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1993 CAFR COMPREHENSIVE ANNUAL FINANCIAL REPORT II Elf ..., - .._ 1*, •=-:,.-- , -,t,, ,,- -.1..- --,4 CII OF FRIDLEY MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 1993 CITY OF FRIDLEY, MINNESOTA Comprehensive Annual Financial Report December 31 , 1993 — Prepared by: Department of Finance — Richard D. Pribyl Finance Director _ Howard D. Koolick Assistant Finance Director CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1993 TABLE OF CONTENTS EXHIBIT PAGE INTRODUCTORY SECTION — List of Elected and Appointed Officials 1 Organizational Structure 2 City Manager's Letter of Transmittal 3 Chief Executive Officer's Letter of Transmittal 5 — Certificate of Achievement for Excellence in Financial Reporting 15 FINANCIAL SECTION Auditors' Opinion 17 General Purpose Financial Statements Combined Financial Statements - Overview Combined Balance Sheet - All Fund Types and Account Groups A-1 20 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types and Expendable Trust Funds A-2 24 — Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - — General, Special Revenue and Budgeted Capital Project Fund Types A-3 26 Combined Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Types A-4 29 Combined Statement of Cash Flows — All Proprietary Fund Types A-5 30 Notes to Financial Statements 32 Financial Statements of Individual Funds: General Fund: Comparative Balance Sheet B-1 65 — Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual B-2 66 Schedule of Revenues and Other Financing Sources - Budget and Actual B-3 67 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT _ YEAR ENDED DECEMBER 31, 1993 TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE FINANCIAL SECTION (CONTINUED) General Fund: (continued) 17 Schedule of Expenditures and Other Financing Uses - — Budget and Actual B-4 69 Special Revenue Funds: Combining Balance Sheet C-1 76 Combining Statement of Revenues, Expenditures and — Changes in Fund Balances C-2 78 Cable TV Fund: Comparative Balance Sheet C-3 80 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-4 81 Grant Management Fund: — Comparative Balance Sheet C-5 82 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-6 83 Solid Waste Abatement Fund: — Comparative Balance Sheet C-7 84 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-8 85 HRA Reimbursement Fund: — Comparative Balance Sheet C-9 86 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-10 87 Drug and Gambling Forfeiture Fund: Comparative Balance Sheet C-11 88 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-12 89 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1993 TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE FINANCIAL SECTION (CONTINUED) HRA Special Revenue Fund: Comparative Balance Sheet C-13 90 Statement of Revenue, Expenses, Expenditures and Changes in Fund Balances C-14 91 Debt Service Funds: — Combining Balance Sheet D-1 93 Combining Statement of Revenues, Expenditures and — Changes in Fund Balance D-2 94 Capital Projects Funds: Combining Balance Sheet E-1 96 Combining Statement of Revenues, Expenditures and — Changes in Fund Balances E-2 98 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-1 105 Combining Statement of Revenues, Expenses and Changes in Retained Earnings F-2 106 Combining Statement of Cash Flows F-3 107 Liquor Fund: Comparative Balance Sheet F-4 108 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings F-5 109 Comparative Statement of Cash Flows F-6 110 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT — YEAR ENDED DECEMBER 31, 1993 TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE FINANCIAL SECTION (CONTINUED) Public Utility Fund: Comparative Balance Sheet F-7 111 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings F-8 112 — Comparative Statement of Cash Flows F-9 113 Internal Service Funds: — Combining Balance Sheet G-1 115 Combining Statement of Revenues, Expenses and Changes in Retained Earnings G-2 116 Combining Statement of Cash Flows G-3 117 Employee Benefits Fund: — Comparative Balance Sheet G-4 118 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-5 119 Comparative Statement of Cash Flows G-6 120 — Self Insurance Fund: Comparative Balance Sheet G-7 121 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-8 122 Comparative Statement of Cash Flows G-9 123 Trust and Agency Funds: Combining Balance Sheet H-1 126 Industrial Development Revenue Bond Trust Fund: Comparative Statement of Revenues, Expenditures and Changes in Fund Balance H-2 125 All Agency Funds: — Combining Statement of Changes in Assets and Liabilities H-3 128 CITY OF FRIDLEY, MINNESOTA _ COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1993 TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE FINANCIAL SECTION (CONTINUED) General Fixed Assets: Comparative Schedule of General Fixed Assets I-1 131 Schedule of Changes in General Fixed Assets - By Function and Activity 1-2 132 Schedule of Changes in General Fixed Assets - By Function and Activity 1-3 133 General Long-Term Debt: — Comparative Schedule of General Long-Term Debt J-1 135 SUPPLEMENTAL INFORMATION Independent Auditor's Report on Compliance with Requirements Applicable to Nonmajor Federal Financial Assistance Program Transactions 137 Independent Auditor's Report on the Internal Control Structure in Accordance with Government Auditing Standards 139 Independent Auditor's Report on Internal Control Structure Used in Administering Federal Financial Assistance Programs 143 Independent Auditor's Report on Compliance with General Requirements Applicable to Federal Financial Assistance Programs 147 Independent Auditor's Report on Supplementary Information - Schedule of Federal Financial Assistance 149 Compliance Report Based on an Audit of General Purpose Financial Statements Performed in Accordance with Government Auditing Standards 151 Schedule of Federal Financial Assistance K-1 153 Schedule of Assessed Valuation and Long-Term Debt — for the Tax Increment Financing District K-2 154 Schedule of Sources and Uses of Public Funds — for the Tax Increment Financing District K-3 155 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT _ YEAR ENDED DECEMBER 31, 1993 TABLE OF CONTENTS (CONTINUED) TABLE PAGE STATISTICAL SECTION — General Governmental Expenditures by Function - Last Ten Fiscal Years 1 157 General Revenues by Source - Last Ten Fiscal Years 2 158 Certified Property Tax Levies and Collections - - Last Ten Fiscal Years 3 159 Assessed and Estimated Market Value of All Taxable Property - Last Ten Fiscal Years 4 160 Significant Minnesota Tax Policies 162 Property Tax Rates Per $1,000 of Assessed Value and Calculated Tax Levies - All Overlapping Governments - Last Ten Fiscal Years 5 164 Special Assessment Levies and Collections - Last Ten Fiscal Years 6 166 History of Certified Tax Levies and Actual Mill Rates - Last Ten Fiscal Years 7 168 — Ratio of Net General Bonded Debt to Assessed Values and Net Bonded Debt Per Capita - Last Ten Fiscal Years 8 170 Computation of Legal Debt Margin 9 172 Computation of Direct and Overlapping Bonded Debt and — Comparative Debt Ratios 10 174 Ratio of Annual Debt Service Expenditures for General Bonded Debt — to Total General Government Expenditures - Last Ten Fiscal Years 11 175 Revenue Bond Coverage - Last Ten Fiscal Years 12 176 Demographic Statistics - Last Ten Fiscal Years 13 177 Construction, Bank Deposits and Property Value — - Last Ten Fiscal Years 14 178 Principal Taxpayers 15 179 Insurance Coverage 180 Miscellaneous Statistical Information 181 — General Information 184 INTRODUCTORY SECTION a. a a 4 ... a ... .. CITY OF FRIDLEY. MINNESOTA ELECTED AND APPOINTED OFFICIALS DECEMBER 31. 1993 ELECTED OFFICIALS Term of Office Expires December — Mayor William J. Nee 1996 Councilmember At Large Nancy J. Jorgenson 1996 Councilmember, Ward I Steven E. Billings 1994 Councilmember,Ward II Dennis L Schneider 1994 Councilmember,Ward Ill Edward J. Fitzpatrick (retired 1994 November 1, 1993) Note: Ann R. Bolkcom was elected on January 11, 1994 to represent Ward III for the remaining portion of Mr. Fitzpatrick's term. — APPOINTED OFFICIALS City Manager - William W. Bums City Attorney - Virgil C. Herrick 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 - James P. Hill (retired 7/31/93) - David H. Sallman (appointed 8/1/93) 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 1993 Total Authorized Positions(135) CITY MANAGER(8) I City Manager Asst to City Manager Personnel Technician Public Information Specialist Secretary to the City Manager Personnel Secretary FINANCE(24) I I POLICE(44) I I FIRE(8) I I PUBLIC WORKS(37) I I RECREATION&NATURALIST(9)I I COMMUNITY DEVELOPMENT(9) Finance Director-Treasurer Public Safety Director- Fire Chief Director of Public Works Director of Recreation&Nat Director of Community Develop Secretary Emergency Management Director Dep Fire Chief Oper Analyst Sr Citizen Program Coordinator Secretary Staff Accountant Secretary (3)Firefighter Secretary Secretary Accountant Dep Pub Safety Dir Secretary BUILDING INSPECTION(3) Lieutenant ENGINEERING(4) NATURALIST 4 ACCOUNTING(7) (4)Sergeant ( ) Chief Official Asst Public Works Dir Nat Res Coordinator Secretary Asst Finance Director (3)Corporal Engineering Tech (2)Interpretive Specialist Accounting Specialist (23)Patrol Officer Engineering Aide-Admin Receptionist/Clerk Typist PLANNING(5) Utility Billing Clk Pub Sfty Projects Coor Engineering Tech/Inspector Planning Coordinator General Accountant (2)Crime Prey Spec RECREATION(2) Code Enf Officer-Plan Asst Acctg-Data Proc Clk Office Supervisor PW MAINTENANCE(32) Program Supervisor (2)Planning Assistant Acctg-Data Proc Clk (2)Senior Office Asst Superintendant Program Specialist (1)Secretary Acctg-Data Proc Clk (4)Office Asst Secretary Street Foreman ASSESSING(3) (4)PSW-D Assessor Appraiser (3)Mechanic,Level B Assmt Clk/Appraiser Asst (1)PSW-C (3)PSW-A MIS(2) Water Foreman (3)PSW-D MIS Technician PSW-B MIS Specialist Sewer Foreman PSW-D CITY CLERK-RECORDS(3) PSW-C City Clerk PSW-B Receptionist-Lic Clerk PSW-A Records Retention Spec Park Foreman LIQUOR(5) (4)PSW-D PSW-A Liquor Operations Manager (2)Liquor Store Manager (2)LC)Store Clerk 1 1 I 1 I I 1 1 1 1 I I 1 1 1 1 1 1 -- CITY OF FRI DLEY — FRIDLEY MUNICIPAL CENTER•6431 UNIVERSITY AVE. N.E. FRIDLEY, MN 55432•(612)571-3450• FAX (612)571-1287 June 16, 1994 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, 1993. The Report includes an excellent and comprehensive letter from Richard D. Pribyl, Director of Finance and Howard D. Koolick, Assistant Finance Director, which provides a brief description of some of the activities in which the City is currently involved. Also highlighted in the letter are some of the more important financial management practices employed by the City's administrative staff. I would like to express my appreciation and commendation to them and the Finance Division staff for the manner in which the accounts are kept and the Report presented. I would also like to express appreciation for the commendable administrative financial management of the several departments and divisions by the respective department and division heads as revealed by this Report. Very truly yours, William W. Burns City Manager 3 CI1YOF FRIDLEY FRIDLEY MUNICIPAL CENTER •6431 UNIVERSITY AVE. N.E. FRIDLEY, MN 55432•(612)571-3450• FAX(612)571-1287 June 16, 1994 Mr. William W. Burns, City Manager — Mayor William J. Nee and Council Members Fridley, Minnesota 55432 Dear Mr. Burns, Mayor Nee and Council Members: The Comprehensive Annual Financial Report of the City of Fridley, Minnesota, for the fiscal year ending December 31, 1993, 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 1992. It is our belief that the accompanying fiscal year 1993 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 four sections: Section I is the introductory section and contains the table of contents, letter of transmittal, and other appropriate material. Section II is the financial section and contains the auditors' opinion, the combined financial statements, notes to the financial statements, combining statements, individual fund statements, and account group statements. Section III is the supplemental information section which includes information regarding federal programs and tax increment financing activity. Section IV is the statistical section which includes the previous year's financial and non-financial data. 5 CITY OF FRIDLEY, MINNESOTA Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. We believe the data as presented is accurate in all material aspects, that it is presented in a manner designed to fairly set forth the financial position and results of operations of the City as measured by the financial activity of its various funds, and that all disclosures necessary to enable the reader to gain the maximum understanding of the City's financial activity have been included. 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 1993 population of 28,369. 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 redevelopment projects in the past and for the future. -- 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 4% for the last several years with very little change. Office and retail space continue to be readily available. The market values for these properties continue to decline slightly, although they appear to be recovering slowly. The Twin City area continues to receive a large influx of tourists to visit the Mall of America, the nation's largest mall which includes a seven acre indoor amusement park. While the hospitality industry adjacent to and near the Mall, is benefitting, the City of Fridley, located 25 miles from the Mall, receives little or no — benefit from the tourist traffic. Long term growth in Fridley's economy will result from new construction and redevelopment within the City's industrial and commercial areas. During 1993, the City welcomed a number of new businesses. Early spring saw the opening of a Wal-Mart Store in the northern portion of the City. Sheet Metal Connectors, a producer of metal ventilation equipment, moved to Fridley from Minneapolis. Eco Plating, which produces electronic components, opened a new location in Fridley. It is new development and "' redevelopment such as these projects that will help Fridley grow. MAJOR INITIATIVES — During 1993, the City Council focused significant attention on the quality of the housing stock within the City. At Council's request, the Housing and Redevelopment Authority (HRA) hired a housing coordinator to work with property owners interested in renovating and remodeling their homes. To accomplish this goal, several home improvement loan programs were begun towards the end of the year in addition to the acquisition and demolition of blighted properties by the HRA. The City Council also began working on rental property issues with the ultimate goal of beginning of rental housing -- 6 CITY OF FRIDLEY, MINNESOTA — GENERAL INFORMATION (CONTINUED) .. MAJOR INITIATIVES (CONTINUED) inspection program. During 1994 public hearings will be held on a proposed ordinance with adoption of a final ordinance anticipated before the end of 1994. During the year, the City of Fridley directed a number of construction projects including the building of a booster station along 63rd Avenue, improvements to Moore Lake and Riverview Heights parks, a water connection to the clean up of the Twin Cities Army Ammunitions Plant, a regional fire training facility, and the annual overlay and reconstruction of various City streets. The sealcoating program for 1993 was significantly reduced while the City awaited testing results from the State regarding several new methods of sealcoating. Internally, the City continued installing and improving the HTE, Inc. accounting software which was installed in 1992. Towards the end of 1993, the miscellaneous receivable and billing module was installed. This module, as well as those installed in 1992, resulted in several modifications and changes in procedures which were designed to increase efficiency and maximize the benefits of the software. The budgeting process was also automated resulting in increased efficiency and more accurate projections. In addition, the City Council received the consultant's recommendation regarding their review of all City fees. The report and any fee increases will be discussed by the City Council in early 1994. Finally, the organization of the City's liquor operation was modified with the hiring of a Liquor Operations Manager and a Store Manager. We were also honored to receive the Distinguished Budget Presentation Award for our 1993 Budget. This represented the fifth consecutive year in which the City has received this award. 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. One alternative is to share services and facilities between the City and neighboring cities. Along these lines, the City completed negotiations with the United States Army and a neighboring city to receive excess potable water generated from the Army's clean up efforts at the Twin Cities Army Ammunition Plant. Construction of this project began in 1993 and the City should start receiving water in 1994. Internally, we will continue to review our operation and to make changes to improve our effectiveness and efficiency. The fixed asset module of the HTE Inc. computer software is scheduled for installation during 1994. In addition, increased familiarity with the report writer feature of the software will allow all users the ability to design reports tailored to their needs. The reorganization of the liquor store operation will continue in 1994 with the hiring of a second store manager and two full-time clerks. It is anticipated that once this new structure is in place the profitability of the operation will increase. Significant projects budgeted for 1994 in the five year capital improvement plan include: selection and installation of an electronic voice response unit to allow citizens's to access municipal information 24 hours a day; purchase of a new Class A pumper truck; an expanded sealcoat and street reconstruction project; construction of an activity building at Commons Park; rebuilding of two lift stations; repair of Locke Lake Dam; and the annual well, reservoir and pump house maintenance programs. • 7 CITY OF FRIDLEY, MINNESOTA FINANCIAL INFORMATION INTERNAL CONTROLS -- In developing and improving the City's accounting system, consideration is given to the adequacy of internal accounting controls. Internal accounting controls are designed to provide reasonable, but not „ absolute, assurance regarding the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and the evaluation of costs and benefits requires "' estimates and judgments by management. All internal control evaluations occur within the above framework. We believe that the City's internal ••• accounting controls adequately safeguard assets and provide reasonable assurance of the proper recording of financial transactions. BUDGETARY CONTROLS A complete budgetary system of accounts is maintained for the General and Special Revenue Funds. — Budgetary control is maintained in compliance with the City Charter Requirements. The Charter provides that it is the duty of the City Manager to strictly enforce the provisions of the budget. The management policy of the City is such that the existence of a particular item or appropriation in the approved budget does not mean that it will or must be automatically expended. It is the policy of the City to control budgets at the expenditure category level. Budget adjustments between City divisions are made upon the approval of a resolution by the City Council. The City Charter provides that the City Council shall not have power to increase the total amount of the budget, whether by insertion of new — items or otherwise, beyond the estimated revenue unless the actual revenue exceeds such revenue estimates, and in that event not beyond such actual revenue. There is a constant review process. Expenditures are not approved until it has been determined that 1) the expenditure is necessary, 2) adequate funds have been appropriated, and 3) funds are available. CASH MANAGEMENT -- All temporary cash surpluses during the year are invested in various securities 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 3.10%to 11.90%. 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, 1993 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 totalling $21,631,542. Of this outstanding debt, $3,575,000 represents special assessment debt with government commitment, $13,515,000 represents general obligation tax increment refunding bonds, $2,255,000 relates to tax increment issues supported by revenue from the established tax increment areas, $2,155,000 represents general obligation water revenue bonds and$131,542 represents a construction loan from the State of Minnesota. During 1993, the City retired the remaining portion of the 1980 Special Assessment Bonds by exercising the call provision contained in the bond resolution. 8 CITY OF FRIDLEY, MINNESOTA FINANCIAL INFORMATION (CONTINUED) ... DEBT ADMINISTRATION (CONTINUED) 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 commercial/industrial property valuations or growth be placed in an areawide 'pool', and shared according to specific criteria. TAX INCREMENT DISTRICTS The City Council took action on May 7, 1979 to form the first of twelve tax increment districts. In 1985, the individual districts were combined into one redevelopment district to more easily manage the overall activities. All of the districts have been established in economically depressed areas within the City. With the successful relationship that the City and the Housing and Redevelopment Authority have developed, many benefits have been derived. GENERAL GOVERNMENT FUNCTIONS The following schedule presents a summary of the General, Special Revenue, Debt Service, Capital Projects and Expendable Trust Funds' revenues for the fiscal year ended December 31, 1993. Percent Increase/ Revenues Amount of Total (Decrease) Taxes and special assessments $7,521,395 44.50% $184,857 Licenses and permits 410,135 2.43% 8,417 Intergovernmental 4,417,835 26.14% (120,731) Charges for services 928,736 5.49% 86,146 Fines and forfeits 203,792 1.21% (36,088) Interest on investments 3,034,489 17.95% 551,702 —' Miscellaneous 386,424 2.29% 77,478 Total $16,902,806 100.00% $751,781 9 CITY OF FRIDLEY, MINNESOTA FINANCIAL INFORMATION (CONTINUED) GENERAL GOVERNMENT FUNCTIONS (CONTINUED) — The most significant changes in revenues from the prior year were in taxes and special assessments, intergovernmental and interest revenue categories. The large increase in taxes and special assessments is due to an increase in delinquent tax and special assessment collections during 1993. — Delinquent tax collections were $162,911, an increase of $126,571. A large portion of this increase is related to the HRA's purchase of the Lake Pointe Property. As part of this purchase, the HRA was required to pay all delinquent taxes including penalty. Intergovernmental revenue's decrease is due — to a $250,000 one-time grant the City received in 1992 for McGlynn's Bakery. All other intergovernmental revenues showed only minor increases or decreases. Finally, interest on investments increased significantly due to increased fund balance, favorable investment rates of which the City was — able to take advantage and liquidating several investments whose rates were substantially higher than the market. 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, 1993. Percent Expenditures Amount of Total Increase Current: "-' General government $2,612,941 18.68% ($247,157) Public safety 3,413,297 24.40% 93,174 Civic center 169,493 1.21% (3,171) Public works 2,376,990 16.99% 70,020 Community development 407,470 2.91% 28,780 Recreation and naturalist 720,759 5.15% 18,338 — Debt service 2,207,891 15.78% 323,566 Capital outlay 2,082,293 14.88% (4,601,976) Total $13,991,134 100.00% ($4,318,426) The most significant change is in the capital outlay category. The decrease shown is caused by the 1992 acquisition of the Lake Pointe property (4,700,000). General government and debt service also show substantial changes. The general government decrease is caused by the pass-through of the aforementioned $250,000 grant to McGlynn's Bakery in 1992. After factoring out this one-time — expenditure, there is only a slight increase from 1992 to 1993. The debt service increase is from calling the 1980 Special Assessment Bonds. The City expended $250,000 to call these bonds in 1993. Excluding capital outlay, the McGlynn's pass through grant and debt service expenditures, the overall increase in other categories is 2.2% which is somewhat reflective of inflation. 10 CITY OF FRIDLEY, MINNESOTA — FINANCIAL INFORMATION (CONTINUED) GENERAL GOVERNMENT FUNCTIONS (CONTINUED) 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 years expenditures, contingencies and for replacement of fixed assets at the end of each fiscal year. ENTERPRISE OPERATIONS The Enterprise Funds account for the financing of services to the general public in which all or most of the costs involved are paid in the form of charges by the users of such services. In the City of Fridley, Enterprise Funds are used to account for the operation of the public utility system and two municipal liquor stores. Except for ownership, Enterprise Funds bear a close resemblance to privately owned utility or service enterprises. Liquor Fund The Liquor Fund was established to account for the operation and financing of the City-owned municipal liquor stores. The City operates two liquor stores, one at 6289 Highway 65, and the other at 214 Mississippi Street. The City owns the store at the Highway 65 location and currently has a lease with one year options at 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 which use wholesale pricing. Retained earnings of the Liquor Fund were $1,407,355 on December 31, 1993 as compared to $1,274,852 at the closing of the last fiscal year. Income before operating transfers decreased from $162,222 in 1992 to $132,503 in 1993. 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 Waste Control Commission of $145,793 representing the City's share of the equity in the Minneapolis Sewer System which was acquired by the Commission on January 1, 1971. This amount will be paid to the City by means of issuing credits against future sewer billings from the Commission. These credits will be applied in annual installments with interest through 1999. The assets for the Water and Sewer Distribution system, originally financed by special assessments, were transferred from General Fixed Assets to the Public Utility Fund in 1978. Additional Fixed Assets ..., were transferred in 1979, 1984, 1989, 1990, 1991, 1992 and 1993. 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, 1993 were $10,102,668 compared to $10,266,263 at the closing of the last fiscal year. RISK MANAGEMENT The Self Insurance Fund was set up to account for all revenues and expenditures associated with the $100,000 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 feasibility of self insuring all or a portion of other policies. In 1990, $1,000,000 11 was transferred from the General Fund to the Self Insurance Fund. 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) Fridley Police Relief Association, for Police Officers hired prior to December 15, 1975. 3) Public Employees Retirement Police and Fire Plan, covering the City's full-time Firemen and Police Officers hired after December 15, 1975. 4) The basic Public Employees Retirement Plan, which covers certain other City civilian employees. 5) Coordinated Public Employees Retirement Plan, which covers the balance of the City civilian employees. The employees covered by the Coordinated P.E.R.A. Plan are also covered by Social Security. — The City is currently making all pension contributions required by law. The Police Relief Association voted to consolidate with the Public Employees Retirement Police and Fire Plan effective November 30, 1993. — 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 Tautges, Redpath & Co., 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, 1992. The Certificate of Achievement is a prestigious national award recognizing 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. 12 CITY OF FRIDLEY, MINNESOTA OTHER INFORMATION (CONTINUED) ACKNOWLEDGEMENTS 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 Donna — Tjornhom, Paul Hansen, Craig Ellestad and Marcy Everette and to our auditors Tautges, Redpath&Co., 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, g41.(9 liatoAct 0, (.42A Richard D. Pribyl Howard D. Koolick Finance Director Assistant Finance Director 13 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, 1992 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. �E OFFj^ ♦ �9 , SATs M CAMS President >t. SEAL dIxABO Executive Director 15 lOW OWN FINANCIAL SECTION a WEN NOM a OWN AUDITOR'S OPINION TAUTGES, REDPATH & CO., LTD. CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of the City Council City of Fridley,Minnesota We have audited the general purpose financial statements of the City of Fridley,Minnesota,as of and for the year ended December 31, 1993 as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards, 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 financial statements are free of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion,the general purpose financial statements referred to above present fairly,in all material respects,the financial position of the City of Fridley,Minnesota,as of December 31, 1993,and the results of its operations and its cash flows of its proprietary fund types for the year then ended in conformity with generally accepted accounting principles. '-' Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole.The combining,individual fund,account group financial statements, supporting schedules and statistical information in the table of contents is presented for purposes of additional analysis and is not a required part of the financial statements of the City of Fridley, Minnesota. Such information,except for that portion marked "unaudited",on which we express no opinion,has been subjected to the auditing procedures applied in the audit of the general ..., purpose financial statements and,in our opinion,is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. June 14, 1994 2 , '( TAUTGES,REDPATH&CO.,LTD. Certified Public Accountants 17 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426-7000 • FAX/426-5004 • Member of HLB International COMBINED FINANCIAL STATEMENTS The combined statements are intended to provide an overview and broad perspective of the City's financial position and operations. These statements present a summary set of information needed to control and analyze current operations to determine compliance with legal and budgetary limitations and to assist in financial planning. The following combined statements are presented: Combined Balance Sheet - All Fund Types and Account Groups Combined Statement of Revenues, Expenditures, and Changes in Fund Balances - All Governmental Fund Types and Expendable Trust Funds Combined Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General and Special Revenue Fund Types Combined Statement of Revenues, Expenditures, and Changes in Retained Earnings - All Proprietary Fund Types Combined Statement of Cash Flows - All Proprietary Fund Types CITY OF FRIDLEY. MINNESOTA — COMBINED BALANCE SHEET-ALL FUND TYPES AND ACCOUNT GROUPS December 31, 1993 Governmental Fund Types Special Debt Capital — General Revenue Service Projects Assets Cash and cash equivalents $330 $10,000 $1,049,631 $258,143 Investments 7,176,852 168,280 11,902,335 17,688,285 Receivables: Accounts 14,691 35,219 1,037 Taxes 258,357 405,694 Special assessments 6,743 2,534,090 26,820 Mortgage 472 1,083,564 Interest 261,531 62,149 Loan 6,300 — Developer note 137,730 Due from other funds 14,230 8,561 135,288 Due from other governments 55,430 79,330 — Inventories, at cost 25,975 Prepaid items 59,829 Long term receivable — Other assets Property and equipment (Net of depreciation) _. Amount available in debt service fund Amount to be provided for — retirement of general long term debt Total Assets $8,017,998 $301,862 $15,486,056 $19,660,980 See Accompanying Notes to Financial Statements 20 Exhibit A-1 Fiduciary Proprietary Fund Types Fund Types Account Groups Totals Internal Trust and General General Long (Memorandum Only) Enterprise Service Agency Fixed Assets Term Debt 1993 1992 $6,090,529 $1,323,397 $ $ $ $8,732,030 $3,379,233 77,335 63,229 37,076,316 39,256,134 1,139,967 231 2,701 1,193,846 1,014,055 656 664,707 1,063,710 2,567,653 2,644,779 1,084,036 951,717 323,680 1,180,693 6,300 6,300 137,730 137,730 2,120 1,345,171 1,505,370 1,525,899 20,492 155,252 152,996 277,771 303,746 301,861 223,500 283,329 252,641 213,540 213,540 279,428 4,520,377 4,520,377 4,067,826 18,990,830 31,995,993 50,986,823 47,317,000 12,838,703 12,838,703 11,852,455 6,637,839 6,637,839 8,552,545 $26,958,749 $2,746,134 $4,586,963 $31,995,993 $19,476,542 $129,231,277 $123,937,002 21 CITY OF FRIDLEY. MINNESOTA COMBINED BALANCE SHEET-ALL FUND TYPES AND ACCOUNT GROUPS(CONTINUED) — December 31. 1993 Governmental Fund Types Special Debt Capital General Revenue Service Projects — Liabilities, fund eauitv and other credits Liabilities Accounts payable $128,638 $30,844 $595 $18,273 — Deposits payable 1,217 10,000 89,682 Contracts payable 47,958 58,926 Salaries payable 136,656 2,805 — Compensated absences payable Deferred revenue 216,596 2,517,260 344,939 Due to other funds 403,260 32,899 129,498 939,713 — Due to other governments 179,271 146 191,555 Bonds payable Loans payables — Other liabilities Total liabilities 1,113,596 76,694 2,647,353 1,643,088 Fund equity and other credits Contributed capital Investment in general fixed assets Retained earnings- Reserved Unreserved Fund balance: Reserved 297,505 1,472 3,878,456 10,106,514 Unreserved- Designated 4,820,450 223,696 8,573,177 Undesignated 1,786,447 8,960,247 (661,799) Total equity and other credits 6,904,402 225,168 12,838,703 18,017,892 Total liabilities, equity — and other credits $8,017,998 $301,862 $15,486,056 $19,660,980 See Accompanying Notes to Financial Statements 22 Exhibit A-1 Continued — Fiduciary Proprietary Fund Types Fund Types Account Groups Totals Internal Trust and General General Long (Memorandum Only) _ Enterprise Service Agency Fixed Assets Term Debt 1993 1992 _ $178,417 $827 $491 $ $ $358,085 $768,234 4,560,317 4,661,216 4,223,459 134,658 241,542 57,581 _ 12,612 56,988 209,061 185,825 815,003 815,003 905,758 3,078,795 3,657,961 "- 1,505,370 1,525,899 439,822 11,359 822,153 527,090 2,155,000 19,345,000 21,500,000 22,470,000 131,542 131,542 135,000 53,830 53,830 47,518 2,974,339 872,818 4,572,167 19,476,542 33,376,597 34,504,325 — 12,474,387 1,000,000 13,474,387 13,256,552 31,995,993 31,995,993 28,949,341 2,483,603 873,316 3,356,919 3,807,566 _ 9,026,420 9,026,420 8,429,929 14,283,947 12,388,693 13,617,323 13,119,269 14,796 10,099,691 9,481,327 23,984,410 1,873,316 14,796 31,995,993 95,854,680 89,432,677 — $26,958,749 $2,746,134 $4,586,963 $31,995,993 $19,476,542 $129,231,277 $123,937,002 23 CITY OF FRIDLEY. MINNESOTA COMBINED STATEMENT OF REVENUES. EXPENDITURES.AND CHANGES IN FUND - BALANCES-ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS Year Ended December 31. 1993 - Governmental Fund Types Special Debt General Revenue Service Revenues: - Taxes $3,667,991 $ $ Special assessments 2,896 499,961 Licenses and permits 322,201 87,934 -, Intergovernmental revenue 3,033,365 179,058 Charges for services 787,742 101,533 Fines and forfeits 198,190 5,602 - Interest on investments 541,163 20,977 1,066,182 Miscellaneous 130,561 74,205 Total revenues 8,684,109 469,309 1,566,143 - Expenditures: Current General government 1,548,100 425,065 - Public safety 3,405,367 7,930 Municipal center 169,493 - Public works 2,147,000 Community development 407,470 Recreation and naturalist 720,759 Debt service 2,195,590 Capital outlay 305,531 64,725 Total expenditures 8,703,720 497,720 2,195,590 Excess(deficiency)of revenues over expenditures (19,611) (28,411) (629,447) Other financing sources(uses): Bond proceeds Loan proceeds Operating transfers in 400,292 79,067 1,940,968 Operating transfers out (325,273) Total other financing sources(uses) 400,292 79,067 1,615,695 Excess(deficiency)of revenues and other financing sources over expenditures and other financing uses 380,681 50,656 986,248 Fund Balance January 1, as previously reported 6,509,737 174,512 11,852,455 Prior period adjustment Fund Balance January 1, as restated 6,509,737 174,512 11,852,455 Residual Equity Transfers in 13,984 Residual Equity Transfers out Fund Balance December 31 $6,904,402 $225,168 $12,838,703 See Accompanying Notes to Financial Statements 24 Exhibit A-2 Fiduciary Fund Type Totals '- Capital (Memorandum Only) Projects Trust 1993 1992 $3,238,758 $ $6,906,749 $6,591,630 111,789 614,646 744,908 410,135 401,718 1,205,412 4,417,835 4,538,566 39,461 928,736 842,590 203,792 239,880 1,401,365 4,802 3,034,489 2,482,787 181,658 386,424 308,946 6,178,443 4,802 16,902,806 16,151,025 639,776 2,612,941 2,860,098 3,413,297 3,320,123 169,493 172,664 229,990 2,376,990 2,306,970 407,470 378,690 720,759 702,421 12,301 2,207,891 1,884,325 1,712,037 2,082,293 6,684,269 2,594,104 0 13,991,134 18,309,560 3,584,339 4,802 2,911,672 (2,158,535) 4,873,783 135,000 625,750 3,046,077 3,232,845 (2,620,804) (2,946,077) (3,132,845) (1,995,054) 0 100,000 5,108,783 1,589,285 4,802 3,011,672 2,950,248 16,442,591 9,994 34,989,289 30,943,294 _. 1,095,747 16,442,591 9,994 34,989,289 32,039,041 13,984 29,947 (13,984) (13,984) (29,947) $18,017,892 $14,796 $38,000,961 $34,989,289 25 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(CONTINUED) Year Ended December 31. 1993 _ With comparative totals for year ended December 31, 1992 General Fund - Variance Favorable Budget Actual (Unfavorable) - Revenues: Taxes $3,596,069 $3,667,991 $71,922 Special assessments 1,397 2,896 1,499 Licenses and permits 338,148 322,201 (15,947) Intergovernmental revenue 2,963,769 3,033,365 69,596 - Charges for services 734,489 787,742 53,253 Fines and forfeits 246,634 198,190 (48,444) Interest on investments 419,165 541,163 121,998 _ Miscellaneous 78,279 130,561 52,282 Total revenues 8,377,950 8,684,109 306,159 - Expenditures: Current General government 1,687,847 1,548,100 139,747 - Public safety 3,462,533 3,405,367 57,166 Municipal center 186,581 169,493 17,088 Public works 2,195,497 2,147,000 48,497 ,_ Community development 418,925 407,470 11,455 Recreation and naturalist 765,939 720,759 45,180 Reserve for Contingency 83,226 83,226 ,_ Capital outlay 333,853 305,531 28,322 Total expenditures 9,134,401 8,703,720 430,681 Excess(deficiency)of revenues over "' expenditures (756,451) (19,611) 736,840 Other financing sources(uses): - Operating transfers in 412,578 400,292 (12,286) Operating transfers out Total other financing sources(uses) 412,578 400,292 (12,286) - Excess(deficiency)of revenues and other financing sources over expenditures - and other financing uses (343,873) 380,681 724,554 Fund balance January 1,as previously reported 6,509,737 6,509,737 Prior period adjustment Fund balance January 1, as restated 6,509,737 6,509,737 ", Residual equity transfer in(out) 13,984 13,984 - Fund Balance December 31 $6,165,864 $6,904,402 $738,538 See Accompanying Notes to Financial Statements 26 Exhibit A-3 - Special Revenue Fund Types Budgeted Capital Project Funds Variance Variance Favorable Favorable - Budget Actual (Unfavorable) Budget Actual (Unfavorable) _ $ $ $ $70,550 $74,363 $3,813 95,000 87,934 (7,066) 150,198 179,058 28,860 674,000 1,205,412 531,412 87,860 101,533 13,673 5,602 5,602 8,000 20,977 12,977 585,210 856,230 271,020 - 73,200 74,205 1,005 110,000 106,789 (3,211) 419,860 469,309 49,449 1,439,760 2,242,794 803,034 442,159 425,065 17,094 - 7,930 7,930 465,694 103,523 362,171 - 64,725 64,725 798,992 397,178 401,814 514,814 497,720 17,094 1,264,686 500,701 763,985 (94,954) (28,411) 66,543 175,074 1,742,093 1,567,019 - 79,067 79,067 (625,750) (625,750) 79,067 79,067 (625,750) (625,750) (15,887) 50,656 66,543 (450,676) 1,116,343 1,567,019 - 174,512 174,512 8,254,470 8,254,470 - 174,512 174,512 8,254,470 8,254,470 - $158,625 $225,168 $66,543 $7,803,794 $9,370,813 $1,567,019 27 CITY OF FRIDLEY. MINNESOTA Exhibit A-3 COMBINED STATEMENT OF REVENUES. EXPENDITURES.AND CHANGES Continued IN FUND BALANCES- BUDGET AND ACTUAL GENERAL. SPECIAL REVENUE FUND AND BUDGETED CAPITAL PROJECT TYPES(CONTINUED] Year Ended December 31. 1993 With comparative totals for year ended December 31, 1992 Totals (Memorandum Only) - Variance- Favorable 1992 Budget Actual (Unfavorable) Actual - Revenues: Taxes $3,666,619 $3,742,354 $75,735 $3,659,949 - Special assessments 1,397 2,896 1,499 3,524 Licenses and permits 433,148 410,135 (23,013) 401,718 Intergovernmental revenue 3,787,967 4,417,835 629,868 4,497,726 Charges for services 822,349 889,275 66,926 842,590 Fines and forfeits 252,236 203,792 (48,444) 239,880 Interest on investments 1,012,375 1,418,370 405,995 1,094,641 Miscellaneous 261,479 311,555 50,076 187,543 Total revenues 10,237,570 11,396,212 1,158,642 10,927,571 Expenditures: Current General government 2,130,006 1,973,165 156,841 2,140,173 Public safety 3,470,463 3,413,297 57,166 3,320,123 Municipal center 186,581 169,493 17,088 172,664 Public works 2,661,191 2,250,523 410,668 2,306,970 Community development 418,925 407,470 11,455 378,690 Recreation and naturalist 765,939 720,759 45,180 702,421 Reserve for Contingency 83,226 83,226 - Capital outlay 1,197,570 767,434 430,136 774,638 Total expenditures 10,913,901 9,702,141 1,211,760 9,795,679 Excess(deficiency)of revenues over "' expenditures (676,331) 1,694,071 2,370,402 1,131,892 Other financing sources(uses): - Operating transfers in 491,645 479,359 251,527 Operating transfers out (625,750) (625,750) (19,590) Total other financing sources(uses) (134,105) (146,391) 231,937 Excess(deficiency)of revenues and other financing sources over expenditures - and other financing uses (810,436) 1,547,680 2,358,116 1,363,829 Fund balance January 1,as previously reported 14,938,719 14,938,719 13,400,913 - Prior period adjustment 144,030 Fund balance January 1, as restated 14,938,719 14,938,719 13,544,943 '^ Residual equity transfer in(out) 13,984 13,984 29,947 Fund Balance December 31 $14,128,283 $16,500,383 $2,372,100 $14,938,719 See Accompanying Notes to Financial Statements 28 r 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, 1993 - With Comparative Totals for Year Ended December 31, 1992 Proprietary Fund Types Totals Internal (Memorandum Only) - Enterprise Service 1993 1992 Sales and cost of sales: - Sales $2,783,611 $ $2,783,611 $2,848,224 Cost of sales 2,214,716 2,214,716 2,244,851 Gross profit 568,895 0 568,895 603,373 - Operating revenues: Water sales and sewer rents 3,436,041 3,436,041 3,045,473 - Other 121,047 107,501 228,548 203,682 Charges for services 29,075 29,075 11,240 Total operating revenues 3,557,088 136,576 3,693,664 3,260,395 - Operating expenses: Personal services 1,004,333 53,425 1,057,758 1,047,233 Supplies and other charges 3,245,897 35,926 3,281,823 2,693,606 - Capital outlay Depreciation 602,730 602,730 594,068 Total operating expenses 4,852,960 89,351 4,942,311 4,334,907 - Operating(loss) (726,977) 47,225 (679,752) (471,139) Non-operating revenues(expenses): Interest on investments 481,390 229,711 711,101 701,550 Debt service (129,944) (129,944) (131,761) Loss on disposition of assets (2,895) - Other 7,374 7,374 12,285 Total non-operating revenues (expenses) 358,820 229,711 588,531 579,179 Income before operating transfers (368,157) 276,936 (91,221) 108,040 Operating transfers in Operating transfers out (100,000) (100,000) (100,000) Total operating transfers 0 (100,000) (100,000) (100,000) Net income before extrordinary item (368,157) 176,936 (191,221) 8,040 Extraordinary gain on issuance of sewer availability charge credits 167,300 Net income(loss) (368,157) 176,936 (191,221) 175,340 Credit arising from transfer of depreciation on contributed capital 337,065 337,065 336,604 Retained earnings January 1 $11,541,115 $696,380 12,237,495 11,725,551 Retained earnings December 31 $11,510,023 $873,316 $12,383,339 $12,237,495 See Accompanying Notes to Financial Statements 29 Exhibit A-5 CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES Year Ended December 31, 1993 With Comparative Totals for Year Ended December 31, 1992 Proprietary Fund Type Totals Internal (Memorandum Only) Enterprise Service 1993 1992 - Cash flows from operating activities: Operating income(loss) ($726,977) $47,225 ($679,752) ($471,139) Adjustments to reconcile operating - income(loss)to net cash flows from operating activities: Depreciation 602,730 602,730 594,068 Changes in assets and liabilities: Decrease(increase) in receivables (167,607) (231) (167,838) (136,953) Decrease(increase) in due from other funds 1,312 140,212 141,524 1,079,842 Decrease(increase) in inventories (2,338) (2,338) 45,159 Decrease(increase)in prepaid items (18,553) (18,553) (40,588) Increase(decrease)in payables 270,255 (109,935) 160,320 "" 2 Other non-operating income 7,374 ( ,37 1 ,285) 4 7,374 12,285 Use of sewer availability charge credits 56,250 56,250 56,000 - Net cash flows from operating activities 22,446 77,271 99,717 1,062,689 - Cash flows from non-capital financing activities: Operating transfers out (100,000) (100,000) (100,000) Net cash flows from non-capital financing activities: 0 (100,000) (100,000) (100,000) - Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (671,001) (671,001) (498,186) - Proceeds from sale of revenue bonds 620,000 Principal paid on revenue bonds (45,000) (45,000) (35,000) - Interest and paying agent fees on revenue bonds (129,944) (129,944) (131,761) Net cash flows from capital and related financing activities (845,945) 0 (845,945) (44,947) See Accompanying Notes to Financial Statements • 30 Exhibit A-5 CITY OF FRIDLEY, MINNESOTA Continued COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES(CONTINUED) Year Ended December 31, 1993 With Comparative Totals for Year Ended December 31, 1992 Proprietary Fund Types Totals Internal (Memorandum Only) Enterprise Service 1993 1992 Cash flows from investing activities: Purchase of investment securities (77,335) (77,335) (4,277,999) — Proceeds from sale of investment securities 4,277,999 4,277,999 3,621,077 Interest on investments 474,128 229,711 703,839 693,451 Interest received from MWCC 7,262 7,262 8,099 Net cash flows from investing activities 4,759,389 152,376 4,911,765 44,628 - Net increase(decrease)in cash and cash equivalents 3,935,890 129,647 4,065,537 962,370 .., Cash and cash equivalents-January 1 2,154,639 1,193,750 3,348,389 2,386,019 Cash and cash equivalents-December 31 $6,090,529 $1,323,397 $7,413,926 $3,348,389 — Non-cash investing, capital and financing activities: System assets of$554,900 were contributed by the Capital Projects Special Assessment Fund to the Public Utility Enterprise Fund in 1993. See Accompanying Notes to Financial Statements 31 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1993 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. Blended Component Unit - The Fridley Housing and Redevelopment Authority (HRA) is -_ governed by commissioners appointed by the Fridley City Council Although it is legally separate from the City, the HRA is reported as if it were a part of the City because its sole purpose is to provide housing and redevelopment assistance to the City's residents. The majority of funding for the various programs administered by the HRA is provided through the "' issuance of general obligation tax increment bonds guaranteed by the City. 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 Police and Volunteer Firefighters Relief Associations - These associations are organized as non-profit organizations by their members to provide pension and other benefits to such members in accordance with Minnesota Statutes. Their boards of directors are elected by the membership of the association. All funding is conducted in accordance with Minnesota Statutes, whereby state aids flow to the associations, tax levies are determined by the '— associations and are only reviewed by the City. The associations pay benefits directly to their members. The associations may certify tax levies to the County directly if the City does not carry out this function. Because the associations are able to fund their programs independently — of the City, they are excluded from these financial statements. (See Notes 9 and 10 for disclosures relating to the pension plans operated by these organizations.) 32 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1993 1. Summary of Significant Accountina Policies (Continued) B. Fund Accounting The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities,fund equity, revenues and expenditures, or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the financial statements in this report, into seven generic fund types and three broad categories as follows: GOVERNMENTAL FUNDS Governmental funds include the general fund, special revenue funds, debt service funds and capital projects funds. The governmental fund measurement focus is based upon the determination of financial position and changes in financial position(sources, uses and balances of financial resources rather than upon net income determination). These funds are maintained — on the modified accrual basis of accounting (explained further under Significant Accounting Policies). General Fund - The General Fund is the primary operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of certain specific revenue sources that are restricted to expenditures for specified purposes. Debt Service Funds - Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest, and related costs. Capital Projects Funds - Capital Projects Funds are used for the acquisition or construction of major capital facilities other than those financed by proprietary funds. PROPRIETARY FUNDS Proprietary funds include enterprise funds and internal service funds. The proprietary fund measurement focus is based upon the determination of net income, financial position and changes in financial position. The generally accepted accounting principles here are those applicable to similar businesses in the private sector and thus these funds are maintained on the accrual basis of accounting. _ Enterprise Funds - Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises -where the intent is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through use charges. internal Service Funds- Internal Service Funds are used to account for the financing of goods or services provided by one department to other departments of the City on a cost- - reimbursement basis. 33- CITY OF FRIDLEY. MINNESOTA — NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1993 1. Summary of Significant Accounting Policies (Continued) — B. Fund Accounting (Continued) 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. 34 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1993 1. Summary of Significant Accounting Policies (Continued) C. Measurement Focus (Continued) Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. They are instead reported as liabilities in the General Long- Term Debt Account Group. Proprietary funds are accounted for on a cost of services or'capital maintenance'measurement focus. This means that all assets, including fixed assets, and all liabilities, including long-term liabilities, associated with their activity are included on their balance sheets. Their reported fund equity is segregated into contributed capital and retained earnings components. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net total assets. D. Basis of Accounting Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. Governmental Funds and Expendable Trust Funds are accounted for using the modified accrual —' basis of accounting. Their revenues are recognized when they become susceptible to accrual, i.e., both measurable and available. Substantially all revenues are accrued. .... Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred, except for principal and interest on general long-term debt which is recognized when due. Agency Fund assets and liabilities are accounted for on the modified accrual basis of accounting. Proprietary funds are accounted for using the accrual basis of accounting. Revenues are recognized when they are earned, and expenses are recognized when they are incurred. E. Budgets and Budgetary Accounting The City 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. 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. 35 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31. 1993 1. Summary of Slanificant Accounting Policies (Continued) E. Budgets and Budgetary Accounting (Continued) 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. Formal budgetary integration is employed as a management control device during the — year for the General Fund, Special Revenue Funds and Capital Improvement Capital Projects Funds. Formal budgetary integration is not employed for Debt Service Funds because effective budgetary control is achieved through the bond indenture provisions. — Budgetary control for other Capital Projects Funds is accomplished through the use of project controls. (See Note 16 for further information on budgeted and unbudgeted capital 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. 10. The General Fund budget includes prior year encumbrances which were reappropriated to the current year. Expenditures for the items encumbered are included in the current — year's expenditures. F. Assets, Liabilities and Fund Equity — 1) Cash and 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. 36 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1993 '— 1. Summary of Significant Accounting Policies (Continued) F. Assets, Liabilities and Fund Equity (Continued) 1) Cash and Cash Equivalents, and Investments (Continued) The City provides temporary advances to funds that have insufficient cash balances by means of an advance from the internal service funds. This is classified as an interfund payable in the fund receiving the advance and as an offsetting interfund receivable in the internal service funds. 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 1993 taxes were adjusted downward $84,007 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. '— 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 37 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31. 1993 1. Summary of Significant Accounting Policies (Continued) — F. Assets, Liabilities and Fund Equity (Continued) 2) Receivables (Continued) Special Assessments Receivable (Continued) — 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 .. 38 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1993 1. Summary of Slanificant Accounting Policies (Continued) F. Assets, Liabilities and Fund Equity (Continued) 4) Property and Equipment/General Fixed Assets (Continued) _ proprietary fund balance sheets. Depreciation has been provided over the estimated useful lives using the straight line method. The estimated useful lives are as follows: Improvements Other Than Building 20 - 50 years Buildings 20 - 50 years Machinery and Equipment 5 - 10 years Land N/A 5) 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 17.) 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 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. 39 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31. 1993 1. Summary of Significant Accounting Policies (Continued) —' G. Revenues, Expenditures and Expenses (Continued) 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. Other Revenues - Licenses, fines, penalties and miscellaneous revenues are recorded as revenues when received in cash because they are generally not measurable until actually — received. Interest Expense on Bonded Indebtedness - Interest expense is recorded as an expenditure — when paid in the governmental fund types and accrued when incurred in the proprietary fund types. Bond and Interest Payments Due January 1 -Expenditures are recognized when amounts are remitted to the paying agent (usually in December) for payment of bonds and interest. H. Comparative Data — Comparative total data for the prior year have been presented in the accompanying combined financial statements in order to provide an understanding of changes in the City's financial position and operations. However, comparative (i.e., presentation of prior year totals by fund — type) data have not been presented in all statements since their inclusion would make the statements unduly complex and difficult to read. Total columns on the combined statements are captioned 'Memorandum Only' to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or changes in cash flows in conformity with generally — accepted accounting principles. Interfund eliminations have not been made in the aggregation of this data Cash Flows Statements The Governmental Accounting Standards Board Statement No. 9 requires that governments include a statement of cash flows for proprietary and nonexpendable trust funds to replace the — statement of changes in financial position as a basic financial statement. GASB statement No. 9 was effective for fiscal periods beginning after December 15, 1989 and accordingly its requirements have been incorporated in the accompanying financial statements. 40 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1993 2. Deposits and Investments A. Deposits In accordance with applicable Minnesota Statues, 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 Statues require that it be held by a third party in the City's name. The market value of the collateral must at a minimum be 110% of the deposits not covered by insurance or bonds (140% in the case of mortgage backed collateral). Repurchase agreements are intentionally overcollateralized at 105% to insure that the safety of investment principal is attained and losses do not occur from rapid overnight deterioration. Balances at December 31, 1993 are as follows: Bank Carrying Balances Amount 1) Insured or collateralized by securities held by the City or its agent in the City's name $782,127 $408,807 2) Collateralized with securities held by the pledging institution trust department in the City's name 0 0 3) Uncollateralized or collateralized with securities not in the City's name 0 0 Totals $782,127 $408,807 Categories 2 and 3 are not procedures that are authorized by Minnesota statutes. 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. 41 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31. 1993 2. Deposits and Investments (Continued) B. Investments (Continued) — (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's investments are categorized below to give an indication of the level of risk assumed at year — end. The level of risk is defined by the following criteria set out by the Governmental Accounting Standards Board within Statement No. 3. Category 1 includes investments that are insured or registered for which the securities are held by the City or its agent in the City's name. Category 2 includes uninsured and unregistered investments for which the securities are held by the counterparty's — trust department or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counterparty, or by its trust department or agent but not in the City's name. — The carrying value, market value and credit risk of the investments held by the City at year end are as follows: Credit Risk Category Carrying Market Securities Type 1 2 3 Amount Value — U.S. Government securities $6,543,429 $ $6,543,429 $6,595,224 U.S. Government agencies — or instrumentalities 29,992,887 29,992,887 29,663,752 Commercial paper 626,351 626,351 626,351 Repurchase agreements 5,797,908 5,797,908 5,797,908 — $37,162,667 $5,797,908 Investment in money market fund (at market) 2,438,964 2,438,964 Investment in deferred compensation plan (at market) 4,520,376 4,520,376 Total investments $49,919,915 $49,642,575 — 42 CITY OF FRIDLEY, MINNESOTA ... NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1993 2. Deposits and Investments (Continued) Cash and Cash Equivalents and Investments per accompanying financial statement: Cash and cash equivalents $8,732,030 Investments 37,076,316 Total $45,808,346 3. Special Assessments Receivable Special assessments receivable at December 31, 1993 are as follows: Special Special Assessment Assessment Capital General Debt Service Projects Total Unremitted $ $16,830 $ $16,830 Delinquent 3,806 87,105 99 91,010 Deferred 2,937 2,430,155 26,721 2,459,813 Total $6,743 $2,534,090 $26,820 $2,567,653 43 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31. 1993 4. Due From Other Governments Amounts due from other governments at December 31, 1993 are as follows: General Fund: — State of Minnesota: a) State Aid Mainenance $20,166 a) Sales Tax Refund 55 Anoka County: a) Fines and Forfeits 13,410 — b) Gas Reimbursement 285 c) Emergency Management Authority Reimbursement 1,059 d) Reimbursement of Officer Overtime 1,047 .... e) Resitution 39 f) Installation of Pedestrian Ramps 5,750 City of Hilltop 11,121 — City of Columbia Heights Fire Department 395 City of Spring Lake.Park Fire Department 395 City of Coon Rapids Fire Department 395 ._ City of St. Anthony Fire Department 395 School District#14 918 Total General Fund $55,430 — Special Revenue Funds: State of Minnesota: a) Section 8 Housing $8,429 b) Housing Finance Association Bond Deposit 11,613 — Anoka County: a) Community Development Block Grant 13,885 b) Recycling 44,690 — Greater Minneapolis Council of Churches a) Title III 713 Total Special Revenue Funds $79,330 — Enterprise Funds: Utility Funds: Metropolitan Waste Control Commission (MWCC)- Current portion of amounts due from MWCC $20,492 — Non-current portion - long term receivable of amounts due from MWCC $213,540 44 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1993 4. Due From Other Governments (Continued) The non-current receivable of $213,540 in the Utility Enterprise Fund is comprised of: 1. The balance due for the sale of the City's sewer interceptors is$141,344 (the interceptors were sold to the Metropolitan Waste Control Commission January 1, 1971). This receivable will be paid to the City in annual installments with interest through 1999. Repayment will be made by issuing credits against future disposal charges from the Commission. 2. The amount of $4,396, which will be repaid with interest through 1998, is for advances made to the Commission during 1971 and 1972. 3. The credits for excess sewer availability charges of $67,800 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. Chanaes in General Fixed Assets A summary of changes in general fixed assets are as follows: Balance Balance Jan 1, 1993 Additions Deletions Dec 31, 1993 Land $2,105,675 $163,995 $ $2,269,670 Buildings 4,767,496 6,290 4,773,786 Improvements other than buildings 15,918,080 2,403,987 18,322,067 Machinery and equipment 5,107,323 331,201 115,968 5,322,556 Construction in progress 1,050,767 1,326,895 1,069,748 1,307,914 Total $28,949,341 $4,232,368 $1,185,716 $31,995,993 45 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31, 1993 6. Summary of Proprietary Fund Property and Equipment A summary of proprietary fund type property, plant and equipment at December 31, 1993 follows: Enterprise Public Liquor Utilities Total Land $66,961 $154,531 $221,492 Buildings 178,897 1,529,236 1,708,133 — Improvements other than buildings 86,759 5,311,529 5,398,288 Machinery and equipment 243,677 2,242,884 2,486,561 Water and sewer lines 17,510,438 17,510,438 — 576,294 26,748,618 27,324,912 Less: Accumulated depreciation (281,100) (8,052,982) (8,334,082) — Net property and equipment $295,194 $18,695,636 $18,990,830 7. Lona-Term Debt — The following is a summary of long-term debt transactions of the City for the year ended December 31, 1993: General Obligation Bonds Special Tax Water Construction Assessment Increment Revenue Loan Total — Debt payable at January 1, 1993 $4,215,000 $16,055,000 $2,200,000 $135,000 $22,605,000 Debt retired (640,000) (285,000) (45,000) (3,458) (973,458) — Debt payable at December 31, 1993 $3,575,000 $15,770,000 $2,155,000 $131,542 $21,631,542 46 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1993 7. Lona-Term Debt (Continued) Bonds payable at December 31, 1993 are comprised of the following individual issues (in thousands of dollars): General Long-Term Debt: _ $1,425,000 Special Assessment Bonds of 1982 due in varying annual installments of$15,000-$90,000 through February 1, 1999; interest at 9.40% - 10.70% $ 150 $2,705,000 Refunding Improvement Bonds of 1986 due in varying annual installments of $180,000 - $290,000 through February 1, 2000; interest at 6.00% - 7.40% 1,715 $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% 2,255 $9,485,000 General Obligation Tax Increment Refunding Bonds of 1990 due in varying annual installments of $810,000 - $1,270,000 through August 1, ... 2009; interest at 6.60% - 7.00% 9,485 $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% 855 $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% 855 $4,030,000 General Obligation Temporary Tax Increment Bonds of 1992, Series C, due on December 1, 1995; interest at 3.85% 4,030 Subtotal General Long Term Debt 19.345 Water 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% 1,535 $620,000 General Obligation Water Revenue Bonds of 1992, Series B, due in varying annual installments of $35,000 to $55,000 through February 1, 2007; interest at 3.0% to 5.7% 620 Subtotal Revenue Bonds 2.155 Total Bonds Payable $ 21,500 Construction Loan: $135,000 Locke Lake Dam Reconstruction loan from the State Department of Natural Resources due in annual installments of$12,301 through April 1, 2012; interest at 6.55% $ 132 47 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31. 1993 7. Lona-Term Debt (Continued) — The Tax Increment Revenue Refunding Bonds are payable solely from increment revenue that is generated from the related increment district. 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 benefitted 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 Water Revenue Bonds are payable from the net revenues of the City's water system in addition to the general obligation pledge. Annual Requirements to Amortize Long Term Debt December 31, 1993 — General Obligation Bonds — Year Ending Special Water Locke Lake December 31 Assessment Redevelopment Revenue Dam Loan Total 1994 601,154 1,289,625 207,384 12,301 $2,110,464 1995 591,279 5,318,895 208,559 12,301 $6,131,034 1996 595,463 1,130,300 209,288 12,301 $1,947,352 — 1997 567,773 1,128,835 209,585 12,301 $1,918,494 1998 572,999 1,128,905 209,460 12,301 $1,923,665 1999-2003 1,439,077 5,508,210 1,039,651 61,505 $8,048,443 — 2004-2008 131,410 7,283,090 974,454 61,505 $8,450,459 2009-2012 1,358,900 436,310 49,200 $1,844,410 $4,499,155 $24,146,760 $3,494,691 $233,715 $32,374,321 — $1Z838,703 is available in the Debt Service Fund to service the Special Assessment and Redevelopment Bonds. $6,430,887 is available in the Water Fund, a component of the Public Utility Enterprise Funds, to service the Water Revenue Bonds. — In 1990,the City advance refunded the$10,045,000 General Obligation Tax Increment Refunding Bonds of 1986 (1986 Bonds) by issuing the $9,485,000 General Obligation Tax Increment Refunding Bonds — of 1990 (1990 Bonds). The proceeds of the 1990 Bonds were used by the City's escrow agent to acquire United States Treasury Securities-State and Local Government Series (SLGS) in amounts and maturities to match the debt payments on the 1986 Bonds until those bonds are called on February 1, 1994. As of December 31, 1993, the principal remaining on the 1986 Bonds is $7,485,000 while the assets held by the escrow agent totals $7,757,565. There are a number of limitations and restrictions contained in the various bond indentures. The City — is in compliance with all significant limitations and restrictions. Legal Debt Margin - Under applicable State Statutes, the legal debt margin is 2% of the most recent market value less certain deductions. At December 31, 1993, the legal debt margin was$21,745,860. 48 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1993 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 pension 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 public employee retirement systems. PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated members are covered by Social Security and Basic 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. The payroll for employees covered by PERF and PEPFF for the year ended December 31, 1993, was $3,338,527 and $1,365,154, respectively; the City's total payroll was $5,904,144. 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 member's _ average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for Coordinated and Basic members. The retiring member receives the higher of step-rate benefit accrual formula(Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rates for a Basic — member is 2 percent of average salary for each of the first 10 years of service and 2.5 percent for each remaining year. For a Coordinated member, the annuity accrual is 1 percent of average salary for each of the first 10 years and 1.5 percent of each remaining year. Using Method 2, the annuity accrual rate is 2.5 percent of average salary for Basic members and 1.5 percent for Coordinated members. For PEPFF members,the annuity accrual rate is 2.5 percent of average salary for each year of service through June 30, 1993. (Effective July 1, 1993, the annual accrual rate is 2.65 percent) For PERF members whose annuity is calculated using Method 1, and for all PEPFF members, a full annuity is available when age plus years of service equal 90. There are different types of annuities available to members upon retirement. A normal annuity is a lifetime annuity that ceases upon the death of the retiree. No survivor annuity is payable. There are also various types of joint and survivor annuity options available which will reduce the monthly normal annuity amount, because the annuity is payable over joint lives. Members may also leave their contributions in the fund upon termination of public service, in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. B. Contributions Required and Contributions Made Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. The City makes annual contributions to the pension plans equal to the amount required by State statutes. According to Minnesota Statutes Chapter 356.215, Subdivision 4 (g), the date of full funding required for the PERF and the PEPFF is the year 2020. As part of the annual actuarial valuation, PERA's actuary determines the sufficiency of the statutory contribution rates towards meeting the required full funding deadline. The actuary compares the actual contribution rate to a 'required' contribution rate. Current combined statutory contribution rates and actuarially required contribution rates for the plans are as follows: 49 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31. 1993 8. Defined Benefit Pension Plans-Statewide (Continued) B. Contributions Required and Contributions Made (Continued) — Statutory Rates: Required Employees Employer Rates PERF: Basic& Coordinated plans 4.39% 4.67% 9.95% — PEPFF 8.00% 12.00% 18.60% Total contributions made by the City during fiscal year 1993 were: — Percentage of Amounts Covered Payroll Employees Employer Employees Employer — PERF: Basic plan $15,766 $20,556 8.23% 10.73% — Coordinated plan 133,117 140,984 4.23% 4.48% PEPFF 109,212 163,818 8.00% 12.00% Total $258,095 $325,358 — The City's contribution for the year ended June 30, 1993, to the PERF represented .13 percent of total contributions required of all participating entities. For the PEPFF, contributions for the year ended June 30, 1993, represented .29 percent of total contributions required of all participating entities. C. Funding Status and Progress 1. Pension Benefit Obligation The 'pension benefit obligation' is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and step- rate benefits, estimated to be payable in the future as a result of employee service to — date. The measure, which is the actuarial present value of credited projected benefits, is intended to (a) help users assess PERA's funding status on a going-concern basis, (b) assess progress made in accumulating sufficient assets to pay benefits when due, and (c) make comparisons among Public Employees Retirement Systems and among employers. PERA does not make separate measurements of assets and pension benefit obligation for individual employers. 50 CITY OF FRIDLEY, MINNESOTA _ NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1993 8. Defined Benefit Pension Plans-Statewide (Continued) C. Funding Status and Progress (Continued) 1. Pension Benefit Obligation (Continued) The pension benefit obligations of PERA as of June 30, 1993, were as follows: Public Public Employees Employees Retirement Police& Fund Fire (PERF)(in thousands)(PEPFF) Total pension benefit obligations $5,163,766 $932,333 Net assets available for benefits, at cost(Market values in thousands) PERF=$4,515,052 PEPFF=$1,713,312 4,304,163 1,090,857 Unfunded(assets in excess of) pension benefit obligation $859,603 ($158,524) The measurement of the pension benefit obligation is based on an actuarial valuation as of June 30, 1993. Net assets available to pay pension benefits were valued as of '— June 30, 1993. 2. Changes in Benefit Provisions Three bills enacted during the 1993 legislative session improved benefits for many members with a material effect on the pension benefit obligation in the PERF or the _ PEPFF. The early retirement incentive bill permitted a public employer to offer PERA's Basic and Coordinated members an increase of one-fourth percent(.25%) in the formula multiplier for each year of service, up to the first 30 years, or health insurance coverage up to age 65. Also, the survivor protection bill provided benefits to either a surviving spouse or children of PERF Coordinated Plan members who die before age 50. Lastly, the Police and Fire benefit increase bill, which became effective July 1, 1993, permanently increased the PEPFF formula multiplier from 2.5 percent to 2.65 percent of an individual's average salary over the five highest consecutive years of earnings. 51 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31. 1993 8. Defined Benefit Pension Plans-Statewide (Continued) D. Ten-Year Historical Trend Information Ten-year historical trend information is presented in PERA's Comprehensive Annual Financial Report for the year ended June 30, 1993. This information is useful in assessing the pension plan's accumulation of sufficient assets to pay pension benefits as they become due. — E. Related Party Investments As of June 30, 1993, and for the fiscal year then ended, PERA held no securities issued by the "' City or other related parties. F. Federal Insurance Contribution Act (Social Security) — Approximately sixty (60%) percent of the permanent City employees are covered by Social Security. The 1993 contribution rate was 7.65% (6.2%is social security and 1.45% is medicare) _ up to a maximum in wages of$57,600 for Social Security and$135,000 for Medicare. The cost of Social Security for 1993 was $228,549. In addition, as of April 1, 1986 all newly hired or returning seasonal employees who are not covered by PERA and thus contributing to Social Security, must contribute 1.45% of their salary to Medicare with an equal match made by the — City. The 1993 cost for Medicare was $62,973. 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. The City's annual payroll was$5,904,144. 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 $69,120 and $74,130 in State Aid to the Association for 1993 and 1992 respectively. 52 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1993 9. Defined Contribution Pension Plan - Fridley Volunteer Firefighter Relief Association (Continued) A. Plan Description (Continued) 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 Service Percent 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 1993 and as of December 31, 1993 the Association held no securities issued-by the City or other related parties. 53 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31. 1993 10. Defined Benefit Pension Plan - Fridley Police Relief Association A. Plan Description The City of Fridley Police Relief Association (Association), a single-employer public employee retirement system that acts as a common investment and administrator for the City's police officers, consolidated with the Public Employees Retirement Association of Minnesota's (PERA) Police and Fire Fund on November 30, 1993. The City's payroll for employees covered by the Association for the year ended December 31, 1993 was $362,523; the City's total payroll was $5,904,144. — Police officers of the City hired prior to December 15, 1975, were members of the Association. Police officers hired after December 15, 1975 are members of the PERA Public Employees Police and Fire Fund. Association members were entitled to the following benefits: — Age and Service Retirement Eligibility 50 years of age and 10 years of service —' Amount For first 10 years of service, 15/75 of base pay. For each year in excess of 10, an additional 2/75 is added. For each year in excess of 20, an additional 1/75 is added up to a maximum of 42/75 of base pay. Pay Used for Plan Purposes For benefit determination purposes, 'base pay means the — salary of a first grade patrolman for the second month of the previous fiscal year. For contribution purposes, it means the present base pay of a first grade patrolman. Disability Retirement -- Eligibility Disabled to the extent that member is no longer able to perform the duties of a police officer before being eligible for age and service retirement. — Amount 36/75 of base pay. Member's Death while Active, or In Deferred Status or Retired —' Eligibility Spouse Legally married to member at least one year prior to separation from service and — residing with member at time of death. Benefits terminate upon remarriage. Child Younger than age 18. — Amount Spouse 18/75 of base pay. — Child 6/75 of base pay per child. Children's maximum is 18/75 if spouse is receiving benefits; 36/75 if spouse is not receiving benefits. 54 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1993 10. Defined Benefit Pension Plan - Fridley Police Relief Association (Continued) A. Plan Description (Continued) Vested Deferred 10 years of service and separated before age 50. Maximum benefit is 40/75 of base pay. Payment beginning is deferred to attainment of age 50. Post-Retirement Adiustment ("Escalator') Each time base pay was changed, payments to all benefit recipients were simultaneously changed by the same percent that base pay was changed. (Exception - For members on age and service retirement with less than 20 years service, the maximum increase was 3% compounded annually. Also, applies to survivors of these retirees). Police officers who were members of the Association were required to pay 8 percent of their base pay to the Association; 75 percent of the member's contribution is refundable, without interest, if no benefit was payable upon separation of service. The City makes annual contributions to the relief association equal to the amount required by state statutes. B. Funding Status and Progress The amount shown below as the 'pension benefit obligation' is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases, estimated to be payable in the future as a result of employee service to date. The measure is the actuarial present value of credited projected benefits and is intended to (a) help users assess the plan's funding status on a going-concern basis. (b) assess progress being made in accumulating sufficient assets to pay benefits when due, and (c) allow for comparisons among public employees retirement plans. The measure is independent of the actuarial funding method used to determine contributions to the plan. The pension benefit obligation was determined as part of the most recent actuarial valuation of the plan which was dated December 31, 1992. Significant actuarial assumptions used in determining the pension benefit obligation include (a) a rate of return on the investment of present and future assets of 5.0%per year compounded annually, (b) projected salary increases of 3.5% per year compounded annually, attributable to inflation, and (c) the assumption that benefits will increase 3.5% per year after retirement. 55 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1993 10. Defined Benefit Pension Plan - Fridley Police Relief Association (Continued) — B. Funding Status and Progress (Continued) — As of December 31, 1992, 1991 and 1990, (actuarial valuation dates), the unfunded pension benefit obligation was determined as follows:. 1992 1991 1990 Pension Benefit Obligation: — Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits $5,648,796 $5,318,532 $5,248,980 Current employees-- Accumulated employee contributions including — allocated investment income 306,998 322,209 295,542 Employer financed 1,297,693 1,481,255 1,384,248 Total Pension Benefit Obligation $7,253,487 $7,121,996 $6,928,770 Net assets available for benefits, at cost — (market value was$5,861,250 for 1990, $6,520,920 for 19991 and$7,058,758 for 1992) 6,824,845 6,186,418 5,728,808 Unfunded Pension Benefit Obligation $428,642 $935,578 $1,199,962 Net assets available/Pension benefit obligation 94.09% 86.86% 82.68% — Unfunded pension benefit obligation/ Annual covered payroll 137.00% 273.88% 359.10% Employer contributions/Annual covered payroll 66.13% 47.77% 45.40% —' No changes in actuarial assumptions or benefit provisions that would significantly affect the valuation of the pension benefit obligation occurred during 1993. 56 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1993 10. Defined Benefit Pension Plan - Fridley Police Relief Association (Continued) C. Contributions Required and Contributions Made Financial requirements of the Association were determined on an actuarial basis using the entry age normal actuarial cost method. Normal cost was funded on a current basis. The unfunded actuarial accrued liability was to be funded by December 31, 2010. The City's minimum obligation was the financial requirement for the year less anticipated member .-. contributions and state aids. Any additional payments by the City shall be used to amortize the unfunded liability of the Association. The funding strategy for normal cost and the unfunded actuarial accrued liability should provide sufficient resources to pay Association benefits on a timely basis. Total contributions to the Association in 1993 amounted to $200,237, of which $2,073 and $24,060 were made by the City and its police officers respectively and of which $174,104 was state aid received by the City and remitted to the Association. The contributed amounts were actuarially determined as described above and were equal to the contribution requirements determined by an actuarial valuation of the plan as of December 31, 1991. The contributions represent funding for normal cost of $60,259 and the amortization of the unfunded actuarial accrued liability of $139,978. Contributions made by the City, state and its police officers represent 1.1 percent, 86.9 percent and 12.0 percent, respectively, of covered payroll for the year. Significant actuarial assumptions used to compute pension contribution requirements are substantially the same as those to determine the standardized measure of the pension obligation. The computation of the pension contribution requirements for 1993 was based on the same actuarial assumptions, benefit provision, actuarial funding method, and other significant factors used to determine pension contribution requirements in previous years. D. Historical Trend Information Historical trend information related to the pension plan is presented in the Association's annual financial report. The information is presented to enable the reader to assess the progress made by the Association in accumulating sufficient assets to pay pension benefits as they become due. 57 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1993 11. Interfund Receivables and Payables '^ Interfund receivables and payables at December 31, 1993 are as follows: Interfund Interfund Receivables Payables Due From/Due To: General Fund $14,230 $403,260 Special Revenue Funds "' Grant Management Fund 16,724 HRA Reimbursement Fund 8,561 8,561 HRA Housing Fund 7,614 — Debt Service Funds Special Assessment Fund 129,498 Capital Projects Funds — Special Assessment Fund 916,627 HRA Fund 135,288 23,086 — Enterprise Funds Public Utility Fund 2,120 Internal Service Funds — Employee Benefits Fund 1,139,618 Self Insurance Fund 205,553 $1,505,370 $1,505,370 —" 58 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1993 12. Reserved Fund Balances/Retained Earnings The following reservations have been made of various fund balances/retained earnings at December 31, 1993. Fund Balance General Fund Reserved for: Encumbrances $67,671 Inventory 25,975 Prepaid items 59,829 Long-term receivables 144,030 $297,505 Special Revenue Funds Reserved for: Encumbrances $1,000 Long-term receivables 472 $1,472 — Debt Service Funds Reserved for Debt Service $3,878,456 Capital Projects Funds Reserved for: Encumbrances 797,636 Construction 8,225,314 Long-term receivables 1,083,564 $10,106,514 Total Governmental Funds $14,283,947 Retained Earnings Enterprise Funds Public Utilities Funds Reserved for capital outlay $2,058,000 Reserved for construction 425,603 Total Enterprise Funds $2,483,603 Internal Service Funds Employee Benefits Fund Reserved for employee benefits 268,362 _ Self-Insurance Fund Reserved for contingencies 604,954 Total Internal Service Funds $873,316 Total Proprietary Funds $3,356,919 59 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31. 1993 13. Designated Fund Balance — The following designations have been made of various fund balances at December 31, 1993: General Fund: Working Capital $3,109,597 _ Subsequent Year's Expenditures 936,472 Contingencies 239,655 Replacement of Fixed Assets 534,726 Total General Fund 4,820,450 Special Revenue Funds: Cable TV Fund- — Subsequent Year's Expenditures 18,669 Cable TV Program 135,108 Grant Management Fund- — Subsequent Year's Expenditures 845 Solid Waste Abatement Fund Subsequent Year's Expenditures 33,736 — Solid Waste Abatement 23,517 Drug and Gambling Forfeiture Fund Drug and Gambling Enforcement 11,821 "- Total Special Revenue Funds 223,696 Capital Projects Funds: — Capital Improvement Fund- Replacement of Fixed Assets 1,964,774 Park Improvement 839,940 — Street Improvements 5,768,463 Total Capital Project Fund 8,573,177 Total of Designated Fund Balances $13,617,323 14. Contributed Capital A reconciliation of contributed capital is as follows: — Public Utility Self Insurance Enterprise Fund Internal Service Fund Balance January 1 $12,256,552 $1,000,000 — Increases Current capital contributions 554,900 Decreases Depreciation of contributed assets (337,065) Balance December 31 $12,474,387 $1,000,000 60 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1993 15. Seament 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, 1993 is as follows: Total Enterprise Liquor Utility Funds Sales(less cost of sales of$2,214,716) $568,895 $ $568,895 Operating revenues 3,557,088 3,557,088 .... Operating expenses (492,512) (4,360,448) (4,852,960) Operating income(loss) 76,383 (803,360) (726,977) Non-operating revenues (expenses)- net 56,120 302,700 358,820 Net income(loss) $132,503 ($500,660) ($368,157) Depreciation expense included in operating expenses $25,686 $577,044 $602,730 Property and equipment- Additions(including capital contributions) 7,449 1,218,452 1,225,901 Deletions 43,187 43,187 Working capital 1,112,161 5,317,276 6,429,437 Total assets 1,580,556 25,378,193 26,958,749 Fund equity- ,_ Contributed capital 12,474,387 12,474,387 Retained earnings 1,407,355 10,102,668 11,510,023 Total fund equity $1,407,355 $22,577,055 $23,984,410 Current capital contributions $554,900 $554,900 Bonds payable $2,155,000 $2,155,000 61 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31. 1993 16. Unbudoeted Capital Prolect Funds The City does not budget all Capital Project Funds, and accordingly, the applicable columns of the Comibined 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: Other Financing Fund Balance _ Sources December 31, Revenues Expenditures (Uses) 1993 — All Capital Project Funds $6,178,443 $2,594,104 ($1,995,054) $18,017,892 Less unbudgeted funds: Special Assessment Fund 88,376 1,095,462 625,750 (661,799) HRA Fund 3,847,273 997,941 (1,995,054) 9,308,878 Budgeted Capital Project Funds $2,242,794 $500,701 ($625,750) $9,370,813 _ 17. Deferred Compensation Plan The City and Housing Redevelopment Authority (HRA) both offer their employees a deferred compensation plan established in accordance with Internal Revenue Code Section 457. The plan, available to all employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plans, all property and'rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employees or other beneficiary) solely the property and rights of the City and HRA, subject only to the claims of the City's and HRA's general creditors. Participants' rights under the plan are equal to those of general creditors of the City and HRA in an amount equal to the fair market value of the deferred account for each participant. — It is the opinion of legal counsel that the City and HRA have no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor. The City believes that it is unlikely that it will use the assets to satisfy the claims of general creditors in the — future. Plan assets, stated at market on December 31, 1993, are$4,518,485 and $1,892 for the City and HRA respectively; and are shown in the financial statements as Other assets' in the agency funds with a corresponding credit to 'Deposits payable'. 18. Litigation The City had the usual and customary type of miscellaneous claims pending at year-end, mostly of a minor nature and usually all covered by insurance carried for that purpose. At the present time, there is no significant litigation pending not covered by the City's insurance. 62 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1993 - 19. Leases The City leases the property at 214 Mississippi from the Fridley Housing and Redevelopment Authority ..., for a warehouse liquor store. The City and Housing and Redevelopment Authority have a lease with one year options. Rental expense is $21,250 annually. - 20. Deficit Balances The following fund had a deficit balance at December 31, 1993: Capital Project Funds: .� Special Assessments ($661,799) - This deficit balance will be funded by a combination of future General Obligation Improvement Bonds and transfers from other funds. 21. Tax Increment Districts The Fridley Housing and Redevelopment Authority is the administrating authority for the following Tax Increment Financing Districts: Retained - Year Tax Capacity Values Fiscal By Established District Original Current Captured Disparity Authority 1979 1 $251,798 $869,315 $617,517 $0 $617,517 1981 2 71,077 838,514 767,437 0 767,437 1982 3 244,534 1,472,246 1,227,712 275,561 952,151 1983 4 105,308 138,794 33,486 0 33,486 - 1984 5 48,101 40,186 0 0 0 1985 6 137,028 172,546 35,518 0 35,518 1986 7 10,960 85,899 74,939 0 74,939 1986 8 26,742 35,989 9,247 0 9,247 - 1989 9 970,180 978,368 8,188 0 8,188 1990 10 20,938 4,888 0 0 0 1991 11 63,148 100,992 37,844 0 37,844 - 1992 12 110,573 109,342 0 0 0 $2,060,387 $4,847,079 $2,811,888 $275,561 $2,536,327 M debt issued is pooled debt. Total bonds issued are$42,605,000. Total amount of bonds redeemed - is $26,835,000. Outstanding bonds at December 31, 1993, are $15,770,000. AU taxable value is currently retained by the Housing and Redevelopment Authority. 63 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1993 22. Subsequent Event On February 1, 1994, the City redeemed the Special Assessment Bonds of 1982 by exercising the call —, provision contained in the bond resolution. The call of the remaining $150,000 was funded by cash and investments on hand generated by prepayments of special assessments and interest earnings. 23. Prior Period Adlustment In previous years, the City incorrectly offset long-term receivables by deferred revenue. Since this — receivable is not available for expenditure or appropriation as of year-end, the balance of the receivable should be recorded as a reservation of fund balance. To show this correction, the 1992 financial statements, which are shown for comparative purposes, have been corrected. The effect of this change on fund balance is a follows: Capital General Project — Fund Funds Total Beginning fund balance, as previously reported $6,103,596 $13,555,458 $19,659,054 — Adjustment for change in accounting for long-term receivables 144,030 951,717 $1,095,747 — Beginning fund balance, as restated $6,247,626 $14,507,175 $20,754,801 Deferred revenue in each fund for 1992 has been decreased by an amount equal to the adjustment shown. 64 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. CITY OF FRIDLEY. MINNESOTA Exhibit B-1 - GENERAL FUND COMPARATIVE BALANCE SHEET December 31, 1993 and 1992 - 1993 1992 • Assets - Cash and cash equivalents $330 $330 Investments 7,176,852 6,216,612 Receivables: Accounts 14,691 15,475 Taxes- Unremitted 48,504 25,184 _ Delinquent 209,853 390,263 Special Assessments- Unremitted 61 Delinquent 3,806 7,955 - Deferred 2,937 3,045 Interest 261,531 1,094,432 Loans 6,300 6,300 Developer note 137,730 137,730 Due from other governments 55,430 53,842 Due from other funds 14,230 13,883 Inventories, at cost 25,975 26,428 Prepaid items 59,829 47,694 Total assets $8,017,998 $8,039,234 Liabilities and Fund Balance Liabilities: Accounts payable $128,638 $155,075 - Deposits payable 1,217 500 Contracts payable 47,958 Salaries payable 136,656 115,482 Deferred revenue 216,596 401,264 - Due to other governments 179,271 9,710 Due to other funds 403,260 847,466 Total liabilities 1,113,596 1,529,497 Fund balance: Reserved for encumbrances 67,671 98,240 - Reserved for inventory 25,975 26,428 Reserved for prepaid items 59,829 47,694 Reserved for long-term receivables 144,030 144,030 Unreserved- Designated for working capital 3,109,597 3,029,348 Designated for contingencies 936,472 908,366 Designated for subsequent year's expenditures 239,655 308,160 - Designated for fixed asset replacement 534,726 523,887 Undesignated 1,786,447 1,423,584 Total fund balance 6,904,402 6,509,737 Total liabilities and fund balance $8,017,998 $8,039,234 65 CITY OF FRIDLEY. MINNESOTA Exhibit B-2 GENERAL FUND STATEMENT OF REVENUES. EXPENDITURES. AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL - Year Ended December 31. 1993 With Comparative Actual Amounts for Year Ended December 31, 1992 1993 Variance - Favorable 1992 Budget Actual (Unfavorable) Actual Revenues: - Taxes $3,596,069 $3,667,991 $71,922 $3,590,062 Special assessments ,r, 1,397 2,896 1,499 3,524 Licenses and permits 338,148 322,201 (15,947) 317,243 - Intergovernmental revenue 2,963,769 3,033,365 69,596 3,053,759 Charges for services 734,489 787,742 53,253 745,212 Fines and forfeits 246,634 198,190 (48,444) 228,505 Interest on investments 419,165 541,163 121,998 480,912 Miscellaneous 78,279 130,561 52,282 142,939 Total revenues 8,377,950 8,684,109 306,159 8,562,156 _ Expenditures: Current- - General government 1,687,847 1,548,100 139,747 1,531,365 Public safety 3,462,533 3,405,367 57,166 3,312,190 Municipal center 186,581 169,493 17,088 172,664 Public works 2,195,497 2,147,000 48,497 2,088,263 Community development 418,925 407,470 11,455 378,690 Recreation and naturalist 765,939 720,759 45,180 702,421 Reserve for contingency 83,226 83,226 Capital outlay 333,853 305,531 28,322 355,337 Total expenditures 9,134,401 8,703,720 430,681 8,540,930 Excess(deficiency)of revenues over expenditures (756,451) (19,611) 736,840 21,226 Other financing sources(uses): Operating transfers in 412,578 400,292 (12,286) 210,938 Total other financing sources(uses) 412,578 400,292 (12,286) 210,938 - Deficiency of revenues and other financing sources over expenditures and other - financing uses (343,873) 380,681 724,554 232,164 Fund balance January 1, as previously reported 6,509,737 6,509,737 6,103,596 - Prior Period Adjustment 144,030 Fund balance January 1, as restated 6,509,737 6,509,737 6,247,626 Residual Equity Transfers in(out) 13,984 13,984 29,947 Fund balance December 31 $6,165,864 $6,904,402 $738,538 $6,509,737 66 Exhibit B-3 CITY OF FRIDLEY. MINNESOTA GENERAL FUND SCHEDULE OF REVENUES AND OTHER FINANCING SOURCES- BUDGET AND ACTUAL - Year Ended December 31. 1993 With Comparative Actual Amounts for Year Ended December 31, 1992 1993 Variance - Favorable 1992 Budget Actual (Unfavorable) Actual - Taxes and special assessments: Current ad valorem taxes $3,531,569 $3,450,431 ($81,138) $3,531,381 Delinquent ad valorem taxes 45,000 154,119 109,119 34,847 - Penalties and interest 15,000 57,856 42,856 22,926 Forfeited sale-taxes 4,500 5,585 1,085 908 Special assessments 1,397 2,896 1,499 3,524 - Total taxes and special assessments 3,597,466 3,670,887 73,421 3,593,586 - Licenses and permits: Licenses- Contractor 18,588 8,435 (10,153) 13,264 - Business 76,500 79,078 2,578 78,015 All other 33,314 25,004 (8,310) 32,167 Permits 209,746 209,684 (62) 193,797 - Total licenses and permits 338,148 322,201 (15,947) 317,243 Intergovernmental revenue: _, Civil defense 5,595 8,424 2,829 5,703 State maintenance aid 200,115 201,663 1,548 200,115 State credits 1,015,042 1,023,565 8,523 953,473 Local government aid 1,523,419 1,523,365 (54) 1,604,858 Other state grants 30,117 30,117 31,690 Police and fire pension 214,238 243,224 28,986 238,055 Other 5,360 3,007 (2,353) 19,865 - Total intergovernmental revenue 2,963,769 3,033,365 69,596 3,053,759 Charges for services: - General government 533,901 557,674 23,773 543,608 Public safety 53,017 80,190 27,173 49,512 Conservation of health 1,858 3,898 2,040 2,482 -- Recreation 145,713 145,980 267 149,610 Total charges for services 734,489 787,742 53,253 745,212 - Fine and forfeits 246,634 198,190 (48,444) 228,505 Interest on investments 419,165 541,163 121,998 480,912 - (Continued) 67 Exhibit B-3 Continued - CITY OF FRIDLEY. MINNESOTA GENERAL FUND SCHEDULE OF REVENUES AND OTHER FINANCING SOURCES-BUDGET AND ACTUAL _ Year Ended December 31. 1993 With Comparative Actual Amounts for Year Ended December 31, 1992 1993 Variance _ Favorable 1992 Budget Actual (Unfavorable) Actual Miscellaneous revenue: Rent income $5,379 $3,905 ($1,474) $5,327 Sale of property 11,150 15,212 4,062 22,299 _ Donations 14,750 26,685 11,935 27,636 Miscellaneous 47,000 84,759 37,759 87,677 Total miscellaneous revenue 78,279 130,561 52,282 142,939 _ Total revenues 8,377,950 8,684,109 306,159 8,562,156 Other financing sources: - Operating transfers in- Employee Benefit Fund 100,000 100,000 100,000 Special Assessment Encumbrance Fund 12,286 (12,286) IRDB Deposit Fund 10,393 Special Assessment Debt Service Fund 300,292 300,292 100,545 Total other financing sources 412,578 400,292 (12,286) 210,938 Total revenues and other financing sources $8,790,528 $9,084,401 $293,873 $8,773,094 68 Exhibit B-4 CITY OF FRIDLEY. MINNESOTA - GENERAL FUND SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES- BUDGET AND ACTUAL Year Ended December 31. 1993 - With Comparative Actual Amounts for Year Ended December 31, 1992 1993 Variance Favorable 1992 Budget Actual (Unfavorable) Actual _ General government: Mayor and Council- Personal services $50,119 $48,015 $2,104 $49,569 Supplies and other charges 57,401 46,689 10,712 43,552 107,520 94,704 12,816 93,121 Planning commission- - Supplies and other charges 3,654 794 2,860 597 3,654 794 2,860 597 - Other commissions- Supplies and other charges 5,937 3,058 2,879 1,789 5,937 3,058 2,879 1,789 - City manager- Personal services 257,234 235,778 21,456 238,274 _ Supplies and other charges 44,946 40,834 4,112 42,583 302,180 276,612 25,568 280,857 _ Personnel- Personal services 73,605 73,519 86 69,081 Supplies and other charges 11,217 9,267 1,950 13,103 84,822 82,786 2,036 82,184 - Legal- Supplies and other charges 207,500 195,642 11,858 159,828 - 207,500 195,642 11,858 159,828 Elections- Personal services 22,126 Supplies and other charges 713 713 3,581 713 713 0 25,707 - (Continued) 69 Exhibit B-4 Continued CITY OF FRIDLEY. MINNESOTA GENERAL FUND - SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES-BUDGET AND ACTUAL Year Ended December 31. 1993 With Comparative Actual Amounts for Year Ended December 31, 1992 - 1993 Variance - Favorable 1992 Budget Actual (Unfavorable) Actual General government(continued): - Accounting- Personal services $447,131 $400,456 $46,675 $419,397 Supplies and other charges 60,813 60,813 80,439 - 507,944 461,269 46,675 499,836 Assessing- - Personal services 143,023 136,097 6,926 135,295 Supplies and other charges 17,997 17,997 9,709 161,020 154,094 6;926 145,004 - MIS- Personal services 100,225 96,812 3,413 94,075 - Supplies and other charges 58,251 37,544 20,707 48,387 158,476 134,356 24,120 142,462 City clerk/records- Personal services 82,179 80,979 1,200 75,104 Supplies and other charges 8,240 5,567 2,673 6,057 - 90,419 86,546 3,873 81,161 Nondepartmental- _ Personal services 302 166 136 1,009 Supplies and other charges 57,360 57,360 17,810 57,662 57,526 136 18,819 - Total general government 1,687,847 1,548,100 139,747 1,531,365 - (Continued) 70 Exhibit B-4 Continued - CITY OF FRIDLEY. MINNESOTA - GENERAL FUND SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES-BUDGET AND ACTUAL Year Ended December 31. 1993 With th Comparative Actual Amounts for Year Ended December 31, 1992 1993 Variance Favorable 1992 Budget Actual (Unfavorable) Actual Public safety: - Police- Personal services $2,487,119 $2,476,715 $10,404 $2,421,627 Supplies and other charges 290,307 287,660 $2,647 261,138 - 2,777,426 2,764,375 13,051 2,682,765 _ Fire- Personal services 579,506 541,774 37,732 524,455 Supplies and other charges 96,987 93,106 3,881 97,397 676,493 634,880 41,613 621,852 - Civil defense- Supplies and other charges 8,614 6,112 2,502 7,573 8,614 6,112 2,502 7,573 Total public safety 3,462,533 3,405,367 57,166 3,312,190 Municipal center: Personal services 26,072 24,469 1,603 25,269 Supplies and other charges 160,509 145,024 15,485 147,395 Total municipal center 186,581 169,493 17,088 172,664 - Public works: - Engineering- Personal services 367,542 367,542 344,128 Supplies and other charges 42,854 42,854 30,964 - 410,396 410,396 0 375,092 Public works and Parks: - Personal services 1,037,459 1,029,256 8,203 994,217 Supplies and other charges 747,642 707,348 40,294 718,954 .. 1,785,101 1,736,604 48,497 1,713,171 Total public works 2,195,497 2,147,000 48,497 2,088,263 (Continued) 71 Exhibit B-4 Continued CITY OF FRIDLEY. MINNESOTA GENERAL FUND - SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES- BUDGET AND ACTUAL Year Ended December 31. 1993 With Comparative Actual Amounts for Year Ended December 31, 1992 1993 Variance - Favorable 1992 Budget Actual (Unfavorable) Actual Community Development: Building inspection Personal services $131,600 $130,781 $819 $116,962 _ Supplies and other charges 44,773 44,773 40,909 176,373 175,554 819 157,871 Planning- _ Personal services 212,877 202,241 10,636 194,798 Supplies and other charges 29,675 29,675 26,021 _ 242,552 231,916 10,636 220,819 Total community development 418,925 407,470 11,455 378,690 - Recreation and Naturalist: Recreation- - Personal services 384,167 364,313 19,854 365,179 Supplies and other charges 144,780 129,149 15,631 116,661 528,947 493,462 35,485 481,840 _ Naturalist- Personal services 173,715 166,467 7,248 162,889 Supplies and other charges 63,277 60,830 2,447 57,692 236,992 227,297 9,695 220,581 Total recreation and naturalist 765,939 720,759 45,180 702,421 - Reserve for contingency- 83,226 83,226 (Continued) 72 Exhibit B-4 Continued CITY OF FRIDLEY, MINNESOTA - GENERAL FUND SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES-BUDGET AND ACTUAL Year Ended December 31, 1993 - With Comparative Actual Amounts for Year Ended December 31, 1992 1993 - Variance Favorable 1992 Budget Actual (Unfavorable) Actual - Capital outlay expenditures- City manager $3,195 $2,654 $541 $1,649 Personnel 1,698 1,698 -" Assessing 2,609 2,609 MIS 14,375 5,223 9,152 17,653 City clerk/records 5,663 5,347 316 -" Police 82,690 82,690 99,604 Fire 62,995 58,744 4,251 51,055 Municipal center 4,225 - Building inspection 15,000 15,000 Planning 1,649 Engineering 14,490 4,090 10,400 46,711 - Public works 109,423 109,423 117,347 Naturalist 7,987 Recreation 21,715 20,662 1,053 7,457 -- Total capital outlay 333,853 305,531 28,322 355,337 Total expenditures $9,134,401 $8,703,720 $430,681 $8,540,930 73 SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for revenues derived from specific taxes or other earmarked revenue sources. They are usually required by statute, charter provision or local ordinance to finance particular governmental functions or activities. Cable TV Fund This fund receives revenues from the issuance of a franchise agreement with the cable TV provider. These revenues are used for the operation and maintenance of a government access channel. Grant Management Fund This fund administers grants received from a variety of intergovernmental agencies. in most cases, grant funds are provided on a reimbursement basis following proper documentation of expenditures, however, in some cases the money is provided in advance to be spent on specific activities outlined in the grant. Solid Waste Abatement Fund This fund receives grants, recycling fees and yard waste fees. These revenues finance the City's curbside recycling pickup and operation of the yard waste transfer site. Drug and Gambling Forfeiture Fund This fund receives forfeited property in connection with illegal gambling or drug activity. Pursuant to Minnesota statutes the proceeds are disbursed equally between the investigating agency and the prosecuting agency. HRA Reimbursement Fund This fund receives revenues from the Housing and Redevelopment Authority. These revenues are used to reimburse the City for professional services provided by city staff for HRA related activities. HRA Housing Fund This fund receives tax increments in order to administer the Housing and Redevelopment Authority's housing rehabilitation programs. The HRA has targeted the removal of blighted property and low interest improvement loans to older houses as major housing issues for the City. CITY OF FRIDLEY. MINNESOTA SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET December 31. 1993 With Comparative Totals for December 31, 1992 -" Solid Waste Cable Grant Abatement TV Management Fund Assets Cash and cash equivalents $10,000 $ $ -' Investments 142,883 13,576 • Receivables: Accounts 22,036 751 12,432 Mortgages Deferred Due from other funds — Due from other governments 23,027 44,690 Total assets $174,919 $23,778 $70,698 — Liabilities and Fund Balance -' Liabilities: Accounts payable $10,811 $4,251 $12,785 Deposits payable 10,000 Salaries payable 331 958 660 Due to other funds 16,724 Due to other governments Total liabilities 21,142 21,933 13,445 Fund balance: Reserved- Reserved for encumbrances 1,000 Reserved for long-term receivables Unreserved- Designated for subsequent — year's expenditures 18,669 33,736 Designated for special revenue programs 135,108 845 23,517 Total fund balance 153,777 1,845 57,253 Total liabilities and fund balance $174,919 $23,778 $70,698 76 Exhibit C-1 Drug& Gambling HRA Forfeiture HRA Totals Reimbursement Fund Housing 1993 1992 $ $ $ $10,000 $10,000 11,821 168,280 379,376 35,219 27,535 472 472 8,561 8,561 1,613 11,613 • 79,330 41,450 $8,561 $11,821 $12,085 $301,862 $459,974 - $2,997 $30,844 $273,149 10,000 10,000 856 2,805 697 8,561 7,614 32,899 1,584 146 146 32 8,561 0 11,613 76,694 285,462 1,000 472 472 52,405 3,661 11,821 171,291 170,851 0 11,821 472 225,168 174,512 $8,561 $11,821 $12,085 $301,862 $459,974 77 CITY OF FRIDLEY, MINNESOTA — SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Year Ended December 31, 1993 With Comparative Totals for Year Ended December 31, 1992 — Solid Waste Cable Grant Abatement TV Management Fund Revenues: Charges for services $ $ $101,533 — Fines and forfeits Licenses and permits 87,934 Intergovernmental revenue 78,685 84,059 Interest on investments 20,977 Miscellaneous 73,200 1,005 Total revenues 182,111 79,690 185,592 —' Expenditures: Current- — General government 87,654 78,213 190,968 Public safety Capital outlay 62,216 '- Total expenditures 149,870 78,213 190,968 • Excess(deficiency)of revenues over expenditures 32,241 1,477 (5,376) Other financing sources(uses): -- Operating transfers in 24,981 Total other financing sources(uses) 0 0 24,981 Excess(deficiency)of revenues and other financing sources over expenditures and other financing uses 32,241 1,477 19,605 Fund balance January 1 121,536 368 37,648 Fund balance December 31 $153,777 $1,845 $57,253 78 Exhibit C-2 Drug& - Gambling HRA Forfeiture HRA Totals Reimbursement Fund Housing 1993 1992 - $ $ $ $101,533 $88,988 5,602 5,602 11,375 87,934 84,475 16,314 179,058 514,203 20,977 9,981 74,205 189 16,314 5,602 0 469,309 709,211 16,314 51,916 425,065 608,808 7,930 7,930 7,933 - 811 1,698 64,725 91,704 16,314 8,741 53,614 497,720 708,445 (3,139) (53,614) (28,411) 766 54,086 79,067 40,589 0 0 54,086 79,067 40,589 - (3,139) 472 50,656 41,355 0 14,960 174,512 133,157 $0 $11,821 $472 $225,168 $174,512 79 Exhibit C-3 CITY OF FRIDLEY. MINNESOTA CABLE TV SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET -- December 31, 1993 and 1992 1993 1992 Assets -- Cash and cash equivalents $10,000 $10,000 Investments 142,883 109,193 Accounts receivable 22,036 21,531 Total assets $174,919 $140,724 — Liabilities and Fund Balance -- Liabilities: Accounts payable $10,811 $9,188 Deposits payable 10,000 10,000 Salaries payable 331 Total liabilities 21,142 19,188 Fund balance: Reserved for encumbrances -- Unreserved- Designated for subsequent year's expenditures 18,669 3,293 Designated for cable TV program 135,108 118,243 Total fund balance 153,777 121,536 Total liabilities and fund balance $174,919 $140,724 80 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. 1993 With Comparative Amounts for Year Ended December 31, 1992 1993 Variance Favorable 1992 Budget Actual (Unfavorable) Actual _ Revenues: Licenses-franchise fee $95,000 $87,934 ($7,066) $84,475 Interest on investments 8,000 20,977 12,977 9,981 _ Donations 73,200 73,200 Total revenues 176,200 182,111 5,911 94,456 Expenditures: Current General government- Personal services 39,261 36,756 2,505 34,701 Supplies and other charges 51,816 50,898 918 48,325 Capital outlay 62,216 62,216 2,804 Total expenditures 153,293 149,870 3,423 85,830 Excess(deficiency)of revenues over expenditures 22,907 32,241 9,334 8,626 Fund balance January 1 121,536 121,536 112,910 Fund balance December 31 $144,443 $153,777 $9,334 $121,536 81 Exhibit C-5 CITY OF FRIDLEY, MINNESOTA GRANT MANAGEMENT SPECIAL REVENUE FUND — COMPARATIVE BALANCE SHEET December 31, 1993 and 1992 1993 1992 — Assets Investments $ $240,114 — Accounts receivable 751 661 Due from other governments 23,027 15,782 Total assets $23,778 $256,557 -- Liabilities and Fund Balance Liabilities: — Accounts payable $4,251 $255,492 Due to other funds 16,724 — Salaries payable 958 697 Total liabilities 21,933 256,189 Fund balance: Reserved- Reserved for encumbrances 1,000 — Unreserved- Designated for subsequent year's expenditures 845 368 Total fund balance 1,845 368 — Total liabilities and fund balance $23,778 $256,557 — 82 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, 1993 With Comparative Amounts for Year Ended December 31, 1992 1993 Variance Favorable 1992 Budget Actual (Unfavorable) Actual Revenues: Intergovernmental revenue- Federal $77,427 $76,479 ($948) $152,572 _ State 14,457 2,206 (12,251) 259,335 Donations 1,005 1,005 189 Total revenues 91,884 79,690 (12,194) 412,096 Expenditures: Current General government- Personal services 49,028 48,532 496 43,321 Supplies and other charges 42,856 29,681 13,175 280,176 Capital outlay 88,900 Total expenditures 91,884 78,213 13,671 412,397 Excess(deficiency)of revenues over expenditures 1,477 1,477 (301) Fund balance January 1 368 368 669 Fund balance December 31 $368 $1,845 $1,477 $368 83 Exhibit C-7 CITY OF FRIDLEY. MINNESOTA SOLID WASTE ABATEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1993 and 1992 1993 1992 Assets Investments $13,576 $16,089 — Accounts receivable 12,432 5,343 Due from other governments 44,690 24,166 Total assets $70,698 $45,598 Liabilities and Fund Balance Liabilities: Accounts payable $12,785 $7,950 Salaries payable 660 Total liabilities 13,445 7,950 Fund balance: -, Unreserved- Designated for subsequent year's expenditures 33,736 Designated for solid waste abatement 23,517 37,648 — Total fund balance 57,253 37,648 — Total liabilities and fund balance $70,698 $45,598 84 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. 1993 -' With Comparative Amounts for Year Ended December 31, 1992 - 1993 Variance Favorable 1992 Budget Actual (Unfavorable) Actual Revenues: Intergovernmental revenue- State $42,000 $84,059 $42,059 $52,358 Charges for services 87,860 101,533 13,673 88,988 Total revenues 129,860 185,592 55,732 141,346 Expenditures: Current General government- Personal services 42,031 42,031 44,508 Supplies and other charges 148,937 148,937 107,839 Total expenditures 190,968 190,968 0 152,347 Excess of revenues over expenditures (61,108) (5,376) 55,732 (11,001) - Other financing sources(uses): Operating transfers in- Special Assessment Debt Service Fund 24,981 24,981 40,589 Excess(deficiency)of revenues and other financing sources over expenditures. (36,127) 19,605 55,732 29,588 Fund balance January 1 37,648 37,648 8,060 - Fund balance December 31 $1,521 $57,253 $55,732 $37,648 85 Exhibit C-9 CITY OF FRIDLEY. MINNESOTA HRA REIMBURSEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1993 and 1992 1993 1992 Assets Due from other funds $8,561 $1,613 ~ Total assets $8,561 $1,613 Liabilities and Fund Balance Liabilities: Accounts payable $ $29 Due to other funds 8,561 1,584 Total liabilities 8,561 1,613 — Fund balance: Unreserved- undesignated 0 0 — Total liabilities and fund balance $8,561 $1,613 86 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, 1993 With Comparative Amounts for Year Ended December 31, 1992 1993 Variance Favorable 1992 Budget Actual (Unfavorable) Actual Revenues: Intergovernmental revenue- -- Housing Redevelopment Authority $16,314 $16,314 $ $49,938 Total revenues 16,314 16,314 0 49,938 — Expenditures: Current General government- — Supplies and other charges 16,314 16,314 49,938 Total expenditures 16,314 16,314 0 49,938 Excess of revenues over expenditures 0 0 0 -- Fund balance January 1 0 0 0 Fund balance December 31 $0 $0 $0 $0 87 Exhibit C-11 CITY OF FRIDLEY, MINNESOTA DRUG AND GAMBLING FORFEITURE SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1993 and 1992 1993 1992 Assets Investments $11,821 $13,980 Due from other governments 1,502 — Total assets $11,821 $15,482 Liabilities and Fund Balance Liabilities: Accounts payable $ $490 Due to other governments 32 — Total liabilities 0 522 Fund balance: — Unreserved-designated for drug and gambling enforcement $11,821 $14,960 Total liabilities and fund balance $11,821 $15,482 88 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. 1993 With Comparative Amounts for Year Ended December 31, 1992 1993 Variance Favorable 1992 Budget Actual (Unfavorable) Actual Revenues: _ Fines and forfeits $5,602 $5,602 $ $11,375 Total revenues 5,602 5,602 0 11,375 Expenditures: Current Public safety- Supplies and other charges 7,930 7,930 7,933 Capital outlay 811 811 Total expenditures 8,741 8,741 0 7,933 Excess of revenues over expenditures (3,139) (3,139) 3,442 Fund balance January 1 14,960 14,960 11,518 Fund balance December 31 $11,821 $11,821 $0 $14,960 89 Exhibit C-13 CITY OF FRIDLEY, MINNESOTA HRA HOUSING SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1993 and 1992 1993 1992 Assets Receivables: Mortgages- Deferred $472 $ "- Due from other governments 11,613 Total assets $12,085 $0 Liabilities and Fund Balance Liabilities: — Accounts payable $2,997 $ Salaries payable 856 Due to other funds 7,614 Due to other governments 146 Total liabilities 11,613 0 Fund balance: Reserved for mortgages receivable 472 0 Total liabilities and fund balance $12,085 $0 90 Exhibit C-14 CITY OF FRIDLEY, MINNESOTA HRA HOUSING SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL Year Ended December 31, 1993 _ 1993 Variance Favorable 1992 Budget Actual (Unfavorable) Actual Expenditures: ,., Current General government- Personal Services $32,850 $32,850 $ $ Supplies and other charges 19,066 19,066 Capital Outlay 1,698 1,698 Total expenditures 53,614 53,614 0 0 Excess(deficiency)of revenues over expenditures (53,614) (53,614) 0 0 Other financing sources(uses): Operating transfer in - _ HRA Capital Project Fund 54,086 54,086 0 0 Excess(deficiency)of revenues and other financing sources over expenditures 472 472 0 0 — Fund balance January 1 Fund balance December 31 $472 $472 $0 $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 be benefited from such improvements. HRA Fund This fund services the debt of the tax increment bonds. Tax increment money is used to service the debt on redevelopment related bonds. Exhibit D-1 CITY OF FRIDLEY. MINNESOTA DEBT SERVICE FUNDS COMBINING BALANCE SHEET December 31. 1993 With Comparative Totals for December 31, 1992 Special Totals Assessment HRA 1993 1992 Assets Cash and cash equivalents $ $1,049,631 $1,049,631 $ Investments 11,902,335 11,902,335 11,858,334 Receivables: Special Assessments- Unremitted 16,830 16,830 23,595 Delinquents 87,105 87,105 114,070 Deferred 2,430,155 2,430,155 2,459,873 Total assets $14,436,425 $1,049,631 $15,486,056 $14,455,872 Liabilities and Fund Balance Liabilities: Accounts payable $487 $108 $595 $7,886 Deferred revenue 2,517,260 2,517,260 2,573,943 Due to other funds 129,498 129,498 21,588 Total liabilities 2,647,245 108 2,647,353 2,603,417 Fund balance: Reserved for debt service 2,828,933 1,049,523 3,878,456 3,538,227 Unreserved-undesignated 8,960,247 8,960,247 8,314,228 Total fund balance 11,789,180 1,049,523 12,838,703 11,852,455 Total liabilities and fund balance $14,436,425 $1,049,631 $15,486,056 $14,455,872 93 Exhibit D-2 CITY OF FRIDLEY. MINNESOTA DEBT SERVICE FUNDS --- COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES Year Ended December 31. 1993 With Comparative Totals for Year Ended December 31, 1992 Special Totals Assessment HRA 1993 1992 ,.. Revenues: Special assessments $499,961 $ $499,961 $528,603 Interest on investments 1,066,182 1,066,182 931,494 Total revenues 1,566,143 0 1,566,143 1,460,097 -...- Expenditures: Debt service- Principal retirement 640,000 285,000 925,000 715,000 Interest and fiscal charges 258,651 1,011,939 1,270,590 1,169,325 Total expenditures 898,651 1,296,939 2,195,590 1,884,325 Excess(deficiency)of revenues over expenditures 667,492 (1,296,939) (629,447) (424,228) Other financing sources(uses): Operating transfers in(out)- Bond Proceeds 4,266,681 -. HRA Capital Projects Fund 1,940,968 1,940,968 (2,969,393) General Fund (300,292) (300,292) (100,545) Special Assessment Capital Projects Fund (11,925) — Solid Waste Abatement Fund (24,981) (24,981) (40,589) Total other financing sources(uses) (325,273) 1,940,968 1,615,695 1,144,229 Excess(deficiency)of revenues and other financing sources over expenditures and other financing uses 342,219 644,029 986,248 720,001 — Fund balance January 1 11,446,961 405,494 11,852,455 11,132,454 Fund balance December 31 $11,789,180 $1,049,523 $12,838,703 $11,852,455 94 CAPITAL PROJECTS FUNDS Capital Projects Funds are used to account for the resources expended to acquire permanent or long term assets. These funds are established to provide special accounting for bond proceeds, grants and contributions designated for the acquisition of capital assets. Capital 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 which are to be paid for primarily by the benefited property owner. HRA Fund This fund receives revenues from general property taxes in the form of tax increment and also from land sale proceeds. A board of commissioners is appointed by the City Council and they use these funds to purchase land in the City of Fridley for resale to developers of commercial facilities. CITY OF FRIDLEY. MINNESOTA CAPITAL PROJECTS FUNDS — COMBINING BALANCE SHEET December 31. 1993 With Comparative Totals for December 31, 1992 Capital Special — Improvements Assessments Assets Cash and cash equivalents $ $ — Investments 9,375,512 403,436 Receivables: Accounts -' Taxes- Unremitted 925 Delinquent 7,060 — Specials- Unremitted Delinquent 99 — Deferred 26,721 Mortgage- Deferred Interest Due from other funds Due from other governments Total assets $9,383,497 $430,256 Liabilities and Fund Balance Liabilities: Accounts payable $5,624 $ _ Deposits payable 89,682 Contracts payable 58,926 Deferred revenue 7,060 26,820 Due to other funds 916,627 Due to other governments Total liabilities 12,684 1,092,055 _ Fund balance: Reserved for encumbrances 797,636 Reserved for construction Reserved for long-term receivables Unreserved- Designated for fixed asset replacement 1,964,774 Designated for park improvements 839,940 Designated for street improvements 5,768,463 Undesignated (661,799) — Total fund balance 9,370,813 (661,799) Total liabilities and fund balance $9,383,497 $430,256 .- 96 Exhibit E-1 Totals HRA 1993 1992 '- $258,143 $258,143 $20,514 7,909,337 17,688,285 16,469,030 1,037 1,037 5,344 86,650 87,575 454 311,059 318,119 647,017 443 '- 99 4,196 26,721 31,541 1,083,564 1,083,564 951,717 62,149 62,149 86,261 135,288 135,288 21,588 37,830 $9,847,227 $19,660,980 $18,275,935 $12,649 $18,273 $129,403 89,682 105,621 58,926 21,750 311,059 344,939 682,754 '- 23,086 939,713 655,261 191,555 191,555 238,555 538,349 1,643,088 1,833,344 797,636 79,474 8,225,314 8,225,314 7,502,883 1,083,564 1,083,564 951,717 1,964,774 1,798,084 839,940 934,493 5,768,463 5,442,419 (661,799) (266,479) 9,308,878 18,017,892 16,442,591 $9,847,227 $19,660,980 $18,275,935 97 • CITY OF FRIDLEY. MINNESOTA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended December 31. 1993 _ With Comparative Totals for Year Ended December 31, 1992 Capital Special Improvements Assessments Revenues: Taxes- Tax increment $ $ Current ad valorem taxes 71,254 Delinquent ad valorem taxes 3,109 Special assessments 8,732 -' Total taxes 74,363 8,732 Intergovernmental revenue- State credits 15,000 State aid for construction 1,190,412 Total intergovernmental revenue 1,205,412 0 Charges for services- General government 39,461 — Total charges for services 0 39,461 Interest on investments 856,230 40,183 Miscellaneous revenue- Rental income 664 -' Donations 106,125 Other Total miscellaneous revenue 106,789 0 Total revenues 2,242,794 88,376 (Continued) 98 Exhibit E-2 Totals HRA 1993 1992 — $3,164,395 $3,164,395 $2,931,681 71,254 69,190 3,109 697 — 103,057 111,789 212,781 3,267,452 3,350,547 3,214,349 15,000 17,941 1,190,412 952,663 — 0 1,205,412 970,604 — 39,461 8,390 0 39,461 8,390 — 504,952 1,401,365 1,056,080 — 70,164 70,828 86,834 106,125 34,415 4,705 4,705 44,569 — 74,869 181,658 165,818 3,847,273 6,178,443 5,415,241 • 99 CITY OF FRIDLEY. MINNESOTA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCE(Continued) Year Ended December 31. 1993 _ With Comparative Totals for Year Ended December 31, 1992 Capital Special Improvements Assessments _ Expenditures: Current- _ General government $ $ Public works 103,523 126,467 Debt service- _ Loan principal 3,458 Loan interest 8,843 Capital outlay 397,178 956,694 _ Total expenditures 500,701 1,095,462 Excess(deficiency)of revenues _ over expenditures 1,742,093 (1,007,086) Other financing sources(uses): Bond proceeds Loan proceeds Operating transfers in (out)- — HRA Special Revenue Fund HRA Debt Service Fund Special Assessment Debt Service Fund Capital Improvement Fund 625,750 — Special Assessment Capital Projects Fund (625,750) Total other financing sources(uses) (625,750) 625,750 _ Excess(deficiency)of revenues and other financing sources over expenditures _ and other financing uses 1,116,343 (381,336) Fund balance January 1, as previously reported 8,254,470 (266,479) Prior period adjustment Fund balance January 1, as restated (266,479) Residual Equity Transfer in(out) (13,984) Fund balance(deficit)December 31 $9,370,813 ($661,799) 100 Exhibit E-2 Continued Totals HRA 1993 1992 $639,776 $639,776 $717,363 229,990 218,707 3,458 8,843 _ 358,165 1,712,037 6,237,228 997,941 2,594,104 7,173,298 2,849,332 3,584,339 (1,758,057) 607,102 135,000 (54,086) (54,086) (1,940,968) (1,940,968) 2,969,393 11,925 625,750 (625,750) (1,995,054) (1,995,054) 3,723,420 854,278 1,589,285 1,965,363 8,454,600 16,442,591 13,555,458 951,717 '— 8,454,600 16,442,591 14,507,175 (13,984) (29,947) $9,308,878 $18,017,892 $16,442,591 101 Exhibit E-3 CITY OF FRIDLEY, MINNESOTA CAPITAL IMPROVEMENTS CAPITAL PROJECT FUND COMPARATIVE BALANCE SHEET December 31, 1993 and 1992 1993 1992 Assets — Cash and cash equivalents $ $ Investments 9,375,512 8,275,393 Receivables: Taxes- Unremitted 925 454 _ Delinquent 7,060 8,695 Total assets $9,383,497 $8,284,542 _ Liabilities and Fund Balance Liabilities: Accounts payable $5,624 $4,919 Contracts payable 3,591 Deferred revenue 7,060 8,695 Due to other governments 963 Due to other funds 11,904 Total liabilities 12,684 30,072 — Fund balance: Reserved for encumbrances 797,636 79,474 Unreserved- Designated for fixed asset replacement 1,964,774 1,798,084 Designated for park improvements 839,940 934,493 Designated for street improvements 5,768,463 5,442,419 Total fund balance 9,370,813 8,254,470 Total liabilities and fund balance $9,383,497 $8,284,542 102 CITY OF FRIDLEY. MINNESOTA Exhibit E-4 CAPITAL IMPROVEMENTS CAPITAL PROJECT FUND - STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL Year Ended December 31. 1993 - With Comparative Amounts for Year Ended December 31, 1992 - 1993 Variance Favorable 1992 Budget Actual (Unfavorable) Actual - Revenues: Taxes- Current ad valorem taxes $70,550 $71,254 $704 $69,190 - Delinquent ad valorem taxes 3,109 3,109 697 Total taxes 70,550 74,363 3,813 69,887 Intergovenmental revenue- State credits 15,000 15,000 17,941 State aid for construction 659,000 1,190,412 531,412 911,823 Total intergovernmental revenue 674,000 1,205,412 531,412 929,764 Charges for services- General Government 8,390 Total charges for services o 0 0 8,390 Interest on investments 585,210 856,230 271,020 603,748 Miscellaneous revenue- Donations 110,000 106,125 (3,875) 34,415 - Other 664 664 10,000 Total miscellaneous revenue 110,000 106,789 (3,211) 44,415 - Total revenues 1,439,760 2,242,794 803,034 1,656,204 _ Expenditures: Current - Public works 465,694 103,523 362,171 218,707 Capital outlay 798,992 397,178 401,814 327,597 - Total expenditures 1,264,686 500,701 763,985 546,304 Excess(deficiency)of revenues over expenditures 175,074 1,742,093 1,567,019 1,109,900 Other financing sources(uses): Operating transfers in (out): - HRA Capital Project Fund (19,590) Special Assessment Capital Projects Fund (625,750) (625,750) Total other financing sources(uses) (625,750) (625,750) 0 (19,590) Excess(deficiency)of revenues an other financing sources over expenditures - and other financing uses (450,676) 1,116,343 1,567,019 1,090,310 Fund balance January 1 8,254,470 8,254,470 7,164,160 - Fund balance December 31 $7,803,794 $9,370,813 $1,567,019 $8,254,470 103 ENTERPRISE FUNDS Enterprise Funds are used to account for the operations of self-supporting governmental activities which render services or goods to the public. The accounting records are maintained on an accrual basis. The reporting for enterprise funds is similar to comparable private enterprises. Creditors, legislators or the general public can evaluate the performance of a municipal enterprise on the same basis as they can the performance of investor-owned enterprises. Liquor Fund This fund accounts for the operation of two off-sale liquor establishments. Public Utilities Fund This fund accounts for the operations of the City-owned sewer and water systems. - CITY OF FRIDLEY. MINNESOTA Exhibit F-1 ENTERPRISE FUNDS ._ COMBINING BALANCE SHEET December 31. 1993 With Comparative Totals for December 31, 1992 - Public Totals Liquor Utilities 1993 1992 - Assets Current Assets: -.. Cash and cash equivalents $1,017,058 $4,647,868 $5,664,926 $2,154,639 Investments 3,666,708 Accounts receivable 1,139,967 1,139,967 963,340 - Due from other funds 2,120 2,120 3,432 Due from other governments 20,492 20,492 19,874 Inventories, at cost 268,304 9,467 277,771 275,433 _ Prepaid items 223,500 223,500 204,947 Total current assets 1,285,362 6,043,414 7,328,776 7,288,373 Restricted Assets: _ Cash and cash equivalents 425,603 425,603 Investments 611,291 Total restricted assets 0 425,603 425,603 611,291 Long-term receivable- - Metro Waste Control Commission 213,540 213,540 279,428 Property and equipment, at cost: - Property and equipment 576,294 26,748,618 27,324,912 26,142,198 Less: accumulated depreciation (281,100) (8,052,982) (8,334,082) (7,774,539) Net property and equipment 295,194 18,695,636 18,990,830 18,367,659 - Total assets $1,580,556 $25,378,193 $26,958,749 $26,546,751 Liabilities and Fund Equity Current liabilities: Accounts payable $137,598 $40,819 $178,417 $185,754 _ Contracts payable 134,658 134,658 35,831 Salaries payable 4,262 8,350 12,612 9,618 Due to other governments 31,341 408,481 439,822 270,363 Accrued interest payable 53,830 53,830 47,518 Bonds payable-current 80,000 80,000 45,000 Total current liabilities 173,201 726,138 899,339 594,084 -Long-term liabilities: Bonds payable 2,075,000 2,075,000 2,155,000 Total liabilities 173,201 2,801,138- 2,974,339 2,749,084 Fund equity: Contributed capital 12,474,387 12,474,387 12,256,552 Retained earnings- Reserved for capital outlay 2,058,000 2,058,000 2,499,895 Reserved for construction 425,603 425,603 611,291 Unreserved 1,407,355 7,619,065 9,026,420 8,429,929 Total retained earnings 1,407,355 10,102,668 11,510,023 11,541,115 Total fund equity 1,407,355 22,577,055 23,984,410 23,797,667 Total liabilities and fund equity $1,580,556 $25,378,193 $26,958,749 $26,546,751 105 Exhibit F-Z CITY OF FRIDLEY. MINNESOTA ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES. EXPENSES AND CHANGES IN RETAINED EARNINGS Year Ended December 31. 1993 With Comparative Totals for Year Ended December 31, 1992 Public Totals Liquor Utilities 1993 1992 Sales and cost of sales: Sales $2,783,611 $ $2,783,611 $2,848,224 Cost of sales 2,214,716 _ 2,214,716 2,244,851 Gross profit 568,895 568,895 603,373 Operating revenues: Water sales and sewer rents 3,436,041 3,436,041 3,045,473 Other 121,047 121,047 65,811 Total operating revenues 3,557,088 3,557,088 3,111,284 Operating expenses: -- Personal services 288,173 716,160 1,004,333 1,007,284 Supplies and other charges- Disposal charges 2,395,871 2,395,871 1,877,692 - Other 178,653 671,373 850,026 779,759 Depreciation 25,686 577,044 602,730 594,068 Total operating expenses 492,512 4,360,448 4,852,960 4,258,803 - Operating income(loss) 76,383 (803,360) (726,977) (544,146) Non-operating revenues(expenses): Interest on investments 50,813 430,577 481,390 488,387 Debt service (129,944) (129,944) (131,761) - Loss on disposition of fixed assets (2,895) Other 5,307 2,067 7,374 12,285 Total non-operating - revenues(expenses) 56,120 302,700 358,820 366,016 Net income(loss)before - extraordinary item 132,503 (500,660) (368,157) 854,403 Extraordinary gain on issuance of sewer - availability charge credits 167,300 Net income (loss) 132,503 (500,660) (368,157) (10,830) Credit arising from transfer of depreciation - on contributed capital 337,065 337,065 336,604 Retained earnings January 1 1,274,852 10,266,263 11,541,115 11,215,341 Retained earnings December 31 $1,407,355 $10,102,668 $11,510,023 $11,541,115 106 Exhibit F-3 CITY OF FRIDLEY. MINNESOTA ENTERPRISE FUNDS COMBINING STATEMENT OF CASH FLOWS _ Year Ended December 31. 1993 With Comparative Totals for Year Ended December 31, 1992 - Public Totals Liquor Utilities 1993 1992 Cash flows from operating activities: $76,383 ($803,360) ($726,977) ($544,146) Adjustments to reconcile operating income(loss) to net cash flows from operating activities: Depreciation 25,686 577,044 602,730 594,068 Changes in assets and liabilities: Decrease(increase) in receivables (167,607) (167,607) (137,116) - Decrease(increase) in due from other funds 1,312 1,312 (3,432) Decrease(increase) in inventories (3,292) 954 (2,338) 45,159 Decrease (increase) in prepaid items 6,625 (25,178) (18,553) (40,588) - Increase(decrease) in payables 4,062 266,193 270,255 90,407 Other non-operating revenue 5,307 2,067 7,374 12,285 Use of sewer availability charge credits 56,250 56,250 56,000 Vet cash flows from operating activities 114,771 (92,325) 22,446 72,637 Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (7,449) (663,552) (671,001) (498,186) Proceeds from sale of revenue bonds 620,000 Principal paid on revenue bonds (45,000) (45,000) (35,000) Interest and paying agent fees on revenue bonds (129,944) (129,944) (131,761) Net cash flows from capital and related financing -- activities (7,449) (838,496) (845,945) (44,947) Cash flows from investing activities: Purchase of investment securities (4,277,999) Proceeds from sale of investment securities 4,277,999 4,277,999 3,621,077 Interest on investments 50,813 ; 423,315 474,128 480,288 - Interest received from MWCC 7,262 7,262 8,099 Net cash flows from investing activities 50,813 4,708,576 4,759,389 (168,535) Jet increase(decrease)in cash and cash equivalents 158,135 3,777,755 3,935,890 (140,845) ..Cash and cash equivalents-January 1 858,923 1,295,716 2,154,639 2,295,484 .;ash and cash equivalents-December 31 $1,017,058 $5,073,471 $6,090,529 $2,154,639 Jon-cash investing. capital and financing activities: System assets of$554,900 were contributed by the Capital Projects Special - Assessment Fund to the Public Utility Enterprise Fund in 1993. 107 Exhibit F-4 CITY OF FRIDLEY. MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE BALANCE SHEET December 31, 1993 and 1992 1993 1992 Assets Current Assets: _ Cash and cash equivalents $1,017,058 $858,923 Inventories, at cost 268,304 265,012 Prepaid items 6,625 Total current assets 1,285,362 1,130,560 Property and equipment, at cost: _ Land 66,961 66,961 Buildings 178,897 178,897 Improvements other than building 86,759 86,759 _ Machinery and equipment 243,677 236,228 576,294 568,845 Less: accumulated depreciation (281,100) (255,414) Net property and equipment 295,194 313,431 Total assets $1,580,556 $1,443,991 Liabilities and Fund Equity Current Liabilities: _ Accounts payable $137,598 $138,690 Salaries payable 4,262 3,017 Due to other governments 31,341 27,432 _ Total current liabilities 173,201 169,139 Fund equity: _ Retained earnings-unreserved 1,407,355 1,274,852 Total liabilities and fund equity $1,580,556 $1,443,991 -- • 108 Exhibit F-5 CITY OF FRIDLEY. MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Years Ended December 31, 1993 and 1992 1993 1992 Sales and cost of sales: Sales $2,783,611 $2,848,224 Cost of sales 2,214,716 2,244,851 Gross profit 568,895 603,373 '- Operating expenses: Selling: Personal services 160,113 168,729 -' Supplies and other charges 59,839 38,175 Total selling expenses 219,952 206,904 Administration and overhead Personal services 128,060 143,684 Supplies and other charges 118,814 119,536 Depreciation 25,686 23,993 Total administration and overhead 272,560 287,213 Total operating expenses 492,512 494,117 Operating income(loss) 76,383 109,256 Non-operating revenues: Interest on investments 50,813 53,889 Loss on disposition of fixed assets (1,139) Other 5,307 216 Total non-operating revenues 56,120 52,966 Net income(loss) 132,503 162,222 Retained earnings January 1 1,274,852 1,112,630 Retained earnings December 31 $1,407,355 $1,274,852 109 Exhibit F-6 CITY OF FRIDLEY, MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years Ended December 31, 1993 and 1992 1993 1992 Cash flows from operating activities: Operating income $76,383 $109,256 Adjustments to reconcile operating income(loss)to net cash flows from operating activities: Depreciation 25,686 23,993 Changes in assets and liabilities: Decrease(increase)in inventories (3,292) 54,220 Decrease(increase) in prepaid items 6,625 17,226 Increases(decrease) in payables 4,062 26,263 Other non-operating revenue 5,307 216 Net cash flows from operating activities 114,771 231,174 Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (7,449) (17,329) Cash flows from investing activities: Interest on investments 50,813 53,889 Net increase(decrease)in cash and cash equivalents 158,135 267,734 Cash and cash equivalents-January 1 858,923 591,189 Cash and cash equivalents-December 31 $1,017,058 $858,923 110 - CITY OF FRIDLEY, MINNESOTA PUBLIC UTILITY ENTERPRISE FUND Exhibit F-7 - COMPARATIVE BALANCE SHEET December 31, 1993 and 1992 1993 1992 Assets Current assets: Cash&cash equivalents $4,647,868 $1,295,716 Investments 3,666,708 Receivables: Accounts 1,137,260 960,405 ,_ Taxes 2,707 2,935 Due from other funds 2,120 3,432 Due from other governments 20,492 19,874 - Inventories, at cost 9,467 10,421 Prepaid items 223,500 198,322 Total current assets 6,043;414 6,157,813 Restricted assets: - Cash and cash equivalents 425,603 Investments 611,291 - Total restricted assets 425,603 611,291 Long-term receivable- Metropolitan Waste Control Commission 213,540 279,428 - Property and equipment, at cost: Land 154,531 154,531 Buildings 1,529,236 1,523,661 - Improvements other than building 5,311,529 4,686,774 Machinery and equipment 2,242,884 2,252,849 Water and sewer lines 17,510,438 16,955,538 -- 26,748,618 25,573,353 Less: accumulated depreciation (8,052,982) (7,519,125) Net property and equipment 18,695,636 18,054,228 - Total assets $25,378,193 $25,102,760 Liabilities and Fund Equity - Current liabilities: Accounts payable $40,819 $47,064 Contracts payable 134,658 35,831 - Salaries payable 8,350 6,601 Due to other governments 408,481 242,931 Accrued interest payable 53,830 47,518 - Bonds payable-current 80,000 45,000 Total current liabilities 726,138 424,945 Long term liabilities: - Bonds payable 2,075,000 2,155,000 Total liabilities 2,801,138 2,579,945 Fund Equity: Contributed capital 12,474,387 12,256,552 Retained earnings: Reserved for capital outlay 2,058,000 2,499,895 Reserved for construction 425,603 611,291 Unreserved 7,619,065 7,155,077 Total Retained Earnings 10,102,668 10,266,263 Total fund equity 22,577,055 22,522,815 Total liabilities and fund equity $25,378,193 $25,102,760 111 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, 1993 and 1992 1993 1992 Operating Revenues: — Water sales and sewer rents $3,436,041 $3,045,473 Other 121,047 65,811 Total Operating Revenues 3,557,088 3,111,284 — Operating Expenses: Personal services 716,160 694,871 — Supplies and other charges- Disposal charges 2,395,871 1,877,692 Other 671,373 622,048 — Depreciation: Purchased assets 239,979 233,471 Contributed assets 337,065 336,604 — Total Operating Expenses 4,360,448 3,764,686 Operating loss (803,360) (653,402) — Non-Operating Revenues(Expenses): Interest on investments 430,577 434,498 — Debt service (129,944) (131,761) Loss disposition of fixed assets (1,756) Other 2,067 12,069 — Total non-operating revenues (expenses) 302,700 313,050 Net income(loss)before extraordinary item (500,660) (340,352) — Extraordinary gain on issuance of sewer availability Charge credits 167,300 Net income(loss) (500,660) (173,052) Credit arising from transfer of depreciation on contributed capital 337,065 336,604 Retained Earnings January 1 10,266,263 10,102,711 Retained Earnings December 31 $10,102,668 $10,266,263 112 Exhibit F-9 — CITY OF FRIDLEY. MINNESOTA PUBLIC UTILITY ENTERPRISE FUND COMPARATIVE STATEMENT OF CASH FLOWS — Years Ended December 31, 1993 and 1992 — 1993 1992 Cash flows from operating activities: — Operating Income(loss) ($803,360) ($653,402) Adjustment to reconcile operating income(loss)to net cash flows from operating activities: _ Depreciation 577,044 570,075 Changes in assets and liabilities: Decrease(increase) in receivables (167,607) (137,116) _ Decrease(increase)in due from other funds 1,312 (3,432) Decrease(increase)in inventories 954 (9,061) Decrease(increase) in prepaid items (25,178) (57,814) _ Increase(decrease)in payables 266,193 64,144 Other non-operating revenue 2,067 12,069 Use of sewer availability charge credits 56,250 56,000 Net cash flows from operating activities (92,325) (158,537) — Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (663,552) (480,857) Proceeds from sale of revenue bonds 620,000 -„ Principal paid on revenue bonds (45,000) (35,000) Interest and paying agent fees on revenue bonds (129,944) (131,761) Net cash flows from capital and related financing activities (838,496) (27,618) Cash flows from investing activities: Purchase of investment securities (4,277,999) Proceeds from sale of investment securities 4,277,999 3,621,077 Interest on investments 423,315 426,399 Interest received from MWCC 7,262 8,099 Net cash flows from investing activities 4,708,576 (222,424) Net increase(decrease) in cash and cash equivalents 3,777,755 (408,579) Cash and cash equivalents-January 1 1,295,716 1,704,295 Cash and cash equivalents-December 31 $5,073,471 $1,295,716 — Non-cash investing, capital and financing activities: System assets of$554,900 were contributed by the Capital Projects Special Assessment Fund to the Public Utility Enterprise Fund in 1993. 113 • INTERNAL SERVICE FUNDS Internal Service Funds are used to account for goods and services that arfupro are essential for t reimbursement or fee basis to departments or agencies within the City. These segregating costs for determining the total cost Tesef funds are accounted for a capttahmaintenance and services provided are properly utilized. measurement focus and use the accrual basis of accounting. Employee Benefits Fund This fund is used to account for the expenses associated with providing fringe benefits for the City of Fridley employees. Self Insurance Fund This fund is used to account for all revenues and expenditures associated with the $50,000 deductible in the City general liability policy. Exhibit G-1 _ CITY OF FRIDLEY. MINNESOTA INTERNAL SERVICE FUNDS COMBINING BALANCE SHEET _ December 31, 1993 With Comparative Totals for December 31, 1992 Employee Self Totals Benefits Insurance 1993 1992 Assets — Current assets: Cash and cash equivalents $978 $1,322,419 $1,323,397 $1,193,750 Investments 77,335 77,335 -- Accounts receivable 22 209 231 Due from other funds 1,139,618 205,553 1,345,171 1,485,383 Total assets $1,140,618 $1,605,516 $2,746,134 $2,679,133 Liabilities and Fund Equity Current liabilities: Accounts payable $265 $562 $827 $16,967 — Payroll deductions payable 56,988 56,988 60,028 Compensated absences payable 815,003 815,003 905,758 Total liabilities 872,256 562 872,818 982,753 Fund equity: Contributed capital 1,000,000 1,000,000 1,000,000 — Retained earnings- reserved 268,362 604,954 873,316 696,380 Total fund equity 268,362 1,604,954 1,873,316 1,696,380 Total liabilities and fund equity $1,140,618 $1,605,516 $2,746,134 $2,679,133 115 Exhibit G-2 CITY OF FRIDLEY, MINNESOTA - INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS - Year Ended December 31, 1993 With Comparative Totals for Year Ended December 31, 1992 Employee Self Totals - Benefits Insurance 1993 1992 Operating revenues: Charges for services $29,075 $ $29,075 $11,240 Insurance reimbursement 107,501 107,501 137,871 - Total operating revenues 29,075 107,501 136,576 149,111 - Operating expenses: Personal services 53,425 53,425 39,949 - Supplies and other charges 2,990 32,936 35,926 36,155 Total operating expenses 56,415 32,936 89,351 76,104 - Operating income(loss) (27,340) 74,565 47,225 73,007 Non operating revenues: - Interest on investments 116,097 113,614 229,711 213,163 Income before operating transfers 88,757 188,179 276,936 286,170 - Operating transfers out: General Fund (100,000) (100,000) (100,000) - Net income(loss) (11,243) 188,179 176,936 186,170 - Retained earnings January 1 279,605 416,775 696,380 510,210 Retained earnings December 31 $268,362 $604,954 $873,316 $696,380 - 116 Exhibit G-3 CITY OF FRIDLEY, MINNESOTA _ INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS Year Ended December 31, 1993 With Comparative Totals for Year Ended December 31, 1992 Employee Self Totals Benefits Insurance 1993 1992 Cash flows from operating activities: Operating income (loss) ($27,340) $74,565 $47,225 $73,007 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 105,958 34,254 140,212 1,083,274 Decrease(increase) in accounts receivable (22) (209) (231) 163 Decrease (increase)in prepaid items Increase (decrease) in accounts payable 80 (16,220) (16,140) 16,270 Increase (decrease) in accrued claims liability (75,000) -- Increase(decrease) in compensated absences payable (90,755) (90,755) (100,213) Increase (decrease) in payroll deductions payable (3,040) (3,040) (7,449) Net cash flows from operating activities (15,119) 92,390 77,271 990,052 Cash flows from non-capital financing activities: Operating transfers to General Fund (100,000) (100,000) (100,000) Net cash flows from non-capital financing activities (100,000) (100,000) (100,000) — Cash flows from investing activities: Purchase of investment securities (77,335) (77,335) Interest on investments 116,097 113,614 229,711 213,163 Net cash flows from investing activities 116,097 36,279 152,376 213,163 — Net increase(decrease)in cash and cash equivalents 978 128,669 129,647 1,103,215 Cash and cash equivalents-January 1 1,193,750 1,193,750 90,535 Cash and cash equivalents-December 31 $978 $1,322,419 $1,323,397 $1,193,750 117 Exhibit G-4 CITY OF FRIDLEY. MINNESOTA EMPLOYEE BENEFITS INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET — December 31, 1993 and 1992 1993 1992 Assets Cash and cash equivalents $978 $ _ Due from other funds 1,139,618 1,245,576 Accounts receivable 22 Total assets $1,140,618 $1,245,576 Liabilities and Fund Equity Current Liabilities: _ Accounts payable $265 $185 Compensated absences payable 815,003 905,758 Payroll deductions payable 56,988 60,028 — Total current liabilities 872,256 965,971 Fund equity: _ Retained earnings- Reserved for employee benefits 268,362 279,605 Total current liability and fund equity $1,140,618 $1,245,576 118 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, 1993 and 1992 1993 1992 Operating revenues: Charges for services $29,075 $11,240 Operating expenses: General government- Personal services 53,425 39,949 Supplies and other charges 2,990 3,851 Total operating expenses 56,415 43,800 Operating income(loss) (27,340) (32,560) Non-operating revenues: Interest on investments 116,097 104,231 Total non-operating revenues 116,097 104,231 Income before operating transfers 88,757 71,671 Operating transfers out: General Fund (100,000) (100,000) Net income(loss) (11,243) (28,329) Retained earnings January 1 279,605 307,934 Retained earnings December 31 $268,362 $279,605 • 119 Exhibit G-6 CITY OF FRIDLEY, MINNESOTA EMPLOYEE BENEFITS INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CASH FLOWS -- Years Ended December 31, 1993 and 1992 1993 1992 — Cash flows from operating activities: Operating loss ($27,340) ($32,560) — 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 105,958 135,643 Decrease(increase) in accounts receivable (22) 163 — Increase(decrease) in accounts payable 80 185 Increase(decrease)in compensated absences payable (90,755) (100,213) — Increase (decrease) in payroll deductions payable (3,040) (7,449) Net cash flows from operating activities (15,119) (4,231) Cash flows from non-capital financing activities: — Operating transfer to General Fund (100,000) (100,000) Cash flows from investing activities: — Interest on investments 116,097 104,231 Net increase(decrease) in cash and cash equivalents 978 0 — Cash and cash equivalents-January 1 Cash and cash equivalents-December 31 $978 $0 120 Exhibit G-7 CITY OF FRIDLEY, MINNESOTA SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31, 1993 and 1992 1993 1992 Assets Cash and cash equivalents $1,322,419 $1,193,750 Investments 77,335 Accounts receivable 209 Due from other funds 205,553 239,807 Total assets $1,605,516 $1,433,557 Liabilities and Fund Equity Current liabilities: Accounts payable $562 $16,782 Total current liabilities 562 16,782 Fund equity: Contributed capital 1,000,000 1,000,000 Retained earnings- Reserved for contingencies 604,954 416,775 Total fund equity 1,604,954 1,416,775 Total liabilities and fund equity $1,605,516 $1,433,557 • 121 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, 1993 and 1992 — 1993 1992 — Operating revenues: — Insurance reimbursement $107,501 $137,871 Total operating revenues 107,501 137,871 — Operating expenses: Supplies and other charges 32,936 32,304 — Total operating expenses 32,936 32,304 Operating income (loss) 74,565 (32,304) — Non-operating expenses: Interest on investments 113,614 108,932 — Net income(loss) 188,179 76,628 — Retained earnings January 1 416,775 202,276 Retained earnings December 31 $604,954 $416,775 122 Exhibit G-9 CITY OF FRIDLEY, MINNESOTA SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years Ended December 31, 1993 and 1992 1993 1992 Cash flows from operating activities: Operating income(loss) $74,565 $105,567 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 34,254 947,631 Decrease(increase) in accounts receivable (209) Increase (decrease) in accounts payable (16,220) 16,085 Increase(decrease)in accrued claims liability (75,000) Net cash flows from operating activities 92,390 994,283 Cash flows from investing activities: Purchase of investment securities (77,335) Interest on investments 113,614 108,932 Net cash flows from investing activities 36,279 108,932 Net increase (decrease) in cash and cash equivalents 128,669 1,103,215 Cash and cash equivalents-January 1 1,193,750 90,535 Cash and cash equivalents-December 31 $1,322,419 $1,193,750 123 TRUST AND AGENCY FUNDS Trust and Agency Funds are used to account for assets held by a government in a trustee or agent capacity for individuals, private organizations, other governments or other funds. Expendable Trust Fund The City of Fridley maintains only one Expendable Trust Fund that is used to defray the City administrative costs associated with the issuance of industrial revenue development bonds. Six Cities Watershed Agency Fund This fund was established to account for the collection of taxes received from the County on behalf of the Six Cities Watershed District. Hotel/Motel Agency Fund This fund was established to account for the collection of a three percent tax that has been imposed on all the hotels and motels in the north suburban area The collection process is administered by the City on behalf of the North Metro Convention and Tourism Bureau which will use the money to provide information to visitors and create an awareness of the facilities available in this area Deferred Compensation Agency Fund This fund accounts for deposits held in trust with the International City Managers Association (ICMA) on behalf of the City of Fridley employees. Employees make pretax contributions to this organization throughout their careers which are used as a retirement benefit. HRA Deferred Compensation Agency Fund This fund accounts for deposits held in trust with the International City Managers Association (ICMA) on behalf of the Housing and Redevelopment Authority employees. Employees make pretax contributions to this organization throughout their careers which are used as a retirement benefit. Exhibit H-1 CITY OF FRIDLEY. MINNESOTA — TRUST AND AGENCY FUNDS COMBINING BALANCE SHEET December 31. 1993 — With Comparative Totals for December 31, 1992 Expendable Agency Totals Trust Funds 1993 1992 Assets Investments $55,227 $8,002 $63,229 $54,783 Receivables: Accounts 2,701 2,701 2,361 Taxes- Unremitted 33 33 11 Delinquent 623 623 781 Other assets 4,520,377 4,520,377 4,067,826 Total assets $55,227 $4,531,736 $4,586,963 $4,125,762 Liabilities and Fund Balance Liabilities: Accounts payable $491 $ $491 $ _ Deposits payable 39,940 4,520,377 4,560,317 4,107,338 Due to other governments 11,359 11,359 8,430 Total liabilities 40,431 4,531,736 4,572,167 4,115,768 Fund balance: Unreserved - undesignated 14,796 14,796 9,994 — Total liabilities and fund balance $55,227 $4,531,736 $4,586,963 $4,125,762 126 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, 1993 and 1992 1993 1992 Revenues: Interest on investments $4,802 $4,320 Expenditures: _ Current: General government 2,562 Excess of revenues over expenditures 4,802 1,758 Other financing uses: Operating transfers out (10,393) Total other financing uses 0 (10,393) Increase(deficiency)of revenues over expenditures and other financing uses 4,802 (8,635) Fund balance,January 1 9,994 18,629 Fund balance, December 31 $14,796 $9,994 127 Exhibit H-3 CITY OF FRIDLEY. MINNESOTA ALL AGENCY FUNDS - COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES(Continued) Year Ended December 31, 1993 Balance Balance January 1 Additions Deletions December 31 SIX CITIES WATERSHED AGENCY FUND Assets Investments $3,275 $3,591 $1,231 $5,635 Taxes receivable: Unremitted 11 33 11 33 Delinquent 781 37 195 623 Total assets $4,067 $3,661 $1,437 $6,291 - Liabilities - Due to other governments $4,067 $3,500 $1,276 $6,291 Total liabilities $4,067 $3,500 $1,276 $6,291 HOTEL/MOTEL TAX AGENCY FUND Assets Investments $2,002 $37,557 $37,192 $2,367 -Accounts receivable 2,361 2,701 2,361 2,701 Total assets $4,363 $40,258 $39,553 $5,068 - Liabilities Due to other governments $4,363 $40,258 $39,553 $5,068 Total liabilities $4,363 $40,258 $39,553 $5,068 128 Exhibit H-3 Continued CITY OF FRIDLEY, MINNESOTA ALL AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES(Continued) Year Ended December 31, 1993 Balance Balance January 1 Additions Deletions December 31 DEFERRED COMPENSATION AGENCY FUND Assets Deferred compensation -at market $4,067,826 $685,694 $235,035 $4,518,485 Total assets $4,067,826 $685,694 $235,035 $4,518,485 Liabilities Deposits payable $4,067,826 $685,694 $235,035 $4,518,485 Total liabilities $4,067,826 $685,694 $235,035 $4,518,485 HRA DEFERRED COMPENSATION AGENCY FUND Assets _ Deferred compensation-at market $1,892 $1,892 Total assets $0 $1,892 $0 $1,892 Liabilities Deposits payable $1,892 $1,892 Total liabilities $0 $1,892 $0 $1,892 129 Exhibit H-3 Continued — CITY OF FRIDLEY, MINNESOTA ALL AGENCY FUNDS — COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES(Continued) Year Ended December 31, 1993 Balance Balance January 1 Additions Deletions December 31 TOTALS-All AGENCY FUNDS Assess — Investments $5,277 $41,148 $38,423 $8,002 Receivables: — Accounts 2,361 2,701 2,361 2,701 Taxes- Unremitted 11 33 11 33 Delinquent 781 37 195 623 Other assets 4,067,826 687,586 235,035 4,520,377 Total assets $4,076,256 $731,505 $276,025 $4,531,736 Liabilities Deposits payable $4,067,826 $687,586 $235,035 $4,520,377 — Due to other governments 8,430 43,758 40,829 11,359 Total liabilities $4,076,256 $731,344 $275,864 $4,531,736 — • 130 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 1-1 CITY OF FRIDLEY, MINNESOTA COMPARATIVE STATEMENT OF GENERAL FIXED ASSETS December 31, 1993 and 1992 1993 1992 General fixed assets: Land $2,269,670 $2,105,675 Building 4,773,786 4,767,496 Improvements other than building 18,322,067 15,918,080 Machinery and equipment 5,322,556 5,107,323 Construction in progress 1,307,914 1,050,767 Total general fixed assets $31,995,993 $28,949,341 Investment in general fixed assets from: General obligation bonds $856,597 $856,597 Federal and state aid 1,682,960 1,682,960 General fund revenues 10,694,521 10,477,735 Special revenue fund revenues 1,558,473 1,557,662 Special assessments 13,242,744 10,890,116 Private gifts 770,888 770,888 Other sources 3,189,810 2,713,383 Total investment in general fixed assets $31,995,993 $28,949,341 131 Exhibit 1-2 CITY OF FRIDLEY, MINNESOTA SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS- BY FUNCTION AND ACTIVITY -" Year Ended December 31, 1993 General Fixed General Fixed Assets Assets 1/1/93 Additions Deletions 12/31/93 - Function and Activity - General government City manager $30,434 $4,352 $10,498 $24,288 Cable TV 39,864 2,167 42,031 - Accounting 44,240 44,240 Management information systems 547,262 23,224 570,486 Assessing 4,725 4,725 - Elections 91,992 2,347 94,339 City clerk/records 3,185 3,185 Planning 146,851 146,851 - Municipal center 3,724,338 3,724,338 Total general government 4,632,891 32,090 10,498 4,654,483 Public safety Public protection 683,436 83,500 51,121 715,815 Fire protection 1,483,971 71,119 1,555,090 - Inspectional services 10,282 10,282 Civil defense 146,933 146,933 Total public safety 2,324,622 154,619 51,121 2,428,120 - Public works Engineering 130,633 17,447 148,080 - Street improvements 11,847,925 2,309,834 14,157,759 Traffic signal 172,298 47,117 219,415 City garage 2,006,970 96,658 36,022 2,067,606 Parks 5,417,897 201,353 2,458 5,616,792 Total public works 19,575,723 2,672,409 38,480 22,209,652 Recreation/Naturalist - Recreation 146,327 20,662 166,989 Naturalist 1,219,011 9,824 1,228,835 - Total recreation/naturalist 1,365,338 30,486 0 1,395,824 Construction in progress 1,050,767 1,326,895 1,069,748 1,307,914 - Total general fixed assets $28,949,341 $4,216,499 $1,169,847 $31,995,993 132 Exhibit 1-3 CITY OF FRIDLEY, MINNESOTA SCHEDULE OF GENERAL FIXED ASSETS - BY FUNCTION AND ACTIVITY December 31, 1993 Improvements Machinery Other than and Total Land Buildings Buildings Equipment Function and Activity - General government City manager $24,288 $ $ $ $24,288 Cable TV 42,031 42,031 - Accounting 44,240 44,240 Management information systems 570,486 5,990 564,496 Assessing 4,725 4,725 - Elections 94,339 94,339 City clerk/records 3,185 3,185 Planning 146,851 124,804 22,047 - Municipal center 3,724,338 52,496 2,849,206 42,961 779,675 Total general government 4,654,483 177,300 2,849,206 48,951 1,579,026 - Public safety Public protection 715,815 166,871 548,944 Fire protection 1,555,090 58,656 504,212 104,634 887,588 - Inspectional services 10,282 10,282 Civil defense 146,933 110,527 36,406 Total public safety 2,428,120 58,656 504,212 382,032 1,483,220 Public works Engineering 148,080 148,080 Street improvements 14,157,759 92,711 14,065,048 Traffic signal 219,415 214,537 4,878 City garage 2,067,606 142,940 386,266 216,312 1,322,088 - Parks 5,616,792 1,492,005 582,786 2,962,009 579,992 Total public works 22,209,652 1,727,656 969,052 17,457,906 2,055,038 - Recreation/Naturalist Recreation 166,989 8,096 158,893 Naturalist 1,228,835 306,058 451,316 425,082 46,379 Total recreation/naturalist 1,395,824 306,058 451,316 433,178 205,272 Total general fixed assets - allocated to functions $30,688,079 $2,269,670 $4,773,786 $18,322,067 $5,322,556 Construction in progress 1,307,914 Total fixed assets $31,995,993 133 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, 1993 and 1992 1993 1992 Amount available and to be provided for the payment of general long-term debt Amount available in Debt Service Funds $12,838,703 $11,852,455 Amount to be provided by future taxes 6,637,839 8,552,545 Total available and to be provided $19,476,542 $20,405,000 General long-term debt payable General long-term debt payable: General obligation special assessment improvement bonds $3,575,000 $4,215,000 General obligation tax increment refunding bonds 9,485,000 9,485,000 General obligation temporary tax increment bonds 4,030,000 4,030,000 Tax increment revenue refunding bonds 2,255,000 2,540,000 Construction loan payable 131,542 135,000 Total general long-term debt payable $19,476,542 $20,405,000 135 SUPPLEMENTAL SECTION TAUTGES, REDPATH& CO., LTD. CERTIFIED PUBLIC ACCOUNTANTS independent Auditor's Report on Compliance With Specific Requirements Applicable to Nonmajor Federal financial Assistance Program Transactions To the Honorable Mayor and Members of the City Council City of Fridley,Minnesota We have audited the general-purpose financial statements of the City of Fridley,Minnesota as of and for the year ended December 31, 1993, and have issued our report thereon dated June 14, 1994. -- In connection with our audit of the general-purpose financial statements of the City of Fridley, Minnesota,and with our consideration of the City of Fridley,Minnesota's control structure used to administer federal financial assistance programs,as required by Office of Management and Budget Circular A-128,Audits of State and Local Governments,we selected certain transactions applicable to certain nonmajor federal fmancial assistance programs for the year ended December 31, 1993. As required by OMB Circular A-128,we have performed auditing procedures to test compliance with the requirements governing the types of services,eligibility, reporting and special tests and provisions that are applicable to those transactions. Our procedures were substantially less in scope than an audit,the objective of which is the expression of an opinion on the City of Fridley, Minnesota's compliance with these requirements. Accordingly, we do not express such an opinion. With respect to the items tested,the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the preceding paragraph. With respect to items not tested,nothing came to our attention that caused us to believe that the City of Fridley,Minnesota had not complied,in all material respects, with those requirements. — This report is intended for the information of the City of Fridley, Minnesota and the Federal Cognizant Audit Agency. However,this report is a matter of public record and its distribution is not limited. 7:444i bra TAUTGES,REDPATH &CO.,LTD. Certified Public Accountants June 14, 1994 137 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426-7000 • FAX/426-5004 • Member of HLB International TA UTGES, REDPA TH & CO., LTD. CERTIFIED PUBLIC ACCOUNTANTS Independent Auditor's Report on the Internal Control Structure in Accordance with Government Auditing Standards To the Honorable Mayor and Members of the City Council City of Fridley,Minnesota We have audited the general-purpose financial statements of the City of Fridley,Minnesota,as of and for the year ended December 31, 1993, and have issued our report thereon dated June 14, 1994. 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 financial statements are free of material misstatement. In planning and performing our audit of the general-purpose financial statements of the City of Fridley, Minnesota, for the year ended December 31, 1993,we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general-purpose financial statements and not to provide assurance on the internal control structure. The management of the City of Fridley, Minnesota,is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility,estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide _ management with reasonable,but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition,and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general-purpose _ financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure,errors or irregularities may nevertheless occur and not be detected. Also,projections of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. For the purpose of this report,we have classified the significant internal control structure policies and procedures in the following categories; receivables,cash receipts,billings,cash disbursements, accounts payable and payroll. For all of the internal control structure categories listed above,we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation,and we assessed control risk. 139 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426-7000 • FAX/426-5004 • Member of HLB International Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under standards established by the '- American Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that errors and irregularities in amounts that would be material in relation to the general-purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operations that we consider to be material weaknesses as defined above. This report is intended for the information of the City of Fridley,Minnesota and the Federal Cognizant Audit Agency. This restriction is not intended to limit the distribution of this report, which is a matter of public record. 7;40410, Zoefoulic. 4,Z)7. TAUTGES, REDPATH&CO.,LTD. Certified Public Accountants June 14, 1994 141 TA UTGES, REDPA TH & CO., LTD. CERTIFIED PUBLIC ACCOUNTANTS Independent Auditor's Report on the Internal Control Structure Used in Administering Federal Financial Assistance Programs To the Honorable Mayor and Members of the City Council City of Fridley,Minnesota We have audited the general-purpose financial statements of the City of Fridley,Minnesota,as of and for the year ended December 31, 1993, and have issued our report thereon dated June 14, 1994. We conducted our audits in accordance with generally accepted auditing standards; Government Auditing Standards,issued by the Comptroller General of the United States; and Office of Management and Budget Circular A-128,Audits of State and Local Governments. Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general-purpose financial statements are free of material misstatement and about whether the City of Fridley,Minnesota,complied with laws and regulations, noncompliance with which would be material to federal financial assistance programs. In planning and performing our audits for the year ended December 31, 1993,we considered the internal control structure of the City of Fridley,Minnesota in order to determine our auditing procedures for the purpose of expressing our opinions on the general-purpose financial statements of the City of Fridley,Minnesota and on the compliance of the City of Fridley,Minnesota with requirements applicable to federal financial assistance programs,and to report on the internal control structure in accordance with OMB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to federal financial assistance programs. We have addressed internal control structure _ policies and procedures relevant to our audit of the general-purpose financial statements in a separate report dated June 14, 1994. The management of the City of Fridley,Minnesota is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility,estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable,but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition,that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general-purpose financial statements in accordance with generally accepted accounting principles,and that federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors,irregularities,or instances of noncompliance may nevertheless occur and not be detected. Also,projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. 143 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426-7000 • FAX/426-5004 • Member of HLB International For the purpose of this report,we have classified the significant internal control structure policies and procedures used in administering federal financial assistance programs in the following — categories: General Requirements: Specific Requirements: — Political Activity Types of Services Allowed or Unallowed Civil Rights Eligibility Cash Management Reporting Federal Financial Reports Special Tests and Provisions — Allowable Costs/Cost Principles Administrative Requirements Subrecipients For all of the internal control structure categories listed above,we obtained an understanding of the design of relevant policies and procedures and determined whether they have been placed in operation,and we assessed control risk. During the year ended December 31, 1993,the City of Fridley,Minnesota had no major federal financial assistance programs and expended 80.43%of its total federal financial assistance under — the Community Development Block Grant and Housing Assistance Payments Programs for Low Income Families. — We performed tests of controls,as required by OMB Circular A-128,to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with specific requirements,general _ requirements, and requirements governing claims for advances and reimbursements and amounts claimed or used for matching that are applicable to the aforementioned nonmajor programs which are identified in the accompanying Schedule of Federal Financial Assistance. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure — policies and procedures. Accordingly, we do not express such an opinion. Our consideration of the internal control structure policies and procedures used in administering _ federal financial assistance would not necessarily disclose all matters in the internal control structure that might constitute material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the — internal control structure and its operations that we consider to be material weaknesses as defined above. _ This report is intended for the information of the City of Fridley, Minnesota and the Federal Cognizant Audit Agency. This restriction is not intended to limit the distribution of this report, which is a matter of public record. — � le 4. . TAUTGES, REDPATH& CO.,LTD. — Certified Public Accountants June 14, 1994 145 TAUTGES, REDPATH & CO., LTD. CERTIFIED PUBLIC ACCOUNTANTS Independent Auditor's Report on Compliance With General Requirements Applicable to Federal Financial Assistance Programs To the Honorable Mayor and Members of the City Council City of Fridley,Minnesota We have audited the general-purpose fmancial statements of the City of Fridley,Minnesota,as of and for the year ended December 31, 1993, and have issued our report thereon dated June 14, 1994. We have applied procedures to test the City of Fridley,Minnesota's compliance with the following requirements applicable to its federal financial assistance programs,which are identified in the Schedule of Federal Financial Assistance,for the year ended December 31, 1993. The general requirements tested were: Political Activity Allowable Costs/Cost Principles Civil Rights Administrative Requirements Cash Management Subrecipients Federal Financial Reports Our procedures were limited to the applicable procedures described in the Office of Management and Budget's Compliance Supplement for Single Audits of State and Local Governments. Our procedures were substantially less in scope than an audit,the objective of which is the expression of an opinion on the City of Fridley,Minnesota's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion. With respect to the items tested,the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that the City of Fridley, Minnesota had not complied,in all material respects,with those requirements. This report is intended for the information of the City of Fridley,Minnesota and the Federal Cognizant Audit Agency. However,this report is a matter of public record and its distribution is not limited. 4. . -- TAUTGES, REDPATH& CO.,LTD. Certified Public Accountants June 14, 1994 147 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426-7000 • FAX/426-5004 • Member of HLB International TAUTGES, REDPATH & CO., LTD. CERTIFIED PUBLIC ACCOUNTANTS Independent Auditor's Report on Supplementary _ Schedule of Federal Financial Assistance To the Honorable Mayor and Members of the City Council City of Fridley,Minnesota We have audited the general-purpose financial statements of the City of Fridley,Minnesota,as of and for the year ended December 31, 1993, and have issued our report thereon dated June 14, 1994. These general-purpose financial statements are the responsibility of the City of Fridley, Minnesota's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general-purpose financial statements are free of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the general-purpose financial statements. An audit also includes assessing the accounting principles used and — significant estimates made by management,as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Our audit was made for the purpose of forming an opinion on the general-purpose financial statements of the City of Fridley,Minnesota,taken as a whole. The accompanying schedule of federal financial assistance is presented for purposes of additional analysis and is not a required _ part of the general-purpose financial statements. The information in that schedule 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 financial statements taken as a whole. r� i C • i#7. TAUTGES, REDPATH& CO.,LTD. Certified Public Accountants _ June 14, 1994 149 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426-7000 • FAX/426-5004 • Member of HLB International TAUTGES, REDPATH& CO., LTD. CERTIFIED PUBLIC ACCOUNTANTS Compliance Report Based on an Audit of General Purpose Financial Statements Performed in Accordance with Government Auditing Standards To the Honorable Mayor and Members of the City Council City of Fridley,Minnesota We have audited the general-purpose financial statements of the City of Fridley,Minnesota,as of and for the year ended December 31, 1993 and have issued our report thereon dated June 14, 1994. We conducted our audit in accordance with generally accepted auditing standards;Government Auditing Standards,issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general-purpose financial statements are free of material misstatement. Compliance with laws,regulations,contracts,and grants applicable to the City of Fridley, Minnesota,is the responsibility of the City of Fridley, Minnesota's management. As part of obtaining reasonable assurance about whether the general-purpose financial statements are free of material misstatement,we performed tests of the City of Fridley,Minnesota's compliance with certain provisions of laws,regulations,contracts,and grants. However, the objective of our audit of the general-purpose financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion. The results of our tests indicated that, with respect to the items tested,the City of Fridley, Minnesota complied,in all material respects,with the provisions referred to in the preceding paragraph. With respect to items not tested,nothing came to our attention that caused us to believe that the City of Fridley,Minnesota had not complied,in all material respects,with those provisions. This report is intended solely for the information of the City of Fridley,Minnesota and the Federal Cognizant Audit Agency. This restriction is not inteded to limit the distribution of this report, which is a matter of public record. Respectfully submitted, - 7— ,e „ /1 de. k* TAUTGES, REDPATH&CO., LTD. Certified Public Accountants June 14, 1994 151 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426-7000 • FAX/426-5004 • Member of HLB International Exhibit K-1 CITY OF FRIDLEY, MINNESOTA SCHEDULE OF FEDERAL GRANT INFORMATION For The Year Ended December 31, 1993 Accrued Catalog# Accrued (Deferred) Federal Funding Source/ Federal Revenue at Revenue at Pass Through Agency/ Domestic January 1, Revenue December 31 Program Title Assistance 1993 Recognized Expenditures 1993 — U.S. Department of Housing and Urban Development: Anoka County: Community Development Block Grant- Entitlement Grant 14.219 $10,109 $30,298 $30,298 $13,885 — Metropolitan Council Housing and Redevelopment Authority: Housing Assistance Payments Program — for Low Income Families 14.156 5,673 37,993 37,993 8,429 Total Department of Housing and Urban Development 15,782 68,291 68,291 22,314 U.S. Department of Health and Human Services: — Greater Minneapolis Council of Churches: Special Programs for the Aging-Title III, Part C - Nutrition Services 13.635 416 8,188 8,188 713 Federal Emergency Management Association: — Minnesota Department of Public Safety: Civil Defense 83.516 8,424 8,424 1,059 — Total Federal Assistance $16,198 $84,903 $84,903 $24,086 153 Exhibit K-2 CITY OF FRIDLEY, MINNESOTA SCHEDULE OF ASSESSED VALUATION AND LONG-TERM DEBT — FOR THE TAX INCREMENT FINANCING DISTRICT DECEMBER 31, 1993 Redevelopment District Original Tax Capacity $2,060,387 Current Tax Capacity 4,847,079 Captured Tax Capacity- retained by the Authority 2,811,888 Bonds Issues: General Obligation Tax — Increment Bonds of 1981 $2,200,000 General Obligation Tax Increment Bonds of 1982 625,000 General Obligation Tax -' Increment Bonds of 1983 600,000 Tax Increment Revenue — Refunding Bonds of 1985 4,070,000 General Obligation Tax Increment Redevelopment — Bonds of 1985 11,550,000 General Obligation Tax Increment Refunding — Bonds of 1986 10,045,000 General Obligation Tax Increment Refunding Bonds of 1990 9,485,000 General Obligation Temporary Tax Increment Bonds of 1992, — Series 1992C 4,030,000 Total bonds issued 42,605,000 Amounts Redeemed: Paid (3,555,000) Bonds defeased-prior (23,280,000) — Total amount redeemed (26,835,000) Outstanding bonds at December 31, 1993 $15,770,000 _, — 154 Exhibit K-3 CITY OF FRIDLEY. MINNESOTA SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS — FOR THE TAX INCREMENT FINANCING DISTRICT INCEPTION TO DECEMBER 31. 1993 Current Year Prior Years Total Sources of Funds: Proceeds of bond sale $44,226,128 $44,226,128 Tax increments received 3,164,395 15,646,001 18,810,396 — Special assessments 103,057 184,650 287,707 Interest on invested funds 504,952 5,104,910 5,609,862 Real estate sales 536,334 536,334 -- Rental 70,164 550,120 620,284 Home ownership revenue 10,125 10,125 Other 4,705 307,234 311,939 Total sources of funds 3,847,273 66,565,502 70,412,775 Uses of Funds: — Land acquisition 271,193 15,536,646 15,807,839 Building acquisition 68,469 1,193,971 1,262,440 Site improvements or — preparation costs 18,503 3,121,512 3,140,015 Installation of public utilities and improvements 1,096,775 1,096,775 — Bond payments Principal 285,000 14,200,000 14,485,000 Interest and fiscal charges 1,011,845 7,748,664 8,760,509 — Payment to refunded bond escrow agent 9,257,980 9,257,980 Refund to school districts 343,987 1,155,118 1,499,105 Refund of tax increment overpayment 94,897 94,897 — Administrative costs 344,661 3,580,593 3,925,254 Other 4,836 719,252 724,088 Total uses of funds 2,348,494 57,705,408 60,053,902 District Balance $1,498,779 $8,860,094 $10,358,873 155 STATISTICAL SECTION Table 1 CITY OF FRIDLEY, MINNESOTA GENERAL GOVERNMENT EXPENDITURES BY FUNCTION (11 _ LAST TEN FISCAL YEARS Fiscal General Public Municipal Public Community Recreation, Debt Year Government Safety Center Works Development(2) Naturalist Service Total 1984 $850,963 $2,201,155 $149,332 $2,054,223 $ $442,917 $835,729 $6,534,319 1985 985,091 2,270,691 162,220 2,212,406 535,801 768,547 6,934,756 1986 1,877,676 2,576,847 180,839 1,886,888 535,430 1,515,823 8,573,503 — 1987 1,927,147 2,707,681 160,222 1,992,949 530,066 2,248,809 9,566,874 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 Notes — (1) Includes General, Special Revenue, Capital Projects and Debt Service Funds and excludes capital outlay. — (2) Prior to 1991, Community Development was included with Public Works. 157 Table 2 CITY OF FRIDLEY GENERAL REVENUE BY SOURCE(11 LAST TEN FISCAL YEARS — — General Property Taxes& Intergovern- — Fiscal Special Licenses mental Charges For Miscellaneous Year Assessments &Permits Revenue Services Revenue Total 1984 $4,069,579 $411,054 $3,570,422 $145,394 $2,247,486 $10,443,935 1985 4,269,937 422,606 3,402,703 153,483 2,506,575 10,755,304 1986 4,885,669 358,962 3,652,179 157,829 3,571,207 12,625,846 — 1987 4,767,980 405,583 3,302,438 164,617 3,086,280 11,726,898 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 16,146,705 — 1993 7,521,395 410,135 4,417,835 928,736 3,619,903 16,898,004 Note (1) Includes General, Special Revenue, Capital Projects and Debt Service Funds. 158 Table 3 CITY OF FRIDLEY. MINNESOTA CERTIFIED PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Ratio Current Percent Collection of Total Outstanding Fiscal Certified Tax of Levy of Prior Total Collections Delinquent Year Tax levy Collections(1X2) Collected Year's Taxes Collections to Tax Levy Taxes 1984 $3,152,952 $3,049,773 96.73% $45,490 $3,095,263 .9817:1 $132,652 1985 3,178,325 3,072,588 96.67% 76,894 3,149,482 .9909:1 150,983 1986 3,232,877 3,152,249 97.51% 44,094 3,196,343 .9887:1 180,738 1987 3,406,825 3,253,858 95.51% 49,299 3,303,157 .9696:1 284,407 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 (3) Notes (1) Includes Homestead Credit. (2) Excludes collections from properties pledged to tax increment. (3) Taxes were adjusted$84,007 by Anoka County due to abatements and — court ordered settlements. See Footnote 1.F.2. 159 CITY OF FRIDLEY, MINNESOTA ESTIMATED MARKET VALUE AND TAXABLE VALUE OF ALL PROPERTY LAST TEN FISCAL YEARS Fiscal Year Payable 1984 1985 1986 1987 Assessment Year 1983 1984 1985 1986 "" Population, fiscal year 29,750 29,440 29,423 29,310 Real Property: ._ Estimated market value $802,180,000 $807,910,500 $839,392,000 $879,498,600 Taxable value- — Homestead $94,343,673 $91,923,166 $91,343,841 $94,010,922 Excess and non-homestead 130,295,079 132,234,317 143,450,918 153,262,018 Less fiscal disparities contribution (27,102,595) (29,835,444) (29,730,694) (34,112,779) — Less tax increment value (2,765,895) (5,458,497) (9,032,222) (11,348,839) Taxable value $194,770,262 $188,863,542 $196,031,843 $201,811,322 Personal property: Estimated market value $21,263,600 $21,534,300 $26,208,700 $26,531,000 Taxable value $9,143,348 $9,259,749 $11,245,936 $11,393,525 Totals: Estimated market value $823,443,600 $829,444,800 $865,600,700 $906,029,600 — Taxable value $203,913,610 $198,123,291 $207,277,779 $213,204,847 Per market value ratios Taxable value .248:1 .239:1 .239:1 .235:1 Per capita valuations Estimated market value $27,679 $28,174 $29,419 $30,912 Taxable value $6,854 $6,730 $7,045 $7,274 Real property — Taxable value - Fiscal disparities distribution $15,369,625 $18,142,244 $18,296,235 $20,639,055 Notes (1) The Minnesota Legislature enacted legislation which changed the method of — computing property taxes in 1988, 1989 and 1990. Those changes have been reflected in the computation of the taxable value for taxes payable in 1989 thru 1993. (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, 1992 upon which the 1993 levy was based was$19,942,283. 160 Table 4 1988 1989 1990 1991 1992 1993 - 1987 1988(1) 1989(1) 1990(1) 1991 (1) 1992(1) 29,336 29,250 28,335 28,313 28,369 28,287 $907,274,900 $941,136,600 $998,231,500 $1,002,812,900 $1,057,532,000 $1,064,099,200 $94,216,387 $11,864,707 $6,858,848 $7,009,982 $6,763,333 $6,980,161 152,658,373 19,425,676 19,728,534 20,147,442 20,555,478 19,609,068 (37,235,245) (4,351,931) (4,435,055) (4,853,513) (4,684,322) (5,274,175) (14,921,389) (2,524,911) (2,368,717) (2,840,385) (3,073,122) (2,536,327) $194,718,126 $24,413,541 $19,783,610 $19,463,526 $19,561,367 $18,778,727 $26,731,000 $26,452,800 $27,116,700 $27,606,700 $22,917,200 $23,184,800 $11,479,525 $1,385,766 $1,369,388 $1,115,388 $1,087,658 $1,088,969 _ $934,005,900 $967,589,400 $1,025,348,200 $1,030,419,600 $1,080,449,200 $1,087,284,000 $206,197,651 $25,799,307 $21,152,998 $20,578,914 $20,649,025 $19,867,696 .221:1 .027:1 .021:1 .020:1 .019:1 .018:1 $31,838 $33,079 $36,187 $36,393 $38,086 $38,438 $7,029 $882 $747 $727 $728 $702 $23,382,622 $3,428,008 $3,817,118 $4,079,539 $3,753,494 $3,463,663 161 CITY OF FRIDLEY. MINNESOTA SIGNIFICANT MINNESOTA TAX POLICIES DECEMBER 31. 1993 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 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 1993 Class Rates Residential Homestead First $72,000 1.00% _ Over $72,000 2.00 Commercial/Industrial — First $100,000 3.00 Over $100,000 4.70 Rentals Apartments: 4+ units 3.40 Less than 4 units 2.50 Title II, MFHA, Sect. 8 2.30 Property Tax Refund. Residential property tax credits are gauged by percentages of the net property — tax to household income: to the extent a homeowners income (1.2% for incomes below $1,000, up to 4% for incomes of $60,000) homeowners may receive State refunds up to $400. 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 $80. The refund is equal to 75 — percent of the increase over 12%. The maximum refund is $1,500. 162 CITY OF FRIDLEY, MINNESOTA PROPERTY TAX RATES AND CALCULATED TAX LEVIES ALL OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS Property Tax Rates(1) -" School School School School Fiscal District District District District Year City No. 11 No. 13 No. 14 No. 16(2) County - 1984 14.340 55.225 56.227 60.332 63.739 28.363 1985 14.894 52.830 50.487 59.675 60.914 27.017 1986 14.330 55.740 53.797 60.919 63.878 28.738 1987 14.630 54.926 63.234 57.087 60.989 29.414 1988 15.058 62.181 60.733 67.454 70.880 30.766 1989 12.544% 51.384% 51.364% 55.193% 53.212% 27.425% - 1990 15.010% 47.893% 41.329% 43.158% 43.334% 28.846% 1991 15.854% 51.779% 53.249% 49.727% 49.867% 31.400% 1992 15.474% 56.525% 61.847% 58.025% 49.798% 32.990% - 1993 15.390% 63.717% 68.142% 61.406% 58.922% 32.779% Certified -' Levies Calculated Tax Levies School School School School Fiscal District District District District Year City No. 11 No. 13 No. 14 No. 16(2) County 1984 3,152,952 563,791 2,960,066 6,228,287 3,310,710 5,728,438 1985 3,163,427 536,388 2,650,406 6,152,690 3,122,134 5,825,992 1986 3,232,877 576,032 2,894,115 6,402,200 3,555,419 6,451,056 1987 3,406,825 585,299 3,522,818 6,298,305 3,500,364 6,864,334 1988 3,440,107 647,200 3,599,278 7,437,847 3,817,013 7,031,655 - 1989 3,652,452 708,533 3,692,407 7,836,416 3,448,538 7,939,936 1990 4,509,208 566,098 2,930,508 5,953,244 3,097,572 9,883,766 1991 4,751,465 586,640 3,353,377 6,279,991 3,477,136 9,717,317 1992 4,751,465 627,737 3,778,068 6,979,677 3,813,412 9,308,025 1993 4,626,465 707,974 4,017,763 7,284,693 4,232,967 9,620,566 Notes (1) 1984-1988 tax rates are expressed as mills; 1989-1993 rate is expressed as a tax capacity rate. '" (2) Vocational/Technical District#916 included in District No. 16. - (3) Six Cities Watershed District included with School District No. 11 beginning in 1985. (4) Rice Creek Watershed District included with School District No. 13,14 and 16. 164 Table 5 Totals Total School School School School - Special District District District District Districts No. 11 (3) No. 13(4) No. 14(4) No. 16(2),(4) - 4.916 100.336 101.571 105.676 109.083 5.229 99.480 97.257 106.445 107.684 4.956 103.502 101.673 108.795 111.754 5.761 104.299 112.889 106.742 110.644 5.531 113.334 112.022 118.743 122.169 4.679% 95.813% 95.908% 99.737% 97.756% _ 4.399% 95.851% 89.554% 91.383% 92.498% 4.767% 103.420% 105.226% 101.704% 101.844% 5.119% 109.711% 115.388% 111.566% 103.339% 5.668% 116.910% 122.707% 115.221% 114.723% Net Total Total Yearly Contribution Tax Total Special All Local Percentage To Metro Increment Tax Districts Tax Levies Change Tax Pool Districts Levies 1,044,451 22,988,695 7.45% 1,209,389 311,160 24,509,244 1,073,929 22,524,966 (2.02)% 1,343,511 573,946 24,442,423 1,080,737 24,192,436 7.40% 1,298,052 867,372 26,357,860 1,269,417 25,447,362 5.19% 1,608,958 993,610 28,049,930 1,246,009 27,219,109 6.96% 1,799,575 1,530,798 30,549,482 _ 1,321,824 28,600,106 5.07% 91,973 2,357,865 31,049,944 1,442,262 28,382,658 (.08)% 92,659 2,510,294 30,985,611 1,426,691 29,592,617 4.26% 122,535 2,662,381 32,377,533 1,497,874 30,756,258 3.93% 143,841 3,146,849 34,046,948 1,564,535 32,054,963 4.22% 278,637 3,165,008 35,498,608 165 Table 6 CITY OF FRIDLEY. MINNESOTA SPECIAL ASSESSMENT LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS 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 1984 $811,722 $710,323 87.51% $144,614 $854,937 105.32% $371,951 1985 893,674 802,910 89.84% 133,182 936,092 104.75% 344,254 _ 1986 765,737 730,149 95.35% 143,891 874,040 114.14% 176,879 1987 917,525 845,716 92.17% 30,524 876,240 95.50% 221,994 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% 91,010 166 • CITY OF FRIDLEY. MINNESOTA HISTORY OF CERTIFIED TAX LEVIES AND TAX RATES LAST TEN FISCAL YEARS 1984 1985 1986 1987 Certified tax levies General Fund $3,071,882 $3,083,270 $3,141,859 $3,311,826 "' General Debt Service Funds 36,300 35,175 35,628 Capital Improvement Fund 44,770 44,982 45,521 85,542 Subtotal 3,152,952 3,163,427 3,223,008 3,397,368 — Agency Fund 14,898 9,869 9,457 — Total $3,152,952 $3,178,325 $3,232,877 $3,406,825 Mill rate(1984-1988); Tax Capacity Rate(1989-1993) -' General Fund 13.970 14.283 13.895 14.188 General Debt Service Funds 0.166 0.163 0.158 Capital Improvement Fund 0.204 0.208 0.203 0.367 -' Subtotal 14.340 14.654 14.256 14.555 Agency Fund 0.240 0.074 0.075 — Total 14.340 14.894 14.330 14.630 168 Table 7 - 1988 1989 1990 1991 1992 1993 $3,345,190 $3,556,166 $4,421,519 $4,660,276 $4,660,276 $4,535,276 86,320 87,689 87,689 87,689 87,689 87,689 3,431,510 3,643,855 4,509,208 4,747,965 4,747,965 4,622,965 8,597 8,597 3,439 3,500 3,500 3,500 - $3,440,107 $3,652,452 $4,512,647 $4,751,465 $4,751,465 $4,626,465 14.614 12.192% 14.705% 15.548% 15.153% 15.076% 0.378 0.300% 0.290% 0.284% 0.300% 0.314% - 14.992 12.492% 14.995% 15.832% 15.453% 15.390% _, 0.066 0.052% 0.015% 0.022% 0.021% 0.022% 15.058 12.544% 15.010% 15.854% 15.474% 15.412% 169 i CITY OF FRIDLEY, MINNESOTA RATIO OF NET GENERAL BONDED DEBT TO TAXABLE VALUE AND NET BONDED DEBT PER CAPITA — LAST TEN FISCAL YEARS Deduct City Debt Special Total Service Fund Assessment, — Fiscal Taxable Gross Monies Revenue and Year Population Value Bonded Debt Available HRA Bonds 1984 29,750 $203,913,610 $7,470,000 $86,709 $7,400,000 1985 29,440 198,123,291 22,125,000 86,117 22,090,000 1986 29,423 207,277,779 34,035,000 91,510 34,035,000 -- 1987 29,310 213,204,847 33,195,000 -0- 33,195,000 1988 29,336 206,197,651 31,845,000 -0- 31,845,000 1989 29,250 25,799,307 (1) 30,060,000 -0- 30,060,000 — 1990 28,335 21,152,998 (1) 15,765,000 -0-- 15,765,000 1991 28,313 20,578,914 (1) 17,715,000 -0- 17,715,000 1992 28,369 20,649,025 (1) 22,470,000 -0- 22,470,000 -- 1993 28,287 19,867,696 (1) 21,500,000 -0- 21,500,000 Notes (1)The Minnesota Legislature enacted legislation in 1 988 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- 1993. 170 Table 8 Ratio of Net General Bonded Net General Net General Debt to Total Bonded Debt Bonded Debt Taxable Value Per Capita '- -0- _ - -0- _ - _ - -0 -0- _ -0- _ - -0- _ - -0- _ - -0- _ -0- _ - -0- 171 Table 9 a CITY OF FRIDLEY. MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN DECEMBER 31. 1993 — Market Value $1,087,284,000 — (A) Debt Limit 2% of Market Value $21,745,680 Amount of Debt Applicable to Debt Limit: Total Debt $21,631,542 (B) Deductions: Tax Increment Redevelopment Bonds $15,770,000 Special Assessment Bonds 3,575,000 — Revenue Bonds 2,155,000 Construction Loan 131,542 21,631,542 Total Amount of Debt Applicable to Debt Limit -0- Legal Debt Margin $21,745,680 Notes (A) M.S.A. Section 475.53(see following page) (B) M.S.A. Section 475.51 (see following page) — 172 CITY OF FRIDLEY, MINNESOTA _ COMPUTATION OF LEGAL DEBT MARGIN (CONTINUED) YEAR ENDED DECEMBER 31. 1993 -- 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, and public lighting, heating or power systems, and of any combination thereof or for any other public convenience from which a revenue is or may be derived. (6) Debt service loans and capital loans made to a school district under the provisions of sections 124.42 and 124.431. (7) Amount of all money and the face value of all securities held as a debt service fund for the extinguishment of obligations other than those deductible under this subdivision. (8) Obligations to repay loans made under section 216C.37. (9) Obligations to repay loans made from money received from litigation or settlement of alleged violations of federal petroleum pricing regulations. (10) All other obligations which under the provisions of law authorizing their issuance are not to be included in computing the net debt of the municipality.' 173 Table 10 — CITY OF FRIDLEY, MINNESOTA COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT AND COMPARATIVE DEBT RATIOS — DECEMBER 31, 1993 Debt % of Debt Net Debt Gross Service Net Applicable Applicable Governmental Unit Debt Funds Debt to City to City — Direct and overlapping debt Direct debt: City of Fridley $21,500,000 $12,838,703 $8,661,297 100.00% $8,661,297 Overlapping debt: School Districts No. 11 98,503,635 45,851,499 52,652,136 1.16% 610,765 — No. 14 145,000 189,731 No. 16 4,755,000 489,438 4,265,562 36.80% 1,569,727 Metro Transit 3,000,000 1,646,000 1,354,000 1.29% 17,467 Metro Council 416,635,000 54,451,741 362,183,259 1.19% 4,309,981 — Anoka County 95,345,679 42,009,204 53,336,475 18.04% 9,621,900 North Suburban Hospital District 5,498,960 431,145 5,067,815 44.73% 2,266,834 — Vocational/Technical District No. 916 10,310,000 88,515 10,221,485 2.21% 225,895 Overlapping debt 634,193,274 145,157,273 489,080,732 18,622,569 — Total direct and overlapping debt $655,693,274 $157,995,976 $497,742,029 $27,283,866 - - 174 Table 11 CITY OF FRIDLEY, MINNESOTA RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT TO TOTAL GENERAL GOVERNMENT EXPENDITURES LAST TEN FISCAL YEARS Ratio of Debt _ Total Total Service to Fiscal Debt General General Year Principal Interest Service Expenditures(1) Expenditure 1984 $85,000 $750,729 $835,729 $6,534,319 .1279.1 1985 120,000 648,547 768,547 6,934,756 .1108.1 1986 215,000 1,300,823 1,515,823 8,573,503 .1768.1 1987 740,000 1,508,809 2,248,809 9,566,874 .2351.1 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 Notes (1) Includes General, Special Revenue, Debt Service and Capital Projects. 175 Table 12 CITY OF FRIDLEY, MINNESOTA REVENUE BOND COVERAGE LAST TEN FISCAL YEARS — Net _, Operating Revenue Direct Direct Available — Fiscal Operating Operating For Debt Debt Service Requirements Year Revenue (1) Expenses (2) Service Principal Interest Total Coverage 1984 $2,401,206 $2,043,653 $357,553 $50,000 $6,907 $56,907 6.28 1985 2,296,415 2,253,164 43,251 50,000 5,152 55,152 0.78 1986 2,434,100 2,522,048 (87,948) 50,000 3,400 53,400 - .. 1987 2,473,814 2,513,721 (39,907) 50,000 1,646 51,646 - 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 - Notes (1) Total operating revenue exclusive of interest on investments. — (2) Total operating expenses including depreciation. 176 Table 13 — CITY OF FRIDLEY, MINNESOTA DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS Annual Average — Fiscal Per Capita Median School Unemployment Year Population(1) Income Age(4) Enrollment(3) Rate(5)(6) — 1984 29,750 9,647 28.6 5,007 5.0% 1985 29,440 10,129 28.9 4,833 4.9% 1986 29,423 10,635 29.2 4,660 4.3% — 1987 29,310 13,238 29.9 4,453 4.7% 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 (7) 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 3,942 4.4% Sources: — (1) Estimated by Metropolitan Council (2) 1990 Population Report- Bureau of the Census (3) Estimated-excludes Grace Parochial High School as it is not supported by by property tax dollars (4) 1984-1989 and 1991-1993 amounts are for Anoka County. Amounts for the City of Fridley are not available. - (5) Minnesota Department of Economic Security-Twin Cities Labor Market (6) 1983- 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 177 Table 14 CITY OF FRIDLEY. MINNESOTA CONSTRUCTION, BANK DEPOSITS AND PROPERTY VALUE LAST TEN FISCAL YEARS Commercial Construction Residential Construction Estimated Market Value Number Number Bank(1) Fiscal of of Deposits Taxable Non- Year Units Value Units Value (Thousands) Property Taxable(2) Total _, 1984 67 19,332,432 345 4,388,689 27,917 823,443,600 110,559,039 934,002,639 1985 54 12,729,783 365 5,430,598 24,074 829,444,800 110,559,039 940,003,839 1986 41 10,871,941 379 5,409,450 27,025 865,600,700 177,123,840 1,042,724,540 1987 54 9,845,600 435 23,413,715 33,201 906,029,600 177,123,840 1,083,153,440 1988 70 17,421,494 340 3,660,384 29,030 934,005,900 177,123,840 1,111,129,740 1989 93 30,529,963 301 3,522,035 30,329 967,589,400 177,123,840 1,144,713,240 ... 1990 83 12,883,850 349 3,321,362 29,902 1,025,348,200 177,123,840 1,202,472,040 1991 75 11,946,068 360 2,525,711 33,520 1,030,419,600 177,123,840 1,207,543,440 _ 1992 73 10,329,409 407 2,873,240 48,098 1,080,449,200 177,123,840 1,257,573,040 1993 69 6,778,632 474 3,536,547 48,376 1,087,284,000 177,123,840 1,264,407,840 Sources: (1) Fridley State Bank (2) Non-taxable property is reevaluated by the city assessors every six years .. 178 Table 15 CITY OF FRIDLEY. MINNESOTA PRINCIPAL TAXPAYERS DECEMBER 31. 1993 Fiscal Year 1993 Percent 1992* of Total Taxable Taxable Rank Taxpayer Type of Business Valuation Valuation** 1 Dayton Hudson Target discount store, warehouse and office $1,494,570 5.40% 2 Medtronic, Inc. Electro-medical devices 1,079,400 3.90% — 3 Onan Corporation Portable electric generators 856,921 3.10% 4 United Defense Systems Naval ordinance 603,281 2.18% 5 Dow Brands Cosmetics 537,260 1.94% — 6 Burlington Northern Railroad Operating property 490,330 1.77% 7 Maurice Fillister Georgetown apartments 349,710 1.26% 8 University Avenue Associates Springbrook apartments 320,522 1.16% — 9 East River Road Business Center Business and retail complex 298,396 1.08% 10 Holiday Plus Discount department store 254,784 0.92% Total $6,285,174 22.71% Notes * The 1993 levy was based upon the January 2, 1992 taxable value. ** Before contribution to Metropolitan Tax Pool and tax increment financing 179 — CITY OF FRIDLEY. MINNESOTA INSURANCE COVERAGE DECEMBER 31, 1993 — All risk perils, 100% coinsurance Buildings and contents — Blanket, agreed amount endorsement, replacement cost coverage $21,933,421 Contractor's equipment 1,005,000 — Boiler and machinery 3,000,000 Municipal general liability — Each occurrence limit 600,000 Products/completed operations aggregate limit 600,000 Fire damage limit 50,000 "" Medical expense limit 1,000 Medical expense aggregate occurrence limit 10,000 Limited pollution liability 600,000 — Automobile liability Liability 600,000 — Personal injury protection Statutory Uninsured/underinsured motorist 600,000 Comprehensive Actual cash value — Liquor liability Bodily injury Each person 1,000,000 Each occurrence 1,000,000 Property damage Each occurrence 1,000,000 Loss of means of support 1,000,000 Law Enforcement professional liability Combined single limit per loss — Personal injury, bodily injury, property damage, punitive damages 600,000 Municipal errors and omissions liability 600,000 — Employee benefit programs liability 600,000 — Worker's compensation Statutory PRINCIPAL OFFICIALS' BONDS DECEMBER 31, 1993 — All employees are covered by a blanket of faithful performance bond of$100,000. • 180 CITY OF FRIDLEY, MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION DECEMBER 31, 1993 Date of Incorporation(Village of Fridley) July 1, 1949 Date of Adoption of City Charter September 10, 1957 effective September 25, 1957 Form of Government Council/Manager Fiscal year begins January 1 Area of City 11 square miles Bond rating(Moody's Investors Service, Incorporated) Aa-1 Elections Last Election - Federal Presidential November 3, 1992 Registered voters 19,837 Number of votes cast 15,553 Percent(0/0)of registered voters voting 78.4% 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 Counci 29,440 1986 Estimated by Metropolitan Counci 29,423 1987 Estimated by Metropolitan Counci 29,310 1988 Estimated by Metropolitan Counci 29,336 1989 Estimated by Metropolitan Counci 29,250 1990 Federal Census 28,335 1991 Estimated by Metropolitan Counci 28,313 1992 Estimated by Metropolitan Counci 28,369 1993 Estimated by Metropolitan Counci 28,287 Permanent Employees--As of December 31 Number 1982 123 1983 119 1984 119 1985 125 1986 125 1987 125 -' 1988 126 1989 126 1990 1991 126 137 1992 1993 137 135 181 CITY OF FRIDLEY, MINNESOTA .� MISCELLANEOUS STATISTICAL INFORMATION (CONTINUED) DECEMBER 31. 1993 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 1,040 Number of traffic signal installations 33 Number of other special signal installations 2 -' Number of civil defense warning sirens 8 Miles of streets and sidewalks(including State and County) City streets 125.64 Trunk highways 10.79 County roads 14.56 Sidewalks 10.98 Miles of sewer Storm 43.19 — Sanitary 102.95 Miles of water mains 112.5 Municipal water system source City of Fridley Water Plant (13 wells)--capacity of 15 million gallons per day Number of water connections December 31, 1993 8,250 connections Daily average consumption(gallons) 4.67 million gallons Elevated storage capacity 2 million gallons — Water storage reservoirs 4.5 million gallons Number of fire hydrants 1,071 Municipal sewer system -- Disposal --through Metropolitan Waste Control Commission — Number of connections December 31, 1993 8,000 connections Average daily flow(includes infiltration/inflow) 5.65 million gallons 182 — CITY OF FRIDLEY, MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION (CONTINUED] _ DECEMBER 31, 1993 Parks and Recreation Areas City 316 Acres County 282 Acres Total 598 Acres City and County Parks Schools Total _ Number of: Hockey rinks 6 2 8 General skating rinks 15 2 17 Playgrounds 29 4 33 Swimming beaches 1 0 1 Swimming pools 0 1 1 Day camp sites 1 0 1 Baseball diamonds 4 3 7 Softball diamonds 24 7 31 Outdoor basketball courts 19 4 23 Tennis courts 24 19 43 Horseshoe courts 16 0 16 Archery ranges 1 0 1 Permanent playground buildings 3 0 3 Permanent picnic shelters 12 0 12 Soccer/football fields 7 8 15 183 CITY OF FRIDLEY. MINNESOTA GENERAL INFORMATION DECEMBER 31. 1993 Location - Transportation .- The City of Fridley, with a total land area of eleven square miles and an estimated population of 28,287, 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 FactlRies 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 178 certified personnel in the education of about 2,611 students. Grace Parochial High School has an enrollment of approximately 925. 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. 184 CITY OF FRIDLEY, MINNESOTA GENERAL INFORMATION (CONTINUED) DECEMBER 31. 1993 Larger Employers Larger employers in the City of Fridley include: Full-Time Employer Product or Service Employees Medtronics, Inc. Electro-medical devices and hdqtrs. 3,000 United Defense Systems Pumps and naval ordinance 1,672 Onan Corporation Portable generators, electronic equipment 1,600 Unity Hospital Medical services 1,400 Burlington Northern Railroad Northtown yard 1,100 Target Stores, Warehouse Discount department store 835 Minco Products, Inc. Electronic devices 625 Kurt Manufacturing Machine parts 500 Dow Brands Cosmetics 375 Independent School District#14 Fridley school district 350 McGlynn's Bakery 350 Safetran Systems Corporation Railroad accessories 249 Longview Fiber Company Packaging supplies 165 185