Report of the State Auditor of MN Year Ended 1986

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INTRODUCTION SCOPE This report covers the financial operations of the 855 cities in Minnesota for the calendar year 1986. The sources of the data are annual city financial reports of audits by public accountants and the State Auditor, county auditors' reports of indebtedness, and the Department of Revenue records of state shared tax distributions, grants, aids, taxable valuations and tax levies. Cities with populations greater than 2,500 are required by Minnesota Statutes 471.695 - 471.699 to submit comprehensive annual financial reports prepared in accordance with Generally Accepted Accounting Principles (GAAP), which require the modified accrual basis of accounting for Governmental Funds, and the accrual basis for Enterprise Funds. The data in this publication for the cities over 2,500 in population were taken from city reporting forms introduced in 1984 and from the audited reports. Cities under 2,500 in population are not required to report on a GAAP basis. The data for most cities under 2,500 in population have been entered from reporting forms prepared on the cash basis of accounting submitted by city clerks. Statutory cities operating under Option Plan "A" with combined offices of Clerk - Treasurer are required to have an audit, pursuant to Minnesota Statutes Section 412.591, subdivision 2, although the audited financial statements may be on the cash basis. Financial operations reported in Tables 1, 1A, 3, 3A, 4, 4A and 5 include the Governmental Funds for each city. The Governmental Funds are the General Fund, Special Revenue Funds, Capital Projects Funds, Debt Service Funds, and Special Assessment Funds; they are summarized in Table 1. Table 1A is a five -year comparison of Governmental Funds. Table 2 is a summary of Enterprise Fund operations. This publication separates all reported Enterprise Funds from the city Governmental Funds, including enterprises such as airports, audito- riums,swimming pools, refuse collection and others. In reports prior to 1981, only major enterprises common to most cities such as water, liquor stores, hospitals and nursing homes were reported separately as Enterprise Funds. Sewage disposal and treatment was first shown as a separate enterprise in 1980. This information has been verified with city 3 finance directors and city clerks, and any reported corrections were made to the data bases. Some housing and redevelopment agencies are now reported in the city financial statements since NCGA Statement 3, which requires all funds of the cities to be included in the comprehensive annual financial report (CAFR). This report shows some increase in revenues and expendi- tures of the Governmental Funds, reflecting the addition of a number of HRA's. The financial operations of the 2281 municipal public service enterprises are presented in Tables 6 through 15. The enterprises furnish many types of services, and operate wholly or in large part with revenue derived from the sale of goods or services. When possible, each enterprise is presented separately on an accrual basis of accounting. In some municipalities the operations of two or more enterprises are combined. For example, the functions of sanitary sewers, sewage disposal, and the operation of the water utility may be combined. This treatment is not in conformity with preferred governmental accounting and reporting practices, and the combined enterprises are disclosed with appropriate footnotes. Thirteen cities failed to submit an annual reporting form or audited financial statement in time for this publication. Bena Dassel Dennison Florence Ihlen *Mazeppa *Mendota Pierz Princeton Ronneby Willow River Woodstock Wright *Indicates city failed to report in 1985. One of the cities failing to report, Princeton, was over 2,500 in population. Revenues and expenditures for governmental functions are summarized by population classes based on 1986 population figures from the Office of the State Demographer. The population classes correspond to the legal definitions of the 1st, 2nd, 3rd and 4th class cities. The 4th class cities are further divided between those over and under 2,500 in population, for the purpose of comparison of financial data between classes as well as between cities of similar size.