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Home My WebLink About2015.08.03 CC PowerPOint Audit Presentationja CITY OF HUGO Financial Summary - 2014 HLIGO t� X/ ~- iL \_ t SMITH �SCHAFER � AYES LTV C4,1"Iod PwWU •oowwntbnry 4n1 Conauncnn YEARS Smithschafer.com -1971 J Audit Opinion Audit • Provides reasonable, but not absolute, assurance that financials are free of material misstatement • Audit procedures include: outside confirmation of certain balances and transactions, sample tests of documentary evidence, inquiries of employees and management, analytical procedures applied to balances and certain other testing procedures • Unmodified opinion — Financial Statements fairly stated in all material respects Minnesota Legal Compliance • Seven areas required to be tested by the State of Minnesota: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions and tax increment financing. The items required to be tested for each area are listed in the Office of the State Auditor's Minnesota Legal Compliance Guide for Political Subdivisions • Testing covered all of the listed areas and consisted of inquiries, sighting of documents and testing on a sample basis • No exceptions noted r: , Sim 01 AYES LTV C4""Ied Pw7c •oowwntbnry 4n1 Consulrin» 4 n ,YEARS smithschafer.corri ,,=1971 2 • Governmental J& Fund Types • General Fund • Special Revenue Funds • Debt Service Funds • Capital Projects Funds • Enterprise • Water • Sewer t SMITH �SCHAFER � AYES LTV C4,1"Ied Pw7c •ocemitt o 4n1 ConauHann 4 n ,YEARS smithschafer.com .1971 3 s� ja Governmental Funds Revenues SNITTH �SCHAFER � AYES LTV C4,1"Ied PwWU •oowwntbnry 4n1 Consulrcn» W-1971 EARS Smithschafer.com Governmental Fund Revenues $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $(1,000,000) 2010 2011 2012 2013 2014 ❑ Property taxes ❑ Intergovernmental ❑ Investment earnings ❑ Special assessments ❑ Charges for services ■ Developer fees ❑ Licenses and permits ❑ Court fines ■ Miscellaneous SNITTH �SCHAFER � AYES LTV C4,1"Ied PwWU •oowwntbnry 4n1 Consulrcn» 4 n ,YEARS m smithschafer.co,,=19 71 5 Governmental Funds Expenditures SNITTH �SCHAFER � AYES LTV C4,1"Ied PwWU •oowwntbnry 4n1 Consulrcn» 4 WEARS smithschafer.com z 19 71 General Governmental Expenditures $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 2010 2011 2012 2013 2014 Includes mayor and council, admin., elections, clerk/treasurer, finance director, assessing, accounting services, planning and zoning, engineering, legal fees, and general government building Represents 24% of governmental expenditures (excluding capital projects and debt service) in 2014 Totaled $986.220 in 2014, an increase of $13,151 from 2013 — an increase of 1.3% SN rm �SCHAFER � AYES LTV C4,1"Ied PwWU •oowwntbnry 4n1 Consulrcn» 4 n ,YEARS smithschafer.com �> 19 7 1 7 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 � J 0) J& v --.�= Public Safety Expenditures 2010 2011 ■Police ■ Protective Inspection smithschafer.com 2012 2013 2014 ❑ Fire Protection ■Animal Control • Includes police, fire protection, protective inspection, and animal control • Public Safety represented about 35% of total governmental expenditures (excluding capital projects and debt service) in 2014 • Totaled $1,420,115 in 2014, an increase of $44,812 (3%) from 2013 • Increase in public safety expenditures in 2014 is due primarily to an increase in police contracted services and the purchase of equipment for the fire department iI Smrm*SCHAFER i _ • A 8 f 6 C 1 A T E 8 L T C C4n"Ied Pw7c AooAwnL►nr► 4n1 Con►ulr►n» 4 WEARS T1971 8 2010 ja Highways and Streets Expenditures 2011 2012 2013 2014 • Includes administration and engineering, streets, and street lighting • Primarily supplies and street materials • Totaled $1,204,207 in 2014 and $1,199,078 in 2013 — an increase of less than 1 % SNITTH �SCHAFER � AYES LTV C4,1"Ied PwWU •ocemitt ro 4n1 Consulrcn» 4 n ,YEARS smithschafer.com �> 19 7 1 9 $200,000 $175,000 $150,000 $125,000 $100,000 $75,000 $50,000 $25,000 $0 ja Community Development � Expenditures 2010 2011 2012 2013 2014 • Includes personal services, other services and charges, and capital outlay • Totaled $20,345 in 2014, an increase of $2,830 (16%) from 2013 • Large decrease in 2012 due to decreased personal services as the City has not replaced the vacancy created when the Community Development Director was named City Administrator SN rm �SCHAFER � AYES LTV C4,1"Ied PwWU •oowwntbnry 4n1 Consulrcn» 4 n ,YEARS smithschafer.com "1971 10 IA Ap Community Development < 1% e -700000,0-J M 1 Governmental Fund Expenditures 2014 Parks Other 9% Unallocated 3% Highways and Streets 29% smithschafer.com Community Development 1% 2013 Other Parks Unallocated 8% 3% Highways and Streets 30% SNITTH �SCHAFER � AYES LTV C4,1"Ied Pw79 •oowMnL►nr► 4n1 Con►ulr►n» 4 n ,YEARS �> 1971 11 General Fund smithschafer.com Reserves SNITTH �SCHAFER � AYES LTV C4,1"Iod PwWU •acomia ro 4n1 Conmulrcn» 4 w,:1971 EARS General Fund - Reserves 2010 2011 2012 2013 2014 oUnassigned Fund Balance ■General Fund Expenditures smithschafer.com • Unassigned General Fund balance as a % of General Fund expenditures • 2014 56% • 2013 54% • 2012 54% • 2011 54% • 2010 55% • State Auditor recommendation is 35 to 50% in unreserved fund balance SNITTH �SCHAFER � AYES LTV C4,1"Ied PwWU •ocewitt ro 4n1 Consulrcn» 4 n ,YEARS �> 1971 13 1 I a A& Purposes & Benefits of Reserves Purpose of Reserves Cash flow timing differences Intergovernmental revenue cutbacks Capital outlay replacement t� ex, �-- iL Benefits of Reserves Favorable bond rating Higher investment earnings Provides resources for minor projects or feasibility reports Avoids temporary overdrafts prior to major receipts Emergency or unanticipated - Allows time to study effects of revenue expenditures cuts Avoids overburdening of annual budgets Special Cit Council projects for certain capital outlay p y p _ Provides the City greater options to deal with unexpected events Unfunded mandates smithschafer.com ZSMITH �SCHAFER � AYES LTV C4,1"Ied Paw7c •ocemitt o and Coeauttams 4 W EARS t1971 14 smithschafer.com j Debt Service SNITTH �SCHAFER � AYES LTV C4,1"Iod Pw7c •oaamitt o 4n1 Con►ulr►nr► 4W.-1971 R 5 Year Debt Service Requirements $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $o 2015 2016 2017 2018 2019 smithschafer.com 'XI �-- iL • All bond payments are being paid on a timely basis • Includes principal and interest • Made up entirely of general obligation debt • Large debt service requirement in 2015 due to refunding of 2004A and 2005A bonds ZA smrrH*SCHAFER 8 A B 8 0 C t A f E 8 L T C Con MN Porte Aooeww"an sold COASUlpnt► 4 �1,YEARS �T1971 16 e -700000,0-J R qw Capital Projects SNIITH•SCHAFER _—_ • A S S O C, AYES LTV P C4,1"Ied w79 •oowMnL►nr► 4n1 Con►ulr►n» 4 WEARS Smithschafer.com 1971 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 J& Capital Projects Funds — Expenditures 2010 2011 2012 2013 2014 ■ Miscellaneous ❑ Property & Equipment Acquisition ❑ Improvements ❑ Sealcoating a Cracksealing ■ Construction / Repair t� . / �-- iL • Major capital projects in 2014 were: • Replace Sterling plow truck • Rosemary Way street improvements • 165th Street reconditioning project • Major capital projects in 2013 were: • Upgraded audio and visual equipment for Council chambers • Carpenters Restaurant property acquisition • Fable Hill Bridge repairs • Sidewalk reconstruction 11ASMMi*SCHAFER • A B• O C t A f E 8 L T C ,.V"N PsMs AOMUff"Wts sold COASUlpnt► 4 YEARS smithschafer.com 0th 19 71 18 ♦ J i Enterprise Funds Operational Trends smithschafer.com SNITTH �SCHAFER � AYES LTV C4,1"Ied PwWU •ocemitt ro 4n1 Conmulrcn» 4 W,:1971 EARS PV CDPI Water and Sewer Fund , $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 0 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 -ILL 2010 2011 2012 2013 2014 0 Revenues smithschafer.com 0 Expenses 0 Net Income (Before Transfers) SNIITH•SCHAFER i _ • A 8 f 0 C� A T E 8 L T C C4rt"led Pssac AoowMnL►nr► •nd Con►ulr►n» 4 n ,YEARS raT1971 20 ja Water and Sewer Fund (Cont'd) • Water and sewer service supported by ratepayers • Increased usage for population and commercial industrial growth have created increases in operating revenues, operating expenses and other income • Higher than normal revenues in 2012 due to a one-time refund to the City for previous expenditures, as well as higher future infrastructure charges • Other income includes future infrastructure charges, developer fees, special assessments, investment earnings and other miscellaneous income and expenses • Fund balance growing each year due to net income (positive income each year even after subtracting depreciation) Z/ SMITH �SCHAFER AYES LTV C4,Y"Ied Pwlt •oowwntbnrs 4n1 C*.MUtrin» 4 n ,YEARS smithschafer.com "19 7 1 21 ja Summary [U Unmodified audit opinion and no Minnesota Legal Compliance exceptions CAFR has been posted on the City's website by the Finance Department CAFR is available for public inspection by contacting the City's Finance Department A summary of the financial information has been published in the City's official newspaper SN rrH �SCHAFER � AYES LTV C4,1"Ied Pw7c •oowwntbnry 4n1 Consulrin» 4 n ,YEARS smithschafer.com `> 19 7 1 22