HomeMy WebLinkAboutComprehensive Annual Financial Report 12/31/2012COMPREHENSIVE ANNUAL FINANCIAL REPORT
OF THE
CITY OF LINO LAKES, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2012
Prepared By: Finance Department
Alan Rolek, Director of Finance
Paula Schloer, Accountant
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CITY OF LINO LAKES, MINNESOTA
TABLE OF CONTENTS
Page
Reference Number
I. INTRODUCTORY SECTION
Principal City Officials 1
Organizational Chart 2
Letter of Transmittal 3
"' Certificate of Achievement for Excellence in Financial Reporting 8
II. FINANCIAL SECTION
Independent Auditors' Report 9
Management's Discussion and Analysis 12
Basic Financial Statements
Statement of Net Position Statement 1 22
Statement of Activities Statement 2 23
Balance Sheet - Governmental Funds Statement 3 25
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position Statement 4 27
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Governmental Funds Statement 5 28
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balance to the Statement
of Activities Statement 6 30
Statement of Net Position - Proprietary Funds Statement 7 31
Statement of Revenues, Expenses and Changes in Net Position -
Proprietary Funds Statement 8 32
Statement of Cash Flows - Proprietary Funds Statement 9 33
Statement of Net Position - Fiduciary Funds — Agency Funds Statement 10 34
Notes to Financial Statements 35
CITY OF LINO LAKES, MINNESOTA
TABLE OF CONTENTS
Required Supplementary Information
NNW
Page
Reference Number
General Fund:
Schedule of Revenues, Expenditures and Changes in Fund
... Balance - Budget and Actual Statement 11 60
Notes to Required Supplementary Information 66
Schedule of Funding Progress for Postemployment Benefit Plan Statement 12 67
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Combining Fund Financial Statements
Combining Balance Sheet – Nonmajor Governmental Funds Statement 13 68
Combining Statement of Revenues, Expenditures, and Changes in
Fund Balance – Nonmajor Governmental Funds Statement 14 74
Special Revenue Fund – Program Recreation:
Schedule of Revenues, Expenditures and Changes in Fund
Balance – Budget and Actual Statement 15 80
Statement of Changes in Assets and Liabilities – Fiduciary Funds –
Agency Funds Statement 16 81
—
Supplementary Financial Information
Combined Schedule of Indebtedness Exhibit 1 82
Schedule of Deferred Tax Levies Exhibit 2 84
Debt Service Payments to Maturity - All Bonds Exhibit 3 86
Insurance in Force Exhibit 4 89
—
Taxable Valuations, Tax Levies and Tax Rates Exhibit 5 90
III. STATISTICAL SECTION
Net Position by Component – Last Ten Fiscal Years Table 1 91
—
Changes in Net Position - Last Ten Fiscal Years Table 2 92
Fund Balances, Governmental Funds - Last Ten Fiscal Years Table 3 94
Changes in Fund Balances, Governmental Funds – Last Ten Fiscal Years Table 4 96
Assessed and Actual Value of Taxable Property -
Last Ten Fiscal Years Table 5 98
CITY OF LINO LAKES, MINNESOTA
TABLE OF CONTENTS
Page
Reference Number
Direct and Overlapping Property Tax Rates -
Last Ten Fiscal Years Table 6 99
Principal Property Taxpayers Table 7 100
'" Property Tax Levies and Collections — Last Ten Fiscal Years Table 8 101
Ratios of Outstanding Debt by Type Table 9 103
Direct and Overlapping Governmental Activities Debt Table 10 105
Legal Debt Margin Information Table 11 106
Demographic and Economic Statistics Table 12 108
Principal Employers, Current Year and Nine Years Ago Table 13 109
Full -Time Equivalent Employees by Type Table 14 110
Operating Indicators by Function/Program Table 15 112
Capital Asset Statistics by Function/Program Table 16 114
I.
INTRODUCTORY
SECTION
.. CITY OF LINO LAKES, MINNESOTA
PRINCIPAL CITY OFFICIALS
December 31, 2012
Elected Officials
Term Expires
.. Mayor:
Jeff Reinert December 31, 2013
.. Council Members:
Dale Stoesz December 31, 2015
Rob Rafferty December 31, 2013
.. Jeff O'Donnell December 31, 2013
Dave Roeser December 31, 2015
Vmm
L Appointed Personnel
City Administrator Jeff Karlson
Director of Finance Alan Rolek
Director of Public Safety John Swenson
Director of Community Development Michael Grochala
Director of Public Service Rick DeGardner
Public Services
City of Lino Lakes Organizational Chart
Honorable Mayor
and
City Council
Commissions
Cable
• Parks and Recreation
▪ Economic Development
▪ Planning and Zoning
Fire
JEnvironmental
City Administrator
City Clerk
Professional Consultants
Engineering
Attorney
1
Fiscal
Parks
Public Works
Recreation
Public Safety
Police
Admin stration
Emergency Management
Community Development
Human Resources
Administrative Services
2
Finance
Planning
Economic Development
Engineering
Environmental Services
Inspections
Accounting
Management Information Systems
Utility Billing
Woo
May 22, 2013
Honorable Mayor
Members of the City Council
Citizens of the City of Lino Lakes, Minnesota
Minnesota State law requires that cities over 2,500 population publish within six months of the close of each
fiscal year a complete set of financial statements presented in conformity with generally accepted accounting
principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed
certified public accountants and submit them to the state auditor. Pursuant to that requirement, we hereby issue
the comprehensive annual financial report of the City of Lino Lakes, Minnesota for the fiscal year ended
December 31, 2012.
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
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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 CliftonLarsonAllen 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, 2012, 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, 2012, are fairly presented in conformity with GAAP. The independent
auditor's report is presented as the first component of the financial section of this report.
GAAP require that management provide a narrative introduction, overview and analysis to accompany the basic
financial statements in the form of Management's Discussion and Analysis (MD &A). This letter of transmittal is
designed to complement MD &A and should be read in conjunction with it. The City of Lino Lakes' MD &A can
be found immediately following the report of the independent auditors.
3
600 Town Center Parkway, Lino Lakes, Minnesota 55014 -1182
Phone: 651 -982 -2400 • Fax: 651 -982 -2499
Profile of the Government
The City of Lino Lakes, incorporated in 1955, is a growing community in the southeast corner of the County of
Anoka. It covers an area of 33 square miles and has a population of approximately 20,300. The population has
more than doubled from the 1990 census figure of 8,807 and has grown by 21% since 2000. Within the City's
borders lies the 2,550 acre Rice Creek Chain of Lakes Regional Park. Access to St. Paul and Minneapolis is
provided by I -35W and I -35E.
The City Charter, as amended, establishes a mayor - council form of government and grants the city council full
policy - making and legislative authority to the mayor and four council members. The City council is responsible,
among other things, for passing ordinances, adopting the budget, appointing committees, and hiring a City
administrator. The City administrator has the responsibility of carrying out the policies and ordinances of the City
council, for overseeing the day -to -day operation of the city. The City council is elected at -large on a non - partisan
basis, with council members serving four -year terms and the mayor serving a two -year term. Elections are held
every two years with two council seats and the mayor being up for election each election cycle.
The City provides a full range of municipal services. These services include: general government, public safety
(police and fire), public works (streets and fleet), parks and recreation, conservation of natural resources
(environmental and solid waste abatement), public improvements, providing and maintaining sanitary and storm
sewer, water infrastructure, and two enterprise funds, the water and sewer funds.
The annual budget is the foundation for the City of Lino Lakes' financial planning and control. All divisions are
required to submit appropriations requests to the City administrator for review and consolidation into a proposed
budget. The City administrator is responsible for submitting the proposed annual budget to the City Council in
August of each year. The city council is required to hold a public hearing on the proposed budget and to adopt by
resolution a final budget and certify it no later than December 28. The budget amounts cannot increase beyond the
estimated receipts except to the extent that actual receipts exceed the estimate. Division directors may make
transfers of appropriations within a department, but transfers of appropriations between departments require
council approval. Budget -to- actual comparisons for the general fund and the recreation program fund, the only
funds for which an annual budget has been adopted, are provided in this report beginning on pages 60 and 80,
respectively.
Factors Affecting Financial Condition
The information presented in the financial statements is perhaps best understood when it is considered from the
broader perspective of the specific environment within which the City of Lino Lakes operates.
Local economy. The economic development effort established by the City Council in 1993 increased the
commercial/industrial tax base in the City from 3% of the total tax base to 9% in 2011. Development of three
industrial parks - Apollo Business Park on 35W, Marshan Industrial Park on Lake Drive, and the Clearwater
Creek Development Center on 35E, provided excellent opportunities for manufacturing and distribution
businesses to move their headquarters to Lino Lakes. Before the recession began in late 2007 the Lino Lakes
Town Center, comprising approximately 200 acres surrounding the 35W/Lake Drive interchange, was developing
at a rapid pace. SuperTarget and Kohl's anchor the shopping center quadrant, while Apollo Business Park brought
approximately 1,000 new employees to the area. Land was purchased by Anoka County on a third quadrant for
future development of a regional library. Due to economic conditions, the County has pushed back construction of
the library to 2015.
4
Factors Affecting Financial Condition (Continued)
In 2004, the City entered into an agreement with a master developer to develop 40 acres in the southeast quadrant
of I -35W and Lake Drive. Called Legacy at Woods Edge, this mixed -use development is intended to include
diverse opportunities for housing, retail and office uses. To date, the development includes the Lino Lakes Civic
Complex (which houses the city hall and police station), the Chain of Lakes YMCA, a 60 -unit workforce housing
project, 13,000 square feet of leasable commercial space, and an assisted living facility. The Civic Complex and
YMCA provide a civic and community focus as part of the vision for Town Center. A workforce family housing
and assisted living facility provide diversity in housing to underserved populations within the City.
In 2006, the City placed a major focus on reconstruction of the 35W /Lake Drive interchange and completion of
public improvements in Legacy at Woods Edge to accommodate planned development and completed the
improvements by 2008. However, it became evident at the end of 2007 that development was stalling. The
recession has had negative impacts on the Legacy development. Both the master developer and lender defaulted,
sending the remaining 22 acres intended for townhomes and commercial uses into tax forfeit. However, the solid
foundation that was built and strong interest by developers prior to the recession ensures that better economic
times will once again bring the interest in residential and commercial growth needed to complete the vision.
Street, streetscape, water, sewer, and storm water improvements, as well as a small community park, have been
installed within the development area and assessed to the development. This $11.1 million improvement was
financed through the joint efforts of MNDOT, Anoka County and the City of Lino Lakes. The City has issued
$4,215,000 in G.O. Tax Increment bonds and will use tax increment financing and Minnesota State Aid funds to
•- finance its portion of the project cost. Once construction gains its footing again the City can assess the benefitting
properties. The City continues to look for ways to resurrect the project and strives to be prepared to market the
property when the economy recovers.
Building activity and development continued to be soft in 2012, reflecting the nationwide market. Building
permits for new homes in 2012 numbered 25, compared to 34 in 2011. This represents about 1/4 of the new home
permits issued in 2007 and is down by approximately 87% from 2005.
In anticipation of a strengthening economy, the City took the lead on developing the infrastructure needed to
service future growth on the 35E /County Road 14 interchange area. A major reconstruction of the interchange
... completed a multi -year improvement of County Road 14 from Highway 61 in Hugo, through Centerville, to 35W
in Lino Lakes. The City portion of the cost for this bridge reconstruction project is being financed through Anoka
County, with the City issuing an initial $4.26 million General Obligation Note to the County. Due to cost savings
— in this project the Note was amended to $3.695 million in 2011.
With both major interstate interchanges complete, the City is preparing for development of several hundred acres
in the northeast quadrant of 35E/14. Interest in the commercial interchange has spurred planning for an extension
of Otter Lake Road North, which will leave the City well poised to accommodate significant future industrial,
commercial and residential development.
5
Factors Affecting Financial Condition (Continued)
Long -term financial planning. The City's current five -year financial plan, adopted in January, 2008, identifies
street and utility improvements totaling $23,287,990 over the period of 2008 through 2012. These improvements
are anticipated to be funded through a number of funding sources, including special assessments, municipal state
aid road funds, the area and unit trunk fund, the stormwater management fund and voter - approved tax levies. Also
included in the final year of the plan is a feasibility study for a new public works facility. Scheduled capital
equipment and office equipment needs and the financing for those needs are also included in the plan. The five -
year plan also includes funding projections for operations and operating impacts for the period of 2008 -2012. This
plan is in the process of being revised to reflect the anticipated activity through the year 2017.
Relevant Financial Policies
The City uses a variety of financial policies to guide its fiscal actions and ensure fiscal stability.
Fund balance policy. The City had adopted a Fund Balance policy which identified the required designated
amounts in the Fund Balance of the General Fund at fiscal year -end and directed the transfer of any excess
revenues to other funds for specific purposes, as identified annually. For the year ended December 31, 2011 and
subsequent years, the City amended its Fund Balance policy to conform to the requirements of GASB 54. The
new policy targets the unassigned fund balance of the general fund in a range of 40% to 50% of budgeted general
fund expenditures and other financial uses. In addition, fund balances are classified in compliance with GASB 54
according to the hierarchy of usable fund balance resources. The unassigned general fund balance as of December
31, 2012 was $5,053,031, which is 56% of general fund budgeted expenditures and other financing uses for the
year.
Cash management policies and practices. The City's policy is to invest all available moneys at competitive
rates in accordance with Minnesota law. Investments are made by minimizing credit and market risks while
maintaining a competitive yield. Funds are invested in certificates of deposit, commercial paper and U.S.
government agencies. Cash is pooled in one account to provide maximum return. The City Council reviews the
investment policy annually.
The City's investment policy's primary objective is safety of principal. Therefore, all deposits were either insured
by Federal depository insurance or were collateralized as required by State Statute. Due to the weakened
economy, a historically low interest rate environment has persisted over the last several years and has had a
dramatic impact on the city's investment earnings. The average yield on investments for 2012 was 1.08 %.
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.
6
.r.
.r
Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA) awards the Certificate of
Achievement for excellence in financial reporting to cities that meet certain criteria. The City of Lino Lakes
received this award for its comprehensive annual financial report for the year ended December 31, 2011. This
marks the sixteenth consecutive year the City has received this prestigious award. A governmental unit must
publish an easily readable and efficiently organized comprehensive annual financial report, the contents of which
conform to program requirements. This report must satisfy both generally accepted accounting principles and
applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. The City is submitting the 2012 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. A special thank you goes to city accountant, Paula Schloer, for
her efforts in assembling and reviewing information presented in this report. I also want to express my
appreciation to the Mayor and City Council for their support for maintaining the highest standard of
professionalism in the management of the financial operation of the City.
Respectfully submitted, a
Alan J. Rolek
Director of Finance
7
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, 2011
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Govemmcnt Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
President
Executive Director
8
II.
FINANCIAL
SECTION
Nat
tftlat
taw
CliftonLarsonAllen
INDEPENDENT AUDITORS' REPORT
Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
CliftonLarsonAllen LLP
www.diftonlarsonallen.com
Report on the Financial Statements
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, as of and for the year ended December 31, 2012, and the related notes to the financial
statements, which collectively comprise the City's basic financial statements as listed in the table of
contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditors' Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditors' judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the entity's internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
NEXIA
INTERNATIONAL
An independent nenber of Na'a International
9
Honorable Mayor and
Members of the City Council
City of Lino Lakes
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective 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 as of December 31, 2012,
and the respective changes in financial position and, where applicable, cash flows thereof for the year
then ended in accordance with accounting principles generally accepted in the United States of
America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis, budgetary comparison information, and schedule of funding
progress to postemployment benefit plan, as listed in the table of contents be presented to supplement
the basic financial statements. Such information, although not a part of the basic financial statements,
is required by the Governmental Accounting Standards Board who considers it to be an essential part
of financial reporting for placing the basic financial statements in an appropriate operational, economic,
or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America,
which consisted of inquiries of management about the methods of preparing the information and
comparing the information for consistency with management's responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Lino Lakes' basic financial statements. The combining fund financial
statements and other supplementary financial information, the introductory section, and statistical
section are presented for purposes of additional analysis and are not a required part of the basic
financial statements.
The combining fund statements and other supplementary financial information are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records
used to prepare the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the combining fund statements and other supplementary financial
information are fairly stated, in all material respects, in relation to the basic financial statements as a
whole.
The introductory section and statistical section have not been subjected to the auditing procedures
applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or
provide any assurance on it.
10
— Honorable Mayor and
Members of the City Council
City of Lino Lakes
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated May 22,
2013, on our consideration of the City of Lino Lakes' internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and
other matters. The purpose of that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the result of that testing, and not to provide an opinion on
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering City of Lino Lakes'
internal control over financial reporting and compliance.
LL)
CliftonLarsonAllen LLP
Minneapolis, Minnesota
May 22, 2013
11
IMO
CITY OF LINO LAKES, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2012
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, 2012. We encourage readers to consider the information presented here
in conjunction with additional information that we have furnished in our letter of transmittal, which can be
found on pages 3 -7 of this report.
FINANCIAL HIGHLIGHTS
• The assets of the City of Lino Lakes exceeded its liabilities at the close of the most recent fiscal year
by $92,300,600 (net position). Of this amount $29,741,051 (unrestricted net position) 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 position increased by $2,220,256 primarily due to an advance of State Municipal
State Aids funds.
• As of the close of the current fiscal year, the City of Lino Lakes' governmental funds reported
combined ending fund balance of $21,524,101, an increase of $4,590,561 in comparison with the
prior year primarily due to an advance of State Municipal State Aids funds. Approximately 8% of this
total amount, or $1,790,303, is available for spending at the City's discretion (unassigned fund
balance).
• At the end of the current fiscal year, unassigned fund balance for the general fund was $5,053,031, or
56% of total general fund expenditures and other financing uses.
• The City's total bonded debt decreased by $385,000 (2.2 %) during the current fiscal period. The City
issued a general obligation bond in the amount $2,015,000 to finance the Birch/Ware and Lake
Dr /Main traffic signal projects. Principal in the amount of $2,550,000 was retired during the year.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the City of Lino Lakes' basic
financial statements. The City of Lino Lakes' basic financial statements comprise three components:
1. Government -wide financial statements
2. Fund financial statements
3. Notes to the financial statements
This report also contains other supplementary information in addition to the basic financial statements
themselves.
Government -wide financial statements The government -wide financial statements are designed to
provide readers with a broad overview of the City of Lino Lakes' finances, in a manner similar to private -
sector business.
The statement of net position presents information on all of the City of Lino Lakes' assets and liabilities,
with the difference between the two reported as net position. Over time, increases or decreases in net
position 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 position changed during the
most recent fiscal year. All changes in net position are reported as soon as the underlying event giving
rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses
are reported in this statement for some items that will only result in cash flows in future fiscal periods
(e.g., uncollected taxes and earned but unused compensated absences and OPEB liabilities).
CITY OF LINO LAKES, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2012
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Government -wide financial statements (Continued) Both of the government -wide financial statements
distinguish functions of the City of Lino Lakes that are principally supported by taxes and
intergovernmental revenues (governmental activities) from other functions that are intended to recover all
or a significant portion of their costs through user fees and charges (business -type activities). The
governmental activities of the City of Lino Lakes include general government, public safety, public
services, parks, recreation and forestry, conservation of natural resources and community development.
The business -type activities of the City of Lino Lakes include a water utility and sewer utility.
The government -wide financial statements can be found on pages 22 -24 of this report.
Fund financial statements A fund is a grouping of related accounts that is used to maintain control over
resources that have been segregated for specific activities or objectives. The City of Lino Lakes, like
other state and local governments, uses fund accounting to ensure and demonstrate compliance with
finance- related legal requirements. All of the funds of the City of Lino Lakes can be divided into three
categories: governmental funds, proprietary funds and fiduciary funds.
Governmental funds — Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government -wide financial statements. However, unlike the
government -wide financial statements, governmental fund financial statements focus on near -term
inflows and outflows of spendable resources, as well as on balances of spendable resources available at
the end of the fiscal year. Such information may be useful in evaluating a government's near -term
financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government -wide financial statements. By doing
so, readers may better understand the long -term impact of the government's near -term financing
decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues,
expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between
governmental functions and governmental activities.
The City of Lino Lakes maintains thirty -five individual governmental funds. Information is presented
separately in the governmental fund balance sheet and in the governmental fund statement of revenues,
expenditures, and changes in fund balances for the General fund, G.O. Improvement Bonds 2005A fund,
Improvement Note 2009A fund, Municipal State Aid fund, Area and Unit Charge fund and Traffic Signal
all of which are considered to be major funds. Data from the other twenty -nine governmental funds are
combined into a single, aggregate presentation. Individual fund data for each of these nonmajor
governmental funds is provided in the form of combining statements elsewhere in this report.
The City of Lino Lakes adopts an annual appropriated budget for its general and program recreation
special revenue funds. A budgetary comparison statement has been provided for these funds to
demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 25 through 30 of this report.
Proprietary funds — The City of Lino Lakes maintains two proprietary type funds. Enterprise funds are
used to report the same functions presented as business -type activities in the government -wide financial
statements. The City of Lino Lakes uses enterprise funds to account for its sewer and water utilities.
The proprietary fund statements provide the same type of information as the government -wide financial
statements, only in more detail. The proprietary fund financial statements provide separate information for
the sewer fund and the water fund, which are considered to be major funds of the City of Lino Lakes. The
basic proprietary fund financial statements can be found on pages 31 through 33 of this report.
13
CITY OF LINO LAKES, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2012
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Fiduciary funds Fiduciary funds are used to account for assets held by the City as an agent for
individuals, private organizations, or other governments.
Notes to the financial statements — The notes provide additional information that is essential to a full
understanding of the data provided in the government -wide and fund financial statements. The notes to
the financial statements can be found on pages 35 -59 of this report.
Other information — The combining statements and schedules referred to earlier in conjunction with
nonmajor governmental funds can be found on pages 68 -81 of this report.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government's financial
position. The City of Lino Lakes' assets exceeded liabilities by $92,300,600 at the close of the most
recent fiscal year, an increase of $2,220,256 from the previous year. This increase is primarily due an
advance in Municipal State Aid (MSA) construction funds. The City received an advance on this funding
source equal to 5 years of the annual allocation to the City.
By far the largest portion of the City of Lino Lakes' net position (55 %) reflects its net investment in capital
assets (e.g. land, buildings, machinery, equipment, and infrastructure. The City of Lino Lakes uses these
capital assets to provide services to citizens; consequently, these assets are not available for future
spending. Although the City of Lino Lakes' investment in its capital assets is reported net of related debt,
it should be noted that the resources needed to repay this debt must be provided from other sources,
since the capital assets themselves cannot be used to liquidate these liabilities.
Condensed versions of the statements of net position at December 31, 2012 and 2011 are as follows:
Current and Other Assets
Capital Assets
Total Assets
Noncurrent Liabilities Outstanding
Other Liabilities
Total Liabilities
Net Position:
Net Investment in Capital Assets
WNW Restricted
Unrestricted
Total Net Position
Governmental Activities _ _ Business -Type Activities Total
2012 2011 2012 2011 2012 2011
$ 34,456,692 $ 30,125,796 $ 12,194,619 $ 11,292,527 $ 46,651,311 $ 41,418,323
39,634,563 42,067,496 28,798,095 29,621,802 68,432,658 71,689,298
74,091,255 72,193,292 40,992,714 40,914,329 115,083,969 113,107,621
21,875,614 21,845,856
815,149 685,320
22,690,763 22,531,176
22,166,342
11, 595,112
17,639,038
24,600,103
11,598,803
13,463,210
43,410 450,334
49,196 45,767
92,606 496,101
28,798,095 29,216,866
12,102,013 11,201, 362
21,919,024 22,296,190
864,345 731,087
22,783,369 23,027,277
50,964,437
11, 595,112
29,741,051
53,816,969
11,598,803
24,664,572
$ 51,400,492 $ 49,662,116 $ 40,900,108 $ 40,418,228 $ 92,300,600 $ 90,080,344
Of the remaining balance of the City of Lino Lakes' net position, restricted net position (13 %) are to be
used for debt service requirements and a nonexpendable environmental fund. Unrestricted net position
(32 %) may be used to meet the government's ongoing obligations to citizens and creditors.
CITY OF LINO LAKES, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2012
GOVERNMENT -WIDE FINANCIAL ANALYSIS (CONTINUED)
At the end of the current fiscal year, the City of Lino Lakes is able to report positive balances in all three
categories of net position, both for the government as a whole, as well as for its separate governmental
and business -type activities.
Governmental activities Governmental activities increased the City of Lino Lakes' net position by
$1,738,376. Increases in Capital Grants and Contributions for Public Services , primarily due to an MSA
advance against future annual allocations, as well as reductions in community development activities,
staffing levels, and interest payments on long -term debt were directly attributable to the increase in City's
net position.
Business -type activities Business -type activities increased the City of Lino Lakes' net position by
$481,880. Revenue from Charges for Services and Investment earnings provided directly for this
increase.
Condensed statements of revenues, expenses, and changes in net position highlights are as follows for
the years ended December 31, 2012 and 2011:
Govemmental Activities
2012 2011 2012 2011 2012 2011
Business -Type Activities Total
REVENUES
Program Revenues:
Charges for Services $ 1,476,261 $ 1,420,465 $ 2,877,590 $ 2,584,292 $ 4,353,851 $ 4,004,757
Operating Grants and Contributions 450,179 593,798 450,179 593,798
Capital Grants and Contributions 5,125,693 7,347,613 20,018 1,462 5,145,711 7,349,075
General Revenues:
Property Taxes 8,461,621 8,513,559 - - 8,461,621 8,513,559
Franchise Taxes 95,003 149,118 - - 95,003 149,118
Other Taxes 54,085 106,128 54,085 106,128
Contributions Not Restricted to
Specific Programs 4,941 4,072 - 4,941 4,072
Unrestricted Investment Earnings 202,828 251,250 102,073 126,215 304,901 377,465
Gain on Disposal of Capital Assets 4,175 37,579 - - 4,175 37,579
Total Revenues 15,874,786 18,423,582 2,999,681 2,711,969 18,874,467 21,135,551
EXPENSES
General Government 1,883,961 1,990,137 - 1,883,961 1,990,137
Public Safety 4,046,415 4,019,101 4,046,415 4,019,101
Public Service 5,584,283 8,110,979 - 5,584,283 8,110,979
Parks, Recreation and Forestry 1,210,867 1,218,472 - 1,210,867 1,218,472
Conservation of Natural Resources 184,051 139,544 - 184,051 139,544
Community Development 430,121 617,747 - - 430,121 617,747
Interest on Long -Term Debt 837,755 927,535 837,755 927,535
Water - 949,121 966,643 949,121 966,643
Sewer 1,527,637 1,638,063 1,527,637 1,638,063
Total Expenses 14,177,453 17,023,515 2,476,758 2,604,706 16,654,211 19,628,221
CHANGE IN NET POSITION
BEFORE TRANSFERS 1,697,333 1,400,067 522,923 107,263 2,220,256 1,507,330
Transfers 41,043 66,122 (41,043) (66,122) -
CHANGE IN NET POSITION 1,738,376 1,466,189 481,880 41,141 2,220,256 1,507,330
Net Position - Beginning of Year
49,662,116 48,195,927 40,418,228 40,377,087 90,080,344 88,573,014
NET POSITION - END OF YEAR $ 51,400,492 $ 49,662,116 $ 40,900,108 $ 40,418,228 $ 92,300,600 $ 90,080,344
15
CITY OF LINO LAKES, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2012
GOVERNMENT -WIDE FINANCIAL ANALYSIS (CONTINUED)
Below are specific graphs that provide comparisons of the government activities' direct program revenues
with their expenditures. Any shortfalls in direct revenues are primarily supported by property tax levy or
general state aid.
Expenses and Program Revenues — Governmental Activities
General govemment
Public safety
Public services
Parks, recreation and forestry
Conservation of Natural Resources
Community development
Interest on long -term debt
Expenses Revenues
$ 1,883,961 $ 148,564
$ 4,046,415 $ 814,168
$ 5,584,283 $ 5,820,462
$ 1,210,867 $ 191,832
$ 184,051 $ 60,167
$ 430,121 $ 16,940
$ 837,755 $ -
$ 14,177,453 $ 7,052,133
Revenues by Source — Governmental Activities
Unrestricted grants
and contributions
0%
Franchise taxes
1%
Property taxes
53%
Un restricted
in vest men earnings
1% Other
1%
Charges forservices
9%
Operating grants and
contributions
3%
Capital grants and
contributions
32%
CITY OF LINO LAKES, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2012
GOVERNMENT -WIDE FINANCIAL ANALYSIS (CONTINUED)
Below are specific graphs that provide comparisons of the business -type activities' direct program
revenues with their expenditures. Excess revenues are retained within each fund until such time that
capital replacement is needed.
Expenses and Program Revenues — Business -type Activities
$1,800,000
$1,600,000
$1,400,000
$1,200,000
$1,000,000
$800, 000
$600,000
$400, 000
$200,000
$-
Water
Revenues by Source — Business -type Activities
Capital grants and
contributions
Operating grants and 1%
contributions
0%
Sewer
Charges for services
95%
17
D Expenses
■ Revenues
CITY OF LINO LAKES, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2012
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. GASB Statement 54, implemented for 2011,
divides fund balances into five categories: Nonspendable, Restricted, Committed, Assigned and
Unassigned. Definitions of these categories can be found in Note 1.0 in the Notes to the Financial
Statements. In particular, unassigned fund balance may serve as a useful measure of a government's net
resources available for unrestricted spending at the end of the fiscal year. Approximately 8% of the total
fund balance amount, or $1,790,303, constitutes unassigned fund balance, which is available for
spending at the government's discretion. The remainder of fund balance is not available for new spending
because it has already been committed for other purposes. As of the end of the current fiscal year, the
City of Lino Lakes' governmental funds reported combined ending fund balances of $21,524,101, an
increase of $4,590,561, or 27 %, from the previous year. This increase is primarily due to the receipt of an
advance on future MSA allocations.
The general fund is the primary operating fund of the City of Lino Lakes. At the end of the current fiscal
year, unassigned fund balance of the general fund stood at $5,053,031, while the total fund balance was
$5,233,817. As a measure of the general fund's liquidity, it may be useful to compare unassigned fund
balance and total fund balance to total fund expenditures and financing uses. Unassigned fund balance
represents 56% of total general fund expenditures and financing uses, while total fund balance
represents 58% of that same amount.
The fund balance of the City of Lino Lakes' general fund decreased by $371,363 during the current fiscal
year, while the city budget anticipated the use of up to $368,183 of the general fund balance. Overall, the
a continued soft real estate market again resulted in reduced building activities this year which decreased
permit revenue. Even as signs of economic recovery were being seen, the remaining effects of the
recession also had an impact on property tax delinquencies. In addition, reduced expenditures, primarily
for personal services through vacant positions, and contractual services helped to offset the reduced
revenues. Overall, the general fund's revenues were within approximately 1.5% of the amended budget,
while expenditures and transfers were 1.4% below budgeted levels.
The G.O. improvement bonds 2005A fund has a total fund deficit of ($2,003,261). This fund is related to
the bonds issued for the Legacy Woods Edge improvement project. The payment of debt service and
delinquency in the collection of special assessments dedicated to this issue caused a significant
decrease in this fund. An interfund loan from the Capital Improvements fund has aided in the payment of
debt service for this issue.
The Improvement Note 2009A fund, to service the debt issued to Anoka County as the City's financial
commitment for the I -35E interchange project, ended the year with a fund balance of $491. This note,
which was originally in the amount of $4,260,000, was reduced in 2011 to the current amount of
$3,695,000 to reflect cost savings during the contruction of this project.
The Municipal State Aid fund, a capital projects fund used to finance reconstruction of state aid eligible
streets, ended the year with a fund balance of $5,037,136. As stated earlier, this fund received a large
advance from the Minnesota Municipal State Aid equal to the next five annual construction installments.
These funds will be used over the next several years to pay debt service on the Tax Increment Bonds
2007A and the Improvement Notes 2009A, and for future MSA projects.
The area and unit charge fund has a total fund balance of $3,972,716, of which $496,000 is
nonspendable due to advances to other funds, and $3,476,716 is assigned for financing capital
improvements. The fund balance during the current year increased by $144,080, due in large part to the
partial repayment of an interfund loan from the Dedicated Parks fund.
18
CITY OF LINO LAKES, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2012
FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS (CONTINUED)
Governmental Funds (Continued)
The Traffic Signal Fund ended the year with a total fund balance of $463,247. The GO Bond 2012A was
issued during the year to finance this improvement. Intergovenmental revenues from Anoka County also
contribute toward the cost of this project. The total fund balance is assigned toward the completion of this
project, expected to be done in 2013.
Proprietary funds — The City of Lino Lakes' proprietary funds provide the same type of information found
in the government -wide financial statements, but in more detail.
The water fund has total net position at year -end of $18,313,145, of which $4,330,637 are unrestricted.
The increase in net position of $455,348 was primarily due to operating income and investment earnings.
Total net position in the sewer fund at the end of 2012 were $22,586,963, of which $7,771,376 was
unrestricted. While operations for the year resulted in a net loss of ($21,856), net position increased
$26,532 during the current year resulting primarily investment earnings.
The water rates, which reflect water conservation efforts through a tiered rate structure, and sewer Rates
were unchanged in 2012. A review of utility rates, begun in 2012, is scheduled for for completion in 2013.
GENERAL FUND BUDGETARY HIGHLIGHTS
The original budget was amended several times during the year reflecting reductions licences and
permits, public safety charges for services and gas franchise fees, increases in MSA maintenance aid
and fines revenue, and reallocating resources within the original budget.
Revenues were $133,851 under budget for the year. This is due primarily to delinqencies in property tax
collections. Lower building activity due to the recessed economy and, therefore, fewer new construction
building permits being issued was also a factor. State intergovernmental revenues for police PERA aid
were below budgeted levels for the year due to position vacancies. Other state aids were lower due to the
elimiation of a grant - eligible position, reducing the amount of grant reimbursments. Public safety charges
for service were over budget due to higher than expected traffic control contracts. A reduction in the gas
franchise fee rate also resulted in reduced revenue.
Expenditures came in under budget by $130,671 due mainly to lower than expected personal services
costs from vacant positions and reduced benefit costs. Energy costs for fuels and electricity were higher
than budgeted amounts, and supplies costs were generally lower than anticipated. There were also net
transfers from the general fund of $842,250. This resulted in a net fund balance decrease of $371,363 for
the fiscal year, slightly more than the planned reduction of $368,183.
19
CITY OF LINO LAKES, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2012
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, 2012, is $68,432,658. This investment in capital assets includes land,
buildings, office equipment and furniture, vehicles, machinery and equipment, other capital assets, and
infrastructure. This represents a decrease in the City of Lino Lakes' investment in capital assets of
approximately 5 %. Due to economic conditions, no new infrastructure projects were undertaken by the
City, and therefore, the only additions were from projects in progress. The decrease within the
governmental activities is attributable to the depreciation of buildings, constructed streets, underground
infrastructure and vehicles. Within the business -type activities decreases were also attributable to
depreciation of existing assets of the water and sewer funds.
Capital Assets at Year -End
(Net of Accumulated Depreciation)
Governmental Activities Business -Type Activities Total
2012 2011 2012 2011 2012 2011
Land $ 3,275,859 $ 3,275,859 $ - $ $ 3,275,859 $ 3,275,859
Construction in Progress 211,705 - 211,705
Buildings 3,324,186 3,542,239 3,324,186 3,542,239
.. Office Equipment and Furniture 450,739 447,690 450,739 447,690
Vehicles 1,148,061 1,192,147 - 1,148,061 1,192,147
Machinery and Shop Equipment 392,625 197,507 195,903 204,551 588,528 402,058
Other Equipment 205,040 232,546 - 205,040 232,546
Infrastructure 30,838,053 32,967,803 28,602,192 29,417,251 59,440,245 62,385,054
w' Capital Assets, Net $ 39,634,563 $ 42,067,496 $ 28,798,095 $ 29,621,802 $ 68,432,658 $ 71,689,298
Additional information on the City's capital assets can be found in the notes to the financial statements on
pages 35 -59.
Long -term debt — At the end of the current fiscal year, the City of Lino Lakes had total bonded debt
outstanding of $17,426,000. Of this amount $10,646,000 comprises tax supported debt and $6,780,000 is
special assessment debt. Revenue supported debt was completely retired as of the year end. All
outstanding debt carries the general obligation backing for which the City is liable in the event of default
by the property owners subject to the specific taxes, special assessments or revenues pledged to the
retirement of the debt. In addition, the City carries a note to Anoka County for its share of the cost of the 1-
35E /County Road 14 Interchange project in the amount of $3,695,000.
Outstanding Debt at Year -End
Governmental Activities Business -Type Activities Total
2012 2011 2012 2011 2012 2011
G.O. Bonds $ 10,646,000 $ 9,421,000 $ - $ $ 10,646,000 $ 9,421,000
G.O. Special Assessment Bonds 6,780,000 7,985,000 - 6,780,000 7,985,000
G.O. Revenue Bonds - - 405,000 - 405,000
Total Outstanding Debt $ 17,426,000 $ 17,406,000 $ $ 405,000 $ 17,426,000 $ 17,811,000
The City of Lino Lakes' total bonded debt decreased by $385,000 (2.2 %) during the current fiscal year.
The key factors for the change include the issuance of $150,000 in 2012A Equipment Certificates and the
issuance of a general obligation bond in the amount $2,015,000 to finance the Birch/Ware and Lake
Dr /Main traffic signal projects. Principal in the amount of $2,550,000 was retired during the
year.Additional information on the City's long -term debt can be found in the notes to the financial
statements on pages 35 -59.
CITY OF LINO LAKES, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2012
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
• The unemployment rate for the City of Lino Lakes at year -end is 5.6 %, which is a decrease from a
rate of 5.9% a year ago. This is slightly higher than the state's average unemployment rate of 5.4%
and significantly lower than the national average of 7.6% at the end of 2012.
• Residential growth in the City has continued to be significantly below the rates of the mid 2000's due
to the general residential real estate market weakness, with about one - fourth the number of new
home permits issued in 2012 as in 2007, and less than 87% of new home permits issued in 2005.
This is expected to level off in 2013, with hopes of the beginning of a recovery of the housing market.
This, as well as falling property values of the existing tax base, will continue to have an impact on the
City's tax base for 2013.
• Energy costs, while relatively stable in recent months, are expected to continue to increase over the
coming months. This will have an impact on the City's budget for the coming year and thereafter.
• Property tax reforms and State budget deficits have significantly impacted state aid payments the City
of Lino Lakes receives. Local government aid and market value homestead credit was reduced to
zero for 2003 and 2004 -2011. The City is exempted from local government aid and the state
legislature has discontinued the market value homestead credit in favor of a new market value
exclusion, which excludes a portion of residential homestead property value from property taxes.
• The Federal Reserve Board has continued the federal funds rates at historical lows, currently to
between 0.00% — 0.25 %, which is expected to result in sizable decreases in the City's investment
earnings.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the City of Lino Lakes' finances for all of
those with an interest in the government's finances. Questions concerning any of the information provided
in this report or requests for additional financial information should be addressed to the Director of
Finance, City of Lino Lakes, 600 Town Center Parkway, Lino Lakes, Minnesota, 55014.
21
BASIC FINANCIAL STATEMENTS
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF NET POSITION
December 31, 2012
Governmental Business -type
Activities Activities
Statement 1
Total
ASSETS
Cash and investments $ 21,636,723 $ 11,138,355 $ 32,775,078
Accrued interest receivable 70,428 - 70,428
Accounts receivable 149,700 433,525 583,225
Due from other governments 101,395 3,156 104,551
Internal Balances (559,110) 559,110 -
Taxes receivable 365,172 - 365,172
Special assessments receivable 11,954,743 76 11,954,819
,j Long -term notes receivable 225,000 225,000
Prepaid items 182,899 21,099 203,998
Inventory 39,298 39,298
Unamortized bond issue costs 219,206 - 219,206
Permanently restricted cash and investments 110,536 110,536
Capital assets:
Land 3,275,859 - 3,275,859
Other capital assets, net of depreciation 36,358,704 28,798,095 65,156,799
Total assets 74,091,255 40,992,714 115,083,969
'n(
LIABILITIES
Accounts payable 184,324 36,946 221,270
Salaries payable 214,667 12,250 226,917
Contracts and retainage payable 75,553 75,553
Accrued interest payable 334,040 334,040
Due to other governments 1,184 1,184
Other accrued liabilities 5,381 5,381
Non - current liabilities:
Due within one year 3,037,714 28,400 3,066,114
Due in more than one year 18,837,900 15,010 18,852,910
Total liabilities 22,690,763 92,606 22,783,369
NET POSITION
Net Investment in Capital Assets 22,166,342 28,798,095 50,964,437
Restricted for:
Debt service - expendable 11,484,576 - 11,484,576
Environmental improvements - expendable 10,536 10,536
Environmental improvements - nonexpendable 100,000 100,000
Unrestricted 17,639,038 12,102,013 29,741,051
Total net position $ 51,400,492 $ 40,900,108 $ 92,300,600
The accompanying notes are an integral part of these basic financial statements.
22
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF ACTIVITIES
Year Ended December 31, 2012
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
Program Revenues
Charges for
Services
Capital
Operating Grants Grants and
and Contributions Contributions
$ 1,883,961 $ 129,151 $
4,046,415 642,745
5,584,283 476,296
1,210,867 191,832
184,051 19,297
430,121 16,940
837,755 -
14,177,453 1,476,261
949,121
1,527,637
2,476,758
$ 16,654,211
1,371,809
1,505,781
2,877,590
$ 4,353,851
19,413 $
171,423
218,473
40,870
5,125,693
450,179 5,125,693
- 19,125
- 893
- 20,018
450,179 $ 5,145,711
General revenues:
Taxes:
Property taxes, levied for general purpose
Franchise taxes
Other taxes
Grants and contributions not restricted to specific programs
Unrestricted investment earnings
Gain on disposal of capital assets
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning
Net position - ending
The accompanying notes are an integral part of these basic financial statements.
23
Statement 2
Net (Expense) Revenue and Changes in Net Position
Governmental Business -type
Activities Activities
Total
$ (1,735,397) $ - $ (1,735,397)
(3,232,247) - (3,232,247)
236,179 - 236,179
(1,019,035) - (1,019,035)
(123,884) - (123,884)
(413,181) - (413,181)
(837,755) (837,755)
(7,125,320) (7,125,320)
441,813 441,813
(20,963) (20,963)
420,850 420,850
(7,125,320) 420,850 (6,704,470)
8,461,621 8,461,621
95,003 95,003
54,085 54,085
4,941 4,941
202,828 102,073 304,901
4,175 - 4,175
41,043 (41,043) -
8,863,696 61,030 8,924,726
1,738,376 481,880 2,220,256
49,662,116 40,418,228 90,080,344
$ 51,400,492 $ 40,900,108 $ 92,300,600
24
CITY OF LINO LAKES, MINNESOTA
BALANCE SHEET - GOVERNMENTAL FUNDS
December 31, 2012
G.O. Improvement Municipal
Improvement Note State
Assets General Bonds 2005A 2009A Aid
Cash and investments $ 5,054,673 $ 158,742 $ 491 $ 5,037,136
Accrued interest receivable 70,428 - -
Accounts receivable 114,793 -
Due from other governmental units 99,895 - -
Interfund receivable
Taxes receivable:
Delinquent 259,786 - 680
Due from county 63,233 - -
Special assessments receivable:
Delinquent _ _
Deferred 3,985 5,851,618 4,352,824
Due from county _ _
Long -term notes receivable -
Prepaid items 180,786
Permanently restricted cash and investments
Advances to other funds
Total assets $ 5,847,579 $ 6,010,360 $ 4,353,995 $ 5,037,136
Liabilities and Fund Balances
Liabilities:
Interfund payable
Accounts payable
Salaries payable
Contracts and retainage payable
Due to other governmental units
Advances from other funds
Deferred revenue
Total liabilities
$ - $ 2,162,003 $ $
125,564 -
214,418 -
8,825 -
1,184 -
263,771 5,851,618 4,353,504
613,762 8,013,621 4,353,504
Fund balances:
Nonspendable 180,786 -
Restricted - 491 -
Committed - -
Assigned - - 5,03 7,136
Unassigned 5,053,031 (2,003,261) -
Total fund balances 5,233,817 (2,003,261) 491 5,037,136
Total liabilities and fund balances $ 5,847,579 $ 6,010,360 $ 4,353,995 $ 5,037,136
The accompanying notes are an integral part of these basic financial statements.
25
r
Area and
Unit
Charge
$ 3,466,242
23,712
82,137
821,426
10,919
496,000
$ 4,900,436
24,157
903,563
927,720
496,000
3,476,716
3,972,716
$ 4,900,436
Traffic
Signal
Other
Governmental
Funds
$ 530,087 $ 7,389,352
11,195
1,500
2,366,768
32,758
8,715
42,587
784,478
4,769
225,000
2,113
110,536
$ 530,087 $ 10,979,771
$ $
112
66,728
66,840
Statement 3
Total
Governmental
Funds
$ 21,636,723
70,428
149,700
101,395
2,366,768
293,224
71,948
124,724
11,814,331
15,688
225,000
182,899
110,536
496,000
$ 37,659,364
763,875 $
34,491
249
496,000
865,201
2,159,816
327,113
3,041,033
115,196
463,247 6,596,080
(1,259,467)
463,247 8,819,955
$ 530,087 $ 10,979,771 $
2,925,878
184,324
214,667
75,553
1,184
496,000
12,237,657
16,135,263
1,003,899
3,041,524
115,196
15,573,179
1,790,303
21,524,101
37,659,364
26
CITY OF LINO LAKES, MINNESOTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE
SHEET TO THE STATEMENT OF NET POSITION
December 31, 2012
Total Fund Balances for Governmental Funds
Total net position reported for governmental activities in the statement of net position
is different because:
Capital assets used in governmental funds are not financial resources and,
therefore, are not reported in the funds. Those assets consist of:
Land
Buildings, Net of Accumulated Depreciation
Office Equipment and Furniture, Net of Accumulated Depreciation
Vehicles, Net of Accumulated Depreciation
Machinery and Shop Equipment, Net of Accumulated Depreciation
Other Equipment, Net of Accumulated Depreciation
Infrastructure, Net of Accumulated Depreciation
Some of the City's property taxes and special assessments will be collected after
year -end, but are not available soon enough to pay for the current period's
—
expenditures and, therefore, are reported as deferred revenue in the governmental
funds.
Bond issuance costs are reported as expenditures in the governmental funds and are
shown net of accumulated amortization on the statement of net position.
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 position.
— 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 position. Balances at year -end are:
Bonds Payable
Unamortized Premiums
Unamortized Discounts
Notes Payable
Other Post Employment Benefits
— Compensated Absence Payable
Total Net Position of Governmental Activities
The accompanying notes are an integral part of these basic financial statements.
27
$ 3,275,859
3,324,186
450,739
1,148,061
392,625
205,040
30,838,053
(17,426,000)
(67,373)
25,152
(3,695,000)
(77, 821)
(634,572)
Statement 4
$ 21,524,101
39,634,563
12,232,276
219,206
(334,040)
(21,875,614)
$ 51,400,492
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - GOVERNMENTAL FUNDS
Year Ended December 31, 2012
G.O. Improvement Municipal
Improvement Note State
Revenue: General Bonds 2005A 2009A Aid
General property taxes $ 7,183,444 $ $ $
Tax increments -
Licenses and permits 319,172 -
Intergovernmental 462,023 - 3,941,961
Special assessments 33,358 51,724 -
Charges for services 309,777 -
Fines and forfeits 155,956 -
Investment earnings 38,603 - 33,554
Refunds 58,416 - -
Miscellaneous 104,819
Total revenue 8,665,568 51,724 3,975,515
Expenditures:
Current:
General government 1,608,240
Public safety 3,861,265 - -
Public works 1,226,865 >' 8,953/
Parks, recreation and forestry 868,068 -
Conservation of natural resources 165,858
Community development 430,102/ -
Capital outlay:
General government 7,616
Public safety 20,417 / - -
Public works - - -
Conservation of natural resources 6,250 -
Debt service:
Principal 330,000 -
Interest and fiscal charges 203,648 98,267
Bond Issuance Costs
Total expenditures 8,194,681 533,648 98,267 8,953
Revenue over (under) expenditures 470,887 (533,648) (46,543) 3,966,562
Other financing sources (uses):
Transfer in 159,000 46,543
Transfer out (842,250) - - (368,569)
Sale of property -
Issuance of debt -
Total other financing sources (uses) (842,250) 159,000 46,543 (368,569)
Net increase (decrease) in fund balance (371,363) (374,648) - 3,597,993
Fund balance - beginning of year 5,605,180 (1,628,613) 491 1,439,143
Fund balance - December 31 $ 5,233,817 $ (2,003,261) $ 491 $ 5,037,136
The accompanying notes are an integral part of these basic financial statements.
28
Statement 5
Area and Other Total
Unit Traffic Governmental Governmental
Charge Signal Funds Funds
'- $ $ $ 1,090,202 $ 8,273,646
- 286,694 286,694
- 319,172
- 563,586 300,000 5,267,570
379,206 352,710 816,998
243,021 191,835 744,633
155,956
-- 55,952 74,716 202,825
- 39,599 98,015
- 211,254 316,073 -
678,179 563,586 2,547,010 16,481,582
10,9751/ 1,619,215
-
- - - 3,861,265 -
78,483- 1,470,891 - 554,238' 3,339,430
- - 188,908'' 1,056,976
10,460 ✓ 176,318
-- - - 5,052' 435,154'
43,115 ✓ 50,731Y
- 262,367 282,784'
- 277,166' 277,166-
6,250
1,815,000 2,145,000
529,960 831,87Y-
11,133 35,921' 47,054
78,483 1,482,024 3,733,162 14,129,218
599,696 (918,438) (1,186,152) 2,352,364
- 1,773,914 1,979,457
(455,616) (244,000) (1,910,435)
- 4,175 4,175
- 1,558,344 606,656 2,165,000
-
(455,616) 1,558,344 2,140,745 2,238,197
144,080 639,906 954,593 4,590,561
._ 3,828,636 (176,659) 7,865,362 16,933,540
$ 3,972,716 $ 463,247 $ 8,819,955 $ 21,524,101
OWNS
29
CITY OF LINO LAKES, MINNESOTA Statement 6
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITIES
Year Ended December 31, 2012
Net Change in Fund Balances -Total Governmental Funds $ 4,590,561
Amounts reported for governmental activities in the statement of activities are different because:
Governmental funds report capital outlays as expenditures. However, in the statement of activities,
assets are capitalized and the cost is allocated over their estimated useful lives and reported as
depreciation expense.
Capital outlays
Contributed capital assets
Capital contributions to business -type funds
Gain on disposal of capital assets
Proceeds from sales of capital assets
Depreciation expense
$ 684,293
(183,726)
(27,979)
4,175
(19,924)
(2,889,772) (2,432,933)
The governmental funds report bond proceeds as financing sources, while repayment of bond
principal is reported as an expenditure. In the statement of net position, however, issuing debt
increases long -term liabilities and does not affect the statement of activities and repayment of
principal reduces the liability. Also, governmental funds report the effect of issuance costs,
premiums and discounts when debt is first issued, whereas these amounts are deferred and
amortized in the statement of activities. Interest is recognized as an expenditure in the
governmental funds when it is due. In the statement of activities, however, interest expense is
recognized as it accrues, regardless of when it is due. The net effect of these differences in the
treatment of general obligation bonds and related items is as follows:
Issuance of bonds (2,015,000)
Issuance of equipment certificates (150,000)
Bond discount
Bond issuance costs 47,057
Repayment of bond principal 2,145,000
Change in accrued interest expense for general obligation bonds 859
Amortization of bond issuance costs (25,914)
Amortization of bond premium 21,641
Amortization of bond discount (2,469)
Delinquent and deferred property taxes and special assessments receivable will be collected
subsequent to year -end, but are not available soon enough to pay for the current period's
expenditures and, therefore, are deferred in the governmental funds.
Deferred revenue - December 31, 2011
Deferred revenue - December 31, 2012
12,643,772
12,232,276
21,174
(411,496)
In the statement of activities, compensated absences and other post employment benefits are
measured by the amounts earned during the year. In the governmental funds, however,
expenditures for these items are measured by the amount of financial resources used (essentially,
the amounts actually paid). During fiscal year 2012, compensated absence payable and other post
employment benefits payable increased. (28,930)
Change in Net Position of Governmental Activities $ 1,738,376
The accompanying notes are an integral part of these basic financial statements.
30
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CITY OF LINO LAKES, MINNESOTA
STATEMENT OF NET POSITION - PROPRIETARY FUNDS
December 31, 2012
Assets
Current assets:
Cash and cash equivalents
Accounts receivable
Due from other governmental units
Interfund receivable
Due from county - special assessments
Prepaid items
Total current assets
Non - current assets:
Inventory
Capital assets being depreciated:
Buildings
Equipment
Water and sewer systems
Total capital assets
Less: allowance for depreciation
Net capital assets
Total noncurrent assets
Total assets
Liabilities
Current liabilities:
Accounts payable
Salaries payable
Compensated absences payable - current portion
Total current liabilities
Non - current liabilities:
Compensated absences payable - long term
Total liabilities
Net position
Net Investment in Capital Assets
Unrestricted
Total net position
The accompanying notes are an integral part of these basic financial statements.
31
Water
$ 4,110,341
221,404
38
9,537
4,341,320
39,298
48,690
158,633
19,796,988
20,004,311
(6,021,803)
13,982,508
14,021, 806
18,363,126
22,154
6,122
14,200
42,476
7,505
49,981
13,982,508
4,330,637
18,313,145
Sewer
$ 7,028,014
212,121
3,156
559,110
38
11,562
7,814,001
345,238
21,273,348
21,618,586
(6,802,999)
14,815,587
14,815,587
22,629,588
14,792
6,128
14,200
35,120
7,505
42,625
14,815,587
7,771,376
22,586,963
Statement 7
Total
2012
$ 11,138,355
433,525
3,156
559,110
76
21,099
12,155,321
39,298
48,690
503,871
41,070,336
41,622,897
(12,824, 802)
28,798,095
28,837,393
40,992,714
36,946
12,250
28,400
77,596
15,010
92,606
28,798,095
12,102,013
40,900,108
CITY OF LINO LAKES, MINNESOTA Statement 8
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION - PROPRIETARY FUNDS
Year Ended December 31, 2012
Total
Water Sewer 2012
Operating revenue:
Charges for services $ 1,352,003 $ 1,499,589 $ 2,851,592
Hook -up charges 6,770 5,930 12,700
Water meter sales 7,309 - 7,309
Other operating revenue 5,727 262 5,989
Total operating revenue 1,371,809 1,505,781 2,877,590
Operating expenses:
Personal services 168,409 171,616 340,025
Materials and supplies 153,665 22,865 176,530
Contractual services 90,926 107,989 198,915
MCES sewer charges - 684,933 684,933
Depreciation 423,887 438,180 862,067
Utilities 90,992 42,555 133,547
Other 19,598 59,499 79,097
Total operating expenses 947,477- 1,527,637' 2,475,114
Net income from operations 424,332 (21,856) 402,476
Other income (expense):
Investment earnings 35,321 66,752 102,073
Special assessments 19,125 893 20,018
Bond interest (1,237) (1,237)
Paying agent fees (407) (407)
Total other income (expense) 52,802 67,645 120,447
Net income before contributions and transfers 477,134 45,789 522,923
Capital contributions and transfers:
Capital contributions from primary government 12,725 15,254 27,979
Transfer out (34,511) (34,511) (69,022)
Change in Net Position 455,348 26,532 481,880
Net Position - January 1 17,857,797 22,560,431 40,418,228
Net Position - December 31 $ 18,313,145 $ 22,586,963 $ 40,900,108
The accompanying notes are an integral part of these basic financial statements.
32
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
Year Ended December 31, 2012
Statement 9
IMO
Cash flows from operating activities:
Cash receipts from customers
Cash paid to suppliers
Cash paid to employees
Net cash flows from operating activities
Cash flows from noncapital financing activities:
` Net transfers
Cash flows from capital and related financing activities:
Principal paid on revenue bonds
Collection of special assessments
Interest and paying agent fees on revenue bonds
Acquisition of capital assets
Net cash flows used by capital and related
financing activities
Cash flows from investing activities:
Interest on investments
Net increase in cash and cash equivalents
Cash and cash equivalents - January 1
Cash and cash equivalents - December 31
Reconciliation of operating income to net cash
from operating activities:
Operating income (loss)
Adjustments to reconcile operating income to
net cash flows from operating activities:
` Depreciation
Change in assets and liabilities:
Increase in receivables
Increase in prepaid items
Increase in inventory
Increase (Decrease) in payables
Net cash flows from operating activities
Wow
■
The accompanying notes are an integral part of these basic financial statements.
33
Water
$ 1,362,424
(363,535)
(168,972)
829,917
(34,511)
(405,000)
48,466
(7,340)
(5,985)
(369,859)
35,321
460,868
3,649,473
$ 4,110,341
Sewer
$ 1,504,661
(863,241)
(217,740)
423,680
Total
2012
$ 2,867,085
(1,226,776)
(386,712)
1,253,597
(34,511) (69,022)
(405,000)
1,070 49,536
(7,340)
(4,394) (10,379)
(3,324) (373,183)
66,752 102,073
452,597 913,465
6,575,417 10,224,890
$ 7,028,014 $ 11,138,355
$ 424,332 $ (21,856) $ 402,476
423,887
(3,978)
(897)
(11,865)
(1,562)
$ 829,917 $
438,180 862,067
(1,120) (5,098)
(630) (1,527)
(11,865)
9,106 7,544
423,680 $ 1,253,597
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF NET POSITION - FIDUCIARY FUNDS - AGENCY FUNDS
December 31, 2012
Statement 10
2012
Assets
Cash and investments $ 510,181
Liabilities
Deposits payable $ 510,181
The accompanying notes are an integral part of these financial statements.
34
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Lino Lakes is a public corporation formed under Minnesota Statute 410. As such, the City is under
home rule charter regulations and applicable statutory guidelines.
The basic financial statements of the City of Lino Lakes have been prepared in conformity with U.S. generally
accepted accounting principles as applied to governmental units by the Governmental Accounting Standards Board
(GASB). The following is a summary of the significant accounting policies:
A. FINANCIAL REPORTING ENTITY
As required by U.S. generally accepted accounting principles, the financial statements of the reporting
entity include those of the City of Lino Lakes and its component units. A component unit is a legally
separate entity for which the primary government is financially accountable, or for which the exclusion of
the component unit would render the financial statements of the primary government misleading. The
criteria used to determine if the primary government is financially accountable for a component unit
include whether or not the primary government appoints the voting majority of the potential component
unit's board, is able to impose its will on the potential component unit, is in a relationship of financial
benefit or burden with the potential component unit, or is fiscally depended upon by the potential
component unit.
COMPONENT UNITS
In conformity with U.S. generally accepted accounting principles, the financial statements of component
units have been included in the financial reporting entity either as blended component units or as discretely
presented component units.
Blended Component Units
The Economic Development Authority (EDA) of Lino Lakes is an entity legally separate from the City.
However, for financial reporting purposes, the EDA is reported as if it were part of the City's operations
because the members of the City Council serve as commission members. The EDA does not issue separate
financial statements. The Housing and Redevelopment Authority (HRA) of Lino Lakes is an entity legally
separate from the City. However, for financial reporting purposes, the HRA is reported as if it were part of
the City's operations because the members of the City Council serve as commission members. The HRA
has not yet incurred any financial activity.
B. BASIC FINANCIAL STATEMENTS
1. Government -Wide Statements
The government -wide financial statements (i.e., the statement of net position and the statement of
activities) display information about the primary government and its component units. These statements
include the financial activities of the overall City government, except for fiduciary activities. Governmental
activities, which normally are supported by taxes and intergovernmental revenues, are reported separately
from business -type activities, which rely to a significant extent on fees and charges to external parties for
support. As a general rule, the effect of interfund activity has been eliminated from the government -wide
financial statements. Exceptions to this general rule are charges between the City's enterprise funds and
various other functions of government. Eliminations of these charges would distort the direct costs and
program revenues reported for the various functions concerned.
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
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 position, 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 position is reported in three parts: (1) net investment in capital assets;
(2) restricted net position; and (3) unrestricted net position. The City first utilizes restricted resources to
finance qualifying activities.
The statement of activities demonstrates the degree to which the direct expenses of each function of the
City's governmental activities and different business -type activities are offset by program revenues. Direct
expenses are those that are clearly identifiable with a specific function or activity. Program revenues
include: (1) fees, fines, and charges paid by the recipients of goods, services, or privileges provided by a
given function or activity; and (2) grants and contributions that are restricted to meeting the operational or
capital requirements of a particular function or activity. Revenues that are not classified as program
revenues, including all taxes, are presented as general revenues.
2. Fund Financial Statements
The fund financial statements provide information about the City's funds, including its fiduciary funds and
blended component unit. Separate statements for each fund category (governmental, proprietary, and
fiduciary) are presented. The emphasis of governmental and proprietary fund financial statements is on
major individual governmental and enterprise funds, with each displayed as separate columns in the fund
financial statements. All remaining governmental and enterprise funds are aggregated and reported as
nonmajor funds.
Proprietary fund operating revenues, such as charges for services, result from exchange transactions
associated with the principal activity of the fund. Exchange transactions are those in which each party
receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment
earnings, result from nonexchange transactions or incidental activities.
The City reports the following major governmental funds:
General Fund
The general fund is the City's primary operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
General Obligation Improvement Bonds 2005A Fund
The general obligation improvement bonds 2005A fund accounts for the accumulation of resources for,
and the payment of, interest, principal and related costs on general long -term debt.
Improvement Note 2009A Fund
The improvement note 2009A fund accounts for the accumulation of resources for, and the payment of,
interest, principal and related costs on general long -term debt.
Municipal State Aid Fund
The Municipal State Aid fund accounts for the collection of assessments on municipal state aid projects.
36
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. BASIC FINANCIAL STATEMENTS (CONTINUED)
2. Fund Financial Statements (Continued)
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.
Traffic Signal Fund
The traffic signal charge fund accounts for for costs associated with construction of traffic signals in the
City.
The City reports the following major proprietary funds:
Water Fund
The water fund accounts for customer water service charges that are used to finance water operating
expenses.
Sewer Fund
The sewer fund accounts for customer water service charges that are used to finance water operating
expenses.
Additionally, the City reports the following fiduciary funds:
Agency Funds - to account for assets held as an agent for individuals, private organizations, other
governmental units, and/or other funds. The City's agency fund accounts for pass- through contractor's
deposits relating to prospective developments.
C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING
The government -wide and proprietary fund financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Agency funds, which are included in the Fiduciary
Funds, do not have a measurement focus. Revenues are recorded when earned, and expenses are recorded
when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as
revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon
as all eligibility requirements imposed by the provider have been met.
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.
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING (CONTINUED)
Amounts reported as program revenues include: 1. Charges to customers or applicants for goods, services,
or privleges provided, 2. operating grants and contributions, and 3. capital grants and contributions,
including special assessments.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary fund's principal ongoing operations. The principal operating revenue of the
City's enterprise funds are charges to customers for sales and services. Operating expenses for enterprise
funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All
revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
D. BUDGETS
Budgets are adopted on a basis consistent with U.S. generally accepted accounting principles. Annual
appropriated budgets are adopted for the General Fund and the Program Recreation Special Revenue Fund.
Budgeted expenditure appropriations lapse at year -end.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the
expenditure of monies are recorded in order to reserve that portion of the appropriation, is not employed by
the City because it is not presently considered necessary to assure effective budgetary control or to
facilitate effective cash management.
E. LEGAL COMPLIANCE — BUDGETS
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
1. The City Administrator submits to the City Council a proposed operating budget (including the
General Fund and Program Recreation Special Revenue Fund) for the fiscal year commencing the
following January 1. The operating budget includes proposed expenditures and the means of financing
them.
2. Public hearings are conducted to obtain taxpayer comments.
3. The budget is legally enacted through passage of a resolution on a departmental basis and can be
expended by each department based upon detailed budget estimates for individual expenditure
accounts.
4. The City Administrator is authorized to transfer appropriations within any department budget.
Additional interdepartmental or interfund appropriations and deletions are or may by authorized by the
City Council with fund (contingency) reserves or additional revenues.
5. Formal budgetary integration is employed as a management control device during the year for the
General Fund.
6. Legal debt obligation indentures determine the appropriation level and debt service tax levies for the
Debt Service Funds. Supplementary budgets are adopted for the Proprietary Funds to determine and
calculate user charges. These debt service and budget amounts represent general obligation bond
indenture provisions and net income for operation and capital maintenance and are not reflected in the
financial statements.
38
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E. LEGAL COMPLIANCE — BUDGETS (CONTINUED)
7. A capital improvement program is reviewed periodically by the City Council for the Capital Project
Funds. However, appropriations for major projects are not adopted until the actual bid award of the
improvement. The appropriations are not reflected in the financial statements.
8. Expenditures may not legally exceed budgeted appropriations at the department level unless approved
by the City Council. Therefore, the legal level of budgetary control is at the department level (i.e.
administration, community development, public safety, public services, and other).
9. The City Council may authorize transfers of budgeted amounts between City funds.
F. CASH AND INVESTMENTS
Cash and investment balances from all funds are pooled and invested to the extent available in investments
authorized by Minnesota Statutes. Earnings from investments are allocated to individual funds on the basis
of the fund's equity in the cash and investment pool.
The City provides temporary advances to funds that have insufficient cash balances by means of an
advance from another fund shown as interfund receivables in the advancing fund in the governmental fund
financial statements, and an interfund payable in the fund with the deficit, until adequate resources are
received. These interfund payables are eliminated for statement of Net position presentation.
Investments are stated at fair value and interest earnings are accrued at year -end.
For purposes of the statement of cash flows the Proprietary Fund considers all highly liquid investments
with a maturity of three months or less when purchased to be cash equivalents. All of the cash and
investments allocated to the proprietary fund types have original maturities of 90 days or less. Therefore,
the entire balance in such fund types is considered cash equivalents.
Permanently restricted cash and investments represents the principal portion of resources received that
must be retained in a permanent fund. Only earnings from these funds may be used for purposes that
support environmental maintenance and improvements.
G. PROPERTY TAX CREDITS
Property taxes on homestead property (as defined by State Statutes) are partially reduced by property tax
credits. These credits are paid to the City by the State in lieu of taxes levied against homestead property.
The State remits these credits through installments each year. These credits are recognized as revenue by
the City at the time of collection.
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
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 2012 totaled $1,138,360. 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 funds are completely offset by
deferred revenues. Deferred revenue in governmental activities is susceptible to full accrual on the
government -wide statements.
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
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 AND PREPAIDS
The original cost of materials and supplies has been recorded as expenditures /expenses at the time of
purchase in both the Governmental and Proprietary Funds. These funds do not maintain material amounts
of materials and supplies.
Certain payments to vendors reflect costs applicable to future accounting periods and are reported as
prepaid items under the purchases method in both government -wide and fund financial statements.
K. INTERFUND RECEIVABLES/PAYABLES
During the course of operations, numerous transactions occur between individual funds for goods provided
or services rendered. The year -end balances are classified as interfund receivables and payables on the
governmental fund balance sheets. The non - current portion of interfund loans are reported as "advances
to /from other funds." Advances between funds are offset by a nonspendable fund balance account in
applicable governmental funds to indicate they are not available for appropriation and are not expendable
from available financial resources.
L. CAPITAL ASSETS
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g. roads, sidewalks,
street lights, and similar items) are reported in the applicable governmental or business -type activities
columns in the government -wide financial statements. Capital assets exceeding the City's capitalization
threshold of $2,500 are recorded at historical cost or estimated historical cost if purchased or constructed.
The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend
asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects
are constructed. All existing City infrastructure has been capitalized regardless of date placed in service.
Depreciation on exhaustible assets is recorded as an allocated expense in the Statement of Activities with
accumulated depreciation reflected in the Statement of Net position. Capital assets are depreciated using
the straight -line method over their estimated useful lives. Since surplus assets are sold for an immaterial
amount when declared as no longer needed for City purposes, no salvage value is taken into consideration
for depreciation purposes. Useful lives vary from 3 to 30 years for Buildings, Office Furniture and
Equipment, Vehicles, Machine Shop and Equipment and Other assets, and 25 to 50 years for Infrastructure.
Capital assets not being depreciated include land and construction in progress.
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
M. COMPENSATED ABSENCES
It is the City's policy to permit employees to accumulate earned but unused vacation, PTO (Personal Time
Off), extended leave and sick pay benefits. All vacation pay and PTO and the portion of sick pay allowable
as severance pay is accrued in the government -wide and proprietary fund financial statements. The current
portion is calculated based on historical trends.
N. LONG -TERM OBLIGATIONS
In the entity-wide financial statements, long -term debt and other long -term obligations are reported as
liabilities in the applicable governmental activities. Bond premiums and discounts are deferred and
amortized over the life of the bonds using the straight -line method. Bond issue costs, if material, are
amortized over the term of the related debt using the straight -line method.
In the governmental fund financial statements, bond premiums and discounts, as well as bond issue costs
are recognized during the current period. The face amount of the debt issue is reported as other financing
sources. Premiums received on debt issuances are reported as other financing sources while discounts are
reported as other financing uses. Issue costs are reported as debt service expenditures.
O. FUND EQUITY
In the fund financial statements, governmental funds report fund balances in classifications that disclose
constraints for which amounts in those funds can be spent. These classifications are as follows:
Nonspendable — portions of fund balance related to prepaids, inventories, long -term receivables,
and corpus on any permanent fund.
Restricted — funds are constrained by external parties (statute, grantors, bond agreements, etc).
Committed — funds are established and modified by a resolution approved by the City Council.
Assigned — consists of internally imposed constraints. These constraints are established by the
City Council and/or management. The City Council also delegates the authority to assign fund
balance to the Finance Director.
Unassigned — is the residual classification for the General Fund and also reflects negative residual
amounts in other funds.
When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is
available, it is the City's policy to use restricted first, then unrestricted fund balance.
When an expenditure is incurred for purposes for which committed, assigned, and unassigned amounts are
available, it is the City's policy to use committed first, then assigned, and finally unassigned amounts.
The City formally adopted a fund balance policy for the General Fund. The policy establishes an
unassigned fund balance range of 40% - 50% of General Fund operating expenditures.
42
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
O. FUND EQUITY (CONITNUED)
The fund equity balances in the proprietary funds have been classified into two broad categories:
• Net position — Net Investment in Capital Assets
• Unrestricted Net position
Net position represents the differences between assets and liabilities in the government -wide financial
statements. Net position — net investment in capital assets consists of capital assets, net of accumulated
depreciation, reduced by the ouststanding balance of any long -term debt used to build or acquire capital
assets. Net position is reported as restricted in government -wide financial statements when there are
limitations on their use thorugh external restrictions imposed by creditors, grantors, or laws or regulations
of other governments.
P. INTERFUND TRANSACTIONS
Interfund services provided and used are accounted for as revenues, expenditures or expenses.
Transactions that constitute reimbursements to a fund for expenditures /expenses initially made from it that
are properly applicable to another fund, are recorded as expenditures /expenses in the reimbursing fund and
as reductions of expenditures or expenses in the fund that is reimbursed. All other interfund transactions
are reported as transfers.
All Interfund transactions are eliminated except for activity between governmental activities and business -
type activities for presentation in the entity-wide statements of Net position and statements of activities.
Note 2 DEPOSITS AND INVESTMENTS
Components of Cash and Investments
Cash and investments at year -end consists of the following:
Deposits $ 3,815,337
Investments 29,579,638
Cash on Hand 820
Total $ 33,395,795
Cash and investments are presented in the financial statements as follows:
Cash and Investments - Statement of Net Position $ 32,775,078
Permanent restricted Cash and Investments - Statement of Net Position 110,536
Cash and Investments - Statement of Net Position - Fiduciary Funds 510,181
Total $ 33,395,795
A. Deposits
The City maintains a cash and investment pool that is available for use by all funds. Each fund type's
portion of this pool is displayed on the statement of net position and the balance sheet as "Cash and
Investments." In accordance with Minnesota Statutes, the City maintains deposits at financial institutions
which are authorized by the City Council.
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 2 DEPOSITS AND INVESTMENTS (CONTINUED)
A. Deposits (Continued)
Custodial Credit Risk — Custodial credit risk for deposits is the risk that in the event of a bank failure, the
City's deposits may not be returned to it. The City does not have a specific deposit policy for custodial
credit risk but rather follows Minnesota Statutes for deposits. Minnesota Statutes require that all deposits
be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal
110% of the deposits not covered by insurance or corporate surety bonds. Authorized collateral include:
U.S. government treasury bills, notes, or bonds; issues of a U.S. government agency; general obligations of
a state or local government rated "A" or better; revenue obligations of a state or local government rated
"AA" or better; irrevocable standby letter of credit issued by a Federal Home Loan Bank; and time deposits
insured by a federal agency. Minnesota Statutes require securities pledged as collateral be held in
safekeeping in a restricted account at the Federal Reserve Bank or at an account at a trust department of a
commercial bank or other financial institution not owned or controlled by the depository.
The carrying value and bank balance of the City's deposits in banks at December 31, 2012 is $3,815,337
and $3,994,899, respectively, and were entirely covered by federal depository insurance or by surety bonds
and collateral in accordance with Minnesota Statutes.
B. Investments
The City may also invest idle funds as authorized by Minnesota Statutes as follows:
• Direct obligations or obligations guaranteed by the United States or its agencies
• Shares of investment companies registered under the Federal Investment Company Act of 1940 and
received the highest credit rating, is rated in one of the two highest rating categories by a statistical
rating agency, and all of the investments have a final maturity of thirteen months or less
• General obligations rated "A" or better; revenue obligations rated "AA" or better
• General obligations of the Minnesota Housing Finance Agency rated "A" or better
• Banker's acceptances of United States banks eligible for purchase by the Federal Reserve System
• Commercial paper issued by United States banks corporations or their Canadian subsidiaries, of
highest quality category by a least two nationally recognized rating agencies, and maturing in 270 days
or less
• Guaranteed investment contracts guaranteed by United States commercial banks or domestic branches
of foreign banks or United States insurance companies if similar debt obligations of the issuer or the
collateral pledged by the issuer is in the top two rating categories
• Repurchase or reverse purchase agreements and securities lending agreements financial institutions
qualified as a "depository" by the government entity, with banks that are members of the Federal
Reserve System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S.
government securities to the Federal Reserve Bank of New York, or certain Minnesota securities
broker - dealers
Investments Held with Broker —
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an
investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value
to changes in market interest rates. The City's policy to minimize interest rate risk includes investing
primarily in short-term securities and structuring the investment portfolio so that securities mature to meet
cash requirements for ongoing operations. Information about the sensitivity of the fair values of the City's
investments to market interest rate risk fluctuations is provided by the following table that shows the
distribution of the City's investments by maturity:
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 2 DEPOSITS AND INVESTMENTS (CONTINUED)
12 Months 13 to 24 25 to 60 More than
Type Total or Less Months Months 60 Months
Minnesota Municipal Money
Market Trust Fund $ 1,584,962 $ 1,584,962 $ - $ $
Federal Agricultural Mortgage Corp. 1,000,000 1,000,000
Federal Home Loan Bank 2,348,975 - - 2,348,975
Federal Home Loan Mortgage Corp. 853,992 - 353,805 500,187
Federal National Mortgage Assn. 1,002,240 - 300,849 701,391
Negotiable CDs 13,713,494 7,483,000 2,726,516 3,503,978 -
Municipal Bonds 8,803,714 500,546 1,850,410 4,623,472 1,829,286
Mutual Fund 272,261 272,261 - - -
Total $ 29,579,638 $ 9,840,769 $ 5,576,926 $ 8,782,104 $ 5,379,839
Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of
the investment. The City's policy to minimize credit risk includes limiting investing funds to those
allowable under Minnesota Statute 118A, annually appointing all financial institutions where investments
are held, and diversifying the investment portfolio. This is measured by the assignment of a rating by a
nationally recognized statistical rating organization. The following chart summarizes year -end ratings for
the City's investments as rated by Moody's Investors Service:
Credit
Type Quality Rating Amount
Minnesota Municipal Money Market Trust Fund Aa2 $ 1,584,962
Federal Agricultural Mortgage Corp. Aaa/AA+ 1,000,000
Federal Home Loan Bank Aaa/AA+ 2,348,975
Federal Home Loan Mortgage Corp. Aaa/AA+ 853,992
Federal National Mortgage Assn. Aaa/AA+ 1,002,240
Negotiable CDs Not Rated 13,713,494
Municipal Bonds A -Aaa 8,803,714
Mutual Fund Not Rated 272,261
Total $ 29,579,638
The Minnesota Municipal Money Market Fund Trust is a common law trust organized in accordance with
the Minnesota Joint Powers Act, which invests only in investment instruments allowable under Minnesota
statutes as described on the previous page. Its investments are valued at amortized cost, which
approximates market value in accordance with Rule 2a -7 of the Investment Company Act of 1940. The
amortized cost method of valuation values a security at its cost on the date of purchase and thereafter
assumes a constant amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the fair value of instruments.
The Minnesota Municipal Money Market Trust Fund does not have its own credit rating. MBIA, Inc., who
administers the Minnesota Municipal Money Market Fund Trust holds an organization credit rating of Aa2.
For an investment, custodial credit risk is the risk that, in the event of failure of the counterparty, the City
will not be able to recover the value of its investment or collateral securities that are in the possession of an
outside party. The City's investment policy doesn't specifically address custodial credit risk.
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 2 DEPOSITS AND INVESTMENTS (CONTINUED)
Concentration of Credit Risk
The City places no limit on the amount that it may invest in any one issuer. The following is a list of
investments which individually comprise more than 5% of the City's total investments:
Type
4M Fund
Federal Home Loan Bank
Note 3 CAPITAL ASSETS
Amount Percentage
$ 1,584,962 5.36%
2,348,975 7.94%
Capital asset activity for the year ended December 31, 2012 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities:
Capital Assets, Not Being Depreciated:
Land $ 3,275,859 $ $ $ 3,275,859
Construction in Progress 211,705 (211,705) -
Total Capital Assets, Not Being Depreciated 3,487,564 (211,705) 3,275,859
Capital Assets, Being Depreciated:
Buildings 6,530,334 6,530,334
Office Equipment and Furniture 1,306,389 74,206 (8,365) 1,372,230
Vehicles 2,376,629 162,209 (24,100) 2,514,738
Machinery and Shop Equipment 693,565 264,152 (34,122) 923,595
Other Equipment 952,448 - 952,448
Infrastructure 77,693,197 183,726 77,876,923
Total Capital Assets, Being Depreciated 89,552,562 684,293 (66,587) 90,170,268
Accumulated Depreciation for:
Buildings (2,988,095) (218,053) (3,206,148)
Office Equipment and Furniture (858,699) (71,157) 8,365 (921,491)
Vehicles (1,184,482) (224,668) 42,473 (1,366,677)
Machinery and Shop Equipment (496,058) (34,912) (530,970)
Other Equipment (719,902) (27,506) (747,408)
Infrastructure (44,725,394) (2,313,476) (47,038,870)
Total Accumulated Depreciation (50,972,630) (2,889,772) 50,838 (53,811,564)
Total Capital Assets, Being Depreciated, Net 38,579,932 (2,205,479) (15,749) 36,358,704
Governmental Activities Capital Assets, Net $ 42,067,496 $ (2,205,479) $ (227,454) $ 39,634,563
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 3 CAPITAL ASSETS (CONTINUED)
Beginning Ending
Balance Increases Decreases Balance
Business -Type Activities:
Capital Assets, Being Depreciated:
Buildings $ 48,690 $ - $ $ 48,690
Machinery and Shop Equipment 493,491 10,380 - 503,871
Water and Sewer Lines 41,042,356 27,980 - 41,070,336
Total Capital Assets, Being Depreciated 41,584,537 38,360 41,622,897
Accumulated Depreciation for:
ti.. Buildings (48,690) - - (48,690)
Machinery and Shop Equipment (288,940) (19,028) (307,968)
Water and Sewer Lines (11,625,105) (843,039) - (12,468,144)
Total Accumulated Depreciation (11,962,735) (862,067) - (12,824,802)
Total Capital Assets, Being Depreciated, Net 29,621,802 (823,707) - 28,798,095
Business -Type Capital Assets, Net $ 29,621,802 $ (823,707) $ - $ 28,798,095
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 4 CITY INDEBTEDNESS
City indebtedness at December 31, 2012 is composed of the following:
Final
Issue Maturity Interest Original
Date Date Rate Issue
Payable
12/31/2012
Governmental Activities:
General Obligation Bonds:
2010A Equipment Certificates 4/1/2010 12/31/2013 2.00%-3.00% 170,000 $ 60,000
2011A Equipment Certificates 2/14/11 12/31/2014 1.00% 120,000 81,000
2012A Equipment Certificates 2/1/12 12/31/2014 1.00% 150,000 150,000
G.O. Tax Abatement Bonds, Series 2006C 8/15/2006 2/1/2023 4.00% -4.30% 2,460,000 2,345,000
G.O. Utility Revenue Bonds, Series 2006D 8/15/2006 2/1/2017 4.00%-4.15% 570,000 315,000
G.O.CIP Refunding Bonds, Series 2006E 11/1/2006 2/1/2018 4.00% 2,990,000 2,285,000
G.O. Tax Increment Financing Bonds, Series 2007A 7/15/2007 2/1/2024 4.00%-4.125% 4,215,000 3,395,000
G.O. Refunding Bonds, Series 2012A 11/15/2012 2/1/2024 1.00% -2.00% 2,015,000 2,015,000
Total General Obligation Bonds 13,026,000 10,646,000
Special Assessment Bonds:
G.O. Improvement Bonds, Series 2002A 8/1/2002 2/1/2013 3.00 % -4.10% 645,000 30,000
G.O. Improvement Bonds, Series 2002B 8/1/2002 2/1/2013 3.20%-5.55% 2,110,000 265,000
G.O. Improvement Refunding Bonds, Series 2003A 12/1/2003 2/1/2019 2.00%-4.25% 2,090,000 485,000
G.O. Improvement Bonds, Series 2003B 12/1/2003 2/1/2014 3.20% -5.60% 250,000 65,000
G.O. Improvement Bonds, Series 2005A 11/1/2005 2/1/2021 4.35 % -5.15% 5,550,000 3,850,000
G.O. Improvement Refunding Bonds, Series 2005B 11/1/2005 2/1/2015 3.75 % -5.00% 3,755,000 1,270,000
G.O. Improvement & Utility Revenue Refunding Bonds,
Series2010A 7/9/2010 2/1/2020 2.00% -3.00% 1,000,000 815,000
Total Special Assessment Bonds 15,400,000 6,780,000
Total Bonds 28,426,000 17,426,000
Note Payable - Anoka County - 2009A 8/1/2009 8/1/2024 4.00% -3.70% 4,260,000 3,695,000
Unamortized Bond Discounts (45,490) (25,152)
Unamortized Bond Premiums 202,370 67,373
Compensated Absences Payable N/A 634,572
Other Post Employment Benefit Plan N/A 77,821
Total Govemmental Activities $ 32,842,880 $ 21,875,614
Business -Type Activities:
Revenue Bonds:
Compensated Absences Payable N/A 43,410
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 4 CITY INDEBTEDNESS (CONTINUED)
The following is a schedule of changes in City indebtedness for the year ended December 31, 2012:
Payable Payable Due Within
12/31/2011 Issues Payments 12/31/2012 One Year
Governmental activities:
Bonded debt:
General Obligation $ 9,421,000 $ 2,165,000 $ 940,000 $ 10,646,000 $ 974,000
Special Assessment 7,985,000 - 1,205,000 6,780,000 1,675,000
Unamortized Bond Discounts (27,621) (2,469) (25,152) -
Unamortized Bond Premiums 89,014 21,641 67,373
Note Payable - Anoka County 3,695,000 - 3,695,000 -
`""' Compensated Absences Payable 610,655 539,523 515,606 634,572 388,714
Other Post Employment Benefit Plan 72,808 5,013 - 77,821 -
Total Governmental Activities 21,845,856 2,709,536 2,679,778 21,875,614 3,037,714
... Business -Type Activities:
Revenue Bonds 405,000 405,000
Unamortized Bond Discounts (64) - (64)
Compensated Absences Payable 45,398 36,738 38,726 43,410 28,400
...... Total Business -Type Activities 450,334 36,738 443,662 43,410 28,400
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Total $ 22,296,190 $ 2,746,274 $ 3,123,440 $ 21,919,024 $ 3,066,114
All long -term bonded indebtedness outstanding at December 31, 2012 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.
Govemmental Activities
Principal
Interest Total
Years Ending December 31,
2013 $ 2,649,000 $ 756,248 $ 3,405,248
2014 1,986,000 662,594 2,648,594
2015 2,466,000 583,986 3,049,986
2016 2,100,000 501,220 2,601,220
2017 2,205,000 424,665 2,629,665
2018 -2022 8,110,000 1,171,669 9,281,669
2023 -2024 1,605,000 109,896 1,714, 896
Total $ 21,121,000 $ 4,210,278 $ 25,331,278
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.
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 4 CITY INDEBTEDNESS (CONTINUED)
Revenue Bonds — These bonds were issued to finance various improvements in the water fund and will be repaid
primarily from pledged revenues derived from the constructed assets.
In November 2012, the City issued General Obligation Improvement Bonds of $2,015,000 to complete current
refunding of 2003A General Obligation Improvement totaling $435,000 and to fund $1,580,000 of traffic signal
improvements. The $2,015,000 is being funded by special assessments related to the improvement project that the
City has collected. The current refuding resulted in a cash flow savings of $40,347 with a net present value of
$40,100 at a rate of 1.17% . The original bonds had been issued to fund various assessable public projects from
2003 and will be called on in 2013.
Liability for Compensated Absences — This liability represents vested benefits earned by governmental fund
employees through the end of the year which will be paid or used in future periods. For the governmental activities,
compensated absences and other post employment benefit liability are generally liquidated by the general fund. The
liability for Proprietary Fund employees is included in the accrued liabilities of those funds.
Note 5 LEGAL DEBT MARGIN
The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable principally
from property taxes. The City of Lino Lakes' legal debt margin for 2012 is computed as follows:
Market value
Applicable percentage
Debt Limit
Amount of debt applicable to debt limit:
Total bonded debt
Less: Special assessment bonds
Tax abatement bonds
Utility revenue bonds
Tax increment financing bonds
Total debt applicable to debt limit
Legal debt margin
50
12/31/12
$ 1,640,455,854
3.0%
49,213,676
17,426,000
(6,780,000)
(2,345,000)
(315,000)
(3,395,000)
4,591,000
$ 44,622,676
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 6 DEFINED BENEFIT PENSION PLANS — STATEWIDE
A. PLAN DESCRIPTION
All full -time and certain part-time employees of the City of Lino Lakes are covered by defined benefit
pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA
administers the General Employees Retirement Fund (GERF) and the Public Employees Police and Fire
Fund (PEPFF) which are a cost - sharing, multiple - employer retirement plan. This plan is established and
administered in accordance with Minnesota Statutes, Chapter 353 and 356.
GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are
covered by Social Security and Basic Plan members are not. All new members must participate in the
Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership by statute
are covered by the PEPFF.
PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors
upon death of eligible members. Benefits are established by State Statute, and vest after three years of
credited service. The defined retirement benefits are based on a member's highest average salary for any
five successive years of allowable service, age, and years of credit at termination of service.
Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring
member receives the higher of step -rate benefit accrual formula (Method 1) or a level accrual formula
(Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2% of average salary
for each of the first 10 years of service and 2.7% for each remaining year. The annuity accrual rate for a
Coordinated Plan member is 1.2% of average salary for each of the first 10 years and 1.7% for each
remaining year. Under Method 2, the annuity accrual rate is 2.7% of average salary for Basic Plan
members and 1.7% for Coordinated Plan members for each year of service. For PEPFF members, the
annuity accrual rate is 3.0% for each year of service.
For GERF and PEPFF members hired prior to July 1, 1989 whose annuity is calculated using Method 1, a
full annuity is available when age plus years of service equal 90. Normal retirement age is 65 for Basic and
Coordinated members hired prior to July 1, 1989. Normal retirement age is the age for unreduced Social
Security benefits capped at 66 for coordinated members hired on or after July 1, 1989. A reduced
retirement annuity is also available to eligible members seeking early retirement.
There are different types of annuities available to members upon retirement. A single -life annuity is a
lifetime annuity that ceases upon the death of the retiree, no survivor annuity is payable. There are also
various types of joint and survivor annuity options available which will be payable over joint lives.
Members may also leave their contributions in the fund upon termination of public service in order to
qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to
members who leave public service, but before retirement benefits begin.
The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to
active plan participants. Vested, terminated employees, who are entitled to benefits but are not receiving
them yet, are bound by the provisions in effect at the time they last terminated their public service.
PERA issues a publicly available financial report that includes financial statements and required
supplementary information for GERF and PEPFF. That report may be obtained on the interne at
www.mnpera.org, by writing to PERA at 60 Empire Drive #200, St. Paul, Minnesota, 55103 -2088 or by
calling (651) 296 -7460 or 1- 800 - 652 -9026.
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 6 DEFINED BENEFIT PENSION PLANS — STATEWIDE (CONTINUED)
B. FUNDING POLICY
Minnesota Statutes, Chapter 353 sets the rates for employer and employee contributions. These statutes are
established and amended by the state legislature. The City makes annual contributions to the pension plans
equal to the amount required by state statutes. GERF Basic Plan members and Coordinated Plan members
are required to contribute 9.10% and 6.25% respectively, of their annual covered salary. PEPFF members
were required to contribute 9.6% of their annual covered salary in 2012. The City is required to contribute
the following percentages of annual covered payroll: 11.78% for Basic Plan members, 7.25% for
Coordinated Plan members, and 14.4% for PEPFF members. The City's contributions to the General
Employees Retirement Fund for the years ended December 31, 2012, 2011, and 2010 were $164,317,
$187,186, and $177,081, respectively. The City's contributions to the Public Employees Police & Fire
Fund for the years ended December 31, 2012, 2011, and 2010 were $315,541, $285,356, and $280,046,
respectively. The City's contributions were equal to the contractually required contributions for each year
as set by state statute.
Note 7 METROPOLITAN COUNCIL ENVIRONMENTAL SERVICES
During 1971, the Metropolitan Waste Control Commission (MWCC) was organized to provide for consolidation of
the sanitary sewer collection, treatment and disposal in the seven county metropolitan area surrounding Minneapolis
and St. Paul. Previously, these operations were maintained by the city governments on an individual or collective
basis. The MWCC merged with the Metropolitan Council during 1994 to form Metropolitan Council Wastewater
Services (MCWS) and is now called the Metropolitan Council Environmental Services (MCES). The MCES bills
the City annually based upon estimated volume and budgeted costs. The City follows the accounting policy of
recognizing these charges as an expense of the sewer utility operation in the year for which they are billed.
Note 8 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY
A. Deficit Fund Balances
The City has deficit fund balances at December 31, 2012 as follows:
Fund Balance
Deficit
Dedicated Parks $ (495,592)
Tax Increment Financing 1 -11 (763,593)
G.O. Improvement Bonds 2005A (2,003,261)
Improvement Bonds of 2012A (282)
The City intends to fund these deficits through future tax levies, special assessment levies, tax increments,
transfers from other funds, and various other sources.
52
Imo
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 8 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY (CONTINUED)
B. Expenditures in Excess of Budget
The following is a listing of expenditure categories that exceed budget appropriations for non -major funds:
Budget
Actual Excess
Program Recreation Special Revenue Fund:
Supplies $ 48,815 $ 108,631 $ (59,816)
Note 9 CONTINGENCIES
Tax Increment Districts — The City's tax increment districts are subject to review by the State of Minnesota Office
of the State Auditor (OSA). Any disallowed claims or misuse of tax increments could become a liability of the
applicable fund. Management has indicated that they are not aware of any instances of noncompliance which could
have a material effect on the financial statements.
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, 2012.
Litigation — The City, in connection with the normal conduct of its affairs, is involved in various claims, judgments,
and litigation. As of December 31, 2012 any potential affect this may have on the City is not estimable, however it
is not expected to have a material effect on the financial statements of the City.
Note 10 DEFERRED AD VALOREM TAX LEVIES - BONDED DEBT
General Obligation bond issues sold by the City are financed by ad valorem tax levies and special assessment bond
issues sold by the City are partially financed by ad valorem tax levies in addition to special assessments levied
against the benefiting properties. When a bond issue to be financed partially or completely by ad valorem tax levies
is sold, specific annual amounts of such tax levies are stated in the bond resolution and the County Auditor is
notified and instructed to levy these taxes over the appropriate years. The future tax levies are subject to
cancellation when and if the City has provided alternative sources of financing. The City Council is required to levy
any additional taxes found necessary for full payment of principal and interest.
These future scheduled tax levies are not shown as assets in the accompanying financial statements at December 31,
2012.
Future scheduled tax levies for all bonds outstanding at December 31, 2012 totaled $16,527,862.
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 11 FUND BALANCE
At December 31, 2012, the City had various fund balances restricted, committed, or assigned through legal
restriction and City Council authorization. Major fund balance appropriations at December 31, 2012 are shown on
the various balance sheets as segregations of the fund balance. The fund balances are as follows:
Total Nonspendable Restricted Committed Assigned Unassigned
General Fund: $ 5,053,031 S - $ 5 - $ S 5,053,031
Prepaid items 180,786 180,786 - -
Total General Fund 5,233,817 180,786 - - 5,053,031
G.O. Improvement Bonds 2005A:
Deficit Fund Balance (2,003,261) - - (2,003,261)
Improvement Bonds 2009F:
Debt Service 491 491
Municipal State Aid:
Construction Projects 5,037,136 - 5,037,136
Traffic Control:
Construction Projects 463,247 - 463,247
Area and Unit Charge:
Advances to Other Funds 496,000 496,000 - -
Construction Projects 3,476,716 - - 3,476,716 -
Total Area and Unit Charge 3,972,716 496,000 - 3,476,716 -
Nonmajor Governmental Funds:
Prepaid items 2,113 2,113 - -
Long -term Loan Receivable 225,000 225,000
Corpus of Permanent Fund 100,000 100,000 -
Program Recreation 115,196 - 115,196
Environmental Improvements 10,536 - 10,536 -
Debt Service 3,030,497 - 3,030,497
Construction Projects 6,596,080 - 6,596,080
Deficit Fund Balance (1,259,467) - - (1,259,467)
Total Nonmajor Funds 8,819,955 327,113 3,041,033 115,196 6,596,080 (1,259,467)
Total Fund Balances $ 21,524,101 S 1,003,899 $ 3,041,524 5 115,196 $ 15,573,179 $ 1,790,303
Note 12 SHARE IN GAS FRANCHISE PROFITS
The City receives a share of the gross billing for natural gas sales by a neighboring City, which provides service
within the City of Lino Lakes. The amount reported as revenue in the General Fund during fiscal year 2012 was
$46,178.
Note 13 INTERFUND RECEIVABLE AND PAYABLES
The purpose of the interfund receivable and payable balances is for the elimination of negative cash between funds
and at December 31, 2012 are as follows:
Governmental Activity:
G.O. Improvement Bonds 2005A
Other Nonmajor Governmental Funds
Business -Type Activity:
Sewer Fund
54
Receivable Payable
2,366,768
559,110
$ 2,925,878
$ 2,162,003
763,875
2,925,878
bow
MINN
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 13 INTERFUND RECEIVABLE AND PAYABLES (CONTINUED)
Interfund receivable and payable balances not expected to be repaid within one year are reported as advances to and
from other fund and at December 31, 2012 are as follows:
Receivable Payable
Governmental Activity:
Area and Unit Charge $ 496,000 $
Other Nonmajor Governmental Funds
496,000
$ 496,000 $ 496,000
The purpose of the advance from the Area and Unit Charge Fund is to temporarily finance projects in the Dedicated
Parks Fund.
Note 14 INTERFUND TRANSFERS
Individual fund transfers for fiscal year 2012 are as follows:
Transfer In Transfer Out
Governmental Activity:
General Fund $ $ (842,250)
G.O. Improvement Note 2009A 159,000
Improvement Bonds of 2009F 46,543
Area and Unit Charge (455,616)
Municipal State Aid (368,569)
Other Nonmajor Governmental Funds 1,773,914 (244,000)
Total Governmental Activity 1,979,457 (1,910,435)
Business -Type Activity:
Water Fund (34,511)
Sewer Fund (34,511)
Total Business -Type Activity (69,022)
Total $ 1,979,457 $ (1,979,457)
Interfund transfers are other financing sources and uses within the fund financial statements. The purpose of the
transfers is to provide funding for capital improvement projects, capital outlay, and debt service as well as to open
and close funds.
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.
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 15 RISK MANAGEMENT (CONTINUED)
Property and casualty insurance is provided through a pooled self - insurance program through the LMCIT. The City
pays an annual premium to the LMCIT. The City is subject to supplemental assessments if deemed necessary by the
LMCIT. The LMCIT reinsures through commercial companies for claims in excess of various amounts. The City
retains risk for the deductible portion of the insurance policies and for any exclusions from the insurance policies.
These amounts are considered immaterial to the financial statements.
The City continues to carry commercial insurance for all other risks of loss, including disability and employee
health insurance.
There were no significant reductions in insurance from the previous year or settlements in excess of insurance
coverage for any of the past three fiscal years.
Note 16 CONDUIT DEBT OBLIGATIONS
The City has issued Industrial Development Revenue Bonds and Commercial Revenue Notes to provide financial
assistance to private- sector entities for the acquisition and construction of industrial and commercial facilities which
are deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from
payments on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities
transfers to the private sector entity served by the bond issue. The City is not obligated in any manner for the
repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial
statements. As of December 31, 2012, one series of Industrial Revenue Bonds was outstanding with an aggregate
remaining principal balance of $655,000, and one series of Commercial Revenue Notes was outstanding with an
aggregate remaining principal balance of $2,386,656.
Note 17 LEASE COMMITMENT
The City of Lino Lakes entered into an agreement dated December 8, 1997 to lease space within the City Hall
complex to the Independent School District No. 12 (ISD 12). The lease term was renewed as of July 1, 2009 and
continued through June 30, 2011 and required payments of $110 per square foot over the lease term for a total of
$300,000. Effective February 14, 2011, the lease was further renewed through June 30, 2012 and required two
payments of $60,000 semi annually. This lease was not renewed when it was expired on June 30, 2012.
The prorated carrying value of the building being leased is as follows:
Building $ 929,970
Less: Accumulated Depreciation (402,987)
Net $ 526,983
Note 18 JOINT VENTURES
Fire
The Centennial Fire District (the District) was established under a joint powers agreement between the City of Lino
Lakes and two other cities. The general purpose of the District is to provide fire protection services including, but
not limited to, fire prevention, firefighting and rescue service. Each member city is entitled to appoint two
commissioners to the District's Board.
56
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 18 JOINT VENTURES (CONTINUED)
Fire (Continued)
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 2012, the City of Lino Lakes' contributions to the District were as follows:
Operating $ 542,779
Capital 86,627
Total $ 629,406
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, 2011 (the most recent information
available) are as follows:
Total Assets $ 1,524,597
Total Liabilities 109,106
Total Net Position 1,415,491
Total Operating Revenue 923,222
Total Operating Expenses 818,638
Anoka County
The City of Lino Lakes has a joint powers agreement with Anoka County for the reconstruction of County State Aid
Highway 14 (Main Street) and I -35E Interchange County Project.
Note 19 OTHER POSTEMPLOYMENT BENEFIT PLAN
At December 31, 2008, the City adopted Governmental Accounting Standards Board (GASB) Statement No. 45,
Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions. The City
engaged an actuary to determine the City's liability for postemployment healthcare benefits other than pensions as
of January 1, 2011.
A. Plan Description
The City provides benefits for retirees as required by Minnesota Statute §471.61 subdivision 2b. Active
employees, who retire from the City when over age 50 and with 20 years of service, may continue
coverage with respect to both themselves and their eligible dependent(s) under the City's health benefits
program until age 65. Pursuant to the provisions of the plan, retirees are required to pay the total premium
cost. As of December 31, 2012 there were approximately 49 active participants and 7 retired participants
receiving benefits from the City's health plans.
B. Funding Policy
The City funds its OPEB obligation on a pay as you go basis. For fiscal year 2012, the City contributed
$24,597 to the plan.
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 19 OTHER POSTEMPLOYMENT BENEFIT PLAN (CONTINUED)
C. Annual OPEB Cost and Net OPEB Obligation
The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual
required contribution (ARC), an amount actuarially determined in accordance with the parameters of
GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected
to cover normal cost each year and amortize any un- funded actuarial liabilities over a period not to exceed
thirty years. The following table shows the components of the City's annual OPEB cost for the year, the
amount actually paid from the plan, and changes in the City's net OPEB obligation.
Annual Required Contribution $ 29,449
Interest on Net OPEB Obligation 1,456
Adjustment to Annual Required Contribution (1,295)
Annual OPEB Cost (Expense) 29,610
Contributions Made (24,597)
Increase in Net OPEB Obligation 5,013
Net OPEB Obligation- Beginning of Year 72,808
Net OPEB Obligation- End of Year $ 77,821
The City's annual OPEB cost, the percentage of the annual OPEB cost contributed to the plan, and the net
OPEB obligation for 2012:
Percentage
Fiscal Annual of Annual Net
Year OPEB OPEB Cost OPEB
Ended Cost Contributed Obligation
12/31/2010 $ 40,404 51.1% $ 63,287
12/31/2011 27,917 65.9% 72,808
12/31/2012 29,610 65.2% 77,821
D. Funded Status and Funding Progress
As of January 1, 2011, the most recent actuarial valuation date, the City's unfunded actuarial accrued
liability (UAAL) was $474,770. The annual payroll for active employees covered by the plan in the
actuarial valuation was $4,953,560 for a ratio of UAAL to covered payroll of 9.6 %.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future employment, mortality, and healthcare cost trends. Amounts determined
regarding the funded status of the plan and the annual required contributions of the employer are subject to
continual revision as actual results are compared with past expectations and new estimates are made about
the future. The schedule of funding progress, presented as required supplementary information following
the notes to the financial statements, presents multiyear trend information about whether the actuarial value
of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
58
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Note 19 OTHER POSTEMPLOYMENT BENEFIT PLAN (CONTINUED)
a
E. Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and plan members) and include the types of benefits provided at the time of
_
each valuation and the historical pattern of sharing of benefit costs between the employer and plan
members to that point. The actuarial methods and assumptions used include techniques that are designed to
reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets,
.► consistent with the long -term perspective of the calculations.
In the January 1, 2011 actuarial valuation, the projected unit credit actuarial cost method was used. The
actuarial assumptions included a 2% inflation rate, a 2% investment rate of return (net of administrative
expenses), which is a blended rate of the expected long -term investment returns on plan assets and on the
employer's own investments calculated based on the funded level of the plan at the valuation date. The
initial healthcare trend rate was 0 %, increasing to an ultimate rate of 4% after three years. The UAAL is
being amortized as a level percentage of projected payrolls on an open basis. The remaining amortization
period at December 31, 2012 was not to exceed 30 years.
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 2012
Statement 11
Page 1 of 6
2012
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Revenue:
General property taxes:
Current and delinquent $ 7,332,818 $ 6,302,618 $ 6,187,579 $ (115,039)
Fiscal disparities - 1,030,200 995,230 (34,970)
Excess tax increments 635 635
Total general property taxes 7,332,818 7,332,818 7,183,444 (149,374)
Licenses and permits:
Business 82,400 88,900 88,921 21
Non - business 334,500 237,500 230,251 (7,249)
Total licenses and permits 416,900 326,400 319,172 (7,228)
Intergovernmental:
State:
Market Value Credit 4,594 4,594
Police state aid 185,000 185,000 163,311 (21,689)
MSA maintenance 200,000 218,000 218,473 473
Other 54,051 54,051 15,478 (38,573)
County/Regional:
Solid waste 35,000 35,000 40,870 5,870
Other 4,000 30,000 19,297 (10,703)
Total intergovernmental 478,051 522,051 462,023 (60,028)
Special Assessments:
Penalties and Interest 10,000 10,000 33,358 23,358
Charges for services:
General government 18,400 18,400 19,244 844
Planning /engineering 8,000 8,000 6,409 (1,591)
Fees retained from collection for
other governments - SAC /surcharge 1,000 1,000 973 (27)
Administrative charge - other funds 50,000 50,000 50,000
Aerial map charge - other funds 3,000 10,000 10,530 530
Public safety 221,500 171,500 222,621 51,121
Total charges for services 301,900 258,900 309,777 50,877
Fines and forfeits 135,000 155,000 155,956 956
Investment earnings 40,000 40,000 38,603 (1,397)
Refunds 20,000 40,000 58,416 18,416
Miscellaneous:
Gas franchise fees 110,000 55,000 46,178 (8,822)
Cable TV 48,750 48,750 48,824 74
Donations 5,000 5,000 2,910 (2,090)
Other 1,000 5,500 6,907 1,407
Total miscellaneous 164,750 114,250 104,819 (9,431)
Total Revenue 8,899,419 8,799,419 8,665,568 (133,851)
60
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 2012
2012
Statement 11
Page 2 of 6
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Expenditures:
General government:
Mayor and council:
Current:
Personal services $ 40,566 $ 40,566 $ 32,011 $ 8,555
` Other services and charges 30,500 25,500 17,151 8,349
Contractual Services 14,752 14,752 14,962 (210)
Total mayor and council 85,818 80,818 64,124 16,694
'- Elections:
Current:
Personal services 17,620 17,620 17,367 253
Supplies 650 650 776 (126)
Other services and charges 4,375 1,375 950 425
Contractual Services 500 500 97 403
Total elections 23,145 20,145 19,190 955
_
Administration:
Current:
Personal services 366,983 366,983 352,377 14,606
Supplies - 221 (221)
Other services and charges 16,500 13,500 17,211 (3,711)
Contractual Services 5,210 5,210 5,838 (628)
wow Capital outlay 7,698 7,698 7,698
Total administration 396,391 393,391 375,647 17,744
Finance:
,,, Current:
Personal services 300,547 280,547 286,831 (6,284)
Supplies 1,200 1,200 317 883
Other services and charges 107,325 107,325 103,440 3,885
Contractual Services 102,900 98,900 98,481 419
Total finance 511,972 487,972 489,069 (1,097)
Cable TV:
Current:
Personal services 2,165 2,165 1,615 550
Supplies 50 50 - 50
Capital outlay 500 500 369 131
Total cable TV 2,715 2,715 1,984 731
Consultants:
Current:
Legal 140,000 150,000 137,273 12,727
61
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 2012
2012
Statement 11
Page 3 of 6
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
General government (continued):
Engineering /planning:
Current:
Contractual services $ 106,400 $ 86,400 $ 83,390 $ 3,010
Capital outlay 8,500 8,500 7,247 1,253
Total engineering /planning 114,900 94,900 90,637 4,263
Charter commission:
Current:
Other services and charges 1,500 1,500 1,486 14
General government buildings:
Current:
Personal services 3,683 3,683 4,396 (713)
Supplies 28,000 43,000 43,597 (597)
Other services and charges 304,880 321,880 323,374 (1,494)
Contractual services 65,692 65,692 65,079 613
Total general government buildings 402,255 434,255 436,446 (2,191)
Total general government 1,678,696 1,665,696 1,615,856 49,840
Public safety:
Police:
Current:
Personal services 2,952,323 2,924,823 2,977,037 (52,214)
Supplies 34,600 34,600 25,638 8,962
Other services and charges 81,098 88,598 86,218 2,380
Contractual services 36,772 36,772 31,946 4,826
Capital outlay 28,800 20,800 20,417 383
Total police 3,133,593 3,105,593 3,141,256 (35,663)
Fire protection:
Current:
Contractual services 542,779 542,779 542,779
Building inspection:
Current:
Personal services 197,633 197,633 194,971 2,662
Supplies 1,070 1,070 279 791
Other services and charges 12,420 3,420 2,282 1,138
Contractual services 1,000 1,000 115 885
Total building inspection 212,123 203,123 197,647 5,476
Total public safety 3,888,495 3,851,495 3,881,682 (30,187)
62
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 2012
2012
Statement 11
Page 4 of 6
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Public works:
Streets:
Current:
Personal services $ 536,270 $ 536,270 $ 526,718 $ 9,552
Supplies 118,500 109,500 84,815 24,685
Other services and charges 102,060 102,060 101,406 654
Contractual services 172,275 162,275 122,385 39,890
Total streets 929,105 910,105 835,324 74,781
Fleet:
Current:
Personal services 97,654 97,654 98,694 (1,040)
Supplies 224,000 224,000 245,384 (21,384)
Other services and charges 54,880 47,880 45,553 2,327
Contractual services 2,700 2,700 1,910 790
Total fleet 379,234 372,234 391,541 (19,307)
Total public works 1,308,339 1,282,339 1,226,865 55,474
Parks and recreation:
Parks:
Current:
Personal services 459,080.00 459,080.00 466,407.00 (7,327.00)
Supplies 26,500 26,500 31,652 (5,152)
Other services and charges 51,920 59,420 60,125 (705)
Contractual services 35,850 35,850 33,267 2,583
Total parks 573,350 580,850 591,451 (10,601)
-,, Recreation:
Current:
Personal services 268,280 268,280 259,431 8,849
Supplies 2,500 2,500 3,065 (565)
Other services and charges 16,600 16,600 13,559 3,041
Contractual services 800 800 562 238
Total recreation 288,180 288,180 276,617 11,563
Total parks and recreation
861,530 869,030 868,068 962
63
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 2012
2012
Statement 11
Page 5 of 6
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Conservation of natural resources:
Forestry:
Current:
Personal services $ 33,292 $ 33,292 $ 32,942 $ 350
Supplies 1,250 1,250 47 1,203
Other services and charges 400 400 341 59
Contractual services 5,500 5,500 3,190 2,310
Capital outlay 5,000 5,000 6,250 (1,250)
Total forestry 45,442 45,442 42,770 2,672
Environmental:
Current:
Personal services 50,325 63,325 61,912 1,413
Supplies 1,400 1,400 1,197 203
Other services and charges 8,750 8,750 5,141 3,609
Contractual services 1,450 1,450 2,160 (710)
Total environmental 61,925 74,925 70,410 4,515
Solid waste abatement:
Current:
Personal services 28,926 28,926 29,689 (763)
Supplies - - 321 (321)
Other services and charges 550 550 361 189
Contractual services 6,000 12,000 28,557 (16,557)
Total solid waste abatement 35,476 41,476 58,928 (17,452)
Total conservation of natural resources 142,843 161,843 172,108 (10,265)
64
CITY OF LINO LAKES, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 2012
AIMS
Imar
Community Development:
Community Development:
Current:
Personal services
�.- Supplies
Other services and charges
Contractual Services
Total community development
Economic Development:
Current:
Personal services
Supplies
Other services and charges
Contractual services
Total economic development
Planning and zoning commission:
Current:
Personal services
Supplies
Other services and charges
Contractual services
Total planning and zoning commission
Statement 11
Page 6 of 6
2012
Original
Budget
Final
Budget
Variance with
Final Budget
Positive
Actual (Negative)
$ 189,653 $ 189,653 $ 190,145 $ (492)
100 100 100
8,500 8,500 4,877 3,623
1,400 1,400 2,115 (715)
199,653 199,653 197,137 2,516
90,008
150
44,500
400
135,058
95,138
250
18,000
22,350
135,738
Total community development 470,449
Other :
Contingency
Total Expenditures
Revenue over Expenditures
Other financing sources (uses):
Transfer out
Net increase (decrease) in fund balance
Fund Balance - January 1
Fund balance - December 31
75,000
8,425,352
474,067
90,008
150
40,500
400
131,058
89,896
48,739
570
139,205
75,138 73,975
250 182
13,000 7,719
22,350 11,884
110,738 93,760
441,449 430,102
53,500
8,325,352 8,194,681
474,067 470,887
(742,250) (842,250)
$ (268,183) $ (368,183)
65
112
150
(8,239)
(170)
(8,147)
1,163
68
5,281
10,466
16,978
11,347
53,500
130,671
(3,180)
(842,250)
(371,363) $ (3,180)
5,605,180
$ 5,233,817
CITY OF LINO LAKES, MINNESOTA
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2012
Note 1 BUDGETS
The General Fund budget is legally adopted on a basis consistent with U.S. Generally Accepted Accounting Principles.
The legal level of budgetary control is at the department level. The following is a listing of expenditures that exceeded
budget appropriations.
Final
Budget
Actual
Actual in
Excess of
Budget
General Fund:
General government:
Finance: $ 487,972 $ 489,069 $ (1,097)
General government buildings: 434,255 436,446 (2,191)
Public safety
Police 3,105,593 3,141,256 (35,663)
Public works:
Fleet 372,234 391,541 (19,307)
Parks and recreation:
Parks 580,850 591,451 (10,601)
Conservation of natural resources:
Solid waste abatement 41,476 58,928 (17,452)
Community development:
Economic Development: 131,058 139,205 (8,147)
66
CITY OF LINO LAKES, MINNESOTA
SCHEDULE OF FUNDING PROGRESS FOR POSTEMPLOYMENT BENEFIT PLAN
December 31, 2012
Statement 12
Actuarial UAAL as a
Actuarial Accrued Percentage
Actuarial Value of Liability Unfunded Funded Covered of Covered
Valuation Assets (AAL) AAL Ratio Payroll Payroll
Date (a) (b) (b -a) (alb) (c) ((b -a) /c)
1/1/2008 $ $ 329,191 $ 329,191 $ 4,859,980 6.8%
1/1/2011 474,770 474,770 - 4,953,560 9.6%
67
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 four 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.
Revenue Bonds - These bonds were issued to finance various improvements and will be repaid
primarily from pledged revenues derived from the constructed assets.
Capital Project Funds
Capital Project Funds account for the acquisition or construction of major capital facilities other than those
financed by Proprietary Funds and Trust Funds. The City maintained the following nonmajor Capital Project
Funds during the year:
Capital Improvement Projects - to account for the proceeds from Equipment Certificates.
Capital Equipment Revolving Fund - to account for funds held to purchase capital equipment.
Closed Bond Fund - to account for excess funds from matured bond issues.
Street Reconstruction - to account for the financing of future reconstruction of City streets.
Sealcoating - to account for money received from assessments and developer deposits for future street
sealcoating projects.
Surface Water Management - to account for the financing of surface water management and storm water
improvements.
Birch Street Hodgson Road Improvement Fund - to account for costs to improve the intersection at Birch
Street and Hodgson Road.
Tax Increment Funds - to account for development projects financed with tax increments.
Nonmajor Governmental Funds (Continued)
Capital Project Funds (Continued)
Dedicated Parks - to account for the receipts and use of monies collected from dedicated parks fees.
I35E Interschange Fund - to account for activity related to the I35E /CSAH 14 Interchange Reconstruction
Project.
Office Equipment Revolving Fund - to account for the receipt and use of funds for office equipment
purchases.
Legacy Woods Edge Improvement Fund - the Legacy Woods Edge Improvement fund accounts for
construction costs related to infrastructure improvements in the Legacy Woods Edge development.
Permanent Funds
Permanent Funds are used to report resources that are legally restricted to the extent that only earnings, and not
principal, may be used for purposes that support the City's programs. The City maintained the following
nonmajor Permanent Fund during the year.
Foxborough Environment Fund - established to account for the use of funds received for environmental
maintenance and improvements in the Foxborough area.
CITY OF LINO LAKES, MINNESOTA
COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS
December 31, 2012
Special Revenue Debt Service
Economic Special Certificates Improvement Improvement
Development Program Revenue of Bonds of Bonds of
Authority Recreation Subtotal Indebtedness 2002A 2002B
Assets
Cash and investments $ - $ 123,343 $ 123,343 $ 143,490 $ 212,835 $ 342,581
Accounts receivable - 953 953
Due from other governmental units
Interfund receivable
Taxes receivable:
Delinquent - 7,686
Due from county - 1,991
Special assessments receivable:
Delinquent
Deferred 45,497
Due from county - 345
Long -term notes receivable 225,000 225,000
Prepaid items - 2,113 2,113
Total assets $ 225,000 $ 126,409 $ 351,409 $ 153,167 $ 258,677 $ 342,581
Liabilities and Fund Balance (Deficit)
Liabilities:
Interfund payable $ - $ $
Accounts payable 3,472 3,472
Salaries payable 249 249
Contracts and retainage payable -
Due to other governments
Advances from other funds
Deferred revenue - 5,379 5,379
Total liabilities - 9,100 9,100
$ - $
7,686 45,497
7,686 45,497
Fund balance (deficit):
Nonspendable 225,000 2,113 227,113 - -
Restricted - - - 145,481 213,180 342,581
Committed - 115,196 115,196 - -
Assigned - - -
Unassigned
Total fund balance (deficit) 225,000 117,309 342,309 145,481 213,180 342,581
Total liabilities and fund balance (deficit) $ 225,000 $ 126,409 $ 351,409 $ 153,167 $ 258,677 $ 342,581
68
4-
OMNI
Statement 13
Page 1 of 3
Debt Service (Continued)
Improvement
Refunding
Bonds of
2003A
Tax Utility CIP
Improvement Improvement Abatement Revenue Refunding
Bonds of Bonds of Bonds Bonds Bonds
2003B 2005B 2006C 2006D 2006E
$ 595,880 $ 56,717 $ 405,931 $ 187,264 $ 83,405 $ 814,525
775 4,602 6,699 - 12,996
- 181 1,157 1,902 - 3,425
4,104 6,183 334 5,680
102,954 27,971 123,932 120,327
- - 1,423 - -
$ 702,938 $ 91,827 $ 537,379 $ 195,865 $ 209,412 $ 830,946
$
107,058
107,058
34,929
34,929
$
128,868 6,699 126,007
128,868 6,699 126,007
12,996
12,996
595,880 56,898 408,511 189,166 83,405 817,950
595,880 56,898 408,511 189,166 83,405 817,950
$ 702,938 $ 91,827 $ 537,379 $ 195,865 $ 209,412 $ 830,946
CITY OF LINO LAKES, MINNESOTA
COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS
December 31, 2012
Assets
Cash and investments
Accounts receivable
Due from other governmental units
Interfund receivable
Taxes receivable:
Delinquent
Due from county
Special assessments receivable:
Delinquent
Deferred
Due from county
Long -term notes receivable
Prepaid items
Total assets
Liabilities and Fund Balance (Deficit)
Liabilities:
Interfund payable
Accounts payable
Salaries payable
Contracts and retainage payable
Due to other governments
Advances from other funds
Deferred revenue
Total liabilities
Fund balance (deficit):
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total fund balance (deficit)
Total liabilities and fund balance (deficit)
Debt Service (continued)
TIF
Bonds
2007A
Improvement and
Utility Revenue
Refunding Bonds
2010
Improvement
Bonds of
2012A
$ 153,628 $ 23,817 $
8,158
108,151
$ 153,628 $
153,628
Debt
Service
Subtotal
Capital Projects
Capital
Improvement
Projects
Capital
Equipment
Revolving Fund
- $ 3,020,073 $ 592,753 $ 94,997
- - 2,028 8,214
- - 1,602,893
32,758
8,656
24,459
528,832
1,768
140,126 $ - $ 3,616,546 $ 2,197,674 $ 103,211
$ - $ 282 $
116,309
116,309 282
23,817
153,628 23,817
282 $ $ -
- 290 14,917
586,049
586,331
3,030,497
(282) (282)
290 14,917
2,197,384 88,294
(282) 3,030,215 2,197,384 88,294
$ 153,628 $ 140,126 $ - $ 3,616,546 $ 2,197,674 $ 103,211
70
OEM
Statement 13
Page 2 of 3
Capital Projects
Tax
Closed Surface Birch Street Increment
Bond Street Water Hodgson Road Financing
Fund Reconstruction Sealcoating Management Improvement 1 -5
$ 666,071 $ 608,173 $ 477,527 $ 407,977 $ 15,738 $ 99,456
- - 1,500 -
763,875 - - -
59 -
1,172 - 16,956
1,572 126,021 128,053
3,001
$ 1,432,749 $ 734,194 $ 477,527 $ 557,487 $ 15,738 $ 99,456
$
2,880
2,744 126,021 145,008
2,744 126,021 2,880 145,008
1,430,005 608,173 474,647 412,479 15,738
99,456
1,430,005 608,173 474,647 412,479 15,738 99,456
$ 1,432,749 $ 734,194 $ 477,527 $ 557,487 $ 15,738 $ 99,456
CITY OF LINO LAKES, MINNESOTA
COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS
December 31, 2012
Assets
Cash and investments
Accounts receivable
Due from other governmental units
Interfund receivable
Taxes receivable:
Delinquent
Due from county
Special assessments receivable:
Delinquent
Deferred
Due from county
Long -term notes receivable
Prepaid items
Total assets
Liabilities and Fund Balance (Deficit)
Capital Projects (continued)
Tax Tax Office
Increment Increment Equipment Legacy Woods
Financing Financing Dedicated I35E Revolving Edge
1 -10 1 -11 Parks Interchange Fund Improvement
$ 189,274 $
$ 408 $ 274,525 $
264,621 $ 554,416
$ 189,274 $ - $ 408 $ 274,525 $ 264,621 $ 554,416
Liabilities:
Interfund payable $ $ 763,593 $ $ $ $
Accounts payable - 12,932
Salaries payable
Contracts and retainage payable
Due to other governments -
Advances from other funds 496,000
Deferred revenue -
Total liabilities 763,593 496,000 12,932
Fund balance (deficit):
Nonspendable
Restricted
Committed - -
Assigned 189,274 - 274,525 251,689 554,416
Unassigned - (763,593) (495,592) - - -
Total fund balance (deficit) 189,274 (763,593) (495,592) 274,525 251,689 554,416
Total liabilities and fund balance (deficit) $ 189,274 $ - $ 408 $ 274,525 $ 264,621 $ 554,416
72
Ara
Statement 13
Page 3 of 3
Capital Projects Permanent
(Continued) Fund
Capital Foxborough
Projects Environment
Subtotal Fund
Total
2012
$ 4,245,936 $ 110,536 $ 7,499,888
10,242 - 11,195
1,500 1,500
2,366,768 - 2,366,768
32,758
59 - 8,715
18,128 - 42,587
255,646 784,478
3,001 - 4,769
225,000
2,113
6,901,280 $ 110,536 $ 10,979,771
763,593
31,019
496,000
273,773
1,564,385
763,875
34,491
249
496,000
865,201
2,159,816
100,000 327,113
10,536 3,041,033
115,196
6,596,080 6,596,080
(1,259,185) (1,259,467)
5,336,895 110,536 8,819,955
$ 6,901,280 $ 110,536 $ 10,979,771
73
CITY OF LINO LAKES, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS
Year Ended December 31, 2012
Special Revenue Debt Service
Economic Special Certificates Improvement Improvement
Development Program Revenue of Bonds of Bonds of
Authority Recreation Subtotal Indebtedness 2002A 2002B
Revenue:
General property taxes $ $ - $ - $ 234,680 $ $
Tax increments - -
Intergovernmental - - -
Special assessments - - - 347 15,378 114,075
Charges for services 191,835 191,835 - -
Investment earnings - 1,445 1,445 1,730 2,031 2,940
Refunds - - - -
Miscellaneous -
Total revenue - 193,280 193,280 236,757 17,409 117,015
Expenditures:
Current:
General government - - -
Public works - -
Parks, recreation and forestry 188,908 188,908
Conservation of natural resources - -
Community development
Capital outlay:
General government - -
Public safety
Public works - -
Debt service:
Principal - 215,000 30,000 250,000
Interest and fiscal charges - 9,380 2,521 22,086
Bond Issuance Costs - - - -
Total expenditures 188,908 188,908 224,380 32,521 272,086
Revenue over (under) expenditures
Other financing sources (uses):
Transfer in
Transfer out
Sale of property
Issuance of debt
Total other financing
sources (uses)
4,372 4,372 12,377 (15,112) (155,071)
Net increase (decrease) in fund balance 4,372 4,372 12,377 (15,112) (155,071)
Fund balance (deficit) -
Beginning of year 225,000 112,937 337,937 133,104 228,292 497,652
Fund balance (deficit) - December 31 $ 225,000 $ 117,309 $ 342,309 $ 145,481 $ 213,180 $ 342,581
74
Statement 14
Page 1 of 3
Debt Service (Continued)
Improvement Tax Utility CIP
Refunding Improvement Improvement Abatement Revenue Refunding
Bonds of Bonds of Bonds of Bonds Bonds Bonds
2003A 2003B 2005B 2006C 2006D 2006E
25,886
1,506
$ 20,242 $ 134,465 $ 233,473 $
$ 466,907
2,973 64,727 271 16,186 576
447 608 200 5,543
27,392 23,662
199,192 234,352
16,386 473,026
60,000 30,000 420,000 85,000 55,000 320,000
20,969 4,389 72,038 101,211 14,714 98,490
3,325 - - - - -
84,294 34,389 492,038 186,211 69,714 418,490
(56,902) (10,727) (292,846) 48,141 (53,328) 54,536
80,538 - 375,078 69,022
425,000
505,538 375,078 69,022
448,636 (10,727) 82,232 48,141 15,694 54,536
147,244 67,625 326,279 141,025 67,711 763,414
$ 595,880 $ 56,898 $ 408,511 $ 189,166 $ 83,405 $ 817,950
CITY OF LINO LAKES, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS
Year Ended December 31, 2012
Revenue:
General property taxes
Tax increments
Intergovernmental
Special assessments
Charges for services
Investment earnings
Refunds
Miscellaneous
Total revenue
Expenditures:
Current:
General government
Public works
Parks, recreation and forestry
Conservation of natural resources
Community development
Capital outlay:
General government
Public safety
Public works
Debt service:
Principal
Interest and fiscal charges
Bond Issuance Costs
Total expenditures
Debt Service (Continued)
Capital Projects
TIF
Bonds
2007A
265,000
142,718
407,718
Revenue over (under) expenditures (407,718)
Other financing sources (uses):
Transfer in 407,026
Transfer out -
Sale of property
Issuance of debt
Total other financing
sources (uses)
Net increase (decrease) in fund balance
Fund balance (deficit) -
Beginning of year
Fund balance (deficit) - December 31
Improvement and
Utility Revenue
Refunding Bonds
2010
21,648
Improvement
Bonds of
2012A
Debt
Service
Subtotal
Capital
Improvement
Projects
$ - $ 1,089,767 $
282 658
262,067
15,945
21,930 658 1,367,779
85,000
24,085
109,085
32,596
32,596
1,815,000
512,601
35,921
2,363,522
(87,155) (31,938) (995,743)
931,664
31,656 456,656
407,026 - 31,656 1,388,320
(692) (87,155) (282) 392,577
154,320 110,972
9,890
206,462
216,352
2,418
32,391
34,809
181,543
181,543
Capital
Equipment
Revolving Fund
2,210
4,792
7,002
229,976
277,166
507,142
(500,140)
250,000
4,175
150,000
404,175
(95,965)
2,637,638 2,015,841 184,259
$ 153,628 $ 23,817 $ (282) $ 3,030,215 $ 2,197,384 $ 88,294
76
Statement 14
Page 2 of 3
Capital Projects (Continued)
Closed Surface Birch Street Tax Increment
Bond Street Water Hodgson Road Financing
..-
Fund Reconstruction Sealcoating Management Improvement 1 -5
$ 435 $ $ - $ - $ $
39,366
3,952 15,116 71,575
13,326 5,854
7,325
39,599
3,660
155 697
17,713 20,970 46,924 75,235 155 40,063
8,557
502,767 30,190
8,557 502,767
630
30,190 630
•- 9,156 20,970 (455,843) 45,045 155 39,433
467,250
467,250
9,156 20,970 11,407 45,045 155 39,433
1,420,849 587,203 463,240 367,434 15,583 60,023
$ 1,430,005 $ 608,173 $ 474,647 $ 412,479 $ 15,738 $ 99,456
CITY OF LINO LAKES, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS
Year Ended December 31, 2012
Capital Projects (Continued)
Office
Tax Increment Tax Increment Equipment
Financing Financing Dedicated I35E Revolving
1 -10 1 -11 Parks Interchange Fund
Revenue:
General property taxes $ $ - $ - $ $
Tax increments 158,448 88,880
Intergovernmental - 300,000
Special assessments
Charges for services - -
Investment earnings 2,293 - 4 2,648 2,712
Refunds - -
Miscellaneous
Total revenue 160,741 88,880 4 302,648 2,712
Expenditures:
Current:
General government:
Public works 21,281
Parks, recreation and forestry
Conservation of natural resources -
Community development 1,094 3,328
Capital outlay:
General government 43,115
Public safety
Public works
Debt service:
Principal
Interest and fiscal charges - 17,359 -
Bond Issuance Costs
Total expenditures 1,094 3,328 17,359 21,281 43,115
Revenue over (under) expenditures 159,647 85,552 (17,355) 281,367 (40,403)
Other financing sources (uses):
Transfer in 100,000 25,000
Transfer out (159,000) (85,000) -
Sale of property -
Issuance of debt
Total other financing
sources (uses) (159,000) (85,000) 100,000 25,000
Net increase (decrease) in fund balance 647 552 82,645 281,367 (15,403)
Fund balance (deficit) -
Beginning of year 188,627 (764,145) (578,237) (6,842) 267,092
Fund balance (deficit) - December 31 $ 189,274 $ (763,593) $ (495,592) $ 274,525 $ 251,689
78
Statement 14
Page 3 of 3
Permanent
Capital Projects (Continued) Fund
Legacy Woods Capital Foxborough
Edge Projects Environment Total
Improvement Subtotal Fund 2012
435 $ $ 1,090,202
286,694 286,694
300,000 300,000
90,643 352,710
191,835
5,437 56,211 1,115 74,716
39,599 39,599
211,254 211,254
5,437 984,836 1,115 2,547,010
10,975 10,975
554,238 554,238
188,908
10,460 10,460
5,052 5,052
- 43,115 - 43,115
262,367 262,367
- 277,166 - 277,166
- - 1,815,000
17,359 529,960
35,921
1,170,272 10,460 3,733,162
5,437 (185,436) (9,345) (1,186,152)
842,250 1,773,914
(244,000) (244,000)
4,175 4,175
150,000 606,656
752,425 2,140,745
5,437 566,989 (9,345) 954,593
548,979 4,769,906 119,881 7,865,362
$ 554,416 5,336,895 $ 110,536 8,819,955
79
CITY OF LINO LAKES, MINNESOTA
SPECIAL REVENUE FUND - PROGRAM RECREATION
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 2012
Statement 15
Revenue:
Charges for services:
Recreation Fees
Investment earnings
Total revenue
2012
Original Final
Budget Budget
Actual
Variance with
Final Budget
Positive
(Negative)
$ 174,150 $ 174,150 $ 191,835 $ 17,685
1,445 1,445
174,150 174,150 193,280 19,130
Expenditures:
Current:
Personal services 66,000 66,000 60,830 5,170
Supplies 48,815 48,815 108,631 (59,816)
Other services and charges 3,000 3,000 403 2,597
Contractual services 30,525 30,525 19,044 11,481
Capital outlay 2,000 2,000 2,000
Total expenditures 150,340 150,340 188,908 (38,568)
Net increase (decrease) in fund balance $ 23,810 $ 23,810 4,372 $ (19,438)
Fund balance - January 1 112,937
Fund balance - December 31 $ 117,309
80
Fiduciary Funds
VIM Agency Fund
Agency Funds are used to account for assets held by the City as an agent for individuals, private
organizations, or other governments. The City maintained the following Agency fund during the year:
Contractor's Deposits — to account for pass- through costs relating to prospective developers.
CITY OF LINO LAKES, MINNESOTA Statement 16
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES - FIDUCIARY FUNDS - AGENCY FUNDS
Year Ended December 31, 2012
Assets
Cash and investments
Liabilities
Deposits payable
Balance Balance
January 1, December 31,
2012 Additions Deductions 2012
$ 700,980 $ 282,553 $ 473,352 $ 510,181
$ 700,980 $ 282,553 $ 473,352 $ 510,181
81
SUPPLEMENTARY FINANCIAL INFORMATION
CITY OF LINO LAKES, MINNESOTA
COMBINED SCHEDULE OF INDEBTEDNESS
December 31, 2012
Interest
Rates
Dated
Final
Maturity
Date
General Obligation Bonds:
2009A Equipment Certificates 3.00% 4/1/2009 12/31/2012
2010A Equipment Certificates 2.00 % -3.00% 4/1/10 12/31/2013
2011A Equipment Certificates 1.00% 2/14/11 12/31/2014
2012A Equipment Certificates 1.00% 2/1/12 12/31/2015
G.O. Tax Abatement Bonds, Series 2006C 4.00 % -4.30% 8/15/06 2/1/23
G.O. Utility Revenue Bonds, Series 2006D 4.00 % -4.15% 8/15/06 2/1/17
G.O. CIP Refunding Bonds, Series 2006E 4.00% 11 /1 /06 2/1/18
G.O. Tax Increment Bonds, Series 2007A 4.00 % - 4.125% 7/15/2007 2/1/2024
G.O. Refunding Bonds, Series 2012A 1.00 % -2.00% 11/15/2012 2/1/2024
Total General Obligation Bonds
Special Assessment Bonds:
G. O. Improvement Bonds of 2002A
G. O. Improvement Bonds of 2002B
G. O. Improvement Refunding Bonds of 2003A
G. O. Improvement Bonds of 2003B
G. O. Improvement Bonds of 2005A
G. O. Improvement Refunding Bonds of 2005B
G.O. Improvement & Utility Revenue Refunding Bonds, Series 2010A
Total General Improvement Bonds with special assessments pledged
3.00 % -4.10% 8/1/02 2/1/13
3.20 % -5.55% 8/1/02 2/1/13
2.00 % -4.25% 12/1/03 2/1/19
3.20 % -5.60% 12/1/03 2/1/14
4.35 % -5.15% 11/1/05 2/1/21
3.75 % -5.00% 11/1/05 2/1/15
2.00 % -3.00% 7/9/10 2/1/20
Revenue Bonds:
G. O. Water Utility Revenue Refunding Bonds of 2006F 3.55 % - 3.625% 11/1/06 2/1/12
Total Revenue Bonds
Other Long -Term Debt:
Note Payable - Anoka County - 2009A
Total City indebtedness
82
4.00 % -3.70% 8/01/09 8/1/24
MENII
Exhibit 1
Prior Years
Original
Issue
Imo
Payments
Principal Interest
Payable 2012 Payable Due Due
1/1/12 Issued Payments 12/31/12 In 2013 In 2013
336,000 $ 218,000 $ 118,000 $ - $ 118,000 $ - $ $
.... 336,000 218,000 118,000 58,000 60,000 60,000 1,800
170,000 120,000 39,000 81,000 40,000 810
150,000 - 150,000 150,000 49,000 2,875
2,460,000 30,000 2,430,000 85,000 2,345,000 125,000 96,320
570,000 200,000 370,000 55,000 315,000 60,000 11,723
2,990,000 385,000 2,605,000 320,000 2,285,000 355,000 84,300
4,215,000 555,000 3,660,000 265,000 3,395,000 285,000 131,026
2,015,000 - 2,015,000 2,015,000 13,760
13,242,000 1,606,000 9,421,000 2,165,000 940,000 10,646,000 974,000 342,614
645,000 585,000 60,000 30,000 30,000 30,000 615
2,110,000 1,595,000 515,000 250,000 265,000 265,000 7,354
2,090,000 1,545,000 545,000 60,000 485,000 485,000 9,744
250,000 155,000 95,000 30,000 65,000 30,000 2,778
5,550,000 1,370,000 4,180,000 330,000 3,850,000 345,000 186,110
3,755,000 2,065,000 1,690,000 420,000 1,270,000 425,000 52,875
1,000,000 100,000 900,000 - 85,000 815,000 95,000 21,600
15,400,000 7,315,000 7,985,000 - 1,205,000 6,780,000 1,675,000 281,076
1,740,000 1,335,000
1,740,000 1,335,000
405,000 - 405,000
405,000 - 405,000
4,260,000 3,695,000
w $ 34,642,000 $ 10,256,000
3,695,000 132,558
$ 21,506,000 $ 2,165,000 $ 2,550,000 $ 21,121,000 $ 2,649,000 $ 756,248
83
CITY OF LINO LAKES, MINNESOTA
SCHEDULE OF DEFERRED TAX LEVIES
December 31, 2012
Public
Lease Project G. O. G.O. G. O.
Year of Equipment Equipment Equipment Revenue Refunding Improvement Improvement Improvement
Levy/ Certificates Certificates Certificates Bonds Bonds Bonds Bonds Bonds
Collection of 2010A of 2011A of 2012A of 1998A 1999C of 2002A of 2003B of 2005A
2012/2013 $ 64,890 $ 42,851 $ 54,469 $ $ $ - $ 20,248 $ 569,609
2013/2014 43,481 53,561 23,781 566,197
2014/2015 - 54,086 567,247
2015/2016 - 572,497
2016/2017 571,184
2017/2018 - 574,072
2018/2019 - - 574,907
2019/2020 - 579,639
2020/2021 -
2021/2022
2022/2023 -
2023/2024
$ 64,890 $ 86,332 $ 162,116 $ $ $ $ 44,029 $ 4,575,352
84
two
Exhibit 2
G.O. G.O. G.O. G.O.
Improvement Tax CIP G. O. Improvement and
Refunding Abatement Refunding TIF Utility Revenue G.O.
Bonds Bonds Bonds Bonds Refunding Bonds Refunding Bonds
of 2005B 2006C 2006E 2007A 2010A 2012A
Total
$ 490,613 $ 245,511 $ 459,060 $ 442,813 $ 123,427 $ 19,818 $ 2,513,491
463,050 255,381 443,940 493,843 121,433 101,149 2,464,667
264,458 449,820 495,103 124,688 257,620 1,955,402
278,140 460,110 500,983 121,537 266,406 1,933,267
285,411 464,100 506,023 118,387 259,128 1,945,105
297,263 268,723 120,488 261,868 1,260,546
"' 313,472 271,243 117,180 258,849 1,276,802
323,316 278,593 124,372 182,417 1,305,920
337,517 285,313 179,687 622,830
._ 350,447 291,403 181,949 641,850
MIIN
MEW
301,855 183,899 301,855
306,127 180,330 306,127
$ 953,663 $ 2,950,916 $ 2,277,030 $ 4,442,022 $ 971,512 $ 2,333,120 $ 16,527,862
85
CITY OF LINO LAKES, MINNESOTA
DEBT SERVICE PAYMENTS TO MATURITY - ALL BONDS
December 31, 2012
G. O.
G. O. G. O. Improvement G. O.
Equipment Equipment Equipment Improvement Improvement Refunding Improvement
Certificates Certificates Certificates Bonds Bonds Bonds Bonds
2010A 2011A 2012A of2002A of2002B 2003A 2003B
Bonds payable $ 60,000 $ 81,000 $ 150,000 $ 30,000 $ 265,000 $ 485,000 $ 65,000
Future interest payable 1,800 1,220 4,395 615 7,354 73,484 3,758
Totals $ 61,800 $ 82,220 $ 154,395 $ 30,615 $ 272,354 $ 558,484 $ 68,758
Payments to maturity:
2013 $ 61,800 $ 40,810 $ 51,875 $ 30,615 $ 272,354 $ 78,438 $ 32,778
2014 41,410 51,010 - 81,088 35,980
2015 - 51,510 - 78,488 -
2016 - - 80,788 -
2017 - 77,988
2018 - 79,994
2019 - - 81,700
2020 -
2021 - - -
2022 - - -
2023 - -
2024 - - - -
$ 61,800 $ 82,220 $ 154,395 $ 30,615 $ 272,354 $ 558,484 $ 68,758
86
Exhibit 3
G. 0. G.O. G.O. G.O. G.O.
G. O. Improvement Tax Utility CIP G.O. Improvement and
Improvement Refunding Abatement Revenue Refunding TIF Utility Revenue
- Bonds Bonds Bonds Bonds Bonds Bonds Refunding Bonds
2005A 2005B 2006C 2006D 2006E 2007A 2010A
$ 3,850,000 $ 1,270,000 $ 2,345,000 $ 315,000 $ 2,285,000 $ 3,395,000 $ 815,000
949,852 95,000 639,812 33,553 284,300 767,129 98,975
$ 4,799,852 $ 1,365,000 $ 2,984,812 $ 348,553 $ 2,569,300 $ 4,162,129 $ 913,975
$ 531,111 $ 477,875 $ 221,320 $ 71,722 $ 439,300 $ 416,026 $ 116,600
533,361 456,625 231,020 69,292 430,000 463,426 114,700
529,736 430,500 240,043 66,832 415,600 464,326 117,250
530,236 - 248,381 69,254 420,800 469,526 114,250
534,611 - 260,858 71,453 430,100 473,926 111,250
- 532,861 267,464 - 433,500 252,126 113,175
534,633 278,327 - 254,326 110,025
534,784 - 293,233 - 261,026 116,725
538,519 - 302,183 - 267,126
- 315,103 - - 272,504
- 326,880 - - 282,016
- 285,775
$ 4,799,852 $ 1,365,000 $ 2,984,812 $ 348,553 $ 2,569,300 $ 4,162,129 $ 913,975
CITY OF LINO LAKES, MIN]
DEBT SERVICE PAYMENTS TO MATURITY - ALL BONDS (CONTINUED)
December 31, 2012
Exhibit 3
Note
Payable -
G.O. Anoka
Refunding Bonds County -
2012A 2009A Totals
Bonds payable $ 2,015,000 $ 3,695,000 $ 21,121,000
Future interest payable 1,707,020 1,169,140 5,837,407
Totals $ 3,722,020 $ 4,864,140 $ 26,958,407
Payments to maturity:
2013 $ 18,875 $ 132,558 $ 2,994,057
2014 96,332 132,558 2,736,802
2015 245,352 495,558 3,135,195
2016 253,720 501,158 2,688,113
2017 246,789 506,158 2,713,133
2018 249,398 510,557 2,439,075
2019 246,523 518,408 2,023,942
2020 1,673,730 520,282 3,399,780
2021 171,130 526,092 1,805,050
2022 173,285 535,963 1,296,855
2023 175,143 484,848 1,268,887
2024 171,743 457,518
$ 3,722,020 $ 4,864,140 $ 26,958,407
CITY OF LINO LAKES, MINNESOTA
INSURANCE IN FORCE
December 31, 2012
Exhibit 4
Coverage Amount
General Liability:
'" Bodily Injury/Property Damage $ 1,500,000
Personal Injury/Police Professional Liability 1,500,000
Fire Legal Liability 50,000
— Medical Expense Occurrence Limit 1,000
Medical Expense Aggregate 10,000
Property Damage ($500 Deductible)
UMW
gwo
Property:
Buildings and Contents (including Mobile and EDP - Electronic Equipment & Valuable Papers) 29,726,333
Faithful Performance Blanket Bond 500,000
Storage Tank Liability 250,000
Rented/Leased Equipment ($1,000 Deductible) 500,000
Public Official and Employee Liability ($1,000 Deductible each occurrence) 1,500,000
Automotive:
Bodily injury and property damage 1,500,000
Comprehensive and Collision Actual Cash Value
Uninsured motorists 200,000
Workmen's compensation Statutory
Umbrella Liability 1,000,000
Crime - Theft Disappearance and Destruction ($1,000 Deductible) 250,000
89
CITY OF LINO LAKES, MINNESOTA Exhibit 5
TAXABLE VALUATIONS, TAX LEVIES AND TAX RATES
Tax Capacity Tax Capacity
Values Values
2011/2012 2010/2011
Taxable valuations:
Total $ 17,999,453 $ 19,783,539
Fiscal disparities:
Distribution 2,762,556 2,932,332
Contribution (1,246,881) (1,576,375)
Less: Captured Tax Increment Value (279,219) (251,890)
$ 19,235,909 $ 20,887,606
Tax Tax
Certified Capacity Certified Capacity
Levy Rate Levy Rate
Taxes Levied:
Revenue $ 7,192,818 37.501 $ 7,719,240 37.425
Bond and Interest 1,034,441 5.393 940,760 4.616
Totals
$ 8,227,259 42.894 $ 8,660,000 42.041
The tax capacity rate is based on the total certified levy net of the fiscal disparity distribution.
90
III.
STATISTICAL
SECTION
Statistical Section (Unaudited)
This part of the Comprehensive Annual Financial Report presents detailed information as a
context for understanding what the information in the financial statements, note disclosures, and
required supplementary information says about overall financial health. The following are the
— categories of the various schedules that are included in this section.
Financial Trends Tables 1 -4
These schedules contain trend information to help the reader understand how the City's financial
performance and well -being have changed over time.
Revenue Capacity Tables 5 -8
These schedules contain information to help the reader assess the City's most significant revenue
sources.
Debt Capacity Tables 9 -11
These schedules present information to help the reader assess the affordability of the City's
current levels of outstanding debt and the City's ability to issue additional debt in the future.
Demographic and Economic Information Tables 12 -13
These schedules offer demographic and economic indicators to help the reader understand the
— environment within which the City's financial activities take place.
Operating information Tables 14 -16
These schedules contain service and infrastructure data to help the reader understand how the
information the City's financial report relates to the services the City provides and the activities it
performs.
CITY OF LINO LAKES, MINNESOTA
NET POSITION BY COMPONENT,
LAST TEN FISCAL YEARS
"' (accrual basis of accounting)
NNW
Table 1
Fiscal Year
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Governmental activities
Net Investment in Capital Assets $ 25,993,905 $ 28,807,262 $ 25,460,528 $ 29,549,174 $ 36,789.153 $ 28,472,865 $ 23,400,453 $ 22,562,217 $ 24,600,103 $ 22,166,342
Restricted 3,568,555 3,045,052 12,050,484 10,704,508 10,324,467 9,870,676 9,414,474 8,428,025 11,598,803 11,595,112
Unrestricted 15.668,226 16,249,541 13,577,071 14,516,466 6,339,528 10,790,359 15,926,322 16,738,885 13,463,210 17,639,038
Total governmental activities net position $ 45,230,686 $ 48,101,855 $ 51,088,083 $ 54,770,148 $ 53,453,148 $ 49,133,900 $ 48,741,249 $ 47,729,127 $ 49,662,116 $ 51,400,492
Business -type activities
Net Investment in Capital Assets
team Unrestricted
low
$ 25,537383 $ 26,713,498 $ 28,342,832 $ 29,485,942 $ 29.836,775 $ 30,372,670 $ 30,071,840 $ 29,648,461 $ 29,216,866 $ 28,798,095
3,778.936 4.744,875 5,572338 6,880,547 8,063.983 9,028,778 10,112,207 10,728,626 11.201,362 12,102,013
Total business- type activities net position $ 29.316319 $ 31.458,373 $ 33,915.170 0 36,366,489 $ 37.900,758 $ 39,401,448 $ 40.184.047 $ 40,377,087 $ 40,418,228 $ 40,900,108
Priman Government
Net Investment in Capital Assets $ 51.531.288 $ 55.520,760 $ 53,803,360 $ 59,035,116 $ 66,625,928 0 58,845.535 $ 53,472,293 $ 52,210,678 $ 53,816,969 $ 50,964,437
Restricted 3.568,555 3,045.052 12,050,484 10,704,508 10.324.467 9,870.676 9,414.474 8,428,025 11,598,803 11,595,112
Unrestricted 19,447,162 20.994,416 19,149,409 21.397,013 14.403,511 19,819.137 26.038.529 27,467,511 24.664.572 29,741,051
Total primary government net position $ 74,547,005 $ 79,560,228 $ 85,003,253 $ 91.136.637 $ 91.353.906 $ 88,535,348 $ 88,925.296 $ 88,106,214 $ 90,080,344 $ 92,300,600
91
CITY OF LINO LAKES, MINNESOTA
CHANGES IN NET POSITION,
LAST TEN FISCAL YEARS
(accrual basis of accounting)
Expenses
Governmental activities:
General Government
Public Safety
Public Services
Parks, Recreation and Forestry
Conservation of Natural Resources
Community Development
Interest on long -term debt
Fiscal Year
2003 2004 2005 2006 2007 2008 2009
$ 6,092,587 $ 2,524,387 $ 2,941,279 $ 2,886,825 $ 2,197,672 $ 2,323,358 $ 2,201,439
2,648,944 2,799,294 3,091,174 3,516,376 3,730,504 4,051,162 4.299,366
1,162,412 7,254,708 9,187,436 3,871.968 10,580,560 7,608,626 4,027,553
932,113 1,196,096 799,335 1,162,458 1,357,133 919,948 1,313.560
111,946 116,869 150,092 156,592 183,420 184,624 215.607
859.110 420,874 383,211 691.880 1,122.802 1,114,158 1,005,997
815.681 748,832 797,341 926,021 980,849 1,045,781 928,668
Total governmental activities expenses $ 12,622,793 $ 15,061,060 $ 17,349,868 $ 13,212.120 $ 20,152.940 $ 17,247,657 $ 13.992,190
Business -type activities:
Water $ 968.458 $ 914.039 $ 876,592 $ 976,575 $ 1,170,902 $ 1,020,770 $ 1,089,569
Sewer 1.046,170 1,130,994 1,217,825 1.228.123 1.298,963 1,287,943 1.432.107
Total business -type activities 2,014,628 2.045,033 2,094,417 2.204.698 2,469,865 2,308,713 2.521,676
Total primary govemment expenses $ 14.637,421 $ 17,106,093 $ 19.444,285 $ 15.416,818 $ 22,622,805 $ 19,556,370 $ 16.513,866
Program Revenues
Governmental activities:
Charges for services:
General Government $ 102,520 $ 122,86] $ 111,480 $ 88,924 $ 91,646 $ 79,844 $ 101,741
Public Safety 964,034 1,049,858 998,210 844.514 1,078,995 1,296,418 725,747
Public Works 493,312 454,191 434,087 420,741 389,489 413,040 428,174
Parks, Recreation and Forestry 250,816 242,857 196,951 188,439 185,803 187,285 165,994
Conservation of Natural Resources 5,369 11,763 4,873 6,854 4,559 3,660 3,858
Community Development 28,210 28,952 26,985 20,530 15.839 11,623 8,667
Operating grants and contributions 633,691 677,079 761,924 643,749 851.791 693.065 682,797
Capital grants and contributions 4.536,567 7,515.238 10,128,024 5.963.204 7. 189,346 1. 094,789 1,357,015
Total governmental activities program revenues $ 7,014,519 $ 10.102,799 $ 12,662,534 $ 8.176,955 S 9. 807,468 $ 3.779,724 $ 3,473,993
Business -type activities:
Charges for services:
Water $ 1,064.326 $ 979,075 $ 1,031.175 $ 1,175,172 $ 1.215,763 $ 1,058,493 0 1,365,817
Sewer 1,216,589 1,280,652 1,361,759 1,391,702 1,446,112 1.472,093 1,502,164
Operating grants and contributions - - 62,710
Capital grants and contributions 2,719,081 1,589.419 1,733,775 1,535,631 80,750 10,117 8,769
Total business -type activities program revenues 4,999.996 3,849,146 4,126,709 4,102,505 2,742,625 2,540,703 2,939,460
Total primary government program revenues $ 12,014,515 $ 13,951,945 $ 16,789,243 $ 12,279,460 $ 12,550,093 $ 6,320,427 $ 6,413,453
Net (Expense) /Revenue
Governmental activities
Business -type activities
Total primary government net expense
$ (5,608,274) $ (4,958,261) $ (4,687,334) $ (5,035,165) $ (10,345,472) $ (13,467,933) $ (10,518,197)
2.985,368 1.804,113 2,032.292 1.897,807 272.760 231,990 417,784
S (2,622,906) $ (3.154.148) $ (2,655,042) $ (3,137,358) $ (10,072.712) $ (13,235.943) S (10,100,413)
General Revenues and Other Changes in Net Position
Governmental activities:
Property taxes 0 6.847.470 $ 6,630,279 $ 7,383,415 0 8,269,944 $ 8.785.280 0 9,424,697 $ 9,808,324
Unrestricted grants and contributions - - - 256,877 129,607 11,321
Unrestricted investment earnings 194,220 221,302 433,387 713,794 864,578 576,071 429,325
Gain on sale of capital assets 1,280,957 33,217 17,424 12,512 12,644
Miscellaneous - - 160,955
Transfers (301,355) (303.108) (304,195) (299,725) (895.687) (994,202) (136,068)
Total govemmental activities $ 6,740,335 $ 7,829,430 $ 7,673,562 $ 8,717,230 $ 9,028,472 $ 9,148,685 $ 10.125,546
Business -type activities:
Unrestricted investment earnings $ 20,866 $ 34,833 $ 120,310 $ 253,787 $ 365,822 $ 274,498 $ 228,747
Transfers 301,355 303,108 304,195 299,725 895,687 994,202 136,068
Total business -type activities 322,221 337,941 424.505 553,512 1,261.509 1,268,700 364,815
Total primary government $ 7,062.556 $ 8,167,371 $ 8,098,067 $ 9,270.742 $ 10,289,981 $ 10,417,385 $ 10,490,361
Change in Net Position
Governmental activities $ 1,132.061 S 2.871.169 $ 2,986,228 $ 3,682,065 $ (1,317.000) $ (4,319,248) $ (392,651)
Business -type activities 3,307.589 2.142.054 2,456,797 2,451.319 1.534.269 1,500,690 782.599
Total primary government change in net position $ 4.439.650 S 5.013.223 $ 5,443.025 $ 6.133,384 S 217.269 $ (2. 818,558) $ 389,948
92
Table 2
2010
2011 2012
$ 1,987,415 $ 1,990,137 $ 1,883,961
3,971,261 4,019,101 4,046,415
3,968,063 8,110,979 5,584,283
1,124,907 1,218,472 1.210,867
197,571 139,544 184,051
1,105,254 617,747 430,121
1.064,172 927.535 837.755
$ 13,418,643 $ 17,023.515 $ 14,177,453
$ 1,045,901 $ 966,643 $ 949.121
1.466,847 1,638,063 1,527,637
2,512,748 2,604,706 2,476,758
S 15.931.391 $ 19.628,221 $ 16.654,211
$ 98,403 $ 103,687 $ 129,151
691,005 713,985 642,745
427,223 382,287 476,296
177,984 210,976 191,832
4,153 4.392 19.297
14,148 5,138 16.940
617,450 593,798 450,179
1.388.984 7,347,613 5.125,693
3,419,350
9,361.876 $ 7,052,133
1,087.013 $ 1,090,104 $ 1. 371,809
1,498,218 1,494.188 1.505,781
8.709 1,462 20,018
2,593,940 2,585. 754 2.897,608
6.013.290 $ 11,947.630 $ 9,949.741
$ (9,999,293) $ (7,661.639) $ (7.125.320)
81,192 (18,952) 420,850
$ (9.918,101) $ (7,680.591) $ (6,704,470)
$ 8.764,183 $ 8.768.805 $ 8,610,709
4.389 4,072 4,941
225,677 251,250 202,828
37,579 4,175
(7,078) 66,122 41.043
$ 8,987,171 S 9,127,828 $ 8.863,696
$ 104,770 $ 126,215 S 102.073
7.078 (66.122) (41.043)
111,848 60.093 61.030
$ 9,099.019 $ 9,187,921 $ 8,924,726
(1,012,122) $ 1,466,189 $ 1,738.376
193.040 41,141 481.880
(819,082) 5 1,507,330 $ 2.220,256
93
CITY OF LINO LAKES, MINNESOTA
FUND BALANCES, GOVERNMENTAL FUNDS,
LAST TEN FISCAL YEARS
(modified accrual basis of accounting)
General Fund
Reserved
Unreserved
Nonspendable
Unassigned
Total general fund
All Other Governmental Funds
Reserved reported in:
Special Revenue Funds
Capital Projects Funds
Debt Service Funds
Permanent Funds
Unreserved reported in:
Special Revenue Funds
Capital Projects Funds
Debt Service Funds
Permanent Funds
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total all other governmental funds
Table 3
Fiscal Year
2003
$ 133,921
4,775,969
2004
$ 142,492
5,067,973
$ 4,909,890 $ 5,210,465
$ 1,759
1,946,618
2,482,184
32,704
5,406,014
675,409
$ 1,718
957,112
2,556,300
57,616
6,241,408
452,972
$ 10,544,688 $ 10,267,126
2005
$ 148,652
5,300,156
2006
$ 153,009
5,337,225
$ 5,448,808 $ 5,490,234
$ 1,763
957,112
7,371,359
100,000
74,716
7,348,375
853
$ 1,813
957,112
3,992,952
100,000
82,385
5,525,508
5,378
$ 15,854,178 $ 10,665,148
Total all funds $ 15,454,578 $ 15,477,591 $ 21,302,986 $ 16,155,382
94
Table 3 (Continued)
Fiscal Year
2007 2008 2009 2010 2011 2012
$ 181,759
5,356,272
$ 190,825
5,393,316
$ 196,568
5,191,396
$ 5,538,031 $ 5,584,141 $ 5,387,964
$ 226,921
885,825
3,925,402
100,000
100,955
8,395,827
17,023
$ 226,973
812,400
3,405,272
100,000
106,573
5,927,411
22,224
$ 227,176
736,772
3,457,349
100,000
93,956
11,611,835
(558,443)
15,824
$ 181,471 $ $
5,445,334
165,079
5,440,101
$ 5,626,805 $ 5,605,180
$ 227,342
658,875
2,986,102
100,000
110,471
12,537,841
(1,093,765)
12,676
$ 13,651,953 $ 10,600,853 $ 15,684,469 $ 15,539,542
180,786
5,053,031
$ 5,233,817
906,010
2,658,010
110,568
10,808,268
(3,154,496)
$ 11,328,360
823,113
3,041,524
115,196
15,573,179
(3,262,728)
$ 16,290,284
$ 19,189,984 $ 16,184,994 $ 21,072,433 $ 21,166,347 $ 16,933,540 $ 21,524,101
95
CITY OF LINO LAKES, MINNESOTA
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS,
LAST TEN FISCAL YEARS
(modified accrual basis of accounting)
Revenues
Property Taxes
Licenses and Permits
Intergovernmental
Special Assessments
Charges for Services
Fines and Forfeits
Investment Earnings
Miscellaneous
Total revenues
Expenditures
Current:
General Government
Public Safety
Public Works
Parks, Recreation and Forestry
Conservation of Natural Resources
Community Development
Capital outlay
Debt Service
Principal
Interest and fiscal charges
Bond issuance costs
Construction/Acquisition
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other Financing Sources (Uses)
Sale of Property
Proceeds from Issuance of Debt
Premium on Bonds Issued
Discount on Bonds Issued
Payment to Refunded Bond Escrow Agent
Loan Payable Reapportionment
Transfer In
Transfer Out
Total other financing sources (uses)
Net change in fund balances
Debt service as a percentage of
Table 4
Fiscal Year
2003
$ 6,687,516
766,524
2,011,285
2,812,386
658,370
97,223
194,049
677,823
13,905,176
2004
$ 6,523,938
867,909
2,419,531
1,587,510
639,565
106,053
221,303
782,179
13, 147,988
2005
$ 7,230,287
812,172
1,808,111
1,769,821
601,548
100,980
433,385
948,009
13,704,313
5,808,015 2,261,908 2,701,731
2,609,171 2,798,013 3,099,032
1,770,649 5,126,578 7,071,322
969,597 954,945 1,111,301
114,580 115,631 140,334
622,218 515,287 464,553
1,684,450 1,960,000 2,016,000
865,638 798,405 838,950
229,321 - -
14,673,639 14,530, 767 17,443,223
(768,463) (1,382,779) (3,738,910)
- 1,280,957 280,269
2,673,565 1,604,000 9,412,000
- - 176,231
- (6,057) -
(1,170,000) -
1,120,223 5,283,306 2,651,469
(1,421,578) (5,586,414) (2,955,664)
2,372,210 1,405,792 9,564,305
$ 1,603,747
2006
$ 8,103,263
581,582
1,818,519
2,901,100
687,551
101,518
713,795
716,692
15,624,020
2007
$ 8,529,846
694,435
6,143,689
1,961,253
753,698
139,932
864,578
889,901
19,977,332
2,614,303 1,953,960
3,314,159 3,513,460
7,755,727 8,446,911
1,076,727 1,103,021
143,653 183,346
683,036 1,107,328
835,770 2,008,073
2,155,000
1,011,157
1,973,000
937,895
19,589,532 21,226,994
(3,965,512) (1,249,662)
28,818 54,037
6,327,000 4,375,000
450
(13,635) (25,798)
(7,225,000)
5,811,452 2,900,249
(6,111,177) (3,019,224)
(1,182,092) 4,284,264
$ 23,013 $ 5,825,395 $ (5,147,604) $ 3,034,602
96
OIMM
Table 4 (Continued)
Fiscal Year
2008
$ 9,095,085
802,135
1,004,476
950,188
872,534
133,531
576,071
516,415
13,950,435
2009
$ 9,561,570
307,714
1,259,016
968,995
778,163
111,807
429,325
513,306
13,929,896
2,058,267 1,918,246
3,806,389 4,122,352
5,542,308 1,965,640
1,033,260 1,106,006
183,024 209,466
1,113,232 1,005,095
585,875 501,806
NMIN
lam
1,749,000
1,074,052
1,908,000
994,809
17,145,407 13,731,420
(3,194,972)
13,750
209,000
4,763,391
(4,796,159)
189,982
198,476
35,700
4,596,000
11,141
1,413,985
(1,367,863)
4,688,963
2010
$ 8,647,488
330,138
1,176,863
851,270
780,044
127,203
225,677
502,992
12,641,675
1,730,390
3,798,106
1,902,411
945,821
185,232
1,098,682
282,938
1,866,000
1,042,883
12,852,463
(210,788)
20,600
1,170,000
10,980
(965,000)
1,1 95,747
(1,127,625)
304,702
2011
$ 8,655,971
322,030
1,331,914
904,522
812,604
154,020
251,244
460,710
12,893,015
2012
$ 8,560,340
319,172
5,267,570
816,998
744,633
155,956
202,825
414,088
16,481,582
1,773,515 1,619,215
3,791,329 3,861,265
2,192,732 3,339,430
1,059,191 1,056,976
134,122 176,318
624,286 435,154
4,209,593 616,931
2,030,000 2,145,000
983,129 831,875
47,054
14,129,218
16,797,897
(3,904,882) 2,352,364
50,953 4,175
120,000 2,165,000
(565,000)
2,971,715
(2,905,593)
(327,925)
1,979,457
(1,910,435)
2,238,197
$ 4,590,561
$ (3,004,990) $ 4,887,439 $ 93,914 $ (4,232,807)
CITY OF LINO LAKES, MINNESOTA
ASSESSED AND ACTUAL VALUE OF TAXABLE PROPERTY,
LAST TEN FISCAL YEARS
Payable
Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Residential
Property
$ 10,649,345
12,252,347
14,055,076
15,825,619
17,605,080
18,382,645
18,919,087
17,978,917
16,214,698
14,743,557
Commercial/
Industrial
Property
$ 1,487,554
1,982,146
2,290,829
2,740,583
3,047,965
3,431,107
4,002,349
3,800,004
3,223,901
2,945,026
Source: Anoka County, Minnesota Assessors' Office
Personal
Property
$ 251,016
259,194
274,956
271,665
288,290
279,102
275,496
291,904
303,964
310,870
98
Total Taxable
Assessed
Value
Table 5
Total Direct
Tax Rate
$ 12,387,915 $
14,493,687
16,620,861
18,837,867
20,941,335
22,092,854
23,196,932
22,070,825
19,742,563
17,999,453
47.60
42.29
42.22
41.40
38.99
38.97
38.73
37.91
42.04
42.89
SNIP
CITY OF LINO LAKES, MINNESOTA
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(rate per $100 of Tax Capacity)
City Direct Rate Overlapping Rates
Table 6
General Centennial Total Direct
Obligation School Other and
Debt Redevelopment Total District Anoka Taxing Total Overlapping
Fiscal Year Basic Rate Service Debt Service Direct ISD # 12 County Districts Overlapping Tax Rate
.,. 2003 $ 40.268 $ 7.335 $ 47.603 $ 37.467 $ 37.714 $ 7.050 $ 82.231 $ 129.834
2004 36.302 5.985 42.287 36.649 35.221 6.373 78.243 120.530
2005 36.838 5.385 42.223 37.486 33.080 6.696 77.262 119.485
2006 36.044 5.354 41.398 40.253 32.096 6.479 78.828 120.226
2007 34.356 4.638 38.994 38.090 30.696 5.578 74.364 113.358
2008 34.560 4.407 38.967 35.258 31.078 6.956 73.292 112.259
2009 34.716 4.017 38.733 34.593 32.078 5.611 72.282 111.015
2010 34.086 3.819 37.905 37.285 35.189 5.879 78.353 116.258
2011 37.425 4.616 42.041 43.695 39.952 6.278 89.925 131.966
2012 37.501 5.393 42.894 40.010 41.146 6.691 87.847 130.741
Source: Anoka County Property Records and Tax Division
Notes:
The majority of Lino Lakes is served by Independent School District No. 12.
Rates for debt service are based on each year's requirements.
99
CITY OF LINO LAKES, MINNESOTA
PRINCIPAL PROPERTY TAXPAYERS,
CURRENT YEAR AND NINE YEARS AGO
2012 2003
Table 7
Percentage Percentage
of Total of Total
City City
Taxable Taxable Taxable Taxable
Net Tax Net Tax Net Tax Net Tax
Taxpayer Capacity Rank Capacity Capacity Rank Capacity
Target Corporation $ 235,854 1 1.31 % $ 252,988 1 1.66 %
Lino Lakes Realty LLC 228,202 2 1.27 -
Xcel Energy 157,305 3 0.87 131,145 3 0.86
Moline Concrete Products 133,691 4 0.74 125,132 4 0.82
Kohl's Department Store 117,218 5 0.65 152,550 2 1.00
Taylor Corporation 108,982 6 0.61 99,752 6 0.65
Gargaro Properties LLC 95,776 7 0.53
Marmon/Keystone Corp 88,448 8 0.49 72,296 8 0.47
CenterPoint Energy 64,082 9 0.36 49,316 10 0.32
SMW Federal Credit Union 60,974 10 0.34 -
Lino Lakes Business Center - - 99,752 5 0.65
Individual - - 76,930 7 0.50
F &G Incorporated - - 69,126 9 0.45
Total $ 1,290,532 7.17 % $ 1,128,987 7.38 %
Source: Anoka County
WINN
100
CITY OF LINO LAKES, MINNESOTA
PROPERTY TAX LEVIES AND COLLECTIONS.
LAST TEN FISCAL YEARS
Taxes Levied for the Fiscal Year
Fiscal Operating Debt Total Tax
Year Tax Levy Tax Levy Levy
Table 8
Collected within the
Fiscal Year of Levy
Amount
Percentage
of
Levy
2003 $ 5,180,932 $ 943,689 $ 6,124,621 $ 6,062,273 99.0%
2004 5,623,542 927,078 6,550,620 6,145,419 93.8%
2005 6,342,211 927,091 7,269,302 6,881,838 94.7%
2006 7,042,626 934,281 7,976,907 7,594,019 95.2%
2007 7,558,995 897,333 8,456,328 8,324,180 98.4%
2008 7,973,236 893,720 8,866,956 8,581,974 96.8%
2009 8,295,172 949,166 9,244,338 8,982,756 97.2%
2010 7,816,232 879,182 8,695,414 8,400,439 96.6%
2011 7,719,240 940,760 8,660,000 8,486,845 98.0%
2012 7,192,818 1,034,441 8,227,259 8,095,502 98.4%
Notes:
Current year levies and collections include State levy related credits (HACA and Market Value Credit).
Does not include tax increment levies and collections.
101
Table 8 (Continued)
Total Collections to Date
Collections in Percentage Outstanding Percentage
Subsequent of Delinquent of Levy
Years Amount Levy Taxes Outstanding
$ 87,237 $ 6,149,510 100.0% $ 0.0%
48,424 6,193,843 100.0% 356,777 5.4%
56,276 6,938,114 100.0% 331,188 4.6%
62,358 7,656,377 96.0% 320,530 4.0%
104,065 8,428,245 99.7% 28,083 0.3%
132,710 8,714,684 98.3% 152,272 1.7%
197,045 9,179,801 99.3% 64,537 0.7%
149,450 8,549,889 98.3% 145,525 1.7%
66,215 8,553,060 98.8% 106,941 1.2%
- 8,095,502 98.4% 131,757 1.6%
CITY OF LINO LAKES, MINNESOTA
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
Table 9
Business -Type
Governmental Activities Activities
General
General Special Other Obligation Total
Fiscal Obligation Assessments Long -Term Revenue Primary
Year Bonds Payable Debt Bonds Government
2003 $ 6,030,000 $ 12,840,000 $ $ 2,970,000 $ 21,840,000
2004 5,764,000 11,580,000 - 2,705,000 20,049,000
2005 5,335,000 19,405,000 - 2,425,000 27,165,000
2006 7,177,000 13,940,000 4,410,000 25,527,000
2007 11,569,000 12,520,000 1,855,000 25,944,000
2008 11,184,000 11,365,000 - 1,530,000 24,079,000
2009 10,712,000 10,265,000 4,260,000 1,170,000 26,407,000
2010 10,141,000 9,175,000 4,260,000 795,000 24,371,000
2011 9,421,000 7,985,000 3,695,000 405,000 21,506,000
2012 10,646,000 6,780,000 3,695,000 21,121,000
Notes:
Details regarding the City's outstanding debt can be found in the notes to the financial statements.
See the Demographic and Economic Statistics schedule for personal income and population data.
(1) Personal income information is not available after 2011 from the Bureau of Economic Analysis Report
103
Table 9 (Continued)
(1)
Less: Amounts Percentage Percentage
Available in Debt Net of Assessed of Personal Per
Service Funds Bonded Debt Market Value Income Capita
$ 2,482,184 $ 19,357,816
2,556,300 17,492,700
7,371,359 19,793,641
3,992,952 21,534,048
3,925,402 22,018,598
3,405,272 20,673,728
3,457,349 22,949,651
2,986,102 21,384,898
2,638,129 18,867,871
3,035,557 18,085,443
1.55 3.13 $ 1,189
1.22 2.69 1,071
1.29 2.84 1,379
1.24 2.98 1,293
1.14 2.90 1,307
1.02 2.65 1,205
1.08 3.00 1,301
1.07 2.73 1,206
1.05 2.31 1,049
1.10 N/A 1,025
AIIPEr
CITY OF LINO LAKES, MINNESOTA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
As of December 31, 2012
Overlapping:
Anoka County
ISD 12
ISD 624
ISD 831
Metropolitan Council
Anoka County Railroad Authority
Total Overlapping
City of Lino Lakes Direct Debt
Table 10
Estimated
Estimated Share of
Debt Percentage Overlapping
Outstanding Applicable Debt
$ 151,019,654 6.6% $ 9,966,378
71,680,000 47.7% 34,209,876
12,540,000 3.5% 442,172
29,930,000 7.7% 2,304,231
1,724,988,995 0.6% 10,345,893
28,380,000 6.6% 1,872,907
59,141,457
$ 21,121,000 100% 21,121,000
!, Total Direct and Overlapping Debt: $ 80,262,457
VIEW
Sources: Taxable value data used to estimate applicable percentages provided by the County Property Appraiser. Debt
outstanding data provided by each governmental unit.
Notes: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This
schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and
businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long -term debt,
the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply
that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government.
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.
105
CITY OF LINO LAKES, MINNESOTA
Legal Debt Margin Information
Last Ten Fiscal Years
Debt limit
Total net debt applicable to limit
Legal debt margin
Table 11
Fiscal Year
2003 2004 2005 2006
$ 25,024,436 $ 28,616,070 $ 30,698,674 $ 34,686,356
5,350,000 5,169,000
4,845,000 4,332,000
$ 19,674,436 $ 23,447,070 $ 25,853,674 $ 30,354,356
Total net debt applicable to the limit
as a percentage of debt limit 21.38% 18.06% 15.78% 12.49%
106
Table 11
Legal Debt Margin Calculation for Fiscal Year 2012
Market value $ 1,640,455,854
Debt limit (3% of market value) 49,213,676
Debt applicable to limit 4,591,000
Legal debt margin $ 44,622,676
Fiscal Year
2007 2008 2009 2010 2011 2012
$ 38,556,150 $ 60,658,830 $ 64,036,746 $ 60,622,086 $ 54,123,645 $ 49,213,676
4,039,000 3,804,000 3,642,000 3,386,000 2,961,000 4,591,000
w, $ 34,517,150 $ 56,854,830 $ 60,394,746 $ 57,236,086 $ 51,162,645 $ 44,622,676
w
1U.
Mow
10.48% 6.27% 5.69% 5.59% 5.47% 9.33%
107
CITY OF LINO LAKES, MINNESOTA
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN CALENDAR YEARS
Table 12
(2)
Personal Per
Income Capita (3) (4)
Fiscal (1) (thousands Personal School Unemployment
Year Population of dollars) Income Enrollment Rate
2003 18,368 $ 618,267 $ 33,660 6,992 5.0
2004 18,725 650,301 34,729 6,956 4.6
2005 19,698 697,388 35,404 6,934 3.8
2006 19,736 723,739 36,671 6,986 4.1
2007 19,851 758,943 38,232 6,846 4.8
2008 19,987 780,053 39,028 6,768 6.9
2009 20,305 764,077 37,630 6,725 7.8
2010 20,216 782,561 38,710 6,532 7.1
2011 20,505 817,124 39,850 6,426 5.9
2012 20,600 N/A N/A 6,421 5.6
Source:
(1) Estimates from Metropolitan Council, except for 2010 which is per the U.S. Census & 2012 which is
city estimate
(2) Information from Bureau of Economic Analysis Report - Anoka County statistics used as local
information is unavailable
(3) Information from ISD 12 Website
(4) Information from MN Department of Employment and Economic Development - Anoka County statistics
used as local information is unavailable
Note: Information not available is marked N/A
108
CITY OF LINO LAKES, MINNESOTA
PRINCIPAL EMPLOYERS,
CURRENT YEAR AND NINE YEARS AGO
Employer
MONO
2012 2003
Table 13
(1) (1)
Percentage Percentage
of Total of Total
Employees Rank Employment Employees Rank Employment
State of Minnesota Corrections 460 1 N/A % 428 2 N/A %
ISD 12 - Centennial Schools 362 2 N/A N/A N/A
... Taylor Corporation 160 3 N/A 228 4 N/A
Target Corporation 150 4 N/A 300 3 N/A
Curtis 1000 130 5 N/A N/A
_ Molin Concrete Products 120 6 N/A 125 9 N/A
Anoka County Juvenile Center 120 7 N/A 2,530 1 N/A
Kohls 120 8 N/A 160 6 N/A
YMCA 120 9 N/A N/A
MNIMP
Rehbein Transit, Inc. 100 10 N/A 140 8 N/A
Synovis Interventional Systems 222 5 N/A
Summit Fire Protection - - 150 7 N/A
Custom Manufacturing - - 80 10 N/A
Total 1,842 % 4,363 - %
Source: City of Lino Lakes Official Statements /Employer Surveys
Notes:
(1) = While information was obtainable for the largest employers within the City of Lino Lakes, information on the total employment
within the City was not available.
109
CITY OF LINO LAKES, MINNESOTA
Full- time - Equivalent Employees by Type
Last Ten Fiscal Years
Table 14
2003 2004 2005 2006 2007
General Government
Administration 5.00 5.00 5.00 5.00 5.00
Seniors 0.63 0.63 0.63 0.63 0.63
Finance 3.50 3.50 3.50 3.50 3.50
Economic Development 1.00 1.00 1.00 1.00 1.00
Planning 2.00 2.00 2.00 2.00 2.00
Community Development 2.00 2.00 2.75 2.75 2.75
Engineering - -
Building 1.00 1.00 1.00 1.00 1.00
Other 0.55 0.55 1.15 1.15 1.40
Total General Government 15.68 15.68 17.03 17.03 17.28
Public Safety
Officers 22.00 22.00 25.00 26.00 26.00
Civilians 4.00 4.00 4.75 4.75 4.75
Building Inspection 4.00 4.00 4.25 4.25 4.25
Total Public Safety 30.00 30.00 34.00 35.00 35.00
Public Works
Streets 5.85 5.85 6.35 6.85 7.35
Other 1.15 1.15 1.15 1.15 1.15
Total Public Works 7.00 7.00 7.50 8.00 8.50
Parks, Recreation and Forestry 9.15 9.15 9.05 9.55 9.80
Water 2.15 2.15 2.15 2.15 2.15
Sewer 2.15 2.15 2.15 2.15 2.15
Total 66.13 66.13 71.88 73.88 74.88
Source: City Finance Office
110
Table 14 (Continued)
2008 2009 2010 2011 2012
-- 5.00 5.00 4.00 3.50 3.50
0.63 0.63 0.63 -
3.50 3.50 3.00 3.00 3.00
1.00 1.00 1.00 1.00 1.00
2.00 2.00 2.00 1.00 1.00
2.75 2.75 2.25 2.00 2.00
1.00 1.00 1.00 -
1.40 1.40 1.40 0.70 0.70
17.28 17.28 15.28 11.20 11.20
27.00 27.00 27.00 25.00 25.00
4.75 4.75 4.25 4.00 3.00
4.25 4.25 2.75 2.50 2.50
36.00 36.00 34.00 31.50 30.50
7.35 7.35 6.85 7.00 7.00
1.15 1.15 1.15 1.00 1.00
8.50 8.50 8.00 8.00 8.00
9.80 9.80 9.30 9.00 9.00
2.15 2.15 2.15 2.15 2.15
2.15 2.15 2.15 2.15 2.15
- 75.88 75.88 70.88 64.00 63.00
Wow
WNW
111
CITY OF LINO LAKES, MINNESOTA
OPERATING INDICATORS BY FUNCTION /PROGRAM
Last Ten Years
Function /Program
Table 15
Fiscal Year
2003 2004 2005 2006
General Government
Elections 1 2 1 2
Registered voters 9,911 11,718 11,035 11,618
Number of votes cast 4,650 10,147 5,288 8,284
Voter participation (registered) 46.9% 86.6% 47.9% 71.3%
Public Safety
Police:
Calls for Service 6,785 6,797 6,973 6,990
Traffic Citations & Warnings 2,624 3,319 6,609 5,964
Part I Crimes 2,165 1,716 1,375 3,372
Part II Crimes 5,074 3,497 3,119 4,890
Inspections:
Building Permits (1) 826 835 837 686
Inspections N/A N/A N/A N/A
Value of Building Permits $55,864,076 $61,579,910 $53,686,592 $42,078,007
Public Works
General Maintenance (hours) 2,656 3,263 6,014 5,692
Street Maintenance (hours) 4,082 3,533 3,106 3,631
Fleet Maintenance (hours) 3,780 3,804 4,440 4,460
Snow Plowing /Sanding (hours) 1,020 855 1,003 867
Culture and Recreation
Parks:
Park Maintenance (hours) N/A 10,210 10,577 10,368
Utilities
Water Maintenance (hours) N/A 4,349 3,904 4,387
Sanitary Sewer Maintenance (hours) N/A 3,347 4,092 3,347
Source: Various City Departments
Notes:
Information not available is labeled N /A.
(1) 1,565, 4,337 and 581 repair permits issued in 2007 and 2009, respectively, due to storm damage.
112
NNW
Mow
Immir
Table 15 (Continued)
Fiscal Year
2007 2008 2009 2010 2011 2012
1 2 1 2 1 2
10,908 12,723 11,805 12,284 11,705 13,478
2,337 11,051 4,354 8,545 4,314 11,546
21.4% 86.9% 36.9% 69.6% 36.9% 85.7%
7,053 6,871 6,353 6,398 6,384 6,344
3,805 3,252 3,187 2,743 2,604 2,694
1,279 1,461 1,075 982 1,117 N/A
3,432 3,767 3,151 2,911 2,911 N/A
2,297 5,041 1,535 509 452 459
N/A N/A N/A N/A N/A N/A
$30,539,559 $15,852,780 $ 9,586,160 $ 11,295,493 $ 11,295,493 $ 10,751,626
6,758 6,129 5,870 4,945 7,416 6,939
2,916 3,851 3,267 3,099 4,352 5,926
4,144 5,043 4,782 4,850 4,214 3,945
1,425 1,353 950 1,638 1,534 594
10,939 11,136
12,406 9,257
9,813 9,739
4,256 5,716 5,041 3,560 3,568 3,585
4,148 3,760 3,486 3,531 3,557 3,517
113
CITY OF LINO LAKES, MINNESOTA
CAPITAL ASSET STATISTICS BY FUNCTION /PROGRAM
Last Ten Years
Function /Program
Table 16
Fiscal Year
2003 2004 2005 2006 2007
Public Safety
Police:
Stations 1 1 1 1 1
Patrol Units 9 10 11 12 12
Fire (Joint Powers):
Stations in City 1 1 1 1 1
Fire Trucks 4 4 4 5 5
Public Works
Lights 489 489 559 673 673
Vehicles 28 29 29 29 29
City Streets (miles) 93.8 94.3 95.5 96 96.1
Culture and Recreation
Parks:
Parks 19 19 18 18 18
Park Acres 142 142 141 141 141
Trails (miles) 18 18 19 20 26
Park Shelters 4 5 5 7 7
Basketball Courts 6 6 6 6 6
Fishing Pier 1 1 1 1 1
Skating Rinks 4 4 4 4 4
Soccer Fields 8 8 8 8 8
Baseball /Softball Fields 18 18 18 20 20
Tennis Courts 2 2 2 2 2
Playgrounds 17 17 17 16 16
Water
Distribution System (miles) 46.2 48.2 50.8 51.1 64.7
Water Connections 3,548 3,738 3,957 4,090 4,112
Gallons Pumped (millions) 518 474 475 565 595
Number of Fire Hydrants 452 490 523 538 538
Water Tower Capacity (millions gallons) 2 2 2 2 2
Sanitary Sewer
Collection System (miles) 59.2 61.4 63.5 63.3 64.5
Sewer Connections 3,763 3,960 4,142 4,282 4,428
Storm Sewer
Pipe (miles)
Source: Various City Departments
31.3
114
31.9 33.1
34.1 34.3
Table 16 (Continued)
Fiscal Year
2008 2009 2010 2011 2012
1
12
5
1
12
1
5
1 1 1
12 12 12
1 1 1
5 5 5
673 673 673 673 673
29 29 29 29 29
100.71 100.71 100.71 100.71 100.71
18 18 18 18 18
141 141 141 141 141
26 26 26 26 26
7 7 7 6 6
6 6 6 6 6
1 1 1 1 1
4 4 4 4 4
8 8 8 8 8
20 20 20 20 20
2 2 2 2 2
16 16 16 16 16
74.7 74.7 74.7 74.7 74.7
4,247 4,340 4,382 4,424 4424
590 589 498 492 609
538 538 538 538 538
2 2 2 2 2
69.8 69.8 69.8 69.8 69.8
4,447 4,486 4,530 4,567 4567
41.4 41.4 41.4
41.4 41.4
41)
CliftonLarsonAllen
CliftonLarsonAllen LLP
www.cliftonlarsonallen.com
INDEPENDENT AUDITORS' REPORT ON MINNESOTA LEGAL COMPLIANCE
Honorable Mayor and
Members of the City Council
City of Lino Lakes
Lino Lakes, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standard applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, 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 December 31, 2012 and the related notes
to the financial statements, which collectively comprise the City's basic financial statements as listed in
the table of contents and have issued our report thereon dated May 22, 2013.
The Minnesota Legal Compliance Audit Guide for Political Subdivisions covers seven categories of
compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public
indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financing.
In connection with our audit, nothing came to our attention that caused us to believe that the City of
Lino Lakes, Minnesota failed to comply with the provisions of the Minnesota Legal Compliance Audit
Guide for Political Subdivisions. However, our audit was not directed primarily toward obtaining
knowledge of such noncompliance. Accordingly, had we performed additional procedures, other
matters may have come to our attention regarding the City of Lino Lakes, Minnesota's noncompliance
with the above - referenced provisions.
The purpose of this report is solely to describe the scope of our testing of compliance and the results of
that testing, and not to provide an opinion on compliance. Accordingly, this communication is not
suitable for any other purpose.
CliftonLarsonAllen LLP
Minneapolis, Minnesota
May 22, 2013
NEXIA
INTERNATIONAL
M indepentlenl mentor of Nelda Irtanelimel
CliftonLarsonAllen
Honorable Mayor and Members of the City Council
City of Lino Lakes, Minnesota
CliftonLarsanAllen LLP
www.diftonlarsonallen.com
We have audited the financial statements of the governmental activities, the business -type activities, each
major fund, and the aggregate remaining fund information of the City of Lino Lakes (the City) for the year ended
December 31, 2012, and have issued our report thereon dated May 22, 2013. We have previously
communicated to you information about our responsibilities under auditing standards generally accepted in the
United States of America and Government Auditing Standards, as well as certain information related to the
planned scope and timing of our audit. Professional standards also require that we communicate to you the
following information related to our audit.
Significant audit findings
Qualitative aspects of accounting practices
Accounting policies
Management is responsible for the selection and use of appropriate accounting
accounting policies used by the City are described in Note 1 to the financial statements.
For the year ended December 31, 2012, the financial statements include the
Governmental Accounting Standards Board statement numbers 62 and 63.
policies. The significant
impact of adoption of
GASBS 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre - November 30,
1989 FASB and AICPA Pronouncements, supersedes GASBS 20. GASBS 20 gave governments the choice
to elect to follow only GASB's authoritative literature, or to follow FASB and AICPA pronouncements that
did not conflict with GASB pronouncements. Upon adoption of GASBS 62, all governmental accounting
guidance is codified into the GASB literature.
GASBS 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net
Position, provides guidance on deferred outflows and inflows of resources. It also renames the residual
amounts from "net assets" to "net position ". These financial statements include the statement of net
position, which reports all assets, deferred outflows of resources, liabilities, deferred inflows of
resources, and net position. Adoption of future GASB standards will include reporting of some items
previously reported as assets and liabilities as deferred outflows and inflows of resources.
We noted no transactions entered into by the City during the year for which there is a lack of authoritative
guidance or consensus. All significant transactions have been recognized in the financial statements in the
proper period.
NEXIA
INTERNATIONAL
M ntlepertlent neither at Nada Inlerrreliarrel
Honorable Mayor and Members of the City Council
City of Lino Lakes, Minnesota
Page 2
Qualitative aspects of accounting practices (Continued)
Accounting estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based
on management's knowledge and experience about past and current events and assumptions about future
events. Certain accounting estimates are particularly sensitive because of their significance to the financial
statements and because of the possibility that future events affecting them may differ significantly from those
expected. The most sensitive estimates affecting the financial statements were:
• Management's estimate of the useful lives of capital assets is based on authoritative guidance and past
experience. We evaluated the key factors and assumptions used to develop the useful lives of capital
assets in determining that it is reasonable in relation to the financial statements taken as a whole.
• Management's estimate of the allowance for doubtful accounts is based on collection history of
ambulance billings and an analysis of the collectability of individual accounts.
• Management's estimate of the amount of the year -end compensated absences payable to employees is
based on historical trends and anticipated leave time activity.
• Management's estimate of the investments at fair value is based on published market values at
December 31, 2012.
Financial statement disclosures
Certain financial statement disclosures are particularly sensitive because of their significance to financial
statement users. There were no particularly sensitive financial statement disclosures.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties encountered in performing the audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Uncorrected misstatements
Professional standards require us to accumulate all misstatements identified during the audit, other than those
that are clearly trivial, and communicate them to the appropriate level of management. Management did not
identify and we did not notify them of any uncorrected financial statement misstatements.
Disagreements with management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing
matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the
auditors' report. No such disagreements arose during our audit.
Management representations
We have requested certain representations from management that are included in the management
representation letter dated May 22, 2013.
Honorable Mayor and Members of the City Council
City of Lino Lakes, Minnesota
Page 3
Management consultations with other independent accountants
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an
accounting principle to the City's financial statements or a determination of the type of auditors' opinion that
may be expressed on those statements, our professional standards require the consulting accountant to check
with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such
consultations with other accountants.
Significant issues discussed with management prior to engagement
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to engagement as the City's auditors. However, these discussions
occurred in the normal course of our professional relationship and our responses were not a condition to our
engagement.
Other audit findings or issues
We have provided a separate letter to you dated May 22, 2013, communicating internal control related matters
identified during the audit.
Audits of group financial statements
We noted no matters related to the group audit that we consider to be significant to the responsibilities of those
charged with governance of the group.
We have provided a separate letter to you dated May 22, 2013, communicating internal control related matters
relevant to the group audit and identified by us or by a component auditor during the audit.
Other information in documents containing audited financial statements
With respect to the required supplementary information (RSI) accompanying the financial statements, we made
certain inquiries of management about the methods of preparing the RSI, including whether the RSI has been
measured and presented in accordance with prescribed guidelines, whether the methods of measurement and
preparation have been changed from the prior period and the reasons for any such changes, and whether there
were any significant assumptions or interpretations underlying the measurement or presentation of the RSI. We
compared the RSI for consistency with management's responses to the foregoing inquiries, the basic financial
statements, and other knowledge obtained during the audit of the basic financial statements. Because these
limited procedures do not provide sufficient evidence, we did not express an opinion or provide any assurance
on the RSI.
With respect to the combining fund statements and other supplementary financial information (collectively, the
supplementary information) accompanying the financial statements, on which we were engaged to report in
relation to the financial statements as a whole, we made certain inquiries of management and evaluated the
form, content, and methods of preparing the information to determine that the information complies with
accounting principles generally accepted in the United States of America, the method of preparing it has not
changed from the prior period or the reasons for such changes, and the information is appropriate and complete
in relation to our audit of the financial statements. We compared and reconciled the supplementary information
to the underlying accounting records used to prepare the financial statements or to the financial statements
themselves. We have issued our report thereon dated May 22, 2013.
Honorable Mayor and Members of the City Council
City of Lino Lakes, Minnesota
Page 4
Other information in documents containing audited financial statements (Continued)
Other information is being included in documents containing the audited financial statements and the auditors'
report thereon. Our responsibility for such other information does not extend beyond the financial information
identified in our auditors' report. We have no responsibility for determining whether such other information is
properly stated and do not have an obligation to perform any procedures to corroborate other information
contained in such documents. As required by professional standards, we read the Introductory Section and
Statistical Information (the other information) in order to identify material inconsistencies between the audited
financial statements and the other information. We did not identify any material inconsistencies between the
other information and the audited financial statements.
This communication is intended solely for the information and use of the Mayor and City Council and
management of the City and is not intended to be and should not be used by anyone other than these specified
parties.
CliftonLarsonAllen LLP
Minneapolis, Minnesota
May 22, 2013
Ll)