings- December 31 $13,954,194 $12,299,536 130 Exhibit F-9 CITY OF FRIDLEY, MINNESOTA PUBLIC UTILITIES ENTERPRISE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31, 1998 and 1997 Totals 1998 1997 Cash flows from operating activities: Operating income $1,051,020 $1,320,821 - Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation 849,222 807,230 Discount amortization - 694 Loss on sale of fixed assets 184,561 - Change in assets and liabilities: Decrease (increase) in receivables 81,767 (538,993) Decrease (increase) in due from other funds 3 (1,329) Decrease (increase) in due from other governments 25,608 (4,967) Decrease (increase) in inventories (1,691) (369) Decrease (increase) in prepaid items 33,639 (3,325) Increase (decrease) in payables (145,946) (459,905) Intergovernmental revenue 124,441 - Other non-operating revenue - 156 Net cash flows from operating activities ,,�� 2,202,624 1,120,013 Cash flows from non-capital financing activitrs Operating transfers out (1,500) (74,444) Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (780,217) (1,227,891) - Proceeds from sale of revenue bonds 1,171,191 - Principal paid on revenue bonds (260,000) (120,000) Interest and paying agent fees paid on revenue bonds (306,481) (256,460) Special assessment collections 68,943 76,274 Net cash flows from capital and related financing activities (106,564) (1,528,077) - Cash flows from investing activities: Investment income 348,316 194,734 — Net increase (decrease) in cash and cash equivalents 2,442,876 (287,774) Cash and cash equivalents -January 1 5,230,438 5,518,212 Cash and cash equivalents - December 31 $7,673,314 $5,230,438 131 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, 1998 With comparative totals for December 31, 1997 — Employee Self Information Totals — Assets Benefits Insurance Systems 1998 1997 Current assets: — Cash and investments $1,099,748 $1,826,869 $898,180 $3,824,797 $3,796,275 Total current assets 1,099,748 1,826,869 898,180 3,824,797 3,796,275 Property and equipment, at cost: Property and equipment - - 573,892 573,892 1,128,413 Less: accumulated depreciation - - (405,418) (405,418) (825,864) _ Net property and equipment 0 0 168,474 168,474 302,549 Total assets $1,099,748 $1,826,869 $1,066,654 $3,993,271 $4,098,824 — Liabilities and Fund Equity Current liabilities: Accounts payable $5,806 $4,278 $9,679 $19,763 $4,913 Payroll deductions payable 62,959 - - 62,959 70,301 Compensated absences payable 842,050 - - 842,050 858,690 Total liabilities 910,815 4,278 9,679 924,772 933,904 Fund equity: Contributed capital - 1,000,000 844,830 1,844,830 1,870,619 Retained earnings: Reserved for employee benefits 188,933 - - 188,933 142,789 — Unreserved - 822,591 212,145 1,034,736 1,151,512 Total fund equity 188,933 1,822,591 1,056,975 3,068,499 3,164,920 Total liabilities and fund equity $1,099,748 $1,826,869 $1,066,654 $3,993,271 $4,098,824 134 Exhibit G-2 _ CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Year Ended December 31, 1998 With comparative totals for year ended December 31, 1997 Employee Self Information Totals Benefits Insurance Systems 1998 1997 Operating revenues: Charges for services $1,766 $ - $96,931 $98,697 $155,579 Total operating revenues 1,766 0 96,931 98,697 155,579 Operating expenses: Personal services 11,556 - - 11,556 15,527 Supplies and other charges 3,009 123,559 169,366 295,934 101,476 Depreciation - - 96,931 96,931 153,292 Total operating expenses 14,565 123,559 266,297 404,421 270,295 Operating income (loss) (12,799) (123,559) (169,366) (305,724) (114,716) Nonoperating revenues: Investment income 58,943 102,581 47,779 209,303 208,739 Net income (loss) 46,144 (20,978) (121,587) (96,421) 94,023 Credit arising from transfer of depreciation on contributed capital - - 25,789 25,789 33,773 Retained earnings -January 1 142,789 843,569 307,943 1,294,301 1,166,505 Retained earnings - December 31 $188,933 $822,591 $212,145 $1,223,669 $1,294,301 135 Exhibit G-3 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUNDS — COMBINING STATEMENT OF CASH FLOWS Year Ended December 31, 1998 With comparative totals for year ended December 31, 1997 _ Employee Self Information Totals Benefits Insurance Systems 1998 1997 Cash flows from operating activities: Operating income (loss) ($12,799) ($123,559) ($169,366) ($305,724) ($114,716) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: — Depreciation - - 96,931 96,931 153,292 Loss on sale of fixed assets - - 72,072 72,072 - Change in assets and liabilities: Increase (decrease) in accounts payable 5,541 3,774 5,536 14,851 (12,813) Increase (decrease) in compensated absences payable (16,640) - - (16,640) 7,727 Increase (decrease) in — payroll deductions payable (7,342) - (7,342) 328 Net cash flows from operating activities (31,240) (119,785) 5,173 (145,852) 33,818 — Cash flows from capital and related financing activities: Aquisition of fixed assets - - (34,929) (34,929) (170,436) — Cash flows from investing activities: Investment income 58,943 102,581 47,779 209,303 208,739 Net increase (decrease) in cash and cash equivalents 27,703 (17,204) 18,023 28,522 72,121 Cash and cash equivalents - January 1 1,072,045 1,844,073 880,157 3,796,275 3,724,154 Cash and cash equivalents- December 31 $1,099,748 $1,826,869 $898,180 $3,824,797 $3,796,275 — 136 Exhibit G-4 CITY OF FRIDLEY, MINNESOTA EMPLOYEE BENEFITS INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31, 1998 and 1997 Totals Assets 1998 1997 Cash and investments $1,099,748 $1,072,045 Total assets $1,099,748 $1,072,045 Liabilities and Fund Equity Current liabilities: Accounts payable $5,806 $265 -- Payroll deductions payable 62,959 70,301 Compensated absences payable 842,050 858,690 Total current liabilities 910,815 929,256 Fund equity: Retained earnings: Reserved for employee benefits 188,933 142,789 Total liabilities and fund equity $1,099,748 $1,072,045 137 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, 1998 and 1997 — Totals 1998 1997 Operating revenues: Charges for services $1,766 $2,287 — Operating expenses: General government: Personal services 11,556 15,527 Supplies and other charges 3,009 3,670 Total operating expenses 14,565 19,197 _ Operating income (loss) (12,799) (16,910) Nonoperating revenues: Investment income 58,943 56,415 Net income 46,144 39,505 Retained earnings -January 1 142,789 103,284 Retained earnings - December 31 $188,933 $142,789 138 Exhibit G-6 CITY OF FRIDLEY, MINNESOTA EMPLOYEE BENEFITS INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31, 1998 and 1997 Totals 1998 1997 Cash flows from operating activities: Operating income (loss) ($12,799) ($16,910) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Change in assets and liabilities: Increase (decrease) in accounts payable 5,541 (5) Increase (decrease) in compensated absences payable (16,640) 7,727 Increase (decrease) in payroll deductions payable (7,342) 328 Net cash flows from operating activities (31,240) (8,860) Cash flows from investing activities: Investment income 58,943 56,415 Net increase in cash and cash equivalents 27,703 47,555 Cash and cash equivalents -January 1 1,072,045 1,024,490 — Cash and cash equivalents - December 31 $1,099,748 $1,072,045 139 Exhibit G-7 CITY OF FRIDLEY, MINNESOTA SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31, 1998 and 1997 Totals Assets 1998 1997 Cash and investments $1,826,869 $1,844,073 Total assets $1,826,869 $1,844,073 Liabilities and Fund Equity Current liabilities: Accounts payable $4,278 $504 Fund equity: Contributed capital 1,000,000 1,000,000 Retained earnings: Unreserved 822,591 843,569 Total fund equity 1,822,591 1,843,569 Total liabilities and fund equity $1,826,869 $1,844,073 140 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, 1998 and 1997 Totals 1998 1997 — Operating revenues $ - $ - Operating expenses: Supplies and other charges 123,559 68,267 Total operating expense 123,559 68,267 Operating income (loss) (123,559) (68,267) Nonoperating revenues: Investment income 102,581 101,749 Net income (loss) (20,978) 33,482 Retained earnings -January 1 843,569 810,087 Retained earnings - December 31 $822,591 $843,569 141 Exhibit G-9 CITY OF FRIDLEY, MINNESOTA SELF INSURANCE INTERNAL SERVICE FUND — COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31, 1998 and 1997 Totals 1998 1997 — Cash flows from operating activities: Operating income (loss) ($123,559) ($68,267) Adjustments to reconcile operating income (loss) to net — cash flows from operating activities: Change in assets and liabilities: Increase (decrease) in accounts payable 3,774 (16,902) — Net cash flows from operating activities (119,785) (85,169) Cash flows from investing activities: Investment income 102,581 101,749 Net increase (decrease) in cash and cash equivalents (17,204) 16,580 Cash and cash equivalents -January 1 1,844,073 1,827,493 Cash and cash equivalents - December 31 $1,826,869 $1,844,073 142 Exhibit G-10 _ CITY OF FRIDLEY, MINNESOTA INFORMATION SYSTEMS INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31, 1998 and 1997 Totals Assets 1998 1997 Current assets: Cash and investments $898,180 $880,157 Property and equipment, at cost: Property and equipment 573,892 1,128,413 -- Less: accumulated depreciation (405,418) (825,864) Net property and equipment 168,474 302,549 — Total assets $1,066,654 $1,182,706 Liabilities and Fund Equity Current liabilities: Accounts payable $9,679 $4,144 Fund equity: Contributed capital 844,830 870,619 Retained earnings: Unreserved, undesignated 212,145 307,943 Total fund equity 1,056,975 1,178,562 Total liabilities and fund equity $1,066,654 $1,182,706 143 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, 1998 and 1997 — Totals 1998 1997 Operating revenues: Charges for services $96,931 $153,292 — Operating expenses: General government: -- Supplies and other charges 169,366 29,539 Depreciation 96,931 153,292 Total operating expenses 266,297 182,831 _ Operating income (loss) (169,366) (29,539) Nonoperating revenues: Investment income 47,779 50,575 Net income (loss) (121,587) 21,036 Credit arising from transfer of depreciation on contributed assets 25,789 33,773 Retained earnings -January 1 307,943 253,134 Retained earnings - December 31 $212,145 $307,943 — 144 Exhibit G-12 _ CITY OF FRIDLEY, MINNESOTA INFORMATION SYSTEMS INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31, 1998 and 1997 Totals 1998 1997 Cash flows from operating activities: Operating income ($169,366) ($29,539) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation 96,931 153,292 Loss on sale of assets 72,072 - Change in assets and liabilities: Increase (decrease) in accounts payable 5,536 4,094 Net cash flows from operating activities 5,173 127,847 Cash flows from capital and related financing activities: Acquisition of fixed assets (34,929) (170,436) Cash flows from investing activities: Investment income 47,779 50,575 Net increase in cash and cash equivalents 18,023 7,986 Cash and cash equivalents -January 1 880,157 872,171 — Cash and cash equivalents - December 31 $898,180 $880,157 14.5 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. 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, 1998 With comparative totals for December 31, 1997 Expendable Agency Totals - Assets Trust Funds 1998 1997 Cash and investments $31,005 $14,560 $45,565 $41,633 Receivables: Accounts - 3,021 3,021 2,657 Taxes: Unremitted - 217 217 84 Delinquent - 369 369 505 Total assets $31,005 $18,167 $49,172 $44,879 Liabilities and Fund Balance - Liabilities: Deposits payable $5,591 $ - $5,591 $8,060 Due to other governments - 17,798 17,798 13,171 Deferred revenue - 369 369 - Total liabilities 5,591 18,167 23,758 21,231 Fund balance: Unreserved, undesignated 25,414 - 25,414 23,648 Total fund balance 25,414 0 25,414 23,648 Total liabilities and fund balance $31,005 $18,167 $49,172 $44,879 .o. 148 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, 1998 and 1997 Totals 1998 1997 Revenues: Investment income $1,766 $1,842 Expenditures - - - Excess (deficiency) of revenues over expenditures 1,766 1,842 Fund balance-January 1 23,648 21,806 Fund balance- December 31 $25,414 $23,648 149 Exhibit H-3 CITY OF FRIDLEY, MINNESOTA ALL AGENCY FUNDS -` COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Year ended December 31, 1998 Balance Balance January 1 Additions Deletions December 31 r SIX CITIES WATERSHED AGENCY FUND Assets Cash and investments $7,499 $3,845 $ - $11,344 .--, Taxes receivable: Unremitted 84 133 - 217 Delinquent 505 - 136 369 _- Total assets $8,088 $3,978 $136 $11,930 Liabilities Due to other governments $7,583 $3,978 $ - $11,561 Deposits payable 505 - 505 - Deferred revenue - 369 - 369 - Total liabilities $8,088 $4,347 $505 $11,930 HOTEL/MOTEL TAX AGENCY FUND Assets Cash and investments $2,931 $285 $ - $3,216 Accounts receivable 2,657 364 - 3,021 Total assets $5,588 $649 $0 $6,237 Liabilities - Due to other governments $5,588 $649 $ - $6,237 Total liabilities $5,588 $649 $0 $6,237 Balance Balance `^ January 1 Additions Deletions December 31 TOTAL-ALL AGENCY FUNDS Assets - Cash and investments $10,430 $4,130 $ - $14,560 Receivables: Accounts 2,657 364 - 3,021 Taxes: Unremitted 84 133 - 217 Delinquent 505 - 136 369 Total assets $13,676 $4,627 $136 $18,167 Liabilities - Deposits payable $505 $ - $505 - Due to other governments 13,171 4,627 - 17,798 Deferred Revenue - 369 - 369 - Total liabilities $13,676 $4,996 $505 $18,167 150 GENERAL FIXED ASSET ACCOUNT GROUP The General Fixed Asset Account Group is set up to account for long-lived assets not accounted for in an enterprise, trust or internal service fund. Exhibit I-1 ri CITY OF FRIDLEY. MINNESOTA COMPARATIVE SCHEDULE OF GENERAL FIXED ASSETS 1 December 31. 1998 and 1997 f Totals 1998 1997 General fixed assets: I ! Land $2,449,646 $2,528,221 Buildings 6,933,651 6,598,683 rl Improvements other than building 21,605,446 19,272,288 Machinery and equipment 5,961,298 5,766,392 Total general fixed assets $36,950,041 $34,165,584 fl Investment in general fixed assets from: General obligation bonds $1,176,647 $1,176,647 /I Federal and state aid 4,963,947 2,710,683 General fund revenues D tf3 ' '3 11,646,838 11,431,481 Special revenue fund revenues I?� ` L 1,765,090 1,729,289 ri Special assessments 12,630,140 12,627,951 Private gifts 840,711 817,904 Other sources 3,926,668 3,671,629 fl Total investment in general fixed assets $36,950,041 $34,165,584 it n n n 11 r n n n 152 ± I Exhibit 1-2 CITY OF FRIDLEY, MINNESOTA - SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY Year ended December 31, 1998 General Fixed General Fixed - Assets Assets Function and Activity 1/1/98 Additions Deletions 12/31/98 -- General government: City manager $3,801 $ - $ - $3,801 Cable TV 87,129 10,185 - 97,314 Accounting 24,963 - 507 24,456 Elections 76,860 24,908 - 101,768 City clerk/records 71,870 809 - 72,679 Planning 56,123 - - 56,123 Municipal center 3,765,799 18,670 41,022 3,743,447 Total general government 4,086,545 54,572 41,529 4,099,588 Public safety: Public protection 795,349 97,184 71,019 821,514 Fire protection 2,410,200 24,876 40,067 2,395,009 Inspectional services 7,484 - - 7,484 Civil defense 133,254 10,836 33,564 110,526 Total public safety 3,346,287 132,896 144,650 3,334,533 Public works: Engineering 85,458 - 1,221 84,237 .. Street improvements 17,592,150 2,949,014 469,391 20,071,773 Traffic signal 298,085 - - 298,085 Parks 5,711,291 433,778 541,160 5,603,909 Total public works 23,686,984 3,382,792 1,011,772 26,058,004 Recreation/naturalist: Recreation 1,749,004 446,291 41,562 2,153,733 Naturalist 1,296,764 8,875 1,456 1,304,183 Total recreation/naturalist 3,045,768 455,166 43,018 3,457,916 Total general fixed assets $34,165,584 $4,025,426 $1,240,969 $36,950,041 153 Exhibit 1-3 CITY OF FRIDLEY, MINNESOTA SCHEDULE OF GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY December 31, 1998 Improvements Machinery Other Than and Function and Activity Total Land Buildings Buildings Equipment General government: -- City manager $3,801 $ - $ - $ - $3,801 Cable TV 97,314 - - - 97,314 Accounting 24,456 - - - 24,456 Elections 101,768 - - - 101,768 City clerk/records 72,679 - - - 72,679 Planning 56,123 - 557 16,535 39,031 Municipal center 3,743,447 17,496 2,846,100 55,007 824,844 Total general government 4,099,588 17,496 2,846,657 71,542 1,163,893 - Public safety: Public protection 821,514 - - 166,870 654,644 Fire protection 2,395,009 58,656 650,715 217,265 1,468,373 Inspectional services 7,484 - - - 7,484 Civil defense 110,526 - - 83,787 26,739 Total public safety 3,334,533 58,656 650,715 467,922 2,157,240 Public works: Engineering 84,237 - - - 84,237 Street improvements 20,071,773 161,235 373,000 18,274,460 1,263,078 .. Traffic signal 298,085 - - 298,085 - Parks 5,603,909 1,907,657 687,693 1,932,834 1,075,725 Total public works 26,058,004 2,068,892 1,060,693 20,505,379 2,423,040 Recreation/naturalist: Recreation 2,153,733 - 1,924,270 58,135 171,328 Naturalist 1,304,183 304,602 451,316 502,468 45,797 Total recreation/naturalist 3,457,916 304,602 2,375,586 560,603 217,125 Total fixed assets $36,950,041 $2,449,646 $6,933,651 $21,605,446 $5,961,298 154 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, 1998 and 1997 1998 1997 — Amount Available And To Be Provided For The Payment of General Lona-Term Debt Amount available in Debt Service Funds $9,681,268 $9,521,076 Amount to be provided by future taxes 5,368,732 5,653,924 Total available and to be provided $15,050,000 $15,175,000 General long-term debt payable: _ General long-term debt payable: General obligation special assessment improvement bonds $1,290,000 $1,510,000 General obligation tax increment refunding bonds 13,760,000 9,575,000 General obligation temporary tax increment bonds - 4,090,000 Total general long-term debt payable $15,050,000 $15,175,000 _.. 156 IMO STATISTICAL SECTION OM. 157 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(2) Naturalist Service Total 1989 $2,013,513 $3,030,507 $273,095 $2,222,203 $ - $628,397 $3,181,419 $11,349,134 1990 2,470,439 3,008,700 173,260 2,592,638 - 641,432 15,789,169 24,675,638 -- 1991 2,566,435 3,233,501 165,968 2,213,994 422,381 655,985 1,866,305 11,124,569 1992 2,857,536 3,320,123 172,664 2,306,970 378,690 702,421 1,884,325 11,622,729 1993 2,612,941 3,413,297 169,493 2,376,990 407,470 720,759 2,207,891 11,908,841 1994 3,206,942 3,552,812 180,104 2,473,128 462,615 780,242 3,495,789 14,151,632 1995 3,954,875 3,821,230 195,949 2,375,472 530,230 850,329 5,636,711 17,364,796 1996 (3) 2,145,143 3,863,105 185,917 2,306,088 535,496 759,457 1,102,010 10,897,216 1997 2,488,576 4,109,283 214,490 2,625,869 572,817 813,356 10,635,507 21,459,898 1998 2,585,116 4,098,048 205,481 2,826,537 648,839 902,161 5,141,866 16,408,048 (1)Includes General, Special Revenue, Capital Projects and Debt Service Funds and excludes capital outlay. (2>Prior to 1991, Community Development was included with Public Works. (3)Prior to 1996,the HRA was included as a blended component unit of the City. it 159 Table 2 CITY OF FRIDLEY, MINNESOTA GENERAL REVENUES BY SOURCE(1) LAST TEN FISCAL YEARS (UNAUDITED) General Property Taxes& Inter- — Fiscal Special Licenses governmental Charges For Miscellaneous Year Assessments & Permits Revenue Services Revenue Total 1989 $7,353,139 $477,192 $4,968,720 $158,663 $2,682,242 $15,639,956 1990 6,900,089 408,966 3,564,426 630,015 2,570,467 14,073,963 — 1991 7,301,508 425,023 3,445,972 784,962 3,031,408 14,988,873 — 1992 7,336,538 401,178 4,538,566 842,590 3,027,293 16,146,165 1993 7,521,395 410,135 4,417,835 928,736 3,619,903 16,898,004 — 1994 6,915,475 528,111 3,808,828 1,038,863 2,393,463 14,684,740 1995 6,966,331 554,182 4,003,592 1,015,048 2,547,453 15,086,606 1996 (2) 4,420,212 828,652 3,986,987 1,299,495 1,841,698 12,377,044 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 1,965,247 14,450,300 -- (')Includes General, Special Revenue, Capital Projects and Debt Service Funds. , ,rLV \3 �L 'c - (2)Prior to 1996, the HRA was included as a blended component unit of the City. 5\-°' � y�'r 4 l v - 160 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 Collectione)(2) Collected Taxes Collections Tax Levy Taxes 1989 $3,652,452 $3,574,837 97.87% $36,610 $3,611,447 0.9888 :1 $285,847 1990 4,512,647 4,393,986 97.37% 64,357 4,458,343 0.9880 :1 300,854 1991 4,751,465 4,620,032 97.23% 12,633 4,632,665 0.9750 :1 320,081 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 (')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 1998 and 1997 was$1,063,920 and$1,064,176, 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. 161 CITY OF FRIDLEY, MINNESOTA ESTIMATED MARKET VALUE AND TAXABLE VALUE OF ALL TAXABLE PROPERTY LAST TEN FISCAL YEARS (UNAUDITED) Fiscal year payable 1989 1990 1991 1992 Assessment year 1988(') 1989(1) 1990(1) 1991(1) Population, fiscal year 29,250 28,335 28,313 28,369 Real property: Estimated market value $941,136,600 $998,231,500 $1,002,812,900 $1,057,532,000 Taxable value: Homestead 11,864,707 6,858,848 7,009,982 6,763,333 Excess and nonhomestead 19,425,676 19,728,534 20,147,442 20,555,478 Less fiscal disparities contribution (4,351,931) (4,435,055) (4,853,513) (4,684,322) Less tax increment value (2,524,911) (2,368,717) (2,840,385) (3,073,122) ., Taxable value 24,413,541 19,783,610 19,463,526 19,561,367 Personal property: _, Estimated market value 26,452,800 27,116,700 27,606,700 22,917,200 Taxable value 1,385,766 1,369,388 1,115,388 1,087,658 Totals: Estimated market value 967,589,400 1,025,348,200 1,030,419,600 1,080,449,200 —" Taxable value 25,799,307 21,152,998 20,578,914 20,649,025 Per market value ratios: Taxable value .027:1 .021:1 .020:1 .019:1 Per capita valuations: Estimated market value $33,080 $36,187 $36,394 $38,086 Taxable value 882 747 727 728 Real property: _ Taxable value Fiscal disparities distribution $3,428,008 $3,817,118 $4,079,539 $3,753,494 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 1998. (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, 1997 upon which the 1998 levy was based was$27,113,323. 162 Table 4 1993 1994 1995 1996 1997 1998 1992') 1993(1) 1994(1) 1995(1) 1996(1) 1997(1) 28,287 28,104 28,204 28,267 28,419 28,335 $1,064,099,200 $1,068,474,200 $1,090,023,902 $1,120,412,065 $1,152,674,700 $1,274,348,500 6,980,161 7,008,373 7,374,709 7,784,740 8,199,059 8,307,553 — 19,609,068 19,250,219 19,253,892 19,554,250 20,139,316 18,039,448 (5,274,175) (5,000,902) (4,946,278) (4,974,987) (5,147,086) (4,685,134) (2,536,327) (2,581,487) (2,642,692) (2,692,879) (2,760,628) (2,638,263) 18,778,727 18,676,203 19,039,631 19,671,124 20,430,661 19,023,604 — 23,184,800 23,308,700 19,952,700 19,576,200 19,576,200 19,164,700 1,088,969 1,071,329 916,940 916,940 916,940 766,322 — 1,087,284,000 1,091,782,900 1,109,976,602 1,139,988,265 1,172,250,900 1,293,513,200 19,867,696 19,747,532 19,956,571 20,588,064 21,347,601 19,789,926 .018:1 .018:1 .018:1 .018:1 .018:1 .015:1 $38,438 $38,848 $39,355 $40,329 $41,249 $45,651 702 703 708 728 751 698 $3,463,663 $3,349,769 $2,827,323 $3,007,783 $3,222,432 $3,116,450 163 CITY OF FRIDLEY, MINNESOTA SIGNIFICANT MINNESOTA TAX POLICIES December 31, 1998 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 1998 Class Rates Residential Homestead First$75,000 1.00% Over$75,000 1.85% Commercial/Industrial First$150,000 2.70% Over$150,000 4.00% Rentals _ Apartments: 4+ units 2.90% Less than 4 units 2.10% Title II, MFHA, Sect. 8 2.00% — 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 1.2%for incomes below$1,000 up to 4% for incomes of$68,510. The maximum refund amount is $490. In 1989, the Minnesota Legislature also enacted a targeting property tax credit program. This program provides refunds to homestead property owners for part of their tax increase in excess of 12 percent, if the increase is at least $100. The refund is equal to 75 percent of the increase over 12 percent. The maximum refund is $1,000. 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 35 to 69 years old; and $50,000 on homes 70 years or older. Only improvements adding $1,000 or more of market value are eligible. This is effective for improvements made through January 2, 2003. 165 CITY OF FRIDLEY, MINNESOTA PROPERTY TAX 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(2) 1989 12.544% 51.384% 51.364% 55.193% 53.212% 1990 15.010% 47.893% 41.329% 43.158% 43.334% .-. 1991 15.854% 51.779% 53.249% 49.727% 49.867% 1992 15.474% 56.525% 61.847% 58.025% 49.798% 1993 15.390% 63.717% 68.142% 61.406% 58.922% 1994 16.005% 57.161% 69.161% 60.840% 53.355% 1995 16.098% 61.402% 77.730% 63.296% 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% Notes: -" (')Rate is expressed as a tax capacity rate. (2)Vocational/Technical District#916 is included in District No. 16. (3)Six Cities Watershed District is included with School District No. 11 beginning in 1985. (4)Rice Creek Watershed District is included with School District No. 13, 14 and 16. (5)Stoneyrook Creek Subwatershed is included with School District No. 11 and 14. - 166 Table 5 - Total School School School School Special District District District District County Districts No. 11(3'5) No. 13(4) No. 14(4'5) No. 16(2.4) 27.425% 4.679% 95.813% 95.908% 99.737% 97.756% 28.846% 4.399% 95.851% 89.554% 91.383% 92.498% 31.400% 4.767% 103.420% 105.226% 101.704% 101.844% 32.990% 5.119% 109.711% 115.388% 111.566% 103.339% 32.779% 5.668% 116.910% 122.707% 115.221% 114.723% 32.680% 5.452% 110.879% 123.277% 114.956% 108.899% 32.765% 6.022% 115.811% 132.593% 118.159% 113.801% 31.036% 6.122% 117.662% 113.880% 125.488% 121.656% 30.091% 6.044% 108.218% 137.656% 119.067% 114.551% - 30.618% 6.603% 107.400% 124.314% 125.225% 114.679% 167 Table 6 CITY OF FRIDLEY, MINNESOTA SPECIAL ASSESSMENT LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (UNAUDITED) Total Current Current Collections Delinquent Collections Outstanding Fiscal Assessments Assessments to Amount Assessments Total to Current Delinquent Year Due Collected Due Collected Collected Assessment Assessments 1989 $743,555 $706,442 95.01% $52,374 $758,816 102.05% $168,014 1990 604,960 577,064 95.39% 41,913 618,977 102.32% 151,658 1991 737,712 652,011 88.38% 28,616 680,627 92.26% 215,764 - 1992 636,842 573,413 90.04% 68,982 642,395 100.87% 126,221 1993 603,004 553,927 91.86% 68,367 622,294 103.20% 91,010 1994 581,591 536,450 92.24% 31,201 567,651 97.60% 118,994 1995 526,207 478,762 90.98% 8,123 486,885 92.53% 156,253 1996 483,347 461,929 95.57% 73,178 535,107 110.71% 104,909 - 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 r 169 CITY OF FRIDLEY, MINNESOTA HISTORY OF CERTIFIED TAX LEVIES AND TAX RATES LAST TEN FISCAL YEARS (UNAUDITED) 1989 1990 1991 Certified tax levies: General Fund $3,556,166 $4,421,519 $4,660,276 General Debt Service Funds - - - Capital Improvement Fund 87,689 87,689 87,689 Subtotal 3,643,855 4,509,208 4,747,965 Enterprise Fund - - - Agency Fund 8,597 3,439 3,500 Total $3,652,452 $4,512,647 $4,751,465 Tax Capacity Rate: General Fund 14.614% 12.192% 14.705% General Debt Service Funds 0.000% 0.000% 0.000% Capital Improvement Fund 0.378% 0.300% 0.290% Enterprise Fund 0.000% 0.000% 0.000% ., Subtotal 14.992% 12.492% 14.995% Agency Fund 0.066% 0.052% 0.015% — Total 15.058% 12.544% 15.010% 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 1998 and 1997 was $1,063,920 and 1,064,176, respectively. 170 Table 7 1992 1993 1994(1) 1995(1) 1996(1) 1997(1) 1998(1) $4,660,276 $4,535,276 $3,603,266 $3,592,295 $3,821,853 $3,806,950 $3,921,159 87,689 87,689 72,689 72,689 72,689 72,689 72,689 4,747,965 4,622,965 3,675,955 3,664,984 3,894,542 3,879,639 3,993,848 - - - - 8,900 8,900 3,500 3,500 2,710 2,702 3,087 3,073 7,822 - $4,751,465 $4,626,465 $3,678,665 $3,667,686 $3,897,629 $3,891,612 $4,010,570 15.548% 15.153% 15.076% 15.778% 16.258% 15.399% 16.807% 0.000% 0.000% 0.000% 0.000% 0.000% 0.000% 0.000% 0.284% 0.300% 0.314% 0.320% 0.307% 0.294% 0.312% 0.000% 0.000% 0.000% 0.000% 0.000% 0.625% 0.516% 15.832% 15.453% 15.390% 16.098% 16.565% 16.318% 17.635% 0.022% 0.021% 0.022% 0.022% 0.024% 0.023% 0.067% i 15.854% 15.474% 15.412% 16.120% 16.589% 16.341% 17.702% 171 Table 8 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 1989 29,250 $25,799,307 $30,060,000 $ - $30,060,000 $ - $ - $ - 1990 28,335 21,152,998 15,765,000 - 15,765,000 - - - 1991 28,313 20,578,914 17,715,000 - 17,715,000 - - - 1992 28,369 20,649,025 22,470,000 - 22,470,000 - - - — 1993 28,287 19,867,696 21,500,000 - 21,500,000 - - - 1994 28,104 19,747,532 19,600,000 - 19,600,000 - - - 1995 28,204 19,956,571 19,075,000 - 19,075,000 - - - 1996 28,267 20,588,064 20,100,000 - 20,100,000 - - - 1997 28,419 21,347,601 19,880,000 - 19,880,000 - - - 1998 28,335 19,789,926 20,675,000 - 20,675,000 - - - Notes: 11 The Minnesota Legislature enacted legislation in 1988 and 1989 which changed the method of computing property taxes. Those changes have been reflected in the computation of the taxable value for taxes payable in 1989-1998. 172 Table 9 _ CITY OF FRIDLEY, MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN December 31, 1998 (UNAUDITED) Market Value $1,293,513,200 (A)Debt Limit 2% of Market Value $25,870,264 Amount of Debt Applicable to Debt Limit: Total Debt $20,675,000 (B)Deductions: Tax Increment Redevelopment Bonds $13,760,000 Special Assessment Bonds 1,290,000 Revenue Bonds 5,625,000 20,675,000 Total Amount of Debt Applicable to Debt Limit Legal Debt Margin $25,870,264 Notes: (A)M.S.A. Section 475.53 (see following page) (B)M.S.A. Section 475.51 (see following page) 173 Table 10 CITY OF FRIDLEY, MINNESOTA COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT AND COMPARATIVE DEBT RATIOS December 31, 1998 (UNAUDITED) Net Percent of General Debt Debt Bonded — Gross Service Net Applicable Debt Governmental Unit Debt Funds Debt to City Per Capita Direct and overlapping debt: Direct debt: — City of Fridley $20,675,000 $8,428,970 $12,246,030 100.00% $12,246,030 Overlapping debt: School Districts: No. 11 132,218,490 44,813,739 87,404,751 1.60% 1,398,476 No. 14 18,215,000 984,714 17,230,286 100.00% 17,230,286 No. 16 31,165,000 2,009,102 29,155,898 36.80% 10,729,370 — Metro Council 618,608,599 125,129,811 493,478,788 1.19% 5,872,398 Anoka County 108,380,000 30,309,638 78,070,362 18.04% 14,083,893 Vocational/Technical District No. 916 17,425,000 658,825 16,766,175 2.21% 370,532 Overlapping debt 926,012,089 203,905,829 722,106,260 49,684,956 Total direct and overlapping debt $946,687,089 $212,334,799 $734,352,290 $61,930,986 174 Table 11 — CITY OF FRIDLEY, MINNESOTA RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT TO TOTAL GENERAL GOVERNMENT EXPENDITURES _ LAST TEN FISCAL YEARS (UNAUDITED) Ratio to Total Total Debt Service Fiscal Debt General to General Year Principal Interest Service Expenditures(') Expenditure — 1989 $1,640,500 $1,540,919 $3,181,419 $11,349,134 .2803:1 1990 14,720,000 1,069,169 15,789,169 24,675,638 .6399:1 — 1991 685,000 1,181,305 1,866,305 11,124,569 .1678:1 1992 715,000 1,169,325 1,884,325 11,662,729 .1616:1 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 Notes: (')Includes General, Special Revenue, Debt Service and Capital Projects and excludes capital outlay. - (2)Prior to 1996, the HRA was included as a blended component unit of the City. 175 Table 12 CITY OF FRIDLEY, MINNESOTA REVENUE BOND COVERAGE LAST TEN FISCAL YEARS (UNAUDITED) Net — Operating Revenue Direct Direct Available — Fiscal Operating Operating For Debt Debt Service Requirements Year Revenue(') Expenses(2) Service Principal Interest Total Coverage r.. 1989 $2,879,180 $3,134,235 ($255,055) $ - $ - $ $ 1990 3,049,658 3,213,227 (163,569) - - - - 1991 3,115,437 3,408,068 (292,631) - 148,449 148,449 - _, 1992 3,111,284 3,764,686 (653,402) - 131,761 131,761 - 1993 3,557,088 4,360,448 (803,360) 45,000 129,944 174,944 - 1994 3,985,612 4,534,059 (548,447) 80,000 127,301 207,301 - — 1995 4,476,900 5,283,552 (806,652) 85,000 142,943 227,943 - 1996 5,791,287 5,648,603 142,684 115,000 173,553 288,553 0.49 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 — Notes: — (1)Total operating revenue. (2)Total operating expenses including depreciation. — 176 Table 13 CITY OF FRIDLEY, MINNESOTA DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS (UNAUDITED) Annual Per Average Fiscal Capita Median School Unemployment Year Population(" Income) Ages4 Enrollment(3) Rate" 1989 29,250 $13,241 31.0 4,362 2.9% 1990 28,335 (2) 16,431 32.6 4,371 4.5% 1991 28,313 16,347 32.6 4,392 4.5% 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% Notes: (1)Estimated by Metropolitan Council. — (2)1990 Population Report- Bureau of the Census (3)Estimated -excludes Grace Parochial High School as it is not supported by property tax dollars. (4)1985 - 1989 and 1991 - 1994 amounts for Anoka County. — (5)Minnesota Department of Economic Security-Twin Cities Labor Market (6)1985 - 1989 Unemployment Rate as reported is area-wide for the County of Anoka rather than for the City of Fridley (')National Planning Data Corporation 177 Table 14 CITY OF FRIDLEY, MINNESOTA CONSTRUCTION AND PROPERTY VALUE — LAST TEN FISCAL YEARS (UNAUDITED) Commercial Construction Residential Construction Number Number Estimated Market Value Fiscal of of Taxable Non- Year Units Value Units Value Property Taxable) Total 1989 93 $30,529,963 301 $3,522,035 $967,589,400 $177,123,840 $1,144,713,240 1990 83 12,883,850 349 3,321,362 1,025,348,200 177,123,840 1,202,472,040 1991 75 11,946,068 360 2,525,711 1,030,419,600 177,123,840 1,207,543,440 1992 73 10,329,409 407 2,873,240 1,080,449,200 173,900,300 1,254,349,500 — 1993 69 6,778,632 474 3,536,547 1,087,284,000 177,929,400 1,265,213,400 1994 115 17,510,011 711 6,365,829 1,091,782,900 191,559,200 1,283,342,100 1995 116 18,280,651 608 7,618,320 1,109,976,602 185,043,100 1,295,019,702 1996 108 20,141,727 719 9,971,879 1,139,988,265 185,043,100 1,325,031,365 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 — Note: (')Non-taxable property is reevaluated by the city assessors every six years — 178 Table 15 CITY OF FRIDLEY. MINNESOTA — PRINCIPAL TAXPAYERS December 31. 1998 (UNAUDITED) — Fiscal Year 1998 Percent 1997* of Total Taxable Taxable Rank Taxpayer Type of Business Valuation Valuation 1 Dayton Hudson Target discount store,warehouse and office $29,652,600 2.60% 2 Medtronic, Inc. Electro-medical devices 25,527,500 2.24% 3 Cummins Power(Onan) Portable electric generators 13,125,000 1.15% 4 Burlington Northern Railroad Operating property 12,349,600 1.08% 5 Northwest Racquet&Swim Club Health and Tennis Club 10,750,000 0.94% 6 Retail Trust IV Wal-Mart/Sam's Club discount stores 10,032,200 0.88% 7 Maurice Fillister Georgetown apartments 9,948,400 0.87% 8 East River Road Business Center Business and retail complex 8,555,400 0.75% 9 Lamaur Cosmetics 8,240,000 0.72% 10 Shamrock Investments Murphy Warehouse 6,641,400 0.58% Total $134,822,100 11.83% • 179 Table 16 CITY OF FRIDLEY, MINNESOTA INSURANCE COVERAGE December 31, 1998 (UNAUDITED) All risk perils, 100% coinsurance: Buildings and contents: — Blanket, agreed amount endorsement, replacement cost coverage $28,175,433 Contractor's equipment 1,460,433 — Boiler and machinery 3,000,000 Municipal general liability: Each occurrence limit 750,000 Products/completed operations aggregate limit 750,000 Failure to supply annual aggregate limit 750,000 EMF annual aggregate limit 1,500,000 Fire Damage Limit 50,000 Medical expense limit each occurance 1,000 Medical expense aggregate limit 10,000 Limited pollution liability 750,000 .. Lead and asbestos liability limit 200,000 Land use regulation limit 1,000,000 — Automobile liability: Liability 750,000 Personal injury protection Statutory Uninsured/underinsured motorist 750,000 Comprehensive Actual cash value — Liquor liability: General total limit 2,000,000 Bodily injury: Each person 1,000,000 Each occurrence 1,000,000 Advertising injury each person 1,000,000 Products and completed work 2,000,000 Public employee faithful performance coverage 350,000 — Accident Plan for Volunteers Accidental death/permanent impairment 100,000 Weekly disability 400 "' Medical Benefit 1,000 Total limit of liability 500,000 Worker's compensation Statutory 180 Table 17 Page 1 of 3 CITY OF FRIDLEY, MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION December 31, 1998 (UNAUDITED) Date of Incorporation (Village Fridley) July 1, 1949 — Date of Adoption of City Charter September 10, 1957 effective September 25, 1957 Form of Government Council/Manager Fiscal year begins January 1 Area of City 11 square miles Bond rating (Moody's Investors Service, Incorporated) Aa-1 — Elections: Last election - State and Local General November 3, 1998 Registered voters 17,877 .... Number of votes cast 12,614 Percent (%) of registered voters voting 70.6% Population: 1950 - Federal Census 3,796 1960 - Federal Census 15,182 1965- Federal Census 24,789 1970- Federal Census 29,233 1980 - Federal Census 30,228 1990- Federal Census 28,335 1991 - Estimated by Metropolitan Council 28,313 1992 - Estimated by Metropolitan Council 28,369 1993 - Estimated by Metropolitan Council 28,287 1994- Estimated by Metropolitan Council 28,104 1995 - Estimated by Metropolitan Council 28,204 1996- Estimated by Metropolitan Council 28,267 1997- Estimated by Metropolitan Council 28,419 1998 - Estimated by Metropolitan Council 28,335 - Permanent Employees--As of December 31 1988 126 1989 126 1990 126 1991 137 1992 137 1993 135 1994 140 1995 136 1996 136 1997 136 1998 140 181 Table 17 Page 2 of 3 CITY OF FRIDLEY, MINNESOTA — MISCELLANEOUS STATISTICAL INFORMATION (CONTINUED) December 31, 1998 (UNAUDITED) — Fire protection: Number of stations 3 — Volunteer firefighters 33 Full-time firefighters 6 Fire rating Class 3 Police protection: Number of stations 1 — Number of sworn officers 36 Number of street lights 1,042 Number of traffic signal installations 35 Number of other special signal installations 2 Number of civil defense warning sirens 8 — Miles of streets and sidewalks (including State and County): City streets 126.09 Trunk highways 10.79 County roads 14.56 Sidewalks and bikeways 14.48 • Miles of sewer: Storm 43.56 — Sanitary 103.02 Miles of watermains 112.80 Municipal water system source City of Fridley Water Plant (13 wells) -- capacity of 15 million gallons per day Number of water connections December 31, 1998 8,140 Daily average consumption (gallons) 5.2 million gallons - Elevated stored capacity 3.5 million gallons Water storage reservoirs 3.0 million gallons Number of fire hydrants 1,080 — Municipal sewer system: Disposal --through Metropolitan Council Environmental Service -- Number of connections December 31, 1998 8,152 Average daily flow (includes infiltration/inflow) 6.17 million gallons 182 Table 17 _, Page 3 of 3 CITY OF FRIDLEY. MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION (CONTINUED) December 31. 1998 — (UNAUDITED) Parks and recreation areas: — Developed 420 Acres Undeveloped 262 Acres — Total 682 Acres City and — County Parks Schools Total Number of: — Hockey rinks 6 2 8 General skating rinks 14 2 11 Playgrounds 28 4 32 — Swimming beaches 1 0 1 Swimming pools 0 1 1 Picnic grounds 19 0 19 — Day camp sites 1 0 1 Baseball diamonds 4 5 9 Softball diamonds 21 3 24 — Outdoor basketball courts 20 4 24 Tennis courts 23 19 42 Horseshoe courts 16 0 16 Archery ranges 1 0 1 Permanent playground buildings 3 0 3 Permanent picnic shelters 15 0 15 -- Soccer/football fields 8 3 11 183 r. Table 18 CITY OF FRIDLEY, MINNESOTA GENERAL INFORMATION December 31, 1998 (UNAUDITED) Location-Transportation The City of Fridley, with a total land area of eleven square miles and an estimated population of 28,335, is located at the northern boundaries of Minneapolis and Columbia Heights, about eight miles from the Minneapolis central business district. Freight service is provided in the area by local and interstate truck lines and Burlington Northern Railroad. Commuter transportation is available through Metropolitan Transit Commission facilities. Highways serving Fridley include Interstate #694 (beltline around the metropolitan area) and State Highways. An International Airport, located approximately twenty-five miles south of Fridley, and private business aviation facilities located at the Anoka County and Crystal Airports, provide air transportation and are operated by the Metropolitan Airport Commission. Medical Facilities Medical facilities in Fridley include Health One Unity Hospital, a 275-bed hospital with an adjacent clinic (Unity Professional Building), Fridley Plaza Clinic, Fridley Convalescent Home, the Fridley Medical Center, and Lynwood Health Care Center. Education ■■ Fridley is served by four school districts, a major portion of the City is located within Fridley Independent School District No. 14. The Fridley School District operates two elementary schools, a junior high and senior high school, employing 155 certified peronnel in the education of about 2,600 students. Grace Parochial High School has an enrollment of approximately 1037. 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 924 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 4,000 headquarters Cummins Portable generators, electronic 1,365 equipment United Defense Systems Pumps and naval ordinance 1,300 Burlington Northern Railroad Railroad company 900 Minco Products Electronic devices 658 Kurt Manufacturing Machine parts 650 McGlynn's Bakery 502 Parsons Electric Electric contractor 470 - Unity Hospital Medical services 440 Target Stores, Warehouse Discount department store 376 184