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Home My WebLink About2001 Audit Review April 2, 2002 City of Oak Park Heights, Minnesota 2001 Audit Review April 2, 2002 HLB TAUTGES REDPATH, LTD. a x J 'a d N 3 Reports Issued H Annual Financial Report ♦ City's financial statements ♦ Independent auditor reports on the fair presentation of the financial statements ♦ "Clean opinion" on the 2001 financial statements as a x 3 State Legal Compliance Report ♦ Required by Minnesota Statute §6.65 ♦ OSA established a task force to develop audit guide for legal compliance Audit guide covers five categories 1) contracting and bidding 2) deposits and investments 3) conflicts of interest 4) public indebtedness 5) claims and disbursement ♦ No compliance findings for � 2001 based on items tested a x 4 Report on Internal Control ♦ Required by audit standards ♦ Based on inquiries and observations ♦ Identifies reportable conditions ♦ Reportable condition defined as "significant deficiencies in the design or operation of the internal control over financial reporting that would adversely affect the City's ability to record, process, summarize, and report financial data" ♦ No reportable conditions a noted x 5 Management Report ♦ Summary: — General Fund: • Fund balance decreased $107,000 during 2001. Budget Actual Variance Revenue /transfers in $2,403,000 $2,298,000 ($105,000) Expenditures /transfers out 2,375,000 2,405,000 (30,000) Increase (decrease) in fund balance $28,000 ($107,000) ($135,000) • Fund balance at December 31 7 2001 was $1,173,000 6 Management Report • Fund balance at December 31 2001 was not sufficient to fulfill all city policy reserve requirements. Reserve Policy Balance Component Requirement Available Cash flow $956,000 $956,000 Contingent employee benefits 104,161 104,161 General contingency 388,000 112,957 Increase (decrease) in fund balance $1,448,161 $1,173,118 M� 7 Management Report $1,400,000 General Fund Monthly Cash Balances A $1,200,000 $1,000,000 I $861,000 decrease $800,000 $600,000 $400,000 $200,000 $0 /1/01 1/31/01 1 2/28101 3/31/01 4/30/01 5/31/01 6/30/01 1 7/31/01 8/31/01 9/30/01 10/31/01 T 1 /30101 12/31/01 ■Series) $1,301,000 $1,152,0001 $984,000 $818,000 $649,000 $508,000 $440,000 1$1,172,000 $967,000 $808,000 $698,000 1 $570,000 $1,142,0001 p O Management Report Summary: — Special Revenue Funds: • Economic Development fund had a fund balance of $48,000 at year end. If sale of Bell property occurs, the proceeds should be accepted in the Capital Revolving Fund • Forfeiture and Seizure Fund had a fund balance of $17,000 at year end a x 9 Management Report —Debt Service Funds: • Three bond issues outstanding totaling $2.655 million. • Water and Sewer Bonds of 1993 -this bond issue is funded by transfers from the Connection Charge Fund. Existing connection charges should be sufficient to fund debt service requirements a x 10 Management Report —Debt Service Funds: • Improvement Bonds of 2001 - this bond issue is projected to have a surplus of $52,000 at final bond maturity (2005). City may be able to cancel a portion of the 2005 tax levy. • Improvement Bonds of 1998 - this bond issue matures in 2014. Debt service is funded by special assessments and connection charges. Existing connection charges should be sufficient to fund debt service requirements. a x �� Management Report — Capital Proiect Funds: • A comparison of fund balance of all Capital Project Funds is as follows: December 31, Increase Fund 2000 2001 (Decrease) Capital Revolving $438,392 $258,296 ($180,096) Budgeted Projects and Equipment Revolving 53,834 47,618 (6,216) 57th Street/Oakgreen extension 30,632 - (30,632) SuperamericaNalvoline Oil 1,311 1,960 649 Park Development 302,359 320,406 18,047 St. Croix Mall (TIF) 91,663 - (91,663) Street Reconstruction 334,855 367,317 32,462 Deep Well #3 (1,153) (668) 485 Renewal and Replacement 1,599,177 1,830,661 231,484 • Central Business District (12,866) (190) 12,676 Brekke Park Memorial 777 824 47 AAE - Kern Center 30 8,260 8,230 AAE - Brackey - Oak Park Pond (22,417) - 22,417 AAE - Brackey - Outlots A & B 22,336 - (22,336) AAE - 58th Street Improvement - Phase III 32,452 4,201 (28,251) AAE - First Student 3,099 - (3,099) AAE - Sanitary Sewer Connection 362,829 357,804 (5,025) AAE - Water Connection 280,662 203,804 (76,858) AAE - Storm Sewer Connection 541,815 554,867 13,052 Totals $4,059,787 $3,955,160 ($104,627) AP1 12 Management Report — Capital Project Funds: • Capital Revolving Fund - fund balance decreased by $180,000 during the year. Assets of this fund at December 31, 2001 consisted of: —cash $295,000 — assessments 163,000 *total $458,000 a x 13 Management Report — Capital Proiect Funds: • Connection Charge Funds - a summary is as follows: Sanitary Water Storm Sewer Works Water Total Fund balance - December 31, 2001 $357,804 $203,804 $554,867 $1,116,475 Future connection charges 286,000 499,000 632,000 1,417,000 Subtotal 643,804 702,804 1,186,867 2,533,475 Debt service commitments: Bonds of 1993 (55,000) (310,000) - (365,000) Bonds of 1998 (329,260) (114,100) (208,640) (652,000) Uncommitted $259,544 $278,704 $978,227 $1,516,475 • Park Development Fund - fund balance increased by $18,000 during the year. The fund balance was $320,000 at December 31, 2001. I � Ir•� 14 Management Report — Capital Project Funds: • Renewal and Replacement Fund - fund balance increased by $230,000 during the year. The fund balance was $1.83 million at December 31, 2001. • Street Reconstruction Fund - fund balance was $367,000 at December 31, 2001. These monies will provide partial financing for the next phase of street reconstruction. a� a x 15 Management Report — Enterprise F • Water operations reflected operating income for 2001 of $27,000 • Sewer operations reflected an operating loss for 2001 of $5,000 • Sanitation operations are subsidized by the General fund. The 2001 transfer was $83,000 • Storm Sewer operations reflected an operating income for 2001 of $6,000 a Z 16 Management Report - Other: • The City experienced an overall collection rate of 99% for special assessments in 2001. • The City has an excellent property tax collection rate - 99% for 2001. • Significant changes in accounting and financial reporting will be required by 2004 (GASB 34) a x 17 Management Report Tax Rates and Tax Capacity 2000 2001 2002 Market value $325,495,900 $324,581,100 $349,905,900 Tax capacity values: Real estate $6,571,300 $7,249,830 $5,085,897 Personal property 120,574 120,220 77,543 Subtotal 6,691,874 7,370,050 5,163,440 Fiscal disparity contribution (784,872) (918,384) (611,097) Fiscal disparity distribution 298,275 343,723 221,368 Total $6,205,277 $6,795,389 $4,773,711 Tax capacity rates 23.620 23.692 41.741 Tax levy $1,440,200 $1,588,435 $1,967,579 Market Value I x Class Rate = I Tax Capacity 18 Management Report Tax Rates and Tax Capacity Perc 4paci Decre Property Classification Market Value Class Rate Tax Ca aci in Tax C Residential Homestead $150,000 1st $76,000 - 1.00% $1,981 Remainder - 1.65% Residential Homestead $500,000 1st $76,000 - 1.00% $7,756 Remainder - 1.65% Commercial $500,000 1st $150,000 - 2.40% $11,900 Remainder - 3.40% Commercial $1,500,000 1st $150,000 - 2.40% $49,500 Remainder - 3.40% Residential Homestead $150,000 1st $500,000 - 1.00% $1,500 24% Remainder - 1.25% Residential Homestead $500,000 1st $500,000 - 1.00% $5,000 35% Remainder - 1.25% Commercial $500,000 1 st $150,000 - 1.50% $9,250 22% Remainder - 2.00% Commercial $1,500,000 1st $150,000 - 1.50% $29,250 40% Remainder - 2.00% Percent of Total City Tax Capacity • Taxpayer 1999 2000 2001 Xcel Energy, Inc. 55.3% 53.1% 36.7% SC Mall, LLC 5.2% 5.3% 4.4% • KTJ Limited Partnership Eleven 5.0% 5.3% 4.2% Menards, Inc. 3.6% 3.5% 2.8% Wal -Mart Real Estate Business 2.4% 2.4% 1.9% F� M-� 19 Management Report Tax Rates and Tax Capacity Tax Levy _ I Tax Capacity = I Tax Rate a b c d e (a x b) (c x d) Market Class Tax Tax City Value Rate Capacity Rate Tax Market Tax Tax City Percent Pro e T e Value Capacity Rate Tax Increase Residential Homestead $150,000 $1,981 23.692 $469 Residential Homestead 500,000 7,756 23.692 1,837 Commercial 1,500,000 49,500 23.692 11,727 Residential Homestead 150,000 1,500 41.741 626 33% Residential Homestead 500,000 5,000 41.741 2,087 13% Commercial 1,500,000 29,250 41.741 12,209 4% F� �i 20