2015 CAFR
City of Fridley,
Minnesota
CITY OF FRIDLEY, MINNESOTA
Comprehensive Annual Financial Report
December 31, 2015
Prepared by:
Finance Department
Shelly Peterson
Finance Director
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CITY OF FRIDLEY, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED DECEMBER 31, 2015
TABLE OF CONTENTS
EXHIBITPAGE
I. INTRODUCTORY SECTION
Letter of Transmittal3
Certificate of Achievement 11
Elected and Appointed Officials 13
City Administrative Organizational Structure 2015 14
II. FINANCIAL SECTION
Independent Auditor's Report 19
Management's Discussion and Analysis 23
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position A-137
Statement of Activities A-238
Fund Financial Statements:
Balance Sheet - Governmental Funds A-340
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds A-442
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of ActivitiesA-545
Statement of Net Position - Proprietary Funds A-646
Statement of Revenues, Expenses and Changes in Fund Net Position -
Proprietary Funds A-748
Statement of Cash Flows - Proprietary Funds A-850
Statement of Fiduciary Net Position A-952
Notes to Financial Statements 53
Required Supplementary Information:
Budgetary Comparison Schedule - General Fund B-196
Schedule of Funding Progress - Retiree Health Plan B-2100
Schedule of Proportionate Share of Net Pension Liability - General Employees
Retirement Fund B-3101
Schedule of Pension Contributions - General Employees Retirement Fund B-4102
Schedule of Proportionate Share of Net Pension Liability - Public Employees Police
and Fire Fund B-5103
Schedule of Pension Contributions - Public Employees Police and Fire Fund B-6104
Notes to RSI105
CITY OF FRIDLEY, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED DECEMBER 31, 2015
TABLE OF CONTENTS
EXHIBITPAGE
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds C-1110
Combining Statement of Revenues, Expenditures and Changes in Fund Balances -
Nonmajor Governmental Funds C-2111
Subcombining Balance Sheet - Nonmajor Special Revenue Funds C-3114
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Special Revenue Funds C-4116
Subcombining Balance Sheet - Nonmajor Capital Project Funds C-5120
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Capital Project Funds C-6122
Special Revenue Funds:
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual:
D-1126
Cable TV Fund
Springbrook Nature Center Fund D-2127
Grant Management Fund D-3128
Solid Waste Abatement Fund D-4129
Internal Service Funds:
Combining Statement of Net Position E-1132
Combining Statement of Revenues, Expenses and Changes in Net Position E-2133
Combining Statement of Cash Flows E-3134
Housing and Redevelopment Authority(Component Unit):
Balance Sheet - Governmental Funds F-1136
Statement of Revenues, Expenditures and Changes in
Fund Balances - Governmental Funds F-2138
Subcombining Balance Sheet - Nonmajor Capital Project Funds F-3140
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Capital Project Funds F-4142
Agency Funds:
Combining Statement of Assets and Liabilities G-1146
Statement of Changes in Assets and Liabilities G-2147
CITY OF FRIDLEY, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED DECEMBER 31, 2015
TABLE OF CONTENTS
EXHIBITPAGE
III. STATISTICAL SECTION (Unaudited)
Financial Trends:
Net Position by Component Table 1152
Changes in Net Position Table 2154
Fund Balances - Governmental Funds Table 3158
Changes in Fund Balances - Governmental Funds Table 4160
Revenue Capacity:
Tax Capacity Value and Estimated Market Value of Taxable PropertyTable 5162
Direct and Overlapping Property Tax Capacity Rates Table 6164
Principal Property Taxpayers Table 7166
Debt Capacity:
Property Tax Levies and Collections Table 8167
Ratios of Outstanding Debt by TypeTable 9168
Direct and Overlapping Govermental Activities Debt Table 10169
Legal Debt Margin Information Table 11171
Pledged Revenue CoverageTable 12172
Demographic and Economic:
Demographic and Economic Statistics Table 13174
Principal Employers Table 14175
Full-Time Equivalent City Government Employees by Function/Program Table 15176
Operating Information:
Operating Indicators by Function/Program Table 16178
Capital Asset Statistics by Function/Program Table 17180
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I. INTRODUCTORY SECTION
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City of Fridley, 6431 University Avenue NE, Fridley, MN 55432
Finance Department • 763-571-3450 • Fax 763-571-1287 • www.FridleyMN.gov
June 1, 2016
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, 2015, 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.
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CITY OF FRIDLEY, MINNESOTA
ECONOMIC CONDITION AND OUTLOOK
BACKGROUND AND LOCATION
The City of Fridley is a first ring suburban community with an estimated 2015 population
of 28,039. 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 increases over the past year.
New construction continued to remain solid. Total construction was valued at
approximately $60.6 million for 2015. This is about $13.5 million more than 2014. One
significant project was Phase 2 of the Northern Stacks business park which included
razing three-quarters of an existing 2.1 million square foot building to accommodate
global defense and aerospace contractor BAE Systems Inc. This phase of the 122-acred
redevelopment project was valued at $9.4 million. Other significant projects included
Trojan Storage valued at $1.7 million, AR North America’s addition at $1.9 million and
Agro-K’s expansion at $1.1 million. In addition, a new retail building valued at $1.1
million will be bringing several new businesses to our community such as Starbucks, Lee
Ann Chin and AT&T. Continued long-term growth is anticipated as Fridley continues to
aggressively pursue redevelopment opportunities.
The estimated market value for all properties in Fridley increased 3% from January 1,
2015 to January 1, 2016. This increase in valuation is consistent with other municipalities
in the Minneapolis-St. Paul metropolitan area.
MAJOR INITIATIVES
For the Year
2015 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:
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CITY OF FRIDLEY, MINNESOTA
ECONOMIC CONDITION AND OUTLOOK (CONTINUED)
1.The Street Program continued the on-going efforts of resurfacing city streets. The
2015 Street Program included various street sections in the Summit Manor
neighborhood. Once completed this project is anticipated to cost $1 million.
st
2.Technology upgrades were significant with $500,000 invested in 2015. In the 1 half
of 2015 upgrades were completed to the supervisory control and data acquisition
(SCADA) system which provides computerized operations and monitoring of water
filtration plants, wells and lift stations. This project replaces a system that was over
20 years old and has eliminated the need for manual operations during times of
system failure. In addition, during the summer of 2015, the City’s accounting
division went live on a new integrated Enterprise Resource Planning (ERP) software
system replacing a 25 year old financial and utility billing system. This innovative
technology has positioned the City to deliver improved e-government services to
constituents.
3.The City entered its fifth year of a ten to twelve year campaign to replace the City’s
approximately 7,500 manual read water meters with automatic meter reading (AMR)
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. In 2015, the implementation of a new utility
billing system put the project on hold but staff was still able to install just over 500
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meters in the 3 quarter of year.
4.Ground broke in the fall of 2015 on a new interpretive center at the Springbrook
Nature Center. This project, known as the S.P.R.I.N.G (Sanctuary Protection and
Renewal Into Next Generation) Project, is a comprehensive plan to revitalize the
seven acre park entrance and interpretive center at the nature center and will allow the
site to expand its programming, host weddings and events, and continue to provide
world class environmental education to an ever-growing audience. Work continues to
progress with the facility and is expected to open in June 2016.
5.The HRA continued worked on a number of redevelopment projects in 2015.
Demolition of the former Columbia Arena took place in the last half of the year in
preparation for future redevelopment. Building 1 of the Cielo apartment
redevelopment project was completed in the fall of 2015. This project will eventually
contain 254 apartment units in 3 separate buildings. A fast pace continued on the 122
acre former Navy munitions site known as Northern Stacks with the completion of
building 1 of phase 1. In addition, phase 2 was completed with the refurbishing and
remodel of the BAE building.
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CITY OF FRIDLEY, MINNESOTA
ECONOMIC CONDITION AND OUTLOOK (CONTINUED)
For the Future
As Fridley becomes a fully developed community with a stable population, the ability to
maintain, improve, or expand the types of services provided to our residents continues to
evolve and present new challenges. The 2016 budget reflects the changes necessitated by
the City’s maturity, current and future fiscal restraints, and it attempts to respond to
market pressure and citizen-driven requests through certain innovative but fiscally sound
public service policies. One such example in the 2016 budget takes place in the Police
Department. Taking advantage of several retirements in top level positions, the Police
Department eliminated one Captain position and added one Lieutenant position. This
restructuring takes advantage of natural attrition and allows the Department to better
respond to the public safety needs of the community.
The City continues to monitor operational expenditures to achieve cost savings without
negatively impacting service levels. If there was an overarching theme for the 2016
budget it would be focused on maintaining service levels while providing reasonable
compensation to employees. The 2016 General Fund budget does not include any major
new initiatives or services, nor any additional FTE’s. This is not to say that additional
positions are not warranted. In Police and Community Development for example, the
FTE’s were reduced several years ago as a part of an austerity measure. These positions
are needed, but the Levy Limitation prohibits including them in the Budget. Therefore,
trade-offs must be considered. In the end, the decision was made to make sure that
existing employees are adequately compensated before additional positions are added.
In the area of capital equipment, the City has taken a strategic approach to the planning
and acquisition of equipment. Funding sources are designed not to impact the operation
levy. Issuing debt in the form of capital equipment certificates has been eliminated from
the current Capital Improvements Program (CIP) and should not need to be utilized in the
future. We also continue to re-evaluate numerous purchases where extending the useful
life of some capital equipment could be achieved through renovation or reuse.
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.
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CITY OF FRIDLEY, MINNESOTA
FINANCIAL INFORMATION (CONTINUED)
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 departmental level.
Budget adjustments between City divisions are made upon the approval of a resolution by
the City Council. The City Charter provides that the City Council shall not have power
to increase the total amount of the budget, whether by insertion of new items or
otherwise, beyond the estimated revenue unless the actual revenue exceeds such revenue
estimates, and in that event not beyond such actual revenue. There is a constant review
process.
Expenditures are not approved until it has been determined that 1) the expenditure is
necessary, 2) adequate funds have been appropriated, and 3) funds are available.
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 2015, all the funds addressed by this policy, with the exception of
the Water, Sewer and Liquor Enterprise Funds, met the fund balance guidelines. The
Utility Enterprise Funds have implemented multi-year plans to ensure long-term
sustainability. The Water and Sewer Enterprise Funds are expected to meet minimum
fund balance requirements within the next couple years. The Liquor Fund has recently
gone through an extensive revitalization to improve long-term viability. This fund is
expected to meet the minimum fund balance requirements in 2016 and moving forward.
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CITY OF FRIDLEY, MINNESOTA
FINANCIAL INFORMATION (CONTINUED)
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.
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 Redpath and Company, 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, 2014. 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.
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CITY OF FRIDLEY, MINNESOTA
OTHER INFORMATION (CONTINUED)
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, Greg Tirevold, Jean Michaels, and to our
auditors Redpath and Company for their professional guidance. I would also like to
express 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,
Shelly Peterson
Finance Director
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CITY OF FRIDLEY, MINNESOTA
ELECTED AND APPOINTED OFFICIALS
December 31, 2015
ELECTED OFFICIALS
Term of Office
Expires December
MayorScott J.Lund2016
Councilmember At LargeRobert L. Barnette2016
Councilmember, Ward IJames T. Saefke2018
Councilmember, Ward IIDolores M. Varichak2018
Councilmember, Ward IIIAnn R. Bolkcom 2018
APPOINTED OFFICIALS
City ManagerWally Wysopal
City AttorneyDarcy M. Erickson
Prosecuting AttorneyCarl J. Newquist
City ClerkDebra A. Skogen
Department Heads:
Finance Director/TreasurerDarin Nelson
*Shelly Peterson as of
February, 2016
Director of Public Safety and Civil DefenseBrian Weierke
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
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CITY OF FRIDLEY ORGANIZATIONAL STRUCTURE
2015
Total Authorized Full-Time Positions - 132
(Minimum Of 32 Hours A Week)
Revised 11/1/2015
CITY MANAGEMENT (4)
City Manager
Admin Assistant to the City Manager
City Clerk
Communications Specialist (.7 FTE)
Non-General Fund
CABLE TV (1)
Cable TV Administrator
FINANCE (16)POLICE (49)FIRE (6)
Finance Director - TreasurerPublic Safety DirectorFire Chief
AccountantAdministrative AssistantAdministrative Assistant
Receptionist (.5 FTE)Assistant Chief
FIELD OPERATIONS (29)(3) Captains
ACCOUNTING (4)CaptainFire Marshall
Assistant Finance Director(5) Sergeants
Payroll Coordinator(23) Patrol Officers
Accounting Specialist
Acctg-Data Processing ClerkTECHNICAL SUPPORT (18)
Captain
ASSESSING (2)Lieutenant
City Assessor(3) Detectives
AppraiserPawn Detective
Appraiser (.5 FTE)(3) School Resource Officer
Anoka-Henn DTF Sergeant
MIS (2)Special Projects Coordinator
IT ManagerCrime Prevention Specialist
PC TechnicianOffice Supervisor
(5) Police Technicians
(2 FT, 3 @ .8 FTE)
Community Serv Officer
(4 @ .5 FTE)
Non-General Fund
LIQUOR (5)
Liquor Operations Manager
Assistant Operations Manager
(3) Lead Liquor Store Clerks
WATER ADMIN (1)
Utility Billing Clerk
Utility Billing Clerk (.5 FTE)
Receptionist (.5 FTE)
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PUBLIC WORKS (36)PARKS &COMMUNITYHUMAN RESOURCES (2)
RECREATION (8)DEVELOPMENT (10)
Public Works DirectorHuman Resources Director
Admin Assist/Main't CoordParks & Recreation DirectorCommunity DevelopmentAdministrative Assistant
Recreation Office CoordinatorDirector
ENGINEERING (5)(2) Program SupervisorsOffice Coordinator
Asst. Public Works Director Sr Citizens Program Sup
(2) Engineering TechnicianBUILDING INSPECTION (3)
Admin Assist/EngineeringChief Building Official
Civil EngineerBuilding Inspector
Permit Technician
PW MAINTENANCE (19)
Administrative Asst.PLANNING
Planning Manager
Operations ManagerPlanner (.6 FTE)
Parks and StreetsAdmin. Asst. (.6 FTE)
Parks Leadperson
(5) Public Service WorkerRental Housing
Manager (.75 FTE)
Streets LeadpersonInspector (.75 FTE)
(7) Public Service Worker
Fleet Services Supervisor
(2) Mechanic
Non-General FundNon-General FundNon-General Fund
Water/Sewer Op Mgr (10)SPRINGBROOK NATURESOLID WASTE
WATER (5)CENTER (3) Environmental Planner
(5) Public Service WorkerNature Center Director
Program Supervisor
Component Unit
SEWER (4)Program Admin AssistHRA
(4) Public Service WorkerAsst. Executive Director
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II. FINANCIAL SECTION
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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, the discretely presented component unit, each major fund, and the aggregate
remaining fund information of the City of Fridley, Minnesota, as of and for the year ended December
31, 2015, 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
4810 White Bear Parkway, St. Paul, MN, 55110 651.426.7000 www.redpathcpas.com
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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, the discretely
presented component unit, each major fund, and the aggregate remaining fund information of the
City of Fridley, Minnesota, as of December 31, 2015, 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
As described in Note 7 to the financial statements, City of Fridley, Minnesota adopted new
accounting guidance, GASB Statement No. 68, Accounting and Financial Reporting for Pensions –
December 31, 2015
an Amendment of GASB Statement No. 27 for the year ended . 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 2014 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 May 18, 2015. In our opinion, the summarized comparative
information presented herein as of and for the year ended December 31, 2014 is consistent, in all
material respects, with the audited financial statements from which it has been derived.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
, the budgetary comparison information, the schedules of
management’s discussion and analysis
pension contributions, and the schedules of proportionate share of pension liability, as listed in
the table of contents,
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.
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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 and schedules, and statistical 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 schedules 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 schedules are fairly stated in all material respects in relation to the
basic financial statements as a whole.
The introductory and statistical 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 June 1,
2016, 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.
REDPATH AND COMPANY, LTD.
St. Paul, Minnesota
June 1, 2016
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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, 2015. 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 9 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 $57,390,746 (net position). Of this amount, $24,111,014 (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.
Net position of the government-wide financial statements was negatively impacted in the current
year by $9,230,120 due to the required implementation of a new accounting standard. This is
more fully described on page 27.
During 2015, the City’s total net position increased by $2,295,948.
As of the close of the current fiscal year, the City of Fridley’s governmental funds reported
combined ending fund balances of $24,691,595. Of this total amount, $1,827,948, or 7.4% is
restricted through legal restrictions or third-party agreements.
At the end of the current fiscal year the general fund balance of $8,943,950 included $66,265
in non-spendable, $19,376 in restricted, and $8,858,309 in unassigned fund balance.
The City’s total debt decreased by $1,806,082 during the current fiscal year. Total debt
outstanding at December 31, 2015 is $10,602,859.
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
23
Managements Discussion and Analysis
’
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.
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 37 through 39 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.
24
Managements Discussion and Analysis
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The City of Fridley maintains three 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 and street improvement capital projects 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, the Cable TV,
Solid Waste Abatement, Grant Management and Springbrook Nature Center special revenue
funds.
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 40 through 45 of
this report.
Proprietary funds
. The City of Fridley maintains four enterprise funds and two 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 and self-insurance. 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 46 through 51 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.
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Managements Discussion and Analysis
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The basic fiduciary fund financial statement can be found on page 52 of this report.
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 53 through 93 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 107 through 147 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
$57,390,746 at the close of the most recent fiscal year.
A significant portion of the City of Fridley's net position ($31,046,553 or 54 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
201420152014201520142015
Current and other assets$30,949,907$30,605,448$9,718,681$9,443,082$40,668,588$40,048,530
Capital assets19,716,35921,151,84318,834,33419,493,59238,550,69340,645,435
Total assets$50,666,266$51,757,291$28,553,015$28,936,674$79,219,281$80,693,965
Total deferred outflows of resources - 2,037,863 - - - 2,037,863
Long-term liabilities outstanding$5,121,191$15,917,754$5,331,712$5,338,225$10,452,903$21,255,979
Other liabilities3,363,0751,452,9081,440,1051,305,5574,803,1802,758,465
Total liabilities$8,484,266$17,370,662$6,771,817$6,643,782$15,256,083$24,014,444
Total deferred inflows of resources - 1,326,638 - - - 1,326,638
Net position:
Net investment in capital assets$14,186,359$16,811,842$13,053,816$14,234,711$27,240,175$31,046,553
Restricted2,673,9822,233,179 - - 2,673,9822,233,179
Unrestricted25,321,65916,052,8338,727,3828,058,18134,049,04124,111,014
Total net position$42,182,000$35,097,854$21,781,198$22,292,892$63,963,198$57,390,746
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Managements Discussion and Analysis
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The City adopted new accounting guidance, GASB Statement No. 68, Accounting and
Financial Reporting for Pensions – an Amendment of GASB Statement No. 27 for the year
ended December 31, 2015. Essentially, the standard required the unfunded portion of defined
benefit pension plans to be reported by all participating employers. Recording the net pension
liability and the pension related deferred outflows and inflows of resources do not change the
City’s future funding requirements or obligations under the plans, which are determined by
Minnesota statutes.
Net position was negatively impacted by $9,230,120 at December 31, 2015 due to the
implementation of this standard. Pension-related amounts included in the above schedule
related to the standard are as follows:
Deferred outflows of resources$2,037,863
Deferred inflows of resources(1,326,638)
Noncurrent liabilities(9,941,345)
Total($9,230,120)
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 $24,111,014 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 increased the City of Fridley’s net position by $1,784,254. Capital
grants and contributions increased by $1,149,106 due to an increase in capital grant funding
related to park capital. Public works expenditures decreased by $831,928 as a result of a
reallocation in labor costs and a delay in the annual street rehabilitation project. Public Safety
expenditures increased by $478,333 primarily due to the addition of an externally funded
police position and the purchase of a new fire truck . Investment earnings decreased for 2015
by $477,130 as a result of a negative year-end market value adjustment.
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Managements Discussion and Analysis
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City of Fridley’s Changes in Net Position
Governmental ActivitiesBusiness-Type ActivitiesTotals
201420152014201520142015
Revenues:
Program revenues:
Charges for services$3,916,349$4,109,621$13,188,157$14,198,795$17,104,506$18,308,416
Operating grants and contributions1,837,8601,139,385118,8272,4131,956,6871,141,798
Capital grants and contributions1,220,9032,370,009321,800421,9901,542,7032,791,999
General revenues:
Property taxes11,521,19611,795,707 - - 11,521,19611,795,707
Grants and contributions not
restricted to specific programs1,476,6641,325,388 - - 1,476,6641,325,388
Unrestricted investment earnings634,411157,281148,24842,722782,659200,003
Gain (loss) on sale of property - 67,581 - 10,672 - 78,253
Other93,236418,64012,20116,331105,437434,971
Total revenues20,700,61921,383,61213,789,23314,692,92334,489,85236,076,535
Expenses:
General government4,092,1234,156,904 - - 4,092,1234,156,904
Public safety7,570,3228,048,655 - - 7,570,3228,048,655
Public works5,959,5955,127,667 - - 5,959,5955,127,667
Community development898,4551,107,348 - - 898,4551,107,348
Recreation and naturalist1,513,1351,353,320 - - 1,513,1351,353,320
Interest on long-term debt179,420144,064 - - 179,420144,064
Liquor - - 4,596,3164,914,7864,596,3164,914,786
Water - - 2,902,4193,101,3562,902,4193,101,356
Sewer - - 4,988,5875,040,8614,988,5875,040,861
Storm water - - 597,915785,626597,915785,626
Total expenses 20,213,05019,937,95813,085,23713,842,62933,298,28733,780,587
Increase (decrease) in net position before transfers487,5691,445,654703,996850,2941,191,5652,295,948
Transfers250,000338,600(250,000)(338,600) - -
Increase in net position737,5691,784,254453,996511,6941,191,5652,295,948
Net position - January 1, as previously reported41,444,43142,182,00021,327,20221,781,19862,771,63363,963,198
Prior period adjustment - (8,868,400) - - - (8,868,400)
Net position - January 1, as restated41,444,43133,313,60021,327,20221,781,19862,771,63355,094,798
Net position - December 31$42,182,000$35,097,854$21,781,198$22,292,892$63,963,198$57,390,746
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Managements Discussion and Analysis
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Below are specific graphs which provide comparisons of the governmental activities
revenues and expenses:
29
Managements Discussion and Analysis
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Business-Type Activities
Business-type activities increased net position by $511,694. There was an increase in gross
profits for the Liquor fund and rate increases in the Storm Sewer fund.
Business-Type of Activities – Program Revenues vs Operating Expenses
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Managements Discussion and Analysis
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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 $24,691,595.
The General Fund’s fund balance increased by $626,320 in 2015. This was much better than
the $95,100 anticipated with the 2015 revised budget. A couple departments in the General
Fund were under budget due to personnel vacancies. In addition, building permit revenue
increased due to a significant weather event requiring improvements to many properties in
the community.
The Street Improvements Fund has an assigned fund balance of $2,537,188 and is identified
as a major fund. 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 improvement
funds. Now if the City experiences fluctuations in LGA funding, 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 2015, this fund
ended the year with a committed fund balance of $418,873. 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 operational
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 $322,913, water
$2,786,417, sewer $2,561,783 and storm water $2,407,637. The liquor, water and storm
water funds had an increase in net position of $22,542, $9,062 and $551,606 respectively.
The sewer fund had a decrease in net position of $50,947 as a result of increased
maintenance costs and continued conservation efforts by commercial customers.
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Managements Discussion and Analysis
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Budgetary Highlights
General Fund
The original revenue and expenditure budgets were amended $95,100 primarily to account
for increased building permit revenue and related expenditures.
Operating expenditures in total were less than the final budgetary estimates by $512,981.
Significant variances include a reduction in legal fees of $63,700 within General government
and vacancies in the Public Works and Police departments resulting in unspent funds of
approximately $257,000.
Net investment earnings for General Fund fell below anticipated budget amounts. In fact,
due to negative year-end market value adjustments, net investment earnings were lower in
most 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.Interest rates have
fluctuated over the past several years. In 2013 net investment earning were negative for all
funds. During 2014 interest rates started to climb resulting in a positive impact on net
investment earnings. 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, causing the City to have to record a book loss at
December 31, 2015.
This 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.
Even though the actual amount of interest income received varied very little from 2014 to
2015, since the City had recorded the large market value increase at December 31, 2014, a
large market value loss needed to be recorded at December 31, 2015 to accurately reflect the
current market conditions. 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, 2015, amounts to $40,645,435 (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.
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Managements Discussion and Analysis
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City of Fridley’s Capital Assets
(Net of Depreciation
)
Governmental ActivitiesBusiness-Type ActivitiesTotals
201420152014201520142015
Land$2,814,016$2,814,016$306,477$306,477$3,120,493$3,120,493
Buildings and structures 1,002,752 962,795 1,352,132 1,271,592 2,354,884 2,234,387
Improvements other than buildings1,754,204 1,764,251 5,982,097 6,165,458 7,736,301 7,929,709
Machinery and equipment 2,910,282 3,311,782 774,241 799,512 3,684,523 4,111,294
Infrastructure 11,039,817 10,359,288 10,003,145 10,152,224 21,042,962 20,511,512
Construction in progress 195,288 1,939,711 416,242 798,329 611,530 2,738,040
Total Capital Assets$19,716,359$21,151,843$18,834,334$19,493,592$38,550,693$40,645,435
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 $9,598,881, a decrease of $1,774,637 from 2014. $3,010,000 of this is
for general obligation improvement debt which is supported by special assessments and a
property tax levy, an additional $1,330,000 is for general obligation equipment certificate
debt which financed the City’s capital equipment purchases, and $5,258,881 is general
obligation utility revenue bonds which financed utility improvements.
In addition, there is long-term debt in the amount of $1,003,978 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 Equipment Certificates, General
Obligation Revenue Bonds, and Compensated Absences (excluding bond discounts) are as
follows:
Governmental ActivitiesBusiness-Type ActivitiesTotals
201420152014201520142015
General Obligation Improvement Bonds$4,000,000$3,010,000$0$0$4,000,000$3,010,000
General Obligation Revenue Bonds- - 5,845,000 5,260,000 5,845,000 5,260,000
General Obligation Equipment Certificates1,530,0001,330,000- - 1,530,000 1,330,000
Compensated Absences1,035,423 1,003,978 1,035,423-1,003,978
-
Total$6,565,423$5,343,978$5,845,000$5,260,000$12,410,423$10,603,978
The City of Fridley has an Aa1 rating, which was reaffirmed by Moody’s Investors Service
in November of 2014. The rating review by Moody’s removed the negative outlook that was
placed on the City’s rating back in 2012 due to multi-year decline in market values. The
removal of the negative outlook is based on recent tax base growth that is expected to
continue in the near term.
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Managements Discussion and Analysis
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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
$64,381,899. Only $1,330,000 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.
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.
34
BASIC FINANCIAL STATEMENTS
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36
Exhibit A-1
CITY OF FRIDLEY, MINNESOTA
STATEMENT OF NET POSITION
December 31, 2015
Component Unit
Primary GovernmentHousing &
GovernmentalBusiness-TypeTotalRedevelopment Authority
ActivitiesActivities20152015
Assets:
Cash and investments$25,006,785$5,663,387$30,670,172$8,436,987
Receivables:
Accounts136,7202,870,4153,007,13562,166
Taxes249,471 - 249,47112,059
Special assessments1,885,42832,5841,918,012 -
Mortgage - - - 825,129
Interest83,138 - 83,13826,169
Due from component unit1,558,849 - 1,558,849 -
Due from other governments1,598,22395,1571,693,380 -
Internal balances20,569(20,569) - -
Prepaid items12,296 - 12,296 -
Inventories - at cost53,969802,108856,077 -
Land held for resale - - - 3,390,611
Capital assets (net of accumulated depreciation):
Land2,814,016306,4773,120,4932,023,511
Buildings and structures962,7951,271,5922,234,387 -
Improvements other than buildings1,764,2516,165,4617,929,712 -
Machinery and equipment3,311,782799,5114,111,293 -
Infrastructure10,359,28810,152,22220,511,510 -
Construction in progress1,939,711798,3292,738,040 -
Total assets51,757,29128,936,67480,693,96514,776,632
Deferred outflows of resources:
Related to pensions2,037,863 - 2,037,863 -
Liabilities:
Due to primary government - - - 1,558,849
Accounts payable476,576445,149921,725350,672
Deposits payable 32,650 - 32,650 -
Contracts payable562,76176,671639,432 -
Due to other governments23,961674,138698,09920,120
Salaries payable301,40028,966330,366 -
Accrued interest payable55,56080,275135,835 -
Compensated absences payable:
Due within one year816,389 - 816,389 -
Due in more than one year187,589 - 187,589 -
Other post employment benefits payable:
Due in more than one year632,43179,344711,775 -
Unearned revenue - 358358 -
Bonds payable:
Due within one year1,230,000610,0001,840,000 -
Due in more than one year3,110,0004,648,8817,758,881 -
Net pension liability
Due in more than one year9,941,345 - 9,941,345 -
Total liabilities17,370,6626,643,78224,014,4441,929,641
Deferred inflows of resources:
Related to pensions1,326,638 - 1,326,638 -
Net position:
Net investment in capital assets16,811,84214,234,71131,046,5532,023,511
Restricted for:
Debt service2,141,163 - 2,141,163 -
Tax increment purposes - - - 672,875
Police forfeitures - - - -
Cable television equipment72,640 - 72,640 -
Donations19,376 - 19,376 -
Unrestricted16,052,8338,058,18124,111,01410,150,605
Total net position$35,097,854$22,292,892$57,390,746$12,846,991
The accompanying notes are an integral part of these financial statements.
37
CITY OF FRIDLEY, MINNESOTA
STATEMENT OF ACTIVITIES
For The Year Ended December 31, 2015
Program Revenues
Operating
Charges ForGrants and
ExpensesServicesContributions
Functions/Programs
Primary government:
Governmental activities:
General government$4,156,904$1,905,021$97,282
Public safety8,048,655619,630508,894
Public works5,127,66753,589514,240
Community development1,107,3481,194,534 -
Parks and recreation1,353,320336,84718,969
Interest on long-term debt144,064 - -
Total governmental activities19,937,9584,109,6211,139,385
Business-type activities:
Liquor4,914,7865,256,840 -
Water3,101,3562,907,123 -
Sewer5,040,8614,809,679 -
Storm water785,6261,225,153 -
Total business-type activities13,842,62914,198,7950
Total primary government$33,780,587$18,308,416$1,139,385
Component unit:
Housing and Redevelopment Authority$4,367,952$48,148$999,973
Total component unit$4,367,952$48,148$999,973
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
Insurance and other reimbursements
Other
Transfers
Total general revenues
and transfers
Change in net position
Net position - January 1, as previously reported
Prior period adjustment
Net position - January 1, as restated
Net position - December 31
The accompanying notes are an integral part of these financial statements.
38
Exhibit A-2
Component Unit
Net (Expense) Revenue and Changes in Net PositionHousing &
CapitalPrimary GovernmentRedevelopment
Grants andGovernmentalBusiness-TypeTotalAuthority
ContributionsActivitiesActivities20152015
$ - ($2,154,601)$ - ($2,154,601)$ -
- (6,920,131) - (6,920,131) -
2,370,009(2,189,829) - (2,189,829) -
- 87,186 - 87,186 -
- (997,504) - (997,504) -
- (144,064) - (144,064) -
2,370,009(12,318,943)0(12,318,943)0
- - 342,054342,054 -
331,000 - 136,767136,767 -
- - (231,182)(231,182) -
90,990 - 530,517530,517 -
421,9900778,156778,1560
$2,791,999(12,318,943)778,156(11,540,787)$0
$ -($3,319,831)
$0(3,319,831)
11,795,707 -11,795,707358,303
- - -1,560,658
1,325,3882,4131,327,801 -
244,11158,319302,43077,088
(86,830)(15,597)(102,427)(8,114)
67,58110,67278,253 -
-6,1156,115 -
418,64010,216428,856112,048
338,600(338,600) - -
14,103,197(266,462)13,836,7352,099,983
1,784,254511,6942,295,948(1,219,848)
42,182,00021,781,19863,963,19814,066,839
(8,868,400) -(8,868,400) -
33,313,60021,781,19855,094,79814,066,839
$35,097,854$22,292,892$57,390,746$12,846,991
The accompanying notes are an integral part of these financial statements.
39
CITY OF FRIDLEY, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2015
Debt Service
General
Assets
Cash and investments$8,851,394$5,626,641
Receivables:
Accounts38,572 -
Taxes221,24219,818
Special assessments40,010905,489
Interest83,138 -
Due from other funds73,673 -
Due from component unit1,8211,557,028
Due from other governments97,681 -
Prepaid items12,296 -
Inventories, at cost53,969 -
$9,473,796$8,108,976
Total assets
Liabilities, Deferred Inflows of Resources, and Fund Balances
Liabilities:
Accounts payable$107,695$ -
Deposits payable32,650 -
Contracts payable943 -
Due to other governments10,193 -
Due to other funds - -
Salaries payable193,604 -
Unearned revenue - -
Total liabilities345,0850
Deferred inflows of resources:
Unavailable revenue184,761971,640
Fund balance:
Nonspendable66,265 -
Restricted19,3761,735,932
Committed - -
Assigned - 5,401,404
Unassigned8,858,309 -
Total fund balance8,943,9507,137,336
$9,473,796$8,108,976
Total liabilities, deferred inflows of resources, and fund balance
The accompanying notes are an integral part of these financial statements.
40
Exhibit A-3
Other GovernmentalTotals Governmental
Street ImprovementsPark ImprovementsFundsIntra-Activity EliminationsFunds
2015
$2,328,996$1,110,260$4,594,151$ - $22,511,442
- - 98,148 - 136,720
1001338,178 - 249,471
852,210 - 87,719 - 1,885,428
- - - - 83,138
- - - (73,673) -
- - - - 1,558,849
292,9931,095,302112,247 - 1,598,223
- - - - 12,296
- - - - 53,969
$3,474,299$2,205,695$4,900,443($73,673)$28,089,536
$32,314$15,831$318,802$ - $474,642
- - - - 32,650
53,047508,771 - - 562,761
155 - 13,613 - 23,961
- - 73,673(73,673) -
- - 9,165 - 202,769
- - - - -
85,516524,602415,253(73,673)1,296,783
851,59513393,029 - 2,101,158
- - - - 66,265
- - 72,640 - 1,827,948
- - 2,709,638 - 2,709,638
2,537,1881,680,9601,653,036 - 11,272,588
- - (43,153) - 8,815,156
2,537,1881,680,9604,392,161024,691,595
$3,474,299$2,205,695$4,900,443($73,673)$28,089,536
Fund balance reported above$24,691,595
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.21,151,843
Other long-term assets are not available to pay for current-period expenditures
and, therefore, are reported as unavailable revenue in the funds.2,101,158
Long-term liabilities, including bonds payable, are not due and payable in the
current period and, therefore, are not reported in the funds.(5,027,991)
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.(7,818,751)
$35,097,854
Net position of governmental activities
The accompanying notes are an integral part of these financial statements.
41
CITY OF FRIDLEY, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2015
Street
GeneralDebt ServiceImprovements
Revenues:
Taxes$10,469,880$940,845$12
Special assessments21,009302,753206,782
Licenses and permits1,267,534 - -
Intergovernmental revenue972,658 -400,049
Charges for services1,901,211 - -
Fines and forfeits155,499 - -
Investment income:
Interest and dividends82,64156,87025,767
Net change in the fair value of investments(23,249)(11,324)(9,369)
Contributions and donations - - -
Miscellaneous:
Other212,866 - -
Total revenues15,060,0491,289,144623,241
Expenditures:
Current:
General government2,763,355 - -
Public safety7,247,371 - -
Public works2,805,612 -769,640
Community development1,081,549 - -
Parks and recreation879,032 - -
Debt service -1,350,356 -
Capital outlay - - -
Total expenditures14,776,9191,350,356769,640
Excess (deficiency) of revenues
over (under) expenditures283,130(61,212)(146,399)
Other financing sources (uses):
Proceeds from sale of capital assets - - -
Transfers in569,600 - -
Transfers out(226,410)(350,000)(131,000)
Total other financing sources (uses)343,190(350,000)(131,000)
Net change in fund balance626,320(411,212)(277,399)
Fund balance - January 1, as previously reported8,317,6307,548,5482,814,587
Prior period adjustment - - -
Fund balance - January 1, as restated8,317,6307,548,5482,814,587
Fund balance - December 31$8,943,950$7,137,336$2,537,188
The accompanying notes are an integral part of these financial statements.
42
Exhibit A-4
Park ImprovementsOther Governmental FundsIntra-Activity EliminationsTotals Governmental Funds
2015
$26$394,817$ - $11,805,580
- 11,704 - 542,248
- 282,251 - 1,549,785
1,515,4081,487,857 - 4,375,972
- 473,685 - 2,374,896
- 29,441 - 184,940
16,56234,954 - 216,794
(5,514)(10,057) - (59,513)
63,725 - - 63,725
1,510151,612 - 365,988
1,591,7172,856,264021,420,415
13,7931,000,540 - 3,777,688
- 72,193 - 7,319,564
- - - 3,575,252
- - - 1,081,549
- 409,652 - 1,288,684
- - - 1,350,356
1,832,0991,813,326 - 3,645,425
1,845,8923,295,711022,038,518
(254,175)(439,447)0(618,103)
- 93,670 - 93,670
94,400401,410(726,810)338,600
- (19,400)726,810 -
94,400475,6800432,270
(159,775)36,2330(185,833)
1,770,1404,355,928 - 24,806,833
70,595 - - 70,595
1,840,7354,355,928 - 24,877,428
$1,680,960$4,392,161$0$24,691,595
The accompanying notes are an integral part of these financial statements.
43
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44
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, 2015
2015
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)($185,833)
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.1,435,484
Revenues in the statement of activities that do not provide current
financial resources are not reported as revenues in the funds.(328,914)
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.1,190,000
Internal service funds are used by management to charge the cost of
certain activities to individual funds. This amount is net expenditures
attributable to governmental activities.(302,249)
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.(40,526)
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.16,292
Change in net position of governmental activities (Exhibit A-2)$1,784,254
The accompanying notes are an integral part of these financial statements.
45
CITY OF FRIDLEY, MINNESOTA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
December 31, 2015
With comparative totals for Enterprise Funds for December 31, 2014
Business-Type Activities - Enterprise Funds
Assets:LiquorWater
Current assets:
Cash and investments$137,754$1,958,298
Accounts receivable6,1151,144,922
Special assessments receivable - 5,666
Due from other governments - -
Inventories - at cost627,491174,617
Total current assets771,360 3,283,503
Noncurrent assets:
Capital assets:
Land151,946154,531
Buildings and structures130,2113,157,688
Improvements other than buildings824,7499,655,530
Machinery and equipment248,2212,000,032
Infrastructure - 10,510,258
Construction in process33,575461,600
Total capital assets1,388,702 25,939,639
Less: Allowance for depreciation(798,202)(15,045,978)
Net capital assets590,50010,893,661
Total noncurrent assets590,50010,893,661
Total assets1,361,86014,177,164
Deferred outflows of resources:
Related to pensions - -
Liabilities:
Current liabilities:
Accounts payable363,82868,452
Accrued interest payable - 70,801
Contracts payable - 76,671
Due to other governments55,664238,293
Salaries payable7,3579,842
Payroll deductions payable - -
Compensated absences payable - -
Bonds payable - current - 555,000
Unearned revenue358 -
Total current liabilities427,207 1,019,059
Noncurrent liabilities:
Other post employment benefits21,24033,027
Compensated absences - noncurrent - -
Bonds payable - noncurrent - 3,983,881
Net pension liability - -
Total noncurrent liabilities21,240 4,016,908
Total liabilities448,4475,035,967
Deferred inflows of resources:
Related to pensions - -
Net position:
Net investment in capital assets590,5006,354,780
Unrestricted322,9132,786,417
Total net position$913,413$9,141,197
Net position reported above
Adjustment to report the cumulative internal balance for the net effect
activity between the internal service fund and the enterprise funds over time
Net position of business-type activities (Exhibit A-1)
The accompanying notes are an integral part of these financial statements.
46
Exhibit A-6
Governmental
Activities -
Business-Type Activities - Enterprise FundsTotals
Internal Service Funds
SewerStorm Water20152014
$1,604,174$1,963,161$5,663,387$5,895,150$2,495,343
1,371,831347,5472,870,4152,759,647 -
- 26,91832,58443,624 -
4,16790,99095,157291,419 -
- - 802,108728,841 -
2,980,172 2,428,616 9,463,651 9,718,681 2,495,343
- - 306,477306,477 -
8,770 - 3,296,6693,306,561 -
2,906,3532,066,53415,453,16614,732,305 -
986,439172,2153,406,9073,313,446 -
7,052,8557,852,78825,415,90124,670,120 -
187,827115,327798,329416,242 -
11,142,244 10,206,864 48,677,449 46,745,151 0
(7,401,880)(5,937,797)(29,183,857)(27,910,817) -
3,740,3644,269,06719,493,59218,834,3340
3,740,3644,269,06719,493,59218,834,3340
6,720,5366,697,68328,957,24328,553,0152,495,343
- - - - 2,037,863
4,3178,552445,149585,8341,934
5,3964,07880,27588,942 -
- - 76,67144,824 -
380,181 - 674,13859,141 -
4,8916,87628,96676,3640
- - - - 98,631
- - - - 816,389
30,00025,000610,000585,000 -
- - 358 - -
424,785 44,506 1,915,557 1,440,105 916,954
23,6041,47379,34473,194 -
- - - - 187,589
380,000285,0004,648,8815,258,518 -
- - - - 9,941,345
403,604 286,473 4,728,225 5,331,712 10,128,934
828,389330,9796,643,7826,771,81711,045,888
- - - - 1,326,638
3,330,3643,959,06714,234,71113,053,816 -
2,561,7832,407,6378,078,7508,727,382(7,839,320)
$5,892,147$6,366,704$22,313,461$21,781,198($7,839,320)
$22,313,461
(20,569)
$22,292,892
The accompanying notes are an integral part of these financial statements.
47
CITY OF FRIDLEY, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
For The Year Ended December 31, 2015
With comparative totals for the year ended December 31, 2014
Business-Type Activities - Enterprise Funds
LiquorWater
Sales$5,256,840$ -
Cost of sales(3,909,856) -
Gross profit1,346,9840
Operating revenues:
Customer billings -2,902,635
Charges for services - -
Other revenues -4,488
Total operating revenues0 2,907,123
Total gross profit and operating revenues1,346,9842,907,123
Operating expenses:
Personal services501,470664,979
Supplies and other charges:
Disposal charges - -
Other426,5781,510,125
Depreciation69,299748,329
Total operating expenses997,347 2,923,433
Operating income (loss)349,637 (16,310)
Nonoperating revenues (expenses):
Intergovernmental revenue - -
Investment income:
Interest and dividends(375)25,919
Net change in the fair value of investments165(5,471)
Insurance reimbursement6,115 -
Interest expense - (171,882)
Gain (loss) on sale of capital assets - -
Other5,600 -
Total nonoperating revenues (expenses)11,505 (151,434)
Income (loss) before transfers, capital contributions and special items361,142 (167,744)
Transfers, capital contributions and special items:
Transfers in - -
Transfers out(338,600)(154,194)
Capital contributions - 331,000
Total contributions and transfers(338,600)176,806
Change in net position22,542 9,062
Net position - January 1, as previously reported890,8719,132,135
Prior period adjustment - -
Net position - January 1, as restated890,8719,132,135
Net position - December 31$913,41$9,141,19
37
Amount for business-type activities reported above
Adjustment for the net effect of the current year activity
between the internal service funds and the enterprise funds
Changes in net position of business-type activities (Exhibit A-2)
The accompanying notes are an integral part of these financial statements.
48
Exhibit A-7
Governmental
Business-Type Activities - Enterprise FundsActivities -
SewerStorm WaterTotalsInternal Service Funds
20152014
$ - $ - $5,256,840$4,786,987$ -
- - (3,909,856)(3,525,672) -
001,346,9841,261,3150
4,809,6791,223,9738,936,2878,363,415 -
- - - - 1,298,405
- 1,1805,6684,493 -
4,809,679 1,225,153 8,941,955 8,367,908 1,298,405
4,809,679 1,225,153 10,288,939 9,629,223 1,298,405
297,122393,1511,856,7222,357,8531,461,551
3,688,859 - 3,688,8593,581,746 -
725,282130,1952,792,1802,069,620229,445
309,628252,4301,379,6861,334,855 -
5,020,891 775,776 9,717,447 9,344,074 1,690,996
(211,212)449,377 571,492 285,149 (392,591)
- 93,40393,403118,82737,530
12,27020,50558,31958,89427,240
(3,846)(6,445)(15,597)89,354(7,176)
- - 6,11512,20110,252
(13,025)(9,850)(194,757)(215,491) -
10,672 - 10,672 - -
- 4,61610,21633,2621,927
6,071 102,229 (31,629)97,047 69,773
(205,141)551,606 539,863 382,196 (322,818)
154,194 - 154,194 - -
- - (492,794)(250,000) -
- - 331,000321,800 -
154,194 - (7,600)71,800 -
(50,947)551,606 532,263 453,996 (322,818)
5,943,0945,815,09821,781,19821,327,2021,422,493
- - - - (8,938,995)
5,943,0945,815,09821,781,19821,327,202(7,516,502)
$5,892,14$6,366,70$22,313,461$21,781,19($7,839,320
748)
$532,263
(20,569)
$511,694
The accompanying notes are an integral part of these financial statements.
49
CITY OF FRIDLEY, MINNESOTA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For The Year Ended December 31, 2015
With comparative totals for Enterprise Funds for the year ended December 31, 2014
Business-Type Activities - Enterprise Funds
LiquorWater
Cash flows from operating activities:
Receipts from customers and users$5,263,183$2,891,582
Receipts from interfund services provided - -
Payment to suppliers(4,319,712)(1,440,413)
Payment to employees(521,764)(676,435)
Operating contribution5,600 -
Net cash flows from operating activities427,307774,734
Cash flows from noncapital financing activities:
Operating grants - -
Intergovernmental revenue - -
Transfers in - -
Transfers out(338,600)(154,194)
Net cash flows from noncapital financing activities(338,600)(154,194)
Cash flows from capital and related
financing activities:
Acquisition of capital assets(99,519)(1,575,370)
Proceeds from sale fo capital assets - -
Capital grants and contributions -331,000
Principal received on special assessments - -
Insurance reimbursement6,115 -
Principal paid on revenue bonds -(530,000)
Interest and paying agent fees on revenue bonds -(179,497)
Net cash flows from capital
and related financing activities(93,404)(1,953,867)
Cash flows from investing activities:
Investment income(210)20,448
Net increase (decrease) in cash and cash equivalents(4,907)(1,312,879)
Cash and cash equivalents - January 1142,6613,271,177
Cash and cash equivalents - December 31$137,754$1,958,298
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:
Operating income (loss) $349,637($16,310)
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation69,299748,329
Operating contribution5,600 -
Changes in assets and liabilities:
Decrease (increase) in receivables5,985(15,541)
Decrease (increase) in prepaid items - -
Decrease (increase) in inventories(19,680)(53,587)
Decrease (increase) in deferred outflows of resources - -
Increase (decrease) in payables16,108111,843
Increase (decrease) in unearned revenue358 -
Increase (decrease) in deferred inflows of resources - -
Total adjustments77,670791,044
Net cash provided by operating activities$427,307$774,734
The accompanying notes are an integral part of these financial statements.
50
Exhibit A-8
Governmental
Activities -
Business-Type Activities - Enterprise Funds
Internal Service Funds
SewerStorm Water
Totals
20152014
$5,027,958$1,203,954$14,386,677$12,528,623$ -
- - - - 1,298,980
(4,042,339)(155,539)(9,958,003)(8,889,697)(227,884)
(314,969)(384,802)(1,897,970)(2,341,443)(1,219,481)
- - 5,600 - -
670,650663,6132,536,3041,297,483(148,385)
- - - 118,827 -
- - - - 37,530
154,194 - 154,194 - -
- - (492,794)(250,000) -
154,1940(338,600)(131,173)37,530
(250,191)(113,865)(2,038,945)(1,595,949) -
10,672 - 10,672 - -
- 2,413333,413321,800 -
- 4,6164,61633,262 -
- - 6,11512,20112,179
(30,000)(25,000)(585,000)(570,000) -
(13,400)(10,163)(203,060)(223,460) -
(282,919)(141,999)(2,472,189)(2,022,146)12,179
8,42414,06042,722148,24820,064
550,349535,674(231,763)(707,588)(78,612)
1,053,8251,427,4875,895,1506,602,7382,573,955
$1,604,174$1,963,161$5,663,387 $5,895,150 $2,495,343
($211,212)$449,377$571,492$285,149($392,591)
309,628252,4301,379,6861,334,855 -
- - 5,600 - -
218,279(21,199)187,524(626,272)575
- - - - -
- - (73,267)136,442 -
- - - - (1,535,015)
353,955(16,995)464,911167,309452,008
- - 358 - -
- - - - 1,326,638
881,862 214,236 1,964,812 1,012,334 244,206
$670,650$663,613$2,536,304$1,297,483($148,385)
The accompanying notes are an integral part of these financial statements.
51
Exhibit A-9
CITY OF FRIDLEY, MINNESOTA
STATEMENT OF FIDUCIARY NET POSITION
December 31, 2015
With comparative amounts for December 31, 2014
20152014
Assets:
Cash and investments$9,599$3,536
Receivables:
Accounts2,7653,124
Total assets$12,364$6,660
Liabilities:
Accounts payable$9,599$ -
Due to other governments2,7656,660
Total liabilities$12,364$6,660
The accompanying notes are an integral part of these financial statements.
52
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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 activities) 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.
53
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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.
TheStreet Improvements Fund is used to account for repairs and replacements of city
streets and street related equipment such as signs and street lights.
ThePark Improvements Fund is used to account for repairs and replacements of city park
equipment or park related improvements.
54
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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, pension benefits,
and insurance deductibles 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 North Metro Convention and
Tourism Bureau and various senior citizen organization.
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.
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.
55
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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 for the following Special
Revenue Funds; Cable TV Fund, Grant Management Fund, Solid Waste Abatement Fund,
and the Springbrook Nature Fund. 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.
56
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
8. As required by the City Charter, budgetary control is maintained within department at the
departmental level. 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.
There were no Special Revenue Funds whose expenditures exceeded budgeted
appropriations in 2015.
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.
57
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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, 2015
are planned to be eliminated in 2016. 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.
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.
58
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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.
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).
59
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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.
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, 2015, 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
60
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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.
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.
61
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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 one item that qualifies for reporting in this category. It is the pension related
deferred outflows of resources reported in the government-wide Statement of Net Position and
the proprietary funds Statement of Net Position.
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 pension related deferred inflows of resources reported in the government-wide
Statement of Net Position and the proprietary funds Statement of Net Position. The City also has
a 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.
62
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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 ($5,027,991) difference are
as follows:
Bonds payable($4,340,000)
Accrued interest payable(55,560)
Other post employment benefits payable(632,431)
Net adjustment to increase net changes in fund
balances - total governmental funds to arrive at
changes in net position of governmental activities($5,027,991)
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 $1,435,484 difference are as follows:
Net book value of capital asset disposals($26,089)
Capital outlay3,645,425
Capital outlay not capitalized(201,377)
Capital contributions187,000
Depreciation expense(2,169,475)
Net adjustment to increase net changes in fund
balances - total governmental funds to arrive at
changes in net position of governmental activities$1,435,484
63
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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 ($328,914) difference are as follows:
Unavailable revenue - general property taxes:
At December 31, 2014($173,026)
At December 31, 2015163,153
Unavailable revenue - special assessments:
At December 31, 2014(2,252,671)
At December 31, 20151,880,978
Unavailable revenue - interest on loan to HRA:
At December 31, 2014(4,375)
At December 31, 201557,027
Net adjustments to decrease net changes in fund
balances - total governmental funds to arrive at
changes in net position of governmental activities($328,914)
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
$1,190,000 difference are as follows:
Principal repayments:
G.O. Improvement bonds$1,190,000
T. Restricted Assets
There were no restricted cash balances at December 31, 2015.
U. Reclassifications
Certain amounts presented in the prior year data have been reclassified in order to be consistent
with the current year’s presentation.
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, 2014, from which the summarized information was derived.
64
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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, 2015, 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.
65
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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, 2015 the City had the following investments and maturities:
Investment Maturities (in Years)
FairLessOver
Investment TypeRatingValueThan 11-56-1010 Years
Federal Farm Credit Bank$2,650,558$ - $ - $2,650,558$ -
AAA
Federal Home Loan BankAAA996,895 - 500,065496,830 -
Federal National Mortgage AssociationAAA5,049,892 - 5,049,892 - -
Federal Home Loan Mortgage CorporationAAA3,486,165 - 2,247,6151,238,550 -
Local government bondsA-AA6,898,0061,981,2403,511,2681,405,498 -
PEFCOAAA508,220 - 508,220 - -
Brokered CDsN/R4,141,674747,3693,150,408243,897 -
Money marketN/R4,719,1424,719,142 - - -
Total$28,450,552$7,447,751$14,967,468$6,035,333$0
Total investments$28,450,552
Deposits2,224,269
Petty cash4,950
Total cash and investments$30,679,771
66
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
Following is a reconciliation to the City’s cash and investment balances as of December 31, 2015:
Cash and investments - primary government:
Governmental and business-type (statement A-1)$30,670,172
Fiduciary (statement A-9)9,599
$30,679,771
As of December 31, 2015 the HRA had the following investments and maturities:
Investment Maturities (in Years)
FairLessOver
Investment TypeRatingValueThan 11-56-1010 Years
Federal Home Loan Mortgage CorporationAAA$899,246$ - $899,246$ - $ -
Federal National Mortgage AssociationAAA1,034,829 - 1,034,829 - -
FICO StripsAAA1,021,293 - 1,021,293 - -
Federal Home Loan BankAAA988,917 - 988,917 - -
Aaa - A
Local government bonds1,973,012401,5081,571,504 - -
1
Money marketN/R1,233,2181,233,218 - - -
Total$7,150,515$1,634,726$5,515,789$0$0
Total investments$7,150,515
Deposits1,286,472
Total cash and investments$8,436,987
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.
67
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
Concentration of credit risk (City) – 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 Farm Credit Bank9.32%
Federal Home Loan Mortgage Corporation12.25%
Federal National Mortgage Association17.75%
Concentration of credit risk (HRA) – 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 Bank13.83%
Federal National Mortgage Association14.47%
Federal Home Loan Mortgage Corporation12.58%
FICO Strips14.28%
Local government bonds:
Baltimore MD7.00%
Greenville SC8.08%
Colorado St Hsg Fin Auth5.62%
3. Receivables
Significant receivables balances not expected to be collected within one year of December 31, 2015 are
as follows:
Primary Government
Major FundsNonmajor
GeneralDebt ServiceFundsTotal
Special assessments receivable$31,638$782,307$673,323$1,487,268
Delinquent property taxes123,68411,2194,097139,000
$155,322$793,526$677,420$1,626,268
HRA Component Unit
Major Funds
RevolvingGeneral
LoanFundTotal
Mortgage receivable$848,005$ - $848,005
Allowance for uncollectible accounts(22,876) - (22,876)
Delinquent tax increment - 6,1136,113
$825,129$6,113$831,242
68
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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 Interest on
TaxesAssessmentsLoan to HRATotal
Major funds:
General$144,751$40,010$ - $184,761
Debt Service13,004 901,60957,027971,640
Street Improvements88 851,507 - 851,595
Park Improvements133 - - 133
Nonmajor5,177 87,852 - 93,029
Total unavailable revenue$163,153$1,880,978$57,027$2,101,158
69
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
5. Capital Assets
Capital asset activity for the year ended December 31, 2015 was as follows:
BeginningEnding
Primary GovernmentBalanceIncreasesDecreasesBalance
Governmental activities:
Capital assets, not being depreciated:
Land$2,814,016$ - $ - $2,814,016
Construction in progress195,2881,843,074(98,651)1,939,711
Total capital assets, not being depreciated3,009,3041,843,074(98,651)4,753,727
Capital assets, being depreciated:
Buildings and structures8,054,375135,423 - 8,189,798
Machinery and equipment9,818,0641,221,431(870,776)10,168,719
Improvements6,703,289365,771(149,533)6,919,527
Infrastructure33,150,978164,000 - 33,314,978
Total capital assets, being depreciated57,726,7061,886,625(1,020,309)58,593,022
Less accumulated depreciation for:
Buildings and structures7,051,623175,380 - 7,227,003
Machinery and equipment6,907,782793,842(844,687)6,856,937
Improvements4,949,085355,724(149,533)5,155,276
Infrastructure22,111,161844,529 - 22,955,690
Total accumulated depreciation41,019,6512,169,475(994,220)42,194,906
Total capital assets being depreciated - net16,707,055(282,850)(26,089)16,398,116
Governmental activities capital assets - net$19,716,359$1,560,224($124,740)$21,151,843
BeginningEnding
Primary GovernmentBalanceIncreasesDecreasesBalance
Business-type activities:
Capital assets, not being depreciated:
Land$306,477$ - $ - $306,477
Construction in progress416,242796,518(414,431)798,329
Total capital assets, not being depreciated722,719796,518(414,431)1,104,806
Capital assets, being depreciated:
Buildings and structures3,306,561 - (9,892)3,296,669
Improvements other than buildings14,732,305720,861 - 15,453,166
Machinery and equipment3,313,446190,215(96,754)3,406,907
Infrastructure24,670,120745,781 - 25,415,901
Total capital assets, being depreciated46,022,4321,656,857(106,646)47,572,643
Less accumulated depreciation for:
Buildings and structures1,954,42980,540(9,892)2,025,077
Improvements other than buildings8,750,208537,500 - 9,287,708
Machinery and equipment2,539,205164,944(96,754)2,607,395
Infrastructure14,666,975596,702 - 15,263,677
Total accumulated depreciation27,910,8171,379,686(106,646)29,183,857
Total capital assets being depreciated - net18,111,615277,171 - 18,388,786
Business-type activities capital assets - net$18,834,334$1,073,689($414,431)$19,493,592
Component Unit
Capital assets, not being depreciated:
Land$2,023,511$0$0$2,023,511
70
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government$219,116
Public safety408,631
Public works, including depreciation of general infrastructure assets1,518,426
Community Development7,092
Park and recreation16,210
Total depreciation expense - governmental activities$2,169,475
Business-type activities:
Liquor$69,299
Water748,329
Sewer309,628
Storm water252,430
Total increases in accumulated depreciation$1,379,686
71
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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, 2015, 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%.$845,000
$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%. 660,000
$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%. 700,000
$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%. 210,000
$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%. 595,000
$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% 325,000
$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% 1,005,000
Subtotal governmental activities$4,340,000
Business-Type Activities:
$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%.$855,000
$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%.2,185,000
$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%2,220,000
Unamortized discount(1,119)
Subtotal business-type activities5,258,881
Total primary government$9,598,881
72
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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
2016$1,030,000$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$3,010,000$195,353$1,330,000$73,095$5,260,000$873,644
Long-term liability activity for the year ended December 31, 2015, was as follows:
BeginningEndingDue Within
BalanceAdditionsReductionsBalanceOne Year
Governmental activities:
Bonds payable:
G.O. improvement bonds$4,000,000$ - ($990,000)$3,010,000$1,030,000
G.O. equipment certificates1,530,000 - (200,000)1,330,000200,000
Total bonds payable5,530,0000(1,190,000)4,340,0001,230,000
Compensated absences1,035,423992,342(1,023,787)1,003,978187,589
Total governmental activities
long-term debt$6,565,423$992,342($2,213,787)$5,343,978$1,417,589
Business-type activities:
Bonds payable:
G.O. revenue bonds$5,843,518$ - ($584,637)$5,258,881$610,000
Compensated absences are generally liquidated by the Employee Benefits Fund. All long-term bonded
indebtedness outstanding at December 31, 2015 is backed by the full faith and credit of the City,
including improvement and revenue bond issues. Delinquent assessments receivable at December 31,
2015 totaled $44,471.
73
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
Revenues Pledged
Revenue PledgedCurrent Year
Percent ofDebt servicePrincipalPledged
Use oftotalas a % ofTerm ofRemainingand InterestRevenue
Bond IssueProceedsTypedebt servicenet revenuesPledgePrincipalpaidreceived
2012ACapital EquipmentProperty Taxes100%2013-$1,005,000$153,030$ -
2022
2010BCapital EquipmentProperty Taxes100%2011-325,00070,050231,310
2020
2010CStreet ImprovementsProperty Taxes and100%2011-700,000142,50079,449
Special Assessments2021
2008AStreet ImprovementsProperty Taxes and100%2008-845,000232,700189,466
Special Assessments2019
2007AStreet ImprovementsProperty Taxes and100%2007-660,000228,790206,176
Special Assessments2018
2006AStreet ImprovementsProperty Taxes and100%2007-595,000304,300245,180
Special Assessments2017
2005AStreet ImprovementsProperty Taxes and100%2006-210,000211,525207,567
Special Assessments2016
Water, Sewer and
2010A Utility Revenue BondsInfrastructure improvementsStorm Customer100%2.56%2011-2,220,000237,5509,272,955
Net Revenue2026
2008B Water Revenue BondsInfrastructure improvementsWater Customer100%10.01%2008-2,185,000324,0983,238,123
Net Revenue2023
2004 Water Revenue BondsInfrastructure improvementsWater Customer100%6.99%2004-855,000226,4133,238,123
Net Revenue2019
7. Defined Benefit Pension Plans
A. Summary of Significant Accounting Policies
Pensions. For purposes of measuring the net pension liability, deferred outflows/inflows of
resources, and pension expense, information about the fiduciary net position of the Public
Employees Retirement Association (PERA) and additions to/deductions from PERA’s fiduciary
net position have been determined on the same basis as they are reported by PERA except that
PERA’s fiscal year end is June 30. For this purpose, plan contributions are recognized as of
employer payroll paid dates and benefit payments and refunds are recognized when due and
payable in accordance with the benefit terms. Investments are reported at fair value.
B. Plan Description
The City participates in the following cost-sharing multiple-employer defined benefit pension
plans administered by the Public Employees Retirement Association of Minnesota (PERA).
PERA’s defined benefit pension plans are established and administered in accordance with
Minnesota Statutes, Chapters 353 and 356. PERA’s defined benefit pension plans are tax
qualified plans under Section 401 (a) of the Internal Revenue Code.
74
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
1. General Employees Retirement Fund (GERF)
All full-time (with the exception of employees covered by PEPFF) and certain part-time
employees of the City are covered by the General Employees Retirement Fund (GERF). 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. The Basic Plan was closed to
new members in 1967. All new members must participate in the Coordinated Plan.
2. Public Employees Police and Fire Fund (PEPFF)
The PEPFF, originally established for police officers and firefighters not covered by a local relief
association, now covers all police officers and firefighters hired since 1980. Effective July 1,
1999, the PEPFF also covers police officers and firefighters belonging to a local relief
association that elected to merge with and transfer assets and administration to PERA.
C. Benefits Provided
PERA provides retirement, disability, and death benefits. Benefit provisions are established by state
statute and can only be modified by the state legislature.
Benefit increases are provided to benefit recipients each January. Increases are related to the
funding ratio of the plan. Members in plans that are at least 90 percent funded for two consecutive
years are given 2.5% increases. Members in plans that have not exceeded 90% funded, or have
fallen below 80%, are given 1% increases.
The benefit provisions stated in the following paragraphs of this section are current provisions 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.
1. GERF Benefits
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. Two methods are used to
compute benefits for PERA's Coordinated and Basic Plan members. The retiring member
receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula
(Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2% of
average salary for each of the first ten years of service and 2.7% for each remaining year. The
annuity accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the
first ten years and 1.7% for each remaining year. Under Method 2, the annuity accrual rate is
2.7% of average salary for Basic Plan members and 1.7% for Coordinated Plan members for
each year of service. For members hired prior to July 1, 1989, a full annuity is available when
age plus years of service equal 90 and normal retirement age is 65. For members hired on or
after July 1, 1989, normal retirement age is the age for unreduced Social Security benefits
capped at 66.
75
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
2. PEPFF Benefits
Benefits for the PEPFF members first hired after June 30, 2010, but before July 1, 2014, vest on
a prorated basis from 50% after five years up to 100% after ten years of credited service.
Benefits for PEPFF members first hired after June 30, 2014, vest on a prorated basis from 50%
after ten years up to 100% after twenty years of credited service. The annuity accrual rate is 3%
of average salary for each year of service. For PEPFF who were first hired prior to July 1, 1989,
a full annuity is available when age plus years of service equal at least 90.
D. Contributions
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions.
Contribution rates can only be modified by the state legislature.
1. GERF Contributions
Basic Plan members and Coordinated Plan members were required to contribute 9.1% and
6.50%, respectively, of their annual covered salary in calendar year 2015. The City was required
to contribute 11.78% of pay for Basic Plan members and 7.50% for Coordinated Plan members in
calendar year 2015. The City’s contributions to the GERF for the year ended December 31,
2015, were $466,069. The City’s contributions were equal to the required contributions as set by
state statute.
2. PEPFF Contributions
Plan members were required to contribute 10.8% of their annual covered salary in calendar year
2015. The City was required to contribute 16.20% of pay for PEPFF members in calendar year
2015. The City’s contributions to the PEPFF for the year ended December 31, 2015, were
$644,283. The City’s contributions were equal to the required contributions as set by state
statute.
E. Pension Costs
1. GERF Pension Costs
At December 31, 2015, the City reported a liability of $5,203,249 for its proportionate share of the
GERF’s net pension liability. The net pension liability was measured as of June 30, 2015, and
the total pension liability used to calculate the net pension liability was determined by an actuarial
valuation as of that date. The City’s proportion of the net pension liability was based on the City’s
contributions received by PERA during the measurement period for employer payroll paid dates
from July 1, 2014, through June 30, 2015, relative to the total employer contributions received
from all of PERA’s participating employers.At June 30, 2015, the City’s proportion was .1004%
which was a decrease of .0084% from its proportion measured as of June 30, 2014.
For the year ended December 31, 2015, the City recognized pension expense of $593,508 for its
proportionate share of the GERF’s pension expense.
76
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
At December 31, 2015, the City reported its proportionate share of the GERF’s deferred outflows
of resources and deferred inflows of resources related to pensions from the following sources:
Deferred OutflowsDeferred Inflows
of Resourcesof Resources
Differences between expected and
actual economic experience$ - $262,332
Changes in actuarial assumptions - -
Difference between projected and
actual investment earnings492,567 -
Changes in proportion - 295,942
Contributions paid to PERA
subsequent to the measurement date243,494 -
Total$736,061$558,274
$243,494 reported as deferred outflows of resources related to pensions resulting from City
contributions subsequent to the measurement date will be recognized as a reduction of the net
pension liability in the year ended December 31, 2016. Other amounts reported as deferred
outflows and inflows of resources related to pensions will be recognized in pension expense as
follows:
Pension
Year EndedExpense
December 31,Amount
2016($62,949)
2017(62,949)
2018(62,950)
2019123,141
2020 -
Thereafter -
2. PEPFF Pension Costs
At December 31, 2015, the City reported a liability of $4,738,096 for its proportionate share of the
PEPFF’s net pension liability. The net pension liability was measured as of June 30, 2015, and
the total pension liability used to calculate the net pension liability was determined by an actuarial
valuation as of that date. The City’s proportion of the net pension liability was based on the City’s
contributions received by PERA during the measurement period for employer payroll paid dates
from July 1, 2014, through June 30, 2015, relative to the total employer contributions received
from all of PERA’s participating employers.At June 30, 2015, the City’s proportion was .4170%
which was an increase of .0160% from its proportion measured as of June 30, 2014.
For the year ended December 31, 2015, the City recognized pension expense of $807,969 for its
proportionate share of the PEPFF’s pension expense. The City also recognized $37,530 for the
year ended December 31, 2015, as pension expense (and grant revenue) for its proportionate
share of the State of Minnesota’s on-behalf contributions to the PEPFF. Legislation passed in
2013 required the State of Minnesota to begin contributing $9 million to the PEPFF each year,
starting in fiscal year 2014.
77
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
At December 31, 2015, the City reported its proportionate share of the PEPFF’s deferred
outflows of resources and deferred inflows of resources related to pensions from the following
sources:
Deferred OutflowsDeferred Inflows
of Resourcesof Resources
Differences between expected and
actual economic experience$ - $768,364
Changes in actuarial assumptions - -
Difference between projected and
actual investment earnings825,535 -
Changes in proportion 144,005 -
Contributions paid to PERA
subsequent to the measurement date332,262 -
Total$1,301,802$768,364
$332,262 reported as deferred outflows of resources related to pensions resulting from City
contributions subsequent to the measurement date will be recognized as a reduction of the net
pension liability in the year ended December 31, 2016. Other amounts reported as deferred
outflows and inflows of resources related to pensions will be recognized in pension expense as
follows:
Pension
Year EndedExpense
December 31,Amount
2016$81,512
201781,512
201881,512
201981,511
2020(124,871)
Thereafter -
F. Actuarial Assumptions
The total pension liability in the June 30, 2015, actuarial valuation was determined using the
following actuarial assumptions:
Inflation 2.75% per year
Active Member Payroll Growth 3.50% per year
Investment Rate of Return 7.90%
Salary increases were based on a service-related table. Mortality rates for active members,
retirees, survivors and disabilitants were based on RP-2000 tables for males or females, as
appropriate, with slight adjustments. Cost of living benefit increases for retirees are assumed to
st
be 1% effective every January 1 until 2034, and 2.5% thereafter.
78
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
Actuarial assumptions used in the June 30, 2015, valuation were based on the results of actuarial
experience studies. The experience study in the GERF was for the period July 1, 2004, through
June 30, 2008, with an update of economic assumptions in 2014. The experience study for
PEPFF was for the period July 1, 2004, through June 30, 2009.
There are no changes in actuarial assumptions in 2015.
The long-term expected rate of return on pension plan investments is 7.9%. The State Board of
Investment, which manages the investments of PERA, prepares an analysis of the
reasonableness of the long-term expected rate of return on a regular basis using a building-block
method in which best-estimate ranges of expected future rates of return are developed for each
major asset class. These ranges are combined to produce an expected long-term rate of return
by weighting the expected future rates of return by the target asset allocation percentages. The
target allocation and best estimates of arithmetic real rates of return for each major asset class
are summarized in the following table:
TargetLong-Term Expected
Asset ClassAllocationReal Rate of Return
Domestic Stocks45%5.50%
International Stocks15%6.00%
Bonds18%1.45%
Alternative Assets20%6.40%
Cash2%0.50%
G. Discount Rate
The discount rate used to measure the total pension liability was 7.9%. The projection of cash
flows used to determine the discount rate assumed that employee and employer contributions will
be made at the rate specified in statute. Based on that assumption, each of the pension plan’s
fiduciary net position was projected to be available to make all projected future benefit payments
of current active and inactive employees. Therefore, the long-term expected rate of return on
pension plan investments was applied to all periods of projected benefit payments to determine
the total pension liability.
H. Pension Liability Sensitivity
The following presents the City’s proportionate share of the net pension liability for all plans it
participates in, calculated using the discount rate disclosed in the preceding paragraph, as well
as what the City’s proportionate share of the net pension liability would be if it were calculated
using a discount rate 1 percentage point lower or 1 percentage point higher than the current
discount rate:
1% Decrease in1% Increase in
Discount Rate (6.9%)Discount Rate (7.9%)Discount Rate (8.9%)
City's proportionate share of the
GERF net pension liability$8,181,357$5,203,249$2,743,789
City's proportionate share of the
PEPFF net pension liability9,234,5984,738,0961,023,201
79
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
I. Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in a separately-
issued PERA financial report that includes financial statements and required supplementary
information. That report may be obtained on the Internet at www.mnpera.org.
J. Pension Expense
Pension expense recognized by the City for the fiscal year ended December 31, 2015 is as
follows:
GERF$593,508
PEPFF845,499
Total$1,439,007
8. Defined Contribution Plan
Five Council members of the City of Fridley are covered by the Public Employees Defined
Contribution Plan (PEDCP), a multiple-employer deferred compensation plan administered by
PERA. 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.
Plan benefits depend solely on amounts contributed to the plan plus investment earnings, 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% 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% of
employer contributions and twenty-five hundredths of 1% (.0025) of the assets in each member's
account annually.
Total contributions made by the City during fiscal year 2015 were:
Required
Contribution AmountPercentage of Covered Payroll
Employer
Employee(Pension Expense)EmployeeEmployerRate
$2,138$2,1385%5%5%
80
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
9. 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 $142,002 and $143,739 in State Aid to the Association for 2015 and
2014, respectively. This transaction is recorded as revenue and expenditures in the City’s financial
statements.
During 2015 and as of December 31, 2015, the Association held no securities issued by the City
or other related parties.
10. Other Post-Employment Benefits
A. Plan Description
In addition to providing the pension benefits described in Note 7, 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.
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CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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, 2014 were:
SingleMarried
Regular$752$2,166
HRA5701,642
HSA 5381,551
C. Participants
As of the actuarial valuation dated January 1, 2014, participants consisted of:
Retired participants and beneficiaries
currently receiving benefits -
Active employees66
Waiving Coverage60
Total126
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.
82
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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, 2015, was calculated as follows:
Annual required contribution (ARC)$66,242
Interest on net OPEB obligation26,604
Adjustment to ARC(38,463)
Annual OPEB cost54,383
Contributions made during the year(7,707)
Increase in net OPEB obligation46,676
Net OPEB obligation - beginning of year665,099
Net OPEB obligation - end of yea$711,775
r
For the governmental activities, other post employment benefits are generally liquidated through
the General Fund.
The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan and
the net OPEB obligation for 2013 to 2015 was as follows:
Percentage of
Fiscal YearAnnual OPEBEmployer Annual OPEB CostNet OPEB
EndedCostContributionsContributedObligation
December 31, 2013$61,829$37,19660.2%$615,953
December 31, 201452,2953,1496.0%665,099
December 31, 201554,3837,70714.2%711,775
F. Funded Status and Funding Progress
The City currently has no assets that have been irrevocably deposited in a trust for future health
benefits; therefore, the actuarial value of assets is zero. The funded status of the Plan was as
follows:
Unfunded
ActuarialActuarialUAAL as a
ActuarialActuarialAccruedAccruedFundedCoveredPercentage of
ValuationValue of AssetsLiability (AAL)*Liability (UAAL)RatioPayrollCovered Payrol
Date(a)(b)(b-a)(a/b)(c) ( (b-a) / c)
January 1, 2014$ - $494,791$494,7910.0%n/an/a
*Using the projected unit credit actuarial cost method.
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CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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.
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, 2014 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 7.5% reduced by 0.31% 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 as a level dollar amount over a 30-year open period. The remaining
amortization period at December 31, 2014, was 30 years.
11. 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$73,673$ -
Nonmajor Governmental Funds:
Special Revenue Funds:
Grant Management Fund - 12,844
Drug & Gambling Forfeiture Fund - 41,076
Police Activity Fund - 19,753
$73,673$73,673
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CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
Interfund receivables and payables of the HRA component unit at December 31, 2015 are as
follows:
InterfundInterfund
ReceivablesPayables
Due From/Due To:
General Fund$5,905,128$ -
Capital Projects Funds:
Lake Pointe - 325,303
Gateway East - 391,653
Gateway West - 440,109
Gateway Northeast - 3,388,173
BAE - 47,009
BAE Hazardous Sub District - 1,312,773
Northstar Transit Station - 108
$5,905,128$5,905,128
The above balances are not expected to be eliminated within one year of December 31, 2015.
Interfund Transfers:
Transfer InTransfer Out
Governmental Funds:
Major Funds:
General Fund (1) (4) (5) (6) (7) (8)$569,600$226,410
Special Assessment Debt Service (1) - 350,000
Street Improvements (1) - 131,000
Nonmajor Funds (3) (5) (6) (7) (8)495,81019,400
Total governmental funds1,065,410726,810
Proprietary Funds:
Water (2) - 154,194
Sewer (2)154,194 -
Liquor (3) (4) (5) - 338,600
Total$1,219,604$1,219,604
(1) Transfer of $569,000 to finance General Fund
(2) Transfer to Sewer for Water Fund share of project
(3) Transfer to Park Improvements for SPRING project
(4) Annual transfer to finance General Fund
(5) Transfer to Capital Equipment Fund
(6) Transfer to close the CHORE program to the General Fund
(7) Transfer to finance IT Improvement Fund
(8) Transfer to Police Activity Fund to clear negative fund balance
85
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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.
12. Fund Balance
A. CLASSIFICATIONS
At December 31, 2015, a summary of the governmental fund balance classifications are as
follows:
DebtStreetParkOtherTotalComponent
General FundServiceImprovementsImprovementsGovernmentalCityUnit
Nonspendable:
Inventory$53,969$ - $ - $ - $ - $53,969$ -
Prepaids12,296 - - - - 12,296 -
Mortgage loan receivable - - - - - - 825,129
Total nonspendable66,265000066,265825,129
Restricted for:
Donations19,376 - - - - 19,376 -
Debt service - 1,735,932 - - - 1,735,932 -
Tax increment - - - - - - 672,875
Cable television equipment - - - - 72,64072,640 -
Total restricted19,3761,735,9320072,6401,827,948672,875
Committed to:
Cable televitsion programming - - - - 1,456,0601,456,060 -
Recycling programs - - - - 85,88885,888 -
Nature Center activities - - - - 170,952170,952 -
Public improvements - - - - 576,104576,104 -
Police activity - - - - 1,7611,761 -
Capital equipment - - - - 418,873418,873 -
Housing loan program - - - - - - 2,188,718
Total committed00002,709,6382,709,6382,188,718
Assigned to:
Capital improvements - 5,401,4042,537,1881,680,9601,653,03611,272,588 -
Total assigned05,401,4042,537,1881,680,9601,653,03611,272,5880
Unassigned8,858,309 - - - (43,153)8,815,1563,738,032
Total$8,943,950$7,137,336$2,537,188$1,680,960$4,392,161$24,691,595$7,424,754
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, 2015, the unassigned fund balance of the General Fund was $8,858,309,
compared to its targeted unassigned fund balance of between $5,546,730 and $7,923,900.
86
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
13. Tax Increment Districts
The HRA is the administering authority for the following Tax Increment Districts:
FiscalRetained
YearTax Capacity ValuesDisparityBy
EstablishedDistrictDistrict NameCurrentOriginalCapturedAdjustmentsAuthority
19856 Lake Pointe$831,964$326,940$505,024$ - $505,024
19899 Onan/Old Central Ave339,015 42,902 296,113 - 296,113
199211 University/Osborne73,652 26,478 47,174 - 47,174
199212 McGlynn's66,430 41,254 25,176 - 25,176
199513 Satellite Lane Apartments35,195 1,438 33,757 - 33,757
199716 57th Ave Replacement25,746 7,301 18,445 - 18,445
200017 Gateway East31,184 3,365 27,819 - 27,819
200718 Gateway West19,134 4,112 15,022 - 15,022
200719 Main Street162,834 45,628 117,206 - 117,206
201320 TIF 20 HSS 20A276,316 - 276,316 - 276,316
1995HR1/Q2Housing Replacement1,854 191 1,663 - 1,663
1995HR1/Q3Housing Replacement1,453 236 1,217 - 1,217
1995HR1/Q4Housing Replacement4,847 469 4,378 - 4,378
1995HR1/S3Housing Replacement1,989 310 1,679 - 1,679
1995HR1/S4Housing Replacement2,151 338 1,813 - 1,813
1995HR1/S5Housing Replacement1,428 225 1,203 - 1,203
1995HR1/S6Housing Replacement1,571 266 1,305 - 1,305
1995HR1/V6Housing Replacement3,280 316 2,964 - 2,964
1995HR1/T7Housing Replacement1,828 384 1,444 - 1,444
1995HR1/V9Housing Replacement1,680 286 1,394 - 1,394
1995HR1/W1Housing Replacement1,471 357 1,114 - 1,114
1995HR1/W2Housing Replacement1,385 286 1,099 - 1,099
1995HR1/W6Housing Replacement5,314 516 4,798 - 4,798
1995HR1/W7Housing Replacement 1,869 170 1,699 - 1,699
1995HR1/X2Housing Replacement 3,478 3,674 (196)196 -
1995HR1/X8Housing Replacement 2,603 503 2,100 - 2,100
1995HR1/Y2Housing Replacement 534 302 232(232) -
1995HR1/Y1Housing Replacement 1,216 335 - 881881
1995HR1/X2Northstar Transit Station1,161,342 1,221,288 (59,946)59,946 -
Totals$3,062,763$1,729,870$1,332,893$59,910$1,392,803
14. 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
87
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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.
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, 2015, the Self Insurance Fund has accumulated equity in the amount of
$1,312,857 to cover future claims and losses.
B. Litigation
The City attorney and management 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 and management, 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, 2015.
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.
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 90% of 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.
88
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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, 2015 is as follows:
Original InterestMaturity
NotePrincipalRateDate
Medtronic$20,000,0006.75%August 1, 2025
Main Street1,500,0007.00%February 1, 2025
Hazardous Substance4,500,0003.50%June 1, 2033
F. Construction Commitments
At December 31, 2015, the City had construction project contracts in progress. The commitments
related to the remaining contract balances amounted to $3,759,826
15. Leases
A. Lease Expense
The City leases space for one of its liquor stores. Total costs for this lease was $192,520 for the
year ended December 31, 2015. The future minimum lease payments for this lease are as
follows:
Year Ending
December 31,Amount
2016$126,778
2017126,778
2018105,649
Total$359,205
89
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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, 2015, totaled $359,622. Terms of each
lease are as follows:
Next
(passive)
Annual LeaseRenewal Renewal TermFinal Lease
Lessee / LocationAdjustment Factor*DateDurationDate
T-Mobile - TH65 Tower #2Greater of 3% or CPI-U12/31/20165 Years31-Dec-16
TTM - Commons Tower #1Greater of 4% or CPI-U11/17/20195 Years17-Nov-34
TTM - TH65 Tower #2Greater of 4% or CPI-U11/17/20195 Years17-Nov-34
Clearwire - Commons Tower #1Greater of 4% or CPI-U2/22/20205 Years22-Feb-35
AT&T - Marion HillsGreater of 5% or CPI-U7/1/20205 Years1-Jul-25
T-Mobile - Commons Tower #1Greater of 2% or CPI-U up to 5%3/27/20205 Years28-Mar-30
Verizon - Commons Tower #13%6/6/20185 Years6-Jun-38
Clearwire - Marion HillsGreater of 4% or CPI-U2/22/20205 Years22-Feb-35
Clearwire - TH65 Tower #2Greater of 4% or CPI-U2/22/20205 Years22-Feb-35
T-Mobile - Marion HillsGreater of 2% or CPI-U up to 5%9/30/20165 Years30-Sep-21
Sprint - TH65 Tower #2Greater of 5% or CPI-U10/1/20205 Years1-Oct-25
Crown Castle - Well #13Greater of 5% or CPI-U11/6/20185 Years6-Nov-23
Crown Castle - Public Works GarageGreater of 5% or CPI-U11/30/20185 Years30-Nov-28
Verizon - TH65 Tower #23%2/6/20195 Years6-Feb-34
*Amounts for future lease receipts are unavailable because they are based on the
Consumer Price Index.
16. 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, 2015, there were 32 series of Industrial Revenue Bonds issued. The aggregate
principal amount payable for the eight series issued after July 1, 1995 is $24,506,275. 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.
90
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
17. Deficit Fund Balances
At December 31, 2015, individual funds with a deficit fund balance are as follows:
Primary government:
Non major Special Revenue Fund:
Drug and Gambling Forfeiture$43,153
Component unit:
Lake Pointe385,927
Gateway East381,951
Gateway West409,030
Main Street4,656
Gateway NorthEast3,198,327
BAE48,410
BAE Hazardous Sub District1,312,372
Northstar Transit Station315
18. 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, 2015 is $3,840,667. 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.
In 2014, the HRA entered into an agreement with Cielo Partners LLC for the sale of land from the HRA to
Cielo Partners LLC for the sum of $1.00. Per the agreement Cielo Partners LLC is to complete certain
performance obligations to complete the site improvements. If these performance obligations are not met
then Cielo Partners LLC will obligated to pay the HRA for an amount up to $1,700,000. The HRA feels
that these obligations will be met and therefore has chosen not to record a receivable for the sale of land
to Cielo Partners LLC.
19. Recently Issued Accounting Standards
The Governmental Accounting Standards Boards (GASB) recently approved the following
statements which were not implemented for these financial statements:
Statement No. 72
Fair Value Measurement and Application. The provisions of this Statement
are effective for financial statements for periods beginning after June 15, 2015.
91
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
Statement No. 73
Accounting and Financial Reporting for Pensions and Related Assets That
Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of
GASB Statements 67 and 68. The provisions in Statement 73 are effective for fiscal years
beginning after June 15, 2015 – except those provisions that address employers and
governmental nonemployer contributing entities for pensions that are not within the scope of
Statement 68, which are effective for fiscal years beginning after June 15, 2016.
Statement No. 74
Financial Reporting for Postemployment Benefit Plans Other Than
Pension Plans. The provisions in Statement 74 are effective for fiscal years beginning after
June 15, 2016.
Statement No. 75
Accounting and Financial Reporting for Postemployment Benefits Other
Than Pensions. The provisions in Statement 75 are effective for fiscal years beginning after
June 15, 2017.
Statement No. 76
The Hierarchy of Generally Accepted Accounting Principles for State and
Local Governments. The provisions in Statement 76 are effective for reporting periods
beginning after June 15, 2015.
Statement No. 77
Tax Abatement Disclosures. The provisions of this Statement are effective
for reporting periods beginning after December 31, 2015.
Statement No. 78
Pensions Provided through Certain Multiple-Employer Defined Benefit
Pension Plans. The provisions of this Statement are effective for reporting periods beginning
after December 15, 2015.
Statement No. 79
Certain External Investment Pools and Pool Participants. The provisions
of this Statement are effective for reporting periods beginning after June 15, 2015, except for
certain provisions on portfolio quality, custodial credit risk, and shadow pricing which are
effective for reporting periods beginning after December 15, 2015.
Statement No. 80
Blending Requirements for Certain Component Units. The provisions of
this Statement are effective for reporting periods beginning after June 15, 2016.
Statement No. 81
Irrevocable Split – Interest Agreements.. The provisions of this Statement
are effective for reporting periods beginning after June 15, 2016.
The effect these standards may have on future financial statements is not determinable at this
time, but it is expected that Statement No. 75 will have a material impact.
20. Change in Accounting Principle/Prior Period Adjustment
For the year ended December 31, 2015, the City implemented GASB Statement No. 68,
Accounting and Financial Reporting for Pensions – an Amendment of GASB Statement No. 27.
GASB 68 addresses accounting and financial reporting for pension plans that are provided to
employees of state and local governments. The standard requires the City to record its share
of the net pension liability of defined benefit plans, as well as any corresponding deferred
inflows and outflows of resources. See Note 7 for further information.
92
CITY OF FRIDLEY, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
The standard required retroactive implementation which resulted in a restatement of net
position as of December 31, 2014. Certain amounts necessary to fully restate 2014 financial
information are not determinable, therefore, prior year comparative amounts have not been
restated.
On January 1, 2015 the City also recorded a prior period adjustment in the Park Improvements
Fund. Revenues and fund balance previously reported were understated due to grant
expenditures that had occurred but had not been submitted for reimbursement. Details of the
prior period adjustment are as follows:
Internal Governmental
ServicesFund
Governmental Employee Park
ActivitiesBenefitsImprovement
Net position/fund balance - January 1, 2015, as previously reported$42,182,000$70,686$1,770,140
Prior period adjustment:
Grant revenue70,595 - 70,595
Deferred outflows of resources - pension related502,848502,848 -
Net pension liability(9,441,843)(9,441,843) -
Net position/fund balance - January 1, 2015 as restated$33,313,600($8,868,309)$1,840,735
21. Subsequent Events
On May 9, 2016, the City of Fridley, Minnesota issued General Obligation Water Revenue
Bonds, series 2016A in the amount of $5,995,000. The issuance included $4,315,000 to fund
water utility infrastructure projects scheduled in 2016 and 2017. In addition, the City included a
crossover refunding of existing G.O. Water Revenue Bonds of 2006B of $1,680,000 to save an
additional $159,000 in future interest.
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REQUIRED SUPPLEMENTARY INFORMATION
95
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, 2015
With comparative actual amounts for the year ended December 31, 2014
2015
Variance with
Final Budget - 2014
Budgeted AmountsActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Revenues:
Taxes and special assessments:
Current ad valorem taxes$10,391,600$10,391,600$10,415,715$24,115$10,110,812
Delinquent ad valorem taxes-net of abatements50,00050,00031,340(18,660)(23,087)
Penalties and interest25,00025,00022,825(2,175)23,302
Special assessments27,20022,20021,009(1,191)19,080
Total taxes and special assessments10,493,80010,488,80010,490,8892,08910,130,107
Licenses and permits:
Licenses:
Rental182,500182,500165,486(17,014)161,393
Business76,40080,40089,5609,16090,601
All other31,90031,90032,62572527,775
Permits604,6001,041,300979,863(61,437)619,728
Total licenses and permits895,4001,336,1001,267,534(68,566)899,497
Intergovernmental revenue:
Federal grants58,00048,00037,532(10,468)81,090
State maintenance aid365,000380,000430,69950,699368,477
Local grants3,5003,5005,7842,2845,592
Other state grants5,6002,000 - (2,000)12,923
Police and fire pension450,900458,400498,64340,243470,920
Total intergovernmental revenue883,000891,900972,65880,758939,002
Charges for services:
General government834,700834,700839,7895,0891,478,890
Public safety403,700408,500402,298(6,202)352,825
Public works392,300392,300367,126(25,174)1,435
Community development49,80066,10053,716(12,384)41,201
Recreation206,500206,500238,28231,782215,411
Total charges for services1,887,0001,908,1001,901,211(6,889)2,089,762
Fines and forfeits195,000180,000155,499(24,501)179,484
Investment income:
Interest and dividends70,00070,00082,64112,64193,408
Net change in the fair market value of investments - - (23,249)(23,249)94,135
Total investment income70,00070,00059,392(10,608)187,543
Miscellaneous revenue:
Insurance and other reimbursements105,00083,00069,038(13,962)112,484
Gambling tax52,00052,00064,86412,86455,654
Donations16,50022,90013,625(9,275)16,987
Miscellaneous11,6007,60065,33957,73914,807
Total miscellaneous revenue185,100165,500212,86647,366199,932
Total revenues14,609,300 15,040,400 15,060,049 19,649 14,625,327
96
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, 2015
With comparative actual amounts for the year ended December 31, 2014
2015
Variance with
Final Budget - 2014
Budgeted AmountsActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Expenditures:
General government:
City management:
Mayor and council:
Current:
Personal services$100,200$100,200$94,728$5,472$98,409
Supplies and other charges33,80033,80034,564(764)29,788
Total mayor and council134,000134,000129,2924,708128,197
City manager:
Current:
Personal services279,100262,300264,655(2,355)260,897
Supplies and other charges103,600103,60058,08045,52064,091
Total city manager382,700365,900322,73543,165324,988
Human resources:
Current:
Personal services203,400203,400202,3801,020196,857
Supplies and other charges41,30039,90059,902(20,002)9,460
Total human resources244,700243,300262,282(18,982)206,317
Elections:
Current:
Personal services - - 272(272)42,292
Supplies and other charges6,7006,6006,4601406,255
Total elections6,7006,6006,732(132)48,547
City clerk/records:
Personal services94,00094,00091,3332,66795,031
Supplies and other charges10,90010,9002,6518,24913,713
Total city clerk/records104,900104,90093,98410,916108,744
Legal:
Current:
Supplies and other charges432,400432,400368,65063,750416,701
Total city management1,305,4001,287,1001,183,675103,4251,233,494
Finance:
Accounting:
Current:
Personal services605,700631,500617,94413,556590,525
Supplies and other charges86,10078,40081,923(3,523)62,086
Total accounting691,800709,900699,86710,033652,611
Assessing:
Current:
Personal services260,400260,400252,5557,845244,192
Supplies and other charges9,4009,4004,7094,69120,313
Total assessing269,800269,800257,26412,536264,505
MIS:
Current:
Personal services224,500224,500213,12711,373219,657
Supplies and other charges84,000109,00088,33120,66951,882
Total MIS308,500333,500301,45832,042271,539
Total finance1,270,1001,313,2001,258,58954,6111,188,655
Nondepartmental:
Current:
Personal services60,000 - - - -
Supplies and other charges17,50017,50015,5141,98612,411
Total nondepartmental77,50017,50015,5141,98612,411
97
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, 2015
With comparative actual amounts for the year ended December 31, 2014
2015
Variance with
Final Budget - 2014
Budgeted AmountsActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Expenditures: (continued)
General government: (continued)
Municipal center:
Current:
Personal services$103,800$103,800$104,100($300)$22,474
Supplies and other charges214,400214,400201,47712,923212,833
Total municipal center318,200318,200305,57712,623235,307
Total general government2,971,2002,936,0002,763,355172,6452,669,867
Public safety:
Police:
Police protection:
Current:
Personal services5,217,3005,241,3005,098,094143,2065,030,761
Supplies and other charges541,500568,700572,721(4,021)548,369
Total police protection5,758,8005,810,0005,670,815139,1855,579,130
Civil defense:
Current:
Supplies and other charges17,00016,60012,2894,31111,663
Capital Outlay - - - - 58,835
Total civil defense17,00016,60012,2894,31170,498
Total police5,775,8005,826,6005,683,104143,4965,649,628
Fire:
Fire protection:
Current:
Personal services1,008,8001,072,8001,072,4893111,136,874
Supplies and other charges316,300333,200332,866334206,174
Total fire protection1,325,1001,406,0001,405,3556451,343,048
Rental inspections:
Current:
Personal services142,700153,000149,9183,082157,677
Supplies and other charges24,60017,9008,9948,90622,652
Total rental inspections167,300170,900158,91211,988180,329
Total public safety7,268,2007,403,5007,247,371156,1297,173,005
Public works:
Engineering:
Current:
Personal services227,400227,400150,33377,067501,671
Supplies and other charges61,40061,400113,420(52,020)97,376
Capital outlay - - - - 37,746
Total engineering288,800288,800263,75325,047636,793
Public works and parks:
Current:
Personal services1,705,3001,705,3001,661,19644,1041,689,248
Supplies and other charges958,400958,400880,66377,737952,524
Total public works and parks2,663,7002,663,7002,541,859121,8412,641,772
Total public works2,952,5002,952,5002,805,612146,8883,278,565
98
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, 2015
With comparative actual amounts for the year ended December 31, 2014
2015
Variance with
Final Budget - 2014
Budgeted AmountsActualPositiveActual
OriginalFinalAmounts(Negative)Amounts
Expenditures: (continued)
Community development:
Building inspection:
Current:
Personal services$285,600$294,300$295,632($1,332)$267,331
Supplies and other charges167,300248,000247,728272124,516
Total building inspection452,900542,300543,360(1,060)391,847
Planning:
Current:
Personal services447,400485,800478,5247,276439,334
Supplies and other charges68,60069,00059,6659,33563,604
Total planning516,000554,800538,18916,611502,938
Total community development968,9001,097,1001,081,54915,551894,785
Parks and recreation:
Current:
Personal services624,000624,000625,280(1,280)599,769
Supplies and other charges274,100276,800253,75223,048276,985
Total parks and recreation898,100900,800879,03221,768876,754
Contingency:
Current:
Supplies and other charges120,000 - - - -
Total expenditures15,178,90015,289,90014,776,919512,98114,892,976
Excess (deficiency) of revenues over
(under) expenditures(569,600)(249,500)283,130532,630(267,649)
Other financing sources (uses):
Transfers in569,600569,600569,600 - 672,865
Transfers out - (225,000)(226,410)(1,410)(175,000)
Total other financing sources569,600344,600343,190(1,410)497,865
Net change in fund balance$0$95,100626,320$531,220230,216
Fund balance - January 18,317,6308,087,414
Fund balance - December 31$8,943,950$8,317,630
99
Exhibit B-2
CITY OF FRIDLEY, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF FUNDING PROGRESS - RETIREE HEALTH PLAN
For The Year Ended December 31, 2015
Unfunded
ActuarialActuarialUAAL as a
ActuarialActuarialAccruedAccruedFundedCoveredPercentage of
ValuationValue of AssetsLiability (AAL)*Liability (UAAL)RatioPayrollCovered Payroll
Date(a)(b)(b-a)(a/b)(c) ( (b-a) / c)
January 1, 2014$ - $494,791$494,7910.0%$8,855,2965.6%
January 1, 2011$ - $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.
100
Exhibit B-3
CITY OF FRIDLEY, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY* -
GENERAL EMPLOYEES RETIREMENT FUND
For The Year Ended December 31, 2015
Proportionate Share
Proportionateof the Net PensionPlan Fiduciary
ProportionShare (Amount)Liability as aNet Position as
(Percentage) ofof the NetCovered-Percentage of itsa Percentage
Measurement Fiscal Yeathe Net PensionPensionEmployeeCovered-Employeeof the Total
r
DateEndingLiabilityLiability (a)Payroll (b)Payroll (a/b)Pension Liability
June 30, 2015December 31, 20150.1004%$5,203,249$5,903,61188.1%78.2%
* The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to
show a ten year trend. Additional years will be reported as they become available.
101
Exhibit B-4
CITY OF FRIDLEY, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF PENSION CONTRIBUTIONS* - GENERAL EMPLOYEES RETIREMENT FUND
For The Year Ended December 31, 2015
StatutorilyContributions inContributionCovered-Contributions as a
Required Relation to theDeficiencyEmployeePercentage of
Fiscal YearContributionStatutorily Required(Excess)PayrollCovered-Employee
Ending(a)Contribution (b)(a-b)(c)Payroll (b/c)
December 31, 2015$466,069$466,069$ - $6,214,2537.5%
* The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is
intended to show a ten year trend. Additional years will be reported as they become available.
102
Exhibit B-5
CITY OF FRIDLEY, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY* -
PUBLIC EMPLOYEES POLICE AND FIRE FUND
For The Year Ended December 31, 2015
Proportionate Share
Proportionateof the Net PensionPlan Fiduciary
ProportionShare (Amount)Liability as aNet Position as
(Percentage) ofof the NetCovered-Percentage of itsa Percentage
Measurement Fiscal Yearthe Net PensionPensionEmployeeCovered-Employeeof the Total
DateEndingLiabilityLiability (a)Payroll (b)Payroll (a/b)Pension Liability
June 30, 2015December 31, 20150.4170%$4,738,096$3,821,428124.0%86.6%
* The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to
show a ten year trend. Additional years will be reported as they become available.
103
Exhibit B-6
CITY OF FRIDLEY, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF PENSION CONTRIBUTIONS* - PUBLIC EMPLOYEES POLICE AND FIRE FUND
For The Year Ended December 31, 2015
StatutorilyContributions inContributionCovered-Contributions as a
Required Relation to theDeficiencyEmployeePercentage of
Fiscal YearContributionStatutorily Required(Excess)PayrollCovered-Employee
Ending(a)Contribution (b)(a-b)(c)Payroll (b/c)
December 31, 2015$644,283$644,283$ - $3,977,05616.2%
* The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is
intended to show a ten year trend. Additional years will be reported as they become available.
104
CITY OF FRIDLEY, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
NOTES TO RSI
December 31, 2015
A. LEGAL COMPLIANCE – 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.
B. PENSION INFORMATION
PERA – General Employees Retirement Fund
There are no factors that affect trends in the amounts reported, such as change of benefit terms or
assumptions. With only one year reported in the RSI, there is no additional information to include in the
notes. Details can be obtained from the financial reports of PERA.
PERA – Public Employees Police and Fire Fund
There are no factors that affect trends in the amounts reported, such as change of benefit terms or
assumptions. With only one year reported in the RSI, there is no additional information to include in the
notes. Details can be obtained from the financial reports of PERA.
105
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106
COMBINING AND INDIVIDUAL FUND STATEMENTS AND
SCHEDULES
107
NONMAJOR GOVERNMENTAL FUNDS
108
SPECIAL REVENUE FUNDS
A Special Revenue Fund accounts for revenues derived from specific taxes or other earmarked
revenue sources. They are usually required by statute or local ordinance and/or resolution to
finance particular functions, activities or governments.
CAPITAL PROJECT FUNDS
The Capital Project Funds are used to account for the resources expended to
acquire permanent or long-term assets.
109
Exhibit C-1
CITY OF FRIDLEY, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2015
With comparative amounts for the year ended December 31, 2014
Total Nonmajor Governmental
Special RevenueCapital ProjectFunds
20152014
Assets
Cash and investments$1,665,588$2,928,563$4,594,151$6,249,598
Receivables:
Accounts98,148 - 98,14899,517
Taxes8,178 - 8,1787,924
Special assessments - 87,71987,71990,744
Due from other governments112,247 - 112,24776,192
Total assets$1,884,161$3,016,282$4,900,44$6,523,97
35
Liabilities, Deferred Inflows of Resources, and Fund Balance
Liabilities:
Accounts payable$51,865$266,937$318,802$103,586
Contracts payable - - - 69,760
Due to other governments - 13,61313,613599
Due to other funds73,673 - 73,67397,712
Salaries payable9,165 - 9,16526,109
Unearned revenue - - - 17,579
Total liabilities134,703280,550415,253315,345
Deferred inflows of resources:
Unavailable revenue5,31087,71993,02982,562
Total deferred inflows of resources5,31087,71993,02982,562
Fund balance:
Restricted72,640 - 72,640158,885
Committed1,714,661994,9772,709,6382,566,101
Assigned - 1,653,0361,653,0363,498,794
Unassigned(43,153) - (43,153)(97,712)
Total fund balance1,744,1482,648,0134,392,1616,126,068
Total liabilities, deferred inflows
of resources, and fund balance$1,884,161$3,016,282$4,900,443$6,523,975
110
Exhibit C-2
CITY OF FRIDLEY, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2015
With comparative amounts for the year ended December 31, 2014
Special CapitalTotal Nonmajor
RevenueProjectGovernmental Funds
20152014
Revenues:
Taxes$344,817$50,000$394,817$511,444
11,70411,70425,252
Special assessments -
Licenses and permits282,251 - 282,251271,868
Intergovernmental revenue197,3801,290,4771,487,8571,611,119
Charges for services444,38529,300473,685428,300
Fines and forfeits29,441 - 29,44147,438
Investment income:
Interest and dividends17,41317,54134,95437,718
Net change in the fair value of investments(4,911)(5,146)(10,057)86,157
Miscellaneous107,84043,772151,612114,484
Total revenues1,418,616 1,437,648 2,856,264 3,133,780
Expenditures:
Current:
General government792,607207,9331,000,5401,062,189
Public safety72,193 - 72,19351,508
Public works - - - 16,307
Parks and recreation409,652 - 409,652545,651
Capital outlay135,4231,677,9031,813,3261,193,427
Total expenditures1,409,8751,885,8363,295,7112,869,082
Excess (deficiency) of revenues over (under) expenditures8,741 (448,188)(439,447)264,698
Other financing sources (uses):
Proceeds from sale of capital assets - 93,67093,67036,836
Transfers in101,410300,000401,4104,608,871
Transfers out(19,400) - (19,400)(6,896,485)
Total other financing sources (uses)82,010 393,670 475,680 (2,250,778)
Net change in fund balance90,751 (54,518)36,233 (1,986,080)
Fund balance - January 1, as previously reported1,653,3972,702,5314,355,9288,112,148
Prior period adjustment - - - -
Fund balance - January 1, as restated1,653,3972,702,5314,355,9288,112,148
Fund balance - December 31
$1,744,148$2,648,013$4,392,161$6,126,068
Reconciliation of beginning fund balance
to prior year ending fund balance:
Prior year ending fund balance reported above$6,126,068
Add prior year ending fund balance for funds reported
as nonmajor in prior year and major in current year:
Park improvements(1,770,140)
Current year beginning fund balance$4,355,928
111
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112
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.
113
CITY OF FRIDLEY, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2015
With comparative amounts for the year ended December 31, 2014
GrantSolid Waste
AssetsCable TVManagementAbatement
Cash and investments$1,466,215$ - $24,175
Receivables:
Accounts71,507 - 26,641
Taxes - - -
Due from other governments - 12,84475,905
Total assets$1,537,722$12,844$126,721
Liabilities, Deferred Inflows of Resources, and Fund Balance
Liabilities:
Accounts payable$6,561$ - $40,243
Due to other governments - - -
Due to other funds - 12,844 -
Salaries payable2,461 - 590
Unearned revenue - - -
Total liabilities9,02212,84440,833
Deferred inflows of resources:
Unavailable revenue - - -
Total deferred inflows of resources - - -
Fund balance:
Restricted72,640 - -
Committed1,456,060 - 85,888
Unassigned - - -
Total fund balance1,528,700085,888
Total liabilities, deferred inflows
of resources, and fund balance$1,537,722$12,844$126,721
114
Exhibit C-3
Drug and Gambling Springbrook Nature
ForfeiturePolice ActivityCenter
Totals Nonmajor Special Revenue Funds
20152014
$ - $ - $175,198$1,665,588$1,662,295
- - - 98,14899,517
- - 8,1788,1787,765
- 23,498 - 112,24774,712
$0$23,498$183,376$1,884,161$1,844,289
$2,077$313$2,671$51,865$43,283
- - - - 599
41,07619,753 - 73,67397,712
- 1,6714,4439,16526,109
- - - - 17,579
43,15321,7377,114134,703185,282
- - 5,3105,3105,610
- - 5,3105,3105,610
- - - 72,640158,885
- 1,761170,9521,714,6611,592,224
(43,153) - - (43,153)(97,712)
(43,153)1,761170,9521,744,1481,653,397
$0$23,498$183,376$1,884,161$1,844,289
115
CITY OF FRIDLEY, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31, 2015
With comparative totals for the year ended December 31, 2014
GrantSolid Waste
Cable TVManagementAbatement
Revenues:
Taxes$ - $ - $ -
Licenses and permits282,251 - -
Intergovernmental revenue - 102,51194,869
Charges for services1,144 - 292,352
Fines and forfeits - - -
Investment income:
Interest and dividends16,129 - -
Net change in the fair value of investments(4,394) - -
Miscellaneous35,21311,11922,810
Total revenues330,343113,630410,031
Expenditures:
Current:
General government262,606115,040410,887
Public safety - - -
Parks and recreation - - -
Capital outlay - - -
Total expenditures262,606115,040410,887
Excess (deficiency) of revenues
over (under) expenditures67,737(1,410)(856)
Other financing sources (uses):
Transfers in -1,410 -
Transfers out - - -
Total other financing sources (uses)01,4100
Net change in fund balance67,7370(856)
Fund balance - January 11,460,963 -86,744
Fund balance - December 31$1,528,700$0$85,888
116
Exhibit C-4
Drug and
GamblingSpringbrook
ForfeiturePolice ActivityNature Center
Totals Nonmajor Special Revenue Funds
20152014
$ - $ - $344,817$344,817$336,374
- - - 282,251271,868
- - - 197,380267,819
- 52,32498,565444,385400,573
29,441 - - 29,44147,438
- - 1,28417,41316,372
- - (517)(4,911)20,487
- - 38,698107,84036,794
29,44152,324482,8471,418,6161,397,725
- 4,074 - 792,607754,061
23,41648,777 - 72,19351,508
- - 409,652409,652401,792
135,423 - - 135,42312,255
158,83952,851409,6521,409,8751,219,616
(129,398)(527)73,1958,741178,109
- 100,000 - 101,410 -
- - (19,400)(19,400)(51,865)
0100,000(19,400)82,010(51,865)
(129,398)99,47353,79590,751126,244
86,245(97,712)117,1571,653,3971,527,153
($43,153)$1,761$170,952$1,744,148$1,653,397
117
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118
NONMAJOR CAPITAL PROJECT FUNDS
The Special Assessment Construction Capital Projects Fund - is established 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.
Building Improvements Fund - is established to account for repair or replacement
of major buildings or building related improvements.
Information System Improvement Fund- is established to account for the
purchase of new equipment and replacement equipment such as computers,
local area and wide area network equipment, printers, peripheral devices,
telecommunications improvements, copiers and software.
The Capital Equipment Fund - is used to account for the purchase and repair of
major capital equipment.
119
CITY OF FRIDLEY, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
December 31, 2015
With comparative totals for the year ended December 31, 2014
Special
AssessmentBuilding
AssetsConstructionImprovements
Cash and investments$585,463$1,480,883
Receivables:
Taxes - -
Special assessments87,719 -
Due from other governments - -
Total assets$673,182$1,480,883
Liabilities, Deferred Inflows of Resources, and Fund Balance
Liabilities:
Accounts payable$6,112$21,072
Contracts payable - -
Due to other governments3,24710,366
Total liabilities9,35931,438
Deferred inflows of resources:
Unavailable revenue87,719 -
Total deferred inflows of resources87,719 -
Fund balance:
Committed576,104 -
Assigned - 1,449,445
Total fund balance576,1041,449,445
Total liabilities, deferred inflows
of resources, and fund balance$673,182$1,480,883
120
Exhibit C-5
Information System
ImprovementCapital Equipment
Totals Nonmajor Capital Project Funds
20152014
$205,996$656,221$2,928,563$4,587,303
- - - 159
- - 87,71990,744
- - - 1,480
$205,996$656,221$3,016,282$4,679,686
$2,405$237,348$266,937$60,303
- - - 69,760
- - 13,613 -
2,405237,348280,550130,063
- - 87,71976,952
- - 87,71976,952
- 418,873994,977973,877
203,591 - 1,653,0363,498,794
203,591418,8732,648,0134,472,671
$205,996$656,221$3,016,282$4,679,686
121
CITY OF FRIDLEY, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECT FUNDS
For The Year Ended December 31, 2015
With comparative totals for the year ended December 31, 2014
Special Assessment
ConstructionBuilding
Capital ProjectsImprovements
Revenues:
Taxes$ - $ -
Special assessments11,704 -
Intergovernmental revenue - 250,000
Charges for services8,112 -
Investment income:
Interest and dividends28215,322
Net change in the fair value of investments - (4,923)
Miscellaneous - -
Total revenues20,098260,399
Expenditures:
Current:
General government35,60412,700
Public works - -
Parks and recreation - -
Capital outlay - 195,514
Total expenditures35,604208,214
Excess (deficiency) of revenues
over (under) expenditures(15,506)52,185
Other financing sources (uses):
Proceeds from sale of capital assets - -
Transfers in - -
Transfers out - -
Total other financing sources (uses)00
Net change in fund balance(15,506)52,185
Fund balance - January 1591,6101,397,260
Fund balance - December 31$576,104$1,449,445
122
Exhibit C-6
Information System
ImprovementCapital Equipment
Totals Nonmajor Capital Project Funds
20152014
$50,000$ - $50,000$175,070
- - 11,70425,252
- 1,040,4771,290,4771,343,300
21,188 - 29,30027,727
7471,19017,54121,346
82(305)(5,146)65,670
43,772 - 43,77277,690
115,7891,041,3621,437,6481,736,055
159,629 - 207,933308,128
- - - 16,307
- - - 143,859
208,9631,273,4261,677,9031,181,172
368,5921,273,4261,885,8361,649,466
(252,803)(232,064)(448,188)86,589
- 93,67093,67036,836
125,000175,000300,0004,608,871
- - - (6,844,620)
125,000268,670393,670(2,198,913)
(127,803)36,606(54,518)(2,112,324)
331,394382,2672,702,5316,584,995
$203,591$418,873$2,648,013$4,472,671
Reconciliation of beginning fund balance
to prior year ending fund balance:
Prior year ending fund balance reported above$4,472,671
Less prior year ending fund balance for funds reported
as non major in prior year and major in current year:
Park Improvements(1,770,140)
Current year beginning fund balance$2,702,531
123
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124
INDIVIDUAL BUDGET TO ACTUAL STATEMENTS
SPECIAL REVENUE FUNDS
125
Exhibit D-1
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, 2015
With comparative actual amounts for the year ended December 31, 2014
20152014
Budgeted AmountsActualActual
OriginalFinalAmountsAmounts
Revenues:
Licenses - franchise fee$286,000$286,000$282,251$271,868
Charges for services8001,1001,1441,055
Investment income:
Interest and dividends10,00010,00016,12916,087
Net change in the fair value of investments - - (4,394)20,181
Miscellaneous - 10,20035,213 -
Total revenues296,800 307,300 330,343 309,191
Expenditures:
Current:
General government:
Personal services147,100147,100230,696193,187
Supplies and other charges123,300119,40031,91038,895
Capital outlay17,000 - - -
Total expenditures287,400 266,500 262,606 232,082
Excess (deficiency) of revenues over (under) expenditures$9,400$40,80067,73777,109
Fund balance - January 11,460,9631,383,854
Fund balance - December 31$1,528,700$1,460,963
126
Exhibit D-2
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, 2015
With comparative actual amounts for the year ended December 31, 2014
20152014
Budgeted AmountsActualActual
OriginalFinalAmountsAmounts
Revenues:
Taxes$345,900$345,900$344,817$336,374
Charges for service90,90086,30098,565112,097
Investment income:
Interest and dividends - - 1,284285
Net change in the fair value of investments - - (517)306
Miscellaneous - 30,00038,6989,175
Total revenues436,800462,200482,847458,237
Expenditures:
Current:
Parks, recreation and naturalist
Personal services332,600332,600323,866327,738
Supplies and other charges82,800112,80085,78674,054
Capital outlay - - - -
Total expenditures415,400 445,400 409,652 401,792
Excess (deficiency) of revenues
over (under) expenditures21,400 16,800 73,19556,445
Other financing sources:
Transfers out - - (19,400) -
Net change in fund balance$21,400$16,80053,795 0
Fund balance - January 1117,15760,712
Fund balance - December 31$170,952$117,157
127
Exhibit D-3
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, 2015
With comparative actual amounts for the year ended December 31, 2014
2015
2014
Budgeted AmountsActualActual
OriginalFinalAmountsAmounts
Revenues:
Intergovernmental:
Federal grants$30,000$6,300$18,969$74,754
State grants85,50083,60083,542112,377
Miscellaneous2,00010,00011,1196,267
Total revenues117,500 99,900 113,630 193,398
Expenditures:
Current:
Community development:
Personal services28,00023,30023,18924,502
Supplies and other charges89,50091,80091,851116,177
Total expenditures117,500 115,100 115,040 140,679
Excess (deficiency) of revenues over
(under) expenditures - (15,200)(1,410)52,719
Other financing sources:
Transfers in - - 1,410 -
Transfers out - - - (51,865)
Total other financing sources - - 1,410(51,865)
Net change in fund balance$0($15,200)0 854
Fund balance - January 1 - (854)
Fund balance - December 31$0$0
128
Exhibit D-4
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, 2015
With comparative actual amounts for the year ended December 31, 2014
20152014
Budgeted AmountsActualActual
OriginalFinalAmountsAmounts
Revenues:
Intergovernmental revenue:
State$84,000$123,500$94,869$80,688
Charges for services300,400293,900292,352287,421
Miscellaneous7,00013,00022,81021,352
Total revenues391,400 430,400 410,031 389,461
Expenditures:
Current:
General government:
Personal services57,90061,70049,73255,707
Supplies and other charges335,800362,400361,155325,593
Total expenditures393,700 424,100 410,887 381,300
Excess (deficiency) of revenues
over (under) expenditures($2,300)$6,300(856)8,161
Fund balance - January 186,74478,583
Fund balance - December 31$85,888$86,744
129
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130
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 and pension 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.
131
Exhibit E-1
CITY OF FRIDLEY, MINNESOTA
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
December 31, 2015
EmployeeSelf
BenefitsInsurance
Totals
Assets:2015
Cash and investments$1,180,804$1,314,539$2,495,343
Due from component unit - - -
Due from other governments - - -
Total assets1,180,8041,314,5392,495,343
Deferred outflows of resources:
Pension related2,037,863 - 2,037,863
Liabilities:
Current liabilities:
Accounts payable2521,6821,934
Salaries payable - - -
Payroll deductions payable98,631 - 98,631
Compensated absences payable -
current portion816,389 - 816,389
Total current liabilities915,2721,682916,954
Noncurrent liabilities:
Compensated absences payable187,589 - 187,589
Net pension liability9,941,345 - 9,941,345
Total liabilities11,044,2061,68211,045,888
Deferred inflows of resources:
Pension related1,326,638 - 1,326,638
Net position:
Unrestricted(9,152,177)1,312,857(7,839,320)
Total net position($9,152,177)$1,312,857($7,839,320)
132
Exhibit E-2
CITY OF FRIDLEY, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2015
EmployeeSelf
BenefitsInsurance
Totals
2015
Operating revenues:
Charges for services$1,134,243$164,162$1,298,405
Operating expenses:
Personal services1,461,551 - 1,461,551
Supplies and other charges3,695225,750229,445
Total operating expenses1,465,246225,7501,690,996
Operating income (loss)(331,003)(61,588)(392,591)
Nonoperating revenues:
Investment income:
Interest and dividends13,26413,97627,240
Net change in the fair value of investments(3,659)(3,517)(7,176)
Intergovernmental37,530 - 37,530
Insurance reimbursement - 10,25210,252
Miscellaneous - 1,9271,927
Total nonoperating revenues47,13522,63869,773
Income (loss) before transfers(283,868)(38,950)(322,818)
Other financing sources (uses):
Loss on disposal of capital assets - - -
Transfers out - - -
Total other financing sources (uses) - - -
Change in net position(283,868)(38,950)(322,818)
Net position - January 1, as previously reported70,6861,351,8071,422,493
Prior period adjustment(8,938,995) - (8,938,995)
Net position - January 1, as restated(8,868,309)1,351,807(7,516,502)
Net position - December 31($9,152,177)$1,312,857($7,839,320)
133
Exhibit E-3
CITY OF FRIDLEY, MINNESOTA
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2015
Employee
BenefitsSelf Insurance
Totals
2015
Cash flows from operating activities:
Receipts from interfund services provided$1,134,312$164,668$1,298,980
Payment to suppliers(3,623)(224,261)(227,884)
Payment to employees(1,219,481) - (1,219,481)
Net cash flows from operating activities(88,792)(59,593)(148,385)
Cash flows from noncapital financing activities:
Intergovernmental revenue37,530 - 37,530
Cash flows from capital and related
financing activities:
Insurance reimbursement - 12,17912,179
Net cash flows from capital and
and related financing activities 012,17912,179
Cash flows from investing activities:
Investment income9,60510,45920,064
Net increase (decrease) in cash and
cash equivalents(41,657)(36,955)(78,612)
Cash and cash equivalents - January 11,222,4611,351,4942,573,955
Cash and cash equivalents - December 31$1,180,804 $1,314,539 $2,495,343
Reconciliation of operating income (loss) to net
cash provided (used) by operating activities:
Operating income (loss) ($331,003)($61,588)($392,591)
Adjustments to reconcile operating income
(loss) to net cash flows from operating activities:
Changes in assets and liabilities:
Decrease (increase) in receivables69506575
Decrease (increase) in deferred
outflows of resources(1,535,015) - (1,535,015)
Increase (decrease) in payables450,5191,489452,008
Increase (decrease) in deferred
inflows of resources1,326,638 - 1,326,638
Total adjustments242,211 1,995 244,206
Net cash provided by operating activities($88,792)($59,593)($148,385)
134
HOUSING AND REDEVELOPMENT AUTHORITY
COMPONENT UNIT
135
CITY OF FRIDLEY, MINNESOTA
BALANCE SHEET - GOVERNMENTAL FUNDS
HOUSING AND REDEVELOPMENT AUTHORITY
December 31, 2015
With comparative totals for December 31, 2014
GeneralHousing LoanLake PointeGateway West
Assets
Cash and investments$5,063,906$2,192,462$219,703$31,319
Receivables:
Accounts62,166 - - -
Taxes9,339 -28988
Mortgage:
Deferred -848,005 - -
Allowance for uncollectible accounts -(22,876) - -
Interest26,169 - - -
Due from other funds5,905,128 - - -
Prepaid expenses - - - -
Land held for resale3,195,450 -80,3701,980
Total assets$14,262,158$3,017,591$300,362$33,387
Liabilities, Deferred Inflows of Resources, and Fund Balance
Liabilities:
Accounts payable$21,894$3,744$279,773$ -
Due to primary government1,558,849 - - -
Due to other governments200 - 556328
Due to other funds - - 325,303440,109
Total liabilities1,580,9433,744605,632440,437
Deferred inflows of resources:
Unavailable revenue3,202,195 - 80,6571,980
Total deferred inflows of resources3,202,195 - 80,6571,980
Fund balance (deficit):
Nonspendable - 825,129 - -
Restricted - - - -
Committed - 2,188,718 - -
Unassigned9,479,020 - (385,927)(409,030)
Total fund balance (deficit)9,479,0203,013,847(385,927)(409,030)
Total liabilities, deferred inflows
of resources, and fund balance$14,262,158$3,017,591$300,362$33,387
136
Exhibit F-1
BAEOther
HousingGatewayHazardousGovernmentalIntra - Activity
ReplacementNorthEast BAESub DistrictFundsEliminations
Totals Governmental Funds
20152014
$157,052$189,846$ - $ - $582,699$ - $8,436,987$8,971,879
- - - - - - 62,16667,935
- - - 1,394949 - 12,05916,644
- - - - - - 848,0051,007,194
- - - - - - (22,876)(74,427)
- - - - - - 26,16944,933
- - - - - (5,905,128) - -
- - - - - - - 245
112,811 - - - - - 3,390,6113,911,849
$269,863$189,846$0$1,394$583,648($5,905,128)$12,753,121$13,946,252
$ - $ - $ - $ - $45,261$ - $350,672$336,870
- - - - - - 1,558,8491,566,054
3,171 - 1,40110314,361 - 20,120 -
- 3,388,17347,0091,312,773391,761(5,905,128) - -
3,1713,388,17348,4101,312,876451,383(5,905,128)1,929,6411,902,924
112,811 - - 890193 - 3,398,7263,924,177
112,811 - - 890193 - 3,398,7263,924,177
- - - - - - 825,129933,012
153,881 - - - 518,994 - 672,875547,206
- - - - - - 2,188,7182,026,346
- (3,198,327)(48,410)(1,312,372)(386,922) - 3,738,0324,612,587
153,881(3,198,327)(48,410)(1,312,372)132,07207,424,7548,119,151
$269,863$189,846$0$1,394$583,648($5,905,128)$12,753,121$13,946,252
Fund balance reported above$7,424,754
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 funds2,023,511
Other long-term assets are not available to pay for current-period
expenditures and, therefore, reported as unavailable revenue3,398,726
Net position of governmental activities$12,846,991
137
CITY OF FRIDLEY, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
HOUSING AND REDEVELOPMENT AUTHORITY
For The Year Ended December 31, 2015
With comparative totals for the year ended December 31, 2014
GeneralHousing LoanLake PointeOnanGateway West
Revenues:
Tax increment$ - $ - $622,176$289,996$13,868
Property taxes357,968 - - - -
Investment income:
Interest and dividends55,31419,5337 - 695
Net change in the fair value of investments(9,293)(927)(2)1,059(63)
Mortgage interest earnings - 37,748 - - -
Rental10,400 - - - -
Intergovernmental999,973 - - - -
Sale of real estate123,983 - - - 28,600
Miscellaneous90,41721,631 - - -
Total revenues1,628,76277,985622,181291,05543,100
Expenditures:
Personal services152,290 - - - -
Supplies and other charges943,34323,25134,78930,7222,529
Capital outlay - - - - -
Developer assistance999,973 - 557,975 - -
Interest expense52,653 - - - -
Total expenditures2,148,25923,251592,76430,7222,529
Excess (deficiency) of revenues over
(under) expenditures(519,497)54,73429,417260,33340,571
Other financing sources:
Transfers in - - - - 89,741
Transfers out(489) - - (314,741) -
Total other financing sources (uses)(489)00(314,741)89,741
Net change in fund balance(519,986)54,73429,417(54,408)130,312
Fund balance (deficit) - January 19,999,0062,959,113(415,344)54,408(539,342)
Fund balance (deficit) - December 31$9,479,020$3,013,847($385,927)$0($409,030)
138
Exhibit F-2
BAEOther
HousingGatewayHazardousGovernmentalIntra-Activity
ReplacementNorthEast BAESub DistrictFundsEliminations
Totals Governmental Funds
20152014
$35,058$ - $ - $339,697$264,411$ - $1,565,206$1,573,163
- - - - - - 357,968380,010
1,2271,731(378)(5,711)4,670 - 77,08860,412
550(208)921,386(708) - (8,114)41,272
- - - - - - 37,74837,154
- - - - - - 10,4009,600
- - - - - - 999,9731,543,049
84,841 - - - - - 237,424281,287
- - - - - - 112,048136,464
121,6761,523(286)335,372268,37303,389,7414,062,411
- - - - - - 152,290138,846
24,611 - 15,9045,43552,780 - 1,133,364672,916
- - - - - - - 2,790,827
- - - 1,097,24390,640 - 2,745,8312,743,488
- - - - - - 52,6534,375
24,611015,9041,102,678143,42004,084,1386,350,452
97,0651,523(16,190)(767,306)124,9530(694,397)(2,288,041)
- - - - 242,976 - 332,7171,000,000
- - - - (17,487) - (332,717)(1,000,000)
0000225,489000
97,0651,523(16,190)(767,306)350,442 - (694,397)(2,288,041)
56,816(3,199,850)(32,220)(545,066)(218,370) - 8,119,15110,407,192
$153,881($3,198,327)($48,410)($1,312,372)$132,072$0$7,424,754$8,119,151
Amounts reported for governmental activities in the statement of activities
(Exhibit A-2) are different because:
Net changes in fund balances - total above($694,397)
Revenues in the statement of activities that do not provide current financial
resources are not reported as revenues in the funds.(525,451)
Changes in net position of governmental activities (Exhibit A-2)($1,219,848)
139
CITY OF FRIDLEY, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
HOUSING AND REDEVELOPMENT AUTHORITY
December 31, 2015
With comparative totals for December 31, 2014
University / McGlynn
Gateway EastOsborneBakeries
Assets
Cash and investments$10,758$264,036$119,889
Taxes receivable -67 -
Total assets$10,758$264,103$119,889
Liabilities, Deferred Inflows of Resources, and Fund Balance
Liabilities:
Accounts payable$ - $ - $ -
Due to other governments1,056956939
Due to other funds391,653 - -
Total liabilities392,709 956 939
Deferred inflows of resources:
Unavailable revenue - 55 -
Total deferred inflows of resources0 55 0
Fund balance (deficit):
Restricted - 263,092118,950
Unassigned(381,951) - -
Total fund balance (deficit)(381,951)263,092 118,950
Total liabilities, deferred inflows
of resources, and fund balance$10,758$264,103$119,889
140
Exhibit F-3
Satellite Lane 57th Avenue Northstar
Total Nonmajor Capital Project
Apts.RedevelopmentMain StreetTransit Station
Funds
20152014
$137,227$9,746$41,043$ - $582,699$498,381
712 - 170 - 9491,643
$137,939$9,746$41,213$0$583,648$500,024
$ - $ - $45,261$ - $45,261$43,740
9879,74647020714,361 -
- - - 108391,761674,413
987 9,746 45,731 315 451,383 718,153
- - 138 - 193241
0 0 138 0 193 241
136,952 - - - 518,994435,982
- - (4,656)(315)(386,922)(654,352)
136,952 0 (4,656)(315)132,072 (218,370)
$137,939$9,746$41,213$0$583,648$500,024
141
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, 2015
With comparative totals for the year ended December 31, 2014
University / McGlynn
Gateway EastOsborneBakeries
Revenues:
Tax increment$27,523$47,753$26,633
Investment income:
Interest and dividends2292,4001,000
Net change in the fair value of investments(55)(370)(137)
Total revenues27,69749,78327,496
Expenditures:
Supplies and other charges4,9106,8234,607
Developer assistance - - -
Total expenditures4,9106,8234,607
Excess (deficiency) of
revenues over (under) expenditures22,78742,96022,889
Other financing sources:
Transfers in225,000 - -
Transfers out - (17,487) -
Total other financing sources (uses)225,000(17,487)0
Net change in fund balance247,78725,47322,889
Fund balance (deficit) - January 1(629,738)237,61996,061
Fund balance (deficit) - December 31($381,951)$263,092$118,950
142
Exhibit F-4
Satellite Lane 57th Avenue Northstar
Totals Nonmajor Capital Project
Apts.RedevelopmentTransit Station
Main StreetFunds
20152014
$39,745$21,723$101,034$ - $264,411$253,139
1,105 - 79(143)4,6702,416
(162) - (19)35(708)1,651
40,68821,723101,094(108)268,373257,206
6,03812,46611,3616,57552,78038,072
- - 90,640 - 90,64087,892
6,03812,466102,0016,575143,420125,964
34,6509,257(907)(6,683)124,953131,242
- 489 - 17,487242,976 -
- - - - (17,487) -
0489017,487225,4890
34,6509,746(907)10,804350,442131,242
102,302(9,746)(3,749)(11,119)(218,370)(349,612)
$136,952$0($4,656)($315)$132,072($218,370)
143
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144
AGENCY FUNDS
Agency Funds account for assets held by a governmental unit in a trustee
capacity or as an agent for individuals, private organizations, other governmental
units, and/or other funds.
145
Exhibit G-1
CITY OF FRIDLEY, MINNESOTA
COMBINING STATEMENT OF ASSETS AND LIABILITIES
AGENCY FUNDS
For The Year Ended December 31, 2015
With comparative totals for December 31, 2014
Totals Agency Funds
Senior Citizens
Hotel/Motel TaxOrganizations
20152014
Assets:
Cash and investments$ - $9,599$9,599$3,536
Receivables:
Accounts2,765 - 2,7653,124
Total assets$2,765$9,599$12,364$6,660
Liabilities:
Accounts payable$ - $9,599$9,599$ -
Due to other governments2,765 - 2,7656,660
Total liabilities$2,765$9,599$12,364$6,660
146
Exhibit G-2
CITY OF FRIDLEY, MINNESOTA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AGENCY FUND
For The Year Ended December 31, 2015
BalanceBalance
January 1,December 31,
2015AdditionsDeletions2015
Hotel/Motel Tax
Assets:
Cash and investments$3,536$65,596$69,132$ -
Receivables:
Accounts3,124 - 3592,765
Total assets$6,660$65,596$69,491$2,765
Liabilities:
Due to other governments$6,660$ - $3,895$2,765
Senior Citizens Organizations
Assets:
Cash and investments$ - $13,797$4,198$9,599
Liabilities:
Accounts payable$ - $18,579$8,980$9,599
147
ŷźƭ ƦğŭĻ źƓƷĻƓƷźƚƓğƌƌǤ ƌĻŅƷ ĬƌğƓƉ
148
III. STATISTICAL SECTION (UNAUDITED)
149
This page intentionally left blank
150
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 Capacity166
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.
151
CITY OF FRIDLEY, MINNESOTA
NET POSITION BY COMPONENT
Last ten fiscal years
(Accrual Basis of Accounting)
200620072008
Governmental activities:
Net investment in capital assets$18,635,605$18,245,265$17,490,936
Restricted 1,591,936 1,711,255 2,193,410
Unrestricted 15,140,831 17,244,490 18,845,006
Total governmental activities net position$35,368,372$37,201,010$38,529,352
Business-type activities:
Net investment in capital assets$17,354,621$16,951,085$16,381,443
Restricted - - -
Unrestricted7,955,4267,722,4587,869,185
Total business-type activities net position$25,310,047$24,673,543$24,250,628
Primary government:
Net investment in capital assets$35,990,226$35,196,350$33,872,379
Restricted 1,591,936 1,711,255 2,193,410
Unrestricted 23,096,257 24,966,948 26,714,191
Total primary government net position$60,678,419$61,874,553$62,779,980
Note: GASB 68 was implemented in 2015. Net position was restated for 2014 to reflect the reporting of net position
liability and pension related deferred outflows of resources. Net position for years prior to 2014 was not restated.
152
Table 1
2009201020112012201320142015
$16,141,958$15,546,219$14,554,639$14,139,656$13,842,497$14,186,359$16,811,842
3,401,7762,790,220 3,392,382 3,294,952 3,050,204 2,673,982 2,233,179
21,293,47020,276,252 23,020,467 24,238,79824,551,73025,321,65916,052,833
$39,208,430$40,241,465$40,967,488$41,673,406$41,444,431$42,182,000$35,097,854
$15,036,932$15,105,503$14,342,934$13,560,980$12,910,117$13,053,816$14,234,711
- - - - - - -
8,308,0787,647,8487,387,6348,235,9488,417,0858,727,3828,058,181
$23,345,010$22,753,351$21,730,568$21,796,928$21,327,202$21,781,198$22,292,892
$31,178,890$30,651,722$28,897,573$27,700,636$26,752,614$27,240,175$31,046,553
3,401,7762,790,220 3,392,382 3,294,952 3,050,2042,673,9822,233,179
28,941,31828,584,330 30,408,101 32,474,746 32,968,81534,049,04124,111,014
$62,553,440$62,994,816$62,698,056$63,470,334$62,771,633$63,963,198$57,390,746
153
CITY OF FRIDLEY, MINNESOTA
CHANGES IN NET POSITION
Last ten fiscal years
(Accrual basis of accounting)
200620072008
Expenses
Governmental activities:
General government$4,177,829$4,074,480$3,646,436
Public safety6,023,3356,260,8066,774,610
Public works3,868,5174,208,7654,771,748
Community development1,118,661863,8501,479,455
Parks and recreation 1,147,9661,312,5021,303,063
Interest on long-term debt397,036416,850377,884
Total governmental activities expenses16,733,34417,137,25318,353,196
Business-type activities:
Liquor4,793,4194,920,5114,937,776
Water2,138,3712,279,0342,378,101
Sanitary sewer3,629,3613,798,0534,065,899
Storm water331,039381,944373,989
Total business-type activities expenses10,892,19011,379,54211,755,765
Total primary government expenses$27,625,534$28,516,795$30,108,961
Program revenues
Governmental activities:
Charges for services:
General government$1,443,361$1,468,699$1,600,769
Public safety 609,721709,209759,892
Public works 197,96849,39964,042
Community Development 470,733656,674510,908
Parks and recreation 346,382381,432376,621
Operating grants and contributions1,304,510930,593818,805
Capital grants and contributions1,919,108834,7482,078,572
Total governmental activities program revenues6,291,7835,030,7546,209,609
Business-type activities:
Charges for services:
Liquor5,136,0295,252,9105,275,467
Water1,929,5731,990,0472,110,621
Sanitary sewer3,345,0173,461,6153,873,806
Storm water391,032392,016404,562
Operating grants and contributions514 - -
Capital grants and contributions - - -
Total business-type activities program revenues10,802,16511,096,58811,664,456
Total primary government program revenues$17,093,948$16,127,342$17,874,065
154
Table 2
Page 1 of 2
2009201020112012201320142015
$3,324,698$3,272,470$3,321,402$3,155,983$3,434,479$4,092,123$4,156,904
6,847,5716,756,6986,720,6416,999,5547,101,3317,570,3228,048,655
5,065,1785,916,7765,023,0805,420,2715,928,3315,959,5955,127,667
1,036,549966,909973,198880,414935,716898,4551,107,348
1,605,3061,521,1061,387,1331,355,5711,456,8411,513,1351,353,320
342,555268,892263,075232,318218,610179,420144,064
18,221,85718,702,85117,688,52918,044,11119,075,30820,213,05019,937,958
4,654,8114,542,1804,568,2824,354,9094,148,4474,596,3164,914,786
2,423,1292,438,3992,688,8462,647,1762,815,5882,902,4193,101,356
4,350,5764,617,9914,750,4674,653,4344,974,5254,988,5875,040,861
399,349421,630785,861602,923587,036597,915785,626
11,827,86512,020,20012,793,45612,258,44212,525,59613,085,23713,842,629
$30,049,722$30,723,051$30,481,985$30,302,553$31,600,904$33,298,287$33,780,587
$1,733,160$1,755,123$1,886,783$1,979,737$2,025,108$2,079,719$1,905,021
690,115717,003796,308862,584864,435683,418619,630
23,03466,938378,14228,14499,28927,31253,589
523,508501,897570,685554,129582,280798,3921,194,534
347,044364,093325,682369,899326,067327,508336,847
930,765939,1231,148,3151,030,8871,095,7241,837,8601,139,385
1,476,9891,952,9341,374,6511,564,1461,747,3031,220,9032,370,009
5,724,6156,297,1116,480,5666,389,5266,740,2066,975,1127,619,015
4,973,0004,855,8804,893,4364,705,5234,308,7914,786,9875,256,840
2,419,4002,390,8362,418,2262,773,1012,788,1462,913,7172,907,123
3,784,0004,052,8004,245,6544,549,2544,572,7984,754,4924,809,679
457,862421,815457,083571,707613,818732,9611,225,153
- - - - 50,000 - -
- - - - - 440,627421,990
11,634,26211,721,33112,014,39912,599,58512,333,55313,628,78414,620,785
$17,358,877$18,018,442$18,494,965$18,989,111$19,073,759$20,603,896$22,239,800
155
CITY OF FRIDLEY, MINNESOTA
CHANGES IN NET POSITION
Last ten fiscal years
(Accrual basis of accounting)
200620072008
Net (expense) revenue:
Governmental activities($10,441,561)($12,106,499)($12,143,587)
Business-type activities(90,025)(282,954)(91,309)
Total primary government net (expense) revenue($10,531,586)($12,389,453)($12,234,896)
General revenues and other changes in net position
Governmental activities:
General property taxes$8,253,653$8,986,924$9,068,718
Grants not restricted to programs2,623,4073,152,4213,240,081
Investment earnings998,1541,111,116687,665
Gain on sale of property3,35759,438(24,802)
Other1,60329,238267
Transfers600,000600,000500,000
Total governmental activities12,480,17413,939,13713,471,929
Business-type activities:
Grants not restricted to programs - - -
Investment earnings281,316245,172168,394
Gain on Sale of Property5,0001,278 -
Other - - -
Transfers(600,000)(600,000)(500,000)
Total business-type activities(313,684)(353,550)(331,606)
Total primary governmen$12,166,490$13,585,587$13,140,323
t
Change in net position:
Governmental activities$2,038,613$1,832,638$1,328,342
Business-type activities(403,709)(636,504)(422,915)
$1,634,904$1,196,134$905,427
Total primary government
Note: GASB 68 was implemented in 2015. Pension expense for years prior to 2015 was not restated.
156
Table 2
Page 2 of 2
2009201020112012201320142015
($12,497,242)($12,405,740)($11,207,963)($11,654,585)($12,335,102)($13,237,938)($12,318,943)
(193,603)(298,869)(779,057)341,143(192,043)543,547778,156
($12,690,845)($12,704,609)($11,987,020)($11,313,442)($12,527,145)($12,694,391)($11,540,787)
$9,175,888$10,141,119$10,126,395$10,654,542$11,003,455$11,521,196$11,795,707
3,390,6332,718,9791,095,4701,030,1231,033,8141,476,6641,325,388
96,817208,565347,184269,240(216,821)634,411157,281
12,98220,11214,93756,59835,680 - 67,581
- - - - - 93,236418,640
500,000350,000350,000350,000250,000250,000338,600
13,176,32013,438,77511,933,98612,360,50312,106,12813,975,50714,103,197
- - - - - - 2,413
25,90857,098106,27465,537(52,346)148,24842,722
(237,923)112 - 9,680 - - 10,672
- - - - 24,66312,20116,331
(500,000)(350,000)(350,000)(350,000)(250,000)(250,000)(338,600)
(712,015)(292,790)(243,726)(274,783)(277,683)(89,551)(266,462)
$12,464,305$13,145,985$11,690,260$12,085,720$11,828,445$13,885,956$13,836,735
$679,078$1,033,035$726,023$705,918($228,974)$737,569$1,784,254
(905,618)(591,659)(1,022,783)66,360(469,726)453,996511,694
($226,540)$441,376($296,760)$772,278($698,700)$1,191,565$2,295,948
157
Table 3
Page 1 of 2
CITY OF FRIDLEY, MINNESOTA
FUND BALANCES - GOVERNMENTAL FUNDS
(1)
Last ten fiscal years
(Modified accrual basis of accounting)
2006200720082009
General Fund:
Reserved$77,476$65,528$48,561$58,928
Unreserved:
General fund3,863,0235,206,7784,538,2244,600,988
Designated for employee benefits - - - -
Designated for contingencies - - - -
Undesignated - - - -
Nonspendable - - - -
Restricted - - - -
Unassigned - - - -
Total general fund$3,940,499$5,272,306$4,586,785$4,659,916
All other governmental funds:
Reserved for:
Long-term receivables$415,908$348,441$277,560$ -
Public safety203,13120,72625,590 -
Debt service721,8661,214,5191,564,2171,734,624
Unreserved, reported in:
Special revenue funds1,106,6231,189,1401,258,9261,329,647
Capital projects funds6,963,5245,223,5635,944,5565,056,148
Debt service5,991,1026,201,3505,976,5115,801,686
Restricted - - - -
Committed - - - -
Assigned - - - -
Unassigned - - - -
Total all other governmental funds$15,402,154$14,197,739$15,047,360$13,922,105
In 2011, the City adopted the provisions of Gorenmental Accounting Standards Board Statement
No. 54, Fund Balance Reporting and Governmental Fund Type Definitions.
158
Table 3
Page 2 of 2
201020112012201320142015
$59,755$ - $ - $ - $ - $ -
5,725,464 - - - - -
- - - - - -
- - - - - -
- - - - - -
- 65,27166,15250,36660,12366,265
- - 20,81040,01215,17619,376
- 6,708,2847,582,3607,997,0368,242,3318,858,309
$5,785,219$6,773,555$7,669,322$8,087,414$8,317,630$8,943,950
$ - $ - $ - $ - $ - $ -
- - - - - -
2,066,732 - - - - -
1,407,400 - - - - -
5,796,931 - - - - -
5,983,425 - - - - -
- 2,529,8733,093,3022,233,6642,071,2591,808,572
- 2,209,0672,328,5832,124,9442,566,1012,709,638
- 11,108,00311,783,59611,618,83511,949,55511,272,588
- (98,164)(97,712)(98,566)(97,712)(43,153)
$15,254,488$15,748,779$17,107,769$15,878,877$16,489,203$15,747,645
159
CITY OF FRIDLEY, MINNESOTA
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
Last ten fiscal years
200620072008
Revenues:
General property taxes$8,220,943$8,927,963$9,052,719
Special assessments691,764635,817589,790
Licenses and permits876,9031,080,787946,285
Intergovernmental2,663,9091,872,6432,742,981
Charges for services1,855,1771,830,4162,015,796
Fines and forfeits261,535298,359316,646
Earnings on investments828,877920,850560,629
Interest on loan23,21319,96216,547
Other2,154,6562,288,3092,220,276
Total revenues 17,576,977 17,875,106 18,461,669
Expenditures:
Current:
General government3,567,5033,893,9523,338,228
Public safety5,821,5235,999,5576,323,910
Public works2,944,9113,025,1573,406,468
Community development1,113,543861,8721,189,033
Parks and recreation1,118,3921,194,2901,366,154
Debt service:
Principal1,555,0001,825,0002,075,000
Interest 330,431359,010379,340
Bond issuance costs31,74242,9869,139
Capital outlay4,452,5003,114,2032,684,938
Total expenditures 20,935,545 20,316,027 20,772,210
Revenues over (under) expenditures (3,358,568) (2,440,921) (2,310,541)
Other financing sources (uses):
Refunding bond issues - - -
Bonds issued2,505,0001,910,0001,915,000
Premium/(discount) on bonds issue(30,720) - -
Proceeds from sale of capital assets10,05458,31313,101
Insurance and other reimbursements - - -
Transfers in4,966,400600,0003,926,563
Transfers out(4,366,400) -(3,380,023)
Total other financing sources (uses) 3,084,334 2,568,313 2,474,641
Net change in fund balance($274,234)$127,392$164,100
Debt service as a percentage of
noncapital expenditures11.6%12.9%13.6%
Debt service as percentage of total expenditures 9.2%11.0%11.9%
160
Table 4
2009201020112012201320142015
$9,072,267$10,178,369$10,113,120$10,732,129$11,024,785$11,554,557$11,805,580
665,038622,100672,929763,920834,120938,290542,248
965,363973,9851,085,1001,104,5041,123,6351,171,3651,549,785
3,140,5533,310,6312,853,1712,649,2072,643,7283,208,4424,375,972
2,021,7082,080,3492,206,7642,353,8882,545,9082,518,0622,374,896
255,014240,880258,372255,622218,194226,922184,940
74,840176,257297,290236,226(185,473)565,245157,281
6,939 - - - - - -
2,043,2521,992,971325,284322,354295,409314,416429,713
19,575,54218,244,974 17,812,030 18,417,850 18,500,306 20,497,299 21,420,415
3,086,4413,010,8353,165,1113,503,3263,279,6573,732,0563,777,688
6,446,7146,329,3546,284,6586,422,6466,794,5247,165,6787,319,564
3,376,6413,111,9183,061,1003,047,3003,530,9394,635,7523,575,252
895,057967,487979,042772,070817,895894,7851,081,549
1,301,1401,292,7831,195,4101,252,0891,305,1581,422,4051,288,684
2,215,0002,445,000800,000940,000980,0001,150,0001,190,000
366,500287,961271,969232,318227,326190,890152,894
1,80145,0942,79947,016 - 3,1507,462
2,144,6491,812,087964,4101,639,7732,536,2861,290,0083,645,425
19,302,51919,833,943 16,724,499 17,856,538 19,471,785 20,484,724 22,038,518
273,023(1,588,969) 1,087,531 561,312 (971,479) 12,575 (618,103)
- - - - - - -
- 1,765,000 - 1,280,000 - - -
- 53,163 - - - - -
36,84516,50015,09663,44535,67936,83693,670
- - - - - - -
2,500,4211,235,467380,000350,000250,0008,253,6161,065,410
(2,000,421)(885,467) - - (125,000)(7,462,485)(726,810)
2,184,663536,845 395,096 1,693,445 160,679 827,967 432,270
($1,052,124)$2,457,686$1,482,627$2,254,757($810,800)$840,542($185,833)
14.6%15.9%6.8%7.2%6.8%7.0%7.3%
13.0%14.4%6.4%6.8%6.2%6.6%6.1%
161
CITY OF FRIDLEY, MINNESOTA
TAX CAPACITY VALUE AND ESTIMATED MARKET VALUE OF TAXABLE PROPERTY
Last ten fiscal years
Commercial/
FiscalResidentialIndustrialPublicAll
YearPropertyPropertyUtilityOther
2006$14,320,786$13,166,657$46,861$3,833,436
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
1
2014
7,885,29812,520,98144,6484,362,496
1
2015
9,538,48412,771,82949,8684,737,031
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.
2
Property values are determined on January 2 of the preceeding year.
162
Table 5
Add:Less:
Totalfor Area-wideFiscalAdjustedTotalEstimatedTax Capacity
TaxValues andDisparityTax CapacityDirect TaxMarketas a Percent
2
Value
of EMV
CapacityIncrementContributionValueRate
$31,367,740$ - $4,115,595$27,252,14531.941%$2,469,670,100115.10%
33,857,865 - 5,516,35128,341,51431.349%2,616,727,300119.46%
35,556,469 - 5,252,63730,303,83230.324%2,701,388,800117.33%
36,000,4761,514,7305,757,07331,758,13328.640%2,698,943,700113.36%
34,512,6292,478,3716,128,31830,862,68232.258%2,561,173,300111.83%
31,795,4942,505,5176,212,40628,088,60536.986%2,352,567,900113.20%
29,269,7292,851,4595,629,37426,491,81439.615%2,278,659,000110.49%
26,252,5392,844,6895,373,20223,724,02647.362%2,057,500,500110.66%
24,813,4232,799,1714,509,58723,103,00748.577%1,948,580,100107.40%
27,097,2122,934,0454,358,57025,672,68743.508%2,146,063,300105.55%
163
CITY OF FRIDLEY, MINNESOTA
DIRECT AND OVERLAPPING PROPERTY TAX CAPACITY RATES
Last ten fiscal years
SchoolSchoolSchool
FiscalDistrictDistrictDistrict
YearCityNo. 11No. 13No. 14
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%
201448.577%28.265%24.824%49.552%
201543.508%22.482%32.562%48.422%
Source: Anoka County Property Records and Taxation Department
Notes:
(1)
Coon Creek Watershed District is included with School District No. 11.
(2)
Rice Creek Watershed District is included with School District No. 13, 14 and 16.
164
Table 6
Total Tax Capacity Rates By School Districts
SchoolTotalSchoolSchoolSchoolSchool
DistrictSpecialDistrictDistrictDistrictDistrict
(1)(1)(2)(2)(2)
No. 16No. 11No. 13No. 14No. 16
CountyDistricts
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%
44.562%43.239%9.559%129.640%126.936%151.664%146.674%
40.045%38.123%8.591%112.704%123.272%139.410%130.755%
165
Table 7
CITY OF FRIDLEY, MINNESOTA
PRINCIPAL PROPERTY TAXPAYERS
Current year and nine years ago
20152006
Percentage Percentage
Taxableof Total CityTaxableof Total City
CapacityCapacityCapacityCapacity
TaxpayerValueRankValueValueRankValue
Medtronic, Inc.$1,664,08616.14%$1,552,22014.95%
Target Corporation766,652 2 2.83%733,370 2 2.34%
Onan Corp (Cummins Power)546,368 32.02%326,638 5 1.04%
Georgetown Apartments246,906 4 0.00%254,562 8 0.81%
Springbrook Apartments 242,554 50.90%260,945 7 0.83%
Wal-Mart/Sam's326,004 6 1.20%338,972 4 1.08%
River Pointe Apartments289,855 71.07%202,130 10 0.64%
Shamrock Investments282,030 8 1.04%536,082 3 1.71%
BAE (Fridley Land/N.Stacks)275,812 9 1.02%291,104 6 0.93%
ZCOF (Fridley Market)237,348 100.88%N/A0.00%
Lifetime FitnessN/A0.00%250,590 9 0.80%
Total$4,877,61517.10%$4,746,61315.13%
Total All Property$27,097,212$31,367,740
166
Table 8
CITY OF FRIDLEY, MINNESOTA
PROPERTY TAX LEVIES AND COLLECTIONS
Last ten fiscal years
Collected Within The
FiscalTaxesCollections
YearLeviedinFiscal Year of the LevyTotal Collections to Date
EndedFor ThePercentageSubsequentPercentage
1
Years
Dec. 31Fiscal YearAmountof LevyAmountof Levy
2006$8,278,255$8,130,76798.22%$147,488$8,278,255100.00%
20078,772,1498,614,53798.20%157,6128,772,149100.00%
20089,188,5928,958,98697.50%226,7829,185,76899.97%
20099,110,8478,856,38497.21%250,6289,107,01299.96%
20109,707,0759,503,50997.90%198,7929,702,30199.95%
201110,014,0719,897,61098.84%107,69110,005,30199.91%
201210,703,73910,699,02599.96%(8,674)10,690,35199.87%
201311,252,48111,247,94399.96%(19,044)11,228,89999.79%
201411,511,28811,372,81298.80%109,26611,482,07899.75%
201511,734,60711,657,85599.35%N/A11,657,85599.35%
1
Includes repayment of property taxes abatements
Source: City Finance Department
167
Table 9
CITY OF FRIDLEY, MINNESOT
A
RATIOS OF OUTSTANDING DEBT BY TYP
E
Last Ten fiscal years
Business
Type
Governmental ActivitiesActivities
Total Percentage
FiscalImprovementTax IncrementEquipmentRevenuePrimaryof PersonalPer
11
IncomeCapita
YearBondsBondsCertificatesTotalBondsGovernment
2006$4,310,000$6,780,000$ - $11,090,000$3,420,000$14,510,0002.06%416
20076,065,0005,110,000 - 11,175,0003,015,00014,190,0001.99%420
20087,615,0003,400,000 - 11,015,0006,440,00017,455,0002.46%416
20097,080,0001,720,000 - 8,800,0005,865,00014,665,0002.13%333
20107,570,000 - 550,0008,120,0008,160,00016,280,0002.19%298
20116,770,000 - 550,0007,320,0007,625,00014,945,0002.00%266
20125,880,000 - 1,780,0007,660,0007,070,00014,730,0001.96%278
20134,955,000 - 1,725,0006,680,0006,413,15413,093,1541.69%240
20144,000,000 - 1,530,0005,530,0005,845,00011,375,0001.58%198
20153,010,000 - 1,330,0004,340,0005,260,0009,600,0001.31%155
1
Demographic information can be found on Table 13
168
Table 10
CITY OF FRIDLEY, MINNESOTA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
December 31, 2014
Estimated
EstimatedShare of
DebtPercentageOverlapping
1
Applicable
Governmental UnitOutstanding
Debt
Debt repaid with property taxes:
Independent School District No. 11$58,620,0001.60%$937,920
Independent School District No. 1315,705,000 31.46%4,940,793
Independent School District No. 1435,155,000 100.00%35,155,000
Independent School District No. 16168,780,000 36.80%62,111,040
Metro Council1,419,891,649 1.19%16,896,711
Anoka County118,321,284 18.04%21,345,160
Vocational/Technical District No. 91635,155,000 2.21%776,926
Subtotal - overlapping debt142,163,550
City of Fridley - Direct debt4,340,000100.00%4,340,000
Total direct and overlapping debt$146,503,550
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.
169
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170
Table 11
CITY OF FRIDLEY, MINNESOTA
LEGAL DEBT MARGIN INFORMATION
Last ten fiscal years
Market Value$2,146,063,300
Debt Limit 3% of Market Value$64,381,899
Amount of Debt Applicable to Debt Limit:
Total Debt9,600,000
Deductions:
Improvement Bonds$3,010,000
Revenue Bonds5,260,0008,270,000
Total Amount of Debt Applicable to Debt Limit1,330,000
Legal Debt Margin$63,051,899
Legal Debt Margin Calculation for the last 10 Fiscal Years
Net DebtLegalAmount of Debt
FiscalDebtApplicable toDebtApplicable to
YearLimitLimitMarginDebt Limit
2006$49,393,402$ - $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%
201458,457,4031,530,00056,927,4032.62%
201564,381,8991,330,00063,051,8992.07%
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%.
171
CITY OF FRIDLEY, MINNESOTA
PLEDGED-REVENUE COVERAGE
Last ten fiscal years
Improvement BondsEquipment Certificates
SpecialProperty
Debt ServiceDebt Service
FiscalAssessmentTax
YearCollectionsPrincipalInterestCoverageCollectionsPrincipalInterestCoverage
2006$671,204$ - $67,4669.95$ - $ - $ - -
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
2014932,078955,000166,2350.83 234,357195,00025,6531.06
2015 - 990,000129,8150.00 231,31060,00010,0503.30
172
Table 12
Utility Revenue BondsTax Increment Bonds
Utility Less Net Tax
Debt ServiceDebt Service
ServiceOperatingAvailableIncrement
RevenuesExpensesRevenuePrincipalInterestCoverageCollectionsPrincipalInterestCoverage
$5,648,720$5,977,607($328,887)$395,000$121,164-0.64$2,649,020$1,555,000$262,9651.46
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
7,864,4066,341,5441,522,862555,000255,0541.88 - - - -
7,961,7386,839,8521,121,886655,000235,4741.26 - - - -
8,363,4156,987,0951,376,320570,000223,4591.73 - - - -
8,936,2877,405,5961,530,691585,000203,0601.94 - - - -
173
Table 13
CITY OF FRIDLEY, MINNESOTA
DEMOGRAPHIC AND ECONOMIC STATISTICS
Last ten fiscal years
Total Per Capita
FiscalUnemploymentPersonalPersonal
Year
PopulationRateIncomeIncome
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
201127,5155.5%745,518,92527,095
201227,5915.6%749,702,65227,172
201327,7854.4%774,145,67027,862
201427,9524.2%720,406,89625,773
201528,0393.9%734,201,21526,185
Sources: Metropolitan Council (population), Continuing Disclosure Document (unemployment rate)
174
Table 14
CITY OF FRIDLEY, MINNESOTA
PRINCIPAL EMPLOYERS
Current year and nine years ago
20152006
Percentage Percentage
of Total Cityof Total City
EmployerEmployeesRankEmploymentEmployeesRankEmployment
4,560120.08%110.58%
Medtronic, Inc.2,500
1,49026.56%45.92%
Unity Medical Center1,400
1,21035.33%37.31%
Cummins Power (Onan)1,727
69643.06%52.54%
Target600
59552.62%27.62%
BAE Systems1,800
57862.55%N/A
ISD #14 (Fridley Schools)
50072.20%62.12%
Minco Products500
30081.32%91.27%
Park Construction300
28091.23%101.11%
Wal-Mart262
263101.16%71.48%
Kurt Manufacturing350
N/AN/A
Lofthouse Bakery
N/A81.27%
Parsons Electric300
Total10,47246.11%9,73941.21%
Total City Employment22,70923,635
Source: Fridley Community Development Dept, MN Department of Employment and Economic Development
175
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/Program2006200720082009
General government:
City administration3333
Finance23222219
Human resource2222
Community development10797
Public safety:
Police department47444445
Fire department9988
Public works:
Administration4222
Engineering2444
Mechanic3333
Streets9999
Water5555
Sewer5555
Parks7777
Parks and recreation:
Parks and recreation11888
Total140130131127
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.
176
Table 15
Full-Time Equivalent Employees as of December 31,
111
201320142015
201020112012
3334.04.74.7
19192018.016.016.0
2222.02.02.0
7778.29.89.6
42434450.651.652.6
8887.87.67.0
2221.20.61.5
4335.05.01.8
3334.54.03.8
9999.08.58.5
5777.06.55.8
5557.07.07.8
7555.05.03.7
8888.09.69.0
124124126137.3137.9133.8
177
CITY OF FRIDLEY, MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last ten fiscal years
Fiscal Year
Function/Program2006200720082009
Police:
Physical arrests1,2921,2901,3571,305
Parking violations572792419382
Traffic violations5,1524,0354,9942,934
Fire:
Emergency responses2,5682,8042,8272,864
Fires occurred127109116141
Commercial inspections7844,5171,2391,021
Rental inspections2311,176755888
Refuse collection:
Recyclables collected (tons per day)6.956.966.126.47
Recyclables collected (pounds per person)N/AN/AN/AN/A
Building inspection:
Permits issued:
Residential7681,2061,4441,599
Commercial115366418386
Total permit valuation$21,750,596$47,871,624$39,105,158$45,564,657
Other public works:
Street resurfacing (miles)4.83.74.14.9
Recreation
Total participation hoursN/AN/AN/AN/A
Total senior program participation hoursN/AN/AN/AN/A
Springbrook Nature Ctr program participants19,59620,24520,89420,937
Water:
Connections8,2358,2308,2338,231
Storage capacity (gallons)6,500,0006,500,0006,500,0006,500,000
Average daily demand (gallons)550,0004,270,0004,270,0003,458,482
Peak daily demand (gallons)10,990,00010,990,00010,800,00019,350,892
Sewer:
Connections8,2448,2388,2428,238
Sources: Various City departments.
178
Table 16
Fiscal Year
201020112012201320142015
1,3181,1451,1331,3441,2561,386
778665283562373278
2,9292,8602,5902,8263,2452,592
2,7722,9232,9063,0033,0893,047
116114121119110103
8688901,0161,1101,5051,663
5977831,1171,1451,428
1,881
5.895.705.815.80N/A
N/AN/AN/A164.67164.59
6.33
165.96
1,9052,2321,6062,1911,9744,642
434446386440492642
$30,441,199$39,902,641$35,763,059$40,697,477$47,109,811$60,598,103
4.92.23.13.83.32.9
N/AN/A302,500305,975315,160316,000
N/AN/A68,70069,81871,92072,000
23,98724,23124,26623,41923,86020,404
8,2268,2228,2278,2308,2438,245
6,500,0006,500,0006,500,0006,500,0006,500,0006,500,000
3,014,4253,730,0003,993,2854,227,9752,517,8082,968,901
8,119,2076,622,0008,661,0009,009,0007,439,0006,803,000
8,2378,2328,2368,2398,2528,254
179
Table 17
CITY OF FRIDLEY, MINNESOTA
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
Last ten fiscal years
Fiscal Year
Function/Program2006200720082009201020112012201320142015
Police:
Stations1111111111
Squad cars12121212121212121513
Fire stations3333333333
Other public works:
Streets (miles)125.3125.3125.3125.3125.3125.3125.3125.3125.3125.5
Highways (miles)10.310.310.310.310.310.310.310.310.310.3
Streetlights1,0551,0591,0591,0591,0591,0591,0591,0591,0591,059
Traffic signals36363636363636363636
Parks and recreation:
Acreage682682682682682682682682682682
Playgrounds29292929292929292929
Baseball/softball diamonds22222222222222222222
Soccer/football fields2222222222
Community centers1111111111
Water:
Water mains (miles)113.0113.0113.0113.0113.0113.0113.0113.0113.0113.2
Fire hydrants1,0131,0131,0131,0131,0131,0131,0131,0131,0131,013
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)52.052.052.052.052.052.052.052.052.052.0
Sources: Various City departments.
180