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1998 - Comp. Annual Financial Report I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 1998 JAMES C. HURM, CITY ADMINIStRATOR REPORT PREPARED BY: DEPARTMENT OF FINANCE ALAN J. ROLEK, FINANCE DIRECTOR/TREASURER MEMBER OF GOVERNMENT FINANCE OFFICERS ASSOCIATION OF THE UNITED STATES AND CANADA I CITY OF SHOREWOOD, MINNESOTA TABLE OF CONTENTS DECEMBER 31, 1998 I I. INTRODUCTORY SECTION I Elected and Appointed Officials Organizational Chart Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting I I I I I I 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 Combining and Individual Fund and Account Group Financial Statements and Schedules General Fund Comparative Balance Sheets Statement of Revenue, Expenditures and Changes in Fund Balance - Budget and Actual I I Debt Service Funds Combining Balance Sheet Combining Statement of Revenue, Expenditures and Changes in Fund Balance (Deficit) I I I Capital Projects Funds Combining Balance Sheet Combining Statement of Revenue, Expenditures and Changes in Fund Balance (Deficit) Enterprise Funds Combining Balance Sheet Combining Statement of Revenue, Expenses and Changes in Retained Earnings Combining Statement of Cash Flows I Water Fund Comparative Balance Sheets Comparative Statements of Revenue, Expenses and Changes in Retained Earnings Comparative Statements of Cash Flows I Sewer Fund Comparative Balance Sheets Comparative Statements of Revenue, Expenses and Changes in Retained Earnings Comparative Statements of Cash Flows I I I Exhibit Page No. I - VIII 2 1 3-4 2 5-6 7 8 9 10 - 24 3 4 5 A-I A-2 25 26 - 31 B-1 B-2 32 - 33 34 - 35 C-l 36 - 38 C-2 39 - 41 D-l 42 - 43 D-2 44 - 45 D-3 46 - 47 D-4 48 D-5 49 D-6 50 D-7 51 D-8 52 D-9 53 I CITY OF SHOREWOOD, MINNESOTA TABLE OF CONTENTS DECEMBER 31, 1998 I I Recycling Fund Comparative Balance Sheet Comparative Statements of Revenue, Expenses and Changes in Retained Earnings Comparative Statements of Cash Flows I I Stonnwater Management Utility Fund Comparative Balance Sheets Comparative Statements of Revenue, Expenses and Changes in Retained Earnings Comparative Statements of Cash Flows I I I I Liquor Fund Comparative Balance Sheets Comparative Statements of Revenue, Expenses and Changes in Retained Earnings Comparative Statements of Cash Flows Combining Balance Sheets Combining Schedules of Revenue, Expenses and Changes in Retained Earnings (Deficit) Combining Schedules of Cash Flows 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 I General Long-tenn Debt Account Group Comparative Statement of General Long-tenn Debt Schedule of Bonds Payable Schedule of Debt Service Requirements Required Supplemental Infonnation (Unaudited) I I 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 Capacity Rates - Direct and 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 I I I I I I I Exhibit Page No. D-1O 54 D-ll 55 D-12 56 D-13 57 D-14 58 D-15 59 D-16 60 D-17 61 D-18 62 D-19 63 - 64 D-20 65 - 66 D-2l 67 - 68 E-l 69 E-2 70 E-3 71 F-l 72 F-2 73 - 74 F-3 75 - 76 G-l 77 1 78 2 79 3 80 4 81 - 82 5 83 - 84 6 85 7 86 8 87 9 88 10 89 11 90 12 91 13 92 - 93 14 94 I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA SECTION I INTRODUCTORY SECTION I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA ELECTED AND APPOINTED OFFICIALS DECEMBER 31, 1998 Elected Officials Term Expires Tom Dahlberg Gerald O'Neill Roger Champa Kristi Stover John Garfunkel Mayor Council Member Council Member Council Member Council Member 1998 1998 1998 2000 2000 Appointed Officials James C. Hunn Alan J. Rolek City Administrator Finance Director/Treasurer -1- ------------------- ORGANIZATIONAL CHART - CITY OF SHOREWOOD I CITIZENS I I CITY ATTORNEY ~:: - ...... CITY COUNCIL BOARDS & COMMISSIONS " - PLANNING COMMISSION CITY ADMINlSTRATOR I - PARK COMMISSION I I I I I I I LIQUOR ENGINEERING FINANCE ADMINISTRA TION PLANNING PUBLIC PUBLIC SAFETY & ZONING WORKS (CONTRACT) - Off-Sale - Engineering Svcs. - Personnel - General Government - Planning - Building & Grounds - Police - 4-City Joint Retail - Project Mgmt. - Accounting - Licensing - Zoning - Recycling (Contract) Services * - Payroll - Elections Administration - Tree Maintenance - Patrol - Investments - Records - Propelty - Park Maintenance - Disaster - Utility Billing - Legal Publications Records - Street Mainenance Preparedness - Accts. Payable - Public Information - Inspection - Equipment Maintenance - Investigation - Accts. Recble. - Recreation Programs - Stormwater System - Public Service - Special - Park Planning - Street Lighting - Fire - Excelsior/ Assessments (Contract) - Sanitation/Weeds Mound - Budgeting - Assessor (Contract) - Janitor Services - Fire prevention/ -MIS - Cable TV - (Contract) firefighting - Purchasing Franchise - Utility Maintenance - Animal Control - (Contract) ChanJwsscn * Mayor is City's representative on joint governing board. December, 1997 I I I I I May 7, 1999 I Honorable Mayor and Members of the City Council City of Shorewood, Minnesota Councilmembers: I The Comprehensive Annual Financial Report of the City of Shorewood, Minnesota for the fiscal year ended December 31, 1998, is hereby submitted. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designated to present fairly the [mancial position and results of operations of the various funds and account groups of the City. All disclosures necessary to enable the reader to gain an understanding of the City's [mancial activities have been included. I I I The Comprehensive Annual Financial Report is presented in three sections: Introductory, Financial and Statistical. The Introductory section includes this transmittal letter, the City's organizational chart and a list of City officials. The Financial section includes the general purpose [mancial statements and the combining and individual fund and account group [mancial statements and schedules, along with the auditor's report on the [mancial statements. The Statistical section includes selected [mancial and demographic information, generally presented on a multi-year basis. I I The organization, form and contents of this report were prepared in accordance with the standards prescribed by the Governmental Accounting Standards Board, the Government Finance Officers Association of the United States and Canada, the American Institute of Certified Public Accountants, and the Minnesota State Auditor's Office. I This report includes all funds and account groups of the City. The fund types included are governmental and proprietary. Within the account groups are general fixed assets and general long-term debt. The City provides its residents and businesses with a full range of municipal services consisting of police, fire, public works, parks and general administrative services. The City also operates five enterprises: a water utility, sewer utility, recycling utility, stormwater management utility and an off-sale liquor operation, consisting of three store sites. I The criteria used in determining the component units to be included with the City as part of its reporting entity is consistent with those required by the Governmental Accounting Standards Board Statement No. 14, "The Financial Reporting Entity". Based on these criteria, the City has no component units. All funds and account groups of the City are included in this report, and no component units are reported herein. I I I I I i I I ECONOMIC CONDITION AND OUTLOOK I The City of Shore wood is a suburb of the City of Minneapolis and is located 25 miles southwest of the central business district on the southern shore of Lake Minnetonka. The City is predominantly a residential community with limited commercial businesses and two commercial shopping malls. The City is 6 square miles in area and has an estimated population of 6,955. I While the City has experienced an accelerated rate of growth in residential development during the 1980's, the growth rate has slowed during the 1990's. The City, which is currently 90% developed, will continue to experience growth in it's residential base in the future, but because of the limited availability of large tracts of land, this will come at a reduced rate and will be much smaller developments than in the past. I I MAJOR INITIATIVES I FINANCIAL AND MANAGEMENT EMPHASIS I Emphasis on Governance The City Council in its leadership role is effectively establishing a focus for city government in Shorewood. The Council has committed to a strong set of values by which decisions are to be made. It has adopted a Statement of Purpose and has established overall goals and expectations for the City. It has identified issues facing the City and prioritized them so that the staff can efficiently and effectively allocate time and resources. The City Council's calendar consists of three phases. The first phase is Planning, which includes review of the previous years work plan, the City's Comprehensive Plan Executive Summary and the statements of Purpose and Values. It also includes identification and prioritization of issues for the next twelve months. The second phase is that of Prograrnming and Capital Finance Planning. Each year the five-year Capital Improvement Program is reviewed and updated based upon priorities established in phase one. 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. A budget format is being utilized which provides information and analytical data to the City Council and other readers. It defmes departmental missions and sets objectives for the budget year. In addition, it measures services provided and identifies the net affect each departmental budget has on property taxes. Emphasis on System Improvements The City continues to improve on communications systems by implementing the Communications Plan adopted in 1997. The Communications Program includes: · Redesigned public notices which meet legal requirements yet are easier to read and understand. · Redesigned City newsletter which is distributed monthly rather than quarterly, as had been the practice previously. · Press releases on current issues, projects and special events. · Emphasis on informal information meetings. · Improved City web page to make it more aesthetically pleasing and packed with useful information. · Utilization of the cable access channel bulletin board to inform the public of city activities. · Public usage of the "Shoreline" phone message line is promoted heavily. · Numerous educational brochures are produced and mailed with the monthly newsletter. · Public feedback forms for those who have had contact with the City are provided to encourage the public to share their experience with city services and personnel. · A voice mail information system accessible by residents 24 hours a day to receive timely information on city services and events. I I I I I I I I I I ii I I I I I Emphasis on Public Improvements and Programs The City Council appointed a citizen task force on the issue of land conservation in the City. The group produced an extensive report on the topic in December, 1998 for the City Council to consider. The report included numerous concrete recommendations regarding ongoing land conservation efforts. Damaging storms which occurred in the early spring of 1998 had a major affect on City operations. The Public Works crews worked on storm damage cleanup and tree and brush removal for several months following the storms. Ninety percent of the cost of the cleanup costs (about $95,000) will be recovered through federal and state disaster relief funding. Updating the Comprehensive Plan and undertaking a stormwater management plan were major efforts in 1998. Both are to be completed in 1999. A clear water inflow and infiltration control study of the City's sewer system was done with the aid of a matching funds grant from the Metropolitan Council. Capital improvements in 1998 included upgrading the audio and video equipment in the City Council Chambers for presentations and for taping and cablecasting of City Council meetings. Two new dump trucks purchased in 1997 to replace aging trucks were placed in service in early 1998. Strawberry Lane was improved through a reclamation process that involved grinding and mixing of bituminous surfacing with underlying aggregate materials and by adding a 3" bituminous overlay. The Park Commission spent 1998 establishing a new process for considering trails in Shorewood. The process involves citizens early and often in deciding when and if trails are appropriate along streets and roadways. A community visioning session, telephone survey and a series of focus group meetings were undertaken to begin the process. Steps in the process include public open forums, walks with citizens along potential trail routes, and citizen involvement in trail design during 1999. Emphasis on Efficiently, Effectively Meeting Service Needs Shorewood is committed to working cooperatively with area governmental jurisdictions to carefully consider optional methods to effectively deliver public services as efficiently as possible. The City has various contractual arrangements with other governmental jurisdictions and with private enterprise for providing many of these services. As an active participant in the Lake Minnetonka Area Cooperating Cities group, the City is involved in cooperative employee training, subregional housing planning, animal control, disaster preparedness and other areas of mutual concern. The Lake Minnetonka area cities continue to work jointly to address these mutual problems. I I I I I I I I FINANCIAL INFORMATION I INTERNAL CONTROLS I 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 offmancial 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. I I BUDGETING CONTROLS I 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 legal level of budgetary control is established at the department level, but management control is exercised at the line item level. I I iii I I As demonstrated by the statements and schedules included in the fmancial section of this report, the City continues to meet its responsibility for sound fmancial management. I GENERAL GOVERNMENT FUNCTIONS I The following schedule presents a summary of General Fund and Debt Service Fund revenues for the fiscal year ended December 31, 1998 and the amount of increases or decreases in relation to the prior year's revenues. I REVENUES AND OTHER FINANCING SOURCES INCREASE PERCENT (DECREASE) AMOUNT OF TOTAL FROM 1997 General Property Taxes $2,111,143 65.40% $94,122 Licenses and Permits 223,248 6.92% (13,424) Intergovernmental 532,359 16.49% 82,174 Charges for Services 34,296 1.06% (28,913) Fines and Forfeitures 73,337 2.27% (3,003) Special Assessments 104,108 3.22% (34,019) Interest on Investments 106,826 3.31% (12,656) Miscellaneous 29,938 0.93% (10,864) Operating Transfers In 13,000 0.40% 13,000 TOTAL $3,228,255 100.00% $86,417 I I I I I I Overall revenues increased by $86,417 from 1997 to 1998. The largest increase in revenue in 1998 from 1997 was in general property taxes. There are two reasons for this. First, the property tax levy for general purposes increased by $77,567, or 4.55%, from 1997. This was a planned, budgeted increase for the year, and tax collections, at 99.87%, were on target with budget. Second, tax increments collections from Tax Increment Financing District No. 1 increased significantly from 1997. This was due to newly constructed commercial buildings in the district. The new buildings added new value to the district, which resulted in a corresponding increase in the amount of tax increments generated. The increments will be used to retire the revenue bond debt incurred for improvements within the tax increment district. Intergovernmental revenue grew in 1998 due mainly to a one-time receipt ofFEMA disaster relief aid for damage sustained storms in Spring, 1998. Budgeted operating transfers into the General Fund also increased from 1997 to 1998 I I I Licenses and permits experienced a decrease in 1998. While building permit revenue exceeded budget in 1998, these revenues did not match the brisk activity in 1997. Factors contributing to 1997 levels include the approval of two new housing developments, sustained low interest rates and mild weather through the year end. Decreased charge outs for engineering services accounted for the decrease in the Charges for Services category. Interest revenue fell in 1998 due to lower interest rates and lower available cash balances. I I I I iv I I I I I I I I I I I I I I I I I I I I Revenues also decreased in the special assessment, fmes and forfeitures and miscellaneous revenue areas. There have been no new special assessments projects in the last several years, thus, the amount of special assessments collected is decreasing each year. Despite the addition of a full-time traffic control officer, fmes and forfeiture revenue fell for the year. It may be interpreted that the addition of this position has contributed to a decrease in traffic violations. The following table presents a summary of General Fund and Debt Service Fund expenditures for the fiscal year ended December 31, 1998 and the amount of increases or decreases in relation to the prior year's expenditures. EXPENDITURES AND OTHER USES AMOUNT 0/0 OF TOTAL INCREASE (DECREASE) FROM 1997 CURRENT: General Government Public Safety Public Works Parks and Recreation CAPITAL OUTLA Y: DEBT SERVICE: Principal Interest OPERA TING TRANSFERS: $957,685 28.15% $149,793 788,253 23.17% 44,636 505,240 14.85% 53,484 110,287 3.24% (4,617) 3,655 0.11% (10,454) 334,437 9.83% (3,166) 213,751 6.28% 16,704 489,025 14.37% 44,630 $3,402,333 100.00% $291,010 TOTAL Overall expenditures were significantly higher in 1998 from 1997. This is largely due to three factors: the payment of a court awarded settlement in a lawsuit, increased police and fire costs and expenses incurred to clean up storm damage. General Government expenditures increased in 1998 from 1997 due largely additional legal services charges and the payment of the court award. Assessing service costs also increased due to a change in the provider of this service. Public Safety expenditures also increased significantly in 1998. The South Lake Minnetonka Public Safety Department received a grant through the federal COPSFAST program in 1995. The amount of the grant is reduced by 25% each year of the program. The reduction in the amount of the grant in 1998 resulted in an increase in the city's share of the cost for the position created through the grant. The cost of the fire protection contracts also increased significantly in 1998. Public Works expenditures were higher in 1998 due mainly to storm cleanup costs. Park and recreation expenditures were slightly lower in 1998. Capital outlay was also somewhat lower for the year. The City Council has continued its plan to accumulate resources for future capital equipment and improvement projects. These amounts were transferred to various capital projects funds and will be applied to future equipment acquisitions and capital improvements. Operating transfers increased significantly from 1997. Budgeted transfers for capital improvement purposes increased in 1998 from $444,395 to $489,025. v I I GENERAL FUND BALANCE I The General Fund balance decreased by $120,864 in 1998, a reduction of7.94%. The fund balance as of December 31, 1998 is $1,458,046. The chief reason for this reduction was the payment of a court awarded settlement. Except for the payment of this award, 1998 expenditures exceeded revenues by $4,383. The 1998 budget included the use of $71 ,898 from the general fund balance. The fund balance is designated for working capital requirements through the fIrst six months of the year. It is important for the City to maintain the an adequate fund balance as a reserve to meet expenditures in the General fund until property tax proceeds are received in July. The fund balance now stands at 51.45% of the current year budget. The policy of the City is to maintain a fund balance at 40% to 50% of the current budget. The City Council will continue to manage the fund balance at this level. I I I ENTERPRISE OPERATION The City's enterprise fund activities for 1998 are summarized as follows: I OPERATING REVENUES OPERATING EXPENSES OPERATING INCOME (LOSS) I Water Sewer Recycling Stormwater Liquor Tonka Bay Waterford Center Shorewood Plaza $311,925 751,640 91,257 45,591 $305,310 676,175 80,348 100,126 $6,615 75,465 10,909 (54,535) I 112,607 142,928 170,331 95,651 183,718 148,665 16,956 (40,790) 21,666 I I Generally accepted accounting principles require the depreciation of contributed assets, which results in net losses in some cases. However, past and present City fmancial 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. I I The Liquor Fund has experienced a net operating loss in each of the last four years; however, the operation has a net income after other income sources are included. The Waterford Center location, which was opened in 1995, has experienced signifIcant losses each year and is the sole reason for the net operating losses in the Liquor Fund. One major reason for the losses is the excessive floor space and rents that the operation must support. The Liquor Committee is exploring avenues to eliminate future losses through reduction of floor space or through the closure of the location. I I DEBT ADMINISTRATION I As of December 31, 1998, the City's debt outstanding totaled $3,455,000. Of this total, $545,000 are general obligation special assessment bonds issued to fmance the construction of sanitary sewer, street, water and storm sewer improvements. I I vi I I I The City issued $2,780,000 in general obligation water revenue bonds in 1995 and 1996 to fmance water system extensions and improvements. Total outstanding general obligation water revenue bonds at year-end is $2,470,000. The bonds will be repaid from special assessments on affected properties and from Water Fund revenues. I I In 1990, Tax increment revenue bonds of $920,000 were issued for construction of public improvements in the Waterford commercial development. These bonds were sold directly to the developer. As the developer has direct control over the pace of development, retirement of the debt was to be made on a "pay-as-you-go" basis from tax increments generated by the development. Because these revenue 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. The City fIrst received tax increments on this district in 1994. At year end, $440,000 of this issue remained outstanding. The District will expire in April, 2000. I I The City's bond rating as rated by Moody's Investor Service is "A 1 " on general obligation bond issues. Reasons cited by Moody's for this rating include the development and implementation of a fIve-year capital improvement plan, low outstanding debt, sound fmancial management, and anticipated maintenance of low debt ratios by the City. I CASH MANAGEMENT I 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 favorable rates. Interest earnings are then allocated to the participating funds. During 1998, the City of Shore wood earned $359,254 in interest revenue. I RISK MANAGEMENT I I 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's compensation program is ajoint self-insurance plan designed to lower and stabilize cities worker's compensation costs and to assure that cities have a source of coverage available. I 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 fmancially strong. I OTHER INFORMATION I INDEPENDENT AUDIT I 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 fmancial statements and schedules is included in the fmancial section of this report. I CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING I The Government Finance Officers Association of the United States and Canada (GFOA) awarded a CertifIcate of Achievement for Excellence in Financial Reporting to the City of Shorewood for its comprehensive annual fmancial report for the fiscal year ended December 31, 1997. I I vii I In order to be awarded the Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized comprehensive annual fmancial report, whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. I A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to GFOA to determine its eligibility for another certificate. I I ACKNOWLEDGMENTS We would again like to acknowledge the efforts of the city staff, especially the Finance Department staff, and the City's independent auditor, without whose assistance and cooperation the timely preparation of the Comprehensive Annual Financial Report would not have been possible. I I Respectfully Submitted, I James C. Hurm City Administrator Alan J. Rolek Finance Director/Treasurer I I I I I I I I I I I viii I I I I I I I I I I I I I I I I I I I I Certificate of Achievement for Excellence in Financial Reporting Presented to City of Shorewood, Minnesota For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 1997 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. !J~~e~ Pfh/~ Executive Director I I I I I I I I I I I I I I I I / I I I CITY OF SHOREWOOD, MINNESOTA SECTION II FINANCIAL SECTION I I I I I I I I I I I I I I I I I I Certified Public Accountants & Comultants 7241 Ohms Lane Suite 200 Minneapolis, MN 55439 INDEPENDENT AUDITOR'S REPORT Honorable Mayor and City Council City of Shorewood, Minnesota We have audited the accompanying general purpose fmancial statements of the City of Shore wood, Minnesota, as of and for the year ended December 31, 1998 as listed in the table of contents. These general purpose fmancial statements are the responsibility of the City of Shorewood, Minnesota's management. Our responsibility is to express an opinion on these general purpose fmancial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to fmancial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose fmancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose fmancial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose fmancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose fmancial statements referred to above present fairly, in all material respects, the fmancial position of the City of Shorewood, Minnesota as of December 31, 1998, and the results of its operations and the cash flows of the Proprietary Fund Type for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated March 18, 1999 on our consideration of the City's internal control over fmancial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. Our audit was performed for the purpose of forming an opinion on the general purpose fmancial statements taken as a whole. The combining and individual fund fmancial statements listed in the table of contents are presented for the purpose of additional analysis and are not a required part of the general purpose fmancial statements of the City of Shorewood, Minnesota. Such information has been subjected to the auditing procedures applied in the audit of the general purpose fmancial statements and, in our opinion, is fairly stated in all material respects in relation to the general purpose fmancial statements taken as a whole. March 18, 1999 Minneapolis, Minnesota ~dl ~/ ~ .J ~, LLP ABDO, ABDO, EICK & MEYERS, LLP Certified Public Accountants I 612.835.9090 · Fax 612.835.3261 I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA GENERAL PURPOSE FINANCIAL STATEMENTS The general purpose financial statements and notes to the financial statements are intended to provide an overview and broad perspective of the City's financial position and operations. These statements present a summary set of information needed to control and analyze current operations to determine compliance with legal and budgetary limitations and to assist in financial planning. The following general purpose financial statements are presented: Combined Balance Sheet - All Fund Types and Account Groups Comb,ined Statement of Reyenue, 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 Eamings- All Proprietary Fund Types Combined Statement of Cash Flows - All Proprietary Fund Types -3- I I Governmental Fund Types I Debt Capital I General Service Projects $ 1,523,052 $ 421,698 $ 1,833,825 I 28,891 5,919 29,745 46,806 147 I 27,024 3,918 202,266 5,308 10,833 I I I $ 1,640,524 $ 630,030 $ 1,868,878 I $ 61,784 $ 2,786 $ 74,518 28,220 I 60,257 32,217 202,266 5,308 I I 182,478 205,052 79,826 I I 426,621 I 1,458,046 1,811,825 (1,643) (22,773) I 1,458,046 424,978 1,789,052 $ 1,640,524 $ 630,030 $1,868,878 I I CITY OF SHOREWOOD , MINNESOTA COMBINED BALANCE SHEET ALL FUND TYPES ACCOUNT GROUPS DECEMBER 31, 1998 (With Comparative Totals for December 31, 1997) ASSETS AND OTHER DEBITS ASSETS Cash and temporary investments Accrued interest receivable Delinquent taxes receivable Accounts receivable Special assessments receivable Note receivable Inventories, at cost Prepaid items Fixed assets, net Bond discount, net OTHER DEBITS Amount available in debt service funds Amounts to be provided for debt retirement TOTAL ASSETS AND OTHER DEBITS LIABILITIES, EQUITY AND OTHER CREDITS LIABILITIES Accounts and contracts payable Salaries and compensated absences payable Refundable deposits payable Deferred revenue Lease purchase payable General obligation bonds payable Tax increment bonds payable General obligation revenue bonds payable TOTAL LIABILITIES EQUITY AND OTHER CREDITS Investment in general fixed assets Contributed capital Retained earnings Unreserved Fund balance (deficit) Reserved Unreserved Designated Undesignated TOTAL EQUITY AND OTHER CREDITS TOTAL LIABILITIES, EQUITY AND OTHER CREDITS See Notes to Financial Statements. CITY OF SHOREWOOD, MINNESOTA I COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE ALL GOVERNMENTAL FUND TYPES I YEAR ENDED DECEMBER 31, 1998 (With Comparative Totals for the year ended December 31, 1997) I Debt Capital I General Service Projects REVENUE Property taxes $ 1,776,853 $ 334,290 $ I Licenses and permits 223,248 Intergovernmental 532,359 39,465 Charges for services 34,296 I Fines and forfeitures 73,337 Special assessments 104,108 1,842 Interest on investments 87,794 19,032 96,630 I Miscellaneous 29,938 31,000 TOTAL REVENUE 2,757,825 457,430 168,937 I EXPENDITURES Current I General government 957,685 Public safety 788,253 Public works 505,240 I Culture and recreation 110,287 Capital outlay 3,655 609,036 Debt service Principal 19,437 315,000 I Interest and service charges 18,107 195,644 TOTAL EXPENDITURES 2,402,664 510,644 609,036 I EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES 355,161 (53,214) (440,099) OTHER FINANCING SOURCES (USES) I Operating transfers in 13,000 758,275 Operating transfers out (489,025) (292,250) I TOTAL OTHER FINANCING SOURCES (USES) (476,025) 466,025 EXCESS (DEFICIENCY) OF REVENUE AND OTHER I FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES (120,864) (53,214) 25,926 I FUND BALANCE, JANUARY 1 1,578,910 478,192 1,763,126 FUND EQUITY TRANSFER IN 23,204 I FUND EQUITY TRANSFER OUT (23,204) FUND BALANCE, DECEMBER 31 $ 1,458,046 $ 424,978 $ 1,789,052 I See Notes to Financial Statements. -5- I CITY OF SHOREWOOD, MINNESOTA Exhibit 3 I STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL I GENERAL FUND YEAR ENDED DECEMBER 31, 1998 Variance - I Favorable Budget Actual (Unfavorable) I REVENUE General property taxes $ 1,782,818 $ 1,776,853 $ (5,965) I Licenses and permits 172,300 223,248 50,948 Intergovernmental 525,877 532,359 6,482 Charges for services 71,500 34,296 (37,204) I Fines and forfeitures 90,000 73,337 (16,663) Interest on investments 85,000 87,794 2,794 Miscellaneous revenue 21,500 29,938 8,438 I TOTAL REVENUE 2,748,995 2,757,825 8,830 EXPENDITURES I Current General government 840,858 957,685 (116,827) I Public safety 811,809 788,253 23,556 Public works 511,644 505,240 6,404 Culture and recreation 139,757 110,287 29,470 I Capital outlay 3,250 3,655 (405) Debt service 37,550 37,544 6 TOTAL EXPENDITURES 2,344,868 2,402,664 (57,796) I EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES 404,127 355,161 (48,966) I OTHER FINANCING SOURCES (USES) Operating transfers in 13,000 13,000 I Operating transfers out (489,025) (489,025) TOTAL OTHER FINANCING SOURCES (USES) (476,025) (476,025) I EXCESS (DEFICIENCY) OF REVENUE AND OTHER FINANCING SOURCES OVER EXPENDITURES AND I OTHER FINANCING USES $ (71,898) (120,864) $ (48,966) FUND BALANCE, JANUARY 1 1,578,910 I FUND BALANCE, DECEMBER 31 $ 1,458,046 I See Notes to Financial Statements. I -7- 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 4 COMBINED STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS ALL PROPRIETARY FUND TYPES YEAR ENDED DECEMBER 31, 1998 Enterprise OPERATING REVENUE Sales $ 2,075,485 Less cost of sales (1,649,619) GROSS PROFIT 425,866 Charges for services 1,088,713 Pennits and connection fees 111,700 GROSS PROFIT AND OPERATING REVENUE 1,626,279 OPERATING EXPENSES Personal services 239,572 Supplies 24,171 Repairs and maintenance 17,698 Depreciation 331,547 Professional services 23,065 Contracted services 274,362 Communication 1,276 Insurance 21,960 Water purchases 11,398 Utilities 85,264 MCES disposal charges 374,509 Rent 145,978 Advertising 5,338 Other 33,855 TOTAL OPERATING EXPENSES 1,589,993 OPERATING INCOME 36,286 NONOPERATING REVENUE (EXPENSE) General property taxes (7) Special assessments 74,607 Interest on investments 155,798 Other income 41,414 Interest expense (125,085) TOTAL NONOPERATING REVENUE (EXPENSE) 146,727 NET INCOME BEFORE OPERATING TRANSFERS 183,013 OPERATING TRANSFERS FROM OTHER FUNDS 10,000 NET INCOME 193,013 RETAINED EARNINGS, JANUARY 1 1,182,905 RETAINED EARNINGS, DECEMBER 31 $ 1,375,918 See Notes to Financial Statements. -8- CITY OF SHOREWOOD, MINNESOTA COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES YEAR ENDED DECEMBER 31, 1998 Exhibit 5 I I Enterprise I CASH FLOWS FROM OPERATING ACTIVITIES Operating income Adjustments to reconcile operating income to net cash provided by operating activities: Other income related to operations Depreciation and amortization (Increase) decrease in assets: Accounts receivable Special assessments Inventory Prepaid items Increase (decrease) in liabilities: Accounts payable Salaries and compensated absences payable $ 36,286 41,414 332,950 I I (15,855) (994) (13,121) 244 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Operating transfers from other funds 10,000 I I I I I (22,893) 1,524 NET CASH PROVIDED BY OPERATING ACTIVITIES 359,555 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal payments on note receivable Bond principal paid Interest paid on revenue bonds Acquisition of fixed assets Property taxes collected Special assessments collected 46,500 (185,000) (125,085) (61,338) (672) 195,401 CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 146,221 I I I I NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES (130,194) INCREASE IN CASH AND CASH EQUlV ALENTS 385,582 CASH AND CASH EQUIVALENTS, JANUARY 1 2,676,102 I CASH AND CASH EQUIVALENTS, DECEMBER 31 $ 3,061,684 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Property and equipment acquired from developers $ 331,578 I I I I See Notes to Financial Statements. -9- I I Note 1: 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 31,1998 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The City of Shorewood is a statutory city operating in accordance with the Plan A form of government. As required by generally accepted accounting principles, the financial statements of the reporting entity include those of the City of Shorewood (the primary government) and its component units. The City of Shorewood does not have any component units requiring either a blended or discrete presentation. B. Measurement Focus, Basis of Accounting and Basis of Presentation The accounts of the City are organized and operated on the basis of funds and account groups. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with fmance-related legal and contractual provisions. The minimum number of funds are maintained consistent with legal and managerial requirements. Account groups are a reporting device to account for certain assets and liabilities of the governmental funds not recorded directly in those funds. The City has the following fund types and account groups: Governmentalfunds are used to account for the City's general government activities. Governmental fund types use the flow of current fmancial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they are "measurable and available"). "Measurable" means the amount of the transaction can be determined, and "available" means collectible within the current period or soon enough thereafter to pay liabilities of the current period. The City considers all revenues available if they are collected within 60 days after year end. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long-term debt which is recognized when due, and certain compensated absences and claims and judgments which are recognized when the obligations are expected to be liquidated with expendable available fmancial resources. Property taxes, franchise taxes, licenses, interest and special assessments are susceptible to accrual. Other receipts and taxes become measurable and available when cash is received by the government and are recognized as revenue at that time. The preparation of general purpose fmancial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. Governmental funds include the following fund types: The generalfund is the City's primary operating fund. It accounts for all fmancial resources of the City, except those required to be accounted for in another fund. The debt service funds account for the servicing of general long-term debt not being fmanced by proprietary funds. The capital projects funds account for the acquisition of fixed assets or construction of major capital projects not being fmanced by proprietary funds. Proprietary funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. The City applies all applicable F ASB pronouncements issued on or before November 30, 1989 in accounting and reporting for its proprietary operations. Proprietary funds include the following fund type: -10- CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED I I Enterprise funds are used to account for those operations that are fmanced and operated in a manner similar to I private business or where the Council has decided that the determination of revenues earned, costs incurred and/or net income is necessary for management accountability. Account Groups. The general fixed assets account group is used to account for fixed assets not accounted for I in proprietary funds. The general long-term debt account group is used to account for general long-term debt and certain other liabilities that are not specific liabilities of proprietary funds. C. Assets, Liabilities and Equity Deposits and Investments The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. State statutes authorize the City to invest in obligations of the U.S. Treasury, commercial paper, corporate bonds, repurchase agreements and shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are obligations guaranteed by the United States or its agencies. Investment cost was not materially different from fair value in either 1998 or 1997. As a result investments are stated at cost. Property Taxes The City Council annually adopts a tax levy and certifies it to the County for collection. The County is responsible for collecting all property taxes for the City. These taxes attach an enforceable lien on taxable property within the City on January I and are payable by the property owners in two installments. The taxes are collected by the County Treasurer and tax settlements are made to the City during January, July, and December each year. Taxes payable on homestead property, as defmed by State statutes, are partially reduced by a homestead and agricultural credit aid. The credit is 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. Delinquent taxes receivable include the past six years' uncollected taxes. Delinquent taxes have been offset by a deferred revenue liability for delinquent taxes not received within 60 days after year end. Special Assessments Special assessments represent the fmancing for public improvements paid for by benefiting property owners. These assessments are recorded as receivables upon certification to the County. Special assessments are recognized as revenue when they are received in cash or within 60 days after year end. All special assessments receivable are offset by a deferred revenue liability. Receivables and Payables Transactions between funds that are representative of lendinglborrowing arrangements outstanding at the end of the fiscal year are referred to as either "interfund receivables/payables" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Advances between funds are offset by a fund balance reserve account in applicable governmental funds to indicate they are not available for appropriation and are not expendable available fmancial resources. -11- I I I I I I I I I I I I I I I I I Note 1: 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, 1998 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Inventories and Prepaid ItemslDeferred Charges The inventories are stated at average cost, which approximates market using the fIrst-in, frrst-out (FIFO) method. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items or deferred charges. Fixed Assets Fixed assets used in governmental fund types of the City are recorded in the general fixed assets account group at cost or estimated historical cost if purchased or constructed. Donated fixed assets are recorded at their estimated fair value at the date of donation. Assets in the general fixed assets account group are not depreciated. Interest incurred during construction is not capitalized on general fixed assets. Public domain (infrastructure) general fixed assets (e.g., roads, bridges, sidewalks and other assets that are immovable and of value only to the City) are not capitalized. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives are not included in the general fixed assets group or capitalized in the proprietary funds. Property, plant and equipment in the proprietary funds of the City are recorded at cost. Property, plant and equipment donated to these proprietary fund type operations are recorded at their estimated fair value at the date of donation. Major outlays for capital assets and improvements are capitalized in proprietary funds as projects are constructed. Interest incurred during the construction phase of proprietary fund fixed assets is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Property, plant and equipment are depreciated in the proprietary funds of the City using the straight line method over the following estimated useful lives: Assets Years Furniture and equipment Collection and distribution system 5 - 10 40 Compensated Absences Vested accumulated vacation or sick leave that is expected to be liquidated with expendable available fmandal resources is reported as an expenditures 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 fmandal 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. No liability is recorded for nonvesting accumulating rights to receive sick pay benefits. Long-term Obligations The City reports long-term debt of governmental funds at face value in the general long-term debt account group. Certain other governmental fund obligations not expected to be fmanced with current available fmancial resources are also reported in the general long-term debt account group. Long-term debt and other obligations fmanced by proprietary funds are reported as liabilities in the appropriate funds. For governmental fund types, bond premiums and discounts, as well as issuance costs, are recognized during the current period. Bond proceeds are reported as an other fmancing source net of the applicable premium or discount. Issuance costs, other than those withheld from the actual net proceeds received, are reported as debt service expenditures. For proprietary fund types, bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight line method. -12- CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED I I Fund Equity I Reservations of fund balance represent amounts that are not appropriable or are legally segregated for a specific purpose. Reservations of retained earnings are limited to outside third-party restrictions. Designations of fund balance represent tentative management plans that are subject to change. The proprietary fund's contributed capital represents equity acquired through capital grants and capital contributions from developers, customers or other funds. I Memorandum Only - Total Columns I Total columns on the general purpose fmancial statements are captioned as "memorandum only" because they do not represent consolidated fmancial information and are presented only to facilitate fmancial analysis. The columns do not present information that reflects fmancial position, results of operations or cash flows in accordance with generally accepted accounting principles. Interfund eliminations have not been made in the aggregation of this data. I Comparative DatalReclassifications I Comparative total data for the prior year have been presented in the selected sections of the accompanying fmancial statements in order to provide an understanding of changes in the City's fmancial position and operations. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year's presentation. I The City has implemented Governmental Accounting Standards Board (GASB) Statement #32 "Accounting and Financial Reportingfor Internal Revenue Code Section 457 Deferred Compensation Plans" in 1998. The effect of this statement is the elimination of the 1998 and 1997 balances of the deferred compensation agency fund from the combined balance sheet. The change resulted from amendments made to Internal Revenue Code (IRe) Section 457 that stated under certain criteria the IRC 457 plan assets were no longer owned by the City. I I Note 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information I Annual budgets are adopted on a basis consistent with generally accepted accounting principles for the general fund. All annual appropriations lapse at fiscal year end. In August of each year, all departments of the City submit requests for appropriations to the City Administrator so that a budget may be prepared. Before September 15, the proposed budget is presented to the City's council for review. The council holds public hearings and a fmal budget is prepared and adopted in early December. I The appropriated budget is prepared by fund, function and department. The City's department heads, with the approval of the City Administrator, may make transfers of appropriations within a department. Transfers of appropriations between departments require the approval of the City Council. The legal level of budgetary control is the department level. Budgeted amounts are as originally adopted, or as amended by the City Council. I I I I I I -13- I I I CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 Note 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY - CONTINUED I B. Excess of Expenditures over Appropriations For the year ended December 31, 1998, expenditures exceeded appropriations in the following departments within the General Fund: I I Department Budget Actual Excess Administrative $ 104,746 $ 110,131 $ 5,385 Finance 104,786 109,131 4,345 Professional Services 228,256 366,438 138,182 Other General Government 118,765 119,484 719 General Maintenance 198,628 225,794 27,166 Traffic Control 37,500 39,289 1,789 Capital Outlay - General Government 3,250 3,655 405 I I These overexpenditures were funded with revenue in excess of budget and available fund balance. I I C. Deficit Fund Equity The following funds had deficit fund balances as of December 31, 1998. The deficit in these funds will be eliminated by future revenue sources. I Debt Service Funds Water III Tax Increment $ 1,643 Capital Projects Funds Senior Community Center 22,773 Total $ 24,416 Note 3: DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS I I I I I A. Deposits and Investments Cash balances of the City's funds are combined (pooled) and invested to the extent available in various investments authorized by Minnesota State Statutes. Each fund's portion of this pool (or pools) is displayed on the [mancial statements as "cash and temporary investments." For purposes of identifying the risk of investing public funds, the balances are categorized as follows: Deposits In accordance with Minnesota Statutes and as authorized by the City Council, the City maintains deposits at those depository banks, 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). I 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 or in a [mancial institution other than that furnishing the collateral. I At year end, the City's carrying amount of deposits was $1,581,750 and the bank balance was $1,666,146. Of the bank balance, $1,237,341 was covered by federal depository insurance ~d $428,805 was covered by collateral held by the City's agent in the City's name. I -14- I Note 3: CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS - CONTINUED I I Investments I Investments are categorized into these three categories of credit risk: I. 2. I Insured or registered, or securities held by the City or its agent in the City's name. Uninsured and unregistered, with securities held by the counterparty's trust department or agent in the City's name. I 3. Uninsured and unregistered, with securities held by the counterparty, or by its trust department or agent but not in the City's name. At year end, the City's investment balances were as follows: I I Categorv 2 3 Carrying Market Amount Value $ 3,068,327 $ 3,067,004 2.132,023 2.132,023 5,200,350 5,199,027 I U.S. Government Securities Commercial Paper $ 3,068,327 $ 2.132,023 $ 5,200.350 $ $ Total $ Investments not subjected to categorization: 4M Money Market Fund I 56,259 56.259 $ 5,256,609 $ 5,255,286 I Total investments Cash on Hand Petty cash in the possession of the City totals $1,900. I I Cash and Investments Summary A reconciliation of cash and investments as shown on the Combined Balance Sheet for the City follows: Cash on hand Carrying amount of deposits Carrying amount of investments $ 1,900 1,581,750 5.256,609 $ 6,840.259 I Total cash and temporary investments I B. Notes Receivable On May 28, 1996, the City entered into a service agreement with the City of Victoria to provide water. The total amount of the water availability fee was $232,500 and will be fmanced in five equal principal installments I of $46,500 through July 1,2000. Interest of 5.75% will be paid on the outstanding balance. The outstanding balance at December 31, 1998 was $93,000. I I I -15- 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, 1998 Note 3: DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS - CONTINUED C. Fixed Assets A summary of changes in general fixed assets for the year ended December 31, 1998 is as follows: Balance Beginning Balance of Year Additions Deletions End of Year Land $ 456,826 $ $ $ 456,826 Buildings and structures 1,347,876 1,347,876 Improvements other than buildings 1,337,388 18,043 1,355,431 Furniture and equipment 1.278.551 68.472 34.354 1.312.669 Total $ 4.420.641 $ 86.515 $ 34.354 $ 4.472.802 The following is a summary of proprietary fund type fixed assets at December 31, 1998: Enterprise Funds Water Sewer Liquor Total Furniture and equipment $ 24,178 $ 37,827 $ 102,488 $ 164,493 Collection and distribution system 4,910,287 7,762,496 12,672,783 Construction work in progress 1.550.881 1.550.881 Total 6,485,346 7,800,323 102,488 14,388,157 Less accumulated depreciation (1.051.746) (4.510.536) (51.519) (5.613.801 ) Net Fixed Assets $ 5.433.600 $ 3.289.787 $ 50.969 $ 8.774.356 D. Deferred Revenue Deferred revenue at December 31, 1998 is comprised of the following: Debt Capital General Service Proiect Total Delinquent taxes $ 28,299 $ $ $ 28,299 Special assessments Delinquent 3,617 10,941 191 14,749 Deferred 301 191.325 5.117 196.743 Total $ 32.217 $ 202.266 $ 5.308 $ 239.791 E. Long-term Debt General Obligation Bonds. The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for both general government and proprietary activities. The bonds are reported in the proprietary funds if they are expected to be paid from proprietary activities. General obligation bonds are direct obligations and pledge the full faith and credit of the City. General obligation bonds currently outstanding are as follows: -16- CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 I I Note 3: DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS - CONTINUED I General Long-term Debt I General Obligation Improvement Bonds The following bonds were issued to fmance various improvements and will be repaid primarily from special assessments levied on the properties benefiting from the improvements. Some issues, however, are partly fmanced by ad valorem tax levies. All special assessment debt is backed by the full faith and credit of the City. I Each year the combined assessment and tax levy equals 105% of the amount required for debt service. The excess of 5% is to cover any delinquencies in tax or assessment payments. I Total General Obligation Improvement Bonds Tax Increment Revenue Bonds I The following bonds were issued for redevelopment projects. The additional tax increments resulting from increased tax capacity of the redeveloped properties will be used to retire the related debt. They are not backed I by the full faith and credit of the City. Balance at Maturity Date Year End 2-01-02 $ 380,000 2-01-04 165.000 $ 545.000 I Authorized and Issued Interest Rate Issue Date G.O. Improvement Bonds of 1991 $ 960,000 5.50-5.85% 11-01-91 G.O. Improvement Bonds of 1993 325,000 4.00-4.45 12-01-93 I Authorized and Issued Interest Rate Issue Date Maturity Date Balance at Year End I Tax Increment Bonds of1991 $ 920,000 9.00% 5-01-91 2-01-00 $ 440.000 Other General Long-Term Debt I Lease/Purchase Payable During 1996, the City entered into a lease, with option to purchase, agreement as lessee for fmancing the South Shore Senior Center project. Title remains with the City so long as they are not in default of terms in the lease agreement. The lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of the future minimum lease payments as of the date of its inception. I I $ 311,000 6.22% 5-30-96 8-01-08 $ 276.460 Sick leave/severance payable I This liability represents vested benefits earned by employees through the end of the year, which will be paid at retirement in future periods. Total Sick leave/severance payable $ 37.633 I Enterprise Fund Debt I I -17- I I I I I I I I I I I I I I I I I I I I Note 3: CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS - CONTINUED General Obligation Revenue Bonds The following bonds were issued to fund improvements in the Water Enterprise fund. They will be repaid through user charges and tax levies. G.O. Water Revenue Bonds of 1995 G.O. Water Revenue Bonds of1996 4.15-4.75% 11-01-95 2-01-11 $1,665,000 805,000 $2,470,000 $ 1,920,000 860,000 4.20-5.40% 11-01-96 2-01-12 Total General Obligation Revenue Bonds Changes in General Long-term Liabilities. During the year ended December 31, 1998, the following changes occurred in liabilities reported in the general long-term debt account group. Balance Balance January 1, December 31, 1998 Additions Reductions 1998 G.O. Improvement Bonds $ 680,000 $ $ 135,000 $ 545,000 Tax Increment Revenue Bonds 620,000 180,000 440,000 Lease/purchase payable 295,897 19,437 276,460 Sick leave/severance payable 33.396 4,237 37,633 Total $ 1,629,293 $ 4,237 $ 334.437 $1,299,093 The annual service requirements to maturity for all bonds and leases outstanding at December 31, 1998 are as follows: Enterprise General Long-term Debt Account Group Funds Tax G.O. Increment Lease G.O. Year Ending Improvement Revenue Purchase Revenue December 31, Bonds Bonds Payable Bonds Total 1999 $ 160,443 $ 914,385 $ 37,544 $ 295,934 $ 1,408,306 2000 148,588 37,544 298,020 484,152 2001 136,776 37,544 284,739 459,059 2002 120,139 37,544 276,414 434,097 2003 21,430 37,544 267,904 326,878 Thereafter 41,910 187,719 1,881,034 2.110,663 Total 629,286 914,385 375,439 3,304,045 5,223,155 Less interest (84,286 ) (474.385) (98,979 ) (834,045 ) 0.491,695 ) Principal $ 545,000 $ 440,000 $ 276.460 $ 2.470,000 $ 3,731,460 Amounts Available/or Long-term Debt. Available fund balance in the debt service funds for repayment of long-term debt totaled $424,978 at year end. Amounts to be Provided/or Long-term Debt. This represents future revenue to be generated for debt payments and sick leave/severance benefits payable, generally including interest earnings, tax increments, scheduled tax levies and deferred (future) special assessment levies. -18- CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 I I F. Fund Equity Reservations and Designations Note 3: DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS - CONTINUED I Purpose I I The components of fund equity are described in Note 1. Certain reservations and designations have been made in the following funds: Fund Balance - Reserved Governmental Funds Debt Service Funds 1993 Improvement and Refunding 1991 Improvement and Refunding Total Reserved Fund Balance - Unreserved - Designated Governmental Funds General Capital Projects Public Facilities/Office Equipment Park Capital Improvements Equipment Replacement Street Reconstruction MSA Construction Trail Capital Improvements Strawberry Lane Reconstruction Total Unreserved - Designated G. Contributed Capital Amount Debt service on bonds issued Debt service on bonds issued I I $ 201,408 225.213 $ 426.621 Working capital I I $ 1,458,046 68,621 185,031 197,220 928,572 254,956 151,205 26.220 $ 3.269.871 Capital Improvements Park Improvements Equipment Streets Street Construction Trail Improvements Road reconstruction I I The changes in the government's contributed capital accounts for its proprietary funds were as follows: Sources Beginning balance, Contributed capital Contributing sources: Developer contributions Enterprise Water Sewer I I I Total $ 4,710,924 $ 4,460,022 173.134 158.444 $ 9,170,946 331.578 Ending balance, Contributed capital $ 4.884.058 $ 4.618.466 Note 4: DEFINED BENEFIT PENSION PLANS - STATEWIDE A. Plan Description $ 9.502.524 I I All full-time and certain part-time employees of the City are covered by defmed benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (pERF) which is a cost-sharing, multiple-employer retirement plan. This plan is established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. I -19- I I I I I Note 4: 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, 1998 DEFINED BENEFIT PENSION PLANS - STATEWIDE - CONTINUED PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. 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 defmed retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age and years of credit at termination of service. Two methods are used to compute benefits for PERF's Coordinated and Basic Plan members. The retiring member receives the higher of the step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member who retired before July 1, 1997 is 2.0 percent of average salary for each ofthe first 10 years of service and 2.5 percent for each remaining year. The annuity accrual rate for Basic members who retire on or after July 1, 1997 is 2.2 percent of average salary for each of the fIrst 10 years of service and 2.7 percent for each remaining year. For a Coordinated Plan member who retired before July 1, 1997, the annuity accrual rate is 1.0 percent of average salary for each of the years and 1.7 percent for each remaining year). Under Method 2, the annuity accrual rate is 2.5 percent of average salary for Basic Plan members and 1.5 percent for Coordinated Plan members who retired before fIrst 10 years and 1.5 percent for each remaining year. For Coordinated members who retire on or after July 1, 1997, the annuity accrual rates increase by 0.2 percent (to 1.2 percent of average salary for each of the fIrst 10 July 1, 1997. Annuity accrual rates increase 0.2 percent for members who retire on or after July 1, 1997. For all PERF members whose annuity is calculated using Method 1, a full annuity is available when age plus years of service equal 90. A reduced retirement annuity is also available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A normal annuity is a lifetime annuity that ceases upon the death of the retiree -- no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will 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. The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active pIa participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by provisions in effect at the time they last terminated their public service. PERA issues a publicly available fmancial report that includes fmancial statements and required supplementary information for PERF. That report may be obtained by writing to PERA, 514 St. Peter Street, #200, St. Paul, Minnesota 55102 or by calling (612) 296-7460 or 1-800-652-9026. B. Funding Policy Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. PERF Basic Plan members and Coordinated Plan members are required to contribute 8.75 and 4.75 percent, respectively, of their annual covered salary. The City is required to contribute the following percentages of annual covered payroll; 11.43 percent for Basic Plan PERF members and 5.18 percent for Coordinated Plan PERF members. The City's contributions to the Public Employees Retirement Fund for the years ending December 31, 1998, 1997 and 1996 were $6,830, $5,633 and $5,951, respectively. The City's contributions were equal to the contractually required contributions for each year as set by state statute. -20- CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 Note 5: JOINT VENTURES A. South Lake Minnetonka Public Safety Department The City of Shorewood participates in a joint powers agreement with the cities of Excelsior, Greenwood and Tonka Bay which establishes the South Lake Minnetonka Public Safety Department for the purpose of providing police protection within the four communities. The agreement creates a coordinating committee, comprised of the mayors of each participating community, as the governing body, which meets quarterly. Each year, the Coordinating committee adopts an operating budget, which is approved by all participating cities. The cost of the budget is divided between the participating cities based upon a five-year average demand for service in each city. The last year of audited information is 1997. The percentage contributed in 1997 by the City of Shorewood is 45.1%. Financial statements can be reviewed at Department offices at 810 Excelsior Blvd, Excelsior, MN 55331. Any budget shortfall is made up first from department reserves, with any excess shortfall assessed to each participating community according to the formula. The current agreement continues through December 31, 1997. South Lake Minnetonka Public Safety Department has accounts payable, accrued payroll, compensated absences and deferred revenue in the General Fund of$145,104, and deferred compensation benefits payable in the Agency Fund of $262,433 at year end. There is no other current or long-term debt outstanding as of December 31, 1997. The following is a summary of the Department's balance sheet as of December 31, 1997 and the statement of revenue, expenditures and changes in fund balance for the General Fund for the year ended December 31, 1997. SOUTH LAKE MINNETONKA PUBLIC SAFETY DEPARTMENT BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS DECEMBER 31, 1997 General Totals Fixed (Memorandum Onlv) General Agencv Assets 1997 1996 Total assets $ 326.012 $ 262.433 $ 350.967 $ 939.412 $ 854.893 Liabilities $ 145,104 $ 262,433 $ - $ 407,537 $ 369,707 Fund equity 180.908 350.967 531.875 485.186 Total liabilities and fund equity $ 326.012 $ 262.433 $ 350.967 $ 939.412 $ 854.893 SOUTH LAKE MINNETONKA PUBLIC SAFETY DEPARTMENT SUMMARY STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE - GENERAL FUND - BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 1997 (With comparative actual amounts for the year ended December 31, 1996) Total revenue Total expenditures 1997 1996 Variance - Favorable Budget Actual (Unfavorable ) Actual $ 1,183,226 $ 1,247,073 $ 63,847 $ 1,189,252 1.203.226 1.218.390 (15.164) 1.177 . 094 $ (20.000 ) 28,683 $ 48.683 12,158 152.225 140.067 $ 180.908 $ 152.225 -21- Excess of revenue over (under) expenditures Fund balance, January I Fund balance, December 31 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, 1998 I I Note 5: JOINT VENTURES - CONTINUED B. South Lake Minnetonka Senior Community Center I The City participates in a joint venture with the cities of Excelsior, Deephaven, Greenwood and Tonka Bay which establishes the Southshore Senior Community Center to provide senior citizens educational and recreational activities. Upon completion of the Senior Center, the Cities leased the Senior Center to the Friends of the South Lake Minnetonka Senior Community Center. The term of the lease shall be 25 years at a rental rate of $1 per year. The Friends of the South Lake Minnetonka Senior Community Center are required to pay all operating costs of the Senior Center. The member cities were responsible for a proportionate share of the building construction. Shorewood fmanced their share with a lease purchase obligation. The amount of the lease purchase is $276,460 and is reflected in the General Long-term Debt Account Group. In the event operating costs are not covered by revenue, each member City is responsible for their proportional share of the expense. The building costs incurred by the City are reported in the Senior Center Capital Project fund and will be recorded in the General Fixed Asset Account Group when the Senior Center is completed. The ownership interest of the City is proportionate to each City's investment in the Senior Center. Financial statements are not issued for this organization. I I I I Note 6: OTHER INFORMATION A. Risk Management I The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters for which the City carries insurance The City obtains insurance through participation in the League of Minnesota Cities Insurance Trust (LMCIT) which is a risk sharing pool with approximately 800 other governmental units. The City pays an annual premium to LMCIT for its workers compensation and property and casualty insurance. The LMCIT is self sustaining through member premiums and will reinsure for claims above a prescribed dollar amount for each insurance event. Settled claims have not exceeded the City's coverage in any of the past three fiscal years. I I Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. An excess coverage insurance policy covers individual claims in excess of$I,OOO,OOO. Liabilities, if any, include an amount for claims that have been incurred but not reported (IBNRs). The City's management is not aware of any incurred but not reported claims. I B. Segment Information for Enterprise Funds Stormwater Management Water Sewer Recycling Utility Liquor Total Operating revenue $ 311 ,925 $ 751,640 $ 91,257 $ 45,591 $ 425,866 $ 1,626,279 Depreciation expense 125,396 195,393 10,758 331,547 Operating income (loss) 6,615 75,465 10,909 (54,535 ) (2,168) 36,286 Operating transfers from other funds 10,000 10,000 Net income (loss) 33,814 174,244 12,075 (31,867) 4,747 183,013 Fixed asset additions 222,276 170,640 392,916 Net working capital 1,907,150 1,890,030 35,232 219,534 276,958 4,328,904 Contributed capital additions 173,134 158,444 331,578 Total assets 7,611,764 5,184,901 35,232 226,478 447,795 13,506,170 Total equity 5,115,932 5,179,817 35,232 219,534 327,927 10,878,442 I I I I I I -22- I CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 I I I I Note 6: OTHER INFORMATION - CONTINUED C. Legal Debt Margin In accordance with Minnesota Statutes, the City may not incur or be subject to net debt in excess of two percent of the market value of taxable property within the City. Net debt is payable solely from ad valorem taxes and, therefore, excludes debt fmanced partially or entirely by special assessments, enterprise fund revenues or tax increments. The total market value of taxable property in the City is $595,451,300 which leaves a legal debt margin of$II,909,026. There is no debt subject to the limit. I Note 7: OPERATING LEASES Year Ending Shorewood Waterford December 31. Plaza Center 1999 $ 31,920 $ 49,500 2000 35,910 49,500 2001 39,900 49.500 Total $ 107.730 $ 148,500 I I The City leases space for liquor store operations. These leases are considered, for accounting purposes, to be operating leases. Lease expense for the year ended December 31, 1998 and 1997 amounted to $145,978 and $140,519, respectively. Future minimum lease payments for all leases are as follows: Tonka Bav I I I I I I I I $ 13,200 14,100 15.000 $ 42,300 The new lease for Waterford Center began January 1, 1995 and will run through December 31,2001. The Shorewood Village Plaza lease began January I, 1997 and will run through December 31,2001. The Tonka Bay lease begins January 1, 1999 and runs through December 31,2001. Note 8: TAX INCREMENT REVENUE BONDS 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 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 generated from the City's Tax Increment Financing District No. I. 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. The bonds payable are reported as a liability in the General Long-term Debt Account Group in the fmancial statements even though: The bonds issued are tax increment revenue bonds. The bonds are not backed by the full faith and credit of the City. The bonds will be repaid only to the extent that tax increments are generated from the Tax Increment Financing District. I I I -23- 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, 1998 Note 9: OPERATING TRANSFERS A schedule of operating transfers follows: Transfer Transfer In Out General Fund $ 13,000 $ 489,025 Capital Projects Funds Public Facilities/Office Equipment 15,000 15,000 Park Capital Improvements 10,000 Equipment Replacement 114,025 Street Reconstruction 340,000 274,250 Trail Capital Improvement 29,250 3,000 Strawberry Lane Reconstruction 250,000 Enterprise Funds Stormwater Management Utility 10,000 Total $ 781.275 $ 781.275 -24- I I I I I I I I I I I I I I I I I I I CITY OFSHOREWOOD, MINNESOTA THE GENERAL FUND The .General Fund is used to account for resources traditionally associated with government which are I)ot required legally .or by sound financial management to be accounted for in other funds. It normally receives a greater variety and number of taxe~ and other general revenues than any.other fund. The majority of the current day-lo-day operations will be financed from this fund. I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Exhibit A-I GENERAL FUND COMPARATIVE BALANCE SHEETS DECEMBER 31, 1998 AND 1997 1998 1997 ASSETS Cash and temporary investments $ 1,523,052 $ 1,639,343 Accrued interest receivable 28,891 27,711 Delinquent taxes receivable 46,806 44,319 Accounts receivable 27,024 12,547 Special assessments receivable Delinquent 3,617 1,620 Deferred 301 1,816 Prepaid items 10,833 TOTAL ASSETS $ 1,640,524 $ 1,727,356 LIABILITIES AND FUND BALANCE LIABILITIES Accounts and contracts payable $ 61,784 $ 56,216 Salaries payable 28,220 24,519 Refundable deposits payable 60,257 32,811 Deferred revenue 32,217 34,900 TOTAL LIABILITIES 182,478 148,446 FUND BALANCE Unreserved Designated for working capital 1,458,046 1,578,910 TOTAL LIABILITIES AND FUND BALANCE $ 1,640,524 $ 1,727,356 -25- CITY OF SHOREWOOD, MINNESOTA Exhibit A-2 I GENERAL FUND STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE I BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 1998 (With Comparative Amounts for the Year Ended December 31, 1997) I 1998 1997 Variance - I Favorable Budget Actual (Unfavorable) Actual . REVENUE I General property taxes General property taxes $ 1,716,379 $ 1,710,414 $ (5,965) $ 1,642,325 I Fiscal disparities 66,439 66,439 61,184 Total 1,782,818 1,776,853 (5,965) 1,703,509 I Licenses and permits Business 9,650 10,250 600 9,950 I Nonbusiness 162,650 212,998 50,348 226,722 Total 172,300 223,248 50,948 236,672 I Intergovernmental Federal I FEMA 75,000 75,000 CDBG 5,000 5,000 State I Property tax credits 421,496 421,334 (162) 420,880 Other 29,381 31,025 1,644 29,305 Total 525,877 532,359 6,482 450,185 I Charges for services I General government 62,000 26,780 (35,220) 50,639 Parks and recreation 9,500 7,516 (1,984) 12,570 Total 71,500 34,296 (37,204) 63,209 I Fines and forfeitures 90,000 73,337 (16,663) 76,340 I Miscellaneous revenue Interest on investments 85,000 87,794 2,794 99,370 I Other 21,500 29,938 8,438 40,802 Total 106,500 117,732 11,232 140,172 I TOTAL REVENUE 2,748,995 2,757,825 8,830 2,670,087 I -26- I CITY OF SHOREWOOD, MINNESOTA Exhibit A-2 I GENERAL FUND Continued STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE I BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 1998 I (With Comparative Amounts for the Year Ended December 31, 1997) 1998 1997 I Variance - Favorable Budget Actual (Unfavorable) Actual I EXPENDITURES - CONTINUED Current - Continued General Government - Continued I Municipal building Supplies $ 10,000 $ 9,805 $ 195 $ 8,180 Other services and charges 97,150 79,596 17,554 79,255 I Total 107,150 89,401 17,749 87,435 Other general government I Personal services 85,215 89,054 (3,839) 73,631 Supplies 19,500 15,819 3,681 16,118 I Other services and charges 14,050 14,611 (561) 18,888 Total 118,765 119,484 (719) 108,637 I Total General Government 840,858 957,685 (116,827) 807,892 Public Safety I Police protection Supplies 100 36 64 1,133 I Other services and charges 557,206 539,084 18,122 504,346 Total 557,306 539,120 18,186 505,479 I Fire protection Other services and charges 156,623 156,623 151,893 I Protective inspection I Personal services 71,680 64,599 7,081 61,489 Supplies 600 452 148 48 Other services and charges 25,600 27,459 (1,859) 24,708 I Total 97,880 92,510 5,370 86,245 Total Public Safety 811,809 788,253 23,556 743,617 I I -28- I I CITY OF SHOREWOOD, MINNESOTA Exhibit A-2 GENERAL FUND Continued I STA TEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 1998 I (With Comparative Amounts for the Year Ended December 31, 1997) 1998 1997 I Variance - Favorable Budget Actual (Unfavorable) Actual I EXPENDITURES - CONTINUED Current - Continued I Public Works General maintenance Personal services $ 142,628 $ 174,984 $ (32,356) $ 173,382 I Supplies 36,800 34,642 2,158 32,008 Other services and charges 19,200 16,168 3,032 16,879 I Total 198,628 225,794 (27,166) 222,269 Streets and highways I Personal services 64,005 56,672 7,333 72,659 Supplies 30,000 34,022 (4,022) 32,733 Other services and charges 3,600 3,750 (150) 21,280 I Total 97,605 94,444 3,161 126,672 I Snow and ice removal Personal services 26,605 10,608 15,997 22,126 Supplies 17,500 11,848 5,652 20,277 I Total 44,105 22,456 21,649 42,403 I Traffic control Supplies 4,000 4,653 (653) 4,161 Other services and charges 33,500 34,636 (1,136) 34,762 I Total 37,500 39,289 (1,789) 38,923 I Sanitation and waste removal Personal services 27,114 27,507 (393) 1,730 Other services and charges 84,000 82,613 1,387 3,377 I Total 111,114 110,120 994 5,107 I I I -29- CITY OF SHOREWOOD, MINNESOTA Exhibit A-2 I GENERAL FUND Continued I STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 1998 I (With Comparative Amounts for the Year Ended December 31, 1997) 1998 1997 I Variance - Favorable Budget Actual (Unfavorable) Actual I EXPENDITURES - CONTINUED Current - Continued Public Works - Continued I Tree maintenance Personal services $ 8,172 $ 6,837 $ 1,335 $ 3,654 Supplies 14,520 6,300 8,220 12,728 I Total 22,692 13,137 9,555 16,382 Total Public Works 511,644 505,240 6,404 451,756 I Culture and Recreation I Personal services 89,927 68,253 21,674 74,877 Supplies 19,600 17,204 2,396 16,441 Other services and charges 30,230 24,830 5,400 23,586 I Total Culture and Recreation 139,757 110,287 29,470 114,904 Total Current Expenditures 2,304,068 2,361,465 (57,397) 2,118,169 I Capital Outlay I General government 3,250 3,655 (405) 13,365 Public safety 455 Culture and recreation 289 I Total Capital Outlay 3,250 3,655 (405) 14,109 Debt Service I Principal 19,437 19,437 15,103 I Interest and other 18,113 18,107 6 22,441 Total Debt Service 37,550 37,544 6 37,544 TOTAL EXPENDITURES 2,344,868 2,402,664 (57,796) 2,169,822 I EXCESS (DEFICIENCY) OF REVENUE I OVER EXPENDITURES 404,127 355,161 (48,966) 500,265 I -30- 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 A-2 GENERAL FUND Continued STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 1998 (With Comparative Amounts for the Year Ended December 31, 1997) 1998 1997 Variance - Favorable Budget Actual (Unfavorable) Actual OTHER FINANCING SOURCES (USES) Operating transfers in $ 13,000 $ 13,000 $ $ Operating transfers out (489,025) (489,025) (444,395) TOTAL OTHER FINANCING SOURCES (USES) (476,025) (476,025) (444,395) EXCESS (DEFICIENCY) OF REVENUE AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER USES $ (71,898) (120,864) $ (48,966) 55,870 FUND BALANCE, JANUARY 1 1,578,910 1,522,952 FUND EQUITY TRANSFERS IN 88 FUND BALANCE, DECEMBER 31 $ 1,458,046 $ 1,578,910 -31- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA DEBT SERVICE FUNDS Debt service funds qre used to account for the payment of interest and principal on long- term general obligation debt other than debt issued for and serviced primarily by enterprise funds. 1993 Improvement and Refundinl! Fund - This fund was established to account for the accumulation Qf resources for payment of interest and principal on bonds issued for the Season's development improvements and to refund the 1987 refunding bonds. Waterford III Tax Increment Fund - This fund was established to account for the accumulation of resources for payment of interest and principal on bonds issued for the Waterford III Intersection Improvements. 1991 Improvement and Refunding Fund - This fund was established to account for the accumulation of resources for the payment of interest and principal on bonds issued for the SE water treatment plant, Pine Bend improvements, Church Road improvements, and to refund the 1986 improvement bonds. ASSETS Cash and temporary investments Accrued interest receivable Delinquent taxes receivable Special assessments Delinquent Deferred TOTAL ASSETS LIABILITIES AND FUND BALANCE LIABILITIES Accounts payable Deferred revenue TOTAL LIABILITIES FUND BALANCE Reserved for debt service Unreserved - undesignated CITY OF SHOREWOOD, MINNESOTA DEBT SERVICE FUNDS COMBINING BALANCE SHEET DECEMBER 31, 1998 (With Comparative Totals for December 31, 1997) TOTAL FUND BALANCE (DEFICIT) TOTAL LIABILITIES AND FUND BALANCE -32- I I 1993 I Improvement Waterford and III Tax I Refunding Increment $ 198,950 $ 1,068 I 2,458 75 I 31,062 I $ 232,470 $ 1,143 I $ $ 2,786 I 31,062 31,062 2,786 I 201,408 I (1,643) 201,408 (1,643) I $ 232,470 $ 1,143 I I I I I I I CITY OF SHOREWOOD, MINNESOTA DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE (DEFICIT) YEAR ENDED DECEMBER 31, 1998 (With Comparative Totals for the Year Ended December 31, 1997) REVENUE Property taxes Special assessments Interest on investments 1993 Improvement Waterford and III Tax Refunding Increment $ $ 334,290 46,932 8,261 233 55,193 334,523 TOTAL REVENUE EXPENDITURES Debt Service Principal Interest and service charges 40,000 8,567 180,000 162,545 TOTAL EXPENDITURES 48,567 342,545 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES 6,626 FUND BALANCE, JANUARY 1 194,782 FUND EQUITY TRANSFER OUT FUND BALANCE (DEFICIT), DECEMBER 31 $ 201,408 $ (1,643) -34- (8,022) I I I I I I I I I I I I I I I I I I I 6,379 I I I I I I I I I I I I I 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 funds. Public Facilities/Office Equipment Fund - This fund was established to aCcount for capital improvement projects for public facilities and replacement of office equipment that may be financed without the need to issue bonds. Park Capital Improvement Fund - This fund accounts for park land acquisition and other capital improvements in the City parks. Equipment Replacement Fund - This fund was established for the purpose of funding the replacement of capital equipment. Street Reconstruction Fund - This fund was established for the purpose of funding the periodic reconstruction of City streets and roadways. MSA Construction Fund - This fund was established to account for the accumulation of Municipal State Aid (MSA) to fund the periodic reconstniction of MSA designated roads. Trail Capital Improvement Fund - This fund was established to account for trail extensions and improvements. Strawberry. Lane Reconstruction. Fund - This fund was established to account for the reconstruction of Strawberry Lane. 1995 Freeman Park Improvement Fund - This fund was established to account for the construction of improvements in Freeman park. Senior Community Center Fund - This fund was established to account for the construction of a Senior Community Center. Shady Island Brid2e Replacemen.t Fund - This fund was established to a~count for the replacement of, the Shady Island Bridge. I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET DECEMBER 31, 1998 (With Comparative Totals for December 31, 1997) Public Facilities! Park Office Capital Equipment Equipment Improvement Replacement ASSETS Cash and temporary investments $ 76,477 $ 182,314 $ 194,913 Accrued interest receivable 1,669 2,717 2,307 Special assessments receivable Delinquent 191 Deferred 5,117 TOTAL ASSETS $ 83,454 $ 185,031 $ 197,220 LIABILITIES AND FUND BALANCE LIABILITIES Accounts and contracts payable $ 9,525 $ $ Deferred revenue 5,308 TOTAL LIABILITIES 14,833 FUND BALANCE (DEFICIT) Unreserved Designated 68,621 185,031 197,220 Undesignated TOTAL FUND BALANCE (DEFICIT) 68,621 185,031 197,220 TOTAL LIABILITIES AND FUND BALANCE (DEFICIT) $ 83,454 $ 185,031 $ 197,220 -36- ASSETS Cash and temporary investments Accrued interest receivable Special assessments receivable Delinquent Deferred TOTAL ASSETS LIABILITIES AND FUND BALANCE LIABILITIES Accounts and contracts payable Deferred revenue TOTAL LIABILITIES FUND BALANCE (DEFICIT) Unreserved Designated Undesignated CITY OF SHOREWOOD, MINNESOTA CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET - CONTINUED DECEMBER 31,1998 (With Comparative Totals for December 31, 1997) Shady Island Bridge Reconstruction $ $ $ TOTAL FUND BALANCE (DEFICIT) TOTAL LIABILITIES AND FUND BALANCE (DEFICIT) $ -38- Totals 1998 1997 $ 1,833,825 $ 1,916)17 29,745 26,389 191 191 5,117 6,397 $ 1,868,878 $ 1,949,094 $ 74,518 5,308 79,826 1,811,825 (22,773) 1,789,052 $ 1,868,878 Exhibit C-l Continued I I I I I I I I I I I I I I I I I I I $ 179,380 6,588 185,968 1,774,671 (11,545) 1,763,126 $ 1,949,094 CITY OF SHOREWOOD, MINNESOTA I CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES I IN FUND BALANCE (DEFICIT) YEAR ENDED DECEMBER 31, 1998 (With Comparative Totals for the Year Ended December 31, 1997) I Public Facilities/ Park I Office Capital Equipment Equipment Improvement Replacement I REVENUE Intergovernmental $ $ $ Special assessments 1,842 I Interest on investments 5,212 9,254 7,903 Miscellaneous Park dedication fees 21,000 I Contributions and donations 10,000 Other TOTAL REVENUE 7,054 40,254 7,903 I EXPENDITURES I Capital outlay Other services and charges 15,559 Professional services I Construction costs 24,117 Machinery and equipment 66,673 3,000 632 TOTAL EXPENDITURES 66,673 27,117 16,191 I EXCESS (DEFICIENCY) OF REVENUE I OVER EXPENDITURES (59,619) 13,137 (8,288) OTHER FINANCING SOURCES (USES) I Operating transfers in 15,000 10,000 114,025 Operating transfers out (15,000) TOTAL OTHER FINANCING I SOURCES (USES) 10,000 114,025 EXCESS (DEFICIENCY) OF REVENUE AND OTHER I FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES (59,619) 23,137 105,737 I FUND BALANCE (DEFICIT), JANUARY 1 128,240 163,402 91,483 FUND EQUITY TRANSFER IN FUND EQUITY TRANSFER OUT (1,508) I FUND BALANCE (DEFICIT), DECEMBER 31 $ 68,621 $ 185,031 $ 197,220 I -39- I CITY OF SHOREWOOD, MINNESOTA Exhibit C-2 I CAPITAL PROJECTS FUNDS Continued COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES I IN FUND BALANCE (DEFICIn - CONTINUED YEAR ENDED DECEMBER 31, 1998 I (With Comparative Totals for the Year Ended December 31, 1997) Shady I Island Bridge Total Reconstruction 1998 1997 I REVENUE Intergovernmental $ $ 39,465 $ 132,394 Special assessments 1,842 2,287 I Interest on investments 1,426 96,630 91,933 Miscellaneous Park dedication fees 21,000 40,000 I Contributions and donations 10,000 5,507 Other 27,073 TOTAL REVENUE 1,426 168,937 299,194 I EXPENDITURES I Capital outlay Other services and charges 18,204 8,101 Professional services 12,813 109,206 111,745 I Construction costs 36,648 411,321 678,026 Machinery and equipment 70,305 118,136 TOTAL EXPENDITURES 49,461 609,036 916,008 I EXCESS (DEFICIENCY) OF REVENUE I OVER EXPENDITURES (48,035) (440,099) (616,814) OTHER FINANCING SOURCES (USES) I Operating transfers in 758,275 829,895 Operating transfers out (292,250) (395,500) TOTAL OTHER FINANCING I SOURCES (USES) 466,025 434,395 EXCESS (DEFICIENCY) OF REVENUE AND OTHER I FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES (48,035) 25,926 (182,419) I FUND BALANCE (DEFICIT), JANUARY 1 26,339 1,763,126 1,945,545 FUND EQUITY TRANSFER IN 21,696 23,204 3,596 I FUND EQUITY TRANSFER OUT (23,204) (3,596) FUND BALANCE (DEFICIT), DECEMBER 31 $ $1,789,052 $1,763,126 I -41- I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA ENTERPRISE FUNDS Enterprise funds are used to account for operations that are financed and operated in a manner similar to private business, where the costs of providing services to the general public are financed primarily through user charges. Water Fund - This fund is used toaccount for the activities of the City water system and to service debt incurred in the building of infrastructure for the. system. Sewer Fund - This fund is used to account for the activities of the City sanitary sewer system. Recycling Fund - This fund is used to. account for the activities of the City recycling program, StormwaterManagement Utility Fund - This fund is used to account for the activities Of the City Stormwater Management system. LiQuor Fund - This fund is used to account for the activities of the City's off-sale liquor operation. The operation consistedoftlIree off-sale liquor store sites in 1998. A portion of the net income generated by the operation, if any, is used to fund general fund acti vities. CITY OF SHOREWOOD, MINNESOTA Exhibit D-4 I WAlER FUND COMPARATIVE BALANCE SHEETS I DECEMBER 31,1998 AND 1997 1998 1997 I ASSETS CURRENT ASSETS Cash and temporary investments $ 1,157,853 $ 1,074,642 I Accrued interest receivable 16,137 14,376 Delinquent taxes receivable 778 113 Accounts receivable 43,499 44,149 I Special assessments receivable Delinquent 27,272 16,161 Deferred 818,028 949,933 I Current portion of note receivable 46,500 46,500 Prepaid items 2,915 4,361 TOTAL CURRENT ASSETS 2,112,982 2,150,235 I FIXED ASSETS, AT COST 6,485,346 6,263,070 I LESS ACCUMULAlED DEPRECIATION (1,051,746) (926,350) TOTAL FIXED ASSETS 5,433,600 5,336,720 OTHER ASSETS I Bond discount, net of amortization 18,682 20,085 Note receivable, less current portion above 46,500 93,000 I TOTAL OTHER ASSETS 65,182 113,085 TOTAL ASSETS $ 7,611,764 $ 7,600,040 I LIABILITIES AND FUND EQUITY I CURRENT LIABILITIES Accounts and contracts payable $ 25,686 $ 35,802 Salaries payable 146 254 I Current portion of long -term debt 180,000 185,000 TOTAL CURRENT LIABILITIES 205,832 221,056 I LONG -lERM LIABILITIES Bonds payable less current portion above 2,290,000 2,470,000 I TOTAL LIABILITIES 2,691,056 2,495,832 FUND EQUITY I Contributed capital 4,884,058 4,710,924 Retained earnings I Unreserved 231,874 198,060 TOTAL FUND EQUITY 5,115,932 4,908,984 TOTAL LIABILITIES AND FUND EQUITY $ 7,611,764 $ 7,600,040 I -48- I CITY OF SHOREWOOD, MINNESOTA WATER FUND COMPARATIVE STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 1998 AND 1997 CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Other income related to operations Depreciation and amortization (Increase) decrease in assets: Accounts receivable Prepaid items Increase (decrease) in liabilities: Accounts and contracts payable Salaries and compensated absences payable NET CASH PROVIDED BY OPERATING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal payments on note receivable Bond principal paid Interest paid on revenue bonds Acquisition of fixed assets Property taxes collected Special assessments collected NET CASH USED BY 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 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Fixed assets acquired from developers -50- Exhibit D-6 I I 1998 1997 I $ 6,615 $ (19,205) 25,849 43,487 I 126,799 92,874 I 650 (428) 1,446 (356) I (10,116) (86,003) (108) 93 151,135 30,462 I 46,500 93,000 I (185,000) (125,000) (125,085) (120,737) I (49,142) (142,388) (672) 372 195,401 230,448 I (117,998) (64,305) I 50,074 52,444 I 83,211 18,601 1,074,642 1,056,041 I $ 1,157,853 $1,074,642 I $ 173,134 $ 57,465 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 D-7 SEWER FUND COMPARATIVE BALANCE SHEETS DECEMBER 31, 1998 AND 1997 1998 1997 ASSETS CURRENT ASSETS Cash and temporary investments $ 1,642,333 $ 1,297,812 Accrued interest receivable 23,768 17,088 Accounts receivable 185,653 184,698 Special assessments receivable Delinquent 20,336 16,651 Deferred 21,771 24,372 Prepaid items 1,253 1,823 TOTAL CURRENT ASSETS 1,895,114 1,542,444 FIXED ASSETS, AT COST 7,800,323 7,629,683 LESS ACCUMULATED DEPRECIATION (4,510,536) (4,315,143) NET FIXED ASSETS 3,289,787 3,314,540 TOTAL ASSETS $ 5,184,901 $ 4,856,984 LIABILITIES AND FUND EQUITY CURRENT LIABILITIES Accounts and contracts payable $ 4,398 $ 9,722 Salaries and compensated absences payable 686 133 TOTAL CURRENT LIABILITIES 5,084 9,855 FUND EQUITY Contributed capital 4,618,466 4,460,022 Retained earnings Unreserved 561,351 387,107 TOTAL FUND EQUITY 5,179,817 4,847,129 TOTAL LIABILITIES AND FUND EQUITY $ 5,184,901 $ 4,856,984 -51- CITY OF SHOREWOOD, MINNESOTA Exhibit D-8 I SEWER FUND COMPARATIVE STATEMENTS OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS I YEARS ENDED DECEMBER 31, 1998 AND 1997 1998 1997 I OPERATING REVENUE Charges for services $ 695,940 $ 708,058 I Permits and connection fees 55,700 50,066 TOTAL OPERATING REVENUE 751,640 758,124 I OPERATING EXPENSES Personal services 23,747 7,094 I Supplies 1,412 1,716 Repairs and maintenance 4,552 4,368 Depreciation 195,393 191,393 I Professional service 6,661 1,154 Contracted services 51,155 52,346 Communication 162 138 I Insurance 2,074 2,429 Utilities 15,396 12,579 MCES charges 374,509 517,056 I Other 1,114 126 TOTAL OPERATING EXPENSES 676,175 790,399 I OPERATING INCOME (LOSS) 75,465 (32,275) NONOPERATING REVENUE I Interest on investments 79,823 63,771 Other income 18,956 I TOTAL NONOPERATING REVENUE 98,779 63,771 NET INCOME 174,244 31,496 I RETAINED EARNINGS, JANUARY 1 387,107 355,611 I RETAINED EARNINGS, DECEMBER 31 $ 561,351 $ 387,107 I I I I -52- 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 D-IO RECYCLING FUND CONWARATIVEBALANCESHEETS DECEMBER 31, 1998 AND 1997 1998 1997 ASSETS Cash and temporary investments $ 17,503 $ 14,258 Accrued interest receivable 331 242 Accounts receivable 15,471 8,683 Special assessments receivable Delinquent 650 400 Deferred 1,277 1,498 TOTAL ASSETS $ 35,232 $ 25,081 LIABILITIES AND RETAINED EARNINGS CURRENT LIABILITIES Accounts and contracts payable $ $ 1,924 RETAINED EARNINGS Unreserved 35,232 23,157 TOTAL LIABILITIES AND RETAINED EARNINGS $ 35,232 $ 25,081 -54- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Exhibit D-ll RECYCLING FUND COMPARATIVE STATEMENTS OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS YEARS ENDED DECEMBER 31, 1998 AND 1997 1998 1997 OPERATING REVENUE Charges for services $ 91,257 $ 71,890 OPERATING EXPENSES Personal services 1,423 571 Supplies 232 2,080 Contracted service 78,693 70,053 Other 81 TOTAL OPERATING EXPENSES 80,348 72,785 OPERATING LOSS 10,909 (895) NONOPERATING REVENUE (EXPENSES) Interest on investments 1,166 843 NET INCOME (LOSS) 12,075 (52) RETAINED EARNINGS, JANUARY 1 23,157 23,209 RETAINED EARNINGS, DECEMBER 31 $ 35,232 $ 23,157 -55- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Exhibit D-12 RECYCLING FUND COMPARATIVE STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31,1998 AND 1997 1998 1997 CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) $ 10,909 $ (895) Adjustments to reconcile operating loss to net cash provided (used) by operating activities: (Increase) decrease in assets: Accounts receivable (6,788) 493 Special assessments receivable (29) (525) Increase (decrease) in liabilities: Accounts payable (1,924) 1,924 NET CASH PROVIDED BY OPERATING ACTIVITIES 2,168 997 CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 1,077 876 INCREASE IN CASH AND CASH EQUIVALENTS 3,245 1,873 CASH AND CASH EQUIVALENTS, JANUARY 1 14,258 12,385 CASH AND CASH EQUIVALENTS, DECEMBER 31 $ 17,503 $ 14,258 -56- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Exhibit D-13 STORMW ATER MANAGEMENT UTILITY FUND COMPARATIVE BALANCE SHEETS DECEMBER 31, 1998 AND 1997 1998 1997 ASSETS CURRENT ASSETS Cash and investments $ 199,404 $ 233,903 Accrued interest receivable 3,779 3,066 Accounts receivable 21,042 12,096 Special assessments receivable Delinquent 1,184 1,107 Deferred 1,069 1,265 TOTAL ASSETS $ 226,478 $ 251,437 LIABILITIES AND RETAINED EARNINGS LIABILITIES Accounts payable $ 6,889 $ Salaries payable 55 36 TOTAL CURRENT LIABILITIES 6,944 36 RETAINED EARNINGS Unreserved 219,534 251,401 TOTAL LIABILITIES AND RETAINED EARNINGS $ 226,478 $ 251,437 -57- CITY OF SHOREWOOD, MINNESOTA Exhibit D-14 STORMW ATER MANAGEMENT UTllJTY FUND COMPARATIVE STATEMENTS OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS YEARS ENDED DECEMBER 31, 1998 AND 1997 1998 1997 OPERATING REVENUE Charges for services $ 45,591 $ 44,911 OPERATING EXPENSES Personal services 1,898 3,252 Supplies 119 2,278 Professional services 9,424 7,378 Contracted services 88,685 8,683 TOTAL OPERATING EXPENSES 100,126 21,591 OPERATING INCOME (LOSS) (54,535) 23,320 NONOPERATING REVENUE Interest on investments 12,668 12,733 INCOME (LOSS) BEFORE OPERATING TRANSFERS (41,867) 36,053 OPERATING TRANSFER FROM OTHER FUNDS 10,000 10,000 NET INCOME (LOSS) (31,867) 46,053 RETAINED EARNINGS, JANUARY 1 251,401 205,348 RETAINED EARNINGS, DECEMBER 31 $ 219,534 $ 251,401 -58- 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 D-15 STORMW A TER MANAGEMENT UTILITY FUND COMPARATIVE STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 1998 AND 1997 1998 1997 CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) $ (54,535) $ 23,320 Adjustments to reconcile operating income (loss) to net cash provided by operating activities: (Increase) decrease in assets: Accounts receivable (8,946) (1) Special assessments receivable 119 170 Increase (decrease) in liabilities: Accounts payable 6,889 Salaries payable 19 19 NET CASH PROVIDED BY OPERATING ACTIVITIES (56,454) 23,508 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Operating transfers from other funds 10,000 10,000 CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 11,955 11,010 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (34,499) 44,518 CASH AND CASH EQUIVALENTS, JANUARY I 233,903 189,385 CASH AND CASH EQUIVALENTS, DECEMBER 31 $ 199,404 $ 233,903 -59- '. CITY OF SHOREWOOD, MINNESOTA LIQUOR FUND COMPARATIVE BALANCE SHEETS DECEMBER 31, 1998 AND 1997 ASSETS CURRENT ASSETS Cash and temporary investments Accrued interest receivable Accounts receivable Inventories, at cost Prepaid items TOTAL CURRENT ASSETS FIXED ASSET, AT COST LESS ACCUMULATED DEPRECIATION TOTAL FIXED ASSETS TOTAL ASSETS LIABILITIES AND RETAINED EARNINGS CURRENT LIABILITIES Accounts and contracts payable Salaries and compensated absences payable TOTAL CURRENT LIABILITIES RETAINED EARNINGS Unreserved TOTAL LIABILITIES AND RETAINED EARNINGS -60- Exhibit D-16 I I 1998 1997 I $ 44,591 $ 55,487 I 2,809 2,475 184 336,060 322,939 I 13,366 11,594 396,826 392,679 I 102,488 102,488 I (51,519) (40,761) 50,969 61,727 I $ 447,795 $ 454,406 I $ 110,387 $ 122,805 I 9,481 8,421 119,868 131,226 I 327,927 323,180 I $ 447,795 $ 454,406 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 D-17 LIQUOR FUND COMPARATIVE STATEMENTS OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS YEARS ENDED DECEMBER 31,1998 AND 1997 1998 1997 OPERATING REVENUE Sales Less cost of sales $ 2,075,485 (1,649,619) $ 1,876,660 (1,492,786) TOTAL OPERATING REVENUE 425,866 383,874 OPERATING EXPENSES Personal services Supplies Depreciation Professional services Contracted services Insurance Utilities Rent Advertising Other 197,756 181,364 9,505 9,077 10,758 10,551 2,520 2,688 2,965 1,732 14,942 13,545 22,589 23,799 145,978 140,519 5,338 7,154 15,683 13,745 428,034 404,174 (2,168) (20,300) TOTAL OPERATING EXPENSES OPERATING LOSS NON OPERA TING REVENUE (EXPENSES) Interest on investments Other expense 10,306 9,167 (3,391) (1,911) 6,915 7,256 4,747 (13,044) 323,180 336,224 $ 327,927 $ 323,180 TOTAL NONOPERATING REVENUE (EXPENSES) NET INCOME (LOSS) RETAINED EARNINGS, JANUARY 1 RETAINED EARNINGS, DECEMBER 31 -61- -62- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA LIQUOR FUND COMBINING BALANCE SHEETS DECEMBER 31, 1998 AND 1997 Tonka Bay Waterford Center 1998 1997 1998 1997 ASSETS CURRENT ASSETS Cash and temporary investments (deficit) $ 79,046 $ 58,853 $(166,804) $ (140,706) Accrued interest receivable 1,005 962 Accounts receivable 57 51 Inventories, at cost 75,041 73,996 105,720 112,897 Prepaid items 3,475 2,790 5,093 4,277 TOTAL CURRENT ASSETS 158,567 136,658 (55,991) (23,481) FIXED ASSETS, AT COST 3,750 3,750 76,403 76,403 LESS ACCUMULATED DEPRECIATION (461) (211) (30,537) (22,663) NET FIXED ASSETS 3,289 3,539 45,866 53,740 TOTAL ASSETS $ 161,856 $ 140,197 $ (10,125) $ 30,259 LIABILITIES AND RETAINED EARNINGS (DEFICIT) CURRENT LIABILITIES Accounts and contracts payable $ 30,876 $ 29,730 $ 31,007 $ 30,006 Salaries and compensated absences payable 2,343 1,935 4,097 3,609 TOTAL LIABILITIES 33,219 31,665 35,104 33,615 RETAINED EARNINGS (DEFICIT) Unreserved 128,637 108,532 (45,229) (3,356) TOTAL LIABILITIES AND RETAINED EARNINGS (DEFICIT) $ 161,856 $ 140,197 $ (10,125) $ 30,259 -63- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA LIQUOR FUND COMBINING SCHEDULES OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS (DEFICIT) YEARS ENDED DECEMBER 31, 1998 AND 1997 Tonka Bay Waterford Center 1998 1997 1998 1997 OPERATING REVENUE Sales $ 568,893 $ 513,525 $ 643,676 $ 579,992 Less cost of goods sold (456,286) (416,109) (500,748) (454,862) GROSS PROFIT 112,607 97,416 142,928 125,130 OPERATING EXPENSES Personal services 60,071 55,648 63,159 61,066 Supplies 1,839 1,859 2,936 2,525 Depreciation 250 192 7,874 7,839 Professional services 1,082 992 719 848 Contracted services 1,044 1,064 358 358 Insurance 4,231 3,796 4,893 4,474 Utilities 6,631 6,641 7,648 8,901 Rent 15,841 14,699 88,803 85,086 Advertising 668 1,331 2,180 3,171 Other 3,994 3,414 5,148 4,597 TOTAL OPERATING EXPENSES 95,651 89,636 183,718 178,865 OPERATING INCOME (LOSS) 16,956 7,780 (40,790) (53,735) NONOPERATING REVENUE (EXPENSES) Interest on investments 3,540 3,421 Other income (expense) (391) (355) (1,083) (997) TOTAL NONOPERATING REVENUE (EXPENSES) 3,149 3,066 (1,083) (997) NET INCOME (LOSS) 20,105 10,846 (41,873) (54,732) RETAINED EARNINGS (DEFICIT), JANUARY 1 108,532 97,686 (3,356) 51,376 RETAINED EARNINGS (DEFICIT), DECEMBER 31 $ 128,637 $ 108,532 $ (45,229) $ (3,356) -65- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA LIQUOR FUND COMBINING SCHEDULES OF CASH FLOWS YEARS ENDED DECEMBER 31, 1998 AND 1997 CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Other income (expense) related to operations Depreciation (Increase) decrease in assets: Accounts receivable Inventory Prepaid items Increase (decrease) in liabilities: Accounts and contracts payable Salaries and compensated absences payable NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of fixed assets CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS (DEFICIT), JANUARY 1 CASH AND CASH EQUIVALENTS (DEFICIT), DECEMBER 31 -67- I I Tonka Bay I 1998 1997 $ 16,956 $ 7,780 I (391) (355) I 250 192 57 (57) I (1,045) (24,174) (685) (68) I 1,146 9,105 408 (942) I 16,696 (8,519) I (1,500) I 3,497 3,471 I 20,193 (6,548) I 58,853 65,401 $ 79,046 $ 58,853 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 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 as a fixed asset in this category, a specific piece of property must meet three attributes: 1. Tangible nature 2. A life longer than the current fiscal year 3. A significant value CITY OF SHOREWOOD, MINNESOTA GENERAL FIXED ASSETS ACCOUNT GROUP COMP ARA TIVE SCHEDULES OF GENERAL FIXED ASSETS - BY SOURCE DECEMBER 31, 1998 AND 1997 Exhibit E-l 1998 1997 GENERAL FIXED ASSETS Land $ 456,826 $ 456,826 Buildings and structures 1,347,876 1,347,876 Improvements other than buildings 1,355,431 1,337,388 Furniture and equipment 1,312,669 1,278,551 TOTAL GENERAL FIXED ASSETS $ 4,472,802 $ 4,420,641 INVESTMENT IN GENERAL FIXED ASSETS General fund Capital projects funds $ 1,204,243 3,268,559 $ 1,170,125 3,250,516 TOTAL INVESTMENT IN GENERAL FIXED ASSETS $ 4,472,802 $ 4,420,641 -69- 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 GENERAL FIXED ASSETS ACCOUNT GROUP SCHEDULE OF GENERAL FIXED ASSETS - BY FUNCTION AND ACTIVITY DECEMBER 31, 1998 Exhibit E-2 FUNCTION General government Buildings Improvements Furniture and other than and Total Land Structures Buildings Equipment $ 725,977 $ $ 305,372 $ 161,504 $ 259,101 2,311,351 153,500 919,581 184,702 1,053,568 1,435,474 303,326 122,923 1,009,225 Public works Culture and recreation TOTAL GENERAL FIXED ASSETS $4,472,802 $ 456,826 $ 1,347,876 $ 1,355,431 $1,312,669 -70- CITY OF SHOREWOOD, MINNESOTA GENERAL FIXED ASSETS ACCOUNT GROUP SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS - BY FUNCTION YEAR ENDED DECEMBER 31, 1998 General Fixed Assets January 1 Additions General government $ 694,170 $ 51,166 Public works 2,309,040 17,306 Culture and recreation 1,417,431 18,043 TOTAL GENERAL FIXED ASSETS $ 4,420,641 $ 86,515 -71- Deductions $ 19,359 14,995 $ 34,354 Exhibit E-3 I I General I Fixed Assets December 31 $ 725,977 I 2,311,351 I 1,435,474 I $ 4,472,802 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 GENERAL LONG-TERM DEBT ACCOUNT GROUP General obligation bonds and other forms of long-term debt supported by general revenues are obligations of a governmental unit .as a whole and not its individual constituent funds. The amount of outstanding long-term indebtednesswhichis backed by the full faith and credit of the government (excluding enterprise fund debt) is recorded and accounted for in a separate self-balancing account group titled the "General Long- Term Debt Account Group." Also, this debt group includes certain liabilities not expected to be 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 GENERAL LONG-TERM DEBT ACCOUNT GROUP COMPARATIVE STATEMENTS OF GENERAL LONG-TERM DEBT DECEMBER 31, 1998 AND 1997 Exhibit F-l 1998 1997 AMOUNT AVAILABLE FOR DEBT SERVICE Debt service funds $ 424,978 $ 478,192 AMOUNTS TO BE PROVIDED Future tax levies, assessments and tax increments 874,115 1,151,101 TOTAL AMOUNT A V AILABLE AND TO BE PROVIDED $ 1,299,093 $ 1,629,293 GENERAL LONG-TERM DEBT PAYABLE Compensated absences payable $ 37,633 $ 33,396 Lease purchase payable 276,460 295,897 General obligation improvement bonds 545,000 680,000 Tax increment revenue bonds 440,000 620,000 TOTAL GENERAL LONG-TERM DEBT PAYABLE $ 1,299,093 $ 1,629,293 -72- CITY OF SHOREWOOD, MINNESOTA SCHEDULE OF BONDS PAYABLE DECEMBER 31, 1998 GENERAL OBLIGATION IMPROVEMENT BONDS G.O. Improvement Bonds of 1991 G.O. Improvement Bonds of 1993 TOTAL TAX INCREMENT REVENUE BONDS Tax: Increment Revenue Bonds of 1991 GENERAL OBLIGA nON REVENUE BONDS G.O. Water Revenue Bonds G.O. Water Revenue Bonds TOTAL REVENUE BONDS TOTAL ALL BONDS -73- Final Interest Issue Maturity Rates Date Date 5.50-5.85 11-01-91 2-01-02 4.00-4.45 12-01-93 2-01-04 I I I I I I I I I I I I I I I I I I I 9.00 2-01-00 5-01-91 4.15-4.75 4.20-5.40 11-01-95 11-01-96 2-01-11 2-01-12 M bO 0 0 0 0 0 0 0 0 ~ 00 .s 0 0 0 0 0 0 0 0 .... 0\ ~ 0 O~ 0 0 0 0 0 0 :c - B 0 V) V)~ o~ V)~ vi' o~ vi' :a ('f') 00 IC ~ ~ IC 0 t"- V) -- '" ('f') - V) ~ IC~ 00 ~ ~~ ~ N ;:i N ~ - ('f') 0 (A (A ~ 0 0 0 0 0 0 0 0 ~ 0 0 0 0 0 0 0 0 '" 8 0 0 0 0 o~ 0 0 0 ~ o~ 0 o~ o~ V)~ o~ o~ d ~ V) 0 ~ 00 IC ~ 00 V) V) - ('f') j:Q ~ V) - t"- ~ N ('f') II"l.- ~ (A (A ~ 0 0 0 0 0 0 0 0 ~ ~ 0 0 0 0 0 0 0 0 1;l 0 0 o~ 0 0 0 0 0 c 0 vi' V) o~ 0 0 o~ V)~ 0 '" IC N 00 N N IC 00 00 ~ - ~ 0\ ('f') N~ 0\ O\~ 00 t"- 0\ ;j - - N~ ~~ < (A (A - - - - - - - - - - - - - - - - - I ~ t"- I - - 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, 1998 Total Bonds ~ Principal Interest 1999 755,000 615,762 2000 320,000 126,608 2001 310,000 111,515 2002 300,000 96,553 2003 205,000 84,334 2004 210,000 74,570 2005 180,000 65,244 2006 190,000 56,240 2007 185,000 46,945 2008 185,000 37,603 2009 185,000 28,040 2010 190,000 18,115 2011 180,000 8,135 2012 60,000 1,620 TOTAL $ 3,455,000 $ 1,371,284 * Tax increment collections will be remitted to the bond holders. Bonds will periodically be called in numerical sequence and redeemed at their accredited value as tax increment collections allow. -75- ~ ...r- 0 0'1 ...r- ...r- 0 ...r- 0 II') l'f'\ 0 II') II') 0 ~ l'f'\ t:l l'f'\ N l'f'\ - 0 0'1 ...r- ...r- ...r- 0 ...r- - l'f'\ N ...r- - 0'1 0 r-- ...r-~ 0'1 0 N N 0'1 \C 0 - - \C~ 0 '" Q) or) oo~ 0\ N~ ..,; II')~ \C~ \C~ r--~ oo~ 00 00 ...r-~ :c "C:l .... - - s:: Q) - 0 0'1 0'1 00 r-- \C II') ...r- l'f'\ N - l'f'\ :.= 0 1:: - - 00 ~ a:l .... riIil Q) w S Q) > 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ~ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 '" 0 0 0 0 0 0 0 0 0 O~ 0 0 0 0 0 ci p.. o~ o~ II')~ II')~ or) o~ o~ o~ or) II')~ o~ 0 o~ o~ 0 II') 00 0'1 00 00 00 0'1 00 0'1 00 00 00 0'1 00 \C r-- 0 5 - - - - - - - - - - - - - ...r- ~ N~ W II') II') I .... 00 00 '" l'f'\ l'f'\ \C ~ ..,; ...r-~ r-- I * Q) r-- r-- 1:: '" 1:: "C:l ...r- ...r- Q) s:: .... e 0 w Q) a:l .... u Q) .s S 0 ~ Q) (;j 0 > 0 0 E-< ~ e- o 0 u 0 o~ .5 ...r- ...r- ~ ...r- ...r- w ~ l'f'\ 00 \C 0'1 0 0 \C .... ...r- oo r-- l'f'\ l'f'\ 00 II') s:: '" ...r- II') r--~ - ...r-~ ...r- oo Q) II')~ 00 or) N~ 0 ~ - a:l N - - \C .... 5 .... e w Q) > 0 a 0 0 0 0 0 0 0 '" 0 0 0 0 0 0 0 e e- o 0 0 0 0 0 0 .... u or) o~ II')~ II')~ 0 o~ II')~ ci ;E l'f'\ l'f'\ N - N N ...r- - - - - II') 0 w - - - - - - - - - - - - - - - - - - - CITY OF SHOREWOOD, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) DECEMBER 31, 1998 Exhibit G-l I I I I I I I I I I I I I I I I I I I YEAR 2000 ISSUE (UNAUDITED) The year 2000 issue is the result of shortcomings in many electronic data processing systems and other electronic equipment that may adversely affect the government's operations as early as fiscal year 1999. The City has completed an inventory of computer systems and other electronic systems that may be affected by the year 2000 issue and that are necessary to conducting City operations. The City has assessed the areas that are critical to operations and is in the process of obtaining assurances from their vendors. Because of the unprecedented nature of the year 2000 issue, its effects and the success of related remediation efforts will not be fully determinable until the year 2000 and thereafter. Management cannot assure that the City is or will be year 2000 ready, that the City's remediation efforts will be successful in whole or in part, or that parties with whom the City does business will be year 2000 ready. -77- I I I I I I I I I I I I I I I I I I I CITY OF.SHOREWOOD, MINNESOTA 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 Table 1 GENERAL FUND EXPENDITURES AND OTHER USES BY FUNCTION LAST TEN FISCAL YEARS Fiscal Total General Public Public Culture and Misc/ Debt Year Expenditures Government Safety Works Recreation Transfers Service 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 1992 2,301,950 654,085 571,077 434,015 116,173 526,600 1993 2,184,260 668,410 580,153 436,224 119,473 380,000 1994 2,536,943 755,097 618,047 433,699 128,600 601,500 1995 2,326,231 723,098 650,703 432,759 115,446 404,225 1996 2,479,151 782,466 689,904 472,607 109,988 424,186 1997 2,614,217 821,257 744,072 451,756 115,193 444,395 37,544 1998 2,891,689 961,340 788,253 505,240 110,287 489,025 37,544 -78- CITY OF SHOREWOOD, MINNESOTA GENERAL FUND REVENUE AND OTHER SOURCES BY SOURCE LAST TEN FISCAL YEARS Table 2 I I I I I I I I I I I I I I I I I I I Total General Licenses Fiscal General Fund Property and Inter- Misc/ Year Revenues Taxes Permits Governmental Fines Transfers 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 1992 2,307,389 1,576,158 175,123 283,689 89,960 182,459 1993 2,429,910 1,515,633 247,557 426,102 70,135 170,483 1994 2,531,339 1,487,398 256,243 441,040 73,998 272,660 1995 2,378,009 1,489,822 184,857 440,720 68,765 193,845 1996 2,457,755 1,569,653 205,459 427,468 80,826 174,349 1997 2,670,175 1,703,509 236,672 450,185 76,340 203,469 1998 2,770,825 1,776,853 223,248 532,359 73,337 165,028 -79- 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) Percentage Collection Percentage Collection of Total Fiscal Total of Current of Levy of Prior Total Collections Year Levy Year's Levy Collected Year's Levy Collections to Levy 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 1992 1,864,577 1,819,238 97.57 55,917 1,875,155 100.57 1993 1,932,454 1,908,428 98.76 51,464 1,959,892 101.42 1994 1,518,735 1,505,212 99.11 13,886 1,519,098 100.02 1995 1,518,108 1,501,389 98.90 13,999 1,515,388 99.82 1996 1,598,713 1,577,353 98.66 16,946 1,594,299 99.72 1997 1,703,016 1,683,193 98.84 19,982 1,703,175 100.01 1998 1,778,585 1,760,645 98.99 15,694 1,776,339 99.87 (1) Includes state paid property tax credits * Includes $66,971 state aid reduction from the Homestead and Agricultural Credit Aid. Prior to 1994, tax levies included the amount of Homestead and Agriculture Credit Aid (HACA) to be received from the State. Legislation passed in 1993 required that, beginning with taxes levied for collection in 1994, tax levies shall be reported net of the HACA received from the state. As a result, the taxes levied more accurately reflect the amount of taxation by the local government. -80- CITY OF SHOREWOOD, MINNESOTA ASSESSED V ALUA nON, TAX LEVIES AND MILL RATES (shown by year of tax collectibility) 1998 1997 1996 1995 (2) (2) Tax capacity $ 9,897,574 $ 9,901,879 $ 9,115,960 $ 8,045,468 Contribution to fiscal disparities pool (214,901 ) (202,668 ) (178,279 ) (185,232) Receivable from fiscal disparities pool 337,116 350,823 332,110 310,337 Tax increment (319.186) (294,512) (166.094 ) (22.195) Taxable valuationITotal tax capacity $ 9.700.603 $ 9.755.522 $ 9.103.697 $ 8.148.378 Tax levies General $ 1,778,585 $ 1,703,016 $ 1,573,930 $ 1,491,990 Debt service 24.783 26.118 Total $ 1.778,585 $ 1.703.016 $ 1.598.713 $ 1.518.108 Tax capacity rate General 18.317Rate 17.479Rate 17.252Rate 18.256Rate Debt service .179 .215 Total 18.317Rate 17.479Rate 17.431Rate 18.471Rate (1) The debt service levy includes $8,508 for 1996, $8,568 for 1995, $8,022 for 1994, $8,526 for 1993 and $8,414 for 1992, levied for the retirement of Storm Sewer District No.2 improvement bonds. Storm Sewer District No.2 was established by the City of Shorewood in 1991. This portion of the debt service tax levy is only levied within Storm Sewer District No. 2 to retire the $31,000 bond issue used to fmance the improvements within the District and is not reflected in the tax rates above. Table 5 reports the tax rate of this District separately. (2) Prior to 1994, tax levies included the amount of Homestead and Agriculture Credit Aid (HACA) to be received from the State. Legislation passed in 1993 required that, beginning with taxes levied for collection in 1994, tax levies shall be reported net of the HACA received from the state. As a result, the taxes levied more accurately reflect the amount of taxation by the local government. -81- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA PROPERTY TAX CAPACITY RATES - DIRECT AND OVERLAPPING GOVERNMENTS (PER $1000 OF TAX CAPACITY IN 1989-1998) Year (1) Taxes School District Watershed District Payable City County No. 276 No. 277 No.3 No.4 Miscellaneous 1988 22.825 31.667 65.440 58.550 .092 .570 5.988 1989 16.509 27.101 59.285 49.139 .075 .445 5.387 1990 20.299 27.916 53.658 43.434 .120 .436 5.121 1991 20.454 30.114 56.401 46.828 .131 .449 6.855 1992 20.164 34.327 64.530 56.643 .142 .490 5.481 1993 20.797 35.839 75.275 60.069 .668 .781 5.532 1994 19.904 37.441 77.323 67.785 .334 .707 5.724 1995 18.471 37.454 76.139 66.441 2.332 .762 5.847 1996 17.431 37.270 76.340 62.418 (2) 1.533 .864 6.390 1997 17.479 35.515 78.420 52.223 1.319 .860 6.149 1998 18.317 38.386 76.408 59.701 .660 .843 6.973 (1) Includes vocational school (2) Includes market value levy of .077. -83- 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 5 Totals School District No. 276 School Storm Watershed Dist. No. 277, Sewer Watershed Watershed District No.4 Watershed District District District Storm Sewer District No.2 No.3 No.4 District No.2 No.3 126.012 126.490 126.490 119.122 108.357 108.727 108.727 98.211 107.114 107.430 107.430 96.890 113.955 114.273 114.273 104.382 17.792 124.649 124.997 142.789 116.762 13.437 138.111 138.224 151.661 122.905 15.495 140.726 141.099 156.594 131.188 15.353 140.243 138.673 154.026 130.545 13.956 138.964 138.295 152.251 125.042 138.882 138.423 138.423 112.685 140.744 140.927 140.927 124.037 -84- CITY OF SHOREWOOD, MINNESOTA PRINCIPAL TAXPAYERS DECEMBER 31, 1998 Table 6 Percentage 1998 Tax of Total Taxpaver Tvoe of Business Capacity Tax Capacity Northern States Power Company Utility $ 68,940 .74% First State Bank of Excelsior Commercial 64,369 .69 Minnetonka Country Club Commercial 63,805 .68 Minnegasco Utility 52,294 .56 Waterford Partners LLC Commercial 49,175 .53 Shorewood Village Shopping Commercial 46,550 .50 Center, Inc. Two S Properties ResidentiaVCommercial 35,661 .38 Thomas J. & Cynthia J. Redmond Residential 31,274 .33 Steven C. & Mary Sue Simon Residential 31,180 .33 NSP Property Tax Department Utility 31.150 ......JJ Total $ 474.398 5.07% -85- 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 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 CITY OF SHOREWOOD, MINNESOTA Table 7 SPECIAL ASSESSMENT LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (1) Percentage Collection Percentage Collection of Total Total of Current of Levy of Prior Total Collections Levy Year's Levy Collected Year's Levy Collections to Levy $ 500,116 $ 497,733 99.52% $ 66,916 $ 564,649 112.90% 457,384 444,080 97.09 53,452 497,532 108.78 365,577 345,886 94.61 28,677 374,563 102.46 362,352 317,103 87.51 19,461 336,564 92.88 231,800 222,842 96.14 47,372 270,214 116.57 198,729 185,061 93.12 6,025 191,086 96.15 170,157 159,018 93.45 12,896 171,914 101.03 233,219 197,667 84.76 6,660 204,327 87.61 223,274 204,178 91.45 17,545 221,723 99.31 215,817 190,437 88.24 7,089 197,526 91.52 Fiscal Year -86- (2) (3) (4) (5) (6) (7) CITY OF SHOREWOOD, MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN DECEMBER 31, 1998 Table 8 I I Market Value $ 595.451.300 Debt Limit: 2.0% of market value (Note A) Amount of Debt Applicable to Debt Limit: $ 11,909,026 I I I I I I I I I I I I I I I I I Total Bonded Debt Less, (Note B) Improvement Bonds General Obligation Revenue Bonds Tax Increment Revenue Bonds Total Debt Applicable to Debt Limit $ 3,455,000 (545,000) (2,470,000) (440.000) Legal Debt Margin $ 11.909.026 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 of2.0 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 here under 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 (Defmitions:) "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 benefIted 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. Warrants or orders having no defmite or fIxed maturity. Obligations payable wholly from the income from revenue-producing conveniences. Obligations issued to create or maintain a permanent improvement revolving fund. 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. 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. 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. -87- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA RATIO OF NET BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA Table 9 Ratio of Net Bonded Debt Net Less Amount to Assessed Bonded Fiscal Estimated (1) Gross Reserved for Net Values/ Debt Year Population Tax Capacity Bonded Debt Debt Service Bonded Debt Tax Capacity Per Capita 1989 5815 $ 7,833,998 $ 2,990,000 $ 1,510,303 $ 1,479,697 .1889:1 254.46 1990 5917 7,197406 2,720,000 1,902,837 817,163 .1135:1 138.10 1991 6000 8,070,339 3,411,000 2,311,859 1,099,141 .1362: 1 183.19 1992 6135 7,859,115 2,496,000 1,742,742 753,258 .0958: 1 122.78 1993 6322 7,261,312 2,546,500 1,999,197 547,303 .0754:1 86.57 1994 6430 7,565,123 1,850,500 1,485,579 364,921 .0482: 1 56.75 1995 6614 8,148,378 3,524,500 1,419,732 2,104,768 .2583:1 318.17 1996 6794 9,103,697 3,602,500 503,635 3,098,865 .3404: 1 456.12 1997 6889 9,755,522 3,335,000 478,192 2,856,808 .2928: 1 414.69 1998 6955 9,700,603 3,015,000 424,978 2,590,022 .2670: 1 372.40 (1) Gross bonded debt amounts in this Table are general obligation special assessment bonds and revenue bonds whose principal source of funding will be sources other than general property taxes. The Tax Increment Revenue Bonds (totaling $440,000) are not included in the gross bonded debt as they are not backed by the full faith and credit of the City. -88- CITY OF SHOREWOOD, MINNESOTA RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT (1) TO TOTAL GENERAL EXPENDITURES. Table 10 Percent of Debt Service Total Total General to General Year Principal Interest Debt Service Expenditures. Expenditures 1989 $ 2,625,000 (2) $ 253,113 $ 2,878,113 $ 1,794,684 160.37% 1990 260,000 175,098 435,098 2,065,0 II 21.07 1991 290,000 173,495 463,495 2,241,781 20.68 1992 905,000 167,163 1,072,163 2,301,950 46.58 1993 264,500 141,889 406,389 2,184,260 18.61 1994 681,000 (3) 120,862 801,862 2,536,943 31.61 1995 231,000 99,823 330,823 2,326,231 14.22 1996 767,000 (4) 72,461 839,461 2,479,151 33.86 1997 142,500 39,921 182,421 2,614,217 6.98 1998 135,000 33,099 168,099 2,891,689 5.81 (1) Excludes G.O. Bonds reported in Enterprise Funds and the $920,000 Tax Increment Revenue Bonds are not included in the gross bonded debt as they are not backed by the full faith and credit of the City. (2) Principal included bonds defeased in 1989 (3) Principal included bonds called in 1994 (4) Principal included bonds called in 1996 . Includes General Fund only -89- 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 COMPUTATION OF DIRECT AND OVERLAPPING DEBT DECEMBER 31, 1998 Table 11 Amount Gross Bonded Percentage of Net Debt Debt Used for Applicable Applicable Net Debt Calc Net Debt District to District Direct Debt. City of Shorewood $ 3.015.000 $ 2.590.022 100.00% $ 2.590.022 Overlapping Debt $147,500,000 $143,267,872 1.01 % $ 1,450,522 Hennepin County 15,165,000 12,406,953 1.34 166,636 Hennepin Suburban Park District 56,140,000 32,086,687 19.23 6,169,638 School District #276 12,675,000 12,301,635 2.18 267,807 School District #277 132.875.000 104.048.189 -21 529.971 Metropolitan Council Total Overlapping Debt $364.355.000 $304.1 11.336 2.82% $ 8.584.574 Total Direct and Overlapping Debt $367.3 70.000 $306.701.358 3.64% $11.174.596 . Direct debt includes all debt backed by the full faith and credit of the City even though it will be fmanced in part by special assessments or enterprise fund revenues. Tax increment revenue bonds supported only by the tax increments generated within the TIF District are excluded from this computation consistent with Table 9. -90- 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 1989 $ 176,719 $ 110,987 $ 65,732 $ 10,000 $ 8,125 $ 18,125 3.627 to 1 1990 192,682 II 6,289 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 1992 199,891 125,714 74,177 10,000 5,823 15,823 4.688 to 1 1993 172,624 139,490 33,134 10,000 4,860 14,860 2.230 to 1 1994 262,892 159,179 103,173 15,000 4,035 19,035 5.449 to I 1995 198,566 166,970 31,596 15,000 3,486 18,486 1.710 to 1 1996 272,678 170,485 102,193 15,000 74,473 89,473 1.142 to 1 1997 252,866 180,601 72,265 125,000 120,737 245,737 .294 to 1 1998 3II,925 179,914 132,0 II 185,000 125,085 310,085 .4281 to 1 (1) Excluding depreciation and interest on bonds -91- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA PROPERTY VALUE, CONSTRUCTION AND BANK DEPOSITS LAST TEN FISCAL YEARS (1) Commercial (1) Construction Residential Construction Fiscal Number Year Value of Units Value 1989 $ 89 $ 16,949,136 1990 20,000 82 16,252,990 1991 69 14,044,120 1992 55 10,899,687 1993 102 17,941,776 1994 960,000 86 16,530,925 1995 2,030,000 40 10,167,210 1996 1,350,000 37 9,393,436 1997 695,000 41 11,825,463 1998 1,317,000 35 9,563,920 Sources (1) City Planning and Inspection Department (2) County Assessor's Office (3) 1st State Bank of Excelsior (Bank deposits are not shown for years 1989-1995 as no banks are located within the City limits during this period.) -92- 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 (2) Property Value Commercial Residential Total $ 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 12,081,200 370,575,700 382,656,900 11,307,900 391,057,000 402,364,900 11,338,700 413,780,300 425,119,000 9,793,000 453,616,100 463,409,100 10,562,200 517,983,900 528,546,100 13,034,900 542,674,600 555,709,500 14,572,900 580,878,400 595,451,350 Table 13 (3) Bank Deposits $ 40,895,000 52,906,000 63,551,000 -93- I I I I Year of incorporation Form of government Fiscal year begins Area of city Population 1998 Estimated 1990 Census 1980 Census 1970 Census I I I I I 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 I I I I I I I Building permits issued in 1998 Number of permits Value CITY OF SHOREWOOD, MINNESOTA MISCELLANEOUS STATISTICS DECEMBER 31, 1998 Table 14 1956 Council-Administrator Adopted May 14, 1956 January 1 6.0 Square Miles 6,955 5,917 4,646 4,223 38.1 9.8 1.7 2.7 15 $65.00/quarter 56.2 177 658 $17,139,043 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 I I I Elections Registered voters last election Number of votes cast last election Percentage of registered voters voting 5 95.8 1,028 403,000 gallons 15.2 4,680,000 gallons 165 $1.45/1000 gallons 22 20 42 5,162 3,748 72.6% -94-