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1997 CAFR ' ' COMPREHENSIVE ANNUAL 1 1 FINANCIAL REPORT , ,. , , ,,,,,lftliog ti,III.,Tirt,t1,,,,,,i,15,Ictr,,,,a,,,,illair.,...,,:„7,::..,, , e ,,Y +off 1 I 'I ek ??,n d #1'y C+ '1 1�HmI 1{� ti-11 tl)j"�'�fl fill;� � �f g4 a 1 a�"" �}} y.?y ,'';14'4f1'4ry 33i! ,1, n .ii ,,,,t,- A 3 Y 4'' 1;�,1�i1�4t 1 1. �3}{� 64/11 6F1 I;^ Iii t ai {tl 1r.-1$1*4t.� Ay''iffk i!@ ry I p 4'LCU11' AtA '+ 2 d 1pf1s^ta;4 �141 ,'4f'iii„:4',1" ile,i110.4.;,■:' i r � �`y+1wtila +V S1.,,,i :,'J' 1 s': alb its Jt4Ili� mf .1 CITY OF FRIDLEY .. : ' MINNESOTA. ' ' ' ' . ' , , , ,, . . , , , , , , 1. ■ FOR THE YEAR ENDED DECEMBER 31, 1997 - - CITY OF FRIDLEY, MINNESOTA — Comprehensive Annual Financial Report — December 31, 1997 Prepared by: Finance Department Richard D. Pribyl Finance Director CITY OF FRIDLEY. MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31. 1997 TABLE OF CONTENTS EXHIBIT PAGE INTRODUCTORY SECTION List of Elected and Appointed Officials 1 Organizational Structure 2 City Manager's Letter of Transmittal 5 Chief Executive Officer's Letter of Transmittal 7 Certificate of Achievement for Excellence in Financial Reporting 17 -- FINANCIAL SECTION Auditor's Opinion 21 General Purpose Financial Statements Combined Financial Statements-Overview 23 Combined Balance Sheet-All Fund Types and Account Groups and Discretely Presented Component Units A-1 24 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 28 Combined Statement of Revenues, Expenditures and Changes in Fund Balances- Budget and Actual -General, Special Revenue and Budgeted Capital Project Fund Types A-3 30 Combined Statement of Revenues, Expenditures and Changes in Retained Earnings -All Proprietary Fund Types A-4 32 Combined Statement of Cash Flows-All Proprietary Fund Types A-5 33 Notes to Financial Statements 35 Financial Statements of Individual Funds: General Fund: Comparative Balance Sheet B-1 64 Statement of Revenues, Expenditures and Changes in Fund Balance- "' Budget and Actual B-2 65 Schedule of Revenues and Other Financing Sources-Budget and Actual B-3 66 Schedule of Expenditures and Other Financing Uses-Budget and Actual B-4 68 CITY OF FRIDLEY. MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT _ YEAR ENDED DECEMBER 31, 1997 TABLE OF CONTENTS EXHIBIT PAGE Special Revenue Funds: Combining Balance Sheet C-1 72 Combining Statement of Revenues, Expenditures and Changes in Fund Balance C-2 74 Cable TV Fund: Comparative Balance Sheet C-3 76 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual C-4 77 — Grant Management Fund: Comparative Balance Sheet C-5 78 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual C-6 79 Solid Waste Abatement Fund: Comparative Balance Sheet C-7 80 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual C-8 81 HRA Reimbursement Fund: Comparative Balance Sheet C-9 82 r. Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual C-10 83 — Drug and Gambling Forfeiture Fund: Comparative Balance Sheet C-11 84 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual C-12 85 Housing Revitalization Special Revenue Fund: Balance Sheet C-13 86 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual C-14 87 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31. 1997 TABLE OF CONTENTS EXHIBIT PAGE Special Revenue Funds: (continued) Chemical Assessment Team: Balance Sheet C-15 88 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual C-16 89 F. C. C. Donations Balance Sheet C-17 90 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual C-18 91 Debt Service Funds: Comparative Balance Sheet D-1 94 Statement of Revenues, Expenditures and Changes in Fund Balance D-2 95 Capital Projects Funds: Combining Balance Sheet E-1 99 Combining Statement of Revenues, Expenditures and Changes in Fund Balance E-2 100 Capital Improvements Fund: Comparative Balance Sheet E-3 102 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual E-4 103 Enterprise Funds: Combining Balance Sheet F-1 106 Combining Statement of Revenues, Expenditures and Changes in Retained Earnings F-2 107 Combining Statement of Cash Flows F-3 108 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT — YEAR ENDED DECEMBER 31. 1997 TABLE OF CONTENTS EXHIBIT PAGE Enterprise Funds: (continued) — Liquor Fund: Comparative Balance Sheet F-4 109 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings F-5 110 Comparative Statement of Cash Flows F-6 111 Public Utility Fund: Comparative Balance Sheet F-7 112 — Comparative Statement of Revenues, Expenses and Changes in Retained Earnings F-8 113 Comparative Statement of Cash Flows F-9 114 Internal Service Funds: Combining Balance Sheet G-1 116 Combining Statement of Revenues, Expenses and Changes in Retained Earnings G-2 117 Combining Statement of Cash Flows G-3 118 Employee Benefits Fund: Comparative Balance Sheet G-4 119 Comparative Statement of Revenues, Expenses and "' Changes in Retained Earnings G-5 120 Comparative Statement of Cash Flows G-6 121 — Self Insurance Fund: Comparative Balance Sheet G-7 122 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-8 123 Comparative Statement of Cash Flows G-9 124 ,.„ CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1997 TABLE OF CONTENTS EXHIBIT PAGE Information Systems Fund: Comparative Balance Sheet G-10 125 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-11 126 Comparative Statement of Cash Flows G-12 127 Trust and Agency Funds: Combining Balance Sheet H-1 130 Industrial Development Revenue Bond Trust Fund: Comparative Statement of Revenues, Expenditures and Changes in Fund Balance H-2 131 All Agency Funds: Combining Statement of Changes in Assets and Liabilities H-3 132 General Fixed Assets: Comparative Schedule of General Fixed Assets I-1 136 Schedule of Changes in General Fixed Assets-By Function and Activity 1-2 137 Schedule of General Fixed Assets-By Function and Activity 1-3 138 General Long-Term Debt: Comparative Schedule of General Long-Term Debt J-1 140 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1997 TABLE OF CONTENTS EXHIBIT PAGE STATISTICAL SECTION General Governmental Expenditures by Function - Last Ten Fiscal Years 1 143 General Revenues by Source- Last Ten Fiscal Years 2 144 Certified Property Tax Levies and Collections-Last Ten Fiscal Years 3 145 Estimated Market Value and Taxable Value of All Taxable Property- Last Ten Fiscal Years 4 146 Significant Minnesota Tax Policies 149 Property Tax Rates-All Overlapping Governments-Last Ten Fiscal Years 5 150 Special Assessment Levies and Collections- Last Ten Fiscal Years 6 153 History of Certified Tax Levies and Tax Rates-Last Ten Fiscal Years 7 154 Ratio of Net General Bonded Debt to Taxable Value and Net Bonded Debt Per Capital-Last Ten Fiscal Years 8 156 — Computation of Legal Debt Margin 9 157 Computation of Direct and Overlapping Bonded Debt and Comparative .. Debt Ratios 10 159 Ratio of Annual Debt Service Expenditures for General Bonded Debt to — Total General Government Expenditures-Last Ten Fiscal Years 11 160 Revenue Bond Coverage- Last Ten Fiscal Years 12 161 — Demographic Statistics- Last Ten Fiscal Years 13 162 Construction, Bank Deposits and Property Value- Last Ten Fiscal Years 14 163 Principal Taxpayers 15 164 Insurance Coverage 16 165 Miscellaneous Statistical Information 17 167 General Information 18 170 a INTRODUCTORY SECTION .. a a a a ■ 1 CITY OF FRIDLEY. MINNESOTA -' ELECTED AND APPOINTED OFFICIALS DECEMBER 31. 1997 — ELECTED OFFICIALS — Term of Office Expires December — Mayor Nancy J.Jorgenson 2000 Councilmember At Large Robert L. Bamette 2000 Councilmember,Ward I Steven E. Billings 1998 -. Councilmember,Ward II Dennis L. Schneider 1998 Councilmember,Ward Ill Ann R. Bolkcom 1998 APPOINTED OFFICIALS City Manager William W. Burns City Attorney Frederick W. Knaak Prosecuting Attorney Carl J. Newquist Treasurer Richard D. Pribyl City Clerk William A. Champa Department Heads: Director of Finance Richard D. Pribyl — Director of Public Safety and Civil Defense Director 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 1• CITY ADMINISTRATIVE ORGANIZATIONAL STRUCTURE 1996 — Total Authorized Postions(136) — CITY MANAGER(5) City Manager — Assistant to City Manager Human Resources/Public Information Technician Secretary to the City Manager — Personnel Secretary FINANCE (22) POLICE(48) FIRE (7) J — Finance Director-Treasurer Public Safety Director- fire Chief Secretary Emergency Mgmt Director Secretary — Staff Accountant Secretary Dep Fire Chief Accountant Dep Pub Safety Dir (4) Firefighter Lieutenant — ACCOUNTING (7) (5)Sergeant Assistant Finance Director (2)Corporal Accounting Specialist (21)Patrol Officer — Utility Billing Clerk Pub Sfty Projects Coor General Accountant Crime Prey Spec Acctg-Data Processing Clerk Office Supervisor — Acctg-Data Processing Clerk (2)Senior Office Asst Acctg-Data Processing Clerk (4)Office Asst Outreach Coordinator ASSESSING (2) CSO Coordinator Assessor (2) Investigators Appraiser (2)Problem Response Team ..., School Resource Officer MIS (2) MIS Technician — MIS Specialist CITY CLERK- RECORDS(2) _ City Clerk Receptionist-License Clerk — LIQUOR(5) Liquor Operations Manager _ (2) Liquor Store Manager Asst Liquor Store Manager Liquor Store Clerk 2 CITY ADMINISTRATIVE ORGANIZATIONAL STRUCTURE 1997 Total Authorized Postions(136) ^ CITY MANAGER(5) City Manager Assistant to City Manager Human Resources/Public Information Technician Secretary to the City Manager Personnel Secretary ... PUBLIC WORKS (37) RECREATION & COMMUNITY NATURALIST(8) DEVELOPMENT(9) Director of Public Works _ Secretary Director of Recreation & Director of Community Open Analyst Natural Resources Development Secretary Secretary ENGINEERING (4) Sr. Citizen Prog. Coordinator Assistant Public Works Director Engineering Tech NATURALIST(3) BUILDING INSPECTION (2) Engineering Tech Inspector Natural Res. Coordinator Chief Building Official GIS Technician Interpretive Specialist Secretary Receptionist/Clerk Typist PW MAINTENANCE (30) PLANNING (5) Superintendant RECREATION (2) Planning Coordinator Secretary Program Supervisor (3) Planning Assistant Street Foreman Program Specialist (1) Secretary (2) PSW-D (3) Mechanic, Level B (2) PSW-C ^ PSW-B (3) PSW-A Water Supervisor (3) PSW-D PSW-B Sewer Supervisor (3) PSW-D PSW-B Park Supervisor (2) PSW-D PSW-C (2) PSW-B 3 1 CITY OF FRIDLEY - FRIDLEY MUNICIPAL CENTER•6431 UNIVERSITY AVE.N.E. FRIDLEY,MN 55432•(612)571-3450•FAX(612)571-1287 June 26, 1998 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, 1997. The Report includes an excellent and comprehensive letter from Richard D. Pribyl, Director of Finance and Susan Lemieux, 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. Bums City Manager 5 171J CI Y OF FRI DLEY FRIDLEY MUNICIPAL CENTER•6431 UNIVERSITY AVE.N.E. FRIDLEY,MN 55432•(612)571-3450•FAX(612)571-1287 June 26, 1998 Dr.William W. Bums,City Manager Mayor Nancy Jorgenson and Council Members Fridley, Minnesota 55432 Dear Dr. Bums, Mayor Jorgenson and Council Members: The Comprehensive Annual Financial Report of the City of Fridley, Minnesota,for the fiscal year ending December 31, 1997,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 1996. It is our belief that the accompanying fiscal year 1997 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. 7 CITY OF FRIDLEY,MINNESOTA Oft 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 induded. The City's financial statements include all funds and account groups. Services provided by the City include police and fire protection;water and sanitary sewer utilities;the construction and maintenance of streets and infrastructure; recreational activities and cultural events. In addition to general government activities, the activities of the Fridley Housing and Redevelopment Authority (HRA) have been included since they serve the entire City and the City Council has the ability to control the actions of the HRA. However, the Fridley School Districts, the Fridley Police Relief Association and the Fridley Volunteer Firefighters Relief Association have not met the established criteria for inclusion in the reporting entity, and accordingly are excluded from this report. GENERAL INFORMATION BACKGROUND AND LOCATION The City of Fridley is an older metropolitan community with an estimated 1997 population of 28,419. 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 3.2% 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 new construction and redevelopment within the City's industrial and commercial areas. In 1997, the City issued building permits valued at over $38 million,the highest amount in the City's 48-year history. About 37%of this volume was the result of new development or business expansion. Also, the Senior High, Junior High, Woodcrest Elementary, and Totino Grace High Schools completed major remodeling projects for a permit value of$7,500,000. Five new industrial projects started, totaling 238,386 square feet with permit.values totaling $5,326,914. In addition seven companies expanded their industries resulting in 65,744 additional square feet and totaling $1,538,578 in permit values. Commercial projects included a new 37,987 square foot "' Bachman's Retail facility with a permit value of$1,538,000. Two major retailers in Fridley, Sam's Club and Menards, expanded their facilities for a total value of$2,780,000. MAJOR INITIATIVES During 1997, 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, 69 loans were dosed, totaling $745,000. In addition, 3 remodeling loans totaling $18,000 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. 9 CITY OF FRIDLEY,MINNESOTA GENERAL INFORMATION(CONTINUED) 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 three successful remodeling fairs and — hired a part time"Remodeling Advisor"to assist homeowners with their remodeling ideas. In 1997, the Authority, with the help of the remodeling advisor, published a Remodeling Plan Book to encourage homeowners to remodel. 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. Rottlund Homes was selected as the developer and is currently building a combination of single family residences and townhomes on this fourteen-acre site. Construction has passed its half way development point. The project will provide 118 owner occupied units. Of the 118 units, 106 are either under construction or have been sold. The project is expected to be complete by the end of 1998. 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. While — • several potential sites were reviewed, no decision on a future home for the warehouse liquor store was made in 1997. The City took over the operation of the Recycling Center on January 1, 1997. The Recycling Center provides a "drop off' service for Anoka County and north area metro residents and businesses for all types of recyclable materials. Customer service surveys reveal high marks for site cleanliness and friendly staff. The City is now accepting appliances and fluorescent lights for a small fee. Scrap metal drop off was also added to the site. During 1997, the City of Fridley had its highest building permit volume in the City's history, surpassing the 1996 amount by$1,711,111 ($38,747,784 vs. $37,036,673). This construction boom was a result of the continuation of major new residential construction at the Southwest Quadrant of University and Mississippi Street. The City completed a joint project with School District 14 to construct a new ... gymnasium at Hayes Elementary School and constructed a new addition to the Fridley Community Center. During the year, a number of other City projects were completed such as rewiring the City Hall with new data cable to enable the City to improve it's communication both within the City offices and with others, resurfacing a number of tennis courts,upgrading old playground equipment with newer and safer equipment, building the Central Avenue bike path, relining a portion of the City's sanitary sewer system, and the regular maintenance and upgrading of the City's wells. In addition, the City finalized the construction of a Filtration System attached to the City's Well No. 12 to provide additional filtered water. Internally, the 1998 budget work sessions were relatively free from major budgetary issues. While the City is still operating within the context of financial constraints, the gap between revenues and expenditures that was present in the 1997 budget process was not as marked in the 1998 budget process. Much of the discussion at the work sessions focused on the need for housing revitalization in various areas of the City. The budget sessions ended with no increase in property taxes and the planned use of $276,807 of reserves resulting in a balanced 1998 budget that Council adopted in December. We were also honored to receive the Distinguished Budget Presentation Award for our 1997 Budget. — This represented the seventh consecutive year in which the City has received this award. 10 CITY OF FRIDLEY,MINNESOTA GENERAL INFORMATION(CONTINUED) 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. During 1997, the review of potential sites for a new liquor store continued. The City continued the search for a new location during 1997 with no success. It appears the Holly Center site will continue to be the center of the operation for the near future. Relocating the store to a larger more permanent location is important, but will be a long-term goal of the Liquor operation. Implementation of an imaging system continued during 1997. This project will increase the availability of data and the efficiency in which City staff can access it and respond to resident's requests. Development is slated to begin in 1998 on the Fridley Executive Center Site located at the northwest corner of 1-694 and T.H. 65. Phase I construction will entail a 106,000 square foot, one story office/technology space valued at over$6,000,000. Future phases will indude 250,000 square feet of multi-story office space, plus a hotel,restaurant,and other commercial services. The developer is Duke Realty Investments, Inc. Significant projects budgeted for 1998 in the five year capital improvement plan indude:The joint project -- with the County for upgrading 57th Avenue and improving the 1-694 and T.H. 65 intersection; upgrading playground equipment by replacing the old equipment with new safer and accessible equipment; street reconstruction including concrete curb and gutter with new asphalt pavement on a number of City streets; Rice Creek bank stabilization; 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. 11 CITY OF FRIDLEY,MINNESOTA FINANCIAL INFORMATION(CONTINUED) BUDGETARY CONTROLS A complete budgetary system of accounts is maintained for the General and Special Revenue Funds. Budgetary control is maintained in compliance with the City Charter Requirements. The Charter provides that it is the duty of the City Manager to strictly enforce the provisions of the budget. The management policy of the City is such that the existence of a particular item or appropriation in the .- approved budget does not mean that it will or must be automatically expended. It is the policy of the City to control budgets at the expenditure category level. Budget adjustments between City divisions are made upon the approval of a resolution by the City Council. The City Charter provides that the City Council shall not have power to increase the total amount of the budget, whether by insertion of new items or otherwise, beyond the estimated revenue unless the actual revenue exceeds such revenue estimates, and in that event not beyond such actual revenue. There is a constant review process. Expenditures are not approved until it has been determined that 1) the expenditure is necessary, 2) adequate funds have been appropriated,and 3)funds are available. CASH MANAGEMENT All temporary cash surpluses during the year are invested in various securities which State statutes permit. The City's policy is to invest all available monies at competitive interest rates in accordance with the City's over-all fiscal plan coordinated with operating needs and programs projected over the ensuing 12 month period. Investment yields on investments held during the year ranged from 4.85%to 9.798%. 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, 1997 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 $19,880,000. Of this outstanding debt, $1,510,000 represents special assessment debt with government commitment, $13,665,000 represents general obligation tax increment refunding bonds, $4,705,000 represents general obligation water, sewer and storm water revenue bonds. The City of Fridley has,since 1982, maintained a credit rating of a Aa1 on its long-term bonds. FISCAL DISPARITIES The commonly referred to"Fiscal Disparity Law"was adopted by the Legislature in 1971. The area of the fiscal disparity district encompasses all the properties located within the seven-county metropolitan area. The law provides that 40% of all new commerciaUndustrial 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. 12 CITY OF FRIDLEY,MINNESOTA r 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, 1997. The most significant changes in revenues from the prior year were decreases in taxes and special assessments and increases in intergovernmental and miscellaneous revenue. Taxes decreased by $37,393 mainly due to a decrease in the collection of delinquent taxes and special assessment revenue decreased by $70,814 due to less improvement projects being certified in 1997 than in 1996. Intergovernmental revenue increased by$1,423,071 due to an increase in Municipal State Aid for Street Projects as well as Federal Disaster Aid received by the City and various grants applied for and received by the Police Department. The miscellaneous revenue increase shown was due primarily to donations received for improvements to the Fridley Community Center in the amount of$187,732. Percent of Increase/ Revenues Amount Total (Decrease Taxes and special assessments $4,312,005 30.79% ($108,207) Licenses and permits 792,622 5.66% (36,030) Intergovernmental 5,410,058 38.63% 1,423,071 Charges for services 1,313,705 9.38% 14,210 Fines and forfeits 186,631 1.33% 10,571 Interest on investments 1,448,366 10.34% 73,554 Miscellaneous 541,546 3.87% 250,720 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, 1997. The most significant change in expenditures is in the general government, public safety, public works, debt service and capital outlay categories. The increase in general government is due to the City operating the Recycling Center and providing additional services in areas reimbursed by grant revenue. public safety expenditures show an increase due to a union contract settlement in 1997 that resulted in backpay being paid out in 1997 for the prior year. The City refunded a bond issue in 1997 resulting in a large increase in debt service expenditures, but which will result in significant interest savings for the City over the life of the bond. The increase in capital outlay is due to an increase in the City infrastructure improvements in 1997. Percent of Increase/ Expenditures Amount Total (Decrease Current: General $2,488,576 9.96% $343,433 Public safety 4,109,283 16.44% 246,178 Municipal center 214,490 0.86% 28,573 Public works 2,625,869 10.51% 319,781 Community development 572,817 2.29% 37,321 Recreation and naturalist 813,356 3.26% 53,899 Debt Service 10,635,507 42.57% 9,533,497 Capital outlay 3,524,212 14.11% 1,444,473 Ina 13 CITY OF FRIDLEY,MINNESOTA FINANCIAL INFORMATION(CONTINUEDI 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. 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 dose 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 $1,792,335 on December 31, 1997 as compared to$1,613,015 at the dosing of the last fiscal year. Income before operating transfers increased from $209,834 in 1996 to $254,320 in 1997. This increase is primarily due to a reduction in operating costs from 1996 to 1997. 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 $50,864 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, 1997 were $12,299,537 compared to$10,668,535 at the close of the last fiscal year. RISK MANAGEMENT The Self Insurance Fund was set up to account for all revenues and expenditures associated with the $50,000 deductible on the general liability policy. Self insuring a larger deductible has reduced the annual premiums which allow us to directly benefit from our good experience rating. In the future an analysis will be made of 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. 14 CITY OF FRIDLEY,MINNESOTA 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. INDEPENDENT AUDIT Section 7.13 of the City Charter requires an annual audit to be made of the books of account, financial records and transactions of all administrative departments of the City by a certified public accountant or the State Auditor's Department of the State of Minnesota. This requirement has been complied with and the opinion of HLB Tautges Redpath,Ltd. is included in this report. CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Fridley, Minnesota, for its comprehensive annual financial report for the fiscal year ended December 31, 1996. 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. 15 CITY OF FRIDLEY,MINNESOTA OTHER INFORMATION(CONTINUED) ACKNOWLEDGMENTS The preparation of this report on a timely basis could not have been accomplished without the efficient and dedicated services of all members of the Finance Department, with special recognition to Craig Ellestad 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, PLat-t-1). Richard D. Pribyl Susan Lemieux Finance Director Assistant Finance Director 16 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, 1996 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. •ACE OFFj�. C4 a t Aul-at r Q OF 4f =TED STATES AM q WW1 tram uni President s yo Scar �-. amass Executive Director 17 Oft FINANCIAL SECTION OWN plan maw MilMn 19 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 fmancial statements of the City of Fridley,Minnesota,as of and for the year ended December 31, 1997,as listed in the table of contents. These general purpose fmancial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these general purpose fmancial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose fmancial statements are free of material misstatement. An audit includes examining,on a test basis,evidence supporting the amounts and disclosures in the general purpose fmancial statements. An audit also includes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall general purpose fmancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion,the general purpose fmancial statements referred to above present fairly,in all material respects,the fmancial position of the City of Fridley,Minnesota,as of December 31, 1997,and the results of its operations and the cash flows of its proprietary fund types for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards,we have also issued a report dated June 12, 1998 on our consideration of the City of Fridley's internal control over financial reporting and on its compliance with certain provisions of laws and regulations. Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The combining and individual fund and account group financial statements,supporting schedules and statistical information listed in the table of contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the City of Fridley,Minnesota. Such information, 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 presented in all material respects in relation to the general purpose fmancial statements taken as a whole. Im• June 12, 1998 HLB TAUTGES REDPATH,L D. Certified Public Accountants 4810 White Bear Parkway, White Bear Lake, Minnesota 55110, USA Telephone: 612 426 7000 Fax: 612 426 5004 HLB HLB Tautges Redpath,Ltd.is a member of International. A world-wide organization of accounting firms and business advisers. 21 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 CITY OF FRIDLEY.MINNESOTA COMBINED BALANCE SHEET-ALL FUND TYPES AND ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNITS December 31.1997 Governmental Fund Types Proprietary Fund Types Special Debt Capital Internal General Revenue Service Projects Enterprise Service Assets Cash and investments $6,785,988 $224,224 $8,005,404 $8,057,697 $6,724,596 $3,796,275 Receivables: Accounts 57,529 57,402 - - 1,745,127 - Taxes 191,249 - - 4,071 - - Special assessments 3,442 - 1,641,185 79,542 7,721 - ., Mortgage - - - - - - Interest 360,832 - - - - - Loan 6,300 - - - - - Loan from HRA - - 1,465,834 - - - Developer note 111,346 - - - - - Due from other funds 170,580 - 48,179 474,904 1,329 - Due from HRA - - - - - - Due from other govemments 64,515 165,451 - 93,340 28,972 - Inventories,at cost 34,222 - - - 270,098 - Prepaid items - - - - 276,806 - Long term receivable - - - - 618,562 - —, Other assets - - - - - - Property and equipment (Net of depreciation) - - - - 21,156,353 302,549 Amount available in debt service fund - - - - - - Amount to be provided for retirement of general long term debt - - - - - - Total Assets $7,786,003 $447,077 $11,160,602 $8,709,554 $30,829,564 $4,098,824 See Accompany Notes to Financial Statements — 24 Exhibit A-1 Page 1 of 2 Fiduciary Fund Types Account Groups Totals Primary Government Component Totals Reporting Entity Trust and General General Long (Memorandum Only) Unit (Memorandum Only) - Agency Fixed Assets Term Debt 1997 1996 HRA 1997 1996 _ $41,633 $ - $ - $33,635,817 $36,272,668 $8,914,456 $42,550,273 $42,640,754 2,657 - - 1,862,715 1,659,342 42,627 1,905,342 1,674,225 589 - - 195,909 116,513 95,231 291,140 257,364 - - - 1,731,890 1,994,859 - 1,731,890 1,994,859 - - - - - 2,842,706 2,842,706 2,662,215 - - - 360,832 291,893 40,562 401,394 338,531 - - - 6,300 6,300 - 6,300 6,300 "" - - - 1,465,834 - - 1,465,834 - - - - 111,346 116,460 - 111,346 116,460 - - - 694,992 976,912 - 694,992 976,912 - - - - 125 - - 125 - - - 352,278 202,631 - 352,278 202,631 - - - 304,320 278,839 - 304,320 278,839 - - - 276,806 279,201 - 276,806 279,201 - - - - 618,562 301,052 - 618,562 301,052 - - - - 6,058,906 - - 6,081,022 - 34,165,584 - 55,624,486 52,245,515 - 55,624,486 52,245,515 ._ - - 9,521,076 9,521,076 10,505,332 939,775 10,460,851 11,426,662 - - 5,653,924 5,653,924 4,889,415 (59,775) 5,594,149 5,233,085 $44,879 $34,165,584 $15,175,000 $112,417,087 $116,195,963 $12,815,582 $125,232,669 $126,715,752 "- See Accompany Notes to Financial Statements 25 CITY OF FRIDLEY.MINNESOTA ".. COMBINED BALANCE SHEET-ALL FUND TYPES AND ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNITS December 31, 1997 Governmental Fund Types Proprietary Fund Types Special Debt Capital Internal General Revenue Service Projects Enterprise Service Liabilities,fund equity and other credits Liabilities Accounts payable $163,836 $12,317 $ - $17,783 $172,299 $4,913 Deposits payable 16,303 10,226 - - - - Contracts payable - - - 45,434 35,860 - Salaries payable 253,665 10,997 - - 24,717 70,301 Compensated absences payable - - - - - 858,690 Deferred revenue 119,154 17,761 1,636,318 82,245 - - Due to other funds 1,165 218,837 - 474,903 87 - Due to City - - - - - - Due to other governments 21,235 50 3,208 3,553 170,434 - Bonds payable - - - - 4,691,283 - Loans payable - - - - - - Loan payable to City - - - - - - Other liabilities - - - - 105,389 - Total liabilities 575,358 270,188 1,639,526 623,918 5,200,069 933,904 Fund equity and other credits Contributed capital - - - - 11,537,624 1,870,619 Investment in general fixed assets - - - - - - Retained earnings: Reserved - - - - 2,301,000 142,789 . Unreserved - - - - 11,790,871 1,151,512 Fund balance: Reserved 168,175 - 2,223,420 693,871 - - Unreserved: Designated 6,649,200 247,451 - 7,650,615 - - Undesignated 393,270 (70,562) 7,297,656 (258,850) - - Total equity and other credits 7,210,645 176,889 9,521,076 8,085,636 25,629,495 3,164,920 Total liabilities,equity and other credits $7,786,003 $447,077 $11,160,602 $8,709,554 $30,829,564 $4,098,824 --• See Accompany Notes to Financial Statements --, 26 Exhibit A-1 Page 2 of 2 Fiduciary Fund Types Account Groups Totals Primary Government Component Totals Reporting Entity Trust and General General Long (Memorandum Only) Unit (Memorandum Only) "' Agency Fixed Assets Term Debt 1997 1996 HRA 1997 1996 $ - $ - $ - $371,148 $681,077 $12,367 $383,515 $711,067 8,060 - - 34,589 6,102,641 25,000 59,589 6,144,757 - - - 81,294 480,307 - 81,294 480,307 - - - 359,680 317,688 5,170 364,850 320,979 - - - 858,690 850,962 - 858,690 850,962 - - - 1,855,478 2,067,413 40,165 1,895,643 2,142,722 - - - - 694,992 976,912 - 694,992 976,912 - - - - - - - 125 13,171 - - 211,651 371,135 176,151 387,802 543,596 .-, - - 15,175,000 19,866,283 20,085,144 880,000 20,746,283 21,350,144 - - - - 119,747 - - 119,747 - - - - - 1,465,834 1,465,834 - - - - 105,389 76,029 - 105,389 76,029 "' 21,231 - 15,175,000 24,439,194 32,129,055 2,604,687 27,043,881 33,717,347 9l Te - - - - 13,408,243 13,811,936 - 13,408,243 13,811,936 - 34,165,584 - 34,165,584 31,227,581 - 34,165,584 31,227,581 - - - 2,443,789 2,650,778 '6 yc 3 G--1e'/'""„>y< 2,443,789 2,650,778 - - A to,,,i it lOb ti 12,942,383 10,797,278 0n,30"I 12,942,383 10,797,278 - - "I3 G"4( (4,�)4 3,085,466 1,974,745 3,881,481 6,966,947 5,635,290 - J - - 5 oll 93d,yd$ `14,547,266 14,278,54 z3 60,4,.5-.70- 14,547,266 14,278,546 23,648 - - L 7,385,162 9,326,04 6,329,414 13,714,576 14,596,996 23,648 34,165,584 - 87,977,893 84,066,908 10,210,895 98,188,788 92,998,405 $44,879 $34,165,584 $15,175,000 $112,417,087 $116,195,963 $12,815,582 $125,232,669 $126,715,752 1 See Accompany Notes to Financial Statements 27 CITY OF FRIDLEY. MINNESOTA - COMBINED STATEMENT OF REVENUES. EXPENDITURES.AND CHANGES IN FUND BALANCES -ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS AND DISCRETELY PRESENTED COMPONENT UNITS Year Ended December 31. 1997 Governmental Fund Types Special Debt Capital General Revenue Service Projects Revenues: Taxes $3,765,946 $ - $ - $71,574 --. Special assessments 9,866 - 451,753 12,866 Licenses and permits 675,067 117,555 - - Intergovernmental revenue 3,473,314 493,500 - 1,443,244 Charges for services 1,094,715 218,990 - - Fines and forfeits 185,541 1,090 - - Interest on investments 385,185 11,049 640,444 409,846 .--.,Miscellaneous 292,397 188,732 - _ 60,417 Total revenues 9,882,031 1,030,916 1,092,197 ,'1,997,9 Expenditures: .--. Current: General government 1,699,882 788,694 - - Public safety 4,058,669 50,614 - - Municipal center 214,490 - - - �` Public works 2,256,227 - - 369,642 Community development 572,817 - - - Recreation and naturalist 804,379 8,977 - - Debt service - - 10,623,206 12,301 Capital outlay 424,060 188,537 - 2,911,615 Total expenditures 10,030,524 1,036,822 10,623,206 3,293,558 ,� Excess(deficiency)of revenues over expenditures (148,493) (5,906) (9,531,009) (1,295,611) Other financing sources (uses): Bond proceeds - - 9,490,146 - Sale of fixed assets 13,830 5,000 - - Operating transfers in 220,821 - - 2,437,221 Operating transfers out - - (1,702,708) (805,889) Operating transfers from HRA - - 759,315 - Operating transfers to City - - - Total other financing sources(uses) 234,651 5,000 8,546,753 1,631,332 Excess(deficiency)of revenues and other financing sources over expenditures and other financing uses 86,158 (906) (984,256) 335,721 Fund balance-January 1 7,124,487 177,795 10,505,332 7,749,915 "'1 Fund balance-December 31 $7,210,645 $176,889 $9,521,076 $8,085,636 See Accompanying Notes to Financial Statements 28 Exhibit A-2 --, Fiduciary Fund Type Totals Primary Government Component Totals Reporting Entity Expendable (Memorandum Only) Unit (Memorandum Only) Trust 1997 1996 HRA 1997 1996 $ - $3,837,520 $3,874,913 $3,297,964 $7,135,484 $7,149,764 474,485 545,299 - 474,485 634,121 - 792,622 828,652 - 792,622 828,652 -- - 5,410,058 3,986,987 - 5,410,058 3,986,987 - 1,313,705 1,299,495 - 1,313,705 1,299,495 - 186,631 176,060 - 186,631 176,060 1,842 1,448,366 1,374,812 614,474 2,062,840 1,804,011 - 541,546 290,826 86,426 627,972 1,360,318 1,842 14,004,933 12,377,044 3,998,864 18,003,797 17,239,408 - 2,488,576 2,145,143 1,299,562 3,788,138 3,561,282 - 4,109,283 3,863,105 - 4,109,283 3,863,105 - 214,490 185,917 - 214,490 185,917 - 2,625,869 2,306,088 - 2,625,869 2,306,088 - 572,817 535,496 - 572,817 535,496 "- - 813,356 759,457 - 813,356 759,457 - 10,635,507 1,102,010 518,218 11,153,725 1,584,029 - 3,524,212 2,079,739 142,371 3,666,583 2,910,894 0 24,984,110 12,976,955 1,960,151 26,944,261 15,706,268 1,842 (10,979,177) (599,911) 2,038,713 (8,940,464) 1,533,140 - 9,490,146 323,605 - 9,490,146 323,605 - 18,830 - - 18,830 - - 2,658,042 209,843 6,297,524 8,955,566 7,179,489 - (2,508,597) 187,549 (6,297,524) (8,806,121) (6,782,097) - 759,315 797,365 - 759,315 797,365 - - - (759,315) (759,315) (797,365) 0 10,417,736 1,518,362 (759,315) 9,658,421 720,997 1,842 (561,441) 918,451 1,279,398 717,957 2,254,137 21,806 25,579,335 24,660,884 8,931,497 34,510,832 32,256,695 $23,648 $25,017,894 $25,579,335 $10,210,895 $35,228,789 $34,510,832 ' See Accompanying Notes to Financial Statements 29 CITY OF FRIDLEY. MINNESOTA COMBINED STATEMENT OF REVENUES. EXPENDITURES.AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL GENERAL.SPECIAL REVENUE FUND AND BUDGETED CAPITAL PROJECT TYPES - Year Ended December 31. 1997 With comparative totals for year ended December 31, 1996 General Special Revenue Fund Types Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) Revenues: Taxes $3,808,349 $3,765,946 ($42,403) $ - $ - $ - Special assessments 1,890 9,866 7,976 - - - Licenses and permits 538,771 675,067 136,296 117,555 117,555 - Intergovernmental revenue 3,292,600 3,473,314 180,714 336,148 493,500 157,352 Charges for services 1,091,862 1,094,715 2,853 222,991 218,990 (4,001) - Fines and forfeits 188,460 185,541 (2,919) 1,090 1,090 - Interest on investments 350,000 385,185 35,185 6,589 11,049 4,460 Miscellaneous 200,559 292,397 91,838 193,192 188,732 (4,460) Total revenues 9,472,491 9,882,031 409,540 877,565 1,030,916 153,351 Expenditures: Current: General government 1,805,785 1,699,882 105,903 788,695 788,694 1 Public safety 4,066,289 4,058,669 7,620 50,614 50,614 - Municipal center 214,490 214,490 - - - - .. Public works 2,283,450 2,256,227 27,223 - - - Community development 593,840 572,817 21,023 - - - Recreation and naturalist 837,609 804,379 33,230 8,977 8,977 - Reserve for contingency - - - - - - Debt service - - - - - - Capital outlay 439,196 424,060 15,136 213,537 188,537 25,000 Total expenditures 10,240,659 10,030,524 210,135 1,061,823 1,036,822 25,001 Excess (deficiency)of revenues over expenditures (768,168) (148,493) 199,405 (184,258) (5,906) 128,350 ,^ Other financing sources (uses): Sale of fixed assets 24,977 13,830 (11,147) 5,000 5,000 - Issuance of long term note receivable - - - - - - - Operating transfers in 220,821 220,821 - 250,000 - (250,000) Operating transfers out - - - - - - Total other financing sources(uses) 245,798 234,651 (11,147) 255,000 5,000 (250,000) , Excess (deficiency) of revenues and other financing sources over expenditures and other financing uses ($522,370) 86,158 $188,258 $70,742 (906) ($121,650) Fund balance-January 1 7,124,487 177,795 .- Fund balance- December 31 $7,210,645 $176,889 See Accompanying Notes to Financial Statements 30 .. Exhibit A-3 Totals Budgeted Capital Project Funds (Memorandum Only) Variance Variance Favorable Favorable 1996 - Budget Actual (Unfavorable) Budget Actual (Unfavorable) Actual $70,550 $71,574 $1,024 $3,878,899 $3,837,520 ($41,379) $3,874,913 - 2,560 2,560 1,890 12,426 10,536 4,685 - - - 656,326 792,622 136,296 828,652 596,000 682,733 86,733 4,224,748 4,649,547 424,799 3,986,987 - - - 1,314,853 1,313,705 (1,148) 1,299,495 - - - 189,550 186,631 (2,919) 176,060 265,925 412,017 146,092 622,514 808,251 185,737 776,538 - 11,300 32,440 21,140 405,051 513,569 108,518 290,826 943,775 1,201,324 257,549 11,293,831 12,114,271 820,440 11,238,156 - - - 2,594,480 2,488,576 105,904 2,145,143 - - - 4,116,903 4,109,283 7,620 3,863,105 - - - - 214,490 214,490 - 185,917 215,715 81,454 134,261 2,499,165 2,337,681 161,484 2,182,371 - - - 593,840 572,817 21,023 535,496 - - - - 846,586 813,356 33,230 759,457 - - - - - - 14,572 _2,382,956 1,989,693 393,263 3,035,689 2,602,290 433,399 778,871 2,598,671 2,071,147 527,524 13,901,153 13,138,493 762,660 10,464,932 -(1,654,896) (869,823) (269,975) (2,607,322) (1,024,222) 57,780 773,224 - - - 29,977 18,830 (11,147) - 1,581,779 1,556,888 (24,891) 2,052,600 1,777,709 (274,891) 209,843 (172,529) (806,812) (634,283) (172,529) (806,812) (634,283) (710,845) - 1,409,250 750,076 (659,174) 1,910,048 989,727 (920,321) (501,002) ($245,646) (119,747) ($929,149) ($697,274) (34,495) ($862,541) 272,222 - 8,464,233 15,766,515 15,494,293 $8,344,486 $15,732,020 $15,766,515 - See Accompanying Notes to Financial Statements 31 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. 1997 With comparative totals for the year ended December 31, 1996 Proprietary Fund Types Totals ^ Internal (Memorandum Only) Sales and cost of sales: Enterprise Service 1997 1996 Sales $3,079,567 $ - $3,079,567 $3,071,737 Cost of sales 2,440,954 - 2,440,954 2,424,824 Gross profit 638,613 0 638,613 646,913 Operating revenues: Water sales and sewer rents 6,648,102 - 6,648,102 5,639,422 Other 12,473 - 12,473 151,865 Charges for services - 155,579 155,579 100,640 -, Total operating revenues 6,660,575 155,579 6,816,154 5,891,927 Operating expenses: Personal services 1,242,295 15,527 1,257,822 1,263,297 Supplies and other charges 3,722,278 101,476 3,823,754 4,204,306 Depreciation 835,033 153,292 988,325 847,375 Total operating expenses 5,799,606 270,295 6,069,901 6,314,978 Operating income(loss) 1,499,582 (114,716) 1,384,866 223,862 Nonoperating revenues(expenses): Intergovernmental revenue - - - 50,000 Interest on investments 270,293 208,739 479,032 445,864 Debt service (256,460) - (256,460) (173,553) Special assessments 76,274 - 76,274 229,666 Other 156 - 156 295 Total nonoperating revenues(expenses) 90,263 208,739 299,002 552,272 Income before operating transfers 1,589,845 94,023 1,683,868 776,134 Operating transfers: Operating transfer in 923 - 923 - Operating transfer out (150,367) - (150,367) (397,392) Total operating transfers (149,444) 0 (149,444) (397,392) Net income before extraordinary item 1,440,401 94,023 1,534,424 378,742 Extraordinary gain on issuance of sewer availability charge credits - - - 80,327 Net income 1,440,401 94,023 1,534,424 459,069 Credit arising from transfer of depreciation on contributed capital 369,920 33,773 403,693 416,704 Retained earnings-January 1 12,281,550 1,166,505 13,448,055 12,572,282 Retained earnings- December 31 $14,091,871 $1,294,301 $15,386,172 $13,448,055 - See Accompanying Notes to Financial Statements ^ 32 Exhibit A-5 CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES - Year Ended December 31, 1997 With comparative totals for year ended December 31, 1996 Proprietary Fund Types Totals Internal (Memorandum Only) Enterprise Service 1997 1996 - Cash flows from operating activities: Operating income(loss) $1,499,582 ($114,716) $1,384,866 $223,861 Adjustments to reconcile operating income(loss)to net cash flows from operating activities: Depreciation 835,033 153,292 988,325 847,375 Discount amortization 694 - 694 - Change in assets and liabilities: _ Decrease(increase)in receivables (539,257) - (539,257) 125,796 Decrease(increase)in due from other funds (1,329) - (1,329) 1,679,018 Decrease(increase)in due from other governments (4,967) - ^ Decrease(increase)in inventories (16,163) - (16,163) (11,961) Decrease(increase)in prepaid items 2,395 - 2,395 (1,361) Increase(decrease)in payables (469,934) (4,758) (474,692) 116,451 Intergovernmental revenue - - - 50,000 Other nonoperating income 156 - 156 295 Net cash flows from operating activities 1,306,210 33,818 1,344,995 3,029,474 Cash flows from noncapital financing activities: Operating transfers out (149,444) - (149,444) (397,392) Net cash flows from noncapital financing activities (149,444) 0 (149,444) (397,392) Cash flows from capital and related financing activities: ^ Acquisition and construction of fixed assets (1,258,412) (170,436) (1,428,848) (1,881,198) Proceeds from sale of revenue bonds - - - 2,595,143 Prinicipal paid on revenue bonds (120,000) - (120,000) (115,000) ^ Interest and paying agent fees on revenue bonds (256,460) - (256,460) (173,553) Special assessment collections 76,274 - 76,274 31,278 Net cash flows from capital ... and related financing activities (1,558,598) (170,436) (1,729,034) 456,670 Cash flows from investing activities: ^ Interest on investments 270,293 208,739 479,032 445,864 Net cash flows from investing activities 270,293 208,739 479,032 445,864 Net increase(decrease)in cash and cash equivalents (131,539) 72,121 (54,451) 3,534,616 Cash and cash equivalents-January 1 6,856,135 3,724,154 10,580,289 7,045,673 - Cash and cash equivalents-December 31 $6,724,596 $3,796,275 $10,525,838 $10,580,289 See Accompanying Notes to Financial Statements 33 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1997 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 Associations-These associations are organized as nonprofit organizations by their members to provide pension and other benefits to such members in accordance with Minnesota Statutes. Their boards of directors are elected by the membership of the Association. All funding is conducted in accordance with Minnesota Statutes, whereby state aids flow to the associations, tax levies are determined by the associations and are only reviewed by the City. The associations pay benefits directly to their members. The associations may certify tax levies to the County directly if the City does not carry out this function. Because the associations are able to fund their programs independently of the City, they are excluded from these financial statements. (See Note 9 for disclosures relating to the pension plan operated by this organization.) 35 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 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 project 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. 36 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1997 - 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. 37 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1997 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 increase (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. 38 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS ■ DECEMBER 31, 1997 The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is legally enacted through passage of a resolution. 4. The City Council may authorize transfer of budgeted amounts between departments within any fund. .... 5. Reported budget amounts are as originally adopted or as amended by Council approved transfers. The City Charter limits appropriations to the total estimated revenues and fund balances. If actual revenues exceed the original estimates, appropriations may be increased by the Council up to the amount of revenue increases. There were no supplemental appropriations required or made during the year. 6. All budget amounts lapse at the end of the year to the extent they have not been expended or encumbered. Encumbrances are reappropriated into the following year's budget. 7. Annual budgets are legally adopted for the General Fund, Special Revenue Funds and Capital Improvement Capital Projects 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 15 for further information on budgeted and unbudgeted capital project 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. a 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. a 39 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1997 F. Assets, Liabilities and Fund Equity 1) Cash and Cash Equivalents,and investments Cash balances from all funds are combined and invested to the extent available in certificates of deposit, U.S. government securities and other securities authorized by State Statute. Earnings from such investments are allocated to the respective funds on the basis of applicable cash balance participation by each fund. With exception of the Deferred Compensation Agency Fund which states investments in a deferred compensation plan at market, all investments are stated at cost which approximates market. Investments with original maturities of three months or less are classified as cash equivalents. ^ 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 1997 taxes were adjusted downward $10,146 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. 40 CITY OF FRIDLEY,MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1997 Special Assessments Receivable Special assessments are levied against the benefited properties for the assessable costs of special assessment improvement projects in accordance with State Statutes. The City usually adopts the assessment rolls when the individual projects are complete or substantially complete. The assessments are collectible over a term of years generally consistent with the term of years of the related bond issue. Collection of annual installments (including interest) is handled by the County in the same manner as property taxes. Property owners are allowed to prepay total future installments without interest or prepayment penalties. Special assessments receivable includes the following components: Unremitted - amounts collected by Anoka County and not remitted to the City prior to year end. Delinquent-amounts billed to property owners but not paid. Deferred - assessment installments which will be billed to property owners in future years. 3) Inventories Inventory in the General Fund consists of expendable supplies held for consumption and is recorded at cost on a first in first out basis. The cost is recorded as an expenditure at the time individual inventory items are used. Reported inventories are equally offset by a fund balance reserve which indicates that they do not constitute "available spendable resources" even though they are a component of net current assets. Proprietary Funds inventory items are expensed at the time they are sold or used. (Consumption method). Liquor inventories are recorded on the average cost basis. 4) Property and Equipment/General Fixed Assets All fixed assets are recorded at historical cost or estimated historical cost, if the original cost was not available. Donated fixed assets are carried at the fair market value on the date donated. Additions to general fixed assets for general City purposes, including public domain (infrastructure) fixed assets are recorded as expenditures of the applicable fund in the year in which the fixed asset was purchased or constructed, and are capitalized in the General Fixed Asset Account Group. Depreciation is not recorded on these assets. 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 41 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1997 5) Other Assets This account represents the market value of investments and other assets held in an agency fund for the City's deferred compensation plan. (See Note 16.) 6) Compensated Absences All liabilities for compensated absences, both current and long-term, for annual leave, severance and separation pay are accounted for in the Employee Benefit Fund, an internal service fund. Each year compensated absence expenditures and expenses are recorded in the governmental and proprietary funds respectively, equivalent to the full amount accrued by fund employees during the year. These charges are offset by a -yk 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. 7) Encumbrances Encumbrances represent purchase commitments. Encumbrances outstanding at year end are reported as reservations of fund balance since they do not constitute expenditures or liabilities. G. Revenues, Expenditures and Expenses The following transactions are accounted for as described below: General Property Taxes/Special Assessments - Revenue is recognized in the year of collection, with amounts due from the County and received early in the following year set up as receivable (unremitted receivables). Uncollected (delinquent) taxes and special assessments receivable are fully offset by deferred revenue until they become available to finance current expenditures. General property taxes and special assessments are recognized when cash is received to prevent overstating due to delinquencies. Principal Portion of Special Assessments - Revenue is recognized in the year the assessments are collected. Interest Revenue on Special Assessments Receivable - Interest revenue is recognized in the year of collection of the current principal installment. Intergovernmental Revenues - Intergovernmental revenues in the form of state aids are recorded as revenue when allocations are made by statutory formula. Other intergovernmental revenues received as reimbursements for specific purposes or projects are --- recognized based upon the expenditures incurred. Intergovernmental revenues received through abatements or shares are recorded in the year determined to be measurable and available. Interest on Investments- Interest is recorded as revenue in the year earned. Water and Sewer Service Charges- Revenue is recognized when earned with no allowance for 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. 42 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 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. a 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. I. 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. 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 a 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. a 43 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 Balances at December 31, 1997 are as follows: .. Bank Carrying Balances Amount City $470,298 $386,820 HRA 156,184 342,160 The entire bank balances are covered by Federal Depository Insurance or collateral held by the City/HRA's agent in the City/HRA'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. (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 back 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. 44 CITY OF FRIDLEY. MINNESOTA _ NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1997 The carrying value, market value and credit risk of the investments held by the City at year end are as follows: Credit Risk Category Carrying Market Securities Type 1 2 3 Amount Value U.S.Government agencies or instrumentalities $27,603,545 $ - $ - $27,603,545 $27,400,963 Commercial paper 994,363 - - 994,363 994,363 $28,597,908 $ - $ - 28,597,908 28,395,326 ♦+ Investment in money market and mutual funds 4,651,089 4,630,259 Total investments $33,248,997 $33,025,585 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 Market Securities Type 1 2 3 Amount Value U.S.Government securities $1,131,900 $ - $ - $1,131,900 $1,205,227 U.S.Government agencies or instrumentalities 3,302,051 - - 3,302,051 3,295,650 Commercial paper 1,011,615 - - 1,011,615 999,099 $5,445,566 $0 $0 5,445,566 5,499,976 Investment in money market and mutual funds 3,126,730 3,126,730 Total investments $8,572,296 $8,626,706 a 3. Special Assessments Receivable Special assessments receivable at December 31, 1997 are as follows: Capital Special — Special Improvements Assessment Public Assessment Capital Capital Utilities General Debt Service Projects Projects Enterprise Total Unremitted $1,708 $4,868 $ - $ - $7,302 $13,878 Delinquent 143 42,723 105 - 419 43,390 Deferred 1,591 1,593,594 9,088 70,349 - 1,674,622 Total $3,442 $1,641,185 $9,193 $70,349 $7,721 $1,731,890 45 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1997 4. Due From Other Governments �► Amounts due from other governments at December 31, 1997 are as follows: General Fund: State of Minnesota: a) State Aid Maintenance $19,076 b) FEMA 15,246 Anoka County: a) Fines and Forfeits 15,430 ,4a School District#206 14,763 Total General Fund $64,515 Special Revenue Funds: State of Minnesota: " a) Family Grant $21,618 b) RAP Grant 20,511 Anoka County: a) Community Development Block Grant 9,992 b) Recycling 6,082 c) Project Safety Net 16,805 d)Auto Theft Group 1,313 Met Council -Section 8 3,601 United States Bureau of Justice 85,529 Total Special Revenue Funds $165,451 Capital Project Funds: Minnesota Department of Transportation $13,776 Fridley HRA 8,785 Anoka County Highway Department 70,779 Total Capital Project Funds $93,340 Enterprise Funds: Fridley -HRA $5,000 Metropolitan Council Environmental Services(MCES)- Current portion of amounts due from MCES 23,972 Total Enterprise Funds $28,972 Metropolitan Council Environmental Services(MCES)- Noncurrent portion -long term receivable of amounts due from MCES $251,365 46 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 The noncurrent receivable of$251,365 in the Utility Enterprise Fund is comprised of: 1. The balance due for the sale of the City's sewer interceptors is $50,846 (the interceptors were sold to the Metropolitan Council Environmental Service January 1, 1971). This receivable will be paid to the City in annual installments with interest through 1999. Repayment will be made by issuing credits against future disposal charges from the Commission. 2. The credits for excess sewer availability charges of $200,519 arising from the change in use of various properties within the City. These credits will be offset against current availability charges as they occur. 5. Changes in General Fixed Assets A summary of changes in general fixed assets are as follows: Balance Balance January 1 December 31, —" 1997 Additions Deletions 1997 Land $2,526,904 $2,513 $1,196 $2,528,221 Buildings 4,894,763 1,712,727 8,807 6,598,683 Improvements other than buildings 18,197,042 1,389,714 314,468 19,272,288 Machinery and equipment 5,608,872 790,898 633,378 5,766,392 Total $31,227,581 $3,895,852 $957,849 $34,165,584 6. Summary of Proprietary Fund Property and Equipment A summary of proprietary fund type property, plant and equipment at December 31, 1997 follows: Internal Enterprise Service Funds Funds Public Information Liquor Utilities Systems Total Land $66,961 $154,531 $ - $221,492 Buildings 130,211 1,529,236 - 1,659,447 Improvements other than buildings 49,633 9,576,638 - 9,626,271 Machinery and equipment 197,719 2,530,962 1,128,413 3,857,094 Water and sewer lines - 18,041,569 - 18,041,569 444,524 31,832,936 1,128,413 33,405,873 Less: Accumulated depreciation (263,075) (10,858,032) (825,864) (11,946,971) Net property and equipment $181,449 $20,974,904 $302,549 $21,458,902 47 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1997 .. 7. Long-Term Debt .� The following is a summary of long-term debt transactions of the City for the year ended December 31, 1997. 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 1,1997 $1,700,000 $13,575,000 $15,275,000 $4,825,000 $1,265,000 Debt issued - 9,575,000 9,575,000 Debt retired (190,000) (9,485,000) (9,675,000) (120,000) (385,000) Debt payable-December 31, 1997 $1,510,000 $13,665,000 $15,175,000 $4,705,000 $880,000 ANA omN A.\ IOW 48 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 Bonds payable at December 31, 1997 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%. $510 $855,000 General Obligation Special Assessment bonds of 1992, Series A, due in varying annual installments of$50,000 to$95,000 through February 1, 2004; interest at 3.00% -5.25%. 550 $4,090,000 General Obligation Temporary Tax Increment Bonds of 1995, due on November 1, 1998; interest at 4.10%. 4,090 $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%. 130 $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%. 320 $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 Subtotal General Long-Term Debt 15,175 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%. 1,330 a $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%. 475 a $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%. 285 $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%. 2,615 Subtotal Revenue Bonds 4,705 Total Bonds Payable $19,880 49 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1997 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, 1997 General Obligation Bonds Year Ending Special Tax Tax December 31, Assessment Increment-City Revenue Total Increment-HRA 1998 $294,530 $4,812,535 $506,874 $5,613,939 $479,775 1999 283,426 550,581 533,645 1,367,652 480,700 2000 276,874 547,131 528,827 1,352,832 2001 269,771 1,343,644 537,693 2,151,108 - 2002 179,608 1,352,519 535,187 2,067,314 - 2003-2007 510,508 6,672,394 2,532,837 9,715,739 - •. 2008-2012 - 2,556,637 1,417,723 3,974,360 - $1,814,717 $17,835,441 $6,592,786 $26,242,944 $960,475 $9,521,076 is available in the Debt Service Fund to service the Special Assessment and Redevelopment Bonds. $12,299,536 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 Statute Statutes, the legal debt margin is 2% of the most recent market value less certain deductions. At December 31, 1997, the legal debt margin was $23,445,018. HRA bonds payable at December 31, 1997 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%. $880 .v, 50 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1997 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 (612)296-7460 or 1-800-652-9026. B. Funding Policy Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. PERF Basic Plan members and Coordinated Plan members are required to contribute 8.23%and 4.23%, 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: 10.73%for Basic Plan PERF members,4.48%for Coordinated Plan PERF members, and 11.40%for PEPFF members. The City's contributions for the years .. ending December, 1997, 1996 and 1995 equal to the contractually required contributions for each year as set by state statute for PERF and PEPFF as follows: PERF PEPFF 1995 $170,403 $183,261 1996 167,644 189,021 1997 177,375 207,015 51 CITY OF FRIDLEY,MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1997 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 •-r 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. Total contributions made by the City during fiscal year 1997 were: Percentage of Amount Covered Payroll Required Employees Employer Employees Employer Rates PEDCP $945 $945 5.00% 5.00% 5.00% 9. Defined Contribution Pension Plan -Fridley Volunteer Firefighter Relief Association A. Plan Description The Fridley Volunteer Firefighters Relief Association (Association), is a single employer public employee retirement system that acts as a common investment administrator for all of the City's firefighters. Pursuant to a 1987 amendment to its by-laws, the pension plan is a defined contribution plan. 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 $94,158 and $97,782 in State Aid to the Association for 1997 and 1996 respectively. 52 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 r. 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 -A. 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. 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 1997 and as of December 31, 1997, the Association held no securities issued by the City or other related parties. 53 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31,1997 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 (612)296-7460 or 1-800-652-9026. 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 'R 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 6/30/97 $75,429 100% $0 54 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 D. Required Supplementary Information (Unfunded) 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 6/30/97 $9,587,063 $7,654,218 $1,932,845 125% $396,995 N/A Fully Funded 11. Interfund Receivables and Payables Interfund receivables and payables at December 31, 1997 are as follows: Interfund Interfund Receivables Payables Due From/Due To: /MO, General Fund $170,580 $1,165 Special Revenue Fund: Grant Management Fund - 127,553 Solid Waste Abatement Fund - 30,375 Housing Revitalization Fund - 48,180 Chemical Assessment Team Fund - 12,729 Debt Service Special Assessment 48,179 - Capital Projects Funds: Capital Improvements 474,904 - Special Assessments - 474,903 Enterprise Funds: Public Utilities Fund 1,329 - Liquor - 87 _ Internal Service Funds: Self Insurance Fund - - $694,992 $694,992 55 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1997 12. Reserved Fund Balances/Retained Earnings The following reservations have been made of various fund balances/retained earnings at December 31, 1997: General Fund: Reserved for: Encumbrances $16,307 Inventory 34,222 Long-term receivables 117,646 168,175 Debt Service Funds: Reserved for Debt Service 757,586 Reserved for long-term receivable 1,465,834 2,223,420 Capital Projects Funds: Reserved for: Encumbrances 693,871 Total Governmental Funds $3,085,466 Retained Earnings: Enterprise Funds: Public Utilities Funds: Reserved for capital outlay $2,301,000 Internal Service Funds: Employee Benefits Fund: Reserved for employee benefits 142,789 Total Proprietary Funds $2,443,789 56 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 13. Designated Fund Balance The following designations have been made of various fund balances at December 31, 1997: General Fund: Working capital $4,036,426 Subsequent year's expenditures 276,807 Contingencies 1,028,854 Replacement of fixed assets 1,307,113 Total General Fund 6,649,200 Special Revenue Funds: Cable TV Fund: Subsequent year's expenditures 16,830 Cable TV program 69,300 Grant Management Fund: Subsequent year's expenditures 10,609 Drug and Gambling Forfeiture Fund Drug and Gambling Enforcement 10,853 F.C.C. Donations: Fridley Community Center 139,859 Total Special Revenue Funds 247,451 Capital Projects Funds: Capital Improvement Fund: Replacement of fixed assets 1,622,742 Park improvement 628,554 Street improvements 5,399,319 Total Capital Project Fund 7,650,615 Total of Designated Fund Balances $14,547,266 57 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1997 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 $11,907,544 $1,000,000 $904,392 Increases: Current capital contributions - - - Decreases: Depreciation of contributed assets (369,920) - (33,773) Balance-December 31 $11,537,624 $1,000,000 $870,619 58 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1997 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, 1997 is as follows: Total Enterprise — Liquor Utility Funds Sales (less cost of sales of$2,440,954) $638,613 $ - $638,613 — Operating revenues - 6,660,575 6,660,575 Operating expenses (459,852) (5,339,754) (5,799,606) Operating income(loss) 178,761 1,320,821 1,499,582 — Nonoperating revenues (expenses)-net 75,559 14,704 90,263 Operating transfers in (out) (75,000) (74,444) (149,444) _ Net income(loss) $179,320 $1,261,081 $1,440,401 Depreciation expense included in operating expenses $27,803 $807,230 $835,033 — Property and equipment: Additions(including capital contributions) 30,521 1,228,337 1,258,858 — Working capital 1,610,886 6,674,977 8,285,863 — Total assets 1,945,277 28,884,287 30,829,564 Fund equity: Contribution capital - 11,537,624 11,537,624 Retained earnings 1,792,335 12,299,536 14,091,871 Total fund equity $1,792,335 $23,837,160 $25,629,495 Bonds payable $ - $4,691,283 $4,691,283 59 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 16. Unbudgeted Capital Project Funds ._ The City does not budget all Capital Project 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) 1997 All Capital Project Funds $1,997,947 $3,293,558 $1,631,332 $8,085,636 Less unbudgeted funds: Special Assessment Fund 796,623 1,222,411 881256 (258,850) Budgeted Capital Project Funds $1,201,324 $2,071,147 $750,076 $8,344,486 17. Deferred Compensation Plan The City offers its employees deferred compensation plans created in accordance with Internal Revenue Code Section 457. The deferred compensation plan is offered by International City Managers Association (ICMA). The plan, available to all employees, permit them to defer a portion of their salary until future years. The deferred compensation is not available to the employees until termination, retirement, death or unforeseeable emergency. On August 20, 1996 the provisions of Internal Revenue Code Section 457 were amended to enable plans to hold all assets and income of the plan in trust for the exclusive benefit of participants and their _ beneficiaries. These assets were previously required to be held as property of the City. The Governmental Accounting Standards Board (GASB) issued Statement 32 in October 1997. This Statement rescinds GASB Statement 2 statements. GASB 32 is effective for the year ended December 31, 1999 or on the date (if earlier) that the plan changes its trust provisions. The plan provisions for the ICMA defined compensation plan was amended to hold the plan assets in trust for the plan participants and their beneficiaries. 18. 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. 60 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1997 ,■■ 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, 1997, the Self Insurance Fund has accumulated equity in the amount of $1,843,569 to cover future claims and losses. 19. 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, 1997. 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. D. Construction Commitments The significant construction commitment at December 31, 1997, was in regard to the Fridley Community Center Project. The bid on the project was awarded in the amount of $1,809,342 with $1,562,444 completed to date and a remaining commitment of$246,898. 61 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 20. 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, 1997 for the period ending February 28, 1998. Total rental expense for 1997 was $48,530. 21. Deficit Balances The following fund had a deficit balance at December 31, 1997: Special Revenue Funds: Solid Waste abatements ($7,118) Housing Revitalization (48,180) Chemical assessment (15,499) Capital Projects Funds: Special assessments (258,850) These deficit balances will be funded by a combination of future General Obligation Improvement Bonds and transfers from other funds. 22. 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, 1997, 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. a a 62 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. 1997 and 1996 Assets 1997 1996 Cash and cash equivalents $6,785,988 $6,936,716 Receivables: Accounts 57,529 76,926 Taxes: Unremitted 73,828 43,575 Delinquent 117,421 67,600 Special assessments: Unremitted 1,708 138 " Delinquent 143 98 Deferred 1,591 7,199 Interest 360,832 291,893 Loans 6,300 6,300 Developer note 111,346 116,460 Due from other funds 170,580 84,821 - Due from other governments 64,515 38,265 Inventories, at cost 34,222 24,904 Total assets $7,786,003 $7,694,895 Liabilities and Fund Balance Liabilities: Accounts payable $163,836 $250,358 Deposits payable 16,303 18,988 Salaries payable 253,665 223,716 Deferred revenue 119,154 74,898 Due to other funds 1,165 - Due to other governments 21,235 2,448 Total liabilities 575,358 570,408 Fund balance: Reserved for encumbrances 16,307 21,197 Reserved for inventory 34,222 24,904 Reserved for long-term receivables 117,646 122,760 Unreserved: Designated for working capital 4,036,426 ,954,657 Designated for contingencies 1,028,854 1,002,971 Designated for subsequent year's expenditures 9 7,,D5','y70 276,807 I,,9cs ; 491,084 Designated for fixed asset replacement 1,307,113 1,301,800 Undesignated 393,270 205,114 Total fund balance 7,210,645 7,124,487 Total liabilities and fund balance $7,786,003 $7,694,895 64 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. 1997 With comparative actual amounts for year ended December 31, 1997 1997 Variance Favorable 1996 Budget Actual (Unfavorable) Actual Revenues: - Taxes $3,808,349 $3,765,946 ($42,403) $3,803,136 Special assessments 1,890 9,866 7,976 2,575 Licenses and permits 538,771 675,067 136,296 722,122 Intergovernmental revenue 3,292,600 3,473,314 180,714 3,222,589 Charges for services 1,091,862 1,094,715 2,853 1,154,140 Fines and forfeits 188,460 185,541 (2,919) 176,060 ^ Interest on investments 350,000 385,185 35,185 286,724 Miscellaneous 200,559 292,397 91,838 228,241 Total revenues 9,472,491 9,882,031 409,540 9,595,587 Expenditures: Current: .. General government 1,805,785 1,699,882 105,903 1,661,024 Public safety 4,066,289 4,058,669 7,620 3,850,597 Municipal center 214,490 214,490 - 185,917 - Public works 2,283,450 2,256,227 27,223 2,140,438 Community development 593,840 572,817 21,023 535,496 Recreation and naturalist 837,609 804,379 33,230 759,457 _ Debt service - - - 14,572 Capital outlay 439,196 424,060 15,136 331,880 Total expenditures 10,240,659 10,030,524 210,135 9,479,381 - Excess (deficiency) of revenues over expenditures (768,168) (148,493) 619,675 116,206 Other financing sources (uses): Sale of general fixed assets 24,977 13,830 (11,147) - Operating transfers in 220,821 220,821 - 209,843 Total other financing sources (uses) 245,798 234,651 (11,147) 209,843 Excess (deficiency) of revenues and other financing sources over expenditures and other financing uses ($522,370) 86,158 $608,528 326,049 Fund balance-January 1 7,124,487 6,798,438 Fund balance- December 31 $7,210,645 $7,124,487 65 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. 1997 With comparative actual amounts for year ended December 31, 1996 1997 Variance Favorable 1996 Budget Actual (Unfavorable) Actual Taxes and special assessments: Current ad valorem taxes $3,688,736 $3,726,656 $37,920 $3,752,724 Delinquent ad valorem taxes 77,287 21,488 (55,799) 21,550 Penalties and interest 29,493 16,482 (13,011) 27,585 Forfeited sale-taxes 12,833 1,320 (11,513) 1,277 Special assessments 1,890 9,866 7,976 2,575 Total taxes and special assessments 3,810,239 3,775,812 (34,427) 3,805,711 Licenses and permits: Licenses: Contractor 13,305 12,680 (625) 11,980 Business 67,640 57,458 (10,182) 75,480 All other 70,036 101,616 31,580 156,946 Permits 387,790 503,313 115,523 477,716 Total licenses and permits 538,771 675,067 136,296 722,122 Intergovernmental revenue: Civil defense 4,847 6,801 1,954 8,036 Fema disaster aid 56,669 94,239 37,570 - State maintenance aid 193,571 288,360 94,789 194,598 State credits 1,039,739 1,048,338 8,599 1,033,435 Local government aid 1,643,908 1,643,908 - 1,625,082 Local performance aid 31,801 31,801 - - Other state grants 35,127 11,673 (23,454) 22,281 Police and fire pension 278,460 319,360 40,900 331,185 Other 8,478 28,834 20,356 7,972 Total intergovernmental revenue 3,292,600 3,473,314 180,714 3,222,589 Charges for services: General government 799,288 760,730 (38,558) 873,982 Public safety 104,715 151,577 46,862 105,649 Conservation of health 4,889 1,093 (3,796) (668) Recreation 182,970 181,315 (1,655) 175,177 Total charges for services 1,091,862 1,094,715 2,853 1,154,140 Fines and forfeits 188,460 185,541 (2,919) 176,060 Interest on investments 350,000 385,185 35,185 286,724 66 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. 1997 With comparative actual amounts for year ended December 31, 1996 1997 Variance Favorable 1996 Budget Actual (Unfavorable) Actual Miscellaneous revenue: - Rent income $4,121 $195 ($3,926) $2,390 Sale of property 2,732 323 (2,409) 32,155 Donations 88,545 46,785 (41,760) 52,501 — Miscellaneous 105,161 245,094 139,933 141,195 Total miscellaneous revenue 200,559 292,397 91,838 228,241 — Total revenues 9,472,491 9,882,031 409,540 9,595,587 Other financing sources: Sale of General Fixed Assets 24,977 13,830 (11,147) - Operating transfers in: Liquor Fund 75,000 75,000 - 75,000 Special Assessment Debt Service Fund 145,821 145,821 - 134,843 Total other financing sources (uses) 245,798 234,651 (11,147) 209,843 Total revenues and other financing sources $9,718,289 $10,116,682 $398,393 $9,805,430 _(� p,23`11//S-1 U$ a7't I Ai 4C 67 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, 1997 With comparative actual amounts for year ended December 31, 1996 1997 Variance Favorable 1996 Budget Actual (Unfavorable) Actual General government: Mayor and council: - Personal services 51,079 51,079 $ - $50,723 Supplies and other charges $43,012 $35,394 7,618 35,109 Total mayor and council 94,091 86,473 7,618 85,832 Planning commission: Supplies and other charges 2,032 951 1,081 593 Other commissions: Supplies and other charges 12,289 1,892 10,397 3,238 City manager: Personal services 232,601 232,601 - 224,717 Supplies and other charges 73,212 73,212 - 43,398 Total City manager 305,813 305,813 0 268,115 Personnel: Personal services 81,703 81,703 - 73,367 Supplies and other charges 14,903 12,587 2,316 17,551 Total personnel 96,606 94,290 2,316 90,918 Legal: --, Supplies and other charges 262,735 262,735 - 230,527 Elections: Personal services - - - 26,468 Supplies and other charges 38 38 - 3,184 Total elections 38 38 0 29,652 Accounting: Personal services 444,412 421,300 23,112 451,846 Supplies and other charges 105,523 105,523 - 71,229 Total accounting 549,935 526,823 23,112 523,075 Assessing: Personal services 111,540 111,540 - 109,201 Supplies and other charges 8,357 8,049 308 8,109 Total assessing 119,897 119,589 308 117,310 MIS: Personal services 72,823 43,279 29,544 83,562 Supplies and other charges 97,523 97,523 - 56,067 Total MIS 170,346 140,802 29,544 139,629 City clerk/records: Personal services 114,412 114,412 - 92,115 .-. Supplies and other charges 7,964 7,964 - 7,769 Total City clerk/records 122,376 122,376 0 99,884 68 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. 1997 With comparative actual amounts for year ended December 31, 1996 1997 Variance .- Favorable 1996 Budget Actual (Unfavorable) Actual Nondepartmental: ' Personal services $5,000 $2,351 $2,649 $35,666 Supplies and other charges 64,627 35,749 28,878 36,585 Total nondepartmental 69,627 38,100 31,527 72,251 Total general government 1,805,785 1,699,882 105,903 1,661,024 Public safety: Police: Personal services 2,903,628 2,903,628 - 2,738,597 Supplies and other charges 321,672 321,672 - 322,044 Total police 3,225,300 3,225,300 0 3,060,641 Fire: Personal services 616,114 616,114 - 577,677 .� Supplies and other charges 116,715 109,393 7,322 102,732 Total fire 732,829 725,507 7,322 680,409 Rental inspections: - Personal services 82,351 82,351 - 89,025 Supplies and other charges 13,738 13,440 298 10,976 Total rental inspections 96,089 95,791 298 100,001 Civil defense: Supplies and other charges 12,071 12,071 - 9,546 Total public safety 4,066,289 4,058,669 7,620 3,850,597 Municipal center: ._ Personal services 27,058 27,058 - 24,549 Supplies and other charges 187,432 187,432 - 161,368 Total municipal center 214,490 214,490 0 185,917 - Public works: Engineering: Personal services 384,495 359,679 24,816 350,467 Supplies and other charges 64,138 61,731 2,407 45,619 Total engineering 448,633 421,410 27,223 396,086 - Public works and parks Personal services 1,068,656 1,068,656 - 1,031,792 Supplies and other charges 766,161 766,161 - 712,560 - Total public works and parks 1,834,817 1,834,817 0 1,744,352 Total public works 2,283,450 2,256,227 27,223 2,140,438 69 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. 1997 With comparative actual amounts for year ended December 31, 1996 1997 Variance Favorable 1996 Budget Actual (Unfavorable) Actual Community development: Building inspection: Personal services $150,636 $150,636 - $138,589 Supplies and other charges 66,898 55,377 11,521 57,512 Total building inspection 217,534 206,013 11,521 196,101 Planning: Personal services 313,694 313,694 - 282,723 Supplies and other charges 62,612 53,110 9,502 56,672 Total planning 376,306 366,804 9,502 339,395 Total community development 593,840 572,817 21,023 535,496 Recreation and naturalist: Recreation: Personal services 426,125 400,381 25,744 381,303 Supplies and other charges 184,132 184,132 - 174,305 Total recreation 610,257 584,513 25,744 555,608 "'. Naturalist: Personal services 162,181 162,181 - 147,888 Supplies and other charges 65,171 57,685 7,486 55,961 -. Total naturalist 227,352 219,866 7,486 203,849 Total recreation and naturalist 837,609 804,379 33,230 759,457 •-t Capital outlay expenditures: City clerk/records 4,400 4,389 11 2,407 Police 70,419 70,419 - 103,900 -,Fire 60,650 57,782 2,868 18,366 Rental inspections - - - 1,171 Municipal center 6,866 6,798 68 1,672 Building inspection - - - 15,651 Engineering 1,636 1,636 - 1,921 Public works 286,532 276,456 10,076 186,053 Naturalist 1,893 1,780 113 - Recreation 6,800 4,800 2,000 739 Total capital outlay 439,196 424,060 15,136 331,880 Debt service: Principal - - - 12,816 Interest - - - 1,756 Total debt service 0 0 0 14,572 "' Total expenditures $10,240,659 $10,030,524 $210,135 $9,479,381 70 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 d in the grant. specific activities outlined 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. 1997 With comparative totals for December 31, 1996 Solid Waste Cable Grant Abatement Assets TV Management Fund ^r Cash and investments $72,811 $ - $ - Accounts receivable 37,180 - 20,222 ,.. Due from other funds - - - Due from other governments - 159,369 6,082 Total assets $109,991 $159,369 $26,304 Liabilities and Fund Balance Liabilities: Accounts payable $5,296 $2,949 $969 Deposits payable 10,226 - - Salaries payable 1,060 7,776 2,078 Deferred revenue 7,279 10,482 - Due to other funds - 127,553 30,375 Due to other governments - - - Total liabilities 23,861 148,760 33,422 Fund balance: Unreserved: Designated for subsequent years expenditures 16,830 10,609 - Designated for special revenue programs 69,300 - - •, Undesignated - - (7,118) Total fund balance 86,130 10,609 (7,118) Total liabilities and fund balance $109,991 $159,369 $26,304 72 Exhibit C-1 Drug& Gambling Chemical HRA Forfeiture Housing Assessment F.C.C. Totals '� Reimbursement Fund Revitalization Team Donations 1997 1996 $239 $10,853 $ - $ - $140,321 $224,224 $168,404 - - - - - 57,402 48,754 - - - 165,451 120,361 - $239 $10,853 $0 $0 $140,321 $447,077 $337,519 A- $4 $ - $ - $2,637 $462 $12,317 $53,990 - - - - - 10,226 10,228 - - - 83 - 10,997 3,191 - - - - - 17,761 7,279 - - 48,180 12,729 - 218,837 84,821 - - - - 50 - 50 215 4 0 48,180 15,499 462 270,188 159,724 .. - - - - - 27,439 78,376 - 10,853 - - 139,859 220,012 167,792 235 - (48,180) (15,499) - (70,562) (68,373) 235 10,853 (48,180) (15,499) 139,859 176,889 177,795 .. $239 $10,853 $0 $0 $140,321 $447,077 $337,519 ... 73 CITY OF FRIDLEY. MINNESOTA SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES Year Ended December 31. 1997 With comparative totals for year ended December 31, 1996 Solid Waste Cable Grant Abatement TV Management Fund r` Revenues: Licenses and permits $117,555 $ - $ - Intergovernmental revenue - 342,676 96,673 Charges for services - 249 218,741 Fines and forfeits - - - Interest on investements 6,589 - - Donations - - - Miscellaneous 167 - 833 Total revenues 124,311 342,925 316,247 •-• Expenditures: Current: —� General government 164,129 250,350 351,616 Public safety - - - Recreation and naturalist - - - Capital outlay 33,004 111,112 1,065 Total expenditures 197,133 361,462 352,681 Excess (deficiency) of revenues over expenditures (72,822) (18,537) (36,434) Other financing sources (uses): Sale of fixed assets - 5,000 - Total other financing sources (uses) 0 5,000 0 Excess(deficiency) of revenues and other financing sources over expenditures and other financing uses (72,822) (13,537) (36,434) Fund balance-January 1 158,952 24,146 29,316 Fund balance- December 31 $86,130 $10,609 ($7,118) 74 Exhibit C-2 Drug & Gambling Chemical HRA Forfeiture Housing Assessment F.C.C. Totals Reimbursement Fund Revitalization Team Donations 1997 1996 $ - $ - $ - $ - $ - $117,555 $106,530 16,521 - - 37,630 - 493,500 272,120 - - - - - 218,990 145,355 - 1,090 - - - 1,090 - - - - - - 4,460 11,049 8,101 - - - - 187,732 187,732 - - - - 1,000 107 16,521 1,090 0 37,630 192,192 1,030,916 532,213 16,798 - 5,801 - - 788,694 484,119 - 155 - 50,459 - 50,614 12,508 -- - - - - 8,977 8,977 - - - - - 43,356 188,537 68,724 16,798 155 5,801 50,459 52,333 1,036,822 565,351 (277) 935 (5,801) (12,829) 139,859 (5,906) (33,138) - - - - - 5,000 - 0 0 0 0 0 5,000 0 (277) 935 (5,801) (12,829) 139,859 (906) (33,138) 512 9,918 (42,379) (2,670) - 177,795 210,933 $235 $10,853 ($48,180) ($15,499) $139,859 $176,889 $177,795 .. 75 Exhibit C-3 CITY OF FRIDLEY. MINNESOTA CABLE TV SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31. 1997 and 1996 Assets 1997 1996 Cash and cash equivalents $72,811 $153,947 Accounts receivable 37,180 34,296 Total assets $109,991 $188,243 Liabilities and Fund Balance Liabilities: Accounts payable $5,296 $11,019 Deposits payable 10,226 10,228 Salaries payable 1,060 765 Deferred revenue 7,279 7,279 Total liabilities 23,861 29,291 Fund balance: Unreserved: Designated for subsequent year's expenditures 16,830 25,736 Designed for cable TV program 69,300 133,216 Total fund balance 86,130 158,952 Total liabilities and fund balance $109,991 $188,243 76 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, 1997 With comparative amounts for year ended December 31, 1996 1997 Variance Favorable 1996 Budget Actual (Unfavorable) Actual Revenues: Licenses-franchise fee $117,555 $117,555 $ - $106,530 Interest on investments 6,589 6,589 - 8,101 Miscellaneous - 167 167 - Total revenues 124,144 124,311 167 114,631 Expenditures: Current: General government: Personal services 56,229 56,229 - 41,468 Supplies and other charges 107,900 107,900 - 53,621 Capital outlay 33,004 33,004 - 6,380 Total expenditures 197,133 197,133 0 101,469 Excess (deficiency)of revenues over expenditures ($72,989) (72,822) $167 13,162 Fund balance-January 1 158,952 145,790 Fund balance-December 31 $86,130 $158,952 a 77 Exhibit C-5 CITY OF FRIDLEY, MINNESOTA GRANT MANAGEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1997 and 1996 Assets 1997 1996 Due from other governments $159,369 $77,044 Total assets $159,369 $77,044 -� Liabilities and Fund Balance Liabilities: Accounts payable $2,949 $9,813 Salaries payable 7,776 2,228 .. Deferred revenue 10,482 - Due to other funds 127,553 40,857 Total liabilities 148,760 52,898 Fund balance: Unreserved: Designated for subsequent year's expenditures 10,609 24,146 Total fund balance 10,609 24,146 Total liabilities and fund balance $159,369 $77,044 78 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, 1997 With comparative amounts for year ended December 31, 1996 1997 Variance Favorable 1996 Budget Actual (Unfavorable) Actual Revenues: Intergovernmental revenue: Federal $203,453 $290,836 $87,383 $163,722 State 2,493 51,840 49,347 2,493 Charges for services - 249 249 - Total revenues 205,946 342,925 136,979 166,215 Expenditures: Current: General government: Personal services 207,657 207,657 - 110,485 Supplies and other charges 42,693 42,693 - 28,872 Capital outlay 111,112 111,112 - 8,771 Total expenditures 361,462 361,462 0 148,128 Excess (deficiency)of revenues over expenditures (155,516) (18,537) 136,979 18,087 Other financing sources: Sale of fixed assets 5,000 5,000 - - Excess (deficiency)of revenues and other financing sources over expenditures and other financing uses ($150,516) (13,537) $136,979 18,087 - Fund balance-January 1 24,146 6,059 Fund balance- December 31 $10,609 $24,146 79 Exhibit C-7 CITY OF FRIDLEY. MINNESOTA SOLID WASTE ABATEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31. 1997 and 1996 Assets 1997 1996 Cash and investments $ - $4,539 Accounts receivable 20,222 14,458 Due from other governments 6,082 42,586 Total assets $26,304 $61,583 Liabilities and Fund Balance Liabilities: Accounts payable $969 $32,069 Salaries payable 2,078 198 Due to other funds 30,375 - Total liabilities 33,422 32,267 Fund balance: Unreserved: Designated for subsequent year's expenditures - 29,316 Undesignated (7,118) - Total fund balance (7,118) 29,316 Total liabilities and fund balance $26,304 $61,583 80 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. 1997 With comparative amounts for year ended December 31, 1996 1997 Variance Favorable 1996 Budget Actual (Unfavorable) Actual _ Revenues: Intergovernmental revenue: State $76,051 $96,673 $20,622 $78,286 Charges for services 222,991 218,741 (4,250) 145,355 Miscellaneous revenue 1,000 833 (167) 107 Total revenues 300,042 316,247 16,205 223,748 Expenditures: Current: General government: — Personal services 68,826 68,826 - 29,367 Supplies and other charges 282,791 282,790 1 203,181 Capital outlay 1,065 1,065 - 11,050 Total expenditures 352,682 352,681 1 243,598 Excess (deficiency)of revenues over expenditures ($52,640) (36,434) $16,206 (19,850) Fund balance-January 1 29,316 49,166 .— Fund balance- December 31 ($7,118) $29,316 a 81 — Exhibit C-9 CITY OF FRIDLEY. MINNESOTA HRA REIMBURSEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31. 1997 and 1996 Assets 1997 1996 Cash and investments $239 $ - Due from other funds - 731 Total assets $239 $731 Liabilities and Fund Balance Liabilities: Accounts payable $4 $64 Due to other funds - 155 Total liabilities 4 219 Fund balance: Unreserved-undesignated 235 512 Total liabilities and fund balance $239 $731 '^ 82 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, 1997 With comparative amounts for year ended December 31, 1996 1997 Variance Favorable 1996 Budget Actual (Unfavorable) Actual Revenues: Intergovernmental revenue: Housing Redevelopment Authority $16,521 $16,521 $ - $17,249 Total revenues 16,521 16,521 0 17,249 Expenditures: Current: General government: Personal services - - - 132 Supplies and other charges 16,798 16,798 - 16,605 Total expenditures 16,798 16,798 0 16,737 r Excess (deficiency)of revenues over expenditures ($277) (277) $0 512 Fund balance-January 1 512 - Fund balance-December 31 $235 $512 83 Exhibit C-11 CITY OF FRIDLEY, MINNESOTA DRUG AND GAMBLING FORFEITURE SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1997 and 1996 Assets 1997 1996 Cash and investments $10,853 $9,918 Total assets $10,853 $9,918 Liabilities and Fund Balance Liabilities $ - $ - Fund balance: •- Unreserved -designated for drug and gambling enforcement 10,853 9,918 Total liabilities and fund balance $10,853 $9,918 o.. r. 84 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. 1997 With comparative amounts for year ended December 31, 1996 1997 Variance Favorable 1996 Budget Actual (Unfavorable) Actual Revenues: Fines and forfeits $1,090 $1,090 $ - $ - Total revenues 1,090 1,090 0 0 Expenditures: Current: Public safety: Supplies and other charges 155 _ 155 - - Total expenditures 155 155 0 0 Excess (deficiency)of revenues over expenditures $935 935 $0 0 Fund balance-January 1 9,918 9,918 Fund balance-December 31 $10,853 $9,918 85 Exhibit C-13 CITY OF FRIDLEY. MINNESOTA HOUSING REVITALIZATION SPECIAL REVENUE FUND "~ COMPARATIVE BALANCE SHEET December 31. 1997 and 1996 Assets 1997 1996 Total assets $ - $ - Liabilities and Fund Balance ..� Liabilities Accounts payable $ - $344 Due to other funds 48,180 42,035 Total liabilities 48,180 42,379 Fund balance: Unreserved-undesignated (48,180) (42,379) Total liabilities and fund balance $0 $0 • f-. 86 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, 1997 With comparative amounts for year ended December 31, 1996 1997 Variance Favorable 1996 Budget Actual (Unfavorable) Actual Revenues $ - $ - $ - $ - Expenditures: Current: General government: Supplies and other charges 5,801 5,801 - 388 Capital outlay 25,000 - 25,000 41,991 Total expenditures 30,801 5,801 25,000 42,379 Excess (deficiency)of revenues over expenditures (30,801) (5,801) (25,000) (42,379) 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 expenditures $219,199 (5,801) ($275,000) (42,379) Fund balance-January 1 (42,379) - Fund balance- December 31 ($48,180) - ($42,379) 87 Exhibit C-15 CITY OF FRIDLEY, MINNESOTA CHEMICAL ASSESSMENT TEAM SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1997 and 1996 Assets 1997 1996 Total assets $ - $ - Liabilities and Fund Balance .. Liabilities Accounts payable $2,637 $681 Salaries payable 83 - Due to other funds 12,729 1,774 Due to other governments 50 215 Total liabilities 15,499 2,670 '~ Fund balance: Unreserved - undesignated (15,499) (2,670) Total liabilities and fund balance $0 $0 88 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, 1997 With comparative amounts for year ended December 31, 1996 1997 Variance Favorable 1996 Budget Actual (Unfavorable) Actual - Revenues Intergovernmental revenue State $37,630 $37,630 $ - $10,370 Total revenues 37,630 37,630 0 10,370 Expenditures: Current: - Public safety: Personal services 9,338 9,338 - 2,623 Supplies and other charges 41,121 41,121 - 9,885 _ Capital outlay - - - 532 Total expenditures 50,459 50,459 0 13,040 Excess (deficiency)of revenues over expenditures ($12,829) (12,829) $0 (2,670) Fund balance-January 1 (2,670) - Fund balance-December 31 ($15,499) ($2,670) 1 89 o., Exhibit C-17 CITY OF FRIDLEY. MINNESOTA 1 F.C.C. DONATIONS SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1997 and 1996 Assets 1997 1996 r.. Cash and cash equivalents $140,321 $ - Total assets $140,321 $0 Liabilities and Fund Balance Liabilities: Accounts payable $462 $ - Total liabilities 462 0 Fund balance: Unreserved-designated for Fridley Community Center 139,859 - Total fund balance 139,859 0 Total liabilities and fund balance $140,321 $0 a r 90 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. 1997 With comparative amounts for year ended December 31, 1996 1997 Variance Favorable 1996 Budget Actual (Unfavorable) Actual Revenues: Interest on investments $4,460 $4,460 $ - $ - Donations 187,732 187,732 - - Total revenues 192,192 192,192 0 0 Expenditures: Current: Recreation and naturalist: Supplies and other charges 8,977 8,977 - - Capital outlay 43,356 43,356 - - — Total expenditures 52,333 52,333 0 0 Excess (deficiency)of revenues over expenditures $139,859 139,859 $0 0 Fund balance-January 1 - - Fund balance- December 31 $139,859 $0 91 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 FUND COMPARATIVE BALANCE SHEET December 31. 1997 and 1996 ,–..- .-r Special Tax Totals Assets Assessment Increment 1997 1996 Cash and investments $8,005,404 $ - $8,005,404 $10,504,602 Receivables: Special assessments: Unremitted 4,868 - 4,868 6,030 Delinquents 42,723 - 42,723 79,766 --r Deferred 1,593,594 - 1,593,594 1,828,192 Due from HRA - - - 125 Loans 1,465,834 - 1,465,834 - -- Due from other funds 48,179 - 48,179 - Total assets $11,160,602 $0 $11,160,602 $12,418,715 Liabilities and Fund Balance Liabilities: Accounts payable $ - $ - $ - $5,425 Deferred revenue 1,636,318 - 1,636,318 1,907,958 Due to other governments 3,208 - 3,208 - --. Total liabilities 1,639,526 0 1,639,526 1,913,383 Fund balance: -- Reserved for debt service 757,586 - 757,586 623,517 Reserved for long term receivable 1,465,834 - 1,465,834 - Unreserved-undesignated 7,297,656 - 7,297,656 9,881,815 — Total fund balance 9,521,076 0 9,521,076 10,505,332 Total liabilities and fund balance $11,160,602 $0 $11,160,602 $12,418,715 1 _ 94 Exhibit D-2 CITY OF FRIDLEY, MINNESOTA DEBT SERVICE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Year Ended December 31, 1997 With comparative totals for year ended December 31, 1996 Special Tax Totals "' Assessment Increment 1997 1996 Revenues: Special assessments $451,753 $ - $451,753 $531,273 - Interest on investements 602,944 - 602,944 585,054 Interest on loan 37,500 - 37,500 - Total revenues 1,092,197 0 1,092,197 1,116,327 Expenditures: Debt service: - Principal retirement 190,000 9,485,000 9,675,000 175,000 Interest and fiscal charges 81,952 859,705 941,657 896,011 Bond issuance costs - - - 993 _ Miscellaneous 6,549 - 6,549 - Total expenditures 278,501 10,344,705 10,623,206 1,072,004 Excess(deficiency)of revenues over expenditures 813,696 (10,344,705) (9,531,009) 44,323 Other financing sources(uses): Bond proceeds - 9,490,146 9,490,146 3,555 Operating transfers in (out): General Fund (145,821) - (145,821) (134,843) Solid Waste Abatement Fund - - - - ^ Capital Improvements Fund (1,556,887) - (1,556,887) - HRA Component Unit (95,244) 854,559 759,315 797,365 Total other financing sources (uses) (1,797,952) 10,344,705 8,546,753 666,077 Excess (deficiency)of revenues and other financing sources over expenditures and other financing uses (984,256) 0 (984,256) 710,400 Fund balance-January 1 10,505,332 - 10,505,332 9,794,932 Fund balance- December 31 $9,521,076 $0 $9,521,076 $10,505,332 95 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. 1997 With comparative totals for December 31, 1996 Capital Special Totals Assets Improvements Assessments 1997 1996 Cash and investments $7,896,569 $161,128 $8,057,697 $8,039,483 Receivables: Taxes: Unremitted 1,368 - 1,368 823 Delinquent 2,703 - 2,703 4,033 Special Assessments: - Delinquent 105 - 105 - Deferred 9,088 70,349 79,437 73,245 Due from other funds 474,904 - 474,904 892,091 - Due from other governments - 93,340 93,340 20,000 Total assets $8,384,737 $324,817 $8,709,554 $9,029,675 Liabilities and Fund Balance Liabilities: - Accounts payable $5,226 $12,557 $17,783 $138,694 Deposits payable - - - 1,000 Contracts payable 19,576 25,858 45,434 104,989 Deferred revenue 11,896 70,349 82,245 77,278 Due to other funds - 474,903 474,903 892,091 Due to other governments 3,553 - 3,553 65,708 Total liabilities 40,251 583,667 623,918 1,279,760 Fund balance: Reserved for encumbrances 693,871 - 693,871 1,182,367 Unreserved: Designated for fixed asset replacement 1,622,742 - 1,622,742 1,696,045 Designated for park improvements 628,554 - 628,554 681,997 Designated for street improvements 5,399,319 - 5,399,319 4,903,824 Undesignated - (258,850) (258,850) (714,318) Total fund balance 8,344,486 (258,850) 8,085,636 7,749,915 Total liabilities and fund balance $8,384,737 $324,817 $8,709,554 $9,029,675 99 Exhibit E-2 Page 1 of 2 CITY OF FRIDLEY, MINNESOTA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES Year Ended December 31.1997 With comparative totals for year ended December 31, 1996 Capital Special Totals Improvements Assessments 1997 1996 Revenues: Taxes: Current ad valorem taxes $71,155 $ - $71,155 $71,339 Delinquent ad valorem taxes 419 - 419 438 Special assessments 2,560 10,306 12,866 11,451 Total taxes 74,134 10,306 84,440 83,228 Intergovernmental revenue: State credits 15,000 - 15,000 15,000 State aid for construction 667,733 683,772 1,351,505 411,160 Other - 76,739 76,739 66,118 Total intergovernmental revenue 682,733 760,511 1,443,244 492,278 Interest on investments 412,017 (2,171) 409,846 493,027 Miscellaneous revenue: Donations 1,300 - 1,300 21,500 Other 31,140 27,977 59,117 40,978 Total miscellaneous revenue 32,440 27,977 60,417 62,478 Total revenues 1,201,324 796,623 1,997,947 1,131,011 .-t 100 Exhibit E-2 Page 2 of 2 CITY OF FRIDLEY. MINNESOTA CAPITAL PROJECTS FUNDS .. COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES Year Ended December 31. 1997 With comparative totals for year ended December 31, 1996 Aft Capital Special Totals Improvements Assessments 1997 1996 Expenditures: Current: Public works $81,454 $288,188 $369,642 $165,650 Debt service: Loan principal - 4,457 4,457 4,183 Interest - 7,844 7,844 8,117 Bond issuance costs - - - 3,134 Capital outlay 1,989,693 921,922 2,911,615 1,679,135 Total expenditures 2,071,147 1,222,411 3,293,558 1,860,219 ^ Excess (deficiency)of revenues over expenditures (869,823) (425,788) (1,295,611) (729,208) — Other financing sources (uses): Bond proceeds - - - 320,050 Operating transfers in (out): . Storm Sewer Fund (923) 75,367 74,444 322,392 Special Assessment Debt Service Fund 1,556,888 - 1,556,888 - Capital Improvement Fund - 805,889 805,889 710,845 Special Assessments Capital Projects Fund (805,889) - (805,889) (710,845) Total other financing sources (uses) 750,076 881,256 1,631,332 642,442 Excess (deficiency) of revenues and other financing sources over expenditures and other financing uses (119,747) 455,468 335,721 (86,766) Fund balance (deficit) -January 1 8,464,233 (714,318) 7,749,915 7,836,681 '^ Fund balance(deficit) - December 31 $8,344,486 ($258,850) $8,085,636 $7,749,915 101 Exhibit E-3 CITY OF FRIDLEY. MINNESOTA CAPITAL IMPROVEMENTS CAPITAL PROJECT FUND COMPARATIVE BALANCE SHEET December 31. 1997 and 1996 ,.., Totals Assets 1997 1996 Cash and investments $7,896,569 $7,658,070 Receivables: Taxes: Unremitted 1,368 823 Delinquent 2,703 4,033 Special assessments: Delinquent 105 - Deferred 9,088 11,089 Due from other funds 474,904 892,091 Due from other governments - 20,000 Total assets $8,384,737 $8,586,106 Liabilities and Fund Balance Liabilities: Accounts payable $5,226 $100,911 .. Contracts payable 19,576 - Deferred revenue 11,896 15,121 Due to other governments 3,553 5,841 Total liabilities 40,251 121,873 Fund balance: Reserved for encumbrances 693,871 1,182,367 Unreserved: Designated for fixed asset replacement 1,622,742 1,696,045 Designated for park improvements 628,554 681,997 Designated for street improvements 5,399,319 4,903,824 Total fund balance 8,344,486 8,464,233 Total liabilities and fund balance $8,384,737 $8,586,106 102 Exhibit E-4 CITY OF FRIDLEY, MINNESOTA CAPITAL IMPROVEMENTS CAPITAL PROJECT FUND STATEMENT OF REVENUES. EXPENDITURES.AND ... CHANGES IN FUND BALANCE-BUDGET AND ACTUAL Year Ended December 31. 1997 With comparative actual amounts for year ended December 31, 1996 1997 Variance Favorable 1996 Budget Actual (Unfavorable) Actual Revenues: Taxes: "' Current ad valorem taxes $70,550 $71,155 $605 $71,339 Delinquent ad valorem taxes - 419 419 438 Total taxes 70,550 71,574 1,024 71,777 Special assessments - 2,560 2,560 2,110 Intergovernmental revenue: State credits 15,000 15,000 - 15,000 State aid for construction 581,000 667,733 86,733 411,160 Other - - - 66,118 Total intergovernmental revenue 596,000 682,733 86,733 492,278 Interest on investments 265,925 412,017 146,092 481,713 Miscellaneous revenue: Donations 1,300 1,300 - 21,500 Other 10,000 31,140 21,140 40,978 Total miscellaneous revenue 11,300 32,440 21,140 62,478 Total revenues 943,775 1,201,324 257,549 1,110,356 Expenditures: - Current: Public works 215,715 81,454 134,261 41,933 Capital outlay 2,382,956 1,989,693 393,263 378,267 Total expenditures 2,598,671 2,071,147 527,524 420,200 Excess (deficiency)of revenues over expenditures (1,654,896) (869,823) 785,073 690,156 Other financing sources (uses): Operating transfers in (out): Storm Sewer Fund (923) (923) - - Special Assessment Debt Service Fund 1,581,779 1,556,888 (24,891) - Special Assessment Capital Projects Fund (171,606) (805,889) (634,283) (710,845) Total other financing sources(uses) 1,409,250 750,076 (659,174) (710,845) Excess (deficiency)of revenues and other financing sources over expenditures and other financing uses ($245,646) (119,747) $125,899 (20,689) Fund balance-January 1 8,464,233 8,484,922 Fund balance-December 31 $8,344,486 $8,464,233 103 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, 1997 With comparative totals for December 31, 1996 Public Totals - Assets Liquor Utilities 1997 1996 Current Assets: Cash and investments $1,494,158 $5,230,438 $6,724,596 $6,856,135 Accounts receivable 264 1,744,863 1,745,127 1,530,910 Special assessments - 7,721 7,721 191 Due from other funds - 1,329 1,329 - Due from other governments - 28,972 28,972 24,005 Inventories, at cost 264,000 6,098 270,098 253,935 Prepaid items 5,406 271,400 276,806 279,201 Total current assets 1,763,828 7,290,821 9,054,649 8,944,377 - Non-current Assets: Long-term receivable: Metropolitan Council Environmental Services - 251,365 251,365 74,818 .� Special assessments - 367,197 367,197 226,234 Total noncurrent assets - 618,562 618,562 301,052 Property and equipment, at cost: Property and equipment 444,524 31,832,936 32,277,460 31,053,609 Less: accumulated depreciation (263,075) (10,858,032) (11,121,107) (10,321,080) Net property and equipment 181,449 20,974,904 21,156,353 20,732,529 Total assets $1,945,277 $28,884,287 $30,829,564 $29,977,958 Liabilities and Fund Equity "' Current liabilities: Accounts payable $145,321 $26,978 $172,299 $214,884 Deposits payable - - - 1,556 Contracts payable - 35,860 35,860 375,318 Salaries payable 7,534 17,183 24,717 20,808 Due to other funds 87 - 87 - - Due to other governments - 170,434 170,434 290,125 Accrued interest payable - 105,389 105,389 76,029 Bonds payable-current - 260,000 260,000 120,000 Total current liabilities 152,942 615,844 768,786 1,098,720 Long-term liabilities: Bonds payable - 4,431,283 4,431,283 4,690,144 -- Total long-term liabilities 0 4,431,283 4,431,283 4,690,144 Fund equity: Contributed capital - 11,537,624 11,537,624 11,907,544 Retained earnings: Reserved for capital outlay - 2,301,000 2,301,000 2,547,493 Unreserved 1,792,335 9,998,536 11,790,871 9,734,057 - Total fund equity 1,792,335 23,837,160 25,629,495 24,189,094 Total liabilities and fund equity $1,945,277 $28,884,287 $30,829,564 $29,977,958 106 Exhibit F-2 - CITY OF FRIDLEY, MINNESOTA ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Year Ended December 31, 1997 With comparative totals for year ended December 31, 1996 Public Totals Liquor Utilities 1997 1996 Sales and cost of sales: - Sales $3,079,567 $ - $3,079,567 $3,071,737 Cost of sales 2,440,954 - 2,440,954 2,424,824 Gross profit 638,613 0 638,613 646,913 Operating revenues: Water sales and sewer rents - 6,648,102 6,648,102 5,639,422 Other - 12,473 12,473 151,865 Total operating revenues 0 6,660,575 6,660,575 5,791,287 Operating expenses: - Personal services 283,271 959,024 1,242,295 1,240,653 Supplies and other charges: Disposal charges - 3,195,340 3,195,340 3,112,047 . Other 148,778 378,160 526,938 1,051,965 Depreciation 27,803 807,230 835,033 747,617 Total operating expenses 459,852 5,339,754 5,799,606 6,152,282 - Operating income(loss) 178,761 1,320,821 1,499,582 285,918 Non-operating revenues (expenses): - Intergovernmental revenue - - - 50,000 Interest on investments 75,559 194,734 270,293 247,386 Debt service - (256,460) (256,460) (173,553) - Special assessments - 76,274 76,274 229,666 Other - 156 156 295 Total non-operating revenues(expenses) 75,559 14,704 90,263 353,794 - Net income(loss)before operating transfers 254,320 1,335,525 1,589,845 639,712 Operating transfers in (out): -- General Fund (75,000) (75,367) (150,367) (397,392) Capital Improvement Fund - 923 923 - Total transfers in (out) (75,000) (74,444) (149,444) (397,392) - Net income(loss)before extraordinary item 179,320 1,261,081 1,440,401 242,320 Extraordinary gain on issuance of sewer . availability charge credits - - - 80,327 Net income (loss) 179,320 1,261,081 1,440,401 322,647 Credit arising from transfer of depreciation on contributed capital - 369,920 369,920 369,017 _, Retained earnings-January 1 1,613,015 10,668,535 12,281,550 11,589,886 Retained earnings- December 31 $1,792,335 $12,299,536 $14,091,871 $12,281,550 107 Exhibit F-3 CITY OF FRIDLEY, MINNESOTA ENTERPRISE FUNDS COMBINING STATEMENT OF CASH FLOWS Year Ended December 31, 1997 With comparative totals for year ended December 31, 1996 Public Totals Liquor Utilities 1997 1996 --, Cash flows from operating activities: Operating income $178,761 $1,320,821 $1,499,582 $285,918 Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation 27,803 807,230 835,033 747,617 Discount amortization - 694 694 - Changes in assets and liabilities: Decrease(increase)in receivables (264) (538,993) (539,257) 125,796 Decrease (increase) in due from other funds - (1,329) (1,329) 3,312 — Decrease(increase)in due from other governments - (4,967) (4,967) - Decrease(increase)in inventories (15,794) (369) (16,163) (11,961) Decrease(increase) in prepaid items 5,720 (3,325) 2,395 (1,361) Increase (decrease)in payables (10,029) (459,905) (469,934) 137,861 — Intergovernmental revenue - - - 50,000 Other non-operating revenue - 156 156 295 Net cash flows from operating activities 186,197 1,120,013 1,306,210 1,337,477 — Cash flows from non-capital financing activities: Operating transfers in (out) (75,000) (74,444) (149,444) (397,392) Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (30,521) (1,227,891) (1,258,412) (1,740,624) „+ Proceeds from sale of revenue bond - - - 2,595,143 Principal paid on revenue bonds - (120,000) (120,000) (115,000) Interest and paying agent fees on revenue — bonds - (256,460) (256,460) (173,553) Special assessment collections - 76,274 76,274 31,278 Net cash flows from capital and related ..., financing activities (30,521) (1,528,077) (1,558,598) 597,244 Cash flows from investing activities: Interest on investments 75,559 194,734 270,293 247,386 _, Net cash flows from investing activities 75,559 194,734 270,293 247,386 Net increase(decrease)in cash and cash equivalents 156,235 (287,774) (131,539) 1,784,715 Cash and cash equivalents-January 1 1,337,923 5,518,212 6,856,135 5,071,420 Cash and cash equivalents- December 31 $1,494,158 $5,230,438 $6,724,596 $6,856,135 ... a. 108 Exhibit F-4 CITY OF FRIDLEY, MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE BALANCE SHEET December 31. 1997 and 1996 Totals Assets 1997 1996 Current assets: — Cash and investments $1,494,158 $1,337,923 Accounts receivable 264 - Inventories, at cost 264,000 248,206 — Prepaid items 5,406 11,126 Total current assets 1,763,828 1,597,255 Property and equipment,at cost: Land 66,961 66,961 Buildings 130,211 130,211 Improvements other than building 49,633 32,163 Machinery and equipment 197,719 184,667 444,524 414,002 Less: accumulated depreciation (263,075) (235,271) Net property and equipment 181,449 178,731 Total assets $1,945,277 $1,775,986 Liabilities and Fund Equity — Current liabilities: Accounts payable $145,321 $156,800 Salaries payable 7,534 6,171 Due to other funds 87 - Total current liabilities 152,942 162,971 — Fund equity: Retained earnings-unreserved 1,792,335 1,613,015 Total liabilities and fund equity $1,945,277 $1,775,986 109 Exhibit F-5 CITY OF FRIDLEY. MINNESOTA — LIQUOR ENTERPRISE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Years ended December 31, 1997 and 1996 Totals 1997 1996 Sales and cost of sales: Sales $3,079,567 $3,071,737 -y Cost of sales 2,440,954 2,424,824 Gross profit 638,613 646,913 Operating expenses: Selling: Personal services 132,727 109,402 Supplies and other charges 13,862 53,707 Total selling expenses 146,589 163,109 — Administration and overhead: Personal services 150,544 175,080 Supplies and other charges 134,916 147,103 Depreciation 27,803 18,386 Total administration and overhead 313,263 340,569 Total operating expenses 459,852 503,678 — Operating income(loss) 178,761 143,235 Non-operating revenues: Interest on investments 75,559 66,599 Total non-operating revenues 75,559 66,599 Net income(loss) before operating transfers 254,320 209,834 Operating transfers in (out): General Fund (75,000) (75,000) Net income(loss) 179,320 134,834 Retained earnings-January 1 1,613,015 1,478,181 Retained earnings-December 31 $1,792,335 $1,613,015 110 Exhibit F-6 CITY OF FRIDLEY. MINNESOTA — LIQUOR ENTERPRISE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31. 1997 and 1996 Totals 1997 1996 Cash flows from operating activities: Operating income $178,761 $143,235 — Adjustments to reconcile operating income(loss)to net cash flows from operating activities: Depreciation 27,803 18,386 — Changes in assets and liabilities: Decrease(increase)in receivables (264) 2,500 Decrease(increase)in inventories (15,794) (9,702) Decrease(increase)in prepaid items 5,720 (10,679) Increase(decrease)in payables (10,029) (51,954) Net cash flows from operating activities 186,197 91,786 Cash flows from non-capital financing activities: Operating transfers in (out) (75,000) (75,000) Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (30,521) - Cash flows from investing activities: Interest on investments 75,559 66,599 Net cash flows for investing activities 75,559 66,599 Net increase(decrease)in cash and cash equivalents 156,235 83,385 Cash and cash equivalents-January 1 1,337,923 1,254,538 "' Cash and cash equivalents - December 31 $1,494,158 $1,337,923 111 Exhibit F-7 CITY OF FRIDLEY, MINNESOTA PUBLIC UTILITY ENTERPRISE FUND COMPARATIVE BALANCE SHEET December 31. 1997 and 1996 Totals Assets 1997 1996 Current assets: Cash and investments $5,230,438 $5,518,212 Receivables: Accounts 1,744,622 1,527,703 Taxes 241 3,207 Special assessments 7,721 191 Due from other funds 1,329 - Due from other governments 28,972 24,005 Inventories, at cost 6,098 5,729 Prepaid items 271,400 268,075 Total current assets 7,290,821 7,347,122 Noncurrent assets: Long-term receivables: Metropolitan Council Environmental Services 251,365 74,818 - Special assessments receivable 367,197 226,234 Total noncurrent assets 618,562 301,052 Property and equipment, at cost: - Land 154,531 154,531 Buildings 1,529,236 1,529,236 Improvements other than building 9,576,637 8,452,485 Machinery and equipment 2,530,963 2,461,786 Water and sewer lines 18,041,569 18,041,569 Less: accumulated depreciation (10,858,032) (10,085,809) Net property and equipment 20,974,904 20,553,798 Total assets $28,884,287 $28,201,972 Liabilities and Fund Equity Current liabilities: Accounts payable $26,978 $58,084 Deposits payable - 1,556 Contracts payable 35,860 375,318 Salaries payable 17,183 14,637 ., Due to other governments 170,434 290,125 Accrued interest payable 105,389 76,029 Bonds payable-current 260,000 120,000 Total current liabilities 615,844 935,749 Long-term liabilities: Bonds payable 4,431,283 4,690,144 Total liabilities 5,047,127 5,625,893 ., Fund equity: Contributed capital 11,537,624 11,907,544 Retained earnings: Reserved for capital outlay 2,301,000 2,547,493 Unreserved 9,998,536 8,121,042 Total fund equity 23,837,160 22,576,079 Total liabilities and fund equity $28,884,287 $28,201,972 112 Exhibit F-8 — CITY OF FRIDLEY. MINNESOTA PUBLIC UTILITY ENTERPRISE FUND COMPARATIVE STATEMENT OF REVENUES. EXPENSES AND CHANGES IN RETAINED EARNINGS Years ended December 31. 1997 and 1996 Totals 1997 1996 Operating revenues: - Water sales and sewer rents $6,648,102 $5,639,422 Other 12,473 151,865 Total operating revenues 6,660,575 5,791,287 Operating expenses: Personal services 959,024 956,171 — Supplies and other charges: Disposal charges 3,195,340 3,112,047 Other 378,160 851,155 - Depreciation: Purchased assets 437,310 360,213 Contributed assets 369,920 369,018 Total operating expenses 5,339,754 5,648,604 Operating income(loss) 1,320,821 142,683 Nonoperating revenues(expenses): Intergovernmental revenue - 50,000 Interest on investments 194,734 180,787 - Debt service (256,460) (173,553) Special assessments levied 76,274 229,666 Other 156 295 Total nonoperating revenues (expenses) 14,704 287,195 Net income(loss)before operating transfers 1,335,525 429,878 Operating transfers in (out) General Fund (75,367) - Capital lmrovement Fund 923 (322,392) Total transfers in (out) (74,444) (322,392) Net income(loss)before extraordinary item 1,261,081 107,486 Extraordinary gain on issuance of sewer availability charge credits - 80,327 Net income (loss) 1,261,081 187,813 — Credit arising from transfer of depreciation on contributed capital 369,920 369,017 — Retained earnings-January 1 10,668,535 10,111,705 Retained earnings- December 31 $12,299,536 $10,668,535 113 Exhibit F-9 CITY OF FRIDLEY, MINNESOTA PUBLIC UTILITY ENTERPRISE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31.1997 and 1996 Totals 1997 1996 Cash flows from operating activities: Operating income $1,320,821 $142,683 Adjustments to reconcile operating income(loss)to net _,., cash flows from operating activities: Depreciation 807,230 729,231 Discount amortization 694 - Changes in assets and liabilities: Decrease(increase) in receivables (538,993) 123,296 Decrease(increase) in due from other funds (1,329) 3,312 Decrease(increase)in due from other governments (4,967) - Decrease(increase)in inventories (369) (2,259) Decrease(increase)in prepaid items (3,325) 9,318 Increase(decrease)in payables (459,905) 189,815 Intergovernmental revenue - 50,000 Other non-operating revenue 156 295 Net cash flows from operating activities 1,120,013 1,245,691 Cash flows from non-capital financing activities .... Operating transfers out (74,444) (322,392) Net cash flows from non-capital financing activities (74,444) (322,392) Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (1,227,891) (1,740,624) Proceeds from sale of revenue bonds - 2,595,143 Principal paid on revenue bonds (120,000) Interest and paying agent fees paid on revenue bonds (256,460) (288,553) Special assessment collections 76,274 31,278 — Net cash flows from capital and related financing activities (1,528,077) 597,244 Cash flows from investing activities: ., Interest on investments 194,734 180,787 Net cash flows from investing activities 194,734 180,787 — Net increase (decrease)in cash and cash equivalents (287,774) 1,701,330 Cash and cash equivalents-January 1 5,518,212 3,816,882 Cash and cash equivalents - December 31 $5,230,438 $5,518,212 .� 114 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 se.-,ree:sting costs for determining the total cost of providing a service and for assuring that the goods and services provided are properly utilized. These funds are accounted for on a capital maintenance measurement focus and use the accrual basis of accounting. Employee Benefits Fund This fund is used to account for the expenses associated with providing fringe benefits for the City of ..a Fridley 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. lnforrrkatlorystems Fund This fund is used to account: for all revenues and expenses associated with maintaining and upgrading the City's computerized information systems. Exhibit 0-1 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUNDS COMBINING BALANCE SHEET December 31. 1997 With comparative totals for December 31, 1996 — Employee Self Information Totals — Assets Benefits Insurance Systems 1997 1996 Current assets: — Cash and investments $1,072,045 $1,844,073 $880,157 $3,796,275 $3,724,154 Total current assets 1,072,045 1,844,073 880,157 3,796,275 3,724,154 Property and equipment, at cost: Property and equipment - - 1,128,413 1,128,413 1,024,011 Less: accumulated depreciation - - (825,864) (825,864) (738,606) — Net property and equipment 0 0 302,549 302,549 285,405 Total assets $1,072,045 $1,844,073 $1,182,706 $4,098,824 $4,009,559 Liabilities and Fund Equity Current liabilities: Accounts payable $265 $504 $4,144 $4,913 $17,726 Payroll deductions payable 70,301 - - 70,301 69,973 Compensated absences payable 858,690 - - 858,690 850,962 --' Total liabilities 929,256 504 4,144 933,904 938,661 Fund equity: — Contributed capital - 1,000,000 870,619 1,870,619 1,904,392 Retained earnings: Reserved for employee benefits 142,789 - - 142,789 103,285 Unreserved - 843,569 307,943 1,151,512 1,063,221 Total fund equity 142,789 1,843,569 1,178,562 3,164,920 3,070,898 — Total liabilities and fund equity $1,072,045 $1,844,073 $1,182,706 $4,098,824 $4,009,559 116 Exhibit G-2 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES. EXPENSES AND CHANGES IN RETAINED EARNINGS Year Ended December 31. 1997 With comparative totals for year ended December 31, 1996 Employee Self Information Totals Benefits Insurance Systems 1997 1996 Operating revenues: ^ Charges for services $2,287 $ - $153,292 $155,579 $100,640 Total operating revenues 2,287 0 153,292 155,579 100,640 Operating expenses: Personal services 15,527 - - 15,527 22,644 Supplies and other charges 3,670 68,267 29,539 101,476 40,294 Depreciation - - 153,292 153,292 99,758 ^ Total operating expenses 19,197 68,267 182,831 270,295 162,696 Operating income(loss) (16,910) (68,267) (29,539) (114,716) (62,056) Nonoperating revenues: Interest on investments 56,415 101,749 50,575 208,739 198,478 Net income(loss) 39,505 33,482 21,036 94,023 136,422 Credit arising from transfer of - depreciation on contributed capital - - 33,773 33,773 47,687 Retained earnings-January 1 103,284 810,087 253,134 1,166,505 982,396 Retained earnings-December 31 $142,789 $843,569 $307,943 $1,294,301 $1,166,505 117 Exhibit G-3 CITY OF FRIDLEY. MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS Year Ended December 31. 1997 With comparative totals for year ended December 31, 1996 Employee Self Information Totals Benefits Insurance Systems 1997 1996 Cash flows from operating activities: Operating income(loss) ($16,910) ($68,267) ($29,539) ($114,716) ($62,057) Adjustments to reconcile operating income(loss) to net cash flows from operating activities: Depreciation - - 153,292 153,292 99,758 Changes in assets and liabilities: Decrease(increase)in due from other funds - - - - 1,675,706 Increase(decrease)in accounts payable (5) (16,902) 4,094 (12,813) (391) Increase(decrease)in compensated absences payable 7,727 - - 7,727 (28,637) Increase(decrease)in payroll deductions payable 328 - - 328 7,618 Net cash flows from operating activities (8,860) (85,169) 127,847 33,818 1,691,997 Cash flows from capital and related financing activities: Aquisition of fixed assets - - (170,436) (170,436) (140,574) Net cash flows from capital and related financing activities 0 0 (170,436) (170,436) (140,574) Cash flows from investing activities: Interest on investments 56,415 101,749 50,575 208,739 198,478 Net cash flows from investing activities 56,415 101,749 50,575 208,739 198,478 "' Net increase(decrease)in cash and cash equivalents 47,555 16,580 7,986 72,121 1,749,901 — Cash and cash equivalents-January 1 1,024,490 1,827,493 872,171 3,724,154 1,974,253 Cash and cash equivalents-December 31 $1,072,045 $1,844,073 $880,157 $3,796,275 $3,724,154 118 Exhibit G-4 CITY OF FRIDLEY. MINNESOTA EMPLOYEE BENEFITS INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31. 1997 and 1996 Totals Assets 1997 1996 Cash and investments $1,072,045 $1,024,490 Total assets $1,072,045 $1,024,490 Liabilities and Fund Equity Current liabilities: Accounts payable $265 $270 — Payroll deductions payable 70,301 69,973 Compensated absences payable 858,690 850,962 Total current liabilities 929,256 921,205 Fund equity: Retained earnings: Reserved for employee benefits 142,789 103,285 Total liabilities and fund equity $1,072,045 $1,024,490 - 119 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. 1997 and 1996 Totals 1997 1996 Operating revenues: Charges for services $2,287 $881 Operating expenses: General government: Personal services 15,527 14,568 Supplies and other charges 3,670 4,461 Total operating expenses 19,197 19,029 — Operating income(loss) (16,910) (18,148) — Nonoperating revenues: Interest on investments 56,415 54,479 Net income(loss) 39,505 36,331 -� Retained earnings-January 1 103,284 66,953 Retained earnings-December 31 $142,789 $103,284 120 Exhibit G-6 CITY OF FRIDLEY. MINNESOTA EMPLOYEE BENEFITS INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31. 1997 and 1996 Totals 1997 1996 Cash flows from operating activities: Operating income(loss) ($16,910) ($18,148) Adjustments to reconcile operating income(loss)to net cash flows from operating activities: Changes in assets and liabilities: Increase(decrease) in accounts payable (5) (2,130) Increase (decrease) in compensated absences payable 7,727 (28,637) Increase(decrease)in payroll deductions payable 328 7,618 Net cash flows from operating activities (8,860) (41,297) Cash flows from investing activities: Interest on investments 56,415 54,479 Net increase(decrease)in cash and cash equivalents 47,555 13,182 Cash and cash equivalents-January 1 1,024,490 1,011,308 Cash and cash equivalents-December 31 $1,072,045 $1,024,490 121 Exhibit G-7 CITY OF FRIDLEY. MINNESOTA SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31. 1997 and 1996 Totals Assets 1997 1996 Cash and investments $1,844,073 $1,827,493 Total assets $1,844,073 $1,827,493 Liabilities and Fund Equity Current liabilities: Accounts payable $504 $17,406 Fund equity: Contributed capital 1,000,000 1,000,000 Retained earnings: Unreserved 843,569 810,087 Total fund equity 1,843,569 1,810,087 Total liabilities and fund equity $1,844,073 $1,827,493 122 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, 1997 and 1996 . Totals 1997 1996 Operating revenues: $ - $ - Operating expenses: • Personal services - 2,835 Supplies and other charges 68,267 35,833 Total operating expense 68,267 38,668 Operating income(loss) (68,267) (38,668) _ Nonoperating revenues: Interest on investments 101,749 98,134 Net income (loss) 33,482 59,466 Retained earnings-January 1 810,087 750,621 Retained earnings-December 31 $843,569 $810,087 123 Exhibit G-9 CITY OF FRIDLEY, MINNESOTA SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31, 1997 and 1996 Totals 1997 1996 — Cash flows from operating activities: Operating income (loss) ($68,267) ($38,668) Adjustments to reconcile operating income (loss)to net -- cash flows from operating activities: Changes in assets and liabilities: Decrease(increase)in due from other funds - 1,675,706 Increase(decrease) in accounts payable (16,902) 17,371 Net cash flows from operating activities (85,169) 1,654,409 Cash flows from investing activities: Interest on investments 101,749 98,134 Net cash flows from investing activities 101,749 98,134 Net increase(decrease)in cash and cash equivalents 16,580 1,752,543 .... Cash and cash equivalents-January 1 1,827,493 74,950 Cash and cash equivalents- December 31 $1,844,073 $1,827,493 a-. a 124 Exhibit G-10 CITY OF FRIDLEY. MINNESOTA INFORMATION SYSTEMS INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31. 1997 and 1996 Totals Assets 1997 1996 Current assets: Cash and investments $880,157 $872,171 Total current assets 880,157 872,171 Property and equipment, at cost: ^ Machinery and equipment 1,128,413 1,024,012 Less: accumulated depreciation (825,864) (738,606) Net property and equipment 302,549 285,406 Total assets $1,182,706 $1,157,577 Liabilities and Fund Equity Current liabilities: Accounts payable $4,144 $50 Fund equity: Contributed capital 870,619 904,392 Retained earnings: Unreserved, undesignated 307,943 253,134 Total fund equity 1,178,562 1,157,526 Total liabilities and fund equity $1,182,706 $1,157,576 125 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. 1997 and 1996 Totals 1997 1996 Operating revenues: Charges for services $153,292 $99,758 Operating expenses: General government: Supplies and other charges 29,539 5,241 Depreciation 153,292 99,758 Total operating expenses 182,831 104,999 Operating income(loss) (29,539) (5,241) Nonoperating revenues: Interest on investments 50,575 45,865 Net income(loss) 21,036 40,624 -- Credit arising from transfer of depreciation on contributed assets 33,773 47,688 Retained earnings-January 1 253,134 164,822 Retained earnings-December 31 $307,943 $253,134 ^ 126 Exhibit G-12 CITY OF FRIDLEY. MINNESOTA INFORMATION SYSTEMS INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years ended December 31, 1997 and 1996 Totals 1997 1996 Cash flows from operating activities: Operating income ($29,539) ($5,241) Adjustments to reconcile operating income (loss)to net cash flows from operating activities: Depreciation 153,292 99,758 Changes in assets and liabilities: Increase(decrease)in accounts payable 4,094 (15,632) — Net cash flows from operating activities 127,847 78,885 Cash flows from capital and related financing activities: Acquisition of fixed assets (170,436) (140,574) Net cash flows from capital and related financing activities (170,436) (140,574) — Cash flows from investing activities: Interest on investments 50,575 45,865 — Net cash flows from investing activities 50,575 45,865 Net increase(decrease)in cash and cash equivalents 7,986 (15,824) Cash and cash equivalents-January 1 872,171 887,995 Cash and cash equivalents- December 31 $880,157 $872,171 127 . . .... .. . • . . . - . ri,:: • . . • . , . • " •, . . ... . , . . . . . . . . . . • . . . . . . . ,.., • . • • •• ,. •-•:- . . • . . . . ;,••• • • •• . . . . i . . . • • . ' ' . . • . . . • . . - - . , ' ;• - . ' . . • ' • . . • • . 1,-';'.: • . • • . . - . • ' . • . . • ,;••:`_:•,. : • ' • • • .' • ,. . . . ,. . :,•,.. ' • v . . . . • . .. . . , . k . - .• . . . • • . . 1 . , . • . • . ' . . • • • • . , .. . . ... ' • TRUST AND AGENCY FUNDS . . . . I : . -. • • " , • . , . . . • . . .. 'Trust and Agency Funds are used to ac...400.nt:for'assets'held.by a government in a..truStee or' - ... . ......-: .... '.!....• .'....... : 4.IT ! : ar-ent Capacity-r for individuals; private organizations;other governments or other funds. • :............i. ;',...'" "'....... '....,:...''..:....,.....',..:,......2.i ., . .. . . • . . 'Expendable Trust urid ..":.• :... , , '., :', .: ' -: , ..-.. ":-... • :. • ‘... ....: .....).:,,' ' ' ''. ' . • The City of Fridley maintains:Only one Expendable..Trust FUnd that is used to:defray/ the City . . . ,:. . :,.'.... .. .':•.:,.....:,..,..] I: ''..," ' •., :'.: ''. • . adrninistrati\ie Costel'asSoCiatect,with the issuance.of.industrial revenue development bon0s.....,,.: .. -. ..;;...! . .,..ii:.„......-...., :.:..... ....,.,..• -..,:. , . , ....". .....;.; .. ':'.,f;-......i...."..i. .,'.4: ::..•..... ",..:...,..- , ,:..,. ;'::.•:,. ••••:!•':'........... : '... ; ..:',...:,... .1 ' . .'s ...r.•...:... '..':.....:: '.. ,'..i - '....... : 2•'..•...,.. -7 ,...-,.'. ','..,,'',:''' -'''';;/-....`-`.' f'''2.- ..-...:......, l',, ',. •..:'..Six Cities Watershed AgencY Fupd"•:..,i. : 7:-.,......, :: .. : : .. ,::::. :: .,... ...i ;::.i.........-...,-•, .,.....,.. .., ,. , „,,....,:.,.., .T,......,,....,,, -.,,... ..s.,.,„,.:.. . ,, ; ........:: .:......"'',-;..' This fund was established to adeourifor'tfie...cpiletion,of taxeslreCeied:frOm the County on : ::.-.:2,:•.::....:c.:,.!:',.!..,.!........•-...,:,,,,, ,/,..T..ti::),. : ;, . • - ' behalf of the Six Cities V.Watershed District.- ...... :-. : ; .':.: .. . . .:; : ; ::- • : . . - ..•,. ; -...!. Hotel/Mcitet.&jenCyfUrld-, .........;;;. , ...'...':i. :.....:',.,,;.: -..:::...,..... : ..... r. . ,. : ,.....,.'.:. •,,,, , . . ..... ..r.,.- ... ... . ,',...,.....:7,'...... :,,-, : This fLind.WaS;establis,40.0W:a0c,Ount:ferjhe."c011etion.Of a.three percent-4s.•:•.tiat.ria 'i.,,',••:...:'.:......'..'...'...': ,......,' ...-: •-,.. e s been : . imposed or all and tPtel in:the njr00btr)6-:Orel The collection s„,,..;.-..,:-.......:,V:...,....._...•;'.., administered . ., ...' ,',.:...,.....,„:,,.._:,.,,,..,.,,,.,.:j,,;-..„...,...•,,,`,,i,i 6si:the' iti'..oif:fiej-61f Of.the:':Nerit '.MetrO: OnvehtiOri arid yOUtisrn:SUreaU:WhiC6:Wil(..,".:i....:,.;•::',i,,,i',","j,ii,";',---.4.117, 4j use the money to provide e:iri fOrfei..,,atior°,:.tO.,i/is)..fOrS,.01a.....areatearliweei.i0 # 1...;It:io.faCilities.aiailablejl.:..:;. Tr '..: ;.:,....:.'...,!4":.....'......;.. ' .• in this area ....-:-.:.. ..: -....:''.... • ..'7:.......:•,,,- ::. '..-.,:::.:.:;.."-:.-....-... .,._..,.•,. i -::'.......-' '..- - :?......!.,...,......;.'..;..,:..;.:.;. : --.e. . . . :::. ... . ......-...... ::...!...;:.':,...!.;.. ......,:i7,,,,$.:;,...,..!..;.4. i V VV . . . , Deferred Compentatiiin.j'AgericyFurill 1.'. '';';' tr.:::'.. .'...' .; ,.; ....".. ' •- ..... :.:.,':::`..... ...",'-''.. ' :••.. :'" '. : -,.:.1" :.:::: • ":. .:"...,'........:;;.1:;.....-..';'..:. ..3_, ... . - • ,••••• This and acCoUrits'ibrt'ziepc5Sits held in trust withithe'ihternationai'City,MartagersAssociatiph.l'!".,:i ..i.',.:,17'....:,...:,:',:.!:::::',Z,: :,,ti'.:;3". . . . • (ICMA)on behalf of the'City::of:Fridley employees.. Employees pretaicaptributforis to tojs. .....:::•:::,,.•:;,;::1;,::--::,•:':-*,-.44,-,0..-.i organization:throughout their careers which are Used es,a retirement benefit.' .,..- :. '.. ...:,- f.. ;.......::..,.:..,.-.,...;!: Pg.' - '' " ' : .. :. .:.,..:f.. . . ....'..: ,.. ....:.. : .•: . ... , "...,.. .' , :, ,.....2......... .:-..... .. - , ...:!. ... ii ,,....,....:::,; .,....... ".;.... .,,,....:•;:',..-.:...:::-..i . '. . .,- -•....:. ..:,::: ^::: ' ;,. “.r'.....i'.. s.:,-:,.s :,'..: ' :•.• ‘:,. :••:' '•... ':: 7,•:•:• : . :: • .• 1 • ' •-•: ' . ..•::■'...- • i"_;':.: '-' :.••• .... : !•••',.•7: ••‘.1..:-.•■.';•,-''i':•;•'•,^':,;:•:li - . . ::::. - ' '-..: ::•'1: :'': : .;; ':. -...' .'''' .'.. '. -:-:'l 1. :::::':•••••!.';':.'''''...; • :::: : ;'....—'S.' '. . - ''';''' .`:! :.::. :,'''::'.. .:.: .:••. •••• :'::'-•:-:';•J-:,:l1:: - :—''''.'-:::: •-;.`;;.'.'21'. '''''...!•::.-:-.. ..:'.:11;.:::.31;.:-•:',rSt?A 7 ' '.. l. ':'• .• • •' • • '... :.:',' ..,• ,. ::',::, . ''..... ' ,•,•-•:,',••:‘;',•,-r•.'i ....;' s.',.• :''•••. _ ..:..•: .. ..• : •' • '' .• .'' . : ::1!:•,... •' -:;:.Z:-•••..'' ‘• :..... 7.•;:::::•;•'.•••••:::"•'',:, —.-•.f:•••••••'::-....':••••:*,.'•.:;•■:,......!'•';!.••'• ',„' •• ...;;;.',' ..' •'''...': : ' :- '. 7:' . - '• ''' :'''' ..1 ..•A''. .'-.7': ..'i:'...:... : '... -,..,''.::::',, .':.':;. ;..... ..:'• '• . t: ..... ...:'•''..'...','.''...: ‘.;:.:;:;:-':”..:-,•;:;::;;•:.".•.4.1'.:;;;,:4".•,;`,'.:-,',"...lt i :... ' ' ...'.''.., 7 • ...... : , '. .; .. ., . : ,. ':1; ; :';:,,..";:.•';..;:,•'.%.' :. .:-. '; ...;'. :... ,,..... .: :: :1 • •;...,: : ..• :- ...•.•"'.'::" ! :• . ',.,.:.::'.:','..i..:. :.: '.:;'■';',%!.''''::::..'7.';,::' ''.`. .: '... r' .: .. ri ..: . : • . : ' ....'. : . 1'. ":. , .. .,.• .:. ,......''... ' , •:- .::. ''.:, . .: : . :• •. i 1 . -,, :. • ..".,:‘:.:J ..... s'.'.:...,... .,,......;.'...;:r...—:;.'. --, I • .. .. . . : •:.: : . . . ,. . ... ...„,. . , . „ . • . : . . , : , . ..., .... , ,1,..."., . • • - V . • : ..V ,.. . ,. :...,. „:„ -,. •..• . • . . . . : ••., • . • • . . - - • - ., .. • . •• ...... , • . . ... , Exhibit H-1 CITY OF FRIDLEY, MINNESOTA r TRUST AND AGENCY FUNDS COMBINING BALANCE SHEET December 31, 1997 — With comparative totals for December 31, 1996 Expendable Agency Totals — Assets Trust Funds 1997 1996 Cash and investments $31,203 $10,430 $41,633 $43,174 Receivables: Accounts - 2,657 2,657 2,752 Taxes: -- Unremitted - 84 84 52 Delinquent - 505 505 430 Other assets - - - 6,058,906 Total assets $31,203 $13,676 $44,879 $6,105,314 — Liabilities and Fund Balance Liabilities: Deposits payable $7,555 $505 $8,060 $6,070,869 — Due to other governments - 13,171 13,171 12,639 Total liabilities 7,555 13,676 21,231 6,083,508 Fund balance: Unreserved, undesignated 23,648 - 23,648 21,806 Total fund balance 23,648 0 23,648 21,806 — Total liabilities and fund balance $31,203 $13,676 $44,879 $6,105,314 130 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, 1997 and 1996 Totals 1997 1996 Revenues: — Interest on investments $1,842 $1,906 Expenditures - - Increase (deficiency)of revenues over expenditures 1,842 1,906 — Fund balance-January 1 21,806 19,900 Fund balance- December 31 $23,648 $21,806 131 Exhibit H-3 Page 1 of 2 _ CITY OF FRIDLEY, MINNESOTA ALL AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Year ended December 31, 1997 Balance Balance January 1 Additions Deletions December 31 SIX CITIES WATERSHED AGENCY FUND Assets -Cash and investments $6,678 $3,874 $3,053 $7,499 Taxes receivable: Unremitted 52 84 52 84 -- Delinquent 430 505 430 505 Total assets $7,160 $4,463 $3,535 $8,088 Liabilities Due to other governments $7,160 $7,583 $7,160 $7,583 Deposits payable - 505 - 505 - Total liabilities $7,160 $8,088 $7,160 $8,088 HOTEL/MOTEL TAX AGENCY FUND Assets Cash and investments $2,727 $53,473 $53,269 $2,931 Accounts receivable 2,752 2,657 2,752 2,657 Total assets $5,479 $56,130 $56,021 $5,588 Liabilities _ Due to other governments 5,479 5,588 5,479 5,588 Total liabilities $5,479 $5,588 $5,479 $5,588 DEFERRED COMPENSATION AGENCY FUND Assets Deferred compensation - at market $6,058,906 $ - $6,058,906 $ - Total assets $6,058,906 $0 $6,058,906 $0 ~- Liabilities Deposits payable $6,058,906 $ - $6,058,906 $ - - Total liabilities $6,058,906 $0 $6,058,906 $0 132 Exhibit H-3 Page 2 of 2 CITY OF FRIDLEY, MINNESOTA ALL AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES , Year ended December 31, 1997 Balance Balance January 1 Additions Deletions December 31 TOTAL-ALL AGENCY FUNDS Assets Cash and investments $9,405 $57,347 $56,322 $10,430 Receivables: Accounts 2,752 2,657 2,752 2,657 Taxes: Unremitted 52 84 52 84 -- Delinquent 430 505 430 505 Other assets 6,058,906 - 6,058,906 - Total assets $6,071,545 $60,593 $6,118,462 $13,676 Liabilities Deposits payable $6,058,906 $505 $6,058,906 $505 _ Due to other governments 12,639 13,171 12,639 13,171 Total liabilities $6,071,545 $13,676 $6,071,545 $13,676 133 GENERAL FIXED ASSET ACCOUNT GROUP The General Fixed Asset Account Group is set up to account for long-lived assets not accounted for in an enterprise, trust or internal service fund. Exhibit I-1 CITY OF FRIDLEY, MINNESOTA — COMPARATIVE SCHEDULE OF GENERAL FIXED ASSETS December 31, 1997 and 1996 Totals 1997 1996 General fixed assets: Land $2,528,221 $2,526,904 Building 6,598,683 4,894,763 " Improvements other than building 19,272,288 18,197,042 Machinery and equipment 5,766,392 5,608,872 Total general fixed assets $34,165,584 $31,227,581 Investment in general fixed assets from: — General obligation bonds $1,176,647 $1,176,647 Federal and state aid 2,710,683 1,682,960 General fund revenues 11,431,481 11,373,257 Special revenue fund revenues 1,729,289 1,668,029 Special assessments 12,627,951 12,625,391 Private gifts 817,904 774,548 — Other sources 3,671,629 1,926,749 Total investment in general fixed assets $34,165,584 $31,227,581 136 Exhibit 1-2 - CITY OF FRIDLEY, MINNESOTA SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY Year ended December 31, 1997 General Fixed General Fixed Assets Assets Function and Activity 1/1/97 Additions Deletions 12/31/97 - General government: City manager $5,555 $1,270 $3,024 $3,801 Cable TV 74,229 46,822 33,921 87,130 - Accounting 30,713 18,920 24,670 24,963 Management information systems 15,045 - 15,045 - Elections 92,592 - 15,732 76,860 - City clerk/records 93,850 4,389 11,656 86,583 Planning 202,959 23,981 9,507 217,433 Municipal center 3,777,151 29,323 50,532 3,755,942 Total general government 4,292,094 124,705 164,087 4,252,712 Public safety: Public protection 802,245 142,731 91,344 853,632 Fire protection 1,934,623 282,160 21,055 2,195,728 Inspectional services 4,917 - 369 4,548 Civil defense 148,352 - 15,098 133,254 - Total public safety 2,890,137 424,891 127,866 3,187,162 Public works: - Engineering 76,143 11,703 2,388 85,458 Street improvements 17,070,743 1,263,467 393,556 17,940,654 Traffic signal 356,399 - 104,416 251,983 -- Parks 5,137,179 167,914 98,008 5,207,085 Total public works 22,640,464 1,443,084 598,368 23,485,180 - Recreation/naturalist: Recreation 171,506 1,790,695 18,435 1,943,766 Naturalist 1,233,380 74,845 11,461 1,296,764 Total recreation/naturalist 1,404,886 1,865,540 29,896 3,240,530 Total general fixed assets $31,227,581 $3,858,220 $920,217 $34,165,584 137 Exhibit 1-3 CITY OF FRIDLEY, MINNESOTA - SCHEDULE OF GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY Year ended December 31, 1997 Improvements Machinery Other Than and - Function and Activity Total Land Buildings Buildings Equipment General government: - City manager $3,801 $ - $ - $ - $3,801 Cable TV 87,129 - - - 87,129 Accounting 24,963 - - - 24,963 Elections 76,860 - - - 76,860 City clerk/records 86,584 - - - 86,584 Planning 217,433 166,795 557 11,050 39,031 Municipal center 3,755,942 53,948 2,846,100 59,666 796,228 Total general government 4,252,712 220,743 2,846,657 70,716 1,114,596 Public safety: - Public protection 853,632 - - 166,870 686,762 Fire protection 2,195,728 58,656 650,715 200,236 1,286,121 Inspectional services 4,548 - - - 4,548 - Civil defense 133,254 - - 99,690 33,564 Total public safety 3,187,162 58,656 650,715 466,796 - 2,010,995 Public works: Engineering 85,458 - - - 85,458 Street improvements 17,940,654 339,244 381,739 15,618,347 1,601,324 Traffic signal 251,983 - - 251,983 - Parks 5,207,085 1,603,520 704,741 2,165,180 733,644 Total public works 23,485,180 1,942,764 1,086,480 18,035,510 2,420,426 Recreation/naturalist: Recreation 1,943,766 - 1,563,515 202,671 177,580 Naturalist 1,296,764 306,058 451,316 496,595 42,795 - Total recreation/naturalist 3,240,530 306,058 2,014,831 699,266 220,375 Total fixed assets $34,165,584 $2,528,221 $6,598,683 $19,272,288 $5,766,392 - 138 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, 1997 and 1996 1997 1996 — Amount Available And To Be Provided For The Payment of General Long-Term Debt Amount available in Debt Service Funds $9,521,076 $10,505,332 Amount to be provided by future taxes 5,653,924 4,889,415 Total available and to be provided $15,175,000 $15,394,747 General long-term debt payable: — General long-term debt payable: General obligation special assessment improvement bonds $1,510,000 $1,700,000 — General obligation tax increment refunding bonds 9,575,000 9,485,000 General obligation temporary tax increment bonds 4,090,000 4,090,000 Construction loan payable - 119,747 Total general long-term debt payable $15,175,000 $15,394,747 140 _ STATISTICAL SECTION Table 1 CITY OF FRIDLEY, MINNESOTA GENERAL GOVERNMENT EXPENDITURES BY FUNCTION LAST TEN FISCAL YEARS (UNAUDITED) Fiscal General Public Municipal Public Community Recreation/ Debt Year Government Safety Center Works Development(2) Naturalist Service Total 1988 $2,366,779 $2,741,465 $205,654 $2,014,957 $ - $589,771 $2,803,027 $10,721,653 1989 2,013,513 3,030,507 273,095 2,222,203 - 628,397 3,181,419 11,349,134 1990 2,470,439 3,008,700 173,260 2,592,638 - 641,432 15,789,169 24,675,638 1991 2,566,435 3,233,501 165,968 2,213,994 422,381 655,985 1,866,305 11,124,569 — 1992 2,857,536 3,320,123 172,664 2,306,970 378,690 702,421 1,884,325 11,622,729 1993 2,612,941 3,413,297 169,493 2,376,990 407,470 720,759 2,207,891 11,908,841 - 1994 3,206,942 3,552,812 180,104 2,473,128 462,615 780,242 3,495,789 14,151,632 1995 3,954,875 3,821,230 195,949 2,375,472 530,230 850,329 5,636,711 17,364,796 1996 2,145,143 3,863,105 185,917 2,306,088 535,496 759,457 1,102,010 10,897,216 1997 2,497,553 4,109,283 214,490 2,625,810 804,379 572,817 10,635,507 21,459,839 (')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 143 Table 2 CITY OF FRIDLEY, MINNESOTA — GENERAL REVENUE 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 1988 $5,296,520 $378,553 $3,744,038 $160,255 $2,938,911 $12,518,277 — 1989 7,353,139 477,192 4,968,720 158,663 2,682,242 15,639,956 1990 6,900,089 408,966 3,564,426 630,015 2,570,467 14,073,963 1991 7,301,508 425,023 3,445,972 784,962 3,031,408 14,988,873 — 1992 7,336,538 401,178 4,538,566 842,590 3,027,293 16,146,165 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 4,420,212 828,652 3,986,987 1,299,495 1,839,792 12,375,138 1997 4,312,005 792,622 5,410,058 1,313,705 2,176,543 14,004,933 (')Includes General, Special Revenue, Capital Projects and Debt Service Funds. (2)Prior to 1996, the HRA was included as a blended component unit of the City. 144 Table 3 CITY OF FRIDLEY, MINNESOTA CERTIFIED PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (UNAUDITED) Collection Ratio of Certified Current Percent of Prior Total Outstanding Fiscal Tax Tax of Levy Year's Total Collections to Delinquent — Year Levy Collections(1)(2) Collected Taxes Collections Tax Levy Taxes 1988 $3,440,107 $3,373,355 98.06% $106,318 $3,479,673 1.0115:1 $244,842 1989 3,652,452 3,574,837 97.87% 36,610 3,611,447 .9888:1 285,847 — 1990 4,512,647 4,393,986 97.37% 64,357 4,458,343 .9880:1 300,854 1991 4,751,465 4,620,032 97.23% 12,633 4,632,665 .9750:1 320,081 1992 4,751,465 4,575,242 96.29% 36,480 4,611,722 .9706:1 399,739 1993 4,626,465 4,563,742 98.64% 162,911 4,726,653 1.0019:1 217,536 1994 3,678,665 3,578,604 97.28% 6,764 3,585,368 .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 .9876:1 72,063 1997 3,891,612 3,809,416 97.89% 22,115 3,831,531 .9846:1 84,303 (')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 1997 and 1996 was $1,064,176 and $1,040,658, respectively. (2)Excludes collections from properties pledged to tax increment. 145 CITY OF FRIDLEY. MINNESOTA — ESTIMATED MARKET VALUE AND TAXABLE VALUE OF ALL PROPERTY LAST TEN FISCAL YEARS Fiscal year payable 1988 1989 1990 1991 — Assessment year 1987 1988(1) 1989") 1990"' Population, fiscal year 29,336 29,250 28,335 28,313 — Real property: Estimated market value $907,274,900 $941,136,600 $998,231,500 $1,002,812,900 Taxable value: Homestead $94,216,387 $11,864,707 $6,858,848 $7,009,982 Excess and nonhomestead 152,658,373 19,425,676 19,728,534 20,147,442 Less fiscal disparities contribution (37,235,245) (4,351,931) (4,435,055) (4,853,513) — Less tax increment value (14,921,389) (2,524,911) (2,368,717) (2,840,385) Taxable value $194,718,126 $24,413,541 $19,783,610 $19,463,526 — Personal property: Estimated market value $26,731,000 $26,452,800 $27,116,700 $27,606,700 — Taxable value $11,479,525 $1,385,766 $1,369,388 $1,115,388 Totals: Estimated market value $934,005,900 $967,589,400 $1,025,348,200 $1,030,419,600 _ Taxable value $206,197,651 $25,799,307 $21,152,998 $20,578,914 Per market value ratios: Taxable value .221:1 .027:1 .021:1 .020:1 Per capita valuations: Estimated market value $31,838 $33,079 $36,187 $36,393 Taxable value $7,029 $882 $747 $727 Real property: _ Taxable value Fiscal disparities distribution $23,382,622 $3,428,008 $3,817,118 $4,079,539 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 1997. (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, 1996 upon which the 1997 levy was based was$21,347,601. — 146 Table 4 _ 1992 1993 1994 1995 1996 1997 1991(1) 1992") 1993"'(3) 1994") 1995") 1996(" 28,369 28,287 28,104 28,204 28,267 28,419 $1,057,532,000 $1,064,099,200 $1,068,474,200 $1,090,023,902 $1,120,412,065 $1,152,674,700 $6,763,333 $6,980,161 $7,008,373 $7,374,709 $7,784,740 $8,199,059 20,555,478 19,609,068 19,250,219 19,253,892 19,554,250 20,139,316 (4,684,322) (5,274,175) (5,000,902) (4,946,278) (4,974,987) (5,147,086) (3,073,122) (2,536,327) (2,581,487) (2,642,692) (2,692,879) (2,760,628) — $19,561,367 $18,778,727 $18,676,203 $19,039,631 $19,671,124 $20,430,661 — $22,917,200 $23,184,800 $23,308,700 $19,952,700 $19,576,200 $19,576,200 $1,087,658 $1,088,969 $1,071,329 $916,940 $916,940 $916,940 — $1,080,449,200 $1,087,284,000 $1,091,782,900 $1,109,976,602 $1,139,988,265 $1,172,250,900 $20,649,025 $19,867,696 $19,747,532 $19,956,571 $20,588,064 $21,347,601 .019:1 .018:1 .018:1 .018:1 .018:1 .018:1 $38,086 $38,438 $38,848 $39,355 $40,419 $41,563 $728 $702 $703 $708 $730 $757 $3,753,494 $3,463,663 $3,349,769 $2,827,323 $3,007,783 $3,222,432 147 CITY OF FRIDLEY. MINNESOTA SIGNIFICANT MINNESOTA TAX POLICIES December 31. 1997 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 1997 Class Rates Residential Homestead First$75,000 1.00% Over$75,000 2.00 Commercial/Industrial First$100,000 3.00 Over$100,000 4.60 Rentals Apartments: 4+ units 3.40 Less than 4 units 2.30 Title II, MFHA, Sect. 8 2.30 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. This percentage ranges from 1.2%for incomes below$1,000 up to 4%for incomes of$61,930. The maximum refund if$440. 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 $1,500. - 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. 149 CITY OF FRIDLEY. MINNESOTA _ PROPERTY TAX RATES ALL 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) - 1988 15.058 62.181 60.733 67.454 70.880 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% Notes: "'1987-1988 tax rates are expressed as mills; 1989-1995 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. '`'Rice Creek Watershed District is included with School District No. 13, 14 and 16. 150 Table 5 Total School School School School Special District District District District County Districts No. 11(3) No. 13(" No. 14(" No. 16(2'`) 30.766 5.531 113.334 112.022 118.743 122.169 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% 151 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 1988 $782,079 $779,413 99.66% $41,719 $821,132 104.99% $202,296 - 1989 743,555 706,442 95.01% 52,374 758,816 102.05% 168,014 1990 604,960 577,064 95.39% 41,913 618,977 102.32% 151,658 1991 737,712 652,011 88.38% 28,616 680,627 92.26% 215,764 1992 636,842 573,413 90.04% 68,982 642,395 100.87% 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% 74,711 153 CITY OF FRIDLEY. MINNESOTA _ HISTORY OF CERTIFIED TAX LEVIES AND TAX RATES LAST TEN FISCAL YEARS (UNAUDITED) 1988 1989 1990 Certified tax levies: General Fund $3,345,190 $3,556,166 $4,421,519 — General Debt Service Funds - - - Capital Improvement Fund 86,320 87,689 87,689 Subtotal 3,431,510 3,643,855 4,509,208 -- Enterprise Fund - - - Agency Fund 8,597 8,597 3,439 — Total $3,440,107 $3,652,452 $4,512,647 Mill rate (1985-1988);Tax Capacity Rate (1989-1994) — General Fund 14.188 14.614 12.192% General Debt Service Funds 0.000 0.000 0.000% Capital Improvement Fund 0.367 0.378 0.300% _ Enterprise Fund 0.000 0.000 0.000% Subtotal 14.555 14.992 12.492% Agency Fund 0.075 0.066 0.052% Total 14.630 15.058 12.544% 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 1997 and 1996 was$1,064,176 and $1,040,658, respectively. 154 Table 7 - 1991 1992 1993 1994" 1995(" 1996") 1997w - $4,660,276 $4,660,276 $4,535,276 $3,603,266 $3,592,295 $3,821,853 $3,806,950 87,689 87,689 87,689 72,689 72,689 72,689 72,689 - 4,747,965 4,747,965 4,622,965 3,675,955 3,664,984 3,894,542 3,879,639 - - - - - - 8,900 -- 3,500 3,500 3,500 2,710 2,702 3,087 3,073 $4,751,465 $4,751,465 $4,626,465 $3,678,665 $3,667,686 $3,897,629 $3,891,612 14.705% 15.548% 15.153% 15.076% 15.778% 16.258% 15.399% 0.000% 0.000% 0.000% 0.000% 0.000% 0.000% 0.000% _ 0.290% 0.284% 0.300% 0.314% 0.320% 0.307% 0.294% 0.000% 0.000% 0.000% 0.000% 0.000% 0.000% 0.625% 14.995% 15.832% 15.453% 15.390% 16.098% 16.565% 16.318% 0.015% 0.022% 0.021% 0.022% 0.022% 0.024% 0.023% 15.010% 15.854% 15.474% 15.412% 16.120% 16.589% 16.341% 155 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 Special Bonded Debt General — Total Gross Service Fund Assessment, Net General to Total Bonded Fiscal Taxable Bonded Monies Revenue and Bonded Taxable Debt Year Population Value Debt Available HRA Bonds Debt Value Per Capita 1988 29,336 $206,197,651 $31,845,000 $ - $31,845,000 $ - $ - $ - 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 - - - Notes: (')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 1989-1994. — 156 Table 9 — CITY OF FRIDLEY. MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN December 31. 1997 — (UNAUDITED) Market Value $1,172,250,900 — (A)Debt Limit 2%of Market Value $23,445,018 Amount of Debt Applicable to Debt Limit: Total Debt $19,880,000 (B)Deductions: Tax Increment Redevelopment Bonds $13,665,000 Special Assessment Bonds 1,510,000 — Revenue Bonds 4,705,000 19,880,000 Total Amount of Debt Applicable to Debt Limit Legal Debt Margin $23,445,018 Notes: (A)M.S.A. Section 475.53 (see following page) (B)M.S.A. Section 475.51 (see following page) 157 CITY OF FRIDLEY, MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN (CONTINUED) YEAR ENDED DECEMBER 31,1997 — Note(A): -- M.S.A. Section 475.53 et seq. Limit on Net Debt "Subdivision 1. Generally, except as otherwise provided in sections 475.51 to 475.75, no municipality, except a school — district or a city of the first class, shall incur or be subject to a net debt in excess of two percent of the market value of taxable property in the municipality." Note(B): — M.S.A. Section 475.51 Definitions "Subdivision 4. "Net Debt" means the amount remaining after deducting from its gross debt the amount of current revenues which are applicable within the current fiscal year to the payment of any debt, and the aggregate of the principal of the following: (1) Obligations issued for improvements which are payable wholly or partly from the proceeds of special — assessments levied upon property specially benefited thereby, including those which are general obligations of the municipality issuing them, if the municipality is entitled to reimbursement in whole or in part from the proceeds of the special assessments. — (2) Warrants or orders having no definite or fixed maturity. (3) Obligations payable wholly from the income from revenue producing conveniences. (4) Obligations issued to create or maintain a permanent improvement revolving fund. (5) Obligations issued for the acquisition and betterment of public waterworks systems, public lighting, heating or power systems, and any combination thereof, or for any other public convenience from which a revenue is or may be derived. — (6) Debt service loans and capital loans made to a school district under the provisions of sections 124.42 and 124.431. (7) Amount of all money and the face value of all securities held as a debt service fund for the extinguishment of obligations other than those deductible under this subdivision. (8) Obligations to repay loans made under section 216C.37. (9) Obligations to repay loans made from money received from litigation or settlement of alleged violations of federal ._., petroleum pricing regulations. (10) All other obligations which under the provisions of law authorizing their issuance are not to be included in computing the net debt of the municipality." 158 Table 10 CITY OF FRIDLEY, MINNESOTA COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT AND COMPARATIVE DEBT RATIOS December 31, 1997 — (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 $19,880,000 $8,055,242 $11,824,758 100.00% $11,824,758 — Overlapping debt: School Districts: No. 11 135,987,792 37,368,367 98,619,425 1.60% 1,577,911 — No. 14 18,450,000 383,903 18,066,097 100.00% 18,066,097 No. 16 31,995,000 2,021,468 29,973,532 36.80% 11,030,260 _ Metro Council 654,256,659 134,551,921 519,704,738 1.19% 6,184,486 Anoka County 99,937,837 34,778,343 65,159,494 18.04% 11,754,773 Vocational/Technical District No. 916 31,720,000 7,348,446 24,371,554 2.21% 538,611 Overlapping debt 972,347,288 216,452,448 755,894,840 49,152,138 Total direct and overlapping debt $992,227,288 $224,507,690 $767,719,598 $60,976,896 159 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(1) Expenditure 1988 $1,380,000 $1,423,027 $2,803,027 $10,721,653 .2614:1 1989 1,640,500 1,540,919 3,181,419 11,349,134 .2803:1 1990 14,720,000 1,069,169 15,789,169 24,675,638 .6399:1 1991 685,000 1,181,305 1,866,305 11,124,569 .1678:1 1992 715,000 1,169,325 1,884,325 11,662,729 .1616:1 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 9,675,000 894,930 10,569,930 21,549,898 .4905:1 — Notes: — (')Includes General, Special Revenue, Debt Service and Capital Projects. (1)Prior to 1996, the HRA was included as a blended component unit of the City. — 160 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 1988 $2,725,742 $2,943,443 ($217,701) $20,000 $380 $20,380 - 1989 2,879,180 3,134,235 (255,055) - - - - — 1990 3,049,658 3,213,227 (163,569) - - - - 1991 3,115,437 3,408,068 (292,631) - 148,449 148,449 - 1992 3,111,284 3,764,686 (653,402) - 131,761 131,761 - — 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 6,650,542 5,339,753 1,310,789 120,000 256,459 376,459 3.48 Notes: (')Total operating revenue exclusive of interest on investments. (2)Total operating expenses including deprecition. 161 Table 13 CITY OF FRIDLEY. MINNESOTA — DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS (UNAUDITED) Annual Per Average — Fiscal Capita Median School Unemployment Year Population") Income°' Age'') Enrollment(3) Rate)s)(6) a. 1988 29,336 $13,241 29.9 4,367 3.1% 1989 29,250 $13,241 31.0 4,362 2.9% 1990 28,335 (2) $16,431 32.6 (2) 4,371 4.5% — 1991 28,313 $16,347 32.6 (2) 4,392 4.5% 1992 28,369 $16,055 32.6 (2) 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 28,201 $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% Notes: "'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. Amounts for the City of Fridley are not available. (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 (7)National Planning Data Corporation — 162 Table 14 CITY OF FRIDLEY, MINNESOTA CONSTRUCTION,BANK DEPOSITS 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 1988 70 $17,421,494 340 $3,660,384 $934,005,900 $177,123,840 $1,111,129,740 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 Notes: (1)Non-taxable property is reevaluated by the city assessors every six years 163 Table 15 CITY OF FRIDLEY. MINNESOTA PRINCIPAL TAXPAYERS December 31.1997 (UNAUDITED) Percent 1996* 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 Onan Corporation Portable electric generators 18,606,985 1.63% 4 Northwest Racquet&Swim Club Health and Tennis Club 12,851,700 1.13% — 5 Burlington Northern Railroad Operating property 10,415,700 0.91% 6 Electric Hair Styling Cosmetics 9,598,500 0.84% 7 United Defense Systems Naval ordinance 8,048,000 0.71% — 8 Maurice Fillister Georgetown apartments 9,949,482 0.87% 9 East River Road Business Center Business and retail complex 8,555,400 0.75% 10 Retail Trust IV Wal-Mart discount store 5,944,400 0.52% — Total $139,150,267 12.21% Notes: `The 1997 levy was based upon the January 2, 1996 taxable value. 164 Table 16 CITY OF FRIDLEY, MINNESOTA INSURANCE COVERAGE December 31, 1997 (UNAUDITED) All risk perils, 100% coinsurance: Buildings and contents: Blanket, agreed amount endorsement, replacement cost coverage $27,301,096 Contractor's equipment $1,168,956 • Boiler and machinery $300,000 Municipal general liability: — Each occurrence limit $600,000 Products/completed operations aggregate limit $600,000 Failure to supply annual aggregate limit $600,000 EMF annual aggregate limit $1,200,000 Fire damage limit $50,000 Medical expense limit $1,000 Medical expense aggregate occurrence limit $10,000 Limited pollution liability limit $600,000 Lead and asbestos liability limit $250,000 Land use regulation limit $1,000,000 Automobile liability: Liability $600,000 Personal injury protection Statutory Uninsured/underinsured motorist $600,000 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 165 Table 17 Page 1 of 3 CITY OF FRIDLEY, MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION December 31, 1997 (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 5, 1996 Registered voters 18,767 Number of votes cast 13,324 Percent(%)of registered voters voting 71.0% Population: 1950 - Federal Census 3,796 1960 - Federal Census 15,182 — 1965- Federal Census 24,789 1970 - Federal Census 29,233 1980- Federal Census 30,228 — 1985- Estimated by Metropolitan Council 29,440 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 Permanent Employees --As of December 31 1986 125 _ 1987 125 1988 126 1989 126 1990 126 1991 137 1992 137 1993 135 1994 140 1995 136 1996 136 — 1997 136 167 Table 17 Page 2 of 3 — CITY OF FRIDLEY, MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION (CONTINUED} December 31, 1997 (UNAUDITED) Fire protection: — Number of stations 3 Volunteer firefighters 32 Full-time firefighters 5 — 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, 1997 8,100 — Daily average consumption (gallons) 4.30 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, 1997 8,112 Average daily flow(includes infiltration/inflow) 5.64 million gallons 168 Table 17 _ Page 3 of 3 CITY OF FRIDLEY, MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION (CONTINUED) December 31, 1997 (UNAUDITED) - Parks and recreation areas: Developed 420 Undeveloped 262 Total 682 Acres — City and County Parks Schools Total — Number of: Hockey rinks 6 2 8 General skating rinks 14 2 16 - 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 11 169 Table 18 CITY OF FRIDLEY. MINNESOTA _ GENERAL INFORMATION December 31. 1997 UNAUDITED) Location -Transportation The City of Fridley, with a total land area of eleven square miles and an estimated population of 28,204, 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 181 certified personnel in the education of about 2,630 students. Grace Parochial High School has an enrollment of approximately 945. _ Portions of the Columbia Heights School District (13), the Spring Lake Park School District (16) and Anoka/Hennepin School District (11) also lie within the City of Fridley. Those districts have an estimated enrollment of 1,330 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 — Medtronics, Inc. Electro-medical devices and hdqtrs. 4,000 United Defense Systems Pumps and naval ordinance 1,500 — Cummins Portable generators, electronic equipment 1,265 Minco Products Electronic devices 700 Kurt Manufacturing Machine parts 615 — McGlynn's Bakery 502 Unity Hospital Medical services 429 Target Stores, Warehouse Discount department store 412 Burlington Northern Railroad Railroad company 400 — Parsons Electric Electric contractor 400 170