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HomeMy WebLinkAboutComprehensive Annual Financial Report 12/31/2005COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF LINO LAKES, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2005 Prepared By: Finance Department Alan Rolek, Director of Finance Paula Schloer, Accountant CITY OF LINO LAKES, MINNESOTA "FABLE OF CONTENTS Page Reference Number I. INTRODUCTORY SECTION Principal City Officials 1 Organizational Chart 2 Letter of Transmittal 3 Certificate of Achievement for Excellence in Financial Reporting 7 II. FINANCIAL SECTION Independent Auditors' Report 8 Management's Discussion and Analysis 10 Basic Financial Statements Statement of Net Assets Statement 1 20 Statement of Activities Statement 2 21 Balance Sheet - Governmental Funds Statement 3 23 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets Statement 4 25 Statement of Revenues, Expenditures, and Changes in Fund Balance - — Governmental Funds Statement 5 26 Reconciliation of the Governmental Funds Statement of Revenue, Expenditures and Changes in Fund Balance to the Statement of Activities Statement 6 28 Statement of Net Assets - Proprietary Funds Statement 7 29 Statement of Revenues, Expenses and Changes in Net Assets - — Proprietary Funds Statement 8 30 CITY OF LINO LAKES, MINNESOTA TABLE OF CONTENTS Statement of Cash Flows - Proprietary Funds Statement of Net Assets - Fiduciary Funds Notes to Financial Statements Required Supplementary Information General Fund: Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Notes to Required Supplementary Information Combining Fund Financial Statements Combining Balance Sheet — Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balance — Nonmajor Governmental Funds Special Revenue Fund — Program Recreation: Schedule of Revenue, Expenditures and Changes in Fund Balance — Budget and Actual Statement of Changes in Assets and Liabilities — Fiduciary Funds Supplementary Financial Information Combined Schedule of Indebtedness Schedule of Deferred Tax Levies Debt Service Payments to Maturity - All Bonds Insurance in Force Taxable Valuations, Tax Levies and Tax Rates III. STATISTICAL SECTION General Fund: Expenditures By Function - Last Ten Fiscal Years Revenue By Source - Last Ten Fiscal Years Page Reference Number Statement 9 31 Statement 10 32 33 Statement 11 54 60 Statement 12 61 Statement 13 68 Statement 14 75 Statement 15 76 Exhibit 1 Exhibit 2 Exhibit 3 Exhibit 4 Exhibit 5 77 79 81 84 85 Table 1 86 Table 2 87 CITY OF LINO LAKES, MINNESOTA TABLE OF CONTENTS Page Reference Number IMP Property Tax Levies and Collections - Last Ten Fiscal Years Special Assessment Levies and Collections - Last Ten Fiscal Years Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures - Last Ten Fiscal Years Assessed and Estimated Actual Value of Taxable Property - Table 3 88 Table 4 89 Table 5 90 Last Ten Fiscal Years Table 6 91 Last Ten Fiscal Years Table 7 93 Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita - Last Ten Fiscal Years Table 8 94 Computation of Direct and Overlapping Debt including Debt Ratios Table 9 95 Computation of Legal Debt Margin Table 10 96 Property Tax Rates - Direct and Overlapping Governments - Schedule of Revenue Bond Coverage - Water Fund - Last Ten Fiscal Years Table 11 97 Principal Taxpayers Table 12 98 Property Value, Construction Permits and Bank Deposits - Last Ten Fiscal Years Table 13 99 Demographic Statistics Table 14 100 Miscellaneous Statistics Table 15 101 I. INTRODUCTORY SECTION MIN CITY OF LINO LAKES, MINNESOTA PRINCIPAL CITY OFFICIALS December 31, 2005 Mayor: John Bergeson Council Members: Caroline Dahl Jeff Reinert Donna Carlson Daniel Stoltz Elected Officials Appointed Personnel Term Expires December 31, 2005 December 31, 2005 December 31, 2005 December 31, 2007 December 31, 2007 City Administrator Gorden Heitke Director of Administration Daniel Tesch _. Director of Finance Alan Rolek Director of Public Safety David Pecchia Director of Community Development Micheal Grochala Director of Public Service Rick DeGardner City of Lino Lakes Organizational Chart Commissions Cable Parks and Recreation Citizens Honorable Mayor and City Council — Economic Development — Planning and Zoning Fire Environmental City Administrator City Clerk Professional Consultants Engineering [ Attorney Fiscal Public Services Public Safety Administration Community Development Finance Parks Police • Human Resources Public Works — Emergency Management Administrative Services Recreation 2 Nanning — Economic Development Accounting Management Infomration Systems • Engineering Utility Billing — Environmental Services Inspections WIMP anno INNER Iwo C I T Y RNIO! June 1, 2006 IIonorable Mayor Members of the City Council Citizens of the City of Lino Lakes, Minnesota OF KES Minnesota State law requires that cities over 2,500 population publish within six months of the close of each fiscal year a complete set of financial statements presented in conformity with U.S. generally accepted accounting 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, 2005. This report consists of management's representations concerning the finances of the City of Lino Lakes. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Lino Lakes has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City of Lino Lakes' financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the city's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City of Lino Lakes' financial statements have been audited by Larson, Allen, Weishair and Co., LLP, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended December 31, 2005, 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, 2005, 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. (00 Town Center ParkvvaV, Lino 141:e, ,Alinnesota 55014-1182 Phone: 651 -082 -240 • F4y: 651 -082 -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 19,285. The population has more than doubled from the 1990 census figure of 8,807 and has grown by 15% since 2000. Within the City's borders lies the 2,550 acre Rice Creek Chain of Lakes Regional Park. Access to St. Paul and Minneapolis is provided by I -35W and I -35E. The City Charter, as amended, establishes a mayor - council form of government and grants the city council full policy- making and legislative authority to the mayor and four council members. The city council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and hiring a city administrator. The city administrator has the responsibility of carrying out the policies and ordinances of the city council, for overseeing the day -to -day operation of the city. The city council is elected at -large on a non - partisan basis, with council members serving four -year terms and the mayor serving a two -year term. Elections are held every two years with two council seats and the mayor being up for election each election cycle. The City provides a full range of municipal services. These services include: general government, public safety (police & fire), public works (streets & fleet), parks and recreation, conservation of natural resources (environmental & solid waste abatement), public improvements, providing and maintaining sanitary and storm sewer, water infrastructure, and two enterprise funds, the water and sewer funds. The annual budget is the foundation for the City of Lino Lakes' financial planning and control. All divisions are required to submit appropriations requests to the city administrator for review and consolidation into a proposed budget. The city administrator is responsible for submitting the proposed annual budget to the City Council in August of each year. The city council is required to hold a public hearing on the proposed budget and to adopt by resolution a final budget and certify it no later than December 28. The budget amounts cannot increase beyond the estimated receipts except to the extent that actual receipts exceed the estimate. Division directors may make transfers of appropriations within a department, but transfers of appropriations between departments require council approval. Budget -to- actual comparisons for the general fund and the recreation program fund, the only funds for which an annual budget has been adopted, are provided in this report beginning on pages 54 and 75, 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 in 1993 by the city council has made an impact in the diversity of the City's tax base. Since 1993, the city has added more than $100 million in additional commercial /industrial market value. Development of the Apollo Business Park on I -35W is nearly completed, and the Clearwater Creek Development Center on I -35E continues to attract industrial development. The commercial retail center on Lake Drive and Apollo Drive in the Town Center area, known as the Lino Lakes Marketplace, has continued to develop. The two anchor tenants, Target and Kohl's, were completed and opened in 2002. A Dairy Queen Grill `n Chill restaurant was completed and opened in 2003, and a Discount Tire store opened in mid -2004. Two new retail buildings of approximately 6,000 square feet each were added to the area during 2005, and the developer is currently obtaining leases for this space. A Wells Fargo branch bank was also constructed in this area during 2005 and opened in early 2006. 4 Building permits for new homes in 2005 numbered 196, exceeding 2004 permits by 6 units. Commercial /industrial development continued at a steady pace. A 12,582 square foot building was built by Schwan's in the Marshan Industrial Park on the southwest quadrant of I -35W and Lake Drive was completed in 2005, further contributing jobs and adding approximately $1.3 million in value to the city's growing commercial /industrial tax base. A two -story office building is currently being constructed at the intersection of Lake Drive and Hodgson Road which will house E.G. Rud Surveyors and several other tenants. The City initiated an Alternative Urban Areawide Review (AUAR) of property in excess of 4,000 acres in the northeast quadrant of the city, which includes property in the I -35E corridor, to assess the impact of future development scenarios in this area. The AUAR was completed and accepted by the City Council in October, 2005. The AUAR included the proposed Hardwood Creek development, a 360 acre master - planned mixed -use development. If approved, the development would include approximately 1,100 dwelling units and 600,000 square feet of commercial /retail buildings and preserve 90 acres of green space. Long -term financial planning. The city has entered into an agreement with Hartford Development LL, LLC, to develop 40 acres in the southeast quadrant of I -35W and Lake Drive. This mixed -use development will occur over a period of two to five years and would include up to 450 dwelling units, retail commercial business, a community green and park and trail amenities and a 60 -unit motel. Anoka County is considering placing a branch library in the development as well. Country Inn and Suites began construction in early 2006 and will complete the building by fall. The YMCA, in partnership with the city, is also planning a facility within the development. The city's participation in the YMCA will be $2.35 million of the $8.2 million project, plus land and infrastructure. The city plans to issue G.O. Tax Abatement bonds to finance its contribution to this project, as well as $4.0 million in conduit debt. The city has also secured a CDBG grant of $125,000 to be used toward a teen center within the YMCA. Construction on the facility is scheduled to begin in late spring, 2006. To facilitate this development, street, streetscape, water, sewer, and storm water improvements must be installed within the development area, as well as improvements to the existing Lake Drive. Engineering estimates for these improvements is estimated at approximately $9 million. Construction began in Fall, 2005, financed with ▪ the sale of $5,550,000 in G.O. Improvement and the future issuance of G.O. Tax Increment bonds. It is acknowledged that this development will result in additional ongoing costs involved in servicing and maintaining the streets and public areas, which will be addressed in future operating budgets. The city's five -year financial plan, which is currently under review, identifies street and utility improvements totaling $33,173,000 over the period of 2006 through 2010. These improvements are anticipated to be funded • through a number of funding sources, including special assessments, municipal state aid road funds, the area and unit trunk fund, the stormwater management fund, tax increment financing and voter - approved tax levies. Improvements to several of the city's neighborhood parks and the city's trail system are also planned over this period in the amount of $230,000. These improvements will be funded through park dedication fees and the dedicated parks fund. Cash management policies and practices. The City's policy is to invest all available moneys at competitive rates in accordance with Minnesota law. Investments are made by minimizing credit and market risks while maintaining a competitive yield. Funds are invested in certificates of deposit, commercial paper and U.S. government agencies. Cash is pooled in one account to provide maximum return. The City Council reviews the investment policy annually and last amended it in 1998. The City is implementing the Government Accounting Standards Board (GASB) Statement No. 40 relating to Deposit and Investment Risk Disclosures and amending GASB Statement No. 3, which can be found in the Notes to the Financial Statements beginning on page 41. WIMP 5 Cash temporarily idle during the year was invested in certificates of deposit, commercial paper, and obligations of the U.S. Treasury. The City's investment policy's primary objective is safety of principal. Therefore, all deposits were either insured by Federal depository insurance or were collateralized as required by State Statute. Due to the weakened economy, a low interest rate environment has persisted over the few years and has had a significant impact on the city's investment earnings. The average yield on investments for 2005 was 2.98 %. Investment income includes positive or negative changes in the fair value of investments. Changes in fair value during the current year, however, do not necessarily represent trends that will continue; nor is it always possible to realize such amounts, especially in the case of temporary changes in the fair value of investments the city intends to hold to maturity. Risk management. The City's general property, liability and worker's compensation coverage is provided through the League of Minnesota Cities Trust (LMCIT). At the beginning of the insurance year, the city deposits with LMCIT a premium determined by calculating estimated payroll and applying experience modification ratios. An audit is performed at the end of the insurance year, which may produce a refund or an adjustment due. LMCIT's reserves and rates are reviewed annually by an actuary to assure that the program remains financially strong. Pension benefits. The City of Lino Lakes participates in a statewide defined benefit pension plan administered by the Public Employees Retirement Association of Minnesota (PERA). All full -time and part-time employees are covered by PERA. PERA administers the Public Employees Retirement Fund (PERF) which is a cost - sharing, multiple- employer retirement plan. A plan description and funding policy are included in the Notes to the Financial Statements beginning on page 48. 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, 2004. This marks the ninth consecutive year that the city has received this prestigious award. A governmental unit must publish an easily readable and efficiently organized comprehensive annual financial report, the contents of which conform to program requirements. This report must satisfy both U.S. 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 2005 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 Depai tment, auditors and other city staff. I also want to express my appreciation to the Mayor and City Council for their support for maintaining the highest standard of professionalism in the management of the financial operation of the City. Respectfully submitted, Alan J. Rolek Director of Finance 6 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, 2004 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in goy, ernxnent accounting and financial reporting. 66.44../ e—fe-4-1-er President 4°0,9f,, Executive Director II. FINANCIAL SECTION - Lars,- nAllen' MEM IMMO Wiwo CPAs, Consultants & Advisors www.larsonallen.com INDEPENDENT AUDITORS' REPORT I lonorable Mayor and Members of the City Council City of Lino Lakes, Minnesota We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Lino Lakes, Minnesota as of and for the year ended December 31, 2005, which collectively comprise the City's basic financial statements as listed in the table of contents. These basic financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these basic financial statements based on our audit. We conducted our audit in accordance with U.S. generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Lino Lakes, Minnesota as of December 31, 2005, and the respective changes in financial position and cash flows, where applicable, thereof and for the year then ended in conformity with U.S. generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated March 24, 2006 on our consideration of the City of Lino Lakes Minnesota's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grants, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The management's discussion and analysis and budgetary comparison information as listed in the table of contents are not a required part of the basic financial statements but are supplemental information required by U.S. generally accepted accounting principles. We have applied certain limited procedures, which consisted principally of inquires of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. 8 .alien. A1e1;h.iir c l .,.. LI.P I 1n Indepcndicnt Nicinber of Lak.. r I ilh Inrcnurional Our audit was made for the purpose of firming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information, such as the introductory section, combining fund financial statements, supplementary financial information and statistical section listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information, except for the introductory and statistical sections on which we express no opinion, has been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Austin, Minnesota March 24, 2006 9 LARSON, ALLEN, WEISHAIR & CO., LLP Mom Ims MINIM City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2005 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, 2005. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 3 -6 of this report. FINANCIAL HIGHLIGHTS: • The assets of the City of Lino Lakes exceeded its liabilities at the close of the most recent fiscal year by $85,003,253 (net assets). Of this amount $19,149,409 (unrestricted net assets) may be used to meet the City's ongoing obligations to citizens and creditors in accordance with the City's fund designations and fiscal policies. • The City's total net assets increased by $5,443,025. • As of the close of the current fiscal year, the City of Lino Lakes' governmental funds reported combined ending fund balance of $21,302,986, an increase of $5,825,395 in comparison with the prior year. Approximately 60% of this total amount, or $12,724,100 is available for spending at the City's discretion (unreserved fund balance). • At the end of the current fiscal year, unreserved fund balance for the general fund was $5,300,156, or 72% of total general fund expenditures. • The City of Lino Lakes' total bonded debt increased by $7,116,000 (35 percent) during the current fiscal period. The key factors for the increase were the financing of improvements in the Legacy Woods Edge development and the refunding of the 1998A and 1998B Improvement bonds that will be called and retired in February, 2006. OVERVIEW OF THE FINANCIAL STATEMENTS: This discussion and analysis are intended to serve as an introduction to the City of Lino Lakes' basic financial statements. The City of Lino Lakes' basic financial statements comprise three components: 1. Government -wide financial statements 2. Fund financial statements 3. Notes to the financial statements This report also contains other supplementary information in addition to the basic financial statements themselves. Government -wide financial statements. The government -wide financial statements are designed to provide readers with a broad overview of the City of Lino Lakes' finances, in a manner similar to private - sector business. The statement of net assets presents information on all of the City of Lino Lakes' assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City of Lino Lakes is improving or deteriorating. The statement of activities presents information showing how the City's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused compensated absences). 10 City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2005 Both of the government -wide financial statements distinguish functions of the City of Lino Lakes that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City of Lino Lakes include general government, public safety, public services, parks, recreation and forestry, conservation of natural resources and community development. The business -type activities of the City of Lino Lakes include a water utility and sewer utility. The government -wide financial statements can be found on pages 20 -22 of this report. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Lino Lakes, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance - related legal requirements. All of the funds of the City of Lino Lakes can be divided into two categories: governmental funds and proprietary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long -term impact of the government's near -term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental functions and governmental activities. The City of Lino Lakes maintains forty -three 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 2002B fund, G.O. improvement bonds 2005A fund, area and units charge fund and Legacy Woods Edge improvement fund, all of which are considered to be major funds. Data from the other thirty -eight governmental funds are combined into a single, aggregate presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The City of Lino Lakes adopts an annual appropriated budget for its general and program recreation special revenue funds. A budgetary comparison statement has been provided for these funds to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 23 and 28 of this report. Proprietary funds. The City of Lino Lakes maintains two proprietary type funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City of Lino Lakes uses enterprise funds to account for its sewer and water utilities. The proprietary fund statements provide the same type of information as the government -wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the sewer fund and the water fund, which are considered to be major funds of the City of Lino Lakes. The basic proprietary fund financial statements can be found on pages 29 through 31 of this report. II limmt City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2005 Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on pages 33 -53 of this report. Other information. The combining statements and schedules referred to earlier in conjunction with nonmajor governmental funds can be found on pages 61 -74 of this report. GOVERNMENT -WIDE FINANCIAL ANALYSIS: As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. The City of Lino Lakes' assets exceeded liabilities by $85,003,253 at the close of the most recent fiscal year, an increase of $5,443,025 over the previous year. By far the largest portion of the City of Lino Lakes' net assets (63 percent) reflects its investment in capital assets (e.g. land, buildings, machinery, equipment, and infrastructure), less any related debt used to acquire those assets that is still outstanding. The City of Lino Lakes uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Lino Lakes' investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. A condensed version of the Statement of Net Assets at December 31, 2005 follows: Net Assets at Year -end (in millions) Governmental Business -type Total Activities Activities Government 2005 2004 2005 2004 2005 2004 Current and other assets $32.88 $20.88 $5.72 $4.89 $38.60 $25.77 Capital assets 45.45 46.10 30.77 29.42 76.22 75.52 Total assets 78.33 66.98 36.49 34.31 114.82 101.29 Non - current liabilities outstanding 25.42 17.82 2.45 2.75 27.87 20.57 - Other liabilities 1.82 1.06 .12 .10 1.94 1.16 Total liabilities 27.24 18.88 2.57 2.85 29.81 21.73 Net assets: - Invested in capital assets, net of related debt 25.46 28.80 28.35 26.71 53.81 55.51 Restricted 12.05 3.07 - 12.05 3.07 - Unrestricted 13.58 16.23 5.57 4.75 19.15 20.98 Total net assets $51.09 $48.10 $33.92 $31.46 $85.01 $79.56 Of the remaining balance of the City of Lino Lakes' net assets, restricted net assets (14 percent) are to be used for debt service requirements. Unrestricted net assets (23 percent) may be used to meet the government's ongoing obligations to citizens and creditors. 12 City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2005 At the end of the current fiscal year, the City of Lino Lakes is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business -type activities. Governmental activities. Governmental activities increased the City of Lino Lakes' net assets by $2,986,228, thereby accounting for 55 percent of the total growth in the net assets of the City of Lino Lakes. The most significant change in governmental net assets is due to the effect of accounting for net assets under the full accrual basis. Under full accrual accounting, current year outlay for infrastructure will be expensed over the useful life of the infrastructure. This capital outlay for the infrastructure is budgeted for during the current year. Business -type activities. Business -type activities increased the City of Lino Lakes' net assets by $2,456,797, thereby accounting for 45 percent of the total growth in the net assets of the City of Lino Lakes. Developers' contribution of infrastructure assets to the water and sewer funds accounted for a significant portion of that increase. Condensed statements of revenues, expenses, and changes in net assets highlights are as follows for the year ended December 31, 2005: Governmental and Business -Type Activities For the Year Ended December 31, 2005 (in millions) Governmental Business -Type Total Activities Activities Government 2005 2004 2005 2004 2005 2004 Revenues Program revenues Charges for services $1.77 $1.91 $2.39 $2.26 $4.16 $4.17 Operating grants and contributions .76 .68 - - .76 .68 Capital grants and contributions 10.13 7.52 1.74 1.59 11.87 9.11 General revenues Property taxes 7.25 6.52 7.25 6.52 Franchise taxes .14 .11 .14 .11 Unrestricted investment earnings .44 .22 .12 .03 .56 .25 Contribution to permanent fund .10 .00 .00 .00 .10 .00 Other .06 1.28 - - .06 1.28 Total revenues 20.65 18.24 4.25 3.88 24.90 22.12 Expenses General government Public safety Public services Parks, recreation and forestry Conservation of natural resources Community development Interest on long -term debt Water Sewer Total expenses Change in net assets before transfers Transfers Change in net assets Net assets - beginning Net assets - ending 2.94 2.52 - 2.94 2.52 3.09 2.80 3.09 2.80 9.19 7.25 - 9.19 7.25 .80 1.20 .80 1.20 .15 .12 .15 .12 .38 .42 .38 .42 .80 .76 - .80 .76 .88 .91 .88 .91 1.22 1.13 1.22 1.13 17.35 15.07 2.10 2.04 19.45 17.11 3.30 3.17 2.15 1.84 5.45 5.01 (.31) (.30) .31 .30 - - 2.99 2.87 2.46 2.14 5.45 5.01 48.10 45.23 31.46 29.32 79.56 74.55 $51.09 $48.10 $33.92 $31.46 $85.01 $79.56 13 City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2005 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 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- o Jec��en� J�\\G eaket� \\G e�\ce5 a�a�ote5�� \�eeo JCOes Geaeta\g P Pte° eGteat \o� o��a�Jta �J��c� Pate God oz`s G deJe\op �on9 \e`er d te5 • Expenses • Revenues Revenues by Source - Governmental Activities Unrestricted investment earnings 2% Franchise fees 1% R-operty taxes 35% Other 0% Charges for services 14 9% Operating grants and contributions 4% Capital grants and - contributions 49% City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2005 Below are specific graphs that provide comparisons of the business -type activities' direct program revenues with their expenditures. Excess revenues are retained within each fund until such time that capital replacement is needed. Expenses and Program Revenues — Business -type Activities $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 Water Sewer o Expenses • Revenues Revenues by Source — Business -type Activities Other 3% Capital grants and contributions 41% 15 Charges for services — 56% City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2005 FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS: As noted earlier, the City of Lino Lakes uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. Governmental Funds. The focus of the City of Lino Lakes' governmental funds is to provide information on near -term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Lino Lakes' financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City of Lino Lakes' governmental funds reported combined ending fund balances of $21,302,986, an increase of $5,825,395, or 38% over the previous year. Approximately 75% of this total amount, or $12,724,100, constitutes unreserved fund balance, which is available for spending at the government's discretion. The remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed 1) to liquidate contracts and purchase orders of the prior period ($150,415), 2) to pay debt service ($7,371,359), 3) to fund interfund advances ($957,112), or 4) to fund environmental improvements ($100,000). The general fund is the primary operating fund of the City of Lino Lakes. At the end of the current fiscal year, unreserved fund balance of the general fund was $5,300,156, while the total fund balance was $5,448,808. As a measure of the general fund's liquidity, it may be useful to compare unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 72 percent of total general fund expenditures, while total fund balance represents 74 percent of that same amount. The fund balance of the City of Lino Lakes' general fund increased by $238,343 during the current fiscal year. Reasons for this increase include increased building activities which increased permit revenue, increased federal and state aid for police operations, a higher investment earnings due to a rising rate environment, and increased gas franchise taxes due to rising energy costs. In addition. reduced expenditures, primarily for personal services, contributed toward the increase in fund balance. Overall, the general fund's revenues were slightly below the amended budget, while expenditures were 4% below budgeted levels. The G.O. taxable improvement bonds 2002B fund has a total fund balance of $513,443, all of which is reserved for the retirement of related debt. The net increase of $9,815 in fund balance is the result of the closure of the related capital projects fund to the related debt service fund. The G.O. improvement bonds 2005A fund has a total fund balance of $37,712, all of which is reserved for the retirement of related debt. This is related to the bonds issued for the Legacy Woods Edge improvement project. The area and unit charge fund has a total fund balance of $2,578,898, of which $957,112 is reserved for advances to other funds, and $1,621,786 is unreserved and available for financing capital improvements. The decrease in fund balance during the current year was $1,627,697 and was the result of funding infrastructure projects within the city and transfers for capital projects and for debt service payments. Proprietary funds. The City of Lino Lakes' proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. The water fund has total net assets of $14,000,428, of which $1,918,665 are unrestricted. The increase in net assets of $1,279,482 was primarily due to contributions from private sources and an operating transfer from a capital projects fund and net income. 16 City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2005 Total net assets in the sewer fund at the end of 2005 were $19,914,742, of which $3,653,673 was unrestricted. Net assets increased $1,177,315 during the current year resulting from contributions from private sources and net income. The water and sewer rates remained the same in 2005 as in 2004. A rate study is planned for 2006. GENERAL FUND BUDGETARY HIGHLIGHTS: The original budget was amended four times during the year reflecting donations and grants received primarily for police personnel and equipment. Revenues were $82,066 under budget due mainly to property tax collections. Federal and state intergovernmental revenues, primarily police grant related, were over budget for the year. Investment earnings, due to rising interest rates, and gas franchise fees, as a result of rising energy costs, were also over budget. Expenditures came in under the budgeted amounts by $321,191 due to lower than expected personal services costs. There were also net transfers from the general fund of $467,782. This resulted in a net fund balance increase of $238,343 for the fiscal year. CAPITAL ASSET AND DEBT ADMINISTRATION: Capital assets. The City of Lino Lakes' investment in capital assets for its governmental and business - type activities as of December 31, 2005, amounts to $76,218,607 (net of accumulated depreciation). This investment in capital assets includes land, buildings, office equipment and furniture, vehicles, machinery and equipment, other capital assets, and infrastructure. The total increase in the City of Lino Lakes' investment in capital assets (net of accumulated depreciation) was 1 percent. Most of this increase within the governmental activities can be found in the addition of constructed streets, underground infrastructure and vehicles. Within the business -type activities the most significant increases occurred in infrastructure installation in relation to the water and sewer funds. Capital Assets at Year -end (in millions) Governmental Business -type Activities Activities Totals 2005 2004 2005 2004 2005 2004 Land $2.81 $3.09 $ - $ - $2.81 $3.09 Buildings 6.44 6.44 .05 .05 6.49 6.49 Office equipment and furniture .97 .98 .97 .98 Vehicles 1.52 1.47 1.52 1.47 Machinery and equipment .69 .65 .27 .26 .96 .91 Other .96 .93 .96 .93 Infrastructure 67.33 65.22 37.09 35.38 104.42 100.60 Construction in Progress .36 - .36 Subtotal 80.72 78.78 37.77 35.69 118.49 114.47 Accumulated depreciation 35.27 32.69 7.00 6.27 42.27 38.96 Capital assets, net $45.45 $46.09 $30.77 $29.42 $76.22 $75.51 17 low MEI Woo elmo City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2005 Additional information on the City's capital assets can be found in the notes to the financial statements on pages 33 -53. Long -term debt. At the end of the current fiscal year, the City of Lino Lakes had total debt outstanding of $27,165,000. Of this amount $5,335,000 comprises tax supported debt, $19,405,000 is special assessment debt and $2,425,000 is revenue supported debt. All outstanding debt carries the general obligation backing for which the city is liable in the event of default by the property owners subject to the specific taxes, special assessments or revenues pledged to the retirement of the debt. G.O. tax supported debt G.O. special assessment debt G.O. revenue debt Total Debt Outstanding at Year -end (in millions) Governmental Business -type Activities Activities Totals 2005 2004 2005 2004 2005 2004 $ 5.34 19.40 $ 5.76 11.58 $24.74 $17.34 $ $ - 5.34 $ 5.76 19.40 11.58 2.43 2.71 2.43 2.71 $2.43 $2.71 $27.17 $20.05 The City of Lino Lakes' total bonded debt increased by $7,116,000 (35 percent) during the current fiscal year. The primary reasons for the increase were financing of improvements in the Legacy Woods Edge development, for which $5,550,000 in G.O. Improvement bonds were issued, and the refunding of the 1998A and 1998B Improvement bonds that will be called and retired in February, 2006, for which $3,755,000 in G.O. Improvement Refunding bonds were issued. Both issues are supported by special assessments levied upon benefited parcels. The City of Lino Lakes received an an Al rating from Moody's Investors Service for general obligation debt. More detailed information on the City's long -term liabilities is presented in the notes to the financial statements. Additional information on the City's long -term debt can be found in the notes to the financial statements on pages 33 -53. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES: • The unemployment rate for the City of Lino Lakes is currently 3.8 percent, which is a decrease from a rate of 5.0 percent a year ago. This compares favorably to the state's average unemployment rate of 4.0 percent and the national average of 5.1 percent. • The City of Lino Lakes continues to see increased commercial /industrial construction growth. Residential growth continues to be robust with an increase in the number of new home permits. • Property tax reforms and State budget deficits have significantly impacted local government aid payments the City of Lino Lakes receives. Local government aid and market value homestead credit was reduced to zero for 2003, 2004 and 2005, and are expected to remain at that level for the foreseeable future. • The Federal Reserve Board has begun to increase the fed funds rates, and interest rates are expected to increase over the next year, which are expected to result in increases in the city's investment earnings. City of Lino Lakes, Minnesota Management's Discussion and Analysis December 31, 2005 REQUESTS FOR INFORMATION: This financial report is designed to provide a general overview of the City of Lino Lakes' finances for all of those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Director of Finance, City of Lino Lakes, 600 Town Center Parkway, Lino Lakes, Minnesota, 55014. 19 BASIC FINANCIAL STATEMENTS CITY OF LINO LAKES, MINNESOTA STATEMENT OF NET ASSETS December 31, 2005 Statement I Governmental Business -type Activities Activities Total ASSETS Cash and investments $ 21,274,603 $ 5,257,590 $ 26,532,193 Cash and investments with escrow agent 496,875 - 496,875 Accrued interest receivable 233,023 - 233,023 Accounts receivable 197,916 300,763 498,679 Due from other governments 221,720 - 221,720 Taxes receivable 182,943 - 182,943 Special assessments receivable 9,880,796 148,905 10,029,701 .. Prepaid items 150,415 11,095 161,510 Unamortized bond issue costs 143,471 - 143,471 Permanently restricted cash and investments 100,000 - 100,000 Capital assets: Land 2,809,059 2,809,059 Construction in progress 356,061 356,061 Other capital assets, net of depreciation 42,641,724 30,41 1,763 73,053,487 ... Total assets 78,332,545 36.486,177 114,818,722 LIABILITIES Accounts payable 1,191,870 35,594 1,227,464 Salaries payable 101,784 5,757 107,541 Contracts and retainage payable 158,976 15,860 174,836 Accrued interest payable 358,888 59,786 418,674 Due to other governments 7,789 7.789 Other accrued liabilities - 1,510 1,510 Non - current liabilities: Due within one year 6,332,871 312,874 6,645,745 Due in more than one year 19,092,284 2,139,626 21,231,910 Total liabilities 27,244,462 2,571,007 29,815,469 NET ASSETS Invested in capital assets, net of related debt 25,460,528 28,342,832 53,803,360 Restricted for: Debt service 11,950,484 11,950,484 ..- Environmental improvements - nonexpendable 100,000 100,000 Unrestricted 13,5 77,071 5,572,338 19,149,409 Total net assets S 51,088,083 $ 33,915,170 $ 85,003,253 The accompanying notes are an integral part of these basic financial statements.. CITY OF LINO LAKES, MINNESOTA STATEMENT OF ACTIVITIES Ycar Ended December 31, 2005 Functions /Programs Expenses Governmental Activities: Program Revenues Charges for Services Operating Grants and Contributions Capital Grants and Contributions General government $ 2,941,279 $ 111,480 $ 62,233 $ Public safety 3,091,174 998,210 329,403 Public services 9,187,436 434,087 183,019 Parks, recreation and forestry 799,335 196,951 153,595 Conservation of natural resources 150,092 4,873 33,674 Community development 383,211 26,985 Interest on long -term debt 797,341 - Total governmental activities 17,349,868 1,772,586 761,924 10,128,024 Business -type activities: Water 876,592 1,031,175 784,599 Sewer 1,217,825 1,361,759 949,176 Total business -type activities 2,094,417 2,392,934 1,733,775 Total $ 19,444,285 $ 4,165,520 $ 761,924 $ 11,861,799 10,128,024 The accompanying notes are an integral part of these basic financial statements. 21 General revenues: Taxes: Property taxes, levied for general purpose Franchise Taxes Other taxes Unrestricted investment earnings Contributions to permanent fund principal Other Transfers Total general revenues and transfers Change in net assets Net assets - beginning Net assets - ending Statement 2 Net (Expense) Revenue and Changes in Net Assets Governmental Business -type Activities Activities Total $ (2,767,566) $ $ (2,767,566) (1,763,561) (1,763,561) 1,557,694 1,557,694 (448,789) (448,789) (111,545) (111,545) (356,226) (356,226) (797,341) (797,341) (4,687,334) (4,687,334) - 939,182 939,182 - 1,093,110 1,093,110 - 2,032,292 2,032,292 (4,687,334) 2,032,292 (2,655,042) 7,247,977 7,247,977 134,487 134,487 951 - 951 433,387 120,310 553,697 100,000 - 100,000 60,955 - 60,955 (304,195) 304,195 7,673,562 424,505 8,098,067 2,986,228 2,456,797 5,443,025 48,101,855 31,458,373 79,560,228 $ 51,088,083 $ 33,915,170 $ 85,003,253 22 CITY OF LINO LAKES, MINNESOTA BALANCE SHEET - GOVERNMENTAL FUNDS December 31, 2005 G.O. G.O. Area and Improvement Improvement Unit Assets General Bonds 2002B Bonds 2005A Charge Cash and investments $ 4,882,703 $ 513,443 $ 37,712 $ 1,787,335 Cash and investments with escrow agent - - Accrued interest receivable 231,565 - Accounts receivable 121,527 20,139 Due from other governmental units 216,720 - Interfund receivable 62,468 Taxes receivable: Delinquent 87,542 Due from county 70,462 Delinquent tax increment Special assessments receivable: Delinquent 52,259 - 11,630 Deferred 1,284,517 5,090,691 1,702,724 Due from county - - 3,821 Prepaid items 148,652 Advances to other funds 957,112 Total assets $ 5,821,639 $ 1,850,219 $ 5,128,403 $ 4,482,761 Liabilities and equity Liabi lities: Interfund payable $ - $ $ S - Accounts payable 177,878 169,815 Salaries payable 101,444 - Contracts and retainage payable 19,694 Due to other governmental units 5,967 - Advances from other funds - - - - Deferred revenue 87,542 1 ,336,776 5,090,691 1 ,714,354 Total liabilities 372,831 1,336,776 5,090,691 1,903,863 Fund balances: Reserved Reserved for prepaid items 148,652 - - Reserved for debt retirement 513,443 37,712 - Reserved for advances to other funds - 957,112 Reserved for environmental improvements - Unreserved: Designated: General fund 5,300,156 Special revenue funds - Capital projects funds 1,621,786 Undesignated reported in: Debt service funds Capital projects funds Permanent funds Total equity and other credits 5,448,808 513,443 37,712 2,578,898 Total liabilities and equity $ 5,821,639 $ 1,850,219 $ 5,128,403 $ 4,482,761 The accompanying notes are an integral part of these basic financial statements. 23 No. VEND Legacy Woods Edge Improvement $ 3,174,478 Other Governmental Funds $ 10,978,932 496,875 1,458 56,250 5,000 13,591 10,384 964 6,683 1,724,285 4,186 1,763 Statement 3 Total Governmental Funds $ 21,374,603 496,875 233,023 197,916 221,720 62,468 101,133 80,846 964 70,572 9,802,217 8,007 150,415 957,112 $ 3,174,478 $ 13,300,371 $ 33,757,871 $ $ 759,945 67,636 827,581 2,346,897 2,346,897 S 3,174,478 62,468 84,232 340 71,646 1,822 957,112 1,745,523 2,923,143 1,763 6,820,204 100,000 74,716 1,456,519 1,923,173 853 10,377,228 $ 13,300.371 $ 62,468 1,191,870 101,784 158,976 7,789 957,112 9,974,886 12,454,885 150,415 7,371,359 957,112 100,000 5,300,156 74,716 3,078,305 4,270,070 853 21,302,986 $ 33,757,871 24 CITY OF LINO LAKES, MINNESOTA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS December 31, 2005 Statement 4 Total Fund Balances for Governmental Funds $ 21,302,986 Total net assets reported for governmental activities in the statement of net assets is different because: Capital assets used in governmental funds are not financial resources and therefore are not reported in the funds. Those assets consist of: Land 2,809,059 Buildings, Net of Accumulated Depreciation 4,756,524 Office Equipment and Furniture, Net of Accumulated Depreciation 429,158 Vehicles, Net of Accumulated Depreciation 741,617 Machinery and Shop Equipment, Net of Accumulated Depreciation 251,406 Equipment, Net of Accumulated Depreciation 464,472 Infrastructure, Net of Accumulated Depreciation 35,998,547 w ver 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. 45,450,783 9,974,886 Bond issuance costs are reported as expenditures in the governmental funds and are shown net of accumulated amortization on the statement of net assets as prepaid items. 143,471 Interest on long -term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due. Accrued interest for general obligation bonds is included in the statement of net assets. Long -term liabilities that pertain to governmental funds, including bonds payable, are not due and payable in the current period and therefore are not reported as fund liabilities. All liabilities - both current and long -term - are reported in the statement of net assets. Balances at year -end are: Bonds payable (24,740,000) Unamortized premiums (176,166) Unamortized discounts 5,594 Compensated absence payable (514,583) Total Net Assets of Governmental Activities The accompanying notes are an integral part of these basic financial statements. 25 (358,888) (25,425,155) $ 51,088,083 CI'T'Y OF LINO LAKES, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - GOVERNMENTAL FUNDS Year Ended December 31, 2005 G.O. G.O. Area and Improvement Improvement Unit Revenue: General Bonds 2002B Bonds 2005A Charge General property taxes $ 6,054,104 $ $ $ - Tax increments Licenses and permits 812,172 Intergovernmental 591,649 - - Special assessments 3,461 223,112 701,775 Charges for services 197,475 - 209,676 Fines and forfeits 100,980 - Investment earnings 115,015 8,762 160 105,814 Refunds and reimbursements 32,509 - Misccllaneous 138,480 120,500 Total revenue 8,045,845 231,874 160 1,137,765 Expenditures: Current: General government 2,292,159 Public safety 3,099,032 - Public works 964,338 897,913 Parks, recreation and forestry 733,176 - Conservation of natural resources 140,334 Capital outlay: General government 61,360 Public safety 42,000 Public works 5,000 Parks, recreation and forestry Conservation of natural resources 2,321 - Dcbt service: Principal - 175,000 Interest and fiscal charges - 92,558 5,972 - Total expenditures 7,339,720 267,558 5,972 897,913 Revenue over (under) expenditures 706,125 Other financing sources (uses): Transfer in Transfer out Sale of property Issuance of debt Premium on bonds issued Total other financing sources (uses) (467,782) (467,782) Net increase (decrease) in fund balance 238,343 Fund balance Beginning of year Fund balance - December 31 (35,684) (5,812) 239,852 45,499 . 43,524 45,499 43,524 9,815 37,712 (1,867,549) (1,867,549) (1,627,697) 5,210,465 503,628 4,206,595 $ 5,448,808 $ 513,443 $ 37,712 $ 2.578,898 The accompanying notes are an integral part of these basic financial statements. 26 AMR Statement 5 Legacy Other Total Woods Edge Governmental Governmental Improvement Funds Funds S 884,733 $ 6,938,837 291,450 291,450 812,172 1,200,000 16,462 1,808,111 841,473 1,769,821 194,397 601,548 100,980 8,632 195,002 433,385 49,350 81,859 607,170 866,150 1,208,632 3,080,037 13,704,313 409,572 2,701,731 - - 3,099,032 4,379,572 829,499 7,071,322 - 378,125 1,111,301 - 140,334 61,360 142,521 184,521 129,848 134,848 81.503 81,503 2,321 1,841,000 2.016,000 51,292 689,128 838,950 4,430,864 4,501,196 17,443,223 (3,222,232) (1,421,159) (3,738,910) 155,069 2,450,901 2,651,469 (620,333) (2,955,664) 230.269 280,269 5,506,476 3,862,000 9.412,000 4,874 171,357 176.231 5,666,419 6,144,194 9,564,305 2,444,187 4,723,035 5,825,395 (97.290) 5,654,193 15,477,591 $ 2,346,897 $ 10,377,228 $ 21,302,986 27 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, 2005 Net Change in Fund Balances -Total Governmental Funds 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 814,226 Contributed capital assets 1,581,610 Loss on disposal of capital assets (9,236) Proceeds from sales of capital assets (280,269) Depreciation expense (2,751,516) The governmental funds report bond proceeds as financing sources, while repayment of bond principal is reported as an expenditure. In the statement of net assets, however, issuing debt increases long -term liabilities and does not affect the statement of activities and repayment of principal reduces the liability. Also, governmental funds report the effect of issuance costs, premiums and discounts when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Interest is recognized as an expenditure in the governmental funds when it is due. In the statement of activities, however, interest expense is recognized as it accrues, regardless of when it is due. The net effect of these differences in the treatment of general obligation bonds and related items is as follows: $ 5,825,395 (645,185) Issuance of general obligation bonds (9,305,000) Issuance of equipment certificates (107,000) Bond premium (176,231) Bond issuance costs 96,101 Repayment of bond principal 2,016,000 Interest expense for general obligation bonds (52,226) Amortization of bond issuance costs (5,244) Amortization of bond premium 3,376 Amortization of bond discount (398) (7,530,622) 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, 2004 Deferred revenue - December 31, 2005 4,595,455 9,974,886 5,379,431 In the statement of activities, compensated absences are measured by the amounts earned during the year. In the governmental funds, however, expenditures for these items are measured by the amount of financial resources used (essentially, the amounts actually paid). During fiscal year 2005, compensated absence payable increased. (42,791) Change in Net Assets of Governmental Activities $ 2,986,228 The accompanying notes are an integral part of these basic financial statements. 28 tow CITY OF LINO LAKES, MINNESOTA STATEMENT OF NET ASSETS - PROPRIETARY FUNDS December 31, 2005 Statement 7 Assets Current assets: Cash and cash equivalents Accounts receivable Special assessments receivable: Due from county Prepaid items Total current assets Non - current assets: Special assessments, long term Capital assets: Construction in Progress 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 Contracts and retainage payable Other accrued liabilities Accrued interest payable Bonds payable - current portion Compensated absences payable current portion Total current liabilities Non - current liabilities: Bonds payable - long term Compensated absences payable - long term Total noncurrent liabilities Total liabilities Net assets Invested in capital assets, net of related debt Unrestricted Total net assets The accompanying notes are an integral part of these basic financial statements. 29 Water S 1,759,526 130,602 708 5,145 1,895,981 147,489 356,061 48,690 105,935 17, 198,789 17,709,475 (3,202,712) 14,506,763 14,654,252 16,550,233 Sewer S 3,498,064 170,161 708 5,950 3,674,883 160,042 19,895,691 20,055,733 (3,794,672) 16,261,061 16,261,061 Totals 2005 $ 5,257,590 300,763 1,416 11,095 5,570,864 147,489 356,061 48,690 265,977 37,094,480 37,765,208 (6,997,384) 30,767,824 30,915.313 19,935,944 36,486,177 $ 30,982 $ 2,917 15,860 1,510 59,786 295,000 8,937' 414,992 2,130,000 =1,413 2,134,313 2,549,805 12,081,763 1,918,665 S 14,000,423 4,612 $ 35,594 2,840 5,757 15,860 1,510 59,786 295,000 17,874 431,381 8.937 16,389 4,813 4,813 21,202 16,261,069 3,653,673 $ 19,914,742 2,130,000 9,626 2,139,626 2,571,007 28,342,832 5,572,338 S 33,915,170 CITY OF LINO LAKES, MINNESOTA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS - PROPRIETARY FUNDS Year Ended December 31, 2005 Statement 8 Operating revenue: Charges for services Hook -up charges Water meter sales Other operating revenue Total operating revenue Water Totals Sewer 2005 $ 918,409 $ 1,319,849 $ 2,238,258 53,510 41,910 95,420 57,276 57,276 1,980 1,980 1,031,175 1,361,759 2,392,934 Operating expenses: Personal services 153,940 155,575 309,515 Materials and supplies 158,992 49,608 208,600 Contractual services 27,316 49,974 77,290 MCES sewer charges - 541,039 541,039 Depreciation 338,451 390,628 729,079 Utilities 48,114 23,241 71,355 Other 16,927 7,760 24,687 Total operating expenses 743,740 1,217,825 1,961,565 Net income (loss) from operations 287,435 143,934 431,369 Other income (expense): Investment earnings 36,105 84,205 120,310 Special assessments 13,239 1,006 14,245 Bond interest (131,327) - (1.31,327) Paying agent fees (1,525) (1,525) Total other income (expense) (83,508) 85,211 1,703 Net income before contributions and transfers 203,927 229,145 433,072 Contributions and transfers: Contributions from private sources 771,360 948,170 1,719,530 Transfer from capital projects fund 304,195 304,195 Total contributions and transfers 1,075,555 948,170 2,023,725 Net income (loss) 1,279,482 1,177,315 2,456,797 Net Assets - January 1 12,720,946 18,737,427 31,458,373 Net Assets - December 31 $ 14,000,428 $ 19,914,742 S 33,915,170 The accompanying notes are an integral part of these basic financial statements. 30 CITY OF LINO LAKES, MINNESOTA STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS Year Ended December 31, 2005 Statement 9 Water Totals Sewer 2005 Cash flows from operating activities: Cash receipts from customers $ 1,027,184 $ 1,347,529 S 2,374,713 Cash paid to suppliers (221,978) (686,732) (908,710) Cash paid to employees (162,685) (161,657) (324,342) Net cash flows from operating activities 642,521 499,140 1,141,661 Cash flows from noncapital financing activities: Transfer from capital project funds Net cash flows from noncapital financing activities w 304,195 - 304,195 304,195 - 304,195 Cash flows from capital and related financing activities: Principal paid on revenue bonds (280,000) - (280,000) — Collection of special assessments 34,989 303 35,292 Interest and paying agent fees on revenue bonds (132,852) - (132,852) Acquisition of capital assets (356,081) (2,794) (358,875) ... Net cash flows from capital and related financing activities (733,944) (2,491) (736,435) N an Cash flows from investing activities: Interest on investments 36,105 84,205 120,310 Net increase in cash and cash equivalents 248,877 580,854 829,731 Cash and cash equivalents - January 1 1,510,649 2,917,210 4,427,859 Cash and cash equivalents - December 31 $ 1,759,526 $ 3,498,064 $ 5,257,590 Reconciliation of operating income (loss) to net cash from operating activities: Operating income (loss) $ 287,435 S 143,934 $ 431,369 Adjustments to reconcile operating income to net cash flows from operating activities: ✓ ENN Depreciation 338,451 390,628 729,079 Change in assets and liabilities: Decrease (increase) in receivables (3,991) (14,230) (18,221) Decrease (increase) in prepaid items 293 172 465 Increase (decrease) in payables 20,333 (21 ,364) (1,031) Net cash flows from operating activities $ 642,521 $ 499,140 $ 1,141,661 - Water lines in the amount of $771,360 were contributed to the Water Fund in 2005. - Sewer lines in the amount of 5948,170 were contributed to the Sewer Fund in 2005. The accompanying notes are an integral part of these basic financial statements. 31 CITY OF LINO LAKES, MINNESOTA STATEMENT OF NET ASSETS - FIDUCIARY FUNDS December 31, 2005 Statement 10 Assets Cash and investments Deposits receivable Totals 2005 5 1,380,493 10,520 Total assets S 1,391,013 Liabilities Accounts payable Deposits payable S 88,580 1,302,433 Total liabilities S 1,391,013 The accompanying notes are an integral part of these financial statements. 32 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Lino Lakes is a public corporation formed under Minnesota Statute 410. As such, the City is under home rule charter regulations and applicable statutory guidelines. The basic financial statements of the City of Lino Lakes have been prepared in conformity with U.S. generally accepted accounting principles as applied to governmental units by the Governmental Accounting Standards Board (GASB). The following is a summary of the significant accounting policies: A. FINANCIAL REPORTING ENTITY As required by U.S. generally accepted accounting principles, the financial statements of the reporting entity include those of the City of Lino Lakes and its component units. A component unit is a legally separate entity for which the primary government is financially accountable, or for which the exclusion of the component unit would render the financial statements of the primary government misleading. The criteria used to determine if the primary government is financially accountable for a component include whether or not the primary government appoints the voting majority of the potential component unit's board, is able to impose its will on the potential component unit, is in a relationship of financial benefit or burden with the potential component unit, or is fiscally depended upon by the potential component unit. COMPONENT UNITS In conformity with U.S. generally accepted accounting principles, the financial statements of component units have been included in the financial reporting entity either as blended component units or as discretely presented component units. Blended Component Units. The Economic Development Authority (EDA) of Lino Lakes is an entity legally separate from the City. However, for financial reporting purposes, the EDA is reported as if it were part of the City's operations because the members of the City Council serve as commission members. The EDA does not issue separate financial statements. The Housing and Redevelopment Authority (HRA) of Lino Lakes is an entity legally separate from the City. However, for financial reporting purposes, the HRA is reported as if it were part of the City's operations because the members of the City Council serve as commission members. The HRA has not yet incurred any financial activity. B. BASIC FINANCIAL STATEMENTS 1. Government -Wide Statements The government -wide financial statements (i.e., the statement of net assets and the statement of activities) display information about the primary government and its component units. These statements include the financial activities of the overall City government, except for fiduciary activities. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges to external parties for support. As a general rule, the effect of interfund activity has been eliminated from the government -wide financial statements. Exceptions to this general rule are charges between the City's enterprise funds and various other functions of government. Eliminations of these charges would distort the direct costs and program revenues reported for the various functions concerned. 33 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. BASIC FINANCIAL STATEMENTS (CONTINUED) 1. Government -Wide Statements (Continued) In the government -wide statement of net assets, both the governmental and business -type activities columns: (a) are presented on a consolidated basis by column; and (b) are reported on a full accrual, economic resource basis, which recognizes all long -term assets and receivables as well as long -term debt and obligations. The City's net assets are reported in three parts: (1) invested in capital assets, net of related debt; (2) restricted net assets; and (3) unrestricted net assets. The City first utilizes restricted resources to finance qualifying activities. The statement of activities demonstrates the degree to which the direct expenses of each function of the City's governmental activities and different business -type activity are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or activity. Program revenues include: (1) fees, fines, and charges paid by the recipients of goods, services, or privileges provided by a given function or activity; and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or activity. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. 2. Fund Financial Statements The fund financial statements provide information about the City's funds, including its fiduciary funds and blended component unit. Separate statements for each fund category-- governmental, proprietary, and fiduciary- -are presented. The emphasis of governmental and proprietary fund financial statements is on major individual governmental and enterprise funds, with each displayed as separate columns in the fund financial statements. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or incidental activities. The City reports the following major governmental funds: General Fund The general fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. General Obligation Improvement Bonds 2002B Fund The general obligation improvement bonds 2002B fund accounts for the accumulation of resources for, and the payment of, interest, principal and related costs on general long -term debt. 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. Area and Unit Charge Fund The area and unit charge fund accounts for the collection of water and sewer unit charges to be used for debt payments and construction of infrastructure. 34 low i Mow MEW IMm CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. BASIC FINANCIAL STATEMENTS (CONTINUED) 2. Fund Financial Statements (Continued) 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. 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 fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Agency funds, which are included in the Fiduciary Funds, do not have a measurement focus. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Private - sector standards of accounting and financial reporting issued on or before November 30, 1989, generally are followed in both the government -wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private- sector guidance for their business -type activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private- sector guidance. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. The City considers all revenues to be available if they are collected within 60 days after the end of the current period. Property and other taxes, licenses, and interest are all considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long -term debt, compensated absences, and claims and judgments, which are recognized as expenditures to the extent that they have matured. Proceeds of general long -term debt and acquisitions under capital leases are reported as other financing sources. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. 35 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING (CONTINUED) Proprietary funds distinguish operating revenues and expenses from nonoperating item. Operating revenues and expenses generally result from providing services and producing and delivering goods in connections with a proprietary fund's principal ongoing operations. The principal operating revenue of the City's enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. D. BUDGETS Budgets are adopted on a basis consistent with U.S. generally accepted accounting principles. Annual appropriated budgets are adopted for the General Fund and the Program Recreation Special Revenue Fund. Budgeted expenditure appropriations lapse at year end. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the appropriation, is not employed by the City because it is not presently considered necessary to assure effective budgetary control or to facilitate effective cash management. E. LEGAL COMPLIANCE - BUDGETS The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The City Administrator submits to the City Council a proposed operating budget (including the General Fund and Program Recreation Special Revenue Fund) for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is legally enacted through passage of a resolution on a departmental basis and can be expended by each department based upon detailed budget estimates for individual expenditure accounts. 4. The City Administrator is authorized to transfer appropriations within any department budget. Additional interdepartmental or interfund appropriations and deletions are or may be authorized by the City Council with fund (contingency) reserves or additional revenues. 5. Formal budgetary integration is employed as a management control device during the year for the General Fund. 36 MEM aim Now CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. LEGAL COMPLIANCE — BUDGETS (CONTINUED) 6. Legal debt obligation indentures determine the appropriation level and debt service tax levies for the Debt Service Funds. Supplementary budgets are adopted for the Proprietary Funds to determine and calculate user charges. These debt service and budget amounts represent general obligation bond indenture provisions and net income for operation and capital maintenance and are not reflected in the financial statements. 7. A capital improvement program is reviewed periodically by the City Council for the Capital Project Funds. However, appropriations for major projects are not adopted until the actual bid award of the improvement. The appropriations are not reflected in the financial statements. 8. Expenditures may not legally exceed budgeted appropriations at the total fund level. Monitoring of budgets is maintained at the expenditure category level (i.e., personal services, supplies; other services and charges; capital outlay) within each activity. 9. The City Council may authorize transfer of budgeted amounts between City funds. F. CASH AND INVESTMENTS Cash and investment balances from all funds are pooled and invested to the extent available in investments authorized by Minnesota Statutes. Earnings from investments are allocated to individual funds on the basis of the fund's equity in the cash and investment pool. The City provides temporary advances to funds that have insufficient cash balances by means of an advance from another fund shown as interfund receivables in the advancing fund in the governmental fund financial statements, and an interfund payable in the fund with the deficit, until adequate resources are received. These interfund payables are eliminated for statement of net assets presentation. Investments are stated at fair value as of the balance sheet date. Interest earnings are accrued at the balance sheet date. For purposes of the statement of cash flows the Proprietary Fund considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. All of the cash and investments allocated to the proprietary fund types have original maturities of 90 days or less. Therefore, the entire balance in such fund types is considered cash equivalents. 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. 37 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 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 2005 totaled $724,299. Receipt of property taxes from this "fiscal disparities pool" does not increase or decrease total tax revenue. I. SPECIAL ASSESSMENT REVENUE RECOGNITION Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement projects in accordance with State Statutes. These assessments are collectible by the City over a term of years usually consistent with the term of the related bond issue. Collection of annual installments (including interest) is handled by the County Auditor in the same manner as property taxes. Property owners are allowed to (and often do) prepay future installments without interest or prepayment penalties. Within the fund financial statements, the revenue from special assessments is recognized by the City when it becomes measurable and available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by the City are recognized as revenue for the current year. Special assessments are collected by the County and remitted by December 31 (remitted to the City the following January) and are also recognized as revenue for the current year. All remaining delinquent, deferred and special deferred assessments receivable in governmental funding are completely offset by deferred revenues. Deferred revenue in governmental activities is susceptible to full accrual on the government -wide statements. 38 ti CITY OF' LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 1. SPECIAL ASSESSMENT REVENUE RECOGNITION (CONTINUED) Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale and the first proceeds of that sale (after costs, penalties and expenses of sale) are remitted to the City in payment of delinquent special assessments. Generally, the City will collect the full amount of its special assessments not adjusted by City Council or court action. Pursuant to State Statutes, a property shall be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or seasonal recreational land in which event the property is subject to such sale after five years. J. INVENTORIES The original cost of materials and supplies has been recorded as expenditures /expenses at the time of purchase of both the Governmental and Proprietary Funds. These funds do not maintain material amounts of materials and supplies. K. INTERFUND RECEIVABLES /PAYABLES During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. The year -end balances are classified as interfund receivables and payables on the governmental fund balance sheets. The non - current portion of interfund loans are reported as "advances to /from other funds." Advances between funds are offset by a fund balance reserve account in applicable governmental funds to indicate they are not available for appropriation and are not expendable from available financial resources. L. CAPITAL ASSETS Capital assets, which include property, plant, equipment, and infrastructure assets (e.g. roads, sidewalks, street lights, and similar items) are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets exceeding the City's capitalization threshold of $2,500 are recorded at historical cost or estimated historical cost if purchased or constructed. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. All existing City infrastructure has been capitalized regardless of date placed in service. Depreciation on exhaustible assets is recorded as an allocated expense in the Statement of Activities with accumulated depreciation reflected in the Statement of Net Assets. Capital assets are depreciated using the straight -line method over their estimated useful lives. Since surplus assets are sold for an immaterial amount when declared as no longer needed for City purposes, no salvage value is taken into consideration for depreciation purposes. Useful lives vary from 3 to 30 years for Buildings, Office Furniture and Equipment, Vehicles, Machine Shop and Equipment and Other assets, and 25 to 50 years for Infrastructure. Capital assets not being depreciated include land and construction in progress. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) M. COMPENSATED ABSENCES It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All vacation pay and the portion of sick pay allowable as severance pay is accrued as incurred in the government -wide and proprietary fund financial statements. The current portion is calculated based on historical trends. N. LONG -TERM OBLIGATIONS In the entity -wide financial statements, long -term debt and other long -term obligations are reported as liabilities in the applicable governmental activities. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight -line method. Bond issue costs, if material, are reported as prepaid items and amortized over the term of the related debt using the straight -line method. In the governmental fund financial statements, bond premiums and discounts, as well as bond issue costs are recognized during the current period. The face amount of the debt issue is reported as on other financing source. Premiums received on debt issuances are reported as other financing sources while discounts are reported as other financing uses. Issue costs are reported as debt service expenditures. O. FUND EQUITY In the governmental fund financial statements, reservations of fund balance represent those portions of fund equity not appropriable for expenditure or legally restricted by outside parties for use for a specific purpose. Designated fund balances represent tentative plans for future use of fmancial resources that are subject to change. P. INTERFUND TRANSACTIONS Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures /expenses initially made from it that are properly applicable to another fund, are recorded as expenditures /expenses in the reimbursing fund and as reductions of expenditures or expenses in the fund that is reimbursed. All other interfund transactions are reported as transfers. All Interfund transactions are eliminated except for activity between governmental activities and business -type activities for presentation in the entity-wide statements of net assets and statements of activities. 40 Vom Now CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 Note 2 DEPOSITS AND INVESTMENTS 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 combined balance sheet as "Cash and Temporary Investments." In accordance with Minnesota Statutes the City maintains deposits at financial institutions which are authorized by the City Council. Custodial Credit Risk — Custodial credit risk for deposits is the risk that in the event of a bank failure, the City's deposits may not be returned to it. The City does not have a specific deposit policy for custodial credit risk but rather follows Minnesota Statutes for deposits. Minnesota Statutes require that all deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or corporate surety bonds. Authorized collateral include: U.S. government treasury bills, notes, or bonds; issues of a U.S. government agency; general obligations of a state or Local government rated "A" or better; revenue obligations of a state or local government rated "AA" or better; irrevocable standby letter of credit issued by a Federal Home Loan Bank; and time deposits insured by a federal agency. Minnesota statutes require securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or at an account at a trust departments of a commercial bank or other financial institution not owned or controlled by the depository. The City's deposits in banks at December 31, 2005 in the amount of $4,194,130 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 finial 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 rate "A" or better • Bankers 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 agreement 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. 41 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 Note 2 DEPOSITS AND INVESTMENTS (CONTINUED) At December 31, 2005, the City's investment balances were as follows: Cash Investments Held by Trustee — Type Mutual Funds Amount $ 496,875 The above mutual fund invests in U.S. Treasury Securities. These investments are held by an escrow agent in accordance with escrow agreements established wit the sale of the Lease Revenue Bonds Series 1998A and the Public Project Revenue Refunding Bonds Series 1999C. The proceeds of these issues were used to finance the construction of the Civic Complex, and to refund the 2000 through 2010 maturities of the City's 1990A Public Project Revenue Bonds. 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. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities 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: 12 Months 13 to 24 25 to 60 More than Type Total or Less Months Months 60 Months Minnesota Municipal Money Market Trust Fund $ 109.822 S 109,822 $ - $ - $ Commercial Paper 12,929.002 12,929.002 Government Agencies 10,196.004 6,171,797 2,336,006 1,494,951 193.250 Mutual Fund 254.418 254,418 - - Total $ 23,489,246 $ 19,465,039 $ 2,336,006 $ 1,494,951 $ 193.250 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. 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 8 109,822 Commercial Paper P -1 12,929,002 Government Agencies Aaa 10,196,004 Mutual Fund Not Rated 254,418 Total S 23,489,246 42 Nom MIN low CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 Note 2 DEPOSITS AND INVESTMENTS (CONTINUED) 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 fair 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 market value of instruments. Credit Risk — 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. 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 percent of the City's total investments: Type Amount Percentage Federal Home Loan Bank $ 6,254,544 22.88% Federal National Mortgage Association 3,046,531 11.14% General Electric Capital Commercial Paper 6,363,903 23.28% Rhineland Funding Commercial Paper 5,034,315 18.42% CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 Note 3 CAPITAL ASSETS Capital asset activity for the year ended December 31, 2005 was as follows: Beginning Balance Increases Decreases Governmental Activities: Capital Assets, Not Being Depreciated Land "total capital assets, not being depreciated Capital Assets, Being Depreciated: Buildings Office Equipment and Furniture Vehicles Machinery and Shop Equipment Other Infrastructure Total Capital Assets, Being Depreciated Accumulated Depreciation for: Buildings Office Equipment and Furniture Vehicles Machinery and Shop Equipment Other Infrastructure Total Accumulated Depreciation Total Capital Assets, Being Depreciated, Net Governmental Activities Capital Assets, Net Ending Balance $ 3,093,490 $ $ (284,431) $ 2,809,059 3,093,490 6,444,455 982,815 1,470,443 645,151 929,765 65,224.680 75,697,309 (1,472,741) (555,671) (687,299) (404,322) (443,798) (29,131,000) (32,694,831) 43,002,478 $ 46,095,968 75,952 139,868 44,974 31,072 2,103,970 2,395,836 (284,431) 2,809,059 (89,585) (87,787) (2,948) (180,320) (215,190) (73,938) 89,585 (177,795) 84,187 (32,923) 1.474 (52,567) (2,199,103) (2,751,516) 175,246 (355,680) (5.074) 42,641,724 $ (355,680) 5 (289,505) S 45,450,783 6,444,455 969,182 1,522,524 687,177 960,837 67,328,650 77,91 2,825 (1,687,931) (540,024) (780,907) (435,771) (496,365) (31,330,103) (35,271.101) Depreciation expense was charged to governmental functions as follows: Governmental Activities: General government Public safety Public services Parks, recreation and forestry Community development "total Depreciation Expense, Governmental Activities Beginning Balance Business-Type Activities: Capital Assets, Not Being Depreciated Construction in Progress Total capital assets, not being depreciated Capital Assets, Being Depreciated: Buildings Machinery and Shop Equipment Water and Sewer Lines Total Capital Assets, Being Depreciated Accumulated Depreciation for: Buildings Machinery and Shop Equipment Water and Sewer Lines Total Accumulated Depreciation Total Capital Assets, Being Depreciated, Net Business -Type Capital Assets, Net 48,690 264,907 35,376,819 35,690,416 (48,690) (190,486) (6,032,742) (6,271,918) $ 265,874 103.027 2,235,628 144,854 2.133 $ 2,751,516 Increases Decreases $ 356,061 5 356,061 2,802 1,719,550 1,722,352 (15,309) (713,770) (729,079) Ending Balance $ 356,061 356,061 48,690 (1,732) 265,977 (1,889) 37,094,480 (3,621) 37,409,147 (48,690) 1,732 (204,063) 1,881 (6,744,631) 3,613 (6,997,384) 29,418,498 993,273 $ 29,418,498 5 1,349,334 $ 44 (8) 30,411,763 (8) 5 30,767,824 low CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 Note 4 CITY INDEBTEDNESS City indebtedness at December 31, 2005 is composed of the following: Final Issue Maturity interest Original Date Date Rate Issue Payable 12/31 /_2005 Governmental Activities: General Obligation Bonds: (.." 2003A Equipment Certificates 2/1/2003 12/31/2006 6.00% $ 130,000 $ 40,000 200318 Equipment Certificates 3/31/2003 12/31,2006 4.00% 200,000 85.000 2004A Equipment Certificates 2/1/2004 12/31/2007 4.00% 274,000 193.000 2005A Equipment Certificates 2/1/2005 12/31/2008 4.00% 107,000 107,000 Civic Complex Lease Rev. Bonds - 98A 8/1/1998 2/1/2019 4.20%-5.35% 5,350,000 4,420,000 Public Project Revenue Ref. Bonds - 99C 9/1/1999 2/1/2010 4.75 % - 5.10% 980,000 490.000 Total General Obligation Bonds 7,041,000 5,335.01)0 Special Assessment Bonds: G.O. Improvement Bonds, Series 1998A 8/1/1998 2/1/2015 4.50 % - 4.90% 4,310,000 2,860.000 G.O. Improvement Bonds, Series I998B 8/1/1998 2/1/2015 4.50% -4.90% 2,000,000 1,430.000 G.O. Improvement Refunding Bonds. Series 1999..A 9/1/1999 2/1/2006 4.25%-4.70% 1.725,000 355.000 �.. G.O. Improvement Bonds, Series 2002A 8/1/2002 2/1/2013 3.00 % -4.101 645,000 455,000 G.O. Improvement Bonds, Series 20028 8/1/2002 2/1/2013 3201 -5.55% 2,110,000 1,765.000 G.O. Improvement Refunding Bonds. Series 2003A 12/1/2003 2/1/2019 3.00 % -4.10% 2,090,000 1.655,000 G.O. Improvement Bonds. Scrics 2003B 12/1/2003 2/1/2014 3.20°4-5.55% 250,000 250,000 G.O. Improvement and Utility Bonds. Series 2004A 11/15/2004 2/I/2020 1.90%-4.45% 1,330,000 1,330,000 G.O. Improvement Bonds, Series 2005A 11/1/2005 2/1/2021 4.35% -5.15% 5,550,000 5,550,000 G.O. Improvement Refunding Bonds, Series 20056 1 1/1/2005 2/1/2015 3.75 % - 5.00% 3,755,000 3,755,000 Total Special Assessment Bonds 23,765,000 19,405,000 Total Bonds 30,806,000 24,740,000 Unamonized Bond Discounts (6,057) (5,594) Unamortized Bond Premiums 179,797 176,166 Compensated Absences Payable N/A 514,583 filmy UMW Total Governmental Activities $ 30,979,740 $ 25,425,155 Business -Type Activities: Revenue Bonds: G.O. Water Revenue Bonds, Series I996B 10 /1 /1996 2/1/2012 4.10% -5.70% $ 3,320,000 $ 2,100,000 G.O. Water Revenue Bonds, Series 1999B 9/1/1999 2/1/2008 4.25% -4.90% 680.000 325,000 Total Revenue Bonds 4,000,000 2,425,000 Compensated Absences Payable N; /A 27,500 Total Business -Type Activities $ 4,000,000 $ 2.452,500 45 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 Note 4 CITY INDEBTEDNESS (CONTINUED) The following is a schedule of changes in City indebtedness for the year ended December 31, 2005: Governmental activities: Bonded debt: General obligation Special assessment Unamortized Bond Discounts Unamortized Bond Premiums Compensated absences payable Total governmental activities Business -Type activities: Revenue bonds Compensated absences payable Total business -type activities Total Payable Payable Due Within 12/31/2004 Issues Payments 12/31/2005 One Year $ 5,764,000 $ 107,000 $ 536,000 $ 5,335,000 $ 570,000 11,580,000 9,305,000 1,480,000 19,405,000 5,465,000 (5.992) (398) (5,594) - 3,311 176,231 3,376 176,166 - 471,792 402,195 359,404 514,583 297,871 17,813,111 9,990,426 2,378,382 25,425,155 6,332.871 2,705.000 280,000 2,425.000 295,000 40,368 27.120 39,988 27.500 17,874 2,745,368 27,120 319,988 2,452,500 312,874 $ 20,558,479 $ 10.017.546 $ 2,698,370 $ 27,877,655 $ 6,645.745 All long -term bonded indebtedness outstanding at December 31, 2005 is backed by the full faith and credit of the City, including special assessment bond issues. For the governmental activities, compensated absences are generally liquidated by the general fund. Minimum annual principal and interest payments required to retire long -term debt, not including compensated absences payable are as follows. Years ending December 31, 2006 2007 2008 2009 2010 2011 -2015 2016 - 2020 2021 Total Governmental Activities Business -Type Activities Principal htterest Principal Interest Total $ 6,035,000 S 899,093 $ 295,000 1,883,000 833,643 305,000 1,542,000 765,085 325,000 1,465,000 699,964 345,000 1,385,000 636,550 365,000 7,180,000 2,165,791 790,000 4,725,000 698,406 - 525,000 13,519 $ 24.740,000 $ 6,712,051 $ 2,425,000 Description and Restrictions of Long -Term Debt 122.868 $ 7,351,961 107,835 3,129,478 91,733 2,723.818 74,035 2,583,999 54,683 2,441,233 45,408 10,181,199 5,423,406 538,519 496,562 $ 34,373,613 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. 46 MEIN NNW CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 Note 4 CITY INDEBTEDNESS (CONTINUED) Public Project Revenue Bonds and Civic Complex Lcase Revenue Bonds = These bonds were issued by the Economic Development Authority (EDA) of Lino Lakes for the purpose of financing the construction of public facilities. Pursuant to Minnesota Statutes and a lease purchase contract between the EDA and the City of Lino Lakes, a Trust Indenture between the EDA and a regional bank has been established for the purpose of financing payment of these bonds. The City has pledged rental payments in amounts equal to the debt service requirements and plans to annually appropriate City funds available for this purpose. As required by bond covenant, a reserve account has been established with a trustee, which is to be used to pay principal and interest on the bonds in the event that other available resources are inadequate to do so. On November 1, 2005 the City issued $3,755,000 of General Obligation Improvement Refunding Bonds, Series 200513. The proceeds will be used to refund, in advance of their stated maturities, the 2007 through 2015 maturities of the City's 1998A General Obligation Improvement and 1998B General Obligation Improvement Bonds totaling $3,880,000. This "crossover refunding" reduced the City's total future debt service payments by approximately $203,995, and resulted in a present value savings of approximately $ 175,876. Liability for Compensated Absences — This liability represents vested benefits earned by governmental fund employees through the end of the year which will be paid or used in future periods. For the governmental activities, compensated absences are generally liquidated by the general fund. The liability for Proprietary Fund employees is included in the accrued liabilities of those funds. Note 5 LEGAL DEBT MARGIN The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable principally from property taxes. The City of Lino Lakes' legal debt margin for 2005 computed as follows: Market value Applicable percentage Debt Limit 12/31/05 $ 1,534,933,700 2.0% 30,698,674 Amount of debt applicable to debt limit: Total bonded debt 27,165,000 Less: Special assessment bonds (19,405,000) Public project revenue bonds (490,000) Revenue bonds (2,425,000) Total debt applicable to debt limit 4,845,000 Legal debt margin $ 25,853,674 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 Note 6 DEFINED BENEFIT PENSION PLANS - STATEWIDE A. PLAN DESCRIPTION All full -time and certain part -time employees of the City of Lino Lakes are covered by defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) which is a cost - sharing, multiple - employer retirement plan. This plan is established and administered in accordance with Minnesota Statutes, Chapter 353 and 356. PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership by statute are covered by the PEPFF. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by State Statute, and vest after three years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERF's Coordinated and Basic Plan members. The retiring member receives the higher of step -rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of average salary for each of the first 10 years of service and 2.7 percent for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each of the first 10 years and 1.7 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.7 percent of average salary for Basic Plan members and 1.7 percent for Coordinated Plan members for each year of service. For PERF members hired prior to July 1, 1989 whose annuity is calculated using Method 1, a full annuity is available when age plus years of service equal 90. Normal retirement age is 65 for Basic and Coordinated members hired prior to July 1, 1989. Normal retirement age is the age for unreduced Social Security benefits capped at 66 for Coordinated members hired on or after July 1, 1989. A reduced retirement annuity is also available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A normal annuity is a lifetime annuity that ceases upon the death of the retiree, no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will be payable over joint lives. Members may also leave their contributions in the fund upon termination of public service in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet, are bound by the provisions in effect at the time they last terminated their public service. PERA issues a publicly available financial report that includes financial statements and required supplementary information for PERF. That report may be obtained on the web at mnpera.org, by writing to PERA at 60 Empire Drive #200, St. Paul, Minnesota, 55103 -2088 or by calling (651) 296 -7460 or 1- 800 - 652 - 9026. 48 IMMO Iwo CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 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. PERF Basic Plan members and Coordinated Plan members are required to contribute 9.10% and 5.10% respectively, of their annual covered salary. Contribution rates in the Coordinated Plan will increase in 2006 to 5.5 %. The City is required to contribute the following percentages of annual covered payroll: 11.78% for Basic Plan PERF members, and 5.53% for Coordinated Plan PERF members. Employer contribution rates for the Coordinated Plan will increase to 6.0% effectively January 1, 2006. The City's contributions to the Public Employees Retirement Fund for the years ending December 31, 2005, 2004, and 2003 were $136,230, $128,263, and $124,431, respectively. The City's contributions to the Public Employees Police & Fire Fund for the years ending December 31, 2005, 2004, and 2003 were $158,282, $146,820, and $139,726, 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 Deficit Fund Balances The City has deficit fund balances at December 31, 2005 as follows: Fund Balance Deficit Dedicated Parks $ (734,870) Municipal State Aid (49,353) Tax Increment Financing 1 -11 (23,977) Birch Hodgson Street Improvement (36,728) CSAH 14/8 Reconstruction Project (14,912) The City intends to fund these deficits through future tax levies, special assessment levies, tax increments, transfers from other funds, and various other sources. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 Note 9 CONTINGENCIES Litigation - The City attorney has indicated that existing and pending lawsuits, claims and other actions in which the City is a defendant are either covered by insurance; of an immaterial amount; or, in the judgment of the City attorney, remotely recoverable by plaintiffs. Federal and State Funds - The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31, 2005. 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, 2005. Future scheduled tax levies for all bonds outstanding at December 31, 2005 totaled $23,835,841. Note 11 DESIGNATIONS AND RESERVATIONS OF FUND EQUITY At December 31, 2005, the City had designated and reserved portions of its various fund equities through legal restriction and City Council authorization. Major fund equity appropriations at December 31, 2005 are shown on the various balance sheets as segregations of the fund equity. A summary of such designations is as follows: 12/31/05 Governmental Activity: General Fund Reserved for prepaid items $ 148,652 Designated for cash flow reserve 5,300,156 Improvement Bonds of 2002B Reserved for debt retirement 513,443 Improvement Bonds of 2005A Reserved for debt retirement 37,712 Area and Unit Charge Reserved for advance to other funds 957,112 Designated for capital improvements 1,621,786 Other Nonmajor Governmental Funds Reserved for prepaid items 1,763 Reserved for debt retirement 6,820,204 Reserved for environmental improvements 100,000 Designated for recreation purposes 74,716 Designated for capital improvements 1,456,519 50 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 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 2005 was $116,010. Mow Note 13 INTERFUND RECEIVABLE AND PAYABLES ` Individual fund receivable and payable balances at December 31, 2005 are as follows: Receivable — ORM Vim Governmental Activity: General Fund Other Nonmajor Governmental Funds 62,468 $ 62,468 Payable 62,468 $ 62,468 Interfund receivable and payable balances represent the elimination of negative cash between funds. Note 14 INTERFUND TRANSFERS Individual fund transfers for fiscal year 2005 are as follows: Governmental Activity: General Fund Improvement Bonds of 2002B Area and Unit Charge Legacy Woods Edge Improvement Fund Other Nonmajor Governmental Funds Total Governmental Activity Business -Type Activity: Water Fund Transfer In 45,499 155,069 2,450,901 2,651,469 304,195 $ 2,955,664 Transfer Out $ (467,782) (1,867,549) (620,333) (2,955,664) $ (2,955,664) Interfund transfers are other financing sources and uses within the fund financial statements. The purpose of the transfers are to provide funding for capital improvement projects, capital outlay, and debt service as well as open and close funds. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 Note 15 RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. Workers compensation coverage is provided through a pooled self - insurance program through the League of Minnesota Cities Insurance Trust (LMCIT). The City pays an annual premium to LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through Workers Compensation Reinsurance Association (WCRA) as required by law. For workers compensation, the City is not subject to a deductible. The City's workers compensation coverage is retrospectively rated. With this type of coverage, final premiums are determined after loss experience is known. The amount of premium adjustment, if any, is considered immaterial and not recorded until received or paid. Property and casualty insurance is provided through a pooled self - insurance program through the LMCIT. The City pays an annual premium to the LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through commercial companies for claims in excess of various amounts. The City retains risk for the deductible portion of the insurance policies and for any exclusions from the insurance policies. These amounts are considered immaterial to the financial statements. The City continues to carry commercial insurance for all other risks of loss, including disability and employee health insurance. There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years. Note 16 CONDUIT DEBT OBLIGATIONS The City has issued Industrial Development Revenue Bonds to provide financial assistance to private- sector entities for the acquisition and construction of industrial and commercial facilities which are deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private sector entity served by the bond issue. The City is not obligated in any manner for the repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2005, two series of Industrial Revenue Bonds were outstanding with aggregate remaining principal balances of $1,625,000 and $2,800,000, respectively. Note 17 LEASE COMMITMENT The City of Lino Lakes entered into an agreement dated December 8, 1997 to lease space within the City Hall complex to the Independent School District No. 12 (ISD 12). The lease term continues through June 30, 2009 and requires payments of $110 per square foot over the lease term for a total of $1,200,000. The schedule of remaining payments is as follows: Amount 2006 $ 112,500 2007 112,500 2008 112,500 2009 75,000 Total $ 412,500 52 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2005 Note 17 LEASE COMMITMENT (CONTINUED) The prorated carrying value of the building being leased is as follows: Building Less Accumulated Depreciation $ 929,970 (185,994) Net $ 743,976 Note 18 JOINT FIRE VENTURE The Centennial Fire District (the District) was established under a joint powers agreement between the City of Lino Lakes and two other cities. The general purpose of the District is to provide fire protection services including, but not limited to, fire prevention, firefighting and rescue service. Each member city is entitled to appoint two commissioners to the District's Board. Each calendar year participating cities are to pay the District its share of the total operating and capital budget in accordance with a funding formula contained in Section VII of the joint powers agreement. The funding formula takes into account each city's average number of calls, population, and total market value. During 2005, the City of Lino Lakes' contributions to the District were as follows: Operating $ 390,951 Capital 68,500 Total $ 459,451 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, 2005 are as follows: Total Assets $ 940,773 Total Liabilities 138,584 Total Net Assets 802,189 Total Operating Revenue 611,916 Total Operating Expenses 658,499 REQUIRED SUPPLEMENTARY INFORMATION CITY OF LINO LAKES, MINNESOTA �. GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND ('I IANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2005 NNW Inmt Statement 11 Page 1 of 6 2005 Variance with Original Final Final Budget Budget Budget Actual Positive (Negative Revenue: General property taxes: Current and delinquent 8 6.389,211 $ 6,389,211 $ 5,422,178 $ (967,033) Fiscal disparities - - 631,926 631,926 Total general property taxes 6,389,211 6,389,211 6,054,104 (335,107) Licenses and permits: Business 33,500 33,500 45,676 12,176 Non- business 743,750 743,750 766,496 22,746 Total licenses and permits 777,250 777,250 812,172 34,922 Intergovernmental: Federal: Other 125,000 125,000 175,696 r 50,996 State: Market Value Credit - 4,348 4,348 Police state aid 120,000 120,000 153,706V 33,706 MSA maintenance 160,000 160,000 160,519 519 Other 40,000 40,000 58,833 18,833 County /Regional: Solid waste 35,000 35,000 33,674 (1,326) Other 5,000 5,000 4,873 (127) Total intergovernmental 485,000 485,000 591.649 , 106,649 Special Assessments: Penalties and Interest 5,000 5,000 3,461 (1,539) Charges for services: General government 28,000 28,000 26,034 (1,966) Planning /engineering 15,000 15,000 12,135 (2,865) Fees retained from collection for .... other govemments - SAC/surcharge 4,000 4,000 4,397 397 Administrative charge - other funds 55,000 55,000 52,500 (2,500) Aerial map charge - other funds 10,000 10,000 14,850 4,850 Public safety 81,000 86,000 87,559 1,559 Total charges for services 193.000 198,000 197,475 (5251 NOM Fines and forfeits 100,000 100,000 100,980 980 Investment earnings 65,000 65,000 115,015 ✓ 50,015 Refunds and reimbursements 45,000 20,000 32,509 12,509 Miscellaneous: Gas franchise tees 65,000 65,000 116,010 V 51,010 Cable TV 15,250 15,250 18,478 3,228 Donations 5,000 8,200 3,992 (4.208) Total miscellaneous 85,250 88,450 138.480 50,030 Total Revenue 8,144,711 8,127,911 8,045..845 (82,066) CITY OF LINO LAKES, MINNESOTA GENERAL FUND SCI IEDULE OF REVENUES, EXPENDITURES AND CI IANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2005 Statement 11 Page 2 of 6 2005 Variance with Original Final Final Budget Budget Budget Actual Positive (Negative 1ixpenditures: General government: Mayor and council: Current Personal services $ 40,631 $ 40,631 $ 35,925 $ 4,706 Supplies 400 400 15 385 Other services and charges 78,950 78,950 50,244 28,706 Contractual Services 28,062 28,062 28,397 (335) Total mayor and council 148,043 148,043 114,581 33,462 Elections: Current Personal services 10,479 10,479 6,014 4,465 Supplies 200 200 96 104 Other services and charges 1,300 1,300 2,326 (1,026) Contractual Services 500 500 500 Capital outlay 18,000 Total elections 30,479 12,479 8,436 4,043 Administration: Current Personal services 421,427 421,427 402,376 19,051 Supplies - 171 (171) Other services and charges 20,000 20,000 18,172 1,828 Contractual Services 10,800 10,800 8,075 2,725 Total administration 452,227 452,227 428,794 23,433 Finance: Current Personal services 271,563 271,563 268,321 3,242 Supplies 1,500 1,500 227 1,273 Other services and charges 53,500 53,500 49,533 3,967 Contractual Services 80,850 80,850 76,008 4,842 Capital outlay 20,000 - - - Total finance 427,413 407,413 394,089 13,324 Cable TV: Current Personal services 3,024 3,024 1,845 1,179 Supplies 50 50 50 Capital outlay 500 500 500 Total cable TV 3.574 3,574 1,845 1,729 Consultants: Current Legal 153,000 153,000 162,823 (9,823) Community Development: Current Personal services 192,383 192,383 160,961 31,422 Supplies 100 100 20 80 Other services and charges 4,625 4,625 2,175 2,450 Contractual Services 750 750 821 (71) Capital outlay 5,160 5,160 2,900 2,260 203,018 203,018 166,877 36,141 55 Nam ('FI'Y OF LINO LAKES, MINNESOTA Statement 11 (0NFRAI. I4JNI) Page 3 of 6 SCHEDULE OF REVENUES, EXPENDITURES ANI) ('11ANGIiS IN FUND BALANCE - BUDGET AND A(TUAI. Year Iinded December 31, 2005 2005 Original Budget Final Budget Variance with Final Budget Actual Positive (Negative General government: (continued) Economic Development: _ Current Personal services $ 78,671 $ 78,671 $ 74,898 $ 3,773 Other services and charges 1 1,750 1 1,7 50 6,019 5,731 Contractual services 138,701) 138,700 128,787 9,913 Total economic development 229,121 229,121 209,704 19,417 Planning and zoning commission: Current Personal services 152,201 152,201 144,938 7,263 Supplies - 200 (200) Other services and charges 28.245 28,245 16,968 11,277 Contractual services 26,600 26.600 4,779 21,821 Capital outlay 3,500 3.500 - 3,500 Total planning and zoning commission 210,546 210,546 166,885 43,661 Engineering /planning: Current Contractual services 185,000 185,000 174,068 10,932 Total engineering /planning 185,000 185,000 174,068 10,932 Senior Service Current Personal services 28,581 28,581 27,164 1,417 Other services and charges 1,150 1,150 1,220 (70) Capital outlay 500 500 3,872 (3,372) Total charter commission 30,231 30,231 32,256 (2,025) Charter commission: Current Other services and charges 1,850 1.850 1,802 48 Total charter commission 1,850 1,850 1,802 48 General government buildings: Current .� Personal services 74,447 74.447 74,804 (357) Supplies 40,000 40,000 41,145 (1.145) Other services and charges 281,380 281,380 291,320 (9,940) Contractual services 29,000 29,000 29,502 (502) Capital outlay 68,000 53,000 54,588 (1,588) Total general government buildings 492,827 477,827 491,359 (13.532) Total general government 2,567,329 2,514.329 2,353,519 160.810 CITY OF LINO LAKES, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2005 Statement 11 Page 4 of 6 2005 Variance with Original Final Final Budget Budget Budget Actual Positive (Negative Public safety: Police: Current Personal services 8 2,281,050 $ 2,281,050 $ 2,200,715 $ 80,335 Supplies 43,812 50,012 61,118 (11,106) Other services and charges 73,400 75,400 95,704 (20,304) Contractual services 33,900 33,900 38,401 (4,501) Capital outlay 23,495 23,495 28,496 (5,001) Total police 2,455,657 2,463,857 2,424,434 39,423 Fire protection: Current Contractual services 402,591 402,591 399,770 2,821 Building inspection: Current Personal services 299,426 299,426 276,170 23,256 Supplies 880 880 476 404 Other services and charges 24,875 24,875 25,245 (370) Contractual services 600 600 1,433 (833) Capital outlay 15,000 15,000 13,504 1,496 Total building inspection 340,781 340,781 316,828 23,953 Total public safety 3,199,029 3,207,229 3,141,032 66,197 Public works: Streets: Current Personal services 448,278 448,278 416,925 31,353 Supplies 84,500 84,500 89,374 (4,874) Other services and charges 76,500 71,500 76,729 (5,229) Contractual services 259,858 45,858 57,253 (11,395) Capital outlay - 5,000 5,000 - Total streets 869,136 655,136 645,281 9,855 Fleet: Current Personal services 94,439 94,439 105,436 (10,997) Supplies 141,000 171,000 183,021 (12,021) Other services and charges 44,880 44,880 35,600 9,280 Contractual services 1,200 1,200 - 1,200 Capital outlay 150,000 - - Total fleet 431,519 311,519 324,057 (12,538) Total public works 1,300,655 966,655 57 969,338 (2,683) CITY OF LINO LAKES, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND ('I IANGFS IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2005 Statement I I Page 5 of 6 2005 Original Budget Final Budget Variance with Final Budget Actual Positive (Negative ('arks and recreation: Parks: Current Personal services $ 418,619 $ 418,619 $ 405,167 8 13,452 Supplies 42,000 42,000 46,313 (4,313) Other services and charges 33,420 33,420 26,138 7,282 Contractual services 10,900 10,900 11,737 (837) Capital outlay 50,000 - - - T'otal parks 554,939 504,939 489,355 15,584 Recreation: Current Personal services 240,309 240,309 229,922 10,387 Supplies 2,500 2,500 2,060 440 Other services and charges 16,500 16,500 10,769 5,731 .- Contractual services 890 890 1,070 (180) Total recreation 260,199 260,199 243,821 16,378 Total parks and recreation 815,138 765,138 733,176 31,962 Conservation of natural resources: Forestry: Cun-ent Personal services 29,656 29,656 29,308 348 Supplies 1,200 1,200 67 1,133 Other services and charges 850 850 540 310 Contractual services 7,850 7,850 7,540 310 Capital outlay 27.000 2,000 1,028 972 Total forestry 66,556 41,556 38,483 3,073 Environmental: Current Personal services 54,873 54,873 53,253 1,620 Supplies 600 600 585 15 Other services and charges 9,640 9,640 7,722 1,918 Contractual services 4,100 4,100 2,445 1,655 Capital outlay 2,000 2,000 1,293 707 Total environmental 71,213 71,213 65,298 5,915 CITY OF LINO LAKES, NIINNESOTA GENERAL FUND S('I ILDULE OF REVENUES, EXPENDITURES AND CI IANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2005 Statement 11 Page 6of6 2005 Variance with Original Final Final Budget Budget Budget Actual Positive (Negative Conservation of natural resources: (continued) Solid waste abatement: Current Personal services $ 26,191 $ 26,191 $ 27,299 $ (1,108) Other services and charges 2,200 2,200 634 1,566 Contractual services 16,400 16,400 10,941 5,459 Capital outlay 5,000 5,000 - 5,000 Total solid waste abatement 49,791 49,791 38,874 10,917 Total conservation of natural resources 187,560 162,560 142,655 19,905 Other Contingency 75,000 45,000 - 45,000 Total Expenditures 8,144,711 7,660,911 7,339,720 321,191 Revenue over Expenditures 467,000 706.125 239,125 Other financing sources (uses): Transfer out - (467,000) (467,782) (782) Total other financing sources (uses) - (467,000) (467,782) (782) Net increase (decrease) in fund balance $ $ 238,343 $ 238,343 Fund Balance - January 1 5,210,465 Fund balance - December 31 $ 5,448,808 59 CF1Y OF LINO LAKES, NIINNESOTA NO'T'E TO REQUIRED SUPPLEMENTARY INFORMATION December 31, 2005 Note 1 BUDGETS The General Fund budget is legally adopted on a basis consistent with U.S. Generally Accepted Accounting Principles. IMM Nom Nonmajor Governmental Funds Special Revenue Funds Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for particular purposes. The City maintained the following nonmajor Special Revenue Funds during the year. Economic Development Authority - established to account for the receipt and uses of funds for economic purposes. Program Recreation - established to account for various self - supporting recreational programs. Debt Service Funds The Debt Service Funds account for the accumulation of resources for, and the payment of, interest, principal and related costs on general long -term debt. The City's Debt Service Funds account for three types of bonded indebtedness: General Debt Bonds - are repaid primarily from property taxes. Improvement Bonds - are repaid primarily from special assessments. Public Facility Lease Revenue Bonds -• are repaid primarily from lease revenues received from the EDA leasing the buildings to the City of Lino Lakes and other tenants. Capital Project Funds Capital Project Funds account for the acquisition or construction of major capital facilities other than those financed by Proprietary Funds and Trust Funds. The City maintained the following nonmajor Capital Project Funds during the year: Capital Improvement Projects - to account for the proceeds from Equipment Certificates. Closed Bond Fund - to account for excess funds from matured bond issues. Street Reconstruction — to account for the financing of future reconstruction of City streets. Sealcoating - to account for money received from assessments and developer deposits for future street sealcoating projects. Surface Water Management - to account for the financing of surface water management and storm water improvements. SAC Revolving - to account for refunds from the Metropolitan Council Environmental Service for properties that paid Sewer Area Charges (SAC) that will be collected in the future. Interim Construction - to account for the construction of public improvements. Town Center Project and Infrastructure Funds - to account for costs associated with the construction of the City Town Center project. Tax Increment Funds - to account for development projects financed with tax increments. Lake /Apollo Drive Improvement Fund - established to account for the costs of upgrading Lake Drive and Apollo Drive east of Lake Drive for the Market Place development. two Capital Project Funds (Continued) Twilight Acres /W. Shadow Pond Improvement Fund - established to account for the costs of installing sewer infrastructure in the Twilight Acres area and to install utility and street improvements on West Shadow Ponds Drive. Birch Hodgson Street Improvement Fund — to account for costs to improve the intersection at Birch Street and Hodgson Road. Dedicated Parks — to account for the receipts and use of monies collected from dedicated parks fees. Municipal State Aid — to account for the collection of assessments on municipal state aid projects. Office Equipment Revolving Fund — to account for the receipt and use of funds for office equipment purchases. CSAH 14/8 Reconstruction Fund — established to account for the costs associated with the reconstruction of County and State Highways 14 and 8. 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 COMI3INING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS December 31, 2005 Assets Cash and investments ('ash and investments with escrow agent Accrued Interest Receivable Accounts receivable Due from other governmental units 'Faxes receivable: Delinquent Due from County Delinquent tax increment Special assessments receivable: Delinquent Deferred Due from County Prepaid Items Special Revenue Debt Service Economic Special Improvement Improvement Development Program Revenue Bonds of Bonds of Authority Recreation Subtotal I 998A 199813 78,134 $ 78,134 $ 2,551,966 $ 1,685,746 1,763 1,763 190,541 2,227 1,684 390 260,761 169 Total assets $ $ 79,897 $ 79,897 $ 2,742,507 $ 1,950,977 Liabilities and Fund Balance Liabilities: Intcrfund payable $ $ $ $ $ Accounts payable 3,078 3,078 Salaries Payable 340 340 - Contracts and retainage payable Due to Other Governments - Advances from Other Funds Deferred revenue 190,541 263,378 Total liabilities 3,418 3,418 190,541 263,378 Fund balance (deficit): Reserved for Prepaid Items 1,763 1,763 Reserved for Debt Retirement 2,551,966 1,687,599 Reserved for Environmental improvement Unreserved: Designated: Recreation Programs 74,716 74,716 Capital improvements - - Undesignated Total fund balance (deficit) 76,479 76,479 2,551,966 1,687,599 Total liabilities and fund balance $ $ 79,897 $ 79,897 $ 2,742,507 $ 1,950,977 61 Statement 12 Page 1 of 4 Debt Service (continued) Lease Improvement Public Project Improvement Certificates Revenue Refunding Refunding Improvement Refunding Improvement of Bonds Bonds Bonds 13onds of Bonds of Bonds of Indebtedness of 1998A of 1999A of 19990 2002A 2003A 2003B 8 .87,910 $ 340,837 $ 3,702 $ 327,947 $ 516,188 $ 295,914 $ 102,598 486,293 10,582 1,458 - 56,250 - 4,285 4,854 3,204 3,726 $ 95,399 4,285 4,285 91,114 818 1,902 1,520 250 1,257 883 - 1 16,166 318.742 49,045 2.067 - $ 893.418 $ 4,520 $ 342,041 $ 633,611 $ 617,606 $ 152,126 4,854 818 4,854 818 888,564 3,702 1,992 117,423 1,992 117,423 340,049 516,188 319,625 49,278 319,625 49,278 297,981 102,848 91,114 888,564 3.702 340,049 516,188 297.981 102,848 $ 95.399 $ 893,418 $ 4,520 $ 342,041 $ 633.611 $ 617.606 $ 152,126 62 CITY OF LINO LAKES, MINNESOTA COMBINING BALANCE SI IEET - NONMAJOR GOVERNMENTAL FUNDS December 31, 2005 Debt Service (continued) Capital Projects Improvement and Improvement Utility Revenue Refunding Dcbt Capital Closed Bonds of Bonds of Service Improvement Bond 2004A 200513 Subtotal Projects Fund Assets Cash and investments $ 332,188 $ 7,552 $ 6,252,548 $ 1,070,502 $ 1,001,400 ('ash and investments with escrow agent 496,875 - Accrued Interest Receivable - 1,458 - Accounts receivable - 56,250 - Due from other governmental units - faxes receivable: Delinquent 13,591 - - Due from County - - 10,384 - Delinquent tax increment - Special assessments receivable: Delinquent 2,530 1,531 Deferred 416,150 - 1,352,223 19,898 Due from County 453 2,689 479 Prepaid Items Total assets $ 748,791 $ Liabilities and Fund Balance 7,552 $ 8.188,548 $ 1,070,502 $ 1.023,308 Liabilities: Intcrfund payable $ - $ $ - $ - $ Accounts payable - 9,697 8,476 Salaries Payable - Rctainage payable Due to Other Governments - Advances from Other Funds - Deferred revenue 416,150 - 1,368,344 21,429 Total liabilities 416,150 1,368,344 9,697 29,905 Fund balance (deficit): Reserved for Prepaid Items - Reserved for Debt Retirement 332,641 7,552 6,820,204 - Reserved for Environmental Improvement - - Unreserved: Designated: Recreation Programs - Capital improvements - - Undesignated - - 1,060,805 993,403 Total fund balance (deficit) 332,641 7,552 6,820,204 1,060,805 993,403 Total liabilities and fund balance $ 748,791 $ 7,552 $ 8,188,548 $ 1,070,502 $ 1,023,308 63 ✓ ow W NW W PM Statement 12 Page 2of4 Capital Projects (Continued) Surface Town Town Street Water SAC Interim Center Center Reconstruction Sealcoating Management Revolving Construction Project Infrastructure S 604,503 $ 153,525 S 303,717 $ 371,977 $ 281,620 $ 283,004 S 22,206 27 1,129 5,000 2,595 351,035 1,018 $ 604.503 $ 154,681 $ 663.365 $ 371.977 S 281.620 $ 283,004 $ 22,206 $ 604,503 604,503 $ 604,503 1,187 1,156 2,343 58,069 2,008 353,630 413,707 152,338 249,653 281.620 - 22,206 371,977 - 283,004 - 152,338 249,653 371,977 281.620 283,004 22,206 $ 154,681 $ 663,365 $ 371,977 S 281.620 $ 283,004 $ 22,206 CITY OF LINO LAKES, MINNESOTA COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS December 31, 2005 Capital Projects (continued) Tax Tax Tax Lake /Apollo Dr Twilight Acres/ Increment Increment Increment Improvement W Shadow Pond Financing Financing Financing Market Place Improvement 1 -4 1 -5 1 -9 Assets Cash and investments $ - $ - $ 33,972 $ 31,475 $ 83,810 Cash and investments with escrow agent - Accrued Interest Receivable - Accounts receivable - Due from other governmental units Taxes receivable: Delinquent - Due from County - - Delinquent tax increment - 964 Special assessments receivable: Delinquent - Deferred - Due from County - Prepaid Items Total assets $ $ - $ 33.972 $ 31,475 $ 84,774 Liabilities and Fund Balance Liabilities: lnterfund payable $ $ $ $ - $ Accounts payable 386 855 Salaries Payable - Retainage payable - Due to Other Governments 1,822 - Advances from Other Funds - Deferred revenue - 964 Total liabilities - 2,208 1,819 Fund balance (deficit): Reserved for Prepaid Items Reserved for Debt Retirement Reserved for Environmental Improvement Unreserved: Designated: Recreation Programs - Capital improvements 33,972 29,267 82,955 Undesignated - - - - Total fund balance (deficit) - 33,972 29,267 82,955 Total liabilities and fund balance $ $ $ 65 33,972 $ 31,475 $ 84,774 Statement 12 Page 3 of 4 Capital Projects (Continued) Tax Tax Office Increment Increment Birch Street Equipment CSAH 14'8 Financing Financing Hodgson Road Dedicated Municipal Revolving Reconstruction _ 1 -10 1 -11 Improvement Parks State Aid Fund Project IMO lom 21,134 $ $ $ 231,439 $ - $ 53,113 $ $ 21.134 $ - $ $ 231.439 $ $ 53,113 $ - $ 22.899 S 16,828 $ - S 7,829 $ S 14.912 423 1,078 983 19,900 9,197 40,541 - - 957,112 - - - 423 23,977 36,728 966,309 49,353 - 14,912 20,711 (23,977) (36,728) (734.870) (49.353) 53,113 20,711 (23.977) (36,728) (734,870) (49.353) 53,113 (14,912) (14,912) $ 2 1.134 $ $ $ 231,439 $ $ 53,113 $ CITY OF LINO LAKES, MINNESOTA Statement 12 COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS Page 4 of 4 December 31, 2005 Permanent Capital Projects Fund Capital Foxborough Projects Environment Subtotal Fund Assets Total 2005 ('ash and investments S 4,547,397 $ 100,853 $ 10,978,932 Cash and investments with escrow agent - 496,875 Accrued Interest Receivable 1,458 Accounts receivable 56,250 Due from other governmental units 5,000 5,000 Taxes receivable: Delinquent - 13,591 Due from County 10,384 Delinquent tax increment 964 964 Special assessments receivable: Delinquent 4,153 6,683 Deterred 372,062 - 1,724,285 Due from County 1,497 - 4,186 Prepaid Items - 1,763 Total assets $ 4.931.073 $ 100.853 $ 13,300.371 Liabilities and Fund Balance Liabilities: Interfund payable 8 62,468 S - $ 62,468 Accounts payable 81,154 84,232 Salaries Payable 340 Retainage payable 71,646 - 71,646 •••• Due to Other Governments 1,822 - 1,822 Advances from Other Funds 957,112 - 957,112 Deferred revenue 377,179 - 1,745,523 Total liabilities 1,551,381 2,923,143 Fund balance (deficit): Reserved for Prepaid Items 1,763 Reserved for Debt Retirement - 6,820,204 Reserved for Environmental Improvement - 100,000 100,000 Unreserved: Designated: Recreation Programs - - 74,716 Capital improvements 1,456,519 - 1,456,519 Undesignated 1,923,173 853 1,924,026 Total fund balance (deficit) 3,379,692 100,853 10,377,228 Total liabilities and fund balance $ 4,931.073 $ 100,853 $ 13,300,371 67 CITY OF LINO LAKES, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CIIAN ES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS Year Ended December 31, 2005 Special Revenue Debt Service Economic Special Improvement Improvement Development Program Revenue Bonds of Bonds of Authority Recreation SubTotal 1998A 19988 Revenue: General property taxes $ - $ - $ $ - $ 144,194 Fax increments Intergovernmental - - Special assessments - - 29,703 54,834 Charges for services 194,397 194,397 - Invcstment earnings 2,713 2,713 6,023 12,374 Refunds and reimbursements - - - Miscellaneous - - Total revenue - 197,110 197,110 35,726 211,402 Expenditures: Current: General government: 580 - 580 Public works: l'arks, recreation and forestay 180,167 180,167 Capital outlay: Public safety - Puhlic works l'arks, recreation and forestry - Dcht service: Principal 290,000 120,000 Interest and fiscal charges 152,074 70,326 Total expenditures 580 180,167 180,747 442,074 190,326 Revenue over (under) expenditures (580) 16,943 16,363 (406,348) 21,076 Other financing sources (uses): Transfer in 782 - 782 375,000 - Transfer out - - Sale of property - Issuance of debt - 2,410,643 1,310,000 Premium on bonds issued - 171,357 - Total other financing sources (uses) 782 - 782 2,957,000 1,310,000 Net increase (decrease) in fund balance 202 16,943 17,145 2,550,652 1,331,076 Fund balance (deficit) Beginning of year (202) 59,536 59,334 1,314 356,523 Fund balance (deficit) - December 31 $ $ 76.479 $ 76.479 $ 2,551.966 $ 1,687,599 68 Statement 13 Page 1 of 4 Debt Service (continued) Lease Improvement Public Project Improvement Certificates Revenue Refunding Refunding Improvement Refunding Improvement of Bonds Bonds Bonds Bonds of Bonds of Bonds of Indebtedness of I998A of 1999A of 19990 2002A 2003A 20038 $ 271,574 $ 317,293 S 8 129,300 8 - S - 8 22,372 200 213 7,807 89 74,482 62,929 13,566 3,776 16,767 6,780 8,696 2,140 w. 1 12,500 275,550 446,773 7,807 136,169 83,178 62,929 38,078 Way 236,000 195,000 365,000 105,000 95,000 435,000 34.806 234,440 25,278 29,081 17,615 53,352 270,806 429,440 390.278 134,081 112,615 488,352 4,744 17,333 (382,471) 2,088 (29,437) (425,423) 383,000 148,211 444,785 383,000 148,211 444,785 4,744 17,333 529 2,088 118,774 19,362 86,370 871,231 3,173 337,961 397,414 278,619 $ 91,114 $ 888,564 $ 3,702 $ 340,049 $ 516,188 8 297,981 11.853 11,853 26,775 26,225 76,623 102,848 ('ITY OF LINO LAKES, NIINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Cl 1ANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS Year Ended December 31, 2005 Revenue: ( icneral property taxes Fax increments Intergovernmental Special assessments Charges for services Investment earnings Refunds and reimbursements Miscellaneous Total revenue Debt Service (continued) Improvement and Utility Revenue Bonds of 2004A Improvement Refunding Bonds of 2005B $ - $ 263,998 5,693 269,691 11xpcnditures: Current: General government: Public works: Parks, recreation and forestry Capital outlay: Public safety Public works Parks, recreation and forestry Dcht service: Principal Interest and fiscal charges 33,466 Total expenditures 33,466 Revenue over (under) expenditures 236,225 Other financing sources (uses): Transfer in Transfer out Sale of property Issuance of debt Premium on bonds issued Total other financing sources (uses) Net increase (decrease) in fund balance 236,225 Fund balance (deficit) Beginning of year 96,416 Fund balance (deficit) - December 31 $ 332,641 32 32 26,837 26,837 (26,805) 34,357 34,357 7,552 Debt Service SubTotal Capital Projects Capital Improvement Projects $ 884,733 $ 507,821 62,281 112,500 1,567,335 1,84 1 ,000 689,128 2,530,128 (962,793) 1,350,996 3,755,000 171,357 5,277,353 4,314,560 2,505,644 $ 7,552 $ 6,820,204 70 27,292 149,198 176,490 2,678 142,521 115,928 261,127 (84,637) Closed Bond Fund $ 3,204 25,928 29,132 11,918 11,918 17,214 150,000 (84,418) 280,269 107,000 452,851 368,214 17,214 692,591 976,189 $ 1,060,805 $ 993,403 Own Statement 13 Page 2 of 4 Capital Projects Surface Street Water Reconstruction Sealcoating Management $ $ $ Town Town SAC Interim Center Center Revolving Construction Project Infrastructure $ $ $ $ 16,462 - - 122,412 883 207,153 - - 15,118 1,766 16,753 9,614 7,264 6,609 49,350 - - 87,287 153.992 51,999 223,906 9,614 7,264 93,896 96,517 192,234 2,186 - 873 216,054 96,517 192,234 216,054 57,475 (140,235) 7,852 214,000 (342.205) �- 214.000 (342,205) 57,475 73,765 (334,353) 547,028 78,573 584,011 $ 604,503 $ 152.338 $ 249,658 2.186 - 873 7.428 7,264 573 573 93,023 573 7.428 7,264 93,023 573 364,549 /74,356 189,981 21,633 371,977 $ 281.620 $ 283.004 $ 72206 CI'T'Y OF LINO LAKES, NIINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CI IANGIS IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS Year Ended December 31, 2005 Capital Projects (Continued) Lake /Apollo Dr Twilight Acres/ Tax Increment Tax Increment Tax Increment Improvement W Shadow Pond Financing Financing Financing Market Place Improvement 1 -4 1 -5 1 -9 Revenue: General property taxes Tax increments - 62,309 200,513 Intergovernmental - - - - Special assessments - ('harges for services - - Investment earnings 1,142 4,407 876 756 2,868 Refunds and reimbursements - Misccllaneous 2,036 Total revenue 3,178 4,407 876 63,065 203,381 I xpcnditures: Current: General government: - - 56,487 333,247 Public works: 4,258 Parks, recreation and forestry Capital outlay: Public safety Public works Parks, recreation and forestry Debt service: Principal Interest and fiscal charges Total expenditures 4,258 56,487 333,247 Revenue over (under) expenditures 3,178 Other financing sources (uses): Transfer in Transfer out (45,499) (148,211) Sale of property Issuance of debt Premium on bonds issued Total other financing sources (uses) Net increase (decrease) in fund balance Fund balance (deficit) Beginning of year 42,321 148,062 33,096 22,689 212,821 Fund balance (deficit) - December 31 $ $ $ 33,972 $ 29,267 $ 82,955 149 876 6,578 (129,866) (45,499) (148,211) (42,321) (148,062) 876 6,578 (129,866) 72 Immo Iwo IOW Statement 13 Page 3 of 4 Capital Projects (Continued) Office Fax Increment Tax Increment Birch Street Equipment CSAH 14/8 Financing Financing Hodgson Road Dedicated Municipal Revolving Reconstruction 1 -10 1 -11 Improvement Parks State Aid Fund Project 28,628 101 83 7,892 - 113 156,149 28,729 - 83 164,041 113 525 1,078 - - - - - 98,356 221,088 992 - - 197,958 - - - 13,920 81,503 - 525 1,078 98,356 279,461 221,088 14,912 28,204 (1,078) (98,273) (115,420) (221,088) 113 (14,912) 84,418 50,000 547,705 53,000 84,418 50,000 547,705 53,000 28,204 (1,078) (13,855) (65,420) 326,617 53,113 (14,912) (7,493) (22,899) (22,873) (669,450) (375,970) 20,711 $ (23,977) $ (36.728) $ (734,870) $ (49,353) $ 53,113 $ (14,912) ('ITY OF LINO LAKES, NIINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CI IANGI ?S IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS Year linded December 31, 2005 Statement 13 Page 4 of 4 Permanent Capital Projects Fund Capital Foxborough Projects Environment Totals SubTotal Fund 2005 Revenue: General property taxes $ $ - $ 884,733 Tax increments 291,450 291,450 Intergovernmental 16,462 - 16,462 Special assessments 333,652 841,473 Charges for services 194,397 Investment earnings 129,155 853 195,002 Refunds and reimbursements 49,350 49,350 Miscellaneous 394,670 100,000 607,170 Total revenue 1,214,739 100,853 3,080,037 Expenditures: Current: General government: 408,992 409,572 Public works: 829,499 829,499 I'arks, recreation and forestry 197,958 378,125 Capital outlay: Public safety 142,521 - 142.521 I'ublic works 129,848 129,848 Parks, recreation and forestry 81,503 81,503 Debt service: Principal 1,841.000 Interest and fiscal charges 689,128 Total expenditures 1,790,321 4,501,196 Revenue over (under) expenditures (575,582) 100,853 (1,421,159) Other financing sources (uses): Transfer in 1,099,123 2,450,901 Transfer out (620,333) (620,333) Sale of property 280,269 280,269 Issuance of debt 107,000 3,862,000 Premium on bonds issued - 171,357 Total other financing sources (uses) 866,059 6,144,194 Net increase (decrease) in fund balance 290,477 100,853 4,723,035 Fund balance (deficit) Beginning of year 3,089,215 5,654,193 Fund balance (deficit) - December 31 $ 3,379,692 $ 100;853 $ 10,377,228 74 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, 2005 Statement 14 NNW Revenue: Charges for services: Recreation Fees Investment earnings Total revenue low 2005 Variance with Original Final Final Budget Budget Budget Actual Positive (Negative) $ 213,255 $ 213,255 $ 194,397 $ (18,858) 2,713 2,713 213,255 213,255 197,110 (16,145) Expenditures: .." Current: Personal services 117,230 117,230 93,171 24,059 Supplies 59,000 59,000 79,484 (20,484) '-- Other services and charges 9,920 9,920 765 9,155 Contractual services 19,990 19,990 6,747 13,243 Total expenditures 206,140 206,140 180,167 25,973 Net increase (decrease) in fund balance $ 7,1 15 $ Fund balance - January 1 Fund balance - December 31 7,115 16,943 $ 59,536 $ 76,479 9,828 Fiduciary Funds Agency Fund Agency Funds are used to account for assets held by the City as an agent for individuals, private organizations, or other governments. The City maintained the following Agency fund during the year: Contractor's Deposits — to account for pass - through costs relating to prospective developers. NNW CITY OF LINO LAKES, MINNESOTA Statement 15 STATEMENT OF CHANGES IN ASSETS AND LIABILITIES - FIDUCIARY FUNDS Year Ended December 31, 2005 Assets Cash and investments Deposits receivable Total assets Liabilities Accounts payable Deposits payable Total Liabilities Balance Balance January 1, December 31, 2005 Additions Deductions 2005 S 1,432,706 $ 1,541,069 $ 1,593,282 S 1,380,493 10,520 10,520 S 1,443,226 $ 1,541,069 $ 1,593,282 S 1,391,013 $ 79,095 S 902,033 $ 892,548 S 88,580 1,364,131 1,690,343 1,752,041 1,302,433 $ 1,443,226 $ 2,592,376 $ 2,644,589 $ 1,391,013 SUPPLEMENTARY FINANCIAL INFORMATION CITY OF LINO LAKES, MINNESOTA COMBINED SCHEDULE OF INDEBTEDNESS December 31, 2005 Interest Rates Dated Final Maturity Date General Obligation Bonds: 2002 Equipment Certificates 6.00'4 2/1/02 12/31/05 2003A Equipment Certificates 6.004 2/1/03 12/31/06 200313 Equipment Certificates 4.00% 3/31/03 12/31/06 2004A Equipment Certificates 4.00'%. 2/1/04 12/31/06 2005 Equipment Certificates 4.00% 2;1/05 12/31/08 Civic Complex Lease Revenue Bonds - 1998A 4.20 % - 5.35% 8/1/98 2/1/19 Public Project Revenue Refunding Bonds - 1 999C 4.75 % - 5.10% 9/1/99 2/1/10 "total General Obligation Bonds Special Assessment I3onds: G. O. Improvement Bonds of 1998A 4.50 % - 4.90% 8/1/98 2/1/15 G. O. Improvement Bonds of 19986 4.50 % -4.90% 8/1/98 2/1/15 G. O. Improvement Refunding Bonds of 1999A 4.25'% -4.70% 9/1/99 2/1/06 G. O. Improvement Bonds of 2002A 3.00%-4.10% 8/1/02 2/1/13 0. 0. Improvement Bonds of 200213 3.20 % - 5.55% 8/1/02 2/1/13 G. 0. Improvement Refunding Bonds of2003A 2.00%-4.25% 12/1/03 2/1/19 G. O. Improvement Bonds of 2003B 3.20% -5.60% 12/1/03 2/1/14 G. O. Improvement and Utility Bonds of2004A 1.90% -4.45% 11/15/04 2/1/20 G. 0. Improvement Bonds of2005A 4.35 % - 5.15% 11/1/05 2/1/21 G. 0. Improvement Refunding Bonds of2005B 3.75% -5.00% 11/1/05 2/1/15 Total General Improvement Bonds with special assessments pledged Revenue Bonds: 0. 0. Water Revenue Bonds of 199613 4.10% -5.70% 10/1/96 2/1/12 G. O. Water Revenue Refunding Bonds of 1999B 4.25 % -4.90% 9/1/99 2/1/08 "total Revenue Bonds Total City indebtedness Exhibit 1 Prior Years Original Issue Payments - $ 140,000 $ 95,000 130,000 45,000 200,000 50,000 274,000 - 5,350,000 735,000 980.000 385,000 7,074.000 1.3 I0,000 4,31 0,000 1,160,000 2,000.000 450,000 1,725.000 1.005,000 645,000 95,000 2,1 10,000 170,0(10 2,090.000 - ,� 250.000 - 1,330,000 - loom MOM Payable 1/1 /05 Issued 2005 Payments $ 45,000 $ 85,000 150,000 274,000 4,615,000 595.000 5,764,000 107,000 107,000 3,150,000 1.550.000 - 720,000 550,000 1.940,000 2,090,000 - 250,000 1.330,000 5,550,000 3.755,000 14,460.000 2.880,000 11.580,000 9.305,000 3,320,000 680,000 4,000,000 1.035,000 260,000 1,295,000 2,285,000 420,000 2,705,000 25.534.000 5.485,000 20.049.000 Payable 12/31 i05 Principal Due In 2006 Interest Due In 2006 $ 45,000 S - $ 45,000 40,000 65,000 85,000 81,000 193,0(10 107,000 195,000 4,420,000 105,000 490,000 536,000 5,335,000 40,000 85,000 95,000 35,000 210,000 105,000 570,000 $ 2,400 3,400 7,750 8,203 221,860 21,534 265,147 290,000 2,360,000 2,860,000 120,000 1,430,000 1,430,000 365,000 355,000 355,000 95,000 455,000 100,000 175,000 1,765,000 185,000 435,000 1,655.000 445,000 250,000 25,000 1,330,000 65,000 5,550,000 3,755,000 1,480,000 19,405,000 5,465,000 I85,000 95,000 230,000 66,488 33,526 8,343 x 14,115 84,725 43,950 rC 7. 1 1 1,853 46,249 207,613 117,516 }( 634,378 2,1 00,000 325,000 2,425,000 190,000 105,000 295,000 109,725 13,143 '' 122,868 9,412,000 2,296.000 27,165,000 6,330,000 1.022,393 78 CITY OF LINO LAKES, MINNESOTA SCHEDULE OF DEFERRED TAX LEVIES December 31, 2005 G.O. Lease G. O. Improvement Year of Equipment Equipment Equipment Equipment Revenue Improvement Refunding Levy/ Certificates Certificates Certificates Certificates Bonds Bonds Bonds of Collection of 2003A of 2003B of 2004A of 2005 of 1998A of 1998B 1999A 2005/2006 $ 44,520 S 92,820 $ 107,888 $ 45,363 $ 343,382 $ 152,519 $ 290,270 2006/2007 - - 107,016 39,774 353,031 153,729 - 2007/2008 - - 40,404 361,562 154,704 2008/2009 - - 368,387 155,441 2009/2010 - - 485,462 155,796 2010/2011 - 485,987 155,757 2011/2012 - - - 490,655 155,313 2012/2013 - 489,001 154,537 2013/2014 - - 491,258 158,719 2014/2015 - - 492,413 - 2015/2016 - 497,716 2016/2017 - 501,215 2017/2018 - 503,310 - 2018/2019 - 2019/2020 - - - $ 44,520 $ 92,820 $ 214,904 $ 125,541 $ 5,863,379 $ 1,396,515 $ 290,270 79 Exhibit 2 Public G.O. G. O. Project G. 0. G. 0. Improvement G. 0. Improvement Refunding Improvement Improvement and Utility Improvement Refunding Bonds Bonds Bonds Bonds Bonds Bonds I999C of 2002A of 20038 of 2004A of 2005A of 20058 Total - $ 121,459 $ 8,897 $ 23,688 $ 124,450 $ 568,073 $ 609,902 $ 2,533,231 126,667 5,259 22,828 128,292 570,502 585,113 2,092,211 7,467 21,844 126,520 568,297 574,022 1,854,820 6,496 20,741 1 24,472 569,084 557,484 1,802,105 .. 5,446 19,534 127,439 569,084 546,197 1,908,958 9,645 23,524 124,793 568,297 524,213 1,892,216 8,385 21,917 127,187 566,722 512,925 1,883,104 - 20,248 129,268 569,609 490,613 1,853,276 23,781 125,772 566,197 463,050 1,828,777 - 122,133 567,247 1,181,793 - 128,853 572,497 1,199,066 124,548 571,184 1,196,947 125,388 574,072 - 1,202,770 - 125,898 574,907 700,805 - - 126,123 579,639 705,762 $ 248,126 $ 51,595 $ 198,105 $ 1,891,136 $ 8,555,411 $ 4,863,519 $23,835,841 CITY OF LINO LAKES, MINNESOTA DEBT SERVICE PAYMENTS TO MATURITY - ALL BONDS December 31, 2005 Bonds payable Future interest payable Totals Payments to maturity: 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 G. O. G. O. Equipment Equipment Equipment Equipment Improvement Improvement Certificates Certificates Certificates Certificates Bonds Bonds 2003A 2003B 2004A 2005 of 1998A of 1998B $ 40,000 $ 85,000 $ 193,000 $ 107,000 $ 2,860,000 $ 1,430,000 2,400 3,400 11,670 12,563 674,475 362,104 $ 42,400 $ 88,400 $ 204,670 $ 119,563 $ 3,534,475 $ 1,792,104 42,400 88,400 102,750 101,920 43,203 416,450 184,352 37,880 403,400 183,840 38,480 385,462 183,103 372,637 182,140 359,670 180,882 346,489 179,256 333,094 177,248 319,485 174,888 305,805 172,230 291,983 174,165 $ 42,400 $ 88,400 $ 204,670 $ 119,563 $ 3,534,475 $ 1,792,104 81 G. O. Improvement G. 0. G. 0. Refunding Improvement Improvement Bonds Bonds Bonds of 1999A of 2002A of 2002B G. 0. Improvement Refunding Bonds 2003A G. O. Improvement Bonds 2003B G. O. Improvement and Utility Bonds 2004A G. O. Improvement Bonds 2005A G. O. Improvement Refunding Bonds 2005B $ 355,000 $ 455,000 $ 1,765,000 S 1,655,000 5 250,000 $ 1,330,000 $ 5,550,000 $ 3,755,000 8,342 46,449 396,041 273,334 61,530 414,719 2,598,010 876,923 $ 363,342 363,342 $ 501,449 $ 2,161.041 $ 1,928,334 $ 311,530 $ 1,744,719 $ 8,148,010 $ 4,631,923 1 14,1 15 269,725 120,883 266,568 117,253 267,688 29,893 272,613 28,930 271,388 27,930 269,310 31,830 271,395 30,615 272,354 488,950 36,453 111,250 541,022 580,859 474,000 35,584 119,500 543,335 557,250 82,813 34,590 117,437 541,235 546,688 81,301 33,490 115,187 541,985 530,938 79,611 32,315 112,900 541,985 520,188 82,638 35,950 120,420 541,235 499,250 80,537 34,390 117,700 539,735 488,500 78,438 32,778 114,810 542,485 467,250 81,088 35,980 116,702 539,235 441,000 78,488 - 118,182 540,235 80,788 114,382 545,235 - 77,988 - 115,482 543,985 79,994 116,382 546,735 81,700 - 117,013 547,530 - - 117,372 552,038 $ 363,342 $ 501,449 $ 2,161,041 $ 1,928,334 $ 311,530 $ 1,744,719 $ 8,148,010 $ 4,631,923 82 Omm CITY OF LINO LAKES, MINNESOTA DEBT SERVICE PAYMENTS TO MATURITY - ALL BONDS (CONTINUED December 31, 2005 Exhibit 3 G. O. G. O. Water Civic Public Water Revenue Complex Project Revenue Refunding Revenue Revenue Bonds Bonds Bonds Bonds of 1996B of 1999B of 1998A of 1999C Totals Bonds payable $ 2,100,000 $ 325,000 $ 4,420,000 $ 490,000 $ 27,165,000 Future interest payable 472,441 24,114 1,847,512 59,223 8,177,466 Totals $ 2,572,441 $ 349,114 $ 6,267,512 $ 549,223 $ 35,342,466 Payments to maturity: 2006 299,725 118,143 431,860 126,534 4,361,539 2007 299,680 113,154 441,625 116,640 3,817,266 2008 298,915 117,817 450,282 111,790 3,295,561 2009 419,034 - 457,595 101,964 3,140,786 2010 419,682 346,594 92,295 2,988,450 2011 418,864 455,094 2,978,447 2012 416,541 455,068 2,948,050 2013 459,002 2,494,118 2014 456,790 2,150,844 ..- 2015 458,415 1,663,483 2016 458,990 1,201,411 2017 463,181 1,202,653 2018 465,845 1,210,974 2019 467,171 1,215,433 2020 671,430 $ 2,572,441 $ 349,114 $ 6,267,512 $ 549,223 $ 35,342,466 CITY OF LINO LAKES, MINNESOTA INSURANCE IN FORCE December 31, 2005 Exhibit 4 Coverage Amount General Liability: Bodily Injury /Property Damage $ 1,000,000 Personal Injury /Police Professional Liability 1,000,000 Employee Benefit Liability 1,000,000 Fire Legal Liability 50,000 Medical Expense Occurrence Limit 1,000 Medical Expense Aggregate 10,000 Property Damage ($500 Deductible) Property: Buildings and Contents (including Mobile and EDP - Electronic Equipment & Valuable Papers) 19,932,235 Faithful Performance Blanket Bond 500,000 Storage Tank Liability 100,000 Rented/Leased Equipment ($500 Deductible) 250,000 Public Official and Employee Liability ($500 Deductible each occurrence) 1,000,000 Automotive: Bodily injury and property damage Comprehensive and Collision Uninsured motorists 1,000,000 Actual Cash Value 1,000,000 Workmen's compensation Statutory Umbrella Liability 1,000,000 Crime - Theft Disappearance and Destruction ($500 Deductible) 100,000 84 CITY OF LINO LAKES, MINNESOTA TAXABLE VALUATIONS, TAX LEVIES AND TAX RATES Exhibit 5 Tax Capacity Tax Capacity Values Values 2004/2005 2003/2004 Taxable valuations: Total $ 16,620,861 $ 14,493,687 Fiscal disparities: Distribution 1,749,152 1,708,178 Contribution (881,474) (679,357) Less: Captured Tax Increment Value (274,702) (246,042) $ 17 213,837 $ 15,276,466 Tax Tax Certified Capacity Certified Capacity Levy Rate Levy Rate Taxes Levied: Revenue 6,342,211 36.838 5,623,542 36.302 Bond and Interest 927,091 5.385 927,078 5.985 Totals $ 7.269,302 42.223 $ 6,550,620 42.287 The tax capacity rate is based on the total certified levy net of the fiscal disparity distribution III. STATISTICAL SECTION CITY OF LINO LAKES, MINNESOTA GENERAL FUND EXPENDITURES BY FUNCTION Last Ten Fiscal Years (Unaudited) "fable 1 Fiscal Total General Public Public Parks and Other Year Expenditures Government Safety Works Recreation Functions 1996 $ 3,966,738 $ 1,289,751 $ 1,446,985 $ 694,455 $ 535,547 $ - 1997 4,400,087 1,366,602 1,751,226 697,934 439,263 145,062 1998 5,328,796 1,560,268 1,778,898 673,156 722,728 593,746 1999 5,237,554 1,771,069 1,958,169 628,070 647,163 233,083 2000 5,513, 148 1 ,770,528 2,1 58,346 786,420 655,863 141 ,991 2001 5,808,265 1,871,615 2,246,146 868,289 663,360 158,855 2002 6,213,645 1,982,096 2,519,152 872,193 696,511 143,693 2003 6,335,322 1,963,561 2,628,766 902,764 725,042 115,189 2004 6,758,483 2,165,245 2,832,647 899,483 737,930 123,178 2005 7,339,720 2,353,519 3,141,032 969,338 733,176 142,655 CITY OF LINO LAKES, MINNESOTA GENERAL FUND REVENUES BY SOURCE Last Ten Fiscal Years (Unaudited) Table 2 Fiscal Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Total General Fund Revcnuc $ 4,627,532 4,736,496 5,722,363 5,343,453 5,613,395 6,193,834 6,841,420 6,893,830 7,201,542 8,045,845 General Property Taxes Levied $ 2,327,048 2,658,485 2,904,888 2,962,664 3,306,057 4,125,264 4,543,106 5,258,505 5,354,282 6,054,104 Licenses and Permits $ 788,480 566,561 726,599 823,719 884,746 1,016,456 913,498 766,524 867,909 812,172 Inter- Governmental Revenues $ 816,794 881,459 1,380,063 940,053 702,606 409,607 893,861 385,439 468,551 591,649 87 Charges for Services $ 308,262 291,090 347,485 278,510 272,145 278,863 196,351 216,302 199,404 197,475 Fines and Forfeits $ 86,158 99,390 102,489 87,434 124,458 101,559 100,393 97,223 106,053 100,980 Other Revenue $ 300,790 239,511 260,839 251,073 323,383 262,085 194,211 169,837 205,343 289,465 Wow law CITY OF LINO LAKES, MINNESOTA PROPERTY 'FAX LEVIES AND COLLECTIONS Last Ten Fiscal Years (Unaudited) "Table 3 Percent of Percent of Total Tax Delinquent "Total Current Percentage Delinquent Total Collections Outstanding Taxes to Fiscal Tax Tax of Levy Tax Tax To Tax Delinquent Tax Year Levy Collections Collected Collections Collections Levy Taxes Levy 1996 $ 3,040,000 $ 3,01 1,917 99.08% $ 15,641 S 3,027,558 99.59% $ 22,489 0.74% 1997 3,349,400 3,316,426 99.02% 23,962 3,340,388 99.73% 32,598 0.97% 1998 3,589,617 3,564,611 99.30% 30,186 3,594,797 100.14% 29,774 0.83% 1999 4,1 16,312 4,085,625 99.25% 23,876 4,109,501 99.83% 23,199 0.56% 2000 4,571,888 4,534,998 99.19% 19,452 4,554,450 99.62% 46,344 1.01% 2001 5,098,609 5,047,912 99.01% 40,513 5,088,425 99.80% 56,056 1.10% 2002 5,902,158 5,847,692 99.08% 50,882 5,898,574 99.94% 61,349 1.04% 2003 6,124,621 6,062,273 98.98% 53,216 6,115,489 99.85% 106,351 1.74% 2004 6,550,620 6,145,419 93.81% 92,444 6,237,863 95.23% 92,006 1.40% 2005 7,269,302 6,881,838 94.67% 57,000 6,938,838 95.45% 101,133 1.39% Note: Does not include tax increment levies and collections. Note: Current tax collections include State levy related credits (HACA and Market Value Credit) 88 CITY OF LINO LAKES, MINNESOTA SPECIAL ASSESSMENT LEVIES AND COLLECTIONS Last Ten Fiscal Years (Unaudited) Table 4 % of Current % of Total Current Current Collections Delinquent Collections Total Fiscal Assmts. Assmts. to Assmts. Assessments Total to Current Outstanding Year Duc Collected Duc Collected Collected Assmts. Due Del. Assmts. 1996 $ 366,146 $ 355,609 97.12% $ 26,831 $ 382,440 104.45% $ 21,040 1997 593,957 589,158 99.19% 20,153 609,311 102.59% 5,692 1998 664,912 657,041 98.82% 3,561 660,602 99.35% 12,019 1999 520,982 512,433 98.36% 8,429 520,862 99.98% 11,947 2000 503,922 434,857 86.29% 9,078 443,935 88.10% 7,919 2001 394,826 356,804 90.37% 5,614 362,418 91.79% 36,789 2002 418,871 387,559 92.52% 32,294 419,853 100.23% 36,584 2003 551,636 504,834 91.52% 38,428 543,262 98.48% 48,998 2004 635,753 584,735 91.98% 29,497 614,232 96.61% 52,819 2005 730,680 679,773 93.03% 37,324 717,097 98.14% 70,572 Note: Special assessments amounts above do not include prepayments Mow CITY OF LINO LAKES, MINNESOTA RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL 13ONDED DEBT TO TOTAL GENERAL EXPENDITURES Last "fen Fiscal Years (Unaudited) Table 5 Percent of Debt Service Interest Total Total Expenditures Fiscal and Debt General Fund to General Year Principal Other Service (1) Expenditures (2) Expenditures .. 1996 S 188,000 $ 100,248 $ 288,248 $ 3,966,738 7.27% 1997 188,000 106,785 294,785 4,400,087 6.70% 1998 190,000 112,201 302,201 5,328,796 5.67% 1999 295,734 387,500 683,234 5,237,554 13.04% 2000 273,570 318,507 592,077 5,513, 148 10.74% 2001 472,050 322,503 794,553 5,808,265 13.68% 2002 496,980 316,978 813,958 6,213,645 13.10% 2003 459,450 287,647 747,097 6,335,322 11.79% 2004 455,000 317,191 772,191 6,758,483 11.43% 2005 465,000 269,047 734,047 7,339,720 10.00% (1) Excludes tax increment, special assessment, enterprise, and payments on refunded bonds. (2) includes expenditures of General Fund only. Note: Amounts rounded to the nearest hundred. CITY OF LINO LAKES, MINNESOTA ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Last Ten Fiscal Years (Unaudited) Taxes Real Personal Payable Property Property Total Fiscal Disparities 1996 $ 7,390,566 $ 435,045 $ 7,825,611 $ 952,790 1997 8,344,972 462,282 8,807,254 1,003,376 1998 9,244,905 434,234 9,679,139 1,036,542 1999 9,649,657 393,365 10,043,022 917,989 2000 1 1,003,125 395,637 11,398,762 1,001,728 2001 12,635,731 393,728 13,029,459 1,157,165 2002 10,382,371 246,594 10,628,965 851,427 2003 12,136,899 251,016 12,387,915 977,876 2004 14,234,493 259,194 14,493,687 1,028,821 2005 16,345,905 274,956 16,620,861 867,678 Source: Anoka County Department of Property Records and Taxation. 91 Sim 'Fable 6 Tax increment Assessor's Estimated Ratio of Total Net Taxable Market Value of Assessed to Value Taxable Property Actual Value S (307,790) S 8,470,611 S 501,825,800 1.69% (410,724) 9,399,906 552,696,200 1.70% — (555,542) 10,160,139 627,423,800 1.62% (646,438) 10,314,573 687,737,400 1.50% (804,752) 11,595,738 775,398,200 1.50% (912,580) 13,274,044 903,685,700 1.47% (566,397) 10,913,995 1,034,432,100 1.06% (676,932) 12,688,859 1,251,221,800 1.01% (246,042) 15,276,466 1,430,803,500 1.07% (274,702) 17,213,837 1,534,933,700 1.12% CITY OF LINO LAKES, MINNESOTA PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Fiscal Years (Unaudited) Table 7 Tax Rates (Per $100 of Tax Capacity) Year 'faxes Payable City School (1) County Other (2) Total 1996 31.015 63.103 31.036 5.647 130.801 1997 31.167 66.000 30.542 5.197 132.906 1998 30.437 59.004 30.618 6.342 126.401 1999 36.039 64.802 32.265 6.830 139.936 2000 35.961 58.230 30.861 7.635 132.687 2001 35.898 69.888 28.859 6.903 141.548 2002 53.084 37.828 37.976 5.913 134.801 2003 47.603 37.467 37.714 7.050 129.834 2004 42.287 36.649 35.221 6.373 120.530 2005 42.223 37.486 33.080 6.696 119.485 (1) The majority of Lino Lakes is served by School District 12. (2) Other includes: Metropolitan Council, Mosquito Control, Metropolitan Transit, Rice Creek Watershed District and Forest Lake Hospital. Source: Anoka County Department of Property Records and Taxation. 93 CITY OF LINO LAKES, MINNESOTA RATIO OF NET BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA Last Ten Fiscal Years (Unaudited) Table 8 Ratio of Less Net Bonded Net Taxable Gross Cash and Dcbt to Net WNW Value of Bonded Investments Net Assessed Bonded Dcbt Year Population (1) Property Debt (2) on Hand Bonded Debt Value Per Capita 1 996 1 3,756 $ 8,470,611 $ 1,378,000 S 194,807 S 1 ,183,193 1 3.97% 86.01 1997 14,560 9,399,906 1,415,000 1 1 1,834 1,303,166 13.86% 89.50 1998 15,053 10,160,139 6,862,734 721,623 6,141,1 11 60.44% 407.97 1999 15,760 10,314,573 6,904,570 666,137 6,238,433 60.48% 395.84 2000 16,791 11,595,738 6,911,450 1,271,904 5,639,546 48.63% 335.87 2001 17,386 1 3,274,044 6,686,430 1 ,171 ,357 5,51 5,073 41.55% 317.21 2002 17,942 10,913,995 6,244,450 1,290,242 4,954,208 45.39% 276.12 2003 18,368 12,688,859 6,030,000 1,221,022 4,808,978 37.90% 261.81 2004 18,725 15,276,466 5,764,000 1,285,338 4,478,662 29.32% 239.18 2005 19,285 17,213,837 5,335,000 1,253,569 4,081,431 23.71% 211.64 (1) Population provided from Metropolitan Council except 2000 is Federal Census and 2005 is City Estimate. (2) Amount excludes tax increment, special assessment, and enterprise bonds. 94 CITY OF LINO LAKES, MINNESOTA COMPUTATION OF DIRECT AND OVERLAPPING DEBT INCLUDING DEBT RATIOS December 31, 2005 (Unaudited) Table 9 Bonded G.O. Percentage Gross Bonded Debt Applicable City Share Overlapping Debt: Outstanding (1) in City(2) of Debt Anoka County $ 108,255,000 6.51% $ 7,044,334 School District 12 84,945,000 49.32 ° / 41,891,593 School District 624 58,410,000 3.71% 2,167,236 School District 831 76,91 5,000 7.85% 6,037,428 SISD 916 13,560,000 2.68% 363,023 Metropolitan Council 225,585,000 0.75% 1,687,585 'Total Overlapping Debt Direct Debt: City of Lino Lakes Total Overlapping & Direct Debt Debt Ratios: 567,670,000 59,191,199 5,335,000 100.00% 5,335,000 $ 573,005,000 $ 64,526,199 Ratio of Debt per capita (19,285 population) - overlapping $ 3,069 Ratio of Debt per capita (19,285 population) - direct S 277 Ratio of Debt per capita (19,285 population) - total S 3,346 Ratio of Debt to estimated market valuation of S1,534,933,700 4.20% (1) Does not include general obligation debt supported by utility revenues, tax or aid anticipation certificates, State -aid road or revenue debt. (2) Determined by ratio of net tax capacity (after fiscal disparities and tax increment adjustment) of property subject to taxation in overlapping unit to valuation of property subject to taxation in City. 95 CITY OF LINO LAKES, MINNESOTA ('OMPUTA'I'ION OF LEGAL DEBT MARGIN December 31, 2005 (Unaudited) Table 10 2005 2004 Market Value $ 1,534,933,700 $ 1,430,803,500 Debt Limit Percentage 2% 2% Debt Limit 30,698,674 28,616,070 Total Bonded Debt 27,165,000 20,049,000 Less: Special Assessment Bonds Revenue Bonds - Enterprise Fund Public Project Revenue Bonds Total Dcbt Applicable to Dcbt Limit Legal Debt Margin (19,405,000) (2,425,000) (490,000) (11,580,000) (2,705,000) (595,000) 4,845,000 5,169,000 $ 25,853,674 $ 23,447,070 CITY OF LINO LAKES, MINNESOTA SCI1EDULE OF REVENUE BOND COVERAGE WATER FUND Last Ten Ycars (Unaudited) Table 11 Net Revenue Available Interest Fiscal Gross Operating for Debt and Year Revenues (I) Expenses (2) Service Principal Fiscal Charges Total Coverage 1996 $ 466,310 $ 210,778 $ 255,532 $ 50,000 $ 170,881 $ 220,881 1.16 1997 851,173 271,575 579,598 50,000 229,900 279,900 2.07 1998 598,005 237,866 360,139 140,000 225,182 365,182 0.99 1999 604,734 380,928 223,806 205,000 220,910 425,910 0.53 2000 1,039,331 495,183 544,148 210,000 237,612 447,612 1.22 2001 1,173,593 508,649 664,944 155,000 185,250 340,250 1.95 2002 1 ,082,053 610,751 471,302 245,000 169,685 414,685 1.14 2003 1,365,681 505,407 860,274 250,000 158,669 408,669 2.11 2004 1,282,183 442,975 839,208 265,000 148,229 413,229 2.03 2005 1,335,370 405,289 930,081 280,000 132,852 412,852 2.25 (1) Total Water Fund operating revenues and transfers in. (2) Total Water Fund expenses exclusive of depreciation, interest on debt and fiscal charges. 97 CI "I'Y OF LINO LAKES, MINNESOTA PRINCIPAL TAXPAYERS (Unaudited) Table 12 Ten of the City's Largest Taxpayers Percent of 2004 Net Tax City's Net Taxpayer Type of Business Capacity Tax Capacity Target Corporation Retail $ 263,094 1.53% Kohl's Department Store Retail 154,544 0.90% Xcel Energy Utility 136,964 0.80% Molin Concrete Products Commercial /Industrial 133,481 0.78% Lino Lakes Business Center Commercial /Industrial 107,174 0.62% Taylor Corp. Commercial /Industrial 104,406 0.61% Gargaro Properties LLC Commercial /Industrial 80,836 0.47% \larmon Keystone Corporation Commercial/Industrial 76,308 0.44% F & G, Inc. Commercial /Industrial 72,040 0.42% Minnegasco Utility 58,700 0.34% Total Ten Largest Taxpayers 5 1,187,547 6.90% Source: Anoka County Department of Property Records and Taxation. CITY OF LINO LAKES, MINNESOTA PROPERTY VALUE, CONSTRUCTION PERMITS AND BANK DEPOSITS Last Ten Years (Unaudited) Table 13 Fiscal Property Number of Permit Bank Year Value (1) Building Permits Valuation Deposits (2) 1996 $ 501,825,800 588 $ 74,061,188 Not Available 1997 552,696,200 597 32,666,843 Not Available 1998 627,423,800 911 48,683,257 Not Available 1999 687,737,400 893 54,522,159 Not Available 2000 775,398,500 1,186 57,080,794 Not Available 2001 903,685,700 1,042 74,974,042 Not Available 2002 1,034,432,100 860 53,977,610 Not Available 2003 1,251,221,800 826 55,864,076 Not Available 2004 1,430,803,500 835 61,579,910 Not Available 2005 1,534,933,700 837 53,686,592 Not Available (1) Assessor's estimated market value of taxable property from Table 6. (2) Bank deposits are excluded due to the banks within the City being consolidated with banks outside the City. As a result, local deposits are unavailable. Source: City Inspection records. 99 IMO CITY OF LINO LAKES, MINNESOTA DNMOGRAPI -TIC STA'T'ISTICS Last Ten Years (Unaudited) Table 14 Fiscal School Number of Unemployment Year Population (2) Enrollment (1) Households (2) Rate (3) 1996 13,756 6,010 4,095 2.6% 1997 14,560 6,230 4,280 2.5% 1998 15,053 6,469 4,443 1.9 °, /0 1999 15,760 6,732 4,692 2.5% _ 2000 16,791 6,778 4,857 2.6% 2001 17,386 6,846 5,084 4.1% 2002 18,000 6,850 5,291 4.3% 2003 18,368 6,932 5,433 5.0% 2004 18,725 6,992 5,570 4.6% 2005 19,285 6,934 5,766 3.8% Nam (1) Centennial School District 12 (2) Metropolitan Council except 2000 is Federal Census and 2005 is City Estimate (3) Minnesota Department of Economic Security CITY OF LINO LAKES, MINNESOTA MISCELLANEOUS STATISTICS (Unaudited) Table 15 Date of Incorporation 5/1 1/1955 Date of Adoption of City Charter 1/12/1982 Form of Government Honie Rule Charter Area of City (square miles) 33 Miles of Streets: Trunk Highways Paved - County Paved - City 17.4 28.5 100.50 Number of Street Lights 559 Fire Protection: Centennial Fire District Total Number of Stations (within Lino Lakes) Total Number of Volunteers Police Protection: Number of Stations Number of sworn officers 3 52 25 Recreation: Park Acreage 140 Number of Parks & Playgrounds 18 Trails 18 miles Municipal Water: Gallons Pumped 475,295,000 Number of Connections 3,825 Miles ofwatermain 50.8 Number of Fire Hydrants 502 Water Tower Capacity (gallons) 2,000,000 Municipal Sewer: Number of Connections Miles of sewermain 4,142 63.52 Employees: Full -time 69 Part-time 5 Elections: Registered voters - last general election 11,035 Number of votes cast 5,288 Percent of registered voters voting 48% 101