2012 Comp. Annual Financial Report
CITY OF SHOREWOOD
SHOREWOOD, MINNESOTA
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED
DECEMBER 31, 2012
BILL JOYNES, CITY ADMINISTRATOR
REPORT PREPARED BY
BRUCE DEJONG, FINANCE DIRECTOR/TREASURER
MEMBER OF GOVERNMENT FINANCE OFFICERS ASSOCIATION
OF THE UNITED STATES AND CANADA
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CITY OF SHOREWOOD, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
FOR THE YEAR ENDED DECEMBER 31, 2012
Exhibit Page No.
INTRODUCTORY SECTION
Elected and Appointed Officials 4
Organization Chart 5
Letter of Transmittal 7
Certification of Achievement for Excellence in Financial Reporting 12
FINANCIAL SECTION
Independent Auditor’s Report 15
Management’s Discussion and Analysis 19
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position 1 33
Statement of Activities 2 34
Fund Financial Statements
Governmental Funds
Balance Sheet 3 38
Reconciliation of the Balance Sheet to the Statement of Net Position 4 41
Statement of Revenues, Expenditures and Changes in Fund Balances 5 42
Reconciliation of the Statement of Revenues, Expenditures
and Changes in Fund Balances to the Statement of Activities 6 44
General Fund
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 7 45
Proprietary Funds
Statements of Net Position 8 46
Statements of Revenues, Expenses and Changes in Net Position 9 48
Statements of Cash Flows 10 50
Fiduciary Fund
Statement of Net Position 11 54
Notes to the Financial Statements 55
Combining and Individual Fund Financial Statements and Schedules
Nonmajor Governmental Funds
Combining Balance Sheet A-1 80
Combining Statement of Revenues, Expenditures and Changes in Fund Balances A-2 81
Nonmajor Capital Projects Funds
Combining Balance Sheet B-1 84
Combining Statement of Revenues, Expenditures and Changes in Fund Balances B-2 86
Nonmajor Proprietary Funds
Combining Statements of Net Position C-1 90
Combining Statements of Revenues, Expenses and Changes in Net Position C-2 92
Combining Statements of Cash Flows C-3 94
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual D-1 97
Debt Service Funds
Combining Balance Sheet E-1 102
Combining Schedule of Revenues, Expenditures and Changes in Fund Balances E-2 103
Agency Fund
Combining Schedule of Changes in Assets and Liabilities F-1 104
Summary Financial Report
Revenues and Expenditures for General Operations - Governmental Funds G-1 105
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CITY OF SHOREWOOD, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2012
Exhibit Page No.
STATISTICAL SECTION (UNAUDITED)
Net Position by Component 1 110
Changes in Net Position 2 112
Fund Balances of Governmental Funds 3 116
Changes in Fund Balances of Governmental Funds 4 118
Tax Capacity, Market Value and Estimated Actual Value of Taxable Property 5 120
Property Tax Capacity Rates - Direct and Overlapping Governments 6 122
Principal Taxpayers 7 124
Property Tax Levies and Collections 8 125
Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita 9 126
Ratios of General Bonded Debt Outstanding 10 127
Computation of Direct and Overlapping Debt 11 129
Legal Debt Margin Information 12 130
Pledged-Revenue Coverage 13 132
Demographic and Economic Statistics 14 133
Principal Employers 15 134
Full-Time Equivalent City Government Employees by Function 16 135
Operating Indicators by Function 17 136
Capital Asset Statistics by Function 18 137
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INTRODUCTORY SECTION
CITY OF SHOREWOOD
SHOREWOOD, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2012
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CITY OF SHOREWOOD, MINNESOTA
ELECTED AND APPOINTED OFFICIALS
FOR THE YEAR ENDED DECEMBER 31, 2012
Name Title Term Expires
Christine Lizée Mayor 12/31/12
Richard Woodruff Council Member 12/31/12
Scott Zerby Council Member 12/31/12
Laura Hotvet Council Member 12/31/14
Debbie Siakel Council Member 12/31/14
Name Title
Bill Joynes City Administrator
Bruce DeJong Finance Director/Treasurer
ELECTED
APPOINTED
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City of Shorewood Organizational Chart
Residents
Council
Administrator
Advisory Boards
Plan Commission
Park Commission
Joint Powers Agencies
Police
Fire
LMCD
LMCC
Plan/Zone DirFinance Dir EngineerDeputy Clerk Pub Works Dir
Planning
Asst
Contracted Services
IT/Phones
Mound Fire
Assessor
Recycling
Community Center
Attorney
Bldg
Official
Recep-
tionist
Comm
Coord
Park/Rec
Coord
Utiliites
Parks
Maint.
Streets
Sr
Acct
Clerk
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June 24, 2013
Honorable Mayor and Members of the City Council,
City of Shorewood, Minnesota
Mayor and City Council Members:
The Comprehensive Annual Financial Report of the City of Shorewood, Minnesota, for the fiscal year
ended December 31, 2012, is hereby submitted. The report was prepared in accordance with
accounting principles generally accepted in the United States of America (GAAP) as established by
the Governmental Accounting Standards Board and meets the requirements of the Office of State
Auditor.
The report consists of management’s representations concerning the finances of the City.
Consequently, management assumes full responsibility for the completeness and reliability of the
information presented in this report. To provide a reasonable basis for making these representations,
management of the City has established internal controls designed to protect the City’s assets from
loss, theft, or misuse, and to provide sufficient information for the preparation of these financial
statements in conformity with GAAP. Because the cost of internal controls should not outweigh the
benefits, the City’s internal controls have been designed to provide reasonable, rather than absolute,
assurance that the financial statements are free of any material misstatements. As management, we
assert that to the best of our knowledge and belief this financial report is complete and reliable in all
material respects.
The City of Shorewood’s financial statements have been audited by the firm of Abdo, Eick &
Meyers, LLP, Certified Public Accountants. The goal of the audit was to provide reasonable
assurance that the financial statements of the City for the year ended December 31, 2012, are free of
material misstatement. The independent audit involved examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates used by management; and evaluating the overall financial
statement presentation. Based upon the audit, the independent auditor concluded that there was
reasonable basis for rendering an unqualified opinion that the City’s financial statements, for the year
ended December 31, 2012, are fairly presented in conformity with GAAP. The independent auditor's
report is presented at the front of the financial section of this report.
GAAP requires that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statements in the form of Management’s Discussion and Analysis
(MD&A). The City’s MD&A can be found in the financial section of this report immediately
following the independent auditor’s report.
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City Profile
The City of Shorewood is a suburban community located southwest of the Twin Cities on the
southern shore of Lake Minnetonka, a setting of rolling hills and picturesque lakes and creeks.
Shorewood has a convenient location, a comprehensive system of highways, and is a short distance
from downtown Minneapolis and St. Paul and the Minneapolis-St. Paul International Airport. 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
7,312 as of 2011. The City, which is currently 95% developed, continues to experience some growth
in its residential base but, because of the limited availability of large tracts of land, this growth will
come slowly through small developments such as the Ashland Woods subdivision.
Incorporated in 1956 as a village, 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-member council, 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 Administrator/Clerk is responsible for overseeing the day-
to-day operations of the government, and to assign responsibility to City staff for the efficient and
effective delivery of City services.
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.
The City provides its residents and businesses with a broad range of municipal services consisting of
police and fire protection, street maintenance, recreation programs, park maintenance, community and
economic development, and administrative services, including building inspections. During 2012, the
City operated four enterprises: a water utility, sanitary sewer, recycling, and storm water management
utilities.
Economic Conditions and Outlook
Governance
The City Council, in its leadership role, has effectively established a focus for government in
Shorewood and has established overall goals and expectations for the City. The Council’s calendar
consists of three phases. The first phase is planning. It includes review of the previous year’s work
plan and identifies goals and priorities for the next twelve months.
The second phase is capital finance planning; each year the ten-year Capital Improvement Program is
reviewed and updated based upon priorities established in the first phase. Those projects are then
incorporated into a financial management plan that includes both operating and capital spending plans
to determine the overall feasibility of the plans and the effect of that spending on fund balances and
tax levies.
The third phase is budgeting; the annual operating budget is developed based on decisions made in
the first two phases. The annual budget serves as the foundation of the City of Shorewood’s financial
planning and control. Departments submit budget requests to Finance in June and the City
Administrator presents the proposed budget to the City Council for review prior to September 15th of
each year. Budget work-sessions are held with the City Council in July and August. The City
Council holds a Truth-in-Taxation public hearing on the proposed budget and adopts the final budget
in December each year.
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The budget is prepared by fund and function. The City’s department directors develop their budgets,
with subsequent review and input from the City Administrator and Finance Director. Any changes in
the overall budget must be approved by the City Council.
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 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 City of Shorewood, along with the cities of Deephaven, Excelsior, Greenwood, and Tonka Bay,
has been a member of the Excelsior Fire District since 2000. The Excelsior Fire District is a joint
powers organization. A combined police and fire public safety building that serves the South Lake
Minnetonka Area cities was completed in late 2003.
The City contracts with Hennepin County for property assessment services. The Hennepin County
Assessor analyzes property sales information, sets taxable values, and handles the valuation appeal
process.
Debt Administration
As of December 31, 2012, the City's debt outstanding totaled $12,015,000. Of this total, $2,500,000
is General Obligation Water Revenue bonds issued in 1996, 2005, and 2006. The proceeds from
these bonds financed water system extensions and improvements and will be repaid from special
assessments and water rate revenues.
The remaining outstanding debt balance of $9,515,000 is EDA Lease Revenue Advance Refunding
bonds issued in 2007 for the public safety buildings and EDA Lease Revenue bonds issued in 2008
for remodeling City Hall. These bonds will be repaid from lease payments from the Excelsior Fire
District, South Lake Minnetonka Police Department, and the City of Shorewood.
The City of Shorewood’s bond rating was upgraded to Aa2 from Aa3 in July, 2008, by Moody’s
Investors Service. At that time, Moody’s also upgraded the Shorewood Economic Development
Authority (EDA) bond rating to Aa3 from A1, based upon the City’s pledge to make the lease
payments subject to annual appropriation in the City’s operating budget, and the fact that a city hall
facility is an essential part of a municipality.
Long-term Financial Planning
The City has implemented various financial/budgetary policies to guide the City Council and staff
when making financial decisions to ensure the long-term stability and flexibility of City finances and
operations. These policies include the following:
The original budget should be balanced with revenues equal to expenditures.
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By policy, the City Council has set the fund balance level in the General Fund 55-60% of the
next years’ expenditure budget. This policy ensures the long-term economic stability of the
organization by providing adequate working capital given the periodic nature of tax receipts
and by providing for unexpected shortfalls or emergencies. In accordance with this policy,
the City Council may use up to 3% of any General Fund reserves in excess of 60% to reduce
the budgeted tax levy, or for one-time projects, or transfer to any of the city’s capital funds.
The City will maintain a ten-year capital improvement plan to provide for capital asset
acquisition, maintenance, replacement, and retirement.
The City will continue to accumulate resources for future capital equipment and improvement
projects with operating transfers to various capital project funds in 2013. Budgeted transfers
for capital improvement purposes during 2012 were $907,800.
Major Initiatives
The City implemented a 10 year Financial Management Plan. This is a comprehensive review of all
funds of the city on both an operational and capital spending basis. It compares spending plans
against revenue sources to determine how planned outlays compare against estimated revenues and
what additional resources may be necessary to accomplish long-term balanced budgets.
Other initiatives during the year included the following:
The City of Shorewood operated the Southshore Community Center for the entire year of
2012. The Center was built in the late 1990s as a joint venture by the following five Lake
Minnetonka Area Cities: Shorewood, Excelsior, Tonka Bay, Deephaven, and Greenwood.
Until recently, the Center was leased to an organization that emphasized senior programming.
Many of the senior-oriented programs still remain during the day, and these are a critical
component, but Center renovations were made to attract new renters, including businesses,
community education classes, and wedding, birthday, and graduation parties. Shorewood has
committed to operate the center through December, 2015 by the renewal of an automatic
three year extension. New programs have been developed to attract all ages. The Southshore
Center’s long range options are being evaluated by a committee of the South Shore Senior
Partners and other interested parties.
Certificate of Achievement
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, 2011.
The Certificate of Achievement is a prestigious national award recognizing conformance with the
highest standards for preparation of state and local government financial reports. In order to be
awarded a Certificate of Achievement, a government unit must publish an easily readable and
efficiently organized comprehensive annual financial report whose contents conform to program
standards. Such comprehensive annual financial report must satisfy both generally accepted
accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year. The City of Shorewood has received a
Certificate of Achievement for the past eighteen consecutive years. We believe our current report
continues to conform to the Certificate of Achievement program requirements, and we are submitting
it to the GFOA to determine its eligibility for another certificate.
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FINANCIAL SECTION
CITY OF SHOREWOOD
SHOREWOOD, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2012
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INDEPENDENT AUDITOR’S REPORT
Honorable Mayor and City Council
City of Shorewood, Minnesota
Report on the Financial Statements
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, 2012, which collectively comprise the City’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting
principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal
control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due
to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. The prior year comparative information has
been derived from the City’s 2011 financial statements and, in our report dated August 20, 2012 we express unqualified opinions on
the respective proprietary fund financial statements. We did not audit the financial statements of the South Lake Minnetonka Police
Department, a joint venture, which is disclosed in Note 5A in the notes to the financial statements. Those statements were audited by
other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the South Lake
Minnetonka Police Department, is based solely on the report of the other auditors. 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 financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the
City’s preparation and fair presentation of the financial statements in order to design audit procedures that ar e appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordi ngly, we
express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
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Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial 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, 2012, and the respective changes in financial position and, where applicable, cash flows thereof and the budgetary
comparison for the General fund for the year then ended in conformity with accounting principles generally accepted in the United
States of America.
Other Matters
Change in Accounting Standards
As described in the Note 8 to the basic financial statements, the City adopted the provisions of Governmental Accounting Standards
Board (GASB) Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net
Position and Statement No. 65, Items Previously Reported as Assets and Liabilities, for the year ended December 31, 2012. Adoption
of the provisions of these statements results in significant change to the classifications of the components of the financial statements.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysi s
starting on page 19 be presented to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the
United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing
the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowl edge we
obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information
because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information in Relation to the Financial Statements as a Whole
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic
financial statements as a whole. The introductory section, combining and individual fund financial statements and schedules, and
statistical section are presented for purposes of additional analysis and are not a required part of the financial statements . The
combining and individual fund financial statements and schedules are the responsibility of management and were derived from and
relate directly to the underlying accounting and other records used to prepare the financial statements . The information has been
subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures , including
comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial
statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the
financial statements as a whole. The introductory section and statistical sections have not been subjected to the auditing procedures
applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.
June 24, 2013 ABDO, EICK & MEYERS, LLP
Minneapolis, Minnesota Certified Public Accountants
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Management’s Discussion and Analysis
As management of the City of Shorewood, Minnesota, (the City), we offer readers of the City’s financial statements this narra tive
overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2012.
Financial Highlights
The assets of the City exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by
$31,108,781 (net position). Of this amount, $16,127,543 (unrestricted net position) may be used to meet the City’s ongoing
obligations to residents and creditors.
The City’s total net position decreased $733,239, due primarily to losses in the Sewer and Stormwater Management funds
and depreciation on infrastructure and equipment.
As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of
$8,085,567 , an increase of $187,305 in comparison with the prior year. This increase is primarily the result of current
expenditures in nonmajor governmental funds. Approximately 43.3 percent of this total amount, $3,499,143, is unassigned
and available for spending at the City’s discretion.
At the end of the current fiscal year, unassigned fund balance for the General fund was $3,574,468, or 83.9 percent of total
2012 budgeted expenditures. The City has a policy to maintain a General fund working capital balance of 55.0 - 60.0 percent
of expenditures and transfers.
The City’s total debt decreased $833,020, or 6.4 percent during the current fiscal year. The key factor in this decrease was
annual principal and interest payments.
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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 ba sic 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 financial statements themselves.
The financial statements also include notes that explain some of the information in the financial statements and provide more detailed
data. The statements are followed by a section of combining and individual fund financial statements and schedules that further
explains and supports the information in the financial statements. Figure 1 illustrates 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
Government-
wide Financial
Statements
Fund
Financial
Statements
Notes to the
Financial
Statements
Summary Detail
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Figure 2 summarizes the major features of the City’s financial 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 explai ns 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
Statements
Governmental Funds Proprietary Funds
Scope Entire City government
(except fiduciary funds) and
the City’s component units
The activities of the City that
are not proprietary or
fiduciary, such as police, fire
and parks
Activities the City operates
similar to private businesses,
such as the water and sewer
system
Required financial
statements
Statement of Net
Position
Statement of Activities
Balance Sheet
Statement of Revenues,
Expenditures, and
Changes in Fund
Balances
Statements of Net
Position
Statements of Revenues,
Expenses and Changes in
Fund Net Position
Statements of Cash
Flows
Accounting Basis and
measurement focus
Accrual accounting and
economic resources focus
Modified accrual accounting
and current financial
resources focus
Accrual accounting and
economic resources focus
Type of asset/liability
information
All assets and liabilities, both
financial and capital, and
short-term and long-term
Only assets expected to be
used up and liabilities that
come due during the year or
soon thereafter; no capital
assets included
All assets and liabilities, both
financial and capital, and
short-term and long-term
Type of deferred
outflows/inflows of
resources information
All deferred
outflows/inflows of
resources, regardless of
when cash is received or
paid.
Only deferred outflows of
resources expected to be
used up and deferred inflows
of resources that come due
during the year of son
thereafter; no capital assets
included
All deferred
outflows/inflows of
resources, regardless of
when cash is received or paid
Type of in flow/out flow
information
All revenues and expenses
during year, regardless of
when cash is received or paid
Revenues for which cash is
received during or soon after
the end of the year;
expenditures when goods or
services have been received
and payment is due during
the year or soon thereafter
All revenues and expenses
during the year, regardless of
when cash is received or paid
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 position presents information on all of the City’s assets and liabilities, with the difference between the two
reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial
position of the City is improving or deteriorating.
The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All
changes in net position 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 financial 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 interest on long-term debt. The business-type activities of the
City include water, sewer, recycling, and stormwater management utility.
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The government-wide financial statements include not only the City itself (known as the primary government), but also a legally
separate Economic Development Authority (EDA) for which the City is financially accountable. The EDA, 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 start on page 33 of this report.
Fund financial statements. A fund 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 financial statements. However, unlike the government-wide financial 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 financial 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 financing
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 15 individual governmental 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, Debt Service, and
Community Infrastructure funds, which are considered to be major funds. Data from the other eight 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 financial statements start on page 38 of this report.
Proprietary funds. The City maintains one type of proprietary fund. Enterprise funds are used to report the same functions presented
as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water, sewer,
recycling, and stormwater management utility.
Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The
proprietary fund financial 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 start on page 46 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 financial 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 financial statements can be found on page 54 of this report.
Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data
provided in the government-wide and fund financial statements. The notes to the financial statements start on page 55 of this report.
Other information. The combining statements referred to earlier in connection with nonmajor governmental funds are presented
following the notes to the financial statements. Combined and individual fund financial statements and schedules starts on page 80 of
this report.
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Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the c ase of the City,
assets exceeded liabilities and deferred inflows of resources by $31,108,781 at the close of the most recent fiscal year.
Of the City’s net position 48.2 percent reflects its investment in capital assets (e.g., land, buildings, machinery and equipment), less
any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of
related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital
assets themselves cannot be used to liquidate these liabilities.
City of Shorewood’s Summary of Net Position
Increase RestatedIncrease
20122011 (Decrease)20122011 (Decrease)
Assets
Cash and
temporary investments7,593,686$ 7,596,833$ (3,147)$ 7,452,376$ 7,482,041$ (29,665)$
Cash with fiscal agent - 6,504 (6,504) 235,245 166,957 68,288
Receivables 8,997,619 9,486,472 (488,853) 615,851 636,382 (20,531)
Prepaids 50,000 48,000 2,000 - - -
Land held for resale 150,068 150,068 - - - -
Capital assets 9,627,162 10,413,669 (786,507) 8,994,076 9,350,613 (356,537)
Total assets 26,418,535 27,701,546 (1,283,011) 17,297,548 17,635,993 (338,445)
Liabilities
Noncurrent liabilities 9,696,762 10,354,782 (658,020) 2,500,000 2,675,000 (175,000)
Other liabilities 255,241 313,590 (58,349) 155,299 152,147 3,152
Total liabilities 9,952,003 10,668,372 (716,369) 2,655,299 2,827,147 (171,848)
Net position
Net investment in capital assets8,487,162 9,223,669 (736,507) 6,494,076 6,675,613 (181,537)
Unrestricted 7,979,370 7,809,505 169,865 8,148,173 8,133,233 14,940
Total net position 16,466,532$ 17,033,174$ (566,642)$ 14,642,249$ 14,808,846$ (166,597)$
Governmental Activities Business-type Activities
The balance of unrestricted net position is $16,127,543. This may be used to meet the City’s ongoing obligations to citizens and
creditors.
-23-
Governmental activities. Governmental activities decreased the City’s net position by $566,642. Key elements of this increase are
as follows:
City of Shorewood’s Changes in Net Position
Increase RestatedIncrease
20122011 (Decrease)20122011 (Decrease)
Revenues
Program revenues
Charges for services 832,626$ 732,114$ 100,512$ 1,940,551$ 1,840,253$ 100,298$
Operating grants
and contributions 102,959 113,717 (10,758) 23,007 33,586 (10,579)
Capital grants
and contributions - - - 22,400 15,000 7,400
General revenues
Property taxes 4,761,213 4,733,948 27,265 - - -
Grants and contributions
not restricted to
specific programs 6,019 4,751 1,268 - - -
Unrestricted investment
earnings 61,584 56,705 4,879 64,135 62,345 1,790
Gain on sale of capital assets - 28,500 (28,500) - - -
Total revenues 5,764,401 5,669,735 94,666 2,050,093 1,951,184 98,909
Expenses
General government 1,331,286 1,405,791 (74,505) - - -
Public safety 1,947,868 1,960,894 (13,026) - - -
Public works 2,162,123 2,031,136 130,987 - - -
Culture and recreation 460,879 412,257 48,622 - - -
Interest on long-term debt 428,887 438,088 (9,201) - - -
Water - - - 689,205 682,098 7,107
Sewer - - - 1,065,926 1,151,626 (85,700)
Recycling - - - 187,713 174,857 12,856
Stormwater management utility - - - 273,846 233,035 40,811
Total expenses 6,331,043 6,248,166 82,877 2,216,690 2,241,616 (24,926)
Increase (decrease) in net position
before transfers (566,642) (578,431) 11,789 (166,597) (290,432) 123,835
Transfers - - - - - -
Change in net position (566,642) (578,431) 11,789 (166,597) (290,432) 123,835
Net position, January 1 17,033,174 17,611,605 (578,431) 14,808,846 15,099,278 (290,432)
Net position, December 3116,466,532$ 17,033,174$ (566,642)$ 14,642,249$ 14,808,846$ (166,597)$
Governmental Activities Business-type Activities
-24-
The following graph depicts various governmental activities and shows the revenue and expenses directly related to those activities.
Expenses and Program Revenues - Governmental Activities
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
General government Public safety Public works Culture and
recreation
Interest on long-term
debt
Expenses Program revenues
Revenues by Source - Governmental Activities
Charges for
services
14.4%
Operating grants
and contributions
1.8%
Property taxes
82.6%
Grants and
contributions not
restricted to
specific programs
1.1%
Unrestricted
investment earnings
0.1%
-25-
Business-type activities. Business-type activities decreased the City’s net position by $166,597.
Expenses and Program Revenues - Business-type Activities
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
Water Sewer Recycling Stormwater management
utility
Expenses Program revenues
Revenues by Source - Business-type Activities
Charges for
services
94.7%
Operating grants
and contributions
1.1%
Capital grants and
contributions
1.1%
Unrestricted
investment
earnings
3.1%
-26-
Financial Analysis of the Government’s Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
Governmental funds. 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, unassigned
fund balance may serve as a useful measure of a 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 $8,085,567, a
increase of $187,305 in comparison with the prior year. Approximately 44 percent of this total amount, $3,499,143 constitutes
unassigned fund balance, which is available for spending at the City’s discretion. The remaining fund balance is made up of the
following: 1) Nonspendable ($200,068), 2) Restricted ($17,700), and 3) Assigned ($4,368,656).
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
$3,624,468. As a measure of the General fund’s liquidity, it may be useful to compare both u nassigned fund balance and total fund
balance to total fund expenditures. Total fund balance represents 83.9 percent of same year fund expenditures.
The fund balance of the City’s General fund increased $136,241 during the current fiscal year.
The Debt Service fund has a total fund balance of $17,700, all of which is restricted for the payment of debt service. The decrease in
fund balance of $12,739 was in line with the City’s debt service financing plan.
The Community Infrastructure fund has a fund balance of $1,842,330. The fund balance increased $12,852 during the current fiscal
year due to an excess of revenues over expenditures.
The Street Reconstruction fund has a fund balance of $1,760,337. The fund balance increased by $278,885 during the current fiscal
year due to a transfer in of $700,000, which exceeded expenditures.
Proprietary funds. The City’s proprietary funds provide the same type of information found in the government -wide financial
statements, but in more detail. Unrestricted net position of the enterprise funds at the end of the year amounted to $8,148,173. The
total decrease in net position for the funds was $166,597. Other factors concerning the finances 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 called for the planned use of General fund reserves in
the amount of $87,435. Revenues were over budget by $220,367, and expenditures were under budget by $56,487. The actual
amounts were different from the final budget amounts because of the following:
The largest positive variances in revenue were related to fiscal disparities and refunds and reimbursements, which were over
budget by $113,410 and $67,032.
There were seven departments that experienced a negative budget variance. The largest negative expenditure variance was
related to Administrative which was $96,788 over budget due to personal services and other services and charges.
-27-
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, 2012,
amounts to $18,621,238 (net of accumulated depreciation). This investment in capital assets includes land, structures, improvements,
machinery and equipment, park facilities, and roads. Major capital asset events during the current fiscal year included the following:
Freightliner dump truck
Asphalt roller
Case skid steer tractor
Covington Road sediment trap
Smithtown sewer reconstruction
Additional information on the City’s capital assets can be found in Note 3 B starting on page 66 of this report.
City of Shorewood’s Capital Assets
(net of depreciation)
Increase Increase
20122011 (Decrease)20122011 (Decrease)
Land 741,826$ 741,826$ -$ 434,113$ 434,113$ -$
Construction in progress - 52,145 (52,145) 63,931 174,603 (110,672)
Buildings 2,339,814 2,424,026 (84,212) - - -
Improvements other than buildings325,942 365,799 (39,857) - - -
Machinery and equipment 714,285 652,216 62,069 4,331 9,249 (4,918)
Infrastructure 5,505,295 6,177,657 (672,362) 8,491,701 8,732,648 (240,947)
Total 9,627,162$ 10,413,669$ (786,507)$ 8,994,076$ 9,350,613$ (356,537)$
Governmental Activities Business-type Activities
Long-term debt. At the end of the current fiscal year, the City had total bonded debt outstanding of $12,015,000. Of this amount,
$9,515,000 is lease revenue bonds and $2,500,000 is general obligation revenue bonds. While all of the City’s bonds have dedicated
revenue streams pledged to repayment, the general obligation revenue bonds are all backed by the full faith and credit of the City.
City of Shorewood’s Outstanding Debt
Increase Increase
20122011 (Decrease)20122011 (Decrease)
General obligation
revenue bonds -$ -$ -$ 2,500,000$ 2,675,000$ (175,000)$
Lease revenue bonds 9,515,000 10,170,000 (655,000) - - -
Compensated absences payable181,762 184,782 (3,020) - - -
Total 9,696,762$ 10,354,782$ (658,020)$ 2,500,000$ 2,675,000$ (175,000)$
Governmental Activities Business-type Activities
Minnesota statutes limit the amount of net general obligation debt a City may issue to 3 percent of the market value of taxable
property within the City. Net debt is debt payable solely from ad valorem taxes. Additional information on the City’s long -term debt
can be found in Note 3D starting on page 68 of this report.
-28-
Economic Factors and Next Year’s Budgets and Rates
The City is experiencing a decrease in property values on higher value properties, but lower value home prices seem to be
stabilizing.
Unemployment trends in the region compare favorably to national indices.
The 2013 budget was developed to continue using General fund balance to bring the overall balance down to the policy level
while continuing to provide the same basic service levels to the public.
Property tax revenues for the 2013 budget were unchanged from the 2012 budget.
All of these factors were taken into account in preparing the City’s budget for the 2013 fiscal year.
During the 2012 fiscal year, the fund balance in the General fund increased by $136,241. This City budgeted a use of fund balance of
$87,435. This planned use of fund balance in accordance with the Fund Balance Policy adopted by the City Council. Other possible
uses of available fund balance over the policy level include one-time projects, and transfers to capital project funds as determined by
the City Council.
Requests for Information
This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the City’s
finances. Questions concerning any of the information provided in this report or requests for additional financial information should
be addressed to the City of Shorewood, 5755 Country Club Road, Shorewood, Minnesota 55331.
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INTENTIONALLY
-30-
GOVERNMENT-WIDE FINANCIAL STATEMENTS
CITY OF SHOREWOOD
SHOREWOOD, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2012
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INTENTIONALLY
-32-
Exhibit 1CITY OF SHOREWOOD, MINNESOTA
STATEMENT OF NET POSITION
DECEMBER 31, 2012
Governmental Business-type
Activities Activities Total
ASSETS
Cash and temporary investments 7,593,686$ 7,452,376$ 15,046,062$
Cash with fiscal agent - 235,245 235,245
Receivables
Accrued interest 174,877 31,036 205,913
Property taxes 118,582 - 118,582
Accounts 45,779 423,273 469,052
Special assessments 2,210 161,542 163,752
Lease 8,652,892 - 8,652,892
Due from other governments 3,279 - 3,279
Prepaid items 50,000 - 50,000
Land held for resale 150,068 - 150,068
Capital assets
Nondepreciable assets 741,826 498,044 1,239,870
Depreciable capital assets, net 8,885,336 8,496,032 17,381,368
TOTAL ASSETS 26,418,535 17,297,548 43,716,083
LIABILITIES
Accounts and contracts payable 104,035 104,322 208,357
Due to other governments 1,518 1,157 2,675
Accrued interest payable 149,688 49,820 199,508
Noncurrent liabilities
Due within one year 822,969 185,000 1,007,969
Due in more than one year 8,873,793 2,315,000 11,188,793
TOTAL LIABILITIES 9,952,003 2,655,299 12,607,302
NET POSITION
Net investment in capital assets 8,487,162 6,494,076 14,981,238
Unrestricted 7,979,370 8,148,173 16,127,543
TOTAL NET POSITION 16,466,532$ 14,642,249$ 31,108,781$
The notes to the financial statements are an integral part of this statement.
-33-
CITY OF SHOREWOOD, MINNESOTA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2012
Operating Capital Grants
Charges for Grants and and
Expenses Services Contributions Contributions
Governmental activities
General government 1,331,286$ 144,883$ 300$ -$
Public safety 1,947,868 604,400 1,328 -
Public works 2,162,123 4,137 68,755 -
Culture and recreation 460,879 79,206 32,576 -
Interest on long-term debt 428,887 - - -
Total governmental activities 6,331,043 832,626 102,959 -
Business-type activities
Water 689,205 757,395 - 20,000
Sewer 1,065,926 831,640 - 2,400
Recycling 187,713 157,585 23,007 -
Stormwater management utility 273,846 193,931 - -
Total business-type activities 2,216,690 1,940,551 23,007 22,400
Total 8,547,733$ 2,773,177$ 125,966$ 22,400$
General revenues
Taxes
Property taxes, levied for general purposes
Grants and contributions not restricted to specific programs
Unrestricted investment earnings
Total general revenues and transfers
Change in net position
Net position as restated, January 1
Net position, December 31
The notes to the financial statements are an integral part of this statement.
Functions/Programs
Program Revenues
-34-
Exhibit 2
Governmental Business-type
Activities Activities Total
(1,186,103)$ -$ (1,186,103)$
(1,342,140) - (1,342,140)
(2,089,231) - (2,089,231)
(349,097) - (349,097)
(428,887) - (428,887)
(5,395,458) - (5,395,458)
- 88,190 88,190
- (231,886) (231,886)
- (7,121) (7,121)
- (79,915) (79,915)
- (230,732) (230,732)
(5,395,458) (230,732) (5,626,190)
4,761,213 - 4,761,213
6,019 - 6,019
61,584 64,135 125,719
4,828,816 64,135 4,892,951
(566,642) (166,597) (733,239)
17,033,174 14,808,846 31,842,020
16,466,532$ 14,642,249$ 31,108,781$
Net (Expense) Revenue and Changes in Net Position
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INTENTIONALLY
-36-
FUND FINANCIAL STATEMENTS
CITY OF SHOREWOOD
SHOREWOOD, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2012
-37-
CITY OF SHOREWOOD, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2012
Debt Street
General Service Reconstruction
ASSETS
Cash and temporary investments 3,517,917$ 19,925$ 1,755,991$
Receivables
Accrued interest 13,432 - 5,757
Taxes 118,582 - -
Accounts 45,779 - -
Special assessments 2,210 - -
Lease - 8,375,000 -
Due from other governments 3,279 - -
Due from other funds 37,611 - -
Prepaid items 50,000 - -
Land held for resale - - -
TOTAL ASSETS 3,788,810$ 8,394,925$ 1,761,748$
LIABILITIES
Accounts and contracts payable 83,055$ 2,225$ 1,411$
Due to other governments 1,518 - -
Due to other funds - - -
TOTAL LIABILITIES 84,573 2,225 1,411
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - property taxes 77,559 - -
Unavailable revenue - lease receivable - 8,375,000 -
Unavailable revenue - special assessments 2,210 - -
TOTAL DEFERRED INFLOWS OF RESOURCES 79,769 8,375,000 -
FUND BALANCES
Nonspendable
Prepaid items 50,000 - -
Land held for resale - - -
Restricted for debt service - 17,700 -
Assigned to
Street reconstruction - - 1,760,337
Community infrastructure - - -
Capital outlay - - -
Unassigned 3,574,468 - -
TOTAL FUND BALANCES 3,624,468 17,700 1,760,337
TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES
AND FUND BALANCES 3,788,810$ 8,394,925$ 1,761,748$
The notes to the financial statements are an integral part of this statement.
-38-
Exhibit 3
Other Total
Community Governmental Governmental
Infrastructure Funds Funds
1,663,908$ 635,945$ 7,593,686$
6,960 3,244 29,393
- - 118,582
- - 45,779
- - 2,210
- 277,892 8,652,892
- - 3,279
21,394 - 59,005
- - 50,000
150,068 - 150,068
1,842,330$ 917,081$ 16,704,894$
-$ 17,344$ 104,035$
- - 1,518
- 59,005 59,005
- 76,349 164,558
- - 77,559
- - 8,375,000
- - 2,210
- - 8,454,769
- - 50,000
150,068 - 150,068
- - 17,700
- - 1,760,337
1,692,262 - 1,692,262
- 916,057 916,057
- (75,325) 3,499,143
1,842,330 840,732 8,085,567
1,842,330$ 917,081$ 16,704,894$
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INTENTIONALLY
-40-
Exhibit 4CITY OF SHOREWOOD, MINNESOTA
RECONCILIATION OF THE BALANCE SHEET
TO THE STATEMENT OF NET POSITION
GOVERNMENTAL FUNDS
DECEMBER 31, 2012
Total fund balances - governmental 8,085,567$
Amounts reported for the governmental activities in the statement
of net position are different because
Capital assets used in governmental activities are not financial
resources and therefore are not reported as assets in governmental funds.
Cost of capital assets 35,772,472
Less: accumulated depreciation (26,145,310)
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 (9,515,000)
Compensated absences payable (181,762)
Some receivables are not available soon enough to pay for the current period's expenditures,
and therefore are reported as unavailable revenue in the funds.
Interest on lease receivable 145,484
Delinquent taxes receivable 77,559
Special assessments receivable 2,210
Leases receivable 8,375,000
Governmental funds do not report a liability for accrued interest until
due and payable.(149,688)
Total net position - governmental activities 16,466,532$
The notes to the financial statements are an integral part of this statement.
-41-
CITY OF SHOREWOOD, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2012
Debt Street
General Service Reconstruction
REVENUES
Taxes 4,783,939$ -$ -$
Licenses and permits 175,087 - -
Intergovernmental 76,102 - -
Charges for services 61,611 - -
Fines and forfeitures 66,230 - -
Interest on investments 25,602 746 11,366
Miscellaneous 117,824 978,744 -
TOTAL REVENUES 5,306,395 979,490 11,366
EXPENDITURES
Current
General government 1,282,580 - -
Public safety 1,445,149 - -
Public works 823,234 - -
Culture and recreation 205,542 - -
Capital outlay
General government 2,811 - -
Public safety 503,038 - -
Public works - - 432,511
Culture and recreation - - -
Debt service
Principal - 655,000 -
Interest and service charges - 439,429 -
TOTAL EXPENDITURES 4,262,354 1,094,429 432,511
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 1,044,041 (114,939) (421,145)
OTHER FINANCING SOURCES (USES)
Transfers in - 102,200 700,000
Transfers out (907,800) - -
TOTAL OTHER FINANCING SOURCES (USES)(907,800) 102,200 700,000
NET CHANGE IN FUND BALANCES 136,241 (12,739) 278,855
FUND BALANCES, JANUARY 1 3,488,227 30,439 1,481,482
FUND BALANCES, DECEMBER 31 3,624,468$ 17,700$ 1,760,337$
The notes to the financial statements are an integral part of this statement.
-42-
Exhibit 5
Other Total
Community Governmental Governmental
Infrastructure Funds Funds
-$ -$ 4,783,939$
- - 175,087
- - 76,102
- 60,014 121,625
- - 66,230
14,232 9,638 61,584
- 19,268 1,115,836
14,232 88,920 6,400,403
- 6,124 1,288,704
- - 1,445,149
- - 823,234
- 125,982 331,524
- - 2,811
- - 503,038
- 222,614 655,125
1,380 67,704 69,084
- - 655,000
- - 439,429
1,380 422,424 6,213,098
12,852 (333,504) 187,305
- 368,016 1,170,216
- (262,416) (1,170,216)
- 105,600 -
12,852 (227,904) 187,305
1,829,478 1,068,636 7,898,262
1,842,330$ 840,732$ 8,085,567$
-43-
Exhibit 6CITY OF SHOREWOOD, MINNESOTA
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, 2012
Total net change in fund balances - governmental funds 187,305$
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 230,309
Depreciation expense (1,016,816)
The issuance of long-term debt provides current financial resources to governmental funds, while
the repayment of principal of long-term debt consumes the current financial resources of governmental
funds. Neither transaction, however, has any effect on net position. Also, governmental funds report
the effect of premiums, discounts and similar items when debt is first issued,
whereas these amounts are deferred and amortized in the statement of activities.
Principal repayments 655,000
Interest on long-term debt in the statement of activities differs from the amount reported in the
governmental funds because interest is recognized as an expenditure in the funds when it is due,
and thus requires the use of current financial resources. In the statement of activities, however
interest expense is recognized as the interest accrues, regardless of when it is due.10,542
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.
Delinquent taxes (22,726)
Special assessments 2,210
Leases (615,486)
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.
Compensated absences 3,020
Change in net position - governmental activities (566,642)$
The notes to the financial statements are an integral part of this statement.
-44-
Exhibit 7CITY OF SHOREWOOD, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED DECEMBER 31, 2012
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Taxes 4,763,319$ 4,763,319$ 4,783,939$ 20,620$
Licenses and permits 109,200 109,200 175,087 65,887
Intergovernmental 70,401 70,401 76,102 5,701
Charges for services 35,075 35,075 61,611 26,536
Fines and forfeitures 54,500 54,500 66,230 11,730
Interest on investments 45,000 45,000 25,602 (19,398)
Miscellaneous 18,900 18,900 117,824 98,924
TOTAL REVENUES 5,096,395 5,096,395 5,306,395 210,000
EXPENDITURES
Current
General government 1,188,789 1,188,789 1,282,580 (93,791)
Public safety 1,445,589 1,445,589 1,445,149 440
Public works 928,820 928,820 823,234 105,586
Culture and recreation 249,794 249,794 205,542 44,252
Capital outlay
General government - - 2,811 (2,811)
Public safety 503,038 503,038 503,038 -
TOTAL EXPENDITURES 4,316,030 4,316,030 4,262,354 53,676
EXCESS OF REVENUES
OVER EXPENDITURES 780,365 780,365 1,044,041 263,676
OTHER FINANCING SOURCES (USES)
Transfers in 40,000 40,000 - (40,000)
Transfers out (907,800) (907,800) (907,800) -
TOTAL OTHER FINANCING
SOURCES (USES)(867,800) (867,800) (907,800) (40,000)
NET CHANGE IN FUND BALANCES (87,435) (87,435) 136,241 223,676
FUND BALANCES, JANUARY 1 3,488,227 3,488,227 3,488,227 -
FUND BALANCES, DECEMBER 31 3,400,792$ 3,400,792$ 3,624,468$ 223,676$
The notes to the financial statements are an integral part of this statement.
Budgeted Amounts
-45-
CITY OF SHOREWOOD, MINNESOTA
STATEMENTS OF NET POSITION
PROPRIETARY FUNDS
DECEMBER 31, 2012 AND 2011
Restated
2012 2011 2012 2011
ASSETS
CURRENT ASSETS
Cash and temporary investments 3,810,729$ 3,670,508$ 3,514,714$ 3,544,245$
Cash with fiscal agent 235,245 166,957 - -
Receivables
Accrued interest 15,633 4,669 14,549 4,508
Accounts 108,743 102,013 220,760 217,182
Special assessments 2,813 6,325 4,823 6,187
TOTAL CURRENT ASSETS 4,173,163 3,950,472 3,754,846 3,772,122
NONCURRENT ASSETS
Special assessments receivable 116,248 138,927 23,394 22,994
Capital assets
Land - - - -
Construction in progress - - 63,931 -
Machinery and equipment 39,869 39,869 43,385 43,385
Infrastructure 9,944,664 9,944,664 8,776,827 8,776,827
Less accumulated depreciation (3,981,844) (3,706,927) (7,381,505) (7,160,291)
NET CAPITAL ASSETS 6,002,689 6,277,606 1,502,638 1,659,921
TOTAL NONCURRENT ASSETS 6,118,937 6,416,533 1,526,032 1,682,915
TOTAL ASSETS 10,292,100 10,367,005 5,280,878 5,455,037
LIABILITIES
CURRENT LIABILITIES
Accounts and contracts payable 18,314 10,204 82,108 51,061
Accrued salaries payable - 3,234 - 3,446
Due to other governments 874 1,158 283 -
Accrued interest payable 49,820 53,308 - -
Unearned revenue - 21,550 - -
Bonds payable - current 185,000 175,000 - -
TOTAL CURRENT LIABILITIES 254,008 264,454 82,391 54,507
NONCURRENT LIABILITIES
Bonds payable 2,315,000 2,500,000 - -
TOTAL LIABILITIES 2,569,008 2,764,454 82,391 54,507
NET POSITION
Net investment in capital assets 3,502,689 3,602,606 1,502,638 1,659,921
Unrestricted 4,220,403 3,999,945 3,695,849 3,740,609
TOTAL NET POSITION 7,723,092$ 7,602,551$ 5,198,487$ 5,400,530$
The notes to the financial statements are an integral part of this statement.
601 611
SewerWater
Business-type Activities - Enterprise Funds
-46-
Exhibit 8
Restated
2012 2011 2012 2011
126,933$ 267,288$ 7,452,376$ 7,482,041$
- - 235,245 166,957
854 340 31,036 9,517
93,770 119,994 423,273 439,189
2,490 2,465 10,126 14,977
224,047 390,087 8,152,056 8,112,681
11,774 10,778 151,416 172,699
434,113 434,113 434,113 434,113
- 174,603 63,931 174,603
- - 83,254 83,254
1,292,577 1,009,997 20,014,068 19,731,488
(237,941) (205,627) (11,601,290) (11,072,845)
1,488,749 1,413,086 8,994,076 9,350,613
1,500,523 1,423,864 9,145,492 9,523,312
1,724,570 1,813,951 17,297,548 17,635,993
3,900 7,422 104,322 68,687
- 764 - 7,444
- - 1,157 1,158
- - 49,820 53,308
- - - 21,550
- - 185,000 175,000
3,900 8,186 340,299 327,147
- - 2,315,000 2,500,000
3,900 8,186 2,655,299 2,827,147
1,488,749 1,413,086 6,494,076 6,675,613
231,921 392,679 8,148,173 8,133,233
1,720,670$ 1,805,765$ 14,642,249$ 14,808,846$
Business-type Activities - Enterprise Funds
TotalsNonmajor Enterprise
-47-
CITY OF SHOREWOOD, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
PROPRIETARY FUNDS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
Restated
2012 2011 2012 2011
OPERATING REVENUES
Charges for services 612,892$ 511,427$ 828,490$ 818,296$
OPERATING EXPENSES
Personal services 137,295 105,904 94,617 99,995
Supplies 13,294 11,812 1,970 3,044
Repairs and maintenance 8,515 3,514 12,149 31,562
Depreciation 274,917 273,673 221,214 214,247
Professional services 11,344 1,385 14,510 -
Contracted services 10,190 22,716 10,230 42,521
Insurance - - 773 -
Water purchases 41,442 37,054 - -
Utilities 75,903 72,651 8,700 10,625
Disposal charges - - 702,206 744,098
Other 15,637 44,926 (443) 5,534
TOTAL OPERATING EXPENSES 588,537 573,635 1,065,926 1,151,626
OPERATING INCOME (LOSS)24,355 (62,208) (237,436) (333,330)
NONOPERATING REVENUES (EXPENSES)
Special assessments 19,486 14,648 - -
Interest on investments 32,351 30,768 29,843 27,553
Other income 125,017 146,718 3,150 1,200
Interest expense (100,668) (108,463) - -
TOTAL NONOPERATING REVENUES (EXPENSES)76,186 83,671 32,993 28,753
INCOME (LOSS) BEFORE CONTRIBUTIONS 100,541 21,463 (204,443) (304,577)
CAPITAL CONTRIBUTIONS - CONNECTION FEES 20,000 15,000 2,400 -
CHANGE IN NET POSITION 120,541 36,463 (202,043) (304,577)
NET POSITION AS RESTATED, JANUARY 1 7,602,551 7,566,088 5,400,530 5,705,107
NET POSITION AS RESTATED, DECEMBER 31 7,723,092$ 7,602,551$ 5,198,487$ 5,400,530$
The notes to the financial statements are an integral part of this statement.
Business-type Activities - Enterprise Funds
Water Sewer
601 611
-48-
Exhibit 9
Restated
2012 2011 2012 2011
351,516$ 347,864$ 1,792,898$ 1,677,587$
64,104 50,896 296,016 256,795
16,607 5,199 31,871 20,055
30,030 88,004 50,694 123,080
32,314 25,250 528,445 513,170
19,783 29,632 45,637 31,017
297,650 208,420 318,070 273,657
- - 773 -
- - 41,442 37,054
- - 84,603 83,276
- - 702,206 744,098
1,071 491 16,265 50,951
461,559 407,892 2,116,022 2,133,153
(110,043) (60,028) (323,124) (455,566)
- - 19,486 14,648
1,941 4,024 64,135 62,345
23,007 33,686 151,174 181,604
- - (100,668) (108,463)
24,948 37,710 134,127 150,134
(85,095) (22,318) (188,997) (305,432)
- - 22,400 15,000
(85,095) (22,318) (166,597) (290,432)
1,805,765 1,828,083 14,808,846 15,099,278
1,720,670$ 1,805,765$ 14,642,249$ 14,808,846$
TotalsNonmajor Enterprise
Business-type Activities - Enterprise Funds
-49-
CITY OF SHOREWOOD, MINNESOTA
STATEMENTS OF CASH FLOWS - CONTINUED ON THE FOLLOWING PAGES
PROPRIETARY FUNDS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
Restated
2012 2011 2012 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers and users 606,162$ 500,572$ 825,876$ 820,379$
Other receipts related to operations 103,467 124,962 3,150 1,200
Payments to suppliers, contractors and other governments (168,499) (201,185) (760,681) (792,783)
Payments to employees (140,529) (104,295) (98,063) (97,835)
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES 400,601 320,054 (29,718) (69,039)
CASH FLOWS FROM CAPITAL
AND RELATED FINANCING ACTIVITIES
Connection fees received 20,000 15,000 2,400 -
Principal paid on revenue bonds (175,000) (240,000) - -
Interest paid on revenue bonds (104,156) (112,291) - -
Acquisition of capital assets - - (22,015) (190,013)
Special assessments collected 45,677 73,582 - -
NET CASH USED BY CAPITAL
AND RELATED FINANCING ACTIVITIES (213,479) (263,709) (19,615) (190,013)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on investments 21,387 29,364 19,802 26,976
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 208,509 85,709 (29,531) (232,076)
CASH AND CASH EQUIVALENTS, JANUARY 1 3,837,465 3,751,756 3,544,245 3,776,321
CASH AND CASH EQUIVALENTS, DECEMBER 31 4,045,974$ 3,837,465$ 3,514,714$ 3,544,245$
RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO THE STATEMENT OF NET POSITION
Cash and temporary investments 3,810,729$ 3,670,508$ 3,514,714$ 3,544,245$
Cash with fiscal agent 235,245 166,957 - -
TOTAL CASH AND CASH EQUIVALENTS 4,045,974$ 3,837,465$ 3,514,714$ 3,544,245$
The notes to the financial statements are an integral part of this statement.
Business-type Activities - Enterprise Funds
601 611
Water Sewer
-50-
Exhibit 10
Restated
2012 2011 2012 2011
376,719$ 319,464$ 1,808,757$ 1,640,415$
23,007 33,686 129,624 159,848
(365,739) (330,238) (1,294,919) (1,324,206)
(64,868) (51,001) (303,460) (253,131)
(30,881) (28,089) 340,002 222,926
- - 22,400 15,000
- - (175,000) (240,000)
- - (104,156) (112,291)
(110,901) (418,085) (132,916) (608,098)
- - 45,677 73,582
(110,901) (418,085) (343,995) (871,807)
1,427 4,554 42,616 60,894
(140,355) (441,620) 38,623 (587,987)
267,288 708,908 7,648,998 8,236,985
126,933$ 267,288$ 7,687,621$ 7,648,998$
126,933$ 267,288$ 7,452,376$ 7,482,041$
- - 235,245 166,957
126,933$ 267,288$ 7,687,621$ 7,648,998$
Business-type Activities - Enterprise Funds
TotalsNonmmajor Enterprise
-51-
CITY OF SHOREWOOD, MINNESOTA
STATEMENTS OF CASH FLOWS - CONTINUED
PROPRIETARY FUNDS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
2012 2011 2012 2011
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES
Operating income (loss)24,355$ (62,208)$ (237,436)$ (333,330)$
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities
Other income related to operations 103,467 124,962 3,150 1,200
Depreciation 274,917 273,673 221,214 214,247
(Increase) decrease in assets
Accounts receivable (6,730) (10,855) (3,578) (202)
Special assessments receivable - - 964 2,285
Increase (decrease) in liabilities
Accounts payable 8,110 (7,520) (10,869) 44,601
Due to other governments (284) 393 283 -
Accrued salaries payable (3,234) 1,609 (3,446) 2,160
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES 400,601$ 320,054$ (29,718)$ (69,039)$
NONCASH CAPITAL AND
RELATED FINANCING ACTIVITIES
Capital assets purchased on account -$ -$ 41,916$ -$
The notes to the financial statements are an integral part of this statement.
Water Sewer
601 611
Business-type Activities - Enterprise Funds
-52-
Exhibit 10
2012 2011 2012 2011
(110,043)$ (60,028)$ (323,124)$ (455,566)$
23,007 33,686 129,624 159,848
32,314 25,250 528,445 513,170
26,224 (27,767) 15,916 (38,824)
(1,021) (633) (57) 1,652
(598) 1,508 (3,357) 38,589
- - (1) 393
(764) (105) (7,444) 3,664
(30,881)$ (28,089)$ 340,002$ 222,926$
-$ 2,924$ 41,916$ 2,924$
Business-type Activities - Enterprise Funds
Nonmmajor Enterprise Totals
-53-
Exhibit 11CITY OF SHOREWOOD, MINNESOTA
STATEMENT OF NET POSITION
FIDUCIARY FUND
DECEMBER 31, 2012
Agency
ASSETS
Cash and temporary investments 47,087$
LIABILITIES
Escrow deposits payable 47,087$
The notes to the financial statements are an integral part of this statement.
-54-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting entity
The City of Shorewood, Minnesota (the City), operates under the “Optional Plan A” form of government as defined in
the State of Minnesota statutes. Under this plan, the government of the City is directed by a City Council composed of an
elected Mayor and four elected City Council members. The City Council exercises legislative authority and determines
all matters of policy. The City 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 majority
of an organization’s governing body, and (1) the ability of the City to impose its will on that organization or (2) the
potential for the organization to provide specific benefits to, or impose specific financial burdens on the City. 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 City. 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
City 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 financial statements (i.e., the statement of net position and the statement of activities) report
information on all of the nonfiduciary activities of the City and its component unit. 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 is 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 financial statements are provided for governmental funds, proprietary funds and fiduciary funds. Major
individual governmental funds and major individual enterprise funds are reported as separate columns in the fund
financial statements.
C. Measurement focus, basis of accounting and financial statement presentation
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 City 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.
-55-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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 first 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.
Unearned 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 unearned revenue.
The preparation of financial 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.
The City reports the following major governmental funds:
The General fund is the City’s primary operating fund. It accounts for all financial 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 Street Construction fund accounts for the resources accumulated and payments made for the periodic
reconstruction of City streets and roadways.
The Community Infrastructure fund accounts for the resources accumulated and payments made for future
improvements in the City.
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.
Additionally, the City reports the following fund types:
The fiduciary funds account for assets held by the City 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 accrual basis of accounting. This fund is used to account for assets that the
City holds for certain residents, developers, and other parties that are involved with escrow related projects within
the City.
As a general rule the effect of interfund activity has been eliminated from government-wide financial 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 City. Elimination of these charges would distort the direct costs and program
revenues reported for the various functions concerned.
-56-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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.
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, recycling and stormwater
management utility 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, deferred inflows of resources, and net position/fund balance
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.
The City may invest idle funds as authorized by Minnesota statutes, as follows:
1. Direct obligations or obligations guaranteed by the United States or its agencies.
2. Shares of investment companies registered under the Federal Investment Company Act of 1940 and received
the highest credit rating, rated in one of the two highest rating categories by a statistical rating agency, and have
a final maturity of thirteen months or less.
3. General obligations of a state or local government with taxing powers rated “A” or better; revenue obligations
rated “AA” or better.
4. General obligations of the Minnesota Housing Finance Agency rated “A” or better.
5. Bankers’ acceptances of United States banks eligible for purchase by the Federal Reserve System.
6. Commercial paper issued by United States banks corporations or their Canadian subsidiaries, of highest quality
category by at least two nationally recognized rating agencies, and maturing in 270 days or less.
7. Repurchase or reverse repurchase agreements and securities lending agreements with financial institutions
qualified as a “depository” by the government entity, with banks that are members of the Federal Reserve
System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. government securities to
the Federal Reserve Bank of New York, or certain Minnesota securities broker-dealers.
8. Guaranteed Investment Contracts (GIC’s) issued or guaranteed by a United States commercial bank, a domestic
branch of a foreign bank, a United States insurance company, or its Canadian subsidiary, whose similar debt
obligations were rated in one of the top two rating categories by a nationally recognized rating agency.
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.
-57-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Property taxes
The City 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.
Delinquent taxes receivable include the past six years’ uncollected taxes. Delinquent taxes have been offset by a deferred
inflow of resources for delinquent taxes not received within 60 days after year end in the governmental fund financial
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 2012. 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.
Special assessments
Special assessments represent the financing 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 governmental assessments receivable are offset by a
deferred inflow of resources in the fund financial statements.
Interfund receivables and payables
Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the
fiscal year are referred to as either “interfund receivables/payables” (i.e., the current portion of interfund loans) or
“advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between
funds are reported as “due to/from other funds.” Any residual balances outstanding between the governmental activities
and business-type activities are reported in the government-wide financial statements as “internal balances.”
Advances between funds, as reported in the fund financial statements, are offset by a nonspendable fund balance account
in applicable governmental funds to indicate they are not available for appropriation and are not expendable available
financial resources.
Prepaid items
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. Prepaid items of the City are accounted for using the consumption
method.
-58-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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 defined by the City as assets with 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 10,000$
Other improvements 25,000
Buildings 25,000
Building improvements 25,000
Machinery and equipment 5,000
Vehicles 5,000
Infrastructure 100,000
Other assets 5,000
In the case of initial capitalization of general infrastructure assets (i.e., those reported by governmental activities) the
City chose to include items dating back to June 30, 1980. The City was able to estimate the historical cost for the initial
reporting of these assets through backtrending (i.e., estimating the current replacement cost of the infrastructure to be
capitalized and using an appropriate price-level index to deflate the cost to the acquisition year or estimated acquisition
year). As the City constructs or acquires capital assets each period, including infrastructure assets, they are capitalized
and reported at historical cost. The reported value excludes normal maintenance and repairs which are essentially
amounts spent in relation to capital assets that do not increase the capacity or efficiency of the item or extend its useful
life beyond the original estimate.
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 City, are depreciated using the straight-line method over the following estimated
useful lives:
Useful Lives
Assets in Years
Land improvements 15 - 20
Buildings and improvements 7 - 40
System improvements/infrastructure 20 - 50
Machinery and equipment 5 - 15
Vehicles 5 - 15
-59-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Deferred inflows of resources
In addition to liabilities, the statement of financial position and fund financial statements will sometimes report a
separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of
resources, represents an acquisition of net position that applies to a future period and so will not be recognized as an
inflow of resources (revenue) until that time. The government has only one type of item, which arises only under a
modified accrual basis of accounting, that qualifies as needing to be reported in this category. Accordingly, the item,
unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report
unavailable revenues from three sources: property taxes, special assessments and lease receivable. These amounts are
deferred and recognized as an inflow of resources in the period that the amounts are received.
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
financial 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. In the case of an employee leaving, the General fund
would be responsible for liquidation of the liability.
Postemployment benefits other than pensions
Under Minnesota statute 471.61, subdivision 2b., public employers must allow retirees and their dependents to continue
coverage indefinitely in an employer-sponsored health care plan, under the following conditions: 1) Retirees must be
receiving (or eligible to receive) an annuity from a Minnesota public pension plan, 2) Coverage must continue in group
plan until age 65, and retirees must pay no more than the group premium, and 3) Retirees may obtain dependent
coverage immediately before retirement. All premiums are funded on a pay-as-you-go basis. It was determined, in
accordance with GASB Statement 45, at December 31, 2012 that the City has a zero liability.
Long-term obligations
In the government-wide financial statement and proprietary fund types in the fund financial 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 position. The recognition of bond premiums and discounts are
amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond
premium or discount. Bond issuance costs are reported as an expense in the period incurred.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond
issuance costs, during the current period. The face amount of debt issued is reported as other financing sources.
Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are
reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are
reported as debt service expenditures.
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CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Fund balance
In the fund financial statements, fund balance is divided into five classifications based primarily on the extent to which
the City is bound to observe constraints imposed upon the use of resources reported in the governmental funds. These
classifications are defined as follows:
Nonspendable - Amounts that cannot be spent because they are not in spendable form, such as prepaid items and
land held for sale.
Restricted - Amounts related to externally imposed constraints established by creditors, grantors or contributors; or
constraints imposed by state statutory provisions.
Committed - Amounts constrained for specific purposes that are internally imposed by formal action (resolution) of
the City Council, which is the City’s highest level of decision-making authority. Committed amounts cannot be used
for any other purpose unless the City Council modifies or rescinds the commitment by resolution.
Assigned - Amounts constrained for specific purposes that are internally imposed. In governmental funds other than
the General fund, assigned fund balance represents all remaining amounts that are not classified as nonspendable
and are neither restricted nor committed. In the General fund, assigned amounts represent intended uses established
by the City Council itself or by an official to which the governing body delegates the authority. The City Council
has adopted a fund balance policy which delegates the authority to assign amounts for specific purposes to the City
Administrator.
Unassigned - The residual classification for the General fund and also negative residual amounts in other funds.
The City considers restricted amounts to be spent first when both restricted and unrestricted fund balance is available.
Additionally, the City would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund
balance when expenditures are made.
The City has formally adopted a fund balance policy for the General fund. The City’s policy is to maintain a minimum
unassigned fund balance of 55-60 percent of operating expenditures for cash-flow timing needs.
Net position
Net position represents the difference between assets and liabilities. Net position is displayed in three components:
a. Net investment in capital assets - Consists of capital assets, net of accumulated depreciation reduced by any
outstanding debt attributable to acquire capital assets.
b. Restricted net position - Consist of net position balances restricted when there are limitations imposed on their
use through external restrictions imposed by creditors, grantors, laws or regulations of other governments.
c. Unrestricted net position - All other net position balances that do not meet the definition of “restricted” or “net
investment in capital assets”.
Comparative data/reclassifications
Comparative total data for the prior year have been presented only for individual enterprise funds in the fund financial
statements in order to provide an understanding of the changes in the financial position and operations of these funds.
Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the current
year’s presentation.
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CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. 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 City Council for review. In early
December, the City Council holds public hearings and a final budget is prepared and adopted.
The appropriated budget is prepared by fund, function and department. The City’s department heads, with the approval of the
City Administrator, may make transfers of appropriations within a department . Transfers of appropriations between
departments require the approval of the City Council. The legal level of budgetary control is the department level. There were
no budget amendments made during 2012.
B. Deficit fund equity
The following fund had a deficit fund balance as of December 31, 2012:
Amount
Nonmajor capital project
Trail Construction 34,576$
Nonmajor special revenue
Southshore Community Center 40,749
Fund
The City plans to fund this deficit with future revenues and interfund transfers.
Note 3: DETAILED NOTES ON ALL FUNDS
A. Deposits and investments
Deposits
Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the City’s deposits and
investments may not be returned or the City will not be able to recover collateral securities in the possession of an
outside party. In accordance with Minnesota statutes and as authorized by the City Council, the City maintains deposits
at those depository banks, all of which are members of the Federal Reserve System.
Minnesota statutes require that all City deposits be protected by insurance, surety bond or collateral. The fair value of
collateral pledged must equal 110 percent of the deposits not covered by insurance or bonds.
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CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
Authorized collateral in lieu of a corporate surety bond includes:
United States government Treasury bills, Treasury notes, Treasury bonds;
Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation
service available to the government entity;
General obligation securities of any state or local government with taxing powers which is rated “A” or better
by a national bond rating service, or revenue obligation securities of any state or local government with taxing
powers which is rated “AA” or better by a national bond rating service;
General obligation securities of a local government with taxing powers may be pledged as collateral against
funds deposited by that same local government entity;
Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by
written evidence that the bank’s public debt is rated “AA” or better by Moody’s Investors Service, Inc., or
Standard & Poor’s Corporation; and
Time deposits that are fully insured by any Federal agency.
Minnesota statutes require that all collateral shall be placed in safekeeping in a restricted account at a Federal Reserve
Bank, or in an account at a trust department of a commercial bank or other financial institution that is not owned or
controlled by the financial institution furnishing the collateral. The selection should be approved by the government
entity.
At year end, the City’s carrying amount of deposits was $282,617 and the bank balance was $335,981. The entire bank
balance was covered by Federal depository insurance or by collateral held by the City’s agent in the City’s name.
A reconciliation of cash and temporary investments as shown on the financial statements for the City follows:
Primary
Government
Carrying amount of deposits 282,617$
Investments 15,045,657
Cash on hand 120
Total 15,328,394$
As reported on the financial statements
Statement of net position 15,046,062$
Cash with fiscal agent 235,245
Fiduciary fund 47,087
Total 15,328,394$
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CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
Investments
The Minnesota Municipal Money Market fund (the 4M fund) is a customized cash management and investment program
for Minnesota public funds. Sponsored and governed by the League of Minnesota Cities since 1987, the 4M fund is a
unique investment alternative designed to address the daily and long-term investment needs of Minnesota cities and other
municipal entities. Allowable under Minnesota statutes, the 4M fund is comprised of top quality, rated investments.
The Minnesota Municipal Money Market fund and broker money market investment pools operate in accordance with
appropriate State laws and regulations. The 4M fund is an external investment pool not registered with the Securities and
Exchange Commission (SEC); however, it follows the same regulatory rules of the SEC under rule 2a7. The reported
value of the pool is the same as the fair value of the pool share. Financial statements of the 4M fund can be obtained by
contracting RBC Global Asset Management at 100 South Fifth Street, Suite 2300, Minneapolis, MN 55402-1240.
At year end, the City had the following investments that are insured or registered, or securities held by the City’s agent in
the City’s name:
Fair Value
CreditSegmented and
Quality/Time Carrying
Rating (1)Distribution (2)Amount
Non Pooled investments
U.S. Government Agency Securities AAA more than 3 years1,502,425$
Municipal Bonds AA less than 6 months222,873
Municipal Bonds Aa2less than 6 months185,178
Municipal Bonds Aa3less than 6 months1,400,448
Municipal Bonds Aa2less than 1 year1,076,197
Municipal Bonds Aa3less than 1 year 539,312
Municipal Bonds A 1 to 3 years 528,710
Municipal Bonds Aa2 1 to 3 years 738,032
Municipal Bonds Aa3 1 to 3 years 571,577
Municipal Bonds Amore than 3 years532,950
Municipal Bonds AA more than 3 years1,191,075
Municipal Bonds Aa2more than 3 years610,808
Brokered Certificates of Deposit N/Aless than 6 months1,130,018
Brokered Certificates of Deposit N/A6 to 12 months 341,425
Brokered Certificates of Deposit N/A 1 to 3 years 240,589
Total non pooled 10,811,617
Pooled investments
Minnesota Municipal Money Market fund N/Aless than 6 months2,109,528
Broker Money Market N/Aless than 6 months2,124,512
Total pooled 4,234,040
Total investments 15,045,657$
Types of Investments
(1) Ratings are provided by various credit ratings agencies where applicable to indicate associated credit risk.
(2) Interest rate risk is disclosed using the segmented time distribution method.
N/A Indicates not applicable or available.
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CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
The investments of the City are subject to the following risks:
Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its
obligations. Ratings are provided by various credit rating agencies and where applicable, indicate associated
credit risk. Minnesota statutes and the City’s investment policy limit the City’s investments to the list on page
57 of the notes.
Custodial Credit Risk. The custodial credit risk for investments is the risk that, in the event of the failure of the
counterparty to a transaction, a government will not be able to recover the value of investment or collateral
securities that are in the possession of an outside party. In accordance with the City’s investment policy, the
investment officer shall structure all investments, deposits and repurchase agreements so that the custodial risk
is categorized as either insured or registered, or securities held by the City or its agent in the City’s name or
uninsured and unregistered, with securities held by the counterparty’s trust department or agent in the City’s
name. All investments are placed in safekeeping at financial institutions.
Concentration of Credit Risk. Concentration of credit risk is the risk of loss attributed to the magnitude of a
government’s investment in a single issuer. In accordance with the City’s investment policy, the City diversifies
its investment portfolio to eliminate the risk of loss resulting from over-concentration of assets in a specific
maturity, a specific issuer or a specific class of securities. As of December 31, 2012 the City had invested 5.0
percent or more of its total investment portfolio in the following issuer: Groton Connecticut Taxable,
9.3 percent.
Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of
an investment. In accordance with its investment policy and also detailed in the description of concentration of
credit risk, the City manages its exposure to declines in fair values by “laddering” their investment maturities to
ensure that a portion of the portfolio is maturing monthly, or as needed to meet projected expenditures. The
City also permits no more than 30 percent of total investments to extend beyond five (5) years and does not
directly invest in securities maturing more than 15 years from the date of purchase.
-65-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
B. Capital assets
Capital asset activity for the year ended December 31, 2012 was as follows:
Beginning Ending
BalanceIncreasesDecreasesBalance
Governmental activities
Capital assets not being depreciated
Land 741,826$ -$ -$ 741,826$
Construction in progress 52,145 11,178 (63,323) -
Total capital assets
not being depreciated 793,971 11,178 (63,323) 741,826
Capital assets being depreciated
Buildings 3,373,870 - - 3,373,870
Improvements other than buildings 1,012,469 - - 1,012,469
Infrastructure 27,773,568 63,323 - 27,836,891
Machinery and equipment 2,653,342 219,131 (65,057) 2,807,416
Total capital assets
being depreciated 34,813,249 282,454 (65,057) 35,030,646
Less accumulated depreciation
Buildings (949,843) (84,213) - (1,034,056)
Improvements other than buildings (646,670) (39,857) - (686,527)
Infrastructure (21,595,910) (735,686) - (22,331,596)
Machinery and equipment (2,001,128) (157,060) 65,057 (2,093,131)
Total accumulated
depreciation (25,193,551) (1,016,816) 65,057 (26,145,310)
Total capital assets
being depreciated, net 9,619,698 (734,362) - 8,885,336
Governmental activities
capital assets, net 10,413,669$ (723,184)$ (63,323)$ 9,627,162$
-66-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
Beginning Ending
BalanceIncreasesDecreasesBalance
Business-type activities
Capital assets not being depreciated
Land 434,113$ -$ -$ 434,113$
Construction in progress 174,603 171,908 (282,580) 63,931
Total capital assets
not being depreciated 608,716 171,908 (282,580) 498,044
Capital assets being depreciated
Infrastructure 19,731,488 282,580 - 20,014,068
Machinery and equipment 83,254 - - 83,254
Total capital assets
being depreciated 19,814,742 282,580 - 20,097,322
Less accumulated depreciation for
Infrastructure (10,998,841) (523,526) - (11,522,367)
Machinery and equipment (74,004) (4,919) - (78,923)
Total accumulated
depreciation (11,072,845) (528,445) - (11,601,290)
Total capital assets
being depreciated, net 8,741,897 (245,865) - 8,496,032
Business-type activities
capital assets, net 9,350,613$ (73,957)$ (282,580)$ 8,994,076$
Depreciation expense was charged to functions/programs of the City as follows:
Governmental activities
General government 60,786$
Public works 895,502
Culture and recreation 60,528
Total depreciation expense - governmental activities 1,016,816$
Business-type activities
Water 274,917$
Sewer 221,214
Stormwater management utility 32,314
Total depreciation expense - business-type activities 528,445$
-67-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
Construction commitments
The City has active construction projects as of December 31, 2012. At year end, the commitment with the contractors for
these projects is as follows:
SpentRemaining
to dateCommitment
2012 Rehabilitation of Lift Station 5 & 6 41,916$ 267,392$
Project
C. Interfund receivables, payables and transfers
Interfund balances
The composition of interfund balances as of December 31, 2012, is as follows:
Purpose Amount
Major governmental Nonmajor governmental
General Southshore Community CenterCash flow 37,611$
Community InfrastructureTrail Construction Cash flow 21,394
Payable FundReceivable Fund
Interfund transfers
The City made transfers during the fiscal year 2012 as shown and described below:
StreetNonmajor
Debt ServiceReconstructionGovernmentalTotal
Transfers out
General 102,200$ 700,000$ 105,600$ 907,800$
Nonmajor governmental - - 262,416 262,416
Total 102,200$ 700,000$ 368,016$ 1,170,216$
Fund
Transfers in
The City annually budgets transfers for specific purposes. Annual transfers are made as part of capital improvement
plans as well as annual budgets.
For the year ended December 31, 2012, the City made the following one-time transfers:
The Technology fund transferred $78,317 to the Equipment Replacement fund to close the fund.
The Public Facilities/Office Equipment fund transferred $184,099 to the Equipment Replacement fund to close
the fund.
D. Long-term debt
General obligation bonds.
The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities.
General obligation bonds have been issued for both governmental and business-type activities. These bonds are reported
in the proprietary funds if they are expected to be repaid from proprietary fund revenues. In addition, general obligation
bonds have been issued to refund special assessments related bonds.
General obligation bonds are direct obligations and pledge the full faith and credit of the City. The City has the following
general obligation debt:
-68-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
General obligation revenue bonds
The following bonds were issued to finance capital improvements in the enterprise funds. They will be retired from net
revenues of the enterprise funds.
Balance
Authorized IssueMaturity at
and Issued DateDateYear End
G.O. Water Revenue
Bonds of 2005 1,525,000 3.50 - 4.25%06/01/0501/01/25 1,100,000$
G.O. Water Revenue
Bonds of 2006 1,450,000 4.00 11/29/0601/01/22 1,400,000
Total G.O. Revenue Bonds 2,500,000$
Rate
Interest
Description
Annual debt service requirements to maturity for general obligation revenue bonds are as follows:
Year Ending
December 31,PrincipalInterest Total
2013 185,000$ 96,103$ 281,103$
2014 190,000 88,940 278,940
2015 195,000 81,555 276,555
2016 205,000 73,808 278,808
2017 215,000 65,595 280,595
2018 - 2022 1,200,000 190,898 1,390,898
2023 - 2025 310,000 19,974 329,974
Total 2,500,000$ 616,873$ 3,116,873$
G.O. Revenue Bonds
Business-type Activities
Lease revenue bonds
The City also issues bonds where the City pledges income derived from the acquired or constructed assets to pay debt
service. Revenue bonds outstanding at year end are as follows:
Balance
Authorized IssueMaturity at
and Issued DateDateYear End
Public Safety Fire Facility,
Refunding Series 2007A 4,130,000$ 5.30 - 5.40%01/01/0702/01/233,480,000$
Public Safety Police Facility,
Refunding Series 2007B 4,285,000 3.50 - 4.2501/01/0702/01/233,610,000
Public Safety Fire Facility,
Refunding Series 2007C 1,585,000 3.75 - 5.0001/01/0702/01/221,285,000
Public Project Lease Revenue
Bonds, Series 2008A 1,310,000 2.85 - 4.8008/19/0812/01/281,140,000
Total Lease Revenue Bonds 9,515,000$
Interest
RateDescription
-69-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED
The Public Safety Fire Facility Refunding Series 2007A, 2007B and 2007C were issued for construction of the public
safety building, which there is a lease receivable from the South Lake Minnetonka Police and Excelsior Fire District.
This debt is excluded from the calculation of net position invested in capital assets, net of related debt as the building is
reported on the South Lake Minnetonka Police and Excelsior Fire District as a capital asset. Refer to Note 5 A and B for
further information.
Annual debt service requirements to maturity for revenue bonds are as follows:
Year Ending
December 31,PrincipalInterest Total
2013 675,000$ 385,963$ 1,060,963$
2014 705,000 356,227 1,061,227
2015 735,000 325,081 1,060,081
2016 770,000 290,863 1,060,863
2017 800,000 257,068 1,057,068
2018 - 2022 4,525,000 770,631 5,295,631
2023 - 2027 1,210,000 101,604 1,311,604
2028 95,000 4,559 99,559
Total 9,515,000$ 2,491,996$ 12,006,996$
Governmental Activities
Lease Revenue Bonds
Changes in long-term liabilities
Long-term liability activity for the year ended December 31, 2012, was as follows:
Beginning EndingDue Within
BalanceIncreasesDecreasesBalanceOne Year
Governmental activities
Lease revenue bonds 10,170,000$ -$ (655,000)$ 9,515,000$ 675,000$
Compensated absences 184,782 147,408 (150,428) 181,762 147,969
Total 10,354,782$ 147,408$ (805,428)$ 9,696,762$ 822,969$
Business-type activities
General obligation
revenue bonds 2,675,000$ -$ (175,000)$ 2,500,000$ 185,000$
-70-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 4: DEFINED BENEFIT PENSION PLAN - STATEWIDE
A. Plan description
All full-time and certain part-time employees of the City are covered by defined benefit plans administered by the Public
Employees Retirement Association of Minnesota (PERA). PERA administers the General Employees Retirement Fund
(GERF), which is a cost-sharing, multiple-employer retirement plan. This plan is established and administered in
accordance with Minnesota statutes, chapters 353 and 356.
GERF 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
defined 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 PERA’s Coor dinated 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 2.20 percent of average salary for each of the first 10 years
of service and 2.70 percent for each remaining year. The annuity accrual rate for a Coordinated Plan member is
1.20 percent of average salary for each of the first 10 years and 1.70 percent for each remaining year. Under Method 2,
the annuity accrual rate is 2.70 percent of average salary for Basic Plan members and 1.70 percent for Coordinated Plan
members for each year of service. For all GERF members hired prior to July 1, 1989 whose annuity is calculated using
Method 1, a full annuity is available when age plus years of service equal 90. Normal retirement age is 65 for Basic and
Coordinated members hired prior to July 1, 1989. Normal retirement age is the age for unreduced Social Security
benefits capped at 66 for Coordinated members hired on or after July 1, 1989. 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 single-life 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 be payable over joint lives. Members may also leave their contributions in
the fund upon termination of public service in order to qualify for a deferred annuity at retirement age. Refunds of
contributions are available at any time to members who leave public service, but before retirement benefits begin.
The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active 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 financial statements and required supplementary
information for GERF. That report may be obtained on the Internet at mnpera.org, by writing to PERA, 60 Empire Drive
#200, St. Paul, Minnesota, 55103-2088 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 Minnesota legislature. The City makes annual contributions to the pension plans equal to the
amount required by Minnesota statutes. GERF Basic Plan members and Coordinated Plan members were required to
contribute 9.10 percent and 6.25 percent, respectively, of their annual covered salary in 2012. The City is required to
contribute the following percentages of annual covered payroll: 11.78 percent for Basic Plan GERF members and
7.25 percent for Coordinated Plan GERF members. The City’s contributions to the GERF for the years ending
December 31, 2012, 2011 and 2010 were $99,678, $100,570, and $89,850, respectively. The City’s contributions were
equal to the contractually required contributions for each year as set by Minnesota statute.
-71-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 5: JOINT VENTURES
A. South Lake Minnetonka Police Department
The City participates in a joint powers agreement with the cities of Excelsior, Greenwood and Tonka Bay, which
establishes the South Lake Minnetonka Police Department (Department) for the purpose of providing police protection
within the four communities. The agreement creates a coordinating committee, comprised of the Mayors of each
participating community, as the governing body, which meets quarterly. Each year, the coordinating committee adopts
an operating budget, which is approved by all participating cities. The cost of the operating budget is divided between
the participating cities based upon a fixed percentage of the total municipal revenue allocated to each City.
Any budget shortfall is made up first from department reserves, with any excess shortfall assessed to each participating
community according to the formula. The most recent year of audited information is December 31, 2012.
Separate financial statements can be obtained by writing to the South Lake Minnetonka Police Department,
24150 Smithtown Road, Shorewood, Minnesota 55331. The following is a summary of the Department’s Statement of
Net Position as of December 31, 2012 and 2011:
SOUTH LAKE MINNETONKA POLICE DEPARTMENT
SUMMARY OF STATEMENTS OF NET POSITION
DECEMBER 31, 2012 AND 2011
2012 2011
Assets 5,339,920$ 5,461,572$
Liabilities 3,895,391$ 4,171,056$
Net position 1,444,529 1,290,516
Total liabilities
and net position 5,339,920$ 5,461,572$
The following is a summary of the Department’s statement of activities for the years ended December 31, 2012 and
2011:
SOUTH LAKE MINNETONKA POLICE DEPARTMENT
SUMMARY STATEMENTS OF ACTIVITIES
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
2012 2011
Revenues 2,691,104$ 2,630,997$
Expenses 2,562,528 2,468,543
Net revenues 128,576 162,454
General revenues 25,437 46,460
Change in net position 154,013 208,914
Net position, January 1 1,290,516 1,081,602
Net position, December 31 1,444,529$ 1,290,516$
-72-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 5: JOINT VENTURES - CONTINUED
B. Excelsior Fire District
In August of 2000, the cities of Deephaven, 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 of ten members and five alternate members.
Each member City appoints two representatives on the Board of Directors 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 Smithtown Road,
Shorewood, Minnesota 55331. The following is a summary of the District’s Statement of Net Position as of
December 31, 2012 and 2011:
EXCELSIOR FIRE DISTRICT
SUMMARY OF STATEMENTS OF NET POSITION
DECEMBER 31, 2012 AND 2011
2012 2011
Assets 8,105,724$ 8,041,260$
Liabilities 5,277,656$ 5,521,156$
Net position 2,828,068 2,520,104
Total liabilities
and net position 8,105,724$ 8,041,260$
The following is a summary of the District’s statement of activities for the years ended December 31, 2012 and 2011:
EXCELSIOR FIRE DISTRICT
SUMMARY STATEMENTS OF ACTIVITIES
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
2012 2011
Revenues 1,557,428$ 1,551,957$
Expenses 1,251,845 1,319,634
Net revenues 305,583 232,323
General revenues 2,381 19,404
Change in net position 307,964 251,727
Net position, January 1 2,520,104 2,268,377
Net position, December 31 2,828,068$ 2,520,104$
-73-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
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 $43,080,294 computed as three 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.
C. Southshore Community Center
On July 1, 2009, the City entered into an agreement to take over operations of the Southshore Community Center . The
City also contracted with Community Recreation Resources (CRR) for the operation, management, and programming of
the Southshore Community Center. The contract with CRR was for the period of July 1, 2009 to July 1, 2012 with an
option to renew for another three years or renegotiate. The contract was re-negotiated in January, 2012. The City agreed
to pay CRR $5,000 per month for the period of January 1, 2012 to December 31, 2012. During this time, the City paid a
15 percent commission on monthly revenues to CRR. A quarterly bonus commission of five percent was due if the
quarterly program and rental income exceeded $13,500. The contract was subsequently extended on a month by month
basis through March 31, 2013 when CRR ceased to provide services as the Southshore Community Center management
company.
Note 7: SUBSEQUENT EVENT
On March 6, 2013, the government issued $2,260,000 General Obligation Revenue Refunding Bonds for the purpose of
refunding the 2005A Revenue Bonds. The average interest rate on the bonds is 1.04 percent and the maturity date is
January 1, 2022.
-74-
CITY OF SHOREWOOD, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2012
Note 8: CHANGE IN ACCOUNTING PRINCIPLE
During fiscal year 2012, the City implemented several new accounting pronouncements issued by the Government
Accounting Standards Board (GASB), including Statement No. 63, “Financial Reporting of Deferred Outflows of Resources,
Deferred Inflows of Resources, and Net Position” and Statement No. 65, “Items Previously Reported as Assets and
Liabilities”. These standards required a retroactive implementation which resulted in the restatement of beginning balances in
the December 31, 2012 financial statements. Changes related to these standards are reflected in the financial statements and
schedules and related disclosures included in Note 1.
As a result of the restatement of beginning balances, the following schedule reconciles the previously reported
December 31, 2010 balances to the December 31, 2012 financial statements:
Net Position
December 31, 2010 Net Position
as Previously January 1, 2011
Reported(1) Restatementas Restated
Governmental activities 17,778,488$ (166,883)$ 17,611,605$
Business-type activities 15,161,145$ (61,867)$ 15,099,278$
Proprietary funds
Water 7,627,955$ (61,867)$ 7,566,088$
Sewer 5,705,107 - 5,705,107
Recycling 88,263 - 88,263
Stormwater Management Utility 1,739,820 - 1,739,820
Total proprietary funds 15,161,145$ (61,867)$ 15,099,278$
(1)Write-off of unamortized bond issuance cost balances at December 31, 2010.
Activities/Fund
As a result of the restatement of beginning balances, the following schedule reconciles the previously reported
December 31, 2011 balances to the December 31, 2012 financial statements:
Net Position
December 31, 2011 Net Position
as Previously January 1, 2012
Reported(2) Restatementas Restated
Governmental activities 17,188,372$ (155,198)$ 17,033,174$
Business-type activities 14,862,448$ (53,602)$ 14,808,846$
Proprietary funds
Water 7,656,153$ (53,602)$ 7,602,551$
Sewer 5,400,530 - 5,400,530
Recycling 99,028 - 99,028
Stormwater Management Utility 1,706,737 - 1,706,737
Total proprietary funds 14,862,448$ (53,602)$ 14,808,846$
(2)Write-off of unamortized bond issuance cost balances at December 31, 2011
Activities/Fund
-75-
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-76-
COMBINING AND INDIVIDUAL FUND
FINANCIAL STATEMENTS AND SCHEDULES
CITY OF SHOREWOOD
SHOREWOOD, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2012
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INTENTIONALLY
-78-
NONMAJOR GOVERNMENTAL FUNDS
NONMAJOR SPECIAL REVENUE FUNDS
Special revenue funds are used to account for revenue derived from specific taxes or other earmarked revenue sources. They ar e
usually required by Minnesota statute or local ordinances to finance particular functions or other activities of government.
Southshore Community Center - This fund was established to account for the resources accumulated from events and activities held
at the City’s community center, and the payment of expenditures related to operations of the community center. The City has
committed charges for services revenues for operations.
-79-
Exhibit A-1CITY OF SHOREWOOD, MINNESOTA
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
DECEMBER 31, 2012
Special
Revenue
Southshore Total
Community Capital Nonmajor
Center Projects Funds
ASSETS
Cash and temporary investments -$ 635,945$ 635,945$
Receivables
Accrued interest - 3,244 3,244
Lease - 277,892 277,892
TOTAL ASSETS -$ 917,081$ 917,081$
LIABILITIES
Accounts and contracts payable 3,138$ 14,206$ 17,344$
Due to other funds 37,611 21,394 59,005
TOTAL LIABILITIES 40,749 35,600 76,349
FUND BALANCES
Assigned to capital outlay - 916,057 916,057
Unassigned (40,749) (34,576) (75,325)
TOTAL FUND BALANCES (40,749) 881,481 840,732
TOTAL LIABILITIES AND
FUND BALANCES -$ 917,081$ 917,081$
-80-
Exhibit A-2CITY OF SHOREWOOD, MINNESOTA
NONMAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED DECEMBER 31, 2012
Special
Revenue
490
Southshore Total
Community Capital Nonmajor
Center Projects Funds
REVENUES
Charges for services 60,014$ -$ 60,014$
Interest on investments - 9,638 9,638
Miscellaneous
Park dedication fees - 10,000 10,000
Contributions and donations 1,219 - 1,219
Other 866 7,183 8,049
TOTAL REVENUES 62,099 26,821 88,920
EXPENDITURES
Current
General government - 6,124 6,124
Culture and recreation 123,126 2,856 125,982
Capital outlay
Public works - 222,614 222,614
Culture and recreation - 67,704 67,704
TOTAL EXPENDITURES 123,126 299,298 422,424
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (61,027) (272,477) (333,504)
OTHER FINANCING SOURCES (USES)
Transfers in 13,600 354,416 368,016
Transfers out - (262,416) (262,416)
TOTAL OTHER FINANCING SOURCES (USES)13,600 92,000 105,600
NET CHANGE IN FUND BALANCES (47,427) (180,477) (227,904)
FUND BALANCES, JANUARY 1 6,678 1,061,958 1,068,636
FUND BALANCES, DECEMBER 31 (40,749)$ 881,481$ 840,732$
-81-
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INTENTIONALLY
-82-
NONMAJOR CAPITAL PROJECTS FUNDS
Capital projects funds are used to account for the acquisition and construction of major capital facilities other than those financed by
enterprise funds.
Public Facilities - This fund was established to account for capital improvement projects for municipal public facilities.
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.
MSA Construction - This fund was established to account for the accumulation of Municipal State Aid (MSA) to fund the periodic
reconstruction of MSA designated roads.
Trail Construction – This fund was established for the purpose of funding future trail improvements and construction
Technology - This fund was established for the replacement of office equipment, computers, and technology for municipal operations
at the City offices.
.
-83-
CITY OF SHOREWOOD, MINNESOTA
NONMAJOR CAPITAL PROJECTS FUNDS
COMBINING BALANCE SHEET
DECEMBER 31, 2012
401 402 403
Park
Public Capital Equipment
Facilities Improvement Replacement
ASSETS
Cash and temporary investments -$ 167,792$ 333,796$
Receivables
Accrued interest - 635 2,005
Lease - - 277,892
TOTAL ASSETS -$ 168,427$ 613,693$
LIABILITIES
Accounts and contracts payable -$ -$ -$
Due to other funds - - -
TOTAL LIABILITIES - - -
FUND BALANCES
Assigned to capital outlay - 168,427 613,693
Unassigned - - -
TOTAL FUND BALANCES - 168,427 613,693
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES -$ 168,427$ 613,693$
-84-
CITY OF SHOREWOOD, MINNESOTA Exhibit B-1
NONMAJOR CAPITAL PROJECTS FUNDS
COMBINING BALANCE SHEET
DECEMBER 31, 2012
405 406 408
MSA Trail
Construction Construction Technology Total
133,389$ -$ 968$ 635,945$
548 56 - 3,244
- - - 277,892
133,937$ 56$ 968$ 917,081$
-$ 13,238$ 968$ 14,206$
- 21,394 - 21,394
- 34,632 968 35,600
133,937 - - 916,057
- (34,576) - (34,576)
133,937 (34,576) - 881,481
133,937$ 56$ 968$ 917,081$
-85-
CITY OF SHOREWOOD, MINNESOTA
NONMAJOR CAPITAL PROJECTS FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED DECEMBER 31, 2012
401 402 403
Park
Public Capital Equipment
Facilities Improvement Replacement
REVENUES
Interest on investments 783$ 1,273$ 5,919$
Miscellaneous
Park dedication fees - 10,000 -
Other 5,250 - 1,933
TOTAL REVENUES 6,033 11,273 7,852
EXPENDITURES
Current
General government 23 - 5,133
Culture and recreation - - -
Capital outlay
Public works - - 222,614
Culture and recreation - 35,804 -
TOTAL EXPENDITURES 23 35,804 227,747
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 6,010 (24,531) (219,895)
OTHER FINANCING SOURCES (USES)
Transfers in - 42,000 312,416
Transfers out (184,099) - -
TOTAL OTHER FINANCING SOURCES (USES)(184,099) 42,000 312,416
NET CHANGE IN FUND BALANCES (178,089) 17,469 92,521
FUND BALANCES, JANUARY 1 178,089 150,958 521,172
FUND BALANCES, DECEMBER 31 -$ 168,427$ 613,693$
-86-
CITY OF SHOREWOOD, MINNESOTA Exhibit B-2
NONMAJOR CAPITAL PROJECTS FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED DECEMBER 31, 2012
405 406 408
MSA Trail
Construction Construction Technology Total
1,287$ 180 196$ 9,638$
- - - 10,000
- - - 7,183
1,287 180 196 26,821
- - 968 6,124
- 2,856 - 2,856
-
- - - 222,614
- 31,900 - 67,704
- 34,756 968 299,298
1,287 (34,576) (772) (272,477)
- - - 354,416
- - (78,317) (262,416)
- - (78,317) 92,000
1,287 (34,576) (79,089) (180,477)
132,650 - 79,089 1,061,958
133,937$ (34,576)$ -$ 881,481$
-87-
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INTENTIONALLY
-88-
NONMAJOR PROPRIETARY FUNDS
NONMAJOR ENTERPRISE FUNDS
Enterprise funds are used to account for fund activities of the City that operate in a manner similar to private businesses.
Recycling - This fund accounts for the activities of the City’s recycling program.
Stormwater Management Utility - This fund accounts for the activities of the City’s stormwater management system.
-89-
CITY OF SHOREWOOD, MINNESOTA
NONMAJOR PROPRIETARY FUNDS
COMBINING STATEMENTS OF NET POSITION
DECEMBER 31, 2012 AND 2011
2012 2011 2012 2011
ASSETS
CURRENT ASSETS
Cash and temporary investments 44,454$ 53,146$ 82,479$ 214,142$
Receivables
Accrued interest 225 54 629 286
Accounts 42,440 40,537 51,330 79,457
Special assessments 737 668 1,753 1,797
TOTAL CURRENT ASSETS 87,856 94,405 136,191 295,682
NONCURRENT ASSETS
Special assessments receivable 4,992 4,699 6,782 6,079
Capital assets
Land - - 434,113 434,113
Construction in progress - - - 174,603
Infrastructure - - 1,292,577 1,009,997
Less accumulated depreciation - - (237,941) (205,627)
NET CAPITAL ASSETS - - 1,488,749 1,413,086
TOTAL NONCURRENT ASSETS 4,992 4,699 1,495,531 1,419,165
TOTAL ASSETS 92,848 99,104 1,631,722 1,714,847
LIABILITIES
CURRENT LIABILITIES
Accounts and contracts payable 412 - 3,488 7,422
Accrued salaries payable - 76 - 688
TOTAL LIABILITIES 412 76 3,488 8,110
NET POSITION
Net investment in capital assets - - 1,488,749 1,413,086
Unrestricted 92,436 99,028 139,485 293,651
TOTAL NET POSITION 92,436$ 99,028$ 1,628,234$ 1,706,737$
Business-type Activities - Enterprise Funds
Recycling Stormwater Management Utility
621 631
-90-
Exhibit C-1
2012 2011
126,933$ 267,288$
854 340
93,770 119,994
2,490 2,465
224,047 390,087
11,774 10,778
434,113 434,113
- 174,603
1,292,577 1,009,997
(237,941) (205,627)
1,488,749 1,413,086
1,500,523 1,423,864
1,724,570 1,813,951
3,900 7,422
- 764
3,900 8,186
1,488,749 1,413,086
231,921 392,679
1,720,670$ 1,805,765$
Totals
-91-
CITY OF SHOREWOOD, MINNESOTA
NONMAJOR PROPRIETARY FUNDS
COMBINING STATEMENTS OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
2012 2011 2012 2011
OPERATING REVENUES
Charges for services 157,585$ 151,894$ 193,931$ 195,970$
OPERATING EXPENSES
Personal services 6,493 6,181 57,611 44,715
Supplies 14,922 1,634 1,685 3,565
Repairs and maintenance - - 30,030 88,004
Depreciation - - 32,314 25,250
Professional services - - 19,783 29,632
Contracted services 166,162 166,668 131,488 41,752
Other 136 374 935 117
TOTAL OPERATING EXPENSES 187,713 174,857 273,846 233,035
OPERATING LOSS (30,128) (22,963) (79,915) (37,065)
NONOPERATING REVENUES
Interest on investments 529 142 1,412 3,882
Other income 23,007 33,586 - 100
TOTAL NONOPERATING REVENUES 23,536 33,728 1,412 3,982
CHANGE IN NET POSITION (6,592) 10,765 (78,503) (33,083)
NET POSITION, JANUARY 1 99,028 88,263 1,706,737 1,739,820
NET POSITION, DECEMBER 31 92,436$ 99,028$ 1,628,234$ 1,706,737$
Business-type Activities -
Enterprise Funds
Recycling Stormwater Management Utility
631621
-92-
Exhibit C-2
2012 2011
351,516$ 347,864$
64,104 50,896
16,607 5,199
30,030 88,004
32,314 25,250
19,783 29,632
297,650 208,420
1,071 491
461,559 407,892
(110,043) (60,028)
1,941 4,024
23,007 33,686
24,948 37,710
(85,095) (22,318)
1,805,765 1,828,083
1,720,670$ 1,805,765$
Business-type Activities -
Enterprise Funds
Totals
-93-
CITY OF SHOREWOOD, MINNESOTA
NONMAJOR PROPRIETARY FUNDS
COMBINING STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
2012 2011 2012 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers and users 155,320$ 151,025$ 221,399$ 168,439$
Other receipts related to operations 23,007 33,586 - 100
Payments to suppliers, contractors
and other governments (180,808) (169,072) (184,931) (161,166)
Payments to employees (6,569) (6,105) (58,299) (44,896)
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES (9,050) 9,434 (21,831) (37,523)
CASH FLOWS FROM CAPITAL
AND RELATED FINANCING ACTIVITIES
Acquisition of capital assets - - (110,901) (418,085)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on investments 358 322 1,069 4,232
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (8,692) 9,756 (131,663) (451,376)
CASH AND CASH EQUIVALENTS, JANUARY 1 53,146 43,390 214,142 665,518
CASH AND CASH EQUIVALENTS, DECEMBER 31 44,454$ 53,146$ 82,479$ 214,142$
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES
Operating income (loss)(30,128)$ (22,963)$ (79,915)$ (37,065)$
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities
Other income related to operations 23,007 33,586 - 100
Depreciation - - 32,314 25,250
(Increase) decrease in assets
Accounts receivable (1,903) 220 28,127 (27,987)
Special assessments receivable (362) (1,089) (659) 456
Increase (decrease) in liabilities:
Accounts payable 412 (396) (1,010) 1,904
Accrued salaries payable (76) 76 (688) (181)
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES (9,050)$ 9,434$ (21,831)$ (37,523)$
NONCASH CAPITAL AND
RELATED FINANCING ACTIVITIES
Capital assets purchased on account -$ -$ -$ 2,924$
Business-type Activities -
621
Enterprise Funds
Recycling Stormwater Management Utility
631
-94-
Exhibit C-3
2012 2011
376,719$ 319,464$
23,007 33,686
(365,739) (330,238)
(64,868) (51,001)
(30,881) (28,089)
(110,901) (418,085)
1,427 4,554
(140,355) (441,620)
267,288 708,908
126,933$ 267,288$
(110,043)$ (60,028)$
23,007 33,686
32,314 25,250
26,224 (27,767)
(1,021) (633)
(598) 1,508
(764) (105)
(30,881)$ (28,089)$
-$ 2,924$
Business-type Activities -
Enterprise Funds
Totals
-95-
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INTENTIONALLY
-96-
Exhibit D-1CITY OF SHOREWOOD, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - CONTINUED ON THE FOLLOWING PAGES
FOR THE YEAR ENDED DECEMBER 31, 2012
(With comparative actual amounts for the year ended December 31, 2011)
2011
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
REVENUES
Taxes
General property taxes 4,649,909$ 4,649,909$ 4,670,529$ 20,620$ 4,666,192$
Fiscal disparities 113,410 113,410 113,410 - 121,003
Total 4,763,319 4,763,319 4,783,939 20,620 4,787,195
Licenses and permits
Business 13,850 13,850 15,866 2,016 23,393
Nonbusiness 95,350 95,350 159,221 63,871 150,726
Total 109,200 109,200 175,087 65,887 174,119
Intergovernmental
State
Property tax credits - - 245 245 -
Other 70,401 70,401 75,857 5,456 72,968
Total 70,401 70,401 76,102 5,701 72,968
Charges for services
General government 5,650 5,650 21,928 16,278 608
Culture and recreation 29,425 29,425 39,683 10,258 30,133
Total 35,075 35,075 61,611 26,536 30,741
Fines and forfeitures 54,500 54,500 66,230 11,730 52,635
Interest on investments 45,000 45,000 25,602 (19,398) 20,021
Miscellaneous revenue
Refunds and reimbursements - - 67,032 67,032 83,021
Contributions and donations - - 3,514 3,514 4,450
Other 18,900 18,900 47,278 28,378 21,856
Total 18,900 18,900 117,824 98,924 109,327
TOTAL REVENUES 5,096,395 5,096,395 5,306,395 210,000 5,247,006
2012
Budgeted Amounts
-97-
Exhibit D-1CITY OF SHOREWOOD, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2012
(With comparative actual amounts for the year ended December 31, 2011)
2011
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
EXPENDITURES
Current
General government
Mayor and Council
Personal services 16,800$ 16,800$ 16,794$ 6$ 16,794$
Supplies 3,000 3,000 887 2,113 684
Other services and charges 86,315 86,315 80,309 6,006 76,063
Total 106,115 106,115 97,990 8,125 93,541
Administrative
Personal services 319,475 319,475 373,914 (54,439) 152,678
Supplies 24,095 24,095 17,906 6,189 -
Other services and charges 39,935 39,935 82,008 (42,073) 5,138
Total 383,505 383,505 473,828 (90,323) 157,816
City clerk / elections
Personal services - - - - 274,427
Supplies - - - - 16,523
Other services and charges - - - - 36,717
Total - - - - 327,667
Finance
Personal services 128,416 128,416 120,556 7,860 163,795
Supplies 7,300 7,300 8,041 (741) 7,785
Other services and charges 9,150 9,150 11,686 (2,536) 14,089
Total 144,866 144,866 140,283 4,583 185,669
Professional services
Other services and charges 199,320 199,320 190,592 8,728 188,963
Planning and zoning
Personal services 170,666 170,666 181,381 (10,715) 168,156
Supplies 655 655 137 518 261
Other services and charges 9,412 9,412 7,691 1,721 8,080
Total 180,733 180,733 189,209 (8,476) 176,497
Budgeted Amounts
2012
-98-
Exhibit D-1CITY OF SHOREWOOD, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2012
(With comparative actual amounts for the year ended December 31, 2011)
2011
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Budgeted Amounts
2012
EXPENDITURES - CONTINUED
Current - continued
General government - continued
Municipal building
Supplies 16,500$ 16,500$ 40,799$ (24,299)$ 16,402$
Other services and charges 157,750 157,750 149,879 7,871 160,393
Total 174,250 174,250 190,678 (16,428) 176,795
Total general government 1,188,789 1,188,789 1,282,580 (93,791) 1,306,948
Public safety
Police protection
Other services and charges 989,085 989,085 992,711 (3,626) 997,605
Fire protection
Other services and charges 332,805 332,805 331,987 818 337,130
Animal control
Other services and charges - - - - (834)
Protective inspection
Personal services 118,049 118,049 114,396 3,653 122,171
Supplies 200 200 242 (42) 154
Other services and charges 5,450 5,450 5,813 (363) 4,438
Total 123,699 123,699 120,451 3,248 126,763
Total public safety 1,445,589 1,445,589 1,445,149 440 1,460,664
Public works
General maintenance
Personal services 418,633 418,633 417,331 1,302 272,414
Supplies 172,575 172,575 120,685 51,890 79,175
Other services and charges 134,439 134,439 121,759 12,680 43,832
Total 725,647 725,647 659,775 65,872 395,421
-99-
Exhibit D-1CITY OF SHOREWOOD, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2012
(With comparative actual amounts for the year ended December 31, 2011)
2011
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Budgeted Amounts
2012
EXPENDITURES - CONTINUED
Current - continued
Public works - continued
Streets and highways
Personal services -$ -$ -$ -$ 95,619$
Supplies - - - - 73,044
Other services and charges - - - - 25,340
Total - - - - 194,003
Snow and ice removal
Personal services 55,024 55,024 27,502 27,522 37,959
Supplies 45,117 45,117 29,509 15,608 29,462
Total 100,141 100,141 57,011 43,130 67,421
Traffic control
Supplies - - - - 6,467
Other services and charges - - - - 54,307
Total - - - - 60,774
Sanitation and waste removal
Personal services - - - - 627
Supplies - - - - 30
Other services and charges - - - - 7,847
Total - - - - 8,504
Tree maintenance
Personal services - - - - 21,261
Supplies - - - - 331
Other services and charges - - - - 8,433
Total - - - - 30,025
City engineer
Personal services 90,872 90,872 84,615 6,257 96,220
Supplies 200 200 144 56 496
Other services and charges 11,960 11,960 21,689 (9,729) 13,549
Total 103,032 103,032 106,448 (3,416) 110,265
Total public works 928,820 928,820 823,234 105,586 866,413
-100-
Exhibit D-1CITY OF SHOREWOOD, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2012
(With comparative actual amounts for the year ended December 31, 2011)
2011
Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Budgeted Amounts
2012
EXPENDITURES - CONTINUED
Current - continued
Public works - continued
Culture and recreation
Personal services 169,344$ 169,344$ 139,022$ 30,322$ 152,118$
Supplies 19,800 19,800 18,266 1,534 17,393
Other services and charges 60,650 60,650 48,254 12,396 87,090
Total culture and recreation 249,794 249,794 205,542 44,252 256,601
Total current expenditures 3,812,992 3,812,992 3,756,505 56,487 3,890,626
Capital outlay
General government - - 2,811 (2,811) 2,913
Public safety 503,038 503,038 503,038 - 500,766
Public works - - - - 1,057
Total capital outlay 503,038 503,038 505,849 (2,811) 504,736
TOTAL EXPENDITURES 4,316,030 4,316,030 4,262,354 53,676 4,395,362
EXCESS OF REVENUES
OVER EXPENDITURES 780,365 780,365 1,044,041 263,676 851,644
OTHER FINANCING SOURCES (USES)
Transfers in 40,000 40,000 - (40,000) 40,000
Transfers out (907,800) (907,800) (907,800) - (930,409)
TOTAL OTHER FINANCING
SOURCES (USES)(867,800) (867,800) (907,800) (40,000) (890,409)
NET CHANGE IN FUND BALANCES (87,435) (87,435) 136,241 223,676 (38,765)
FUND BALANCES, JANUARY 1 3,488,227 3,488,227 3,488,227 - 3,526,992
FUND BALANCES, DECEMBER 31 3,400,792$ 3,400,792$ 3,624,468$ 223,676$ 3,488,227$
-101-
Exhibit E-1CITY OF SHOREWOOD, MINNESOTA
DEBT SERVICE FUNDS
COMBINING BALANCE SHEET
DECEMBER 31, 2012
2007A 2007B 2007C 2008
Public Safety Public Safety Public Safety Lease Revenue
Building Building Building Bond Total
ASSETS
Cash and temporary investments 13,097$ 2,854$ 761$ 3,213$ 19,925$
Lease receivable 3,480,000 3,610,000 1,285,000 - 8,375,000
TOTAL ASSETS 3,493,097$ 3,612,854$ 1,285,761$ 3,213$ 8,394,925$
LIABILITIES
Accounts payable 745$ 740 740 -$ 2,225$
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - lease 3,480,000 3,610,000 1,285,000 - 8,375,000
FUND BALANCES
Restricted for debt service 12,352 2,114 21 3,213 17,700
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES
AND FUND BALANCES 3,493,097$ 3,612,854$ 1,285,761$ 3,213$ 8,394,925$
-102-
Exhibit E-2CITY OF SHOREWOOD, MINNESOTA
DEBT SERVICE FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
FOR THE YEAR ENDED DECEMBER 31, 2012
2007A 2007B 2007C 2008
Public Safety Public Safety Public Safety Lease Revenue
Building Building Building Bond Total
REVENUES
Lease payments 401,125$ 416,178$ 161,441$ -$ 978,744$
Interest on investments 746 - - - 746
TOTAL REVENUES 401,871 416,178 161,441 - 979,490
EXPENDITURES
Debt service
Principal 245,000 255,000 105,000 50,000 655,000
Interest and service charges 160,135 165,918 61,176 52,200 439,429
TOTAL EXPENDITURES 405,135 420,918 166,176 102,200 1,094,429
DEFICIENCY OF REVENUES
UNDER EXPENDITURES (3,264) (4,740) (4,735) (102,200) (114,939)
OTHER FINANCING SOURCES
Transfers in 3,824 3,965 1,557 102,200 111,546
Transfer out (9,346) - - - (9,346)
TOTAL OTHER
FINANCING SOURCES (USES)(5,522) 3,965 1,557 102,200 102,200
NET CHANGE IN FUND BALANCES (8,786) (775) (3,178) - (12,739)
FUND BALANCES, JANUARY 1 21,138 2,889 3,199 3,213 30,439
FUND BALANCES, DECEMBER 31 12,352$ 2,114$ 21$ 3,213$ 17,700$
-103-
Exhibit F-1CITY OF SHOREWOOD, MINNESOTA
AGENCY FUND
COMBINING SCHEDULE OF CHANGES IN ASSETS AND LIABILITIES
FOR THE YEAR ENDED DECEMBER 31, 2012
Balance Balance
January 1 Additions Deductions December 31
Developer Escrow Accounts
ASSETS
Cash and temporary investments 68,508$ 12,038$ (33,459)$ 47,087$
LIABILITIES
Escrow deposits payable 68,508$ 12,038$ (33,459)$ 47,087$
-104-
Exhibit G-1CITY OF SHOREWOOD, MINNESOTA
SUPPLEMENTARY INFORMATION
SUMMARY FINANCIAL REPORT
REVENUES AND EXPENDITURES FOR GENERAL OPERATIONS
GOVERNMENTAL FUNDS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
2012 2011
REVENUES
Taxes 4,783,939$ 4,787,195$ (0.07) %
Licenses and permits 175,087 174,119 0.56
Intergovernmental 76,102 72,968 4.30
Charges for services 121,625 102,500 18.66
Fines and forfeits 66,230 52,635 25.83
Interest on investments 61,584 56,705 8.60
Miscellaneous 1,115,836 1,032,566 8.06
TOTAL REVENUES 6,400,403$ 6,278,688$ 1.94 %
Per Capita 875$ 859$ 1.87 %
EXPENDITURES
Current
General government 1,288,704$ 1,306,948$ (1.40) %
Public safety 1,445,149 1,460,664 (1.06)
Public works 823,234 866,413 (4.98)
Culture and recreation 331,524 343,326 (3.44)
Capital outlay
General government 2,811 34,733 (91.91)
Public safety 503,038 500,766 0.45
Public works 655,125 814,854 (19.60)
Culture and recreation 69,084 106,648 (35.22)
Debt service
Principal 655,000 625,000 4.80
Interest and service charges 439,429 447,307 (1.76)
TOTAL EXPENDITURES 6,213,098$ 6,506,659$ (4.51) %
Per Capita 850$ 890$ (4.58) %
Total Long-term Indebtedness 9,515,000$ 10,170,000$ (6.44) %
Per Capita 1,301$ 1,392$ (6.50)
General Fund Balance - December 31 3,624,468$ 3,488,227$ 3.91 %
Per Capita 496$ 477$ 3.84
The purpose of this report is to provide a summary of financial information concerning the City of Shorewood to interested
citizens. The complete financial statements may be examined at City Hall, 5755 Country Club Road, Shorewood, Minnesota
55331. Questions about this report should be directed to Bruce DeJong, Finance Director at (952)-474-3236.
Percent
Increase
(Decrease)
Total
-105-
THIS PAGE IS LEFT BLANK
INTENTIONALLY
-106-
STATISTICAL SECTION (UNAUDITED)
CITY OF SHOREWOOD
SHOREWOOD, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2012
-107-
THIS PAGE IS LEFT BLANK
INTENTIONALLY
-108-
STATISTICAL SECTION (UNAUDITED)
This part of the City of Shorewood’s comprehensive annual financial report presents detailed information as a context for
understanding what the information in the financial statements, note disclosures, and required supplementary information says about
the government’s overall financial health.
Financial trends
These schedules contain trend information to help the reader understand how the government’s financial performance and well-
being have changed over time.
Revenue capacity
These schedules contain information to help the reader assess the government’s most significant local revenue source, the
property tax.
Debt capacity
These schedules present information to help the reader assess the affordability of the government ’s current levels of outstanding
debt and the government’s ability to issue additional debt in the future.
Demographic and economic information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the
government’s financial activities take place.
Operating information
These schedules contain service and infrastructure data to help the reader understand how the information in the government’s
financial report relocates to the services the government provides and the activities it performs.
-109-
CITY OF SHOREWOOD, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
NET POSITION BY COMPONENT
LAST EIGHT FISCAL YEARS
(accrual basis of accounting)
2004 2005 2006 2007
Governmental activities
Net investment in capital assets 12,167,269$ 11,372,213$ 11,690,620$ 10,960,550$
Restricted - - 24,632 -
Unrestricted 6,669,073 6,316,707 5,716,027 6,147,185
Total governmental activities net position 18,836,342$ 17,688,920$ 17,431,279$ 17,107,735$
Business-type activities
Net investment in capital assets 6,427,358$ 6,172,309$ 5,668,683$ 6,066,229$
Unrestricted 7,470,272 8,182,612 9,829,761 10,422,397
Total business-type activities net position 13,897,630$ 14,354,921$ 15,498,444$ 16,488,626$
Total primary government
Net investment in capital assets 18,594,627$ 17,544,522$ 17,359,303$ 17,026,779$
Restricted - - 24,632 -
Unrestricted 14,139,345 14,499,319 15,545,788 16,569,582
Total primary government 32,733,972$ 32,043,841$ 32,929,723$ 33,596,361$
Note: Net position are not available for years prior to 2004.
Fiscal Year
-110-
Table 1
2008 2009 2010 2011 2012
9,430,566$ 9,480,314$ 9,525,991$ 9,223,669$ 8,487,162$
- - - - -
7,400,859 7,909,106 8,252,497 7,964,703 7,979,370
16,831,425$ 17,389,420$ 17,778,488$ 17,188,372$ 16,466,532$
6,631,854$ 6,482,297$ 6,494,996$ 6,675,613$ 6,494,076$
10,186,824 9,449,210 8,666,149 8,186,835 8,148,173
16,818,678$ 15,931,507$ 15,161,145$ 14,862,448$ 14,642,249$
16,062,420$ 15,962,611$ 16,020,987$ 15,899,282$ 14,981,238$
- - - - -
17,587,683 17,358,316 16,918,646 16,151,538 16,127,543
33,650,103$ 33,320,927$ 32,939,633$ 32,050,820$ 31,108,781$
Fiscal Year
-111-
CITY OF SHOREWOOD, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
CHANGES IN NET POSITION - CONTINUED ON THE FOLLOWING PAGES
LAST EIGHT FISCAL YEARS
(accrual basis of accounting)
2004 2005 2006 2007
Expenses
Governmental activities
General government 1,074,028$ 1,222,510$ 1,357,714$ 1,321,971$
Public safety 2,972,094 1,690,903 1,806,915 1,819,250
Public works 2,451,825 5,019,967 2,275,402 1,971,571
Culture and recreation 254,081 246,381 233,881 258,906
Interest on long-term debt 607,862 606,189 600,723 1,000,230
Total governmental activities expenses 7,359,890 8,785,950 6,274,635 6,371,928
Business-type activities
Water 591,858 567,854 488,513 636,506
Sewer 735,480 740,174 785,638 952,107
Recycling 106,933 105,823 124,354 91,157
Stormwater management utility 106,757 73,885 171,190 63,888
Liquor 2,152,411 2,006,107 2,017,217 1,885,537
Total business-type activities expenses 3,693,439 3,493,843 3,586,912 3,629,195
Total expenses 11,053,329$ 12,279,793$ 9,861,547$ 10,001,123$
Program revenues
Governmental activities
Charges for services
General government 51,069$ 112,107$ 25,340$ 41,475$
Public safety 983,684 1,055,758 1,060,506 896,731
Public works - - - -
Culture and recreation 1,080 1,575 1,800 1,960
Operating grants and contributions 119,594 100,910 31,730 99,800
Capital grants and contributions 996,967 2,404,367 395,229 132,912
Total governmental activities program revenues 2,152,394 3,674,717 1,514,605 1,172,878
Business-type activities
Charges for services
Water 620,189 649,772 1,350,041 782,549
Sewer 866,350 833,939 836,175 832,956
Recycling 114,987 116,517 144,886 89,934
Stormwater management utility 85,978 102,649 129,708 164,413
Liquor 2,199,139 2,040,314 1,984,344 1,788,835
Operating grants and contributions - - - -
Capital grants and contributions - - - -
Total business-type activities program revenues 3,886,643 3,743,191 4,445,154 3,658,687
Total program revenues 6,039,037$ 7,417,908$ 5,959,759$ 4,831,565$
Fiscal Year
-112-
Table 2
2008 2009 2010 2011 2012
1,483,913$ 1,486,281$ 1,235,098$ 1,405,791$ 1,331,286$
1,906,890 1,904,966 1,893,413 1,960,894 1,947,868
2,485,752 1,941,272 2,231,473 2,031,136 2,162,123
273,054 394,110 452,437 412,257 460,879
1,002,423 638,768 474,082 449,773 428,887
7,152,032 6,365,397 6,286,503 6,259,851 6,331,043
657,776 659,113 643,886 690,363 689,205
921,238 955,956 980,173 1,151,626 1,065,926
96,945 99,286 173,896 174,857 187,713
106,143 106,847 131,107 233,035 273,846
16,167 129 25 - -
1,798,269 1,821,331 1,929,087 2,249,881 2,216,690
8,950,301$ 8,186,728$ 8,215,590$ 8,509,732$ 8,547,733$
32,528$ 34,064$ 53,381$ 108,394$ 144,883$
793,041 634,742 624,330 544,749 604,400
- 6,279 - 6,293 4,137
605 35,843 58,661 72,678 79,206
90,493 90,681 99,114 113,717 102,959
674,343 43 114,330 - -
1,591,010 801,652 949,816 845,831 935,585
752,338 784,318 668,676 672,793 757,395
829,117 802,252 845,043 819,496 831,640
64,629 65,112 146,002 151,894 157,585
204,618 191,157 198,593 196,070 193,931
- - - - -
27,950 28,488 28,762 33,586 23,007
- - - 15,000 22,400
1,878,652 1,871,327 1,887,076 1,888,839 1,985,958
3,469,662$ 2,672,979$ 2,836,892$ 2,734,670$ 2,921,543$
Fiscal Year
-113-
CITY OF SHOREWOOD, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
CHANGES IN NET POSITION - CONTINUED
LAST EIGHT FISCAL YEARS
(accrual basis of accounting)
2004 2005 2006 2007
Net revenues (expenses)
Governmental activities (5,207,496)$ (5,111,233)$ (4,760,030)$ (5,199,050)$
Business-type activities 193,204 249,348 858,242 29,492
Total primary government (5,014,292)$ (4,861,885)$ (3,901,788)$ (5,169,558)$
General Revenues and Other Changes in Net Position
General Revenues
Governmental activities
Taxes
Property taxes, levied for general purpose 3,345,326$ 3,770,702$ 4,144,543$ 4,360,254$
Grants and contributions not restricted to specific programs 4,723 4,785 4,925 37,746
Unrestricted investment earnings 127,853 201,024 327,921 621,234
Gain on sale of capital assets - 4,300 - -
Transfers 5,000 (17,000) 25,000 (143,728)
Total governmental activities general revenues 3,482,902 3,963,811 4,502,389 4,875,506
Business-type activities
Unrestricted investment earnings 144,163 190,943 310,281 434,072
Gain on sale of capital assets - - - 382,890
Transfers (5,000) 17,000 (25,000) 143,728
Total business-type activities general revenues 139,163 207,943 285,281 960,690
Total primary government 3,622,065$ 4,171,754$ 4,787,670$ 5,836,196$
Change in Net Position
Governmental activities (1,724,594)$ (1,147,422)$ (257,641)$ (323,544)$
Business-type activities 332,367 457,291 1,143,523 990,182
Total primary government (1,392,227)$ (690,131)$ 885,882$ 666,638$
Note: Changes in Net position are not available for years prior to 2004.
Fiscal Year
-114-
Table 2
2008 2009 2010 2011 2012
(5,561,022)$ (5,563,745)$ (5,336,687)$ (5,414,020)$ (5,395,458)$
80,383 49,996 (42,011) (361,042) (230,732)
(5,480,639)$ (5,513,749)$ (5,378,698)$ (5,775,062)$ (5,626,190)$
4,582,909$ 4,743,174$ 4,744,348$ 4,733,948$ 4,761,213$
19,957 4,940 4,487 4,751 6,019
641,846 333,626 132,359 56,705 61,584
- - 31,130 28,500 -
40,000 1,040,000 813,431 - -
5,284,712 6,121,740 5,725,755 4,823,904 4,828,816
289,669 102,833 85,080 62,345 64,135
- - - - -
(40,000) (1,040,000) (813,431) - -
249,669 (937,167) (728,351) 62,345 64,135
5,534,381$ 5,184,573$ 4,997,404$ 4,886,249$ 4,892,951$
(276,310)$ 557,995$ 389,068$ (590,116)$ (566,642)$
330,052 (887,171) (770,362) (298,697) (166,597)
53,742$ (329,176)$ (381,294)$ (888,813)$ (733,239)$
Fiscal Year
-115-
CITY OF SHOREWOOD, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
2003 2004 2005 2006
General fund
Reserved -$ -$ 48,593$ -$
Unreserved 2,546,472 2,941,223 2,944,588 3,383,906
Nonspendable - - - -
Unassigned - - - -
Total general fund 2,546,472$ 2,941,223$ 2,993,181$ 3,383,906$
All other governmental funds
Reserved 205,350$ 191,410$ 238,873$ 262,438$
Unreserved, reported in
Special revenue funds - - - -
Capital project funds 4,562,479 3,566,803 3,116,437 2,197,367
Nonspendable - - - -
Restricted - - - -
Assigned - - - -
Unassigned - - - -
Total all other governmental funds 4,767,829$ 3,758,213$ 3,355,310$ 2,459,805$
Fiscal Year
-116-
Table 3
2007 2008 2009 2010 2011 2012
-$ 47,750$ 500$ 49,060$ -$ -$
3,761,509 3,660,359 3,555,224 3,477,932 - -
- - - - 48,000 50,000
- - - - 3,440,227 3,574,468
3,761,509$ 3,708,109$ 3,555,724$ 3,526,992$ 3,488,227$ 3,624,468$
10,040,556$ 10,033,342$ 1,934,628$ 96,333$ -$ -$
- - - (17,650) - -
2,473,097 3,743,980 4,252,870 4,520,558 - -
- - - - 150,068 150,068
- - - - 30,439 17,700
- - - - 4,229,528 4,368,656
- - - - - (75,325)
12,513,653$ 13,777,322$ 6,187,498$ 4,599,241$ 4,410,035$ 4,461,099$
Fiscal Year
-117-
CITY OF SHOREWOOD, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
2003 2004 2005 2006
Revenues
Taxes 3,071,853$ 3,344,442$ 3,750,633$ 4,141,539$
Licenses and permits 334,424 310,055 334,720 382,408
Intergovernmental 1,947,484 1,014,410 2,432,656 365,732
Charges for services 48,689 44,169 50,752 45,450
Fines and forfeitures 88,949 81,841 90,149 79,040
Special assessments 10,217 10,737 6,928 895
Interest on investments 146,331 127,853 201,024 327,921
Miscellaneous 551,167 740,030 1,134,429 1,110,860
Total revenues 6,199,114 5,673,537 8,001,291 6,453,845
Expenditures
General government 1,038,909 1,037,043 1,169,096 1,264,509
Public safety 999,049 1,028,689 1,124,620 1,257,998
Public works 420,608 477,596 570,080 626,048
Culture and recreation 164,540 168,278 167,519 169,411
Capital Outlay 10,571,521 2,896,330 4,307,721 2,571,204
Debt service
Principal 46,402 48,069 384,842 486,728
Interest and service charges 460,759 637,397 611,358 607,727
Bond issuance costs - - - -
Total expenditures 13,701,788 6,293,402 8,335,236 6,983,625
Excess (deficiency) of revenues
over (under) expenditures (7,502,674) (619,865) (333,945) (529,780)
Other financing sources (uses)
Transfers in 391,107 328,500 542,000 635,000
Sale of capital assets - - - -
Proceeds from sale of bonds 2,368,378 - - -
Bonds refunded - - - -
Discount on long-term debt issued - - - -
Transfers out (391,107) (323,500) (559,000) (610,000)
Total other financing
sources (uses)2,368,378 5,000 (17,000) 25,000
Net change in fund balances (5,134,296)$ (614,865)$ (350,945)$ (504,780)$
Debt service as a percentage of
Noncapital expenditures 16.2%11.2%12.7%20.1%
Fiscal Year
-118-
Table 4
2007 2008 2009 2010 2011 2012
4,332,741$ 4,582,602$ 4,703,368$ 4,717,204$ 4,787,195$ 4,783,939$
256,472 195,419 127,883 154,113 174,119 175,087
224,286 753,605 66,411 173,334 72,968 76,102
50,819 50,753 41,649 100,899 102,500 121,625
77,777 53,369 52,968 55,806 52,635 66,230
418 - - 333 - -
621,234 641,846 333,626 132,359 56,705 61,584
1,077,012 1,053,916 1,059,914 1,037,522 1,032,566 1,115,836
6,640,759 7,331,510 6,385,819 6,371,570 6,278,688 6,400,403
1,253,223 1,443,549 1,386,614 1,147,198 1,306,948 1,288,704
1,263,921 1,352,254 1,392,139 1,392,923 1,460,664 1,445,149
718,350 760,287 670,954 859,069 866,413 823,234
190,931 229,259 326,502 342,654 343,326 331,524
1,123,796 2,164,366 1,953,756 2,075,109 1,457,001 1,230,058
534,594 485,000 520,000 600,000 625,000 655,000
956,532 977,957 818,063 516,167 447,307 439,429
- 58,569 - - - -
6,041,347 7,471,241 7,068,028 6,933,120 6,506,659 6,213,098
599,412 (139,731) (682,209) (561,550) (227,971) 187,305
770,091 933,366 2,059,773 1,942,550 984,541 1,170,216
- - - 31,130 - -
10,000,000 1,310,000 - - - -
- - (8,100,000) (1,900,000) - -
(24,233) - - - - -
(913,819) (893,366) (1,019,773) (1,129,119) (984,541) (1,170,216)
9,832,039 1,350,000 (7,060,000) (1,055,439) - -
10,431,451$ 1,210,269$ (7,742,209)$ (1,616,989)$ (227,971)$ 187,305$
26.3%23.1%22.4%19.1%18.4%18.3%
Fiscal Year
-119-
CITY OF SHOREWOOD, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
TAX CAPACITY, MARKET VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
(Shown by year of tax collectability)
Taxable market value
Personal property
Real estate
Total taxable market value
Estimated actual value of taxable property
Taxable market value as a percentage of
estimated actual value 86.14 %73.30 %75.92 %93.39 %
Tax capacity
Personal property
Real estate
Total tax capacity
Contribution to fiscal disparities pool
Receivable from fiscal disparities pool
Net tax capacity
Tax levies
General
Debt service
Total
Direct tax rate
General 28.816 %25.843 %25.971 %25.408 %
Debt service 3.082 4.552 3.870 3.535
Total 31.898 %30.395 %29.841 %28.944 %
Note: Property in the county is reassessed annually. The county assesses property at approximately 90
percent of actual value for all types of real and personal property.
Source: Hennepin County Assessor
3,678,592$
(213,988)
379,072
9,896,826$ 11,252,371$
2,851,847$
12,836,707$
511,803
4,190,395$
3,962,200$
1,066,523,800$
918,732,000$
914,769,800 1,173,029,000
4,130,300$
1,033,460,200
3,831,300$
1,037,291,500$
1,415,129,000$
3,830,656$
344,682
12,671,623
10,980,358
11,055,767
396,666
3,156,847$
2,907,997$
512,232 305,000
(200,062)
14,477,835$
14,269,195
78,073$
9,658,728
9,736,801
(184,657)
85,635$
1,318,313,000
4,361,600$
1,322,674,600$
1,416,341,600$ 1,550,488,900$
1,177,159,300$
2004
81,333$ 75,409$
12,590,290
14,354,830
(276,939)
399,944
3,420,229$
3,333,864$
496,792
200620052003
-120-
Table 5
95.26 %97.35 %98.93 %99.91 %99.89 %98.77 %
23.501 %22.793 %22.463 %22.771 %24.790 %26.141 %
3.439 3.119 3.336 3.372 3.604 3.801
26.940 %25.912 %25.799 %26.143 %28.394 %29.942 %
(389,965)
435,462
15,908,723$
4,158,672$
604,647
4,763,319$
617,620
4,776,292$
555,078
4,611,995$
561,135
2012
5,291,700$
1,430,712,101
1,436,003,801$
1,453,867,700$
102,084$
15,761,142
15,863,226
84,780$
3,835,173$
17,619,943
91,548$
18,305,114
4,158,672$
18,513,585$
18,396,662
(396,336)
4,056,917$
17,798,714$ 16,319,066$
16,219,969
(308,590)
16,130,097
407,687
4,763,319$
604,647
4,158,672$
16,775,778$
1,507,900,600
1,636,567,900$
16,620,629
1,512,848,900$
(432,995)
4,948,300$
2011
1,514,456,700$
95,216$
1,651,054,700
1,655,819,600$
1,673,720,100$ 1,638,118,400$
4,764,900$
513,259
(419,002)
478,935
16,715,845 18,176,405
4,629,900$
88,848$
18,087,557
89,872$
1,597,262,400 1,475,529,200
4,591,200$
1,553,767,900$
1,480,120,400$ 1,601,599,000$
1,645,188,300$
4,776,292$
616,000
4,160,292$
18,269,931$
4,336,600$
17,704,723
(351,789)
445,780
2009
1,631,938,000
526,521
4,396,308$
2007 20102008
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CITY OF SHOREWOOD, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
PROPERTY TAX CAPACITY RATES - DIRECT AND OVERLAPPING GOVERNMENTS
(PER $1,000 OF TAX CAPACITY IN 2003 - 2012)
Year
Taxes
Payable City County No. 276 No. 277
2003 31.898 %50.607 %24.215 %20.758 %1.236 %1.616 %7.757 %
2004 30.395 47.324 23.125 14.354 0.768 0.732 7.488
2005 29.841 44.172 21.989 16.250 1.276 1.375 7.382
2006 28.944 41.016 22.952 10.522 1.072 0.787 6.998
2007 26.940 39.110 24.793 9.911 1.121 0.743 7.310
2008 25.912 38.571 17.980 8.521 1.404 1.302 7.397
2009 25.799 40.413 17.186 8.284 1.489 1.246 7.154
2010 26.143 42.640 18.657 9.772 1.511 1.279 8.138
2011 28.394 45.840 21.274 10.900 1.606 1.352 9.172
2012 29.942 48.231 23.015 17.262 1.705 1.387 9.923
Source: Hennepin County Assessor
(1) Includes vocational school
School District
(1)
Watershed District
Overlapping Rates
Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates
apply to all City property owners (e.g. the rates for special districts apply only to the proportion of the government's property owners
whose property is located within the geographic boundaries of the special district).
No. 3 No. 4 Misc.
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Table 6
115.713 %116.093 %112.256 %
109.100 109.064 100.329
104.660 104.759 98.921
100.982 100.697 88.552
99.274 98.896 84.392
91.264 91.162 81.805
92.041 91.798 83.139
97.089 96.857 88.204
106.286 106.032 95.912
112.816 112.498 107.063
Totals
School District No. 276
District
School
District
No. 277
Watershed
District
Watershed Watershed
District
No. 3No. 3 No. 4
-123-
Table 7CITY OF SHOREWOOD, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
PRINCIPAL TAXPAYERS
DECEMBER 31, 2012
Tax Tax
Taxpayer Capacity Rank Capacity Rank
Big Box One, LLC 151,250$ 1 0.95 %-$ - - %
Shorewood Village Shopping Center, Inc.123,250 2 0.77 37,050 - 0.37
Two S Properties 103,350 3 0.65 - - -
R & M Fayfield 72,626 4 0.46 - - -
South Lake Office Building LLC 69,630 5 0.44 - - -
Jack & Gretchen Norqual 69,536 6 0.44 - - -
Elaine & Gary Jarrett 58,388 7 0.37 - - -
First State Bank Excelsior (Beacon Bank)56,870 8 0.36 39,250 - 0.40
Minnetonka Country Club 49,830 9 0.31 48,850 - 0.49
Waterford Center LLP 43,930 10 0.28 39,250 - 0.40
Shurgard Storage Centers - - - 103,736 - 1.05
James C. Akins - - - 51,025 - 0.52
Thomas J. & Cynthia J. Redmond - - - 35,380 - 0.36
The Mary Sue Simon Qprt - - - 35,190 - 0.36
Russel & Luaina Hagen - - - 31,935 - 0.32
Totals 798,660$ 5.02 %421,666$ 4.26 %
Source: Hennepin County Assessor
Tax Capacity
of Total
Tax Capacity
Percent
2012 2003
Percent
of Total
-124-
Table 8CITY OF SHOREWOOD, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(1)
Collection Collection
Fiscal Total of Current in subsequent Total
Year Levy Year's Levy years Collections
2003 3,156,847$ 3,131,798$ 99.21 %24,693$ 3,156,491$ 99.99 %
2004 3,420,229 3,390,137 99.12 29,754 3,419,891 99.99
2005 3,830,656 3,783,074 98.76 46,458 3,829,532 99.97
2006 4,190,395 4,145,829 98.94 41,120 4,186,949 99.92
2007 4,396,308 4,320,289 98.27 77,258 4,397,547 100.03
2008 4,611,995 4,546,899 98.59 61,611 4,608,510 99.92
2009 4,776,292 4,649,904 97.35 116,716 4,766,620 99.80
2010 4,776,292 4,685,060 98.09 81,812 4,766,872 99.80
2011 4,763,319 4,706,900 98.82 45,859 4,752,759 99.78
2012 4,763,319 4,717,658 99.04 - 4,717,658 99.04
Percent
Collections
of Total
(1) Includes state paid property tax credits.
Percentage
of Levy
Collected to Levy
-125-
Table 9CITY OF SHOREWOOD, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
RATIO OF NET BONDED DEBT TO
ASSESSED VALUE AND NET BONDED DEBT PER CAPITA
LAST TEN FISCAL YEARS
Business-
type
Activities
General Lease General Total
Fiscal Obligation Revenue Capital Obligation Primary Per
Year Bonds Bonds Leases Revenue Bonds Government Capita
2003 20,000$ 12,365,000$ 159,233$ 2,360,000$ 14,904,233$ 4.31 %1,962$
2004 - 12,365,000 131,134 2,170,000 14,666,134 4.04 1,923
2005 - 12,010,000 101,322 2,745,000 14,856,322 4.00 1,967
2006 - 11,555,000 69,594 3,920,000 15,544,594 4.12 2,073
2007 - 21,090,000 - 3,665,000 24,755,000 6.31 3,301
2008 - 21,915,000 - 3,415,000 25,330,000 5.87 3,199
2009 - 13,295,000 - 3,165,000 16,460,000 4.14 2,076
2010 - 10,795,000 - 2,915,000 13,710,000 3.19 1,876
2011 - 10,170,000 - 2,675,000 12,845,000 2.96 1,758
2012 - 9,515,000 - 2,500,000 12,015,000 2.86 1,643
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
See the Demographic and Economic Statistics table on page 133 for personal income and population data.
Personal
Income
Governmental Activities
Percentage of
-126-
Table 10CITY OF SHOREWOOD, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
Less
Amounts
General Available in Net
Fiscal Obligation Debt Service Bonded Per
Year Bonds Funds Debt Capita
2003 20,000$ 108,925$ (88,925)$ (0.01) %(12)$
2004 - - - - -
2005 - - - - -
2006 - - - - -
2007 - - - - -
2008 - - - - -
2009 - - - - -
2010 - - - - -
2011 - - - - -
2012 - - - - -
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
See the Demographic and Economic Statistics table on page 133 for population data.
value information.
See the Tax Capacity, Market Value and Estimated Actual Value of Taxable Property table on pages 120 - 121 for property
Percentage of
Estimated Actual
Value of
Taxable Property
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THIS PAGE IS LEFT BLANK
INTENTIONALLY
-128-
Table 11CITY OF SHOREWOOD, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
DECEMBER 31, 2012
Gross Amount
Bonded of
Debt Used Net Debt
For Net Debt Net Applicable
Calculation Debt to District
Direct Debt
City of Shorewood 9,515,000$ 9,515,000$ 100.00 %9,515,000
Overlapping Debt
School District #276 101,504,548$ 87,293,950$ 19.64 %17,144,532$
School District #277 35,280,000 34,977,241 2.42 846,449
Hennepin County 678,885,000 673,838,501 1.20 8,086,062
Henn Suburban Park District 90,255,000 72,840,200 1.62 1,180,011
Henn Regional RR Authority 39,110,000 38,770,299 1.20 465,244
Metropolitan Council 257,390,000 193,377,711 0.55 1,063,577
Total Overlapping Debt 1,202,424,548$ 1,101,097,902$ 2.61 %28,785,875$
Total Direct and Overlapping Debt 1,211,939,548$ 1,110,612,902$ 3.45 %38,300,875.26$
Sources : Market value data used to estimate applicable percentages provided by the County Board of Equalization
and Assessment. Debt outstanding data provided by the county.
Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This
schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and
businesses of the City. This process recognized that, when considering the government's ability to issue and repay long-term
debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not
imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government.
* The percentage of overlapping debt applicable is estimated using taxable market property values. Applicable percentages
were estimated by determining the portion of the county's taxable market value that is within the City's boundaries and
dividing it by the county's total taxable market value.
District
Applicable to
Percentage
-129-
CITY OF SHOREWOOD, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
LEGAL DEBT MARGIN INFORMATION
LAST TEN FISCAL YEARS
2003 2004 2005 2006
Debt limit 18,374,640$ 20,745,830$ 23,543,186$ 26,453,492$
Total net debt applicable to limit (88,925) - - -
Legal debt margin 18,463,565$ 20,745,830$ 23,543,186$ 26,453,492$
Total net debt applicable to the limit
as a percentage of debt limit (0.5%) - - -
Note: Under state law, the City's outstanding general obligation debt should not exceed 3 percent of the market value of
taxable property. The percentage was changed to 3 percent for fiscal year 2008, prior to that, the percentage was 2 percent.
By law, the general obligation debt subject to the limitation may be offset by amounts set aside for the extinguishment
of those obligations.
Fiscal Year
-130-
Table 12
2007 2008 2009 2010 2011 2012
29,602,408$ 32,031,980$ 33,116,392$ 49,097,037$ 45,385,467$ 43,080,114$
- - - - - -
29,602,408$ 32,031,980$ 33,116,392$ 49,097,037$ 45,385,467$ 43,080,114$
- - - - - -
Legal Debt Margin Calculation for Fiscal Year 2012
Taxable market value 1,436,003,801$
Debt limit (3% of market value)43,080,114$
Debt applicable to limit
General obligation bonds -
Less: amount available in
debt service funds -
Total net debt applicable to limit -
Legal debt margin 43,080,114$
Fiscal Year
-131-
Table 13CITY OF SHOREWOOD, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
PLEDGED-REVENUE COVERAGE
LAST TEN FISCAL YEARS
(1)Net
Fiscal Gross (2)Revenue
Year Revenue Expenses Available Principal Interest
2003 539,287$ 192,689$ 346,598$ 185,000$ 93,280$ 1.25 %
2004 676,287 314,513 361,774 190,000 86,907 1.31
2005 720,438 300,858 419,580 950,000 88,712 0.40
2006 1,264,892 223,243 1,041,649 275,000 79,456 2.94
2007 765,717 259,056 506,661 255,000 81,165 1.51
2008 857,890 278,164 579,726 250,000 172,050 1.37
2009 821,778 250,995 570,783 250,000 142,589 1.45
2010 700,678 238,780 461,898 250,000 125,407 1.23
2011 718,561 299,962 418,599 240,000 116,728 1.17
2012 809,746 313,620 496,126 175,000 100,668 1.80
(1) Including interest and other income
(2) Excluding depreciation and interest on bonds
Revenue from
Fiscal Property
Year Taxes Principal Interest
2003 37,544$ 26,402$ 11,142$ 1.00 %
2004 37,544 28,069 9,475 1.00
2005 37,544 29,842 7,702 1.00
2006 37,544 31,728 5,816 1.00
2007 73,406 69,594 3,812 1.00
2008 - - - -
2009 - - - -
2010 - - - -
2011 - - - -
2012 - - - -
Revenue from
Fiscal Lease
Year Payments Principal Interest
2003 447,704$ -$ 447,704$ 1.00 %
2004 620,596 - 624,650 0.99
2005 948,384 355,000 588,384 1.01
2006 1,040,693 455,000 589,056 1.00
2007 1,034,751 465,000 941,222 0.74
2008 1,037,241 485,000 970,065 0.71
2009 992,835 495,000 737,863 0.81
2010 982,037 555,000 457,840 0.97
2011 902,003 575,000 393,357 0.93
2012 978,744 605,000 372,230 1.00
General Obligation Revenue Bonds
Coverage
Capital Leases
Coverage
Coverage
Lease Revenue Bonds
Debt Service
Debt Service
Debt Service
-132-
Table 14CITY OF SHOREWOOD, MINNESOTA
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
Total Per Capita
Fiscal Personal Personal Median
Year Population (1)Income (2)Income (2)Age (3)
2003 7,595 345,748,000$ 45,344$ 38.7 4.7 %
2004 7,625 362,787,795 48,045 38.7 4.3
2005 7,551 371,695,434 49,566 38.7 3.8
2006 7,499 377,246,826 49,566 38.7 3.3
2007 7,611 392,414,022 49,566 38.7 4.7
2008 7,917 431,535,825 54,425 39.0 7.3
2009 7,929 397,683,475 54,425 39.0 7.4
2010 7,307 429,651,600 58,800 39.1 5.1
2011 7,307 433,743,520 59,360 44.2 51.1 %5.7
2012 7,312 420,264,512 57,476 44.1 49.8 4.6
Data Sources:
(1) Metropolitan Council
(2) Bureau of Economic Analysis
(3) US Census Bureau
(4) US Census Bureau 2010
(5) Minnesota Department of Employment and Economic Development
Graduate Degree (4)
Note: Personal income information is a total for the year.
Rate (5)
Unemployment
Percent of
Population
Which Has a
Bachelor's or Post
-133-
Table 15CITY OF SHOREWOOD, MINNESOTA
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO (1)
Employees Rank Employees Rank
Cub Foods 94 1 6.07 %- N/A %
Minnewashta Elementary School 83 2 5.36 - N/A
Xcel Energy 35 3 2.26 - N/A
Beacon Bank 35 4 2.26 - N/A
Minnetonka County Club 29 5 1.87 - N/A
City of Shorewood 28 *6 1.81 - N/A
Total 304 19.64 %- - %
Total City Employment 1,548
Source: Minnesota Department of Employment and Economic Development
* Includes part-time and temporary seasonal employees.
N/A - indicates not available
(1) Information for 2002 was not available. The table will be updated for future years.
Employer
Percentage
of Total City
Employment
20032012
Percentage
of Total City
Employment
-134-
Table 16CITY OF SHOREWOOD, MINNESOTA
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS (1)
2006 2007 2008 2009 2010 2011 2012
General government 13 13 13 12 12 10 10
Public works
Engineering - - - - - 1 1
Maintenance 6 6 6 6 6 5 5
Culture and recreation
Parks 13 5 5 5 5 3 3
Economic development
Water 1.5 1.5 1.5 1.5 1.5 1.5 1.5
Sewer 1.5 1.5 1.5 1.5 1.5 1.5 1.5
Municipal Liquor 3 2 - - - - -
Total 38 29 27 26 26 22 22
Source: City of Shorewood
(1) Information prior to 2006 was not maintained by the City. The table will be updated on a go-forward basis.
Function
-135-
Table 17CITY OF SHOREWOOD, MINNESOTA
OPERATING INDICATORS BY FUNCTION
LAST SIX FISCAL YEARS (1)
2006 2007 2008 2009 2010 2011 2012
Building/engineering
Permits issued 1,137 710 686 603 591 512 585
Public works
Street sweeping (hours)1,000 1,614 1,500 1,550 1,400 1,600 1,600
Snowplowing (hours)2,000 1,394 1,508 765 1,024 895 616
Equipment repair (hours)2,080 2,080 2,080 2,080 1,280 1,591 1,725
Water
New connections 24 22 13 11 1 2 3
Water mains breaks 3 7 3 3 5 6 7
Average daily consumption (thousands of gallons)482,000 482,000 482,000 467,600 467,600 465,300 465,300
Sewer
Average daily treatment flow (thousands of gallons)1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
Source: City of Shorewood
Note: Indicators are not available for the general government function.
(1) Information prior to 2006 was not maintained by the City. The table will be updated on a go-forward basis.
Function
-136-
Table 18CITY OF SHOREWOOD, MINNESOTA
CAPITAL ASSET STATISTICS BY FUNCTION
LAST SIX FISCAL YEARS (1)
2006 2007 2008 2009 2010 2011 2012
Public works
Highways and streets
Streets (miles)50 51 51 51 51 51 51
Street lights 194 194 194 194 194 194 194
Traffic signals 5 5 5 5 5 5 5
Culture and recreation
Parks division
Parks 7 7 7 7 7 7 7
Parks acreage 102 102 102 102 102 102 102
Baseball diamonds 5 5 5 5 5 5 5
Basketball courts 1 1 1 1 1 1 1
Bike trails (miles)2.45 2.45 2.45 2.45 2.45 2.45 2.45
Hockey rinks/outdoor 3 3 3 3 3 3 3
Softball diamonds 3 3 3 3 3 3 3
Swimming areas 1 1 1 1 1 1 1
Tennis courts 5 5 5 5 5 5 5
Volleyball courts 2 2 2 2 2 2 2
Utilities
Water
Miles of water main 27 28 28 28 28 28 28
Consumers 1,265 1,297 1,310 1,321 1,322 1,324 1,327
Maximum daily capacity (gallons)919,000 919,000 919,000 919,000 919,000 919,000 919,000
Sewer
Miles of sanitary sewer 60 60 60 60 60 60 60
Lift stations 14 14 14 14 14 14 14
Maximum daily treatment capacity (gallons)1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
Storm sewer
Miles of storm sewer 12 12 12 12 12 12 12
Source: City of Shorewood
Note: No capital asset indicators are available for the general government function.
(1) Information prior to 2006 was not maintained by the City. The table will be updated on a go-forward basis.
Function
-137-