HomeMy WebLinkAboutAnnual Financial Report CITY OF OAK PARK HEIGHTS, MINNESOTA
ANNUAL FINANCIAL REPORT
December 31, 2004
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CITY OF OAK PARK HEIGI -ITS, MINNESOTA
TABLE OF CONTENTS
Page
Reference No.
INTRODUCTORY SECTION
Elected and Appointed Officials 3
FINANCIAL SECTION
Independent Auditor's Report 7
Management's Discussion and Analysis 11
Basic Financial Statements:
Government -Wide Financial Statements:
Statement of Net Assets Statement 1 24
Statement of Activities Statement 2 25
Fund Financial Statements:
Balance Sheet - Governmental Funds Statement 3 26
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Governmental Funds Statement 4 28
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds Statement 5 30
Statement of Net Assets - Proprietary Fund Statement 6 31
Statement of Revenues, Expenses, and Changes in Fund Net Assets -
Proprietary Fund Statement 7 32
Statement of Cash Flows - Proprietary Fund Statement 8 33
Statement of Fiduciary Net Assets Statement 9 34
Notes to Financial Statements 35
Required Supplementary Information:
Budgetary Comparison Schedule - General Fund Statement 10 60
Budgetary Comparison Schedule - Note to RSI 64
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds Statement 11 68
Combining Statement of Revenues, Expenditures and Changes in Fund Balance -
Nonmajor Governmental Funds Statement 12 69
CITY OF OAK PARK HEIGHTS, MINNESOTA
TABLE OF CONTENTS
Page
Reference No.
Subcombining Balance Sheet - Nonmajor Special Revenue Funds Statement 13 70
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Special Revenue Funds Statement 14 71
Subcombining Balance Sheet - Nonmajor Debt Service Funds Statement 15 72
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Debt Service Funds Statement 16 73
Subcombining Balance Sheet - Nonmajor Capital Project Funds Statement 17 74
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Capital Project Funds Statement 18 76
Enterprise Fund:
Statement of Net Assets Statement 19 78
Comparative Statement of Revenue, Expenses and Changes in Net Assets Statement 20 79
Statement of Cash Flows Statement 21 80
Agency Fluids:
Subcombining Balance Sheet Statement 22 81
Subcombining Statement of Changes in Assets and Liabilities Statement 23 82
Supplemental Financial Information:
Debt Service Payments to Maturity:
Revenue Bonds and General Debt Bonds Exhibit 1 84
Taxable Valuations, Tax Levies and Tax Rates Exhibit 2 85
Schedule of Construction Costs Exhibit 3 86
STATISTICAL SECTION (UNAUDITED)
General and Special Revenue Funds - Expenditures by Function - Years 1995 through 2004 Table 1 88
General and Special Revenue Funds - Revenue by Source - Years 1995 through 2004 Table 2 89
Property Tax Levies and Collections - Years 1995 through 2004 Table 3 90
Special Assessment Collections - Years 1995 through 2004 Table 4 91
Principal Taxpayers Table 5 92
INTRODUCTORY SECTION
1
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CITY OF OAK PARK HEIGHTS, MINNESOTA
ELECTED AND APPOINTED OFFICIALS
December 31, 2004
Term Expires
Mayor:
David Beaudet December 31, 2008
Councilmembers:
Les Abrahamson December 31, 2006
Mark Swenson December 31, 2006
Jack Doerr December 31, 2008
Mary McComber December 31, 2008
Administrator:
Eric Johnson Appointed
Deputy Clerk/Finance Director:
Judy Holst Appointed
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FINANCIAL SECTION
5
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6
Fau Redpa
�nrdfi�d PuNiCAnCooni8nLu axd Cn0SU|iax�u
INDEPENDENT AUDITOR'S REPORT
Iu the Honorable Mayor and
Members of the City Council
City of Oak Park Heights, Minnesota
YV � audited (� accompanying financial i i i �(� (o|ooL ion the
� ovcc�u�rn�000 ��nvcr00000 activities,
busioeaa-b/pcuotiviiieu each major fund, and the aggregate remaining fund information of
the City of Oak Park Heights, Minnesota, as of and for the year ended December 31, 2004
which collectively comprise the City ofOak Park Heights, Minnesota's basic fiouooiu}
s{o&emneuia as listed in the table of contents. Ihcuo bounciu| oLotcnneuis are the nomynnVibi}iLy
o[ the City nf Oak Park Heights, Minnesota's management. Our responsibility ia\uexpress
opinions onthese financial statements based ou our audit.
We conducted our audit in accordance with auditing standards generally accepted in the
United States o[ America and the otuuduuiu yyplicnh]c to financial audits contained in
Government Auditing S/ondu/us issued by the Comptroller General of the United Siu&uu.
Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial yru1cuueu1u are free of material rnims<uiemocuL An audit ioo|udom
examining, onutest buaiu evidence supporting the amounts and disclosures in the financial
mtutcozeoia. /\n audit also includes assessing the accounting principles used and the
significant estimates made 6ymanagement, no well as uvu}outiog the overall financial
statement presentation. We believe that our audit provides uccuoouoblo basis for our
opinion.
lu our opinion, based on our audit, the fiunociu} xiaLoncrdu referred to above present fair/y, in
all mater respects, the respective fiuuuoia/position ofthe governmental activities, the
business-type activities, each major fund, and the aggregate remaining fund informat of
the City of Oak Park ,Miuneouia respect
changes io financial position and cash flows, where applicable, thereof for the year then
ended i0000fbznmiiy with accounting principles generally accepted iu the United States of
America.
As described io Note l5bo the basic fiounciu|statements, the City ofOak Park Heights,
Minnesota adopted the provisions of Governmental Accounting Standards Board StoLcrnon(
No. 34, Basic Financial Statements — and Management's Discussion and Analysis —for State
and Local Governments, Statement 37, Basic Financial Statements — and Management's
/)ivruxx/oo and Analysis —for S/o/r and Local Governments: {)n/n/b//x, and Statement 38,
kN/k/8o / 6nDQ� 481OVV!ituBuur|/orkw� VVhi| Uu / |aku K�i/ �/i '/l1U US� [d | U�1 42G /U0U haxJ;51 42G!J)04
/{no1111goDffiou. 1203 3nxd)Fron1.ugeRoad Sui\u 13 Hnx|iogs. VIN SS03J' USA [o|op|woe, 661 48O49BO Fux� 061 VG 5-004
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g
Certain Financial Statement Note Disclosures, as of January 1, 2004. This results in a
change in the format and content of the basic financial statements.
In accordance with Government Auditing Standards, we have also issued a report dated
March 1, 2005 on our consideration of the City of Oak Park Heights, Minnesota's internal
control over financial reporting and on our tests of its compliance with certain provisions of
laws, regulations, contracts and grant agreements and other matters. The purpose of that
report is to describe the scope of our testing, and not to provide an opinion on the internal
control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
The Management's Discussion and Analysis and the budgetary comparison information, as
listed in the table of contents, are not a required part of the basic financial statements but ark;
supplementary information required by accounting principles generally accepted in the
United States of America. We have applied certain limited procedures, which consisted
principally of inquiries of management regarding the methods of measurement and
presentation of the supplementary information. However, we did not audit the information
and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements (fiat,
collectively comprise the City of Oak Park Heights, Minnesota's basic financial statements.
The introductory section, combining and individual fund statements and schedules,
supplementary financial information and statistical tables are presented for purposes of
additional analysis and are not a required part of the basic financial statements. The
combining and individual fund statements and schedules and supplementary financial
information has been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated in all material respects in relation to
the basic financial statements taken as a whole. The introductory section and statistical
tables have not been subjected to the auditing procedures applied in the audit of the basic
financial statements and, accordingly, we express no opinion on them.
4 % c
HLB TAUTGES REDPATH, LTD.
White Bear Lake, Minnesota
March 1, 2005
9
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10
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Oak Park Heights, we offer readers of the City of Oak Park
Heights' financial statements this narrative overview and analysis of the financial activities
of the City for the fiscal year ended December 31, 2004.
Financial Ili2hlis!hts
The assets of the City of Oak Park Heights exceeded its liabilities at the close of the most
recent fiscal year by $25,059,000 (Net assets). Of this amount, $8,160,000 (unrestricted net
assets) may be used to meet the government's ongoing obligations to citizens and creditors in
accordance with the City's fund designations and fiscal policies.
The City's total net assets increased by $821,000.
As of the close of the current fiscal year, the City of Oak Park Heights' governmental funds
reported combined ending fund balances of $7,765,000.
At the end of the current fiscal year the general fund balance was $1,847,000 of which
$1,700,000 is designated.
The General Fund balance increased by $153,000 as a result of positive budget variances in
both revenues and expenditures.
The City was able to transfer an additional $125,000 from the General Fund to the Budgeted
Projects Fund for capital improvements for streets, parks, trails, storage area, and computers.
The Sanitary Sewer Connection Charge Fund, Water Connection Charge Fund and Storm
Sewer Connection Charge Fund did not collect connection charges in the year 2004.
With the exception of sanitation, all four enterprise fund operations reported net operating
income in 2004.
Overview of the Financial Statements
The discussion and analysis are intended to serve as an introduction to the City of Oak Park
Heights' basic financial statements. The City's basic financial statements comprise three
components: 1) government -wide financial statements, 2) fund financial statements, and 3)
notes to the financial statements. This report also contains other supplementary information
in addition to the basic financial statements themselves.
Government -wide financial statements. The government -wide financial statements are
designed to provide readers with a broad overview of the City of Oak Park Heights' finances,
in a manner similar to a private- sector business.
11
Management's Discussion and Analysis
The statement of net assets presents information on all of the City of Oak Park Heights'
assets and liabilities, with the difference between the two reported as net assets. Over time,
increases or decreases in net assets may serve as a useful indicator of whether the financial
position of the City of Oak Park Heights is improving or deteriorating.
The statement of activities presents information showing how the City's net assets changed
during the most recent fiscal year. All changes in net assets are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cash
flows. Thus, revenues and expenses are reported in this statement for some items that will
only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused
vacation leave).
Both of the government -wide financial statements distinguish functions of the City of Oak
Park Heights that are principally supported by taxes and intergovernmental revenues
(governmental activities) from other functions that are intended to recover all or a significant
portion of their costs through user fees and charges (business -type activities). The
governmental activities of the City of Oak Park Heights include general government, public
safety, public works and parks and recreation. The business -type activities of the City of
Oak Park Heights include a water, sanitary sewer, sanitation and storm sewer.
The government -wide financial statements are statements 1 and 2 of this report.
Fund Financial statements. A fund is a grouping of related accounts that is used to
maintain control over resources that have been segregated for specific activities or objectives.
The City of Oak Park Heights, like other state and local governments, uses fund accounting
to ensure and demonstrate compliance with finance- related legal requirements. All of the
funds of the City of Oak Park Heights can be divided into two categories: governmental
funds and proprietary funds.
Governmental funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government -wide financial statements.
However, unlike the government -wide financial statements, governmental fund financial
statements focus on near -term inflows and outflows of spendable resource, as well as on
balances of spendable resources available at the end of the fiscal year. Such information may
be useful in evaluating a government's near -term financial requirements.
Because the focus of governmental funds is narrower than that of the government -wide
financial statements, it is useful to compare the information presented for governmental
funds with similar information presented for governmental activities in the government -wide
financial statement. By doing so, readers may better understand the long -term impact of the
City's near term financial decisions. Both the governmental fund balance sheet and
governmental fund statement of revenues, expenditures, and change in fund balances provide
a reconciliation to facilitate this comparison between governmental funds and governmental
activities.
12
Management's Discussion and Analysis
The City of Oak Park Heights maintains five individual major governmental funds.
Information is presented separately in the governmental fund balance sheet and in the
governmental fiend statement of revenues, expenditures, and changes in fund balances for the
following major funds:
• General Fund
• G.O. Improvement Bonds of 1998 — Debt Service Fund
• Renewal and Replacement Fund — Capital Project Fund
• McKean Square Fund — Capital Project Fund
• AAE — Storm Sewer Connection Fund — Capital Project Fund
Data from the other governmental funds are combined into a single, aggregated presentation.
Individual fiend data for each of these nonmajor governmental funds is provided in the form
of combining statements elsewhere in this report.
The City of Oak Park Heights adopts an annual appropriated budget for its General Fund.
A budgetary comparison statement has been provided for this fund to demonstrate
compliance with this budget.
The basic governmental fund financial statements are statements 3 through 5 of this report.
Proprietary funds. The City of Oak Park Heights maintains four enterprise funds as a part
of its proprietary fund type. Enterprise funds are used to report the same functions presented
as business -type activities in the government -wide financial statements. The City of Oak
Park Heights uses enterprise finds to account for its water, sanitary sewer, sanitation and
storm sewer operations.
Proprietary funds provide the same type of information as the government -wide financial
statements, only in more detail. The proprietary fund financial statements provide separate
information for the following funds:
Enterprise funds:
Water
Sanitary Sewer
Sanitation
Storm Sewer
The basic proprietary fund financial statements are statements 6 through 8 of this report.
Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of
parties outside the City. Fiduciary funds are not reflected by the government -wide financial
statements because the resources of those funds are not available to support the City of Oak
Park Heights, Minnesota's own programs.
The basic fiduciary fund statements are Statements 9, 22 and 23.
13
Management's Discussion and Analysis
Notes to the financial statements. The notes provide additional information that is essential
to a full understanding of the data provided in the government —wide and fund financial
statements. The notes to the financial statements can be found following Statement 9.
Other information. The combining statements referred to earlier in connection with non -
major governmental fiends are presented immediately following the required supplementary
information on budgetary comparisons. Combining and individual fund statements and
schedules are presented as Statements 11 through 23.
Government -Wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's
financial position. In the case of the City of Oak Park Heights, assets exceeded liabilities by
$25,059,000 at the close of the most recent fiscal year.
The largest portion of the City of Oak Park Heights' net assets ($15,706,000 or 63% percent)
reflects its investment in capital assets (e.g. land, improvements, buildings and structures,
machinery and equipment, and furniture and fixtures) less any related debt used to acquire
those assets that is still outstanding. The City of Oak Park Heights uses these capital assets
to provide services to citizens; consequently, these assets are not available for fixture
spending. Although the City of Oak Park Heights' investment in its capital assets is reported
net of related debt, it should be noted that the resources needed to repay this debt must be
provided from other sources, since the capital assets themselves cannot be used to liquidate
these liabilities.
With the first year implementation of Governmental Accounting Standards Board Statement
34, the City is not presenting comparable columns in the various comparison's and analyses
for the previous year. Comparative information will be provided in future years.
14
Management's Discussion and Analysis
City of Oak Park Heights' Net Assets
Governmental Business -Type
Activities Activities Total
Current and other assets $8,969,078 $917,162 $9,886,240
Capital assets 11,524,715 5,646,237 17,170,952
Total assets $20,493,793 $6,563,399 $27,057,192
Long -term liabilities outstanding $1,211,107 $16,429 $1,227,536
Other liabilities 703,986 65,906 769,892
Total liabilities $1,915,093 $82,335 $1,997,428
Net assets:
Invested in capital assets, net of related debt $10,059,989 $5,646,237 $15,706,226
Restricted 1,192,681 - 1,192,681
Unrestricted 7,326,030 834,827 8,160,857
Total net assets $18,578,700 $6,481,064 $25,059,764
A portion of the City of Oak Park Heights' net assets represent resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net
assets may be used to meet the City's ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City of Oak Park Heights is able to report positive
balances in all three categories of net assets, both for the government as a whole, as well as
for its separate governmental and business -type activities.
15
Management's Discussion and Analysis
Governmental Activities
Governmental activities increased the City of Oak Park Heights' net assets by $750,000
during 2004. Key elements of this increase are as follows:
City of Oak Park Heights' Changes in Net Assets
Governmental Business -Type
Activities Activities Total
Revenues:
Program revenues:
Charges for services $948,633 $1,133,238 $2,081,871
Operating grants and contributions 68,358 - 68,358
Capital grants and contributions 212,635 58,706 271,341
General revenues:
General property taxes 1,979,288 - 1,979,288
Grants and contributions not
restricted to specific programs 3,060 - 3,060
Other revenue 29,125 - 29,125
Unrestricted investment earnings 199,737 19,148 218,885
Total revenues 3,440,836 1,211,092 4,651,928
Expenses:
General government 832,609 - 832,609
Public safety 1,155,243 - 1,155,243
Public works 602,111 - 602,111
Parks and recreation 123,737 - 123,737
Interest on long -tern debt 67,365 - 67,365
Water - 323,527 323,527
Sanitary sewer - 517,595 517,595
Sanitation - 167,258 167,258
Storm sewer - 41,082 41,082
Total expenses 2,781,065 1,049,462 3,830,527
Increase in net assets before transfers 659,771 161,630 821,401
Transfers 90,423 (90,423) -
Change in net assets 750,194 71,207 821,401
Net assets - January 1, 2004 17,828,506 6,409,857 24,238,363
Net assets - December 31, 2004 $18,578,700 $6,481,064 $25,059,764
16
Management's Discussion and Analysis
Below are specific graphs which provide comparisons of the governmental activities
revenues and expenditures:
Governmental Activities - Revenues
ow<
unmanm<d im can,cnt
pan-g, c, ^,�„ (barge, ear >.r,.«,
as ^
t
5 gF K ` v
k
:5 •
.r.t'a :v'.r ;,�: z ;'r / �•', i "',F ',Y %'�
o g r.,n[,.nd
a ��i,,������k,,,� k � C � art d' ;. "s ' •�� � /.;h ��[� ,;y h•, e
roperry
57 "5, �. Y.,:.. Cepual g inn and
inntnbut 1, "
Governmental Activities - Expenses
Parks and Inlercsc on Lnng-
Rurcubon
4%, Tum D.bt 2
' Cicnir::l litr � mutt
t'ubbc WV ,ks 30%
l
w�
s
Public Safcty 42%
17
Management's Discussion and Analysis
Business -Type Activities
Business -type activities increased net assets by $71,000 during 2004. Below are graphs
showing the business -type activities revenue and expense comparisons:
Business -Type Activities - Revenues
C'ntrihunom So. Imcslmcnt Lamings
i�
Y •
y' �
Charge. ftrt Scry , 93',
I
Business - Type Activities - Expenses
SI. S. 6%
Sa„�cam
3
i a
�2
Sanitary Sewer 58
18
Management's Discussion and Analysis
Financial Analysis of the Government's Funds
Governmental Funds. The focus of the City of Oak Park Heights' governmental fiends is to
provide information on near -term inflows, outflows, and balances of spendable resources.
Such information is useful in assessing the City of Oak Park Heights' financing
requirements. In particular, unreserved fund balance may serve as a useful measure of a
government's net resources available for spending at the end of the fiscal year.
At the end of the current fiscal year, the City of Oak Park Heights' governmental funds
reported combined ending fund balances of $7,765,000.
The general fund increased by $153,000 in 2004, which was due primarily to revenues
exceeding budget expectations. Revenues related to building activities contribute to the
revenue increase.
The G.O. Improvement Bonds of 1998 debt service fund decreased by $4,400 during 2004.
The Renewal and Replacement capital project fund increased by $215,000 during 2004. This
fund receives an annual transfer from the proprietary funds in an amount equal to
depreciation expense.
The McKean Square capital project fund is firnded by direct charges to developers.
The AAE — Storm Sewer Connection capital project fund decreased by $65,000 due to
monies expended for the Kern Center pond expansion.
The nonmajor special revenue funds decreased by $3,000 during 2004.
The nonmajor debt service funds decreased by $131,000 during 2004.
The nonmajor capital project fund increased by $68,000 during 2004.
Proprietary funds. The City of Oak Park Heights' proprietary fund provides the same type
of information found in the government -wide financial statements, but in more detail.
Budgetary Highlights
General Fund
The expenditure budget was amended to provide for changes in activity that occurred during
the year. The revenue budget was amended to recognize increased property taxes expected
which are offset by the State of Minnesota's market value credit and for additional
miscellaneous revenue collected.
19
Management's Discussion and Analysis
Capital Asset and Debt Administration
Capital assets. The City of Oak Park Heights', investment in capital assets for its
governmental and business -type activities as of December 31, 2004, amounts to $17,170,000
(net of accumulated depreciation). This investment in capital assets includes land, buildings
and structures, infrastructure, machinery and equipment and furniture and fixtures.
City of Oak Park Heights' Capital Assets
(Diet of Depreciation)
Beginning
Beginning Balance, Ending
primary Government Balance Restated as Restated Increases Decreases Balance
Governmental activities:
Capital assets, not being depreciated:
Land $1,183,690 $431,425 $1,615,115 $ - $ - $1,615,115
Construction in progress - 1,089,842 1,089,842 622,218 (155,429) 1,556,631
Total capital assets, not being depreciated 1,183,690 1,521,267 2,704,957 622,218 (155,429) 3,171,746
Capital assets, being dcprcciatcd:
Buildings and structures 1,150,544 - 1,150,544 - (32,398) 1,118,146
Otherimprovcmcnts 587,601 587,601 - (26,638) 560,963
Machinery and equipment 450,396 450,396 44,566 (88,902) 406,060
Furniture and fixtures 213,296 - 213,296 5,538 (78,913) 139,921
Infrastructure - 10,047,511 10,047,511 96,723 - 10,144,234
Total capital assets, being depreciated 2,401,837 10,047,511 12,449,348 146,827 (226,851) 12,369,324
Less accumulated depreciation for:
Buildings and structures - 381,644 381,644 25,404 (32,398) 374,650
Other improvements - 141,923 141,923 5,426 (26,638) 120,711
Machinery and equipment 264,611 264,611 49,246 (88,902) 224,955
Furniture and fixtures 154,971 154,971 11,283 (78,913) 87,341
Infrastructure - 2,889,792 2,889,792 318,906 3,208,698
Total accumulated depreciation 0 3,832,941 3,832,941 410,265 (226,851) 4,016,355
Total capital assets being depreciated - net 2,401,837 6,214,570 8,616,407 (263,438) 8,352,969
Governmental activities capital assets - net $3,585,527 $7,735,837 $11,321,364 $358,780 ($155,429) $11,524,715
n Restated for previously unreported infrastructure, construction in progress and accumulated depreciation as of December 31, 2003.
20
Management's Discussion and Analysis
Beginning Ending
Balance Increases Decreases Balance
Business -type activities:
Capital assets, not being depreciated:
Land $60,000 $ $ $60,000
Total capital assets, not being depreciated 60,000 0 0 60,000
Capital assets, being depreciated:
Buildings and structures 1,320,334 1,320,334
Machinery and equipment 205,039 14,992 (6,072) 213,959
Distribution and collection systems 6,454,890 58,705 - 6,513,595
Total capital assets, being depreciated 7,980,263 73,697 (6,072) 8,047,888
Less accumulated depreciation:
Buildings and structures 432,906 29,858 462,764
Machinery and equipment 92,259 10,031 (5,353) 96,937
Distribution and collection systems 1,772,844 129,106 1,901,956
Less accumulated depreciation 2,298,009 168,995 (5,353) 2,461,651
Total capital assets being depreciated - net 5,682,254 (95,298) (719) 5,586,237
Business -type activities capital assets - net $5,742,254 ($95,298) ($719) $5,646,237
Additional information on the City of Oak Park Heights' capital assets can be found in
Note 4.
Long-term debt. At the end of the current fiscal year, the City of Oak Park Heights had
total long -term debt outstanding of $1,460,000, a decrease of $400,000 from 2003.
Additional long -term debt in the amount of $182,000 for compensated absences was also
outstanding at the end of 2004.
City of Oak Park Heights' Outstanding Debt
General Obligation Improvement Bonds and Compensated Absences:
Governmental Business -Type
Activities Activities
2004 2004 Total
General Obligation Bonds $1,460,000 $ - $1,460,000
Compensated absences 163,934 18,433 182,367
Total $1,623,934 $18,433 $1,642,367
21
Management's Discussion and Analysis
State statutes limit the amount of general obligation debt a Minnesota city may issue to 2% of
total Estimated Market Value. The current debt limitation for the City of Oak Park Heights
is $8,957,000. Of the City's outstanding debt, none is counted within the statutory limitation.
Additional information on the City of Oak Park Heights' long -term debt can be found in
Note 5.
Requests for information. This financial report is designed to provide a general overview
of the City of Oak Park Heights' finances for all those with an interest in the government's
finances. Questions concerning any of the information provided in this report or requests for
additional financial information should be addressed to the Director of Finance, 14168 Oak
Park Boulevard, Oak Park Heights, Minnesota 55082 -2007.
22
BASIC FINANCIAL STATEMENTS
23
CITY OF OAK PARK HEIGHTS, MINNESOTA
STATEMENT OF NET ASSETS Statement 1
December 31, 2004
Primary Government
Governmental Business -Type
Assets: Activities Activities Total
Cash and investments $7,816,131 $699,416 $8,515,547
Accrued interest receivable 102,098 9,671 111,769
Accounts receivable - net 33,887 183,692 217,579
Due from other governmental units 41,153 - 41,153
Due from developers 6,958 - 6,958
Prepaid items - 24,383 24,383
Taxes receivable:
Delinquent 41,632 - 41,632
Due from County 16,640 - 16,640
Special assessments receivable 910,579 - 910,579
Capital assets (net of accumulated depreciation):
Land 1,615,115 60,000 1,675,115
Building and structures 743,496 857,570 1,601,066
Other improvements 440,252 - 440,252
Machinery and equipment 181,105 117,022 298,127
Furniture and fixtures 52,580 - 52,580
Infrastructure 6,935,536 4,611,645 11,547,181
Construction in progress 1,556,631 - 1,556,631
Total assets 20,493,793 6,563,399 27,057,192
Liabilities:
Accounts payable 89,894 27,531 117,425
Salaries payable 1,136 2,026 3,162
Contracts payable 182,284 - 182,284
Due to other governmental units 1,772 34,345 36,117
Due to developers 11,347 - 11,347
Accrued interest payable 4,726 - 4,726
Compensated absences payable:
Due within one year 17,827 2,004 19,831
Due in more than one year 146,107 16,429 162,536
Bonds payable:
Due within one year 395,000 - 395,000
Due in more than one year 1,065,000 - 1,065,000
Total liabilities 1,915,093 82,335 1,997,428
Net assets:
Invested in capital assets, net of related debt 10,059,989 5,646,237 15,706,226
Restricted for:
Debt service 1,192,681 - 1,192,681
Unrestricted 7,326,030 834,827 8,160,857
Total net assets $18,578,700 $6,481,064 $25,059,764
The accompanying notes are an integral part of these financial statements.
24
CITY OF OAK PARK HEIGHTS, MINNESOTA
STATEMENT OF ACTIVI'T'IES Statement 2
For The Year Ended December 31, 2004
Net (Expense) Revenue and
Program Revenues Changes in Net Assets
Operating Capital Primary Government
Charges For Grants and Grants and Governmental Business -Type
Functions /Programs Expenses Services Contributions Contributions Activities Activities Total
Primary government:
Government activities:
General government $832,609 $124,073 $250 $ - ($708,286) $ ($708,286)
Public safety 1,155,243 480,163 67,377 (607,703) (607,703)
Public works 602,111 344,397 731 212,635 (44,348) (44,348)
Parks and recreation 123,737 - - - (123,737) - (123,737)
Interest on long -term debt 67,365 - - - (67,365) (67,365)
Total government activities 2,781,065 948,633 68,358 212,635 (1,551,439) 0 (1,551,439)
Business -type activities:
Water 323,527 388,198 - 32,843 97,514 97,514
Sanitary sewer 517,595 577,253 25,863 85,521 85,521
Sanitation 167,258 96,909 - (70,349) (70,349)
Storm sewer 41,082 70,878 - - - 29,796 29,796
Total business -type activities 1,049,462 1,133,238 0 58,706 0 142,482 142,482
Total primary government $3,830,527 $2,081,871 $68,358 $271,341 (1,551,439) 142,482 (1,408,957)
General revenues:
General property taxes 1,979,288 - 1,979,288
Grants and contributions not
restricted to specific programs 3,060 - 3,060
Unrestricted investment earnings 199,737 19,148 218,885
Other 29,125 - 29,125
Transfers 90,423 (90,423) -
Total general revenues and transfers 2,301,633 (71,275) 2,230,358
Change in net assets 750,194 71,207 821,401
Net assets - beginning 17,828,506 6,409,857 24,238,363
Net assets - ending $18,578,700 $6,481,064 $25,059,764
The accompanying notes are an integral part of these financial statements.
25
CITY OF OAK PARK HEIGHTS, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2004
G.O.
Improvement
Bonds of 1998
Debt Service
Assets General Fund
Cash and investments $1,798,853 $77,560
Accrued interest receivable 19,614 1,554
Accounts receivable 30,445 -
Due from other governmental units 41,153 -
Due from developers _ _
Taxes receivable:
Delinquent 40,359 -
Due from County 16,155 -
Special assessments receivable 93 744,294
Total assets $1,946,672 $823,408
Liabilities and Fund Balances
Liabilities:
Accounts payable $55,795 $ -
Salaries payable 1,136 -
Contracts payable - _
Due to other governmental units 1,772 -
Due to developers - _
Deferred revenue 40,361 710,264
Total liabilities 99,064 710,264
Fund balance:
Reserved for debt service - 113,144
Unreserved:
Designated reported in General Fund 1,699,961 -
Designated reported in Special Revenue Funds - -
Designated reported in Capital Project Funds -
Undesignated reported in General Fund 147,647 -
Total fund balance 1,847,608 113,144
Total liabilities and fiend balance $1,946,672 $823,408
Fund balance reported above
Amounts reported for governmental activities in the statement of net assets are different because:
Capital assets used in governmental activities are not financial resources, and therefore, are not reported in the funds
Other long -term assets are not available to pay for current- period expenditures and, therefore, are deferred in the finds.
Long -term liabilities, including bonds payable, are not due and
payable in the current period and therefore are not reported in the funds:
Bonds payable
Compensated absences payable
Accrued interest payable
Net assets of governmental activities
The accompanying notes are an integral part of these financial statements.
26
Statement 3
„aa, w; a, i,,;;a,ma;wuw;nus +, +mon uu;u,uuvw uuuuw;awum„ ao;w,uiuu ;.; uwvuwwcuunw wa „aawuww;wrwu wuuau a ;,;,wu,;u;uw;a ua awwruur w,u , ;nswa.ua uwmu.a vawue wmaneuum.wru;ww;w;.dww;ua wu;,n;;am uow uw;wu imauawua urwwai wwu: ,au,i,
Renewal McKean AAE - Storm
and Square Sewer
Replacement Capital Connection Other Total
Capital Project Project Capital Project Governmental Governmental
Fund Fund Fund Funds Funds
$2,376,418 $70,000 $934,591 $2,558,709 $7,816,131
31,158 - 13,260 36,512 102,098
- - - 3,442 33,887
- - - - 41,153
6,958 6,958
- - - 1,273 41,632
- - - 485 16,640
- - 37,973 128,219 910,579
$2,407,576 $70,000 $985,824 $2,735,598 $8,969,078
$ - $6,840 $22,829 $4,430 $89,894
- - - - 1,136
51,813 59,732 70,739 182,284
- - - 1 ,772
11,347 - - 11,347
- 37,973 128,844 917,442
0 70,000 120,534 204,013 1,203,875
- - - 341,550 454,694
- 1,699,961
- - - 81,167 81,167
2,407,576 - 865,290 2,108,868 5,381,734
- - - - 147,647
2,407,576 0 865,290 2,531,585 7,765,203
$2,407,576 $70,000 $985,824 $2,735,598 $8,969,078
$7,765,203
11,524,715
917,442
(1,460,000)
(163,934)
(4,726)
$18,578,700
The accompanying notes are an integral part of these financial statements.
27
CITY OF OAK PARK HEIGHTS, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2004
G.O.
Improvement
Bonds of 1998
Debt Service
General Fund
Revenues:
General property taxes $1,910,848 $ -
Special assessments - 115,211
Intergovernmental 70,362 -
Licenses and permits 304,594 -
Chargesforservices 150,126 -
Fines and forfeits 78,274 -
Earnings on investments 39,188 3,078
Direct charges to developers - -
Refunds and reimbursements 88,860 -
Other 1,758 -
Total revenues 2,644,010 118,289
Expenditures:
Current:
General government 793,403 -
Public safety 1,109,809 -
Public works 170,443 -
Parks and recreation 88,180 -
Capital outlay 15,878 -
Debt service:
Principal - 125,000
Interest - 52,687
Construction costs - -
Total expenditures 2,177,713 177,687
Revenues over (under) expenditures 466,297 (59,398)
Other financing sources (uses):
Transfers from other funds - 55,000
Transfers to other funds (313,300) -
Total other financing sources (uses) (313,300) 55,000
Net increase (decrease) in fund balance 152,997 (4,398)
Fund balance - January 1 1,694,611 117,542
Fund balance - December 31 $1,847,608 $113,144
The accompanying notes are an integral part of these financial statements.
28
Statement 4
awouuu. wmuu mer urrar..oau w,,iummuuewa✓'awuuw imnu. wi.wawruwwau,uma ow wurw,uwu,auawuuwuuauuumi uu,L UnueamvuwwuuermW UU, auewww. uwVwwuduvuuwuuuumiwaurmwuamuew awuuwwwe¢.muwuwru.wuwruua,a wusaaswwuamuuwauawmruawuu uuuuu. uwu w,a, wu, urasiue,W.,uuswmwuowu wa a. ,u „ms
Renewal McKean AAE - Storm
and Square Sewer
Replacement Capital Connection Other Intra Total
Capital Project Project Capital Project Governmental Activity Governmental
Fund Fund Fund Funds Eliminations Funds
- $58,359 $ - $1,969,207
- 18,987 171,560 - 305,758
- - - 70,362
- - - 304,594
- - - 150,126
- - - 78,274
61,689 - 26,253 69,529 - 199,737
- 357,503 - 16,738 - 374,241
- - 21,098 - 109,958
- - - 18,569 - 20,327
61,689 357,503 45,240 355,853 0 3,582,584
- - - 468 - 793,871
- - 9,724 - 1,119,533
- - 126,554 - 296,997
- - 88,180
- 34,226 - 50,104
275,000 - 400,000
- - - 15,647 - 68,334
- 357,503 92,581 172,134 - 622,218
0 357,503 92,581 633,753 0 3,439,237
61,689 0 (47,341) (277,900) 0 143,347
154,023 - - 304,700 (334,800) 178,923
- - (17,600) (92,400) 334,800 (88,500)
154,023 0 (17,600) 212,300 0 90,423
215,712 0 (64,941) (65,600) 0 233,770
2,191,864 - 930,231 2,597,185 - 7,531,433
$2,407,576 $0 $865,290 $2,531,585 $0 $7,765,203
The accompanying notes are an integral part of these financial statements.
29
CITY OF OAK PARK HEIGHTS, MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES, Statement 5
EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2004
WIiYY dI•WYYII'1L1 L8mWVYV., ,iuWd WLWI WJYYWY' Y1WLIdYW .64Y4WWdlbidvlJ'4YWI.WldW411 PlJrilmJ.YtluJYdloLbWIYIW WiY6LYYW WWLL 61 WW1 iWtl4WUWIJUJ16YY1l4 YJW4•IWYIdWII dLWsYWYi4d WYLYYWY'l41LWl iLYdtlb W.WattlWW:iWVdYdIWWd lJ.tlfLVL11Wl iLWUW',WLdlWWVU1WWL4WYWWtlWWV llY.W tlWYd WJdY4WW11WWY 4YWWYW1WtlY4W11LWl,IIW wJ'.IWJ1114L Ul sll o uullLL
Amounts reported for governmental activities in the
statement of activities are different because:
Net changes in fund balances - total governmental funds (Statement 4) $233,770
Governmental fiords report capital outlays as expenditures. However, in the
statement of activities the cost of those assets is allocated over their estimated useful lives
and reported as depreciation expense:
Depreciation (410,265)
Capital outlay 672,322
Capital contribution (58,706)
Revenues in the statement of activities that do not provide current financial resources
are not reported as revenues in the fiends:
Change in delinquent taxes 10,081
Change in deferred and delinquent special assessments (93,123)
The issuance of long -term debt (e.g., bonds, leases) provides current financial resources
to governmental fiords, while the repayment of the principal of long -term debt consumes
the current financial resources of governmental funds. Neither transaction, however, has
any effect on net assets. The amount of this difference is:
Principal payments on bonds payable 400,000
Some expenses reported in the statement of activities do not require the use of current
financial resources and, therefore, are not reported as expenditures in governmental funds.
Expenses reported in the statement of activities include the effects of the changes in
these expense accruals as follows:
Change in compensated absences payable (4,854)
Change in accrued interest payable 969
Change in net assets of governmental activities (Statement 2) $750,194
The accompanying notes are an integral part of these financial statements.
30
CITY OF OAK PARK HEIGHTS, MINNESOTA
STATEMENT OF NET ASSETS Statement 6
PROPRIETARY FUND
December 31, 2004
Business -Type
Activities
Enterprise Fund
Assets: Utility Fund
Current assets:
Cash and cash equivalents $699,416
Accrued interest receivable 9,671
Accounts receivable:
Customers 150,598
Certified to County 33,059
Other 35
Prepaid items 24,383
Total current assets 917,162
Noncurrent assets:
Capital assets:
Land 60,000
Buildings and structures 1,320,334
Machinery and equipment 213,959
Infrastructure 6,513,595
Total capital assets 8,107,888
Less: Allowance for depreciation (2,461,651)
Net capital assets 5,646,237
Total noncurrent assets 5,646,237
Total assets 6,563,399
Liabilities:
Current liabilities:
Accounts payable $27,531
Salaries payable 2,026
Due to other governments 34,345
Compensated absences payable - current portion 2,004
Total current liabilities 65,906
Noncurrent liabilities:
Compensated absences payable 16,429
Total liabilities 82,335
Net assets:
Invested in capital assets, net of related debt 5,646,237
Unrestricted 834,827
Total net assets $6,481,064
The accompanying notes are an integral part of these financial statements.
31
CITY OF OAK PARK HEIGHTS, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND Statement 7
CHANGES IN FUND NET ASSETS
PROPRIETARY FUND
For The Year Ended December 31, 2004
Business -Type
Activities
Enterprise Fund
Utility Fund
Operating revenue:
Customer billings $1,089,789
Penalties 12,690
Plumbing permits 6,195
Meter sales 14,367
Charges for services 10,197
Total operating revenue 1,133,238
Operating expenses:
Personal services 230,122
Contractual services 278,382
Recycling award 595
MCES charges 267,705
Materials and supplies 12,082
Administrative and personnel charges 90,860
Depreciation 168,996
Total operating expenses 1,048,742
Operating income 84,496
Nonoperating revenue (expense):
Earnings on investments 19,148
Doss on disposal of fixed assets (720)
Total nonoperating revenue (expense) 18,428
Income before contributions and transfers 102,924
Capital contributions 58,706
Transfers:
Transfers from other fiords 88,500
Transfers to other funds (178,923)
Total transfers and capital contributions (90,423)
Change in net assets 71,207
Net assets - January 1 6,409,857
Net assets - December 31 $6,481,064
The accompanying notes are an integral part of these financial statements.
32
CITY OF OAK PARK HEIGHTS, MINNESOTA
STATEMENT OF CASH FLOWS Statement 8
PROPRIETARY FUND
For The Year Ended December 31, 2004
Business -Type
Activities
Enterprise Fund
Utility Fund
Cash flows from operating activities:
Receipts from customers and users $1,107,203
Payment to suppliers (522,162)
Payment to employees (337,443)
Miscellaneous revenue 24,564
Net cash flows from operating activities 272,162
Cash flows from noncapital financing activities:
Transfer to other funds (178,923)
Transfer from other finds 88,500
Net cash flows from noncapital financing activities (90,423)
Cash flows from capital and related
financing activities:
Acquisition of capital assets (14,993)
Cash flows from investing activities:
Investment income 9,477
Net increase in cash and cash equivalents 176,223
Cash and cash equivalents - January 1 523,193
Cash and cash equivalents - December 31 $699,416
Reconciliation of operating income to net cash
provided (used) by operating activities:
Operating income $84,496
Adjustments to reconcile operating income to
net cash flows from operating activities:
Depreciation 168,996
Change in assets and liabilities:
Decrease (increase) in receivables (1,471)
Decrease (increase) in prepaid expenses (2,044)
Increase (decrease) in payables 22,185
Total adjustments 187,666
Net cash provided by operating activities $272,162
Noncash investing, capital and financing activities:
Contribution of capital asset $58,706
The accompanying notes are an integral part of these financial statements.
33
CITY OF OAK PARK HEIGHTS, MINNESOTA
STATEMENT OF FIDUCIARY NET ASSETS Statement 9
AGENCY FUNDS
December 31, 2004
2004
Assets:
Cash and investments $52,752
Due from developers 9,237
Total assets 61,989
Liabilities:
Escrow deposits payable 7,000
Accounts payable 7,535
Due to developers 47,454
Total liabilities 61,989
Net assets:
Unrestricted $0
The accompanying notes are an integral part of these financial statements.
34
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Oak Park Heights operates under the State of Minnesota Statutory Plan A form of government.
The governing body consists of a five member City council elected by voters of the City.
The financial statements of the City of Oak Park Heights have been prepared in conformity with generally
accepted accounting principles as applied to governmental units by the Governmental Accounting Standards
Board (GASB). The following is a summary of the significant accounting policies.
A. FINANCIAL REPORTING ENTITY
As required by generally accepted accounting principles, the financial statements of the reporting
entity include those of the City of Oak Park Heights (the primary government) and its component
units, entities which the City is considered to be financially accountable. Blended component units,
although legally separate entities, are, in substance, part of the City's operations and so data from these
units are combined with data of the primary goverrnnent.
BLENDED COMPONENT UNITS
The HRA of the City of Oak Park Heights is a separate legal entity which is authorized to expend
monies generated by the City's tax increment district. The City council also serve as HRA board
members. Separate financial statements are not prepared for the HRA.
The EDA of the City of Oak Park Heights is a separate legal entity. The EDA board members are
substantially the same as the City council in that four of the five board members are council members
and the fifth board member is the City finance director. Separate financial statements are not prepared
by the EDA.
B. GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS
The government -wide financial statements (i.e., the statement of net assets and the statement of
changes in net assets) report information on all of the nonfiduciary activities of the primary
government and its component units. For the most part, the effect of interfund activity has been
removed from these statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business -type activities, which rely to a
significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or
business -type activity are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or business -type activity. Program revenues include 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or privileges
provided by a given function or business -type activity and 2) grants and contributions that are
restricted to meeting the operational or capital requirements of a particular function or business type
activity. Taxes and other items not included among program revenues are reported instead as general
revenues.
35
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary
funds, even though the latter are excluded from the government -wide financial statements. Major
individual governmental finds and major individual enterprise fiords are reported as separate columns
in the find financial statements.
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT
PRESENTATION
The government -wide financial statements are reported using the economic resources measurement
focus and the accrual basis of 'accounting, as are the Proprietary Fund financial statements. Revenues
are recorded when earned and expenses are recorded when a liability is incurred, regardless of the
timing of related cash flows. Property taxes are recognized as revenues in the year for which they are
levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met. The City's only fiduciary funds are agency finds. Agency
finds are custodial in nature (assets equal liabilities) and do not involve measurement of results of
operations.
Governmental fund financial statements are reported using the current financial resources
nnasuretnent focus and the modified accrual basis of accounting. Revenues are recognized as soon as
they are both measurable and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current period.
For this purpose, the government considers all revenues, except reimbursement grants, to be available
if they are collected within 60 days of the end of the current fiscal period. Reimbursement grants are
considered available if they are collected within one year of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
However, debt service expenditures, as well as expenditures related to compensated absences and
claims and judgments, are recorded only when payment is due.
Property taxes, special assessments, intergovernmental revenues, charges for services and interest
associated with the current fiscal period are all considered to be susceptible to accrual and so have
been recognized as revenues of the current fiscal period. Only the portion of special assessments
receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of
the current period. All other revenue items are considered to be measurable and available only when
cash is received by the government.
The City reports the following major governmental funds:
The general fund is the government's primary operating fund. It accounts for all financial
resources of the general government, except those required to be accounted for in another fund.
The G. 0. Improvement Bonds of 1998 debt service find - $ 1,990,000 bond issue to fund water,
sewer, storm sewer improvements in the Kern Center and construction of Phase III of 58` Street.
Bonds are to be paid over 15 years.
36
CITY OF OAK PARI{ HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
The Renewal and Replacement capital project jimd is used to account assets depreciated from the
utility fiord, water and sanitary sewer departments. Funds are used to renew or replace water and
sanitary sewer system assets.
The McKean Square capital project fund — for construction of 2 ° `' Phase of Valley Senior Service
Alliance development of an elderly retirement community, town homes and apartments.
Expenditures are paid by developer. No City funds are expended.
The AAE — Storm Sewer Connection capital project frond — was established in 1990 to collect
connection charges for fixture storm sewer and pond improvements for the area annexed to the
City west of Oakgreen Avenue.
The government reports the following major proprietary fund:
The utility fiord accounts for assets, liabilities, revenues, and expenditures for water, sanitary
sewer, storm sewer, and sanitation operations.
Additionally, the government reports the following fiord type:
Agency Funds account for the assets of various developers held by the City as an agent.
Private - sector standards of accounting and financial reporting issued prior to December 1, 1989,
generally are followed in both the government -wide and proprietary -find financial statements to the
extent that those standards do not conflict with or contradict guidance of the Governmental
Accounting Standards Board. Governments also have the option of following subsequent private -
sector guidance for their business -type activities and enterprise funds, subject to this same limitation.
The government has elected not to follow subsequent private- sector guidance.
As a general rule the effect of interfind activity has been eliminated from the government -wide
financial statements. Exceptions to this general rule are transactions that would be treated as revenues,
expenditures or expenses if they involved external organizations, such as buying goods and services or
payments in lieu of taxes, are similarly treated when they involve other funds of the City. Elimination
of these charges would distort the direct costs and program revenues reported for the various functions
concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods,
services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and
contributions, including special assessments. Internally dedicated resources are reported as general
revenues rather than as program revenues. Likewise, general revenues include all taxes.
Proprietary finds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary find's principal ongoing operations. The principal operating revenues
of the enterprise funds are charges to customers for sales and services. Operating expenses for
enterprise funds include the cost of sales and services, administrative expenses, and depreciation on
capital assets. All revenues and expenses not meeting this definition are reported as nonoperating
revenues and expenses.
37
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
uldlrW.,WWWr��uWd,dWU w� W; eW W uW� � ��� W�rWW,r, , WW�Wdy�,WW�W W4esW � a,saW � W,�ll���WWW���W W�Wd � ��� ��� eWWWi61494&
When both restricted and unrestricted resources are available for an allowable use, it is the City's
policy to use restricted resources first, then unrestricted resources as they are needed.
D. BUDGETS
Budgets are adopted on a basis consistent with generally accepted accounting principles. Annual
appropriated budgets are adopted for the General Fund, but not for Special Revenue Funds. Budgeted
expenditure appropriations lapse at year end.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the
expenditure of monies are recorded in order to reserve that portion of the appropriation, is not
employed by the City because it is at present not considered necessary to assure effective budgetary
control or to facilitate effective cash management.
E. LEGAL COMPLIANCE - BUDGETS
The City follows these procedures in establishing the budgetary data reflected in the financial
statements:
1. The City Administrator submits to the City Council a proposed operating budget for the fiscal
year commencing the following January 1. The operating budget includes proposed
expenditures and the means of financing them.
2. Public hearings are conducted to obtain taxpayer comments.
3. The budget is legally enacted through passage of a resolution on a departmental basis and can
be expended by each department based upon detailed budget estimates for individual
expenditure accounts.
4. The department heads are authorized to transfer appropriations under $500 within any
department budget. Additional interdepartmental or interfund appropriations and deletions
are or may be authorized by the City Council with fund (contingency) reserves or additional
revenues.
5. Formal budgetary integration is employed as a management control device during the year for
the General Fund.
6. Legal debt obligation indentures determine the appropriation level and debt service tax levies
for the Debt Service Funds. Supplementary budgets are adopted for the Proprietary Funds to
determine and calculate user charges. These debt service and budget amounts represent
general obligation bond indenture provisions and net income for operation and capital
maintenance and are not reflected in the financial statements.
38
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
7. A capital improvement program is reviewed annually by the City Council for the Capital
Project Funds. However, appropriations for major projects are not adopted until the actual
bid award of the improvement. The appropriations are not reflected in the financial
statements.
8. Expenditures may not legally exceed budgeted appropriations at the total fund level.
Monitoring of budgets is maintained at the expenditure category level (i.e., personal services;
material and supplies; contractual services; capital outlay) within each department. All
amounts over budget have been approved by the City council through the disbursement
approval process.
9. The City Council may authorize transfer of budgeted amounts between City funds.
F. CASH AND INVESTMENTS
Cash and investment balances from all funds are pooled and invested to the extent available in
authorized investments. Earnings from investments are allocated to individual finds on the basis of
the find's equity in the cash and investment pool.
Investments are stated at fair value, based upon quoted market prices. Investment income is accrued at
the balance sheet date.
For purposes of the statement of cash flows the Enterprise Fund considers all highly liquid investments
with a maturity of three months or less when purchased to be cash equivalents. All of the cash and
investments allocated to the Enterprise Fund have original maturities of 90 days or less. Therefore the
entire balance in the fund is considered cash equivalents.
G. RECEIVABLES AND PAYABLES
Property taxes and special assessments (see notes IH and I) have been reported net of estimated
uncollectible accounts. Because utility bills are considered liens on property, no estimated
uncollectible amounts are established. Uncollectible amounts are not material for other receivables
and have not been reported.
H. PROPERTY TAX REVENUE RECOGNITION
The City Council annually adopts a tax levy and certifies it to the County in December
(levy /assessment date) of each year for collection in the following year. The County is responsible for
billing and collecting all property taxes for itself, the City, the local School District and other taxing
authorities. Such taxes become a lien on January 1 and are recorded as receivables by the City at that
date. Real property taxes are payable (by property owners) on May 15 and October 15 of each
calendar year. Personal property taxes are payable by taxpayers on February 28 and June 30 of each
year. These taxes are collected by the County and remitted to the City on or before July 7 and
December 2 of the same year. Delinquent collections for November and December are received the
39
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
WVYIdWdYd' uitdW11ui4ilYVIIIWI1WIppuIYWYIWI11aYtlIW111hIY4' 1YIIdYYItluYYW UU11i18tl ull Ytll'JIYIIJUI, Yidll dl JlliY' dY1tlIW 'JI'W4iW1'IYli01'Y.WWWYJiY JdYi' J! Y' WL' IbW' WIWWdJJYIOWeY11YIYWI111iWWYlYIdtlWWWYUeYWY41 'uVYdYW1W �- � " WY641YIWYYdWWYtlWYYW dtdY.JtlJWwiLYIY,LII,dWYItWtlWWIli6
following January. The City has no ability to enforce payment of property taxes by property owners.
The County possesses this authority.
Government -Wide Financial Statements
The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible
property taxes are not material and have not been reported.
Governmental Fund Financial Statements
The City recognizes property tax revenue when it becomes both measurable and available to finance
expenditures of the current period. In practice, current and delinquent taxes and State credits received
by the City in July, December and January are recognized as revenue for the current year. Taxes
collected by the County by December 31 (remitted to the City the following January) and taxes and
credits not received at the year end are classified as delinquent and due from County taxes receivable.
The portion of delinquent taxes not collected by the City in January are fully offset by deferred
revenue because they are not available to finance current expenditures.
I, SPECIAL. ASSESSMENT REVENUE RECOGNITION
Special assessments are levied against benefited properties for the cost or a portion of the cost of
special assessment improvement projects in accordance with State Statutes. These assessments are
collectible by the City over a term of years usually consistent with the term of the related bond issue.
Collection of annual installments (including interest) is handled by the County Auditor in the same
manner as property taxes. Property owners are allowed to (and often do) prepay future installments
without interest or prepayment penalties.
Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that
property until frill payment is made or the amount is determined to be excessive by the City Council or
court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit
sale. Proceeds of sales from tax forfeit properties are allocated first to the County's costs of
administering all tax forfeit properties. Generally, the City will collect the full amount of its special
assessments not adjusted by City Council or court action. Pursuant to State Statutes, a property shall
be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or seasonal
recreational land in which event the property is subject to such sale after five years.
Government -Wide Financial Statements
The City recognizes special assessment revenue in the period that the assessment roll was adopted by
the City Council. Uncollectible special assessments are not material and have not been reported.
Governmental Fund Financial Statements
Revenue from special assessments is recognized by the City when it becomes measurable and
available to finance expenditures of the current fiscal period. In practice, current and delinquent
special assessments received by the City are recognized as revenue for the current year. All remaining
delinquent and deferred assessments receivable in governmental funds are offset by deferred revenues.
40
CI'T'Y OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
J. INVENTORIES
The original cost of materials and supplies has been recorded as expenditures at the time of purchase.
The City does not maintain material amounts of inventories of goods and supplies.
K. PREPAID ITEMS
Certain payments to vendors reflect costs applicable to fixture accounting periods and are recorded as
prepaid items in both government -wide and fiord financial statements.
L. CAPITAL, ASSETS
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges,
sidewalks, and similar items), are reported in the applicable governmental or business -type activities
columns in the government -wide financial statements. Capital assets are defined by the government as
assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated
useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost
if purchased or constructed. Donated capital assets are recorded at estimated f ir market value at the
date of donation.
In the case of the initial capitalization of general infrastructure assets (i.e., those reported by
governmental activities) the government chose to include all such items regardless of their acquisition
date. These assets are reported at historical cost.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially
extend assets lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest
incurred during the construction phase of capital assets of business -type activities is included as part of
the capitalized value of the assets constructed. For the year ended December 31, 2004, no interest was
capitalized in connection with construction in progress.
Property, plant and equipment of the primary government, as well as the component units, is
depreciated using the straight line method over the following estimated useful lives:
Buildings and structures 50 years
Machinery and equipment 3 -20 years
Distribution and collection systems 50 years
Streets 25 years
Storm sewers 50 years
Pathways 20 years
41
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
M. COMPENSATED ABSENCES
It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay
benefits. All vacation pay and accumulated sick leave benefits that is vested as accrued when incurred
in the government -wide and proprietary find financial statements.
A liability for these amounts is reported in governmental finds only if they have matured, for example,
as a result of employee resignations and retirements. In accordance with the provisions of Statement
of Government Accounting Standards No. 16, Accounting for Coinpensuted Absences, no liability is
recorded for nonvesting accumulating rights to receive sick pay benefits.
N. LONG -TERM OBLIGATIONS
In the government -wide financial statements and proprietary find types in the fund financial
statements, long -term debt and other long -term obligations are reported as liabilities in the applicable
governmental activities, business -type activities, or proprietary fund type statement of net assets.
Bond premiums and discounts, as well as issuance costs, are immaterial and are expensed in the year
of bond issuance.
In the find financial statements, governmental find types recognize bond premiums and discounts, as
well as bond issuance costs, during the current period. The face amount of debt issued is reported as
other financing sources. Premiums received on debt issuances are reported as other financing sources
while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not
withheld from the actual debt proceeds received, are reported as debt service expenditures.
O. FUND EQUITY
In the find financial statements, governmental funds report reservations of fund balance for amounts
not appropriable for expenditure or legally segregated for a specific fixture use. Designated fund
balances represent tentative plans for fixture use of financial resources.
P. INTERFUND TRANSACTIONS
Interfind services provided and used are accounted for as revenues, expenditures or expenses.
Transactions that constitute reimbursements to a fund for expenditures /expenses initially made from it
that are properly applicable to another find, are recorded as expenditures /expenses in the reimbursing
find and as reductions of expenditures /expenses in the fund that is reimbursed. Interfund loans are
reported as an interfund loan receivable or payable which offsets the movement of cash between
finds. All other interf nd transactions are reported as transfers.
42
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
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Q. USE OF ESTIMATES
The preparation of financial statements in accordance with generally accepted accounting principles
(GAAP) requires management to make estimates that affect amounts reported in the financial
statements during the reporting period. Actual results could differ from such estimates.
Note 2 DEPOSITS AND INVESTMENTS
A. DEPOSITS
In accordance with Minnesota Statutes, the City maintains deposits at those depository banks
authorized by the City Council, 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.
Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City
Treasurer or in a financial institution other than that furnishing the collateral. Authorized collateral
includes the following:
a) United States government treasury bills, treasury notes, treasury bonds;
b) Issues of United States government agencies and instrumentalities as quoted by a recognized
industry quotation service available to the government entity;
c) General obligation securities of any state or local government with taxing powers which is rated
"A" or better by a national bond rating service, or revenue obligation securities of any state or
local government with taxing powers which is rated "AA" or better by a national bond rating
service;
d) Unrated general obligation securities of a local government with taxing powers may be pledged as
collateral against funds deposited by that same local government entity:
e) Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality
accompanied by written evidence that the bank's public debt is rated "AA" or better by Moody's
Investors Service, Inc. or Standard & Poor's Corporation; and
I) Time deposits that are fully insured by any Federal agency.
43
CITY OF OAK PARI{ HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Balances at December 31, 2004 are as follows:
Bank Carrying
Balances Amount
1) Insured or collateralized by securities held by the City
or its agent in the City's name. $7,445,013 $7,323,496
2) Collateralized with securities held by the pledging institution
trust department in the City's name. -
3) Uncollateralized or collateralized with securities
not in the City's name. - -
Totals $7,445,013 $7,323,496
B. INVESTMENTS
Minnesota Statutes authorize the City to invest in the following:
a) Direct obligations or obligations guaranteed by the United States or its agencies, its
instrumentalities or organizations created by an act of congress, excluding mortgage - backed
securities defined as high risk.
b) Shares of investment companies registered under the Federal Investment Company Act of 1940
and whose only investments are in securities described in (a) above, general obligation tax- exempt
securities, or repurchase or reverse repurchase agreements.
c) Obligations of the State of Minnesota or any of its municipalities as follows:
1) any security which is a general obligation of any state or local government with taxing
powers which is rated "A" or better by a national bond rating service;
2) any security which is a revenue obligation of any state or local government with taxing
powers which is rated "AA" or better by a national bond rating service; and
3) a general obligation of the Minnesota housing finance agency which is a moral obligation of
the State of Minnesota and is rated "A" or better by a national bond rating agency.
d) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System.
e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the
highest quality, and maturing in 270 days or less.
f) Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve
System with capitalization exceeding $10,000,000; a primary reporting dealer in U.S. government
securities to the Federal Reserve Bank of New York; certain Minnesota securities broker - dealers;
or, a bank qualified as a depositor.
44
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
g) General obligation temporary bonds of the same governmental entity issued under section
429.091, subdivision 7; 469.178, subdivision 5; or 475.6 1, subdivision 6.
Balances at December 31, 2004 were:
Carrying
Custodial Credit Risk category Amount
Securities Type 1 2 3 (at Fair Value)
U.S. Government and Agency Securities $1,038,939 $ - $ - $1,038,939
Investments not subject to credit risk categorization:
4M Fund and money market 205,764
Total investment 1,244,703
Deposits 7,323,496
Total deposits and investments 8,568,199
Petty cash fund 100
Total $8,568,299
The City's investments are categorized above to give an indication of the level of custodial credit risk
assumed at year end. Category 1 includes investments that are insured or registered or for which the
securities are held by the City or its agent in the City's name. Category 2 includes uninsured or
unregistered investments for which the securities are held by the counterparty's trust department or
agent in the City's name. Category 3 includes uninsured and unregistered investments for which the
securities are held by the counterparty or by its trust department or agent but not in the City's name.
Following is a reconciliation of the City's deposit and investment balances as of December 31, 2004:
Government -wide statement of net assets $8,515,547
Fiduciary funds statement of net assets 52,752
Total $8,568,299
45
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 3 RECEIVABLES
Significant receivable balances not expected to be collected within one year of December 31, 2004 are as
follows:
Major Funds
G.O Improvement AAE - Storm
Bonds of Sewer Connection Nonmajor
General 1998 Fund Funds Total
Special assessments receivable $ - $637,046 $18,986 $57,436 $713,468
Delinquent property taxes 16,530 - - 521 17,051
Total $16,530 $637,046 $18,986 $57,957 $730,519
Governmental fiords report deferred revenue in connection with receivables for revenues that are not considered
to be available to liquidate liabilities of the current period. Governmental fiords also defer revenue recognition
in connection with resources that have been received, but not yet earned. At the end of the current fiscal year,
the various components of deferred revenue and unearned revenue reported in the governmental funds were as
follows:
Unavailable Unearned
Delinquent property taxes receivable (General Fund) $40,361 $ -
Delinquent property taxes receivable (Nonmajor Funds) 1,273 -
Special assessments receivable (Nonmajor Funds) 127,571 -
Special assessments receivable (G.O. Improvement Bonds of 1998 Fund) 710,264
Special assessments receivable (AAE - Storm Sewer Connection Fund) 37,973 -
Total deferred /unearned revenue for governmental funds $917,442 $0
46
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 4 CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2004 as previously reported was as follows:
Beginning
Beginning Balance, Ending
Primary Government Balance Restated as Restated Increases Decreases Balance
Governmental activities:
Capital assets, not being depreciated:
Land $1,183,690 $431,425 $1,615,115 $ - $ - $1,615,115
Construction in proencss - 1,089,842 1,089,842 622,218 (155,429) 1,556,631
Total capital assets, not being depreciated 1,183,690 1,521,267 2,704,957 622,218 (155,429) 3,171,746
Capital assets, being depreciated:
Buildings and structures 1,150,544 - 1,150,544 - (32,398) 1,118,146
Otherunprovements 587,601 - 587,601 - (26,638) 560,963
Machmey and equipment 450,396 450,396 44,566 (88,902) 406,060
Furniture and fixtures 213,296 - 213,296 5,538 (78,913) 139,921
Infrastructure - 10,047,511 10,047,511 96,723 - 10,144,234
Total capital assets, being depreciated 2,401,837 10,047,511 12,449,348 146,827 (226,851) 12,369,324
Less accumulated depreciation for
Buildings and structures - 381,644 381,644 25,404 (32,398) 374,650
Other improvements 141,923 141,923 5,426 (26,638) 120,711
Machinery and equipment 264,611 264,611 49,246 (88,902) 224,955
Furniture and fixtures 154,971 154,971 11,283 (78,913) 87,341
Infrastructure - 2,889,792 2,889,792 318,906 3,208,698
Total accumulated depreciation 0 3,832,941 3,832,941 410,265 (226,851) 4,016,355
Total capital assets being depreciated - net 2,401,837 6,214,570 8,616,407 (263,438) 8,352,969
Governmental activities capital assets - net $3,585,527 $7,735,837 $11,321,364 $358,780 ($155,429) $11,524,715
n Restated for previously unreported infrastructure, construction in progress and accumulated depreciation as of December 31, 2003.
47
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Beginning Ending
Balance Increases Decreases Balance
Business -type activities:
Capital assets, not being depreciated:
Land $60,000 $ $ $60,000
Total capital assets, not being depreciated 60,000 0 0 60,000
Capital assets, being depreciated:
Buildings and structures 1,320,334 1,320,334
Machinery and equipment 205,039 14,992 (6,072) 213,959
Distribution and collection systems 6,454,890 58,705 6,513,595
Total capital assets, being depreciated 7,980,263 73,697 (6,072) 8,047,888
Less accumulated depreciation:
Buildings and structures 432,906 29,858 462,764
Machinery and equipment 92,259 10,031 (5,353) 96,937
Distribution and collection systems 1,772,844 129,106 1,901,950
Less accumulated depreciation 2,298,009 168,995 (5,353) 2,461,651
Total capital assets being depreciated - net 5,682,254 (95,298) (719) 5,586,237
Business -type activities capital assets - net $5,742,254 ($95,298) ($719) $5,646,237
Depreciation expense was charged to functions /programs of the primary government as follows:
Governmental activities:
General government $33,051
Public safety 32,969
Public works 306,285
Recreation 37,960
Total depreciation expense - governmental activities $410,265
Business -type activities:
Water $94,414
Sewer 74,581
Total depreciation expense - business -type activities $168,995
48
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 5 LONG -TERM DEBT
The City issues general obligation bonds to provide finds for the acquisition and construction of major capital
facilities. The reporting entity's long -term debt is segregated between the amounts to be repaid from
governmental activities and amounts to be repaid from business -type activities.
As of December 31, 2004, the long -term debt of the financial reporting entity consisted of the following:
Final Authorized
Issue Maturity Interest And Outstanding
Date Date Rate Issued 12/31/04
Governmental Activities:
General obligation bonds:
G.O. Refunding Bonds of 2002 11/01/02 12/01/06 2.25 -2.65 $510,000 $225,000
Improvement bonds:
G.O. Improvement Bonds of 1998 10/01/98 12/01/13 4.00 -4.50 1,990,000 1,125,000
G.O. Refunding Bonds of 2001 11/01/01 12/01/05 3.25 490,000 1 10,000
Compensated absences payable 163,934
Total governmental activities 1,623,934
Business -Type Activities:
Compensated absences payable 18,433
Total City indebtedness $1,642,367
Annual debt service requirements to maturity for long -term debt are as follows:
Year General Obligation Bonds G.O. Improvement Bonds
Ending Governmental Activities Governmental Activities
December 31, Principal Interest Principal Interest
2005 $160,000 $5,323 $235,000 $51,387
2006 65,000 1,722 125,000 42,813
2007 - - 125,000 37,687
2008 - - 125,000 32,500
2009 - - 125,000 27,250
2010 - - 125,000 21,938
2011 - - 125,000 16,562
2012 - - 125,000 11,125
2013 - - 125,000 5,625
Total $225,000 $7,045 $1,235,000 $246,887
49
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
It is not practicable to determine the specific year for payment of accrued compensated absences.
Change in LonR -Term Liabilities
Long -term liability activity for the year ended December 31, 2004, was as follows:
Balance Balance Due Within
01/01/04 Additions Reductions 12/31/04 One Year
Governmental Activities:
Bonded debt:
General obligation $375,000 $ $150,000 $225,000 $160,000
Improvement bonds 1,485,000 250,000 1,235,000 235,000
Compensated absences 159,080 62,762 57,908 163,934 17,827
Total governmental activities $2,019,080 $62,762 $457,908 $1,623,934 $412,827
Business -Type Activities:
Compensated absences $35,544 $9,099 $26,210 $18,433 $2,004
Total business -type activities $35,544 $9,099 $26,210 $18,433 $2,004
For the governmental activities, compensated absences are generally liquidated by the general fund. All
long -term bonded indebtedness outstanding at December 31, 2004 is backed by the full faith and credit of
the City, including improvement bond issues. Delinquent assessments receivable at December 31, 2004
were $2,745.
50
CITY OF OAK PARK HEIGI -ITS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 6 LEGAL DEBT MARGIN
The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable
principally from property taxes. The City's legal debt margin for 2004 is computed as follows:
December 31,
2004
Market value $447,871,200
Debt limit percentage 2.00%
Debt limit 8,957,424
Amount of debt applicable to debt limit:
Total bonded debt 1,460,000
Less:
Non applicable debt:
Revenue bonds (225,000)
Improvement bonds (1,235,000)
Total amount of debt applicable to debt limit 0
Legal debt margin $8,957,424
Note 7 PENSION PLANS
A. PERA DEFINED BENEFIT PLAN
PLAN DESCRIPTION
All frill -time and certain part -time employees of the City are covered by defined benefit plans administered
by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public
Employees Retirement Fund (PERF) and the Public Employees Police and Fire Fund (PEPFF) which are
cost - sharing, multiple- employer retirement plans. These plans are established and administered in
accordance with Minnesota Statute, 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. All police officers, firefighters and peace officers who qualify for membership by
statute are covered by the PEPFF.
51
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENT'S
December 31, 2004
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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 defined retirement benefits are based on a member's highest average salary for any
five successive years of allowable service, age, and years of credit at termination of service.
The benefit provisions stated in the previous paragraphs of this section are current provisions and
apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not
receiving them yet are bound by the provisions in effect at the time they last terminated their public
service.
PERA issues a publicly available financial report that includes financial statements and required
supplementary information for PERF and PEPFF. That report may be obtained by writing to PERA, 60
Empire Drive #200, St. Paul, Minnesota, 55103 -2088 or by calling (651)296 -7460 or 1- 800 - 652 -9026.
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 9.10% and 5.10 %, respectively, of their annual
covered salary. PEPFF members are required to contribute 6.20% of their annual covered salary. The
City is required to contribute the following percentages of annual covered payroll: 11.78% for Basic
Plan PERF members, 5.53% for Coordinated Plan PERF members, and 9.30% for PEPFF members.
The City's contributions to the Public Employees Retirement Fund for the years ending December 31,
2004, 2003 and 2002 were $31,632, $31,701 and $38,971, respectively. The City's contributions to
the Public Employees Police and Fire Fund for the years ending December 31, 2004, 2003 and 2002
were $58,277, $55,917 and $54,554, respectively. The City's contributions were equal to the
contractually required contributions for each year as set by state statute.
B. DEFINED CONTRIBUTION PLAN
The City administrator does not participate in PERA, but is covered by a defined contribution plan
administered by the ICMA Retirement Corporation. The Plan is a tax qualified plan under Section 457
of the Internal Revenue Code and all contributions by or on behalf of the employee are tax deferred
until time of withdrawal.
The City is required to contribute 10% of the annual base salary. Plan provisions and contribution
requirements are established and may be amended by the City council. Employer contributions were
$7,794 for the year ended December 31, 2004.
52
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note S INTERFUND TRANSFERS
Transfer In
Major Funds Major Business -
G.O. Improvement Nonmajor Type Fund
Bonds of Renewal and Governmental Utility
1998 Fund Replacement Fund Funds Fund Total
Transfer out:
Governmental activities:
General Fund $ $ $224,800 $88,500 $313,300
AAE - Storm Sewer Connection Fund 17,600 - - 17,600
Nonmajor Governmental Funds 37,400 - 55,000 92,400
Business -type Fund:
Utility Fund - 154,023 24,900 - 178,923
Total transfers $55,000 $154,023 $304,700 $88,500 $602,223
Interfurnd transfers allow the City to allocate financial resources to the funds that receive benefit from services
provided by another fund. With the exception of Renewal and Replacement, all of the City's interfund
transfers fall under that category. The transfer to Renewal and Replacement allows the City to accumulate
resources to be used for improvements. All of the 2004 transfers are considered routine and consistent with
previous practices.
Note 9 CONTINGENCIES
A. LITIGATION
The City attorney has indicated there are no existing and pending lawsuits, claims and other actions in
which the City is a defendant.
B. FEDERAL AND STATE FUNDS
The City receives financial assistance from federal and state governmental agencies in the form of
grants. The disbursement of funds received under these programs generally requires compliance with
the terms and conditions specified in the grant agreements and is subject to audit by the grantor
agencies. Any disallowed claims resulting from such audits could become a liability of the applicable
fund. However, in the opinion of management, any such disallowed claims will not have a material
effect on any of the financial statements of the individual fund types included herein or on the overall
financial position of the City at December 31, 2004.
53
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 10 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.
Workers compensation coverage is provided through a pooled self - insurance program through the League of
Minnesota Cities Insurance Trust (LMCIT). The City pays an annual premium to LMCIT. The City is subject
to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through Workers
Compensation Reinsurance Association (WCRA) as required by law. For workers compensation, the City is
not subject to a deductible. The City's workers compensation coverage is retrospectively rated. With this type
of coverage, final premiums are determined after loss experience is known. The amount of premium
adjustment, if any, is considered immaterial and not recorded until received or paid.
Property and casualty insurance coverage is provided through a pooled self - insurance program through the
LMCIT. The City pays an annual premium to the LMCIT. The City is subject to supplemental assessments if
deemed necessary by the LMCIT. The LMCIT reinsures through commercial companies for claims in excess
various amounts. The City retains risk for deductible portions. These deductibles are considered immaterial to
the financial statements.
Employee health and disability insurance is provided through commercial insurance. The City does not have a
deductible or yearly maximum on this insurance.
There were no significant reductions in insurance from the previous year or settlements in excess of insurance
coverage for any of the past three fiscal years.
54
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
YYIJtl!IYd11WLW1,11d!,YI AAA I W1: 1I1AWYdu, I1: WL1l IW: 4' YJLWYIddIIYllLJ: uILIWWIl Yd65YWlld' da4! A' 41YY1' YLLWYWeddWYWIYWWJJYl d4Y' Yil 'WYdIYWLWYIYub'Yd:1'NW'YIIWYpI LIW'W'YWiIlu6VY4YY:'JWIWUIUOYWd IId11dWY11WIItlidl: lfliLlldi4i1Y11111WelI1VtY1 'WIduWYwuYW'J
Note l l DESIGNATIONS AND RESERVATIONS OF FUND EQUITY
At December 31, 2004 the City had designated and reserved portions of its various fund equities through legal
restriction and City Council authorization. Major fiend equity appropriations at December 31, 2004 are shown
on the various balance sheets as segregations of the fund equity. A summary of such reservations and
designations is as follows:
December 31,
2004
Governmental Funds:
Major Funds:
General Fund:
Designated for cash flow $1,147,000
Designated for contingent employee benefit 133,961
Designated for general contingency 419,000
G.O. Improvement Bonds of 1998:
Reserved for debt service 113,144
Renewal and Replacement Fund:
Designated for capital improvements 2,407,576
AAE -Storm Sewer Connection Fund:
Designated for capital improvements 636,560
Designated for committed contracts 228,730
Nonmajor Funds:
Reserved for debt service 341,550
Designated for special revenue programs 81,167
Designated for capital improvements 2,108,868
Totals $7,617,556
Note 12 MAJOR TAXPAYER
The City has one major taxpayer, Xcel Energy. The total tax capacity value for this taxpayer represented
approximately 25% of the City's total tax capacity value for taxes payable in 2004.
55
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
uua'v�,wwww ' m�' wu, uw' uauwuaua bwn:' wuwmuuuowauwwwiwuwmuruon, uomud, wwwoowr uuuwwu, uwruwuuansuwitmmsiimww :u'aiaw�uiwwa' arm!': wuuauu, wwwi: uwwwwm: u! wauadua�uurwiasweuwwwuu�twwuumuuwu�uatuwwuuv,
Note 13 CONDUIT DEBT OBLIGATIONS
From time to time, the City has issued Rental Housing or Industrial Revenue Bonds to provide financial
assistance to private - sector entities for the acquisition and construction of rental housing, office space or a
clinic deemed to be in the public interest. The bonds are secured by the property financed and are payable
solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of
the acquired facilities transfers to the private - sector entity served by the bond issuance. Neither the City, the
State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds.
Accordingly, the bonds are not reported as liabilities in the accompanying financial statements.
As of December 31, 2004, there were four series of Industrial Revenue Bonds outstanding. The principal
amount payable at December 31, 2004 could not be determined; however, their original issue amounts totaled
$34,985,000.
Note 14 COMMITMENTS
Construction commitments at December 31, 2004 were composed of the following:
Expended Remaining
Contract as of Contract
Description Authorized 12/31/04 Commitment
Kern Center Pond Expansion $288,462 $59,732 $228,730
McKean Square 1,124,822 1,036,251 88,571
The McKean Square contract is 100% developer reimbursed.
56
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note 15 CHANGE IN ACCOUNTING PRINCIPLE
In June 1999, the Governmental Accounting Standards Board (GASB) approved Statement No. 34, Basic
Financial Statements — and Management's Discussion and Analysis — for State and Local Governments. The
City is required to implement GASB 34 no later than the year ended December 31, 2004. The most significant
effects of implementing GASB 34 during 2004 are as follows:
• Government -wide financial statements are prepared using frill accrual accounting for all the City's
activities.
• Infrastructure and construction in progress for governmental activities has been capitalized and all
capital assets are depreciated on the government -wide financial statements. See Note 4 for restatement
of previously reported amounts.
• The basic find financial statements focus on major funds rather than find types.
• A Management's Discussion and Analysis (MD &A) is included as required supplementary
information.
These and other changes are reflected in the accompanying financial statements (including notes to the financial
statements).
The City also implemented the following pronouncements during 2004, which did not have a material effect on
the accompanying financial statements:
• GASB Statement 37, Basic Financial Statements — and Management's Discussion and Analysis -for
State and Local Governments: Omnibus — an Amendment of GASB Statements No. 21 and No. 34.
• GASB Statement 38, Certain Financial Statement Note Disclosures
57
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58
REQUIRED SUPPLEMENTARY INFORMATION
59
CITY OI+ OAK PARK HEIGHTS, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 1 of 4
For The Year Ended December 31, 2004
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenue:
General property taxes:
Current and delinquent $1,904,203 $1,904,203 $1,893,204 ($10,999)
Payment in lieu of taxes 15,000 15,000 17,209 2,209
Other taxes - - 435 435
Total general property taxes 1,919,203 1,919,203 1,910,848 _ (8,355)
Intergovernmental:
Federal:
Safe and sober 8,000 8,000 8,402 402
Underage compliance checks 1,500 1,500 - (1,500)
State:
Police aid 56,000 56,000 55,912 (88)
Police training aid - - 2,507 2,507
PERA rate increase aid 2,040 2,040 3,060 1,020
County:
Recycling grant 13,538 13,538 - (13,538)
Gravel tax allocation 700 700 - (700)
Met council planning grant - - 481 481
Total intergovernmental 81,778 81,778 70,362 (11,416)
Licenses and permits 157,315 181,815 304,594 122,779
Charges for services:
General government 15,000 15,000 8,929 (6,071)
Inspections - City of Bayport 41,000 41,000 50,337 9,337
Administrative - Enterprise Fund 90,860 90,860 90,860 -
Total charges for services 146,860 146,860 150,126 3,266
Fines and forfeits 69,000 69,000 78,274 9,274
Earnings on investments 28,000 28,000 39,188 11,188
Refunds and reimbursements 60,900 60,900 88,860 27,960
Donations and contributions - - 250 250
Sale of property - - 1,508 1,508
Total revenue 2,463,056 2,487,556 2,644,010 156,454
Expenditures:
General government:
Mayor and council:
Current:
Personal services 38,990 38,990 38,891 99
Materials and supplies 1,000 1,000 499 501
Contractual services 24,000 24,000 14,981 9,019
Total mayor and council 63,990 63,990 54,371 9,619
60
CITY OF OAK PARK HEIGHTS, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 2 of 4
For The Year Ended December 31, 2004
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Expenditures: (continued)
General government: (continued)
City administration:
Current:
Personal services $161,860 $161,860 $162,713 ($853)
Materials and supplies 3,950 3,950 2,471 1,479
Contractual services 11,900 11,900 7,684 4,216
Total City administration 177,710 177,710 172,868 4,842
Legal:
Current:
Personal services 30,000 30,000 17,823 12,177
General management and building:
Current:
Materials and supplies 7,600 7,600 5,775 1,825
Contractual services 55,775 55,775 56,160 (385)
Total current 63,375 63,375 61,935 1,440
Capital outlay - - 15,878 (15,878)
Total general management and building 63,375 63,375 77,813 (14,438)
Elections:
Current:
Personal services 5,000 5,000 4,029 971
Materials and supplies 450 450 637 (187)
Contractual services 340 340 340 -
Total elections 5,790 5,790 5,006 784
Finance:
Current:
Personal services 154,250 154,250 153,112 1,138
Materials and supplies 2,250 2,250 1,890 360
Contractual services 3,450 3,450 2,081 1,369
Total finance 159,950 159,950 157,083 2,867
Computer system:
Current:
Materials and supplies 1,000 1,000 4,282 (3,282)
Contractual services 19,000 19,000 5,098 13,902
Total computer system 20,000 20,000 9,380 10,620
Audit:
Current:
Personal services 14,500 14,500 16,498 (1,998)
Insurance:
Current:
Contractual services 250,350 250,350 235,559 14,791
Assessing:
Current:
Personal services 18,700 18,700 18,126 574
61
CITY OF OAK PARK HEIGHTS, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 3 of 4
For The Year Ended December 31, 2004
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Expenditures: (continued)
General government: (continued)
Planning and zoning:
Current:
Personal services $27,000 $27,000 $22,242 $4,758
Materials and supplies 100 100 - 100
Contractual services 2,050 2,050 1,075 975
Total planning and zoning 29,150 29,150 23,317 5,833
Engineering:
Current:
Personal services 27,000 27,000 14,673 12,327
General contingency:
Current:
Contractual services 10,000 9,150 6,764 2,386
Total general government 870,515 869,665 809,281 60,384
Public safety:
Police department:
Current:
Personal services 812,355 812,355 783,662 28,693
Materials and supplies 28,550 28,550 27,820 730
Contractual services 39,250 _ 39,250 41,389 (2,139)
Total police department 880,155 880,155 852,871 27,284
Building inspections:
Current:
Personal services 100,460 124,960 114,896 10,064
Materials and supplies 2,800 2,800 3,446 (646)
Contractual services 7,025 7,025 19,369 (12,344)
Total building inspections 110,285 134,785 137,711 (2,926)
Fire protection:
Current:
Contractual services 118,185 118,185 118,183 2
Animal control:
Current:
Materials and supplies 150 150 41 109
Contractual services 1,750 1,750 1,003 747
Total animal control 1,900 1,900 1,044 856
Total public safety 1,110,525 1,135,025 1,109,809 25,216
62
CITY OF OAK PARK HEIGHTS, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 4 of 4
For The Year Ended December 31, 2004
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Expenditures: (continued) Original Final Amounts (Negative)
Public works:
Street maintenance:
Current:
Personal services $22,525 $22,525 $18,345 $4,180
Materials and supplies 3,880 3,880 3,780 100
Contractual services 13,605 18,605 19,278 (673)
Total street maintenance 40,010 45,010 41,403 3,607
Snow removal:
Current:
Materials and supplies 1,500 1,500 698 802
Contractual services 60,400 60,400 52,779 7,621
Total snow removal 61,900 61,900 53,477 8,423
Street lighting:
Current:
Contractual services 48,000 48,000 47,446 554
Arborist:
Current:
Personal services 12,600 15,000 11,746 3,254
Materials and supplies 150 150 66 84
Contractual services 155 155 155 -
Total arborist 12,905 15,305 11,967 3,338
Tree removal and planting:
Current:
Contractual services 12,600 13,450 16,150 (2,700)
Total public works 175,415 183,665 170,443 13,222
Parks and recreation:
Parks, playgrounds and rinks:
Current:
Personal services 55,610 55,610 41,375 14,235
Materials and supplies 5,110 5,110 3,934 1,176
Contractual services 49,675 49,675 42,871 6,804
Total parks and recreation 110,395 110,395 88,180 22,215
Total expenditures 2,266,850 2,298,750 2,177,713 121,037
Revenue over expenditures 196,206 188,806 466,297 277,491
Other financing sources (uses):
Transfers to Capital Project Fund (99,800) (99,800) (224,800) (125,000)
Transfers to Enterprise Fund (88,500) (88,500) (88,500) -
Total other financing sources (uses) (188,300) (188,300) (313,300) (125,000)
Net increase in fund balance $7,906 $506 152,997 $152,491
Fund balance - January 1 1,694,611
Fund balance - December 31 $1,847,608
63
CITY OF OAK PARK HEIGHTS, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
NOTE TO RSI
December 31, 2004
Note A LEGAL COMPLIANCE — BUDGETS
The General Fund budget is legally adopted on a basis consistent with accounting principals generally accepted
in the United States of America. The legal level of budgetary control is at the department level for the General
Fund. The following is a listing of General Fund departments whose expenditures exceed budget
appropriations.
Expenditures
Exceeding
Fund and Department Budget Actual Budget
Major Fund:
General fund:
General management and building $63,375 $77,813 $14,438
Audit 14,500 16,498 1,998
Building inspections 134,785 137,711 2,926
Tree removal and planting 13,450 16,150 2,700
64
COMBINING AND INDIVIDUAL FUND STATEMENTS AND
SCHEDULES
65
This page intentionally left blank -
66
NONMAJOR GOVERNMENTAL. FUNDS
67
CITY OF OAK PARK HEIGHTS, MINNESOTA
COMBINING BALANCE SHEET Statement 11
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2004
Total
Nonmajor
Special Debt Capital Governmental
Assets Revenue Service Project Funds
Cash and investments $79,976 $333,986 $2,144,747 $2,558,709
Accrued interest receivable 1,191 6,431 28,890 36,512
Accounts receivable - - 3,442 3,442
Due from developers - - 6,958 6,958
Taxes receivable:
Delinquent - 1,273 - 1,273
Due from County - 485 - 485
Special assessments receivable - 27,098 101,121 128,219
Total assets $81,167 $369,273 $2,285,158 $2,735,598
Liabilities and Fund Balance
Liabilities:
Accounts payable $ - $ - $4,430 $4,430
Contracts payable - - 70,739 70,739
Deferred revenue - 27,723 101,121 128,844
Total liabilities 0 27,723 176,290 204,013
Fund balance:
Reserved - 341,550 - 341,550
Unreserved:
Designated 81,167 - 2,108,868 2,190,035
Total fund balance 81,167 341,550 2,108,868 2,531,585
Total liabilities and fund balance $81,167 $369,273 $2,285,158 $2,735,598
68
CITY OF OAK PARK HEIGHTS, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 12
CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2004
W,u eu v,'i,WWlvd'Y WUddwlf'ilWll dlvWlloI WWI YW',dVY,: WYWI,. JalidYll ➢YILL1fnlJAl lJlWllWWlfWfy'lllWldYL dfILl4 Y "Y LLYVWIYi Wl IWlWlWllYY WvWIYWd14 LL41'¢Jl „ldiv NLWYJ' lLLIIVJWt ,111J'uW1YYliWWW'.VIWSW4 UlY'WII IY1WdW'Wil1W WLL "lyLdL YL'JJdW Wl1WVWdWU1d,4LWWJ1 "uW.L.lu3lY dl,YYIYYdWWU JWdu 111WlYdflYfl ud441lff v 11, vuJ.
Total Nonmajor
Special Debt Capital Governmental
Revenue Service Project Funds
Revenues:
General property taxes $ - $58,359 $ - $58,359
Special assessments - 33,438 138,122 171,560
Earnings on investments 2,358 12,733 54,438 69,529
Direct charges to developers - - 16,738 16,738
Refunds and reimbursements 556 - 20,542 21,098
Donations and contributions - - 250 250
Other 9,999 - 8,320 18,319
Total revenues 12,913 104,530 238,410 355,853
Expenditures:
Current:
General govermnent 468 - - 468
Public safety 9,724 - - 9,724
Public works - - 126,554 126,554
Capital outlay 5,538 - 28,688 34,226
Debt service:
Principal - 275,000 - 275,000
Interest - 15,647 - 15,647
Construction costs - - 172,134 172,134
Total expenditures 15,730 290,647 327,376 633,753
Revenues over (under) expenditures (2,817) (186,117) (88,966) (277,900)
Other financing sources (uses):
Transfers from other fiends - 55,000 249,700 304,700
Transfers to other fiends - - (92,400) (92,400)
Total other financing sources (uses) 0 55,000 157,300 212,300
Net increase (decrease) in fund balance (2,817) (131,117) 68,334 (65,600)
Fund balance - January 1 83,984 472,667 2,040,534 2,597,185
Fund balance - December 31 $81,167 $341,550 $2,108,868 $2,531,585
69
CITY OF OAK PARK HEIGHTS, MINNESOTA
SUBCOMBINING BALANCE SHEET Statement 13
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2004
Total
Nonmajor
Forfeiture Special
and Economic Revenue
Seizure Development Funds
Assets
Cash and investments $28,380 $51,596 $79,976
Accrued interest receivable 463 728 1,191
Total assets $28,843 $52,324 $81,167
Liabilities and Fund Balance
Liabilities $ - $ - $ -
Fund balance:
Unreserved:
Designated for special revenue programs 28,843 52,324 81,167
Total liabilities and fiend balance $28,843 $52,324 $81,167
70
CITY OF OAK PARK HEIGHTS, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, Statement 14
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31, 2004
Total
Forfeiture Nonmajor
and Economic Special Revenue
Seizure Development Funds
Revenue:
Earnings on investments $917 $1,441 $2,358
Refunds and reimbursements 556 - 556
Confiscated property 9,999 - 9,999
Total revenue 11,472 1,441 12,913
Expenditures:
General government:
Current:
Contractual services - 468 468
Public safety:
Current:
Materials and supplies 9,208 - 9,208
Contractual services 516 - 516
Capital outlay 5,538 - 5,538
Total expenditures 15,262 468 15,730
Revenue over (under) expenditures (3,790) 973 (2,817)
Fund balance - January 1 32,633 51,351 83,984
Fund balance - December 31 $28,843 $52,324 $81,167
71
CITY OF OAK PARK HEIGHTS, MINNESOTA
SUBCOMBINING BALANCE SHEET Statement 15
NONMAJOR DEBT SERVICE FUNDS
December 31, 2004
Total
G.O. G.O. Nonmajor
Refunding Refunding Debt
Bonds Bonds Service
of 2002 of 2001 Funds
Assets
Cash and investments $262,232 $71,754 $333,986
Accrued interest receivable 4,786 1,645 6,431
Taxes receivable:
Delinquent - 1,273 1,273
Due from County - 485 485
Special assessments:
Delinquent - 311 311
Deferred - 26,139 26,139
Due from County - 648 648
Total assets $267,018 $102,255 $369,273
Liabilities and Fund Balance
Liabilities:
Deferred revenue $ - $27,723 $27,723
Fund balance:
Reserved for debt service 267,018 74,532 341,550
Total liabilities and fund balance $267,018 $102,255 $369,273
72
CITY OF OAK PARK HEIGHTS, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, Statement 16
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2004
iu „u,;ivae ,,, wow "ua weux u;,xw wiuw ri, u.ouim.uw uu u; ww ;wuu.uwd, umr, ww ;yww;wu;wu,uuowuu;u;nWe.mu ewuwu¢wuauwww,wowwawnis;m uvu uwwu,uu;utmwud,a,xwaWUwumux uwm wuriweninw; uuuu' eneswuuumwuwxweo ;uwwuww,au;u3uur. ;wrv;nw.uaav uusx;rlinw;,uw w; muvw�uu, a,di n,a „u ,m.
Total
G.O. G.O Nonmajor
Refunding Refunding Debt
Bonds Bonds Service
of 2002 of 2001 Funds
Revenue:
General property taxes:
Current and delinquent $ - $58,359 $58,359
Special assessments:
Current and delinquent - 31,654 31,654
Prepayments - 1,587 1,587
Penalties and interest - 197 197
Earnings on investments 9,476 3,257 12,733
Total revenue 9,476 95,054 104,530
Expenditures:
Debt service:
Principal 150,000 125,000 275,000
Interest 8,322 7,325 15,647
Total expenditures 158,322 132,325 290,647
Revenue over (under) expenditures (148,846) (37,271) (186,117)
Other financing sources:
Transfer from Capital Project Fund 55,000 - 55,000
Net increase (decrease) in fund balance (93,846) (37,271) (131,117)
Fund balance - January 1 360,864 111,803 472,667
Fund balance - December 31 $267,018 $74,532 $341,550
73
CITY OF OAK PARK HEIGHTS, MINNESOTA
SUBCOMBINING BALANCE S14EET
NONMAJOR CAPITAL PROJECT FUNDS
December 31, 2004
401
Budgeted
500 Projects
Capital and 405 565
Revolving Equipment Park Street
Fund Revolving Development Reconstruction
Assets
Cash and investments $424,294 $392,215 $319,594 $400,164
Accrued interest receivable 5,803 3,616 4,481 5,610
Accounts receivable - 3,442 - -
Due from developers - - - -
Special assessments receivable:
Deferred 53,882 - - -
Total assets $483,979 $399,273 $324,075 $405,774
Liabilities and Fund Balance
Liabilities:
Accounts payable $1,156 $3,194 $ - $ -
Contracts payable 63,861 - - -
Deferred revenue 53,882 - - -
Total liabilities 118,899 3,194 0 0
Fund balance:
Unreserved:
Designated for capital improvement 365,080 396,079 324,075 405,774
Total liabilities and fund balance $483,979 $399,273 $324,075 $405,774
74
Statement 17
AAE Totals
406 711 730 771 Nonmajor
Brekke Water Oak Park Sanitary 772 Capital
Park Tower Station Sewer Water Project
Memorial Rental Phase I Connection Connection Funds
$226 $8,334 $ - $387,480 $212,440 $2,144,747
3 15 - 5,767 3,595 28,890
- - - - - 3,442
- - 6,958 - - 6,958
- - - 17,237 30,002 101,121
$229 $8,349 $6,958 $410,484 $246,037 $2,285,158
$ - $ - $80 $ - $ - $4,430
- 6,878 - - 70,739
- - - 17,237 30,002 101,121
0 0 6,958 17,237 30,002 176,290
229 8,349 - 393,247 216,035 2,108,868
$229 $8,349 $6,958 $410,484 $246,037 $2,285,158
75
CITY OF OAK PARK HEIGHTS, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR CAPITAL PROJECT FUNDS
For The Year Ended December 31, 2004
401
Budgeted
500 Projects
Capital and 728 405 565
Revolving Equipment Superamerica/ Park Street
Fund Revolving Valvoline Oil Development Reconstruction
Revenue:
Special assessments:
Current and delinquent $114,503 $ - $
Earnings on investments 11,490 7,159 (2,761) 8,871 11,108
Direct charges to developers - - - - -
Refunds and reimbursements - 20,542 - - -
Donations and contributions - 250 - - -
Rent of municipal property - - - - -
Total revenue 125,993 27,951 (2,761) 8,871 11,108
Expenditures:
Public works:
Materials and supplies - 13,037 - - -
Contractual services 22,346 84,371 - - -
Capital outlay - 28,688 - - -
Construction costs 162,196 - - - -
Total expenditures 184,542 126,096 0 0 0
Revenue over (under) expenditures (58,549) (98,145) (2,761) 8,871 11,108
Other financing sources (uses):
Transfers from General Fund - 224,800 - - -
Transfers from Enterprise Fund - 24,900 - - -
Transfers to Debt Service Fund _ - _ - _
Total other financing sources (uses) 0 249,700 0 0 0
Net increase (decrease) in fund balance (58,549) 151,555 (2,761) 8,871 11,108
Fund balance - January 1 423,629 244,524 2,761 315,204 394,666
Fund balance - December 31 $365,080 $396,079 $0 $324,075 $405,774
76
Statement 18
Totals
406 711 730 771 Nonmajor
Brekke Water 729 Oak Park Sanitary 772 Capital
Park Tower Boutwells Station Sewer Water Project
Memorial Rental Landing Phase I Connection Connection Funds
$8,618 $15,001 $138,122
6 29 - - 11,419 7,117 54,438
5,780 10,958 - - 16,738
- - - - 20,542
- 250
8,320 - - - _ - 8,320
6 8,349 5,780 10,958 20,037 22,118 238,410
- - - - - 13,037
5,780 1,020 - - 113,517
- - - - 28,688
- - 9,938 - - 172,134
0 0 5,780 10,958 0 0 327,376
6 8,349 0 0 20,037 22,118 (88,966)
- - - - - 224,800
24,900
- - - - (32,775) (59,625) (92,400)
0 0 0 0 (32,775) (59,625) 157,300
6 8,349 0 0 (12,738) (37,507) 68,334
223 - - - 405,985 253,542 2,040,534
$229 $8,349 $0 $0 $393,247 $216,035 $2,108,868
77
CITY OF OAK PARK HEIGHTS, MINNESOTA
UTILITY FUND Statement 19
STATEMENT OF NET ASSETS
December 31, 2004
With Comparative Amounts for December 31, 2003
"...,.„e.,: .• =. w.yuwee�wwwoua mwnwadue „ a .:................ . a. , ... . mumuwwurwwwui�wwJwwuwwiwwa�wuwu uw�urvuwwuuman uwu �uummmuuYi
Assets: 2004 2003
Current assets:
Cash and cash equivalents $699,416 $523,193
Accrued interest receivable 9,671 -
Accounts receivable:
Customers 150,598 166,966
Certified to County 33,059 14,257
Other 35 998
Prepaid items 24,383 22,339
Total current assets 917,162 727,753
Capital assets:
Land 60,000 60,000
Buildings and structures 1,320,334 1,320,334
Machinery and equipment 213,959 205,039
Distribution and collection system 6,513,595 6,454,890
Total 8,107,888 8,040,263
Less: Allowance for depreciation (2,461,651) (2,298,009)
Net capital assets 5,646,237 5,742,254
Total assets 6,563,399 6,470,007
Liabilities:
Current liabilities:
Accounts payable 27,531 19,904
Salaries payable 2,026 1,376
Due to other governmental units 34,345 3,326
Compensated absences payable 2,004 -
Total current liabilities 65,906 24,606
Noncurrent liabilities:
Compensated absences payable 16,429 35,544
Total liabilities 82,335 60,150
Net assets:
Invested in capital assets, net of related debt 5,646,237 5,742,254
Unrestricted 834,827 667,603
Total net assets $6,481,064 $6,409,857
78
CITY OF OAK PARK HEIGHTS, MINNESOTA
UTILITY FUND Statement 20
COMPARATIVE STATEMENT OF REVENUE, EXPENSES AND
CHANGES IN NET ASSETS
For The Year Ended December 31, 2004
With Comparative Totals For The Year Ended December 31, 2003
u... ui.i, J,i Wt wa. t, JI d6WY.d WJdulw b {'u IW IWYWll4 dd:ae WaYNNUa uwaWlW 41a4alw WUU'WWUW tlwWUdiultW4uWL1 aW,WUY'W W'e WJtLL.0 a.e lv' YY'IUUOW'uld6 WaLLYYYW.3iWllIWId WLWWYIIIW{ uWVWLWIP W1 WJd YWYWLdu WY1WWWW1'WdWlly+YJWlIUlY LVItltVW1{JYa,{uAeLl6u Ww1W4W 9W 4WWWluJIWWWWYW1eLY J,uuai.WJ
Water Sanitary Sewer Storm Sewer Totals
Operating Operating Sanitation Operating 2004 2003
Operating revenue:
Customer billings $364,601 $557,401 $96,909 $70,878 $1,089,789 $1,039,739
Penalties 4,865 7,825 - - 12,690 14,051
Permits 3,815 2,030 - 350 6,195 7,640
Meter sales 14,367 - - - 14,367 17,733
Charges for services 550 9,647 - - 10,197 14,263
Total operating revenue 388,198 576,903 96,909 71,228 1,133,238 1,093,426
Operating expenses:
Personal services 124,486 90,064 - 15,572 230,122 213,812
Contractual services 70,862 38,054 149,833 19,633 278,382 292,941
Refunds and reimbursements - - - - - 500
Recycling award - - 595 - 595 600
MCES charges - 267,705 - 267,705 274,430
Materials and supplies 8,839 2,556 - 687 12,082 12,495
Administrative and personnel charge 24,565 44,275 16,830 5,190 90,860 87,205
Depreciation 94,415 74,581 - - 168,996 163,220
Total operating expenses 323,167 517,235 167,258 41,082 1,048,742 1,045,203
Operating income (loss) $65,031 $59,668 ($70,349) $30,146 84,496 48,223
Nonoperating revenue (expenses):
Earnings on investments 19,148 17,045
Loss on disposal of capital assets (720) -
Total nonoperating revenue (expenses) 18,428 17,045
Income before contributions and transfers 102,924 65,268
Capital contributions 58,706 104,134
Transfers:
Transfer from General Fund 88,500 88,500
Transfer to Capital Project Funds (178,923) (158,566)
Total transfers (90,423) (70,066)
Change in net assets 71,207 99,336
Net assets - January 1 6,409,857 6,310,521
Net assets - December 31 $6,481,064 $6,409,857
79
CITY OF OAK PARK HEIGHTS, MINNESOTA
ENTERPRISE FUNDS Statement 21
STATEMENT OF CASH FLOWS
For The Year Ended December 31, 2004
Business -Type
Activities
Enterprise Fund
Utility Fund
Cash flows from operating activities:
Receipts from customers and users $1,107,203
Payment to suppliers (522,162)
Payment to employees (337,443)
Miscellaneous revenue 24,564
Net cash flows from operating activities 272,162
Cash flows from noncapital financing activities:
Transfer to other funds (178,923)
Transfer from other funds 88,500
Net cash flows from noncapital financing activities (90,423)
Cash flows from capital and related
financing activities:
Acquisition of capital assets (14,993)
Cash flows from investing activities:
Investment income 9,477
Net increase in cash and cash equivalents 176,223
Cash and cash equivalents - January 1 523,193
Cash and cash equivalents - December 31 $699,416
Reconciliation of operating income to net cash
provided (used) by operating activities:
Operating income $84,496
Adjustments to reconcile operating income to
net cash flows from operating activities:
Depreciation 168,996
Change in assets and liabilities:
Decrease (increase) in receivables (1,471)
Decrease (increase) in prepaid expenses (2,044)
Increase (decrease) in payables 22,185
Total adjustments 187,666
Net cash provided by operating activities $272,162
Noncash investing, capital and financing activities:
Contribution of capital assets $58,706
The accompanying notes are an integral part of these financial statements.
80
CITY OF OAK PARK HEIGHTS, MINNESOTA
SUBCOMBINING BALANCE SHEET Statement 22
AGENCY FUNDS
December 31, 2004
Developer Developer Totals
Deposit Escrow Agency
Fund Fund Funds
Assets
Cash and investments $45,752 $7,000 $52,752
Due from developers 9,237 - 9,237
Total assets $54,989 $7,000 $61,989
Liabilities
Escrow deposits payable $ - $7,000 $7,000
Accounts payable 7,535 - 7,535
Due to developers 47,454 - 47,454
Total liabilities $54,989 $7,000 $61,989
81
CITY OF OAK PARK HEIGHTS, MINNESOTA
SUBCOMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Statement 23
AGENCY FUNDS
For The Year Ended December 31, 2004
Balance Balance
January 1, December 31,
2004 Additions Deletions 2004
Developer Deposit Fund:
Assets:
Cash and investments $12,137 $45,752 $12,137 $45,752
Special assessments - deferred 5,555 - 5,555 -
Due from developers 17,334 9,237 17,334 9,237
Total assets $35,026 $54,989 $35,026 $54,989
Liabilities:
Accounts payable $9,397 $7,535 $9,397 $7,535
Due to developers 25,629 47,454 25,629 47,454
Total liabilities $35,026 $54,989 $35,026 $54,989
Developer Escrow Fund:
Assets:
Cash and investments $13,000 $7,000 $13,000 $7,000
Liabilities:
Escrow deposits payable $13,000 $7,000 $13,000 $7,000
Total Avenev:
Assets:
Cash and investments $25,137 $52,752 $25,137 $52,752
Special assessments - deferred 5,555 - 5,555 -
Due from developers 17,334 9,237 17,334 9,237
Total assets $48,026 $61,989 $48,026 $61,989
Liabilities:
Escrow deposits payable $13,000 $7,000 $13,000 $7,000
Accounts payable 9,397 7,535 9,397 7,535
Due to developers 25,629 47,454 25,629 47,454
Total liabilities $48,026 $61,989 $48,026 $61,989
82
SUPPLEMENTARY FINANCIAL. INFORMATI ®N
83
CITY OF OAK PARK HEIGHTS, MINNESOTA
REVENUE BONDS AND GENERAL DEBT BONDS Exhibit I
SCHEDULE OF DEBT SERVICE PAYMENTS TO MATURITY
December 31, 2004
General Debt Bonds
General General General
Obligation Obligation Obligation
Refunding Improvement Refunding
Bonds of 2002 Bonds of 1998 Bonds of 2001 Total
Bonds payable $225,000 $1,125,000 $110,000 $1,460,000
Future interest payable 7,045 243,312 3,575 253,932
Totals $232,045 $1,368,312 $113,575 $1,713,932
Payments to maturity:
2005 $165,323 $172,812 $113,575 $451,710
2006 66,722 167,813 - 234,535
2007 - 162,687 - 162,687
2008 - 157,500 - 157,500
2009 - 152,250 - 152,250
2010 - 146,938 - 146,938
2011 - 141,562 - 141,562
2012 - 136,125 - 136,125
2013 - 130,625 - 130,625
Totals $232,045 $1,368,312 $113,575 $1,713,932
84
CITY OF OAK PARK HEIGHTS, MINNESOTA
TAXABLE VALUATIONS, TAX LEVIES AND TAX RATES Exhibit 2
2004/2005 2003/2004
Tax capacity:
Real estate $6,840,470 $6,363,354
Personal property 78,460 82,573
Subtotal 6,918,930 6,445,927
Fiscal disparity:
Contribution (954,578) (798,048)
Distribution 341,985 313,675
Total $6,306,337 $5,961,554
Tax levy:
City -wide:
General revenue $2,293,825 $1,992,690
Debt service - 61,380
Total tax levy $2,293,825 $2,054,070
Tax capacity rate:
City -wide:
General revenue 36.488% 33.355%
Debt service 0.000% 1.027%
Total 36.488% 34.382%
85
CITY OF OAK PARK HEIGHTS, MINNESOTA
SCHEDULE OF CONSTRUCTION COSTS Exhibit 3
December 31, 2004
Legal Expended
and Current Prior
Contractor Engineer Fiscal Other Total Year Years
Storm sewer connection:
Kern Center pond
expansion $59,732 $32,570 $115 $164 $92,581 $92,581 $ -
Capital revolving:
Lighting and pathway
improvements 131,411 29,263 1,251 271 162,196 162,196 -
McKean Square:
Street and utility
improvements 1,036,251 244,765 3,410 17,428 1,301,854 357,503 944,351
Total - All Funds $1,227,394 $306,598 $4,776 $17,863 $1,556,631 $612,280 $944,351
86
STATISTICAL SECTION (UNAUDITED)
87
CITY OF OAK PARK HEIGHTS, MINNESOTA
GENERAL AND SPECIAL REVENUE FUNDS Table 1
EXPENDITURES BY FUNCTION
Years 1995 Through 2004
(UNAUDITED)
General Public Public Parks and Community Capital
Year Total Government Safety Works Sanitation Recreation Development Outlay
1995 $1,795,775 $398,640 $724,112 $86,000 $344,396 $178,567 $ - $64,060
1996 2,032,963 441,852 796,557 136,611 434,175 185,372 - 38,396
1997 2,034,181 507,902 847,015 99,412 313,302 211,244 - 55,306
1998 2,086,569 774,444 835,293 139,948 - 120,255 43,471 173,158
1999 2,092,809 772,729 887,643 192,501 - 73,241 124,331 42,364
2000 2,113,555 786,886 915,814 170,408 - 86,800 121,056 32,591
2001 2,314,568 919,622 967,854 168,011 - 109,481 126,356 23,244
2002 2,130,329 779,454 1,001,286 134,337 - 87,932 112,775 14,545
2003 2,067,832 769,032 1,020,094 160,724 - 95,818 20,186 1,978
2004 2,193,443 793,871 1,119,533 170,443 - 88,180 - 21,416
88
CITY OF OAK PARK HEIGHTS, MINNESOTA
GENERAL AND SPECIAL REVENUE FUNDS Table 2
REVENUE BY SOURCE
Years 1995 Through 2004
(UNAUDITED)
Licenses Charges Fines Earnings
Inter- and for and on
Year Total Taxes govermnental Permits Services Forfeits Investments Miscellaneous
1995 $2,003,222 $1,354,677 $144,480 $117,511 $241,874 $49,020 $55,436 $40,224
1996 2,097,097 1,390,443 145,741 156,181 230,579 56,545 56,468 61,140
1997 2,156,948 1,387,227 167,132 204,986 216,536 60,682 56,501 63,884
1998 2,157,782 1,479,490 200,368 125,678 186,799 60,183 49,912 55,352
1999 2,157,915 1,333,194 192,194 227,693 230,147 58,886 42,711 73,090
2000 2,289,985 1,405,002 180,243 314,527 193,615 56,326 53,842 86,430
2001 2,308,020 1,524,300 179,591 213,651 197,318 68,184 53,343 71,633
2002 2,500,806 1,748,634 188,028 183,596 188,093 63,211 34,990 94,254
2003 2,635,521 1,859,203 79,171 313,273 209,076 61,146 34,652 79,000
2004 2,656,923 1,910,848 70,362 304,594 150,126 78,274 41,546 101,173
89
CITY OF OAK PARK HEIGHTS, MINNESOTA
PROPERTY TAX LEVIES AND COLLECTIONS Table 3
Years 1995 Through 2004
(UNAUDITED)
Percent Total
of Collection Delinquent
Current Delinquent Total as a Outstanding Percent of
Taxes Total Current Tax Levy Tax Tax Percent Delinquent Current
Payable Tax Levy Collections Collected Collections Collections of Levy Taxes Levy
1995 $1,430,985 $1,421,284 99.32% $12,034 $1,433,318 100.16% $18,813 1.31%
1996 1,392,558 1,385,501 99.49% 7,674 1,393,175 100.04% 18,196 1.31%
1997 1,396,182 1,387,730 99.39% 4,194 1,391,924 99.70% 10,946 0.78%
1998 1,524,087 1,541,166 101.12% 5,726 1,546,892 101.50% 16,863 1.11%
1999 1,409,400 1,394,993 98.98 4,296 1,399,289 99.28% 23,981 1.70%
2000 1,440,200 1,426,390 99.04% 13,454 1,439,844 99.98% 22,116 1.54%
2001 1,588,435 1,566,938 98.65% 16,563 1,583,501 99.69% 24,199 1.52%
2002 1,967,579 1,904,488 96.79% (18,789) 1,885,699 95.84% 20,174 1.03%
2003 1,993,003 1,891,046 94.88% 12,386 1,903,432 95.51% 31,552 1.58%
2004 1,965,536 1,938,726 98.64% 12,016 1,950,742 99.25% 41,632 2.12%
1996 through 2001 excludes HACA. 2002 through 2004 excludes the Market Value Homestead Credit.
90
CITY OF OAK PARK HEIGHTS, MINNESOTA
SPECIAL ASSESSMENT COLLECTIONS Table 4
Years 1995 Through 2004
(UNAUDITED)
Current Total
Collections Collections
As a Percent As a Percent
Current Current Of Current Delinquent Of Current Outstanding
Year Assessments Assessments Assessments Assessments Assessments Delinquent
Payable Due Collected Due Collected Due Assessments
1995 $47,191 $43,888 93.00% $1,021 95.16% $2,282
1996 139,628 136,958 98.09% 1,071 98.85% 4,163
1997 166,723 162,433 97.43% 1,743 98.47% 6,582
1998 109,134 106,924 97.97% 2,503 100.27% 6,083
1999 416,712 414,520 99.47% 1,493 99.83% 6,782
2000 333,294 332,190 99.67% 1,647 100.16% 4
2001 312,038 311,840 99.94% 4,161 101.27% 197
2002 253,885 247,618 97.53% 197 97.61% 6
2003 246,290 239,390 97.20% 6,267 99.74% 634
2004 200,685 197,940 98.63% 633 98.95% 2,745
91
CITY OF OAK PARK HEIGHTS, MINNESOTA
PRINCIPAL TAXPAYERS (Ten Largest Taxpayers) Table 5
Taxes Payable in 2004
(UNAUDITED)
Percent of Percent of
Total Total Tax
Market Market Tax Capacity Property
Taxpayer Value Value Capacity Value Classification
Xcel Energy Inc $79,882,800 17.8% $1,594,767 24.7% Utility
SC Mall LLC 18,870,300 4.2% 376,656 5.8% Comm land & bldgs
VSSA Housing & Comm Sery LLC 24,294,300 5.4% 315,006 49% Res 4 or more units
Prudential Insurance Company of America 10,434,200 2.3% 207,934 3.2% Comm land & bldgs
Menards, Inc 8,173,400 1.8% 162,718 2.5% Comm land & bldgs
Wal -Mart Real Estate Business 6,740,700 1.5% 134,064 2.1% Comm land & bldgs
W.A.T.E. Enterprises, Inc. 4,481,900 1.0% 88,876 1.4% Comm land & bldgs
Raduenz Dealership Properties LLC 4,155,100 0.9% 82,352 1.3% Comm land & bldgs
WDBH Realty Company 3,698,400 0.8% 73,218 1.1% Comm land & bldgs
.Ierden LLC 3,552,800 0.8% 70,306 1.1% Comm land & bldgs
Totals $164,283,900 36.7% $3,105,897 48.2%
Total City $447,871,200 $6,445,927
SOURCE: Washington County Auditor - Treasurer Taxation Division.
NOTES:
(1) If a taxpayer has property consisting of more than one classification, only one is shown.
92