HomeMy WebLinkAboutCAFR-2006
COMPREHENSIVE ANNUAL FINANCIAL REPORT
OF THE
CITY OF BROOKLYN CENTER,
MINNESOTA
Cornelius L. Boganey
City Manager
Prepared By:
FINANCE DIVISION
DEPARTMENT OF FISCAL & SUPPORT SERVICES
Daniel Jordet
Director
Clara Hilger
Assistant Finance Director
FOR THE YEAR ENDED
DECEMBER 31, 2006
(Member of Government Finance Officers
Association of the United States and Canada)
Table of Contents
INTRODUCTORY SECTION
Letter of Transmittal 1
Principal Officials 6
Organizational Chart 7
FINANCIAL SECTION
Independent Auditor’s Report 9
Management’s Discussion and Analysis 11
Basic Financial Statements:
Statement of Net Assets 21
Statement of Activities 22
Governmental Funds
Balance Sheet 26
Statement of Revenues, Expenditures, and Changes in Fund Balances 30
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of the Governmental Funds to the Statement of Net Activities 33
Proprietary Funds
Statement of Net Assets 34
Statement of Revenues, Expenses, and Changes in Fund Net Assets 36
Statement of Cash Flows 38
Notes to the Financial Statements 41
Required Supplementary Information:
Budgetary Comparison Schedule-General Fund 71
Budgetary Comparison Schedule-Tax Increment District No. 3 77
Combining and Individual Fund Statements:
Nonmajor Governmental Funds
Combining Balance Sheet 80
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 81
Subcombining Balance Sheet-Nonmajor Special Revenue Funds 84
Subcombining Statement of Revenues, Expenditures and Changes in Fund
Balances-Nonmajor Special Revenue Funds 86
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Statement of Revenues, Expenditures, and Changes in Fund Balances-Budget and Actual:
Special Revenue Fund-Housing and Redevelopment Authority 88
Special Revenue Fund-Economic Development Authority 89
Special Revenue Fund-Earle Brown Tax Increment District 90
Special Revenue Fund-Tax Increment District No. 4 91
Special Revenue Fund-Police Drug Forfeiture 92
Special Revenue Fund-Community Development Block Grant 93
Special Revenue Fund-City Initiatives Grant 94
Subcombining Balance Sheet-Nonmajor Debt Service Funds 96
Subcombining Statement of Revenues, Expenditures, and Changes in Fund
Balances-Nonmajor Debt Service Funds 97
Subcombining Balance Sheet-Nonmajor Capital Project Funds 100
Subcombining Statement of Revenues, Expenditures, and Changes in Fund
Balances-Nonmajor Capital Project Funds 102
Nonmajor Enterprise Funds
Subcombining Statement of Net Assets 106
Subcombining Statement of Revenues, Expenses and Changes in Fund Net Assets 107
Subcombining Statement of Cash Flows 108
Internal Service Funds
Subcombining Statement of Net Assets 110
Subcombining Statement of Revenues, Expenses and Changes in Fund Net Assets 111
Subcombining Statement of Cash Flows 112
STATISTICAL SECTION (unaudited)
Net Assets by Component 114
Changes in Net Assets 115
Governmental Activities Tax Revenue by Source 119
Fund Balances – Governmental Funds 120
Changes in Fund Balances – Governmental Funds 122
Assessed Tax Capacity and Estimated Actual Value of Taxable Property 124
Property Tax Rates – Direct and Overlapping Governments 126
Principal Taxpayers 128
Property Tax Levies and Collections 129
Ratios of Outstanding Debt by Type 130
Ratios of General Bonded Debt Outstanding 131
Computation of Direct and Overlapping Debt 132
Legal Debt Margin 133
Pledged Revenue Coverage 134
Demographic and Economic Statistics 136
Principal Employers 137
Full Time City Government Positions by Function 138
Operating Indicators by Function 139
Capital Asset Statistics by Function 140
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City of Brooklyn Center
A Millennium Community
May 14, 2007
Honorable Mayor and Members of the City Council
City of Brooklyn Center
Transmitted herewith is the Comprehensive Annual Financial Report of the City of
Brooklyn Center for the fiscal year ended December 31, 2006.
Management of the City of Brooklyn Center assumes full responsibility for the
completeness and reliability of the information contained in this report based on the
current system of internal control.
Minnesota Statutes and City Charter Section 7.12 require that the financial statements
of the City of Brooklyn Center be audited annually by the State Auditor or a certified
public accountant selected by the City Council. These financial statements have been
audited by HLB Tautges Redpath, Ltd. Their report is included in the financial section
of this report. In addition, HLB Tautges Redpath is required to issue an opinion on the
City’s management and accounting for grant funds from the federal government. This
“Single Audit” opinion, when included, is designed to meet the monitoring needs of
federal grantor agencies. That report was not required in 2006 as the City received less
than $ 500,000 in total federal grants.
Management’s Discussion and Analysis (MD&A) immediately follows the independent
auditor’s report and provides a narrative introduction, overview, and analysis of the
basic financial statements. Management’s Discussion and Analysis complements this
letter of transmittal and should be read in conjunction with it.
Profile of the City of Brooklyn Center
The City of Brooklyn Center was incorporated in 1911 and is located in northern
Hennepin County. The City has operated under the council-manager form of
government since the adoption of the City Charter in 1966. The governing body is
comprised of the Mayor and four Council Members elected at large. All members serve
four-year terms with two of the Council Members standing for election during each
national election year cycle. The Mayor and Council Members hire a City Manager who
runs the daily operations of the City.
The City of Brooklyn Center provides a full range of municipal services to its citizens.
These include police and fire protection services, zoning enforcement, municipal
6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number
Brooklyn Center, MN 55430-2199 (763) 569-3400
City Hall and TDD Number (763) 569-3300 FAX (763) 569-3434
FAX (763) 569-3494
www.cityofbrooklyncenter.org
planning, parks and recreation activities, construction and maintenance of streets,
provision of water, wastewater collection and treatment, stormwater collection and
treatment, and street lighting. Community and economic development are facilitated
through a Housing and Redevelopment Authority and an Economic Development
Authority. The City also has internal departments providing human resources,
engineering, financial management and information technology support to these various
functions. The City operates a conference and meeting facility at the Earle Brown
Heritage Center, two municipal liquor stores, and Centerbrook, a 9 hole executive golf
course.
Financial planning and control for the City of Brooklyn Center is based on the Annual
Operating Budget and the multi-year Capital Improvement Program. Under Minnesota
Statutes, a preliminary property tax levy must be adopted no later than September 15
of each year for the ensuing year’s collection. This establishes a maximum levy that
may subsequently be lowered but not raised. Effective establishment of this levy
requires a preliminary budget be prepared. The City Manager prepares such a budget
each summer and presents it to the City Council in August, prior to the consideration of
the preliminary tax levy. In addition, the City Council reviews the recommended rates
and charges for utility funds and other operations on an annual basis as part of the
budget process. Citizens receive a notice of taxes proposed for their individual
properties in November based on the preliminary levies established by all taxing
districts. Following the receipt of this notice citizens are invited to public hearings
known as Truth in Taxation hearings in each jurisdiction. The City’s hearing includes
information about the budget, the property tax levy and the priorities of the City Council
for the coming year as made evident by the budget allocations. Public comment is
heard and considered at this hearing. The final property tax levy is adopted at a
subsequent meeting. This forms the basis for the budget preparation and presentation
framework.
In addition, a Capital Improvement Program is reviewed and revised during the budget
process each year. This includes projects for which the City must issue debt and/or
assess portions of the cost to adjacent or benefited property owners. Because there
are limited funds available each year and the City does not wish to issue excessive
amounts of debt, these projects must be reviewed and reprioritized as the Capital
Improvement Program is developed each year.
Economic Condition and Outlook
The City of Brooklyn Center is a northern suburb of the Twin Cities metropolitan area,
adjacent to the City of Minneapolis and located 10 miles from its downtown area. The
City is wholly within Hennepin County and covers an area of about 8.5 square miles.
The Mississippi River forms the City’s eastern boundary.
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The City experienced its most rapid growth from 1950 to 1970 when the City’s
population grew from 4,300 to its peak of 35,173. The 2000 Census data for the City
was 29,172, a slight increase from the 1990 Census data of 28,887. The number of
housing units has remained stable at 11,430 units; there were 11,704 housing units in
1990. As in most mature, first-ring suburbs there is a slight trend toward conversion of
single family homes to rental properties.
The total estimated market value of real and personal property within the City increased
6.39% in 2006 over 2005, 7.51% in 2005 over 2004, and 7.55% in 2004 over 2003.
Residential values posted the largest gains going up nearly 15% in total.
Commercial/industrial values declined slightly for the 2005 to 2006 period. Demand for
starter homes has continued to drive up values of residential property in the City.
Major transportation routes in and through the City, including Interstates 94 and 694,
and State Highways 100 and 252, have provided a continued impetus for development
of a strong commercial tax base in the City along and adjacent to these corridors.
Commercial/industrial properties made 31% of the City’s taxable net tax capacity in
2006, declining from the 35% in 2005. This reflects recent tax court decisions on the
Brookdale Center Mall properties lowering their values substantially. Brookdale Center,
a 1,093,931 square-foot regional shopping center, is the largest commercial property in
the City.
Factors Affecting Financial Condition
Major Events of 2006 and Local Economy
Brooklyn Center is a mature, developed suburb that is working to revitalize itself. With
its affordable housing, excellent schools, beautiful parks, and convenient transportation
access it has the potential to continue to be a vibrant community for many years to
come. The revitalization of Brooklyn Center is proceeding on three tracks: replacement
and renewal of the commercial areas of the City; reconstruction and enhancement of its
streets, utilities, and parks; and the reinvigoration of neighborhoods.
Redevelopment continued to be the key to commercial and industrial tax base growth.
In 2006 the City acquired two adjacent business properties along Interstate 94. The
buildings on the sites were demolished. An additional adjacent site will be acquired in
2007, cleared of structures and combined with the first two to create a 14 acre
redevelopment site.
The former Hmong-American Shopping Center has encountered difficulties with
environmental clean-up of contaminants. Development of this project is being delayed
until clearance for the site can be obtained from the Minnesota Pollution Control
Agency.
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The City’s “Opportunity Site” continues to be a focus for redevelopment efforts. The
relocation of a Ford dealership presents an opportunity to combine its parcel with
adjacent properties to create a large redevelopment project site along County Road 10
and Highway 100.
The hospitality industry contributes a significant amount to Brooklyn Center’s economy.
Lodging tax provided over $ 380,000 for 2006 fiscal year operations. Plans for a hotel
adjacent to the City-owned Earle Brown Heritage Center facility have been approved
and construction will begin in 2007. The hotel will be connected to the Heritage Center
by a covered walkway.
Infrastructure and Transportation
As part of a planned replacement of the aging infrastructure, the City continued the
program for street and utility improvements by reconstructing the Centerbrook Area
neighborhood streets in 2006. While streets are replaced, aging water, sanitary and
storm sewer infrastructure is also repaired or replaced. These improvements are
funded by general obligation improvement bonds supported with special assessments
against benefited properties, an operating transfer from the general fund, and funds
from the capital projects funds and utility enterprise funds. About one twenty-fifth of
the City’s streets and utilities are reconstructed each year. It is expected that this will
be a perpetual process, since at the end of twenty-five years it will be necessary to
begin anew with the streets that were done first. Another benefit of these
neighborhood projects has been the increased interest by residents in the maintenance
and cleanup of their individual properties through paint, landscaping and structural
repairs.
Development of utility rate models has improved the City’s ability to generate cash flow
and schedule improvements to the water and sewer systems. Separate funds for street
lighting and stormwater drainage have also helped control and prioritize infrastructure
improvements and operations in these areas.
Cash Management
The City of Brooklyn Center receives interest on all funds deposited by the City in its
bank and investment accounts. During 2006 daily funds were moved to a “sweep”
account paying interest on overnight deposits. The rate on this daily sweep rose during
2006 from 3.8% to a rate at the end of the year in excess of 4.50%. This result was
negotiated between the city and the bank in exchange for a slightly higher balance
being maintained in the operating account. The proceeds of this daily investment offset
the banking fees charged by the City’s main bank, Wells Fargo. Other funds were
invested in various treasury securities and mortgage back securities considered
acceptable risks under the “prudent person” investment limitations of Minnesota
Statutes. Longer term investments will have a slightly higher rate of interest compared
4
to the overnight “sweep” rates of liquid cash. In addition, the City invests in the 4M
and 4MPlus funds sponsored by the League of Minnesota Cities. 2006 saw an increase
in the rate of interest paid by the 4M and 4MPlus funds, from 4.00% to 5.00% at the
end of the year. These accounts pay a return higher than liquid cash but lower than
treasuries and mortgage backed securities. The advantage of using these funds is
liquidity. Treasury management requires a balance between the availability of cash and
investment to obtain the highest return without undue risk of public assets.
Acknowledgements
This report has been prepared following the guidelines recommended by the
Government Finance Officers Association of the United States and Canada. These
guidelines assure that presentation of information on the city’s financial condition
conforms substantially to the high standards of public financial reporting, including
generally accepted accounting principles promulgated by the Government Accounting
Standards Board.
The preparation and publication of this report would not have been possible without the
efficient work of the Finance staff, especially Clara Hilger, Assistant Finance Director.
We would like to acknowledge all staff that contributed their efforts to the Finance
operations in 2006. We would also like to thank the Mayor and City Council for their
support in promoting and maintaining the highest standards of professionalism and
management of the City of Brooklyn Center.
Respectfully Submitted,
Cornelius L. Boganey Daniel Jordet
City Manager Director of Fiscal & Support Services
5
CITY OF BROOKLYN CENTER, MINNESOTA
PRINCIPAL OFFICIALS
December 31, 2006
NamePositionTerm of OfficeTerm Expires
ELECTED OFFICIALS
Myrna KragnessMayorFour YearsDecember 31, 2006
Kathleen CarmodyCouncil MemberFour YearsDecember 31, 2006
Kay LasmanCouncil MemberFour YearsDecember 31, 2008
Diane NiesenCouncil MemberFour YearsDecember 31, 2006
Mary O'ConnorCouncil MemberFour YearsDecember 31, 2008
APPOINTED OFFICIALS
Cornelius L. BoganeyCity ManagerAppointed
Charles LeFevreCity AttorneyContractual Appointee
Sharon KnutsonCity ClerkAppointed
Scott BechtholdPolice ChiefAppointed
Todd BlomstromDirector of Public Works/City EngineerAppointed
Ronald BomanFire ChiefAppointed
James GlasoeCommunity Activities, Recreation and Services DirectorAppointed
Brad HoffmanCommunity Development DirectorAppointed
Daniel JordetDirector of Fiscal and Support ServicesAppointed
6
7
8
9
10
MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Brooklyn Center (the City), we offer readers of the City of Brooklyn Center’s
financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year
ended December 31, 2006. We encourage readers to consider the information presented here in conjunction
with additional information that we have furnished in our letter of transmittal, which can be found on pages 1
through 5 of this report.
Financial Highlights
The assets of the City exceeded its liabilities at the close of the most recent fiscal year. The
$ 106,105,797 of net assets includes cash and investments, streets, buildings, equipment, land and
other City assets. Of this amount, $ 13,163,700 is classified as unrestricted net assets which 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 $ 5,005,801 from 2005 to 2006.
As of the close of the current fiscal year, the City’s governmental funds reported combined ending
fund balances of $ 39,712,609. Of this total amount, $ 30,986,679, or 78% is designated or reserved
through legal restrictions and City Council authorization.
At the end of the current fiscal year the general fund balance of $ 7,509,190 included $ 500 reserved
and $ 7,508,690 designated.
The City’s total outstanding debt decreased by $ 1,415,000 during the current fiscal year, from
$ 29,365,000 to $ 27,950,000.
Overview of the Financial Statements
The discussion and analysis are intended to serve as an introduction to the City’s 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’s finances, in a manner similar to a private-sector business.
The statement of net assets presents information on all of the City’s 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 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 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 include general government, public safety, public works,
community services, recreation and economic development. The business-type activities of the City include
water and sewer, street lighting, liquor operations, golf course, convention center, storm drainage and
recycling/refuse.
11
Management’s Discussion and Analysis
The government-wide financial statements can be found on pages 21 through 23 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, 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 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 spend-
able 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.
The City maintains nineteen individual governmental funds. Information is presented separately in the
governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and
changes in fund balances for the General fund, Tax Increment District No. 3 special revenue fund, and the G. O.
Improvement Bonds debt service fund, which are considered to be major funds. Data from the other
governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these
nonmajor governmental funds is provided in the form of combining statements elsewhere in this report.
The basic governmental fund financial statements can be found on pages 26 through 33 of this report.
Proprietary funds
. The City maintains two different types of proprietary funds. Enterprise funds are used to
report the same functions presented as business-type activities in the governmental-wide financial statements.
The City uses enterprise funds to account for its municipal liquor, golf course, Earle Brown Heritage Center,
water, sanitary sewer, storm drainage, recycling/refuse, and street lighting operations. Internal service funds are
an accounting device to accumulate and allocate costs internally among the City’s various functions. The City
uses internal service funds for its central garage, employee retirement, and compensated absences. Because all
of these services predominantly benefit governmental rather than business-type functions, they have been
included within the governmental activities in the government-wide financial statements.
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 municipal liquor,
golf course, Earle Brown Heritage Center, water, sanitary sewer, and storm drainage operations, each of which
are considered to be major funds of the City. Conversely, all internal service funds are combined into a single,
aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal
service funds is provided in the form of combining statements elsewhere in this report.
The basic proprietary fund financial statements can be found on pages 34 through 39 of this report.
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 on pages 41 through 69 of this report.
Other information.
In addition to the basic financial statements and accompanying notes, this report also
presents certain required supplementary information on budgetary compliance for its major funds. The City
adopts an annual appropriated budget for its general and special revenue funds. A budgetary comparison
12
Management’s Discussion and Analysis
statement has been provided for major funds to demonstrate compliance with this budget. Required
supplementary information can be found on pages 71 through 77 of this report.
The combining statements referred to earlier in connection with nonmajor governmental funds and internal
service funds are presented immediately following the required supplementary information on budgetary
comparisons. Combining and individual fund statements can be found on pages 80 through 112 of this report.
Government-wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indictor of a government's financial position. In the
case of the City, assets exceeded liabilities by $ 106,105,797 at the close of the most recent fiscal year.
The largest portion of the City's net assets ($ 65,304,632 or 62 percent) reflects its investment in capital assets
(e.g. land, infrastructure, buildings, machinery, and equipment) less any related debt used to acquire those assets
that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these
assets are not available for future spending. Although the City's 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.
CITY'S NET ASSETS
Governmental ActivitiesBusiness-type ActivitiesTotal
200620052006200520062005
Current and other assets$52,138,580$ 53,014,216$9,464,383$ 8,008,437$61,602,963$61,022,653
Capital assets40,959,936 36,883,70238,248,496 38,417,64779,208,432 75,301,349
Total assets93,098,516 89,897,91847,712,879 46,426,084140,811,395 136,324,002
Long-term liabilities
outstanding28,745,459 29,502,420 - 28,745,459- 29,502,420
Other liabilities4,469,074 4,800,9051,491,065 920,5815,960,139 5,721,486
Total liabilities33,214,533 34,303,3251,491,065 920,58134,705,598 35,223,906
Net assets:
Invested in capital assets,
net of related debt28,191,206 25,614,60238,248,496 38,417,64765,304,632 64,032,249
Restricted27,637,465 29,326,928 - 27,637,465- 29,326,928
Unrestricted4,055,312 652,9637,973,318 7,087,85613,163,700 7,740,819
Total net assets$59,883,983$ 55,594,493$46,221,814$ 45,505,503$106,105,797$101,099,996
All 2005 comparative balances are net of the adjustments described in Note 3.D. on pages 51 through 52.
A portion of the of the City’s net assets represents resources that are subject to external restrictions on how they
may be used. These restrictions include debt payment from assessments collected, grants received from outside
sources and tax increments collected for qualified projects The remaining balance of unrestricted net assets
($ 13,163,700) may be used to meet the City's ongoing obligations.
At the end of the current fiscal year, the City 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.
The same situation held true for the prior fiscal year.
Current assets decreased in the governmental activities primarily due to the purchase of redevelopment
property. Similarly, capital assets increased with the purchase of that redevelopment property, and the
capitalization of reconstructed infrastructure. Total liabilities decreased due to regularly scheduled payments on
outstanding bonds, both current (other) and long-term. Decreases in accounts payable and contracts payable
also contributed to the decrease in other liabilities. The decrease in restricted net assets can be attributed to
costs associated with the acquisition of redevelopment property exceeding the estimated net realizable value of
those properties.
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Management’s Discussion and Analysis
Current assets in the business-type activities increased due to an increase in user fees charged in 2006 on utility
services and a conscious effort to minimize direct costs to provide services in those activities. Other liabilities
increased due to the estimated amount due to the Metropolitan Council Environmental Services for sanitary
sewer charges.
Governmental Activities
Government activities resulted in an increase of the City's net assets by $ 4,289,490, while the overall increase
totaled $ 5,005,801. Key elements of the increase are as follows:
CITY’S CHANGES IN NET ASSETS
Governmental ActivitiesBusiness-type ActivitiesTotal
200620052006200520062005
Revenues:
Program revenues:
Charges for services$ 2,178,747$ 2,015,332$ 10,544,523$ 9,753,171$ 12,723,270$ 11,768,503
Operating grants and
contributions 748,888 855,633 - 748,888- 855,633
Capital grants and
contributions 2,208,751 2,398,345 - 2,208,751- 2,398,345
General revenues:
Property taxes 11,618,486 11,288,883 - 11,618,486- 11,288,883
Other taxes 4,080,060 5,353,751 - 4,080,060- 5,353,751
Grants and contributions
not restricted to
specific programs 702,030 577,548 - 702,030- 577,548
Unrestricted investment
earnings 1,928,462 1,272,409 337,231 199,876 2,265,693 1,472,285
Gain on sale of assets 23,963 31,880 - 23,963- 31,880
Total revenues 23,489,387 23,793,781 10,881,754 9,953,047 34,371,141 33,746,828
Expenses:
General government 2,936,638 2,970,364 - 2,936,638- 2,970,364
Public safety 8,039,356 7,848,160 - 8,039,356- 7,848,160
Public works 2,087,259 3,821,647 - 2,087,259- 3,821,647
Community services 123,172 86,043 - 123,172- 86,043
Parks and Recreation2,565,364 2,305,047 - 2,565,364- 2,305,047
Economic development 2,567,377 3,559,027 - 2,567,377- 3,559,027
Interest on long-term debt 1,184,017 1,349,852 - 1,184,017- 1,349,852
Municipal liquor - 970,260- 978,743 970,260 978,743
Golf course - 282,418- 273,024 282,418 273,024
Earle Brown Heritage Center - 2,439,709- 2,262,359 2,439,709 2,262,359
Recycling and refuse - 245,853- 254,661 245,853 254,661
Street light utility - 161,219- 213,094 161,219 213,094
Water utility - 1,635,847- 1,717,175 1,635,847 1,717,175
Sanitary sewer - 3,176,426- 2,660,706 3,176,426 2,660,706
Storm drainage - 950,425- 899,988 950,425 899,988
Total expenses 19,503,183 21,940,140 9,862,157 9,259,750 29,365,340 31,199,890
Increase in net assets
before transfers 3,986,204 1,853,641 1,019,597 693,297 5,005,801 2,546,938
Transfers 303,286 (1,545,893) (303,286) 1,545,893 - -
2,239,1905,
Change in net assets 4,289,490 307,748716,311 005,801 2,546,938
Net assets - January 1 55,594,493 55,286,745 45,505,503 43,266,313 101,099,996 98,553,058
Net assets - December 31$ 59,883,983$ 55,594,493$ 46,221,814$45,505,503$106,105,797$101,099,996
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Management’s Discussion and Analysis
In the Governmental Activities, total taxes decreased by $ 944,088 because of reductions in the value of
properties within one of the tax increment districts reducing the current tax increment levy and refunds of prior
year taxes on those properties. Unrestricted investment earnings produced an additional $ 656,053 in revenue
due to an upward trend in interest rates, unspent bond proceeds on hand during the year, and gains in market
valuation of investments. Expenses in public works decreased for 2006. In 2005, a number of projects were
completed that did not meet the capitalization threshold in the City’s policies. Additionally, $ 374,000 was paid
in 2005 for storm cleanup. Lower economic development expenses were due to preparation costs associated
with the redevelopment properties purchased in 2005. Transfers out in 2005 were for construction projects
contributed to the utility funds.
Below are specific graphs which provide comparisons of the governmental activities revenues and expenses:
Governmental Activities - 2006 Revenues
Unrestricted investment
earnings
Other revenues
8.2%
Charges for services
3.1%
9.3%
Other taxes
5.9%
Operating grants and
contributions
3.2%
Property taxes and tax
Capital grants and
increments
contributions
60.9%
9.4%
Governmental Activities - 2006 Expenses
Economic development
Interest on long-term
13.2%
debt
6.1%
Parks and recreation
General government
13.2%
15.1%
Community services
0.6%
Public works
10.7%
Public safety
41.2%
15
Management’s Discussion and Analysis
Business-type activities
Business-type activities increased net assets by $ 716,311. Below are graphs showing the business-type
activities revenue and expense comparisons:
Business-Type Activities - 2006 Revenues
Unrestricted investment
earnings
3.1%
Net Charges for services
96.9%
Business-Type Activities - 2006 Expenses
Sewer
Heritage Center
Municipal Liquor
31%
25%
10%
Storm Drainage
10%
Non-Major Enterprise
Water
4%
17%
Golf Course
3%
Charges for services in the business-type activities were up due to an increase in user fees charged on utility
services and an increase in activity in the Municipal Liquor and Earle Brown Heritage Center activities.
Transfers in for 2005 were construction projects contributed to the utility services by governmental activities.
Expenses increased due to the estimated amount due to the Metropolitan Council Environmental Services for
sanitary sewer charges.
16
Management’s Discussion and Analysis
Financial Analysis of the Government's Funds
Governmental Funds
. The focus of the City’s governmental funds is to provide information on near-term
inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s
financing requirements. In particular, unreserved fund balance may serve as 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's governmental funds reported combined ending fund balances of
$ 39,712,609. Approximately 13% of this amount, $ 5,177,308, is reserved because it has already been
committed 1) to provide for debt service ($ 4,202,976), 2) for advances ($ 792,488), 3) for committed contracts
($181,344) and 4) for prepaid items ($ 500). The unreserved fund balance of $ 34,535,301 includes
designations for 1) general fund working capital ($ 7,508,690), 2) housing development and bonding covenants
($ 11,516,322), 3) economic development ($ 1,922,502), and 4) capital improvements ($ 4,861,857). The
balance is undesignated and unreserved ($ 8,725,930).
The general fund is the chief operating fund of the City. At the end of the current fiscal year, total fund balance
reached $ 7,509,190, all of which was either reserved or designated. As a measure of the general fund’s
liquidity, it may be useful to compare total fund balance to total fund expenditures. Total fund balance
represents 53% of total general fund expenditures.
The fund balance of the City’s general fund increased by $ 214,239 in 2006. This increase was due to higher
than expected collections of current and delinquent property taxes and higher than predicted investment income
due to rising interest rates.
The Tax Increment District No. 3 fund had a total fund balance of $20,727,671 at the end of 2006. The net
decrease in the fund balance was $ 2,997,267. In 2004, the City issued $ 17,245,000 in tax increment bonds,
the proceeds of which will be spent in the Tax Increment District No. 3 fund. The decrease in 2006 represents
the second of three years expenditures for the acquisition and development of properties within the district. The
remaining bond proceeds are carried as of December 31, 2006 a designation of fund balance, $ 8,537,255.
The G.O. Improvement Bonds fund had a fund balance of $3,098,227 at the end of 2006, all of which was
reserved for debt service. The net decrease in fund balance for 2006 was $ 6,150, which was due to the use of
collections in previous years to pay current bond payments.
Proprietary funds
. The City’s proprietary funds provide the same type of information found in the
government-wide financial statements, but in more detail.
The unrestricted net assets in the respective major proprietary funds are the municipal liquor fund - $ 1,308,939,
golf course - $ (710,697), Earle Brown Heritage Center - $ 887,644, water utility - $ 2,386,273, sanitary sewer
utility - $ 2,371,246 and storm drainage utility - $ 1,683,908. The increases (decreases) in net assets for the
major enterprise funds were: municipal liquor $ 193,772, golf course $ 15,632, Earle Brown Heritage Center
$ (478,186), water utility $ 237,099, sanitary sewer utility $ 123,878, and storm drainage utility $ 587,225.
General Fund Budgetary Highlights
During the year, there were no amendments to the General Fund budget appropriations. Actual revenues and
other financing sources exceeded the budget by $ 272,241, the majority of which was due to higher than
expected collections of current and delinquent property taxes and an increase in lodging tax collected. Actual
expenditures and other financing uses were higher than budgeted for the year by $ 58,002. This amount is the
net effect of under budget spending in public works because a portion of the staff time was charged directly to
the capital project funds, and over budget spending in public safety because of an increase in fire response
requests.
17
Management’s Discussion and Analysis
Capital Asset and Debt Administration
Capital assets
. The City’s investment in capital assets for its governmental and business type activities as of
December 31, 2006, amounts to $ 74,949,632 (net of accumulated depreciation). This investment in capital
assets includes land, buildings, infrastructure, machinery and equipment. The total decrease in the City’s
investment in capital assets was 2.9 percent (6.4 percent decrease for governmental activities and a 0.7 percent
increase for business-type activities).
Major capital asset events during the year included the following:
Three major infrastructure reconstruction projects were completed during the year, with a final cost of
$ 5,207,000.
Two infrastructure reconstruction projects were begun and substantially completed during the 2006.
These projects account for $ 4,116,652 in construction in progress at the end of the year.
Construction on a new central storage facility began in 2006, accounting for an additional $ 382,715 in
construction in progress at the end of the year.
CITY'S CAPITAL ASSETS
(net of depreciation)
Governmental ActivitiesBusiness-type ActivitiesTotal
200620052006200520062005
Land$ 3,203,904$ 6,401,246$ 6,401,246
$ 3,203,904$ 3,197,342$ 3,197,342
Land improvements -- 239,168 272,937
239,168 272,937
Construction in progress2,765,506 4,680,597 5,947,660
3,408,164 1,915,091 2,539,496
8,333,499 20,297,777 21,944,214
Buildings and structures 11,964,278 12,726,162 9,218,052
Departmental equipment2,590,925 2,807,298 2,278,174
2,060,357 216,373 217,817
Other park improvements1,281,332 1,115,450 1,281,332- 1,115,450
-
Streets 14,895,191 12,122,165 - 14,895,191- 12,122,165
Mains and lines -- 24,347,023 22,972,003
24,347,023 22,972,003
Total36,701,136$ 74,949,632$ $ 73,053,849
$ $ 34,636,202$ 38,248,49638,417,647
Additional information on the City’s capital assets can be found in Note 4.C. on pages 55 through 56 of this
report.
Long-term debt
. At the end of the current fiscal year, the City had long-term bonded debt outstanding of
$ 27,950,000, all of which is backed by the full faith and credit of the government. Of the total outstanding,
$ 4,465,000 is general obligation bonds, $ 18,305,000 is tax increment bonds and $ 5,180,000 is improvement
bonds.
Additional long-term liabilities include $ 964,248 for compensated absences. This is the accumulated vacation
and vested sick leave not used by employees at the end of 2006.
CITY’S OUTSTANDING DEBT
General Obligation Bonds, General Obligation Tax Increment Bonds,
General Obligation Improvement Bonds, and Compensated Absences
Governmental Activities
20062005
General obligation bonds$ 4,465,000$ 5,340,000
General obligation tax increment bonds 18,305,000 19,305,000
General obligation improvement bonds 5,180,000 4,720,000
Compensated absences 964,248 919,113
Total$ 28,914,248$ 30,284,113
18
Management’s Discussion and Analysis
The City’s total bonded debt decreased by $ 1,415 000 during the current fiscal year. This is the net effect of
scheduled debt retirement of $ 2,875,000 and the issuance of $ 1,460,000 in general obligation improvement
bonds in during the year.
The City maintains an A1 rating from Moody's on all issues.
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 is $ 39,219,054. Only $ 4,465,000 of the City's
outstanding debt is counted within the statutory limitation amounting to about 11% of the total limit.
Additional information on the City’s long-term debt can be found in Note 4.F. on pages 59 through 62 of this
report.
Economic Factors and Next Year’s Budget and Rates
The unemployment rate for the City is 4.6 percent at the end of the current fiscal year, which is a
decrease from the rate of 4.8 percent a year ago. This compares to the State’s average unemployment
rate of 4.0 percent and the national average of 4.6 percent.
Redevelopment of the Central Business District continues and will yield net growth in tax base and
stability in tax base through mixed use development goals.
Utility rates have been subjected to rigorous study and projected into a 10 year model to allow for system
maintenance, technology changes and capital repair and replacements while moderating annual rate
adjustments.
All of these factors were considered in the preparation of the City’s budget for the 2007 fiscal year.
During the year, unreserved fund balance in the general fund rose by $ 214,239. This amount will be added to
the fund balance level to stay within the City’s policy of maintaining 50 to 52 percent of the next year’s
budgeted General Fund operations.
Water, sanitary sewer, and recycling and refuse utility rates were increased for the 2006 budget year.
Residential water rates were increased by 3.7 percent, sanitary sewer by 4.0 percent, and recycling and refuse
by 4.25 percent. These increases were necessary to ensure that the municipal utilities be self-supporting
through revenue, as required by the City charter. These rates are reviewed annually to ensure compliance with
the requirements of the charter.
Requests for information
This financial report is designed to provide a general overview of the City’s 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 Fiscal and Support Services,
City of Brooklyn Center, 6301 Shingle Creek Parkway, Brooklyn Center, Minnesota 55430.
19
20
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 1
STATEMENT OF NET ASSETS
December 31, 2006
GovernmentalBusiness-Type
Assets:
ActivitiesActivitiesTotal
Cash and investments$ 46,841,797$ 7,372,031$ 54,213,828
Receivables:
Accounts 255,711 1,877,302 2,133,013
Taxes 483,211 - 483,211
Special assessments 3,186,932 353,430 3,540,362
Internal balances 968,218 (968,218) -
Due from other governments 138,030 93,811 231,841
Prepaid expenses 500 177,281 177,781
Inventories - at cost 29,971 558,746 588,717
Assets held for resale 4,258,800 4,258,800-
Restricted assets:
Cash and investments 234,210 - 234,210
Capital assets:
Nondepreciable 5,969,410 5,112,433 11,081,843
Depreciable 30,731,726 33,136,063 63,867,789
Total assets 93,098,516 47,712,879 140,811,395
Liabilities:
Accounts payable 470,898 256,035 726,933
Contracts payable 224,913 180,247 405,160
Due to other governments 8,649 646,836 655,485
Deposits payable - 242,860 242,860
Accrued salaries and wages 281,676 40,183 321,859
Accrued interest payable 481,718 - 481,718
Unearned revenue 44,885 124,904 169,789
Liabilities payable from restricted assets:
Deposits payable 234,210 - 234,210
Compensated absences payable:
Due within one year 96,425 -96,425
Due in more than one year 867,823 - 867,823
Health insurance liability:
Due within one year 85,700 - 85,700
Due in more than one year 2,467,636 2,467,636-
Bonds payable:
Due within one year 2,540,000 2,540,000-
Due in more than one year 25,410,000 -25,410,000
Total liabilities 33,214,533 1,491,065 34,705,598
Net assets:
Invested in capital assets, net of related debt 28,191,206 38,248,496 65,304,632
Restricted for:
Debt service 6,789,753 6,789,753-
Tax increment purposes 20,847,712 20,847,712-
Unrestricted 4,055,312 7,973,318 13,163,700
Total net assets$59,883,983$ 46,221,814$106,105,797
The accompanying notes are an integral part of these financial statements.
21
CITY OF BROOKLYN CENTER, MINNESOTA
STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2006
Charges For
Functions/ProgramsExpensesServices
Primary government:
Government activities:
General government$ 2,936,638$ 289,203
Public safety 8,039,356 800,408
Public works 2,087,259 259,273
Community services 123,172 -
Parks and recreation 2,565,364 665,332
Economic development 2,567,377 164,531
Interest on long-term debt 1,184,017 -
Total government activities 19,503,183 2,178,747
Business-type activities:
Municipal liquor 970,260 1,244,738
Golf course 282,418 250,444
Earle Brown Heritage Center 2,439,709 2,168,861
Recycling and refuse 245,853 242,588
Street light utility 161,219 221,341
Water utility 1,635,847 1,906,375
Sanitary sewer utility 3,176,426 3,186,569
Storm drainage utility 950,425 1,323,607
Total business-type activities 9,862,157 10,544,523
Total primary governmen$ 12,723,27029,365,340$
t
The accompanying notes are an integral part of these financial statements.
22
Statement 2
Net (Expense) Revenue and
Program RevenuesChanges in Net Assets
OperatingCapitalPrimary Government
Grants andGrants andGovernmentalBusiness-Type
ContributionsContributionsActivitiesActivitiesTotal
$ -$ 85,000$ (2,562,435)$ -$ (2,562,435)
688,023 - (6,550,925) - (6,550,925)
- 2,117,851 289,865 - 289,865
- - (123,172) - (123,172)
3,899 - (1,896,133) - (1,896,133)
56,966 - (2,345,880) - (2,345,880)
- 5,900 (1,178,117) - (1,178,117)
748,888 2,208,751 (14,366,797) - (14,366,797)
- - - 274,478 274,478
- - - (31,974) (31,974)
- - - (270,848) (270,848)
- - - (3,265) (3,265)
- - - 60,122 60,122
- - - 270,528 270,528
- - - 10,143 10,143
- - - 373,182 373,182
- - - 682,366 682,366
$ 748,888$ 2,208,751(14,366,797)682,366(13,684,431)
General revenues:
Property taxes 11,618,486 - 11,618,486
Tax increments 2,682,874 - 2,682,874
Franchise fees 658,410 -658,410
Lodging taxes738,776 - 738,776
Grants and contributions not
restricted to specific programs 702,030 - 702,030
Unrestricted investment earnings 1,928,462 337,231 2,265,693
Gain on disposal of capital asset 23,963 - 23,963
Transfers 303,286 (303,286) -
Total general revenues and transfers 18,656,287 33,945 18,690,232
Change in net assets 4,289,490 716,311 5,005,801
Net assets - beginning 58,112,969 45,076,297 103,189,266
Prior period adjustment (2,518,476) 429,206 (2,089,270)
Net assets - beginning, restated 55,594,493 45,505,503 101,099,996
et assets - ending$59,883,983$46,221,814$106,105,797
N
23
24
FUND FINANCIAL STATEMENTS
25
CITY OF BROOKLYN CENTER, MINNESOTA
BALANCE SHEE
T
GOVERNMENTAL FUND
S
December 31, 2006
Tax Incremen
t
AssetsGeneralDistrict No. 3
Cash and investments$7,857,239$20,306,745
Receivables:
Accounts60,074-
Current taxes82,8949,746
Delinquent taxes256,24257,432
Special assessments--
Due from other funds-410,000
Due from other governments18,12639,784
Interfund receivable--
Prepaid expenses500-
Advances to other funds--
Asset held for resale-4,221,800
Restricted assets:
Cash and investments-performance deposits234,210-
Total assets8,509,28525,045,507
Liabilities and Fund Balances
Liabilities:
Accounts payable230,88537,723
Accrued salaries and wages267,285881
Due to other funds--
Due to other governments4,149-
Contracts payable--
Interfund payable--
Deferred revenue263,5664,279,232
Liabilities payable from restricted assets:
Deposits payable234,210-
Total liabilities1,000,0954,317,836
Fund balances:
Reserved:
Prepaid items500-
Advances from other funds--
Debt service--
Committed contracts--
Unreserved:
Designated, reported in:
7,508,690-
General Fun
d
Special Revenue Funds-11,516,322
Capital Project Funds--
Undesignated, reported in:
Special Revenue Funds-9,211,349
Capital Project Funds--
Total fund balances7,509,19020,727,671
Total liabilities and fund balances$8,509,285$25,045,507
The accompanying notes are an integral part of these financial statements.
26
Statement 3
Page 1 of 2
Othe
r
G.O. ImprovemenonmajorTotal
tN
BondsGovernmentalGovernmental
$ 3,087,980$8,101,477$39,353,441
-180,866240,940
9969,130102,766
18,77148,000380,445
3,044,712142,2203,186,932
--410,000
-80,120138,030
-262,206262,206
--500
-792,488792,488
-37,0004,258,800
--234,210
6,152,4599,653,50749,360,758
-109,816378,424
-7,477275,643
-410,000410,000
-4,5008,649
-224,913224,913
-262,206262,206
3,054,232257,0747,854,104
--234,210
3,054,2321,275,9869,648,149
--500
-792,488792,488
3,098,2271,104,7494,202,976
-181,344181,344
--7,508,690
-1,922,50213,438,824
-4,861,8574,861,857
-212,0389,423,387
-(697,457)(697,457)
3,098,2278,377,52139,712,609
$ 6,152,459$9,653,507$49,360,758
27
CITY OF BROOKLYN CENTER, MINNESOTAStatement 3
Page 2 of 2
BALANCE SHEE
T
GOVERNMENTAL FUND
S
December 31, 2006
Fund balance - governmental funds is different from net assets - governmental activities because:
Total fund balances (Statement 3)$39,712,609
Capital assets used in governmental activities are not financial resources,
and therefore, are not reported in the funds.34,141,021
Other long-term assets are not available to pay for current-period expenditures
and, therefore, are deferred in the funds.7,809,219
Long-term liabilities, including bonds payable, are not due and payable in
the current period and therefore are not reported in the funds.(28,431,718)
Internal service funds are used by management to charge the cost of certain
activities to individual funds. The assets and liabilities
are included in the governmental statement of net assets.6,652,852
et assets of governmental activities (Statement 1)$59,883,983
N
28
29
CITY OF BROOKLYN CENTER, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE
S
GOVERNMENTAL FUNDS
For the Year Ended December 31, 2006
Tax Incremen
t
GeneralDistrict No. 3
Revenues:
Property taxes$10,418,863$-
Tax increments-1,609,994
Franchise fees--
Lodging taxes738,776-
Special assessments--
Licenses and permits722,633-
Intergovernmental1,269,00539,784
Charges for services683,968-
Fines and forfeits256,600-
Investment earnings (net of market value adjustment)239,470881,312
Miscellaneous85,767-
Total revenues14,415,0822,531,090
Expenditures:
Current:
General governmen2,737,213-
t
Public safet7,158,112-
y
Public works1,696,557-
Community service -123,172
s
Parks and recreation2,176,686-
Economic developmen 726,574350,919
t
Nondepartmental363,967-
Administrative services reimbursemen(529,362)-
t
Capital outlay:
General governmen -9,680
t
Public safet18,707-
y
Public works13,084-
Parks and recreation12,108-
Economic developmen-2,913,979
t
Debt service:
Principal retirement--
Interest--
Fiscal agent fees--
Bond issuance costs - -
Total expenditures14,130,8433,640,553
Revenues over (under) expenditures284,239(1,109,463)
Other financing sources (uses):
Bond proceeds - -
Discount on bond proceeds - -
--
Transfers i
n
Transfers ou (1,887,804)(70,000)
t
Total other financing sources (uses)(70,000)(1,887,804)
Net increase (decrease) in fund balances214,239(2,997,267)
Fund balances - January 1, as previously stated7,294,95123,664,938
Prior period adjustment-60,000
Fund balances - January 1, restated7,294,95123,724,938
Fund balances - December 31$7,509,190$20,727,671
The accompanying notes are an integral part of these financial statements.
30
Statement
4
Othe
r
G.O. ImprovemenNonmajoTotal
tr
BondsGovernmentaGovernmenta
ll
$ 994,303111,874$ 11,525,040$
-1,054,1502,664,144
-658,410658,410
--738,776
924,087290,4841,214,571
--722,633
-1,066,9082,375,697
-38,250722,218
--256,600
106,850374,0991,601,731
-391,529477,296
1,142,8114,868,13322,957,116
-101,9372,839,150
-141,7307,299,842
-120,5631,817,120
--123,172
-35,4562,212,142
-309,0651,386,558
--363,967
--(529,362)
-40,90350,583
-3,00321,710
-2,907,0082,920,092
--12,108
--2,913,979
3,127,146
1,000,0002,127,146
167,2841,030,1081,197,392
21,2871,44822,735
- 30,491
30,491
1,188,5716,848,85825,808,825
(45,760)(1,980,725)(2,851,709)
39,610 1,420,390
1,460,000
- (445)
(445)
-2,784,1162,784,116
-(253,405)(2,211,209)
39,6103,950,6562,032,462
(6,150)1,969,931(819,247)
3,104,3776,407,59040,471,856
--60,000
3,104,3776,407,59040,531,856
$ 3,098,227$8,377,521$39,712,609
31
32
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 5
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2006
Amounts reported for governmental activities in the statement of activities are different because:
et changes in fund balances - total governmental funds (Statement 4$(819,247)
N)
Governmental funds report capital outlays as expenditures. However, in the statement o
f
activities the cost of those assets is allocated over their estimated useful lives and reported
as depreciation expense. This is the amount by which capital outlays exceeded depreciation
in the current period.1,417,308
Revenues in the statement of activities that do not provide current financial resources are no
t
reported as revenues in the funds.2,107,877
The issuance of long-term debt (e.g., bonds, leases) provides current financial resources
to governmental funds, while the repayment of the principal of long-term debt consume
s
the current financial resources of governmental funds. Neither transaction, however, ha
s
any effect on net assets. This amount is the net effect of these differences in the treatmen
t
of long-term debt and related items.1,415,000
Internal service funds are used by management to charge the cost of certain activities to
individual funds. This amount is net revenue attributable to governmental activities.132,443
Accrued interest reported in the statement of activities does not require the use of current financial
resources and, therefore, is not reported as expenditures in governmental funds.36,109
Change in net assets of governmental activities (Statement 2
$4,289,490
)
The accompanying notes are an integral part of these financial statements.
33
CITY OF BROOKLYN CENTER, MINNESOTA
STATEMENT OF FUND NET ASSETS
PROPRIETARY FUNDS
December 31, 2006
Major
MunicipalGolfEarle Brown
LiquoCourseHeritage Cente
rr
Assets
Current assets:
Cash and cash equivalents$949,471$ 81,900$1,141,255
Accounts receivable - ne -7,780 223,561
t
Special assessments receivable- --
Due from other government -- -
s
Prepaid items21,432 -5,499
Inventories - at cost511,212 1,78427,101
Total current assets1,489,895 83,6841,397,416
oncurrent assets:
N
Capital assets:
Lan 1,390,402- 1,493,300
d
Land improvement 40,258- 327,830
s
Buildings and structures192,771 487,94611,039,134
Machinery and equipmen 11,160111,167 195,529
t
Mains and lines- --
Construction in progress- --
Total capital assets303,938 1,929,76613,055,793
Less: Allowance for depreciatio (239,874)(202,942) (5,735,862)
n
et capital assets 1,689,892100,996 7,319,931
N
Total assets1,590,891 1,773,5768,717,347
Liabilities
Current liabilities:
Accounts payable123,777 56049,712
Accrued salaries payable9,778 1,17016,745
Contracts payable- -180,247
Due to other governments46,916 16318,658
Deposits payable- -242,810
Deferred revenue485 -1,600
Advances from other funds- 792,488-
Compensated absences payable-curren -- -
t
-- -
Accrued health insurance liability-curren
t
Total current liabilities180,956 794,381509,772
oncurrent liabilities:
N
-- -
Compensated absences payable-long-ter
m
-- -
Accrued health insurance liability-long-ter
m
Total noncurrent liabilities - - -
Total liabilities180,956 794,381509,772
et assets
N
Invested in capital assets, net of related debt100,996 1,689,8927,319,931
Unrestricted1,308,939 (710,697)887,644
Total net assets$1,409,935$ 979,195$8,207,575
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds
et assets of business-type activitie
Ns
The accompanying notes are an integral part of these financial statements.
34
Statement 6
Business-Type ActivitiesGovernmenta
l
EnterpriseOtheActivities-
r
Storm DrainageonmajoTotalInternalTotal
WaterSanitary Sewe
rNr
UtilitUtilitUtilitEnterpriseEnterpriseServiceProprietary
yyy
$ 1,926,7331,811,509$ 1,353,496$ $107,667$7,372,031$ 7,488,356$14,860,387
380,020 816,289 333,141116,5111,877,302 14,7711,892,073
350,856 2,343 231 353,430- 353,430-
- 93,811--93,811 -93,811
500 149,850- 177,281- 177,281-
18,649 -- 558,746- 29,971588,717
2,561,534 2,989,026 1,686,868224,17810,432,601 7,533,09817,965,699
23,093 3,389 287,158 3,197,342- 3,197,342-
- -- 368,088- 166,108534,196
3,033,212 2,710,146- 17,463,209- 17,463,209-
128,668 179,130- 625,654- 6,179,9966,805,650
15,268,189 13,657,909 13,598,030 42,524,128- 42,524,128-
1,915,091-
677,964 658,069 579,058 1,915,091-
19,131,126 17,208,643 14,464,246 66,093,512- 6,346,10472,439,616
(10,476,013) (8,065,730) (3,124,595) (27,845,016)- (3,785,989)(31,631,005)
8,655,113 9,142,913 11,339,651 38,248,496- 2,560,11540,808,611
11,216,64712,131,939 13,026,519224,17848,681,097 10,093,21358,774,310
44,359 33,577 1,6072,443256,035 92,474348,509
7,399 3,738 1,353-40,183 6,03346,216
- -- 180,247- 180,247-
634 580,465- 646,836- 646,836-
50 -- 242,860- 242,860-
122,819 -- 124,904- 124,904-
- -- 792,488- 792,488-
- ---- 96,42596,425
----- 85,70085,700
175,261 617,780 2,9602,4432,283,553 280,6322,564,185
- ---- 867,823867,823
- --- 2,467,636- 2,467,636
- - - - -3,335,459 3,335,459
175,261 617,780 2,9602,4432,283,553 3,616,0915,899,644
8,655,113 9,142,913 11,339,651 38,248,496- 2,560,11540,808,611
2,386,273 2,371,246 1,683,908221,7358,149,048 3,917,00712,066,055
$ 11,041,386$ 11,514,159$ 13,023,559$221,73546,397,544$ 6,477,122$52,874,666
(175,730)
$46,221,814
35
CITY OF BROOKLYN CENTER, MINNESOTA
STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
For the Year Ended December 31, 2006
Major
MunicipalGolfEarle Brown
LiquoCourseHeritage Cente
rr
Operating revenues:
Sales and user fees$5,158,987$ 250,339$4,260,168
Cost of sales3,922,143 -2,128,951
Total operating revenues1,236,844 250,3392,131,217
Operating expenses:
Personal services469,203 130,070881,578
Supplies25,291 14,895156,069
Other services151,072 87,623404,076
Insurance11,229 7,43344,640
Utilities37,106 18,873221,342
Ren -242,801 148,323
t
Depreciation26,359 27,170578,401
Total operating expenses963,061 286,0642,434,429
Operating income (loss)273,783 (35,725)(303,212)
onoperating revenues (expenses):
N
Investment earning 2,25237,095 46,479
s
Special assessments- --
Gain (loss) on sale of capital asset- --
Other revenue7,894 10537,644
Total nonoperating revenues (expenses)44,989 2,35784,123
Income (loss) before contributions and transfers318,772 (33,368)(219,089)
Capital contributions- -40,903
Transfers in- 49,000-
Transfers out(125,000) -(300,000)
Change in net assets193,772 15,632(478,186)
et assets - January 1, as previously state1,216,163 963,5638,685,761
Nd
Prior period adjustment- --
et assets - January 1, restated1,216,163 963,5638,685,761
N
et assets - December 31$1,409,935$ 8,207,575979,195$
N
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds
Change in net assets of business-type activities (Statement 2)
The accompanying notes are an integral part of these financial statements.
36
Statement 7
Business-Type ActivitiesGovernmenta
l
EnterpriseOtheActivities-
r
Storm DrainageonmajoTotalInternalTotal
WaterSanitary Sewe
rNr
UtilitUtilitUtilitEnterpriseEnterpriseServiceProprietary
yyy
$ 1,881,454$ 3,092,574$ 1,323,607$463,929$16,431,058$ 1,472,708$17,903,766
- -- 6,051,094- 6,051,094-
1,881,454 3,092,574 1,323,607463,92910,379,964 1,472,70811,852,672
377,065 148,811 59,162 2,065,889- 959,2073,025,096
142,843 11,466 18,638794369,996 349,085719,081
372,014 2,485,479 334,542257,4004,092,206 107,9544,200,160
12,787 5,729 2,5773,34287,737 49,841137,578
151,428 30,934 145,536-605,219 2,014607,233
- -- 391,124- 391,124-
578,159 503,231 540,962 2,254,282- 465,4912,719,773
1,634,296 3,185,650 955,881407,0729,866,453 1,933,59211,800,045
247,158 (93,076) 367,72656,857513,511 (460,884)52,627
67,357 106,275 70,7397,034337,231 326,731663,962
21,502 184--21,686 -21,686
- ---- 30,65130,651
3,419 93,811- 142,873- 35,383178,256
92,278 200,270 70,7397,034501,790 392,765894,555
339,436 107,194438,46563,8911,015,301(68,119)947,182
(59,511) 324,771- 306,163- 168,316474,479
- 29,755--78,755 36,542115,297
(42,826) (13,071) (176,011)(31,296)(688,204) (688,204)-
237,099 123,878 587,22532,595712,015 136,739848,754
10,725,703 11,242,343 12,233,650189,14045,256,323 6,340,38351,596,706
78,584 147,938 202,684 429,206- 429,206-
10,804,287 11,390,281 12,436,334189,14045,685,529 6,340,38352,025,912
$ 11,514,159$ 13,023,559$221,735$46,397,544$ 6,477,122$52,874,666
$11,041,386
4,296
$716,311
37
CITY OF BROOKLYN CENTER, MINNESOTA
STATEMENT OF CASH FLOW
S
PROPRIETARY FUNDS
For the Year Ended December 31, 2006
Major
MunicipalGolEarle Brown
f
LiquorCourseHeritage Cente
r
Cash flows from operating activities:
Receipts from customers and users$5,159,152$ 250,339$4,203,921
Receipts from interfund services provide -- -
d
Payments to suppliers(4,381,111) (128,239)(3,029,654)
(468,976) (130,294)(879,033)
Payments to employee
s
Miscellaneous revenue7,894 10537,644
Net cash flows provided (used) by operating activities316,959 (8,089)332,878
Cash flows from noncapital financing activities:
Principal repayments on advance- (7,512)-
Transfers i 49,000- -
n
Transfers ou(125,000) -(300,000)
t
Special assessments- --
Interfund payable- --
Net cash flows provided (used) by noncapital financing activities(125,000) 41,488(300,000)
Cash flows from capital and related financing activities:
Capital contributions- --
Acquisition and construction of capital assets- --
Proceeds from sale of assets- --
Net cash flows provided (used) by capital and related financing activities- --
Cash flows from investing activities:
Interest on investments37,095 2,25246,479
Net increase (decrease) in cash and cash equivalents229,054 35,65179,357
Cash and cash equivalents - January 1720,417 46,2491,061,898
Cash and cash equivalents - December 31$949,471$ 81,900$1,141,255
Reconciliation of operating income to net cash
rovided (used) by operating activities:
p
Operating income (loss) 273,783$$ (35,725)$(303,212)
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation26,359 27,170578,401
Changes in assets and liabilities:
(Increase) decrease in receivables- -(37,847)
(Increase) decrease in inventories43,088 4(2,703)
(Increase) decrease in prepaid expenses(837) -(1,510)
Increase (decrease) in payables(33,720) 58159,560
Increase (decrease) in accrued expenses227 (224)2,545
Increase (decrease) in deferred revenue165 --
Other nonoperating income7,894 10537,644
Total adjustments43,176 27,636636,090
Net cash provided (used) by operating activities$316,959$ (8,089)$332,878
Noncash financing activities:
Capital contributions$ -$ -$ -
Capital asset transfers - - -
Gain on sale of assets - - -
The accompanying notes are an integral part of these financial statements.
38
Statement
8
Business-Type ActivitieGovernmenta
sl
EnterpriseOtheActivities-
r
WateSanitary SeweStorm DrainageNonmajoTotalInternalTotal
rrr
UtilitUtilitUtilitEnterpriseEnterpriseServiceProprietary
yyy
$ 1,807,939$ 2,910,510$ 1,273,153$455,209$16,060,223$ 16,060,223-$
- --- 1,462,061- 1,462,061
(681,291) (1,970,070) (361,275)(429,284)(10,980,924) (449,730)(11,430,654)
(377,214) (147,615) (59,048) (2,062,180)- (448,980)(2,511,160)
3,419 93,811--142,873 35,383178,256
752,853 886,636 852,83025,9253,159,992 598,7343,758,726
- ---(7,512) -(7,512)
- ---49,000 10,40059,400
- - (59,400)(31,296)(515,696) -(515,696)
(7,970) 44539-(7,486) -(7,486)
(26,845) (5,837)--(32,682) -(32,682)
(34,815) (5,392) (59,361)(31,296)(514,376) 10,400(503,976)
- ---- 80,00080,000
(692,064) (658,069) (571,589) (1,921,722)- (1,131,677)(3,053,399)
- ---- 163,669163,669
(692,064) (658,069) (571,589) (1,921,722)- (888,008)(2,809,730)
67,357 106,275 70,7397,034337,231 326,731663,962
93,331 329,450 292,6191,6631,061,125 47,8571,108,982
1,718,178 1,597,283 1,060,877106,0046,310,906 7,440,49913,751,405
$ 1,811,509$ 1,926,733$ 1,353,496$107,667$7,372,031$ 7,488,356$14,860,387
$ 247,158$ (93,076)$ 367,726$56,857$513,511$ (460,884)$52,627
578,159 503,231 540,962 2,254,282- 465,4912,719,773
(58,518) (182,064) (50,454)(8,720)(337,603) (5,780)(343,383)
(1,293) ---39,096 1,46440,560
- (20,304)--(22,651) -(22,651)
(5,518)(22,212)578,757 57,700636,457
(3,776)583,842
(149) 1,196 114-3,709 505,360509,069
(12,147) ---(11,982) -(11,982)
3,419 93,811--142,873 35,383178,256
505,695 979,712 485,104(30,932)2,646,481 1,059,6183,706,099
$ 752,853$ 886,636$852,830$25,925$3,159,992$ 598,734$3,758,726
$ -$ -$ -$ -$ 5,000
(102,337) 16,684 - - 109,458
- - - - 30,651
39
40
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
The City of Brooklyn Center was incorporated in 1911 and has operated under a Council/Manager form of
government since the adoption of the City charter in 1966. The governing body consists of a mayor and four
City Council members elected at-large to serve four-year staggered terms. The City provides a full range of
municipal services to its citizens, including public safety (police and fire protection), highways and streets,
parks and recreation, public improvements, planning and inspections, economic development, sanitary and
storm sewer, water, and general administrative services.
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City have been prepared in accordance with accounting principles generally
accepted in the United States of America (GAAP), as applied to governmental units by the Governmental
Accounting Standards Board (GASB). The City also applies Financial Accounting Standards Board (FASB)
statements and interpretations issued prior to December 1, 1989 to its governmental and business-type activities
at the government-wide financial reporting level and to its proprietary finds at the fund reporting level,
provided they do not conflict with or contradict GASB pronouncements.
The City’s significant accounting policies are described below.
A. REPORTING ENTITY
The City includes all funds, organizations, institutions, agencies, departments, boards, and offices that are
not legally separate from the City. Component units are legally separate organizations for which the
elected officials of the City are financially accountable and are included within the basic financial
statements of the City because of the significance of their operational or financial relationships with the
City.
The City is considered financially accountable for a component unit if it appoints a voting majority of the
organization’s governing body and is able to impose its will on the organization by significantly
influencing the programs, projects, activities, or level of services performed or provided by the
organization, or there is a potential for the organization to provide specific financial benefits to, or impose
specific financial burdens on, the City.
Blended component units, although legally separate, are, in substance, part of the government’s operations.
A blended component unit is reported as if it were a fund of the City throughout the year. It is included at
both the government-wide and fund financial reporting levels.
A description of the City’s blended component units follows:
City of Brooklyn Center Housing and Redevelopment Authority (HRA)
- The City Council serves as the
Board of Directors for the HRA. The Council reviews and approves the tax levy and all expenditures for
the HRA. The HRA is reported as a Special Revenue Fund. The HRA does not issue separate financial
statements. Financial information may be obtained at the City’s offices.
City of Brooklyn Center Economic Development Authority (EDA)
– The governing board for the EDA is
the City Council. The council reviews and approves major community development improvement
activities. City general obligation tax increment financing bonds are issued to finance EDA activities. The
EDA is reported in the Economic Development Authority, Earle Brown TIF District, TIF District No. 3,
TIF District No. 4, and the Community Development Block Grant Special Revenue Funds; the Tax
Increment Bonds Debt Service Fund; the Earle Brown Heritage Center Improvements Capital Project
Fund; and the Earle Brown Heritage Center Enterprise Fund. The EDA does not issue separate financial
statements. Financial information may be obtained at the City’s offices.
41
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
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. 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
segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a
specific function or segment. 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.
Separate financial statements are provided for governmental funds and proprietary funds. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund
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 and special assessments 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.
Governmental fund financial statements are reported using the current financial resources measurement
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 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.
42
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT
PRESENTATION
(Continued)
The government 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 Tax Increment District No. 3 Special Revenue Fund has the authority to collect tax increments
which are used for various redevelopment projects within the City and for debt service payments of
bonds which were issued for the same purpose.
TheG. O. Improvement Bonds Debt Service Fund is used to account for the accumulation of resources
for the payment of improvement bonds. These bonds were sold to finance certain public
improvements such as residential streets and storm sewers or the provision of services which are to be
paid for wholly or in part from special assessments levied against benefited property.
The government reports the following major enterprise funds:
TheMunicipal Liquor Fund accounts for the operations of the City’s municipal off-sale liquor stores.
TheGolf Course Fund accounts for operations of Centerbrook Golf Course, a 9 hole executive golf
course owned by the City.
TheEarle Brown Heritage Center Fund accounts for the operation of a convention center. The Earle
Brown Heritage Center is a pioneer farmstead that has been historically preserved and restored as a
modern multipurpose facility. Its convention center can host conferences, trade shows, and concerts.
TheWater Utility Fund accounts for the pumping, treatment and distribution of water to customers.
Administration, wells, water storage, and distribution are included.
The Sanitary Sewer Utility Fund accounts for the collection and pumping of sanitary sewage through a
system of sewer lines and lift stations. Sewage is treated by the Metropolitan Council Environmental
Services whose fees represent about 62% of this fund’s expenses.
TheStorm Drainage Utility Fund accounts for the collection and treatment of surface runoff water that
does not require sanitary wastewater treatment. It incorporates not only the storm sewer collection
system, but also structures such as holding ponds and facilities to improve water quality. Fees are
based upon the quantity of water running off a property and vary with both size and absorption
characteristics of the parcel.
43
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT
PRESENTATION
(Continued)
Additionally, the government reports the following fund type:
Internal Service Funds account for compensated absences, health care insurance benefits and central
garage services provided to other departments of the City on a cost reimbursement basis.
As a general rule, the effect of interfund 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. 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 funds 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 fund’s principal ongoing operations. The principal operating revenues of the
enterprise funds and internal service funds are charges to customers for sales and services. Operating
expenses for enterprise funds and internal service 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.
D. CASH AND INVESTMENTS
The City 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 proprietary funds have original
maturities of 90 days or less.
44
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. CASH AND INVESTMENTS
(Continued)
The City’s investment policy authorizes the City to invest in the following:
a) Securities that are direct obligations or are guaranteed or insured issues of the United States, its
agencies, its instrumentalities, or organizations created by an act of congress, including
governmental bills, notes, bonds and other securities.
b) Commercial paper issued by U.S. corporations or their Canadian subsidiaries that is rated in the
highest quality by at least two nationally recognized rating agencies and matures in 270 days or less.
c) Time deposits that are fully insured by the Federal Deposit Insurance Corporation or bankers
acceptances of U.S. banks.
d) Repurchase agreements and reverse repurchase agreements with financial institutions identified by
Minnesota Statutes Chapter 118A.
e) Securities lending agreements may be entered into with financial institutions identified by
Minnesota Statutes Chapter 118A.
f) Minnesota joint powers investment trusts may be entered into with trusts identified by Minnesota
Statutes Chapter 118A
g) Money market mutual funds regulated by the Securities and Exchange Commission and whose
portfolios consist only of short term securities permitted by Minnesota Statutes 118A.
h) Bonds of the City of Brooklyn Center issued in prior years, may be redeemed at current market
price, which may include a premium, prior to maturing using surplus funds of the debt service fund
set up for that issue.
Investments are reported at fair value, based on quoted market prices as of the balance sheet date.
Adjustments necessary to record investments at fair value are recorded in the operating statement as
increases or decreases in investment earnings. Investment income on commingled funds is allocated
monthly, based on month-end balances.
E. RECEIVABLES AND PAYABLES
During the course of operations, numerous transactions occur between individual funds for goods provided
or services rendered. Short-term interfund loans are classified as “interfund receivable/payable.” All
short-term interfund receivables and payables at December 31, 2006 are planned to be eliminated in 2007.
Long-term interfund loans are classified as “interfund loan receivable/payable.” Any residual balances
outstanding between the governmental activities and business-type activities are reported in the
government-wide financial statements as “internal balances.”
Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve
account in applicable governmental funds to indicate that they are not available for appropriation and are
not expendable financial resources.
The City expects to make full collection of all trade and property tax receivables, so no allowance is
considered necessary.
45
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
E. RECEIVABLES AND PAYABLES
(Continued)
Property tax levies are submitted to the County in December each year. The County allocates these levies
across taxable properties in the City based on valuations certified in the prior year. The County collects
these levies and distributes the City’s proceeds in June and December of the fiscal year. These taxes are
reported as general revenues in the government-wide financial statements in the year levied. Unpaid taxes
at December 31 become liens on the respective property and are classified as delinquent receivables and
are fully offset by deferred revenue in the fund financial statements.
F. INVENTORIES AND PREPAID ITEMS
Inventories in the proprietary funds are valued at cost, using the weighted average method in the Municipal
Liquor Fund and the first-in/first-out (FIFO) method in the other proprietary funds. Inventories of
governmental funds are recorded as expenditures when purchased rather than when consumed.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items in both government-wide and fund financial statements.
G. 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 as shown below 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 fair market value at the date of donation.
Infrastructure $ 250,000
Buildings and Building Improvements 50,000
Land Improvements 25,000
Heavy Equipment 25,000
Furniture and furnishings 10,000
Motorized vehicles 10,000
Technology equipment 10,000
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, 2006 no interest was
capitalized in connection with construction in progress.
46
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
G. CAPITAL ASSETS
(Continued)
Capital assets of the City, as well as the component units, are depreciated using the straight line method
over the following estimated useful lives:
Land improvements 25 years
Buildings and structures 25 years
Water and sewer mains and lines, wells and storage
tanks, sewer lift stations 25 years
Infrastructure 25 years
Machinery and equipment 5-15 years
H. COMPENSATED ABSENCES
It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits.
All vacation and vested sick leave pay is accrued in the Public Employee Compensated Absences fund. A
liability for these amounts is reported in governmental funds 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 Compensated Absences, a liability is
recognized for that portion of accumulating sick leave benefits that is vested, or expected to vest, as
severance pay.
I. LONG TERM OBLIGATIONS
In the government-wide financial statements and proprietary fund 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 fund financial statements, governmental fund 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.
J. FUND EQUITY
Fund equity in the fund financial statements is classified as fund balance for governmental funds and net
assets for proprietary funds. Fund equity in the government-wide financial statements is classified as net
assets for both governmental and business-type activities.
47
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
J. FUND EQUITY
(Continued)
Fund balance
– Generally, fund balance represents the difference between current assets and current
liabilities. The City reserves those portions of fund balance which are legally segregated for a specific
future use or which do not represent available, spendable resources and are therefore not available for
general appropriation or expenditure. Unreserved fund balance indicates that portion of fund balance that
is available for appropriation in future periods. Designations are management’s intent to set aside these
resources for specific purposes.
Net assets
– Net assets represent the difference between assets and liabilities. Net assets, invested in
capital assets net of related debt, consists of capital assets, net of accumulated depreciation, reduced by the
outstanding balances of any bonds, mortgages, notes or other borrowings used for the acquisition,
construction, or improvement of those assets. Net assets are reported as restricted when there are
limitations imposed on their use either through constitutional provisions or enabling legislation, or through
external restrictions imposed by creditors, grantors, or laws or regulations of other governments. All other
net assets are reported as unrestricted.
When both restricted and unrestricted resources are available for an allowable use, it is the government’s
policy to use restricted resources first, then unrestricted resources as they are needed.
K. INTERFUND TRANSACTIONS
Interfund services provided and used are accounted for as revenues and expenditures or expenses.
Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that
are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and
as reductions of expenditures/expenses in the fund that is reimbursed. All other interfund transactions are
reported as transfers.
L. USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP requires management to make estimates
and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual
results could differ from such estimates.
Note 2 RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
AND THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES
The governmental fund statement of revenues, expenditures, and changes in fund balances includes a
reconciliation between net changes in fund balances – total governmental funds and changes in net assets
of governmental activities as reported in the government-wide statement of activities. One element of that
reconciliation explains that “Governmental funds 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.” The details of this $ 1,417,308 difference are as follows:
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CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 2 RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
ANT THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES
(Continued)
Another element of that reconciliation states that “Revenues in the Statement of Activities that do not
provide current financial resources are not reported as revenues in the funds.” The details of this
$ 2,107,877 difference are as follows:
Another element of that reconciliation states that “The issuance of long-term debt (e.g., bonds, leases)
provides current financial resources to governmental funds, while the repayment of principal of the long-
term debt consumes the current financial resources of governmental funds. Neither transaction, however,
has any effect on net assets.” The details of this $ 1,415,000 difference are as follows:
49
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 2 RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
ANT THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES
(Continued)
Note 3 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. BUDGETARY INFORMATION
Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the
United States for all governmental funds. All annual appropriations lapse at fiscal year end.
In August, the City Manager submits to the City Council proposed operating budgets for the fiscal year
commencing the following January. The proposed general fund budget and preliminary tax levy must be
certified to the County prior to September 15. The Council holds public hearings on the certified budget
and levy and must submit a final levy to the County prior to the end of December.
The appropriated budget is prepared by fund and department. The City Council must authorize any
transfer of budgeted amounts between departments or funds. Transfers of budgeted amounts within
departments in the General Fund must be authorized by the City Manager. The legal level of budgetary
control is the department level for the General Fund and the fund level for all other governmental funds.
There were no material supplemental budgetary appropriations during the year.
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.
B. EXCESS OF EXPENDITURES OVER APPROPRIATIONS
For the year ended December 31, 2006 expenditures exceeded appropriations in the General Fund by
$ 58,002, the Tax Increment District No. 3 fund by $ 3,640,553, the Economic Development Authority
fund by $ 26,363, the Tax Increment District No. 4 fund by $ 253,001, and the City Initiatives Grant fund
by $ 110,546.
50
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 3 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
(Continued)
C. DEFICIT FUND EQUITY
Deficit fund equity exists at December 31, 2006 in the following funds:
The deficits are being funded through internal borrowing and will be repaid from construction transfers
from utility funds, future bond issuance, investment earnings, and internal transfers.
D. PRIOR PERIOD ADJUSTMENTS
FUND STATEMENTS
In 2005, the City was awarded an environmental cleanup grant from Hennepin County. Expenditures for
this grant were made in 2005, documented and forwarded to the grantor for reimbursement, and the
reimbursement was received in 2006. This reimbursement should have been recorded as a receivable at the
end of 2005. The beginning fund balance in the Tax Increment District No. 3 fund was increased by
$ 60,000 to reflect this receivable.
The City reassessed its policy on capitalization of infrastructure assets during 2006. Adjustments were
made to include all components of a construction project if the project total exceeds the capitalization
threshold. In 2005, the Water Utility, Sanitary Sewer Utility, and Storm Drainage Utility funds transferred
cash to the Infrastructure Construction fund to pay for the respective utilities portions of reconstruction
projects. These amounts were not included in Construction in Progress in the Enterprise funds at
December 31, 2005. The beginning value of net assets in the Water Utility, Sanitary Sewer Utility, and
Storm Drainage Utility funds was increased by $ 78,584, $ 147,938, and $ 202,684, respectively, to reflect
the capitalization of the project costs.
GOVERNMENT-WIDE STATEMENTS
The City reassessed its policy on capitalization of infrastructure assets during 2006. Adjustments were
made to include all components of a construction project if the total exceeds the capitalization threshold.
In 2005, the Street Light Utility fund transferred cash to the Infrastructure Construction fund to provide
funding for a street reconstruction project. This amount was left off the cost of the project included in
Construction in Progress at December 31, 2005. The beginning value of net assets in the Governmental
Activities was increased by $ 35,345 to reflect the capitalization of this portion of the asset.
51
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 3 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
D. PRIOR PERIOD ADJUSTMENTS
GOVERNMENT-WIDE STATEMENTS (Continued)
The Economic Development Authority fund purchased two properties intended for redevelopment in prior
years. These properties have not been included in previous financial statements. The beginning value of
net assets in the Governmental Activities has been increased by $ 37,000 and the properties have been
recorded as Assets Held for Resale on the balance sheet.
The Tax Increment District No. 3 fund purchased property intended for redevelopment in 2005. The costs
associated with this transaction had been recorded as Construction in Progress, in anticipation of
capitalizing the total cost when necessary improvements were complete and the property was made
available for redevelopment. This property was reclassified as Assets Held for Resale and recorded at cost,
not to exceed net realizable value. The net effect on the beginning net assets for Governmental Activities
is a decrease of $ 2,378,733.
The delinquent tax increments receivable balance in the Tax Increment District No. 3 was overstated at the
December 31, 2005. Accurate balance information regarding the receivable balance was obtained for
December 31, 2006 and an adjustment was made to reflect the appropriate balance for the prior year end.
The beginning value of net assets in the Governmental Activities was decreased by $ 235,728, to reflect
this adjustment.
In prior years, deferred revenue reported in the Infrastructure Construction fund on the Fund Statements
was incorrectly reported as revenue on the Government-Wide Statements. This revenue should have been
reported as unearned revenue in the Governmental Activities. The beginning value of net assets in the
Governmental Activities was decreased by $ 36,360 to reflect this adjustment.
Note 4 DETAILED NOTES ON ALL FUNDS
A. DEPOSITS AND INVESTMENTS
In accordance with Minnesota Statutes, the City maintains deposits at only those depository banks
authorized by the City Council. All such depositories 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.
Authorized collateral includes the legal investments described below, as well as certain first mortgage
notes, and certain other state or local government obligations. Minnesota Statutes require that securities
pledged as collateral be held in safekeeping by the City Treasurer or in a financial institution other than
that furnishing the collateral.
At year-end, the City’s carrying value amount of deposits was $ 86,942 composed of bank balances of
$ 402,112. All balances were covered by federal depository insurance or by perfected collateral held by
the Federal Reserve Bank.
52
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
A. DEPOSITS AND INVESTMENTS
(Continued)
As of December 31, 2006 the City had the following investments and maturities:
Interest rate risk – The City’s investment policy requires interest earnings remain stable and predictable
through at least the next budget cycle and that at least 50% of the investment portfolio remain for two or
more years with known interest rates. The policy also states that the portfolio shall remain sufficiently
liquid to meet all operating requirements that may be reasonably expected.
– As of December 31, 2006 the City’s investment in FNMA and FHLB notes were all rated
Credit risk
AAA by Moody’s Investor Service. The City’s external investment pool is with 4M which is regulated by
Minnesota Statutes and the Board of Directors of the League if Minnesota Cities. The 4M fund is an
unrated 2a7-like pool and the fair value of the position in the pool is the same as the value of the pool
shares.
– The City’s policy requires that securities purchased from any bank or dealer be
Custodial credit risk
placed with an independent third party for custodial safekeeping. All of the City’s investments were held
in an institutional trust under contract with the City for safekeeping services.
53
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
(Continued)
B. RECEIVABLES
Significant receivable balances not expected to be collected within one year of December 31, 2006 are as
follows:
Governmental funds report deferred revenue in connection with receivables for revenues that are not
considered to be available to liquidate liabilities of the current period. Governmental funds 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:
The City has leased a portion of the police second floor expansion area to the Local Government
Information Systems Association (LOGIS) as a backup computer facility. The lease has a term of six
years, commencing on August 1, 2005, and calls for monthly lease payments based on the square-footage.
Lease revenue for the year ended December 31, 2006 was $ 8,694. Future minimum lease payments are as
$ 8,694 annually through 2010 and $ 5,072 for 2011.
54
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
(Continued)
C. CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2006 was as follows:
55
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
C. CAPITAL ASSETS
(Continued)
Depreciation expense was charged to functions/programs of the primary government as follows:
CONSTRUCTION COMMITMENTS
At December 31, 2006 the City had construction project contracts in progress. The commitments related to
remaining contract balances are summarized as follows:
56
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
(Continued)
D. INTERFUND BALANCES AND TRANSFERS
Individual fund interfund receivable and payable balances at December 31, 2006 are as follows:
The $350,000 between the Tax Increment District No. 3 and Earle Brown Tax Increment District funds and
the $792,488 advance between the Golf Course and Capital Improvements funds are not expected to be
eliminated within one year of December 31, 2006.
Interfund payables/receivables are representative of lending/borrowing arrangements to cover deficit cash
balances at the end of the fiscal year. Balances will be paid with transfers from other funds and collections
of outstanding receivables.
57
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
D. INTERFUND BALANCES AND TRANSFERS
(Continued)
Interfund transfers:
58
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
D. INTERFUND BALANCES AND TRANSFERS
(Continued)
Interfund transfers allow the City to allocate financial resources to the funds that receive benefit from
services provided by another fund or to provide additional capital and infrastructure funding. In addition,
interfund transfers are occasionally authorized to allow redistribution of resources between funds for the
most efficient use of funds. In 2006, transfers from the General Fund to nonmajor governmental funds
such as the Technology Fund allowed excess fund General Fund balance to be put to use in ways that
would reduce the need for taxes or other sources of public funds in the nonmajor funds. Transfers from the
Storm Drainage Utility and Street Light Utility funds to the Infrastructure Construction Fund were used to
fund certain street construction projects. Included in the transfers in the Water Utility, Sanitary Sewer
Utility and Central Garage Funds is the book value of assets that were reallocated during the year.
E. OPERATING LEASES
The City leases space for its municipal liquor stores. The leases are both ten-year leases and began in 2000
and 2003. Both leases have options for a ten-year extension. The leases provide for a minimum monthly
base rent payment, plus a pro-rata share of common area expenses. Additional lease payments are required
if agreed-upon revenue thresholds are attained. These leases may be cancelled at the City’s option if the
City ceases liquor operations. Total rental expense under the lease agreements for the years ended
December 31, 2006 and 2005 was $ 242,801 and $ 235,174, respectively. Future minimum rent payments
under the current agreements are as follows:
F. LONG-TERM DEBT
The City issues general obligation bonds to provide funds for the construction of major capital facilities,
construction of infrastructure, and economic development and redevelopment. General obligation bonds
have been issued for governmental activities. During the year, general obligation improvement bonds of
$ 1,460,000 were issued to finance several street and storm reconstruction projects.
59
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
F. LONG-TERM DEBT
(Continued)
As of December 31, 2006 the long-term debt of the financial reporting entity consisted of the following:
GOVERNMENTAL ACTIVITIES
All long-term bonded indebtedness outstanding at December 31, 2006 is backed by the full faith and credit
of the City, including improvement and tax increment bond issues. Bonds in the governmental activities
will be retired by future property tax levies, tax increments or special assessments accumulated in the
specific debt services funds. In the event that a deficiency exists because of unpaid or delinquent tax
increments or special assessments at the time a debt service payment is due, the City must provide
resources to cover the deficiency until other resources are available. Delinquent tax increments in the
governmental funds at December 31, 2006 were $ 59,150; delinquent special assessments in the
governmental funds at December 31, 2006 were $ 89,977, which is included in the special assessments
receivable balance of $ 3,186,932.
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CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
F. LONG-TERM DEBT
GOVERNMENTAL ACTIVITIES (Continued)
Annual debt service requirements to maturity for long-term debt are as follows:
CHANGE IN LONG-TERM LIABILITIES
Long-term liability activity for the year ended December 31, 2006 was as follows:
Compensated absences are liquidated by the Public Employees Compensated Absences Fund.
CONDUIT DEBT OBLIGATIONS
From time to time, the City has issued Housing Revenue Bonds and Industrial Revenue Bonds or Notes to
provide assistance to qualified private sector entities for the acquisition and construction of housing,
industrial, or commercial facilities deemed to be in the public interest. The bonds or notes are secured by
the property financed and are payable solely from payments received on the underlying mortgage loans.
The City has no obligation of its assets or of its general tax base for the repayment of any of these bonds or
notes. Accordingly, the bonds or notes are not reported as liabilities in the accompanying financial
statements. Upon final redemption of the bonds or notes, ownership of the property transfers to the private
sector entity served by the bond or note issue.
61
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
F. LONG-TERM DEBT
CONDUIT DEBT OBLIGATIONS (Continued)
As of December 31, 2006 there were three series of fixed rate Multifamily Housing Revenue Refunding
bonds outstanding, one Housing Revenue Development Refinancing Note outstanding, one series of
Variable Rate Demand Refunding Industrial Revenue Bonds outstanding, two Healthcare Revenue Notes
outstanding, and four Senior Housing Development Revenue Notes outstanding. The aggregate amount of
conduit debt obligations at December 31, 2006 is $ 33,137,709.
G. FUND EQUITY
Net assets reported in the government-wide statement of net assets at December 31, 2006 include the
following:
62
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
G. FUND EQUITY
(Continued)
Governmental fund balances reported on the fund financial statements as of December 31, 2006 include the
following:
63
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 5 OTHER INFORMATION
A. RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets;
errors and omissions and natural disasters.
Property and casualty insurance is provided through the League of Minnesota Cities Insurance Trust
(LMCIT), a public entity risk pool currently operating as a common risk management and insurance
program for Minnesota cities: general liability, property, automobile, mobile property and marine, crime,
employee dishonesty, boiler, and open meeting law. The City pays an annual insurance premium to the
LMCIT for its insurance coverage. The City is subject to supplemental assessments if deemed necessary
by the LMCIT. Currently, the LMCIT is self-sustaining through member premiums and reinsures through
commercial companies for claims in excess of various amounts. The City retains risk for the deductible
portions of the insurance policies. The amount of these deductibles is considered immaterial to the
financial statements.
Workers’ compensation 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 Workers’ Compensation
Reinsurance Association (WRCA) as required by law. For workers’ compensation, the City is not subject
to a deductible. The City’s workers’ compensation is retroactively 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.
There were no significant reductions in insurance from the previous year or settlements in excess of
insurance coverage for any of the past three years.
B. EMPLOYEE RETIREMENT PLANS
1. DEFINED BENEFIT PENSION PLAN
PLAN DESCRIPTION
All full-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.
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.
64
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 5 OTHER INFORMATION
B. EMPLOYEE RETIREMENT PLANS
1. DEFINED BENEFIT PENSION PLAN
PLAN DESCRIPTION (Continued)
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 Suite 200, St. Paul, Minnesota, 55103-2088 or by calling 651-296-7460 or 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 5.50%, respectively, of their annual
covered salary. PEPFF members are required to contribute 7.10% 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, 6.00% for Coordinated Plan PERF members, and 10.50% for PEPFF members.
The City’s contributions to the Public Employees Retirement Fund for the years ending December 31,
2006, 2005, and 2004 were $ 363,334, $ 326,886, and $ 327,384, respectively. The City’s
contributions to the Public Employees Police and Fire Fund for the years ending December 31, 2006,
2005, and 2004 were $ 318,913, $ 274,868, and $ 289,468, respectively. The City’s contributions
were equal to the contractually required contributions for each year as set by state statute.
2. PENSION PLAN – BROOKLYN CENTER FIRE DEPARTMENT RELIEF
ASSOCIATION
PLAN DESCRIPTION
The City contributes to the Brooklyn Center Fire Department Relief Association (the Association)
which is the administrator of a single employer retirement system to provide a retirement plan (the
Plan) to volunteer firefighters of the City who are members of the Association. The Association issues
a financial report which is available at City offices.
FUNDING POLICY AND ANNUAL PENSION COST
The City levies property taxes at the direction of and for the benefit of the Plan and passes through
state aids allocated to the Plan, all in accordance with enabling State statutes.The minimum tax levy
obligation is the financial contribution requirement for the year less anticipated state aids.
65
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 5 OTHER INFORMATION
B. EMPLOYEE RETIREMENT PLANS
2. PENSION PLAN – BROOKLYN CENTER FIRE DEPARTMENT RELIEF
ASSOCIATION
(Continued)
CONTRIBUTIONS
Total contributions to the plan in 2005 were $ 154,346, of which nothing was levied by the City of
Brooklyn Center and all $ 154,346 was from the State of Minnesota. The actuarially determined
contribution based on an actuarial valuation performed at January 1, 2005 was $ 70,409, which
represents funding for normal cost of $ 70,409 and administration of zero. Actual contributions have
continued at higher levels to allow for a transition to a defined contribution plan in the future. These
higher payments are irrevocable and do not affect the level of future City contributions. They do not
constitute an asset of the City.
The information below is the most recent data available.
THREE YEAR TREND INFORMATION
66
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 5 OTHER INFORMATION
B. EMPLOYEE RETIREMENT PLANS
2. PENSION PLAN – BROOKLYN CENTER FIRE DEPARTMENT RELIEF
ASSOCIATION
(Continued)
SCHEDULE OF FUNDING PROGRESS
C. ARBITRAGE REBATE
The Tax Reform Act of 1986 requires governmental entities to pay to the federal government income
earned on the proceeds from the issuance of debt in excess of interest costs, pending the expenditure of the
borrowed funds. This rebate of interest income (known as arbitrage) applies to governmental debt issued
after August 31, 1986.
The City issued greater than $5 million of bonds in the years 1997 and 2004 and therefore is required to
rebate excess investment income relating to these issues to the federal government. The extent of the
City’s liability for arbitrage rebates on the remaining bond issues is not determinable at this time.
However, in the opinion of management, any such liability would be immaterial.
D. LITIGATION
The City is subject to certain legal claims in the normal course of business. Management does not expect
the resolution of these claims will have a material impact on the City’s financial condition or results of
operations.
E. CONTINGENT LIABILITIES
Tax Increment Notes
In May 2002, the City entered into two limited tax increment notes with developers whereby the City will
pay the developers a percentage of the available tax increment. Whether payments will occur and the
amount of the payments is unpredictable since all payments are dependent on the City receiving tax
increment revenues from the developer’s project. As such, this liability has not been recorded in the
financial statements. Any potential liability ends with the decertification of the tax increment district.
67
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 5 OTHER INFORMATION
E. CONTINGENT LIABILITIES
(Continued)
A schedule of the notes outstanding at December 31, 2006 is as follows:
Sanitary Sewer Charges
The Environmental Services Division of the Metropolitan Council (MCES) has determined that
contaminated groundwater pumped from a redevelopment project area into the sanitary sewer system was
not correctly included in its calculations of non-metered flows from the City into the larger MCES sanitary
sewer collection system. While the accounting discrepancy goes back to 1989, a six year limitation is
imposed by state statutes on the amount that may be retroactively collected. The minimum estimated value
of the liability to the City is $ 580,465 and is recorded in the Sanitary Sewer Utility Fund. The maximum
liability to the City would be $ 653,867. The City expects this issue to be resolved in 2007.
F. POST-EMPLOYMENT HEALTH CARE BENEFITS
The City has provided post-employee health care benefits, as per the requirements of the City Council
resolution, for certain retirees and their dependents since 1986. Full time employees have the option of
retaining membership in the City’s health insurance plan for which the City will pay the single person
premium until such time as the retiree is eligible for Medicare coverage or at age 65, whichever is sooner.
If the retiree desires to continue family coverage, the additional cost for family coverage shall be paid by
the retiree to the City. There are two methods whereby an employee can qualify under this program. First,
the employee, on the date of his/her retirement, must meet eligibility requirements for a full retirement
annuity under PERA without reduction of benefits because of age, disability, or any other reason for
reduction. In addition, the employee must have been employed full time by the City for the last ten
consecutive years prior to the effective date of retirement. Additionally, employees who are retiring after
twenty-five years of consecutive service with the City and are eligible to receive a pension from PERA
shall have the option of retaining membership in the City’s health insurance plan for which the employee
will pay the premium until such time as the retiree is eligible to receive a full-retirement annuity under
PERA or PEPFF. At that time, the City will pay the single-person premium until such time as the retiree is
eligible for Medicare coverage or at age 65, whichever is sooner. Employees participate in this program on
a voluntary basis.
As of December 31, 2006, 13 employees currently participate in this program. The cost of City paid health
care premiums for the years ended December 31, 2006 and 2005 was $ 75,713 and $ 60,467, respectively.
Fund liabilities are paid on a pay-as-you-go basis with investment earnings of the Fund. The $ 2,553,336
recorded as a liability is not an actuarially determined amount, but the City’s best estimate of the future
liability.
68
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 5 OTHER INFORMATION
(Continued)
G. JOINT VENTURES AND JOINTLY GOVERNED ORGANIZATIONS
The City has several agreements with other entities that provide reduced costs, better service, and
additional benefits to the participants. The programs in which the City participates are listed below and
amounts recorded within the current year’s financial statements are disclosed.
Local Government Information Systems Association (LOGIS)
This consortium of approximately 30 government entities provides computerized data processing and
support services to its members. LOGIS is legally separate; the City does not appoint a voting majority of
its board, and the Consortium is fiscally independent of the City. The total amount recorded within the
2006 financial statements of the City is $ 332,134 for general services and application upgrades provided.
Costs were allocated to the various funds based on applications and/or use of services. Complete financial
statements for LOGIS may be obtained at the LOGIS offices located at 5750 Duluth Street, Golden Valley,
Minnesota 55422.
LOGIS Insurance Group
This group provides cooperative purchasing of health and life insurance benefits for approximately 45
governmental entities. The total of 2006 health and life insurance costs paid by the City was $ 1,065,662.
Complete financial statements may be obtained from Stanton Group located at 3405 Annapolis Lane,
Plymouth, Minnesota 55447.
The Brooklyn Center Fire Department Relief Association (the Association)
The Association is organized as a nonprofit organization, legally separate from the City, by its members to
provide pension and other benefits to members in accordance with Minnesota Statutes. Its board of
directors is elected by the membership of the Association and not by the City Council. The Association
issues its own set of financial statements. All funding is conducted in accordance with applicable
Minnesota Statutes, whereby state aids flow to the Association, tax levies are determined by the
Association and are only reviewed by the City. The Association pays benefits directly to its members. The
Association may certify tax levies to Hennepin County directly if the City does not carry out this function.
Because the Association is fiscally independent of the City, the financial information of the Association
has not been included within the City’s financial statements. (See Note 5.B.2. for disclosures relating to
the pension plan operated by the Association.) The City’s portion of the costs of the Association’s pension
benefits is included in the General Fund under public safety. Complete financial statements for the
Association may be obtained at the City offices located at 6301 Shingle Creek Parkway, Brooklyn Center,
Minnesota 55430.
H. SUBSEQUENT EVENT
In March 2007, the City of Brooklyn Center Economic Development Authority purchased the property at
1501 Freeway Boulevard for redevelopment for the purchase price of $ 3,804,306. This property will be
recorded in the Tax Increment District No. 3 fund as Assets Held for Resale at cost, not to exceed net
realizable value, until the property is sold.
69
70
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 9
REQUIRED SUPPLEMENTARY INFORMATION
Page 1 of 6
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For the Year Ended December 31, 2006
Variance wit
h
Final Budget -
Budgeted AmountsActualPositive
OriginalFinalAmount(Negative)
s
Revenues:
Taxes:
Property taxes and market value homestead credit10,179,301$$10,179,301$ 10,400,037$220,736
Penalties and interest-- 18,82618,826
Lodging ta650,000650,000 738,77688,776
x
Total taxes10,829,30110,829,301 11,157,639328,338
Licenses and permits:
Liquor and beer109,300109,300 86,638(22,662)
Building permits300,000300,000 329,60629,606
Mechanical permits60,00060,000 54,945(5,055)
Sewer and water permits1,0001,000 2,0211,021
Plumbing permits35,00035,000 25,395(9,605)
Garbage licenses3,1003,100 2,945(155)
Taxicab licenses1,5001,500 -(1,500)
Mechanical licenses4,2004,200 5,9401,740
Service station licenses2,6002,600 3,029429
Vehicle dealer licenses1,5001,500 1,750250
Bowling licenses720720 1,440720
Cigarette licenses4,0004,000 3,428(572)
Sign permits2,5002,500 2,5088
Rental dwelling license125,434125,434 149,47424,040
s
Amusement license 1,5001,500 1,210 (290)
s
Electrical Permits25,000 25,000 34,388 9,388
ROW permits-- 13,60313,603
Miscellaneous licenses and permits6,4006,400 4,313(2,087)
Total licenses and permits683,754683,754 722,63338,879
Intergovernmental:
Federal:
Other federal grants-- 3,6233,623
State:
667,665667,665 667,665-
Local government ai
d
Police pension aid255,000255,000 272,37717,377
PERA aid34,36534,365 34,365-
Fireperson pension aid125,000125,000 161,01936,019
Police training-- 15,19415,194
E-911 phone service20,00020,000 24,6374,637
Street maintenance ai90,000 -90,000 (90,000)
d
Miscellaneous grants53,00053,000 90,12537,125
Total intergovernmental1,245,0301,245,030 1,269,00523,975
Charges for services:
General government charges29,44029,440 40,95011,510
Public safety charges13,50013,500 20,2196,719
Recreation fees288,563288,563 310,37721,814
Community Center fee323,250323,250 312,422(10,828)
s
Total charges for services654,753654,753 683,96829,215
71
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 9
REQUIRED SUPPLEMENTARY INFORMATION
Page 2 of 6
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For the Year Ended December 31, 2006
Variance wit
h
Final Budget -
Budgeted AmountsActualPositive
OriginalFinalAmount(Negative)
s
Revenues (continued):
Fines and forfeits220,000$ 220,000$ 256,600$ 36,600$
Miscellaneous:
Investment earnings (net of market value change130,000130,000 239,470109,470
)
Othe79,000 85,76779,000 6,767
r
Total miscellaneous209,000209,000 325,237116,237
Total revenues13,841,83813,841,838 14,415,082573,244
Expenditures:
General government:
Mayor and council:
Current:
Personal services49,68549,685 46,8662,819
Materials and supplies100100 378(278)
Services and other charges82,45082,450 91,141(8,691)
Total mayor and council132,235132,235 138,385(6,150)
Administrative (Manager, Clerk, HR) offices:
Current:
Personal services483,130483,130 420,47262,658
Materials and supplies5,2005,200 3,9561,244
Services and other charges28,76028,760 24,5434,217
Total administrative office517,090517,090 448,97168,119
Elections and voter registration:
Current:
Personal services57,80957,809 54,9922,817
Materials and supplies1,0001,000 846154
Services and other charges36,45036,450 25,33411,116
Total elections and voter registration95,25995,259 81,17214,087
Assessor's office:
Current:
Personal services238,496238,496 231,0767,420
Materials and supplies3,6003,600 3,884(284)
Services and other charges41,32341,323 39,4811,842
274,4418,978
Total assessor's office283,419283,419
Finance:
Current:
Personal services399,634399,634 436,940(37,306)
Materials and supplies2,5002,500 2,094406
Services and other charges13,11013,110 4,9328,178
Total finance415,244415,244 443,966(28,722)
72
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 9
REQUIRED SUPPLEMENTARY INFORMATION
Page 3 of 6
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For the Year Ended December 31, 2006
Variance wit
h
Final Budget -
Budgeted AmountsActualPositive
OriginalFinalAmount(Negative)
s
Expenditures:
General government (continued):
Legal:
Current:
Services and other charges290,000$ 290,000$ 321,332$ (31,332)$
Government buildings:
Current:
Personal services255,389 255,389 262,935 (7,546)
Materials and supplies51,70051,700 62,455(10,755)
Services and other charges295,606295,606 377,832(82,226)
Total current602,695602,695 703,222(100,527)
Capital outla11,250 9,68011,250 1,570
y
Total government buildings613,945613,945 712,902(98,957)
Information technology:
Current:
Personal services176,456176,456 178,605(2,149)
Materials and supplies10,50010,500 9,1311,369
Services and other charges152,867152,867 137,98814,879
Total information technolog339,823339,823 325,72414,099
y
Total general governmen
2,687,0152,687,015 2,746,893 (59,878)
t
Public safety:
Police protection:
Current:
Personal services4,814,6984,814,698 4,644,058170,640
Materials and supplies106,002106,002 116,289(10,287)
Services and other charges898,722898,722 994,745(96,023)
Total current5,819,4225,819,422 5,755,09264,330
10,200 18,70710,200 (8,507)
Capital outla
y
Total police protection5,829,6225,829,622 5,773,79955,823
Fire protection:
Current:
Personal services483,965483,965 533,361(49,396)
Materials and supplies61,00061,000 56,8314,169
Services and other charges211,897211,897 269,385(57,488)
Total fire protection756,862756,862 859,577(102,715)
73
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 9
REQUIRED SUPPLEMENTARY INFORMATION
Page 4 of 6
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For the Year Ended December 31, 2006
Variance wit
h
Final Budget -
Budgeted AmountsActualPositive
OriginalFinalAmount(Negative)
s
Expenditures:
Public safety (continued):
Protective inspection:
Current:
Personal services424,181$ 424,181$ 401,977$ 22,204$
Materials and supplies8,7008,700 6,9141,786
Services and other charges72,75972,759 79,154(6,395)
Total protective inspection505,640505,640 488,04517,595
Emergency preparedness:
Current:
Personal services54,25254,252 46,3807,872
Materials and supplies2,4002,400 2,010390
Services and other charges7,4157,415 7,008407
Total emergency preparedness64,06764,067 55,3988,669
Total public safety7,156,1917,156,191 7,176,819(20,628)
Public works:
Engineering department:
Current:
Personal services465,263465,263 374,83490,429
Materials and supplies6,0706,070 4,1061,964
Services and other charges42,73042,730 35,6107,120
Total current514,063514,063 414,55099,513
Capital outla 5,2005,200 84 5,116
y
Total engineering department519,263519,263 414,634104,629
Street department:
Current:
Personal services702,035702,035 651,80050,235
Materials and supplies121,550121,550 106,65914,891
Services and other charges486,245486,245 523,548(37,303)
Total current1,309,8301,309,830 1,282,00727,823
Capital outla13,000 13,00013,000 -
y
Total street department1,322,8301,322,830 1,295,00727,823
Total public works1,842,0931,842,093 1,709,641132,452
Community services:
Social services:
Current:
Services and other charges83,52583,525 123,172(39,647)
74
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 9
REQUIRED SUPPLEMENTARY INFORMATION
Page 5 of 6
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For the Year Ended December 31, 2006
Variance wit
h
Final Budget -
Budgeted AmountsActualPositive
OriginalFinalAmount(Negative)
s
Expenditures (continued):
Parks and recreation:
Administration:
Current:
Personal services473,946$ 473,946$ 486,413$ (12,467)$
Materials and supplies10,90010,900 9,7011,199
Services and other charges55,14055,140 52,9282,212
Total current539,986539,986 549,042(9,056)
Capital outla 1,2001,200 - 1,200
y
Total administration541,186541,186 549,042(7,856)
Adult programs:
Current:
Personal services53,54153,541 51,0542,487
Materials and supplies11,80011,800 17,599(5,799)
Cost of good sold to public19,42519,425 14,9034,522
Services and other charges90,05590,055 127,494(37,439)
Total adult programs174,821174,821 211,050(36,229)
Teen programs:
Current:
Personal services2,2852,285 4,324(2,039)
Materials and supplies500500 590(90)
Total teen programs2,7852,785 4,914(2,129)
Youth programs:
Current:
Personal services39,89739,897 35,8654,032
Materials and supplies9,5039,503 9,273230
Services and other charges100100 -100
Total youth programs49,50049,500 45,1384,362
General programs:
Current:
Personal services5,7015,701 4,3751,326
Materials and supplies100100 6535
Services and other charges8,1008,100 12,160(4,060)
Total general programs13,90113,901 16,600(2,699)
Community center:
Current:
Personal services405,376405,376 386,19719,179
Materials and supplies18,50018,500 17,936564
Services and other charges58,00058,000 75,142(17,142)
Total current481,876481,876 479,2752,601
7,0007,000 6,414 586
Capital outla
y
Total community cente488,876488,876 485,6893,187
r
75
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 9
REQUIRED SUPPLEMENTARY INFORMATION
Page 6 of 6
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For the Year Ended December 31, 2006
Variance wit
h
Final Budget -
Budgeted AmountsActualPositive
OriginalFinalAmount(Negative)
s
Expenditures:
Parks and recreation (continued):
Park maintenance:
Current:
Personal services503,010$ 503,010$ 490,127$ 12,883$
Materials and supplies54,47554,475 40,65113,824
Services and other charges267,830267,830 339,889(72,059)
Total current825,315825,315 870,667(45,352)
Capital outla 6,6006,600 5,694 906
y
Total park maintenance831,915831,915 876,361(44,446)
Total parks and recreation2,102,9842,102,984 2,188,794(85,810)
Economic development:
Convention bureau:
Current:
Services and other charges308,750308,750 350,919(42,169)
ondepartmental:
N
Expenditures not charged to departments:
Current:
Personal services57,80957,809 53,7304,079
Materials and supplies21,85021,850 23,002(1,152)
Services and other charges341,986341,986 287,23554,751
Total nondepartmental421,645421,645 363,96757,678
Total expenditures14,602,20314,602,203 14,660,205(58,002)
Revenues over (under) expenditures(760,365)(760,365) (245,123)515,242
Other financing sources (uses):
Transfers in - administrative services reimburse830,365830,365 529,362(301,003)
d
Transfers to other funds(70,000)(70,000) (70,000)-
Total other financing sources (uses)760,365760,365 459,362(301,003)
et increase (decrease) in fund balance$-$ 214,239- $214,239
N
Fund balance - January 1 7,294,951
Fund balance - December 31$ 7,509,190
76
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 10
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE - TAX INCREMENT DISTRICT NO. 3
For the Year Ended December 31, 2006
Variance wit
h
Final Budget -
Budgeted Amounts
Positive
OriginalFinalActual(Negative)
Revenues:
Tax increments$3,484,000$3,484,000$ 1,609,994$(1,874,006)
-- 39,784 39,784
Intergovernmental revenu
e
Investment earnings (net of market value adjustment -- 881,312 881,312
)
Total revenues3,484,0003,484,000 2,531,090(952,910)
Expenditures:
Current:
Economic development:
Personal services-- 43,331(43,331)
Supplies-- 433(433)
Services and other charges- 682,810- (682,810)
Capital outlay:
Economic developmen -- 2,913,979 (2,913,979)
t
Total expenditures- 3,640,553- (3,640,553)
Revenues over (under) expenditures3,484,0003,484,000 (1,109,463)(4,593,463)
Other financing sources (uses):
Transfers out(1,887,080)(1,887,080) (1,887,804)(724)
Total other financing sources (uses)(1,887,080)(1,887,080) (1,887,804)(724)
et increase in fund balance$1,596,920$1,596,920 (2,997,267)$(4,594,187)
N
Fund balance - January 1, as previously state 23,664,938
d
Prior period adjustment 60,000
Fund balance - January 1, restated 23,724,938
Fund balance - December 31$ 20,727,671
77
78
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
A Special Revenue Fund is used to account for the proceeds of specific revenue sources
that are legally restricted to expenditures for specified purposes.
DEBT SERVICE FUNDS
The Debt Service Funds are used to account for the accumulation of resources for, and
payment of, interest, principal and related costs on general long-term debt.
CAPITAL PROJECT FUNDS
The Capital Project Funds account for financial resources to be used for the acquisition or
construction of major capital facilities (other than those financed by Proprietary Funds).
79
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 11
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2006
Total
SpecialDebtCapitalNonmajor
RevenueServiceProjectGovernmental
Assets
Cash and investments$ 2,529,749$ 1,097,603$ 4,474,125$ 8,101,477
Receivables:
Accounts - 180,866- 180,866
Current taxes 1,984 7,146 - 9,130
Delinquent taxes 14,966 33,034 - 48,000
Special assessments - 142,220- 142,220
Due from other governments 24,064 - 56,056 80,120
Interfund receivable - 262,206- 262,206
Advances to other funds - 792,488- 792,488
Assets held for resale 37,000 - - 37,000
Total assets2,607,7631,137,783 5,907,9619,653,507
Liabilities and Fund Balances
Liabilities:
Accounts payable 379 109,437- 109,816
Accrued salaries and wages 5,178 - 2,299 7,477
Due to other funds 410,000 - 410,000-
Interfund payable - 262,206- 262,206
Due to other governments 4,500 - - 4,500
Contracts payable - 224,913- 224,913
Deferred revenue 53,166 33,034 170,874 257,074
Total liabilities 473,223 33,034 769,729 1,275,986
Fund balances:
Reserved 1,104,749- 973,832 2,078,581
Unreserved:
Designated 1,922,502 4,861,857- 6,784,359
Undesignated 212,038 (697,457)- (485,419)
Total fund balances 2,134,540 1,104,749 5,138,232 8,377,521
Total liabilities and fund balances$2,607,763$1,137,783$ 5,907,961$9,653,507
80
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 12
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2006
Total
SpecialDebtCapitalNonmajor
RevenueServiceProjectGovernmental
Revenues:
Property taxes$ 254,801$ 739,502$ 994,303-$
Tax increments 1,054,150 - 1,054,150-
Franchise fees - 658,410- 658,410
Special assessments - 290,484- 290,484
Intergovernmental 142,128 300,900 623,880 1,066,908
Charges for services 11,562 - 26,688 38,250
Investment earnings (net of market value adjustment)117,491 28,869 227,739 374,099
Miscellaneous 167,479 224,050- 391,529
Total revenues 1,747,611 1,069,271 2,051,251 4,868,133
Expenditures:
Current:
General government - 101,937- 101,937
Public safety 141,730 - 141,730-
Public works - 120,563- 120,563
Parks and recreation 35,456 - - 35,456
Economic development 309,065 - 309,065-
Capital outlay:
General government - - 40,903 40,903
Public safety 3,003 - - 3,003
Public works - 2,907,008- 2,907,008
Debt service:
Principal retirement 252,146 1,875,000 2,127,146-
Interest 1,030,108- 1,030,108-
Fiscal agent fees - 1,448 - 1,448
Bond issuance costs - - 30,491 30,491
Total expenditures 741,400 2,906,556 3,200,902 6,848,858
Revenues over (under) expenditures 1,006,211 (1,837,285) (1,149,651) (1,980,725)
Other financing sources (uses):
Bond proceeds - 1,420,390- 1,420,390
Discount on bond proceeds - - (445) (445)
Transfers in 253,405 1,887,804 642,907 2,784,116
Transfers out (253,405) - (253,405)-
Total other financing sources (uses) 1,887,804- 2,062,852 3,950,656
Net increase (decrease) in fund balances 1,006,211 50,519 913,201 1,969,931
Fund balances - January 1 1,128,329 1,054,230 4,225,031 6,407,590
Fund balances - December 31$2,134,540$1,104,749$ 5,138,232$8,377,521
81
82
NONMAJOR SPECIAL REVENUE FUNDS
The City of Brooklyn Center had the following Special Revenue Funds during the year:
Housing and Redevelopment Authority Fund (HRA)
- This fund has authority to levy an
ad valorem property tax for the purpose of conducting housing and redevelopment
projects. These projects are accounted for in the EDA Fund; all tax proceeds are
transferred to that fund.
Economic Development Authority Fund (EDA) - This fund was established to account
for the Economic Development Authority (EDA) of Brooklyn Center. The EDA carries
out development activities; it has authority to operate an enterprise. The Earle Brown
Heritage Center operates under this authority, as well as the tax increment financing
activities. The EDA also does redevelopment and housing projects, funded by an ad
valorem property tax levy and transfers from the CDBG and HRA funds.
Earle Brown Tax Increment District – This fund has the authority to collect tax
increments which are used for the historic restoration of the Earle Brown Farm and for
debt service payments on bonds which were issued for the same purpose.
Tax Increment District No. 4 Fund – This fund has the authority to collect tax increments
which are used for various redevelopment projects within the City and for debt service
payments of bonds which were issued for the same purpose.
Police Drug Forfeiture Fund - This fund was established to account for property and/or
cash seized by Police Department personnel.
Community Development Block Grant Fund (CDBG) - This fund was established to
account for funds received under Title I of the Housing and Community Development
Act of 1974.
City Initiatives Grant Fund – Revenues and expenditures from grants received from
outside entities are accounted for in this fund. Programs include several federal, state,
and local public safety grants, and state and local recreation grants.
83
CITY OF BROOKLYN CENTER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2006
Housing andEconomicEarle Brown
RedevelopmentDevelopmentTax Increment
AuthorityAuthorityDistrict
Assets
Cash and investments$ -$ 1,824,739$ 415,487
Current taxes receivable 1,984 - -
Delinquent taxes receivable 13,248 - 1,718
Due from other governments - - -
Asset held for resale - 37,000 -
Total assets15,2321,861,739417,205
Liabilities and Fund Balances
Liabilities:
Accounts payable - 189 -
Accrued salaries and wages - 2,723 194
Due to other funds - 60,000 350,000
Due to other governments - - -
Deferred revenue 13,248 37,000 1,718
Total liabilities 13,248 99,912 351,912
Fund balances:
Unreserved:
Designated:
Economic development - 1,761,827 65,293
Undesignated 1,984 - -
Total fund balances 1,984 1,761,827 65,293
Total liabilities and fund balances$15,232$1,861,739$417,205
84
Statement 13
Total
TaxPoliceCommunityCityNonmajor
IncrementDrugDevelopmentInitiativesSpecial
District No. 4ForfeitureBlock GrantGrantRevenue
$ 95,382$ 48,909$ 4,501$ 140,731$ 2,529,749
- - - - 1,984
- - - - 14,966
- - - 24,064 24,064
- - - - 37,000
95,382 48,9094,501164,7952,607,763
- - - 190 379
- - - 2,261 5,178
- - - - 410,000
- - 4,500 - 4,500
- - - 1,200 53,166
- - 4,500 3,651 473,223
95,382 - - - 1,922,502
- 48,909 1 161,144 212,038
95,382 48,909 1 161,144 2,134,540
$ 95,382$ 48,909$4,501$164,795$2,607,763
85
CITY OF BROOKLYN CENTER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For the Year Ended December 31, 2006
Housing andEconomicEarle Brown
RedevelopmentDevelopmentTax Increment
AuthorityAuthorityDistrict
Revenues:
Property taxes$ 254,801$ -$ -
Tax increments - - 810,861
Intergovernmental - 5,842 -
Charges for services - - -
Investment earnings (net of market
value adjustment) - 76,041 32,522
Miscellaneous - 116,947 -
Total revenues 254,801 198,830 843,383
Expenditures:
Current:
Public safety:
Personal services - - -
Supplies - - -
Services and other charges - - -
Total public safety - - -
Parks and recreation:
Personal services - - -
Supplies - - -
Services and other charges - - -
Total parks and recreation - - -
Economic development:
Personal services - 142,022 6,332
Supplies - 79 -
Services and other charges - 145,581 2,856
Total economic development - 287,682 9,188
Capital outlay:
Public safety - - -
Debt service:
Principal - - -
Total expenditures - 287,6829,188
Revenues over (under) expenditures 254,801 (88,852) 834,195
Other financing sources (uses):
Transfers in - 253,405 -
Transfers out (253,405) - -
Total other financing sources (uses) (253,405) 253,405 -
Net increase in fund balances 1,396 164,553 834,195
Fund balances - January 1 588 1,597,274 (768,902)
Fund balances - December 31$1,984$1,761,827$65,293
86
Statement 14
Total
TaxPoliceCommunityCityNonmajor
IncrementDrugDevelopmentInitiativesSpecial
District No. 4ForfeitureBlock GrantGrantRevenue
$ -$ -$ -$ -$ 254,801
243,289 - - - 1,054,150
- - 11,340 124,946 142,128
- - - 11,562 11,562
621 1,879 - 6,428 117,491
- 29,154 - 21,378 167,479
243,910 31,033 11,340 164,314 1,747,611
- - - 115,983 115,983
- 4,812 - 1,610 6,422
- 12,714 - 6,611 19,325
- 17,526 - 124,204 141,730
- - - 831 831
- - - 7,962 7,962
- - - 26,663 26,663
- - - 35,456 35,456
150 - - - 148,504
- - - 79
-
705 - 11,340 - 160,482
855 - 11,340 - 309,065
- 3,003 - - 3,003
252,146 - - - 252,146
253,001 20,529 11,340 159,660 741,400
(9,091) 10,504 - 4,654 1,006,211
- - - - 253,405
- - - - (253,405)
- - - - -
(9,091) 10,504 - 4,654 1,006,211
104,473 38,405 1 156,490 1,128,329
$ 95,382$ 48,909$1$161,144$2,134,540
87
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 15
SPECIAL REVENUE FUND - HOUSING AND REDEVELOPMENT AUTHORITY
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended December 31, 2006
Actual
Budgeted Amounts
OriginalFinalAmounts
Revenues:
Property taxes$ 257,065$ 257,065$ 254,801
Revenues over (under) expenditures 257,065 257,065 254,801
Other financing sources (uses):
Transfers out (257,065) (257,065) (253,405)
Net increase in fund balance$-$ -1,396
Fund balance - January 1 588
Fund balance - December 31$1,984
88
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 16
SPECIAL REVENUE FUND - ECONOMIC DEVELOPMENT AUTHORITY
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended December 31, 2006
Actual
Budgeted Amounts
OriginalFinalAmounts
Revenues:
Intergovernmental$ -$ -$ 5,842
Investment earnings (net of market value adjustment) - - 76,041
Miscellaneous - - 116,947
Total revenues - - 198,830
Expenditures:
Current:
Economic development:
Personal services 193,627 193,627 142,022
Supplies 1,600 1,600 79
Services and other charges 66,092 66,092 145,581
Total expenditures 261,319 261,319 287,682
Revenues over (under) expenditures (261,319) (261,319) (88,852)
Other financing sources (uses):
Transfers in 257,065 257,065 253,405
Net increase (decrease) in fund balance$(4,254)$ (4,254)164,553
Fund balance - January 1 1,597,274
Fund balance - December 31$1,761,827
89
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 17
SPECIAL REVENUE FUND - EARLE BROWN TAX INCREMENT DISTRICT
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended December 31, 2006
Actual
Budgeted Amounts
OriginalFinalAmounts
Revenues:
Tax increments$ 696,200$ 696,200$ 810,861
Investment earnings (net of market value adjustment) - - 32,522
Total revenue 696,200 696,200 843,383
Expenditures:
Current:
Economic development:
Personal services - - 6,332
Services and other charges - - 2,856
Capital outlay:
Economic development 696,200 696,200 -
Total expenditures 696,200 696,200 9,188
Net increase (decrease) in fund balance$-$ -834,195
Fund balance - January 1 (768,902)
Fund balance - December 31$65,293
90
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 18
SPECIAL REVENUE FUND - TAX INCREMENT DISTRICT NO. 4
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended December 31, 2006
Budgeted AmountsActual
OriginalFinalAmounts
Revenues:
Tax increments$ 258,600$ 258,600$ 243,289
Investment earnings (net of market value adjustment) - - 621
Total revenues 258,600 258,600 243,910
Expenditures:
Current:
Economic development:
Personal services - - 150
Services and other charges - - 705
Total economic development - - 855
Debt service:
Principal - - 252,146
Total expenditures - - 253,001
Revenues over (under) expenditures$258,600$ 258,600(9,091)
Fund balance - January 1 104,473
Fund balance - December 31$95,382
91
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 19
SPECIAL REVENUE FUND - POLICE DRUG FORFEITURE
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended December 31, 2006
Budgeted AmountsActual
OriginalFinalAmounts
Revenues:
Investment earnings (net of market value adjustment)$ 1,000$ 1,000$ 1,879
Miscellaneous:
Forfeited drug money 27,000 27,000 29,154
Total revenues 28,000 28,000 31,033
Expenditures:
Current:
Public safety:
Supplies 7,000 7,000 4,812
Services and other charges 6,000 6,000 12,714
Total public safety 13,000 13,000 17,526
Capital outlay:
Public safety 15,000 15,000 3,003
Total expenditures 28,000 28,000 20,529
Revenues over (under) expenditures$-$ -10,504
Fund balance - January 1 38,405
Fund balance - December 31$48,909
92
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 20
SPECIAL REVENUE FUND - COMMUNITY DEVELOPMENT BLOCK GRANT
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended December 31, 2006
Budgeted AmountsActual
OriginalFinalAmounts
Revenues:
Intergovernmental:
Federal grants$ 199,764$ 199,764$ 11,340
Expenditures:
Current:
Economic development:
Services and other charges 199,764 199,764 11,340
Revenues over (under) expenditures$-$ --
Fund balance - January 1 1
Fund balance - December 31$1
93
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 21
SPECIAL REVENUE FUND - CITY INITIATIVES GRANT
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended December 31, 2006
Budgeted AmountsActual
OriginalFinalAmounts
Revenues:
Intergovernmental$ -$ -$ 124,946
Charges for services 10,143 10,143 11,562
Investment earnings (net of market value adjustment) - - 6,428
Miscellaneous 39,166 39,166 21,378
Total revenues 49,309 49,309 164,314
Expenditures:
Current:
Public safety:
Personal services - - 115,983
Supplies - - 1,610
Services and other charges - - 6,611
Total public safety - - 124,204
Parks and recreation:
Personal services 8,406 8,406 831
Supplies 8,140 8,140 7,962
Services and other charges 32,568 32,568 26,663
Total parks and recreation 49,114 49,114 35,456
Total expenditures 49,114 49,114 159,660
Net increase (decrease) in fund balance$195$ 1954,654
Fund balance - January 1 156,490
Fund balance - December 31$161,144
94
NONMAJOR DEBT SERVICE FUNDS
The City's Debt Service Funds account for the following types of bonded indebtedness:
General Obligation Bonds Fund
– This fund is used to account for the accumulation of
resources for payment of general obligation bonds and interest thereon.
Tax Increment Bonds Fund – This fund is used to account for the payment of tax
increment general obligation bonds and interest thereon. These bonds were sold to
finance the purchase and redevelopment of various redevelopment projects within the
City. Financing for this debt is transferred from the Tax Increment District No. 3 Fund as
needed.
95
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 22
SUBCOMBINING BALANCE SHEET
NONMAJOR DEBT SERVICE FUNDS
December 31, 2006
General
Obligation
Bonds
Assets
Cash and investments$ 1,097,603
Current taxes receivable 7,146
Delinquent taxes receivable 33,034
Total assets1,137,783
Liabilities and Fund Balance
Liabilities:
Deferred revenue 33,034
Fund balance:
Reserved:
Debt service 1,104,749
Total liabilities and fund balance$1,137,783
96
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 23
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
NONMAJOR DEBT SERVICE FUNDS
For the Year Ended December 31, 2006
Total
GeneralTaxNonmajor
ObligationIncrementDebt
BondsBondsService
Revenues:
Property tax$ 739,502$ -$ 739,502
Intergovernmental 300,900 - 300,900
Investment earnings (net of market value adjustment) 28,869 - 28,869
Total revenues 1,069,271 1,069,271-
Expenditures:
Debt service:
Principal 875,000 1,000,000 1,875,000
Interest 143,028 887,080 1,030,108
Fiscal agent fees 724 724 1,448
Total expenditures 1,018,752 1,887,804 2,906,556
Revenues over (under) expenditures 50,519 (1,887,804) (1,837,285)
Other financing sources (uses):
Transfers in 1,887,804- 1,887,804
Net increase (decrease) in fund balances 50,519 - 50,519
Fund balances - January 1 1,054,230 1,054,230-
Fund balances - December 31$1,104,749$ 1,104,749-$
97
98
NONMAJOR CAPITAL PROJECT FUNDS
The City of Brooklyn Center had the following Capital Project Funds during the year:
Capital Reserve Emergency Fund
- This fund was established in 1997 to account for
monies held in reserve for catastrophic losses or unforeseen capital items.
Capital Improvements Fund - This fund was established in 1968 to provide funds, and to
account for the expenditure of such funds, for major capital outlays including, but not
limited to, construction or acquisition of major permanent facilities having a relatively
long life; and/or to reduce debt incurred for capital outlays. The financing sources of the
fund include ad valorem taxation, transfers from other funds, issuance of bonds, federal
and state grants, and investment earnings.
Infrastructure Construction Fund
– This fund accounts for the recourses and expenditures
required for the construction of infrastructure projects financed wholly or in part by
special assessments levied against benefited properties. Other financing sources include
transfers from utility funds, municipal state aids, federal and state grants, and investment
earnings.
Municipal State Aid Fund - This fund was established to account for the state allotment
of gasoline tax collections used for transportation related construction and maintenance
projects.
Earle Brown Heritage Center Improvements Fund - This fund was established to provide
a stable source of funds to pay for periodic capital improvements needed at the facility.
Street Reconstruction Fund – This fund accounts for franchise fees collected, which have
been dedicated to the reconstruction of the City’s infrastructure.
Technology Fund - This fund, established in 2003, accounts for funds set aside for
technology improvements or major technology renovations/replacements.
99
CITY OF BROOKLYN CENTER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
December 31, 2006
Capital
ReserveCapitalInfrastructure
AssetsEmergencyImprovementsConstruction
Cash and investments$ 1,326,630$ 322,092$ -
Accounts receivable - - 16,330
Special assessments receivable - - 142,220
Due from other governments - - -
Interfund receivable - 262,206 -
Advances to other funds - 792,488 -
Total assets1,326,6301,376,786158,550
Liabilities and Fund Balances
Liabilities:
Accounts payable - - 44,910
Accrued salaries and wages - - 2,299
Contracts payable - 27,353 197,560
Interfund payable - - 262,206
Deferred revenue - - 170,874
Total liabilities - 27,353 677,849
Fund balances:
Reserved:
Advances to other funds - 792,488 -
Committed contracts - 3,186 178,158
Unreserved:
Designated for capital improvements 1,326,630 553,759 -
Undesignated - - (697,457)
Total fund balances 1,326,630 1,349,433 (519,299)
Total liabilities and fund balances$1,326,630$1,376,786$158,550
100
Statement 24
MunicipalEarle BrownTotal
State AidHeritageNonmajor
forCenterStreetCapital
ConstructionImprovementsReconstructionTechnologyProjects
$ 262,795$ 260,864$ 1,815,313$ 486,431$ 4,474,125
- - 164,536 - 180,866
- - - - 142,220
56,056 - - - 56,056
- - - - 262,206
- - - - 792,488
318,851 260,8641,979,849486,4315,907,961
- 64,527 - - 109,437
- - - - 2,299
- - - - 224,913
- - - - 262,206
- - - - 170,874
- 64,527 - - 769,729
- - - - 792,488
- - - - 181,344
318,851 196,337 1,979,849 486,431 4,861,857
- - - - (697,457)
318,851 196,337 1,979,849 486,431 5,138,232
$ 318,851$ 260,864$1,979,849$486,431$5,907,961
101
CITY OF BROOKLYN CENTER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECT FUNDS
For the Year Ended December 31, 2006
Capital
ReserveCapitalInfrastructure
EmergencyImprovementsConstruction
Revenues:
Franchise fees$ -$ -$ -
Special assessments - - 290,484
Intergovernmental 74,133 - 3,915
Charges for services - - 26,688
Investment earnings (net of
market value adjustment) 51,205 34,929 881
Miscellaneous 194,921 23,369 1,240
Total revenues 320,259 58,298 323,208
Expenditures:
Current:
General government:
Services and other charges - - -
Public works:
Services and other charges - 21,660 63,352
Capital outlay
General government - - -
Public works - 490,499 1,417,391
Total capital outlay - 490,499 1,417,391
Debt service
Bond issuance costs - - 30,491
Total expenditures - 512,159 1,511,234
Revenues over (under) expenditures 320,259 (453,861) (1,188,026)
Other financing sources (uses):
Issuance of debt - - 1,420,390
Discount on issuance of debt - - (445)
Transfers in - 125,000 147,907
Total other financing sources (uses) - 125,000 1,567,852
Net increase (decrease) in fund balances 320,259 (328,861) 379,826
Fund balances - January 1 1,006,371 1,678,294 (899,125)
Fund balances - December 31$1,326,630$1,349,433$(519,299)
102
Statement 25
MunicipalEarle BrownTotal
State AidHeritageNonmajor
forCenterStreetCapital
ConstructionImprovementsReconstructionTechnologyProjects
$ -$ -$ 658,410$ -$ 658,410
- - - - 290,484
545,832 - - - 623,880
- - - - 26,688
19,361 10,819 91,903 18,641 227,739
- 3,500 - 1,020 224,050
565,193 14,319 750,313 19,661 2,051,251
- 79,362 - 22,575 101,937
35,551 - - - 120,563
- 40,903 - - 40,903
381,445 - 617,673 - 2,907,008
381,445 40,903 617,673 - 2,947,911
- - - - 30,491
416,996 120,265 617,673 22,575 3,200,902
148,197 (105,946) 132,640 (2,914) (1,149,651)
- - - - 1,420,390
- - - (445)
-
- 300,000 - 70,000 642,907
- 300,000 - 70,000 2,062,852
148,197 194,054 132,640 67,086 913,201
170,654 2,283 1,847,209 419,345 4,225,031
$ 318,851$ 196,337$1,979,849$486,431$5,138,232
103
104
NONMAJOR ENTERPRISE FUNDS
The City of Brooklyn Center had the following nonmajor Enterprise Funds during the
year:
Recycling and Refuse Fund - This fund accounts for the operation of a state-mandated
recycling program.
Street Light Utility Fund
- This fund was created to account for expenses related to
streetlights within the City. Benefiting properties are billed for these expenses.
105
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 26
SUBCOMBINING STATEMENT OF NET ASSETS
NONMAJOR ENTERPRISE FUNDS
December 31, 2006
Total
Recycling andStreet LightNonmajor
RefuseUtilityEnterprise
Assets
Cash and cash equivalents$ 5,428$ 102,239$ 107,667
Accounts receivable - net 60,849 55,662 116,511
Total assets 66,277 157,901 224,178
Liabilities
Accounts payable 764 1,679 2,443
Net assets
Unreserved$65,513$ 156,222$221,735
106
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 27
SUBCOMBINING STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN FUND NET ASSETS
NONMAJOR ENTERPRISE FUNDS
For the Year Ended December 31, 2006
Total
Recycling andStreet LightNonmajor
RefuseUtilityEnterprise
Operating revenues:
Sales and user fees$ 242,588$ 221,341$ 463,929
Operating expenses:
Supplies - 794 794
Other services 243,878 13,522 257,400
Insurance 1,975 1,367 3,342
Utilities - 145,536 145,536
Total operating expenses 245,853 161,219 407,072
Operating income (loss) (3,265) 60,122 56,857
Nonoperating revenues (expenses):
Investment earnings (net of market value adjustment) 1,409 5,625 7,034
Income (loss) before transfers (1,856) 65,747 63,891
Transfers out - (31,296) (31,296)
Change in net assets (1,856) 34,451 32,595
Net assets - January 1 67,369 121,771 189,140
et assets - December 31$65,513$ 156,222$221,735
N
107
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 28
SUBCOMBINING STATEMENT OF CASH FLOWS
NONMAJOR ENTERPRISE FUNDS
For the Year Ended December 31, 2006
Total
Recycling andStreet LightNonmajor
RefuseUtilityEnterprise
Cash flows from operating activities:
Receipts from customers$ 234,408$ 220,801$ 455,209
Payments to suppliers (245,457) (183,827) (429,284)
Net cash flows provided (used) by operating activities (11,049) 36,974 25,925
Cash flows from non capital financing activities
Transfers out - (31,296) (31,296)
Cash flows from investing activities:
Interest on investments 1,409 5,625 7,034
Net increase in cash and cash equivalents (9,640) 11,303 1,663
Cash and cash equivalents - January 1 15,068 90,936 106,004
Cash and cash equivalents - December 31$5,428$ 102,239$107,667
Reconciliation of operating income (loss) to net cash provided
(used) by operating activities:
Operating income (loss) $ (3,265)$ 60,122$ 56,857
Adjustments to reconcile operating income (loss) to net cash provided
(used) by operating activities:
Changes in assets and liabilities:
(Increase) decrease) in receivables (8,180) (540) (8,720)
Increase (decrease) in payables 396 (22,608) (22,212)
Total adjustments (7,784) (23,148) (30,932)
Net cash flows provided (used) by operating activities$(11,049)$ 36,974$25,925
108
INTERNAL SERVICE FUNDS
The City’s Internal Service Funds included in this section are:
Public Employees Compensated Absences Fund
- This fund accounts for payment of
unused vacation and sick leave time and the allocation of such costs to user departments.
Public Employees Retirement Fund - This fund accounts for certain health care insurance
benefits for City employees who retire before age 65. Substantially all of the City’s full-
time police and fire employees and all other full-time employees hired before July 1,
1989 may be eligible for those benefits from the time they qualify for an unreduced
PERA pension until they reach age 65 or become eligible for Medicare. In the event that
future costs would exceed earnings, other funds would be charged for the costs associated
with their employees.
Central Garage Fund - This fund was established to account for the acquisition and
maintenance of all City vehicles and rolling stock equipment. Vehicle and equipment
maintenance and repair costs are charged to the departments as incurred. Replacement
costs are charged to the departments over the estimated useful life of the vehicles and
equipment.
109
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 29
SUBCOMBINING STATEMENT OF NET ASSETS
INTERNAL SERVICE FUNDS
December 31, 2006
CentralEE RetirementEE Comp
GarageBenefitAbsencesTotal
Assets
Current assets:
Cash and cash equivalents$ 5,022,951$ 1,501,157$ 7,488,356964,248$
Accounts receivable - net 14,348 423 - 14,771
Inventories - at cost 29,971 - - 29,971
Total current assets 5,067,270 1,501,580 964,248 7,533,098
Noncurrent assets:
Capital assets:
Land improvements 166,108 - 166,108-
Machinery and equipment 6,179,996 - 6,179,996-
Less: Allowance for depreciation (3,785,989) - (3,785,989)-
Net capital assets 2,560,115 - 2,560,115-
Total assets 7,627,385 1,501,580 964,248 10,093,213
Liabilities
Current liabilities:
Accounts payable 92,474 - - 92,474
Accrued salaries payable 6,033 - - 6,033
Compensated absences payable-current - - 96,425 96,425
Accrued health insurance liability-current - 85,700 - 85,700
Total current liabilities 98,507 85,700 96,425 280,632
Noncurrent liabilities:
Compensated absences payable-long-term - 867,823- 867,823
Accrued health insurance liability-long-term 2,467,636- 2,467,636-
Total noncurrent liabilities 2,467,636- 867,823 3,335,459
3,616,091
Total liabilities 98,507 2,553,336964,248
Net assets
Invested in capital assets, net of related debt 2,560,115 - 2,560,115-
Unrestricted 4,968,763 (1,051,756) 3,917,007-
Total net assets$7,528,878$(1,051,756)$ 6,477,122-$
110
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 30
SUBCOMBINING STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN FUND NET ASSETS
INTERNAL SERVICE FUNDS
For the Year Ended December 31, 2006
CentralEE RetirementEE Comp
GarageBenefitAbsencesTotal
Operating revenues:
Sales and user fees$ 1,385,459$ -$ 87,249$ 1,472,708
Operating expenses:
Personal services 296,689 535,742 126,776 959,207
Supplies 349,085 - 349,085-
Other services 107,954 - 107,954-
Insurance 49,841 - - 49,841
Utilities 2,014 - - 2,014
Depreciation 465,491 - 465,491-
Total operating expenses 1,271,074 535,742 126,776 1,933,592
Operating income (loss) 114,385 (535,742) (39,527) (460,884)
Nonoperating revenues (expenses):
Investment earnings (net of market value adjustment)220,780 66,424 39,527 326,731
Gain (loss) on sale of capital assets 30,651 - - 30,651
Other revenue 35,383 - - 35,383
Total nonoperating revenues (expenses) 286,814 66,424 39,527 392,765
Income (loss) before contributions and transfers 401,199 (469,318) (68,119)-
Capital contributions 168,316 - 168,316-
Transfers in 36,542 - - 36,542
Change in net assets 606,057 (469,318) 136,739-
Net assets - January 1 6,922,821 (582,438) 6,340,383-
et assets - December 31$7,528,878$(1,051,756)$ 6,477,122-$
N
111
CITY OF BROOKLYN CENTER, MINNESOTA
Statement 31
SUBCOMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
For the Year Ended December 31, 2006
CentralEE RetirementEE Comp
GarageBenefitAbsencesTotal
Cash flows from operating activities:
Receipts from interfund services provided$ 1,374,812$ -$ 87,249$ 1,462,061
Payments to suppliers (449,730) - (449,730)-
Payments to employees (296,493) (70,846) (81,641) (448,980)
Miscellaneous revenue 35,383 - - 35,383
Net cash flows provided (used) by operating activities663,972 (70,846) 5,608 598,734
Cash flows from noncapital financing activities:
Transfers in 10,400 - - 10,400
Cash flows from capital and related financing activities:
Capital contributions 80,000 - - 80,000
Acquisition and construction of capital assets (1,131,677) - (1,131,677)-
Proceeds from sale of capital assets 163,669 - 163,669-
Net cash flows provided (used) by capital
and related financing activities (888,008) - (888,008)-
Cash flows from investing activities:
Interest on investments 220,780 66,424 39,527 326,731
Net increase in cash and cash equivalents 7,144 (4,422) 45,135 47,857
Cash and cash equivalents - January 1 5,015,807 1,505,579 919,113 7,440,499
Cash and cash equivalents - December 31$5,022,951$1,501,157$ 964,248$7,488,356
Reconciliation of operating income to net cash
provided (used) by operating activities:
Operating income (loss) $ 114,385$ (535,742)$ (39,527)$ (460,884)
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation 465,491 - 465,491-
Changes in assets and liabilities:
(Increase) decrease in receivables (10,647) 4,867 - (5,780)
(Increase) decrease in inventories 1,464 - - 1,464
Increase (decrease) in payables 57,700 - - 57,700
Increase (decrease) in accrued expenses 196 460,029 45,135 505,360
Other nonoperating income 35,383 - - 35,383
Total adjustments 549,587 464,896 45,1351,059,618
et cash provided (used) by operating activities$663,972$(70,846)$ 5,608$598,734
N
Noncash financing activities:
Capital contributions$ 5,000$ -$ -$ 5,000
Capital asset transfers 109,458 - 109,458-
Gain on sale of assets 30,651 - - 30,651
112
STATISTICAL SECTION
This part of the City of Brooklyn Center’s comprehensive annual financial report
presents detailed information as a context for understanding the financial statements, note
disclosures, and supplementary information. This section includes information for the
primary government, including any blended component units.
Contents Page
Financial Trends 114
These tables contain trend information to help the reader understand
the City’s financial performance by placing it in historical perspective.
Revenue Capacity 124
These tables contain information to help the reader assess the City’s
most significant “own-source” revenue, property taxes.
Debt Capacity 130
These tables present information to help the reader assess the
affordability of the government’s current levels of outstanding debt
and the City’s ability to issue debt in the future.
Demographic and Economic Information 136
These tables offer demographic and economic indicators to help the
reader understand the environment within which the City’s financial
activities take place.
Operating Information 138
These tables contain service and infrastructure data to help the reader
understand how the City’s financial report relates to the services the
City provides and the activities it performs.
Sources: unless otherwise noted, the information in these schedules is derived from the comprehensive
annual financial reports for the relevant year.
113
CITY OF BROOKLYN CENTER, MINNESOTA
Table 1
NET ASSETS BY COMPONENT
Last four fiscal years
(accrual basis of accounting)
(Unaudited)
2003200420052006
Governmental Activities
Invested in capital assets, net of related debt14,733,123$ $ 12,648,271$ 25,614,602$ 28,191,206
Restricted 14,853,260 39,412,423 29,326,928 27,637,465
Unrestricted 17,817,934 3,226,051 652,963 4,055,312
Total governmental activities net assets$47,404,317$55,286,745$ 55,594,493$59,883,983
Business-type activities
Invested in capital assets, net of related debt37,898,615$ $ 36,129,095$ 38,417,467$ 38,248,496
Unrestricted 6,464,332 7,137,218 7,087,856 7,973,318
Total business-type activities net assets$44,362,947$43,266,313$ 45,505,323$46,221,814
Primary government
Invested in capital assets, net of related debt52,631,738$ $ 48,777,366$ 64,032,069$ 65,304,632
Restricted 14,853,260 39,412,423 29,326,928 27,637,465
Unrestricted 24,282,266 10,363,269 7,740,819 13,163,700
Total primary government net assets$91,767,264$98,553,058$ 101,099,816$106,105,797
Note: Data for 1997-2002 is not available; the City did not prepare government-wide financial statements on an accrual basis for those years.
114
CITY OF BROOKLYN CENTER, MINNESOTA
Table 2
CHANGES IN NET ASSETS - GOVERNMENTAL ACTIVITIES
Page 1 of 3
Last four fiscal years
(accrual basis of accounting)
(Unaudited)
2003200420052006
Expenses
General government$ 2,649,846$ 2,801,422$ 2,970,364$ 2,936,638
Public safety 7,182,321 7,538,277 7,848,160 8,039,356
Public works 2,654,601 1,956,119 3,821,647 2,087,259
Community services 225,365 67,324 86,043 123,172
Parks and recreation 2,169,482 2,255,231 2,305,047 2,565,364
Economic development 1,759,585 1,683,025 3,559,027 2,567,377
Interest on long-term debt 922,253 1,268,649 1,349,852 1,184,017
Total expenses
17,563,453 17,570,047 21,940,140 19,503,183
Program Revenues
Charges for services:
General government 227,350 315,120 297,511 289,203
Public safety 951,518 687,731 1,026,736 800,408
Parks and recreation 624,294 618,199 681,851 665,332
Other activities 24,554 23,533 9,234 423,804
Operating grants and contributions 1,627,020 933,104 855,633 748,888
Capital grants and contributions 1,079,134 2,423,411 2,398,345 2,208,751
Total program revenues
4,533,870 5,001,098 5,269,310 5,136,386
Net revenue/(expense)
(13,029,583) (12,568,949) (16,670,830) (14,366,797)
General Revenues and Transfers
Taxes:
Property 10,407,613 15,730,170 11,288,883 11,618,486
3,980,518 2,682,874
Tax increments 3,527,881-
Franchise fees - 612,079662,614658,410
Lodging taxes 661,267 - 710,619 738,776
Unrestricted grants and contributions 1,413,913 923,374 577,548 702,030
Investment earnings 426,329 491,524 1,272,409 1,928,462
Gain on disposal of capital asset 13,976 29,202 31,880 23,963
Miscellaneous 588,264 660,218 - -
Transfers 100,000 2,004,810 (1,545,893) 303,286
Total general revenues and transfers
17,139,243 20,451,377 16,978,578 18,656,287
Change in Net Assets
$4,109,660$7,882,428$ 307,748$4,289,490
115
CITY OF BROOKLYN CENTER, MINNESOTA
Table 2
CHANGES IN NET ASSETS - BUSINESS-TYPE ACTIVITIES
Page 2 of 3
Last four fiscal years
(accrual basis of accounting)
(Unaudited)
2003200420052006
Expenses
Municipal liquor 724,897 939,244 978,743 970,260
Golf course 290,990 271,127 273,024 282,418
Earle Brown Heritage Center 2,109,166 2,180,229 2,262,359 2,439,709
Water utility 1,645,955 222,821 1,717,175 1,635,847
Sanitary sewer 2,567,032 165,651 2,660,706 3,176,426
Storm drainage 838,421 1,533,923 899,988 950,425
Recycling and refuse 223,679 2,310,645 254,661 245,853
Street light utility 147,293 756,593 213,094 161,219
Total expenses
8,547,433 8,380,233 9,259,750 9,862,157
Program Revenues
Charges for services:
Municipal liquor 853,353 991,058 1,099,172 1,244,738
Earle Brown Heritage Center 1,749,202 1,675,267 1,857,461 2,168,861
Water utility 1,530,592 1,583,450 1,825,521 1,906,375
Sanitary sewer 2,870,109 2,833,836 2,966,222 3,186,569
Storm drainage 1,264,512 1,276,778 1,298,690 1,323,607
Other activities 706,644 707,460 706,105 714,373
Total program revenues
8,974,412 9,067,849 9,753,171 10,544,523
Net revenue/(expense)
426,979 687,616 493,421 682,366
General Revenues and Transfers
337,231
Investment earnings 82,165 102,696199,876
Other 241,308 117,864 --
Transfers(100,000)
(2,004,810) 1,545,893 (303,286)
Total general revenues and transfers 223,473 (1,784,250) 1,745,769 33,945
Change in Net Assets
$650,452$(1,096,634)$ 2,239,190$716,311
116
CITY OF BROOKLYN CENTER, MINNESOTA
Table 2
CHANGES IN NET ASSETS - TOTAL
Page 3 of 3
Last four fiscal years
(accrual basis of accounting)
(Unaudited)
2003200420052006
Expenses
Governmental activities$ 17,563,453$ 17,570,047$ 21,940,140$ 19,503,183
Business-type activities 8,547,433 8,380,233 9,259,750 9,862,157
Total expenses
26,110,886 25,950,280 31,199,890 29,365,340
Program Revenues
Governmental activities 4,533,870 5,001,098 5,269,310 5,136,386
Business-type activities 8,974,412 9,067,849 9,753,171 10,544,523
Total program revenues
13,508,282 14,068,947 15,022,481 15,680,909
Net revenue/(expense)
(12,602,604) (11,881,333) (16,177,409) (13,684,431)
General Revenues and Transfers
Governmental activities 17,139,243 20,451,377 16,978,578 18,656,287
Business-type activities 223,473 (1,784,250) 1,745,769 33,945
Total general revenues and transfers
17,362,716 18,667,127 18,724,347 18,690,232
Change in Net Assets
$4,760,112$6,785,794$ 2,546,938$5,005,801
Note: Data for 1997-2002 is not available; the City did not prepare government-wide financial statements on an accrual basis for those years.
117
118
CITY OF BROOKLYN CENTER, MINNESOTA
Table 3
GOVERNMENTAL ACTIVITIES TAX REVENUE BY SOURCE
Last four fiscal years
(accrual basis of accounting)
(Unaudited)
PropertyTaxFranchiseLodging
TaxIncrementsFeesTaxTotal
2003$ 10,407,613$ 3,527,881$ -$ 661,267$ 14,596,761
2004 10,788,145 4,285,166 612,079 656,859 16,342,249
2005 11,288,883 3,980,518 662,614 710,619 16,642,634
2006 11,618,486 2,682,874 658,410 738,776 15,698,546
Note: Data for 1997-2002 is not available; the City did not prepare government-wide financial statements on an accrual basis for those years.
119
CITY OF BROOKLYN CENTER, MINNESOTA
FUND BALANCES - GOVERNMENTAL FUNDS
Last ten fiscal years
(modified accrual basis of accounting)
(Unaudited)
1997199819992000
General Fund
Reserved$ 105,074$ 105,074$ 105,074$ 105,074
Unreserved 6,496,706 7,232,926 7,203,633 7,346,969
Total general fund$6,601,780$7,338,000$ 7,308,707$7,452,043
All other governmental funds
Reserved$ 14,575,628$ 15,282,262$ 8,313,672$ 7,307,297
Unreserved, reported in:
Special revenue funds 213,750 470,944 1,723,559 1,816,806
Capital project funds 7,796,157 7,227,468 8,884,582 7,308,293
Total all other governmental funds$22,585,535$22,980,674$ 18,921,813$16,432,396
120
Table 4
200120022003200420052006
$ 173,353105,074$ $ 110,383$ 106,578$ 11,080$ 500
7,328,798 7,756,421 7,906,697 6,862,871 7,283,871 7,508,690
$ 7,433,872$ 7,929,774$8,017,080$6,969,449$ 7,294,951$7,509,190
$ 7,015,583$ 7,234,260$ 7,509,315$ 13,230,540$ 5,150,818$ 5,176,808
3,864,347 4,453,879 6,211,019 25,750,179 24,853,267 22,862,211
5,337,423 1,870,176 2,133,079 4,969,506 3,232,820 4,164,400
$ 16,217,353$ 13,558,315$15,853,413$43,950,225$ 33,236,905$32,203,419
121
CITY OF BROOKLYN CENTER, MINNESOTA
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
Last ten fiscal years
(modified accrual basis of accounting)
(Unaudited)
1997199819992000
Revenues
Property taxes$ 6,098,868$ 7,562,822$ 7,740,375$ 8,265,296
Tax increments 1,918,032 1,962,289 2,902,590 3,196,108
Franchise fees - - - -
Lodging taxes 523,745 660,613 808,266 836,857
Special assessments 1,019,832 1,016,733 909,894 1,287,934
Licenses and permits 485,232 549,067 763,960 632,549
Intergovernmental 5,122,415 4,936,343 8,602,166 7,899,522
Charges for services 757,640 771,614 739,054 779,060
Fines and forfeits 183,270 193,688 205,460 180,676
Investment earnings 1,310,878 1,732,579 609,879 798,229
Miscellaneous 143,895 439,013 168,050 125,012
Total revenues 17,563,807 19,824,761 23,449,694 24,001,243
Expenditures
General government 1,992,506 2,134,001 2,260,415 2,429,196
Public safety 5,107,849 5,185,965 5,354,413 5,453,143
Public works 1,868,130 1,955,108 1,904,205 2,100,865
Community services 79,800 73,066 83,295 95,148
Parks and recreation 2,212,790 2,148,201 2,233,465 2,344,768
Economic development 1,351,019 893,522 2,664,904 2,763,028
Nondepartmental 311,436 312,625 343,925 419,789
(670,390) (795,737)
Administrative services reimbursement (661,058)(731,737)
Capital outlay 4,833,321 6,453,906 13,838,702 7,275,675
Debt service
Principal 1,135,000 1,285,000 2,085,000 3,970,000
Interest1,017,1281,244,923
1,373,614 1,282,512
Other charges 52,150 40,537 13,930 13,426
Total expenditures 19,300,071 20,995,117 31,485,478 27,351,813
Revenues over (under) expenditures (1,736,264) (1,170,356) (8,035,784) (3,350,570)
Other financing sources (uses)
Bond issuance 8,975,000 2,670,000 1,585,000 735,000
Discount on bond issuance - - - -
Sale of capital assets - 2,411,987- 194,491
Transfers in 2,976,285 3,646,198 3,655,433 5,479,120
Transfers out (2,876,285) (4,071,198) (3,704,790) (5,404,122)
Refunded bonds redeemed - - - -
Total other financing sources (uses) 9,075,000 2,245,000 3,947,630 1,004,489
et change in fund balances$7,338,736$1,074,644$ (4,088,154)$(2,346,081)
N
Debt service as a percentage of
noncapital expenditures15.47%17.94%19.97%27.43%
122
Table 5
200120022003200420052006
$ 10,739,8477,932,469$ $ 10,268,278$ 10,598,478$ 11,641,177$ 11,525,040
3,967,398 3,022,252 3,466,114 3,834,060 4,680,688 2,664,144
- - - 612,079 662,614 658,410
826,957 717,176 661,267 656,858 710,619 738,776
1,136,454 1,190,031 1,232,682 1,313,782 1,226,655 1,214,571
788,629 823,996 827,685 678,077 675,530 722,633
5,824,513 7,039,895 3,479,082 3,239,020 2,578,031 2,375,697
688,453 575,748 709,623 711,526 754,575 722,218
230,408 278,557 290,408 254,980 253,748 256,600
2,082,680 648,423 317,749 385,022 1,078,434 1,601,731
150,369 267,717 607,582 609,902 427,839 477,296
23,628,330 25,303,642 21,860,470 22,893,784 24,689,910 22,957,116
2,504,392 2,553,426 2,475,323 2,594,041 2,586,993 2,839,150
5,672,098 6,255,221 6,620,481 7,025,629 7,014,528 7,299,842
2,142,064 1,986,692 2,114,378 1,814,107 2,197,127 1,817,120
106,034 103,491 91,581 67,324 86,043123,172
2,392,168 2,125,415 2,030,402 1,981,998 2,121,130 2,212,142
2,365,732 2,095,545 1,758,257 1,006,550 2,076,023 1,386,558
372,056 366,282 331,223 333,669 315,355 363,967
(767,504) (596,541) (607,221) (784,084) (754,085) (529,362)
6,558,177 9,608,420 1,881,360 4,724,289 8,335,916 5,918,472
2,805,000 3,000,000 3,220,000 3,751,513 2,772,189 3,127,146
1,330,162 1,034,139 905,518 881,016 1,214,751 1,197,392
8,931 28,712 26,079 126,858 23,758 53,226
25,489,310 28,560,802 20,847,381 23,522,910 27,989,728 25,808,825
(1,860,980) (3,257,160) 1,013,089 (629,126) (3,299,818) (2,851,709)
730,000 - 1,205,000 25,770,000 - 1,460,000
- - (8,860) (96,503) - (445)
-
572,266 474,648 73,175 --
4,124,184 4,263,453 3,703,509 5,103,613 2,811,793 2,784,116
(3,798,684) (4,063,453)(3,603,509)(3,098,803)
(2,619,793) (2,211,209)
- - - (7,280,000)- -
1,627,766 674,648 1,369,315 27,678,307 (7,088,000) 2,032,462
$ (233,214)$ (2,582,512)$2,382,404$27,049,181$(10,387,818)$(819,247)
23.89%21.47%21.91%25.32%20.41%22.01%
123
CITY OF BROOKLYN CENTER, MINNESOTA
ASSESSED TAX CAPACITY AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
Last ten fiscal years
(Unaudited)
1997199819992000
Real Property:
Residential$ 9,485,333$ 9,182,859$ 9,309,893$ 9,976,862
Nonresidential 12,837,157 11,082,436 10,657,588 11,002,424
Area-wide allocation (586,003) 226,287 537,406 1,504,330
Personal property 573,984 502,668 452,849 437,707
Less:
Tax increment districts 1,495,154 1,665,054 2,054,659 2,533,878
Total Assessed Tax Capacity 20,815,317 19,329,196 18,903,077 20,387,445
Direct Tax Rate 32.875 35.214 36.269 34.645
Estimated Market Value 988,593,300 1,022,736,700 1,098,665,900 1,177,854,400
Total Assessed Tax Capacity as a percentage
of Estimated Market Value2.11%1.89%1.72%1.73%
Source: City Assessing Department
124
Table 6
200120022003200420052006
$ 8,495,1968,928,738$ $ 9,362,788$ 10,532,558$ 12,177,307$ 13,942,981
14,093,094 9,225,991 9,430,533 9,775,352 9,903,157 9,475,576
746,438 635,875 875,145 1,097,596 1,023,618 1,161,174
452,680 262,882 273,072 281,963 294,377 298,953
3,296,624 2,450,218 2,538,825 3,134,417 3,122,665 2,559,620
20,924,326 16,169,726 17,402,713 18,553,052 20,275,794 22,319,064
35.996 58.901 52.792 53.693 51.723 48.069
1,324,649,100 1,488,832,300 1,673,812,000 1,840,115,300 1,959,999,100 2,035,666,100
1.58%1.09%1.04%1.01%1.03%1.10%
125
CITY OF BROOKLYN CENTER, MINNESOTA
PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS
Last ten fiscal years
(Unaudited)
Overlapping Rates
Metro
CityCountyDist 11Dist 279Dist 281Dist 286Districts
2
1997
32.875 42.174 55.588 62.666 63.757 56.260
-
1998 35.214 38.386 51.824 56.386 65.350 51.567 5.646
1999 36.998 40.994 54.856 54.337 47.716 59.807 6.035
2000 35.369 39.655 51.792 53.284 48.492 44.356 6.039
2001 36.740 37.679 52.224 56.784 46.678 47.139 5.830
2002 58.901 50.789 29.082 30.092 30.213 26.338 3.537
2003 54.021 50.607 26.941 35.042 29.179 49.817 3.825
2004 53.693 47.324 21.050 23.709 34.258 39.892 3.502
2005 51.723 44.172 21.492 24.336 29.989 36.159 3.304
2006 48.069 41.016 20.046 21.815 28.489 39.781 2.924
Source: City Assessing Department and Hennepin County Property Tax Services
1
Watershed levy was added in 2006 in schools districts 279 and 281, and parts of school districts 11 and 286.
2
Metro and Other Districts are included with County for 1997. Allocation is not available.
126
Table 7
Total Direct and Overlapping Rates
OtherDistrict 11District 11DistrictDistrictDistrict 286District 286
1
DistrictsWatershed
no watershedwith watershed279281no watershedwith watershed
- - 1 30.637 - 1 37.715 1 38.806 1 31.309 -
2.497 - 1 33.567 - 1 38.129 1 47.093 1 33.310 -
3.247 - 1 42.130 - 1 41.611 1 34.990 1 47.081 -
3.111 - 1 35.966 - 1 37.458 1 32.666 1 28.530 -
2.294 - 1 34.767 - 1 39.327 1 29.221 1 29.682 -
3.844 - 1 46.153 - 1 47.163 1 47.284 1 43.409 -
5.161 - 1 40.555 - 1 48.656 1 42.793 1 63.431 -
3.986 - 1 29.555 - 1 32.214 1 42.763 1 48.397 -
4.078 - 1 24.769 - 1 27.613 1 33.266 1 39.436 -
4.074 0 .073 1 16.129 1 16.202 1 17.971 1 24.645 1 35.864 1 35.937
127
CITY OF BROOKLYN CENTER, MINNESOTA
Table 8
PRINCIPAL PROPERTY TAXPAYERS
Current Year and Nine Years Ago
(Unaudited)
20061997
Percentage ofPercentage of
Net TaxTotal TaxNet TaxTotal Tax
TaxpayerCapacityRankCapacity ValueCapacityRankCapacity Value
Talisman Brookdale, LLC$ 1,044,06014.68%$ 1,376,93616.62%
Regal Cinemas, Inc. 234,35021.05% --
Brookdale Corner, LLC 204,85030.92% --
BCC Associates, LLC 191,25040.86% --
Twin Lake North 184,61350.83% --
Medtronic, Inc. 175,65060.79% --
The May Department Stores Co. 166,45070.75% --
B.C. Leased Housing 150,75080.68% --
Sears Roebuck and Co. 150,22090.67% 359,26071.73%
Wickes Furniture Company 146,110100.65% --
Dayton-Hudson Corp. -- 1,108,09025.32%
Prudential Insurance Co. -- 774,73833.72%
Ryan Construction Co. -- 674,23043.24%
Lang-Nelson -- 422,96052.03%
Bradley Real Estate Inc. -- 405,50061.95%
JC Penney's -- 320,94281.54%
First Indrustrial Raelty Trust -- 318,67591.53%
Normandale Tennis Club -- 181,930100.87%
Totals$ 2,648,30311.87%$5,943,26128.55%
Source: City Assessing Department
128
129
CITY OF BROOKLYN CENTER, MINNESOTA
Table 10
RATIOS OF OUTSTANDING DEBT BY TYPE
Last ten fiscal years
(Unaudited)
Business-Type
Governmental ActivitiesActivities
GeneralTaxStorm SewerTotalPercentage
ObligationIncrementImprovementRevenuePrimaryof PersonalPer
BondsBondsBondsBondsGovernment Income *Capita
199710,025,000$$12,425,000$ 3,920,000$ 1,565,000$27,935,0002.76%980$
199811,430,000 11,585,000 4,740,000 1,400,000 29,155,000
2.67% 1,022
199910,915,000 10,420,000 5,920,000 1,230,000 28,485,000
2.49% 998
20008,760,000 9,140,000 6,120,000 1,050,000 25,070,000
2.00% 859
20018,105,000 7,690,000 6,150,000 860,000 22,805,000
1.79% 782
20027,425,000 6,150,000 5,370,000 660,000 19,605,000
1.53% 672
20036,720,000 4,505,000 5,705,000 450,000 17,380,000
1.31% 596
200411,025,000 22,445,000 5,710,000 230,000 39,410,000
2.83% 1,359
20055,340,000 19,305,000 4,720,000 29,365,000- **
1,044
20064,465,000 18,305,000 5,180,000 27,950,000- **
993
Source: Personal income - Bureau of Economic Analysis
** - personal income data not available for these years
130
CITY OF BROOKLYN CENTER, MINNESOTA
Table 11
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
Last ten fiscal years
(Unaudited)
Less: AmountsPercentage of
GeneralAvailable inNet GeneralEstimated
ObligationDebt ServiceObligationMarket ValuePer
BondsFundDebtof PropertyCapita
1997$ 7,900,000$ 82,056$ 7,817,9440.79%$ 274
1998 7,900,000 616,778 7,283,2220.71% 255
1999 7,575,000 725,868 6,849,1320.62% 240
2000 7,175,000 775,911 6,399,0890.54% 219
2001 6,760,000 831,588 5,928,4120.45% 203
2002 6,325,000 871,970 5,453,0300.37% 187
2003 5,875,000 907,709 4,967,2910.30% 170
2004 10,450,000 5,903,577 4,546,4230.25% 157
2005 5,045,000 1,054,230 3,990,7700.20% 142
2006 4,465,000 1,104,749 3,360,2510.17% 119
131
CITY OF BROOKLYN CENTER, MINNESOTA
Table 12
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
as of December 31, 2006
(Unaudited)
EstimatedEstimated Share
DebtPercentageof Overlapping
1
Governmental UnitOutstandingApplicable
Debt
Overlapping debt:
School Districts:
No. 11 Anoka$ 177,244,5217.40%$ 13,116,095
No. 279 Osseo 247,445,0005.05% 12,495,973
No. 281 Robbinsdale 242,080,0005.15% 12,467,120
No. 286 Earle Brown 30,520,000100.00% 30,520,000
Metropolitan Council 169,100,0000.67% 1,132,970
Hennepin County 512,170,0001.49% 7,631,333
Hennepin Regional RR Authority 45,865,0001.49% 683,389
Hennepin County Park Reserve District 69,975,0001.97% 1,378,508
Total overlapping debt$1,069,710,000 79,425,386
2
City of Brooklyn Center direct debt 3,360,251
Total direct and overlapping debt$82,785,637
Source: City Finance Department, Hennepin County, and Springsted Financial Advisors.
1
The percentage of overlapping debt applicable is estimated using tax capacity values. Applicable percentages were estimated by determining
the portion of each entity's tax capacity that is within the City's boundaries and dividing it by that entity's total tax capacity.
2
Includes only general obligation debt which is repaid through property taxes, net of amounts available.
132
CITY OF BROOKLYN CENTER, MINNESOTA
Table 13
LEGAL DEBT INFORMATION
Last ten fiscal years
(Unaudited)
Total net debt
applicable to the limit
Total net debtas a percentage of
Debt Limitapplicable to limitLegal debt margindebt limit
1997$ 20,001,394$ 7,817,944$ 12,183,45039.09%
1998 20,439,994 7,283,222 13,156,77235.63%
1999 21,911,836 6,849,132 15,062,70431.26%
2000 23,370,274 6,399,089 16,971,18527.38%
2001 25,381,400 5,928,412 19,452,98823.36%
2002 27,354,868 5,453,030 21,901,83819.93%
2003 29,594,688 4,967,291 24,627,39716.78%
2004 32,503,096 4,546,423 27,956,67313.99%
2005 36,003,536 3,990,770 32,012,76611.08%
2006 39,219,054 3,360,251 35,858,8038.57%
Legal Debt Margin Calculation for Fiscal Year 2006
Taxable Market Value$1,960,952,700
Debt limit (2% of Taxable Market Value)39,219,054
Debt applicable to limit
Net general obligation bonds 3,360,251
Legal debt margin$35,858,803
133
CITY OF BROOKLYN CENTER, MINNESOTA
PLEDGED-REVENUE COVERAGE
Last ten fiscal years
(Unaudited)
Storm Sewer Bonds
StormLess:Net
SewerOperatingAvailableDebt Service
ChargesExpensesRevenuePrincipalInterestCoverage
1997$ 856,920$ 258,296 598,624$ 155,000$ 82,595 2.52
1998 940,012 261,202 678,810 165,000 75,390 2.82
1999 999,867 232,405 767,462 170,000 67,558 3.23
2000 1,074,619 307,389 767,230 180,000 59,110 3.21
2001 1,129,502 327,412 802,090 190,000 49,950 3.34
2002 1,377,638 662,747 714,891 200,000 40,100 2.98
2003 1,264,512 809,130 455,382 210,000 29,540 1.90
2004 1,276,778 756,593 520,185 220,000 18,250 2.18
2005 1,293,841 1,086,600 207,241 230,000 6,210 0.88
2006 - - - - - -
134
Table 14
Special Assessment BondsTax Increment Bonds
SpecialTax
AssessmentDebt ServiceIncrementDebt Service
CollectionsPrincipalInterestCoverageCollectionsPrincipalInterestCoverage
$ 253,169$ 185,000$ 122,647 0.82$ 1 ,918,032$ 780,000$ 755,893 1.25
537,698 265,000 160,918 1.26 1 ,962,289 840,000 715,040 1.26
690,538 405,000 189,790 1.16 2 ,902,590 1,165,000 662,232 1.59
994,839 535,000 231,972 1.30 3 ,186,573 1,280,000 595,554 1.70
1,029,378 700,000 252,563 1.08 3 ,713,349 1,450,000 519,409 1.89
928,559 780,000 249,497 0.90 2 ,882,577 1,540,000 433,893 1.46
1,153,044 870,000 242,749 1.04 3 ,142,158 1,645,000 340,413 1.58
1,410,344 1,005,000 218,457 1.15 3 ,606,130 1,775,000 286,867 1.75
1,058,557 990,000 197,760 0.89 3 ,576,209 770,000 729,740 2.38
1,035,961 1,000,000 167,284 0.89 1 ,609,994 1,000,000 887,080 0.85
135
CITY OF BROOKLYN CENTER, MINNESOTA
Table 15
DEMOGRAPHIC AND ECONOMIC STATISTICS
Last ten fiscal years
(Unaudited)
School Enrollments
Per CapitaNo. 286
PersonalPersonalUnemploymentNo. 11No. 279No. 281Earle
PopulationIncomeIncomeRateAnokaOsseoRobbinsdaleBrown
$ 35,486$
1997 2 8,5151,011,883,2902.3% 4 0,402 2 1,992 1 4,010 1 ,746
1998 2 8,5351,090,978,655 38,2332.1% 4 0,923 2 2,028 1 3,966 1 ,788
1999 2 8,5351,143,625,730 40,0782.4% 4 0,964 2 2,171 1 3,800 1 ,734
2000 2 9,1721,256,583,900 43,0753.0% 4 1,314 2 2,017 1 3,706 1 ,682
2001 2 9,1801,270,876,540 43,5534.2% 4 1,419 2 2,041 1 3,754 1 ,724
2002 2 9,1851,281,425,795 43,9075.2% 4 1,383 2 1,824 1 3,656 1 ,732
2003 2 9,1741,322,865,856 45,3445.9% 4 1,254 2 1,698 1 3,765 1 ,732
2004 2 9,0051,393,545,225 48,0455.6% 4 1,592 2 1,620 1 6,196 1 ,691
****
2005 2 8,1374.8% 4 1,596 2 1,792 1 3,368 1 ,679
****
2006 2 8,1374.6% 4 1,310 2 2,071 1 3,194 1 ,705
Sources:Population - Metropolitan Council
Personal income - Bureau of Economic Analysis
Unemployment rate - Minnesota Department of Employment and Economic Development
School Enrollments - Minnesota Department of Education
** - personal income data not available for these years
136
CITY OF BROOKLYN CENTER, MINNESOTA
Table 16
PRINCIPAL EMPLOYERS
Current Year and Nine Years Ago
(Unaudited)
20061997
Percentage ofPercentage of
Total CityTotal City
EmployerEmployeesRankEmploymentEmployeesRankEmployment
Brookdale Center 112.64%1,850 111.36%1,700
Promeon, Division of Medtronics 26.83%1,000 32.00%300
Graco, Inc. 35.47%800 70.67%100
Independent School District #286 42.05%300
Target 51.71%250
Nations Care Link 61.59%233
Cub Foods 71.59%233
Best Buy 81.06%155
City of Brooklyn Center 91.03%150 22.05%307
TCR Corporation 100.94%137 51.17%175
Hoffman Engineering 41.77%265
Ault, Inc. 61.07%160
Cass Screw Machine Products 80.67%100
Precision, Inc. 90.67%100
Haiwatha Rubber Company 100.57%85
Totals 5,10834.91%3,29221.99%
Source: Minnesota Department of Employment and Economic Development
137
CITY OF BROOKLYN CENTER, MINNESOTA
Table 17
FULL TIME CITY GOVERNMENT POSITIONS BY FUNCTION
Last ten fiscal years
(Unaudited)
1997199819992000200120022003200420052006
General government
Administrative
5 .4 5 .4 6 .4 6 .4 6 .5 6 .5 6 .5 6 .0 6 .0 6 .0
Elections
1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0
Finance
7 .0 7 .0 7 .0 7 .0 7 .0 7 .0 6 .0 6 .0 6 .0 6 .0
Assessor
4 .0 4 .0 4 .0 4 .0 4 .0 3 .0 3 .0 3 .0 3 .0 3 .0
Government buildings
4 .0 4 .0 5 .0 5 .0 5 .0 5 .0 5 .0 5 .0 5 .0 5 .0
Information technology 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 2 .0 2 .0 2 .0 2 .0
Total general government 2 2.4 2 2.4 2 4.4 2 4.4 2 4.5 2 3.5 2 3.5 2 3.0 2 3.0 2 3.0
Public safety
Police
Officers
4 3.0 4 2.0 4 2.0 4 2.0 4 2.0 4 2.0 4 2.0 4 2.0 4 2.0 4 2.0
Civilians
1 6.0 1 7.0 1 7.0 1 7.0 1 6.0 1 6.0 1 5.0 1 5.0 1 5.0 1 5.0
Fire
1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .02.0
Building inspection
4 .0 4 .0 4 .0 5 .0 5 .0 4 .0 4 .0 4 .0 4 .0 4 .0
Total public safety
6 4.0 6 4.0 6 4.0 6 5.0 6 4.0 6 3.0 6 2.0 6 2.0 6 2.0 6 3.0
Public works
Engineering
9 .0 9 .0 1 0.0 1 0.0 1 0.0 1 0.0 8 .0 7 .0 7 .0 6 .0
Streets
1 0.9 1 0.9 1 0.9 1 0.9 1 0.9 1 1.0 1 1.0 1 0.0 9 .0 1 0.0
Total public works
1 9.9 1 9.9 2 0.9 2 0.9 2 0.9 2 1.0 1 9.0 1 7.0 1 6.0 1 6.0
Parks and recreation
Administration
5 .0 5 .0 6 .0 6 .0 6 .0 6 .0 5 .0 6 .0 6 .0 6 .0
Community center
5 .0 5 .0 5 .0 5 .5 5 .5 5 .0 5 .0 3 .0 3 .0 3 .0
Park maintenance
1 0.0 1 0.0 1 0.0 1 0.0 1 0.0 1 0.0 1 0.0 8 .0 8 .0 7 .0
16.0
Total park and recreation 2 0.0 2 0.0 2 1.0 2 1.5 2 1.5 2 1.0 2 0.0 1 7.0 1 7.0
Economic development
4 .6 4 .6 4 .6 4 .6 4 .5 4 .5 4 .5 4 .0 4 .0 4 .0
Municipal liquor
3 .0 3 .0 3 .0 4 .0 4 .0 3 .0 3 .0 3 .0 3 .0 3 .0
Golf course
1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0
Earle Brown Heritage Center 1 1.0 1 3.0 1 3.0 1 3.0 1 3.0 1 1.0 1 1.0 1 1.0 1 1.0 1 1.0
Water
4 .0 4 .0 5 .0 5 .0 5 .0 5 .0 5 .0 5 .0 5 .0 5 .3
Sanitary sewer
3 .0 3 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .3
Storm sewer
- - - - - - - - 1 .0 1 .4
Central garage
5 .0 5 .0
5 .1 5 .1 5 .1 5 .1 5 .1 5 .0 5 .0 5.0
Total
158.0
1 60.0164.0166.5165.5160.0156.01 50.0150.0151.0
Source: City Annual Budget documents
138
139
140