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Home My WebLink About2005 Audit Review April 11, 2006 , , City of Oak Park Heights, Minnesota 2005 Audit Review April 11, 2006 Reports Issued Annual Financial Report ♦ The financial statements are the resp onsibility of p Y management ♦ Independent auditor re orts p on the fair presentation of the financial statements ♦ "Clean opinion" on the 2005 financial statements `'� ............. ............. y - P - ' -' '," *:, u";r3'€'^fat r , - +. `° •"' ' i' V a 'S 44y& , :: T 7io Annual Financial Report ♦ Statement of Activities Program Revenues Net (Expense) Revenue and Operating Capital Changes in Net Assets Charges For Grants and Grants and C Business -Type Functions/Proym& Expenses Services Contributions Contributions Activities Activities Total Governmental activities: General government $882,800 $148,673 $750 $ - ($733,377) $ ($733,377) Public safety 1 569,227 86 15, (539,559) (539,559) Public works 511 235,116 1,086 47,686 (227,249) (227,249) Parks and recreation 138 22,952 - - (115,426) (115,426) Interest on long -tern debt 55,695 - - - (55,695) (55,695) Total governmental activities 2,798,189 975,968 88,229 62,686 (1,671,306) 0 (1,671,306) Business -type activities: Water 373,996 423,876 - 49,880 49,880 Sanitary sewer 560,876 705 - - - 144,580 144 Storm sewer 34,150 73 - 39,3% 39,396 Sanitation 164,572 96,859 - - - (67,713) (67,713) Total business -type activities 1,133,594 1,299,737 0 0 0 166,143 166,143 Total .,, $3,931,783 •,, _ „ $88,229 ._ $62,686 (1,671,306) 166,143 (1,505,163) General revenues: General property taxes 2,222,335 - 2,222,335 Grants and contributions not restricted to specific programs 2,040 - 2,040 Unrestricted investment earnings 258,614 29,268 287,882 Gain on sale of capital assets 950 - 950 Other 24,256 - 24,256 Transfers (416,944) 416,944 - Total general revenues and transfers 2,091,251 446,212 2,537,463 Change in net assets 419,945 612,355 1 Net assets - beginning 17,828,506 6,409,857 24,238,363 Net assets - ending $18,248,451 $7,022,212 $25,270,663 Includes General Fund, Special Revenue, Debt Service and Capital Project Funds. $ -0 G Minnesota Legal Compliance Report ♦ Required by Minnesota Statute §6.65 ♦ OSA established a task force to develop audit guide for legal compliance ♦ Audit guide covers seven categories 1) contracting and bidding 2) deposits and investments 3) conflicts of interest 4) public indebtedness 5) claims and disbursement 6) other miscellaneous provisions 7) Tax increment ♦ One finding for 2005 Report on Internal Control ♦ Required by audit standards ♦ Based on inquiries and observations ♦ Identifies reportable conditions ♦ Reportable condition defined as "significant deficiencies in the design or operation of the internal control over financial reporting that would adversely affect the City's ability to record, process, summarize, and report financial data" ♦ One reportable condition noted Management Letter +All Funds Summar All Funds Financial Summary - 2005 Increase (Decrease) in Fund Balance) Revenue Expenditures Fund Balance/ Net and Other and Other Transfers Net Assets Fund Sources Uses (Net) Assets 12/31/2005 General $3,115,966 $2,309,701 ($550,130) $256,135 $2,103,743 Special Revenue Funds: Forfeiture and Seizure 6,042 12,766 - (6,724) 22,119 Economic Development 1,782 504 - 1,278 53,602 Debt Service Funds: Bonds of 1998 114,744 172,812 50,000 (8,068) 105,076 Bonds of 2002 8,012 165,323 - (157,311) 109,707 Bonds of 2001 30,403 113,575 8,640 (74,532) - Capital Project Funds: Capital Revolving 57,701 17,139 52,740 93,302 458,382 Budgeted Projects and Equipment Revolving 16,446 4,456 325,150 337,140 733,219 Park Development 34,644 - - 34,644 358,719 Street Reconstruction 14,986 9,934 100,000 105,052 510,826 Renewal and Replacement 82,821 - 155,198 238,019 2,645,595 Brekke Park Memorial 8 - - 8 237 Water Tower Rental 23,593 - - 23,593 31,942 Boutwells Landing 208 208 - _ _ McKean Square Capital Project Fund 132,272 132,272 - - _ Oak Park Station - Phase I 1,444 1,444 - - _ Novak Avenue Street and Utility improvements 5,267 5,267 - _ _ Sanitary Sewer Connection 28,942 - (25,250) 3,692 396,939 Water Connection 34,469 - (8,750) 25,719 241,754 Storm Sewer Connection 99,726 218,721 (16,000) (134,995) 730,295 Enterprise Funds: Water 693,897 373,996 (93,850) 226,051 3,708,489 Sanitary Sewer 970,045 560,876 (82,948) 326,221 3,276,937 Storm Sewer 76,729 34,150 (3,300) 39,279 121,747 Sanitation %,876 164,572 88,500 20,804 (13,754) Total .......... . ... .. ..... , ,647,023 $4,297 49,307 $15,595,57 4 ,dry +M . . Management Letter Summary: General Fund: Fund balance increased $256,000 during 2005. Budget Actual Variance Revenue $2,839,213 $3,115,966 $276,753 Expenditures/transfers out 2,842,210 2,859,831 (17,621) Increase (decrease) in fund balance ($2,997) $256,135 $259,132 Fund balance at December 31, 2005 was $2,104,000 - Management Letter • Fund balance at December 31, 2005 was sufficient to fulfill all city policy reserve requirements. General Fund Balance December 31, 2004 2005 Designated for: Cash flow $1,147,000 $1,237,000 Contingent employee benefits 133,961 141,533 General contingency 419,000 439,000 Subtotal - designated 1,699,961 1,817,533 Undesignated 147,647 286,210 Total fund balance $1,847,608 $2,103,743 a, Management Letter $2,200,000 General Fund Monthly Cash Balances $2,000,000 $1,800,000 r $1,600,000 I $1,400,000 - I $829,000 I aecmase $1,200,000 $1,000,000 J $800,000 $600,000 $400,000 $200,000 $0 12/31/2004 1/31/2005 2/28/2005 1 3/31/2005 1 4/30/2005 5/31/2005 6/30/2005 1 7/31/2005 1 8/31/2005 9/30/2005 10/31/2005 11/30/2005 12/31/2005 INS,iesl $1,798,853 $1,703,299 $1,556,982 $1,404,456 $1,359,348 $1,257,668 $969,273 $1,996,316 $1,841,934 $1,788,572 $11,653,051 $1,548,126 $2,035,524 Management Letter — Debt Service Funds: • Two bond issues outstanding totaling $1.065 million. Bond Maturity Outstanding Issue Date Balance Bonds of 1998 12/1/2013 $1,000,000 Bonds of 2002 12/1/2006 65,000 Totals $1,065,000 NeW Management Letter — Capital Proiect Funds: • Connection Charge Funds - a summary is as follows: Sanitary Water Storm Sewer Works Water Total Fund balance - December 31, 2005 $396,939 $241,754 $730,295 $1,368,988 Future connection charges (est.) 299,586 521,118 511,938 1,332,642 Subtotal 696,525 762,872 1,242,233 2,701,630 Debt service commitments: Bonds of 1998 (191,900) (66,500) (121,600) (380,000) Subtotal 504,625 696,372 1,120,633 2,321,630 Available for new well - (696,372) - (696,372) Uncommitted $504,625 $0 $1,120,633 $1,625,258 � a Y _ � a I z Management Letter - Enterprise Funds: Change in Net Assets by Year Sanitary Storm Year Water Sewer Sanitation Sewer Total 2005 $226,051 $326,221 $20,804 $39,279 $612,355 2004 13,895 12,665 18,151 26,496 71,207 2003 117,821 87,935 5,457 36,789 248,002 2002 41,573 81,542 3,955 5,794 132,864 2001 41,643 (5,994) (3,604) 5,875 37,920 2000 65,051 (80,152) (255) (4,765) (20,121) 1999 49,552 (111,811) (32,625) 12,279 (82,605) 1998 (31,669) (38,145) (25,637) - (95,451) 1997 11,294 50,550 - - 61,844 1996 26,964 (6,551) - - 20,413 1995 54,581 (2,359) - - 52,222 1994 (302,719) (198,539) - - (501,258) 1993 73,349 40,156 - - 113,505 pre -1993 595,125 595,126 - - 1,190,251 Subtotal 982,511 750,644 (13,754) 121,747 1,841,148 Contributed capital - 111105 2,725,978 2,526,293 - - 5,252,271 Net assets - 12/31/05 3,708,489 3,276,937 (13,754) 121,747 7,093,419 v � y Management Letter — Other Items: • Collection rates: — Property taxes 99% — Special assessments 98% • Tax capacity rates: —2003 35.799% —2004 34.382% —2005 36.488% —2006 38.377% • Comparison to other communities — 2005 tax rate: — Oak Park Heights 36.488% — Stillwater 51.629% — Bayport 41.257% — Lake Elmo 19.375% j A — Mahtomedi 9.374 Audit Committee Letter — Required Communication • Audit firm responsibility under U.S. audit standards. • Significant accounting policies • Accounting estimates • Audit Adjustments • Disagreements with management • Consultations with other auditors • Issues discussed prior to retention of auditor • Difficulties encountered in performing the audit 1 k. Audit Committee Letter — Other Matters • New utility accounts • Improve IT security • Storage of back -up tapes • Security of vault JW