HomeMy WebLinkAboutComprehensive Annual Financial Report 12/31/2003COMPREHENSIVE ANNUAL FINANCIAL REPORT
OF THE
CITY OF LINO LAKES, MINNESOTA
MEMO
— FOR THE YEAR ENDED
Ismr
INIM
DECEMBER 31, 2003
Prepared By: Finance Department
Alan Rolek, Director of Finance
Paula Schloer, Accountant
CITY OF LINO LAKES, MINNESOTA
TABLE OF CONTENTS
Page
Reference Number
I. INTRODUCTORY SECTION
Principal City Officials 1
Organization 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 19
Statement of Activities Statement 2 20
Balance Sheet - Governmental Funds Statement 3 22
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Assets Statement 4 24
Statement of Revenues, Expenditures, and Changes in Fund Balance -
- Governmental Funds Statement 5 25
Reconciliation of the Governmental Funds Governmental Funds
Statement of Revenue, Expenditures and Changes in Fund Balance
to the Statement of Activities Statement 6 27
Statement of Net Assets - Proprietary Funds Statement 7 28
Statement of Revenues, Expenses and Changes in Net Assets -
Proprietary Funds Statement 8 29
CITY OF LINO LAKES, MINNESOTA
TABLE OF CONTENTS
Page
Reference Number
Statement of Cash Flows - Proprietary Funds Statement 9 30
Statement of Net Assets - Fiduciary Funds Statement10 31
Notes to Financial Statements 32
Required Supplementary Information
General Fund:
Statement 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
Supplementary Financial Information
Combined Schedule of Indebtedness Exhibit 1 73
Schedule of Deferred Tax Levies Exhibit 2 75
Debt Service Payments to Maturity - All Bonds Exhibit 3 76
Insurance in Force Exhibit 4 78
Taxable Valuations, Tax Levies and Tax Rates Exhibit 5 79
III. STATISTICAL SECTION
General Fund:
Expenditures By Function - Last Ten Fiscal Years
Revenue By Source - Last Ten Fiscal Years
Property Tax Levies and Collections - Last Ten Fiscal Years
Special Assessment Levies and Collections - Last Ten Fiscal Years
Table 1 80
Table 2 81
Table 3 82
Table 4 83
CITY OF LINO LAKES, MINNESOTA
TABLE OF CONTENTS
Page
Reference Number
Ratio of Annual Debt Service Expenditures for General Bonded
Debt to Total General Expenditures - Last Ten Fiscal Years Table 5 84
Assessed and Estimated Actual Value of Taxable Property -
Last Ten Fiscal Years Table 6 85
Property Tax Rates - Direct and Overlapping Governments -
Last Ten Fiscal Years Table 7 87
Ratio of Net Bonded Debt to Assessed Value and Net Bonded
Debt Per Capita - Last Ten Fiscal Years Table 8 88
Computation of Direct and Overlapping Debt including Debt Ratios Table 9 89
Computation of Legal Debt Margin Table 10 90
Schedule of Revenue Bond Coverage - Water Fund -
Last Ten Fiscal Years Table 11 91
Principal Taxpayers Table 12 92
Property Value, Construction Permits and Bank Deposits -
Last Ten Fiscal Years Table 13 93
Demographic Statistics Table 14 94
Miscellaneous Statistics Table 15 95
I.
INTRODUCTORY
SECTION
IMMO
IMO
CITY OF LINO LAKES, MINNESOTA
PRINCIPAL CITY OFFICIALS
December 31, 2003
Elected Officials
Mayor:
John Bergeson
Term Expires
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
Interim City Administrator Danial 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
Citizens
Honorable Mayor
and
City Council
Commissions
Cable
• Parks and Recreation
Economic Development
• Planning and Zoning
Fire
Environmental
City Administrator
City Cleric
Professional Consultants
Engineering
Attomey
Fiscal
Public Services
Parks
Public Works
Recreation
Public Safety
Administration
Police
Emergency Management
Community Development
Human Resources
Administrative Services
2
Finance
Planning
Economic Development
-1 Engineering
Environmental Services
Inspections
Accounting
Management Infomration Systems
Utility Billing
June 10, 2004
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 U.S. generally accepted
accounting principals (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, 2003.
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, 2003, 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, 2003, are fairly presented in conformity with GAAP.
The independent auditor's report is presented as the first component of the financial section of this report.
GAAP require that management provide a narrative introduction, overview and analysis to accompany the basic
financial statements in the form of Management's Discussion and Analysis (MD &A). This letter of transmittal is
designed to complement MD &A and should be read in conjunction with it. The City of Lino Lakes' MD &A can
be found immediately following the report of the independent auditors.
3
600 Town Center Parkway, Lino Lakes, Minnesota 55014-1182
Phone: 651 - 982 -2400 • Fax: 651- 982 -2499 • 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 18,261. 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, the only fund for which an annual budget
has 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 begun to have an
impact in the diversity of the City's tax base. Since 1993, the City has added more than $60 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. A new commercial retail center on Lake Drive and
Apollo Drive in the Town Center area, known as the Lino Lakes Marketplace, has begun development and the
two anchor tenants, Target and Kohl's, were completed and opened in 2002.
A weak economy led to fewer housing permits being issued in 2003. However, commercial /industrial
development continued at a steady pace. A Dairy Queen Grill `n Chill restaurant was completed and opened in
2003, and a Discount Tire store will open in mid -2004 in the Lino Lakes Marketplace. A 265,000 square foot
distribution center on the southwest quadrant of I -35W and Lake Drive began construction and should be
operational by mid -2004, further contributing jobs and adding approximately $9 million in value to the City's
growing commercial /industrial tax base.
4
Long -term financial planning. The City is in the midst of working with a developer to develop the southeast
quadrant of I -35W and Lake Drive. This mixed -use development would 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. 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 plus land and infrastructure. The City has secured a
CDBG grant of $125,000 to be used toward a teen center within the YMCA.
WIND
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 would be financed with G.O. special
assessment bonds. The City also believes that this development could result in additional ongoing costs involved
in servicing and maintaining the streets and public areas.
The City's five -year financial plan, adopted in January, 2003, identifies street and utility improvements totaling
$29,185,000 over the period of 2003 through 2007. 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 $825,000. 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 2003 was 2.39 %.
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.
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.
5
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. A governmental unit
must publish an easily readable and efficiently organized comprehensive annual financial report, the contents of
which conform to program requirements. The City of Lino Lakes received this award for the year ended
December 31, 2002. This marks the eighth consecutive year that the City has received this prestigious award.
A Certificate of Achievement is valid for a period of one year only. The City is submitting the 2003 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.
6
Ilem
...
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, 2002
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.
.,/,,,,,m,Loe
President
Executive Director
7
H.
FINANCIAL
SECTION
LarsonAlleri"
CPAs, Consultants & Advisors
www.larsonallen.com
INDEPENDENT AUDITORS' REPORT
Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
We have audited the accompanying financial statements of the governmental activities, the business -type
activities, each major fund, and the aggregate remaining fund information of the City of Lino Lakes, Minnesota as
of and for the year ended December 31, 2003, 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, 2003, and the respective changes in
financial position and cash flows, where applicable, thereof and the for the year then ended in conformity with
U.S. generally accepted accounting principles.
As described in the notes to the basic financial statements, the City adopted the provisions of Governmental
▪ Accounting Standards Board Statement No. 34, Basic Financial Statements — and Management's Discussion and
Analysis — for State and Local Governments, as of December 31, 2003. This results in a change to the format and
content of the basic financial statements.
In accordance with Government Auditing Standards, we have also issued a report dated March 25, 2004 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, and grants. That report is an integral part of an
audit performed in accordance with Government Auditing Standards and should be read in conjunction with this
report in considering 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.
8
Larson, Allen, Weishair & 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 25, 2004
LARSON, ALLEN, WEISHAIR & CO., LLP
9
City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2003
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, 2003. 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
through 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
$74,547,005 (net assets). Of this amount $19,447,162 (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 $4,439,650.
• As of the close of the current fiscal year, the City of Lino Lakes' governmental funds reported combined
ending fund balance of $15,454,578, an increase of $1,603,747 in comparison with the prior year.
Approximately 70% of this total amount, or $10,890,096 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 $4,775,969, or
75% of total general fund expenditures.
• The City of Lino Lakes' total bonded debt increased by $735,550 (3 percent) during the current fiscal
period. The key factor to the increase was the refunding of the 1996A Improvement bonds that will be
called and retired 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
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This report also contains other supplementary information in addition to the basic financial statements themselves.
Government -wide financial statements. The government -wide financial statements are designed to provide
readers with a broad overview of the City of Lino Lakes' finances, in a manner similar to private- sector business.
The statement of net assets presents information on all of the City of Lino Lakes' assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a
useful indicator of whether the financial position of the City of Lino Lakes is improving or deteriorating.
The statement of activities presents information showing how the City's net assets changed during the most recent
fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs,
regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for
some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned, but
unused compensated absences).
10
City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2003
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 19 and 20 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 -one 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-six 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 fund. A budgetary comparison
statement has been provided for the general fund to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 22 and 25 of this report.
Proprietary funds. The City of Lino Lakes maintains one proprietary funds type. 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 28 through 30 of this report.
11
City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2003
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 32 -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 through 72 of this report.
Comparative Data. Certain comparative information between the current (2003) and prior year (2002) is required
to be presented in the MD &A. However, since this is the first year of implementation of the new reporting model
contained on GASB Statement No. 34, we have elected not to prepare comparative data for the financial
statements of 2002. In subsequent years, this section will discuss and analyze significant differences.
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 $74,547,005 at the close of the most recent fiscal
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.
CITY OF LINO LAKES NET ASSETS
_, Governmental Business -Type
Activities Activities Total
Current and other assets $ 20,512,961 $ 3,909,763 $ 24,422,724
Capital assets 45,288,097 28,540,073 73,828,170
Total assets 65,801,058 32,449,836 98,250,894
Non - current liabilities outstanding 19,294,192 3,002,690 22,296,882
Other liabilities 1,276,180 130,827 1,407,007
—
Total liabilities 20,570,372 3,133,517 23,703,889
Net assets:
Invested in capital assets,
net of related debt 25,993,905 25,537,383
Restricted 3,568,555 -
Unrestricted 15,668,226 3,778,936
Total net assets $ 45,230,686 $ 29,316,319
51,531,288
3,568,555
19,447,162
74,547,005
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.
At the end of the current fiscal year, the City of Lino Lakes is able to report positive balances in all three
Wimp categories of net assets, both for the government as a whole, as well as for its separate governmental and business -
type activities.
12
City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2003
Governmental activities. Governmental activities increased the City of Lino Lakes' net assets by $1,132,061,
thereby accounting for 25 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 $3,307,589,
thereby accounting for 75 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.
The following chart summarizes the changes in net assets for the current fiscal year:
CITY OF LINO LAKES' CHANGES IN NET ASSETS
Condensed statements of revenues, expenses, and changes in net assets highlights are as follows for the year
ended December 31, 2003:
Governmental Business -Type
Activities Activities
Total
Revenues:
Program revenues:
Charges for services $ 1,844,261 $ 2,280,915 $ 4,125,176
Operating grants and contributions 633,691 - 633,691
Capital grants and contributions 4,536,567 2,719,081 7,255,648
General revenues:
Property taxes 6,740,869 - 6,740,869
Franchise fees 105,797 - 105,797
Other taxes 804 804
Unrestricted investment earnings 194,220 20,866 215,086
Gain (loss) on disposal of capital assets (8,019) (8,019)
Total revenues $ 14,048,190 $ 5,020,862 $ 19,069,052
Expenses:
General government $ 6,084,568 $ - $ 6,084,568
Public safety 2,648,944 - 2,648,944
Public services 1,162,412 - 1,162,412
Parks, recreation and forestry 932,113 - 932,113
Conservation of natural resources 111,946 - 111,946
Community development 859,110 859,110
Interest on long -term debt 815,681 - 815,681
Water - 968,458 968,458
Sewer 1,046,170 1,046,170
Total expenses 12,614,774 2,014,628 14,629,402
Increase in net assets before transfers 1,433,416 3,006,234 4,439,650
Transfers (301,355) 301,355
Increase in net assets $ 1,132,061 $ 3,307,589 $ 4,439,650
Net assets - beginning 44,098,625 26,008,730 70,107,355
Net assets - ending $ 45,230,686 $ 29,316,319 $ 74,547,005
13
II Me
MIME
Inm
IMm
IMW
City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2003
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
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$-
o�et��et\ti \\G es \\ se•I` �a�otes�6 �e5o JtoeS
e�e009 P ° Q�e c tea�`o�`a ��a�Jta\ �J��t�
— G Qat� tec et�a,Nc:Is Gott`
ots
G
tt\et`• eeti'
ae .te \oP
\O �gtet� d
ot`
\ntie`ee`
• Expenses
• Revenues
Revenues by Source — Governmental Activities
Other taxes
0%
Franchise fees
Property taxes
48%
Unrestricted
-investment earnings
1%
Gain(loss) on diposal
of capital assets
0%
Charges for services
12%
\ Operating grants and
— contributions
5%
14
Capital grants and
contributions
33%
City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2003
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
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$-
Water
Sewer
Expenses 1
IM Revenues
Revenues by Source — Business-type Activities
Other
' 0%
Capital grants and
contributions
55%
15
Charges for
services
45%
NNW
UNNI
WPM
City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2003
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 $15,454,578, an increase of $1,603,747. Approximately 70% of this total amount, or
$10,890,096, 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 ($135,680), 2) to pay
debt service or interfund advances ($3,439,296), or 3) to fund land held for resale for future development
($989,506).
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 $4,775,969, while the total fund balance was $4,909,890. 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 78 percent of that same amount.
The fund balance of the City of Lino Lakes' general fund increased by $556,872 during the current fiscal year.
The primary reason for this increase was an intentional decrease in spending in response to a cut in aid payments
from the state by the state legislature. Overall, the general fund's revenues were slightly below the amended
budget due primarily to decreased building activity and lower than expected investment returns, while
expenditures were well below budgeted levels.
The G.O. taxable improvement bonds 200B fund has a total fund balance of $521,795, all of which is reserved for
the retirement of related debt. The net increase of $456,445 in fund balance is the result of prepayments of special
assessments.
The dedicated parks fund has total fund balance of ($699,225), the result of the purchase of land for a recreation
complex in 1998. The net increase of $41,293 in fund balance is the direct result of increased park dedication
fees.
The area and unit charge fund has a total fund balance of $7,788,560, of which $957,112 is reserved for advances
to other funds, and $6,831,448 is unreserved and available for financing capital improvements. The decrease in
fund balance during the current year was $285,546 and was the result of funding infrastructure projects within the
city and transfers for debt service payments.
The municipal state aid fund has a total fund balance of ($391,389), a decrease of $27,057 during the year. The
decrease in fund balance is primarily due to city funding of project costs that will be reimbursed by other
governments or funds.
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.
16
City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2003
The water fund has total net assets of $11,487,807, of which $1,259,382 are unrestricted. The increase in net
assets of $1,359,127 was due to contributions from private sources and an operating transfer from a capital
projects fund.
Total net assets in the sewer fund at the end of 2003 were $17,828,512, of which $2,486,864 were unrestricted.
Net assets increased $1,948,462 during the current year primarily due to contributions from private sources.
The water rates were not increased for 2003, while the sewer rates increased to help offset increased treatment
costs.
GENERAL FUND BUDGETARY HIGHLIGHTS:
No amendments to the original budget were made during the year; the original budget and the final amended
budget were the same.
Revenues were $135,512 under budget due mainly to reductions in local government aid received from the state.
Expenditures came in under the budgeted amounts by $694,020 due to a planned reduction in spending primarily
for capital outlay in response to cuts in state aids. This resulted in a net fund balance increase of $556,872 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, 2003, amounts to $73,828,170 (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 3% 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.
CITY OF LINO LAKES' CAPITAL ASSETS
(net of depreciation)
Governmental Business-Type
Activities Activities
Land 3,113,490
Buildings 5,201,841
Office equipment and furniture 488,673
Vehicles 731,194
Machinery and equipment 243,190
Other 539,370
Infrastructure 34,970,339
Total 45,288,097
87,168
28,452,905
28,540,073
Total
3,113,490
5,201,841
488,673
731,194
330,358
539,370
63,423,244
73,828,170
Long-term debt. At the end of the current fiscal year, the City of Lino Lakes had total bonded debt outstanding
of $21,840,000. Of this amount $6,030,000 comprises tax supported debt, $12,840,000 is special assessment debt
and $2,970,000 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.
17
Nmwe
G.O. tax supported debt
G.O. special assessment debt
G.O. revenue debt
Total
City of Lino Lakes, Minnesota
Management's Discussion and Analysis
December 31, 2003
CITY OF LINO LAKES' OUTSTANDING DEBT
General Obligation and Revenue Bonds
Governmental Business -Type
Activities Activities
$ 6,030,000 $
12, 840,000
18,870,000
2,970,000
2,970,000
Total
$ 6,030,000
12,840,000
2,970,000
$ 21,840,000
The City of Lino Lakes' total bonded debt increased by $735,550 (3 percent) during the current fiscal year. The
key factor to the increase was the refunding of the 1996A Improvement bonds that will be called and retired in
February, 2004. There were two new bonds issued in the current fiscal year, a $2,090,000 improvement bond and
a $250,000 improvement bond. Both new issues are supported by special assessments levied upon benefited
parcels.
The City of Lino Lakes maintains an A2 rating from Moody's for general obligation debt.
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 albeit a few number of homes being built in the current year
than in the last few years.
• 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.
• Interest rates continue to fall over the past few years, and consequently the city's investment earnings
have been reduced significantly.
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.
18
BASIC FINANCIAL STATEMENTS
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF NET ASSETS
December 31, 2003
Governmental Business -type
Activities Activities
Statement 1
Total
ASSETS
Cash and investments $ 13,119,420 $ 3,400,721 $ 16,520,141
Cash and investments with escrow agent 490,739 490,739
Accrued interest receivable 70,309 - 70,309
Accounts receivable 174,980 259,350 434,330
Due from other governments 933,900 56,392 990,292
Taxes receivable 556,298 - 556,298
Special assessments receivable 4,008,576 182,503 4,191,079
Prepaid items 169,233 10,797 180,030
Land held for resale 989,506 989,506
Capital assets:
Land 3,113,490 3,113,490
Other capital assets, net of depreciation 42,174,607 28,540,073 70,714,680
Total assets 65,801,058 32,449,836 98,250,894
LIABILITIES
Accounts payable 571,624 50,090 621,714
Salaries payable 210,170 12,698 222,868
Retainage payable 149,243 - 149,243
Accrued interest payable 337,004 65,017 402,021
Due to other governments 3,797 - 3,797
Other accrued liabilities 4,342 3,022 7,364
Non - current liabilities:
Due within one year 3,151,210 266,635 3,417,845
Due in more than one year 16,142,982 2,736,055 18,879,037
Total liabilities 20,570,372 3,133,517 23,703,889
NET ASSETS
Invested in capital assets, net of related debt 25,993,905 25,537,383 51,531,288
Restricted for:
Debt service 3,568,555 3,568,555
Unrestricted 15,668,226 3,778,936 19,447,162
Total net assets $ 45,230,686 $ 29,316,319 $ 74,547,005
The accompanying notes are an integral parr of these basic financ
19
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2003
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
6,084,568
2,648,944
1,162,412
932,113
1 1 1,946
859,110
815,681
12,614,774
968,458
1,046,170
2,014,628
14,629,402
Charges for
Services
Program Revenues
Operating
Grants and
Contributions Contributions
Capital Grants and
$ 102,520
964,034
493,312
250,816
5,369
28,210
20,052
166,341
156,124
251,642
29,085
10,447
4,510,591
25,976
1,844,261
1,064,326
1,216,589
2,280,915
4,125,176
633,691
633,691
4,536,567
958,701
1 ,760,380
2,719,081
7,255,648
The accompanying notes are an integral part of these basic financial statements.
20
General revenues:
Taxes:
Property taxes, levied for general purpose
Franchise Fees
Other taxes
Unrestricted investment earnings
Gain (loss) on disposal of capital assets
Transfers
Total general revenues and transfers
Change in net assets
Net assets - beginning
Net assets - ending
Statement 2
Net (Expense) Revenue and Changes in Net Assets
Governmental Business -type
Activities Activities
Total
$ (5,961,996) $ - $ (5,961,996)
(1,518,569) (1,518,569)
3,997,615 3,997,615
(403,679) - (403,679)
(77,492) - (77,492)
(820,453) (820,453)
(815,681) - (815,681)
(5,600,255) - (5,600,255)
1,054,569 1,054,569
1,930,799 1,930,799
2,985,368 2,985,368
(5,600,255) 2,985,368 (2,614,887)
6,740,869 6,740,869
105,797 105,797
804 804
194,220 20,866 215,086
(8,019) - (8,019)
(301,355) 301,355
6,732,316 322,221 7,054,537
1,132,061 3,307,589 4,439,650
44,098,625 26,008,730 70,107,355
$ 45,230,686 $ 29,316,319 $ 74,547,005
21
CITY OF LINO LAKES, MINNESOTA
BALANCE SHEET - GOVERNMENTAL FUNDS
December 31, 2003
G.O. Taxable Area and
Improvement Dedicated Unit
Assets General Bonds 2002B Parks Charge
Cash and investments $ 4,517,288 $ 519,290 $ 246,279 $ 322,850
Cash and investments with escrow agent - -
Accrued interest receivable 70,124
Accounts receivable 101,772 - 16,958
Due from other governmental units 128,065 12,500
Interfund receivable - - 6,541,232
Taxes receivable:
Delinquent 89,390
Due from County 428,928
Delinquent tax increment
Special assessments receivable:
Delinquent 37,169 6,064
Deferred 1,552,881 684,515
Due from County - 2,505 18,994
Prepaid items 133,921 -
Advances to Other Funds - 957,112
Land held for resale
Total assets $ 5,469,488 $ 2,111,845 $ 258,779 $ 8,547,725
Liabilities and equity
Liabilities:
Interfund payable $ 70,124 $ $ $
Accounts payable 188,095 892 45,581
Salaries payable 209,218
Other Accrued Liabilities 796
Retainage payable 23,005
Due to other governmental units 1,975 -
Advances from Other Funds 957,112 -
Deferred revenue 89,390 1,590,050 - 690,579
Total liabilities 559,598 1,590,050 958,004 759,165
Fund Balances:
Reserved
Reserved for Prepaid Items 133,921 -
Reserved for Debt Retirement 521,795 -
Reserved for Advances to Funds - 957,112
Reserved for land held for resale -
Unreserved:
Designated
Designated for cash flow reserve 4,775,969
Recreation Programs -
Capital improvements - 6,831,448
Undesignated Reported in:
Debt Service Funds
Capital Projects Funds (699,225)
Total equity and other credits 4,909,890 521,795 (699,225) 7,788,560
Total liabilities and equity $ 5,469,488 $ 2,111,845 $ 258,779 $ 8,547,725
The accompanying notes are an integral part of these basic financial statements.
22
Statement 3
Other Total
Municipal Governmental Governmental
State Aid Funds Funds
$ $ 7,513,713 $ 13,119,420
490,739 490,739
185 70,309
56,250 174,980
109,986 683,349 933,900
6,541,232
109,986
16,961 106,351
20,454 449,382
565 565
5,765 48,998
1,695,889 3,933,285
4,794 26,293
1,759 135,680
957,112
989,506 989,506
11,479,929 $ 27,977,752
347,764 $ 6,123,344 $ 6,541,232
85,471 251,585 571,624
- 952 210,170
- 796
68,140 58,098 149,243
1,822 3,797
957,112
1,719,181 4,089,200
501,375 8,154,982 12,523,174
1,759 135,680
1,960,389 2,482,184
957,112
989,506 989,506
4,775,969
32,704 32,704
3,104,428 9,935,876
675,409 675,409
(391,389) (3,439,248) (4,529,862)
(391,389) 3,324,947 15,454,578
$ 109,986 $ 11,479,929 $ 27,977,752
23
CITY OF LINO LAKES, MINNESOTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE
SHEET TO THE STATEMENT OF NET ASSETS
December 31, 2003
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
$ 15,454,578
Land 3,113,490
Buildings, Net of $1,269,088 Accumulated Depreciation 5,201,841
Office Equipment and Furniture, Net of $476,327 Accumulated Depreciation 488,673
Vehicles, Net of $615,064 Accumulated Depreciation 731,194
Machinery and Shop Equipment, Net of $375,699 Accumulated Depreciation 243,190
Equipment, Net of $390,395 Accumulated Depreciation 539,370
Infrastructure, Net of $27,670,053 Accumulated Depreciation 34,970,339 45,288,097
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 $37,326 costs
have been incurred and are shown net of $207 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:
Bonds payable (19,294,192)
Unamortized premiums (3,546)
Compensated absence payable
Total Net Assets of Governmental Activities
The accompanying notes are an integral part of these basic financial statements.
24
4,089,200
33,553
(337,004)
(19,297,738)
$ 45,230,686
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - GOVERNMENTAL FUNDS
For the Year Ended December 31, 2003
Revenue:
General property taxes
Tax increments
Licenses and permits
Intergovernmental
Special assessments
Charges for services
Fines and forfeits
Investment earnings
Refunds and reimbursements
Miscellaneous
Total revenue
Expenditures:
Current:
General
$ 5,258,505
766,524
385,439
9,630
216,302
97,223
31,829
20,801
107,577
6,893,830
G.O. Taxable
Improvement
Bonds 2002B
565,710
389
566,099
Dedicated
Parks
25,976
2,031
251,642
279,649
Area and
Unit
Charge
1,111,472
191,852
93,348
305
1,396,977
General government 1,951,183 7,447 736,427
Public safety 2,609,171
Public works 902,764 -
Parks, recreation and forestry 725,042
Conservation of natural resources 114,580
Capital outlay:
General government 12,378 200,059
Public safety 19,595
Public works -
Conservation of natural resources 609
Debt service:
Principal
Interest and fiscal charges 109,654
C onstruction/acquisition
Total expenditures 6,335,322 109,654 207,506 736,427
Revenue over (under) expenditures 558,508 456,445 72,143 660,550
Other financing sources (uses):
Operating transfer in
Operating transfer out (1,636) (30,850) (1,374,565)
Bond proceeds - - 428,469
Total other financing sources (uses) (1,636) (30,850) (946,096)
Net increase (decrease) in fund balance 556,872 456,445 41,293 (285,546)
Fund balance
Beginning of year 4,353,018 65,350 (740,518) 8,074,106
Fund balance - December 31 $ 4,909,890 $ 521,795 $ (699,225) $ 7,788,560
The accompanying notes are an integral part of these basic financial statements.
25
low
Mum
Nwir
yew
Statement 5
Other Total
Municipal Governmental Governmental
State Aid Funds Funds
$ $ 881,751 $ 6,140,256
547,260 547,260
766,524
1,560,943 38,927 2,011,285
1,125,574 2,812,386
250,216 658,370
97,223
66,452 194,049
64,350 85,456
233,148 592,367
1,560,943 3,207,678 13,905,176
2,102,988
1,009,970 5,808,015
2,609,171
867,885 1,770,649
244,555 969,597
114,580
89,285 301,722
137,612 157,207
162,680 162,680
609
1,684,450 1,684,450
755,984 865,638
229,321 229,321
2,102,988 5,181,742 14,673,639
(542,045) (1,974,064) (768,463)
30,850 1,089,373 1,120,223
(14,527) (1,421,578)
484,138 1,760,958 2,673,565
514,988 2,835,804 2,372,210
(27,057) 861,740 1,603,747
(364,332) 2,463,207 13,850,831
$ (391,389) $ 3,324,947 $ 15,454,578
26
CITY OF LINO LAKES, MINNESOTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITY
December 31, 2003
Statement 6
Net Change in Fund Balances -Total Governmental Funds $ 1,603,747
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 3,090,934
Loss on Disposal of Capital Assets (8,019)
Proceeds from sales of capital assets (23,140)
Depreciation Expense (2,726,550) 333,225
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:
General Obligation Bond Proceeds (2,670,000)
Bond premium (3,566)
Bond issuance costs 33,760
Repayment of Bond Principal 1,684,450
Interest Expense for General Obligation Bonds 16,177
Amortization of bond issuance costs (207)
Amortization of bond premium 20 (939,366)
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, 2002 3,915,020
Deferred revenue - December 31, 2003 4,089,200 174,180
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 2003, compensated
absence payable increased.
Change in Net Assets of Governmental Activities
The accompanying notes are an integral part of these basic financial statements.
27
(39,725)
$ 1,132,061
glom
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF NET ASSETS - PROPRIETARY FUNDS
December 31, 2003
Statement 7
Assets
Current assets:
Cash and cash equivalents
Accounts receivable
Due from other governmental units
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 fixed assets
Less: Allowance for depreciation
Net fixed assets
Total assets
Liabilities and Fund Equity
Current liabilities:
Accounts payable
Salaries payable
Other Accrued Liabilities
Accrued interest payable
Bonds payable - current portion
Total current liabilities
Non- current liabilities:
Bonds payable - long term
Compensated absences - payable
Total liabilities
Net Assets:
Invested in Capital Assets, Net of Related Debt
Unreserved
Undesignated
Total Net Assets
Total liabilities and fund equity
The accompanying notes are an integral part of these basic financial statements.
28
Water
Sewer
Totals
2003
$ 1,037,915 $ 2,362,806 $ 3,400,721
136,221 123,129 259,350
28,196 28,196 56,392
2,438
5,293
1,210,063
177,627
48,690
122,821
15,587,115
15,758,626
(2,560,201)
13,198,425
2,438
5,504
2,522,073
169,676
18,214,380
18,384,056
(3,042,408)
15,341,648
4,876
10,797
3,732,136
177,627
48,690
292,497
33,801,495
34,142,682
(5,602,609)
28,540,073
$ 14,586,115 $ 17,863,721 $ 32,449,836
$ 37,529
6,395
3,022
65,017
265,000
376,963
2,705,000
16,345
3,098,308
$ 12,561
6,303
$ 50,090
12,698
3,022
65,017
265,000
18,864 395,827
2,705,000
16,345 32,690
35,209 3,133,517
10,228,425 15,341,648 25,570,073
1,259,382 2,486,864 3,746,246
11,487,807 17,828,512 29,316,319
$ 14,586,115 $ 17,863,721 $ 32,449,836
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS - PROPRIETARY FUNDS
For The Year Ended December 31, 2003
Statement 8
Water
Totals
Sewer 2003
Operating revenue:
Charges for services $ 1,001,470 $ 1,201,575 $ 2,203,045
Hook -up charges 17,280 14,950 32,230
Water meter sales 38,074 - 38,074
Other operating revenue 7,502 64 7,566
Total operating revenue 1,064,326 1,216,589 2,280,915
Operating expenses:
Personal services 161,498 140,500 301,998
Materials and supplies 231,124 6,355 237,479
Contractual services 29,899 17,938 47,837
MCES sewer charges 507,351 507,351
Depreciation 304,382 342,563 646,945
Utilities 66,587 23,217 89,804
Other 16,299 8,246 24,545
Total operating expenses 809,789 1,046,170 1,855,959
Net income (loss) from operations
254,537 170,419 424,956
Other income (expense):
Investment earnings 3,203 17,663 20,866
Special assessments 16,252 1,892 18,144
Bond interest (157,359) (157,359)
Paying agent fees (1,310) (1,310)
Total other income (expense) (139,214) 19,555 (119,659)
Net income before contributions and operating transfers 115,323 189,974 305,297
Contributions and operating transfers:
Contributions from private sources 942,449 1,758,488 2,700,937
Operating transfer from Capital Projects Fund 301,355 301,355
Total contributions and operating transfers 1,243,804 1,758,488 3,002,292
Net income (loss) 1,359,127 1,948,462 3,307,589
Net Assets - January 1 10,128,680 15,880,050 26,008,730
Net Assets - December 31 $ 11,487,807 $ 17,828,512 $ 29,316,319
The accompanying notes are an integral part of these basic financial statements.
29
...
a
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
For The Year Ended December 31, 2003
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:
Operating transfer from Capital Project Funds
Net cash flows from noncapital financing activities
Water
Totals
Sewer 2003
$ 1,006,368 $ 1,210,823 $ 2,217,191
(349,436) (563,150) (912,586)
(156,189) (137,926) (294,115)
500,743 509,747 1,010,490
301,355 301,355
301,355 301,355
Cash flows from capital and related financing activities:
Principal paid on revenue bonds (250,000) - (250,000)
Collection of special assessments 28,039 169 28,208
Interest and paying agent fees on revenue bonds (163,498) (163,498)
Acquisition of fixed assets (5,326) (5,326)
Net cash flows from capital and related financing activities (390,785) 169 (390,616)
Cash flows from investing activities:
Interest on investments 3,203 17,663 20,866
Net increase in cash and cash equivalents 414,516 527,579 942,095
Cash and cash equivalents - January 1 623,399 1,835,227 2,458,626
Cash and cash equivalents - December 31 $ 1,037,915 $ 2,362,806 $ 3,400,721
Reconciliation of Operating Income (Loss) to Net Cash
from Operating Activities:
Operating income (loss) $ 254,537 $ 170,419 $ 424,956
Adjustments to reconcile operating income to
net cash flows from operating activities:
Depreciation 304,382 342,563 646,945
Change in assets and liabilities:
Decrease (increase) in receivables (57,958) (5,766) (63,724)
Decrease (increase) in prepaid items (426) 410 (16)
Increase (decrease) in payables 208 2,121 2,329
Net cash flows from operating activities $ 500,743 $ 509,747 $ 1,010,490
- Water lines in the amount of $947,775 were contributed to the Water Fund in 2003.
- Sewer lines in the amount of $1,758,488 were contributed to the Sewer Fund in 2003.
The accompanying notes are an integral part of these basic financial statements.
30
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF NET ASSETS - FIDUCIARY FUNDS
December 31, 2003
Statement 10
Assets
Cash and investments
Deposits receivable
Totals
2003
$ 1,380,409
10,520
Total assets $ 1,390,929
Liabilities
Accounts payable
Deposits payable
$ 123,519
1,267,410
Total liabilities $ 1,390,929
The accompanying notes are an integral part of these financial statements.
31
IftplM
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
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 financial statements.
The Housing and Redevelopment Authority (HRA) of Lino Lakes is an entity legally separate from the
City. However, for fmancial 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 fmancial activity.
B. BASIC FINANCIAL STATEMENTS
1. Government -Wide Statements
The government -wide fmancial 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
extemal parties for support.
32
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
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.
33
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
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 funds:
Water Fund
The water fund accounts for customer water service charges that are used to fmance water operating
expenses.
Sewer Fund
The sewer fund accounts for customer water service charges that are used to fmance water operating
expenses.
Additionally, the City reports the following 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, 1998,
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.
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
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 department based upon detailed budget estimates for individual expenditure
accounts.
4. The City Administrator is authorized to transfer appropriations within any department budget.
Additional interdepartmental or interfund appropriations and deletions are or may be authorized by
the City Council with fund (contingency) reserves or additional revenues.
5. Formal budgetary integration is employed as a management control device during the year for the
General Fund.
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NOTES TO FINANCIAL STATEMENTS
December 31, 2003
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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 in the advancing fund in the governmental
fund financial statements, and an interfund payable in the fund with the deficit, until adequate resources
are received. These interfund payables are eliminated for statement of net assets presentation.
Investments are stated at fair value 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.
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H. PROPERTY TAX REVENUE RECOGNITION
The City Council annually adopts a tax levy and certifies it to the County in December
(levy /assessment date) of each year for collection in the following year. The County is responsible for
billing and collecting all property taxes for itself, the City, the local School District and other taxing
authorities. Such taxes become a lien on January 1 and are recorded as receivables by the City at that
date. Real property taxes are payable (by property owners) on May 15 and October 15 of each
calendar year. Personal property taxes are payable by taxpayers on February 28 and June 30 of each
year. These taxes are collected by the County and remitted to the City on or before July 15 and
December 15 of the same year. Delinquent collections for November and December are received the
following January. The City has no ability to enforce payment of property taxes by property owners.
The County possesses this authority.
Within the governmental fund financial statements, the City recognizes property tax revenue when it
becomes both measurable and available to finance expenditures of the current period. In practice,
current and delinquent taxes and State credits received by the City in July, December and the following
January are recognized as revenue for the current year. Taxes and credits not received at the year end
are classified as delinquent and due from County taxes receivable. The portion of delinquent taxes not
collected by the City in January is fully offset by deferred revenue because it is not available to finance
current expenditures. Deferred revenue in governmental activities is susceptible to full accrual on the
government -wide statements.
The City's property tax revenue includes payments from the Metropolitan Revenue Distribution (Fiscal
Disparities Formula) per State Statute 473F. This statute provides a means of spreading a portion of
the taxable valuation of commercial/industrial real property to various taxing authorities within the
defined metropolitan area. The valuation "shared" is a portion of commercial/industrial property
valuation growth since 1971. Property taxes paid to the City through this formula for 2003 totaled
$811,053. 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 financial statements, the revenue from special assessments is recognized by the City
when it becomes measurable and available to finance expenditures of the current fiscal period. In
practice, current and delinquent special assessments received by the City are recognized as revenue for
the current year. Special assessments are collected by the County and remitted by December 31
(remitted to the City the following January) and are also recognized as revenue for the current year. All
remaining delinquent, deferred and special deferred assessments receivable in governmental funding
are completely offset by deferred revenues. Deferred revenue in governmental activities is susceptible
to full accrual on the government -wide statements.
37
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
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. These receivables are classified as interfund receivables and payables
on the governmental fund balance sheets. The non - current portion of interfund loans are reported as
"advances to /from other funds." Advances between funds are offset by a fund balance reserve account
in applicable governmental funds to indicate they are not available for appropriation and are not
expendable from available financial resources.
L. LAND HELD FOR RESALE
These assets are recorded in the governmental fund, which purchased them at the lower of cost or
market.
M. 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.
38
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
N. COMPENSATED ABSENCES
It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay
benefits. All vacation pay and the portion of sick pay allowable as severance pay is accrued as incurred
in the government -wide and proprietary fund financial statements. The current portion is calculated
based on historical trends.
O. 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.
P. FUND EQUITY
In the governmental fund financial statements, reservations of fund balance represent those portions of
fund equity not appropriable for expenditure or legally segregated for a specific future use. Designated
fund balances represent tentative plans for future use of financial resources.
Q. INTERFUND TRANSACTIONS
Quasi - extemal transactions are accounted for as revenues, expenditures or expenses. Transactions that
constitute reimbursements to a fund for expenditures /expenses initially made from it that are properly
applicable to another fund, are recorded as expenditures /expenses in the reimbursing fund and as
reductions of expenditures or expenses in the fund that is reimbursed.
All other interfund transactions, except quasi - external transactions and reimbursements, are reported as
transfers. Nonrecurring or nonroutine permanent transfers of equity are reported as residual equity
transfers. All other interfund transfers are reported as operating transfers.
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.
39
— CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
4
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Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
R. CHANGES IN ACCOUNTING PRINCIPLES
For the year ended December 31, 2003, the City has implemented Governmental Accounting Standards
Board (GASB) Statement No. 34, Basic Financial Statements – and Management's Discussion and
Analysis – for State and Local Governments.
GASB Statement No. 34 creates new basic financial statements for reporting the City's financial
activities. The financial statements now include government -wide financial statements prepared on the
accrual basis of accounting, and fund fmancial statements which present information for individual
major funds rather than by fund -type which had been the mode of presentation in previously issued
fmancial statements.
The implementation of GASB Statement No. 34 caused the opening fund balance at December 31,
2002, to be restated in terms of "net assets" as follows:
Total fund balances - governmental funds - at December 31, 2002 $ 13,850,831
Add: Cost of capital assets at December 31, 2002 73,190,238
Less: Accumulated depreciation at December 31, 2002 (28,235,352)
Less: Non - current liabilities:
Bond principal outstanding at December 31, 2002 (17,884,450)
Compensated absences payable at December 31, 2002 (384,467)
Accrued interest payable at December 31, 2002 (353,181)
Add: Deferred revenue at December 31, 2002 3,915,006
$ 44,098,625
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 in a financial institution other than that furnishing the collateral.
At year -end, the carrying amount of the City's deposits was $738,813 and the bank balance was
$876,946. The entire bank balance was covered by Federal depository insurance or by collateral held
by the City's agent in the City's name.
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
Note 2 DEPOSITS AND INVESTMENTS (CONTINUED)
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.
Cash and Investment balances as of December 31, 2003 are as follows:
Carrying
Custodial Credit Risk Category and Fair
1 2 3 Value
Negotiable Certificates of Deposit $ 6,519,996 $ $ $ 6,519,996
Commercial Paper 4,014,293 - 4,014,293
Municipal Bonds 530,000 530,000
U.S. Government & Agency Securities 4,707,829 - 4,707,829
$ 15,772,118 $ $ - 15,772,118
Investments not subject to categorization:
Mutual Funds 1,454,033
Money Market Funds 425,505
Total Investments 17,651,656
Deposits 738,813
Cash on Hand 820
Total Cash and Investments $ 18,391,289
Reconciliation of Cash and Investments to the Balance Sheet:
Cash and Investments - Governmental Balance Sheet $ 13,119,420
Cash and Investments with Escrow Agent - Governmental Balance Sheet 490,739
Cash and Investments - Statement of Fiduciary Net Assets 1,380,409
Cash and Investments - Statement of Proprietary Fund Net Assets 3,400,721
Total Cash and Investments $ 18,391,289
41
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
Note 2 DEPOSITS AND INVESTMENTS (CONTINUED)
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 department or
agent in the City's name. Category 3 includes uninsured and unregistered investments for which the
securities are held by the counterparty or by its trust department or agent but not in the City's name.
Cash and investments with escrow agent consist of undisbursed proceeds of the Public Project Bonds
of 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.
Note 3 CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2003 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities:
Capital Assets, Not Being Depreciated
Land $ 3,113,490 $ $ - $ 3,113,490
Total capital assets, not being depreciated 3,113,490 - 3,113,490
Capital Assets, Being Depreciated:
Buildings 6,470,929 - 6,470,929
Office Equipment and Furniture 925,836 78,311 (39,147) 965,000
Vehicles 1,272,160 231,386 (157,288) 1,346,258
Machinery and Shop Equipment 618,889 618,889
Other 911,907 17,858 929,765
Infrastructure 59,877,027 2,763,365 62,640,392
Total Capital Assets, Being Depreciated 70,076,748 3,090,920 (196,435) 72,971,233
Accumulated Depreciation for:
Buildings (1,053,015) (216,073) (1,269,088)
Office Equipment and Furniture (428,458) (87,016) 39,147 (476,327)
Vehicles (591,828) (149,365) 126,129 (615,064)
Machinery and Shop Equipment (338,726) (36,973) (375,699)
Other (336,992) (53,403) (390,395)
Infrastructure (25,486,333) (2,183,720) (27,670,053)
Total Accumulated Depreciation (28,235,352) (2,726,550) 165,276 (30,796,626)
Total Capital Assets, Being Depreciated, Net 41,841,396 364,370 (31,159) 42,174,607
Governmental Activities Capital Assets, Net $ 44,954,886 $ 364,370 $ (31,159) $ 45,288,097
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
Note 3 CAPITAL ASSETS (CONTINUED)
Depreciation expense was charged to governmental functions as follows:
Governmental Activities:
General government $ 276,527
Public safety 96,630
Public services 2,211,723
Parks, recreation and forestry 139,537
Community development 2,133
Total Depreciation Expense, Governmental Activities $ 2,726,550
Beginning Ending
Balance Increases Decreases Balance
Business -Type Activities:
Capital Assets, Being Depreciated:
Buildings $ 48,690 $ $ - $ 48,690
Machinery and Shop Equipment 292,497 292,497
Water and Sewer Lines 31,095,234 2,706,261 33,801,495
Total Capital Assets, Being Depreciated 31,436,421 2,706,261 - 34,142,682
Accumulated Depreciation for:
Buildings (48,690) (48,690)
Machinery and Shop Equipment (185,030) (20,299) (205,329)
Water and Sewer Lines (4,721,955) (626,635) (5,348,590)
Total Accumulated Depreciation (4,955,675) (646,934) (5,602,609)
Business -Type Capital Assets, Net $ 26,480,746 $ 2,059,327 $ - $ 28,540,073
43
AMP
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
Note 4 CITY INDEBTEDNESS
City indebtedness at December 31, 2003 is composed of the following:
Final
Issue Maturity Interest Original Payable
Date Date Rate Issue 12/31/2003
General Obligation Bonds:
2001 Equipment Certificates 2/1/2001 12/31/2004 6.00% $ 332,030 $ 110,000
2002 Equipment Certificates 2/1/2002 12/31/2005 6.00% 140,000 90,000
2003A Equipment Certificates 2/1/2003 12/31/2006 6.00% 130,000 130,000
2003B Equipment Certificates 3/31/2003 12/31/2006 4.00% 200,000 200,000
Civic Complex Lease Rev. Bonds - 98A 8/1/1998 2/1/2019 4.20% -5.35% 5,350,000 4,820,000
Public Project Revenue Ref. Bonds - 99C 9/1/1999 2/1/2010 4.75% -5.10% 980,000 680,000
Total General Obligation Bonds
7,132,030 6,030,000
Special Assessment Bonds:
G.O. Improvement Refunding Bonds, 10/1/1996 2/1/2007 4.20% -5.20% 4,685,000 1,570,000
Series 1996A
G.O. Improvement Refunding Bonds, 8/1/1998 2/1/2015 4.50% -4.90% 4,310,000 3,440,000
Serie 1998A
G.O. Improvement Refunding Bonds, 8/1/1998 2/1/2015 4.50 % -4.90% 2,000,000 1,665,000
Series 1998B
G.O. Improvement Refunding Bonds, 9/1/1999 2/1/2006 4.25 % -4.70% 1,725,000 1,070,000
Series 1999A
G.O. Improvement Bonds, 8/1/2002 2/1/2013 3.00 % -4.10% 645,000 645,000
Series 2002A
-� G.O. Improvement Bonds, 8/1/2002 2/1/2013 3.20% -5.55% 2,110,000 2,110,000
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
Total Special Assessment Bonds 17,815,000 12,840,000
Revenue Bonds:
G.O. Water Revenue Bonds, 10/1/1996 2/1/2012 4.10% -5.70% 3,320,000 2,460,000
Series 1996B
G.O. Water Revenue Bonds, 9/1/1999 2/1/2008 4.25% -4.90% 680,000 510,000
Series 1999B
Total Revenue Bonds 4,000,000 2,970,000
Total - All Bonds 28,947,030 21,840,000
Compensated Absences Payable N/A
.► Total Indebtedness $ 28,947,030 $ 21,840,000
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
Note 4 CITY INDEBTEDNESS (CONTINUED)
The following is a schedule of changes in City indebtedness for the year ended December 31, 2003:
Bonded debt:
General obligation
Special assessment
Compensated absences payable - net
Total general long term debt
Proprietary Fund:
Revenue bond
Compensated absences -net
Payable Payable Due Within
12/31/2002 Issues Payments 12/31/2003 One Year
$ 6,244,450 $ 330,000 $ 544,450 $ 6,030,000 $ 540,000
11,640,000 2,340,000 1,140,000 12,840,000 2,590,000
384,467 39,725 - 424,192 21,210
18,268,917 2,709,725 1,684,450 19,294,192 3,151,210
3,220,000 - 250,000 2,970,000 265,000
29,400 3,290 32,690 1,635
Total $ 21,518,317 $ 2,713,015 $ 1,934,450 $ 22,296,882 $ 3,417,845
All long -term bonded indebtedness outstanding at December 31, 2003 is backed by the full faith and credit of
the City, including special assessment bond issues.
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,
2004 $ 3,130,000 $ 784,372 $ 265,000 $ 150,090 $ 4,329,462
2005 1,935,000 679,358 280,000 136,990 3,031,348
2006 1,960,000 602,581 295,000 122,868 2,980,449
2007 1,510,000 532,539 305,000 107,835 2,455,374
2008 1,155,000 477,980 325,000 91,733 2,049,713
2009 - 2013 5,450,000 1,621,076 1,500,000 174,124 8,745,200
2014 - 2018 3,195,000 486,728 - 3,681,728
2019 535,000 13,871 548,871
Total $ 18,870,000 $ 5,198,505 $ 2,970,000 $ 783,640 $ 27,822,145
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, 2003
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. 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 Lake's legal debt margin for 2003 and 2002 is computed as
follows:
December 31,
Market value
2003
1,251,221,800
2002
1,034,432,100
Applicable percentage 2 % 2 %
Debt Limit 25,024,436 20,688,642
Amount of debt applicable to debt limit:
Total bonded debt 21,840,000 21,104,450
Less: Special assessment bonds (12,840,000) (11,640,000)
Public project revenue bonds (680,000) (765,000)
Revenue bonds (2,970,000) (3,220,000)
Total debt applicable to debt limit 5,350,000 5,479,450
Legal debt margin 19,674,436 15,209,192
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 in
the Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership
by statute are covered by the PEPFF.
PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors
upon death of eligible members. Benefits are established by State Statute, and vest after three years of
credited service. The defined retirement benefits are based on a member's highest average salary for
any five successive years of allowable service, age, and years of credit at termination of service.
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
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 1, 1989. A reduced retirement annuity is also available
to eligible members seeking early retirement.
There are different types of annuities available to members upon retirement. A 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 financial 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, 2003,
2002, and 2001 were $124,431, $120,190, and $112,960, respectively. The City's contributions to the
Public Employees Police & Fire Fund for the years ending December 31, 2003, 2002, and 2001 were
$139,726, $119,927, and $105,655, 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, 2003
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int
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 SEGMENT INFORMATION
The City actively maintains two Enterprise Funds, which provide water and sanitary sewer services. Segment
information for the year ended December 31, 2003 is as follows:
Water Sewer Totals
Utility Utility 2003 2002
Operating revenue $ 1,064,326 $ 1,216,589 $ 2,280,915 $ 1,890,787
Depreciation expense 304,382 342,563 646,945 645,961
Operating income (loss) 254,537 170,419 424,956 (10,991)
Capital asset additions 947,774 1,758,487 2,706,261 132,391
Net income (loss) 1,359,127 1,948,462 3,307,589 156,058
Operating transfers in 301,355 301,355 304,075
Net Capital Assets 13,198,425 15,341 648 28,540,073 26,480,755
Net working capital 833,100 2,503,209 3,336,309 2,336,238
Total assets 14,586,115 17,863,721 32,449,836 29,394,747
Bonds payable 2,970,000 - 2,970,000 3,220,000
Total equity 11,487,807 17,828,512 29,316,319 26,008,730
Note 9 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY
Deficit Fund Balances
The City has deficit fund balances at December 31, 2003 as follows:
Fund Balance
Deficit
Dedicated Parks $ (699,225)
Municipal State Aid (391,389)
1997 Construction (698,540)
1998 Construction (2,662,115)
Town Center Project (1,081,320)
Tax Increment Financing 1 -8 (13,060)
Tax Increment Financing 1 -10 (6,120)
Tax Increment Financing 1 -11 (1,612)
The City intends to fund these deficits through future tax levies, special assessment levies, tax increments,
transfers from other funds, and various other sources.
48
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
Note 9 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY (CONTINUED)
Expenditures in Excess of Budget
Actual expenditures exceeded 2003 budgets in the following fund:
Budget Actual
Program Recreation
Note 10 CONTINGENCIES
225,341 $ 244,555
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, 2003.
Note 11 DEFERRED AD VALOREM TAX LEVIES - BONDED DEBT
General Obligation bond issues sold by the City are financed by ad valorem tax levies and special assessment
bond issues sold by the City are partially financed by ad valorem tax levies in addition to special assessments
levied against the benefiting properties. When a bond issue to be financed partially or completely by ad valorem
tax levies is sold, specific annual amounts of such tax levies are stated in the bond resolution and the County
Auditor is notified and instructed to levy these taxes over the appropriate years. The future tax levies are subject
to cancellation when and if the City has provided alternative sources of financing. The City Council is required
to levy any additional taxes found necessary for full payment of principal and interest.
These future scheduled tax levies are not shown as assets in the accompanying financial statements at
December 31, 2003 and 2002.
Future scheduled tax levies for all bonds outstanding at December 31, 2003 totaled $10,201,740.
49
OMNI
Iwo
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
Note 12 DESIGNATIONS AND RESERVATIONS OF FUND EQUITY
At December 31, 2003 and 2002, 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, 2003 and 2002 are shown on the various balance sheets as segregations of the fund equity. A
summary of such designations is as follows:
General Fund:
Reserved for prepaid items
Designated for cash flow reserve
Special Revenue Fund:
Reserved for prepaid items
Designated for recreation purposes
Debt Service Funds:
Reserved for debt retirement
Capital Projects Funds:
Reserved for advance to other funds
Reserved for land held for resale
Designated for capital improvements
Note 13 SHARE IN GAS FRANCHISE PROFITS
December 31,
2003 2002
$ 133,921
4,775,969
1,759
32,704
1,719,181
989,506
2,104,428
$ 120,727
4,232,291
2,430
25,200
1,818,859
957,111
989,506
10,756,007
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 was $84,122 for 2003.
Note 14 INTERFUND RECEIVABLE AND PAYABLES
Individual fund receivable and payable balances at December 31, 2003 are as follows:
General Fund:
Capital Projects Funds:
Municipal State Aid
Area and Unit Charge
1997 Construction
1998 Construction
Town Center Project
Tax Increment Financing 1 -8
Tax Increment Financing 1 -10
Receivable
6,541,232
$ 6,541,232
Payable
$ 70,124
347,764
1,376,889
2,662,115
2,070,826
12,430
1,084
$ 6,541,232
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
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, 2003, two series of Industrial Revenue Bonds were outstanding with aggregate remaining
principal balances of $2,005,000 and $3,600,000, respectively.
Note 17 LEASE COMMITMENT
The City of Lino Lakes entered into a
facility on property it already owned.
District No. 12 (ISD 12), the tenant,
payments are $110 per square foot per
remaining payments is as follows:
2004
2005
2006
2007
2008
2009
Total
lease agreement dated December 8, 1997 whereby the City constructed a
Upon completion, this facility was leased to the Independent School
in January 1999 and will continue until June 30, 2009. The tenant's
year for a total of $1,200,000 over the term of the lease. The schedule of
$ 112,500
112,500
112,500
112,500
112,500
75,000
$ 637,500
51
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
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 2003, the City of Lino Lakes' contributions to the District were as follows:
Operating $ 369,752
Capital 67,500
Total $ 437,252
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, 2003 are as follows:
Total Assets $ 1,900,021
.. Total Liabilities 86,235
Total Net Assets 1,813,786
Total Operating Revenue 686,186
Total Operating Expenses 583,038
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended December 31, 2003
Statement 11
Page 1 of 6
2003
Original Final
Budget Budget
Revenue:
General property taxes:
Actual
Variance with
Final Budget
Positive (Negative)
Current and delinquent $ 5,207,932 $ 5,207,932 $ 4,572,015 $ (635,917)
Fiscal disparities - 686,085 686,085
Excess tax increments 3,000 3,000 405 (2,595)
Total general property taxes 5,210,932 5,210,932 5,258,505 47,573
Licenses and permits:
Non - business 743,500 743,500 731,315 (12,185)
Business 34,175 34,175 35,209 1,034
Total licenses and permits 777,675 777,675 766,524 (11,151)
Intergovernmental:
Federal:
Other 40,000 40,000 37,521 (2,479)
State:
Local Government Aid 157,735 157,735 - (157,735)
Market Value Credit - - 2,786 2,786
Police state aid 120,000 120,000 128,820 8,820
MSA maintenance 160,000 160,000 156,124 (3,876)
Other 15,000 15,000 25,734 10,734
County /Regional:
Solid waste 35,000 35,000 29,085 (5,915)
Other 4,000 4,000 5,369 1,369
Total intergovernmental 531,735 531,735 385,439 (146,296)
Special Assessments:
Penalties and Interest 4,000 4,000 9,630 5,630
Charges for services:
General government 28,500 28,500 30,325 1,825
Planning /engineering 15,000 15,000 19,180 4,180
Fees retained from collection for
.ur other governments - SAC /surcharge 4,000 4,000 3,921 (79)
Administrative charge - other funds 51,000 51,000 50,000 (1,000)
Aerial map charge - other funds 10,000 10,000 9,630 (370)
Public safety 68,000 68,000 103,246 35,246
Total charges for services 176,500 176,500 216,302 39,802
Fines and forfeits 100,000 100,000 97,223 (2,777)
Investment earnings 75,000 75,000 31,829 (43,171)
■
Refunds and reimbursements 45,000 45,000 20,801 (24,199)
Miscellaneous:
Gas franchise fees 50,000 50,000 84,122 34,122
Cable TV 19,000 19,000 21,675 2,675
Sale of property 34,500 34,500 35 (34,465)
Donations 5,000 5,000 1,745 (3,255)
Total miscellaneous 108,500 108,500 107,577 (923)
Total revenue
7,029,342 7,029,342 6,893,830 (135,512)
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended December 31, 2003
Statement 11
Page 2 of 6
2003
Original Final
Budget Budget
Actual
Variance with
Final Budget
Positive (Negative)
Expenditures:
General government:
Mayor and council:
Current
Personal services $ 38,804 $ 38,804 $ 34,148 $ (4,656)
Supplies 400 400 - (400)
Other services and charges 44,600 44,600 45,464 864
Contractual Services 26,287 26,287 25,659 (628)
Total mayor and council 110,091 110,091 105,271 (4,820)
Elections:
Current
Personal services 10,550 10,550 6,733 (3,817)
Supplies 200 200 199 (1)
Other services and charges 1,700 1,700 1,234 (466)
Contractual Services 1,000 1,000 - (1,000)
Total elections 13,450 13,450 8,166 (5,284)
Administration:
Current
Personal services 399,902 399,902 347,083 (52,819)
Supplies - 264 264
Other services and charges 22,850 22,850 16,421 (6,429)
Contractual Services 4,300 4,300 3,217 (1,083)
Capital outlay 900 900 - (900)
Total administration 427,952 427,952 366,985 (60,967)
Finance:
Current
Personal services 254,734 254,734 245,975 (8,759)
Supplies 2,500 2,500 691 (1,809)
Other services and charges 32,400 32,400 26,891 (5,509)
Contractual Services 70,900 70,900 72,937 2,037
Capital outlay 20,000 20,000 - (20,000)
Total finance 380,534 380,534 346,494 (34,040)
Cable TV:
Current
Personal services 3,024 3,024 1,076 (1,948)
Supplies 50 50 21 (29)
Capital outlay 4,500 4,500 3,972 (528)
Total cable TV 7,574 7,574 5,069 (2,505)
Consultants:
Current
Legal 148,000 148,000 150,130 2,130
Community Development:
Current
Personal services 148,373 148,373 144,075 (4,298)
Other services and charges 6,600 6,600 2,340 (4,260)
Contractual Services 630 630 641 11
Capital outlay 500 500 - (500)
156,103 156,103 147,056 (9,047)
54
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended December 31, 2003
Statement 11
Page 3 of 6
2003
Original Final
Budget Budget
General government: (continued)
Economic Development:
Current
Actual
Variance with
Final Budget
Positive (Negative)
Personal services $ 70,477 $ 70,477 $ 66,938 $ (3,539)
Supplies 800 800 87 (713)
Other services and charges 16,250 16,250 10,264 (5,986)
Contractual services 22,700 22,700 31,690 8,990
Total economic development 110,227 110,227 108,979 (1,248)
�„ Planning and zoning commission:
Current
Personal services 137,073 137,073 128,001 (9,072)
Supplies 300 300 284 (16)
Other services and charges 20,450 20,450 6,603 (13,847)
Contractual services 7,120 7,120 7,270 150
Total planning and zoning commission 164,943 164,943 142,158 (22,785)
Engineering/planning:
Current
Contractual services 190,000 190,000 160,751 (29,249)
Total engineering/planning 190,000 190,000 160,751 (29,249)
Senior Service
....' Current
Personal services 27,540 27,540 27,121 (419)
Other services and charges 997 997 1,140 143
Capital outlay 500 500 500
Total charter commission 29,037 29,037 28,761 (276)
Charter commission:
Current
Other services and charges 2,500 2,500 1,318 (1,182)
Total charter commission 2,500 2,500 1,318 (1,182)
General government buildings:
Current
.- Personal services 78,408 78,408 71,074 (7,334)
Supplies 41,000 41,000 31,721 (9,279)
Other services and charges 239,615 239,615 265,246 25,631
Contractual services 30,000 30,000 16,476 (13,524)
Capital outlay 20,000 20,000 7,906 (12,094)
Total general government buildings 409,023 409,023 392,423 (16,600)
Total general government 2,149,434
2,149,434 1,963,561 (185,873)
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended December 31, 2003
Statement 11
Page 4 of 6
2003
Original Final
Budget Budget
Actual
Variance with
Final Budget
Positive (Negative)
Public safety:
Police:
Current
Personal services $ 1,928,739 $ 1,928,739 $ 1,847,302 $ (81,437)
Supplies 30,710 30,710 27,663 (3,047)
Other services and charges 67,920 67,920 65,851 (2,069)
Contractual services 19,564 19,564 40,255 20,691
Capital outlay 19,335 19,335 19,213 (122)
Total police 2,066,268 2,066,268 2,000,284 (65,984)
Fire protection:
Current
Contractual services 369,752 369,752 369,751 (1)
Building inspection:
Current
Personal services 260,065 260,065 251,422 (8,643)
Supplies 630 630 700 70
Other services and charges 10,275 10,275 3,577 (6,698)
Contractual services 5,840 5,840 2,650 (3,190)
Capital outlay 3,979 3,979 382 (3,597)
Total building inspection 280,789 280,789 258,731 (22,058)
Total public safety
2,716,809 2,716,809
2,628,766 (88,043)
Public works:
Streets:
Current
Personal services 413,943 413,943 369,902 (44,041)
Supplies 92,750 92,750 105,957 13,207
Other services and charges 66,425 66,425 55,209 (11,216)
Contractual services 110,300 110,300 122,361 12,061
Total streets 683,418 683,418 653,429 (29,989)
Fleet:
Current
Personal services 91,768 91,768 81,836 (9,932)
Supplies 138,250 138,250 132,304 (5,946)
Other services and charges 37,965 37,965 33,456 (4,509)
Contractual services 1,200 1,200 1,739 539
Capital outlay 200,000 200,000 - (200,000)
Total fleet 469,183 469,183 249,335 (219,848)
Total public works
1,152,601 1,152,601
56
902,764 (249,837)
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended December 31, 2003
Statement 11
Page 5 of 6
2003
Original Final
Budget Budget
Parks and recreation:
Parks:
Actual
Variance with
Final Budget
Positive (Negative)
Current
Personal services $ 399,217 $ 399,217 $ 388,951 $ (10,266)
Supplies 49,000 49,000 43,762 (5,238)
.... Other services and charges 37,160 37,160 38,054 894
Contractual services 13,350 13,350 10,738 (2,612)
Total parks 498,727 498,727 481,505 (17,222)
Recreation:
,..., Current
Personal services 247,563 247,563 229,961 (17,602)
Supplies 3,000 3,000 4,078 1,078
Other services and charges 21,100 21,100 8,300 (12,800)
Contractual services 890 890 1,198 308
Total recreation 272,553 272,553 243,537 (29,016)
Total parks and recreation 771,280 771,280 725,042 (46,238)
Conservation of natural resources:
Forestry:
Current
Personal services 39,835 39,835 35,787 (4,048)
Supplies 2,100 2,100 346 (1,754)
Other services and charges 850 850 235 (615)
Contractual services 8,850 8,850 9,357 507
Capital outlay 25,000 25,000 - (25,000)
Total forestry 76,635 76,635 45,725 (30,910)
Environmental:
Current
Personal services 39,134 39,134 35,562 (3,572)
Supplies 2,200 2,200 203 (1,997)
Other services and charges 10,940 10,940 3,803 (7,137)
_ Contractual services 3,800 3,800 4,286 486
Total environmental 56,074 56,074 43,854 (12,220)
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended December 31, 2003
Statement 11
Page 6 of 6
2003
Original Final
Budget Budget
Actual
Variance with
Final Budget
Positive (Negative)
Conservation of natural resources: (continued)
Solid waste abatement:
Current
Personal services $ 9,023 $ 9,023 $ 10,088 $ 1,065
Supplies 200 200 (200)
Other services and charges 2,200 2,200 518 (1,682)
Contractual services 16,600 16,600 14,395 (2,205)
Capital outlay 5,000 5,000 609 (4,391)
Total solid waste abatement 33,023 33,023 25,610 (7,413)
Total conservation of natural resources 165,732 165,732 115,189 (50,543)
Other
Contingency 73,486 73,486 (73,486)
Total expenditures 7,029,342 7,029,342 6,335,322 (694,020)
Revenue over expenditures - - 558,508 558,508
Other financing sources (uses):
Operating transfer to Special Revenue Fund - (1,018) (1,018)
Operating transfer to Capital Project Fund (618) (618)
Total other financing sources (uses) (1,636) (1,636)
Net increase (decrease) in fund balance $ $ 556,872 $ 556,872
Fund Balance - January 1 4,353,018
Fund balance - December 31 $ 4,909,890
58
-
-
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.
Civic Center Project - to account for costs associated with the construction of the Civic Complex project
Tax Increment - to account for development projects financed with tax increments.
Lake /Apollo Drive Improvement Fund - The Lake /Apollo Drive Improvement Fund was established to
account for the costs of upgrading Lake Drive and Apollo Drive east of Lake Drive for the Market Place
development.
Twilight Acres/W. Shadow Pond Improvement Fund - The Twilight Acres /W. Shadow Pond
Improvement Fund was 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.
CITY OF LINO LAKES, MINNESOTA
COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS
December 31, 2003
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
Special Revenue Debt Service
Economic Special Improvement Improvement
Development Program Revenue Bonds of Bonds of
Authority Recreation SubTotal 1996A 1998A
$ 66,414 $ 66,414 $ 435,193 $ 14,088
1,759 1,759
1,899
30,652 188,161
363
Total assets $ $ 68,173 $ 68,173 $ 465,845 $ 204,511
Liabilities and Fund Balance
Liabilities:
Interfund payable $ $ - $ - $ - $
Accounts payable 32,758 32,758 1,682
Salaries Payable 952 952 -
Retainage payable
Due to Other Governments
Advances from Other Funds
Deferred revenue 30,652 190,060
Total liabilities 33,710 33,710 32,334 190,060
Fund balance (deficit):
Reserved for Prepaid Items 1,759 1,759
Reserved for Debt Retirement
Reserved for Advances to Funds
Reserved for land held for resale
Unreserved:
Designated:
Recreation Programs 32,704 32,704 -
Capital improvements
Undesignated - 433,511 14,451
Total fund balance (deficit) 34,463 34,463 433,511 14,451
Total liabilities and fund balance $ $ 68,173 $ 68,173 $ 465,845 $ 204,511
59
lam
WINNE
Vow
IMMO
Now
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
1998E Indebtedness of 1998A of 1999A of 1999C 2002A 2003A
$ 335,627 $ 77,161 $ 346,225 $ 119,467 $ 306,897 $ 205,355 $ 227,488
480,473
181
56,250
10,266
4
2,729 5,853 6,158 2,221
3,262 6,934 7,428 2,666
502
327,965
2,041
239
14,180
153
448,598
344,056
$ 672,126 $ 89,948 $ 896,715 $ 134,039 $ 322,054 $ 653,953 $ 571,544
331,196
331,196
340,930
$ - $
5,853 6,158
5,853 6,158 14,420 2,221 448,598 344,789
733
14,420 2,221 448,598 344,056
84,095
890,557 119,619
340,930 84,095 890,557 119,619
319,833 205,355
226,755
319,833 205,355 226,755
$ 672,126 $ 89,948 $ 896,715 $ 134,039 $ 322,054 $ 653,953 $ 571,544
CITY OF LINO LAKES, MINNESOTA
COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS
December 31, 2003
Debt Service (continued) Capital Projects
Improvement Debt Capital Closed
Bonds of Service Improvement Bond Street
2003B SubTotal Projects Fund Reconstruction
Assets
Cash and investments $ 692 $ 2,068,193 $ 475,740 $ 981,221 $ 530,030
Cash and investments
with escrow agent 490,739
Accrued Interest Receivable 185
Accounts receivable 56,250 -
Due from other governmental units - -
Interfund receivable - Taxes receivable:
Delinquent 16,961
Due from County - 20,290
Delinquent tax increment -
Special assessments receivable:
Delinquent - 2,640 547
Deferred 135,074 1,488,686 24,383
Due from County - 2,557
Prepaid Items -
Advances to Other Funds -
Land held for resale
Total assets
Liabilities and Fund Balance
$ 135,766 $ 4,146,501 $ 475,740 $ 1,006,151 $ 530,030
Liabilities:
Interfund payable 8 $ - $ $ $
Accounts payable 2,415 6,020 31,614
Salaries Payable - -
Retainage payable 10,672
Due to Other Governments
Advances from Other Funds - -
Deferred revenue 135,074 1,508,288 - 24,930
Total liabilities 135,074 1,510,703 30,950 42,286
Fund balance (deficit):
Reserved for Prepaid Items -
Reserved for Debt Retirement 1,960,389 -
Reserved for Advances to Funds -
Reserved for land held for resale -
Unreserved:
Designated:
Recreation Programs
Capital improvements - - - - 487,744
Undesignated 692 675,409 475,740 975,201
Total fund balance (deficit) 692 2,635,798 475,740 975,201 487,744
Total liabilities and fund balance $ 135,766 $ 4,146,501 $ 475,740 $ 1,006,151 $ 530,030
61
OMEN
NNW
Statement 12
Page 2 of 4
Capital Projects (Continued)
Surface
Water SAC Interim 1996 1997 1998
Sealcoating Management Revolving Construction Construction Construction Construction
$ 103,859 $ 1,548,388 $ 368,849 $ 271,646 $ 739,791 $ $
5,000
423 2,155
2,450 180,370
97 2,140
678,349
$ 106,829 $ 1,738,053 $ 368,849 $ 271,646 $ 739,791 $ 678,349
8,172
$ $ $ $ $ $ 1,376,889 $ 2,662,115
383
2,873
3,256
126,237
182,525
316,934
2,550
2,550
1,376,889 2,662,115
103,573 1,421,119 271,646 739,791
- - 366,299 - - (698,540) (2,662,115)
103,573 1,421,119 366,299 271,646 739,791 (698,540) (2,662,115)
$ 106,829 $ 1,738,053 $ 368,849 $ 271,646 $ 739,791 $ 678,349 $
CITY OF LINO LAKES, MINNESOTA
COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS
December 31, 2003
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
Total assets
Liabilities and Fund Balance
Liabilities:
Interfund payable
Accounts payable
Salaries Payable
Retainage payable
Due to Other Governments
Advances from Other Funds
Deferred revenue
Total liabilities
Capital Projects (continued)
Tax
Town Town Lake /Apollo Dr Twilight Acres/ Increment
Center Center Improvement W Shadow Pond Financing
Project Infrastructure Market Place Improvement 1 -4
989,506
$ 21,420 $ 41,903 $ 224,791 $ 32,769
$ 989,506 $ 21,420 $ 41,903 $ 224,791 $ 32,769
$ 2,070,826 $
$ $
39,387
39,254
2,070,826 78,641
Fund balance (deficit):
Reserved for Prepaid Items -
Reserved for Debt Retirement -
Reserved for Advances to Funds -
Reserved for land held for resale 989,506 -
Unreserved:
Designated:
Recreation Programs -
Capital improvements - 21,420 - 32,769
Undesignated (2,070,826) - 41,903 146,150 -
Total fund balance (deficit) (1,081,320) 21,420 41,903 146,150 32,769
Total liabilities and fund balance $ 989,506 $ 21,420 $ 41,903 $ 224,791 $ 32,769
63
Statement 12
Page 3 of 4
Capital Projects (Continued)
Tax Tax Tax Tax Tax Tax Tax
Increment Increment Increment Increment Increment Increment Increment
Financing Financing Financing Financing Financing Financing Financing
1 -5 1 -6 1 -7 1 -8 1 -9 3 -1 1 -10
$ 19,450 $ 100 $ 461 $ $ 17,788 $ 900 $
164
210
355
$ 19,450 $ 100 $ 461 $ 374 $ 18,143 $ 900 $
$ g $ $ 12,430 $ $ $ 1,084
397 100 461 794 921 900 5,036
'^ 1,822
210 355
2,219 100 461 13,434 1,276 900 6,120
`.— 17,231 - 16,867 (6,120)
- (13,060) - -
17,231 (13,060) 16,867 (6,120)
$ 19,450 $ 100 $ 461 $ 374 $ 18,143 $ 900 $
CITY OF LINO LAKES, MINNESOTA
COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS
December 31, 2003
Statement 12
Page 4 of 4
Capital Projects (continued)
Tax
Increment Capital
Financing Projects
1 -11 SubTotal
Assets
Total
2003
Cash and investments $ $ 5,379,106 $ 7,513,713
Cash and investments
with escrow agent 490,739
Accrued Interest Receivable - 185
Accounts receivable 56,250
Due from other governmental units 683,349 683,349
Interfund receivable
Taxes receivable:
Delinquent - 16,961
Due from County 164 20,454
Delinquent tax increment 565 565
Special assessments receivable:
Delinquent 3,125 5,765
Deferred 207,203 1,695,889
Due from County 2,237 4,794
Prepaid Items - 1,759
Advances to Other Funds - - -
Land held for resale 989,506 989,506
Total assets
Liabilities and Fund Balance
Liabilities:
Interfund payable
Accounts payable
Salaries Payable
Retainage payable
Due to Other Governments
Advances from Other Funds
Deferred revenue
Total liabilities
Wow
$ $ 7,265,255 $ 11,479,929
$ $ 6,123,344 $ 6,123,344
1,612 216,412 251,585
952
58,098 58,098
1,822 1,822
210,893 1,719,181
1,612 6,610,569 8,154,982
Fund balance (deficit):
Reserved for Prepaid Items 1,759
Reserved for Debt Retirement 1,960,389
Reserved for Advances to Funds -
Reserved for land held for resale 989,506 989,506
Unreserved:
Designated:
Recreation Programs - 32,704
.—
Capital improvements (1,612) 3,104,428 3,104,428
Undesignated - (3,439,248) (2,763,839)
Total fund balance (deficit) (1,612) 654,686 3,324,947
Total liabilities and fund balance $ - $ 7,265,255 $ 11,479,929
CITY OF LINO LAKES, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2003
Special Revenue Debt Service
Economic Special Improvement Improvement
Development Program Revenue Bonds of Bonds of
Authority Recreation SubTotal 1996A 1998A
Revenue:
General property taxes $ $ $ $ $
Tax increments - -
Intergovernmental -
Special assessments - 5,080 158,125
Charges for services 250,816 250,816
Investment earnings 572 572 -
Refunds and reimbursements -
Miscellaneous
Total revenue 251,388 251,388 5,080 158,125
Expenditures:
Current:
General government:
Public works:
Parks, recreation and forestry
Capital outlay:
General government
Public safety
Public works
Parks, recreation and forestry
Debt service:
Principal
Interest and fiscal charges
Construction/acquisition
Total expenditures
Revenue over (under) expenditures
Other financing sources (uses):
Operating transfer from General Fund
Operating transfer from Capital Project Funds
Operating transfer to Debt Service Funds
Operating transfer to Capital Project Funds
Operating transfer to Enterprise Funds
Bond proceeds
Total other financing sources (uses)
1,018 1,018
1,018
(1,018)
244,555 244,555
244,555
6,833
405,000 290,000
100,123 167,399
245,573 505,123 457,399
5,815 (500,043) (299,274)
1,018 1,018 -
276,656
1,018 1,018
1,178,566
1,455,222
405,000
405,000
Net increase (decrease) in fund balance 6,833 6,833 955,179 105,726
Fund balance (deficit)
Beginning of year 27,630 27,630 (521,668) (91,275)
Fund balance (deficit) - December 31 $ $ 34,463 $ 34,463 $ 433,511 $ 14,451
66
Mae
IMMO
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
$ 143,027 $ 299,969 $ 322,969 $ $ 115,786 $ - $
67,135
1,811
616 582 11,191 216 210,240 220,906
965
211,973 301,550
110,000 269,450
81,899 35,867
191,899 305,317
20,074 (3,767)
4,123
112,500
440,174
2,108
11,191 118,110
190,000 335,000
251,961 56,736
441,961 391,736
3,457
210,240 224,363
85,000 -
37,052 24,947
122,052 24,947
(1,787) (380,545) (3,942) 185,293 224,363
�- 20,074 (3,767) (1,787)
320,856 87,862 892,344
5 340,930 $ 84,095 $ 890,557
391,554
2,392
391,554 2,392
11,009 (3,942) 185,293 226,755
108,610 323,775 20,062
$ 119,619 $ 319,833 $ 205,355 $ 226,755
CITY OF LINO LAKES, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2003
Debt Service (continued) Capital Projects
Improvement Debt Capital Closed
Bonds of Service Improvement Bond Street
2003B SubTotal Projects Fund Reconstruction
Revenue:
General property taxes $ $ 881,751 $ - $ $ -
Tax increments -
Intergovernmental - -
Special assessments 674,091 (4,403) 45,949
Charges for services - -
Investment earnings 692 13,156 4,547 8,725 4,255
Refunds and reimbursements - - -
Miscellaneous 112,500 120,648
Total revenue 692 1,681,498 125,195 4,322 50,204
Expenditures:
Current:
General government: 1,836 8,731
Public works: 300,167
Parks, recreation and forestry
Capital outlay:
General govemment 89,285
Public safety 137,612
Public works 162,680
Parks, recreation and forestry -
Debt service:
Principal - 1,684,450
Interest and fiscal charges 755,984
Construction/acquisition -
Total expenditures 2,440,434 391,413 8,731 300,167
Revenue over (under) expenditures 692 (758,936) (266,218) (4,409) (249,963)
Other financing sources (uses):
Operating transfer from General Fund
Operating transfer from Capital Project Funds 1,073,210
Operating transfer to Debt Service Funds - - -
Operating transfer to Capital Project Funds
Operating transfer to Enterprise Funds -
Bond proceeds 1,180,958 330,000 250,000
Total other financing sources (uses) 2,254,168 330,000 250,000
Net increase (decrease) in fund balance 692 1,495,232 63,782 (4,409) 37
Fund balance (deficit)
Beginning of year 1,140,566 411,958 979,610 487,707
Fund balance (deficit) - December 31 $ 692 $ 2,635,798 $ 475,740 $ 975,201 $ 487,744
68
Mims
elm
Statement 13
Page 2 of 4
Capital Projects
Surface
Water SAC Interim 1996 1997 1998
Sealcoating Management Revolving Construction Construction Construction Construction
17,757 387,829
1,251 12,812
64,350 -
83,358 400,641
114,210
114,210
(30,852)
453,508
3,265 2,397 6,527
3,265
3,832
453,508 3,832
2,397 6,527
(52,867) (567) 2,397 6,527
NM' (30,852) (52,867) (567) 2,397 6,527
134,425 1,473,986 366,866 269,249 733,264 (698,540) (2,662,115)
$ 103,573 $ 1,421,119 $ 366,299 $ 271,646 $ 739,791 $ (698,540) $ (2,662,115)
CITY OF LINO LAKES, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2003
Capital Projects (Continued)
Town Town Lake /Apollo Dr Twilight Acres/ Tax Increment
Center Center Improvement W Shadow Pond Financing
Project Infrastructure Market Place Improvement 1 -4
Revenue:
General property taxes $ $ $ $ $
Tax increments - (3)
Intergovernmental - 38,693
Special assessments 4,351 - -
Charges for services - - -
Investment earnings 153 747 3,236 407
Refunds and reimbursements - -
Miscellaneous
Total revenue 4,504 39,440 3,236 404
Expenditures:
Current:
General government:
Public works:
Parks, recreation and forestry
Capital outlay:
General government
Public safety
Public works
Parks, recreation and forestry
Debt service:
Principal
Interest and fiscal charges
Construction/acquisition
Total expenditures
Revenue over (under) expenditures
Other financing sources (uses):
Operating transfer from General Fund
Operating transfer from Capital Project Funds
Operating transfer to Debt Service Funds
Operating transfer to Capital Project Funds
Operating transfer to Enterprise Funds
Bond proceeds
Total other financing sources (uses)
Net increase (decrease) in fund balance
Fund balance (deficit)
Beginning of year
Fund balance (deficit) - December 31
386 5,579 19
11,451
1 1,837
217,870
223,449
19
4,504 27,603 (220,213) 385
(14,527)
(14,527)
4,504 27,603 (220,213) (14,142)
(1,081,320) 16,916 14,300 366,363 46,911
(1,081,320) $ 21,420 $ 41,903 $ 146,150 $ 32,769
70
NEN
IMMO
VOW
Statement 13
Page 3 of 4
Capital Projects (Continued)
Tax Increment Tax Increment Tax Increment Tax Increment Tax Increment Tax Increment Tax Increment
Financing Financing Financing Financing Financing Financing Financing
1 -5 1 -6 1 -7 1 -8 1 -9 3 -1 1 -10
$ - $ - $ $ - $ - $ $
46,854 3,739 115,426 22,756 189,544 168,944
234 - - - -
(600) -
163 492 106 3,641
47,251 3,739 115,318 22,756 189,650 172,585
43,936
43,936
3,315
(8,311) 159,366
(8,311)
12,050
159,366
(44,048)
21,388 178,709
21,388 178,709
585,749 6,120
585,749 6,120
1,368 10,941 (413,164) (6,120)
118 300 200
14,527 - -
14,645 300 200
... 3,315 26,695 (43,748) 1,368 10,941 (412,964) (6,120)
13,916 (26,695) 43,748 (14,428) 5,926 412,964
$ 17,231 $ $ $ (13,060) $ 16,867 $ $ (6,120)
CITY OF LINO LAKES, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2003
Statement 13
Page 4 of 4
Revenue:
General property taxes
Tax increments
Intergovernmental
Special assessments
Charges for services
Investment earnings
Refunds and reimbursements
Miscellaneous
Total revenue
Capital Projects (Continued)
Tax Increment Capital
Financing Projects
1 -11 SubTotal
Totals
2003
$ $ 881,751
547,260 547,260
38,927 38,927
45 1,483 1,125,574
(600) 250,216
52,724 66,452
64,350 64,350
120,648 233,148
1,274,792 3,207,678
Expenditures:
Current:
General government: 1,612 1,008,952 1,009,970
Public works: - 867,885 867,885
Parks, recreation and forestry 244,555
Capital outlay:
General government 89,285 89,285
Public safety 137,612 137,612
Public works 162,680 162,680
Parks, recreation and forestry -
Debt service:
Principal 1,684,450
Interest and fiscal charges 755,984
Construction /acquisition 229,321 229,321
Total expenditures 1,612 2,495,735 5,181,742
Revenue over (under) expenditures (1,612) - (1,220,943) (1,974,064)
Other financing sources (uses):
Operating transfer from General Fund 618 1,636
Operating transfer from Capital Project Funds 14,527 1,087,737
Operating transfer to Debt Service Funds - - -
Operating transfer to Capital Project Funds (14,527) (14,527)
Operating transfer to Enterprise Funds - -
Bond proceeds 580,000 1,760,958
Total other financing sources (uses) 580,618 2,835,804
Net increase (decrease) in fund balance (1,612) (640,325) 861,740
Fund balance (deficit)
Beginning of year 1,295,011 2,463,207
Fund balance (deficit) - December 31 $ (1,612) $ 654,686 $ 3,324,947
72
SUPPLEMENTARY FINANCIAL INFORMATION
CITY OF LINO LAKES, MINNESOTA
COMBINED SCHEDULE OF INDEBTEDNESS
December 31, 2003
Interest
Rates
Dated
Final
Maturity
Date
General Obligation Bonds:
2000 Equipment Certificates 6.00% 2/1/00 12/31/03
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
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. O. Improvement Bonds of 1996A 4.20 % -5.20% 10/1/96 2/1/07
G. O. Improvement Bonds of 1998A 4.50 % -4.90% 8/1/98 2/1/15
G. O. Improvement Bonds of 1998B 4.50 % -4.90% 8/1/98 2/1/15
G. O. Improvement Refunding Bonds of 1999A 4.25 % -4.70% 9/1/99 2/1/06
G. O. Improvement Bonds of 2002A 3.00 % -4.10% 8/1/02 2/1/13
G. O. Improvement Bonds of 2002B 3.20 % -5.55% 8/1/02 2/1/13
G. O. Improvement Refunding Bonds of 2003A 2.00 % -4.25% 12/1/03 2/1/19
G. O. Improvement Bonds of 2003B 3.20 % -5.60% 12/1/03 2/1/14
Total General Improvement Bonds with special assessments pledged
Revenue Bonds:
G. O. Water Revenue Bonds of 1996B 4.10 % -5.70% 10/1/96 2/1/12
G. O. Water Revenue Refunding Bonds of 1999B 4.25 % -4.90% 9/1/99 2/1/08
Total Revenue Bonds
Total City indebtedness
73
Exhibit 1
Prior Years Principal Interest
Original Payable 2003 Payable Due Due
Issue Payments 1/1/03 Issued Payments 12/31/03 In 2004 In 2004
$ 325,450 $ 217,000 $ 108,450 $ $ 108,450 $ - $ $ -
- 332,030 111,030 221,000 111,000 110,000 110,000 6,600
140,000 - 140,000 - 50,000 90,000 45,000 5,400
130,000 - 130,000 45,000 14,950
- 200,000 - 200,000 50,000 14,000
' 5,350,000 340,000 5,010,000 - 190,000 4,820,000 205,000 239,975
980,000 215,000 765,000 85,000 680,000 85,000 31,034
7,127,480 883,030 6,244,450 330,000 544,450 6,030,000 540,000 311,959
■
4,685,000 2,710,000 1,975,000 405,000 1,570,000 1,570,000 39,630
4,310,000 580,000 3,730,000 290,000 3,440,000 290,000 152,550
2,000,000 225,000 1,775,000 110,000 1,665,000 115,000 75,040
1,725,000 320,000 1,405,000 335,000 1,070,000 350,000 41,350
645,000 - 645,000 645,000 95,000 19,890
2,110,000 - 2,110,000 - 2,110,000 170,000 97,985
- 2,090,000 2,090,000 38,067
250,000 250,000 7,902
15,475,000 3,835,000 11,640,000 2,340,000 1,140,000 12,840,000 2,590,000 472,414
3,320,000 695,000 2,625,000 165,000 2,460,000 175,000 128,108
680,000 85,000 595,000 85,000 510,000 90,000 21,983
4,000,000 780,000 3,220,000 250,000 2,970,000 265,000 150,091
- 26,602,480 5,498,030 21,104,450 2,670,000 1,934,450 21,840,000 3,395,000 934,464
74
CITY OF LINO LAKES, MINNESOTA
SCHEDULE OF DEFERRED TAX LEVIES
December 31, 2003
Exhibit 2
G.O. Public
Lease G. 0. Improvement Project G. 0.
Year of Equipment Equipment Equipment Equipment Equipment Revenue Improvement Refunding Refunding Improvement
Levy/ Certificates Certificates Certificates Certificates Certificates Bonds Bonds Bonds of Bonds Bonds
Collection of2000 of200I of2002 of2003A of2003B of1998A of1998B I999A 1999C of2002A Total
2003/2004 $ $ 122,430 $ 52,920 $ 62,948 $ 67,200 $ 325,988 $ 154,876 $ 418,399 $ 120,729 $ - $ 1,325,490
2004/2005 50,085 52,605 74,550 332,525 151,072 390,270 126,641 1,547 1,179,295
2005/2006 - 44,520 92,820 343,382 152,519 121,459 8,897 763,597
2006/2007 - 353,031 153,729 126,667 5,259 638,686
2007/2008 - - 361,562 154,704 - 7,467 523,733
2008/2009 - 368,387 155,441 - 6,496 530,324
2009/2010 - - - 485,462 155,796 - 5,446 646,704
2010/2011 - - 485,987 155,757 9,645 651,389
■ 2011/2012 490,655 155,313 - - 8,385 654,353
2012/2013 - - 489,001 154,537 - 643,538
2013/2014 - - - 491,258 158,719 - - 649,977
2014/2015 - - 492,413 - - 492,413
2015/2016 - - - 497,716 - - - 497,716
2016/2017 - - 501,215 - - - 501,215
■
2017/2018 - - 503,310 - - - 503,310
$ $ 122,430 $ 103,005 $ 160,073 5 234,570 $ 6,521,892 $ 1,702,463 $ 808,669 $ 495,496 $ 53,142 $ 10,201,740
MEM
OMEN
75
CITY OF LINO LAKES, MINNESOTA
DEBT SERVICE PAYMENTS TO MATURITY - ALL BONDS
December 31, 2003
G. O.
G. O. G. O. G. O. Improvement
Equipment Equipment Equipment Equipment Improvement Improvement Improvement Refunding
Certificates Certificates Certificates Certificates Bonds Bonds Bonds Bonds
2001 2002 2003A 2003B of 1996A of 1998A of 1998B of 1999A
Bonds payable $ 110,000 $ 90,000 $ 130,000 $ 200,000 $ 1,570,000 $ 3,440,000 $ 1,665,000 $ 1,070,000
Future interest payable 6,600 8,100 22,450 23,400 39,630 966,525 506,896 74,773
Totals $ 116,600 $ 98,100 $ 152,450 $ 223,400 $ 1,609,630 $ 4,406,525 $ 2,171,896 $ 1,144,773
Payments to maturity:
2004 116,600 50,400 59,950 64,000 1,609,630 442,550 190,040 391,350
2005 - 47,700 50,100 71,000 - 429,500 189,752 390,081
2006 42,400 88,400 416,450 184,352 363,342
2007 - 403,400 183,840
2008 - 385,462 183,103
2009 - - 372,637 182,140
2010 - - 359,670 180,882
2011 - 346,489 179,256
2012 - - 333,094 177,248
2013 - 319,485 174,888
2014 - - - 305,805 172,230
2015 - - - 291,983 174,165
2016 - - -
2017 - -
2018
2019 - - -
2020 - - -
2021 - - -
$ 116,600 $ 98,100 $ 152,450 $ 223,400 $ 1,609,630 $ 4,406,525 $ 2,171,896 $ 1,144,773
76
Vam
Exhibit 3
G. O. G. O. G. O. Water Civic Public
G. 0. G. 0. Improvement G. 0. Water Revenue Complex Project
Improvement Improvement Refunding Improvement Revenue Refunding Revenue Revenue
Bonds Bonds Bonds Bonds Bonds Bonds Bonds Bonds
of 2002A of 2002B 2003A 2003B of 1996B of 1999B of 1998A of 1999C Totals
$ 645,000 $ 2,110,000 $ 2,090,000 $ 250,000 $ 2,460,000 $ 510,000 $ 4,820,000 $ 680,000 $ 21,840,000
83,380 586,010 364,151 81,285 719,744 63,892 2,318,565 116,778 5,982,179
$ 728,380 $ 2,696,010 $ 2,454,151 $ 331,285 $ 3,179,744 $ 573,892 $ 7,138,565 $ 796,778 $ 27,822,179
114,891 267,985 38,067 7,902 303,108 111,983 444,975 116,034 4,329,465
112,040 266,984 487,750 11,853 304,195 112,795 426,078 131,521 3,031,349
114,115 269,725 488,950 36,453 299,725 118,143 431,860 126,534 2,980,449
120,883 266,568 474,000 35,584 299,680 113,154 441,625 116,640 2,455,374
117,253 267,688 82,813 34,590 298,915 117,817 450,282 111,790 2,049,713
29,893 272,613 81,301 33,490 419,034 457,595 101,964 1,950,667
28,930 271,388 79,611 32,315 419,682 346,594 92,295 1,811,367
27,930 269,310 82,638 35,950 418,864 455,094 1,815,531
31,830 271,395 80,537 34,390 416,541 455,068 1,800,103
30,615 272,354 78,438 32,778 - 459,002 1,367,560
81,088 35,980 - 456,790 1,051,893
78,488 - - - 458,415 1,003,051
80,788 - - - 458,990 539,778
77,988 - - - 463,181 541,169
79,994 465,845 - 545,839
81,700 - - - 467,171 548,871
$ 728,380 $ 2,696,010 $ 2,454,151 $ 331,285 $ 3,179,744 $ 573,892 $ 7,138,565 $ 796,778 $ 27,822,179
CITY OF LINO LAKES, MINNESOTA
INSURANCE IN FORCE
December 31, 2003
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) 18,632,206
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
78
CITY OF LINO LAKES, MINNESOTA
TAXABLE VALUATIONS, TAX LEVIES AND TAX RATES Exhibit 5
Tax Capacity Tax Capacity
Values Values
2002/2003 2001/2002
.—
Taxable valuations:
Total $ 12,387,915 $ 10,628,965
Fiscal disparities:
Distribution 1,539,957 1,368,643
Contribution (562,081) (517,216)
Less: Captured Tax Increment Value (676,932) (566,397)
$ 12,688,859 $ 10,913,995
Tax Tax
Certified Capacity Certified Capacity
Levy Rate Levy Rate
... Taxes Levied:
Revenue 5,180,932 40.268 4,885,509 43.954
Bond and Interest 943,689 7.335 1,016,649 9.130
Totals $ 6,124,621 47.603 $ 5,902,158 53.084
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
1994 $ 3,169,862 $ 1,082,796 $ 1,127,883 $ 554,533 $ 404,650 $
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
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND REVENUES BY SOURCE
Last Ten Fiscal Years
(Unaudited)
Table 2
Fiscal
Year
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Total
General
Fund
Revenue
$ 3,295,398
3,772,335
4,627,532
4,736,496
5,722,363
5,343,453
5,613,395
6,193,834
6,841,420
6,893,830
General
Property
Taxes
Levied
$ 1,597,542
1,941,415
2,327,048
2,658,485
2,904,888
2,962,664
3,306,057
4,125,264
4,543,106
5,258,505
Licenses
and
Permits
$ 383,388
544,267
788,480
566,561
726,599
823,719
884,746
1,016,456
913,498
766,524
Inter -
Governmental
Revenues
Charges
for
Services
Fines
and
Forfeits
Other
Revenue
$ 677,337 $ 353,026 $ 72,454 $ 211,651
738,652 241,393 93,861 212,747
816,794 308,262 86,158 300,790
881,459 291,090 99,390 239,511
1,380,063 347,485 102,489 260,839
940,053 278,510 87,434 251,073
702,606 272,145 124,458 323,383
409,607 278,863 101,559 262,085
893,861 196,351 100,393 194,211
385,439 216,302 97,223 169,837
81
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
1994 $ 2,268,950 $ 2,243,045 98.86% $ 15,014 $ 2,258,059 99.52% $ 27,804 1.23%
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%
taw
Note: Does not include tax increment levies and collections.
Note: Current tax collections include State levy related credits (HACA and Market Value Credit)
82
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.
1994 $ 387,200 $ 355,543 91.82% $ 32,743 $ 388,286 100.28% $ 36,497
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
Note: Special assessments amounts above do not include prepayments
83
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
1994 $ 282,500 $ 96,268 $ 378,768 $ 3,169,862 11.95%
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%
II Mr
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%
(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 Real Personal Fiscal
Payable Property Property Total Disparities
1994 $ 5,146,854 $ 360,097 $ 5,506,951 $ 970,411
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
Source: Anoka County Department of Property Records and Taxation.
85
Table 6
Tax Increment
Assessor's Estimated Ratio of Total
Net Taxable Market Value of Assessed to
Value Taxable Property Actual Value
$ (256,841) $ 6,220,521 $ 368,267,100 1.69%
(287,819) 7,188,736 435,100,000 1.65%
(307,790) 8,470,611 501,825,800 1.69%
(410,724) 9,399,906 552,696,200 1.70%
(555,542) 10,160,139 627,423,800 1.62%
(646,438) 10,314,573 687,737,400 1.50%
(804,752) 11,595,738 775,398,200 1.50%
(912,580) 13,274,044 903,685,700 1.47%
(566,397) 10,913,995 1,034,432,100 1.06%
(676,932) 12,688,859 1,251,221,800 1.01%
CITY OF LINO LAKES, MINNESOTA
PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS
Last Ten Fiscal Years
(Unaudited)
Table 7
Tax Rates (Per $100 of Tax Capacity)
Year
Taxes
Payable City School (1) County Other (2) Total
1994 29.661 62.537 32.680 6.260 131.138
1995 30.772 64.308 32.765 6.977 134.822
1996 31.015 63.103 31.036 5.647 130.801
1997 31.167 66.000 30.542 5.197 132.906
1998 30.437 59.004 30.618 6.342 126.401
1999 36.039 64.802 32.265 6.830 139.936
2000 35.961 58.230 30.861 7.635 132.687
2001 35.898 69.888 28.859 6.903 141.548
2002 53.084 37.828 37.976 5.913 134.801
2003 47.603 37.467 37.714 7.050 129.834
(1) The majority of Lino Lakes is served by School District 12.
(2) Other includes: Metropolitan Council, Mosquito Control, Metropolitan Transit,
Rice Creek Watershed District and Forest Lake Hospital.
Source: Anoka County Department of Property Records and Taxation.
87
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
1994 12,266 $ 6,220,521 $ 1,393,500 $ 142,173 $ 1,251,327 20.12% 102.02
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 18,261 12,688,859 6,030,000 3,078,222 2,951,778 23.26% 161.64
(1) Population provided from Metropolitan Council except 2000 is Federal Census and 2003 is City Estimate.
(2) Amount excludes tax increment, special assessment, enterprise and EDA bonds.
CITY OF LINO LAKES, MINNESOTA
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
INCLUDING DEBT RATIOS
December 31, 2003
(Unaudited)
Table 9
Bonded G.O. Percentage
Gross Bonded Debt Applicable City Share
Overlapping Debt: Outstanding (1) in City(2) of Debt
Anoka County $ 84,195,000 6.56% $ 5,526,000
School District 12 92,545,000 48.54% 44,924,400,
School District 624 35,385,000 3.85% 1,362,750
School District 831 46,890,000 8.18% 3,837,656
SISD 916 15,965,000 2.38% 379,835
Metropolitan Council 198,050,000 0.64% 1,270,737
Total Overlapping Debt
473,030,000 57,301,378
Direct Debt:
City of Lino Lakes 6,030,000 100.00% 6,030,000
Total Overlapping & Direct Debt $ 479,060,000 $ 63,331,378
Debt Ratios:
Ratio of Debt per capita (18,261 population) - overlapping $ 3,138
Ratio of Debt per capita (18,261 population) - direct $ 330
Ratio of Debt per capita (18,261 population) - total $ 3,468
Ratio of Debt to estimated market valuation of $1,251,221,800 6.12%
(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.
89
AMIN
CITY OF LINO LAKES, MINNESOTA
COMPUTATION OF LEGAL DEBT MARGIN
December 31, 2003
(Unaudited)
Table 10
2003 2002
Market Value $ 1,251,221,800 $ 1,034,432,100
Debt Limit Percentage 2% 2%
Debt Limit 25,024,436 20,688,642
Total Bonded Debt 21,840,000 21,104,450
Less:
Special Assessment Bonds (12,840,000) (11,640,000)
_ Revenue Bonds - Enterprise Fund (2,970,000) (3,220,000)
Public Project Revenue Bonds (680,000) (765,000)
Inms
Total Debt Applicable to Debt Limit
5,350,000 5,479,450
Legal Debt Margin $ 19,674,436 $ 15,209,192
90
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
1994 $ 394,245 $ 149,764 $ 244,481 $ 25,000 $ 66,080 $ 91,080 2.68
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
(1) Total Water Fund operating revenues and transfers in.
(2) Total Water Fund expenses exclusive of depreciation, interest on debt and fiscal charges.
91
CITY OF LINO LAKES, MINNESOTA
PRINCIPAL TAXPAYERS
(Unaudited)
Table 12
Ten of the City's Largest Taxpayers Percent of
2002 Net Tax City's Net
Taxpayer Type of Business Capacity Tax Capacity
Xcel Energy Utility $ 128,354 1.21%
Taylor Corp. Commercial/Industrial 99,274 0.93%
Lino Lakes Business Center Commercial/Industrial 96,156 0.90%
Molin Concrete Products Commercial/Industrial 91,020 0.86%
Individual Commercial/Industrial 73,966 0.70%
Target Corporation Retail 72,398 0.68%
Marmon Keystone Corporation Commercial/Industrial 69,598 0.65%
F & G, Inc. Commercial/Industrial 64,496 0.61%
Minnegasco Utility 43,402 0.41%
Anoka Electric Co -Op Utility 44,624 0.42%
Total Ten Largest Taxpayers $ 783,288 * 7.37%
* Represents 6.2% of the City's 2002 taxable net tax capacity.
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)
1994 $ 368,367,100 566 $ 26,713,028 Not Available
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
(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.
93
— CITY OF LINO LAKES, MINNESOTA
DEMOGRAPHIC STATISTICS
Last Ten Years
(Unaudited)
Table 14
Fiscal School Number of Unemployment
Year Population (2) Em-ollment (1) Households (2) Rate (3)
1994 12,266 5,587 3,671 3.6%
— 1995 13,097 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 18,261 6,932 5,388 5.0%
IMMIN
(1) Centennial School District 12
(2) Metropolitan Council except 2000 is Federal Census and 2003 is City Estimate
— (3) Minnesota Department of Economic Security
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 Charter
Area of City (square miles) 33
Miles of Streets:
Trunk Highways
Paved - County
Paved - City
17.4
28.5
100.50
Number of Street Lights 486
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
3
1
52
1
22
Recreation:
Park Acreage 166
Number of Parks & Playgrounds 21
Trails 18 miles
Municipal Water:
Gallons Pumped 517,957,000
Number of Connections 3,548
Miles of watermain 46.2
Number of Fire Hydrants 452
Water Tower Capacity (gallons) 2 million
Municipal Sewer:
Number of Connections
Miles of sewermain
Employees:
Full -time
Part-time
3,763
59.16
64
4
Elections:
Registered voters - last general election 9,911
Number of votes cast 4,650
Percent of registered voters voting 47%
95