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1988 CAFR COMPREHENSIVE 1111FIJ ANNUAL FINANCIAL REPORT 4.,,,,, 1 "r 4 M 1 . , I t ti N i ` E N ! FRic* *4 cor Or S O T KCB � A FOR THE YEAR ENDED DECEMBER 31, 1988 CITY OF FRIDLEY, MINNESOTA Comprehensive Annual Financial Report December 31, 1988 Prepared by: .., Department of Finance Richard D. Pribyl Director of Finance Julie M. Burt Assistant Finance Director CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1988 — 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 15 FINANCIAL SECTION Auditors' Opinion 17 General Purpose Financial Statements Combined Financial Statements - Overview — Combined Balance Sheet - All Fund Types and Account Groups A-1 20 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types and Expendable Trust Funds A-2 24 — Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - — General and Special Revenue Fund Types A-3 26 Combined Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Types A-4 28 — Combined Statement of Changes in Financial Position - All Proprietary Fund Types A-5 29 — Notes to Financial Statements 30 ,_ Financial Statements of Individual Funds: General Fund: Comparative Balance Sheet B-1 59 Statement of Revenues, Expenditures and Changes in — Fund Balance - Budget and Actual B-2 60 Schedule of Revenues and Other Financing Sources - Budget and Actual B-3 61 — Schedule of Expenditures and Other Financing Uses - Budget and Actual B-4 63 — CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1988 TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE ^ Special Revenue Funds: Combining Balance Sheet C-1 68 -- Combining Statement of Revenues, Expenditures and Changes in Fund Balances C-2 70 Municipal State Aid Fund: Comparative Balance Sheet C-3 72 "' Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-4 73 Cable TV Fund: Comparative Balance Sheet C-5 74 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-6 75 — Grant Management Fund: Comparative Balance Sheet C-7 76 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-8 77 HRA Reimbursement Fund: Comparative Balance Sheet C-9 78 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-10 79 Debt Service Funds: Combining Balance Sheet D-1 81 Combining Statement of Revenues, Expenditures and Changes in Fund Balances D-2 82 Capital Projects Funds: Combining Balance Sheet E-1 84 Combining Statement of Revenues, Expenditures and Changes in Fund Balances E-2 86 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1988 TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE Enterprise Funds: Combining Balance Sheet F-1 91 Combining Statement of Revenues, Expenses and Changes in Retained Earnings F-2 92 Combining Statement of Changes in Financial Position F-3 93 Liquor Fund: Comparative Balance Sheet F-4 94 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings F-5 95 Comparative Statement of Changes in Financial Position F-6 96 Public Utilities Fund: Comparative Balance Sheet F-7 97 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings F-8 98 Comparative Statement of Changes in Financial Position F-9 99 Internal Service Funds: Combining Balance Sheet G-1 102 Combining Statement of Revenues, Expenses and Changes in Retained Earnings G-2 104 Combining Statement of Changes in Financial Position G-3 106 Employee Benefits Fund: Comparative Balance Sheet G-4 108 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-5 109 Comparative Statement of Changes in Financial Position G-6 110 Management Information Services Fund: Comparative Balance Sheet G-7 111 Comparative Statement of Revenues, Expenses and - Changes in Retained Earnings G-8 112 Comparative Statement of Changes in Financial Position G-9 113 CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1988 TABLE OF CONTENTS (CONTINUED) EXHIBIT PAGE Self Insurance Fund: Comparative Balance Sheet G-10 114 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings G-11 115 Comparative Statement of Changes in Financial Position G-12 116 Trust and Agency Funds: — Combining Balance Sheet H-1 117 Trust Fund Comparative Statement of Revenues, Expenditures — and Changes in Fund Balance H-2 118 Agency Funds — Combining Statement of Changes in Assets and Liabilities H-3 119 Statement of Changes in Assets and Liabilities for Individual Funds Six Cities Watershed H-4 120 Hotel/Motel H-4 120 Deferred Compensation H-5 121 General Fixed Assets: Comparative Statement of General Fixed Assets I-1 123 Schedule of General Fixed Assets - By Function and Activity 1-2 124 Schedule of Changes in General Fixed Assets - By Function 1-3 125 — and Activity General Long-Term Debt: Comparative Statement of General Long-Term Debt J-1 127 SUPPLEMENTAL INFORMATION Schedule of Assessed Valuation and Long-Term Debt — for the Tax Increment Financing District K-1 129 Schedule of Sources and Uses of Public Funds for the Tax Increment Financing District K-2 130 — CITY OF FRIDLEY, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 1988 IBM TABLE OF CONTENTS (CONTINUED) TABLE PAGE STATISTICAL SECTION General Governmental Expenditures by Function - Last Ten Fiscal Years 1 131 General Revenues by Source - Last Ten Fiscal Years 2 132 Certified Property Tax Levies and Collections - Last Ten Fiscal Years 3 133 Assessed and Estimated Market Value of All Taxable Property - Last Ten Fiscal Years 4 134 Statement of Valuations and Levies by Classes of Property 5 136 Significant Minnesota Tax Policies 138 Property Tax Rates Per $1,000 of Assessed Value and Calculated Tax Levies - All Overlapping Governments - Last Ten Fiscal Years 6 140 Special Assessment Levies and Collections - Last Ten Fiscal Years 7 142 — History of Certified Tax Levies and Actual Mill Rates - Last Ten Fiscal Years 8 144 Ratio of Net General Bonded Debt to Assessed Values and Net Bonded Debt Per Capita - Last Ten Fiscal Years 9 146 Computation of Legal Debt Margin 10 148 Computation of Direct and Overlapping Bonded Debt and Comparative Debt Ratios 11 150 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Government Expenditures - r. Last Ten Fiscal Years 12 151 Revenue Bond Coverage - Last Ten Fiscal Years 13 152 Demographic Statistics - Last Ten Fiscal Years 14 153 Construction, Bank Deposits and Property Value - _, Last Ten Fiscal Years 15 154 Principal Taxpayers 16 155 Insurance Coverage 156 Miscellaneous Statistical Information 157 General Information 160 .r INTRODUCTORY SECTION Oft I CITY OF FRIDLEY, MINNESOTA ELECTED AND APPOINTED OFFICIALS DECEMBER 31, 1988 ELECTED OFFICIALS Term of Office Expires December Mayor William J. Nee 1989 Councilmember At Large Nancy J. Jorgenson 1989 Councilmember, Ward I Steven E. Billings 1990 Councilmember, Ward II Dennis L. Schneider 1991 Councilmember,Ward Ill Edward J. Fitzpatrick 1990 Effective January 1989 Mayor William J. Nee 1989 Councilmember At Large Nancy J. Jorgenson 1989 Councilmember, Ward I Steven E. Billings 1990 Councilmember, Ward II Dennis L. Schneider 1991 Councilmember,Ward Ill Edward J. Fitzpatrick 1990 APPOINTED OFFICIALS City Manager - William W. Burns City Attorney - Virgil C. Herrick Prosecuting Attorney - Carl J. Newquist Treasurer - Richard D. Pribyl City Clerk - Shirley A. Haapala .... Department Heads: Director of Finance - Richard D. Pribyl Director of Public Safety and Civil Defense Director - James P. Hill Fire Chief - Robert D. Aldrich Director of Public Works - John G. Flora Director of Recreation and Natural Resource - Jack G. Kirk Director of Community Development - John L. Robertson Division Heads: Public Works Superintendent - Ralph S. Volkman Chief Building Official - Darrel G. Clark Planning Coordinator - Barbara J. Dacy Liquor Stores Manager - Kathleen L. Schmitz __ tai CITY ADMINISTRATIVE CITY OF FRIDLEY _ Total Authorized Positions (126) CITY MANAGER (7) City Manaaer Asst to City Manager - Administrative Asst - Management Assistant ..... - City Clerk Administrative Secretary - Clerk-Typist 1 1 I •••, FINANCE (20) POLICE (43) FIRE (6) Finance Director-Treasurer Assistant City Manager- Fire Chief Public Safety Director- ..� - MIS Technician Civil Defense Director - Dep Fire Chief Acctg-Data Proc Clk L Secretary - Captain ~ - Receptionist-Lic Clk Dep Pub Safety Dir - (2) Firefighter ,- - Records Retention Spec. - Lieutenant - Clk Typist II (Civil Defense) CCOUNTING (8) - (3) Sergeant Asst Finance Director (3) Corporal Staff Accountant - (24) Patrol Officer -- - Accounting Specialist - Pub Sfty Projects Coor - Sr Utility Billing Clk Crime Prey Spec ... General Accountant - Office Supervisor - Acctg-Data Proc Clk (2) Senior Office Asst _ Acctg-Data Input Clk - - (4) Office Asst - Acctg-Data Input Clk SSESSING (3) Assessor . Appraiser Tax Assessment Clk IOUOR (4) LO Store Manager -- - Head LO Clerk - LO Store Clerk - LO Store Clerk 2 ORGANIZATIONAL STRUCTURE 1988 - 1 1 1 PUBLIC WORKS (38) RECREATION & NATURALIST (5) COMMUNITY DEVELOPMENT (6) Director of Public Works Director of Recreation & Nat Director of Comm Devel-HRA Pl 1- Oper Analyst L Secretary ODE ENFORCEMENT (3) Secretary Chief Bldg Official ATURALIST (2) .-. NGINEERING (3) Nat-Res Coordinator Plumbing Inspector Asst Pub Works Dir L Interpretive Specialist Secretary Engineering Tech RECREATION (1) Engineering Aide-Admin. I LANNING (2) L Program Supervisor L Coordinator L W MAINTENANCE (32) Planning-Code Enf. Clerk — ISuperintendant L Secretary .. Strleet Foreman Water Foreman Sever ) oreman Park Foreman - (3) Maint III - (2) Maint III - (1) Maint III — - (2) Opr & Maint Spec - (1) Opr & Maint Spec - (2) Opr & Maint Spec - (5) Maint II , (2) Maint II - (1) Maint II - (3) Maint. II - (2) Maint I - (1) Maint I - (1) Maint I 3 _ l'ai CITYOF FRIDLEY CIVIC CENTER • 6431 UNIVERSITY AVE. N.E. FRIDLEY, MINNESOTA 55432 • PHONE(612) 571-3450 May 1, 1989 — 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, 1988. The Report includes an excellent and comprehensive letter from Richard D. Pribyl, Director of Finance and Julie M. Burt, Assistant Finance Director, which provides a brief description of some of the activities the City is currently involved in. Also highlighted in the letter are some of the more important financial management practices employed — by the City administrative staff. I would like to express my appreciation and commendation to them and the Finance Division staff for the manner in which the accounts are kept and the Report presented. — I would also like to express appreciation for the commendable administrative financial management of the several departments and divisions by the respective department and division heads as revealed by this Report. Very truly yours, William W. Burns City Manager — 5 MMI CITY OF FRIDLEY CIVIC CENTER • 6431 UNIVERSITY AVE. N.E. FRIDLEY, MINNESOTA 55432 • PHONE(612) 571-3450 May 1, 1989 Mr. William W. Burns, City Manager Mayor William J. Nee and Council Members Fridley, Minnesota 55432 Dear Mr. Burns, Mayor Nee and Council Members: The Comprehensive Annual Financial Report of the City of Fridley, Minnesota, for the fiscal year ending December 31, 1988, 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 1987. It is our belief that the accompanying fiscal year 1988 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 Ill is the supplemental information section which includes information regarding 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 City exercises or has the ability to exercise, oversight responsibility of the Fridley Housing and Redevelopment Authority, these activities are included in the reporting entity. 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 population of 29,336. The City is located just north of downtown Minneapolis and covers 11 square miles of area. The City was — incorporated July 1, 1949 and is currently committed to redevelopment. With the help of the Housing and Redevelopment Authority, the City has been successful in attracting redevelopment projects in the past and for the future. — MAJOR INITIATIVES 1988 was a year of transition for the City of Fridley. A major undertaking of the year was the remodeling of the City Hall facilities. Construction began in the later part of the summer and will continue through the majority of 1989. The existing structure was built in 1965 and had not been expanded since. The remodeling includes revitalization of the attached fire station and a 12,000 square foot addition. In 1987, the City hired a computer consultant to review the existing management information operations and assess future needs. The result of their study was a multi-phased approach to the acquisition of — a new mini computer and the decentralization of word processing activities. During the year the City implemented Phase I of the new computer system which covered the acquisition of 28 personal computers for expanded spreadsheet capability and stand alone word processing. - Implementation of Phase I of the newly established records retention program was successfully completed during the year. After obtaining approval from the State of Minnesota, nearly 15 tons of paper were destroyed. This was an integral part of the remodeling process in that the space made — available by the destruction of records was incorporated into the space planning for the remodeled facilities. Also during the year, construction of a new satellite fire station was completed. The station is located on the east side of the city and was constructed as a result of concerns regarding response times. Response time is expected to improve by 2 to 3 minutes. The City of Fridley has primarily a volunteer — fire department and therefore the station will be unmanned. As a result, the operating expenditures are relatively low in terms of the benefits that will be derived. 8 NMI CITY OF FRIDLEY, MINNESOTA -. GENERAL INFORMATION (CONTINUED) MAJOR INITIATIVES (CONTINUED) All of the above mentioned projects have been financed with City reserves as opposed to issuing debt. This eliminates budget crunches that could raise the tax levy and/or require cuts in other areas. It has always been a priority of the City to accumulate resources for just these types of projects. The result is a slight decrease in investment earnings however, the City feels this is a responsible approach to the recurring issue of infrastructure replacement. With regards to redevelopment, construction began on the Northwest Racquet and Swim Club with an estimated assessed value of $10 million. The revitalization of the Shorewood Plaza Shopping Center is also underway, this project is expected to add $3 million in assessed value upon completion. PLANS FOR THE FUTURE 1989 will continue to be a year of transition for the City of Fridley. The remodeling of City Hall is likely to continue throughout most of the year. Construction should be complete by year end and leave us with more efficient facilities that allow us to better serve the public. Phase II of the management information study calls for the design of specifications for both hardware and software. The study is comprehensive in that every department is incorporated. This complicates the specification process, however it is hoped that the needs of all departments will be met in an efficient and compatible manner. Too often there is duplication or incompatibility when we neglect to look at the big picture. Phase III is the acquisition of the hardware and software and is expected to commence in the middle of 1990 to allow adequate time for parallel processing. Full conversion is planned for January 1, 1991. - Phase II of the records retention program is the establishment of a central files system that eliminates unnecessary duplication of records and allows for a faster retrieval time. With the remodeling project still heavily underway, this project will just be in the early stages by the end of 1989. By the close of 1990, the City will have an extremely efficient and well organized system for record retention and retrieval. Public reaction to the satellite fire station on the east side generated interest in construction of an additional facility in the Northwest quadrant. Therefore, plans for acquisition and construction are currently underway. With a total of three facilities, services should be balanced throughout the City. Strategic planning is a strong emphasis for the upcoming year. With the current trend of tighter levy limits and increased scrutiny of city reserves, it is imperative that the City evaluate its operations to attain the best utilization of its limited resources. 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 MEM 9 CITY OF FRIDLEY, MINNESOTA FINANCIAL INFORMATION (CONTINUED) INTERNAL CONTROLS (CONTINUED) — accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and the evaluation of costs and benefits requires estimates and judgments by management. — All internal control evaluations occur within the above framework. We believe that the City's internal accounting controls adequately safeguard assets and provide reasonable assurance of the proper recording of financial transactions. — BUDGETARY CONTROLS — A complete budgetary system of accounts is maintained for the General and Special Revenue Funds. Budgetary control is maintained in compliance with the City Charter Requirements. The Charter provides that it is the duty of the City Manager to strictly enforce the provisions of the budget. The management policy of the City is such that the existence of a particular item or appropriation in the approved budget does not mean that it will or must be automatically expended. It is the policy of the City to control budgets at the expenditure category level. Budget adjustments between City divisions are made upon the approval of a resolution by the City Council. The City Charter provides that the City Council shall not have power to increase the total amount of the budget, whether by insertion of new items or otherwise, beyond the estimated revenue unless the actual revenue exceeds such revenue estimates, and in that event not beyond such actual revenue. There is a constant review process. Expenditures are not approved until it has been determined that 1) the expenditure is necessary, 2) adequate funds have been appropriated, and 3) funds are available. CASH MANAGEMENT All temporary cash surpluses during the year are invested in various securities which State statutes permit. The City's policy is to invest all available monies at competitive interest rates in accordance with the City's over-all fiscal plan coordinated with operating needs and programs projected over the ensuing 12 month period. Investment yields ranged from 6.7% to 13.4% during the year. DEBT ADMINISTRATION Net general bonded debt per capita, and the percentage of the net general bonded debt to assessed value are useful indicators of the City's debt position. At December 31, 1988 the City of Fridley's debt service funds provided more capital than necessary to cover the net general bonded debt. The City has numerous debt issues outstanding. Of the $31,845,000 outstanding, $7,240,000 represent special assessment debt with government commitment and the remaining $24,605,000 relates to tax increment issues supported by revenue from the established tax increment areas. It is important to note however, that included in these figures are $14,204,000 of 1985 Variable Rate issues that in accordance with State statutes and the opinion of legal counsel have been effectively defeased with the issuance of the 1986 fixed rate Crossover Bonds, which are also included in these figures. The proceeds from the Crossover Bonds are held in trust with an escrow agent to pay for 85% of the principal of the Variable Rate Bonds and 100% of the interest on themselves. Funds to retire the remaining 15% of principal on the Variable Rate Bonds have been reserved in the Debt Service Fund. 10 CITY OF FRIDLEY, MINNESOTA FINANCIAL INFORMATION (CONTINUED) DEBT ADMINISTRATION (CONTINUED) It is the opinion of the Governmental Accounting Standards Board that it is not possible to defease variable rate debt due to the uncertainty of the interest. On the other hand, it is the opinion of the City _, and its bond counsel that with the issuance of the Crossover Bonds we have eliminated that uncertainty. If variable rates were to rise to a level greater than those on the fixed rates, we would "crossover" or completely refund the Variable Rate Bonds. The City of Fridley has, since 1982, maintained a credit rating of a Aa1 on its long-term bonds. FISCAL DISPARITIES The commonly referred to "Fiscal Disparity Law" was adopted by the Legislature in 1971. The area of the fiscal disparity district encompasses all the properties located within the seven-county metropolitan area. The law provides that 40% of all new commercial/industrial property valuations or growth be placed in an areawide "pool", and shared according to specific criteria. TAX INCREMENT DISTRICTS The City Council took action on May 7, 1979 to form the first of eight 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. During the past five years, the Center City Tax Increment Area has realized the largest amount of growth. A clinic for a major health maintenance organization and two multi-level office complex's were completed. This year Center City still remains the site for a potential six story apartment building with a retail sales center to be built around it. In the future, this area will be benefited by a City wide project that will upgrade the appearance of the main thoroughfares in the City with the use of improved lighting and landscaping. The project also includes plans to upgrade the major intersections for improved traffic control and pedestrian accessibility. GENERAL GOVERNMENT FUNCTIONS The following schedule presents a summary of the General Fund, Special Revenue Funds, Debt Service Funds and the HRA Capital Projects Fund revenues for fiscal year ended December 31, 1988. Percent Increase/ Revenues Amount of Total (Decrease) Taxes and special assessments $5,198,696 45.59% $536,126 Licenses and permits 378,553 3.32% (27,030) Intergovernmental 3,326,179 29.17% 69,848 Charges for services 160,255 1.41% (4,362) Fines and forfeits 292,293 2.56% 9,379 Interest on investments 1,831,120 16.06% (246,736) Miscellaneous 215,787 1.89% (145,802) Total $11,402,883 100.00% $191,423 11 CITY OF FRIDLEY, MINNESOTA FINANCIAL INFORMATION (CONTINUED) — GENERAL GOVERNMENT FUNCTIONS (CONTINUED) The most significant increase in revenues was derived from taxes and special assessments. The increase is primarily due to additional assessed value being placed on the tax rolls for the first time due to redevelopment projects. — The most significant decrease in revenues was seen in interest on investments. It was anticipated that there would be a decline as a result of the major improvements the City undertook during the year. The following schedule presents a summary of the General Fund, Special Revenue Funds, Debt Service Funds and the HRA Capital Projects Fund expenditures for fiscal year ended December 31, 1988. Percent Expenditures Amount of Total Increase Current: General government $1,948,427 19.00% $21,280 Public safety 2,741 ,465 26.74% 33,784 — Civic center 205,654 2.01% 45,432 Public works 2,014,817 19.65% 21,868 Recreation and naturalist 589,771 5.75% 59,705 — Debt service 2,752,080 26.85% 549,021 Total $10,252,214 100.00% $731,090 — The most significant increase in expenditures was in debt service. This is largely due to the fact that _. we are reporting on both the Variable Rate Bonds of 1985 and the Crossover Bonds of 1986. As mentioned previously in this letter it is the opinion of the City and its legal counsel that the 1985 Variable Rate Bonds have been effectively defeased. ,_ 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. — Enterprise Funds The enterprise funds account for the financing of services to the general public in which all or most of the costs involved are paid in the form of charges by the users of such services. In the City of Fridley, — Enterprise Funds are used to account for the operation of the public utility system, and two municipal liquor stores. Except for ownership, Enterprise funds bear a close resemblance to privately owned utility or service enterprises. — Liquor Fund The liquor fund was established to account for the operation and financing of the City-owned municipal — liquor stores. The City operates two liquor stores, one at 6289 Highway 65 and the other at 214 Mississippi Street. The City owns the store at the Highway 65 location and currently has a lease with 12 CITY OF FRIDLEY, MINNESOTA –. FINANCIAL INFORMATION (CONTINUED) GENERAL GOVERNMENT FUNCTIONS (CONTINUED) — Liquor Fund (Continued) — one year options at the other store. In 1984, the City changed its sales philosophy to the wholesale approach so that we could remain competitive with the three neighboring communities which use wholesale pricing. Retained earnings of the Liquor Fund were $939,821 on December 31, 1988 as compared to $906,347 at the closing of the last fiscal year. Public Utility Fund This fund accounts for the operation and financing if the City-owned sewer and water systems. Included in the assets of the fund is a receivable from the Metropolitan Waste Control Commission of $249,305 which represents the City's share of the equity in the Minneapolis Sewer System which was acquired by the Commission on January 1, 1971. This amount will be paid to the City by means of issuing credits against future sewer billings from the Commission. These credits will be applied in annual installments with interest through 1999. "' The assets for the Water and Sewer Distribution system, originally financed by special assessments, were transferred from General Fixed Assets to the Public Utility Fund in 1978. Additional Fixed Assets were transferred in 1979 and 1984. 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, 1988 were $7,658,413 compared to $7,426,340 at the closing of the last fiscal year. NMI OTHER INFORMATION — PENSIONS Employees in the City of Fridley are covered by five pension plans: 1) Fridley Fire Relief Association for Volunteer Firemen. - 2) Fridley Police Relief Association, for Police Officers hired prior to December 15, 1975. 3) Public Employees Retirement Police and Fire Plan, covering the City's full-time Firemen - and Police Officers hired after December 15, 1975. 4) The basic Public Employees Retirement Plan, which covers certain other City civilian employees. 5) Coordinated Public Employees Retirement Plan, which covers the balance of the City civilian employees. The employees covered by the Coordinated P.E.R.A. Plan are also covered by Social Security. The City is currently making all pension contributions required by law. — For additional background information on the pension plans covering City employees, see Notes to the Financial Statements. 13 CITY OF FRIDLEY, MINNESOTA OTHER INFORMATION (CONTINUED) — 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 the George M. Hansen Company P.A., Certified Public Accountants 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, 1987. 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 the Finance Department, with special recognition to Julia Hammerstrom for — typing this report, and the professional guidance of George M. Hansen Company, P.A. 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, rN • - Lb? — Richard D. Pribyl Julie M. Burt Finance Director Assistant Finance Director 14 _. - 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, 1987 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. oot or„ ------ ae.,e== arr,. _ k eFnE '..t. 1 Alllf2 aP �" R 19 s`"F.ur President ac.a 111, hfr,,,,,9‘,,,e Executive Director — 15 FINANCIAL SECTION i AUDITOR'S OPINION MNO G N.'1I-Ico GEORGE M. HANSEN COMPANY, P.A. A Professional Corporation of Cenired Public Accountants INDEPENDENT AUDITORS' REPORT City Council City of Fridley Fridley, Minnesota We have audited the accompanying general purpose financial statements of the City of Fridley, Minnesota as of December 31, 1988 and for the year then ended, listed in the foregoing table of contents. These financial statements and the supplemental statements and schedules discussed below are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, such general purpose financial statements present fairly, in all material respects, the financial position of the City of Fridley, Minnesota at December 31, 1988 and the results of its operations and the changes in financial position of its proprietary fund types for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The combining, individual fund and account group and supplemental information financial statements and schedules listed in the foregoing table of contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in our audit of the general purpose financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the general purpose financial statements taken as a whole. Our audit did not include the statistical information listed in the table of contents. .. !'l- 7/f May 1, 1989 1433 UTICA AVENUE SOUTH, SUITE 175 MINNEAPOLIS, MINNESOTA 55416 612/546-2566 17 • COMBINED FINANCIAL STATEMENTS The combined statements are intended to provide an overview and broad perspective of the City's financial position and operations. These statements present a summary set of information needed to control and analyze current operations to determine compliance with legal and budgetary limitations and to assist in financial planning. The following combined statements are presented: Combined Balance Sheet - All Fund Types and Account Groups Combined Statement of Revenues, Expenditures, and Changes in Fund Balances - All Governmental Fund Types and Expendable Trust Funds Combined Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General and Special Revenue Fund Types Combined Statement of Revenues, Expenditures, and Changes in Retained Earnings - All Proprietary Fund Types Combined Statement of Cash Flows - All Proprietary Fund Types CITY OF FRIDLEY, MINNESOTA COMBINED BALANCE SHEET- ALL FUND TYPES AND ACCOUNT GROUPS December 31, 1988 — Governmental Fund Types Special Debt Capital _ General Revenue Service Projects Assets Cash $ $129,273 $640,017 $489,486 Deposits with trustee 12,103,900 _ Investments 6,503,889 1,345,342 10,589,463 13,055,800 Receivables: Accounts 1,463 15,312 _ Taxes 285,019 600,858 Special Assessments 7,498 2,896,626 132,062 Mortgage 963,480 — Interest 863,641 190,039 Due from other funds 15,190 9,578 307,093 Due from other governments 50,923 89,172 19,910 _ Inventories, at cost 16,559 Prepaid expenditures/expenses Long term receivable _ Restricted asset: Investments, at cost 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 $7,728,992 $1,594,289 $26,239,584 $15,758,728 See Accompanying Notes to Financial Statements 20 Exhibit A-1 Fiduciary Proprietary Fund Types Fund Types Account Groups Totals Internal Trust and General General Long (Memorandum Only) Enterprise Service Agency Fixed Assets Term Debt 1988 1987 $378,247 $168,263 $5,620 $ $ $1,810,906 $999,805 12,103,900 12,452,500 4,556,248 1,909,796 65,704 38,026,242 39,884,551 623,075 2,113 641,963 587,771 627 886,504 760,449 3,036,186 3,386,985 963,480 959,960 1,053,680 678,182 331,861 105,433 ._ 16,843 1,010 177,858 275,747 366,302 382,861 418,716 128,404 128,404 153,970 ._ 249,305 249,305 272,131 20,000 2,167,615 2,167,615 1,789,790 13,367,847 129,275 28,342,789 41,839,911 38,394,949 23,339,588 23,339,588 25,961,003 8,505,412 8,505,412 7,263,997 $19,686,271 $2,208,344 $2,241,679 $28,342,789 $31,845,000 $135,645,676 $134,365,939 21 CITY OF FRIDLEY, MINNESOTA — COMBINED BALANCE SHEET- ALL FUND TYPES AND ACCOUNT GROUPS (CONTINUED) December 31, 1988 Governmental Fund Types Special Debt Capital General Revenue Service Projects — Liabilities and Fund Equity Liabilities Advance from city's general account $859,821 $69,824 $1,033 $1,064,490 _ Accounts payable 117,503 23,142 8,473 138,986 Deposits payable 13,306 116,488 Contracts payable 724,835 _ Salaries payable 174,147 3,487 1,259 Leave payable Deferred revenue 245,967 2,880,912 1,693,959 — Due to other funds 9,578 322,283 Due to other governments 53 2,029 233,085 Bonds payable — Total liabilities 1,410,797 98,482 2,899,996 4,295,385 Fund equity Contributed capital _ Investment in general fixed assets Retained earnings- — Reserved Unreserved Fund balance: — Reserved 734,837 17,451,900 8,580,051 Unreserved- Designated 4,780,036 10,133 2,386,844 _ Undesignated 803,322 1,485,674 5,887,688 496,448 Total retained earnings/ fund balance 6,318,195 1,495,807 23,339,588 11,463,343 Total fund equity 6,318,195 1,495,807 23,339,588 11,463,343 Total liabilities and fund equity $7,728,992 $1,594,289 $26,239,584 $15,758,728 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 1988 1987 $ $ $106 $ $ $1,995,274 $998,396 127,408 66,952 482,464 343,256 2,209,372 2,339,166 1,972,508 5,000 729,835 378,503 27,786 206,679 148,040 788,798 788,798 798,153 563 4,821,401 4,993,975 331,861 105,433 66,658 6,313 308,138 40,759 31,845,000 31,845,000 33,245,000 226,852 855,750 2,216,354 -0- 31,845,000 43,848,616 43,024,023 1 0,861,185 10,861,185 10,861,185 28,342,789 28,342,789 25,659,551 1,352,594 1,352,594 730,963 8,598,234 8,598,234 8,332,687 26,766,788 27,973,898 7,177,013 7,649,444 25,325 8,698,457 10,134,188 8,598,234 1,352,594 25,325 -0- -0- 52,593,086 54,821,180 19,459,419 1,352,594 25,325 28,342,789 -0- 91,797,060 91,341,916 $19,686,271 $2,208,344 $2,241,679 $28,342,789 $31,845,000 $135,645,676 $134,365,939 23 CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES -ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS — Year Ended December 31, 1988 Governmental Fund Types — Special Debt General Revenue Service Revenues: — Taxes and special assessments $2,806,081 $ $890,882 Licenses and permits 321,065 57,488 Intergovernmental revenue 2,888,424 408,690 — Charges for services 160,255 Fines and forfeits 292,293 Interest on investments 383,248 129,273 898,826 — Miscellaneous 111,469 60,118 Total revenues 6,962,835 655,569 1,789,708 Expenditures: Current General government 1,133,256 377,234 Public safety 2,741,465 — Civic center 205,654 Public works 2,014,957 Recreation and naturalist 589,771 — Debt service 2,752,080 Capital outlay 495,313 138,231 Total expenditures 7,180,416 515,465 2,752,080 — Excess(deficiency) of revenues over expenditures (217,581) 140,104 (962,372) Other financing sources(uses): Operating transfers in 197,000 1,041,897 Operating transfers out (518,155) (205,683) (443,851) — Total other financing sources(uses) (321,155) (205,683) 598,046 Excess(deficiency) of revenues and other financing sources over expenditures — and other financing uses (538,736) (65,579) (364,326) Fund Balance January 1 6,856,931 1,561,386 25,960,999 — Residual Equity Transfer in (out) (2,257,085) Fund Balance December 31 6,318,195 1,495,807 23,339,588 See Accompanying Notes to Financial Statements — 24 IF-- Exhibit A-2 r_ r_ IT Fiduciary IF-- Fund Type Totals Capital Trust and (Memorandum Only) Projects Agency 1988 1987 $1,599,557 $ $5,296,520 $4,767,980 I378,553 405,583 53 03 Nib qzN 3�7L 0383,8 ,917 3,302,438 160,255 164,617 I292,q96 3 293 282,914 9 06 i 5,620 2,3 ,473 2,436,759 2 q i3, 3$. 67,299 238,886 371,658 I ` 3,110,165 5,620 12,523,897 11,731,949 I _ 856,289 365 2,367,144 1,927,151 2,741,465 2,707,681 I 205,654 160,222 1 2,014,957 1,992,949 589,771 530,066 I = 50,947 2,803,027 2,248,809 3,929,444 4,562,988 3,666,026 4,836,680 365 15,285,006 13,232,904 (1,726,515) 5,255 (2,761,109) (1,500,955) I - 2,822,285 4,061,182 1,605,369 (2,847,652) (4,015,341) (1,610,264) (25,367) -0- 45,841 (4,895) I � (1,751,882) 5,255 (2,715,268) (1,505,850) I — 11,358,140 20,070 45,757 526 47,263,376 I — 1,857,085 (400,000) 11,463,343 25,325 42,642,258 45,757,526 Li_. 25 CITY OF FRIDLEY, MINNESOTA ,_„ COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUND TYPES `" Year Ended December 31, 1988 General Fund - Variance Favorable Budget Actual (Unfavorable) Revenues: Taxes and special assessments $2,804,896 $2,806,081 $1,185 Licenses and permits 321,100 321,065 (35) - Intergovernmental revenue 2,750,375 2,888,424 138,049 Charges for services 147,875 160,255 12,380 Fines and forfeits 245,264 292,293 47,029 Interest on investments 379,698 383,248 3,550 Miscellaneous 110,707 111,469 762 Total revenues 6,759,915 6,962,835 202,920 - Expenditures: Current - General government 1,177,652 1,133,256 44,396 Public safety 2,857,574 2,741 ,465 116,109 Civic center 233,736 205,654 28,082 Public works 2,068,960 2,014,957 54,003 Recreation and naturalist 592,291 589,771 2,520 Reserve for contingencies 20,651 20,651 - Capital outlay 635,999 495,313 140,686 Total expenditures 7,586,863 7,180,416 406,447 Excess (deficiency) of revenues over expenditures (826,948) (217,581) 609,367 Other financing sources (uses): - Operating transfers in 197,000 197,000 Operating transfers out (614,452) (518,155) 96,297 Total other financing sources (uses) (417,452) (321,155) 96,297 - Excess (deficiency) of revenues and other financing sources over expenditures - and other financing uses (1,244,400) (538,736) 705,664 Fund balance January 1 6,856,931 6,856,931 -0- - Fund Balance December 31 $5,612,531 $6,318,195 $705,664 See Accompanying Notes to Financial Statements - 26 - Exhibit A-3 Totals Special Revenue Fund Types (Memorandum Only) Variance Variance- Favorable Favorable _, Budget Actual (Unfavorable) Budget Actual (Unfavorable) $ $ $ $2,804,896 $2,806,081 $1,185 - 53,921 57,488 3,567 375,021 378,553 3,532 732,098 408,690 (323,408) 3,482,473 3,297,114 (185,359) 147,875 160,255 12,380 - 245,264 292,293 47,029 126,663 129,273 2,610 506,361 512,521 6,160 68,449 60,118 (8,331) 179,156 171,587 (7,569) - 981,131 655,569 (325,562) 7,741,046 7,618,404 (122,642) 385,712 377,234 8,478 1,563,364 1,510,490 52,874 2,857,574 2,741,465 116,109 233,736 205,654 28,082 2,068,960 2,014,957 54,003 592,291 589,771 2,520 - 148,845 138,231 10,614 784,844 633,544 151,300 534,557 515,465 19,092 8,100,769 7,695,881 404,888 - 446,574 140,104 (306,470) (359,723) (77,477) 282,246 197,000 197,000 (499,824) (205,683) 294,141 (1,114,276) (723,838) 390,438 - (499,824) (205,683) 294,141 (917,276) (526,838) 390,438 (53,250) (65,579) (12,329) (1,276,999) (604,315) 672,684 - 1,561,386 1,561,386 -0- 8,418,317 8,418,317 -0- $1,508,136 $1,495,807 ($12,329) $7,141,318 $7,814,002 $672,684 27 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, 1988 Proprietary Fund Types Totals Internal (Memorandum Only) - Enterprise Service 1988 1987 Sales and cost of sales: - Sales $2,439,148 $ $2,439,148 $2,596,379 Cost of sales 1,992,782 1,992,782 2,192,231 Gross profit 446,366 -0- 446,366 404,148 - Operating revenues: Water sales and sewer rents 2,618,230 2,618,230 2,362,437 Other 107,512 107,512 111,377 Charges for services 313,630 313,630 403,238 Total operating revenues 2,725,742 313,630 3,039,372 2,877,052 Operating expenses: Personal services 803,302 803,302 737,793 _ Supplies and other charges 2,050,676 263,595 2,314,271 2,138,358 Depreciation 394,871 38,943 433,814 394,275 Total operating expenses 3,248,849 302,538 3,551,387 3,270,426 Operating income (loss) (76,741) 11,092 (65,649) 10,774 - Nonoperating revenues (expenses): Interest on investments 384,750 168,263 553,013 518,957 Debt service (380) (380) (1,646) - Other 3,759 42,276 46,035 34,829 Total non-operating revenues (expenses) 388,129 210,539 598,668 552,140 Income before operating transfers 311,388 221,631 533,019 562,914 Operating transfers in 4,159 4,159 14,895 Operating transfers out (50,000) (50,000) (10,000) Total operating transfers (45,841) -0- (45,841) 4,895 ._ Net income 265,547 221,631 487,178 567,809 - Retained earnings January 1 8,332,687 730,963 9,063,650 8,495,841 Residual equity transfers 400,000 400,000 -' Retained earnings December 31 $8,598,234 $1,352,594 $9,950,828 $9,063,650 See Accompanying Notes to Financial Statements - 28 - CITY OF FRIDLEY, MINNESOTA Exhibit A-5 COMBINED STATEMENT OF CHANGES IN FINANCIAL POSITION - ALL PROPRIETARY FUND TYPES - Year Ended December 31, 1988 Proprietary Fund Types Totals Internal (Memorandum Only) Enterprise Service 1988 1987 Sources of working capital: Operations: _ Net income for the year $265,547 $221,631 $487,178 $567,809 Items not required working capital-depreciation 394,871 38,943 433,814 394,275 Working capital provided by - operations 660,418 260,574 920,992 962,084 - Decrease in long term receivable 22,826 22,826 22,299 Net decrease in restricted assets 20,000 20,000 56,130 Residual equity transfer 400,000 400,000 Total sources of working capital 703,244 660,574 1,363,818 1,040,513 Uses of working capital: - Acquisition of property and equipment 1,092,691 102,847 1,195,538 895,098 Decrease in long term bonds payable 20,000 Decrease in long term advance capital improvement 25,000 Total uses of working capital 1,092,691 102,847 1,195,538 940,098 Increase (decrease) in working capital ($389,447) $557,727 $168,280 $100,415 - Elements of net increase (decrease) in working capital: Cash $374,927 $168,263 $543,190 ($139,711) - Investments (997,580) 419,053 (578,527) 670,511 Accounts receivable 79,148 79,148 (137,814) Interest receivable (28,588) Due from other governments (88,249) 1,010 (87,239) 43,884 Inventories, at cost (33,553) (33,553) (77,470) Prepaid expenses 1,903 1,903 (5,978) - Advance from city's general account 17,734 Accounts payable 27,868 (64,954) (37,086) 7,129 Contracts payable 274,917 274,917 (279,917) Salaries payable (9,588) (9,588) 1,104 Leave payable 9,355 9,355 (570) Due to other funds 25,000 25,000 1,771 ,.,, Due to other governments (39,240) (39,240) (1,670) Bonds payable 20,000 20,000 30,000 Increase (decrease) in - working capital ($389,447) $557,727 $168,280 $100,415 29 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1988 1. Summary of Significant Accounting Policies The City of Fridley was incorporated July 1, 1949, under Chapter 410.03 of the Statutes of the State of Minnesota providing for a council-manager form of government under the "Home Rule Charter City" concept. The City provides the following services as authorized by its charter: general administrative services, public safety (police and fire), public improvements, planning and zoning, and culture and recreation. The accounting policies of the City of Fridley conform to generally accepted accounting policies — applicable to governmental units. The following is a summary of the more significant policies: A. Principles used in the determination of the scope of the Governmental entity The City has implemented National Council on Governmental Accounting Statement 3, Defining the Governmental Reporting Entity. In accordance with Statement 3, for financial reporting purposes the City's financial statements include all funds, account groups, departments, — agencies, boards, commissions and other organizations over which City officials exercise oversight responsibility. Oversight responsibility includes such aspects as appointment of governing body members, budget approval, approval of property tax levies, outstanding debt secured by City full faith and credit or revenues, responsibility for funding deficits and others. Included within the reporting entity: Fridley Housing and Redevelopment Authority (HRA) - The HRA was created to provide •••• housing and redevelopment assistance to its citizens. The HRA provides this assistance through the administration of various programs. A majority of the funding is provided through the issuance of general obligation tax increment bonds guaranteed by the City. The City would also be responsible for deficits, therefore, the HRA is considered a component unit of the City. The —' operations of the HRA are reported in separate Debt Service and Capital Projects Funds. Excluded from the reporting entity: — Independent School District #11/Independent School District #13/Independent School District #14/Independent School District #16 -These four school districts either reside wholly within the City of Fridley or overlap within the city boundaries. According to Minnesota State Statutes, Minnesota school districts are totally independent of all other governing jurisdictions. The City has no authority to appoint board members and has no fiscal responsibility. School districts are able to levy taxes and issue debt in their own name. Fridley Police and Volunteer Firefighters Relief Associations - These associations are organized as non-profit organizations by their members to provide pension and other benefits _ to such members in accordance with Minnesota Statutes. Their boards of directors are elected by the membership of the association. All funding is conducted in accordance with Minnesota Statutes, whereby state aids flow to the associations, tax levies are determined by the associations and are only reviewed by the City. The associations pay benefits directly to their — members. The associations may certify tax levies to the County directly if the City does not carry out this function. Because the associations are able to fund their programs independently of the City, they are excluded from the reporting entity. (See Notes 9 and 10 for disclosures — relating to the pension plans operated by these organizations.) 30 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 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 eight 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). MIN 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. 31 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 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 these funds is the same as governmental funds and are 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 "financial flow" 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. — The 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. 32 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) "' DECEMBER 31, 1988 ,,,. 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 IBM 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 budget ordinance. — Upon adoption of the annual budget ordinance by the Council, it becomes the formal appropriation budget for City operations. — 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. 33 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 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. Formal budgetary integration is employed as a management control device during the year for the General Fund and Special Revenue 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 Capital Projects Funds is accomplished through the use of project controls. .... 8. Budgets for the General and Special Revenue Funds are adopted on a basis consistent with generally accepted accounting principles. 9. Budgetary control is maintained at the expenditure category level within each division. Budgetary control, by departments or divisions, and by category is required by the City Charter. — 10. The General Fund budget includes prior year encumbrances which were reappropriated to the current year. Expenditures for the items encumbered are included in the current year's expenditures. - F. Assets, Liabilities and Fund Equity 1) Cash and 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. Investments are stated at cost which approximates market. — The City provides temporary advances to funds that have insufficient cash balances by means of an advance from the general account. This is classified as a liability of the — fund until adequate resources are received. 34 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 1. Summary of Significant Accounting Policies (Continued) F. Assets, Liabilities and Fund Equity (Continued) 2) Deposits with Trustee Deposits with Trustee represent the net proceeds after issuance costs from the sale of two bond issues; 1) $9,600,700 Crossover Tax Increment Refunding Bonds of 1986 and 2) $2,503,200 Crossover Improvement Refunding Bonds of 1986. The proceeds are being used to refund 85% of the principal on the 1985 Variable Rate Issues and pay 100% of the interest on themselves. 3) Receivables Property Taxes Property tax levies are set by the City Council in October each year and are 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. 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. OMIN Cities in Minnesota operate under a levy limitation law which allows an increase in the tax levy each year equal to the Implicit Price Deflator increase or 5%, whichever is greater, further indexed by the percentage increase in households or population, whichever is greater. Levies for bonded indebtedness are not limited by the law. Taxes payable on homestead property (as defined by State Statutes) are partially reduced by a homestead credit. This credit is paid to the City by the State in lieu of taxes levied against homestead property. The State remits this credit in two equal installments in July and December each year. NMI 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 35 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 1. Summary of Significant Accounting Policies (Continued) F. Assets, Liabilities and Fund Equity (Continued) 3) 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. Delinquent - amounts billed to property owners but not paid. Deferred - assessment installments which will be billed to property owners in future years. 4) Inventories Inventories are stated at the lower of F.I.F.O. cost or market based on perpetual inventory systems. Inventory in the General Fund consists of expendable supplies held for consumption. 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). 5) 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 36 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31, 1988 — 1. Summary of Significant Accounting Policies (Continued) F. Assets, Liabilities and Fund Equity (Continued) — 5) 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: Land Improvements 20 - 50 years Buildings 20 - 50 years — Furniture and Fixtures 5 - 10 years Machinery and Equipment 5 - 10 years Other Improvements 20 years 6) Other Assets This account represents the market value of investments and other assets held in trust — for the City's deferred compensation plan. (See Note 15.) 7) Annual Leave The personnel ordinance limits the annual accumulation of benefits that can be accumulated from year to year. The Employee Benefits Internal Service Fund reflects the City's accrued liabilities for annual leave and other benefits for all City employees. — That liability is stated in the Employee Benefits Funds and represents the maximum possible dilution of fund assets by retirements or extended approved leaves by employees. — 8) 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 as they are not available to finance current expenditures. General property taxes and special assessments are recognized when cash is received to prevent overstating due to delinquencies. Principal Portion of Special Assessments-Revenue is recognized in the year the assessments are collected. — Interest Revenue on Special Assessments Receivable - Interest revenue is recognized in the year of collection of the current principal installment. 37 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 _ 1. Summary of Significant Accounting Policies (Continued) G. Revenues, Expenditures and Expenses (Continued) 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 such as in the State Aid Fund. Interest on Investments - Interest is recorded as revenue in the year earned. — Water and Sewer Service Charges - Revenue is recognized when earned with no allowance for uncollectibles as delinquent accounts are certified as a special assessment lien against the property billed. Unbilled service charges are included in receivables at year-end. Other Revenues - Licenses, fines, penalties and miscellaneous revenues are recorded as revenues when received in cash because they are generally not measurable until actually — received. Interest Expense on Bonded Indebtedness - Interest expense is recorded as an expenditure — when paid in the governmental fund types and accrued when incurred in the proprietary fund types. Bond and Interest Payments Due January 1 - Expenditures are recognized when amounts are — remitted to the paying agent (usually in December) for payment of bonds and interest. H. Comparative Data — Comparative total data for the prior year have been presented in the accompanying combined financial statements in order to provide an understanding of changes in the City's financial — position and operations. However, comparative (i.e., presentation of prior year totals by fund type) data have not been presented in all statements since their inclusion would make the statements unduly complex and difficult to read. Total columns on the combined statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or changes in financial position in conformity with — generally accepted accounting principles. Interfund eliminations have not been made in the aggregation of this data. Certain 1987 amounts have been reclassified to conform to the 1988 presentation. 38 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 2. Deposits and Investments Deposits and investments at year end consists of the following: Bank deposits with maturities under 1 year $2,509,544 U.S. Government securities 10,784,171 U.S. Government agencies or instrumentalities 17,698,774 Commercial paper 4,612,175 Repurchase agreements 2,237,210 37,841,874 In accordance with applicable Minnesota Statutes, the City maintains deposits at depository banks authorized by the City Council. All such depositories are members of the Federal Reserve System. Minnesota Statutes require that all deposits be protected by insurance, surety bond or collateral. If collateral is pledged as protection for the deposits, State statutes require that it be held by a third party in the City's name. The market value of the collateral must at a minimum be 110% of the deposits not covered by insurance or bonds (140% in the case of mortgage backed collateral). Repurchase agreements are intentionally overcollateralized at 105% to insure that the safety of investment principal is attained and losses do not occur from rapid overnight deterioration. State statutes authorize the City to invest in all the types of instruments shown above and due care is taken to insure the safety of principal. 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 Bank deposits with maturities under 1 year $2,509,544 $ $ $2,509,544 $2,495,632 U.S. Government securities 9,784,171 1,000,000 10,784,171 10,555,043 U.S. Government agencies or instrumentalities 17,698,774 17,698,774 17,164,896 Commercial paper 4,612,175 4,612,175 4,612,175 Repurchase agreements 2,237,210 2,237,210 2,237,210 Total investments $36,841,874 $ -0- $1,000,000 $37,841,874 $37,064,956 39 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 ... 2. Deposits and Investments (Continued) The City's investments are categorized above 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 brokers or dealers trust department or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the broker or dealer, or by its trust department or agent but not in the City's name. The Category 1 securities consist of the various investment types shown above which are held by a — trustee in the City's name. Deposits and Investments per accompanying financial statement: — Cash $1,810,906 Investments 38,026,242 Advance from city's general account (1,995,274) — Total $37,841,874 3. Special Assessments Receivable Special assessments receivable at December 31, 1988 are as follows: Special Special Assessment Assessment Capital General Debt Service Projects Total Unremitted $281 $15,714 $61 $16,056 Delinquent 5,424 194,842 2,030 202,296 Deferred 1,793 2,686,070 129,971 2,817,834 — Total $7,498 $2,896,626 $132,062 $3,036,186 40 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 4. Due From Other Governments Amounts due from other governments at December 31, 1988 are as follows: General Fund: U.S. Treasury- Gasoline Tax Refund $2,827 State of Minnesota a) State Aid - Maintenance 12,657 b) Civil Defense 1,820 c) St. Cloud State University- Purchase of Asset 5,888 Anoka County a) Fines and Forfeits 25,356 b) Gas Reimbursement 43 c) DWI Grant Reimbursement 1,537 City of Hilltop, Fire Protection Service 795 $50,923 Special Revenue Funds: State of Minnesota a) MSA - Construction, Money Expended in 1984 $5,461 _ b) MSA - Construction, Money Expended in 1987 12,206 c) Section 8 Housing 5,130 d) Prevention Troop Grant 430 _ Anoka County a) Community Development Block Grant 46,471 b) Recycling 19,474 $89,172 Capital Projects Funds: Special Assessment Fund - State of Minnesota, Water Reclamation $19,910 Enterprise Funds: Utility Funds: Metropolitan Waste Control Commission (MWCC) - Current portion of amounts due from MWCC $16,843 Non-current portion - long term receivable of amounts due from MWCC $249,305 Internal Service Funds: r Self-Insurance Fund - Anoka County- Restitution $1,010 41 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 4. Due From Other Governments (Continued) The non-current receivable in the Utility Enterprise Fund represents: 1. The balance due for the sale of the City's sewer interceptors is $236,217 (the interceptors were sold to the Metropolitan Waste Control Commission January 1, 1971). This receivable will be paid to the City in annual installments with interest through 1999. Repayment will be made by issuing credits against future disposal charges from the Commission. 2. The amount of $13,088, which will be repaid with interest through 1998, is for advances made to the Commission during 1971 and 1972. 5. Changes in General Fixed Assets A summary of changes in general fixed assets are as follows: — Balance Balance — Jan 1, 1988 Additions Deletions Dec 31, 1988 Land $1,767,078 $95,076 $1,862,154 — Buildings 1,782,837 1,282,552 549,901 2,515,488 Improvements other than buildings 17,919,508 743,300 8,452 18,654,356 Machinery and equipment 2,680,880 524,645 258,530 2,946,995 — Construction in progress 1,509,248 1,039,204 184,656 2,363,796 Total $25,659,551 $3,684,777 $1,001,539 $28,342,789 Construction in progress is composed of the following: — Contracted Expended to Unexpended Amount Dec 31, 1988 Balance — Moore Lake Improvement $986,194 $1 ,162,039 ($175,845) Water and Sewer#183 "'" 35,611 (35,611) — Water and Sewer#185 "* 10,298 (10,298) 1988 Street Projects 987,771 1,155,848 (168,077) Total $1,973,965 $2,363,796 ($389,831) ** These contracts have not been awarded 42 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) -• DECEMBER 31, 1988 6. Summary of Proprietary Fund Property and Equipment A summary of proprietary fund type property, plant and equipment at December 31, 1988 follows: �- Internal Enterprise Service Management Public Information Liquor Utility Services Total Land $66,961 $154,881 $ $221,842 Buildings 174,116 1,520,486 1,694,602 Improvements other than buildings 18,677 1,562,237 1,580,914 Machinery and equipment 208,963 2,189,740 310,258 2,708,961 Water and sewer lines 10,861,185 10,861,185 468,717 16,288,529 310,258 17,067,504 Less: _ Accumulated depreciation (214,974) (3,174,425) (180,983) (3,570,382) Net property and equipment $253,743 $13,114,104 $129,275 $13,497,122 7. Long-Term Debt The following is a summary of long-term debt transactions of the City for the year ended December 31, 1988: General Enterprise Long-Term Funds Debt Total Bonds payable at _ January 1, 1988 $20,000 $33,225,000 $33,245,000 Bonds retired (20,000) (1,380,000) (1,400,000) Bonds payable at December 31, 1988 $ -0- $31,845,000 $31,845,000 Bonds payable at December 31, 1988 are comprised of the following individual issues (in thousands of dollars): General Long-Term Debt: $2,135,000 G.O. Special Assessment Bonds of 1972 due in varying annual installments of$50,000 - $75,000 through January 1, 1994; interest at 5.20% - 5.30% $ 250 43 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 7. Long-Term Debt (Continued) $1,550,000 Special Assessment Bonds of 1976 due in varying annual installments of $25,000 through February 1, 1990; interest at 5.80% - 6.00% $ 50 $1,115,000 Special Assessment Bonds of 1977 due in varying annual installments of $50,000 - $115,000 through February 1, 1989; interest at 4.90% 50 $1,755,000 Special Assessment Bonds of 1980 due in varying annual installments of $25,000 - $155,000 through February 1, 2001; interest at 7.40% - 8.40% 700 — $1,425,000 Special Assessment Bonds of 1982 due in varying annual installments of $15,000 - $175,000 through February 1, 1999; interest at _ 9.40% - 10.70% 680 $3,100,000 Variable Rate Improvement Bonds of 1985 due in varying annual installments of $178,250 - $385,250 through February 1, 2000; interest will — vary depending on economic condition with a ceiling of 11% per annum 2,945 $2,705,000 Refunding Improvement Bonds of 1986 due in varying annual — installments of $140,000 - $290,000 through February 1, 2000; interest at 6.00% - 7.40% 2,565 $4,070,000 Tax Increment Revenue Refunding Bonds of 1985 due in varying — annual installments of$180,000-$460,000 through February 1, 1999; interest at 6.75% - 9.00% 3,495 — $11,550,000 Variable Rate Tax Increment Bonds of 1985 due in varying annual installments of $293,250 - $2,800,250 through February 1, 2000; interest will vary depending on economic conditions with a ceiling of 10% per annum 11,295 — $10,045,000 General Obligation Tax Increment Refunding Bonds of 1986 due in varying annual installments of$230,000 - $2,095,000 through February 1, _ 2000; interest at 6.00% - 7.40% 9,815 9 31,845 44 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 7. Long-Term Debt (Continued) Annual Requirements to Amortize Long-Term Debt December 31, 1988 General Obligation Year Ending Special December 31 Assessment Redevelopment Total 1989 $1,030,248 $2,015,401 $3,045,649 1990 767,327 1,517,445 2,284,772 1991 668,023 1,546,964 2,214,987 1992 567,943 1,641,470 2,209,413 1993 525,783 1,665,064 2,190,847 1994 - 1998 1,934,696 8,681,515 10,616,211 1999 - 2001 707,554 3,949,205 4,656,759 .... $6,201,574 $21,017,064 $27,218,638 The preceding debt service requirements do not include interest on the Variable Rate Improvement and Tax Increment Bonds of 1985 due to their uncertainty. Currently rates approximate 6%. There is, however, a ceiling of 11% and 10% respectively. It should also be noted that$12,103,900 is being held in escrow to make principal payments on the variable rate bonds and interest payments on the crossover bonds. The debt service on the variable rate issues is completely eliminated in the year 1990 as the City will crossover to the fixed rate General Obligation Bonds of 1986 at this time. $23,339,588 is available in the Debt Service Fund to service the General Obligation Bonds. The Tax Increment Revenue Bonds are payable primarily from increment revenue that is generated from the related district. 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 7.33% of the most recent assessed valuation less certain deductions. At December 31, 1988, the legal debt margin was $16,828,234. A. Prior-Year Defeasance of Debt In prior years, the City defeased certain general obligation (and other) bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. At December 31, 1988, $3,375,000 of bonds outstanding are considered defeased. 45 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 8. Defined Benefit Pension Plans-Statewide A. Plan Description The majority of 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, 1988, was$3,433,350 and $802,866, respectively; the City's total payroll was $4,742,709. —' PERA provides retirement benefits as well as disability benefits to members, and benefits to survivor upon death of eligible members. Benefits are established by State Statute, and vest — after five years of credited service. The defined retirement benefits are based on member's average salary for any five successive years of allowable service, age, and years of credit at termination of service. 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. For PEPFF members, the annuity accrual rate is 2.5 percent of average salary for each of the first 25 years and 2 percent for each remaining — year. For both PERF and PEPFF, members are eligible for a full annuity when age plus years of service equal 90. There are different types of annuities available to members upon retirement. A normal annuity is a lifetime annuity that ceases upon the death of the retiree. No survivor annuity is payable. There are also various types of joint and survivor annuity options available which will reduce the — monthly normal annuity amount, because the annuity is payable over joint lives. Members may also leave their contributions in the fund upon termination of public service, in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. — B. Contributions Required and Contributions Made Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. The -"- City makes annual contributions to the pension plans equal to the amount required by State statutes. Minnesota Statutes Chapter 356.215, Subdivision 4 (g) provides the formula for determining the date of full funding for the PERF and the PEPFF. Those dates are 2010 and — 2018 respectively. As part of the annual actuarial valuation, PERA's actuary determines the sufficiency of the statutory contribution rates towards meeting the required full funding deadline. The actuary compares the actual contribution rate to a "required" contribution rate. Current _ statutory contribution rates and actuarially required contribution rates for the plans are as follows: 46 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31, 1988 8. Defined Benefit Pension Plans-Statewide (Continued) B. Contributions Required and Contributions Made (Continued) - Statutory Rates: Required Employees Employer Rates — PERF: Basic plan 8% 10.50% 9.46% Coordinated plan 4% 4.25% 5.11% - PEPFF 8% 12% 15.97% Total contributions made by the City during fiscal year 1988 were: — Percentage of Amounts Covered Payroll Employees Employer Employees Employer — PERF: Basic plan $48,437 $63,573 8% 10.50% — Coordinated plan 91,624 97,352 4% 4.25% PEPFF 73,809 110,713 8% 12.00% Total $213,870 $271,638 The City's contribution for the year to the PERF represented .21 percent of total contributions required of all participating entities. For the PEPFF, contributions for the year ended June 30, 1988, represented .55 percent of total contributions required of all participating entities. C. Funding Status and Progress - 1. Pension Benefit Obligation The "pension benefit obligation" is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and step- rate benefits, estimated to be payable in the future as a result of employee service to date. The measure, which is the actuarial present value of credited projected benefits, is intended to 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. PERA does not make separate measurements of assets and pension benefit obligation — for individual employers. — 47 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 8. Defined Benefit Pension Plans-Statewide (Continued) C. Funding Status and Progress (Continued) 1. Pension Benefit Obligation (Continued) The pension benefit obligations of the PERA as of June 30, 1988, were as follows: Public Public — Employees Employees Retirement Police & Fund Fire — (PERF) (in millions) (PEPFF) Total pension benefit obligations $3,334 $513 — Net assets available for benefits, at market 2,749 584 — Unfunded pension benefit obligation $585 ($71) The measurement of the pension benefit obligation is based on an actuarial valuation as of June 30, 1988. Net assets available to pay pension benefits were valued as of June 30, 1988. _ 2. Change in Actuarial Methods Prior to fiscal year 1988, the mortality table used was the UP-1984 Unisex set forward — one year for males and set back four years for females. For fiscal year 1988, the PERA Board of Trustees approved the use of the 1971 Group Annuity Mortality Table projected to 1984 for males and females. The change was made in order to reduce, if not — eliminate, the series of large, annually recurring mortality losses that have been realized in the last four years. With the adoption of the new mortality table, the projected benefit obligation increased $179,670,000 in the Public Employees Retirement Fund and $18,805,000 in the Public Employees Police and Fire Fund. 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, 1988. 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, 1988, and for the fiscal year then ended, PERA held no securities issued by the — City or other related parties. 48 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31, 1988 8. Defined Benefit Pension Plans-Statewide (Continued) —. F. Federal Insurance Contribution Act (Social Security) — Approximately sixty (60%) percent of the permanent City employees are covered by Social Security. The 1988 contribution rate was 7.51% on $45,000 in wages. The cost of Social Security for 1988 was $166,919. In addition, as of April 1, 1988 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 with an equal match made by the City. The 1988 cost for Medicare was $6,012. 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. The City's annual payroll was $4,742,709. There are no payroll earnings for volunteer firefighters subject to pension contributions; however, in accordance with the Associations by laws, each active and deferred member contributes $150 per year to the — Association. The City also remitted$88,820 and$86,014 in State Aid to the Association for 1988 and 1987 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. 49 — CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 — 9. Defined Contribution Pension Plan - Fridley Volunteer Firefighter Relief Association (Continued) — A. Plan Description (Continued) 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 1988 and as of December 31, 1988 the Association held no securities issued by the City or other related parties. — 10. Defined Benefit Pension Plan - Fridley Police Relief Association A. Plan Description The City contributes to the Fridley Police Relief Association (Association), a single-employer _ public employee retirement system that acts as a common investment and administrator for the City's police officers. The City's payroll for employees covered by the Association for the year ended December 31, 1988 was $522,557; the City's total payroll was $4,742,709. Police officers of the City hired prior to December 15, 1975, are members of the Association. Police officers hired after December 15, 1975 are members of the PERA Public Employees Police and Fire Fund. Association members are entitled to the following benefits: — Age and Service Retirement Eligibility 50 years of age and 10 years of service -- Amount For first 10 years of service, 15/75 of base pay. For each year in excess of 10, an additional 2/75 is added. For each year in excess of 20, an additional 1/75 is added up to — a maximum of 42/75 of base pay. Pay Used for Plan Purposes For benefit determination purposes, "base pay" means the — salary of a first grade patrolman for the second month of the previous fiscal year. For contribution purposes, it means the present base pay of a first grade patrolman. Disability Retirement Eligibility Disabled to the extent that member is no longer able to perform the duties of a police officer before being eligible for age and service retirement. Amount 36/75 of base pay. Member's Death while Active, or in Deferred Status or Retired — Eligibility Spouse Legally married to member at least one year prior to separation from service and — residing with member at time of death. Benefits terminate upon remarriage. Child Younger than age 18. 50 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) — DECEMBER 31, 1988 10. Defined Benefit Pension Plan - Fridley Police Relief Association (Continued) A. Plan Description (Continued) Member's Death while Active, or in Deferred Status or Retired (Continued) — 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 of 36/75 if no spouse is receiving. OMR 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 Adjustment ("Escalator) Each time base pay is changed, payments to all benefit recipients are simultaneously changed by the same percent that base pay is changed. (Exception - For members on age and service retirement with less than 20 years service, the maximum increase is 3% compounded annually. Also, applies to survivors of these retirants). Police officers who are members of the Association are required to pay 8 percent of their base pay to the Association; 75 percent of the member's contribution is refundable, without interest, AIMM if no benefit is payable upon separation of service. The City makes annual contributions to the relief association equal to the amount required by state statutes. ..... B. Related Party Investments During 1988 and as of December 31, 1988, the Association held no securities issued by the City or other related parties. C. 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 (i) help — users assess the plan's funding status on a going-concern basis. (ii) assess progress being made in accumulating sufficient assets to pay benefits when due, and (iii) 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 an actuarial valuation of the plan as - of December 31, 1987. Significant actuarial assumptions used in determining the pension benefit obligation include (a) a rate of return on the investment of present and future assets of 5.0% per year compounded annually, (b) projected salary increases of 3.5% per year compounded annually, attributable to inflation, and (c) the assumption that benefits will increase "' 3.5% per year after retirement. IMIM O M 51 — CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 10. Defined Benefit Pension Plan - Fridley Police Relief Association (Continued) r C. Funding Status and Progress (Continued) As of December 31, 1987 and 1986, (actuarial report dates), the unfunded pension benefit obligation was determined as follows: — 1987 1986 Pension Benefit Obligation: Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits $3,535,848 $3,377,784 — Current employees -- Accumulated employee contributions including allocated — investment income 355,539 319,741 Employer financed 1,828,518 1,646,571 Total Pension Benefit Obligation 5,719,905 5,344,096 Net assets available for benefits, at cost (market value was$4,109,012 for 1986 and $4,515,633 for 1987) 4,472,027 3,914,659 — Unfunded Pension Benefit Obligation $1,247,878 $1,429,437 Net assets available/Pension benefit obligation 78.18% 73.25% Unfunded pension benefit obligation/ Annual covered payroll 269.42% 319.39% — Employee contributions/Annual covered payroll 34.49% 52.76% No changes in actuarial assumptions or benefit provisions that would significantly affect the '" valuation of the pension benefit obligation occurred during 1988. D. Contributions Required and Contributions Made — Financial requirements of the Association are determined on an actuarial basis using the entry age normal actuarial cost method. Normal cost is funded on a current basis. The unfunded — actuarial accrued liability is to be funded by December 31, 2010. The City's minimum obligation is the financial requirement for the year less anticipated member contributions and state aids. Any additional payments by the City shall be used to amortize the unfunded liability of the Association. The funding strategy for normal cost and the unfunded actuarial accrued liability — should provide sufficient resources to pay Association benefits on a timely basis. Total contributions to the Association in 1988 amounted to $47,650, of which $14,772 and $32,878 were made by the City and its police officers respectively. The contributed amounts were actuarially determined as described above and were based on an actuarial valuation as 52 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 10. Defined Benefit Pension Plan - Fridley Police Relief Association (Continued) D. Contributions Required and Contributions Made (Continued) .., of December 31, 1987. $144,967 was received in state aids that were remitted to the Association. The contributions represent funding for normal cost$139,418 and the amortization of the unfunded actuarial accrued liability $107,690. Contributions made by the City and its police officers represent 30.6 percent and 6.3 percent, respectively, of covered payroll for the year. Significant actuarial assumptions used to compute pension contribution requirements are substantially the same as those to determine the standardized measure of the pension obligation. The computation of the pension contribution requirements for 1988 was based on the same actuarial assumptions, benefit provision, actuarial funding method, and other significant factors used to determine pension contribution requirements in previous years. E. 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. 11. Interfund Receivables and Payables Interfund receivables and payables at December 31, 1988 are as follows: Interfund Interfund Receivables Payables Due From/Due To: Special Revenue Fund - "" HRA Reimbursement Fund $15,190 $ Debt Service Funds - Special Assessment Funds 9,578 HRA Fund 9,578 Capital Projects Funds - Civic Center Improvements 261,422 Special Assessment Funds 45,671 HRA Fund 322,283 $331,861 $331,861 OMNI 53 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 12. Reserved Fund Balances/Retained Earnings r The following reservations have been made of various fund balances/retained earnings at December 31, 1988. Fund Balance General Fund Reserved for: Encumbrances $233,332 Park construction 484,946 Inventory 16,559 — 734,837 Debt Service Funds Reserved for Debt Service 17,451,900 Capital Projects Funds Reserved for: Encumbrances 673,798 — Construction 7,906,253 8,580,051 — Total $26,766,788 Retained Earnings Internal Service Funds Employee Benefits Fund — Reserved for employee benefits $603,406 Management Information Services Fund — Reserved for capital outlay 644,535 Self-Insurance Fund — Reserved for contingencies 104,653 $1,352,594 — 54 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 13. Designated Fund Balance The following designations have been made of various fund balances at December 31, 1988: _. General Fund: Working Capital $3,000,000 Subsequent Year's Expenditures 247,488 Replacement of Fixed Assets 1,532,548 4,780,036 Special Revenue Funds: Cable TV Fund- .. Subsequent Year's Expenditures 9,535 Grant Management Fund - Subsequent Year's Expenditures 598 10,133 ._ Capital Projects Funds: Capital Improvement Fund- Replacement of Fixed Assets 2,327,145 -. Park Improvement 59,699 2,386,844 Total $7,177,013 55 — CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 14. 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, 1988 is as follows: Total — Enterprise Liquor Utility Funds Sales (less cost of sales of$1,992,782) $446,366 $ $446,366 Operating revenues 2,725,742 2,725,742 — Operating expenses (402,106) (2,846,743) (3,248,849) Operating income (loss) 44,260 (121,001) (76,741) — Non-operating revenues (expenses) - net 39,214 348,915 388,129 Income before operating — transfers 83,474 227,914 311,388 Operating transfers from other _ funds -0- 4,159 4,159 Operating transfers to other funds (50,000) -0- (50,000) Net income $33,474 $232,073 $265,547 Depreciation expense included in operating expenses $25,888 $368,983 $394,871 — Property and equipment - Additions 1,092,691 1,092,691 Deletions (27,590) (27,590) — Working capital 686,078 5,156,189 5,842,267 Total assets 1,073,514 18,612,757 19,686,271 Fund equity- — Contributed -0- 10,861,185 10,861,185 Retained earnings $939,821 $7,658,413 $8,598,234 56 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1988 — 15. Deferred Compensation Plan The City offers its 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 plan, all property and rights purchased with those MIR 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, subject only to the claims of the City's general creditors. Participants' rights under the plan are equal to those of — general creditors of the City in an amount equal to the fair market value of the deferred account for each participant. It is the opinion of the City's legal counsel that the City has 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 are $2,167,615 stated at market on December 31, 1988 and are shown in the financial statements as "Other assets" in the agency funds with a corresponding credit to "Deposits payable". — 16. Litigation The City had the usual and customary type of miscellaneous claims pending at year-end, mostly of a NM minor nature and usually all covered by insurance carried for that purpose. At the present time, there is no significant litigation pending not covered by the City's insurance. — 17. Leases The City leases the property at 214 Mississippi from the Fridley Housing and Redevelopment Authority — for a warehouse liquor store. The City and Housing and Redevelopment Authority have a lease with one year options. Rental expense is $21,250 annually. N M OM IMII O MR IMMI OM 57 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, 1988 and 1987 1988 1987 - Assets Cash $ $995,862 - Investments 6,503,889 5,352,933 Receivables: Accounts 1,463 3,253 - Taxes - Unremitted 46,270 95,697 Delinquent 238,749 277,864 - Special Assessments- Unremitted 281 Delinquent 5,424 5,716 - Deferred 1,793 1,489 Interest 863,641 591,634 Due from other governments 50,923 31,265 - Inventories, at cost 16,559 18,861 Prepaid expenditures 27,469 Total assets $7,728,992 $7,402,043 - Liabilities and Fund Balance Liabilities: - Advance from city's general account $859,821 $ Accounts payable 117,503 117,420 Deposits payable 13,306 13,796 - Salaries payable 174,147 125,167 Deferred revenue 245,967 285,069 Due to other governments 53 3,660 Total liabilities 1,410,797 545,112 Fund balance: - Reserve for encumbrances 233,332 192,099 Reserve for park construction 484,946 464,076 Reserve for inventory 16,559 18,861 - Reserve for prepaid expenditures 27,469 Unreserved - Designated for working capital 3,000,000 3,000,000 Designated for subsequent year's expenditures 247,488 666,870 Designated for replacement of fixed assets 1,532,548 2,000,000 Undesignated 803,322 487,556 Total fund balance 6,318,195 6,856,931 Total liabilities and fund balance $7,728,992 $7,402,043 59 - 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, 1988 With Comparative Actual Amounts for Year Ended December 31, 1987 1988 Variance Favorable 1987 Budget Actual (Unfavorable) Actual Revenues: - Taxes and special assessments $2,804,896 $2,806,081 $1,185 $2,647,334 Licenses and permits 321,100 321,065 (35) 352,580 Intergovernmental revenue 2,750,375 2,888,424 138,049 2,861 ,677 - Charges for services 147,875 160,255 12,380 164,617 Fines and forfeits 245,264 292,293 47,029 282,914 Interest on investments 379,698 383,248 3,550 409,560 - Miscellaneous 110,707 111,469 762 303,939 Total revenues 6,759,915 6,962,835 202,920 7,022,621 Expenditures: Current General government 1,177,652 1,133,256 44,396 1,062,891 - Public safety 2,857,574 2,741,465 116,109 2,707,681 Civic center 233,736 205,654 28,082 160,222 Public works 2,068,960 2,014,957 54,003 1,992,949 Recreation and naturalist 592,291 589,771 2,520 530,066 Reserve for contingencies 20,651 20,651 Capital outlay 635,999 495,313 140,686 418,819 - Total expenditures 7,586,863 7,180,416 406,447 6,872,628 Excess(deficiency) of revenues - over expenditures (826,948) (217,581) 609,367 149,993 Other financing sources (uses): - Operating transfers in 197,000 197,000 138,576 Operating transfers out (614,452) (518,155) 96,297 (72,437) Total other financing sources(uses) (417,452) (321,155) 96,297 66,139 - Excess(deficiency) of revenues and other financing sources over expenditures and other financing uses (1,244,400) (538,736) 705,664 216,132 Fund balance January 1 6,856,931 6,856,931 -0- 6,640,799 Fund balance December 31 $5,612,531 $6,318,195 $705,664 $6,856,931 - 60 - Exhibit B-3 - CITY OF FRIDLEY, MINNESOTA GENERAL FUND ,_ SCHEDULE OF REVENUES AND OTHER FINANCING SOURCES - BUDGET AND ACTUAL Year Ended December 31, 1988 With Comparative Actual Amounts for Year Ended December 31, 1987 1988 Variance Favorable 1987 Budget Actual (Unfavorable) Actual Taxes and special assessments: Current ad valorem taxes $2,717,413 $2,639,599 ($77,814) $2,571,472 - Delinquent ad valorem taxes 42,500 140,144 97,644 45,917 Penalties and interest 36,234 20,795 (15,439) 24,581 Forfeited sale-taxes 2,766 3,889 1,123 2,107 Special assessments 5,983 1,654 (4,329) 3,257 Total taxes 2,804,896 2,806,081 1,185 2,647,334 Licenses and permits Licenses - Contractor 12,523 14,965 2,442 13,406 Business 104,105 75,622 (28,483) 81,915 .. All other 30,882 31,898 1,016 34,045 Permits 173,590 198,580 24,990 223,214 Total licenses and permits 321,100 321,065 (35) 352,580 - Intergovernmental revenue: _ Civil defense 5,000 6,274 1,274 6,166 State maintenance aid 112,054 126,572 14,518 122,117 State credits 546,187 600,672 54,485 591,212 Local government aid 1,900,802 1,900,802 1,900,826 Other state grants 5,000 27,749 22,749 25,618 Police and fire pension 181,332 226,355 45,023 215,738 Total intergovernmental revenue 2,750,375 2,888,424 138,049 2,861,677 - Charges for services: General government 16,035 10,852 (5,183) 18,495 - Public safety 19,504 22,535 3,031 22,934 Conservation of health 4,007 3,136 (871) 4,168 Recreation 108,329 123,732 15,403 119,020 - Total charges for services 147,875 160,255 12,380 164,617 Fine and forfeits 245,264 292,293 47,029 282,914 ... Interest on investments 379,698 383,248 3,550 409,560 "-' (Continued) 61 Exhibit B-3 Continued CITY OF FRIDLEY, MINNESOTA — GENERAL FUND SCHEDULE OF REVENUES AND OTHER FINANCING SOURCES - BUDGET AND ACTUAL Year Ended December 31, 1988 With Comparative Actual Amounts for Year Ended December 31, 1987 1988 Variance Favorable 1987 — Budget Actual (Unfavorable) Actual Miscellaneous revenue: -- Rent income $ $5,175 $5,175 $5,285 Sale of property 50,000 41,720 (8,280) 21,529 Donations 49,707 51,677 1,970 250,427 _ Miscellaneous refunds 11,000 12,897 1,897 26,698 Total miscellaneous revenue 110,707 111,469 762 303,939 Total revenues 6,759,915 6,962,835 202,920 7,022,621 Other financing sources: — Operating transfers in - Municipal State Aid Fund 147,000 147,000 128,576 Liquor Fund 50,000 50,000 10,000 — Total other financing sources 197,000 197,000 -0- 138,576 Total revenues and other financing sources $6,956,915 $7,159,835 $202,920 $7,161,197 62 - Exhibit B-4 - CITY OF FRIDLEY, MINNESOTA GENERAL FUND SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES - BUDGET AND ACTUAL - Year Ended December 31, 1988 With Comparative Actual Amounts for Year Ended December 31, 1987 1988 ,_ Variance Favorable 1987 Budget Actual (Unfavorable) Actual - General government: Mayor and Council - - Personal services $89,990 $89,861 $129 $79,963 Supplies and other charges 85,490 85,398 92 41,765 175,480 175,259 221 121,728 - Planning commission - Personal services 24,440 22,010 2,430 23,793 - Supplies and other charges 8,722 4,329 4,393 6,618 33,162 26,339 6,823 30,411 Other commissions - Personal services 4,567 3,192 1,375 3,151 Supplies and other charges 12,985 5,056 7,929 13,438 17,552 8,248 9,304 16,589 City manager- Personal services 171,066 171,042 24 143,927 - Supplies and other charges 60,680 55,260 5,420 70,466 231,746 226,302 5,444 214,393 -'- Personnel - Personal services 51,232 51,144 88 48,426 Supplies and other charges 14,427 5,286 9,141 6,756 - 65,659 56,430 9,229 55,182 Legal - - Personal services 2,325 2,243 82 2,751 Supplies and other charges 134,181 134,104 77 143,873 136,506 136,347 159 146,624 Elections- Personal services 6,646 6,472 174 2,333 - Supplies and other charges 21,088 15,971 5,117 5,622 27,734 22,443 5,291 7,955 - (Continued) 63 Exhibit B-4 Continued - CITY OF FRIDLEY, MINNESOTA GENERAL FUND SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES - BUDGET AND ACTUAL - Year Ended December 31, 1988 With Comparative Actual Amounts for Year Ended December 31, 1987 1988 Variance - Favorable 1987 Budget Actual (Unfavorable) Actual General government(continued): - Accounting - Personal services $233,937 $232,723 $1,214 $181,963 Supplies and other charges 95,096 94,494 602 136,595 - 329,033 327,217 1,816 318,558 Assessing - - Personal services 131,002 130,845 157 126,024 Supplies and other charges 29,778 23,826 5,952 25,427 160,780 154,671 6,109 151,451 Total general government 1,177,652 1,133,256 44,396 1,062,891 Public safety: Police - - Personal services 2,009,111 1,917,240 91,871 1,905,234 Supplies and other charges 243,325 227,104 16,221 242,148 2,252,436 2,144,344 108,092 2,147,382 - Fire - Personal services 459,933 458,773 1,160 426,314 - Supplies and other charges 91,707 85,855 5,852 86,664 551,640 544,628 7,012 512,978 - Civil defense - Personal services 49,336 49,125 211 43,757 Supplies and other charges 4,162 3,368 794 3,564 - 53,498 52,493 1,005 47,321 Total public safety 2,857,574 2,741,465 116,109 2,707,681 - Civic center: - Personal services 55,534 51,503 4,031 41,920 Supplies and other charges 178,202 154,151 24,051 118,302 Total civic center 233,736 205,654 28,082 160,222 - (Continued) - 64 Exhibit B-4 Continued CITY OF FRIDLEY, MINNESOTA GENERAL FUND _, SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES - BUDGET AND ACTUAL Year Ended December 31, 1988 With Comparative Actual Amounts for Year Ended December 31, 1987 1988 Variance Favorable 1987 Budget Actual (Unfavorable) Actual - Public works: Code enforcement - Personal services $162,100 $150,786 $11,314 $135,683 Supplies and other charges 37,913 36,187 1,726 40,815 - 200,013 186,973 13,040 176,498 - Planning - Personal services 144,722 107,395 37,327 92,071 Supplies and other charges 30,929 30,459 470 23,411 175,651 137,854 37,797 115,482 - Engineering - _ Personal services 136,608 136,203 405 131,608 Supplies and other charges 34,703 32,420 2,283 33,540 171,311 168,623 2,688 165,148 - Public works and Parks - Personal services 897,729 897,630 99 881,012 Supplies and other charges 624,256 623,877 379 654,809 - 1,521,985 1,521,507 478 1,535,821 Total public works 2,068,960 2,014,957 54,003 1,992,949 - Naturalist and Recreation: "' Naturalist - Personal services 133,007 132,889 118 106,342 Supplies and other charges 54,311 54,287 24 38,600 187,318 187,176 142 144,942 Recreation - Personal services 276,547 276,209 338 261,156 Supplies and other charges 128,426 126,386 2,040 123,968 404,973 402,595 2,378 385,124 - Total recreation and naturalist 592,291 589,771 2,520 530,066 - (Continued) 65 Exhibit B-4 Continued - CITY OF FRIDLEY, MINNESOTA GENERAL FUND SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES - BUDGET AND ACTUAL - Year Ended December 31, 1988 With Comparative Actual Amounts for Year Ended December 31, 1987 1988 Variance - Favorable 1987 Budget Actual (Unfavorable) Actual Reserve for contingencies $20,651 $ $20,651 $ Capital outlay expenditures - _ City manager 1,000 1,000 124 Accounting 1,900 1,899 1 124 Assessing 150 150 - Police 114,944 110,233 4,711 114,254 Fire 61,447 45,385 16,062 37,331 Civil defense 6,775 6,755 20 1 ,404 - Civic center 3,041 3,040 1 10,600 Code enforcement 1,500 Planning 1,379 Engineering 1,495 1,469 26 1,879 Public works 357,564 288,992 68,572 243,751 Naturalist 81,283 34,119 47,164 5,188 - Recreation 6,400 3,421 2,979 1,285 Total capital outlay 635,999 495,313 140,686 418,819 Total expenditures 7,586,863 7,180,416 406,447 6,872,628 Other financing uses: Operating transfers out - "' Capital Improvement Fund 12,563 Civic Center Improvement Fund 467,452 467,452 Special Assessment Capital - Projects Fund 147,000 50,703 96,297 59,874 Total other financing uses 614,452 518,155 96,297 72,437 Total expenditures and other financing uses $8,201,315 $7,698,571 $502,744 $6,945,065 66 SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for revenues derived from specific taxes or other earmarked revenue sources. They are usually required by statute, charter provision or local ordinance to finance particular governmental functions or activities. Municipal State Aid Fund This fund is used to account for the City's allocation of the state collected highway user tax. The allocation is based on both population and the need for construction of state aid streets in the City. Transfers are made from this fund to the Special Assessment Capital Projects Fund for current year road construction activity. Cable TV. Fund This fund receives revenues from the issuance of a franchise agreement with the cable TV provider. These revenues are used for the operation and maintenance of a government access channel. Grant Management Fund This fund administers grants received from a variety of intergovernmental agencies. In most cases, grant funds are provided on a reimbursement basis following proper documentation of expenditures, however, in some cases the money is provided in advance to be spent on specific activities outlined in the grant. HRA Reimbursement Fund This fund receives revenues from the Housing and Redevelopment Authority. These revenues are used to reimburse the City for professional services provided by city staff for HRA related activities. CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET December 31, 1988 With Comparative Totals for December 31, 1987 Municipal State Cable Grant Aid TV Management Assets — Cash $120,050 $9,223 $ Investments 1,301,660 43,682 — Accounts receivable 15,312 Due from other funds Due from other governments 17,667 71,505 — Total assets $1,439,377 $68,217 $71,505 Liabilities and Fund Balance Liabilities: Advance from city's general account $ $ $59,900 Accounts payable 11,608 7,926 -� Salaries payable 777 1,052 Due to other governments 2,029 Total liabilities -0- 12,385 70,907 -� Fund balance: Unreserved - — Designated for susequent year's expenditures 9,535 598 Undesignated 1,439,377 46,297 — Total fund balance 1,439,377 55,832 598 Total liabilities and fund balance $1,439,377 $68,217 $71,505 68 Exhibit C-1 HRA Totals Reimbursement 1988 1987 $ $129,273 $ 1,345,342 1,567,736 15,312 38,446 15,190 15,190 26,663 89,172 102,680 $15,190 $1,594,289 $1,735,525 $9,924 $69,824 $149,967 3,608 23,142 19,526 1,658 3,487 4,646 2,029 '- 15,190 98,482 174,139 10,133 1,485,674 1,561,386 -0- 1,495,807 1,561,386 $15,190 $1,594,289 $1,735,525 69 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES — Year Ended December 31, 1988 With Comparative Totals for Year Ended December 31, 1987 Municipal State Cable Grant Aid TV Management Revenues: Licenses and permits $ $57,488 $ Intergovernmental revenue 12,206 189,979 — Interest on investments 120,050 9,223 Miscellaneous 60,000 118 Total revenues 132,256 126,711 190,097 — Expenditures: Current - — General government 68,816 101,913 Capital outlay 52,770 85,461 Total expenditures -0- 121,586 187,374 — Excess of revenues over expenditures 132,256 5,125 2,723 Other financing (uses): Operating transfers out (164,716) (40,967) Total other financing(uses) (164,716) (40,967) -0- — Excess(deficiency)of revenues over expenditures and other — financing uses (32,460) (35,842) 2,723 Fund balance (deficit)January 1 1,471,837 91,674 (2,125) — Fund balance December 31 $1,439,377 $55,832 $598 70 Exhibit C-2 H RA Totals Reimbursement 1988 1987 $ $57,488 $53,003 206,505 408,690 384,520 129,273 123,632 60,118 206,505 655,569 561,155 206,505 377,234 380,879 138,231 57,191 206,505 515,465 438,070 -0- 140,104 123,085 (205,683) (177,772) -0- (205,683) (177,772) (65,579) (54,687) -0- 1,561,386 1,616,073 $ -0- $1,495,807 $1,561,386 71 — Exhibit C-3 CITY OF FRIDLEY, MINNESOTA MUNICIPAL STATE AID SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET — December 31, 1988 and 1987 1988 1987 Assets — Cash $120,050 $ Investments 1,301,660 1,499,736 — Due from other goverments 17,667 5,461 Total assets $1,439,377 $1,505,197 — Liability and Fund Balance — Liability: Advance from city's general account $ -0- $33,360 -- Fund balance: Unreserved - undesignated 1,439,377 1,471,837 — Total liability and fund balance $1,439,377 $1,505,197 72 Exhibit C-4 CITY OF FRIDLEY, MINNESOTA MUNICIPAL STATE AID SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL Year Ended December 31, 1988 With Comparative Amounts for Year Ended December 31, 1987 1988 Variance Favorable 1987 Budget Actual (Unfavorable) Actual Revenues: Intergovernmental - Minnesota state aid $336,161 $12,206 ($323,955) $21,020 Interest on investments 122,663 120,050 (2,613) 117,862 Total revenues 458,824 132,256 (326,568) 138,882 Other financing uses: Operating transfers out - General Fund (438,824) (147,000) 291,824 (128,576) Special Assessment Capital Projects Fund (20,000) (17,716) 2,284 (49,196) Total other financing uses (458,824) (164,716) 294,108 (177,772) Deficiency of revenues over expenditures and other financing uses -0- (32,460) (32,460) (38,890) Fund balance January 1 1,471,837 1,471,837 -0- 1,510,727 Fund balance December 31 $1,471,837 $1,439,377 ($32,460) $1,471,837 73 — Exhibit C-5 CITY OF FRIDLEY, MINNESOTA CABLE TV SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET -- December 31, 1988 and 1987 1988 1987 Assets — Cash $9,223 $ Investments 43,682 68,000 — Accounts receivable 15,312 38,446 Total assets $68,217 $106,446 — Liabilities and Fund Balance — Liabilities: Accounts payable $11,608 $14,038 — Salaries payable 777 734 Due to other governments Total liabilities 12,385 14,772 — Fund balance: Unreserved - — Designated for subsequent year's expenditures 9,535 Undesignated 46,297 91,674 Total fund balance 55,832 91,674 — Total liabilities and fund balance $68,217 $106,446 74 Exhibit C-6 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, 1988 With Comparative Amounts for Year Ended December 31, 1987 1988 Variance Favorable 1987 Budget Actual (Unfavorable) Actual Revenues: Licenses - franchise fee $53,921 $57,488 $3,567 $53,003 Interest on investments 4,000 9,223 5,223 5,770 Donations 68,449 60,000 (8,449) Total revenues 126,370 126,711 341 58,773 Expenditures: Current _. General government - Personal services 32,989 26,098 6,891 25,219 Supplies and other charges 42,786 42,718 68 38,466 ._ Capital outlay 62,845 52,770 10,075 7,191 Total expenditures 138,620 121,586 17,034 70,876 .., Excess(deficiency)of revenues over expenditures (12,250) 5,125 17,375 (12,103) Other financing uses: Operating transfer out Civic Center Improvement Capital .., Projects Fund (41,000) (40,967) 33 Total other financing uses (41,000) (40,967) 33 -0- Deficiency of revenues over expenditures and other financing uses (53,250) (35,842) 17,408 (12,103) Fund balance January 1 91,674 91,674 -0- 103,777 Fund balance December 31 $38,424 $55,832 $17,408 $91,674 75 Exhibit C-7 —' CITY OF FRIDLEY, MINNESOTA — GRANT MANAGEMENT SPECIAL REVENUE FUND COMPARATIVE BALANCE SHEET December 31, 1988 and 1987 ,^ 1988 1987 — Assets — Due from other goverments $71,505 $97,219 Liabilities and Fund Balance Liabilities: — Advance from city's general account $59,900 $96,487 Accounts payable 7,926 1,808 Salaries payable 1,052 1,049 Due to other governments 2,029 Total liabilities 70,907 99,344 — Fund balance: Unreserved - Designated for subsequent year's expenditures 598 Undesignated (2,125) Total liabilities and fund balance $71,505 $97,219 76 Exhibit C-8 ._ 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, 1988 With Comparative Amounts for Year Ended December 31, 1987 1988 Variance Favorable 1987 Budget Actual (Unfavorable) Actual Revenues: — Intergovernmental revenue - Federal $143,000 $142,902 ($98) $151,992 State 45,937 47,077 1,140 28,887 Donations 118 118 Total revenues 188,937 190,097 1,160 180,879 Expenditures: Current General government- Personal services 42,436 42,311 125 41,590 Supplies and other charges 60,501 59,602 899 '92,983 Capital outlay 86,000 85,461 539 50,000 Total expenditures 188,937 187,374 1,563 184,573 Excess(deficiency)of revenues over expenditures and other financing sources -0- 2,723 2,723 (3,694) Fund balance(deficit)January 1 (2,125) (2,125) -0- 1,569 Fund balance (deficit) December 31 ($2,125) $598 $2,723 ($2,125) 77 Exhibit C-9 �' CITY OF FRIDLEY, MINNESOTA HRA REIMBURSEMENT SPECIAL REVENUE FUND — COMPARATIVE BALANCE SHEET December 31, 1988 and 1987 1988 1987 Assets Due from other funds $15,190 $26,663 — Liabilities and Fund Balance — Liabilities: Advance from city's general account $9,924 $20,120 — Accounts payable 3,608 3,680 Salaries payable 1,658 2,863 Total liabilities 15,190 26,663 — Fund balance: Unreserved - undesignated -0- -0- — Total liabilities and fund balance $15,190 $26,663 78 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, 1988 With Comparative Amounts for Year Ended December 31, 1987 1988 Variance -� Favorable 1987 Budget Actual (Unfavorable) Actual Revenues: Intergovernmental revenue - Housing Redevelopment Authority $207,000 $206,505 ($495) $182,621 Expenditures: Current General government- Personal services 107,250 107,147 103 120,432 Supplies and other charges 99,750 99,358 392 62,189 Total expenditures 207,000 206,505 495 182,621 Excess of revenues over expenditures -0- -0- -0- -0- Fund balance January 1 -0- -0- -0- -0- Fund balance December 31 $ -0- $ -0- $ -0- $ -0- 79 • 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 DEBT SERVICE FUNDS COMBINING BALANCE SHEET December 31, 1988 With Comparative Totals for December 31, 1987 Special Totals Assessment HRA 1988 1987 Assets Cash $639,704 $313 $640,017 $5 Deposits with trustee 2,503,200 9,600,700 12,103,900 12,452,500 Investments 8,370,767 2,218,696 10,589,463 13,531,139 Receivables: Special Assessments - Unremitted 15,714 15,714 Delinquents 194,842 194,842 214,035 Deferred 2,686,070 2,686,070 3,025,269 Due from other funds 9,578 9,578 Total assets $14,419,875 $11,819,709 $26,239,584 $29,222,948 Liabilities and Fund Balance _ Liabilities: Advance from city's general account $1,033 $ $1,033 $21,990 Accounts payable 638 7,835 8,473 651 Deposits Payable Deferred revenue 2,880,912 2,880,912 3,239,304 Due to other funds 9,578 9,578 Total liabilities 2,882,583 17,413 2,899,996 3,261,945 Fund balance: Reserved for debt service 5,649,604 11,802,296 17,451,900 18,620,137 Unreserved - undesignated 5,887,688 5,887,688 7,340,866 Total fund balance 11,537,292 11,802,296 23,339,588 25,961,003 Total liabilities and fund balance $14,419,875 $11,819,709 $26,239,584 $29,222,948 81 Exhibit D-2 CITY OF FRIDLEY, MINNESOTA — DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND — CHANGES IN FUND BALANCES Year Ended December 31, 1988 With Comparative Totals for Year Ended December 31, 1987 — Special Totals -" Assessment HRA 1988 1987 Revenues: — Taxes $ $ $ $522 Special Assessments 890,882 890,882 1,034,495 Interest on investments 639,668 259,158 898,826 977,502 — Total revenues 1,530,550 259,158 1,789,708 2,012,519 Expenditures: — General government 9,285 Debt service - Principal retirement 690,000 690,000 1,380,000 740,000 — Interest and fiscal charges 348,346 1,023,734 1,372,080 1,463,059 Total expenditures 1,038,346 1,713,734 2,752,080 2,212,344 Excess(deficiency)of revenues over expenditures 492,204 (1,454,576) (962,372) (199,825) Other financing sources (uses): Operating transfers in (out)- Special Assessments Capital Projects Funds (443,851) (443,851) (129,238) — HRA Capital Projects Fund 1,041,897 1,041,897 1,141,992 Total other financing sources (443,851) 1,041,897 598,046 1,012,754 Excess(deficiency)of revenues and other financing sources over expenditures 48,353 (412,679) (364,326) 812,929 — Fund balance January 1 13,746,024 12,214,975 25,960,999 25,247,114 Residual Equity Transfer out (2,257,085) (2,257,085) (99,044) Fund balance December 31 $11,537,292 $11,802,296 $23,339,588 $25,960,999 — 82 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. Civic Center Improvement Fund This fund was established to account for the revenues and expenditures associated with the remodeling of the Fridley Civic Center. Fire Buildings Fund This fund is used to account for the revenues and expenditures that are related to the construction and remodeling of the Fire buildings. 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, 1988 With Comparative Totals for December 31, 1987 — Civic Capital Center Fire Improvements Improvements Buildings — Assets Cash $168,431 $15,157 $580 — Investments 2,224,619 1,834,372 Receivables: Taxes - — Unremitted 1,094 Delinquent 5,530 Specials- Unremitted Delinquent Deferred — Mortgage - Delinquent Deferred — Interest Due from other funds 261,422 Due from other governments — Total assets $2,399,674 $2,110,951 $580 Liabilities and Fund Balance Liabilities: Advance from city's general account $ $ $ — Accounts payable 7,300 16,261 580 Deposits payable Contracts payable 693,419 — Salaries payable Deferred revenue 5,530 Due to other funds — Due to other governments Total liabilities 12,830 709,680 580 Fund balance: — Reserved for encumbrances Reserved for construction 1,401,271 Reserved for debt service — Unreserved - Designated for fixed asset replacement 2,327,145 Designated for park improvement 59,699 — Undesignated Total fund balance 2,386,844 1,401,271 -0- — Total liabilities and fund balance $2,399,674 $2,110,951 $580 84 - Exhibit E-1 Special Totals - Assessments HRA 1988 1987 _, $137,896 $167,422 $489,486 $618 2,315,155 6,681,654 13,055,800 12,308,527 - 1,286 2,380 17,424 592,948 598,478 368,474 61 61 2,030 2,030 2,272 129,971 129,971 138,204 - 15,480 15,480 7,960 - 948,000 948,000 952,000 190,039 190,039 86,548 45,671 307,093 78,770 - 19,910 19,910 36,710 $2,650,694 $8,596,829 $15,758,728 $13,997,507 $897,502 $166,988 $1,064,490 $826,439 - 68,697 46,148 138,986 48,385 116,488 116,488 116,614 31,416 724,835 98,586 - 1,259 1,259 132,001 1,556,428 1,693,959 1,468,910 322,283 322,283 80,433 - 233,085 233,085 1,480,448 2,091,847 4,295,385 2,639,367 - 673,798 673,798 562,249 6,504,982 7,906,253 5,053,169 3,035,838 2,327,145 1,919,375 - 59,699 63,199 496,448 496,448 724,310 1,170,246 6,504,982 11,463,343 11,358,140 $2,650,694 $8,596,829 $15,758,728 $13,997,507 85 CITY OF FRIDLEY, MINNESOTA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND — CHANGES IN FUND BALANCE Year Ended December 31, 1988 With Comparative Totals for Year Ended December 31, 1987 — Civic _ Capital Center Fire Improvements Improvements Buildings Revenues: Taxes - Tax increment $ $ $ _, Current ad valorem taxes 68,122 Delinquent ad valorem taxes 3,551 Specials assessments _ Total taxes 71,673 -0- -0- Intergovernmental revenue - — State credits 14,969 State grant Total intergovernmental revenue 14,969 -0- -0- — Interest on investments 384,276 25,502 -0- Miscellaneous revenue - Rental income Sale of property _ Other 4,000 Total miscellaneous revenue -0- 4,000 -0- Total revenues 470,918 29,502 -0- — (Continued) 86 Exhibit E-2 _ Special Totals Assessments HRA 1988 1987 $ $1,501,733 $1,501,733 $983,476 68,122 66,419 3,551 668 26,151 26,151 35,066 26,151 1,501,733 1,599,557 1,085,629 _ 29,065 44,034 25,405 402,890 402,890 30,836 402,890 29,065 446,924 56,241 166,834 419,773 996,385 921,014 41,700 41,700 53,650 4,000 19,099 2,500 25,599 10,069 '- 19,099 44,200 67,299 67,719 614,974 1,994,771 3,110,165 2,130,603 87 CITY OF FRIDLEY, MINNESOTA _ CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE(Continued) — Year Ended December 31, 1988 With Comparative Totals for Year Ended December 31, 1987 Civic Capital Center Fire — Improvements Improvements Buildings Expenditures: — Current - General government $7,559 $244,626 $38,316 Debt Service — Capital outlay 114,578 1,025,417 320,475 Total expenditures 122,137 1,270,043 358,791 Excess (deficiency) of revenues — over expenditures 348,781 (1,240,541) (358,791) Other financing sources (uses): — Operating transfers in (out) - General Fund 467,452 Municipal State Aid Fund — Cable T.V. Fund 40,967 Special Assessment Debt Service Fund HRA Debt Service Fund — Capital Improvement Fund 1,587,501 214,095 Civic Center Improvements (1,587,501) 131,696 Sears Fund — Fire Buildings (214,095) (131,696) Special Assessment Capital Projects Fund Public Utilties fund — Total other finanacing sources(uses) (1,801,596) 1,964,224 345,791 Excess(deficiency)of revenues and other — financing sources over expenditures and other financing uses (1,452,815) 723,683 (13,000) Fund balance January 1 1,982,574 677,588 13,000 Residual Equity Transfers 1,857,085 — Fund balance December 31 $2,386,844 $1,401,271 $ -0- 88 Exhibit E-2 Continued Special Totals Assessments HRA 1988 1987 $127,851 $437,937 $856,289 $474,096 50,947 50,947 45,750 1,060,600 1,408,374 3,929,444 3,190,016 1,239,398 1,846,311 4,836,680 3,709,862 (624,424) 148,460 (1,726,515) (1,579,259) 50,703 518,155 72,437 17,716 17,716 49,196 40,967 443,851 443,851 (1,012,754) _ (1,041,897) (1,041,897) 1,801,596 14,000 (1,455,805) _ 59,930 (345,791) (14,000) (59,930) (4,159) (4,159) (14,895) 508,111 (1,041,897) (25,367) (906,016) (116,313) (893,437) (1,751,882) (2,485,275) — 1,286,559 7,398,419 11,358,140 13,744,371 1,857,085 99,044 $1,170,246 $6,504,982 $11,463,343 $11,358,140 89 ENTERPRISE FUNDS Enterprise Funds are used to account for the operations of self-supporting governmental activities which render services or goods to the public. The accounting records are maintained on an accrual basis. The reporting for enterprise funds is similar to comparable private enterprises. Creditors, legislators or the general public can evaluate the performance of a municipal enterprise on the same basis as they can the performance of investor-owned enterprises. Liquor Fund This fund accounts for the operation of two off-sale liquor establishments. Public Utilities Fund This fund accounts for the operations of the City-owned sewer and water systems. - Exhibit F-1 CITY OF FRIDLEY, MINNESOTA - ENTERPRISE FUNDS COMBINING BALANCE SHEET December 31, 1988 With Comparative Totals for December 31, 1987 - Public Totals Liquor Utilities 1988 1987 Assets - Current Assets: Cash $39,755 $338,492 $378,247 $3,320 Investments 399,616 4,156,632 4,556,248 5,553,828 _ Accounts receivable 623,075 623,075 543,927 Due from other governments 16,843 16,843 105,092 Inventories, at cost 362,409 3,893 366,302 399,855 ._ Prepaid expense 17,991 110,413 128,404 126,501 Total current assets 819,771 5,249,348 6,069,119 6,732,523 Long-term receivable - Metro Waste Control Commission -0-- 249,305 249,305 272,131 - Restricted Asset: Investments, at cost 20,000 Total restricted assets -0- -0- -0- 20,000 Property and equipment, at cost: Property and equipment 468,717 16,288,529 16,757,246 15,692,145 - Less: accumulated depreciation (214,974) (3,174,425) (3,389,399) (3,022,118) Net property and equipment 253,743 13,114,104 13,367,847 12,670,027 Total assets $1,073,514 $18,612,757 $19,686,271 $19,694,681 - Liabilities and Fund Equity Current liabilities: Accounts payable $101,407 $26,001 $127,408 $155,276 -. Contracts Payable 5,000 5,000 279,917 Salaries payable 9,346 18,440 27,786 18,198 Due to other governments 22,940 43,718 66,658 27,418 Bonds payable 20,000 Total liabilities 133,693 93,159 226,852 500,809 - Fund equity: Contributed capital -0- 10,861,185 10,861,185 10,861,185 - Retained earnings - unreserved 939,821 7,658,413 8,598,234 8,332,687 Total retained earnings 939,821 7,658,413 8,598,234 8,332,687 Total fund equity 939,821 18,519,598 19,459,419 19,193,872 Total liabilities and fund equity $1,073,514 $18,612,757 $19,686,271 $19,694,681 91 Exhibit F-2 CITY OF FRIDLEY, MINNESOTA ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES - AND CHANGES AND RETAINED EARNINGS Year Ended December 31, 1988 With Comparative Totals for Year Ended December 31, 1987 - Public Totals - Liquor Utilites 1988 1987 Sales and cost of sales: Sales $2,439,148 $ $2,439,148 $2,596,379 Cost of sales 1,992,782 1,992,782 2,192,231 Gross profit 446,366 -0- 446,366 404,148 Operating revenues: Water sales and sewer rents 2,618,230 2,618,230 2,362,437 Other 107,512 107,512 111,377 - Total operating revenues -0- 2,725,742 2,725,742 2,473,814 Operating expenses: Personal Services 232,190 571,112 803,302 736,457 Supplies and other charges - Disposal charges 1,306,604 1,306,604 1,126,427 - Other 144,028 600,044 744,072 700,029 Depreciation 25,888 368,983 394,871 353,133 Total operating expenses 402,106 2,846,743 3,248,849 2,916,046 Operating income (loss) 44,260 (121,001) (76,741) (38,084) Non-operating revenues(expenses): Interest on investments 35,455 349,295 384,750 421,601 Debt service (380) (380) (1,646) -- Other 3,759 3,759 2,012 Total non-operating revenues(expenses) 39,214 348,915 388,129 421,967 - Income before operating transfers 83,474 227,914 311,388 383,883 Operating transfers in (out): General Fund (50,000) (50,000) (10,000) Special Assessment Capital Projects Fund 4,159 4,159 14,895 - Total operating transfers (50,000) 4,159 (45,841) 4,895 Net income 33,474 232,073 265,547 388,778 - Retained earnings January 1 906,347 7,426,340 8,332,687 7,943,909 - Retained earnings December 31 $939,821 $7,658,413 $8,598,234 $8,332,687 92 Exhibit F-3 CITY OF FRIDLEY, MINNESOTA ENTERPRISE FUNDS - COMBINING STATEMENT OF CHANGES IN FINANCIAL POSITION Year Ended December 31, 1988 With Comparative Totals for Year Ended December 31, 1987 Public Totals - Liquor Utilities 1988 1987 Sources of working capital: -- Operations: Net income for the year $33,474 $232,073 $265,547 $388,778 Items not requiring working capital - - Depreciation 25,888 368,983 394,871 353,133 Working capital provided by operations 59,362 601,056 660,418 741,911 Decrease in long term receivable 22,826 22,826 22,299 Net decrease in restricted assets 20,000 20,000 56,130 _ Total sources of working capital 59,362 643,882 703,244 820,340 Uses of working capital: ,.., Acquisition of property and equipment 1,092,691 1,092,691 892,345 Decrease in long term bonds payable 20,000 Total uses of working capital -0- 1,092,691 1,092,691 912,345 Increase (decrease) in working capital $59,362 ($448,809) ($389,447) ($92,005) Elements of increase (decrease) in working capital: _ Cash $36,555 $338,372 $374,927 ($139,383) Investments 54,313 (1,051,893) (997,580) 488,536 Accounts receivable 79,148 79,148 (137,814) ,_ Interest receivable (23,081) Due from other governments (88,249) (88,249) 43,884 Inventories, at cost (33,546) (7) (33,553) (77,470) _ Prepaid expense (12,045) 13,948 1,903 (5,978) Accounts payable 17,877 9,991 27,868 8,013 Contracts payable 274,917 274,917 (279,917) Salaries payable (4,238) (5,350) (9,588) 1,104 Due to other funds 1,771 Due to other goverments 446 (39,686) (39,240) (1,670) Bonds payable 20,000 20,000 30,000 Increase (decrease) in working capital $59,362 ($448,809) ($389,447) ($92,005) 93 Exhibit F-4 CITY OF FRIDLEY, MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE BALANCE SHEET - December 31, 1988 and 1987 1988 1987 Assets - Current Assets: Cash $39,755 $3,200 - Investments 399,616 345,303 Inventories, at cost 362,409 395,955 Prepaid expense 17,991 30,036 _ Total current assets 819,771 774,494 Property and equipment, at cost: _ Land 66,961 66,961 Buildings 174,116 174,116 Improvements other than building 18,677 18,677 _ Machinery and equipment 208,963 208,963 468,717 468,717 Less: accumulated depreciation (214,974) (189,086) - Net property and equipment 253,743 279,631 Total assets $1,073,514 $1,054,125 - Liabilities and Fund Equity - Current Liabilities: Accounts payable $101,407 $119,284 - Salaries payable 9,346 5,108 Due to other governments 22,940 23,386 Total current liabilities 133,693 147,778 - Fund equity: Retained earnings - unreserved 939,821 906,347 - Total current liabilities and fund equity $1,073,514 $1,054,125 94 -' Exhibit F-5 CITY OF FRIDLEY, MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Years Ended December 31, 1988 and 1987 1988 1987 ... Sales and cost of sales: Sales $2,439,148 $2,596,379 Cost of sales 1,992,782 2,192,231 Gross profit 446,366 404,148 Operating expenses: Selling: Personal services 152,773 149,703 Supplies and other charges 16,571 3,247 Total selling expenses 169,344 152,950 Overhead: Supplies and other charges 117,020 133,819 Depreciation 25,888 28,017 Total overhead expense 142,908 161,836 Administrative: Personal services 79,417 75,028 Supplies and other charges 10,437 12,511 Total adminstrative expense 89,854 87,539 _ Total operating expenses 402,106 402,325 Operating income 44,260 1,823 Non-operating revenues: Interest on investments 35,455 24,454 _ Other 3,759 2,012 Total non-operating revenues 39,214 26,466 Income before operating transfers 83,474 28,289 Operating transfers out: General Fund (50,000) (10,000) Total operating transfers (50,000) (10,000) Net income 33,474 18,289 Retained earnings January 1 906,347 888,058 Retained earnings December 31 $939,821 $906,347 95 Exhibit F-6 CITY OF FRIDLEY, MINNESOTA LIQUOR ENTERPRISE FUND COMPARATIVE STATEMENT OF CHANGES IN FINANCIAL POSITION Years Ended December 31, 1988 and 1987 — 1988 1987 Sources of working capital: Operations: Net income for the year $33,474 $18,289 Items not requiring working capital - Depreciation 25,888 28,017 Working capital provided by operations 59,362 46,306 Uses of working capital: Acquisition of property and equipment -0- 4,357 Increase in working capital $59,362 $41,949 — Elements of increase (decrease) in working capital: Cash $36,555 ($109,478) Investments 54,313 242,121 — Accounts receivable (5,681) Interest receivable (1,186) Inventories, at cost (33,546) (77,750) — Prepaid expense (12,045) (7,198) Accounts payable 17,877 (2,115) Salaries payable (4,238) 1,711 — Due to other funds 1,771 Due to other goverments 446 (246) Increase in working capital $59,362 $41,949 96 CITY OF FRIDLEY, MINNESOTA Exhibit F-7 PUBLIC UTILITY ENTERPRISE FUND COMPARATIVE BALANCE SHEET December 31, 1988 and 1987 1988 1987 Assets Current assets: ._ Cash $338,492 $120 Investments 4,156,632 5,208,525 Accounts receivable 623,075 543,927 Due from other governments 16,843 105,092 Inventories, at cost 3,893 3,900 Prepaid expense 110,413 96,465 .. Total current assets 5,249,348 5,958,029 Long-term receivable - Metropolitan Waste Control Commission 249,305 272,131 Restricted asset: ,.., Investments, at cost -0- 20,000 Property and equipment, at cost: -„ Land 154,881 154,881 Buildings 1,520,486 1,166,566 Improvements other than building 1,562,237 866,331 Machinery and equipment 2,189,740 2,174,465 Water and sewer lines 10,861,185 10,861,185 16,288,529 15,223,428 _ Less: accumulated depreciation (3,174,425) (2,833,032) Net property and equipment 13,114,104 12,390,396 Total assets $18,612,757 $18,640,556 Liabilities and Fund Equity Current liabilities: Accounts payable $26,001 $35,992 Contracts payable 5,000 279,917 Salaries payable 18,440 13,090 Due to other governments 43,718 4,032 Bonds payable 20,000 Total liabilities 93,159 353,031 Fund Equity: Contributed capital 10,861,185 10,861,185 Retained earnings- unreserved 7,658,413 7,426,340 Total fund equity 18,519,598 18,287,525 Total liabilities and fund equity $18,612,757 $18,640,556 97 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, 1988 and 1987 — 1988 1987 Operating Revenues: — Water sales and sewer rents $2,618,230 $2,362,437 Other 107,512 _ 111,377 Total Operating Revenues 2,725,742 2,473,814 — Operating Expenses: Personal services 571,112 511,726 — Supplies and other charges - Disposal charges 1,306,604 1,126,427 Other 600,044 550,452 Depreciation 368,983 325,116 — Total Operating Expenses 2,846,743 2,513,721 Operating loss (121,001) (39,907) — Non-Operating Revenues (Expenses): Interest on Investments 349,295 397,147 Debt service (380) (1,646) Total Non-Operating Revenues (Expenses) 348,915 395,501 Income before operating transfers 227,914 355,594 Operating transfers from: Special Assessment Capital Projects Fund 4,159 14,895 Total operating transfers 4,159 14,895 — Net Income 232,073 370,489 Retained Earnings January 1 7,426,340 7,055,851 Retained Earnings December 31 $7,658,413 $7,426,340 — 98 Exhibit F-9 _ CITY OF FRIDLEY, MINNESOTA PUBLIC UTILITY ENTERPRISE FUND COMPARATIVE STATEMENT OF CHANGES IN FINANCIAL POSITION Years Ended December 31, 1988 and 1987 1988 1987 Sources of working capital: Operations Net income for the year $232,073 $370,489 Items not requiring working capital - Depreciation 368,983 325,116 Working capital provided by operations 601,056 695,605 Decrease in long term receivable 22,826 22,299 Net decrease in restricted assets 20,000 56,130 Total sources of working capital 643,882 774,034 Uses of working capital: Acquisition of property and equipment 1,092,691 887,988 Decrease in long term revenue bonds payable 20,000 Total uses of working capital 1,092,691 907,988 Decrease in working capital ($448,809) ($133,954) Elements of increase (decrease) in working capital: Cash $338,372 ($29,905) Investments (1,051,893) 246,415 Accounts receivable 79,148 (132,133) Interest receivable (21,895) Due from other governments (88,249) 43,884 Inventories, at cost (7) 280 Prepaid expenses 13,948 1,220 .. Accounts payable 9,991 10,128 Contracts payable 274,917 (279,917) Salaries payable (5,350) (607) Due to other governments (39,686) (1,424) Bonds payable 20,000 30,000 Decrease in working capital ($448,809) ($133,954) 99 INTERNAL SERVICE FUNDS Internal Service Funds are used to account for goods and services that are provided on a cost reimbursement or fee basis to departments or agencies within the City. These funds are essential for segregating costs for determining the total cost of providing a service and for assuring that the goods and services provided are properly utilized. These funds are accounted for on a capital maintenance measurement focus and use the accrual basis of accounting. Employee Benefits Fund This fund is used to account for the expenses associated with providing fringe benefits for the City of Fridley employees. Management Information Services Fund This fund is used to account for all revenues and expenses associated with the City operated computerized information system that handles the information processing needs of the City. Self Insurance Fund This fund is used to account for all revenues and expenditures associated with the $50,000 deductible in the City general liability policy. CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUNDS COMBINING BALANCE SHEET — December 31, 1988 With Comparative Totals for December 31, 1987 Management Employee Information Self _ Benefits Services Insurance Assets _ Current assets: Cash $108,030 $53,483 $6,750 _ Investments 1,284,174 527,918 97,704 Due from other governments 1,010 Total current assets 1,392,204 581,401 105,464 — Property and equipment, at cost: Property and equipment 310,258 _ Less: accumulated depreciation (180,983) Net property and equipment -0- 129,275 -0- Total assets $1,392,204 $710,676 $105,464 Liabilities and Fund Equity Current liabilities: Accounts payable $ $66,141 $811 Leave payable 788,798 Due to other funds Total liabilities 788,798 66,141 811 Fund equity: — Retained earnings - reserved 603,406 644,535 104,653 Total fund equity 603,406 644,535 104,653 — Total liabilities and fund equity $1,392,204 $710,676 $105,464 102 Exhibit G-1 Totals 1988 1987 $168,263 $ 1,909,796 1,490,743 1,010 �. 2,079,069 1,490,743 310,258 207,412 (180,983) (142,041) 129,275 65,371 $2,208,344 $1,556,114 $66,952 $1,998 788,798 798,153 25,000 855,750 825,151 1,352,594 730,963 1,352,594 730,963 $2,208,344 $1,556,114 103 — CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND _ CHANGES IN RETAINED EARNINGS Year Ended December 31, 1988 With Comparative Totals for Year Ended December 31, 1987 Management _ Employee Information Self Benefits Services Insurance Operating revenues: Charges for services $194,606 $119,024 $ — Operating expenses: Personal services Supplies and other charges 45,132 17,642 _ Benefit payments 200,821 Depreciation 38,943 Total operating expenses 200,821 84,075 17,642 Operating income(loss) (6,215) 34,949 (17,642) Non operating revenues: Interest on investments 108,030 53,483 6,750 Other 300 41,976 — Total non-operating revenues 108,030 53,783 48,726 Net income 101,815 88,732 31,084 — Retained earnings January 1 501,591 155,803 73,569 Residual equity transfers 400,000 Retained earnings December 31 $603,406 $644,535 $104,653 — 104 Exhibit G-2 Totals 1988 1987 $313,630 $403,238 1,336 62,774 57,982 200,821 253,920 38,943 41,142 302,538 354,380 11,092 48,858 168,263 97,356 42,276 32,817 210,539 130,173 221,631 179,031 730,963 551,932 400,000 $1,352,594 $730,963 105 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CHANGES IN FINANCIAL POSITION Year Ended December 31, 1988 With Comparative Totals for Year Ended December 31, 1987 Management Employee Information Self Benefits Services Insurance Sources of working capital: Operations: Net income for the year $101,815 $88,732 $31,084 Items not requiring working capital - Depreciation 38,943 Working capital provided by operations 101,815 127,675 31,084 Residual equity transfer 400,000 Total sources of working — capital 101,815 527,675 31,084 Uses of working capital: _ Acquisition of property and equipment 102,847 Decrease in long term advance from Capital Improvement Fund Total uses of working capital -0- 102,847 -0- Increase in working capital $101,815 $424,828 $31,084 Elements of increase (decrease) _ in working capital: Cash $108,030 $53,483 $6,750 Investments (15,994) 411,687 23,360 ,_„ Interest receivable Due from other governments 1,010 Advance from city's general account — Accounts payable 424 (65,342) (36) Leave payable 9,355 Due to other funds 25,000 Increase in working capital $101,815 $424,828 $31,084 106 Exhibit G-3 Totals 1988 1987 $221,631 $179,031 38,943 41,142 ... 260,574 220,173 400,000 660,574 220,173 102,847 2,753 25,000 102,847 27,753 $557,727 $192,420 $168,263 ($328) 419,053 181,975 (5,507) 1,010 _ 17,734 (64,954) (884) 9,355 (570) 25,000 $557,727 $192,420 107 Exhibit G-4 CITY OF FRIDLEY, MINNESOTA — EMPLOYEE BENEFITS INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET — December 31, 1988 and 1987 1988 1987 Assets _ Cash $108,030 $ Investments 1,284,174 1,300,168 — Total assets $1,392,204 $1,300,168 Liabilities and Fund Equity Current Liabilities: Accounts payable $ $424 Leave payable 788,798 798,153 Total current liabilities 788,798 798,577 Fund equity: — Retained earnings- Reserved for employee benefits 603,406 501,591 Total current liabilities and fund equity $1,392,204 $1,300,168 108 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, 1988 and 1987 — 1988 1987 — Operating revenues: Charges for services $194,649 $230,187 — Operating expenses: Benefit payments 200,864 253,920 Operating loss (6,215) (23,733) Non-operating revenues: _ Interest on investments 108,030 88,660 Total non-operating revenues 108,030 88,660 — Net income 101,815 64,927 Retained earnings January 1 501,591 436,664 Retained earnings December 31 $603,406 $501,591 109 Exhibit G-6 CITY OF FRIDLEY, MINNESOTA EMPLOYEE BENEFITS INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CHANGES IN FINANCIAL POSITION — Years Ended December 31, 1988 and 1987 1988 1987 Sources of working capital: Operations Net income $101,815 $64,927 — Elements of increase (decrease) in — working capital: Cash $108,030 $ Investments (15,994) 53,359 — Interest receivable (5,391) Advance from city's general account 17,734 Accounts payable 424 (205) — Leave payable 9,355 (570) Increase in working capital $101,815 $64,927 — 110 Exhibit G-7 CITY OF FRIDLEY, MINNESOTA MANAGEMENT INFORMATION SERVICES INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31, 1988 and 1987 1988 1987 Assets Current assets: Cash $53,483 $ Investments 527,918 116,231 Total current assets 581,401 116,231 Property and equipment, at cost: Machinery and equipment 310,258 207,412 Less: accumulated depreciation (180,983) (142,041) Net property and equipment 129,275 65,371 Total assets $710,676 $181,602 Liabilities and Fund Equity Current Liabilities: Accounts payable $66,141 $799 Due to other funds 25,000 Total current liabilities 66,141 25,799 Fund equity: Retained earnings- Reserved for capital outlay 644,535 155,803 Total fund equity 644,535 155,803 Total current liabilities and fund equity $710,676 $181,602 111 — Exhibit G-8 — CITY OF FRIDLEY, MINNESOTA MANAGEMENT INFORMATION SERVICES INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF REVENUES EXPENSES AND CHANGES IN RETAINED EARNINGS Years Ended December 31, 1988 and 1987 1988 1987 Operating revenues: Charges for services $119,024 $122,328 Operating expenses: Supplies and other charges 45,132 45,930 Depreciation 38,943 41,142 "" Total operating expenses 84,075 87,072 Operating income 34,949 35,256 Non-operating revenues: Interest on investments 53,483 5,279 — Other 300 Total non-operating revenues 53,783 5,279 Net income 88,732 40,535 Retained earnings January 1 155,803 115,268 Residual equity transfer 400,000 Retained earnings December 31 $644,535 $155,803 112 Exhibit G-9 CITY OF FRIDLEY, MINNESOTA MANAGEMENT INFORMATION SERVICES INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CHANGES IN FINANCIAL POSITION Years Ended December 31, 1988 and 1987 1988 1987 Sources of working capital: Operations: Net income for the year $88,732 $40,535 Items not requiring working capital - — Depreciation 38,943 41,142 Working capital provided by operations 127,675 81,677 Residual equity transfer 400,000 Total sources of working capital 527,675 81,677 Uses of working capital: Acquisition of property and equipment 102,847 2,753 Decrease in long term advance form Capital Improvement Fund 25,000 Total uses of working capital 102,847 27,753 Increase in working capital $424,828 $53,924 Elements of increase (decrease) in working capital: Cash $53,483 ($328) ... Investments 411,687 54,272 Interest receivable (116) Accounts payable (65,342) 96 Due to other funds 25,000 Increase in working capital $424,828 $53,924 113 Exhibit G-10 CITY OF FRIDLEY, MINNESOTA ..._, SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE BALANCE SHEET December 31, 1988 and 1987 1988 1987 Assets Cash $6,750 $ Investments 97,704 74,344 Due from other governments 1,010 Total assets $105,464 $74,344 Liability and Fund Equity Current liability: Accounts payable $811 $775 Fund equity: Retained earnings- Reserved for contingencies 104,653 73,569 Total fund equity 104,653 73,569 Total liability and fund equity $104,653 $73,569 ,^ 114 Exhibit G-11 CITY OF FRIDLEY, MINNESOTA SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Years Ended December 31, 1988 and 1987 1988 1987 Operating revenues: Charges for services $ $50,723 Operating expenses: Personal services 1,336 Supplies and other charges 17,642 12,052 Total operating expenses 17,642 13,388 Operating income(loss) (17,642) 37,335 Non-operating revenues: Interest on investments 6,750 3,417 Insurance reimbursement 41,976 32,817 Total non-operating revenues 48,726 36,234 Net income 31,084 73,569 Retained earnings January 1 73,569 -0- Retained earnings December 31 $104,653 $73,569 115 — Exhibit G-12 CITY OF FRIDLEY, MINNESOTA SELF INSURANCE INTERNAL SERVICE FUND COMPARATIVE STATEMENT OF CHANGES IN FINANCIAL POSITION — Years Ended December 31, 1988 and 1987 1988 1987 Sources of working capital: — Operations: Net income for the year $31,084 $73,569 Total sources of working capital 31,084 73,569 Increase in working capital $31,084 $73,569 Elements of increase (decrease) in working capital: Cash $6,750 $ Investments 23,360 74,344 Due from other governments 1,010 — Accounts payable (36) (775) Increase in working capital $31,084 $73,569 — 116 a, i {{ I $r l ' AGENCY FUNDS ':, Trust and Agency Funds are used to ac cotmt for assets held by a government in e trustee or a'';'..,,,-e- ent capacity far indriiduals, priv�at�:organizations,other 9,everinments or other fends, a .. E zpendable Trust f,and ,4` The City of Fridley maintains only one Expendable I�rust Fund that is used to defray the City I aetn inlstrative costs:asso;,(attwd with the issuance of industrial revenue development bonds. ,,, Six Cities latershe Ac eenc Fund T This fund was established to account for t; e collection of taxes received from the County o, r r behalf of the Six Cities Water shed-C)ist1it;t; HatjLNVtr�taN Aaenc�t and ' This fund was:established to accourztfor the'co(lection.of a three percent tax that has been ,"`r imposed or1 afi the hotels and motels in the north suburban area. The collection process is Vic`°+ administered by the Cit'r,on behait of the.North Metro Convention and Tourism Bureau which will _ us thei money to provide inforrriatior3 to visitors and create an awareness of the facilities available tf`" � ` in this area; ¢ ` '°Deferred Compensation Agent Fund-_ n , This fund accounts for dfeposits held in trust with the International City Managers Association n si,i; � (ICivMA)on behalf of the ity,of Fridley.employees , Erriployees makepretax eontnbutions fo this �f organization throughout their careers which are used as a retirement benefit.= - J , r t fie, r '? ''' ff xT ft ti <P fir{'. t F to t t S a 'w, r 1 — Exhibit H-1 CITY OF FRIDLEY, MINNESOTA TRUST AND AGENCY FUNDS COMBINING BALANCE SHEET — December 31, 1988 With Comparative Totals for December 31, 1987 Expendable Agency Totals — Trust Funds 1988 1987 Assets Cash $5,620 $ $5,620 $ Investments 61,462 4,242 65,704 79,645 Receivables: Accounts 2113 2,113 2,145 Taxes - Unremitted 64 64 298 Delinquent 563 563 692 Other assets 2,167,615 2,167,615 1,789,790 Total assets $67,082 $2,174,597 $2,241,679 $1,872,570 Liabilities and Fund Balance Liabilities: Advance from city's general account $ $106 $106 $ Deposits payable 41,757 2,167,615 2,209,372 1,842,098 Salaries payable 29 Deferred revenue 563 563 692 Due to other governments 6,313 6,313 9,681 — Total liabilities 41,757 2,174,597 2,216,354 1,852,500 Fund balance: Unreserved - undesignated 25,325 -0- 25,325 20,070 Total liabilities and fund balance $67,082 $2,174,597 $2,241,679 $1,872,570 117 Exhibit H-2 CITY OF FRIDLEY, MINNESOTA — TRUST FUND COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE — Years Ended December 31, 1988 and 1987 1988 1987 Revenues: Interest on investments $5,620 $5,051 Expenditures: Current: _ General government 365 Excess of revenues over expenditures 5,255 5,051 — Fund balance, January 1 20,070 15,019 Fund balance, December 31 $25,325 $20,070 — 118 Exhibit H-3 CITY OF FRIDLEY, MINNESOTA AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Year Ended December 31, 1988 _ Balance Balance January 1 Additions Deletions December 31 Assets Cash $ $47,844 $47,844 $ Investments 7,238 4,242 7,238 4,242 Receivables: Accounts 2,145 2,113 2,145 2,113 Taxes - — Unremitted 298 64 298 64 Delinquent 692 88 217 563 Other assets 1,789,790 461,976 84,151 2,167,615 Total Assets $1,800,163 $516,327 $141,893 $2,174,597 Liabilities Advance from city's general account $ $106 $ $106 Deposits payable 1,789,790 461,976 84,151 2,167,615 Deferred revenue 692 88 217 563 Due to other governments 9,681 46,726 50,094 6,313 Total liabilties $1,800,163 $508,896 $134,462 $2,174,597 119 Exhibit H-4 CITY OF FRIDLEY, MINNESOTA SIX CITIES WATERSHED AGENCY FUND -STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Year Ended December 31, 1988 Balance Balance January 1 Additions Deletions December 31 _ Assets - Cash $ $14,271 $14,271 $ Investments 5,310 4,242 5,310 4,242 Taxes receivable: - Unremitted 298 64 298 64 Delinquent 692 88 217 563 Total assets $6,300 $18,665 $20,096 $4,869 - Liabilities - Due to other governments $5,608 $12,968 $14,270 $4,306 Deferred revenue 692 88 217 563 - Total liabilities $6,300 $13,056 $14,487 $4,869 CITY OF FRIDLEY, MINNESOTA HOTEL/ MOTEL TAX AGENCY FUND - STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Year Ended December 31, 1988 Balance Balance January 1 Additions Deletions December 31 - Assets - Cash $ $33,573 $33,573 $ Investments 1,928 1,928 Accounts receivable 2,145 2,113 2,145 2,113 Total assets $4,073 $35,686 $37,646 $2,113 Liabilities Advance from city's general account $ $106 $ $106 Due to other governments 4,073 33,758 35,824 2,007 Total liabilities $4,073 $33,864 $35,824 $2,113 - 120 Exhibit H-5 CITY OF FRIDLEY, MINNESOTA DEFERRED COMPENSATION AGENCY FUND STATEMENT OF CHANGES IN ASSET AND LIABILITY — Year Ended December 31, 1988 — Balance Balance January 1 Additions Deletions December 31 Asset Other assets- Deferred compensation - at — market $1,789,790 $461,976 $84,151 $2,167,615 — Liability Deposits payable $1,789,790 $461,976 $84,151 $2,167,615 121 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 STATEMENT OF GENERAL FIXED ASSETS December 31, 1988 and 1987 1988 1987 — General fixed assets: Land $1,862,154 $1,767,078 Building 2,515,488 1,782,837 — Improvements other than building 18,654,356 17,919,508 Machinery and equipment 2,946,995 2,680,880 Construction in progress 2,363,796 1,509,248 Total general fixed assets $28,342,789 $25,659,551 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 7,063,682 5,823,691 Special revenue fund revenues 180,597 97,871 — Special assessments 16,653,671 15,799,123 Private gifts 747,514 730,628 Other sources 1,157,768 668,681 Total investment in general fixed assets $28,342,789 $25,659,551 123 Exhibit 1-2 CITY OF FRIDLEY, MINNESOTA SCHEDULE OF GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY _ December 31, 1988 Improvements Machinery Other than and Total Land Buildings Buildings Equipment Function and Activity General government - City manager $35,945 $ $ $ $35,945 Cable TV 45,756 45,756 Accounting 63,772 63,772 - Assessing 7,080 7,080 Elections 33,790 33,790 Planning 149,513 124,885 24,628 - Civic center 1,279,560 52,496 1,127,984 36,936 62,144 Total general government 1,615,416 177,381 1,127,984 36,936 273,115 Public safety Public protection 467,141 58,343 408,798 Fire protection 910,970 10,593 331,689 62,390 506,298 - Inspectional services 12,640 12,640 Civil defense 144,036 111,969 32,067 Total public safety 1,534,787 10,593 331,689 232,702 959,803 - Public works Engineering 56,986 56,986 - Street improvements 10,768,514 5,764 10,762,750 Water, sewer and storm sewer 5,413,218 5,413,218 Traffic signal 138,243 138,243 - City garage 1,714,351 107,538 365,648 109,753 1,131,412 Parks 3,517,169 1,254,820 253,799 1,561,622 446,928 Total public works 21,608,481 1,368,122 619,447 17,985,586 1,635,326 - Recreation/Naturalist Recreation 43,827 143 43,684 - Naturalist 1,176,482 306,058 436,168 398,989 35,267 Total recreation/naturalist 1,220,309 306,058 436,168 399,132 78,951 Total general fixed assets allocated to functions 25,978,993 $1,862,154 $2,515,288 $18,654,356 $2,947,195 Construction in progress 2,363,796 Total fixed assets $28,342,789 - 124 - Exhibit 1-3 CITY OF FRIDLEY, MINNESOTA - SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS - BY FUNCTION AND ACTIVITY Year Ended December 31, 1988 General Fixed General Fixed Assets Assets - 1/1/88 Additions Deletions 12/31/88 Function and Activity - General government City manager $25,447 $10,498 $ $35,945 - Cable TV 45,756 45,756 Accounting 53,306 12,689 2,223 63,772 Assessing 7,080 7,080 - Elections 33,790 33,790 Planning 65,658 87,773 3,918 149,513 Civic center 750,924 1,085,466 556,830 1,279,560 '-' Total general government 981,961 1,196,426 562,971 1,615,416 Public safety - Public protection 469,939 142,426 145,224 467,141 Fire protection 654,177 278,998 22,205 910,970 Inspectional services 12,720 1,122 1,202 12,640 - Civil defense 57,805 86,231 144,036 Total public safety 1,194,641 508,777 168,631 1,534,787 - Public works Engineering 45,024 17,967 6,005 56,986 Street improvements 10,768,514 10,768,514 - Water, sewer and storm sewer 5,228,562 184,656 5,413,218 Traffic signal 138,243 138,243 City garage 1,409,612 329,551 24,812 1,714,351 - Parks 3,546,489 18,257 47,577 3,517,169 Total public works 21,136,444 550,431 78,394 21,608,481 - Recreation/Naturalist Recreation 2,961 40,866 43,827 Naturalist 834,296 349,073 6,887 1,176,482 - Total recreation/naturalist 837,257 389,939 6,887 1,220,309 Construction in progress 1,509,248 1,039,204 184,656 2,363,796 Total general fixed assets $25,659,551 $3,684,777 $1,001,539 $28,342,789 125 i 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 STATEMENT OF GENERAL LONG-TERM DEBT December 31, 1988 and 1987 — 1988 1987 Amount available and to be provided for "" the payment of general long-term debt Amount available in Debt Service Funds $23,339,588 $25,961,003 "' Amount to be provided by future taxes 8,505,412 7,263,997 Total available and to be provided $31,845,000 $33,225,000 General long-term debt payable — General long-term debt payable: General obligation special assessment improvement bonds $7,240,000 $7,930,000 Variable rate general obligation tax increment bonds 11,295,000 11,550,000 — General obligation tax increment refunding bonds 9,815,000 10,045,000 Tax increment revenue refunding bonds 3,495,000 3,700,000 Total general long-term debt payable $31,845,000 $33,225,000 127 • 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, 1988 Redevelopment District Original Assessed Value $7,724,045 Current Assessed Value $22,645,434 Captured Assessed Value - — retained by the Authority $14,921,389 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 Total bonds issued $29,090,000 Amounts Redeemed: Paid ($1,110,000) Defeased (3,375,000) Total amount redeemed (4,485,000) .. Outstanding bonds at December 31, 1988 $24,605,000 129 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, 1988 — Current Year Prior Years Total — Sources of Funds: Bond proceeds $ $30,805,467 $30,805,467 — Tax increments received 1,530,798 3,652,982 $5,183,780 Interest on invested funds 678,931 2,622,472 $3,301,403 Real estate sales 384,471 $384,471 — Rental 41,700 217,975 $259,675 Home ownership revenue 10,125 $10,125 Other 2,500 296,507 $299,007 — Total sources of funds 2,253,929 37,989,999 40,243,928 Uses of Funds: — Land acquisition 31,976 10,118,103 $10,150,079 Building acquisition 409,094 69,829 $478,923 Site improvements or — preparation costs 967,304 2,070,364 $3,037,668 Installation of public utilities and improvements 7,917 $7,917 — Bond payments Principal 690,000 505,000 $1,195,000 Interest and fiscal charges 1,023,734 3,047,565 $4,071,299 — Administrative costs 310,321 2,435,449 $2,745,770 Other 127,616 122,378 $249,994 Total uses of funds 3,560,045 18,376,605 $21,936,650 — District Balance ($1,306,116) $19,613,394 $18,307,278 130 STATISTICAL SECTION MEM Table 1 — CITY OF FRIDLEY, MINNESOTA GENERAL GOVERNMENT EXPENDITURES BY FUNCTION (1) LAST TEN FISCAL YEARS Fiscal General Public Civic Public Recreation, Debt Year Government Safety Center _ Works Naturalist Service Total — 1979 581,800 1,495,493 103,387 1,056,758 909,317 38,561 4,185,316 1980 618,215 1,737,883 128,795 1,111,066 839,271 53,569 4,488,799 1981 725,095 1,994,788 137,976 1,430,657 1,087,811 52,545 5,428,872 1982 829,434 1,939,996 115,893 1,321,993 911,141 232793 5,351,250 1983 796,799 2,148,834 156,708 1,881,666 (2) 442,703 (2) 325,707 5,752,417 — 1984 1,017,807 2,201,155 149,332 1,887,379 (2) 442,917 (2) 386,140 6,084,730 1985 1,267,563 2,270,691 162,220 1,929,934 (2) 535,801 (2) 354,029 6,520,238 1986 1,872,200 2,576,847 180,839 1,886,888 (2) 535,430 (2) 1,006,771 8,058,975 — 1987 1,927,147 2,707,681 160,222 1,992,949 (2) 530,066 (2) 2,203,059 (3) 9,521,124 1988 1,948,427 2,741,465 205,654 2,014,817 (2) 589,771 (2) 2,752,080 (3) 10,252,214 Note (1) Includes General, Special Revenue, Capital Projects (HRA Fund only) and Debt — Service Funds (2) Parks Maintenance activity is now under Public Works (3) Special Assessment Debt Service Fund included 131 Table 2 CITY OF FRIDLEY, MINNESOTA GENERAL REVENUE BY SOURCE (1) LAST TEN FISCAL YEARS General Property Taxes& Intergovern- Charges For Fiscal Special Licenses mental Current Miscellaneous Total ., Year Assessment (2) & Permits Reveune Services Revenue Revenue 1979 1,948,751 303,639 1,646,918 103,267 400,317 4,402,892 1980 1,974,874 229,148 2,659,608 108,547 558,006 5,530,183 1981 2,115,674 233,901 3,040,678 129,887 684,794 6,204,934 1982 2,725,738 360,949 2,238,358 145,551 937,761 6,408,357 — 1983 2,794,763 320,964 2,994,968 131,018 943,014 7,184,727 1984 2,851,420 411,054 3,386,532 145,394 1,181,901 7,976,301 1985 3,146,086 422,606 3,228,902 153,483 1,299,011 8,250,088 1986 3,484,015 358,962 3,579,436 157,829 2,205,177 9,785,419 1987 4,662,570 (2) 405,583 3,256,331 164,617 2,529,385 11,018,486 1988 5,198,696 (2) 378,553 3,326,179 160,255 1,919,427 10,893,110 Note (1) Includes General, Special Revenue, Capital Projects(HRA Fund only) and Debt Service Funds (2) Special Assessment Debt Service Fund included 132 Table 3 CITY OF FRIDLEY, MINNESOTA CERTIFIED PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Collections Percentage Collection — of Current of Levy of Prior Total Certified Year's Taxes Collected Year's Taxes Ratio Outstanding, Tax levy During During During of Total Current and Fiscal For Fiscal Fiscal Fiscal Fiscal Total Collections Delinquent Year Period Period (1)(2) Period Period Collections to Tax Levy Taxes 1979 2,348,124 2,318,648 98.74% 41,503 2,360,151 1.0051:1 41,316 1980 2,512,176 2,461,402 97.98% 46,345 2,507,747 .9982:1 54,254 1981 2,767,955 2,502,610 90.41% 49,166 2,551,776 .9219:1 283,600 1982 2,920,626 2,777,691 95.11% 21,771 2,799,462 .9585:1 153,574 1983 3,151,324 3,086,799 97.95% 54,674 3,141,473 .9969:1 124,610 1984 3,152,952 3,049,773 96.73% 45,490 3,095,263 .9817:1 132,652 — 1985 3,178,325 3,072,588 96.67% 76,894 3,149,482 .9909:1 150,983 1986 3,232,877 3,152,249 97.51% 44,094 3,196,343 .9887:1 180,738 1 987 3,406,825 3,253,858 95.51% 49,299 3,303,157 .9696:1 284,407 — 1988 3,440,107 3,376,188 98.14% 103,484 3,479,672 1.0115:1 244,842 _ Note (1) Includes Homestead Credit (2) Excludes collections from properties pledged to tax increment 133 CITY OF FRIDLEY, MINNESOTA ASSESSED AND ESTIMATED MARKET VALUE OF ALL TAXABLE PROPERTY LAST TEN FISCAL YEARS — Fiscal Year Payable 1979 1980 1981 1982 Assessment Year 1978 1979 1980 1981 Population, fiscal year 32,644 30,228 30,200 29,920 Real Property: Estimated market value $474,610,022 $555,096,298 $632,523,959 $723,016,622 — Assessor's limited market value $458,973,683 $522,308,032 N/A (2) N/A (2) Assessed value - — Homestead $21,633,558 $24,392,539 $59,013,036 $65,308,228 Excess and non-homestead 134,204,943 141,946,084 121,924,290 142,031 ,048 Less area wide net allocation (7,376,217) (8,858,508) (10,022,598) (9,340,006) _ Less tax-increment value (954,050) (2,708,711) (2,892,948) Assessed value (taxable) $148,462,284 $156,526,065 $168,206,017 $195,106,322 — Personal property: Estimated market value $17,424,500 $17,899,900 $18,731,800 $19,328,400 Assessed value (taxable) $7,492,535 $7,696,957 $8,054,674 $8,311,212 Totals: Estimated market value $492,034,522 $572,996,198 $651,255,759 $742,345,022 — Assessor's limited market value $458,973,683 $522,308,032 N/A (2) N/A (2) Assessed value (taxable) $155,954,819 $164,223,022 $176,260,691 $203,417,534 Per market value ratios Assessor's limited market value .968:1 .943:1 N/A (2) N/A (2) — Assessed value (taxable) .317:1 .287:1 .271:1 .274:1 Per capita valuations — Estimated market value $15,073 $18,956 $21 ,565 $24,811 Assessed value (taxable) $4,777 $5,433 $5,836 $6,799 — Notes (1) The Anoka County Auditor's Office determines assessed values on January 2 of each year pursuant to State Statutes and determines Total Assessed Value (Taxable). The Total Assessed Value (Taxable) on January 2, 1987 upon which the 1988 levy was based was — $229,580,273. (2) In 1980, Limited Market Value was omitted as a consideration on determining — taxable value. 134 Table 4 1983 1984 1985 1986 1987 1988 1982 1983 1984 1985 1986 1987 29,810 29,750 29,440 29,423 29,310 29,336 $776,074,092 $802,180,000 $807,910,500 $839,392,000 $879,498,600 $907,274,900 N/A (2) N/A (2) N/A (2) N/A (2) N/A (2) N/A (2) $94,445,737 $94,707,547 $91,923,166 $91,343,841 $94,010,922 $94,216,387 126,066,013 129,931,205 132,234,317 143,450,918 153,262,018 152,658,373 ..., (13,120,471) (11,732,970) (11,693,200) (11,434,459) (13,473,724) (13,852,623) (3,951,300) (2,765,895) (5,458,497) (9,032,222) (11,348,839) (14,921,389) �. $203,439,979 $210,139,887 $207,005,786 $214,328,078 $222,450,377 $218,100,748 $19,741,300 $21,263,600 $21,534,300 $26,208,700 $26,531,000 $26,731,000 $8,488,759 $9,143,348 $9,259,749 $11,245,936 $11,393,525 $11,479,525 $795,815,392 $823,443,600 $829,444,800 $865,600,700 $906,029,600 $934,005,900 N/A (2) _ N/A (2) N/A (2) N/A (2) N/A (2) N/A (2) $211,928,738 $219,283,235 $216,265,535 $225,574,014 $233,843,902 $229,580,273 N/A (2) N/A (2) N/A (2) N/A (2) N/A (2) N/A (2) .266:1 .266:1 .261:1 .261:1 .258:1 .246:1 $26,696 $27,679 $28,174 $29,419 $30,912 $31,838 $7,109 $7,371 $7,346 $7,667 $7,978 $7,826 135 CITY OF FRIDLEY, MINNESOTA STATEMENT OF VALUATIONS AND LEVIES BY CLASSES OF PROPERTY — DECEMBER 31, 1988 Assessed Valuation Assessed Assessed Before Valuation Assessed Valuation —. Contibution Contibution Value Allocated to to Metro Tax to Metro Tax Received From Tax Increment Class of Property Pool Pool Metro Tax Pool Financing Commercial $49,230,181 ($12,287,631) $ ($1 ,402,611) Industrial 66,120,227 ($21,224,090) -- F.M.C. #85 6,416,245 ($1,898,997) Gas 1,332,656 ($558,529) Electric 3,730,624 ($1,079,822) -- Public Utilities * 546,469 ($186,176) Vacant land, residential 945,840 ($119,371) Apartments 24,836,142 ($13,130,822) _ Residential 105,195,901 ($268,585) Distribution (1) 23,382,622 Total $258,354,285 ($37,235,245) $23,382,622 ($14,921,389) Notes * Real Estate and Machinery (1) This represents the "assessed value" distributed to Fridley from the metro tax pool. The assessed value for the first six classes of property shown above has been reduced for local — taxable value to 85.59% of the actual assessed value. This taxable value is multiplied by the applicable local mill rates. The remaining 14.41% of assessed value is multiplied by the Metro Mill Rate of 118.812 mills. This money goes into the Metro Pool. The City of Fridley received — $340,334 from this pool in 1988. 136 "- Table 5 Dollars of Adjusted Percent Certified Assessed of Total City Tax Value City Tax Levy $35,539,939 15.48% $532,542 $44,896,137 19.56% 672,739 $4,517,248 1.97% 67,688 $774,127 0.34% 1 1,600 _ $2,650,802 1.15% 39,720 $360,293 0.16% 5,399 $826,469 0.36% 12,384 $11,705,320 5.10% 175,396 $104,927,316 45.70% 1,572,266 $23,382,622 10.18% 350,373 $229,580,273 100.00% $3,440,107 The tax shown for Residential is the total amount received by the City. Owners of Homestead Residential properties do not pay this full amount. The State pays up to$700 per homestead in credit. An additional refund may be received by the taxpayer from the State depending on income, age and amount of real estate tax for their homestead property. 137 — CITY OF FRIDLEY, MINNESOTA SIGNIFICANT MINNESOTA TAX POLICIES DECEMBER 31, 1988 GENERAL — All non-exempt property in Minnesota is subject to taxation by local taxing districts. The tax levied on a property is determined by multiplying its assessed value by the tax rate. The tax rate (mills) is determined by the County Auditor, dividing each tax levy by the taxable assessed valuation. — Properties are physically reviewed by assessors at least once every four years. The Minnesota Department of Revenue analyzes sales of properties annually, comparing sales prices - with the local assessors market value. This establishes a sales ratio. The sales ratio is also used in determining municipal and school district state aids. –" The assessors market value is multiplied by the appropriate percentage to arrive at assessed value. This percentage varies by class of property. Residential homestead property. Part of the market value said to be "homestead" ($68,000 for taxes — due in 1988) is assessed at 17%, and the balance at 27%. The assessed value of a homestead residence with a market value of $70,000 would be $12,100 for taxes collectible in 1988 (see "Homestead Credit" note below). — Residential non-homestead property of 1-2-or-3 units is assessed at 28% of its market value. The assessed value of a non-homestead residence (rental property) with a market value of $50,000 is $14,000. Apartments of 4 units or more are assessed at 34% ($50,000 value x 34% = $17,000). — Industrial/commercial/utility property is assessed at 28% of the first$60,000 of estimated market value, and 43% of balance. Market value of utilities is computed by the Minnesota Department of Revenue. — HOMESTEAD CREDIT. Homestead taxes are reduced by a 54% credit (maximum $700). This credit is subtracted on the tax statement, and the taxpayer pays only the net amount; homestead credits are reimbursed by the State to the taxing districts in proportion to their levies, thus relieving the property — tax burden. Property tax refund. Further residential property tax credits are gauged by percentages of the net -_ property tax to household income: to the extent a homeowners income (1% for lower income groups, up to 4% for incomes of $40,000) homeowners or renters may receive State credits up to $1,825 (combined homestead and income-adjusted credits). 138 CITY OF FRIDLEY, MINNESOTA - PROPERTY TAX RATES FOR $1,000 OF ASSESSED VALUE AND CALCULATED TAX LEVIES ALL OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS Property Tax Rates - School School School School District District District District - Fiscal City No. 11 No. 13 No. 14 No. 16* County Year (Mills) (Mills) (Mills) (Mills) (Mills) (Mills) 1979 15.06 47.71 45.04 47.17 62.25 24.29 - 1980 15.306 43.21 46.73 45.08 61.83 25.84 1981 15.722 38.00 41.48 41.12 51.08 27.91 1982 14.278 46.847 48.266 46.365 65.542 26.113 - 1983 14.908 45.474 50.156 55.679 62.837 26.594 1984 14.340 55.225 56.227 60.332 63.739 28.363 1985 14.654 52.830 50.487 59.675 60.914 27.017 - 1986 14.256 55.740 53.797 60.919 63.878 28.738 1987 14.555 54.926 63.234 57.087 60.989 29.414 1988 14.992 62.181 60.733 67.454 70.88 30.766 - Certified Levies Calculated Tax Levies School School School School -" Fiscal District District District District Year City No. 11 No. 13 No. 14 No. 16* County 1979 2,348,124 330,743 1,634,858 3,668,695 2,204,204 3,788,253 1980 2,512,176 319,712 1,786,183 3,606,461 2,395,401 4,235,650 1981 2,767,955 296,393 1,795,295 3,493,129 2,144,854 4,904,234 - 1982 2,920,626 447,988 2,383,069 4,412,574 3,130,401 5,332,248 1983 3,151,324 461,623 2,597,543 5,576,373 3,052,396 5,630,016 1984 3,152,952 563,791 2,960,066 6,228,287 3,310,710 5,728,438 - 1985 3,163,427 536,388 2,650,406 6,152,690 3,122,134 5,825,992 1986 3,232,877 576,032 2,894,115 6,402,200 3,555,419 6,451,056 1987 3,406,825 585,299 3,522,818 6,298,305 3,500,364 6,864,334 - 1988 3,440,107 647,200 3,599,278 7,437,847 3,817,013 7,031,655 * Vocational/Technical District#916 included in District No. 16 beginning in 1975. ** Six Cities Watershed District included with School District No. 11 beginning in 1985. *** Rice Creek Watershed District included with School District No. 13,14 and 16. - 140 Table 6 Totals Total School School School School - Special District District District District Districts No. 11** No. 13*** No. 14*** No. 16*,*** (Mills) (Mills) (Mills) (Mills) (Mills) - 3.35 90.41 87.74 89.87 104.95 3.60 87.44 91.48 89.83 106.58 4.36 85.54 89.47 89.11 99.07 4.057 90.864 92.714 90.813 109.990 4.649 91.170 96.307 101.830 108.988 4.916 100.336 101.571 105.676 109.083 - 5.229 99.480 97.257 106.445 107.684 4.956 103.502 101.673 108.795 111.754 5.761 104.299 112.889 106.742 110.644 5.531 113.334 112.022 118.743 122.169 - Net - Total Total Yearly Contribution Tax Total Special All Local Percentage To Metro Increment Tax Districts Tax Levies Change Tax Pool Districts Levies 470,367 14,445,244 2.28% 922,702 15,367,946 542,080 15,397,663 6.59% 1,083,986 85,221 16,566,870 718,810 16,120,670 4.70% 1,113,318 193,763 17,427,751 779,684 19,406,590 20.38% 925,052 304,517 20,636,159 924,841 21,394,116 10.24% 1,402,913 340,539 23,137,568 1,044,451 22,988,695 7.45% 1,209,389 311,160 24,509,244 1,073,929 22,524,966 (2.02)% 1,343,511 573,946 24,442,423 1,101,118 24,212,817 7.49% 1,298,052 867,372 26,378,241 - 1,288,391 25,466,336 5.18% 1,608,958 993,610 28,068,904 1,246,009 27,219,109 6.88% 1,799,575 993,610 30,012,294 a a 141 Table 7 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 Current Delinquent Year Due Collected Due Due Collected Levy Assessments 1979 678,501 606,763 89.43% 134,352 741,115 109.23% 379,149 - 1980 699,330 628,753 89.91% 95,451 724,204 103.56% 404,012 1981 785,128 755,588 96.24% 87,206 842,794 107.34% 347,975 1982 946,330 780,838 82.51% 65,666 846,504 89.45% 432,530 1983 845,916 739,977 87.48% 99,458 839,435 99.23% 429,947 1984 811,722 710,323 87.51% 144,614 854,937 105.32% 371,951 1985 893,674 802,910 89.84% 133,182 936,092 104.75% 344,254 - 1986 765,737 682,762 89.16% 143,891 826,653 107.96% 176,879 1987 917,525 827,504 90.19% 30,524 858,028 93.52% 221,994 1988 782,079 683,796 87.43% 41,719 725,515 92.77% 202,296 - • 142 CITY OF FRIDLEY, MINNESOTA — HISTORY OF CERTIFIED TAX LEVIES AND ACTUAL MILL RATES LAST TEN FISCAL YEARS 1979 1980 1981 1982 Certified tax levies General Fund $2,264,856 $2,428,376 $2,684,615 $2,838,504 General Debt Service Funds 39,900 38,800 38,570 37,352 — Capital Improvement Fund 43,368 45,000 44,770 44,770 Subtotal 2,348,124 2,512,176 2,767,955 2,920,626 — Agency Fund Total $2,348,124 $2,512,176 $2,767,955 $2,920,626 — Actual mill rate General Fund 14.52 14.795 15.248 13.877 — General Debt Service Funds 0.26 0.274 0.220 0.183 Capital Improvement Fund 0.28 0.237 0.254 0.218 Subtotal 15.06 15.306 15.722 14.278 — Agency Fund — Total 15.06 15.306 15.722 14.278 Notes (1) Property values include net amount allocated pursuant to Laws of 1971, Extra Session, Chapter 23, from Area-Wide "Pool". — Beginning with taxes collectable in 1975, the value on which the City of Fridley's mill rate is calculated, is not the City's assessed value but a taxable value based on the City of Fridley's — assessed value and the net additiion or reduction from the Metropolitan Tax Pool. 144 Table 8 s 1983 1984 . 1985 1986 1987 1988 - $3,070,254 $3,071,882 $3,083,270 $3,141,859 $3,311,826 $3,345,190 - 36,300 36,300 35,175 35,628 44,770 44,770 44,982 45,521 85,542 86,320 3,151,324 3,152,952 3,163,427 3,223,008 3,397,368 3,431,510 - 14,898 9,869 9,457 8,597 $3,151,324 $3,152,952 $3,178,325 $3,232,877 $3,406,825 $3,440,107 -" 14.525 13.970 14.283 13.895 14.188 14.614 0.172 0.166 0.163 0.158 0.211 0.204 0.208 0.203 0.367 0.378 - 14.908 14.340 14.654 14.256 14.555 14.992 0.240 0.074 0.075 0.066 - 14.908 14.340 14.894 14.330 14.630 15.058 145 CITY OF FRILDEY, MINNESOTA — RATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUES AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS — Deduct _ Total City Debt Special Assessed Service Fund Assessment, Fiscal Value Gross Monies Revenue and — Year Population (Taxable) Bonded Debt Available HRA Bonds 1979 32,664 $155,954,819 $6,545,000 $64,383 $6,315,000 — 1980 30,228 $164,223,022 $6,105,000 $69,480 $5,905,000 1981 30,200 $176,260,691 $8,954,000 $76,953 $8,784,000 1982 29,920 $203,417,534 $9,160,000 $82,255 $9,020,000 1983 29,810 $211,928,738 $8,285,000 $84,240 $8,180,000 1984 29,750 $219,283,235 $7,470,000 $86,709 $7,400,000 1985 29,440 $216,265,535 $22,125,000 $86,117 $22,090,000 1986 29,423 $225,574,014 $19,385,000 $91,510 $19,385,000 1987 29,310 $233,843,902 $18,595,000 -0- $18,595,000 1988 29,336 $229,580,273 $17,605,000 -0- $17,605,000 — 146 Table 9 — Debt to Total Assessed Net General — Net General Value Bonded Debt Bonded Debt (Taxable) Per Capita — $165,617 0.11% $5.07 $130,520 0.08% $4.32 $93,047 0.05% $3.08 — $57,745 0.03% $1.93 $20,760 0.01% $0.70 -0- - - — -0- - - -0- - - -0- - - -0- - - — 147 Table 10 — CITY OF FRIDLEY,MINNESOTA — COMPUTATION OF LEGAL DEBT MARGIN DECEMBER 31, 1988 Assessed Value $229,580,273 (A) Debt Limit 7.33% of Assessed Value $16,828,234 Amount of Debt Applicable to Debt Limit: — Total Bonded Debt $17,605,000 (B) Deductions: _ Tax Increment Redevelopment Bonds $9,815,000 Special Assessment Bonds 4,295,000 Tax Increment Revenue Bonds 3,495,000 17,605,000 Total Amount of Debt Applicable to Debt Limit -0- Legal Debt Margin $16,828,234 Notes (A) M.S.A. Section 475.53 (see following page) (B) M.S.A. Section 475.51 (see following page) — 148 CITY OF FRIDLEY, MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN (CONTINUED) YEAR ENDED DECEMBER 31, 1988 — Note (A): M.S.A. Section 475.53 et seq. Limit on Net Debt "Subdivision 1. Generally, except as otherwise provided in section 475.51, 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 7.33 percent of the assessed value." Note (B): M.S.A. Section 475.51 Definitions — "Subdivision 4. "Net Debt' means the amount remaining after deduction from its gross debt the amount of current revenues which are applicable within the current fiscal year to the payment of any debt, and the aggregate of the principal of the following: — (1) Obligations issued for improvements which are payable wholly or partly from the proceeds of special assessments levied upon property specially benefited thereby, including those which are general obligations of the municipality issuing them, if the municipality is entitled to — reimbursement in whole or in part from the proceeds of the special assessments. (2) Warrants or orders having no definite or fixed maturity. (3) Obligations payable wholly from the income from revenue producing conveniences. (4) Obligations issued to create or maintain a permanent improvement revolving fund. (5) Obligations issued for the acquisition, and betterment of public waterworks systems, and public lighting, heating or power systems, and 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 124.43. (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 116J.37. NOM (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." 149 Table 11 CITY OF FRIDLEY, MINNESOTA — COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT AND COMPARATIVE DEBT RATIOS DECEMBER 31, 1988 — 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 $17,605,000 $17,451,900 $153,100 100.00% $153,100 Overlapping debt: — School Districts No. 11 $22,720,000 $2,782,316 $19,937,684 1.37% $273,146 No. 13 150,000 106,025 43,975 34.48% 15,163 — No. 14 265,000 722,762 0 No. 16 8,482,309 3,253,028 5,229,281 37.37% 1,954,182 Metro Transit 13,650,000 5,910,000 7,740,000 1.41% 109,134 Metro Council 358,084,000 71,849,788 286,234,212 1.30% 3,721,045 — Anoka County 18,334,802 899,424 17,435,378 18.34% 3,197,648 — Vocational/Technical District No. 916 11,370,000 1,332,897 10,037,103 2.12% 212,787 Overlapping debt 433,056,111 86,856,240 346,657,633 9,483,105 — Total direct and overlapping debt $450,661,111 $104,308,140 $346,810,733 $9,636,205 — 150 — Table 12 CITY OF FRIDLEY, MINNESOTA — RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT TO TOTAL GENERAL GOVERNMENT EXPENDITURES LAST TEN FISCAL YEARS — Ratio of Debt Total Total Service to — Fiscal Debt General General Year Principal Interest Service Expenditures(1) Expenditure 1979 30,000 8,500 38,561 4,185,316 .0092:1 1980 42,725 10,844 53,569 4,488,799 .0119:1 1981 43,743 8,802 52,545 5,428,872 .0097:1 1982 44,845 187,948 232,793 5,351,250 .0435:1 1983 35,000 290,707 325,707 5,752,417 .0566:1 1984 85,000 301,140 386,140 6,084,730 .0635:1 1985 120,000 234,029 354,029 6,520,238 .0543:1 1986 215,000 791,771 1,006,771 8,058,975 .1249:1 1987 740,000 1,463,059 2,203,059 9,521,124 .2314:1 1988 1,380,000 1,372,080 2,752,080 10,252,214 .2684:1 (1) Includes General, Special Revenue, Debt Service and Capital Projects (HRA Fund Only) (2) Special Assessment Debt Service Fund included as of 1987 151 Table 13 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 Expenses Services Principal Interest Total Coverage - 1979 1,394,580 1,237,504 157,076 101,724 25.781 127,505 1 .23 1980 1,477,709 1,376,970 100,739 106,964 20.j57 127,921 0.79 1981 1,560,081 1,681,670 (121,589) 107,750 16,065 123,815 - - 1982 1,753,918 1,767,818 (13,900) 97,500 11 ,545 109,045 - 1983 1,928,973 1,850,966 78,007 50,000 8,659 58,659 1 .33 1984 2,401,206 2,043,653 357,553 50,000 6,907 56,907 6.28 - 1985 2,296,415 2,253,164 43,251 50,000 5,152 55,152 0.78 1986 2,434,100 2,522,048 (87,948) 50,000 3,400 53,400 - 1987 2,473,814 2,513,721 (39,907) 50,000 1 ,646 51 ,646 - 1988 2,725,742 2,846,743 (121,001) 20,000 380 20,380 - 152 Table 14 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) — 1979 32,644 $7,239 26.2 6,666 2.8% 1980 30,228 (2) 8,654 (2) 27.4 (2) 6,331 4.4% 1981 30,200 8,700 27.7 (3) 5,915 4.7% 1982 29,920 8,750 28.0 (3) 5,595 6.6% — 1983 29,810 9,188 28.3 5,238 7.4% 1984 29,750 9,647 28.6 5,007 5.0% 1985 29,440 10,129 28.9 4,833 4.9% — 1986 29,423 10,635 29.2 4,660 4.3% 1987 29,310 13,238 29.9 4,453 4.7% 1 988 29,336 13,241 29.9 4,367 3.1% — Sources: — (1) Estimated by Metropolitan Council (2) Current Population Report- Bureau of the Census (3) Estimated by the City of Fridley Community Development Department - excludes — Grace Parochial High School as it is not supported by property tax dollars (4) Source book of Demographic and Buying Power (5) Minnesota Department of Economic Security-Twin Cities Labor Market — (6) Beginning in 1983, Unemployment Rate as reported is area wide for the County of Anoka rather than for the City of Fridley only 153 Table 15 — CITY OF FRIDLEY, MINNESOTA — CONSTRUCTION BANK DEPOSITS AND PROPERTY VALUE LAST TEN FISCAL YEARS Commercial Construction Residential Construction Estimated Market Value — Number Number Bank(1) Fiscal of of Deposits Taxable Non- Year Units Value Units Value (Thousands) Property Taxable (2) Total _ 1979 47 $7,755,397 404 $4,107,660 $17,885 $492,034,522 $63,489,810 $555,524,332 1980 36 23,922,267 367 2,374,966 18,763 572,996,198 63,489,810 636,486,008 1981 32 4,589,180 348 2,809,033 19,399 651,255,759 109,749,739 761,005,498 1982 60 5,498,098 305 3,012,844 22,875 742,345,022 109,749,739 852,094,761 1983 48 8,921,297 348 2,969,417 26,099 795,815,392 109,749,739 905,565,131 1984 67 19,332,432 345 4,388,689 27,917 823,443,600 109,749,739 933,193,339 1985 54 12,729,783 365 5,430,598 24,074 829,444,800 109,749,739 939,194,539 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 Sources: (1) Fridley State Bank, Annual Financial Statement — (2) Non-taxable property is reevaluated by the county assessors every six years 154 Table 16 CITY OF FRIDLEY, MINNESOTA PRINCIPAL TAXPAYERS DECEMBER 31, 1988 Fiscal Year 1988 Percent 1987* of Total Assessed Assessed Rank Taxpayer Type of Business Valuation Valuation** 1 Onan Corporation Portable electric generators $7,859,828 3.04% 2 Target Stores Discount store, warehouse and office 6,837,821 2.64% 3 LaMaur, Inc. Cosmetics 3,928,553 1.52% 4 Burlington Northern Railroad Operating property 3,885,878 1.50% 5 Maurice Fillister Georgetown apartments 3,604,272 1.39% _ 6 Medtronics, Inc. Electro-medical devices 2,506,543 0.97% 7 Holiday Plus Discount department store 2,396,675 0.93% 8 FMC Corporation Naval ordinance 2,188,945 0.85% _ 9 Five Sands Meadow Run apartments 2,115,476 0.82% 10 Vantage Properties Wholesale Club 2,091,937 0.81 11 JHC, Inc. Warehousing, oil blending 1,797,000 0.70% 12 The Pillsbury Company Totino's Pizza 1,769,265 0.68% Total $40,982,193 15.85% Notes The 1987 Assessed Value was used to determine the Taxable value on January 2, 1987, upon which the 1988 levy was based. ** Before contribution to Metropolitan Tax Pool. 155 CITY OF FRIDLEY, MINNESOTA INSURANCE COVERAGE DECEMBER 31, 1988 All risk perils, 100% coinsurance _ Buildings and contents Blanket, agreed amount endorsement, replacement cost coverage 812,577,555 Contractor's equipment 661 ,842 Miscellaneous equipment 316,948 Voting machines 10,000 Neon and outdoor signs 18,818 — Boiler and machinery 500,000 Comprehensive general liability Bodily injury Each occurrence 600,000 — Aggregate 600.000 Property damage Each occurrence 600,000 — Aggregate 600.000 Automobile liability — Bodily injury and property damage 600,000 Personal injury protection 40,000 Uninsured/underinsured motorist 600,000 Comprehensive Actual cash value — Collision Actual cash value Liquor liability Bodily injury — Each person 1,000,000 Each common cause 1,000,000 Property damage Each common cause 1,000,000 — Loss of means of support 1,000,000 Law Enforcement professional liability — Combined single limit per loss Personal injury, bodily injury, property damage, punitive damages 600,000 Money and securities, inside and outside premises: 6431 University Avenue (City Hall) 15,000 — 214 Mississippi Street(Liquor Warehouse) 25,000 6289 Highway 65 (Liquor Warehouse Annex) 15,000 Municipal errors and omissions liability 600,000 Employee benefits program liability 600,000 — Worker's compensation Statutory PRINCIPAL OFFICIALS' BONDS DECEMBER 31, 1988 — All employees are covered by a blanket of faithful performance bond of $100,000. 156 CITY OF FRIDLEY, MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION DECEMBER 31, 1988 Date of Incorporation (Village of Fridley) July 1, 1949 Date of Adoption of City Charter September 10, 1957 effective September 25, 1957 Form of Government Council/Manager Fiscal year begins January 1 Area of City 11 square miles Bond rating (Moody's Investors Service, Incorporated) Aa-1 Elections Last Election - Federal Presidential November 8, 1988 Registered voters 18,878 Number of votes cast 14,879 Percent (%) of registered voters voting 78.8% Population 1950 Federal Census 3,796 1960 Federal Census 15,182 1 965 Federal Census 24,789 _ 1970 Federal Census 29,233 1975 Estimated by Metropolitan Council 32,486 1976 Estimated by Metropolitan Council 31,570 1977 Estimated by Metropolitan Council 31,940 _. 1978 Estimated by Metropolitan Council 33,450 1979 Estimated by Metropolitan Council 32,644 1980 Federal Census 30,228 1981 Estimated by Metropolitan Council 30,200 1982 Estimated by Metropolitan Council 29,920 1983 Estimated by Metropolitan Council 29,810 1984 Estimated by Metropolitan Council 29,750 1985 Estimated by Metropolitan Council 29,440 1986 Estimated by Metropolitan Council 29,423 1987 Estimated by Metropolitan Council 29,310 1988 Estimated by Metropolitan Council 29,336 Permanent Employees--As of December 31 Number 1977 148* 1978 141* 1979 122 1980 126 1981 1982 129 1983 123 1984 119 119 1985 125 1986 125 1987 125 — 1988 126 *Includes CETA employees 157 CITY OF FRIDLEY, MINNESOTA MISCELLANEOUS STATISTICAL INFORMATION (CONTINUED) DECEMBER 31, 1988 — Fire protection Number of stations 2 — Volunteer firefighters 28 Full-time firefighters 5 Fire rating Class 4 — Police protection Number of stations 1 — Number of sworn officers 3 Number of street lights 950 — Number of traffic signal installations 32 Number of other special signal installations 2 Number of civil defense warning sirens 8 — Miles of streets and sidewalks (including State and County) City streets 125.11 — Trunk highways 10.80 County roads 14.56 Sidewalks 10.98 — Miles of sewer Storm 40.87 — Sanitary 101.90 Miles of water mains 109.20 _ Municipal water system source Primary source City of Fridley Water Plant — (13 wells)--capacity of 15 million gallons per day — Secondary source City of Minneapolis (Mississippi River)--35 million gallons per day — Number of water connections December 31, 1988 8,195 connections Daily average consumption (gallons) 6.9 million gallons — Elevated storage capacity .5 million gallons Water storage reservoirs 4.5 million gallons Number of fire hydrants 1,066 — Municipal sewer system Disposal --through Metropolitan Waste Control — Commission Number of connections December 31, 1988 8,291 Average daily flow (includes infiltration/inflow) 3.15 million gallons — 158 CITY OF FRIDLEY, MINNESOTA _ MISCELLANEOUS STATISTICAL INFORMATION (CONTINUED) DECEMBER 31, 1988 _ Parks and Recreation Areas Developed 425 Acres Undeveloped 125 Acres Total 550 Acres City Parks Schools Total Number of: Hockey rinks 9 0 9 • General skating rinks 15 0 15 _ Playgrounds 29 8 37 Swimming beaches 1 0 1 Swimming pools 0 1 1 _ Picnic grounds 2 0 2 Day camp sites 1 0 1 Baseball diamonds 4 5 9 Softball diamonds 27 11 38 Outdoor basketball courts 21 9 30 Tennis courts 25 19 44 Horseshoe courts 16 0 16 Archery ranges 1 0 1 ' Permanent playground buildings 1 0 1 _ Permanent picnic shelters 7 0 7 Soccer fields 7 2 9 Football fields 8 8 16 159 SME CITY OF FRIDLEY, MINNESOTA GENERAL INFORMATION DECEMBER 31, 1988 Location - Transportation — The City of Fridley, with a total land area of eleven square miles and an estimated population of 29,336, 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, Burlington Northern Railroad and Minnesota Transfer Railway. 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 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 Manor Nursing Home. 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 169 certified personnel in the education of about 2,533 students. Grace Parochial High School has an enrollment of 775. 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 enrollment of 1,834 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. 160 CITY OF FRIDLEY, MINNESOTA GENERAL INFORMATION (CONTINUED) DECEMBER 31, 1988 Larger Employers Larger employers in the City of Fridley include: Full-Time Employer Product or Service Employees FMC Corporation Pumps and naval ordinance 3,400 Onan Corporation Portable generators, electronic 1,850 equipment Medtronics, Inc. Electro-medical devices and hdqtrs. 1,591 Burlington Northern Railroad Northtown yard 1,028 Unity Hospital Medical services 476 Kurt Manufacturing Machine parts 730 LaMaur, Inc. Cosmetics 695 Target Stores, Warehouse Discount department store 360 Minco Products, Inc. Electronic devices 436 Midwest Printing Printing TV guide 270 The Pillsbury Company Totino's frozen foods 226 Independent School District#14 Fridley school district 236 Safetran Systems Corporation Railroad accessories 208 Longview Fiber Company Packaging supplies 138 Strite-Anderson Manufacturing Aluminum die castings 100 City of Fridley Governmental entity 126 Barry Blower Marly Corporation Air moving devices 130 161