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Home My WebLink AboutAnnual Financial Report 12/31/1992CITY OF LINO LAKES, MINNESOTA ANNUAL FINANCIAL REPORT DECEMBER 31, 1992 NNW CITY OF LINO LAKES, MINNESOTA TABLE OF CONTENTS I. INTRODUCTORY SECTION Organization Organization Chart II. FINANCIAL SECTION Independent Auditor's Report Combined Financial Statements Combined Balance Sheet - All Fund Types and Account Groups Statement 1 Combined Statement of Revenue, Expenditures and Changes in Fund Balance - All Governmental Fund Types Statement 2 Combined Statement of Revenue, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund Statement 3 Combined Statement of Revenue, Expenses and Changes in Retained Earnings - All Proprietary Fund Types Statement 4 Combined Statement of Cash Flows - All Proprietary Fund Types Statement 5 Notes to Financial Statements Combining. Individual Fund and Account Group Financial Statements General Fund: Balance Sheet Statement of Revenue, Expenditures and Changes in Fund Balance - Budget and Actual Special Revenue Fund: Economic Development Authority: Balance Sheet Statement of Revenue, Expenditures and Changes in Fund Balance Debt Service Funds: .• Combining Balance Sheet Combining Statement of Revenue, Expenditures and Changes in Fund Balance Capital Project Funds: Combining Balance Sheet Combining Statement of Revenue, Expenditures and Changes in Fund Balance Statement 6 Statement 7 Statement 8 Statement 9 Statement 10 Statement 11 Statement 12 Statement 13 CITY OF LINO LAKES, MINNESOTA TABLE OF CONTENTS Enterprise Funds: Combining Balance Sheet Statement 14 Combining Statement of Revenue, Expenses and Changes in Retained Earnings Statement 15 Combining Statement of Cash Flows Statement 16 Agency Funds: Combining Balance Sheet Statement 17 Combining Statement of Changes in Assets and Liabilities Statement 18 Schedule of General Fixed Assets Statement 19 Schedule of General Long -Term Debt Statement 20 Supplementary Financial Information Combined Schedule of Indebtedness Exhibit 1 Schedule of Deferred Tax Levies Exhibit 2 Debt Service Payments to Maturity Exhibit 3 Construction Work in Process Exhibit 4 Insurance in Force Exhibit 5 Taxable Valuations, Tax Levies and Tax Rates Exhibit 6 Schedule of Sources and Uses of Funds: Tax Increment Housing District #1 -1 Exhibit 7 Tax Increment Housing District #1 -2 Exhibit 8 Tax Increment Financing District #1 -3 Exhibit 9 Tax Increment Financing District #1-4 Exhibit 10 Schedule of Revenue, Expenses and Changes in Retained Earnings - Water and Sewer Fund Exhibit 11 I. INTRODUCTORY S ECTION WOO CITY OF LINO LAKES, MINNESOTA ORGANIZATION December 31, 1992 Mayor: Vernon Reinert Term Expires December 31, 1993 Council Members: Andy Neal December 31, 1995 John Bergeson December 31, 1993 Linda Elliot December 31, 1995 Sally Kuether December 31, 1993 City Administrator. Randall Schumacher Clerk- Treasurer: Marilyn Anderson Finance Director: Mary Vaske City Accountant Paula Schloer Appointed Appointed Appointed Appointed 2 _ c o o 0 c ,o vE 0 o /0 m0, 0 0. cg 0 • 0 0) 0, EE U LL E c i w ii a a • 9 3 "Jss a. a ✓ LL >5 0 • • cc F. LL 0 IL • a II. FINANCIAL SECTION To the Honorable Mayor and Members of the City Council City of Lino Lakes, Minnesota TAUTGES, REDPATH & CO., LTD. CER?7FEC PUBLIC ACCOUNTANTS INDEPENDENT AUDITOR'S REPORT We have audited the accompanying general purpose financial statements of the City of Lino Lakes, Minnesota, as of December 31, 1992 and for the year then ended as listed in the table of contents. These general purpose financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Governmental Auditing Standards as 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The City does not maintain complete accounting controls over quantities and costs of General Fixed Assets. Therefore, we were not able to obtain sufficient evidential matter to form an opinion regarding the amounts at which property, plant and equipment are recorded in the General Fixed Assets Account Group at December 31, 1992 or 1991 (stated at $2,344,451 and $2,119,597 respectively). Accordingly, we do not express an opinion on this account group. In our opinion, except for the effects of such adjustments, if any, as might have been determined had we been able to obtain sufficient evidential matter regarding the City's General Fixed Assets, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Lino Lakes, Minnesota, as of December 31, 1992 and the results of its operations and the Statement of Cash Flows of its Proprietary Fund types for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The combining, individual fund and account group financial statements and supplementary financial information in the table of contents is presented for purposes of additional analysis and is not a required part of the general purpose financial statements of the City of Lino Lakes, Minnesota. Such information, except for that portion marked "unaudited," on which we express no opinion, has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, the information is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. , /ea-pedx ,d TAUTGES, REDPATH & CO., LTD. Certified Public Accountants March 5, 1993 4810 White Bear Parkway • White Bear Lake. Minnesota 55110 • 612/426 -7000 • FAX /426 -5004 • Member of HLB International COMBINED FINANCIAL STATEMENTS CITY OF LINO LAKES, MINNESOTA COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS December 31, 1992 Governmental Fund Types Special Debt Capital Assets General Revenue Service Project Restricted investments Cash and investments $1,343,508 $3,550,277 $5,422,040 Cash and investments with escrow agent 6 78,982 Assets with deferred compensation plan administrator - Accrued interest receivable - - Accounts receivable 18,006 4,400 Deposits receivable - 131,050 Due from other governmental units 36,385 678,559 Taxes receivable: Delinquent 65,490 11,295 6 Due from County 18,456 3,387 2,857 Delinquent tax increment - - 13,086 Special assessments receivable - 2,693,822 2,150,225 Prepaid items 77,789 Inventory - Fixed assets (net of accumulated depreciation) Amount available in Debt Service Fund Amount to be provided for retirement of GLTD Total assets $1,559,634 $0 $6,258,787 $8,481,205 Liabilities, equity and other credits Liabilities: Cash overdraft $1,341,310 Accounts payable $47,048 74,882 Salaries payable 13,791 $190 - Contracts payable - 225,446 Assessments payable on City property Deposits payable - 258 Due to other governmental units 23,769 3,614 Deferred revenue 68,730 $2,674,064 2,153,793 Bonds payable Interest payable Lease payable Deferred compensation payable Total liabilities 153,338 190 2,674,064 3,799,303 Equity and other credits: Contributions from property owners Invested in general fixed assets Retained earnings Fund balance (deficit): Reserved 77,789 3,364,458 Unreserved: Designated 1,328,507 - 5,559,298 Undesignated - (190) 220,265 (877,396) Total equity and other credits 1,406,296 (190) 3,584,723 4,681,902 Total liabilities, equity and other credits $1,559,634 $0 $6,258,787 $8,481,205 The accompanying notes are an integral part of these financial statements. Statement 1 Fiduciary Totals Proprietary Fund Type Account Groups (Memorandum Only) Fund Type Trust and General General Long- December 31, Enterprise Agency Fixed Assets Term Debt 1992 1991 (Unaudited) i' $102,675 $102,675 2,818 $195,154 10,513,797 $8,930,068 - 78,988 165,228 .. 224,960 224,960 213,215 - 89,650 89,650 120,642 146,517 - 168,923 148,238 122,112 253,162 132,072 "' 13,594 728,538 71,149 76,791 59,664 24,700 28,651 13,086 67,103 4,844,047 3,511,466 14,406 92,195 78,644 0 5,642 7,381,622 $2,344,451 9,726,073 8,080,096 $3,364,458 3,364,458 3,221,726 7,920,779 7,920,779 9,505,740 $7,661,632 $631,876 $2,344,451 $11,285,237 $38,222,822 S34,339,344 $2,424 $89,641 $1,433,375 $565,880 9,495 9 131,434 221,002 710 14,691 8,445 43,190 268,636 278,592 - $10,510 10,510 142,553 317,266 317,524 238,401 23,730 51,113 151,384 - - 4,896,587 3,632,135 1,060,000 11,268,500 12,328,500 12,581,500 41,732 41,732 - 6,227 6,227 3,413 224,960 - 224,960 213,215 1,181,281 631,876 SO 11,285,237 19,725,289 18,036,520 6,384,363 95,988 6,480,351 $7,661,632 0 6,384,363 5,803,635 2,344,451 2,344,451 2,119,597 95,988 44,609 3,442,247 3,298,176 6,887,805 5,209,945 (657,321) (173,138) 2,344,451 0 18,497,533 16,302,824 $631,876 $2,344,451 $11,285,237 $38,222,822 $34,339,344 The accompanying notes are an integral part of these financial statements. CITY OF LINO LAKES, MINNESOTA COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE - ALL GOVERNMENTAL FUND TYPES For The Year Ended December 31, 1992 Statement 2 Special Revenue: General Revenue General property taxes $1,206,998 Tax increments Special assessments Licenses and permits Intergovernmental Charges for services Fines and forfeits Interest on investments Refunds and reimbursements Area and unit charges Miscellaneous 35,563 Total revenue 2,705,794 493,977 607,831 210,129 79,643 41,927 29,726 Expenditures: Current General govemment Public safety Highways and streets Parks, recreation and forestry Solid waste abatement Cable TV Capital outlay: General government Public safety Highways and streets Parks, recreation and forestry Solid waste abatement Cable TV Debt service: Principal Interest and fiscal charges Construction/acquisition Total expenditures Revenue over (under) expenditures Other increases (decreases): Operating transfer in Operating transfer out Bond proceeds Total other increases (decreases) Net increase (decrease) in fund balance Fund balance - January 1 Residual equity transfer in Residual equity transfer out Fund balance (deficit) - December 31 $0 739,752 3,362 909,399 465,830 323,301 34,036 1,523 66,289 748 700 6,727 4,530 Debt Service $235,602 2,242,790 65,613 Capital Project $5 349,322 935,569 Totals (Memorandum Only) December 31, 1992 1991 $1,442,605 349,322 3,178 ,359 493,977 659,139 1,332,583 210,129 79,643 369,119 146,666 433,546 78,513 8,114,462 133,131 194,061 116,940 433,546 42,950 2,731,532 2,677,136 1,760 106,367 851,241 909,399 465,830 323,301 34,036 1,523 9,829 84,109 66,810 41,344 76,118 84,857 67,510 48,071 4,530 $1,361,236 262,825 1,324,910 332,392 573,682 195,190 86,603 539,440 66,594 192 ,398 133,109 5,068,379 728,789 845,420 468,616 243,787 27,376 1,536 893,457 80,787 15,912 47,901 3,745 0 2,678 5,088,000 5,088,000 1,011,000 648,342 648,342 574,149 2,008,213 2,008,213 4,269,328 2,552,835 3,362 5,738,102 2,316,672 10,610,971 9,214,481 152,959 (3,362) (3,060,966) 414,860 (2,496,509) (4,146,102) 3,172 151,660 154,832 310,846 (11,899) (2,946) (43,275) (58,120) (258,526) 3,352,340 385,205 3,737,545 4,328,099 (11,899) 3,172 3,349,394 493,590 3,834,257 4,380,419 141,060 (190) 288,428 908,450 1,337,748 234,317 1,265,236 0 3,296,295 3,773,452 8,334,983 8,100,666 $1,406,296 98,498 98,498 251,460 (98,498) (98,498) (251,460) ($190) $3,584,723 $4,681,902 $9,672,731 $8,334,983 The accompanying notes are an Integral part of these financial statements. - CITY OF LINO LAKES, MINNESOTA COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND For The Year Ended December 31, 1992 Statement 3 Revenue: General property taxes Licenses and permits Intergovernmental Charges for services Fines and forfeits Interest on investments Gas franchise fees Refunds and reimbursements Miscellaneous Total revenue Expenditures: Current: General government Public safety - Highways and streets Parks, recreation and forestry Solid waste abatement - Cable TV Capital outlay: General government .,. Public safety Highways and streets Parks, recreation and forestry Solid waste abatement Cable TV Contingency Total expenditures Revenue over expenditures Other increases (decreases): Operating transfer to Debt Service Funds Operating transfer to Capital Project Funds Total other increases (decreases) Net increase in fund balance Fund balance - January 1 - Fund balance - December 31 1992 Budget Actual $1,178,112 $1,206,998 490,025 493,977 616,408 607,831 225,634 210,129 81,000 79,643 45,000 41,927 16,000 19,286 29,100 29,726 15,281 16,277 2,696,560 2,705,794 748,307 911,749 516,115 322,729 30,060 1,285 70,100 500 4,200 12,800 7,550 71,165 2,696,560 0 0 $0 Over (Under) Budget $28,886 3,952 (8,577) (15,505) (1,357) (3,073) 3,286 626 996 9,234 1991 Actual (Memorandum Only) $1,179,087 332,392 483,015 195,190 86,603 47,373 14,910 42,265 40,699 2,421,534 739,752 (8,555) 659,490 909,399 (2,350) 845,420 465,830 (50,285) 468,616 323,301 572 243,787 34,036 3,976 27,376 1,523 238 1,536 66,289 (3,811) 3,744 748 248 700 (3,500) 6,727 (6,073) 12,247 4,530 (3,020) 3,745 0 2,678 (71,165) 2,552,835 (143,725) 2,268,639 152,959 152,959 152,895 (11,899) (11,899) 141,060 1,265,236 $1,406,296 0 (57,283) (11,899) (11 ,899) (57,283) 95,612 1,169,624 $1,265,236 $141,060 The accompanying notes are an integral part of these financial statements. CITY OF LINO LAKES, MINNESOTA COMBINED STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS - ALL PROPRIETARY FUND TYPES For The Year Ended December 31, 1992 Statement 4 Totals (Memorandum Only) 1992 1991 Operating revenue: Water sales $166,563 $75,434 Sewer charges 204,947 154,784 Other operating revenue 57,199 33,839 Total operating revenue 428,709 264,057 Operating expenses: Personal services 91,300 79,127 Materials and supplies 55,295 29,819 Contractual services 22,853 36,680 Repair and maintenance 22,569 28,281 MWCC sewer charges 111,897 81,060 Depreciation: Purchased assets 1,073 1,190 Contributed assets 144,271 127,358 Utilities 12,590 7,474 Other 25,432 24,389 Total operating expenses 487,280 415,378 Net income (loss) from operations (58,571) (151,321) Other income (expense): Interest on investments 10,250 623 Maintenance agreement - MWCC 13,061 14,564 Area and unit charges 96,712 52,320 Bond interest (57,632) Total other income (expense) 62,391 67,507 Net income (loss) before operating transfers: Operating transfers: Operating transfer to Capital Project Fund Net income (loss) Credit arising from transfer of depreciation to contributions from property owners Retained earnings - January 1 Retained earnings - December 31 3,820 (83,814) (96,712) (52,320) (92,892) (136,134) 144,271 127,358 44,609 53,385 $95,988 $44,609 The accompanying notes are an integral part of these financial statements. WREN MEOW IMMO CITY OF LINO LAKES, MINNESOTA COMBINED STATEMENT OF CASH FLOWS - ALL PROPRIETARY FUND TYPES For The Year Ended December 31, 1992 Statement 5 Totals (Memorandum Only) 1992 1991 Cash flows from operating activities: Operating income (loss) ($58,571) ($151,321) Adjustments to reconcile operating (loss) to net cash flows from operating activities: Depreciation 145,344 128,548 Change in assets and liabilities: Decrease (increase) in receivables (44,650) (27,915) Decrease (increase) in prepaid items (12,212) 6,130 Decrease (increase) in inventory 5,642 (3,297) Increase (decrease) in payables 35,260 19,727 Net cash flows from operating activities 70,813 (28,128) Cash flows from noncapital financing activities: Maintenance agreement - MWCC 13,061 14,564 Collection of area and unit charges 96,712 52,320 Operating transfer to Capital Project Funds (96,712) (52,320) Net cash flows from noncapital financing activities 13,061 14,564 Cash flows from capital and related financing activities: Bond proceeds 1,044,100 Construction in progress (841,468) (148,336) Net cash flows from capital and related financing activities 202,632 (148,336) Cash flows from investing activities: Interest on investments 10,250 623 Net increase (decrease) in cash and cash equivalents 296,756 (161,277) Cash and cash equivalents - January 1 (193,687) (32,410) Cash and cash equivalents - December 31 $103,069 ($193,687) Noncash investing, capital and financing activities: - Water and Sewer lines in the amount of $724,999 were contributed to the Water and Sewer Fund in 1992. The accompanying notes are an integral part of these financial statements. Ilmow CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 1 of 19 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Lino Lakes is a public corporation formed under Minnesota Statute 410. As such the City is under home rule charter regulations and applicable statutory guidelines. The financial statements of the City of Lino Lakes 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 In accordance with GASB pronouncements the City's Financial Statements include all funds, account groups, agencies, boards, commissions and other organizations over which the City Council exercises oversight responsibility. Oversight responsibility includes appointment of governing bodies, budget authority, approval of tax levies, outstanding debt secured by the City's full faith and credit or revenues, and responsibility for funding deficits. As a result of applying the entity definition criteria of the Governmental Accounting Standards Board, certain organizations have been included or excluded from the City's fmancial statements as follows: Entity Reason for Inclusion/Exclusion Included Lino Lakes Economic The Lino Lakes EDA was established by the Development Authority (EDA) City Council and is govemed by a board of commissioners consisting of City Council members. The EDA is required to submit a budget for approval to the City Council annually. The City of Lino Lakes is responsible for ensuring that the EDA has adequate funding to carry out its activities. Upon the request of the EDA, the City may levy taxes for the benefit of the EDA. Excluded: Lino Lakes Gas Utility Operated as part of the Circle Pines Gas Franchise Utility. City of Lino Lakes exercises minimal management control. City receives annual share of gross revenue. Lino Lakes Senior Center B . FUND ACCOUNTING Although the Senior program uses a center funded by the City, the Senior Center has authority over the activities it finances as well as responsibility over fiscal matters. The accounting system of the City is organized and operated on a fund basis. A fund is defined as a fiscal and accounting entity with a self - balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 2 of 19 The following types of funds and account groups are employed by the City: GOVERNMENTAL FUNDS General Fund - to account for all fmancial resources except those required to be accounted for in another fund. Special Revenue Funds - to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. Debt Service Funds - to account for the accumulation of resources for, and the payment of, general long -term debt principal, interest, and related costs. Capital Project Funds - to account for financial resources to be used for the acquisition or construction of major facilities other than those financed by Proprietary Funds. PROPRIETARY FUNDS Enterprise Funds - to account for operations: (a) that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be fmanced or recovered primarily through user charges; or, (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. FIDUCIARY FUNDS Trust and Agency Funds - to 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. These include (a) expendable trust funds, (b) nonexpendable trust funds, (c) pension trust funds, and (d) agency funds. ACCOUNT GROUPS The governmental fund types are designed to account for the financial flow of a particular fund; therefore, they generally include only current assets and current liabilities on their balance sheets. The City maintains two account groups to account for noncurrent assets and long- term liabilities as follows: General Fixed Assets - The City maintains a separate account group which contains the fixed assets used in the governmental fund type operations. They are assets of the City as a whole and not of individual funds. General Long -Term Debt - This account group contains the long -term obligations of the City including general obligation bonds, certificates of indebtedness, contracts payable and compensated absences payable. These long -term liabilities are expected to be financed by the govemmental funds. C . BASIS OF ACCOUNTING The accounting and reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for on a current financial resources measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. UMW CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 3 of 19 All Proprietary Funds are accounted for on a flow of economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with this activity are included on their balance sheets. Their reported fund equity (net total assets) is segregated into contributed capital and retained earnings components. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net total assets. The modified accrual basis of accounting is followed by the City for its Governmental Funds and Fiduciary Funds. Under this method of accounting, revenues are recognized when they become susceptible to accrual - that is, when they become both measurable and available to finance expenditures of the fiscal period. "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Major revenue sources susceptible to accrual include property taxes (excluding delinquent taxes received over 60 days after year end), special assessments, intergovernmental revenues, charges for services and interest on investments. Major revenue sources not susceptible to accrual include licenses and permits, fees, and miscellaneous revenues. Such revenues are recorded as revenue when received because they are not measurable until collected. Expenditures are generally recognized in the accounting period when the fund liability is incurred, except for interest on general long -term debt which is recognized when due. The accrual basis of accounting is followed for the Proprietary Funds. Under this method of accounting, revenues are recognized during the accounting period in which they are earned and become measurable and expenses are recognized in the accounting period in which they are incurred if measurable. The City reports deferred revenue on its combined balance sheet. Deferred revenues arise when a potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period. Deferred revenues also arise when resources are received by the government before it has a legal claim to them, as when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or when the government has a legal claim to the resources, the liability for deferred revenue is removed from the combined balance sheet and revenue is recognized. The City has reported as deferred revenues the amount of $4,896,587, which consists of the following: Property taxes receivable $76,789 Tax increments receivable 13,086 Special assessments receivable 4,799,072 Park dedication fees 4,400 Tree grant 3,240 Total $4,896,587 D . BUDGETS Budgets are adopted on a basis consistent with generally accepted accounting principles. Annual appropriated budgets are adopted for the General Fund. Budgeted amounts are reported as originally adopted, or as amended by the City Council. Individual amendments were not material in relation to the original appropriations which were adjusted. 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. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 4 of 19 E. LEGAL COMPLIANCE - BUDGETS The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The City Administrator submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of fmancing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is legally enacted through passage of a resolution on a departmental basis and can be expended by each department based upon detailed budget estimates for individual expenditure accounts. 4. The City Administrator is authorized to transfer appropriations within any department budget. Additional interdepartmental or interfund appropriations and deletions are or may be authorized by the City Council with fund (contingency) reserves or additional revenues. 5. Formal budgetary integration is employed as a management control device during the year for the General Fund. 6. Legal debt obligation indentures determine the appropriation level and debt service tax levies for the Debt Service Funds. Supplementary budgets are adopted for the Proprietary Funds to determine and calculate user charges. These debt service and budget amounts represent general obligation bond indenture provisions and net income for operation and capital maintenance and are not reflected in the financial statements. 7. A capital improvement program is reviewed periodically by the City Council for the Capital Project Funds. However, appropriations for major projects are not adopted until the actual bid award of the improvement The appropriations are not reflected in the financial statements. 8. Expenditures may not legally exceed budgeted appropriations at the total fund level. Monitoring of budgets is maintained at the expenditure category level (i.e., personal services, supplies; other services and charges; capital outlay) within each activity. 9. The City Council may authorize transfer of budgeted amounts between City funds. F . CASH AND INVESTMENTS Cash and investment balances from all funds are pooled and invested to the extent available in authorized investments. Earnings from investments are allocated to individual funds on the basis of the fund's equity in the cash and investment pool. Investments are stated at cost (plus interest added, if any) which approximates market value except for assets of the Deferred Compensation Plan which are reported at market value. Material purchase discounts and premiums are amortized over the term of the investment. Interest earnings are accrued at the balance sheet date. For purposes of the statement of cash flows the Proprietary Fund 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 fund types have original maturities of 90 days or less. Therefore the entire balance in such fund types is considered cash equivalents. Restricted investments consist of Water Revenue Bond proceeds that are restricted for construction of the City's water tower. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 5 of 19 G . HOMESTEAD CREDIT AND AGRICULTURAL CREDIT AID (HACA) Property taxes on homestead property (as defined by State Statutes) are partially reduced by HACA. This credit is paid to the City by the State in lieu of taxes levied against homestead property. The State remits this credit through installments each year. The credit is recognized as revenue by the City at the time of collection. H. LOCAL GOVERNMENT AID REVENUE RECOGNITION Local govemment aid is provided to the City by the State as a shared tax based upon a statutory formula and without restrictions. Payment from the State is generally received during each calendar year for that calendar year. The City recognizes local government aid revenue when it becomes both measurable and available to finance current operations. In practice, Local government aid is recognized as revenue as it is received in cash. I. 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. 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 the following 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 the 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 revenue because it is not available to finance current expenditures. Cities in Minnesota operate under a levy limitation law. A City's levy limit is equal to the prior year's levy limit base (revenue levy plus local govemment aid) increased by 1) three percent; and 2) a percentage equal to one -half of the greater of the percentage increases in population or in number of households, if any, and reduced by the local government aid that the City has been certified to receive. Levies for bonded indebtedness are not limited by the law. The 1992 legislative session has repealed levy limitations for taxes payable after 1992. The City's property tax revenue includes payments from the Metropolitan Revenue Distribution (Fiscal Disparities Formula) per State Statute 473F. This statute provides a means of spreading a portion of the taxable valuation of commercial/industrial real property to various taxing authorities within the defined metropolitan area. The valuation "shared" is a portion of commercial/industrial property valuation growth since 1971. Property taxes paid to the City through this formula for 1992 and 1991 totaled $345,484 and $291,783 respectively. Receipt of property taxes from this "fiscal disparities pool" does not increase or decrease total tax revenue. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 6 of 19 J. SPECIAL ASSESSMENT REVENUE RECOGNITION Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement projects in accordance with State Statutes. These assessments are collectible by the City over a term of years usually consistent with the term of the related bond issue. Collection of annual installments (including interest) is handled by the County Auditor in the same manner as property taxes. Property owners are allowed to (and often do) prepay future installments without interest or prepayment penalties. 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 are collected by the County and remitted by December 31 (remitted to the City the following January) and are also recognized as revenue for the current year. All remaining delinquent, deferred and special deferred assessments receivable in governmental funding are completely offset by deferred revenues. 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 and the first proceeds of that sale (after costs, penalties and expenses of sale) are remitted to the City in payment of delinquent special assessments. Generally, the City will collect the full amount of its special assessments not adjusted by City Council or court action. 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. K. INVENTORIES Inventories in the Enterprise Fund for the year ended December 31, 1991 are valued at cost, which approximates market, using the first in/first st out (FIFO) method. As of December 31, 1992 the City's Enterprise Fund did not have any material amounts of inventories of goods and supplies. The costs of governmental fund type inventories are recorded as expenditures when consumed rather than when purchased. L. FIXED ASSETS GENERAL FIXED ASSETS General fixed assets are recorded as expenditures of the Governmental Funds at the time of purchase. Such assets are capitalized at historical cost or estimated historical cost in the General Fixed Asset Account Group. Public Domain ( "infrastructure ") general fixed assets consisting of roads, bridges, curbs, gutters, streets, sidewalks, drainage systems and lighting systems are excluded from general fixed assets as these assets are immovable and of value only to the City. Gifts or contributions are recorded in general fixed assets at fair market value at the time received. No depreciation has been provided on general fixed assets. The City does not maintain detailed records nor accounting controls over general fixed assets. The amounts presented in the financial statements represent partial accumulations of historical accounting records without regard to physical listings. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 7 of 19 PROPRIETARY FUNDS Fixed assets of the Proprietary Funds are stated at historical cost, estimated historical cost, or in the case of contributions, at fair market value at the time received. Depreciation has been provided using the straight -line method over the estimated useful lives of assets, as follows: Purchased assets: Water 5 - 25 years Sewer 5 - 25 years Contributed assets: Water 20 - 50 years Sewer 20 - 50 years Totals Fixed assets of the water and sewer utility operations include the water distribution system and sewage collection system. These systems have been wholly (or substantially) financed by non - operating funds (special assessments, general taxes, federal and state grants, and other sources) and contributed to the sewer and water operating funds. City policy is to finance these assets by the sources indicated rather than by user charges. Accordingly, the water and sewer user rates are not established at levels sufficient to cover depreciation on these assets. Depreciation on these assets is shown in the operating statements; however, the depreciation is eventually transferred against the contribution account rather than retained earnings in accordance with generally accepted accounting principles. Consequently, the contribution account reflects the net book value of contributed assets rather than the original cost of such assets. M. COMPENSATED ABSENCES The accrued liability for compensated absences is not recorded as a liability in the General Long -Term Debt Account Group (for governmental funds) nor the Proprietary Funds. Unused vacation, the portion of sick leave payable as severance pay, and the compensatory time are not considered material to these financial statements. Unpaid vacation pay totaled $23,940 and $16,147 at December 31, 1992 and 1991 respectively. The City also has an unrecorded contingent liability for unused employee sick leave of $229,682 and $213,624 at December 31, 1992 and 1991 respectively. N . LONG -TERM OBLIGATIONS Long -term debt is recognized as a liability of a governmental fund when due, or when resources have been accumulated in the Debt Service Fund for payment early in the following year. For other long- term obligations, only that portion expected to be financed from expendable available financial resources is reported as a fund liability of a governmental fund. The remaining portion of such obligations is reported in the General Long -Term Debt Account Group. Long -term liabilities expected to be financed from proprietary fund operations are accounted for in those funds. O. FUND EQUITY Contributed capital is recorded in Proprietary Funds that have received capital grants or contributions from developers, customers or other funds. Reserves represent those portions of fund equity not appropriable for expenditure or legally segregated for a specific future use. Designated fund balances represent tentative plans for future use of financial resources. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 8 of 19 P . INTERFUND TRANSACTIONS Quasi - external transactions 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. All other interfund transactions, except quasi - external transactions and reimbursements, are reported as transfers. Nonrecurring or nonroutine permanent transfers of equity are reported as residual equity transfers. All other interfund transfers are reported as operating transfers. Q. MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the General Purpose Financial Statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations or changes in financial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Note 2 DEPOSITS AND INVESTMENTS 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 (140% in the case of mortgage notes pledged). Authorized collateral includes the legal investments described below, as well as certain first mortgage notes, and certain other state or local government obligations. 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. At year -end, the carrying amount of the City's deposits was $3,501395 and the bank balance was $3,705,910. The entire bank balance was covered by Federal depository insurance or by collateral held by the City's agent in the City's name. INVESTMENTS Minnesota Statutes authorize the City to invest in the following: a) Direct obligations or obligations guaranteed by the United States or its agencies. b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities described in (a) above. c) General obligations of the State of Minnesota or any of its municipalities. d) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System. e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 9 of 19 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. Balances at December 31,1992: Securities Type Federal National Mortgage Association Government National Mortgage Association Federal Home Loan Mortgage Corp Treasury Securities Repurchase Agreement Federal Farm Credit Bank 100,000 Federal Home Loan Bank 245,773 Totals $2,559,194 Credit Risk Category 1 2 3 $361,013 326,715 1,525,693 Investment pools Total investments Deposits Petty cash Totals Cash and investments with escrow agent Carrying Market Amount Value $400,000 $761,013 $766,041 326,715 335,396 343,656 343,656 343,656 1,525,693 1,528,488 596,850 596,850 596,850 100,000 100,000 350,000 595,773 597,402 $0 $1,690,506 4,249,700 $4,267,833 Assets held by deferred compensation plan administrator 1,431,852 1,427,999 5,681,552 $5,695,832 3,501,395 150 $9,183,097 $78,988 $224,960 $224,960 The City's investments are categorized above to give an indication of the level of risk assumed at year- end. Category 1 includes investments that are insured or registered or for which the securities are held by the City or its agent in the City's name. Category 2 includes uninsured or unregistered investments for which the securities are held by the counterparty's trust department or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counterparty or by its trust department or agent but not in the City's name. Cash and investments with escrow agent consist of undisbursed proceeds of the Public Project Bonds of 1990 which are restricted for the construction and payment of debt associated with the City's fire station. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 10 of 19 Note 3 FIXED ASSETS A summary of changes in general fixed assets is as follows: Land Buildings and structures Wells Furniture and equipment Totals Balance 1/1/92 $310,010 579,352 6,216 1.224.019 Additions $46,598 178.256 Balance Deletions 12/31/92 $310,010 625,950 6,216 1.402.275 $2,119,597 _ $224,854 =44 $0 $2,344,451 A summary of Proprietary Fund fixed assets at December 31, 1992 is as follows: Well Buildings and Structures Machinery and Equipment Water and Sewer Lines Acquisition costs - gas utility Construction in progress Total Less: Accumulated Depreciation Net Fixed Assets Note 4 CITY INDEBTEDNESS Water and Sewer $18,500 48,690 47,538 6,949,185 989,804 8,053,717 (674,470) Gas Utility Total $18,500 48,690 47,538 6,949,185 $2,375 2,375 989,804 2,375 8,056,092 (674,470) $7,379,247 $2,375 $7,381,622 The following is a schedule of changes in City indebtedness for the year ended December 31, 1992. Balance Balance 1/1/92 Additions Deletions 12/31/92 General Long Term Debt Account Group: Bonded debt General obligation $1,591,000 $135,000 $172,500 $1,553,500 Special assessment debt with governmental commitment 10,990,500 3,640,000 4,915,500 9,715,000 Assessment payable 142,553 Capital lease payable 3,413 Total general long term debt 12,727,466 Proprietary Fund: Revenue bond 6,253 3,781,253 1,060,000 132,043 3,439 5,223,482 10,510 6,227 11,285,237 1,060,000 Total $12,727,466 $4,841,253 $5,223,482 $12,345,237 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 11 of 19 ,.. All long -term bonded indebtedness outstanding at December 31, 1992 is backed by the full faith and credit of the City, including special assessment bond issues. Delinquent assessments receivable at December 31, 1992 totaled $118,688. w' The annual requirement to amortize all debt outstanding at December 31, 1992 including interest payments of $4,301,692 is as follows: 1993 1994 1995 1996 1997 1998 and on Total General Obligation Bonds $279,679 $272,850 $183,223 $99,900 $98,294 $1,584,858 $2,518,804 Special Assessment Debt w /govtl commitment 1,947,319 5,051,452 530,779 576,303 593,295 3,639,738 12,338,886 Revenue bonds 88,946 91,147 104,565 112,233 109,545 1,265,741 1,772,177 Capital lease 4.061 2.491 6.552 Total 52,320,005 55,417.940 5818,567 $788.436 $801_,13 6 4 337 $16.636,419 It is not practicable to determine the specific year for payment of assessments payable on City property. City indebtedness at December 31, 1992 is composed of the following: Final Issue Maturity Interest Original Payable Date Date Rates Issue 12/31/92 General Obligation Bonds: 1989A Equipment Certificates 5/1/89 5/1/94 7.65% $300,000 $120,000 1989B Equipment Certificates 8/1/90 2/1/95 6.65% 275,000 175,000 1990A Equipment Certificates 12/10/90 1/1/96 6.50% 88,500 53,500 1991A Equipment Certificates 12/19/91 1/1/95 4.95% -5.40% 135,000 90,000 Public Project Revenue Bonds - 1990A 10/1/90 2/1/10 7.12% 1,115,000 1,115,000 Total General Obligation Bonds 1,913,500 1,553,500 General Improvement Bonds with special assessments pledged: G. O. L«pruvement Bonds of 1988A 10/1/88 2/1/97 6.43% 1,160,000 800,000 "" G. O. Temporary Improvement Bonds of 1990B 8/1/90 8/1/93 6.10% 1,015,000 1,015,000 G. O. Temporary Itupovement Bonds of 1991A 8/1/91 8/1/94 5.83% 4,260,000 4,260,000 G. O. Improvement Refunding Bonds, Series 1992A 4/1/92 2/1/06 6.51% 3,640,000 3,640,000 Total General Inipiovement Bonds with special assessments pledged 10,075,000 9,715,000 Revenue Bonds: G. O. Water Revenue Bonds, Series 1992B 4/1/92 2/1/08 6.67% 1,060,000 1,060,000 Total - All Bonds 13,048,500 12,328,500 Assessments payable on City property 10,510 Capital lease - phone system 5/89 3/93 14.92% 9,249 734 Capital lease - phone voice mail 11/1/92 9/1/94 6.00% 6.253 5.493 Total Indebtedness $13,064,002 $12,345,237 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 12 of 19 Note 5 LEGAL DEBT MARGIN The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable principally from property taxes. The City of Lino Lake's legal debt margin for 1992 and 1991 is computed as follows: Market value Applicable percentage Debt limit December 31, 1992 1991 $314,188,800 $284,371,300 2% 2% 6,283,776 5,687,426 Amount of debt applicable to debt limit Total bonded debt 12,328,500 12,581,500 Less: Special assessment bonds (9,715,000) (10,990,500) Public project revenue bonds (1,115,000) (1,115,000) Cash and investments in Debt Service Funds (73,819) (61,754) Revenue bonds (1,060,000) Total debt applicable to debt limit 364,681 414,246 Legal debt margin Note 6 PENSION PLANS $5,919,095 $5,273,180 A . PUBLIC EMPLOYEES RETIREMENT ASSOCIATION (PERM Plan Description All full-time and certain part -time employees of the City of Lino Lakes are covered by defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) and the Public Employees Police and Fire Fund (PEPFF) which are cost - sharing multiple - employer retirement plans. PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated members are covered by Social Security and Basic members are not. All new members must participate in the Coordinated Plan. All police officers, fire fighters and peace officers who qualify for membership by statute are covered by the PEPFF. The payroll for employees covered by PERF and PEPFF for the year ended December 31, 1992, was $792,229 and $414,996, respectively; the City's total payroll was $1,311,494. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by State Statute, and vest after three years of credited service. The defined retirement benefits are based on a member's 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 Coordinated and Basic members. The retiring member receives the higher of step -rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic member is 2 percent of average salary for each of the first 10 years of service and 2.5 percent for each remaining year. For a Coordinated member, the annuity accrual rate is 1 percent of average salary for each of the first 10 years and 1.5 percent for each remaining year. Using Method 2, the annuity accrual rate is 2.5 percent of average salary for Basic members and 1.5 percent for Coordinated members. For PEPFF members, the annuity accrual rate is 2.5 percent for each year of service. For PERF members whose annuity is calculated using Method 1, and for all PEPFF members, a full annuity is available when age plus years of service equal 90. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 13 of 19 There are different types of annuities available to members upon retirement. A normal annuity is a lifetime annuity that ceases upon the death of the retiree. No survivor annuity is payable. There are also various types of joint and survivor annuity options available which will reduce the monthly normal annuity amount, because the annuity is payable over joint lives. Members may also leave their contributions in the fund upon termination of public service, in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. Contributions Required and Contributions Made Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. The City makes annual contributions to the pension plans equal to the amount required by State Statutes. According to Minnesota Statutes Chapter 356.215, Subd. 4(g), the date of full funding required for the PERF and the PEPFF is the year 2020. As part of the annual actuarial valuation, PERA's actuary determines the sufficiency of the statutory contribution rates towards meeting the required full funding deadline. The actuary compares the actual contribution rate to a "required" contribution rate. Current combined statutory contribution rates and actuarially required contribution rates for the plans are as follows: PERF (Basic and Coordinated Plans) PEPFF Statutory Rates: Required Employees Employer Rates 4.41% 4.74% 9.95% 8.00% 12.00% 18.60% Total contributions made by the City during fiscal year 1992 were: PERF PEPFF Amount Employees _ Employer $31,986 $33,877 33,051 49,576 Totals $65,037 $83,453 Percentage of Covered Payroll Employees Employer 4.04% 4.29% 7.96% 11.95% The City's contribution for the year ended June 30, 1992 to the PERF represented .03 percent of total contributions required of all participating entities. For the PEPFF, contributions for the year ended June 30, 1992, represented .17 percent of total contributions required of all participating entities. Funding Status and Progress Pension Benefit Obligation The "pension benefit obligation" is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and step -rate benefits, estimated to be payable in the future as a result of employee service to date. The measure, which is the actuarial present value of credited projected benefits, is intended to help users assess PERA's funding status on a going -concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among Public Employees Retirement Systems and among employers. PERA does not make separate measurements of assets and pension benefit obligation for individual employers. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 14 of 19 The pension benefit obligations as of June 30, 1992, are shown below: (In thousands) PERF PEPFF Total pension benefit obligation $4,868,124 $821,604 Net assets available for benefits, at cost (Market Values for PERF = $4,068,082; PEPFF = $1,012,812) 3,933,124 963,565 Unfunded (assets in excess of) pension benefit obligation $935,000 ($141,961) The measurement of the pension benefit obligation is based on an actuarial valuation as of June 30, 1992. Net assets available to pay pension benefits were valued as of June 30, 1992. Changes in Benefit Provisions, Effective for the June 30, 1992, valuation, legislative activity since the last actuarial valuation resulted in some minor changes in benefit provision for the two funds. These changes did not have a significant impact on the PERF or the PEPFF. Ten -Year Historical Trend Information Ten -year historical trend information is presented in PERA's Comprehensive Annual Financial Report for the year ended June 30, 1992. This information is useful in assessing the pension plan's accumulation of sufficient assets to pay pension benefits as they become due. Related Party Investments As of June 30, 1992, and for the fiscal year then ended, PERA held no securities issued by the City or other related parties. Note 7 METROPOLITAN WASTE CONTROL COMMISSION During 1971, the Metropolitan Waste Control Commission (MWCC) was organized to provide for consolidation of the sanitary sewer collection, treatment and disposal in the seven county metropolitan area surrounding Minneapolis and St. Paul. Previously, these operations were maintained by the city governments on an individual or collective basis. The MWCC bills the City annually based upon estimated volume and budgeted costs. These billings are later adjusted when actual volume and actual costs are determined. The adjustment to actual is generally determined in the succeeding calendar year and payable by the City in the second succeeding calendar year. The City follows the accounting policy of recognizing these charges as an expense of the sewer utility operation in the year for which they are billed (for estimated billings) and in the year the adjustments are determined (for adjustments from estimated to actual billings). VINIO CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 15 of 19 Note 8 RECONCILIATION OF CONTRIBUTED CAPITAL Changes to contributed capital during the year are as follows: Depreciation Beginning Capital on Contributed Ending Balance Contributions Assets Balance Water and sewer $5,803,635 $724,999 ($144,271) $6,384,363 , • Note 9 DEFERRED COMPENSATION PLAN — The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The deferred compensation plan is offered by the International City Managers Association. The plan, available to all employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to the employees until termination, retirement, death or an unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the City (without being restricted to the provisions of benefits under the plan), subject only to the claims of the City's general creditors. Participants' rights under the plan are equal to those of general creditors of the City in an amount equal to the fair market value of the deferred account for each participant. It is the City's opinion that it has no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor. The City believes that it is unlikely that it will use the assets to satisfy the claims of general creditors in the future. Included in the Agency Funds on the combined balance sheet is $224,960 of funds recorded at market value and primarily held by insurance companies in various investment pools for future payment of plan benefits. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 16 of 19 Note 10 SEGMENT INFORMATION The City maintains an Enterprise Fund which provides water and sanitary sewer services. Segment information for the year ended December 31, 1992 is as follows: Total Water Sewer Water Gas Total Utility Utility and Sewer Utility 1992 1991 Operating revenue $222,336 $206,373 $428,709 $428,709 $264,057 Depreciation expense 60,337 85,007 145,344 145,344 128,548 Operating income (loss) 19,076 (77,647) (58,571) (58,571) (151,321) Property, plant and equipment additions 1,141,467 425,000 1,566,467 1,566,467 172,469 Net income (loss) 3,820 3,820 (83,814) Area and unit charges 96,712 96,712 96,712 52320 Operating transfer out (96,712) (96,712) (52,320) Net property, plant and equipment 7,379,247 $2,375 7,381,622 5,960,499 Net working capital 161,153 (2,424) 158,729 (112,255) Total assets 7,659,257 2,375 7,661,632 6,083,796 Bonds payable 1,060,000 1,060,000 1,060,000 Total equity 6,480,400 (49) 6,480,351 5,848,244 Note 11 TAX INCREMENT DISTRICTS The City of Lino Lakes is the administrating authority for Economic Development District #1 established under MS 273.71 in 1987. As of December 31, 1992 the City has not issued Tax Increment bonds for any of its Tax Increment Districts. Within the Economic Development District are the following Tax Increment Financing Districts. Housing District #1 -1 was established under MS 273.73 subd. 11 in 1987. The duration of the district is 25 years. Current tax capacity $139,196 Original tax capacity 2,734 Captured tax capacity $136,462 Retained by authority $136,462 Shared with other taxing districts 0 Total $136,462 INNIOr CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 17 of 19 District #1 -2 was established pursuant to MS 469.174, subd. 12 which qualifies it as an Economic Development TIF district. The duration of the district is eight years from the date of the receipt of the first increment or ten years from the date of approval of the TIF plan, whichever comes first. Current tax capacity $116,095 Original tax capacity 8,138 Captured tax capacity $107,957 Retained by authority $107,957 Shared with other taxing districts 0 Total $107,957 District #1 -3 was established pursuant to MS 469.174, subd. 10(a)(2) which qualifies it as a redevelopment district. The duration of the district is 25 years from the date of the first increments. Current tax capacity $3,738 Original tax capacity 8,591 District #1-4 was established pursuant to MS 469.174 subd. 12 which qualifies it as an Economic Development TIF District. The duration of the District is eight years from the date of the receipt of the first increment or ten years from the date of approval of the TIF Plan, whichever comes fast. Current tax capacity $46,847 Original tax capacity 119,555 District #1 -5 was established pursuant to MS 469.174, Subd. 11 which qualifies it as a Housing District. The duration of the District is 25 years from the date of the first increments. The plan for District #1 -5 was approved and adopted on December 14, 1992. As of December 31, 1992 this District has not been certified with Anoka County. Note 12 DEFICIT FUND BALANCES /RETAINED EARNINGS The City has deficit fund balances at December 31, 1992 as follows: Special Revenue Fund: Economic Development Authority Fund Deficit $190 Capital Project Funds: Community Development Block Grant 9,800 Interim Construction 266,410 1991 Construction 208,745 1993 Construction 170,092 Industrial Park Construction 73,901 Apollo Drive Construction 117,156 Tax Increment Financing 1 -3 17,893 Tax Increment Financing 1-4 13,399 Enterprise Funds: Gas Utility 49 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 18 of 19 Note 13 CONTINGENCIES The City attorney has indicated that existing and pending lawsuits, claims and other actions in which the City is a defendant are either covered by insurance; of an immaterial amount; or, in the judgment of the City attorney, remotely recoverable by plaintiffs except pending special assessment appeals. Note 14 DEFERRED AD VALOREM TAX LEVIES - BONDED DEBT General Obligation bond issues sold by the City are financed by ad valorem tax levies and special assessment bond issues sold by the City are partially financed by ad valorem tax levies in addition to special assessments levied against the benefiting properties. When a bond issue to be financed partially or completely by ad valorem tax levies is sold, specific annual amounts of such tax levies are stated in the bond resolution and the County Auditor is notified and instructed to levy these taxes over the appropriate years. The future tax levies are subject to cancellation when and if the City has provided alternative sources of financing. The City Council is required to levy any additional taxes found necessary for full payment of principal and interest. These future scheduled tax levies are not shown as assets in the accompanying financial statements at December 31, 1992 and 1991. Future scheduled tax levies for all bonds outstanding at December 31, 1992 totaled $6,818,030. Note 15 DESIGNATIONS AND RESERVATIONS OF FUND EQUITY At December 31, 1992 and 1991 the City had designated and reserved portions of its various fund equities through legal restriction and City Council authorization. Major fund equity appropriations at December 31, 1992 and 1991 are shown on the various balance sheets as segregations of the fund equity. A summary of such designations is as follows: December 31, 1992 1991 General Fund Reserve for prepaid items $77,789 $76,450 Designated for general contingencies 385,204 366,492 Designated for cash flow reserve 933,255 822,294 Designated for equipment 10,048 Debt Service Funds: Reserved for debt retirement 3,364,458 3,221,726 Capital Project Funds: Designated for capital improvements 5,175,244 3,308,097 Designated for committed contracts 48,215 349,590 Designated for equipment acquisition 131,303 142,852 Designated for park improvements 204,536 220,620 Totals $_10,330,052 $8,508,121 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 19 of 19 Note 16 SHARE IN GAS FRANCHISE PROFITS The City receives a share of the gross billing for natural gas sales by a neighboring City which provides service within the City of Lino Lakes. The amount earned for 1992 totaled $24,267. This amount was received in 1993 and will be recorded as revenue (available criteria) in 1993. Note 17 SUBSEOUENT EVENT On December 14, 1992 the City approved the issuance of the $150,000 Certificates of Indebtedness Series 1992. The certificates were issued on February 1,1993. COMBINING, INDIVIDUAL FUND AND ACCOUNT GROUP FINANCIAL STATEMENTS CITY OF LINO LAKES, MINNESOTA GENERAL FUND BALANCE SHEET December 31, 1992 With Comparative Amounts For December 31, 1991 Statement 6 December 31, 1992 1991 Assets Cash and investments $1,343,508 $1,284,278 Accounts receivable 18,006 31,921 Deposits receivable 0 14,939 Due from other governmental units 36,385 22,724 Taxes receivable: Delinquent 65,490 52,593 Due from County 18,456 20,518 Special assessments receivable: Tax forfeit 0 125 Prepaid items 77,789 76,450 Total assets $1,559,634 $1,503,548 Liabilities and Fund Balance Liabilities: Accounts payable $47,048 $44,347 Salaries payable 13,791 7,612 Due to other governmental units 23,769 133,635 Deferred revenue 68,730 52,718 Total liabilities 153,338 238,312 Fund balance: Reserved Unreserved: Designated Total fund balance Total liabilities and fund balance 77,789 76,450 1,328,507 1,188,786 1,406,296 1,265,236 $1,559,634 $1,503,548 CITY OF LINO LAKES, MINNESOTA GENERAL FUND STATEMENT OF REVENUE, EXPENDITURES AND _ CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 1992 With Comparative Actual Amounts For The Year Ended December 31, 1991 Statement 7 Page 1 of 5 1992 Over (Under) 1991 Budget Actual Budget Actual Revenue: General property taxes: Current and delinquent $889,699 $911,761 $22,062 $926,688 - Fiscal disparities 288,413 288,413 0 252,393 Excess tax increments 6,791 6,791 Penalties and interest 33 33 6 - Total general property taxes 1,178,112 1,206,998 28,886 1,179,087 Licenses and permits: Non - business 478,600 479,334 734 307,724 - Business 11,425 14,643 3,218 24,668 Total licenses and permits 490,025 493,977 3,952 332,392 Intergovernmental: - Federal: Other 9,735 9,662 (73) 3,909 State: Local government aid 99,111 94,960 (4,151) 95,440 Homestead credit and equalization aid 331,824 335,975 4,151 294,294 Mobile home homestead credit 3,213 3,213 0 3,005 Police state aid 41,000 44,692 3,692 43,044 Police - other 3,965 2,967 (998) 3,411 MSA maintenance 93,900 81,232 (12,668) 13,170 Other 1,475 1,475 - County: Solid waste 31,460 31,453 (7) 26,742 Other 2,200 2,202 2 -' Total intergovernmental 616,408 607,831 (8,577) 483,015 Charges for services: General government 7,770 10,096 2,326 3,311 Planning/engineering 69,000 69,023 23 30,845 Recreation 58,464 31,515 (26,949) 14,590 Fees retained from collection for other governments - SAC /surcharge 500 2,214 1,714 1,567 Administrative charge - other funds 80,000 73,495 (6,505) 114,640 Aerial map charge - other funds 9,000 22,765 13,765 27,743 'amp Public safety 900 1,021 121 2,494 Total charges for services 225,634 210,129 (15,505) 195,190 Fines and forfeits 81,000 79,643 (1,357) 86,603 - Interest on investments 45,000 41,927 (3,073) 47,373 Refunds and reimbursements 29,100 29,726 626 42,265 Gas franchise fees 16,000 19,286 3,286 14,910 - Miscellaneous: Sale of property 0 7,097 Other 15,281 16,277 996 33,602 - Total miscellaneous 15,281 16,277 996 40,699 Total revenue 2,696,560 2,705,794 9,234 2,421,534 CITY OF LINO LAKES, MINNESOTA GENERAL FUND STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 1992 With Comparative Actual Amounts For The Year Ended December 31, 1991 Statement 7 Page 2 of 5 - 1992 Over (Under) 1991 Expenditures: Budget Actual Budget Actual General government: Mayor and council: Current Personal services $20,910 $19,045 ($1,865) $15,800 Supplies 300 390 90 366 Other services and charges 24,279 25,727 1,448 19,613 Total mayor and council 45,489 45,162 (327) 35,779 Elections: Current Personal services 8,580 8,431 (149) 2,862 Supplies 600 135 (465) 24 Other services and charges 2,300 673 (1,627) 945 Capital outlay 2,800 1,466 (1,334) Total elections 14,280 10,705 (3,575) 3,831 Administration: Current Personal services 242,797 236,343 (6,454) 228,886 Supplies 13,500 9,760 (3,740) 10,618 Other services and charges 39,230 39,051 (179) 17,402 Capital outlay 1,500 0 (1,500) Total administration 297,027 285,154 (11,873) 256,906 Assessing: Current Supplies 115 (115) Contractual services 26,700 27,455 755 25,269 Total assessing 26,815 27,455 640 25,269 Consultants: Current (personal services): Engineer 24,000 24,386 386 28,026 Independent accountants and auditor 5,280 5,689 409 33,562 Planning and economic development 36,167 33,921 (2,246) 764 Legal 83,880 90,255 6,375 85,193 Legal printing 11,600 11,488 (112) 9,087 Other 9,619 10,692 1,073 12,706 Total consultants 170,546 176,431 5,885 169,338 Planning and zoning commission: Current Personal services 1,150 563 (587) 763 Supplies 50 117 67 Other services and charges 2,394 2,370 (24) 1,820 Total planning and zoning commission 3,594 3,050 (544) 2,583 CITY OF LINO LAKES, MINNESOTA GENERAL FUND STATEMENT OF REVENUE, EXPENDITURES AND _ CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 1992 With Comparative Actual Amounts For The Year Ended December 31, 1991 Statement 7 Page 3 of 5 1992 Over (Under) 1991 General government: (continued) Budget Actual Budget Actual Charter commission: Current: Supplies $100 $47 ($53) Other services and charges 1,250 403 (847) $54 Total charter commission 1,350 450 (900) 54 Planning/engineering: Current Personal services 81,246 82,698 1,452 76,091 Supplies 1,500 1,099 (401) 241 Other services and charges 2,667 1,913 (754) 328 Capital Outlay 2,800 3 (2,797) Total planning/engineering 88,213 85,713 (2,500) 76,660 General government buildings: Current Personal services 20,830 15,168 (5,662) 9,301 Supplies 6,850 10,657 3,807 8,024 Other services and charges 80,413 81,276 863 71,745 - Capital outlay 63,000 64,820 1,820 3,744 Total general government buildings 171,093 171,921 828 92,814 Total general government 818,407 806,041 (12,366) 663,234 Public safety: Police: Current Personal services 566,917 559,076 (7,841) 520,096 _ Supplies 35,700 41,032 5,332 32,997 Other services and charges 35,225 38,448 3,223 33,379 Total police 637,842 638,556 714 586,472 Fire protection: Current Personal services 0 420 420 83 Supplies 0 0 890 - Contractual services 209,000 208,986 (14) 202,718 Other services and charges 0 63 63 2,042 Total fire protection 209,000 209,469 469 205,733 Building inspection: Current Personal services 51,217 49,304 (1,913) 45,922 - Supplies 4,700 2,454 (2,246) 1,913 Other services and charges 3,215 4,908 1,693 2,193 Total building inspection 59,132 56,666 (2,466) 50,028 CITY OF LINO LAKES, MINNESOTA GENERAL FUND Statement 7 STATEMENT OF REVENUE, EXPENDITURES AND Page 4 of 5 CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 1992 With Comparative Actual Amounts For The Year Ended December 31, 1991 1992 Over (Under) 1991 Public safety: (continued) Budget Actual Budget Actual Civil defense: Current Personal services Supplies $143 $143 Other services and charges $3,500 1,869 (1,631) $1,428 Capital Outlay 500 748 248 Total civil defense 4,000 2,760 (1,240) 1,428 Animal control: Current: Supplies 125 100 (25) 87 Contractual services 2,150 2,596 446 1,672 Total animal control 2,275 2,696 421 1,759 Total public safety 912,249 910,147 (2,102) 845,420 Highways and streets: Current Personal services 260,110 241,133 (18,977) 239,861 Supplies 44,862 55,108 10,246 61,912 Contractual services: Streets 141,350 104,941 (36,409) 107,541 Signs 10,272 8,610 (1,662) 6,115 Street lighting 22,328 19,692 (2,636) 20,510 Other services and charges 37,193 36,346 (847) 32,677 Capital outlay 4,200 700 (3,500) Total highways and streets 520,315 466,530 (53,785) 468,616 Recreation: Current Personal services 47,564 53,641 6,077 24,851 Supplies 20,229 7,143 (13,086) 4,234 Other services and charges 2,450 4,924 2,474 3,747 Capital Outlay 2,700 0 (2,700) Total recreation 72,943 65,708 (7,235) 32,832 Parks: Current Personal services 168,828 173,020 4,192 148,936 Supplies 30,250 32,067 1,817 23,728 Other services and charges 16,164 16,976 812 10,577 Contractual services 500 12,096 11,596 5,843 Capital outlay 5,000 2,607 (2,393) 7,585 Total parks 220,742 236,766 16,024 196,669 CITY OF LINO LAKES, MINNESOTA GENERAL FUND STATEMENT OF REVENUE, EXPENDITURES AND _ CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 1992 With Comparative Actual Amounts For The Year Ended December 31, 1991 Statement 7 Page 5 of 5 1992 Over (Under) 1991 Budget Actual Budget Actual Forestry: Current Personal services $31,944 $19,289 ($12,655) $18,863 - Supplies 1,300 1,841 541 1,237 Other services and charges 1,500 587 (913) 83 Contractual services 2,000 1,717 (283) 1,688 - Capital outlay 5,100 4,120 (980) 4,662 Total forestry 41,844 27,554 (14,290) 26,533 Solid waste abatement Current: Personal services 13,510 9,480 (4,030) 6,382 Supplies 640 2,005 1,365 5,475 - Other services and charges 6,050 5,583 (467) 1,432 Contractual services 9,860 16,968 7,108 14,087 Capital outlay 7,550 4,530 (3,020) 3,745 - Total solid waste abatement 37,610 38,566 956 31,121 Cable TV: Current: - Personal services 1,185 1,180 (5) 1,370 Supplies 100 187 87 166 Other services and charges 156 156 - Capital outlay 0 2,678 Total cable TV 1,285 1,523 238 4,214 Contingency 71,165 (71,165) Total expenditures 2,696,560 2,552,835 (143,725) 2,268,639 - Revenue over expenditures 0 152,959 152,959 152,895 Other increases (decreases): Operating Transfer to Debt Service Funds (57,283) Operating Transfer to Capital Project Funds (11,899) (11,899) Total other increases (decreases) 0 (11,899) (11,899) (57,283) Net increase in fund balance $0 141,060 $141,060 95,612 Fund balance - January 1 1,265,236 1,169,624 Fund balance - December 31 $1,406,296 $1,265,236 CITY OF LINO LAKES, MINNESOTA SPECIAL REVENUE FUND ECONOMIC DEVELOPMENT AUTHORITY BALANCE SHEET December 31, 1992 With Comparative Amounts For December 31, 1991 Statement 8 Assets Liabilities and fund balance Liabilities: Salaries Payable December 31, 1992 1991 so $0 $190 Fund balance (deficit): Unreserved: Undesignated (190) Total fund balance (deficit) (190) $0 Total liabilities and fund balance $0 $0 CITY OF LINO LAKES, MINNESOTA SPECIAL REVENUE FUND ECONOMIC DEVELOPMENT AUTHORITY STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 1992 With Comparative Amounts For The Year Ended December 31, 1991 Statement 9 Revenue Expenditures: - General government: Current Personal services Other services and charges Total expenditures 1992 1991 so $0 490 763 2,872 263 3,362 1,026 Revenue over (under) expenditures (3,362) (1,026) Other increases: Operating transfer from Capital Project Funds 3,172 10,362 Net increase (decrease) in fund balance (190) 9,336 Fund balance (deficit) - January 1 0 (9,336) Fund balance (deficit) - December 31 ($190) $0 CITY OF LINO LAKES, MINNESOTA DEBT SERVICE FUNDS COMBINING BALANCE SHEET December 31, 1992 Temporary Improvement Improvement Closed Bonds of Bonds of Bond 1988 1990B Assets Cash and investments $220,258 $943,938 $326,245 Cash and investments with escrow agent - - Taxes receivable: Delinquent 142 Due from County 7 Special assessments receivable: Delinquent 5,532 53,757 1,092 Deferred 64,183 141,226 14,984 Special deferred 34,475 9,366 17,326 City property 10,510 Tax forfeit - Due from County 1,750 5,885 Total assets Liabilities and Fund Balance $335,107 $1,150,037 $365,532 Liabilities: Cash overdraft Deferred revenue $114,842 $204,349 $33,402 Total liabilities 114,842 204,349 33,402 Fund balance: Reserved for debt retirement 945,688 332,130 Unreserved: Undesignated 220,265 Total fund balance 220,265 945,688 332,130 Total liabilities and fund balance $335,107 $1,150,037 $365,532 Statement 10 Temporary Improvement Improvement Bonds of Bonds of 1991A 1992A 1989A Certificates of Indebtedness 1989B Certificates of Indebtedness $1,367,024 $570,976 $1,715 $68,207 3,288 2,875 870 781 7,777 1,163,436 15,471 586,218 537,418 18,216 5,200 1990 1991 Certificates Certificates of of Indebtedness Indebtedness Public Project Revenue Bonds of 1990A Totals December 31, 1992 1991 $1,302 $2,595 $48,017 $3,550,277 $3,289,418 6 6 44 885 1,427 2,678 11,295 7,058 257 593 879 3,387 3,005 83,629 118,250 1,970,047 1,487,373 598,585 598,585 10,510 142,553 101,384 31,051 6,943 $2,556,453 $1,715,283 $5,873 $71,863 82,444 $4,615 $51,580 $6,258,787 $5,754,613 $1,171,213 $1,139,107 $3,287 $2,875 $885 $1,427 1,171,213 1,139,107 3,287 2,875 885 1,427 $3,115 82,677 $2,674,064 2,455,203 2,677 2,674,064 2,458,318 1,385,240 576,176 1,385,240 576,176 82,556,453 $1,715,283 2,586 68,988 1,559 3,188 48,903 3,364,458 3,221,726 2,586 68,988 85,873 $71,863 220,265 74,569 1,559 3,188 48,903 3,584,723 3,296,295 $2,444 $4,615 $51,580 $6,258,787 $5,754,613 CITY OF LINO LAKES, MINNESOTA DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 1992 Temporary Temporary Improvement Improvement Improvement Improvement Improvement Improvement Closed Bonds Bonds Bonds Bonds of Bonds of Bonds of Bond of 1983 of 1984 of 1986 1988 1989 1990B Revenue: General property taxes: Current and delinquent $117 Fiscal disparities - Total general property taxes 117 Intergovernmental: State: HACA and equalization aid Total intergovernmental Special assessments: Current and delinquent 31,210 $118,830 $9,374 Prepayments 18,656 102,272 93,577 Tax forfeit - Penalties and interest - 19,942 6,462 Total special assessments 49,866 241,044 109,413 Interest on investments 8,736 $148 36,977 - 11,647 Total revenue 58,719 $0 148 $0 278,021 $0 121,060 Expenditures: Current: General government 1,760 Debt Service: Principal retirement 20,000 10,500 90,000 135,000 4,660,000 Interest - 750 708 2,550 57,142 142,130 61,915 Paying agent fees 188 - 200 180 205 405 Total expenditures 1,948 20,750 11,208 92,750 192,322 4,802,335 62,320 Revenue over (under) expenditures 56,771 (20,750) (11,060) (92,750) 85,699 (4,802,335) 58,740 Other increases (decreases): Operating transfer from General Fund Operating transfer from Capital Project Funds Operating transfer to Capital Project Funds (2,946) Operating transfer to Special Revenue Fund Bond proceeds 3,279,272 Total other increases (decreases) (2,946) 0 0 0 0 3,279,272 0 Net increase (decrease) in fund balance Fund balance (deficit) - January 1 53,825 (20,750) (11,060) (92,750) 85,699 (1,523,063) 58,740 76,600 45,624 6,731 162,045 859,989 1,523,063 273,390 Residual equity transfer in 94,169 - 4,329 Residual equity transfer out (4,329) (24,874) (69,295) Fund balance - December 31 $220,265 50 50 50 $945,688 $0 $332,130 Statement 11 - Temporary 1989A 1989B 1990 1991 Public :Improvement Improvement Certificates Certificates Certificates Certificates Project Bonds of Bonds of of of of of Revenue Bonds Totals 1991A 1992A Indebtedness Indebtedness Indebtedness Indebtedness of 1990A 1992 1991 $45,251 $40,699 $13,505 $32,189 $46,771 $178,532 $142,742 14,347 12,927 4,308 10,459 15,029 57,070 39,390 59,598 53,626 17,813 42,648 61,800 235,602 182,132 16,494 14,862 4,954 12,024 17,279 65,613 45,931 16,494 14,862 4,954 12,024 17,279 65,613 45,931 $63,566 $82,525 305,505 291,367 1,300,867 392,176 1,907,548 698,180 19,916 - 3,333 29,737 24,746 1,364,433 478,034 2,242,790 1,034,209 19,224 53,462 1,322 232 555 828 133,131 128,741 1,383,657 531,496 76,092 69,810 22,999 55,227 79,907 2,677,136 1,391,013 1,760 - 60,000 50,000 17,500 45,000 5,088,000 1,011,000 238,560 11,475 13,055 4,652 7,039 77,275 617,251 570,964 200 28,388 - - - - 1325 31,091 3,185 238,760 28,388 71,475 63,055 22,152 52,039 78,600 5,738,102 1,585,149 1,144,897 503,108 4,617 6,755 847 3,188 1,307 (3,060,966) (194,136) INEW 57,283 81,989 (2,946) (2,500) (10,362) 73,068 3352,340 291,808 0 73,068 0 0 0 0 0 3,349,394 418,218 1,144,897 576,176 4,617 6,755 847 3,188 1307 288,428 224,082 240,343 0 (2,031) 62,233 712 0 47,596 3,296,295 2,839,030 98,498 251,460 (98,498) (18,277) $1385,240 $576,176 $2,586 $68,988 $1,559 $3,188 $48,903 83,584,723 $3,296,295 - CITY OF LINO LAKES, MINNESOTA CAPITAL PROJECT FUNDS COMBINING BALANCE SHEET December 31, 1992 Statement 12 Page 1 of 2 Area Capital Community and Surface Centennial Dedicated Improvement Development Unit Water Fire Interim Parks Projects Block Grant Charge Management Station Construction Assets - Cash and investments $204,571 $138,782 $3,248,834 $52,910 Cash and investments with escrow agent - - Accounts receivable 4,400 - - - • Deposits receivable - 31,050 Due from other governmental units $2,325 - Taxes receivable: Delinquent - 6 Due from County - Delinquent tax increment - Special assessments receivable: - Delinquent - 29,494 5,250 Due from County 13,247 573 Deferred - 1,583,366 143,626 - Special deferred - 278,014 19,099 $78,982 Total assets Liabilities and Fund Balance $208,971 $138,788 $2,325 $5,184,005 $221,458 $78,982 $0 Liabilities: Cash overdraft - $12,125 $260,141 - Accounts payable $35 $7,479 - $45 771 Contracts payable 5,498 Deposits payable $258 - Due to other governmental units Deferred revenue 4,400 6 1,890,874 167,975 Total liabilities 4,435 7,485 12,125 1,891,132 168,020 $0 266,410 Fund balance (deficit): Unreserved: Designated: - Commited contracts - - - - Capital improvements 3,292,873 53,438 78,982 - Equipment acquisition 131,303 - - - - _ Park improvements 204,536 - - - Undesignated - (9,800) - (266,410) Total fund balance (deficit) 204,536 131,303 (9,800) 3,292,873 53,438 78,982 (266,410) Total liabilities and fund balance $208,971 $138,788 $2,325 $5,184,005 $221,458 $78,982 $0 CITY OF LINO LAKES, MINNESOTA CAPITAL PROJECT FUNDS COMBINING BALANCE SHEET December 31, 1992 MSA SAC 1989 1990 1991 Construction Sealcoating Revolving Construction Construction Construction Assets Cash and investments $37,100 $90,707 $431,816 $233,473 $43,687 Cash and investments with escrow agent Accounts receivable Deposits receivable Due from other governmental units - 29,983 Taxes receivable: Delinquent Due from County Delinquent tax increment Special assessments receivable: Delinquent 239 76 Due from County 104 Deferred 7,008 70,129 Special deferred $100,000 Total assets $44,347 $161,016 $431,816 $233,473 $73,670 $100,000 Liabilities and Fund Balance Liabilities: Cash overdraft Accounts payable Contracts payable Deposits payable Due to other governmental units Deferred revenue Total liabilities Fund balance (deficit): Unreserved: Designated: $7,247 $70,205 $241,279 $8,833 $444 4,017 63,449 7,247 70,205 $0 8,833 444 308,745 Commited contracts 48,215 Capital improvements 37,100 90,811 431,816 176,425 73,226 Equipment acquisition - - Park improvements - - Undesignated - - (208,745) Total fund balance (deficit) 37,100 90,811 431,816 224,640 73,226 (208,745) Total liabilities and fund balance $44,347 $161,016 $431,816 $233,473 $73,670 $100,000 Statement 12 Page 2 of 2 Tax Tax Tax Tax Industrial Apollo Increment Increment Increment Increment Totals Park Drive 1993 Financing Financing Financing Financing December 31, _ Construction Construction Construction 1 -1 1 -2 1 -3 1-4 1992 1991 Vsag $646,251 $739,271 $200,889 $5,422,040 $4,165,759 78,982 165,184 4,400 14,088 131,050 678,559 33,434 - 6 13 2,160 697 2,857 5,128 12,030 1,056 - 13,086 67,103 $0 $646,251 $0 $753,461 $202,642 35,059 7,838 13,924 3,555 1,804,129 747,747 297,113 297,113 $0 $8,481,205 $5,506,962 $73,901 $560,837 $162,905 $17,536 $12,586 $1,341,310 $192,964 52,287 971 74,882 142,830 - 150,283 6,216 225,446 273,502 - - 258 _ - $1,276 $1,168 357 813 3,614 - - 12,030 1,056 - - 2,153,793 1,124,214 73,901 763,407 170,092 13,306 2,224 17,893 13,399 3,799,303 1,733,510 - - - 48,215 349,590 - 740,155 200,418 5,175,244 3,308,097 - - - 131,303 142,852 - - - - - 204,536 220,620 (73,901) (117,156) (170,092) - - (17,893) (13,399) (877,396) (247,707) (73,901) (117,156) (170,092) 740,155 200,418 (17,893) (13,399) 4,681,902 3,773,452 $0 $646,251 $0 $753,461 $202,642 80 $0 $8,481,205 $5,506,962 CITY OF LINO LAKES, MINNESOTA CAPITAL PROJECT FUNDS COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 1992 Statement 13 Page 1 of 2 Capital Community Area and Surface Centetmial Dedicated Improvement Development Unit Water Fire Interim Parks Projects Block Grant Charge Management Station Construction Revenue: General property taxes: Current and delinquent $5 Tax increments Total general property taxes 5 Area and unit charges $433 ,546 Intergovernmental: State: MSA construction Federal: CDBG 812,888 Total intergovernmental 12,888 Special assessments: Current and delinquent 74,663 $6,489 Prepayments 627,176 122,167 $8,239 Penalties and interest 2,469 401 - Total special assessments 704,308 129,057 8,239 .� Interest on investments $10 ,372 8,773 101,248 $5,380 - Refunds and reimbursements - 1,909 Park dedication fees 42,950 Donations - -- Total revenue 53 ,322 8,778 12,888 1,239,102 129,057 5,380 10,148 Expenditures: General government: Current: `- Personal services - 11,812 Contractual services 17,101 8,691 5,146 34,242 Supplies 19,014 126 Capital outlay: General government 9,829 Public safety 84,109 Highways and streets 53,471 13 ,339 Parks, recreation and forestry 33,291 8,053 - - Conswction costs - - 13,416 133,008 Total expenditures 69,406 .155,462 20,629 5,146 47,581 13,416 133,008 Revenue over (under) expenditures (16,084) (146,684) (7,741) 1,233,956 81,476 (8,036) (122,860) Other increases (decreases): Operating transfer from General Fund 11,899 - Operating transfer from Debt Service Funds 2,946 - Operating transfer from Capital Project Funds - 40,103 Operating transfer from Enterprise Fund 96,712 - Operating transfer to Special Revenue Fund Operating transfer to Debt Service Funds Operating transfer to Capital Project Funds - (19,159) (4,856) Bond proceeds 135,135 - - Total other increases (decreases) 0 135,135 11,899 77,553 (4,856) 2,946 40,103 Net increase (decrease) In fund balance (16,084) (11,549) 4,158 1,311,509 76,620 (5,090) (82,757) Fund balance (deficit) - January 1 220,620 142,852 (13,958) 1,981,364 (23,182) 84,072 (183,653) Residual equity transfer Fund balance (deficit) - December 31 $204,536 $131,303 (59,800 $3,292,873 $53,438 $78,982 ($266,410) CITY OF LINO LAKES, MINNESOTA CAPITAL PROJECT FUNDS COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 1992 MSA SAC 1988B 1989 1990 Construction Sealcoating Revolving Construction Construction Construction Revenue: General property taxes: Current and delinquent Tax increments Total general property taxes Area and unit charges Intergovernmental: State: MSA construction Federal: CDBG Total intergovernmental Special assessments: Current and delinquent $1,918 $534 Prepayments 7,889 83,223 Penalties and interest 401 - Total special assessments 10,208 83,757 Interest on investments 1,350 743 519,357 $687 $8,847 $2,621 Refunds and reimbursements 3,510 - Parit dedication fees Donations Total revenue 11 ,558 88,010 19,357 687 8,847 2,621 Expenditures: General government: Current Personal services Contractual services Supplies Capital outlay: General government Public safety Highways and streets Parks, recreation and forestry Construction costs 21,625 324,378 6,613 Total expenditures 0 0 0 21,625 324,378 6,613 Revenue over (under) expenditures Other increases (decreases): Operating transfer from General Fund Operating transfer from Debt Service Funds Operating transfer from Capital Project Funds Operating transfer from Enterprise Fund Operating transfer to Special Revenue Fund Operating transfer to Debt Service Funds Operating transfer to Capital Project Funds Bond proceeds Total other increases (decreases) Net increase (decrease) in fund balance Fund balance (deficit) - January 1 Residual equity transfer Fund balance (deficit) - December 31 11,558 88,010 19,357 (20,938) (315,531) (3,992) 250,070 0 0 0 0 250,070 0 11,558 88,010 19,357 (20,938) (65,4.61) (3,992) 25,542 2,801 412,459 20,938 290,101 77,218 837,100 890,811 $431,816 $0 $224,640 $73,226 WIPP Statement 13 Page 2 of 2 Industrial Apollo Tax Increment Tax Increment Tax Increment Tax Increment 1991 1993 Park Drive Financing Financing Financing Financing Totals Construction Construction Construction Construction 1 -1 1 -2 1 -3 1-4 1992 1991 - 55 517 5217,819 5131,503 349,322 262,825 217,819 131,503 349,327 262,842 433,546 192,398 5646,251 646,251 12,888 44,736 646,251 659,139 44,736 83,604 67,480 848,694 223,221 3,271 935,569 290,701 $3,016 26,600 5,067 194,061 363,326 111 ,521 - 116,940 24,329 42,950 61 ,500 16,000 114 ,537 50 50 646,251 244,419 136,570 50 50 2,731,532 1,255,832 11,812 9,582 3,071 2,786 1,358 3,020 75,415 58,691 19,140 9,829 889,713 84,109 80,787 66,810 15,912 41 ,344 35,654 517,861 170,092 72,603 748,617 2,008,213 4,269,328 517,861 170,092 72,603 748,617 3,071 2,786 1,358 3,020 2,316,672 5,359,667 (403,324) (170,092) (72,603) (102,366) 241,348 133,784 (1 ,358) (3,020) 414,860 (4,103,835) 11,899 2,946 2,500 ... 40,103 106,392 96,712 52,320 (1 ,586) (1 ,586) (3,172) (81,989) (1,298) (14,790) (40,103) (106,392) - - 385,205 4,036,291 0 0 (1,298) (14,790) (1 ,586) (1 ,586) 0 0 493 ,590 4,009,122 (403 ,324) (170,092) (73,901) (117,156) 239,762 132,198 (1,358) (3,020) 908,450 (94,713) 194,579 0 0 0 500,393 68,220 (16 ,535) (10,379) 3,773,452 4,101 ,348 (233,183) (5208,745) (5170,092) (573,901) (5117,156) 5140,155 5200,418 ($17,893) (513,399) 54,681,902 53,773,452 CITY OF LINO LAKES, MINNESOTA ENTERPRISE FUNDS Statement 14 COMBINING BALANCE SHEET December 31, 1992 Assets Gas Totals Water and Sewer Utility 1992 1991 Current assets: Cash and cash equivalents $2,818 $2,818 $0 Restricted investments 102,675 102,675 Accounts receivable 146,517 146,517 100,470 Due from other governmental units 13,594 13,594 14,991 Prepaid items 14,406 14,406 2,194 Inventory 0 0 5,642 Total current assets 280,010 $0 280,010 123,297 Fixed assets: Well 18,500 18,500 18,500 Buildings 48,690 48,690 48,690 Equipment 47,538 47,538 47,535 Water and sewer system 6,949,185 6,949,185 6,224,189 Total fixed assets 7,063,913 7,063,913 6,338,914 Less: Allowance for depreciation (674,470) (674,470) (529,126) Subtotal 6,389,443 0 6,389,443 5,809,788 Acquisition costs - gas utility 2,375 2,375 2,375 Construction in progress 989,804 989,804 148,336 Net fixed assets 7,379,247 2,375 7,381,622 5,960,499 Total assets $7,659,257 $2,375 $7,661,632 $6,083,796 Liabilities and Fund Equity Current Liabilities: Cash overdraft $2,424 $2,424 $193,687 Accounts payable $9,495 9,495 18,193 Salaries payable 710 710 833 Contracts payable 43,190 43,190 5,090 Due to other governmental units 23,730 23,730 17,749 Accrued interest payable 41,732 41,732 Total current liabilities 118,857 2,424 121,281 235,552 Long Term Liabilities: Bonds payable - long term 1,060,000 1,060,000 Total liabilities 1,178,857 2,424 1,181,281 235,552 Fund equity: Contributions - net 6,384,363 6,384,363 5,803,635 Retained earnings (deficit) 96,037 (49) 95,988 44,609 Total fund equity 6,480,400 (49) 6,480,351 5,848,244 Total liabilities and fund equity $7,659,257 $2,375 $7,661,632 $6,083,796 alown �- CITY OF LINO LAKES, MINNESOTA ENTERPRISE FUND COMBINING STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS For The Year Ended December 31, 1992 Statement 15 Gas Totals Water and Sewer Utility 1992 1991 Operating revenue: Charges for services $371,510 $371,510 $230,218 - Other operating revenue 57,199 57,199 33,839 Total operating revenue 428,709 $0 428,709 264,057 Operating expenses: Personal services 91,300 91,300 79,127 Materials and supplies 55,295 55,295 29,819 .. Contractual services 22,853 22,853 36,680 Repair and maintenance 22,569 22,569 28,281 MWCC sewer charges 111,897 111,897 81,060 Depreciation: Purchased assets 1,073 1,073 1,190 Contributed assets 144,271 144,271 127,358 - Utilities 12,590 12,590 7,474 Other 25,432 25,432 24,389 Total operating expenses 487,280 0 487,280 415,378 Net income (loss) from operations (58,571) 0 (58,571) (151,321) Other income (expense): - Interest on investments 10,250 10,250 623 Maintenance agreement - MWCC 13,061 13,061 14,564 Area and unit charges 96,712 96,712 52,320 Bond interest (57,632) (57,632) Total other income (expense) 62,391 0 62,391 67,507 Net income (loss) before operating transfers 3,820 0 3,820 (83,814) Operating transfers: Operating transfer to Capital Project Funds (96,712) (96,712) (52,320) Net income poss) (92,892) 0 (92,892) (136,134) Credit arising from transfer of depreciation to contributions from property owners 144,271 144,271 127,358 Retained earnings (deficit) - January 1 44,658 (49) 44,609 53,385 - Retained earnings (deficit) - December 31 $96,037 ($49) $95,988 $44,609 CITY OF LINO LAKES, MINNESOTA ENTERPRISE FUND COMBINING STATEMENT OF CASH FLOWS For The Year Ended December 31, 1992 Statement 16 Water and Gas Totals Sewer Utility 1992 1991 Cash flows from operating activities: — Operating income (loss) ($58,571) ($58,571) ($151,321) Adjustments to reconcile operating (loss) to net cash flows from operating activities: Depreciation 145,344 145,344 128,548 Change in assets and liabilities: Decrease (increase) in receivables (44,650) (44,650) (27,915) Decrease (increase) in prepaid items (12,212) (12,212) 6,130 Decrease (increase) in inventory 5,642 5,642 (3,297) Increase (decrease) in payables 35,260 35,260 19,727 Net cash flows from operating activities 70,813 $0 70,813 (28,128) Cash flows from noncapital financing activities: Maintenance agreement - MWCC 13,061 13,061 14,564 Collection of area and unit charges 96,712 96,712 52,320 Operating transfer to Capital Project Funds (96,712) (96,712) (52,320) Net cash flows from noncapital financing activities 13,061 0 13,061 14,564 Cash flows from capital and related financing activities: Bond proceeds 1,044,100 1,044,100 0 — Construction in progress (841,468) (841,468) (148,336) Net cash flows from capital and related financing activities 202,632 0 202,632 (148,336) Cash flows from investing activities: Interest on investments 10,250 10,250 623 Net increase (decrease) in cash and cash equivalents 296,756 0 296,756 (161,277) Cash and cash equivalents - January 1 (191,263) (2,424) (193,687) (32,410) Cash and cash equivalents - December 31 $105,493 ($2,424) $103,069 ($193,687) Noncash investing, capital and financing activities: - Water and Sewer lines in the amount of $724,999 were contributed to the Water and Sewer Fund in 1992. CITY OF LINO LAKES, MINNESOTA AGENCY FUNDS COMBINING BALANCE SHEET December 31, 1992 Statement 17 Pending Totals Contractors Assessment Investment Deferred December 31, Deposits Deposits Fund Compensation 1992 1991 Assets ▪ Cash and investments $51,104 $144,050 $195,154 $190,613 Assets with deferred compensation plan administrator $224,960 224,960 213,215 - Accrued interest on investments $89,650 89,650 120,642 Accounts receivable 0 1,759 Due from developers 122,112 122,112 117,133 Total assets Liabilities $173,216 $144,050 $89,650 $224,960 $631,876 $643,362 Cash overdraft $89,641 $89,641 $176,114 Accounts payable 9 9 15,632 Due to developers $173,216 $144,050 317,266 238,401 .. Deferred compensation payable $224,960 224,960 213,215 Total liabilities $173,216 $144,050 $89,650 $224,960 $631,876 $643,362 CITY OF LINO LAKES, MINNESOTA AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES For The Year Ended December 31, 1992 Statement 18 Balance Balance January 1, December 31, 1992 Additions Deletions 1992 Contractors deposits: Assets Cash and investments $923,734 $872,630 $51,104 Accounts receivable $1,759 1,759 0 Due from developers 117,133 122,112 117,133 122,112 Total assets $118,892 $1,045,846 $991,522 $173,216 Liabilities Cash Overdraft $55,472 $55,472 $0 Accounts payable 15,632 15,632 0 Due to developers 47,788 $714,043 588,615 173,216 Total liabilities $118,892 $714,043 $659,719 $173,216 Pending Assessment Deposits: Assets Cash and investments $190,613 $2,141,745 $2,188,308 $144,050 Liabilities Due to developers $190,613 $2,141,745 $2,188,308 $144,050 Investment Fund: Assets Accrued interest on investments $120,642 $89,650 $120,642 $89,650 Liabilities Cash overdraft $120,642 $89,641 $120,642 $89,641 Accounts payable 9 9 Total liabilities $120,642 $89,650 $120,642 $89,650 Deferred Compensation: Assets Assets with plan administrator $213,215 $44,567 $32,822 $224,960 Liabilities Deferred compensation payable $213,215 $44,567 $32,822 $224,960 Totals -All Trust and Agency Funds: Assets Cash and investments $190,613 $3,065,479 $3,060,938 $195,154 Assets with plan administrator 213,215 44,567 32,822 224,960 Accrued interest on investments 120,642 89,650 120,642 89,650 Accounts receivable 1,759 1,759 0 Due from developers 117,133 122,112 117,133 122,112 Total assets $643,362 $3,321,808 $3,333,294 $631,876 Liabilities Cash overdraft $176,114 $89,641 $176,114 $89,641 Accounts payable 15,632 9 15,632 9 Due to developers 238,401 2,855,788 2,776,923 317,266 Deferred compensation payable 213,215 44,567 32,822 224,960 Total liabilities $643,362 $2,990,005 $3,001,491 $631,876 — CITY OF LINO LAKES, MINNESOTA SCHEDULE OF GENERAL FIXED ASSETS For the Year Ended December 31, 1992 - (Unaudited) Vamor Statement 19 Balance Balance January 1, December 31, 1992 Additions Deletions 1992 - Land $310,010 $310,010 Wells 6,216 6,216 w Buildings and improvements 579,352 $46,598 625,950 Furniture and equipment 1,224,019 178,256 1,402,275 Totals $2,119,597 $224,854 $0 $2,3.44,451 CITY OF LINO LAKES, MINNESOTA SCHEDULE OF GENERAL LONG - TERM DEBT December 31, 1992 Statement 20 Amount Available And To Be Provided For The Retirement of Long -Term Debt: Amount available in Debt Service Fund Amount to be provided - future tax levies/assessments /tax increment collections December 31, 1992 1991 $3,364,458 $3,221,726 7,920,779 9,505,740 Total available and to be provided $11,285,237 $12,727,466 General Long -Term Debt Payable: Bonds payable: General Obligation Bonds: 1989A Equipment Certificates $120,000 $180,000 1989B Equipment Certificates 175,000 225,000 1990A Equipment Certificates 53,500 71,000 1991A Equipment Certificates 90,000 Public Project Revenue Bonds - 1990A 1,115,000 1,115,000 Total General Obligation Bonds 1,553,500 1,591,000 General Obligation Bonds with special assessments pledged: G. O. Improvement Bonds of 1983 0 20,000 G. O. Improvement Bonds of 1984 0 10,500 G. O. Improvement Bonds of 1986 0 90,000 G. O. Improvement Bonds of 1988A 800,000 935,000 G. O. Temporary Improvement Bonds of 1989 0 4,660,000 G. O. Temporary Improvement Bonds of 1990B 1,015,000 1,015,000 G. 0. Improvement Bonds of 1991A 4,260,000 4,260,000 G. O. Improvement Bonds of 1992A 3,640,000 Total General Obligation Bonds with special assessments pledged 9,715,000 10,990,500 Total Bonds Payable 11,268,500 12,581,500 Assessments payable on City property 10,510 142,553 Capital lease: Phone system 734 3,413 Phone voice mail 5,493 Total general long -term debt $11,285,237 $12,727,466 SUPPLEMENTARY FINANCIAL INFORMATION CITY OF LINO LAKES, MINNESOTA COMBINED SCHEDULE OF INDEBTEDNESS December 31, 1992 Final Interest Maturity Rates Dated Date General Obligation Bonds: 1989A Equipment Certificates 7.65 5/1/89 5/1/94 1989B Equipment Certificates 6.65 8/1/90 2/1/95 1990A Equipment Certificates 6.50 12/10/90 1/1/96 1991A Equipment Certificates 4.95 - 5.40 12/19/91 1/1/95 Public Project Revenue Bonds - 1990A 7.12 10/1/90 2/1/10 Total General Obligation Bonds General Improvement Bonds with special assessments pledged: G. O. Improvement Bonds of 1983 8.65 10/1/83 10/1/93 G. O. Improvement Bonds of 1984 6.50 5/1/84 11/1/94 G. O. Improvement Bonds of 1986 5.43 12/1/86 2/1/97 G. O. Improvement Bonds of 1988A 6.43 10/1/88 2/1/97 G. O. Temporary Improvement Bonds of 1989 6.10 7/1/89 7/1/92 G. O. Temporary Improvement Bonds of 1990B 6.10 8/1/90 8/1/93 G. O. Temporary Improvement Bonds of 1991A 5.83 8/1/91 8/1/94 G. O. Improvement Bonds of 1992A 6.51 4/1/92 2/1/06 Total General Improvement Bonds with special assessments pledged Revenue Bonds: G. O. Water Revenue Bonds of 1992B Total - all bonds 6.67 4/1/92 2/1/08 Capital lease: Phone system 14.92 5/89 3/93 Phone voice mail 6.00 11/92 9/94 Total indebtedness MEW Exhibit 1 Prior Years Principal Interest "" Original Payable 1992 Payable Due Due Issue Payments 1/1/92 Issued Payments 12/31/92 In 1993 In 1993 $300,000 $120,000 $180,000 $60,000 $120,000 $60,000 $6,885 275,000 50,000 225,000 50,000 175,000 55,000 9,694 88,500 17,500 71,000 17,500 53,500 17,500 3,532 $135,000 45,000 90,000 45,000 4,793 1,115,000 1,115,000 1,115,000 0 77,275 - 1,778,500 187,500 1,591,000 135,000 172,500 1,553,500 177,500 102,179 .. 100,000 80,000 20,000 20,000 0 35,000 24,500 10,500 10,500 0 475,000 385,000 90,000 90,000 0 • 1,160,000 225,000 935,000 135,000 800,000 145,000 48,250 4,660,000 4,660,000 4,660,000 0 1,015,000 1,015,000 1,015,000 1,015,000 61,915 4,260,000 4,260,000 4,260,000 0 238,560 - 0 3,640,000 3,640,000 150,000 288,594 11,705,000 714,500 10,990,500 3,640,000 4,915,500 9,715,000 1,310,000 637,319 0 1,060,000 1,060,000 0 88,947 13,483,500 902,000 12,581,500 4,835,000 5,088,000 12,328,500 1,487,500 828,445 9,249 5,836 3,413 2,679 734 734 18 0 6,253 760 5,493 3,063 246 - $13,492,749 $907,836 $12,584,913 $4,841,253 $5,091,439 $12,334,727 $1,491,297 $828,709 CITY OF LINO LAKES, MINNESOTA SCHEDULE OF DEFERRED TAX LEVIES December 31, 1992 Exhibit 2 Public Project G. 0. -- Year of Equipment Equipment Equipment Equipment Equipment Revenue Improvement Levy/ Certificates Certificates Certificates Certificates Certificates Bonds Bonds Collection of 1989A of 1989B of 1990A of 1991 of 1992* of 1990A of 1992A Total 1992/1993 $72,639 $71,316 $22,084 $50,440 $81,139 $297,618 1993/1994 67,819 67,190 20,889 49,801 107,389 $259,040 572,128 ,_ 1994/1995 20,726 $111,626 105,735 308,634 546,721 1995/1996 54,679 104,055 323,580 482,314 1996/1997 118,112 347,577 465,689 1997/1998 125,882 358,583 484,465 1998/1999 122,417 357,328 479,745 1999/2000 145,150 354,861 500,011 2000/2001 139,834 353,352 493,186 2001/2002 134,479 358,981 493,460 2002/2003 129,045 367,953 496,998 2003/2004 149,783 369,724 519,507 - 2004/2005 142,433 348,731 491,164 2005/2006 134,978 134,978 2006/2007 127,523 127,523 - 2007/2008 120,015 120,015 2008/2009 112,508 112,508 N. $140,458 $138,506 $63,699 $100,241 $166,305 $2,100,477 $4,108,344 $6,818,030 * These certificates were authorized but not issued at December 31, 1992. CITY OF LINO LAKES, MINNESOTA DEBT SERVICE PAYMENTS TO MATURITY December 31, 1992 Equipment Equipment Equipment Equipment Cetificates Cetificates Cetificates Cetificates of 1989A of 1989B of 1990A of 1991A Bonds payable $120,000 $175,000 $53,500 $90,000 Future interest payable 9,180 17,644 7,167 7,223 Totals $129,180 $192,644 $60,667 $97,223 Payments to maturity: 1993 $66,885 $64,694 $21,032 $49,793 1994 62,295 65,955 19,895 47,430 1995 61,995 19,740 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 $129,180 $192,644 $60,667 $97,223 MOW Exhibit 3 G. O. Improvement Bonds of 1988 $800,000 139,804 $939,804 $193,250 193,572 178,584 183,108 191,290 $939,804 G. O. Temporary Improvement Bonds of 1990B G. O. Temporary Improvement Bonds of 1991A $1,015,000 61,915 $1,076,915 $1,076,915 $1,076,915 $4,260,000 477,120 $4,737,120 $238,560 4,498,560 $4,737,120 G. O. Improvement Bonds of 1992A $3,640,000 1,945,047 $5,585,047 $438,594 359,320 352,195 393,195 402,005 418,940 423,850 417,345 409,743 401,080 401,080 399,460 396,180 372,060 G. 0. Public Water Project Revenue Revenue Bonds Bonds of 1992B of 1990A Totals $1,060,000 $1,115,000 $12,328,500 712,177 924,090 4,301,367 $1,772,177 $2,039,090 $16,629,867 $88,946 $77,275 $2,315,944 91,147 77,275 5,415,449 104,565 101,488 818,567 112,233 99,900 788,436 109,545 98,294 801,134 111,589 111,188 641,717 108,358 118,238 650,446 114,709 114,913 646,967 115,505 135,706 660,954 115,900 130,625 647,605 115,900 125,488 642,468 115,495 120,275 635,230 114,675 139,150 650,005 118,310 132,100 622,470 116,390 125,000 241,390 118,910 117,875 236,785 110,725 110,725 103,575 103,575 $5,585,047 $1,772,177 $2,039,090 $16,629,867 CITY OF LINO LAKES, MINNESOTA CONSTRUCTION WORK IN PROCESS December 31, 1992 Exhibit 4 Description Land Expended Easements Prior Contractor Engineering and Other Total 1992 Years Fund 550: Interim Construction Highway 49 and Lake Drive $90,412 $5,588 $96,000 $29 ,398 $66,602 Elmcrest Avenue 32,787 32,787 525 32,262 County Road J 3,061 61 3,122 * 2,596 526 Birch Street Underpass $85,825 17,134 1,140 104,099 100,489 3,610 Otter Bay 538 396 934 * 0 934 Total Fund 550 85,825 143,932 7,185 236,942 133,008 103,934 Fund 551: Industrial Park Construction Industrial Park 290 73,611 73,901 72,603 1,298 Fund 552: Apollo Drive Construction Apollo Drive 551,565 195,095 16,747 763,407 748,617 14,790 Fund 566: 1988B Construction D. Erickson's Phase 2 209,761 35,867 13,803 259,431 * 637 258,794 Reshanau Phase 2 185,492 37,980 44,731 268,203 * 20,988 247,215 Total Fund 566 395,253 73,847 58,534 527,634 21,625 506,009 al Elk Fund 567: 1989 Construction West Central Sewer and Water Trunk 1,588,603 296,189 100,622 1,985,414 * 0 1,985,414 Carlson 629,986 160,771 61,210 851,967 * 25,376 826,591 Sunrise Meadows 685,734 152,331 46,459 884,524 7,887 876,637 Reshanau third addition 187,736 45,097 19,214 252,047 * 39,358 212,689 Reshanau fourth and fifth addition 313,362 78,573 5,608 397,543 251,757 145,786 Total Fund 567 3,405,421 732,961 233,113 4,371,495 324,378 4,047,117 -4. Fund 568: Centennial Fire Station Fire Station #2 5,598 7,818 13,416 * 13,416 Fund 569: 1990 Construction 2nd Avenue 599,971 191,422 51,820 843,213 * 6,613 836,600 Fund 570: 1991 Construction Pine Ridge 462,339 96,721 24,342 583,402 44,466 538,936 Brandywood 581,002 179,484 41,800 802,286 18,039 784,247 Pheasant Hills 497,447 153,516 47,999 698,962 145,602 553,360 White Tail Ridge 40,709 16,813 2,915 60,437 0 60,437 Wenzel Farms 818,366 139,904 62,386 1,020,656 188,605 832,051 Reshanau Lake Trunk 826,400 257,076 94,951 1,178,427 * 121,149 1,057,278 Total Fund 570 3,226,263 843,514 274,393 4,344,170 517,861 3,826,309 Fund 571: 1993 Construction Wenzel Farms 3rd Addition 15,956 15,956 15,956 Brandywood 2nd Additon 124,325 29,811 154,136 154,136 Total Fund 571 124,325 45,767 0 170,092 170,092 0 Totals $8,394,221 $2,226,828 $723,221 $11,344,270 $2,008,213 $9,336,057 * Completed Project 0 mak CITY OF LINO LAKES, MINNESOTA INSURANCE IN FORCE December 31, 1992 Exhibit 5 Coverage Amount General Liability: Bodily Injury/Property Damage $600,000 Personal Injury/Police Professional Liability 600,000 Fire Legal Liability 50,000 - Medical Expense Occurrence Limit 1,000 Medical Expense Aggregate 10,000 Property Damage ($250 Deductible) Property: Buildings and Contents 3,664,100 Valuable Papers ($250 Deductible) 50,000 Faithful Performance Blanket Bond 100,000 Storage Tank Liability 100,000 Mobile Equipment ($500 Deductible) 382,890 ▪ EDP - Electronic Equipment ($500 Deductible) 75,180 Public Official and Employee Liability ($1,000 Deductible each occurrence) 600,000 Automotive: Bodily injury and property damage 600,000 Comprehensive and Collision ACV Uninsured motorists 600,000 Miscellaneous equipment 50,000 Workmen's compensation Statutory — Employee Benefit Level 600,000 Umbrella Liability 1,000,000 Crime - Theft Disappearance and Destruction ($250 Deductible) 50,000 CITY OF LINO LAKES, MINNESOTA TAXABLE VALUATIONS, TAX LEVIES AND TAX RATES Exhibit 6 Tax Capacity Tax Capacity Values Values 1992/1993 1991/1992 Taxable valuations: Total $4,867,812 $4,648,676 Fiscal disparities: Distribution 1,208,758 1,325,296 Contribution (254,229) (242,230) Less: Captured Tax Increment Value (244,419) (245,834) Totals $5,577,922 $5,485,908 Tax Tax Certified Capacity Certified Capacity Levy Rate Levy Rate Taxes levied: Revenue $1,776,369 25.169 $1,557,076 22.391 Bond and interest 297,618 4.217 308,112 4.431 Totals $2,073,987 29.386 $1,865,188 26.822 CITY OF LINO LAKES, MINNESOTA SCHEDULE OF SOURCES AND USES OF FUNDS FOR TAX INCREMENT HOUSING DISTRICT #1 -1 December 31, 1992 Exhibit 7 Accounted Amended for in Current Amount Budget Prior Years Year Remaining Sources of funds: Bond proceeds $1,200,000 $1,200,000 Tax increment collections 2,404,254 $462,685 $217,819 1,723,750 Interest on investments 39,672 26,600 (66,272) Total sources of funds 3,604,254 502,357 244,419 2,857,478 Uses of funds: Public improvements 974,094 974,094 Administrative 1,964 3,071 (5,035) Bonding costs 25,000 25,000 Bond discount 24,000 24,000 Capitalized interest 192,404 192,404 Debt service 2,355,000 2,355,000 Transfer to other funds 1,586 (1,586) Total uses of funds 3,570,498 1,964 4,657 3,563,877 Funds remaining (deficit) $33,756 $500,393 $239,762 ($706,399) CITY OF LINO LAKES, MINNESOTA SCHEDULE OF SOURCES AND USES OF FUNDS FOR TAX INCREMENT HOUSING DISTRICT #1 -2 December 31, 1992 Exhibit 8 Accounted Amended for in Current Amount Budget Prior Years Year Remaining Sources of funds: Bond proceeds $975,000 $975,000 Tax increment collections $76,627 $131,503 (208,130) Interest on investments $1,110 5,067 (6,177) Total sources of funds 975,000 $77,737 136,570 760,693 Uses of funds: Public improvements 170,000 170,000 Land acquisition 515,000 515,000 Demolition and site preparation 23,500 23,500 Relocation costs 15,000 15,000 Administrative 31,500 9,517 2,786 19,197 Bond discount 20,000 20,000 Capitalized interest 200,000 200,000 Transfer to other funds 1586 (1,586) Total uses of funds 975,000 9,517 4,372 961,111 Funds remaining (deficit) $0 $68,220 $132,198 ($200,418) — CITY OF LINO LAKES, MINNESOTA SCHEDULE OF SOURCES AND USES OF FUNDS FOR TAX INCREMENT FINANCING DISTRICT #1 -3 -. December 31, 1992 Valor Exhibit 9 Accounted Amended for in Current Amount Budget Prior Years Year Remaining — Sources of funds: Tax increment collections $259,260 Total sources of funds 259,260 $259,260 $0 $0 259,260 Uses of funds: Land aquisition 200,000 200,000 Administrative 22,000 16,535 1,358 4,107 Total uses of funds 222,000 16,535 1,358 204,107 Funds remaining (deficit) $37,260 ($16,535) ($1,358) $55,153 CITY OF LINO LAKES, MINNESOTA SCHEDULE OF SOURCES AND USES OF FUNDS FOR TAX INCREMENT FINANCING DISTRICT #1-4 December 31, 1992 Exhibit 10 Accounted Amended for in Current Amount Budget Prior Years Year Remaining Sources of funds: Bond proceeds $1,950,000 $1,950,000 Refunds and reimbursements $18,889 (18,889) Total sources of funds 1,950,000 18,889 $0 1,931,111 Uses of funds: Land acquisition 400,000 400,000 Public improvements 1,050,000 1,050,000 Administrative 100,000 29,268 3,020 67,712 Bond discount 40,000 40,000 Capitalized interest 360,000 360,000 Total uses of funds 1,950,000 29,268 3,020 1,917,712 Funds remaining (deficit) $0 ($10,379) ($3,020) $13,399 amloo i limmr CITY OF LINO LAKES, MINNESOTA ENTERPRISE FUND WATER AND SEWER FUND SCHEDULE OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS For The Year Ended December 31, 1992 Exhibit 11 Total Water Sewer 1992 1991 Operating revenue: Charges for services $166,563 $204,947 $371,510 $230,218 - Other operating revenue 55,773 1,426 57,199 33,839 Total operating revenue 222,336 206,373 428,709 264,057 Operating expenses: Personal services 47,469 43,831 91,300 79,127 Materials and supplies 54,366 929 55,295 29,819 -_ Contractual services 9,207 13,646 22,853 36,631 Repair and maintenance 15,028 7,541 22,569 28,281 MWCC sewer charges 111,897 111,897 81,060 - Depreciation: Purchased assets 361 712 1,073 1,190 Contributed assets 59,976 84,295 144,271 127,358 Utilities 7,267 5,323 12,590 7,474 T Other 9,586 15,846 25,432 24,389 Total operating expenses 203,260 284,020 487,280 415,329 Net income (loss) from operations $19,076 ($77,647) (58,571) (151,272) Other income (expense): Interest on investments 10,250 623 Maintenance agreement - MWCC 13,061 14,564 Area and unit charges 96,712 52,320 Bond interest (57,632) Total other income (expense) 62,391 67,507 - Net income (loss) before operating transfers 3,820 (83,765) Operating transfers: - Operating transfer to Capital Project Funds Net income (loss) Credit arising from transfer of depreciation to contributions from property owners Retained earnings - January 1 - Retained earnings - December 31 (96,712) (52,320) (92,892) (136,085) 144,271 127,358 44,658 53,385 $96,037 $44,658 TA UTGES, REDPA TH & CO., LTD. -ERT F.^_ PUBLIC ACCOUNTANTS AUDITOR'S COMMENTS ON COMPLIANCE To the Honorable Mayor and Members of the City Council City of Lino Lakes, Minnesota We have audited the general purpose financial statements of the City of Lino Lakes, Minnesota, as of and for the year ended December 31, 1992 and have issued our report thereon dated March 5, 1993. We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of the Minnesota Legal Compliance Audit Guide for Local Government promulgated by the Legal Compliance Task Force pursuant to Minnesota Statutes Section 6.65. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. General Purpose Financial Statements Compliance with laws, regulations, contracts, and grants applicable to the City of Lino Lakes, is the responsibility of the City's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the City's compliance with certain provisions of laws, regulations, contracts, and grants. However, our objective was not to provide an opinion on overall compliance with such provisions. The results of our tests indicated that, with respect to the items tested, the City of Lino Lakes complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the City of Lino Lakes had not complied, in all material respects, with those provisions. Legal Compliance The Minnesota Legal Compliance Audit Guide for Local Government covers five main categories of compliance to be tested: 1) Contracting and Bidding 2) Deposits and Investments 3) Conflicts of Interest 4) Public Indebtedness 5) Claims and Disbursements Our study included all of the above listed categories. The results of our tests indicate that for the items tested, the City of Lino Lakes, Minnesota complied with the material terms and conditions of applicable legal provisions, except as described in this letter. 4810 White Bear Parkway • White Bear Lake. Minnesota 55110 • 612/426 -7000 • FAX /426 -5004 • Member of HLB International City of Lino Lakes, Minnesota Legal Compliance Report, Page 2 FINDING: CONDITION: CRITERIA: Untimely Reporting of Outstanding Obligations to County Auditor On or before February 1st of each year, the City of Lino Lakes is required to report to the County auditor the total amount of outstanding obligations as of December 31st of the preceding year. The City received this report form from the County on February 15, 1993. The City filed this report on February 19, 1993. Minnesota Statute 471.70 reads as follows: 471.70 REPORTING OF OBLIGATIONS BY CITIES, TOWNS, SCHOOL DISTRICTS, AND BODIES CORPORATE AND POLITIC. For the purposes of this section "municipality" means a city, however organized; a school district, however organized; a town; or any other body corporate and politic created under Minnesota law. An "obligation" as used in this section means an obligation as defined in chapter 475. On or before February first each year, it shall be the duty of the principal accounting officer of each municipality to report to the auditor of each county in which such municipality is situate, the total amount of outstanding obligations, and the purpose for which issued as of December 31 of the preceding year. Such report shall be kept by the auditor of each county in a suitable record. On March first each year, it shall be the duty of the auditor of each county to report to the state auditor of such obligations as reported to the county auditor by the principal accounting officer of the municipality, together with the amount and character of all outstanding obligations issued by the county. RECOMMENDATION: We recommend that the City contact the County and inform them of the statutory requirements that the report be filed prior to February 1st. City of Lino Lakes, Minnesota Legal Compliance Report, Page 3 FINDING: CONDITION: CRITERIA: Lack of Endorsement on Claims The City does not employ a claim system. This is not uncommon for Minnesota cities. There is a statutory requirement which outlines the disbursing process and refers to approvals based on a claim system. The City does not have alternate approval mechanisms which provide reasonable assurances that authorized amounts are disbursed. The lack of claim procedures as referred to in Minnesota statutes may be considered noncompliance with statutes. Minnesota Statute 412.271 reads in part as follows: 412.271 DISBURSEMENTS. Subd. 3. Endorsement on claims. The clerk shall endorse on each claim required to be audited by the council the word "disallowed" if such be the fact, or, "allowed in the sum of $ ," if approved in whole or in part, specifying in the latter case the items rejected. Each order shall be so drawn that when signed by the treasurer in an appropriate space, it becomes a check on the city depository. Such order -check may have printed on its reverse side, above the space for endorsement thereof by the payee, the following statement: "The undersigned payee, in endorsing this order - check, declares that the same is received in payment of a just and correct claim against the city of , and that no part of such claim has heretofore been paid." When endorsed by the payee named in the order - check, such statement shall operate and shall be deemed sufficient as the required declaration of the claim. Any order presented to the treasurer and not paid for want of funds shall be so marked and paid in the order of its presentation with interest from the date of presentation at the rate of five percent or such lower rate as is fixed by the council prior to its issuance. RECOMMENDATION: Our office has requested clarification of this issue from the Office of the State Auditor regarding the applicability of the MS 412.271. Pending the result of this request, we will advise the City of required corrective actions (if any). The 1988 Minnesota State legislative session had proposed legislation (as an add -on provision) to amend the preceding statute. The add -on provision, however, was eliminated and may be considered in future sessions. City of Lino Lakes, Minnesota Legal Compliance Report, Page 4 FINDING: No Performance Bond on Work Performed For An Amount Over $10.000 CONDITION: For a contract over $10,000, the contractor must provide a performance bond. There was no performance bond provided for construction performed by Jim's Remodeling on the Old Fire Hall for $14,000. CRITERIA: Minnesota Statute 574.26 reads as follows: 574.26 CONTRACTORS' BONDS. Except as provided in sections 574.263 and 574.264 or if the amount of the contract is $10,000 or less, a contract with the state, or with any municipal corporation or other public board or body thereof, for the doing of any public work, is not valid unless the contractor shall give bond to the state or other body contracted with, for the use of the obligee, the state and of all persons doing work or furnishing skill, tools, machinery, or materials or insurance premiums or equipment or supplies for any camp maintained for the feeding or keeping of workers and animals engaged under, or for the purpose of, such contract, conditioned for the payment, as they become due, of all just claims for such work, tools, machinery, skill, materials, insurance premiums, equipment, taxes incurred under section 290.92 or chapter 297A, and supplies for the completion of the contract in accordance with its terms, for saving the obligee harmless from all costs and charges that may accrue on account of the doing of the work specified, and for the enforcing of the terms of the bond if action is brought on the bond, including reasonable attorney's fees, in any case where such action is successfully maintained and for the compliance with the laws appertaining thereto. The penalty of such bond shall be not less than the contract price, and if after the giving of the bond the contract price should for any reason by increased, the obligee may require an additional bond, the penalty of which shall be not less than the amount of such increase, and if such additional bond be not furnished within ten days after such demand, the work on the contract shall cease until such additional bond shall have been furnished. In contracts made by the commissioner of administration or the department of transportation of the state, the penalty of the bond shall be in such amount as the commissioner of administration or the commissioner of transportation may fix, but not less than three quarters of the contract price. RECOMMENDATION: We recommend that the City receive performance bonds for work to be performed in excess of $10,000. City of Lino Lakes, Minnesota Legal Compliance Report, Page 5 FINDING: Not Letting a Contract To The Lowest Bidder CONDITION: On January 13, 1993, a contract was let for the amount of $14,000. A quotation for a lower amount was received and not awarded. CRITERIA: Minnesota Statute 412.311 reads as follows: 412.311 CONTRACTS. Except as provided in sections 471.87 to 471.89, no member of a council shall be directly or indirectly interested in any contract made by the council. Whenever the amount of a contract for the purchase of merchandise, materials or equipment or for any kind of construction work undertaken by the city is estimated to exceed the amount specified by section 471.34, subdivision 3, the contract shall be let to the lowest responsible bidder, after notice has been published once in the official newspaper at least ten days in advance of the last day for the submission of bids. If the amount of the contract exceeds $1,000, it shall be entered into only after compliance with section 471.345. RECOMMENDATION: We recommend that the City award contracts to the lowest responsible bidder. City of Lino Lakes, Minnesota Legal Compliance Report, Page 6 FINDING: Bids for a Contract Were Not Kept on File. CONDITION: The City is required to keep bids for contracts on file. Only the bid of the contractor who was awarded the project was on file. CRITERIA: Minnesota Statute 15.17 reads as follows: 15.17 OFFICIAL RECORDS Subdivision 1. Must Be kept. All officers and agencies of the state, counties, cities, towns, school districts, municipal subdivisions or corporations, or other public authorities or political entities within the state, hereinafter "public officer," shall make and preserve all records necessary to a full and accurate knowledge of their official activities. All government records shall be made on a physical medium of a quality to insure permanent records. Every public officer is empowered to reproduce records if the records are not deemed to be of permanent or archival value by the commissioner of administration and the records disposition panel under section 138.17. The public officer is empowered to reproduce these records by any photographic, photostats, microphotographic, optical disk imaging system, microfilming, or other reproduction method that clearly and accurately reproduces the records. If a record is deemed to be of permanent or archival value, any reproduction of the record must meet archival standards specified by the Minnesota Historical Society. Each public officer may order that those photographs, photostats, microphotographs, microfilms, optical disk images, or other reproductions, be substituted for the originals of them. The public officer may direct the destruction or sale for salvage or other disposition of the originals from which they were made, in accordance with the disposition requirements of section 138.17. Photographs, photostats, microphotographs, microfilms, optical disk images, or other reproductions are for all purposes deemed the original recording of the papers, books, documents, and records reproduced when so ordered by any public officer and are admissible as evidence in all courts and proceedings of every kind. A facsimile or exemplified or certified copy of photographs, photostats, microphotographs, microfilms, optical disk images, or other reproductions, or an enlargement or reduction of it has the same effect and weight as evidence as would a certified or exemplified copy of the original. RECOMMENDATION: We recommend that the City keep all bids on file. City of Lino Lakes, Minnesota Legal Compliance Report, Page 7 Further, for the items not tested, based on our audit and the procedures referred to above, nothing came to our attention to indicate that the City of Lino Lakes, Minnesota had not complied with such legal provisions. This report is intended solely for the use of the City of Lino Lakes, Minnesota and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, TAUTGES, REDPATH & CO., LTD. Certified Public Accountants March S, 1993 r TA UTGES, REDPA TH & CO., LTD. CER 17F 7ED PUBLIC ACCOUNTANTS AUDITOR'S COMMENTS ON COMPLIANCE To the Honorable Mayor and Members of the City Council City of Lino Lakes, Minnesota We have audited the general purpose financial statements of the City of Lino Lakes, Minnesota, as of and for the year ended December 31, 1992 and have issued our report thereon dated March 5, 1993. We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of the Minnesota Legal Compliance Audit Guide for Local Government promulgated by the Legal Compliance Task Force pursuant to Minnesota Statutes Section 6.65. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. General Purpose Financial Statements Compliance with laws, regulations, contracts, and grants applicable to the City of Lino Lakes, is the responsibility of the City's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the City's compliance with certain provisions of laws, regulations, contracts, and grants. However, our objective was not to provide an opinion on overall compliance with such provisions. The results of our tests indicated that, with respect to the items tested, the City of Lino Lakes complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the City of Lino Lakes had not complied, in all material respects, with those provisions. Legal Compliance The Minnesota Legal Compliance Audit Guide for Local Government covers five main categories of compliance to be tested: 1) Contracting and Bidding 2) Deposits and Investments 3) Conflicts of Interest 4) Public Indebtedness 5) Claims and Disbursements Our study included all of the above listed categories. The results of our tests indicate that for the items tested, the City of Lino Lakes, Minnesota complied with the material terms and conditions of applicable legal provisions, except as described in this letter. 4810 White Bear Parkway • White Bear Lake. Minnesota 55110 • 612/426 -7000 • FAX /426 -5004 • Member of HLB International City of Lino Lakes, Minnesota Legal Compliance Report, Page 2 FINDING: CONDITION: CRITERIA: Untimely Reporting of Outstanding Obligations to County Auditor On or before February 1st of each year, the City of Lino Lakes is required to report to the County auditor the total amount of outstanding obligations as of December 31st of the preceding year. The City received this report form from the County on February 15, 1993. The City filed this report on February 19, 1993. Minnesota Statute 471.70 reads as follows: 471.70 REPORTING OF OBLIGATIONS BY CITIES, TOWNS, SCHOOL DISTRICTS, AND BODIES CORPORATE AND POLITIC. For the purposes of this section "municipality" means a city, however organized; a school district, however organized; a town; or any other body corporate and politic created under Minnesota law. An "obligation" as used in this section means an obligation as defined in chapter 475. On or before February first each year, it shall be the duty of the principal accounting officer of each municipality to report to the auditor of each county in which such municipality is situate, the total amount of outstanding obligations, and the purpose for which issued as of December 31 of the preceding year. Such report shall be kept by the auditor of each county in a suitable record. On March first each year, it shall be the duty of the auditor of each county to report to the state auditor of such obligations as reported to the county auditor by the principal accounting officer of the municipality, together with the amount and character of all outstanding obligations issued by the county. RECOMMENDATION: We recommend that the City contact the County and inform them of the statutory requirements that the report be filed prior to February 1st. City of Lino Lakes, Minnesota Legal Compliance Report, Page 3 FINDING: CONDITION: CRITERIA: Lack of Endorsement on Claims The City does not employ a claim system. This is not uncommon for Minnesota cities. There is a statutory requirement which outlines the disbursing process and refers to approvals based on a claim system. The City does not have alternate approval mechanisms which provide reasonable assurances that authorized amounts are disbursed. The lack of claim procedures as referred to in Minnesota statutes may be considered noncompliance with statutes. Minnesota Statute 412.271 reads in part as follows: 412.271 DISBURSEMENTS. Subd. 3. Endorsement on claims. The clerk shall endorse on each claim required to be audited by the council the word "disallowed" if such be the fact, or, "allowed in the sum of $ ," if approved in whole or in part, specifying in the latter case the items rejected. Each order shall be so drawn that when signed by the treasurer in an appropriate space, it becomes a check on the city depository. Such order -check may have printed on its reverse side, above the space for endorsement thereof by the payee, the following statement: "The undersigned payee, in endorsing this order - check, declares that the same is received in payment of a just and correct claim against the city of , and that no part of such claim has heretofore been paid." When endorsed by the payee named in the order - check, such statement shall operate and shall be deemed sufficient as the required declaration of the claim. Any order presented to the treasurer and not paid for want of funds shall be so marked and paid in the order of its presentation with interest from the date of presentation at the rate of five percent or such lower rate as is fixed by the council prior to its issuance. RECOMMENDATION: Our office has requested clarification of this issue from the Office of the State Auditor regarding the applicability of the MS 412.271. Pending the result of this request, we will advise the City of required corrective actions (if any). The 1988 Minnesota State legislative session had proposed legislation (as an add -on provision) to amend the preceding statute. The add -on provision, however, was eliminated and may be considered in future sessions. City of Lino Lakes, Minnesota Legal Compliance Report, Page 4 FINDING: No Performance Bond on Work Performed For An Amount Over $10.000 CONDITION: For a contract over $10,000, the contractor must provide a performance bond. There was no performance bond provided for construction performed by Jim's Remodeling on the Old Fire Hall for $14,000. CRITERIA: Minnesota Statute 574.26 reads as follows: 574.26 CONTRACTORS' BONDS. Except as provided in sections 574.263 and 574.264 or if the amount of the contract is $10,000 or less, a contract with the state, or with any municipal corporation or other public board or body thereof, for the doing of any public work, is not valid unless the contractor shall give bond to the state or other body contracted with, for the use of the obligee, the state and of all persons doing work or furnishing skill, tools, machinery, or materials or insurance premiums or equipment or supplies for any camp maintained for the feeding or keeping of workers and animals engaged under, or for the purpose of, such contract, conditioned for the payment, as they become due, of all just claims for such work, tools, machinery, skill, materials, insurance premiums, equipment, taxes incurred under section 290.92 or chapter 297A, and supplies for the completion of the contract in accordance with its terms, for saving the obligee harmless from all costs and charges that may accrue on account of the doing of the work specified, and for the enforcing of the terms of the bond if action is brought on the bond, including reasonable attorney's fees, in any case where such action is successfully maintained and for the compliance with the laws appertaining thereto. The penalty of such bond shall be not less than the contract price, and if after the giving of the bond the contract price should for any reason by increased, the obligee may require an additional bond, the penalty of which shall be not less than the amount of such increase, and if such additional bond be not furnished within ten days after such demand, the work on the contract shall cease until such additional bond shall have been furnished. In contracts made by the commissioner of administration or the department of transportation of the state, the penalty of the bond shall be in such amount as the commissioner of administration or the commissioner of transportation may fix, but not less than three quarters of the contract price. RECOMMENDATION: We recommend that the City receive performance bonds for work to be performed in excess of $10,000. City of Lino Lakes, Minnesota Legal Compliance Report, Page 5 FINDING: Not Letting a Contract To The Lowest Bidder CONDITION: On January 13, 1993, a contract was let for the amount of $14,000. A quotation for a lower amount was received and not awarded. CRITERIA: Minnesota Statute 412.311 reads as follows: 412.311 CONTRACTS. Except as provided in sections 471.87 to 471.89, no member of a council shall be directly or indirectly interested in any contract made by the council. Whenever the amount of a contract for the purchase of merchandise, materials or equipment or for any kind of construction work undertaken by the city is estimated to exceed the amount specified by section 471.34, subdivision 3, the contract shall be let to the lowest responsible bidder, after notice has been published once in the official newspaper at least ten days in advance of the last day for the submission of bids. If the amount of the contract exceeds $ 1,000, it shall be entered into only after compliance with section 471.345. RECOMMENDATION: We recommend that the City award contracts to the lowest responsible bidder. City of Lino Lakes, Minnesota Legal Compliance Report, Page 6 FINDING: Bids for a Contract Were Not Kept on File. CONDITION: The City is required to keep bids for contracts on file. Only the bid of the contractor who was awarded the project was on file. CRITERIA: Minnesota Statute 15.17 reads as follows: 15.17 OFFICIAL RECORDS Subdivision 1. Must Be kept. All officers and agencies of the state, counties, cities, towns, school districts, municipal subdivisions or corporations, or other public authorities or political entities within the state, hereinafter "public officer," shall make and preserve all records necessary to a full and accurate knowledge of their official activities. All government records shall be made on a physical medium of a quality to insure permanent records. Every public officer is empowered to reproduce records if the records are not deemed to be of permanent or archival value by the commissioner of administration and the records disposition panel under section 138.17. The public officer is empowered to reproduce these records by any photographic, photostats, microphotographic, optical disk imaging system, microfilming, or other reproduction method that clearly and accurately reproduces the records. If a record is deemed to be of permanent or archival value, any reproduction of the record must meet archival standards specified by the Minnesota Historical Society. Each public officer may order that those photographs, photostats, microphotographs, microfilms, optical disk images, or other reproductions, be substituted for the originals of them. The public officer may direct the destruction or sale for salvage or other disposition of the originals from which they were made, in accordance with the disposition requirements of section 138.17. Photographs, photostats, microphotographs, microfilms, optical disk images, or other reproductions are for all purposes deemed the original recording of the papers, books, documents, and records reproduced when so ordered by any public officer and are admissible as evidence in all courts and proceedings of every kind. A facsimile or exemplified or certified copy of photographs, photostats, microphotographs, microfilms, optical disk images, or other reproductions, or an enlargement or reduction of it has the same effect and weight as evidence as would a certified or exemplified copy of the original. RECOMMENDATION: We recommend that the City keep all bids on file. City of Lino Lakes, Minnesota Legal Compliance Report, Page 7 Further, for the items not tested, based on our audit and the procedures referred to above, nothing came to our attention to indicate that the City of Lino Lakes, Minnesota had not complied with such legal provisions. This report is intended solely for the use of the City of Lino Lakes, Minnesota and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, TAUTGES, REDPATH & CO., LTD. Certified Public Accountants March 5, 1993 M E M O R A N D U M TO: Randy Schumacher, City Administrator FROM: Mary M. Vaske, Finance Director DATE: April 26, 1993 RE: 1992 Year end audit The audit for 1992 has been completed. The final figures show an increase in fund balance for many of the funds. Many adjustments were done during the year to "clean up" accounts. Following are the main highlights of the City finances. 1. The General Fund balance increased by $142,000. This increase was directly related to a "boom" year in building. Expenditures came in under, mostly due to the lack of time to sealcoat the streets. The fund balance has grown from $131,000 in 1983 to $1,407,000 in 1992. This is a 974% increase in nine years. Our tax collection rate is at 98 %, which is what most cities strive for in questionable economic times. 2. The City's combined fund balance for the four current T.I.F. districts is $925,000. This is an increase of $368,000 from 1991. These dollars are available for any projects that meet the T.I.F. requirements for construction. 3. The special assessment delinquent balance has decreased by $7,400. The delinquent balance is $119,000. In most growing communities, the delinquent balance increases, not decreases as in our case. The delinquent balance has decreased $43,000 since 1989. 4. The Area and Unit fund balance has grown from $1,981,000 to $3,293,000. Because of the strong fund balance, the City will pay off the Temporary Bonds of 1990 when they mature on August 1, 1993. Special assessments are coming in at a strong pace on new developments. In January and February 1993, we have collected $88,000 in special assessments. 5. In 1992, the City prepaid the 1984 and 1986 Improvement Bonds. Currently, the 1988 Improvement Bonds have enough cash to prepay, but the first call date is not until February 1, 1995. On August 1, 1993, the City will pay off the 1990 Temporary Bonds. On August 1, 1993, we will only have three current special assessment improvement bonds, including the 1988 bonds. 6. The Surface Water Management fund balance has grown from $23,000 in the red to $53,000 in the black. The Sealcoating fund balance increased by $88,000 to show a $91,000 fund balance. Assessments are coming in at a strong pace. Page 2 7. The City's overall cash and investments have increased $1,687,000. With the ridiculously low interest rates, it is heartening to know that we are increasing the City's assets. 8. The Finance Department has implemented procedures for the collection of delinquent contractor deposits. Monthly, a report is given to Darrell and Mary Kay who in turn inform the contractors of their delinquencies. We now have a clear accounting of each contractor escrow account. 9. The suggestions in the Management report have decreased substantially as Finance is controlling more of the audit work. If you would like anything further, please ask. 1.) General Fund balance has grown from $131,000 to $1,407,000. This is a 974% increase in 9 years. 2.) Area and Unit Fund balance has grown from $25,000 to $3,300,000. This is a 13,100% increase in 5 years. 3.) There are only three current special assessment bonds. The 1988 bond could be paid off if the call date was here. 4.) There is a combined fund balance of $910,000 in the four T.I.F. funds. 5.) The Sealcoating Fund balance has increased to $91,000 since 1991. 6.) The property tax collection rate has remained a constant at 98 %. 7.) The special assessment delinquencies have decreased $43,000 since 1989. 8.) State aids related to property taxes were $509,000 in 1987, but were $496,000 in 1992. 9.) The City will receive approximately $30,000 for Community Development Block Grants. 10.) The City's market value has increased from 165,000,000 in 1988 to 285,000,000 in 1992. 11.) Building permit valuation in 1988 was 18,100,000 compared to 36,600,000 in 1992. 12.) Number of permits issued in 1988 was 330 compared to 615 in 1992. 13.) The population in 1988 was 7,600 and the current is over 10,000.