HRA Annual Financial Report 1998 FRIDLEY HOUSING AND
REDEVELOPMENT AUTHORITY
A COMPONENT UNIT OF THE
CITY OF FRIDLEY, MINNESOTA
ANNUAL FINANCIAL REPORT
DECEMBER 31, 1998
Prepared by:
Department of Finance
Jai i'IG V og1::
Ar'rslinta,
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
—. a component unit of the
CITY OF FRIDLEY, MINNESOTA
December 31, 1998
TABLE OF CONTENTS
—
Reference Page
Organization 1
Independent Auditor's Report 3
Combined Financial Statements:
- Combined Balance Sheet-All Fund Types and Account Group Statement 1 8
Combined Statement of Revenues, Expenditures and Fund Balance -
All Governmental Fund Types Statement 2 9
Notes to Financial Statements 11
Required Supplementary Information:
Year 2000 Issue (Unaudited) 20
Combining and Individual Fund Financial Statements:
General Fund:
Balance Sheet Statement 3 24
Statement of Revenues, Expenditures and Fund Balance Statement 4 25
Special Revenue Fund:
Comparative Balance Sheet Statement 5 26
Comparative Statement of Revenues, Expenditures and Fund Balance Statement 6 27
Debt Service Fund:
Comparative Balance Sheet Statement 7 28
Comparative Statement of Revenues, Expenditures and Fund Balance Statement 8 29
Capital Projects Funds:
Combining Balance Sheet Statement 9 30
-• Combining Statement of Revenues, Expenditures and Fund Balance Statement 10 34
Comparative Statement of General Long-Term Debt Statement 11 38
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
—
CITY OF FRIDLEY, MINNESOTA
DECEMBER 31, 1998
—
ORGANIZATION
COMMISSIONERS:
— LARRY COMMERS, CHAIRMAN
JIM McFARLAND
JOHN MEYER
DUANE PRAIRIE
VIRGINIA SCHNABEL
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H LB Tautges Redpath, Ltd.
— Certified Public Accountants and Consultants
INDEPENDENT AUDITORS REPORT
To the Honorable Chair and
Commissioners of the Fridley Housing
and Redevelopment Authority
Fridley, Minnesota
We have audited the accompanying general purpose financial statements of the Fridley
Housing and Redevelopment Authority, a component unit of the City of Fridley, Minnesota,
as of and for the year ended December 31, 1998, as listed in the table of contents. These
general purpose financial statements are the responsibility of the Fridley Housing and
Redevelopment Authority's management. Our responsibility is to express an opinion on
these general purpose financial statements based on our audit.
_ We conducted our audit in accordance with generally accepted auditing standards and the
standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the general purpose financial
statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the general purpose financial statements.
An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall general purpose financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the general purpose financial statements referred to above present fairly, in all
material respects, the financial position of the Fridley Housing and Redevelopment
Authority, as of December 31, 1998, and the results of its operations and the cash flows for
the year then ended in conformity with generally accepted accounting principles.
As discussed in Note 9 to the general purpose financial statements, during 1998 the Fridley
Housing and Redevelopment Authority changed its method of accounting for investments to
conform with Governmental Accounting Standards Board (GASB)No. 31,Accounting and
Financial Reporting for Certain Investments and for External Investment Pools.
The year 2000 supplementary information on pages 19 through 21 is not a required part of the
basic financial statements but is supplementary information required by the Governmental
Accounting Standards Board. We have applied certain limited procedures which consisted
principally of inquiries of management regarding the methods of measurement and
4810 White Bear Parkway, White Bear Lake, Minnesota 55110, USA Telephone: 651 426 7000 Fax: 651 426 5004
HLB Tautges Redpath,Ltd is a member of Hill International. A world-wide organization of accounting firms and business advisers.
3
presentation of the supplementary information. However,we did not audit the information
and do not express an opinion on it. In addition, we do not provide assurance that the Fridley
Housing and Redevelopment Authority is or will become year 2000 compliant, that the
Fridley Housing and Redevelopment Authority's year 2000 remediation efforts will be
successful in whole or in part, or that parties with which the Fridley Housing and
Redevelopment Authority does business are or will become year 2000 compliant.
Our audit was performed for the purpose of forming an opinion on the general purpose
financial statements taken as a whole. The combining and individual fund and account group
financial statements as listed in the table of contents are presented for purposes of additional
analysis and are not a required part of the general purpose financial statements of the Fridley
Housing and Redevelopment Authority. Such information has been subjected to the auditing
procedures applied in the audit of the general purpose financial statements and, in our
opinion, is fairly stated in all material respects in relation to the general purpose financial
statements taken as a whole.
June 11, 1999
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HLB TAUTGES REDPATH, LTD.
Certified Public Accountants
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COMBINED FINANCIAL STATEMENTS
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Statement 1
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY.MINNESOTA
COMBINED BALANCE SHEET-ALL FUND TYPES AND ACCOUNT GROUP
December 31,1998
Account
Governmental Fund Types Group Totals
Special Debt Capital General Long (Memorandum Only)
General Revenue Service Projects Term Debt 1998 1997
Assets
Cash and investments $3,751,272 $1,519,167 $939,775 $3,376,852 $ - $9,587,066 $8,914,456
Receivables:
Accounts - - - - - - 42,627
Interest 56,616 - - - - 56,616 40,562
Taxes:
Unremitted 2,945 - - 201,866 - 204,811 55,066
Delinquent 4,348 - - 62,529 - 66,877 40,165 .•-■
Mortgage:
Deferred 122,112 2,380,986 - 380,858 - 2,883,956 2,941,706
Allow for uncollectible accounts - (99,000) - - - (99,000) (99,000)
Due from other funds 3,379,881 - - - - 3,379,881 -
Interfund loan receivable 3,462,119 - - 9,722,503 - 13,184,622 -
Amount available in debt service fund - - - - 460,000 460,000 880,000
Total assets $10,779,293 $3,801,153 $939,775 $13,744,608 $460,000 $29,724,829 $12,815,582 ,..,,
Liabilities and Fund Balance
Liabilities:
Accounts payable $1,836 $13,585 $ - $22,764 $ - $38,185 $12,367
Due to primary government 1,300 - - - - 1,300 -
Due to other governments - - - 142,264 - 142,264 176,151
Due to other funds - 3,127,681 - 252,200 - 3,379,881 - -.
Interfund loan payable - - 939,775 12,244,847 - 13,184,622 -
Salaries payable - 6,980 - - - 6,980 5,170
Deferred revenue 4,348 - - 62,529 - 66,877 40,165
Deposits payable 2,500 - - 24,250 - 26,750 25,000 -.
Loan payable to City - 1,394,917 - - - 1,394,917 1,465,834
Bonds payable - - - - 460,000 460,000 880,000
Total liabilities 9,984 4,543,163 939,775 12,748,854 460,000 18,701,776 2,604,687
Fund balance(deficit):
Reserved for debt service - - - - - - 939,775
Reserved for mortgage receivable 122,112 2,380,986 - 380,858 2,883,956 2,941,706
Unreserved,undesignated 10,647,197 (3,122,996) - 614,896 - 8,139,097 6,329,414
Total fund balance(deficit) 10,769,309 (742,010) 0 995,754 0 11,023,053 10,210,895
Total liabilities and
Fund balance $10,779,293 $3,801,153 $939,775 $13,744,608 $460,000 $29,724,829 $12,815,582 --,
See Accompany Notes to Financial Statements
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Statement 2
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY,MINNESOTA
COMBINED STATEMENT OF REVENUES,EXPENDITURES,AND FUND BALANCE
_ ALL GOVERNMENTAL FUND TYPES
Year Ended December 31, 1998
a Governmental Fund Types Totals
Special Debt Capital (Memorandum Only)
General Revenue Service Projects 1998 1997
Revenues:
Tax increment $ - $ - $ - $2,834,651 $2,834,651 $3,134,942
Property taxes 173,811 - - - 173,811 163,022
Investment income 320,012 53,331 - 195,630 568,973 614,474
Mortgage interest earnings 6,996 93,318 - 17,284 117,598 -
Rental 9,600 11,600 - - 21,200 12,870
Sale of real estate - - - 75,652 75,652 63,591
Miscellaneous 3,787 65,000 - 1,620 70,407 9,965
Total revenues 514,206 223,249 0 3,124,837 3,862,292 3,998,864
Expenditures:
Personal services 332,991 1,749 - - 334,740 328,794
Supplies and other charges 44,980 170,056 - 282,104 497,140 970,768
Capital outlay 485 1,200 - 1,098,079 1,099,764 142,371
Principal payment - - 420,000 - 420,000 385,000
Interest expense - - 59,775 - 59,775 132,205
"' Agent fees - - 810 - 810 1,013
Total expenditures 378,456 173,005 480,585 1,380,183 2,412,229 1,960,151
_ Excess (deficiency) of revenues over(under)
expenditures 135,750 50,244 (480,585) 1,744,654 1,450,063 2,038,713
Other financing sources(uses):
Operating transfers in 4,630,858 143,333 480,585 16,602,391 21,857,167 6,297,524
Operating transfers out (143,333) (2,967,906) (939,775) (17,806,153) (21,857,167) (6,297,524)
Operating transfer to primary government (95,933) - - (626,927) (722,860) -
Operating transfer from primary government 84,955 - - - 84,955 (759,315)
Total other financing sources(uses) 4,476,547 (2,824,573) (459,190) (1,830,689) (637,905) (759,315)
Excess(deficiency) of revenues and
other financing sources over
` expenditures and other financing
uses 4,612,297 (2,774,329) (939,775) (86,035) 812,158 1,279,398
Fund balance-January 1 -
,,,� 2,032,319 939,775 7,238,801 10,210,895 8,931,497
Residual equity transfers in (out) 6,157,012 - - (6,157,012) - -
Fund balance(deficit) -December 31 $10,769,309 ($742,010) $0 $995,754 $11,023,053 $10,210,895
...
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a See Accompanying Notes to Financial Statements
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FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
-• 1. Summary of Significant Accounting Policies
The Fridley Housing and Redevelopment Authority(HRA), Fridley, Minnesota was established in 1980 by
the City Council of Fridley, Minnesota under the Statutes of the State of Minnesota to complement and
account for any public redevelopment and housing projects undertaken within the City which would fall
under the statutory authority of the HRA.
••• The Housing and Redevelopment Authority is a component unit of the City of Fridley and an integral part
of the City. However, the HRA doesn't have any component units.
The accounting policies of the HRA conform to generally accepted accounting policies. The following is a
summary of the more significant policies:
A. Fund Accounting
The accounts of the HRA 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. 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 governmental funds are grouped, in the financial statements in this report, into three
generic fund types as follows:
General Fund-General Fund is the primary operating fund of the HRA. It is used to account for all
financial resources except those required to be accounted for in another fund.
Special Revenue Fund - Special Revenue Fund is used to account for the acquisition of property and
the administration of relative HRA programs.
Debt Service Fund - Debt Service Fund is 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 of property or
construction of improvements set forth by the HRA.
B. Fixed Assets and Long-Term Liabilities
The accounting and reporting treatment applied to the fixed assets and long-term liabilities associated
with a fund are determined by its measurement focus. All governmental 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 their balance sheets; accordingly, their reported fund balance is
considered a measure of"available spendable resources." Governmental fund operating statements
present increases and decreases in net current assets. Accordingly, they are said to present a
summary of sources and uses of"available spendable resources"during a period. The HRA has no
fixed assets. The cost of office space and office equipment for its two employees is reimbursed to the
-• City. The land acquired by the HRA is only a temporary holding until it can be used for
redevelopment.
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FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY .�
a component unit of the
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
C. Basis of Accounting –.
Basis of accounting refers to when revenues and expenditures 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.
All funds of the HRA are accounted for using the modified accrual basis of accounting. Their
revenues are recognized when they become measurable and available as net current assets.
Expenditures are generally recognized under the modified accrual basis of accounting when the
related fund liability is incurred. Exceptions to this general rule are principal and interest on general
long-term debt which is recognized when due.
D. Total Columns on Combined Statements
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 or results of operations, in conformity with generally accepted accounting principles. Neither —
are such data comparable to a consolidation. Interfund eliminations have not been made in the
aggregation of the data.
E. Assets, Liabilities and Fund Equity
Cash and Cash Equivalents, and Investments "1
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. Investments are
stated at market based on quoted prices. The HRA considers cash equivalents to be those
investments with original maturities of three months or less.
F. Revenues and Expenditures
Tax Increment(Property Taxes) - 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 receivable are fully offset by deferred revenue as they are not available
to finance current expenditures.
Investment Income - Interest is recorded as revenue in the year earned.
Allowance for Uncollectible Accounts -5% of the Housing Loan Program loans is being used. It is
reflected as a contra asset account, i.e., netted out, to Mortgage Receivable-Deferred. -,
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•• FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
2. Deposits and Investments
A. Deposits
In accordance with applicable Minnesota Statutes, the HRA maintains deposits at depository banks
authorized by the Housing and Redevelopment Authority Commission.
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 HRA's name. The market value of the collateral must, at a minimum, be 110% of the
deposits not covered by insurance or bonds (140% in the case of mortgage backed collateral).
Repurchase agreements are intentionally overcollateralized at 105%to insure that the safety of
investment principal is attained and losses do not occur from rapid overnight deterioration.
., Balances at December 31, 1998 are as follows:
Bank Carrying
Balances Amount
1) Insured or collateralized by securities held
by the HRA or its agent in the HRA's name. $152,893 $140,177
••■ 2) Collateralized with securities held by the pledging
institution trust department in the HRA's name - -
3) Uncollateralized or collateralized with
securities not in the HRA's name - -
Totals $152,893 $140,177
Categories 2 and 3 are not procedures that are authorized by Minnesota statutes.
B. Investments
The HRA is authorized by Minnesota Statutes to invest in the following:
(a) Direct obligations or obligations guaranteed by the United States or its agencies.
(b) Shares of investment companies registered under the Federal Investment Company Act of 1940
and whose only investments are in securities described in (a) above.
(c) General obligations of the State of Minnesota or any of its municipalities.
(d) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System.
.. (e) Commercial paper issued by United States Corporations or their Canadian subsidiaries, of the
highest quality, and maturing in 270 days or less.
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FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(f) Repurchase or reserve repurchase agreements with banks that are members of the Federal
Reserve System with capitalization exceeding $10,000,000 a primary reporting dealer in U.S.
government securities to the Federal Reserve Bank of New York, or certain Minnesota securities
broker dealers.
(g) Future contracts sold under authority of Minnesota Statutes 471.56, subd. 5.
The HRA's investments are categorized below to give an indication of the level of risk assumed at
year end. The level of risk is defined by the following criteria set out by the Governmental Accounting
Standards Board within Statement No. 3. Category 1 includes investments that are insured or
registered for which the securities are held by the HRA or its agent in the HRA's name. Category 2
includes uninsured and unregistered investments for which the securities are held by the counterparty
or dealers trust department or agent in the HRA's name. Category 3 includes uninsured and
unregistered investments for which the securities are held by the counterparty or dealer, or its trust
department or agent but not in the HRA's name.
The Category 1 securities consist of the various investment types shown below which are held by a
trustee in the HRA's name.
The carrying value, market value and credit risk of the investments held by the HRA at year end are
as follows:
Credit Risk Category Carrying - Fair
Securities Type 1 2 3 Value Amount
U.S. government securities $1,810,430 $ - $ - $1,810,430
U.S. government agencies
or instrumentalities 3,969,000 - - 3,969,000
Commercial paper 1,974,594 - - 1,974,594 .�
$7,754,024 $0 $0 7,754,024
Investment in money
market fund (at market) 1,692,865
Total investments $9,446,889
Cash and investments per accompanying financial statement:
Cash and deposits $140,177
Investments 9,446,889
Total $9,587,066 ..�
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— FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY, MINNESOTA
_ NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
-� 3. Long-Term Debt
The following is a summary of long-term debt transactions of the HRA for the year ended December 31,
1998:
Bonds payable at January 1, 1998 $880,000
Bonds issued -
- Bonds retired (420,000)
Bonds payable at December 31, 1998 $460,000
—
Bonds payable at December 31, 1998 are comprised of the following individual issues:
$4,070,000 Tax Increment Revenue Refunding Bonds of 1985 due in varying
annual installments of$285,000 - $460,000 through February 1, 1999;
interest at 7.75% -9.00%. $460,000
The Tax Increment Revenue Refunding Bonds are payable solely from increment revenue that is
— generated from the related increment district.
Annual requirements to amortize long-term debt outstanding at December 31, 1998 including principal and
interest payments of$20,700 are as follows:
Year Ended
December 31
1999 $480,700
—, There are a number of limitations and restrictions contained in the various bond indentures. The HRA is
in compliance with all significant limitations and restrictions.
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FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 -
4. Tax Increment Districts
The Fridley Housing and Redevelopment Authority is the administrating authority for the following Tax
Increment Financing Districts:
Fiscal Retained
Year Tax Capacity Values Disparity By
Established District Current Original Captured Adjustments Authority -
1979 1 $665,609 $234,639 $430,970 $ - $430,970
1981 2 624,237 71,896 552,341 - 552,341 ,,,,i
1982 3 1,637,279 244,445 1,392,834 (303,007) 1,089,827
1984 4 Terminated - - - -
1984 5 Terminated - - - -
1985 6 - - - - -
1986 7 65,643 10,960 54,683 - 54,683
1986 8 - - - - -
1989 9 580,425 714,246 - - -
1990 10 Terminated - - - -
1992 11 72,892 44,714 28,178 - 28,178
1992 12 133,728 71,458 62,270 - 62,270 .....
1995 13 27,947 3,693 24,254 - 24,254
1995 14 86,681 7,579 79,102 - 79,102
1997 15 59,823 9,964 49,859 - 49,859
1997 16 - - - - -
1995 HR1/04 8,538 2,422 6,116 - 6,116
1995 HR1/05 18,739 14,937 3,802 - 3,802
1995 HR1/06 - 282 - - - •".%
$3,981,541 $1,431,235 $2,684,409 ($303,007) $2,381,402
5. Risk Management
The HRA is covered under the City's various insurance programs. The HRA reimburses the City for the
costs involved.
The City has a Self Insurance Fund which provides coverage up to a maximum of$50,000 for each
liability and property claim with an annual aggregate of$100,000 for all claims. The City purchases
insurance through the League of Minnesota Cities Insurance Trust for all claims in excess of coverage
provided by the fund and for all other risks of loss.
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FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
6. Contingency Liability
In 1993, the HRA entered into a limited tax increment revenue note with a developer whereby the HRA
shall pay the developer the lesser of the scheduled payment or available tax increment. Whether a
payment will occur and if so, the amount of the payment(s) are uncertain since all payments are
dependent on the HRA receiving tax increments from the developer's project. As such, this liability has
not been recorded in the financial statements.
7. Commitments
The HRA has pledged future tax increment to the City of Fridley for the City's general obligation tax
increment debt. Total general obligation tax increment debt recorded by the City of Fridley at December
31, 1998 is $13,760,000.
8. Reserved Fund Balances
Fund balance reservations at December 31, 1998 were as follows:
General:
Reserved for mortgage receivable $122,112
Special Revenue:
Reserved for mortgage receivable 2,380,986
Capital Projects:
Reserved for mortgage receivable 380,858
Total governmental funds $2,883,956
9. Change in Accounting Principle
The HRA implemented Governmental Accounting Standards Board (GASB) Statement No. 31, Accounting
and Financial Reporting for Certain Investments and External Investment Pools, during 1998. GASB
Statement 31 requires that investments be reported at fair value on the balance sheet with changes in the
fair value of investments reported on the operating statement. The effect of implementing GASB 31
during 1998 was to increase investment income by approximately$90,000. The effect of implementing
GASB 31 was immaterial at December 31, 1997 and accordingly 1997 financial statements have not been
restated.
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REQUIRED SUPPLEMENTARY INFORMATION
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FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
YEAR 2000 ISSUE
December 31, 1998
YEAR 2000 INFORMATION (UNAUDITED)
The HRA is currently addressing year 2000 issues relating to its computer systems and other
electronic equipment. The year 2000 issue refers to the fact that many computer programs use only
the last two digits to refer to a year. Therefore, both 1900 and 2000 would be referred to as"00."
Computer programs have to be adjusted to recognize the difference between those two years or the y.
programs will fail or create errors. Also, some programs may not be able to recognize that 2000 is a
leap year. Further, the year 2000 issue could affect electronic equipment—such as vehicles, pump
stations and phone systems—containing computer chips that have date recognition features.
In 1998, the City created a Project Team to help address the year 2000 issue. The Project Team has •
identified various computer systems and pieces of electronic equipment that are critical to conducting
the entity's operations and that need to be year 2000 compliant. The Project Team is monitoring year
2000 compliance efforts at the various departments on a quarterly basis and is providing assistance
and assigning resources to accelerate compliance for all mission-critical systems and equipment.
The Project Team also is monitoring and assisting the department's efforts to develop contingency
plans should year 2000 failures adversely affect the department's mission-critical operations.
STAGES OF WORK
The HRA has identified two computer systems that are mission critical (that is, critical to conducting
operations). Then we are subjecting those systems and equipment to the following stages of work to
oak
address year 2000 issues:
• Awareness stage—Establishing a budget and project plan for dealing with the year 2000
issue. ark
• Assessment stage— Identifying the systems and components for which year 2000
compliance work is needed.
• Remediation stage—Making changes to systems and equipment.
• Validation/testing stage—Validating and testing the changes that were made during the
remediation stage.
The HRA's year 2000 remediation work for its mission-critical systems and equipment are in the
following stages of work.
Financial Accounting Systems. The HRA has made plans with its current software vendor to upgrade
to their Y2K compliant version of financial accounting software.
Telephone and Voice Mail Systems. The telephone and voice mail systems will be replaced with Y2K
compliant versions during the first half of 1999. �.
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FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY. MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
YEAR 2000 ISSUE
December 31, 1998
— SEC DISCLOSURE
The HRA has identified external parties whose preparedness for year 2000 could affect the HRA's
ability to provide services and meet its obligations, including the timely payment of its indebtedness.
Examples of such external parties are as follows:
External Party Description
- Anoka County The County is responsible for billing and
collecting property taxes and special
assessments. The County reports that it is
currently assessing its billing and collection
systems.
Financial Institutions Our main financial institution has completed the
validation stage and are year 2000 compliant.
They will begin testing with the Federal Reserve
System in early 1999.
Various financial institutions are the paying
agents for the HRA bond issues. They report
that they are currently testing its wire transfer
and paying agent related systems.
Investments of the HRA are held by various
financial institutions. They report that they are
currently remediating all wire transfer and
investment related systems.
As of December 31, 1998, other than internal staff time,the HRA has spent zero dollars associated
with fixing year 2000 issues, and estimates future expenditures of approximately$300,000. The HRA
has not incurred losses because of the year 2000 issue.
The HRA had no liabilities associated with year 2000 issues at December 31, 1998.
■ • UNCERTAINTIES
Because of the unprecedented nature of the year 2000 issue, its effects and the success of related
remediation efforts will not be fully determinable until the year 2000 and thereafter. Management
seem cannot assure that the HRA is or will be year 2000 ready, that the HRA's remediation efforts will be
successful in whole or in part, or that parties with whom the HRA does business will be year 2000
ready.
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COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS
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Statement 3
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY, MINNESOTA
GENERAL FUND
BALANCE SHEET
December 31, 1998
Assets 1998
Cash and investments $3,751,272
Receivables:
Interest 56,616
Taxes:
Unremitted 2,945
Delinquent 4,348 ..
Mortgage receivable:
Deferred 122,112
Due from other funds 3,379,881
Interfund loan receivable 3,462,119
Total assets $10,779,293
.e,
Liabilities and Fund Balance
Liabilities:
Accounts payable $1,836
Due to primary government 1,300
Deferred revenue 4,348
Deposits payable 2,500
Total liabilities 9,984
Fund balance:
Reserved for mortgage receivable 122,112
Unreserved 10,647,197
Total fund balance 10,769,309
Total liabilities and fund balance $10,779,293
24
Statement 4
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY, MINNESOTA
GENERAL FUND
'— STATEMENT OF REVENUES, EXPENDITURES AND FUND BALANCE
December 31, 1998
1998
- Revenues:
Property taxes $173,811
Investment income 320,012
_ Mortgage interest earnings 6,996
Rental 9,600
Miscellaneous 3,787
Total revenues 514,206
Expenditures:
Personal services 332,991
Supplies and other charges 44,980
Capital outlay 485
Total expenditures 378,456
Excess of revenues over expenditures 135,750
Other financing sources (uses):
Operating transfers in 4,630,858
Operating transfers out (143,333)
Operating transfer to primary government (95,933)
Operating transfer from primary government 84,955
Total other financing sources (uses) 4,476,547
- Excess of revenues and other financing sources
sources over expenditures and other financing uses 4,612,297
Fund balance-January 1 -
Residual equity transfer in 6,157,012
- Fund balance- December 31 $10,769,309
25
Statement 5
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY, MINNESOTA
SPECIAL REVENUE FUND
COMPARATIVE BALANCE SHEET
December 31, 1998 and 1997
Totals
Assets 1998 1997
Cash and investments $1,519,167 $66,587
Receivables:
Accounts - 40,077
Mortgage receivable:
Deferred 2,380,986 2,032,319
Allow for uncollectible accounts (99,000) (99,000)
Total assets $3,801,153 $2,039,983
Liabilities and Fund Balance
Liabilities:
Accounts payable $13,585 $1,432 f4
Due to other governments - 1,062
Due to other funds 3,127,681 -
Salaries payable 6,980 5,170
Loan payable to City 1,394,917 -
Total liabilities 4,543,163 7,664
Fund balance:
Reserved for mortgage receivable 2,380,986 2,032,319
Unreserved (3,122,996) - loot
Total fund balance (742,010) 2,032,319
Total liabilities and fund balance $3,801,153 $2,039,983 ,..R
26
Statement 6
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY, MINNESOTA
SPECIAL REVENUE FUND
COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES AND FUND BALANCE
December 31, 1998 and 1997
Totals
1998 1997
— Revenues:
Investment income $53,331 $81,995
Mortgage interest earnings 93,318 -
Rental 11,600 3,270
Sale of real estate - 63,591
Miscellaneous 65,000 8,965
Total revenues 223,249 157,821
- Expenditures:
Personal services 1,749 78,172
Supplies and other charges 170,056 106,839
Capital outlay 1,200 142,371
... Total expenditures 173,005 327,382
- Excess (deficiency) of revenues over (under) expenditures 50,244 (169,561)
Other financing sources (uses):
Operating transfers in 143,333 612,062
Operating transfers out (2,967,906) -
Total other financing sources (uses) (2,824,573) 612,062
Excess (deficiency) of revenues and other financing sources
sources over (under) expenditures and other financing uses (2,774,329) 442,501
Fund balance-January 1 2,032,319 1,589,818
Fund balance- December 31 ($742,010) $2,032,319
27
Statement 7
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
+rr
a component unit of the
CITY OF FRIDLEY, MINNESOTA
DEBT SERVICE FUND
COMPARATIVE BALANCE SHEET
December 31, 1998 and 1997
•j
Totals
Assets 1998 1997
Cash and investments $939,775 $2,405,711
Total assets $939,775 $2,405,711 .■
Liabilities and Fund Balance
Liabilities:
Due to other governments $ - $102
Interfund loan payable 939,775 -
Loan payable to City - 1,465,834
Total liabilities 939,775 1,465,936
Fund balance:
Reserved for debt service - 939,775
Total fund balance 0 939,775 ow
Total liabilities and fund balance $939,775 $2,405,711
28
Statement 8
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY, MINNESOTA
DEBT SERVICE FUND
COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES AND FUND BALANCE
December 31, 1998 and 1997
Totals
1998 1997
Revenues $ - $ -
• Expenditures:
Principal payment 420,000 385,000
Interest expense 59,775 132,205
Agent fees 810 1,013
Total expenditures 480,585 518,218
- Excess (deficiency) of revenues over (under) expenditures (480,585) (518,218)
Other financing sources (uses):
- Operating transfers in 480,585 2,891,222
Operating transfer out (939,775) (2,354,559)
Total other financing sources (uses) (459,190) 536,663
Excess (deficiency) of revenues and other financing sources
sources over (under) expenditures and other financing uses (939,775) 18,445
Fund balance -January 1 939,775 921,330
Fund balance - December 31 $0 $939,775
29
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY, MINNESOTA
CAPITAL PROJECTS FUNDS
COMBINING BALANCE SHEET
December 31, 1998
With Comparative Totals for December 31, 1997 "`
Center Moore ai.
Revolving City Lake Area
Assets
Cash and investments $ - $ - $1,029,462
Receivables:
-
Accounts - '"
-
Interest - -
Taxes:
Unremitted - 42,109 103,078
-
Delinquent - -
Mortgage:
Deferred - - 13,020 _
Interfund loan receivable - - 1,873,593 ►-,
Total assets $0 $42,109 $3,019,153
Liabilities and Fund Balance
Liabilities:
Accounts payable $ - $2,178 $
Due to other governments - 26,406 108,892
Due to other funds - 13,526 -
Interfund loan payable - 4,852,081 -
Deferred revenue - _
-
Deposits payable -
Total liabilities 0 4,894,191 108,892
Fund balance:
Reserved for mortgage receivable 13,020
Unreserved, undesignated - (4,852,082) 2,897,241
Total fund balance 0 (4,852,082) 2,910,261 ,A
Total liabilities and fund balance $0 $42,109 $3,019,153
r
30
Statement 9
,r Page 1 of 2
North Area/
Univ. Ind. Lake Area Northco
Park Pointe Winfield Onan Shorewood Wide Phase III
$2,117,272 $13,915 $75,180 $ - $ - $ - $340
.. 15,899 - 270 - - - -
62,529 - - - - - -
71,910 - - - 27,610 - -
.. 7,848,910 - - - -
$10,116,520 $13,915 $75,450 $0 $27,610 $0 $340
i
$82 $9,947 $350 $3,500 $ - $ - $340
1,730 3,970 - 558 - - -
- - - 6,231 24,430 - -
5,641,930 - 1,353 - - 3,921
62,529 - - - - - -
17,500 - - 4,250 - - -
81,841 5,655,847 350 15,892 24,430 0 4,261
71,910 - - - 27,610 - -
9,962,769 (5,641,932) 75,100 (15,892) (24,430) - (3,921)
- 10,034,679 (5,641,932) 75,100 (15,892) 3,180 0 (3,921)
$10,116,520 $13,915 $75,450 $0 $27,610 $0 $340
31
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY, MINNESOTA
CAPITAL PROJECTS FUNDS 04,
COMBINING BALANCE SHEET
December 31, 1998
With Comparative Totals for December 31, 1997
University/ McGlynn Satellite A
Osborne Bakeries Lane Apts.
Assets
Cash and investments $70,064 $66,174 $523
Receivables:
Accounts - - -
Interest - - -
Taxes:
Unremitted - - 110
Delinquent - - -
Mortgage:
Deferred - -
Interfund loan receivable
Total assets $70,064 $66,174 $633
Liabilities and Fund Balance
Liabilities:
Accounts payable $2,905 $699 $634
Due to other governments 708 - -
Due to other funds - - -
Interfund loan payable 31,881 32,112 431,069
Deferred revenue - - -
Deposits payable - - - "-+
Total liabilities 35,494 32,811 431,703
Fund balance:
Reserved for mortgage receivable - - -
Unreserved, undesignated 34,570 33,363 (431,070)
Total fund balance 34,570 33,363 (431,070)
Total liabilities and fund balance $70,064 $66,174 $633
32
Statement 9
Page 2 of 2
r
Business Community 57th Avenue Gateway Housing Totals
Center Railway Redevelopment East Replace. #1 1998 1997
$ - $ - $2,859 $ - $1,063 $3,376,852 $6,442,158
_- - - - - - - 2,550
- - - - - 40,562
-. 40,400 - - - - 201,866 55,066
- - - - - 62,529 40,165
,. 143,318 125,000 - - - 380,858 909,387
- - - - - 9,722,503 -
.. $183,718 $125,000 $2,859 $0 $1,063 $13,744,608 $7,489,888
$348 $359 $359 $ - $1,063 $22,764 $10,935
- - - - - 142,264 174,987
83,372 124,641 - - - 252,200 -
151,797 134,838 15,935 123,453 824,477 12,244,847 -
- - - - - 62,529 40,165
- - 2,500 - - 24,250 25,000
235,517 259,838 18,794 123,453 825,540 12,748,854 251,087
143,318 125,000 - - - 380,858 909,387
(195,117) (259,838) (15,935) (123,453) (824,477) 614,896 6,329,414
(51,799) (134,838) (15,935) (123,453) (824,477) 995,754 7,238,801
$183,718 $125,000 $2,859 $0 $1,063 $13,744,608 $7,489,888
33
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY, MINNESOTA
CAPITAL PROJECTS FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND FUND BALANCE
Year Ended December 31, 1998
With Comparative Totals for Year Ended December 31, 1997
Center Moore
Revolving City Lake Area
Revenues: "
Tax increment $ - $629,956 $655,608
Property taxes - - -
Investment income - 123,850 39,671
Mortgage interest earnings - - 345
Rental - - -
Sale of real estate - - -
Miscellaneous - - 620
Total revenues 0 753,806 696,244
Expenditures:
Personal services - - -
Supplies and other charges - 75,185 100,709
Capital outlay - 440,408 4,050
Total expenditures 0 515,593 104,759
Excess (deficiency) of
revenues over (under) expenditures 0 238,213 591,485
Other financing sources (uses): -
Operating transfers in - 948,617 3,459,375
Operating transfers out - (5,771,542) (1,162,683)
Operating transfer to primary government - (267,370) -
Total other financing
sources (uses) 0 (5,090,295) 2,296,692
Excess (deficiency) of revenues
and other financing sources
over expenditures and other
financing uses 0 (4,852,082) 2,888,177
Fund balance-January 1 5,176,817 - 22,084
Residual equity transfer (out) (5,176,817) - -
Fund balance (deficit) - December 31 $0 ($4,852,082) $2,910,261
34
Statement 10
Page 1 of 2
North Area/
Univ. Ind. Lake Area Northco University/
Park Pointe Winfield Onan Shorewood Wide Phase III Osborne
$1,268,621 $ - $72,988 $ - $ - $ - $ - $31,270
- - - 2,462 - - - 125 1,250
6,324 - - - 3,180 - - -
1,274,945 0 75,450 0 3,180 0 125 32,520
.. 49,797 34,850 350 4,773 - - 340 3,805
1,313 94,933 - 9,766 - - - 26,026
51,110 129,783 350 14,539 0 0 340 29,831
1,223,835 (129,783) 75,100 (14,539) 3,180 0
(215) 2,689
11,203,345 - 857,560 66,147 50,160 - - 17,187
(2,951,850) (5,356,245) (857,560) (67,500) (85,497) -
(3,706) (12,430)
- (359,557) - - - - - -
8,251,495 (5,715,802) 0 (1,353) (35,337) 0 (3,706) 4,757
9,475,330 (5,845,585) 75,100 (15,892) (32,157) 0 (3,921) 7,446
.. 559,349 203,653 - - 35,337 980,195 - 27,124
- - - - (980,195) - -
$10,034,679 ($5,641,932) $75,100 ($15,892) $3,180 $0
($3,921) $34,570
35
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY, MINNESOTA
CAPITAL PROJECTS FUNDS
•
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND FUND BALANCE
Year Ended December 31, 1998
With Comparative Totals for Year Ended December 31, 1997 "�
McGlynn Satellite Business
Bakeries Lane Apts. Center
Revenues: —
Tax increment $75,098 $1,622 $90,671
Property taxes - - -
Investment income 1,116 51 2,241
Mortgage interest earnings - - 7,435
Rental - - -
Sale of real estate - - -
Miscellaneous - - -
Total revenues 76,214 1,673 100,347
A. 1
Expenditures:
Personal services - -
Supplies and other charges 699 634 349
- ...
Capital outlay 74,264 -
Total expenditures 74,963 634 349
Excess (deficiency) of
revenues over (under) expenditures 1,251 1,039 99,998
Other financing sources (uses):
-
Operating transfers in - -
Operating transfers out (50,148) (432,109) (303,779)
Operating transfer to primary government - - - —
Total other financing
sources (uses) (50,148) (432,109) (303,779)
Excess (deficiency) of revenues
and other financing sources
over expenditures and other -,
financing uses (48,897) (431,070) (203,781)
Fund balance-January 1 82,260 - 151,982 „4.
Residual equity transfer (out) - -
..
Fund balance (deficit) - December 31 $33,363 ($431,070) ($51,799)
36
Statement 10
Page 2 of 2
..
` Community 57th Avenue Gateway Housing Totals
Railway Redevelopment East Replace. #1 1998 1997
$2,936 $ - $ - $5,881 $2,834,651 $3,134,942
- - - 163,022
J - 619 - 24,245 195,630 532,479
- - - - 17,284 -
- - - - - 9,600
— - - - 75,652 75,652 -
- - 1,000 - 1,620 1,000
2,936 619 1,000 105,778 3,124,837 3,841,043
- - - - - 250,622
_ 447 504 3,235 6,427 282,104 863,929
126,718 - 121,218 199,383 1,098,079 -
127,165 504 124,453 205,810 1,380,183 1,114,551
(124,229) 115 (123,453) (100,032) 1,744,654 2,726,492
- - 16,602,391 2,794,240
(10,609) (16,050) - (724,445) (17,806,153) (3,942,965)
—
- - (626,927) (759,315)
(10,609) (16,050) 0 (724,445) (1,830,689) (1,908,040)
(134,838) (15,935) (123,453) (824,477) (86,035) 818,452
— - - - - 7,238,801 6,420,349
-
(6,157,012) -
- ($134,838) ($15,935) ($123,453) ($824,477) $995,754 $7,238,801
37
Statement 11
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
a component unit of the
CITY OF FRIDLEY, MINNESOTA
COMPARATIVE STATEMENT OF GENERAL LONG-TERM DEBT
December 31, 1998 and 1997
1998 1997
Amount available and to be provided for the payment of
general long-term debt:
Amount available in Debt Service Fund $460,000 $880,000
Total available and to be provided $460,000 $880,000
General long-term debt payable:
Tax increment revenue refunding bonds of 1985 $460,000 $880,000
Total general long-term debt payable $460,000 $880,000
38