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— CITY OF LINO LAKES, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />December 31, 2003
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<br />Note 7 METROPOLITAN COUNCIL ENVIRONMENTAL SERVICES
<br />During 1971, the Metropolitan Waste Control Commission (MWCC) was organized to provide for consolidation
<br />of the sanitary sewer collection, treatment and disposal in the seven county metropolitan area surrounding
<br />Minneapolis and St. Paul. Previously, these operations were maintained by the city governments on an
<br />individual or collective basis. The MWCC merged with the Metropolitan Council during 1994 to form
<br />Metropolitan Council Wastewater Services (MCWS) and is now called the Metropolitan Council Environmental
<br />Services (MCES). The MCES bills the City annually based upon estimated volume and budgeted costs. The
<br />City follows the accounting policy of recognizing these charges as an expense of the sewer utility operation in
<br />the year for which they are billed.
<br />Note 8 SEGMENT INFORMATION
<br />The City actively maintains two Enterprise Funds, which provide water and sanitary sewer services. Segment
<br />information for the year ended December 31, 2003 is as follows:
<br />Water Sewer Totals
<br />Utility Utility 2003 2002
<br />Operating revenue $ 1,064,326 $ 1,216,589 $ 2,280,915 $ 1,890,787
<br />Depreciation expense 304,382 342,563 646,945 645,961
<br />Operating income (loss) 254,537 170,419 424,956 (10,991)
<br />Capital asset additions 947,774 1,758,487 2,706,261 132,391
<br />Net income (loss) 1,359,127 1,948,462 3,307,589 156,058
<br />Operating transfers in 301,355 301,355 304,075
<br />Net Capital Assets 13,198,425 15,341 648 28,540,073 26,480,755
<br />Net working capital 833,100 2,503,209 3,336,309 2,336,238
<br />Total assets 14,586,115 17,863,721 32,449,836 29,394,747
<br />Bonds payable 2,970,000 - 2,970,000 3,220,000
<br />Total equity 11,487,807 17,828,512 29,316,319 26,008,730
<br />Note 9 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY
<br />Deficit Fund Balances
<br />The City has deficit fund balances at December 31, 2003 as follows:
<br />Fund Balance
<br />Deficit
<br />Dedicated Parks $ (699,225)
<br />Municipal State Aid (391,389)
<br />1997 Construction (698,540)
<br />1998 Construction (2,662,115)
<br />Town Center Project (1,081,320)
<br />Tax Increment Financing 1 -8 (13,060)
<br />Tax Increment Financing 1 -10 (6,120)
<br />Tax Increment Financing 1 -11 (1,612)
<br />The City intends to fund these deficits through future tax levies, special assessment levies, tax increments,
<br />transfers from other funds, and various other sources.
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