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2014 Comp. Annual Financial Report CITY OF SHOREWOOD SHOREWOOD, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014 BILL JOYNES, CITY ADMINISTRATOR REPORT PREPARED BY BRUCE DEJONG, FINANCE DIRECTOR/TREASURER MEMBER OF GOVERNMENT FINANCE OFFICERS ASSOCIATION OF THE UNITED STATES AND CANADA THIS PAGE IS LEFT BLANK INTENTIONALLY CITY OF SHOREWOOD, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS FOR THE YEAR ENDED DECEMBER 31, 2014 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 Statement of Net Position 8 46 Statement of Revenues, Expenses and Changes in Net Position 9 47 Statement of Cash Flows 10 48 Fiduciary Fund Statement of Net Position 11 50 Notes to the Financial Statements 51 Combining and Individual Fund Financial Statements and Schedules Nonmajor Governmental Funds Combining Balance Sheet A-1 76 Combining Statement of Revenues, Expenditures and Changes in Fund Balances A-2 77 Nonmajor Capital Projects Funds Combining Balance Sheet B-1 80 Combining Statement of Revenues, Expenditures and Changes in Fund Balances B-2 81 General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual C-1 82 Debt Service Funds Combining Balance Sheet D-1 86 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances D-2 87 Agency Fund Combining Schedule of Changes in Assets and Liabilities E-1 88 Summary Financial Report Revenues and Expenditures for General Operations - Governmental Funds F-1 89 -1- CITY OF SHOREWOOD, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2014 Table Page No. STATISTICAL SECTION (UNAUDITED) Net Position by Component 1 94 Changes in Net Position 2 96 Fund Balances of Governmental Funds 3 100 Changes in Fund Balances of Governmental Funds 4 102 Tax Capacity, Market Value and Estimated Actual Value of Taxable Property 5 104 Property Tax Capacity Rates - Direct and Overlapping Governments 6 106 Principal Taxpayers 7 108 Property Tax Levies and Collections 8 109 Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita 9 110 Computation of Direct and Overlapping Debt 10 111 Legal Debt Margin Information 11 112 Pledged-Revenue Coverage 12 114 Demographic and Economic Statistics 13 115 Principal Employers 14 116 Full-Time Equivalent City Government Employees by Function 15 117 Operating Indicators by Function 16 118 Capital Asset Statistics by Function 17 119 -2- INTRODUCTORY SECTION CITY OF SHOREWOOD SHOREWOOD, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2014 -3- CITY OF SHOREWOOD, MINNESOTA ELECTED AND APPOINTED OFFICIALS FOR THE YEAR ENDED DECEMBER 31, 2014 Name Title Term Expires Scott Zerby Mayor 12/31/14 Richard Woodruff Council Member 12/31/16 Laura Hotvet Council Member 12/31/14 Debbie Siakel Council Member 12/31/14 Kristine Sundberg Council Member 12/31/16 Name Title Bill Joynes City Administrator Bruce DeJong Finance Director/Treasurer ELECTED APPOINTED -4- 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 City Clerk Pub Works Dir Planning Asst Contracted Services IT/Phones Mound Fire Assessor Recycling Attorney Engineer Bldg Official Recep- tionist Comm Coord Park/Rec Coord Utiliites Parks Maint. Streets Sr Acct Clerk -5- THIS PAGE IS LEFT BLANK INTENTIONALLY -6- -12- FINANCIAL SECTION CITY OF SHOREWOOD SHOREWOOD, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2014 -13- THIS PAGE IS LEFT BLANK INTENTIONALLY -14- 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, 2014, and the related notes to the financial statements, 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. 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 are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, 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 presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 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, 2014, 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 accordance with accounting principles generally accepted in the United States of America. -15- THIS PAGE IS LEFT BLANK INTENTIONALLY -16- Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis 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 knowledge 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. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. 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 basic financial statements. Such 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 basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section and statistical section 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. ABDO, EICK & MEYERS, LLP Minneapolis, Minnesota June 11, 2015 -17- THIS PAGE IS LEFT BLANK INTENTIONALLY -18- 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 narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2014. 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 $31,679,739 (net position). Of this amount, $15,207,422 (unrestricted net position) may be used to meet the City’s ongoing obligations to residents and creditors. • The City’s total net position increased $671,351, which is due to revenues in excess of expenses in governmental activities. • As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $7,450,130, an increase of $234,257 in comparison with the prior year. This increase is primarily the result of revenues exceeding expenditures. Approximately 53.4 percent of this total amount, $3,981,475, 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 $3,981,475, or 72.1 percent of total 2014 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 $2,066,842, or 16.4 percent during the current fiscal year. This was the result of the payoff of G.O. Water Revenue Bonds of 2006 from refunding bonds issued in 2013 in addition to regularly scheduled principal and interest payments. -19- Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplemental information in addition to the basic financial statements themselves. 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 -20- 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 explains the structure and contents of each of the statements. Figure 2 Major features of the Government-wide and Fund Financial Statements Fund Financial Statements Government-wide 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, stormwater management utility, and recycling. -21- 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 of 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 12 individual governmental funds, four of which are Debt Service funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General, Debt Service, Street Reconstruction, and Trail Construction funds, which are considered to be major funds. Data from the other five 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, stormwater management utility, and recycling. 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. The Water, Sewer, and Stormwater Management Utility funds are considered to be major funds of the City, while the Recycling fund is a nonmajor fund. 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 50 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 51 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. Combining and individual fund financial statements and schedules starts on page 76 of this report. -22- 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 case of the City, assets exceeded liabilities and deferred inflows of resources by $31,679,739 at the close of the most recent fiscal year. Of the City’s net position 52.0 percent reflects its investment in capital assets (e.g., land, buildings, machinery and equipment), less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. City of Shorewood’s Summary of Net Position Increase Increase 20142013 (Decrease)20142013 (Decrease) Assets Cash and temporary investments 7,145,458$ 6,707,144$ 438,314$ 7,132,674$ 7,240,221$ (107,547)$ Cash with fiscal agent - - - 270,101 1,422,314 (1,152,213) Receivables 7,697,438 8,553,567 (856,129) 614,843 642,785 (27,942) Prepaids 103,996 33,016 70,980 - - - Land held for resale 150,068 150,068 - - - - Capital assets 10,789,046 10,302,415 486,631 8,878,271 8,965,907 (87,636) Total assets 25,886,006 25,746,210 139,796 16,895,889 18,271,227 (1,375,338) Liabilities Noncurrent liabilities 8,337,883 9,024,725 (686,842) 2,160,000 3,540,000 (1,380,000) Other liabilities 476,982 370,223 106,759 127,291 74,101 53,190 Total liabilities 8,814,865 9,394,948 (580,083) 2,287,291 3,614,101 (1,326,810) Net position Net investment in capital assets 9,754,046 9,212,415 541,631 6,718,271 6,705,907 12,364 Unrestricted 7,317,095 7,138,847 178,248 7,890,327 7,951,219 (60,892) Total net position 17,071,141$ 16,351,262$ 719,879$ 14,608,598$ 14,657,126$ (48,528)$ Governmental Activities Business-type Activities The balance of unrestricted net position is $15,207,422. This may be used to meet the City’s ongoing obligations to citizens and creditors. -23- Governmental activities. Governmental activities increased the City’s net position by $719,879. Key elements of this increase are as follows: City of Shorewood’s Changes in Net Position Increase Increase 20142013 (Decrease)20142013 (Decrease) Revenues Program revenues Charges for services 946,281$ 908,458$ 37,823$ 1,681,045$ 1,732,696$ (51,651)$ Operating grants and contributions 48,284 144,112 (95,828) 31,279 25,830 5,449 Capital grants and contributions 811,522 - 811,522 115,490 53,200 62,290 General revenues Property taxes 4,854,521 4,768,989 85,532 - - - Grants and contributions not restricted to specific programs 5,848 5,818 30 - - - Unrestricted investment earnings 86,530 37,461 49,069 95,130 32,913 62,217 Gain on sale of capital assets - 76,981 (76,981) - - - Total revenues 6,752,986 5,941,819 811,167 1,922,944 1,844,639 78,305 Expenses General government 1,277,118 1,310,296 (33,178) - - - Public safety 2,036,394 2,010,338 26,056 - - - Public works 1,991,852 1,884,986 106,866 - - - Culture and recreation 397,365 471,784 (74,419) - - - Interest on long-term debt 355,378 379,685 (24,307) - - - Water - - - 690,479 693,193 (2,714) Sewer - - - 873,711 847,097 26,614 Stormwater Management Utility - - - 203,825 107,935 95,890 Recycling - - - 178,457 181,537 (3,080) Total expenses 6,058,107 6,057,089 1,018 1,946,472 1,829,762 116,710 Increase (decrease) in net position before transfers 694,879 (115,270) 810,149 (23,528) 14,877 (38,405) Transfers 25,000 - 25,000 (25,000) - (25,000) Change in net position 719,879 (115,270) 835,149 (48,528) 14,877 (63,405) Net position, January 1 16,351,262 16,466,532 (115,270) 14,657,126 14,642,249 14,877 Net position, December 31 17,071,141$ 16,351,262$ 719,879$ 14,608,598$ 14,657,126$ (48,528)$ 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 14.0%Operating grants and contributions 0.7% Capital grants and contributions 12.0% Property taxes 71.9% Grants and contributions not restricted to specific programs 1.3% Unrestricted investment earnings 0.1% -25- Business-type activities. Business-type activities decreased the City’s net position by $48,528. Expenses and Program Revenues - Business-type Activities $- $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000 $1,000,000 Water Sewer Recycling Stormwater management utility Expenses Program revenues Revenues by Source - Business-type Activities Charges for services 87.5% Operating grants and contributions 1.6% Capital grants and contributions 6.0% Unrestricted investment earnings 4.9% -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 $7,450,130, an increase of $234,257 in comparison with the prior year. Approximately 53 percent of this total amount, $3,981,475 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 ($103,996), 2) Restricted ($25,654), and 3) Assigned ($3,339,005). 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 $4,085,471. As a measure of the General fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures and transfers out. Unassigned fund balance represents 72.1 percent of same year fund expenditures and transfers out, whereas, total fund balance represents 74.0 percent. The fund balance of the City’s General fund increased $109,113 during the current fiscal year. The Debt Service fund has a total fund balance of $25,654, all of which is restricted for the payment of debt service. The increase in fund balance of $1,204 was in line with the City’s debt service financing plan. The Street Reconstruction fund has a fund balance of $1,536,672. The fund balance decreased by $606,656 during the current fiscal year due to expenditures for various capital projects. The Trail Construction fund has a fund balance of $464,287. The fund balance increased $516,724 during the current fiscal year due to MSA grant revenues received for project expenditures incurred in 2013 and 2014. 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 $7,890,327. The total decrease in net position for the funds was $48,528. 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 $102,848. Revenues were over budget by $183,653, and expenditures were under budget by $311,722. The actual amounts were different from the final budget amounts because of the following: • The largest revenue variance was in licenses and permits, which were over budget by $138,071 due to building permits received in excess of expectations. The next largest revenue variance was in intergovernmental, which was over budget by $40,318 which was due to the unplanned receipt of FEMA aid related to flooding. • The largest expenditure variances were in general government and public works, which were $119,946 and $201,302 under budget, respectively. The general government department was under budget due to Mayor and City Council and Municipal Building expenditures. The public works department was under budget due to General Maintenance expenditures. -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, 2014, amounts to $19,667,317 (net of accumulated depreciation). This investment in capital assets includes land, structures, improvements, machinery and equipment, park facilities, and roads. Major capital asset events during the current fiscal year included the following: • Completion of the Smithtown Trail project • Completion of the finance software conversion to Springbrook • Progress made on various projects including Valleywood Street reconstruction, Galpin Lake trail, Smithtown Road East sidewalk extension, Sunnyvale Lane improvements, and the 2014 mill and overlay project • Purchase of chassis for two new dump body trucks to be completed in 2015 • Trade-in of a Toro Groundsmaster mower • Purchase of a new ballpark fence at Freeman Park Additional information on the City’s capital assets can be found in Note 3B starting on page 62 of this report. City of Shorewood’s Capital Assets (net of depreciation) Increase Increase 20142013 (Decrease)20142013 (Decrease) Land 741,826$ 741,826$ -$ 434,113$ 434,113$ -$ Construction in progress 1,499,144 1,565,510 (66,366) - - - Buildings 1,938,885 2,015,401 (76,516) - - - Improvements other than buildings 252,644 287,368 (34,724) - - - Infrastructure 5,608,346 4,904,016 704,330 8,444,158 8,531,794 (87,636) Machinery and equipment 748,201 788,294 (40,093) - - - Total 10,789,046$ 10,302,415$ 486,631$ 8,878,271$ 8,965,907$ (87,636)$ Governmental Activities Business-type Activities Long-term debt. At the end of the current fiscal year, the City had total bonded debt outstanding of $10,295,000. Of this amount, $8,135,000 is lease revenue bonds and $2,160,000 is general obligation revenue bonds. While all of the City’s bonds have dedicated revenue streams pledged to repayment, the general obligation revenue bonds are all backed by the full faith and credit of the City. City of Shorewood’s Outstanding Debt Increase Increase 20142013 (Decrease)20142013 (Decrease) General obligation revenue bonds -$ -$ -$ 2,160,000$ 3,540,000$ (1,380,000)$ Lease revenue bonds 8,135,000 8,840,000 (705,000) - - - Compensated absences payable 202,883 184,725 18,158 - - - Total 8,337,883$ 9,024,725$ (686,842)$ 2,160,000$ 3,540,000$ (1,380,000)$ 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 65 of this report. -28- Economic Factors and Next Year’s Budgets and Rates • The City has experienced increases in residential property values, particularly on higher value properties around Lake Minnetonka, but lower value home prices seem to be trending up in line with the entire region. • Unemployment trends in the region compare favorably to national indices. • The 2015 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 service levels to the public. • The property tax levy for the 2015 budget was increased 1.5 percent from the 2014 budget – an increase lower than published inflation trends. All of these factors were taken into account in preparing the City’s budget for the 2015 fiscal year. During the 2014 fiscal year, the fund balance in the General fund increased by $109,113. The City budgeted a $102,848 deficit with the use of fund balance in excess of policy designated to balance the budget. This planned use of fund balance was in accordance with the Fund Balance Policy adopted by the City Council. Other than balancing the budget, possible uses of available fund balance in excess of the policy level include one-time projects, and transfers to capital project funds as determined by the City Council. Requests for Information This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the City’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of Shorewood, 5755 Country Club Road, Shorewood, Minnesota 55331. -29- THIS PAGE IS LEFT BLANK INTENTIONALLY -30- GOVERNMENT-WIDE FINANCIAL STATEMENTS CITY OF SHOREWOOD SHOREWOOD, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2014 -31- THIS PAGE IS LEFT BLANK INTENTIONALLY -32- Exhibit 1CITY OF SHOREWOOD, MINNESOTA STATEMENT OF NET POSITION DECEMBER 31, 2014 Governmental Business-type Activities Activities Total ASSETS Cash and temporary investments 7,145,458$ 7,132,674$ 14,278,132$ Cash with fiscal agent - 270,101 270,101 Receivables Accrued interest 155,552 34,594 190,146 Property taxes 125,975 - 125,975 Accounts, net 7,096 418,010 425,106 Special assessments 1,222 162,239 163,461 Lease 7,389,965 - 7,389,965 Due from other governments 17,628 - 17,628 Prepaid items 103,996 - 103,996 Land held for resale 150,068 - 150,068 Capital assets Nondepreciable assets 2,240,970 434,113 2,675,083 Depreciable capital assets, net 8,548,076 8,444,158 16,992,234 TOTAL ASSETS 25,886,006 16,895,889 42,781,895 LIABILITIES Accounts and contracts payable 278,251 112,357 390,608 Accrued salaries payable 13,388 2,480 15,868 Due to other governments 5,374 2,847 8,221 Accrued interest payable 126,142 9,607 135,749 Unearned revenue 53,827 - 53,827 Noncurrent liabilities Due within one year 910,659 260,000 1,170,659 Due in more than one year 7,427,224 1,900,000 9,327,224 TOTAL LIABILITIES 8,814,865 2,287,291 11,102,156 NET POSITION Net investment in capital assets 9,754,046 6,718,271 16,472,317 Unrestricted 7,317,095 7,890,327 15,207,422 TOTAL NET POSITION 17,071,141$ 14,608,598$ 31,679,739$ 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, 2014 Operating Capital Grants Charges for Grants and and Expenses Services Contributions Contributions Governmental activities General government 1,277,118$ 199,394$ 1,800$ -$ Public safety 2,036,394 642,680 - - Public works 1,991,852 1,222 44,014 34,536 Culture and recreation 397,365 102,985 2,470 776,986 Interest on long-term debt 355,378 - - - Total governmental activities 6,058,107 946,281 48,284 811,522 Business-type activities Water 690,479 443,467 - 49,665 Sewer 873,711 852,254 - - Stormwater management utility 203,825 220,658 - 65,825 Recycling 178,457 164,666 31,279 - Total business-type activities 1,946,472 1,681,045 31,279 115,490 Total 8,004,579$ 2,627,326$ 79,563$ 927,012$ General revenues Taxes Property taxes, levied for general purposes Grants and contributions not restricted to specific programs Unrestricted investment earnings Transfers Total general revenues Change in net position Net position, 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 (1,075,924)$ -$ (1,075,924)$ (1,393,714) - (1,393,714) (1,912,080) - (1,912,080) 485,076 - 485,076 (355,378) - (355,378) (4,252,020) - (4,252,020) - (197,347) (197,347) - (21,457) (21,457) - 82,658 82,658 - 17,488 17,488 - (118,658) (118,658) (4,252,020) (118,658) (4,370,678) 4,854,521 - 4,854,521 5,848 - 5,848 86,530 95,130 181,660 25,000 (25,000) - 4,971,899 70,130 5,042,029 719,879 (48,528) 671,351 16,351,262 14,657,126 31,008,388 17,071,141$ 14,608,598$ 31,679,739$ Net (Expense) Revenue and Changes in Net Position -35- THIS PAGE IS LEFT BLANK INTENTIONALLY -36- FUND FINANCIAL STATEMENTS CITY OF SHOREWOOD SHOREWOOD, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2014 -37- CITY OF SHOREWOOD, MINNESOTA BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2014 Debt Street General Service Reconstruction ASSETS Cash and temporary investments 4,070,546$ 13,916$ 1,599,599$ Receivables Accrued interest 16,962 - 8,199 Taxes 125,975 - - Accounts, net 7,096 - - Special assessments 1,222 - - Lease - 7,100,000 - Due from other governments 3,230 14,398 - Due from other funds - - 18,741 Prepaid items 103,996 - - Land held for resale - - - TOTAL ASSETS 4,329,027$ 7,128,314$ 1,626,539$ LIABILITIES Accounts and contracts payable 97,586$ 2,660$ 89,867$ Accrued salaries payable 13,045 - - Due to other governments 5,374 - - Due to other funds - - - Unearned revenue 53,827 - - TOTAL LIABILITIES 169,832 2,660 89,867 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - property taxes 72,502 - - Unavailable revenue - assessments 1,222 - - Unavailable revenue - lease receivables - 7,100,000 - TOTAL DEFERRED INFLOWS OF RESOURCES 73,724 7,100,000 - FUND BALANCES Nonspendable prepaid items 103,996 - - Restricted for debt service - 25,654 - Assigned to Street reconstruction - - 1,536,672 Capital outlay - - - Community center operations - - - Unassigned 3,981,475 - - TOTAL FUND BALANCES 4,085,471 25,654 1,536,672 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES 4,329,027$ 7,128,314$ 1,626,539$ The notes to the financial statements are an integral part of this statement. -38- Exhibit 3 Other Total Trail Governmental Governmental Construction Funds Funds 538,937$ 922,460$ 7,145,458$ 3,544 4,581 33,286 - - 125,975 - - 7,096 - - 1,222 - 289,965 7,389,965 - - 17,628 - - 18,741 - - 103,996 - 150,068 150,068 542,481$ 1,367,074$ 14,993,435$ 78,194$ 9,944$ 278,251$ - 343 13,388 - - 5,374 - 18,741 18,741 - - 53,827 78,194 29,028 369,581 - - 72,502 - - 1,222 - - 7,100,000 - - 7,173,724 - - 103,996 - - 25,654 - - 1,536,672 464,287 1,294,302 1,758,589 - 43,744 43,744 - - 3,981,475 464,287 1,338,046 7,450,130 542,481$ 1,367,074$ 14,993,435$ -39- THIS PAGE IS LEFT BLANK INTENTIONALLY -40- Exhibit 4CITY OF SHOREWOOD, MINNESOTA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION GOVERNMENTAL FUNDS DECEMBER 31, 2014 Amounts reported for the governmental activities in the statement of net position are different because Total fund balances - governmental 7,450,130$ Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds. Cost of capital assets 38,681,361 Less: accumulated depreciation (27,892,315) 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 (8,135,000) Compensated absences payable (202,883) 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 122,266 Delinquent taxes receivable 72,502 Special assessments receivable 1,222 Leases receivable 7,100,000 Governmental funds do not report a liability for accrued interest until due and payable.(126,142) Total net position - governmental activities 17,071,141$ 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, 2014 Debt Street General Service Reconstruction REVENUES Taxes 4,864,095$ -$ -$ Licenses and permits 270,841 - - Intergovernmental 114,069 - - Charges for services 52,731 - - Fines and forfeitures 64,290 - - Interest on investments 45,799 - 22,741 Miscellaneous 191,034 969,650 - TOTAL REVENUES 5,602,859 969,650 22,741 EXPENDITURES Current General government 1,198,707 - - Public safety 1,526,786 - - Public works 740,824 - 2,979 Culture and recreation 229,122 - - Capital outlay General government - - - Public safety 508,187 - - Public works - - 1,351,418 Culture and recreation - - - Debt service Principal - 705,000 - Interest and service charges - 367,396 - TOTAL EXPENDITURES 4,203,626 1,072,396 1,354,397 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 1,399,233 (102,746) (1,331,656) OTHER FINANCING SOURCES (USES) Transfers in 25,000 103,950 725,000 Transfers out (1,315,120) - - TOTAL OTHER FINANCING SOURCES (USES)(1,290,120) 103,950 725,000 NET CHANGE IN FUND BALANCES 109,113 1,204 (606,656) FUND BALANCES, JANUARY 1 3,976,358 24,450 2,143,328 FUND BALANCES, DECEMBER 31 4,085,471$ 25,654$ 1,536,672$ The notes to the financial statements are an integral part of this statement. -42- Exhibit 5 Other Total Trail Governmental Governmental Construction Funds Funds -$ -$ 4,864,095$ - - 270,841 776,986 - 891,055 - 38,094 90,825 - - 64,290 3,544 14,446 86,530 - 24,535 1,185,219 780,530 77,075 7,452,855 - - 1,198,707 - - 1,526,786 - - 743,803 - 80,929 310,051 - 55,827 55,827 - - 508,187 - 173,607 1,525,025 263,806 39,010 302,816 - - 705,000 - - 367,396 263,806 349,373 7,243,598 516,724 (272,298) 209,257 - 486,170 1,340,120 - - (1,315,120) - 486,170 25,000 516,724 213,872 234,257 (52,437) 1,124,174 7,215,873 464,287$ 1,338,046$ 7,450,130$ -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, 2014 Amounts reported for governmental activities in the statement of activities are different because Total net change in fund balances - governmental funds 234,257$ 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 1,523,848 Depreciation expense (1,029,313) A gain or loss on the disposal of capital assets, including the difference between carrying value and any related sales proceeds, is included in net position. However, only the sales proceeds are included in the change in the change in fund balance.(7,904) 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 amortized in the statement of activities. Principal repayments 705,000 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.12,018 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 (9,574) Special assessments 1,222 Leases (661,846) Grants (29,671) 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 (18,158) Change in net position - governmental activities 719,879$ 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, 2014 Actual Variance with Original Final Amounts Final Budget REVENUES Taxes 4,858,585$ 4,858,585$ 4,864,095$ 5,510$ Licenses and permits 132,770 132,770 270,841 138,071 Intergovernmental 73,751 73,751 114,069 40,318 Charges for services 58,700 58,700 52,731 (5,969) Fines and forfeitures 57,000 57,000 64,290 7,290 Interest on investments 35,000 35,000 45,799 10,799 Miscellaneous 203,400 203,400 191,034 (12,366) TOTAL REVENUES 5,419,206 5,419,206 5,602,859 183,653 EXPENDITURES Current General government 1,318,653 1,318,653 1,198,707 119,946 Public safety 1,516,819 1,516,819 1,526,786 (9,967) Public works 942,126 942,126 740,824 201,302 Culture and recreation 225,716 225,716 229,122 (3,406) Capital outlay Public safety 512,034 512,034 508,187 3,847 TOTAL EXPENDITURES 4,515,348 4,515,348 4,203,626 311,722 EXCESS OF REVENUES OVER EXPENDITURES 903,858 903,858 1,399,233 495,375 OTHER FINANCING SOURCES (USES) Transfers in 25,000 25,000 25,000 - Transfers out (1,031,706) (1,031,706) (1,315,120) (283,414) TOTAL OTHER FINANCING SOURCES (USES)(1,006,706) (1,006,706) (1,290,120) (283,414) NET CHANGE IN FUND BALANCES (102,848) (102,848) 109,113 211,961 FUND BALANCES, JANUARY 1 3,976,358 3,976,358 3,976,358 - FUND BALANCES, DECEMBER 31 3,873,510$ 3,873,510$ 4,085,471$ 211,961$ The notes to the financial statements are an integral part of this statement. Budgeted Amounts -45- Exhibit 8CITY OF SHOREWOOD, MINNESOTA STATEMENT OF NET POSITION PROPRIETARY FUNDS DECEMBER 31, 2014 Stormwater Management Nonmajor Water Sewer Utility Recycling Totals ASSETS CURRENT ASSETS Cash and temporary investments 3,711,388$ 3,232,484$ 119,086$ 69,716$ 7,132,674$ Cash with fiscal agent 270,101 - - - 270,101 Receivables Accrued interest 18,020 15,304 998 272 34,594 Accounts 75,814 235,225 61,004 45,967 418,010 Special assessments 4,251 6,893 1,907 1,254 14,305 TOTAL CURRENT ASSETS 4,079,574 3,489,906 182,995 117,209 7,869,684 NONCURRENT ASSETS Special assessments receivable 115,765 22,270 5,502 4,397 147,934 Capital assets Land - - 434,113 - 434,113 Machinery and equipment 39,869 43,385 59,499 - 142,753 Infrastructure 9,944,664 9,191,567 1,494,501 - 20,630,732 Less accumulated depreciation (4,522,305) (7,496,429) (310,593) - (12,329,327) NET CAPITAL ASSETS 5,462,228 1,738,523 1,677,520 - 8,878,271 TOTAL NONCURRENT ASSETS 5,577,993 1,760,793 1,683,022 4,397 9,026,205 TOTAL ASSETS 9,657,567 5,250,699 1,866,017 121,606 16,895,889 LIABILITIES CURRENT LIABILITIES Accounts and contracts payable 21,239 26,425 64,128 565 112,357 Accrued salaries payable 1,267 866 253 94 2,480 Due to other governments 329 2,518 - - 2,847 Accrued interest payable 9,607 - - - 9,607 Bonds payable - current 260,000 - - - 260,000 TOTAL CURRENT LIABILITIES 292,442 29,809 64,381 659 387,291 NONCURRENT LIABILITIES Bonds payable 1,900,000 - - - 1,900,000 TOTAL LIABILITIES 2,192,442 29,809 64,381 659 2,287,291 NET POSITION Net investment in capital assets 3,302,228 1,738,523 1,677,520 - 6,718,271 Unrestricted 4,162,897 3,482,367 124,116 120,947 7,890,327 TOTAL NET POSITION 7,465,125$ 5,220,890$ 1,801,636$ 120,947$ 14,608,598$ The notes to the financial statements are an integral part of this statement. Business-type Activities - Enterprise Funds -46- Exhibit 9CITY OF SHOREWOOD, MINNESOTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 Stormwater Management Nonmajor Water Sewer Utility Recycling Totals OPERATING REVENUES Charges for services 425,928$ 852,254$ 220,658$ 164,666$ 1,663,506$ OPERATING EXPENSES Personal services 162,278 133,593 69,178 10,938 375,987 Supplies 13,008 4,654 2,091 1,488 21,241 Repairs and maintenance 5,412 34,594 54,846 - 94,852 Depreciation 269,295 67,898 38,850 - 376,043 Professional services 23,593 8,049 21,036 - 52,678 Contracted services 50,398 14,427 17,820 165,561 248,206 Insurance 10,500 12,000 - - 22,500 Water purchases 30,217 - - - 30,217 Utilities 73,377 11,170 - - 84,547 Disposal charges - 586,416 - - 586,416 Other 32,693 910 4 470 34,077 TOTAL OPERATING EXPENSES 670,771 873,711 203,825 178,457 1,926,764 OPERATING INCOME (LOSS)(244,843) (21,457) 16,833 (13,791) (263,258) NONOPERATING REVENUES (EXPENSES) Special assessments 16,539 - - - 16,539 Interest on investments 49,474 41,745 3,147 764 95,130 Intergovernmental - - - 31,279 31,279 Other income 1,000 - - - 1,000 Interest expense (19,708) - - - (19,708) TOTAL NONOPERATING REVENUES (EXPENSES)47,305 41,745 3,147 32,043 124,240 INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS (197,538) 20,288 19,980 18,252 (139,018) CAPITAL CONTRIBUTIONS - CONNECTION FEES 49,665 - - - 49,665 CAPITAL CONTRIBUTIONS - FEMA AID - - 65,825 - 65,825 TRANSFERS OUT (12,500) (12,500) - - (25,000) CHANGE IN NET POSITION (160,373) 7,788 85,805 18,252 (48,528) NET POSITION, JANUARY 1 7,625,498 5,213,102 1,715,831 102,695 14,657,126 NET POSITION, DECEMBER 31 7,465,125$ 5,220,890$ 1,801,636$ 120,947$ 14,608,598$ The notes to the financial statements are an integral part of this statement. Business-type Activities - Enterprise Funds -47- Exhibit 10CITY OF SHOREWOOD, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 Stormwater Management Nonmajor Water Sewer Utility Recycling Totals CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users 464,613$ 845,634$ 212,296$ 162,790$ 1,685,333$ Other receipts related to operations 17,539 - - 31,279 48,818 Payments to suppliers, contractors and other governments (224,877) (658,701) (82,232) (166,954) (1,132,764) Payments to employees (161,379) (133,531) (68,925) (10,913) (374,748) NET CASH PROVIDED BY OPERATING ACTIVITIES 95,896 53,402 61,139 16,202 226,639 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers out (12,500) (12,500) - - (25,000) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Connection fees received 49,665 - - - 49,665 Acquisition of capital assets - (86,483) (159,731) - (246,214) Bonds refunded from escrow (1,160,000) - - - (1,160,000) Principal paid on revenue bonds (220,000) - - - (220,000) Interest paid on revenue bonds (51,920) - - - (51,920) Intergovernmental receipts - - 65,825 - 65,825 NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES (1,382,255) (86,483) (93,906) - (1,562,644) CASH FLOWS FROM INVESTING ACTIVITIES Interest received on investments 52,733 44,790 2,924 798 101,245 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,246,126) (791) (29,843) 17,000 (1,259,760) CASH AND CASH EQUIVALENTS, JANUARY 1 5,227,615 3,233,275 148,929 52,716 8,662,535 CASH AND CASH EQUIVALENTS, DECEMBER 31 3,981,489$ 3,232,484$ 119,086$ 69,716$ 7,402,775$ RECONCILIATION OF CASH AND CASH EQUIVALENTS TO THE STATEMENT OF NET POSITION Cash and temporary investments 3,711,388$ 3,232,484$ 119,086$ 69,716$ 7,132,674$ Cash with fiscal agent 270,101 - - - 270,101 TOTAL CASH AND CASH EQUIVALENTS 3,981,489$ 3,232,484$ 119,086$ 69,716$ 7,402,775$ The notes to the financial statements are an integral part of this statement. Business-type Activities - Enterprise Funds -48- Exhibit 10 Stormwater Management Nonmajor Water Sewer Utility Recycling Totals RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income (loss)(244,843)$ (21,457)$ 16,833$ (13,791)$ (263,258)$ Adjustments to reconcile operating income (loss) to net cash provided by operating activities Other income related to operations 17,539 - - 31,279 48,818 Depreciation 269,295 67,898 38,850 - 376,043 (Increase) decrease in assets Accounts receivable 26,474 (9,500) (9,650) (3,043) 4,281 Special assessments receivable 12,211 2,880 1,288 1,167 17,546 Increase (decrease) in liabilities Accounts and contracts payable 14,424 13,317 13,565 565 41,871 Due to other governments (103) 202 - - 99 Accrued salaries payable 899 62 253 25 1,239 NET CASH PROVIDED BY OPERATING ACTIVITIES 95,896$ 53,402$ 61,139$ 16,202$ 226,639$ NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Capital assets purchased on account -$ -$ 42,193$ -$ 42,193$ The notes to the financial statements are an integral part of this statement. Business-type Activities - Enterprise Funds CITY OF SHOREWOOD, MINNESOTA STATEMENT OF CASH FLOWS - CONTINUED PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 -49- Exhibit 11CITY OF SHOREWOOD, MINNESOTA STATEMENT OF NET POSITION FIDUCIARY FUND DECEMBER 31, 2014 Agency ASSETS Cash and temporary investments 128,561$ LIABILITIES Escrow deposits payable 128,561$ The notes to the financial statements are an integral part of this statement. -50- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 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 within the City in accordance with policies established by the City Council. The EDA Board is comprised of the members of the City Council and has a December 31 year end. Because the EDA’s Board is the same as the City Council, the EDA is blended and reported in the Debt Service fund. 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. Amounts reported as 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 (including special assessments) 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. -51- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED C. Measurement focus, basis of accounting and financial statement presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the 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. 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 Reconstruction fund accounts for the resources accumulated and payments made for the periodic reconstruction of City streets and roadways. The Trail Construction fund accounts for the resources accumulated and payments made for trail improvements and construction. -52- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED The City reports the following major proprietary funds: The Water fund accounts for the activities of the City’s water distribution system. The Sewer fund accounts for the activities of the City’s sewage collection system. The Stormwater Management Utility fund accounts for the activities of the City’s stormwater 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 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. 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, stormwater management utility, and recycling 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. -53- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 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. The proprietary funds’ portion in the government-wide cash and temporary investments pool is considered to be cash and cash equivalents for purposes of the statements of cash flows. 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. Obligation of a school district with an original maturity not exceeding 13 months and (i) rated in the highest category by a national bond rating service or (ii) enrolled in the credit enhancement program pursuant to statute section 126C.55. 6. Bankers’ acceptances of United States banks eligible for purchase by the Federal Reserve System. 7. 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. 8. 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. 9. 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. The City’s investment policy has further restricted the City’s investments to items 1, 2, 3, and 7 above. 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. -54- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 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. All trade receivables are shown net of an allowance for uncollectible accounts. The allowance for uncollectible accounts at December 31, 2014 is $27,319. Unbilled utility enterprise fund receivables are also included for services provided in 2014. 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 in the enterprise funds. 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. Lease receivable The City has a total of five leases receivable. Three of the leases are related to public safety buildings that the City has leased to the Excelsior Fire District and the South Lake Minnetonka Police Department. The other two leases were issued to the Excelsior Fire District for equipment financing assistance. As of December 31, 2014, the City has $7,389,965 of leases receivable outstanding. Interfund receivables and payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “interfund receivables/payables” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” Prepaid items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. Prepaid items of the City are accounted for using the consumption method. -55- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Capital assets Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. For financial statement purposes only, a capitalization threshold is established for each capital asset category as follows: Assets Threshold Land and land improvements 10,000$ 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 -56- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 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, 2014 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. 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, assessments, and lease receivables. These amounts are deferred and recognized as an inflow of resources in the period that the amounts are received. -57- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 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, land held for resale, and amounts due from other funds. 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 - Consists 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”. 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. -58- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Budgetary information Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for the General fund. All annual appropriations lapse at fiscal year end. The City does not use encumbrance accounting. In August of each year, all departments of the City submit requests for appropriations to the City Administrator so that a budget may be prepared. Before September 30, 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. The City’s budget was not amended during the year. 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. 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 $455,278 and the bank balance was $323,597. The entire bank balance was covered by Federal depository insurance or by collateral held by the City’s agent in the City’s name. -59- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Investments The Minnesota Municipal Money Market fund (the 4M fund) is a customized cash management and investment program for Minnesota public funds. Sponsored and governed by the League of Minnesota Cities since 1987, the 4M fund is a unique investment alternative designed to address the daily and long-term investment needs of Minnesota cities and other municipal entities. Allowable under Minnesota statutes, the 4M fund is comprised of top quality, rated investments. The Minnesota Municipal Money Market fund and broker money market investment pools operate in accordance with appropriate State laws and regulations. The 4M fund is regulated by Minnesota statutes and the Board of Directors of the League of Minnesota Cities and is an external investment pool not registered with the Securities and Exchange Commission (SEC); however, it follows the same regulatory rules of the SEC under rule 2a7. The reported value of the pool is the same as the fair value of the pool share. Financial statements of the 4M fund can be obtained by contracting RBC Global Asset Management at 100 South Fifth Street, Suite 2300, Minneapolis, MN 55402-1240. At year end, the City had the following investments that are insured or registered, or securities held by the City’s agent in the City’s name: Fair Value Credit Segmented and Quality/Time Carrying Rating (1)Distribution (2)Amount Non Pooled investments U.S. Government Agency Securities Aaa 1 to 3 years 1,479,182$ U.S. Government Agency Securities Aaa more than 3 years 1,490,941 Municipal Bonds Aaa less than 6 months 260,731 Municipal Bonds Aa1 less than 6 months 253,198 Municipal Bonds Aa3 less than 1 year 165,000 Municipal Bonds A2 less than 1 year 295,823 Municipal Bonds Aa1 1 to 3 years 1,395,677 Municipal Bonds Aa2 1 to 3 years 1,073,193 Municipal Bonds AA 1 to 3 years 610,464 Municipal Bonds A3 1 to 3 years 1,658,542 Municipal Bonds A+1 to 3 years 105,835 Municipal Bonds Aaa more than 3 years 298,380 Brokered Certificates of Deposit N/A less than 6 months 181,496 Brokered Certificates of Deposit N/A 6 to 12 months 249,189 Brokered Certificates of Deposit N/A 1 to 3 years 243,386 Brokered Certificates of Deposit N/A more than 3 years 683,798 Total non pooled 10,444,835 Pooled investments Minnesota Municipal Money Market fund N/A less than 6 months 3,659,695 Broker Money Market N/A less than 6 months 116,766 Total pooled 3,776,461 Total investments 14,221,296$ Types of Investments (1) Ratings are provided by various credit ratings agency 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. -60- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED A reconciliation of cash and temporary investments as shown on the financial statements for the City follows: Carrying amount of deposits 455,278$ Investments 14,221,296 Cash on hand 220 Total 14,676,794$ As reported on the financial statements Statement of net position 14,278,132$ Cash with fiscal agent 270,101 Fiduciary fund 128,561 Total 14,676,794$ 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 54 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, 2014 the City had invested 5.0 percent or more of its total investment portfolio in the following issuers: Columbia County GA, 6.0 percent, and Illinois State Taxable, 5.9 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. -61- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED B. Capital assets Capital asset activity for the year ended December 31, 2014 was as follows: Beginning Ending Balance Increases Decreases Balance Governmental activities Capital assets not being depreciated Land 741,826$ -$ -$ 741,826$ Construction in progress 1,565,510 1,484,912 (1,551,278) 1,499,144 Total capital assets not being depreciated 2,307,336 1,484,912 (1,551,278) 2,240,970 Capital assets being depreciated Buildings 3,066,002 - - 3,066,002 Improvements other than buildings 1,012,469 - - 1,012,469 Infrastructure 27,923,348 1,441,028 - 29,364,376 Machinery and equipment 2,874,708 149,186 (26,350) 2,997,544 Total capital assets being depreciated 34,876,527 1,590,214 (26,350) 36,440,391 Less accumulated depreciation Buildings (1,050,601) (76,516) - (1,127,117) Improvements other than buildings (725,101) (34,724) - (759,825) Infrastructure (23,019,332) (736,698) - (23,756,030) Machinery and equipment (2,086,414) (181,375) 18,446 (2,249,343) Total accumulated depreciation (26,881,448) (1,029,313) 18,446 (27,892,315) Total capital assets being depreciated, net 7,995,079 560,901 (7,904) 8,548,076 Governmental activities capital assets, net 10,302,415$ 2,045,813$ (1,559,182)$ 10,789,046$ -62- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Beginning Ending BalanceIncreasesDecreasesBalance Business-type activities Capital assets not being depreciated Land 434,113$ -$ -$ 434,113$ Capital assets being depreciated Infrastructure 20,401,824 288,407 - 20,690,231 Machinery and equipment 83,254 - - 83,254 Total capital assets being depreciated 20,485,078 288,407 - 20,773,485 Less accumulated depreciation for Infrastructure (11,870,030) (376,043) - (12,246,073) Machinery and equipment (83,254) - - (83,254) Total accumulated depreciation (11,953,284) (376,043) - (12,329,327) Total capital assets being depreciated, net 8,531,794 (87,636) - 8,444,158 Business-type activities capital assets, net 8,965,907$ (87,636)$ -$ 8,878,271$ Depreciation expense was charged to functions/programs of the City as follows: Governmental activities General government 73,268$ Public works 898,209 Culture and recreation 57,836 Total depreciation expense - governmental activities 1,029,313$ Business-type activities Water 269,295$ Sewer 67,898 Stormwater management utility 38,850 Total depreciation expense - business-type activities 376,043$ -63- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Construction commitments The City has active construction projects as of December 31, 2014. At year end, the commitment with the contractors for these projects is as follows: SpentRemaining to date Commitment 2013 Street, Drainage & Utility Improvements 500,723$ 33,505$ 2014 Utility and Street Improvements - Sunnyvale Lane 373,926 42,143 2014 Mill and Overlay Improvement Project 294,077 61,641 Total 1,168,726$ 137,289$ Project C. Interfund receivables, payables, and transfers Interfund balances The Street Reconstruction fund lent $18,741 to the Equipment Replacement nonmajor governmental fund for cash flow purposes. The interfund balance is expected to be paid back in 2015. Interfund transfers The City made transfers during the fiscal year 2014 as shown and described below: Street Nonmajor General Debt Service Reconstruction Governmental Total Transfers out General -$ 103,950$ 725,000$ 486,170$ 1,315,120$ Water 12,500 - - - 12,500 Sewer 12,500 - - - 12,500 Total 25,000$ 103,950$ 725,000$ 486,170$ 1,340,120$ Fund Transfers in The City annually budgets transfers for specific purposes. Annual transfers are made for administrative costs, part of capital improvement plans, as well as annual budgets. For the year ended December 31, 2014, the City made the following one-time transfer: • The General fund transferred $283,414 to the Park Capital Improvement nonmajor governmental fund for future park improvements. The cash was related to the 2013 house sale proceeds of $317,182 less costs related to the sale that were previously recorded in the General fund. -64- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED 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: General obligation revenue bonds The following bonds were issued to finance capital improvements in the enterprise funds. They will be repaid from future net revenues pledged from the Water fund and are backed by the taxing power of the City. Annual principal and interest payments on the bonds are expected to require less than 39 percent of the net revenues from the Water fund. Principal and interest paid for the current year and total customer net revenues for the Water fund were $168,080 and $425,928, respectively. Authorized Issue Maturity Balance at and Issued Date Date Year End G.O. Water Revenue Bonds of 2013 2,260,000$ 0.25 - 1.45 %03/01/13 01/01/22 2,160,000$ Rate Interest Description Annual debt service requirements to maturity for general obligation revenue bonds are as follows: Year Ending December 31,Principal Interest Total 2015 260,000$ 18,757$ 278,757$ 2016 265,000 17,640 282,640 2017 265,000 16,182 281,182 2018 270,000 14,375 284,375 2019 270,000 12,080 282,080 2020 - 2022 830,000 17,094 847,094 Total 2,160,000$ 96,128$ 2,256,128$ G.O. Revenue Bonds Business-type Activities -65- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Lease revenue bonds The City also issues bonds where the City pledges income derived from the leasing of the acquired or constructed assets to pay debt service. Revenue bonds outstanding at year end are as follows: Authorized Issue Maturity Balance at and Issued Date Date Year End Public Safety Fire Facility, Refunding Series 2007A 4,130,000$ 5.30 - 5.40 %01/01/07 02/01/23 2,960,000$ Public Safety Police Facility, Refunding Series 2007B 4,285,000 3.50 - 4.25 01/01/07 02/01/23 3,075,000 Public Safety Fire Facility, Refunding Series 2007C 1,585,000 3.75 - 5.00 01/01/07 02/01/22 1,065,000 Public Project Lease Revenue Bonds, Series 2008A 1,310,000 2.85 - 4.80 08/19/08 12/01/28 1,035,000 Total Lease Revenue Bonds 8,135,000$ Interest RateDescription 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 5A and B for further information. Annual debt service requirements to maturity for revenue bonds are as follows: Year Ending December 31,Principal Interest Total 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 830,000 225,287 1,055,287 2019 870,000 191,653 1,061,653 2020 - 2024 3,765,000 415,480 4,180,480 2025 - 2028 365,000 44,374 409,374 Total 8,135,000$ 1,749,806$ 9,884,806$ Governmental Activities Lease Revenue Bonds -66- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Changes in long-term liabilities Long-term liability activity for the year ended December 31, 2014, was as follows: Beginning Ending Due Within Balance Increases Decreases Balance One Year Governmental activities Lease revenue bonds 8,840,000$ -$ (705,000)$ 8,135,000$ 735,000$ Compensated absences 184,725 178,096 (159,938) 202,883 175,659 Total 9,024,725$ 178,096$ (864,938)$ 8,337,883$ 910,659$ Business-type activities General obligation revenue bonds 3,540,000$ -$ (1,380,000)$ 2,160,000$ 260,000$ Refunding bond On March 6, 2013, the City issued $2,260,000 of water revenue bonds. The bond issue was a current refunding of the G.O. Water Revenue Bonds of 2005 and a crossover refunding of the G.O. Water Revenue Bonds of 2006. The new bonds have an average coupon rate of 1.04 percent compared to the 4.16 and 4.00 percent average coupon rates on the old bonds, respectively. The proceeds of the new bonds pertaining to the 2005 bonds were used to refund those bonds on March 6, 2013. The proceeds of the new bonds pertaining to the 2006 bonds were used to refund those bonds on January 1, 2014. The 2006 bonds were not defeased until the crossover date, and therefore were not removed as a liability until that date. As a result of the refunding issue, the City will save $340,535 in debt service payments and achieve an economic gain (the present value of the difference between the old and the new debt service) of $306,132. -67- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 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 five 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 me thods are used to compute benefits for PERA’s Coordinated and Basic Plan members. The retiring member receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.20 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. 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 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. 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 2014. In 2014, the City was 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, 2014, 2013 and 2012 were $89,427, $86,064, and $99,677, respectively. The City’s contributions were equal to the contractually required contributions for each year as set by Minnesota statute. -68- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 5: JOINT VENTURES A. South Lake Minnetonka Police Department The City participates in a joint powers agreement with the cities of Excelsior, Greenwood and Tonka Bay, which establishes the South Lake Minnetonka Police Department (the Department) for the purpose of providing police protection within the four communities. The agreement creates a coordinating committee, comprised of the Mayors of each participating community, as the governing body, which meets quarterly. Each year, the coordinating committee adopts an operating budget, which is approved by all participating cities. The cost of the operating budget is divided between the participating cities based upon a five-year average demand for service in each City. Any budget shortfall is made up first from department reserves, with any excess shortfall assessed to each participating community according to the formula. The most recent year of audited information is December 31, 2014. Separate financial statements can be obtained by writing to the South Lake Minnetonka Police Department, 24150 Smithtown Road, Shorewood, Minnesota 55331. The following is a summary of the Department’s Statements of Net Position as of December 31, 2014 and 2013: SOUTH LAKE MINNETONKA POLICE DEPARTMENT SUMMARY OF STATEMENTS OF NET POSITION DECEMBER 31, 2014 AND 2013 2014 2013 Assets 5,051,223$ 5,214,361$ Liabilities 3,326,740$ 3,639,122$ Net position 1,724,483 1,575,239 Total liabilities and net position 5,051,223$ 5,214,361$ The following is a summary of the Department’s statements of activities for the years ended December 31, 2014 and 2013: SOUTH LAKE MINNETONKA POLICE DEPARTMENT SUMMARY STATEMENTS OF ACTIVITIES FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 2014 2013 Revenues 2,829,638$ 2,792,683$ Expenses 2,692,164 2,630,842 Net revenues 137,474 161,841 General revenues 11,770 12,596 Change in net position 149,244 174,437 Net position, January 1 1,575,239 1,400,802 Net position, December 31 1,724,483$ 1,575,239$ -69- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 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 Statements of Net Position as of December 31, 2014 and 2013: EXCELSIOR FIRE DISTRICT SUMMARY OF STATEMENTS OF NET POSITION DECEMBER 31, 2014 AND 2013 2014 2013 Assets 7,868,422$ 8,070,939$ Liabilities 4,454,504$ 4,956,613$ Net position 3,413,918 3,114,326 Total liabilities and net position 7,868,422$ 8,070,939$ The following is a summary of the District’s statements of activities for the years ended December 31, 2014 and 2013: EXCELSIOR FIRE DISTRICT SUMMARY STATEMENTS OF ACTIVITIES FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 2014 2013 Revenues 1,585,458$ 1,565,399$ Expenses 1,289,669 1,294,952 Net revenues 295,789 270,447 General revenues 3,803 15,811 Change in net position 299,592 286,258 Net position, January 1 3,114,326 2,828,068 Net position, December 31 3,413,918$ 3,114,326$ According to a formula in the agreement, the City’s share of the District’s budget is 38.48 percent. Payments to the District in 2014 totaled $603,638. The District issues a publicly available financial report that includes financial statements and required supplementary information. The report may be obtained by writing to the Excelsior Fire District, 24100 Smithtown Road, Shorewood, Minnesota 55331. -70- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 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 $40,556,194 computed as three percent of $1,351,873,140, which is 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 $13,500. The contract was subsequently extended on a month by month basis through March 31, 2013 when CRR ceased to provide services as the Southshore Community Center management company. -71- THIS PAGE IS LEFT BLANK INTENTIONALLY -72- COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF SHOREWOOD SHOREWOOD, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2014 -73- THIS PAGE IS LEFT BLANK INTENTIONALLY -74- NONMAJOR GOVERNMENTAL FUNDS NONMAJOR SPECIAL REVENUE FUNDS Special revenue funds are used to account for revenue derived from specific taxes or other earmarked revenue sources. They are usually required by Minnesota statute or local ordinances to finance particular functions or other activities of government. Southshore Community Center - This fund was established to account for the resources accumulated from events and activities held at the City’s community center, and the payment of expenditures related to operations of the community center. The City has committed charges for services revenues for operations. -75- Exhibit A-1CITY OF SHOREWOOD, MINNESOTA NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET DECEMBER 31, 2014 Special Revenue Southshore Total Community Capital Nonmajor Center Projects Funds ASSETS Cash and temporary investments 46,805$ 875,655$ 922,460$ Receivables Accrued interest - 4,581 4,581 Lease - 289,965 289,965 Land held for resale - 150,068 150,068 TOTAL ASSETS 46,805$ 1,320,269$ 1,367,074$ LIABILITIES Accounts and contracts payable 2,718$ 7,226$ 9,944$ Accrued salaries payable 343 - 343 Due to other funds - 18,741 18,741 TOTAL LIABILITIES 3,061 25,967 29,028 FUND BALANCES Assigned to capital outlay - 1,294,302 1,294,302 Assigned to community center operations 43,744 - 43,744 TOTAL FUND BALANCES 43,744 1,294,302 1,338,046 TOTAL LIABILITIES AND FUND BALANCES 46,805$ 1,320,269$ 1,367,074$ -76- 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, 2014 Special Revenue Southshore Total Community Capital Nonmajor Center Projects Funds REVENUES Charges for services 38,094$ -$ 38,094$ Interest on investments - 14,446 14,446 Miscellaneous Park dedication fees - 20,000 20,000 Contributions and donations 2,470 - 2,470 Other 2,065 - 2,065 TOTAL REVENUES 42,629 34,446 77,075 EXPENDITURES Current Culture and recreation 80,929 - 80,929 Capital outlay General government - 55,827 55,827 Public works - 173,607 173,607 Culture and recreation 4,181 34,829 39,010 TOTAL EXPENDITURES 85,110 264,263 349,373 DEFICIENCY OF REVENUES UNDER EXPENDITURES (42,481) (229,817) (272,298) OTHER FINANCING SOURCES Transfers in 85,756 400,414 486,170 NET CHANGE IN FUND BALANCES 43,275 170,597 213,872 FUND BALANCES, JANUARY 1 469 1,123,705 1,124,174 FUND BALANCES, DECEMBER 31 43,744$ 1,294,302$ 1,338,046$ -77- THIS PAGE IS LEFT BLANK INTENTIONALLY -78- 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. 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. Community Infrastructure - This fund was established for the purpose of funding future improvements in the City. -79- Exhibit B-1CITY OF SHOREWOOD, MINNESOTA NONMAJOR CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET DECEMBER 31, 2014 Park Capital Equipment MSA Community Improvement Replacement Construction Infrastructure Total ASSETS Cash and temporary investments 534,898$ -$ 126,387$ 214,370$ 875,655$ Receivables Accrued interest 2,088 - 1,000 1,493 4,581 Lease - 289,965 - - 289,965 Land held for resale - - - 150,068 150,068 TOTAL ASSETS 536,986$ 289,965$ 127,387$ 365,931$ 1,320,269$ LIABILITIES Accounts and contracts payable 326$ 6,900$ -$ -$ 7,226$ Due to other funds - 18,741 - - 18,741 TOTAL LIABILITIES 326 25,641 - - 25,967 FUND BALANCES Assigned to capital outlay 536,660 264,324 127,387 365,931 1,294,302 TOTAL LIABILITIES AND FUND BALANCES 536,986$ 289,965$ 127,387$ 365,931$ 1,320,269$ -80- Exhibit B-2CITY OF SHOREWOOD, MINNESOTA NONMAJOR CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2014 Park Capital Equipment MSA Community Improvement Replacement Construction Infrastructure Total REVENUES Interest on investments 7,172$ 5,495$ 286$ 1,493$ 14,446$ Miscellaneous Park dedication fees 20,000 - - - 20,000 TOTAL REVENUES 27,172 5,495 286 1,493 34,446 EXPENDITURES Capital outlay General government - 55,827 - - 55,827 Public works - 173,607 - - 173,607 Culture and recreation 29,292 - - 5,537 34,829 TOTAL EXPENDITURES 29,292 229,434 - 5,537 264,263 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (2,120) (223,939) 286 (4,044) (229,817) OTHER FINANCING SOURCES Transfers in 325,414 75,000 - - 400,414 NET CHANGE IN FUND BALANCES 323,294 (148,939) 286 (4,044) 170,597 FUND BALANCES, JANUARY 1 213,366 413,263 127,101 369,975 1,123,705 FUND BALANCES, DECEMBER 31 536,660$ 264,324$ 127,387$ 365,931$ 1,294,302$ -81- Exhibit C-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, 2014 (With comparative actual amounts for the year ended December 31, 2013) 2013 Actual Variance with Actual Original Final Amounts Final Budget Amounts REVENUES Taxes General property taxes 4,755,059$ 4,755,059$ 4,752,388$ (2,671)$ 4,660,946$ Fiscal disparities 103,526 103,526 111,707 8,181 103,526 Total 4,858,585 4,858,585 4,864,095 5,510 4,764,472 Licenses and permits Business 14,320 14,320 14,932 612 19,597 Nonbusiness 118,450 118,450 255,909 137,459 185,003 Total 132,770 132,770 270,841 138,071 204,600 Intergovernmental Federal Other - - 34,536 34,536 - State Property tax credits - - 44 44 26 Other 73,751 73,751 79,489 5,738 76,518 Total 73,751 73,751 114,069 40,318 76,544 Charges for services General government 4,700 4,700 11,850 7,150 (3,544) Culture and recreation 54,000 54,000 40,881 (13,119) 54,373 Total 58,700 58,700 52,731 (5,969) 50,829 Fines and forfeitures 57,000 57,000 64,290 7,290 59,294 Interest on investments 35,000 35,000 45,799 10,799 12,911 Miscellaneous revenue Refunds and reimbursements 32,500 32,500 19,792 (12,708) 46,838 Contributions and donations 5,500 5,500 4,595 (905) 3,070 Other 165,400 165,400 166,647 1,247 144,569 Total 203,400 203,400 191,034 (12,366) 194,477 TOTAL REVENUES 5,419,206 5,419,206 5,602,859 183,653 5,363,127 2014 Budgeted Amounts -82- Exhibit C-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, 2014 (With comparative actual amounts for the year ended December 31, 2013) 2013 Actual Variance with Actual Original Final Amounts Final Budget Amounts EXPENDITURES Current General government Mayor and City Council Personal services 16,800$ 16,800$ 16,794$ 6$ 16,794$ Supplies 1,200 1,200 1,014 186 2,035 Other services and charges 140,365 140,365 54,930 85,435 90,885 Total 158,365 158,365 72,738 85,627 109,714 Administrative Personal services 250,323 250,323 242,352 7,971 240,032 Supplies 19,300 19,300 17,852 1,448 15,650 Other services and charges 147,290 147,290 148,468 (1,178) 134,401 Total 416,913 416,913 408,672 8,241 390,083 Finance Personal services 134,758 134,758 138,465 (3,707) 137,469 Supplies 9,050 9,050 15,415 (6,365) 8,225 Other services and charges 16,000 16,000 14,191 1,809 14,619 Total 159,808 159,808 168,071 (8,263) 160,313 Professional services Other services and charges 211,060 211,060 207,153 3,907 199,042 Planning and zoning Personal services 173,157 173,157 182,641 (9,484) 181,143 Supplies 250 250 302 (52) 292 Other services and charges 11,900 11,900 14,461 (2,561) 7,684 Total 185,307 185,307 197,404 (12,097) 189,119 Municipal building Supplies 21,400 21,400 56,990 (35,590) 60,118 Other services and charges 165,800 165,800 87,679 78,121 141,227 Total 187,200 187,200 144,669 42,531 201,345 Total general government 1,318,653 1,318,653 1,198,707 119,946 1,249,616 Budgeted Amounts 2014 -83- Exhibit C-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, 2014 (With comparative actual amounts for the year ended December 31, 2013) 2013 Actual Variance with Actual Original Final Amounts Final Budget Amounts Budgeted Amounts 2014 EXPENDITURES - CONTINUED Current - continued Public safety Police protection Other services and charges 1,045,056$ 1,045,056$ 1,051,134$ (6,078)$ 1,018,680$ Fire protection Other services and charges 344,940 344,940 348,789 (3,849) 345,728 Protective inspection Personal services 121,323 121,323 120,530 793 123,412 Supplies 200 200 157 43 - Other services and charges 5,300 5,300 6,176 (876) 6,813 Total 126,823 126,823 126,863 (40) 130,225 Total public safety 1,516,819 1,516,819 1,526,786 (9,967) 1,494,633 Public works General maintenance Personal services 439,587 439,587 321,038 118,549 434,212 Supplies 169,700 169,700 132,205 37,495 141,763 Other services and charges 141,600 141,600 95,277 46,323 105,845 Total 750,887 750,887 548,520 202,367 681,820 Snow and ice removal Personal services 58,339 58,339 61,363 (3,024) 56,862 Supplies 45,000 45,000 34,444 10,556 44,835 Total 103,339 103,339 95,807 7,532 101,697 Sanitation and waste removal Personal services - - 23,704 (23,704) - City engineer Personal services - - - - 460 Supplies - - 612 (612) - Other services and charges 87,900 87,900 72,181 15,719 68,690 Total 87,900 87,900 72,793 15,107 69,150 Total public works 942,126 942,126 740,824 201,302 852,667 -84- Exhibit C-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, 2014 (With comparative actual amounts for the year ended December 31, 2013) 2013 Actual Variance with Actual Original Final Amounts Final Budget Amounts Budgeted Amounts 2014 EXPENDITURES - CONTINUED Current - continued Culture and recreation Personal services 146,216$ 146,216$ 164,292$ (18,076)$ 133,518$ Supplies 26,100 26,100 21,443 4,657 23,726 Other services and charges 53,400 53,400 43,387 10,013 51,868 Total culture and recreation 225,716 225,716 229,122 (3,406) 209,112 Total current 4,003,314 4,003,314 3,695,439 307,875 3,806,028 Capital outlay General government - - - - 322 Public safety 512,034 512,034 508,187 3,847 515,419 Total capital outlay 512,034 512,034 508,187 3,847 515,741 TOTAL EXPENDITURES 4,515,348 4,515,348 4,203,626 311,722 4,321,769 EXCESS OF REVENUES OVER EXPENDITURES 903,858 903,858 1,399,233 495,375 1,041,358 OTHER FINANCING SOURCES (USES) Transfers in 25,000 25,000 25,000 - - Sale of capital assets - - - - 317,182 Transfers out (1,031,706) (1,031,706) (1,315,120) (283,414) (1,006,650) TOTAL OTHER FINANCING SOURCES (USES)(1,006,706) (1,006,706) (1,290,120) (283,414) (689,468) NET CHANGE IN FUND BALANCES (102,848) (102,848) 109,113 211,961 351,890 FUND BALANCES, JANUARY 1 3,976,358 3,976,358 3,976,358 - 3,624,468 FUND BALANCES, DECEMBER 31 3,873,510$ 3,873,510$ 4,085,471$ 211,961$ 3,976,358$ -85- Exhibit D-1CITY OF SHOREWOOD, MINNESOTA DEBT SERVICE FUNDS COMBINING BALANCE SHEET DECEMBER 31, 2014 2007A 2007B 2007C 2008 Public Safety Public Safety Public Safety Lease Revenue Building Building Building Bond Total ASSETS Cash and temporary investments 9,469$ (769)$ 2,063$ 3,153$ 13,916$ Due from other governments 6,441 6,441 1,516 - 14,398 Lease receivable 2,960,000 3,075,000 1,065,000 - 7,100,000 TOTAL ASSETS 2,975,910$ 3,080,672$ 1,068,579$ 3,153$ 7,128,314$ LIABILITIES Accounts payable 740$ 745$ 740$ 435$ 2,660$ DEFERRED INFLOWS OF RESOURCES Unavailable revenue - lease receivables 2,960,000 3,075,000 1,065,000 - 7,100,000 FUND BALANCES Restricted for debt service 15,170 4,927 2,839 2,718 25,654 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES 2,975,910$ 3,080,672$ 1,068,579$ 3,153$ 7,128,314$ -86- Exhibit D-2CITY OF SHOREWOOD, MINNESOTA DEBT SERVICE FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2014 2007A 2007B 2007C 2008 Public Safety Public Safety Public Safety Lease Revenue Building Building Building Bond Total REVENUES Lease payments 398,175$ 413,190$ 158,285$ -$ 969,650$ EXPENDITURES Debt service Principal 265,000 275,000 110,000 55,000 705,000 Interest and service charges 132,607 137,627 47,717 49,445 367,396 TOTAL EXPENDITURES 397,607 412,627 157,717 104,445 1,072,396 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 568 563 568 (104,445) (102,746) OTHER FINANCING SOURCES Transfers in - - - 103,950 103,950 NET CHANGE IN FUND BALANCES 568 563 568 (495) 1,204 FUND BALANCES, JANUARY 1 14,602 4,364 2,271 3,213 24,450 FUND BALANCES, DECEMBER 31 15,170$ 4,927$ 2,839$ 2,718$ 25,654$ -87- Exhibit E-1CITY OF SHOREWOOD, MINNESOTA AGENCY FUND COMBINING SCHEDULE OF CHANGES IN ASSETS AND LIABILITIES FOR THE YEAR ENDED DECEMBER 31, 2014 Balance Balance January 1 Additions Deductions December 31 Developer Escrow Accounts ASSETS Cash and temporary investments 108,503$ 245,668$ (225,610)$ 128,561$ LIABILITIES Escrow deposits payable 108,503$ 245,668$ (225,610)$ 128,561$ -88- Exhibit F-1CITY OF SHOREWOOD, MINNESOTA SUPPLEMENTARY INFORMATION SUMMARY FINANCIAL REPORT REVENUES AND EXPENDITURES FOR GENERAL OPERATIONS GOVERNMENTAL FUNDS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 2014 2013 REVENUES Taxes 4,864,095$ 4,764,472$ 2.09 % Licenses and permits 270,841 204,600 32.38 Intergovernmental 891,055 76,544 1,064.11 Charges for services 90,825 92,549 (1.86) Fines and forfeits 64,290 59,294 8.43 Interest on investments 86,530 37,461 130.99 Miscellaneous 1,185,219 1,234,312 (3.98) TOTAL REVENUES 7,452,855$ 6,469,232$ 15.20 % Per Capita 991$ 870$ 13.89 % EXPENDITURES Current General government 1,198,707$ 1,249,616$ (4.07)% Public safety 1,526,786 1,494,633 2.15 Public works 743,803 860,071 (13.52) Culture and recreation 310,051 324,745 (4.52) Capital outlay General government 55,827 322 17,237.58 Public safety 508,187 515,419 (1.40) Public works 1,525,025 605,761 151.75 Culture and recreation 302,816 1,539,328 (80.33) Debt service Principal 705,000 675,000 4.44 Interest and service charges 367,396 391,213 (6.09) TOTAL EXPENDITURES 7,243,598$ 7,656,108$ (5.39)% Per Capita 963$ 1,029$ (6.47)% Total Long-term Indebtedness 8,135,000$ 8,840,000$ (7.98)% Per Capita 1,081$ 1,188$ (9.03) General Fund Balance - December 31 4,085,471$ 3,976,358$ 2.74 % Per Capita 543$ 535$ 1.57 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 952-960-7903. Percent Increase (Decrease) Total -89- THIS PAGE IS LEFT BLANK INTENTIONALLY -90- STATISTICAL SECTION (UNAUDITED) CITY OF SHOREWOOD SHOREWOOD, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2014 -91- THIS PAGE IS LEFT BLANK INTENTIONALLY -92- 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. -93- CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (accrual basis of accounting) 2005 2006 2007 2008 Governmental activities Net investment in capital assets 11,372,213$ 11,690,620$ 10,960,550$ 9,430,566$ Restricted - 24,632 - - Unrestricted 6,316,707 5,716,027 6,147,185 7,400,859 Total governmental activities net position 17,688,920$ 17,431,279$ 17,107,735$ 16,831,425$ Business-type activities Net investment in capital assets 6,172,309$ 5,668,683$ 6,066,229$ 6,631,854$ Unrestricted 8,182,612 9,829,761 10,422,397 10,186,824 Total business-type activities net position 14,354,921$ 15,498,444$ 16,488,626$ 16,818,678$ Total primary government Net investment in capital assets 17,544,522$ 17,359,303$ 17,026,779$ 16,062,420$ Restricted - 24,632 - - Unrestricted 14,499,319 15,545,788 16,569,582 17,587,683 Total primary government 32,043,841$ 32,929,723$ 33,596,361$ 33,650,103$ Fiscal Year -94- Table 1 2009 2010 2011 2012 2013 2014 9,480,314$ 9,525,991$ 9,223,669$ 8,487,162$ 9,212,415$ 9,754,046$ - - - - - - 7,909,106 8,252,497 7,964,703 7,979,370 7,138,847 7,317,095 17,389,420$ 17,778,488$ 17,188,372$ 16,466,532$ 16,351,262$ 17,071,141$ 6,482,297$ 6,494,996$ 6,675,613$ 6,494,076$ 6,705,907$ 6,718,271$ 9,449,210 8,666,149 8,186,835 8,148,173 7,951,219 7,890,327 15,931,507$ 15,161,145$ 14,862,448$ 14,642,249$ 14,657,126$ 14,608,598$ 15,962,611$ 16,020,987$ 15,899,282$ 14,981,238$ 15,918,322$ 16,472,317$ - - - - - - 17,358,316 16,918,646 16,151,538 16,127,543 15,090,066 15,207,422 33,320,927$ 32,939,633$ 32,050,820$ 31,108,781$ 31,008,388$ 31,679,739$ Fiscal Year -95- CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN NET POSITION - CONTINUED ON THE FOLLOWING PAGES LAST TEN FISCAL YEARS (accrual basis of accounting) 2005 2006 2007 2008 Expenses Governmental activities General government 1,222,510$ 1,357,714$ 1,321,971$ 1,483,913$ Public safety 1,690,903 1,806,915 1,819,250 1,906,890 Public works 5,019,967 2,275,402 1,971,571 2,485,752 Culture and recreation 246,381 233,881 258,906 273,054 Interest on long-term debt 606,189 600,723 1,000,230 1,002,423 Total governmental activities expenses 8,785,950 6,274,635 6,371,928 7,152,032 Business-type activities Water 567,854 488,513 636,506 657,776 Sewer 740,174 785,638 952,107 921,238 Recycling 105,823 124,354 91,157 96,945 Stormwater management utility 73,885 171,190 63,888 106,143 Liquor 2,006,107 2,017,217 1,885,537 16,167 Total business-type activities expenses 3,493,843 3,586,912 3,629,195 1,798,269 Total expenses 12,279,793$ 9,861,547$ 10,001,123$ 8,950,301$ Program revenues Governmental activities Charges for services General government 112,107$ 25,340$ 41,475$ 32,528$ Public safety 1,055,758 1,060,506 896,731 793,041 Public works - - - - Culture and recreation 1,575 1,800 1,960 605 Operating grants and contributions 100,910 31,730 99,800 90,493 Capital grants and contributions 2,404,367 395,229 132,912 674,343 Total governmental activities program revenues 3,674,717 1,514,605 1,172,878 1,591,010 Business-type activities Charges for services Water 649,772 1,350,041 782,549 752,338 Sewer 833,939 836,175 832,956 829,117 Recycling 116,517 144,886 89,934 64,629 Stormwater management utility 102,649 129,708 164,413 204,618 Liquor 2,040,314 1,984,344 1,788,835 - Operating grants and contributions - - - 27,950 Capital grants and contributions - - - - Total business-type activities program revenues 3,743,191 4,445,154 3,658,687 1,878,652 Total program revenues 7,417,908$ 5,959,759$ 4,831,565$ 3,469,662$ Fiscal Year -96- Table 2 2009 2010 2011 2012 2013 2014 1,486,281$ 1,235,098$ 1,405,791$ 1,331,286$ 1,310,296$ 1,277,118$ 1,904,966 1,893,413 1,960,894 1,947,868 2,010,338 2,036,394 1,941,272 2,231,473 2,031,136 2,162,123 1,884,986 1,991,852 394,110 452,437 412,257 460,879 471,784 397,365 638,768 474,082 449,773 428,887 379,685 355,378 6,365,397 6,286,503 6,259,851 6,331,043 6,057,089 6,058,107 659,113 643,886 690,363 689,205 693,193 690,479 955,956 980,173 1,151,626 1,065,926 847,097 873,711 99,286 173,896 174,857 187,713 181,537 178,457 106,847 131,107 233,035 273,846 107,935 203,825 129 25 - - - - 1,821,331 1,929,087 2,249,881 2,216,690 1,829,762 1,946,472 8,186,728$ 8,215,590$ 8,509,732$ 8,547,733$ 7,886,851$ 8,004,579$ 34,064$ 53,381$ 108,394$ 144,883$ 187,628$ 199,394$ 634,742 624,330 544,749 604,400 599,810 642,680 6,279 - 6,293 4,137 226 1,222 35,843 58,661 72,678 79,206 120,794 102,985 90,681 99,114 113,717 102,959 144,112 48,284 43 114,330 - - - 811,522 801,652 949,816 845,831 935,585 1,052,570 1,806,087 784,318 668,676 672,793 757,395 537,713 443,467 802,252 845,043 819,496 831,640 834,320 852,254 65,112 146,002 151,894 157,585 165,713 164,666 191,157 198,593 196,070 193,931 194,950 220,658 - - - - - - 28,488 28,762 33,586 23,007 25,830 31,279 - - 15,000 22,400 53,200 115,490 1,871,327 1,887,076 1,888,839 1,985,958 1,811,726 1,827,814 2,672,979$ 2,836,892$ 2,734,670$ 2,921,543$ 2,864,296$ 3,633,901$ Fiscal Year -97- CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN NET POSITION - CONTINUED LAST TEN FISCAL YEARS (accrual basis of accounting) 2005 2006 2007 2008 Net revenues (expenses) Governmental activities (5,111,233)$ (4,760,030)$ (5,199,050)$ (5,561,022)$ Business-type activities 249,348 858,242 29,492 80,383 Total primary government (4,861,885)$ (3,901,788)$ (5,169,558)$ (5,480,639)$ General Revenues and Other Changes in Net Position General Revenues Governmental activities Taxes Property taxes, levied for general purpose 3,770,702$ 4,144,543$ 4,360,254$ 4,582,909$ Grants and contributions not restricted to specific programs 4,785 4,925 37,746 19,957 Unrestricted investment earnings 201,024 327,921 621,234 641,846 Gain on sale of capital assets 4,300 - - - Transfers (17,000) 25,000 (143,728) 40,000 Total governmental activities general revenues 3,963,811 4,502,389 4,875,506 5,284,712 Business-type activities Unrestricted investment earnings 190,943 310,281 434,072 289,669 Gain on sale of capital assets - - 382,890 - Transfers 17,000 (25,000) 143,728 (40,000) Total business-type activities general revenues 207,943 285,281 960,690 249,669 Total primary government 4,171,754$ 4,787,670$ 5,836,196$ 5,534,381$ Change in Net Position Governmental activities (1,147,422)$ (257,641)$ (323,544)$ (276,310)$ Business-type activities 457,291 1,143,523 990,182 330,052 Total primary government (690,131)$ 885,882$ 666,638$ 53,742$ Fiscal Year -98- Table 2 2009 2010 2011 2012 2013 2014 (5,563,745)$ (5,336,687)$ (5,414,020)$ (5,395,458)$ (5,004,519)$ (4,252,020)$ 49,996 (42,011) (361,042) (230,732) (18,036) (118,658) (5,513,749)$ (5,378,698)$ (5,775,062)$ (5,626,190)$ (5,022,555)$ (4,370,678)$ 4,743,174$ 4,744,348$ 4,733,948$ 4,761,213$ 4,768,989$ 4,854,521$ 4,940 4,487 4,751 6,019 5,818 5,848 333,626 132,359 56,705 61,584 37,461 86,530 - 31,130 28,500 - 76,981 - 1,040,000 813,431 - - - 25,000 6,121,740 5,725,755 4,823,904 4,828,816 4,889,249 4,971,899 102,833 85,080 62,345 64,135 32,913 95,130 - - - - - - (1,040,000) (813,431) - - - (25,000) (937,167) (728,351) 62,345 64,135 32,913 70,130 5,184,573$ 4,997,404$ 4,886,249$ 4,892,951$ 4,922,162$ 5,042,029$ 557,995$ 389,068$ (590,116)$ (566,642)$ (115,270)$ 719,879$ (887,171) (770,362) (298,697) (166,597) 14,877 (48,528) (329,176)$ (381,294)$ (888,813)$ (733,239)$ (100,393)$ 671,351$ Fiscal Year -99- CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS 2005 2006 2007 2008 General fund Reserved 48,593$ -$ -$ 47,750$ Unreserved 2,944,588 3,383,906 3,761,509 3,660,359 Nonspendable - - - - Unassigned - - - - Total general fund 2,993,181$ 3,383,906$ 3,761,509$ 3,708,109$ All other governmental funds Reserved 238,873$ 262,438$ 10,040,556$ 10,033,342$ Unreserved, reported in Special revenue funds - - - - Capital project funds 3,116,437 2,197,367 2,473,097 3,743,980 Nonspendable - - - - Restricted - - - - Assigned - - - - Unassigned - - - - Total all other governmental funds 3,355,310$ 2,459,805$ 12,513,653$ 13,777,322$ Fiscal Year Note: The City implemented GASB 54 in fiscal year 2011, resulting in significant reclassification of the components of fund balance. Years prior to 2011 have not been restated. -100- Table 3 2009 2010 2011 2012 2013 2014 500$ 49,060$ -$ -$ -$ -$ 3,555,224 3,477,932 - - - - - - 48,000 50,000 33,016 103,996 - - 3,440,227 3,574,468 3,943,342 3,981,475 3,555,724$ 3,526,992$ 3,488,227$ 3,624,468$ 3,976,358$ 4,085,471$ 1,934,628$ 96,333$ -$ -$ -$ -$ - (17,650) - - - - 4,252,870 4,520,558 - - - - - - 150,068 150,068 150,068 - - - 30,439 17,700 24,450 25,654 - - 4,229,528 4,368,656 3,117,434 3,339,005 - - - (75,325) (52,437) - 6,187,498$ 4,599,241$ 4,410,035$ 4,461,099$ 3,239,515$ 3,364,659$ Fiscal Year -101- CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS 2005 2006 2007 2008 Revenues Taxes 3,750,633$ 4,141,539$ 4,332,741$ 4,582,602$ Licenses and permits 334,720 382,408 256,472 195,419 Intergovernmental 2,432,656 365,732 224,286 753,605 Charges for services 50,752 45,450 50,819 50,753 Fines and forfeitures 90,149 79,040 77,777 53,369 Special assessments 6,928 895 418 - Interest on investments 201,024 327,921 621,234 641,846 Miscellaneous 1,134,429 1,110,860 1,077,012 1,053,916 Total revenues 8,001,291 6,453,845 6,640,759 7,331,510 Expenditures General government 1,169,096 1,264,509 1,253,223 1,443,549 Public safety 1,124,620 1,257,998 1,263,921 1,352,254 Public works 570,080 626,048 718,350 760,287 Culture and recreation 167,519 169,411 190,931 229,259 Capital outlay 4,307,721 2,571,204 1,123,796 2,164,366 Debt service Principal 384,842 486,728 534,594 485,000 Interest and service charges 611,358 607,727 956,532 977,957 Bond issuance costs - - - 58,569 Total expenditures 8,335,236 6,983,625 6,041,347 7,471,241 Excess (deficiency) of revenues over (under) expenditures (333,945) (529,780) 599,412 (139,731) Other financing sources (uses) Transfers in 542,000 635,000 770,091 933,366 Sale of capital assets - - - - Proceeds from sale of bonds - - 10,000,000 1,310,000 Bonds refunded - - - - Discount on long-term debt issued - - (24,233) - Transfers out (559,000) (610,000) (913,819) (893,366) Total other financing sources (uses)(17,000) 25,000 9,832,039 1,350,000 Net change in fund balances (350,945)$ (504,780)$ 10,431,451$ 1,210,269$ Debt service as a percentage of Noncapital expenditures 12.7%20.1%26.3%23.1% Fiscal Year -102- Table 4 2009 2010 2011 2012 2013 2014 4,703,368$ 4,717,204$ 4,787,195$ 4,783,939$ 4,764,472$ 4,864,095$ 127,883 154,113 174,119 175,087 204,600 270,841 66,411 173,334 72,968 76,102 76,544 891,055 41,649 100,899 102,500 121,625 92,549 90,825 52,968 55,806 52,635 66,230 59,294 64,290 - 333 - - - - 333,626 132,359 56,705 61,584 37,461 86,530 1,059,914 1,037,522 1,032,566 1,115,836 1,234,312 1,185,219 6,385,819 6,371,570 6,278,688 6,400,403 6,469,232 7,452,855 1,386,614 1,147,198 1,306,948 1,288,704 1,249,616 1,198,707 1,392,139 1,392,923 1,460,664 1,445,149 1,494,633 1,526,786 670,954 859,069 866,413 823,234 860,071 743,803 326,502 342,654 343,326 331,524 324,745 310,051 1,953,756 2,075,109 1,457,001 1,230,058 2,660,830 2,391,855 520,000 600,000 625,000 655,000 675,000 705,000 818,063 516,167 447,307 439,429 391,213 367,396 - - - - - - 7,068,028 6,933,120 6,506,659 6,213,098 7,656,108 7,243,598 (682,209) (561,550) (227,971) 187,305 (1,186,876) 209,257 2,059,773 1,942,550 984,541 1,170,216 2,482,650 1,340,120 - 31,130 - - 317,182 - - - - - - - (8,100,000) (1,900,000) - - - - - - - - - - (1,019,773) (1,129,119) (984,541) (1,170,216) (2,482,650) (1,315,120) (7,060,000) (1,055,439) - - 317,182 25,000 (7,742,209)$ (1,616,989)$ (227,971)$ 187,305$ (869,694)$ 234,257$ 22.4%19.1%18.4%18.3%18.5%18.7% Fiscal Year -103- 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 75.92 %93.39 %95.26 %97.35 % 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 25.971 %25.408 %23.501 %22.793 % Debt service 3.870 3.535 3.439 3.119 Total 29.841 %28.944 %26.940 %25.912 % 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. CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) TAX CAPACITY, MARKET VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY (Shown by year of tax collectability) Source: Hennepin County Assessor 3,835,173$ (276,939) 399,944 4,190,395$ 12,836,707$ 14,477,835$ 561,135 4,396,308$ 555,078 3,333,864$ 445,780 4,056,917$ 17,798,714$ 496,792 (213,988) 16,319,066$ 16,130,097 17,619,943 14,354,830 12,590,290 12,671,623 379,072 17,704,723 (351,789) 89,872$ 84,780$ 1,480,120,400$ 1,553,767,900$ 1,645,188,300$ 1,601,599,000$ 1,177,159,300$ 1,550,488,900$ 1,416,341,600$ 1,322,674,600$ 4,611,995$ 3,830,656$ 3,678,592$ 511,803 2008200720062005 85,635$ 81,333$ 14,269,195 16,219,969 (308,590) 407,687 1,597,262,400 4,130,300$ 1,173,029,000 4,361,600$ 4,591,200$ 1,318,313,000 1,475,529,200 4,336,600$ -104- Table 5 98.93 %99.91 %99.89 %98.77 %98.61 %98.55 % 22.463 %22.771 %24.790 %26.141 %31.516 %32.683 % 3.336 3.372 3.604 - - - 25.799 %26.143 %28.394 %26.141 %31.516 %32.683 % 14,865,833$ 4,858,585$ - 4,858,585$ CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) TAX CAPACITY, MARKET VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY (Shown by year of tax collectability) 2014 6,068,600$ 1,345,804,540 1,351,873,140$ 1,371,752,400$ 114,632$ 14,770,327 14,884,959 (393,620) 374,494 (393,282) 368,528 15,114,127$ 4,763,319$ - 4,763,319$ 616,000 4,776,292$ 617,620 4,776,292$ 2013 6,006,500$ 1,367,209,584 1,373,216,084$ 1,392,562,700$ 113,130$ 15,025,751 15,138,881 91,548$ 1,655,819,600$ 1,673,720,100$ 5,291,700$ 2012 1,636,567,900$ 1,638,118,400$ 1,514,456,700$ 1,430,712,101 1,512,848,900$ 15,761,142 1,436,003,801$ 1,453,867,700$ 102,084$ 18,305,114 88,848$ 18,087,557 4,160,292$ 18,269,931$ 18,176,405 (432,995) 4,158,672$ 18,513,585$ 526,521 15,863,226 16,715,845 (389,965) 435,462 4,763,319$ 604,647 4,158,672$ 16,775,778$ 4,158,672$ - 4,158,672$ 15,908,723$ (419,002) 2010 478,935 95,216$ 16,620,629 20112009 18,396,662 (396,336) 513,259 4,764,900$ 1,651,054,700 4,629,900$ 4,948,300$ 1,631,938,000 1,507,900,600 -105- CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) PROPERTY TAX CAPACITY RATES - DIRECT AND OVERLAPPING GOVERNMENTS (PER $1,000 OF TAX CAPACITY IN 2005 - 2014) Year Taxes Payable City County No. 276 No. 277 2005 29.841 %44.172 %21.989 %16.250 %1.276 %1.375 %7.382 % 2006 28.944 41.016 22.952 10.522 1.072 0.787 6.998 2007 26.940 39.110 24.793 9.911 1.121 0.743 7.310 2008 25.912 38.571 17.980 8.521 1.404 1.302 7.397 2009 25.799 40.413 17.186 8.284 1.489 1.246 7.154 2010 26.143 42.640 18.657 9.772 1.511 1.279 8.138 2011 28.394 45.840 21.274 10.900 1.606 1.352 9.172 2012 26.141 48.231 23.015 17.262 1.705 1.387 9.923 2013 31.516 49.461 24.487 18.119 1.769 1.523 10.089 2014 32.683 49.959 24.374 19.075 1.806 1.880 10.561 Source: Hennepin County Assessor (1) Includes vocational school Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all City property owners (e.g. the rates for special districts apply only to the proportion of the government's property owners whose property is located within the geographic boundaries of the special district). School District (1) Watershed District Overlapping Rates No. 3 No. 4 Misc. -106- Table 6 104.660 %104.759 %98.921 % 100.982 100.697 88.552 99.274 98.896 84.392 91.264 91.162 81.805 92.041 91.798 83.139 97.089 96.857 88.204 106.286 106.032 95.912 109.015 108.697 103.262 117.322 117.076 110.954 119.383 119.457 114.084 Totals School District No. 276 District School District No. 277 Watershed District Watershed Watershed District No. 3No. 3 No. 4 -107- Table 7CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) PRINCIPAL TAXPAYERS CURRENT YEAR AND NINE YEARS AGO Tax Tax Taxpayer Capacity Rank Capacity Rank Shorewood Village Shopping Center, Inc. (Towle Real Estate)139,650$ 1 0.94 %71,790$ 3 0.57 % Big Box One, LLC 130,310 2 0.88 92,190 1 0.73 Two S Properties (Shurgard Storage)104,640 3 0.70 73,610 2 0.58 Jack & Gretchen Norqual 86,264 4 0.58 South Lake Office Building LLC 66,690 5 0.45 - - - W of Shorewood LLC (Minnetonka Portable Dredging)57,650 6 0.39 48,250 6 0.38 Beacon Bank 56,870 7 0.38 43,490 9 0.34 Elaine & Gary Jarrett 52,325 8 0.35 - - - Waterford Center LLP 51,630 9 0.35 45,110 8 0.36 The Mary Sue Simon Qprt 48,963 10 0.33 46,940 7 0.37 Minnetonka Country Club - - - 51,890 4 0.41 Kimberley & Frank Vennes - - - 50,625 5 0.40 Thomas J. & Cynthia J. Redmond - - - 41,875 10 0.33 Totals 794,992$ 5.35 %565,770$ 4.47 % Source: Hennepin County Assessor Tax Capacity of Total Tax Capacity Percent 2014 2005 Percent of Total -108- 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 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 75,258 4,395,547 99.98 2008 4,611,995 4,546,899 98.59 61,628 4,608,527 99.92 2009 4,776,292 4,649,904 97.35 121,741 4,771,645 99.80 2010 4,776,292 4,685,060 98.09 86,103 4,771,163 99.81 2011 4,763,319 4,706,900 98.82 52,046 4,758,946 99.80 2012 4,763,319 4,717,658 99.04 39,698 4,757,356 99.84 2013 4,763,319 4,720,748 99.11 36,288 4,757,036 99.87 2014 4,858,585 4,812,478 99.05 - 4,812,478 99.05 Percent Collections of Total (1) Includes state paid property tax credits. Percentage of Levy Collected to Levy -109- 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 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 1,785 2012 - 9,515,000 - 2,500,000 12,015,000 2.86 1,615 2013 - 8,840,000 - 3,540,000 12,380,000 2.83 1,664 2014 - 8,135,000 - 2,160,000 10,295,000 2.26 1,368 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 115 for personal income and population data. Personal Income Governmental Activities Percentage of -110- Table 10CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) COMPUTATION OF DIRECT AND OVERLAPPING DEBT DECEMBER 31, 2014 Gross Amount Bonded of Debt Used Net Debt For Net Debt Net Applicable Calculation Debt to District Direct Debt City of Shorewood 8,135,000$ 8,135,000$ 100.00 %8,135,000$ Overlapping Debt School District #276 108,717,548$ 95,419,347$ 18.98 %18,110,592$ School District #277 30,040,000 29,367,121 2.34 687,191 Hennepin County 766,200,000 753,266,880 1.16 8,737,896 Henn Suburban Park District 64,495,000 52,209,049 1.57 819,682 Henn Regional RR Authority 36,205,000 35,200,157 1.57 552,642 Metropolitan Council 220,775,000 93,953,739 0.59 554,327 Total Overlapping Debt 1,226,432,548$ 1,059,416,293$ 2.78 %29,462,330$ Total Direct and Overlapping Debt 1,234,567,548$ 1,067,551,293$ 3.52 %37,597,330$ 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 -111- CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS 2005 2006 2007 2008 Debt limit 23,543,186$ 26,453,492$ 29,602,408$ 32,031,980$ Total net debt applicable to limit - - - - Legal debt margin 23,543,186$ 26,453,492$ 29,602,408$ 32,031,980$ Total net debt applicable to the limit as a percentage of debt limit -$ -$ -$ -$ 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 -112- Table 11 2009 2010 2011 2012 2013 2014 33,116,392$ 32,731,358$ 45,385,467$ 43,080,114$ 41,196,483$ 40,556,194$ - - - - - - 33,116,392$ 32,731,358$ 45,385,467$ 43,080,114$ 41,196,483$ 40,556,194$ -$ -$ -$ -$ -$ -$ Legal Debt Margin Calculation for Fiscal Year 2014 Taxable market value 1,351,873,140$ Debt limit (3% of market value)40,556,194$ Debt applicable to limit General obligation bonds - Less: amount available in debt service funds - Total net debt applicable to limit - Legal debt margin 40,556,194$ Fiscal Year -113- Table 12CITY 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 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 2013 595,599 300,232 295,367 185,000 75,630 1.13 2014 542,606 401,476 141,130 220,000 19,708 0.59 (1) Including interest and other income (2) Excluding depreciation and interest on bonds Revenue from Fiscal Property Year Taxes Principal Interest 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 - - - - 2013 - - - - 2014 - - - - Revenue from Fiscal Lease Year Payments Principal Interest 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 2013 972,513 625,000 335,513 1.01 2014 969,650 650,000 335,513 0.98 General Obligation Revenue Bonds Coverage Capital Leases Coverage Coverage Lease Revenue Bonds Debt Service Debt Service Debt Service -114- Table 13CITY 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) 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 2013 7,438 438,083,324 58,898 43.6 56.4 3.8 2014 7,524 455,961,924 60,601 44.5 61.8 3.0 Data Sources: (1) Metropolitan Council (2) Bureau of Economic Analysis (3) US Census Bureau (4) US Census Bureau 2000 (5) Minnesota Department of Employment and Economic Development - Hennepin County Graduate Degree (4)Rate (5) Unemployment Note: Population, median age, and education level information are based on surveys conducted during the last quarter of the calendar year. Personal income information is a total for the year. Unemployment rate information is an adjusted yearly average. School enrollment is based on the census at the start of the school year. Percent of Population Which Has a Bachelor's or Post -115- Table 14CITY OF SHOREWOOD, MINNESOTA PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO (1) Employees Rank Employees Rank Cub Foods 122 10.82 %- N/A % Minnewashta Elementary School 121 10.73 - N/A Xcel Energy 75 6.65 - N/A Beacon Bank 36 3.19 - N/A City of Shorewood 26 *2.30 - N/A Park Nicollet Clinic 20 *1.77 - N/A Total 400 35.46 %- - % Total City Employment 1,128 Source: Minnesota Department of Employment and Economic Development * Includes part-time and temporary seasonal employees. N/A - indicates not available (1) Information for 2005 was not available. The table will be updated for future years. Employer Percentage of Total City Employment 20052014 Percentage of Total City Employment -116- Table 15CITY OF SHOREWOOD, MINNESOTA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS (1) 2006 2007 2008 2009 2010 2011 2012 2013 2014 General government 13 13 13 12 12 10 10 9 9 Public works Engineering - - - - - 1 1 - - Maintenance 6 6 6 6 6 5 5 6 6 Culture and recreation Parks 13 5 5 5 5 3 3 2 2 Economic development Water 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1 1 Sewer 1.5 1.5 1.5 1.5 1.5 1.5 1.5 2 2 Municipal Liquor 3 2 - - - - - - - Total 38 29 27 26 26 22 22 20 20 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 -117- Table 16CITY OF SHOREWOOD, MINNESOTA OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS (1) 2006 2007 2008 2009 2010 2011 2012 2013 2014 Building/engineering Permits issued 1,137 710 686 603 591 512 585 481 792 Public works Street sweeping (hours)1,000 1,614 1,500 1,550 1,400 1,600 1,600 1,400 1,400 Snowplowing (hours)2,000 1,394 1,508 765 1,024 895 616 1,403 833 Equipment repair (hours)2,080 2,080 2,080 2,080 1,280 1,591 1,725 1,716 1,542 Water New connections 24 22 13 11 1 2 3 9 - Water mains breaks 3 7 3 3 5 6 7 3 7 Average daily consumption (thousands of gallons)482,000 482,000 482,000 467,600 467,600 465,300 465,300 465,300 465,300 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 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 -118- Table 17CITY OF SHOREWOOD, MINNESOTA CAPITAL ASSET STATISTICS BY FUNCTION LAST TEN FISCAL YEARS (1) 2006 2007 2008 2009 2010 2011 2012 2013 2014 Public works Highways and streets Streets (miles)50 51 51 51 51 51 51 51 51 Street lights 194 194 194 194 194 194 194 194 194 Traffic signals 5 5 5 5 5 5 5 5 5 Culture and recreation Parks division Parks 7 7 7 7 7 7 7 7 7 Parks acreage 102 102 102 102 102 102 102 102 102 Baseball diamonds 5 5 5 5 5 5 5 5 5 Basketball courts 1 1 1 1 1 1 1 1 1 Bike trails (miles)2.45 2.45 2.45 2.45 2.45 2.45 2.45 4.00 4.00 Hockey rinks/outdoor 3 3 3 3 3 3 3 3 3 Softball diamonds 3 3 3 3 3 3 3 3 3 Swimming areas 1 1 1 1 1 1 1 1 1 Tennis courts 5 5 5 5 5 5 5 5 5 Volleyball courts 2 2 2 2 2 2 2 2 2 Utilities Water Miles of water main 27 28 28 28 28 28 28 28 28 Consumers 1,265 1,297 1,310 1,321 1,322 1,324 1,327 1,336 1,336 Maximum daily capacity (gallons)919,000 919,000 919,000 919,000 919,000 919,000 919,000 919,000 919,000 Sewer Miles of sanitary sewer 60 60 60 60 60 60 60 60 60 Lift stations 14 14 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 1,000,000 1,000,000 Storm sewer Miles of storm sewer 12 12 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 -119-