HomeMy WebLinkAboutComprehensive Annual Financial Report 12/31/2004law
COMPREHENSIVE ANNUAL FINANCIAL REPORT
OF THE
CITY OF LINO LAKES, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2004
Prepared By: Finance Department
Alan Rolek, Director of Finance
Paula Schloer, Accountant
Wow
CITY OF LINO LAKES, MINNESOTA
TABLE OF CONTENTS
Page
Reference Number
I. INTRODUCTORY SECTION
Principal City Officials 1
Organizational Chart 2
Letter of Transmittal 3
Certificate of Achievement for Excellence in Financial Reporting 7
II. FINANCIAL SECTION
Independent Auditors' Report 8
Management's Discussion and Analysis 10
Basic Financial Statements
Statement of Net Assets Statement 1 20
Statement of Activities Statement 2 21
Balance Sheet - Governmental Funds Statement 3 23
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Assets Statement 4 25
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Governmental Funds Statement 5 26
Reconciliation of the Governmental Funds Statement of Revenue,
Expenditures and Changes in Fund Balance to the Statement
of Activities Statement 6 28
Statement of Net Assets - Proprietary Funds Statement 7 29
Statement of Revenues, Expenses and Changes in Net Assets -
Proprietary Funds Statement 8 30
CITY OF LINO LAKES, MINNESOTA
TABLE OF CONTENTS
Page
Reference Number
Statement of Cash Flows - Proprietary Funds Statement 9 31
Statement of Net Assets - Fiduciary Funds Statementl0 32
Notes to Financial Statements 33
Required Supplementary Information
General Fund:
Schedule of Revenues, Expenditures and Changes in Fund
Balance - Budget and Actual Statementl l 53
Combining Fund Financial Statements
Combining Balance Sheet — Nonmajor Governmental Funds Statement 12 59
Combining Statement of Revenues, Expenditures, and Changes in
Fund Balance — Nonmajor Governmental Funds Statement 13 66
Special Revenue Fund — Program Recreation:
Schedule of Revenue, Expenditures and Changes in Fund
Balance — Budget and Actual Statement 14 73
Statement of Changes in Assets and Liabilities — Fiduciary Funds Statement 15 74
Supplementary Financial Information
Combined Schedule of Indebtedness Exhibit 1 75
Schedule of Deferred Tax Levies Exhibit 2 77
Debt Service Payments to Maturity - All Bonds Exhibit 3 78
Insurance in Force Exhibit 4 80
Taxable Valuations, Tax Levies and Tax Rates Exhibit 5 81
III. STATISTICAL SECTION
General Fund:
Expenditures By Function - Last Ten Fiscal Years Table 1 82
Revenue By Source - Last Ten Fiscal Years Table 2 83
CITY OF LINO LAKES, MINNESOTA
TABLE OF CONTENTS
Page
Reference Number
Property Tax Levies and Collections - Last Ten Fiscal Years Table 3 84
Special Assessment Levies and Collections - Last Ten Fiscal Years Table 4 85
Ratio of Annual Debt Service Expenditures for General Bonded
Debt to Total General Expenditures - Last Ten Fiscal Years Table 5 86
Assessed and Estimated Actual Value of Taxable Property -
Last Ten Fiscal Years Table 6 87
Property Tax Rates - Direct and Overlapping Governments -
Last Ten Fiscal Years Table 7 89
Ratio of Net Bonded Debt to Assessed Value and Net Bonded
Debt Per Capita - Last Ten Fiscal Years Table 8 90
Computation of Direct and Overlapping Debt including Debt Ratios Table 9 91
Computation of Legal Debt Margin Table 10 92
Schedule of Revenue Bond Coverage - Water Fund -
Last Ten Fiscal Years Table 11 93
Principal Taxpayers Table 12 94
Property Value, Construction Permits and Bank Deposits -
Last Ten Fiscal Years Table 13 95
Demographic Statistics Table 14 96
Miscellaneous Statistics Table 15 97
I.
INTRODUCTORY
SECTION
... CITY OF LINO LAKES, MINNESOTA
PRINCIPAL CITY OFFICIALS
December 31, 2004
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■
Elected Officials
Term Expires
Mayor:
— John Bergeson December 31, 2005
-
Council Members:
Caroline Dahl December 31, 2005
Jeff Reinert December 31, 2005
Donna Carlson December 31, 2007
Daniel Stoltz December 31, 2007
Appointed Personnel
City Administrator Gorden Heitke
Director of Administration Daniel Tesch
— Director of Finance Alan Rolek
Director of Public Safety David Pecchia
Director of Community Development Micheal Grochala
Director of Public Service Rick DeGardner
City of Lino Lakes Organizational Chart
r
Citizens
Honorable Mayor
and
City Council
Commissions
Cable
Parks and Recreation
Economic Development
Planning and Zoning
Fire
Environmental
City Administrator
City Cleric
Professional Consultants
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Engineering
Attomey
I
Fiscal
I
I
Public Services
Parks
Public Works
Recreation
Public Safety
Administration
Police
Emergency Management
Community Development
Human Resources
Administrative Services
2
I
Finance
Planning
Economic Development
Engineering
Environmental Services
Inspections
Accounting
Management Infomration Systems
Utility Billing
June 1, 2005
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, 2004.
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 Larson, Allen, Weishair and Co., 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, 2004, 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, 2004, 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.
600 Town Center Parkway, Lino Lakes, Minnesota 55014 -1182
Phone: 651 -982 -2400 • Fax: 651 -982 -2499 • TDD: 651 - 982 -2410
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 19,000. The population has
more than doubled from the 1990 census figure of 8,807. 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 program recreation special revenue
fund, the only funds for which an annual budget have been adopted, are provided in this report beginning on page
53.
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 in 1993 by the city council has made an impact in
the diversity of the City's tax base. Since 1993, the city has added more than $90 million in additional
commercial /industrial market value. The Apollo Business Park on I -35W and the Clearwater Creek Development
Center on I -35E continue to attract industrial development. The commercial retail center on Lake Drive and
Apollo Drive in the Town Center area, known as the Lino Lakes Marketplace, has continued to develop. The two
anchor tenants, Target and Kohl's, were completed and opened in 2002. A Dairy Queen Grill `n Chill restaurant
was completed and opened in 2003, and a Discount Tire store opened in mid -2004.
Housing permits rebounded in 2004, with 190 new homes being built. Commercial /industrial development
continued at a steady pace. A 265,000 square foot distribution center on the southwest quadrant of I -35W and
Lake Drive was completed and was operational by mid -2004, further contributing jobs and adding approximately
$14 million in value to the city's growing commercial /industrial tax base.
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Long -term financial planning. The city has entered into an agreement with Hartford Development LL, LLC, to
develop 40 acres in the southeast quadrant of I -35W and Lake Drive. This mixed -use development will occur
over a period of two to five years and would include up to 450 dwelling units, retail commercial business, a
community green and park and trail amenities, and is expected to begin construction in late Summer, 2005. The
YMCA, in partnership with the city, is also planning a facility within the development. The city's participation
in the YMCA will be $1.5 million of the $7.0 million project, plus land and infrastructure. The city, which plans
to build the facility and lease it back to the YMCA, plans to issue G.O. Tax Abatement bonds to finance its
contribution to this project, as well as $2.5 million in lease- revenue debt. The city has also secured a CDBG
grant of $125,000 to be used toward a teen center within the YMCA. Construction on the facility is scheduled to
begin in Fall, 2005.
To facilitate this development, street, streetscape, water, sewer, and storm water improvements must be installed
within the development area, as well as improvements to the existing Lake Drive. Engineering estimates for
these improvements is estimated at approximately $9 million and will be financed with G.O. Improvement and
G.O. Tax Increment bonds. The city also believes 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 five -year financial plan, which is currently under review, identifies street and utility improvements
totaling $25,985,000 over the period of 2005 through 2009. 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, tax increment financing and voter - approved tax levies.
Improvements to several of the city's neighborhood parks and the city's trail system are also planned over this
period in the amount of $437,000. These improvements will be funded through park dedication fees and the
dedicated parks fund.
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 and last amended it in 1998.
Cash temporarily idle during the year was invested in certificates of deposit, commercial paper, and obligations
of the U.S. Treasury. 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 low interest rate environment has persisted over the few years and has had a
significant impact on the city's investment earnings. The average yield on investments for 2004 was 2.04 %.
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.
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Pension benefits. The City of Lino Lakes participates in a statewide defined benefit pension plan administered
by the Public Employees Retirement Association of Minnesota (PERA). All full -time and part-time employees
are covered by PERA. PERA administers the Public Employees Retirement Fund (PERF) which is a cost -
sharing, multiple - employer retirement plan. A plan description and funding policy are included in the Notes to
the Financial Statements beginning on page 46.
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, 2003. This
marks the ninth 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 2004 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
6
W
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, 2003
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.
President
Executive Director
7
II.
FINANCIAL
SECTION
IMN
Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
LarsonAllen"
CPAs, Consultants & Advisors
www.larsonallen.com
INDEPENDENT AUDITORS' REPORT
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
low
of and for the year ended December 31, 2004, which collectively comprise the City's basic financial statements as
listed in the table of contents. These basic financial statements are the responsibility of the City's management.
Our responsibility is to express an opinion on these basic financial statements based on our audit.
We conducted our audit in accordance with U.S. generally accepted auditing standards 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 opinion.
In our opinion, the basic 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, 2004, and the respective changes in
financial position and cash flows, where applicable, thereof and for the year then ended in conformity with U.S.
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report dated March 18, 2005 on our
consideration of the City of Lino Lakes Minnesota's internal control over financial reporting and our tests of its
compliance with certain provisions of laws, regulations, contracts, grants, 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.
The management's discussion and analysis and budgetary comparison information as listed in the table of
contents are not a required part of the basic financial statements but are supplemental information required by the
Governmental Accounting Standards Board. 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.
Vow
8
Larson, Allen, \eishair & Co., LLP I An Independent ;Member of Baker Tilly international
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The
accompanying supplementary information, such as the introductory section, combining nonmajor 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.
Austin, Minnesota
March 18, 2005
LARSON, ALLEN, WEISHAIR & CO., LLP
9
NMI
Ilmor
4
City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2004
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, 2004. 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 -6 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 $79,560,228 (net assets). Of this amount $20,994,416 (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 increased by $5,013,223.
• As of the close of the current fiscal year, the City of Lino Lakes' governmental funds reported
combined ending fund balance of $15,477,591, an increase of $23,013 in comparison with the
prior year. Approximately 76% of this total amount, or $11,819,969 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
$5,067,973, or 75% of total general fund expenditures.
• The City of Lino Lakes' total bonded debt decreased by $3,130,000 (17 percent) during the
current fiscal period. The key factor to the decrease was the retirement of the 1996A
Improvement bonds that were called in February 2004.
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
ImIN 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).
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City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2004
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 20 -22 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 two
categories: governmental funds and proprietary 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 forty 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. taxable improvement bonds
2002B fund, dedicated parks fund, area and units charge fund and municipal state aid fund, all of which
are considered to be major funds. Data from the other thirty -five 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 23 and 26 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 29 through 31 of this report.
11
City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2004
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 33 -52 of this report.
Other information. The combining statements and schedules referred to earlier in conjunction with
nonmajor governmental funds can be found on pages 59 -72 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.
In the case of the City of Lino Lakes, assets exceeded liabilities by $79,560,228 at the close of the most
recent fiscal year, an increase of $5,013,223 over the previous year.
By far the largest portion of the City of Lino Lakes' net assets (70 percent) 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.
A condensed version of the Statement of Net Assets at December 31, 2004 follows:
Net Assets at Year -end
(in millions)
Governmental Business -type Total
Activities Activities Government
2004 2003 2004 2003 2004 2003
Current and other assets $20.88 $20.51 $4.89 $3.91 $25.77 $24.42
Capital assets 46.10 45.29 29.42 28.54 75.52 73.83
Total assets 66.98 65.80 34.31 32.45 101.29 98.25
Non - current liabilities outstanding 17.82 19.29 2.75 3.00 20.57 22.29
Other liabilities 1.06 1.28 .10 .13 1.16 1.41
- Total liabilities 18.88 20.57 2.85 3.13 21.73 23.70
Net assets:
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total net assets
28.80 25.99 26.71 25.54 55.51 51.53
3.07 3.57 3.07 3.57
16.23 15.67 4.75 3.78 20.98 19.45
$48.10
$45.23 $31.46 $29.32 $79.56 $74.55
The remaining balance of the City of Lino Lakes' net assets are unrestricted net assets (30 percent) and
may be used to meet the government's ongoing obligations to citizens and creditors.
12
City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2004
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 increased the City of Lino Lakes' net assets by
$2,871,169, thereby accounting for 57 percent of the total growth in the net assets of the City of Lino
Lakes. The most significant change in governmental net assets is due to the effect of accounting for net
assets under the full accrual basis. Under full accrual accounting, current year outlay for infrastructure
will be expensed over the useful life of the infrastructure. This capital outlay for the infrastructure is
budgeted for during the current year.
Business -type activities. Business -type activities increased the City of Lino Lakes' net assets by
$2,142,054, thereby accounting for 43 percent of the total growth in the net assets of the City of Lino
Lakes. Developers' contribution of infrastructure assets to the water and sewer funds accounted for the
most significant portion of that increase.
Condensed statements of revenues, expenses, and changes in net assets highlights are as follows for
the year ended December 31, 2004:
Governmental and Business -type Activities
For the year ended December 31, 2004
(in millions)
Governmental Business -type Total
Activities Activities Government
2004 2003 2004 2003 2004 2003
Revenues
Program revenues
Charges for services $1.91 $1.84 $2.26 $2.28 $4.17 $4.12
Operating grants and contributions .68 .63 - .68 .63
Capital grants and contributions 7.52 4.54 1.59 2.72 9.11 7.26
General revenues
Property taxes 6.52 6.74 6.52 6.74
Franchise fees .11 .11 - .11 .11
Unrestricted investment earnings .22 .19 .03 .02 .25 .21
Sale of Property 1.28 - - - 1.28 -
Total revenues 18.24 14.05 3.88 5.02 22.12 19.07
Expenses
General government 2.52 6.09 2.52 6.09
Public safety 2.80 2.65 2.80 2.65
Public services 7.25 1.16 - - 7.25 1.16
Parks, recreation and forestry 1.20 .93 1.20 .93
Conservation of natural resources .12 .11 .12 .11
Community development .42 .86 - .42 .86
Interest on long -term debt .76 .82 - .76 .82
Water .91 .97 .91 .97
Sewer 1.13 1.04 1.13 1.04
Total expenses 15.07 12.62 2.04 2.01 17.11 14.63
Change in net assets before transfers 3.17 1.43 1.84 3.01 5.01 4.44
Transfers (.30) (.30) .30 .30 -
Change in net assets 2.87 1.13 2.14 3.31 5.01 4.44
Net assets - beginning 45.23 44.10 29.32 26.01 74.55 70.11
Net assets - ending $48.10 $45.23 $31.46 $29.32 $79.56 $74.55
13
City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2004
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
$9,000,000
$8,000,000
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$-
ert
cat90 `letr� P\P
ere
G
sa�et� �\`Gye�\ces arako'c'a � ��esr.0 s
Qv recce?' r o(04e � a o��J k
Qat \Ls' e(4e' G
Gorr
trert debt
6e,0\63 ortor„xe`"
\c eN. t
• Expenses 1
■ Revenues
Revenues by Source — Governmental Activities
Unrestricted investment
eamings
1%
Franchise fees
1%
Sale of Property
7%
Property taxes
36%
14
Charges for services
10%
Operating grants and
contributions
4%
,_Capital grants and contributions
41%
City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2004
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
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$-
Water
Sewer
D Expenses
• Revenues
Revenues by Source — Business -type Activities
Capital grants and
contributions
41%
15
Charges for
services
58%
Mow
lonw
City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2004
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 $15,477,591, an increase of $23,013 over the previous year. Approximately
76% of this total amount, or $11,819,969, 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 ($144,210), 2) to pay debt service ($2,556,300), or 3) to fund interfund
advances ($957,112).
The general fund is the chief operating fund of the City of Lino Lakes. At the end of the current fiscal
year, unreserved fund balance of the general fund was $5,067,973, while the total fund balance was
$5,210,465. 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 75
percent of total general fund expenditures, while total fund balance represents 77 percent of that same
amount.
The fund balance of the City of Lino Lakes' general fund increased by $300,575 during the current fiscal
year. Reasons for this increase include increased building activities which increased permit revenue, and
increased collection of delinquent taxes, as well as reduced expenditures primarily for personal services
and other services and charges. Overall, the general fund's revenues were slightly above the amended
budget due primarily to the factors mentioned above, while expenditures were slightly below budgeted
levels.
The G.O. taxable improvement bonds 200B fund has a total fund balance of $503,628, all of which is
reserved for the retirement of related debt. The net decrease of $18,167 in fund balance is the result of
debt service payments.
The dedicated parks fund has total deficit fund balance of ($669,450), the result of the purchase of land
for a recreation complex in 1998. The net increase of $29,775 in fund balance is the direct result of
increased park dedication fees.
The area and unit charge fund has a total fund balance of $4,206,595, of which $957,112 is reserved for
advances to other funds, and $3,249,483 is unreserved and available for financing capital improvements.
The decrease in fund balance during the current year was $3,581,965 and was the result of funding
infrastructure projects within the city and transfers for capital projects and for debt service payments.
The municipal state aid fund has a total deficit fund balance of ($375,970), and an increase of $15,419
during the year. The increase in fund balance is primarily due project funding received from MnDOT.
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 of $12,720,946, of which $1,708,173 are unrestricted. The increase in
_ net assets of $1,233,139 was due to contributions from private sources and an operating transfer from a
capital projects fund..
16
City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2004
Total net assets in the sewer fund at the end of 2003 were $18,779,427, of which $3,036,702 was
unrestricted. Net assets increased $908,915 during the current year primarily due to contributions from
private sources.
The water and sewer rates remained the same in 2004 as in 2003. A rate study is planned for 2005.
GENERAL FUND BUDGETARY HIGHLIGHTS:
The original budget was amended twice during the year reflecting donations and grants received primarily
for police personnel and equipment.
Revenues were $228,801 over budget due mainly to property tax collections and increased permit
revenues. Charges for services and gas franchise fees were also over budget, while investment earnings
lagged the budget due to a weak investment environment. Expenditures came in under the budgeted
amounts by $214,258 due to lower than expected personal services costs and savings in other services
and charges. There were also net transfers from the general fund of $142,484. This resulted in a net
fund balance increase of $300,575 for the fiscal year.
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, 2004, amounts to $75,514,466 (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. The total increase in the City of Lino Lakes'
investment in capital assets (net of accumulated depreciation) was 2% percent. Most of this increase
within the governmental activities can be found in the addition of constructed streets and underground
infrastructure. Within the business -type activities the most significant increases occurred in infrastructure
installation in relation to the water and sewer funds.
Capital Assets at Year -end
(in millions)
Governmental Business -type
Activities Activities Totals
2004 2003 2004 2003 2004 2003
Land $3.09 $3.11 $ - $ -
Buildings 6.44 6.47 .05 .05
Office equipment and furniture .98 .97
Vehicles 1.47 1.35
Machinery and equipment .65 .62 .26 .29
Other .93 .93 -
Infrastructure 65.22 62.64 35.38 33.80
Subtotal 78.78 76.09 35.69 34.14
Accumulated depreciation 32.69 30.80 6.27 5.60
Capital assets, net $46.09 $45.29 $29.42 $28.54
17
$3.09 $3.11
6.49 6.52
.98 .97
1.47 1.35
.91 .91
.93 .93
100.60 96.44
114.47 110.23
38.96 36.40
$75.51 $73.83
Mma
MIMI
Imo
City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2004
Additional information on the City's capital assets can be found in the notes to the financial statements on
pages 33 -52.
Long -term debt. At the end of the current fiscal year, the City of Lino Lakes had total debt outstanding of
$20,049,000. Of this amount $5,764,000 comprises tax supported debt, $11,580,000 is special
assessment debt and $2,705,000 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.
G.O. tax supported debt
G.O. special assessment debt
G.O. revenue debt
Total
Debt Outstanding at Year -end
(in millions)
Governmental Business -type
Activities Activities
Totals
2004 2003 2004 2003 2004 2003
$ 5.76 $ 6.03
11.58 12.84
$17.34 $18.87
2.71
$2.71
2.97
$2.97
$ 5.76 $ 6.03
11.58 12,84
2.71 2.97
$20.05 $21.84
The City of Lino Lakes' total bonded debt decreased by $3,130,000 (17 percent) during the current fiscal
year. The key factor to the decrease was the refunding of the 1996A Improvement bonds that was called
and retired in February, 2004. There was one new bond issued in the current fiscal year, a $1,330,000
improvement bond and utility bond, which is supported by special assessments levied upon benefited
parcels.
The City of Lino Lakes received an upgrade to an Al rating from Moody's Investors Service for general
obligation debt. More detailed information on the City's long -term liabilities is presented in the notes to
the financial statements.
Additional information on the City's long -term debt can be found in the notes to the financial statements
on pages 33 -52.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES:
• The unemployment rate for the City of Lino Lakes is currently 5.0 percent, which is an increase
from a rate of 4.3 percent a year ago. This compares favorably to the state's average
unemployment rate of 5.0 percent and the national average of 6.0 percent.
• The City of Lino Lakes continues to see increased commercial /industrial construction growth.
Residential growth continues to be robust with an increase in the number of new home permits.
• 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, and are expected to remain at that level for the
foreseeable future.
• The Federal Reserve Board has begun to increase the fed funds rates, and interest rates are
expected to increase over the next year, which are expected to result in increases in the city's
investment earnings.
18
City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2004
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.
19
BASIC FINANCIAL STATEMENTS
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF NET ASSETS
December 31, 2004
Statement 1
Governmental Business -type
Activities Activities Total
ASSETS
- Cash and investments $ 14,401,281 $ 4,427,859 $ 18,829,140
Cash and investments with escrow agent 491,820 491,820
Accrued interest receivable 91,433 - 91,433
Accounts receivable 130,765 282,542 413,307
Due from other governments 874,519 - 874,519
Taxes receivable 174,954 174,954
Special assessments receivable 4,517,774 169,952 4,687,726
- Prepaid items 202,816 11,560 214,376
Capital assets:
Land 3,093,490 - 3,093,490
Other capital assets, net of depreciation 43,002,478 29,418,498 72,420,976
Total assets 66,981,330 34,310,411 101,291,741
LIABILITIES
- Accounts payable 539,033 37,658 576,691
Salaries payable 92,728 4,988 97,716
Retainage payable 113,710 113,710
Accrued interest payable 306,662 59,786 366,448
_
Due to other governments 8,239 - 8,239
Other accrued liabilities 3,311 4,238 7,549
Non - current liabilities:
- Due within one year 2,039,590 282,018 2,321,608
Due in more than one year 15,776,202 2,463,350 18,239,552
Total liabilities 18,879,475 2,852,038 21,731,513
WINM
Maga
NET ASSETS
Invested in capital assets, net of related debt 28,807,262 26,713,498 55,520,760
Restricted for:
Debt service 3,045,052 3,045,052
Unrestricted 16,249,541 4,744,875 20,994,416
Total net assets $ 48,101,855 $ 31,458,373 $ 79,560,228
The accompanying notes are an integral part of these basic financial statements.
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF ACTIVITIES
Year Ended December 31, 2004
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
$ 2,524,387
2,799,294
7,254,708
1,196,096
116,869
420,874
748,832
15,061,060
914,039
1,130,994
2,045,033
17,106,093
Charges for
Services
$ 122,861
1,049,858
454,191
242,857
11,763
28,952
Program Revenues
Operating
Grants and Capital Grants and
Contributions Contributions
$ 36,328 $
235,374
161,101
210,935
33,341
1,910,482 677,079
979,075
1,280,652
2,259,727
$ 4,170,209 $ 677,079
The accompanying notes are an integral part of these basic financial statements.
21
7,515,238
7,515,238
856,149
733,270
1,589,419
$ 9,104,657
General revenues:
Taxes:
Property taxes, levied for general purpose
Franchise Fees
Other taxes
Unrestricted investment earnings
Sale of Property
Transfers
Total general revenues and transfers
Change in net assets
Net assets- beginning
Net assets - ending
WIMP
Maw
Statement 2
Net (Expense) Revenue and Changes in Net Assets
Governmental Business -type
Activities Activities
Total
$ (2,365,198) $ $ (2,365,198)
(1,514,062) (1,514,062)
875,822 875,822
(742,304) (742,304)
(71,765) (71,765)
(391,922) (391,922)
(748,832) (748,832)
(4,95 8,261) (4,958,261)
921,185 921,185
882,928 882,928
1,804,113 1,804,113
(4,958,261) 1,804,113 (3,154,148)
6,520,919 6,520,919
108,672 108,672
688 - 688
221,302 34,833 256,135
1,280,957 1,280,957
(303,108) 303,108 -
7,829,430 337,941 8,167,371
2,871,169 2,142,054 5,013,223
45,230,686 29,316,319 74,547,005
$ 48,101,855 $ 31,458,373 $ 79,560,228
22
CITY OF LINO LAKES, MINNESOTA
BALANCE SHEET - GOVERNMENTAL FUNDS
December 31, 2004
G.O. Taxable Area and
Improvement Dedicated Unit
Assets General Bonds 2002B Parks Charge
Cash and investments $ 3,858,234 $ 503,628 $ 287,662 $ 3,323,864
Cash and investments with escrow agent
Accrued interest receivable 90,849
Accounts receivable 112,666 17,719
Due from other governmental units 191,171
Interfund receivable 995,600
Taxes receivable:
Delinquent 78,445
Due from County 70,103
Delinquent tax increment
Special assessments receivable:
Delinquent 31,887 4,798
Deferred 1,423,237 1,060,029
Due from County -
13,453
Prepaid items 142,492 - -
Advances to Other Funds 957,112
Total assets $ 5,539,560 $ 1,958,752 $ 287,662 $ 5,376,975
Liabilities and equity
Liabilities:
Interfund payable $ - $ $ $
Accounts payable 151,942 95,364
Salaries payable 92,291
Retainage payable 10,189
Due to other governmental units 6,417 - -
Advances from Other Funds - 957,112 -
Deferred revenue 78,445 1,455,124 - 1,064,827
Total liabilities 329,095 1,455,124 957,112 1,170,380
Fund Balances:
Reserved
Reserved for Prepaid Items 142,492 -
Reserved for Debt Retirement 503,628
Reserved for Advances to Funds - 957,112
Unreserved:
Designated:
General Fund 5,067,973
Special Revenue Funds -
Capital Projects Funds 3,249,483
Undesignated Reported in:
Special Revenue Funds
Debt Service Funds
Capital Projects Funds (669,450)
Total equity and other credits 5,210,465 503,628 (669,450) 4,206,595
Total liabilities and equity $ 5,539,560 $ 1,958,752 $ 287,662 $ 5,376,975
The accompanying notes are an integral part of these basic financial statements.
23
Statement 3
Other Total
Municipal Governmental Governmental
State Aid Funds Funds
$ $ 6,427,893 $ 14,401,281
491,820 491,820
584 91,433
380 130,765
683,348 874,519
995,600
13,561 92,006
12,130 82,233
715 715
16,134 52,819
1,966,650 4,449,916
1,586 15,039
1,718 144,210
957,112
$ $ 9,616,519 $ 22,779,468
Ifmoo
$ 232,089 $ 763,511 $ 995,600
112,286 179,441 539,033
437 92,728
31,595 71,926 113,710
1,822 8,239
957,112
1,997,059 4,595,455
375,970 3,014,196 7,301,877
Now
1,718 144,210
2,052,672 2,556,300
957,112
5,067,973
57,818 57,818
1,774,207 5,023,690
(202) (202)
452,972 452,972
(375,970) 2,263,138 1,217,718
(375,970) 6,602,323 15,477,591
$ $ 9,616,519 $ 22,779,468
Imes
24
INow
CITY OF LINO LAKES, MINNESOTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE
SHEET TO THE STATEMENT OF NET ASSETS
December 31, 2004
Total Fund Balances for Governmental Funds
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:
Statement 4
$ 15,477,591
Land 3,093,490
Buildings, Net of $1,472,741 Accumulated Depreciation 4,971,714
Office Equipment and Furniture, Net of $555,671 Accumulated Depreciation 427,144
Vehicles, Net of $687,300 Accumulated Depreciation 783,144
Machinery and Shop Equipment, Net of $404,323 Accumulated Depreciation 240,829
Equipment, Net of $443,798 Accumulated Depreciation 485,967
Infrastructure, Net of $29,130,999 Accumulated Depreciation 36,093,680 46,095,968
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. A total of $55,546 costs
have been incurred and are shown net of $2,932 accumulated amortization on the statement of net assets
as prepaid items.
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:
4,595,455
52,614
(306,662)
Bonds payable (17,344,000)
Unamortized premiums (3,311)
Unamortized discounts 5,992
Compensated absence payable (471,792) (17,813,111)
Total Net Assets of Governmental Activities $ 48,101,855
The accompanying notes are an integral part of these basic financial statements.
25
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - GOVERNMENTAL FUNDS
Year Ended December 31, 2004
G.O. Taxable Area and
Improvement Dedicated Unit
Revenue: General Bonds 2002B Parks Charge
General property taxes $ 5,354,282 $ $ $ -
Tax increments -
Licenses and permits 867,909
Intergovernmental 468,551 - -
Special assessments 8,345 246,881 544,358
Charges for services 199,404 - 198,904
Fines and forfeits 106,053 - -
Investment earnings 42,235 3,554 3,664 101,529
Refunds and reimbursements 38,771 - - -
Miscellaneous 115,992 212,535
Total revenue 7,201,542 250,435 216,199 844,791
Expenditures:
Current:
General government 2,136,371
Public safety 2,798,013 -
Public works 899,483 641,935
Parks, recreation and forestry 737,930 -
Conservation of natural resources 115,631
Capital outlay:
General government 28,874
Public safety 34,634 -
Public works - 43,448
Parks, recreation and forestry 105,924 -
Conservation of natural resources 7,547 -
Debt service:
Principal 170,000
Interest and fiscal charges 98,602
Total expenditures 6,758,483 268,602 105,924 685,383
Revenue over (under) expenditures 443,059 (18,167) 110,275 159,408
Other financing sources (uses): _
Transfer in
Transfer out (142,484) (80,500) (4,037,178)
Sale of property
Issuance of debt 297,159
Discount on bonds issued (1,354)
Payment to refunding bond escrow agent -
Total other financing sources (uses) (142,484) (80,500) (3,741,373)
Net increase (decrease) in fund balance 300,575 (18,167) 29,775 (3,581,965)
Fund balance
Beginning of year
4,909,890 521,795 (699,225) 7,788,560
Fund balance - December 31 $ 5,210,465 $ 503,628 $ (669,450) $ 4,206,595
The accompanying notes are an integral part of these basic financial statements.
26
Municipal
State Aid
1,879,220
Other
Governmental
Funds
$ 883,600
286,056
71,760
787,926
241,257
70,321
43,515
371,366
1,879,220 2,755,801
2,270,186
Statement 5
Total
Governmental
Funds
$ 6,237,882
286,056
867,909
2,419,531
1,587,510
639,565
106,053
221,303
82,286
699,893
13,147,988
125,537 2,261,908
2,798,013
1,314,974 5,126,578
217,015 954,945
115,631
28,874
166,586 201,220
128,274 171,722
105,924
7,547
1,790,000 1,960,000
699,803 798,405
2,270,186 4,442,189 14,530,767
(390,966) (1,686,388) (1,382,779)
5,283,306 5,283,306
(1,326,252) (5,586,414)
1,280,957 1,280,957
408,244 898,597 1,604,000
(1,859) (2,844) (6,057)
(1,170,000) (1,170,000)
406,385 4,963,764 1,405,792
15,419 3,277,376 23,013
(391,389) 3,324,947 15,454,578
(375,970) $ 6,602,323 $ 15,477,591
27
CITY OF LINO LAKES, MINNESOTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITIES
December 31, 2004
Statement 6
Net Change in Fund Balances -Total Governmental Funds $ 23,013
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. This is the amount by which capital outlays exceeded depreciation in the current
period.
Capital Outlays 3,688,412
Loss on Disposal of Capital Assets (20,334)
Proceeds from sales of capital assets (99,151)
Depreciation Expense (2,761,056) 807,871
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 general obligation bonds (1,330,000)
Issuance of equipment certificates (274,000)
Payment to Refunded Bond Escrow Agent 1,170,000
Bond discount 6,057
Bond issuance costs 21,787
Repayment of bond principal 1,960,000
Interest expense for general obligation bonds 30,342
Amortization of bond issuance costs (2,725)
Amortization of bond premium 235
Amortization of bond discount (66) 1,581,630
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, 2003 4,089,200
Deferred revenue - December 31, 2004 4,595,455 506,255
In the statement of activities, compensated absences 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 2004, compensated
absence payable increased.
(47,600)
Change in Net Assets of Governmental Activities $ 2,871,169
The accompanying notes are an integral part of these basic financial statements.
28
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF NET ASSETS - PROPRIETARY FUNDS
December 31, 2004
Statement 7
Assets
Current assets:
Cash and cash equivalents
Accounts receivable
Special assessments receivable:
Due from county
Prepaid items
Total current assets
Non - current assets:
Special assessments, long term
Capital assets:
Buildings
Equipment
Water and sewer systems
Total capital assets
Less: Allowance for depreciation
Net capital assets
Total assets
Liabilities
Current liabilities:
Accounts payable
Salaries payable
Other Accrued Liabilities
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 liabilities
Net Assets
Invested in Capital Assets, Net of Related Debt
Unrestricted
Total Net Assets
Total liabilities and fund equity
The accompanying notes are an integral part of these basic financial statements.
29
Water
$ 1,510,649
126,611
6,844
5,438
1,649,542
163,103
48,690
107,659
16,429,298
16,585,647
(2,867,874)
13,717,773
15,530,418
17,764
2,500
4,238
59,786
280,000
1,009
365,297
2,425,000
19,175
2,809,472
11,012,773
1,708,173
12,720,946
Sewer
$ 2,917,210
155,931
5
6,122
3,079,268
157,248
18,947,521
19,104,769
(3,404,044)
15,700,725
18,779,993
19,894
2,488
1,009
23,391
19,175
42,566
15,700,725
3,036,702
18,737,427
Totals
2004
$ 4,427,859
282,542
6,849
11,560
4,728,810
163,103
48,690
264,907
35,376,819
35,690,416
(6,271,918)
29,418,498
34,310,411
37,658
4,988
4,238
59,786
280,000
2,018
388,688
2,425,000
38,350
2,852,038
26,713,498
4,744,875
31,458,373
$ 15,530,418 $ 18,779,993 $ 34,310,411
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS - PROPRIETARY FUNDS
Year Ended December 31, 2004
Statement 8
Water
Totals
Sewer 2004
Operating revenue:
Charges for services $ 897,120 $ 1 ,260,342 $ 2,1 57,462
Hook -up charges 25,250 20,310 45,560
Water meter sales 54,460 54,460
Other operating revenue 2,245 2,245
Total operating revenue 979,075 1,280,652 2,259,727
Operating expenses:
Personal services 165,855 157,159 323,014
Materials and supplies 160,592 11,261 171,853
Contractual services 37,001 58,961 95,962
MCES sewer charges 495,023 495,023
Depreciation 322,835 376,800 699,635
Utilities 62,845 22,859 85,704
Other 16,682 8,931 25,613
Total operating expenses 765,810 1,130,994 1,896,804
Net income (loss) from operations 213,265 149,658 362,923
Other income (expense):
Investment earnings 8,846 25,987 34,833
Special assessments 13,966 128 14,094
Bond interest (144,860) (144,860)
Paying agent fees (3,369) - (3,369)
Total other income (expense) (125,417) 26,115 (99,302)
Net income before contributions and transfers 87,848 175,773 263,621
Contributions and transfers:
Contributions from private sources 842,183 733,142 1,575,325
Transfer from Capital Projects Fund 303,108 - 303,108
Total contributions and transfers 1,145,291 733,142 1,878,433
Net income (loss) 1,233,139 908,915 2,142,054
Net Assets - January 1 11,487,807 17,828,512 29,316,319
Net Assets - December 31 $ 12,720,946 $ 18,737,427 $ 31,458,373
The accompanying notes are an integral part of these basic financial statements.
30
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
Year Ended December 31, 2004
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:
Transfer from Capital Project Funds
Net cash flows from noncapital financing activities
Water
Sewer
Totals
2004
$ 1,016,881 $ 1,276,046 $ 2,292,927
(297,030) (590,320) (887,350)
(164,695) (157,135) (321,830)
555,156 528,591 1,083,747
303,108
303,108
Cash flows from capital and related financing activities:
Principal paid on revenue bonds (265,000)
Collection of special assessments 24,084
Interest and paying agent fees on revenue bonds (153,460)
Acquisition of capital assets -
Net cash flows from capital and related financing activities (394,376)
Cash flows from investing activities:
Interest on investments 8,846
472,734
1,037,915
Net increase in cash and cash equivalents
Cash and cash equivalents - January 1
Cash and cash equivalents - December 31
25,987
25,987
2,561
(2,735)
(174)
329,095
329,095
(265,000)
26,645
(153,460)
(2,735)
(394,550)
8,846
554,404 1,027,138
2,362,806 3,400,721
$ 1,510,649 $ 2,917,210 $ 4,427,859
Reconciliation of Operating Income (Loss) to Net Cash
from Operating Activities:
Operating income (loss) $ 213,265
Adjustments to reconcile operating income to
net cash flows from operating activities:
Depreciation 322,835
Change in assets and liabilities:
Decrease (increase) in receivables 37,806
Decrease (increase) in prepaid items (145)
Increase (decrease) in payables (18,605)
Net cash flows from operating activities $ 555,156
- Water lines in the amount of $842,183 were contributed to the Water Fund in 2004.
- Sewer lines in the amount of $733,141 were contributed to the Sewer Fund in 2004.
The accompanying notes are an integral part of these basic financial statements.
31
149,658
376,800
(4,606)
(618)
7,357
$ 528,591
362,923
699,635
33,200
(763)
(11,248)
$ 1,083,747
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF NET ASSETS - FIDUCIARY FUNDS
December 31, 2004
Statement 10
Assets
Cash and investments
Deposits receivable
Totals
2004
$ 1,432,706
10,520
Total assets $ 1,443,226
Liabilities
Accounts payable
Deposits payable
$ 79,095
1,364,131
Total liabilities $ 1,443,226
The accompanying notes are an integral part of these financial statements.
32
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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
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 fmancial 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.
Eliminations have been made to minimize the double - counting of internal 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.
33
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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 activity 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 2002B Fund
The general obligation improvement bonds 2002B fund accounts for the accumulation of resources for,
and the payment of, interest, principal and related costs on general long -term debt.
Dedicated Parks Fund
The dedicated parks fund accounts for the receipts and use of monies collected from dedicated parks
fees.
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.
34
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. BASIC FINANCIAL STATEMENTS (CONTINUED)
2. Fund Financial Statements (Continued)
Municipal State Aid Fund
The municipal state aid fund accounts for the collection of assessments on municipal state aid projects.
The City reports the following major proprietary fiends:
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.
C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING
The government -wide, proprietary fund, and fiduciary fund financial statements are reported using the
economic resources measurement focus and the accrual basis of accounting. 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.
35
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING (CONTINUED)
Proprietary funds distinguish operating revenues and expenses from nonoperating item. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connections 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 depattuient based upon detailed budget estimates for individual expenditure
accounts.
4. The City Administrator is authorized to transfer appropriations within any department budget.
Additional interdepartmental or interfund appropriations and deletions are or may be authorized by
the City Council with fund (contingency) reserves or additional revenues.
5. Formal budgetary integration is employed as a management control device during the year for the
General Fund.
36
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E. LEGAL COMPLIANCE — BUDGETS (CONTINUED)
6. Legal debt obligation indentures determine the appropriation level and debt service tax levies for
the Debt Service Funds. Supplementary budgets are adopted for the Proprietary Funds to
determine and calculate user charges. These debt service and budget amounts represent general
obligation bond indenture provisions and net income for operation and capital maintenance and are
not reflected in the financial statements.
7. A capital improvement program is reviewed periodically by the City Council for the Capital
Project Funds. However, appropriations for major projects are not adopted until the actual bid
award of the improvement. The appropriations are not reflected in the financial statements.
8. Expenditures may not legally exceed budgeted appropriations at the total fund level. Monitoring
of budgets is maintained at the expenditure category level (i.e., personal services, supplies; other
services and charges; capital outlay) within each activity.
9. The City Council may authorize transfer of budgeted amounts between City funds.
F. CASH AND INVESTMENTS
Cash and investment balances from all funds are pooled and invested to the extent available in
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 m 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 as of the balance sheet date. Interest earnings are accrued at the
balance sheet date.
For purposes of the statement of cash flows the Proprietary Fund considers all highly liquid investments
with a maturity of three months or less when purchased to be cash equivalents. All of the cash and
investments allocated to the proprietary fund types have original maturities of 90 days or less.
Therefore, the entire balance in such fund types is considered cash equivalents.
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.
37
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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 fmance 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 fmance
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 2004 totaled
$809,569. 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 fmance expenditures of the current fiscal period. In
practice, current and delinquent special assessments received by the City are recognized as revenue for
the current year. Special assessments are collected by the County and remitted by December 31
(remitted to the City the following January) and are also recognized as revenue for the current year. All
remaining delinquent, deferred and special deferred assessments receivable in governmental funding
are completely offset by deferred revenues. Deferred revenue in governmental activities is susceptible
to full accrual on the government-wide statements.
38
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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 of 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 fmancial 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 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.
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.
39
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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 fmancial 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
reported as prepaid items and 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 on other
financing source. 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.
40
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 2 DEPOSITS AND INVESTMENTS
DEPOSITS
In accordance with Minnesota Statutes, the City maintains deposits at those depository banks
authorized by the City Council, all of which are members of the Federal Reserve System.
Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral.
The market value of collateral pledged must equal 110% of the deposits not covered by insurance or
bonds.
Authorized collateral includes the legal investments described below and certain other state or local
government obligations. Minnesota Statutes require that securities pledged as collateral be held in
safekeeping by the City Treasurer or m a financial institution other than that furnishing the collateral.
At year -end, the carrying amount of the City's deposits was $462,836 and the bank balance was
$583,695. The entire bank balance was covered by Federal depository insurance or by collateral held
by the City's agent in the City's name.
INVESTMENTS
Minnesota Statutes authorize the City to invest in the following:
a) Direct obligations or obligations guaranteed by the United States or its agencies, its
instrumentalities, or organizations created by an act of congress, excluding mortgage - backed
securities defined as high risk.
b) Shares of investment companies registered under the Federal Investment Company Act of 1940
and whose only investments are in securities described in (a) above, general obligation tax - exempt
securities, or repurchase or reverse repurchase agreements.
c) General obligations of the State of Minnesota or any of its municipalities.
d) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System.
e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the
highest quality, and maturing in 270 days or less.
f) Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve
System with capitalization exceeding $10,000,000; a primary reporting dealer in U.S. government
securities to the Federal Reserve Bank of New York; certain Minnesota securities broker - dealers;
or, a bank qualified as a depositor.
41
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 2 DEPOSITS AND INVESTMENTS (CONTINUED)
Cash and Investment balances as of December 31, 2004 are as follows:
Carrying
Custodial Credit Risk Category and Fair
1 2 3 Value
Negotiable Certificates of Deposit $ 4,275,774 4,275,774
Commercial Paper 6,199,194 6,199,194
Municipal Bonds 554,000 554,000
U.S. Government & Agency Securities 7,086,838 7,086,838
$ 18,115,806 18,115,806
Investments not subject to categorization:
Mutual Funds 1,725,646
Money Market Funds 448,558
Total Investments 20,290,010
Deposits 462,836
Cash on Hand 820
Total Cash and Investments $ 20,753,666
Reconciliation of Cash and Investments to the Balance Sheet:
Cash and Investments - Governmental Balance Sheet 14,401,281
Cash and Investments with Escrow Agent - Governmental Balance Sheet 491,820
Cash and Investments - Statement of Fiduciary Net Assets 1,432,706
Cash and Investments - Statement of Proprietary Fund Net Assets 4,427,859
Total Cash and Investments $ 20,753,666
The City's investments are categorized above to give an indication of the level of custodial credit risk
assumed at year-end. Category 1 includes investments that are insured or registered or for which the
securities are held by the City or its agent in the City's name. Category 2 includes uninsured or
unregistered investments for which the securities are held by the counterparty's trust depat Unent or
agent in the City's name. Category 3 includes uninsured and unregistered investments for which the
securities are held by the counterparty or by its trust department or agent but not in the City's name.
Cash and investments with escrow agent consist of undisbursed proceeds of the Public Project Bonds
of 1999C and the Lease Revenue Bonds of 1998 which are restricted for the payment of debt associated
with the City's fire station and the payment for construction and capitalized interest costs of the Civic
Complex, respectively.
42
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 3 CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2004 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
Infrastructure
Total Capital Assets, Being Depreciated
Accumulated Depreciation for:
Buildings
Office Equipment and Furniture
Vehicles
Machinery and Shop Equipment
Other
Infrastructure
Total Accumulated Depreciation
Total Capital Assets, Being Depreciated, Net
Governmental Activities Capital Assets, Net
Beginning
Balance
Increases
$ 3,113,490 $ -
3,113,490 -
Decreases
Ending
Balance
(20,000) $ 3,093,490
(20,000) 3,093,490
6,470,929 14,926 (41,400) 6,444,455
965,000 23,129 (5,314) 982,815
1,346,258 205,449 (81,264) 1,470,443
618,889 32,960 (6,698) 645,151
929,765 - 929,765
62,640,392 3,411,948 (827,660) 65,224,680
72,971,233 3,688,412 (962,336) 75,697,309
(1,269,088) (216,073) 12,420 (1,472,741)
(476,327) (84,658) 5,314 (555,671)
(615,064) (151,769) 79,534 (687,299)
(375,699) (35,321) 6,698 (404,322)
(390,395) (53,403) (443,798)
(27,670,053) (2,219,832) 758,885 (29,131,000)
(30,796,626) (2,761,056) 862,851 (32,694,831)
42,174,607 927,356 (99,485) 43,002,478
$ 45,288,097 $ 927,356 $ (119,485) $ 46,095,968
Depreciation expense was charged to governmental functions as follows:
Governmental Activities:
General government
Public safety
Public services
Parks, recreation and forestry
Community development
Total Depreciation Expense, Governmental Activities
Beginning
Balance
Business -Type Activities:
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
Business -Type Capital Assets, Net
$ 269,050
92,835
2,247,590
149,448
2,133
$ 2,761,056
Increases
Decreases
Ending
Balance
$ 48,690 $ $ - $ 48,690
292,497 2,735 (30,325) 264,907
33,801,495 1,575,324 - 35,376,819
34,142,682 1,578,059 (30,325) 35,690,416
(48,690) - (48,690)
(205,329) (15,482) 30,325 (190,486)
(5,348,590) (684,152) - (6,032,742)
(5,602,609) (699,634) 30,325 (6,271,918)
$ 28,540,073 $ 878,425 $ - $ 29,418,498
43
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 4 CITY INDEBTEDNESS
City indebtedness at December 31, 2004 is composed of the following:
Final
Issue Maturity Interest Original Payable
Date Date Rate Issue 12/31/2004
General Obligation Bonds:
2002 Equipment Certificates 2/1/2002 12/31/2005 6.00% $ 140,000 $ 45,000
2003A Equipment Certificates 2/1/2003 12/31/2006 6.00% 130,000 85,000
2003B Equipment Certificates 3/31/2003 12/31/2006 4.00% 200,000 150,000
2004A Equipment Certificates 2/1/2004 12/31 /2006 4.00% 274,000 274,000
Civic Complex Lease Rev. Bonds - 98A 8/1/1998 2/1/2019 4.20 % -5.35% 5,350,000 4,615,000
Public Project Revenue Ref. Bonds - 99C 9/1/1999 2/1/2010 4.75% -5.10% 980,000 595,000
Total General Obligation Bonds 7,074,000 5,764,000
Special Assessment Bonds:
G.O. Improvement Refunding Bonds, 8/1/1998 2/1/2015 4.50 % -4.90% 4,310,000 3,150,000
Serie 1998A
G.O. Improvement Refunding Bonds, 8/1/1998 2/1/2015 4.50 % -4.90% 2,000,000 1,550,000
Series 1998B
G.O. Improvement Refunding Bonds, 9/1/1999 2/1/2006 4.25 % - 4.70% 1,725,000 720,000
Series 1999A
G.O. Improvement Bonds, 8/1/2002 2/1/2013 3.00 % - 4.10% 645,000 550,000
Series 2002A
G.O. Improvement Bonds, 8/1/2002 2/1/2013 3,20% -5.55% 2,110,000 1,940,000
Series 2002B
G.O. Improvement Refunding Bonds, 12/1/2003 2/1/2019 3.00 % -4.10% 2,090,000 2,090,000
Series 2003A
G.O. Improvement Bonds, 12/1/2003 2/1/2014 3.20 % -5.55% 250,000 250,000
Series 2003B
G.O. Improvement and Utility Bonds, 11/15 /2004 2/1/2020 I.90% -4.45% 1,330,000 1,330,000
Series 2004A
Total Special Assessment Bonds 14,460,000 11,580,000
Revenue Bonds:
G.O. Water Revenue Bonds, 10/1/1996 2/1/2012 4.I0% -5,70% 3,320,000 2,285,000
Series 1996B
G.O. Water Revenue Bonds, 9/1/1999 2/1/2008 4.25% -4.90% 680,000 420,000
Series I999B
Total Revenue Bonds 4,000,000 2,705,000
Total - All Bonds 25,534,000 20,049,000
Compensated Absences Payable N/A 512,160
Total lndebtedness $ 25,534,000 $ 20,561,160
44
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 4 CITY INDEBTEDNESS (CONTINUED)
The following is a schedule of changes in City indebtedness for the year ended December 31, 2004:
Payable Payable Due Within
12/31/2003 Issues Payments 12/31/2004 One Year
Bonded debt:
General obligation $ 6,030,000 $ 274,000 $ 540,000 $ 5,764,000 $ 536,000
Special assessment 12,840,000 1,330,000 2,590,000 11,580,000 1,480,000
Compensated absences payable - net 424,192 419,040 371,440 471,792 23,590
Total general long term debt 19,294,192 2,023,040 3,501,440 17,815,792 2,039,590
Proprietary Fund:
Revenue bond 2,970,000 - 265,000 2,705,000 280,000
Compensated absences -net 32,690 29,679 22,001 40,368 2,018
Total $ 22,296,882 $ 2,052,719 $ 3,788,441 $ 20.561,160 $ 2,321,608
All long -term bonded indebtedness outstanding at December 31, 2004 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.
Governmental Activities Business -Type Activities
Principal Interest Principal Interest Total
Years ending December 31,
2005 $ 2,016,000 $ 733,830 $ 280,000 5 136,990 $ 3,166,820
2006 2,120,000 656,580 295,000 122,868 3,194,448
2007 1,683,000 580,958 305,000 107,835 2,676,793
2008 1,230,000 520,416 325,000 91,733 2,167,149
2009 1,180,000 466,819 345,000 74,035 2,065,854
2010 2014 5,650,000 1,523,863 1,155,000 100,090 8,428,953
2015 - 2019 3,350,000 410,144 - 3,760,144
2020 115,000 2,372 - 117,372
Total $ 17,344,000 $ 4,894,982 $ 2,705,000 $ 633,551 $ 25,577,533
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.
Public Project Revenue Bonds and Civic Complex Lease Revenue Bonds - These bonds were issued by the
Economic Development Authority (EDA) of Lino Lakes for the purpose of financing the construction of public
facilities. Pursuant to Minnesota Statutes and a lease purchase contract between the EDA and the City of Lino
Lakes, a Trust Indenture between the EDA and a regional bank has been established for the purpose of financing
payment of these bonds. The City has pledged rental payments in amounts equal to the debt service
requirements and plans to annually appropriate City funds available for this purpose. As required by bond
covenant, a reserve account has been established with a trustee, which is to be used to pay principal and interest
on the bonds in the event that other available resources are inadequate to do so.
45
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL, STATEMENTS
December 31, 2004
Note 4 CITY INDEBTEDNESS (CONTINUED)
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 2004 and 2003 is computed as
follows:
Market value
Applicable percentage
Debt Limit
Amount of debt applicable to debt limit:
Total bonded debt
Less: Special assessment bonds
Public project revenue bonds
Revenue bonds
Total debt applicable to debt limit
Legal debt margin
December 31,
2004 2003
$ 1,430,803,500 $ 1,251,221,800
2.0% 2.0%
28,616,070 25,024,436
20,049,000 21,840,000
(11,580,000) (12,840,000)
(595,000) (680,000)
(2,705,000) (2,970,000)
5,169,000 5,350,000
$ 23,447,070 $ 19,674,436
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 Public Employees Retirement Fund (PERF) which is a cost - sharing, multiple -
employer retirement plan. This plan is established and administered in accordance with Minnesota
Statutes, Chapter 353 and 356.
PERF 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 m
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.
46
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 6 DEFINED BENEFIT PENSION PLANS — STATEWIDE (CONTINUED)
Two methods are used to compute benefits for PERF'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 percent
of average salary for each of the first 10 years of service and 2.7 percent for each remaining year. The
annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each of the first
10 years and 1.7 percent for each remaining year.
Under Method 2, the annuity accrual rate is 2.7 percent of average salary for Basic Plan members and
1.7 percent for Coordinated Plan members for each year of service. For PERF 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 I, 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 normal annuity is a
lifetime annuity that ceases upon the death of the retiree, no survivor annuity is payable. There are also
various types of joint and survivor annuity options available which will 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 fmancial report that includes financial statements and required
supplementary information for PERF. That report may be obtained on the web at 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.
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. PERF Basic Plan members and
Coordinated Plan members are required to contribute 9.10% and 5.10% respectively, of their annual
covered salary. The Commission is required to contribute the following percentages of annual covered
payroll: 11.78% for Basic Plan PERF members, and 5.53% for Coordinated Plan PERF members. The
City's contributions to the Public Employees Retirement Fund for the years ending December 31, 2004,
2003, and 2002 were $128,263, $124,431, and $120,190, respectively. The City's contributions to the
Public Employees Police & Fire Fund for the years ending December 31, 2004, 2003, and 2002 were
$146,820, $139,726, and $119,927, respectively. The City's contributions were equal to the
contractually required contributions for each year as set by state statute.
47
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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
Deficit Fund Balances
The City has deficit fund balances at December 31, 2004 as follows:
Fund Balance
Deficit
Economic Development Authority $ (202)
Dedicated Parks (669,450)
Municipal State Aid (375,970)
Tax Increment Financing 1 -10 (7,493)
Tax Increment Financing 1 -11 (22,899)
Birch Hodgson Street Improvement (22,873)
Legacy Woods Edge Improvement (97,290)
The City intends to fund these deficits through future tax levies, special assessment levies, tax increments,
transfers from other funds, and various other sources.
Note 9 CONTINGENCIES
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, 2004.
48
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 10 DEFERRED AD VALOREM TAX LEVIES - BONDED DEBT
General Obligation bond issues sold by the City are fmanced 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, 2004.
Future scheduled tax levies for all bonds outstanding at December 31, 2004 totaled $11,407,796.
Note 11 DESIGNATIONS AND RESERVATIONS OF FUND EQUITY
At December 31, 2004 and 2003, 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, 2004 and 2003 are shown on the various balance sheets as segregations of the fund equity. A
summary of such designations is as follows:
December 31,
2004 2003
General Fund:
Reserved for prepaid items $ 142,492 $ 133,921
Designated for cash flow reserve 5,067,973 4,775,969
Special Revenue Fund:
Reserved for prepaid items 1,718 1,759
Designated for recreation purposes 57,818 32,704
Debt Service Funds:
Reserved for debt retirement 2,556,300 2,482,184
Capital Projects Funds:
Reserved for advance to other funds 957,112 957,112
Reserved for land held for resale 989,506
Designated for capital improvements 5,023,690 9,935,876
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 2004 was
$93,935.
49
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 13 INTERFUND RECEIVABLE AND PAYABLES
Individual fund receivable and payable balances at December 31, 2004 are as follows:
Receivable Payable
General Fund $ 995,600 $
Capital Projects Funds:
Municipal State Aid - 232,089
1997 Construction 678,348
Tax Increment Financing 1 -10 6,463
Tax Increment Financing 1 -11 22,899
Legacy Woods Edge Improvement - 55,801
$ 995,600 $ 995,600
Interfund receivable and payable balances represent the elimination of negative cash between funds.
Note 14 INTERFUND TRANSFERS
Individual fund transfers for fiscal year 2004 are as follows:
Transfer In Transfer Out
Governmental Activity:
General Fund $ - $ (142,484)
Special Revenue Funds:
Economic Development Authority 615
Debt Service Funds:
Improvement Bonds of 1996A 1,171,657 (1,879)
Improvement Bonds of 1998A 398,000
Improvement Refunding Bonds of 1999A 270,000
Improvement Refunding Bonds of 2003A 1,879
Capital Projects Funds:
Dedicated Parks - (80,500)
Area and Unit (4,037,178)
Surface Water Management - (580,491)
1996 Construction (743,882)
1997 Construction 698,540
1998 Construction 2,662,115
Birch Hodgson Street Improvement 80,500
Total Governmental Activity 5,283,306 (5,586,414)
Business -Type Activity:
Water Fund 303,108
$ 5,586,414 $ (5,586,414)
Interfund transfers are other financing sources and uses within the fiord financial statements. The purpose of the
transfers are to provide funding for capital improvement projects, capital outlay, and debt service as well as
open and close funds.
50
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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 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, 2004, two series of Industrial Revenue Bonds were outstanding with aggregate remaining
principal balances of $1,815,000 and $3,200,000, respectively.
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 continues through June 30, 2009
and requires payments of $110 per square foot over the lease term for a total of $1,200,000. The schedule of
remaining payments is as follows:
Amount
2005 $ 112,500
2006 112,500
2007 112,500
2008 112,500
2009 75,000
Total $ 525,000
51
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 17 LEASE COMMITMENT (CONTINUED)
The prorated carrying value of the building being leased is as follows:
Building
Less Accumulated Depreciation
$ 929,970
(154,995)
Net 774,975
Note 18 JOINT FIRE VENTURE
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 2004, the City of Lino Lakes' contributions to the District were as follows:
Operating 370,523
Capital 68,500
Total 439,023
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, 2004 are as follows:
Total Assets $ 1,924,947
Total Liabilities 6,687
Total Net Assets 1,918,260
Total Operating Revenue 652,781
Total Operating Expenses 548,384
52
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 2004
Statement 11
Page 1 of 6
2004
Original Final
Budget Budget
Actual
Variance with
Final Budget
Positive (Negative)
Revenue:
General property taxes:
Current and delinquent $ 5,147,066 $ 5,253,566 $ 4,659,269 $ (594,297)
Fiscal disparities 694,995 694,995
Excess tax increments 18 18
Total general property taxes 5,147,066 5,253,566 5,354,282 100,716
Licenses and permits:
Non - business 746,000 746,000 832,796 86,796
Business 33,850 33,850 35,113 1,263
Total licenses and permits 779,850 779,850 867,909 88,059
Intergovernmental:
Federal:
Other 40,000 89,275 99,210 9,935
State:
Market Value Credit 1,564 1,564
Police state aid 120,000 120,000 128,470 8,470
MSA maintenance 160,000 160,000 161,101 1,101
Other 15,000 29,350 29,008 (342)
County/Regional:
Solid waste 35,000 35,000 33,341 (1,659)
Other 4,000 11,700 15,857 4,157
Total intergovernmental 374,000 445,325 468,551 23,226
Special Assessments:
Penalties and Interest 4,000 4,000 8,345 4,345
Charges for services:
General government 27,000 27,000 29,460 2,460
Planning/engineering 15,000 15,000 14,282 (718)
Fees retained from collection for
other governments - SAC /surcharge 4,000 4,000 4,080 80
Administrative charge - other funds 51,000 51,000 58,728 7,728
Aerial map charge - other funds 10,000 10,000 14,670 4,670
Public safety 76,000 76,000 78,184 2,184
Total charges for services 183,000 183,000 199,404 16,404
Fines and forfeits 100,000 100,000 106,053 6,053
Investment earnings 65,000 65,000 42,235 (22,765)
Refunds and reimbursements 45,000 45,000 38,771 (6,229)
Miscellaneous:
Gas franchise fees 60,000 60,000 93,935 33,935
Cable TV 20,000 20,000 14,737 (5,263)
Sale of property 7,000 7,000 - (7,000)
Donations 5,000 10,000 7,320 (2,680)
Total miscellaneous 92,000 97,000 115,992 18,992
Total revenue 6,789,916 6,972,741 7,201,542 228,801
53
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 2004
Statement 11
Page 2 of 6
2004
Original Final
Budget Budget
Actual
Variance with
Final Budget
Positive (Negative)
Expenditures:
General government:
Mayor and council:
Current
Personal services $ 39,622 $ 39,622 $ 35,708 $ 3,914
Supplies 400 400 279 121
Other services and charges 37,400 46,050 40,694 5,356
Contractual Services 27,000 27,000 27,177 (177)
Total mayor and council 104,422 113;072 103,858 9,214
Elections:
Current
Personal services 20,550 20,550 16,636 3,914
Supplies 300 300 466 (166)
Other services and charges 2,950 2,950 615 2,335
Contractual Services 1,000 1,000 42 958
Total elections 24,800 24,800 17,759 7,041
Administration:
Current
Personal services 406,497 406,497 392,588 13,909
Supplies 26 (26)
Other services and charges 23,000 23,000 15,055 7,945
Contractual Services 10,500 10,500 2,287 8,213
Total administration 439,997 439,997 409,956 30,041
Finance:
Current
Personal services 261,699 261,699 258,424 3,275
Supplies 1,500 1,500 1,145 355
Other services and charges 28,200 28,200 29,042 (842)
Contractual Services 78,150 78,150 73,944 4,206
Total finance 369,549 369,549 362,555 6,994
Cable TV:
Current
Personal services 3,024 3,024 1,719 1,305
Supplies 50 50 - 50
Capital outlay 500 500 - 500
Total cable TV 3,574 3,574 1,719 1,855
Consultants:
Current
Legal 149,000 149,000 160,609 (11,609)
Community Development:
Current
Personal services 151,247 151,247 150,421 826
Supplies 100 100 51 49
Other services and charges 4,015 4,015 3,357 658
Contractual Services 685 685 711 (26)
15 6, 04 7 15 6, 047 154,540 1,507
54
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 2004
Statement 11
Page 3 of 6
2004
Original Final
Budget Budget
Actual
Variance with
Final Budget
Positive (Negative)
General government: (continued)
Economic Development:
Current
Personal services $ 71,908 $ 71,908 $ 71,235 $ 673
Supplies 500 500 223 277
Other services and charges 8,750 8,750 5,754 2,996
Contractual services 15,700 122,200 118,716 3,484
Total economic development 96,858 203,358 195,928 7,430
Planning and zoning commission:
Current
Personal services 142,108 142,108 119,308 22,800
Supplies 150 150 117 33
Other services and charges 17,275 17,275 16,029 1,246
Contractual services 6,300 6,300 5,620 680
Total planning and zoning commission 165,833 165,833 141,074 24,759
Engineering/planning:
Current
Contractual services 180,000 180,000 181,334 (1,334)
Total engineering/planning 180,000 180,000 181,334 (1,334)
Senior Service
Current
Personal services 28,080 28,080 27,682 398
Other services and charges 1,000 1,000 956 44
Total charter commission 29,080 29,080 28,638 442
Charter commission:
Current
Other services and charges 950 950 2,373 (1,423)
Total charter commission 950 950 2,373 (1,423)
General government buildings:
Current
Personal services 81,061 81,061 76,247 4,814
Supplies 40,000 40,000 39,834 166
Other services and charges 270,365 270,365 237,139 33,226
Contractual services 17,000 17,000 22,808 (5,808)
Capital outlay 27,000 27,000 28,874 (1,874)
Total general government buildings 435,426 435,426 404,902 30,524
Total general government
2,155,536 2,270,686
55
2,165,245 105,441
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 2004
Statement 11
Page 4 of 6
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
Capital outlay
Total building inspection
Total public safety
2004
Original Final
Budget Budget
Actual
Variance with
Final Budget
Positive (Negative)
$ 1,953,554 $ 2,010,604 $ 2,016,315 $ (5,711)
28,034 28,034 30,206 (2,172)
66,260 66,260 79,104 (12,844)
20,264 20,264 21,853 (1,589)
19,490 38,765 33,342 5,423
2,087,602 2,163,927 2,180,820 (16,893)
365,327 365,327 370,523 (5,196)
270,081 270,081 268,973 1,108
660 660 438 222
10,275 10,275 10,121 154
550 550 480 70
900 900 1,292 (392)
282,466 282,466 281,304 1,162
2,735,395 2,811,720
2,832,647 (20,927)
Public works:
Streets:
Current
Personal services 421,058 421,058 386,445 34,613
Supplies 84,500 84,500 65,626 18,874
Other services and charges 67,425 67,425 60,701 6,724
Contractual services 110,510 110,510 109,861 649
Total streets 683,493 683,493 622,633 60,860
Fleet:
Current
Personal services 94,650 94,650 86,798 7,852
Supplies 132,000 132,000 157,424 (25,424)
Other services and charges 43,865 43,865 32,628 11,237
Contractual services 1,200 1,200 - 1,200
Total fleet 271,715 271,715 276,850 (5,135)
Total public works
955,208 955,208
56
899,483 55,725
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 2004
Statement 11
Page 5 of 6
2004
Original Final
Budget Budget
Actual
Variance with
Final Budget
Positive (Negative)
Parks and recreation:
Parks:
Current
Personal services $ 409,120 $ 409,120 $ 390,506 $ 18,614
Supplies 42,000 42,000 35,130 6,870
Other services and charges 33,360 33,360 32,089 1,271
Contractual services 11,800 11,800 14,300 (2,500)
Total parks 496,280 496,280 472,025 24,255
Recreation:
Current
Personal services 245,838 245,838 249,905 (4,067)
Supplies 2,500 2,500 3,182 (682)
Other services and charges 16,500 16,500 11,745 4,755
Contractual services 890 890 1,073 (183)
Total recreation 265,728 265,728 265,905 (177)
Total parks and recreation
762,008 762,008 737,930 24,078
Conservation of natural resources:
Forestry:
Current
Personal services 29,363 29,363 28,535 828
Supplies 1,200 1,200 1,090 110
Other services and charges 850 850 348 502
Contractual services 7,850 7,850 4,579 3,271
Capital outlay 25,000 25,000 3,990 21,010
Total forestry 64,263 64,263 38,542 25,721
Environmental:
Current
Personal services 28,293 28,293 27,966 327
Supplies 1,100 1,100 257 843
Other services and charges 9,140 9,140 6,608 2,532
Contractual services 4,100 4,100 2,622 1,478
Total environmental 42,633 42,633 37,453 5,180
57
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 2004
Statement 11
Page 6 of 6
2004
Original Final
Budget Budget
Actual
Variance with
Final Budget
Positive (Negative)
Conservation of natural resources: (continued)
Solid waste abatement:
Current
Personal services $ 25,722 $ 25,722 $ 26,957 $ (1,235)
Supplies - 110 (110)
Other services and charges 2,200 2,200 446 1,754
Contractual services 16,400 16,400 16,113 287
Capital outlay 5,000 5,000 3,557 1,443
Total solid waste abatement 49,322 49,322 47,183 2,139
Total conservation of natural resources 156,218 156,218 123,178 33,040
Other
Contingency 25,551 16,901 16,901
Total expenditures 6,789,916 6,972,741 6,758,483 214,258
Revenue over expenditures - - 443,059 443,059
Other financing sources (uses):
Transfer to Special Revenue Fund - (615) (615)
Transfer to Capital Project Fund - - (141,869) (141,869)
Total other financing sources (uses) - (142,484) (142,484)
Net increase (decrease) in fund balance $ - $ - 300,575 $ 300,575
Fund Balance - January 1
Fund balance - December 31
58
4,909,890
5,210,465
WNW
IMm
law
Nonmajor 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.
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.
SAC Revolving - to account for refunds from the Metropolitan Council Environmental Service for
properties that paid Sewer Area Charges (SAC) that will be collected in the future.
Construction Funds - to account for the construction of public improvements.
Town Center Project - to account for costs associated with the construction of the City Town Center
project.
Tax Increment - to account for development projects financed with tax increments.
Lake /Apollo Drive Improvement Fund - established to account for the costs of upgrading Lake Drive and
Apollo Drive east of Lake Drive for the Market Place development.
Capital Project Funds (Continued)
Twilight Acres/W. Shadow Pond Improvement Fund - established to account for the costs of
installing sewer infrastructure in the Twilight Acres area and to install utility and street
improvements on West Shadow Ponds Drive.
Birch Hodgson Street Improvement Fund — to account for costs to improve the intersection at
Birch Street and Hodgson Road.
Legacy Woods Edge Improvement Fund — to account for construction costs related to
infrastructure improvements in the Legacy Woods Edge development.
CITY OF LINO LAKES, MINNESOTA
COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS
December 31, 2004
Special Revenue Debt Service
Economic Special Improvement Improvement
Development Program Revenue Bonds of Bonds of
Authority Recreation SubTotal I996A 1998A
Assets
Cash and investments $ $ 63,644 $ 63,644 $ - $ 741
Cash and investments
with escrow agent -
Accrued Interest Receivable - -
Accounts receivable - 380 380
Due from other governmental units -
Interfund receivable
Taxes receivable:
Delinquent -
Due from County -
Delinquent tax increment
Special assessments receivable:
Delinquent - - 725
Deferred - - 204,670
Due from County 572
Prepaid Items - 1,718 1,718 -
Advances to Other Funds
Land held for resale
Total assets $ $ 65,742
Liabilities and Fund Balance
65,742 $ - $ 206,708
Liabilities:
lnterfund payable $ $ $ $
Accounts payable 5,971 5,971
Salaries Payable 202 235 437
Retainage payable -
Due to Other Governments
Advances from Other Funds - -
Deferred revenue 205,394
Total liabilities 202 6,206 6,408 - 205,394
Fund balance (deficit):
Reserved for Prepaid Items 1,718 1,718
Reserved for Debt Retirement -
Reserved for Advances to Funds
Reserved for land held for resale -
Unreserved:
Designated:
Recreation Programs 57,818 57,818
Capital improvements -
Undesignated (202) (202) 1,314
Total fund balance (deficit) (202) 59,536 59.334 1,314
Total liabilities and fund balance $ $ 65,742 $ 65,742 $ $ 206,708
59
Statement 12
Page 1 of 4
Debt Service (continued)
Lease Improvement Public Project Improvement
Improvement Certificates Revenue Refunding Refunding Improvement Refunding
Bonds of of Bonds Bonds Bonds Bonds of Bonds of
199813 Indebtedness of 1998A of 1999A of 1999C 2002A 2003A
$ 354,588 $ 82,555 385,091 $ 3,174 $ 325,872 397,032 $ 278,094
481,485 10,335
584
2,248 4,513 4,801
1,930 3,815 4,071
1,999
1,754
167 460 5,027 183
294,999 7,363 174,114 322,634
5 382 525
653,937 90,883 876,032 10,997 339,960 576,555 $ 601,436
297,414
297,414
4,513
4,513
4,801 7,824 1,999 179,141 322,817
4,801 7,824 1,999 179,141 322,817
356,523 86,370 871,231 3,173 337,961 397,414
278,619
356,523 86,370 871,231 3,173 337,961 397,414 278,619
653,937 $ 90,883 876,032 10,997 $ 339,960 $ 576,555 601,436
CITY OF LINO LAKES, MINNESOTA
COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS
December 31, 2004
Debt Service (continued) Capital Projects
Improvement and
Improvement Utility Revenue Debt Capital Closed
Bonds of Bonds of Service Improvement Bond
2003B 2004A SubTotal Projects Fund
Assets
Cash and investments $ 76,622 $ 96,416 $ 2,000.185 $ 694,178 $ 982,917
Cash and investments
with escrow agent - - 491,820 -
Accrued Interest Receivable - 584
Accounts receivable -
Due from other governmental units - - - -
Interfund receivable
Taxes receivable:
Delinquent 13,561
Due from County 11,570
Delinquent tax increment - -
Special assessments receivable:
Delinquent 6,535 - 13,097 1,039
Deferred 51,321 627,578 1,682,679 21,865
Due from County - 1,484
Prepaid Items -
Advances to Other Funds - -
Land held for resale - -
Total assets
Liabilities and Fund Balance
$ 134,478 $ 723,994 $ 4,214,980 $ 694,178 $ 1,005,821
Liabilities:
Inter fund payable $ $ $ $ - $
Accounts payable - 1,587 6,728
Salaries Payable - -
Retainage payable
Due to Other Govemments
Advances from Other Funds - -
Deferred revenue 57,855 627,578 1,709,336 22,904
Total liabilities 57,855 627,578 1,709,336 1,587 29,632
Fund balance (deficit):
Reserved for Prepaid Items
Reserved for Debt Retirement - 2,052,672
Reserved for Advances to Funds -
Reserved for land held for resale -
Unreserved:
Designated:
Recreation Programs -
Capital improvements - - - -
Undesignated 76,623 96,416 452,972 692,591
Total fund balance (deficit) 76,623 96,416 2,505,644 692,591
976,189
976,189
Total liabilities and fund balance $ 134,478 $ 723,994 $ 4,214,980 $ 694,178 $ 1,005,821
61
Statement 12
Page 2 of 4
Capital Projects (Continued)
Surface
Street Water SAC Interim 1996 1997
Reconstruction Sealcoating Management Revolving Construction Construction Construction
$ 562,462 $ 78,639 $ 648,957 $ 365,899 $ 274,356
281
1,566
5,000
1,717
260,540
102
678,348
562,462 $ 80,486 $ 916,316 $ 365,899 $ 274,356 $ $ 678,348
15,434
15,434
66
$ $ $ $ $ 678,348
65,636
4,412
1,350
1,847 262,257 -
1,913 332,305 1,350 - - 678,348
547,028 78,573 584,011 - 274,356
- - - 364,549 -
547,028 78,573 584,011 364,549 274,356
562,462 $ 80,486 $ 916,316 $ 365,899 $ 274,356 $ $ 678,348
CITY OF LINO LAKES, MINNESOTA
COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS
December 31, 2004
Assets
Cash and investments
Cash and investments
with escrow agent
Accrued Interest Receivable
Accounts receivable
Due from other governmental units
Interfund receivable
Taxes receivable:
Delinquent
Due from County
Delinquent tax increment
Special assessments receivable:
Delinquent
Deferred
Due from County
Prepaid Items
Advances to Other Funds
Land held for resale
Capital Projects (continued)
Town Town Lake /Apollo Dr Twilight Acres/
1998 Center Center Improvement W Shadow Pond
Construction Project Infrastructure Market Place Improvement
193,393 $ 21,633 $ 42,321 $ 187,316
Total assets $ - $ 193,393 $ 21,633 $ 42,321
Liabilities and Fund Balance
187,316
Liabilities:
Interfund payable $ $ - $ - $ $
Accounts payable - 3,412 - -
Salaries Payable - -
Retainage payable - - 39,254
Due to Other Governments - - - -
Advances from Other Funds
Deferred revenue
Total liabilities - 3,412 - 39,254
Fund balance (deficit):
Reserved for Prepaid Items - -
Reserved for Debt Retirement
Reserved for Advances to Funds
Reserved for land held for resale -
Unreserved:
Designated:
Recreation Programs - - -
Capital improvements - 21,633 -
Undesignated 189,981 - 42,321 148,062
Total fund balance (deficit) 189,981 21,633 42,321 148,062
Total liabilities and fund balance $ $ 193,393 $ 21,633 $ 42,321 $ 187,316
63
Statement 12
Page 3 of 4
Capital Projects (Continued)
Tax Tax Tax Tax Tax Tax
Increment Increment Increment Increment Increment Increment Birch Street
Financing Financing Financing Financing Financing Financing Hodgson Road
1-4 1-5 1-8 1-9 1-10 1-11 Improvement
33,096 $ 24,901 8,465 $ 213,213 $ 32,318
33,096
84 476
134 581
24,901 8,683
214,270 32,318
6,463 22,899
390 8,549 868 1,030 26,931
1,822
134 581
2,212 8,683 1,449 7.493
28,260
22,899 55,191
. ..
33,096 22,689 212,821 -
- - (7,493) (22,899) (22,873)
33,096 22,689 212,821 (7,493) (22,899) (22,873)
$ 33,096 $ 24,901 8,683 $ 214,270 $ $ 32,318
CITY OF LINO LAKES, MINNESOTA Statement 12
COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS Page 4 of 4
December 31, 2004
Capital Projects (continued)
Legacy Woods Capital
Edge Projects
Improvement SubTotal
Assets
Total
2004
Cash and investments $ $ 4,364,064 $ 6,427,893
Cash and investments
IMP
with escrow agent 491,820
Accrued Interest Receivable 584
Accounts receivable - 380
Due from other governmental units 683,348 683,348
Interfund receivable - -
Taxes receivable:
Delinquent - 13,561
Due from County 560 12,130
Delinquent tax increment 715 715
Special assessments receivable:
Delinquent 3,037 16,134
Deferred 283,971 1,966,650
Due from County 102 1,586
Prepaid Items - 1,718
Advances to Other Funds -
Land held for resale
IMO
Total assets
Liabilities and Fund Balance
$ $ 5,335,797 $ 9,616,519
Liabilities:
Interfund payable $ 55,801 $ 763,511 $ 763,511
Accounts payable 41,489 173,470 179,441
Salaries Payable 437
Retainage payable 71,926 71,926
Due to Other Governments 1,822 1,822
Advances from Other Funds -
Deferred revenue 287,723 1,997,059
Total liabilities 97,290 1,298,452 3,014,196
Fund balance (deficit):
Reserved for Prepaid Items 1,718
Reserved for Debt Retirement 2,052,672
Reserved for Advances to Funds -
Reserved for land held for resale
Unreserved:
Designated:
Recreation Programs - 57,818
Capital improvements 1,774,207 1,774,207
Undesignated (97,290) 2,263,138 2,715,908
Total fund balance (deficit) (97,290) 4,037,345 6,602,323
Total liabilities and fund balance $ $ 5,335,797 $ 9,616,519
CITY OF LINO LAKES, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS
Year Ended December 31, 2004
Special Revenue Debt Service
Economic Special Improvement Improvement
Development Program Revenue Bonds of Bonds of
Authority Recreation Sub Total 1996A 1998A
Revenue:
General property taxes $ $ $ - $
Tax increments -
Intergovernmental - -
Special assessments 4,706 32,680
Charges for services 241,257 241,257 - -
Investment earnings 831 831 1,879
Refunds and reimbursements -
Miscellaneous
Total revenue 242,088 242,088 6,585 32,680
Expenditures:
Current:
General government: 817 817
Public works: -
Parks, recreation and forestry 217,015 217,015
Capital outlay:
Public safety -
Public works
Debt service:
Principal 400,000 290,000
Interest and fiscal charges 39,874 153,817
Total expenditures 817 217,015 217,832 439,874 443,817
Revenue over (under) expenditures (817) 25,073 24,256 (433,289) (411,137)
Other financing sources (uses):
Transfer from General Fund 615 615 -
Transfer from Capital Project Funds 1,171,657 398,000
Transfer from Debt Service Funds -
Transfer to Debt Service Funds (1,879)
Transfer to Capital Project Funds
Sale of property
Issuance of debt
Discount on bonds issued -
Payment made to refunding bond escrow agent (1,170,000)
Total other financing sources (uses) 615 615 (222) 398,000
Net increase (decrease) in fund balance (202) 25,073 24,871 (433,511) (13,137)
Fund balance (deficit)
Beginning of year 34,463 34,463 433,511 14,451
Fund balance (deficit) - December 31 (202) 59,536 59,334 $ 1,314
66
Statement 13
Page 1 of 4
Debt Service (continued)
Lease Improvement Public Project Improvement
Improvement Certificates Revenue Refunding Refunding Improvement Refunding
Bonds of of Bonds Bonds Bonds Bonds of Bonds of
1998B Indebtedness of 1998A of 1999A of 1999C 2002A 2003A
$ 147,523 $ 291,399 $ 310,868
57,057 517 546
2,324 1,310 5,142
112,500
206,904 293,226 429,056
$ 133,810
7,898 209 306,505 85,743
2,457
7,898 136,476
115,000 250,000 205,000 350,000
76,311 40,951 243,382 44,344
191,311 290,951 448,382 394,344
15,593 2,275 (19,326) (386,446)
270,000
2,361 2,310
308,866 88,053
85,000 95,000
33,348 21,807 38,068
118,348 116,807 38,068
18,128
192,059 49,985
1,879
270,000 - 1,879
15,593 2,275 (19,326) (116,446) 18,128 192,059 51,864
340,930 84,095 890,557 119,619 319.833 205,355 226,755
356,523 $ 86,370 $ 871,231 $ 3,173 $ 337,961 $ 397,414 $ 278,619
67
CITY OF LINO LAKES, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS
Year Ended December 31, 2004
Debt Service (continued) Capital Projects
Improvement and
Improvement Utility Revenue Debt Capital Closed
Bonds of Bonds of Service Improvement Bond
2003B 2004A SubTotal Projects Fund
Revenue:
General property taxes $ - $ $ 883,600 $ $
Tax increments
Intergovernmental - -
Special assessments 83,502 86,689 666,052 3,926
Charges for services - - - -
Investment earnings 330 1,154 19,267 6,282 9,721
Refunds and reimbursements - - -
Miscellaneous - 112,500 234,278
Total revenue 83,832 87,843 1,681,419 240,560 13,647
Expenditures:
Current:
General government: - - 2,849 12,659
Public works: - -
Parks, recreation and forestry -
Capital outlay:
Public safety - - - 166,586 -
Public works - 128,274
Debt service:
Principal - - 1,790,000
Interest and fiscal charges 7,901 699,803
Total expenditures 7,901 2,489,803 297,709 12,659
Revenue over (under) expenditures 75,931 87,843 (808,384) (57,149) 988
Other financing sources (uses):
Transfer from General Fund -
Transfer from Capital Project Funds 1,839,657
Transfer from Debt Service Funds - - 1,879 - -
Transfer to Debt Service Funds - (1,879)
Transfer to Capital Project Funds -
Sale of property - - - -
Issuance of debt 8,612 8,612 274,000 -
Discount on bonds issued (39) (39) -
Payment made to refunding bond escrow agent - (1,170,000)
Total other financing sources (uses) 8,573 678,230 274,000
Net increase (decrease) in fund balance 75,931 96,416 (130,154) 216,851 988
Fund balance (deficit)
Beginning of year 692 2,635,798 475,740 975,201
Fund balance (deficit) - December 31 $ 76,623 $ 96,416 $ 2,505,644 $ 692,591 $ 976,189
68
Statement 13
Page 2 of 4
Street
Reconstruction
Capital Projects
Sealcoating
Surface
Water SAC Interim 1996 1997
Management Revolving Construction Construction Construction
71,760 - -
1,217 116,731
5,525 1,140 13,410 3,650 2,710 4,091
43,515 - - - -
25,500 -
102,785 45,872 130,141 3,650 2,710 4,091
43,501
70,872
386,758
5,400
43,501 70,872 386,758 5,400
59,284 (25,000) (256,617) (1,750) 2,710 4,091
(743,882)
(580,491) - -
698,540
(580,491) - (743,882) 698,540
59,284 (25,000) (837,108) (1,750) 2,710 (739,791) 698,540
487,744 103,573 1,421,119 366,299 271,646 739,791 (698,540)
$ 547,028 $ 78,573 $ 584,011 $ 364,549 $ 274,356 $ $
69
CITY OF LINO LAKES, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS
Year Ended December 31, 2004
Revenue:
General property taxes
Tax increments
Intergovernmental
Special assessments
Charges for services
Investment earnings
Refunds and reimbursements
Miscellaneous
Total revenue
Expenditures:
Current:
General government:
Public works:
Parks, recreation and forestry
Capital outlay:
Public safety
Public works
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Capital Projects (Continued)
Town Town Lake/Apollo Dr Twilight Acres/
1998 Center Center Improvement W Shadow Pond
Construction Project Infrastructure Market Place Improvement
(912)
(912)
8,744
8,744
213 418
1,912
213 418 1,912
Revenue over (under) expenditures (9,656) 213 418 1,912
Other financing sources (uses):
Transfer from General Fund 141,869
Transfer from Capital Project Funds 2,520,246
Transfer from Debt Service Funds -
Transfer to Debt Service Funds
Transfer to Capital Project Funds
Sale of property 1,280,957
Issuance of debt -
Discount on bonds issued - -
Payment made to refunding bond escrow agent
Total other financing sources (uses) 2,662,115 1,280,957
Net increase (decrease) in fund balance 2,662,115 1,271,301
Fund balance (deficit)
Beginning of year
Fund balance (deficit) - December 31
(2,662,115) (1,081,320)
213
21,420
$ 189,981 $ 21,633
70
418 1,912
41,903 146,150
42,321 $ 148,062
Statement 13
Page 3 of 4
Capital Projects (Continued)
Tax Increment Tax Increment Tax Increment Tax Increment Tax Increment Tax Increment Birch Street
Financing Financing Financing Financing Financing Financing Hodgson Road
1-4 1-5 1-8 1-9 1-10 1-1 I Improvement
60,083
22,031
203,942
- - -
327 204 620
- - -
327 60,287 22,031 204,562
54,829
8,971 8,608
1,373 21,287
716,553
54,829 8,971 8,608 1,373 21,287 716,553
327 5,458 13,060 195,954 (1,373) (21,287) (716,553)
80,500
615,985
(2,805)
693,680
327 5,458 13,060 195,954 (1,373) (21,287) (22,873)
32,769 17,231 (13,060) 16,867 (6,120) (1,612)
33,096 $ 22,689 $ 212,821 $ (7,493) $ (22,899) $ (22,873)
71
CITY OF LINO LAKES, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS
Year Ended December 31, 2004
Statement 13
Page 4 of 4
Capital Projects (Continued)
Legacy Woods Capital
Edge Projects Totals
Improvement SubTotal 2004
Revenue:
General property taxes $ - $ - $ 883,600
Tax increments - 286,056 286,056
Intergovernmental 71,760 71,760
Special assessments 121,874 787,926
Charges for services - 241,257
Investment earnings 50,223 70,321
Refunds and reimbursements 43,515 43,515
Miscellaneous 258,866 371,366
Total revenue 832,294 2,755,801
Expenditures:
Current:
General government: - 124,720 125,537
Public works: 97,290 1,314,974 1,314,974
Parks, recreation and forestry 217,015
Capital outlay:
Public safety 166,586 166,586
Public works 128,274 128,274
Debt service:
Principal 1,790,000
Interest and fiscal charges 699,803
Total expenditures 97,290 1,734,554 4,442,189
Revenue over (under) expenditures (97,290) (902,260) (1,686,388)
Other financing sources (uses):
Transfer from General Fund 141,869 142,484
Transfer from Capital Project Funds 3,299,286 5,138,943
Transfer from Debt Service Funds 1,879
Transfer to Debt Service Funds (743,882) (745,761)
Transfer to Capital Project Funds - (580,491) (580,491)
Sale of property 1,280,957 1,280,957
Issuance of debt 889,985 898,597
Discount on bonds issued - (2,805) (2,844)
Payment made to refunding bond escrow agent (1,170,000)
Total other financing sources (uses) 4,284,919 4,963,764
Net increase (decrease) in fund balance (97,290) 3,382,659 3,277,376
Fund balance (deficit)
Beginning of year 654,686 3,324,947
Fund balance (deficit) - December 31 $ (97,290) $ 4,037,345 $ 6,602,323
72
— 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, 2004
Statement 14
2004
Variance with
Final Final Budget
Budget Actual Positive (Negative)
Revenue:
Charges for services:
— Recreation Fees $ 227,830 $ 241,257 $ 13,427
Investment earnings 831 831
Total revenue 227,830 242,088 14,258
Expenditures:
Current:
— Personal services 121,530 105,817 15,713
Supplies 57,850 99,748 (41,898)
Other services and charges 9,420 769 8,651
— Contractual services 31,340 10,681 20,659
Total expenditures 220,140 217,015 3,125
Net increase (decrease) in fund balance $ 7,690 25,073 $ 17,383
Fund balance - January 1 34,463
- Fund balance - December 31 $ 59,536
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 OF CHANGES IN ASSETS AND LIABILITIES - FIDUCIARY FUNDS
Year Ended December 31, 2004
Statement 15
Assets
Cash and investments
Deposits receivable
Total assets
Liabilities
Accounts payable
Deposits payable
Total Liabilities
Balance
January I,
2004
Balance
December 31,
Additions Deductions 2004
$ 1,380,409 $ 1,512,410 $ 1,460,113 $ 1,432,706
10,520 - - 10,520
$ 1,390,929 $ 1,512,410 $ 1,460,113 $ 1,443,226
$ 123,519 $ 988,137 $ 1,032,561 $ 79,095
1,267,410 524,273 427,552 1,364,131
$ 1,390,929 $ 1,512,410 $ 1,460,113 $ 1,443,226
SUPPLEMENTARY FINANCIAL INFORMATION
CITY OF LINO LAKES, MINNESOTA
COMBINED SCHEDULE OF INDEBTEDNESS
December 31, 2004
Interest
Rates
Dated
Final
Maturity
Date
General Obligation Bonds:
2001 Equipment Certificates 6.00% 2/1/01 12/31/04
2002 Equipment Certificates 6.00% 2/1/02 12/31/05
2003A Equipment Certificates 6.00% 2/1/03 12/31/06
2003B Equipment Certificates 4.00% 3/31/03 12/31/06
2004A Equipment Certificates 4.00% 2/1/04 12/31/06
Civic Complex Lease Revenue Bonds - 1998A 4.20%-5.35% 8/1/98 2/1/19
Public Project Revenue Refunding Bonds - 1999C 4.75%-5.10% 9/1/99 2/1/10
Total General Obligation Bonds
Special Assessment Bonds:
G. 0. Improvement Bonds of 1996A 4.20%-5.20% 10/1/96 2/1/07
G. 0. Improvement Bonds of 1998A 4.50%-4.90% 8/1/98 2/1/15
G. 0. Improvement Bonds of 1998B 4.50%-4.90% 8/1/98 2/1/15
G. 0. Improvement Refunding Bonds of 1999A 4.25%-4.70% 9/1/99 2/1/06
G. 0. Improvement Bonds of 2002A 3.00%-4.10% 8/1/02 2/1/13
G. 0. Improvement Bonds of 2002B 3.20%-5.55% 8/1/02 2/1/13
G. 0. Improvement Refunding Bonds of 2003A 2.00%-4.25% 12/1/03 2/1/19
G. 0. Improvement Bonds of 2003B 3.20%-5.60% 12/1/03 2/1/14
G. 0. Improvement and Utility Bonds of 2004A 1.90%-4.45% 11/15/04 2/1/20
Total General Improvement Bonds with special assessments pledged
Revenue Bonds:
G. 0. Water Revenue Bonds of I9968 4.10%-5.70% 10/1/96 2/1/12
G. 0. Water Revenue Refunding Bonds of 1999B 4.25%-4.90% 9/1/99 2/1/08
Total Revenue Bonds
Total City indebtedness
75
Exhibit 1
Prior Years
Original
Issue Payments
Payable
Principal Interest
2004 Payable Due Due
1/1/04 Issued Payments 12/31/04 In 2005 In 2005
332,030 $ 222,030 $ 110,000 $ $ 110,000 $ $ -
140,000 50,000 90,000 45,000 45,000 45,000 2,700
130,000 130,000 45,000 85,000 45,000 5,100
200,000 200,000 - 50,000 150,000 65,000 6,000
- 274,000 - 274,000 81,000 21,007
5,350,000 530,000 4,820,000 - 205,000 4,615,000 195,000 231,078
980,000 300,000 680,000 85,000 595,000 105,000 26,521
7,132,030 1,102,030 6,030,000 274,000 540,000 5,764,000 536,000 292,406
4,685,000 3,115,000 1,570,000 - 1,570,000 -
4,310,000 870,000 3,440,000 290,000 3,150,000 290,000 139,500
2,000,000 335,000 1,665,000 115,000 I,550,000 120,000 69,753
1,725,000 655,000 1,070,000 350,000 720,000 365,000 25,080
645,000 - 645,000 95,000 550,000 95,000 17,040
2,110,000 2,110,000 170,000 1,940,000 175,000 91,984
2,090,000 2,090,000 2,090,000 435,000 52,750
250,000 250,000 - 250,000 - I1,853
- - 1,330,000 1,330,000 33,466
17,815,000 4,975,000 12,840,000 1,330,000 2,590,000 11,580,000 1,480,000 441,426
3,320,000 860,000 2,460,000 - 175,000 2,285,000 185,000 119,195
680,000 170,000 510,000 90,000 420,000 95,000 17,795
4,000,000 1,030,000 2,970,000 265,000 2,705,000 280,000 136,990
28,947,030 7,107,030 21,840,000 1,604,000 3,395,000 20,049,000 2,296,000 870,822
76
_ CITY OF LINO LAKES, MINNESOTA
SCHEDULE OF DEFERRED TAX LEVIES
December 31, 2004
Exhibit 2
G.O. Public G.O.
Lease G.O. Improvement Project G. 0. G. 0. Improvement
Year of Equipment Equipment Equipment Equipment Revenue Improvement Refunding Refunding Improvement Improvement and Utility
Levy/ Certificates Certificates Certificates Certificates Bonds Bonds Bonds of Bonds Bonds Bonds Bonds
Collection of2002 of2003A of2003B of2004A ofl998A ofl998B 1999A 1999C of2002A of2003B of2004A Total
2004/2005 $ 50,085 $ 52,605 $ 74,550 $ 107,107 $ 332,525 $ 151,072 $ 418,399 $ 126,641 $ 1,547 $ - $ - $ 1,314,531
2005/2006 - 44,520 92,820 107,888 343,382 152,519 290,270 121,459 8,897 23,688 124,450 1,309,892
�, 2006/2007 107,016 353,031 153,729 - 126,667 5,259 22,828 128,292 896,822
2007/2008 - 361,562 154,704 - 7,467 21,844 126,520 672,097
2008/2009 - 368,387 155,441 6,496 20,741 124,472 675,537
2009/2010 - 485,462 155,796 5,446 19,534 127,439 793,677
2010/2011 485,987 155,757 - - 9,645 23,524 124,793 799,706
2011/2012 490,655 155,313 - - 8,385 21,917 127,187 803,457
2012/2013 489,001 154,537 - - 20,248 129,268 793,054
2013/2014 491,258 158,719 - 23,781 125,772 799,530
2014/2015 492,413 - - 122,133 614,546
2015/2016 - - 497,716 128,853 626,569
2016/2017 501,215 124,548 625,763
2017/2018 503,310 - - 125,388 628,698
2018/2019 - 125,898 125,898
2019/2020 126,123 126,123
$ 50,085 $ 97,125 $ 167,370 $ 322,011 $ 6,195,904 $ 1,547,587 $ 708,669 $ 374,767 $ 53,142 $ 198,105 $ 1,891,136 $11,605,901
IMmr
77
CITY OF LINO LAKES, MINNESOTA
DEBT SERVICE PAYMENTS TO MATURITY - ALL BONDS
December 31, 2004
G. O.
G. O. G. O. Improvement G. O.
Equipment Equipment Equipment Equipment Improvement Improvement Refunding Improvement
Certificates Certificates Certificates Certificates Bonds Bonds Bonds Bonds
2002 2003A 20038 2004A of 1998A of 1998B of 1999A of 2002A
Bonds payable $ 45,000 $ 85,000 $ 150,000 $ 274,000 $ 3,150,000 $ 1,550,000 $ 720,000 $ 550,000
Future interest payable 2,700 7,500 9,400 32,677 813,975 431,856 33,423 63,489
Totals $ 47,700 $ 92,500 $ 159,400 $ 306,677 $ 3,963,975 $ 1,981,856 $ 753,423 $ 613,489
Payments to maturity:
2005 47,700 50,100 71,000 102,007 429,500 189,752 390,081 112,040
2006 42,400 88,400 102,750 416,450 184,352 363,342 114,115
2007 - - 101,920 403,400 183,840 120,883
2008 - 385,462 183,103 117,253
2009 372,637 182,140 29,893
2010 359,670 180,882 - 28,930
2011 - 346,489 179,256 27,930
2012 333,094 177,248 31,830
2013 - 319,485 174,888 30,615
2014 - 305,805 172,230 - -
2015 - 291,983 174,165
2016 - - -
2017 -
2018 - - - - - -
2019 -
2020 -
47,700 $ 92,500 $ 159,400 $ 306,677 $ 3,963,975 $ 1,981,856 $ 753,423 $ 613,489
78
Exhibit 3
G. O. G. O. G. O. G. O. Water Civic Public
G. 0. Improvement G. 0. Improvement Water Revenue Complex Project
Improvement Refunding Improvement and Utility Revenue Refunding Revenue Revenue
Bonds Bonds Bonds Bonds Bonds Bonds Bonds Bonds
of2002B 2003A 2003B 2004A of 1996B of 1999B of 1998A of 1999C Totals
$ 1,940,000 $ 2,090,000 $ 250,000 $ 1,330,000 $ 2,285,000 $ 420,000 $ 4,615,000 $ 595,000 $ 20,049,000
488,025 326,084 73,383 448,185 591,636 41,909 2,078,590 85,744 5,528,576
$ 2,428,025 $ 2,416,084 $ 323,383 $ 1,778,185 $ 2,876,636 $ 461,909 $ 6,693,590 $ 680,744 $ 25,577,576
266,984 487,750 11,853 33,466 304,195 112,795 426,078 131,521 3,166,822
269,725 488,950 36,453 111,250 299,725 118,143 431,860 126,534 3,194,449
266,568 474,000 35,584 119,500 299,680 113,154 441,625 116,640 2,676,794
267,688 82,813 34,590 117,437 298,915 117,817 450,282 111,790 2,167,150
272,613 81,301 33,490 115,187 419,034 - 457,595 101,964 2,065,854
271,388 79,611 32,315 112,900 419,682 346,594 92,295 1,924,267
269,310 82,638 35,950 120,420 418,864 455,094 - 1,935,951
271,395 80,537 34,390 117,700 416,541 455,068 - 1,917,803
272,354 78,438 32,778 114,810 - 459,002 - 1,482,370
- 81,088 35,980 116,702 - - 456,790 - 1,168,595
78,488 - 118,182 - 458,415 1,121,233
80,788 - 114,382 - - 458,990 - 654,160
77,988 - 115,482 - - 463,181 - 656,651
79,994 - 116,382 - - 465,845 - 662,221
81,700 - 117,013 - - 467,171 - 665,884
117,372 - - - - 117,372
$ 2,428,025 $ 2,416,084 $ 323,383 $ 1,778,185 $ 2,876,636 $ 461,909 $ 6,693,590 $ 680,744 $ 25,577,576
79
CITY OF LINO LAKES, MINNESOTA
INSURANCE IN FORCE
December 31, 2004
Exhibit 4
Coverage Amount
General Liability:
Bodily Injury/Property Damage $ 1,000,000
Personal Injury/Police Professional Liability 1,000,000
Employee Benefit Liability 1,000,000
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) 19,112,451
Faithful Performance Blanket Bond 500,000
Storage Tank Liability 100,000
Rented/Leased Equipment ($500 Deductible) 250,000
Public Official and Employee Liability ($500 Deductible each occurrence) 1,000,000
Automotive:
Bodily injury and property damage 1,000,000
Comprehensive and Collision Actual Cash Value
Uninsured motorists 1,000,000
Workmen's compensation Statutory
Umbrella Liability 1,000,000
Crime - Theft Disappearance and Destruction ($500 Deductible) 100,000
80
CITY OF LINO LAKES, MINNESOTA
TAXABLE VALUATIONS, TAX LEVIES AND TAX RATES Exhibit 5
Tax Capacity Tax Capacity
Values Values
2003/2004 2002/2003
Taxable valuations:
Total $ 14,493,687 $ 12,387,915
Fiscal disparities:
= Distribution 1,708,178 1,539,957
Contribution (679,357) (562,081)
Less: Captured Tax Increment Value (246,042) (676,932)
Taxes Levied:
$ 15,276,466 $ 12,688,859
Tax Tax
Certified Capacity Certified Capacity
Levy Rate Levy Rate
Revenue 5,623,542 36.302 5,180,932 40.268
Bond and Interest 927,078 5.985 943,689 7.335
Totals
$ 6,550,620 42.287 $ 6,124,621 47.603
The tax capacity rate is based on the total certified levy net of the fiscal disparity distribution
III.
STATISTICAL
SECTION
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND EXPENDITURES BY FUNCTION
Last Ten Fiscal Years
(Unaudited)
Table 1
Fiscal Total General Public Public Parks and Other
Year Expenditures Government Safety Works Recreation Functions
1995 $ 3,557,038 $ 1,173,047 $ 1,265,064 $ 700,873 $ 418,054 $
1996 3,966,738 1,289,751 1,446,985 694,455 535,547
1997 4,400,087 1,366,602 1,751,226 697,934 439,263 145,062
1998 5,328,796 1,560,268 1,778,898 673,156 722,728 593,746
1999 5,237,554 1,771,069 1,958,169 628,070 647,163 233,083
2000 5,513,148 1,770,528 2,158,346 786,420 655,863 141,991
2001 5,808,265 1,871,615 2,246,146 868,289 663,360 158,855
2002 6,213,645 1,982,096 2,519,152 872,193 696,511 143,693
2003 6,335,322 1,963,561 2,628,766 902,764 725,042 115,189
2004 6,758,483 2,165,245 2,832,647 899,483 737,930 123,178
82
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND REVENUES BY SOURCE
Last Ten Fiscal Years
(Unaudited)
Table 2
Total General
General Property Licenses Inter- Charges Fines
Fiscal Fund Taxes and Governmental for and Other
Year Revenue Levied Permits Revenues Services Forfeits Revenue
1995 $ 3,772,335 $ 1,941,415 $ 544,267 $ 738,652 $ 241,393 $ 93,861 $ 212,747
1996 4,627,532 2,327,048 788,480 816,794 308,262 86,158 300,790
1997 4,736,496 2,658,485 566,561 881,459 291,090 99,390 239,511
1998 5,722,363 2,904,888 726,599 1,380,063 347,485 102,489 260,839
1999 5,343,453 2,962,664 823,719 940,053 278,510 87,434 251,073
2000 5,613,395 3,306,057 884,746 702,606 272,145 124,458 323,383
2001 6,193,834 4,125,264 1,016,456 409,607 278,863 101,559 262,085
2002 6,841,420 4,543,106 913,498 893,861 196,351 100,393 194,211
2003 6,893,830 5,258,505 766,524 385,439 216,302 97,223 169,837
2004 7,201,542 5,354,282 867,909 468,551 199,404 106,053 205,343
83
CITY OF LINO LAKES, MINNESOTA
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
(Unaudited)
Table 3
Percent of Percent of
Total Tax Delinquent
Total Current Percentage Delinquent Total Collections Outstanding Taxes to
Fiscal Tax Tax of Levy Tax Tax To Tax Delinquent Tax
Year Levy Collections Collected Collections Collections Levy Taxes Levy
1995 $ 2,634,350 $ 2,613,719 99.22% $ 21,206 $ 2,634,925 100.02% $ 22,368 0.85%
1996 3,040,000 3,011,917 99.08% 15,641 3,027,558 99.59% 22,489 0.74%
1997 3,349,400 3,316,426 99.02% 23,962 3,340,388 99.73% 32,598 0.97%
1998 3,589,617 3,564,611 99.30% 30,186 3,594,797 100.14% 29,774 0.83%
1999 4,116,312 4,085,625 99.25% 23,876 4,109,501 99.83% 23,199 0.56%
2000 4,571,888 4,534,998 99.19% 19,452 4,554,450 99.62% 46,344 1.01%
2001 5,098,609 5,047,912 99.01% 40,513 5,088,425 99.80% 56,056 1.10%
2002 5,902,158 5,847,692 99.08% 50,882 5,898,574 99.94% 61,349 1.04%
2003 6,124,621 6,062,273 98.98% 53,216 6,115,489 99.85% 106,351 1.74%
2004 6,550,620 6,145,419 93.81% 92,444 6,237,863 95.23% 92,006 1.40%
Note: Does not include tax increment levies and collections.
Note: Current tax collections include State levy related credits (HACA and Market Value Credit)
84
CITY OF LINO LAKES, MINNESOTA
SPECIAL ASSESSMENT LEVIES AND COLLECTIONS
Last Ten Fiscal Years
(Unaudited)
Table 4
% of Current % of Total
Current Current Collections Delinquent Collections Total
Fiscal Assmts. Assmts. to Assmts. Assessments Total to Current Outstanding
Year Due Collected Due Collected Collected Assmts. Due Del. Assmts.
1995 $ 394,770 $ 353,424 89.53% $ 26,051 $ 379,475 96.13% $ 10,221
1996 366,146 355,609 97.12% 26,831 382,440 104.45% 21,040
1997 593,957 589,158 99.19% 20,153 609,311 102.59% 5,692
1998 664,912 657,041 98.82% 3,561 660,602 99.35% 12,019
1999 520,982 512,433 98.36% 8,429 520,862 99.98% 11,947
2000 503,922 434,857 86.29% 9,078 443,935 88.10% 7,919
2001 394,826 356,804 90.37% 5,614 362,418 91.79% 36,789
2002 418,871 387,559 92.52% 32,294 419,853 100.23% 36,584
2003 551,636 504,834 91.52% 38,428 543,262 98.48% 48,998
2004 635,753 584,735 91.98% 29,497 614,232 96.61% 52,819
Note: Special assessments amounts above do not include prepayments
85
CITY OF LINO LAKES, MINNESOTA
RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL
BONDED DEBT TO TOTAL GENERAL EXPENDITURES
Last Ten Fiscal Years
'" (Unaudited)
Table 5
Percent of
Debt Service
Interest Total Total Expenditures
Fiscal and Debt General Fund to General
Year Principal Other Service (1) Expenditures (2) Expenditures
1995 $ 228,500 $ 96,135 $ 324,635 $ 3,557,038 9.12%
1996 188,000 100,248 288,248 3,966,738 7.27%
1997 188,000 106,785 294,785 4,400,087 6.70%
1998 190,000 112,201 302,201 5,328,796 5.67%
1999 295,734 387,500 683,234 5,237,554 13.04%
2000 273,570 318,507 592,077 5,513,148 10.74%
2001 472,050 322,503 794,553 5,808,265 13.68%
2002 496,980 316,978 813,958 6,213,645 13.10%
2003 459,450 287,647 747,097 6,335,322 11.79%
2004 455,000 317,191 772,191 6,758,483 11.43%
(1) Excludes tax increment, special assessment, enterprise, and payments on refunded bonds.
(2) Includes expenditures of General Fund only.
Note: Amounts rounded to the nearest hundred.
CITY OF LINO LAKES, MINNESOTA
ASSESSED AND ESTIMATED ACTUAL VALUE
OF TAXABLE PROPERTY
Last Ten Fiscal Years
(Unaudited)
Taxes
Payable
Real Personal Fiscal
Property Property Total Disparities
1995 $ 6,204,237 $ 392,508 $ 6,596,745 $ 879,810
1996 7,390,566 435,045 7,825,611 952,790
1997 8,344,972 462,282 8,807,254 1,003,376
1998 9,244,905 434,234 9,679,139 1,036,542
1999 9,649,657 393,365 10,043,022 917,989
2000 11,003,125 395,637 11,398,762 1,001,728
2001 12,635,731 393,728 13,029,459 1,157,165
2002 10,382,371 246,594 10,628,965 851,427
2003 12,136,899 251,016 12,387,915 977,876
2004 14,234,493 259,194 14,493,687 1,028,821
Source: Anoka County Department of Property Records and Taxation.
87
Table 6
Tax Increment
$ (287,819)
(307,790)
(410,724)
(555,542)
(646,438)
(804,752)
(912,580)
(566,397)
(676,932)
(246,042)
Assessor's Estimated Ratio of Total
Net Taxable Market Value of Assessed to
Value Taxable Property Actual Value
$ 7,188,736
8,470,611
9,399,906
10,160,139
10,314,573
11,595,738
13,274,044
10,913;995
12,688,859
15,276,466
$ 435,100,000
501,825,800
552,696,200
627,423,800
687,737,400
775,398,200
903,685,700
1,034,432,100
1,251,221, 800
1,430,803,500
1.65%
1.69%
1.70%
1.62%
1.50%
1.50%
1.47%
1.06%
1.01%
1.07%
CITY OF LINO LAKES, MINNESOTA
PROPERTY TAX RATES - DlDECTANDOVCRLAPPING GOVERNMENTS
Last Ten Fisca Years
(Unaudited)
Table 7
Tax Rates (Per $1O8nf Tax Capacity)
Year
Taxes
Payable City School (1) County Other (2) Total
1905 30.772 64.308 32.765 0.977 134.832
1990 31.015 63.103 31l36 5.647 130.001
1997 31J07 66.000 30\542 5J97 132.900
1098 30.437 59804 30.618 6.342 126401
1990 36189 64.802 32.265 6.830 1]9.9]6
2000 35961 58.230 30.861 7.635 132.687
2001 35.898 69.888 28.859 6.903 141j48
2082 53.084 37.828 37.976 5.913 134.801
2003 47.608 37.407 37.714 7.050 129.834
2804 42.287 36.049 35.221 6.373 120.538
(1) The majority ofLino Lakes is served by School District 12,
(2) Other includes: Metropolitan Council, Mosquito Control, Metropolitan Transit,
Rice Creek Waters ed District and Forest Lake Hospital.
Source: Anoka County Department of Property Records and Taxation.
89
CITY OF LINO LAKES, MINNESOTA
RATIO OF NET BONDED DEBT
TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA
Last Ten Fiscal Years
(Unaudited)
Table 8
Ratio of
Less Net Bonded
Net Taxable Gross Cash and Debt to Net
Value of Bonded Investments Net Assessed Bonded Debt
Year Population (1) Property Debt (2) on Hand Bonded Debt Value Per Capita
1995 13,097 $ 7,188,736 $ 1,341,000 $ 135,440 $ 1,205,560 16.77% 92.05
1996 13,756 8,470,611 1,378,000 194,807 1,183,193 13.97% 86.01
1997 14,560 9,399,906 1,415,000 111,834 1,303,166 13.86% 89.50
1998 15,053 10,160,139 6,862,734 721,623 6,141,111 60.44% 407.97
1999 15,760 10,314,573 6,904,570 666,137 6,238,433 60.48% 395.84
2000 16,791 11,595,738 6,911,450 1,271,904 5,639,546 48.63% 335.87
2001 17,386 13,274,044 6,686,430 1,171,357 5,515,073 41.55% 317.21
2002 17,942 10,913,995 6,244,450 1,801,562 4,442,888 40.71% 247.63
2003 18,368 12,688,859 6,030,000 3,078,222 2,951,778 23.26% 160.70
2004 19,000 15,276,466 5,764,000 2,995,633 2,768,367 18.12% 145.70
(1) Population provided from Metropolitan Council except 2000 is Federal Census and 2004 is City Estimate.
(2) Amount excludes tax increment, special assessment, enterprise and EDA bonds.
90
CITY OF LINO LAKES, MINNESOTA
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
INCLUDING DEBT RATIOS
December 31, 2004
(Unaudited)
Table 9
Overlapping Debt:
Bonded G.O. Percentage
Gross Bonded Debt Applicable City Share
Outstanding (1) in City(2) of Debt
Anoka County $ 82,370,000 6.52% $ 5,367,291
School District 12 89,085,000 48.62% 43,310,778
School District 624 61,490,000 3.81% 2,345,315
School District 831 44,880,000 7.95% 3,567,129
SISD 916 13,885,000 2.11% 292,345
Metropolitan Council 206,085,000 0.72% 1,489,985
Total Overlapping Debt
497,795,000 56,372,843
Direct Debt:
City of Lino Lakes 5,764,000 100.00% 5,764,000
Total Overlapping & Direct Debt $ 503,559,000 $ 62,136,843
Debt Ratios:
Ratio of Debt per capita (19,000 population) - overlapping $ 2,967
Ratio of Debt per capita (19,000 population) - direct $ 303
Ratio of Debt per capita (19,000 population) - total $ 3,270
Ratio of Debt to estimated market valuation of $1,430,803,500. 4.34%
(1) Does not include general obligation debt supported by utility revenues, tax or aid anticipation certificates,
State -aid road or revenue debt.
(2) 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.
91
CITY OF LINO LAKES, MINNESOTA
—
COMPUTATION OF LEGAL DEBT MARGIN
December 31, 2004
(Unaudited)
Table 10
2004 2003
Market Value $ 1,430,803,500 $ 1,251,221,800
Debt Limit Percentage 2% 2%
_ Debt Limit 28,616,070 25,024,436
Total Bonded Debt 20,049,000 21,840,000
Less:
Special Assessment Bonds (11,580,000) (12,840,000)
Revenue Bonds - Enterprise Fund (2,705,000) (2,970,000)
Public Project Revenue Bonds (595,000) (680,000)
Total Debt Applicable to Debt Limit
5,169,000 5,350,000
Legal Debt Margin $ 23,447,070 $ 19,674,436
92
CITY OF LINO LAKES, MINNESOTA
SCHEDULE OF REVENUE BOND COVERAGE
WATER FUND
Last Ten Years
(Unaudited)
Table 11
Net Revenue
Available Interest
Fiscal Gross Operating for Debt and
Year Revenues (1) Expenses (2) Service Principal Fiscal Charges Total Coverage
1995 $ 461,747 $ 177,724 $ 284,023 $ 40,000 $ 64,118 $ 104,118 2.73
1996 466,310 210,778 255,532 50,000 170,881 220,881 1.16
1997 851,173 271,575 579,598 50,000 229,900 279,900 2.07
1998 598,005 237,866 360,139 140,000 225,182 365,182 0.99
1999 604,734 380,928 223,806 205,000 220,910 425,910 0.53
2000 1,039,331 495,183 544,148 210,000 237,612 447,612 1.22
2001 1,173,593 508,649 664,944 155,000 185,250 340,250 1.95
2002 1,082,053 610,751 471,302 245,000 169,685 414,685 1.14
2003 1,365,681 505,407 860,274 250,000 158,669 408,669 2.11
2004 1,282,183 442,975 839,208 265,000 148,229 413,229 2.03
(1) Total Water Fund operating revenues and transfers in.
(2) Total Water Fund expenses exclusive of depreciation, interest on debt and fiscal charges.
93
CITY OF LINO LAKES, MINNESOTA
PRINCIPAL TAXPAYERS
(Unaudited)
Table 12
Ten of the City's Largest Taxpayers Percent of
2003 Net Tax City's Net
Taxpayer Type of Business Capacity Tax Capacity
Target Corporation Retail $ 252,988 1.66%
Kohl's Department Store Retail 152,550 1.00%
_ Xcel Energy Utility 131,145 0.86%
Molin Concrete Products Commercial/Industrial 125,132 0.82%
—
Lino Lakes Business Center Commercial/Industrial 99,752 0.65%
Taylor Corp. Conunercial/Industrial 99,446 0.65%
Individual Commercial/Industrial 76,930 0.50%
Marmon Keystone Corporation Commercial/Industrial 72,296 0.47%
F & G, Inc. Commercial/Industrial 69,126 0.45%
—
Minnegasco Utility 49,316 0.32%
Total Ten Largest Taxpayers $ 1,128,681 7.38%
Source: Anoka County Department of Property Records and Taxation.
CITY OF LINO LAKES, MINNESOTA
PROPERTY VALUE, CONSTRUCTION PERMITS AND BANK DEPOSITS
Last Ten Years
(Unaudited)
Table 13
Fiscal Property Number of Permit Bank
Year Value (1) Building Permits Valuation Deposits (2)
1995 $ 435,100,000 598 $ 40,636,691 Not Available
1996 501,825,800 588 74,061,188 Not Available
1997 552,696,200 597 32,666,843 Not Available
1998 627,423,800 911 48,683,257 Not Available
1999 687,737,400 893 54,522,159 Not Available
2000 775,398,500 1,186 57,080,794 Not Available
2001 903,685,700 1,042 74,974,042 Not Available
2002 1,034,432,100 860 53,977,610 Not Available
2003 1,251,221,800 826 55,864,076 Not Available
2004 1,430,803,500 835 61,579,910 Not Available
(1) Assessor's estimated market value of taxable property from Table 6.
(2) Bank deposits are excluded due to the banks within the City being consolidated with banks outside the City.
As a result, local deposits are unavailable.
Source: City Inspection records.
95
CITY OF LINO LAKES, MINNESOTA
DEMOGRAPHIC STATISTICS
Last Ten Years
(Unaudited)
Table 14
Fiscal School Number of Unemployment
Year Population (2) Enrollment (1) Households (2) Rate (3)
1995 1.3,097 5,932 3,899 3.1%
1996 13,756 6,010 4,095 2.6%
1997 14,560 6,230 4,280 2.5%
1998 15,053 6,469 4,443 1.9%
1999 15,760 6,732 4,692 2.5%
2000 16,791 6,778 4,857 2.6%
2001 17,386 6,846 5,084 4.1%
2002 18,000 6,850 5,291 4.3%
2003 18,368 6,932 5,433 5.0%
2004 19,000 6,992 5,623 4.6%
(1) Centennial School District 12
(2) Metropolitan Council except 2000 is Federal Census and 2004 is City Estimate
(3) Minnesota Department of Economic Security
96
CITY OF LINO LAKES, MINNESOTA
MISCELLANEOUS STATISTICS
(Unaudited)
Table 15
Date of Incorporation 5/11/1955
Date of Adoption of City Charter 1/12/1982
Form of Government Home Rule Charter
Area of City (square miles) 33
Miles of Streets:
Trunk Highways
Paved - County
Paved - City
Number of Street Lights
Fire Protection:
Centennial Fire District
Total Number of Stations
(within Lino Lakes)
Total Number of Volunteers
Police Protection:
Number of Stations
Number of sworn officers
17.4
28.5
100.50
489
3
1
52
25
Recreation:
Park Acreage 141
Number of Parks & Playgrounds 19
Trails 18 miles
Municipal Water:
Gallons Pumped 473,637,000
Number of Connections 3,738
Miles of watermain 48.2
Number of Fire Hydrants 476
Water Tower Capacity (gallons) 2,000,000
Municipal Sewer:
Number of Connections
Miles of sewermain
Employees:
Full -time
Part-time
3,960
61.36
67
5
Elections:
Registered voters - last general election 11,718
Number of votes cast 10,147
Percent of registered voters voting 87%
97