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Home My WebLink About2003 Audit Review April 6, 2004 /'N Cit y of Oak Park Heights Minnesota 2003 Audit Review April 6, 2004 e�., penssi sliodelj Annual Financial Report ♦ The financial statements are the responsibility of management ♦ Independent auditor reports on the fair presentation of the financial statements ♦ "Clean opinion" on the 2003 financial statements ♦ Implementation of GASB 34 required for 2004 financial report Minnesota Legal Compliance Report ♦ Required by Minnesota Statute §6.65 ♦ OSA established a task force to develop audit guide for legal compliance ♦ Audit guide covers six categories 1) contracting and bidding 2) deposits and investments 3) conflicts of interest 4) public indebtedness 5) claims and disbursement 6) other miscellaneous provisions ♦ No findings for 2003 jr Report on Internal Control ♦ Required by audit standards ♦ Based on inquiries and observations ♦ Identifies reportable conditions ♦ Reportable condition defined as "significant deficiencies in the design or operation of the internal control over financial reporting that would adversely affect the City's ability to record, process, summarize, and report financial data" ♦ No reportable conditions noted ------------ Management Letter +All Funds Summary: All Funds Financial Summary - 2003 Increase (Decrease) in Fund Balance/ Revenue Expenditures Fund Balance) Fund and Other and Other Transfers Retained Equity Fund Sources Uses (Net) Earnings 12/31/2003 General $2,626,000 $2,063,000 ($198,000) $365,000 $1,694,000 Special Revenue Funds: Forfeiture and Seizure 8,000 5,000 - 3,000 32,000 Economic Development 2,000 1,000 - 1,000 51,000 Debt Service Funds: Bonds of 1998 133,000 208,000 84,400 9,400 118,400 Bonds of 2001 100,000 136,000 - (36,000) 111,000 Bonds of 2002 10,000 146,000 165,000 29,000 361,000 Capital Project Funds: Capital Revolving 95,000 16,000 - 79,000 424,000 Budgeted Projects and Equipment Revo 22,000 71,000 119,000 70,000 244,000 SA / Valvoline Oil 400 - - 400 2,800 Park Development 30,000 44,000 - (14,000) 315,000 Street Reconstruction 12,000 - - 12,000 394,000 Renewal and Replacement 64,000 61,000 149,000 152,000 2,191,000 Brekke Park Memorial - - - 200 McKean Square 944,000 944,000 - - - Kem Center 100 300 (4,400) (4,600) Oak Park Station - Phase I 9,000 9,000 - - - Santiary Sewer Sewer Connection 173,000 4,000 (70,000) 99,000 406,000 Water Connection 257,000 - (149,000) 108,000 253,000 Storm Sewer Connection 429,000 117,000 (26,000) 286,000 930,000 Enterprise Funds: Water $438,000 $237,000 ($83,000) $118,000 743,000 Sanitary Sewer 610,000 447,000 (76,000) 87,000 411,000 Sanitation 98,000 181,000 89,000 6,000 (53,000) Storm Sewer 69,000 32,000 - 37,000 56,000 Total $6,129,500 $4,722,300 $0 $1,407,200 $8,684,400 tgv Management Letter ♦ Summary: General Fund: • Fund balance increased $365,000 during 2003. Budget Actual Variance Revenue/transfers in $2,501,724 $2,625,823 $124,099 Expenditures/transfers out 2,399,180 2,260,441 138,739 Increase in fund balance $102,544 $365,382 $262,838 • Fund balance at December 31, 2003 was $1,694,000 01, Management Letter • Fund balance at December 31, 2003 was sufficient to fulfill all city policy reserve requirements. General Fund Balance December 31, 2002 2003 Designated for: Cash flow $973,000 $996,000 Contingent employee benefits 122,365 128,458 General contingency 233,864 368,000 Subtotal - designated 1,329,229 1,492,458 Undesignated - 202,153 Total fund balance $1,329,229 $1,694,611 Management Letter General Fund Monthly Cash Balances $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 ' 000 decrease $800,000 S%60WO,000 5400,000 $200,000 $0 111r2004 1/31/2004 2/28/2004 3/3V2004 4,30/2004 5/31/2004 6/30/2004 7/31/2004 9131/2004 9/30t2004 10/31/2004 11/30/2004 12/3120041 Ims.i.1 $1,142,000 [$1,227,000 1$1,062,000 I $906 $ .000 $756,000 $609,000 $456,000 $1,281,000 $1,209,000 $1,062000 1,070 000 $985 51,665,000 r � Management Letter Fund Balance $1,800,000 $1,600,000 $1,400,000 t Actual Fund Balance $1,200,000 Desired Fund Balance $1,000,000 $800,000 $600,000 ' 1996 1997 1998 1999 2000 2001 2002 2003 b, jk Management Letter ♦ Summary: — Special Revenue Funds,: • Economic Development fund — fund balance of $51,000 at December 31, 2003. — If sale of Bell property occurs, the proceeds should be receipted in the Capital Revolving Fund • Forfeiture and Seizure Fund — fund balance of $32,000 at December 31, 2003 - 3� • y ; , d .,. 4 3 4t b r -- Management Letter — Debt Service Funds: • Three bond issues outstanding totaling $1.86 million. • Water and Sewer Bonds of 2002 — this bond issue is funded by transfers from the Connection Charge Fund. — Existing connection charges is sufficient to fund debt service requirements A d ✓fi Management Letter — Debt Service Funds: • Improvement Bonds of 2001- - this bond issue is projected to have a surplus of $83,000 at final bond maturity (2005). • Improvement Bonds of 1998 - - this bond issue matures in 2014. Debt service is funded by assessments and connection charges. — Existing connection charges should be sufficient to fund debt service requirements. Management Letter — Capital Proiect Funds,: • Capital Revolving Fund — fund balance increased by $79,000 during the year. — Assets of this fund at December 31, 2003 consisted of: *cash $424,000 *assessments 6,000 *total $430,000 `n , ak a - p , r • <.;, ,o Management Letter — Capital Proiect Funds: • Budgeted Projects and Equipment Revolving Fund Balance Balance Purpose 12/31/2002 Revenues Expenditures 12/31/2003 Sealcoat/crack seal $13,325 $35,000 $ - $48,325 Recreation: Park building 80,000 - - 80,000 Other 19,474 5,000 - 24,474 Computers - 28,000 (10,008) 17,992 Vehicles: Police 679 38,188 (28,390) 10,477 Public works 15,375 9,900 (9,718) 15,557 Furniture and equipment: Community and development 365 - - 365 Building inspections 500 - - 500 Police 2,256 2,605 (1,659) 3,202 Streets 200 - - 200 Trees 33,900 5,750 (273) 39,377 Parks machinery and equipment - 10,975 (20,975) (10,000) Unallocated 8,181 5,874 - 14,055 Totals $174,255 $141,292 ($71,023) $244,524 'R^ »+'�f9.- y T " y _,.yN -•� - '+ S 's • • may - 4 �. 1,�1{ - 3�. °' ' t 'o-'h w Vi Management Letter — Capital Proiect Funds: • Connection Charge Funds - a summary is as follows: Sanitary Water Storm Sewer Works Water Total Fund balance - December 31, 2003 $405,985 $253,542 $930,231 $1,589,758 Future connection charges 239,800 417,530 528,750 1,186,080 Subtotal 645,785 671,072 1,458,981 2,775,838 Debt service commitments: Bonds of 2002 (5,000) (50,000) - (55,000) Bonds of 1998 (244,925) (84,875) (155,200) (485,000) Subtotal 395,860 536,197 1,303,781 2,235,838 Available for new well - (536,197) - (536,197) Uncommitted $395,860 $0 $1,303,781 $1,699,641 t N < _ n Management Letter — Capital Pro Funds: • Estimated Future Connection Charges - Estimated Future Connection Charges Sanitary Water Storm Sewer Works Water Total Haase Addition $33,700 $58,800 $74,400 $166,900 Kern Center 120,200 209,230 264,950 594,380 Oakgreen Village (Phase I and II 85,900 149,500 189,400 424,800 Total $239,800 $417,530 $528,750 $1,186,080 J yk (• - "ate: �.. - - _ n Management Letter — Capital Proiect Funds: • Basis for original Area and Connection Charge Fee - -Based on 1989 report prepared by City engineer —Fee was based on the following estimated costs: Storm sewer $1,579,500 Sanitary sewer 1,092,500 Water system: Well 350,000 Water tower 687,500 Lines 776,250 Total $4,485,750 IMF WIMP, to i Management Letter — Capital Proiect Funds,: • Park Development Fund — fund balance decreased by $14,000 during the year. —The fund balance was $315,000 at December 31, 2003. s r" r Management Letter — Capital Proiect Funds • Renewal and Replacement Fund — fund balance increased by $153,000 during the year. — The fund balance was $2.19 million at December 31, 2003. • Street Reconstruction Fund — fund balance was $395,000 at December 31, 2003. — These monies will provide partial financing for the next phase of street reconstruction. „ n s a t Management Letter - Enterprise Funds: Net Change in Retained Earnings By Year Sanitary Storm Year Water Sewer Sanitation Sewer Total 2003 $117,821 $87,935 $5,457 $36,789 $248,002 2002 41,573 81,542 3,955 5,794 132,864 2001 41,643 (5,994) (3,604) 5,875 37,920 2000 65,051 (80,152) (255) (4,765) (20,121) 1999 49,552 (111,811) (32,625) 12,279 (82,605) 1998 (31,669) (38,145) (25,637) - (95,451) 1997 11,294 50,550 - - 61,844 1996 26,964 (6,551) - - 20,413 1995 54,581 (2,359) - - 52,222 1994 (302,719) (198,539) - - (501,258) 1993 73,349 40,156 - - 113,505 Pre -1993 595,125 595,126 - - 1,190,251 Total $742,565 $411,758 ($52,709) $55,972 $1,157,586 °sue �. , , ,, � '„ y��.� -' _' 4 r• ;,,,', - f M anagement Letter Other: • The City experienced an overall collection rate of 99% for special assessments in 2003. • The City has an excellent property tax collection rate — 99% for 2003. • Significant changes in accounting and financial reporting will be required by 2004 (GASB 34)