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1986 - Comp. Annual Financial Report 5755 COUNTRY CLUB ROAD . SHOREWOOD, MINNESOTA 55331 · (612) 474-3236 I~ I I I I I I I I I I I I I I I I I I .... o 1~ 0 (p '. If) " CITY OF SHOREWOOD MAYOR Robert Rascop COUNCI L Jan Haugen Kristi Stover Robert Gagne Barb Brancel ADMINISTRATOR Daniel J. Vogt MEMO TO: MAYOR RASCOP COUNCILMEMBERS HAUGEN, STOVER, GAGNE ANV BRANCEL FINANCIAL AVVISORY BOARV MEMBERS BRIVGE, LAWRENCE SNYVER ANV BONHOFF ' FROM: EVELYN BECK, FINANCE VIRECTOR RE: ANNUAL AUVIT - 1986 VATE: APRIL 15, 1987 P teM e 6..tnd encto.6 ed 6 oft tjOWL ftev..tew the 1986 audU ftepoltt, aud'['( management tettett and tettett 06 ..tntettna..t <:.ontlto.t. .. Thttoughout the tjeM the F ..tnanc.e Vepa./ttment pftov..tde.6 .6wnma.tt..tz e.d 6 -tnanc.ia..e data 6 oft the Catj C ounc.il, the. pubUc., and va.tt..tou.6 c.ommLM-tOYl..6 and age.nue.6. At tjeM end an audU -i.6 pett60ltmed on~ the. da;ta and .6tj.6te.m.6 u.6 e.d to gathett that data. The. a.udU thettq,6 'lfte., -i.6 an -impoltta.nt meaYl..6 06 a.-icU.ng ..tn the. c.ontltot 06 the. 6..tnanc.ia1- a66a.-iM 06 the. Uttj. It -i.6 an -Vt de.pth toofl at how M.6et.6 06 the. wtj a./te. bung handle.d. Th-t.6 tje.a./t the. a.udU manageme.nt lettett po..tntJ.> out .6e.vetta..e. a./te.M 06 c.onc.ettn fte..ta.t..[ve. to the. ha.ndUng 06 the. wtj'.6 M.6 et.6. Mo.6t- 06 the.6e. a./te.M wette. addtte.6.6e.d dU!l..-l-ng the. tjeM howe.vett the. a.uc:U;tOft po-<..ntJ.> out that they c.ontinue.d to be. pftoblem a./te.M a.t the. ctO.6e. 06 19 8 6 . A 601tma..t pft e.6 e.nta.UO n 06 the. a.udU -i.6 .6 c.he.duie.d 6 Oft M 0 nda.tj , Apttil 21. 16 tj ou have. QUe.6tio Yl..6 oft c.o nc.ettYl..6 tha;(: tj o~ pfte.6ett to have. addtte.6.6e.d PUOft to that me.eting, ple.Me. c.a..U.. CC: Van Vogt A Residential Community on Lake Minnetonka's South Shore z u ri = .... ; = I ~ "\. .. t- oo en .... .... .... ..... .... J.l $:1. < 'tS Q.... .... QS.... 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CI) co 'tlQCI)alCO CO'tl Cl)CI)M'tSQS'tlCl)Qct-4 ~+J'''' Q.o Q J.l aI 0 Gl >< =' aI QS $:1. .... CI) O'+J QS >< > Gl co 1I8(1)..Q Cl)CI)M ..c::Q coo M-'=l CI) CO.... J.l+J.... +J co....aOQ+J 1-4 co Gl ~ .... ct-4 CI) aI OQS..c::.o+J aQ +J +J aI ~ CI) .... . " +J M +J a Q.... a M'CO .. QS QS QS OOGlCl)CI)CI)CO+J>< ....M+J'tS MCOCOCl) +J+JcoQO=,CI) QSQ~~+J+JO"" Q 0 co aI CI) aI CI) ....0 COQQ......c:: a .... 0 +J aI....Gl. Cl)CI)Q >< QS -'=l en Q -'=l M aI Cl)Q+J'tS0+JQSQ1I8 J.l M.... .... Q -'=l CI) QS +J 118 +J ct-4 .... O+JCI)'tlalQaI II =' Q +J Q ='.... -'=l M CO.... aI aI.... Q +J 'tl 0 =' +J aI.... Gl ct-4 -'=l ....CO>aCO+JM +Jct-4a1 Cl)MGlalCl) ....0>118 Cl)J.l'tS~ ~ Cl)Q-'=l+J='.... .... 0 CI) 'tl .... Qa +J=''tSCI)O'tS o CI) 0 .... co 0 co Q .... +J +J 'tS Q 0 Q QS +JCO ='t+-I....MO O~ alO $:1.0 co .~: i~ 1 ~ .~~.~l 0.. co~ CI)+J+JCCI) o ~ Gl CI) J.l .... Q +J +Joo CI)'tl alai Q.... 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Q COCl)O ....Gl 118 .... -'=l CI) e tIlI+J+J.oa ~ =' 0.... 0 :ECOQS~1-40 - - 0:1 Z o I-l E-t < o z ~ J:: :E o U ~ 0: ~I 0:1 E-t Z ~ I! o U ~ <( c:: ~ z ~ o ~ U Z <( ...:l <( l:Q ~I ...:l <( c:: ~ z ~ o ..'tS . crl CI) Q'~,1I8 o' Gi Gl Gl 'tl Q o' C ..c:: .... 0 Q +J ~ ~ ~ Q QS 0 aI +J .... .... =' QS =' =' 0 Gl co ct-4 co . +J +J ~ ..a .... alOO =' =,. J.l C") Q .... CI) en ct-4 co tt.t 'tS ~ =' 00 -'=l .... aI -'=l ~.... CI) Q QSOIt)Oalct-4COO GlMQ=' M ct-4 ..... +J +J aI Q ct-4 -'=l ='.... ct-4 CI) ..c::CMO....O+J+J CQ 3....0 ....IIl+J Cl)CI)'tl aI-'=l ~~Q'tSGlQ OCl)Q aco~.o~I-lQ~Gl ~aI. CI) QS CI)=,a CI) +J 0 0 CI) > co =' ~+J Gl -'=l Gl 0 0 +J.... 0 co Q ><.... 0 +J..QOO .oOGlal .Q)"dQS o ..~QS M~1Il Q.... Ct-t.... .. 0 ~.... 118 III Gl ~ o alt-O QS.... 0 0 Q Q) II ~Q) ='COit) OJ O+J ~.... ~ QS >< ~ ~ 0'. .. III ~ ~ 1111 Q) +JCI). CI)+J'tS 00 +J .... ~OQQ+JO~I>.~Q M'tl Q.... CI) 0 QS Q 0 ~.... Q) Q) 118.... CI) Gl Q 0 . QS.. Q > a CI)='CI)+J QCOOO~OO~ +oJ 0 ~ QS co =' Gl........ =' .... C ..c:: +J a .... III ct-4 .. 0 Gl III =' ....COCl).... MQ.... ~1IQ)cr .o><+JCI)CI)Q+J QS='Q) ....CI) 01-4>~1I8='QQ)Q aI 0 M J.l 0 ><.... 0 0 ~ Gl.... ....QO~ OGlIll.o O>QS Oal $:1. QS=,QQ)+J Q .... QS 0.... Gl 0 .... ~ .... alai" .+JaI'tSa~ ~ Ql:Qcoco+J ='alO O+JQS .... CI).... Gl.... co a ~ "d +J QS 0 ct-4 'tl M 1:11 CI) =' ct-4 c:: ..c Q='CI)M>QIIl Q)II+JQS CI)='+JoQSGl='alGla"d ..c::~''''Q+J~ -'=lOSGl"dO +J 'tlQS QOQ)C::+J CI) Q~ Q 1I'tS ~QS 0 c:: Gl Q..c:: CI) aI 0.... Q+J.... a"d .... ~ ~.o -'=l QS.... aI I-l a Q) QS >< +J+J UlXl GlO~ +J +J CI) 'tl -'=l 0 0 .~ QaI Q1:II+JGl "d C::Q)Q) ......c::Ct-t ='.... QS till CI) Q . QS ~ct-4 aI +J 0 ct-4 ~ J.l -'=l =' ~.... III a CI) QS E-t rz. QS QS I-l Q 'tl1ll+JCI)O.... "d.o QS OQ-'=lQMC ....0 ~ +JCI)+oJCI)alQS QS+J .+J aQM .... ...~ 'tS"d MaOM='alCOOJQ)OQGlQ) GlOII=,o.oGlaQo='IIl.o 'tl0 O~ ='GlQ)Ott.tQS M Gl Q.... 0.. Q) III O~CI)M+J'tSCI).o 0 ~~ >='alQ>OGlOGlOQS Q .... 0 -'=l =' Gl M..c it) -'=l Q Q) 1-4 1-4 Ct-t :>0 +J ct-4 ~ ~ +J .. +J.... P- - - - - - - . i 1018 ~zl ;:~ca ::t . 'f ! ~ N X i 'If o III ,. I::IN e- e" - z ::) 2 ~~ o~i! I....z";' =:DzlG - III lD ::):> . I fI)~;:l>~~ 0" ... - - II I I I I I I I I I I I I I I I I I I ) c. April 11, 1987 City of Shorewood Page 2 Following is a comparison of actual, estimate and variance for the General Fund revenue and expenditures: REVENUES: Taxes Licenses and Permits Intergovernmental Rev. Charges for Services Fines and Forfeits Miscellaneaous Revenues Total Revenues EXPENDITURES: Current: General Government Public Safety Highways and Streets Culture and Recreation Total Expenditures BUDGET ACTUAL VARIANCE $957,016 109,055 350,474 17,900 45,000 1,500 $1,040,984 117,050 356,308 37,067 70,678 5,220 $83,968 7,995 5,834- 19,167 25 , 67 8e 3,720 $1,480,945 $146,362 $1,627,307 --------- --------- ------- ------- --------- --------- $474,101 431,012 540,523 60,309 $419,658 410,016 522,066 49,015 $54,443 20,996 18,457 11,294 $1,505,945 $1,400,755 $105,190 --------- --------- --------- --------- ------- ------- REVENUES - The variance between actual and budget are in areas where the City has little control over the revenues. Thes~ revenues cannot be reliably estimated. As an example, current property taxes received were $37,000 under budget but total taxes were $84,000 over budget. The difference of $120,000 is fro~ delinquent taxes and penalties. The licenses, permits and charges for services are up because of the building boom the city is experiencing. After recognizing the budget variances and understanding why they occurred, the City did~a good job in budgeting revenues. EXPENDITURES - After backing $34,238 from the budget, the only 5.0% of expenditures. is good budgetina. out the council contingency fund of actual varjance is only $71,000 or On expenditures of $1,400,000 that The above numbers raise some questions that I believe should be \ addressed in 1987: I ~~ ) . t."t~d. . Why water revenues went up significantly while sewer revenues l't'. ..' \ f' \ are down? !J?~/'\~~! 2. Why are operating expenses for the sewer and water so high in \;0 "\' \"j comparison to revenues? ~ ~-. v.'U3-. Can the City continue to subsidize the sewer an<ie I~@ ~\ 0'7 operations through taxes and nonoperating income. ~ u\Q operating income should be committed to major repairs ~ 0 capital replacement~. I ~7I recommend a thorough analysis of your sewer and water funds ror possible errors in your billing and receipt system for ways to ~\~~ increase revenues and cut expenses. Then establish a policy as 1\ ~~. to rates charged, amount and kind of subsidy. DEVELOPMENT COSTS Ii I I I I I I I I I I I I I . , I April 11, 1987 City of Shorewood Page 3 UTILITY FUNDS Following the year: is a summary of the sewer and water fund activity for WATER SEWER 1986 1985 1986 1985 SALES 49,413 33,790 284,261 292,109 Operating Expenses 87,398 81,454 300,609 307,108 Operating Loss (37,985) (47,664) It> '10 15,348) 14,999) Operating Margin ( 76.8%) ( 1. 40%) 5.4%) 5.1%) ------- ------.. -------- -------- Working Capital 924) 962) (367,916) (271,606) ------- ------- -------- -------- water Non- and In March of 1987 the City sent letters to developers requesting payment for expenses incurred by the City in connection with their project. These expenses totaled .30,000 and are from 1985 and 1986. A system is in the process of being set-up now to capture these fees monthly and submit invoices to the developer monthly. I recommend that you follow throuah with this syst~m, monitor the system on a monthly basis; and then establish a policy that if a developer refuses or is always late in reimbursina the City for their expenses, then the project be called to a halt. J . . .. - o:t' Q) 1:lQ '" p.. "C o o 3 Q) ~ o ~ en ~I a t- eo en .... .... .... ~ -.-1 ~ P. < '0 >. Q) co C C+JS"'O ",..-1 O~ UCO "C Q) :s Q) co~ CO+J -.-1 en E-4 H 1':: l:t: ~ p.. o Z H ~ ~ H ::> ~ co C>'Q) o +J 1:lQ -.-1 ~ co u '" Q) ~ 1:lQ (,) Q) ..~ Q) ~~"'~ Q)Q)~E-<U 3>(,) < Q) 00 co 3 U . +JO<~ ~ ..-1 :c en Q) Q) Q) S +J~'O ~ "C"'+J~ Q) C ~ -.-1 p..", C:S co "Co,o 1:lQ +J co C..-1 C (,) Q) '" co Q) ..-1 Q) Q) co ~ "C '1"') f+.4 t- ..-1 +J ~o eos ..-1 ~ +J en S S :s p. -.-1.... 0 0 ,0 S U~ Q)~f+.4 f+.4 ~COQ)OQ) '" Q) Q. +J "C ~~ ~COQ) Q)+J1:lQ(,)"'+J > C~~(,) Q) C-.-1 '" Q) COO"C1'::C~ ~ "'~ "C -.-1 ~ +J 0 .. 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M Q) > o ~ o M +J C o (,) ~ '" C ~ Q) +J C ..-1 f+.4 o S Q) +J en >. al '0 o o 1:lQ '" f+.4 o al ~ '" ..-1 +J C Q) Q) ~ co as al Q) al +J Q) Q. ~ ..-1 +JQ) (,) f+.4Q) o ~ Q).Q S co o as 00(,) rn "C Q) ..-1 C~ as+J +J ..-1 '0 ;>. Q),o en > '" 0 S Q) Q) S .. ~ -.-1 ~ +J ..-1 '" Ei Q) ~ M Q) "'+J ~ '" '" ~ ..-1 rn +J..!Il: '" C 0 Q)Q)+J "C~'" ..-1 (,) f+.4 '0 C Q) o .. '0 o ~ 0 Q) 0 '0 -.-1 C ~ Q) "'al,o '" ~(,)C '" '" C M (,) o :s al 0 ~;>.co Q) +J Q.;>.p. ,0 -.-1 +J Q) Q. (,) Q) "C Q) . OQ)M~ >< C '" Q) Q) 0 Q. Q)..-1 0~f+.4 Eo<f+.4 o ~ ..-1 rn ",..-1 S Q) . ~ '0,0 ~ "C Q)..-1 ~Q)+Jal <>P.C ..-1 -.-1 0 Q)Q)p. o 0 en .Q)Q)Q) .....MM~ . 'C"C ~Q) :S+J o P. ~'rol al Q) o Q) al ~ .... '" co :S-.-1 '0 -.-1 ;>. > Q) ..-1 C '00 C Ei -.-1 Q) Ei~ O+J ~ f+.4Q) ~ co Q) JIl~ o 3 Q) -'=~ o Q) ..-1 M~ o al '" ~(,) al '" Q) 0-'= +J 1:lQ C 0 ..-1 +J > '.-1~ Gl '" (,) :s Q)'O ~'.-1 > ..-1 CO '0 Q) C Q)-.-1 ;>. o Q) ~.Q p.+J S ~+J M o o . co NGl '0'0 Q) Q) ~~ as..-1 Q.o Ei C o 0 o 0 Q) '0 M C '" Q) ;>.~ as "d '0. Q)~ -'=:S +JO ~ ft.I al o '0 co C Q) Q) 0 C Q) Q) -'= ~ +J Q) f+.4 +Jft.I "'-.-1 "C "d Q)~ ~~ as< +J o +J C+J Q)-.-1 -'= co +J 0 P. Q) Q) M"d as COJll +J C . Q.as;>. ..-1,0 ~ Q) Q) o +J Q) Q) '" l:t: -'= .rol +J'O Q) . 0 ~ ('I') +J ..-1 Q) '0 "d Gl ,0 Q)..-1,o 3 as Q) co .Q'.-1 ~ co> ~ '" Q) f+.4 ..-1 o ~ 0 3 C al 1:lQ"C 0 C C C..-1 0 ..-1 '" +J -rol ~ '" +J "d"C~'" CGlO.... '" +J..-1 0 ~ C >.... Q) > E1+J ~:s"'''C OO~C f+.40+J'" '0 co "C ~ Q) Q) Q) <<I M,o+J+J :s O+J "CCOC'" Q) Q) EI (,) M Q) o:s,oal M "C :s Q. Q) "C 0 (,) .... ..-1 "C0:s~ C~OGl '" Q..Q al al as Q) COal+J Q) Q).... al ~ ~ .rol :S+J M al . Q) +JCO~ +J"'Q):S "'~Q)"C ~+J >.Gl . +J O(,)..d ~o(,) Q.~:S "C .. S Q. al C'OGl Q) Q) "C co s~~cas S co ~ '" 0.1"'4 '" 'tS (,) ~ Q) Q) ,0 rn +J M '" ~ Q) '" +J+J~Q) rn.rol:S ~ HQ)3~+J ~ ~~ ~~ ~ ~'\~ - ...€..... - - ------- r;0. .~ j \:_~-"'-\ -;. '" .J ~ ~ }...~ ~ <::.; .~~?'1 ;: .~~ .~ .~ (j. ......... \i) ... Q \---< j ~ ~-b II " --e' 0> .~ .~ V) <l :;;-. .~ ,;; ~ --::,... <:) <L-'O ~ '0 )L <:>t -- s .1- s- -, ~ ~ ~ 0~ .s;;. ~ N r;;: ----- , .. I.d., ' ''''t~ I I I I I I I I I I I I I I I I I I April 11. 1987 City of Shorewood Page 5 CONTRACT FOR DEED Shorewood is currently paying 12% interest on a contract for deed. Since the City has the ability to borrow money at a signif- icantly lower rate. I recommend refinancing this contract. However. as an alternative. why not borrow the money from the sewer fund and pay the sewer fund an appropriate interest rate. This way the interest income and interest expense is retained within the City. Summary In summary. the City is in relatively good financial condition. Your General Fund for the first time is able to stand on its own and not borrow from other funds ~n an interim basis. As a result. the City is in a position to start some long term plan- ning. Yours Assessments Funds are generating sufficient revenues to meet your debt requirement. The Enterprise funds taken as a whole are solvent. There are concerns that need to be addressed. However. these concerns can be addressed by your current staff without additional capital investments. Sincerely. ,. I., I I I I I I I I I I I I I I I I I I JAMES &fAlSER, CPA April 7, 1987 Honorable Mayor and Honorable City Council City of Shorewood Shorewood Minnesota Dear Sirs: I have examined the financial statements of the City of Shorewood, for the year ended December 31, 1986, and have issued my report thereon dated April 7, 1987. As part of my examination, I made a study and evaluation of the City's system of internal accounting control to the extent I considered necessary to evaluate the system as required t>y generally accepted government atdi ting si.anda.rds. The purpose of my study and evaluation was to determine the nature, timing, and extent of the auditing procedures necessary for expressing an opinon on the City's financial statements. My study and evaluation was more limited than would be necessary to express an opinion on the system of internal accounting control taken as a Whole. Internal accounting controls surrounding the following significantl classes of transaction activities were found in the City of Shorewood. Property Tax Levy - levy sufficient to cover current operating expense and debt service. Cash Receipts Cash Disbursements Payroll State Aids The administration of the City of Shorewood is responsible for establishing and maintaining a system of internal accounting control. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and rel"ated costs of control procedures. The objecti ves of a system are to provide the Council wi th reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with Council authorization and recorded proper ly to permit the preparation of financial statements in accordance with generally accepted accounting principles. SUITE 360 8000 WEST 78TH ST. EDINA. MN 5S435 812-829-1155 13880 HIGHWAY 5 YOUNG AMERICA. MN 55397 812-442-4li)S8 " . It, I I I I I I I I I I I I I I I I I I "t City of Shorewood -2- April 7, 1987 Because of inherent limitations in any system of internal accounting control, errors or irregularities may nevertheless occur and not be detected. My study and evaluation made for the limited purpose described in the first paragraph would not necessarily disclose all material weaknesses in the system. Accordingly, I do not express an opinion on the system of internal accounting control of the City of Shorewood taken as a whole. However, my study and evaluation did disclose a material weakness in the handling of cash receipts. The controls over the handling of cash receipts needs to be improved. Respectfully, ~.._~ JAMES MAISER I I CITY OF SHOREWOOD MAYOR Robert Rascop COUNCI L Jan Haugen Tad Shaw Kristi Stover Robert Gagne ADMINISTRATOR Daniel J. Vogt I I 5755 COUNTRY CLUB ROAD . SHOREWOOD. MINNESOTA 55331 · (612) 474-3236 I MEMO TO: Mayor and Councilmembers FROM: Dan Vogt ~ DATE: December 3, 1986 I I SUBJECT: Audit Firm I As you know, the City of Shorewood has been using the firm of Mathias, Roebke & Maiser to perform the audit. I have now been informed by Jim Maiser that he plans to leave the firm. As part of his agreement to leave the firm, he will retain the municipal clients including Shorewood. I I have received and attached a letter from Mr. Maiser which, if approved, would appoint James Maiser to perform the audit of the City for the year ended December 31, 1986. I I Staff highly recommends retaining the services of Jim Maiser for auditing pur- poses. Since the auditor was appointed in January, the City Council would need to take action to make the change. Monthly financial statements would continue to be done by the Mathias and Roebke firm. This item appears on your December 8 Consent Agenda for your deliberation. I Please contact me prior to Monday night if you have any questions. 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((\ I...+J 0 ~ lD :::( '+- ;J lD Q) I... I... .,-1 C ((\ +J -rl 0. Q) lD Q.L'O C n. E C lD lD O.c.c ::J 0 I... l\l '+- +3 'M I... lD rl.c o.Q)C 'M n. ((\ :::l ECOO+3+3 Cl,+-..Q E H VI 3 0.1... n.+J 1Il 0'((\ en <r: Z . - - - - - - - - - - - - - - - - - - - a',"''''''..:.....~. I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD MAYOR Robert Rascop COUNCI L Jan Haugen Kristi Stover Robert Gagne Barb Brancel ADMINISTRATOR Daniel J. Vogt 5755 COUNTRY CLUB ROAD . SHOREWOOD, MINNESOTA 55331 · (612) 474-3236 MEMO TO: MAYOR RASCOP COUNCILMEMBERS HAUGEN, STOVER, GAGNE ANV BRANCEL FINANCIAL AVVISORY BOARV MEMBERS BRIVGE, LAWRENCE SNYVER ANV BONHOFF ' FROM: EVELYN BECK, FINANCE VIRECTOR RE: ANNUAL AUVIT - 1986 VATE: APRIL 15, 1987 P te.a..6 e. 6-i.nd e.nci..o.6 e.d. 601t tjOUlL Ite.v-i.ew the. 1986 aucLU. Ite.poltt, aucLU. manageme.nt te..t.trOl. and te..t.te.Jt 06 inte.Jtna.t c.ontltot. Thltoughout the. tje.a.Jt the. Financ.e. Ve.pa.Jt.tme.nt pltov-i.de..6 .6u.mma.Uze.d 6-i.nanUat data. 601t the. Cittj Council, the. public., and va.UOu..6 c.omm-i..6.6ion.o and age.nc.ie..6. At tje.a.Jt e.nd an aucLU. -i..6 pe.Jt601tme.d on the. data. and .6tj.6te.m6 u..6'e.d to gathe.Jt that data. The. aucLU. the.Jte.601te., -i..6 an -i.mpoJt.ta.nt me.an.o 06 aicUng -in the. c.on.tJr.ot 06 the. 6-i.na.nUat a66a.iJt.6 06 the. c.i.ty. It -i..6 an -Vt de.pth took. a..t how a6.6W 06 the. c.i.ty a.Jte. bung handle.d. T h-i..6 tj e.a.Jt the. aucLU. manag eme.nt te..t.te.Jt po-i.n.t.6 out .6 e.ve.Jtat a.Jte.a..6 06 c.onc.e.Jtn Ite.ta..tive. to the. handling 06 the. c.i.ty'.6 a..6.6W. MO.6t 06 the..6 e. a.Jte.a..6 we.Jte. a.ddJte..6.6 e.d dt..vz..-t.ng the. tje.a.Jt howe.ve.Jt the. aucLU.OIt pO-tn.t.6 out that they c.ontinue.d to be. pltobte.m alle.a..6 at the. ci..O.6e. 06 1986. A 601tma.t plte..6 e.nta.Uon 06 the. aucLU. -i..6 .6c.he.du.te.d 601t Monday, ApltU 27. 16 tjou have. qUe..6Uon.o olt c.onc.e.Jtn.o that tjou plte.6 e.Jt to have. a.ddJte..6.6 e.d pJU.OIt to that me.e..t-i.ng, pte.a..6 e. c.a.tt. CC: Van Vogt A Residential Community on Lake Minnetonka's South Shore I 1 I I I I I I I I I I I I I I I I I JAMES &fAlSER, CPA April 7, 1987 Honorable Mayor and Honorable City Council City of Shorewood Shorewood Minnesota Dear Sirs: I have examined the financial statements of the City of Shorewood for the year ended December 31, 1986, and have issued my report thereon dated April 7, 1987. As part of my examination, I made a study and evaluation of the City's system of internal accounting control to the extent I considered necessary to evaluate the system as required by generally accepted government auditing standards. The purpose of my study and evaluation was to determine the nature, timing, and extent of the auditing procedures necessary for expressing an opinon on the City's financial statements. My study and evaluation was more limited than would be necessary to express an opinion on the system of internal accounting control taken as a whole. Internal accounting controls surrounding the following significant classes of transaction activities were found in the City of Shorewood. Property Tax Levy - levy sufficient to cover current operating expense and debt service. Cash Receipts Cash Disbursements Payroll State Aids The administration of the City of Shorewood is responsible for establishing and maintaining a system of internal accounting control. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objecti ves of a system are to provide the Council with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with Council authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. SUITE 360 8000 WEST 78TH ST. EDINA, MN 55435 61 2.829.1 1 55 13680 HIGHWAY 5 YOUNG AMERICA, MN 55397 61 2-442-4958 I I I I I I I I I I I I I I I I I I I ... City of Shorewood -2- April 7, 1987 Because of inherent limitations in any system of internal accounting control, errors or irregularities may nevertheless occur and not be detected. My study and evaluation made for the limited purpose described in the first paragraph would not necessarily disclose all material weaknesses in the system. Accordingly, I do not express an op1n1on on the system of internal accounting control of the City of Shorewood taken as a whole. However, my study and evaluation did disclose a material weakness in the handling of cash receipts. The controls over the handling of cash receipts needs to be improved. Respectfully, p..,~~ JAMES MAISER I I I I I I I I I I I I I I I I I I I CITY OF SOORE.'WOOD Shorewood, Minnesota AUDI'roR'S REPORT December 31, 1986 I I I I I I I I I I I I I I I I I I I CITY OF SHOREW<X>D Shorewood, Minnesota OFFICIALS Robert Rascop Jan Haugen Tad Shaw Kristi Stover Robert Gagne Mayor Councilperson Councilperson Councilperson Councilperson 12-31-1986 12-31-1986 12-31-1986 12-31-1988 12-31-1988 I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD Shorewood, Minnesota INDEX December 31, 1986 Page Accountant's Opinion 1 Combined Balance Sheet - All Fund Types and Account Groups 2 Combined Statement of Revenue, Expenditures and Changes in Fund Balances - All Governmental Fund Types 3 - 4 Combined Statement of Revenue, Expenditures and Changes in Fund Balances - General and Special Revenue Fund 5 Proprietary Fund Types Combined Statement of Revenue, Expenses and Changes in Retained Earnings 6 7 8 - 16 17 18 19 20 - 21 22 23 24 25 26 Combined Statement of Changes in Financial Position Notes to Financial Statements Supplementary Information General Fund Balance Sheet Statement of Revenue - Estimated and Actual Statement of Expenditures - Estimated and Actual Statement of Change in Fund Balance Special Revenue Funds Combining Balance Sheet Combining Statement of Revenue and Expenditures Capital Project Fund Combining Balance Sheet Combing Statement of Revenue, Expenditures and Changes in Fund Balances I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD Shorewood, Minnesota INDEX December 31, 1986 Page Special Assessment Funds Combining Balance Sheet 27 Combining Statement of Revenue, Expenditures and Changes in Fund Balances 28 Water Utility Fund Comparative Balance Sheet 29 Comparative Statement of Revenue, Expenses and Changes in Retained Earnings (~ ',-,~' Comparative Statement of Changes in Financial Position 31 Sanitary Sewer Utility Fund Comparative Balance Sheet 32 I Comparative Statement of Revenue, Expenses and Changes in Retained Earnings (9 34 Comparative Statement of Changes in Financial Position Liquor Fund Comparative Balance Sheet 35 Comparative Statement of Revenue, Expenses and Changes in Retained Earnings 36 Comparative Statement of Changes in Financial Position 37 I 1 I I I I I I I I I I I I I I I I I JAMES MAISER, CPA April 7, 1987 The Honorable Mayor and the Honorable City Council City of Shorewood Shorewood, Minnesota I have examined the financial statements of the City of Shorewood, Minnesota, as of and for the year ended December 31, 1986, as listed in the table of contents. My examination was made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as I considered necessary in the circumstances. As more fully described in the Notes to Financial Statements, a complete historical record of costs for the City's investment in property, plant and equipnent does not exist, except for the Liquor Fund, because acquisitions prior to January 1978 have not been recorded. This is a departure from generally accepted accounting principles. Since January 1, 1978, the City has recorded property, plant and equipment acquisitions in the Sani tary Sewer and Water Operating Funds and the General Fixed Assets Account Group as well as the Liquor Fund, and has made provision for depreciation, which conforms to generally accepted accounting principles applicable to governmental units. In my opinion, except for the aforementioned paragraph, the financial statements present fairly the financial position of the various funds and account groups of the City of Shorewood at December 31, 1986, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with the prior year. My examination was made for the purpose of forming an oplnlon on the combined financial statements taken as a whole. The combining, individual fund, and account group financial statements and schedules listed in the table of contents are presented for purposes of additional analysis and are not a required part of the combined financial statements of the City of Shorewood, Minnesota. The infonnation has been subjected to the auditing procedures applied in the examination of the combined financial statements and, in my opinion, is fairly stated in all material respects in relation to the combined statements taken as a whole. 5UITE 360 8000 WEST 78TH 5T. EDINA, MN 55435 612-829-1155 13680 HIGHWAY 5 YOUNG AMERICA, MN 55397 61 2-442-4958 - - - - - ASSETS N Cash and Investments Accrued Interest Accounts Receivable Taxes Receivable - Current Due fro. Other Funds Special Assessment Current Prepai ds Unamortized Bond Discount Inventory Fixed Assets - Net of Depreciation General Fi xed Asset s Amount to be provided LT Debt Tot al Asset s LI ABI LI TI ES AND FUND EQm TY Accounts Payable Due Ot ber Funds Cont ract s Payabl e Bonds Payabl e, Speci al Assessments Bonds Payable, General Obligation Other Long Tera Debt Investment in General Fi xed Assets Contri buted Capi tal Retained Earnings Fund Balance Total Liabilities and and Fund Equity - - - - SPECIAL REVENUE 18,018 97 18,115 8,115 18,115 - - CITY OF SHOREWOOD COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT DECEMBER 31, 1986 SPECI AL ASSESS- MENTS 12,886,621 37,506 28,087 2,680 51,534 113,275 4,385,000 (1,544,915) Tbe accompanyi ng notes are an integral part of tbese fi nanci al statements. GOVERNMENTAL FUND TYPES GENERAL 5507,748 42,729 5550,477 DEBT CAPITAL SERVICE PROJECTS 10 558,411 692 - GROUPS PROPRIE- TORY ENTER- PRISE 5314,209 2,026 119,561 230 29,723 130,129 1,026,173 50 559,103 52,954,894 51,622,051 - ACCOUNT GENERAL FI XED ASSETS 966,816 -------- -------- -------- ------- ---------- ---------- ---------- -------- -------- -------- ------- ---------- ---------- ---------- 5966,816 549,562 500,915 5550,477 50 10 1812 563,531 115,000 6,137 1,285,350 152,033 10 559,103 52,954,894 51,622,051 966,816 -------- -------- -------- ------- ---------- ---------- ---------- -------- -------- -------- ------- ---------- ---------- ---------- 1966,816 2,720 o 55,571 - - - - - - ~ ?::o~:;;;:v ,'-\.">,", ~/~OU I 'vr", /" ~\()') ~~ ,,/, I TOTALS GROUPS (MEMORANDUM ONLY) GENERAL LONG TERM DEBT 50 98,160 DECEMBER 31 DECEMBER 31 1986 1985 50 53,775,007 40,321 162,290 230 20,000 28,087 29,723 2,680 130,129 1,026,173 966,816 98,160 51,955,407 18,540 116,387 37,167 20,000 17,316 39,085 5,360 123,968 1,071,063 789,450 598,160 56,259,616 54,193,743 -------- ---------- ---------- -------- ---------- ---------- 10 98,160 50 5115,439 o 211,435 4,385,000 115,000 8,857 5116,597 20,000 3,990,000 115,000 103,484 789,450 1,285,350 152,803 (2,378,941) 598,160 56,259,616 14,193,743 966,816 1,285,350 152,033 (980,314) r . .3 .: 16 17 .11, .n 29 31 .:: 34 .37 38 n~'Q/~~~7" ~~--- L - I>/.? _~L_______________________ , 1 n 11 -- I e~'L~J _HB1._.~ ---'. . f-- J)/J iJ I -- , ------...--- -l~~r;& $1s,..' . !Y-"-~^!/. 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I~ '~ h II .C: It. -;.~ .~. ......". ---- 1--- .- _... --- ----. -- .- ----- -- --I- -- ,-- ---..-- .-- ,--_.__. -- -----U--R'='T------t; ----1-- ..-- - 1-1' --,_.- -- -- ---.. -.-.-- ---- ------ -- -,.-..-- - - - ") lLl~ ~~J r' --.- .--------..--.....------ --1-1 ',... ....r-- -.- - - --1-1--' .-. -- - -- -- ._-- - -.- -- ._,,- - - 1-- -r -- I , --]-- -'---'--'--'~,-,-- -..-f---- --..- - -- - _. - '--- ..- 1-- - .. _.... ---.- --- 12 10 11 12 13 13 14 15 1H 20 21 2il 21 22 22 23 24 14 25 26 25 26 27 27 28 29 30 30 31 32 33 34 35 35 35 36 37 36 39 39 40 40 @WILSON JONES COMPANY G72DS GREEN 7205 BUfF M/IOr: IN U.S.A, ...01 ------------------- CITY OF SHOREWOOD cn1BINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES AIL GOVERNMENTAL FUND TYPES DECEMBER 31, 1986 GENERAL SPECIAL REVENUE DEBT SERVICE 'lUI'ALS (MEM:>RANDUM ONLY) Year Ended CAPITAL SPECIAL DECEMBER 31DECEMBER 31 POOJECT ASSESSMENTS 1986 1985 GOVERNMENTAL FUND TYPES REVENUES : Taxes Special Assessments Licenses and Fermi ts Intergovernmental Revenue Federal State Charges for Services Fines W Interest on Investments Miscellaneous Revenue $1,040,984 $0 $0 $0 $52,833 $1,093,817 $995,558 1,488,568 1,488,568v 695,602 117,050 -../ 71,146 117 ,050~'Q~ ~b20'098 356, 308 ,\1'5~ 37,067 70,678 4,195 1,032 1,025 9,367 20,098 21,397 365,675 /27,784 37,067 ./ 28,631 70,678 ~. 57,682 142,892 ~ 131,178 67,621 ~ 49,184 2,363 66,596 135,302 Total Revenues $1,627,307 $21,130 $0 .$68,959 $1,686,070 $3,403,466 $2,398,162 <YI'HER SOURCES Transfer from Other Funds $25,000 $0 $0 $0 $0 $25,000 $29,000 Total Revenues and Other Sources $1,652,307 $21,130 $0 $68,959 $1,686,070 $3,428,466 $2,427,162 The accompanying notes are an integral part of this financial statement. ------------------- 'lUl'ALS GOVERNMENTAL FUND TYPES (MEr-DRANDUM ONLY) Year Ended SPECIAL DEBT CAPITAL SPECIAL DECEMBER 31 DECEMBER 31 GENERAL REVENUE SERVICE POOJECT ASSESSMENTS 1986 1985 ------- ------- ------- ------- ----------- ------- ------- $419,658 $0 $0 $0 $0 $419,658 $402,626 309,439 309,439 291,646- 48,889 48,889 46,505 51,.6-&8 51,688 29,577 "- ~ 512,358 437,155 ,7 , 9,708 6,619, 49,015 3,274 52,289 155,231 337,733 337,733 11 , 284 268,077 268,077 282,298 ---------- -------- -------- ------- -------- ---------- ---------- $1,400,755 $0 $0 $3,274 $605,810 $2,009,839 $1,662,941 ---------- -------- -------- ------- -------- ---------- ---------- CITY OF SHOREWO:>D ca1BINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES AlL GOVERNMENTAL FUND TYPES DECEMBER 31,1986 EXPENDITURES : Current General Government Public Safety Police Fire other Street and Highways Maintenance Street Lighting Parks and Recreation Capi tal Outlay Debt Service Interest and Fiscal Charges ~ Total Expenditures aI'HER USES Transfer to other F\mds $0 $20,000 Total Expenditures and other Uses $1,400,755 ----------" $20,000 $0 $3,274 -------- ------- $0 $65 , 685\'c -------- ------- $0 ($10,114) -------- ------- $0 $55,571 -------- -------- -------- -------- Net Increase (Decrease) in F\md Balance During the Year $251,552 $1,130 FUND BALANCE - January 1 $249,363 $6,985 FUND BALANCE - December 31 $500,915_ $8 , 115 --------- -------- --------- -------- The accompanying notes are an integral part of this financial statement. $20,000 $31,000' -------- ---------- ---------- $605,810 $2,029,839- $1,693,941 -------- ---------- ---------- $1,080,260 $1,398,627 $733,221 -------- -------- -------- ($2,625,175)($2,378,941)($3,112,162) ($1,544,915) ($980,314)($2,378,941) ---------- ---------- ---------- ---------- ---------- ---------- - - - - - - - - - - - - - - - - - - - CITY OF SHOREWOOD COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AWD ACTUAL GENERAL AND SPECIAL REFUND FUND TYPES For the Year EDded December 31, 1986 REVENUES: Taxes Li ceDses aDd Per. ts InterfoverD~DtaJ ReveDues Charfes for Services FiDes aDd Forfeits Mi scell aDeous ReveDues Tot aJ ReveDues <.11 EXPENDITURES CurreDt: GeDeral Govern~nt Publ i c Safet y Highways and Streets Culture and Recreation Total Expenditures Excess of Revenues over (uDder) ExpeDditures Ot her Fi Danci Dg Sources (Uses) operatiDf TraDsfers Excess of Revenues over (under) ExpeDdi t ures and Ot her Uses FUND BALANCE - January 1 FUND BALANCE - December 31 TOTALS GENERAL FUND SPECI AL REVENUE FUNDS (MEMORANDUM ONLY) ------------------------------ --------------------- ------------------------------ VARIANCE VARIANCE V ARI ANCE FAVORABLE FAVORABLE FAVORABLE BUDGET ACTUAL ( UNFAVORABLE) BUDGET ACTUAL ( UNFAVORABLE) BUDGET ACTUAL ( UNFAVORABLE) ----------- -------- ----------- 1957,016 11,040,984 183,968 10 10 10 1957,016 11,040,984 183,968 109,055 117,050 7,995 109,055 117,050 7,995. 350,474 356,308 5,834 20,098 20,098 370,572 376,406 5,834-, \ 17,900 37,067 19,167 17, 900 37,067 19,167 45,000 70,678 25,678 ~~; 000 '10,6'18 25,6'18 , 1,500 5,220 3,'120 1,032 1,032 2,532 6,252 3,'120 ---------- ---------- -------- -------- --------- -------- ---------- ---------- -------- 11,480,945 11,627,30'1 1146,362 121,130 121,130 10 11,502,0'15 11,648,43'1 1146,362 ---------- ---------- -------- -------- -------- -------- ---------- ---------- -------- 14'14,101 1419,658 154,443 431,012 ~ 20,996 540,523 Z522~:Y 18,45'1 60,309 n, 11,294 11,505,945 11,400,755 1105,190 (525,000) 5226,552 1251,552 25,000 25,000 10 50 50 1474,101 1419,658 154,443 431,012 410,016 20,996 540,523 522,066 18,457 60,309 49,015 11,294 ---------- ---------- -------- 11,505,945 11,400,755 1105,190 ---------- ---------- -------- (13,870) 124'1,682 5251,552 10 1251,552 1251,552 -------- -------- -------- 5249,363 5249,363 10 -------- -------- -------- 5249,363 1500,915 1251,552 -------- -------- -------- -------- -------- -------- 10 10 10 121,130 121,130 10 o (20,000) (20,000) o o 5,000 5,000 11,130 11,130 10 51,130 5252,682 -------- -------- -------- ---------- -------- 16,985 16,985 5256,348 1256,348 -------- -------- -------- ---------- -------- 58,115 58,115 10 1257,4'18 1509,030 -------- -------- -------- ---------- -------- -------- -------- -------- ---------- -------- 1251,552 10 1251,552 . The acco~aDyinf Dotes are aD integral part of these fi Danci al statemeDts. I I I I I I I I I I I I I I I I I I I CITY OF SHOREW<X>D ca1BINED STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS ALL PROPRIETARY FUND TYPES For the Year Ended December 31, 1986 (Totals - Memorandum Only) 1986 1985 SALES AND OOST OF SALES Sales Cost of Sales $980,930 786,360 $859,981 688,192 Gross Profit $194,570 $171,789 OPERATING REVENUE Water & Sewer Usage $334,674 $325,899 Total Gross Profit and Operating Revenue $529,244 $497,688 OPERATING EXPENSES $563,046 $542,654 OPERATING IN~ ($33,802) ($44,966) OTHER REVENUE General Property Taxes Homestead Credit Penni ts & Connection Fees Interest on Investments $17,533 3,092 53,790 16,260 $34,673 5,952 31,716 20,657 Total Other Revenue $90,675 $92,998 OTHER EXPENSES Metro Sewer SAC Charges Interest Other Improvements $35,222 11 ,846 5,575 $18,513 11 ,005 731 Total Other Expenses $52,643 $30,249 NET IN~ (WSS) TO RETAINED EARNINGS OTHER FINANCING SOURCES (USES) Operating Transfers $4,230 $17,783 (5,000) 2,000 RETAINED EARNINGS, JANUARY 1 $152,803 $133,020 RETAINED EARNINGS, DECEMBER 31 $152,033 $152,803 --------- --------- -------- -------- The accompanying notes are an integral part of this financial statement. - 6 - I I I I I I I I I I I I I I I I I I I CITY OF SHOREW<X>D ca1BINED STATEMENT OF CHANGES IN FINANCIAL POSITION ALL PROPRIETARY FUND TYPES For the Years Ended December 31, 1986, 1985 (Totals - Memorand\.UD Only) 1986 1985 SOURCES OF FINANCIAL RESOORCES Operations Net Income for the Year Add: Items not requiring current outlay of resources Depreciation $0 $19,783 48,283 48,187 Total Sources Provided $48,283 $67,970 USE OF FINANCIAL RESOORCES Operations Net Loss for the Year Reduction of Long Tenn Debt Acquisition of Fixed Assets Total Uses of Financial Resources $770 $0 15,800 15,483 3,393 550 -------- -------- $19,963 $16,033 -------- -------- $28,320 $51,937 -------- -------- -------- -------- NET INCREASE (DECREASE) IN WORKING CAPITAL cn1PONENT ELEMENT OF INCREASE (DECREASE) IN WORKING CAPITAL Net Increase (Decrease) in Working Capital $51,254 ( $56, 118) 12,442 16,297 (2,625) 2,855 (33,669) 19,319 (1 , 034 ) (122 ) 6,161 17,775 (1,275) 37,817 (824) 17,346 (1 , 794 ) 2,066 (316) (5,298) -------- -------- $28,320 $51,937 -------- -------- -------- -------- Cash and Investments Accounts Receivable Taxes Receivable Other Accrued Interest Inventories Prepaid ExPenses Accounts Payable Accrued Liabilities Current Portion Long-Tenn Indebtedness The accompanying notes are an integral part of this financial statement. - 7 - I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1986 NOTE 1 - Summary of Significant Accounting Policies A. Fund Accounting The accounts of the City are organized on the basis' of funds and account groups, each of wtlich is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise it's assets, liabilities, fund equity, revenues, and expenditures: or expenses~ as appropriate. Government resources are allocated to and accounted for in individual funds based upon purposes for which they are to be spent and the rreans by which spending activities are controlled. The vanious funds are grouped, in the financial staterents in this report, into eight generic fund types and three broad categOli'ies as follows: Governmental Funds General Fund - The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of certain specific revenue sources that are legally restricted to expenditures for speci- fied purposes. Debt Service Funds - Debt service Funds are used to account for the accumulation of re- sources for, and the pajfrent of~ general long-term principal, interest, and related costs. Capital Projects Funds - Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities other than those financed by proprietary funds or Special Assessrrent Funds. Special Assessment Funds - Special Assessment Funds are used to account for the financing of public ilJl)roverents or services deered to benefit the properties against which special assessments are levied. Proprietary Funds Enterprise Funds - Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises - where the intent is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. Fiduciary Funds Agency Funds - Agency Funds are used to account for assets held by the City as an agent for individuals, private organizations, other governrrents, and/or other funds. The City does not have any Agency Funds. - 8 - I I I I I I I I I I I I I I I I I I I CITY (f SHCRE\\OOD NOTES TO FINANCIAL STATEfvENTS Decarber 31, 1986 NOTE 1 - Continued C. Basis of Accounting Government funds and Agency funds are accounted for using the modified accrual basis of accounting. Their revenues are recognized when they become measurable and available. Substantially all sources of revenue are accrued except interest on special assessments receivable, which is recognized when due. Expenditures are generally under the modified accrual basis of accounting when the related fund liability is incurred, except for principal and interest on general long-tenn debt which is recognized when due. Proprietary funds are accounted for using the accrual basis of accounting. Revenues are recognized when they are earned, and expenses are recognized when they are incurred. Unbilled utility service receiv- ables are recorded at year-end. D. Budgets and Budgetary Accounting 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 for the fiscal year carrrencing the following January 1. The operating budget includes proposed expenditures and the means of financing then 2. The budget is legally enacted through passage of a resolution. ~J.~~ft^-'" 3. The City Council may authorize transfer of budgeted amounts~artments within any fund.. 4. Formal budgetary integration is aJllloyed as a management control device during the year for the General Fund and Special Revenue Funds. Formal Budgetary integration is not employed for Debt Service Funds because effective budgetary control is alternatively achieved through general obligation bond indenture provisions. Budgetary control for Capial Projects and Special Assess.- ment Funds is accarplished through the use of project controls. 5. Budgets for the General and Special Revenue Funds are adopted on a basis consistent with generally accepted accounting principles. 6. Budgetary control is maintained at the object of expenditure category level within each activity> and in carpliance with City Charter requirements. Also inherent in this controlling function is the management philosophy that the existence of a particular item or appropriation in the approved budget does not automatically mean that it will spent. The budget process has flexibility in that, where need has been properly demonstrated, an adjustment can be made within the depart~nt budget by the City Council. Therefore, there is a constant review process and expenditures are not approved until it has been detennined that (1) adequate funds were appropriated; (2) the expendi- ture is still necessary; and (3) funds are availabl.e. Budget arounts are as originally adopted or as arended by the City Council. Budgeted expenditure appropriatioos lapse at l' - 10 - - ~ l.LJ es 05 ~ >- I- ..... U - VI I- z ~ ~ t; ~ ..... u ~ ..... lL.. ~ VI l.LJ ~ ~ r-l ~ r-l (V) ~ ~ - "@ :::J C :;::; 8 u 01 C 'r- .j..J C :::J o U ~ "t:I C :::J lL.. r-l ~ - VI :::J o ~ +> C :::J o U ~ .j..J I C ~ :::J s... 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VI ~ +>C:::J VlO VI o VI+> ual~~ r- ...., or- V') rtl s.......- rtl U 0 '[ 6}:; "@ o s... 4- X +> (]) 'r- VI VI VI 4- or- or- :::s ..c "t:I c "t:I (]) ~.~~~ .j..JrtlC .~,~,~B ~ ~ ~ . (])s...(])VI t3 6} (]) ~~ "t:I ..c "t:I +> ~"@s...c> s...+>(])U") o ~ > ~....-oo s...~al~ (]) U "t:I r-l s... U'r- rtl~e;g VI"t:Is...s... -g ~ a.4- :::J C (]) :,~~~~ r-.,.... tf).,..... rtl +> VI (]) (]) 1U E ~,~ ~ '[ ~ c""- s... a. 0 0....- (]) o 'r-:::J +> ~~~'ti;~ C'r- VI 4- 'r- U :::J (]) O~(]) ..c VI ~s..."@+> ~(])~tJ~ VIVI E VI C 'r- VI ~ (]) . +> rtl a. VI VI "t:IX.j..J(])(]) (]) (]) (]) :::J X (])(])....- iZ~~~~ - - - 0"1 - - I I I I I I I I I I I I I I I I I I ~ CITY OF SI-ICREWOOD OOTES TO FINANCIAL STATE/VENTS lkerrber 31, 1986 NOTE 1 - Continued E. Cash and Temporary Cash Investments Cash balances from all funds are coobined and invested to the extent available in short tenn certificates of deposit and repurchase agrearent. Investments are carried the lower of cost or market. Earnings from such investments are allocated to the respective funds on the basis of applicable cash balance participation by each fund. F. Inventory Inventories are stated at cost, on a first-in, first-out basis. G. AcclllUlated Unpaid Vacation with Sick Pay Vacation that can be carried over to the next year is limited to ten days for all city employees with the exception of liquor store employees where a maxirrum of five days can be carried over. Vacation carried over to 1987 is not material. AccUITJJlated unpaid sick leave as of DecertJer 31, 1986 totals $55,682. Sick leave is recorded as an expense only when leave is granted for illness. H. Total Columns on Coobined Statarents Total columns on the coobined staterents are captioned Memrandum Only to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or changes in financial position in confonnity with generally accepted accounting principles. Interfund eliminations have not been made in the aggregation of thi s data. It> \ 1. Property Taxes Property taxes are set by the C y Council and certified to the County Auditor, who acts as collecting agent, on Octobe~ f the year prior to collection. Minnesota cities operate a levy limitation law which nerally limits the annual increase in taxes per capita'. .' ies' for bonded indebtedness are not covered by this law. Property tax revenue i nc 1 udes arounts co 11 ected by the County duri ng the year and rani tted to . the City. Portions of the tax levy paid by the state in the fonn of Homestead and Reduced Assess-- rent Credits are included in intergoverll'lEntal revenue. Only that portion collected directly from property owners is refl ected in tax revenue. De 1 i nquent Property Taxes are recorded as revenue when received. Delinquent taxes and delinquent special assessrrents as of Decerrber 31, 1986 are: Delinquent Taxes Delinquent Assessments $ 60,954 $ 142,286 - 11 - J ttv,.Iy \ ~ \~~~ N. J. .,y?~.... \f \ "'\'ttv / J 't' " ~'\ '. 'J \ ~ ,,~' ~ ~~ \j) ',:' ~ '..J ~v \\\,.~ "ri>~ : \~ c\' '''J " I I I I I I I I I I I I I I I I I I I CITY (F SHffiEWOOD NOTES TO FINAACIAL STATErvENTS Decarber 31, 1986 NOTE 1 - Continued J. Reporting Entity In accordance with National Council on Governmental Accounting Statement No.3, Defining the Governmental Reporting Entity, for financial reporting purposes, the City's financial statements include all funds and account groups over which the City excercises oversight responsibility. Oversight responsibility includes such aspects as appointment of governing body members, the ability to significantly influence operations, and accountability for fiscal matters. NOTE 2 - General Fixed Assets General fixed asset purchases are recorded as expenditures in the various funds at the tiITE of purchase. Such assets are capitalized at cost in the General Fixed Asset Group of Accounts. The change in fixed assets may be slllTllarized as follows: Balance 1-1-86 Deductions Balance 12-31-86 $620,114 346,702 Additions Land & Buildings $496,114 Machinery & Equipment 293,336 $124,CXX) 53,366 $ --- $789,450 $177,366 $ -0- $966,816 -------- -------- -------- -------- -------- -------- --------- --------- A slJ1111ary of Proprietary Fund Type fixed assets at Decart:>er 31, 1986 is as follows: Water Fund Sewer Fund Liquor Fund T ota 1 $ 13,303 $ 19,434 $ 29,088 $ 61,825 3,955 3,955 931,810 353,540 1,285,350 Sub- Total (945,113 ) 372,974 33,043 1,351,130 Less AccLmJ 1 ated 187,923 108,163 28,871 324,597 Depreciation TOTAL $757,190 $264 ,811 $ 4,172 $1,026,173 -------- -------- -------- ---------- -------- -------- -------- ---------- - 12 - ~ ~ N N ....-I ("I') r--.. ....... ~ "C ~Q) ~ O'l ~ ~ ~ ~ C Q) VlO O'l ::J ~ ~~ "C ~ ....-I ....-I ....-I ....-I ....... ....... 4-1..L. C O~ "C ~"C .8~ Q) fa 0.. fa Q) Q) +> Q).~ 4-11:l Q) VlU ~ 13 ~ 13 ~ ~ ~ 13 ~II ......3 Vl ~ ~ Q)'~ II r- +> I1:lVl .J:: 4- II Q) C -l-> I- 4- Q)~ ~ ~ -II r- .J:: ::J VlC ::J 1.0 @ ~ t(l a a @ 1.0 ~II ::J +-> 0 ~~ Vl U I N ....-I ........ ~ II 4- U fa....-l ....-I ........ oo::T N N rv'1I Q) ~ ~ "C -l-> r-("I') oil VlO .8> C 0 I1:l I ....... S11 ::J4- Q)e ::JC co~ ~ -0 \D '5 ~g- I..L.Q) 2l~ O'l ~ 0.. ...... C I1:l ~....-I ::J ...... 0 . r- +> Vl ...... ~ b5 "C11:l 11:lQ) +>0 CU ~ :::s ~4- :::so 2im Vl ~ I..L. r- Q) ~ a> C ~II Q)Vl +>~ Q) 0 13 ~ ~ ~ 13 13 .J:: C ~~ ~ ~ ...... II Vl +>2i Q) +> I II I- ~ +> ~ . U ~ ~ ~ ~ a oil z: ~ x ~2l"2 :::s 1.0 ~ ~ 1.0 ~ a t ~II ~ OQ) Vl"2 -0 N ........ II 4- I- Q)+> 11:l'~ ~ ....... N 1.011 C I ~lrl ~~~ ~ ~I ~ ........ -oO~ Vl O'l ~ O'~ +> C c:(r- +> 4- r- tn .J:: +> Q) 0 r- ........ ....-I +> I1:l ~ Vl -l r- 0 C Vl l.J.J ~.~~ Vl Vl I1:lU ...... ~II e5 <:i ~ ~ I1:l r- ...... ~.b~ Vl ~ ....-I I1:l ~~ C II Vi ........ ("I') Q)~"C Vl "2 ~ 0 II U co..c Vl .,.... '''- -+-' ...... 1.0,1 ~ i ;=~~ I1:l X C . VI . r-U +> 1.0 ~ .~ ~~ Q)a3~ ~~~ ...... ~ 8<11 I "2 4- "C II ("I') ........ +> ~ ...... .c: .,.... or- ~ ~ ~ ~I ....... ~ I..L. .J:: '0 X ~ Q)U +>>U .,...~....- ::? ~ O'lVl:::S ...... .J:: Q) r- I1:l ~ ........ ...... ~ CT 4- ~ +>Q) Cr-Q) I1:l '5 > U I1:l 11:l...... 49~ .J:: ...... .J:: Vl .0 ~-l C C+> >, ~ +-> Vl~-g r- ~-l-> Q) ...... r- ~ Vl >, "C O'l "2'5 ~0'5 11:l'~ 0 Q) +> fa l..L.a C r- +-> "2Efa 4- .J:: 4- 0 -0 +> .~ +-> :g 1311 +> ...... ~ ~...... ~ Vl...... -oUVl ~ ~ ~ ~ ~ 13 13 II 4- ~ ~~ "2 0"2 ...... ~ aJ ~ ~ II O'l N 0-0 C "2 ril CO("l') -0 lrl~ r-~~ ~fa~ Q) ~ ~ ~ ~II ...... +> ........ c:( .~ .~ ~ U I1:l U N U~ ~ a ~ ~ ~ ~ @ II Vl > ~ .~ fa. ....... 0'\11 :::SQ)CO "CO Q)-O Vl "C .J:: ~ - ....-I 0'\ \D N ~I >....-1 faa a ~fa :S51fa Q) ~.~ r- ....-I ~ ("1')11 "24:~ ~.~ :::s I1:l I ....... ~I Vl l1:l"'af co ....-I ~ C -0 ~j j 49:5 "211:l:5 ......" C Vl4-~ Vl t:~~ c...... ""C r-- 'Or- "C r- ~ Vis.e ..~11:l11:l Cr-Q) ~ .. Vl Vl Vl Vl Vl Vl Vl Vl Q)4- Vl 0...... 4- S:::Su Vl +> -l-> +> +> -l-> ~ ~ -l-> ~O'l} Vl Vl ~ "C ~lrllrlr- 4- .~ "C C C ~ ~ C C ~ C -0"' I1:l ..c Car- > g C ~ ~ ~ ~ ~ -0 C fa.J:: .J:: ~ ~.r-S S ~ o..r- ..~~~ S Vl '0, VlC ~~ C ~o +-> 4- VlC~Vl > ~ > ~ e > > > "2 ...... fa +>0 t: a ~ Q) "C ~ ~-l-> ~ +> 0 0 e 0 e ~~ Vl...... C ~ ~ ~ ~ ~ :::s VlC~ ~ ~~ ~ .,.....,...~ C 0 cQ)..c..c ~ g- g- g- g- g- g- e- C -0 0 ("I') +> r- +> ~ 4- Sa::: Q) ~I ~ ...... ~ :;; +>~ ~ "2 .~ ~8 ~ "2-0 ........ ........ ...... ........ ........ ........ ........ ...... +> Vl'~ ~~~~ Q)~~Q) t: Vl C .~ I..L. I1:l Q) ~ Q)~ C .~ ..c :::s +> U.J:: Q) } } } } } } ~ } f2 0 ...... Vl co x ~ 0 r- r- Vl ...... ~ Vl U Q)UVlN ~~ ...... aT -l 8E"2 ~Q)~"2 Cl1:lro~ ~ ~ VlQ)I1:l~ Q)3..c I..L.-o ~~~i I ...... ~ Q)~ Vl ~ 0') Vl .~ ~ 0.. Q) ~ ~~ ~~ r-cu r- Q)...... U C r- N 0.. ~ .J:: ("I') I1:l c.<H 2l .~ ~ a.2 0 I1:l ....-I N N ("I') oo::T ....-I (iI) ~ ~ +-> ....J .~ ........ ........ ........ ........ ........ co ~ ~ 2l lrl ~ ~ ~ ~ ~ lrl C C Q) ~ C br ~ ~ ~ 0.. l.J.J 3 Vl - - - - - - - - - - - - - - - - - - - I I I I I I I I I I I I I I I I I I I CITY (f SIGE~ t()TES TO FINPM:IPL STAID'fNTS 0eceJDer 31, 1986 The debt service requirEJlBlt for the next five ,years is SU111Ic1r'ized bel()N: Special AsseSSITeltS Revenue Bonds Year Principal Interest Principal Interest 1987 $ 670, ax> $300,375 $10, ax> $ 9,475 $12,474 1988 475, ax> 253,025 10 ,ax> 8,700 12,017 1989 470, ax> 226,258 10, ax> 7,925 11,478 1990 475, ax> 1~,2!iX) 10, COO 7,125 11,328 1991 475, COO 169,716 10, COO 6,325 93,548 Thereafter 1,425,000 723,286 65, (XX) 17,785 .r-- Building Contract - In 1986 a building wa purchases subject to a contract for deed. The contract is at 12 % per annun Calputed on the unpaid ba . roonthly pa}1'TBlt is $1,155 with the entire unpaid balance, $92,813, due and ~able in full July 1, 1991~ . t()TE 4 - Fund Balance Deficits The following funds had fund balance deficits at DeceTber 31, 1986. The balance of special assessnents levied but not received are shatIl for the Special AsseSSIlSlts funds. - 14 - I I I I I I I I I I I I I I I I I I I CITY Cf SHCREWOOD OOTES TO FINANCIJll STATEtvENT$ l:a:artler 31, 1986 NOTE 4 - Fund Balance Deficits Continued Special Assessments Funds: Fund Balance Assessments Levied But Not Received 1971 & 1972 Improvements 1973 Improvements 1974 Improvements 1981 Improvements 1984 Improvements South East Water Shorewood Oaks $ 11,339 29,618 436,534 431,024 513,839 109,640 22,606 $340,049 29,936 586,730 472,290 628,465 805,025 Enterprise Funds: Water utility Funds $200,544 The Special Assessment Fund deficits are being funded by Special Assessrrents that are levied and will be received in future years. Tax levies and fund transfers are used to rreet required expenditures of the water fund. ~OV'f~W "J ~ NOTE 5 - Projects in Progress, /a / South East Water Project - Bonds t9~f'lg"'_OOO were sold in 1986 for the construction ~or expansion or the rrunicipal water syst8TI. Ttie;;e~ost of construction of the project is $997,200. Construc- tion contracts to be awarded in 198~_~,Y' Shorev.ood Oaks Project - The City is in the preliminary developement stage for rrunicipal improvements of a new subdivision. Final plans, specifications, have not been approved. NOTE 6 - Bond Refunding In early 1987 the City authorized the issuance of general obligation refunding bonds. The 1984 Series A bonds of $1,250,roJ will be refunded in 1987. NOTE 7 - Pension Plans All City employee~, including the 16 full-time and 13 part-time employees, with the exception of the City Administrator an9 part-time students rrust belong to the state-wide Public Employees Retirement Associati on (PERA). ~City's contribution in 1986 was $15,276 to the Public Employees Retirement Association; The Public 8rployees Retirement Association is state-wide and an individual unit's portion of unfunded . reserves is not available. - 15 - I I I I I I I I I I I I I I I I I I - CITY OF SHffiEWCXIl t()TES TO FINANCI~ STATEtlENTS lEerber 31, 1986 NOTE 8 - Segrent Information The City rroaintains three enterprise funds wtlich account for water and sewer utility systans and the liquor stores operations. Segrent information for the year ended Decerber 31, 1986 was as follows: Li quor Fund Utility Funds Total Enterprise Funds Sewer Water Operating Revenues $194,570 $285,261 $ 49,413 $ 529,244 Operating Expenses 175,039 300,609 87 , 398 563,046 Operating Incare 19,531 ( 15,348) ( 37,985) ( 33,002) Other I ncare (Expense) 1,453 18,783 17,796 38,032 Transfers ( 5,em) ( 5,em) Net Incare 15,984 3,435 120,289) ( 770) Retained Earnings 159,527 273,050 (200,544) 152,033 Property Pl ant and Equiprrent Net 4,172 264 ,811 757,190 1,026,173 Total Assets 203,949 647 , 568 770,534 1,622,051 Total Liabilities 44,422 20,978 119,268 184,668 . Fund Equity - Construction in Aid of Construction 353,540 931 ,810 l1,285,350 Retained Earnings 159,527 273,050 (200,544) 152,033- Bonds Payable ~ 12.5 ,QOO'"' .",ji;-tJ."}, I. ;" j\.,i' - 16 - ~ I 1-4 oCi-lo't:lCi-lrnQ) s::: Q) 0 -r-! <D 0 .r-! ~ aSr-l rn~ ~ bG.8rn~gs::: ~ s::: ~ Q) '1"") 0 s::: 0 .~ rn Q)..c..r-! 0 ~ as ~~ ::s ~ .r-! ~rnaSS:::S;:O rn s::: 'r-! c8 as Ci-l s:::.r-! ~-r-! PooQ)so~ Ci-l s::: ~ ~ Q) >< r-l oQ)o~..oQ)~Q) Q)~Ci-lC!l2l E!~a) rn 't:l~..c!Q) S:::r-l ~rn<D't:l ~S:::'r-!O ~~<DS:::~'r-! ..s s::: s::: ~ 0 rn ~ Po ~ Q)'r-! -r-! s::: ~ ~ a3 rn ::s ~ .r-! 't$ 9, as ~~~g'~'g~~~ ~ as o.r-! Q) ~rnQ) Ci-lr-l ~~s::: o S-l~s:::o.rn Q) f+.I a1 as g.r-! ~ ~ a1 ~ <!l.r-! rn ~ <!l.r-! ~ 10~Q)orne~ 5 s::: ~ ::s Q) Q) Q) rn ~~asoo~~~~ ;~!] ]~i~ o~ ui8r-l:::.s s:::.r-! rn rn ~ ~ as as as o rn .r-! s::: ~.r-! ~ -r-! as r-l rn <!l 0 s::: rn ~ ..0 ~ ~ m ! 5 .r-! ...... ~ Q) s::: !la ~'r-! ~ 't:l as -g:5 ~ La ~ ~ ~ Jl -8 ~S:::r-lr-lrn"So~e Q) 0 0. as r-l as.r-! rn ~ Po s::: as j .r-! ~ s::: ::s o.r-! Q) Ci-l :E 0 rn .r-! 0 ~ ~ 0 .r-! ~ ~.~ r-l s:::.r-! ~.r-! .r-! Q) ~ Q) 'r-! j ~ ~ .r-! 0 ~ as OE-< Ci-l~~Ci-l I] ~ ------------------~ I I I I I I I I I I I I I I I I I I I ASSETS Cash and Investments Taxes Receivable - Current Accounts Receivable Total Assets LIABILITIES AND FUND BALANCE Liabilities Accounts Payable Accrued Salaries Payable Total Liabilities Fund Balance CITY OF SHOREWOOD GENERAL FUND BALANCE SHEET December 31, 1986 $507,748 o 42,729 $550,477 --------' -------- $30,112 19,450 $49,562 $500,915 $550,477 Total Liabilities and Fund Balance -------- -------- - 18 - I I CITY OF SHOREWOOD GENERAL FUND STATEMENT OF REVENUES - ESTIMATED AND ACTUAL For the Year Ended December 31, 1986 I Estimated Actual (Unfavorable) I --------- ------ ----------- TAXES General Property I Current $916,903 $879,227 ($37,676) Delinquent 40,047 f40 , 04 7J... Penalties and Interest 77 , 777 77, 777J. Fiscal Disparities 40,113 40, 113 0 I Other 3,820 (3,820) -------- -------- -------- Total Taxes $957,016 $1,040,984 V" $83,968 I -------- -------- -------- LICENSES AND PERMITS Business Licenses and Permits $9,200 $8,606 ($594) Non-Business Licenses and Permits 1,800 5, 141 ~ 3,341 I Building Permits 98,055 103,30~ 5,248 -------- -------- / -------- Total Licenses and Permits $109,055 $117 , 050 $7,995 I -------- -------- -------- INTERGOVERNMENTAL REVENUE State Grants I Local Government Aid $151,517 $151,517 ,/ $0 Homestead Credit & Machinery Aid $169,420 $169,420/ 0 County Road Aid 17,000 18,766..( 1,766 CDBG 12,537 16,605/ 4,068 I -------- -------- -------- Total Intergovernmental Revenue $350,474 $356,308 $5,834 -------- -------- -------- I CHARGES FOR SERVICES General Government $14,000 $31,774 $17,774 Highway and Streets 1,800 1,875 75 I Sanitation Charges 1,700 3,046 1,346 Park and Recreation 400 372 (28) -------- -------- -------- Total Charges for Services $17,900 $37,067 $19,167 I -------- -------- -------- FINES $45,000 $70,678 $25,678 I -------- -------- -------- MISCELLANEOUS REVENUES Interest Income $0 $4,195 $4,195 I Miscellaneous 1,500 1,025 (475) -------- -------- -------- Total Miscellaneous Revenues $1,500 $5,220 $3,720 -------- -------- -------- I TRANSFERS Revenue Sharing, Liquor Fund $25,000 $25,000 $0 -------- -------- -------- I Total Revenues and Transfers $1,505,945 $1,652,307 $146,362 ---------- ---------- -------- ---------- ---------- -------- I - 19 - I I I I I I I I I I I I I I I I I I I CITY OF SHOREWCX)I) GENERAL FUND STATEiENT OF EXPENDITURES - ESTIMATED AND ACTUAL For the Year Ended December 31, 1986 Favorable Estimated Actual (Unfavorable) --------- ------ ----------- GENERAL GOVERNMENT Mayor and Council $18,888/ Current Expenditures $61,598 $42,710 Administrator Current Expenditures 51,831 48,727 3,104 Finance Current Expenditures 82,566 78,937 ./ 3 ,629- Planning and Zoning Current Expenditures 36,191 36,398 \/ (207) General Government Current Expenditures 56,895 57,786v (891) Professional Services Current Expenditures 85,650 76,722,..1 8,928 Municipal Buildings 102,200/ Current Expenditures 99,370 (2,830) -------- -------- -------- Total General Government $474,101 $419,658 $54,443 -------- -------- -------- PUBLIC SAFETY Police Protection Current Expenditures $326,254 $309,439 / $16,815 Fire Protection Current Expenditures 48,889 48,889 / 0 Protective Inspection ~ Current Expenditures, 55,869 4,181 -------- ~---------' -------- Total Public Safety $431,012 $410,016 $20,996 -------- -------- -------- - 20 - I I I I I I I I I I I I I I I I I I I CITY OF SHOREWCX)D GENERAL FUND STATEMENT OF EXPENDITURES - ESTIMATED AND ACTUAL For the Year Ended December 31, 1986 Total Streets and Highways Estimated Actual Favorable ~\.\ ~ (Unfavorable) ") J.' --------- ------ ----------- ~o ~~..l $119,665 $102,902 /" 14/~~ I)~ $16,763 ~ ~.{'\\1' 9,750 8,000/ 1 , 750 0'/ ~v ~ () 9,608 6,927 j 2,681 ,,<If VJ~ 13,715 11,518 ,// ~~" 2,197 335,247 347,049 / ( 11 , 802 )' 23,648 17,732/ 5,916. . 8,000 9,708/ (1 , 708 ) 20,890 18,230/ 2,660.' -------- -------- -------- $540,523 $522,066 $18,457 -------- -------- -------- STREETS AND HIGHWAYS Public Works Current Expenditures Garage Current Expenditures Traffic Control Current Expenditures Sanitation and Weed Removal Current Expenditures Streets and Roads Current Expenditures Snow and Ice Removal Current Expenditures Street Lighting Current Expenditures Tree Maintenance Current Expenditures PARK AND RECREATION Park & Recreation Activities Current Expenditures $60,309 $49,015 ~ $11,294 Total Expenditures and Transfers $1,505,945 $1,400,755 $105,190 ---------- ---------- ---------- ---------- -----_._- -------- - 21 - I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD GENERAL FUND STATEMENT OF CHANGES IN FUND BALANCE For the Year Ended December 31, 1986 Revenues and Other Sources $1,652,307 Expendi tures and Other Uses 1,400,755 NET INCREASE (DECREASE) IN FUND BALANCE $251,552 FUND BALANCE, January 1 249,363 FUND BALANCE, December 31 $500,915 -------- -------- - 22 - I I I I I I I I I I I I I I I I I I I ~ CITY OF SHOREWOOD SPECIAL REVENUE FUNDS cavmINING BALANCE SHEET December 31, 1986 ASSETS Federal Revenue Sharing Cash and Investments Accrued Interest $8,018 97 Total Assets $8,115 ------- ------- LIABILITIES AND FUND BALANCE ---------------------------- Liabilities $0 Fund Balance - Unappropriated 8,115 Total Liabilities and Fund Balances $8,115 ------- ------- - 23 - I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD SPECIAL REVENUE FUNDS <n1BINING STATEMENT OF REVENUE, EXPENDITURES For the Year Ended December 31, 1986 REVENUE INTERGOVERNMENTAL REVENUE Federal Grants Federal Revenue Sharing Revenue OI'HER REVENUE Interest on Investments Total other Revenue Total Revenue EXPENDI1\JRES Transfer to other Funds Total Expenditures CHANGE IN FUND BALANCE Net Increase (Decrease) in Fund Balance Fund Balance, January 1 Fund Balance, December 31 - 24 - Federal Revenue Sharing $20,098 $20,098 $1 , 032 $1,032 $21,130 ------- ------- $20,000 $20,000 ------- ------- $1,130 $6,985 $8,115 ------- ------- I I I I I I I I I I I I I I I I I I I CITY OF SHOREW<X>D CAPITAL PROJECT FUND ca-JBINING BALANCE SHEET December 31, 1986 ASSETS Capi tal Park Improvement Cash and Investments Accrued Interest $58,411 692 Total Assets $59,103 -------- -------- LIABILITIES AND FUND BALANCE \~> .~~~..' ~ .~? \ ~f' ..,,~ $812 ~~~<" 2,720 /' (~~ ::,; Accounts Payable Contracts Payable Total Liabilities $3,532 F\md Balance $55,571 Total Liabilities and F\md Balance $59 , 103 -------- -------- - 25 - I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD CAPITAL POOJECT FUND STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE For the Year Ended December 31, 1986 REVENUE Park Improvement Division Fees Century Club Donation Interest on Investments Miscellaneous $66,500, 96 2 , 363 ' o Total Revenue $68,959 EXPENDITURES Engineering Services Equipnent Purchases Miscellaneous Park Acquisition 299, 812 163 2,000 ' Total Expenditures $3,274 Net Increase (Decrease) in Fund Balance $65,685' Fund Balance, January 1 (10,114) Fund Balance, December 31 $55,571 ------- ------- - 26 - - - - - - - - - - - - - - - - - - CITY OF SHOREWOOD SPECIAL ASSESSMENT FUNDS COMBINING BALANCE SHEET Deceaber 31, 1886 1871 & 18'72 18'73 1874 1880 1881 1884 Sout heast Shore_od IlIProve_ats IlIProve_at IlIProve_at IlIProve_at IlIProve_at IlIProve_at water Oaks Total ----------- ----------- ----------- ----------- ----------- ----------- ------- ------- ASSETS Cash aad lavest_ats Debt Servi ce 51,411,957 (54,543) (547,064) 58,640 (1167,680) 5655,599 5185,756 52,043,655 Coastructi oa 158,853 705,416 (22,303) 5842,966 Accrued I aterest 15,569 ( 75) 205 ') _ 35 2,3581'( 8,187 11,226 37,506 Speci al Assess_ats Receivable-Current 6,135 20,325 1,627 28,087 N Uaa~rti zed Boad Di scount 2,680 2,680 '-l ---------- -------- -------- -------- -------- -------- -------- -------- ---------- Total Assets 51,433,661 (54,618) (526,534) 59,675 ($161,024) 5823,639 5902,398 (522,303) 52,954,894 ---------- -------- -------- -------- -------- -------- -------- -------- ---------- ---------- -------- -------- -------- -------- -------- -------- -------- ---------- LI ABI LI TI ES AND FUND BALANCES Liabilities Accounts Payable Contracts Payable Boads Payabl e 50 50 50 50 50 51,231 5303 1,534 87,468 25,807 113,275 1,445,000 25,000 410,000 270,000 1,250,000 985,000 4,385,000 ( 11, 339) (29,618) (436,534) 8,675 (431,024) (513,829) (109,640) (522,606)(51,544,915) ---------- -------- -------- -------- -------- -------- -------- -------- ---------- Fuad Bal ance Total Liabilities and Fund Balances 51,433,661 (54,618) (526,534) ($161,024) 58,675 5823,639 5902,388 (522,303) 52,954,884 ---------- ---------- -------- -------- -------- -------- -------- -------- -------- -------- -------- ---------- -------- ---------- - - ..........- ~ ~~ , ~" ~ <~ b1 ~ ~ -A--- ~ . ... '-......~ ,../- ,<:;, :'" ,,-, ""'-':v :. 'v:.. ,,~ "- '--;, :t'\ .~ ' ~' ," .4r, -...... /~. ,il ,.~ '- ,.,. ~....... ~ ,.-.. --...,. '. .. -'-' .. "'- ." ,\.... ;'-\,.. h . --s. " ,,\ \!..! " ~ """ r\ ."'" -, 1 ~ ~ .~J'-:-:., ~ ~ ....... .t:' v,\ ~ ''(\ " ~ ~~ ~ ,~ -.:\ ~~ 1 Q '?r ~ '\J y J t~ ~~;~ ~~ ~ --....Vj < .~ ~ .-.i.. .. ~ .-;;,. ~ "- S:..~ ~~. '" (~~ \.J) .;, ~ "J ,,~ '-..3 S' ~ ~ ."~ .fY.-... ~ ~ (.:.J ~ ~ ~ ~~ ~ ~ ~ ~ ;)~ ~{i:' \}' ~ """ "- r() ~ " ~ ~ 0~ ~~ ~~ ~ -< ~ ~..~ ...... ~ \J) ~.~ ~ \0 ~ \;)""-:j- ~ 01 ~ ~ ~ 0' ~ ~ ~ ~ .~ ''-1. ~ ~ ~ ........ ~ ~ ~ ~. -l .... ~ "" ~ Iv" ~ ~.. V) ~ ~ ~ ~ -~ '~ ~ ~ ~ ~ " '> ~. <;;:, ~ .S' ~ ~ .... j ~ ~ " ~. <) ~. .r--' ., ~ ---..".." .~ ~ ~ ~ '. ~~, ~ .",.::01:' -~ '" ~. ~... ~ ~ ".* g, 1:) ~ ~ ~~ ~'l.J ~. ."~ "-. ~~ ........ ~ ~ ~- ~ ~ q ? ~; ~ "~ ~4~ c "'" '! "' <..\ ~ ~ ~ .......... ~ ~ ~;. .~ i.~~ , ~ , ~ ~~ ~ ~~I ").. ~" ~ ~~~:} ~ s:::: ~ "C: ~ "'-- ~~iJj::~~~ ~. ~ ~~ ~ ~ ~ .~. ~ ~ -, s;.... "" I~ .~ .~ ';:; '" ~ "II) ~~ \I) ~ $I ~ ~ ~~ ""' " ~'i... ~ ~ ~3 ~ ~ ~ ~ . ---c. ~ ~.. :'1 ~:::Js ~ ~ a - . .~- .:;1. if) ",- ,s;.;. ~ ~ -- $ ~ ljo ~, ~~~ ~ ,..} ...... "~ '-, ............... -.,-, ~' Q "S1l. V) '--.j ~ ~ ~ ~ r April 11, 1987 City of Shorewood Page 3~ UTILITY FUNDS Following is a summary of the sewer and water fund activity for the year: Operating //.!~!ER~~'-""--_,,_ / .." (V " " 4::::3 ~ ::::90) "~}~ SEWER 1986 1985 -~ I r9''-f Operating Margin ( 76.8%)/ 5.4%) / . ! 292,109/<1; s,S 1..- ...... ./.,1" .JjOV \~ \ 307, 108/1f~v ('~oi pt! ," ( 14, 999 ) 5 NI ~. \ w O'D' ~ . \V ...1. ~ \. ,.'f"~? ~b q~7 \ 5.1%) SALES ~, 26.1)~ 300,609 ---.....,....'^"----'~ Operating Loss (37,985) (47,664) 15,348) Working Capital 924) 962) (367,916) (271,606) The above numbers raise some questions that I believe should be addressed in 1987: 1. Why water revenues went up significantly while sewer revenues are down? 2. Why are operating expenses for the sewer and water so high in comparison to revenues? 3. Can the City continue to subsidize the sewer and water operations through taxes and nonoperating income. Non- operating income should be committed to major repairs and capital replacement? I recommend a thorough analysis of your sewer and water funds for";) possible errors in your billinga. nd receipt system for waYS.30 increase revenues and cut expenses. Then establish a policy as to rates charged, amount and kind of subsidy. * .. DEVELOPMENT COSTS In March of 1987 the City sent letters to developers requesting payment for expenses incurred by the City in connection with their project. These expenses totaled $30,000 and are from 1985 and 1986. A system is in the process of being set-up now to capture these fees monthly and submit invoices to the developer monthly. I recommend that you follow through with this system, monitor the system on a monthly basis; and then establish a policy that if a developer refuses or is always late in reimbursing the City for their expenses, then the project be called to a halt. - - - - - - - - - - - - - - - - - - - CITY OF SBOREWOOD SPECIAL ASSESSMENT FUNDS COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CBANGES IN FUND BALANCE For the Year Ended Deceeer 31, 1986 1911 .. 1912 1913 1914 1980 1981 1984 Sout heast Shorewood l.-provellents I.-provellent l.-provellent l.-provellent l.-provellent l.-provellent Project Oaks Total ------------ ----------- ----------- ----------- ----------- ----------- ------- --------- REVENUE Speci al Assessllents Current $168,648 $4,016 $21,834 $13, SIll $90,948 $238,851 $0 $0 $543,888 Del i nquent 42,119 66 2,843 165,362 211,150 BOllestead Credi t 8,361 8,361 General Propert y Taxes 52,833 52,833 Prepai ds 91,242 2,112 1,915 1,500 4,388 440,391 118,915. 133,530, Interest 90,302 25 ( 11) ( 12) ( 815) 23,086 22,171 135,302 --------- -------- -------- -------- -------- -------- -------- -------- -------- N Tot al Revenue $398,811 $6,219 $100,821 $15,018 $259,884 S102,344 S202,152 $0 S1,686,070 ex:> --------- -------- -------- -------- -------- -------- -------- -------- -------- EXPENDITURES ------------ Interest on Bonds $81,800 51,954 $21,024 5341 $38,892 SIll, 566 .500 SO $268,011 , Const ructi on Expenses 11,075 304,052 22,606 $331,733 --------- -------- -------- -------- -------- -------- -------- -------- -------- Tot al Expendi t ures 581,800 Sl,954 S21,024 S341 .38,892 $122,641 $304,552 522,606 $605,810 --------- -------- -------- -------- -------- -------- -------- -------- -------- Net Increase ( Decrease) in Fund Bal ance 5311,171 .4,265 513,191 S14,138 .220,992 .519,103 (SlOl,800) ($22,606) $1,080,260 Fund Balance - .January 1 (322,510) (33,883) (510,331) (5,063) (652,016) (1, OU, 532) ('1,840) .0 (2,625,115) --------- -------- -------- -------- -------- -------- ---------- ---------- ---------- Fund Balance - Deceeer 31 ($U,339) ($29,618) (.436,534) $9,615 (S431,024) (S513,829) (SI09,640) (522,606)($1,544,915) --------- -------- -------- -------- -------- ---------- ---------- ---------- ---------- --------- -------- -------- -------- -------- ---------- ---------- ---------- ---------- I I I I I I I I I I I I~ I I I I I I I CITY OF SHOREWOOD WATER UfILITY FUND cn1PARATIVE BALANCE SHEET December 31, 1986, 1985 Year Ended December 31 1986 1985 ASSETS CURRENT ASSETS Cash and Investments Accounts Receivable Taxes Receivable - Current Prepaids Other Total Current Assets ($11,358) ($5,485) 19,723 10,578 230 2,855 3,090 4,365 1,659 1,830 -------- -------- $13,344 $14,143 -------- -------- $13,303 $13,303. ~l~a-~ 931,810 /(I!~? ,923)) (159,620 ). -------- -------- $757,190 $785,493. -------- -------- $770,534 $799,636 -------- -------- -------- -------- FIXED ASSETS (Note 1) Equipnent Assets Contributed Less Allowance for Depreciation Total Fixed Assets Total Assets LIABILITIES AND FUND ~ITY CURRENT LIABILITIES Accounts Payable Accrued Liabilities Current Portion Long Term Debt Total Current Liabilities $4,245 $2,948 23 233 10,000 10,000 . -------- -------- $14,268 $13,181 -------- -------- $105,000 $115,000 -------- -------- $931,810 $931,810 (280,544) (260,355) -------- -------- $651,266 $671,455- -------- -------- $770,534 $799,636 -------- -------- -------- -------- LONG TERM LIABILITIES Bonds Payable - Non Current Portion RETAINED EARNINGS Contributions in Aid of Construction Retained Earnings (Deficit) Total Fund Equity Total Liabilities and Fund Equity - 29 - I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD WATER trrILITY FUND c:a1PARATIVE STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS For the Years Ended December 31, 1986, 1985 Year Ended December 31 1986 1985 OPERATING REVENUE Metered Water Sales Total Operating Expenses $49,413 $33,790 -------- -------- $2,259 $986 316 165 4,983 1,582 147 296 2 , 4J56 67 --f42P 0 1,Q96 3,200 8;690 7,589 20 , 174 24 , 129 75 40 515 470 1O,563c 9,001 4,537 2,195 2,365 1,596 534 1,835 28,303 28,303 -------- -------- $87,398 $81,454 -------- -------- ($37,985) ($47,664) -------- -------- $16,798 $33,137 3,092 5,952 735 1,536 4,280 2,390 3,462 3,000 1,275 675 29,442', -------- -------- $29,642 $76,132 -------- -------- $1,322 $838 10,524 10,898 -------- -------- $11,846 $11,736 -------- -------- ($20,189) $16,732 (260,355) (277,087) -------- -------- ($280,544) ($260,355) -------- -------- -------- -------- Less: Operating Expenses Salaries ~ployee Benefits Insurance Office Expenses Supplies Small Tools City Buildings Expense Allocation Electricity Contracted Services Travel, Conference, Mileage Independent Audit Purchases - Water Purchase of Water Meters Equipnent Maintenance Miscellaneous Depreciation OPERATING INCXl'1E (LOSS) ADD NON OPERATING REVENUE General Property Taxes Homestead Credit Fiscal Disparities Sale of Meters Connection Charges Other Transfer from Other Funds Total Non Operating Revenue LESS NON OPERATING EXPENSES Interest - Interfund Loan Interest on Bonds Total Non Operating Expenses NET INCXl'1E (LOSS) roo RETAINED EARNINGS RETAINED EARNINGS, January 1 RETAINED EARNINGS, December 31 - 30 - I I I I I I I I I I I I I I I I I I I CITY OF. SHOREW<X)D WATER UTILITY FUND ca1PARATIVE STATEMENT OF CHANGES IN FINANCIAL POSITION For the Years Ended December 31, 1986, 1985 SOURCES OF FINANCIAL RESOURCES Operations Net Income for the Year Add: Expenses not requiring current outlay of resources Depreciation Total Resources Provided USES OF FINANCIAL RESOURCES Reduction of Long Tenn Debt Total Uses of Financial Resources Net Increase (Decrease) in Financial Resources ca1PONENT ELEMENTS OF INCREASE (DECREASE) IN WORKING CAPITAL Cash and Temporary Investments Accounts Receivable Taxes Receivable - Current Prepa.ids Other Accounts Payable Accrued Liabilities Current Portion Long Term Debt Net Increase (Decrease) in Working Capital - 31 - Year Ended December 31 1986 1985 ($20,189) $16,732 28,303 28,303 -------- -------- $8, 114 $45,035 -------- -------- $10,000 $10,000 -------- -------- $10,000 $10,000 -------- -------- ($1,886) $35,035 ------- ------- ------- ------- ($5,873) $39,372 9,145 (8,028) (2,625) 2 , 855 . (1,275) 4,365 (171) (681) (1,297 ) 143 /)~O 210 2,009 \ i) l ( (5,000) -------- -------- ($1,886) $35,035 -------- -------- -------- -------- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD SANITARY SEWER l1l'ILITY FUND CGiPARATIVE BALANCE SHEEr December 31, 1986, 1985 Year Ended December 31 1986 1985 ASSETS CURRENT ASSETS Cash and Temporary Investments Accounts Receivable Due from other Funds Accrued Interest Prepaids Total Assets $271,139 $213,372 99,563 100,293 20,000 2,026 3,060 10,029 23,527. -------- -------- $382,757 $360,252 -------- -------- $19 h434 $19,434- 353,540 353,540 (108,163 ) (89,431} -------- -------- $264,811 $283,543 -------- -------- $647,568 $643,795 -------- -------- -------- -------- Total Current Assets FIXED ASSETS Equipnent Assets Contributed Less Allowance for Depreciation Total Fixed Assets LIABILITIES AND RETAINED EARNINGS --------------------------------- CURRENT LIABILITIES Accounts Payable Accrued Liabilities Current Portion Long-Term Debt Total Fund Equity $8,970 $3,220- 72 0 5,799 5 , 483-:,' -------- -------- $14,841 $8,703 -------- -------- $6,137 $11,93.7 -------- -------- $353,540 $353,540 273,050 269,615 -------- -------- $626,590 $623,155 -------- -------- $647,568 $643,795 -------- -------- -------- -------- Total Current Liabilities LONG TERM INDEBTEDNESS Contracts Payable FUND EQUITY Contributions in Aid to Construction Retained Earnings - Unreserved Total Liabilities and Fund Equity - 32 - I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD SANITARY SEWER Ul'ILITY FUND cx:>>1PARATIVE STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS For the Years Ended December 31, 1986, 1985 Year Ended December 31 1986 1985 OPERATING REVENUE Sewer Usage Total Operating Expenses $285,261 $292,109 -------- -------- $7,9,17 $4,392.. 1 , 077 539" 5,555 2,665 442 1,012 1,294 1,502' 1,275 0 4,970 4 , 148 24,032 22,724 225 202 1,495 1,405 224,930 245,748,. 18,732 18,732. 6,914 2,829 1,Q01 210 750 1,000, , -------- -------- $300,609 $307,108 -------- -------- ($15, 3~,8)' {$14,999) -------." -------- Less: Operating Expenses Salaries and Wages Employee Benefits Insurance Office Expense Supplies, Motor Fuels Small Tools Electricity - Lift Stations Contracted Services Education Independent Audit Sewer Use Charge - Metro Waste Control ConInission Depreciation Equipnent Maintenance Miscellaneous Financial OPERATING INC<:X-1E (LOSS) ADD NON OPERATING REVENUE Sewer Permits Disposal Fees Refunds - Reimbursements Metro Sewer SAC Charges Interest on Investments Transfer from Other Funds -- $6,975 $3,900 500 1,223 851 36,57.5 20,400 14,867 19,488 1,500 -------- -------- $59,580 $46,639 -------- -------- $28,942 35,222 18,513 5,575 0 -------- -------- $40,797 $47,455 -------- -------- $3,435 ($15,815) -------- -------- 269,615 285,430 -------- -------- $273,050 $269,615 -------- -------- -------- -------- Total Non Operating Revenue OTHER EXPENSES Transfer to Water Fund Metro Sewer SAC Charges Other Improvements Total Other Expenses NET INcn-m ro RETAINED EARNINGS RETAINED EARNINGS, January 1 RETAINED EARNINGS, December 31 - 33 - I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD SANITARY SEWER U1'ILITY FUND CXX1PARATIVE STATEMENT OF' CHANGES IN FINANCIAL R>SITION For the Years Ended December 31, 1986, 1985 Year Ended December 31 1986 1985 SOURCES OF FINANCIAL RESOURCES Net Income for the Year Add: Items not requiring current outlay of resources Depreciation Total Resources Provided $3,435 $0 18,732 18,732 -------- -------- $22,167 $18,732 -------- -------- $0 $15,815' 5,800 5,483, -------- -------- $5,800 $21,298 -------- -------- $16,367 ($2,566) ------- ------- ------- ------- USES OF FINANCIAL RESOURCES Net Loss for Year Retirement of Long Term Debt Total Use of Financial Resources Net Increase (Decrease) in Working Capital C<X1PONENT ELEMENTS OF INCREASE (DECREASE) IN l<<>RKING CAPITAL Net Increase (Decrease) in Working Capital $57,767 ($78,975) (730) 24,325 ( 33 , 498.) 42,259 (1 , 034 ) (122) (5,750) 9,824 (72) 421 (316) (298) -------- -------- $16,367 ($2,566) -------- -------- -------- -------- Cash and Temporary Investments Accounts Receivable other Accrued Interest Accounts Payable Accrued Liabilities Current Portion Long-Term Indebtedness - 34 - I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD LIQUJR FUND ca1PARATIVE BALANCE SHEET December 31, 1986, 1985 Year Ended December 31 1986 1985 ASSETS CURRENT ASSETS Cash and Investments Accounts Receivable Inventory Liquor Wine Beer Miscellaneous Prepaids Total CUrrent Assets $54,428 $55,068 275 0 63,343 63 , 77 4 43,448 38,230 18,893 15,314 4,445 6,650 14,945 11,193 -------- -------- $199,777 $190,229 -------- -------- $29,088 $25,695 3,955 3,955 (28,871 ) ( 27 ,623) . -------- -------- $4,172 $2,027 -------- -------- $203,949 $192,256 -------- -------- -------- -------- FIXED ASSETS Furni ture and Fixtures Leasehold Improvements Less Allowance for Depreciation Total Fixed Assets Total Assets LIABILITIES AND RETAINED EARNINGS CURRENT LIABILITIES Accmmts Payable Accrued Liabilities Total CUrrent Liabilities $31,256 ' $37,479. ! 13,166 11 , 234 -------- -------- $44,422 $48,713 -------- -------- $159,527 $143,543 -------- -------- $203,949 $192,256 -------- -------- -------- -------- RETAINED EARNINGS Total Liabilities and Equity - 35 - I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD LIQOOR FUND c:a1PARATIVE STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS For the Years Ended December 31, 1986, 1985 Net Operating Income (Loss) Year Ended December 31 1986 1985 $980,930 $859,981 786,360 688,192 -------- -------- $194,570 $171,789 -------- -------- $46,766 $42,835 41,035 36,751 10,727 4,793 762 175 2,779 1,162 184 392. 794 1,300 2,110 2 , 000 . 3,622 3,189 187 233 10,808 11,775 11,812 5,464.. 959 2,120 2,892 3,658 32,739 32,173 257 175 5,358 4,745 1,248 1,152 -------- -------- $175,039 $154,092 -------- -------- $19,531 $17,697 -------- -------- $1,453 $1,169 (5,000) -------- -------- ($3,547) $1 , 169 -------- -------- $15,984 $18,866 143,543 124,677 -------- -------- $159,527 $143,543 -------- -------- -------- -------- SALES AND COST OF SALES Sales Cost of Sales Gross Profit GENERAL AND AIl1INISTRATIVE EXPENSE Salaries, Regular Salaries, Part Time Employee Benefits Supplies, Office Supplies, R & M Supplies, General Professional Services Audit Contractual Meetings, Schools & Miles Utilities Insurance Miscellaneous Bookkeeping Rent Dues & Subscriptions Advertising & Promotions Depreciation Total General and Administrative OTHER IN<D1E, EXPENSES Interest Transfers to Other Funds Total Other Income Expenses Net Income (Loss) RETAINED EARNINGS, January 1 RETAINED EARNINGS, December 31 - 36 - I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD LIQUOR FUND <::<M>ARATIVE STATEl'1ENT OF CHANGES IN FINANCIAL POSITION For the Years Ended December 31, 1986, 1985 Year Ended December 31 1986 1985 SOURCES OF FINANCIAL RESOURCES Net Income for the Year Add: Items not requiring current outlay of resources Depreciation Total Resources Provided $15,984 $18,866 1,248 1,152 -------- -------- $17 , 232 $20,018 -------- -------- $0 $0 3,393 550 -------- -------- $3,393 $550 -------- -------- $13,839 $19,468 ------- ------- ------- ------- USES OF FINANCIAL RESOURCES Net Loss for Year Purchase of Equipnent Total Use of Financial Resources Net Increase (Decrease) in Working Capital ca-1PONENT ELEMENTS OF INCREASE (DECREASE) IN WORKING CAPITAL Cash and Investments Receivables and Prepaids Inventories Accounts Payable Accrued Liabilities ($640) 4,027 6,161 6,223 (1,932) ($16,515) 11 , 193 17,775 7,379 (364) Net Increase (Decrease) in Working Capital $13,839 $19,468 -------- -------- -------- -------- - 37 - I I CITY OF SHOREWOOD MAYOR Robert Rascop COUNCI L Jan Haugen Tad Shaw Kristi Stover Robert Gagne ADMINISTRATOR Daniel J. Vogt I I 5755 COUNTRY CLUB ROAD . SHOREWOOD, MINNESOTA 55331 . (612) 474-3236 I I I MEMO TO: LIQUOR CO~lliITTEE: KRISTI STOVER, BOB GAGNE FROM: FINANCE DIRECTOR, EVELYN BECK RE: LIQUOR STORE FINANCIAL STATEMENTS - 4TH QUARTER, 1986 DATE: 01/22/87 I Please find enclosed for your review, the fourth quarter 1986 financial statements for the Liquor Stores. I The combined net income from operations is $18,956, an increase of $1,260 over 1985. Following is a summary of major items comparing 1985 to 1986 for both stores: I I Sales increased over 1985 by Cost of Sales increased by For an increased gross profit of Gross margin decreased from 21.3% to 19.8% or $120,948 98,167 $ 22,781 1.5% I Expenses: Personal Services increased Supplies increased Other Charges increased (major item is insurance) Total expenses increased $ 10,916 1,996 8,609 $ 21,521 $ 1,260 I I For a net income increase over 1985 of I The categories of other income and other expense include non operational items such as interest income and a budgeted transfer of $5,000 in 1986. I cc: Dan Vogt, Administrator Bill Josephson, Liquor Store Manager I P.S. Please note that a draft of financial statements for all other funds will be available this week. However, because some major expense and revenue items are not yet available, I will not have a final statement for you for approximately 2 weeks. I I ETB/kgs A Residential Community on Lake Minnetonka's South Shore I I I I I I I I I ALAN W. MATTHIAS JOHN M. ROEBKE DUANE A. EBERT DEAN R. DALEN I I I I I I I I I I MATTHIAS, ROEBKE & EBERT CERTIFIED PUBLIC ACCOUNTANTS 540 EAST FIRST P.O. BOll 155 WACONIA. MINNESOTA 55387 January 22, 1987 City of Shorewood Li quor Stores Excelsior, MN 55331 We have compiled the accompanying balance sheet of Shore~JOod Liquors as of December 31, 1986, and the re 1 a ted statements of income for the period then ended, in accordance with standards established by the American Institute of Certified Public Accountants. A compilation is limited to presenting in the form of financial statements information that is the representation of management. We have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or any other form of assurance on them. r~anagement has electea to omit substantially all of the disclosures required, and a statement of changes in financial position required by generally accepted accounting principles. If the omitted disclosures were included in the financial statements, they might influence the user's conclusions about the City's financial position, results of operations, and changes in financial position. Accordingly, these financial statements are not designed for those who are not informed about such matters. AREA CODE 812 LOCAL 442-4408 METRO 448-1192 NORWOOD OFFICE CITIZENS STATE BANK BLDG. CHASKA OFFICE HAZELTINE GATES BLDG. /7~ JLJ-14- t ! r~... <I: .:::. ~ o 0 o u:r u:r 3UJUJ UJ 0:: Z 0:: 0 Z O~"'" ::c: u:r x: u:r 0::':::' I.J..OO 0:::;10 Cl 3 >- ..... 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I I I I I I I I I I I I I I I I I I I SOUTH LAKE MINNETONKA PUBLIC SAFETY DEPARTMENT AUDITED FINANCIAL STATEMENTS December 31, 1986 I I I I I I I I I I I I I I I I I I I I N D E X Auditors' Report 3 Exhibit "A" - Combined Balance Sheet - All Fund Types and Account Groups 4 Exhibit "A-1" - Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund 5 Notes to Financial Statements 7 Schedule 1 - Officials (Unaudited) 11 Schedule 2 - Insurance Coverage (Unaudited) 12 I I I I I I I I I I I I I I I I I I I :F~ ~, /!)J~ &: ~ JU: CERTIFIED PUBLIC ACCOUNTANTS TONKA BUILDING EXCELSIOR. MINNESOTA 55331 612/474-8826 The Coordinating Committee, The South Lake Minnetonka Public Safety Department Excelsior, Minnesota 55331 We have examined the combined balance sheet of the General Fund and the General Fixed Assets Account Group of the South Lake Minnetonka Public Safety Department as of December 31, 1986, and the related statement of revenues, expenditures and changes in fund balance for the year then ended. Our examination was made in accordance with generally accepted auditing standards and, accord- ingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the aforementioned financial statements present fairly the financial position of the General Fund and General Fixed Assets Account Group of the South Lake Minnetonka Public Safety Department at December 31, 1986 and the results of its operations for ~he year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. The accompanying supplemental information is not necessary for a fair presentation of the financial statements, but is presented as additional data. This supplemental information is unaudited. FROEHLING, ANDERSON, PLOWMAN & EGNELL, LTD. ~_.~..p~v~bz,. Certifi .Public Accountants Excelsior, Minnesota January 21, 1987 SOUTH LAKE MINNETONKA PUBLIC SAFETY DEPARTMENT COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUPS December 31, 1986 (With Comparative Totals for December 31, 1985) ASSETS Cash and investments (Note 1) Checking account deficit Savings accounts Savings certificates Investments Accounts receivable Interest receivable Fixed assets (Note 2) LIABILITIES AND FUND EQUITY LIABILITIES Accounts payable Accrued payroll FUND EQUITY Fund balance Appropriated for vacation and sick leave (Note 4) Appropriated for building fund (Note 5) Unappropriated Contributed capital Investment in general fixed assets (Note 2) Governmental Fund Types General Fund ($340) 23,832 100,878 100,000 954 $225,324 $5,847 3,794 9,641 71,400 100,000 44,283 215,683 $225,324 ------- - ------ The notes to the financial statements are an integral part of this statement. Account Groups General Fixed Assets $194,958 $194,958 ------- ------- $2,425 192,533 194,958 $194,958 ------- ------- I I I I I I I I I I I I I I I I I I I I Exhibit "A" I I Total I (Memorandum Only) -------------------- 1986 1985 I I ($340) ($1,183) 23,832 4,039 I 100,878 200,000 100,000 14,241 954 1,342 I 194,958 161,387 - ------ ------- $420,282 $379,826 I - ------ ------- - ------ ------- I $5,847 $7,480 I 3,794 ------- ------- 9,641 7,480 I I 71,400 58,000 I 100,000 100,000 44,283 52,959 2,425 2,425 I 192,533 158,962 - ------ ------- 410,641 372,346 I - ------ ------- $420,282 $379,826 ------- ======= ------- I I I -4- SOUTH LAKE MINNETONKA PUBLIC SAFETY DEPARTMENT STATEMENT OF REVENUESt EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL GENERAL FUND Year Ended December 31t 1986 (With Comparative Figures for the Year Ended December 31, 1985) 1986 Budget Variance Favorable Actual (Unfavorable) REVENUES Assessments charged to municipalities City of Excelsior City of Greenwood City of Shorewood City of Tonka Bay $178,736 $178,736 57t451 57,451 287,254 287t254 114,902 114,902 - ------ ------- ------- 638,343 638t343 $ Hennepin County/State of Minnesota. Insurance premium tax 25tOOO 39,071 14,071 Juvenile officer grant 18,350 18,350 Civil defense 2,000 4,814 2t814 Training reimbursement 1,500 1,683 183 Municipalities Park patrol 7,500 4t093 (3,407) Officer court time 5,250 2,984 (2,266) Part time salaries Interest earned 12,500 16,493 3,993 Donations 1t25O 1,250 Sale of vehicles Miscellaneous income 475 1,418 943 ------- ------- ------- Total revenue $710,918 $728,499 $17,581 - ------ ------- ------- The notes to the financial statements are an integral part of this statement. I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I Exhibit "A-1" Page 1 of 2 1985 Budget Variance Favorable Actual (Unfavorable) $167,026 $167,026 53,687 53,687 268,434 268,434 107,373 107,373 - ------ ------- ------- 596,520 596,520 $ 25,000 32,142 7,142 6,410 6,410 1,956 1,956 5,000 3,513 (1,487) 5,000 1.,115 (885) 2,341 2,341 7,500 18,560 11,060 1,304 1,304 1,500 4,590 3,090 1,960 1,552 (408 ) - ------ ------- ------- $642,480 $673,003 $30,523 - ------ ------- ------- -5- SOUTH LAKE MINNETONKA PUBLIC SAFETY DEPARTMENT STATEMENT OF REVENUESt EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL GENERAL FUND Year Ended December 31, 1986 (With Comparative Figures for the Year Ended December 31t 1985) Budget EXPENDITURES Salaries Regular Overtime Part time Professional services Communications $448t650 23,500 15t300 6tOOO 6tOOO 2t500 8tOOO Printing and publishing Utilities Travelt conferences and schools Maintenance Care of persons 4t500 11tOOO 100 Cleaning and waste removal Contractual services Office supplies Small tools Motor fuels Uniforms 1t500 1tOOO 3t100 150 22t500 3t500 General and cleaning supplies Rent Insuranc.e Subscriptions and memberships Pensions and benefits 5t350 7tOOO 52t100 550 89t950 Fixed asset expenditures Building improvements Furniture and equipment Vehicles Miscellaneous expense 1t500 20t550 14tOOO 500 Total expenditures 748t800 EXCESS OF REVENUE OVER EXPENDITURES ($37t882) ------- - ------ BEGINNING FUND BALANCE ENDING FUND BALANCE 1986 Variance Favorable ,Actual (Unfavorable) $446t282 23t477 9,958 4t178 6t952 2t393 7t844 $2t368 23 5t342 It822 (952) 107 156 4t963 11 tOOl 194 (463) (1 ) (94) 1t520 450 2t739 (20) 550 361 150 10t526 (595) llt974 4t095 6t522 6t382 50t182 (lt172) 618 1t918 547 85t724 3 4t226 21t649 14t749 1t500 (lt099) (749) 500 723t775 25t025 4t724 $42t606 ------- ------- 210t959 $215,683 ------- ------- The notes to the financial statements are an integral part of this statement. I I I I I I I I I I I I I I I I I I I I Exhibit "A-1" I Page 2 of 2 I 1985 I --------------------------------- Variance Favorable I Budget Actual (Unfavorable) ------ ------ ------------- I $403,200 $403,225 ($25) 19,900 20,513 (613) 14,700 11,695 3,005 6,000 5,104 896 I 6,000 4,348 1,652 3,000 1,772 1,228 I 7,500 7,537 (37) 4,500 4,748 (248) I 12,000 7,527 4,473 100 35 65 I 1,500 1,454 46 2,000 2,000 3,100 2,608 492 I 150 6 144 21,400 17,359 4,041 3,500 3,981 (481) I 5,100 6,270 (1,170) 7,000 6,422 578 29,955 43,851 (13,896) I 550 536 14 83,125 79,435 3,690 I 1,500 1,500 I 12,750 13,377 (627) 12,450 18,684 (6,234) 500 500 - ------ ------- ------- I 661,480 660,487 993 ------- ------- ------- I ($19,000) 12,516 $31,516 = ====== ------- ------- 198,443 ------- I $210,959 ======= -6- I I I I I I I I I I I I I I I I I I I I SOUTH LAKE MINNETONKA PUBLIC SAFETY DEPARTMENT NOTES TO FINANCIAL STATEMENTS December 31, 1986 Note 1 - Summary of Significant Accounting Policies The accounting policies of the South Lake Minnetonka Public Safety Department conform to generally accepted accounting principles. The following is a summary of the significant accounting policies. Basis of accounting - The modified accrual basis of accounting is followed by all funds, whereby revenue is recorded when received or susceptible to accrual (measurable and available), and expenditures are recorded as incurred. Under this method, items such as insurance and inventory are expensed as incurred. Cash and Investments - Cash available, in excess of immediate needs, is invested in savings accounts, savings certificates and other investments. Interest income is recognized on an accrual basis. Investments are carried at the lower of cost or market, with market approximating cost. General Fixed Assets - General fixed assets purchased are recorded as expenditures at the time of purchase. Such assets are capitalized at cost in the general fixed assets group of accounts. Donated assets are capitalized at the estimated fair market value at date of donation. Depreciation - Depreciation has not been provided on general fixed assets, in accordance with generally accepted accounting principles as applied to governmental units. Total Columns on the Combined Balance Sheet - Total columns are captioned memorandum only to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position in conformity with generally accepted accounting principles. Budgetary Information - Budgetary information represents the approved budget prepared on a modified accrual basis, as amended. -7- 1 1 1 I I 1 I I I I, 1 I I I 1 I 1 I I SOUTH LAKE MINNETONKA PUBLIC SAFETY DEPARTMENT NOTES TO FINANCIAL STATEMENTS December 31, 1986 Note 2 - General Fixed Assets Transactions in General Fixed Assets for the year ended December 31, 1986 are detailed below: January 1, 1986 December 31, Disposals 1986 Additions Building improvements Transportation equipment Furniture and other equipment $18,250 $18,250 90,239 $14,749 104,988 21,649 $2,827 71,720 52,898 $161,387 $36,398 $2,827 $194,958 ------- ------- ------ ------ ------- -.....----- ------ ------ Note 3 - Retirement Plans The Department participates in a state-wide contributory pension plan under the Public Employees' Retirement Association, which covers all employees except certain temporary or seasonal employees. The Department's contributions for pension costs were $53,745 and $49,231 for the years ended December 31, 1986 and 1985, respectively. Under existing Minnesota law, the Department has no future contingent obligations or commitments to the plan or its participants except to make continuing contributions as determined from time to time by the State Legislature. The Department received aid totaling $39,071 from the State of Minnesota through Hennepin County for retirement benefits in 1986. These monies are restricted in use and must be applied against retirement benefits paid to the Public Employees' Retirement Association. The reimbursement and expenditure are shown separately as items of revenue and expense in the financial statements. During 1986, the Department adopted a deferred compensation plan under Section 457 of the Internal Revenue Code. Employees have the option of contributing to the plan, subject to limitations established by the Internal Revenue Code. The Department does not contribute to the fund, and does not have any future contingent obligations or commitments to the plan. -8- I I I I I I I I I I I I I I I I I I I SOUTH LAKE MINNETONKA PUBLIC SAFETY DEPARTMENT NOTES TO FINANCIAL STATEMENTS December 31, 1986 Note 4 - Vacation, Sick Leave and Compensatory Time Vacation pay is provided to all full-time employees based on the length of employment. Employees may carry unused vacation days over to subsequent years. Sick leave may be accumulated by an employee with no maximum accumulation. Upon severance of employment, the employee is paid for accumulated sick leave based on 25 percent of the first 90 days accumulated, plus accumulated vacation and compensatory time. Police officers and administrative employees are allowed to accrue extra time-off rather than payment, limited to a maximum of 60 hours. Vacation, sick leave and compensatory time off are charged to expense in the period paid. The Department has appropriated $71,400 and $58,000 for vacation, sick leave and compensatory time as of December 31, 1986 and 1985 respectively. Note 5 - Building Fund The Department is considering permanent relocation to a new head- quarters facility. No formal plans have been. adopted as of the date of this report. The Coordinating Committee has approved an appropriation of the general fund balance in the amount of $100,000 for this purpose. Note 6 - Leases The Department leases facilities from the Cities of Shorewood and Excelsior on a monthly basis. Rent expense for these facilities was $5,400 annually for the years ended December 31, 1986 and 1985. In addition, the Department leases certain office equipment on a monthly basis. Note 7 - Security for Bank Deposits Amounts on deposit with banks are fully insured by the Federal Deposit Insurance Corporation and the Federal Savings and Loan Insurance Corporation. -9- I I I I I I I I I I I I I I I I I I I SOUTH LAKE MINNETONKA PUBLIC SAFETY DEPARTMENT SUPPLEMENTAL INFORMATION December 31, 1986 I I I I I I I I I I I I I I I I I I I Schedule 1 SOUTH LAKE MINNETONKA PUBLIC SAFETY DEPARTMENT OFFICIALS - Unaudited - Year Ended December 31, 1986 Member Community Representatives Chairperson - Ruth Sherman - Tonka Bay Committee Members Richard Knapp - Excelsior Robert Rascop - Shorewood Alan Albrecht - Greenwood Appointed Police Chief - Richard Young Administrative Clerk - Marietta Korpi Attorney - Frank Kelly Year End~d December 31, 1987 Member Community Representatives Chairperson - James R. Olds, Jr. - Excelsior Committee Members Robert Rascop Ruth Sherman Alan Albrecht - Shorewood - Tonka Bay - Greenwood Appointed Police Chief - Richard Young Administrative Clerk - Marietta Korpi Attorney - Frank Kelly -11- I I I I I I I I I I I I I I I I I I I SOUTH LAKE MINNETONKA PUBLIC SAFETY INSURANCE COVERAGE - UNAUDITED - December 31, 1986 Package policy on property Building Building contents Mobile equipment General liability - bodily injury and property damage Each occurrence Aggregate limit Commercial umbrella liability Automotive liability Workers' compensation Law enforcement liabiity Each occurrence Aggregate total Professional liability Each occurrence Aggregate total Surety bond Marietta Korpi - Administrative Clerk Schedule 2 DEPARTMENT $48,000 59,889 600,000 600,000 1,000,000 600,000 Statutory 500,000 1,500,000 500,000 1,500,000 10,000 -12- 1J/cl {tJ /iof/ JAN 2 / /988 SOUTH LAKE MINNETONKA PUBLIC SAFETY DEPARTMENT 143 Oak Street EXCELSIOR, MINNESOTA 55331 tiE.liQ.RAliUll.ti Coordinating Committee City Administrators Chief YOu~ January 5, 19~ 1987 Time Reports TO: FROM: DATE: RE: The 1987 time reports have been compiled from the statistics that each officer has been placing on their time sheet. The results are listed below. The 1986 and 1987 statistics will be used to comptlte how much each city contributes to our budget. For the 1989 budget they will be used for 40% of the formula. The other 60% will be based on the past fixed formula. 1987 Excelsior Greenwood Shorewood Tonka Bay Current Levels Excelsior Greenwood Shorewood Tonka Bay 34.5% 8.7% 39.8% 17.0% 29.1% 8.9% 44.4% 17.6% 1989 Contribution Levels Excelsior Greenwood Shorewood Tonka Bay 30.4% 8.8% 43.4% 17.4%