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1991 - Comp. Annual Financial Report I I I I I I I I I I . I I I I ~I Ii I I CITY OFSHOREWOOD, MINNESOTA COMPREHENSIVE ANNUAl, FINANCIAL REPORT F'OR THE Yf;A~1 ENDED DECEl\IBER 3t, 1991 JAMES C. HURM, CITY ADMINISTRATOR ',: , ,~/ REPORT PREPARED BY:DE;PAR1'MENT OF FINANCE AL~ J~ ROL~",K, FINANCE DIRECTOR/TREASURER MEMBER OFrGOVEJlNMENr FINANCE OFFICERS ASSOCIATION>>> OF' TIlE UNITED STATES ANJ}CANADA I I I I I I I I I I I I I I I I I I I AHX) March 11, 1992 CERTIFIED PuBLIC ACCOUNTANTS AND CoNSULTANTS Members of the City Council City of Shorewood Shorewood, Minnesota In planning and performing our audit of the general purpose financial statements of the City of Shorewood for the year ended December 31, 1991, we considered its internal control structure in order to determine our aUditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control structure. However, we noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the city's ability to record, process, summarize and report financial data consistent with the assertions of management in the financial statements. A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we noted the following reportable condition that we believe to be material weaknesses. Member of American Institute of Certified Public Accountants Private Companies Practice Section 115 EAST HICKORY STREET. SUITE JQ2 PO. BOX 3166 MANKAID. MINNESOD\ 56001.3166 (5071615.Z7Z7 FAX (507) 388-9139 104 EAST PEARL STREET PO. BOX H5 OWAlONNA, MINNESOTA 5506O<lJ.l5 (5071151.9136 FAX (50)) 15!.o794 1060 NOKlHLAND PLAZA 3800 WEST 80TIl STREET MINNEAPOus, MlNNESOY. 55131 (61Z183S-9090 FAX (612) 1l96-36lO I I I I I I I I I I I I I I I I I I I City of Shorewood March 11, 1992 Page Two APlX) ~ CERTlAED PuBlIC AccouNrANTS AND CoNSULTANTS Segreqation of Duties Our study and evaluation disclosed that because of the limited size of your office staff, your organization has limited segregation of duties. A good internal control structure contemplates an adequate segregation of duties so that no one individual handles a transaction from inception to completion. While we recognize that your organization is not large enough to permit an adequate segregation of duties in all respects, it is important, however., that you be aware of this condition. Other Matters The following are areas that came to our attention during the audit that we feel should be reviewed: Financial position and Results of Operations General Fund All general governmental functions of the City which are not accounted for in separate funds are included in the General Fund. Revenues and transfers for the General Fund for 1991 totaled $2,237,115, a decrease of $130,880 or 5.53% over 1990. Revenue Source 1991 General Property Taxes Intergovernmental Revenue Charges for Services Licenses and Permits Fines Interest Other Revenue Transfers from Other Funds $1 627 874 153 681 3 635 168 560 101 200 101 333 55 832 25 000 Total Revenue and Transfers $2 237 115 Percent of Total 1990 Increase (Decrease) From 1990 72.77% $1 437 140 $ 190 734 6.87 .16 7.54 4.52 4.53 2.50 273 780 9 943 203 828 124 234 91 685 32 385 (120 099) (6 308) (35 268) (23 034) 9 648 23 447 1.11 195 000 (170 000) 100.00% $2 367 995 $(130 880) A shift in state funding of local government eliminated the City's local government aid entirely in 1990. In 1991, the state's funding was reduced again eliminating $66,971 from the City's allocation of Homestead and Agricultural Credit Aid. For 1991, the State's funding of the General Fund totalled only $137,426 or 6.2% of total revenue. I I I I I I I I I I I I I I I I I I I city of Shorewood March 11, 1992 Page Three AP[X) ~ CERTIAED PuBUC AcaxwrANTS AND CoNSULTANTS Expenditures and Transfers for the General Fund for 1991 totaled $2,241,781. This is an increase of 8.57% over the 1990 General Fund Expenditures and Transfers of $2,065,011. Percent Increase of (Decrease) Proqram 1991 Total 1990 From 1990 General Government $ 665 152 29.67% $ 616 929 $ 48 223 Public Safety Police 384 558 17.15 378 149 6 409 Fire 88 527 3.95 79 749 8 778 Other 75 258 3.36 74 760 498 Public Works 375 406 16.75 799 543 (424 137) Parks and Recreation 142 168 6.34 115 881 26 287 Operating Transfers to Other Funds 510 712 22.78 510 712 Total Expenditures and Transfers $2 241 781 100.00% $2 065 011 $176 770 capital outlay expenditures in the public works department accounted for much of the 1990 increase in expenditures. In 1991, the funds earmarked for various public works projects were transferred out of the General Fund to various capital projects funds. These separate funds have been established as part of the City's five year capital improvements planning. The 1991 transfers out also include $210,000 from 1990 which was designated also for projects. The fund balance in the General Fund designated for working capital is $1,126,793 which is an increase of $79,934 from the prior year. The amount designated for working capital is approximately 50% of the 1991 expenditures. A fund balance at year end in necessary to provide working capital to finance the subsequent year expenditures until major revenues are received five or six months into the year. The fund balance designated for working capital should be maintained at the 50% level. We recommend the City review its fund balance requirements and establish guidelines to determine its fund balance needs. Debt Service Funds In governmental accounting, the bonds to be paid from the resources of each debt service fund are not accounted for within the same fund. The following recap matches the assets of each debt service fund with the bonds payable at year end. I I I I I I I I I I I I I I I I I I I City of Shorewood March 11, 1992 Page Four AElX) ~ CERTIRED PuIluc A<XXJUNTANTS /\NO O:JNSULTANTS Fund Cash and Investments Total Assets Bonds Payable 1984 Improvement (1987 Refunding) Shorewood Oaks 1974 Sewer Improvement SE Water (1986 Improvement) 1991 Improvement and Refunding $536 717 816 534 39 463 568 311 $ 627 311 1 225 987 86 768 731 375 $615 000 955 000 60 000 725 000 301 900 785 458 960 000 In addition, a $31,000 improvement bond issue in 1991 will be financed through a ad valorem tax levied on the special taxing District #2. Proceeds of $271,000 from the 1991 Improvement and Refunding Bond issue will be used along with approximately $400,000 from the SE Water (1986 Improvement) to call the balance of the 1986 bonds on February 1, 1992. As the summary above indicates, each bond should have sufficient assets (cash and special assessments receivable) to finance the related bond issue. Capital Pro;ects Funds During 1991, various capital projects funds were established in connection with the City's five year capital improvements plan. Each year the CIP should be updated to reflect actual balances available at year end and changes in the City's plans and priorities. Enterprise Funds Liquor Fund The gross profit margin in each store increased in 1991. A brief comparison with prior years is as follows: Store I Store II 1991 1990 1991 1990 Sales $606 845 $525 807 $848 487 $776 680 Gross profit 131 725 113 340 176 498 150 744 Gross profit percentage 21. 71% 21. 56% 20.80% 19.41% Operating income $ 39 675 $ 27 481 $ 47 833 $ 32 029 In addition to reporting good results, the Liquor Fund had a cash balance of $302,262 at year end. I I I I I I I I I I I I I I I I I I I city of Shorewood March 11, 1992 Page Five AffX) ~ CER11AED PuIlUC ACXXIUNTANTS AND CoNSUlTANTS Water Fund A comparison of operations with the prior year follows: 1991 1990 Charges for services $149 088 $156 069 Permits, connection fees 23 481 36 613 Total revenue 172 569 192 682 Operating expenses, excluding depreciation 126 614 116 289 Operating income before depreciation $ 45 955 $ 76 393 The cash deficit in the Water Fund was eliminated in 1990. The fund has increased to a positive balance of $84,757 at December 31, 1991. The City must continue to increase the cash balance of this fund to provide for the major maintenance expenses which will be required periodically. Sewer Fund A comparison of operations with the prior year follows: Charges for services Permits and connection fees 1991 1990 $474 451 $447 521 6 500 8 400 480 951 455 921 393 194 346 015 $ 87 757 $109 906 Total revenue Operating expenses, excluding depreciation Operating income before depreciation Other Items certificate of Achievement The City will submit its 1991 financial report and participate in the Government Finance Officer's certificate of Achievement for Excellence in Financial Reporting. As is evident by the report, it has been significantly enhanced with the addition of the Introductory and Statistical sections of the report. The City's staff involved with this project should be commended for their efforts on this project. . . I I I I I I I I I I I I I I I I I I I .. City of Shorewood March 11, 1992 Page six AffX) ~ CamAED PuBuc Aa::ouNrANTS AND ~TANTS * * * * * This report is intended for the use of management and council. The comments and recommendations in the report are purely constructive in nature and should be read in this context. Our audit would not necessarily disclose all weaknesses in the system because it was based on selected tests of the accounting records and related data. If you have any questions or wish to discuss any of the items contained in this letter, please feel free to contact us at your convenience. We wish to thank you for the continued opportunity to be of service and for the courtesy and cooperation extended to us by your staff. Sincerely, ABDO, ABDO & EICK lttifi;{ A:=untants Ga:;tA. Groen, CPA Mi~~J~polis Office I APlX) ~ I CamAED PuBuc .AccouNTANTS AND O:lNsuLTANTS I I INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE BASED ON AN AUDIT OF THE GENERAL PURPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS I Honorable Mayor and City Council City of Shorewood Shorewood, Minnesota I I We have audited the general purpose financial statements of the City of Shorewood, Minnesota for the year ended December 31, 1991, and have issued our report thereon dated March 11, 1992. I We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. I Our audit was also conducted in accordance with the provisions of the Legal Compliance Audit Guide promulgated by the Legal Compliance Task Force pursuant to Minnesota Statutes. The Legal Compliance Audit Guide covers five main categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, and claims and disbursements. Our study included all of the listed categories. Compliance with laws, regulations, contracts and grants applicable to the City of Shorewood is the responsibility of the City's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the City's compliance with certain provisions of laws, regulations, contracts, and grants. However, our objective was not to provide an opinion on overall compliance with such provisions. I I I I The results of our tests indicate that, with respect to the items tested, the City of Shorewood complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the City had not complied, in all material respects, with those provisions. I This report is intended for the information of management and the State Auditor's Office. This restriction is not intended to limit the distribution of this report, which is a matter of public record. I rlUo,rJJJ.c!U I March 11, 1992 Minneapolis, Minnesota ABDO, ABDO & EICK Certified Public Accountants I I I .. I I I I I I I I I I I I I I I I I I I ,11,. APlX) ~ ORnAED PuBuc Aa:x:urrANTS IINO O:lNsut:rANTS INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL STRUCTURE BASED SOLELY ON A STUDY AND EVALUATION MADE AS A PART OF AN AUDIT OF THE GENERAL PURPOSE FINANCIAL STATEMENTS Honorable Mayor and City Council City of Shorewood Shorewood, Minnesota We have audited the general purpose financial statements of the City of Shorewood, Minnesota, as of and for the year ended December 31, 1991, and have issued our report thereon dated March 11, 1992. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. In planning and performing our audit of the general purpose financial statements of the City of Shorewood, Minnesota for the year ended December 31, 1991, we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on the internal control structure. The management of the City of Shorewood, Minnesota is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management 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 management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. For the purpose of this report, we have classified the significant internal control structure policies and procedures in the following categories: . Cash receipts . Cash disbursements . Payroll i"'''l ... . .. I I I I I I I I I I I I I I I I I I I Page Two APlX) ~ CamAED Pueuc AccouNTANTS AND CoNsulTANTS For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk. We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize and report financial data consistent with the assertions of management in the general purpose financial statements. Our study and evaluation disclosed that because of the limited size of your office staff, your organization has limited segregation of duties. A good system of internal control structure contemplates an adequate segregation of duties so that no one individual handles a transaction from inception to completion. While we recognize that your organization is not large enough to permit an adequate segregation of duties in all respects, it is important, however, that you be aware of this reportable condition. A material weakness is a reportable condition in which the design or operation of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. We believe that the reportable condition described above is a material weakness. We also noted other matters involving the internal control structure and its operation and we have reported to the management of the City of Shorewood in a separate letter dated March 11, 1992. This report is intended for the information of management and the State Auditor's office. This restriction is not intended to limit the distribution of this report, which is a matter of public record. auo, ~ t:U March 11, 1992 Minneapolis, Minnesota ABDO, ABDO & EICK Certified Public Accountants I I I I I I I , I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA TABLE OF CONTENTS DECEMBER 31, 1991 I. INTRODUCTORY SECTION Elected and Appointed Officials Organizational Chart Letter of Transmittal II. FINANCIAL SECTION Independent Auditor's Report General Purpose Financial Statements Combined Balance Sheet - All Fund Types and Account Groups Combined Statement of Revenue, Expenditures and Changes in Fund Balance - All Governmental Fund Types Statement of Revenue, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund Combined Statement of Revenue, Expenses and Changes in Retained Earnings - All Proprietary Fund Types Combined Statement of Cash Flows - All Proprietary Fund Types Notes to Financial Statements Combinina and Individual Fund and Account Group Financial Statements and Schedules General Fund Comparative Balance Sheet Statement of Revenue, Expenditures and Changes in Fund Balance - Budget and Actual Debt Service Funds Combining Balance Sheet Combining Statement of Revenue, Expenditures and Changes in Fund Balance Capital Projects Funds Combining Balance Sheet Combining Statement of Revenue, Expenditures and Changes in Fund Balance Enterprise Funds Combining Balance Sheet Combining Statement of Revenue, Expenses and Changes in Retained Earnings Combining Statement of Cash Flows Water Fund comparative Balance Sheet Comparative Statement of Revenue, Expenses and Changes in Retained Earnings Comparative Statement of Cash Flows Sewer Fund Comparative Balance Sheet Comparative Statement of Revenue, Expenses and Changes in Retained Earnings Comparative Statement of Cash Flows Exhibit Paae I II - IX 1 2 2 3 4 3 4 5 5 6 7 - 22 A-I 23 A-2 24 - 28 B-1 29 B-2 30 C-l 31 C-2 32 0-1 33 0-2 34 0-3 35 0-4 36 0-5 37 0-6 38 0-7 39 0-8 40 0-9 41 CITY OF SHOREWOOD, MINNESOTA TABLE OF CONTENTS DECEMBER 31, 1991 Liquor Fund Comparative Balance Sheet Comparative Statement of Revenue, Expenses and Changes in Retained Earnings Comparative Statement of Cash Flows Agency Funds Statement of Changes in Assets and Liabilities General Fixed Asset Account Group Comparative Schedule of General Fixed Assets - by source Schedule of General Fixed Assets - by function and activity Schedule of Changes in General Fixed Assets - by function General Long-term Debt Account Group Comparative Statement of General Long-term Debt Schedule of Bonds Payable Schedule of Debt Service Requirements III. STATISTICAL SECTION General Fund Expenditures and Other Uses by Function General Fund Revenue and Other Sources by Source Property Tax Levies and Collections Assessed Valuation, Tax Levies and Mill Rates Property Tax Mill Rates/Tax Capacity Rates - All Overlapping Governments Principal Taxpayers Special Assessment Levies and Collections Computation of Legal Debt Margin Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt per Capita Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures Computation of Direct and Overlapping Debt Revenue Bond Coverage Property Value, Construction and Bank Deposits Miscellaneous Statistics Exhibit D-10 D-11 D-12 E-1 F-1 F-2 F-3 G-1 H-1 I-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Paqe I I I 42 43 44 I 45 I I I 46 47 48 49 , I I 50 51 52 53 54 55 56 57 58 59 I 60 I 61 62 63 64 65 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 CITY OF SHOREWOOD, MINNESOTiA ' SECTION. I INTRODUCTORY SECTION Barbara Brancel Rbbert Gagne Jr. Kristi Stover Robert Daugher~y Da~iel Lewis . Appointed Officials James C. BurIn Alan J. Rolek Term \ Expires I I , I I;" I CITYO~ SHOREWOOD: MINNESOT~ ELECTED>ANP)APPOINT~D OFFICIAL~ DECEMBER 31, 19~1 Mayor Council Member Council Member Council Member .Council Member 1~92 1992 1992 1994 1994 I I I I City AqrninistratQr Finance Director/Treasurer I I I , I I I I I il I I -------.- .. . ..., ..~-_.. - - _..~ -.. - ORGANIZATIONAL CHART - CITY OF SHOREWOOD VOTERS I CITY ATTORNEY t--~ CITY COUNCIL BOARDS & COMMISSIONS " , CITY ADMINISTRATOR - PLANNING COMMISSION ..; PARK COMMISSION - SENIOR HOUSING & SERVICE TASK FORCE L1aUOR ENGINEERING FINANCE ADMINISTRATION PLANNING PUBLIC PUBLIC SAFETY (CONTRACT) & ZONING WORKS (CONTRACT) -Off-Sale -Engineering Svc. -Personnel -General Government -Planning -Building & Grounds - Police - 4 City Retail -Project Mgmt. -Accounting -Licensing -Zoning -Recycling (Contract) Joint Services * -Payroll -Elections -Inspection -Tree Maintenance - Patrol -Investments -Records -Property -Park Maintenance - Disaster Preparedness -Billing -Legal Publications Records -Street Maintenance - Investigation -Assessments -Public Information -Equipment Maintenance - Public Service -Budgeting -Recreation Programs -Storm water System - Fire - Excelsiorl -Computer System -Park Planning -Street Lighting Mound -Purchasing (Contract) -SanitationlWeeds - Fire preventionl -Assessor (Contract) -Janitor Services firefighting -Cable TV - (Contract) - Animal Control - Joint Powers * -Utility Maintenance Chanhassen (Contractl * Mayor is City's representative on joint governing board. April, 1992 I I I I I, I I I I I t I I, I I I I' / I I MAYOR Barb Bra nee I COUNCI L Kristi Stover Bob Gagne Rob Daugherty Daniel Lewis CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD . SHOREWOOD. MINNESOTA 55331 . (612)"474-3236 April 8, 1992 Honorable Mayor pnd Members of the City Council City of ShorewoOd, Minnesota Councilmembers: 'l'he comprehensive Annual ~inancial Report of the JCity of Shorewoqd, Minnesota for; the fiscal year end~d December 31, 1991, is hereby submitted. Respon~ibility fQr both the accuracy of thedata,iv.and the completene~s apd fairnes~ of the presentation, inqludin9 all disclosures, restsw~ th the ci tr . To the best of our knowledge and beli.ef, theepclosed" data is accurate' in all material respects and is reported :In a manner designated to present fairly the financial position and results of operations of t);le various funds andacco\,lnt grt;:>ups of the city. All disclosures I1~cessarytoenable' the reader to gain anunderstandihg of the City'S ,financial activities have been inCluded. . . The. comprehensive Am~ualFinancialReport is presented in three sections: Introductory, Financial and statistical. The Introductory section includ.esthis tr;ansmi ttal letter, the City's organizational chart and a list of City officials~ The Financial section includes the general purpose financial stateIl1:ents ,and the qombining and ,Jndividual fUJ'ld, and, account group financial statementsanp schedules, along with the auditQr's report/on the financial 'statements. The statistical section includess~lected financial and demographic information, generally presented on a nlUlti~year /basis. Theorganizati,oIl, form.and contents of this report were prepared in accordance with ',the. standards prescribed by the Governmental Accounting Standards Board, the Government F1nanc:.e Officers Association of the United states and Canada" the A.1neriCcln Institute of certified Public Accountants, and the Minnesota state Auditor's Office. . The funds included in our.: Compreh~nsive Annual Financial Report are those considered to be within the oversi,ght.respons'ibility of the City Council. .Thecriteria used ip determining the reporting entity is con~istentwith those, established by tpeGovernmental Accounting Standards Board. Based on these criteria, all funds and account groups of the/City are included in this report. II A Residential Cornmunity on Lake Minnetonka's South Shore The city ,provides its resideJ;its andpusiness.es(wit;h a full rang-eof municip~'lseX'vices cqnsisting of police, fire(' publi9 works, parks and general administrative services"" The Ci't;y alsooper?t~s four enterprises:.awater utility, sewer utility, recYCling ~tilityand an off-sale liquor operation, consisting of two store sites.. / ECONOMIC CONDITION AND OUTLOOK The City of'Shorewood is a suburb of th~ CitYc of Minnettpolis and is located twenty-five miles southwest; ofth~ central business dist~ict On. the southern shorebf Lak~ Minnetonka. The City\ is p:r;edominantlya resid~ntial conu,nunity with. limited commerc~al b~sinesses and one commercial shopping mall. ,The City is 6 squ'are miles in area and has."an estimated population of 6,000. I While tneCity hasexperiencedan'\ accelerated rate of growth in residential developme:nt during th~ 1980's, the growth rate has slowed in the 1990'S.. The city will cOI)t;inue to experience growth in it's residential base in the future, but because of thelimJ.ted number of large (tracts of land available, this will com~at a reduced rate and likely will be smaller developments than in the past. " MAJOR INITIATIVES FINANCIAL AND MANAGEMENT EMPHASIS EMPHASIS ON GOVERNANCE The city Co~ncil in its leadership role iseffecti(vely establishing a focus for citygdvernmentin Shorewood. Eaoh member of the Council has signed a series of commitments of service and standards. The .Council has adopted a strong set of values by which decisions are to be made. It has ! adopted a (statement of.. purpose and established overall. goals anq expectations/for the City. It has identified issues facing tpe City and prioritized them so that the staff can efficiently and! effectively allocate time and resourceS. The City council has further taken a leadership role :i.ll dired.ting certain system improvements. EMPHASIS ON SYSTEM IMPROVEMENTS . The City council has adopted )an open government policy and is implementing it by televising City council meetings, by improving quarterly citizen newsletters and by directing city staff to \ . improve communication"to those residents affected by projects a.nd special assessments. A new more effective schedule of communications to citizens will be ~mplemerited. The City Counci.l recogpizes.' that its ~qrk consists of more than responding toc:it~zen requests and adopt~ng an annual budget. The city qouncil'sca!lendar consists of three phases. 'The first phase III I' I I I I I II I I I t I I ,1 I I I I I I I I I I I I I I I t I I I I I I I I is Planning, which includes employee and systems evaluations, review of the previous years work plan, review of the City's Comprehensive Plan Executive Summary, review of the Statements of Purpose and Values, and identification and prioritization of issues for the next twelve and twenty-four months. The second phase is that of programming. Each year the five-year Capi tal Improvement Program is reviewed and updated based upon priorities established in phase one. In addition, any changes to the Comprehensive Plan are made based upon the phase one decisions. The third phase is Budgeting. The operating budget is established based on decisions made in the first two phases. The Capital Improvement Budget is established as year one of the five-year capital Improvement Program. This five-year capital Improvement Program is a very important financial planning document as it projects the City's capital improvement needs and identifies financial resources to meet those needs. It clearly identifies areas where policies are lacking and where problems may arise in the future. EMPHASIS ON PUBLIC IMPROVEMENTS In July, 1991, the city, in conjunction with the State of Minnesota Department of Transportation, began construction of an intersection improvement on Highway 7 and Old Market Road. In addition to the intersection, the project includes improving the service road along Highway 7, the closure of five on-off ramps, storm sewer and retention ponds, and the extension of water and sanitary sewer utility lines. These improvements will be paid for with State Aid Funds and with funds provided by a tax increment financing district agreement with the developer. The project is scheduled to be completed in spring, 1992. The City also began the construction of a water treatment plant which will benefit the residents in the southeast area of the City. This improvement is being financed through special assessments to benefitted properties. A new Public Works facility, including a salt storage building, is planned for construction in 1992. Funds for this project have been set aside in the Capital Improvement Fund. The City is now setting aside funds for the demolition of the Public Works buildings at the current site adjacent to city Hall and Badger Park. Plans are being drawn to redevelop the former Public Works area to blend better with the city hall and park environment. The City plans to begin implementation of a surface water management program through the establishment of a surface water management utility and a number of drainage districts throughout the city. The Park Commission has been developing a park and trail capital improvement program. The program will involve a city-wide park and trail bonding referendum question to provide funding for the planned improvements. Donations from civic organizations, sporting groups, businesses and individuals, as well as developer park dedication fees, will also be used to finance the improvements. This will be a comprehensive park and trail improvement program. IV EMPHASIS ON EFFICIENTLY, EFFECTIVELY MEETING SERVICE NEEDS As one of fourteen Lake Minnetonka Area municipalities, the City of Shorewood is involved in up to twenty-one various joint powers agreements and contractual arrangements with other jurisdictions and private enterprises to deliver municipal services to residents of the ci ty . The ci ty of Shorewood is committed to working cooperatively with area governmental jurisdictions to carefully consider optional methods to effectively deliver public services as efficiently as possible. FINANCIAL INFORMATION INTERNAL CONTROLS Management of the City is responsible for establishing and maintaining an internal control structure in the accounting system designed to ensure that the assets of the City are protected from loss, theft or misuse and to ensure that fair, reliable and accurate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: 1) the cost of a control should not exceed the benefits; 2) the valuation of costs and benefits requires estimates and judgments by management. As part of the City's annual audit, the internal control system is evaluated to the extent necessary for audit purposes and changes are recommended when needed. BUDGETING CONTROLS The City maintains budgetary controls to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the general fund are included in the annual appropriated budget. The level of budgetary control is established at the fund level. As demonstrated by the statements and schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management. GENERAL GOVERNMENT FUNCTIONS The following schedule presents a summary of General Fund and Debt Service Fund revenues for the fiscal year ended December 31, 1991 and the amount of increases or decreases in relation to the prior year's revenues. v I J I I l ,I I I I I I I I I I I I I I I I I I t I I I I I I I t I I I I I I INCREASE (DECREASE) REVENUES AMOUNT % OF TOTAL FROM 1990 General Property Taxes $1,628,245 52.38% $ 191,105 Licenses and permits 168,560 5.42 (35,268) Intergovernmental 153,681 4.94 (120,099) Charges for Services 3,635 .12 (6,308) Fines and Forfeitures 101,200 3.26 (23,034) Special Assessments 488,953 15.73 (382,626) Interest on Investments 213,533 6.87 (30,546) Miscellaneous 51,496 1. 66 20,615 Proceeds of Bond Issue 273,956 8.81 273,956 Transfers In 25.000 .81 (235.000) Total $3.108.259 100.00% $(347.205) The largest revenue increase in 1991 was in general property taxes. This is a result of a City Council decision to begin to accumulate resources for future capital equipment and improvement projects. The additional amounts are being transferred to various capital projects funds and will be applied to future equipment acquisitions and capital improvements. Bonds issued in Fall, 1991 provided proceeds which were allocated to a debt service fund for the retirement of refunded bonds in February, 1992. There were decreases in revenue in several categories. Intergovernmental revenue declined as a result of action by the State Legislature to withhold a portion of the Homestead and Agriculture Credit Aid (HACA) allocated to the City. The State withheld $66,971 in HACA allocated to the City in 1991. In addition, a recycling grant from Hennepin County which was budgeted in the general fund was recorded as revenue in a newly established Recycling Fund. This fund was made necessary due to grant requirements issued by Hennepin County. Accordingly, these revenues were deficient in the General Fund. Due to a decrease in building activity, permit revenue was down significantly in 1991. This is due both to the economic recession during the summer of 1991, and to the fewer number of parcels within the. City which are available for development. Also, interest revenue declined as a result of lower interest rates in 1991. Special assessment revenues also decreased by a large margin in 1991. The City has levied a minimal amount of special assessments in recent years and assessment levies have expired, which decreases the amount of special assessment revenue collected by the City. The following table presents a summary of General Fund and Debt Service Fund expenditures for the fiscal year ended December 31, 1991 and the amount of increases or decreases in relation to the prior year's expenditures. VI INCREASE (DECREASE) EXPENDITURES AMOUNT % OF TOTAL FROM 1990 CURRENT: General Government $ 665,152 24.59% $ 48,223 Public Safety 548,343 20.27 15,685 Public Works 375,406 13.88 (424,137) Parks and Recreation 142,168 5.25 26,287 Transfers Out 510,712 18.88 209,712 DEBT SERVICE: Principal 290,000 10.72 30,000 Interest 173.495 6.41 (1.323) TOTAL $2.705.276 100.00% $ (95.553) General government expenditures increased in 1991 due largely to increased legal fees during the year and to employee turnover which resulted in severance payments. Transfers out increased due to transfers to capital projects and improvement funds budgeted in 1991. This also reflects the transfer of funds which were budgeted in prior years for future capital improvements which had been held in the general fund. Public Works expenditures experienced a large decline from 1990. This is mainly due to street improvements and equipment acquisitions budgeted in 1991 which were postponed to 1992. These amounts were re-budgeted in 1992. Also, recycling activities budgeted in the public works area were shifted to the newly established Recycling Fund, which, in turn, reduced the amount of expenditures in this area. GENERAL FUND BALANCE The fund balance of the General Fund decreased by $4,666 in 1991, a difference of 0.37%. The fund balance as of December 31, 1991 is $1,252,193. The fund balance is designated for working capital requirements through the first six months of the year and for future capital equipment and improvements. It is important for the City to maintain the existing fund balance as a reserve to meet expenditures in the General fund until property tax proceeds are received in July. ENTERPRISE OPERATION The City's enterprise fund activities for 1991 are summarized as follows: VII I I I I I, I I I I I I I t' I I I I I I I I I I I I I I I I I I I I I I OPERATING OPERATING OPERATING REVENUES EXPENSES INCOME (LOSS) Water $172,569 $183,200 $(10,631) Sewer 480,951 568,822 (87,871) Recycling 63,281 58,580 4,701 Liquor - Store I 606,845 567,170 39,675 Store II 848,487 800,654 47,833 Generally accepted accounting principles require the depreciation of contributed assets, which results in net losses in some cases. However, past and present City financial practice does not include the recovery of such depreciation in the setting of utility rates, which, in effect, would recover that cost a second time. The city's utility rate setting is done with reference to the working capital of the fund and assumes continued customer contributions through special assessments. DEBT ADMINISTRATION As of December 31, 1991, the city's total debt outstanding totaled $3,411,000. Of this total, $3,315,000 were general obligation bonds issued to finance the construction of sanitary sewer, street, water and storm sewer improvements. The repayment of these bonds is provided through the proceeds of special assessments levied against benefitted properties. Also included are $65,000 in general obligation water revenue bonds issued for improvements to the City water system, which will be repaid from Water Fund revenues. A general obligation storm sewer improvement bond of $31,000 was issued for storm sewer improvements within a special storm drainage district. The repayment of these bonds will be provided through an ad valorem tax levied against properties within the storm drainage district. Tax increment revenue bonds of $920,000 were issued for construction of public improvements in the Waterford III development which will be repaid from tax increments. Because these bonds are not backed by the full faith and credit of the City~ in the absence of tax increments from Tax Increment Financing District NO.1, the City has no obligation to repay the bonds. Accordingly, this amount is not included in the total debt outstanding, nor as a liability in the General Long-term Debt Account Group. The City has maintained an "A" rating from Moody's Investor Service on general obligation bond issues. I I I CASH MANAGEMENT The City of Shorewood subscribes to the "pooled cash" concept of investing which means that all funds with cash balances participate in an investment pool. This permits some funds to be overdrawn and other funds to show positive cash balances, with the City overall maintaining a positive cash balance. This pooled cash concept provides for investing of greater amounts of money at more VIII favorable rates. Interest earnings are then allocated to the participating funds. During 1991, the City of Shorewood earned $334,344 in interest revenue. RISK MANAGEMENT The City of Shorewood's worker's compensation insurance and its general property and liability coverage are provided through the League of Minnesota Cities Insurance Trust (LMCIT). The LMCIT worker I s compensation program is a joint self-insurance plan designed to lower and stabilize cities worker's compensation costs and to assure that cities have a source of coverage available. Each participating city deposits with the LMCIT its worker's compensation deposit premium for the policy year. The deposit premium is calculated using standard manual rates with the applicable volume discounts and experience modification factor. From these deposits, LMCIT purchases reinsurance to protect the program from catastrophic and abnormal payment claims. The balance of the deposits and reserves are invested, with the earnings accruing to the benefit of all participants. LMCIT's reserves and rates are reviewed annually by an actuary to help assure that the program remains financially strong. OTHER INFORMATION INDEPENDENT AUDIT Minnesota state statutes require an annual audit of the City's accounts by the Minnesota state Auditor or by independent certified public accountants. The auditor's report on the general purpose financial statements and schedules is included in the financial section of this report. ACKNOWLEDGMENTS We would like to thank the city staff, especially Wendy Davis, Senior Accounting Clerk, and the ci ty , s independent auditor, without whose assistance and cooperation the timely preparation of the 'Comprehensive Annual Financial Report would not have been possible. spectfully SUbmitted, lM'LMt ~ ames C. Hurm City Administrator c:~e:>L// iRo k Di ector/Treasurer IX 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 , Ii , I I " 1<, I I I I CITY pFSHOREWOOD, ~SOTA SECTION II FINANCIAL SECTION ( / I I AffX) I I CERTIFIED PUBLIC ACCOUNTANTS AND CoNSULTANTS I I INDEPENDENT AUDITOR'S REPORT Honorable Mayor and city Council City of Shorewood, Minnesota I I We have audited the accompanying general purpose financial statements of the City of Shorewood, Minnesota, for the year ended December 31, 1991 as listed in the table of contents. These financial statements are the responsibility of the City of Shorewood, Minnesota's management. Our responsibility is to express an opinion on these financial statements based on our audit. I I We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. I I I I In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the city of Shorewood, Minnesota at December 31, 1991 and the results of its operations and the cash flows of its Proprietary Fund Types for the year then ended, in conformity with generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The accompanying combining and individual fund and account group financial statements and schedules listed in the foregoing table of contents, which are also the responsibility of the City's management, are presented for purposes of additional analysis and are not a required part of the financial statements of the City. Such financial statements and schedules have been subjected to the auditing procedures applied in our audit of the general purpose financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the general purpose financial statements taken as a whole. I I March 11, 1992 Minneapolis, Minnesota , 12t6/ dit6 i tdJ ABDO, ABDO & EICK Certified Public Accountants I I Member of American Institute of Certified Public Accountants Private Companies Practice Section I 115 EAST HICKORY STREET. SUITE 302 P.O. BOX 3166 MANKA TO. MINNESOTA 56002.3166 (507) 625.2727 FAX (507) 388.9139 204 EAST PEARL STREET P.O. BOX 345 OWATONNA. MINNESOTA 55060-0345 (507) 451.9136 FAX (507) 451.0794 1060 NORTHLAND PLAZA 3800 WEST 80TH STREET MINNEAPOLIS. MINNESOTA 55431 (612) 835.9090 FAX (612) 896-3620 I I I, I , I I I I I I I I I I I I I '\1 ((CI$Y OF SHOREWOOD, MINNESOTA GENERAL PURPOSE FINANCIAL STATEMENTS The general purpose finaIici2li statements and. notes' to. the financi2listatements are intended to provide an overview and broad perspective of the City's .financial pos~tion liUld operations. . These statements... present a summary set. of . information needed to control and an2liyze current oper~tions to (ietermine compliance with leg2li and budgetaryJimitations and tq assist in financi2li planning. . .' The folloWing gen~~ purpose fin~~ statements aie pre~ented: Combined B3)~ce Sheet-.,All.Fund Types and Account Groups.. I Combined Statement of Revenue,)f:xpenditures and Changes in Fund B2liance/- All GoveplmenW Fund Types . . 'Statement ofReven1,1e, Expenditures and Changes in Fund Balance - Budget apd Ac~uai - General Fund' . CombIned Statement of Revenue, gx~nses and Changes in Retained Earnings: - All Proprietary Fu;n4 Types Combined Statement of Cash Flows ~. All Proprietary Fund Types .J 4 336 484 617 101 333 112 200 51 496 139 114 60 026 26 320 I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE ALL GOVERNMENTAL FUND TYPES YEAR ENDED DECEMBER 31, 1991 General Debt Service Capital Pro;ects REVENUE General property taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Miscellaneous Special assessments Interest on investments Other $1 627 874 $ 371 $ 168 560 153 681 3 635 101 200 TOTAL REVENUE 2 212 115 597 188 225 460 EXPENDITURES Current General government Public safety Public works Parks and recreation Capital outlay Debt service Principal Interest and service charges 665 152 548 343 375 406 142 168 1 571 145 290 000 173 495 TOTAL EXPENDITURES 1 731 069 463 495 1 571 145 481 046 133 693 (1 345 685) EXCESS REVENUE (EXPENDITURES) OTHER FINANCING SOURCES (USES) Proceeds of bonds issued Operating transfers in Operating transfers out 273 956 1 631 165 25 000 530 712 (510 712) TOTAL OTHER FINANCING SOURCES (USES) (485 712) 273 956 2 161 877 EXCESS REVENUE AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER USES (4 666) 407 649 816 192 1 256 859 1 906 837 345 588 FUND BALANCE, JANUARY 1 FUND EQUITY TRANSFER IN FUND EQUITY TRANSFER (OUT) FUND BALANCE, DECEMBER 31 $1 252 193 $2 314 486 $1 161 780 See Notes to Financial Statements -3- I I Exhibit 2 Total I (Memorandum Only) 1991 1990 $1 628 245 $1 437 140 I 168 560 203 828 153 681 273 780 3 635 9 943 101 200 124 234 I 628 067 871 579 273 559 245 192 77 816 45 939 I 3 034 763 3 211 635 I 665 152 616 929 548 343 532 658 375 406 799 543 I 142 168 115 881 1 571 145 67 700 290 000 260 000 I 173 495 175 098 3 765 709 2 567 809 I (730 946) 643 826 1 905 121 I 555 712 321 000 (510 712) (301 000) I 1 950 121 20 000 1 219 175 663 826 I 3 509 284 2 845 458 365 386 I (365 386) S4 728 459 S3 509 284 I I I I -3- I -4- I I I I I I I I I I I I I I I I I I I See Notes to Financial Statements I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA COMBINED STATEMENT OF REVENUE, EXPENSES AND CHANGES ALL PROPRIETARY FUND TYPES YEAR ENDED DECEMBER 31, 1991 OPERATING REVENUE Sales Less cost of sales GROSS PROFIT Charges for services Permits and connection fees GROSS PROFIT AND REVENUE EXPENSES Personal services Supplies Repairs and maintenance Depreciation Professional services Contractual services Communication Insurance Water purchases Utilities Metropolitan Waste Control Commission disposal charges Rent Advertising Other TOTAL EXPENSES OPERATING INCOME (LOSS) OTHER REVENUE (EXPENSES) General property taxes Property tax credits Interest on investments Other income Interest expense TOTAL OTHER REVENUE (EXPENSES) INCOME BEFORE TRANSFERS OPERATING TRANSFERS TO OTHER FUNDS NET INCOME RETAINED EARNINGS, JANUARY 1 RETAINED EARNINGS, DECEMBER 31 See Notes to Financial Statements -5- Exhibit 4 IN RETAINED EARNINGS $1 455 332 (1 147 109) 308 223 686 820 29 981 1 025 024 144 076 18 386 18 040 232 831 10 108 149 610 1 098 20 448 14 400 38 066 307 116 45 106 6 199 25 833 1 031 317 (6 293) 16 579 1 220 60 785 10 475 (6 493) 82 566 76 273 (45 000) 31 273 704 452 S 735 725 CITY OF SHOREWOOD, MINNESOTA COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES YEAR ENDED DECEMBER 31, 1991 Exhibit 5 I CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) Other income related to operations Adjustments to reconcile operating income to net cash provided by operating activities Depreciation and amortization (Increase) decrease in assets: Taxes Accounts Accrued interest Special assessments Inventory Prepaid items Increase (decrease) in liabilities: Accounts payable Salaries and compensated absences payable Deferred revenue $ (6 293) 10 475 I I I INCREASE IN CASH AND CASH EQUIVALENTS 232 831 (425) (3 872) (2 100) 11 311 (18 346) 834 I I CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 60 785 I I I I I I CASH PROVIDED BY OPERATING ACTIVITIES 48 875 819 (1 200) 272 909 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Operating transfers to other funds (45 000) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Bond principal paid Interest paid on revenue bonds Acquisition of property and equipment Assets acquired from other funds Property taxes levied for debt service (10 000) (6 493) (204 696) 151 521 17 799 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES (51 869) INCREASE IN CASH AND CASH EQUIVALENTS 236 825 CASH AND CASH EQUIVALENTS, JANUARY 1 766 392 I CASH AND CASH EQUIVALENTS, DECEMBER 31 Sl 003 217 I I I -6- I I I See Notes to Financial Statements I I I Note 1: I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1991 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the City of Shorewood, Minnesota have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the government's accounting policies are described below. A. Reportinq Entitv In accordance with GASB pronouncements, the City's financial statements include all funds, account groups, departments, agencies, boards, commissions, and other organizations over which City officials exercise oversight responsibility. Oversight responsibility includes such aspects as appointment of governing body members, budget review, approval of property tax levies, outstanding debt secured by the City's full faith and credit or revenues, and responsibility for funding deficits. As a result of applying the entity definition criteria of the Governmental Accounting Standards Board, certain organizations have been included or excluded from the City's financial statements, as follows: Excluded from the reporting entity: Independent School District No. 276 and 277 (Minnetonka and Westonka Public Schools) The Districts, like all school districts in Minnesota, are completely independent of any other governmental entity. They have their own elected Board of Education, levy their own taxes and prepare their own financial reports. Accordingly, the Districts are excluded from the reporting entity. B. Fund Accountinq Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenue, and expenditures or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the financial statements in this report, into five generic fund types and three broad fund categories. The broad fund categories are governmental, proprietary and fiduciary. Governmental funds account for all or nearly all of a government's general activities, proprietary funds account for enterprise activities, and fiduciary funds are used to account for assets held on behalf of others. The fund types accounted for within each broad fund category follow: -7- CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1991 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED GOVERNMENTAL FUNDS: General Fund - The General Fund is the general operating fund of the City and accoun~s for all revenues and expenditures not required to be accounted for in another fund. Debt Service Funds - Debt Service Funds are used to account for the accumulation of resources for, and the payment of general long-term debt principal, interest and related costs. Capital Projects Funds - Capital Projects Funds are used to account for all resources used for the acquisition or construction of major capital facilities. PROPRIETARY FUNDS: Enterprise Funds - Enterprise Funds are used to account for operations (a) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the revenue earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. FIDUCIARY FUNDS: Agency Funds - Agency Funds are used to account for assets held by the City on behalf of others as their agent. The governmental fund types previously discussed are designed to account for the financial flow of a particular fund; therefore, they generally include only current assets and current liabilities on their balance sheets. Their reported fund balance is considered a measure of available spendable resources. The City also maintains two account groups for noncurrent assets and liabilities. These account groups are concerned only with the measurement of financial position. They are as follows: General Fixed Assets Account Group - This separate account group contains the fixed assets used in the governmental fund type operations. They are assets of the City as a whole and not of individual funds. Public domain general fixed assets consisting of certain improvements other than buildings, including roads, curbs and gutters, streets and sidewalks, drainage systems, are not capitalized along with other general fixed assets. The assets are valued at estimated historical cost or appraised value and no depreciation has been provided on them. General Long-term Debt Account Group - This separate account group contains the long-term liabilities of the City expected to be financed from governmental funds. They are liabilities of the City as a whole and not of individual funds. The exception to this rule is for proprietary fund type long-term debt which is accounted for in that fund type. All proprietary funds are accounted for on a cost of services or capital maintenance measurement focus. Therefore, all assets and liabilities, both current and noncurrent, are included on their balance sheets. All fixed assets are stated at historical or estimated historical cost. -8- I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1991 I I Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED C. Basis of Accountinq I I The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenue and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. I All proprietary funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operation of these funds are included on the balance sheet. Fund equity (i.e., net total assets) is segregated into contributed capital and retained earnings components. Proprietary fund-type operating statements present increases (e.g., revenue) and decreases (e.g., expenses) in net total assets. I I The modified accrual basis of accounting is used by all governmental fund types and agency funds. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The government considers property taxes as available if they are collected within 60 days after yearend. Special assessments are recognized as revenue as the principal amount is collected. Substantially all other sources of revenue are accrued. I I I I Expenditures are generally recorded when the related fund liability is incurred except principal and interest on general long-term debt which are recorded as fund liabilities when due. Proprietary funds are accounted for using the accrual basis of accounting. Their revenue is recognized when it is earned, and their expenses are recognized when they are incurred. I Fixed assets are recorded in the proprietary funds at historical cost. Depreciation is charged as an expense against operations and accumulated depreciation is reported on proprietary fund balance sheets. Depreciation has been provided over the estimated useful lives using the straight-line method. The estimated useful lives are as follows: I Furniture and equipment Distribution and collection systems 5 - 10 years 40 years I D. Budqets I Budgets are adopted on a basis consistent with generally accepted accounting principles. An annual appropriated budget is adopted for the general fund. All annual appropriations lapse at fiscal year end. Project-length financial plans are adopted for all capital projects funds. The City follows these procedures in establishing the budgetary data reflected in the financial statements: I 1. Prior to January 1, the budget is adopted by the City Council. I I -9- CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1991 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 2. Formal budgetary integration is employed as a management control device during the year for the General Fund. 3. Reported budget amounts are as originally adopted or as amended by Council approved supplemental appropriations and budget transfers. Supplemental budgetary appropriations were not material in 1991 in relation to the original appropriation. E. Cash and Investments Cash and investments include demand deposits and short-term investments. The City invests cash balances from all funds, to the extent available, in certificates of deposit and other authorized investments. Investments are carried at cost or amortized cost, except for investments in the deferred compensation agency fund which are reported at market value. F. Cash and Cash Eauivalents For purposes of the statement of cash flows, the Enterprise Funds consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. G. Inventories Inventories are valued at cost, which approximates market, using the first-in/first-out (FIFO) method. H. Prepaid Items Payments made to vendors for service that will benefit periods beyond December 31, 1991 are recorded as prepaid items. I. Fixed Assets General fixed assets are not capitalized in the funds used to acquire or construct them. Instead, capital acquisition and construction are reflected as expenditures in governmental funds, and the related assets are reported in the general fixed assets account group. All purchased fixed assets are valued at cost where historical records are available and at an estimated historical cost where no historical records exist. Donated fixed assets are valued at their estimated fair market value on the date received. Public domain ("infrastructure") general fixed assets consisting of roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems are not capitalized, as these assets are immovable and of value only to the government. Assets in the general fixed assets account gr9up are not depreciated. Depreciation of buildings, equipment and vehicles in the proprietary fund types is computed using the straight-line method. The costs of normal maintenance and repairs in the proprietary fund types that do not add ~o the value of the asset or materially extend asset lives are not capitalized. Improvements are capitalized and depreciated over the remaining useful lives of the related fixed assets. -10- I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1991 I I Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED J. Compensated Absences I Vested accumulated vacation or sick leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability of the governmental fund that will pay it. Amounts of vested or accumulated vacation leave that are not expected to be liquidated with expendable available financial resources are reported in the general long-term debt account group. No expenditure is reported for these amounts. Vested or accumulated vacation leave of proprietary fund types is recorded as an expense and liability of those funds as the benefits accrue to employees. In accordance with the provisions of Statement of Financial Accounting Standards No. 43, Accounting for Compensated Absences, no liability is recorded for nonvesting accumulating rights to receive sick pay benefits. I I I I K. Lona-term Obliaations I Long-term debt is recognized as a liability of a governmental fund when due, or when resources have been accumulated in the debt service fund for payment early in the following year. For other long-term obligations, only that portion expected to be financed from expendable available financial resources is reported as a fund liability of a governmental fund. Long-term liabilities expected to be financed from proprietary fund operations are accounted for in those funds. I I I All long-term bonded debt issued by the City is backed by the full faith and credit of the City. This includes special assessment and revenue bonds, which are intended to be repaid from revenue sources other than general property taxes. L. Fund Eauitv I Contributed capital is recorded in proprietary funds that have received capital grants or contributions from developers, customers or other funds. Reserves represent those portions of fund equity not appropriable for expenditure or legally segregated for a specific future use. Designated fund balances represent tentative plans for future use of financial resources. M. Interfund Transactions I Quasi-external transactions are accounted for as revenue, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. I I All other inter fund transactions, except quasi-external transactions and reimbursements, are reported as transfers. Nonrecurring or nonroutine permanent transfers of equity are reported as residual equity transfers. All other interfund transfers are reported as operating transfers. I I I -11- CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1991 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED N. Memorandum Only - Total Columns I I I Total columns on the general purpose financial statements are captioned I "memorandum 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 conformity with generally accepted accounting principles. Neither are I such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. O. Comparative Data Comparative total data for the prior year has been presented in the accompanying financial statements in order to provide an understanding of changes in the government's financial position and operations. However, comparative data have not been presented in all statements because their inclusion would make certain statements unduly complex and difficult to understand. Note 2: LEGAL COMPLIANCE - BUDGETS I I I On or before the last Friday in August of each year, all agencies of the government submit requests for appropriation to the City's administrator so that a budget may be prepared. The budget is prepared by fund, function and I activity, and includes information on the past year, current year estimates and requested appropriations for the next fiscal year. The proposed budget is presented to the government's council for review. The I government's council holds public hearings and may add to, subtract from or change appropriations. Any changes in the budget must be within the revenues and reserves estimated as available or the revenue estimates must be changed I by an affirmative vote of a majority of the government's council. Expenditures may not legally exceed budgeted appropriations at the fund level. During the year, supplementary appropriations were not material. Note 3: DEPOSITS AND INVESTMENTS I Cash surpluses are pooled and invested in certificates of deposit and short-term government securities. Investment earnings are allocated to funds I on the basis of average cash balances. Investments are stated at cost, which approximates market value, and are not identified with specific funds. Deposits In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized by the City Council, all of which are members of the Federal Reserve System. Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110\ of the deposits not covered by insurance or bonds (140\ in the case of mortgage notes pledged). Authorized collateral includes the legal investments described below, as well as certain first mortgage notes, and certain other state or local government obligations. Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City treasurer or in a financial institution other than that furnishing the collateral. -12- I I I I I I I CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1991 I I Note 3: DEPOSITS AND INVESTMENTS - CONTINUED Balances at December 31, 1991: I Bank Balances Carrying Amount I Insured or collateralized by securities held by the City or its agent in the City's name 53 228 274 53 236 717 Investments I The City also invests idle funds, as authorized by Minnesota Statutes, in the following: a. Direct obligations or obligations guaranteed by the United States or its agencies. I I b. Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities described in (a) above. c. Bankers acceptances of United States Banks eligible for purchase by the Federal Reserve System. I I d. Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. I I e. Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker-dealers. Balances at December 31, 1991: I Securities Credit Risk Cateoorv Carrying Tvpe 1 2 3 Amount U.S. Government $907 852 $ $ $ 907 852 Commercial Paper 1 592 063 1 592 063 Total investments 5907 852 5 51 592 063 52 499 915 I The City's investments are categorized to give an indication of the level of risk assumed at year end. Category 1 includes investments that are insured or registered or for which the securities are held by the City or its agent in the City's name. Category 2 includes uninsured and unregistered investments for which the securities are held by the counterparty's trust department or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counterparty's trust department or agent but not in the City's name. I I I The following is a summary of the cash and temporary investments reported on the combined balance sheet as of December 31: Deposits Investments $3 236 717 2 499 915 I Total 55 736 632 I -13- CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1991 Note 4: RECEIVABLES A. Property Taxes I I I The City Council annually adopts a tax levy by December 28 and certifies I it to the County for collection the following year. The County is responsible for collecting all property taxes for the City. These taxes attach an enforceable lien on January 1 on taxable property and is payable in May and October each year. The taxes are collected by the County I Treasurer and tax settlements are made to the City three times each year. Taxes payable on homestead property, as defined by State Statutes, are partially reduced by a homestead and agricultural credit aid. These I credits are paid to the City by the State of Minnesota in lieu of taxes levied against homestead property. The State remits this credit in two equal installments in July and December each year. Allowances are provided for the full amount of delinquent taxes except those collected by the County in November and December and remitted to the City within sixty days after year end. The allowance is reported on the balance sheet as deferred revenue. B. Accounts Receivable Accounts receivable include amounts billed for services provided before year end. C. Contract Receivable The balance, together with 10% interest, is receivable in monthly installments of $833 through April 1, 1993, at which time the balance of $91,898 is due. The receivable is offset by deferred revenue and the payments are recognized as revenue when received. D. Special Assessments Special assessments receivable include the following components: o Delinquent - includes amounts billed to property owners but not paid. o Deferred - includes assessment installments which will be billed to property owners in future years. I I I I I I I special assessments are recognized as a receivable and deferred revenue I when the assessments are certified to the County for collection. Special assessments are recognized as revenue when received in cash. -14- I I I I I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1991 Note 5: FIXED ASSETS The following is a summary of changes in the general fixed assets account group during the year: Balance Balance January 1, December 31, 1991 Additions Retirements 1991 Land $ 449 326 $ $ $ 449 326 Buildings and structures 454 000 50 781 504 781 Improvements other than buildings 492 187 61 980 554 167 Furniture and equip- ment 791 766 36 643 23 230 805 179 Total general fixed assets $2 187 279 $149 404 $ 23 230 $2 313 453 A summary of proprietary fund property and equipment at December 31, 1991 follows: Public Utilities Liquor Funds Water Sewer Store I Store II Total Furniture and equipment $ 24 178 $ 36 661 $ 24 917 $ 9 161 $ 94 917 Collection and distribution systems 2 268 738 7 036 132 9 304 870 Total 2 292 916 7 072 793 24 917 9 161 9 399 787 Less accumulated depreciation /462 497) /3 207 493) /24 917) (7 571) /3 702 478) Net property, plant and equipment $1 830 419 $3 865 300 $ $ 1 590 $5 697 309 Note 6: LONG-TERM OBLIGATIONS Long-term Obligations - Bonds The following is a summary of changes in long-term bonded debt of the City for the year ended December 31, 1991: General Long- term Debt Proprietary Account Group Funds Special Assessment Revenue Total payable January 1, 1991 $2 645 000 $ 75 000 $2 720 000 Debt issued 991 000 991 000 Debt retired /290 000) 110 000) /300 000) Payable December 31, 1991 $3 346 000 $ 65 000 $3 411 000 -15- CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1991 Note 6: LONG-TERM OBLIGATIONS - CONTINUED The long-term bonded debt obligations outstanding at December 31, 1991 are summarized as follows: Tvpes of Bonds General obligation special assessment bonds General obligation water revenue bonds Total Maturities 1992 - 2003 1992 - 1996 Rate 4.50 - 8.00% 8.25 - 8.50 Balance December 31, 1991 $3 346 000 65 000 53 411 000 The annual requirements to amortize all bonded debt outstanding at December 31, 1991, including interest payments totaling $1,179,079 are as follows: General Long- term Debt Account Group Year Ending Special December 31. Assessment 1992 $ 436 796 1993 517 660 1994 489 284 1995 460 495 1996 437 564 1997 - 2001 1 840 359 2002 - 2003 325 096 Total 54 507 254 Long-term Obligations - Other Proprietary Funds Revenue $ 15 500 14 675 18 825 17 550 16 275 5 82 825 Total $ 452 296 532 335 508 109 478 045 453 839 1 840 359 325 096 54 590 079 changes in long-term obligations other than bonds are summarized as follows: Payable, January 1 Net change in compensated absences Payable, December 31 Note 7: OPERATING LEASES Compensated Absences Pavable $ 16 798 112 5 16 910 The City leases space for the two off-sale liquor store operations. These leases are considered, for accounting purposes, to be operating leases. Lease expense for the year ended December 31, 1991 amounted to $45,106. Future minimum lease payments for these leases are as follows: Years Ending December 31. 1992 1993 Liquor Store I $ 6 256 -16- Liquor Store II $ 27 000 21 600 I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1991 I I Note 8: FUND EQUITY The various components of fund equity are contributed capital, retained earnings, and fund balance. I Contributed capital - The amount represents the value of assets contributed to the enterprise funds by other City funds. Additions during the year totalled $151,521. I Reserved Fund Balance - This represents the portion of fund balance which cannot be appropriated for future expenditures. The following reservations of fund equity have been made as of December 31, 1991: I Bond reserve 1984 Improvement (1987 Refunding) Shorewood Oaks 1974 Sewer Improvement Southeast Water (1986 Improvement) 1991 Improvement and Refunding I I Total Bond Reserve $ 547 998 831 963 49 245 579 640 303 013 52 311 859 Designated Fund Balance - Designated amounts indicate tentative plans for future uses of financial resources. The following unreserved fund balances have been designated: I I General Fund Designated for working capital Designated for equipment and improvements Debt Service Fund 1971 and 1972 Sewer Improvement - designated for fiscal fees Capital Projects Funds Designated for capital projects Capital Improvements Park Capital Improvement Waterford III Tax Increment Improvement Equipment Replacement Public Works Facility SE Water Treatment Plant Construction Pine Bend Improvement Church Road Improvement Shady Hills Storm Sewer Improvement I I I I $1 126 793 125 400 2 627 497 967 29 686 30 760 105 000 240 002 60 187 46 459 142 411 9 308 Unreserved and undesignated amounts are available to finance current and future years' expenditures. I Note 9: LEGAL COMPLIANCE Fund Deficits I The following fund has a deficit retained earnings as of December 31, 1991: I Proprietary Fund Water Fund 5211 077 The deficit in the Water Fund will be eliminated by future revenues. I I -17- CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1991 Note 10: SEGMENT INFORMATION - PROPRIETARY FUNDS Water Sewer Recvclina Sales less cost of sales of $475,120 and $671,989, respectively $ $ $ Charges for services 149 088 474 451 63 281 Permits and connection fees 23 481 6 500 Gross profit and revenue Expenses excluding depreciation. 172 569 480 951 63 281 58 580 126 614 393 194 Income before depreciation Depreciation 45 955 56 586 87 757 175 628 4 701 Operating income (loss) (87 871) 4 701 (10 631) Other revenues less other expenses 38 396 492 22 629 Income (loss) before transfers Operating transfers to other funds 11 998 (49 475) 5 193 (20 000) (8 002) 5 (49 475) 5 5 193 Net income 5 Net working capital 5 122 621 5 778 530 5 5 193 Additions to property and equipment 85 162 118 659 Bonds payable from operating revenues 65 000 Total assets 1 973 182 9 338 4 650 965 Total equity 1 898 959 5 193 4 643 830 Note 11: DEFERRED COMPENSATION PLAN Liquor Store I $131 725 131 725 92 050 39 675 39 675 12 366 52 041 (10 000) 5 42 041 5174 085 206 725 174 085 Liquor Store II $176 498 176 498 128 048 48 450 617 47 833 8 683 56 516 (15 000) 5 41 516 5225 889 425 289 743 227 479 Total $ 308 223 686 820 29 981 1 025 024 798 486 226 538 232 831 (6 293) 82 566 76 273 (45 000) 5 31 273 51 306 318 204 246 65 000 7 129 953 6 949 546 The government offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all employees, permits them to defer a portion of their salary until future years. Participation in the plan is optional. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency. -18- 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 CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1991 Note 11: DEFERRED COMPENSATION PLAN - CONTINUED All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the City subject only to the claims of the City's general creditors. Participants' rights under the plan are equal to those of general creditors of the government in an amount equal to the fair market value of the deferred account for each participant. The City has no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor. The City believes it is unlikely that it will use the assets to satisfy the claims of general creditors in the future. The plan assets are on deposit with and managed by trustees other than the City. ~ach employee has a choice of investment options within the plan. Note 12: DEFINED BENEFIT PENSION PLANS - STATEWIDE A. Plan Description All full-time and certain part-time employees of the City of Shorewood are covered by a defined benefit pension plan administered by the Public Employee Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) which is a cost-sharing multiple-employer retirement plan. PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated members are covered by Social Security and Basic members are not. All new members must participate in the Coordinated Plan. The payroll for employees covered by PERF for the year ended December 31, 1991, was $529,489; the City's total payroll was $632,888. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by State Statute, and vest after three years of credited service. The defined retirement benefits are based on a member's average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for Coordinated and Basic members. The retiring member receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic member is 2 percent of average salary for each of the first 10 years of service and 2.5 percent for each remaining year. For a Coordinated member, the annuity accrual rate is 1 percent of average salary for each of the first 10 years and 1.5 percent for each remaining year. Using Method 2, the annuity accrual rate is 2.5 percent of average salary for Basic members and 1.5 percent for Coordinated members. For PERF members whose annuity is calculated using Method 1, a full annuity is available when age plus years of service equal 90. There are different types of annuities available to members upon retirement. A normal annuity is a lifetime annuity that ceases upon the death of the retiree. No survivor annuity is payable. There are also various types of joint and survivor annuity options available which will reduce the monthly normal annuity amount, because the annuity is payable over joint lives. Members may also leave their contributions in the fund upon termination of public service, in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. -19- CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1991 I I Note 12: DEFINED BENEFIT PENSION PLANS - STATEWIDE - CONTINUED B. Contributions Reauired and Contributions Made I Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. The City makes annual contributions to the pension plans equal to the amount required by State Statutes. According to Minnesota Statutes Chapter 356.215, Subd. 4(g), the date of full funding required for the PERF is the year 2020. As part of the annual actuarial valuation, PERA's actuary determines the sufficiency of the statutory contribution rates towards meeting the required full funding deadline. The actuary compares the actual contribution rate to a "required" contribution rate. Current combined statutory contribution rates and actuarially required contribution rates for the plans are as follows: I I I Statutorv Rates Emplovees Emplover Required Rates I PERF (Basic and Coordinated Plans) 4.44% 4.81% 10.04% Total contributions made by the City during fiscal year 1991 were: I Amounts Emplovees Emplover Percentage of Covered Payroll Emplovees Emplover I PERF / S 22 398 S 23 722 4.23% 4.48% I The City's contribution for the year ended June 30, 1991 to the PERF represented .022 percent of total contributions required of all participating entities. I C. Fundina Status and Proaress 1. Pension Benefit Obligations I The "pension benefit obligation" is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and step-rate benefits, estimated to be I payable in the future as a result of employee service to date. The measure, which is the actuarial present value of credited projected benefits, is intended to help users assess PERA's funding status on a going-concern basis, assess progress made in accumulating sufficient I assets to pay benefits when due, and make comparisons among Public Employees Retirement Systems and among employers. PERA does not make separate measurements of assets and pension benefit obligations for I individual employers. The pension benefit obligation as of June 30, 1991, is shown below: (In thousands) PERF I Total pension benefit obligations Net assets available for benefits, at cost (Market Value for PERF = $3,662,769) $4 458 010 3 524 071 Unfunded pension benefit obligation S 933 939 I I -20- I I CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1991 I I Note 12: DEFINED BENEFIT PENSION PLAN - STATEWIDE - CONTINUED I The measurement of the pension benefit obligation is based on an actuarial valuation as of June 30, 1991. Net assets available to pay pension benefits were valued as of June 30, 1991. I 2. changes in Benefit Provisions During the 1991 legislative session, benefit improvements were obtained for survivors of members in the Basic Plan and the police and Fire Fund. In the Basic Plan, the maximum family death benefit was increased from $1,000 per month to 70 percent of the member's average salary. In the Police and Fire Fund, children's benefits were restored for families of disabled members who had chosen the joint and survivor annuity option before death. The effect of these changes increased the pension benefit obligation in the PERF by $4,016,869. I I D. Ten-Year Historical Trend Information I Ten-year historical trend information is presented in PERA's Comprehensive Annual Financial Report for the year ended June 30, 1991. This information is useful in assessing the pension plan's accumulation of sufficient assets to pay pension benefits as they become due. I E. Related Partv Investments As of June 30, 1991, and for the fiscal year then ended, PERA held no securities issued by the City or other related parties. II Note 13: ADVANCE REFUNDING AND DEFEASANCE OF DEBT Advance Refundina Issue - Current Year I I On November 1, 1991, the City issued $960,000 General Obligation Bonds, Series 1991A with a net interest rate of 5.6098 percent. The bonds were issued to finance improvements and for the refunding of all outstanding bonds from the General Obligation Improvement Bonds, Series 1986A which are callable February 1, 1992. The bonds to be called February 1, 1992 carry a net interest rate of 7.65 percent. The bond proceeds of the November 1, 1991 issue earmarked to call the bonds totals $271,140. This amount plus approximately $397,109 sinking fund monies of the City will be used to call the $655,000 of bonds outstanding February 1, 1992. It is estimated the City will reduce its aggregate debt service payments by approximately $180,000 over the next ten years and obtained an economic gain (difference between the present values of the old and new debt service payments) of $32,000. I I Advance Refundina Issues - Prior Years I On April 29, 1987, the City issued general obligation refunding bonds in the amount of $875,000 to advance refund $1,250,000 outstanding 1984 general obligation bonds. The proceeds of the refunding issue plus additional cash from the debt service have been placed in an irrevocable escrow account and have been invested in U.S. Government obligations. The maturities of these investments coincide with the principal and interest payment dates of the refunded bonds and have been certified to be sufficient to pay all principal and interest on the refunded bonds when due, as required by applicable laws. Accordingly, the original refunded bonds have been removed and the new advance refunding bonds are reported on the financial statements. The City remains contingently liable in the remote possibility that the escrow account is insufficient to pay the refunded bonds. The balance of the refunded bonds outstanding at December 31, 1991 to be paid from the escrow is $835,000. I I I -21- I CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1991 I I Note 13: ADVANCE REFUNDING AND DEFEASANCE OF DEBT - CONTINUED During 1989, the City defeased the following bond issues: $2,300,000 G.O. Sewer Improvement Bonds dated June 1, 1972 $1,600,000 G.O. Sewer Improvement Bonds dated November 1, 1972 I I The City provided the cash from the debt service funds which was placed in an irrevocable escrow agreement and invested in U.S. Government Securities. The maturities of these investments coincide with the principal and interest payment dates of the defeased bond issues. Accordingly, the defeased bond issues are not reported as a liability of the City. The City does, however, remain contingently liable in the remote possibility that the escrow account is insufficient to pay the defeased bonds. The balance of the bonds to be paid from the escrow at December 31, 1991 is $220,000 which will all be paid in 1992. I I Note 14: TAX INCREMENT REVENUE BONDS I During 1991, the City issued $920,000 Tax Increment Revenue Bonds. The proceeds of the issue will be used to pay for public improvements stipulated in the development agreements. The bond proceeds and related improvement costs are reported in the Water ford III Tax Increment Improvement Capital Projects Fund. The bonds were issued at par value not to exceed $920,000. The bonds are not a general obligation of the City and are not backed by the full faith and credit or taxing powers of the city. The bonds are payable solely from the tax increments from the City's Tax Increment Financing District No.1. In addition, upon completion of the project, all excess bond proceeds will be repaid to the holder of the bonds as principal reduction. Interest at a rate of nine percent will accrue from the date of issuance of the bonds but will not be payable until tax increment is available at which time the increment will first be applied to the accrued interest. I I I The bonds payable have not been reported as a liability in the financial statements for the following reasons: I . The bonds issued are tax increment revenue bonds. I . The bonds are not backed by the full faith and credit of the city. . The City has no obligation to pay these bonds under any circumstances. I . The bonds will be repaid only to the extent that tax increments are generated from the Tax Increment Financing District. I I I I I -22- I I I I I I I I>, I I I I I I I I I I "I, I C.ITY OF SHOREW.OOD, MINNESO.,TA \ //' .. .... THE GENERAL FUND The General Fund is used to account. for resources. traditionally associated with 'go. v...ernment which.are not requ...l."red le.galt.y.., or by sound financ.ial m. anagement to.. b. e .. ,.' .... .. .. '. .. .... ...,.. ",1 .... ,f .. '" ",' "..... ',,' '" .. accounted for in other funds. It normally receives a greater variety an,d number of taxes and other general revenues than any other fund. The majority of the current day-to-day operations> will be. finaxiced from this fund. . I I I I I I I I I I I I I I I I I I I -23- CITY OF SHOREWOOD, MINNESOTA Exhibit A-2 I GENERAL FUND Continued STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE I BUDGET AND ACTUAL- CONTINUED YEAR ENDED DECEMBER 31, 1991 (With comparative amounts for the year ended December 31, 1990) 1991 1990 I Variance Favorable I Budaet Actual (Unfavorable) Actual EXPENDITURES - CONTINUED General government I Other general government services Personal services $ 97 580 $ 75 137 $ 22 443 $ 72 627 Supplies 10 675 12 682 (2 007) 11 820 I Other services and charges 15 700 17 965 (2 265) 8 286 Capital outlay 1 200 1 200 Total 125 155 105 784 19 371 92 733 I Total general government 657 144 665 152 (8 008) 616 929 Public safety I Police protection Other services and charges 368 602 368 102 500 354 150 Miscellaneous 12 050 14 956 (2 906) 23 999 Capital outlay 1 500 1 500 I Total 382 152 384 558 (2 406) 378 149 Fire protection I Other services and charges 88 527 88 527 79 749 Protective inspection Personal services 62 579 51 285 11 294 47 152 I Supplies 950 561 389 530 Other services and charges 27 550 23 412 4 138 26 906 Capital outlay 172 Total 91 079. 75 258 15 821 74 760 I Total public safety 561 758 548 343 13 415 532 658 Public works I General maintenance Personal services 100 951 110 753 (9 802) 94 847 Supplies 7 500 6 921 579 3 930 I Other services and charges 29 825 30 049 (224) 27 322 Capital outlay 6 000 5 800 200 187 967 Total 144 276 153 523 (9 247) 314 066 I Garage Supplies 150 202 (52) 282 Other services and charges 15 200 10 735 4 465 9 316 I Capital outlay 10 000 19 215 (9 215) Total 25 350 30 152 (4 802) 9 598 I I -26- I I CITY OF SHOREWOOD, MINNESOTA Exhibit A-2 GENERAL FUND Continued I STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL- CONTINUED YEAR ENDED DECEMBER 31, 1991 (With comparative amounts for the year ended December 31, 1990) I 1991 1990 Variance I Favorable Budaet Actual (Unfavorable) Actual EXPENDITURES - CONTINUED I Public works Streets and roadways Personal services $ 79 122 $ 67 983 $ 11 139 $ 75 048 Supplies 62 000 16 540 45 460 60 155 I Other services and charges 2 100 2 030 70 1 209 Capital outlay 132 400 6 980 125 420 198 961 Total 275 622 93 533 182 089 335 373 I Snow "and ice removal Personal services 21 317 29 761 (8 444) 9 465 Supplies 13 000 12 350 650 9 415 I Total 34 317 42 111 (7 794) 18 880 Traffic control I Supplies 4 000 3 059 941 4 020 Other services and charges 30 500 22 841 7 659 25 893 Total 34 500 25 900 8 600 29 913 I Sanitation and waste removal Personal services 7 337 1 508 5 829 7 258 Other services and charges 90 300 4 007 86 293 66 028 I Total 97 637 5 515 92 122 73 286 Tree maintenance I Personal services 12 568 13 320 (752 ) 11 716 Other services and charges 10 200 11 352 (1 152) 6 711 Total 22 768 24 672 (1 904) 18 427 I Total public works 634 470 375 406 259 064 799 543 Parks and recreation I Personal services 77 762 78 141 (379) 68 812 Supplies 15 000 10 645 4 355 14 831 Other services and charges 30 545 25 732 4 813 32 238 Capital outlay 25 205 27 650 (2 445) I Total parks and recreation 148 512 142 168 6 344 115 881 I Total expenditures 2 001 884 1 731 069 270 815 2 065 011 I I I -27- CITY OF SHOREWOOD, MINNESOTA GENERAL FUND STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - CONTINUED YEAR ENDED DECEMBER 31, 1991 (With comparative amounts for the year ended December 31, 1990) Exhibit A-2 Continued EXCESS REVENUE (EXPENDITURES) OTHER FINANCING SOURCES (USES) Operating transfers in Operating transfers out 1991 1990 Variance Favorable Budoet Actual (Unfavorable) Actual 5 275 712 5 481 046 5 205 334 5 107 984 25 000 25 000 195 000 (300 712 ) (510 712) (210 000) (275 712) (485 712) (210 000) 195 000 TOTAL OTHER FINANCING SOURCES (USES) EXCESS REVENUE AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER USES 5 (4 666) 302 984 5 (4 666) 1 256 859 953 875 FUND BALANCE, JANUARY 1 FUND BALANCE, DECEMBER 31 51 252 193 51 256 859 -28- 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 1 I I) I I) I 1 I I: I 1 CITY OF SHOREWOOD, MINNESOTA DEBT SERVICE FUNDS Debt service funds are usedtoaccount for the payment of ~terest and,principa1 on long- term ". general obligation debt other than debt issued for and serViced primarily by entetprise funds. 1984 Impr6vement (1987 Refundin2) Fund - This fund was established to account for th~ accumulation of resources for th~ payment of int~rest ~d principal on bonds issued for 1984 street ~d utility improy~ments. Shorewood O~ks Fund"!. This fund was established toaCCQunt for theacculmhation of resources for ih~ payment of interest . and principal on bonds issued for street arid utility 1mprbvements in the Shorewo09 Oaks developmept. . , , '. '0';' ,>< """" ',~... .. ...... .,' , I 1971 and 1972' Sewer ImprovelDept Fund :. This fund was established JO account for the accumulatibn of~espu'rcesfor the payment ofjnterest and princiJ?al on bonds issued for 1971 ~d 1~72 sanitary sewer improvements; . 1974' Sewer Iinpr6vel11ent Ft.nd-. This fund wc(s estaqlifhed to account f~r the aycumulation of resources for the payment of interest anp princIpal on bonds. issued for 1974 Sanitary sewer improvements; '-.:. /. < - SourteastWater (1986-lmprovementlFurtdJ. This fund waS established to account for the accUlpula~on of r~soUrces Jor the payment of interest and principal on bonds issued for 1986 watet improveJTl~nts.in the ~outheast area of the City. ' , 1991 Improvement 8Ild R~fundhl~Fund ~:This fund was e~~blished. to, account for the accumulation ofreso~rces forthepaymen(tiof intet~st and principal on bo~ds issued. for' the SE water treatm~nt plant, Pine Berld improvem,ents, Church Road improvem~nts, and to refund the 1986 improveIll,ent bonds.on *e call date. CITY OF SHOREWOOD, MINNESOTA DEBT SERVICE FUNDS COMBINING BALANCE SHEET DECEMBER 31, 1991 (With comparative totals as of December 31, 1990) 1984 1971 and Improvement 1972 (1987 Sewer Refundinal Shorewood Oaks Improvement ASSETS Cash and investments $536 717 $ 816 534 $ 2 552 Receivables Taxes Accrued interest 11 282 14 118 75 Special assessments Delinquent 1 311 Deferred 79 312 394 024 TOTAL ASSETS S627 311 S1 225 987 S 2 627 LIABILITIES AND FUND BALANCE LIABILITIES Accounts payable $ $ $ Deferred revenue 79 313 394 024 TOTAL LIABILITIES 79 313 394 024 FUND BALANCE Reserved for debt service 547 998 831 963 Unreserved - designated for fiscal fees 2 627 TOTAL FUND BALANCE 547 998 831 963 2 627 TOTAL LIABILITIES AND FUND BALANCE S627 311 S1 225 987 S 2 627 I I I I I I I I I I I I I I I I -29- I I I I I Exhibit B-1 I Southeast 1991 1974 Water Improvement Sewer (1986 and Total I Improvement Improvement) Refundina 1991 1990 $ 39 463 $568 311 $301 900 $2 265 477 $1 851 171 I 26 26 213 1 833 11 129 1 113 39 550 43 919 2 023 200 3 534 20 231 I 43 423 151 735 482 445 1 150 939 1 018 111 $ 86 768 $731 375 $785 458 $3 459 526 $2 933 645 I $ $ $ $ $ 164 I 37 523 151 735 482 445 1 145 040 1 026 644 37 523 151 735 482 445 1 145 040 1 026 808 I 49 245 579 640 303 013 2 311 859 1 902 837 2 627 4 000 I 49 245 579 640 303 013 2 314 486 1 906 837 I $ 86 768 $731 375 $785 458 $3 459 526 $2 933 645 I I I I I I I I -29- CITY OF SHOREWOOD, MINNESOTA DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE YEAR ENDED DECEMBER 31, 1991 (With comparative totals for the year ended December 31, 1990) 1984 Improvement (1987 Refundina\ 1971 and 1972 Sewer Shorewood Oaks Improvement REVENUE General property taxes Miscellaneous Special assessments Interest on investments $ $ $ 289 189 41 289 330 478 18 726 32 348 309 309 TOTAL REVENUE 51 074 EXPENDITURES Debt Service Principal Interest and service charges 85 000 63 273 65 000 38 712 1 682 1 682 (1 373) TOTAL EXPENDITURES 103 712 148 273 EXCESS REVENUE (EXPENDITURES) OTHER FINANCING SOURCES (USES) Proceeds of bonds issued Operating transfer out (52 638) 182 205 TOTAL OTHER FINANCING SOURCES (USES) EXCESS REVENUE AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER USES 182 205 (1 373) 4 000 (52 638) 600 636 649 758 FUND BALANCE, JANUARY 1 FUND EQUITY TRANSFER FUND BALANCE, DECEMBER 31 $547 998 $ 2 627 $831 963 -30- 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 1< I' I , I.... I I I CITY OF SHOREWOOD, MINNESOTA CAPITAL PROJECTS...FUNDS Capital projects funds are used to account for the acquisition and construction of major capital facilities other than those financed by 'enterprise fu;nds. CapitalImprovements 'Fund- This fund was. established to account for various..capital improvement projects which1l1a}T be financed without the need to issJ,le bonds. Park Capital ImprovelDent Fund ":This/fund accounts for park land a9quisition and other. capital improvements in the City parks. WaterfQrd.ID Tax. Increment ImJ?rovement fynd - ThiS: fund..was established to account forproceeds of tax increment bonds sold for the construction of an intersection at State Trunk Highway 7 and Old ~atket ,Roa~ and accompcwying improvem~nts within Tax Increment District No.1. / .. Equipment Replacement Fund :. This fund wa~ established for the purpose offunding the replacement of capital equ~pment. P\lblic'Works'Fa,cilityFund'-This fund was established to account fot the construction of a public w9fks facility and s::tlt-sand buildin&, and accompcwying site improvyments. st. Water Treatment Plant ConstJ:uction Fund - Th.) is.. fund. wa... s es....tablish. ecito account for the proceeds of bonds sold fqr' the construction of' a water treatment plCWt in the southeast area of the City. ' , ,) fine Bend ImJ?rovement Fund.. This fund was established to account for tbe proceeds of bonds sold for the construction of Pine Be~d improvements. Church Road ImproveIt\entlfund - This fund~as establish~ to account for the proceeds of bonds sold for !be construction pf Church Road improvem.ents. . ~hady Hills StOnD. Sewer tmprovementFu~d - ThIS fund wasyestablished to account .. . for the proceeds of ponds sold for the construction of Shady Hills Storm Sewer .' impro\';ements. . CITY OF SHOREWOOD, MINNESOTA CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET DECEMBER 31, 1991 (With comparative totals as of December 31, 1990) Water ford Park III Tax Capital Capital Increment Equipment Improvements Improvement Improvement Replacement ASSETS Cash and investments $485 473 $ 29 162 $ 64 073 $105 000 Receivables Accrued interest 8 316 524 8 650 Special assessments Delinquent 24 174 Deferred 100 010 TOTAL ASSETS $617 973 $ 29 686 $ 72 723 $105 000 LIABILITIES AND FUND BALANCE LIABILITIES Accounts and contracts payable $ $ $ 41 963 $ Deferred revenue 120 006 TOTAL LIABILITIES 120 006 41 963 FUND BALANCE Unreserved - designated for capital projects 497 967 29 686 30 760 105 000 TOTAL LIABILITIES AND FUND BALANCE $617 973 $ 29 686 $ 72 723 $105 000 I I I I I I I I I I I I I I I I -31- I I I I I Exhibit C-1 I SE Water Public Treatment Shady Hills Works Plant Pine Bend Church Road Storm Sewer Total I Facilitv Construction Improvement Improvement Improvement 1991 1990 $246 204 $ 76 496 $ 50 782 $141 833 $ 9 850 $1 208 873 $331 055 I 578 53 18 121 7 595 24 174 34 849 100 010 224 296 I $246 204 $ 76 496 $ 50 782 $142 411 $ 9 903 $1 351 178 $597 795 I $ 6 202 $ 16 309 $ 4 323 $ $ 595 $ 69 392 $ 5 710 I 120 006 246 497 6 202 16 309 4 323 595 189 398 252 207 I 240 002 60 187 46 459 142 411 9 308 1 161 780 345 588 I $246 204 $ 76 496 $ 50 782 $142 411 $ 9 903 $1 351 178 $597 795 I I I I I I I I I -31- Capital Improvements Park Capital Improvement Waterford III Tax Increment Improvement Equipment Replacement I I I I CITY OF SHOREWOOD, MINNESOTA CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE YEAR ENDED DECEMBER 31, 1991 (With comparative totals for the year ended December 31, 1990) REVENUE Miscellaneous special assessments Interest on investments Other Park dedication fees Donations Other $139 114 25 141 $ $ $ 1 696 31 320 TOTAL OTHER FINANCING SOURCES 932 000 105 000 I I I I I I I I I I I I I I I 18 750 70 7 500 TOTAL REVENUE 164 255 20 516 38 820 EXPENDITURES Capital outlay Professional services Construction costs TOTAL EXPENDITURES 2 706 2 706 238 051 702 009 EXCESS REVENUE (EXPENDITURES) OTHER FINANCING SOURCES Proceeds of bonds issued Operating transfers in 164 255 17 810 940 060 (901 240) 920 000 12 000 105 000 EXCESS REVENUE AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES FUND BALANCE, JANUARY 1 164 255 333 712 17 810 30 760 105 000 11 876 FUND EQUITY TRANSFER FUND BALANCE, DECEMBER 31 S497 967 S 29 686 S 30 760 S105 000 -32- I I I I I I I I I I I I I I I. "I I I I CITY OF SHOREWOOD, MINNESOTA ENTEllPRlSE FUNDS Enterprise funds are used to account for operati9fls/ that are financed and operated ill a manner simil~ to private business, wher~ the. costs of providing services to the general public are financed primarily thn>ugh user charges. Water Fund - This fund isus~ to account for. the activ~ties <pf the City water system. .'.. " "\, .....-. .".. .. Sewer Fund - This fund is used toacbount for the activities of the City/sanitary sewer system; . . Recyclina: Fuqd - This fund is used to accQunt for theaetivities.)ofthe City recycling , .".. .... '. , 'Program. Liquor Fund -l'his fund is used to account for th{ activities of the City's off-sale liq~or operation. !he operation cons~sts ofti'o off-sale liquor store site$. A portion of the net income from th~)operation is \lsed to fund general fund activities. CITY OF SHOREWOOD, MINNESOTA PROPRIETARY FUND TYPES COMBINING BALANCE SHEET DECEMBER 31, 1991 (With comparative totals as of December ASSETS CURRENT ASSETS Cash and investments Receivables Taxes Accounts Accrued interest Special assessments Delinquent Deferred Inventories, at cost Prepaid items TOTAL CURRENT ASSETS PROPERTY AND EQUIPMENT, AT COST LESS ACCUMULATED DEPRECIATION TOTAL PROPERTY AND EQUIPMENT OTHER ASSETS Bond discount, net of amortization TOTAL ASSETS LIABILITIES AND FUND EQUITY CURRENT LIABILITIES Accounts and contracts payable Salaries and compensated absences payable Deferred revenue Current portion of long-term debt TOTAL CURRENT LIABILITIES LONG-TERM LIABILITIES Bonds payable less current portion above TOTAL LIABILITIES FUND EQUITY Contributed capital Retained earnings (deficit) - unreserved and undesignated TOTAL FUND EQUITY TOTAL LIABILITIES AND FUND EQUITY -33- 31, 1990) I I I I I I I I I I I I I I I I I I I Water Sewer $ 84 757 $ 607 530 1 113 34 558 1 567 128 420 12 718 490 14 744 8 624 24 902 4 615 3 471 141 844 785 665 2 292 916 7 072 793 ( 462 497) ( 3 207 493) 1 830 419 3 865 300 919 $1 973 182 54 650 965 $ 9 069 $ 154 6 981 154 10 000 19 223 7 135 55 000 74 223 7 135 2 110 036 4 103 785 (211 077) 540 045 1 898 959 4 643 830 51 973 182 54 650 965 Water Sewer I I I I I I I I CITY OF SHOREWOOD, MINNESOTA PROPRIETARY FUND TYPES COMBINING STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS YEAR ENDED DECEMBER 31, 1991 (With comparative totals for the year ended December 31, 1990) OPERATING REVENUE Sales Less cost of sales $ $ GROSS PROFIT TOTAL EXPENSES 149 088 474 451 23 481 6 500 172 569 480 951 5 242 12 230 11 728 1 633 13 206 4 834 56 586 175 628 702 7 166 51 166 37 464 1 098 4 811 3 546 14 400 23 315 4 054 307 116 946 15 151 183 200 568 822 no 631) (87 871) 16 579 1 220 4 723 38 396 6 600 (6 493) 22 629 38 396 11 998 (49 475) ( 20 000) (8 002) (49 475) (203 075) 589 520 S(211 077) S540 045 I I I I I I I I Charges for services Permits and connection fees GROSS PROFIT AND REVENUE EXPENSES Personal services Supplies Repairs and maintenance Depreciation Professional services Contracted services Communication Insurance Water purchases Utilities Metropolitan Waste Control Commission disposal charges Rent Advertising Other OPERATING INCOME (LOSS) OTHER REVENUE (EXPENSES) General property taxes Property tax credits Interest on investments Other income Interest expense TOTAL OTHER REVENUE (EXPENSES) INCOME (LOSS) BEFORE TRANSFERS OPERATING TRANSFERS TO OTHER FUNDS NET INCOME (LOSS) RETAINED EARNINGS (DEFICIT), JANUARY 1 RETAINED EARNINGS (DEFICIT), DECEMBER 31 -34- I I I CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 4 723 38 396 I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA PROPRIETARY FUND TYPES COMBINING STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 1991 (With comparative totals for the year ended December 31, 1990) Water Sewer INCREASE IN CASH AND CASH EQUIVALENTS CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) Other income related to operations Adjustments to reconcile operating income to net cash provided by operating activities Depreciation and amortization (Increase) decrease in assets - Taxes Accounts Accrued interest Special assessments Inventory Prepaid itl!!ms Increase (decrease) in liabilities - Accounts payable Salaries and compensated absences payable Deferred revenue CASH PROVIDED BY OPERATING ACTIVITIES $(10 631) $(87 871) 6 600 56 586 175 628 (425) (1 295) (2 052) (380) (355) 2 892 8 676 (977 ) (619) 3 616 (4 681) 41 (199) (456) (744) 55 571 87 783 ( 20 000) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Operating transfers to other funds CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Bond principal paid Interest paid on revenue bonds Acquisition of property and equipment Assets acquired from other funds property taxes levied for debt service (10 000) (6 493) (85 612) 85 237 17 799 (118 659) 66 284 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES 931 (52 375) INCREASE IN CASH AND CASH EQUIVALENTS 41 225 73 804 CASH AND CASH EQUIVALENTS, JANUARY 1 43 532 533 726 CASH AND CASH EQUIVALENTS, DECEMBER 31 S 84 757 S607 530 -35- I I I CITY OF SHOREWOOD, MINNESOTA WATER FUND COMPARATIVE BALANCE SHEET DECEMBER 31, 1991 AND 1990 Exhibit 0-4 I I I I I I I I I I I I I I I I 1991 1990 ASSETS CURRENT ASSETS Cash and investments $ 84 757 $ 43 532 Receivables Taxes 1 113 688 Accounts 34 558 33 263 Accrued interest 1 567 1 187 Special assessments Delinquent 490 2 128 Deferred 14 744 15 998 Prepaid items 4 615 3 638 TOTAL CURRENT ASSETS 141 844 100 434 PROPERTY AND EQUIPMENT, AT COST 2 292 916 2 207 304 LESS ACCUMULATED DEPRECIATION (462 497) (406 096) TOTAL PROPERTY AND EQUIPMENT 1 830 419 1 801 208 OTHER ASSETS Bond discount, net of amortization 919 1 104 TOTAL ASSETS $1 973 182 $1 902 746 LIABILITIES AND FUND EQUITY CURRENT LIABILITIES Accounts and contracts payable $ 9 069 $ 5 453 Salaries and compensated absences payable 154 113 Deferred revenue 456 Current portion of long-term debt 10 000 10 000 TOTAL CURRENT LIABILITIES 19 223 16 022 LONG-TERM LIABILITIES Bonds payable less current portion above 55 000 65 000 TOTAL LIABILITIES 74 223 81 022 FUND EQUITY Contributed capital 2 110 036 2 024 799 Retained earnings (deficit) - unreserved and undesignated (211 077) (203 075) TOTAL FUND EQUITY 1 898 959 1 821 724 TOTAL LIABILITIES AND FUND EQUITY $1 973 182 $1 902 746 -36- I I I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Exhibit 0-5 WATER FUND COMPARATIVE STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS YEARS ENDED DECEMBER 31, 1991 AND 1990 OPERATING REVENUE Charges for services Permits and connection fees 1991 $ 149 088 23 481 TOTAL OPERATING REVENUE 172 569 EXPENSES Personal services Supplies Repairs and maintenance Depreciation and amortization Professional services Contracted services Communication Insurance Water purchases Utilities Other 5 242 11 728 13 206 56 586 702 51 166 1 098 4811 14 400 23 315 946 TOTAL EXPENSES 183 200 no 631) OPERATING INCOME (LOSS) OTHER REVENUE (EXPENSES) General property taxes Property tax credits Interest on investments Other income Interest expense 16 579 1 220 4 723 6 600 (6 493) 22 629 TOTAL OTHER REVENUE (EXPENSES) INCOME BEFORE TRANSFERS 11 998 OPERATING TRANSFERS TO OTHER FUNDS (20 000) (8 002) (203 075) $(211 077) NET INCOME (LOSS) RETAINED EARNINGS (DEFICIT), JANUARY 1 RETAINED EARNINGS (DEFICIT), DECEMBER 31 -37- 1990 $ 156 069 36 613 192 682 9 819 10 123 8 664 55 706 5 099 32 894 1 214 4 561 15 459 27 654 802 171 995 20 687 15 438 2 163 1 697 3 600 (7 293) 15 605 36 292 36 292 (239 367) $(203 075) CITY OF SHOREWOOD, MINNESOTA WATER FUND COMPARATIVE STATEMENT OF CASH FLOWS YEARS ENDED DECEMBER 31, 1991 AND 1990 INCREASE IN CASH AND CASH EQUIVALENTS CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) Other income related to operations Adjustments to reconcile operating income to net cash provided by operating activities Depreciation and amortization (Increase) decrease in assets - Taxes Accounts Accrued interest Special assessments Prepaid items Increase (decrease) in liabilities - Accounts payable Salaries and compensated absences payable Deferred revenue CASH PROVIDED BY OPERATING ACTIVITIES CASH FLOWS FROM NON CAP I TAL FINANCING ACTIVITIES Operating transfers to other funds CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Bond principal paid Interest paid on revenue bonds Acquisition of property and equipment Assets acquired from other funds Property taxes levied for debt service CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, JANUARY 1 CASH AND CASH EQUIVALENTS, DECEMBER 31 -38- 1991 Exhibit 0-6 I I I I I I I I I I I I I I I I I I I 1990 $(10 631) $ 20 687 6 600 3 600 56 586 55 706 (425) (1 295) 6 942 (380) (1 187) 2 892 (977 ) 195 3 616 2 350 41 (108) (456) 456 55 571 88 641 ( 20 000) (10 000) (6 493) (85 612) 85 237 17 799 931 4 723 41 225 43 532 S 84 757 (10 000) (7 293) (85 194) 74 695 17 601 no 191) 1 697 80 147 (36 615) S 43 532 I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA SEWER FUND COMPARATIVE BALANCE SHEET DECEMBER 31, 1991 AND 1990 ASSETS CURRENT ASSETS Cash and investments Receivables Accounts Accrued interest Special assessments Delinquent Deferred Prepaid items TOTAL CURRENT ASSETS PROPERTY AND EQUIPMENT,. AT COST LESS ACCUMULATED DEPRECIATION TOTAL PROPERTY AND EQUIPMENT TOTAL ASSETS LIABILITIES AND FUND EQUITY CURRENT LIABILITIES Accounts and contracts payable Salaries and compensated absences payable Deferred revenue TOTAL CURRENT LIABILITIES FUND EQUITY contributed capital Retained earnings - unreserved and undesignated TOTAL FUND EQUITY TOTAL LIABILITIES AND FUND EQUITY -39- Exhibit 0-7 1991 1990 $ 607 530 $ 533 726 128 420 126 368 12 718 12 363 8 624 13 520 24 902 28 682 3 471 2 852 785 665 717 511 7 072 793 6 954 134 (3 207 493) (3 031 865) 3 865 300 3 922 269 54 650 965 54 639 780 $ 6 981 $ 11 662 154 353 744 7 135 12 759 4 103 785 4 037 501 540 045 589 520 4 643 830 4 627 021 54 650 965 54 639 780 CITY OF SHOREWOOD, MINNESOTA SEWER FUND COMPARATIVE STATEMENT OF REVENUE, EXPENSES AND CHANGES IN YEARS ENDED DECEMBER 31, 1991 AND 1990 OPERATING REVENUE charges for services Permits and connection fees TOTAL OPERATING REVENUE EXPENSES Personal services Supplies Repairs and maintenance Depreciation Professional services Contracted services Communication Insurance Utilities Metropolitan Waste Control Commission disposal charges Other TOTAL EXPENSES OPERATING INCOME (LOSS) OTHER REVENUE (EXPENSES) Interest on investments NET INCOME (LOSS) RETAINED EARNINGS, JANUARY 1 RETAINED EARNINGS, DECEMBER 31 -40- Exhibit D-8 I I I I I I I I I I I I I I I I I I I RETAINED EARNINGS 1991 $474 451 6 500 480 951 12 230 1 633 4 834 175 628 7 166 37 464 3 546 4 054 307 116 15 151 568 822 (87 871) 38 396 (49 475) 589 520 S540 045 1990 $447 521 8 400 455 921 11 179 1 768 3 359 173 906 9 655 34 529 73 2 904 5 132 273 524 3 892 519 921 (64 000) 37 426 (26 574) 616 094 S589 520 I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA SEWER FUND COMPARATIVE STATEMENT OF CASH FLOWS YEARS ENDED DECEMBER 31, 1991 AND 1990 Exhibit D-9 1991 1990 INCREASE IN CASH AND CASH EQUIVALENTS CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) $(87 871) $(64 000) Adjustments to reconcile operating income to net cash provided by operating activities Depreciation 175 628 173 906 (Increase) decrease in assets - Accounts (2 052) (4 701) Accrued interest (355) (3 615) Special assessments 8 676 Prepaid items (619) (518) Increase (decrease) in liabilities - Accounts payable (4 681) (8 887) Salaries and compensated absences payable (199) 82 Deferred revenue (744) 744 CASH PROVIDED BY OPERATING ACTIVITIES 87 783 93 011 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of property and equipment (118 659) (94 859) Assets acquired from other funds 66 284 80 359 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES (52 375) (14 500) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 38 396 37 426 INCREASE IN CASH AND CASH EQUIVALENTS 73 804 115 937 CASH AND CASH EQUIVALENTS, JANUARY 1 533 726 417 789 CASH AND CASH EQUIVALENTS, DECEMBER 31 $607 530 $533 726 -41- -42- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Exhibit 0-10 LIQUOR FUND COMPARATIVE BALANCE SHEET DECEMBER 31, 1991 AND 1990 Store I Store II 1991 1990 1991 1990 ASSETS CURRENT ASSETS Cash and investments $153 277 $103 053 $148 985 $ 86 081 Receivables Accounts 84 125 Accrued interest 2 930 2 326 2 597 1 933 Inventories, at cost 47 220 43 507 131 693 117 060 Prepaid items 3 214 4 214 4 753 6 183 TOTAL CURRENT ASSETS 206 725 153 100 288 153 211 257 PROPERTY AND EQUIPMENT, AT COST 24 917 24 917 9 161 8 736 LESS ACCUMULATED DEPRECIATION ( 24 917) (24 917) (7 571) (6 954) TOTAL PROPERTY AND EQUIPMENT 1 590 1 782 TOTAL ASSETS 5206 725 5153 100 5289 743 5213 039 LIABILITIES AND RETAINED EARNINGS CURRENT LIABILITIES Accounts and contracts payable $ 30 202 $ 18 439 $ 58 328 $ 24 296 Salaries and compensated absences payable 2 438 2 617 3 936 2 780 TOTAL CURRENT LIABILITIES 32 640 21 056 62 264 27 076 RETAINED EARNINGS Unreserved and undesignated 174 085 132 044 227 479 185 963 TOTAL LIABILITIES AND RETAINED EARNINGS 5206 725 5153 100 5289 743 5213 039 I CITY OF SHOREWOOD, MINNESOTA Exhibit D-11 LIQUOR FUND I COMPARATIVE STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS YEARS ENDED DECEMBER 31, 1991 AND 1990 I Store I Store II 1991 1990 1991 1990 OPERATING REVENUE Sales $606 845 $525 807 $848 487 $776 680 I Less cost of sales 475 120 412 467 671 989 625 936 GROSS PROFIT 131 725 113 340 176 498 150 744 I EXPENSES Personal services 51 130 51 421 75 474 70 090 Supplies 1 732 1 605 3 293 3 253 Depreciation 617 620 I Professional services 1 120 1 830 1 120 1 830 Contracted services 1 571 1 048 888 395 Insurance 4 907 4 351 7 184 6 510 Utilities 4 793 4 886 5 904 7 169 I Rent 19 726 16 456 25 380 24 803 Advertisin'g 2 873 2 898 3 326 3 094 Other 4 198 1 364 5 479 951 I TOTAL EXPENSES 92 050 85 859 128 665 118 715 OPERATING INCOME 39 675 27 481 47 833 32 029 I OTHER REVENUE (EXPENSES) Interest on investments 9 127 6 952 8 047 6 707 Other income 3 239 1 088 636 2 344 I TOTAL OTHER REVENUE (EXPENSES) 12 366 8 040 8 683 9 051 INCOME BEFORE TRANSFERS 52 041 35 521 56 516 41 080 I OPERATING TRANSFERS TO OTHER FUNDS (10 000) (6 667) (15 000) (13 333) NET INCOME 42 041 28 854 41 516 27 747 I RETAINED EARNINGS, JANUARY 1 132 044 103 190 185 963 158 216 RETAINED EARNINGS, DECEMBER 31 S174 085 S132 044 S227 479 S185 963 I I I I I I I -43- -44- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Exhibit 0-12 LIQUOR FUND COMPARATIVE STATEMENT OF CASH FLOWS YEARS ENDED DECEMBER 31, 1991 AND 1990 Store I Store II 1991 1990 1991 1990 INCREASE IN CASH AND CASH EQUIVALENTS CASH FLOWS FROM OPERATING ACTIVITIES Operating income $ 39 675 $ 27 481 $ 47 833 $ 32 029 Other income related to operations 3 239 1 088 636 2 344 Adjustments to reconcile operating income to net cash provided by operating activities Depreciation 617 620 (Increase) decrease in assets - Accounts (84) (125) Accrued interest (604) (568) (664) (217) Inventory (3 713) (7 336) (14 633) (15 334) Prepaid items 1 000 (726 ) 1 430 (1 260) Increase (decrease) in liabilities - Accounts payable 11 763 (3 428) 34 032 (8 229) Salaries and compensated absences payable (179 ) 555 1 156 (975) CASH PROVIDED BY OPERATING ACTIVITIES 51 097 17 066 70 282 8 978 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Operating transfers to other funds (10 000) (6 667) (15 000) (13 333) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of property and equipment (425) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 9 127 6 952 8 047 6 707 INCREASE IN CASH AND CASH EQUIVALENTS 50 224 17 351 62 904 2 352 CASH AND CASH EQUIVALENTS, JANUARY 1 103 053 85 702 86 081 83 729 CASH AND CASH EQUIVALENTS, DECEMBER 31 $153 277 $103 053 $148 985 $ 86 081 I I I I I I I I I I I I "I I I I I I I CITY OF SHOREWOOD, MINNESOTA AGENCY FUNDS Agency fuIlds are established to account for assets held. by th~ City as an agent for others. Deferred Compensation Fund.. This fund)is u~ed to aCcount for employee payroll deferments and the related liability, that are deposited with. outside compani~s in accordance with the provisions of Internal. Revenue C0ge Section 457. I I I CITY OF SHOREWOOD, MINNESOTA DEFERRED COMPENSATION AGENCY FUND STATEMENT OF CHANGES IN ASSETS AND LIABILITIES YEAR ENDED DECEMBER 31, 1991 I ASSETS Investments for deferred compensation plan, at market I I LIABILITIES Deferred compensation funds held for participants I I I I I I I I I I I I I Balance Januarv 1 S 43 386 S 43 386 -45- Additions Deductions S 24 582 S 674 S 24 582 S 674 Exhibit E-1 Balance December 31 S 67 294 S 67 294 - I I I 1,\) I I I , I cl I I I I I I I I 'I \"'--~/ CITY OF SHOREWOOD, MINNESOTA GENERAL FIXED ASSETS ACCOUNT GROUP / General fixed assets are those fixed assets of a governmental jurisdiction which are not ... accounted for in an enterprise fund. To be classified asa fixed asset in.. this categury, a specific piece ofprpperty must meet three attribu.tes: 1. Taqgibl~ natu~ / . 2.. .~ life longer than theicurrent fiscal year '3. A s)gnificant value I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Exhibit F-1 GENERAL FIXED ASSETS ACCOUNT GROUP COMPARATIVE SCHEDULE OF GENERAL FIXED ASSETS - BY SOURCE DECEMBER 31, 1991 AND 1990 1991 1990 GENERAL FIXED ASSETS Land $ 449 326 $ 449 326 Buildings and structures 504 781 454 000 Improvements other than buildings 554 167 492 187 Furniture and equipment 805 179 791 766 TOTAL GENERAL FIXED ASSETS $2 313 453 $2 187 279 INVESTMENT IN GENERAL FIXED ASSETS General fund $ 805 179 $ 738 616 Capital projects funds 1 508 274 1 448 663 TOTAL INVESTMENT IN GENERAL FIXED ASSETS $2 313 453 $2 187 279 -46- CITY OF SHOREWOOD, MINNESOTA Exhibit F-2 GENERAL FIXED ASSETS ACCOUNT GROUP SCHEDULE OF GENERAL FIXED ASSETS - BY FUNCTION AND ACTIVITY DECEMBER 31, 1991 Buildings Improvements Furniture and Other Than and Total Land Structures Buildinqs Equipment FUNCTION General government $ 459 475 $ $300 000 $ 5 587 $153 888 Public works 1 007 900 153 500 150 681 52 428 651 291 Parks 846 078 295 826 54 100 496 152 TOTAL GENERAL FIXED ASSETS $2 313 453 $449 326 $504 781 $554 167 $805 179 -47- 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 CITY OF SHOREWOOD, MINNESOTA Exhibit F-3 GENERAL FIXED ASSETS ACCOUNT GROUP SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS - BY FUNCTION YEAR ENDED DECEMBER 31, 1991 General General Fixed Assets Fixed Assets Januarv 1 Additions Deductions December 31 General government $ 451 355 $ 8 350 $ 230 $ 459 475 Public works 898 911 131 989 23 000 1 007 900 Parks 837 013 9 065 846 078 TOTAL GENERAL FIXED ASSETS 52 187 279 5149 404 5 23 230 52 313 453 -48- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA GENERAL LONG-TERM DEBT ACCOUNT GROUP General obliga~(>n bonds and Q~her forms of long-term debt supported by general revenues are obligations of a goverp.mental unit as a w~ole and/not its individual constituent funds. The amount of unmatured long-term indebtedness which is backed by the full faith and credit of the gov~Q1ment(exc1uding ~terj:>rise fund debt) is recorded and accounted. for in a separate self-balancing account group titled the "General Long- Term Debt \Account Group~". Also,. This de])tgroup includes certain liabilities not e~pected to. b~ liquidated with expendable . available financial resources. , I I I I' I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Exhibit G-1 GENERAL LONG-TERM DEBT ACCOUNT GROUP COMPARATIVE STATEMENT OF GENERAL LONG-TERM DEBT DECEMBER 31, 1991 AND 1990 1991 1990 AMOUNT AVAILABLE FOR DEBT SERVICE Debt service funds $2 311 859 $1 902 837 AMOUNTS TO BE PROVIDED Future tax levies and assessments 1 051 051 758 961 TOTAL AMOUNT AVAILABLE AND TO BE PROVIDED 53 362 910 52 661 798 GENERAL LONG-TERM DEBT PAYABLE Compensated absences payable $ 16 910 $ 16 798 General obligation special assessment bonds 3 346 000 2 645 000 TOTAL GENERAL LONG-TERM DEBT PAYABLE 53 362 910 52 661 798 -49- REVENUE BONDS Water Revenue bonds 8.25-8.50 9/1/80 2/1/97 I I I I I I I CITY OF SHOREWOOD, MINNESOTA SCHEDULE OF BONDS PAYABLE DECEMBER 31, 1991 SPECIAL ASSESSMENT BONDS G.O Improvement refunding bonds of 1987 G.O Improvement bonds of 1989 G.O Improvement bonds of 1974 G.O Improvement bonds of 1986 G.O Improvement bonds of 1991 G.O Improvement bonds of 1991 Final Interest Issue Maturity Rates Date Date 5.20-6.60% 4/1/87 2/1/01 6.00-6.50 10/1/89 2/1/03 5.70 1/1/74 1/1/94 6.50-7.90 8/1/86 2/1/02 4.50-5.85 11/1/91 2/1/02 8.00 9/1/91 2/1/97 TOTAL TOTAL -50- 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 H-1 Bonds Authorized 12/31/91 and Issued Redeemed Outstandina $ 875 000 $ 260 000 $ 615 000 1 095 000 140 000 955 000 1 250 000 1 190 000 60 000 985 000 260 000 725 000 960 000 960 000 31 000 31 000 5 196 000 1 850 000 3 346 000 140 000 S5 336 000 75 000 Sl 925 000 65 000 S3 411 000 -50- -51- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA SCHEDULE OF DEBT SERVICE REQUIREMENTS DECEMBER 31, 1991 Totals Year Principal Interest 1992 $ 260 000 $ 192 296 1993 344 500 187 835 1994 341 000 167 109 1995 331 000 147 045 1996 327 000 126 839 1997 307 500 106 787 1998 300 000 87 780 1999 300 000 68 675 2000 295 000 49 458 2001 295 000 30 159 2002 235 000 12 659 2003 75 000 2 437 Total S3 411 000 Sl 179 079 I I Special Assessment I Bonds Principal Interest $ 250 000 $ 186 796 I 334 500 183 160 326 000 163 284 316 000 144 495 312 000 125 564 I 307 500 106 787 300 000 87 780 300 000 68 675 295 000 49 457 I 295 000 30 159 235 000 12 659 75 000 2 438 I S3 346 000 Sl 161 254 I I I I I I I, I I I I I Exhibit I-1 Revenue Bonds Principal Interest $ 10 000 $ 5 500 10 000 4 675 15 000 3 825 15 000 2 550 15 000 1 275 S 65 000 S 17 825 -51- I I I I I I I I I I I I I I I I ,Ire. I I CITY OF SHQREWOOD, MINNESOT/A SECTION III STATISTICAL SECTION I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA GENERAL FUND EXPENDITURES AND OTHER USES BY FUNCTION LAST TEN FISCAL YEARS Table 1 Fiscal Total General Public Public Parks and Misc/ Year Expenditures Government Safety Works Recreation Transfers 1982 $ 837 752 $195 936 $318 006 $190 180 $ 23 319 $110 311 1983 788 343 271 057 294 647 188 420 34 219 1984 1 203 475 346 048 329 096 485 771 42 560 1985 1 266 606 402 626 367 728 443 774 52 478 1986 1 400 755 419 658 410 016 522 066 49 015 1987 1 651 927 569 098 481 603 532 902 68 324 1988 1 898 594 646 923 523 717 669 990 57 964 1989 1 794 684 610 659 503 542 570 981 83 502 26 000 1990 2 065 011 616 929 532 658 799 543 115 881 1991 2 241 781 665 152 548 343 375 406 142 168 510 712 -52- CITY OF SHOREWOOD, MINNESOTA GENERAL FUND REVENUE AND OTHER SOURCES BY SOURCE LAST TEN FISCAL YEARS Table 2 Total General Licenses Fiscal General Fund Property and Inter- Year Revenues Taxes Permits Governmental Fines Miscellaneous 1982 $ 839 297 $ 412 004 $ 33 354 $322 258 $ 33 024 $ 38 657 1983 852 699 414 856 53 606 259 326 47 544 77 367 1984 1 269 836 801 800 49 030 303 653 64 354 50 999 1985 1 438 991 929 199 71 146 318 676 57 682 62 288 1986 1 652 307 1 040 984 117 050 356 308 70 678 67 287 1987 1 837 056 993 086 282 100 364 022 103 785 94 063 1988 1 984 148 1 087 099 330 408 368 288 91 385 106 968 1989 1 976 961 1 118 886 207 129 405 022 105 244 140 680 1990 2 367 995 1 437 140 203 828 273 780 124 234 329 013 1991 2 237 115 1 627 874 168 560 153 681 101 200 185 800 -53- 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 CITY OF SHOREWOOD, MINNESOTA Table 3 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (1) Collection Collection Percentage of Current Percentage of Prior of Total Fiscal Total Year's of Levy Year's Total Collections Year Levv Levy Collected Levy Collections to Levv 1982 $ 526 011 $ 501 143 95.27% $ 12 488 $ 513 631 97.65% 1983 584 959 561 533 96.00 23 007 584 540 99.93 1984 1 134 014 1 095 150 96.57 18 968 1 114 118 98.25 1985 1 171 628 1 130 776 96.51 25 072 1 155 848 98.65 1986 1 209 261 1 168 941 96.67 42 690 1 211 631 100.20 1987 1 254 420 1 211 819 96.60 32 265 1 244 084 99.18 1988 1 293 689 1 236 536 95.58 27 898 1 264 434 97.74 1989 1 300 881 1 249 332 96.04 46 405 1 295 737 99.61 1990 1 684 576 1 602 385 95.12 48 448 1 650 833 98.00 1991 1 856 988 *1 793 402 96.58 41 801 1 835 203 98.83 (1) Includes state paid property tax credits Includes $66,971 state aid reduction from the Homestead and Agricultural Credit Aid. * -54- CITY OF SHOREWOOD, MINNESOTA ASSESSED VALUATION, TAX LEVIES AND MILL RATES (shown by year of tax collectibility) I 1991 1990 1989 1988 (1 ) (1 ) (1) Assessed valuation/ Tax capacity $7 909 001 $7 033 863 $7 705 314 $55 691 698 Contribution to fiscal disparities pool (227 257) (209 164) (218 604) (1 699 452) Receivable from fiscal disparities pool 388 595 372 707 347 288 2 597 611 Taxable valuation/ Total tax capacity S8 070 339 S7 197 406 S7 833 998 S56 589 857 Tax levies General $1 840 663 $1 667 451 $1 282 956 $ 1 274 189 Debt service 16 325 17 125 17 925 19 500 Total Sl 856 988 Sl 684 576 Sl 300 881 S 1 293 689 Mill rates/Tax Capacity Rate General 20 274 20.093 16.282 22.481 Mills Debt service .180 .206 .227 .344 Total 20.454 20.299 16.509 22.825 Mills I I I I I I I I I I (1) As a result of 1988 legislation assessed valuation has been replaced by tax I capacity valuations. It is calculated based upon a state mandated computation from the estimated market value. The term, mill rate, has been replaced with the term, tax capacity rate, as a result of the 1988 legislation. 1982-1988 I information is stated in terms of assessed valuation and mill rates. 1989, 1990 and 1991 information is stated in terms of tax capacity and tax capacity rates. I I I I I -55- I I I Table 4 I 1987 1986 1985 1984 1983 1982 I $52 274 820 $50 700 422 $50 464 722 $47 316 709 $45 876 016 $40 822 234 I (1 457 783) (1 420 050) (1 355 365) (1 274 399) (1 105 205) (905 163) 2 242 637 1 934 251 1 918 366 1 643 793 1 415 133 1 092 383 I 553 059 674 551 214 623 551 027 723 547 686 103 546 185 944 541 009 454 I $ 1 172 220 $ 1 126 436 $ 1 068 803 $ 932 180 $ 542 579 $ 526 011 82 200 82 825 102 825 201 834 42 380 I 5 1 254 420 5 1 209 261 5 1 171 628 5 1 134 014 5 584 959 5 526 011 I 22.093 Mills 22.020 Mills 20.903 Mills 19.875 Mills 11. 746 Mills 12.826 Mills I 1. 550 1. 620 2.011 4.304 .918 23.643 Mills 23.640 Mills 22.914 Mills 24.179 Mills 12.664 Mills 12.826 Mills I I I I I I I I I -55- CITY OF SHOREWOOD, MINNESOTA PROPERTY TAX MILL RATES/TAX CAPACITY RATES - ALL OVERLAPPING GOVERNMENTS (PER $1000 OF ASSESSED VALUE FOR YEARS 1982-1988 AND TAX CAPACITY IN 1989 - 1991) (1 ) ( 1) Year School School Watershed Watershed Taxes District District District District Payable City County No. 276 No. 277 No. 3 No. 4 Misc. 1982 12.826 29.183 51. 316 48.850 .068 .449 4.384 1983 12.664 28.451 57.050 52.870 .086 .346 5.106 1984 24.179 29.689 58.686 54.352 .281 .289 5.318 1985 22.914 29.262 57.417 51.239 .061 .399 4.391 1986 23.640 29.688 60.209 59.058 .089 .198 5.378 1987 23.643 29.356 62.968 54.982 .133 .474 5.459 1988 22.825 31. 667 65.440 58.550 .092 .570 5.988 1989 16.509 (2) 27.101 59.285 49.139 .075 .445 5.387 1990 20.299 (2) 27.916 53.658 43.434 .120 .436 5.121 1991 20.454 (2) 30.114 56.401 46.828 .131 .449 6.855 (1) Includes vocational school (2) Information for 1989-1991 is stated in terms of tax capacity rates due to 1988 legislative changes as explained in Table 4. -56- 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 School District No. 276, Watershed District No. 3 97.777 103.357 118.153 114.045 119.004 121. 559 126.012 108.357 107.114 113.955 Totals School District No. 276, Watershed District No. 4 98.158 103.617 118.161 114.383 119.113 121. 900 126.490 108.727 107.430 114.273 Table 5 School District No. 277, Watershed District No. 3 95.311 99.177 113.819 107.867 117.853 113.573 119.122 98.211 96.890 104.382 -56- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA PRINCIPAL TAXPAYERS DECEMBER 31, 1991 Table 6 Percentage 1991 Tax of Total Taxpaver Tvpe of Business Capacitv Tax Capacitv Northern States Power Company utility $118 166 1.49% Ryan Construction Company Shopping Center 94 050 1.19 Minnetonka country Club Country Club 80 470 1.02 Minnegasco utility 56 262 .71 Two S Properties Commercial 45 141 .57 Shorewood Yacht Club Yacht Club 38 449 .49 Individual Residential 35 522 .45 Individual Residential 35 226 .45 Welsh Companies Commercial Office 32 554 .41 Individual Residential 26 987 -:M: Total S562 827 l,;,ll % -57- -58- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Table 7 SPECIAL ASSESSMENT LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Collection of Collection Percentage Current Percentage of Prior of Total Total Year's of Levy Year's Total Collections Year Levv Levv Collected Levv Collections To Levv 1982 $526 544 $377 798 71. 75% $ 25 942 $403 740 76.68% 1983 577 348 464 559 80.46 89 374 553 933 95.94 1984 501 439 412 661 82.30 48 136 460 797 91. 90 1985 468 020 372 783 79.65 71 787 444 570 94.99 1986 678 919 563 150 82.95 216 131 779 281 114.78 1987 551 886 539 633 97.78 32 122 571 755 103.60 1988 644 367 637 874 98.99 33 724 671 598 104.23 1989 500 116 497 733 99.52 66 916 564 649 112.90 1990 457 384 444 080 97.09 53 452 497 532 108.78 1991 365 577 345 886 94.61 28 677 374 563 102.46 I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN DECEMBER 31, 1991 Table 8 Market Value $353 840 300 $ 7 076 806 Debt Limit: 2.0\ of market value (Note A) Amount of Debt Applicable to Debt Limit: Total Bonded Debt Less: (Note B) Special Assessment Bonds General Obligation Water Revenue Bonds General obligation Storm Sewer Bonds $ 3 411 000 (3 315 000) (65 000) (31 000) Total Debt Applicable to Debt Limit Legal Debt Margin S 7 076 806 Note (A): M.S.A. Section 475.53 (Limit on Net Debt) "Subdivision 1. Generally. Except as otherwise provided in sections 475.51 to 475.75, no municipality, except a school district or a city of the first class, shall incur or be subject to a net debt in excess of 2.0 percent of the market value of taxable property in the municipality." Note (B): M.S.A. Section 162.18 (Bond: Municipal State Aid) "Subdivision 2. Not included in net debt of municipality for purpose of any statutory or charter limitation. Obligations issued hereunder may be authorized by resolution of the governing body without authorization by the electors, and shall not be included in the net debt of the municipality for the purpose of any statutory or charter limitation on indebtedness." M.S.A. Section 475.51 (Definitions:) "Subdivision 4. 'Net Debt' means the amount remaining after deducting from its gross debt the aggregate of the principal of the following: (1) Obligations issued for improvements which are payable wholly or partly from the proceeds of special assessments levied upon property specially benefitted thereby, including those which are general obligations of the municipality issuing them, if the municipality is entitled to reimbursement in whole or in part from the proceeds of the special assessments. (2) Warrants or orders having no definite or fixed maturity. (3) Obligations payable wholly from the income from revenue-producing conveniences. (4) Obligations issued to create or maintain a permanent improvement revolving fund. (5) Obligations issued for the acquisition and betterment of public water works systems, and public lighting, heating or power systems and of any combination thereof, or for any other public convenience from which a revenue is or may be derived. (6) Amount of all money and the face value of all securities held as a sinking fund for the extinguishment of obligations other than those deductible under this subdivision. (7) All other obligations, which under the provisions of the law authorizing their issuance, are not to be included in computing the net debt of the municipality." * After contribution and distribution from "fiscal disparity" legislation; Minnesota laws 1971, Extra Session, Chapter 24. -59- CITY OF SHOREWOOD, MINNESOTA Table 9 RATIO OF NET BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA Ratio of Net Net Bonded Debt Bonded Assessed (1) Less Amount to Assessed Debt Fiscal Estimated value/Tax Gross Reserved for Net Values/ per Year Population Capacitv Bonded Debt Debt Service Bonded Debt Tax Capacitv Capita 1982 4710 $41 009 454 $4 700 000 $3 414 747 $1 285 253 .0313:1 $ 272.88 1983 4720 46 185 944 4 090 000 1 432 874 2 657 126 .0575:1 562.95 1984 4750 47 686 103 4 730 000 1 383 783 3 346 217 .0702:1 704.47 1985 4750 51 027 723 4 115 000 1 523 958 2 591 042 .0508:1 545.48 1986 4788 51 214 623 4 500 000 3 054 867 1 445 133 .0282:1 301. 82 1987 4921 53 059 674 4 975 000 2 044 326 2 930 674 .0552:1 595.54 1988 5094 56 589 857 4 530 000 2 688 009 1 841 991 .0325:1 361. 60 1989 1990 1991 7 833 998 7 197 406 8 070 339 2 990 000 2 720 000 3 411 000 1 510 303 1 902 837 2 311 859 1 479 697 817 163 1 099 141 .1889:1 .1135:1 .1362:1 254.46 138.10 183.19 5815 5917 6000 (1 ) Gross bonded debt amounts in this Table are primarily general obligation special assessment bonds and revenue bonds whose principal source of funding will be sources other than general property taxes. -60- I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Table 10 RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT (1) TO TOTAL GENERAL EXPENDITURES* Percent of Debt Service Fiscal Total Total General to General Year Principal Interest Debt Service Expenditures* Expenditures 1982 $ 315 000 $297 888 $ 612 888 $1 765 701 34.71% 1983 605 000 272 167 877 167 1 683 087 52.12 1984 605 000 242 305 847 305 2 074 644 40.84 1985 610 000 282 298 892 298 2 158 904 41. 33 1986 590 000 268 077 858 077 2 258 832 37.99 1987 (2) 1 840 000 273 709 2 113 709 3 971 707 53.22 1988 435 000 274 636 709 636 2 608 230 27.21 1989 (3) 2 625 000 253 115 2 878 115 4 625 949 62.22 1990 260 000 175 098 435 098 2 500 109 17.40 1991 290 000 173 495 463 495 2 194 564 21.12 I I I I I I I I I I I I I I I I I I (1) Excludes G.O. Bonds reported in Enterprise Funds (2) Principal includes bonds refunded in 1987 (3) Principal included bonds defeased in 1989 * Includes General and Debt Service Funds -61- Direct Debt* city of Shorewood Overlapping Debt Hennepin County School District #276 School District #277 Vo-Tech District #287 Metropolitan Council Metropolitan Transit Commission Total Over- lapping Debt Total Direct and Overlapping Debt CITY OF SHOREWOOD, MINNESOTA COMPUTATION OF DIRECT AND OVERLAPPING DEBT DECEMBER 31, 1991 Table 11 City of Percent of Shorewood Net Debt Debt Applicable Share Total Debt Outstandina to Citv of Debt S 3 411 000 S 1 099 141 100.00% Sl 099 141 117 025 000 82 556 000 .82 676 959 6 016 000 4 713 000 21. 87 1 030 733 1.85 700 000 1.20 457 585 000 65 103 000 .43 279 943 7 550 000 4 343 000 .41 17 807 588 876 000 156 715 000 1.28 2 005 442 S592 287 000 S157 814 141 1. 97% S3 104 583 * Direct debt includes all debt because it is backed by the full faith and credit of the City even though it will be financed in part by special assessments or enterprise fund revenues. -62- 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 CITY OF SHOREWOOD, MINNESOTA Table 12 REVENUE BOND COVERAGE LAST TEN FISCAL YEARS Net Ratio of Net Fiscal Gross (1) Revenue Debt Service Revenue to Year Revenue Expenses Available Principal Interest Total Debt Service 1982 $ 21 617 $ 52 977 $(31 360) $ $ 5 642 $ 5 642 (5.558) to 1 1983 25 500 59 314 (33 814) 5 000 11 623 16 623 (2.034) to 1 1984 28 596 59 477 (30 881) 5 000 11 273 16 273 (1. 898) to 1 1985 39 855 53 151 (13 296) 5 000 10 898 15 898 ( .836) to 1 1986 58 430 59 095 (665) 10 000 10 524 20 524 ( .032) to 1 1987 108 043 81 642 26 401 10 000 9 578 19 578 1.349 to 1 1988 158 474 135 897 22 577 10 000 8 834 18 834 1.199 to 1 1989 176 719 110 987 65 732 10 000 8 125 18 125 3.627 to 1 1990 192 682 116 289 76 393 10 000 7 293 17 293 4.418 to 1 1991 172 569 126 614 45 955 10 000 6 493 16 493 2.786 to 1 (1) Excluding depreciation and interest on bonds -63- CITY OF SHOREWOOD, MINNESOTA PROPERTY VALUE, CONSTRUCTION AND BANK DEPOSITS LAST TEN FISCAL YEARS Fiscal Year (1) (1) Commercial Residential Construction Construction Number of Value Units Value $ 9 $ 1 336 000 258 449 26 3 259 626 883 000 16 2 975 396 35 6 529 612 85 686 80 15 779 286 163 23 397 136 401 004 157 29 040 667 89 16 949 136 20 000 82 16 252 990 69 14 044 120 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 Sources (1) City Planning and Inspection Department (2) County Assessor's Office Bank deposits are not shown as no banks are located within the City limits. -64- 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 Table 13 (2) Property Value Commercial Residential Total $ 7 123 374 $153 729 300 $160 852 674 7 956 000 170 185 200 178 141 200 8 552 700 174 641 300 183 194 000 9 095 600 186 399 000 195 494 600 9 171 300 190 679 600 199 850 900 10 317 900 197 382 800 207 700 700 11 167 900 217 337 000 228 504 900 11 351 300 253 363 500 264 714 800 11 820 800 299 565 500 311 386 300 11 997 100 341 843 200 353 840 300 -64- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA MISCELLANEOUS STATISTICS DECEMBER 31, 1991 Year of incorporation Form of government Fiscal year begins Area of city Miles of streets and alleys City streets Municipal state aid streets County roads State highway Sewer Lift stations Sewer rates - residential Miles of sewer lines Number of street lights Building permits issued in 1991 Number of permits Value Fire protection Contracted services with Mound and Excelsior Police protection Contracted services with South Lake Minnetonka Police Department Parks Number Acres Water Number of connections Average daily consumption Miles of watermain Daily capacity Number of fire hydrants Water rate per thousand gallons Employees Regular Part-time/seasonal Total Elections Registered voters last election Number of votes cast last election Percentage of registered voters voting -65- Table 14 1956 Council-Administrator Adopted January 1, 1956 January 1 6.0 Square Miles 37.5 9.3 1.7 2.7 18 $49.75/quarter 54 143 277 $15,710,361 5 79.7 744 234,000 gallons 14 4,680,000 gallons 160 $1.40/1000 gallons 20 14 34 =-= 3,919 1,754 44.8