2004 - Comp. Annual Financial Report
CITY OF SHOREWOOD, MINNESOTA
COMPREHENSNE
~ALFINANCIALREPORT
FOR THE YEAR ENDED
DECEMBER 31,2004
CRAIG DAWSON, CITY ADMINISTRATOR
REPORT PREPARED BY
BONNIE BURTON, FINANCE DIRECTOR/TREASURER
MEMBER OF GOVERNMENT FINANCE OFFICERS ASSOCIATION
OF THE UNITED STATES AND CANADA
CITY OF SHOREWOOD, MINNESOTA
TABLE OF CONTENTS
DECEMBER 31,2004
1. INTRODUCTORY SECTION
Elected and Appointed Officials
Organization Chart
Letter of Transrnittal from Finance Director
Certification of Achievement for Excellence in Financial Reporting
II. FINANCIAL SECTION
Independent Auditor's Report
Management's Discussion and Analysis
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Assets
Statement of Activities
Fund Financial Statements
Governmental Funds
Balance Sheet
Reconciliation of the Balance Sheet to the Statement of Net Assets
Statement of Revenues, Expenditures and Changes in Fund Balances
Reconciliation of the Statement of Revenues, Expenditures
and Changes in Fund Balances to the Statement of Activities
General Fund
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Proprietary Funds
Statement of Net Assets
Statement of Revenues, Expenses and Changes in Fund Net Assets
Statement of Cash Flows
Fiduciary Funds
Statement of Net Assets
Notes to the Financial Statements
Combining and Individual Fund Statements and Schedules
Nonmajor Governmental Funds
Combining Balance Sheet
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Debt Service Funds
Combining Balance Sheet
Combining Schedule of Revenues, Expenditures and Changes in Fund Balances
Enterprise Funds
Water Fund
Statements of Net Assets
Statements of Revenues, Expenses and Changes in Fund Net Assets
Statements of Cash Flows
Exhibit
Page No.
1
2
i-v
3
4-5
I-X
1 6
2 7-8
3 9 - 10
4 11
5 12 - 13
6 14
7 15
8 16-17
9 18 - 19
10 20 - 23
11 24
25 - 44
A-I 45 - 46
A-2 47 - 48
B-1 49 - 53
C-1 54
C-2 55
D-1
D-2
D-3
56
57
58
CITY OF SHOREWOOD, MINNESOTA
TABLE OF CONTENTS - CONTINUED
DECEMBER 31,2004
Exhibit Page No.
II. FINANCIAL SECTION - CONTINUED
Combining and Individual Fund Statements and Schedules
Sewer Fund
Statements of Net Assets E-1 59
Statements of Revenues, Expenses and Changes in Fund Net Assets E-2 60
Statements of Cash Flows E-3 61
Recycling Fund
Statements of Net Assets F-1 62
Statements of Revenues, Expenses and Changes in Fund Net Assets F-2 63
Statements of Cash Flows F-3 64
Storm water Management Utility Fund
Statements of Net Assets G-1 65
Statements of Revenues, Expenses and Changes in Fund Net Assets G-2 66
Statements of Cash Flows G-3 67
Liquor Fund
Statements of Net Assets H-1 68
Statements of Revenues, Expenses and Changes in Fund Net Assets H-2 69
Statements of Cash Flows H-3 70
Combining Schedule of Net Assets H-4 71
Combining Schedule of Revenues, Expenses and Changes in Fund Net Assets H-5 72
Combining Schedule of Cash Flows H-6 73
Agency Fund
Combining Schedule of Changes in Assets and Liabilities G-1 74
Table
III STATISTICAL SECTION (UNAUDITED)
Government-wide Expenses by Function 1 75 - 76
Government-wide Revenues 2 77
General Fund Expenditures and Other Uses by Function 3 78
General Fund Revenue and Other Sources by Source 4 79
Property Tax Levies and Collections 5 80
Estimated Market Value, Assessed Valuation, Tax Levies and Tax Capacity Rates 6 81 - 82
Property Tax Capacity Rates - Direct and Overlapping Governments 7 83 - 84
Principal Taxpayers 8 85
Special Assessment Levies and Collections 9 86
Computation of Legal Debt Margin 10 87
Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita 11 88
Ratio of Annual Debt Service Expenditures for General Bonded Debt to
Total General Expenditures 12 89
Computation of Direct and Overlapping Debt 13 90
Revenue Bond Coverage 14 91
Property Value and Construction 15 92
Miscellaneous Statistics 16 93
INTRODUCTORY SECTION
CITY OF SHOREWOOD
SHOREWOOD, MINNESOTA
YEAR ENDED
DECEMBER 31,2004
Name
C. Woodrow Love
Christine Lizee
Scott Zerby
John Garfunkel
Laura Turgeon
Name
Craig W. Dawson
Bonnie Burton
CITY OF SHOREWOOD, MINNESOTA
ELECTED AND APPOINTED OFFICIALS
DECEMBER 31, 2004
ELECTED
Title
Term Expires
Mayor
Council Member
Council Member
Council Member
Council Member
12/31/04
12/31/04
12/31/04
12/31/04
12/31/04
APPOINTED
Title
City Administrator/Clerk
Finance Director/Treasurer
-1-
CITY OF
SHOREWOOD
.
5755 COUNTRY CLUB ROAD · SHOREWOOD, MINNESOTA 55331-8927 · (952) 474-3236
FAX (952) 474-0128. www.ci.shorewood.mn.us. cityl1all@ci.shorewood.mn.us
June 1,2005
To the Honorable Mayor, Members of the City Council, and Citizen$ofthe
City of Shorewood, Minnesota
We are submitting the Comprehensive Annual FinancialReport of the City of Shorewood,
Minnesota, for the fiscal year ended December 31, 2004. Management assumes full
responsibility for the completeness and reliability of all of the .information presented in this
report. To the best of our knowledge and belief, the enclosed data are accurate in all
material respects and are reported in a manner designed to present fairly the financial
position and results of operations of the various funds and account groups of the City.
INDEPENDENT AUDIT
Minnesota State Statutes require an annual audit of the City's accounts by the Minnesota
State Auditor or by independent certified public accountants. The City of Shorewood's
financial statements have been audited by the firm of Abdo, Eick & Meyers, LLP, a firm of
independent certified public accountants, and they have issued an unqualified ("clean")
opinion on the City of Shorewood's financial statements for the year ended December 31,
2004. The independent auditor's report is presented at the front of the finanyia1 section of
this report.
INTERNAL CONTROLS
City management staff has established a comprehensive internal control framework that is
designed both to protect the government's assets from loss, theft, or misuse, and to compile
sufficient reliable information for the preparation of the City of Shorewood's financial.
statements in confonnity with GAAP. Because the cost of internal controls should not
exceed anticipated benefits, the City of Shorewood's comprehensive framework of internal
controls has been designed to provide reasonable, rather than absolute, assurance that the
financial statements are free of anY material misstatements. The internal control system is
evaluated as part ofthe annual audit, and changes are recommended when needed.
~
toJ PRINTED ON RECYCLED PAPE.R
ORGANIZATION OF THE REPORT
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
independent auditor's report. Management's discussion and analysis (MD&A) immediately
follows the independent auditor's report and provides a narrative introduction, overview, and
analysis of the basic financial statements. MD&A complements this letter of transmittal and
should be read in conjunction with it. The financial statements follow the MD&A letter.
Lastly, the Statistical section includes financial and demographic information, generally
presented on a multi-year basis.
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.
PROFILE OF THE GOVERNMENT
The City of Shorewood was incorporated in 1956 and is a suburb of the City of Minneapolis.
It is located 20 miles southwest of the Twin Cities 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 had
an estimated population of 7,685 as of 2004. The City, which is currently 95% developed,
continues to experience growth in its residential base but because of the limited availability
of large tracts of land, this growth will come at a reduced rate and will be with much smaller
developments than in the past.
The City of Shorewood operates under the Council-Administrator form of government.
Policy making and legislative authority are vested in a governing council consisting of the
mayor and four other members. The governing council is responsible, among other things,
for passing ordinances, adopting the budget, appointing committees, and hiring employees
and consulting staff. The City Administrator is responsible for carrying out the policies and
ordinances of the governing council, and for overseeing the day-to-day operations of the
government. The council is elected on a non-partisan basis. Council members serve four-
year staggered terms, with two council members elected every two years. The mayor is
elected to serve a two-year term. The City Council transitioned to a ward basis of election
for terms beginning in 2005, and proper staggering of terms will be regained in 2007.
The Economic Development Authority (EDA) of the City was created in 2001 pursuant to
Minnesota Statutes to carry out economic and industrial development and redevelopment
consistent with policies established by the Council. Its board is comprised of members of
the City Council. The EDA activities are blended and separate financial statements are not
issued for this component unit.
11
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, storm-water
management utility, and an off-sale liquor operation with two store locations during 2004.
LOCAL ECONOMY
The City of Shorewood displays very strong wealth indices with a per capita income of
$44,425 (191.5% of state average) and a median family income of$104,100 (183% of state
average). Full value per capita is very healthy at $159,076, and the City's fiscal 2004 full
valuation is nearly $1.2 billion.
The City maintains stable financial operations due to a history of conservative budgeting,
characterized by the maintenance of healthy reserves, as well as the lack of reliance on state
aid. The City had a General Fund operating surplus of $394,000 and ended FY 2004 with a
General Fund balance of $2.9 million.
The City's debt burden is expected to remain manageable given expected ongoing tax base
growth and limited capital needs. The City's overall debt burden is moderate at 2.6%, with
approximately half due to the direct borrowing ofthe city (direct debt 1.3%).
FINANCIAL AND MANAGEMENT EMPHASIS
Governance
The City Council, in its leadership role, has effectively established a focus for City
government in Shorewood. The Council has adopted a Statement of Purpose and has
established overall goals and expectations for the City. It has identified issues facing the
City and stated priorities 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: it includes
review of the previous year's work plan and the City's Comprehensive Plan. It also includes
identification of goals and priorities for the next twelve months.
The second phase is that of Programming and Capital Finance Planning: each year the five-
year Capital Improvement Program is reviewed and updated based upon priorities
established in the first phase. Any changes to the Comprehensive Plan are made based upon
the Phase One decisions.
The third phase is Budgeting: the operating budget is developed based on decisions made in
the first two phases. The budget format provides information and analytical data to the City
Council and other readers. It defines departmental missions and sets objectives for the
budget year.
111
Cooperative Public Service Delivery
Shorewood is committed to working cooperatively with other Lake Minnetonka area cities to
carefully consider methods to efficiently deliver public services. The City has various
contractual arrangements with other governmental jurisdictions and with private entities for
providing many of these services. The City is also involved in cooperative employee
training, disaster preparedness and other areas of mutual concern as an active participant in
the Lake Minnetonka area.
The City of Shorewood, along with the cities of Excelsior, Deephaven, Greenwood and
Tonka Bay, has been a member of the Excelsior Fire District since 2000. The Excelsior Fire
District is a joint powers organization and replaces the previous contractual arrangement
with the City of Excelsior Fire Department. A combined police and fire public safety
building that will serve the South Lake Minnetonka Area cities was completed in late 2003.
A fire station to serve the east side of the Excelsior Fire District was also completed in 2004.
The City has been a member city of the South Lake Minnetonka Police Department
(SLMPD) since its inception in 1973. The other members of this joint powers organization
are the cities of Excelsior, Greenwood, and Tonka Bay. The new police station was
completed at the end of2003.
LONG-TERM FINANCIAL PLANNING
Budgeting Controls
The annual budget serves as the foundation of the City of Shorewood's financial planning
and control. The City maintains budgetary controls to ensure compliance with legal
provisions embodied in the annual appropriated budget approved by the City Council. The
annual appropriated budget also includes the general fund activities. The legal level of
budgetary control is established at the department level, but management control is exercised
at the line item level. The City continues meeting its responsibility for sound financial
management, as demonstrated by the statements and schedules included in the financial
section of this report
The City Council continues its plan to accumulate resources for future capital equipment and
improvement projects; amounts were transferred to various capital project funds in 2004.
Budgeted transfers for capital improvement purposes during 2004 were $323,500.
Debt Administration
As of December 31, 2004, the City's debt outstanding totaled $14,535,000. Of this total,
$12,365,000 is lease revenue bonds issued in 2002 and 2003 by the EDA to finance the
construction of Public Safety (police and fire) buildings. General obligation revenue bonds
at year end are $2,170,000. The proceeds from these bonds financed water system
extensions and improvements and will be repaid from special assessments and Water fund
revenues. In addition, the City has a capital lease to finance its portion of construction of the
Southshore Senior Community Center.
IV
Cash Management
The City of Shorewood subscribes to the "pooled cash" concept of investing which means
that all funds with cash balances participate in an investment pool. This permits some funds
to be overdrawn and other funds to show positive cash balances, with the City overall
maintaining a positive cash balance. The pooled cash concept provides for investing of
greater amounts of money at more favorable rates and interest earnings are then allocated to
the participating funds.
Risk Management
The City of Shorewood's general property and liability coverage and its workers'
compensation insurance are provided through the League of Minnesota Cities Insurance
Trust (LMCIT). The LMCIT insurance program is a joint self-insurance plan designed to
lower and stabilize cities' insurance rates and to assure that cities have a source of coverage
available. The LMCIT reserves and rates are reviewed annually by an actuary to assure that
the program remains financially strong.
A wards and Acknowledgements
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 financial report (CAFR) for the fiscal year ended
December 31, 2003. This was the eleventh consecutive year that the government has
received this prestigious award. In order to be awarded a Certificate of Achievement, the
government published an easily readable and efficiently organized CAFR. This report
satisfied both GAAP (generally accepted accounting principles) and applicable legal
requirements. Only 259 municipalities (less than 1 %), out of 32,000 municipalities
nationwide with populations under 10,000, qualified to receive this award from GFOA.
A Certificate of Achievement is valid for a period of one year only. We believe our current
CAFR continues to meet the Certificate of Achievement Program's requirements and we are
submitting it to the GFOA to determine its eligibility for another certificate.
We would like to express our appreciation to all administrative staff, finance department
staff, and the City's independent auditor for their efficient and dedicated services in
preparation of the CAFR. Their assistance and cooperation are so important. Thank you
also, to Shorewood' s Mayor and entire City Council for their unfailing support for
maintaining the highest standards of professionalism in the management of the City of
Shorewood's finances.
Respectfully submitted,
Craig Dawson
City Administrator/Clerk
Bonnie Burton
Finance Director/Treasurer
v
ACCOUNT
CLERK
Personnel' HR
Accounting
Investments
Utility Billing
Accts. Payable
Accts. Receivable
Special Assessments
Insurance/Risk Management
CITY OF SHOREWOOD ORGANIZATION CHART
SHOREWOOD RESIDENTS
JOINT POWERS ORGANIZATIONS
POLICE - SLMPD
FIRE - EXCELSIOR FIRE DISTRICT
LMCC - Lake Mlnnelonka
Communications Commission
LMCD - Lake Mlnnelonka Conservation
District
ADMINISTRATION
EXEC. SECRETARY'
DEPUTY CLERK
RECEPTIONIST'
PARK SECRETARY
SECRETARY'
RECEPTIONIST
COMMUNICATIONS
TECHNICIAN
MIS
Budgeting
Purchasing
Payroll
Off-Sale Retail
General Government
Licensing
Elections
Records
Legal Publications
Public Information
Cable TV Franchise
PLANNING
ASSISTANTS
BUILDING
OFFICIAL
Planning
Zoning Administration
Property Records
Inspection
ASSESSOR -
RECYCLING -
ANIMAL CONTROL -
ANIMAL IMPOUND.
FIRE Islands -
CONTRACTED SERVICES
HENNEPIN COUNTY
EZ RECYCLING
CITY OF ORONO
PAWS, CLAWS & HOOVES
MOUND
-2-
ADVISORY BOARDS
PARK COMMISSION
PLANNING COMMISSION
LIGHT EQPT.'
UTILITY MAl NT.
OPERATORS
Building and Grounds Engineering Services
Tree Maintenance Project Mgmt
Park Maintenance Water Maintenance
Street Maintenance Sewer Maintenance
Equipment Maintenance SanltatlonlWeeds
Stormwater System Street Lighting
Park Planning 'Recreation Programs
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 31,2003
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 fmancial reporting.
~~~~
President
~/~
Executive Director
-3-
FINANCIAL SECTION
CITY OF SHOREWOOD
SHOREWOOD, MINNESOTA
YEAR ENDED
DECEMBER 31,2004
Certified Public Accountants & Consultants
11 Civic Center Plaza
Suite 300
P.O. Box 3166
Mankato, MN 56002-3166
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and Council
City of Shorewood, Minnesota
We have audited the accompanying fInancial statements of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the City of Shorewood, Minnesota (the City), as of and for the
year ended December 31, 2004, which collectively comprise the City's basic fmancial statements as listed in the table of
contents. These fmancial statements are the responsibility of the City's management. Our responsibility is to express
opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the fmancial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the fInancial statements. An audit also includes assessing the accounting principles used and signifIcant
estimates made by management, as well as evaluating the overall fmancial statement presentation. We believe that our audit
provides a reasonable basis for our opinions.
In our opinion, the fInancial statements referred to above present fairly, in all material respects, the respective fmancial
position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund
information of the City as of December 31, 2004, and the respective changes in fInancial position and cash flows, where
applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of
America.
As described in Note 8 the City has implemented a new fmancial reporting model, as required by the provisions of GASB
Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local
Governments, as of December 31, 2004.
The management's discussion and analysis on pages I through X is not a required part of the basic fmancial statements but is
supplementary information required by accounting principles generally accepted in the United States of America. We have
applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of
measurement and presentation of the required supplementary information. However, we did not audit the information and
express no opinion on it.
507.625.2727 . Fax 507.388.9139
www.aemcpas.com
Page Two
Our audit was conducted for the purpose offorming opinions on the financial statements that collectively comprise the City's
basic financial statements. The introductory section, combining and individual nonmajor fund fInancial statements, and
statistical tables are presented for purposes of additional analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements have been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole. The introductory section and statistical tables have not been subjected to the auditing
procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them.
O1b&l~~)Uf
April 14, 2005
Edina, Minnesota
ABDO, EICK & MEYERS, LLP
Certified Public Accountants
507.625.2727 . Fax 507.388.9139
www.aemcpas.com
CITY OF
SHOREWOOD
5755 COUNTRY CLUB ROAD. SHOREWOOD, MINNESOTA 55331-8927. (952) 474-3236
FAX (952) 474-0128 . www.ci.shorewood.mn.us . cityhall@ci.shorewood.mn.us
Management's Diseussion and Analysis
As management of the City of Shore wood, Minnesota, (the City), we offer readers of the City's financial statements this narrative
overview and analysis of the fmancia1 activities of the City for the fiscal year ended December 31, 2004. This is the first year of
implementation of GASB 34 for the City and some comparative data is not available.
Financial Highlights
. The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $32,733,972 (net assets). Of
this amount, $14,139,345 (unrestricted net assets) may be used to meet the City's ongoing obligations to citizens and
creditors.
. The City's total net assets decreased by $1,392,227. Much of this decrease is attributable to reduction in the EDA
project fund balance used for construction payments for the new public safety building and depreciation expense as
defmed in the Capitalization Policy adopted by the City Council.
. As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of
$6,699,436, an increase of$614,865 in comparison with the prior year. Approximately 97 percent of this total amount,
$6,508,026,is available for spending at the City's discretion, but has been designated for specific purposes.
. At the end of the current fiscal year, unreserved fund balance for the General fund was $2,941,223, or 67 percent of total
2005 budgeted expenditures. While these funds are not legally reserved, they are designated for future purposes.
. The City's total debt decreased by $229,616, or 2 percent during the current fiscal year. The key factor in this decrease
was the payment of principal on the bonds.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The City's basic
financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3)
notes to the financial statements. This report also contains other supplemental information in addition to the basic fmancia1
statements themselves.
o PRINTED ON FilcYCLED PAPER
Management Discussion and Analysis - Continued
April 14, 2005
The fInancial statements also include notes that explain some of the information in the fmancial statements and provide more
detailed data. The statements are followed by a section of combining and individual fund fmancial statements and schedules that
further explains and supports the information in the fmancial statements. Figure 1 shows how the required parts of this annual
report are arranged and relate to one another. In addition to these required elements, we have included a section with combining
and individual fund fInancial statements and schedules that provide details about nonmajor governmental funds, which are added
together and presented in single columns in the basic fInancial statements.
Figure 1
Required Components of the
City's Annual Financial Report
Management's
Discussion and
Analysis
Basic Financial
Statements
Required
Supplementary
Information
...................................
........................
....
...........................
.......................
............
....................................................................................
: I
Government-wide
Financial
Statements
Fund
Financial
Statements
Notes to the
Financial
Statements
Summary
(
)
Detail
-II-
Management Discussion and Analysis - Continued
April 14, 2005
Figure 2 summarizes the major features of the City's fmancial statements, including the portion of the City government they
cover and the types of information they contain. The remainder of this overview section of management's discussion and analysis
explains the structure and contents of each of the statements.
Figure 2
Major features of the Government-wide and Fund Financial Statements
Fund Financial Statements
Government-wide Governmental Funds Proprietary Funds
Statements
Scope Entire City government The activities of the City that Activities the City operates
(except fiduciary funds) and are not proprietary of similar to private businesses,
the City's component units fiduciary, such as police, fire such as the water and sewer
and parks system
Required financial . Statement of Net Assets . Balance Sheet . Statement of Net Assets
statements . Statement of Activities . Statement of Revenues, . Statement of Revenues,
Expenditures, and Expenses and Changes in
Changes in Fund Fund Net Assets
Balances . Statement of Cash Flows
Accounting Basis and Accrual accounting and Modified accrual accounting Accrual accounting and
measurement focus economic resources focus and current fmancial economic resources focus
resources focus
Type of asset/liability All assets and liabilities, both Only assets expected to be All assets and liabilities, both
information financial and capital, and used up and liabilities that fmancial and capital, and
short-term and long-term come due during the year or short-term and long-term
soon thereafter; no capital
assets included
Type ofin flow/out flow All revenues and expenses Revenues for which cash is All revenues and expenses
information during year, regardless of received during or soon after during the year, regardless of
when cash is received or paid the end of the year; when cash is received or paid
expenditures when goods or
services have been received
and payment is due during
the year or soon thereafter
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the City's finances, in a
manner similar to a private-sector business.
The statement of net assets presents information on all of the City's assets and liabilities, with the difference between the two
reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the fmancial
position of the City is improving or deteriorating.
The statement of activities presents information showing how the City's net assets changed during the most recent fiscal year. All
changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of
related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows
in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
Both of the government-wide fmancial statements distinguish functions of the City that are principally supported by taxes and
intergovernmental revenue (governmental activities) from other functions that are intended to recover all or a significant portion
of their costs through user fees and charges (business-type activities). The governmental activities of the City include general
government, public safety, public works, culture and recreation, and miscellaneous. The business-type activities of the City
include water, sewer, recycling, stormwater management utility and a municipal liquor operation.
-III-
Management Discussion and Analysis - Continued
April 14, 2005
The government-wide financial statements include not only the City itself (known as the primary government), but also a legally
separate Economic Development Authority for which the City is fInancially accountable. The Economic Development Authority,
although legally separate, functions for all practical purposes as a department of the City, and therefore has been included as an
integral part of the primary government.
The government-wide fInancial statements can be found on pages 6-8 of this report.
Fund Financial Statements
Afund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specifIc
activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate
compliance with fInance-related legal requirements. All of the funds of the City can be divided into three categories:
governmental funds, proprietary funds and fIduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government-wide fmancial statements. However, unlike the government-wide fmancial statements, governmental
fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable
resources available at the end of the fIscal year. Such information may be useful in evaluating a government's near-term
fInancing requirements.
Because the focus of governmental funds is narrower than that of the government-wide fmancial statements, it is useful to
compare the information presented for governmental funds with similar information presented for governmental activities in the
government-wide fInancial statements. By doing so, readers may better understand the long-term impact by the government's
near-term fmancing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues,
expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and
governmental activities.
The City maintains 13 individual governmental funds, 4 of which are Debt Service funds. Information is presented separately in
the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund
balances for the General fund, the Debt Service funds, MSA construction, and the EDA public safety facilities project all of
which are considered to be major funds. Data from the other 6 governmental funds are combined into a single, aggregated
presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining
statements or schedules elsewhere in this report.
The City adopts an annual appropriated budget for its General fund. A budgetary comparison statement has been provided for the
General fund to demonstrate compliance with this budget.
The basic governmental fund fmancial statements can be found on pages 9 - 15 of this report.
Proprietary funds. The City maintains proprietary funds. Enterprise funds are used to report the same functions presented as
business-type activities in the government-wide fmancial statements. The City uses enterprise funds to account for its water,
sewer, recycling, stormwater management utility, sewer, and liquor operation.
Proprietary funds provide the same type of information as the government-wide fInancial statements, only in more detail. The
proprietary fund fmancial statements provide separate information for each of the enterprise funds which are considered to be
major funds of the City.
The basic proprietary fund financial statements can be found on pages 16 - 23 of this report.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefIt of parties outside the City. Fiduciary
funds are not reflected in the government-wide fmancial statements because the resources of those funds are not available to
support the City's own programs. The accounting used for fIduciary funds is much like that used for proprietary funds.
The basic fIduciary fund fmancial statements can be found on page 24 of this report.
Notes to Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and
fund fmancial statements. The notes to the fmancial statements can be found on pages 25 - 44 of this report.
-N-
Management Discussion and Analysis - Continued
April 14, 2005
Other Information
The combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds are
presented following the notes to fInancial statements. Combining and individual fund statements and schedules can be found on
pages 45 - 96 of this report.
Government-wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City,
assets exceeded liabilities by $32,733,972 at the close of the most recent fIscal year.
By far, the largest portion of the City's net assets (64 percent) reflects its investment in capital assets (e.g., land, buildings,
machinery and equipment), less any related debt used to acquire those assets that is still outstanding. The City uses these capital
assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's
investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must
be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
Summary of Net Assets
Governmental
Activities
Assets
Cash and temporary investments
Receivables
Inventories
Prepaids
Deferred charges
Capital assets
$ 7,218,547
12,748,673
12,298,433
Total assets
32,265,653
Liabilities
Long-term liabilities outstanding
Other liabilities
12,111,322
1,317,989
Total liabilities
13,429,311
Net assets
Invested in capital assets, net of related debt
Unrestricted
12,167,269
6,669,073
Total net assets
$ 18,836,342
Business-type
Activities
Total*
$ 6,772,174 $ 13,990,721
712,162 13,460,835
242,156 242,156
8,982 8,982
23,546 23,546
8,597,358 20,895,791
16,356,378 48,622,031
1,990,000 14,101,322
468,748 1,786,737
2,458,748 15,888,059
6,427,358
7,470,272
18,594,627
14,139,345
$ 13,897,630
$ 32,733,972
* Since this is the fIrst year of GASB Statement No. 34 implementation, no prior year amounts are shown.
The remaining balance of unrestricted net assets ($14,139,345) may be used to meet the City's ongoing obligations to citizens
and creditors.
At the end of the current fiscal year, the City is able to report positive balances in total net assets, both for the City as a whole, as
well as for its separate governmental and business-type activities.
-v-
Management Discussion and Analysis - Continued
April 14, 2005
Governmental activities. Governmental activities decreased the City's net assets by $1,724,594. Key elements of this decrease
are attributable to reduction in the EDA project fund balance used for construction payments for the new public safety building
and depreciation expense as defined in the Capitalization Policy adopted by the City Council.
(1,729,594) 337,367 (1,392,227)
5,000 (5,000)
(1,724,594) 332,367 (1,392,227)
20,560,936 13,565,263 34,126,199
$ 18,836,342 $ 13,897,630 $ 32,733,972
Changes in Net Assets
Governmental
Activities
Revenues
Program revenues
Charges for services
Operating grants and contributions
Capital grants and contributions
General revenues
Property taxes/tax increments
State grants and contributions
not restricted to specific programs
Unrestricted investment earnings
Loss on sale of capital assets
Total revenues
$ 1,035,833
119,594
996,967
3,345,326
4,723
127,853
(5,500)
5,624,796
1,074,028
2,972,094
2,446,325
254,081
607,862
Expenses
General government
Public safety
Public works
Culture and recreation
Interest on long-term debt
Water
Sewer
Recycling
Stormwater Management Utility
Liquor
Total expenses
7,354,390
Increase (decrease) in net assets
before transfers
Transfers
Change in net assets
Net assets, January 1
Net assets, December 31
Business-type
Activities
$ 3,886,643
144,163
4,030,806
591,858
735,480
106,933
106,757
2,152,411
3,693,439
* Since this is the first year of GASB Statement No. 34 implementation, no prior year amounts are shown.
Total*
$ 4,922,476
119,594
996,967
3,345,326
4,723
272,016
(5,500)
9,655,602
1,074,028
2,972,094
2,446,325
254,081
607,862
591,858
735,480
106,933
106,757
2,152,411
11,047,829
· The following graph depicts various governmental activities and shows the revenue and expenses directly related to
those activities.
-VI-
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
Management Discussion and Analysis - Continued
April 14, 2005
Expenses and Program Revenue - Governmental Activities Graph
$-
General government
Public safety
Street and highways
Culture and recreation
Interest on long-term debt
II Expenses
II Revenues
- VII-
Management Discussion and Analysis - Continued
April 14, 2005
Revenue by Source - Governmental Activities Graph
Unrestricted investment
earnings
2.3%
Operating grants and
contributions
2.1%
Capital grants and
contributions
17.7%
State grants and
contributions unrestricted
0.1%
Property taxes
59.4%
For the most part, increases in expenses closely paralleled inflation and growth in the demand for services.
Business-type activities. Business-type activities increased the City's net assets by $332,367. Key elements of this increase are
as follows:
. Recent rate increases in the Water fund in anticipation of capital improvements authorized by the City Council and
scheduled for 2005. Revenues also increased as a result of a modest increase in demand.
. Liquor Operations sales increases resulting in gross profit increases from 2003. Sales increases resulted in the highest
sales in the last four years.
. The Recycling Fund receives a county recycling grant, which when combined with operating income realized increases
in cash.
-VIII -
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
Management Discussion and Analysis - Continued
April 14, 2005
Expenses and Program Revenues - Business-type Activities Graph
$-
Water
Sewer
Recycling
Stormwater Management
Utility
Liquor
I 11II Expenses
11II Revenues I
-IX-
Management Discussion and Analysis - Continued
April 14, 2005
Financial Analysis of the Government's Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with fmance-related legal requirements.
Governmentalfunds. The focus of the City's governmental funds is to provide information on near-term inflows, outflows and
balances of spendable resources. Such information is useful in assessing the City's fInancing requirements. In particular,
unreservedfund balance may serve as a useful measure ofa government's net resources available for spending at the end of the
fiscal year.
As of the end of the current fIscal year, the City's governmental funds reported combined ending fund balances of $6,699,436, a
decrease of$614,865 in comparison with the prior year. Approximately 97 percent of this total amount $6,508,026 constitutes
unreservedfund balance, which is available for spending at the City's discretion. The remainder of fund balance is reserved to
indicate that it is not available for new spending because it has already been committed to pay debt service in the amount of
$191,410.
The General fund is the chief operating fund of the City. At the end of the current year, the fund balance of the General fund was
$2,941,223. As a measure of the General fund's liquidity, it may be useful to compare both unreserved fund balance and total
fund balance to total fund expenditures. Unreserved fund balance represents 90 percent of fund expenditures, while total fund
balance is the same amount.
The fund balance of the City's General fund increased by $394,751 during the current fiscal year. The key factor in this increase
was:
. Greater than anticipated building permit activity and revenue ($118,000).
· Several departments with less than anticipated expenditures (Mayor and Council, General Government Professional
Services, and Public Works Streets and Highways.)
The Debt Service fund has a total fund balance of $191,410, all of which is reserved for the payment of debt service. The net
decrease in fund balance during the current year in the Debt Service fund was $13,940
Proprietary funds. The City's proprietary funds provide the same type of information found in the government-wide fmancial
statements, but in more detail. Unrestricted net assets of the enterprise funds at the end of the year amounted to $7,470,272. The
total growth in net assets for the funds was $332,367. Other factors concerning the fmances of this fund have already been
addressed in the discussion of the City's business-type activities.
General Fund Budgetary Highlights
The City's General fund budget was not amended during the year. The budget was a balanced budget. Revenues exceeded
expectations and expenditures were under budget.
-x-
Management Discussion and Analysis - Continued
Apri114,2005
Capital Asset and Debt Administration
Capital Assets. The City's investment in capital assets for its governmental and business type activities as of December 31,
2004, amounts to $20,895,791 (net of accumulated depreciation). This investment in capital assets includes land, structures,
improvements, machinery and equipment, park facilities, and roads. Major capital asset events during the current fiscal year
included the following:
· Completion of the new Public Safety (Police and Fire) Buildings.
Additional information on the City's capital assets can be found in Note 3C on pages 34 - 35 of this report.
Capital Assets Net of Depreciation
Governmental
Activities
Business-type
Activities
Total
Land
Buildings
Improvement other than building
Machinery and equipment
Infrastrucutre
$ 741,826 $ 404,392
1,209,333
312,100
333,136 181,134
9,702,038 8,011,832
$ 12,298,433 $ 8,597,358
$ 1,146,218
1,209,333
312,100
514,270
17,713,870
Total
$ 20,895,791
Long-term debt. At the end of the current fiscal year, the City had total bonded debt outstanding of$14,535,000. Of this
amount, $12,365,000 is lease revenue bonds and $2,170,000 is general obligation revenue bonds. While all of the City's bonds
have revenue streams, they are all backed by the full faith and credit of the City.
Outstanding Debt
Governmental Business-type
Activities Activities Total
General obligation revenue bonds $ $ 2,170,000 $ 2,170,000
Lease revenue 12,365,000 12,365,000
Capita11eases 131,164 131,164
Compensated absences 87,650 14,953 102,603
Total $ 12,583,814 $ 2,184,953 $ 14,768,767
The City's total debt decreased by $331,235 (2 percent) during the current fiscal year. This is primarily due to the scheduled
principal payments.
The City maintains a "Aa3" rating from Moody's for general obligation debt.
Minnesota statutes limit the amount of net general obligation debt a City may issue to 2 percent of the market value of taxable
property within the City. Net debt is debt payable solely from ad valorem taxes. The current debt limitation for the City is
$20,745,830, which is significantly in excess of the City's outstanding general obligation debt.
Additional information on the City's long-term debt can be found in Note 3F on pages 37 - 39 of this report.
-XI-
Management Discussion and Analysis - Continued
April 14, 2005
Economic Factors and Next Year's Budgets and Rates
. Property valuations within the City remain strong and growing, especially in the desirable lakeshore area.
· Inflationary and unemployment trends in the region compare favorably to national indices.
All of these factors were considered in preparing the City's budget for the 2005 fiscal year.
During the current fiscal year, unreserved fund balance in the General fund increased to $2,941,223. It is intended that this use of
available fund balance will be used for special one-time projects as determined by the City Council.
Rate increases have been approved the for Water utility to fund the debt service that will be required in 2005 to provide for
enhancements to the system. The rate increase is expected to provide for the repayment of the debt issue for the project.
Requests for Information
This financial report is designed to provide a general overview of the City's finances for all those with an interest in the City's
fmances. Questions concerning any of the information provided in this report or requests for additional fmancial information
should be addressed to Bonnie Burton, Finance Director/Treasurer, City of Shore wood, 5755 Country Club Road, Shorewood,
Minnesota 55331.
-XII-
GOVERNMENT-WIDE
FINANCIAL STATEMENTS
CITY OF SHOREWOOD
SHOREWOOD, MINNESOTA
YEAR ENDED
DECEMBER 31, 2004
ASSETS
Cash and temporary investments
Receivables
Accrued interest
Delinquent taxes
Accounts
Special assessments
Lease
Inventories
Prepaids
Deferred charges
Capital assets
Land
Depreciable capital assets, net
TOTAL ASSETS
LIABILITIES
Accounts and contracts payable
Accrued salaries payable
Due to other governments
Accrued interest payable
Unearned revenue
Long-term liabilities
Due within one year
Due in more than one year
TOTAL LIABILITIES
CITY OF SHOREWOOD, MINNESOTA
STATEMENT OF NET ASSETS
DECEMBER 31,2004
Governmental
Activities
$ 7,218,547
280,555
63,095
15,025
24,998
12,365,000
741,826
11,556,607
32,265,653
578,164
11,962
4,614
250,757
472,492
12,111,322
13,429,311
NET ASSETS
Invested in capital assets, net of related debt
Umestricted
TOTAL NET ASSETS
12,167,269
6,669,073
$ 18,836,342
The notes to the fmancial statements are an integral part of this statement.
-6-
178,763 756,927
3,966 15,928
24,731 29,345
37,116 287,873
29,219 29,219
194,953 667,445
1,990,000 14,101,322
2,458,748 15,888,059
Business-type
Activities
$ 6,772,174
36,369
349,112
326,681
242,156
8,982
23,546
404,392
8,192,966
16,356,378
6,427,358
7,470,272
$13,897,630
Exhibit 1
Total
$ 13,990,721
316,924
63,095
364,137
351,679
12,365,000
242,156
8,982
23,546
1,146,218
19,749,573
48,622,031
18,594,627
14,139,345
$ 32,733,972
CITY OF SHOREWOOD, MINNESOTA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31,2004
Program Revenue
Operating Capital Grants
Charges for Grants and and
FunctionslPrograms Expenses Services Contributions Contributions
Governmental activities
General government $ 1,074,028 $ 51,069 $ 1,000 $
Public safety 2,972,094 983,684 14,722
Public works 2,446,325 68,342 942,967
Culture and recreation 254,081 1,080 35,530 54,000
Interest on long-term debt 607,862
Total governmental activities 7,354,390 1,035,833 119,594 996,967
Business-type activities:
Water 591,858 620,189
Sewer 735,480 866,350
Recycling 106,933 114,987
Stormwater Management Utility 106,757 85,978
Liquor 2,152,411 2,199,139
Total business-type activities 3,693,439 3,886,643
Total $ 11,047,829 $ 4,922,476 $ 119,594 $ 996,967
General revenues:
Taxes:
Property taxes, levied for general purposes
State grants and contributions not restricted to specific programs
Unrestricted investment earnings
Loss on sale of capital assets
Transfers
Total general revenues and transfers
Change in net assets
Net assets, January 1
Net assets, December 31
The notes to the fmancial statements are an integral part of this statement.
-7-
Exhibit 2
Net (Expense) Revenue and Changes in Net Assets
Governmental Business-type
Activities Activities Total
$ (1,021,959) $ $ (1,021,959)
(1,973,688) (1,973,688)
(1,435,016) (1,435,016)
(163,471) (163,471)
(607,862) (607,862)
(5,201,996) (5,201,996)
28,331 28,331
130,870 130,870
8,054 8,054
(20,779) (20,779)
46,728 46,728
193,204 193,204
(5,201,996) 193,204 (5,008,792)
3,345,326 3,345,326
4,723 4,723
127,853 144,163 272,016
(5,500) (5,500)
5,000 (5,000)
3,477,402 139,163 3,616,565
(1,724,594) 332,367 (1,392,227)
20,560,936 13,565,263 34,126,199
$ 18,836,342 $ 13,897,630 $ 32,733,972
-8-
FUND
FINANCIAL STATEMENTS
CITY OF SHOREWOOD
SHOREWOOD, MINNESOTA
YEAR ENDED
DECEMBER 31,2004
CITY OF SHOREWOOD , MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31,2004
Debt MSA
General Service Construction
ASSETS
Cash and temporary investments $ 2,945,328 $ 190,844 $ 883,578
Receivables
Accrued interest 16,504 566 2,168
Delinquent taxes 63,095
Accounts 15,025
Special assessments 15,253 9,745
Lease 12,365,000
TOTAL ASSETS $ 3,055,205 $ 12,566,155 $ 885,746
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts and contracts payable $ 46,464 $ $ 231,197
Due to other governments 4,614
Salaries and compensated absences payable 11 ,962
Deferred revenue 50,942 12,374,745
TOTAL LIABILITIES 113,982 12,374,745 231,197
FUND BALANCES
Fund balances
Reserved for debt service 191,410
Umeserved
Designated, reported in
General fund 2,941,223
Capital projects funds 654,549
TOTAL FUND BALANCES 2,941,223 191,410 654,549
TOTAL LIABILITIES AND FUND BALANCES $ 3,055,205 $ 12,566,155 $ 885,746
The notes to the fmancia1 statements are an integral part of this statement.
-9-
Exhibit 3
EDA
Public
Safety Other Total
Facilities Governmental Governmental
Project Funds Funds
$ 517,809 $ 2,680,988 $ 7,218,547
13,960 33,198
63,095
15,025
24,998
12,365,000
$ 517,809 $ 2,694,948 $ 19,719,863
$ 289,219 $ 11,284 $ 578,164
4,614
11 ,962
12,425,687
289,219 11,284 13,020,427
191,410
2,941,223
228,590 2,683,664 3,566,803
228,590 2,683,664 6,699,436
$ 517,809 $ 2,694,948 $ 19,719,863
-10-
CITY OF SHOREWOOD
RECONCILIATION OF THE BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
GOVERNMENTAL FUNDS
AS OF DECEMBER 31,2004
Exhibit 4
Total fund balances - governmental
$ 6,699,436
Amounts reported for the governmental activities in the statement
of net assets are different because:
Capital assets used in governmental activities are not ftnancial
resources and therefore are not reported as assets in governmental funds.
Cost of capital assets
Less: accumulated depreciation
29,963,210
(17,664,777)
Long-term liabilities, including bonds payable, are not due and payable in the
current period and therefore are not reported as liabilities in the funds.
Long-term liabilities at year-end consist of:
Bonds payable
Compensated absences
(12,496,164)
(87,650)
Some receivables are not available soon enough to pay for the current period's expenditures,
and therefore are deferred in the funds.
Interest
Taxes
Special assessments
Leases
247,357
35,689
24,998
12,365,000
Governmental funds do not report a liability for accrued interest until
due and payable.
(250,757)
Total net asset - governmental activities
$ 18,836,342
The notes to the fmancial statements are an integral part of this statement.
-11-
Debt MSA
General Service Construction
REVENUES
Taxes $ 3,344,442 $ $
Licenses and permits 310,055
Intergovernmental 73,065 941,345
Charges for services 44,169
Fines and forfeitures 81,841
Special assessments 10,737
Interest on investments 58,564 2,649 10,391
Miscellaneous 45,112 620,596
TOTAL REVENUE 3,957,248 633,982 951,736
EXPENDITURES
Current
General government 1,037,043
Public safety 1,028,689
Public works 477,596
Culture and recreation 168,278
Capital outlay
General government 5,878
Public safety 512,232
Public works 3,152 714,252
Culture and recreation (1,415)
Debt service
Principal 28,069 20,000
Interest and service charges 9,475 627,922
TOTAL EXPENDITURES 3,268,997 647,922 714,252
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 688,251 (13,940) 237,484
OTHER FINANCING SOURCES (USES)
Transfers in 30,000
Transfers out (323,500)
TOTAL OTHER FINANCING SOURCES (USES) (293,500)
NET CHANGE IN FUND BALANCES 394,751 (13,940) 237,484
FUND BALANCES, JANUARY 1 2,546,472 205,350 417,065
FUND BALANCES, DECEMBER 31 $ 2,941,223 $ 191,410 $ 654,549
The notes to the fmancia1 statements are an integral part of this statement.
-12-
CITY OF SHOREWOOD, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2004
Exhibit 5
EDA
Public
Safety Other Total
Facilities Governmental Governmental
Project Funds Funds
$ $ $ 3,344,442
310,055
1,014,410
44,169
81,841
10,737
7,620 48,629 127,853
14,722 59,600 740,030
22,342 108,229 5,673,537
1,037,043
1,028,689
477,596
168,278
10,214 16,092
1,430,490 1,942,722
209,042 926,446
12,485 11,070
48,069
637,397
1,430,490 231,741 6,293,402
(1,408,148) (123,512) (619,865)
298,500 328,500
(323,500)
298,500 5,000
(1,408,148) 174,988 (614,865)
1,636,738 2,508,676 7,314,301
228,590 $ 2,683,664 $ 6,699,436
-13-
CITY OF SHOREWOOD
RECONCILIATION OF THE STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
TO THE STATEMENT OF ACTIVITIES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31,2004
Total net change in fund balances - governmental funds
Amounts reported for governmental activities in the statement
of activities are different because:
Capital outlays are reported in governmental funds as expenditures. However, in the statement of
activities, the cost of those assets is allocated over the estimated useful lives as depreciation
expense.
Capital outlays
Depreciation expense
The issuance oflong-term debt provides current fmancial resources to governmental funds, while
the repayment of principal oflong-term debt consumes the current fmancial resources of governmental
funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report
the effect of issuance costs, premiums, discounts and similar items when debt is fIrst issued,
whereas these arnounts are deferred and amortized in the statement of activities.
Principal repayments
Interest on long-term debt in the statement of activities differs from the amount reported in the
governmental fund because interest is recognized as an expenditure in the funds when it is due,
and thus requires the use of current fmancial resources. In the statement of activities, however
interest expense is recognized as the interest accrues, regardless of when it is due.
Certain revenues are recognized as soon as it is earned. Under the modifIed accrual
basis of accounting certain revenues cannot be recognized until they are available
to liquidate liabilities of the current period.
Property taxes
Special assessments
Leases
Some expenses reported in the statement of activities do not require the use of current
fInancial resources and, therefore, are not reported as expenditures in governmental funds.
Loss on sale of capital asset
Compensated absences
Change in net assets - governmental activities
The notes to the fmancial statements are an integral part of this statement.
-14-
Exhibit 6
$ (614,865)
180,017
(1,310,594)
48,069
29,535
884
(9,115)
(35,010)
(5,500)
(8,015)
$ (1,724,594)
CITY OF SHOREWOOD, MINNESOTA Exhibit 7
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED DECEMBER 31,2004
Variance with
Budgeted Amounts Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 3,420,229 $ 3,420,229 $ 3,344,442 $ (75,787)
Licenses and permits 191,967 191,967 310,055 118,088
Intergovernmental 59,751 59,751 73,065 13,314
Charges for services 35,000 35,000 44,169 9,169
Fines and forfeitures 60,000 60,000 81,841 21,841
Interest on investments 94,800 94,800 58,564 (36,236)
Miscellaneous 30,200 30,200 45,112 14,912
TOTAL REVENUES 3,891,947 3,891,947 3,957,248 65,301
EXPENDITURES
Current
General government 1,198,672 1,198,672 1,037,043 161,629
Public safety 1,035,795 1,035,795 1,028,689 7,106
Public works 573,712 573,712 477,596 96,116
Culture and recreation 205,661 205,661 168,278 37,383
Capital outlay 547,063 547,063 519,847 27,216
Debt service 37,544 37,544 37,544
TOTAL EXPENDITURES 3,598,447 3,598,447 3,268,997 329,450
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 293,500 293,500 688,251 394,751
OTHER FINANCING SOURCES (USES)
Transfers in 30,000 30,000 30,000
Transfers out (323,500) (323,500) (323,500)
TOTAL OTHER FINANCING
SOURCES (USES) (293,500) (293,500) (293,500)
NET CHANGES IN FUND BALANCES 394,751 394,751
FUND BALANCES, JANUARY 1 2,546,472 2,546,472 2,546,472
FUND BALANCES, DECEMBER 31 $ 2,546,472 $ 2,546,472 $ 2,941,223 $ 394,751
The notes to the fInancial statements are an integral part of this statement.
-15-
CITY OF SHOREWOOD, MINNESOTA
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
DECEMBER 31, 2004
Business-type Activities -
Enterprise Funds
Water Sewer Recycling
ASSETS
CURRENT ASSETS
Cash and temporary investments $ 2,466,910 $ 3,548,050 $ 51,760
Receivables
Accrued interest 12,710 18,871 237
Accounts 96,061 210,388 16,485
Special assessments 1,354 3,209 290
Due from other funds 120,000
Inventories, at cost
Prepaid items 4,709 406
TOTAL CURRENT ASSETS 2,581,744 3,900,924 68,772
NONCURRENT ASSETS
Special assessments receivable 302,437 15,656 2,293
Unamortized bond discount 23,546
Capital assets
Land
Machinery and equipment 59,802 70,690
Infrastructure 7,050,734 7,896,525
Less accumulated depreciation (2,100,107) (5,717,348)
TOTAL CAPITAL ASSETS
(Net of accumulated depreciation) 5,010,429 2,249,867
TOTAL NONCURRENT ASSETS 5,336,412 2,265,523 2,293
TOTAL ASSETS 7,918,156 6,166,447 71,065
LIABILITIES
CURRENT LIABILITIES
Accounts and contracts payable 21,144 29,095
Due to other funds
Due to other governments 1,609 4,010
Accrued interest payable 540 425
Salaries and compensated absences payable 37,116
Deferred revenue 29,219
Current portion oflong-term debt 180,000
TOTAL CURRENT LIABILITIES 269,628 33,530
NONCURRENT LIABILITIES
Bonds payable less current portion above 1,990,000
TOTAL LIABILITIES 2,259,628 33,530
NET ASSETS
Invested in capital assets, net of related debt 2,840,429 2,249,867
Unrestricted 2,818,099 3,883,050 71,065
TOTAL NET ASSETS $ 5,658,528 $ 6,132,917 $ 71,065
The notes to the financial statements are an integral part of this statement.
-16-
Exhibit 8
Business-type Activities -
Enterprise Funds - Continued
Stormwater Total
Management Proprietary
Utility Liquor Funds
$ 292,084 $ 413,370 $ 6,772,174
1,841 2,710 36,369
18,733 7,445 349,112
203 5,056
120,000
242,156 242,156
3,867 8,982
312,861 669,548 7,533,849
1,239 321,625
23,546
404,392 404,392
130,492
793,313 316,182 16,056,754
(61,379) (115,446) (7,994,280)
1,136,326 200,736 8,597,358
1,137,565 200,736 8,942,529
1,450,426 870,284 16,476,378
21,425 107,099 178,763
120,000 120,000
19,112 24,731
965
17,954 55,070
29,219
180,000
141,425 144,165 588,748
1,990,000
141,425 144,165 2,578,748
1,136,326 200,736 6,427,358
172,675 525,383 7,470,272
$ 1,309,001 $ 726,119 $ 13,897,630
-17-
CITY OF SHOREWOOD, MINNESOTA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2004
Business-type Activites -
Enterprise Funds
Water Sewer Recycling
OPERATING REVENUES
Sales $ $ $
Less cost of sales
GROSS PROFIT
Charges for services 494,024 815,920 93,403
Permits and connection fees 45,985 50,430
GROSS PROFIT AND REVENUES 540,009 866,350 93,403
OPERATING EXPENSES
Personal services 75,789 63,543
Supplies 10,576 2,968
Repairs and maintenance 60,965 19,349
Depreciation 184,468 203,394
Professional services 46,868 3,133
Contracted services 28,723 3,891 106,742
Communication
Insurance 5,909 2,018
Water purchases 13,903
Utilities 60,436 7,884
Disposal charges 398,778
Rent
Advertising
Other 11,344 30,522 191
TOTAL OPERATING EXPENSES 498,981 735,480 106,933
OPERATING INCOME (LOSS) 41,028 130,870 (13,530)
NONOPERATING REVENUES (EXPENSES)
Special assessments 25,374
Interest on investments 56,098 70,952 858
Antenna lease
Other income (expense) 54,806 21,584
Interest expense (92,877)
TOTAL NONOPERATING REVENUES (EXPENSES) 43,401 70,952 22,442
INCOME (LOSS) BEFORE TRANSFERS 84,429 201,822 8,912
TRANSFERS
Transfers in
Transfers out
TOTAL TRANSFERS
CHANGE IN FUND NET ASSETS 84,429 201,822 8,912
FUND NET ASSETS, JANUARY 1 5,574,099 5,931,095 62,153
FUND NET ASSETS, DECEMBER 31 $ 5,658,528 $ 6,132,917 $ 71,065
The notes to the financial statements are an integral part of this statement.
-18-
Exhibit 9
Business-type Activites -
Enterprise Funds - Continued
Stormwater Total
Management Propertiary
Utility Liquor Funds
$ $ 2,195,597 $ 2,195,597
(1,608,759) (1,608,759)
586,838 586,838
63,826 1,467,173
96,415
63,826 586,838 2,150,426
9,244 259,236 407,812
2,021 10,013 25,578
80,314
19,832 39,057 446,751
22,020 7,466 79,487
45,122 1,736 186,214
1,121 1,121
14,454 22,381
13,903
20,430 88,750
398,778
134,213 134,213
12,152 12,152
39,330 81,387
99,360 538,087 1,978,841
(35,534) 48,751 171,585
25,374
5,691 10,564 144,163
21,879 21,879
273 (2,023) 74,640
(7,397) (100,274)
20,446 8,541 165,782
(15,088) 57,292 337,367
25,000 25,000
(30,000) (30,000)
9,912 27,292 332,367
1,299,089 698,827 13,565,263
$ 1,309,001 $ 726,119 $ 13,897,630
-19-
CITY OF SHOREWOOD, MINNESOTA
STATEMENT OF CASH FLOWS
PROPRlETARY FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2004
Business-type Activities -
Enterprise Funds
Water Sewer Recycling
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers and users $ 527,506 $ 864,660 $ 92,504
Other receipts and payments, net 42,469 21,584
Payments to suppliers, contractors and other governments (235,159) (456,299) (106,944)
Payments to employees (75,795) (63,399)
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES 259,021 344,962 7,144
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
(Increase) decrease in due from other funds 30,000
Operating transfers in
Interest paid on interfund loan
Increase (decrease) in due to other funds
Operating transfers out
NET CASH PROVIDED (USED)
BY NONCAPITAL FINANCING ACTIVITIES 30,000
CASH FLOWS FROM CAPITAL
AND RELATED FINANCING ACTIVITIES
Principal paid on revenue bonds (190,000)
Interest paid on revenue bonds (93,285)
Special assessments collected 73,051
NET CASH PROVIDED (USED) BY CAPITAL
AND RELATED FINANCING ACTIVITIES (210,234)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on investments 51,798 68,508 853
NET INCREASE IN CASH AND CASH EQUIVALENTS 100,585 443,470 7,997
CASH AND CASH EQUIVALENTS, JANUARY 1 2,366,325 3,104,580 43,763
CASH AND CASH EQUIVALENTS, DECEMBER 31 $ 2,466,910 $ 3,548,050 $ 51,760
The notes to the fmancia1 statements are an integral part of this statement.
-20-
Exhibit 10
Business-type Activities -
Enterprise Funds - Continued
Stormwater
Management
Utility Liquor Total
$ 60,899 $ 2,218,152 $ 3,763,721
22,152 (2,023) 84,182
(49,860) (1,830,200) (2,678,462)
(9,244) (258,087) (406,525)
23,947 127,842 762,916
30,000
25,000 25,000
(7,397) (7,397)
(30,000) (30,000)
(30,000) (30,000)
(12,397) (30,000) (12,397)
(190,000)
(93,285)
73,051
(210,234)
5,517 10,358 137,034
17,067 108,200 677,319
275,017 305,170 6,094,855
$ 292,084 $ 413,370 $ 6,772,174
-21-
CITY OF SHOREWOOD, MINNESOTA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2004
Business-type Activities -
Enterprise Funds
Water Sewer Recycling
RECONCILICATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating income (loss) $ 41,028 $ 130,870 $ (13,530)
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities
Other income (loss) related to operations 42,469 21,584
Depreciation 184,468 203,394
(Increase) decrease in assets:
Accounts receivable (12,503) 4,775 718
Special assessments receivable (6,465) (1,617)
Inventories
Prepaid items (461 ) 312
Increase (decrease) in liabilities:
Accounts payable 4,000 15,496 (11)
Due to other governments 26 (3,564)
Salaries and compensated absences payable (6) 144
NET CASH PROVIDED
BY OPERATING ACTIVITIES $ 259,021 $ 344,962 $ 7,144
NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES
Amortization of bond discount $ 3,301 $ $
The notes to the fmancial statements are an integral part of this statement.
-22-
Exhibit 10
Business-type Activities -
Enterprise Funds - Continued
Stormwater
Management
Utility Liquor Total
$ (35,534) $ 48,751 $ 171,585
22,152 (2,023) 84,182
19,832 39,057 446,751
(2,247) 22,555 13,298
(680) (8,762)
6,393 6,393
3,480 3,331
20,424 10,232 50,141
(1,752) (5,290)
1,149 1,287
$ 23,947 $ 127,842 $ 762,916
$ $ $ 3,301
-23-
ASSETS
Cash and temporary investments
LIABILITIES
Escrow deposits payable
CITY OF SHOREWOOD, MINNESOTA
STATEMENT OF NET ASSETS
FIDUCIARY FUNDS
DECEMBER 31, 2004
Exhibit 11
Agency
$ 120,665
$ 120,665
The notes to the fInancial statements are an integral part of this statement.
-24-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31,2004
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The City of Shore wood, Minnesota (the City), operates under the "Optional Plan A" form of government as
defmed in the State of Minnesota statutes. Under this plan, the government of the City is directed by a Council
composed of an elected Mayor and four elected Council members. The Council exercises legislative authority
and determines all matters of policy. The Council appoints personnel responsible for the proper administration
of all affairs relating to the City. The City has considered all potential units for which it is financially
accountable, and other organizations for which the nature and significance of their relationship with the City are
such that exclusion would cause the City's financial statements to be misleading or incomplete. The
Governmental Accounting Standards Board (GASB) has set forth criteria to be considered in determining
financial accountability. These criteria include appointing a voting maj ority of an organization's governing
body, and (1) the ability of the primary government to impose its will on that organization or (2) the potential
for the organization to provide specific benefits to, or impose specific fmancial burdens on the primary
government. Blended component units, although legally separate entities are, in substance, part of the City's
operations and so data from these units are combined with data of the primary government. The City has the
following component unit
Blended Component Unit
The Economic Development Authority (EDA) of the City was created pursuant to Minnesota statutes 469.090
through 469.108 to carry out economic and industrial development and redevelopment consistent with policies
established by the Council. It is comprised of the members of the City Council and has a December 31 year
end. The EDA activities are blended and reported in the debt service and capital projects funds. Separate
financial statements are not issued for this component unit.
B. Government-wide and Fund Financial Statements
The government-wide fmancial statements (i.e., the statement of net assets and the statement of changes in net
assets) report information on all of the nonfiduciary activities of the city and its component units. For the most
part, the effect of interfund activity has been removed from these statements. Governmental activities, which
normally are supported by taxes and intergovernmental revenues, are reported separately from business-type
activities, which rely to a significant extent on fees and charges for support
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment
are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function
or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly
benefit from goods, services, or privileges provided by a given function or segment and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of a particular function or
segment. Taxes and other items not properly included among program revenues are reported instead as general
revenues.
Separate fmancial statements are provided for governmental funds and proprietary funds. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund fmancial
statements.
-25-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31,2004
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide fmancial statements are reported using the economic resources measurementfocus and
the accrual basis of accounting, as are the proprietary fund fmancial statements. Revenues are recorded when
earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.
Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are
recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus
and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable
and available. Revenues are considered to be available when they are collectible within the current period or
soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers
revenues to be available if they are collected within 60 days of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt
service expenditures, as well as expenditures related to compensated absences and claims and judgments, are
recorded only when payment is due.
Property taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible
to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special
assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue
of the current period. All other revenue items are considered to be measurable and available only when cash is
received by the City.
Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is
recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded
in the year in which the resources are measurable and become available.
Non-exchange transactions, in which the City receives value without directly giving equal value in return,
include property taxes, grants, entitlement and donations. On an accrual basis, revenue from property taxes is
recognized in the year for which the tax is levied. Revenue from grants, entitlements and donations is
recognized in the year in which all eligibility requirements have been satisfied. Eligibility requirements include
timing requirements, which specify the year when the resources are required to be used or the year when use is
flISt permitted, matching requirements, in which the City must provide local resources to be used for a specified
purpose, and expenditure requirements, in which the resources are provided to the City on a reimbursement
basis. On a modified accrual basis, revenue from non-exchange transactions must also be available before it
can be recognized.
Deferred revenue arises when assets are recognized before revenue recognition criteria have been satisfied.
Grants and entitlements received before eligibility requirements are met are also recorded as deferred revenue.
On the modified accrual basis, receivables that will not be collected within the available period have also been
reported as deferred revenue in the fund fmancial statements.
The preparation of fmancial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could differ from those estimates.
-26-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCLAL STATEMENTS
DECEMBER 31,2004
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The City reports the following major governmental funds:
The General fund is the City's primary operating fund. It accounts for all fmancial resources of the
general government, except those required to be accounted for in another fund.
The Debt Service fund accounts for the resources accumulated and payments made for principal and
interest on long-term general obligation debt of governmental funds.
The MSA Construction fund accounts for the accumulation of Municipal State Aid (MSA) to fund the
periodic reconstruction ofMSA designated roads.
The EDA Public Safety Facility Project fund was established for the purpose of accounting for
construction of the new public safety facility.
The City reports the following major proprietary funds:
The Water fund accounts for the activities of the City's water distribution system.
The Sewer fund accounts for the activities of the City's sewage collection system
The Recycling Fund accounts for the activities of the City recycling program.
The Stormwater Management Utility fund accounts for the activities of the city stormwater management
system
The Liquor fund is used to account for the activities of the City's off-sale liquor operation. The operation
consists of two off-sale liquor store sites. A portion of the net income generated by the operation, if any,
is used to fund general fund activities.
Additionally, the City reports the following fund types:
The Fiduciary funds account for assets held by the government in a trustee capacity or as an agent on
behalf of others.
The agency fund is custodial in nature and does not present results of operations or have a measurement
focus. Agency funds are accounted for using the modified accrual basis of accounting. This fund is used
to account for assets that the government holds for others in an agency capacity.
Private-sector standards of accounting and fmancial reporting issued prior to December 1, 1989, generally are
followed in both the government-wide and proprietary fund fmancial statements to the extent that those
standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board.
Governments also have the option of following subsequent private-sector guidance for their business-type
activities and enterprise funds, subject to this same limitation. The government has elected not to follow
subsequent private-sector guidance.
As a general rule the effect ofinterfund activity has been eliminated from government-wide fmancial
statements. Exceptions to this general rule are payments-in-lieu of taxes and other charges between the City's
water and sewer function and various other functions of the government. Elimination of these charges would
distort the direct costs and program revenues reported for the various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or
privileges provided, 2) operating grants and contribution, and 3) capital grants and contributions, including
special assessments. Internally dedicated resources are reported as general revenues rather than as program
revenues. Likewise, general revenues include all taxes.
-27-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues
and expenses generally result from providing services and producing and delivering goods in connection with a
proprietary fund's principal ongoing operations. The principal operating revenues of the water, sewer, and
liquor enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds
include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues
and expenses not meeting this defInition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted
resources fIrst, then unrestricted resources as they are needed.
D. Assets, Liabilities, and Net Assets or 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.
Cash balances from all funds are pooled and invested, to the extent available, in certifIcates of deposit and other
authorized investments. Earnings from such investments are allocated on the basis of applicable participation
by each of the funds.
Minnesota 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.
Investments for the City are reported at fair value. Earnings on investments are allocated to the individual funds
based upon the average cash and investment balances. The Minnesota Municipal Money Market Fund (4M)
investment pool operates in accordance with appropriate state laws and regulations. The reported value of the
pool is the same as the fair value of the pool share.
Property Taxes
The Council annually adopts a tax levy in December and certifIes it to the County for collection in the following
year. 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 1 and are payable by the property owners in two
installments. The taxes are collected by the County Auditor and tax settlements are made to the City during
January, July, and December each year.
Taxes payable on homestead property, as defIned by Minnesota statutes, were partially reduced by a market
value credit aid. The credit is paid to the City by the State of Minnesota in lieu of taxes levied against the
homestead property. However, in 2004 the City received an aid reduction which eliminated their market value
credit aid and local government aid.
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 in the fund [mancial
statements.
Accounts Receivable
Accounts receivable include amounts billed for services provided before year end. Unbilled utility enterprise
fund receivables are also included for services provided in 2004. The City annually certifies delinquent water
and sewer accounts to the county for collection in the following year. Therefore, there has been no allowance
for doubtful accounts established.
-28-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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 in the governmental funds. Enterprise fund special
assessments are recorded as contributed capital in the year of certification.
Interfund Receivables and Payables
Transactions between funds that are representative oflendinglborrowing arrangements outstanding at the end of
the fiscal year are referred to as either "interfund receivables/payables" (i.e., the current portion of inter fund
loans) or "advances to/from other funds" (i.e., the non-current portion of inter fund loans). All other outstanding
balances between funds are reported as "due to/from other funds." Any residual balances outstanding between
the governmental activities and business-type activities area reported in the government-wide fmancial
statements as "internal balances."
Advances between funds, as reported in the fund fmancial statements, 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.
Inventories and Prepaid Items
The inventories are stated at average cost, which approximates market using the first-in, fIrst-out (FIFO)
method.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid
items in both government-wide and fund financial statements.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges,
sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in
the government-wide financial statements. Capital assets are defmed by the City as assets with an initial,
individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year.
Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated
capital assets are recorded at estimated fair market value at the date of donation. For financial statement
purposes only, a capitalization threshold is established for each capital asset category as follows:
Assets
Threshold
Land and land improvements
Other improvements
Buildings
Building improvements
Machinery and equipment
Vehicles
Infrastructure
Other assets
$
10,000
25,000
25,000
25,000
5,000
5,000
100,000
5,000
-29-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31,2004
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the
asset's life are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred
during the construction phase of capital assets of business-type activities is included as part of the capitalized
value of the assets constructed.
Property, plant, and equipment of the primary government, as well as the component units, are depreciated
using the straight line method over the following estimated useful lives:
Assets
Useful Lives
in Years
Land improvements
Buildings and improvements
System improvements/infrastructure
Machinery and equipment
Vehicles
15 - 20
7 -40
20 - 50
5-15
5 - 15
Compensated Absences
It is the City's policy to permit employees to accumulate a portion of earned but unused vacation and sick pay
benefits Accumulated vacation and sick pay are accrued when incurred in the government-wide, proprietary,
and fiduciary fund fmancial statements. A liability for these amounts is reported in governmental funds only if
they have matured, for example, as a result of employee resignations and retirements.
Long-term Obligations
In the government-wide financial statements, and proprietary fund types in the fund fmancial statements, long-
term debt and other long-term obligations are reported as liabilities in the applicable governmental activities,
business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well
as issuance costs, are deferred and amortized over the life of the bonds.
In the fund financial statements, governmental fund types recognized bond premiums and discounts, as well as
bond issuance costs, during the current period. The face amount of debt issued is reported as other fmancing
sources. Premiums received on debt issuances are reported as other fmancing sources while discounts on debt
issuances are reported as other fmancing uses. Issuance costs, whether or not withheld from the actual debt
proceeds received, are reported as debt service expenditures.
Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance for amounts that are
not available for appropriation or are legally restricted by outside parties for use for a specific purpose.
Designations of fund balance represent tentative management plans that are subject to change.
Comparative Data/Reclassifications
Comparative total data for the prior year have not been presented for the governmental-wide and all fund
financial statements as this is the first year of implementation ofGASB Statement No. 34.
-30-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31,2004
Note 2: STEW ARDSIDP, COMPLIANCE, AND ACCOUNTABILITY
Budgetary Information
Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States
of America for the general fund. All annual appropriations lapse at fiscal year end. The City does not use
encumbrance accounting.
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 15th, the proposed budget is presented to the Council for review.
The Council holds public hearings and a [mal budget is prepared and adopted in early December.
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 Council. The legal level of budgetary control is the
department level. Budgeted amounts are as originally adopted.
Note 3: DETAILED NOTES ON ALL FUNDS
A. Deposits and Investments
Deposits
In accordance with Minnesota statutes and as authorized by the 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 equa111 0 percent of the deposits not covered by insurance or bonds
(140 percent in the case of mortgage notes pledged).
Authorized collateral includes the legal investments described below, as well as certain first mortgage notes,
and certain other State or local government obligations. Minnesota statutes require that securities pledged as
collateral be held in safekeeping by the City or in a financial institution other than that furnishing the collateral.
At year end, the City's carrying amount of deposits was $1,975,880 and the bank balance was $2,022,957. The
bank balance was fully covered by federal depository insurance.
-31-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANClAL STATEMENTS
DECEMBER 31, 2004
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
Investments
Investments are categorized into these three categories of credit risk:
1. Insured or registered, or securities held by the government or its agent in the City's name.
2. Uninsured and unregistered, with securities held by the counterparty's trust department or agent in the
City's name.
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:
1
Category
2
3
Fair Value
and
Carrying
Amount
Government securities
$ 10,764,573
$
$
$ 10,764,573
Investments not subject to categorization
Broker money market
4M funds
988,699
380,934
Total investments
$ 12,134,206
At year end, the City's cash and investment balances were as follows:
Carrying amount of deposits
Investments
Cash on hand
$ 1,975,880
12,134,206
1,300
Total
$ 14,111,386
As reported on the [mancial statements:
Statement of net assets
Fiduciary fund
$ 13,990,721
120,665
Total
$ 14,111,386
-32-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
B. Deferred Revenue
Governmental funds report deferred revenue in connection with receivables for revenues that are not considered
to be available to liquidate liabilities of the current period. Governmental and business-type funds defer
revenue recognition in connection with resources that have been received, but not yet earned. At the end of the
current fiscal year, the various components of deferred revenue and unearned revenue reported in the
governmental funds and business-type funds were as follows:
Unavailable
Unearned
Governmental Activities
General fund
Taxes
Special Assessments
1993 Improvement and Refunding
Special Assessments
2002 Public Safety Building
Lease receivable
2003 Public Safety Building
Lease receivable
$ 35,689
15,253
$
9,745
9,950,000
2,415,000
Total
$ 12,425,687
$
Business-type Activities
Water fund
Rent
29,219
Total
$
$
29,219
-33-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31,2004
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
C. Capital Assets
Capital asset activity for the year ended December 31,2004 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental activities
Capital assets not being depreciated
Land $ 741,826 $ $ $ 741,826
Capital assets being depreciated
Buildings 1,698,337 9,564 1,707,901
Improvements other than buildings 719,514 719,514
Infrastructure 24,739,156 102,117 24,841,273
Machinery and equipment 1,908,007 68,336 (23,647) 1,952,696
Total capital assets
being depreciated 29,065,014 180,017 (23,647) 29,221,384
Less accumulated depreciation
Buildings (455,647) (42,921) (498,568)
Improvements other than buildings (369,943) (37,471) (407,414)
Infrastructure (14,026,615) (1,112,620) (15,139,235)
Machinery and equipment (1,520,125) (117,582) 18,147 (1,619,560)
Total accumulated depreciation (16,372,330) (1,310,594) 18,147 (17,664,777)
Total capital assets
being depreciated, net 12,692,684 (1,130,577) (5,500) 11,556,607
Governmental activities
capital assets, net $ 13,434,510 $ 0,130,577) $ (5,500) $ 12,298,433
-34-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31,2004
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
Beginning Ending
Balance Increases Decreases Balance
Business-type activities
Capital assets not being depreciated
Land $ 404,392 $ $ $ 404,392
Capital assets being depreciated
Infrastructure 15,796,357 15,796,357
Machinery and equipment 390,889 390,889
Total capital assets
being depreciated 16,187,246 16,187,246
Less accumulated depreciation for:
Infrastructure (7,383,285) (401,240) (7,784,525)
Machinery and equipment (164 ,244) (45,511) (209,755)
Total accumulated depreciation (7,547,529) (446,751) (7,994,280)
Total capital assets
being depreciated, net 8,639,717 (446,751) 8,192,966
Business-type activities
capital assets, net $ 9,044,109 $ (446,751) $ $ 8,597,358
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities
General government
Public works
Culture and recreation
Total depreciation expense - governmental activities
$ 27,859
1,209,153
73,582
$ 1,310,594
Business-type activities
Water
Sewer
Stormwater
Liquor
Total depreciation expense - business-type activities
$ 184,468
203,394
19,832
39,057
$ 446,751
Construction Commitments
The City has active construction projects as of December 31,2004. The projects include street construction in
areas with newly developed housing and widening and construction of existing streets and bridges. The County
Road 19 project is a multi-government project and the construction costs are shared by Hennepin County, and
the cities of Tonka Bay and Shorewood. At year end the commitments with contractors for these projects are as
follows:
Project
Spent Remaining
to date Commitment
$ 364,282 $ 3,202,040
12,016 203,290
$ 376,298 $ 3,405,330
County Road 19 and Smithtown Intersection
Lift station #18 rehabilitation
Total
-35-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
D. Interfund Receivables, Payables and Transfers
The composition ofinterfund balances as of December 31,2004, is as follows:
Payable Fund
Amount
Purpose
Receivable Fund
Enterprise
Sewer fund
Enterprise
Stormwater management
$
120,000 to purchase land
Interfund transfers:
Transfers in:
Nonmajor Enterprise
General governmental Stormwater
Fund fund funds management Total
Transfers out:
General $ $ 298,500 $ 25,000 $ 323,500
Liquor 30,000 30,000
Total transfers out $ 30,000 $ 298,500 $ 25,000 $ 353,500
All interfund transfers were for capital improvements and purchases as budgeted.
E. Leases
Operating Leases
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, 2004 amounted to $134,213. Future
minimum lease payments for all leases are as follows:
Year Ending Shorewood Waterford
December 31, Plaza Center Total
2005 $ 55,216 $ 55,000 $ 110,216
2006 57,410 55,000 112,410
2007 59,603 13,750 73,353
2008 10,239 10,239
Total $ 182.468 $ 123,750 $ 306,218
-36-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
F. 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 governmental and
business-type activities. These bonds are reported in the proprietary funds if they are expected to be repaid
from proprietary fund revenues. In addition, general obligation bonds have been issued to refund special
assessments related bonds.
General Obligation Bonds
General obligation bonds are direct obligations and pledge the full faith and credit of the government. The City
has the following general obligation debt.
General Obligation Revenue Bonds
The following bonds were issued to fInance capital improvements in the enterprise funds. They will be retired
from net revenues of the enterprise funds.
Balance
Authorized Interest Issue Maturity at
Description and Issued Rate Date Date Year End
G.O. Water Revenue
Bonds of1995 $ 1,920,000 4.80-5.5 % 11/01/95 02/01/11 $ 895,000
G.O. Water Revenue
Bonds of 1996 860,000 4.85-5.4 11/01/96 02/01/12 460,000
G.O. Water Refunding
Bonds of 2003 815,000 1.5-3.0 08/01/03 02/01/11 815,000
Total G.O. Revenue Bonds $ 2.170,000
Annual debt service requirements to maturity for general obligation revenue bonds are as follows:
G.O. Revenue Bonds
Year Ending Business-type Activities
December 31, Principal Interest Total
2005 $ 180,000 $ 83,574 $ 263,574
2006 335,000 73,483 408,483
2007 330,000 61,723 391,723
2008 320,000 49,585 369,585
2009 320,000 36,988 356,988
2010 - 2014 685,000 35,282 720,282
Total $ 2,170,000 $ 340,635 $ 2,510,635
-37-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31,2004
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
Lease Revenue Bonds
The government also issues bonds where the government pledges income derived from the acquired or
constructed assets to pay debt service. Revenue bonds outstanding at year end are as follows:
Balance
Authorized Interest Issue Maturity at
Description and Issued Rate Date Date Year End
Public Safety Fire Facility,
Series 2002A $ 3,865,000 3.00-5.50 % 09/01/02 02/01/23 $ 3,865,000
Public Safety Police Facility,
Series 2002B 4,025,000 3.00-5.50 09/01/02 02/01/23 4,025,000
Public Safety Fire Facility,
Series 2002C 2,060,000 3.00-5.50 09/01/02 02/01/23 2,060,000
Public Safety Fire Facility,
Series 2003A 1,195,000 2.00-5.10 04/15/03 02/01/23 1,195,000
Public Safety Police Facility,
Series 2003B 1,220,000 2.00-5.10 04/15/03 02/01/23 1,220,000
Total Revenue Bonds $ 12,365,000
Annual debt service requirements to maturity for revenue bonds are as follows:
Lease Revenue Bonds
Year Ending Governmental Activities
December 31, Principal Interest Total
2005 $ 355,000 $ 588,383 $ 943,383
2006 455,000 575,691 1,030,691
2007 465,000 559,550 1,024,550
2008 485,000 541,240 1,026,240
2009 495,000 521,290 1,016,290
2010 - 2014 2,850,000 2,245,891 5,095,891
2015 - 2019 3,625,000 1,460,719 5,085,719
2020 - 2023 3,635,000 407,025 4,042,025
Total $ 12,365,000 $ 6,899,789 $ 19,264.789
-38-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31,2004
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
Other General Long-Term Debt
Capital Lease Payable
During 1996, the City entered into a lease, with option to purchase, agreement as lessee for fmancing the South
Shore Senior Center proj ect. Title remains with the City so long as they are not in default of terms in the lease
agreement.
Balance
Original Interest Issue Maturity at
Description Asset Amount Rate Date Date Year End
Senior Citizens Center $ 311,000 6.22 % 05/30/96 08/01/08 $ 131,164
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.
Year Ending
December 31,
Capital Leases
Governmental Activities
Principal Interest Total
2005
2006
2007
2008
$
$
$
37,543
37,544
37,544
37,544
29,842
31,728
33,732
35,862
7,701
5,816
3,812
1,682
Total
$
131,164
$
19,011
$
150,175
Changes in Long-term Liabilities
Long-term liability activity for the year ended December 31, 2004, was as follows:
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
$ 20,000 $ $ (20,000) $ $
12,365,000 12,365,000 355,000
159,233 (28,069) 131,164 29,842
79,635 87,603 (79,588) 87,650 87,650
$ 12,623.868 $ 87.603 $ (127.657) $ 12.583,814 $ 472,492
Governmental activities
General obligation bonds
Lease revenue bonds
Capital leases payable
Compensated absences
Total
Business-type activities
General obligation
revenue bonds
Compensated absences
$ 2,360,000
14,515
$
14,016
$ (190,000)
(13,578)
$ 2,170,000
14,953
$
180,000
14,953
Total
$ 2.374.515
$
14.016
$ (203.578)
$ 2.184,953
$
194,953
-39-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
G. Fund Balance Reservations/Designations
The City has made the following reservations and designations of fund balance.
Fund Purpose
Amount
$ 191,410
$ 2,941,223
654,549
228,590
2,683,664
$ 6,508,026
Fund balance - Reserved
Debt Service
Debt service on bonds issued
Fund balance - Unreserved - Designated
General
MSA Construction
EDA Public Safety Facility Project
Other governmental
Working capital
Street construction
Capital outlay
Capital outlay
Total designated fund balance
Note 4: DEFINED BENEFIT PENSION PLAN - STATEWIDE
A. Plan Description
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.
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 Minnesota 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 a step-rate benefit accrual formula (Method 1) or a level accrual formula
(Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of average salary
for each of the first 10 years of service and 2.7 percent for each remaining year. The annuity accrual rate for a
Coordinated Plan member is 1.2 percent of average salary for each of the first 10 years and 1.7 percent for each
remaining year. Under Method 2, the annuity accrual rate is 2.7 percent of average salary for Basic Plan
members and 1.7 percent for Coordinated Plan members for each year of service. 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.
-40-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
Note 4: DEFINED BENEFIT PENSION PLAN - STATEWIDE - CONTINUED
The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to
active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them
yet are bound by the provisions in effect at the time they last terminated their public service.
PERA issues a publicly available financial report that includes fmancial statements and required supplementary
information for PERF. That report may be obtained on the web at mnpera.org, by writing to PERA, 60 Empire
Drive, Suite 200, St. Paul, Minnesota 55103-1855 or by calling 651-296-7460 or 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 Minnesota statutes. PERF Basic Plan members and Coordinated Plan members
are required to contribute 9.10 percent and 5.10 percent, respectively, of their annual covered salary. The City
is required to contribute the following percentages of annual covered payroll: 11.78 percent for Basic Plan
PERF members, and 5.53 percent for Coordinated Plan PERF members. The City's contributions to the PERF
for the years ending December 31,2004,2003 and 2002 were $68,440, $63,294 and $60,485, respectively. The
City's contributions were equal to the contractually required contributions for each year as set by state statute.
-41-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31,2004
Note 5: JOINT VENTURES
A. South Lake Minnetonka Police Department
The City participates in a joint powers agreement with the cities of Excelsior, Greenwood and Tonka Bay,
which establishes the South Lake Minnetonka Police Department (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.
Any budget shortfall is made up first from department reserves, with any excess shortfall assessed to each
participating community according to the formula. The most recent year of audited information is December
31,2003.
The Department had accounts payable, and accrued payroll and compensated absences in the general fund of
$186,166. The Department also had $5,245,000 oflong-term debt outstanding as of December 31,2003. The
following is a summary of the Department's balance sheet as of December 31, 2003:
SOUTH LAKE MINNETONKA POLICE DEPARTMENT
BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS
DECEMBER 31,2003
(With comparative totals for December 31, 2002)
Total assets
GovenrrnentalFunds
Debt
General Designated Service
Fund Fund Fund
$ 219,725 $ 205,079 $ 80,168
186,166
33,559 205,079 80,168
$ 219,725 $ 205,079 $ 80,168
Account Groups
General General Totals
Fixed Long-Term (Memorandum Only)
Assets Debt 2003 2002
$ 5,384,778 $ 5,245,000 $ 11,134,750 $ 877,133
5,245,000 5,431,166 161,024
5,384,778 5,703,584 716,109
$ 5,384,778 $ 5,245,000 $ 11,134,750 $ 877,133
Liabilities
Fund equity
Totalliabilities
and fund equity
Total assets
Liabilities
Fund equity
Total liabilities
and fund equity
-42-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31,2004
Note 5: JOINT VENTURES - CONTINUES
The following is a summary of the Department's statement of revenue, expenditures and changes in fund
balance for the general fund for the year ended December 31, 2003:
SOUTH LAKE MINNETONKA POLICE DEPARTMENT
SUMMARY STATEMENT OF REVENUE, EXPENDITURES AND CHANGES
IN FUND BALANCE - GENERAL FUND - BUDGET AND ACTUAL
YEAR ENDED DECEMBER 31,2003
(With comparative actual amounts for the year ended December 31,2002)
2003 2002
Variance
Favorable
Budget Actual (Unfavorable ) Actual
Total revenues $ 1,519,932 $ 1,535,006 $ 15,074 $ 1,507,917
Total expenditures 1,551,300 1,548,502 2,798 1,501,654
Excess (deficiency) of revenues
over (under) expenditures (31,368) (13,496) 17,872 6,263
Transfer to designated fund $ $ (28,000)
Fund balances, January 1 47,055 68,792
Fund balances, December 31 $ 33,559 $ 47,055
B. Southshore Senior Community Center
The City participates in a joint venture with the Cities of Deep haven, Excelsior, Greenwood and Tonka Bay,
which establishes the Southshore Senior Community Center (Senior Center) to provide senior citizens
educational and recreational activities. Upon completion of the facility, the member cities will lease the Senior
Center to the Friends of the Southshore Senior Community Center (Community Center). The term of the lease
shall be 25 years at a rental rate of $1 per year. In addition to the rental rate, the Community Center is required
to pay all operating costs of the Senior Center. The member cities are responsible for a proportionate share of
the building construction. Shorewood fmanced its obligation by issuing a lease purchase note. The remaining
balance on the lease is $131,164 and is reflected in the government-wide statements. This will be paid out of
the general fund. In the event operating costs are not covered by revenue, each member is responsible for their
proportionate share oflosses. The building is recorded in the capital asset section on the Statement of Net
Assets. The ownership interest of each City is proportionate to each City's investment in the Senior Center.
Separate fmancial statements are issued for the Community Center and can be obtained at the City offices.
C. Excelsior Fire District
In August of 2000, the cities of Deep haven, Excelsior, Greenwood, Shorewood and Tonka Bay entered a joint
powers agreement to provide fire protection and medical response service to their residents and created an entity
called the Excelsior Fire District (the District). The Board of Directors is comprised often members and five
alternate members. Each member city appoints two representatives on the board and one alternate. The City is
billed for service based on a formula that determines its share of the total expenditures. Separate financial
statements can be obtained by writing to the Excelsior Fire District, 24100 Srnithtown Road, Shorewood,
Minnesota 55331.
-43-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
Note 6: OTHER INFORMATION
A. Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors
and omissions; injuries to employees; and natural disasters 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.
Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably
estimated. 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.
B. Legal Debt Margin
The City's statutory debt limit is $20,745,830 computed as two percent of the taxable market value of property
within the City. Long-term debt issued and financed partially or entirely by special assessments, tax increments
or the net revenues of enterprise fund operations is excluded from the debt limit computation. The City has no
debt that is subject to the statutory debt limit.
Note 8: CHANGE IN ACCOUNTING PRINCIPLE
During fiscal year 2004, the City implemented several new accounting pronouncements issued by the Government
Accounting Standards Board (GASB). They are Statement No. 34, "Basic Financial Statements - and
Management's Discussion and Analysis - for State and Local Governments ", Statement No.3 7, "Basic Financial
Statements - and Management's Discussion and Analysis - for State and Local Governments: Omnibus ", and
Statement No. 38, "Certain Financial Statement Note Disclosures ", paragraphs 6 through 11.
Because of implementation of the new standards, an adjustment is required for the December 31, 2003, carry
forward (net asset) balance of the governmental funds. The following schedule reconciles the January 1, 2004
balance to the December 31, 2003 net asset balance using the new accounting standards.
Fund balance, December 31, 2003
Adjustments
Net book value of capital assets, including infrastructure
Accrued interest receivable, lease
Bonds payable
Capital lease payable
Accrued interest payable
Compensated absences payable
Deferred revenue on loans receivable
Deferred revenue on special assessments receivable
Deferred revenue on taxes receivable
$ 7,314,301
13,434,510
276,165
(12,385,000)
(159,233)
(280,292)
(79,635)
12,365,000
40,315
34,805
Total net assets as restated, January 1, 2004
$ 20,560,936
-44-
COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
CITY OF SHOREWOOD
SHOREWOOD, MINNESOTA
YEAR ENDED
DECEMBER 31, 2004
NONMAJOR CAPITAL PROJECTS FUNDS
Capital projects funds are used to account for the acquisition and construction of major capital facilities other than those fmanced
by enterprise funds.
Public Facilities/Office Equipment - This fund was established to account for capital improvement projects for public facilities
and replacement of office equipment that may be fmanced without the need to issue bonds.
Park Capital Improvement - This fund accounts for park land acquisition and other capital improvements in the City parks.
Equipment Replacement - This fund was established for the purpose of funding the replacement of capital equipment.
Street Reconstruction - This fund was established for the purpose of funding the periodic reconstruction of City streets and
roadways.
Land and Open Space - This fund was established to accumulate resources for the acquisition ofland and open spaces,
including conservation easements.
Senior Community Center - This fund was established to account for the construction of a Senior Community Center.
CITY OF SHOREWOOD, MINNESOTA
NONMAJOR GOVERNMENTAL FUNDS
COMBnrrNGBALANCESHEET
DECEMBER 31, 2004
Capital Projects Fund
Public
F acilities/ Park
Office Capital Equipment
Equipment Improvement Replacement
ASSETS
Cash and temporary investments $ 147,011 $ 241,905 $ 309,693
Receivables
Accrued interest 600 1,084 1,832
TOTAL ASSETS $ 147,611 $ 242,989 $ 311,525
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts and contracts payable $ $ $
FUND BALANCES
Umeserved
Designated 147,611 242,989 311,525
TOTAL LIABILITIES AND FUND BALANCES $ 147,611 $ 242,989 $ 311,525
-45-
Exhibit A-I
Capital Projects Fund - Continued
Senior
Street Land and Community
Reconstruction Open Space Center Totals
$ 1,941,306 $ 5,000 $ 36,073 $ 2,680,988
10,241 203 13,960
$ 1,951,547 $ 5,000 $ 36,276 $ 2,694,948
$
11,284
$
$
$
11,284
1,940,263
5,000
36,276
2,683,664
$ 1,951,547
$
5,000
$
36,276
$ 2,694,948
-46-
CITY OF SHOREWOOD, MINNESOTA
NONMAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED DECEMBER 31,2004
Capital Projects Funds
Public
Facilities/ Park
Office Capital Equipment
Equipment Improvement Replacement
REVENUES
Interest on investments $ 2,019 $ 3,266 $ 6,555
Miscellaneous
Park dedication fees 54,000
Contributions and donations 5,000
Other 600
TOTAL REVENUES 2,019 62,866 6,555
EXPENDITURES
Capital outlay
General government 9,601 613
Public works 66,055
Culture and recreation 12,472
TOTAL EXPENDITURES 9,601 12,472 66,668
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (7,582) 50,394 (60,113)
OTHER FINANCING SOURCES
Transfers in 50,000 10,000 50,000
NET CHANGE IN FUND BALANCES 42,418 60,394 (10,113)
FUND BALANCES, JANUARY 1 105,193 182,595 321,638
FUND BALANCES, DECEMBER 31 $ 147,611 $ 242,989 $ 311,525
-47-
Exhibit A-2
Capital Projects Funds - Continued
Street Land and
Reconstruction Open Space
Senior
Community
Center
Totals
$ 48,629
54,000
5,000
600
108,229
$
36,046 $
$
743
36,046
743
10,214
142,987 209,042
13 12,485
142,987 13 231,741
(106,941) 730 (123,512)
183,500 5,000 298,500
76,559 5,000 730 174,988
1,863,704 35,546 2,508,676
$ 1,940,263 $ 5,000 $ 36,276 $ 2,683,664
-48-
CITY OF SHOREWOOD, MINNESOTA Exhibit B-1
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2004
(With comparative actual amounts for the year ended December 31,2003)
2004 2003
Variance with
Budgeted Amounts Final Budget
Actual Positive Actual
Original Final Amounts (Negative) Amounts
REVENUES
Taxes
General property taxes $ 3,420,229 $ 3,420,229 $ 3,227,422 $ (192,807) $ 2,965,830
Fiscal disparities 117,020 117,020 106,023
Total 3,420,229 3,420,229 3,344,442 (75,787) 3,071,853
Licenses and permits
Business 13,050 13,050 20,170 7,120 14,734
Nonbusiness 178,917 178,917 289,885 110,968 319,690
Total 191,967 191,967 310,055 118,088 334,424
Intergovernmental
State
Other 59,751 59,751 73,065 13,314 65,782
Charges for services
General government 18,000 18,000 13,159 (4,841) 12,355
Parks and recreation 17,000 17,000 31,010 14,010 36,334
Total 35,000 35,000 44,169 9,169 48,689
Fines and forfeitures 60,000 60,000 81,841 21,841 88,949
Interest on investments 94,800 94,800 58,564 (36,236) 55,649
Miscellaneous revenue
Refunds and reimbursements 8,600 8,600 11,682 3,082 13,862
Contributions and donations 1,000 1,000
Other 21,600 21,600 32,430 10,830 19,838
Total 30,200 30,200 45,112 14,912 33,700
TOTAL REVENUES 3,891,947 3,891,947 3,957,248 65,301 3,699,046
-49-
CITY OF SHOREWOOD, MINNESOTA Exhibit B-1
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - CONTINUED
BUDGETANDACTUAL-CONTINUED
FOR THE YEAR ENDED DECEMBER 31,2004
(With comparative actual amounts for the year ended December 31, 2003)
2004 2003
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual (Negative) Actual
EXPENDITURES
Current
General government
Mayor and Council
Personal services $ 13,564 $ 13,564 $ 13,733 $ (169) $ 13,564
Supplies 1,200 1,200 1,183 17 526
Other services and charges 88,900 88,900 45,457 43,443 46,798
Total 103,664 103,664 60,373 43,291 60,888
Administrative
Personal services 122,273 122,273 108,416 13,857 103,766
Supplies 200 200 200
Other services and charges 11 ,250 11,250 2,242 9,008 6,587
Total 133,723 133,723 110,658 23,065 110,353
City clerk
Personal services 157,342 157,342 152,577 4,765 126,512
Supplies 33,800 33,800 25,225 8,575 24,437
Other services and charges 24,000 24,000 15,446 8,554 20,741
Total 215,142 215,142 193,248 21,894 171,690
Finance
Personal services 135,636 135,636 136,487 (851 ) 137,882
Supplies 18,350 18,350 4,722 13,628 5,176
Other services and charges 9,700 9,700 7,035 2,665 5,359
Total 163,686 163,686 148,244 15,442 148,417
Professional services
Other services and charges 190,000 190,000 142,061 47,939 169,144
Planning and zoning
Personal services 135,040 135,040 148,955 (13,915) 141,216
Supplies 975 975 916 59 994
Other services and charges 13,175 13,175 8,332 4,843 10,818
Total 149,190 149,190 158,203 (9,013) 153,028
-50-
CITY OF SHOREWOOD, MINNESOTA Exhibit B-1
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - CONTINUED
BUDGETANDACTUAL-CONTINUED
FOR THE YEAR ENDED DECEMBER 31,2004
(With comparative actual amounts for the year ended December 31, 2003)
2004 2003
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual (Negative) Actual
EXPENDITURES - CONTINUED
Current - Continued
General government - Continued
Municipal building
Supplies $ 16,500 $ 16,500 $ 13,536 $ 2,964 $ 13,198
Other services and charges 107,300 107,300 93,443 13,857 98,160
Total 123,800 123,800 106,979 16,821 111,358
City engineer
Personal services 106,167 106,167 101,301 4,866 108,273
Supplies 1,100 1,100 839 261 420
Other services and charges 12,200 12,200 15,137 (2,937) 5,338
Total 119,467 119,467 117,277 2,190 114,031
Total general government 1,198,672 1,198,672 1,037,043 161,629 1,038,909
Public safety
Police protection
Other services and charges 670,502 670,502 671,401 (899) 630,910
Fire protection
Other services and charges 234,997 234,997 235,010 (13) 251,912
Animal control
Other services and charges 23,500 23,500 20,971 2,529 19,495
Protective inspection
Personal services 95,676 95,676 95,455 221 89,529
Supplies 850 850 777 73 89
Other services and charges 10,270 10,270 5,075 5,195 7,114
Total 106,796 106,796 101,307 5,489 96,732
Total public safety 1,035,795 1,035,795 1,028,689 7,106 999,049
Public works
General maintenance
Personal services 206,666 206,666 178,292 28,374 165,724
Supplies 43,500 43,500 39,150 4,350 32,706
Other services and charges 27,600 27,600 28,850 (1,250) 29,049
Total 277,766 277,766 246,292 31,474 227,479
-51-
CITY OF SHOREWOOD, MINNESOTA Exhibit B-1
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - CONTINUED
BUDGETANDACTUAL-CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2004
(With comparative actual amounts for the year ended December 31, 2003)
2004 2003
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual (Negative) Actual
EXPENDITURES - CONTINUED
Current - Continued
Public works
Streets and highways
Personal services $ 119,159 $ 119,159 $ 74,773 $ 44,386 $ 55,335
Supplies 38,000 38,000 42,282 (4,282) 29,235
Other services and charges 7,800 7,800 9,402 (1,602) 7,547
Total 164,959 164,959 126,457 38,502 92,117
Snow and ice removal
Personal services 34,192 34,192 21,211 12,981 18,793
Supplies 26,000 26,000 15,490 10,510 21,629
Total 60,192 60,192 36,701 23,491 40,422
Traffic control
Supplies 5,050 5,050 1,979 3,071 2,752
Other services and charges 35,200 35,200 31,673 3,527 33,913
Total 40,250 40,250 33,652 6,598 36,665
Sanitation and waste removal
Personal services 1,267 1,267 (1,609) 363
Other services and charges 3,900 3,900 2,876 3,900 6,163
Total 5,167 5,167 2,876 2,291 6,526
Tree maintenance
Personal services 11,128 11,128 18,882 (7,754) 14,928
Supplies 900 900 1,048 (148) 206
Other services and charges 13,350 13,350 11,688 1,662 2,265
Total 25,378 25,378 31,618 (6,240) 17,399
Total public works 573,712 573,712 477,596 96,116 420,608
-52-
CITY OF SHOREWOOD, MINNESOTA Exhibit B-1
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - CONTINUED
BUDGETANDACTUAL-CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2004
(With comparative actual amounts for the year ended December 31, 2003)
2004 2003
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual (Negative) Actual
EXPENDITURES - CONTINUED
Current - Continued
Culture and recreation
Personal services $ 120,861 $ 120,861 $ 104,075 $ 16,786 $ 109,453
Supplies 20,600 20,600 11 ,341 9,259 9,273
Other services and charges 64,200 64,200 52,862 11,338 45,814
Total culture and recreation 205,661 205,661 168,278 37,383 164,540
Total current expenditures 3,013,840 3,013,840 2,711,606 302,234 2,623,106
Capital outlay
General government 52,700 52,700 5,878 46,822 10,787
Public safety 487,038 487,038 512,232 (25,194) 301,189
Public works 6,950 6,950 3,152 3,798 2,926
Culture and recreation 375 375 (1,415) 1,790
Total capital outlay 547,063 547,063 519,847 27,216 314,902
Debt service
Principal 28,069 28,069 28,069 26,402
Interest and other 9,475 9,475 9,475 11,142
Total debt service 37,544 37,544 37,544 37,544
TOTAL EXPENDITURES 3,598,447 3,598,447 3,268,997 329,450 2,975,552
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 293,500 293,500 688,251 394,751 723,494
OTHER FINANCING SOURCES (USES)
Tansfers in 30,000 30,000 30,000 30,000
Transfers out (323,500) (323,500) (323,500) (365,000)
TOTAL OTHER FINANCING
SOURCES (USES) (293,500) (293,500) (293,500) (335,000)
NET CHANGE IN FUND BALANCES 394,751 394,751 388,494
FUND BALANCES, JANUARY 1 2,546,4 72 2,546,472 2,546,472 2,157,978
FUND BALANCES, DECEMBER 31 $ 2,546,472 $ 2,546,472 $ 2,941,223 $ 394,751 $ 2,546,472
-53-
CITY OF SHOREWOOD, MINNESOTA Exhibit C-l
DEBT SERVICE FUNDS
COMBnITNGBALANCESHEET
DECEMBER 31,2004
1993
Improvement Waterford 2002/2003
and III Tax Public Safety
Refunding Increment Building Total
ASSETS
Cash and temporary investments $ 100,902 $ 10,287 $ 79,655 $ 190,844
Receivables
Accrued interest 508 58 566
Deferred 9,745 9,745
Lease 12,365,000 12,365,000
Due from other funds 10,000 10,000
TOTAL ASSETS $ 111,155 $ 10,345 $ 12,454,655 $ 12,576,155
LIABILITIES AND FUND BALANCES
LIABILITIES
Due to other funds $ $ $ 10,000 $ 10,000
Deferred revenue 9,745 12,365,000 12,374,745
TOTAL LIABILITIES 9,745 12,375,000 12,384,745
FUND BALANCES
Reserved for
Debt service 101,410 10,345 79,655 191,410
TOTAL LIABILITIES AND
FUND BALANCES $ 111,155 $ 10,345 $ 12,454,655 $ 12,576,155
-54-
CITY OF SHOREWOOD, MINNESOTA Exhibit C-2
DEBT SERVICE FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED DECEMBER 31,2004
1993
Improvement Waterford 2002/2003
and III Tax Public Safety
Refunding Increment Building Total
REVENUES
Special assessments $ 10,737 $ $ $ 10,737
Lease payments 620,596 620,596
Interest on investments 2,268 212 169 2,649
TOTAL REVENUES 13,005 212 620,765 633,982
EXPENDITURES
Debt service
Principal 20,000 20,000
Interest and service charges 520 4 627,398 627,922
TOTAL EXPENDITURES 20,520 4 627,398 647,922
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (7,515) 208 (6,633) (13,940)
FUND BALANCES, JANUARY 1 108,925 10,137 86,288 205,350
FUND BALANCES, DECEMBER 31 $ 101,410 $ 10,345 $ 79,655 $ 191,410
-55-
CITY OF SHOREWOOD, MINNESOTA
WATER FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 2004
Exhibit D-l
ASSETS
CURRENT ASSETS
Cash and temporary investments
Receivables
Accrued interest
Accounts
Special assessments
Prepaid items
$ 2,466,910
12,710
96,061
1,354
4,709
2,581,744
302,437
23,546
59,802
7,050,734
(2,100,107)
5,010,429
5,336,412
7,918,156
TOTAL CURRENT ASSETS
NONCURRENT ASSETS
Special assessments receivable
Unamortized bond discount
Capital assets
Machinery and equipment
Infrastructure
Less accumulated depreciation
TOTAL CAPITAL ASSETS
(Net of accumulated depreciation)
TOTAL NONCURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Accounts and contracts payable
Due to other governments
Accrued interest payable
Salaries and compensated absences payable
Deferred revenue
Current portion oflong-term debt
21,144
1,609
37,116
540
29,219
180,000
269,628
1,990,000
1,990,000
2,259,628
2,840,429
2,818,099
$ 5,658,528
TOTAL CURRENT LIABILITIES
NONCURRENT LIABILITIES
Bonds payable less current portion above
TOTAL NONCURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
Invested in capital assets, net of related debt
Umestricted
TOTAL NET ASSETS
-56-
CITY OF SHOREWOOD, MINNESOTA Exhibit D-2
WATER FUND
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
YEARS ENDED DECEMBER 31,2004 AND 2003
OPERATING REVENUES
Charges for services $ 494,024
Pernrits and connection fees 45,985
TOTAL OPERATING REVENUES 540,009
OPERATING EXPENSES
Personal services 75,789
Supplies 10,576
Repairs and maintenance 60,965
Depreciation 184,468
Professional services 46,868
Contracted services 28,723
Insurance 5,909
Water purchases 13,903
Utilities 60,436
Other 11 ,344
TOTAL OPERATING EXPENSES 498,981
OPERATING INCOME 41,028
NONOPERATING REVENUES (EXPENSES)
Special assessments 25,374
Interest on investments 56,098
Other income 54,806
Interest expense (92,877)
TOTAL NONOPERATING REVENUES (EXPENSES) 43,401
CHANGE IN FUND NET ASSETS 84,429
FUND NET ASSETS, JANUARY 1 5,574,099
FUND NET ASSETS, DECEMBER 31 $ 5,658,528
-57-
CITY OF SHOREWOOD, MINNESOTA
WATER FUND
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2004
Exhibit D-3
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers and users
Other receipts and payments, net
Payments to suppliers, contractors and other governments
Payments to employees
NET CASH PROVIDED BY OPERATING ACTIVITIES
$ 527,506
42,469
(235,159)
(75,795)
259,021
(190,000)
(93,285)
73,051
(210,234)
51,798
100,585
2,366,325
$ 2,466,910
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Bond principal paid
Interest paid on revenue bonds
Special assessments collected
NET CASH USED BY CAPITAL AND
RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on investments
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, JANUARY 1
CASH AND CASH EQUIVALENTS, DECEMBER 31
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:
Other income related to operations
Depreciation
(Increase) decrease in assets:
Accounts receivable
Prepaid items
Increase (decrease) in liabilities:
Accounts and contracts payable
Due to other governments
Salaries and compensated absences payable
$
41,028
NET CASH PROVIDED BY OPERATING ACTIVITIES
42,469
184,468
(12,503)
(461 )
4,000
26
(6)
$ 259,021
NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES
Amortization of bond discount
$
3,301
-58-
CITY OF SHOREWOOD, MINNESOTA
SEWER FUND
STATEMENTS OF NET ASSETS
DECEMBER 31,2004
Exhibit E-l
ASSETS
CURRENT ASSETS
Cash and temporary investments
Receivables
Accrued interest
Accounts
Special assessments
Due from other funds
Prepaid items
$ 3,548,050
18,871
210,388
3,209
120,000
406
3,900,924
15,656
70,690
7,896,525
(5,717,348)
2,249,867
2,265,523
6,166,447
TOTAL CURRENT ASSETS
NONCURRENT ASSETS
Special assessments
Capital assets
Machinery and equipment
Infrastructure
Less accumulated depreciation
TOTAL CAPITAL ASSETS
(Net of accumulated depreciation)
TOTAL NONCURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Accounts and contracts payable
Due to other governments
Salaries and compensated absences payable
29,095
4,010
425
33,530
2,249,867
3,883,050
$ 6,132,917
TOTAL CURRENT LIABILITIES
NET ASSETS
Invested in capital assets, net of related debt
Unrestricted
TOTAL NET ASSETS
-59-
CITY OF SHOREWOOD, MINNESOTA Exhibit E-2
SEWER FUND
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
FOR THE YEAR ENDED DECEMBER 31,2004
OPERATING REVENUE
Charges for services $ 815,920
Permits and connection fees 50,430
TOTAL OPERATING REVENUE 866,350
OPERATING EXPENSES
Personal services 63,543
Supplies 2,968
Repairs and maintenance 19,349
Depreciation 203,394
Professional services 3,133
Contracted services 3,891
Insurance 2,018
Utilities 7,884
MCES charges 381,632
Excelsior sewer charges 17,146
Other 30,522
TOTAL OPERATING EXPENSES 735,480
OPERATING INCOME 130,870
NONOPERATING REVENUES
Interest on investments 70,952
CHANGE IN FUND NET ASSETS 201,822
FUND NET ASSETS, JANUARY 1 5,931,095
FUND NET ASSETS, DECEMBER 31 $ 6,132,917
-60-
CITY OF SHOREWOOD, MINNESOTA
SEWER FUND
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31,2004
Exhibit E-3
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers and users
Payments to suppliers, contractors and other governments
Payments to employees
NET CASH PROVIDED BY OPERATING ACTIVITIES
$ 864,660
(456,299)
(63,399)
344,962
30,000
68,508
443,470
3,104,580
$ 3,548,050
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Decrease in due from other funds
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on investments
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, JANUARY 1
CASH AND CASH EQUIVALENTS, DECEMBER 31
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTMTIES
Operating income
Adjustments to reconcile operating income
to net cash provided by operating activities:
Depreciation
(Increase) decrease in assets:
Accounts receivable
Special assessments receivable
Prepaid items
Increase (decrease) in liabilities:
Accounts and contracts payable
Due to other governments
Salaries and compensated absences payable
NET CASH PROVIDED BY OPERATING ACTIVITIES
$ 130,870
203,394
4,775
(6,465)
312
15,496
(3,564)
144
$ 344,962
-61-
ASSETS
CURRENT ASSETS
Cash and temporary investments
Receivables
Accrued interest
Accounts
Special assessments
TOTAL CURRENT ASSETS
NONCURRENT ASSETS
Special assessments
TOTAL ASSETS
NET ASSETS
Umestricted
CITY OF SHOREWOOD, MINNESOTA
RECYCLING FUND
STATEMENT OF NET ASSETS
DECEMBER 31,2004
Exhibit F-l
$ 51,760
237
16,485
290
68,772
2,293
71,065
$ 71,065
-62-
CITY OF SHOREWOOD, MINNESOTA
RECYCLING FUND
STATEMENT OF REVENUES, EXPENSES AND CHANGES FUND NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 2004
Exhibit F-2
OPERATING REVENUES
Charges for services $ 93,403
OPERATING EXPENSES
Contracted service 106,742
Other 191
TOTAL OPERATING EXPENSES 106,933
OPERATING LOSS (13,530)
NONOPERATING REVENUES
County recycling grant 21,160
Interest on investments 858
Other 424
TOTAL NONOPERATING REVENUES 22,442
CHANGE IN FUND NET ASSETS 8,912
FUND NET ASSETS, JANUARY 1 62,153
FUND NET ASSETS, DECEMBER 31 $ 71,065
-63-
CITY OF SHOREWOOD, MINNESOTA
RECYCLING FUND
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2004
Exhibit F-3
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers and users
Other receipts and payments, net
Payments to suppliers, contractors and other governments
NET CASH PROVIDED BY OPERATING ACTIVITIES
$ 92,504
21,584
(106,944)
7,144
853
7,997
43,763
$ 51,760
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on investments
INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, JANUARY 1
CASH AND CASH EQUIVALENTS, DECEMBER 31
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES
Operating loss
Adjustments to reconcile operating loss
to net cash provided by operating activities:
County recycling grant
Other income related to operations
(Increase) decrease in assets:
Accounts receivable
Special assessments receivable
Increase (decrease) in liabilities:
Accounts payable
NET CASH PROVIDED BY OPERATING ACTIVITIES
$ (13,530)
21,160
424
718
(1,617)
(11)
$ 7,144
-64-
CITY OF SHOREWOOD, MINNESOTA
STORMW A TER MANAGEMENT UTILITY FUND
STATEMENT OF NET ASSETS
DECEMBER 31,2004
Exhibit G-l
ASSETS
CURRENT ASSETS
Cash and investments
Receivables
Accrued interest
Accounts
Special assessments
NONCURRENT ASSETS
Special assessments
Capital assets
Land
Infrastructure
Less accumulated depreciation
$ 292,084
1,841
18,733
203
312,861
1,239
404,392
793,313
(61,379)
1,136,326
1,137,565
1,450,426
TOTAL CURRENT ASSETS
TOTAL CAPITAL ASSETS
(Net of accumulated depreciation)
TOTAL NONCURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Accounts payable
Due to other funds
21,425
120,000
141,425
1,136,326
172,675
$ 1,309,001
TOTAL CURRENT LIABILITIES
NET ASSETS
Invested in capital assets, net of related debt
Unrestricted
TOTAL NET ASSETS
-65-
CITY OF SHOREWOOD, MINNESOTA Exhibit G-2
STORMW A TER MANAGEMENT UTILITY FUND
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 2004
OPERATING REVENUES
Charges for services $ 63,826
OPERATING EXPENSES
Personal services 9,244
Supplies 2,021
Depreciation 19,832
Professional services 22,020
Contracted services 45,122
Other 1,121
TOTAL OPERATING EXPENSES 99,360
OPERATING LOSS (35,534)
NONOPERATING REVENUES (EXPENSES)
Interest on investments 5,691
Antenna lease 21,879
Other income 273
Interest expense (7,397)
TOTAL NONOPERATING REVENUES (EXPENSES) 20,446
LOSS BEFORE TRANSFERS (15,088)
TRANSFERS
Transfers in 25,000
CHANGE IN FUND NET ASSETS 9,912
FUND NET ASSETS, JANUARY 1 1,299,089
FUND NET ASSETS, DECEMBER 31 $ 1,309,001
-66-
CITY OF SHOREWOOD, MINNESOTA
STORMW ATER MANAGEMENT UTILITY FUND
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31,2004
Exhibit G-3
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers and users
Other receipts and payments, net
Payments to suppliers, contractors and other governments
Payments to employees
NET CASH PROVIDED BY OPERATING ACTIVITIES
$ 60,899
22,152
(49,860)
(9,244)
23,947
25,000
(7,397)
(30,000)
(12,397)
5,517
17,067
275,017
$ 292,084
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers in
Interest paid on interfund loan
Increase in due from other funds
NET CASH USED BY
NONCAPITAL FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, JANUARY 1
CASH AND CASH EQUIVALENTS, DECEMBER 31
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES
Operating loss
Adjustments to reconcile operating income
to net cash provided by operating activities:
Antenna lease
Other income related to operations
Depreciation
(Increase) decrease in assets:
Accounts receivable
Special assessments receivable
Increase (decrease) in liabilities:
Accounts payable
NET CASH PROVIDED BY OPERATING ACTIVITIES
$ (35,534)
21,879
273
19,832
(2,247)
( 680)
20,424
$ 23,947
-67-
CITY OF SHOREWOOD, MINNESOTA
LIQUOR FUND
STATEMENT OF NET ASSETS
DECEMBER 31,2004
Exhibit H-1
ASSETS
CURRENT ASSETS
Cash and temporary investments
Receivables
Accrued interest
Accounts
Inventories, at cost
Prepaid items
$ 413,370
2,710
7,445
242,156
3,867
669,548
TOTAL CURRENT ASSETS
NONCURRENT ASSETS
Capital assets
Equipment and furnishings
Less accumulated depreciation
316,182
(115,446)
Total capital assets, net of accumulated depreciation
200,736
TOTAL ASSETS
870,284
LIABILITIES
CURRENT LIABILITIES
Accounts and contracts payable
Due to other governments
Salaries and compensated absences payable
107,099
19,112
17,954
144,165
200,736
525,383
$ 726,119
TOTAL CURRENT LIABILITIES
NET ASSETS
Invested in capital assets, net of related debt
Unrestricted
TOTAL NET ASSETS
-68-
CITY OF SHOREWOOD, MINNESOTA Exhibit B-2
LIQUOR FUND
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 2004
OPERATING REVENUES
Sales
Less cost of sales
TOTAL OPERATING REVENUES
$ 2,195,597
(1,608,759)
586,838
259,236
10,013
39,057
7,466
1,736
14,454
20,430
134,213
12,152
39,330
538,087
48,751
10,564
(2,023)
8,541
57,292
(30,000)
27,292
698,827
$ 726,119
OPERATING EXPENSES
Personal services
Supplies
Depreciation
Professional services
Contracted services
Insurance
Utilities
Rent
Advertising
Other
TOTAL OPERATING EXPENSES
OPERATING INCOME
NONOPERATING REVENUES
Interest on investments
Other income
TOTAL NONOPERATING REVENUES
INCOME BEFORE TRANSFERS
TRANSFERS
Transfers out
CHANGE IN FUND NET ASSETS
FUND NET ASSETS, JANUARY 1
FUND NET ASSETS, DECEMBER 31
-69-
CITY OF SHOREWOOD, MINNESOTA
LIQUOR FUND
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2004
Exhibit B-3
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers and users
Other receipts and payments, net
Payments to suppliers, contractors and other governments
Payments to employees
$ 2,218,152
(2,023)
(1,830,200)
(258,087)
NET CASH PROVIDED BY OPERATING ACTIVITIES
127,842
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers out
(30,000)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on investments
10,358
INCREASE IN CASH AND CASH EQUIVALENTS
108,200
CASH AND CASH EQUIVALENTS, JANUARY 1
305,170
CASH AND CASH EQUIVALENTS, DECEMBER 31
$ 413,370
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES
Operating income
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
Inventories
Prepaid items
Increase (decrease) in liabilities:
Accounts and contracts payable
Due to other governments
Salaries and compensated absences payable
NET CASH PROVIDED BY OPERATING ACTIVITIES
$ 48,751
(2,023)
39,057
22,555
6,393
3,480
10,232
(1,752)
1,149
$ 127,842
-70-
CITY OF SHOREWOOD, MINNESOTA Exhibt H-4
LIQUOR FUNDS
COMBINING SCHEDULE OF NET ASSETS
DECEMBER 31,2004
Waterford Shorewood
Tonka Bay Center Plaza Total
ASSETS
CURRENT ASSETS
Cash and temporary investments (deficit) $ 246,813 $ (162,426) $ 328,983 $ 413,370
Receivables
Accrued interest 1,401 1,309 2,710
Accounts 7,445 7,445
Inventories, at cost 94,449 147,707 242,156
Prepaid items 1,933 1,934 3,867
TOTAL CURRENT ASSETS 248,214 (58,599) 479,933 669,548
NONCURRENT ASSETS
Capital assets
Equipment and furnishings 68,199 247,983 316,182
Less accumulated depreciation (53,399) (62,047) (115,446)
TOTAL CAPITAL ASSETS
(net of accumulated depreciation) 14,800 185,936 200,736
TOTAL ASSETS 248,214 (43,799) 665,869 870,284
LIABILITIES
CURRENT LIABILITIES
Accounts and contracts payable 37,093 70,006 107,099
Due to other governments 7,432 11,680 19,112
Salaries and compensated absences payable 4,040 13,914 17,954
TOTAL CURRENT LIABILITIES 48,565 95,600 144,165
NET ASSETS
Invested in capital assets, net of related debt 14,800 185,936 200,736
Unrestricted 248,214 (107,164) 384,333 525,383
TOTAL NET ASSETS $ 248,214 $ (92,364) $ 570,269 $ 726,119
-71-
CITY OF SHOREWOOD, MINNESOTA Exhibit H-5
LIQUOR FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 2004
Waterford Shorewood
Tonka Bay Center Plaza Total
OPERATING REVENUES
Sales $ $ 857,591 $ 1,338,006 $ 2,195,597
Less cost of goods sold (628,786) (979,973) (1,608,759)
GROSS PROFIT 228,805 358,033 586,838
OPERATING EXPENSES
Personal services 113,882 145,354 259,236
Supplies 4,584 5,429 10,013
Depreciation 5,152 33,905 39,057
Professional services 3,733 3,733 7,466
Contracted services 551 1,185 1,736
Insurance 7,227 7,227 14,454
U tilities 8,467 11,963 20,430
Rent 64,010 70,203 134,213
Advertising 6,538 5,614 12,152
Other 12,924 26,406 39,330
TOTAL OPERATING EXPENSES 227,068 311,019 538,087
OPERATING INCOME 1,737 47,014 48,751
NONOPERATING REVENUES (EXPENSES)
Interest on investments 5,201 5,363 10,564
Other income (expense) (2,423) 400 (2,023)
TOTAL NONOPERATING
REVENUES (EXPENSES) 2,778 5,763 8,541
INCOME BEFORE TRANSFERS 2,778 1,737 52,777 57,292
TRANSFERS
Transfers out (15,000) (15,000) (30,000)
CHANGE IN FUND NET ASSETS 2,778 (13,263) 37,777 27,292
FUND NET ASSETS, JANUARY 1 245,436 (79,101) 532,492 698,827
FUND NET ASSETS, DECEMBER 31 $ 248,214 $ (92,364) $ 570,269 $ 726,119
-72-
CITY OF SHOREWOOD, MINNESOTA Exhibit H-6
LIQUOR FUND
COMBINING SCHEDULE OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2004
Waterford Shorewood
Tonka Bay Center Plaza Totals
CASH FLOWS FROM OPERATING ACTMTIES
Receipts from customers and users $ $ 850,146 $ 1,368,006 $ 2,218,152
Other receipts and payments, net (2,423) 400 (2,023)
Payments to suppliers, contractors and other governments (717,053) (1,113,147) (1,830,200)
Payments to employees (113,556) (144,531) (258,087)
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES (2,423) 19,537 110,728 127,842
CASH FLOWS FROM NON CAPITAL
FINANCING ACTMTIES
Operating transfers out (15,000) (15,000) (30,000)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on investments 5,096 5,262 10,358
INCREASE IN CASH AND CASH EQUIVALENTS 2,673 4,537 100,990 108,200
CASH AND CASH EQUIVALENTS (DEFICIT),
JANUARY 1 244,140 (166,963) 227,993 305,170
CASH AND CASH EQUIVALENTS (DEFICIT),
DECEMBER 31 $ 246,813 $ (162,426) $ 328,983 $ 413,370
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating income (loss) $ $ 1,737 $ 47,014 $ 48,751
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities
Other income (expense) related to operations (2,423) 400 (2,023)
Depreciation 5,152 33,905 39,057
(Increase) decrease in assets:
Accounts receivable (7,445) 30,000 22,555
Inventories 9,074 (2,681 ) 6,393
Prepaid items 1,740 1,740 3,480
Increase (decrease) in liabilities:
Accounts and contracts payable 9,402 830 10,232
Due to other governments (449) (1,303) (1,752)
Salaries and compensated absences payable 326 823 1,149
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES $ (2,423) $ 19,537 $ 110,728 $ 127,842
-73-
CITY OF SHOREWOOD, MINNESOTA
AGENCY FUNDS
COMBINING SCHEDULE OF CHANGES IN ASSETS AND LIABILITIES
FOR THE YEAR ENDED DECEMBER 31,2004
Exhibit G-l
Balance Balance
January 1 Additions Deductions December 31
Developer Escrow Accounts
ASSETS
Cash and temporary investments $ 190,300 $ 58,472 $ 128,107 $ 120,665
LIABILITIES
Accounts payable $ 190,300 $ 58,472 $ 128,107 $ 120,665
-74-
CITY OF SHOREWOOD
SHOREWOOD, MINNESOTA
SECTION III
STATISTICAL SECTION
(UNAUDITED)
Fiscal
Year
2004
General
Government
$ 1,074,028
CITY OF SHOREWOOD, MINNESOTA
GOVERNMENT-WIDE EXPENSES BY FUNCTION
DECEMBER 31, 2004
Public
Safety
Public
Works
$ 2,972,094
$ 2,446,325
-75-
Culture and
Recreation
$ 254,081
Interest on
long-tern
Debt
$ 607,862
Water
$ 591,858
Table 1
Stormwater
Management Municipal Total
Sewer Recycling Utility Liquor Expenditures
$ 735,480 $ 106,933 $ 106,757 $ 2,152,411 $ 11,047,829
-76-
CITY OF SHOREWOOD, MINNESOTA
GOVERNMENT-WIDE REVENUES
DECEMBER 31, 2004
Operating Capital
Fiscal Charges for Grants and Grants and
Year Services Contributions Contributions Taxes
2004 $ 4,922,476 $ 119,594 $ 996,967 $ 3,345,326
-77-
Grants and
Contributions
Not Restricted
to Specific
Programs
$
4,723
Unrestricted
Investment
Earnings
$ 272,016
Table 2
Total
$ 9,661,102
CITY OF SHOREWOOD, MINNESOTA Table 3
GENERAL FUND EXPENDITURES AND OTHER USES BY FUNCTION
LAST TEN FISCAL YEARS
Culture
Fiscal Total General Public Public and Misc.! Debt
Year Expenditures Government Safety Works Recreation Transfers Service
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
1999 2,721,371 851,627 799,515 425,450 114,435 492,800 37,544
2000 2,921,715 989,082 827,483 436,915 135,891 494,800 37,544
2001 3,073,887 996,042 893,070 487,092 126,139 534,000 37,544
2002 3,550,223 1,013,522 1,009,079 429,185 451,793 609,100 37,544
2003 3,340,552 1,049,696 1,300,238 423,534 164,540 365,000 37,544
2004 3,592,497 1,042,921 1,540,921 480,748 166,863 323,500 37,544
-78-
CITY OF SHOREWOOD, MINNESOTA Table 4
GENERAL FUND REVENUE AND OTHER SOURCES BY SOURCE
LAST TEN FISCAL YEARS
Total
General Licenses
Fiscal Fund and Inter- Mise.!
Year Revenues Taxes Pemrits Governmental Fines Transfers
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
1999 2,829,676 1,870,727 221,555 468,969 94,115 174,310
2000 3,104,544 1,938,705 346,086 485,046 76,483 258,224
2001 3,347,776 2,206,525 349,515 497,269 61,243 233,224
2002 3,685,133 2,658,663 229,234 171,783 89,632 535,821
2003 3,729,046 3,071,853 334,424 65,782 88,949 168,038
2004 3,987,248 3,344,442 310,055 73,065 81,841 177,845
-79-
CITY OF SHOREWOOD, MINNESOTA
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
Table 5
(1) Percent
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
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
1999 1,860,507 1,845,191 99.18 22,439 1,867,630 100.3 8
2000 1,935,779 1,922,709 99.32 15,035 1,937,744 100.10
2001 2,208,574 2,188,665 99.10 14,813 2,203,478 99.77
2002 2,763,367 2,707,740 97.99 18,749 2,726,489 98.67
2003 3,156,847 3,131,798 99.21 23,113 3,154,911 99.94
2004 3,420,229 3,390,137 99.12 24,794 3,414,931 99.85
(1) Includes state paid property tax credits.
-80-
CITY OF SHOREWOOD, MlNNESOTA
ESTIMATED MARKET VALUE, ASSESSED VALVA TION, TAX LEVIES AND TAX CAPACITY RATES
(Shown by year of tax collectibility)
2004 2003 2002 2001
Market Value
Total estimated market value $ 1,031,663,400 $ 915,063,800 $ 817,063,900 $ 769,858,900
Tax Capacity
Tax capacity $ 11,055,767 $ 9,741,599 $ 8,690,552 $ 11,344,958
Contribution to fiscal disparities pool (200,062) (184,657) (171,024) (253,832)
Receivable from fiscal disparities pool 396,666 314,412 426,424
Tax increment
Taxable valuation/Total tax capacity $ 11,252,371 $ 9,556,942 $ 8,833,940 $ 11,517,550
Tax levies
General $ 2,907,997 $ 2,851,847 $ 2,763,367 $ 2,208,574
Debt service 512,232 305,000
Total $ 3,420,229 $ 3,156,847 $ 2,763,367 $ 2,208,574
Tax capacity rate
General 25.843 % 29.841 % 31.923 % 19.208 %
Debt service 4.552 3.191
Total 30.396 % 33.032 % 31.923 % 19.208 %
(1) The debt service levy includes $8,508 for 1996 and $8,568 for 1995 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 finance the
improvements within the district and is not reflected in the tax rates above. Table 5 reports the tax rate of this District
-81-
Table 6
(1) (1)
2000 1999 1998 1997 1996 1995
$ 680,244,500 $ 626,118,400 $ 595,451,900 $ 560,500,800 $ 517,194,000 $ 463,409,100
$ 10,346,255 $ 9,663,252 $ 9,897,574 $ 9,901,879 $ 9,115,960 $ 8,045,468
(201,693) (203,942) (214,901) (202,668) (178,279) (185,232)
379,095 342,621 337,116 350,823 332,110 310,337
(312,066) (319,186) (294,512) (166,094) (22,195)
$ 10,523,657 $ 9,489,865 $ 9,700,603 $ 9,755,522 $ 9,103,697 $ 8,148,378
$ 1,935,799 $ 1,860,507 $ 1,778,585 $ 1,703,016 $ 1,573,930 $ 1,491,990
24,783 26,118
$ 1,935,799 $ 1,860,507 $ 1,778,585 $ 1,703,016 $ 1,598,713 $ 1,518,108
18.340 % 19.573 % 18.317 % 17.479 % 17.252 % 18.256 %
0.179 0.215
18.340 % 19.573 % 18.317 % 17.479 % 17.431 % 18.4 71 %
-82-
CITY OF SHOREWOOD, MINNESOTA
PROPERTY TAX CAPACITY RATES - DIRECT AND OVERLAPPING GOVERNMENTS
(PER $1000 OF TAX CAPACITY IN 1995-2004)
Storm
Year (1) Sewer
Taxes School District Watershed District District
Payable City County No. 276 No. 277 No.3 No.4 Misc. No.2
1995 18.471 % 37.454 % 76.139 % 66.441 % 2.332 % 0.762 5.847 % 15.353 %
1996 17.431 37.270 76.340 62.418 (2) 1.533 0.864 6.390 13.956
1997 17.479 35.515 78.420 52.223 1.319 0.860 6.149
1998 18.317 38.386 76.408 59.701 0.660 0.843 6.973
1999 19.573 40.994 69.423 67.286 0.825 0.880 8.043
2000 18.340 39.655 59.565 57.711 0.525 0.866 7.916
2001 19.208 37.624 47.155 40.246 1.363 0.946 7.916
2002 33.032 50.409 20.868 25.504 2.461 1.608 7.386
2003 31.923 50.607 24.215 20.758 1.236 1.616 7.757
2004 30.420 47.324 23.125 14.354 0.768 0.732 7.488
(1) Includes vocational school
(2) Includes market value levy of .077
-83-
Totals
School District No. 276
Watershed
District
No.4
Sewer
District
No.2
Watershed
District
No.3
140.243 %
138.964
138.882
140.744
138.858
126.001
112.966
112.355
115.738
109.125
Watershed
District
No.4
138.673 %
138.295
138.423
140.927
138.913
126.342
112.549
113.303
116.118
109.089
154.026 %
152.251
138.423
140.927
138.913
126.342
112.549
113.303
116.118
109.089
Table 7
School
District
No. 277
Watershed
District
No.3
130.545 %
125.042
112.685
124.037
136.721
124.147
106.057
118.792
112.281
100.354
-84-
CITY OF SHOREWOOD, MINNESOTA Table 8
PRINCIPAL TAXPAYERS
DECEMBER 31,2004
2004 Percent
Tax of
Taxpayer Type of Business Capacity Total
Big Box One, LLC Commercial $ 88,610 12.60 %
Shurgard Storage Centers Ine Commercial 71,530 10.17
Towle Real Estate Commercial 69,450 9.87
Kimberly & Frank Vennes ResidentiaVLakeshore 53,125 7.55
Minnetonka Country Club Commercial 51,210 7.28
Xcel Energy Utility 43,462 6.18
Beacon Bank Commercial 42,710 6.07
The Mary Sue Simon Qprt ResidentiaVLakeshore 40,655 5.78
Waterford Center LLP Commercial 40,250 5.72
Thomas J. & Cynthia J. Redmond ResidentiaVLakeshore 37,813 5.38
Shurgard Storage Centers Inc ResidentiaVCommercial 37,080 5.27
Russell & Luaina Hagen ResidentiaVLakeshore 34,188 4.86
Centerpoint Energy Utility 32,878 4.67
Minnetonka Portable Dredging Co Commercial 32,050 4.56
Lawrence B & Patricia A Reid ResidentiaVLakeshore 28,416 4.04
-85-
CITY OF SHOREWOOD, MINNESOTA Table 9
SPECIAL ASSESSMENT LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
Percent
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
1995 $ 170,157 $ 159,018 93.45 % $ 12,896 $ 171,914 101.03 %
1996 233,219 197,667 84.76 6,660 204,327 87.61
1997 223,274 204,178 91.45 17,545 221,723 99.31
1998 215,817 190,437 88.24 7,089 197,526 91.52
1999 185,174 172,344 93.07 41,897 214,241 115.70
2000 160,137 155,491 97.10 11,813 167,304 104.48
2001 138,271 133,808 96.78 20,195 154,003 111.3 8
2002 94,544 89,965 95.16 6,750 96,715 102.30
2003 79,327 76,286 96.17 7,399 83,685 105.49
2004 79,290 75,963 95.80 3,032 78,995 99.63
-86-
Table 10
CITY OF SHOREWOOD, MINNESOTA
COMPUTATION OF LEGAL DEBT MARGIN
DECEMBER 31, 2003
$1.037.291.500
Market Value
20,745,830
Debt Limit: 2.0% of market value (Note A)
Amount of Debt Applicable to Debt Limit:
Total Bonded Debt
Less, (Note B)
Lease Revenue Bonds
General Obligation Revenue Bonds
Total Debt Applicable to Debt Limit
$ 14,535,000
(12,365,000 )
(2.170.000)
Legal Debt Margin
$ 20.745.830
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)
(5)
(6)
(7)
"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.
(2)
(3)
Warrants or orders having no defInite or fIxed maturity.
Obligations payable wholly from the income from revenue-producing conveniences.
(4)
Obligations issued to create or maintain a permanent improvement revolving futJ.d.
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-
CITY OF SHOREWOOD, MINNESOTA
RA no OF NET BONDED DEBT TO
ASSESSED VALUE AND NET BONDED DEBT PER CAPITA
LAST TEN FISCAL YEARS
Table 11
Ratio of
Less Net Bonded
Amount Debt to
(1) Reserved Assessed Net
Gross for Net Values/ Bonded
Fiscal Estimated Tax Bonded Debt Bonded Tax Debt
Year Population Capacity Debt Service Debt Capacity Per Capita
1995 6,614 $ 8,148,378 $ 3,524,500 $ 1,419,732 $ 2,104,768 .2583:1 $ 318.23
1996 6,794 9,103,697 3,602,500 503,635 3,098,865 .3404:1 456.12
1997 6,889 9,755,522 3,335,000 478,192 2,856,808 .2928:1 414.69
1998 6,955 9,700,603 3,015,000 424,978 2,590,022 .2670: 1 372.40
1999 7,008 9,489,865 2,700,000 376,643 2,323,357 .2448: 1 331.53
2000 7,400 10,218,346 2,380,000 303,858 2,076,142 .2032:1 280.55
2001 7,400 11,344,958 2,070,000 231,421 1,838,579 .1621:1 248.46
2002 7,400 8,690,552 11,720,000 208,801 11,511,199 1.325:1 1,555.57
2003 7,520 9,556,942 12,385,000 205,350 12,179,650 1.339:1 1,619.63
2004 7,685 11,252,371 12,365,000 191,410 12,173,590 (2) 1.101:1 1,584.07
(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.
(2) The City's anticipated debt service obligation is estimated at $6,000,000
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CITY OF SHOREWOOD, MINNESOTA
RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR
GENERAL BONDED DEBT (I) TO TOTAL GENERAL EXPENDITURES*
LAST TEN FISCAL YEARS
Table 12
Total Percent of
Total General Debt Service
Fiscal Debt Fund to General
Year Principal Interest Service Expenditures* Expenditures
1995 $ 231,000 $ 99,823 $ 330,823 $ 2,326,231 14.22 %
1996 767,000 (3) 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
1999 135,000 26,645 161,645 2,721,371 5.93
2000 130,000 18,588 148,588 2,921,715 5.09
2001 125,000 11,777 136,777 3,073,887 4.45
2002 115,000 6,133 121,133 3,550,223 3.41
2003 20,000 1,430 21,430 3,340,552 0.64
2004 20,000 480 20,480 3,268,997 0.63
(1) Excludes G.O. Bonds reported in Enterprise Funds
(3) Principal included bonds called in 1996
* Includes General Fund only
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CITY OF SHOREWOOD, MINNESOTA
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
DECEMBER 31,2004
Table 13
Gross Amount
Bonded of
Debt Used Percentage Net Debt
For Net Debt Net Applicable to Applicable
Calculation Debt District to District
Overlapping Debt
Hennepin County $ 354,885,000 $ 351,089,497 1.14 % $ 4,002,420
Hennepin Suburban Park District 40,010,000 34,250,858 1.49 510,338
School District #276 71,895,000 43,807,584 23.74 10,399,920
School District #277 11,410,000 8,880,486 1.96 174,058
Metropolitan Council 189,945,000 141,938,612 0.51 723,887
Hennepin County RR Authority 47,690,000 47,439,917 1.14 540,815
Total Overlapping Debt $ 715,835,000 $ 627,406,954 2.61 % $ 16,351,438
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CITY OF SHOREWOOD, MINNESOTA
REVENUE BOND COVERAGE
WATER FUND
LAST TEN FISCAL YEARS
(1) Net
Fiscal Gross (2) Revenue Debt Service
Year Revenue Expenses Available Principal Interest
1995 $ 198,566 $ 166,970 $ 31,596 $ 15,000 $ 3,486
1996 272,678 170,485 102,193 15,000 74,473
1997 252,866 180,601 72,265 125,000 120,737
1998 311,925 179,914 132,011 185,000 125,085
1999 454,227 201,325 252,902 180,000 117,642
2000 465,548 186,696 278,852 190,000 109,736
2001 398,555 209,332 189,223 185,000 99,739
2002 287,465 236,575 50,890 185,000 93,280
2003 539,287 192,689 346,598 185,000 82,904
2004 676,287 314,513 361,774 190,000 88,712
(1) Including interest and other income
(2) Excluding depreciation and interest on bonds
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Table 14
Ratio of Net
Revenue to
Total Debt Service
$ 18,486 1.710:1
89,473 1.142:1
245,737 .2940:1
310,085 .4257:1
297,642 .8497:1
299,736 .9303:1
284,739 .6646: 1
278,280 .1828:1
267,904 1.2937:1
278,712 1.2980: 1
CITY OF SHOREWOOD, MINNESOTA Table 15
PROPERTY VALUE AND CONSTRUCTION
LAST TEN FISCAL YEARS
(I)
Commercial (I)
Construction Residential Construction (2)
Fiscal Number Property Value
Year Value of Units Value Commercial Residential Total
1995 $ 2,030,000 40 $ 10,137,210 $ 9,793,000 $ 453,616,100 $ 463,409,100
1996 1,350,000 37 9,393,436 10,562,200 517,983,900 528,546,100
1997 695,000 41 11,825,463 13,034,900 542,674,600 555,709,500
1998 1,317,000 35 9,563,920 14,572,900 580,878,400 595,451,300
1999 39 10,673,841 18,097,200 607,425,000 625,522,200
2000 428,000 71 12,151,100 17,487,100 668,078,300 685,565,400
2001 34 11,451,098 21,243,000 774,394,300 795,637,300
2002 1,335,000 10 3,983,587 23,438,500 891,331,300 914,769,800
2003 4,640,000 27 10,607,279 26,475,900 1,006,984,300 1,033,460,200
2004 25 11,672,144 34,366,000 1,380,763,000 1,415,129,000
(1) City Planning and Inspection Department
(2) County Assessor's Office
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CITY OF SHOREWOOD, MINNESOTA
MISCELLANEOUS STATISTICS
DECEMBER 31,2004
Table 16
Year of incorporation
Form of government
1956
Council-Administrator
Adopted May 14, 1956
January 1
6.0 square miles
Fiscal year begins
Area of City
Population
2000 Census
1990 Census
1980 Census
1970 Census
7,400
5,917
4,646
4,223
Miles of streets and alleys
City streets
Municipal state aid streets
County roads
State highway
41.0
9.8
1.7
2.7
Sewer
Lift stations
Sewer rates - residential
Miles of sewer lines
14
$70.00/quarter
56.2
Number of street lights
177
Building permits issued in 2004
Number of permits
Value
815
$ 21,833,653
Fire protection: Contracted services with Mound and Excelsior Fire District
Police protection: Contracted services with South Lake Minnetonka Police Department
Parks
Number
Acres
6
98.8
Water
Number of connections
Average daily consumption
Miles of water main
Daily capacity - gallons
Number of fire hydrants
Water rate
1,238
418,077 gallons
15.2
4,680,000 gallons
165
$2.95/1 000 gallons
Employees
Regular
Part-time/seasonal
22
14
Total
36
Elections
Registered voters last election
Number of votes cast last election
Percentage of registered voters voting
4,981
4,521
90.8%
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