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1995 CAFR COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF FRIDLEY MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 1995 CITY OF FRIDLEY, MINNESOTA Comprehensive Annual Financial Report December 31 , 1995 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. 1995 TABLE OF CONTENTS EXHIBIT PAGE INTRODUCTORY SECTION List of Elected and Appointed Officials 1 Organizational Structure 2 City Manager's Letter of Transmittal 5 Chief Executive Officer's Letter of Transmittal 7 Certificate of Achievement for Excellence in Financial Reporting 17 FINANCIAL SECTION Auditors' Opinion 19 General Purpose Financial Statements Combined Financial Statements - Overview Combined Balance Sheet - All Fund Types and Account Groups A-1 22 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types and Expendable Trust Funds A-2 26 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General, Special Revenue and Budgeted Capital Project Fund Types A-3 28 Combined Statement of Revenues, Expenses and Changes -" in Retained Earnings - All Proprietary Fund Types A-4 31 Combined Statement of Cash Flows All Proprietary Fund Types A-5 32 Notes to Financial Statements 34 Financial Statements of Individual Funds: General Fund: Comparative Balance Sheet B-1 67 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual B-2 68 Schedule of Revenues and Other Financing Sources - Budget and Actual B-3 69 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31. 1995 — TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE FINANCIAL SECTION (CONTINUED) General Fund: (continued) Schedule of Expenditures and Other Financing Uses - Budget and Actual B-4 71 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 .0 CITY OF FRIDLEY. MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1995 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 Housing Revitalization Special Revenue Fund: Balance Sheet C-15 92 Combining Statement C-16 93 Debt Service Funds: Combining Balance Sheet D-1 95 Combining Statement of Revenues, Expenditures and Changes in Fund Balance D-2 96 Capital Projects Funds: Combining Balance Sheet E-1 98 Combining Statement of Revenues, Expenditures and Changes in Fund Balances E-2 100 Capital Improvements Fund: Comparative Balance Sheet E-3 104 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual E-4 105 Enterprise Funds: Combining Balance Sheet F-1 107 Combining Statement of Revenues, Expenses and — Changes in Retained Earnings F-2 108 Combining Statement of Cash Flows F-3 109 Liquor Fund: Comparative Balance Sheet F-4 110 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings F-5 111 a< CITY OF FRIDLEY. MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31. 1995 — TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE FINANCIAL SECTION (CONTINUED) Uquor Fund: (continued) Comparative Statement of Cash Flows F-6 112 Public Utility Fund: — Comparative Balance Sheet F-7 113 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings F-8 114 — Comparative Statement of Cash Flows F-9 115 Internal Service Funds: Combining Balance Sheet G-1 117 Combining Statement of Revenues, Expenses and Changes in Retained Earnings G-2 118 Combining Statement of Cash Flows G-3 119 — Employee Benefits Fund: Comparative Balance Sheet G-4 120 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-5 121 Comparative Statement of Cash Flows G-6 122 Self Insurance Fund: Comparative Balance Sheet G-7 123 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-8 124 Comparative Statement of Cash Flows G-9 125 Information Systems Fund: Comparative Balance Sheet G-10 126 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-11 127 ._ Comparative Statement of Cash Flows G-12 128 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31. 1995 TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE FINANCIAL SECTION (CONTINUED) Trust and Agency Funds: Combining Balance Sheet H-1 130 Industrial Development Revenue Bond Trust Fund: Comparative Statement of Revenues, Expenditures and Changes in Fund Balance H-2 131 All Agency Funds: _ Combining Statement of Changes in Assets and Liabilities H-3 132 General Fixed Assets: Comparative Schedule of General Fixed Assets I-1 135 Schedule of Changes in General Fixed Assets - By Function — and Activity 1-2 136 Schedule of Changes in General Fixed Assets - By Function and Activity 1-3 137 General Long-Term Debt: Comparative Schedule of General Long-Term Debt J-1 139 SUPPLEMENTAL INFORMATION "- Schedule of Assessed Valuation and Long-Term Debt for the Tax Increment Financing District K-2 141 Schedule of Sources and Uses of Public Funds for the Tax Increment Financing District K-3 142 — STATISTICAL SECTION TABLE PAGE General Governmental Expenditures by Function — - Last Ten Fiscal Years 1 143 General Revenues by Source - Last Ten Fiscal Years 2 144 Certified Property Tax Levies and Collections - Last Ten Fiscal Years 3 145 Estimated Market Value and Taxable Value of All Taxable Property - Last Ten Fiscal Years 4 146 CITY OF FRIDLEY. MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31. 1995 TABLE OF CONTENTS (CONTINUED) TABLE PAGE STATISTICAL SECTION (CONTINUED) Significant Minnesota Tax Policies 148 — Property Tax Rates - All Overlapping Governments - Last Ten Fiscal Years 5 150 Special Assessment Levies and Collections - Last Ten Fiscal Years 6 152 History of Certified Tax Levies and Tax Rates - Last Ten Fiscal Years 7 154 Ratio of Net General Bonded Debt to Taxable Value and Net Bonded Debt Per Capita - Last Ten Fiscal Years 8 156 — Computation of Legal Debt Margin 9 158 Computation of Direct and Overlapping Bonded Debt and — Comparative Debt Ratios 10 160 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Government Expenditures - Last Ten Fiscal Years 11 161 Revenue Bond Coverage - Last Ten Fiscal Years 12 162 Demographic Statistics - Last Ten Fiscal Years 13 163 Construction, Bank Deposits and Property Value — - Last Ten Fiscal Years 14 164 Principal Taxpayers 15 165 Insurance Coverage 166 Miscellaneous Statistical Information 167 General Information 170 INTRODUCTORY SECTION 4 . ■ CITY OF FRIDLEY, MINNESOTA ELECTED AND APPOINTED OFFICIALS DECEMBER 31, 1995 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 1998 Councilmember,Ward II Dennis L Schneider 1998 Councilmember,Ward III Ann R. Bolkcom 1998 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 - David H. Sallman Fire Chief - Charles J. McKusick Director of Public Works - John G. Flora Director of Recreation and Natural Resource - Jack G. Kirk Director of Community Development - Barbara J. Dacy 1 CITY ADMINISTRATIVE ORGANIZATIONAL STRUCTURE 1995 — Total Authorized Positions(136) CITY MANAGER (5) City Manager Assistant to City Manager Human Resources/Public Information Technician Secretary to the City Manager ._ Personnel Secretary FINANCE (22) POUCE (47) FIRE (7) Finance Director—Treasurer Public Safety Director— Fire Chief _ Secretary Emergency Mgmt Director Secretary Staff Accountant Secretary Dep Fire Chief Accountant Dep Pub Safety Dir (4) Firefighter — Lieutenant ACCOUNTING (7) (4) Sergeant Assistant Finance Director (3) Corporal Accounting Specialist (3)Corporal Utility Billing Clerk (26)Patrol Officer General Accountant Pub Sfty Projects Coor Acctg—Data Processing Clerk (2)Crime Prey Spec Acctg—Data Processing Clerk Office Supervisor Acctg—Data Processing Clerk (2) Senior Office Asst (3)Office Asst ASSESSING (2) Outreach Worker Assessor Appraiser Assmt CIk/Appraiser Asst MIS (2) MIS Technician MIS Specialist — CITY CLERK —RECORDS (2) City Clerk _ Receptionist—License Clerk LIQUOR (5) Liquor Operations Manager (2) Liquor Store Manager 2 CITY ADMINISTRATIVE ORGANIZATIONAL STRUCTURE 1995 (cont) PUBUC WORKS (36) RECREATION& COMMUNITY NATURALIST (8) DEVELOPMENT (9) Director of Public Works Secretary Director of Recreation & Director of Community Oper Analyst Natural Resources Development Secretary Secretary ENGINEERING (3) Sr Citizen Prog Coordinator Assistant Public Works Director BUILDING INSPECTION (2) Engineering Tech NATURAUST (3) Chief Bldg Official Engineering Tech Inspector Natural Res Coordinator Secretary Interpretive Specialist PLANNING (5) PW MAINTENANCE (30) Receptionist/Clerk Typist Planning Coordinator Superintendent Code Enf Officer — Plan Asst Secretary RECREATION (2) (2)Planning Assistant Street Foreman Program Supervisor (1) Secretary (3)PSW—D Program Specialist (3) Mechanic, Level B _ PSW—C PSW—B (3)PSW—A _ Water Foreman (3)PSW—D PSW—A _ Sewer Foreman (3)PSW—D PSW—A _ Park Foreman (4)PSW—D PSW—B 3 - CITY OF FRIDLEY FRIDLEY MUNICIPAL CENTER •6431 UNIVERSITY AVE. N.E. FRIDLEY, MN 55432 •(612)571-3450• FAX (612)571-1287 June 10, 1996 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, 1995. 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. Bums City Manager 5 -- CITYOF FRI DLEY FRIDLEY MUNICIPAL CENTER •6431 UNIVERSITY AVE. N.E. FRIDLEY, MN 55432•(612)571-3450• FAX (612)571-1287 June 10, 1996 Mr. William W. Bums, 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, 1995, 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 1994. It is our belief that the accompanying fiscal year 1995 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. 7 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 1995 population of 28,204. 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. LOCAL ECONOMY The Minneapolis-St. Paul area economy has continued to be relatively stable over the last several years. Unemployment for Anoka County has ranged around 3.5% for the last several years with very little change. Office and retail space continue to be readily available. The market values for these properties have begun to recover after several years of decline. 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 1995, the City welcomed a number of new businesses. Murphy Warehouse completed its storage and delivery facility. In addition, Home Depot, a national home improvement retail chain, completed negotiations and constructed a 130,000 square foot store in the southern portion of the City. The store opened for business in the spring of 1996. MAJOR INITIATIVES During 1995, the City Council continued its focus on the quality of the housing stock within the City. The rental housing inspection program that started in 1994 continued. This program is designed to identify rental housing units in need of repair and verify that the required repairs are made. By the end of 1995, 25% of the City's 3,900 rental units had been inspected. In addition, the HRA and the City sponsor several housing programs that include grants, low interest loans and first time mortgages. During 1995, 53 homeowners received over$2,010,000 of assistance, and over the last three years 140 homeowners have received over $5,764,000 of assistance. 8 owsli CITY OF FRIDLEY, MINNESOTA GENERAL INFORMATION (CONTINUED) MAJOR INITIATIVES (CONTINUED) The redevelopment of the Southwest Quadrant, an area bounded by University Avenue and Mississippi Street, began in 1995 with the HRA acquiring four apartment buildings and a number of businesses. Rottlund Homes was selected as the developer and will be building a combination of single family residences and townhomes on this fourteen acre site. Construction is expected to begin in 1996 and be completed by late 1997 or early 1998. Since the City's warehouse liquor store was one of the businesses required to relocate as the Southwest Quadrant project moved forward, the City spent most of 1995 reviewing potential sites for a new liquor store while the old store was temporarily relocated to the Holly Shopping Center. While - several potential sites were reviewed, no decision on a future home for the warehouse liquor store was made in 1995. Fridley Pride City-Wide, a week long program designed to clean up and beautify the City was held in September. This program included curbside pickup of appliances, brush, household goods and refuse. Other items such as scrap metal and tires could be brought to a central drop-off site. All services were provided to residents free of charge. In addition, volunteer efforts were coordinated to clean up City parks, repaint houses and help residents prepare for the curbside pick up. The following summarizes some of the amounts collected during this program: Refuse - 265 tons Brush and Branches - 30,000 cubic yards Appliances - 1,032 Usable Furniture - 14,880 pounds Junk Cars - 15 Used Oil - 2,000 gallons Tires - 2,089 Scrap metal and asphalt - 77 tons In addition, businesses were encouraged to participate in this program to be cleaning up and beautifying their properties. Four businesses received awards for their beatification efforts which included additional landscaping and exterior maintenance. During the year, the City of Fridley directed a number of construction projects including building a bikeway along University Avenue, the resurfacing of a number of tennis courts, upgrading old playground equipment with newer and safer equipment, the relining of a portion of the City's sanitary sewer system, regular maintenance and upgrading of the City's wells and liftstations and the annual street reconstruction and sealcoating programs. Internally, in order to balance the 1996 budget, four full-time and one part-time employees were laid off during the fall of 1995. In addition, five warming houses and skating rinks were closed for the 1995- - 1996 winter season. These cuts, along with other budget reductions, a three percent increase in the tax levy and the planned use of $395,367 of reserves resulted in a balanced 1996 budget that Council adopted in December. We were also honored to receive the Distinguished Budget Presentation Award for our 1994 Budget. This represented the sixth 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. The City applauds the efforts of the Minnesota State Legislature in their attempt 9 CITY OF FRIDLEY, MINNESOTA GENERAL INFORMATION (CONTINUED) — PLANS FOR THE FUTURE (CONTINUED) to curtail unfunded state mandates. The City will continue to investigate new funding and cost sharing alternatives as well as reviewing our operations in order to decrease the reliance on intergovernmental revenues. — During 1996, the review of potential sites for a new liquor store will continue. It appears that the operation will continue in the Holly Center site for most of 1996. Relocating the store to a larger more permanent location will be important if the Liquor operation is to continue contributing to the General Fund. Failure to relocate could result in additional reliance on property taxes and intergovernmental revenues or decreases in services. Implementation of an imaging system, which is scheduled for 1996, will increase the availability data and the efficiency in which City staff can access it and respond to resident's requests. Significant projects budgeted for 1996 in the five year capital improvement plan include: studies to determine the need for a community activity center and out-sourcing vehicle maintenance; selection and installation of an optical disk imaging system to archive City records; upgrading playground equipment by replacing the old equipment with new safer and accessible equipment; construction of a fence and gates on the north side of Springbrook Nature Center to provide a north boundary as well as reduce vandalism; Street reconstruction including concrete curb and gutter with new asphalt pavement on a number of City streets; design of well #12 filter system to provide an additional filtered well; rebuild booster station at 53rd and Johnson Street relining sanitary and storm sewer pipes to decrease inflow and outflow; and the annual sealcoating, well, reservoir and pump house maintenance programs. FINANCIAL INFORMATION INTERNAL CONTROLS — In developing and improving the City's accounting system, consideration is given to the adequacy of internal accounting controls. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against loss from unauthorized use or — disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and the evaluation of costs and benefits requires — estimates and judgments by management. All internal control evaluations occur within the above framework. We believe that the City's internal accounting controls adequately safeguard assets and provide reasonable assurance of the proper recording of financial transactions. BUDGETARY CONTROLS A complete budgetary system of accounts is maintained for the General and Special Revenue Funds. Budgetary control is maintained in compliance with the City Charter Requirements. The Charter provides that it is the duty of the City Manager to strictly enforce the provisions of the budget. The management policy of the City is such that the existence of a particular item or appropriation in the approved budget does not mean that it will or must be automatically expended. It is the policy of the City to control budgets at the expenditure category level. Budget adjustments between City divisions are made upon the approval of a resolution by the City Council. The City Charter provides that the City 10 CITY OF FRIDLEY, MINNESOTA FINANCIAL INFORMATION (CONTINUED) BUDGETARY CONTROLS (CONTINUED) Council shall not have power to increase the total amount of the budget, whether by insertion of new items or otherwise, beyond the estimated revenue unless the actual revenue exceeds such revenue estimates, and in that event not beyond such actual revenue. There is a constant review process. Expenditures are not approved until it has been determined that 1) the expenditure is necessary, 2) adequate funds have been appropriated, and 3) funds are available. CASH MANAGEMENT All temporary cash surpluses during the year are invested in various securities which State statutes permit. The City's policy is to invest all available monies at competitive interest rates in accordance with the City's over-all fiscal plan coordinated with operating needs and programs projected over the ensuing 12 month period. Investment yields on investments held during the year ranged from 4.40%to 11.62%. 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, 1995 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 $19,212,597. Of this outstanding debt, $1,555,000 represents special assessment debt with government commitment, $11,105,000 represents — general obligation tax increment refunding bonds, $4,090,000 relates to tax increment issues supported by revenue from the established tax increment areas, $2,325,000 represents general obligation water, sewer and storm water revenue bonds, $123,931 represents a construction loan from the State of Minnesota and $13,666 represents capital lease obligations. During 1995, the 1992 Temporary Tax Increment Bonds were retired upon maturity by issuing the 1995 Temporary Tax Increment Bonds to provide the required funds. The City of Fridley has, since 1982, maintained a credit rating of a Aa1 on its long-term bonds. NOM 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 poor, 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. 11 CITY OF FRIDLEY, MINNESOTA FINANCIAL INFORMATION (CONTINUED) GENERAL GOVERNMENT FUNCTIONS The following schedule presents a summary of the General, Special Revenue, Debt Service, Capital Projects and Expendable Trust Funds' revenues for the fiscal year ended December 31, 1995. The most significant changes in revenues from the prior year were in intergovernmental, interest and miscellaneous revenue categories. The increase in intergovernmental revenue is due $303,410 in contributions received from other local units of government for various construction projects administered by the City of Fridley. This increase is in part offset by minor increases and decreases in other state and federal aids. The decrease in interest revenue is combination of having to reinvest at lower rates as investments matured and a change int he City's investment policy that resulted in the shortening of the maturities to less than five years. Finally, miscellaneous revenue's increase was caused by an reimbursement from the HRA's insurance carrier for a portion of the costs incurred with the Southwest Quadrant relocations. 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, 1995. Percent Increase/ — Revenues Amount of Total (Decrease) Taxes and special assessments $6,966,331 46.17% $50,856 Licenses and permits 554,182 3.67% 26,071 Intergovernmental 4,003,592 26.53% 194,764 Charges for services 1,015,048 6.73% (23,815) Fines and forfeits 183,442 1.22% (1,978) Interest on investments 1,797,917 11.92% (140,893) Miscellaneous 568,313 3.77% 296,195 Total $15,088,825 100.00% $401,200 The most significant change is in the general government, debt service and capital outlay categories. The capital outlay and general government increase are caused by the costs incurred with the relocation and redevelopment of the Southwest Quadrant area. The general government increase is also due to the aforementioned City-wide Cleanup Days ($188,221) and an increase in the activity in the HRA sponsored housing programs ($98,221). The increase in debt service expenditures is caused the by the maturity of the 1992 Temporary Tax Increment Bonds. The $4,030,000 principal payment in 1995 resulted in principal payments being $2,225,000 higher than 1994 principal payments. Percent Expenditures Amount of Total Increase — Current: General government $3,954,875 17.63% $747,933 Public safety 3,821,230 17.03% 268,418 Civic center 195,949 0.87% 15,845 Public works 2,375,472 10.59% (97,656) Community development 530,230 2.36% 67,615 Recreation and naturalist 850,329 3.79% 70,087 Debt service 5,636,711 25.13% 2,140,922 Capital outlay 5,067,825 22.59% 2,336,295 Total $22,432,621 100.00% $5,549,459 12 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 in the Holly Shopping Center. The City owns the store at the Highway 65 location and currently leases space for the other store. In 1984, the City changed its sales philosophy to the wholesale approach so that we could remain competitive with the three neighboring communities which use wholesale pricing. Retained earnings of the Liquor Fund were $1,478,181 on December 31, 1995 as compared to $1,539,095 at the closing of the last fiscal year. Income before operating transfers decreased from $156,740 in 1994 to $14,086 in 1995. This decrease is primarily due to costs associated with the Mississippi Street store to Holly Center and costs associated with evaluating potential new sites for the store. Public Utility Fund This fund accounts for the operation and financing of the City-owned sewer and water systems. — Included in the assets of the fund is a receivable from the Metropolitan Council Wastewater Service Division of $97,868 representing the City's share of the equity in the Minneapolis Sewer System which was acquired by the Metropolitan Council in January 1, 1971. This amount will be paid to the City by means of issuing credits against future sewer billings. 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, 1993, 1994 and 1995. Those improvements to the utility system paid for or financed directly by the Public Utility Fund have always been carried in the Public Utility Fund and depreciated. Retained earnings on December 31, 1995 were $10,111,705 compared to $10,390,651 at the close of the last fiscal year. 13 CITY OF FRIDLEY, MINNESOTA FINANCIAL INFORMATION (CONTINUED) RISK MANAGEMENT The Self Insurance Fund was set up to account for all revenues and expenditures associated with the $50,000 deductible on the general liability policy. Self insuring a larger deductible has reduced the annual premiums which allow us to directly benefit from our good experience rating. In the future an — analysis will be made of the feasibility of self insuring all or a portion of other policies. In 1990, $1,000,000 was transferred from the General Fund to the Self Insurance Fund. OTHER INFORMATION PENSIONS City of Fridley employees are covered by one of five pension plans: 1) Fridley Fire Relief Association for Volunteer Firemen. 2) Public Employees Police and Fire Consolidation Plan for police officers hired prior to December 15, 1975. 3) Public Employees Retirement Police and Fire Plan, covering the City's full-time Firemen and Police Officers hired after December 15, 1975. -- 4) The basic Public Employees Retirement Plan, which covers certain other City civilian employees. 5) Coordinated Public Employees Retirement Plan, which covers 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. 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, 1994. The Certificate of — Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of State and local government financial reports. 14 CITY OF FRIDLEY, MINNESOTA OTHER INFORMATION (CONTINUED) CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE (CONTINUED) 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. - 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 Tjomhom, 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, 97e.tamsa 7V0./.44 Richard D. Pribyl Howard D. Koolick Finance Director Assistant Finance Director ORM IMB 15 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, 1994 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. NEE OFFjc �_ iNI o HIES y VA AM)" President t SEAL1ON ceicIc. Yii-7,Soret Executive Director 17 O.% FINANCIAL SECTION OEM 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 accompanying general purpose financial statements of the City of Fridley,Minnesota,as of and for the year ended December 31, 1995 as listed in the table of contents. These general purpose financial _ statements are the responsibility of the City'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 general purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. — In our opinion,the general purpose financial statements referred to above present fairly,in all material respects, the financial position of the City of Fridley,Minnesota,as of December 31, 1995,and the results of its operations and cash flows of its proprietary fund types for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards,we have also issued a report dated June 5, 1996 on our consideration of the City of Fridley,Minnesota's internal control structure and a report dated June 5, 1996 on its compliance with laws and regulations. Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The combining and individual fund and account group financial statements,supporting schedules and statistical information listed in the table of contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the City of Fridley,Minnesota. Such information, except for that portion marked"unaudited,"on which we express no opinion,has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and,in our opinion,is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. June 5, 1996 TAUTGES,REDPATH&CO.,LTD. Certified Public Accountants 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 4912/426-7000 • 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, Special Revenue and Budgeted Capital Project 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, 1995 Governmental Fund Types Special Debt Capital General Revenue Service Projects — Assets Cash and cash equivalents $578 $17,262 $926,557 $1,053,495 Investments 7,608,168 160,787 9,772,051 13,091,788 Receivables: Accounts 26,867 46,139 Taxes 125,505 200,898 Special assessments 4,670 2,022,921 56,583 Mortgage 88,423 1,135,647 Interest 209,405 33,220 Loan 6,300 Developer note 136,393 Due from other funds 388 Due from other governments 52,799 149,970 20,000 Inventories, at cost 25,147 Prepaid items 11,539 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 $8,207,371 $462,969 $12,721,529 $15,591,631 — 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 1995 1994 $5,071,420 $1,974,253 $ $ $ $9,043,565 $5,991,604 44,485 30,677,279 37,337,246 1,407,490 3,306 1,483,802 1,156,211 517 326,920 474,845 28,037 2,112,211 2,348,075 1,224,070 1,141,421 242,625 422,298 6,300 6,300 136,393 137,962 3,312 1,675,706 1,679,406 1,174,635 53,895 276,664 255,637 241,973 267,120 357,179 277,840 289,379 355,742 213,818 213,818 439,249 5,453,445 5,453,445 4,701,218 19,739,521 244,590 29,329,873 49,313,984 48,394,486 10,701,642 10,701,642 10,524,906 6,185,955 6,185,955 6,819,432 $27,037,306 $3,894,549 $5,501,753 $29,329,873 $16,887,597 $119,634,578 $122,038,446 23 CITY OF FRIDLEY, MINNESOTA COMBINED BALANCE SHEET-ALL FUND TYPES AND ACCOUNT GROUPS(CONTINUED) December 31, 1995 -- Governmental Fund Types Special Debt Capital General Revenue Service Projects — Liabilities. fund eauitv and other credits Liabilities Accounts payable $241,840 $52,890 $1,944 $27,884 Deposits payable 16,088 10,296 20,000 — Contracts payable 40,217 Salaries payable 170,881 4,138 Compensated absences payable Deferred revenue 84,295 7,279 2,015,865 164,609 Due to other funds 886,818 89,010 703,578 Due to other governments 9,011 2,078 197,984 — Bonds payable Loans payables Other liabilities Total liabilities 1,408,933 163,613 2,019,887 1,154,272 Fund eauitv and other credits Contributed capital — Investment in general fixed assets Retained earnings- — Reserved Unreserved Fund balance: — Reserved 232,048 95,712 1,370,587 7,924,950 Unreserved- Designated 6,435,084 203,644 7,160,650 Undesignated 131,306 9,331,055 (648,241) Total equity and other credits 6,798,438 299,356 10,701,642 14,437,359 — Total liabilities, equity and other credits $8,207,371 $462,969 $12,721,529 $15,591,631 — See Accompanying Notes to Financial Statements 24 - 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 1995 1994 - $221,174 $18,118 $ $ $ $563,850 $435,402 - 1,556 5,469,752 5,517,692 4,903,183 21,474 61,691 166,948 14,009 62,355 251,383 199,288 - 879,599 879,599 820,755 2,272,048 2,710,585 1,679,406 1,174,635 - 529,139 12,101 750,313 729,617 2,325,000 16,750,000 19,075,000 19,600,000 123,931 123,931 127,857 - 58,506 13,666 72,172 79,105 3,170,858 960,072 5,481,853 16,887,597 31,247,085 30,947,375 - 12,276,562 1,952,081 14,228,643 14,600,540 29,329,873 29,329,873 28,220,880 3,500,340 231,775 3,732,115 2,419,899 8,089,546 750,621 8,840,167 10,426,010 9,623,297 12,424,813 - 13,799,378 14,346,188 19,900 8,834,020 8,652,741 - 23,866,448 2,934,477 19,900 29,329,873 88,387,493 91,091,071 -. $27,037,306 $3,894,549 $5,501,753 $29,329,873 $16,887,597 $119,634,578 $122,038,446 25 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. 1995 Governmental Fund Types Special Debt — General Revenue Service Revenues: Taxes $3,650,088 $ $ '" Special assessments 959 405,203 Licenses and permits 458,180 96,002 Intergovernmental revenue 3,176,728 347,545 — Charges for services 868,368 146,680 Fines and forfeits 183,165 277 Interest on investments 435,917 8,259 473,755 Miscellaneous 168,713 55,417 Total revenues 8,942,118 654,180 878,958 Expenditures: Current General government 1,668,392 983,571 ._ Public safety 3,821,230 Municipal center 195,949 Public works 2,186,984 — Community development 530,230 Recreation and naturalist 850,329 Debt service 14,572 5,609,838 Capital outlay 379,652 269,591 Total expenditures 9,647,338 1,253,162 5,609,838 Excess(deficiency)of revenues over — expenditures (705,220) (598,982) (4,730,880) Other financing sources(uses): Bond proceeds 4,074,311 Capital Lease Obligation Issuance of Long Term Note Receivable Operating transfers in 391,526 675,159 1,326,460 Operating transfers out (493,155) Total other financing sources(uses) 391,526 675,159 4,907,616 — Excess(deficiency)of revenues and other financing sources over expenditures and other financing uses (313,694) 76,177 176,736 ., Fund Balance January 1, as previously stated 7,134,694 223,179 10,524,906 Prior period adjustment (22,562) — Fund Balance January 1, as restated 7,112,132 223,179 10,524,906 — Residual Equity Transfers out Fund Balance December 31 $6,798,438 $299,356 $10,701,642 See Accompanying Notes to Financial Statements 26 Exhibit A-2 Fiduciary Fund Type Totals Capital (Memorandum Only) Projects Trust 1995 1994 $2,814,987 $ $6,465,075. $6,334,178 95,094 501,256• 581,297 554,182 528,111 479,319 4,003,592- 3,808,828 1,015,048• 1,038,863 183,442• 185,420 877,767 2,219 1,797,917• 1,938,810 344,183 568,313 272,118 4,611,350 2,219 15,088,825 14,687,625 1,302,912 3,954,875 3,206,942 3,821,230 3,552,812 195,949 180,104 188,488 2,375,472 2,473,128 530,230 462,615 850,329 780,242 12,301 5,636,711 3,495,789 4,418,582 5,067,825 2,731,530 5,922,283 22,432,621 16,883,162 (1,310,933) 2,219 (7,343,796) (2,195,537) 4,074,311 157,689 38,500 9,414 143,094 2,536,239 3,213,782 (1,918,084) (2,411,239) (2,988,782) (1,774,990) 4,199,311 430,603 _ (3,085,923) 2,219 (3,144,485) (1,764,934) 17,523,282 17,681 35,423,742 38,000,961 (22,562) 17,523,282 17,681 35,401,180 38,000,961 (812,285) $14,437,359 $19,900 $32,256,695 $35,423,742 27 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. 1995 With comparative totals for year ended December 31, 1994 General Fund Variance Favorable - Budget Actual (Unfavorable) Revenues: Taxes $3,564,705 $3,650,088 $85,383 - Special assessments 2,444 959 (1,485) Licenses and permits 463,435 458,180 (5,255) Intergovernmental revenue 3,108,753 3,176,728 67,975 - Charges for services 820,248 868,368 48,120 Fines and forfeits 221,867 183,165 (38,702) Interest on investments 515,000 435,917 (79,083) - Miscellaneous 116,440 168,713 52,273 Total revenues 8,812,892 8,942,118 129,226 Expenditures: Current General government 1,773,424 1,668,392 105,032 Public safety 3,935,538 3,821,230 114,308 Municipal center 201,845 195,949 5,896 Public works 2,245,699 2,186,984 58,715 Community development 540,695 530,230 10,465 Recreation and naturalist 854,641 850,329 4,312 Reserve for Contingency 75,900 75,900 Debt Service 14,572 14,572 Capital outlay 394,402 379,652 14,750 Total expenditures 10,036,716 9,647,338 389,378 Excess(deficiency)of revenues over • expenditures (1,223,824) (705,220) 518,604 Other financing sources(uses): Capital Lease Obligation Issuance of Long Term Note Receivable ., Operating transfers in 391,526 391,526 Operating transfers out Total other financing sources(uses) 391,526 391,526 - Excess(deficiency)of revenues and other financing sources over expenditures and other financing uses (832,298) (313,694) 518,604 - Fund Balance January 1, as previously stated 7,134,694 7,134,694 Prior period adjustment (22,562) (22,562) Fund Balance January 1, as restated 7,112,132 7,112,132 Fund Balance December 31 $6,279,834 $6,798,438 $518,604 See Accompanying Notes to Financial Statements 28 Exhibit A-3 Continued Special Revenue Fund Types Budgeted Capital Project Funds Variance Variance _ Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) - $ $ $ $70,550 $72,931 $2,381 3,111 $3,111 91,105 96,002 4,897 - 350,170 347,545 (2,625) 665,000 175,909 (489,091) 147,574 146,680 (894) 277 277 - 21,439 8,259 (13,180) 341,204 431,908 90,704 55,393 55,417 24 25,000 74,297 49,297 665,958 654,180 (11,778) 1,101,754 758,156 (343,598) 1,022,317 983,571 38,746 - 272,887 95,425 177,462 565,283 269,591 295,692 1,104,691 492,963 611,728 1,587,600 1,253,162 334,438 1,377,578 588,388 789,190 - (921,642) (598,982) 322,660 (275,824) 169,768 445,592 921,751 675,159 (246,592) 35,000 35,000 (143,094) (143,094) - 921,751 675,159 (246,592) (143,094) (108,094) 35,000 - 109 76,177 76,068 (418,918) 61,674 480,592 223,179 223,179 8,423,248 8,423,248 223,179 223,179 8,423,248 8,423,248 $223,288 $299,356 $76,068 $8,004,330 $8,484,922 $480,592 29 Exhibit A-3 Continued 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(CONTINUED1 Year Ended December 31. 1995 With comparative totals for year ended December 31, 1994 (Memorandum Only) "" Variance- Favorable 1994 Budget Actual (Unfavorable) Actual '^ Revenues: Taxes $3,635,255 $3,723,019 $87,764 $3,600,157 - Special assessments 2,444 4,070 1,626 3,975 Licenses and permits 554,540 554,182 (358) 528,111 Intergovernmental revenue 4,123,923 3,700,182 (423,741) 3,808,828 - Charges for services 967,822 1,015,048 47,226 1,038,863 Fines and forfeits 222,144 183,442 (38,702) 185,420 Interest on investments 877,643 876,084 (1,559) 886,222 - Miscellaneous 196,833 298,427 101,594 224,250 Total revenues 10,580,604 10,354,454 (226,150) 10,275,826 Expenditures: Current General government 2,795,741 2,651,963 143,778 2,361,139 Public safety 3,935,538 3,821,230 114,308 3,755,080 Municipal center 201,845 195,949 5,896 180,104 Public works 2,518,586 2,282,409 236,177 2,144,797 Community development 540,695 530,230 10,465 462,615 Recreation and naturalist 854,641 850,329 4,312 780,242 Reserve for Contingency 75,900 75,900 Debt Service 14,572 14,572 14,572 Capital outlay 2,064,376 1,142,206 922,170 1,463,277 Total expenditures 13,001,894 11,488,888 1,513,006 11,161,826 Excess(deficiency)of revenues over expenditures (2,421,290) (1,134,434) 1,286,856 (886,000) Other financing sources(uses): Capital Lease Obligation 38,500 Issuance of Long Term Note Receivable 9,414 Operating transfers in 1,313,277 1,101,685 (211,592) 118,824 Operating transfers out (143,094) (143,094) Total other financing sources(uses) 1,170,183 958,591 (211,592) 166,738 Excess(deficiency)of revenues and other financing sources over expenditures and other financing uses (1,251,107) (175,843) 1,075,264 (719,262) - Fund Balance January 1, as previously stated 15,781,121 15,781,121 16,500,383 Prior period adjustment (22,562) - Fund Balance January 1, as restated 15,758,559 15,758,559 16,477,821 Fund Balance December 31 $14,507,452 $15,582,716 $1,075,264 $15,758,559 - See Accompanying Notes to Financial Statements 30 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. 1995 With comparitive totals for the year ended December 31, 1994 Proprietary Fund Types Totals Internal (Memorandum Only) - Enterprise Service 1995 1994 Sales and cost of sales: Sales $3,073,197 $ $3,073,197 $3,083,966 - Cost of sales 2,472,464 2,472,464 2,486,129 Gross profit 600,733 600,733 597,837 - Operating revenues: Water sales and sewer rents 4,383,174 4,383,174 3,871,358 Other 93,726 300 94,026 254,861 - Charges for services 81,673 81,673 80,121 Total operating revenues 4,476,900 81,973 4,558,873 4,206,340 _ Operating expenses: Personal services 1,098,556 27,795 1,126,351 1,105,915 Supplies and other charges 4,077,954 95,261 4,173,215 3,397,754 _ Depreciation 709,041 77,113 786,154 718,525 Total operating expenses 5,885,551 200,169 6,085,720 5,222,194 Operating(loss) (807,918) (118,196) (926,114) (418,017) Non-operating revenues(expenses): Interest on investments 231,603 177,767 409,370 435,168 - Debt service (142,943) (142,943) (141,196) Special assessments 40,000 40,000 Loss on disposition of fixed assets (45,409) (45,409) _ Other 68,690 68,690 27,697 Total non-operating revenues (expenses) 151,941 177,767 329,708 321,669 - Income before operating transfers (655,977) 59,571 (596,406) (96,348) - Operating transfers out (75,000) (50,000) (125,000) (225,000) Total operating transfers (75,000) (50,000) (125,000) (225,000) • Net income before extrordinary item (730,977) 9,571 (721,406) (321,348) - Extraordinary gain on issuance of sewer availability charge credits 22,100 22,100 364,000 - Net income(loss) (708,877) 9,571 (699,306) 42,652 Credit arising from transfer of - depreciation on contributed capital 369,017 56,662 425,679 419,918 Retained earnings January 1 $11,929,746 $916,163 12,845,909 12,383,339 - Retained earnings December 31 $11,589,886 $982,396 $12,572,282 $12,845,909 See Accompanying Notes to Financial Statements 31 - Exhibit A-5 Continued CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES Year Ended December 31, 1995 With Comparative Totals for Year Ended December 31, 1994 Proprietary Fund Types Totals Internal (Memorandum Only) Enterprise Service 1995 1994 - Cash flows from operating activities: Operating income(loss) ($807,918) ($118,196) ($926,114) ($418,017) Adjustments to reconcile operating income(loss)to net cash flows from - operating activities: Depreciation 709,041 77,113 786,154 718,525 Changes in assets and liabilities: Decrease(increase) in receivables (330,417) 12,903 (317,514) 76,563 Decrease(increase) in due from other funds 232,148 390,301 622,449 (954,176) Decrease (increase) in inventories 93,214 93,214 (57,416) Decrease(increase)in prepaid items (19,877) (19,877) (34,463) Increase(decrease) in payables 148,427 (106,614) 41,813 59,288 Other non-operating income 68,690 68,690 27,697 Use of sewer availability charge credits 223,550 223,550 115,200 - Net cash flows from operating activities 316,858 255,507 572,365 (466,799) Cash flows from non-capital financing activities: Operating transfers out (75,000) (50,000) (125,000) (225,000) - Net cash flows from non-capital financing activities: (75,000) (50,000) (125,000) (225,000) Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (524,420) (63,866) (588,286) (1,167,515) Contributed Capital 812,285 Proceeds from sale of revenue bonds 335,000 Principal paid on revenue bonds (85,000) (85,000) (80,000) Interest and paying agent fees on revenue bonds (142,943) (142,943) (141,196) Special assessment collections 14,209 14,209 Net cash flows from capital and related financing activiti (738,154) (63,866) (802,020) (241,426) See Accompanying Notes to Financial Statements 32 Exhibit A-5 Continued CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES(CONTINUED1 Year Ended December 31, 1995 With Comparative Totals for Year Ended December 31, 1994 Proprietary Fund Types Totals Internal (Memorandum Only) Enterprise Service 1995 1994 — Cash flows from investing activities: Purchase of investment securities (2,029,336) Proceeds from sale of investment securities 456,903 1,649,768 2,106,671 Interest on investments 229,357 177,767 407,124 435,088 Interest received from MWCC 80 — Net cash flows from investing activities 686,260 1,827,535 2,513,795 (1,594,168) Net increase(decrease)in cash and cash — equivalents 189,964 1,969,176 2,159,140 (2,527,393) Cash and cash equivalents-January 1 4,881,456 5,077 4,886,533 7,413,926 Cash and cash equivalents-December 31 $5,071,420 $1,974,253 $7,045,673 $4,886,533 Non-cash investing, capital and financing activities: System assets of$53,783 were contributed by the Capital Projects Special Assessment Fund to the Public Utility Enterprise Fund in 1995. A receivable for sewer availability charge credits from Metropolitan Council Wastewater Services, in the amount of$22,100, was recognized in the Public Utility Enterprise Fund in 1995. Special assessments of$40,000 were levied to finance a portion of the 1994 Water, Sewer, and Storm Water Revenue Bonds. See Accompanying Notes to Financial Statements 33 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1995 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 .. co 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 and its 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. Complete financial statements of the HRA may be obtained from William W. Burns, Executive Director, 6431 University Avenue NE, Fridley, Minnesota 55432. The following governmental entities are not included in these financial statements since they do not meet the criteria contained in Statement 14: — Independent School District #11/Independent School District #13/Independent School District #14/Independent School District#16-These four school districts either reside wholly — within the City of Fridley or overlap within the city boundaries. According to Minnesota State Statutes, Minnesota school districts are totally independent of all other governing jurisdictions. The City has no authority to appoint board members and has no fiscal responsibility. School districts are able to levy taxes and issue debt in their own name. Fridley Volunteer Firefighters Relief Associations -These associations are organized as 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 Note 9 for disclosures relating to the pension plan operated by this organization.) 34 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 1. Summary of Significant Accounting 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. 35 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 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. 36 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 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. 37 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 1. Summary of Significant 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. Annual budgets are legally adopted for the General Fund, Special Revenue Funds and — Capital Improvement Capital Projects Funds. Formal budgeting integration is employed as a management control device during the year for each of these funds. Formal budgetary integration is not employed for Debt Service Funds because effective budgetary control is achieved through the bond indenture provisions. Budgetary control for other Capital Projects Funds is accomplished through the use of project controls. (See Note 16 for further information on budgeted and unbudgeted capital 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, Uabllltles 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. 38 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 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 and enterprise funds. This is classified as an interfund payable in the fund receiving the advance and as an offsetting interfund receivable in the internal service and enterprise funds. In accordance with authorized investment laws, the City invests in various mortgage- backed securities, such as collateralized mortgage obligations. These securities are reported at cost in the balance sheet. They are reported in aggregate as U.S. Government Agencies in the disclosure of custodial credit risk. (See Note 2 on investments). 2) Receivables Property Taxes The property tax levy was set by the City Council in November and was certified to the County for collection the following year. In Minnesota, counties act as collection agents for all property taxes. The County spreads the levies over all taxable property in the City. Such taxes become receivables of the City as of January 1. Property taxes are payable in equal installments by property owners to the County as follows: Personal property - February 28 and June 30 Real property - May 15 and October 15 The County remits the collections to the City and other taxing districts four times a year, in January, April, July and December. During 1995 taxes were adjusted downward $105,234 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 39 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 -, 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 40 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31. 1995 1. Summary of Significant 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. 41 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 — 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 uncollectibies as delinquent accounts are certified as a special assessment lien against the property billed. Unbilled service charges are included in receivables at year-end. — Other Revenues - Licenses, fines, penalties and miscellaneous revenues are recorded as revenues when received in cash because they are generally not measurable until actually received. -- Interest Expense on Bonded Indebtedness - Interest expense is recorded as an expenditure when paid in the governmental fund types and accrued when incurred in the proprietary fund — types. Bond and Interest Payments Due January 1 -Expenditures are recognized when amounts are remitted to the paying agent (usually in December) for payment of bonds and interest. H. Comparative Data Comparative total data for the prior year have been presented in the accompanying combined financial statements in order to provide an understanding of changes in the City's financial position and operations. However, comparative (i.e., presentation of prior year totals by fund — type) data have not been presented in all statements since their inclusion would make the statements unduly complex and difficult to read. Total columns on the combined statements are captioned 'Memorandum Only' to indicate that — they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or cash flows in conformity with generally accepted accounting principles. Interfund eliminations have not been made in the aggregation of this — data 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. 42 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) .... DECEMBER 31. 1995 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. Due to wire transfers and tax settlements credited by the bank at the end of the day, there were several occasions during the year where overnight deposits were undercollateralized. On each occasion, the uncollateralized balance was invested with another financial institution on the following day. Balances at December 31, 1995 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 $686,044 ($141,258) 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 $686,044 ($141,258) 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. 43 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 -. 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 invests in collateralized mortgage obligations (a form of mortgage back security). These securities allow cash flows to be split so that different classes of securities with different maturities and coupons may be created. The City by policy is only allowed to invest in these types of securities if they -. are classified as a Planned Amortization Class 1 (PAC 1) with a stated maturity of 3 years or less. The City's investments are categorized below to give an indication of the level of risk assumed at year end. The level of risk is defined by the following criteria set out by the Governmental Accounting Standards Board within Statement No. 3. Category 1 includes investments that are insured or registered for which the securities are held by the City or its agent in the City's name. Category 2 includes uninsured and unregistered investments for which the securities are held by the counterparty's trust department or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counterparty, or by its trust department or agent but not in the City's name. 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 $618,843 $618,843 $700,245 U.S. Government agencies — or instrumentalities 26,702,178 26,702,178 26,632,957 Commercial paper 5,044,367 5,044,367 5,044,367 $32,365,388 Investment in money market and mutual funds 7,496,714 7,496,843 Investment in deferred compensation plans(at market) 5,435,445 5,435,445 Total investments $45,297,547 $45,309,857 44 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 2. Deposits and Investments (Continued) Cash and Cash Equivalents and Investments per accompanying financial statement: Cash and cash equivalents $9,043,565 Investments 30,677,279 Total $39,720,844 3. Special Assessments Receivable Special assessments receivable at December 31, 1995 are as follows: Capital Special Special Improvements Assessment Public Assessment Capital Capital Utilities General Debt Service Projects Projects Enterprise Total Unremitted $ $7,056 $ $ $ $7,056 Delinquent 3,644 126,799 130 130,573 Deferred 1,026 1,889,066 12,320 44,263 27,907 1,974,582 Total $4,670 $2,022,921 $12,320 $44,263 $28,037 $2,112,211 45 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 -- 4. Due From Other Governments Amounts due from other governments at December 31, 1995 are as follows: General Fund: State of Minnesota: a) State Aid Mainenance $18,735 Anoka County: — a) Fines and Forfeits 11,692 b) Gas Reimbursement 258 c) Civil Defense 3,444 — City of Hilltop 18,625 School District#206 45 Total General Fund $52,799 Special Revenue Funds: Anoka County: a) Community Development Block Grant 96,706 — b) Recycling 51,959 Greater Minneapolis Council of Churches a) Title III 1,305 Total Special Revenue Funds $149,970 Capital Project Funds: Spring Lake Park Fire Department $20,000 —' Enterprise Funds: Metropolitan Waste Control Commission (MWCC)- Current portion of amounts due from MWCC 24,106 _ City of Coon Rapids 29,789 53,895 Metropolitan Waste Control Commission (MWCC)- Non-current portion - long term receivable of amounts due from MWCC $213,818 46 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 4. Due From Other Governments (Continued) The non-current receivable of $213,818 in the Utility Enterprise Fund is comprised of: 1. The balance due for the sale of the City's sewer interceptors is $97,828 (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 credits for excess sewer availability charges of$115,950 arising from the change in use of various properties within the City. These credits will be offset against current availability charges as they occur. 5. Changes In General Fixed Assets A summary of changes in general fixed assets are as follows: Balance Balance Jan 1, 1995 Additions Deletions Dec 31, 1995 Land $2,484,913 $ $ $2,484,913 Buildings 4,882,041 12,722 4,894,763 Improvements other than buildings 15,942,628 579,576 1,600 16,520,604 Machinery and equipment 4,911,298 574,908 56,613 5,429,593 Total $28,220,880 $1,167,206 $58,213 $29,329,873 47 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 6. Summary of Proprietary Fund Property and Equipment A summary of proprietary fund type property, plant and equipment at December 31, 1995 follows: Internal Service Enterprise Funds Funds Public Information — Liquor Utilities Systems Total Land $66,961 $154,531 $ $221,492 Buildings 130,211 1,529,236 $1,659,447 Improvements other than buildings 32,163 6,769,754 $6,801,917 Machinery and equipment 184,667 2,405,621 883,438 $3,473,726 Water and sewer lines 18,041,569 $18,041,569 414,002 28,900,711 883,438 $30,198,151 Less: Accumulated depreciation (216,885) (9,358,307) (638,848) ($10,214,040) Net property and equipment $197,117 $19,542,404 $244,590 $19,984,111 7. Long-Term Debt — The following is a summary of long-term debt transactions of the City for the year ended December 31, 1995: General Obligation Bonds Special Tax Construction Capital Assessment Increment Revenue Loan Lease Total Debt payable-January 1, 1995 $1,725,000 $15,465,000 $2,410,000 $127,857 $26,481 $19,754,338 Debt issued 4,090,000 $4,090,000 Debt retired (170,000) (4,360,000) (85,000) (3,926) (12,815) ($4,631,741) Debt payable-December 31, 1995 $1,555,000 $15,195,000 $2,325,000 $123,931 $13,666 $19,212,597 48 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 7. Long-Term Debt (Continued) Bonds payable at December 31, 1995 are comprised of the following individual issues (in thousands of dollars): General Long-Term Debt: $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% $ 1,620 $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% 685 $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% 720 $4,090,000 General Obligation Temporary Tax Increment Bonds of 1995, due on November 1, 1998; interest at 4.10% 4,090 $150,000 Special Assessment Bonds of 1994 due in varying annual installments of $5,000-$60,000 through February 1, 2005; interest at 4.75% to 6.10% 150 Subtotal General Long-Term Debt 16,750 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% 1,440 $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% 550 $150,000 General Obligation Water, Sewer and Storm Water Revenue Bonds of 1994 due in varying annual installments of $5,000-$25,000 through February 1, 2005; interest at 4.75% to 6.10% 335 Subtotal Revenue Bonds 2,325 Total Bonds Payable $ 19,075 49 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 7. Lona-Term Debt (Continued) Non-bonded indebtedness at December 31, 1995 is comprised of the following: 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% 124 .., Capital Lease $38,500 Sidewalk Snowplow Lease due in annual installments of $14,572 through January 1, 1996; interest at 6.63% 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 Revenue Bonds are payable from the net revenues of the City's water, sewer and storm water systems in addition to the general obligation pledge. Annual Requirements to Amortize Long-Term Debt December 31, 1995 General Obligation Bonds Year Ending Special Construction December 31 Assessment Redevelopment Revenue Loan Total 1996 254,067 1,297,990 252,567 12,301 $1,816,925 1997 260,220 1,296,525 251,645 12,301 $1,820,691 1998 245,719 5,386,595 250,245 12,301 $5,894,860 _ 1999 236,067 1,129,830 248,362 12,301 $1,626,560 2000 231,620 649,130 250,954 12,301 $1,144,005 2001 -2005 709,540 7,295,190 1,277,622 61,505 $9,343,857 2006-2010 5,725,180 847,494 61,505 $6,634,179 2011 -2012 144,760 24,598 $169,358 $1,937,233 $22,780,440 $3,523,649 $209,113 $28,450,435 $10,701,642 is available in the Debt Service Fund to service the Special Assessment and Redevelopment Bonds. $10,111,705 is available in the Public Utility Enterprise Funds, to service the Water, Sewer and Storm Water Revenue Bonds. 50 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 7. Long-Term Debt (Continued) 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, 1995, the legal debt margin was $22,199,532. 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, 1995, was $3,599,740 and $1,607,553, respectively; the City's total payroll was $6,410,816. 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 highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for 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 2.65 percent of average salary for each year of service. 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. A reduced retirement annuity is also available to .... eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A normal annuity is a lifetime annuity that ceases upon the death of the retiree. No survivor annuity is payable. There are also various types of joint and survivor annuity options available which will reduce the monthly normal annuity amount, because the annuity is payable over joint lives. Members may also leave their contributions in the fund upon termination of public service, in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active participants. Vested,terminated employees who are entitled to benefits, but are not receiving them yet, are bound by the provisions in effect at the time they last terminated their public service. 51 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 8. Defined Benefit Pension Plans-Statewide (Continued) 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 July 1, 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. The required contribution rate consists of (a) normal costs based on entry age normal cost methods, (b) a supplemental contribution for amortizing any unfunded actuarial accrued liability by the date required for full funding, and (c) an allowance for administrative expenses. Current combined statutory contribution rates and actuarially required contribution rates for the plans are as follows: Statutory Rates: Required Employees Employer Rates PERF: PERF(A blended rate for both the Basic and Coordinated plans 4.31% 4.60% 9.76% PEPFF 7.60% 11.40% 19.00% Total contributions made by the City during fiscal year 1995 were: ... Percentage of Amounts Covered Payroll Employees Employer Employees Employer PERF $158,153 $170,463 4.39% 4.74% PEPFF 122,174 183,261 7.60% 11.40% Total $280,327 $353,724 The City's contribution for the year ended June 30, 1995, to the PERF represented .12 percent of total contributions required of all participating entities. For the PEPFF, contributions for the year ended June 30, 1995, represented .60 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 is the actuarial present value of credited projected benefits and is intended to help users assess PERA's funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among Public Employees Retirement Systems and among employers. The measure is independent of the actuarial funding method used to determine required contributions, which is discussed in Section B. PERA does not make separate measurements of assets and pension benefit obligation for individual employers. 52 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 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, 1995, were as follows: Public Public Employees Employees Retirement Police& Fund Fire — (PERF)(in thousands)(PEPFF) Total pension benefit obligations $5,994,492 $1,113,225 Net assets available for benefits, at cost(Market values in thousands) PERF=$5,266,688 PEPFF=$1,445,345 5,074,357 1,356,179 Unfunded(assets in excess of) pension benefit obligation $920,135 ($242,954) The pension benefit obligation was determined as part of an actuarial valuation at July 1, 1995. For the PERF, significant actuarial assumptions used in the calculation of the pension benefit obligation include (a) a rate of return on the investment of present and future assets of 8.5 percent per year, compounded annually, prior to retirement, and 5 percent per year, compounded annually, following retirement; (b) projected salary increases taken from an age related table which incorporates a 5 percent base inflation assumption; (c) payroll growth at 6 percent per year, consisting of 5 percent for inflation "- and 1 percent due to growth in group size; (d) post-retirement benefit increases that are accounted for by the 5 percent rate of return assumption following retirement; and (e) mortality rates based on the 1983 Group Annuity Mortality Table set forward one year .... for retired members and set back five years for each active member. Actuarial assumption used in the calculation of the PEPFF include (a) a rate of return on the investment of present and future assets of 8.5 percent per year, compounded annually, prior to retirement, and 5 percent per year, compounded annually following retirement; (b) projected salary increases of 6.5 percent per year, compounded annually, attributable to the effects of inflation; (c)post-retirement increases that are accounted for — the 5 percent rate of return assumption following retirement; and (d) mortality rates based on the 1971 Group Annuity Mortality Table projected to 1984 for males and females. 53 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 8. Defined Benefit Pension Plans-Statewide (Continued) C. Funding Status and Progress (Continued) 2. Changes in Benefit Provisions — Since the July 1, 1994 actuarial valuation, there were no changes in actuarial assumptions of the PER and the PEPFF which impacted funding costs. 3. Changes in Actuarial Assumptions — Potential changes in the actuarial assumptions used for the pepff may be made in the future. Results of an experience study for the fund during the four-year period ending June 30, 1994. disclosed (a) retirees are living longer; (b) the expected active member death rate is declining; (c) the trend toward earlier retirement continues; and (d) the pattern of salary increases varies substantially by ages, with a strong merit and seniority component evident at the younger ages. Based on these results, PERA will soon consider revising the actuarial assumptions for retirement age, mortality, payroll growth, _ and individual salary increases. These changes, if adopted within fiscal year 1996, will significantly impact the July 1, 1996 actuarial valuation of the PEPFF. 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, 1995. 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, 1995, 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 1995 contribution rate was 7.65% (6.2% is social security and 1.45% is medicare) up to a maximum in wages of $61,200 for Social Security with no maximum in wages for Medicare. The cost of Social Security for 1995 was $250,490. 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 1995 cost for Medicare was $71,886. ... 54 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 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$6,410,816. 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 $76,077 and $72,741 in State Aid to the Association for 1995 and 1994 respectively. Currently the City does not levy any taxes on behalf of the Association. In the event that the state aid formulas would change, the City would pick up the shortfall. The contribution benefits for each member (and earnings allocated to each members account) are vested as follows: Years of 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 1995 and as of December 31, 1995 the Association held no securities issued by the City or other related parties. 55 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 10. Defined Benefit Pension Plan - Fridley Police Consolidation with Statewide Plan A. Plan Description The City of Fridley Police Relief Association, a single-employer public employee retirement — system consolidated with the Public Employees Retirement Association of Minnesota's (PERA) Police and Fire Consolidation Fund (PFCF), an agent multiple employer retirement plan, on November 30, 1993. 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. The City's payroll for employees covered by PFCF for the year ended December 31, 1995 was $415,308; the City's total payroll was $6,410,816. PFCF members have the option to choose benefits identical to these of the Public Employees Police & Fire Fund identified in Note 8; otherwise, they are covered by the benefit provisions of the relief association at the time of consolidation, which were as follows: -- 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. 56 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 10. Defined Benefit Pension Plan-Fridley Police Consolidation with Statewide Plan (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). 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 June 30, 1995. 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 8.5%per year compounded annually, (b) projected salary increases of 6.5% percent per year, compounded annually, attributable to the effects of inflation; (c) post- retirement increases that are accounted for the 5 percent rate of return assumption following retirement; and (d) mortality rates based on the 1971 Group Annuity Mortality Table projected to 1984 for males and females. 57 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 10. Defined Benefit Pension Plan-Fridley Police Consolidation with Statewide Plan (continued) B. Funding Status and Progress (Continued) As of June 30, 1995 and 1994, the actuarial valuation dates, the unfunded pension benefit — obligation was determined as follows: 1995 1994 Pension Benefit Obligation: Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits $449,334,670 $424,962,253 Current employees— Accumulated employee contributions including allocated investment income 48,901,438 46,999,428 Employer financed 224,538,159 232,175,496 Total Pension Benefit Obligation $722,774,267 $704,137,177 Net assets available for benefits, at cost (market value was$682,337,000 for 1995 and$625,954,602 for 1995) 671,829,079 642,171,920 Unfunded Pension Benefit Obligation $50,945,188 $61,965,257 Net assets available/Pension benefit obligation 92.95% 91.20% No changes in actuarial assumptions or benefit provisions that would significantly affect the valuation of the pension benefit obligation occurred during 1995. C. 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 PFCF 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. Contributions actuarially required are equal to contributions made due to the additional municipal contribution, if any, paid by the employer. Current combined statutory contribution rates and actuarially required contribution rates for the PFCF are 7.60% for the employee and 11.40% for the employer. Total contributions made by the City and its employees for the year ended December 31, 1995, were $47,345 and $31,563 respectively. The contributions represented 11.40% and 7.60% of covered payroll. The City contributions for the year ended December 31, 1995 represented .37% of the total contributions required of all participating entities. 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. 58 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) -- DECEMBER 31. 1995 11. Interfund Receivables and Payables Interfund receivables and payables at December 31, 1995 are as follows: Interfund Interfund _ Receivables Payables Due From/Due To: ._ General Fund $ $886,818 Special Revenue Funds Grant Management Fund 88,622 HRA Reimbursement Fund 388 388 Capital Projects Funds Special Assessment Fund 699,878 HRA Fund 3,700 Enterprise Funds Public Utilities Fund 3,312 Internal Service Funds Self Insurance Fund 1,675,706 $1,679,406 $1,679,406 59 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 12. Reserved Fund Balances/Retalned Earnings The following reservations have been made of various fund balances/retained earnings at December 31, 1995. General Fund Reserved for: Encumbrances $52,669 — Inventory 25,147 Prepaid items 11,539 Long-term receivables 142,693 232,048 Special Revenue Funds Reserved for: Encumbrances 7,289 Long-term receivables 88,423 95,712 Debt Service Funds Reserved for Debt Service 1,370,587 Capital Projects Funds Reserved for: Encumbrances 1,324,272 Construction 5,465,031 Long-term receivables 1,135,647 7,924,950 Total Governmental Funds $9,623,297 Retained Earnings Enterprise Funds Public Utilities Funds Reserved for capital outlay $3,500,340 Internal Service Funds Employee Benefits Fund Reserved for employee benefits 66,953 Information Systems Fund Reserved for equipment acquisition 164,822 231,775 Total Proprietary Funds $3,732,115 60 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 13. Designated Fund Balance The following designations have been made of various fund balances at December 31, 1995: General Fund: Working Capital $3,938,021 Subsequent Year's Expenditures 395,367 Contingencies 979,048 Replacement of Fixed Assets 1,122,648 Total General Fund 6,435,084 Special Revenue Funds: Cable TV Fund- Subsequent Year's Expenditures 21,766 Cable TV Program 117,135 Grant Management Fund- Subsequent Year's Expenditures 5,659 Solid Waste Abatement Fund Subsequent Year's Expenditures 10,154 Solid Waste Abatement 39,012 Drug and Gambling Forfeiture Fund Drug and Gambling Enforcement 9,918 Total Special Revenue Funds 203,644 Capital Projects Funds: Capital Improvement Fund- — Replacement of Fixed Assets 1,701,913 Park Improvement 743,026 Street Improvements 4,715,711 Total Capital Project Fund 7,160,650 Total of Designated Fund Balances 13,799,378 14. Contributed Capital A reconciliation of contributed capital is as follows: Public Utility Self Insurance Information Systems Enterprise Fund Internal Service Fund Internal Service Fund Balance January 1 $12,591,797 $1,000,000 $1,008,743 Increases _ Current capital contributions 53,782 Decreases Depreciation of contributed assets (369,017) (56,662) Balance December 31 $12,276,562 $1,000,000 $952,081 61 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 -, 15. Segment Information for Enterprise Funds The City maintains operating funds for Liquor and Utility (Water, Sewer, Storm Sewer Operations). Segment information for the year ended December 31, 1995 is as follows: Total Enterprise Liquor Utility Funds Sales(less cost of sales of$2,472,464) $600,733 $ $600,733 Operating revenues 4,476,900 4,476,900 Operating expenses (601,999) (5,283,552) (5,885,551) Operating income(loss) (1,266) (806,652) (807,918) Non-operating revenues (expenses) - net 15,352 136,589 151,941 Operating transfers in (out) (75,000) (75,000) Net income(loss) ($60,914) ($670,063) ($730,977) Depreciation expense included in operating expenses $30,966 $678,075 $709,041 Property and equipment- Additions(including capital contributions) 1,029 577,173 578,202 Working capital 1,281,064 4,814,138 6,095,202 Total assets 1,693,105 25,344,201 27,037,306 Fund equity- Contributed capital 12,276,562 12,276,562 Retained earnings 1,478,181 10,111,705 11,589,886 Total fund equity $1,478,181 $22,388,267 $23,866,448 Current capital contributions $53,783 $53,783 Bonds payable $2,325,000 $2,325,000 62 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 16. Unbudgeted Capital Prolect Funds The City does not budget all Capital Project Funds, and accordingly, the applicable columns of the Combined Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Exhibit A-3) excludes amounts relating to unbudgeted funds. A reconciliation of actual results for budgeted and unbudgeted funds is as follows: Other Financing Fund Balance Sources December 31, -� Revenues Expenditures (Uses) 1995 All Capital Project Funds $4,611,350 $5,922,283 ($1,774,990) $14,437,359 Less unbudgeted funds: Special Assessment Fund 330,111 363,943 (40,370) (648,241) HRA Fund 3,523,083 4,969,952 (1,626,526) 6,600,678 Budgeted Capital Project Funds $758,156 $588,388 ($108,094) $8,484,922 17. Deferred Compensation Plan The City and Housing and 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, 1995, are$5,440,158 and$13,287 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'. 63 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 -, 18. Risk Management The City is exposed to various risks of loss related torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. During 1987, the City established the Self Insurance Fund (an Internal Service Fund)to account for and finance its uninsured risks of loss. — The Self Insurance Fund provides coverage for up to a maximum of $50,000 for each liability and property claim with an annual aggregate of $100,000 for all claims. The city purchases insurance through the League of Minnesota Cities Insurance Trust for claims in excess of coverage provided by the fund and for all other risks of loss. The City's workers compensation insurance policy is retrospectively rated. With this type of policy,final premiums are determined after loss experience is known. The amount of premium adjustment, if any, is not reasonable estimable and is not recorded until received or paid. In 1990, the General Fund contributed $1,000,000 to the Self Insurance Fund in lieu of the Self Insurance Fund charging losses back to each fund. There is no claims liability reported at December 31, 1995, since the requirements of Governmental Accounting Standards Board Statement Number 10 have not been met. This Statement requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount can be reasonably estimated. As of December 31, 1995,the Self Insurance Fund has accumulated equity in the amount of$1,750,621 ..., to cover future claims and losses. 19. Leases Operating Lease The City leased property at 214 Mississippi from the Fridley Housing and Redevelopment Authority for -, a warehouse liquor store. On August 1, 1995, the Housing Redevelopment Authority exercised its authority to terminate the lease. The City subsequently relocated its warehouse liquor store to Holly Shopping Center by entering into a lease with the management of the center. The Lease terminates February 29, 1996. Total rental expense for 1995 was $36,850. Capital Lease The City has entered into a lease agreement as lessee for financing the acquisition of a sidewalk snowplow. This lease agreement qualifies as a capital lease, and therefore,the sidewalk plow has been recorded as machinery and equipment in the General Fixed Asset Account Group at the present value of future minimum lease payments. The future minimum lease obligation and net present value of these minimum lease payments as of December 31, 1995 are as follows: 1996 14.572 Total lease payments $14,572 Less amount representing interest (906) ..., 13666 64 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 20. Deficit Balances The following fund had a deficit balance at December 31, 1995: Capital Project Funds: Special Assessments ($648,241) _ 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 $244,098 $842,997 $598,899 $ $598,899 1981 2 71,890 804,632 732,742 75 732,667 1982 3 244,444 1,687,574 1,443,130 317,389 1,125,741 1985 6 1986 7 10,960 79,328 68,368 68,368 1986 8 27,713 34,740 7,027 7,027 -- 1989 9 942,222 858,865 1991 11 61,952 94,983 33,031 33,031 1992 12 106,711 183,670 76,959 76,959 r.. 1995 13 1995 14 $1,709,990 $4,586,789 $2,960,156 $317,464 $2,642,692 All debt issued is pooled debt. Total bonds issued are$46,695,000. Total amount of bonds redeemed are $31,500,000. Outstanding bonds at December 31, 1995, are $15,195,000. All taxable value is currently retained by the Housing and Redevelopment Authority. 22. Contingent Uability In 1993, the Housing and Redevelopment Authority (HRA) entered into a limited tax increment revenue note with a developer whereby the HRA shall pay the developer the lesser of the scheduled payment or available tax increment. Whether a payment will occur and if so, the amount of the payment are uncertain since all payments are dependent on the HRA receiving tax increments from the developer's project. As such, this liability has not been recorded in the financial statements. At December 31, 1995, the maximum possible payment to the developer was $1,478,207. 65 CITY OF FRIDLEY. MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31. 1995 23. Prior Period Adjustment In 1994, the City incorrectly recorded the amount payable to its health insurance provider. To correct this error, the January 1, 1995 General Fund fund balance has been corrected. The effect of this correction is to reduce the General Fund fund balance by$22,462 from the previously reported amount of $7,134,694 to $7,112,132. General Fund accounts payable for 1994 were increased by $22,562 due to this correction. 24. Subsequent Event On February 1, 1996, the City and the management of Holly Shopping Center agreed to extend the lease on the liquor store space through February 1, 1997. All terms remained the same except for the monthly rent which was reduced from $4,850 to $3,850. -- l 66 GENERAL FUND The General Fund was established to account for the revenues and expenditures necessary to carry out basic governmental activities of the City, such as general government, public safety, and public works. Revenues are recognized by source, such as property taxes, licenses and permits, fines and forfeits, charges for services and state-shared taxes. General Fund expenditures are made primarily for current day to day operations and are recorded by functional classifications and by operating departments. This fund accounts for all financial transactions not accounted for in another fund. Exhibit B-1 CITY OF FRIDLEY. MINNESOTA GENERAL FUND COMPARATIVE BALANCE SHEET December 31, 1995 and 1994 1995 1994 Assets Cash and cash equivalents $578 $994 Investments 7,608,168 6,969,899 Receivables: Accounts 26,867 30,220 Taxes- Unremitted 45,935 17,220 Delinquent 79,570 28,795 Special Assessments- Delinquent 3,644 3,695 Deferred 1,026 1,182 Interest 209,405 331,603 Loans 6,300 6,300 Developer note 136,393 137,962 Due from other governments 52,799 46,068 Inventories, at cost 25,147 21,992 Prepaid items 11,539 97,779 Total assets $8,207,371 $7,693,709 Liabilities and Fund Balance Liabilities: Accounts payable $241,840 $138,418 Deposits payable 16,088 3,478 Salaries payable 170,881 126,128 Deferred revenue 84,295 35,528 Due to other governments 9,011 5,858 Due to other funds 886,818 249,605 Total liabilities 1,408,933 559,015 _ Fund balance: Reserved for encumbrances 52,669 67,431 Reserved for inventory 25,147 21,992 Reserved for prepaid items 11,539 97,779 Reserved for long-term receivables 142,693 144,262 Unreserved - ,_ Designated for working capital 3,938,021 3,742,506 Designated for contingencies 979,048 1,016,720 Designated for subsequent year's expenditures 395,367 820,753 Designated for fixed asset replacement 1,122,648 994,935 Undesignated 131,306 228,316 Total fund balance 6,798,438 7,134,694 Total liabilities and fund balance $8,207,371 $7,693,709 67 - Exhibit B-2 CITY OF FRIDLEY. MINNESOTA GENERAL FUND STATEMENT OF REVENUES. EXPENDITURES.AND _ CHANGES IN FUND BALANCE-BUDGET AND ACTUAL Year Ended December 31. 1995 With Comparative Actual Amounts for Year Ended December 31, 1994 _ 1995 Variance Favorable 1994 Budget Actual (Unfavorable) Actual Revenues: Taxes $3,564,705 $3,650,088 $85,383 $3,529,356 Special assessments 2,444 959 (1,485) 3,975 - Licenses and permits 463,435 458,180 (5,255) 439,237 Intergovernmental revenue 3,108,753 3,176,728 67,975 3,109,846 Charges for services 820,248 868,368 48,120 892,471 Fines and forfeits 221,867 183,165 (38,702) 184,024 - Interest on investments 515,000 435,917 (79,083) 402,563 Miscellaneous 116,440 168,713 52,273 185,196 Total revenues 8,812,892 8,942,118 129,226 8,746,668 _ Expenditures: Current- General government 1,773,424 1,668,392 105,032 1,630,467 -" Public safety 3,935,538 3,821,230 114,308 3,549,978 Civic center 201,845 195,949 5,896 180,104 Public works 2,245,699 2,186,984 58,715 2,144,797 - Community development 540,695 530,230 10,465 462,615 Recreation and naturalist 854,641 850,329 4,312 780,242 Reserve for contingency 75,900 75,900 Capital outlay 394,402 379,652 14,750 274,929 Debt Service 14,572 14,572 14,572 Total expenditures 10,036,716 9,647,338 389,378 9,037,704 Excess(deficiency)of revenues over expenditures (1,223,824) (705,220) 518,604 (291,036) Other financing sources(uses): Capital Lease Obligation 38,500 Issuance of Long Term Note Receivable 9,414 - Operating transfers in 391,526 391,526 473,414 Total other financing sources(uses) 391,526 391,526 521,328 Excess(deficiency)of revenues and other financing sources over expenditures and other financing uses (832,298) (313,694) 518,604 230,292 - Fund balance January 1, as previously reported 7,134,694 7,134,694 6,904,402 - Prior Period Adjustment (22,562) (22,562) Fund balance January 1, as restated 7,112,132 7,112,132 6,904,402 Fund balance December 31 $6,279,834 $6,798,438 $518,604 $7,134,694 -- 68 Exhibit B-3 Continued - CITY OF FRIDLEY. MINNESOTA GENERAL FUND SCHEDULE OF REVENUES AND OTHER FINANCING SOURCES-BUDGET AND ACTUAL - Year Ended December 31. 1995 With Comparative Actual Amounts for Year Ended December 31, 1994 1995 Variance - Favorable 1994 Budget Actual (Unfavorable) Actual - Taxes and special assessments: Current ad valorem taxes $3,489,601 $3,532,811 $43,210 $3,505,354 Delinquent ad valorem taxes 40,000 72,497 32,497 5,246 - Penalties and interest 30,604 13,288 (17,316) 17,335 Forfeited sale-taxes 4,500 31,492 26,992 1,421 Special assessments 2,444 959 (1,485) 3,975 - Total taxes and special assessments 3,567,149 3,651,047 83,898 3,533,331 - Licenses and permits: Licenses- Contractor 13,468 10,745 (2,723) 10,910 -- Business 67,640 62,269 (5,371) 67,759 All other 67,344 60,796 (6,548) 76,199 Permits 314,983 324,370 9,387 284,369 - Total licenses and permits 463,435 458,180 (5,255) 439,237 Intergovernmental revenue: - Civil defense 4,562 7,898 3,336 4,206 State maintenance aid 200,000 187,353 (12,647) 191,698 State credits 1,067,981 1,076,582 8,601 1,065,611 - Local government aid 1,584,149 1,577,235 (6,914) 1,558,917 Other state grants 44,861 44,861 31,218 Police and fire pension 246,514 277,211 30,697 250,410 _ Other 5,547 5,588 41 7,786 Total intergovernmental revenue 3,108,753 3,176,728 67,975 3,109,846 Charges for services: - General government 579,241 598,116 18,875 642,034 Public safety 63,218 84,752 21,534 70,418 Conservation of health 2,917 3,334 417 3,477 - Recreation 174,872 182,166 7,294 176,542 Total charges for services 820,248 868,368 48,120 892,471 - Fine and forfeits 221,867 183,165 (38,702) 184,024 Interest on investments 515,000 435,917 (79,083) 402,563 (Continued) 69 Exhibit B-3 Continued CITY OF FRIDLEY, MINNESOTA - GENERAL FUND SCHEDULE OF REVENUES AND OTHER FINANCING SOURCES- BUDGET AND ACTUAL Year Ended December 31. 1995 - With Comparative Actual Amounts for Year Ended December 31, 1994 1995 Variance Favorable 1994 - Budget Actual (Unfavorable) Actual Miscellaneous revenue: Rent income $4,806 $2,962 ($1,844) $5,045 Sale of property 16,783 13,333 (3,450) 26,832 Donations 30,986 31,026 40 38,335 - Miscellaneous 63,865 121,392 57,527 114,984 Total miscellaneous revenue 116,440 168,713 52,273 185,196 Total revenues 8,812,892 8,942,118 129,226 8,746,668 Other financing sources: - Capital Lease Obligation 38,500 Issuance of Long Term Note Receivable 9,414 Operating transfers in - - Employee Benefit Fund 50,000 50,000 200,000 Liquor Fund 75,000 75,000 25,000 Special Assessment Debt Service Fund 266,526 266,526 248,414 Total other financing sources 391,526 391,526 521,328 Total revenues and other - financing sources $9,204,418 $9,333,644 $129,226 $9,267,996 70 Exhibit B-4 CITY OF FRIDLEY. MINNESOTA GENERAL FUND - SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES-BUDGET AND ACTUAL Year Ended December 31. 1995 With Comparative Actual Amounts for Year Ended December 31, 1994 - 1995 _ Variance Favorable 1994 Budget Actual (Unfavorable) Actual - General government: _ Mayor and Council - Personal services $52,370 $50,860 $1,510 $48,825 Supplies and other charges 47,958 34,439 13,519 36,792 100,328 85,299 15,029 85,617 - Planning commission - Supplies and other charges 3,461 606 2,855 181 - 3,461 606 2,855 181 Other commissions- Supplies and other charges 6,617 3,741 2,876 9,145 - 6,617 3,741 2,876 9,145 City manager- - Personal services 258,777 255,152 3,625 243,805 Supplies and other charges 51,818 51,818 41,994 310,595 306,970 3,625 285,799 Personnel - Personal services 82,450 77,255 5,195 78,337 - Supplies and other charges 14,442 11,473 2,969 8,449 96,892 88,728 8,164 86,786 Legal - - Supplies and other charges 223,418 223,418 238,891 223,418 223,418 238,891 - Elections- Personal services 5,294 5,294 26,641 Supplies and other charges 884 884 1,764 .- 6,178 6,178 28,405 Accounting- - Personal services 446,358 446,358 414,747 Supplies and other charges 72,974 72,974 65,240 519,332 519,332 479,987 Assessing- Personal services 127,783 120,206 7,577 122,720 - Supplies and other charges 12,619 6,912 5,707 7,000 140,402 127,118 13,284 129,720 .- (Continued) 71 Exhibit B-4 CITY OF FRIDLEY. MINNESOTA Continued GENERAL FUND _ SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES-BUDGET AND ACTUAL Year Ended December 31. 1995 With Comparative Actual Amounts for Year Ended December 31, 1994 1995 Variance Favorable 1994 Budget Actual (Unfavorable) Actual MIS- Personal services $99,093 $95,568 $3,525 $92,403 Supplies and other charges 60,262 59,092 1,170 53,416 159,355 154,660 4,695 145,819 City clerk/records- Personal services 93,935 89,355 4,580 84,507 Supplies and other charges 10,774 7,222 3,552 6,170 _ 104,709 96,577 8,132 90,677 Nondepartmental - - Personal services 4,967 4,967 1,166 Supplies and other charges 97,170 50,798 46,372 48,274 102,137 55,765 46,372 49,440 Total general government 1,773,424 1,668,392 105,032 1,630,467 Public safety: Police- Personal services 2,815,631 2,732,931 82,700 2,593,585 Supplies and other charges 312,715 303,875 8,840 290,004 _ 3,128,346 3,036,806 91,540 2,883,589 Fire- Personal services 602,320 581,183 21,137 548,568 Supplies and other charges 107,388 107,388 101,142 709,708 688,571 21,137 649,710 Rental Inspections- Personal services 78,110 78,110 7,234 _ Supplies and other charges 9,740 8,561 1,179 2,742 87,850 86,671 1,179 9,976 - Civil defense- Supplies and other charges 9,634 9,182 452 6,703 9,634 9,182 452 6,703 Total public safety 3,935,538 3,821,230 114,308 3,549,978 (Continued) 72 CITY OF FRIDLEY. MINNESOTA Exhibit B-4 GENERAL FUND Continued - SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES- BUDGET AND ACTUAL Year Ended December 31. 1995 With Comparative Actual Amounts for Year Ended December 31, 1994 - 1995 Variance Favorable 1994 Budget Actual (Unfavorable) Actual - Municipal center: Personal services $29,304 $23,408 $5,896 $22,529 Supplies and other charges 172,541 172,541 157,575 Total municipal center 201,845 195,949 5,896 180,104 Public works: Engineering- _ Personal services 421,686 419,472 2,214 384,280 Supplies and other charges 53,332 53,332 56,599 475,018 472,804 2,214 440,879 Public works and Parks: Personal services 1,052,127 1,015,125 37,002 987,195 Supplies and other charges 718,554 699,055 19,499 716,723 1,770,681 1,714,180 56,501 1,703,918 Total public works 2,245,699 2,186,984 58,715 2,144,797 "" Community Development: Building inspection Personal services 97,783 87,318 10,465 83,544 - Supplies and other charges 115,134 115,134 91,984 212,917 202,452 10,465 175,528 '" Planning- Personal services 254,598 254,598 232,373 Supplies and other charges 73,180 73,180 54,714 "" 327,778 327,778 287,087 Total community development 540,695 530,230 10,465 462,615 Recreation and Naturalist: Recreation - _ Personal services 437,454 436,401 1,053 391,317 Supplies and other charges 161,496 160,425 1,071 149,871 598,950 596,826 2,124 541,188 (Continued) 73 - Exhibit B-4 CITY OF FRIDLEY. MINNESOTA Continued GENERAL FUND - SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES- BUDGET AND ACTUAL Year Ended December 31, 1995 With Comparative Actual Amounts for Year Ended December 31, 1994 - 1995 Variance Favorable 1994 Budget Actual (Unfavorable) Actual Naturalist- Personal services $186,833 8184,896 $1,937 $178,154 _ Supplies and other charges _ 68,858 68,607 251 60,900 255,691 253,503 2,188 239,054 - Total recreation and naturalist 854,641 850,329 4,312 780,242 Reserve for contingency- 75,900 75,900 - Capital outlay expenditures- City manager 2,000 603 1,397 Personnel 700 700 _ Accounting 1,126 1,126 600 MIS 2,500 2,500 City clerk/records Police 81,108 77,361 3,747 95,851 Fire 11,946 11,946 42,625 Rental inspections 6,314 Municipal center 10,540 10,052 488 4,433 Building inspection 1,526 Planning 3,847 Engineering 21,564 21,268 296 552 Public works 244,277 240,416 3,861 106,416 Naturalist 11,261 8,802 2,459 3,585 Recreation 7,380 5,578 1,802 9,180 Total capital outlay 394,402 379,652 14,750 274,929 Debt service- - Principal 12,816 12,816 12,018 Interest 1,756 1,756 2,554 Total debt service 14,572 14,572 14,572 Total expenditures $10,036,716 $9,647,338 $389,378 $9,037,704 74 4•T tt r ,F 'a ii s , .: _ tA�t R TT£' •�. t 4 aJ w i SPECIAL REVENUE FUNDS 4 K 'fkr "�� .. i .' s r '� -� s.<3 Yt wit ms's R t ; Special Revenue Funds are used to account for` revenues.derived -from°specific taxes or ot,er R ="r earmarked revenue sources. They are usually required by statute, charter provision or local ordinance r F & to finance,particular governmental functions or'.act v�ties = ,., , ' t p� r P r q, } x�'a �ltgFL�3,fi t Cable TV Fund y h 4'�:„:. ”-� ' d ,( { S $ r 4 _k VX :� Y frs.lk"1Y3� e�il Ah,z f l , This fund receives revenues from the issuance of"a franchise agreement with;the cable TV provider�.#4l f These revenues are used for the operation and maintenance of a government acces's channel t ' ti'! Grant Management Fund it x , e o `'�' s ,1 •`r ,i "' tT-1s,st-, ez.vr* .' was Ala �, r '' .-'k This fund administers.grants. received,'''..:'.f rom ,a variety of intergovernmental agencies W' M mosfscases, i,, '{ grant funds are provided on a'reimbursement basis following proper documentation;of expenditures, ;, , y- x � Y r' however, in some cases the money is provided in advance to be spent on specific activities outlmedt. . in the grant. k, � , _ ,a` .- } s , AEA rr 1 A t h ,,�Y Y A F i k�� Salad Waste Abatement Fund m q t k.r,., z .j °. t iA'7 ;.',rk:•gf.. is 17Jy 'flay wkx` .N 1-,;*t&^ ;, F'',16,' i "�S F .,.� % ',. .? .�' ?` � '' h''`- Yh a.y`lav Y�-ce•,.t xp�' s5 � s�E This fund receives grants, recycling" fees and yard waste fees ,t These revenues finance the�City's �,t .r ' curbside recycling pickup and operation of the yard waste transfer site "r old w A.. k< „ y' »" y` ii,,,,,,,k. . ; . '.s -e,qr "Z., '' i.e,' k ,tY4't" &h§Drud and Gambling Forfeitur Fund d, .:;c� r i1, y.>s ru -hf'"�.. ^s r 4ya; xt' ' y �,gg " �+r�'�,i;' � ' y ,, N .. sv w t• ' This fund receives forfeited property in,connection with illegal gambling or drug activity„ Pursuant toI`� ? 1 Minnesota fatales the proceeds, are disbursed equally'`between J.:,-_e h investigating agency and the ' . Y i prosecuting agency. " ' "' , HRA Reimbursement Fund , V °* f , �`p _� '�� ` This-fu nd 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. " ` y � - HRA Housing Fund ¢i ,i4 $� � sj ` This fund receives tax increments in order to administer,the Housing and Redevelopment Authority ,- `� housing rehabilitation programs. The HRA has'targeted;the removal `of blighted property and IoW , '' interest improvement loans to older houses as major housing issues for the City h , " �, 4 Housing Revitalization Fund '� hi " ' � L This fund receives revenues to administer the"City.Council s pnonty of improving housing rehabilitation , programs to revitalize aging neighborhoods n the community t i f 0,.} h ;� ;' $pai`a d . . x 3 �`7 �' F ", —'4 tai ' fig i�,¢ d j �J M.'„ '}y 8�y u .. ' ' z s ° '�� s + si , +�° CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET - December 31, 1995 With Comparative Totals for December 31, 1994 Solid Waste Cable Grant Abatement - TV Management Fund Assets - Cash and cash equivalents $10,296 $ $ Investments 139,164 11,705 - Receivables: Accounts 32,172 589 13,378 Mortgages- deferred - Due from other funds Due from other governments 98,011 51,959 Total assets $181,632 $98,600 $77,042 Liabilities and Fund Balance Liabilities: - Accounts payable $17,916 $2,694 $27,115 Deposits payable 10,296 Salaries payable 351 1,225 761 - Deferred revenue 7,279 Due to other funds 88,622 Due to other governments Total liabilities 35,842 92,541 27,876 Fund balance: - Reserved - Reserved for encumbrances 6,889 400 Reserved for long-term receivables - Unreserved- Designated for subsequent year's expenditures 21,766 5,659 10,154 - Designated for special revenue programs 117,135 39,012 Total fund balance 145,790 6,059 49,166 Total liabilities and fund balance $181,632 $98,600 $77,042 76 Exhibit C-1 Drug& Gambling HRA Forfeiture HRA Housing Totals Reimbursement Fund Housing Revitalization 1995 1994 $ $ $6,966 $ $17,262 $28,077 9,918 160,787 168,118 46,139 36,646 88,423 88,423 6,614 388 388 12,677 149,970 188,258 $388 $9,918 $95,389 $0 $462,969 $440,390 $ $ $5,165 $52,890 $44,905 10,296 85,500 1,801 4,138 2,663 7,279 388 89,010 84,022 121 388 0 6,966 163,613 217,211 7,289 3,186 88,423 88,423 6,614 37,579 48,763 9,918 166,065 164,616 9,918 88,423 299,356 223,179 $388 $9,918 $95,389 $0 $462,969 $440,390 77 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUNDS — COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Year Ended December 31, 1995 With Comparative Totals for Year Ended December 31, 1994 — Solid Waste Cable Grant Abatement TV Management Fund Revenues: Charges for services $ $ $146,680 — Fines and forfeits Licenses and permits 96,002 Intergovernmental revenue 250,824 82,980 — Interest on investments 7,797 Miscellaneous 24 2,441 Total revenues 103,799 250,848 232,101 — Expenditures: Current - General government 95,423 248,225 420,192 Public safety Capital outlay 12,272 4,024 Total expenditures 107,695 252,249 420,192 Excess(deficiency) of revenues over expenditures (3,896) (1,401) (188,091) Other financing sources(uses): — Operating transfers in 188,221 Total other financing sources(uses) 188,221 Excess(deficiency)of revenues and other financing sources over expenditures and other financing uses (3,896) (1,401) 130 Fund balance January 1 149,686 7,460 49,036 Fund balance December 31 $145,790 $6,059 $49,166 78 Exhibit C-2 Drug & - Gambling HRA Forfeiture HRA Housing Totals Reimbursement Fund Housing Revitalization 1995 1994 - $ $ $ $ $146,680 $146,392 277 277 1,396 96,002 88,874 - 13,741 347,545 380,850 462 8,259 8,613 52,952 55,417 2,312 - 13,741 277 53,414 654,180 628,437 13,741 202,582 3,408 983,571 730,672 2,834 742 252,553 269,591 437,625 13,741 742 455,135 3,408 1,253,162 1,171,131 (465) (401,721) (3,408) (598,982) (542,694) 483,530 3,408 675,159 540,705 483,530 3,408 675,159 540,705 - (465) 81,809 76,177 (1,989) 10,383 6,614 223,179 225,168 $0 $9,918 $88,423 $0 $299,356 $223,179 79 Exhibit C-3 CITY OF FRIDLEY, MINNESOTA CABLE TV SPECIAL REVENUE FUND — COMPARATIVE BALANCE SHEET December 31, 1995 and 1994 1995 1994 Assets Cash and cash equivalents $10,296 $10,000 — Investments 139,164 135,862 Accounts receivable 32,172 23,401 Total assets $181,632 $169,263 Liabilities and Fund Balance Liabilities: — Accounts payable $17,916 $9,137 Deposits payable 10,296 10,000 Salaries payable 351 319 — Due to other governments 121 Deferred revenue 7,279 Total liabilities 35,842 19,577 — Fund balance: Reserved for encumbrances 6,889 2,669 Unreserved - Designated for subsequent year's expenditures 21,766 29,832 Designated for cable TV program 117,135 117,185 — Total fund balance 145,790 149,686 Total liabilities and fund balance $181,632 $169,263 — 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, 1995 With Comparative Amounts for Year Ended December 31, 1994 1995 Variance - Favorable 1994 Budget Actual (Unfavorable) Actual Revenues: Licenses -franchise fee $91,105 $96,002 $4,897 $88,874 - Interest on investments 20,977 7,797 (13,180) 8,613 Miscellaneous 1,667 Total revenues 112,082 103,799 (8,283) 99,154 Expenditures: Current - General government- Personal services 41,961 39,215 2,746 38,020 Supplies and other charges 56,208 56,208 49,079 - Capital outlay 17,325 12,272 5,053 16,146 Total expenditures 115,494 107,695 7,799 103,245 - Excess(deficiency)of revenues over expenditures (3,412) (3,896) (484) (4,091) - Fund balance January 1 149,686 149,686 153,777 Fund balance December 31 $146,274 $145,790 ($484) $149,686 81 Exhibit C-5 CITY OF FRIDLEY, MINNESOTA GRANT MANAGEMENT SPECIAL REVENUE FUND — COMPARATIVE BALANCE SHEET December 31, 1995 and 1994 1995 1994 Assets Accounts receivable $589 $263 — Due from other funds 12,411 Due from other governments 98,011 159,673 Total assets $98,600 $172,347 — Liabilities and Fund Balance Liabilities: Accounts payable $2,694 $17,942 Deposits payable 75,000 — Salaries payable 1,225 700 Due to other funds 88,622 71,245 Total liabilities 92,541 164,887 — Fund balance: Reserved - — Reserved for encumbrances 400 517 Unreserved - Designated for subsequent year's expenditures 5,659 6,943 — Total fund balance 6,059 7,460 Total liabilities and fund balance $98,600 $172,347 — 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, 1995 — With Comparative Amounts for Year Ended December 31, 1994 1995 Variance _ Favorable 1994 Budget Actual (Unfavorable) Actual — Revenues: Intergovernmental revenue- Federal $250,299 $247,585 ($2,714) $315,861 State 1,950 2,039 89 1,573 Other 1,200 1,200 Donations 24 24 392 — Total revenues 252,249 250,848 (1,401) 317,826 Expenditures: Current General government - Personal services 51,299 51,299 45,908 — Supplies and other charges 196,926 196,926 266,303 Capital outlay 4,024 4,024 Total expenditures 252,249 252,249 312,211 — Excess(deficiency)of revenues over expenditures (1,401) (1,401) 5,615 Fund balance January 1 7,460 7,460 1,845 Fund balance December 31 $7,460 $6,059 ($1,401) $7,460 83 Exhibit C-7 CITY OF FRIDLEY, MINNESOTA SOLID WASTE ABATEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET — December 31, 1995 and 1994 1995 1994 Assets Investments $11,705 $21,873 Accounts receivable 13,378 12,982 Due from other governments 51,959 28,585 Total assets $77,042 $63,440 Liabilities and Fund Balance Liabilities: Accounts payable $27,115 $13,726 _ Salaries payable 761 678 Total liabilities 27,876 14,404 Fund balance: Unreserved - _ Designated for subsequent year's expenditures 10,154 11,988 Designated for solid waste abatement 39,012 37,048 Total fund balance 49,166 49,036 Total liabilities and fund balance $77,042 $63,440 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, 1995 With Comparative Amounts for Year Ended December 31, 1994 _ 1995 Variance Favorable 1994 Budget Actual (Unfavorable) Actual Revenues: Intergovernmental revenue - State $84,180 $82,980 ($1,200) $53,425 Charges for services 147,574 146,680 (894) 146,392 _ Donations 1,275 1,275 Miscellaneous revenue 1,166 1,166 Total revenues 234,195 232,101 (2,094) 199,817 Expenditures: Current General government- Personal services 44,253 43,243 1,010 41,195 Supplies and other charges 390,151 376,949 13,202 166,839 Total expenditures 434,404 420,192 14,212 208,034 Excess of revenues over expenditures (200,209) (188,091) 12,118 (8,217) - Other financing sources(uses): Operating transfers in - Special Assessment Debt Service Fund 188,221 188,221 Excess(deficiency)of revenues and other - financing sources over expenditures (11,988) 130 12,118 (8,217) Fund balance January 1 49,036 49,036 57,253 Fund balance December 31 $37,048 $49,166 $12,118 $49,036 85 Exhibit C-9 CITY OF FRIDLEY, MINNESOTA — HRA REIMBURSEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1995 and 1994 — 1995 1994 — Assets Due from other funds $388 $266 Total assets $388 $266 Liabilities and Fund Balance — Liabilities: Accounts payable $ $39 Due to other funds 388 227 Total liabilities 388 266 Fund balance: Unreserved - undesignated Total liabilities and fund balance $388 $266 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, 1995 With Comparative Amounts for Year Ended December 31, 1994 1995 Variance Favorable 1994 Budget Actual (Unfavorable) Actual _ Revenues: Intergovernmental revenue - Housing Redevelopment Authority $13,741 $13,741 $ $9,991 Total revenues 13,741 13,741 9,991 Expenditures: — Current General government- Supplies and other charges 13,741 13,741 9,991 — Total expenditures 13,741 13,741 9,991 Excess of revenues over — expenditures Fund balance January 1 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, 1995 and 1994 — 1995 1994 — Assets Investments $9,918 $10,383 Total assets $9,918 $10,383 — Liabilities and Fund Balance — Fund balance: Unreserved - designated for drug and — gambling enforcement $9,918 $10,383 Total liabilities and fund balance $9,918 $10,383 — 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, 1995 With Comparative Amounts for Year Ended December 31, 1994 1995 — Variance Favorable 1994 Budget Actual (Unfavorable) Actual Revenues: Fines and forfeits $277 $277 $ $1,396 — Total revenues 277 277 1,396 Expenditures: Current Public safety- Supplies and other charges 2,834 — Capital outlay _ 742 742 Total expenditures 742 742 2,834 Excess of revenues over expenditures (465) (465) (1,438) - Fund balance January 1 10,383 10,383 11,821 Fund balance December 31 $9,918 $9,918 $0 $10,383 89 Exhibit C-13 CITY OF FRIDLEY, MINNESOTA HRA HOUSING SPECIAL REVENUE FUND _ COMPARATIVE BALANCE SHEET December 31, 1995 and 1994 1995 1994 Assets Cash and cash equivalents $6,966 $18,077 _ Receivables: Mortgages-deferred 88,423 6,614 Total assets $95,389 $24,691 Liabilities and Fund Balance Liabilities: _ Accounts payable $5,165 $4,061 Deposits payable 500 Salaries payable 1,801 966 — Due to other funds 12,550 Total liabilities 6,966 18,077 Fund balance: Reserved for mortgages receivable 88,423 6,614 Total liabilities and fund balance $95,389 $24,691 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, 1995 - With Comparative Amounts for Year Ended December 31, 1994 - 1995 Variance Favorable 1994 - Budget Actual (Unfavorable) Actual Revenues: - Interest on investments $462 $462 $ $ Miscellaneous revenue: - Rent Income 300 300 253 Sale of property 50,182 50,182 Miscellaneous 2,470 2,470 - Total miscellaneous revenue 52,952 52,952 253 Total revenue 53,414 53,414 253 Expenditures: Current - General government- Personal Services 72,515 50,727 21,788 47,089 Supplies and other charges 151,855 151,855 57,282 Capital Outlay 296,600 252,553 44,047 315,373 Total expenditures 520,970 455,135 65,835 419,744 - Excess(deficiency)of revenues over expenditures (467,556) (401,721) 65,835 (419,491) - Other financing sources (uses): Operating transfer in - HRA Capital Project Fund 483,530 483,530 425,633 Excess(deficiency)of revenues and other financing sources - over expenditures 15,974 81,809 65,835 6,142 Fund balance January 1 6,614 6,614 472 Fund balance December 31 $22,588 $88,423 $65,835 $6,614 91 Exhibit C-15 CITY OF FRIDLEY, MINNESOTA — HOUSING REVITALIZATION SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1995 and 1994 — 1995 1994 — Assets Total assets $0 $0 Liabilities and Fund Balance Fund balance: Unreserved, Undesignated $0 $0 92 Exhibit C-16 CITY OF FRIDLEY, MINNESOTA HOUSING REVITALIZATION SPECIAL REVENUE FUND _ STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL Year Ended December 31, 1995 With Comparative Amounts for Year Ended December 31, 1994 _ 1995 Variance Favorable 1994 Budget Actual (Unfavorable) Actual Expenditures: _ Current General government- Supplies and other charges $3,408 $3,408 $ $8,966 Capital Outlay 246,592 246,592 106,106 Total expenditures 250,000 3,408 246,592 115,072 Excess(deficiency) of revenues over expenditures (250,000) (3,408) 246,592 (115,072) — Other financing sources(uses): Operating transfer in - Special Assessment Debt Service Fund 250,000 3,408 (246,592) 115,072 Excess(deficiency) of revenues and other financing sources — over expenditures Fund balance January 1 Fund balance December 31 $0 $0 $0 $0 93 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, 1995 With Comparative Totals for December 31, 1994 — Special Totals Assessment H RA 1995 1994 — Assets Cash and cash equivalents $ $926,557 $926,557 $1,061,695 — Investments 9,772,051 9,772,051 9,462,421 Receivables: Special Assessments- — Unremitted 7,056 7,056 3,193 Delinquents 126,799 126,799 93,714 Deferred 1,889,066 1,889,066 2,197,528 Total assets $11,794,972 $926,557 $12,721,529 $12,818,551 Liabilities and Fund Balance — Liabilities: Accounts payable $1,677 $267 $1,944 $102 Deferred revenue 2,015,865 2,015,865 2,291,242 Due to other governments 2,078 2,078 2,301 Total liabilities 2,019,620 267 2,019,887 2,293,645 Fund balance: Reserved for debt service 444,297 926,290 1,370,587 1,544,123 Unreserved - undesignated 9,331,055 9,331,055 8,980,783 — Total fund balance 9,775,352 926,290 10,701,642 10,524,906 Total liabilities and fund balance $11,794,972 $926,557 $12,721,529 $12,818,551 95 Exhibit D-2 CITY OF FRIDLEY, MINNESOTA DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Year Ended December 31, 1995 -- With Comparative Totals for Year Ended December 31, 1994 Special Totals Assessment HRA 1995 1994 Revenues: Special assessments $405,203 $ $405,203 $478,634 Interest on investments 473,755 473,755 529,214 — Total revenues 878,958 878,958 1,007,848 Expenditures: — Debt service - Principal retirement 170,000 4,360,000 4,530,000 2,305,000 Interest and fiscal charges 87,228 992,610 1,079,838 1,147,551 — Total expenditures 257,228 5,352,610 5,609,838 3,452,551 Excess(deficiency)of revenues over expenditures 621,730 (5,352,610) (4,730,880) (2,444,703) Other financing sources(uses): — Operating transfers in (out)- Bond Proceeds 4,074,311 4,074,311 2,309 HRA Capital Projects Fund 1,142,996 1,142,996 1,304,368 — General Fund (266,526) (266,526) (248,414) Housing Revitalization Special Revenue Fund (3,408) (3,408) (115,072) — Solid Waste Abatement Fund (188,221) (188,221) Capital Improvements Fund (35,000) (35,000) Special Assessments Capital Project Fund 183,464 183,464 — Total other financing sources(uses) (309,691) 5,217,307 4,907,616 943,191 Excess(deficiency) of revenues and — other financing sources over expenditures and other financing uses 312,039 (135,303) 176,736 (1,501,512) Fund balance January 1 9,463,313 1,061,593 10,524,906 12,838,703 Residual Equity Transfer In (Out) (812,285) — Fund balance December 31 $9,775,352 $926,290 $10,701,642 $10,524,906 96 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, 1995 With Comparative Totals for December 31, 1994 Capital Special Improvements Assessments Assets Cash and cash equivalents $ $ Investments 8,503,891 90,423 — Receivables: Accounts receivable Taxes - — Unremitted 848 Delinquent 4,253 Specials- — Delinquent 44,263 Deferred 12,320 Mortgage - — Deferred Interest Due from other governments 20,000 — Total assets $8,541,312 $134,686 Liabilities and Fund Balance — Liabilities: Accounts payable $47 $856 _ Deposits payable Contracts payable 2,287 37,930 Deferred revenue 16,573 44,263 _ Due to other funds 699,878 Due to other governments 37,483 Total liabilities 56,390 782,927 Fund balance: Reserved for encumbrances 1,324,272 Reserved for construction — Reserved for long-term receivables Unreserved - Designated for fixed asset replacement 1,701,913 Designated for park improvements 743,026 Designated for street improvements 4,715,711 Undesignated (648,241) — Total fund balance 8,484,922 (648,241) Total liabilities and fund balance $8,541,312 $134,686 98 Exhibit E-1 Totals HRA 1995 1994 $1,053,495 $1,053,495 $14,305 - 4,497,474 13,091,788 17,431,661 650 92,024 92,872 93,355 103,773 108,026 335,052 44,263 12,320 48,763 1,135,647 1,135,647 1,134,807 33,220 33,220 90,695 - 20,000 $6,915,633 $15,591,631 $19,149,288 $26,981 $27,884 $40,699 - 20,000 20,000 77,088 40,217 157,268 103,773 164,609 383,815 - 3,700 703,578 670,799 160,501 197,984 296,337 314,955 1,154,272 1,626,006 - 1,324,272 865,353 - 5,465,031 5,465,031 8,539,266 1,135,647 1,135,647 1,134,807 - 1,701,913 1,728,644 743,026 707,381 4,715,711 5,121,870 - (648,241) (574,039) 6,600,678 14,437,359 17,523,282 $6,915,633 $15,591,631 $19,149,288 99 CITY OF FRIDLEY, MINNESOTA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND — CHANGES IN FUND BALANCE Year Ended December 31, 1995 With Comparative Totals for Year Ended December 31, 1994 — Capital Special Improvements Assessments Revenues: Taxes - Tax increment $ $ — Current ad valorem taxes 71,475 Delinquent ad valorem taxes 1,456 Special assessments 3,111 10,158 — Total taxes 76,042 10,158 Intergovernmental revenue - — State credits 15,000 State aid for construction 120,909 Other 40,000 303,410 — Total intergovernmental revenue 175,909 303,410 Interest on investments 431,908 16,543 — Miscellaneous revenue - Rental income _ Donations 74,198 Other 99 Total miscellaneous revenue 74,297 — Total revenues 758,156 330,111 (Continued) 100 Exhibit E-2 Continued Totals HRA 1995 1994 — $2,742,056 $2,742,056 $2,734,021 71,475 70,698 1,456 103 — 81,825 95,094 98,688 2,823,881 2,910,081 2,903,510 15,000 15,000 120,909 303,132 — 343,410 479,319 318,132 429,316 877,767 995,535 — 25,436 25,436 43,165 74,198 34,874 244,450 244,549 6,571 — 269,886 344,183 84,610 3,523,083 4,611,350 4,301,787 101 CITY OF FRIDLEY. MINNESOTA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND — CHANGES IN FUND BALANCE (Continued) Year Ended December 31, 1995 With Comparative Totals for Year Ended December 31, 1994 — Capital Special Improvements Assessments Expenditures: Current - General government $ $ — Public works 95,425 93,063 Debt service - Loan principal 3,926 — Interest 8,375 Bond issuance costs Capital outlay 492,963 258,579 — Total expenditures 588,388 363,943 Excess(deficiency) of revenues over expenditures 169,768 (33,832) Other financing sources(uses): — Bond proceeds Operating transfers in (out) - HRA Special Revenue Fund — HRA Debt Service Fund Capital Improvement Fund 143,094 Special Assessment Capital Projects Fund (108,094) (183,464) — Total other financing sources(uses) (108,094) (40,370) Excess(deficiency) of revenues and other — financing sources over expenditures and other financing uses 61,674 (74,202) Fund balance January 1 8,423,248 (574,039) Fund balance (deficit) December 31 $8,484,922 ($648,241) — 102 - Exhibit E-2 Continued Totals HRA 1995 1994 — $1,302,912 $1,302,912 $845,803 188,488 328,331 — 3,926 3,685 8,375 8,616 16,365 — 3,667,040 4,418,582 2,018,976 4,969,952 5,922,283 3,221,776 (1,446,869) (1,310,933) 1,080,011 155,380 — (483,530) (483,530) (425,633) (1,142,996) (1,142,996) (1,304,368) 143,094 895,295 — (291,558) (895,295) (1,626,526) (1,774,990) (1,574,621) (3,073,395) (3,085,923) (494,610) 9,674,073 17,523,282 18,017,892 — $6,600,678 $14,437,359 $17,523,282 103 Exhibit E-3 - CITY OF FRIDLEY, MINNESOTA CAPITAL IMPROVEMENTS CAPITAL PROJECT FUND COMPARATIVE BALANCE SHEET — December 31, 1995 and 1994 1995 1994 Assets Investments $8,503,891 $8,554,915 Receivables: _ Taxes - Unremitted 848 333 Delinquent 4,253 3,204 — Special assessments - Deferred 12,320 Due from other governments 20,000 — Total assets $8,541,312 $8,558,452 Liabilities and Fund Balance Liabilities: Accounts payable $47 $ Contracts payable 2,287 132,000 — Deferred revenue 16,573 3,204 Due to other governments 37,483 Total liabilities 56,390 135,204 — Fund balance: Reserved for encumbrances 1,324,272 865,353 — Unreserved - Designated for fixed asset replacement 1,701,913 1,728,644 Designated for park improvements 743,026 707,381 — Designated for street improvements 4,715,711 5,121,870 Total fund balance 8,484,922 8,423,248 Total liabilities and fund balance $8,541,312 $8,558,452 104 Exhibit E-4 CITY OF FRIDLEY. MINNESOTA CAPITAL IMPROVEMENTS CAPITAL PROJECT FUND STATEMENT OF REVENUES, EXPENDITURES AND _ CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 1995 With Comparative Amounts for Year Ended December 31, 1994 1995 Variance _ Favorable 1994 Budget Actual (Unfavorable) Actual Revenues: Taxes - Current ad valorem taxes $70,550 $71,475 $925 $70,698 Delinquent ad valorem taxes 1,456 1,456 103 Total taxes 70,550 72,931 2,381 70,801 Special assessments 3,111 3,111 Intergovenmental revenue - State credits 15,000 15,000 15,000 State aid for construction 650,000 120,909 (529,091) 303,132 Other 40,000 40,000 Total intergovernmental revenue 665,000 175,909 (489,091) 318,132 Interest on investments 341,204 431,908 90,704 475,046 Miscellaneous revenue - Donations 25,000 74,198 49,198 34,874 Other 99 99 1,868 Total miscellaneous revenue 25,000 74,297 49,297 36,742 Total revenues 1,101,754 758,156 (343,598) 900,721 Expenditures: Current Public works 272,887 95,425 177,462 202,268 Capital outlay 1,104,691 492,963 611,728 750,723 Total expenditures 1,377,578 588,388 789,190 952,991 Excess(deficiency) of revenues over expenditures (275,824) 169,768 445,592 (52,270) Other financing sources(uses): Operating transfers in (out): Special Assessment Capital Projects Fund (143,094) (108,094) 35,000 (895,295) Excess(deficiency) of revenues an other financing sources over expenditures and other financing uses (418,918) 61,674 480,592 (947,565) Fund balance January 1 8,423,248 8,423,248 9,370,813 Fund balance December 31 $8,004,330 $8,484,922 $480,592 $8,423,248 105 ENTERPRISE FUNDS Enterprise Funds are used to account for the operations of self-supporting governmental activities that render services or goods to the public. The accounting records are maintained on an accrual basis. The reporting for enterprise funds is similar to comparable private enterprises. Creditors, legislators or the general public can evaluate the performance of a municipal enterprise on the same basis as they can the performance of investor-owned enterprises. Liquor Fund This fund accounts for the operation of the City's off-sale liquor establishments. Public Utilities Fund This fund accounts for the operations of the City-owned sewer and water systems. - CITY OF FRIDLEY, MINNESOTA ENTERPRISE FUNDS Exhibit F-1 COMBINING BALANCE SHEET _ December 31, 1995 With Comparative Totals for December 31, 1994 _ Public Totals Liquor Utilities 1995 1994 Assets Current Assets: Cash and cash equivalents $1,254,538 $3,816,882 $5,071,420 $4,881,456 Investments 456,903 Accounts receivable 2,500 1,404,990 1,407,490 1,085,676 Special assessments 130 130 Due from other funds 3,312 3,312 235,460 Due from other governments 53,895 53,895 21,311 Inventories, at cost 238,503 3,470 241,973 335,187 Prepaid items 447 277,393 277,840 257,963 Total current assets 1,495,988 5,560,072 7,056,060 7,273,956 Non-current Assets: - Long-term receivable - Metropolitan Council Wastewater Services 213,818 213,818 439,249 Special assessments 27,907 27,907 Total non-current assets 241,725 241,725 439,249 Property and equipment, at cost: Property and equipment 414,002 28,900,711 29,314,713 28,903,427 - Less: accumulated depreciation (216,885) (9,358,307) (9,575,192) (8,987,658) Net property and equipment 197,117 19,542,404 19,739,521 19,915,769 Total assets $1,693,105 $25,344,201 $27,037,306 $27,628,974 Liabilities and Fund Equity - Current liabilities: Accounts payable $181,396 $39,778 $221,174 $206,063 Deposits payable 1,556 1,556 - Contracts payable 21,474 21,474 9,680 Salaries payable 4,900 9,109 14,009 12,790 Due to other governments 28,628 500,511 529,139 416,274 Accrued interest payable 58,506 58,506 52,624 - Bonds payable - current 115,000 115,000 85,000 Total current liabilities 214,924 745,934 960,858 782,431 - Long-term liabilities: Bonds payable 2,210,000 2,210,000 2,325,000 Total liabilities 214,924 2,955,934 3,170,858 3,107,431 - Fund equity: Contributed capital 12,276,562 12,276,562 12,591,797 Retained earnings - - Reserved for capital outlay 3,500,340 3,500,340 2,259,000 Unreserved 1,478,181 6,611,365 8,089,546 9,670,746 Total retained earnings 1,478,181 10,111,705 11,589,886 11,929,746 Total fund equity 1,478,181 22,388,267 23,866,448 24,521,543 Total liabilities and fund equity $1,693,105 $25,344,201 $27,037,306 $27,628,974 107 Exhibit F-2 CITY OF FRIDLEY, MINNESOTA ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES - AND CHANGES IN RETAINED EARNINGS Year Ended December 31, 1995 With Comparative Totals for Year Ended December 31, 1994 - Public Totals Liquor Utilities 1995 1994 _ Sales and cost of sales: Sales $3,073,197 $ $3,073,197 $3,083,966 Cost of sales 2,472,464 2,472,464 2,486,129 - Gross profit 600,733 600,733 597,837 Operating revenues: - Water sales and sewer rents 4,383,174 4,383,174 3,871,358 Other 93,726 93,726 114,254 Total operating revenues 4,476,900 4,476,900 3,985,612 - Operating expenses: Personal services 318,131 780,425 1,098,556 1,053,440 Supplies and other charges - - Disposal charges 3,162,003 3,162,003 2,564,878 Other 252,902 663,049 915,951 761,991 Depreciation 30,966 678,075 709,041 653,576 - Total operating expenses 601,999 5,283,552 5,885,551 5,033,885 Operating income (loss) (1,266) (806,652) (807,918) (450,436) - Non-operating revenues (expenses): Interest on investments 54,451 177,152 231,603 284,721 Debt service (142,943) (142,943) (141,196) - Special assessments 40,000 40,000 Loss on disposition of fixed assets (45,409) (45,409) Other 6,310 62,380 68,690 27,697 - Total non-operating revenues(expenses) 15,352 136,589 151,941 171,222 - Net income(loss)before operating transfers 14,086 (670,063) (655,977) (279,214) Operating transfers in (out): - General Fund (75,000) (75,000) (25,000) Net income(loss)before _ extraordinary item (60,914) (670,063) (730,977) (304,214) Extraordinary gain on issuance of sewer availability charge credits 22,100 22,100 364,000 - Net income (loss) (60,914) (647,963) (708,877) 59,786 Credit arising from transfer of depreciation - on contributed capital 369,017 369,017 359,937 Retained earnings January 1 1,539,095 10,390,651 11,929,746 11,510,023 - Retained earnings December 31 $1,478,181 $10,111,705 $11,589,886 $11,929,746 108 CITY OF FRIDLEY. MINNESOTA ENTERPRISE FUNDS Exhibit F-3 COMBINING STATEMENT OF CASH FLOWS Year Ended December 31, 1995 With Comparative Totals for Year Ended December 31, 1994 _ Public Totals Liquor Utilities 1995 1994 Cash flows from operating activities: Operating income ($1,266) ($806,652) ($807,918) ($450,436) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: _ Depreciation 30,966 678,075 709,041 653,576 Changes in assets and liabilities: Decrease (increase) in receivables (2,500) (327,917) (330,417) 76,563 Decrease (increase) in due from other funds 235,460 (3,312) 232,148 (233,340) Decrease (increase) in inventories 90,690 2,524 93,214 (57,416) Decrease (increase) in prepaid items (447) (19,430) (19,877) (34,463) Increase (decrease) in payables 2,005 146,422 148,427 (121,908) Other non-operating revenue 6,310 62,380 68,690 27,697 Use of sewer availability charge credits 223,550 223,550 115,200 Net cash flows from operating activities 361,218 (44,360) 316,858 (24,527) Cash flows from non-capital financing activities: Operating transfers in (out) (75,000) (75,000) (25,000) Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (1,029) (523,391) (524,420) (1,101,168) Proceeds from sale of revenue bonds 335,000 Principal paid on revenue bonds (85,000) (85,000) (80,000) Interest and paying agent fees on revenue bonds (142,943) (142,943) (141,196) Special assessment collections 14,209 14,209 Net cash flows from capital and related financing activities (1,029) (737,125) (738,154) (987,364) Cash flows from investing activities: Purchase of investment securities (456,903) Proceeds from sale of investment securities 456,903 456,903 Interest on investments 54,451 174,906 229,357 284,641 Interest received from MCWS 80 - Net cash flows from investing activities 511,354 174,906 686,260 (172,182) Net increase (decrease) in cash and cash equivalents 796,543 (606,579) 189,964 (1,209,073) - Cash and cash equivalents-January 1 457,995 4,423,461 4,881,456 6,090,529 Cash and cash equivalents- December 31 $1,254,538 $3,816,882 $5,071,420 $4,881,456 Non-cash investing, capital and financing activities: System assets of$53,783 were contributed by the Capital Projects Special -- Assessment Fund to the Public Utility Enterprise Fund in 1995. A receivable for sewer availability charge credits from Metropolitan Council Wastewater Services, in the amount of$22,100, was recognized in the Public Utility Enterprise Fund in 1995. Special assessments of$40,000 were levied to finance a portion of the 1994 Water, Sewer and Storm Water Revenue Bonds. 109 Exhibit F-4 CITY OF FRIDLEY, MINNESOTA LIQUOR ENTERPRISE FUND — COMPARATIVE BALANCE SHEET December 31, 1995 and 1994 1995 1994 Assets Current Assets: — Cash and cash equivalents $1,254,538 $457,995 Investments 456,903 Accounts receivable 2,500 Due from other funds 235,460 Inventories, at cost 238,503 329,193 Prepaid items 447 — Total current assets 1,495,988 1,479,551 Property and equipment, at cost: — Land 66,961 66,961 Buildings 130,211 178,897 Improvements other than building 32,163 86,759 — Machinery and equipment 184,667 247,272 414,002 579,889 Less: accumulated depreciation (216,885) (307,426) Net property and equipment 197,117 272,463 Total assets $1,693,105 $1,752,014 Liabilities and Fund Equity Current Liabilities: Accounts payable $181,396 $178,000 Salaries payable 4,900 4,182 Due to other governments 28,628 30,737 Total current liabilities 214,924 212,919 Fund equity: Retained earnings- unreserved 1,478,181 1,539,095 Total liabilities and fund equity $1,693,105 $1,752,014 110 Exhibit F-5 CITY OF FRIDLEY, MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Years Ended December 31, 1995 and 1994 1995 1994 Sales and cost of sales: Sales $3,073,197 $3,083,966 Cost of sales 2,472,464 2,486,129 Gross profit 600,733 597,837 Operating expenses: Selling: — Personal services 112,600 139,992 Supplies and other charges 60,142 61,044 Total selling expenses 172,742 201,036 Administration and overhead Personal services 205,531 176,602 Supplies and other charges 192,760 95,862 Depreciation 30,966 26,326 Total administration and overhead 429,257 298,790 Total operating expenses 601,999 499,826 Operating income(loss) (1,266) 98,011 Non-operating revenues: Interest on investments 54,451 54,316 Loss on disposition of fixed assets (45,409) Other 6,310 4,413 Total non-operating revenues 15,352 58,729 Net income (loss) before operating transfers 14,086 156,740 Operating transfers in (out): General Fund (75,000) (25,000) Net income(loss) (60,914) 131,740 Retained earnings January 1 1,539,095 1,407,355 Retained earnings December 31 $1,478,181 $1,539,095 111 Exhibit F-6 CITY OF FRIDLEY, MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE STATEMENT OF CASH FLOWS — Years Ended December 31, 1995 and 1994 1995 1994 Cash flows from operating activities: — Operating income ($1,266) $98,011 Adjustments to reconcile operating income (loss)to net cash flows from operating activities: — Depreciation 30,966 26,326 Changes in assets and liabilities: Decrease (increase) in receivables (2,500) — Decrease (increase) in due from other funds 235,460 (235,460) Decrease (increase) in inventories 90,690 (60,889) Decrease (increase) in prepaid items (447) — Increases(decrease) in payables 2,005 39,718 Other non-operating revenue 6,310 4,413 Net cash flows from operating activities 361,218 (127,881) Cash flows fro non-capital financing activities: Operating transfers in (out) (75,000) (25,000) Cash flows from capital and related — financing activities: Acquisition and construction of fixed assets (1,029) (3,595) Cash flows from investing activities: Purchase of investment securities (456,903) Proceeds from sale of investment securities 456,903 — Interest on investments 54,451 54,316 Net cash flows for investing activities 511,354 (402,587) — Net increase (decrease) in cash and cash equivalents 796,543 (559,063) Cash and cash equivalents-January 1 457,995 1,017,058 Cash and cash equivalents- December 31 $1,254,538 $457,995 — 112 CITY OF FRIDLEY, MINNESOTA PUBLIC UTILITY ENTERPRISE FUND Exhibit F-7 COMPARATIVE BALANCE SHEET December 31, 1995 and 1994 1995 1994 Assets Current assets: Cash &cash equivalents $3,816,882 $4,423,461 Receivables: - Accounts 1,403,156 1,083,183 Taxes 1,834 2,493 Special assessments 130 Due from other funds 3,312 Due from other governments 53,895 21,311 Inventories, at cost 3,470 5,994 Prepaid items 277,393 257,963 Total current assets 5,560,072 5,794,405 Non-current assets: Long-term receivables - Metropolitan Council Wastewater Services 213,818 439,249 Special assessments receivable 27,907 Total non-current assets 241,725 439,249 Property and equipment, at cost: _ Land 154,531 154,531 Buildings 1,529,236 1,529,236 Improvements other than building 6,769,754 6,370,544 _ Machinery and equipment 2,405,621 2,281,441 Water and sewer lines 18,041,569 17,987,786 28,900,711 28,323,538 Less: accumulated depreciation (9,358,307) (8,680,232) Net property and equipment 19,542,404 19,643,306 Total assets $25,344,201 $25,876,960 Liabilities and Fund Equity Current liabilities: Accounts payable $39,778 $28,063 Deposits payable 1,556 Contracts payable 21,474 9,680 Salaries payable 9,109 8,608 Due to other governments 500,511 385,537 Accrued interest payable 58,506 52,624 Bonds payable - current 115,000 85,000 Total current liabilities 745,934 569,512 Long term liabilities: Bonds payable 2,210,000 2,325,000 Total liabilities 2,955,934 2,894,512 Fund Equity: Contributed capital 12,276,562 12,591,797 Retained earnings: Reserved for capital outlay 3,500,340 2,259,000 Unreserved 6,611,365 8,131,651 Total retained earnings 10,111,705 10,390,651 Total fund equity 22,388,267 22,982,448 Total liabilities and fund equity $25,344,201 $25,876,960 113 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, 1995 and 1994 1995 1994 Operating Revenues: — Water sales and sewer rents $4,383,174 $3,871,358 Other 93,726 114,254 Total Operating Revenues 4,476,900 3,985,612 _ Operating Expenses: Personal services 780,425 736,846 — Supplies and other charges - Disposal charges 3,162,003 2,564,878 Other 663,049 605,085 Depreciation: Purchased assets 309,058 267,313 Contributed assets 369,017 359,937 _ Total Operating Expenses 5,283,552 4,534,059 Operating loss (806,652) (548,447) Non-Operating Revenues (Expenses): Interest on investments 177,152 230,405 _ Debt service (142,943) (141,196) Special assessments levied 40,000 Other 62,380 23,284 _ Total non-operating revenues (expenses) 136,589 112,493 Net income (loss) before extraordinary item (670,063) (435,954) Extraordinary gain on issuance of sewer availability — Charge credits 22,100 364,000 Net income (loss) (647,963) (71,954) Credit arising from transfer of depreciation on contributed capital 369,017 359,937 Retained Earnings January 1 10,390,651 10,102,668 — Retained Earnings December 31 $10,111,705 $10,390,651 114 CITY OF FRIDLEY, MINNESOTA Exhibit F-9 PUBLIC UTILITY ENTERPRISE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years Ended December 31, 1995 and 1994 1995 1994 Cash flows from operating activities: Operating income (loss) ($806,652) ($548,447) Adjustment to reconcile operating income (loss) to net cash flows from operating activities: Depreciation 678,075 627,250 Changes in assets and liabilities: Decrease (increase) in receivables (327,917) 76,563 Decrease (increase) in due from other funds (3,312) 2,120 Decrease (increase) in inventories 2,524 3,473 Decrease (increase) in prepaid items (19,430) (34,463) Increase (decrease) in payables 146,422 (161,626) Other non-operating revenue 62,380 23,284 Use of sewer availability charge credits 223,550 115,200 Net cash flows from operating activities (44,360) 103,354 Cash flows from capital and related financing activities: Acquisition and construction of fixed assets (523,391) (1,097,573) Proceeds from sale of revenue bonds 335,000 Principal paid on revenue bonds (85,000) (80,000) Interest and paying agent fees on revenue bonds (142,943) (141,196) Special assessment collections 14,209 Net cash flows from capital and related financing activities (737,125) (983,769) Cash flows from investing activities: Interest on investments 174,906 230,325 Interest received from MCWS 80 Net cash flows from investing activities 174,906 230,405 Net increase (decrease) in cash and cash equivalents (606,579) (650,010) Cash and cash equivalents-January 1 4,423,461 5,073,471 Cash and cash equivalents- December 31 $3,816,882 $4,423,461 Non-cash investing, capital and financing activities: System assets of$53,783 were contributed by the Capital Projects Special Assessment Fund to the Public Utility Enterprise Fund in 1995. A receivable for sewer availability charge credits from Metropolitan Council Wastewater Services, in the amount of$22,100, was recognized in the Public Utility Enterprise Fund in 1995. Special assessments of$40,000 were levied to finance a portion of the 1994 Water, Sewer and Storm Water Revenue Bonds. 115 'I 4 INTERNAL SERVICE FUNDS Internal Service Funds are used to account for goods and services that are provided on a cost basis departments agencies the City. These funds are essential for reimbursement or f�F. �.r�ai� tt'.� +a5� artE`raan,s or c!�erlCie,a, 4Viti"lirl t$'r,. City. _! se3ri;gating costs for det:erm rairg the total cost of providing a service and for assuring that the goods and services provided are property utilized. These funds are accounted for on a capital maintenance measurement focus and use the accrual basis of accounting. Employee Benefits Fund This fund is used to account for the expenses associated with providing fringe benefits for the City of Fridley employees. Self insurance Fund l This fund is used to account for all revenues and expenses associated with the $50,000 deductible i in the City general liability policy. inr9rrnatian S stems Fund This fund is used to account: for all revenues and expenses associated with maintaining and upgrading the City's computerized information systems. Exhibit G-1 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUNDS COMBINING BALANCE SHEET December 31, 1995 With Comparative Totals for December 31, 1994 Employee Self Information Totals Benefits Insurance Systems 1995 1994 Assets Current assets: Cash and cash equivalents $1,011,308 $74,950 $887,995 $1,974,253 $5,077 Investments 2,789,277 Due from other funds 1,675,706 1,675,706 926,498 Total current assets 1,011,308 1,750,656 887,995 3,649,959 3,720,852 Property and equipment, at cost: Property and equipment 883,438 883,438 819,572 Less: accumulated depreciation (638,848) (638,848) (561,735) Net property and equipment 244,590 244,590 257,837 Total assets $1,011,308 $1,750,656 $1,132,585 $3,894,549 $3,978,689 Liabilities and Fund Equity Current liabilities: Accounts payable $2,401 $35 $15,682 $18,118 $5,215 .- Payroll deductions payable 62,355 62,355 57,707 Compensated absences payable 879,599 879,599 820,755 Due to other funds 170,106 Total liabilities 944,355 35 15,682 960,072 1,053,783 Fund equity: Contributed capital 1,000,000 952,081 1,952,081 2,008,743 Retained earnings: Reserved for employee benefits 66,953 66,953 91,680 Reserved for equipment acquisition 164,822 164,822 69,219 Unreserved- 750,621 750,621 755,264 Total fund equity 66,953 1,750,621 1,116,903 2,934,477 2,924,906 Total liabilities and fund equity $1,011,308 $1,750,656 $1,132,585 $3,894,549 $3,978,689 117 Exhibit G-2 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND ..., CHANGES IN RETAINED EARNINGS Year Ended December 31, 1995 With Comparative Totals for Year Ended December 31, 1994 - Employee Self Information Totals Benefits Insurance Systems 1995 1994 Operating revenues: Charges for services $4,560 $ $77,113 $81,673 $80,121 Insurance reimbursement 300 300 140,607 Total operating revenues 4,560 300 77,113 81,973 220,728 Operating expenses: ._ Personal services 27,795 27,795 52,475 Supplies and other charges 3,723 91,538 95,261 70,885 Depreciation 77,113 77,113 64,949 _ Total operating expenses 31,518 91,538 77,113 200,169 188,309 Operating income(loss) (26,958) (91,238) (118,196) 32,419 - Non operating revenues: Interest on investments 52,231 86,595 38,941 177,767 150,447 Income before operating transfers 25,273 (4,643) 38,941 59,571 182,866 Operating transfers out: General Fund (50,000) (50,000) (200,000) Net income(loss) (24,727) (4,643) 38,941 9,571 (17,134) Credit arising from transfer of _ depreciation on contributed capital 56,662 56,662 59,981 Retained earnings January 1 91,680 755,264 69,219 916,163 873,316 - Retained earnings December 31 $66,953 $750,621 $164,822 $982,396 $916,163 118 Exhibit G-3 CITY OF FRIDLEY. MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS Year Ended December 31, 1995 With Comparative Totals for Year Ended December 31, 1994 Employee Self Information Totals Benefits Insurance Systems 1995 1994 Cash flows from operating activities: Operating income (loss) ($26,958) ($91,238) $ ($118,196) $32,419 Adjustments to reconcile operating income (loss)to net cash flows from operating activities: Depreciation 77,113 77,113 64,949 Changes in assets and liabilities: Decrease(increase) in due from other funds 1,139,509 (749,208) 390,301 (720,836) Decrease(increase) in accounts recivables 231 Increase(decrease) in accounts payable (1,937) (842) 15,682 12,903 4,388 Increase (decrease) in compensated absences payable 58,844 58,844 5,752 Increase (decrease) in payroll deductions payable 4,648 4,648 719 Increase(decrease) in due from other funds (170,106) (170,106) 170,106 Net cash flows from operating activities 1,004,000 (841,288) 92,795 255,507 (442,272) Cash flows from non-capital financing activities: Operating transfers to General Fund (50,000) (50,000) (200,000) -Net cash flows from non-capital financing activities (50,000) (50,000) (200,000) _Cash flows from capital and related financing activities: Acquisition of fixed assets (63,866) (63,866) (66,347) Contributed capital 812,285 Net Cash flows from capital and related financing activities (63,866) (63,866) • 745,938 Cash flows from investing activities: Purchase of investment securities (1,572,433) _ Proceeds from sale of investment securities 829,643 820,125 1,649,768 Interest on investments 52,231 86,595 38,941 177,767 150,447 Net cash flows from investing activities 52,231 916,238 859,066 1,827,535 (1,421,986) Net increase(decrease)in cash and cash equivalents 1,006,231 74,950 887,995 1,969,176 (1,318,320) -Cash and cash equivalents-January 1 5,077 5,077 1,323,397 Cash and cash equivalents-December 31 $1,011,308 $74,950 $887,995 $1,974,253 $5,077 119 Exhibit G-4 CITY OF FRIDLEY, MINNESOTA — EMPLOYEE BENEFITS INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31, 1995 and 1994 — 1995 1994 Assets Cash and cash equivalents $1,011,308 $5,077 Due from other funds 1,139,509 Total assets $1,011,308 $1,144,586 Liabilities and Fund Equity Current Liabilities: — Accounts payable $2,401 $4,338 Compensated absences payable 879,599 820,755 Payroll deductions payable 62,355 57,707 Due to other funds 170,106 Total current liabilities 944,355 1,052,906 Fund equity: Retained earnings- Reserved for employee benefits 66,953 91,680 — Total current liability and fund equity $1,011,308 $1,144,586 120 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, 1995 and 1994 1995 1994 Operating revenues: Charges for services $4,560 $15,172 Operating expenses: General government- Personal services 27,795 52,475 Supplies and other charges 3,723 4,332 Total operating expenses 31,518 56,807 Operating income(loss) (26,958) (41,635) Non-operating revenues: Interest on investments 52,231 64,953 Total non-operating revenues 52,231 64,953 Income before operating transfers 25,273 23,318 Operating transfers out: General Fund (50,000) (200,000) Net income(loss) (24,727) (176,682) Retained earnings January 1 91,680 268,362 Retained earnings December 31 $66,953 $91,680 121 Exhibit G-6 CITY OF FRIDLEY, MINNESOTA EMPLOYEE BENEFITS INTERNAL SERVICE FUND — COMPARATIVE STATEMENT OF CASH FLOWS Years Ended December 31, 1995 and 1994 1995 1994 Cash flows from operating activities: — Operating loss ($26,958) ($41,635) Adjustments to reconcile operating income (loss)to net cash flows from operating activities: Changes in assets and liabilities: Decrease(increase) in due from other funds 1,139,509 109 — Decrease (increase) in accounts receivable 22 Increase (decrease) in accounts payable (1,937) 4,073 Increase(decrease) in compensated absences payable 58,844 5,752 Increase (decrease) in payroll deductions payable 4,648 719 _ Increase(decrease) in due to other funds (170,106) 170,106 Net cash flows from operating activities 1,004,000 139,146 — Cash flows from non-capital financing activities: Operating transfer to General Fund (50,000) (200,000) Cash flows from investing activities: Interest on investments 52,231 64,953 Net increase(decrease)in cash and cash equivalents 1,006,231 4,099 Cash and cash equivalents-January 1 5,077 978 Cash and cash equivalents-December 31 $1,011,308 $5,077 ._ 122 Exhibit G-7 CITY OF FRIDLEY, MINNESOTA SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31, 1995 and 1994 1995 1994 Assets Cash and cash equivalents $74,950 $ Investments 829,643 Due from other funds 1,675,706 926,498 Total assets $1,750,656 $1,756,141 Liabilities and Fund Equity Current liabilities: Accounts payable $35 $877 Total current liabilities 35 877 Fund equity: .- Contributed capital 1,000,000 1,000,000 Retained earnings- Unreserved- 750,621 755,264 _ Total fund equity 1,750,621 1,755,264 Total liabilities and fund equity $1,750,656 $1,756,141 123 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, 1995 and 1994 1995 1994 ., Operating revenues: Insurance reimbursement $300 $140,607 Total operating revenues 300 140,607 Operating expenses: Supplies and other charges 91,538 64,394 — Total operating expenses 91,538 64,394 Operating income(loss) (91,238) 76,213 — Non-operating expenses: Interest on investments 86,595 74,097 Net income(loss) (4,643) 150,310 — Retained earnings January 1 755,264 604,954 Retained earnings December 31 $750,621 $755,264 124 Exhibit G-9 CITY OF FRIDLEY, MINNESOTA SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years Ended December 31, 1995 and 1994 1995 1994 Cash flows from operating activities: Operating income(loss) ($91,238) $76,213 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 (749,208) (720,945) Decrease(increase) in accounts receivable 209 Increase(decrease)in accounts payable (842) 315 Net cash flows from operating activities (841,288) (644,208) Cash flows from investing activities: Purchase of investment securities (752,308) Proceeds from sale of investment securities 829,643 Interest on investments 86,595 74,097 Net cash flows from investing activities 916,238 (678,211) Net increase in cash and cash equivalents 74,950 (1,322,419) Cash and cash equivalents-January 1 1,322,419 Cash and cash equivalents-December 31 $74,950 $0 125 Exhibit G-10 CITY OF FRIDLEY, MINNESOTA INFORMATION SYSTEMS INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31, 1995 and 1994 1995 1994 Assets Current assets: Cash and cash equivalents $887,995 $ _ Investments 820,125 Total current assets 887,995 820,125 — Property and equipment, at cost: Machinery and equipment 883,438 819,572 Less accumulated depreciation (638,848) (561,735) -" Net property and equipment 244,590 257,837 Total assets $1,132,585 $1,077,962 Liabilities and Fund Equity Current liabilities: Accounts payable $15,682 $ Total current liabilities 15,682 Fund equity: Contributed capital 952,081 1,008,743 Retained earnings- Unreserved, undesignated 164,822 69,219 Total fund equity 1,116,903 1,077,962 Total liabilities and fund equity $1,132,585 $1,077,962 126 Exhibit G-11 CITY OF FRIDLEY. MINNESOTA INFORMATION SYSTEMS INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Years Ended December 31, 1995 and 1994 1995 1994 Operating revenues: Charges for services $77,113 $64,949 Operating expenses: General government- Supplies and other charges 2,159 Depreciation 77,113 64,949 Total operating expenses 77,113 67,108 Operating income(loss) (2,159) Non-operating revenues: Interest on investments 38,941 11,397 Total non-operating revenues 38,941 11,397 Net income(loss) 38,941 9,238 Credit arising from transfer of depreciation -" on contributed assets 56,662 59,981 Retained earnings January 1 69,219 Retained earnings December 31 $164,822 $69,219 127 Exhibit G-12 CITY OF FRIDLEY, MINNESOTA INFORMATION SYSTEMS INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CASH FLOWS Years Ended December 31, 1995 and 1994 1995 1994 Cash flows from operating activities: — Operating income(loss) $ ($2,159) Adjustments to reconcile operating income(loss)to net cash flows from operating activities: — Depreciation 77,113 64,949 Changes in assets and liabilities: Decrease (increase) in accounts receivable — Decrease (increase) in due from other funds Increase(decrease) in accounts payable 15,682 Net cash flows from operating activities 92,795 62,790 Cash flows from capital and related financing activities: Acquisition of fixed assets (63,866) (66,347) Contributed capital 812,285 Net Cash flows from capital and related financing activities (63,866) 745,938 Cash flows from investing activities: "" Purchase of investments (820,125) Proceeds from sale of investments 820,125 Interest on investments 38,941 11,397 Net Cash flows from capital and related — financing activities 859,066 (808,728) Net increase in cash and cash equivalents 887,995 — Cash and cash equivalents-January 1 Cash and cash equivalents-December 31 $887,995 $0 128 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. 1995 — With Comparative Totals for December 31, 1994 Expendable Agency Totals Trust Funds 1995 1994 Assets Investments $36,207 $8,278 $44,485 $58,967 — Receivables: Accounts 3,306 3,306 3,019 Taxes- — Unremitted 38 38 5 Delinquent 479 479 418 Other assets 5,453,445 5,453,445 4,701,218 — Total assets $36,207 $5,465,546 $5,501,753 $4,763,627 Liabilities and Fund Balance — Liabilities: Deposits payable $16,307 $5,453,445 $5,469,752 $4,737,117 — Due to other funds 103 Due to other governments 12,101 12,101 8,726 Total liabilities 16,307 5,465,546 5,481,853 4,745,946 — Fund balance: Unreserved- undesignated 19,900 19,900 17,681 Total liabilities and fund balance $36,207 $5,465,546 $5,501,753 $4,763,627 — 130 Exhibit H-2 CITY OF FRIDLEY, MINNESOTA INDUSTRIAL DEVELOPMENT REVENUE BOND TRUST FUND COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Years Ended December 31, 1995 and 1994 1995 1994 Revenues: Interest on investments $2,219 $2,885 Increase(deficiency)of revenues over expenditures 2,219 2,885 Fund balance, January 1 17,681 14,796 Fund balance, December 31 $19,900 $17,681 131 Exhibit H-3 Continued CITY OF FRIDLEY, MINNESOTA ALL AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES(Continued) - Year Ended December 31, 1995 Balance Balance January 1 Additions Deletions December 31 SIX CITIES WATERSHED AGENCY FUND Assets Investments $5,387 $3,466 $3,337 $5,516 -. Taxes receivable: Unremitted 5 38 5 38 Delinquent 418 144 83 479 Total assets $5,810 $3,648 $3,425 $6,033 Liabilities Due to other governments $5,810 $3,500 $3,277 $6,033 Total liabilities $5,810 $3,500 $3,277 $6,033 HOTEUMOTEL TAX AGENCY FUND Assets - Investments $ $46,358 $43,596 $2,762 Accounts receivable 3,019 3,306 3,019 3,306 - Total assets $3,019 $49,664 $46,615 $6,068 - Liabilities - Due to other funds 103 $ $103 $ Due to other governments 2,916 43,596 40,444 6,068 - Total liabilities $3,019 $43,596 $40,547 $6,068 132 Exhibit H-3 Continued CITY OF FRIDLEY. MINNESOTA ALL AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES(Continued1 Year Ended December 31, 1995 Balance Balance January 1 Additions Deletions December 31 DEFERRED COMPENSATION AGENCY FUND Assets Deferred compensation -at market $4,695,082 $1,026,555 $281,479 $5,440,158 Total assets $4,695,082 $1,026,555 $281,479 $5,440,158 Liabilities Deposits payable $4,695,082 $1,026,555 $281,479 $5,440,158 Total liabilities $4,695,082 $1,026,555 $281,479 $5,440,158 HRA DEFERRED COMPENSATION AGENCY FUND -. Assets Deferred compensation - at market $6,136 $7,169 $18 $13,287 Total assets $6,136 $7,169 $18 $13,287 Liabilities Deposits payable $6,136 $7,169 $18 $13,287 Total liabilities $6,136 $7,169 $18 $13,287 r- 13 3 Exhibit H-3 Continued — CITY OF FRIDLEY. MINNESOTA ALL AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES(Continued) Year Ended December 31, 1995 Balance Balance _ January 1 Additions Deletions December 31 TOTALS-All AGENCY FUNDS Assets Investments $5,387 $49,824 $46,933 $8,278 Receivables: Accounts 3,019 3,306 3,019 3,306 Taxes- Unremitted 5 38 5 38 Delinquent 418 144 83 479 _ Other assets 4,701,218 1,033,724 281,497 5,453,445 Total assets $4,710,047 $1,087,036 $331,537 $5,465,546 _ Liabilities _ Deposits payable $4,701,218 $1,033,724 $281,497 $5,453,445 Due to other funds 103 103 — Due to other governments 8,726 47,096 43,721 12,101 Total liabilities $4,710,047 $1,080,820 $325,321 $5,465,546 134 GENERAL FIXED ASSET ACCOUNT GROUP The General Fixed Asset Account Group is set up to account for long-lived assets not accounted for in an enterprise, trust or internal service fund. — Exhibit I-1 _ CITY OF FRIDLEY, MINNESOTA COMPARATIVE SCHEDULE OF GENERAL FIXED ASSETS December 31, 1995 and 1994 1995 1994 General fixed assets: Land $2,484,913 $2,484,913 Building 4,894,763 4,882,041 Improvements other than building 16,520,604 15,942,627 Machinery and equipment 5,429,593 4,911,299 Total general fixed assets $29,329,873 $28,220,880 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 10,498,548 10,167,201 Special revenue fund revenues 1,668,029 1,663,262 Special assessments 12,625,391 12,375,336 Private gifts 774,548 770,888 Other sources 1,223,800 704,636 Total investment in general fixed assets $29,329,873 $28,220,880 135 Exhibit 1-2 CITY OF FRIDLEY, MINNESOTA SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS- BY FUNCTION AND ACTIVITY Year Ended December 31, 1995 - General Fixed General Fixed - Assets Assets 1/1/95 Additions Deletions 12/31/95 Function and Activity General government - City manager $4,952 $603 $ $5,555 Cable TV 55,577 12,272 67,849 Accounting 30,713 30,713 Management information systems 15,045 15,045 Elections 92,592 92,592 City clerk/records 2,485 6,015 8,500 - Planning 149,049 869 149,918 Municipal center 3,728,771 46,708 3,775,479 Total general government 4,079,184 66,467 4,145,651 Public safety Public protection 738,697 78,103 47,693 769,107 - Fire protection 1,727,323 186,376 1,913,699 Inspectional services 4,917 4,917 Civil defense 146,933 1,419 148,352 Total public safety 2,617,870 265,898 47,693 2,836,075 Public works Engineering 65,829 21,268 87,097 Street improvements 13,016,718 488,897 13,505,615 Traffic signal 219,415 37,447 256,862 - City garage 2,180,816 2,180,816 Parks 4,662,223 274,268 10,520 4,925,971 Total public works 20,145,001 821,880 10,520 20,956,361 - Recreation/Naturalist Recreation 150,744 10,574 161,318 - Naturalist 1,228,081 2,387 1,230,468 Total recreation/naturalist 1,378,825 12,961 1,391,786 Total general fixed assets $28,220,880 $1,167,206 $58,213 $29,329,873 136 Exhibit 1-3 CITY OF FRIDLEY, MINNESOTA - SCHEDULE OF GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY December 31, 1995 Improvements Machinery Other than and Total Land Buildings Buildings Equipment Function and Activity - General government City manager $5,555 $ $ $ $5,555 - Cable TV 67,849 67,849 Accounting 30,713 30,713 Management information systems 15,045 15,045 - Elections 92,592 92,592 City clerk/records 8,500 8,500 Planning 149,918 124,804 25,114 Municipal center 3,775,479 53,948 2,849,206 53,302 819,023 Total general government 4,145,651 178,752 2,849,206 53,302 1,064,391 - Public safety Public protection 769,107 166,871 602,236 - Fire protection 1,913,699 58,656 504,212 122,718 1,228,113 Inspectional services 4,917 4,917 Civil defense 148,352 111,946 36,406 Total public safety 2,836,075 58,656 504,212 401,535 1,871,672 Public works Engineering 87,097 87,097 - Street improvements 13,505,615 197,500 1,174 13,152,252 154,689 Traffic signal 256,862 251,984 4,878 _ City garage 2,180,816 142,940 386,266 239,888 1,411,722 Parks 4,925,971 1,601,007 702,589 1,974,170 648,205 Total public works 20,956,361 1,941,447 1,090,029 15,618,294 2,306,591 Recreation/Naturalist Recreation 161,318 20,037 141,281 _ Naturalist 1,230,468 306,058 451,316 427,436 45,658 Total recreation/naturalist 1,391,786 306,058 451,316 447,473 186,939 Total fixed assets $29,329,873 $2,484,913 $4,894,763 $16,520,604 $5,429,593 - 137 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, 1995 and 1994 1995 1994 .., Amount available and to be provided for the payment of general long-term debt Amount available in Debt Service Funds $10,701,642 $10,524,906 Amount to be provided by future taxes 6,185,955 6,819,432 Total available and to be provided $16,887,597 $17,344,338 General long-term debt payable General long-term debt payable: .... General obligation special assessment improvement bonds $1,555,000 $1,725,000 General obligation tax increment refunding bonds 9,485,000 9,485,000 General obligation temporary tax increment bonds 4,090,000 4,030,000 Tax increment revenue refunding bonds 1,620,000 1,950,000 Capital Lease Payable 13,666 26,481 Construction loan payable 123,931 127,857 Total general long-term debt payable $16,887,597 $17,344,338 139 SUPPLEMENTAL SECTION Exhibit K-1 CITY OF FRIDLEY, MINNESOTA SCHEDULE OF ASSESSED VALUATION AND LONG-TERM DEBT FOR THE TAX INCREMENT FINANCING DISTRICT DECEMBER 31, 1995 Redevelopment District Original Tax Capacity $1,709,990 Current Tax Capacity 4,352,682 Captured Tax Capacity- retained by the Authority 2,642,692 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 General Obligation Temporary Tax Increment Bonds of 1995, Series 1995A 4,090,000 Total bonds issued 46,695,000 _ Amounts Redeemed: Paid (4,190,000) Bonds defeased- prior (27,310,000) Total amount redeemed (31,500,000) Outstanding bonds at December 31, 1995 $15,195,000 141 Exhibit K-2 CITY OF FRIDLEY, MINNESOTA SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS FOR THE TAX INCREMENT FINANCING DISTRICT INCEPTION TO DECEMBER 31, 1995 Current Year Prior Years Total Sources of Funds: Proceeds of bond sale $4,074,311 $44,226,128 $48,300,439 Tax increments received 2,742,056 21,449,520 24,191,576 Special assessments 81,825 373,975 455,800 Interest on invested funds 429,778 6,112,789 6,542,567 Real estate sales 50,682 536,334 587,016 Rental 25,736 663,449 689,185 Other _ 246,420 326,767 573,187 Total sources of funds 7,650,808 73,688,962 81,339,770 — Uses of Funds: Land acquisition 3,903,334 16,253,771 20,157,105 Building acquisition 16,260 1,274,851 1,291,111 Site improvements or preparation costs 3,427,130 3,427,130 Installation of public _ utilities and improvements 1,096,775 1,096,775 Bond payments Principal 4,360,000 14,790,000 19,150,000 ., Interest and fiscal charges 992,610 9,747,807 10,740,417 Payment to refunded bond escrow agent 9,257,980 9,257,980 Refund to school districts 304,548 1,795,351 2,099,899 Administrative costs 1,017,088 4,440,276 5,457,364 Other 183,857 862,741 1,046,598 Total uses of funds 10,777,697 62,946,682 73,724,379 District Balance ($3,126,889) $10,742,280 $7,615,391 . 142 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 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 1994 3,206,942 3,552,812 180,104 2,473,128 462,615 780,242 3,495,789 14,151,632 1995 3,954,875 3,821,230 195,949 2,375,472 530,230 850,329 5,636,711 17,364,796 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. 143 Table 2 a CITY OF FRIDLEY — GENERAL REVENUE BY SOURCE(1) LAST TEN FISCAL YEARS General — Property Taxes& Intergovem- Fiscal Special Licenses mental Charges For Miscellaneous -, Year Assessments &Permits Revenue Services Revenue Total 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 16,146,165 -, 1993 7,521,395 410,135 4,417,835 928,736 3,619,903 16,898,004 1994 6,915,475 528,111 3,808,828 1,038,863 2,393,463 14,684,740 1995 6,966,331 554,182 4,003,592 1,015,048 2,547,453 15,086,606 — Note (1) Includes General, Special Revenue, Capital Projects and Debt — Service Funds. 144 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 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 1994 3,678,665 3,578,604 97.28% 6,764 3,585,368 .9746:1 32,416 (3) 1995 3,667,686 3,606,902 98.34% 105,526 3,712,428 1.0122:1 84,303 — Notes (1) For years prior to 1994, the tax levy and collections include Homestead and Agricultural — Aid Credit(HACA). Beginning in 1994, state law required the City to certify its tax levy after subtracting HACA. Total HACA received in 1995 and 1994 was$1,092,380 and $1,072,800 respectively. (2) Excludes collections from properties pledged to tax increment. (3) Taxes were adjusted$105,234 by Anoka County due to abatements, court ordered settlements and corrections of prior errors by the County. See Footnote 1.F.2. 145 CITY OF FRIDLEY. MINNESOTA ESTIMATED MARKET VALUE AND TAXABLE VALUE OF ALL PROPERTY LAST TEN FISCAL YEARS Fiscal Year Payable 1986 1987 1988 1989 Assessment Year 1985 1986 1987 1988(1) Population, fiscal year 29,423 29,310 29,336 29,250 Real Property: Estimated market value $839,392,000 $879,498,600 $907,274,900 $941,136,600 ^ Taxable value - Homestead $91,343,841 $94,010,922 $94,216,387 $11,864,707 Excess and non-homestead 143,450,918 153,262,018 152,658,373 19,425,676 Less fiscal disparities contribution (29,730,694) (34,112,779) (37,235,245) (4,351,931) Less tax increment value (9,032,222) (11,348,839) (14,921,389) (2,524,911) Taxable value $196,031,843 $201,811,322 $194,718,126 $24,413,541 Personal property: — Estimated market value $26,208,700 $26,531,000 $26,731,000 $26,452,800 Taxable value $11,245,936 $11,393,525 $11,479,525 $1,385,766 -- Totals: Estimated market value $865,600,700 $906,029,600 $934,005,900 $967,589,400 Taxable value $207,277,779 $213,204,847 $206,197,651 $25,799,307 Per market value ratios Taxable value .239:1 .235:1 .221:1 .027:1 Per capita valuations — Estimated market value $29,419 $30,912 $31,838 $33,079 Taxable value $7,045 $7,274 $7,029 $882 — Real property Taxable value- — Fiscal disparities distribution $18,296,235 $20,639,055 $23,382,622 $3,428,008 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 1988 thru 1995. (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, 1994 upon which the 1995 levy was based was$20,065,886. 146 Table 4 1990 1991 1992 1993 1994 1995 1989(1) 1990(1) 1991 (1) 1992(1) 1993(1)(3) 1994(1) 28,335 28,313 28,369 28,287 28,104 28,204 - $998,231,500 $1,002,812,900 $1,057,532,000 $1,064,099,200 $1,068,474,200 $1,090,023,902 - $6,858,848 $7,009,982 $6,763,333 $6,980,161 $7,008,373 $7,374,709 19,728,534 20,147,442 20,555,478 19,609,068 19,250,219 19,253,892 (4,435,055) (4,853,513) (4,684,322) (5,274,175) (5,000,902) (4,946,278) - (2,368,717) (2,840,385) (3,073,122) (2,536,327) (2,581,487) (2,642,692) $19,783,610 $19,463,526 $19,561,367 $18,778,727 $18,676,203 $19,039,631 $27,116,700 $27,606,700 $22,917,200 $23,184,800 $23,308,700 $19,952,700 - $1,369,388 $1,115,388 $1,087,658 $1,088,969 $1,071,329 $916,940 $1,025,348,200 $1,030,419,600 $1,080,449,200 $1,087,284,000 $1,091,782,900 $1,109,976,602 $21,152,998 $20,578,914 $20,649,025 $19,867,696 $19,747,532 $19,956,571 .021:1 .020:1 .019:1 .018:1 .018:1 .018:1 $36,187 $36,393 $38,086 $38,438 $38,848 $39,355 - $747 $727 $728 $702 $703 $708 $3,817,118 $4,079,539 $3,753,494 $3,463,663 $3,349,769 $2,827,323 147 CITY OF FRIDLEY. MINNESOTA SIGNIFICANT MINNESOTA TAX POLICIES DECEMBER 31. 1995 GENERAL — All non-exempt property in Minnesota is subject to taxation by local taxing districts. The tax levied on a property is determined by computing its tax capacity, which is the property's market value multiplied by the appropriate class rate. The taxes on a property are computed by multiplying the tax rate by the — property's tax capacity. The tax rate is determined by the County Auditor, dividing each tax levy by the taxing jurisdiction's adjusted net tax capacity. — Properties are physically reviewed by assessors at least once every four years. The assessors market value is multiplied by the appropriate class rates to arrive at the adjusted net tax capacity (taxable value). The class rates vary by class of property. — Type of Property 1995 Class Rates Residential Homestead First $72,000 1.00% — Over $72,000 2.00 Commercial/Industrial First $100,000 3.00 Over $100,000 4.60 — Rentals Apartments: 4+ units 3.40 Less than 4 units 2.30 Title II, MFHA, Sect. 8 2.30 — Property Tax Refund. Residential property tax credits are indexed by the percentage of net property tax to household income to the extent a homeowners property tax exceeds a percentage of household income. This percentage ranges from 1.2%for incomes below$1,000 up to 4%for incomes of$61,930. The maximum refund is $440. — In 1989 the Minnesota Legislature also enacted a targeting property tax credit program. This program provides refunds to homestead property owners for part of their tax increase in excess of 12 percent, — f the increase is at least $100. The refund is equal to 75 percent of the increase over 12%. The maximum refund is $1,500. — Property Tax Deferred. In 1993, the Minnesota legislature enacted a law commonly known as 'This Old House' which exempts from the property tax all or a portion of the value of improvements made to homes 35 years of age or older. Homestead property owners could exclude the property tax on those improvements for 10 years. At the end of 10 years, the value of the improvements is added to the market value of the home in equal installments every five years. There are limits to the dollar amount eligible for the tax exclusion: $25,000 on homes 35 to 69 years old;and $50,000 on homes 70 years or older. Only improvements adding$1,000 or more of market value are eligible. This is effective — for improvements made through January 2, 2003. 148 CITY OF FRIDLEY. MINNESOTA - PROPERTY TAX RATES ALL OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS School School School School Fiscal District District District District Year City No. 11 No. 13 No. 14 No. 16(2) County - 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% - 1994 16.005% 57.161% 69.161% 60.840% 53.355% 32.680% 1995 16.098% 61.402% 77.730% 63.296% 58.566% 32.765% Notes (1) 1986-1988 tax rates are expressed as mills; 1989-1995 rate is expressed as a tax capacity rate. (2) Vocational/Technical District#916 is included in District No. 16. - (3) Six Cities Watershed District is included with School District No. 11 beginning in 1985. (4) Rice Creek Watershed District is included with School District No. 13,14 and 16. -- 150 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) 4.956 103.502 101.673 108.795 111.754 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% 5.452% 110.879% 123.277% 114.956% 108.899% 6.022% 115.811% 132.593% 118.159% 113.801% 151 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 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 1994 581,591 536,450 92.24% 31,201 567,651 97.60% 118,994 1995 526,207 478,762 90.98% 8,123 486,885 92.53% 156,253 152 CITY OF FRIDLEY, MINNESOTA HISTORY OF CERTIFIED TAX LEVIES AND TAX RATES LAST TEN FISCAL YEARS 1986 1987 1988 1989 Certified tax levies General Fund $3,141,859 $3,311,826 $3,345,190 $3,556,166 General Debt Service Funds 35,628 Capital Improvement Fund 45,521 85,542 86,320 87,689 Subtotal 3,223,008 3,397,368 3,431,510 3,643,855 Agency Fund 9,869 9,457 8,597 8,597 Total $3,232,877 $3,406,825 $3,440,107 $3,652,452 Mill rate (1985-1988); Tax Capacity Rate (1989-1994) General Fund 14.283 13.895 14.188 14.614 — General Debt Service Funds 0.163 0.158 Capital Improvement Fund . 0.208 0.203 0.367 0.378 Subtotal 14.654 14.256 14.555 14.992 Agency Fund 0.240 0.074 0.075 0.066 — Total 14.894 14.330 14.630 15.058 Notes (1) Beginning in 1994, the State law required the City to certify its tax levy after subtracting Homestead and Agricultural Aid Credit(HACA). Total HACA for 1994 was$1,083,779 and $1,072,800 respectively. 154 Table 7 1990 1991 1992 1993 1994(1) 1995(1) $4,421,519 $4,660,276 $4,660,276 $4,535,276 $3,603,266 $3,592,295 87,689 87,689 87,689 87,689 72,689 72,689 4,509,208 4,747,965 4,747,965 4,622,965 3,675,955 3,664,984 3,439 3,500 3,500 3,500 2,710 2,702 -- $4,512,647 $4,751,465 $4,751,465 $4,626,465 $3,678,665 $3,667,686 12.192% 14.705% 15.548% 15.153% 15.076% 15.778% 0.300% 0.290% 0.284% 0.300% 0.314% 0.320% 12.492% 14.995% 15.832% 15.453% 15.390% 16.098% 0.052% 0.015% 0.022% 0.021% 0.022% 0.022% 12.544% 15.010% 15.854% 15.474% 15.412% 16.120% 155 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 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 1994 28,104 19,747,532 (1) 19,600,000 -0- 19,600,000 1995 28,204 19,956,571 (1) 19,075,000 -0- 19,075,000 —. Notes — (1)The Minnesota Legislature enacted legislation in 1988 and 1989 which changed the method of computing property taxes. Those changes have been reflected in the — computation of the taxable value for taxes payable in 1989- 1994. (2)The 1994 population estimate from Metropolitan Council was not available. -- 156 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- - - 157 Table 9 CITY OF FRIDLEY, MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN DECEMBER 31, 1995 Market Value $1,109,976,602 (A) Debt Limit 2% of Market Value $22,199,532 Amount of Debt Applicable to Debt Limit: — Total Debt $19,198,931 (B) Deductions: — Tax Increment Redevelopment Bonds $15,195,000 Special Assessment Bonds 1,555,000 Revenue Bonds 2,325,000 Construction Loan 123,931 19,198,931 Total Amount of Debt Applicable to Debt Limit _a — Legal Debt Margin $22,199,532 — Notes (A) M.S.A. Section 475.53(see following page) (B) M.S.A. Section 475.51 (see following page) 158 CITY OF FRIDLEY, MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN (CONTINUED) YEAR ENDED DECEMBER 31, 1995 Note (A): M.S.A. Section 475.53 et seq. Limit on Net Debt 'Subdivision 1. Generally, except as otherwise provided in sections 475.51 to 475.75, no municipality, except a school district or a city of the first class, shall incur or be subject to a net debt in excess of two percent of the market value of taxable property in the municipality.' Note (B): M.S.A. Section 475.51 Definitions 'Subdivision 4. 'Net Debt' means the amount remaining after deducting from its gross debt the amount of current revenues which are applicable within the current fiscal year to the payment of any debt, and the aggregate of the principal of the following: (1) Obligations issued for improvements which are payable wholly or partly from the proceeds of special assessments levied upon property specially benefited thereby, including those which are general obligations of the municipality issuing them, if the municipality is entitled to reimbursement in whole or in part from the proceeds of the special assessments. (2) Warrants or orders having no definite or fixed maturity. (3) Obligations payable wholly from the income from revenue producing conveniences. (4) Obligations issued to create or maintain a permanent improvement revolving fund. (5) Obligations issued for the acquisition and betterment of public waterworks systems, public lighting, heating or power systems, and any combination thereof, or for any other public convenience from which a revenue is or may be derived. (6) Debt service loans and capital loans made to a school district under the provisions of sections 124.42 and 124.431. (7) Amount of all money and the face value of all securities held as a debt service fund for the extinguishment of obligations other than those deductible under this subdivision. (8) Obligations to repay loans made under section 2160.37. (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.' 159 Table 10 CITY OF FRIDLEY. MINNESOTA COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT AND COMPARATIVE DEBT RATIOS DECEMBER 31. 1995 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 $19,075,000 $10,701,642 $8,373,358 100.00% $8,373,358 Overlapping debt: — School Districts No. 11 144,562,792 38,053,799 106,508,993 1.16% 1,235,504 No. 14 125,000 177,639 — No. 16 32,795,000 567,469 32,227,531 36.80% 11,859,731 Metro Council 386,585,000 30,413,561 356,171,439 1.19% 4,238,440 — Anoka County 100,383,798 40,379,528 60,004,270 18.04% 10,824,770 Vocational/Technical District No. 916 9,460,000 1,699,326 7,760,674 2.21% 171,511 Overlapping debt 673,911,590 111,291,322 562,672,907 28,329,956 — Total direct and overlapping debt $692,986,590 $121,992,964 $571,046,265 $36,703,314 160 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 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 1994 2,305,000 1,147,551 3,452,551 14,151,632 .2440:1 1995 4,530,000 1,079,838 5,609,838 17,364,796 .3231:1 Notes (1) Includes General, Special Revenue, Debt Service and Capital Projects. 161 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 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 - 1994 3,985,612 4,534,059 (548,447) 80,000 127,301 207,301 - 1995 4,476,900 5,283,552 (806,652) 85,000 142,943 227,943 - Notes (1) Total operating revenue exclusive of interest on investments. (2) Total operating expenses including depreciation. 162 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) 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 4,200 4.4% 1994 28,104 15,535 30.5 3,942 3.4% 1995 28,204 17,642 31.2 3,960 3.2% 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) 1985-1989 and 1991-1994 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) 1985- 1989 Unemployment Rate as reported is area wide for the County of Anoka rather than for the City of Fridley. (7) National Planning Data Corporation 163 Table 14 CITY OF FRIDLEY. MINNESOTA CONSTRUCTION. BANK DEPOSITS AND PROPERTY VALUE LAST TEN FISCAL YEARS i 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 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 1,080,449,200 173,900,300 1,254,349,500 1993 69 6,778,632 474 3,536,547 48,376 1,087,284,000 177,929,400 1,265,213,400 1994 115 17,510,011 711 6,365,829 46,888 1,091,782,900 191,559,200 1,283,342,100 _ 1995 116 18,280,651 608 7,618,320 46,466 1,109,976,602 185,043,100 1,295,019,702 Sources: (1) Norwest Bank(previously known as Fridley State Bank) —' (2) Non-taxable property is reevaluated by the city assessors every six years 164 Table 15 - . CITY OF FRIDLEY. MINNESOTA PRINCIPAL TAXPAYERS DECEMBER 31. 1995 Fiscal Year 1995 Percent 1994* of Total Taxable Taxable -- Rank Taxpayer Type of Business Valuation Valuation** 1 Dayton Hudson Target discount store, warehouse and office $1,711,519 6.19% -- 2 Medtronic, Inc. Electro-medical devices 1,172,765 4.24% 3 Onan Corporation Portable electric generators 748,300 2.71% 4 Burlington Northern Railroad Operating property 660,505 2.39% — 5 Northwest Racquet&Swim Club Health and Tennis Club 589,678 2.13% 6 Electric Hair Styling Cosmetics 556,351 2.01% 7 United Defense Systems Naval ordinance 368,708 1.33% 8 East River Road Business Center Business and retail complex 360,425 1.30% 9 Retail Trust IV Wal-Mart discount store 359,470 1.30% 10 Maurice Fillister Georgetown apartments 340,849 1.23% Total $6,868,570 24.83% Notes — " The 1995 levy was based upon the January 2, 1994 taxable value. "" Before contribution to Metropolitan Tax Pool and tax increment financing 165 ■ CITY OF FRIDLEY, MINNESOTA INSURANCE COVERAGE — DECEMBER 31, 1995 All risk perils, 100% coinsurance Buildings and contents Blanket, agreed amount endorsement, replacement cost coverage $23,622,798 Contractor's equipment 1,208,130 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 limit 600,000 Lead and asbestos liability limit 200,000 Land use regulation limit 600,000 Automobile liability Liability 600,000 — Personal injury protection Statutory Uninsured/underinsured motorist 600,000 Comprehensive Actual cash value Liquor liability General total limit 2,000,000 Bodily injury Each person 1,000,000 Each occurrence 1,000,000 Advertising injury each person 1,000,000 — Products and completed work 2,000,000 Law Enforcement professional liability Combined single limit per loss Personal injury, bodily injury, property damage, punitive damages 600,000 Employee benefit programs liability 600,000 Worker's compensation Statutory PRINCIPAL OFFICIALS' BONDS DECEMBER 31, 1995 All employees are covered by a blanket of faithful performance bond of$350,000. —. a 166 CITY OF FRIDLEY, MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION DECEMBER 31, 1995 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 - State and Local General November 8, 1994 Registered voters 16,667 Number of votes cast 10,705 Percent(%)of registered voters voting 64,2% Population 1950 Federal Census 3,796 1960 Federal Census 15,182 1965 Federal Census 24,789 1970 Federal Census 29,233 1980 Federal Census 30,228 1985 Estimated by Metropolitan Council 29,440 1990 Federal Census 28,335 1991 Estimated by Metropolitan Council 28,313 1992 Estimated by Metropolitan Council 28,369 1993 Estimated by Metropolitan Council 28,287 1994 Estimated by Metropolitan Council 28,104 1995 Estimated by Metropolitan Council 28,204 Permanent Employees--As of December 31 Number 1982 123 1983 119 1984 119 1985 125 1986 125 1987 125 1988 126 1989 126 1990 126 1991 137 1992 137 1993 135 1994 140 1995 136 167 CITY OF FRIDLEY. MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION (CONTINUED) DECEMBER 31. 1995 Fire protection Number of stations 3 Volunteer firefighters 32 Full-time firefighters 5 Fire rating Class 3 Police protection Number of stations 1 Number of sworn officers 36 Number of street lights 1,042 — Number of traffic signal installations 35 Number of other special signal installations 2 Number of civil defense warning sirens 8 • Miles of streets and sidewalks(including State and County) City streets 126.09 Trunk highways 10.79 County roads 14.56 Sidewalks and Bikeways 14.48 Miles of sewer Storm 43.56 — Sanitary 103.02 Miles of water mains 112.8 — Municipal water system source City of Fridley Water Plant — (13 wells)--capacity of 15 million gallons per day Number of water connections December 31, 1995 8,296 connections Daily average consumption (gallons) 4.80 million gallons Elevated storage capacity 2 million gallons — Water storage reservoirs 4.5 million gallons Number of fire hydrants 1,080 Municipal sewer system Disposal --through Metropolitan Waste Control Commission Number of connections December 31, 1995 8,045 connections Average daily flow(includes infiltration/inflow) 6.25 million gallons 168 CITY OF FRIDLEY, MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION (CONTINUED) DECEMBER 31. 1995 Parks and Recreation Areas Developed 425 Acres Undeveloped 125 Acres Total 550 Acres City and County Parks Schools Total Number of: Hockey rinks 6 2 8 General skating rinks 14 2 16 Playgrounds 28 4 32 Swimming beaches 1 0 1 Swimming pools 0 1 1 Picnic grounds 19 0 19 Day camp sites 1 0 1 Baseball diamonds 4 5 9 Softball diamonds 22 8 30 Outdoor basketball courts 20 9 29 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 15 169 CITY OF FRIDLEY. MINNESOTA GENERAL INFORMATION DECEMBER 31. 1995 Location - Transportation The City of Fridley, with a total land area of eleven square miles and an estimated population of 28,204, is located at the northern boundaries of Minneapolis and Columbia Heights, about eight miles from the Minneapolis central business district. Freight service is provided in the area by local and interstate truck lines and Burlington Northern Railroad. Commuter transportation is available through Metropolitan Transit Commission facilities. Highways serving Fridley include interstate #694 (beltline around the metropolitan area) and State Highways. An International Airport, located approximately twenty-five miles south of Fridley, and private business aviation facilities located at the Anoka County and Crystal Airports, provide air transportation and are operated by the Metropolitan Airport Commission. Medical Facilities Medical facilities in Fridley include Health One Unity Hospital, a 275-bed hospital with an adjacent clinic (Unity Professional Building), Fridley Plaza Clinic, Fridley Convalescent Home, the Fridley Medical Center, and Lynwood Health Care Center. Education Fridley is served by four school districts, a major portion of the City is located within Fridley — Independent School District No. 14. The Fridley School District operates two elementary schools, a junior high and senior high school, employing 181 certified personnel in the education of about 2,630 students. Grace Parochial High School has an enrollment of approximately 945. Portions of the Columbia Heights School District (13), the Spring Lake Park School District (16) and Anoka/Hennepin — School District (11) also lie within the City of Fridley. Those districts have an estimated enrollment of 1,330 students living within the City of Fridley. Colleges and universities, vocational-technical and specialized training schools are located throughout the metropolitan area within easy commuting distances of Fridley. 170 CITY OF FRIDLEY, MINNESOTA GENERAL INFORMATION (CONTINUED) DECEMBER 31. 1995 Larder Employers Larger employers in the City of Fridley include: Full-Time Employer Product or Service Employees Medtronics, Inc. Electro-medical devices and hdqtrs. 3,900 Unity Hospital Medical services 1,400 United Defense Systems Pumps and naval ordinance 1,363 Onan Corporation Portable generators, electronic equipment 1,313 Burlington Northern Railroad Northtown yard 1,100 Minco Products Electronic devices 629 Kurt Manufacturing Machine parts 615 Independent School District#14 Fridley school district 357 -- Electric Hair Styling Cosmetics 350 Target Stores, Warehouse Discount department store 336 McGlynn's Bakery 325 Safetran Systems Corporation Railroad accessories 232 171