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HomeMy WebLinkAbout06/06/2011 Council PacketWORK SESSION AGENDA CITY OF LINO LAKES Monday, June 6, 2011 CITY COUNCIL WORK SESSION Community Room (not televised) 5:30 P.M. 1. 2010 Annual Audit Report - LarsonAllen 2. Review of Strategic Planning Meetings (Dave Unmacht) 3. American Legion Parking 4. On- Street Parking Regulations 5. Engineering RFP's (moved to end of agenda) 6. LMCIT's Liability /Property /Casualty Insurance Program 7. Legacy Act Grants 8. Local Surface Water Management Plan proposal 9. Weekly Progress Report Regular Council Agenda Adjourn WS -1 WORK SESSION MEMORANDUM STAFF ORIGINATOR Al Rolek MEETING DATE June 6, 2011 TOPIC 2010 Audit Report BACKGROUND` Brady Hoffman and Craig Poppenhagen of LarsonAllen, LLP will be in attendance at the meeting to present the 2010 Annual Financial Report and provide an overview of the City's financial statements, present the auditor's management analysis and answer any questions you may have with regard to the financial condition of the City. The 2010 annual audit was undertaken by the City's auditors, LarsonAllen, LLP, earlier this year, with field work being completed in the first week of April. The auditors review all financial transactions and the financial reports of the City over the previous year for their fairness in presentation and for full disclosure of all material aspects of the City's financial condition. This review is conducted in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in U.S. Government Auditing Standards, issued by the Comptroller General of the United States. The auditors concluded that the City's financial statements for 2010 presented fairly, in all material respects, the financial position of the City as of December 31, 2010. The auditors also issue their reports on the City's legal compliance with certain laws, regulations, contracts, etc., our internal control structure, and management issues. It should be noted that the City has received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of the United States and Canada for its 2009 Comprehensive Annual Financial Report. We believe that the report issued for 2010 continues to uphold the standards of reporting excellence that this prestigious award represents. The presentation at the work session will be comprehensive and is intended to provide the opportunity for council members to ask any questions or make comments about the audit report and the state of city finances. Mr. Hoffman and Mr. Poppenhagen will also give an abbreviated presentation at the regular City Council meeting on June 13, 2011, and the staff recommends that the City Council formally, by motion, accept the 2010 Annual Audit Report at that time. • • • • 0 7 > CD C �+ C a a? CD Q X c 0 c iii 2 c m. 0 0 cn CD 0 CO • • Tuawe6euew woJi uo!TeJed000 lln4 paniaoeJ ui 4o uoilenlen - I W. 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"We need a realistic road map for the future." "How does the 'no new taxes' position impact the Council's vision ?" "The work we do in these sessions is only a beginning." "Find the right balance between taxes and services." ************************************************************* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ** 1. Preserving the City's Distinctive Character — the potential for this city is unlimited; we have to be willing to move forward or our time may pass us by. • Quality of life • Public safety • Neighborhoods • Parks and natural resources (regional park) • Rural feel • Community Center (City Hall) • City employees • Land for development 11. Addressing the City's Challenges — we need to factor into our future plans steps to address our community's highest priorities. • Identity crisis (branding) • Mandates June 2011 1 • Intergovernmental collaborations • Service demands — finding the right balance between taxes and services • Address duplication of services • Traditional delivery systems and methods of doing business • Infrastructure • Financial resources • Charter Commission • Traffic (getting around the city) III. Strategies These five strategies were identified in the discussion as the highest priorities of the City. They are reflected in this draft for further review and consideration. Ultimately, they will serve as the foundation for future goals and action plans of the City. Implementation of each, over time, will ensure a lasting commitment to balancing financial resources with the City Council's strategic direction. A. Operational Results: Creative and innovative solutions B. Municipal Infrastructure: Efficient investments for long term C. Community Facilities: Pride and preservation D. Community Development: Maximize resources, strengths and opportunities E. Financial Health: Sustainable and reliable financial plan IV. Moving Forward The City Council is very interested in moving forward with the results achieved from the work sessions. Once the work plan is approved by the City Council, in order to monitor and retain momentum on the strategies and goals, these ideas were identified at the meeting. In the near future each will require further discussion and elaboration: • Create measurable action steps • Assign responsible parties to track and monitor • Be able to check things off a list • Have long term goals and short term challenges (maybe on a chart); add to weekly progress report /special council sessions • Report format that allows ongoing discussion and supports dialogue, updates and changes in the future • Schedule work session topics for each strategy • Communicate results to the staff and citizens June 2011 2 Strategy I Operational Results: Creative and innovative solutions Characteristics which define this strategy include: • Volunteerism (increase use of) • Model of engineering services (what is best way to provide) • Organizational review of police department (New Chief's assessment) • Operational efficiencies • Use of technology (striving for additional operational efficiencies) • Records retention (need a plan) • Improve relationship with Charter Commission (change strategy) • Labor - management relationships (union contracts) • Intergovernmental relations — with schools, county • City Administrator's Organizational Assessment Goals o Develop a working relationship with the Charter Commission o Review possible intergovernmental partnerships, a.k.a. sharing legal services o Prepare a police department assessment and report back to Council in November 2011 o Utilize digital archiving to reduce paper storage o Apply for state grant and create a marketing strategy for implementing a volunteer program for all City departments o Streamline complaint process by implementing a web -based tracking system June 2011 3 Strategy 11 Municipal Infrastructure: Efficient investments for long term Characteristics which define this strategy include: • Pavement management program • Funding the street reconstruction program • Look at the assessment process • How to "attack" roads • Road design (safety enhancements) • • • Goals o Develop a road reconstruction financing plan 0 0 0 0 0 June 2011 4 Strategy III Community Facilities: Pride and preservation Characteristics which define this strategy include: • Improvements to Public Works facility • Consider an capital improvement fund for facilities • Partnership with Anoka County on salt storage • Fire department facility needs maintenance • • • Goals o Take the next steps in 2011 to partner with Anoka County on salt storage facility o Find a new tenant for west wing of city hall currently occupied by ECFE o Develop a maintenance schedule for all municipal buildings o Generate a schematic plan for the ECFE space at city hall 0 June 2011 5 Strategy IV Community Development: Maximize resources, strengths and opportunities Characteristics which define this strategy include: • Marketing for business growth • Change perception of city hall • Consider a business /tax incentive policy • Focus on bringing in new businesses • • • Goals o Define what type of businesses the City wants o Conduct market studies to match goals with market demographics o Establish a business retention program 0 0 0 June 2011 6 Strategy V Financial Health: Sustainable and reliable financial plan Characteristics which define this strategy include: • Seek grant dollars • Communicate with citizens on property tax bill distribution • Funding for Legacy at Woods Edge development • Finding new sustainable sources of revenue • • Goals o Expand property tax base (see Strategy #4) 0 0 0 0 0 June 2011 WS — Item 3 WORK SESSION STAFF REPORT Work Session Item 3 Date: Council Work Session, June 6, 2011 To: City Council From: Michael Grochala Re: American Legion Parking Background The American Legion has approached the city council regarding the possibility of leasing city owned property for parking. The City Council discussed this issue on May 2, 2011 and directed staff to evaluate combining the Legion and Fire Department parking lots. Analysis City staff prepared two options for parking expansions between the two existing parking lots. Option 1 expands the legion parking with the landscape /green area between the two parking lots and creates a 45 degree angle parking lot with 10 additional spaces. The proposal would require the transfer of land to the American Legion as well as reconstruction of the majority of the existing parking lot and stormwater conveyance system. Option 2 combines the two existing parking facilities but only increases the number of available stalls by two. Given the potential costs and the minimal increase in parking spaces neither option appears viable. Council Direction Staff is requesting council direction regarding the following: 1. Does the Council want to allow public land to be used for private purposes? 2. Does the Council want to consider lease or sale of public property to the American Legion? Attachments 1. Legion/Fire Department parking options 1 NV-la ` IIIS N V Id 3JJS 2 1 71 13 ' E 2 n■ r- 41 • WS — Item 4 WORK SESSION STAFF REPORT Work Session Item 4 Date: Council Work Session, June 6, 2011 To: City Council From: Michael Grochala Re: On- Street Parking Regulations Background Following receipt of a resident complaint, staff provided the council with an overview of the City's existing on- street parking requirements at the May 2, 2011 work session. Following discussion, the council directed staff to review ordinance requirements to restrict truck and equipment parking on public streets. Analysis Existing Requirements Section 802 of the City Code establishes requirements for on- street parking. The City's winter parking restrictions, found in Section 802.06 of the code, are the only requirements that limit parking on city streets. These requirements are only applicable from November to April and limit on- street parking between the hours of 2:00 a.m. and 6:00 a.m. The City Zoning Ordinance regulates the parking of vehicles on rural or residential property. The ordinance prohibits parking vehicles exceeding 11,075 pounds on a residential property unless an administrative permit has been issued complying with certain conditions. No requirements are established specifically for construction vehicles. Nor do the zoning requirements regulate on- street parking. The Zoning Ordinance does require that all personal property in a residential zoning district be stored within a building or fully screened so as not to be visible from adjoining properties and public streets with exceptions. Construction equipment, not being currently used on the premises, must be kept indoors or be screened from view. Proposed Amendments Staff has drafted a proposed amendment to Section 802 of the City Code relating to on- street parking requirements. The proposed amendment would prohibit parking of trucks exceeding 11,075 pounds licensed gross vehicle weight (weight of vehicle plus carrying capacity), trailers and similar sized vehicles including recreational vehicles, and boats on public streets. The 1 ordinance is not limited to residential districts but rather applies uniformly across the city. The ordinance does allow for vehicles of this type to park for a two hour maximum if actively loading, unloading or performing a service. The gross vehicle weight rating (11,075 pounds) is consistent with our current zoning ordinance requirements regarding off - street parking. The use of this specific threshold dates back to 1982 zoning ordinance revision. As an example the gross vehicle weight rating for a single rear wheel Ford F -350 can approach 11,500 pounds. A dual wheel version of the same truck begins at 12,600. The council may wish, for the purposes of this ordinance, to adjust the figure to 12,000 pounds to make a clear distinction between single and dual rear wheel trucks. On- street parking restrictions in other communities used gross vehicle weight thresholds that varied from 5,000 to 12,000 pounds. Another area for council consideration is the proposed prohibition of on- street parking for recreational equipment, motor homes and boats. Due to the similarities between these types of vehicles, in terms of size, with other trucks and trailers they were incorporated into the ordinance prohibitions. The council may find that recreational vehicles are more in keeping with the residential character of the area and not subject to the prohibitions. Optional language has been included in the draft ordinance for council consideration. Council Direction 1. Does the Council want to consider establishment of on- street parking restrictions? Attachments 1. Draft On- street Parking Ordinance Amendment 2 ORDINANCE DRAFT — TRUCK AND EQUIPMENT PARKING 802.07 Truck and Equipment Parking (1) Definitions. For the purposes of this section the following definitions shall apply unless the context clearly indicates or requires a different meaning. a) Bus. "Bus" means (1) every motor vehicle designed for carrying more than 15 passengers including the driver and used for transporting persons. b) Manufactured home. "Manufactured home" means a structure, transportable in one or more sections, which in the traveling mode, is eight body feet or more in width or 40 body feet or more in length, or, when erected on site, is 320 or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air conditioning, and electrical systems contained therein. c) Park Trailer. "Park trailer" means a trailer that: (1) exceeds 8 -1/2 feet in width in travel mode but is no larger than 400 square feet when the collapsible components are fully extended or at maximum horizontal width; and (2) is used as temporary living quarters. d) Passenger automobile. (1) "Passenger automobile" means any motor vehicle designed and used for carrying not more than 15 individuals, including the driver. (2) "Passenger automobile" does not include motorcycles, motor scooters, buses, school buses, or commuter vans. Except as provided in paragraph (3), clause (a), a vehicle with a gross vehicle weight rating of 9,000 to 13,000 pounds that is a pickup truck or a van is not a passenger automobile. (3) "Passenger automobile" includes, but is not limited to a vehicle that is: (a) a pickup truck or a van, (b) not used in furtherance of a commercial enterprise, and (c) not subject to state or federal regulation as a commercial motor vehicle. e) Recreational vehicle. (1) "Recreational vehicle" means travel trailers including those that telescope or fold down, chassis - mounted campers, motor homes, tent trailers, and converted buses that provide temporary human living quarters. (2) "Recreational vehicle" is a vehicle that: (a) is not used as the residence of the owner or occupant; (b) is used while engaged in recreational or vacation activities; and (c) is either self - propelled or towed on the highways incidental to the recreational or vacation activities. f) Semitrailer. "Semitrailer" means a vehicle of the trailer type so designed and used in conjunction with a truck- tractor that a considerable part of its own weight or that of its load rests upon and is carried by the truck - tractor and shall include a trailer drawn by a truck- tractor semitrailer combination. g) Special mobile equipment. "Special mobile equipment" means every vehicle not designed or used for the transportation of persons or property and only incidentally operated or moved over a highway. Special mobile equipment includes, but is not limited to: ditch - digging apparatuses, pump hoists and other water well - drilling equipment registered, other road construction or road maintenance machinery, aggregate processing and conveying equipment, truck - mounted log loaders, and self - propelled cranes. h) Tractor. "Tractor" means any motor vehicle designed or used for drawing other vehicles but having no provision for carrying loads independently. i) Trailer. "Trailer" means any vehicle designed for carrying property or passengers on its own structure and for being drawn by a motor vehicle but shall not include a trailer drawn by a truck- tractor semitrailer combination, or an auxiliary axle on a motor vehicle which carries a portion of the weight of the motor vehicle to which it is attached. j) Truck. "Truck" means any motor vehicle designed and used for carrying things other than passengers. k) Truck- tractor. "Truck- tractor" means: a motor vehicle designed and used primarily for drawing other vehicles and not constructed to carry a load other than a part of the weight of the vehicle and load drawn. (2) It shall be unlawful for any person to park, or permit to be parked, on any public street a truck in excess of 11,075 pounds licensed gross vehicle weight, a truck tractor, semitrailer, bus, manufactured home, park trailer, recreational vehicles, special mobile equipment, trailer, (3) This shall not prohibit vehicles, as described in subsection (2) of this section, from short term parking (two hours or less), actively loading, unloading or performing a service. (4) No auxiliary motors or engines on any vehicle shall be allowed to operate except when actively loading, unloading or performing a service. (5) Recreational vehicles as defined herein, boats and boat trailers are exempt from the provisions of Section 802.07. (2) (OPTIONAL) WS — Item 5 WORK SESSION STAFF REPORT Work Session Item 5 Date: Council Work Session, June 6, 2011 To: City Council From: Michael Grochala Re: Engineering RFP's Background Interviews for the three engineering firm finalists, SEH, TKDA, and WSB were held on April 18, 2011. Following discussion the council requested a more direct comparison between the fees included in the respective proposals. Accordingly each firm was presented with a supplemental information request. The request included a detailed list of tasks, general hours worked based on past experience, and the minimum position requirements expected to complete the assigned tasks. Each firm was asked to list the personnel assigned to perform these tasks and the hourly rate charged for each of the personnel assigned. The responses received from each firm were provided to the City Council at the May 23, 2011 work session. Staff was directed to place discussion of the proposals on the June 6, 2011 work session. Analysis Each of the three finalists are well qualified to serve as City Engineer for Lino Lakes. Each of the firms provide a wide array of services that can meet the challenging day to day needs of the community. The firms have provided the city with proposed rates for performing City Engineering services. Two firms proposed standard hourly rates for services and one provided a proposed retainer fee. Based on standard hourly rates presented in the supplemental questionnaire the firms are very competitive from a cost standpoint. However, the proposed retainer system provided a substantially lower fixed cost for services. The council should note that, as pointed out in the supplemental proposals, changes in personnel, shifting of work to lower pay scales and other efficiencies can provide additional value to the city. Many of the ideas are valid approaches that will need to be reviewed regardless of the selected firm. Council Direction Staff is requesting council direction to place selection of City Engineering Services on the June 13, 2011 agenda. 1 uU Ut -u ahS NVId JJ iS • WS — Item 7 WORK SESSION STAFF REPORT Work Session Item 7 Date: June 6, 2011 To: Mayor and City Council From: Mary Alice Divine Re: Legacy Act Background Council requested information regarding accessing the Legacy Act funds. The Legacy Act was a sales tax increase approved by the voters in 2008 dedicated to 25 years of funding for projects that protect, enhance and restore wetlands, prairies, forest, and fish, game and wildlife habitat; preserve arts and cultural heritage; support parks and trails; and restore lakes, rivers, streams and groundwater. The revenue collected from the sales tax is approximately $200 million per year. There are four separate Legacy Act funds. Approximately 14% is dedicated to parks and trails, 20% to arts /cultural heritage, 33% to outdoor heritage, and 33% to clean water. The funds are allocated in the following way: 40% goes to statewide programs designated by agencies such as the DNR and Metropolitan Council; 26% is designated by the state legislature (with 15% going to greater Minnesota and 11% to the metro area); and 33% through a competitive grant program. A fifth fund, the Environment Natural Resources and Trust Fund, was established by voter approval in 1988 and is funded through the Minnesota Lottery. This fund is also for protection, conservation, preservation, and enhancement of the state's air, water, land, fish, wildlife, and other natural resources. The following describes the purpose, eligibility requirements and eligible applicants for the Legacy Act funds: Parks and Trails Fund Program purpose: To assist cities, counties, townships and legislatively designated regional parks and trails taxing authorities in the acquisition, development, restoration and maintenance of regional or statewide significant park facilities. In the Seven County Twin Cities Metropolitan Area, the proposed improvement must be consistent with the Metropolitan Council's Regional Parks Policy Plan or go through a proscribed 1 amendment process. In the metro area, only the 10 authorized implementing agencies (7 counties plus Minneapolis, St. Paul, and Bloomington) can sponsor these projects. The City of Lino Lakes is not an eligible applicant. In Lino Lakes, the only park designated to have regional significance is the Rice Creek Chain of Lakes Regional Park Reserve. In addition, a portion of the Rice Creek North Regional Trail is in Lino Lakes. Lino Lakes has benefited indirectly through Anoka County's $1,346,000 in Legacy Act grants for part of the extension of the Rice Creek North Regional Trail, and improvements to the Rice Creek Chain of Lakes Regional Park campgrounds. Parks of regional significance in the seven county metro area must meet these criteria for Legacy Act funding: • The park should provide a natural setting and offer outdoor recreation facilities and activities that are primarily natural resource based. Examples include camping, picnicking, hiking, swimming, boating, canoeing, fishing, and nature study. A related measure is the range of these activities accommodated within the park (e.g., a park with a beach, campground and boat launch facilities is more likely to attract a regional clientele than a park with only one of these facilities). • Evidence that the park serves at least a regional clientele (multiple communities). Other related factors may include evidence that the facility currently or potentially may draw tourists and generate economic impact from outside the local area. Eligible recreation facilities: • Boat/canoe access • Campgrounds • Fishing piers • Ice /in -line skating rinks • Nature study • Picnic Shelters • Playgrounds • Swimming Beaches or outdoor pools • Non - motorized trails Eligible recreation support facilities: The following facilities are also eligible for funding as part of a grant application that contains at least one facility from the eligible recreation facilities list above: • Change Houses, Restrooms, Shower Buildings and Warming Houses • Fencing, Lighting and Signs • Landscaping and Natural Area Restoration • Park Roads and Parking Areas (may not exceed 40% of the total project cost) • Permanent Benches, Seats, Drinking Fountains, Grills, Picnic Tables, • Trash Receptacles and Fire Pits • Walkways On a larger, statewide basis, applications must also be within the guidelines of Minnesota's 2008 -2012 State Comprehensive Outdoor Recreation Plan (SCORP). This plan establishes outdoor recreation priorities for Minnesota. The major priorities are 2 acquiring, protecting and restoring Minnesota's natural resource base that will provide public outdoor recreation opportunities; redevelopment and renovation of current infrastructure; and promoting outdoor nature based recreation and nature based education initiatives. Applicants must be able to fund 25% of the total project costs in cash. Projects must be completed within 24 months of the award. Clean Water Fund These funds may only be spent to protect, enhance, and restore water quality in lakes, rivers, and streams and to protect groundwater from degradation. At least five percent of the clean water fund must be spent to protect drinking water. Below are the Competitive Grant Funding categories and the governmental units that are eligible to apply for a Clean Water Fund grant. Cities are eligible for seven of these grants. Agency Fund Governmental Units Eligible for Funding Required Local Match BWSR Runoff Reduction Grants Watershed Districts and WMOs 25% BWSR Clean Water Assistance Grants SWCDs, Watershed Districts, WMOs and Counties 25% BWSR Shoreland Improvement Grants SWCDs, Watershed Districts, WMOs, Counties, Cities, and JPBs of these organizations 25% BWSR Conservation Drainage Advancement Grants SWCDs, WDs, WMOs, Counties, and JPBs of these organizations 25% BWSR Restoration Technical Assistance Grants SWCDs, WDs, WMOs, Counties, Cities & JPBs of these organizations 25% MPCA SSTS Inventory Grants Counties 50% BWSR SSTS Program Enhancement Grants Counties 25% MDA Clean Water Ag BMP Eligible AgBMP Loan authorities Not required MPCA Surface Water Assessment Grants WDs, counties, Cities MPCA Nonpoint Source Pollution WDs, WMOs. Counties, Cities & JPBs 50% Total Maximum Daily Load (TMDL) Grants Cities, WDs 50% Phosphorous Reduction Grants (Wastewater Treatment Plants) Cities 50% MPFA Small Community Wastewater Treatment Program Cities, counties, sanitary districts on PCA's project priority list Dependent on city median income if grant or loan Key to Acronyms: 3 BWSR (Board of Soil & Water Resources) WMO (Watershed Management Organizations) SWCD (Soil & Water Conservation Districts) JPB (Joint Powers Board) WD (Watershed Districts) AgBMP (Agricultural Best Management Practices) Arts /Cultural Heritage Fund This fund administered in part by the Minnesota Historical Society and in part by the Minnesota State Arts Board and is dedicated to supporting arts, arts education and arts access, and preserving Minnesota's history and cultural heritage. The legislature directed that the funding be used for projects that "preserve and enhance access to Minnesota's history and its cultural and historical resources." Historical Society eligible projects include acquisition, restoration and preservation of historic buildings, providing access to the arts, and programs related to heritage tourism and preservation planning. The grants fall into six categories: • Statewide Historical and Cultural Grants • Programs conducted by the Minnesota Historical Society • Statewide History Partnership Projects • Exhibit on Minnesota's regions and cultures • Statewide Survey of Historical and Archaeological Sites • Digital History Library Local, county, regional or historical and cultural organizations are eligible to apply for grants. All funds allocated for the 2010 -2011 biennium have been awarded. The Legislature also appropriated a portion of the Arts and Cultural Heritage Fund to the Minnesota State Arts Board and Minnesota's eleven regional arts councils. These funds are intended to make high - quality arts experiences more accessible and available to Minnesotans throughout the state. Artists, arts organizations, community groups, human service organizations, public agencies, educational institutions, and others are eligible. Outdoor Heritage Fund: The Minnesota Department of Natural Resources (DNR) manages this program to provide competitive matching grants of up to $400,000 to local, regional, state, and national non - profit organizations, including government entities. The grants must restore, protect or enhance prairies, wetlands, forests, or habitat for fish, game or wildlife in Minnesota. Facility development or improvement projects such as parking lots, roads, water access sites, and hunter blinds are generally not considered habitat projects and will only be permitted on a very limited basis if necessary to accomplish a primary wildlife habitat restoration or enhancement project, or as part of the initial development of newly acquired lands. On -going maintenance is not eligible. 4 A 10% match is required for all grants under $100,000, with up to one -third allowable from in -kind resources. Grants over $100,000 require a match of at least 15 %, with up to one -third allowable from in -kind resources. Restoration and enhancement projects will only be funded on lands permanently protected by conservation easement or public ownership or in waters designated as public waters. Land acquired with this fund must be open to hunting and fishing. Projects receiving grants do not require regional significance. It has a one -year funding cycle with the next deadline July 15, 2011. Requested Council Direction Staff requests direction from the council on how it would like to proceed with this information. Attachment(s) None 5 WS — Item 8 WORK SESSION STAFF REPORT Work Session Item 8 Date: Council Work Session, June 6, 2011 To: City Council From: Michael Grochala Re: Local Water Management Plan Background The Rice Creek Watershed District adopted its 2010 Watershed Management Plan (WMP) on June 9, 2010. In accordance with state law, the city must adopt a Local Surface Water Management Plan within two years of the board's approval. Accordingly the city's plan is required to be completed by June 9, 2012. In January of 2011 staff brought forward a consultant proposal to prepare the plan. Due to the proposed cost of the plan update the council took no action on the proposal. The council directed staff to prepare an overview of the surface water management requirements and programs that currently effect the city. At the May 2, 2011 council work session staff provided an overview of the major surface water management programs which effect the city and are incorporated into the local water management plan. Council directed staff to work with EOR to modify the scope and reduce the cost for the plan preparation. Analysis As directed staff has worked with EOR, Inc. to reduce the proposed Local Water Management Plan cost from approximately $90,000 in the January proposal to a revised estimate of $62,000. This was accomplished through both modifing personnel assignments and more significantly modifying the scope of the document. The content of Local Surface Water Management plans is prescribed by Minnesota Statutes and must be completed in conformance with the requirements of the local water management organizations (Rice Creek and VLAWMO). However, the local unit of government does have the ability to expand upon the minimum requirements. The Lino Lakes Resource Management Plan completed by the RCWD and City established 15 Resource Management Units ( RMU's) that are essentially subwatershed areas within the city. The initial scope of the water management plan included detailed goal, policy and planning for each of the specific RMU's. The revised scope includes only the Marshan, Reshanau, and 1 Clearwater Creek Resource Management Units. These areas were selected because they include the City's projected growth areas over the next 10 years. These three areas also feed into the City's main drainage systems; 1) Ditch 10- 22 -32, 2) Ditch 25, and 3) Clearwater Creek. Elimination of the RMU based planning, goal, and policy development could further reduce the cost of the plan development if so desired. Staff also had the opportunity to discuss preparation cost with other surface water professionals. Plan preparation can run anywhere from $20,000 to $300,000 depending on the scope and water modeling requirements. Typical costs can range from $40,000 to $60,000 dependent on the scope of work proposed. Council Direction Council direction to place EOR, Inc., Local Surface Water Management Plan proposal on the June 13, 2011 council agenda for consideration. Attachments 1. RCWD Notice to Prepare Local Water Management Plan 2 RICE CREED( WATERSHED DISTRICT February 23, 2011 4325 Pheasant Ridge Dr. NE #611 • Blaine, MN 55449 -4539 Phone: 763 - 398 -3070 • Fax: 763 -398 -3088 wwwsicecreek.org To: RCWD member municipalities, including: Arden Hills, Birchwood Village, Blaine, Centerville, Circle Pines, Columbia Heights, Dellwood, Falcon Heights, Forest Lake, Fridley, Grant, Hugo, Lauderdale, Lexington, Lino Lakes, Mahtomedi, May Township, Mounds View, New Brighton, Roseville, Scandia, Shoreview, Spring Lake Park, Saint Anthony, White Bear Lake Re: Municipal Local Surface Water Management Plan Update Required Dear Colleagues, The Rice Creek Watershed District (RCWD) would like to issue a reminder to its member municipalities of an upcoming statutory deadline for updating Local Surface Water Management Plans ( LSWMP). The RCWD adopted its 2010 Watershed Management Plan (WMP) on June 9, 2010 and copies of the plan were distributed to our member municipalities on June 14, 2010. • Chapter 8.3.1 of RCWD's WMP states that "the Local Plan must be submitted timely to the RCWD for approval so that the Local Plan can be officially adopted within two years of the adoption of this WMP." • Minnesota Rule 8410.0160 states that "each local plan shall be adopted within two years of the board's approval of the last organization plan that affects local units of government." • Minnesota Statute 103B.235 states that "after the watershed plan is approved and adopted, or amended, pursuant to section 103B.231, the local government units having land use planning and regulatory responsibility for territory within the watershed shall prepare or cause to be prepared a local water management plan, capital improvement program, and official controls as necessary to bring local water management into conformance with the watershed plan within the time period prescribed in the implementation program of the watershed plan and, as necessary, shall prepare or cause to be prepared amendments to the local comprehensive plan." All of this means that your city's LSWMP must be approved by the RCWD Board of Managers no later than June 9, 2012. We will be providing additional reminders as the deadline draws nearer. If you are aware of any circumstances that may render this date unattainable, please contact our office to discuss scheduling. BOARD OF Barbara A. Haake Rick A. Mastell Harley M. Ogata Patricia L. Preiner John J. Waller MANAGERS Ramsey County Anoka County Ramsey County Anoka County Washington County Chapter 8.3.1 of RCWD's WMP, together with MN Rule 8410.0170, outlines the content requirements for municipal LSWMPs. All regulations referenced within this letter are attached for your quick reference. If there are any questions about LSWMP update requirements, feel free to contact our office. Sincerely, Kyle Axtell Water Resource Specialist Direct: (763) 398 -3072 Email: kaxtell @ricecreek.org Cc: William G. Moore — Metropolitan Council Terry Johnson — Anoka County Richard Johnson — Hennepin County Julie Kleinschmidt — Ramsey County James Schug — Washington County Enc: RCWD WMP, Chapter 8.3.1 Minnesota Statute 103B.235 Minnesota Rule 8410.0160 Minnesota Rule 8410.0170 Rice Creek Watershed District Watershed Management Plan Chapter 8. Watershed Plan Administration the notice of the public meeting on the District website and mail the notices to each affected city, township and county. 3. If the proposed amendment is a minor amendment to the RCWD capital improvement program and the project proposes county bonding as the funding method, the County must approve the minor amendment (see the individual county bonding procedures). 4. BWSR must either agree that the amendment is minor or fail to act within 45 days of receipt of the amendment. 8.2 Administration of Legal Boundary The current jurisdictional boundary of the RCWD is shown on Figure 1 -1. Procedures for adjusting the legal boundary can be found in MS 103D.251, 1038.215 and 103B.225. A current legal description of District boundary can be found on the RCWD website. In addition, the District uses geospatial data established with Geographic Information System (GIS) to describe the boundary. The GIS boundary is used for informational purposes only, and in the event of a discrepancy, the legal description holds as valid. The RCWD reviews parcel data on a regular basis for the purpose of identifying changes to existing properties along its legal boundary and then works with the adjoining WMO's to initiate needed changes to the legal boundary. At times projects are proposed or issues occur outside of the legal boundary of the RCWD, but are inside of the hydrologic drainage area. These projects are approached on a case by case basis. The District may consider updating the legal boundary to incorporate these areas. 8.3 Local Government Units 8.3.1 Content Requirements for Local Water Management Plans Upon completion and adoption of the WMP, municipalities which have land use planning and regulatory responsibilities must amend an existing Local Water Management Plan (Local Plan) to conform to the requirements of the WMP or prepare a new Local Plan which is in conformance with the WMP. The Local Plan must include all the requirements within this WMP and the legal requirements of Rule 8410 and MS 103B.235. Local plans should address the expanded list of requirements of the "2030 Regional Development Framework" by the Metropolitan Council. The Local Plan must be submitted timely to the RCWD for approval so that the Local Plan can be officially adopted within two years of the adoption of this WMP. Member cities are encouraged to engage in early dialogue and coordination with the RCWD during the development their plan, and to submit a draft Local Plan to the RCWD six months prior to the date formal adoption is required. The RCWD recognizes that MS 103B and MR 8410 were written with the intent that each community would upon completion of the last MS 103B plan affecting them prepare and adopt a Local Plan, which includes the regulatory requirements set out within the WMO1 plans. The Local Plan requirements set forth in MR 8410 provide a level of inventory, assessment, hydrologic and hydraulic modeling, water resource objectives and policies, and adoption of local ordinances /regulatory controls necessary to comply with the goals, objectives, and policies of each WMO. In general this has not been the case and most local governments have not sought the delegation of permitting being exercised by WMO's. Within the RCWD there is only one out of the 27 cities which have assumed, through formal agreement, permitting and enforcement of local official controls for stomiwater, floodplains, and wetlands. With this in mind the following RCWD requirements for local plan Includes both Water Management Organizations and Watershed Districts. RCWD Account No. 70-08-4500 HEI Project No. 5555-035.01 January 4, 2010 8-4 Rice Creek Watershed District Watershed Management Plan Chapter 8. Watershed Plan Administration content are intended to supplement Minnesota laws and rules relative to Local Plan content. The RCWD has set two levels of requirements for the content of Local Plans: • Level 1 — The level of detail is designed for those communities that do not wish to assume permitting authority from the RCWD. • Level 2 — Requires additional information and detail for some of the Local Plan requirements for communities that choose to assume all or some of the permitting authority from the RCWD. The RCWD has considerable technical resources available to address water and resource issues. The RCWD encourages communities to use as many of these resources, including monitoring data, models and modeling results, management studies, GIS information and similar information, to meet these requirements. Although RCWD has completed hydrologic, hydraulic, and water quality modeling throughout the District, communities may need to perform additional modeling in areas where they intend to assume local regulatory authority, to show compliance with the content of the WMP. The general standards for the Local Plan which the requirements of MS 103B.235 Subd. 2 are as follows: 1. Describe the existing and proposed physical environment and and use. At a minimum this must include land use /zoning maps for both present and future conditions, and a land cover /classification map such as the Minnesota Land Cover Classification System (MLCCS). Define drainage areas and the volumes, rates, and paths of stormwater runoff. Municipalities, for both Levels 1 and 2, should also include a map of the stormwater system that shows stormwater ponds, streams, lakes and wetlands; structural pollution control devices (e.g., grit chambers, separators); pipes and pipe sizes, ditches and any other conveyances; and outfalls and all other points of discharge from the system. An inspection and maintenance system schedule should be included. The appropriate portion of the MS4 SWPPP prepared in accordance with Permit No. MNR040000 can be incorporated by reference to satisfy this requirement. (a) Level 1— the Local Plan does not need to include information relating to stormwater rate and volume. Evidence of a storm water master plan or similar document is sufficient. (b) Level 2 — the Local Plan must include information on existing and proposed stormwater rates and volumes based on full build out taking into account implementation of the local regulatory controls. The information should be related to those volume and rate control locations within the District and include analyses at Regional Assessment Locations. 2. Identify the methods and means to achieve Rule C, Part 5, Water Quality and Volume Control of the RCWD rules. This applies only to Level 2 communities. 3. Identify areas and elevations for stormwater storage adequate to meet Rule C, Part 6, Peak Stormwater Runoff Control of the RCWD rules. This applies only to Level 2 communities. 4. Generally discuss or identify approaches, methods, means, procedures, ordinances or plans being used to achieve compliance with RCWD rules or identify reliance on the RCWD for municipal review and compliance with stormwater management requirements. (a) Level 1 — communities must provide a specific statement that they request RCWD to continue to implement its rules and regulations and issue permits within the City/Town. RCWD Account No. 70-08 -4500 HEI Project No. 5555-035.01 January 4, 2010 8-5 Rice Creek Watershed District Watershed Management Plan Chapter 8. Watershed Plan Administration (b) Level 2 — must include the specific local ordinances and demonstrate that they are in compliance with RCWD rules or include at a minimum that the city adopts RCWD rules and regulation by reference (see Section 8.3.2). 5. Municipalities must also show that the community discharge is equal to or less than the inter - community rates established in the District Wide Modeling. If the rate is not met, then the Local Plan must include measures to reduce the rate. (a) Level 1 — must acknowledge and identify those locations where flows leave the City and are transferred downstream, with some assessment of the estimated rate assuming full build out conditions and describe measures being implemented to reduce flows if necessary. (b) Level 2 — must acknowledge and identify those locations where flows leave the City and are transferred downstream, with an assessment of how the rules applied by the City under current full build out conditions reduce flows if necessary. 6. Describe the methods that will be used to control and manage post- construction stormwater associated with development and redevelopment. The appropriate portion of the MS4 SWPPP prepared in accordance with Permit No. MNR040000 may be incorporated by reference to satisfy this requirement. 7. Identify regulated areas. These include RMP boundaries, Wetland Protection Zones, Ecological Management Corridor, and High Quality Wetlands, areas identified as high quality by the Minnesota County Biological Survey. 8. Set forth an implementation program, including a description of official controls and, as appropriate, a capital improvement program. In addition to the statutory requirements, these items should be addressed and conform to the requirements established in this Plan: 1. Identify land- locked sub - watershed units and basins and strategies to manage water volumes in those land- locked areas to minimize flooding. 2. Indentify impaired waters, and establish policies and actions to address TMDL goals. 3. Identify Key Conservation Areas in this Plan in their community, and assess the adequacy of local policies and regulatory controls in place to conserve hydrologic and ecologic values of the resources within those Areas. The plan must set forth a plan and schedule for the amendment of those policies and controls as necessary to meet performance standards established in Plans. 4. A discussion of the geologic features, groundwater sensitivity, groundwater dependent natural resource and groundwater discharge and recharge areas including the identification of potential land uses affecting groundwater. 5. Generally identify ideas / opportunities for projects and programs intended to improve resource management, which may be jointly implemented with the RCWD. 6. Describe the conformance of the municipality with NPDES requirements for MS4 permits, including TMDL and Non - degradation (if applicable) requirements. The local plan must include the Stormwater Pollution Prevent Plan (SWPPP) or a summary of its contents and incorporate the plan by reference. 7. Identify erosion and sediment control ordinances for sites less than 1 acre in size. RCWD Account No. 70-08 -4500 HEI Project No. 5555-035.01 January 4, 2010 8-6 Rice Creek Watershed District Watershed Management Plan Chapter 8. Watershed Plan Administration 8. Describe housekeeping practices and requirements such as street sweeping, snow plowing, salt and snow storage, and public land maintenance. The appropriate portion of the MS4 SWPPP prepared in accordance with Permit No. MNR040000 can be incorporated by reference to satisfy this requirement. 9. A description of the Best Management Practices employed by the City that control or reduce pollutants. The appropriate portion of the MS4 SWPPP prepared in accordance with Permit No. MNR040000 can be incorporated by reference to satisfy this requirement. 10. Demonstration of a public information and education plan consistent related to managing sediment and erosion control, runoff and water quality. The appropriate portion of the MS4 SWPPP prepared in accordance with Permit No. MNR040000 can be incorporated by reference to satisfy this requirement 11. Cities within Washington and Ramsey Counties should include a groundwater protection component consistent with the county Groundwater Management Plan or method to adopt measures. 12. Discuss conflicts between infiltration requirements and well head protection. 13. Adopt and include copies of MnDNR approved Floodplain and Shoreland ordinances where mandated by state law. 8.3.2 Regulatory Controls and Enforcement The current RCWD Rules and Permitting Program can be found on the District web site. The RCWD Board prefers to retain permitting function as it is felt that the District has the technical capability to assess wide ranging and intercommunity water management issues. If communities wish to incur the additional costs of local regulatory control, the District will relinquish permit authority only following completion of an approved Local Plan, adoption of the ordinances, and implementation of inspection and administrative procedures necessary to insure that the full regulatory standards of the District are met. At a minimum, the District will retain regulatory control for projects adjacent to and associated with the public drainage systems including the trunk systems. The District will also require that projects associated with the trunk drainage system, lake outlets, or other features which have the ability to substantially alter flow patterns within the District be submitted for review and comment. Written confirmation of the respective regulatory roles of the District and the local government unit will be sent to each municipality at the time of final plan and /or ordinance approval by the District. Execution of a Joint Powers Agreement with the RCWD is the final step in the process is for a community that wishes to assume permitting authority. The Joint Powers Agreement will define regulatory responsibilities, and will stipulate that the city issue and enforce permits consistent with their approved Local Plan. Under the Joint Powers Agreement, the RCWD and the City will adjust their permitting responsibilities to best suit the needs and abilities of each party. The RCWD will not issue permits within a local unit of government after execution of a joint powers agreement. The RCWD will retain the right to monitor the local unit of govemment's permitting activity including the use of a formal audit of the permitting program with regard to enforcement and consistency with approved Local Plans. Local govemment units assuming regulatory controls will be required to submit all projects which require a variance from RCWD standards to the District for approval. Additionally, the District will periodically field inspect development projects and conduct operational audits of the local govemment units procedures and controls to insure implementation in accordance with the plan. The District will exercise its right under MS 103B to resume regulatory authority and administration of programs if non - compliance with the approved local water management plan is demonstrated. RCWD Account No. 70-08 -4500 HEI Project No. 5555-035.01 January 4, 2010 8-7 1 MINNESOTA STATUTES 2010 103B.235 103B.235 LOCAL WATER MANAGEMENT PLANS. Subdivision 1. Requirement. (a) After the watershed plan is approved and adopted, or amended, pursuant to section 103B.231, the local government units having land use planning and regulatory responsibility for territory within the watershed shall prepare or cause to be prepared a local water management plan, capital improvement program, and official controls as necessary to bring local water management into conformance with the watershed plan within the time period prescribed in the implementation program of the watershed plan and, as necessary, shall prepare or cause to be prepared amendments to the local comprehensive plan. (b) Each town within the counties of Anoka, Carver, Dakota. Scott, and Washington authorized by general or special law to plan and regulate the use of land under sections 462.351 to 462.364 shall by resolution determine whether to prepare the local water management plan itself or to delegate all or part of the preparation of the plan to the county. (c) Towns within counties that have adopted comprehensive plans applicable to the town must use county preparation of their plan to the maximum extent possible. Subd. 2. Contents. (a) Each local plan, in the degree of detail required in the watershed plan, shall: (1) describe existing and proposed physical environment and land use; (2) define drainage areas and the volumes, rates, and paths of storm water runoff; (3) identify areas and elevations for storm water storage adequate to meet performance standards established in the watershed plan; (4) define water quality and water quality protection methods adequate to meet performance standards established in the watershed plan; (5) identify regulated areas; and (6) set forth an implementation program, including a description of official controls and, as appropriate, a capital improvement program. (b) The Board of Water and Soil Resources shall adopt rules establishing minimum local plan standards and a model environmental management ordinance for use by local government units in implementing local water plans. The standards apply to plan amendments made to conform to changes in the watershed plans that are adopted under the board rules required by section 103B.231, subdivision 6. Subd. 3. Review. After consideration but before adoption by the governing body, each local unit shall submit its water management plan to the watershed management organization for review for consistency with the watershed plan adopted pursuant to section 103B.231. If the county or counties having territory within the local unit have a state - approved and locally adopted groundwater plan, the local unit shall submit its plan to the county or counties for review. The county or counties have 45 days to review and comment on the plan. The organization shall approve or disapprove the local plan or parts of the plan. The organization shall have 60 days to complete its review; provided, however, that the watershed management organization shall, as part of its review, take into account the comments submitted to it by the Metropolitan Council pursuant to subdivision 3a. If the organization fails to complete its review within the prescribed period, the local plan shall be deemed approved unless an extension is agreed to by the local unit. Copyright © 2010 by the Office of the Revisor of Statutes, State of Minnesota. All Rights Reserved. 2 MINNESOTA STATUTES 2010 103B.235 Subd. 3a. Review by Metropolitan Council. Concurrently with its submission of its local water management plan to the watershed management organization as provided in subdivision 3, each local unit of government shall submit its water management plan to the Metropolitan Council for review and comment by the council. The council shall have 45 days to review and comment upon the local plan or parts of the plan with respect to consistency with the council's comprehensive development guide for the metropolitan area. The council's 45 -day review period shall run concurrently with the 60 -day review period by the watershed management organization provided in subdivision 3. The Metropolitan Council shall submit its comments to the watershed management organization and shall send a copy of its comments to the Local government unit. If the Metropolitan Council fails to complete its review and make comments to the watershed management organization within the 45 -day period, the watershed management organization shall complete its review as provided in subdivision 3. Subd. 4. Adoption and implementation. After approval of the local plan by the organization, the local government unit shall adopt and implement its plan within 120 days and shall amend its official controls accordingly within 180 days. Subd. 5. Amendments. To the extent and in the manner required by the organization, all amendments to local water management plans shall be submitted to the organization for review and approval in accordance with the provisions of subdivisions 3 and 3a for the review of plans. History: 1990 c 391 art 2 s 12; 1990 c 601 s 21; 1995 c 176 s 1 -3; 1995 c 184 s 11 Copyright © 2010 by the Office of the Revisor of Statutes, State of Minnesota. A11 Rights Reserved. 1 REVISOR 8410.0170 8410.0170 STRUCTURE. Subpart 1. Purpose. Each local plan must have a section entitled "Purpose" outlining the purposes of the water management programs required by Minnesota Statutes, sections 103B.205 to 103B.255. Subp. 2. Water resource management related agreements. Appropriate water resource management related agreements that have been entered into by the local community must be outlined, including joint powers agreements related to water management that the local community may be party to between itself and watershed management organizations, adjoining communities, or private parties. Available information concerning these agreements in general conformance with the content of joint powers agreements for organizations as outlined in part 8410.0030 must be included. Subp. 3. Executive summary. Each plan shall have a section entitled "Executive Summary" that generally summarizes the content of the local plan in a manner similar to that required for organization plans under part 8410.0050. Subp. 4. Land and water resource inventory. Each local plan must contain a composite land and water resource inventory containing all relevant data from organization plans affecting it consistent with the data required by part 8410.0060. Subp. 5. Establishment of policies and goals. Each local plan must state specific goals and corresponding policies related to the purpose of these plans, be consistent with the policies and goals of the organization plans within the city or township, and address the relation of the local plan to the regional, state, and federal goals and programs outlined in part 8410.0070. Subp. 6. Assessment of problems. Each plan must contain a summary assessment of existing or potential water resource related problems, including those identified in organization plans that affect the community. The problem assessment must be completed for only those areas within the corporate limits of the community and meet the same content requirements as those outlined for organization plans under part 8410.0080, subparts 1 and 2. Subp. 7. Corrective actions. Each local plan shall describe nonstructural, programmatic, and structural solutions to the problems identified in subpart 6. The mandatory actions for organization plans outlined in part 8410.0100, subparts 1 to 6, shall be considered except that actions must be limited to those that can be implemented at a local level. All corrective actions must be consistent with the organization plans having jurisdiction in the municipality or township. Subp. 8. Financial considerations. Each local plan must contain an analysis of the financial impact of implementation of the proposed regulatory controls and programs identified under subpart 7. The analysis must include, at a minimum, the following items: Copyright ©2009 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 1 REVISOR 8410.0160 8410.0160 GENERAL STRUCTURE. Each local plan must. at a minimum, meet the requirements for local plans in Minnesota Statutes. section 103B.235, except as provided by the watershed management organization plan under part 8410.0110, subpart 3. Each local plan must include sections containing a table of contents; purpose; water resource related agreements; executive summary; land and water resource inventory; establishment of goals and policies; relation of goals and policies to local, regional, state, and federal plans, goals, and programs; assessment of problems; corrective actions; financial considerations; implementation priorities; amendment procedures; implementation program; and an appendix. Each community should consider including its local plan as a chapter of its local comprehensive plan. Each local plan shall be adopted within two years of the board's approval of the last organization plan that affects local units of government. Statutory Authority: MS s 103B.101; 103B.211; 103B.231; 103B.227 History: 17 SR 146 Posted: October 13, 1997 Copyright © 2009 by the Revisor of Statutes, State of Minnesota All Rights Reserved. 2 REVISOR 8410.0170 A. the estimated cost of adoption and enforcement of local controls and standards for the Local municipality; B. the estimated annual cost of implementation of other specified programs to each local municipality; C. a discussion of local ability to fund adoption of and enforcement of local controls and standards, implementation of other specified programs, and capital improvements, including: (5) levy limit constraints; effect on other city funding needs; establishment of watershed management taxing districts; creation of stormwater utilities; and monetary impact against homes or farmsteads in affected community; D. the impact on the local municipality of local implementation of each capital improvement project component if ad valorem financing is used; and E. a summary of grant funding that would likely be available to fund water management projects and programs. Subp. 9. Implementation priorities. Each local plan must prioritize implementation components to make the best use of available local funding and prevent future water management problems from occurring to the maximum practical extent. Local plans must prioritize organization plan implementation components in line with organization priorities as outlined under part 8410.0120 only for implementation components that must be facilitated by the local municipality or township. Subp. 10. Implementation program. Each local plan must outline required implementation components that apply at a local level. These components shall be consistent with the required plan components outlined for organization plans under part 8410.0130. Official local controls must be enacted within six months of adoption of the local plan. Subp. 11. Amendment procedures. Each local plan must contain a section entitled "Amendments to Plan" containing the year the plan extends to and establishes the process by which amendments may be made. The amendment procedure shall conform with the plan amendment procedure outlined in the organization plans that affect the community. Local plan amendments must be forwarded to each organization affected by the local plan amendment for review and approval before adoption. Subp. 12. Submittal and review. After consideration and before adoption, the Local plan shall be submitted to all affected organizations for review according to Minnesota Copyright ©2009 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 3 REVISOR 8410.0170 Statutes, section 103B.235. Each local unit of government must also notify affected organizations within 30 days of adoption and implementation of the plan, including the adoption of necessary official controls. Statutory Authority: MSs 103B.101; 103B.211; 103B.231; 103B.227 History: 17 SR 146 Posted: October 13, 1997 Copyright ©2009 by the Revisor of Statutes, State of Minnesota_ All Rights Reserved. WS — Item 9 MANAGEMENT TEAM'S Weekly Progress Report June 6, 2011 Item Last Action Taken Staff Status Organizational Assessment 10/4/10 City Administrator directed to begin preparing plan for an internal organizational analysis Jeff Report is nearly complete 2030 Comprehensive Plan Amendments 5 /23 /11Council approved revised plan for submittal to Met Council Mike Following review by the Met Council, the City Council will consider final approval RFP's for Engineering Services 5/23/11 Staff presented supplemental information from the three finalists with a fee comparison Mike Included in the June 6 work session agenda Local Surface Water Management Plan 1/24/11 Council asked for a presentation & directed staff to solicit proposals for plan preparation from other firms Mike EOR, Inc. will bring the costs down in its proposal to the minimum requirements Five -Year Financial Plan 4/4/11 Staff presented a first draft of the plan Al A second draft of the plan will be prepared in conjunction with the 2012 budget Early Childhood/Family Education Center 5/2/11 Council directed staff to begin marketing the space at city hall currently occupied by the ECFE Rick Centennial ISD 12 is conducting a facility study and is likely to end its lease 7/1/12 dll uoneuosJel 1.1.0Z© 411;- r• • CPAs, Consultants & Advisors as • a a) En • Auditors' Reports • Financial Results • Other Items 2 NOTICEABLY DIFFERENT ^ ^; co . 0 co c c O L. a) -0 a _c a) 0 c O X O c O O C 0 1 c a_ a) a_ 0 O U c Co O ci O c E U 1 O 0 a). .• .. O c • 0 -� O CO ▪ c 0 O E c(1) Do a 3 E co u) 0' � O c _i_i c co c j 2 c . . . iihiff EABLY DIFFEREN 4 4 .,.„ c 404 moo nom 'iris pm O O O O O O O O O O O O O O O O O O O O O O 0 0 0 0 0 0 0 0 0 0 0 O O O O O O O O O O 0 0 0 0 0 0 0 0 0 0 0 O O LC) 0 0 LC) O O O O O co CO ti O Cfl N— Eft ft ffi 69- EA 69 CA- Ef} Ki ff) O 0 O O O N CO O O N O O N O O O N • Revenues D Expenditures EiI1E EABLY DIFFEREN CD 4E1 0 cn a) • LI- % of Annual Expenditures O o 0 0 0 0 0 d O O O O O O O O O O 0 0 0 0 0 0 0 0 0 r10100NlDI.P1 M O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O Lrl O L I O L.r1 O Ln O Ln Lrl c} M CO N N r-I r-I O Ln Lrl L!l Lt LfI Lr7 Ln IJ L(1 IJ t/} th in- to t/} in to tJ} O r-I 0 N rn 0 0 N 00 O O N O 0 N O 0 O N d i l uallduo5Jel L LOZO O N 0) c 0 O 11 E a� O U c6 0- ca o co C c LL c O 0 co Q U) � Q 0 0 z Reporting Entity 2013 — GASB 61 — Financia N O N c 0 U 0 U CO (/) 0 N CO 0 0 O 0 0 X W O AE° O E O O U 0 O 9 -- O U 0 u_ CD • • 0) - -E O 0 O c . 0 a co — Received for 2009 — Tenth consecutive year Questions and comments Thank you! Craig Popenhagen, Principal Brady Hoffman, Manager Ph. 612/397 -3087 Ph. 612/376 -4665 cpopenhagen @Iarsonallen.com bhoffman @larsonallen.com 7 NOTICEABLY DIFFERENT ^ A N i au E E 0 0 -a ca cn 0 CD CJ CITY OF LINO LAKES, MINNESOTA OTHER AUDIT REPORTS YEAR ENDED DECEMBER 31, 2010 CITY OF LINO LAKES, MINNESOTA TABLE OF CONTENTS YEAR ENDED DECEMBER 31, 2010 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 1 REPORT ON MINNESOTA LEGAL COMPLIANCE 4 OTHER REQUIRED AUDITOR COMMUNICATIONS 5 NEW ACCOUNTING AND REPORTING STANDARDS 8 Lars•nAllerj, CPAs, Consultants & Advisors www.larsonallen.com REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor and Members of the City Council City of Lino Lakes, Minnesota We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Lino Lakes, Minnesota (the City) as of and for the year ended December 31, 2010, which collectively comprise the City's basic financial statements and have issued our report thereon dated May 31, 2011. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the City's financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. NEX1A INTERNATIONAL (1) An independent member of Nexia International Honorable Mayor and Members of the City Council City of Lino Lakes Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. During the course of our audit, certain items came to our attention that we feel could be addressed by the City to more efficiently run the City's operations or enhance its internal controls. We herein submit the following suggestions to the City for their consideration. Auditor Comments: Capital Project Deficits The financial statements for the capital project funds are presented in Statements 3, 5, 13, and 14 of the 2010 Annual Financial Report. As of December 31, 2010, three capital project funds have deficit fund balances equaling a combined deficit of $1,362,396. While this is an on -going comment, we would like to recognize the significant improvements made related to fund balance deficits over the past five years. The following describes the status of each of these funds: One of the deficits is very typical for any city operating a TIF fund (TIF 1 -11). This fund showed positive operating results with revenues in excess of expenditures of $57,167 for 2010. One of the other two has specifically been addressed by the Council and a plan is being implemented to reduce the deficit over the near future (Dedicated Parks). This fund showed negative operating results with expenditures in excess of revenues of $18,424 for 2010. The last one is a new fund (Traffic Signal) this year and expenditures are in excess of revenues of $5,838. Information Technology Disaster Recovery Plan — We noted that the City has not established a formal, written business continuity or disaster recovery plan to be used in the event of a disaster. We therefore recommend the City develop a written plan to support the recovery of the technical infrastructure that can be used for testing and training purposes. In addition, the plan should be constructed in a format that could be followed by individuals not familiar with City operations in the event "key" information technology personnel are affected by the disaster event and are not available to execute recovery activities. Review of Reconciliations /Payroll Registers During the audit it was also noted that although there is procedures in place to review reconciliations and payroll registers, there is no documentation of this review. We recommend the individual reviewing the reconciliations and payroll registers to date and initial to show proper documentation of review. (2) Honorable Mayor and Members of the City Council City of Lino Lakes Conclusion We welcome the opportunity to discuss the points mentioned in this letter or any other accounting and procedural issues in order to coordinate our efforts with you, the mutual objective being the development of more effective accounting procedures for the City. We understand that some of the aforementioned points are in the process of implementation or may already have been implemented; however, these points are noted so that effective follow -up can be accomplished. We sincerely appreciate all the courtesies and cooperation extended to us by you and the staff of the City, and thank you for the opportunity to be of service to you. We look forward to working with you in the future. This report is intended solely for the information and use of the City Council, finance committee, management, the Office of the State Auditor, and federal awarding agencies and pass- through entities and is not intended to be and should not be used by anyone other than these specified parties. Minneapolis, Minnesota May 31, 2011 (3) 1_[-P LarsonAllen LLP LarsionAlleri LLP CPAs, Consultants & Advisors www.Iarsonalien.com REPORT ON MINNESOTA LEGAL COMPLIANCE Honorable Mayor and Members of the City Council City of Lino Lakes, Minnesota We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Lino Lakes, Minnesota as of and for the year ended December 31, 2010, which collectively comprise the City's basic financial statements and have issued our report thereon dated May 31, 2011. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Governmental Auditing Standards, issued by the Comptroller General of the United States, and the provisions of the Minnesota Legal Compliance Audit Guide for Political Subdivisions, promulgated by the State Auditor pursuant to Minnesota Statute 6.65. Accordingly, the audit included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The Minnesota Legal Compliance Audit Guide for Political Subdivisions covers seven main categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financing. Our study included all of the listed categories. The results of our tests indicate that, with respect to the items tested, the City of Lino Lakes, Minnesota complied with the material terms and conditions of applicable legal provisions. This report is intended solely for the use of the City of Lino Lakes, Minnesota, the Office of the State Auditor, and other state agencies, and is not intended to be and should not be used by anyone other than these specified parties. Minneapolis, Minnesota May 31, 2011 NEX A INTERNATIONAL [-P LarsonAllen LLP (4) An independent member of Nexia International Lars•nAllen LLP CPAs, Consultants & Advisors www.larsonallen.com OTHER REQUIRED AUDITOR COMMUNICATIONS Honorable Mayor and Members of the City Council City of Lino Lakes, Minnesota We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Lino Lakes, Minnesota (the City) for the year ended December 31, 2010, which collectively comprise the City's basic financial statements and have issued our report thereon dated May 31, 2011. Professional standards require that we provide you with the following information related to our audit. Our responsibility under U.S. Generally Accepted Auditing Standards and Government Auditing Standards As stated in our engagement letter dated November 17, 2010, our responsibility, as described by professional standards, is to express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities. As part of our audit, we considered the internal control of the City. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. As part of obtaining reasonable assurance about whether the 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, the objective of our tests was not to provide an opinion on compliance with such provisions. 1. Our responsibility is to plan and perform the audit to obtain reasonable, but not absolute, assurance that the financial statements are free of material misstatement. 2. We are responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures specifically to identify such matters. 3. We are also responsible for communicating matters regarding the provisions of the Minnesota Legal Compliance Audit Guide for Political Subdivisions, promulgated by the State Auditor pursuant Minnesota Statute 6.65. NEXIA INTERNATIONAL (5) An independent member of Nexia International Honorable Mayor and Members of the City Council City of Lino Lakes Other information in documents containing audited financial statements Our auditors' opinion, the audited financial statements, and the notes to financial statements should only be used in their entirety. Inclusion of the audited financial statements in a client prepared document, such as an annual report, should be done only with our prior approval and review of the document. Our responsibility for other information in documents containing the City's financial statements and our auditors' report does not extend beyond the financial information identified in our auditors' report. We have no responsibility for determining whether such other information is properly stated and do not have an obligation to perform any procedures to corroborate other information contained in such documents. Planned scope and timing of the audit We performed the audit according to the planned scope and timing previously communicated to you in our meeting about planning matters on January 18, 2011. Significant audit findings Qualitative aspects of accounting practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2010. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: Estimated useful lives of depreciable capital assets — Management's estimate of useful lives for depreciable assets is based on guidance recommended by authoritative accounting literature and past experiences. The useful life of a depreciable asset determines the amount of depreciation that will be recorded in any given reporting period as well as the amount of accumulated depreciation that is reported at the end of a reporting period. Estimated year -end valuation of investments at fair value — Management's estimate of the fair value of investments is based on published market values at December 31, 2010. We evaluated the key factors and assumptions used to develop the above estimates in determining that it is reasonable in relation to the financial statements taken as a whole. Difficulties encountered in performing the audit We encountered no significant difficulties in dealing with management in performing and completing our audit. (6) Honorable Mayor and Members of the City Council City of Lino Lakes Corrected and uncorrected misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Management did not identify and we did not notify them of any uncorrected financial statement misstatements. Disagreements with management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could be significant to the financial statements or the auditors' report. We are pleased to report that no such disagreements arose during the course of our audit. Management representations We have requested certain representations from management that are included in the management representation letter dated May 31, 2011. Management consultations with other independent accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the City's financial statements or a determination of the type of auditors' opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other audit findings or issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. This report is intended solely for the use of the City Council, finance committee, and management of the City of Lino Lakes and is not intended to be, and should not be, used by anyone other than these specified parties. Minneapolis, Minnesota May 31, 2011 (7) LarsonAllen LLP New Accounting and Reporting Standards Fund Balance Reporting Changes In March 2009, Governmental Accounting Standards Board issued GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. The requirements of this Statement are effective for the City's fiscal year ending December 31, 2011. Governments that wish to implement earlier than that date are encouraged to do so. Statement 54 distinguishes between fund balance amounts that are considered non - spendable, such as fund balance associated with inventories, and other amounts that are classified based on the relative ability to be spent. Beginning with the most non - spendable classification, fund balances will be reported in the following classifications: • Restricted — amounts constrained by external parties, constitutional provision, or enabling legislation. • Committed— includes amounts that can be used only for the specific purposes determined by a formal action of the government's highest level of decision - making authority • Assigned — amounts a government intends to use for a particular purpose. In governmental funds other than the general fund, assigned fund balance represents the remaining amount that is not restricted or committed. • Unassigned— amounts that are not constrained at all will be reported in the general fund or to report deficit balances in other governmental funds. The statement interprets certain terms within the definition of special revenue funds. The statement also specifies how economic stabilization or "rainy -day" amounts should be reported. For financial reporting purposes, stabilization should be regarded as a "restricted" or "committed" classification only if the government details the circumstances or conditions that signal the need for stabilization in sufficient detail. Otherwise, these amounts should be reported as "unassigned" in the general fund. The Financial Reporting Entity In November 2010, the GASB issued Statement No. 61, The Financial Reporting Entity: Omnibus an amendment of GASB Statements No. 14 and No. 34. Statement No. 61 is effective for financial reporting in fiscal year 2013 and modifies previous requirements for the assessment of potential component units (for example the City's Economic Development Authority) in determining what should be included in the City's financial statements. The Statement also modifies the display and disclosure requirements for component units. As a result, the method for including component units in the City's financial statements will need to be re- evaluated and potentially changed in fiscal year 2013. In preparation for evaluating the inclusion of component units under the new guidance in GASB Statement No. 61, the City should revisit the formative documents of its component units including charters, resolutions, bylaws, articles of incorporation, etc. (8) GASB Codification In December 2010, the GASB issued Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre - November 30, 1989 FASB and AICPA Pronouncements. As discussed in the City's accounting policy disclosures in its financial statements, the City historically followed Financial Accounting Standards Board (FASB) guidance issued before November 30, 1989, for purposes of reporting financial activity of proprietary funds such as the Water and Sewer Funds, and GASB guidance issued on and after November 30, 1989, all of which is considered acceptable methods for financial reporting of proprietary funds. However, GASB has accumulated and codified pre - November 30, 1989 FASB guidance deemed applicable to proprietary funds into an all- inclusive Statement No. 62. Statement No. 62 is very thorough, detailed and extensive — over 300 pages in length — and thus will require thoughtful implementation in fiscal year 2012. (9) COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2010 C 1 T y vi,,�_ 1 IIN 0 LA MINNESOTA F KES J 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF LINO LAKES, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2010 Prepared By: Finance Department Alan Rolek, Director of Finance Paula Schloer, Accountant 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF LINO LAKES, MINNESOTA TABLE OF CONTENTS I. INTRODUCTORY SECTION Principal City Officials Organizational Chart Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting Page Reference Number 1 2 3 8 II. FINANCIAL SECTION Independent Auditors' Report 9 Management's Discussion and Analysis 11 Basic Financial Statements Statement of Net Assets Statement 1 21 Statement of Activities Statement 2 22 Balance Sheet - Governmental Funds Statement 3 24 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance to the Statement of Activities Statement 4 26 Statement 5 27 Statement 6 29 Statement of Net Assets - Proprietary Funds Statement 7 30 Statement of Revenues, Expenses and Changes in Net Assets - Proprietary Funds Statement 8 31 Statement of Cash Flows - Proprietary Funds Statement 9 32 Statement of Net Assets - Fiduciary Funds — Agency Funds Statement 10 33 Notes to Financial Statements 34 CITY OF LINO LAKES, MINNESOTA TABLE OF CONTENTS Page Reference Number Required Supplementary Information General Fund: Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Statement 11 57 Notes to Required Supplementary Information 64 Schedule of Funding Progress for Postemployment Benefit Plan Statement 12 65 Combining Fund Financial Statements Combining Balance Sheet — Nonmajor Governmental Funds Statement 13 66 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance — Nonmajor Governmental Funds Statement 14 72 Special Revenue Fund — Program Recreation: Schedule of Revenues, Expenditures and Changes in Fund Balance — Budget and Actual Statement 15 78 Statement of Changes in Assets and Liabilities — Fiduciary Funds — Agency Funds Statement 16 79 Supplementary Financial Information Combined Schedule of Indebtedness Exhibit 1 80 Schedule of Deferred Tax Levies Exhibit 2 82 Debt Service Payments to Maturity - All Bonds Exhibit 3 84 Insurance in Force Exhibit 4 87 Taxable Valuations, Tax Levies and Tax Rates Exhibit 5 88 III. STATISTICAL SECTION Net Assets by Component — Last Eight Fiscal Years Table 1 89 Changes in Net Assets - Last Eight Fiscal Years Table 2 90 Fund Balances, Governmental Funds - Last Ten Fiscal Years Table 3 92 Changes in Fund Balances, Governmental Funds — Last Ten Fiscal Years Table 4 94 Assessed and Actual Value of Taxable Property - Last Ten Fiscal Years Table 5 96 1 CITY OF LINO LAKES, MINNESOTA TABLE OF CONTENTS 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Page Reference Number Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years Table 6 97 Principal Property Taxpayers Table 7 98 Property Tax Levies and Collections — Last Ten Fiscal Years Table 8 99 Ratios of Outstanding Debt by Type Table 9 101 Direct and Overlapping Governmental Activities Debt Table 10 103 Legal Debt Margin Information Table 11 104 Demographic and Economic Statistics Table 12 106 Principal Employers, Current Year and Nine Years Ago Table 13 107 Full -Time Equivalent Employees by Type Table 14 108 Operating Indicators by Function/Program Table 15 110 Capital Asset Statistics by Function/Program Table 16 112 I. INTRODUCTORY SECTION CITY OF LINO LAKES, MINNESOTA PRINCIPAL CITY OFFICIALS December 31, 2010 Elected Officials Mayor: Jeff Reinert Council Members: Kathi Gallup Rob Rafferty Jeff O'Donnell Dave Roeser Term Expires December 31, 2011 December 31, 2011 December 31, 2013 December 31, 2013 December 31, 2011 Appointed Personnel City Administrator Jeff Karlson Director of Administration Daniel Tesch Director of Finance Alan Rolek Director of Public Safety Kent Strege Director of Community Development Michael Grochala Director of Public Service Rick DeGardner 1 Public Services City of Lino Lakes Organizational Chart Citizens Honorable Mayor and City Council Commissions Cable Parks and Recreation Economic Development Planning and Zoning Fire Environmental City Administrator City Clerk Professional Consultants Engineering Attorney Fiscal Public Safety Parks Public Works Recreation Administration Police Emergency Management Community Development Human Resources Administrative Services 2 Finance Planning Economic Development Engineering Environmental Services Inspections Accounting Management Information Systems Utility Billing J 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 May 31, 2011 Honorable Mayor Members of the City Council Citizens of the City of Lino Lakes, Minnesota Minnesota State law requires that cities over 2,500 population publish within six months of the close of each fiscal year a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants and submit them to the state auditor. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the City of Lino Lakes, Minnesota for the fiscal year ended December 31, 2010. This report consists of management's representations concerning the finances of the City of Lino Lakes. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Lino Lakes has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City of Lino Lakes' financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the city's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City of Lino Lakes' financial statements have been audited by LarsonAllen LLP, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended December 31, 2010, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit that there was a reasonable basis for rendering an unqualified opinion that the City's financial statements for the fiscal year ended December 31, 2010, are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this report. GAAP require that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD &A). This letter of transmittal is designed to complement MD &A and should be read in conjunction with it. The City of Lino Lakes' MD &A can be found immediately following the report of the independent auditors. 3 600 Town Center Parkway, Lino Lakes, Minnesota 55014-1182 Phone: 651 - 982 -2400 • Fax: 651 - 982 -2499 Profile of the Government The City of Lino Lakes, incorporated in 1955, is a growing community in the southeast corner of the County of Anoka. It covers an area of 33 square miles and has a population of approximately 20,400. The population has more than doubled from the 1990 census figure of 8,807 and has grown by 21% since 2000. Within the City's borders lies the 2,550 acre Rice Creek Chain of Lakes Regional Park. Access to St. Paul and Minneapolis is provided by I -35W and I -35E. The City Charter, as amended, establishes a mayor - council form of government and grants the city council full policy - making and legislative authority to the mayor and four council members. The city council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and hiring a city administrator. The city administrator has the responsibility of carrying out the policies and ordinances of the city council, for overseeing the day -to -day operation of the city. The city council is elected at -large on a non - partisan basis, with council members serving four -year terms and the mayor serving a two -year term. Elections are held every two years with two council seats and the mayor being up for election each election cycle. The City provides a full range of municipal services. These services include: general government, public safety (police & fire), public works (streets & fleet), parks and recreation, conservation of natural resources (environmental & solid waste abatement), public improvements, providing and maintaining sanitary and storm sewer, water infrastructure, and two enterprise funds, the water and sewer funds. The annual budget is the foundation for the City of Lino Lakes' financial planning and control. All divisions are required to submit appropriations requests to the city administrator for review and consolidation into a proposed budget. The city administrator is responsible for submitting the proposed annual budget to the City Council in August of each year. The city council is required to hold a public hearing on the proposed budget and to adopt by resolution a final budget and certify it no later than December 28. The budget amounts cannot increase beyond the estimated receipts except to the extent that actual receipts exceed the estimate. Division directors may make transfers of appropriations within a department, but transfers of appropriations between departments require council approval. Budget -to- actual comparisons for the general fund and the recreation program fund, the only funds for which an annual budget has been adopted, are provided in this report beginning on pages 57 and 78, respectively. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Lino Lakes operates. Local economy. The economic development effort established by the City Council in 1993 increased the commercial/industrial tax base in the City from 3% of the total tax base to 10% in 2010. Development of three industrial parks - Apollo Business Park on 35W, Lakes Industrial Park on Lake Drive, and the Clearwater Creek Development Center on 35E, provided excellent opportunities for manufacturing and distribution businesses to move their headquarters to Lino Lakes. Before the recession began in late 2007 the Lino Lakes Town Center, comprising approximately 200 acres surrounding the 35W/Lake Drive interchange, was developing at a rapid pace. SuperTarget and Kohl's anchor the shopping center quadrant, while Apollo Business Park brought approximately 1,000 new employees to the area. Land was purchased by Anoka County on a third quadrant for future development of a regional library. 4 Factors Affecting Financial Condition (Continued) In 2006, the City placed a major focus on reconstruction of the 35W/Lake Drive interchange and completion of public improvements in the Legacy at Woods Edge mixed use development to accommodate planned development. Within Legacy at Woods Edge, the Lino Lakes Civic Complex and Chain of Lakes YMCA provide a civic and community focus as part of the vision for Town Center. A workforce family housing project and assisted living facility provide diversity in housing to underserved populations within the City. The deep recession has had negative impacts on the Legacy development. Both the master developer and lender defaulted, sending the remaining 22 acres intended for townhomes and commercial uses into tax forfeit. However, the solid foundation that was built and strong interest by developers prior to the recession ensures that better economic times will once again bring the interest in residential and commercial growth needed to complete the vision. Building activity and development continued to be soft in 2010, reflecting the nationwide market. Building permits for new homes in 2010 numbered 31, compared to 28 in 2009. This represents about 1/3 of the new home permits issued in 2007 and is down by approximately 85% from 2005. In anticipation of a strengthening economy, the City took the lead on developing the infrastructure needed to service future growth on the 35E /County Road 14 interchange area. A major reconstruction of the interchange completes a multi -year improvement of County Road 14 from Highway 61 in Hugo, through Centerville, to 35W in Lino Lakes. The City portion of the cost for this bridge reconstruction project is being financed through Anoka County, with the City issuing a $4.26 million General Obligation Note to the County. The interchange will be completed in the summer of 2011. With both major interstate interchanges complete, the City is preparing for development of several hundred acres in the northeast quadrant of 35E/14. Interest in the commercial interchange has spurred planning for an extension of Otter Lake Road North, which will leave the City well poised to accommodate significant future industrial, commercial and residential development. Long -term financial planning. The sagging economic conditions since 2008 continue to provide challenges in our long -term outlook. In 2004, the city entered into an agreement with a master developer to develop 40 acres in the southeast quadrant of I -35W and Lake Drive. This mixed -use development is intended to include diverse opportunities for housing, retail and office uses. To date, the development includes the Lino Lakes Civic Complex (which houses the city hall, police station and school district early childhood center), the Chain of Lakes YMCA, a 60 -unit workforce housing project, 13,000 square feet of leasable commercial space, and a former hotel, which is planned to be converted into an assisted living facility. Anoka County has plans to build a new regional library across the street from the development site, which is scheduled for 2012. However, the deep economic recession has stalled housing and commercial plans in the development and has forced the remaining 26 acres into foreclosure and tax forfeiture. The City continues to look for ways to resurrect the project and strives to be prepared to market the property when the economy recovers. 5 Factors Affecting Financial Condition (Continued) Street, streetscape, water, sewer, and storm water improvements, as well as a small community park, have been installed within the development area and assessed to the development. Improvements to the existing Lake Drive and the construction of a new interchange at I -35W and Lake Drive were completed in 2008. This $11.1 million improvement was financed through the joint efforts of MNDOT, Anoka County and the City of Lino Lakes. The City has issued $4,215,000 in G.O. Tax Increment bonds and will use tax increment financing and Minnesota State Aid funds to finance its portion of the project cost. It is acknowledged that this development will result in additional ongoing costs involved in servicing and maintaining the streets and public areas, which will be addressed in future operating budgets. The city's current five -year financial plan, adopted in January, 2008, identifies street and utility improvements totaling $23,287,990 over the period of 2008 through 2012. These improvements are anticipated to be funded through a number of funding sources, including special assessments, municipal state aid road funds, the area and unit trunk fund, the stormwater management fund and voter - approved tax levies. Also included in the final year of the plan is a feasibility study for a new public works facility. Scheduled capital equipment and office equipment needs and the financing for those needs are also included in the plan. The five -year plan also includes funding projections for operations and operating impacts for the period of 2008 -2012. This plan is in the process of being revised to reflect the anticipated activity through the year 2015. Cash management policies and practices. The City's policy is to invest all available moneys at competitive rates in accordance with Minnesota law. Investments are made by minimizing credit and market risks while maintaining a competitive yield. Funds are invested in certificates of deposit, commercial paper and U.S. government agencies. Cash is pooled in one account to provide maximum return. The City Council reviews the investment policy annually. The City's investment policy's primary objective is safety of principal. Therefore, all deposits were either insured by Federal depository insurance or were collateralized as required by State Statute. Due to the weakened economy, a historically low interest rate environment has persisted over the last few years and has had a dramatic impact on the city's investment earnings. The average yield on investments for 2010 was 1.74 %. Investment income includes positive or negative changes in the fair value of investments. Changes in fair value during the current year, however, do not necessarily represent trends that will continue; nor is it always possible to realize such amounts, especially in the case of temporary changes in the fair value of investments the city intends to hold to maturity. Risk management. The City's general property, liability and worker's compensation coverage is provided through the League of Minnesota Cities Trust (LMCIT). At the beginning of the insurance year, the city deposits with LMCIT a premium determined by calculating estimated payroll and applying experience modification ratios. An audit is performed at the end of the insurance year, which may produce a refund or an adjustment due. LMCIT's reserves and rates are reviewed annually by an actuary to assure that the program remains financially strong. 6 Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awards the Certificate of Achievement for excellence in financial reporting to cities that meet certain criteria. The City of Lino Lakes received this award for its comprehensive annual financial report for the year ended December 31, 2009. This marks the tenth consecutive year that the city has received this prestigious award. A governmental unit must publish an easily readable and efficiently organized comprehensive annual financial report, the contents of which conform to program requirements. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The City is submitting the 2010 report to GFOA for consideration of the Certificate of Achievement for Excellence in Financial Reporting. We believe our current report continues to conform to the high standards of the Certificate program. The timely preparation of this report could not have been accomplished without the dedicated services of the Finance Department, auditors and other city staff. I also want to express my appreciation to the Mayor and City Council for their support for maintaining the highest standard of professionalism in the management of the financial operation of the City. Respectfully submitted, Alan J. Rolek Director of Finance 7 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Certificate of Achievement for Excellence in Financial Reporting Presented to City of Lino Lakes Minnesota For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 2009 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. rWillt0 STATES .p. AIM H to ca, 7:"/ ox s 0,30 y,+' President 8 "WiAot Executive Director II. FINANCIAL SECTION LarsionAlleri LLP CPAs, Consultants & Advisors www.larsonallen.com INDEPENDENT AUDITORS' REPORT Honorable Mayor and Members of the City Council City of Lino Lakes, Minnesota We have audited the accompanying financial statements of the governmental activities, the business - type activities, each major fund, and the aggregate remaining fund information of the City of Lino Lakes, Minnesota as of and for the year ended December 31, 2010, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the 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 opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Lino Lakes, Minnesota as of December 31, 2010, and the respective changes in financial position and cash flows, where applicable, thereof and for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated May 31, 2011 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. NEXiA INTERNATIONAL 9 An independent member of Nexia International Honorable Mayor and Members of the City Council City of Lino Lakes The management's discussion and analysis, budgetary comparison information and schedule of funding progress as listed in the table of contents are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquires of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying supplementary information, including the introductory section, combining fund financial statements, supplementary financial information and statistical section listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information, except for the introductory and statistical sections on which we express no opinion, has been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Minneapolis, Minnesota May 31, 2011 10 1-U-P LarsonAllen LLP 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2010 As management of the City of Lino Lakes, Minnesota, we offer readers of the City of Lino Lakes' financial statements this narrative overview and analysis of the financial activities of the City of Lino Lakes for the fiscal year ended December 31, 2010. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 3 -7 of this report. FINANCIAL HIGHLIGHTS • The assets of the City of Lino Lakes exceeded its liabilities at the close of the most recent fiscal year by $88,106,214 (net assets). Of this amount $27,467,511 (unrestricted net assets) may be used to meet the City's ongoing obligations to citizens and creditors in accordance with the City's fund designations and fiscal policies. • The City's total net assets decreased by $819,082, reflecting the depreciation of existing infrastructure assets under the full accrual basis of accounting. • As of the close of the current fiscal year, the City of Lino Lakes' governmental funds reported combined ending fund balance of $21,166,347, an increase of $93,914 in comparison with the prior year primarily due to the receipt of excess tax increment revenue in the general fund. Approximately 80% of this total amount, or $17,012,557, is available for spending at the City's discretion (unreserved fund balance). • At the end of the current fiscal year, unreserved fund balance for the general fund was $5,445,334, or 65% of total general fund expenditures. • The City's total bonded debt decreased by $2,036,000 (7.7 %) during the current fiscal period. In addition, the City carried a note to Anoka County for $4,260,000 during the year for the the City's portion 135E /County Road 14 interchange project cost. The City issued a refunding bond in the amount $1,000,000 to refinance its G.O. Improvement and Utility Revenue bonds of 2004. Principal in the amount of $3,206,000 was retired during the year. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis are intended to serve as an introduction to the City of Lino Lakes' basic financial statements. The City of Lino Lakes' basic financial statements comprise three components: 1. Government -wide financial statements 2. Fund financial statements 3. Notes to the financial statements This report also contains other supplementary information in addition to the basic financial statements themselves. Government -wide financial statements The government -wide financial statements are designed to provide readers with a broad overview of the City of Lino Lakes' finances, in a manner similar to private - sector business. The statement of net assets presents information on all of the City of Lino Lakes' assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City of Lino Lakes is improving or deteriorating. The statement of activities presents information showing how the City's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused compensated absences and OPEB liabilities). 11 City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2010 OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED) Government -wide financial statements (Continued) Both of the government -wide financial statements distinguish functions of the City of Lino Lakes that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City of Lino Lakes include general government, public safety, public services, parks, recreation and forestry, conservation of natural resources and community development. The business -type activities of the City of Lino Lakes include a water utility and sewer utility. The government -wide financial statements can be found on pages 21 -23 of this report. Fund financial statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Lino Lakes, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance - related legal requirements. All of the funds of the City of Lino Lakes can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long -term impact of the government's near -term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental functions and governmental activities. The City of Lino Lakes maintains thirty -seven individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General fund, G.O. Improvement Bonds 2005A fund, I -35E Interchange fund and Area and Units Charge fund, all of which are considered to be major funds. Data from the other thirty -three governmental funds are combined into a single, aggregate presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The City of Lino Lakes adopts an annual appropriated budget for its general and program recreation special revenue funds. A budgetary comparison statement has been provided for these funds to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 24 through 29 of this report. Proprietary funds The City of Lino Lakes maintains two proprietary type funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City of Lino Lakes uses enterprise funds to account for its sewer and water utilities. The proprietary fund statements provide the same type of information as the government -wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the sewer fund and the water fund, which are considered to be major funds of the City of Lino Lakes. The basic proprietary fund financial statements can be found on pages 30 through 32 of this report. 12 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2010 OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED) Fiduciary funds Fiduciary funds are used to account for assets held by the City as an agent for individuals, private organizations, or other governments. Notes to the financial statements The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on pages 34 -56 of this report. Other information The combining statements and schedules referred to earlier in conjunction with nonmajor governmental funds can be found on pages 67 -80 of this report. GOVERNMENT -WIDE FINANCIAL ANALYSIS As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. The City of Lino Lakes' assets exceeded liabilities by $88,106,214 at the close of the most recent fiscal year, an decrease of $819,082 from the previous year. This decrease is primarily due to the depreciation of capital assets under the full accrual basis of accounting. By far the largest portion of the City of Lino Lakes' net assets (59 %) reflects its investment in capital assets (e.g. land, buildings, machinery, equipment, and infrastructure), less any related debt used to acquire those assets that is still outstanding. The City of Lino Lakes uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Lino Lakes' investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Condensed versions of the statements of net assets at December 31, 2010 and 2009 are as follows: Current and Other Assets Capital Assets Total Assets Noncurrent Liabilities Outstanding Other Liabilities Total Liabilities Governmental Activities Business -Type Activities Total 2010 2009 2010 2009 2010 2009 $ 31,085,069 $ 31,111,757 $ 10,830,886 $ 10,258,440 $ 41,915,955 $ 41,370,197 41,950,227 44,441,064 30,442,635 31,240,252 72,392,862 75,681,316 73,035,296 75,552,821 41,273,521 41,498,692 114,308,817 117,051,513 24,336,418 25,984,244 835,278 1,204,232 25,171,696 27,188,476 969,751 827,328 61,156 110,413 1,030,907 937,741 25,306,169 26,811,572 896,434 1,314,645 26,202,603 28,126,217 Net Assets: Invested in Capital Assets, Net of Related Debt 22,562,217 23,400,453 29,648,461 30,071,840 52,210,678 53,472,293 Restricted 8,428,025 9,414,474 8,428,025 9,414,474 Unrestricted 17,703,885 15,926,322 10,728,626 10,112,207 28,432,511 26,038,529 Total Net Assets $ 48,694,127 $ 48,741,249 $ 40,377,087 $ 40,184,047 $ 89,071,214 $ 88,925,296 Of the remaining balance of the City of Lino Lakes' net assets, restricted net assets (10 %) are to be used for debt service requirements and a nonexpendable environmental fund. Unrestricted net assets (31%) may be used to meet the government's ongoing obligations to citizens and creditors. 13 City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2010 GOVERNMENT -WIDE FINANCIAL ANALYSIS (CONTINUED) At the end of the current fiscal year, the City of Lino Lakes is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business -type activities. Governmental activities Governmental activities decreased the City of Lino Lakes' net assets by $1,012,112. Transfers to Business -Type activities and depreciation of capital assets under the full accrual basis of accounting were the primary reasons for this decrease. Business -type activities Business -type activities increased the City of Lino Lakes' net assets by $193,040. Operating income, investment earnings and transfers from governmental activities to the water and sewer funds accounted for a significant portion of that increase. Condensed statements of revenues, expenses, and changes in net assets highlights are as follows for the years ended December 31, 2010 and 2009: Governmental Activities Business -Type Activities Total 2010 2009 2010 2009 2010 2009 REVENUES Program Revenues: Charges for Services $ 1,412,916 $ 1,434,181 $ 2,585,231 $ 2,867,981 $ 3,998,147 $ 4,302,162 Operating Grants and Contributions 617,450 682,797 62,710 617,450 745,507 Capital Grants and Contributions 1,388,984 1,357,015 8,709 8,769 1,397,693 1,365,784 General Revenues: Property Taxes 8,568,236 9,673,693 - 8,568,236 9,673,693 Franchise Taxes 150,924 133,892 - - 150,924 133,892 Other Taxes 45,023 739 - - 45,023 739 Contributions Not Restricted to Specific Programs 4,389 11,321 - - 4,389 11,321 Unrestricted Investment Earnings 225,677 429,325 104,770 228,747 330,447 658,072 Gain on Disposal of Capital Assets - 12,644 - - - 12,644 Total Revenues 12,413,599 13,735,607 2,698,710 3,168,207 15,112,309 16,903,814 EXPENSES General Government Public Safety Public Service Parks, Recreation and Forestry Conservation of Natural Resources Community Development Interest on Long -Term Debt Water Sewer Total Expenses 1,987,415 3,971,261 3,968,063 1,124,907 197,571 1,105,254 99,172 2,201,439 4,299,366 4,027,553 1,313,560 215,607 1,005,997 928,668 12,453,643 13, 992,190 1,045,901 1,466,847 1,089,569 1,432,107 2,512,748 2,521,676 1,987,415 2,201,439 3,971,261 4,299,366 3,968,063 4,027,553 1,124,907 1,313,560 197,571 215,607 1,105,254 1,005,997 99,172 928,668 1,045,901 1,089,569 1,466,847 1,432,107 14,966,391 16,513,866 CHANGE IN NET ASSETS BEFORE TRANSFERS (40,044) (256,583) 185,962 646,531 145,918 389,948 Transfers (7,078) (136,068) 7,078 136,068 - - CHANGE IN NET ASSETS (47,122) (392,651) 193,040 782,599 145,918 389,948 Net Assets - Beginning of Year 48,741,249 49,133,900 40,184,047 39,401,448 88,925,296 88,535,348 NET ASSETS - END OF YEAR $ 48,694,127 $ 48,741,249 $ 40,377,087 $ 40,184,047 $ 89,071,214 $ 88,925,296 14 City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2010 GOVERNMENT -WIDE FINANCIAL ANALYSIS (CONTINUED) Below are specific graphs that provide comparisons of the government activities' direct program revenues with their expenditures. Any shortfalls in direct revenues are primarily supported by property tax levy or general state aid. Expenses and Program Revenues — Governmental Activities $4,500,000 000,000 3,500, 000 $3,000, 000 $2,500, 000 $2,000, 000 $1,500, 000 $1,000,000 $500,000 $- Py' Got` ,�e< Revenues by Source — Governmental Activities Unrestricted grants Unrestricted and contributions in vest men earnings 0% 2% Other 0% Franchise taxes 1% Property taxes 69 % 1 Charges for services 12% ■ Expenses • Re venue s Operating grants and contributions 5% 15 Capital grants and contributions 11% City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2010 GOVERNMENT -WIDE FINANCIAL ANALYSIS (CONTINUED) Below are specific graphs that provide comparisons of the business -type activities' direct program revenues with their expenditures. Excess revenues are retained within each fund until such time that capital replacement is needed. Expenses and Program Revenues — Business -type Activities $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $- Water Revenues by Source — Business -type Activities Operating grants and contributions 0% Capital grants and contributions 0% Sewer Other 4% Charges for services 96% 16 °Expenses •Revenues 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2010 FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS As noted earlier, the City of Lino Lakes uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. Governmental Funds The focus of the City of Lino Lakes' governmental funds is to provide information on near -term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Lino Lakes' financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City of Lino Lakes' governmental funds reported combined ending fund balances of $21,166,347, an increase of $93,914, or 0.4 %, over the previous year, primarily due to the receipt of excess tax increment revenue in the general fund. Approximately 80% of this total amount, or $17,012,557, constitutes unreserved fund balance, which is available for spending at the government's discretion. The remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed 1) to liquidate contracts and purchase orders of the prior period ($183,813), 2) to pay debt service ($2,986,102), 3) to fund interfund advances ($658,875), 4) to fund environmental improvements ($100,000), or for long -term notes receivable ($225,000). The general fund is the primary operating fund of the City of Lino Lakes. At the end of the current fiscal year, unreserved fund balance of the general fund was $5,445,334, while the total fund balance was $5,626,805. As a measure of the general fund's liquidity, it may be useful to compare unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 65% of total general fund expenditures, while total fund balance represents 67% of that same amount. The fund balance of the City of Lino Lakes' general fund increased by $238,841 during the current fiscal year. A soft real estate market and the onset of an economic recession in December 2007, reduced building activities again this year which decreased permit revenue. Even as signs of economic recovery were being seen, the remaining effects of the recession also had an impact on property tax delinquencies, and interest rates, which made a significant impact on budgeted investment earnings. However, the City received unanticipated revenue in the form of excess tax increment revenue which helped to somewhat offset reduced revenue in other budget areas. In addition, reduced expenditures, primarily for personal services through vacant positions, and contractual services offset the reduced revenues. Overall, the general fund's revenues were within approximately 2% of the amended budget, while expenditures and transfers were 4% below budgeted levels. The G.O. improvement bonds 2005A fund has a total fund deficit of ($1,093,765). This fund is related to the bonds issued for the Legacy Woods Edge improvement project. The payment of debt service and delinquency in the collection of special assessments dedicated to this issue caused a significant decrease in this fund. An interfund loan from the Sewer fund has aided in the payment of debt service for this issue. The 135E Interchange fund has a total fund balance at year -end of $4,194,759, primarily due to the issuance of debt for construction financing. This balance will be reduced throughout 2011 as the interchange project progresses. The area and unit charge fund has a total fund balance of $3,578,910, of which $658,875 is reserved for advances to other funds, and $2,920,035 is unreserved and available for financing capital improvements. The fund balance during the current year increased by $680,748, due in large part to the reduction in the advances to other funds and to lower expenditures in 2010. 17 City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2010 FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS (CONTINUED) Proprietary funds The City of Lino Lakes' proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. The water fund has total net assets at year -end of $17,722,683, of which $3,737,394 are unrestricted. The increase in net assets of $107,716 was primarily due to operating income, contributions from the private sources and the primary government, and investment earnings. Total net assets in the sewer fund at the end of 2010 were $22,654,404, of which $6,991,232 was unrestricted. Net assets increased $85,324 during the current year resulting primarily from operating income and investment income. The water rates, which reflect water conservation efforts through a tiered rate structure, and sewer Rates were unchanged in 2010. GENERAL FUND BUDGETARY HIGHLIGHTS The original budget was amended several times during the year reflecting donations and grants received primarily for police personnel and equipment, a reduction in expected state aid, and reallocating resources within the original budget. Revenues were $123,063 under budget for the year. This is due to a few major factors. Property taxes were lower due to higher delinqencies in tax payments. Investment earnings, due to historically low interest rates were also significantly under budget. Lower building activity due to the recessed economy and, therefore, fewer new construction building permits being issued was also a factor. State intergovernmental revenues for police PERA aid were below budgeted levels for the year due to position vacancies. Local government grants were slightly under budget due to lower grant funds allocated by the granting entity. Public safety charges for service were also well over budget due to higher than expected traffic control contracts. Fines and forfeitures were under budgeted amounts due to reduced funding for patrolling for vehicular violations and the success of the city's Achieving Compliance through Education (ACE) program. Expenditures came in under the budgeted revenues by $362,103 due mainly to lower than expected personal services costs from vacant positions and reduced benefit costs. Energy costs for fuels and electricity were lower than budgeted amounts, and supplies costs were generally lower than anticipated. There were also net transfers from the general fund of $612,699. This resulted in a net fund balance increase of $238,841 for the fiscal year. 18 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2010 CAPITAL ASSET AND DEBT ADMINISTRATION Capital assets The City of Lino Lakes' investment in capital assets for its governmental and business - type activities as of December 31, 2010, is $72,392,862 (net of accumulated depreciation). This investment in capital assets includes land, buildings, office equipment and furniture, vehicles, machinery and equipment, other capital assets, and infrastructure. This represents a decrease in the City of Lino Lakes' investment in capital assets (net of accumulated depreciation) of 4.35 %. Due to the economic downturn, no new infrastructure projects were undertaken by the City, and therefore, the only additions were from projects in progress. The decrease within the governmental activities and is attributable to the depreciation of constructed streets, underground infrastructure and vehicles. Within the business -type activities decreases were also attributable to depreciation of existing of the water and sewer funds. Land Construction in Progress Buildings Office Equipment and Furniture Vehicles Machinery and Shop Equipment Other Equipment Infrastructure Capital Assets, Net Capital Assets at Year -End (Net of Accumulated Depreciation) Governmental Activities Business -Type Activities 2010 2009 2010 2009 $ 2,809,059 $ 2,809,059 $ $ 13,054 3,728,690 3,945,724 360,674 408,514 1,223,361 1,364,599 232,749 184,434 213,894 271,875 311,081 33,323,819 35,417,653 $ 41,950,227 $ 44,441,064 $ 182,348 30,260,287 30,442,635 31,013,304 $ 31,240,252 Total 2010 $ 2,809,059 3,728,690 360,674 1,223,361 415,097 271,875 63,584,106 $ 72,392,862 2009 $ 2,809,059 13,054 3,945,724 408,514 1,364,599 398,328 311,081 66,430,957 $ 75,681,316 Additional information on the City's capital assets can be found in the notes to the financial statements on pages 34 -56. Long -term debt At the end of the current fiscal year, the City of Lino Lakes had total bonded debt outstanding of $20,111,000. Of this amount $10,141,000 comprises tax supported debt, $9,175,000 is special assessment debt and $795,000 is revenue supported debt. All outstanding debt carries the general obligation backing for which the city is liable in the event of default by the property owners subject to the specific taxes, special assessments or revenues pledged to the retirement of the debt. In addition, the City carries a note to Anoka County for its share of the cost of the I -35E /County Road 14 Interchange project in the amount of $4,260,000. Outstanding Debt at Year -End Governmental Activities 2010 Business -Type Activities Total 2009 2010 G.O. Bonds $ 10,141,000 $ 10,712,000 G.O. Special Assessment Bonds 9,175,000 10,265,000 - G.O. Revenue Bonds - 795,000 Total Outstanding Debt $ 19,316,000 $ 20,977,000 $ 795,000 2009 1,170, 000 $ 1,170,000 2010 2009 $ 10,141,000 $ 10,712,000 9,175,000 10,265,000 795,000 1,170,000 $ 20,111,000 $ 22,147,000 The City of Lino Lakes' total bonded debt decreased by $2,036,000 (7.7 %) during the current fiscal year. The key factors for the change include the issuance of $170,000 in 2010A Equipment Certificates and $1,000,000 in 2010A G.O. Improvement and Utility Revenue Refunding Bonds, and retirement of principal in the amount of $3,206,000 during the year. Additional information on the City's long -term debt can be found in the notes to the financial statements on pages 34 -56. 19 City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2010 ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES • The unemployment rate for the City of Lino Lakes at year -end is 7.1 %, which is a significant decrease from a rate of 7.8% a year ago. This is slightly higher than the state's average unemployment rate of 6.8% and significantly lower than the national average of 9.1 "Yo at the end of 2010. • Residential growth in the City has slowed significantly over the last three years due to the general residential real estate market downturn and current economic recession, with about one -third the number of new home permits issued in 2010 as in 2007, and less than 85% of new home permits issued in 2005. This is expected to level off in 2011, with hopes of the beginning of a recovery of the housing market in 2012. This, as well as falling property values of the existing tax base, will have a significant impact on the City's tax base for 2012 and beyond. • Energy costs, while relatively stable in recent months, are expected to continue to increase over the coming months. This will have an impact on the City's budget for the coming year and thereafter. • Property tax reforms and State budget deficits have significantly impacted local government aid payments the City of Lino Lakes receives. Local government aid and market value homestead credit was reduced to zero for 2003 and 2004 -2010. While the City is exempted from local government aid, no market value homestead credit is expected to be received in 2011. • The Federal Reserve Board has decreased the federal funds rates significantly, currently to between 0.00% — 0.25 %, which is expected to result in sizable decreases in the City's investment earnings. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the City of Lino Lakes' finances for all of those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Director of Finance, City of Lino Lakes, 600 Town Center Parkway, Lino Lakes, Minnesota, 55014. 20 BASIC FINANCIAL STATEMENTS CITY OF LINO LAKES, MINNESOTA STATEMENT OF NET ASSETS December 31, 2010 Statement 1 Governmental Business -type Activities Activities Total ASSETS Cash and investments $ 16,900,487 $ 9,792,728 $ 26,693,215 Cash and investments with escrow agent 4,271,142 4,271,142 Accrued interest receivable 54,444 54,444 Accounts receivable 142,875 384,017 526,892 Due from other governments 140,549 1,590 142,139 Internal Balances (559,111) 559,111 - Taxes receivable 538,764 - 538,764 Special assessments receivable 8,857,806 40,408 8,898,214 Long -term notes receivable 225,000 225,000 Prepaid items 183,813 20,988 204,801 Inventory - 27,576 27,576 Unamortized bond issue costs 229,300 4,468 233,768 Permanently restricted cash and investments 100,000 100,000 Capital assets: Land 2,809,059 2,809,059 Other capital assets, net of depreciation 39,141,168 30,442,635 69,583,803 Total assets 73,035,296 41,273,521 114,308,817 LIABILITIES Accounts payable 266,618 37,644 304,262 Salaries payable 221,625 11,363 232,988 Contracts and retainage payable 17,561 - 17,561 Accrued interest payable 411,113 11,941 423,054 Due to other governments 52,834 - 52,834 Other accrued liabilities 208 208 Non - current liabilities: Due within one year 2,429,475 418,632 2,848,107 Due in more than one year 21,906,943 416,646 22,323,589 Total liabilities 25,306,169 896,434 26,202,603 NET ASSETS Invested in capital assets, net of related debt 22,562,217 29,648,461 52,210,678 Restricted for: Debt service - expendable 8,328,025 8,328,025 Environmental improvements - nonexpendable 100,000 100,000 Unrestricted 17,703,885 10,728,626 28,432,511 Total net assets $ 48,694,127 $ 40,377,087 $ 89,071,214 The accompanying notes are an integral part of these basic financial statements. 21 CITY OF LINO LAKES, MINNESOTA STATEMENT OF ACTIVITIES Year Ended December 31, 2010 Functions /Programs Governmental activities: General government Public safety Public services Parks, recreation and forestry Conservation of natural resources Community development Interest on long -term debt Total governmental activities Business -type activities: Water Sewer Total business -type activities Total Expenses Pro ram Revenues Charges for Services $ 1,987,415 $ 3,971,261 3,968,063 1,124,907 197,571 1,105,254 99,172 12,453,643 1,045,901 1,466,847 2,512,748 $ 14,966,391 98,403 691,005 427,223 177,984 4,153 14,148 1,412,916 617,450 Operating Grants and Contributions Contributions Capital Grants and $ 188,273 $ 179,108 184,652 65,417 1,087,013 1,498,218 2,585,231 $ 3,998,147 $ 617,450 1,388,984 1,388,984 6,216 2,493 8,709 $ 1,397,693 General revenues: Taxes: Property taxes, levied for general purpose Franchise taxes Other taxes Grants and contributions not restricted to specific programs Unrestricted investment earnings Transfers Total general revenues and transfers Change in net assets Net assets - beginning Net assets - ending The accompanying notes are an integral part of these basic financial statements. 22 Statement 2 Net (Expense) Revenue and Changes in Net Assets Governmental Business -type Activities Activities Total $ (1,700,739) $ $ (1,700,739) (3,101,148) - (3,101,148) (1,967,204) (1,967,204) (946,923) (946,923) (128,001) (128,001) (1,091,106) (1,091,106) (99,172) - (99,172) (9,034,293) (9,034,293) 47,328 47,328 33,864 33,864 81,192 81,192 (9,034,293) 81,192 (8,953,101) 8,568,236 - 8,568,236 150,924 150,924 45,023 45,023 4,389 4,389 225,677 104,770 330,447 (7,078) 7,078 - 8,987,171 111,848 9,099,019 (47,122) 193,040 145,918 48,741,249 40,184,047 88,925,296 $ 48,694,127 $ 40,377,087 $ 89,071,214 23 CITY OF LINO LAKES, MINNESOTA BALANCE SHEET - GOVERNMENTAL FUNDS December 31, 2010 G.O. Improvement 135E Assets General Bonds 2005A Interchange Cash and investments $ 5,459,582 $ - $ - Cash and investments with escrow agent 4,271,142 Accrued interest receivable 54,444 - Accounts receivable 103,253 Due from other governmental units 139,049 Interfund receivable Taxes receivable: Delinquent 378,504 - Due from county 105,627 Special assessments receivable: Delinquent - Deferred 1,177 5,851,618 Due from county Long -term notes receivable Prepaid items 181,471 Permanently restricted cash and investments Advances to other funds Total assets $ 6,423,107 $ 5,851,618 $ 4,271,142 Liabilities and equity Liabilities: Interfund payable Accounts payable Salaries payable Contracts and retainage payable Due to other governmental units Advances from other funds Deferred revenue Total liabilities Fund balances: Reserved : Reserved for prepaid items Reserved for debt retirement Reserved for advances to other funds Reserved for environmental improvements Reserved for long -term notes receivable Unreserved: Designated: General fund Special revenue funds Capital projects funds Undesignated reported in: Debt service funds Capital projects funds Permanent funds Total fund balances Total liabilities and fund balances $ $ 1,093,765 $ 76,250 190,073 133 221,394 4,268 886 379,681 5,851,618 796,302 6,945,383 76,383 181,471 5,445,334 (1,093,765) 4,194,759 5,626,805 (1,093,765) 4,194,759 $ 6,423,107 $ 5,851,618 $ 4,271,142 The accompanying notes are an integral part of these basic financial statements. 24 1 Area and Unit Charge $ 2,778,231 1 23,828 1 1 128,946 1,344,766 117,976 658,875 1 $ 5,052,622 1 1 1,473,712 1 1,473,712 1 658,875 1 1 2,920,035 1 3,578,910 1 $ 5,052,622 1 1 1 Statement 3 Other Total Governmental Governmental Funds Funds $ 8,662,674 $ 16,900,487 4,271,142 54,444 15,794 142,875 1,500 140,549 1,376,681 1,376,681 42,685 421,189 11,948 117,575 51,799 180,745 1,331,289 8,528,850 30,235 148,211 225,000 225,000 2,342 183,813 100,000 100,000 658,875 $ 11,851,947 $ 33,450,436 $ 765,777 $ 1,935,792 76,412 266,618 231 221,625 13,293 17,561 51,948 52,834 658,875 658,875 1,425,773 9,130,784 2,992,309 12,284,089 2,342 183,813 2,986,102 2,986,102 658,875 100,000 100,000 225,000 225,000 5,445,334 110,471 110,471 5,651,180 12,765,974 (1,093,765) (228,133) (228,133) 12,676 12,676 8,859,638 21,166,347 $ 11,851,947 $ 33,450,436 25 CITY OF LINO LAKES, MINNESOTA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS December 31, 2010 Statement 4 Total Fund Balances for Governmental Funds $ 21,166,347 Total net assets reported for governmental activities in the statement of net assets is different because: Capital assets used in governmental funds are not financial resources and, therefore, are not reported in the funds. Those assets consist of: Land $ 2,809,059 Buildings, Net of Accumulated Depreciation 3,728,690 Office Equipment and Furniture, Net of Accumulated Depreciation 360,674 Vehicles, Net of Accumulated Depreciation 1,223,361 Machinery and Shop Equipment, Net of Accumulated Depreciation 232,749 Other Equipment, Net of Accumulated Depreciation 271,875 Infrastructure, Net of Accumulated Depreciation 33,323,819 41,950,227 Some of the City's property taxes and special assessments will be collected after year -end, but are not available soon enough to pay for the current period's expenditures and, therefore, are reported as deferred revenue in the governmental funds. Bond issuance costs are reported as expenditures in the governmental funds and are shown net of accumulated amortization on the statement of net assets. Interest on long -term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due. Accrued interest for general obligation bonds is included in the statement of net assets. Long -term liabilities that pertain to governmental funds, including bonds payable, are not due and payable in the current period and therefore are not reported as fund liabilities. All liabilities - both current and long -term - are reported in the statement of net assets. Balances at year -end are: Bonds Payable Unamortized Premiums Unamortized Discounts Notes Payable Other Post Employment Benefits Compensated Absence Payable Total Net Assets of Governmental Activities The accompanying notes are an integral part of these basic financial statements. 26 9,130,784 229,300 (411,113) (19,316,000) (102,101) 30,091 (4,260,000) (63,287) (625,121) (24,336,418) $ 47,729,127 CITY OF LINO LAKES, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - GOVERNMENTAL FUNDS Year Ended December 31, 2010 G.O. Area and 1 1 1 Improvement I35E Unit Revenue: General Bonds 2005A Interchange Charge General property taxes $ 7,566,099 $ $ - $ Tax increments Licenses and permits 330,138 I Intergovernmental 609,781 Special assessments 10,172 457,351 Charges for services 364,605 239,954 Fines and forfeits 127,203 - - Investment earnings 45,811 100 66,444 Refunds 26,841 - Miscellaneous 152,842 Total revenue 9,233,492 100 763,749 Expenditures: Current: General government 1,725,871 - Public safety 3,798,106 - - Public works 1,284,519 9,364 3,420 Parks, recreation and forestry 785,462 - - Conservation of natural resources 175,062 - - Community development 602,891 Capital outlay: General government - Public safety 7,890 - Public works _ Conservation of natural resources 2,151 - - Debt service: Principal 300,000 Interest and fiscal charges 235,322 Total expenditures 8,381,952 535,322 9,364 3,420 1 Revenue over (under) expenditures 851,540 (535,322) (9,264) 760,329 Other financing sources (uses): Transfer in Transfer out (612,699) (100,000) (79,581) Sale of property Issuance of debt Premium on bonds issued Payment to refunding bond escrow agent Total other financing sources (uses) (612,699) (100,000) (79,581) 1 Net increase (decrease) in fund balance 238,841 (535,322) (109,264) 680,748 Fund balance - Beginning of year 5,387,964 (558,443) 4,304,023 2,898,162 Fund balance - December 31 $ 5,626,805 $ (1,093,765) $ 4,194,759 $ 3,578,910 The accompanying notes are an integral part of these basic financial statements. 27 1 1 Statement 5 Other Total Governmental Governmental Funds Funds $ 837,444 $ 8,403,543 243,945 243,945 330,138 567,082 1,176,863 383,747 851,270 175,485 780,044 127,203 113,322 225,677 26,841 323,309 476,151 2,644,334 12,641,675 4,519 1,730,390 3,798,106 605,108 1,902,411 160,359 945,821 10,170 185,232 495,791 1,098,682 215 215 94,277 102,167 178,405 178,405 2,151 1,566,000 1,866,000 807,561 1,042,883 3,922,405 12,852,463 (1,278,071) (210,788) 1,195,747 1,195,747 (335,345) (1,127,625) 20,600 20,600 1,170,000 1,170,000 10,980 10,980 (965,000) (965,000) 1,096,982 304,702 (181,089) 93,914 9,040,727 21,072,433 $ 8,859,638 $ 21,166,347 28 CITY OF LINO LAKES, MINNESOTA RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITIES Year Ended December 31, 2010 Statement 6 Net Change in Fund Balances -Total Governmental Funds $ 93,914 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, assets are capitalized and the cost is allocated over their estimated useful lives and reported as depreciation expense. Capital outlays $ 580,075 Capital contributions to business -type funds (75,200) Loss on disposal of capital assets (21,332) Proceeds from sales of capital assets (20,600) Depreciation expense (2,953,780) The governmental funds report bond proceeds as financing sources, while repayment of bond principal is reported as an expenditure. In the statement of net assets, however, issuing debt increases long -term liabilities and does not affect the statement of activities and repayment of principal reduces the liability. Also, governmental funds report the effect of issuance costs, premiums and discounts when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Interest is recognized as an expenditure in the governmental funds when it is due. In the statement of activities, however, interest expense is recognized as it accrues, regardless of when it is due. The net effect of these differences in the treatment of general obligation bonds and related items is as follows: Issuance of note payable (1,000,000) Issuance of equipment certificates (170,000) Bond premium (10,980) Bond issuance costs 26,265 Repayment of bond principal 2,831,000 Change in accrued interest expense for general obligation bonds (22,067) Amortization of bond issuance costs (39,083) Amortization of bond premium 20,065 Amortization of bond discount (6,469) Delinquent and deferred property taxes and special assessments receivable will be collected subsequent to year- end, but are not available soon enough to pay for the current period's expenditures and, therefore, are deferred in the governmental funds. Deferred revenue - December 31, 2009 9,358,924 Deferred revenue - December 31, 2010 In the statement of activities, compensated absences and other post employment benefits are measured by the amounts earned during the year. In the governmental funds, however, expenditures for these items are measured by the amount of financial resources used (essentially, the amounts actually paid). During fiscal year 2010, compensated absence payable and other post employment benefits payable increased. Change in Net Assets of Governmental Activities The accompanying notes are an integral part of these basic financial statements. 29 (2,490,837) 1,628,731 9,130,784 (228,140) (15,790) $ (1,012,122) 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF LINO LAKES, MINNESOTA STATEMENT OF NET ASSETS - PROPRIETARY FUNDS December 31, 2010 Statement 7 Assets Current assets: Cash and cash equivalents Accounts receivable Due from other governmental units Interfund receivable Special assessments receivable Due from county - special assessments Prepaid items Total current assets Non - current assets: Special assessments, long term Inventory Unamortized bond issue costs Capital assets being depreciated: Buildings Equipment Water and sewer systems Total capital assets Less: allowance for depreciation Net capital assets Total noncurrent assets Total assets Liabilities Current liabilities: Accounts payable Salaries payable Deferred Revenue Accrued interest payable Bonds payable - current portion Compensated absences payable - current portion Total current liabilities Non - current liabilities: Bonds payable - long term Compensated absences payable - long term Total noncurrent liabilities Total liabilities Net assets Invested in capital assets, net of related debt Unrestricted Total net assets The accompanying notes are an integral part of these basic financial statements. 30 Water $ 3,555,128 168,343 7,798 2,081 9,421 3,742,771 Sewer $ 6,237,600 215,674 1,590 559,111 2,081 11,567 7,027,623 Total 2010 $ 9,792,728 384,017 1,590 559,111 7,798 4,162 20,988 10,770,394 28,448 - 28,448 27,576 - 27,576 4,468 - 4,468 48,690 48,690 122,811 341,392 464,203 19,784,263 21,258,093 41,042,356 19,955,764 21,599,485 41,555,249 (5,176,301) (5,936,313) (11,112,614) 14,779,463 15,663,172 30,442,635 14,839,955 15,663,172 30,503,127 18,582,726 22,690,795 41,273,521 27,488 5,680 208 11,941 390,000 14,316 449,633 404,174 6,236 410,410 860,043 10,156 5,683 14,316 30,155 6,236 6,236 36,391 37,644 11,363 208 11,941 390,000 28,632 479,788 404,174 12,472 416,646 896,434 13,985,289 15,663,172 29,648,461 3,737,394 6,991,232 10,728,626 $ 17,722,683 $ 22,654,404 $ 40,377,087 CITY OF LINO LAKES, MINNESOTA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS - PROPRIETARY FUNDS Year Ended December 31, 2010 Statement 8 Total Water Sewer 2010 Operating revenue: Charges for services $ 1,059,994 $ 1,491,728 $ 2,551,722 Hook -up charges 8,000 6,490 14,490 Water meter sales 8,698 - 8,698 Other operating revenue 10,321 10,321 Total operating revenue 1,087,013 1,498,218 2,585,231 Operating expenses: Personal services 172,095 173,937 346,032 Materials and supplies 208,872 43,252 252,124 Contractual services 76,755 70,464 147,219 MCES sewer charges - 681,591 681,591 Depreciation 426,861 445,956 872,817 Utilities 97,060 34,047 131,107 Other 28,640 17,600 46,240 Total operating expenses 1,010,283 1,466,847 2,477,130 Net income from operations 76,730 31,371 108,101 Other income (expense): Investment earnings 37,249 67,521 104,770 Special assessments 6,216 2,493 8,709 Bond interest (29,858) - (29,858) Paying agent fees (5,760) (5,760) Total other income (expense) 7,847 70,014 77,861 Net income before contributions and transfers 84,577 101,385 185,962 Contributions and transfers: Capital contributions from primary government 57,200 18,000 75,200 Transfer out (34,061) (34,061) (68,122) Total contributions and transfers 23,139 (16,061) 7,078 Change in Net Assets 107,716 85,324 193,040 Net Assets - January 1 17,614,967 22,569,080 40,184,047 Net Assets - December 31 $ 17,722,683 $ 22,654,404 $ 40,377,087 The accompanying notes are an integral part of these basic financial statements. 31 i 1 1 1 1 1 1 1 t 1 1 1 1 1 CITY OF LINO LAKES, MINNESOTA STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS Year Ended December 31, 2010 Statement 9 Cash flows from operating activities: Cash receipts from customers Cash paid to suppliers Cash paid to employees Net cash flows from operating activities Cash flows from noncapital financing activities: Net transfers Net cash flows from noncapital financing activities Cash flows from capital and related financing activities: Principal paid on revenue bonds Collection of special assessments Interest and paying agent fees on revenue bonds Net cash flows from (used) by capital and related financing activities Cash flows from investing activities: Interest on investments Net increase (decrease) in cash and cash equivalents Cash and cash equivalents - January 1 Cash and cash equivalents - December 31 Reconciliation of operating income to net cash from operating activities: Operating income Adjustments to reconcile operating income to net cash flows from operating activities: Depreciation Change in assets and liabilities: Decrease (increase) in receivables Decrease (increase) in prepaid items Decrease (increase) in inventory Increase (decrease) in payables Net cash flows from operating activities Noncash investing, capital, and financing activities: Capital asset contributions from government The accompanying notes are an integral part of these basic financial statements. 32 Water Sewer Total 2010 $ 1,104,291 $ 1,490,913 $ 2,595,204 (419,725) (863,689) (1,283,414) (171,142) (172,792) (343,934) 513,424 454,432 967,856 (34,061) (34,061) (375,000) 17,164 (36,344) (394,180) 37,249 122,432 3,432,696 $ 3,555,128 (34,061) (34,061) (694) (694) 67,521 487,198 5,750,402 $ 6,237,600 (68,122) (68,122) (375,000) 16,470 (36,344) (394,874) 104,770 609,630 9,183,098 $ 9,792,728 $ 76,730 $ 31,371 $ 108,101 426,861 17,070 233 15,299 (22,769) $ 513,424 445,956 872,817 (7,306) 9,764 2 235 15,299 (15,591) (38,360) 454,432 $ 967,856 $ 57,200 $ 18,000 $ 75,200 CITY OF LINO LAKES, MINNESOTA STATEMENT OF NET ASSETS - FIDUCIARY FUNDS - AGENCY FUNDS December 31, 2010 Statement 10 Assets Cash and investments Deposits receivable Total assets Liabilities Accounts payable Deposits payable Total liabilities The accompanying notes are an integral part of these financial statements. 33 2010 $ 753,507 750 $ 754,257 $ 13,054 741,203 $ 754,257 1 1 1 1 t 1 1 1 1 1 1 1 1 1 1 1 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 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 basic financial statements of the City of Lino Lakes have been prepared in conformity with U.S. generally accepted accounting principles as applied to governmental units by the Governmental Accounting Standards Board (GASB). The following is a summary of the significant accounting policies: A. FINANCIAL REPORTING ENTITY As required by U.S. generally accepted accounting principles, the financial statements of the reporting entity include those of the City of Lino Lakes and its component units. A component unit is a legally separate entity for which the primary government is financially accountable, or for which the exclusion of the component unit would render the financial statements of the primary government misleading. The criteria used to determine if the primary government is financially accountable for a component unit include whether or not the primary government appoints the voting majority of the potential component unit's board, is able to impose its will on the potential component unit, is in a relationship of financial benefit or burden with the potential component unit, or is fiscally depended upon by the potential component unit. COMPONENT UNITS In conformity with U.S. generally accepted accounting principles, the financial statements of component units have been included in the financial reporting entity either as blended component units or as discretely presented component units. Blended Component Units The Economic Development Authority (EDA) of Lino Lakes is an entity legally separate from the City. However, for financial reporting purposes, the EDA is reported as if it were part of the City's operations because the members of the City Council serve as commission members. The EDA does not issue separate financial statements. The Housing and Redevelopment Authority (HRA) of Lino Lakes is an entity legally separate from the City. However, for financial reporting purposes, the HRA is reported as if it were part of the City's operations because the members of the City Council serve as commission members. The HRA has not yet incurred any financial activity. B. BASIC FINANCIAL STATEMENTS 1. Government -Wide Statements The government -wide financial statements (i.e., the statement of net assets and the statement of activities) display information about the primary government and its component units. These statements include the financial activities of the overall City government, except for fiduciary activities. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges to external parties for support. As a general rule, the effect of interfund activity has been eliminated from the government -wide financial statements. Exceptions to this general rule are charges between the City's enterprise funds and various other functions of government. Eliminations of these charges would distort the direct costs and program revenues reported for the various functions concerned. 34 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. BASIC FINANCIAL STATEMENTS (CONTINUED) 1. Government -Wide Statements (Continued) In the government -wide statement of net assets, both the governmental and business -type activities columns: (a) are presented on a consolidated basis by column; and (b) are reported on a full accrual, economic resource basis, which recognizes all long -term assets and receivables as well as long -term debt and obligations. The City's net assets are reported in three parts: (1) invested in capital assets, net of related debt; (2) restricted net assets; and (3) unrestricted net assets. The City first utilizes restricted resources to finance qualifying activities. The statement of activities demonstrates the degree to which the direct expenses of each function of the City's governmental activities and different business -type activities are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or activity. Program revenues include: (1) fees, fines, and charges paid by the recipients of goods, services, or privileges provided by a given function or activity; and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or activity. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. 2. Fund Financial Statements The fund financial statements provide information about the City's funds, including its fiduciary funds and blended component unit. Separate statements for each fund category (governmental, proprietary, and fiduciary) are presented. The emphasis of governmental and proprietary fund financial statements is on major individual governmental and enterprise funds, with each displayed as separate columns in the fund financial statements. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or incidental activities. The City reports the following major governmental funds: General Fund The general fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. General Obligation Improvement Bonds 2005A Fund The general obligation improvement bonds 2005A fund accounts for the accumulation of resources for, and the payment of, interest, principal and related costs on general long -term debt. 135E Interchange Fund The I35E interchange fund accounts for the activity related to the I35E /CSAH 14 Interchange Reconstruction Project. Area and Unit Charge Fund The area and unit charge fund accounts for the collection of water and sewer unit charges to be used for debt payments and construction of infrastructure. 35 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 i 1 1 1 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. BASIC FINANCIAL STATEMENTS (CONTINUED) 2. Fund Financial Statements (Continued) The City reports the following major proprietary funds: Water Fund The water fund accounts for customer water service charges that are used to finance water operating expenses. Sewer Fund The sewer fund accounts for customer water service charges that are used to finance water operating expenses. Additionally, the City reports the following fiduciary funds: Agency Funds - to account for assets held as an agent for individuals, private organizations, other governmental units, and/or other funds. The City's agency fund accounts for pass - through contractor's deposits relating to prospective developments. C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING The government -wide and proprietary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Agency funds, which are included in the Fiduciary Funds, do not have a measurement focus. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Private- sector standards of accounting and financial reporting issued on or before November 30, 1989, generally are followed in both the government -wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private- sector guidance for their business -type activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private - sector guidance. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. The City considers all revenues to be available if they are collected within 60 days after the end of the current period. Property and other taxes, licenses, and interest are all considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long -term debt, compensated absences, and claims and judgments, which are recognized as expenditures to the extent that they have matured. Proceeds of general long -term debt and acquisitions under capital leases are reported as other financing sources. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. 36 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING (CONTINUED) Amounts reported as program revenues include: 1. Charges to customers or applicants for goods, services, or privleges provided, 2. operating grants and contributions, and 3. capital grants and contributions, including special assessments. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenue of the City's enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. D. BUDGETS Budgets are adopted on a basis consistent with U.S. generally accepted accounting principles. Annual appropriated budgets are adopted for the General Fund and the Program Recreation Special Revenue Fund. 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 not presently considered necessary to assure effective budgetary control or to facilitate effective cash management. E. LEGAL COMPLIANCE — BUDGETS The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The City Administrator submits to the City Council a proposed operating budget (including the General Fund and Program Recreation Special Revenue Fund) for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is legally enacted through passage of a resolution on a departmental basis and can be expended by each department based upon detailed budget estimates for individual expenditure accounts. 4. The City Manager is authorized to transfer appropriations within any department budget. Additional interdepartmental or interfund appropriations and deletions are or may by 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. 37 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. LEGAL COMPLIANCE — BUDGETS (CONTINUED) 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 unless approved by the City Administrator. The legal level of budgetary control is at the expenditure level (i.e. personal services, supplies; other services and charges; capital outlay) within each activity. 9. The City Council may authorize transfers 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 investments authorized by Minnesota Statutes. Earnings from investments are allocated to individual funds on the basis of the fund's equity in the cash and investment pool. The City provides temporary advances to funds that have insufficient cash balances by means of an advance from another fund shown as interfund receivables in the advancing fund in the governmental fund financial statements, and an interfund payable in the fund with the deficit, until adequate resources are received. These interfund payables are eliminated for statement of net assets presentation. Investments are stated at fair value and interest earnings are accrued at year -end. 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. Permanently restricted cash and investments represents the principal portion of resources received that must be retained in a permanent fund. Only earnings from these funds may be used for purposes that support environmental maintenance and improvements. G. PROPERTY TAX CREDITS Property taxes on homestead property (as defined by State Statutes) are partially reduced by property tax credits. These credits are paid to the City by the State in lieu of taxes levied against homestead property. The State remits these credits through installments each year. These credits are recognized as revenue by the City at the time of collection. 38 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) H. PROPERTY TAX REVENUE RECOGNITION The City Council annually adopts a tax levy and certifies it to the County in December (levy /assessment date) of each year for collection in the following year. The County is responsible for billing and collecting all property taxes for itself, the City, the local School District and other taxing authorities. Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. Real property taxes are payable (by property owners) on May 15 and October 15 of each calendar year. Personal property taxes are payable by taxpayers on February 28 and June 30 of each year. These taxes are collected by the County and remitted to the City on or before July 15 and December 15 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. Within the governmental fund financial statements, the City recognizes property tax revenue when it becomes both measurable and available to finance expenditures of the current period. In practice, current and delinquent taxes and State credits received by the City in July, December and the following January are recognized as revenue for the current year. 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. Deferred revenue in governmental activities is susceptible to full accrual on the government - wide statements. 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 2010 totaled $1,072,396. Receipt of property taxes from this "fiscal disparities pool" does not increase or decrease total tax revenue. I. 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. Within the fund fmancial statements, the 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 funds are completely offset by deferred revenues. Deferred revenue in governmental activities is susceptible to full accrual on the government -wide statements. 39 1 1 1 E 1 1 1 1 1 1 i 1 1 i r 1 1 1 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) I. SPECIAL ASSESSMENT REVENUE RECOGNITION (CONTINUED) 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. J. INVENTORIES The original cost of materials and supplies has been recorded as expenditures /expenses at the time of purchase in both the Governmental and Proprietary Funds. These funds do not maintain material amounts of materials and supplies. K. INTERFUND RECEIVABLES/PAYABLES During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. The year -end balances are classified as interfund receivables and payables on the governmental fund balance sheets. The non - current portion of interfund loans are reported as "advances to /from other funds." Advances between funds are offset by a fund balance reserve account in applicable governmental funds to indicate they are not available for appropriation and are not expendable from available financial resources. L. CAPITAL ASSETS Capital assets, which include property, plant, equipment, and infrastructure assets (e.g. roads, sidewalks, street lights, and similar items) are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets exceeding the City's capitalization threshold of $2,500 are recorded at historical cost or estimated historical cost if purchased or constructed. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. All existing City infrastructure has been capitalized regardless of date placed in service. Depreciation on exhaustible assets is recorded as an allocated expense in the Statement of Activities with accumulated depreciation reflected in the Statement of Net Assets. Capital assets are depreciated using the straight -line method over their estimated useful lives. Since surplus assets are sold for an immaterial amount when declared as no longer needed for City purposes, no salvage value is taken into consideration for depreciation purposes. Useful lives vary from 3 to 30 years for Buildings, Office Furniture and Equipment, Vehicles, Machine Shop and Equipment and Other assets, and 25 to 50 years for Infrastructure. Capital assets not being depreciated include land and construction in progress. 40 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) M. COMPENSATED ABSENCES It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All vacation pay and the portion of sick pay allowable as severance pay is accrued as incurred in the government -wide and proprietary fund financial statements. The current portion is calculated based on historical trends. N. LONG -TERM OBLIGATIONS In the entity-wide financial statements, long -term debt and other long -term obligations are reported as liabilities in the applicable governmental activities. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight -line method. Bond issue costs, if material, are amortized over the term of the related debt using the straight -line method. In the governmental fund financial statements, bond premiums and discounts, as well as bond issue costs are recognized during the current period. The face amount of the debt issue is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts are reported as other financing uses. Issue costs are reported as debt service expenditures. O. FUND EQUITY In the governmental fund financial statements, reservations of fund balance represent those portions of fund equity not appropriable for expenditure or legally restricted by outside parties for use for a specific purpose. Designated fund balances represent tentative plans for future use of financial resources that are subject to change. P. INTERFUND TRANSACTIONS Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures /expenses initially made from it that are properly applicable to another fund, are recorded as expenditures /expenses in the reimbursing fund and as reductions of expenditures or expenses in the fund that is reimbursed. All other interfund transactions are reported as transfers. All Interfund transactions are eliminated except for activity between governmental activities and business- type activities for presentation in the entity-wide statements of net assets and statements of activities. 41 i 1 1 1 1 1 1 1 1 r 1 1 1 1 1 1 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 2 DEPOSITS AND INVESTMENTS Components of Cash and Investments Cash and investments at year -end consists of the following: Deposits $ 5,217,160 Investments 22,228,742 Cash with Fiscal Agent 4,271,142 Cash on Hand 820 Total $ 31,717,864 Cash and investments are presented in the financial statements as follows: Cash and Investments - Statement of Net Assets $ 26,693,215 Cash and Investments with Escrow Agent - Statement of Net Assets 4,271,142 Cash and Investments - Statement of Net Assets - Fiduciary Funds 753,507 Total $ 31,717,864 A. Deposits The City maintains a cash and investment pool that is available for use by all funds. Each fund type's portion of this pool is displayed on the statement of net assets and the balance sheet as "Cash and Investments." In accordance with Minnesota Statutes the City maintains deposits at financial institutions which are authorized by the City Council. Custodial Credit Risk — Custodial credit risk for deposits is the risk that in the event of a bank failure, the City's deposits may not be returned to it. The City does not have a specific deposit policy for custodial credit risk but rather follows Minnesota Statutes for deposits. Minnesota Statutes require that all 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 corporate surety bonds. Authorized collateral include: U.S. government treasury bills, notes, or bonds; issues of a U.S. government agency; general obligations of a state or local government rated "A" or better; revenue obligations of a state or local government rated "AA" or better; irrevocable standby letter of credit issued by a Federal Home Loan Bank; and time deposits insured by a federal agency. Minnesota statutes require securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or at an account at a trust department of a commercial bank or other financial institution not owned or controlled by the depository. The carrying value and bank balance of the City's deposits in banks at December 31, 2010 is $5,217,160 and $5,260,793, respectively, and were entirely covered by federal depository insurance or by surety bonds and collateral in accordance with Minnesota statutes. Cash with Fiscal Agent — Unspent proceeds from the Note Payable to Anoka County of $4,271,142 are presented as cash with fiscal agent and held by Anoka County. See Note 4. 42 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 2 DEPOSITS AND INVESTMENTS (CONTINUED) B. Investments The City may also invest idle funds as authorized by Minnesota Statutes as follows: • Direct obligations or obligations guaranteed by the United States or its agencies • Shares of investment companies registered under the Federal Investment Company Act of 1940 and received the highest credit rating, is rated in one of the two highest rating categories by a statistical rating agency, and all of the investments have a fmal maturity of thirteen months or less • General obligations rated "A" or better; revenue obligations rated "AA" or better • General obligations of the Minnesota Housing Finance Agency rated "A" or better • Banker's acceptances of United States banks eligible for purchase by the Federal Reserve System • Commercial paper issued by United States banks corporations or their Canadian subsidiaries, of highest quality category by a least two nationally recognized rating agencies, and maturing in 270 days or less • Guaranteed investment contracts guaranteed by United States commercial banks or domestic branches of foreign banks or United States insurance companies if similar debt obligations of the issuer or the collateral pledged by the issuer is in the top two rating categories • Repurchase or reverse purchase agreements and securities lending agreements financial institutions qualified as a "depository" by the government entity, 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, or certain Minnesota securities broker - dealers Investments Held with Broker — Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City's policy to minimize interest rate risk includes investing primarily in short-term securities and structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations. Information about the sensitivity of the fair values of the City's investments to market interest rate risk fluctuations is provided by the following table that shows the distribution of the City's investments by maturity: Type Minnesota Municipal Money Market Trust Fund Federal Farm Credit Banks Federal Home Loan Bank Federal Home Loan Mortgage Corp. Federal National Mortgage Assn. Negotiable CDs Municipal Bonds Mutual Fund Total 12 Months 13 to 24 Total or Less Months $ 2,563,407 100,426 3,129,816 2,001,358 2,600,771 8,399,720 3,158,829 274,415 $ 22,228,742 43 $ 2,563,407 8,399,720 - 25 to 60 More than Months 60 Months $ - $ 100,426 1,498,114 1,631,702 1,249,991 751,367 2,152,758 448,013 200,000 1,536,246 828,291 594,292 274,415 - - - $ 11,437,542 $ 1,536,246 $ 5,829,580 $ 3,425,374 1 1 1 1 1 1 1 1 1 1 1 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 2 DEPOSITS AND INVESTMENTS (CONTINUED) Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. The City's policy to minimize credit risk includes limiting investing funds to those allowable under Minnesota Statute 118A, annually appointing all financial institutions where investments are held, and diversifying the investment portfolio. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The following chart summarizes year -end ratings for the City's investments as rated by Moody's Investors Service: Credit Type Quality Rating Amount Minnesota Municipal Money Market Trust Fund Aa2 $ 2,563,407 Federal Farm Credit Banks Aaa 100,426 Federal Home Loan Bank Aaa 3,129,815 Federal Home Loan Mortgage Corp. Aaa 2,001,358 Federal National Mortgage Assn. Aaa 2,600,772 Negotiable CDs Not Rated 8,399,720 Municipal Bonds A -Aaa 3,158,829 Mutual Fund Not Rated 274,415 Total $ 22,228,742 The Minnesota Municipal Money Market Fund Trust is a common law trust organized in accordance with the Minnesota Joint Powers Act, which invests only in investment instruments allowable under Minnesota statutes as described on the previous page. Its investments are valued at amortized cost, which approximates market value in accordance with Rule 2a -7 of the Investment Company Act of 1940. The amortized cost method of valuation values a security at its cost on the date of purchase and thereafter assumes a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the fair value of instruments. The Minnesota Municipal Money Market Trust Fund does not have its own credit rating. MBIA, Inc., who administers the Minnesota Municipal Money Market Fund Trust holds an organization credit rating of Aa2. For an investment, custodial credit risk is the risk that, in the event of failure of the counterparty, the City will not be able to recover the value of its investment or collateral securities that are in the possession of an outside party. The City's investment policy doesn't specifically address custodial credit risk. Concentration of Credit Risk The City places no limit on the amount that it may invest in any one issuer. The following is a list of investments which individually comprise more than 5% of the City's total investments: Type Amount Percentage Federal Home Loan Bank $ 3,129,815 22.63% Federal Home Loan Mortgage Corporation 2,001,358 14.47% Federal National Mortgage Association 2,600,772 18.81% Minnesota Municipal Money Market Trust Fund 2,563,407 18.54% 44 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 3 CAPITAL ASSETS Capital asset activity for the year ended December 31, 2010 was as follows: Governmental Activities: Capital Assets, Not Being Depreciated: Land Total Capital Assets, Not Being Depreciated Capital Assets, Being Depreciated: Buildings Office Equipment and Furniture Vehicles Machinery and Shop Equipment Other Equipment Infrastructure Total Capital Assets, Being Depreciated Accumulated Depreciation for: Buildings Office Equipment and Furniture Vehicles Machinery and Shop Equipment Other Equipment Infrastructure Total Accumulated Depreciation Total Capital Assets, Being Depreciated, Net Governmental Activities Capital Assets, Net Beginning Balance Increases $ 2,809,059 $ 2,809,059 6,499,752 1,133,717 2,348,963 639,702 980,308 75,473,297 87,075,739 (2,554,028) (725,203) (984,364) (455,268) (669,227) (40,055,644) (45,443,734) 41,632,005 $ 44,441,064 Depreciation expense was charged to governmental functions as follows: Governmental Activities: General Govemment Public Safety Public Services Parks, Recreation and Forestry Conservation of Natural Resources Community Development Total Depreciation Expense, Governmental Activities Business -Type Activities: Capital Assets, Not Being Depreciated: Construction in Progress Total capital assets, not being depreciated Capital Assets, Being Depreciated: Buildings Machinery and Shop Equipment Water and Sewer Lines Total Capital Assets, Being Depreciated Accumulated Depreciation for: Buildings Machinery and Shop Equipment Water and Sewer Lines Total Accumulated Depreciation Total Capital Assets, Being Depreciated, Net Business -Type Capital Assets, Net Beginning Balance 29,855 118,588 116,532 239,900 504,875 (217,034) (77,696) (255,494) (30,616) (39,206) (2,333,734) (2,953,780) (2,448,905) $ (2,448,905) $ 249,191 123,222 2,410,348 170,169 350 500 $ 2,953,780 Increases $ 13,054 $ 13,054 48,690 464,203 40,954,102 41,466,995 (48,690) (250,309) (9,940,798) (10,239,797) 31,227,198 $ 31,240,252 S 45 88,254 88,254 Decreases Ending Balance $ 2,809,059 2,809,059 6,499,752 (2,683) 1,160,889 (119,440) 2,348,111 (62,669) 693,565 980,308 75,713,197 (184,792) 87,395,822 (2,771,062) 2,684 (800,215) 115,108 (1,124,750) 25,068 (460,816) (708,433) (42,389,378) 142,860 (48,254,654) (41,932) 39,141,168 (41,932) $ 41,950,227 Decreases Ending Balance $ (13,054) $ (13,054) (31,546) (841,271) (872,817) (784,563) (784,563) $ 48,690 464,203 41,042,356 41,555,249 (48,690) (281,855) (10,782,069) (11,112,614) 30,442,635 (13,054) $ 30,442,635 1 1 e 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 4 CITY INDEBTEDNESS City indebtedness at December 31, 2010 is composed of the following: Final Issue Maturity Interest Original Date Date Rate Issue Payable 12/31/2010 Governmental Activities: General Obligation Bonds: 2008A Equipment Certificates 2/1/2008 12/31/2011 4.00% $ 209,000 $ 74,000 2009A Equipment Certificates 4/1/2009 12/31/2012 3.00% 336,000 232,000 2010A Equipment Certificates 4/1/2010 12/31/2013 2.00% -3.00% 170,000 170,000 G.O. Tax Abatement Bonds, Series 2006C 8/15/2006 2/1/2023 4.00% -4.30% 2,460,000 2,460,000 G.O. Utility Revenue Bonds, Series 2006D 8/15/2006 2/1/2017 4.00% -4.15% 570,000 420,000 G.O. CIP Refunding Bonds, Series 2006E 11/1/2006 2/1/2018 4.00% 2,990,000 2,910,000 G.O. Tax Increment Financing Bonds, Series 2007A 7/15/2007 2/1/2024 4.00 % - 4.125% 4,215,000 3,875,000 Total General Obligation Bonds 10,950,000 10,141,000 Special Assessment Bonds: G.O. Improvement Bonds, Series 2002A 8/1/2002 2/1/2013 3.00% -4.10% 645,000 85,000 G.O. Improvement Bonds, Series 2002B 8/1/2002 2/1/2013 3.20% -5.55% 2,110,000 750,000 G.O. Improvement Refunding Bonds, Series 2003A 12/1/2003 2/1/2019 2.00 % -4.25% 2,090,000 605,000 G.O. Improvement Bonds, Series 2003B 12/1/2003 2/1/2014 3.20% -5.60% 250,000 125,000 G.O. Improvement Bonds, Series 2005A 11/1/2005 2/1/2021 4.35% -5.15% 5,550,000 4,495,000 G.O. Improvement Refunding Bonds, Series 2005B 11 /1 /2005 2/1/2015 3.75 % -5.00% 3,755,000 2,115,000 G.O. Improvement & Utility Revenue Refunding Bonds, Series 2010A 7/9/2010 2/1/2020 2.00 % -3.00% 1,000,000 1,000,000 Total Special Assessment Bonds 15,400,000 9,175,000 Total Bonds 26,350,000 19,316,000 Note Payable - Anoka County 8/1/2009 8/1/2024 4.00 % -3.70% 4,260,000 4,260,000 Unamortized Bond Discounts (45,490) (30,091) Unamortized Bond Premiums 202,370 102,101 Compensated Absences Payable N/A 625,121 Other Post Employment Benefit Plan N/A 63,287 Total Governmental Activities $ 30,766,880 $ 24,336,418 Business -Type Activities: Revenue Bonds: G.O. Water Revenue Refunding Bonds, Series 2006F 11/1/2006 2/1/2012 3.55 % - 3.625% $ 1,740,000 $ 795,000 Total Revenue Bonds 1,740,000 795,000 Unamortized Bond Discounts (4,002) (826) Compensated Absences Payable N/A 41,104 Total Business -Type Activities $ 1,735,998 $ 835,278 46 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 4 CITY INDEBTEDNESS (CONTINUED) The following is a schedule of changes in City indebtedness for the year ended December 31, 2010: Governmental activities: Bonded debt: General Obligation Special Assessment Unamortized Bond Discounts Unamortized Bond Premiums Note Payable - Anoka County Compensated Absences Payable Other Post Employment Benefit Plan Total Govemmental Activities Business -Type Activities: Revenue Bonds Unamortized Bond Discounts Compensated Absences Payable Total Business -Type Activities Total Payable 12/31/2009 Issues $ 10,712,000 10,265,000 (36,560) 111,186 4,260,000 627,884 44,734 25,984,244 1,170,000 (1,588) 35,820 1,204,232 $ 170,000 1,000,000 10,980 547,346 40,404 1,768,730 37,050 37,050 Payments $ 741,000 2,090,000 (6,469) 20,065 550,109 21,851 3,416,556 375,000 (762) 31,766 406,004 Payable Due Within 12/31/2010 One Year $ 10,141,000 $ 840,000 9,175,000 1,190,000 (30,091) 102,101 4,260,000 625,121 399,475 63,287 - 24,336,418 2,429,475 795,000 390,000 (826) 41,104 28,632 835,278 418,632 $ 27,188,476 $ 1,805,780 $ 3,822,560 $ 25,171,696 $ 2,848,107 All long -term bonded indebtedness outstanding at December 31, 2010 is backed by the full faith and credit of the City, including special assessment bond issues. For the governmental activities, compensated absences are generally liquidated by the general fund. Minimum annual principal and interest payments required to retire long -term debt, not including compensated absences payable are as follows. Years ending December 31, 2011 2012 2013 2014 2015 2016 -2020 2021 -2024 Total Govemmental Activities Business -Type Activities Principal Interest Principal Interest $ 2,030,000 $ 955,755 $ 2,106,000 860,771 2,135,000 768,348 1,890,000 678,901 2,260,000 599,184 8,845,000 1,853,139 4,310,000 562,898 390,000 $ 21,701 405,000 7,341 $ 23,576,000 $ 6,278,996 $ 795,000 $ 29,042 Total $ 3,397,456 3,379,112 2,903,348 2,568,901 2,859,184 10,698,139 4,872,898 $ 30,679,038 Description and Restrictions of Long -Term Debt General Obligation Bonds - The bonds were issued for improvements or projects which benefited the City as a whole and are, therefore, repaid from ad valorem levies. Special Assessment Bonds - These bonds were issued to finance various improvements and will be repaid primarily from special assessments levied on the properties benefiting from the improvements. However, some issues are partly financed by ad valorem levies. 47 1 1 1 1 1 1 1 N 1 1 1 1 1 1 1 N 1 1 1 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 4 CITY INDEBTEDNESS (CONTINUED) In December 2009, the City of Lino Lakes entered into a joint powers agreement for a note payable with Anoka County for $4,260,000. The note payable with Anoka county is for the reconstruction of County State Aid Highway 14 (Main Street) and I -35E Interchange County Project. In June 2010, the City issued $1,000,000 in General Obligation Improvement and Utility Revenue Refunding Bonds for a net interest cost of 2.65% to complete a current refunding of the outstanding 2004A General Obligation Improvement and Utility Revenue Bonds totaling $965,000. The $1,000,000 is being funded by special assessments related to the imporvement project that the City has collected. The current refunding resulted in a cash flow savings of $34,805 with a net present value of $31,415. The original bonds had been issued to fund various assessable public projects from 2004, and were called on June 1, 2010. Liability for Compensated Absences — This liability represents vested benefits earned by governmental fund employees through the end of the year which will be paid or used in future periods. For the governmental activities, compensated absences are generally liquidated by the general fund. The liability for Proprietary Fund employees is included in the accrued liabilities of those funds. 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 Lakes' legal debt margin for 2010 is computed as follows: 12/31/10 Market value $ 2,001,889,600 Applicable percentage 3.0% Debt Limit 60,056,688 Amount of debt applicable to debt limit: Total bonded debt 20,111,000 Less: Special assessment bonds (9,175,000) Tax abatement bonds (2,460,000) Utility revenue bonds (420,000) Tax increment financing bonds (3,875,000) Revenue bonds (795,000) Total debt applicable to debt limit 3,386,000 Legal debt margin $ 56,670,688 48 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 6 DEFINED BENEFIT PENSION PLANS - STATEWIDE A. 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 General Employees Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF) which are a cost - sharing, multiple- employer retirement plan. This plan is established and administered in accordance with Minnesota Statutes, Chapter 353 and 356. GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership by statute are covered by the PEPFF. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by State Statute, and vest after three years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated and Basic Plan 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 Plan member is 2.2% of average salary for each of the first 10 years of service and 2.7% for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first 10 years and 1.7% for each remaining year. Under Method 2, the annuity accrual rate is 2.7% of average salary for Basic Plan members and 1.7% for Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate is 3.0% for each year of service. For GERF and PEPFF members hired prior to July 1, 1989 whose annuity is calculated using Method 1, a full annuity is available when age plus years of service equal 90. Normal retirement age is 65 for Basic and Coordinated members hired prior to July 1, 1989. Normal retirement age is the age for unreduced Social Security benefits capped at 66 for coordinated members hired on or after July 1, 1989. A reduced retirement annuity is also available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A single -life 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 be 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. The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet, are bound by the provisions in effect at the time they last terminated their public service. PERA issues a publicly available financial report that includes financial statements and required supplementary information for GERF and PEPFF. That report may be obtained on the internet at www.mnpera.org, by writing to PERA at 60 Empire Drive #200, St. Paul, Minnesota, 55103 -2088 or by calling (651) 296 -7460 or 1- 800 - 652 -9026. 49 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 6 DEFINED BENEFIT PENSION PLANS — STATEWIDE (CONTINUED) B. FUNDING POLICY Minnesota Statutes, Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. GERF Basic Plan members and Coordinated Plan members are required to contribute 9.10% and 6.0% respectively, of their annual covered salary. PEPFF members were required to contribute 9.4% of their annual covered salary in 2010. The City is required to contribute the following percentages of annual covered payroll: 11.78% for Basic Plan members, 7.00% for Coordinated Plan members, and 14.1% for PEPFF members. The City's contributions to the General Employees Retirement Fund for the years ended December 31, 2010, 2009, and 2008 were $177,081, $186,454, and $183,456, respectively. The City's contributions to the Public Employees Police & Fire Fund for the years ended December 31, 2010, 2009, and 2008 were $280,046, $303,949, and $268,569, respectively. The City's contributions were equal to the contractually required contributions for each year as set by state statute. Note 7 METROPOLITAN COUNCIL ENVIRONMENTAL SERVICES 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 merged with the Metropolitan Council during 1994 to form Metropolitan Council Wastewater Services (MCWS) and is now called the Metropolitan Council Environmental Services (MCES). The MCES bills the City annually based upon estimated volume and budgeted costs. 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. Note 8 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY A. Deficit Fund Balances The City has deficit fund balances at December 31, 2010 as follows: Fund Balance Deficit Dedicated Parks $ (591,912) Tax Increment Financing 1 -11 (764,646) G.O. Improvement Bonds 2005A (1,093,765) Traffic Control (5,838) The City intends to fund these deficits through future tax levies, special assessment levies, tax increments, transfers from other funds, and various other sources. B. Expenditures in Excess of Budget The following is a listing of expenditure categories that exceed budget appropriations for non -major funds: Budget Actual • Excess Program Recreation Special Revenue Fund: Supplies $ 44,230 $ 66,336 $ (22,106) 50 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 9 CONTINGENCIES Tax Increment Districts — The City's tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they are not aware of any instances of noncompliance which could have a material effect on the financial statements. Litigation — The City attorney has indicated that existing and pending lawsuits, claims and other actions in which the City is a defendant are either covered by insurance; of an immaterial amount; or, in the judgment of the City attorney, remotely recoverable by plaintiffs. Federal and State Funds — The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31, 2010. Note 10 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, 2010. Future scheduled tax levies for all bonds outstanding at December 31, 2010 totaled $21,386,182. Note 11 DESIGNATIONS AND RESERVATIONS OF FUND EQUITY At December 31, 2010, 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, 2010 are shown on the various balance sheets as segregations of the fund equity. A summary of such designations and reservations at December 31, 2010 is as follows: Governmental Activity: General Fund: Reserved for Prepaid Items $ 181,471 Designated for Cash Flow Reserve 5,445,334 I35E Interchange : Designated for Capital Improvements 4,194,759 Area and Unit Charge: Reserved for Advance to Other Funds 658,875 Designated for Capital Improvements 2,920,035 Other Nonmajor Governmental Funds: Reserved for Prepaid Items 2,342 Reserved for Debt Retirement 2,986,102 Reserved for Environmental Improvements 100,000 Reserved for Long -Term Notes Receivable 225,000 Designated for Recreation Purposes 110,471 Designated for Capital Improvements 5,651,180 51 1 1 1 1 1 1 1 1 1 1 1 1 r 1 r 1 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 12 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 reported as revenue in the General Fund during fiscal year 2010 was $93,991. Note 13 INTERFUND RECEIVABLE AND PAYABLES The purpose of the interfund receivable and payable balances is for the elimination of negative cash between funds and at December 31, 2010 are as follows: Governmental Activity: G.O. Improvement Bonds 2005A 135E Interchange Other Nonmajor Governmental Funds Business -Type Activity: Sewer Fund Receivable s 1,376,681 559,111 Payable $ 1,093,765 76,250 765,777 $ 1,935,792 $ 1,935,792 Interfund receivable and payable balances not expected to be repaid within one year are reported as advances to and from other fund and at December 31, 2010 are as follows: Governmental Activity: Area and Unit Charge $ 658,875 $ Other Nonmajor Governmental Funds - 658,875 Receivable Payable $ 658,875 $ 658,875 The purpose of the advance from the Area and Unit Charge Fund is to temporarily finance projects in the Dedicated Parks Fund. Note 14 INTERFUND TRANSFERS Individual fund transfers for fiscal year 2010 are as follows: Transfer In Transfer Out Governmental Activity: General Fund $ - $ (612,699) Area and Unit Charge - (79,581) I35E Interchange (100,000) Other Nonmajor Governmental Funds 1,195,747 (335,345) Total Governmental Activity 1,195,747 (1,127,625) Business -Type Activity: Water Fund (34,061) Sewer Fund (34,061) Total Business -Type Activity (68,122) Total $ 1,195,747 $ (1,195,747) 52 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 14 INTERFUND TRANSFERS (CONTINUED) Interfund transfers are other financing sources and uses within the fund financial statements. The purpose of the transfers is to provide funding for capital improvement projects, capital outlay, and debt service as well as to open and close funds. In addition to the above transfers, the governmental activities contributed $75,200 of capital assets to the Water and Sewer funds. These are presented as transfers in the government -wide financial statements and as capital contributions in the Water and Sewer funds. Note 15 RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. Workers compensation coverage is provided through a pooled self - insurance program through the League of Minnesota Cities Insurance Trust (LMCIT). The City pays an annual premium to LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through Workers Compensation Reinsurance Association (WCRA) as required by law. For workers compensation, the City is not subject to a deductible. The City's workers compensation coverage is retrospectively rated. With this type of coverage, final premiums are determined after loss experience is known. The amount of premium adjustment, if any, is considered immaterial and not recorded until received or paid. Property and casualty insurance is provided through a pooled self - insurance program through the LMCIT. The City pays an annual premium to the LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through commercial companies for claims in excess of various amounts. The City retains risk for the deductible portion of the insurance policies and for any exclusions from the insurance policies. These amounts are considered immaterial to the financial statements. The City continues to carry commercial insurance for all other risks of loss, including disability and employee health insurance. There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years. Note 16 CONDUIT DEBT OBLIGATIONS The City has issued Industrial Development Revenue Bonds and Commercial Revenue Notes to provide financial assistance to private- sector entities for the acquisition and construction of industrial and commercial facilities which are deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private sector entity served by the bond issue. The City is not obligated in any manner for the repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2010, two series of Industrial Revenue Bonds were outstanding with aggregate remaining principal balances of $875,000 and $800,000, respectively, and one series of Commercial Revenue Notes was outstanding with an aggregate remaining principal balance of $2,824,585. 53 1 1 1 1 1 1 1 1 1 1 1 r 1 1 1 1 1 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 17 LEASE COMMITMENT The City of Lino Lakes entered into an agreement dated December 8, 1997 to lease space within the City Hall complex to the Independent School District No. 12 (ISD 12). The lease term has been renewed as of July 1, 2009 and continues through June 30, 2011 and requires payments of $110 per square foot over the lease term for a total of $300,000. The schedule of remaining payments is as follows: 2011 Amount $ 60,000 The prorated carrying value of the building being leased is as follows: Building $ 929,970 Less: Accumulated Depreciation (340,989), Net $ 588,981 Note 18 JOINT VENTURES Fire The Centennial Fire District (the District) was established under a joint powers agreement between the City of Lino Lakes and two other cities. The general purpose of the District is to provide fire protection services including, but not limited to, fire prevention, firefighting and rescue service. Each member city is entitled to appoint two commissioners to the District's Board. Each calendar year, participating cities are to pay the District its share of the total operating and capital budget in accordance with a funding formula contained in Section VII of the joint powers agreement. The funding formula takes into account each city's average number of calls, population, and total market value. During 2010, the City of Lino Lakes' contributions to the District were as follows: Operating $ 516,044 Capital 69,600 Total $ 585,644 Separate financial statements of the District can be obtained by contacting the Centennial Fire District. The audited condensed financial statements of the District as of December 31, 2010 are as follows: Total Assets $ 1,397,901 Total Liabilities 110,738 Total Net Assets 1,287,163 Total Operating Revenue 883,195 Total Operating Expenses 804,603 Anoka County The City of Lino Lakes has a joint powers agreement with Anoka County for the reconstruction of County State Aid Highway 14 (Main Street) and I -35E Interchange County Project. 54 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 19 OTHER POSTEMPLOYMENT BENEFIT PLAN At December 31, 2008, the City adopted Governmental Accounting Standards Board (GASB) Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions. The City engaged an actuary to determine the City's liability for postemployment healthcare benefits other than pensions as of January 1, 2008. A. Plan Description The City provides benefits for retirees as required by Minnesota Statute §471.61 subdivision 2b. Active employees, who retire from the City when over age 50 and with 20 years of service, may continue coverage with respect to both themselves and their eligible dependent(s) under the City's health benefits program until age 65. Pursuant to the provisions of the plan, retirees are required to pay the total premium cost. As of December 31, 2010 there were approximately 52 active participants and 5 retired participants receiving benefits from the City's health plans. B. Funding Policy The City funds its OPEB obligation on a pay as you go basis. For fiscal year 2010, the City contributed $21,851 to the plan. C. Annual OPEB Cost and Net OPEB Obligation The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any un- funded actuarial liabilities over a period not to exceed thirty years. The following table shows the components of the City's annual OPEB cost for the year, the amount actually paid from the plan, and changes in the City's net OPEB obligation. Annual Required Contribution Interest on Net OPEB Obligation Adjustment to Annual Required Contribution Annual OPEB Cost (Expense) Contributions Made Increase in Net OPEB Obligation Net OPEB Obligation- Beginning of Year Net OPEB Obligation- End of Year $ 41,152 1,789 (2,537) 40,404 (21,851) 18,553 44,734 $ 63,287 The City's annual OPEB cost, the percentage of the annual OPEB cost contributed to the plan, and the net OPEB obligation for 2010: Fiscal Annual Year OPEB Ended Cost 12/31/2008 $ 41,152 12/31/2009 41,152 12/31/2010 40,404 55 Percentage of Annual OPEB Cost Contributed 45.4% 45.9% 54.1% Net OPEB Obligation $ 22,481 44,734 63,287 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 r 1 f 1 1 1 1 1 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2010 Note 19 OTHER POST EMPLOYMENT BENEFIT PLAN (CONTINUED) D. Funded Status and Funding Progress As of January 1, 2008, the most recent actuarial valuation date, the City's unfunded actuarial accrued liability (UAAL) was $329,191. The annual payroll for active employees covered by the plan in the actuarial valuation was $4,859,980 for a ratio of UAAL to covered payroll of 6.8 %. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. E. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long -term perspective of the calculations. In the January 1, 2008 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 4% investment rate of return (net of administrative expenses), which is a blended rate of the expected long -term investment returns on plan assets and on the employer's own investments calculated based on the funded level of the plan at the valuation date. The initial healthcare trend rate was 9 %, reduced by decrements to an ultimate rate of 5% after nine years. The UAAL is being amortized as a level percentage of projected payrolls on an open basis. The remaining amortization period at December 31, 2010 was 27 years. 56 REQUIRED SUPPLEMENTARY INFORMATION 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF LINO LAKES, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2010 Statement 11 Page 1 of 7 Revenue: General property taxes: Current and delinquent $ 7,675,232 $ 6,621,032 $ 6,478,929 $ (142,103) Fiscal disparities 965,000 963,968 (1,032) Excess tax increments - 123,000 123,202 202 Total general property taxes 7,675,232 7,709,032 7,566,099 (142,933) Licenses and permits: Business 43,600 83,600 89,523 5,923 Non - business 354,150 242,150 240,615 (1,535) Total licenses and permits 397,750 325,750 330,138 4,388 Intergovernmental: Federal: Other State: Market Value Credit - - 3,907 3,907 Police state aid 185,000 185,000 181,398 (3,602) MSA maintenance 167,000 167,000 184,652 17,652 Other 183,323 183,323 202,030 18,707 County/Regional: Solid waste 35,000 35,000 33,641 (1,359) Other 5,000 5,000 4,153 (847) Total intergovernmental 575,323 575,323 609,781 34,458 Special Assessments: Penalties and Interest 5,000 5,000 10,172 5,172 Charges for services: General government 22,450 22,450 18,778 (3,672) Planning /engineering 10,000 10,000 14,148 4,148 Fees retained from collection for other governments - SAC /surcharge 3,000 3,000 977 (2,023) Administrative charge - other funds 50,000 50,000 50,000 Aerial map charge - other funds 4,000 4,000 (4,000) Public safety 251,000 264,000 280,702 16,702 Total charges for services 340,450 353,450 364,605 11,155 2010 Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) Fines and forfeits 130,000 130,000 127,203 (2,797) Investment earnings 93,000 53,000 45,811 (7,189) Refunds 15,000 25,000 26,841 1,841 Miscellaneous: Gas franchise fees 120,000 120,000 93,991 (26,009) Cable TV 55,000 55,000 56,934 1,934 Donations 5,000 5,000 176 (4,824) Other - - 1,741 1,741 Total miscellaneous 180,000 180,000 152,842 (27,158) Total Revenue 9,411,755 9,356,555 9,233,492 (123,063) 57 1 CITY OF LINO LAKES, MINNESOTA Statement 11 GENERAL FUND Page 2 of 7 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2010 2010 Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) IExpenditures: General government: Mayor and council: Current: I Personal services $ 40,719 $ 40,719 $ 33,342 $ 7,377 Other services and charges 30,800 43,800 41,340 2,460 Contractual Services 14,792 14,792 14,373 419 I Total mayor and council 86,311 99,311 89,055 10,256 Elections: Current: Personal services 19,605 19,605 17,192 2,413 Supplies 250 250 625 (375) Other services and charges 3,250 3,250 1,396 1,854 Contractual Services 500 500 500 I Total elections 23,605 23,605 19,213 4,392 Administration: Current: I Personal services 440,638 345,438 337,769 7,669 Supplies - 86 (86) Other services and charges 22,420 22,420 9,848 12,572 I Contractual Services 3,400 3,400 4,698 (1,298) Total administration 466,458 371,258 352,401 18,857 Finance: Current: Personal services 296,907 296,907 275,476 21,431 Supplies 1,500 1,500 1,148 352 Other services and charges 103,325 103,325 94,323 9,002 I Contractual Services 85,900 85,900 102,018 (16,118) Total finance 487,632 487,632 472,965 14,667 Cable TV: I Current: Personal services 2,530 2,530 1,639 891 Supplies 50 50 - 50 I Total cable TV 2,580 2,580 1,639 941 Consultants: Current: Legal 160,000 170,000 170,206 (206) 1 1 58 1 CITY OF LINO LAKES, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2010 Statement 11 Page 3 of 7 2010 Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) General government (continued): Engineering /planning: Current: Contractual services $ 216,500 $ 166,500 $ 174,470 $ (7,970) Total engineering /planning 216,500 166,500 174,470 (7,970) Senior Service: Current: Personal services 33,354 33,354 33,420 (66) Other services and charges 1,600 1,600 2,107 (507) Capital outlay: 500 500 - 500 Total senior service 35,454 35,454 35,527 (73) Charter commission: Current: Other services and charges 1,500 1,500 1,475 25 Total charter commission 1,500 1,500 1,475 25 General government buildings: Current: Personal services 90,766 90,766 81,509 9,257 Supplies 42,500 42,500 33,822 8,678 Other services and charges 340,880 340,880 273,979 66,901 Contractual services 25,000 25,000 19,610 5,390 Total general government buildings 499,146 499,146 408,920 90,226 Total general government 1,979,186 1,856,986 1,725,871 131,115 59 CITY OF LINO LAKES, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2010 Statement 11 Page 4 of 7 Public safety: Police: Current: Personal services Supplies Other services and charges Contractual services Capital outlay Total police Fire protection: Current: Contractual services Building inspection: Current: Personal services Supplies Other services and charges Contractual services Total building inspection Total public safety Public works: Streets: Current: Personal services Supplies Other services and charges Contractual services Total streets Fleet: Current: Personal services Supplies Other services and charges Contractual services Total fleet Total public works 2010 Original Budget Final Budget $ 3,069,357 $ 2,979,357 28,500 32,500 80,000 83,000 37,000 37,000 9,500 9,500 3,224,357 3,141,357 516,045 516,045 Variance with Final Budget Positive Actual (Negative) $ 2,943,059 31,335 88,441 34,443 7,890 3,105,168 516,044 191,780 191,780 173,910 1,130 1,130 324 13,500 13,500 10,250 1,150 1,150 300 207,560 207,560 184,784 3,947,962 3,864,962 3,805,996 533,349 105,500 87,900 172,500 899,249 538,349 105,500 97,900 172,500 914,249 100,608 110,608 264,000 214,000 56,070 56,070 2,700 2,700 423,378 383,378 1,322,627 1,297,627 60 553,818 93,406 101,016 177,371 925,611 115,687 204,439 36,893 1,889 358,908 1,284,519 $ 36,298 1,165 (5,441) 2,557 1,610 36,189 1 17,870 806 3,250 850 22,776 58,966 (15,469) 12,094 (3,116) (4,871) (11,362) (5,079) 9,561 19,177 811 24,470 13,108 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF LINO LAKES, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2010 Parks and recreation: Parks: Current: Personal services Supplies Other services and charges Contractual services Total parks Recreation: Current: Personal services Supplies Other services and charges Contractual services Total recreation Total parks and recreation Conservation of natural resources: Forestry: Current: Personal services Supplies Other services and charges Contractual services Capital outlay Total forestry Environmental: Current: Personal services Supplies Other services and charges Contractual services Total environmental Statement 11 Page 5 of 7 2010 Original Budget $ 431,263 27,000 52,700 30,950 541,913 263,421 2,500 16,600 800 283,321 825,234 50,515 1,250 800 7,500 5,000 65,065 85,105 1,500 9,480 1,050 97,135 61 Final Budget Actual $ 441,263 $ 27,000 52,700 30,950 551,913 273,421 2,500 16,600 800 293,321 845,234 50,515 1,250 800 7,500 5,000 65,065 85,105 1,500 9,480 1,050 97,135 439,193 19,601 45,965 7,070 511,829 256,734 2,991 12,338 1,570 273,633 785,462 49,456 906 735 1,078 2,151 54,326 81,988 623 5,681 47 88,339 Variance with Final Budget Positive (Negative) $ 2,070 7,399 6,735 23,880 40,084 16,687 (491) 4,262 (770) 19,688 59,772 1,059 344 65 6,422 2,849 10,739 3,117 877 3,799 1,003 8,796 CITY OF LINO LAKES, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2010 2010 Statement 11 Page 6 of 7 Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) Conservation of natural resources (continued): Solid waste abatement: Current: Personal services $ 29,925 $ 29,925 $ 28,638 $ 1,287 Other services and charges 550 550 - 550 Contractual services 6,000 6,000 5,910 90 Total solid waste abatement 36,475 36,475 34,548 1,927 Total conservation of natural resources 198,675 198,675 177,213 21,462 Community Development: Community Development: Current: Personal services 215,100 215,100 214,284 816 Supplies 100 100 - 100 Other services and charges 9,030 19,030 14,576 4,454 Contractual Services 1,300 1,300 1,399 (99) Total community development 225,530 235,530 230,259 5,271 Economic Development: Current: Personal services 87,651 87,651 86,451 1,200 Supplies 150 150 13 137 Other services and charges 11,200 51,200 45,569 5,631 Contractual services 400 400 535 (135) Total economic development 99,401 139,401 132,568 6,833 Planning and zoning commission: Current: Personal services 166,289 166,289 167,713 (1,424) Supplies 250 250 250 Other services and charges 18,400 18,400 10,220 8,180 Contractual services 46,350 46,350 62,131 (15,781) Total planning and zoning commission 231,289 231,289 240,064 (8,775) Total community development 556,220 606,220 602,891 3,329 Other : Contingency 74,351 74,351 - 74,351 Total Expenditures 8,904,255 8,744,055 8,381,952 362,103 Revenue over Expenditures 507,500 612,500 851,540 239,040 62 CITY OF LINO LAKES, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2010 Statement 11 Page 7 of 7 2010 Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) Other financing sources (uses): Transfer out $ (557,500) $ (612,500) $ (612,699) $ (199) Net increase (decrease) in fund balance $ $ 238,841 $ 238,841 Fund Balance - January 1 5,387,964 Fund balance - December 31 $ 5,626,805 63 CITY OF LINO LAKES, MINNESOTA NOTE TO REQUIRED SUPPLEMENTARY INFORMATION December 31, 2010 Note 1 BUDGETS The General Fund budget is legally adopted on a basis consistent with U.S. Generally Accepted Accounting Principles. The legal level of budgetary control is at the department level. The following is a listing of expenditures that exceeded budget appropriations. Final Budget Actual Actual in Excess of Budget General Fund: General government: Legal $ 170,000 $ 170,206 $ (206) Engineering /planning 166,500 174,470 (7,970) Senior service 35,454 35,527 (73) Public works: Streets 914,249 925,611 (11,362) Community development: Planning and zoning commission 231,289 240,064 (8,775) 64 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF LINO LAKES, MINNESOTA SCHEDULE OF FUNDING PROGRESS FOR POSTEMPLOYMENT BENEFIT PLAN December 31, 2010 1 Statement 12 Actuarial UAAL as a Actuarial Accrued Percentage Actuarial Value of Liability Unfunded Funded Covered of Covered Valuation Assets (AAL) AAL Ratio Payroll Payroll Date (a) (b) (b -a) (a/b) (c) ((b -a) /c) 1/1/2008 $ $ 329,191 $ 329,191 - $ 4,859,980 6.8% 65 Nonmaj or Governmental Funds Special Revenue Funds Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for particular purposes. The City maintained the following nonmajor Special Revenue Funds during the year. Economic Development Authority - established to account for the receipt and uses of funds for economic purposes. Program Recreation - established to account for various self - supporting recreational programs. Debt Service Funds The Debt Service Funds account for the accumulation of resources for, and the payment of, interest, principal and related costs on general long -term debt. The City's Debt Service Funds account for three types of bonded indebtedness: General Debt Bonds - are repaid primarily from property taxes. Improvement Bonds - are repaid primarily from special assessments. Public Facility Lease Revenue Bonds - are repaid primarily from lease revenues received from the EDA leasing the buildings to the City of Lino Lakes and other tenants. Capital Project Funds Capital Project Funds account for the acquisition or construction of major capital facilities other than those financed by Proprietary Funds and Trust Funds. The City maintained the following nonmajor Capital Project Funds during the year: Capital Improvement Projects - to account for the proceeds from Equipment Certificates. Capital Equipment Revolving Fund - to account for funds held to purchase capital equipment. Closed Bond Fund - to account for excess funds from matured bond issues. Street Reconstruction - to account for the financing of future reconstruction of City streets. Sealcoating - to account for money received from assessments and developer deposits for future street sealcoating projects. Surface Water Management - to account for the financing of surface water management and storm water improvements. Legacy Woods Edge Improvement Fund — the Legacy Woods Edge Improvement fund accounts for construction costs related to infrastructure improvements in the Legacy Woods Edge development. Tax Increment Funds - to account for development projects financed with tax increments. 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Capital Project Funds (Continued) Birch Street Hodgson Road Improvement Fund - to account for costs to improve the intersection at Birch Street and Hodgson Road. Dedicated Parks - to account for the receipts and use of monies collected from dedicated parks fees. Municipal State Aid - to account for the collection of assessments on municipal state aid projects. Office Equipment Revolving Fund - to account for the receipt and use of funds for office equipment purchases. Traffic Signal — to account for costs associated with construction of traffic signals in the City. Permanent Funds Permanent Funds are used to report resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support the City's programs. The City maintained the following nonmajor Permanent Fund during the year. Foxborough Environment Fund - established to account for the use of funds received for environmental maintenance and improvements in the Foxborough area. CITY OF LINO LAKES, MINNESOTA COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS December 31, 2010 Assets Special Revenue Debt Service Lease Public Project Economic Special Certificates Revenue Refunding Development Program Revenue of Bonds Bonds Authority Recreation Subtotal Indebtedness of 1998A of 1999C Cash and investments $ - $ 124,494 $ 124,494 $ 121,716 $ 486,798 $ 270,684 Accounts receivable - 1,147 1,147 - Due from other governmental units - Interfund receivable Taxes receivable: Delinquent - 10,126 3,950 2,666 Due from county 3,532 726 488 Special assessments receivable: Delinquent _ Deferred Due from county - Long -term notes receivable 225,000 - 225,000 Prepaid items 2,342 2,342 Total assets $ 225,000 $ 127,983 $ 352,983 $ 135,374 $ 491,474 $ 273,838 Liabilities and Fund Balance Liabilities: Interfund payable Accounts payable Salaries payable Contracts and retainage payable Due to other governments Advances from other funds Deferred revenue Total liabilities $ - $ - $ $ 14,939 14,939 - - 231 231 10,126 3,950 2,666 15,170 15,170 10,126 3,950 2,666 Fund balance (deficit): Reserved for prepaid items 2,342 2,342 - Reserved for debt retirement - 125,248 487,524 271,172 Reserved for environmental improvement - - Reserved for long -term notes receivable 225,000 225,000 Unreserved: Designated: Recreation programs 110,471 110,471 Capital improvements - - Undesignated Total fund balance (deficit) 225,000 112,813 337,813 125,248 487,524 271,172 Total liabilities and fund balance $ 225,000 $ 127,983 $ 352,983 $ 135,374 $ 491,474 $ 273,838 66 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Statement 13 Page 1 of 3 Debt Service (Continued) Improvement Improvement and Tax Improvement Improvement Refunding Improvement Utility Revenue Improvement Abatement Bonds of Bonds of Bonds of Bonds of Bonds of Bonds of Bonds 2002A 2002B 2003A 2003B 2004A 2005B 2006C $ 243,523 $ 647,720 $ 122,469 $ 63,541 $ 215,188 $ 262,158 $ 83,127 1,115 6,058 6,138 298 1,607 1,696 - - 11,737 5,933 2,892 62,986 206,249 139,173 35,041 132,356 215,336 - 87 927 $ 306,509 S 853,969 $ 261,729 $ 111,732 $ 353,477 $ 488,978 $ 90,961 S - $ $ - $ $ $ $ 62,986 206,249 139,173 47,893 138,289 224,286 6,138 62,986 206,249 139,173 47,893 138,289 224,286 6,138 243,523 647,720 122,556 63,839 215,188 264,692 84,823 243,523 647,720 122,556 63,839 215,188 264,692 84,823 306,509 $ 853,969 $ 261,729 $ 111,732 $ 353,477 $ 488,978 $ 90,961 CITY OF LINO LAKES, MINNESOTA COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS December 31, 2010 1 1 Debt Service (continued) Utility CIP Improvement and Revenue Refunding TIF Improvement Utility Revenue Debt Bonds Bonds Bonds Bonds Refunding Bonds Service 2006D 2006E 2007A 2009A 2010 Subtotal Assets Cash and investments $ 50,974 $ 244,784 $ 155,088 $ 425 $ 4,945 $ 2,973,140 Accounts receivable - - Due from other governmental units _ - Interfund receivable - _ - Taxes receivable: Delinquent 12,632 - 42,685 i Due from county 3,601 - 11,948 Special assessments receivable: Delinquent 2,694 - 23,256 Deferred 138,103 - - 929,244 ' Due from county - 1,014 Long -term notes receivable Prepaid items Total assets $ 191,771 $ 261,017 $ 155,088 $ 425 $ 4,945 $ 3,981,287 Liabilities and Fund Balance Liabilities: Interfund payable $ $ _ $ $ - $ $ Accounts payable Salaries payable Contracts and retainage payable Due to other governments Advances from other funds Deferred revenue 140,797 12,632 995,185 Total liabilities 140,797 12,632 - 995,185 Fund balance (deficit): Reserved for prepaid items - - _ - Reserved for debt retirement 50,974 248,385 155,088 425 4,945 2,986,102 Reserved for environmental improvement - - - - , Reserved for long -tern notes receivable _ - Unreserved: Designated: Recreation programs Capital improvements Undesignated Total fund balance (deficit) 50,974 248,385 155,088 425 4,945 2,986,102 Total liabilities and fund balance $ 191,771 $ 261,017 $ 155,088 $ 425 $ 4.945 $ 3,981,287 , 68 1 1 1 1 1 Statement 13 Page 2 of 3 Capital Projects Capital Capital Closed Surface Birch Street Improvement Equipment Bond Street Water Hodgson Road Projects Revolving Fund Fund Reconstruction Sealcoating Management Improvement $ 1,416,151 $ 286,637 $ 292,067 $ 538,252 $ 445,003 $ 276,610 $ 15,383 14,647 - - - - - - - - - 1,500 534,485 842,196 - - - 1,729 - 26,814 - - 8,037 145,412 248,596 - - - - 29,221 $ 1,965,283 $ 286,637 $ 1,144,029 $ 683,664 $ 445,003 $ 582,741 $ 15,383 $ - $ - $ $ - $ - $ - $ 11,536 46,182 - 474 1,002 58 - - 13,293 - - 9,766 145,412 - 275,410 11,536 46,182 9,766 145,886 14,295 275,468 1,953,747 240,455 - 537,778 430,708 307,273 15,383 - - 1,134,263 - - - - 1,953,747 240,455 1,134,263 537,778 430,708 307,273 15,383 $ 1,965,283 $ 286,637 $ 1,144,029 $ 683,664 $ 445,003 $ 582,741 $ 15,383 1 CITY OF LINO LAKES, MINNESOTA COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS December 31, 2010 Capital Projects (continued) 1 Tax Tax Tax Tax Increment Increment Increment Increment Financing Financing Financing Financing Dedicated Municipal 1 -5 1 -9 1 -10 1 -11 Parks State Aid Assets Cash and investments $ 55,668 $ $ 135,900 $ $ 66,963 $ 1,251,484 Accounts receivable - - Due from other govemmental units Interfund receivable - - Taxes receivable: Delinquent - - - - Due from county - Special assessments receivable: Delinquent - Deferred Due from county - - - Long -term notes receivable - - - Prepaid items - Total assets S 55,668 $ - $ 135,900 $ $ 66,963 $ 1,251,484 Liabilities and Fund Balance Liabilities: Interfund payable $ $ - $ - $ 761,593 $ $ Accounts payable 567 - Salaries payable - - - Contracts and retainage payable - Due to other govemments - - 49,462 2,486 Advances from other funds - - 658,875 - Deferred revenue - Total liabilities 49,462 764,646 658,875 Fund balance (deficit): Reserved for prepaid items - Reserved for debt retirement - - Reserved for environmental improvement - - - Reserved for long -term notes receivable - Unreserved: Designated: Recreation programs - - - Capital improvements 55,668 86,438 1,251,484 Undesignated - - - (764,646) (591,912) - Total fund balance (deficit) 55,668 86,438 (764,646) (591,912) 1,251,484 Total liabilities and fund balance $ 55,668 $ $ 135,900 $ - $ 66,963 $ 1,251,484 Statement 13 Page 3 of 3 Capital Projects (Continued) Permanent Fund Office Equipment Legacy Woods Capital Foxborough Revolving Edge Traffic Projects Environment Total Fund Improvement Signal Subtotal Fund 2010 $ 250,142 $ 522,104 $ $ 5,552,364 $ 112,676 $ 8,762,674 - - 14,647 15,794 - 1,500 1,500 - - 1,376,681 1,376,681 42,685 11,948 - 28,543 - 51,799 - - 402,045 1,331,289 - - 29,221 30,235 225,000 2,342 $ 250,142 $ 522,104 $ $ 7,405,001 $ 112,676 $ 11,851,947 $ $ - $ 4,184 $ 765,777 $ - $ 765,777 1,654 61,473 76,412 - 231 - 13,293 - 13,293 51,948 - 51,948 - 658,875 658,875 - 430,588 1,425,773 5,838 1,981,954 2,992,309 2,342 - 2,986,102 100,000 100,000 225,000 - - 110,471 250,142 522,104 5,651,180 - 5,651,180 (5,838) (228,133) 12,676 (215,457) 250,142 522,104 (5,838) 5,423,047 112,676 8,859,638 $ 250,142 $ 522,104 $ - $ 7,405,001 $ 112,676 $ 11,851,947 CITY OF LINO LAKES, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS Year Ended December 31, 2010 1 Special Revenue Debt Service 1 Lease Public Project Economic Special Certificates Revenue Refunding Development Program Revenue of Bonds Bonds Authority Recreation Subtotal Indebtedness of 1998A of 1999C Revenue: General property taxes $ $ $ - $ 255,805 $ 2,393 $ 1,607 Tax increments - - Intergovernmental - _ - - - Special assessments - 259 134 88 Charges for services - 175,485 175,485 - - Investment earnings - 1,555 1,555 1,948 4,293 3,281 Miscellaneous - - - 120,000 - Total revenue - 177,040 177,040 258,012 126,820 4,976 Expenditures: , Current: General government 198 198 - - Public works - - Parks, recreation and forestry 160,359 160,359 _ Conservation of natural resources Community development - - - Capital outlay: General government Public safety _ Public works Debt service: Principal 231,000 115,000 90,000 Interest and fiscal charges 25,117 4,600 2,733 Total expenditures 198 160,359 160,557 256,117 119,600 92,733 Revenue over (under) expenditures (198) 16,681 16,483 1,895 7,220 (87,757) Other financing sources (uses): Transfer in 198 198 Transfer out _ Sale of property Issuance of debt Premium on bonds issued _ Payment made to refunding bond escrow agent Total other financing sources(uses) 198 198 Net increase (decrease) in fund balance 16,681 16,681 1,895 7,220 (87,757) I Fund balance (deficit) Beginning of year 225,000 96,132 321,132 123,353 480,304 358,929 Fund balance (deficit) - December 31 $ 225,000 $ 112,813 $ 337,813 $ 125,248 $ 487,524 $ 271,172 72 1 1 1 1 Statement 14 Page 1 of 3 Debt Service (Continued) Improvement Improvement and Tax Improvement Improvement Refunding Improvement Utility Revenue Improvement Abatement Bonds of Bonds of Bonds of Bonds of Bonds of Bonds of Bonds 2002A 2002B 2003A 2003B 2004A 2005B 2006C $ - $ $ $ 22,336 $ $ 118,014 $ 132,713 19,915 114,075 26,645 24 19,454 67,038 120 2,732 7,025 537 610 4,103 2,695 248 22,647 121,100 27,182 22,970 23.557 187,747 133,081 25,000 225,000 55,000 25,000 75,000 420,000 4,800 47,258 25,451 7,754 35,555 103,903 104,291 29,800 272,258 80,451 32,754 110,555 523,903 104,291 (7,153) (151,158) (53,269) (9,784) (86,998) (336,156) 28,790 79,581 980,307 (965,000) 79,581 15,307 (7,153) (151,158) 26,312 (9,784) (71,691) (336,156) 28,790 250,676 798,878 96,244 73,623 286,879 600,848 56,033 $ 243,523 $ 647,720 $ 122,556 $ 63,839 $ 215,188 $ 264,692 $ 84,823 CITY OF LINO LAKES, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS Year Ended December 31, 2010 Revenue: General property taxes Tax increments Intergovernmental Special assessments Charges for services Investment eamings Miscellaneous Total revenue Expenditures: Current: General government Public works Parks, recreation and forestry Conservation of natural resources Community development Capital outlay: General government Public safety Public works Debt service: Principal 50,000 80,000 175,000 - 1,566,000 Interest and fiscal charges 18,992 118,869 160,296 99,575 26,264 785,458 Total expenditures 68,992 198,869 335,296 99,575 26,264 2,351,458 Revenue over (under) expenditures (51,984) 106,677 (335,296) (99,575) (25,728) (1,100,276) Debt Service (Continued) Utility CIP Improvement and Revenue Refunding TIF Improvement Utility Revenue Debt Bonds Bonds Bonds Bonds Refunding Bonds Service 2006D 2006E 2007A 2009A 2010 Subtotal $ 304,576 $ - $ $ $ 837,444 17,008 232 264,992 738 536 28,746 120,000 17,008 305,546 536 1,251,182 Other financing sources (uses): Transfer in 68,122 335,346 100,000 583,049 Transfer out - Sale of property Issuance of debt 19,693 1,000,000 Discount on bonds issued Premium on bonds issued 10,980 10,980 Payment made to refunding bond escrow agent - (965,000) Total other financing sources (uses) 68,122 335,346 100,000 30,673 629,029 Net increase (decrease) in fund balance 16,138 106,677 50 425 4,945 (471,247) Fund balance (deficit) Beginning of year 34,836 141,708 155,038 3,457,349 Fund balance (deficit) - December 31 $ 50,974 $ 248,385 $ 155,088 $ 425 $ 4,945 $ 2,986,102 74 Statement 14 Page 2 of 3 Capital Projects Capital Capital Closed Surface Birch Street Improvement Equipment Bond Street Water Hodgson Road Projects Revolving Fund Fund Reconstruction Sealcoating Management Improvement $ - $ - $ - $ $ - $ - $ - 2,892 24,235 231 91,397 20,936 3,833 12,085 7,329 7,000 2,749 176 192,522 2,651 - - - - 213,458 6,484 14,977 31,564 7,231 94,146 176 2,324 22,549 94,277 178,405 1,997 155,716 386,982 29,695 24,873 272,682 1,997 155,716 386,982 29,695 188,585 (266,198) 12,980 (124,152) (379,751) 64,451 176 110,000 422,500 20,600 170,000 300,600 422,500 188,585 34,402 12,980 (124,152) 42,749 64,451 176 1,765,162 206,053 1,121,283 661,930 387,959 242,822 15,207 $ 1,953,747 $ 240,455 $ 1,134,263 $ 537,778 $ 430,708 $ 307,273 $ 15,383 CITY OF LINO LAKES, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS Year Ended December 31, 2010 Capital Projects (Continued) Tax Increment Tax Increment Tax Increment Tax Increment Financing Financing Financing Financing Dedicated Municipal 1 -5 1 -9 1 -10 1 -11 Parks State Aid Revenue: General property taxes $ - $ $ - $ - $ $ - Tax increments 40,970 137,975 65,000 Intergovernmental - - 567,082 Special assessments - Charges for services - - Investment earnings 619 1,117 1,243 15,810 Miscellaneous - - 2,436 - Total revenue 41,589 - 139,092 65,000 3,679 582,892 1 1 1 Expenditures: Current: General government: - Public works Parks, recreation and forestry _ C II onservation of natural resources Community development 36,905 351,910 99,143 7,833 Capital outlay: General government Public safety Public works _ Debt service: Principal - Interest and fiscal charges 22,103 Total expenditures 36,905 351,910 99,143 7,833 22,103 Revenue over (under) expenditures 4,684 (351,910) 39,949 57,167 (18,424) 582,892 Other financing sources (uses): Transfer in 55,000 Transfer out 38,178 Sale of property out ( 38,178) (55,167) (242,000) Issuance of debt Premium on bonds issued Payment made to refunding bond escrow agent Total other financing sources (uses) (38,178) (55,167) 55,000 (242,000) Net increase (decrease) in fund balance 4,684 (351,910) 1,771 2,000 36,576 340,892 Fund balance (deficit) Beginning of year 50,984 351,910 84,667 (766,646) (628,488) 910,592 Fund balance (deficit) - December 31 $ 55,668 $ - $ 86,438 $ (764,646) $ (591,912) $ 1,251,484 76 1 1 1 1 Statement 14 Page 3 of 3 Capital Projects (Continued) Permanent Fund Office Equipment Legacy Woods Capital Foxborough Revolving Edge Traffic Projects Environment Total Fund Improvement Signal Subtotal Fund 2010 $ - $ - $ $ - $ - $ 837,444 243,945 243,945 567,082 567,082 118,755 383,747 - - - 175,485 2,807 5,995 81,699 1,322 113,322 - - 197,609 5,700 323,309 2,807 5,995 1,209,090 7,022 2,644,334 - 4,321 - 4,519 4,328 5,838 605,108 605,108 - - - 160,359 10,170 10,170 - - 495,791 - 495,791 215 - 215 - 215 - - 94,277 94,277 178,405 178,405 1,566,000 22,103 807,561 215 4,328 5,838 1,400,220 10,170 3,922,405 2,592 1,667 (5,838) (191,130) (3,148) (1,278,071) 25,000 612,500 - 1,195,747 - - (335,345) (335,345) 20,600 - 20,600 - 170,000 - 1,170,000 10,980 - - - (965,000) 25,000 - 467,755 1,096,982 27,592 1,667 (5,838) 276,625 (3,148) (181,089) 222,550 520,437 5,146,422 115,824 9,040,727 $ 250,142 $ 522,104 $ (5,838) $ 5,423,047 $ 112,676 $ 8,859,638 CITY OF LINO LAKES, MINNESOTA SPECIAL REVENUE FUND - PROGRAM RECREATION SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2010 Statement 15 Revenue: Charges for services: Recreation Fees Investment earnings Total revenue 2010 Original Final Budget Budget Actual Variance with Final Budget Positive (Negative) $ 156,105 $ 156,105 $ 175,485 $ 19,380 1,555 1,555 156,105 156,105 177,040 20,935 Expenditures: Current: Personal services 90,800 90,800 89,485 1,315 Supplies 44,230 44,230 66,336 (22,106) Other services and charges 6,000 6,000 831 5,169 Contractual services 12,050 12,050 3,707 8,343 Capital outlay 3,000 3,000 3,000 Total expenditures 156,080 156,080 160,359 (4,279) Net increase (decrease) in fund balance $ 25 $ 25 16,681 $ 16,656 Fund balance - January 1 96,132 Fund balance - December 31 $ 112,813 78 Fiduciary Funds Agency Fund Agency Funds are used to account for assets held by the City as an agent for individuals, private organizations, or other governments. The City maintained the following Agency fund during the year: Contractor's Deposits — to account for pass- through costs relating to prospective developers. CITY OF LINO LAKES, MINNESOTA Statement 16 STATEMENT OF CHANGES IN ASSETS AND LIABILITIES - FIDUCIARY FUNDS - AGENCY FUNDS Year Ended December 31, 2010 Assets Cash and investments Deposits receivable Total assets Liabilities Balance Balance January 1, December 31, 2010 Additions Deductions 2010 $ 773,845 $ 131,724 $ 152,062 $ 753,507 10,520 750 10,520 750 $ 784,365 $ 132,474 $ 162,582 $ 754,257 Accounts payable $ 3,700 $ 140,314 $ 130,960 $ 13,054 Deposits payable 780,665 94,082 133,544 741,203 Total Liabilities $ 784,365 $ 234,396 $ 264,504 $ 754,257 79 1 1 1 1 1 1 1 1 1 r 1 1 1 1 1 1 1 1 SUPPLEMENTARY FINANCIAL INFORMATION CITY OF LINO LAKES, MINNESOTA COMBINED SCHEDULE OF INDEBTEDNESS December 31, 2010 Exhibit 1 Interest Rates Dated Final Maturity Date General Obligation Bonds: 2007A Equipment Certificates 4.00% 2/1/07 12/31/2010 2008A Equipment Certificates 4.00% 2/1/08 12/31/2011 2009A Equipment Certificates 3.00% 4/1/2009 12/31/2012 2010A Equipment Certificates 2.00 % -3.00% 4/1/10 12/31/2013 Civic Complex Lease Revenue Bonds, Series 1998A 4.20 % -5.35% 8/1/98 2/1/19 Public Project Revenue Refunding Bonds, Series 1999C 4.75 % -5.10% 9/1/99 2/1/10 G.O. Tax Abatement Bonds, Series 2006C 4.00% -4.30% 8/15/06 2/1/23 G.O. Utility Revenue Bonds, Series 2006D 4.00 % -4.15% 8/15/06 2/1/17 G.O. CIP Refunding Bonds, Series 2006E 4.00% 11/1/06 2/1/18 G.O. Tax Increment Bonds, Series 2007A 4.00 % - 4.125% 7/15/2007 2/1/2024 Total General Obligation Bonds Special Assessment Bonds: G. O. Improvement Bonds of 2002A G. O. Improvement Bonds of 2002B G. O. Improvement Refunding Bonds of 2003A G. O. Improvement Bonds of 2003B G. O. Improvement and Utility Bonds of 2004A G. O. Improvement Bonds of 2005A G. O. Improvement Refunding Bonds of 2005B G.O. Improvement & Utility Revenue Refunding Bonds, Series 2010A Total General Improvement Bonds with special assessments pledged Revenue Bonds: G. O. Water Utility Revenue Refunding Bonds of 2006F Total Revenue Bonds Other Long -Term Debt: Note Payable - Anoka County Total City indebtedness 80 3.00 % -4.10% 8/1/02 2/1/13 3.20 % -5.55% 8/1/02 2/1/13 2.00 % -4.25% 12/1/03 2/1/19 3.20 % -5.60% 12/1/03 2/1/14 1.90 % -4.45% 11/15/04 2/1/20 4.35 % -5.15% 11/1/05 2/1/21 3.75 % -5.00% 11/1/05 2/1/15 2.00 % -3.00% 7/9/10 2/1/20 3.55 % - 3.625% 11/1/06 2/1/12 4.00 % -3.70% 8/01/09 8/1/24 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Exhibit 1 Prior Years Principal Interest Original Payable 2010 Payable Due Due Issue Payments 1 /1 /10 Issued Payments 12/31/10 In 2010 In 2010 $ 160,000 $ 105,000 $ 55,000 $ 209,000 63,000 146,000 336,000 336,000 170,000 - 5,350,000 5,235,000 115,000 980,000 890,000 90,000 2,460,000 - 2,460,000 570,000 100,000 470,000 2,990,000 - 2,990,000 4,215,000 165,000 4,050,000 17,440,000 6,558,000 10,712,000 645,000 535,000 110,000 2,110,000 1,135,000 975,000 2,090,000 1,430,000 660,000 250,000 100,000 150,000 1,330,000 290,000 1,040,000 5,550,000 755,000 4,795,000 3,755,000 1,220,000 2,535,000 1,000,000 - 16,730,000 5,465,000 10,265,000 1,740,000 1,740,000 570,000 1,170,000 570,000 1,170,000 4,260,000 4,260,000 170,000 170,000 1,000,000 1,000,000 $ 55,000 $ - $ - $ - 72,000 74,000 74,000 2,960 104,000 232,000 114,000 6,960 - 170,000 52,000 9,775 115,000 - - 90,000 - - 2,460,000 30,000 102,820 50,000 420,000 50,000 16,122 80,000 2,910,000 305,000 110,300 175,000 3,875,000 215,000 151,626 741,000 10,141,000 840,000 400,563 25,000 85,000 25,000 2,930 225,000 750,000 235,000 34,310 55,000 605,000 60,000 22,638 25,000 125,000 30,000 5,950 1,040,000 - - 300,000 4,495,000 315,000 219,110 420,000 2,115,000 425,000 87,219 1,000,000 100,000 29,625 2,090,000 9,175,000 1,190,000 401,782 375,000 795,000 390,000 21,701 375,000 795,000 390,000 21,701 4,260,000 - 153,410 $ 40,170,000 $ 12,593,000 $ 26,407,000 $ 1,170,000 $ 3,206,000 $ 24,371,000 $ 2,420,000 $ 977,456 81 CITY OF LINO LAKES, MINNESOTA SCHEDULE OF DEFERRED TAX LEVIES December 31, 2010 Public Lease Project G. 0. Year of Equipment Equipment Equipment Revenue Refunding Improvement Levy/ Certificates Certificates Certificates Bonds Bonds Bonds Collection of 2008A of 2009A of 2010A of 1998A 1999C of 2002A 2010/2011 $ 80,808 $ 127,008 $ 64,864 $ - $ - $ 9,645 2011/2012 - 127,617 64,617 8,385 2012/2013 64,890 - 2013/2014 2014/2015 - 2015/2016 - 2016/2017 2017/2018 - 2018/2019 2019/2020 2020/2021 2021/2022 2022/2023 2023/2024 $ 80,808 $ 254,625 $ 194,371 $ S - $ 18,030 82 1 Exhibit 2 1 1 G. O. G. O. Improvement Improvement Bonds Bonds of 2003B of 2005A $ 23,524 $ 568,297 21,917 566,722 20,248 569,609 23,781 566,197 567,247 572,497 571,184 574,072 574,907 579,639 _ 1 $ 89,470 $ 5,710,371 1 1 1 1 1 1 1 1 1 1 Exhibit 2 G.O. G.O. G.O. G.O. Improvement Tax CIP G. 0. Improvement Refunding Abatement Refunding TIF and Utility Revenue Bonds Bonds Bonds Bonds Refunding Bonds of2005B 2006C 2006E 2007A 2010A Total $ 524,213 $ 196,581 $ 445,410 $ 389,473 $ 123,375 $ 2,553,198 512,925 235,011 468,720 432,943 114,713 2,553,570 490,613 245,511 459,060 442,813 123,427 2,416,171 463,050 255,381 443,940 493,843 121,433 2,367,625 - 264,458 449,820 495,103 124,688 1,901,316 278,140 460,110 500,983 121,537 1,933,267 - 285,411 464,100 506,023 118,387 1,945,105 297,263 - 268,723 120,488 1,260,546 313,472 271,243 117,180 1,276,802 323,316 278,593 124,372 1,305,920 - 337,517 285,313 - 622,830 350,447 - 291,403 - 641,850 - - 301,855 - 301,855 - 306,127 306,127 $ 1,990,801 $ 3,382,508 $ 3,191,160 $ 5,264,438 $ 1,209,600 $ 21,386,182 CITY OF LINO LAKES, MINNESOTA DEBT SERVICE PAYMENTS TO MATURITY - ALL BONDS December 31, 2010 Exhibit 3 G. O. G.O. G.O. Improvement G.O. Equipment Equipment Equipment Improvement Improvement Refunding Improvement Certificates Certificates Certificates Bonds Bonds Bonds Bonds 2008A 2009A 2010A of 2002A of 2002B 2003A 2003B Bonds payable $ 74,000 $ 232,000 $ 170,000 $ 85,000 $ 750,000 $ 605,000 $ 125,000 Future interest payable 2,960 10,500 15,115 5,375 63,059 116,659 14,098 Totals $ 76,960 $ 242,500 $ 185,115 $ 90,375 $ 813,059 $ 721,659 $ 139,098 Payments to maturity: 2011 $ 76,960 $ 120,960 $ 61,775 $ 27,930 $ 269,310 $ 82,638 $ 35,950 2012 - 121,540 61,540 31,830 271,395 80,537 34,390 2013 61,800 30,615 272,354 78,438 32,778 2014 - 81,088 35,980 2015 78,488 2016 80,788 2017 77,988 2018 79,994 2019 81,700 2020 2021 2022 2023 - 2024 - $ 76,960 $ 242,500 $ 185,115 $ 90,375 $ 813,059 $ 721,659 S 139,098 84 Exhibit 3 G. O. G.O. G.O. G.O. G.O. G. 0. Improvement Tax Utility CIP G.O. Improvement Improvement Refunding Abatement Revenue Refunding TIF and Utility Revenue Bonds Bonds Bonds Bonds Bonds Bonds Refunding Bonds 2005A 2005B 2006C 2006D 2006E 2007A 2010A $ 4,495,000 $ 2,115,000 $ 2,460,000 $ 420,000 $ 2,910,000 $ 3,875,000 $ 1,000,000 1,371,949 253,594 843,152 63,697 492,400 1,060,781 152,000 $ 5,866,949 $ 2,368,594 $ 3,303,152 $ 483,697 $ 3,402,400 $ 4,935,781 $ 1,152,000 $ 534,111 $ 512,219 $ 132,820 $ 66,122 $ 415,300 $ 366,626 $ 129,625 532,986 491,375 185,520 69,022 417,800 407,026 108,400 531,111 477,875 221,320 71,722 439,300 416,026 116,600 533,361 456,625 231,020 69,292 430,000 463,426 114,700 529,736 430,500 240,043 66,832 415,600 464,326 117,250 530,236 - 248,381 69,254 420,800 469,526 114,250 534,611 260,858 71,453 430,100 473,926 111,250 532,861 267,464 - 433,500 252,126 113,175 534,633 278,327 - 254,326 110,025 534,784 293,233 - 261,026 116,725 538,519 - 302,183 267,126 - 315,103 272,504 326,880 282,016 - 285,775 $ 5,866,949 $ 2,368,594 $ 3,303,152 $ 483,697 $ 3,402,400 $ 4,935,781 $ 1,152,000 85 CITY OF LINO LAKES, MINI Exhibit 3 DEBT SERVICE PAYMENTS TO MATURITY - ALL BONDS (CONTINUED) December 31, 2010 G.O. Water Utility Revenue Note Refunding Payable - Bonds Anoka of 2006F County Totals Bonds payable $ 795,000 $ 4,260,000 $ 24,371,000 Future interest payable 29,043 1,813,670 6,308,052 Totals $ 824,043 $ 6,073,670 $ 30,679,052 Payments to maturity: 2011 $ 411,702 $ 153,410 $ 3,397,458 2012 412,341 153,410 3,379,112 2013 153,410 2,903,349 2014 153,410 2,568,902 2015 516,410 2,859,185 2016 522,010 2,455,245 2017 527,010 2,487,196 2018 531,410 2,210,530 2019 539,260 1,798,271 2020 541,136 1,746,904 2021 546,946 1,654,774 2022 556,816 1,144,423 2023 575,716 1,184,612 2024 603,316 889,091 $ 824,043 $ 6,073,670 $ 30,679,052 CITY OF LINO LAKES, MINNESOTA INSURANCE IN FORCE December 31, 2010 Exhibit 4 Coverage Amount General Liability: Bodily Injury/Property Damage $ 1,500,000 Personal Injury/Police Professional Liability 1,500,000 Fire Legal Liability 50,000 Medical Expense Occurrence Limit 1,000 Medical Expense Aggregate 10,000 Property Damage ($500 Deductible) Property: Buildings and Contents (including Mobile and EDP - Electronic Equipment & Valuable Papers) 27,033,146 Faithful Performance Blanket Bond 500,000 Storage Tank Liability 250,000 Rented/Leased Equipment ($500 Deductible) 250,000 Public Official and Employee Liability ($500 Deductible each occurrence) 1,500,000 Automotive: Bodily injury and property damage 1,500,000 Comprehensive and Collision Actual Cash Value Uninsured motorists 200,000 Workmen's compensation Statutory Umbrella Liability 1,000,000 Crime - Theft Disappearance and Destruction ($500 Deductible) 250,000 87 CITY OF LINO LAKES, MINNESOTA Exhibit 5 TAXABLE VALUATIONS, TAX LEVIES AND TAX RATES Tax Capacity Tax Capacity Values Values 2009/2010 2008/2009 Taxable valuations: Total $ 22,070,825 $ 23,196,932 Fiscal disparities: Distribution 2,833,602 2,779,103 Contribution (1,697,800) (1,461,587) Less: Captured Tax Increment Value (327,659) (664,119) $ 22,878,968 $ 23,850,329 Tax Tax Certified Capacity Certified Capacity Levy Rate Levy Rate Taxes Levied: Revenue $ 7,816,232 34.086 $ 8,295,172 34.716 Bond and Interest 879,182 3.819 949, 166 4.017 Totals $ 8,695,414 37.905 $ 9,244,338 38.733 The tax capacity rate is based on the total certified levy net of the fiscal disparity distribution 88 III. STATISTICAL SECTION Statistical Section (Unaudited) This part of the Comprehensive Annual Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about overall financial health. The following are the categories of the various schedules that are included in this section. Financial Trends Tables 1 -4 These schedules contain trend information to help the reader understand how the City's financial performance and well -being have changed over time. Revenue Capacity Tables 5 -8 These schedules contain information to help the reader assess the City's most significant revenue sources. Debt Capacity Tables 9 -11 These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. Demographic and Economic Information Tables 12 -13 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place. Operating information Tables 14 -16 These schedules contain service and infrastructure data to help the reader understand how the information the City's financial report relates to the services the City provides and the activities it performs. CITY OF LINO LAKES, MINNESOTA NET ASSETS BY COMPONENT, LAST EIGHT FISCAL YEARS (accrual basis of accounting) Table 1 Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 Governmental activities Invested in capital assets, net of related debt $ 25,993,905 $ 28,807,262 $ 25,460,528 $ 29,549,174 $ 36,789,153 $ 28,472,865 $ 23,400,453 $ 22,562,217 Restricted 3,568,555 3,045,052 12,050,484 10,704,508 10,324,467 9,870,676 9,414,474 8,428,025 Unrestricted 15,668,226 16,249,541 13,577,071 14,516,466 6,339,528 10,790,359 15,926,322 17,703,885 Total governmental activities net assets $ 45,230,686 $ 48,101,855 $ 51,088,083 $ 54,770,148 $ 53,453,148 $ 49,133,900 $ 48,741.249 $ 48,694,127 Business -type activities Invested in capital assets, net of related debt $ 25,537,383 $ 26,713,498 $ 28,342,832 $ 29,485,942 $ 29,836,775 $ 30,372,670 $ 30,071,840 $ 29,648,461 Unrestricted 3,778,936 4,744,875 5,572,338 6,880,547 8,063,983 9,028,778 10,112,207 10,728,626 Total business -type activities net assets $ 29,316,319 $ 31,458,373 $ 33,915,170 $ 36,366,489 $ 37,900,758 $ 39,401,448 $ 40,184,047 $ 40,377,087 Primary Government Invested in capital assets, net of related debt $ 51,531,288 $ 55,520,760 $ 53,803,360 $ 59,035,116 $ 66,625,928 $ 58,845,535 $ 53,472,293 $ 52,210,678 Restricted 3,568,555 3,045,052 12,050,484 10,704,508 10,324,467 9,870,676 9,414,474 8,428,025 Unrestricted 19,447,162 20,994,416 19,149,409 21,397,013 14,403,511 19,819,137 26,038,529 28,432,511 Total primary government net assets $ 74,547,005 $ 79,560,228 $ 85,003,253 $ 91,136,637 $ 91,353,906 $ 88,535,348 $ 88,925,296 $ 89,071,214 Note: The City began to report accrual information when it implemented GASB 34 in fiscal year 2003. 89 CITY OF LINO LAKES, MINNESOTA CHANGES IN NET ASSETS, LAST EIGHT FISCAL YEARS (accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 2008 2009 Expenses Governmental activities: General Government $ 6,092,587 $ 2,524,387 $ 2,941,279 $ 2,886,825 $ 2,197,672 $ 2,323,358 $ 2,201,439 Public Safety 2,648,944 2,799,294 3,091,174 3,516,376 3,730,504 4,051,162 4,299,366 Public Services 1,162,412 7,254,708 9,187,436 3,871,968 10,580,560 7,608,626 4,027,553 Parks, Recreation and Forestry 932,113 1,196,096 799,335 1,162,458 1,357,133 919,948 1,313,560 Conservation of Natural Resources 111,946 116,869 150,092 156,592 183,420 184,624 215,607 Community Development 859,110 420,874 383,211 691,880 1,122,802 1,114,158 1,005,997 Interest on long -term debt 815,681 748,832 797,341 926,021 980,849 1,045,781 928,668 Total governmental activities expenses $ 12,622,793 $ 15,061,060 $ 17,349,868 $ 13,212,120 $ 20,152,940 $ 17,247,657 $ 13,992,190 Business -type activities: Water $ 968,458 $ 914,039 $ 876,592 $ 976,575 $ 1,170,902 $ 1,020,770 $ 1,089,569 Sewer 1,046,170 1,130,994 1,217,825 1,228,123 1,298,963 1,287,943 1,432,107 Total business -type activities 2,014,628 2,045,033 2,094,417 2,204,698 2,469,865 2,308,713 2,521,676 Total primary government expenses $ 14,637,421 $ 17,106,093 $ 19,444,285 $ 15,416,818 $ 22,622,805 $ 19,556,370 $ 16,513,866 Program Revenues Governmental activities: Charges for services: General Govemment $ 102,520 $ 122,861 $ 111,480 $ 88,924 $ 91,646 $ 79,844 $ 101,741 Public Safety 964,034 1,049,858 998,210 844,514 1,078,995 1,296,418 725,747 Public Works 493,312 454,191 434,087 420,741 389,489 413,040 428,174 Parks, Recreation and Forestry 250,816 242,857 196,951 188,439 185,803 187,285 165,994 Conservation of Natural Resources 5,369 11,763 4,873 6,854 4,559 3,660 3,858 Community Development 28,210 28,952 26,985 20,530 15,839 11,623 8,667 Operating grants and contributions 633,691 677,079 761,924 643,749 851,791 693,065 682,797 Capital grants and contributions 4,536,567 7,515,238 10,128,024 5,963,204 7,189,346 1,094,789 1,357,015 Total governmental activities program revenues $ 7,014,519 $ 10,102,799 $ 12,662,534 $ 8,176,955 $ 9,807,468 $ 3,779,724 $ 3,473,993 Business -type activities: Charges for services: Water $ 1,064,326 $ 979,075 $ 1,031,175 $ 1,175,172 $ 1,215,763 $ 1,058,493 $ 1,365,817 Sewer 1,216,589 1,280,652 1,361,759 1,391,702 1,446,112 1,472,093 1,502,164 Operating grants and contributions 62,710 Capital grants and contributions 2,719,081 1,589,419 1,733,775 1,535,631 80,750 10,117 8,769 Total business -type activities program revenues 4,999,996 3,849,146 4,126,709 4,102,505 2,742,625 2,540,703 2,939,460 Total primary government program revenues $ 12,014,515 $ 13,951,945 $ 16,789,243 $ 12,279,460 $ 12,550,093 $ 6,320,427 $ 6,413,453 Net (Expense)/Revenue Govemmental activities Business -type activities Total primary government net expense $ (5,608,274) $ (4,958,261) $ (4,687,334) $ (5,035,165) $ (10,345,472) $ (13,467,933) $ (10,518,197) 2,985,368 1,804,113 2,032,292 1,897,807 272,760 231,990 417,784 $ (2,622,906) $ (3,154,148) $ (2,655,042) $ (3,137,358) $ (10,072,712) $ (13,235,943) $ (10,100,413) General Revenues and Other Changes in Net Assets Goverunental activities: Property taxes $ 6,847,470 $ 6,630,279 $ 7,383,415 $ 8,269,944 $ 8,785,280 $ 9,424,697 $ 9,808,324 Unrestricted grants and contributions 256,877 129,607 11,321 Unrestricted investment earnings 194,220 221,302 433,387 713,794 864,578 576,071 429,325 Gam on sale of capital assets 1,280,957 33,217 17,424 12,512 12,644 Miscellaneous 160,955 Transfers (301,355) (303,108) (304,195) (299,725) (895,687) (994,202) (136,068) Total governmental activities $ 6,740,335 $ 7,829,430 $ 7,673,562 $ 8,717,230 $ 9,028,472 $ 9,148,685 $ 10,125,546 Business -type activities: Unrestricted investment eamings $ 20,866 $ 34,833 $ 120,310 $ 253,787 $ 365,822 $ 274,498 $ 228,747 Transfers 301,355 303,108 304,195 299,725 895,687 994,202 136,068 Total business -type activities 322,221 337,941 424,505 553,512 1,261,509 1,268,700 364,815 Total primary government $ 7,062,556 $ 8,167,371 $ 8,098,067 $ 9,270,742 $ 10,289,981 $ 10,417,385 $ 10,490,361 Change in Net Assets Governmental activities Business -type activities $ 1,132,061 $ 2,871,169 $ 2,986,228 $ 3,682,065 $ (1,317,000) $ (4,319,248) $ (392,651) 3,307,589 2,142,054 2,456,797 2,451,319 1,534,269 1,500,690 782,599 Total primary govemment change in net assets $ 4,439,650 $ 5,013,223 $ 5,443,025 $ 6,133,384 $ 217,269 $ (2,818,558) $ 389,948 Note: The City began to report accrual information when it implemented GASB 34 in fiscal year 2003. 90 Table 2 2010 $ 1,987,415 3,971,261 3,968,063 1,124,907 197,571 1,105,254 99,172 $ 12,453,643 $ 1,045,901 1,466,847 2,512,748 $ 14,966,391 $ 98,403 691,005 427,223 177,984 4,153 14,148 617,450 1,388,984 $ 3,419,350 $ 1,087,013 1,498,218 8,709 2,593,940 $ 6,013,290 $ (9,034,293) 81,192 (8,953,101) $ 8,764,183 4,389 225,677 (7,078) $ 8,987,171 $ 104,770 7,078 111,848 $ 9,099,019 $ (47,122) 193,040 $ 145,918 91 CITY OF LINO LAKES, MINNESOTA FUND BALANCES, GOVERNMENTAL FUNDS, LAST TEN FISCAL YEARS (modified accrual basis of accounting) Table 3 General Fund Reserved Unreserved Total general fund All Other Governmental Funds Reserved reported in: Special Revenue Funds Capital Projects Funds Debt Service Funds Permanent Funds Unreserved reported in: Special Revenue Funds Capital Projects Funds Debt Service Funds Permanent Funds Total all other governmental funds Total all funds Fiscal Year 2001 $ 105,969 3,818,700 $ 3,924,669 $ 1,551 1,843,423 1,768,402 41,195 6,242,862 (41,953) 2002 $ 120,727 4,232,291 $ 4,353,018 $ 2,430 1,946,617 1,818,859 25,200 6,317,650 (612,943) 9,855,480 $ 9,497,813 2003 $ 133,921 4,775,969 $ 4,909,890 $ 1,759 1,946,618 2,482,184 32,704 5,406,014 675,409 $ 10,544,688 2004 $ 142,492 5,067,973 $ 5,210,465 $ 1,718 957,112 2,556,300 57,616 6,241,408 452,972 $ 10,267,126 $ 13,780,149 $ 13,850,831 $ 15,454,578 $ 15,477,591 92 Table 3 (Continued) Fiscal Year 2005 $ 148,652 5,300,156 $ 5,448,808 $ 1,763 957,112 7,371,359 100,000 74,716 7,348,375 853 $ 15,854,178 2006 $ 153,009 5,337,225 $ 5,490,234 $ 1,813 957,112 3,992,952 100,000 82,385 5,525,508 5,378 $ 10,665,148 2007 $ 181,759 5,356,272 $ 5,538,031 $ 226,921 885,825 3,925,402 100,000 100,955 8,395,827 17,023 $ 13,651,953 $ 21,302,986 $ 16,155,382 $ 19,189,984 2008 $ 190,825 5,393,316 $ 5,584,141 $ 226,973 812,400 3,405,272 106,573 5,927,411 22,224 $ 10,500,853 2009 $ 196,568 5,191,396 $ 5,387,964 $ 227,176 736,772 3,457,349 100,000 93,956 11,611,835 (558,443) 15,824 $ 15,684,469 $ 16,084,994 $ 21,072,433 93 2010 $ 181,471 5,445,334 $ 5,626,805 $ 227,342 658,875 2,986,102 100,000 110,471 12,537,841 (1,093,765) 12,676 $ 15,539,542 $ 21,166,347 CITY OF LINO LAKES, MINNESOTA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS, LAST TEN FISCAL YEARS (modified accrual basis of accounting) Table 4 Revenues Property Taxes Licenses and Permits Intergovernmental Special Assessments Charges for Services Fines and Forfeits Investment Earnings Miscellaneous Total revenues Expenditures Current: General Government Public Safety Public Works Parks, Recreation and Forestry Conservation of Natural Resources Community Development Capital outlay Debt Service Principal Interest and fiscal charges Construction/Acquisition Total expenditures Excess (deficiency) of revenues over expenditures Other Financing Sources (Uses) Sale of Property Proceeds from Issuance of Debt Premium on Bonds Issued Discount on Bonds Issued Payment to Refunded Bond Escrow Agent Transfer In Transfer Out Total other financing sources (uses) Net change in fund balances Debt service as a percentage of noncapital expenditures Fiscal Year 2001 $ 5,856,349 1,016,456 2,101,953 1,783,237 684,264 101,559 571,248 699,020 12,814,086 2002 $ 6,243,200 913,498 858,816 2,050,015 611,414 100,393 447,182 710,513 11,935,031 2,652,762 2,893,683 2,212,932 2,463,004 1,134,874 1,245,451 914,432 952,039 139,599 111,880 992,339 1,057,099 2,097,050 2,851,332 960,281 1,030,395 501,810 1,833,592 11,606,079 14,438,475 1,208,007 (2,503,444) 332,030 2,878,201 (1,680,000) - 412,239 851,472 (719,889) (1,155,547) (1,655,620) 2,574,126 $ (447,613) $ 70,682 2003 $ 6,687,516 766,524 2,011,285 2,812,386 658,370 97,223 194,049 677,823 13,905,176 5,808,015 2,609,171 1,770,649 969,597 114,580 622,218 1,684,450 865,638 229,321 14,673,639 (768,463) 2,673,565 1,120,223 (1,421,578) 2,372,210 $ 1,603,747 2004 $ 6,523,938 867,909 2,419,531 1,587,510 639,565 106,053 221,303 782,179 13,147,988 2005 $ 7,230,287 812,172 1,808,111 1,769,821 601,548 100,980 433,385 948,009 13,704,313 2,261,908 2,701,731 2,798,013 3,099,032 5,126,578 7,071,322 954,945 1,111,301 115,631 140,334 515,287 464,553 1,960,000 2,016,000 798,405 838,950 14,530,767 17,443,223 (1,382,779) (3,738,910) 1,280,957 280,269 1,604,000 9,412,000 176,231 (6,057) - (1,170,000) 5,283,306 2,651,469 (5,586,414) (2,955,664) 1,405,792 9,564,305 $ 23,013 $ 5,825,395 30.2% 33.6% 18.4% 19.7% 16.8% 94 Table 4 (Continued) Fiscal Year 2006 $ 8,103,263 581,582 1,818,519 2,901,100 687,551 101,518 713,795 716,692 15,624,020 2007 $ 8,529,846 694,435 6,143,689 1,961,253 753,698 139,932 864,578 889,901 19,977,332 2008 $ 9,095,085 802,135 1,004,476 950,188 872,534 133,531 576,071 516,415 13,950,435 2009 $ 9,561,570 307,714 1,259,016 968,995 778,163 111,807 429,325 513,306 13,929,896 2,614,303 1,953,960 2,058,267 1,918,246 3,314,159 3,513,460 3,806,389 4,122,352 7,755,727 8,446,911 5,542,308 1,965,640 1,076,727 1,103,021 1,033,260 1,106,006 143,653 183,346 183,024 209,466 683,036 1,107,328 1,113,232 1,005,095 835,770 2,008,073 585,875 501,806 2,155,000 1,973,000 1,749,000 1,908,000 1,011,157 937,895 1,074,052 994,809 19,589,532 21,226,994 17,145,407 13,731,420 (3,965,512) (1,249,662) (3,194,972) 198,476 28,818 6,327,000 450 (13,635) (7,225,000) 5,811,452 (6,111,177) (1,182,092) 54,037 4,375,000 (25,798) 2,900,249 (3,019,224) 4,284,264 $ (5,147,604) $ 3,034,602 16.9% 20.3% 13,750 209,000 4,763,391 (4,796,159) 189,982 $ (3,004,990) $ 17.0% 35,700 4,596,000 11,141 1,413,985 (1,367,863) 4,688,963 4,887,439 2010 $ 8,647,488 330,138 1,176,863 851,270 780,044 127,203 225,677 502,992 12,641,675 1,730,390 3,798,106 1,902,411 945,821 185,232 1,098,682 282,938 1,866,000 1,042,883 12,852,463 (210,788) 20,600 1,170,000 10,980 (965,000) 1,195,747 (1,127,625) 304,702 93,914 22.7% 23.7% 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF LINO LAKES, MINNESOTA ASSESSED AND ACTUAL VALUE OF TAXABLE PROPERTY, LAST TEN FISCAL YEARS Payable Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Residential Property $ 10,763,728 9,179,811 10,649,345 12,252,347 14,055,076 15,825,619 17,605,080 18,382,645 18,919,087 17,978,917 Commercial/ Industrial Property $ 1,872,003 1,202,560 1,487,554 1,982,146 2,290,829 2,740,583 3,047,965 3,431,107 4,002,349 3,800,004 Source: Anoka County, Minnesota Assessors' Office Personal Property 96 $ 393,728 246,594 251,016 259,194 274,956 271,665 288,290 279,102 275,496 291,904 Total Taxable Assessed Value $ 13,029,459 10,628,965 12,387,915 14,493,687 16,620,861 18,837,867 20,941,335 22,092,854 23,196,932 22,070,825 Table 5 Total Direct Tax Rate 35.90 53.08 47.60 42.29 42.22 41.40 38.99 38.97 38.73 37.91 CITY OF LINO LAKES, MINNESOTA Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (rate per $100 of Tax Capacity) City Direct Rate Overlapping Rates Table 6 General Centennial Total Direct Obligation School Other and Debt Redevelopment Total District Anoka Taxing Total Overlapping Fiscal Year Basic Rate Service Debt Service Direct ISD # 12 County Districts Overlapping Tax Rate 2001 $ 29 $ 7 $ 35.898 $ 69.888 $ 28.859 $ 6.903 $ 105.650 $ 141.548 2002 43.940 9.144 53.084 37.828 37.976 5.913 81.717 134.801 2003 40.268 7.335 47.603 37.467 37.714 7.050 82.231 129.834 2004 36.302 5.985 42.287 36.649 35.221 6.373 78.243 120.530 2005 36.838 5.385 42.223 37.486 33.080 6.696 77.262 119.485 2006 36.044 5.354 41.398 40.253 32.096 6.479 78.828 120.226 2007 34.356 4.638 38.994 38.090 30.696 5.578 74.364 113.358 2008 34.560 4.407 38.967 35.258 31.078 6.956 73.292 112.259 2009 34.716 4.017 38.733 34.593 32.078 5.611 72.282 111.015 2010 34.086 3.819 37.905 37.285 35.189 5.879 78.353 116.258 Source: Anoka County Property Records and Tax Division Notes: The majority of Lino Lakes is served by Independent School District No. 12. Rates for debt service are based on each year's requirements. 97 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF LINO LAKES, MINNESOTA PRINCIPAL PROPERTY TAXPAYERS, CURRENT YEAR AND NINE YEARS AGO Table 7 2010 2001 Percentage Percentage of Total of Total City City Taxable Taxable Taxable Taxable Net Tax Net Tax Net Tax Net Tax Taxpayer Capacity Rank Capacity Capacity Rank Capacity Target Corporation $ 254,772 1 1.11 % $ - % Lino Lakes Realty LLC 242,114 2 1.06 - Marshall Investment Corp. 164,371 3 0.72 - Moline Concrete Products 150,370 4 0.66 85,888 4 0.65 ECC Lino Lakes LLC 147,060 5 0.64 - Xcel Energy 141,737 6 0.62 129,316 1 0.97 Kohl's Department Store 140,438 7 0.61 - Taylor Corporation 132,706 8 0.58 96,938 2 0.73 Royal Oaks Realty Inc. 115,350 9 0.50 F &G Incorporated 108,700 10 0.48 62,078 5 0.47 Gargaro Properties LLC - 72,200 3 0.54 Lino Lakes Business Center 93,570 6 0.70 Anoka Electric Cooperative 41,040 7 0.31 Minnegasco, Inc. 40,446 8 0.30 Northern Development LLC 39,958 9 0.30 DJT Properties LLC 29,536 10 0.22 Total $ 1,597,618 6.98 % $ 690,970 5.19 % Source: Anoka County 98 CITY OF LINO LAKES, MINNESOTA PROPERTY TAX LEVIES AND COLLECTIONS. LAST TEN FISCAL YEARS Table 8 Fiscal Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Notes: Taxes Levied for the Fiscal Year Operating Tax Levy $ 4,105,048 4,885,509 5,180,932 5,623,542 6,342,211 7,042,626 7,558,995 7,973,236 8,295,172 7,816,232 Debt Tax Levy $ 993,561 1,016,649 943,689 927,078 927,091 934,281 897,333 893,720 949,166 879,182 Total Tax Levy Collected within the Fiscal Year of Levy Amount $ 5,098,609 $ 5,047,912 5,902,158 5,847,692 6,124,621 6,062,273 6,550,620 6,145,419 7,269,302 6,881,838 7,976,907 7,594,019 8,456,328 8,324,180 8,866,956 8,581,974 9,244,338 8,982,756 8,695,414 8,400,439 Current year levies and collections include State levy related credits (HACA and Market Value Credit). Does not include tax increment levies and collections. 99 Percentage of Levy 99.0% 99.1 % 99.0% 93.8% 94.7% 95.2% 98.4% 96.8% 97.2% 96.6% Table 8 (Continued) Total Collections to Date Collections in Percentage Outstanding Percentage Subsequent of Delinquent of Levy Years Amount Levy Taxes Outstanding $ 50,411 $ 5,098,323 100.0% $ 286 0.0% 56,678 5,904,370 100.0% 0.0% 87,237 6,149,510 100.0% 0.0% 48,417 6,193,836 100.0% 356,784 5.4% 56,188 6,938,026 95.4% 331,276 4.6% 61,568 7,655,587 96.0% 321,320 4.0% 101,847 8,426,027 99.6% 30,301 0.4% 108,474 8,690,448 98.0% 176,508 2.0% 106,254 9,089,010 98.3% 155,328 1.7% 8,400,439 96.6% 294,975 3.4% CITY OF LINO LAKES, MINNESOTA RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Table 9 Business -Type Governmental Activities Activities General General Special Other Obligation Fiscal Obligation Assessments Long -Term Revenue Year Bonds Payable Debt Bonds 2001 $ 6,686,430 $ 10,195,000 $ 959,352 $ 3,465,000 2002 6,244,450 11,640,000 3,220,000 2003 6,030,000 12,840,000 2,970,000 2004 5,764,000 11,580,000 - 2,705,000 2005 5,335,000 19,405,000 2,425,000 2006 7,177,000 13,940,000 - 4,410,000 2007 11,569,000 12,520,000 1,855,000 2008 11,184,000 11,365,000 1,530,000 2009 10,712,000 10,265,000 4,260,000 1,170,000 2010 10,141,000 9,175,000 4,260,000 795,000 Notes: Details regarding the District's outstanding debt can be found in the notes to the financial statements. See the Demographic and Economic Statistics schedule for personal income and population data. 101 1 1 1 1 1 1 1 1 1 Table 9 (Continued) Total Percentage Percentage Primary of Assessed of Personal Government Market Value Income $ 21,305,782 0.74 % 3.94 % 21,104,450 0.60 3.69 21,840,000 0.48 3.64 20,049,000 0.40 3.13 27,165,000 0.35 3.95 25,527,000 0.41 3.63 25,944,000 0.60 3.48 24,079,000 0.55 3.11 26,407,000 0.50 N/A 24,371,000 0.48 N/A 102 CITY OF LINO LAKES, MINNESOTA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT As of December 31, 2010 Table 10 Debt Outstanding Overlapping: Anoka County $ 165,392,433 ISD 12 95,445,000 ISD 624 105,365,000 ISD 831 35,735,000 Metropolitan Council 255,290,000 Anoka County Railroad Authority 30,155,000 Total Overlapping City of Lino Lakes Direct Debt Total Direct and Overlapping Debt: $ 3,386,000 Estimated Percentage Applicable 6.5% 47.2% 3.3% 7.6% 0.6% 6.5% Estimated Share of Overlapping Debt $ 10,765,308 45,049,239 3,499,700 2,716,401 1,609,700 1,962,773 65,603,121 100% 3,386,000 $ 68,989,121 Sources: Taxable value data used to estimate applicable percentages provided by the County Property Appraiser. Debt outstanding data provided by each governmental unit. Notes: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long -term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. Does not include general obligation debt supported by special assessments, utility revenues, tax or aid anticipation certificates, State -aid road or revenue debt. Determined by ratio of net tax capacity (after fiscal disparities and tax increment adjustment) of property subject to taxation in overlapping unit to valuation of property subject to taxation in City. 103 CITY OF LINO LAKES, MINNESOTA Legal Debt Margin Information Last Ten Fiscal Years Table 11 Debt limit Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of debt limit Fiscal Year 2001 2002 2003 2004 $ 18,073,714 $ 20,688,642 $ 25,024,436 $ 28,616,070 5,836,430 5,479,450 5,350,000 5,169,000 $ 12,237,284 $ 15,209,192 $ 19,674,436 $ 23,447,070 32.29% 26.49% 21.38% 18.06% 104 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Table 11 Legal Debt Margin Calculation for Fiscal Year 2010 Market value $ 2,001,889,600 Debt limit (3% of market value) 60,056,688 Debt applicable to limit 3,386,000 Legal debt margin $ 56,670,688 Fiscal Year 2005 2006 2007 2008 2009 2010 $ 30,698,674 $ 34,686,356 $ 38,556,150 $ 60,658,830 $ 64,036,746 $ 60,056,688 4,845,000 4,332,000 4,039,000 3,804,000 3,642,000 3,386,000 $ 25,853,674 $ 30,354,356 $ 34,517,150 $ 56,854,830 $ 60,394,746 $ 56,670,688 15.78% 12.49% 10.48% 6.27% 5.69% 5.64% 105 CITY OF LINO LAKES, MINNESOTA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN CALENDAR YEARS Table 12 (2) Personal Per Income Capita (3) (4) Fiscal (1) (thousands Personal School Unemployment Year Population of dollars) Income Enrollment Rate 2001 17,386 $ 540,531 $ 31,090 6,911 4.1 2002 17,942 572,099 31,886 6,985 4.3 2003 18,368 600,266 32,680 6,992 5.0 2004 18,725 640,170 34,188 6,956 4.6 2005 19,698 686,968 34,875 6,934 3.8 2006 19,736 703,983 35,670 6,986 4.1 2007 19,851 745,901 37,575 6,874 4.8 2008 19,987 774,376 38,744 6,754 6.9 2009 20,305 N/A N/A 6,722 7.8 2010 20,400 N/A N/A 6,621 7.1 Source: (1) = Estimates from Metropolitan Council, except for 2000 which is per the U.S. Census. (2) = Information from State Demographers Office (Bureau of Economic Analysis Report). (3) = Information from Independent School District No. 12. (4) = Information from the State of Minnesota Jobs Training Research Statistics Department. Note: Information not available is marked N/A 106 1 1 1 1 1 r 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF LINO LAKES, MINNESOTA PRINCIPAL EMPLOYERS, CURRENT YEAR AND NINE YEARS AGO Employer (2) 2010 2001 Table 13 (1) (1) Percentage Percentage of Total of Total Employees Rank Employment Employees Rank Employment State of Minnesota Corrections 500 1 N/A % 600 1 N/A % Target Corporation 271 2 N/A - N/A AdGraphics 190 3 N/A 300 2 N/A Molin Concrete Products 179 4 N/A 135 5 N/A Synovis Interventional Systems 160 5 N/A 160 3 N/A Anoka County Juvenile Center 149 6 N/A 160 3 N/A Rehbein Transit, Inc. 120 7 N/A 130 6 N/A City of Lino Lakes 74 8 N/A 75 8 N/A Custom Manufacturing 60 9 N/A 60 9 N/A Nol -Tech Systems, Inc. 56 10 N/A 57 10 N/A Summit Fire Protection 120 7 N/A Total 1,759 - % 1,797 - % Source: City of Lino Lakes Official Statements Notes: (1) = While information was obtainable for the largest employers within the City of Lino Lakes, information on the total employment within the City was not available. 107 CITY OF LINO LAKES, MINNESOTA Full- time - Equivalent Employees by Type Last Ten Fiscal Years Table 14 2001 2002 2003 2004 2005 General Government Administration 5.00 5.00 5.00 5.00 5.00 Seniors 0.63 0.63 0.63 0.63 0.63 Finance 3.50 3.50 3.50 3.50 3.50 Economic Development 1.75 1.75 1.00 1.00 1.00 Planning 2.00 2.00 2.00 2.00 2.00 Community Development 2.00 2.00 2.00 2.00 2.75 Engineering - - Building 1.00 1.00 1.00 1.00 1.00 Other 0.55 0.55 0.55 0.55 1.15 Total General Government 16.43 16.43 15.68 15.68 17.03 Public Safety Officers 21.00 22.00 22.00 22.00 25.00 Civilians 4.00 4.00 4.00 4.00 4.75 Building Inspection 3.00 4.00 4.00 4.00 4.25 Total Public Safety 28.00 30.00 30.00 30.00 34.00 Public Works Streets 5.85 5.85 5.85 5.85 6.35 Other 1.15 1.15 1.15 1.15 1.15 Total Public Works 7.00 7.00 7.00 7.00 7.50 Parks, Recreation and Forestry 9.15 9.15 9.15 9.15 9.05 Water 2.15 2.15 2.15 2.15 2.15 Sewer 2.15 2.15 2.15 2.15 2.15 Total 64.88 66.88 66.13 66.13 71.88 Source: City Finance Office 108 1 1 r 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Table 14 (Continued) 2006 2007 2008 2009 2010 5.00 5.00 5.00 5.00 4.00 0.63 0.63 0.63 0.63 0.63 3.50 3.50 3.50 3.50 3.00 1.00 1.00 1.00 1.00 1.00 2.00 2.00 2.00 2.00 2.00 2.75 2.75 2.75 2.75 2.25 1.00 1.00 1.00 1.00 1.00 1.15 1.40 1.40 1.40 1.40 17.03 17.28 17.28 17.28 15.28 26.00 26.00 27.00 27.00 27.00 4.75 4.75 4.75 4.75 4.25 4.25 4.25 4.25 4.25 2.75 35.00 35.00 36.00 36.00 34.00 6.85 7.35 7.35 7.35 6.85 1.15 1.15 1.15 1.15 1.15 8.00 8.50 8.50 8.50 8.00 9.55 9.80 9.80 9.80 9.30 2.15 2.15 2.15 2.15 2.15 2.15 2.15 2.15 2.15 2.15 73.88 74.88 75.88 75.88 70.88 109 CITY OF LINO LAKES, MINNESOTA OPERATING INDICATORS BY FUNCTION/PROGRAM Last Ten Years Table 15 Function/Program Fiscal Year 2001 2002 2003 2004 General Government Elections 1 2 1 2 Registered voters 9,349 9,423 9,911 11,718 Number of votes cast 3,089 8,291 4,650 10,147 Voter participation (registered) 33.0% 88.0% 46.9% 86.6% Public Safety Police Calls for Service 6,569 7,318 7,668 7,538 Traffic Citations & Warnings 2,333 2,611 2,564 3,258 Part I Crimes 343 404 370 316 Part II Crimes 1,120 1,259 1,004 644 Inspections Building Permits (1) 1,042 860 826 835 Inspections N/A N/A N/A N/A Value of Building Permits $74,974,042 $53,977,610 $55,864,076 $61,579,910 Public Works General Maintenance (hours) N/A N/A 2,656 3,263 Street Maintenance (hours) N/A N/A 4,082 3,533 Fleet Maintenance (hours) N/A N/A 3,780 3,804 Snow Plowing /Sanding (hours) N/A N/A 1,020 855 Culture and Recreation Parks Park Maintenance (hours) N/A N/A N/A Utilities Water Maintenance (hours) N/A N/A N/A Sanitary Sewer Maintenance (hours) N/A N/A N/A Source: Various City Departments Notes: Information not available is labeled N /A. (1) 1,565 and 4,337 repair permits issued in 2007 and 2008, respectively, due to storm damage. 110 10,210 4,349 3,347 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 t 1 Table 15 (Continued) Fiscal Year 2005 1 2006 2007 2008 2009 2010 2 1 2 1 2 11,035 11,618 10,908 12,723 11,805 12,284 5,288 8,284 2,337 11,051 4,354 8,545 47.9% 71.3% 21.4% 86.9% 36.9% 69.6% 7,766 7,418 7,208 7,318 6644 6575 3,631 5,958 3,796 3,304 3180 2744 257 292 250 305 215 225 591 649 671 1,191 630 667 837 686 2,297 5,041 1,535 509 N/A N/A N/A N/A N/A N/A $53,686,592 $42,078,007 $30,539,559 $15,852,780 $ 9,586,160 $ 11,295,493 6,014 5,692 6,758 6,129 5,870 4,945 3,106 3,631 2,916 3,851 3,267 3,099 4,440 4,460 4,144 5,043 4,782 4,850 1,003 867 1,425 1,353 950 1,638 10,577 10,368 10,939 11,136 12,406 9,257 3,904 4,387 4,256 5,716 5,041 3,560 4,092 3,347 4,148 3,760 3,486 3,531 111 CITY OF LINO LAKES, MINNESOTA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Last Ten Years Function/Program Public Safety Police Stations Patrol Units Fire (Joint Powers) Stations in City Fire Trucks 2001 1 9 1 4 Public Works Lights 405 Vehicles 27 City Streets (miles) 91.9 Culture and Recreation Parks Parks 17 Park Acres 133 Trails (miles) 14 Park Shelters 3 Basketball Courts 4 Fishing Pier 1 Skating Rinks 4 Soccer Fields 8 Baseball/Softball Fields 18 Tennis Courts 2 Playgrounds 15 Water Distribution System (miles) 42.5 Water Connections 3,263 Gallons Pumped (millions) 407 Number of Fire Hydrants 398 Water Tower Capacity (millions gallons) 2 Sanitary Sewer Collection System (miles) 51.3 Sewer Connections 3,343 Storm Sewer Pipe (miles) Source: Various City Departments 28.1 112 1 Table 16 1 Fiscal Year 2002 2003 2004 2005 1 1 1 1 1 9 9 10 11 1 1 1 1 4 4 4 4 486 489 489 559 I 28 28 29 29 93.2 93.8 94.3 95.5 1 18 19 19 18 138 142 142 141 14 18 18 19 4 4 5 5 5 6 6 6 1 1 1 1 4 4 4 4 8 8 8 8 18 18 18 18 2 2 2 2 16 17 17 17 42.5 46.2 48.2 50.8 3,433 3,548 3,738 3,957 358 518 474 475 409 452 490 523 2 2 2 2 51.3 59.2 61.4 63.5 3,636 3,763 3,960 4,142 1 29.8 31.3 31.9 33.1 Table 16 (Continued) Fiscal Year 2006 2007 2008 2009 2010 1 1 1 1 1 12 12 12 12 12 1 1 1 1 1 5 5 5 5 5 673 673 673 673 673 29 29 29 29 29 96.0 96.1 96.1 96.1 96.1 18 18 18 18 18 141 141 141 141 141 20 29 29 29 29 7 7 7 7 7 6 6 6 6 6 1 1 1 1 1 4 4 4 4 4 8 8 8 8 8 20 20 20 20 20 2 2 2 2 2 16 16 16 16 16 51.1 51.5 51.5 51.5 51.5 4,090 4,112 4,247 4,340 4,382 565 595 590 589 498 558 558 558 558 558 2 2 2 2 2 63.3 64.5 64.5 64.5 64.5 4,282 4,428 4,447 4,486 4,530 34.1 34.3 34.3 34.3 34.3