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annual financial report ~ I I I I I I I I I ,I I I' I I I I I I I CITY OF SHOREWOOD, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT for the YEAR ENDED DECEMBER 31, 1996 I I I I I I I 1/ I I I I , .1 I I I IJ I /1 CITY Or SHOREWPOD, (MINNESOTA COMPREHENSIVE ANNUAL FINAN€IAL/ REPORT FOR THE YEAR ENDED DECEMBER. 31, 1.996 JAMES C. HURM, lefTY ADMINIsTRATOIt \ RE~QRT PREi>ARED,BY: D~PARTMENT"OF FINANCE / ;' ALAN J.. BOLEK, FINANCE D~RECTORtTR~ASURER ---, MEMBER' of GOVERNMENT f'INANCE /OFFlCERS\ASSoCIATION, OF THE UNITED STATES AND CANADA .! l \ \ I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA TABLE OF CONTENTS DECEMBER 31, 1996 I. INTRODUCTORY SECTION Elected and Appointed Officials Organizational Chart Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting II. FINANCIAL SECTION Independent Auditor's Report General Pw:pose Financial Statements Exhibit Page No. I - VII Combined Balance Sheet - All Fund Types and Account Groups Combined Statement of Revenue, Expenditures and Changes in Fund Balance - All Governmental Fund Types 2 Statement of Revenue, Expenditures and Changes in Fund Balance - Budget and Actual- General Fund 3 Combined Statement of Revenue, Expenses and Changes in Retained Earnings - All Proprietary Fund Types 4 Combined Statement of Cash Flows - All Proprietary Fund Types 5 Notes to Financial Statements Combining and Individual Fund and Account Group Financial Statements and Schedules General Fund Comparative Balance Sheets Statement of Revenue, Expenditures and Changes in Fund Balance - Budget and Actual Debt Service Funds Combining Balance Sheet Combining Statement of Revenue, Expenditures and Changes in Fund Balance Capital Projects Funds Combining Balance Sheet Combining Statement of Revenue, Expenditures and Changes in Fund Balance Enterprise Funds Combining Balance Sheet Combining Statement of Revenue, Expenses and Changes in Retained Earnings CombiningStatememofCashFwws Water Fund Comparative Balance Sheets Comparative Statements of Revenue, Expenses and Changes in Retained Earnings (Deficit) Comparative Statements of Cash Flows Sewer Fund Comparative Balance Sheets Comparative Statements of Revenue, Expenses and Changes in Retained Earnings Comparative Statements of Cash Flows 2-3 4-5 6 7 8 9 -23 A-I 24 A-2 25 - 29 B-1 30 - 31 B-2 32 - 33 C-l 34 - 37 C-2 38 - 41 D-l 42 - 43 D-2 44 - 45 D-3 46 - 47 D-4 48 D-5 49 D-6 50 D-7 51 D-8 52 D-9 53 I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA TABLE OF CONTENTS DECEMBER 31, 1996 Recycling Fund Comparative Balance Sheet Comparative Statements of Revenue, Expenses and Changes in Retained Earnings Comparative Statements of Cash Flows Stormwater Management Utility Fund Comparative Balance Sheets Comparative Statements of Revenue, Expenses and Changes in Retained Earnings Comparative Statements of Cash Flows Liquor Fund Comparative Balance Sheets Comparative Statements of Revenue, Expenses and Changes in Retained Earnings Comparative Statements of Cash Flows Combining Balance Sheet Combining Schedules of Revenue, Expenses and Changes in Retained Earnings Combining Schedules of Cash Flows Agency Fund Statement of Changes in Assets and Liabilities General Fixed Asset Account Group Comparative Schedule of General Fixed Assets - by source Schedule of General Fixed Assets - by function and activity Schedule of Changes in General Fixed Assets - by function General Long-term Debt Account Group ComparatiwState~mmGe~ralLo~~rmD~ Schedule of Bonds Payable Schedule of Debt Service Requirements ill. STATISTICAL SECTION General Fund Expenditures and Other Uses by Function General Fund Revenue and Other Sources by Source Property Tax Levies and Collections Assessed Valuation, Tax Levies and Mill Rates Property Tax Mill RateslTax Capacity Rates - Direct and Overlapping Governments Principal Taxpayers Special Assessment Levies and Collections Computation of Legal Debt Margin Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt per Capita Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures Computation of Direct and Overlapping Debt Revenue Bond Coverage Property Value, Construction and Bank Deposits Miscellaneous Statistics Exhibit Page No. D-I0 54 D-ll 55 D-12 56 D-13 57 D-14 58 D-15 59 D-16 60 D-17 61 D-18 62 D-19 63 - 64 D-20 65 - 66 D-21 67 - 68 E-l 69 F-l 70 F-2 71 F-3 72 G-l 73 H-l 74 - 75 1-1 76 - 77 1 78 2 79 3 80 4 81 - 82 5 83 -84 6 85 7 86 8 87 9 88 10 89 11 90 12 91 13 92 - 93 14 94 ------------------- ORGANIZATIONAL CHART - CITY OF SHOREWOOD I VOTERS I I CITY ATTORNEY ~ ~ - - , CITY COUNCIL BOARDS & COMMISSIONS CITY ADMINISTRATOR - PLANNING COMMISSION -PARKCOMMISSION. - SNOWMOBILE TASK FORCE I I I I I I I LIQUOR ENGINEERING FINANCE ADMINISTRATION PLANNING PUBLIC PUBLIC SAFETY & ZONING WORKS (CONTRACT) - Off-Sale - Engineering Svcs. - Personnel - General Government - Planning - Building & Grounds - Police - 4-City Joint Retail - Project Mgmt. - Accounting - Licensing - Zoning - Recycling (Contract) Services * - Payroll - Elections Administration - Tree Maintenance - Patrol - Investments - Records - Property - Park Maintenance - Disaster - Utility Billing - Legal Publications Records - Street Mainenance Preparedness - Accts. Payable - Public Information - Inspection - Equipment Mainrenance - Investigation - Accts. Recble. - Recreation Programs - Stormwater System - Public Service - Special - Park Planning - Street Lighting - Fire - Excelsior! Assessments (Contract) - SanitationlWeeds Mound - Budgeting - Assessor (Contract) - Janitor Services - Fire prevention! -MIS - Cable TV - (Contract) firefighting - Purchasing Franchise - Utility Maintenance - Animal Control - (Contract) Chanhassen * Mayor is City's representative on joint governing board. December, 1996 I I ,I I I 1 I I 1\ 1 I :1 I I I I I I I . MAYOR Tom Dahlberg COUNCIL Kristi Stover Jennifer McCl'lrty Jerry O'Neill John Garfunkel CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD -SHOREWOOD, MINNESOTA 55331-8927 - (~12), 474-3236 F~X(612) 474:0128. www.state.netlshorewood.cityhall@shorewood.state.net ,.. / May 8, 1991 Honorab~Mayor and Members of the City Council City of Shorewood,. Minnesota Councilmembers: The Compr:ehensive AmJ.ua1 Financi~IReport of the (City of Shorewood, Minnesota for the fiscal yearendtd December 31,1996, is hereby submitted,. Responsibility for both the acc~y of the data, anath~Olllpleteness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge; andbeli~f, the enclosed <lata is accurate in all material respects and is reported ina mannerdesignatedtopr~ fairly.~ fmancial.position and results of Operati~1lS of the various .funds andaccoUJ;lt groups. of the City. All disclosures necessary to enable the reader to gain an understanding of die City's finanC(ialactivities have bec;n included. . The Comprehensive Annual Financial Report, is presented m three sectiOns:. Introductory; Financial and .Statisti~. The lntroductorysection includes this tlJD,.mttat letter, theCity's..organi7.lWonalchart(and a list of City oftic~. The Financial section includes the generalP\Jl'Wscfl118J1()ial statements and the combining and individual fund and a~o~tgroup financial s~ents ~d$chedules, along with the auditor's report on the fmaucialstatementS.The Statistica1section includes selected(fmancial and demogr:aphic information, 'g~neraIJy pr~e~ on a multi-yea!' basis. The organization, form and contents of this report were prepared in acC6rdanceWith the standards prescribed by the Govenunental Accounting Standards Board, the Gqvernment Finance Officers Association <if the United. States and Canada, the American Institute 'Of Certifitd Public Accountants;. and the Minnesota State Auditor's OffICe. / . . . . / ,~ This report includes all funds'and account groupS of the City. \he various fund ~.included ~e governmental, proprietary and fiduciary. Within the -accoontgroups are general fixed assets and general long-term debt. The City provides its residents8J;l.d businesses with a tull ~ge of municipal. services consisting of police,. fire, public works, parks and general ~is~tive services. The City also operates five enter:prises: a water.utility, sewer;utjlity, recycling utility, stormwater management utility and an. off-sale liquor operation, consisting6f three $torC sites,./ , The criteria used in determining the component units.to be'included with the City as.pat(ofijts reporting entity is ~nsiste~t with those required by the G6vernme~ta1 ACCOUJ;lting Stapdards.Board.StatementNo. 14, "The Financial Reporting Entity". Based on these criteria, all fUnds and accopnt groups of the City are .incl1idedin this report, and no component units are reported herein. A Residential Community OfJ Lake Minoetonk;Ys South Shore ,,/ ~ . .. \ 11 I I I I :1 . / ;/ I , II I I I I I I nl I I I I I ECONOMIC CONDITION AND OUTLOOK The City of Shorewood is a suburb of the City of Minneapolis and is .located 25 mtles southwest of.the central business district on the sou.thern sho~/of Lake Minnetonka. The City is predominantly a residentialc~uni# with limited commercial businesses and two commercial shopping malls. lJte City is 6 square miles in area and has an estimated population of6,794. Whil~ tlie City h~ experienced an acCelerat~d rate of' growth in residential development during, the'" J980's, the growth rate, fl.as slowed in the 1990'$. The City will continue to experience growth in ~fs residential base in the future, but' because of the limited/availability of large tracts of land,' this will come at a reduced rate and ,likely will be smidler developmellts than itt the past. . MAJOR, INITIATIVES FINANCIAL AND MANAGEMENT EMPHASIS Emphasis on GoV'trna.,ce \..., ..../ ",,".... .. \.. ," ,:,,' i.... ........ '. ...: .." \ The City Council in its leadership role is effectively, establishing a' focus for city government in Shorewood. The Council has adopted a strong set; of values by/which decisions are to be made. It has adop~ a Statement of Purpose and established ove~lIgoals and expectations for the City. It has identified issues facing the City aQd prioritized them so that the staff can efficiently and effectively allocate time and resources. Emphasis on System ImprovelDeIlts i'/ ,'" '-"" ,....... .. ' .. ...... .. /', The City Council has adopted an open government policy and/~ implementing it by televisfu~ City Council m~gs, by improving ci~n news~tters, and by directing City staff to improye c:ommunication to those residents affected by City activities projects. A series of neighborhood meetings on/the five-year Capital/Improvement Program gives citiZens an opportunity for one on one discuSsions with policy makers and for meaningtul input On plans for ttte next five yelJfS. // The City Council recognize{ that its work consists of more 'than responding tocitize~ requests and adopting an annual bu~get. 'The Pity Council's calendar consists of three phases. The frrst phase isPlannin" Which includes employee and systems evaluations, review of the previo~ years w()rk plan, review of the City's\Comprehensive Plan Executive S~ary, review of the statements of Purpose aJ;I.d Values, and identification and prioritization of issues for th~ next twelve and twenty-four montbs./ .'. , , ,'-- i .. / The .sec:ondphase is that of Programming. :Bach year the five-year Capijallmprovement Progr'amis revic;wtd and updated based upon, priorities established in phase one. Any changes. to the COmprehensive Plan are m~ based upon the phase C)ne decisions. ) ~ / , \ The third phase is Budgeting. The operating budget is establi$hedbased on d~isions made in the frrst two phases, A.. budget format is being utilized which prowdes information and 'analytical data. to ttte City Council and other readers. ,It dermes 'departmental missions and,sets objectives for the budget year. In addition, it measures services providtdand identifies the net affect each departmental budget has on property taxes. A .surv~y has been conducttd in each ofthela'stfour years to measute citizen satisfaction with city services with results incor:porated in the budget as specific objecti\fes. ' Emphasis on Ptlbli~/Improvements / '\ -", . The, City is continuing. to plan for and make public' improveQlents in a number. of areas. Major sections of the Comprehensive Plan were updated and items in that plan are bemg implemented. . . '~" I I I The Stormwater Management Utility is a funding mechanism for small drainage improvement projects and for the City's share of major drainage projects. A number of small projects were undertaken in 1996. The fund had retained earnings of $205,348 at the end of 1996, which will be used for stormwater planning and future drainage projects. I The City was the "lead entity" in construction of the Southshore Senior Community Center. This project was undertaken jointly by five cities along the south shore of Lake Minnetonka and is scheduled to be open by June of 1997. I The City continued it's park and trail improvement program in 1996. The City made improvements to several parks during the year. All parks now have new playground equipment with the installation of equipment in Badger Park in 1996. The Badger Park football field was realigned and crowned during the Senior Community Center construction project. A volleyball court was built in Freeman Park. I I The water system expansion program continued in 1996 with the implementation of the second year of a 20 year plan. Three watermain installation projects were undertaken and a new water tower on the Minnewashta Elementary School property was completed. The City of Victoria assisted in the financing of the tower, as it will serve as a backup source of water for their City in the future. I Emphasis on Efficiently, Effectively Meeting Service Needs I As one of fourteen Lake Minnetonka Area municipalities, the City of Shorewood is involved in many contractual arrangements with other jurisdictions and private enterprises, to deliver municipal services to residents of the City. the City of Shorewood is committed to working cooperatively with area governmental jurisdictions to carefully consider optional methods to effectively deliver public services as efficiently as possible. The Shorewood City Administrator again in 1996 served as Chair of the Steering Committee of the Lake Minnetonka Area Cooperative Cities Group. I I FINANCIAL INFORMATION I INTERNAL CONTROLS I Management of the City is responsible for establishing and maintaining an internal control structure in the accounting system designed to ensure that the assets of the City are protected from loss, theft or misuse and to ensure that fair, reliable and accurate accounting data is compiled to allow for the preparation of fmancial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: 1) the cost of a control should not exceed the benefits; 2) the valuation of costs and benefits require estimates and judgments by management. As part of the City's annual audit, the internal control system is evaluated to the extent necessary for audit purposes and changes are recommended when needed. I I BUDGETING CONTROLS I The City maintains budgetary controls to ensure compliance with legal proVISions embodied in the annual appropriated budget approved by the City Council. Activities of the general fund are included in the annual appropriated budget. The legal level of budgetary control is established at the department level, but management control is exercised at the line item level. I As demonstrated by the statements and schedules included in the fmancial section of this report, the City continues to meet its responsibility for sound financial management. I I 111 GENERAL GOVERNMENT FUNCTIONS The following schedule presents a summary of General Fund and Debt Service Fund revenues for the fiscal year ended December 31, 1996 and the amount of increases or decreases in relation to the prior year's revenues. INCREASE REVENUES AND OTHER %OF (DECREASE) FINANCING SOURCES AMOUNT TOTAL FROM 1995 General Property Taxes $ 1,754,166 62.17% $ 233,736 Licenses and Permits 205,459 7.28% 20,602 Intergovernmental 427,468 15.15% (13,587) Charges for Services 45,245 1.60% 24,740 Fines and Forfeitures 80,826 2.87% 12,061 Special Assessments 145,806 5.17% (25,597) Interest on Investments 117,640 4.17% (30,276) Miscellaneous 33,393 1.18% (24,660) Operating Transfers In 11 ,450 0.41% (18,550) TOTAL $ 2,821,453 100.00% $ 178,469 The major increase in revenue for 1996 was in the area of property taxes. This was the first year in the previous four years in which the property tax levy was increased. Although the levy increased, the City's tax rate decreased by 5.64% from 1995. Most of the increased tax revenue was generated by new development. In addition, further development within the Waterford tax increment district increased the amount of tax increments generated during 1996. The increments will be used to retire the revenue bond debt incurred for improvements within the tax increment district. Building permit revenue exceeded the budget for the year with the continued development of the Heritage Addition and the Waterford Court area. Charges for service increased in 1996 primarily due to engineering services which were billed out during the year for project-related expenses. The addition of a full-time traffic control officer in 1995 contributed to an increase in fmes and forfeiture revenue over last year. Intergovernmental revenues decreased in 1996 due to a cutback in HACA aid by the state. Together, general property taxes and intergovernmental revenue account for 77.32% of total revenue. Aside from watermain extensions, which are accounted for in the Water Fund, there have been no new special assessments projects in the last several years; thus, the amount of special assessments collected is decreasing each year. Operating transfers in decreased from the previous year as budgeted transfers from the municipal liquor operation were not made primarily due to operating losses in 1995 and the need for working capital in the liquor fund. Investment income decreased in 1996 due to lower interest rates and, with the prepayment of debt issues, lower available cash balances. The following table presents a summary of General Fund and Debt Service Fund expenditures for the fiscal year ended December 31, 1996 and the amount of increases or decreases in relation to the prior year's expenditures. IV I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I EXPENDITURES AND OTHER USES AMOUNT %OF TOTAL INCREASE (DECREASE) FROM 1995 CURRENT: General Government Public Safety Public Works Parks and Recreation CAPITAL OUTLAY DEBT SERVICE: Principal Interest OPERATING TRANSFERS $ 767,392 20.90% $ 44,294 689,904 18.79% 39,201 472,607 12.87% 39,848 109,249 2.97% (6,197) 15,813 0.43% 15,813 887,000 24.15% 656,000 145,419 3.96% 45,596 585,136 15.93% 180,911 3,672,520 100.00% $ 1,015,466 TOTAL $ Overall expenditures increased significantly from 1995 to 1996 primarily due to debt service and operating transfers out. The cash balance in the debt service fund for Shorewood Oaks bond issue was sufficient to fmance the early retirement of the issue and, subsequently, the remaining outstanding bonds were called in February, 1996. This caused a one year increase in debt service expenditures. Operating transfers increased due to additional efforts in capital improvement fmancing area, and to the closing of the Shorewood Oaks debt service fund. The City Council has continued its plan to accumulate resources for future capital equipment and improvement projects. These amounts were transferred to various capital projects funds and will be applied to future equipment acquisitions and capital improvements. General government expenditures increased in 1996 with the installation of a new telephone and voice messaging system and additional computer purchases. Public safety expenditures increased due to growth, with Shorewood responsible for a larger portion of police and fire contracts, and for a full-time traffic control officer. A federal Cops Fast grant received by the South Lake Minnetonka Public Safety Department in 1995 subsidized 50% of the traffic officer's salary in 1996. This percentage will decrease by 25% per year over the next two years. Public Works expenditures also increased in 1996 due to personnel costs, supplies for street repairs, and snow and ice control during a heavier-than-usual snow season. Park and recreation expenditures were less than in 1996, reflecting lower maintenance and park planning costs. GENERAL FUND BALANCE The General Fund balance as of December 31, 1996 is $1,522,952, a decrease of $21,396 from 1995. This represents a 1.39% reduction in the fund balance. The City Council had a planned reduction of the General Fund balance of $90,000 built into its 1996 budget. Economic conditions during the year caused larger than expected revenues, and employee awareness of budgetary constraints resulted in lower expenditures, which, in turn, resulted in favorable budget variances for both revenue and expenditures Therefore, the reduction of the fund balance was less than planned. The fund balance is designated for working capital requirements through the first six months of the year. It is important for the City to maintain an adequate fund balance as a reserve to meet expenditures in the General Fund until property tax proceeds are received in July. The fund balance now stands at 60.5% of the current year budget. The policy of the City is to maintain a fund balance at 50% of the current budget. As the City Council's intention is to manage the fund balance at this level, a portion of the fund balance has been budgeted in 1997 to lower the property tax levy. This will reduce the fund balance to $1,462,952, or 57.8% of the 1997 budget, which still exceeds acceptable levels. v I I ENTERPRISE OPERATION The City's enterprise fund activities for 1996 are summarized as follows: I OPERATING REVENUES OPERATING EXPENSES OPERATING INCOME (LOSS) I Water Sewer Recycling Stormwater Liquor - Tonka Bay - Store I - Store II $ 272,678 719,448 70,535 44,491 97,788 104,796 139,470 $ 251,134 738,100 70,945 15,033 90,743 163,789 120,344 $ 21,544 (18,652) (410) 29,458 7,045 (58,993) 19,126 I I I Generally accepted accounting principles require the depreciation of contributed assets, which results in net losses in some cases. However, past and present City fmancial practice does not include the recovery of such depreciation in the setting of utility rates, which, in effect, would recover that cost a second time. The City's utility rate setting is done with reference to the working capital of the fund and assumes continued customer contributions through special assessments. I I DEBT ADMINISTRATION I As of December 31, 1996, the City's debt outstanding totaled $4,402,500. Of this total, $815,000 were general obligation special assessment bonds issued to fmance the construction of sanitary sewer, street, water and storm sewer improvements. The City issued $860,000 in general obligation water revenue bonds in 1996 to finance water system extensions and improvements. Total outstanding general obligation water revenue bonds at year end is $2,780,000. The bonds will be repaid from special assessments on affected properties and from Water Fund revenues. A general obligation storm sewer improvement bond issued for storm sewer improvements within a special storm drainage district has $7,500 outstanding at year end. The repayment of these bonds will be provided through an ad valorem tax levied against properties within the storm drainage district. I I Tax increment revenue bonds of $920,000 were issued for construction of public improvements in the Waterford commercial development. These bonds were sold directly to the developer. As the developer has direct control over the pace of development, retirement of the debt was to be made on a "pay-as-you-go" basis from tax increments generated by the development. Because these revenue bonds are not backed by the full faith and credit of the City, in the absence of tax increments from Tax Increment Financing District No.1, the City has no obligation to repay the bonds. The first year tax increments were received was 1994, when $264 in increments was collected. The City retired $120,000 of this issue in 1996, leaving an outstanding balance at year end of $800,00. The District will expire in April, 2000. I I I The City's bond rating as rated by Moody's Investor Service is "AI" on general obligation bond issues. Reasons cited by Moody's for this rating include the development and implementation of a five-year capital improvement plan, low outstanding debt, sound fmancial management, and anticipated maintenance of low debt ratios by the City. I CASH MANAGEMENT I The City of Shorewood subscribes to the "pooled cash" concept of investing which means that all funds with cash balances participate in an investment pool. This permits some funds to be overdrawn and other funds to show I Vi I I I positive cash balances, with the City overall maintaining a positive cash balance. This pooled cash concept provides for investing of greater amounts of money at more favorable rates. Interest earnings are then allocated to the participating funds. During 1996, the City of Shore wood earned $368,378 in interest revenue. I RISK MANAGEMENT I The City of Shorewood's worker's compensation insurance and its general property and liability coverage are provided through the League of Minnesota Cities Insurance Trust (LMCIT). The LMCIT worker's compensation program is a joint self-insurance plan designed to lower and stabilize cities worker's compensation costs and to assure that cities have a source of coverage available. I I I Each participating city deposits with the LMCIT its worker's compensation deposit premium for the policy year. The deposit premium is calculated using standard manual rates with the applicable volume discounts and experience modifIcation factor. From these deposits, LMCIT purchases reinsurance to protect the program from catastrophic and abnormal payment claims. The balance of the deposits and reserves are invested, with the earnings accruing to the benefIt of all participants. LMCIT's reserves and rates are reviewed annually by an actuary to help assure that the program remains fmancially strong. I OTlIER INFORMATION INDEPENDENT AUDIT I Minnesota State Statutes require an annual audit of the City's accounts by the Minnesota State Auditor or by independent certifIed public accountants. The auditor's report on the general purpose fmancial statements and schedules is included in the fmancial section of this report. I CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING I The Government Finance Officers Association of the United States and Canada (GFOA) awarded a CertifIcate of Achievement for Excellence in Financial Reporting to the City of Shorewood for its comprehensive annual financial report for the fIscal year ended December 31, 1995. I In order to be awarded the CertifIcate of Achievement, a governmental unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. I A CertifIcate of Achievement is valid for a period of one year only. We believe our current report continues to conform to the CertifIcate of Achievement program requirements, and we are submitting it to GFOA to determine its eligibility for another certifIcate. I ACKNOWLEDGMENTS I We would like to acknowledge the efforts of the city staff, especially the Finance Department staff, and the City's independent auditor, without whose assistance and cooperation the timely preparation of the Comprehensive Annual Financial Report would not have been possible. I Respectfully Submitted, I James C. Hurm City Administrator Alan J. Rolek Finance Directorffreasurer I I Vll I I I I I I I I I I I I I I I I I I I Certificate of Achievement for Excellence in Financial Reporting Presented to City of Shorewood, Minnesota For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 1995 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. I2IL !it-' Jlfh/~ Executive Director I I AI?IX) I I CERTIFIED PUBLIC ACCOUNTANTS AND CoNSULTANTS I INDEPENDENT AUDITOR'S REPORT I Honorable Mayor and City Council City of Shorewood, Minnesota I We have audited the accompanying general purpose fmancial statements of the City of Shore wood, Minnesota, as of and for the year ended December 31, 1996 as listed in the table of contents. These general purpose fmancial statements are the responsibility of the City of Shorewood, Minnesota's management. Our responsibility is to express an opinion on these general purpose fmancial statements based on our audit. I We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose fmancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose fmancial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose fmancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. I I I In our opinion, the general purpose fmancial statements referred to above present fairly, in all material respects, the fmancial position of the City of Shorewood, Minnesota at December 31, 1996 and the results of its operations and cash flows of the Proprietary Fund Type for the year then ended, in conformity with generally accepted accounting principles. I In accordance with Government Auditing Standards we have also issued a report dated March 13, 1997 on our consideration of the City's internal control structure and a report dated March 13, 1997 on its compliance with laws and regulations. I Our audit was conducted for the purpose of forming an opinion on the general purpose fmancial statements taken as a whole. The combining and individual fund financial statements listed in the table of contents are presented for the purpose of additional analysis and are not a required part of the general purpose fmancial statements of the City of Shorewood, Minnesota. Such information has been subjected to the auditing procedures applied in the audit of the general purpose fmancial statements and, in our opinion, is fairly stated in all material respects in relation to the general purpose fmancial statements taken as a whole. I I March 13, 1997 Minneapolis, Minnesota ~~1~ ( ABDO, ABDO & EICK Certified Public Accountants I I I Member of American Institute of Certified Public Accountants Private Companies Practice Section I U5 EAST HICKORY STREET, SUITE 302 P.O. BOX 3166 MANKA TO, MINNESOTA 56002.3166 (507) 625.2n7 FAX (507) 388-9139 204 EAST PEARL STREET P.O. BOX 345 OWATONNA, MINNESOTA 55060.0345 (507) 451-9136 FAX (507) 451-0794 1060 NOlITHLAND PLAZA 3800 WEST 80TH STREET MINNEAPOLIS, MINNESOTA 55431 (612) 835.9090 FAX (612) 896.3620 I I I I. I I I I I /1 I I I I I I I I I CI1\YOF SHOREW()OJ),MINNESOTA \1 GENERAL PURPOSF.;FIrl(A.NCIAL STATEMENTS ~ "\ i i.' / ,'.\ The general/purpose financial statemeI).tS and notes to the. (mallcial>state~nts .are .intended to provide an 6verview 8Qd broad perspective lof the City's financial position an~operations. ~.. statements present a summary set ofinfotn;lation needed to control and analyze current operations :' t() determine ~p1iance with legal and ~udgetary limitations and to ~sist intin.ancial planning. " The f~llowing general purpose flnancialstatements. are pre~nted: Combined Balance Sheet 0;.. All Fund Types and Account .<Jroups Combined Statement of Revenu~, ~xpenditures and Changes in Fun~ Balance - All Governmental Fund Types1'; Statement ofRevent1e, ExpendimresandChanges in fund Balance -Budget and Actual - General Fund. '. ". . '. .. """: .i"--..' . \ Combined! Statem~nt of Revenue, Expenses andCh~ges in Retained Eanlings - All ~roprietary Fund'fYpes / /. /. , Combined Statement of Cash Flows/- All Proprietary Fund Types 25 150 8160 13 985 I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUPS DECEMBER 31, 1996 ASSETS AND OTHER DEBITS ASSETS Cash and temporary investments Investments for deferred compensation Accrued interest receivable Delinquent taxes receivable Accounts receivable Special assessments receivable Note receivable Due from other funds Inventories, at cost Prepaid items Fixed assets, net Bond discount, net OTHER DEBITS Amounts available in debt service funds Amounts to be provided for debt retirement Governmental Fund Types Debt Capital General Service Projects $1 571 287 $492891 $2 026 275 27 898 6517 32 736 44 726 3655 20339 8887 1675 398 674 8161 13 985 TOTAL ASSETS AND OTHER DEBITS LIABILITIES, EQUITY (DEFICIT) AND OTHER CREDITS LIABILITIES Accounts and contracts payable Salaries and compensated absences payable Refundable deposits payable Deferred revenue Due to other funds Lease purchase payable General obligation bonds payable Tax increment bonds payable General Obligation revenue bonds payable Deferred compensation benefits payable $1665925 $901 737 $2090044 $ 58 596 $ 22319 31 038 31 020 398 102 $ 97 204 TOTAL LIABILITIES 142973 398 102 144 499 EQUITY (DEFICIT) AND OTHER CREDITS Investment in general fixed assets Contributed capital Retained earnings Unreserved Fund balance (deficit) Reserved Unreserved Designated Undesignated TOTAL EQUITY (DEFICIT) AND OTHER CREDITS TOTAL LIABILITIES, EQUITY (DEFICIT) AND OTHER CREDITS 503635 1 522 952 1 971 530 05 985) 1 522 952 503 635 1 945 545 $1 665925 $901 737 $2 090 044 See Notes to Financial Statements. -2- I I Exhibit 1 Proprietary Fiduciary Totals Fund Type Fund Type Account Groups (Memorandum Only) I General General Long-term Enter:prise Agency Fixed Assets Debt 1996 1995 I $ 2 393 135 $ $ $ $ 6 483 588 $ 7221436 230 140 230 140 187409 36219 103 370 203 018 I 470 48 851 47498 246 279 275 505 262 523 942 368 I 350 878 1312298 I 232 500 232 500 13 985 119 928 281 738 281 738 257447 17090 17090 17737 I 8734933 4 284 453 13 019386 10 777 478 21 489 21 489 11 799 503 635 503 635 1419732 I 1 459 209 I 459 209 1 111 631 $12 906 221 $ 230 140 $ 4 284 453 $1 962844 $24 041 364 $22 949 934 I $ 207 929 $ $ $ $ 363 729 $ 358 553 I 7512 29 344 59 175 41 112 56 188 68 710 437 282 545 595 13 985 119 928 I 311 000 311 000 822 500 822500 1 589 500 800 000 800 000 920 000 2 780 000 2 780 000 1 935 000 I 230 140 230 140 187409 2 995 441 230 140 1 962 844 5 873 999 5 765 807 I 4 284 453 4 284 453 4 124018 8817958 8817958 8 033 534 I 1 092 822 1 092 822 685 658 503 635 1419732 I 3 494 482 3035781 (25 985) (114 596) I 9910780 4 284 453 18 167365 17184 127 I $12906221 $ 230 140 $ 4 284 453 $1962844 $24041 364 $22 949 934 I I -3- CITY OF SHOREWOOD, MINNESOTA COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE ALL GOVERNMENTAL FUND TYPES YEAR ENDED DECEMBER 31, 1996 REVENUE General property taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Special assessments Interest on investments Miscellaneous TOTAL REVENUE EXPENDITURES Current General government Public safety Public works Culture and recreation Capital outlay Debt service Principal Interest and service charges 752095 TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Operating transfers in Lease purchase proceeds Operating transfers out 752 095 (156989) 568 270 311 000 039999) 639 271 TOTAL OTHER FINANCING SOURCES (USES) EXCESS (DEFICIENCY) OF REVENUE AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES (21 396) (829 671 ) 482 282 1 544 348 1419732 1 376 837 114342 (86426) (27916) $1 522952 $ 503 635 $ 1 945 545 FUND BALANCE, JANUARY 1 FUND EQUITY TRANSFER IN FUND EQUITY TRANSFER OUT FUND BALANCE, DECEMBER 31 See Notes to Financial Statements. -4- I I I I I I I I I I I I I I I I I I I I I Exhibit 2 Totals I (Memorandum Only) 1996 1995 $ 1 754 166 $ 1 520 430 I 205 459 184857 522 088 525 468 45 245 20 505 I 80 826 68765 147210 177 920 227 982 225424 422 133 82 559 I 3405 109 2 805 928 I 767 392 719 092 689 904 647 633 472 607 432 759 I 109249 114 286 767 908 382 770 I 887 000 231 000 145419 99 823 3 839 479 2 627 363 I (434 370) 178 565 I 579 720 587 225 311 000 (825 135) (567 225) I 65 585 20 000 I (368 785) 198 565 4340917 4 142352 I 114342 6449 (114 342) (6449) I $ 3 972 132 $ 4 340 917 I I I I -5- CITY OF SHOREWOOD, MINNESOTA STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERAL FUND YEAR ENDED DECEMBER 31, 1996 Exhibit 3 REVENUE General property taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Special assessment Interest on investments Miscellaneous revenue Variance- Favorable Budget Actual (Unfavorable) $ 1 573 930 $1 569653 $ (4277) 170 300 205 459 35 159 427 468 427 468 48 500 45 245 (3255) 80 000 80 826 826 75 000 95 711 20 711 21 500 33 393 11 893 2 396 698 2457 755 61 057 TOTAL REVENUE EXPENDITURES Current General government Public safety Public works Culture and recreation Capital outlay 761422 767 392 (5970) 694 268 689 904 4364 453 226 472 607 (19381 ) 130821 109 249 21 572 52775 15813 36 962 2092512 2 054 965 37 547 304 186 402 790 98 604 30 000 (30 000) (424 186) (424 186) (394 186) (424 186) (30000) TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Operating transfers in Operating transfers out TOTAL OTHER FINANCING SOURCES (USES) EXCESS (DEFICIENCY) OF REVENUE AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES FUND BALANCE, JANUARY 1 FUND BALANCE, DECEMBER 31 $ (90000) (21 396) 1 544 348 $ 1 522 952 $ (68604) See Notes to Financial Statements. -6- I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Exhibit 4 COMBINED STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS ALL PROPRIETARY FUND TYPES YEAR ENDED DECEMBER 31, 1996 OPERATING REVENUE Sales Less cost of sales Entelllrise GROSS PROFIT $ I 705 355 (1 364 953 ) 340 402 Charges for services Permits and connection fees 1 073 136 34016 GROSS PROFIT AND REVENUE OPERATING EXPENSES Personal services Supplies Repairs and maintenance Depreciation Professional services Contracted services Communication Insurance Water purchases Utilities MCES disposal charges Rent Advertising Other 1 447 554 196 806 15471 15223 281 179 9863 166 129 1257 21 807 10492 76418 488 439 113 514 9159 44 331 1 450 088 TOTAL OPERATING EXPENSES OPERATING LOSS (2 534 ) NONOPERATING REVENUE (EXPENSES) General property taxes Special assessments Interest on investments Other income Interest expense 16304 59919 140396 22 137 (74473 ) TOTAL NONOPERATING REVENUE (EXPENSES) NET INCOME BEFORE OPERATING TRANSFERS OPERATING TRANSFERS FROM OTHER FUNDS OPERATING TRANSFERS TO OTHER FUNDS NET INCOME 164 283 161 749 320 150 (74 735) 407 164 RETAINED EARNINGS, JANUARY 1 RETAINED EARNINGS, DECEMBER 31 685 658 $ 1 092 822 See Notes to Financial Statements. -7- CITY OF SHOREWOOD, MINNESOTA COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES YEAR ENDED DECEMBER 31, 1996 Exhibit 5 CASH FLOWS FROM OPERATING ACTIVITIES Operating loss Other income related to operations Adjustments to reconcile operating loss to net cash provided by operating activities: Depreciation and amortization (Increase) decrease in assets - Accrued interest receivable Delinquent taxes receivable Accounts receivable Special assessments Due for other funds Inventory Prepaid items Increase ( decrease) in liabilities - Accounts payable Salaries and compensated absences payable Deferred revenue Due to other funds Entelllrise $ (2 534 ) 22 137 282 196 18 888 32 (11441) (145756) 34 411 (24291 ) 647 (34913 ) 3420 (7 593) (34411 ) 100792 320 150 (74 735) 245415 849 293 (15000) (74473 ) (1 805 726) 16304 54 917 (974 685) 140396 (488082) 2881217 $ 2 393 135 CASH PROVIDED BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Operating transfers to other funds Operating transfers from other funds CASH PROVIDED BY NONCAPITAL FINANCING ACTIVmES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Issuance of bonds, net of discount Bond principal paid Interest paid on revenue bonds Acquisition of fIxed assets Property taxes levied for debt service Special assessments paid CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, JANUARY 1 CASH AND CASH EQUIVALENTS, DECEMBER 31 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Property and equipment acquired from other funds $ 556 923 $ 232 500 Additions to contributed capital from note proceeds See Notes to Financial Statements. -8- I I I I I I I I I I I I I I I I I I I I I Note 1: I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The City of Shorewood is a statutory city operating in accordance with the Plan A form of government. As required by generally accepted accounting principles, the fInancial statements of the reporting entity include those of the City of Shorewood (the primary government) and its component units. The City of Shorewood does not have any component units requiring either a blended or discrete presentation. B. Measurement Focus, Basis of Accounting and Basis of Presentation The accounts of the City are organized and operated on the basis of funds and account groups. A fund is an independent fIscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with fInance-related legal and contractual provisions. The minimum number of funds are maintained consistent with legal and managerial requirements. Account groups are a reporting device to account for certain assets and liabilities of the governmental funds not recorded directly in those funds. The City has the following fund types and account groups: Governmentalfunds are used to account for the City's general government activities. Governmental fund types use the flow of current fInancial resources measurement focus and the modifIed accrual basis of accounting. Under the modifIed accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they are "measurable and available"). "Measurable" means the amount of the transaction can be determined, and "available" means collectible within the current period or soon enough thereafter to pay liabilities of the current period. The City considers all revenues available if they are collected within 60 days after year end. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long-term debt which is recognized when due, and certain compensated absences and claims and judgments which are recognized when the obligations are expected to be liquidated with expendable available fmancial resources. Property taxes, franchise taxes, licenses, interest and special assessments are susceptible to accrual. Other receipts and taxes become measurable and available when cash is received by the government and are recognized as revenue at that time. The preparation of general purpose fInancial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. Governmental funds include the following fund types: The genera/fund is the City's primary operating fund. It accounts for all fmancial resources of the City, except those required to be accounted for in another fund. The debt service funds account for the servicing of general long-term debt not being fmanced by proprietary funds. The capital projects funds account for the acquisition of fIxed assets or construction of major capital projects not being fmanced by proprietary funds. Proprietary funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. The City applies all applicable F ASB pronouncements in accounting and reporting for its proprietary operations. Proprietary funds include the following fund type: -9- CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Enterprise funds are used to account for those operations that are fmanced and operated in a manner similar to private business or where the Council has decided that the determination of revenues earned, costs incurred and/or net income is necessary for management accountability. Fiduciary funds account for assets held by the government in a trustee capacity or as an agent on behalf of others. Agency Funds are established to account for cash or other assets held by the city as trustee or agent for individuals, private organizations, other governments and/or other funds. The fund is custodial in nature (assets equal liabilities) and does not involve measurement of results of operations. Account Groups. The general fixed assets account group is used to account for fixed assets not accounted for in proprietary funds. The general long-term debt account group is used to account for general long-term debt and certain other liabilities that are not specific liabilities of proprietary funds. C. Assets, Liabilities and Equity Deposits and Investments The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. State statutes authorize the City to invest in obligations of the U.S. Treasury, commercial paper, corporate bonds, repurchase agreements and shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are obligations guaranteed by the United States or its agencies. Investments are stated at lower of cost or amortized cost, or market value, except for investments in the deferred compensation agency fund which are reported at market value. Earnings on investments are allocated to the individual funds based upon the average of month-end cash and investment balances. Property Taxes The City Council annually adopts a tax levy and certifies it to the County for collection. The County is responsible for collecting all property taxes for the City. These taxes attach an enforceable lien on taxable property within the City on January 1 and are payable by the property owners in two installments. The taxes are collected by the County Treasurer and tax settlements are made to the City during January, June, and November each year. Taxes payable on homestead property, as defmed by State statutes, are partially reduced by a homestead and agricultural credit aid. The credit is paid to the City by the State of Minnesota in lieu of taxes levied against homestead property. The State remits this credit in two equal installments in July and December each year. Delinquent taxes receivable include the past six years' uncollected taxes. Delinquent taxes have been offset by a deferred revenue liability for delinquent taxes not received within 60 days after year end. Special Assessments Special assessments represent the 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 special assessments receivable are offset by a deferred revenue liability. Receivables and Payables Transactions between funds that are representative of lendinglborrowing arrangements outstanding at the end of the fiscal year are referred to as either "interfund receivables/payables" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." -10- I I I I I I I I I I I I I I I I I I I I I Note 1: I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Advances between funds are offset by a fund balance reserve account in applicable governmental funds to indicate they are not available for appropriation and are not expendable available fmancial resources. Inventories and Prepaid ItemslDeferred Charges The inventories are stated at average cost, which approximates market using the fIrst-in, frrst-out (FIFO) method. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items or deferred charges. Fixed Assets Fixed assets used in governmental fund types of the City are recorded in the general fIxed assets account group at cost or estimated historical cost if purchased or constructed. Donated fIxed assets are recorded at their estimated fair value at the date of donation. Assets in the general fIxed assets account group are not depreciated. Interest incurred during construction is not capitalized on general fixed assets. Public domain (infrastructure) general fixed assets (e.g., roads, bridges, sidewalks and other assets that are immovable and of value only to the City) are not capitalized. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives are not included in the general fixed assets group or capitalized in the proprietary funds. Property, plant and equipment in the proprietary funds of the City are recorded at cost. Property, plant and equipment donated to these proprietary fund type operations are recorded at their estimated fair value at the date of donation. Major outlays for capital assets and improvements are capitalized in proprietary funds as projects are constructed. Interest incurred during the construction phase of proprietary fund fixed assets is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Property, plant and equipment are depreciated in the proprietary funds of the City using the straight line method over the following estimated useful lives: Assets ~ Furniture and equipment Collection and distribution system 5 - 10 40 Compensated Absences Vested accumulated vacation or sick leave that is expected to be liquidated with expendable available fmancial resources is reported as an expenditures and a fund liability of the governmental fund that will pay it. Amounts of vested or accumulated vacation leave that are not expected to be liquidated with expendable available fmancial resources are reported in the general long-term debt account group. No expenditure is reported for these amounts. Vested or accumulated vacation leave of proprietary fund types is recorded as an expense and liability of those funds as the benefits accrue to employees. No liability is recorded for nonvesting accumulating rights to receive sick pay benefIts. Long-term Obligations The City reports long-term debt of governmental funds at face value in the general long-term debt account group. Certain other governmental fund obligations not expected to be fmanced with current available fmancial resources are also reported in the general long-term debt account group. Long-term debt and other obligations fmanced by proprietary funds are funds are reported as liabilities in the appropriate funds. -11- CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED For governmental fund types, bond premiums and discounts, as well as issuance costs, are recognized during the current period. Bond proceeds are reported as an other fmancing source net of the applicable premium or discount. Issuance costs, other than those withheld from the actual net proceeds received, are reported as debt service expenditures. For proprietary fund types, bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight line method. Issuance costs are reported as deferred charges. Fund Equity Reservations of fund balance represent amounts that are not appropriable or are legally segregated for a specific purpose. Reservations of retained earnings are limited to outside third-party restrictions. Designations of fund balance represent tentative management plans that are subject to change. The proprietary fund's contributed capital represents equity acquired through capital grants and capital contributions from developers, customers or other funds. Memorandum Only - Total Columns Total columns on the general purpose fmancial statements are captioned as "memorandum only" because they do not represent consolidated fmancial information and are presented only to facilitate fmancial analysis. The columns do not present information that reflects fmancial position, results of operations or cash flows in accordance with generally accepted accounting principles. Interfund eliminations have not been made in the aggregation of this data. Comparative DataIReclassifications Comparative total data for the prior year have been presented in the selected sections of the accompanying fmancial statements in order to provide an understanding of changes in the City's financial position and operations. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year's presentation. Note 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information Annual budgets are adopted on a basis consistent with generally accepted accounting principles for the all governmental funds, debt service and the capital projects funds, which adopt project length budgets. All annual appropriations lapse at fIScal year end. In August of each year, all departments of the City submit requests for appropriations to the City Administrator so that a budget may be prepared. Before September 15, the proposed budget is presented to the City's council for review. The council holds public hearings and a fmal budget is prepared and adopted in early December. The appropriated budget is prepared by fund, function and department. The City's department heads, with the approval of the City Administrator, may make transfers of appropriations within a department. Transfers of appropriations between departments require the approval of the City Council. The legal level of budgetary control is the department level. Budgeted amounts are as originally adopted, or as amended by the City Council. B. Compliance and Accountability Fund Deficits The following fund has a deficit fund balance as of December 31, 1996: Capital Projects Funds Shady Island Bridge Reconstruction The deficit in this fund will be eliminated by future revenue sources. $ 25 985 -12- I I I I I I I I I I I I I I I I I I I I I Note 3: I I I I I I I I I I I I I I I I I -13- CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS A. Deposits and Investments Cash balances of the City's funds are combined (pooled) and invested to the extent available in various investments authorized by Minnesota State Statutes. Each fund's portion of this pool (or pools) is displayed on the fmancial statements as "cash and temporary investments." For purposes of identifying the risk of investing public funds, the balances are categorized as follows: Deposits In accordance with Minnesota Statutes and as authorized by the City Council, the City maintains deposits at those depository banks, all of which are members of the Federal Reserve System. Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds (140% in the case of mortgage notes pledged). Authorized collateral includes the legal investments described below, as well as certain first mortgage notes, and certain other State or local government obligations. Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City or in a fmancial institution other than that furnishing the collateral. At year end, the City's carrying amount of deposits was $1,100,059 and the bank balance was $1,145,541. Of the bank balance, all was covered by federal depository insurance or by collateral held by the City's agent in the City's name. 2. Uninsured and unregistered, with securities held by the counterparty's trust department or agent in the City's name. 3. Uninsured and unregistered, with securities held by the counterparty, or by its trust department or agent but not in the City's name. Investments Investments are categorized into these three categories of credit risk: 1. Insured or registered, or securities held by the City.or its agent in the City's name. At year end, the City's investment balances were as follows: Category 2 3 Carrying Amount $ $ 2 263 249 3011 904 5275 153 U.S. Government Securities Commercial Paper $ 2 263 249 $ 3011 904 $ 5 275 153 $ $ Total Investments not subjected to categorization: 4M Money Market Fund Deferred compensation investments 106476 230 140 $ 5611 769 Total investments Cash on Hand Cash in the possession of the City, consisting of petty cash totals $1,900. Market V alue $2248 466 3 060 846 5309312 106476 230 140 $5 645 928 Note 3: CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS Cash and Investments Summary A reconciliation of cash and investments as shown on the Combined Balance Sheet for the City follows: Cash on hand Carrying amount of deposits Carrying amount of investments $ 1900 1 100 059 5611 769 $ 6713 728 Total ClassifIed on the combined balance sheet as: Cash and temporary investments Investments for deferred compensation $ 6 483 588 230 140 $ 6 713 728 Total B. Notes Receivable On May 28, 1996, the City entered into a service agreement with the City of Victoria to provide water. The total amount of the water availability fee was $232,500 and will be fmanced in fIve equal principal installments of$46,500 through July 1,2000. Two payments will be made in 1997 because the service was not completely in place at the end of 1996. Interest of 5.75% will be paid on the outstanding balance. The outstanding balance at December 31, 1996 was $232,500. C. Fixed Assets A summary of changes in general fIxed assets for the year ended December 31, 1996 is as follows: Balance Beginning Balance of Year Additions Deletions End of Year Land $ 456 826 $ $ $ 456 826 Buildings and structures 1 322 073 1 322 073 Improvements other than buildings I 268 345 45913 1314258 Furniture and equipment I 076 774 213 382 98 860 1 191296 Total $4 124018 $ 259 295 $ 98 860 $4 284 453 The following is a summary of proprietary fund type fIxed assets at December 31, 1996: Enteq>rise Funds Stormwater Mgmt Water Sewer Recycling Utility Liq.uor Total Furniture and equipment $ 24 178 $ 37827 $ $ $ 100260 $ 162 265 Collection and distribution system 3 151 862 7 522 466 10674328 Construction work in progress 2887177 2887 177 Total 6063217 7 560 293 100 260 13 723 770 Less accumulated depreciation (834 877) (4 123750) (30210) (4 988 837) Net Fixed Assets $5 228 340 $3 436 543 $ $ $ 70 050 $ 8 734 933 -14- I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I Note 3: CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS - CONTINUED D. Deferred Revenue Deferred revenue at December 31, 1996 is comprised of the following: Debt Capital General Service Proiect Total Delinquent taxes $ 29 345 $ 163 $ $ 29 508 Special assessments Delinquent 1620 9827 484 11 931 Deferred 55 388 112 7676 395 843 Total $ 31 020 $ 398 102 $ 8160 $ 437 282 E. Long-term Debt General Obligation Bonds. The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for general government activities. General obligation bonds are direct obligations and pledge the full faith and credit of the city. General obligation bonds currently outstanding are as follows: General Long-term Debt General Obligation Special Assessment Bonds The following bonds were issued to fmance various improvements and will be repaid primarily from special assessments levied on the properties benefiting from the improvements. Some issues, however, are partly fmanced by ad valorem tax levies. All special assessment debt is backed by the full faith and credit of the City. Each year the combined assessment and tax levy equals 105% of the amount required for debt service. The excess of 5% is to cover any delinquencies in tax or assessment payments. Authorized and Issued Balance at Interest Rate Issue Date Maturity Date Year End G.O. Improvement Bonds of 1991 $ 960 000 5.20-5.85% 11-01-91 G.O. Improvement Bonds of 1991 31000 8.00 9-01-91 G.O. Improvement Bonds of 1993 325 000 3.75-4.80 12-01-93 2-01-02 $ 570 000 7500 2-01-97 2-01-04 245000 $ 822 500 Total General Obligation Improvement Bonds General Obligation Tax Increment Revenue Bonds The following bonds were issued for redevelopment projects. The additional tax increments resulting from increased tax capacity of the redeveloped properties will be used to retire the related debt. They are not backed by the full faith and credit of the City. G.O. Tax Increment Bonds of 1987 $ 800 000 2-01-00 5-01-91 $ 920 000 9.00% -15- Note 3: CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS - CONTINUED Other General Long-Term Debt Lease Purchase Payable During 19Q6, the City entered into a lease, with option to purchase, agreement as lessee for fmancing the South Shore Senior Center project. Title remains with the City so long as they are not in default of terms in the lease agreement. The lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of the future minimum lease payments as of the date of its inception. Authorized and Issued Balance at Interest Rate Issue Date Maturity Date Year End $ 311 000 5-30-96 8-01-08 $ 311000 6.22% Sick leave/severance payable This liability represents vested benefits earned by employees through the end of the year, which will be paid at retirement in future periods. Total Sick leave/severance payable $ 29344 Enterprise Fund Debt General Obligation Revenue Bonds G.O. Water Revenue Bonds of 1995 G.O. Water Revenue Bonds of 1996 $ 1 920 000 2-01-11 $1920000 3.90-5.50% 11-01-95 2-01-12 860 000 $2 780 000 860 000 4.00-5.400.10 11-01-96 Total General Obligation Revenue Bonds Changes in General Long-term Liabilities. During the year ended December 31, 1996, the following changes occurred in liabilities reported in the general long-term debt account group. Balance Balance January 1, December 31, 1996 Additions Reductions 1996 G.O. Improvement Bonds $1 589500 $ $ 767 000 $ 822 500 Tax Increment Bonds 920 000 120000 800 000 Lease purchase payable 311 000 311 000 Sick leave/severance payable 21 863 7481 29 344 Total $2 531363 $ 318 481 $ 887 000 $ I 962 844 The annual service requirements to maturity for all bonds and notes outstanding at December 31, 1996 are as follows: -16- I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I Note 3: CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS - CONTINUED EnterPrise General Long-term Debt Account GroQp Funds Tax G.O. Special Increment Lease G.O. Year Ending Assessment Revenue Purchase Revenue December 31. Bonds Bonds Payable Bonds Total 1997 $ 181 634 $ 336 869 $ 37544 $ 244 191 $ 800 238 1998 167 250 367 859 37544 318383 891 036 1999 160443 401 710 37 544 295 934 895 631 2000 148588 429 028 37 544 298 020 913 180 2001 136 776 37 544 284 739 459 059 Thereafter 162 049 262 807 2 425 350 2 850 206 Total 956 740 1 535 466 450 527 3866617 6 809 350 Less interest (134240) (735 466) (139 527) (l 086617) 0095850) Principal $ 822 500 $ 800 000 $ 311 000 $ 2 780 000 $4713 500 Amounts Available for Long-term Debt. Available fund balance in the debt service funds for repayment of long-term debt totaled $503,635 at year end. Amounts to be Providedfor Long-term Debt. This represents future revenue to be generated for debt payments and sick leave/severance benefits payable, generally including interest earnings, tax increments, scheduled tax levies and deferred (future) special assessment levies. F. Fund Equity Reservations and Designations The components of fund equity are described in Note 1. Certain reserves and designations have been made in the following funds: Reserved Governmental Funds Debt Service Funds 1993 Improvement and Refunding Waterford III Tax Increment Shady Hills Storm Sewer 1991 Improvement and Refunding Total Reserved PUI:Pose Amount Debt service on bonds issued Debt service on bonds issued Debt service on bonds issued Debt service on bonds issued $ 170512 7507 7819 317 797 $ 503635 Unreserved - Designated Governmental Funds General Capital Projects Capital Improvements Park Capital Improvements Equipment Replacement Street Reconstruction MSA Construction Trail Capital Improvements 1995 Freeman Park Imp. Senior Community Center Cathcart Park Improvements Working capital $ 1 522 952 Capital Improvements Park Improvements Equipment Streets MSA Construction Trail Improvements Freeman Park Senior Center Cathcart Park 138410 110 864 76 387 969 668 175812 95 873 24 866 376 043 3607 $ 3 494 482 Total Unreserved - Designated -17- CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 Note 3: DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS - CONTINUED G. Contributed Capital The changes in the government's contributed capital accounts for its proprietary funds were as follows: Sources Entewrise Water Sewer Total Beginning balance, Contributed capital Contributing sources: Developer and customer Water note proceeds $3716216 478610 232 500 $4317318 73 314 $8 033 534 551 924 232 500 Ending balance, Contributed capital $4 390 632 $8817958 $4 427 326 Note 4: DEFINED BENEFIT PENSION PLANS - STATEWIDE A. Plan Description All full-time and certain part-time employees of the City of Shorewood are covered by defmed benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (pERF) which is a cost-sharing, multiple-employer retirement plan. This plan is established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by State Statute and vest after three years of credited service. The defmed retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age and years of credit at termination of service. Two methods are used to compute benefits for PERF's Coordinated and Basic Plan members. The retiring member receives the higher of the step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.0 percent of average salary for each of the fIrst 10 years of service and 2.5 percent for each remainmg year. For a Coordinated Plan member, the annuity accrual rate is 1.0 percent of average salary for each of the frrst 10 years and 1.5 percent for each remaining year. Using Method 2, the annuity accrual rate is 2.5 percent of average salary for Basic Plan members and 1.5 percent for Coordinated Plan members. For PERF members whose annuity is calculated using Method 1, a full annuity is available when age plus years of service equal 90. A reduced retirement annuity is also available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A normal annuity is a lifetime annuity that ceases upon the death of the retiree -- no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will reduce the monthly normal annuity amount, because the annuity is payable over joint lives. Members may also leave their contributions in the fund upon termination of public service in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last terminated their public service. -18- I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 Note 4: DEFINED BENEFIT PENSION PLANS - STATEWIDE - CONTINUED PERA issues a publicly available fmancial report that includes fmancial statements and required supplementary information for PERF. That report may be obtained by writing to PERA, 514 St. Peter Street, #200, St. Paul, Minnesota 55102 or by calling (612) 296-7460 or 1-800-652-9026. B. Funding Policy Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. PERF Basic Plan members and Coordinated Plan members are required to contribute 8.23% and 4.23%, respectively, of their annual covered salary. The City is required to contribute the following percentages of annual covered payroll: 10.73% for Basic Plan PERF Members and 4.48% for Coordinated Plan PERF members. The City's contributions for the years ending December 31, 1996, and 1995 were $30,416 and $29,103, respectively, equal to the contractually required contributions for each year as set by state statute. Note 5: JOINT VENTURES A. South Lake Minnetonka Public Safety Department The City of Shorewood participates in a joint powers agreement with the cities of Excelsior, Greenwood and Tonka Bay which establishes the South Lake Minnetonka Public Safety Department for the purpose of providing police protection within the four communities. The agreement creates a coordinating committee, comprised of the mayors of each participating community, as the governing body, which meets quarterly. Each year, the Coordinating committee adopts an operating budget, which is approved by all participating cities. The cost of the budget is divided between the participating cities based upon a five-year average demand for service in each city. The percentage contributed in 1996 by the City of Shorewood is 44.8%. Any budget shortfall is made up frrst from department reserves, with any excess shortfall assessed to each participating community according to the formula. The current agreement continues through December 31, 1997. South Lake Minnetonka Public Safety Department has accounts payable, accrued payroll, compensated absences and deferred revenue in the General Fund of$164,389, and deferred compensation benefits payable in the Agency Fund of $205,318 at year end. There is no other current or long-term debt outstanding as of December 31, 1996. The following is a summary of the Department's balance sheet as of December 31,1996 and the statement of revenue, expenditures and changes in fund balance for the General Fund for the year ended December 31, 1996. SOUTH LAKE MINNETONKA PUBLIC SAFETY DEPARTMENT BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS DECEMBER 31, 1996 General Totals General Agency Fixed (Memorandum Only) Fund Fund Assets 1996 1995 Total assets $316614 $ 205 318 $332 961 $ 854 893 $ 763 622 Liabilities $ 164389 $ 205 318 $ $ 369 707 $ 309275 Fund equity 152225 332961 485 186 454 347 Total liabilities and fund equity $316614 $ 205318 $332 961 $ 854 893 $ 763 622 -19- CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 Note 5: JOINT VENTURES - CONTINUED SOUTH LAKE MINNETONKA PUBLIC SAFETY DEPARTMENT SUMMARY STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE - GENERAL FUND - BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 1996 (With comparative actual amounts for the year ended December 31, 1995) 1996 1995 Variance - Favorable Budl:et Actual (Unfavorable) Actual Total revenue $ 1 155 440 $ 1 189 252 $ 33 812 $ 1 149971 Total expenditures 1 170440 1 177 094 (6654 ) 1 119473 Excess of revenue over (under) expenditures $ (I5000) 12 158 $ 27 158 30 498 Fund balance, January 1 140067 109569 Fund balance, December 31 $ 152 225 $ 140067 B. South Lake Minnetonka Community Center The City participates in a joint venture with the cities of Excelsior, Deephaven, Greenwood and Tonka Bay which establishes the Southshore Senior Community Center to provide senior citizens educational and recreational activities. Upon completion of the Senior Center, the Cities will lease the Senior Center to the Friends of the South Lake Minnetonka Senior Community Center. The term of the lease shall be 25 years at a rental rate of $1 per year. The Friends of the South Lake Minnetonka Senior Community Center are required to pay all operating costs of the Senior Center. The member cities are responsible for a proportionate share of the building construction. Shorewood fmanced their share with a lease purchase obligation. The amount of the lease purchase is $311,000 and is reflected in the General Long-term Debt Account Group. In the event operating costs are not covered by revenue, each member City is responsible for their proportional share of the expense. The building costs incurred by the City are reported in the Senior Center Capital Project fund and will be recorded in the General Fixed Asset Account Group when the Senior Center is completed. The ownership interest of the City is proportionate to each City's investment in the Senior Center. Note 6: OTHER INFORMATION A. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters for which the City carries insurance The City obtains insurance through participation in the League of Minnesota Cities Insurance Trust (LMCIT) which is a risk sharing pool with approximately 800 other governmental units. The City pays an annual premium to LMCIT for its workers compensation and property and casualty insurance. The LMCIT is self sustaining through member premiums and will reinsure for claims above a prescribed dollar amount for each insurance event. Settled claims have not exceeded the City's coverage in any of the past three fIScal years. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. An excess coverage insurance policy covers individual claims in excess of$I,OOO,OOO. Liabilities, if any, include an amount for claims that have been incurred but not reported (IBNRs). The City's management is not aware of any incurred but not reported claims. -20- I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 Note 6: OTHER INFORMATION - CONTINUED B. Deferred Compensation Plan The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Service Code Section 457. The plan, available to all full-time City employees at their option, permits participants to defer a portion of their salary until future years. The deferred compensation assets are not available to employees until termination, retirement, death or unforeseen emergency. All amounts of compensation deferred under this plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are (until paid or made available to the participant or beneficiary), solely the property of the City, subject only to the claims of the City's general creditors. Participants' rights under the plan are equal to those of general creditors of the City in an amount equal to the fair market value of the deferred account for each participant. It is the option of the City's legal counsel that the City has no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor. The City believes it is unlikely that it will use the assets to satisfy the claims of general creditors in the future. Assets of the plan are held by trustees and are reflected in these statements in an Agency Fund at market value. C. Segment Information for Enterprise Funds Stormwater Management Water Sewer Recycling Utility Liq.uor Total Operating revenue $ 272 678 $ 719448 $ 70 535 $ 44491 $ 342 054 $1449206 Depreciation expense 80 649 190 154 10 376 281 179 Operating income (loss) 21 544 (18652) (410) 29 458 (32822) (882 ) Operating transfers from other funds 210 150 11 0 000 320 150 Operating transfers to other funds (10 726) (24201 ) (39 808) (74735) Property tax revenue 16304 16304 Net income (loss) 317920 13 409 140 104098 (28 403 ) 407 164 Fixed asset additions 2 264 548 95 004 3097 2 362 649 Net working capital 1 865 427 1 309 700 23 209 205 348 266174 3 669 858 Contributed capital additions 711 110 73314 784 424 Total assets 7501 722 4 758 656 23 209 205 365 417 269 12906221 Total equity 4599756 4 746 243 23 209 205 348 336 224 9910780 D. Legal Debt Margin In accordance with Minnesota Statutes, the City may not incur or be subject to net debt in excess of two percent of the market value of taxable property within the City. Net debt is payable solely from ad valorem taxes and, therefore, excludes debt fmanced partially or entirely by special assessments, enterprise fund revenues or tax increments. -21- Note 7: Note 8: Note 9: CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 OPERATING LEASES The City leases space for liquor store operations. These leases are considered, for accounting purposes, to be operating leases. Lease expense for the year ended December 31, 1996 and 1995 amounted to $113,514 and $92,863. Future minimum lease payments for the liquor store I and Tonka Bay leases are as follows: Year Ending December 31. Store I Tonka Bay 1997 1998 1999 2000 2001 $ 49 500 49 500 49 500 49 500 49 500 $ 247 500 $ 12 000 Total $ 12 000 The new lease for the Store I began January 1, 1995 and will run through December 31, 2001. Store II is currently under a month to month lease. The monthly rent payments are $1,995. In December, 1994, the City of Shore wood entered into an agreement with the City of Tonka Bay to lease and operate its municipal liquor operations. The lease extends over a period of three years, ending on December 31, 1997. Under the agreement, a base rent of $1 ,000 per month, plus a percentage rent of 2% of gross sales in excess of $400,000 per year will be paid to the City of Tonka Bay. Shorewood leases the building and fixtures and has purchased the merchandise inventory from Tonka Bay. The City of Shorewood will operate the location as part of its current municipal liquor operations. TAX INCREMENT REVENUE BONDS During 1991, the City issued $920,000 Tax Increment Revenue Bonds. The proceeds of the issue will be used to pay for public improvements stipulated in the development agreements. The bond proceeds and related improvement costs are reported in the Waterford III Tax Increment Improvement Capital Projects Fund. The bonds were issued at par value not to exceed $920,000. The bonds are not a general obligation of the City and are not backed by the full faith and credit or taxing powers of the City. The bonds are payable solely from the tax increments from the City's Tax Increment Financing District No.1. In addition, upon completion of the project, all excess bond proceeds will be repaid to the holder of the bonds as principal reduction. Interest at a rate of nine percent will accrue from the date of issuance of the bonds but will not be payable until tax increment is available. The bonds payable are reported as a liability in the General Long-term Debt Account Group in the fmancial statements even though: The bonds issued are tax increment revenue bonds. The bonds are not backed by the full faith and credit of the City. The bonds will be repaid only to the extent that tax increments are generated from the Tax Increment Financing District. INTERFUND RECEIVABLES AND PAY ABLES The following is a summary of interfund receivables and payables at year end: Receivable From Payable To Capital Project Funds Shady Island Bridge Reconstruction Street Reconstruction $ 13 985 $ 13 985 -22- I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 Note 10: OPERATING TRANSFERS A schedule of operating transfers follows: General Fund Debt Service 1993 Improvement and Refunding Shorewood Oaks Shady Hills Storm Sewer Improvement Capital Projects Funds Capital Improvements Park Capital Improvements Equipment Replacement Street Reconstruction Trial Capital Improvement Senior Community Center Enterprise Funds Water Sewer Stormwater Management Utility -23- Transfer In $ 10 000 1450 10000 30 000 104 186 270 000 24 500 129 584 210 150 II 0 000 Transfer Out $ 424 186 160950 15 000 224 999 10 726 24 201 39808 I I I I I I I 1 1 1 1 I 1 I" /'1 1 1 1 1 CITYOF.SHqREWOOD,;l"IN~SOrA TH;E! GENERAL FUND /)\. . :!. ...... .. . / The G~ner;p Fund is l.lsed to aCcount for resources ttaditi~nally associate4 with govenurient "Yhidr are not r~legally or by sQundfinaqcial managem~nt to\be. ac<;ounterr;{or in otherfl.lnds. It normally receives a greater variety and number of taxes andothet g~neral revenues than any other fund.. The majority of the current day-to-day operations will be financed from this fund. . , ASSETS Cash and temporary investments Accrued interest receivables Delinquent taxes receivable Accounts receivable Special assessments receivable Delinquent Deferred TOTAL ASSETS LIABILITIES AND FUND BALANCE LIABILITIES Accounts and contracts payable Salaries payable Refundable deposits payable Deferred revenue TOTAL LIABILITIES FUND BALANCE Unreserved Designated for working capital CITY OF SHOREWOOD, MINNESOTA GENERAL FUND COMPARATIVE BALANCE SHEETS DECEMBER 31, 1996 AND 1995 TOTAL LIABILITIES AND FUND BALANCE -24- Exhibit A-I I I I I I I I I I I I I I I I I I I I 1996 1995 $1 571 287 $1 576 162 27 898 56 452 44 726 44 622 20 339 22221 1620 2148 55 735 $1665925 $1 702 340 $ 58 596 $ 69 941 22319 15 157 31038 43 560 31 020 29 334 142973 157 992 1 522 952 1 544 348 $1 665925 $1 702340 I CITY OF SHOREWOOD, MINNESOTA Exhibit A-2 I GENERAL FUND STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL I YEAR ENDED DECEMBER 31, 1996 (With Comparative Amounts for the Year Ended December 31, 1995) 1996 1995 I Variance - Favorable Budget Actual (Unfavorable ) Actual I REVENUE General property taxes General property taxes $1 513 869 $1 509592 $ (4277) $1429491 Fiscal disparities 60061 60061 60331 I Total 1 573 930 1 569 653 (4277) 1 489 822 I Licenses and permits Business 10 200 10 920 720 9250 Nonbusiness 160 100 194 539 34 439 175607 I Total 170 300 205 459 35 159 184 857 Intergovernmental - State I Property tax credits 413 718 413 718 426 970 Other 13 750 13 750 13 750 I Total 427 468 427 468 440 720 Charges for services General government 6500 10451 3951 13 156 I Parks and recreation 42 000 34 794 (7 206) 7 349 Total 48 500 45 245 (3 255) 20 505 I Fines and forfeitures 80 000 80 826 826 68 765 I Miscellaneous revenue Special assessments 671 Interest on investments 75 000 95 711 20711 84616 Other 21 500 33 393 11 893 58 053 I Total 96 500 129 104 32 604 143340 I TOTAL REVENUE 2 396 698 2457 755 61 057 2 348 009 EXPENDITURES I Current Expenditures General Government Mayor and Council Personal services 13 564 13564 13 564 I Supplies 2250 1503 747 830 Other services and charges 52 727 48 309 4418 36 856 Contingency 3425 3425 I Total 71 966 63 376 8590 51 250 I -25- I CITY OF SHOREWOOD, MINNESOTA Exhibit A-2 GENERAL FUND Continued I STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 1996 I (With Comparative Amounts for the Year Ended December 31, 1995) 1996 1995 Variance - I Favorable Budget Actual (Unfavorable) Actual EXPENDITURES - CONTINUED I Current Expenditures - Continued General Government - Continued Administrative Personal services $ 88 102 $ 93 895 $ (5793 ) $ 95 053 I Supplies 700 517 183 363 Other services and charges 7400 6572 828 7007 Total 96 202 100 984 (4782) 102 423 I Finance I Personal services 87 897 87919 (22) 80 642 Supplies 3750 4113 (363 ) 3381 Other services and charges 8150 4096 4054 5197 I Total 99 797 96 128 3669 89 220 Professional services I Personal services 65016 57 509 7507 4290 Supplies 1300 1421 (121 ) 1257 Other services and charges 127 950 153861 (25911 ) 197337 I Total 194 266 212 791 (18525) 202 884 Planning and zoning I Personal services 85 874 88 779 (2 905) 88 156 Supplies 1500 1095 405 436 Other services and charges 9500 7672 1828 7303 I Total 96 874 97 546 (672 ) 95 895 Municipal building I Supplies 11 600 9472 2128 12 309 Other services and changes 83 900 75 882 8018 80 217 Total 95 500 85 354 10 146 92 526 I Other general government I Personal services 78 667 78 669 (2) 60275 Supplies 14000 17491 (3491 ) 14 636 Other services and charges 14 150 15 053 (903 ) 9983 Total 106 817 111 213 (4396) 84 894 I Total General Government 761 422 767 392 (5 970) 719092 I -26- I I CITY OF SHOREWOOD, MINNESOTA Exhibit A-2 I GENERAL FUND Continued STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL I YEAR ENDED DECEMBER 31, 1996 (With Comparative Amounts for the Year Ended December 31, 1995) 1996 1995 I Variance - Favorable Budget Actual (Unfavorable) Actual I EXPENDITURES - CONTINUED Current Expenditures - Continued Public Safety Police protection I Supplies $ $ 1043 $ (1043) $ 339 Other services and charges 466 423 466 633 (210) 442176 I Total 466 423 467 676 (1253) 442 515 Fire protection I Other services and charges 133 395 136 942 (3 547) 123 513 Protective inspection Personal services 65 775 59911 5864 58 459 I Supplies 775 847 (72) 404 Other services and charges 27 900 24 528 3372 22 742 I Total 94 450 85 286 9164 81 605 Total Public Safety 694 268 689 904 4364 647633 I Public Works General maintenance Personal services 131 133 181 638 (50505) 164346 I Supplies 35 000 36881 (1881) 33 158 Other services and charges 18 050 18 088 (38) 15 144 I Total 184 183 236607 (52424 ) 212648 Streets and roadways Personal services 97 279 65-072 32 207 71 137 I Supplies 30 000 33 779 (3 779) 26 309 Other services and charges 38 600 28 069 10 531 30 975 I Total 165 879 126 920 38 959 128421 Snow and ice removal I Personal services 25 450 32 776 (7326) 20 663 Supplies 15000 17 265 (2 265) 16 995 Total 40 450 50 041 (9 591 ) 37658 I I I -27- -28- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Exhibit A-2 GENERAL FUND Continued STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 1996 (With Comparative Amounts for the Year Ended December 31, 1995) 1996 1995 Variance - Favorable Budget Actual (JJnfavorable) Actual EXPENDITURES - CONTINUED Current Expenditures - Continued Public Works - Continued Traffic control Supplies $ 4000 $ 4021 $ (21 ) $ 2071 Other services and changes 33 000 33 546 (546 ) 33 405 Total 37 000 37567 (567) 35 476 Sanitation and waste removal Personal services 611 999 (388 ) 621 Other services and charges 4 000 3621 379 3731 Total 4 611 4620 (9) 4352 Tree maintenance Personal services 7733 6165 1568 887 Supplies 13 370 10 687 2683 13 317 Total 21 103 16 852 4251 14204 Total Public Works 453 226 472 607 (19381 ) 432 759 Culture and Recreation Personal services 87271 72 645 14626 73 595 Supplies 19 550 16790 2760 19709 Other services and charges 24 000 19814 4186 20 982 Total Culture and Recreation 130821 109 249 21 572 114 286 Total Current Expenditures 2 039 737 2039 152 585 1 913 770 Capital Outlay General government 16 525 15 074 1451 4006 Public safety 3070 Culture and recreation 1250 739 511 1 160 Other 35 000 35 000 Total Capital Outlay 52 775 15813 36 962 8236 TOTAL EXPENDITURES 2092512 2 054 965 37 547 1 922 006 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES 304 186 402 790 98 604 426 003 I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Exhibit A-2 GENERAL FUND Continued STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL YEAR ENDED DECEMBER 31, 1996 (With Comparative Amounts for the Year Ended December 31, 1995) OTHER FINANCING SOURCES (USES) Operating transfers in Operating transfers out 1996 1995 Variance - Favorable Budget Actual (JJnfavorab1e) Actual $ 30 000 $ $ (30 000) $ 30 000 (424 186) (424 186) (404225) (:394 186) (424 186) (30000) (374225) TOTAL OTHER FINANCING SOURCES (USES) EXCESS (DEFICIENCY) OF REVENUE AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES $ (90 000) (21 396) $ 68604 51 778 FUND BALANCE, JANUARY 1 1 544 348 1 497 678 FUND EQUITY TRANSFERS OUT (5 108) FUND BALANCE, DECEMBER 31 $1 522952 $1 544 348 -29- I I I I I I I I I I I I I I I I I I I CITY OFSHOREWOOD, MINNESOTA DEBT SERVICE FUNDS /' . Debt service ,funds, are used to account for.the pay~nt of interest and princip<ll on 19n9- term genel1l1 obligation debt other than debt issued for, and serviCed' primarily J>y enterprise funds. ' \ 1993 Improvement ,and Refunding Fund-This fund was established to account for the accumulation of resources for payment of interesf1Uld principal on bonds ,is$ued for the Season's development improvements, and to refund,the 1987 refunding b(.>n(!s. ' Shorewood Oaks fund - This fund was established to account for the.accwrtulation of resources for the payment of interest and principal on bonds is~ed for street. and utility improvements in the Shorewood Oaks development. The debt serviced by this fund was called and paid in full in February, 1996. The residual balance was distributedbetwe,c}n the 1993 Improvement and Refunding Fund, the Stormwater Management Fund and 4he Public Facilities/Office Equipment Fund .at-the claseof the year. W~terrord 01 TaxIncr~ment Fund,. 11ris fund was .'established, t().accountfor ,the accumulation of R<sources forp"y~nt of interest and principal on bonds issue<i for,the Waterford ill InterSection Improvements. Shady Hills ,Storm Sewer ,Improvement Fund ,. This fQttd was establiShed to account for the accumulation' of resources for payment of, interest and principal on . bonds issued for the Shady Hills Storm Sewer Improvements. , 1991" Improvement aud Re(undin~ 'Fllnd ,. This fund was established to account for the accumulation of resources for the payment of interest and principal on. bonds issued for, the SE water treatment plant, Pine Bend improvements, Church ROa<l impr9vements, and,', to refund the 1986 improvementbQnds. ASSETS Cash and temporary investments Accrued interest receivable Delinquent taxes receivable Special assessments receivable Delinquent Deferred TOTAL ASSETS LIABILITIES AND FUND BALANCE LIABILITIES Accounts and contracts payable Deferred revenue TOTAL LIABILITIES FUND BALANCE Reserved for debt service CITY OF SHOREWOOD, MINNESOTA DEBT SERVICE FUNDS COMBINING BALANCE SHEET DECEMBER 31, 1996 (With Comparative Totals for December 31, 1995) 1993 Improvement and Refunding $ 168302 1913 1003 106 745 $ 277 963 $ $ 107 451 107 451 170512 $ 277 963 $ TOTAL LIABILITIES AND FUND BALANCE -30- Shorewood Oaks $ $ Waterford III Tax Increment I I I I I I I I I I I I I I I I I I I $ 3 796 351 3360 $ 7 507 $ 7507 $ 7 507 I I Exhibit B-1 I 1991 I Shady Hills Improvement Storm Sewer and Totals Improvement Refunding 1996 1995 I $ 7669 $313124 $ 492 891 $1 371 241 18 4235 6517 42 577 295 3655 2374 I 9558 10 561 12 182 281 368 388 113 498871 I $ 7982 $ 608 285 $ 901 737 $1 927245 I $ $ $ $ 550 163 290 488 398 102 506 963 I 163 290 488 398 102 507 513 I 7 819 317 797 503635 1419732 $ 7982 $ 608 285 $ 901 737 $1 927245 I I I I I I I I I -31- 79 749 7454 2076 1 2083 I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE YEAR ENDED DECEMBER 31, 1996 (With Comparative Totals for the Year Ended December 31, 1995) REVENUE Property taxes Intergovernmental - state . Property tax credits Special assessments Interest on investments 1993 Improvement and Refunding Shorewood Oaks Waterford mTax Increment $ $ $ 176172 TOTAL REVENUE 87 203 2077 178255 EXPENDITURES Debt service Principal Interest and service charges TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Operating transfer in Operating transfer out TOTAL OTHER FINANCING SOURCES (USES) EXCESS (DEFICIENCY) OF REVENUE AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES 45 492 (803 792) (14703) FUND BALANCE, JANUARY 1 144 265 870 973 22210 FUND EQUITY TRANSFER OUT (19245 ) (fJ7181) FUND BALANCE, DECEMBER 31 $ 170512 $ $ 7 507 -32- I I Exhibit B-2 I 1991 Shady Hills Improvement I Storm Sewer and Totals Improvement Refunding 1996 1995 I $ 8341 $ $ 184 513 $ 30 608 335 63 981 145 806 170 732 I 131 12 260 21 929 63 301 8472 76241 352248 264 976 I 7000 100 000 887 000 231 000 I 881 34 950 145419 99 823 7881 134950 1 032419 330 823 I 591 (58 709) (680 171) (65 847) I 1450 11 450 (160950) I 1450 (149500) I 2041 (58709) (829 671 ) (65847) I 5778 376506 1419732 1 485 579 (86426) I $ 7819 $ 317 797 $ 503635 $ 1419732 I I I I I -33- I I I 1 1 '1\ 1 I I 1 I I I 1 1 1 I ,1 I CITY OFSHOREWOOD, MINNESOTA CAPITAL PROJECTSlfUNDS Capital projects fund~ are used to, account for the/acquisition' and consttuction,of major c8l>ital facilities other ,than thQsefi9anced by enterprise fuilds, ' , , Public, Fad'ities/Office ' EqujpmentFund -This funp was established to account for capital ~provemem/ projects for public facilities and replacemC1Dt of office equipment which may be financed without the r.(eea to i~sue bonds. ! "\ i." ". / Park Ca,pital Impr~vem~ItK Fund - Thi~ fun~f accounts for park hmd acquisi~onand other capital im{>rovements in the ~ity'parks. . /. ' i / Equipment Relllace~ent Fund - This fund was established fot. the purpose'offunding the replacement of c~ita1 equipment - Street Reconstruction- FUtJd - This fund/waS 'established for the purpose of funding the periodic reconstructiqn of City streetsandr9adw~y~.' MSAConstruction Fund - fhisfund wa~established to account for the accumulati6n of Municipal State Aid (MSA) to fund the periodicteeonstroction of MSA designated roads. ~ . \ \ Trail Capital Improvem~nt Fund- This fund ~as established to ,account for mutextensions and improvements. . I 1995 Manor Park /Improvement Fund -, This ,fund was estal>lished to account for the construction of improvements in Manor Park. This fund was closedatyeat. end by an, equity transfert to the Park Capital Improvtjment Fund. ~. . . : 1995 Freeman Park, Improvement, I.?ynd - This fund was established to account for the constnlctipn of improvements in FreelJUlfl Park;' Senior ~Omm\lllity Center Fun~. - This fund was established to aCcount for the construction ofa Senior Community Center. ) ..' '. : Shady Island. Bridle. Replacemept Fund -This fund was/established to account for the , replacement of the Shady Island Bridge. Silverw9od. Park. Improvemtl)tFuQd -/ This fund was.. establishedftOaccount f9i" the construction of improvements in Silverwood Park. This fund was 'closed at ,year/end by an 'equity transfer to the Park Capital Improvement Fund. ./ \.. City Hall Parkin, Lot )fund -This fund was established to account for ~,r6COnstructionof the City Hall Parking Lot. This fund Was closed a1 yearend by an equitytransfer~tothePublic facilities/Office Equipmen~.~und. ., \ .f . .\; ,..,;. ...., ....,. " Seasons, Improvements Fund,. This fund . was established to account for $e oonstmctiQnof; street and utility improvements forijle Seasons Elderly Housing ProjecJ. An eqUity ~sfer (ropti'! its corresponding, debt service fund, the 1993 Impro"ementand Refunding Fund, to cover. a clefjCit. effectively closed this fu,nd at year end. . Vine Hill Improvement Fund- T~fund was established tq account for 'pteCity's costs associated with the Minnesota Department of Tr)U1sportation's improvement of the intersection at Vine Hill Ro~d and Highway 7. This fund was closed at year emi.byan equity transfer to the Street Reconstruction Fund. Qld Market Road ~rail Fund - This fund was created to account for, the constmction. ofa trail al()flg Old Market Road. An equity transfer fro~ ~. .,~&A Construction Fund to cl:)ver a deficit effectively closed this fund at year end. . / .....' Cathcart P~rk Improvements fund -. This fund was established to account for tlie constmction of improvemepts in CathCart Park. -34- 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 I I Exhibit C-l Continued I 1995 1995 Senior Shady Silverwood MSA Trail Capital Manor Park Freeman Park Community Island Bridge Park Construction Improvements Improvement Improvement Center Reconstruction Grading I $ 170715 $ 94814 $ $ 24 496 , $ 471 062 $ $ 2587 1059 370 5661 I 8887 I $ 182 189 $ 95 873 $ $ 24 866 $ 476 723 $ $ I $ 6377 $ $ $ $ 75 530 $ 12 000 $ I 25 150 13 985 I 6377 100 680 25 985 I 175812 95 873 24 866 376 043 I (25 985) 175812 95 873 24 866 376043 (25 985) I $ 182 189 $ 95 873 $ $ 24 866 $ 476 723 $ $ I I I I I I I -35- -36- I I I I I I I I I I I I I I I I I I I I I Exhibit C-l Continued I Cathcart Park Totals I Improvements 1996 1995 $ 3368 $ 2026 275 $ 1 392816 I 239 32 736 48 882 8887 5464 I 485 684 7676 1066 13 985 85 517 I $ 3607 $ 2 090 044 $ 1 534 429 I $ $ 97 204 $ 45 220 25 150 25 150 8160 1705 I 13 985 85 517 144499 157 592 I I 3607 1 971 530 1 491 433 05 985) (114 596) 3607 1 945 545 1 376 837 I $ 3 607 $ 2 090 044 $ 1 534 429 I I I I I I I -37- I I Exhibit C-2 Continued I 1995 1995 Senior Shady Silverwood MSA Trail Capital Manor Park Freeman Park Community Island Bridge Park I Construction Improvements Improvement Improvement Center Reconstruction Grading $ 45 771 $ $ $ $ $ $ I 10 022 3419 1963 33 131 99 I 371 020 I 55 793 3419 I 963 404151 99 I 177 71 26 1108 32410 25 985 I I 110 408 073 I 177 71 I 136 441 591 25 985 I 55 616 3348 827 (37440) 05 985) 98 24 500 129 584 I 311 000 I 24 500 440584 I 55 616 27 848 827 403 144 (25 985) 98 I 139 673 68 025 (5910) 24 039 (27 101) I 177 5910 I (19477) (l 275) $ 175812 $ 95 873 $ $ 24 866 $ 376 043 $ (25985) $ I I I -39- I CITY OF SHOREWOOD, MINNESOTA CAPITAL PROJECTS FUNDS I COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE - CONTINUED YEAR ENDED DECEMBER 31, 1996 (With Comparative Totals for the Year Ended December 31, 1995) I City Hall Old Parking Season Vine Hill Market Lot Improvements Improvement Road Trail I REVENUE Intergovernmental $ $ 39 960 $ $ 8889 Special assessments I Interest on investments 416 81 Miscellaneous Park dedication fees Contributions and donations I Other 220 TOTAL REVENUE 416 39 960 301 8889 I EXPENDITURES Capital outlay I Personal services Other services and charges 6 6548 Professional services 65 Construction costs 1353 I Machinery and equipment TOTAL EXPENDITURES 1424 6 548 I EXCESS (DEFICIENCY) OF REVENUE OVER EXPENDITURES (l 008) 39 960 300 2341 I OTHER FINANCING SOURCES (USES) Operating transfers in Lease purchase proceeds I Operating transfers out TOTAL OTHER FINANCING I SOURCES (USES) EXCESS (DEFICIENCY) OF REVENUE AND OTHER I FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES (l008) 39 960 300 2341 FUND BALANCE (DEFICIT), JANUARY I (562 ) (59205) 954 (21818) I FUND EQUITY TRANSFER IN 1570 19245 19477 FUND EQUITY TRANSFER OUT (l254) I FUND BALANCE (DEFICIT), DECEMBER 31 $ $ $ $ I I -40- I I "I I I I I I I :1 I I I I I :1 I I I I CITY OF $HOREWOOD, MINNESOTA ENTERPRISE FUNDS Enterprise funds are used to'. account for .ope~~ons ~ are. fltlanced and ~perated ill;..a manner similar to private busines!), . where the costs of providing' services to-the general puOlic are financed primarily.through user charges. . . WatelFund - This fund iSiused to account for the activipes of the City water systepl and to service debt incurred in the b\lilding of infratructure for'fhe system; : . i / '< Sewer Fund - .This fund is used to accOW\t for the activities of the City sanitary sewer system. Recycling Fund - Thi.& fund is\used to account for the activities of the City/recycling; · ~~~. ( I ~I .. ,./.......-...." .. " .. .. i ,,- .'_... .' StormwaterM;magementUtility Fund - This/fund is used to account for the activities of the ~ity StoJ;lllwa~r Management system: . (.iquor Fund ~\This fund is u~ to account for the activities of tPe. City'spff..saleIiquor operation. Tqe-operation consisted of three off-saleliquor store ~tes in 1996. A store which · was closed tempprarily in January, 1994 due to. a state. highway project was ~opened in ~ differentlocation in February, 1995. Ip. addition, a store location was added. in Decembe1\,. 1994, when the City assu.l!led the management. of the TonkaBay Liquor' Store. A portionoLthe net in.come generated by the operation, if a,n:y, is used ~ fund general fund activities. / CITY OF SHOREWOOD, MINNESOTA ENTERPRISE FUNDS COMBINING BALANCE SHEET DECEMBER31,1996 (With Comparative Totals for December 31, 1995) ASSETS CURRENT ASSETS Cash and temporary investments Accrued interest receivable Delinquent taxes receivable Accounts receivable Special assessments receivable Delinquent Deferred Current portion of note receivable Due from other funds Inventories, at cost Prepaid items TOTAL CURRENT ASSETS FIXED ASSETS, AT COST LESS ACCUMULATED DEPRECIATION TOTAL FIXED ASSETS OTHER ASSETS Bond discount, net of amortization Notes receivable, less current portion above TOTAL OTHER ASSETS TOTAL ASSETS LIABILITIES AND FUND EQUITY CURRENT LIABILITIES Accounts and contracts payable Salaries and compensated absences payable Deferred revenue Due to other funds Current portion of long-term debt TOTAL CURRENT LIABILITIES LONG-TERM LIABILITIES Bonds payable less current portion above TOTAL LIABILITIES FUND EQUITY Contributed capital Retained earnings Unreserved TOTAL FUND EQUITY TOTAL LIABILITIES AND FUND EQUITY -42- Water Sewer $ 1056041 $ 1 082 948 17 632 14885 470 43 721 181 287 16307 14929 881217 26 000 93 000 4005 2064 2 112 393 1 322 113 6063217 7 560 293 (834 877) (4 123 750 ) 5 228 340 3 436 543 21 489 139 500 160989 $ 7501 722 $ 4 758 656 $ 121 805 $ 12356 161 57 125 000 246 966 12 413 2 655 000 2901966 12413 4 427 326 4 390 632 172 430 355611 4 599 756 4 746 243 $ 7501 722 $ 4 758 656 I I I I I I I I I I I I I I I I I I I I I Exhibit D-l Stormwater I Management Totals Recycling Utility Liquor 1996 1995 I $ 12 385 $ 189385 $ 52 376 $ 2 393 135 $ 2881217 275 1343 2084 36219 55 107 470 502 9176 12 095 246 279 234 838 I 266 1083 32 585 13 701 1 107 1459 909 783 782 9Il 93 000 I 34 4Il 281 738 281 738 257447 11 021 17090 17737 I 23 209 205 365 347219 4 010 299 4277 871 100260 13 723 770 11 361 121 I (30210) (4 988 837) (4 707 661) 70 050 8734 933 6 653 460 I 21 489 11 799 139 500 I 160 989 $ 23 209 $ 205 365 $ 417 269 $12 906 221 $10 943 130 I $ $ $ 73 768 $ 207929 $ 242 842 17 7277 7512 4092 I 7593 34 4Il 125 000 15000 I 17 81045 340 441 303 938 I 2 655 000 1 920 000 17 81045 2 995 441 2 223 938 I 8817958 8 033 534 23 209 205 348 336 224 1 092 822 685 658 I 23 209 205 348 336 224 9910780 8 719192 $ 23 209 $ 205 365 $ 417 269 $12906221 $10 943 130 I I I -43- I CITY OF SHOREWOOD, MINNESOTA ENTERPRISE FUNDS I COMBINING STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS YEAR ENDED DECEMBER 31, 1996 (With comparative totals for the year ended December 31, 1995) Water Sewer I OPERATING REVENUE Sales $ $ Less cost of sales I GROSS PROFIT Charges for services 259 228 698 882 I Permits and connection fees 13 450 20 566 GROSS PROFIT AND REVENUE 272 678 719 448 OPERATING EXPENSES I Personal services 5680 9645 Supplies 5412 1689 I Repairs and maintenance 8777 6446 Depreciation 80 649 190 154 Professional services 6306 752 Contracted services 49219 31647 I Communication 1 112 145 Insurance 4575 3540 Water purchases 10492 Utilities 47 739 4440 I MCES disposal charges 488439 Rent Advertising Other 31 173 1203 I TOTAL OPERATING EXPENSES 251 134 738 100 OPERATING INCOME (LOSS) 21544 (18652) I NONOPERATING REVENUE (EXPENSES) General property taxes 16304 Special assessments 59919 I Interest on investments 75 477 54019 Other income (expense) 19 725 2243 Interest expense (74473 ) I TOTAL NONOPERATING REVENUE (EXPENSES) 96 952 56 262 INCOME (LOSS) BEFORE TRANSFERS 118496 37610 I OPERATING TRANSFERS FROM OTHER FUNDS 210 150 OPERATING TRANSFERS TO OTHER FUNDS (10 726) 04201 ) I NET INCOME (LOSS) 317 920 13 409 RETAINED EARNINGS (DEFICIT), JANUARY 1 (145490) 342 202 I RETAINED EARNINGS (DEFICIT), DECEMBER 31 $ 172 430 $ 355611 I I -44- I I I Exhibit D-2 Stormwater I Management Totals Recycling Utility LiqJlor 1996 1995 $ $ $ 1 705 040 $ 1 705 040 $ 1 473 403 I (1 362 986) (1 362 986) (1165021 ) 342 054 342 054 308 382 I 70 535 44491 1 073 136 961 151 34 016 37207 70 535 44491 342 054 1 449 206 1 306 740 I 725 1359 179397 196 806 199 486 8370 15471 21 473 I 15 223 16490 10376 281 179 274 583 424 2381 9863 42 592 I 70 090 13 250 1923 166 129 168 628 1257 1319 13 692 21 807 22 164 10 492 12073 I 24239 76418 67 792 488 439 446 113 113 514 113 514 92 863 9159 9159 9594 I 130 11 825 44 331 25 295 70 945 15033 374 876 1 450 088 1 400 465 I (410) 29 458 (32822) (882 ) (93 725) 16304 17 506 I 59919 550 4448 5902 140396 84 365 (1483) 20 485 8143 I (74473 ) (;3 001) 550 4448 4419 162 631 107 013 I 140 33 906 (28 403 ) 161 749 13 288 11 0 000 320 150 180000 I (39 808) (74 735) (200 000) 140 104 098 (28 403) 407 164 (6712) I 23 069 1 0 1 250 364 627 685 658 692 370 $ 23 209 $ 205 348 $ 336 224 $ 1 092 822 $ 685 658 I I I -45- CITY OF SHOREWOOD, MINNESOTA ENTERPRISE FUNDS COMBINING STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 1996 (With Comparative Totals for the Year Ended December 31, 1995) Water CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) Other income related to operations Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization (Increase) decrease in assets - Accrued interest receivable Delinquent taxes receivable Accounts receivable Special assessments receivable Due from other funds Inventories Prepaid items Increase (decrease) in liabilities - Accounts payable Salaries and compensated absences payable Deferred revenue Due to other funds $ 21 544 19 725 81666 2174 32 (5 725) (I50 936) (231 ) (26819) (3) CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Operating transfers from other funds Operating transfers to other funds (58 573 ) 210 150 (IO 726) CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Issuance of bonds, net of discount Bond principal paid Interest paid on revenue bonds Acquisition of fIxed assets Property taxes levied for debt service Special assessments collected 199424 849 293 (15000) (74473 ) (l 780 939) 16304 54 917 CASH PROVIDED (USED) BY CAPITAL AND RELATED FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments (949 898) 75 477 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, JANUARY 1 CASH AND CASH EQUIVALENTS, DECEMBER 31 (733 570) 1 7896II $ 1 056041 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Fixed assets acquired from other funds $ 483 609 $ 232 500 Additions to contributed capital from note proceeds -46- Sewer $ (I8652) 2243 190 154 11 279 127 6464 1064 10 912 (2) (7 593) 195996 (24201 ) (24201 ) (21 690) (21 690) 54019 204 124 878 824 $ 1 082 948 $ 73 314 $ I I I I I I I I I I I I I I I I I I I I I Exhibit D-3 Stormwater I Management Totals Recycling Utility LiQJlor 1996 1995 $ (410) $ 29 458 $ (32822) $ (882 ) $ (93 725) I (1483) 20 485 8143 10376 282 196 274 898 I 731 1432 3272 18 888 (15 502) 32 62 (7 205 ) (121) 1483 (11441) 22410 I (664 ) (620 ) (145 756) 2168 34 411 34 411 (34411 ) (24291 ) (24291 ) (104032) (186) 647 (4303 ) I (13 625) (5381 ) (34913 ) 112 767 (28) 3453 3420 1249 (7 593) 7593 I (34411 ) (34411 ) 34 411 (7 548) 16496 (45 579) 100 792 211 728 I 11 0 000 320 150 180000 (39 808) (74735) (200 000) I 70 192 245415 (20 000) I 849 293 1 908 250 (15000) (15000) (74473 ) (3 001) I (3 097) (1 805 726) (805536) 16304 17 506 54 917 1 04 662 I (3 097) (974 685) 1 206881 I 550 4448 5902 140396 84 365 (6998) 91 136 (42774 ) (488082) 1482974 I 19383 98 249 95 150 2881217 1 398 243 $ 12 385 $ 189385 $ 52 376 $ 2 393 135 $ 2 881 217 I $ $ $ $ 556923 $ 81 675 I $ $ $ $ 232 500 $ I I -47- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA WATER FUND COMPARATIVE BALANCE SHEETS DECEMBER 31, 1996 AND 1995 ASSETS CURRENT ASSETS Cash and temporary investments Accrued interest receivable Delinquent taxes receivable Accounts receivable Special assessments receivable Delinquent Deferred Current portion of note receivable Prepaid items TOTAL CURRENT ASSETS FIXED ASSETS, AT COST LESS ACCUMULATED DEPRECIATION TOTAL FIXED ASSETS OTHER ASSETS Bond discount, net of amortization Note receivable, less current portion above TOTAL OTHER ASSETS TOTAL ASSETS LIABILITIES AND FUND EQUITY CURRENT LIABILITIES Accounts and contracts payable Salaries payable Current portion of long-term debt TOTAL CURRENT LIABILITIES LONG-TERM LIABILITIES Bonds payable less current portion above TOTAL LIABILITIES FUND EQUITY Contributed capital Retainedearnings@efic~ Unreserved TOTAL FUND EQUITY TOTAL LIABILITIES AND FUND EQUITY -48- Exhibit D-4 1996 1995 $ 1 056041 $ 1 789611 17 632 19806 470 502 43721 37 996 16307 881 217 746 588 93 000 4005 3774 2 112 ~93 2 598 277 6063217 3 798 669 (834 877) (754231) 5 228 340 3 044 438 21 489 11 799 139 500 160 989 II 799 $ 7501 722 $ 5 654 514 $ 121 805 $ 148 624 161 164 125 000 15000 246 966 163 788 2 655 000 1 920 000 2 901966 2 083 788 4 427 326 3716216 172 430 (145490) 4 599 756 3 570 726 $ 7501 722 $ 5 654 514 CITY OF SHOREWOOD, MINNESOTA Exhibit D-5 WATER FUND COMPARATIVE STATEMENTS OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS (DEFICIT) YEARS ENDED DECEMBER 31, 1996 AND 1995 OPERATING REVENUE Charges for services Permits and connection fees 1996 1995 $ 259 228 $ 190 100 13 450 8466 272 678 198566 5680 5823 5412 4180 8777 7906 80 649 79617 6306 32 048 49219 43 550 I 1I2 1058 4575 3918 10 492 12073 47 739 38 271 31 173 15 142 251 134 243 586 21 544 (45020) 16304 17 506 59919 75 477 36 397 19 725 81I2 (74473 ) (3001 ) 96 952 59014 1I8496 13 994 210 150 (10726) 317 920 13 994 (145490) (159484 ) $ 172 430 $ (145490) TOTAL OPERATING REVENuE OPERATING EXPENSES Personal services Supplies Repairs and maintenance Depreciation Professional services Contracted services Communication Insurance Water purchases Utilities Other TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) NONOPERATING REVENUE (EXPENSES) General property taxes Special assessments Interest on investments Other income Interest expense TOTAL NONOPERATING REVENUE (EXPENSES) INCOME BEFORE TRANSFERS OPERATING TRANSFERS FROM OTHER FUNDS OPERATING TRANSFERS TO OTHER FUNDS NET INCOME RETAINED EARNINGS (DEFICIn, JANUARY 1 RETAINED EARNINGS (DEFICIn, DECEMBER 31 -49- I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA WATER FUND COMPARATIVE STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 1996 AND 1995 CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) Other income related to operations Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization (Increase) decrease in assets - Accrued interest receivable Delinquent taxes receivable Accounts receivable Special assessments receivable Prepaid items Increase (decrease) in liabilities - Accounts and contracts payable Salaries and compensated absences payable CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Operating transfers from other funds Operating transfers to other funds CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Issuance of bonds, net of discount Bond principal paid Interest paid on revenue bonds Acquisition of ftxed assets Property taxes levied for debt service Special assessments collected CASH PROVIDED (USED) BY CAPITAL AND RELATED FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, JANUARY 1 CASH AND CASH EQUIVALENTS, DECEMBER 31 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Fixed assets acquired from other funds Additions to contributed capital from note proceeds -50- Exhibit D-6 1996 1995 $ 21 544 $ (45020) 19 725 8112 81 666 79 932 2174 (12224 ) 32 62 (5 725) 1063 (150936) 8067 (231) (611 ) (26819) 142 907 (3 ) 154 (58 573 ) 182442 210 150 (10726) 199424 849 293 I 908 250 (I5000) (15000) (74473 ) (3 00 I ) (1 780 939) (728 495) 16304 17 506 54 917 104 662 (949 898) I 283 922 75 477 36 397 (733 570) I 502761 1 789611 286 850 $1 056 041 $1 789 611 $ 483 609 $ $ 232 500 $ CITY OF SHOREWOOD, MINNESOTA SEWER FUND CONWARATIVEBALANCESHEETS DECEMBER 31, 1996 AND 1995 ASSETS CURRENT ASSETS Cash and temporary investments Accrued interest receivable Accounts receivable Special assessments receivable Delinquent Deferred Prepaid items TOTAL CURRENT ASSETS FIXED ASSETS, AT COST LESS ACCUMULATED DEPRECIATION TOTAL FIXED ASSETS TOTAL ASSETS LIABILITIES AND FUND EQUITY CURRENT LIABILITIES Accounts and contracts payable Salaries and compensated absences payable Deferred revenue TOTAL CURRENT LIABILITIES FUND EQUITY Contributed capital Retained earnings Unreserved TOTAL FUND EQUITY TOTAL LIABILITIES AND FUND EQUITY -51- Exhibit D-7 1996 1995 $ 1 082 948 $ 878 824 14 885 26 164 181287 181414 14929 13 051 26 000 34 342 2064 3 128 1 322 113 1 136 923 7 560 293 7 465 289 (4 123750) 0933596) 3 436 543 3531 693 $ 4 758 656 $ 4 668 616 $ 12 356 $ 1444 57 59 7593 12413 9096 4 390 632 4317318 355611 342 202 4 746 243 4 659 520 $ 4 758 656 $ 4668616 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Exhibit D-8 SEWER FUND COMPARATIVE STATEMENTS OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS YEARS ENDED DECEMBER 31, 1996 AND 1995 1996 1995 OPERATING REVENUE Charges for services $ 698 882 $ 679 832 Permits and connection fees 20 566 28741 TOTAL OPERATING REVENUE 719448 708 573 OPERATING EXPENSES Personal services 9645 6088 Supplies 1689 1563 Repairs and maintenance 6446 7855 Depreciation 190 154 185401 Professional services 752 8482 Contracted services 31 647 39 840 Communication 145 261 Insurance 3540 5018 Utilities 4440 4252 MCES charges 488 439 446 113 Other 1203 1455 TOTAL OPERATING EXPENSES 738 100 706 328 OPERATING INCOME (LOSS) (18652) 2245 NONOPERATING REVENUE (EXPENSES) Interest on investments 54019 39 006 Other income 2243 TOTAL NONOPERATING REVENUE (EXPENSES) 56 262 39 006 INCOME BEFORE OPERATING TRANSFERS 37610 41 251 OPERATING TRANSFERS TO OTHER FUNDS (24201 ) NET INCOME 13 409 41251 RETAINED EARNINGS, JANUARY I 342 202 300 951 RETAINED EARNINGS, DECEMBER 31 $ 355611 $ 342 202 -52- CITY OF SHOREWOOD, MINNESOTA SEWER FUND COMPARATIVE STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 1996 AND 1995 Exhibit D-9 1996 1995 CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) $ (18652) $ 2245 Other income related to operations 2243 Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation 190 154 185401 (Increase) decrease in assets - Accrued interest receivable 11 279 (5657) Accounts receivable 127 5628 Special assessments receivable 6464 (5 178) Prepaid items 1064 1265 Increase (decrease) in liabilities - Accounts payable 10 912 (38661 ) Salaries and compensated absences payable (2) 49 Deferred revenue (7 593) 7 .593 CASH PROVIDED BY OPERATING ACTIVITIES 195996 152 685 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Operating transfer to other funds (24201 ) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of fIxed assets (21 690) (l 166) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 54 019 39 006 INCREASE IN CASH AND CASH EQUIVALENTS 204 124 190 525 CASH AND CASH EQUIVALENTS, JANUARY 1 878 824 688 299 CASH AND CASH EQUIVALENTS, DECEMBER 31 $ 1 082 948 $ 878 824 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Fixed assets acquired from other funds $ 73314 $ 81675 -53- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Exhibit D-ll RECYCLING FUND COMPARATIVE STATEMENTS OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS YEARS ENDED DECEMBER 31, 1996 AND 1995 1996 1995 OPERATING REVENUE Charges for services $ 70 535 $ 46 883 OPERATING EXPENSES Personal services 725 924 Contracted services 70 090 68 810 Other 130 TOTAL OPERATING EXPENSES 70 945 69 734 OPERATING LOSS (410) (22851 ) NONOPERATING REVENUE (EXPENSES) Interest on investments 550 1475 NET INCOME (LOSS) 140 (21376) RETAINED EARNINGS, JANUARY 1 23 069 44 445 RETAINED EARNINGS, DECEMBER 31 $ 23 209 $ 23 069 -55- I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Exhibit D-12 RECYCLING FUND COMPARATIVE STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 1996 AND 1995 1996 1995 CASH FLOWS FROM OPERATING ACTIVITIES Operating loss $ (410) $ (22851 ) Adjustments to reconcile operating loss to net cash used by operating activities: (Increase) decrease in assets - Accrued interest receivable 731 14367 Accounts receivable (7 205) (61 ) Special assessments receivable (664 ) 10 Increase (decrease) in liabilities - Accounts payable (4370) CASH USED BY OPERATING ACTIVITIES (7 548) (12 905) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 550 1475 DECREASE IN CASH AND CASH EQUIVALENTS (6998) (11 430) CASH AND CASH EQUIVALENTS, JANUARY 1 19383 30813 CASH AND CASH EQUIVALENTS, DECEMBER 31 $ 12 385 $ 19383 -56- ASSETS CURRENT ASSETS Cash and temporary investments Accrued interest receivable Accounts receivable Special assessments receivable Delinquent Deferred CITY OF SHOREWOOD, MINNESOTA STORMW ATER MANAGEMENT UTILITY FUND COMPARATNE BALANCE SHEETS DECEMBER 31, 1996 AND 1995 TOTAL ASSETS LIABILITIES AND RETAINED EARNINGS LIABILITIES Accounts and contracts payable Salaries payable TOTAL CURRENT LIABILITIES RETAINED EARNINGS Unreserved TOTAL LIABILITIES AND RETAINED EARNINGS -57- Exhibit D-13 1996 1995 $ 189385 $ 98 249 1343 2775 12 095 11 974 1083 403 1459 1 519 $ 205 365 $ 114 920 $ $ 13 625 17 45 17 13 670 205 348 10 1 250 $ 205 365 $ 114 920 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Exhibit D-14 STORMWATER MANAGEMENT UTILITY FUND COMPARATIVE STATEMENTS OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS YEARS ENDED DECEMBER 31, 1996 AND 1995 1996 1995 OPERATING REVENUE Charges for services $ 44491 $ 44 336 OPERATING EXPENSES Personal services 1359 10548 Supplies 6109 Repair and maintenance 729 Professional services 424 Contracted services 13 250 13 625 TOTAL OPERATING EXPENSES 15 033 31 011 OPERATING INCOME 29 458 13 325 NONOPERATING REVENUE . Interest on investments 4448 4647 INCOME BEFORE OPERATING TRANSFERS 33 906 17 972 OPERATING TRANSFERS FROM OTHER FUNDS 11 0 000 10000 OPERATING TRANSFERS TO OTHER FUNDS (39 808) NET INCOME 104 098 27 972 RETAINED EARNINGS, JANUARY 1 101 250 73 278 RETAINED EARNINGS, DECEMBER 31 $ 205 348 $ 10 1 250 -58- CITY OF SHOREWOOD, MINNESOTA Exhibit D-15 STORMW ATER MANAGEMENT UTILITY FUND COMPARATIVE STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 1996 AND 1995 1996 1995 CASH FLOWS FROM OPERATING ACTIVITIES Operating income $ 29 458 $ 13 325 Adjustments to reconcile operating income to net cash provided by operating activities: (Increase) decrease in assets - Accrued interest receivable 1432 (1208) Accounts receivable (121) 1352 Special assessments receivable (620 ) (731 ) Increase (decrease) in liabilities- Accounts payable (13 625) 13 625 Salaries payable (28) 45 CASH PROVIDED BY OPERATING ACTIVITIES 16496 26 408 CASH FLOWS FROM NONCAPIT AL FINANCING ACTIVITIES Operating transfers from other funds 110 000 10 000 Operating transfers to other funds (39 808) CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES 70 192 10 000 CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 4448 4647 INCREASE IN CASH AND CASH EQUIVALENTS 91 136 41 055 CASH AND CASH EQUIVALENTS, JANUARY I 98 249 57 194 CASH AND CASH EQUIVALENTS, DECEMBER 31 $ 189385 $ 98 249 -59- I I I I I I I I I I I I I I I I I' I I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Exhibit D-16 LIQUOR FUND COMPARATIVE BALANCE SHEETS DECEMBER 31, 1996 AND 1995 1996 1995 ASSETS CURRENT ASSETS Cash and temporary investments $ 52376 $ 95 150 Accrued interest receivable 2084 5356 Accounts receivable 1483 Due from other funds 34 411 Inventories, at cost 281 738 257447 Prepaid items 11 021 10 835 TOTAL CURRENT ASSETS 347219 404 682 FIXED ASSETS, AT COST 100 260 97 163 LESS ACCUMULATED DEPRECIATION (30210) (19834) TOTAL FIXED ASSETS 70 050 77 329 TOTAL ASSETS $ 417 269 $ 482 011 LIABILITIES AND RETAINED EARNINGS CURRENT LIABILITIES Accounts and contracts payable $ 73 768 $ 79 149 Salaries and compensated absences payable 7277 3824 Due to other funds 34 411 TOTAL CURRENT LIABILITIES 81 045 117384 RETAINED EARNINGS Unreserved 336 224 364 627 TOTAL LIABILITIES AND RETAINED EARNINGS $ 417 269 $ 482 011 -60- CITY OF SHOREWOOD, MINNESOTA Exhibit D-17 LIQUOR FUND COMPARATIVE STATEMENTS OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS YEARS ENDED DECEMBER 31, 1996 AND 1995 OPERATING REVENUE Sales Less cost of sales 1996 1995 $1 705040 $1473403 (1 362 986) (1165021 ) 342 054 . 308 382 179 397 176103 8370 9621 10376 9565 2381 2062 1923 2803 13 692 13 228 24239 25 269 113514 92 863 9159 9594 11 825 8698 374 876 349 806 (32 822) (41424 ) 5902 2840 (1483) 31 4419 2871 (28 403 ) (38 553) 170 000 (200 000) (28 403 ) (68553 ) 364 627 433 180 $ 336 224 $ 364 627 . TOTAL OPERATING REVENUE OPERATING EXPENSES Personal services Supplies Depreciation Professional services Contracted services Insurance Utilities Rent Advertising Other TOTAL OPERATING EXPENSES OPERATING LOSS NONOPERATING REVENUE (EXPENSES) Interest on investments Other income TOTAL NONOPERATING REVENUE (EXPENSES) LOSS BEFORE OPERATING TRANSFERS OPERATING TRANSFERS FROM OTHER FUNDS OPERATING TRANSFERS TO OTHER FUNDS NET LOSS RETAINED EARNINGS, JANUARY 1 RETAINED EARNINGS, DECEMBER 31 -61- I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Exhibit D-18 LIQUOR FUND COMPARATNESTATEMENTSOFCASHFLOWS YEARS ENDED DECEMBER 31, 1996 AND 1995 1996 1995 CASH FLOWS FROM OPERATING ACTIVITIES Operating loss $ (32 822) $ (41424) Other income related to operations (1483) 31 Adjustments to reconcile operating loss to net cash provided (used) by operating activities: Depreciation 10376 9565 (Increase) decrease in assets - Accrued interest receivable 3272 3648 Accounts receivable 1483 Due from other funds 34 411 (34411 ) Inventories (24291 ) (104032) Prepaid items (186) (4957) Increase (decrease) in liabilities - Accounts and contracts payable (5381 ) (734 ) Salaries and compensated absences payable 3453 1001 Deferred revenue (34411) 34411 CASH USED BY OPERATING ACTNITIES (45579) (136902) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Operating transfers from other funds 170 000 Operating transfers to other funds (200 000) CASH FLOWS USED BY NONCAPITAL FINANCING ACTIVITIES (30000) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of fIxed assets (3 097) (75 875) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 5902 2840 DECREASE IN CASH AND CASH EQUIVALENTS (42774 ) (239937) CASH AND CASH EQUIVALENTS, JANUARY I 95 150 335 087 CASH AND CASH EQUIVALENTS, DECEMBER 31 $ 52 376 $ 95 150 -62- $ 20 625 $ 19 980 $ 22 667 $ 25 428 2877 1026 1823 1438 34 411 23 502 21 006 24 490 6 I 277 97 686 88 296 51376 11 I 312 $ 121 188 $ 109302 $ 75 866 $ 172 5&9 CITY OF SHOREWOOD, MINNESOTA LIQUOR FUND COMBINING BALANCE SHEETS DECEMBER 31, 1996 AND 1995 Tonka Bay 1996 1995 ASSETS CURRENT ASSETS Cash and temporary investments Accrued interest receivable Accounts receivable Due from other funds Inventories, at cost Prepaid items $ 65 40 I 1012 $ 61490 2867 49 822 2722 42351 2594 109302 TOTAL CURRENT ASSETS FIXED ASSETS, AT COST LESS ACCUMULATED DEPRECIATION TOTAL FIXED ASSETS TOTAL ASSETS LIABILITIES AND RETAINED EARNINGS CURRENT LIABILITIES Accounts and contracts payable Salaries and compensated absences payable Due to other funds 11 8 957 2250 (19) 2231 $ 121 188 $ 109302 TOTAL CURRENT LIABILITIES RETAINED EARNINGS Unreserved TOTAL LIABILITIES AND RETAINED EARNINGS -63- Store I 1996 1995 $(101 675) $ 112 395 4095 14815 75 875 (14 824) 61051 $ 75 866 1483 98981 3667 104 131 75 513 (7 055) 68 458 $ 172 589 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I Exhibit D-19 Store II Total 1996 1995 1996 1995 $ 88 650 $ 33 660 $ 52 376 $ 95 150 1072 2489 2084 5356 1483 34 411 34 411 119 521 116 115 281 738 257447 4204 4 574 11 021 10 835 213 447 191249 347219 404 682 22 135 21 650 100260 97 163 (15367) (12779) (30210) (19834) 6768 8871 70 050 77 329 $ 220 215 $ 200120 $ 417 269 $ 482 011 $ 30476 $ 33741 $ 73768 $ 79 149 2577 1360 7277 3824 34 411 33 053 35 101 81 045 117384 187 162 165019 336 224 364 627 $ 220 215 $ 200120 $ 417 269 $ 482 011 -64- CITY OF SHOREWOOD, MINNESOTA LIQUOR FUND COMBINING SCHEDULES OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS YEARS ENDED DECEMBER 31, 1996 AND 1995 Tonka Bay Store I 1996 1995 1996 1995 OPERATING REVENUE Sales $ 473 557 $ 439104 $ 517 863 $ 373862 Less cost of good sold (375 769) 045540) (413 067) (294 916) GROSS PROFIT 97 788 93 564 104796 78 946 OPERATING EXPENSES Personal services 56 090 57 128 59 976 59 233 Supplies 1445 1050 3524 2828 Depreciation 19 7769 7055 Professional services 877 I OIl 752 40 Contracted services I 186 1440 320 583 Insurance 3779 3676 4492 3185 Utilities 7590 7592 8647 8973 Rent 13 843 13 258 70 954 48 821 Advertising 2396 2606 3682 3396 Other 3518 2421 3673 3534 TOTAL OPERATING EXPENSES 90 743 90 182 163 789 137 648 OPERATING INCOME (LOSS) 7045 3382 (58 993 ) (58702) NONOPERATING REVENUE (EXPENSES) Interest on investments 2664 509 14 Other income (expense) (319 ) 2 (943 ) TOTAL NONOPERATING REVENUE (EXPENSES) 2 345 5Il (943 ) 14 INCOME (LOSS) BEFORE TRANSFERS 9390 3893 (59936) (58688) OPERATING TRANSFERS FROM OTHER FUNDS 170 000 OPERATING TRANSFERS TO OTHER FUNDS (150000) NET INCOME (LOSS) 9390 (146 107) (59936) III 312 RETAINED EARNINGS, JANUARY I 88 296 234 403 III 312 RETAINED EARNINGS, DECEMBER 31 $ 97 686 $ 88 296 $ 51 376 $ III 312 -65- I I I I I I I I I I I I I I I I I I I I I Exhibit D-20 I Store II Total 1996 1995 1996 1995 I $ 713 620 $ 660437 $ 1 705 040 $ 1 473 403 (574 150) (524 565) (1,362986) (1165021) 139470 135 872 342 054 308 382 I 63331 59 742 179 397 176103 3401 5743 8370 9621 I 2588 2510 10 376 9565 752 1011 2381 2062 417 780 1923 2803 5421 6367 13 692 13 228 I 8002 8704 24 239 25 269 28 717 30 784 113 514 92 863 3081 3592 9159 9594 I 4634 2 743 11 825 8 698 120344 121 976 374 876 349 806 I 19 126 13 896 (32822) (41424 ) 3238 2317 5902 2840 I (221 ) 29 (1483) 31 3017 2 346 4419 2871 I 22 143 16242 (28 403 ) (38 553) 170 000 I (50000) (200 000) 22 143 (33758) (28 403) (68 553) I 165019 198777 364 627 433 180 I $ 187 162 $ 165019 $ 336 224 $ 364 627 I I I I I -66- CITY OF SHOREWOOD, MINNESOTA LIQUOR FUND COMBINING SCHEDULES OF CASH FLOWS YEARS ENDED DECEMBER 31, 1996 AND 1995 Tonka Bay Store I 1996 1995 1996 1995 CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) $ 7045 $ 3382 $ (58 993 ) $ (58 702) Other income (expense) related to operations (319) 2 (943 ) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation 19 7769 7055 (Increase) decrease in assets - Accrued interest receivable 1855 3958 (1483) Accounts receivable 1483 Due from other funds Inventory (7471 ) 4712 (13414) (98981 ) Prepaid items (128) (2 594 ) (428) (3 667) Increase (decrease) in liabilities - Accounts and contracts payable 645 (28366) (2 761) 25 428 Salaries and compensated absences payable 1851 2 385 1438 Deferred revenue (34411 ) 34 411 CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES 3497 (18904) (101 313) (94 ~OI) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Operating transfers from other funds 170 000 Operating transfers to other funds (150000) CASH FLOWS PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES (150000) 170 000 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of fixed assets (2 250) (362 ) (75513) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 2664 509 14 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3911 (168395) (101 675) CASH AND CASH EQUIVALENTS, JANUARY 1 61 490 229 885 CASH AND CASH EQUIVALENTS, DECEMBER 31 $ 65401 $ 61 490 $ (101675) $ -67- I I I I I I I I I I I I I I I I I I I 'I I I I I I I I I I I , I I I I I I I I CITY OF SHO~WOOD,MINNES()TA Agency funds <lfe e~tablished to account for assets held by the Cit}j$ an agent for others. Deferred Compensation. ~u.nd- This fund .is u~d;toa~count for e.~loyeepayroU. deferments and -the related habiltty, that are deposIted WIth 9utsldecompames In accordance -.with tIre provisions ofItttemal Revenue C(Xie Section 457. I AGENCY FUNDS I I I I I I I I ;1 I I I I I I I I I I \ ".\. .; CITYJ()F SHOREW()OD,'MINNESOTA \(;&NERAL FIXED ASSETS ACCOUNT GROUP General fixed assets are those fixed assets of a govertlIIlental jprisdiction Which are n6t accounted for in an enterprise fund.. To be classified as a fIXed asset in this category, a specific piece of property must meet three attributes: / 1 . Tangible nature 2. A life longer than the currenffi$cal year 3. A significant value . I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA GENERAL FIXED ASSETS ACCOUNT GROUP COMPARATIVE SCHEDULES OF GENERAL FIXED ASSETS - BY SOURCE DECEMBER 31, 1996 AND 1995 1996 GENERAL FIXED ASSETS Land Buildings and structures Improvements other than buildings Furniture and equipment $ 456 826 I 322 073 1314258 1191296 TOTAL GENERAL FIXED ASSETS $ 4 284 453 INVESTMENT IN GENERAL FIXED ASSETS General fund Capital projects funds $ I 082 870 3 201 583 TOTAL INVESTMENT IN GENERAL FIXED ASSETS $ 4 284 453 -70- Exhibit F-I 1995 $ 456 826 I 322 073 I 268 345 I 076774 $ 4 124 018 $ I 076 774 3 047 244 $ 4 124 018 CITY OF SHOREWOOD, MINNESOTA GENERAL FIXED ASSETS ACCOUNT GROUP SCHEDULE OF GENERAL FIXED ASSETS - BY FUNCTION AND ACTIVITY DECEMBER 31, 1996 -71- Exhibit F-2 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA GENERAL FIXED ASSETS ACCOUNT GROUP SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS - BY FUNCTION YEAR ENDED DECEMBER 31, 1996 Exhibit F-3 General General Fixed Assets Fixed Assets January 1 Additions Deductions December 31 General government $ 664 938 $ 20961 $ 14865 $ 671 034 Public works 2 135 077 193 839 83 995 2244921 Culture and recreation 1 324 OOJ 44 495 1 368 498 TOTAL GENERAL FIXED ASSETS $ 4124018 $ 259 295 $ 98 860 $ 4 284 453 -72- I I I I I I I I I /1 I I I I I I I I I CITY.QF SHOREWQOD, MINNESOTA . . /- -.-., GENE.. RAL.LONG-TERM DEBT ACCO. U.. NT GROUP '. . --'f/ J' . .. General obligation bondsandpther f<inns of long-term debt supported bY_gc(neralrevenues are obligations of a govemmental0\l1lit as a whole and not i~ individual/{;onstituettt funds. The amount of unmature4 long--~rm indebtedness w~ch is backed by the full faith and credit of the government (exclU<fing enterprise fund debt) i~recorded and accounted for in a separate self-balancing~ount group titled the "General Long- Te1lD, Debt 1\ccOOntGroup." Also, this debt group indudes certaip liabilities not expected to be liquidareq. with expendable available financi;il resources, \ . I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA GENERAL LONG-TERM DEBT ACCOUNT GROUP COMPARATIVE STATEMENTS OF GENERAL LONG-TERM DEBT DECEMBER 31, 1996 AND 1995 1996 AMOUNT AVAILABLE FOR DEBT SERVICE Debt service funds $ 503 635 AMOUNTS TO BE PROVIDED Future tax levies, assessments and tax increments 1 459 209 TOTAL AMOUNT AVAILABLE AND TO BE PROVIDED $ 1 962 844 GENERAL LONG- TERM DEBT PAYABLE Compensated absences payable Lease purchase payable General obligation special assessment bonds Tax increment revenue bonds $ 29 344 311 000 822 500 800 000 TOTAL GENERAL LONG-TERM DEBT PAYABLE $ 1 962 844 -73- Exhibit G-l 1995 $ 1419732 1 III 631 $ 2 531 363 $ 21 863 I 589 500 920 000 $ 2 531 363 SPECIAL ASSESSMENT BONDS G.O. Improvement bonds of 1991 G.O. Improvement bonds of 1991 G.O. Improvement bonds of 1993 TOTAL TAX INCREMENT REVENUE BONDS Tax increment revenue bonds of 1991 REVENUE BONDS G.O. Water Revenue bonds G.O. Water Revenue bonds TOTAL TOTAL CITY OF SHOREWOOD, MINNESOTA SCHEDULE OF BONDS PAYABLE DECEMBER 31, 1996 Interest Rates 5.20-5.85 8.00 3.75-4.80 9.00 3.90-5.50 4.00-5.40 -74- Issue Date 11-01-91 9-01-91 12-01-93 5-01-91 11-01-95 11-01-96 Final Maturity Date 2-01-02 2-01-97 2-01-04 2-01-00 2-01-11 2-01-12 I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA SCHEDULE OF DEBT SERVICE REQUIREMENTS DECEMBER 31, 1996 ~ 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total * Total Bonds Principal Interest $ 467 500 520 000 515000 520 000 310000 300 000 205 000 210 000 180 000 190 000 185000 185 000 185 000 190 000 180 000 60 000 $ 295194 333 492 343 087 355 636 III 515 96 553 84 334 74570 65 244 56 240 46 945 37 603 28 040 18 115 8135 1620 $4 402 500 $1 956323 Tax increment collections will be remitted to the bond holders. Bonds will periodically be called in numerical sequence and redeemed at their accredited value as tax increment collections allow. -76- I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I Exhibit I-I G.O. Special Tax increment G.O. Water Assessment Bonds Revevue Bonds* Revenue Bonds Principal Interest Pri . l' Interest Principal Interest nClpa .. $ 142500 $ 39 134 $ 200 000 $ 136 869 $ 125 000 $ 119 191 135 000 32 250 200 000 167,859 185000 133 383 135 000 25 443 200 000 201 71 0 180 000 115 934 130 000 18588 200 000 229 028 190 000 108 020 125 000 11 776 185 000 99 739 115 000 5139 185 000 91414 20 000 1430 185 000 82 904 20 000 480 190 000 74 090 180 000 65 244 190 000 56 240 185 000 46 945 185000 37603 185000 28 040 190 000 18 115 180 000 8135 60 000 1620 $ 822 500 $ 134 240 $ 800 000 $ 735 466 $2 780 000 $1086617 -77- I I I I I I I I I I I I I I I I I I I Fiscal Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 CITY OF SHOREWOOD, MINNESOTA Table 1 GENERAL FUND EXPENDITURES AND OTHER USES BY FUNCTION LAST TEN FISCAL YEARS Total General Public Public Culture and Misc/ Expenditures Government Safety Works Recreation Transfers $1651927 $ 569 098 $481 603 $ 532 902 $ 68 324 $ 1 898 594 646 923 523 717 669 990 57 964 1 794 684 610659 503 542 570 981 83 502 26 000 2065011 616929 532658 799 543 115 881 2241781 665 152 548 343 375 406 142 168 510712 2301 950 654 085 571 077 434015 116 173 526 600 2 184 260 668 410 580 153 436 224 119 473 380 000 2 536 943 755 097 618047 433 699 128 600 601 500 2326231 723 098 650 703 432 759 115 446 404 225 2479 151 782 466 689 904 472 607 109 988 424 186 -78- CITY OF SHOREWOOD, MINNESOTA Table 2 GENERAL FUND REVENUE AND OTHER SOURCES BY SOURCE LAST TEN FISCAL YEARS Total General Licenses Fiscal General Fund Property and Inter- Mise! Year Revenues Taxes Permits Governmental Fines Transfers 1987 $1 837056 $ 993 086 $ 282 100 $ 364 022 $ 103785 $ ,94 063 1988 1 984 148 1 087 099 330 408 368 288 91 385 106 968 1989 1 976961 1118886 207 129 405 022 105 244 140680 1990 2 367 995 1 437 140 203828 273 780 124 234 329013 1991 2 237 115 1627874 168 560 153 681 101200 185 800 1992 2 307 389 1 576 158 175 123 283 689 89 960 182 459 1993 2429910 1 515633 247 557 426 102 70 135 170 483 1994 2531339 1 487 398 256243 441 040 73 998 272 660 1995 2 378009 1 489 822 184857 440 720 68 765 193845 1996 2 457 755 1 569 653 205 459 427 468 80 826 174349 -79- I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Table 3 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (1) Percentage Collection Percentage Collection of Total Fiscal Total of Current of Levy of Prior Total Collections Year Levv Year's Levv Collected Year's Levv Collections to Levv 1987 $1 254420 $1 211 819 96.60% $ 32 265 $1244084 99.18% 1988 1 293 689 1 236 536 95.58 27 898 1 264 434 97.74 1989 1 300 881 1 249 332 96.04 46 405 1 295 737 99.61 1990 1 684 576 1 602 385 95.12 48 448 1 650 833 98.00 1991 1 856 988 *1793402 96.58 41 801 1 835 203 98.83 1992 1 864 577 1 819238 97.57 55917 1 875 155 100.57 1993 1 932 454 1 908 428 98.76 51464 1 959 892 101.42 1994 1 518735 I 505212 99.11 13 886 1519098 100.02 1995 1518 108 I 501 389 98.90 13 999 1 515 388 99.82 1996 1 598713 1 577 353 98.66 16 946 1 594 299 99.72 (1) Includes state paid property tax credits * Includes $66,971 state aid reduction from the Homestead and Agricultural Credit Aid. Prior to 1994, tax levies included the amount of Homestead and Agriculture Credit Aid (HACA) to be received from the State. Legislation passed in 1993 required that, beginning with taxes levied for collection in 1994, tax levies shall be reported net of the HACA received from the state. As a result, the taxes levied more accurately reflect the amount of taxation by the local government. -80- CITY OF SHOREWOOD, MINNESOTA ASSESSED VALVA nON, TAX LEVIES AND MILL RATES (shown by year of tax collectibility) 1996 1995 1994 1993 (1) & (2) (1) & (2) (1) & (2) (1) & (2) Assessed valuationtrax capacity $9115960 $8 045 468 $7396 104 $7092917 Contribution to fiscal disparities pool (178279) (185232) (205 973) (227 686) Receivable from fiscal disparities pool 332 110 310 337 375 309 396081 Tax increment (166094 ) (22 195) (317) Taxable valuationtrotal tax capacity $9 103 697 $8 148378 $7565 123 $7261312 Tax levies General Debt service (3) $1573930 $1 491 990 $1 491 888 $1909253 24 783 26 118 26 847 23 201 $1 598713 $1518108 $1518735 $1932454 Total Mill ratesrrax Capacity Rate General Debt service 18.256Rate .215 19.655Rate .249 20.638Rate .159 17.252Rate .179 Total 19.904Rate 20.797Rate 17.431Rate 18.471Rate (1) As a result of 1988 legislation assessed valuation has been replaced by tax capacity valuations. It is calculated based upon a state mandated computation from the estimated market value. The term, mill rate, has been replaced with the term, tax capacity rate, as a result of the 1988 legislation. 1986-1988 information is stated in terms of assessed valuation and mill rates. 1989-1995 information is stated in terms of tax capacity and tax capacity rates. (2) The debt service levy includes $8,508 for 1996, $8,568 for 1995, $8,022 for 1994, $8,526 for 1993 and $8,414 for 1992, levied for the retirement of Storm Sewer District No.2 improvement bonds. Storm Sewer District No.2 was established by the City of Shorewood in 1991. This portion of the debt service tax levy is only levied within Storm Sewer District No. 2 to retire the $31,000 bond issue used to fmance the improvements within the District and is not reflected in the tax rates above. Table 5 reports the tax rate of this District separately. (3) Prior to 1994, tax levies included the amount of Homestead and Agriculture Credit Aid (HACA) to be received from the State. Legislation passed in 1993 required that, beginning with taxes levied for collection in 1994, tax levies shall be reported net of the HACA received from the state. As a result, the taxes levied more accurately reflect the amount of taxation by the local government. -81- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA PROPERTY TAX MILL RATESrrAX CAPACITY RATES - DIRECT AND OVERLAPPING GOVERNMENTS (pER $1000 OF ASSESSED VALUE FOR YEARS 1987-1988 AND TAX CAPACITY IN 1989-1996) Year (1) Taxes School District Watershed District Payable City County No. 276 No. 277 No.3 No.4 Miscellaneous 1987 23.643 29.356 62.968 54.982 .133 .474 5.459 1988 22.825 31.667 65.440 58.550 .092 .570 5.988 1989 16.509 (2) 27.101 59.285 49.139 .075 .445 5.387 1990 20.299 (2) 27.916 53.658 43.434 .120 .436 5.121 1991 20.454 (2) 30.114 56.401 46.828 .131 .449 6.855 1992 20.164 (2) 34.327 64.530 56.643 .142 .490 5.481 1993 20.797 (2) 35.839 75.275 60.069 .668 .781 5.532 1994 19.904 (2) 37.441 77.323 67.785 .334 .707 5.724 1995 18.471 (2) 37.454 76.139 66.441 2.332 .762 5.847 1996 17.431 (2) 37.270 76.340 62.418(3) 1.533 .864 6.390 (1) Includes vocational school (2) Information for 1989-1996 is stated in terms of tax capacity rates due to 1988 legislative changes as explained in Table 4. (3) Includes market value levy of .107. -83- I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I Table 5 Totals ",..c School District No. 276 School Storm Watershed Dist. No. 277, Sewer Watershed Watershed District No.4 Watershed District District District Storm Sewer District No.2 No.3 No.4 District No.2 No.3 121.559 121.900 121.900 113.573 126.012 126.490 126.490 119.122 108.357 108.727 108.727 98.211 107.114 107.430 107.430 96.890 113.955 114.273 114.273 104.382 17.792 124.649 124.997 142.789 116.762 13.437 138.111 138.224 151.661 122.905 15.495 140.726 141.099 156.594 131.188 15.353 140.243 138.673 154.026 130.545 13.956 138.964 138.295 152.251 125.042 -84- CITY OF SHOREWOOD, MINNESOTA PRINCIPAL TAXPAYERS DECEMBER 31, 1996 Table 6 Percentage 1996 Tax of Total Tax,payer Type of Business Capacity Tax Capacity Northern States Power Company Utility $ 123 639 1.36% Ryan Construction Company Shopping Center 75 118 .83 Minnetonka Country Club Country Club 73 375 .81 Minnegasco Utility 65 325 .72 Two S Properties Commercial 41 663 .46 MFT, Inc. Residential 32 100 .35 Waterford Partners, LLC Commercial 29 169 .32 Individual Residential 23 600 .26 Individual Residential 22 380 .25 Fina Serve, Inc. Commercial 22 408 ~ Total $ 508 777 5.61 -85- I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I Fiscal Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 CITY OF SHOREWOOD, MINNESOTA Table 7 SPECIAL ASSESSMENT LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (1) Percentage Collection Percentage Collection of Total Total of Current of Levy of Prior Total Collections Levy Year's Levy Collected Year's Levy Collections to Levy $ 551886 $ 539633 97.78% $ 32 122 $ 571 755 103.60% 644 367 637 874 98.99 33 724 671 598 104.23 500 116 497 733 99.52 66916 564 649 112.90 457 384 444 080 97.09 53 452 497 532 108.78 365 577 345 886 94.61 28 677 374 563 102.46 362 352 317 103 87.51 19461 336 564 92.88 231 800 222 842 96.14 47 372 270214 116.57 198729 185061 93.12 6025 191 086 96.15 170 157 159018 93.45 12 896 171 914 101.03 233 219 197667 84.76 6660 204 327 87.61 -86- CITY OF SHOREWOOD, MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN DECEMBER 31, 1996 Table 8 Market Value $ 517 983900 Debt Limit: 2.0% of market value (Note A) Amount of Debt Applicable to Debt Limit: $ 10359678 Total Bonded Debt Less, (Note B) Special Assessment Bonds General Obligation Water Revenue Bonds Tax Increment Revenue Bonds $ 4 402 500 (822 500) (2 780 000) (800 000) Total Debt Applicable to Debt Limit Legal Debt Margin $ to 359 678 Note (A): M.S.A. Section 475.53 (Limit on Net Debt) "Subdivision l. Generally. Except as otherwise provided in sections 475.51 to 475.75, no municipality, except a school district or a city of the first class, shall incur or be subject to a net debt in excess of2.0 percent of the market value of taxable property in the municipality." Note (B): M.S.A. Section 162.18 (Bond: Municipal State Aid) "Subdivision 2. Not included in net debt of municipality for purpose of any statutory or charter limitation. Obligations issued here under may be authorized by resolution of the governing body without authorization by the electors, and shall not be included in the net debt of the municipality for the purpose of any statutory or charter limitation on indebtedness." M.S.A. Section 475.51 (Defmitions:) "Subdivision 4. 'Net Debt' means the amount remaining after deducting from its gross debt the aggregate of the principal of the following: (I) (2) (3) (4) (5) (6) (7) Obligations issued for improvements which are payable wholly or partly from the proceeds of special assessments levied upon property specially benefited thereby, including those which are general obligations of the municipality issuing them, if the municipality is entitled to reimbursement in whole or in part from the proceeds of the special assessments. Warrants or orders having no defmite or fixed maturity. Obligations payable wholly from the income from revenue-producing conveniences. Obligations issued to create or maintain a permanent improvement revolving fund. Obligations issued for the acquisition and betterment of public water works systems, and public lighting, heating or power systems and of any combination thereof, or for any other public convenience from which a revenue is or may be derived. Amount of all money and the face value of all securities held as a sinking fund for the extinguishment of obligations other than those deductible under this subdivision. All other obligations, which under the provisions of the law authorizing their issuance, are not to be included in computing the net debt of the municipality." * After contribution and distribution from "fiscal disparity" legislation; Minnesota laws 1971, Extra Session, Chapter 24. -87- I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA RATIO OF NET BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA Table 9 Fiscal fim: (1) Assessed Valuerrax Capacity Ratio of Net Bonded Debt to Assessed Values/ Tax Capacity Net Bonded Debt Per Capita Less Amount Reserved for Debt Service Estimated Population (2) Gross Bonded Debt Net Bonded Debt 1987 1988 $53 059674 56 589 857 4921 5094 $4 975 000 4 530 000 $ 2 044 326 2 688 009 $2 930 674 I 841 991 .0552: 1 .0325: 1 595.54 361.60 1989 5815 7 833 998 2 990 000 1510 303 1479697 .1889:1 254.46 1990 5917 7 197406 2 720 000 1 902 837 817163 .1135: 1 138.10 1991 6000 8 070 339 3411 000 2311 859 1 099 141 .1362: 1 183.19 1992 6135 7 859 115 2 496 000 1 742 742 753 258 .0958: 1 122.78 1993 6322 7261312 2 546 500 1999 197 547 303 .0754: 1 86.57 1994 6430 7 565 123 1 850 500 1 485 579 364 921 .0482: 1 56.75 1995 6614 8 148378 3 524 500 1419732 2 104768 .2583:1 318.17 1996 6794 9103697 3 602 500 503 635 3 098 865 .3404:1 456.12 (1) As a result of 1988 legislation, assessed valuation has been replaced by tax capacity valuations. It is calculated based upon a state mandated computation from the estimated market value. The term, mill rate, has been replaced with the term, tax capacity rate, as a result of the 1988 legislation. 1986-1988 information is stated in terms of assessed valuation and mill rates. 1989-1996 information is stated in terms of tax capacity and tax capacity rates. (2) Gross bonded debt amounts in this Table are general obligation special assessment bonds and revenue bonds whose principal source of funding will be sources other than general property taxes. The $920,000 Tax Increment Revenue Bonds are not included in the gross bonded debt as they are not backed by the full faith and credit of the City. -88- CITY OF SHOREWOOD, MINNESOTA Table 10 RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT (1) TO TOTAL GENERAL EXPENDITURES* Percent of Debt Service Total Total General to General Year Principal Interest Debt Service Ex,penditures* EXJ;)enditures 1987 $ 1 840 000 (2) $ 273 709 $ 2 113 709 $ 1651 927 127.95% 1988 435 000 274 636 709 636 1 898 594 37.38 1989 2 625 000 (3) 253 113 2878115 1 794 684 160.37 1990 260 000 175098 435 098 2065011 21.07 1991 290 000 173 495 463 495 2241 781 20.68 1992 905 000 167 163 1 072 163 2301950 46.58 1993 264 500 141 889 406389 2184260 18.61 1994 681 000 (4) 120862 801 862 2 536 943 31.61 1995 231 000 99 823 330 823 2 326 231 14.22 1996 767000 (5) 72 461 839461 2479151 33.86 (1) Excludes G.O. Bonds reported in Enterprise Funds and the $920,000 Tax Increment Revenue Bonds are not included in the gross bonded debt as they are not backed by the full faith and credit of the City. (2) (3) (4) (5) Principal includes bonds refunded in 1987 Principal included bonds defeased in 1989 Principal includes bonds called in 1994 Principal included bonds called in 1996 * Includes General Fund only -89- I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I' CITY OF SHOREWOOD, MINNESOTA COMPUTATION OF DIRECT AND OVERLAPPING DEBT DECEMBER 31, 1996 Table 11 City of Percent of Shorewood Net Debt Debt Applicable Share Total Debt Outstanding to City of Debt Direct Debt* City of Shorewood $ 3 602 500 $ 3 098 865 100.00% $ 3 098 865 Overlapping Debt Hennepin County 190955000 60 904 428 .97 588 644 Hennepin Suburban Park District 16460000 11 615904 1.31 152 692 School District #276 61240000 10470300 22.66 2 372 242 School District #277 13 700 000 12428521 2.10 260514 Metropolitan Council 384 835 000 61080046 ~ 327 940 Total Overlapping Debt 667 190 000 156499 199 ~ 3 702 032 Total Direct and Overlapping Debt $670 792 500 $159598 064 4.26% $ 6 800 897 * Direct debt includes all debt backed by the full faith and credit of the City even though it will be financed in part by special assessments or enterprise fund revenues. Tax increment revenue bonds supported only by the tax increments generated within the TIF District are excluded from this computation consistent with Table 9. -90- I I I I I I I I I I I I I I I I I I I CITY OF SHOREWOOD, MINNESOTA Table 12 REVENUE BOND COVERAGE LAST TEN FISCAL YEARS Net Ratio of Net Fiscal Gross (1) Revenue Debt Service Revenue to Year Revenue Expenses Available Principal Interest Total Debt Service 1987 $ 108043 $ 81 642 $ 26401 $ 10 000 $ 9578 $ 19578 1.349 to 1 1988 158474 135 897 22 577 10 000 8834 18 834 1.199 to 1 1989 176719 11 0 987 65 732 10 000 8125 18 125 3.627 to 1 1990 192 682 116289 76 393 10000 7293 17 293 4.418 to 1 1991 172 569 126614 45 955 10000 6493 16493 2.786 to 1 1992 199 891 125714 74 177 10 000 5823 15 823 4.688 to 1 1993 172 624 139490 33 134 10 000 4860 14860 2.230 to 1 1994 262 892 159179 103 173 15 000 4035 19035 5.449 to 1 1995 198566 166970 31 596 15 000 3486 18486 1.710 to 1 1996 272 678 170 485 102 193 15 000 74473 89 473 1.142 to 1 (1) Excluding depreciation and interest on bonds -91- CITY OF SHOREWOOD, MINNESOTA PROPERTY VALUE, CONSTRUCTION AND BANK DEPOSITS LAST TEN FISCAL YEARS (1) Commercial (1) Construction Residential Construction Fiscal Number Year Value of Units Value 1987 $ 163 $ 23 397 136 1988 401 004 157 29 040 667 1989 89 16949 136 1990 20 000 82 16252990 1991 69 14044 120 1992 55 10899687 1993 102 17941776 1994 960 000 86 16530925 1995 2 030 000 40 10 167210 1996 1 350 000 37 9 393 436 Sources (1) City Planning and Inspection Department (2) County Assessor's Office (3) 1st State Bank of Excelsior (Bank deposits are not shown for years 1987-1995 as no banks are located within the City limits during this period.) -92- I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I (2) Property Value Commercial Residential Total $ 10 317 900 $ 197382800 $ 207 700 700 11 167900 217337000 228 504 900 11 351 300 253 363 500 264714800 11 820 800 299 565 500 311 386 300 11 997 100 341 843200 353 840 300 12081 200 370 575 700 382656900 11 307 900 391 057000 402 364 900 11 338 700 413 780300 425 119 000 9 793 000 453616 100 463 409 100 10562200 517983900 528 546 100 Table 13 (3) Bank Deposits $ 40 895 000 -93- I I I I I I I I I I I I I I I I I I I Year of incorporation Form of government Fiscal year begins Area of city Population 1995 Estimated 1990 Census 1980 Census 1970 Census Miles of streets and alleys City streets Municipal state aid streets County roads State highway Sewer Lift stations Sewer rates - residential Miles of sewer lines Number of street lights Building permits issued in 1996 Number of permits Value CITY OF SHOREWOOD, MINNESOTA MISCELLANEOUS STATISTICS DECEMBER 31, 1996 Table 14 1956 Council-Administrator Adopted May 14, 1956 January 1 6.0 Square Miles 6,794 5,917 4,646 4,223 38.1 9.3 1.7 2.7 15 $65.00/quarter 55.7 174 610 $16,288,483 Fire protection: Contracted services with Mound and Excelsior Police protection: Contracted services with South Lake Minnetonka Police Department Parks Number Acres Water Number of connections Average daily consumption Miles of watermain Daily capacity Number of fire hydrants Water rate per thousand gallons Employees Regular Part-time/seasonal Total Elections Registered voters last election Number of votes cast last election Percentage of registered voters voting 5 95.8 985 267,800 gallons 14.7 4,680,000 gallons 165 $1.4511000 gallons 20 2U ~ 5,066 4,262 84.1% -94-