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2013 CAFR CITY OF FRIDLEY, MINNESOTA Comprehensive Annual Financial Report For the Year Ended December 31, 2013 Prepared by: Finance Department Darin R. Nelson Finance Director CITY OF FRIDLEY CITY OF FRIDLEY, MINNESOT A COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2013 TABLE OF CONTENTS EXHIBIPAG TE I. INTRODUCTORY SECTION Letter of Transmittal3 Certificate of Achievement 9 Elected and Appointed Officials10 City Administrative Organizational Structure 201312 II. FINANCIAL SECTION Independent Auditor's Report17 Management's Discussion and Analysis21 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net PositionA-135 Statement of ActivitiesA-236 Fund Financial Statements: Balance Sheet - Governmental FundsA-338 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental FundsA-440 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of ActivitieA-543 Statement of Net Position - Proprietary FundsA-644 Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary FundsA-746 Statement of Cash Flows - Proprietary FundsA-848 Statement of Fiduciary Net PositionA-950 Notes to Financial Statements51 Required Supplementary Information: Budgetary Comparison Schedule - General FundB-188 Budgetary Comparison Schedule - Note to RSI93 Schedule of Funding Progress - Retiree Health Plan94 Combined, Combining and Individual Fund Statements and Schedules: Combined Balance Sheet - Nonmajor Governmental FundsC-198 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental FundsC-299 CITY OF FRIDLEY, MINNESOT A COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2013 TABLE OF CONTENTS EXHIBIPAG TE Combining Balance Sheet - Nonmajor Special Revenue FundC-3102 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue FundsC-4104 Special Revenue Funds: Cable TV Fund: Comparative Balance SheetD-1106 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-2107 Grant Management Fund: Comparative Balance SheetD-3108 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-4109 Solid Waste Abatement Fund: Comparative Balance SheetD-5110 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-6111 Drug and Gambling Forfeiture Fund: Comparative Balance SheetD-7112 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-8113 Police Activity Fund: Comparative Balance SheetD-9114 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-10115 Springbrook Nature Center Fund: Comparative Balance SheetD-11116 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualD-12117 Capital Project Funds: Capital Equipment Fund: Comparative Balance SheetE-1120 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActuaE-2121 Capital Improvement Fund: Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and ActualE-3122 CITY OF FRIDLEY, MINNESOT A COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2013 TABLE OF CONTENTS EXHIBIPAG TE Internal Service Funds Combining Statement of Net PositionF-1124 Combining Statement of Revenues, Expenses and Changes in Net PositionF-2125 Combining Statement of Cash FlowsF-3126 Employee Benefits Fund: Comparative Statement of Net PositionF-4127 Comparative Statement of Revenues, Expenses and Changes in Net PositioF-5128 Comparative Statement of Cash FlowsF-6129 Self Insurance Fund: Comparative Statement of Net PositionF-7130 Comparative Statement of Revenues, Expenses and Changes in Net PositioF-8131 Comparative Statement of Cash FlowsF-9132 Information Systems Fund: Comparative Statement of Net PositionF-10133 Comparative Statement of Revenues, Expenses and Changes in Net PositioF-11134 Comparative Statement of Cash FlowsF-12135 Housing and Redevelopment Authority (Component Unit): Balance Sheet - Governmental FundsG-1138 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental FundsG-2140 Subcombining Balance Sheet - Nonmajor Capital Project FundsG-3142 Subcombining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Capital Project FundsG-4144 Agency Funds: Combining Statement of Assets and LiablilitesH-1148 Statement of Changes in Assets and LiabilitiesH-2149 CITY OF FRIDLEY, MINNESOT A COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2013 TABLE OF CONTENTS EXHIBIPAG TE III. STATISTICAL SECTION (Unaudited ) Financial Trends: Net Position by ComponentTable 1152 Changes in Net PositionTable 2154 Fund Balances - Governmental FundsTable 3158 Changes in Fund Balances - Governmental FundsTable 4160 Revenue Capacity: Tax Capacity Value and Estimated Market Value of Taxable PropertyTable 5162 Direct and Overlapping Property Tax Capacity RatesTable 6164 Principal Property TaxpayersTable 7167 Debt Capacity: Property Tax Levies and CollectionsTable 8168 Ratios of Outstanding Debt by TypeTable 9169 Direct and Overlapping Govermental Activities DebtTable 10170 Demographic and Economic: Legal Debt Margin InformationTable 11171 Pledged Revenue CoverageTable 12172 Operating Information: Demographic and Economic StatisticsTable 13174 Principal EmployersTable 14175 Full-Time Equivalent City Government Employees by Function/ProgramTable 15176 Operating Indicators by Function/ProgramTable 16178 Capital Asset Statistics by Funciton/ProgramTable 17180 I. INTRODUCTORY SECTION CITY OF FRIDLEY City of Fridley, 6431 University Avenue NE, Fridley, MN 55432 Finance Department • 763-571-3450 • Fax 763-571-1287 • www.FridleyMN.gov May 16, 2014 To the Citizens of the City of Fridley, Mayor, Council Members, and City Manager The Comprehensive Annual Financial Report of the City of Fridley, Minnesota, for the fiscal year ended December 31, 2013, is submitted herewith: Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. We believe that the data, as presented, is accurate in all material aspects, that it is presented in a manner designed to fairly set forth the financial position and results of operations of the City as measured by the financial activity of its various funds, and that all disclosures necessary to enable the reader to gain the maximum understanding of the City’s financial activity have been included. Generally accepted accounting principals require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of Fridley’s MD&A can be found immediately following the report of the independent auditors. All City funds, departments, commissions and other organizations for which the City of Fridley is financially accountable are presented within the Comprehensive Annual Financial Report. The City provides a full range of services to its citizens. These services include, but are not limited to, police and fire protection; water and sanitary sewer utilities; the construction and maintenance of streets and infrastructure; recreational facilities; and general administrative services. The Housing and Redevelopment Authority (HRA) is included in the reporting entity as a component unit of the City, because the governing board is appointed by the City Council, and because of the City’s relationship of financial benefit or burden with the authority. The organization, form and contents of this report were prepared in accordance with the standards prescribed by the Governmental Accounting Standards Board (GASB), the Government Finance Officers Association of the United States and Canada (GFOA), the American Institute of Certified Public Accountants, the Minnesota Office of the State Auditor, and the City Charter. CITY OF FRIDLEY, MINNESOTA ECONOMIC CONDITION AND OUTLOOK BACKGROUND AND LOCATION The City of Fridley is a first ring suburban community with an estimated 2013 population of 27,785. The City is located 10 minutes north of downtown Minneapolis and 25 minutes northwest of downtown St. Paul. Incorporated in July of 1949, Fridley covers 10 square miles of area and is now home to some of the most important industries in the Midwest, nation, and the world. An industrial spine around the rail corridor has served the City well and has provided the city with nearly as many jobs as the number of citizens who reside in the community. Fridley is home to the largest number of employees in Anoka County. LOCAL ECONOMY The local economy is showing signs of steady improvement over the past year. New construction and renovation continues to gain traction as activity has steadily increased over the past few years, unemployment numbers have improved, and property values appear to have bottomed out and have rebounded with double digit increases over the past year. The value of new construction remained relatively stable compared to the prior year. The construction value for 2013 amounted to approximately $40.7 million. This is about $5.0 million more than 2012. The major projects for 2013 included; a transitional care unit at Unity hospital valued at $8.6 million, Cummins loading dock addition valued at $2.7 million, Unity professional building remodel valued at $2.0 million, Vision Woodworking addition valued at $925,000, a new McDonalds valued at $650,000, and two elementary school additions valued at $1.0 million each. Continued long-term growth is anticipated as Fridley continues to aggressively pursue redevelopment opportunities. Unfortunately, the estimated market value for all properties in Fridley decreased 9.7% over the past year. This decline in valuation is consistent with other municipalities in the Minneapolis-St. Paul metropolitan area. MAJOR INITIATIVES For the Year 2013 continued with its fast pace of city initiated projects along with the partnering with developers to bring substantial redevelopment projects to fruition. Current projects include: CITY OF FRIDLEY, MINNESOTA ECONOMIC CONDITION AND OUTLOOK (CONTINUED) 1.The Street Program continued the on-going efforts of resurfacing city streets. The 2013 Street Program included streets within the Meadowmore Terrace and Flanery Park neighborhoods. The final cost of this project was approximately $975,000. 2.The City entered its third year of a ten to twelve year campaign to replace the City’s approximately 7,500 manual read water meters with automatic meter reading water meters. Public Works staff is undertaking the change-out in house, which saves contractual costs and allows the city to more easily budget for new meters on an annual basis rather than a large one-time purchase. Annual expenditure for the purchase of new water meters is estimated to cost $125,000 per year with an average of 600 meters changed out per year. 3.The HRA continues to be very active with redevelopment activity. Two major TIF districts are set to break ground in 2014 after years of negotiation and planning. The first district involves the redevelopment of an old Navy munitions site that requires hazardous remediation along with the demolition of 2 million square feet of obsolete manufacturing space and replacing it with 1.6 million square feet of commercial office and warehouse space. The second district involves a property referred to as Gateway Northeast, which is a main corridor along University Avenue that bisects the city. The HRA has been buying dilapidated properties along this corridor for several years and now has a blank slate to begin redevelopment. This 6 acre site is scheduled for senior and market rate rental housing with a total of 259 units divided into three phases. For the Future The future for the City of Fridley will continue to be filled with change. Legislative changes and an improving state and local economy have provided for a brighter financial outlook from the City’s standpoint. The 2013 State Legislative session appears to have provided some stability for the State’s funding of Local Government Aid (LGA) with both the simplification of the funding formula and the outward appearance that LGA funding will be sustained for the immediate future. In addition, the Legislature eliminated a majority of the state sales tax cities and counties had to pay on the purchase of goods and certain services. This relief is estimated to save the General fund approximately $75,000 per year. As always, city leadership is doing its due diligence to protect itself from last minute legislative changes by preparing and sustaining viable budgets that help guard against unforeseen circumstances. CITY OF FRIDLEY, MINNESOTA ECONOMIC CONDITION AND OUTLOOK (CONTINUED) The City also undertook an in-depth review of its Water, Sewer and Storm Water utility rates back in 2012. As part of this process, the City projects fund balances and capital improvements needs for each of the utility systems for the next twenty years, and from that data projects estimated user rates for each fund for that same time period. One goal of the review was to determine necessary rate adjustments needed to reduce the City’s dependence on debt financing for yearly capital outlay. Annual updates are done on this analysis to better reflect current year assumptions. Maintaining current service levels is a high priority for the City. Through the past several years operating budgets have been reduced in order to balance budgets. These reductions have forced City leadership to become more innovative and subsequently more efficient to maintain service levels. The City will continue to investigate alternatives that will allow creative solutions to the delivery of services. FINANCIAL INFORMATION INTERNAL CONTROLS In developing and improving the City’s accounting system, consideration is given to the adequacy of internal accounting controls.Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and the evaluation of costs and benefits requires estimates and judgments by management. All internal control evaluations occur within the above framework. We believe that the City’s internal accounting controls adequately safeguard assets and provide reasonable assurance of the proper recording of financial transactions. BUDGETARY CONTROLS A complete budgetary system of accounts is maintained for the General and Special Revenue Funds. Budgetary control is maintained in compliance with the City Charter requirements. The Charter provides that it is the duty of the City Manager to strictly enforce the provisions of the budget. The management policy of the City is such that the existence of a particular item or appropriation in the approved budget does not mean that it will or must be automatically expended. It is the policy of the City to control budgets at the expenditure category level. CITY OF FRIDLEY, MINNESOTA FINANCIAL INFORMATION (CONTINUED) 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. FUND BALANCE POLICY The purpose of the fund balance policy is to establish appropriate fund balance levels for each fund that is primarily supported by property tax revenues or user fees. These policies will ensure that adequate resources are available to meet cash flow needs for carrying out the regular operations of the City. The funds addressed in this policy include the General Fund, Solid Waste Abatement Fund, Springbrook Nature Center Fund and Enterprise Funds. In 2013, all the funds addressed by this policy, with the exception of the Sewer Enterprise Fund, met the fund balance guidelines. The Sewer Enterprise Fund, along with the other utility enterprise funds, have all implemented a multi-year plan to ensure long-term sustainability. The Sewer Enterprise Fund is expected to meet minimum fund balance requirements within the next couple years. INVESTMENT POLICY The purpose of the investment policy is to develop an overall program for cash investments, designed and managed with a high degree of professionalism, worthy of the public trust; to establish that elected and appointed officials and employees are custodians of a portfolio which shall be subject to public review; to establish cash investment objectives, delegation of authority, standards of prudence, internal controls, authorized investments, selection process for investments, and broker representations. The investment policy outlines the investing philosophy and practices of the City of Fridley and the Fridley Housing and Redevelopment Authority, and has been developed to serve as a reference point for the management of City assets. It is the policy of the City to invest public funds in a manner which will provide for safety, liquidity, and yield in that order of importance. Investments will conform to all federal, state and local regulations governing the investment of public funds. CITY OF FRIDLEY, MINNESOTA OTHER INFORMATION 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 Office of the State of Minnesota. The accounting firm of HLB Tautges Redpath, Ltd. was engaged by the City to render an opinion on the City’s financial statements. The auditor’s report on the basic financial statements and combining and individual fund statements and schedules is included in the Financial Section of this report. AWARDS 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 for its comprehensive annual financial report for the fiscal year ended December, 31, 2012. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report 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 that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements and are submitting it to the GFOA to determine its eligibility for another certificate. ACKNOWLEDGMENTS The preparation of this report on a timely basis could not have been accomplished without the efficient and dedicated services of all members of the Finance Department, with special recognition to Carol Meyer, Rebecca Kiernan, Greg Tirevold, Jean Michaels, and to our auditors HLB Tautges Redpath, Ltd. for their professional guidance. We would also like to express our appreciation to the Mayor and members of the City Council for their interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner. Respectfully submitted, Darin Nelson Shelly Peterson Finance Director Assistant Finance Director CITY OF FRIDLEY, MINNESOTA ELECTED AND APPOINTED OFFICIALS DECEMBER 31, 2013 ELECTED OFFICIALS Term of Office Expires December MayorScott J. Lund2016 Councilmember At LargeRobert L. Barnette2016 Councilmember, Ward IJames T. Saefke2014 Councilmember, Ward IIDolores M. Varichak2014 Councilmember, Ward IIIAnn R. Bolkcom 2014 APPOINTED OFFICIALS City ManagerWilliam W. Burns City AttorneyDarcy M. Erickson Prosecuting AttorneyCarl J. Newquist City ClerkDebra A. Skogen Department Heads: Finance Director/TreasurerDarin R. Nelson Director of Public Safety and Civil DefenseDonovan W. Abbott Fire ChiefJohn D. Berg Director of Public WorksJames P. Kosluchar Director of Parks and RecreationJack G. Kirk Director of Community DevelopmentScott J. Hickok Director of Human ResourcesDeborah K. Dahl CITY OF FRIDLEY CITY ADMINISTRATIVE ORGANIZATIONAL STRUCTURE 2013 City of Fridley General Fund Authorized Full-Time Positions - 103(A) (Minimum Of 32 Hours A Week) Total Authorized Full-Time Positions - 127(A) (Minimum Of 32 Hours A Week) rev. 10/26/11 CITY MANAGEMENT (2) City Manager Admin Assistant to the City Manager Non-General Fund CABLE TV FUND Cable Administrator FINANCE (20)POLICE (44)FIRE (8) Finance Director - TreasurerPublic Safety DirectorFire Chief AccountantAdministrative AssistantAdministrative Assistant Assistant Chief ACCOUNTING (4)FIELD OPERATIONS (28) (3) Captains Assistant Finance DirectorCaptain Payroll Coordinator(5) Sergeants Accounting Specialist(22) Patrol Officers RENTAL INSPECTIONS (2) Acctg-Data Processing Clerk Rental Inspection Asst. ASSESSING (2)TECHNICAL SUPPORT (14) Full-time Firefighter City AssessorCaptain AppraiserLieutenant HUMAN RESOURCES (2) (3) Detectives MIS (2) Pawn Detective IT ManagerHuman Resources Director (2) School Resource Officer PC TechnicianAnoka-Henn DTF SergeantAdministrative Assistant Special Projects Coordinator CITY CLERK - RECORDS (2) Crime Prevention Specialist City Clerk Office Supervisor Licensing & Records Technician(2) Police Technicians (Also 3 at 32 hrs/week) Non-General Fund LIQUOR (5) Liquor Operations Manager (4) Lead Liquor Store Clerks WATER ADMIN (2) Utility Billing Clerk Acctg-Data Processing Clerk HRA/WATER ADMIN (1) Acctg/Admin Specialist (A) An "Authorized Position" is defined as one that works at least 32 hours a week and receives a full-time benefit package. PUBLIC WORKS (35)PARKS &COMMUNITY RECREATION (8)DEVELOPMENT (9) Public Works Director Parks & Recreation DirectorCommunity Development Admin Assist/Main't Coord Director Recreation Office Coordinator (2) Program SupervisorsOffice Coordinator ENGINEERING (3) Sr Citizens Program Supervisor Assistant Public Works DirectorBUILDING INSPECTION (3) Chief Building Official (2) Engineering Technician Building Inspector PW MAINTENANCE (19) Permit Technician Fleet Services SupervisorPLANNING Planning Manager (2) Mechanic Street Supervisor (8) Public Service Worker Parks Supervisor (6) Public Service Worker Non-General FundNon-General FundNon-General Fund WATER (5)SPRINGBROOK NATURESOLID WASTE Water SupervisorCENTER (3) Environmental Planner Nature Center Director (4) Public Service Worker SECTION 8 HOUSING Program Supervisor Coordinator SEWER (5) Program Admin Assist (32 hrs/week) Sewer Supervisor HRA (4) Public Service Worker Assistant Executive Director CITY OF FRIDLEY II. FINANCIAL SECTION CITY OF FRIDLEY INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of the City Council City of Fridley, Minnesota Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Fridley, Minnesota, as of and for the year ended December 31, 2013, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America 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 financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 4810 White Bear Parkway White Bear Lake, MN 55110 651.426.7000 651.426.5004 fax www.hlbtr.com Equal Opportunity Employer 100-Percent Employee-Owned HLB Tautges Redpath is a member of HLB International, a world-wide network of independent accounting firms and business advisors. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Fridley, Minnesota, as of December 31, 2013, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter – Implementation of GASB 65 As described in Note 18 to the financial statements, in 2013, the City adopted new accounting guidance, GASB Statement No. 65, Items Previously Reported as Assets and Liabilities. Our opinion is not modified with respect to this matter. Report on Summarized Comparative Information We have previously audited the City of Fridley, Minnesota’s 2012 financial statements, and we expressed an unmodified audit opinion on the respective financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information in our report dated June 14, 2013. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2012 is consistent, in all material respects, with the audited financial statements from which they were derived. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information and the schedule of funding progress listed in the table of contents on pages 21-31 and 88-91 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Fridley, Minnesota’s basic financial statements. The introductory section, combining and individual fund financial statements, supplementary financial information, statistical section, and other information section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and the supplementary financial information are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial statements and the supplementary financial information are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory, statistical, and other information sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 16, 2014, on our consideration of the City of Fridley, Minnesota’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Fridley, Minnesota’s internal control over financial reporting and compliance. HLB TAUTGES REDPATH, LTD. May 16, 2014 CITY OF FRIDLEY MANAGEMENT’S DISCUSSION AND ANALYSIS As management of the City of Fridley, we offer readers of the City of Fridley’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2013. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 3 through 8 of this report. Financial Highlights The assets of the City of Fridley exceeded its liabilities at the close of the most recent fiscal year by $62,771,633 (net position). Of this amount, $32,968,815 (unrestricted net position) may be used to meet the government’s ongoing obligations to citizens and creditors in accordance with the City's fund designations and fiscal policies. During 2013, the City’s total net position decreased by $698,700. As of the close of the current fiscal year, the City of Fridley’s governmental funds reported combined ending fund balances of $23,966,291. Of this total amount, $2,273,676, or 10% is restricted through legal restrictions or third-party agreements. At the end of the current fiscal year the general fund balance of $8,087,414 included $50,366 in nonspendable and $7,997,036 in unassigned fund balance. The City’s total debt decreased by $1,639,397 during the current fiscal year, it went from $15,695,541 to $14,056,114. Overview of the Financial Statements The discussion and analysis are intended to serve as an introduction to the City of Fridley’s basic financial statements. The City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements . The government-wide financial statements are designed to provide readers with a broad overview of the City of Fridley’s finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the City of Fridley’s assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Fridley is improving or deteriorating. Managements Discussion and Analysis ’ The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City of Fridley that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City of Fridley include general government, public safety, public works, community development, and recreation and naturalist. The business-type activities of the City of Fridley include liquor, water, sewer and storm water. The government-wide financial statements can be found on pages 35 through 37 of this report. Fund financial statements . A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Fridley, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of Fridley can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds . Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financial requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statement. By doing so, readers may better understand the long-term impact of the City's near term financial decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures, and change in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. Managements Discussion and Analysis ’ The City of Fridley maintains four individual major governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, debt service fund, special assessment construction capital projects fund and capital improvements fund all of which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The City of Fridley adopts an annual appropriated budget for its general fund, special revenue funds and capital improvements capital projects fund. A budgetary comparison statement has been provided for those funds to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 38 through 43 of this report. Proprietary funds . The City of Fridley maintains four enterprise funds and three internal service funds as a part of its proprietary fund type. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City of Fridley uses enterprise funds to account for its liquor, water, sewer, and storm water operations. The City of Fridley uses internal service funds to account for its employee benefits, self insurance and information systems. Because these services predominately benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water, sewer, storm water and liquor operations, all of which are considered to be major funds of the City of Fridley. Conversely, the internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements can be found on pages 44 through 49 of this report. Fiduciary funds . Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City of Fridley’s own program. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statement can be found on page 50 of this report. Managements Discussion and Analysis ’ Notes to the financial statements . The notes provide additional information that is essential to a full understanding of the data provided in the government–wide and fund financial statements. The notes to the financial statements can be found on pages 51 through 86 of this report. Other information. The combining statements referred to earlier in connection with the non-major governmental funds are presented immediately following the required supplementary information on budgetary comparisons. Combining and individual fund statements and schedules can be found on pages 98 through 149 of this report. Government-wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City of Fridley, assets exceeded liabilities by $62,771,633 at the close of the most recent fiscal year. The largest portion of the City of Fridley's net position ($26,752,614 or 43 percent) reflects its investment in capital assets (e.g. land, buildings, machinery and equipment) less any related debt used to acquire those assets that is still outstanding. The City of Fridley uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Fridley's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. CITY OF FRIDLEY'S NET POSITION Governmental ActivitiesBusiness-TypeTotals 201220132012201320122013 Current and other assets$31,197,767$30,220,437$10,085,398$9,936,439$41,283,165$40,156,876 Capital assets20,938,80220,522,49719,474,12218,573,24040,412,92439,095,737 Total assets$52,136,569$50,742,934$29,559,520$28,509,679$81,696,089$79,252,613 Long-term liabilities outstanding$7,410,130$6,264,552$6,477,952$5,910,986$13,888,082$12,175,538 Other liabilities3,053,0333,033,9511,284,6401,271,4914,337,6734,305,442 Total liabilities$10,463,163$9,298,503$7,762,592$7,182,477$18,225,755$16,480,980 Net position: Invested in capital assets, net of related debt$14,139,656$13,842,497$13,560,980$12,910,117$27,700,636$26,752,614 Restricted3,294,9523,050,201 - - 3,294,9523,050,201 Unrestricted24,238,79824,551,7308,235,9488,417,08532,474,74632,968,815 Total net position$41,673,406$41,444,428$21,796,928$21,327,202$63,470,334$62,771,630 Managements Discussion and Analysis ’ A portion of the of the City of Fridley's net position represents resources that are subject to external restrictions on how they may be used.The remaining balance of $32,968,815 in unrestricted net position may be used to meet the City's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City of Fridley is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. Governmental Activities Governmental activities decreased the City of Fridley's net position by $228,974. Capital grants and contributions increased by $183,157 due to the increase in street construction activity. There was an increase in charges for services of $102,686 due to street reconstruction fees and building permits. Conversely, public works expenditures increased by $508,060 due to an increase in street construction activity.Investment earnings for 2013 were a negative $216,821. This negative amount is due to year-end market value adjustments. City of Fridley's Changes in Net Position Managements Discussion and Analysis ’ Below are specific graphs which provide comparisons of the governmental activities revenues and expenses: Managements Discussion and Analysis ’ Business-Type Activities Business-type activities decreased net position by $469,726. Charges for utility services were in-line with expenses for the utilities. There were decreases in both revenues and expenditures for the liquor fund due to a major remodeling project affecting sales the latter part of the year: Managements Discussion and Analysis ’ Financial Analysis of the Government's Funds Governmental funds . The focus of the City of Fridley’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Fridley’s financing requirements. In particular, unrestricted fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. At the end of the current fiscal year, the City of Fridley's governmental funds reported combined ending fund balances of $23,966,291. The General Fund’s fund balance increased by $418,092 in 2013. This was much better than the $51,176 increase originally budgeted for. The key reason for this increase was due to a significant reduction in budgeted expenditures for both public works and public safety. 2012 proved to be a very mild year with very few snow plowing events. This saved both personnel costs for overtime and supply costs for fuel and road salt. Public Safety expenditures saw savings from personnel vacancies throughout the year. The Capital Improvements Fund’s assigned fund balance increased by $163,087. This was due to receiving more Local Government Aid (LGA) than what was originally anticipated. Prior to 2012, LGA was budgeted in the General Fund. However, LGA has been susceptible to state legislation that resulted in this becoming an unreliable source of revenue. Rather than utilizing this revenue for operations within the General Fund, which requires continual funding, the decision was made to allocate LGA to the Capital Improvements Fund. Now if the City experiences fluctuations in LGA funding, which we did in 2013, we are more easily able to adjust the budget for one-time purchases rather than continuous operational funding. The Capital Equipment Fund was added as a governmental fund in 2012. In 2013, this fund ended the year with a committed fund balance of $102,365. This capital projects fund was added to better account for capital equipment purchases along with the proceeds from capital equipment certificates. In the past, capital equipment was purchased out of the General Fund and would tend to cause large peaks and valleys in regards to total expenditures. With the capital equipment purchases reported in a separate fund, the General Fund expenditures are more constant from year to year. Proprietary funds . The City of Fridley’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The unrestricted net position in the respective proprietary funds are liquor $409,246, water $3,970,514 sewer $2,571,975 and storm water $1,465,350. The storm water fund had an increase in net position of $12,374. The liquor, water and sewer funds had decreases of $12,085, $57,478 and $412,537 respectively. The sewer variance is primarily due to conservation efforts by a large industrial customer. Managements Discussion and Analysis ’ Budgetary Highlights General Fund The original revenue and expenditure budgets were amended to account for $178,937 in additional grants and donations received during the year. Operating expenditures in total were less than the final budgetary estimates by $507,799. Significant variances include unspent emergency funds of $120,000 and Public Works, Parks and Police departments expended $262,306 less than anticipated primarily due to vacancies and retirements. Investment earnings for all funds fell below anticipated budget amounts. In fact, due to year- end market value adjustments, net investment earnings were negative for all funds. At the end of each year, the City is required by GASB Statement 31 to adjust investments from book value to market value, even if the investments are intended to be held to maturity, which the City’s investment policy strongly suggests. After years of declining interest rates, this fall, the investment market started to see increasing rates. Since the City has previously purchased investments on its books with interest rates below the current market rate, the market value of these investments declined to a value below the current book value. The recorded year-end investment loss is only a book loss since the City tends to hold investments to maturity. If the investment is held to maturity, interest earning payments continue to be disbursed to the City and as investments mature, the City will continue to receive its full principal investment return. In essence, the book loss will be recovered as investments mature. Since the financial statements are just a snapshot in time, specifically December 31, 2013, the fair market value investment loss of approximately $525,000 decreased to $218,000 by January 31. This demonstrates the volatility of the investment market and all the more reason why the City tends to hold investments to maturity and invest in secure investments. Capital Asset and Debt Administration Capital assets . The City of Fridley’s, investment in capital assets for its governmental and business type activities as of December 31, 2013, amounts to $39,095,737 (net of accumulated depreciation). This investment in capital assets includes land, buildings and structures, improvements other than buildings, machinery and equipment, infrastructure and construction in progress. Managements Discussion and Analysis ’ City of Fridley’s Capital Assets (Net of Depreciation ) Governmental ActivitiesBusiness-Type ActivitiesTotals 201220132012201320122013 Land$2,841,516$2,841,516$306,477$306,477$3,147,993$3,147,993 Buildings and structures1,463,784 1,471,8051,387,6632,935,5892,623,022 1,235,359 Improvements other than buildings1,785,957 6,786,8226,476,7168,572,7798,241,852 1,765,136 Machinery and equipment2,075,412 440,226402,6632,515,6383,174,862 2,772,199 Infrastructure12,772,133 10,462,3979,965,88323,234,53021,867,876 11,901,993 Construction in progress-6,294 6,39533,8386,39540,132 Total Capital Assets$20,938,802$20,522,497$19,474,122$18,573,240$40,412,924$39,095,737 Additional information on the City of Fridley’s capital assets can be found in Note 5. Long-term debt . At the end of the current fiscal year, the City of Fridley had total bonded debt outstanding of $13,095,000, a decrease of $1,635,000 from 2012. $4,955,000 of this is for general obligation improvement debt which is supported by special assessments and a property tax levy, an additional $1,725,000 is for general obligation equipment certificate debt which financed the City’s capital equipment purchases, and $6,415,000 is general obligation utility revenue bonds which financed utility improvements. In addition, there is long-term debt in the amount of $962,960 for compensated absences. Additional information on the City of Fridley’s long-term debt can be found in Note 6. City of Fridley’s Outstanding Debt General Obligation Improvement Bonds, General Obligation Tax Increment Bonds, General Obligation Equipment Certificates, General Obligation Revenue Bonds, and Compensated Absences (excluding bond discounts) are as follows: Governmental ActivitiesBusiness-Type ActivitiesTotals 201220132012201320122013 General Obligation Improvement Bonds$5,880,000$4,955,000$0$0$5,880,000$4,955,000 General Obligation Revenue Bonds - - 7,070,000 6,415,000 7,070,000 6,415,000 General Obligation Equipment Certificates1,780,0001,725,000 - - 1,780,000 1,725,000 Compensated Absences 967,751 962,960 - - 967,751 962,960 Total$8,627,751$7,642,960$7,070,000$6,415,000$15,697,751$14,057,960 The City of Fridley has an Aa1 rating from Moody's Investors Service. State statutes limit the amount of general obligation debt a Minnesota city may issue to 3% of total Estimated Market Value. The current debt limitation for the City of Fridley is $60,000,015. Only $1,725,000 of the City's outstanding debt is counted within the statutory limitation because all other debt is either wholly or partially repaid by revenues other than general property tax levies. Managements Discussion and Analysis ’ Requests for information. This financial report is designed to provide a general overview of the City of Fridley’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Director, 6431 University Avenue NE, Fridley, Minnesota 55432. - This page intentionally left blank - BASIC FINANCIAL STATEMENTS CITY OF FRIDLEY Exhibit A-1 CITY OF FRIDLEY, MINNESOTA STATEMENT OF NET POSITION December 31, 2013 With comparative totals for December 31, 2012 Component Unit Primary GovernmentHousing & Redevelopment GovernmentalBusiness-TypeTotalsAuthority ActivitiesActivities2013201220132012 Assets: Cash and investment$26,966,82$5,852,707$32,819,532$33,947,623$9,896,629$10,036,934 s5 Restricted cash and investment -750,031750,0311,154,649 - - s Receivables: Accounts181,6132,447,6752,629,2882,625,37250,54372,020 Taxes350,475 - 350,475312,07316,95319,401 Special assessments2,113,76715,6932,129,4602,027,284 - - Mortgage - - - - 899,9011,051,661 Interest129,731 - 129,731171,65758,63371,390 Due from component unit125,431 - 125,43162,255 - - Due from other governments302,2295,050307,279109,568 - - Prepaid items - - - 298,0097503,914 Inventories - at cost50,366865,283915,649574,675 - - Land held for resale - - - - 3,547,9253,378,555 Capital assets (net of accumulated depreciation): Land2,841,516306,4773,147,9933,147,9932,023,5112,023,511 Buildings and structures1,235,3591,387,6632,623,0222,935,589 - - Improvements other than buildings1,765,1366,476,7168,241,8528,572,779 - - Machinery and equipment2,772,199402,6633,174,8622,515,638 - - Infrastructure11,901,9939,965,88321,867,87623,234,530 - - Construction in progress6,29433,83840,1326,395 - - Total assets50,742,93428,509,67979,252,61381,696,08916,494,84516,657,386 Liabilities: Due to primary government - - - - 125,43162,255 Accounts payable253,298407,443660,741573,149373,833375,985 Deposits payable 1,200 -1,2002,711 - - Contracts payable31,330 -31,330315,028 - - Due to other governments29,599131,457161,056115,610 - - Salaries payable639,10865,316704,424604,996 - - Accrued interest payable86,47297,275183,747200,278 - - Compensated absences payable: Due within one year776,529 - 776,529763,779 - - Due in more than one year186,431 - 186,431203,972 - - Other post employment benefits payable: Due in more than one year548,12167,832615,953591,319 - - Unearned revenue66,415 -66,415127,122 - - Bonds payable: Due within one year1,150,000570,0001,720,0001,635,000 - - Due in more than one year5,530,0005,843,15411,373,15413,092,791 - - Total liabilities9,298,5037,182,47716,480,98018,225,755499,264438,240 Net position: Net investment in capital assets13,842,49712,910,11726,752,61427,700,6362,023,5112,023,511 Restricted for: Debt service2,827,982 - 2,827,9823,067,040 - - Tax increment purposes - - - - 1,264,9312,042,108 Police forfeitures102,570102,570127,928 - - Cable television equipment72,640 -72,64072,640 - - Donations47,012 -47,01227,344 - - Unrestricted24,551,7308,417,08532,968,81532,474,74612,707,13912,153,527 Total net position$41,444,431$21,327,202$62,771,633$63,470,334$15,995,581$16,219,146 The accompanying notes are an integral part of these financial statements. CITY OF FRIDLEY, MINNESOTA STATEMENT OF ACTIVITIES For The Year Ended December 31, 2013 With comparative totals for the year ended December 31, 2012 Program Revenues Operating Charges ForGrants and ExpensesServicesContributions Functions/Programs Primary government: Governmental activities: General government$3,434,479$2,025,108$67,302 Public safety7,101,331864,435495,254 Public works5,928,33199,289385,207 Community development935,716582,28083,418 Parks and recreation1,456,841326,06764,543 Interest on long-term debt218,610 - - Total governmental activities19,075,3083,897,1791,095,724 Business-type activities: Liquor4,148,4474,308,79150,000 Water2,815,5882,788,146 - Sewer4,974,5254,572,798 - Storm water587,036613,818 - Total business-type activities12,525,59612,283,55350,000 Total primary government$31,600,904$16,180,732$1,145,724 Component unit: Housing and Redevelopment Authority$1,820,723$53,706$ - Total component unit$1,820,723$53,706$0 General revenues: Property taxes Tax increment collections Grants and contributions not restricted to specific programs Unrestricted investment earnings Net change in the fair market value of investments Gain on sale of property Other Transfers Total general revenues and transfers Change in net position Net position - January 1 Net position - December 31 The accompanying notes are an integral part of these financial statements. Exhibit A-2 Net (Expense) Revenue and Changes in Net PositionComponent Unit Primary GovernmentHousing & Redevelopment Capital TotalsAuthority Grants andGovernmentalBusiness-Type ContributionsActivitiesActivities2013201220132012 $ - ($1,342,069)$ - ($1,342,069)($1,108,844)$ - $ - - (5,741,642) - (5,741,642)(5,631,950) - - 1,747,303(3,696,532) - (3,696,532)(3,480,442) - - - (270,018) - (270,018)(248,353) - - - (1,066,231) - (1,066,231)(952,678) - - - (218,610) - (218,610)(232,318) - - 1,747,303(12,335,102)0(12,335,102)(11,654,585)00 - - 210,344210,344350,614 - - - - (27,442)(27,442)125,925 - - - - (401,727)(401,727)(104,180) - - - - 26,78226,782(31,216) - - 00(192,043)(192,043)341,14300 $1,747,303(12,335,102)(192,043)(12,527,145)(11,313,442)$0$0 $ -($1,767,017)($1,460,477) $0(1,767,017)(1,460,477) 11,003,455 - 11,003,45510,654,542373,063422,275 - - - - 995,8461,482,662 1,033,814 - 1,033,8141,030,123 - - 245,37056,572301,942343,64246,56492,353 (462,191)(108,918)(571,109)(8,865)(51,864)13,536 35,680 - 35,68066,27843,914144,323 - 24,66324,663 - 135,929200,715 250,000(250,000) - - - - 12,106,128(277,683)11,828,44512,085,7201,543,4522,355,864 (228,974)(469,726)(698,700)772,278(223,565)895,387 41,673,40521,796,92863,470,33362,698,05616,219,14615,323,759 $41,444,431$21,327,202$62,771,633$63,470,334$15,995,581$16,219,146 The accompanying notes are an integral part of these financial statements. CITY OF FRIDLEY, MINNESOTA BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2013 Debt Service General Assets Cash and investments$8,160,447$7,747,298 Receivables: Accounts76,092 - Taxes313,90626,281 Special assessments38,2131,410,821 Interest129,731 - Due from other funds97,712 - Due from component unit123,004 - Due from other governments36,753 - Inventories, at cost50,366 - Total assets$9,026,224$9,184,400 Liabilities, Deferred Inflows of Resources, and Fund Balances Liabilities: Accounts payable$177,365$ - Deposits payable1,200 - Contracts payable - - Due to other governments24,497 - Due to other funds - - Salaries payable514,393 - Unearned revenue - - Total liabilities717,4550 Deferred inflows of resources: Unavailable revenue221,3551,417,671 Fund balance: Nonspendable50,366 - Restricted40,0122,051,454 Committed - - Assigned - 5,715,275 Unassigned7,997,036 - Total fund balance8,087,4147,766,729 Total liabilities, deferred inflows of resources, and fund balanc$9,026,224$9,184,400 The accompanying notes are an integral part of these financial statements. Exhibit A-3 Special Assessment Construction Capital Other Governmental Intra-Activity ProjectsCapital ImprovementsFundsEliminations Totals Governmental Funds 20132012 $396,373$5,911,740$1,731,268$ - $23,947,126$25,217,941 - 1,35095,349 - 172,791183,578 - 23510,053 - 350,475312,073 113,888550,845 - - 2,113,7672,001,917 - - - - 129,731171,657 - - - (97,712) - - - - - - 123,00462,186 217,917 - 47,559 - 302,229103,160 - - - - 50,36666,152 $728,178$6,464,170$1,884,229($97,712)$27,189,489$28,118,664 $5,140$6,080$57,232$ -$245,817$234,073 - - - -1,2002,711 26,2975,033 - -31,330258,503 3,783 -320 -28,60038,013 - -97,712(97,712) - - - -26,724 -541,117455,689 - -66,415 -66,415127,122 35,22011,113248,403(97,712)914,4791,116,111 113,888549,4976,308 -2,308,7192,225,462 - - - -50,36666,152 - -182,210 -2,273,6763,114,112 579,070 -1,545,874 -2,124,9442,328,583 -5,903,560 - -11,618,83511,783,596 - -(98,566) -7,898,4707,484,648 579,0705,903,5601,629,518023,966,29124,777,091 $728,178$6,464,170$1,884,229($97,712)$27,189,489$28,118,664 Fund balance reported above$23,966,291$24,777,091 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.20,246,00220,587,570 Other long-term assets are not available to pay for current-period expenditures and, therefore, are reported as unavailable revenue in the funds.2,308,7192,225,462 Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds.(7,314,593)(8,280,896) Internal service funds are used by management to charge the cost of certain activities to individual funds. The assets and liabilities are included in the governmental statement of net position.2,238,0122,364,179 $41,444,431$41,673,406 Net position of governmental activities The accompanying notes are an integral part of these financial statements. CITY OF FRIDLEY, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For The Year Ended December 31, 2013 With comparative totals for the year ended December 31, 2012 Debt Service General Revenues: Taxes$9,787,289$919,305 Special assessments30,765376,026 Licenses and permits858,310 - Intergovernmental revenue909,806 - Charges for services2,079,418 - Fines and forfeits180,815 - Investment income: Interest and dividends82,06666,860 Net change in the fair value of investments(115,992)(140,188) Miscellaneous: Other263,058 - Total revenues14,075,5351,222,003 Expenditures: Current: General government2,546,218 - Public safety6,656,251 - Public works3,266,653 - Community development817,895 - Parks and recreation847,747 - Debt service - 1,207,326 Capital outlay18,627 - Total expenditures14,153,3911,207,326 Excess (deficiency) of revenues over (under) expenditures(77,856)14,677 Other financing sources (uses): Bonds issued - - Proceeds from sale of capital assets - - Transfers in641,000 - Transfers out(145,052)(350,000) Total other financing sources (uses)495,948(350,000) Net change in fund balance418,092(335,323) Fund balance - January 17,669,3228,102,052 Fund balance - December 31$8,087,414$7,766,729 The accompanying notes are an integral part of these financial statements. Exhibit A-4 Special AssessmentOther ConstructionCapitalGovernmentalIntra-Activity Capital ProjectsImprovementsFundsEliminations Totals Governmental Funds 20132012 $ - ($443)$318,634$ - $11,024,785$10,732,129 9,517417,812 - - 834,120763,920 - - 265,325 - 1,123,6351,104,504 217,9171,041,785474,220 - 2,643,7282,649,207 83,604 - 382,886 - 2,545,9082,353,888 - - 37,379 - 218,194255,622 72750,16920,124 - 219,946240,928 (1,615)(111,941)(35,683) - (405,419)(4,702) - 6,06726,284 - 295,409322,354 310,1501,403,4491,489,169018,500,30618,417,850 13,85082,679636,910 - 3,279,6573,499,197 - 75,03863,235 - 6,794,5246,426,775 262,3061,980 - - 3,530,9393,047,300 - - - - 817,895772,070 - 45,572411,839 - 1,305,1581,252,089 - - - - 1,207,3261,219,334 1,096,144235,0931,186,422 - 2,536,2861,639,773 1,372,300440,3622,298,406019,471,78517,856,538 (1,062,150)963,087(809,237)0(971,479)561,312 - - - - - 1,280,000 - - 35,679 - 35,67963,445 800,000 - 20,052(1,211,052)250,000350,000 (41,000)(800,000) - 1,211,052(125,000) - 759,000(800,000)55,7310160,6791,693,445 (303,150)163,087(753,506)0(810,800)2,254,757 882,2205,740,4732,383,024 - 24,777,09122,522,334 $579,070$5,903,560$1,629,518$0$23,966,291$24,777,091 The accompanying notes are an integral part of these financial statements. CITY OF FRIDLEY Exhibit A-5 CITY OF FRIDLEY, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For The Year Ended December 31, 2013 With comparative amounts for the year ended December 31, 2012 20132012 Amounts reported for governmental activities in the statement of activities (Exhibit A-2) are different because: Net changes in fund balances - total governmental funds (Exhibit A-4)($810,800)$2,254,757 Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period.(341,567)(996,298) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds.83,257(117,548) The issuance of long-term debt (e.g., bonds, leases) provides current resources to governmental funds, while the repayment of the principal of financial long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. This amount is the net effect of these differences in the treatment of long-term debt and related items.980,000(340,000) Internal service funds are used by management to charge the cost of certain activities to individual funds. This amount is net revenue attributable to governmental activities.(126,167)(81,971) Other post employment benefits in the statement of activities does not require the use of current financial resources and, therefore, is not reported as expenditures in governmental funds.(21,963)(26,007) Accrued interest reported in the statement of activities does not require the use of current financial resources and, therefore, is not reported as expenditures in governmental funds.8,26612,985 Change in net position of governmental activities (Exhibit A-2)($228,974)$705,918 The accompanying notes are an integral part of these financial statements. CITY OF FRIDLEY, MINNESOTA STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2013 With comparative totals for December 31, 2012 Business-Type Activities - Enterprise Funds Assets:LiquorWater Current assets: Cash and investments$191,844$2,821,762 Restricted cash and investments - 589,830 Accounts receivable50,0001,068,464 Special assessments receivable - 2,605 Due from other governments - - Prepaid items - - Inventories - at cost578,850286,433 Total current assets820,694 4,769,094 Noncurrent assets: Capital assets: Land151,946154,531 Buildings and structures130,2113,124,015 Improvements other than buildings774,7908,934,668 Machinery and equipment186,7171,635,574 Infrastructure - 9,809,768 Construction in process - - Total capital assets1,243,664 23,658,556 Less: Allowance for depreciation(714,565)(13,593,657) Net capital assets529,09910,064,899 Total noncurrent assets529,09910,064,899 Total assets1,349,79314,833,993 Liabilities: Current liabilities: Accounts payable328,36661,332 Accrued interest payable - 86,488 Contracts payable - - Due to other governments44,7927,093 Salaries payable19,79425,334 Payroll deductions payable - - Compensated absences payable - - Bonds payable - current - 520,000 Total current liabilities392,952 700,247 Noncurrent liabilities: Other post employment benefits18,49628,503 Compensated absences - noncurrent - - Bonds payable - noncurrent - 5,068,154 Total noncurrent liabilities18,496 5,096,657 Total liabilities411,4485,796,904 Net position: Net investment in capital assets529,0995,066,575 Unrestricted409,2463,970,514 Total net position$938,345$9,037,089 The accompanying notes are an integral part of these financial statements. Exhibit A-6 Governmental Activities - Internal Service Funds Business-Type Activities - Enterprise FundsTotals SewerStorm Water20132012 $1,374,090$1,465,011$5,852,707$5,650,648$3,019,699 160,201 - 750,0311,154,649 - 1,172,709156,5022,447,6752,441,7948,822 - 13,08815,69325,3672,427 4,0501,0005,0506,408 - - - - 298,009 - - - 865,283508,523 - 2,711,050 1,635,601 9,936,439 10,085,398 3,030,948 - - 306,477306,477 - 8,770 - 3,262,9963,262,996 - 2,906,3542,066,53414,682,34614,537,719 - 1,024,822172,2153,019,3282,942,1031,471,090 7,030,6907,227,38124,067,83924,000,200 - - 33,83833,8386,395 - 10,970,636 9,499,968 45,372,824 45,055,890 1,471,090 (7,041,792)(5,449,570)(26,799,584)(25,581,768)(1,194,594) 3,928,8444,050,39818,573,24019,474,122276,496 3,928,8444,050,39818,573,24019,474,122276,496 6,639,8945,685,99928,509,67929,559,5203,307,444 12,3365,409407,443335,8867,482 6,1464,64197,275105,540 - - - - 56,525 - 79,572 - 131,45777,597999 20,188 - 65,31654,092 - - - - - 97,991 - - - - 776,529 30,00020,000570,000655,000 - 148,242 30,050 1,271,491 1,284,640 883,001 20,833 - 67,83265,161 - - - - - 186,431 440,000335,0005,843,1546,412,791 - 460,833 335,000 5,910,986 6,477,952 186,431 609,075365,0507,182,4777,762,5921,069,432 3,458,8443,855,59912,910,11713,560,980276,496 2,571,9751,465,3508,417,0858,235,9481,961,516 $6,030,819$5,320,949$21,327,202$21,796,928$2,238,012 The accompanying notes are an integral part of these financial statements. CITY OF FRIDLEY, MINNESOTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS For The Year Ended December 31, 2013 With comparative totals for the year ended December 31, 201 2 Business-Type Activities - Enterprise Funds LiquorWater Sales$4,308,791$ - Cost of sales(3,222,209) - Gross profit1,086,5820 Operating revenues: Customer billings - 2,777,653 Charges for services - - Other revenues - 10,493 Total operating revenues0 2,788,146 Total gross profit and operating revenues1,086,582 2,788,146 Operating expenses: Personal services511,616833,781 Supplies and other charges: Disposal charges - - Other380,3941,023,800 Depreciation34,228748,597 Total operating expenses926,238 2,606,178 Operating income (loss)160,344 181,968 Nonoperating revenues (expenses): Intergovernmental revenue - - Investment income: Interest and dividends3,69429,557 Net change in the fair value of investments(786)(59,593) Insurance reimbursement24,663 - Interest expense - (209,410) Other50,000 - Gain (loss) on disposal of capital assets - - Total nonoperating revenues (expenses)77,571 (239,446) Income (loss) before transfers237,915 (57,478) Transfers: Transfers in - - Transfers out(250,000) - Total transfers(250,000) - Change in net position(12,085)(57,478) Net position - January 1 950,4309,094,567 Net position - December 31$938,345$9,037,089 The accompanying notes are an integral part of these financial statements. Exhibit A-7 Governmental Activities - Business-Type Activities - Enterprise Funds Internal Service Funds SewerStorm WaterTotals 20132012 $ - $ - $4,308,791$4,705,523$ - - - (3,222,209)(3,497,168) - 001,086,5821,208,3550 4,572,798611,2877,961,7387,864,406 - - - - 2,212213,335 - - 10,49310,242 - 4,572,798 611,287 7,972,231 7,876,860 213,335 4,572,798 611,287 9,058,813 9,085,215 213,335 724,657245,2002,315,2542,269,15567,207 3,595,271 - 3,595,2713,374,867 - 321,22895,9151,821,3371,525,826227,482 318,515234,7111,336,0511,336,371147,354 4,959,671 575,826 9,067,913 8,506,219 442,043 (386,873)35,461 (9,100)578,996 (228,708) - 1,0001,000 - - 11,12511,19655,57269,70025,424 (21,935)(26,604)(108,918)(4,163)(56,772) - - 24,6637008,889 (14,854)(11,210)(235,474)(255,055) - - 2,53152,53116,502 - - - - 9,680 - (25,664)(23,087)(210,626)(162,636)(22,459) (412,537)12,374 (219,726)416,360 (251,167) - - - - 250,000 - - (250,000)(350,000)(125,000) - - (250,000)(350,000)125,000 (412,537)12,374 (469,726)66,360 (126,167) 6,443,3565,308,57521,796,92821,730,5682,364,179 $6,030,819$5,320,949$21,327,202$21,796,928$2,238,012 The accompanying notes are an integral part of these financial statements. CITY OF FRIDLEY, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For The Year Ended December 31, 2013 With comparative totals for the year ended December 31, 2012 Business-Type Activities - Enterprise Funds LiquorWater Cash flows from operating activities: Receipts from customers and users$4,258,791$2,751,403 Receipts from interfund services provided - - Payment to suppliers(3,674,441)(1,289,886) Payment to employees(508,372)(828,416) Operating contribution50,000 - Net cash flows from operating activities125,978633,101 Cash flows from noncapital financing activities: Operating grants - - Transfers in - - Transfers out(250,000) - Net cash flows from noncapital financing activities(250,000)0 Cash flows from capital and related financing activities: Acquisition of capital assets(213,288)(5,525) Principal received on special assessments - - Insurance reimbursement24,663 - Principal paid on revenue bonds -(569,637) Interest and paying agent fees on revenue bonds -(216,790) Proceeds from sale of capital assets - - Net cash flows from capital and related financing activities(188,625)(791,952) Cash flows from investing activities: Investment income2,908(30,036) Net increase (decrease) in cash and cash equivalents(309,739)(188,887) Cash and cash equivalents - January 1501,5833,600,479 Cash and cash equivalents - December 31$191,844$3,411,592 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) $160,344$181,968 Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation34,228748,597 Operating contribution50,000 - Changes in assets and liabilities: Decrease (increase) in receivables(50,000)(36,743) Decrease (increase) in prepaid items - - Decrease (increase) in inventories(128,784)(227,976) Increase (decrease) in payables60,190(32,745) Total adjustments(34,366)451,133 Net cash provided by operating activities$125,978$633,101 The accompanying notes are an integral part of these financial statements. Exhibit A-8 Governmental Activities - Business-Type Activities - Enterprise Funds Internal Service Funds SewerStorm WaterTotals 20132012 $4,664,350$611,629$12,286,173$12,419,851$ - - - - - 202,155 (3,566,188)(98,161)(8,628,676)(8,525,660)(222,192) (719,371)(245,200)(2,301,359)(2,266,936)(69,222) - - 50,000 - - 378,791268,2681,406,1381,627,255(89,259) - 1,0001,000 - - - - - - 250,000 - - (250,000)(350,000)(125,000) 01,000(249,000)(350,000)125,000 (140,866)(75,490)(435,169)(1,054,662)(72,617) - 2,5312,53116,502 - - - 24,6637008,889 (50,000)(35,000)(654,637)(554,744) - (15,375)(11,574)(243,739)(262,570) - - - - 9,680 - (206,241)(119,533)(1,306,351)(1,845,094)(63,728) (10,810)(15,408)(53,346)65,537(31,348) 161,740134,327(202,559)(502,302)(59,335) 1,372,5511,330,6846,805,2977,307,5993,079,034 $1,534,291$1,465,011$6,602,738 $6,805,297 $3,019,699 ($386,873)$35,461($9,100)$578,996($228,708) 318,515234,7111,336,0511,336,371147,354 - - 50,000 - - 91,5523425,151(162,532)(11,180) 298,009 - 298,009(18,170) - - - (356,760)31,981 - 57,588(2,246)82,787(139,391)3,275 765,664232,8071,415,238 1,048,259 139,449 $378,791$268,268$1,406,138$1,627,255($89,259) The accompanying notes are an integral part of these financial statements. Exhibit A-9 CITY OF FRIDLEY, MINNESOTA STATEMENT OF FIDUCIARY NET POSITION December 31, 2013 With comparative amounts for December 31, 2012 20132012 Assets: Cash and investments$ - $24,631 Receivables: Accounts3,0992,766 Taxes: Delinquent - 61 Total assets$3,099$27,458 Liabilities: Due to other governments$3,099$27,458 The accompanying notes are an integral part of these financial statements. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 1. Summary of Significant Accounting Policies The City of Fridley, Minnesota 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 financial statements of the City of Fridley, Minnesota have been prepared in conformity with generally accepted accounting principles as applied to governmental units by the Governmental Accounting Standards Board (GASB). The following is a summary of the significant accounting policies. A. Financial Reporting Entity As required by generally accepted accounting principles, the financial statements of the reporting entity include those of the City of Fridley, Minnesota (the primary government) and its component units. The component units discussed below are included in the City's reporting entity because of the significance of their operational or financial relationships with the City. Component Units In conformity with generally accepted accounting principles, the financial statements of the component units have been included in the financial reporting entity as discretely presented component units. Discretely Presented Component Unit - The Fridley Housing and Redevelopment Authority (HRA) is governed by commissioners appointed by the Fridley City Council. The HRA is responsible for providing housing and redevelopment assistance to the City and its residents. Funding for the various programs administered by the HRA is provided through the issuance of tax increment revenue bonds and general obligation tax increment bonds guaranteed by the City. Separate financial statements are not prepared for the HRA. B.Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of changes in net position) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements.Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or business-type activity is offset by program revenues.Direct expenses are those that are clearly identifiable with a specific function or business-type activity.Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or business-type activity and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or business-type activity. Taxes and other items not included among program revenues are reported instead as general revenues. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers all revenues, except reimbursement grants, to be available if they are collected within 60 days of the end of the current fiscal period. Reimbursement grants are considered available if they are collected within one year of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, special assessments, intergovernmental revenues, charges for services and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government. The government reports the following major governmental funds: The General Fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. TheDebt Service Fund services debt on the general obligation improvement bonds that were issued to finance construction of public improvements. Special assessment improvements are paid for completely or in part by property owners deemed to have benefited from such improvements. TheSpecial Assessment Construction Capital Projects Fund is used to account for the construction of public improvements, such as residential streets, sidewalks, and storm sewers or for the provision of services that are to be paid primarily by the benefited property owner. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 The Capital Improvements 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. The government reports the following major proprietary funds: TheLiquor Fund accounts for operations of the municipal liquor stores. TheWater Fund accounts for the water service charges which are used to finance the water system operating expenses. TheSewer Fund accounts for the sewer service charges which are used to finance the sanitary sewer system operating expenses. TheStorm Water Fund accounts for storm sewer charges which are used to finance the storm sewer operating expenses. Additionally, the government reports the following fund types: Internal Service Funds are used to account for employee fringe benefits, insurance deductibles and maintenance and upgrading of information systems 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. Agency Funds are used to account for monies on behalf of the Six Cities Watershed District and the North Metro Convention and Tourism Bureau. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are transactions that would be treated as revenues, expenditures or expenses if they involved external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City of Fridley. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operatingrevenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the liquor, water, sewer and storm water enterprise funds are charges to customers for sales and services.Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 When both restricted and unrestricted resources are available for an allowable use, it is the government’s policy to use restricted resources first, then unrestricted resources as they are needed. D. Budgets The City Charter grants the City Council full authority over the financial affairs of the City. The City Manager is charged with the responsibility of preparing the estimates of the annual budget and the enforcement of the provisions of the budget as specified in the City Charter. Upon adoption of the annual budget resolution by the Council, it becomes the formal appropriation budget for City operations. All budget adjustments must be approved by the Council. Budgets for the General, Special Revenue and Capital Improvement Capital Projects Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Budgeted expenditure appropriations lapse at year end. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the appropriation, is not employed by the City because it is, at present, not considered necessary to assure effective budgetary control or to facilitate effective cash management. E. Legal Compliance Budgets The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is legally enacted through passage of a resolution. 4. The City Council may authorize transfer of budgeted amounts between departments within any fund. 5. Reported budget amounts are as originally adopted or as amended by Council approved transfers. The City Charter limits appropriations to the total estimated revenues and fund balances. If actual revenues exceed the original estimates, appropriations may be increased by the Council up to the amount of revenue increases. 6. All budget amounts lapse at the end of the year to the extent they have not been expended or encumbered. Encumbrances are reappropriated into the following year’s budget. 7. Annual budgets are legally adopted for the General Fund and Special Revenue Funds. Formal budgeting integration is employed as a management control device during the year for each of these funds. Formal budgetary integration is not employed for Debt Service Funds because effective budgetary control is achieved through the bond indenture provisions. Budgetary control for other Capital Projects Funds is accomplished through the use of project controls. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 8. As required by the City Charter, budgetary control is maintained within department at the level of three major categories of expenditures: salaries and wages; ordinary expenses; and capital outlay. This is the level of control at which expenditures may not legally exceed appropriations. 9. 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. 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. Investment income is allocated to the respective funds on the basis of applicable cash balance participation by each fund. Investments are stated at fair value, based upon quoted market prices as of the balance sheet date. Investment income is accrued at the balance sheet date. The City provides temporary advances to funds that have insufficient cash balances by means of an advance from another fund shown as interfund receivables in the advancing fund, and an interfund payable in the fund with the deficit, until adequate resources are received. These interfund balances are eliminated on the government-wide financial statements. For purposes of the statement of cash flows the City considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. All of the cash and investments allocated to the proprietary funds have original maturities of 90 days or less. Therefore the entire balance in the Proprietary Funds is considered cash equivalents. Restricted cash balances relate to unspent bond proceeds. Investments are stated at fair value, based upon quoted market prices, except for investments in 2a7-like external investment pools, which are stated at amortized cost. Investment income is accrued at the balance sheet date. G. Receivables and Payables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. Short-term interfund loans are classified as “interfund receivables/payables.” All short-term interfund receivables and payables at December 31, 2013 are planned to be eliminated in 2013. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” Uncollectible property taxes and special assessments are not material and therefore have not been reported. Because utility bills are considered liens on property, no estimated uncollectible amounts are established. Uncollectible amounts are not material for other receivables and have not been reported. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 H. Property Tax Revenue Recognition The City Council annually adopts a tax levy and certifies it to the County in December (levy/assessment date) of each year for collection in the following year. The County is responsible for billing and collecting all property taxes for itself, the City, the local School District and other taxing authorities. Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. Real property taxes are payable (by property owners) on May 15 and October 15 of each calendar year. Personal property taxes are payable by taxpayers on February 28 and June 30 of each year. These taxes are collected by the County and remitted to the City on or before July 7 and December 2 of the same year. Delinquent collections for November and December are received the following January. The City has no ability to enforce payment of property taxes by property owners. The County possesses this authority. Government-Wide Financial Statements The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible property taxes are not material and have not been reported. Governmental Fund Financial Statements The City recognizes property tax revenue when it becomes both measurable and available to finance expenditures of the current period. In practice, current and delinquent taxes and State credits received by the City in July, December and January are recognized as revenue for the current year. Taxes collected by the County by December 31 (remitted to the City the following January) and taxes and credits not received at year end are classified as delinquent and due from County taxes receivable. The portion of delinquent taxes not collected by the City in January is fully offset by deferred inflows of resources because they are not available to finance current expenditures. I. Special Assessment Revenue Recognition Special assessments are levied against the benefited properties for the assessable costs of special assessment improvement projects in accordance with State Statutes. The City usually adopts the assessment rolls when the individual projects are complete or substantially complete. The assessments are collectible over a term of years generally consistent with the term of years of the related bond issue. Collection of annual installments is handled by the County in the same manner as property taxes. Property owners are allowed to prepay future installments without interest or prepayment penalties. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale. Proceeds of sales from tax forfeit properties are remitted to the City in payment of delinquent special assessments. Pursuant to State Statutes, a property shall be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or seasonal recreational land in which event the property is subject to such sale after five years. Government-Wide Financial Statements The City recognizes special assessment revenue in the period that the assessment roll was adopted by the City Council. Uncollectible special assessments are not material and have not been reported. Governmental Fund Financial Statements Revenue from special assessments is recognized by the City when it becomes measurable and available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by the City are recognized as revenue for the current year. Special assessments that are collected by the County by December 31 (remitted to the City the following January) are also recognized as revenue for the current year. All remaining delinquent, deferred and special deferred assessments receivable in governmental funds are completely offset by deferred inflows of resources. J. Inventories Governmental Funds Inventories of the general fund are stated at cost, which approximates market, using the first-in, first out (FIFO) method. The primary government does not maintain material amounts of inventory within the other governmental funds. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Proprietary Funds Liquor fund inventories are valued on the average cost basis. Other proprietary funds inventory items are expensed at the time they are sold or used (consumption method). K. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. Prepaid items are reported using the consumption method and recorded as expenditures/expenses at the time of consumption. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 L. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), and intangible assets such as easements are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 (with the exception of computer equipment) (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. In the case of the initial capitalization of general infrastructure assets (i.e., those reported by governmental activities) the government chose to include all such items regardless of their acquisition date or amount. The City was able to estimate the historical cost for the initial reporting of these assets through back-trending (i.e., estimating the current replacement cost of the infrastructure to be capitalized and using an appropriate price-level index to deflate the cost of the infrastructure to be capitalized and using an appropriate price-level index to deflate the cost to the acquisition year or estimated acquisition year). The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. For the year ended December 31, 2013, no interest was capitalized in connection with construction in progress. Property, plant and equipment of the primary government, and the component units, are depreciated using the straight line method over the following estimated useful lives: Assets Improvements other than building 20 – 25 years Buildings and structures 20 – 25 years Machinery and equipment 5 – 10 years Infrastructure 25 years CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 M. Compensated Absences All liabilities for compensated absences, both current and long-term, for annual leave, severance and separation pay are accounted for in the Employee Benefit Fund, an Internal Service Fund. Each year compensated absence expenditures and expenses are recorded in the Governmental and Proprietary Funds respectively, equivalent to the full amount accrued by fund employees during the year. These charges are offset by a corresponding transfer of assets from the home department funds to the Employee Benefit Fund to fund the liability. This liability represents the maximum possible dilution of Employee Benefit Fund assets by retirements or extended leaves by employees. The personnel ordinance limits the annual accumulation of benefits that can be accumulated from year-to-year. N. Long-Term Obligations In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts are generally immaterial and are expensed in the year of bond issuance. Material premiums and discounts are deferred and amortized over the life of the bonds. In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. O. Fund Balance Classifications In the fund financial statements, governmental funds report fund balance in classifications that disclose constraints for which amounts in those funds can be spent. These classifications are as follows: Nonspendable- consists of amounts that are not in spendable form, such as prepaid items. Restricted - consists of amounts related to externally imposed constraints established by creditors, grantors or contributors; or constraints imposed by state statutory provisions. Committed - consists of internally imposed constraints. These constraints are established by Resolution of the City Council. Assigned- consists of internally imposed constraints. These constraints reflect the specific purpose for which it is the City’s intended use. Pursuant to City Council Resolution, the City Manager and/or the Finance Director are authorized to establish assignments of fund balance. Unassigned - is the residual classification for the general fund and also reflects negative residual amounts in other funds. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 When both restricted and unrestricted resources are available for use, it is the City’s policy to first use restricted resources, and then use unrestricted resources as they are needed. When committed, assigned or unassigned resources are available for use, it is the City’s policy to use resources in the following order; 1) committed 2) assigned and 3) unassigned. P. Interfund Transactions Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. Interfund loans are reported as an interfund loan receivable or payable which offsets the movement of cash between funds. All other interfund transactions are reported as transfers. Q. Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires management to make estimates that affect amounts reported in the financial statements during the reporting period. Actual results could differ from such estimates. R. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so willnot be recognized as an outflow of resources (expense/expenditure) until then. The government has no items that qualify for reporting in this category. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has one type of item, which arises only under a modified accrual basis of accounting, that qualifies for reporting in this category.Accordingly, the item, unavailable revenue, is reported only in the governmental fund balance sheet. The governmental funds report unavailable revenues from the following sources: property taxes and special assessments. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 S. Reconciliation of Government-Wide and Fund Financial Statements 1. Explanation of certain differences between the governmental fund balance sheet and the government-wide statement of net position The governmental fund balance sheet includes reconciliation between fund balance – total governmental funds and net position – governmental activities as reported in the government-wide statement of net position. One element of that reconciliation explains that “long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds”. The details of this ($7,314,593) difference are as follows: Bonds payable($6,680,000) Accrued interest payable(86,472) Other post employment benefits payable(548,121) Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities($7,314,593) 2. Explanation of certain differences between the governmental fund statement of revenues, expenditures and changes in fund balances and the government-wide statement of activities The governmental fund statement of revenues, expenditures and changes in fund balances includes reconciliation between net changes in fund balances – total governmental funds and changes in net position of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that “governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense”. The details of this ($341,567) difference are as follows: Capital outlay$2,536,286 Less maintenance projects not capitalized(942,942) Depreciation expense(1,934,911) Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities($341,567) CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Another element of that reconciliation states that “revenues on the statement of activities that do not provide current financial resources are not reported as revenues in the funds”. The details of this $83,257 difference are as follows: Unavailable revenue - general property taxes: At December 31, 2012($227,717) At December 31, 2013206,387 Unavailable revenue - special assessments: At December 31, 2012(1,997,745) At December 31, 20132,102,332 Net adjustments to decrease net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities$83,257 Another element of that reconciliation states that “the issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal on long-term debt consumes the current financial resources of governmental funds”. Neither transaction, however, has any effect on net position. The details of this $980,000 difference are as follows: Principal repayments: G.O. Improvement bonds$980,000 Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities$980,000 T. Restricted Assets Cash balances in the Water and Sewer Enterprise Funds are restricted at December 31, 2013 and 2012, for unspent bond proceeds. U. Reclassifications Certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year’s presentation. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 V. Comparative Totals The basic financial statements, required supplementary information, combining and individual fund financial statements and schedules, and supplementary financial information include certain prior-year summarized comparative information in total but not at the level of detail required for a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the City’s financial statements for the year ended December 31, 2012, from which the summarized information was derived. 2. Deposits and Investments A.Deposits In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized by the City Council, all of which are members of the Federal Reserve System. Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds. Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City Treasurer or in a financial institution other than that furnishing the collateral. Authorized collateral includes the following: a) United States government treasury bills, treasury notes, treasury bonds; b) Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service available to the government entity; c) General obligation securities of any state or local government with taxing powers which is rated “A” or better by a national bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated “AA” or better by a national bond rating service; d) Unrated general obligation securities of a local government with taxing powers may be pledged as collateral against funds deposited by that same local government entity: e) Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence that the bank’s public debt is rated “AA” or better by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation; and f) Time deposits that are fully insured by any Federal agency. Custodial Credit Risk – Deposits: Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. State Statutes require that insurance, surety bonds or collateral protect all City deposits. The market value of collateral pledged must equal 110% of deposits not covered by insurance or bonds. As of December 31, 2013, the bank balance of the City’s deposits was covered by federal depository insurance or covered by perfected collateral pledged and held in the City’s name. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 B. Investments Minnesota Statutes authorize the City to invest in the following: a) Direct obligations or obligations guaranteed by the United States or its agencies, its instrumentalities or organizations created by an act of congress, excluding mortgage-backed securities defined as high risk. 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, general obligation tax-exempt securities, or repurchase or reverse repurchase agreements. c) Obligations of the State of Minnesota or any of its municipalities as follows: 1) any security which is a general obligation of any state or local government with taxing powers which is rated “A” or better by a national bond rating service; 2) any security which is a revenue obligation of any state or local government with taxing powers which is rated “AA” or better by a national bond rating service; and 3) a general obligation of the Minnesota housing finance agency which is a moral obligation of the State of Minnesota and is rated “A” or better by a national bond rating agency. d) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System. e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. f) Repurchase or reverse 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; certain Minnesota securities broker-dealers; or, a bank qualified as a depositor. g) General obligation temporary bonds of the same governmental entity issued under section 429.091, subdivision 7; 469.178, subdivision 5; or 475.61, subdivision 6. As of December 31, 2013 the City had the following investments and maturities: Investment Maturities (in Years) FairLessOver Investment TypeRatingValueThan 11-56-1010 Years Federal Home Loan BankAAA$8,309,366$ - $489,935$7,819,431$ - Federal National Mortgage AssociationAAA2,950,720 - 2,460,975489,745 - Federal Home Loan Mortgage CorporationAAA2,954,643 - 982,9401,971,703 - Local government bondsAA9,421,7213,087,6136,133,900200,208 - Brokered CDsN/R3,099,2561,246,2331,610,250242,773 - Money marketN/R5,029,0535,029,053 - - Total$31,764,759$9,362,899$11,678,000$10,723,860$0 Total investments$31,764,759 Deposits1,800,254 Petty cash4,550 Total cash and investments$33,569,563 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Following is a reconciliation to the City’s cash and investment balances as of December 31, 2013: Cash and investments - primary government: Governmental and business-type (statement A-1)$32,819,532 Restricted cash business-type (statement A-1)750,031 Fiduciary (statement A-9) - $33,569,563 As of December 31, 2013 the HRA had the following investments and maturities: Investment Maturities (in Years) FairLessOver Investment TypeRatingValueThan 11-56-1010 Years United States Treasury BondAAA$151,623$ - $151,623$ - $ - Federal National Mortgage AssociationAAA1,133,147 - 1,133,147 - - Federal Home Loan Mortgage CorporationAAA470,337470,337 Aaa - A Local government bonds4,372,3702,146,0902,226,280 - - 1 Money marketN/R2,620,0722,620,072 - - - Total$8,747,549$4,766,162$3,981,387$0$0 Total investments$8,747,549 Deposits1,149,080 Total cash and investments$9,896,629 C. Investment Risks Custodial credit risk – investments – For investments in securities, custodial credit risk is the risk that in the event of failure of the counterparty to a transaction, the City will not be able to recover the value of its investment securities that are in the possession of an outside party. Investments in investment pools and money markets are not evidenced by securities that exist in physical or book entry form, and therefore are not subject to custodial credit risk disclosures. The City policy is to limit its exposure by holding investments in securities with a major bank’s corporate trust department. Investments are delivered to the City’s trust account and then payment is released to the broker-dealer. Interest rate risk – Interest rate risk is the risk that changes in interest rates of debt investments could adversely affect the fair value of an investment. The City’s investment policy requires the City to diversify its investment portfolio to eliminate the risk of loss resulting from over concentration of assets in a specific maturity. The policy also states the City’s investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated. Credit Risk– Credit risk is the risk that an issuer or other counterparty to an investment will be unable to fulfill its obligation to the holder of the investment. State law limits investments to commercial paper to those rated in the highest quality category by at least two nationally recognized rating agencies; in any security of the State of Minnesota or any of its municipalities which is rated “A” or better by a national bond rating service for general obligation and rated “AA” or better for a revenue obligation; a general obligation of the Minnesota Housing Finance Agency to those rated “A” or better by a national bond rating agency; mutual funds or money market funds whose investments are restricted to securities described in MS 118A.04. The City’s investment policy does not place further restrictions on investment options. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Concentration of credit risk – Concentration of credit risk is the risk of loss that may be attributed to the magnitude of a government’s investment in a single issuer. The City places no limit on the amount the City may invest in any one issuer.Investments in a single issuer exceeding 5% of the City’s overall investment portfolio are in various holdings as follows: Federal Home Loan Bank26.16% Federal Home Loan Mortgage Corporation9.30% Federal National Mortgage Association9.29% Local government bonds: El Paso Texas6.41% Concentration of credit risk – Concentration of credit risk is the risk of loss that may be attributed to the magnitude of a government’s investment in a single issuer. The HRA places no limit on the amount the HRA may invest in any one issuer. Investments in a single issuer exceeding 5% of the HRA’s overall investment portfolio are in various holdings as follows: Federal Home Loan Bank5.38% Federal National Mortgage Association12.95% Local government bonds: Oregon St-TXB-E5.22% Baltimore MD11.30% Kansas City MO7.72% Greenville SC6.81% 3. Receivables Significant receivables balances not expected to be collected within one year of December 31, 2013 are as follows: Primary Government Major Funds Special AssessmentCapitalNonmajor GeneralDebt ServiceCapital ProjectsImprovementsFundsTotal Special assessments receivable$29,914$1,118,713$438,380$90,896$ - $1,677,903 Delinquent property taxes122,300 - 11,632 - 4,068138,000 $152,214$1,118,713$450,012$90,896$4,068$1,815,903 HRA Component Unit Major Funds RevolvingGeneral LoanFundTotal Mortgage receivable$955,065$ - $955,065 Allowance for uncollectible accounts(55,164) - ($55,164) Delinquent tax increment - 5,309$5,309 $899,901$5,309$905,210 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 4. Unavailable Revenues Governmental funds report deferred inflows of resources in connection with receivables that are not considered to be available to liquidate liabilities of the current period. At the end of the current fiscal year, the various components of unavailable revenue reported in the governmental funds were as follows: PropertySpecial TaxesAssessmentsTotal Major funds: General$183,874$37,481$221,355 Debt Service15,9761,401,6951,417,671 Special Assessment Capital Projects - 113,888113,888 Capital Improvements229549,268549,497 Nonmajor6,308 - 6,308 Total unavailable revenue$206,387$2,102,332$2,308,719 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 5. Capital Assets Capital asset activity for the year ended December 31, 2013 was as follows: BeginningEnding Primary Government BalanceIncreasesDecreasesBalance Governmental activities: Capital assets, not being depreciated: Land$2,841,516$ - $ - $2,841,516 Construction in progress - 6,294 - 6,294 Total capital assets, not being depreciated2,841,5166,29402,847,810 Capital assets, being depreciated: Buildings and structures7,981,14060,980 - 8,042,120 Machinery and equipment8,695,1761,292,476(501,459)9,486,193 Improvements6,174,900323,590(105,485)6,393,005 Infrastructure33,150,978 - - 33,150,978 Total capital assets, being depreciated56,002,1941,677,046(606,944)57,072,296 Less accumulated depreciation for: Buildings and structures6,517,357289,405 - 6,806,762 Machinery and equipment6,619,763578,309(484,079)6,713,993 Improvements4,388,943344,411(105,485)4,627,869 Infrastructure20,378,845870,140 - 21,248,985 Total accumulated depreciation37,904,9082,082,265(589,564)39,397,609 Total capital assets being depreciated - net18,097,286(405,219)(17,380)17,674,687 Governmental activities capital assets - net$20,938,802($398,925)($17,380)$20,522,497 BeginningEnding Primary Government BalanceIncreasesDecreasesBalance Business-type activities: Capital assets, not being depreciated: Land$306,477$ - $ - $306,477 Construction in progress6,39533,838(6,395)33,838 Total capital assets, not being depreciated312,87233,838(6,395)340,315 Capital assets, being depreciated: Buildings and structures3,262,996 - - 3,262,996 Improvements other than buildings14,537,719240,487(95,860)14,682,346 Machinery and equipment2,942,10399,600 - 3,041,703 Infrastructure24,000,20067,639 - 24,067,839 Total capital assets, being depreciated44,743,018407,726(95,860)45,054,884 Less accumulated depreciation for: Buildings and structures1,791,19184,142 - 1,875,333 Improvements other than buildings7,750,897550,593(95,860)8,205,630 Machinery and equipment2,501,875137,163 - 2,639,038 Infrastructure13,537,805564,153 - 14,101,958 Total accumulated depreciation25,581,7681,336,051(95,860)26,821,959 Total capital assets being depreciated - net19,161,250(928,325)018,232,925 Business-type activities capital assets - net$19,474,122($894,487)($6,395)$18,573,240 Component unit: Capital assets, not being depreciated: Land$2,023,511$0$0$2,023,511 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government$197,826 Public safety263,410 Public works, including depreciation of general infrastructure assets1,287,497 Park and recreation186,178 Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets147,354 Total depreciation expense - governmental activities$2,082,265 Business-type activities: Liquor$34,228 Water748,597 Sewer318,515 Storm water234,711 Total increases in accumulated depreciation$1,336,051 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 6. Long-Term Debt The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. The reporting entity’s long-term debt is segregated between the amounts to be repaid from governmental activities and amounts to be repaid from business-type activities. As of December 31, 2013, the governmental long-term bonded debt and loans of the financial reporting entity consisted of the following: Governmental Activities: $1,915,000 General Obligation Improvement Bonds, Series 2008A due in varying annual installments of $165,000 - $225,000 through February 1, 2019; interest at 2.95% - 4.00%.$1,225,000 $1,910,000 General Obligation Improvement Bonds, Series 2007A due in varying annual installments of $155,000 - $230,000 through August 1, 2018; interest at 3.50% - 3.85%.1,055,000 $1,215,000 General Obligation Improvement Bonds, Series 2010C due in varying annual installments of $55,000 - $135,000 through February 1, 2021; interest at 2.00% - 3.00%.935,000 $1,805,000 General Obligation Improvement Bonds of 2005 due in varying annual installments of $155,000 - $210,000 through February 1, 2016; interest at 2.80% - 3.750%.605,000 $2,505,000 General Obligation Improvement Bonds of 2006 due in varying annual installments of $205,000 - $305,000 through February 1, 2017; interest at 4.00%.1,135,000 $550,000 General Obligation Equipment Certificates, Series 2010B due in varying annual installments of $50,000 - $70,000 through February 1, 2020; interest at 2.00% - 3.00%445,000 $1,280,000 General Obligation Equipment Certificates, Series 2012A due in varying annual installments of $135,000 - $150,000 through February 1, 2022; interest at 1.00% - 1.65%1,280,000 Subtotal governmental activities$6,680,000 Business-Type Activities: $1,180,000 General Obligation Water Revenue Bonds of 1998, due in varying annual installments of $90,000 - $130,000 through February 1, 2011.-$ $1,790,000 General Obligation Water Revenue Bonds of 2004 due in varying annual installments of $50,000 - $230,000 through February 1, 2019; interest at 2.50% - 4.00%.1,230,000 $1,005,000 General Obligation Water and Storm Water Revenue Bonds of 2004 due in varying annual installments of $160,000 - $235,000 through February 1, 2012; interest at 2.00% - 3.25%. - $3,725,000 General Obligation Water Revenue Bonds of 2008B due in varying annual installments of $240,000 - $315,000 through February 1, 2023; interest at 2.95% - 4.50%.2,640,000 $2,810,000 General Obligation Utility Revenue Bonds of 2010A due in varying annual installments of $160,000 - $265,000 through February 1, 2026; interest at 2.50% - 3.50%2,545,000 Unamortized discount(1,846) Subtotal business-type activities6,413,154 Total primary government$13,093,154 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Annual debt service requirements to maturity for general obligation bonds and loans are as follows: Primary Government Governmental ActivitiesBusiness-Type Activities Year EndingG.O. ImprovementG.O. Equipment CertificatesRevenue Bonds December 31,PrincipalInterestPrincipalInterestPrincipalInterest 2014$955,000$165,235$195,000$25,655$570,000$223,459 2015990,000 129,815 200,000 23,080 585,000 203,060 20161,030,000 92,090 200,000 20,330 610,000 181,610 2017855,000 56,360 205,000 17,205 625,000 159,191 2018570,000 29,503 205,000 13,855 655,000 135,623 2019355,000 12,450 210,000 10,371 680,000 110,748 2020135,000 3,975 215,000 6,570 465,000 89,585 202165,000 975 145,0003,526490,000 72,080 2022 - - 150,0001,238505,000 53,688 2023 - - - - 530,000 34,125 2024 - - - - 225,000 20,281 2025 - - - - 235,000 12,513 2026 - - - - 240,000 4,200 Total$4,955,000$490,403$1,725,000$121,830$6,415,000$1,300,161 Long-term liability activity for the year ended December 31, 2013, was as follows: BeginningEndingDue Within BalanceAdditionsReductionsBalanceOne Year Governmental activities: Bonds payable: G.O. improvement bonds$5,880,000$ - ($925,000)$4,955,000$955,000 G.O. equipment certificates1,780,000 - (55,000)1,725,000195,000 Total bonds payable7,660,0000(980,000)6,680,0001,150,000 Compensated absences967,750753,425(758,215)962,960186,431 Total government activity long-term debt$8,627,750$753,425($1,738,215)$7,642,960$1,336,431 Business-type activities: Bonds payable: G.O. revenue bonds$7,067,791$ - ($654,637)$6,413,154$570,000 Compensated absences are generally liquidated by the Employee Benefits Fund. All long-term bonded indebtedness outstanding at December 31, 2013 is backed by the full faith and credit of the City, including improvement and revenue bond issues. Delinquent assessments receivable at December 31, 2013 totaled $35,512. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Revenues Pledged Revenue PledgedCurrent Year Percent ofDebt servicePrincipalPledged Use oftotalas a % ofTerm ofRemainingand InterestRevenue Bond IssueProceedsTypedebt servicenet revenuesPledgePrincipalpaidreceived 2012ACapital EquipmentProperty Taxes100%2013-$1,280,000$13,363$ - 2022 2010BCapital EquipmentProperty Taxes100%2011-445,00067,400232,780 2020 2010CStreet ImprovementsProperty Taxes and100%2011-935,000142,45097,994 Special Assessments2021 2008AStreet ImprovementsProperty Taxes and100%2008-1,225,000232,150211,264 Special Assessments2019 2007AStreet ImprovementsProperty Taxes and100%2007-1,055,000227,938207,141 Special Assessments2018 2006AStreet ImprovementsProperty Taxes and100%2007-1,135,000305,500248,928 Special Assessments2017 2005AStreet ImprovementsProperty Taxes and100%2006-605,000215,375212,603 Special Assessments2016 Water, Sewer and 2010A Utility Revenue BondsInfrastructure improvementsStorm Customer100%4.37%2011-2,545,000348,1387,972,231 Net Revenue2026 2008B Water Revenue BondsInfrastructure improvementsWater Customer100%11.71%2008-2,640,000326,4602,788,146 Net Revenue2023 2004 Water Revenue BondsInfrastructure improvementsWater Customer100%8.03%2004-1,230,000223,7792,788,146 Net Revenue2019 7. Defined Benefit Pension Plans-Statewide A. Plan Description All full-time and certain part-time employees of the City are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the General Employees Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF), which are cost-sharing, multiple-employer retirement plans. These plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership by statute are covered by the PEPFF. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by State Statute, and vest after three years of credited service. The defined retirement benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. The benefit provisions stated in the previous paragraphs of this section are current provision and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last terminated their public service. PERA issues a publicly available financial report that includes financial statements and required supplementary information for GERF and PEPFF.That report may be obtained on the internet at www.mnpera.org, by writing to PERA at 60 Empire Drive #200, St. Paul, Minnesota, 55103-2088 or by calling (651)296-7460 or 1-800-652-9026. B. Funding Policy Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. GERF Basic Plan members and Coordinated Plan members were required to contribute 9.10% and 6.25%, respectively, of their annual covered salary in 2013. PEPFF members were required to contribute 9.6% of their annual covered salary in 2013. The City was required to contribute the following percentages of annual covered payroll in 2013: 11.78% for Basic Plan members, 7.25% for Coordinated Plan members, and 14.4% for PEPFF members. The City’s contributions to the General Employees Retirement Fund for the years ending December 31, 2013, 2012 and 2011 were $411,511, $397,492, and $400,177, respectively. The City’s contributions to the Public Employees Police and Fire Fund for the years ending December 31, 2013, 2012 and 2011 were $503,700, $501,259 and $477,618, respectively. The City’s contributions were equal to the contractually required contributions for each year as set by state statute. C. Public Employees Retirement Association (PERA) - Defined Contribution Plan Description All council members of the City of Fridley are covered by a defined contribution pension plan administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Defined Contribution Plan (PEDCP) which is a multiple- employer deferred compensation plan. Benefit Provisions and Contribution Rates The PEDCP is a tax qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Plan benefits depend solely on amounts contributed to the plan plus investment income, less administrative expenses. Minnesota Statutes, Chapter 353D.03, specifies plan provisions, including the employee and employer contribution rates for those qualified personnel who elect to participate. An eligible elected official who decides to participate contributes 5 percent of salary which is matched by the elected official's employer. For ambulance service personnel, employer contributions are determined by the employer, and for salaried employees must be a fixed percentage of salary. Employer contributions for volunteer personnel may be a unit value for each call or period of alert duty. Employees who are paid for their services may elect to make member contributions in an amount not to exceed the employer share. Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts of the Minnesota Supplemental Investment Fund.For administering the plan, PERA receives 2 percent of employer contributions and twenty-five hundredths of one percent of the assets in each member's account. Total contributions made by the City during fiscal year 2013 were: Percentage of AmountCovered PayrollRequired EmployeesEmployerEmployeesEmployerRates PEDCP$2,106$2,1065.00%5.00%5.00% 8. Defined Contribution Pension Plan - Fridley Volunteer Firefighters Relief Association Plan Description The Fridley Volunteer Firefighters Relief Association (Association), is a single employer public employee retirement system that acts as a common investment administrator for all of the City’s firefighters. Pursuant to a 1987 amendment to its by-laws, the pension plan is a defined contribution plan, prior to 1987 the pension plan was a defined benefit pension plan. Benefits and contribution requirements are established by Association’s by-laws and can be amended by the Association’s Board of Trustees with approval from the City of Fridley, Minnesota. All provisions are within limitations established by Minnesota Statutes. Type of Benefit The exclusive pension provided by the Association is a “Defined Contribution Lump Sum Service Pension,” as defined in Minnesota Statutes §424A.02, Subdivision 4. Contribution Made The City collected and remitted $108,637 and $101,103 in State Aid to the Association for 2013 and 2012, respectively. This transaction is recorded as revenue and expenditures in the City’s financial statements. During 2013 and as of December 31, 2013, the Association held no securities issued by the City or other related parties. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 9. Other Post-Employment Benefits A. Plan Description In addition to providing the pension benefits described in Note 6, the City provides post- employment health care benefits (as defined in paragraph B) for retired employees and police and firefighters disabled in the line of duty, through a single-employer defined benefit plan. The termPlan refers to the City’s requirement by State Statute to provide retirees with access to health insurance. The OPEB plan is administered by the City. The authority to provide these benefits is established in Minnesota Statutes Sections 471.61 Subd. 2a, and 299A.465. The benefits, benefit levels, employee contributions and employer contributions are governed by the City and can be amended by the City through its personnel manual and collective bargaining agreements with employee groups. The Plan is not accounted for as a trust fund, an irrevocable trust has not been established to account for the Plan. The Plan does not issue a separate report. B. Benefits Provided Retirees The City is required by State Statute to allow retirees to continue participation in the City’s group health insurance plan if the individual terminates service with the City through service retirement or disability retirement. Covered spouses may continue coverage after the retiree’s death. The surviving spouse of an active employee may continue coverage in the group health insurance plan after the employee’s death. All health care coverage is provided through the City’s group health insurance plans. The retiree is required to pay 100% of their premium cost for the City-sponsored group health insurance plan in which they participate. The premium is a blended rate determined on the entire active and retiree population. Since the projected claims costs for retirees exceed the blended premium paid by retirees, the retirees are receiving an implicit rate subsidy (benefit). The coverage levels are the same as those afforded to active employees. Upon a retiree reaching age 65 years of age, Medicare becomes the primary insurer. The monthly retiree premiums effective January 1, 2013 were: SingleMarried Regular and Dental$737$2,129 HRA and Dental6221,797 HSA and Dental6011,736 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 C. Participants As of the actuarial valuation dated January 1, 2011, participants consisted of: Retired participants and beneficiaries currently receiving benefits11 Active employees69 Waiving Coverage62 Total142 Participating employers1 D. Funding Policy The additional cost of using a blended rate for actives and retirees is currently funded on a pay- as-you-go basis. The City Council may change the funding policy at any time. E. Annual OPEB Costs and Net OPEB Obligation The City’s annual other post employment benefit (OPEB) cost is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The net OPEB obligation as of December 31, 2013, was calculated as follows: Annual required contribution (ARC)$72,372 Interest on net OPEB obligation23,653 Adjustment to ARC(34,196) Annual OPEB cost61,829 Contributions made during the year(37,196) Increase in net OPEB obligation24,633 Net OPEB obligation - beginning of year591,320 Net OPEB obligation - end of year$615,953 For the governmental activities, other post employment benefits are generally liquidated through the General Fund. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan and the net OPEB obligation for 2011 to 2013 was as follows: Percentage of Fiscal YearAnnual OPEBEmployer Annual OPEB CostNet OPEB EndedCostContributionsContributedObligation December 31, 2011$59,654$28,46447.7%$562,074 December 31, 201260,78031,53551.9%591,319 December 31, 201361,82937,19660.2%615,953 F. Funded Status and Funding Progress The City currently has no assets that have been irrevocably deposited in a trust for future health benefits; therefore, the actuarial value of assets is zero. The funded status of the Plan was as follows: Unfunded ActuarialActuarialUAAL as a ActuarialActuarialAccruedAccruedFundedCoveredPercentage of ValuationValue of AssetsLiability (AAL)*Liability (UAAL)RatioPayrollCovered Payrol Date(a)(b)(b-a)(a/b)(c) ( (b-a) / c) anuary 1, 2011$ - $616,348$616,3480.0%$8,186,0317.5% J *Using the projected unit credit actuarial cost method. G. Actuarial Methods and Assumptions Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality and the health care cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions (ARC) of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to financial statements, presents multi-year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effect of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the January 1, 2011 actuarial valuation, the Projected Unit Credit Actuarial cost method was used. The actuarial assumptions included a 4.0% investment rate of return (net of administrative expenses) and an initial annual health care cost trend rate of 10% reduced by 0.5% each year to arrive at an ultimate health care cost trend rate of 5.0%, which includes a 3% inflation assumption. The actuarial value of assets was $0. The plan’s unfunded actuarial accrued liability is being amortized using the level percentage of projected payroll method over 30 years on a closed basis. The remaining amortization period at December 31, 2013, was 27 years. 10. Interfund Receivables, Payables and Transfers Interfund payables and receivables are representative of lending/borrowing arrangements to cover deficit cash balances at the end of the fiscal year. Interfund receivables and payables of the City are as follows: InterfundInterfund ReceivablesPayables Due From/Due To: Major Funds: General Fund$97,712$ - Nonmajor Governmental Funds: Special Revenue Funds: Police Activity Fund - 97,712 $97,712$97,712 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Interfund receivables and payables of the HRA component unit at December 31, 2013 are as follows: InterfundInterfund ReceivablesPayables Due From/Due To: General Fund$7,005,931$ - Capital Projects Funds: Lake Pointe - 325,303 Gateway East - 661,653 Gateway West - 670,109 57th Avenue Redevelopment - 38,760 Housing Replacement - 600,000 Gateway Northeast - 4,388,173 #20 BAE - 33,000 #20 - BAE Hazardous Subs - 284,933 #22 Northstar - 4,000 $7,005,931$7,005,931 The above balances are not expected to be eliminated within one year of December 31, 2013. Interfund Transfers: Transfer InTransfer Out Governmental Funds: Major Funds: General Fund (1) (4) (5) (6)$641,000$145,052 Special Assessment Debt Service (1) - 350,000 Capital Improvements (2) - 800,000 Special Assessment Construction Capital Projects (2) (6)800,00041,000 Nonmajor Funds (1)20,052 - Total governmental funds1,461,0521,336,052 Internal Service Funds: Employee Benefit (3) - 125,000 Info Systems (3) (5)250,000 - Proprietary Funds: Liquor (4) - 250,000 Total$1,711,052$1,711,052 (1) Transfer of $350,000 to finance General Fund and $20,052 to finance nonmajor funds (2) Transfer City portion of various street repairs (3) Transfer of expenditures related to laserfiche purchase (4) Annual transfer to finance General Fund (5) Transfer of expenditures related to equipment and program costs (6) Transfer to allocate staff costs CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 During 2012, the HRA Component Unit had a transfer of $262,907 related to the closure of the Winfield Fund to the Gateway West Fund. Interfund transfers allow the City and HRA to allocate financial resources to the funds that receive benefit from services provided by another fund. Most of the interfund transfers fall under that category. 11. Fund Balance A. CLASSIFICATIONS At December 31, 2013, a summary of the governmental fund balance classifications are as follows: Special Assessment DebtConstructionCapital OtherTotalComponent General FundServiceCapital ProjectsImprovementsGovernmentalCityUnit Nonspendable: Inventory$50,366$ - $ - $ - $ - $50,366$ - Mortgage loan receivable - - - - - 900,651 Total nonspendable50,366000050,366900,651 Restricted for: Donations40,012 - - - 7,00047,012 - Unspent bond proceeds - - - - - - - Debt service - 2,051,454 - - - 2,051,454 - Tax increment - - - - - 1,264,931 Cable television equipment - - - - 72,64072,640 - Police forfeitures - - - - 102,570102,570 - Total restricted40,0122,051,45400182,2102,273,6761,264,931 Committed to: Cable televitsion programming - - - - 1,311,2141,311,214 - Recycling programs - - - - 78,58378,583 - Nature Center activities - - - - 53,71253,712 - Public improvements - - 579,070 - - 579,070 - Capital equipment - - - - 102,365102,365 - Housing loan program - - - - - - 3,027,312 Total committed00579,07001,545,8742,124,9443,027,312 Assigned to: - Capital improvements - 5,715,275 - 5,903,560 - 11,618,835 - Total assigned05,715,27505,903,560011,618,8350 Unassigned7,997,036 - - - (98,566)7,898,4705,214,298 Total$8,087,414$7,766,729$579,070$5,903,560$1,629,518$23,966,291$10,407,192 B. MINIMUM UNASSIGNED FUND BALANCE POLICY The City Council has formally adopted a policy regarding the minimum unassigned fund balance for the General Fund. The most significant revenue source of the General Fund is property taxes. This revenue source is received in two installments during the year – June and December. As such, it is the City’s goal to begin each fiscal year with sufficient working capital to fund operations between each semi-annual receipt of property taxes. The City’s policy for unassigned funds in the General Fund is equal to 35% - 50% of the following year General Fund expenditures. At December 31, 2013, the unassigned fund balance of the General Fund was $7,997,036, compared to its targeted unassigned fund balance of between $5,265,555 and $7,522,222. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 12. Tax Increment Districts The HRA is the administering authority for the following Tax Increment Districts: FiscalRetained YearTax Capacity ValuesDisparityBy EstablishedDistrictDistrict NameCurrentOriginalCapturedAdjustmentsAuthority 19856 Lake Pointe$936,604$326,940$609,664$ - $609,664 19899 Onan/Old Central Ave354,241 42,909 311,332 - 311,332 199211 University/Osborne77,248 26,478 50,770 - 50,770 199212 McGlynn's69,768 41,254 28,514 - 28,514 199513 Satellite Lane Apartments35,292 1,438 33,854 - 33,854 199716 57th Ave Replacement26,750 7,301 19,449 - 19,449 200017 Gateway East30,426 3,468 26,958 - 26,958 200718 Gateway West11,604 2,819 8,785 - 8,785 200719 Main Street165,914 45,628 120,286 - 120,286 1995HR1/Q2Housing Replacement1,563 191 1,372 1,372 1995HR1/Q3Housing Replacement1,371 236 1,135 1,135 1995HR1/Q4Housing Replacement4,051 469 3,582 - 3,582 1995HR1/S3Housing Replacement1,703 310 1,393 - 1,393 1995HR1/S4Housing Replacement2,069 338 1,731 - 1,731 1995HR1/S5Housing Replacement1,268 225 1,043 - 1,043 1995HR1/S6Housing Replacement1,471 266 1,205 - 1,205 1995HR1/T7Housing Replacement1,941 384 1,557 - 1,557 1995HR1/V9Housing Replacement596 596 - - - 1995HR1/W1Housing Replacement1,384 357 1,027 - 1,027 1995HR1/W2Housing Replacement914 286 628 - 628 1995HR1/W6Housing Replacement315 315 - - - Totals$1,726,493$502,208$1,224,285$0$1,224,285 13. Commitments and Contingencies A. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. During 1987, the City established the Self Insurance Fund (an Internal Service Fund) to account for and finance its uninsured risks of loss. Workers compensation coverage is provided through a pooled self-insurance program through the League of Minnesota Cities Insurance Trust (LMCIT). The City pays an annual premium to the LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through Workers Compensation Reinsurance Association (WCRA) as required by law. For workers compensation, the City is subject to a $2,500 deductible. Property and casualty insurance coverage is provided through a pooled self-insurance program through LMCIT. The City pays an annual premium to the LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through commercial companies for claims in excess of various amounts. For property (other than vehicles for which the City is self-insured) and casualty coverage, the City has a $75,000 deductible per occurrence with a $150,000 annual maximum. This deductible gets paid out of the Self-Insurance Fund as necessary. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 The City continues to carry commercial insurance for all other risks of loss, including employee health and disability insurance. There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years. In 1990, the General Fund contributed $1,000,000 to the Self Insurance Fund in lieu of the Self Insurance Fund charging losses back to each fund. There is no recorded liability for unpaid claims because the amount of such claims, if any, is considered to be immaterial. As of December 31, 2013, the Self Insurance Fund has accumulated equity in the amount of $1,378,686 to cover future claims and losses. B. Litigation The City attorney has indicated that existing and pending lawsuits, claims and other actions in which the City is a defendant are either covered by insurance; of an immaterial amount; or, in the judgment of the City attorney, remotely recoverable by plaintiffs. C. Federal and State Funds The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and are subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31, 2013. D. Tax Increment Districts The City’s tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they are not aware of any instances of noncompliance which would have a material effect on the financial statements. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 E. Contingent Liability The HRA entered into various limited tax increment revenue notes with developers whereby the HRA shall pay the developers 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. The HRA has issued various Tax Increment Revenue Notes. These notes are not a general obligation of the HRA and are payable solely from available tax increments. Accordingly, these notes are not reflected in the financial statements of the HRA. A schedule of outstanding notes at December 31, 2013 is as follows: Original InterestMaturity Outstanding NotePrincipalRateDateBalance 12/31/13 Medtronic$10,000,0006.75%August 1, 2025$2,418,539 TIF #191,500,0007.00%February 1, 20251,528,050 Hazardous Substance4,500,0003.50%June 1, 20334,215,067 F. Construction Commitments At December 31, 2013, the City had construction project contracts in progress. The commitments related to the remaining contract balances amounted to $380,066. 14. Leases A. Lease Expense The City leases space for one of its liquor stores. Total costs for this lease was $133,714 for the year ended December 31, 2013. The future minimum lease payments for this lease are as follows: Year Ending December 31,Amount 2014$126,778 2015126,778 2016126,778 2017126,778 2018105,649 Total$612,761 CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 B. Lease Revenue The City receives revenue from agreements for the lease of space above its water towers to communication companies. The space is used for antennas and other equipment necessary to provide radio communications. For accounting purposes, the leases are considered operating leases. Lease revenue for the year ended December 31, 2013, totaled $290,889. Terms of each lease are as follows: Annual Lease AdjustmentExpirationRenewal LesseeFactor*DateOptions T-Mobile-CommonsGreater of 2% or CPI up to 5%07/01/154 Five Year Renewals T-Mobile Highway 65Greater of 3% or CPI12/31/161 Five Year Renewals T-Mobile - Marion HillsGreater of 2% or CPI up to 5%09/01/174 Five Year Renewals AT&T - GarageGreater of 5% or CPI12/01/134 Five Year Renewals AT&T - Marion HillsGreater of 5% or CPI06/30/153 Five Year Renewals Sprint - Highway 65Greater of 5% or CPI09/30/153 Five Year Renewals Crown Castle - Well #13Greater of 5% or CPI09/30/132 Five Year Renewals ClearWire Legacy-Marion HillsGreater of 4% or CPI08/01/154 Five Year Renewals ClearWire Legacy-Hwy65Greater of 4% or CPI08/01/154 Five Year Renewals ClearWire Legacy-CommonsGreater of 4% or CPI06/01/154 Five Year Renewals TTM Operating Corp-CommonsGreater of 3% or CPI04/01/154 Five Year Renewals TTM Operating Corp-Hwy65Greater of 3% or CPI08/01/154 Five Year Renewals Metropolitan CouncilN/A12/31/134 One Year Renewals *Amounts for future lease receipts are unavailable because they are based on the Consumer Price Index. 15. Conduit Debt Obligation From time to time, the City has issued Industrial Revenue Bonds to provide financial assistance to private-sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private-sector entity served by the bond issuance. Neither the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2013, there were 31 series of Industrial Revenue Bonds issued. The aggregate principal amount payable for the eight series issued after July 1, 1995 is $12,558,824. The aggregate principal amount payable for the twenty-two series issued prior to July 1, 1995, could not be determined; however, their original issue amounts totaled $65.2 million. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 16. Deficit Fund Balances At December 31, 2013, individual funds with a deficit fund balance are as follows: Primary government: Non major Special Revenue Fund: Police Activity$97,712 Grant Management854 Component unit: Lake Pointe447,886 Gateway East649,547 Gateway West631,206 57th Avenue Redevelopment28,679 TIF #193,346 Gateway NorthEast4,130,712 #20 BAE32,220 #20 - BAE Hazardous Subs286,132 #22 Northstar3,841 17. Contingent Receivable In 1999, the HRA entered into an agreement with Medtronic for the sale of land from the HRA to Medtronic. The original principal amount of the receivable was $5,000,000 and the outstanding balance at December 31, 2013 is $4,085,515. Interest is added quarterly at a rate of 8.25%. Payments on the note receivable are made in an amount equal to 11.11% of tax increment note payments received by Medtronic through 2013, and 22.22% of tax increment note payments receivable from 2013 through 2026. 18. Change in Accounting Principle For the year ended December 31, 2013, the City implemented GASB Statements No. 61 and 65. GASB Statement No. 61, The Financial Reporting Entity: Omnibus – An Amendment of GASB No. 14 and No.34 modifies certain requirements for inclusion of component units in the financial reporting entity and also amends the criteria for reporting component units as if they were part of the primary government (i.e. blending). GASB Statement No. 65, Items Previously Reported as Assets and Liabilities resulted in accounts previously presented as liabilities being reclassified as deferred inflows of resources. CITY OF FRIDLEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 19. Recently Issued Accounting Standards The Governmental Accounting Standards Boards (GASB) recently approved the following statements which were not implemented for these financial statements: City Implementation Upcoming GASB Statements Required By Statement No. 67 Financial Reporting for Pension Plans – An amendment 2014 of GASB Statement No. 25. Statement No. 68 Financial Reporting for Pensions – An amendment of 2015 GASB Statement No. 27. Statement No. 69 Government Combinations and Disposal of Government 2014 Operations. Statement No. 70 Financial Reporting for Nonexchange Financial 2014 Guarantees. Statement No. 71 Pension Translation for Contributions Made Subsequent 2015 to the Measurement Date – An amendment of GASB Statement No. 68. Statement No. 68 (2015) will require for the first time the City to record a liability for its proportionate share of the net pension liability of cost-sharing multi-employer pension plans (i.e., PERA). REQUIRED SUPPLEMENTARY INFORMATION Exhibit B-1 Page 1 of 4 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2013 With comparative actual amounts for the year ended December 31, 2012 2013 Variance with Final Budget - 2012 Budgeted AmountsActualPositiveActual OriginalFinalAmounts(Negative)Amounts Revenues: Taxes and special assessments: Current ad valorem taxes$9,972,346$9,972,346$9,982,736$10,3909,585,780 Delinquent ad valorem taxes-net of abatements100,000100,000(223,035)(323,035)22,530 Penalties and interest25,00025,00027,5882,58833,184 Special assessments44,10044,10030,765(13,335)39,851 Total taxes and special assessments10,141,44610,141,4469,818,054(323,392)9,681,345 Licenses and permits: Licenses: Rental150,000150,000170,78120,781163,495 Business86,90086,90074,956(11,944)84,689 All other30,00030,00029,280(720)33,540 Permits533,250533,250583,29350,043570,252 Total licenses and permits800,150800,150858,31058,160851,976 Intergovernmental revenue: Federal grants62,000109,13557,373(51,762)111,940 State maintenance aid330,000330,000361,54831,548347,539 State credits - - (47)(47)1,802 Local grants - 2,7852,110(675)3,500 Other state grants43,78254,50033,715(20,785)25,842 Police and fire pension370,300370,300455,10784,807384,155 Total intergovernmental revenue806,082866,720909,80643,086874,778 Charges for services: General government1,440,6001,455,9551,438,486(17,469)1,411,283 Public safety287,752300,352381,74581,393314,727 Public works38,00038,00015,560(22,440)7,886 Community development11,50011,50018,6847,1847,833 Recreation216,900216,900224,9438,043230,347 Total charges for services1,994,7522,022,7072,079,41856,7111,972,076 Fines and forfeits155,000155,000180,81525,815170,427 Investment income: Interest and dividends54,60054,60082,06682,06681,324 Net change in the fair market value of investments - - (115,992)(170,592)(85) Total investment income54,60054,600(33,926)(88,526)81,239 Miscellaneous revenue: Insurance and other reimbursements67,20069,375106,73237,357149,408 Gambling tax52,50052,50057,7885,28861,124 Donations - 22,26832,2309,96248,390 Miscellaneous41,30041,30066,30825,00812,466 Total miscellaneous revenue161,000185,443263,05877,615271,388 Total revenues14,113,030 14,226,066 14,075,535 (150,531)13,903,229 Exhibit B-1 Page 2 of 4 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2013 With comparative actual amounts for the year ended December 31, 2012 2013 Variance with Final Budget - 2012 Budgeted AmountsActualPositiveActual OriginalFinalAmounts(Negative)Amounts Expenditures: General government: City management: Mayor and council: Current: Personal services$97,868$97,868$96,391$1,477$92,558 Supplies and other charges30,32028,38827,80758128,315 Total mayor and council128,188126,256124,1982,058120,873 City manager: Current: Personal services237,408195,046175,40119,645223,782 Supplies and other charges56,14174,52281,976(7,454)61,418 Total city manager293,549269,568257,37712,191285,200 Human resources: Current: Personal services191,255191,255196,648(5,393)189,110 Supplies and other charges18,45717,7098,0369,6739,571 Total human resources209,712208,964204,6844,280198,681 Legal: Current: Supplies and other charges423,990422,378402,38419,994402,952 Total city management1,055,4391,027,166988,64338,5231,007,706 Finance: Elections: Current: Personal services - - 242(242)38,402 Supplies and other charges6,4606,4565,4241,0323,882 Total elections6,4606,4565,66679042,284 Accounting: Current: Personal services651,731634,000630,4983,502608,573 Supplies and other charges64,38059,88866,534(6,646)64,539 Total accounting716,111693,888697,032(3,144)673,112 Assessing: Current: Personal services206,488202,771203,163(392)184,335 Supplies and other charges7,2216,5364,2142,32213,201 Total assessing213,709209,307207,3771,930197,536 MIS: Current: Personal services214,473214,473222,318(7,845)210,856 Supplies and other charges36,18135,30435,2089657,274 Total MIS250,654249,777257,526(7,749)268,130 City clerk/records: Personal services140,193121,193110,42510,768138,552 Supplies and other charges20,93339,49938,2541,24519,886 Total city clerk/records161,126160,692148,67912,013158,438 Total finance1,348,0601,320,1201,316,2803,8401,339,500 Nondepartmental: Current: Personal services10,00010,000 - 10,00010,966 Supplies and other charges27,60041,67312,72228,95115,569 Total nondepartmental37,60051,67312,72238,95126,535 Exhibit B-1 Page 3 of 4 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2013 With comparative actual amounts for the year ended December 31, 2012 2013 Variance with Final Budget - 2012 Budgeted AmountsActualPositiveActual OriginalFinalAmounts(Negative)Amounts Expenditures: (continued) General government: (continued) Municipal center: Current: Personal services$40,396$40,396$22,703$17,693$22,619 Supplies and other charges223,372222,546205,87016,676208,724 Total municipal center263,768262,942228,57334,369231,343 Total general government2,704,8672,661,9012,546,218115,6832,605,084 Public safety: Police: Police protection: Current: Personal services4,785,4354,876,8074,817,91158,8964,578,675 Supplies and other charges530,378598,629522,68975,940493,565 Captital outlay - 18,5689,9918,5775,467 Total police protection5,315,8135,494,0045,350,591143,4135,077,707 Civil defense: Current: Supplies and other charges19,84620,01820,044(26)17,544 Total police5,335,6595,514,0225,370,635143,3875,095,251 Fire: Fire protection: Current: Personal services1,063,408992,8781,005,149(12,271)1,004,487 Supplies and other charges174,144152,577166,243(13,666)165,817 Capital outlay - - - - - Total fire protection1,237,5521,145,4551,171,392(25,937)1,170,304 Rental inspections: Current: Personal services136,713136,713117,59319,120130,283 Supplies and other charges11,11526,8356,62220,2138,096 Total rental inspections147,828163,548124,21539,333138,379 Total fire1,385,3801,309,0031,295,60713,3961,308,683 Total public safety6,721,0396,823,0256,666,242156,7836,403,934 Public works: Engineering: Current: Personal services492,177492,177504,147(11,970)458,742 Supplies and other charges61,25458,08658,830(744)66,566 Total engineering553,431550,263562,977(12,714)525,308 Public works and parks: Current: Personal services1,725,5041,732,3701,698,38733,9831,613,545 Supplies and other charges1,051,5211,035,0031,005,28929,714871,084 Capital outlay - - 8,636(8,636)5,866 Total public works and parks2,777,0252,767,3732,712,31255,0612,490,495 Total public works3,330,4563,317,6363,275,28942,3473,015,803 Exhibit B-1 Page 4 of 4 CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2013 With comparative actual amounts for the year ended December 31, 2012 2013 Variance with Final Budget - 2012 Budgeted AmountsActualPositiveActual OriginalFinalAmounts(Negative)Amounts Expenditures: (continued) Community development: Building inspection: Current: Personal services256,632280,631273,9546,677251,063 Supplies and other charges64,22660,48463,437(2,953)74,470 Total building inspection320,858341,115337,3913,724325,533 Planning: Current: Personal services$410,494$424,567$433,947($9,380)$365,991 Supplies and other charges54,25068,95846,55722,40180,546 Total planning464,744493,525480,50413,021446,537 Total community development785,602834,640817,89516,745772,070 Parks and recreation: Current: Personal services615,947615,947589,94626,001565,830 Supplies and other charges265,818273,968257,80116,167231,911 Capital outlay - - - - 12,830 Total parks and recreation881,765889,915847,74742,168810,571 Contingency: Current: Supplies and other charges120,000120,000 - 120,000 - Total expenditures14,543,72914,647,11714,153,391493,72613,607,462 Excess (deficiency) of revenues over (under) expenditures(430,699)(421,051)(77,856)343,195295,767 Other financing sources (uses): Transfers in641,000641,000641,000 - 600,000 Transfers out(159,125)(159,125)(145,052)14,073 - Total other financing sources481,875481,875495,94814,073600,000 Net change in fund balance$51,176$60,824418,092$357,268895,767 Fund balance - January 17,669,3226,773,555 Fund balance - December 31$8,087,414$7,669,322 CITY OF FRIDLEY CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE NOTE TO RSI December 31, 2013 A. BUDGETS The General Fund budget is legally adopted on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control is at the expenditure category level. CITY OF FRIDLEY, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF FUNDING PROGRESS - RETIREE HEALTH PLAN For The Year Ended December 31, 2013 Unfunded ActuarialActuarialUAAL as a ActuarialActuarialAccruedAccruedFundedCoveredPercentage of ValuationValue of AssetsLiability (AAL)*Liability (UAAL)RatioPayrollCovered Payroll Date(a)(b)(b-a)(a/b)(c) ( (b-a) / c) January 1, 2011$ - $616,348$616,3480.0%$8,186,0317.5% January 1, 2008$ - $1,910,670$1,910,6700.0%$9,303,57620.5% *Using the projected unit credit actuarial cost method. Note, the first OPEB actuarial valuation was conducted as of January 1, 2008. There is no data available prior to the first valuation. COMBINED, COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES CITY OF FRIDLEY NONMAJOR GOVERNMENTAL FUNDS Exhibit C-1 CITY OF FRIDLEY, MINNESOTA COMBINED BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2013 Total Nonmajor Governmental Special RevenueCapital ProjectFunds 20132012 Assets Cash and investments$1,628,903$102,365$1,731,268$2,687,928 Receivables: Accounts95,349 - 95,34993,165 Taxes10,053 - 10,0539,146 Due from other governments47,559 - 47,55917,371 Total assets$1,781,864$102,365$1,884,229$2,807,610 Liabilities, Deferred Inflows of Resources, and Fund Balance Liabilities: Accounts payable$57,232$ - $57,232$41,809 Contracts payable - - - 131,666 Due to other governments320 - 320147 Due to other funds97,712 - 97,71297,712 Salaries payable26,724 - 26,72419,425 Unearned revenue66,415 - 66,415127,194 Total liabilities248,4030248,403417,953 Deferred inflows of resources: Unavailable revenue6,308 - 6,3086,633 Total deferred inflows of resources6,30806,3086,633 Fund balance: Restricted182,210 - 182,2101,034,373 Committed1,443,509102,3651,545,8741,446,363 Unassigned(98,566) - (98,566)(97,712) Total fund balance1,527,153102,3651,629,5182,383,024 Total liabilities, deferred inflows of resources, and fund balance$1,781,864$102,365$1,884,229$2,807,610 Exhibit C- 2 CITY OF FRIDLEY, MINNESOTA COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For The Year Ended December 31, 2013 With comparative amounts for the year ended December 31, 2012 Special CapitalTotal Nonmajor RevenueProjectGovernmental Funds 20132012 Revenues: Taxes$318,634$ - $318,634$318,168 Licenses and permits265,325 - 265,325252,528 Intergovernmental revenue180,720293,500474,220174,828 Charges for services382,886 - 382,886362,479 Fines and forfeits37,379 - 37,37985,195 Investment income: Interest and dividends12,2937,83120,12419,873 Net change in the fair value of investments(25,401)(10,282)(35,683)(1,774) Miscellaneous18,4887,79626,28450,216 Total revenues1,190,324 298,845 1,489,169 1,261,513 Expenditures: Current: General government636,910 - 636,910647,690 Public safety63,235 - 63,23528,308 Parks and recreation411,839 - 411,839418,518 Debt service - - - 33,581 Capital outlay60,9801,125,4421,186,422608,101 Total expenditures1,172,9641,125,4422,298,4061,736,198 Excess (deficiency) of revenues over (under) expenditures17,360 (826,597)(809,237)(474,685) Other financing sources (uses): Bonds issued - - - 1,280,000 Proceeds from sale of capital assets - 35,67935,67963,445 Transfers in20,052 - 20,05236,819 Total other financing sources (uses)20,052 35,679 55,731 1,380,264 Net change in fund balance37,412 (790,918)(753,506)905,579 Fund balance - January 11,489,741893,2832,383,0241,477,445 Fund balance - December 31$102,365$1,629,518$2,383,024 $1,527,153 CITY OF FRIDLEY NONMAJOR SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for revenues derived from specific taxes or other earmarked revenue sources. They are usually required by statute, charter provision or local ordinance to finance particular governmental functions or activities. Cable TV Fund - This fund receives revenues from the issuance of a franchise agreement with the cable TV provider. These revenues are used for the operation and maintenance of a government access channel. Grant Management Fund – This fund administers grants received from a variety of intergovernmental agencies, which the amounts are restricted. 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 spend on specific activities outlined in the grant. Solid Waste Abatement Fund - This fund receives grants, recycling fees and yard waste fees. These revenues finance the City’s curbside recycling pickup and operation of the yard waste transfer site. Drug and Gambling Forfeiture Fund - This fund receives forfeited property in connection with illegal gambling or drug activity. Pursuant to Minnesota Statutes, the proceeds are disbursed between the investigating agency and the prosecuting agency. Police Activity Fund - This fund is used to track the revenue and expenditures of externally funded police positions. Springbrook Nature Center Fund - This fund was established in 2005 after a $275,000 referendum supporting the Springbrook Nature Center was approved by the voters in November of 2004. The revenues from the annual levy are used for the on-going operation of the nature center and the capital improvement projects required in the park. CITY OF FRIDLEY, MINNESOTA COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS December 31, 2013 GrantSolid Waste AssetsCable TVManagementAbatement Cash and investments$1,321,667$70,509$42,331 Receivables: Accounts67,495 - 27,854 Taxes - - - Due from other governments - 62344,469 Total assets$1,389,162$71,132$114,654 Liabilities, Deferred Inflows of Resources, and Fund Balance Liabilities: Accounts payable$235$369$31,611 Contracts payable - - - Due to other governments - - - Due to other funds - - - Salaries payable5,0735,2024,460 Unearned revenue - 66,415 - Total liabilities5,30871,98636,071 Deferred inflows of resources: Unavailable revenue - - - Total deferred inflows of resources - - - Fund balance: Restricted72,640 - - Committed1,311,214 - 78,583 Unassigned - (854) - Total fund balance1,383,854(854)78,583 Total liabilities, deferred inflows of resources, and fund balance$1,389,162$71,132$114,654 Exhibit C-3 Drug and Gambling Springbrook Nature ForfeiturePolice ActivityCenter Totals Nonmajor Special Revenue Funds 20132012 $123,910$ - $70,486$1,628,903$1,787,332 - - - 95,34993,165 - - 10,05310,0539,146 742 - 1,72547,55917,371 $124,652$0$82,264$1,781,864$1,907,014 $22,082$ - $2,935$57,232$34,496 - - - - 131,666 - - 320320147 - 97,712 - 97,71297,712 - - 11,98926,72419,425 - - - 66,415127,194 22,08297,71215,244248,403410,640 - - 6,3086,3086,633 - - 6,3086,3086,633 102,570 - 7,000182,210207,100 - - 53,7121,443,5091,380,353 - (97,712) - (98,566)(97,712) 102,570(97,712)60,7121,527,1531,489,741 $124,652$0$82,264$1,781,864$1,907,014 CITY OF FRIDLEY, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31, 2013 With comparative totals for the year ended December 31, 2012 GrantSolid Waste Cable TVManagementAbatement Revenues: Taxes$ - $ - $ - Licenses and permits265,325 - - Intergovernmental revenue - 113,41864,039 Charges for services700 - 281,042 Fines and forfeits - - - Investment income: Interest and dividends11,358 - - Net change in the fair value of investments(24,975) - - Miscellaneous - 3057,573 Total revenues252,408113,723352,654 Expenditures: Current: General government170,820114,577351,513 Public safety - - - Parks and recreation - - - Capital outlay - - - Total expenditures170,820114,577351,513 Excess (deficiency) of revenues over (under) expenditures81,588(854)1,141 Other financing sources (uses): Transfers in - - 20,052 Net change in fund balance81,588(854)21,193 Fund balance - January 11,302,266 - 57,390 Fund balance - December 31$1,383,854($854)$78,583 Exhibit C-4 Drug and GamblingSpringbrook ForfeiturePolice ActivityNature Center Totals Nonmajor Special Revenue Funds 20132012 $ - $ - $318,634$318,634$318,168 - - - 265,325252,528 - - 3,263180,720174,828 - - 101,144382,886362,479 37,379 - - 37,37985,195 - - 93512,29315,866 - - (426)(25,401)(332) 500 - 10,11018,48850,216 37,8790433,6601,190,3241,258,948 - - - 636,910647,690 63,235 - - 63,23528,308 - - 411,839411,839418,518 - - 60,98060,980188,955 63,2350472,8191,172,9641,283,471 (25,356)0(39,159)17,360(24,523) - - - 20,05236,819 (25,356)0(39,159)37,41212,296 127,926(97,712)99,8711,489,7411,477,445 $102,570($97,712)$60,712$1,527,153$1,489,741 Exhibit D-1 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - CABLE TV FUND COMPARATIVE BALANCE SHEET December 31, 2013 and 2012 Assets 20132012 Cash and investments$1,321,667$1,375,597 Accounts receivable67,49565,167 Total assets$1,389,162$1,440,764 Liabilities and Fund Balance Liabilities: Accounts payable$235$3,873 Contracts payable - 131,666 Salaries payable5,0732,959 Total liabilities5,308138,498 Fund balance: Restricted72,64072,640 Committed1,311,2141,229,626 Total fund balance1,383,8541,302,266 Total liabilities and fund balance$1,389,162$1,440,764 Exhibit D-2 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - CABLE TV FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2013 With comparative actual amounts for the year ended December 31, 2012 20132012 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Licenses - franchise fee$270,000$268,000$265,325$252,528 Charges for services800700700711 Investment income: Interest and dividends15,00015,00011,35815,344 Net change in the fair value of investments - - (24,975)(322) Miscellaneous200 - - - Total revenues286,000 283,700 252,408 268,261 Expenditures: Current: General government: Personal services145,047147,120152,008141,508 Supplies and other charges25,73523,83518,81227,481 Capital outlay - - - 162,761 Total expenditures170,782 170,955 170,820 331,750 Excess (deficiency) of revenues over (under) expenditures$115,218$112,74581,588(63,489) Fund balance - January 11,302,2661,365,755 Fund balance - December 31$1,383,854$1,302,266 Exhibit D-3 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - GRANT MANAGEMENT FUND COMPARATIVE BALANCE SHEET December 31, 2013 and 2012 Assets 20132012 Cash and investments$70,509$123,220 Due from other governments6238,397 Total assets$71,132$131,617 Liabilities and Fund Balance Liabilities: Accounts payable$369$651 Salaries payable5,2023,772 Unearned revenue66,415127,194 Total liabilities71,986131,617 Fund balance: Unassigned(854) - Total fund balance(854)0 Total liabilities and fund balance$71,132$131,617 Exhibit D-4 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - GRANT MANAGEMENT FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2013 With comparative actual amounts for the year ended December 31, 2012 2013 2012 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Intergovernmental: Federal grants$100,964$101,388$103,529$99,222 State grants6,00013,2899,8898,204 Miscellaneous305465 Total revenues106,964 114,677 113,723 107,891 Expenditures: Current: Community development: Personal services93,789104,373101,82899,720 Supplies and other charges13,17510,30412,7498,171 Total expenditures106,964 114,677 114,577 107,891 Excess (deficiency) of revenues over (under) expenditures$0$0(854) - Fund balance - January 1 - - Fund balance - December 31($854)$0 Exhibit D-5 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - SOLID WASTE ABATEMENT FUND COMPARATIVE BALANCE SHEET December 31, 2013 and 2012 Assets 20132012 Cash and investments$42,331$44,136 Accounts receivable27,854$27,998 Due from other governments44,4698,974 Total assets$114,654$81,108 Liabilities and Fund Balance Liabilities: Accounts payable$31,611$21,709 Salaries payable4,4602,009 Total liabilities36,07123,718 Fund balance: Committed78,58357,390 Total liabilities and fund balance$114,654$81,108 Exhibit D-6 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - SOLID WASTE ABATEMENT FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2013 With comparative actual amounts for the year ended December 31, 2012 20132012 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Intergovernmental revenue: State$64,000$71,935$64,039$65,550 Charges for services283,196280,831281,042271,805 Miscellaneous2,0003,2007,57318,522 Total revenues349,196 355,966 352,654 355,877 Expenditures: Current: General government: Personal services69,21388,48250,79639,133 Supplies and other charges296,314310,956300,717331,677 Total expenditures365,527 399,438 351,513 370,810 Excess (deficiency) of revenues over (under) expenditures(16,331)(43,472)1,141(14,933) Other financing sources: Transfers in34,12536,11620,05236,819 Net change in fund balance$17,794($7,356)21,19321,886 Fund balance - January 157,39035,504 Fund balance - December 31$78,583$57,390 Exhibit D-7 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - DRUG AND GAMBLING FORFEITURE FUND COMPARATIVE BALANCE SHEET December 31, 2013 and 2012 Assets 20132012 Cash and investments$123,910$131,285 Due from other governments742 - Total assets$124,652$131,285 Liabilities and Fund Balance Liabilities$22,082$3,359 Fund balance: Restricted102,570127,926 Total fund balance102,570127,926 Total liabilities and fund balance$124,652$131,285 Exhibit D-8 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - DRUG AND GAMBLING FORFEITURE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2013 With comparative actual amounts for the year ended December 31, 2012 20132012 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Fines and forfeits$ - $62,800$37,379$84,743 Miscellaneous - 500500 - Total revenues - 63,30037,87984,743 Expenditures: Current: Public safety Personal services - 7006871,142 Supplies and other charges - 62,60062,54827,166 Total expenditures - 63,30063,23528,308 Excess (deficiency) of revenues over (under) expenditures$0$0(25,356)56,435 Fund balance - January 1127,92671,491 Fund balance - December 31$102,570$127,926 Exhibit D-9 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - POLICE ACTIVITY FUND COMPARATIVE BALANCE SHEET December 31, 2013 and 2012 Assets 20132012 Total assets$0$0 Liabilities and Fund Balance Liabilities: Due to other funds$97,712$97,712 Fund balance: Unassigned(97,712)(97,712) Total liabilities and fund balance$0$0 Exhibit D-10 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - POLICE ACTIVITY FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2013 With comparative actual amounts for the year ended December 31, 2012 20132012 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Fines and forfeits$ - $ - $ - $452 Expenditures - - - - Excess (deficiency) of revenues over (under) expenditures$0$00452 Fund balance (deficit) - January 1(97,712)(98,164) Fund balance (deficit) - December 31($97,712)($97,712) Exhibit D-11 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - SPRINGBROOK NATURE CENTER FUND COMPARATIVE BALANCE SHEET December 31, 2013 and 2012 Assets 20132012 Cash and investments$70,486$113,094 Receivables: Taxes10,0539,146 Due from other governments1,725 - Total assets$82,264$122,240 Liabilities, Deferred Inflows of Resources, and Fund Balance Liabilities: Accounts payable$2,935$4,904 Due to other governments320147 Salaries payable11,98910,685 Total liabilities15,24415,736 Deferred inflows of resources: Unavailable revenue6,3086,633 Total deferred inflows of resources6,3086,633 Fund balance: Restricted(32,159)3,546 Committed92,87196,325 Total fund balance60,71299,871 Total liabilities, deferred inflows of resources and fund balance$82,264$122,240 Exhibit D-12 CITY OF FRIDLEY, MINNESOTA SPECIAL REVENUE FUND - SPRINGBROOK NATURE CENTER FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2013 With comparative actual amounts for the year ended December 31, 2012 20132012 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Taxes$331,700$331,700$318,634$318,168 Intergovernmental revenue: Local grant - 3,2633,2631,852 Charges for service93,70091,100101,14489,963 Investment income: Interest and dividends - - 935522 Net change in the fair value of investments - - (426)(10) Miscellaneous - 6,79710,11031,229 Total revenues425,400432,860433,660441,724 Expenditures: Current: Parks, recreation and naturalist Personal services339,859337,859334,127343,376 Supplies and other charges70,35880,41877,71275,142 Capital outlay - 61,00060,98026,194 Total expenditures410,217 479,277 472,819 444,712 Excess (deficiency) of revenues over (under) expenditures$15,183($46,417)(39,159)(2,988) Fund balance - January 199,871102,859 Fund balance - December 31$60,712$99,871 CITY OF FRIDLEY NONMAJOR CAPITAL PROJECT FUND The Capital Equipment Fund - is used to account for the purchase and repair of major capital equipment. MAJOR CAPITAL PROJECT FUND The Capital Improvement Fund - is established to provide special accounting for bond proceeds, grants and contributions designated for the acquisition of capital assets. Exhibit E-1 CITY OF FRIDLEY, MINNESOTA CAPITAL PROJECT FUND - CAPITAL EQUIPMENT COMPARATIVE BALANCE SHEET December 31, 2013 and 2012 Assets 20132012 Cash and investments$102,365$900,596 Total assets$102,365$900,596 Liabilities and Fund Balance Liabilities: Accounts payable$ - $7,313 Total liabilities07,313 Fund balance: Restricted - 827,273 Committed102,36566,010 Total fund balance102,365893,283 Total liabilities and fund balance$102,365$900,596 Exhibit E-2 CITY OF FRIDLEY, MINNESOTA CAPITAL PROJECT FUND - CAPITAL EQUIPMENT SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2013 With comparative actual amounts for the year ended December 31, 2012 20132012 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Intergovernmental revenue$243,500$293,500$293,500$ - Investment income: Interest and dividends - - 7,8312,276 Net change in the fair value of investments - - (10,282)289 Miscellaneous - 2,5007,796 - Total revenues243,500 296,000 298,845 2,565 Expenditures: Debt service - - - 33,581 Capital outlay1,065,4001,125,5001,125,442419,146 Total expenditures1,065,400 1,125,500 1,125,442 452,727 Excess (deficiency) of revenues over (under) expenditures(821,900)(829,500)(826,597)(450,162) Other financing sources (uses): Bonds issued - - - 1,280,000 Proceeds from sale of capital assets - 32,20035,67963,445 Total other financing sources (uses) - 32,20035,6791,343,445 Net change in fund balance($821,900)($797,300)(790,918)893,283 Fund balance - January 1893,283 - Fund balance - December 31$102,365$893,283 Exhibit E-3 CITY OF FRIDLEY, MINNESOTA CAPITAL PROJECT FUND - CAPITAL IMPROVEMENT FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2013 With comparative actual amounts for the year ended December 31, 2012 20132012 Budgeted AmountsActualActual OriginalFinalAmountsAmounts Revenues: Taxes$ - $ - ($443)$76 Special assessments - - 417,81251,888 Intergovernmental revenue: State823,5001,045,9001,041,7851,599,601 Investment income: Interest and dividends50,95550,94050,16961,026 Net change in the fair value of investments - - (111,941)(1,731) Miscellaneous10,00010,0006,067750 Total revenues884,455 1,106,840 1,403,449 1,711,610 Expenditures: Current: General government: Supplies and other charges - - 82,67949,364 Public safety: Supplies and other charges - 31,85775,038 - Public works: Supplies and other charges - - 1,980 - Parks and recreation: Supplies and other charges40,00040,00045,57235,830 Capital outlay457,500596,500235,093280,261 Total expenditures497,500 668,357 440,362 365,455 Excess of revenues over expenditures386,955438,483963,0871,346,155 Other financing sources (uses): Transfers out(841,000)(841,000)(800,000)(870,000) Transfers in95,000 - - - Total other financing sources (uses)(746,000)(841,000)(800,000)(870,000) Net change in fund balance($359,045)($402,517)163,087476,155 Fund balance - January 15,740,4735,264,318 Fund balance - December 31$5,903,560$5,740,473 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 employees. Self-Insurance Fund – This fund is used to account for all revenues and expenses associated with the $50,000 deductible in the City’s general liability policy. Information Systems Fund – This fund is used to account for all revenues and expenses associated with maintaining and upgrading the City’s computerized information systems. Exhibit F-1 CITY OF FRIDLEY, MINNESOTA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS December 31, 2013 With comparative totals for December 31, 2012 EmployeeSelfInformation BenefitsInsuranceSystems Totals Assets:20132012 Current assets: Cash and investments$1,100,624$1,375,797$543,278$3,019,699$3,079,034 Accounts receivable - 8,822 - 8,822 - Due from component unit2,427 - - 2,42769 Total current assets1,103,0511,384,619543,2783,030,9483,079,103 Capital assets, at cost: Machinery and equipment - - 1,471,0901,471,0901,462,918 Less: accumulated depreciation - - (1,194,594)(1,194,594)(1,111,685) Net capital assets00276,496276,496351,233 Total assets1,103,0511,384,619819,7743,307,4443,430,336 Liabilities: Current liabilities: Accounts payable4014,9342,1477,4823,191 Due to other governments - 999 - 999 - Payroll deductions payable97,991 - - 97,99195,215 Compensated absences payable - current portion776,529 - - 776,529763,779 Total current liabilities874,9215,9332,147883,001862,185 Noncurrent liabilities: Compensated absences payable186,431 - - 186,431203,972 Total liabilities1,061,3525,9332,1471,069,4321,066,157 Net position: Net investment in capital assets - - 276,496276,496351,233 Unrestricted41,6991,378,686541,1311,961,5162,012,946 Total net position$41,699$1,378,686$817,627$2,238,012$2,364,179 Exhibit F-2 CITY OF FRIDLEY, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS For The Year Ended December 31, 2013 With comparative totals for the year ended December 31, 2012 EmployeeSelfInformationIntra-Activity BenefitsInsuranceSystemsEliminations Totals 20132012 Operating revenues: Charges for services$56,954$149,925$6,456$ - $213,335$291,859 Operating expenses: Personal services56,51610,691 - - 67,20749,410 Supplies and other charges2,099210,82414,559 - 227,482231,876 Depreciation - - 147,354 - 147,354136,123 Total operating expenses58,615221,515161,9130442,043417,409 Operating income (loss)(1,661)(71,590)(155,457)0(228,708)(125,550) Nonoperating revenues: Investment income: Interest and dividends10,27212,0413,111 - 25,42433,014 Net change in the fair value of investment(23,129)(26,313)(7,330)(56,772) s Intergovernmental - - - - - 10,365 Insurance reimbursement - 8,889 - - 8,889200 Total nonoperating revenues(12,857)(5,383)(4,219)0(22,459)43,579 Income (loss) before transfers(14,518)(76,973)(159,676)0(251,167)(81,971) Other financing sources (uses): Transfers in - - 250,000(125,000)125,000 - Transfers out(125,000) - - 125,000 - - Total other financing sources (uses)(125,000) - 250,000 - 125,000 - Change in net position(139,518)(76,973)90,3240(126,167)(81,971) Net position - January 1181,2171,455,659727,303 - 2,364,1792,446,150 Net position - December 31$41,699$1,378,686$817,627$0$2,238,012$2,364,179 Exhibit F-3 CITY OF FRIDLEY, MINNESOTA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For The Year Ended December 31, 2013 With comparative totals for the year ended December 31, 2012 EmployeeSelfInformation BenefitsInsuranceSystems Totals 20132012 Cash flows from operating activities: Receipts from interfund services provided$54,596$141,103$6,456$202,155$291,882 Payment to suppliers(1,698)(207,311)(13,183)(222,192)(236,971) Payment to employees(58,531)(10,691) - (69,222)(84,044) Net cash flows from operating activities(5,633)(76,899)(6,727)(89,259)(29,133) Cash flows from noncapital financing activities: Transfer in - - 250,000250,00059,000 Transfer out(125,000) - - (125,000)(59,000) Net cash flows from noncapital financing activties(125,000)0250,000125,0000 Cash flows from capital and related financing activities: Acquisition of capital assets - - (72,617)(72,617)(196,585) Intergovernmental revenue - - - - 10,365 Insurance reimbursement - 8,889 - 8,889200 Net cash flows from capital and and related financing activities 08,889(72,617)(63,728)(186,020) Cash flows from investing activities: Investment income(12,857)(14,272)(4,219)(31,348)33,014 Net increase (decrease) in cash and cash equivalents(143,490)(82,282)166,437(59,335)(182,139) Cash and cash equivalents - January 11,244,1141,458,079376,8413,079,0343,261,173 Cash and cash equivalents - December 31$1,100,624 $1,375,797 $543,278 $3,019,699 $3,079,034 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) ($1,661)($71,590)($155,457)($228,708)($125,550) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation - - 147,354147,354136,123 Changes in assets and liabilities: Decrease (increase) in receivables(2,358)(8,822) - (11,180)23 Increase (decrease) in payables(1,614)3,5131,3763,275(39,729) Total adjustments(3,972)(5,309)148,730 139,449 96,417 Net cash provided by operating activities($5,633)($76,899)($6,727)($89,259)($29,133) Exhibit F-4 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - EMPLOYEE BENEFITS FUND COMPARATIVE STATEMENT OF NET POSITION December 31, 2013 With comparative totals for December 31, 2012 20132012 Assets: Current assets: Cash and investments$1,100,624$1,244,114 Due from component unit2,42769 Total current assets1,103,0511,244,183 Liabilities: Current liabilities: Accounts payable401 - Payroll deductions payable97,99195,215 Compensated absences payable - current portion776,529763,779 Total current liabilities874,921858,994 Noncurrent liabilities: Compensated absences payable 186,431203,972 Total liabilities1,061,3521,062,966 Net position: Unrestricted41,699181,217 Total net position$41,699$181,217 Exhibit F-5 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - EMPLOYEE BENEFITS FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION For The Year Ended December 31, 2013 With comparative amounts for the year ended December 31, 2012 20132012 Operating revenues$56,954$21,410 Operating expenses: Personal services56,51622,869 Supplies and other charges2,0991,700 Total operating expenses58,61524,569 Operating income (loss)(1,661)(3,159) Nonoperating revenues: Investment income: Interest and dividends10,27214,278 Net change in the fair value of investments(23,129)(495) Total nonoperating revenues(12,857)13,783 Income before transfers(14,518)10,624 Other financing uses: Transfers out(125,000)(59,000) Change in net position(139,518)(48,376) Net position - January 1181,217229,593 Net position - December 31$41,699$181,217 Exhibit F-6 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - EMPLOYEE BENEFITS FUND COMPARATIVE STATEMENT OF CASH FLOWS For The Year Ended December 31, 2013 With comparative amounts for the year ended December 31, 2012 20132012 Cash flows from operating activities: Receipts from interfund services provided$54,596$21,433 Payment to suppliers(1,698)(1,700) Payment to employees(58,531)(57,503) Net cash flows from operating activities(5,633)(37,770) Cash flows from noncapital financing activities: Transfer out(125,000)(59,000) Cash flows from investing activities: Investment income(12,857)13,783 Net increase in cash and cash equivalents(143,490)(82,987) Cash and cash equivalents - January 11,244,1141,327,101 Cash and cash equivalents - December 31$1,100,624 $1,244,114 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) ($1,661)($3,159) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Changes in assets and liabilities: (Increase) decrease in receivables(2,358)23 Increase (decrease) in payables(1,614)(34,634) Total adjustments(3,972)(34,611) Net cash provided by operating activities($5,633)($37,770) Exhibit F-7 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - SELF INSURANCE FUND COMPARATIVE STATEMENT OF NET POSITION December 31, 2013 With comparative amounts for December 31, 2012 20132012 Assets: Current assets: Cash and investments$1,375,797$1,458,079 Accounts receivable8,822 - Total assets1,384,6191,458,079 Liabilities: Current liabilities: Accounts payable4,9342,420 Due to other governments999 - Total liabilities5,9332,420 Net position: Unrestricted1,378,6861,455,659 Total net position$1,378,686$1,455,659 Exhibit F-8 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - SELF INSURANCE FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION For The Year Ended December 31, 2013 With comparative amounts for the year ended December 31, 2012 20132012 Operating revenues: Charges for services$149,925$196,889 Operating expenses: Supplies and other charges210,824217,687 Personal services10,69126,541 Total operating expenses221,515244,228 Operating income (loss)(71,590)(47,339) Nonoperating revenues (expenses): Intergovernmental - 10,365 Investment income: Interest and dividends12,04115,771 Net change in the fair value of investments(26,313)(737) Insurance reimbursement8,889200 Total nonoperating revenues (expenses)(5,383)25,599 Change in net position(76,973)(21,740) Net position - January 11,455,6591,477,399 Net position - December 31$1,378,686$1,455,659 Exhibit F-9 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - SELF INSURANCE FUND COMPARATIVE STATEMENT OF CASH FLOWS For The Year Ended December 31, 2013 With comparative amounts for the year ended December 31, 2012 20132012 Cash flows from operating activities: Receipts from interfund services provided$141,103$196,889 Payment to suppliers(207,311)(218,612) Payment to employees(10,691)(26,541) Net cash flows from operating activities(76,899)(48,264) Cash flows from capital and related financing activities: Intergovernmental revenue -10,365 Insurance reimbursement8,889200 Net cash flows provided from capital and related financing activities8,88910,565 Cash flows from investing activities: Investment income(14,272)15,034 Net increase (decrease) in cash and cash equivalents(82,282)(22,665) Cash and cash equivalents - January 11,458,0791,480,744 Cash and cash equivalents - December 31$1,375,797 $1,458,079 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) ($71,590)($47,339) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Changes in assets and liabilities: (Increase) decrease in receivables(8,822) - Increase (decrease) in payables3,513(925) Total adjustments(5,309)(925) Net cash provided (used) by operating activities($76,899)($48,264) Exhibit F-10 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - INFORMATION SYSTEMS FUND COMPARATIVE STATEMENT OF NET POSITION December 31, 2013 With comparative amounts for December 31, 2012 20132012 Assets: Current assets: Cash and investments$543,278$376,841 Capital assets, at cost: Property and equipment1,471,0901,462,918 Less: accumulated depreciation(1,194,594)(1,111,685) Net capital assets276,496351,233 Total assets819,774728,074 Liabilities: Current liabilities: Accounts payable2,147771 Net position: Net investment in capital assets276,496351,233 Unrestricted541,131376,070 Total net position$817,627$727,303 Exhibit F-11 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - INFORMATION SYSTEMS FUND COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION For The Year Ended December 31, 2013 With comparative amounts for the year ended December 31, 2012 20132012 Operating revenues: Charges for services$6,456$73,560 Operating expenses: Supplies and other charges14,55912,489 Depreciation147,354136,123 Total operating expenses161,913148,612 Operating income (loss)(155,457)(75,052) Nonoperating revenues: Investment income: Interest and dividends3,1114,562 Net change in the fair value of investments(7,330)(365) Total nonoperating revenues(4,219)4,197 Income before transfers(159,676)(70,855) Other financing uses: Transfers in250,00059,000 Change in net position90,324(11,855) Net position - January 1727,303739,158 Net position - December 31$817,627$727,303 Exhibit F-12 CITY OF FRIDLEY, MINNESOTA INTERNAL SERVICE FUND - INFORMATION SYSTEMS FUND COMPARATIVE STATEMENT OF CASH FLOWS For The Year Ended December 31, 2013 With comparative amounts for the year ended December 31, 2012 20132012 Cash flows from operating activities: Receipts from interfund services provided$6,456$73,560 Payment to suppliers(13,183)(16,659) Net cash flows from operating activities(6,727)56,901 Cash flows from noncapital financing activities: Transfer in250,00059,000 Cash flows from capital and related financing activities: Acquisition of capital assets(72,617)(196,585) Cash flows from investing activities: Investment income(4,219)4,197 Net increase in cash and cash equivalents166,437(76,487) Cash and cash equivalents - January 1376,841453,328 Cash and cash equivalents - December 31$543,278$376,841 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) ($155,457)($75,052) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation147,354136,123 Changes in assets and liabilities: Increase (decrease) in payables1,376(4,170) Total adjustments148,730131,953 Net cash provided by operating activities($6,727)$56,901 CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMPONENT UNIT CITY OF FRIDLEY, MINNESOTA BALANCE SHEET - GOVERNMENTAL FUNDS HOUSING AND REDEVELOPMENT AUTHORITY December 31, 2013 GeneralHousing LoanLake Pointe Assets Cash and investments$4,441,177$3,030,413$191,833 Receivables: Accounts50,543 - - Delinquent taxes8,093 - 1,322 Mortgage: Deferred - 955,065 - Allowance for uncollectible accounts - (55,164) - Interest58,633 - - Due from other funds7,005,931 - - Prepaid expenses - 750 - Land held for resale2,348,370 - 69,120 Total assets$13,912,747$3,931,064$262,275 Liabilities, Deferred Inflows of Resources, and Fund Balance Liabilities: Accounts payable$2,986$3,101$314,416 Due to primary government125,431 - - Due to other funds - - 325,303 Total liabilities128,4173,101639,719 Deferred inflows of resources: Unavailable revenue2,356,463 - 70,442 Total deferred inflows of resources2,356,463 - 70,442 Fund balance (deficit): Nonspendable - 900,651 - - Restricted - - Committed - 3,027,312 - Unassigned11,427,867 - (447,886) Total fund balance (deficit)11,427,8673,927,963(447,886) Total liabilities, deferred inflows of resources, and fund balance$13,912,747$3,931,064$262,275 Exhibit G-1 Housing#20A-BAEOther GatewayReplacementGatewayHazardousGovernmental OnanWest#1NorthEast #20 BAESubsFundsTotals Governmental Funds 20132012 $784,992$38,903$745,373$262,126$780$785$400,247$9,896,629$10,036,934 - - - - - - - 50,54372,020 5,214 - - - - - 2,32416,95319,401 - - - - - - - 955,0651,109,620 - - - - - - - (55,164)(57,959) - - - - - - - 58,63371,390 - - - - - - - 7,005,9314,508,825 - - - - - - - 7503,914 255,330135,126379,889360,090 - - - 3,547,9253,378,555 $1,045,536$174,029$1,125,262$622,216$780$785$402,571$21,477,265$19,142,700 $ - $ - $1,235$4,665$ - $1,984$45,446$373,833$375,985 - - - 125,43162,255 - 670,109600,0004,388,17333,000284,933704,4137,005,9314,508,825 0670,109601,2354,392,83833,000286,917749,8597,505,1954,947,065 260,544135,126379,889360,090 - - 2,3243,564,8783,397,956 260,544135,126379,889360,090 - - 2,3243,564,8783,397,956 - - - 900,6511,055,575 784,992 - 144,138 - - - 335,8011,264,9312,042,018 - - - 3,027,3122,853,960 - (631,206) - (4,130,712)(32,220)(286,132)(685,413)5,214,2984,846,126 784,992(631,206)144,138(4,130,712)(32,220)(286,132)(349,612)10,407,19210,797,679 $1,045,536$174,029$1,125,262$622,216$780$785$402,571$21,477,265$19,142,700 Fund balance reported above$10,407,192$10,797,679 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources, and therefore, are not reported in the funds2,023,5112,023,511 Other long-term assets are not available to pay for current-period expenditures and, therefore, reported as unavailable revenue3,564,8783,397,956 Net position of governmental activities$15,995,581$16,219,146 CITY OF FRIDLEY, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS HOUSING AND REDEVELOPMENT AUTHORITY For The Year Ended December 31, 2013 With comparative totals for the year ended December 31, 2012 GeneralHousing LoanLake PointeOnanGateway West Revenues: Tax increment$ - $ - $419,487$281,084$9,220 Property taxes373,036 - - - - Investment income: Interest and dividends18,91913,7941,7468,440291 Net change in the fair value of investments(14,003)(16,077)(1,037)(6,742)(519) Mortgage interest earnings - 40,214 - - - Rental9,603 - - - - Sale of real estate43,914 - - - 90,980 Miscellaneous99,86038,971 - - - Total revenues531,32976,902420,196282,78299,972 Expenditures: Personal services122,629 - - - - Supplies and other charges310,85558,47465,44529,1903,088 Capital outlay - - - 562,040 - Developer assistance - - 357,202 - - Total expenditures433,48458,474422,647591,2303,088 Excess (deficiency) of revenues over (under) expenditures97,84518,428(2,451)(308,448)96,884 Other financing sources: Transfer in2,938,173 - - - 500,000 Transfer out - - - (500,000) - Total other financing sources (uses)2,938,17300(500,000)500,000 Net change in fund balance3,036,01818,428(2,451)(808,448)596,884 Fund balance (deficit) - January 18,391,8493,909,535(445,435)1,593,440(1,228,090) Fund balance (deficit) - December 31$11,427,867$3,927,963($447,886)$784,992($631,206) Exhibit G-2 Housing#20A-BAEOther ReplacementGatewayHazardousGovernmentalIntra-Activity #1NorthEast #20 BAESubsFundsElminations Totals Governmental Funds 20132012 $17,002$ - $ - $ - $271,448$ - $998,241$1,488,534 - - 373,036428,756 - 3,609(1,574) - - 1,339 - 46,56447,332 (3,631)(7,780) - - (2,075) - (51,864)13,536 - - 40,21445,021 - - 9,6039,600 143,843 - - - - - 278,737432,822 821246 - - - - 139,898200,715 161,644(9,108)00270,71201,834,4292,666,316 - - 122,629118,337 25,68637,14132,2205,19979,086 - 646,384556,403 164,077 - - - - - 726,117114,932 - - - 280,93391,651 - 729,786748,154 189,76337,14132,220286,132170,73702,224,9161,537,826 (28,119)(46,249)(32,220)(286,132)99,9750(390,487)1,128,490 - - - - - (3,438,173) - - - (2,938,173) - - - 3,438,173 - - 0(2,938,173)000000 (28,119)(2,984,422)(32,220)(286,132)99,975 - (390,487)1,128,490 172,257(1,146,290) - - (449,587) - 10,797,6799,669,189 $144,138($4,130,712)($32,220)($286,132)($349,612)$0$10,407,192$10,797,679 Amounts reported for governmental activities in the statement of activities (Exhibit A-2) are different because: Net changes in fund balances - total above($390,487)$1,128,490 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds.166,922(233,103) Changes in net position of governmental activities (Exhibit A-2)($223,565)$895,387 CITY OF FRIDLEY, MINNESOTA SUBCOMBINING BALANCE SHEET NONMAJOR CAPITAL PROJECT FUNDS HOUSING AND REDEVELOPMENT AUTHORITY December 31, 2013 With comparative totals for December 31, 2012 GatewayUniversity / McGlynnSatellite Lane EastOsborneBakeriesApts. Assets Cash and investments$12,106$191,830$72,450$71,521 Delinquent taxes receivable - 194 - 1,497 Land held for resale - - - - Total assets$12,106$192,024$72,450$73,018 Liabilities, Deferred Inflows of Resources, and Fund Balance Liabilities: Accounts payable$ - $ - $ - $ - Due to other funds661,653 - - - Total liabilities661,653 0 0 0 Deferred inflows of resources: Unavailable revenue - 194 - 1,497 Total deferred inflows of resources0 194 0 1,497 Fund balance (deficit): Restricted - 191,83072,45071,521 Unassigned(649,547) - - - Total fund balance (deficit)(649,547)191,830 72,450 71,521 Total liabilities, deferred inflows of resources, and fund balance$12,106$192,024$72,450$73,018 Exhibit G-3 57th Avenue #22 Total Nonmajor Capital RedevelopmentTIF #19Northstar Project Funds 20132012 $10,081$42,035$224$400,247$335,363 109524 - 2,3241,558 - - - - - $10,190$42,559$224$402,571$336,921 $ - $45,381$65$45,446$51,537 38,760 - 4,000704,413733,413 38,760 45,381 4,065 749,859 784,950 109524 - 2,3241,558 109 524 0 2,324 1,558 - - - 335,801276,321 (28,679)(3,346)(3,841)(685,413)(725,908) (28,679)(3,346)(3,841)(349,612)(449,587) $10,190$42,559$224$402,571$336,921 CITY OF FRIDLEY, MINNESOTA SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR CAPITAL PROJECT FUNDS HOUSING AND REDEVELOPMENT AUTHORITY For The Year Ended December 31, 2013 With comparative totals for the year ended December 31, 2012 North Area / Center CityUniv. Ind. ParkGateway East Revenues: Tax increment$ - $ - $26,663 Investment income: Interest and dividends - - 58 Net change in the fair value of investments - - - Sale of real estate - - - Miscellaneous - - - Total revenues0026,721 Expenditures: Supplies and other charges12,89733,7102,709 Developer assistance - Capital outlay - Total expenditures12,89733,7102,709 Excess (deficiency) of revenues over (under) expenditures(12,897)(33,710)24,012 Other financing sources: Transfers out - - - Net change in fund balance(12,897)(33,710)24,012 Fund balance (deficit) - January 112,89733,710(673,559) Fund balance (deficit) - December 31$0$0($649,547) Exhibit G-4 University / McGlynnSatellite Lane 57th Avenue #22 Totals Nonmajor Capital OsborneBakeriesApts.RedevelopmentNorthstar TIF #19Project Funds 20132012 $50,814$30,166$39,162$22,549$102,094$ - $271,448$388,538 69817517558175 - 1,339533 (1,037)(519)(519) - - - (2,075)1,683 - - - - - - - - - - - - - - - - 50,47529,82238,81822,607102,2690270,712390,754 5,2563,0664,7062,33210,5693,84179,08638,889 - - - - 91,651 - 91,651103,132 - - - - - - - - 5,2563,0664,7062,332102,2203,841170,737142,021 45,21926,75634,11220,27549(3,841)99,975248,733 - - - - - - - (262,907) 45,21926,75634,11220,27549(3,841)99,975(14,174) 146,61145,69437,409(48,954)(3,395) - (449,587)(435,413) $191,830$72,450$71,521($28,679)($3,346)($3,841)($349,612)($449,587) CITY OF FRIDLEY AGENCY FUNDS Agency Funds account for assets held by a governmental unit in a trustee capacity or as an agent for individuals, private organizations, other governmental units, and/or other funds. Exhibit H-1 CITY OF FRIDLEY, MINNESOTA COMBINING STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS For The Year Ended December 31, 2013 Totals Agency Funds Six Cities Hotel/Motel TaxWatershed 20132012 Assets: Cash and investments$ - $ - $ - $24,631 Receivables: Accounts3,099 - 3,0992,766 Taxes: Delinquent - - - 61 Total assets$3,099$0$3,099$27,458 Liabilities: Due to other governments$3,099$0$3,099$27,458 Exhibit H-2 CITY OF FRIDLEY, MINNESOTA STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For The Year Ended December 31, 2013 BalanceBalance January 1,December 31, 2013AdditionsDeletions2013 Six Cities Watershed Assets: Cash and investments$22,189$ - $22,189$ - Receivables: Taxes: Delinquent6181142 - Total assets$22,250$81$22,331$0 Liabilities: Due to other governments$22,250$67$22,317$ - Hotel/Motel Tax Assets: Cash and investments$2,442$46,423$48,865$ - Receivables: Accounts2,766333 - 3,099 Total assets$5,208$46,756$48,865$3,099 Liabilities: Due to other governments$5,208$51,467$53,576$3,099 Totals Assets: Cash and investments$24,631$46,423$71,054$ - Receivables: Accounts2,766333 - 3,099 Taxes: Delinquent6181142 - Total assets$27,458$46,837$71,196$3,099 Liabilities: Due to other governments$27,458$51,534$75,893$3,099 CITY OF FRIDLEY Statistical Section (Unaudited) This part of the City of Fridley's statistical's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health. ContentsPage Financial Trends152 These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. Revenue Capacity162 These schedules contain information to help the reader assess the factors affecting the City's ability to generate its property tax. Debt Capacity168 These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. Demographic and Economic Information174 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments. Operating Information178 These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The City implemented Statement 34 in 2003; the City has chosen to provide information for that year forward. Ultimately, these schedules will contain information for the last ten years. CITY OF FRIDLEY, MINNESOTA NET POSITION BY COMPONENT Last ten fiscal years (Accrual Basis of Accounting) 200420052006 Governmental activities: Net investment in capital assets$18,305,647$18,458,113$18,635,605 Restricted 1,664,772 1,540,531 1,591,936 Unrestricted 11,735,908 13,331,115 15,140,831 Total governmental activities net position$31,706,327$33,329,759$35,368,372 Business-type activities: Net investment in capital assets$14,528,247$16,454,772$17,354,621 Restricted - - - Unrestricted11,814,6499,258,9847,955,426 Total business-type activities net position$26,342,896$25,713,756$25,310,047 Primary government: Net investment in capital assets$32,833,894$34,912,885$35,990,226 Restricted 1,664,772 1,540,531 1,591,936 Unrestricted 23,550,557 22,590,099 23,096,257 Total primary government net position$58,049,223$59,043,515$60,678,419 Table 1 2007200820092010201120122013 $18,245,265$17,490,936$16,141,958$15,546,219$14,554,639$14,139,656$13,842,497 2,193,4101,711,255 2,790,220 3,401,776 3,392,382 3,294,952 3,050,204 18,845,00617,244,490 20,276,252 21,293,470 23,020,467 $24,238,798$24,551,730 $37,201,010$38,529,352$39,208,430$40,241,465$40,967,488$41,673,406$41,444,431 $16,951,085$16,381,443$15,036,932$15,105,503$14,342,934$13,560,980$12,910,117 - - - - - - - 7,722,4587,869,1858,308,0787,647,8487,387,6348,235,9488,417,085 $24,673,543$24,250,628$23,345,010$22,753,351$21,730,568$21,796,928$21,327,202 $35,196,350$33,872,379$31,178,890$30,651,722$28,897,573$27,700,636$26,752,614 2,193,4101,711,255 2,790,220 3,401,776 3,392,382 3,294,952 3,050,204 26,714,19124,966,948 28,584,330 28,941,318 30,408,101 32,474,746 32,968,815 $61,874,553$62,779,980$62,553,440$62,994,816$62,698,056$63,470,334$62,771,633 CITY OF FRIDLEY, MINNESOTA CHANGES IN NET POSITION Last ten fiscal years (Accrual basis of accounting) 200420052006 Expenses Governmental activities: General government$3,513,065$4,448,175$4,177,829 Public safety5,468,0145,514,3306,023,335 Public works3,612,3184,105,8603,868,517 Community Development602,335793,8361,118,661 Parks and recreation 993,570767,5991,147,966 Interest on long-term debt544,478443,533397,036 Total governmental activities expenses14,733,78016,073,33316,733,344 Business-type activities: Liquor5,005,1984,919,4584,793,419 Water2,086,5132,070,0322,138,371 Sanitary sewer3,256,3713,570,1133,629,361 Storm water334,906320,596331,039 Total business-type activities expenses10,682,98810,880,19910,892,190 Total primary government expenses$25,416,768$26,953,532$27,625,534 Program revenues Governmental activities: Charges for services: General government$1,032,130$1,263,265 1,443,361 Public safety$539,334$569,993 609,721 Public works$286,165$189,766 197,968 Community Development$441,649$599,870 470,733 Parks and recreation $369,736$331,298 346,382 Operating grants and contributions1,009,8611,121,7261,304,510 Capital grants and contributions882,2921,657,1061,919,108 Total governmental activities program revenues4,561,1675,733,0246,291,783 Business-type activities: Charges for services: Liquor5,376,4285,283,2295,136,029 Water1,763,6231,771,8461,929,573 Sanitary sewer3,248,9523,299,9573,345,017 Storm water381,360384,860391,032 Operating grants and contributions208600514 Capital grants and contributions - - - Total business-type activities program revenues10,770,57110,740,49210,802,165 Total primary government program revenues$15,331,738$16,473,516$17,093,948 Table 2 Page 1 of 2 2007200820092010201120122013 $4,074,480$3,646,436$3,324,698$3,272,470$3,321,402$3,155,983$3,434,479 6,260,8066,774,6106,847,5716,756,6986,720,6416,999,5547,101,331 4,208,7654,771,7485,065,1785,916,7765,023,0805,420,2715,928,331 863,8501,479,4551,036,549966,909973,198880,414935,716 1,312,5021,303,0631,605,3061,521,1061,387,1331,355,5711,456,841 416,850377,884342,555268,892263,075232,318218,610 17,137,25318,353,19618,221,85718,702,85117,688,52918,044,11119,075,308 4,920,5114,937,7764,654,8114,542,1804,568,2824,354,9094,148,447 2,279,0342,378,1012,423,1292,438,3992,688,8462,647,1762,815,588 3,798,0534,065,8994,350,5764,617,9914,750,4674,653,4344,974,525 381,944373,989399,349421,630785,861602,923587,036 11,379,54211,755,76511,827,86512,020,20012,793,45612,258,44212,525,596 $28,516,795$30,108,961$30,049,722$30,723,051$30,481,985$30,302,553$31,600,904 $1,468,699$1,600,769$1,733,160$1,755,123$1,886,783$1,979,737$2,025,108 709,209759,892690,115717,003796,308862,584864,435 49,39964,04223,03466,938378,14228,14499,289 656,674510,908523,508501,897570,685554,129582,280 381,432376,621347,044364,093325,682369,899326,067 930,593818,805930,765939,1231,148,3151,030,8871,095,724 834,7482,078,5721,476,9891,952,9341,374,6511,564,1461,747,303 5,030,7546,209,6095,724,6156,297,1116,480,5666,389,5266,740,206 5,252,9105,275,4674,973,0004,855,8804,893,4364,705,5234,308,791 1,990,0472,110,6212,419,4002,390,8362,418,2262,773,1012,788,146 3,461,6153,873,8063,784,0004,052,8004,245,6544,549,2544,572,798 392,016404,562457,862421,815457,083571,707613,818 - - - - - - 50,000 - - - - - - - 11,096,58811,664,45611,634,26211,721,33112,014,39912,599,58512,333,553 $16,127,342$17,874,065$17,358,877$18,018,442$18,494,965$18,989,111$19,073,759 CITY OF FRIDLEY, MINNESOTA CHANGES IN NET POSITION Last ten fiscal years (Accrual basis of accounting) 200320042005 Net (expense) revenue: Governmental activities($10,172,613)($10,340,309)($10,441,561) Business-type activities87,583(139,707)(90,025) Total primary government net (expense) revenue($10,085,030)($10,480,016)($10,531,586) General revenues and other changes in net position Governmental activities: General property taxes$5,816,656$7,428,226$8,253,653 Grants not restricted to programs3,436,4733,365,7392,623,407 Investment earnings413,743511,464998,154 Gain on sale of property6804343,357 Other - -1,603 Transfers - -600,000 Total governmental activities9,667,55211,305,86312,480,174 Business-type activities: Investment earnings146,248168,445281,316 Gain on Sale of Property - -5,000 Other - - - Transfers - -(600,000) Total business-type activities146,248168,445(313,684) $9,813,800$11,474,308$12,166,490 Total primary government Change in net position: Governmental activities($505,061)$965,554$2,038,613 Business-type activities233,83128,738(403,709) Total primary governmen($271,230)$994,292$1,634,904 t Table 2 Page 2 of 2 2007200820092010201120122013 ($12,106,499)($12,143,587)($12,497,242)($12,405,740)($11,207,963)($11,654,585)($12,335,102) (282,954)(91,309)(193,603)(298,869)(779,057)341,143(192,043) ($12,389,453)($12,234,896)($12,690,845)($12,704,609)($11,987,020)($11,313,442)($12,527,145) $8,986,924$9,068,718$9,175,888$10,141,119$10,126,395$10,654,542$11,003,455 3,152,4213,240,0813,390,6332,718,9791,095,4701,030,1231,033,814 1,111,116687,66596,817208,565347,184269,240(216,821) 59,438(24,802)12,98220,11214,93756,59835,680 29,238267 - - - - 600,000500,000500,000350,000350,000350,000250,000 13,939,13713,471,92913,176,32013,438,77511,933,98612,360,50312,106,128 245,172168,39425,90857,098106,27465,537(52,346) 1,278 - (237,923)112 - 9,680 - - - - - - - 24,663 (600,000)(500,000)(500,000)(350,000)(350,000)(350,000)(250,000) (353,550)(331,606)(712,015)(292,790)(243,726)(274,783)(277,683) $13,585,587$13,140,323$12,464,305$13,145,985$11,690,260$12,085,720$11,828,445 $1,832,638$1,328,342$679,078$1,033,035$726,023$705,918($228,974) (636,504)(422,915)(905,618)(591,659)(1,022,783)66,360(469,726) $1,196,134$905,427($226,540)$441,376($296,760)$772,278($698,700) Table 3 Page 1 of 2 CITY OF FRIDLEY, MINNESOTA FUND BALANCES - GOVERNMENTAL FUNDS (1) Last ten fiscal years (Modified accrual basis of accounting) 2004200520062007 General Fund: Reserved$83,822$81,662$77,476$65,528 Unreserved: General fund4,080,0124,020,2853,863,0235,206,778 Designated for employee benefits - - - - Designated for contingencies - - - - Undesignated - - - - Nonspendable - - - - Restricted - - - - Unassigned - - - - Total general fund$4,163,834$4,101,947$3,940,499$5,272,306 All other governmental funds: Reserved for: Long-term receivables$541,244$480,123$415,908$348,441 Public safety1,155,225688,214203,13120,726 Debt service509,547389,197721,8661,214,519 Unreserved, reported in: Special revenue funds541,7481,098,9951,106,6231,189,140 Capital projects funds7,001,3906,881,5236,963,5245,223,563 Debt service5,522,6475,976,8885,991,1026,201,350 Restricted - - - - Committed - - - - Assigned - - - - Unassigned - - - - Total all other governmental funds$15,271,801$15,514,940$15,402,154$14,197,739 (1) The City implemented GASB Statement No. 31 for the fiscal year ended December 31, 2003. Therefore, information for years prior to 2003 is not available. In 2011, the City adopted the provisions of Gorenmental Accounting Standards Board Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. Table 3 Page 2 of 2 200820092010201120122013 $48,561$58,928$59,755$ - $ - $ - 4,538,2244,600,9885,725,464 - - - - - - - - - - - - - - - - - - - - - - - - 65,27166,15250,366 - - - - 20,81040,012 - - - 6,708,2847,582,3607,997,036 $4,586,785$4,659,916$5,785,219$6,773,555$7,669,322$8,087,414 $277,560$ - $ - $ - $ - $ - 25,590 - - - - - 1,564,2171,734,6242,066,732 - - - 1,258,9261,329,6471,407,400 - - - 5,944,5565,056,1485,796,931 - - - 5,976,5115,801,6865,983,425 - - - - - - 2,529,8733,093,3022,233,664 - - - 2,209,0672,328,5832,124,944 - - - 11,108,00311,783,59611,618,835 - - - (98,164)(97,712)(98,566) $15,047,360$13,922,105$15,254,488$15,748,779$17,107,769$15,878,877 CITY OF FRIDLEY, MINNESOTA CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS Last ten fiscal years 200420052006 Revenues: General property taxes$5,809,631$7,397,381$8,220,943 Special assessments300,389550,909691,764 Licenses and permits785,582865,848876,903 Intergovernmental3,207,4822,767,7242,663,909 Charges for services1,533,2531,736,1811,855,177 Fines and forfeits176,878164,104261,535 Earnings on investments325,307411,333828,877 Interest on loan29,25326,30823,213 Other2,085,0692,625,8992,154,656 Total revenues 14,252,844 16,545,687 17,576,977 Expenditures: Current: General government3,155,6174,244,4963,567,503 Public safety5,156,5295,204,5515,821,523 Public works2,608,3162,940,8692,944,911 Community development593,393671,1731,113,543 Parks and recreation960,723737,0941,118,392 Debt service: Principal5,155,0006,095,0001,555,000 Interest 561,045422,366330,431 Bond issuance costs32,96835,99731,742 Capital outlay869,7703,112,7004,452,500 Contingency -907 - Total expenditures 19,093,361 23,465,153 20,935,545 Revenues over (under) expenditures (4,840,517) (6,919,466) (3,358,568) Other financing sources (uses): Refunding bond issues3,920,000 - - Bonds issued -6,450,0002,505,000 Premium/(discount) on bonds issue(10,992)(7,160)(30,720) Proceeds from sale of capital assets - -10,054 Transfers in558,609657,8784,966,400 Transfers out - -(4,366,400) Total other financing sources (uses) 4,467,617 7,100,718 3,084,334 Net change in fund balance($372,900)$181,252($274,234) Debt service as a percentage of noncapital expenditures31.5%32.2%11.6% Debt service as percentage of total expenditures 30.1%27.9%9.2% Table 4 2007200820092010201120122013 $8,927,963$9,052,719$9,072,267$10,178,369$10,113,120$10,732,129$11,024,785 635,817589,790665,038622,100672,929763,920834,120 1,080,787946,285965,363973,9851,085,1001,104,5041,123,635 1,872,6432,742,9813,140,5533,310,6312,853,1712,649,2072,643,728 1,830,4162,015,7962,021,7082,080,3492,206,7642,353,8882,545,908 298,359316,646255,014240,880258,372255,622218,194 920,850560,62974,840176,257297,290236,226(185,473) 19,96216,5476,939 - - - - 2,288,3092,220,2762,043,2521,992,971325,284322,354295,409 18,461,66917,875,106 18,244,974 19,575,542 17,812,030 18,417,850 18,500,306 3,893,9523,338,2283,086,4413,010,8353,165,1113,503,3263,279,657 5,999,5576,323,9106,446,7146,329,3546,284,6586,422,6466,794,524 3,025,1573,406,4683,376,6413,111,9183,061,1003,047,3003,530,939 861,8721,189,033895,057967,487979,042772,070817,895 1,194,2901,366,1541,301,1401,292,7831,195,4101,252,0891,305,158 1,825,0002,075,0002,215,0002,445,000800,000940,000980,000 359,010379,340366,500287,961271,969232,318227,326 42,9869,1391,80145,0942,79947,016 - 3,114,2032,684,9382,144,6491,812,087964,4101,639,7732,536,286 - - - - - - 20,772,21020,316,027 19,833,943 19,302,519 16,724,499 17,856,538 19,471,785 (2,310,541)(2,440,921) (1,588,969) 273,023 1,087,531 561,312 (971,479) - - - - - - - 1,910,0001,915,000 - 1,765,000 - 1,280,000 - - - - 53,163 - - - 58,31313,10136,84516,50015,09663,44535,679 600,0003,926,5632,500,4211,235,467380,000350,000250,000 - (3,380,023)(2,000,421)(885,467) - - (125,000) 2,474,6412,568,313 536,845 2,184,663 395,096 1,693,445 160,679 $127,392$164,100($1,052,124)$2,457,686$1,482,627$2,254,757($810,800) 12.9%13.6%14.6%15.9%6.8%7.0%6.8% 11.0%11.9%13.0%14.4%6.4%6.8%6.2% CITY OF FRIDLEY, MINNESOTA TAX CAPACITY VALUE AND ESTIMATED MARKET VALUE OF TAXABLE PROPERTY Last Ten Fiscal Years Commercial/ FiscalResidentialIndustrialPublicAll YearPropertyPropertyUtilityOther 2004$11,163,343$12,740,016$44,539$3,388,828 200512,619,94812,517,53246,5633,762,125 200614,320,78613,166,65746,8613,833,436 200715,074,00814,500,00846,9534,236,896 200815,334,12615,809,59442,7384,370,011 200914,716,96716,788,86038,6804,455,969 201013,494,27916,457,27537,3084,523,767 201112,175,45215,182,22741,2364,396,579 1 2012 10,246,61414,710,92640,3304,271,859 1 2013 8,713,05313,207,35145,3064,286,829 Source: Continuing Disclosure Document 1 After 2011 the State implemented the Homestead Market Value Exclusion program for residential properties. Beginning in 2012 the HMVE program excludes a portion of the market value prior to the tax calculation. Table 5 Less: TotalFiscalAdjustedTotalEstimatedTax Capacity TaxDisparityTax CapacityDirect TaxMarketas a Percent CapacityContributionValueRateValueof EMV $27,336,726$4,292,061$23,044,66530.248%$2,149,055,100118.62% 28,946,1684,624,09124,322,07733.565%2,278,619,300119.01% 31,367,7404,115,59527,252,14531.941%2,469,670,100115.10% 33,857,8654,587,79428,341,51431.349%2,616,727,300119.46% 35,556,4695,221,35530,303,83230.324%2,701,388,800117.33% 36,000,4765,757,07331,758,13328.640%2,698,943,700113.36% 34,512,6296,128,31830,862,68232.258%2,561,173,300111.83% 31,795,4946,212,40628,088,60536.986%2,352,567,900113.20% 29,269,7295,629,37426,491,81439.615%2,278,659,000110.49% 26,252,5395,373,20223,724,02647.362%2,057,500,500110.66% CITY OF FRIDLEY, MINNESOTA DIRECT AND OVERLAPPING PROPERTY TAX CAPACITY RATES Last ten fiscal years SchoolSchoolSchool FiscalDistrictDistrictDistrict YearCityNo. 11No. 13No. 14 200430.248%21.050%22.833%22.683% 200533.565%21.492%19.993%21.606% 200631.941%20.046%19.571%20.830% 200731.349%19.353%17.183%24.175% 200830.324%16.983%15.942%26.033% 200928.640%18.263%23.411%31.172% 201032.258%19.939%24.398%38.795% 201136.486%24.023%18.596%40.631% 201239.615%23.325%24.024%43.862% 201347.362%26.801%27.449%50.112% Source: Continuing Disclosure Document Notes: (1) Vocational/Technical District #916 is included in District No. 16. (2) Six Cities Watershed District is included with School District No. 11. (3) Rice Creek Watershed District is included with School District No. 13, 14 and 16. (4) Stonybrook Creek Subwatershed is included with School District No. 11 and 14. Table 6 SchoolTotalSchoolSchoolSchoolSchool DistrictSpecialDistrictDistrictDistrictDistrict (1)(2, 4)(3)(3, 4)(1, 3) No. 16No. 11No. 13No. 14No. 16 CountyDistricts 21.421%35.221%7.623%95.446%97.758%97.525%96.346% 16.118%33.080%8.085%96.945%96.329%97.942%92.454% 17.437%32.096%7.411%92.136%92.813%94.072%90.679% 25.779%30.696%6.829%88.666%87.770%94.762%96.366% 26.213%31.078%7.803%86.608%87.135%97.226%97.406% 27.155%32.078%8.783%86.183%92.840%100.601%96.584% 31.654%35.189%9.089%94.964%100.897%115.294%108.153% 33.959%39.884%10.533%113.226%109.392%131.427%124.755% 39.443%41.146%10.176%111.953%114.961%134.799%130.380% 44.440%44.411%14.189%128.022%129.850%152.513%146.841% CITY OF FRIDLEY Table 7 CITY OF FRIDLEY, MINNESOTA PRINCIPAL PROPERTY TAXPAYERS Current year and nine years ago 20132004 Percentage Percentage Taxableof Total CityTaxableof Total City CapacityCapacityCapacityCapacity TaxpayerValueRankValueValueRankValue Medtronic, Inc.$1,792,55816.83%$1,478,52815.41% Target Corporation395,496 2 1.51%686,130 2 2.51% Shamrock Investments531,876 3 2.03%510,152 3 1.87% Cummins Power (Onan)387,262 41.48%334,638 4 1.22% Retail Trust IV (Wal-Mart/Sam's)336,460 5 1.28%309,356 5 1.13% BAE283,118 61.08%N/A10 0.00% Maurice Fillister (Georgetown)244,066 7 0.93%242,267 6 0.89% University Avenue Associates238,944 8 0.91%235,000 7 0.86% Lifetime Fitness196,832 9 0.75%234,474 8 0.86% Riverpointe Apartments187,570 100.71%182,582 9 0.67% Total$4,594,18217.51%$4,213,12715.42% Total All Property$26,252,539$27,336,726 Source: City Assessor Table 8 CITY OF FRIDLEY, MINNESOTA PROPERTY TAX LEVIES AND COLLECTIONS Last ten fiscal years FiscalTaxesCollectionsCollected Within The YearLeviedinFiscal Year of the LevyTotal Collections to Date EndedFor ThePercentageSubsequentPercentage 1 Years Dec. 31Fiscal YearAmountof LevyAmountof Levy 2004$5,958,417$5,784,43897.08%$173,979$5,958,417100.00% 20057,543,3827,394,30498.02%149,0787,543,382100.00% 20068,278,2558,130,76798.22%145,9318,276,69899.98% 20078,772,1498,614,53798.20%154,4118,768,94899.96% 20089,188,5928,958,98697.50%224,2419,183,22799.94% 20099,110,8478,856,38497.21%247,6569,104,04099.93% 20109,707,0759,503,50997.90%191,8909,695,39999.88% 201110,014,0719,897,61098.84%97,0309,994,64099.81% 201210,703,73910,699,02599.96%(45,594)10,653,43199.53% 201311,252,48111,247,94399.96%N/A11,247,94399.96% 1 Includes repayment of property taxes abatements Source: City Finance Department Table 9 CITY OF FRIDLEY, MINNESOTA RATIOS OF OUTSTANDING DEBT BY TYPE Last ten fiscal years Governmental Activities Percentage of EstimatedTotalTotal Percentage FiscalImprovementTax IncrementEquipmentMarket ValuePerBusiness TypePrimaryof PersonalPer YearBondsBondsCertificatesTotalof PropertyCapitaBondsGovernmentIncome (1)Capita 2004$190,000$9,595,000$ - $9,785,0000.46%356$5,405,000$15,190,0002.20%$356 20051,805,0008,335,000 - 10,140,0000.45%3743,815,00013,955,0002.01%374 20064,310,0006,780,000 - 11,090,0000.45%4163,420,00014,510,0002.06%416 20076,065,0005,110,000 - 11,175,0000.43%4203,015,00014,190,0001.99%420 20087,615,0003,400,000 - 11,015,0000.41%4166,440,00017,455,0002.46%416 20097,080,0001,720,000 - 8,800,0000.33%3335,865,00014,665,0002.13%333 20107,570,000 - 550,0008,120,0000.32%2988,160,00016,280,0002.19%298 20116,770,000 - 550,0007,320,0000.31%2667,625,00014,945,0002.01%266 20125,880,000 - 1,780,0007,660,0000.34%2787,070,00014,730,0001.95%275 20134,955,000 - 1,725,0006,680,0000.32%2406,415,00013,095,0001.69%240 (1) Demographic information may be found on Table 14 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements Table 10 CITY OF FRIDLEY, MINNESOTA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT December 31, 2013 Estimated EstimatedShare of DebtPercentageOverlapping 1 Applicable Governmental UnitOutstandingDebt Debt repaid with property taxes: Independent School District No. 11$87,651,5401.60%$1,402,425 Independent School District No. 1318,795,000 31.46%5,912,907 Independent School District No. 1438,450,000 100.00%38,450,000 Independent School District No. 16112,225,000 36.80%41,298,800 Metro Council1,396,829,257 1.19%16,622,268 Anoka County156,865,658 18.04%28,298,565 Vocational/Technical District No. 9163,950,000 2.21%87,295 Subtotal - overlapping debt132,072,260 City of Fridley - Direct debt$6,680,000100.00%6,680,000 Total direct and overlapping debt$138,752,260 Sources: Continuing Disclosure Document 1 Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. Table 11 CITY OF FRIDLEY, MINNESOTA LEGAL DEBT MARGIN INFORMATION Last ten fiscal years Market Value$2,057,500,500 Debt Limit 3% of Market Value$61,725,015 Amount of Debt Applicable to Debt Limit: Total Debt$13,095,000 Deductions: Improvement Bonds4,955,000 Revenue Bonds6,415,00011,370,000 Total Amount of Debt Applicable to Debt Limit1,725,000 Legal Debt Margin$60,000,015 Legal Debt Margin Calculation for the last 10 Fiscal Years Net DebtLegalAmount of Debt FiscalDebtApplicable toDebtApplicable to YearLimitLimitMarginDebt Limit 2004$42,589,016$ - $38,755,9120.00% 200545,168,942 - 42,589,0160.00% 200649,393,402 - 45,168,9420.00% 200752,334,546 - 49,393,4020.00% 200854,027,776 - 52,334,5460.00% 200980,968,311 - 54,027,7760.00% 201076,835,199550,00076,285,1990.72% 201170,577,037550,00070,027,0370.78% 201268,359,7701,780,00066,579,7702.60% 201361,725,0151,725,00060,000,0152.79% Note: State statutes limit the amount of general obligation debt a Minnesota City may issue to 3% of total estimated market value; prior to 2008, the State Statute debt limit was 2%. CITY OF FRIDLEY, MINNESOTA PLEDGED-REVENUE COVERAGE Last ten fiscal years Improvement BondsEquipment Certificates SpecialProperty Debt ServiceDebt Service FiscalAssessmentTax YearCollectionsPrincipalInterestCoverageCollectionsPrincipalInterestCoverage 2004$273,813$90,000$10,3582.73$ - $ - $ - - 2005542,548190,0005,3402.78 - - - - 2006671,204 - 67,4669.95 - - - - 2007602,988155,000160,4231.91 - - - - 2008561,221365,000230,3250.94 - - - - 2009658,406535,000270,0050.82 - - - - 2010555,997725,000252,8990.57 - - - - 2011504,053800,000258,1350.4869,881 - 13,8345.05 2012659,666890,000229,5030.59 70,66850,00013,4501.11 2013376,026925,000198,4130.33 233,74955,00025,7632.89 Table 12 Utility Revenue BondsTax Increment Bonds Utility Less Net Tax Debt ServiceDebt Service ServiceOperatingAvaliableIncrement RevenuesExpensesRevenuePrincipalInterestCoverageCollectionsPrincipalInterestCoverage $5,371,662$5,430,082($58,420)$390,000$334,960-0.08$3,078,426$5,065,000$546,9100.55 5,435,3615,821,541(386,180)1,590,000139,200-0.223,224,2045,905,000417,0260.51 5,648,7205,977,607(328,887)395,000121,164-0.642,649,0201,555,000262,9651.46 5,832,9046,350,572(517,668)305,000108,351-1.253,586,0971,670,000199,4881.92 6,379,9846,631,304(251,320)300,000149,481-0.563,329,2891,710,000149,0151.79 6,611,6116,951,906(340,295)575,000221,449-0.432,016,5801,680,00096,4951.14 6,855,4417,236,513(381,072)515,000241,508-0.501,742,8161,720,00035,0630.99 7,118,1547,952,911(834,757)535,000272,264-1.0369,881 - 13,8345.05 7,864,4067,648,478215,928555,000255,0540.27 - - - - 7,961,7386,839,8521,121,886655,000235,4741.26 - - - - Table 13 CITY OF FRIDLEY, MINNESOTA DEMOGRAPHIC AND ECONOMIC STATISTICS Last ten fiscal years Total Per Capita FiscalUnemploymentPersonalPersonal YearPopulationRateIncomeIncome 200427,4804.8%$691,644,120$25,169 200527,0884.2%695,674,01625,682 200626,6794.2%703,978,77326,387 200726,6034.8%712,747,57626,792 200826,4595.7%708,889,52826,792 200926,4227.9%688,160,99026,045 201027,2087.3%744,138,80027,350 201127,3885.5%742,077,86027,095 201227,7905.6%755,109,88027,172 201327,7854.4%774,145,67027,862 Sources: Metropolitan Council (population), Continuing Disclosure Document (unemployment rate) Table 14 CITY OF FRIDLEY, MINNESOTA PRINCIPAL EMPLOYERS Current year and nine years ago 20132004 Percentage Percentage of Total Cityof Total City EmployerEmployeesRankEmploymentEmployeesRankEmployment Medtronic, Inc.2,693111.99%2,500110.60% 1,51026.72%45.93% Unity Medical Center1,400 Cummins Power (Onan)1,32535.90%1,72737.32% Target75843.37%60052.54% ISD #14 (Fridley Schools)52552.34% 50062.23%62.12% Minco Products500 BAE Systems37571.67%1,80027.63% Wal-Mart28881.28%262101.11% Kurt Manufacturing25091.11%35071.48% Lofthouse Bakery185100.82% 17591.27% Park Construction300 Parsons Electric13030081.27% Total8,71437.44%9,73941.28% Total City Employment22,46123,593 Source: Continuing Disclosure Documents, Minnesota Department of Employment and Economic Development and telephone survey. CITY OF FRIDLEY, MINNESOTA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM Last ten fiscal years Full-Time Equivalent Employees as of December 31, Function/Program2004200520062007 General government: City administration3333 Finance23232322 Human resource2222 Community development88107 Public safety: Police department46464744 Fire department8899 Public works: Administration4442 Engineering2224 Mechanic3333 Streets9999 Water5555 Sewer5555 Parks7777 Parks and recreation: Parks and recreation58118 Total130133140130 Source: City Finance Department 1 Prior to 2013 positions at 32 hours or more per week were counted as 1 full-time equivalent. As of 2013 these figures represent all permanent staff. Table 15 Full-Time Equivalent Employees as of December 31, 1 2013 20082009201020112012 333334.0 221919192018.0 222222.0 977778.2 444542434450.6 888887.8 222221.2 444335.0 333334.5 999999.0 555777.0 555557.0 777555.0 888888.0 131127124124126137.3 CITY OF FRIDLEY, MINNESOTA OPERATING INDICATORS BY FUNCTION/PROGRAM Last ten fiscal years Fiscal Year Function/Program2004200520062007 Police: Physical arrests9561,2051,2921,290 Parking violations644884572792 Traffic violations2,1291,7895,1524,035 Fire: Emergency responses2,4062,7192,5682,804 Fires occurred137107127109 Commercial inspections1,1801,1717844,517 Rental inspections4712962311,176 Refuse collection: Recyclables collected (tons per day)6.706.696.956.96 Building inspection: Permits issued: Residential6247507681,206 Commercial9986115366 Total permit valuation$22,029,469$25,057,537$21,750,596$47,871,624 Other public works: Street resurfacing (miles)1.24.14.83.7 Recreation Springbrook Nature Ctr program participants16,35319,85219,59620,245 Water: Connections8,2888,2328,2358,230 Storage capacity (gallons)6,500,0006,500,0006,500,0006,500,000 Average daily demand (gallons)646,000550,000550,0004,270,000 Peak daily demand (gallons)13,190,00010,000,00010,990,00010,990,000 Sewer: Connections8,2978,2508,2448,238 Sources: Various City departments. No operating indicators were available for the Parks, recreation and naturalist function. Table 16 Fiscal Year 200820092010201120122013 1,3571,3051,3181,1451,1331,344 419382778665283562 4,9942,9342,9292,8602,5902,826 2,8272,8642,7722,9232,9063,003 116141116114121119 1,2391,0218688901,0161,110 7558885977831,1171,145 6.126.475.895.705.815.80 1,4441,5991,9052,2321,6062,191 418386434446386440 $39,105,158$45,564,657$30,441,199$39,902,641$35,763,059$40,697,477 4.14.94.92.23.13.8 20,89420,93723,98724,23124,26623,419 8,2338,2318,2268,2228,2278,230 6,500,0006,500,0006,500,0006,500,0006,500,0006,500,000 4,270,0003,458,4823,014,4253,730,0003,993,2854,227,975 10,800,00019,350,8928,119,2076,622,0008,661,0009,009,000 8,2428,2388,2378,2328,2368,239 Table 17 CITY OF FRIDLEY, MINNESOTA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Last ten fiscal years Fiscal Year Function/Program2004200520062007200820092010201120122013 Police: Stations1111111111 Squad cars12121212121212121212 Fire stations3333333333 Other public works: Streets (miles)125.3125.3125.3125.3125.3125.3125.3125.3125.3125.3 Highways (miles)10.310.310.310.310.310.310.310.310.310.3 Streetlights1,0541,0551,0551,0591,0591,0591,0591,0591,0591,059 Traffic signals35353636363636363636 Parks and recreation: Acreage682682682682682682682682682682 Playgrounds29292929292929292929 Baseball/softball diamonds22222222222222222222 Soccer/football fields2222222222 Community centers1111111111 Water: Water mains (miles)112.9112.9113.0113.0113.0113.0113.0113.0113.0113.0 Fire hydrants9981,0121,0131,0131,0131,0131,0131,0131,0131,013 Storage capacity (million gallons)6.56.56.56.56.56.56.56.56.56.5 Wastewater: Sanitary sewers (miles)103.0103.0103.0103.0103.0103.0103.0103.0103.0103.0 Storm sewers (miles)49.350.052.052.052.052.052.052.052.052.0 Sources: Various City departments.