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HomeMy WebLinkAboutCAFR-1997 COMPREHENSIVE ANNUAL FINANCIAL REPORT of the CITY OF BROOKLYN CENTER, MINNESOTA 7 For The Year Ended December 31, 199 MICHAEL J. MCCAULEY, CITY MANAGER Prepared by THE DEPARTMENT OF FINANCE Charles Hansen, Director Tim Johnson, Asst. Director (Member of Government Finance Officers Association of the United States and Canada) 1 Citv of Brooklvn Center COMPREHENSIVE ANNUAL FINANCIAL REPORT Year Ended December 31. 1997 TABLE OF CONTENTS Exhibit Page Number Number Title Page I. INTRODUCTORY SECTION Table of Contents i- vi City Officials 1 Organization Chart 2 City Manager's Letter 3 Letter of Transmittal 4- 14 Certificate of Achievement 15 II. FINANCIAL SECTION Independent Auditors' Report 16 17 A. General Purpose Financial Statements (Combined Statements Overview): Combined Balance Sheet All Fund Types and Account Groups 1 19 20 Combined Statement of Revenues, Expenditures and Changes in Fund Balances All Governmental Fund Types 2 21 Combined Statement of Revenu es, Expenditures and Changes in Fund Balances Budget And Actual General and Special Revenue Funds 3 22 Combined Statement of Revenues, Expenses and Changes in Retained Earnings Proprietary Fund Types 4 23 Combined Statement of Cash Flows Proprietary Fund Types 5 24 Notes to Financial Statements 25 51 i Citv of Brooklvn Center COMPREHENSIVE ANNUAL FINANCIAL REPORT Year Ended December 31. 1997 TABLE OF CONTENTS StatemenU Schedule Page Number Number B. Combining, Individual Fund and Account Group Financial Statements and Schedules: General Fund: Comparative Balance Sheet A-1 53 Comparative Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual A-2 54 Schedule of Revenues Other Financing Sources Budget and Actual S-1 55 56 Schedule of Expenditures Other S-2 57 61 Financing Uses Budget and Actual Special Revenue Funds: Combining Balance Sheet B-1 63 64 Combinin Statement of Revenues 9 Expenditures and Changes in Fund Balances Budget and Actual B-2 65 66 Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Housing and Redevelopment Authority Fund B-3 67 Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Economic Development Authority Fund B-4 68 Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual E. Brown Tax Increment Financing District Fund B-5 69 Statem�nt of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Tax Increment District No. 3 Fund B-6 70 ii Citv of Brooklvn C:enter COMPRFHENSIVE ANNUAL FINANCIAL REPORT Year Ended December 31. 1997 TABLE OF CONTENTS Statement/ Schedule Page Number Number Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Pofice Drug Forfeiture Fund B-7 71 Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Community Development Block Grant Fund B-8 72 Statement of Revenue s, Expenditures and Changes in Fund Balance Budget and Actual City Initiatives Grant Fund B-9 73 Debt Service Funds: Combining Balance Sheet C-1 75 Combining Statement of Revenues, Expenditures and Changes in Fund Balances C-2 76 Capital Projects �unds: Combining Balance Sheet D-1 78 Combining Statement of Revenues, Expenditures and Changes in Fund Balances D-2 79 Project-Length Schedule of Construction Projects Capital Improvements Fund S-3 80 Project-Length Schedule of Construction Projects Municipal State Aid for Construction Fund S-4 81 Project-Length Schedule of Construction Projects Special Assessment Construction Fund S-5 82 Enterprise Funds: Combining Balance Sheet E-1 84 85 Combining Statement of Revenues, Expenses and Changes in Retained Earnings E-2 86 87 Combining Statement of Cash Flows E-3 88 89 iii Citv of Brooklvn Center COMPREHENSIVE ANNUAL FINANCIAL REPORT Year Ended December 31. 1997 TABLE OF CONTENTS Statement/ Schedule Page Number Number Comparative Statement of Revenues, Expenses and Changes in Retained Earnings Municipal Liquor Fund E-4 90 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings Golf Course Fund E-5 91 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings Earle Brown Heritage Center Fund E-6 92 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings Recycling and Refuse Fund E-7 93 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings Water Utility Fund E-8 94 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings Sanitary Sewer Fund E-9 95 Comparative Statement of Revenues, Expenses and Changes in Retained Earnings Storm Drainage Fund E-10 96 Internal Service Funds: Combining Balance Sheet F-1 98 Combining Statement of Revenues, Expenses and Changes in Retained Earnings F-2 99 Combining Statement of Cash Flows F-3 100 iv i Citv of Brookivn Center COMPREHENSIVE ANNUAL FINANCIAL REPORT Year Ended December 31. 1997 i TABLE OF CONTENTS Statement/ Schedule Page Number Number General Fixed Asset Account Group: Schedule of Changes in General Fixed Assets by Source S-6 102 Schedule of General Fixed Assets By Function and Activity S-7 103 t Schedule of Changes in General Fixed Assets By Function and Activity S-8 104 General Long-Term Debt Account Group: Comparative Statement of General Long-Term Debt G 106 Summary of Debt Service Requirements to Maturity H 107 III. STATISTICAL SECTION Table Page Number Number General Governmental Expenditures by Function 1 109 General Governmental Revenues and Other Financing Sources by Source 2 110 Tax Levies and Tax Collections 3 111 Assessed Value and Estimated Market Value of All Taxable Property 4 112 Direct and Overlapping Tax Rates and Tax Levies 5 113 Special Assessment Billings and Collections 6 114 Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita 7 115 Computation of Legal Debt Margin 8 116 Computation of Direct and Overlapping Debt 9 117 v Citv of Brookivn Center COMPREHENSIVE ANNUAL FINANCIAL REPORT Year Ended December 31. 1997 TABLE OF CONTENTS t Table Page Number Number Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Fund Expenditures 10 118 Schedule of Revenue Bond Coverage 11 119 Property Value, Construction and Bank Deposits 12 120 Principal Taxpayers 13 121 Schedule of Insurance Coverage 14 122-123 Demo r hic g ap Statistics 15 124 Miscellaneous Statistical Facts 16 125-126 r City of Brooklyn Center CITY OFFICIALS For the Year Ended December 31, 1997 ELECTED OFFICIALS Term of Office Term Expires Mayor Myrna Kragness Four Years 12/31 /1998 Councilmember Kathleen Carmody Four Years 12/31/1998 Councilmember Debra Hilstrom Four Years 12/31/1998 Councilmember Kay Lasman Four Years 12/31/2000 Councilmember Robert Peppe Four Years 12/31/2000 APPOINTED OFFICIALS City Manager Michael J. McCauley City Clerk Sharon Knutson City Treasurer Charles Hansen City Attorney Kennedy Graven City Prosecutor Carson Clelland Department Heads: Community Activities, Recreation Services James Glasoe Community Development Brad Hoffman Financial Services Charles Hansen Fire/Emergency Preparedness Ronald Boman Police Joel Downer Public Works Diane Spector Assessing Stephen Baker Asst. City Manager/H.R. Director Jane Chambers City Engineer Scott Brink Civil Defense Coordinator Ronald Boman Fire Marshall Ror�ald Boman Health Officer Duane Orn, M.D. Liquor Stores Gerald Olson 1 Public Works Superintendent Dave Peterson 1 City of Brooklyn Center Organization I ELECTORATE City Cauncil Advisory Commissions r- N I AdmSnistration Purchasing Human Resources City Atlomey City Manager Eledions Licenses City Clerk Communications Management Info Systems J I PUBLIC WORKS �FIRE DEPARTMENT POLICE DEPARTMENT FINANCIAL SERVICES COMMUNITY ACTIVITIES, COMMUNITY RECREATION, AND SERVICES i �DEVELOPMENT -Engineering I -Fire Prevention -Patrol -Accounting '-Street Maint I fire Supression -Investigation -Audit �-Communit Pro rams Y 9 -Assessing '-SanAary Sewer Emergency Preparedness -Crime Prevention -Utility Billing -Recreation Programs -Inspedions i•Cenlrei Garage I I -Community Programs -Risk Management �-Communiry Center ;-EDA/HRA -Stortn Sewer _J -Support Services -Liquw Stores -GoJt 61dgs -Zoning i _Water Dept Dispatch -Golf Course �-E.B. Heritage Center Park MaiM -Senior Transportation -Planning I I wr rr �r r r� r� as �s r t City o f Brook lyn Center A great place to start. A great pl¢ce to stay. June 10, 1998 HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL CITY OF BROOKLYN CENTER I hereby transmit the Comprehensive Annual Financial Report of the City of Brooklyn Center for tne fiscal year ended December 31, 1997. Minnesota Statutes and City Charter, Section 7.12, require that the financial statements of the City of Brooklyn Center be audited by the State Auditor or a certified public accountant selected by the City Council. This requirement has been complied with by the engagement of the firm of Deloitte and Touche LLP and their report is included in the financial section of this report. This report has been prepared following the guidelines recommended by the Government 1 Finance Officers Association of the United States and Canada. The Government Finance Officers Association awards Certificates of Achievement for Excellence in Financial Reporting to those governments whose Comprehensive Annual Financial Reports are judged to conform substantially with high standards of public financial reporting, including generally accepted accounting principles promulgated by the Governmental Accounting Standards Board. Our financial reports for the past fourteen years have received this award. It is my belief that the accompanying report meets program standards, and it will be submitted to the Government Finance Officers Association for review. Respec uliy s mitted, Michael J. auley r City Manag 6301 Shingle Creek Pkwy, Brooklyn Center, MN 55430-2199 City Hall TDD Number (612) 569-3300 Recreation and Community Center Phone TDD Number (612) 569-3400 FAX (612) 569-3494 1 An Affirm¢tiue Action/Equal Opportunities Employer City of Brooklyn Center A gredt pl¢ce to start. A great place to st¢y. June 10, 1998 Mr. Michael J. McCauley City Manager City of Brooklyn Center Dear Mr. McCauley: The com rehensive annual financial re ort of the it of Brookl n enter for the fi c p p C y y C s al year ended December 31, 1997, is hereby submitted. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data are accurate in all material respects and are reported in a manner designed to present fairly the financial position, results of operations, and cash flows of the various funds and account groups of the City. All disclosures necessary to enable the reader to gain an understanding of the government's financial activities have been included. The comprehensive annual financial report is presented in three sections: introductory, financial, and statistical. Included in the introductory section is this transmittal letter, the government's organizational chart and a list of principal officials. The financial section includes the general purpose financial statements and the combining and individual fund and account group financial statements and schedules, as well as the independent auditors' report on the financial statements and schedules. The statistical section includes selected financial and demographic information, generally presented on a multi year basis. The City is required to undergo an annual sin le audit in conformit with the rovisions of 9 Y p the Single Audit Act Amendments of 1996 and the U.S. Office of Management and Budget Circular A-133, "Audits of States, Local Governments, and Non-Profit Organizations." Information related to this single audit, including the schedule of expenditures of federal awards, findings and questioned costs, and independent auditors' reports on the internal control structure and compliance with applicable laws and regulations, is issued as a separate report. REPORTING ENTITY The financial reporting entity includes all funds and account groups of the primary government (i.e., the City of Brooklyn Center as legally defined), as well as all of its component units. Component units are legally separate entities for which the primary government is financially accountable. 6301 Shingle Creek Pkwy, Brooklyn Center, MN 55430-2199 City Hall TDD Number (612) 569-3300 Recreation and Community Center Phone TDD Number (612) 569-3400 FAX (612) 569-3494 1 An Affirmative Action/Equal Opportunities Employer Blended component units, although legally separate entities; are, in substance art of the ,p primary government's operations and are included as part of the primary government. Accordingly, the Economic Development Authority and the Housing and Redevelopment Authority are reported as special revenue funds of the City of Brooklyn Center. The City provides a full range of municipal services including public safety (police and fire), streets, sanitation, social services, culture-recreation, public improvements, planning and zoning, and general administrative services. The City also operates three off-sale liquor stores, a public water and sewer utility, a golf course, and a convention center known as the Earle Brown Heritage Center. ECONOMIC CONDITION AND OUTLOOK The City of Brooklyn Center is a narthern suburb of the Minneapolis/St. Paul metropolitan area, lying adjacent to the City of Minneapolis. The City is wholly within Hennepin County and encompasses an area of approximately 8.5 square miles. The Mississippi River forms the City's eastern boundary. 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 1990 Census count for the City is 28,887, a 7.5% decline from the 1980 Census. The 1997 population, as estimated by the Metropoiitan Council, is 28,515. In contrast to the decline in population (which is due almost entirely to fewer persons per household), the number of housing units has generally continued to increase from 10,493 in 1570 to 11,035 in 1980 and 11,704 in 1990. The numbers dropped slightly in 1997 to 11,238 housing units. This was due to the removal of some units by the City in accordance with a preplanned redevelopment effort. 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. o Commercial and industrial property comprises 54.5 /fl of the City s taxable net tax capacity. There are five major shopping centers located in the City in addition to a large number of retail establishments including K-Mart, Kohl's Department Store, Toys I� Us and Jerry's New Market. A new Rainbow supermarket, with a Walgreen drugstore and a Hollywaod Video store adjacent, opened in August 1997 on a site previously occupied by a Builder's Square. The largest commercial property in the City is Brookdale Mall, a 1,000,000 square-foot regional shopping center anchored by Daytons, Sears, J.C. Penny's and Mervyn's of California. The other four retail shopping centers in the City include Brookdale Square, a 125,000 square-foot strip center plus an 8-screen theater; Shingle Creek Center, a 157,00 square-foot building anchored by Target; Westbrook Mall, an 88,000 square-foot center anchored by Dayton's Home Store; and Brookview Plaza, a 70,000 s quare-foot center anchored b y Best Bu y. 5 New construction in 1997 includes the Rainbow grocery store for $3,500,000; Walgreen Drugstore for $700,000; Hollywood Video for $475,000; Brookdale Mitsubishi car dealership for $900,000; Sunlight Properties, an 80,000 square-foot warehouse for $2,200,000; and Amerclnn, an 80 unit hotel for $2,300,000. The former Days Inn hotel was remodeled into a Holiday Inn at a cost of $2,300,000 and Medtronic recently completed a$900,000 remodeling of their plant. The convergence of highways in Brooklyn Center make it an attractive sight for hotels and motels. Establishments now operating in the City or under construction include: Americlnn, Budgetel Inn, Comfort Inn, Country Inn Suites, Hilton Hotel, Holiday Inn, and Super 8 Motel. 1 MAJOR EVENTS OF 1997 Brooklyn Center is a mature, developed suburb which is working to revitalize itself. With its affordable housing, exceltent schools, beautiful parks, and convenient 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 1 of the commercial areas of the City; replacement and enhancement of its aged infrastructure, that is the streets, utilities, and parks; and the reinvigoration of neighborhoods. The City continued its redevelopment effort in the Brooklyn Boulevard and 69th Avenue area with the purchase of the Brooklyn Printing site. This site, along with other City owned land, will provide additional property for future cammercial development and roadway improvements. Rainbow Foods completed the redevelopment of the Builders Square site into a new grocery store (75,000 square-feet) and other leasable space. Tenants for the new site include Walgreens Drugstore and Hollywood Video. As part of the planned replacement of the City's infrastructure, the City is in process of completing several major street and utility improvements for the City. These improvements were funded by general obligation bonds sold during 1997, an operating transfer from the general fund, and funds from the capital projects funds and utility enterprise funds. In November 1997, the voters approved the issuance of $7,900,000 of general obligation bonds to be used towards the construction and remodeling of City police and fire facilities. The project is accounted for in the Capital Improvements Fund. During 1997, the City completed phase one of the 53rd Avenue Development and Linkage Project. The Project will create a new image and focus for the southeast neighborhood by creating new homes, green space, and a link to the Mississippi River. Phase one of the project required the removal of 28 housing units along 53rd which will create opportunities for a green way and a new low-traffic roadway. Phase two of the project, scheduled for 1998, includes new owner occupied housing developed on the land not needed for the 6 green way. The project is accounted for in the Economic Development Authority Fund. In 1997, Equitable Real Estate sold Brookdale Mall to Talisman Brookdafe, LLC. Talisman Brookdale, LLC announced a large scale remodeling and expansion plan for Brookdale Mall for 1998 and 1999. In support of the Brookdale Mall expansion, the City received a 2.0 million dollar grant from the State of Minnesota during the 1997 legislative session to assist with Single Creek Regional Pond project costs. The Shingle Creek Regional Pond is a system of storm sewer and detention ponds which will provide storm water treatment for 670 acres of residential and commercial land in Brooklyn Center and Minneapolis. This drainage area includes the Brookdale Mall and surrounding commercial area. The project is accounted for in the Storm Drainage Fund. During the 1998 legislative session, the City was awarded a 2.5 million dollar grant from the State of Minnesota for the expansion of the Earle Brown Heritage Center. The grant will provide funding for a new parking lot and additional meeting space for the convention center. FINANCIAL INFORMATION The 1997 Minnesota legislature passed levy limits on cities. The commissioner of revenue will determine a levy limit base for each city consisting of the 1997 property tax levy and state aids and adjust it using 1997 inflation and population increases. The new base, minus 1998 state aids, will be the limit for 1998 property taxes. Cities will be able to establish special levies in addition to the levy limit base for a limited number of specified purposes, including bonded indebtedness. The City is currently working on year 2000 computer issues as they relate to the City's computer systems. Most of the City's critical computer applications are provided by LOGIS, a consortium of approximately 20 government entities. LOGIS provides computerized data processing and support services to its members. LOGIS is responsible for all developmental costs and planning to address year 2000 issues, and they have assured the City that this project is nearly complete. Personal computers and applications that are supported in-house have been inventoried, and all equipment that has been found to be non-compliant is scheduled for replacement in 1998. All systems maintenance contracts have been reviewed and are either in compliance now, or will be when they are renewed in the next year. The City does not foresee any additional expense with regards to this issue, and time has been scheduled in the M.I.S. Department's project calendar to address any remaining items. Management of the City is responsible for establishing and maintaining internal controls designed to ensure that the assets of the City are protected from loss, theft or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. Internal controls are designed to provide reasonable, but not absolute, assurance that these 7 objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs 1 and benefits requires estimates and judgments by management. In addition, the City maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual budget appropriation approved by the City's governing body. Activities of the general fund and special revenue funds are included in the annual appropriated budget. Project-length financial plans are adopted for the capital projects funds. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is established by department for the General Fund and at the aggregate fund level for all other governmental funds that adopt annual budgets. Appropriations lapse at year-end and generafly are not reappropriated in the following year's budget. As demonstrated by the statements and schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management. GENERALFUND The following schedule presents a summary of general fund budgeted revenues for 1998, and actual revenues for the fiscal year ended December 31, 1997, compared to 1996. General Fund Revenues and Other Financina Sources 1997 I ncrease 1998 1997 1996 (Decrease) Budget Actual Actual from 1996 Taxes $7,587,573 $6,789,756 $6,326,012 $463,744 Reserve for tax abatements (461,866) (205,135) (256,731) Licenses permits 364,585 485,232 402,000 83,232 Intergovernmental revenue 3,848,814 3,811,900 3,618,075 193,825 Charges for services 882,594 757,640 839,583 (81,943) Court fines 192,000 183,270 186,761 (3,491) Miscellaneous revenues 312,000 458,831 328,750 130,081 Other financing sources 100,000 100,000 0 Total $13,187,566 $12,124,763 $11,596,046 $528,717 Revenues and other financing sources for the General Fund totaled $12,124,763 in 1997, an increase of $528,717 from the previous year. From the table above, it is apparent that the major sources of revenue available for funding of general governmental functions are 8 taxes and intergovernmental revenue, which when combined, provide 84% of the total revenues. The principal sources of intergovernmental aid to the City are homestead and agricultural credit aid of $1,308,130 and local government aid of $1,922,164. Taxes increased $463,744 primarily due to the 1997 property tax levy increase and higher lodging tax collections. Licenses and permits revenue increased due to higher building related permits and liquor licenses. Intergovernmental revenue improved over 1996 due to increases in state aids. Miscellaneous revenues increased $130,081 when comparing 1997 to 1996 primarily due to higher investment earnings and a dividend related to workers compensation insurance premiums paid in prior years. In 1997, voters approved a bond referendum for police and fire buildings. The property tax levy necessary to service the bond debt for 1998 is $783,146. This new levy accounts for the majority of the increase for the 1998 budget compared to the 1997 actual for tax revenues. The 1998 budget does not include an operating transfer in from the Municipal Liquor Fund. The transfer from the Municipal Liquor Fund will be made to the Capital Improvements Fund for 1998. This change was made at the Council's direction so that revenues for liquor operations would be used for a specific purpose capital improvements. In response to potential property tax abatements, the City has established a tax abatement reserve of $1,174,810 in the General Fund. Since the early 1990's, City management has estimated the potential future abatements on large commercial properties. The City increased the reserve in the General Fund by $461,866 and $205,135 in 1997 and 1996, respectively. The majority of the reserve represents one large commercial property Brookdale Mall. The potential tax abatement to Brookdale Mall is currently under litigation and is expected to be settled in 1998. City management believes the reserve is sufficient to cover the potential tax abatement and accrued interest. City management estimates that other potential tax abatements not covered by the reserve would not materially affect the finances of the City. The following schedule presents a summary of general fund budgeted expenditures for 1998, and actual expenditures for the fiscal year ended December 31, 1997, compared to 1996. General Fund Ex�enditures and Other Financina Uses 1997 Increase 1998 1997 1996 (Decrease) Budget Actual Actual from 1996 General Government $2,214,395 $1,992,251 $1,968,780 $23,471 Public Safety 5,291,443 5,089,072 5,022,324 66,748 Public Works 2,016,166 1,868,130 1,649,526 218,604 Community Service 80,104 79,800 78,442 1,358 9 1997 Increase 1998 1997 1996 (Decrease) Budget Actual Actual from 1996 Parks and Recreation 2,165,277 2,186,686 2,282,054 (95,638) Economic Development 218,500 248,779 201,600 47,179 Non-departmental 538,794 311,436 317,148 (5,712) Admin. Services Reimb., (715,538) (661,058) (611,534) (49,524) Other Financing Uses 1,378,425 624,637 0 624,637 Total $13,187,566 $11,739,733 $10,908,340 $831,393 Total expenditures and other financing uses in 1997 increased by a total of $831, 393 over 1996. A large part of the increase was due to the transfers out for debt service and capital improvements. The 1997 budget had all General Fund and Debt Service Fund real estate tax revenues recorded in the General Fund with a corresponding transfer out to the Debt Service Funds for payment of the current year's debt service requirements. Management believes this allows for a clearer picture of the total city real estate tax levy. The total amount needed for debt service was $251,315 and $139,023 for 1997 and 1996, respectively, an increase of $112,292. The General Fund also transferred $394,197 to the Special Assessment Construction Fund for infrastructure replacement. This transfer allows the City to pay cash for street improvements instead of borrowing through a bond issue for the property tax portion of the projects. The City anticipates this transfer to continue in the future as part of the planned replacement of the City's aged infrastructure. During 1997, the public work's personal services reimbursement was lower compared to 1996 for work done associated with capital improvements. This resulted in an increase to the General Fund for personal services since the majority of capital improvement related costs are charged to capital project funds. This reimbursement is highly correlated with the level and type of construction activity for the year and may vary from year-to-year. Park and recreation expenditures were lower due to the elimination of various recreation programs and cost reduction efforts. The primary reason for the increase of the 1998 budget compared to the 1997 actual is the new debt service requirement related to the police and fire bond issue. This accounts for $783,146 of the increase when comparing 1998 to 1997. GENERAL FUND BALANCE As of December 31, 1997, the fund balance of the General Fund totaled $6,601,780. This ending fund balance is the equivalent of approximately six months of expenditures for the 1998 budget. Property taxes and inter-governmental revenue represent 84% of the 10 budgeted general fund revenue for 1997. The State of Minnesota has structured city finances so most of these revenues are received in the second half of the fiscal year. Minnesota cities typically receive as little as 10% of their total revenues in the first six months of the year. In recognition of this fact, a portion of the fund balance is being designated for working capital. ENTERPRISE OPERATIONS The Cit 's e y nterprise operations are comprised of seven separate and distinctive activities: Liquor stores, Golf Course, Earle Brown Heritage Center, Recycling, Water utility, Sanitary Sewer utility, and Storm Drainage utility. The liquor operation is composed of three retail stores. Two stores are owned and one is leased. Centerbrook Golf Course is a nine hole, par three golf course owned and operated by the City. Green fees have been increasing each year to keep pace with inflation. The Earle Brown Heritage Center is a pioneer farmstead which has been historically preserved and restored as a modern multipurpose facility. Its convention center can host conferences, trade shows, and concerts seating 1,000 people in either banquet or theater style. The Inn on the Farm is a bed and breakfast with ten rooms available. Earle's, a unique special occasion restaurant, is also located at the Inn on the Farm. Several of the barns have been restored as unique office settings which have found a niche in the market. The City's policy for this enterprise is to set fees and user charges at a level which allows the operations to break-even excluding depreciation on contributed assets. The dwindling supply of landfill space for the disposal of garbage has become a major concern in Minnesota. State and county mandated goals for the diversion of garbage to recycling programs took effect in 1989. In response, the City opened a Recycling and Refuse Fund as an enterprise fund. So far it is operating a recycling program. Expansion into garbage collection will take place when there is clear advantage to be achieved by it. Goals for the recycling program are being met. The Water and Sanitary Sewer utilities are largely developed and already reach all parts of the City. Rates for both water and sanitary sewer are reviewed annually and are increased as needed to cover inflation and the need for new capital outlays. Three-fourths of the sewer operating expenses are fees paid to the Metropolitan Council Environmental Services for sewage treatment. Planned rate increases should be sufficient to keep them both profitable. During the 1980s, the State of Minnesota passed legislation that requires cities to take greater responsibility for controlling storm water runoff. In response to this, the City created a Storm Drainage Utility Fund. Its fee structure is based upon the amount of water 11 discharged into the storm sewer s stem. Y INTERNAL SERVICE FUNDS The Central Garage Fund was established to own and maintain all operating equipment of the City. At present, the fund maintains some 155 pieces of rolling and non-rolling stock equipment with a net book value of $2,492,033. Equipment maintenance, repair, fuel, and replacement costs are provided from rental rates which the Central Garage Fund charges City operating departments for the use of the equipment. The Public Employees Retirement Fund was established to provide certain health care benefits for qualifying City employees who retire before age 65. The fund had cash and investments of $1,182,216 at the 1997 year-end. DEBT ADMINISTRATION At December 31, 1997, the City had eleven debt issues outstanding. These issues include $10,025,000 of general obligation bonds, $3,920,000 of special assessment debt with government commitment, $1,565,00 of general obligation revenue bonds and $12,425,000 of general obligation tax increment bonds. The City maintained its A-1 rating from Moody's Investors Service. The City issued $1,075,000 of special assessment bonds and $7,900,000 of general t obligation bonds during 1997. The special assessment bond issue provided financing for various improvement projects in the City. The general obligation bond issue will be used towards the construction and remodeling of City police and fire facilities. CASH MANAGEMENT The Finance Department keeps abreast of current trends and procedures for cash management and forecasting so as to ensure efficient and profitable use of the City's cash resources. Cash is invested only in investments authorized by Minnesota Statutes Chapter 118A. The yield on investments ranged from a high of 7.7 percent to a low of 4.8 percent. Interest earned during 1997 amounted to $1,912,748 compared to $2,161,057 during 1996. The City adopted a written investment policy in 1990 and adopted an updated policy in 1997. The policy's objectives are to minimize credit and market risk, provide needed liquidity, and maintain a competitive yield on the portfolio. All deposits were either insured by federal depository insurance or collateralized. Investment securities are held in a custody arrangement with a bank trust department. All investments are listed in the lowest custodial credit risk category, Category 1. Cash and investment balances from all funds are combined and invested to the extent available in 12 authorized investments. Earnings from securities are allocated to the various funds in proportion to their relative cash book balances. In the recent past, the City has not needed to use any short-term debt and does not anticipate such a need in the future. The City has not purchased any collateralized mortgage obligations, derivatives, or interest only strip investments. Our practice is to hold investments to maturity. The only reason to sell prior to maturity is an unforeseen cash flow need. In the past five years, there has been only one occasion where an investment was sold prior to maturity. Of the City's portfolio as of December 31, 1997, 64°lo matures within 1 year, another 16% in the second year, 9% in the third year, 5% in the fourth year, and the last 6% in the fifth through the tenth years. The City has chosen to adopt the provisions of GASB Statement No. 31, Accounting and Financia/ Reporting for Certain /nvestments and for External Investment Poo/s in 1998 as required by the statement. If GASB Statement No. 31 had been adopted for 1997, the City would have recorded an unrealized gain on investments held at December 31, 1997 of $88, 974. GASB Statement No. 32, Accounting and Financia/ Reporting for Interna/ Revenue Code 457 Deferred Compensation P/ans, establishes reporting requirements for IRC Section 457 plans. IRC Section 457 was revised in 1996 to require that qualifying plans hold the assets and income "...in trust for the exclusive benefit of participants and their beneficiaries..." Consequently, the City has no legal access to these assets. Therefore, in accordance with the requirements for GASB Statement No. 32, the City has restated total assets and liabilities of our Agency Fund by removing $3,593,460 of Section 457 Deferred Compensation assets and related liabilities originally reported at December 31, r 1996. Adopting the change also eliminated the City's need for a trust and agency fund. RISK MANAGEMENT The City insures all significant risk. A schedule of such insurance is included in the Statistical Section. INDEPENDENT AUDIT The City Charter and State Statutes require the Council to provide for an audit of the financial transactions of the City. Deloitte Touche LLP has been retained for that purpose and their unqualified opinion has been included in this report. CERTIFICATE OF ACHIEVEMENT The Government Finance Officers Association of the United States and Canada (GFOA) 13 awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Brooklyn Center for its comprehensive annual financial report for the fiscal year ended December 31, 1996. In order to be awarded a Certificate of Achievement for Excellence in Financial Reporting, a governmental unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to Certificate of Achievement Program requirements, and we are submitting it to GFOA to determine its eligibility for another certificate. ACKNOWLEDGMENTS We want to express our appreciation to the Finance Department staff for the assistance provided during the audit. We also wish to express our appreciation to the City Manager and the Mayor and members of the City Council for their continued interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner. Respectfully submitted, �'l a.�n.a..e.� Charles Hansen Director of Finance �,(.t� r Tim Johnson Assistant Director of Finance 14 rtlf� t f �e ca o 1 Achlev���nt 1 f r Ex�e__en� e 1 In Flna�cla_ i �e��rt�r� 1 Presented to Cit of �r�ok_yn Center, 1 Minnesota For its Comprehensive Annual Financial Report 1 for the Fiscal Year Ended December 31 1996 1 a Certificate of Achievement for E�cellence in Financial Reporting is preser.ted by the Government F�nance Officers Association of tne United States and Canada to government units and public employee retirement systems whose comprehensive annual financial repor±s (CAFRs) achieve the highest standards in government accounting and financial reporting. e���+ �c��' Of THE ��'9�r�'r� J FUNITE�J STATES y 4,� l 1 s, ANO c Z�, �"a°a P resident G0 3 LT, ��a S �'y, 4� �HICAG� ..s�' 1 y J Executive Director 1 1 De oitte Touche «P 400 One Financial Plaza Telephone: (612) 397-4000 120 South Sixth Street Facsimile: (612) 397-4450 Minneapolis, Minnesota 55402-1844 INDEPENDENT AUDITORS' REPORT The Honorable Mayor and Members of the City Council of the City of Brooklyn Center, Minnesota We have audited the accompanying general purpose financial statements of the City of Brooklyn Center, Minnesota (the City) as of December 31, 1997 and for the year then ended, listed in Section IIA of the foregoing table of contents. These general purpose financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, such general purpose financial statements present fairly, in all material respects, the financial position of the City of Brooklyn Center, Minnesota at December 3l, 1997 and the results of its operations and cash flows of its propnetary fund types for the year then ended in conformity with generally accepted accounting principles. As discussed in Note 1L, the City adopted Government Accounting Standards Board Statement No. 32, Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The accompanying combining and individual fund and account group financial statements and schedules listed in the foregoing table of contents, which are also the responsibility of the City's management, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the City. Such financial statements and schedules have been subjected to the auditing procedures applied in our audit of the general purpose financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the general purpose financial statements taken as a whole. DeloitteTouche Tohmatsu In accordance with Government Auditing Standards, we have also issued our report dated May l, 1998 on our consideration of the City of Brooklyn Center's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grants. May 1, 1998 2 City of Brooklyn Center, Minnesota GENERAI,,. PURPnSE FINANCIAL STATEMENTS. The general purpose financial statements are intended to provide a financial overview of municipal operations. These reports are at a summary level and include that data needed to control and analyze current operations to determine compliance with legal and budgetary limitations and to assist in the financial planning process. 18 City of Brooklyn Center All Fund Types and Account Groups COMBINED BALANCE SHEET December 31, 1997 Governmental Fund Types Special Debt Capital General Revenue Service Projects ASSETS AND OTHER DEBITS Assets: Cash and cash equivalents (Note 2) $2,576,390 $1,150,410 $1,162,128 $4,905,606 Investments (Note 2) 5,729,955 2,566,040 1,025,004 10,942,150 Receivables: Accounts 51,154 5,750 16,426 Delinquent taxes (Note 1J) 179,799 8,765 Special assessments 6,290 1,513,799 715,578 Due from other funds (Note 9) 337,154 136,017 50,806 576,600 Due from other governments 91,192 41,124 135,564 Inventories and supplies (Note 1G) Prepaid expenses Advances to other funds (Note 9) 105,074 1,827,453 Fixed assets (net of accum depr. where applicable) (Note 3) Other debits: Amount available in Debt Service Funds Amount to be provided for General Long-Term Debt Total Assets and Other Debits $9,077,008 $3,908,106 $3,751,737 $19,119,377 LIABILITIES. EQUITY AND OTHER CREDITS Liabilities: Accounts payable $290,040 $14,808 $389 $92,964 Contracts payable 300,021 Due to other funds (Note 9) 715,577 Accrued salaries and wages 222,479 4,157 2,577 Accrued vacation sick pay (Note 1H) 601,810 22,757 Accrued health insurance Accrued interest payable Advances from other funds (Note 9) 698,143 Deferred revenue (Note 1J) 1,360,899 8,765 1,513,799 819,728 General obligation bonds payable (Note 6) Special assessment bonds with governmental commitment (Note 6) Revenue bonds payable (Note 6) Total Liabilities 2,475,228 �48,630 1,514,188 1,930,867 Equity and Other Credits: Contributed capital (Note 4) Investment in general fixed assets Retained earnings: (Note 8 10) Reserved Unreserved Fund Balances: (Note 8 10) Reserved 105,074 2,945,726 2,237,549 9,392,353 Unreserved: Designated 5,516,204 Undesignated 980,502 213,750 7,796,157 Total Equity and Other Credits 6,601,780 3,159,476 2,237,549 17,188,510 Total Liabilities, Equity and Other Credits $9,077,008 $3,908,106 $3,751,737 $19,119,377 See notes to financial statements 1 9 EXHIBIT 1 Totals Proprietary Fund Types Account Groups (Memorandum Only) General General Internal Fixed Long-Term December 31, Enterprise 5ervice Assets Debt 1997 1996 $1,814,641 $1,582,591 $13,191,766 $8,634,385 3,222,585 3,530,032 27,015,766 24,845,577 1,159,340 4,160 1,236,830 1,5'f3,020 188,564 208,862 330,747 2,566,414 2,125,826 1,100,577 2,665,700 87 455,051 436,662 340,381 6,090 346,471 392,219 142,039 142,039 159,568 1,932,527 1,959,413 36,326,136 2,492,033 $14,495,672 53,313,841 50,846,863 $2,237,549 2,237,549 2,260,484 24,132,451 24,132,451 16,269,516 $43,523,040 $7,614,906 $14,495,672 $26,370,000 $127,859,846 $112,318,095 $321,797 $11,678 $731,676 $864,354 151,056 451,077 864,622 385,000 1,100,577 2,484,939 56,312 6,404 291,929 263,174 66,965 26,502 718,034 702,342 1,218,229 1,218,229 1,047,920 32,994 32,994 35,835 1,234,384 1,932,527 1,959,413 3, 703,191 2,850,683 $22,450,000 22,450,000 15,500,000 3,920,000 3,920,000 3,030,000 1,565,000 1,565,000 1,720,000 3,813,508 1,262,813 26,370,000 38,115,234 31,323,282 20,850,160 3,467,673 24,317,833 24,687,240 $14,495,672 14,495,672 14,538,095 571,137 571,137 567,521 18,288,235 2,884,420 21,172,655 19,296,663 14,680,702 7,137,287 5,516,204 5,665,070 8,990,409 9,102,937 39,709,532 6,352,093 14,495,672 89,744,612 80,994,813 $43,523,040 $7,614,906 $14,495,672 $26,370,000 $127,859,846 $112,318,095 Z� City of Brooklyn Center EXHIBIT All Governmental Fund Types COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES For the Year Ended December 31, 1997 Totals Special Debt Capital (Memorandum Only) Revenues General Revenue Service P�ojects 1997 1996 Taxes and special assessments $6,327,890 $2,213,886 $253,169 $765,532 $9,560,477 $9,706,378 Licenses and permits 485,232 485,232 402,000 Intergovernmental 3,811,900 530,922 308,988 470,605 5,122,415 5,969,419� Charges for services 757,640 757,640 839,583 Court fines 183,270 183,270 186,761 Investmentearnings 354,597 255,551 72,220 571,795 1,254,163 1,380,779 Miscellaneous 104,234 34,734 4,927 143,895 46,600� Total Revenues 12,024,763 3,035,093 634,377 1,812,859 17,507,092 18,531,520 Exoenditures Current: General government 1,992,251 255 1,992,506 1,968,780 Public safety 5,089,072 18,777 5,107,849 5,022,32h Public works 1,868,130 1,868,130 1,649,526 Community services 79,800 79,800 78,442 Parks and recreation 2,186,686 26,104 2,212,790 2,282,054 Economic development 248,779 1,102,240 1,351,019 700,522� Non-departmental 311,436 311,436 317,148 Administrative Services Reimbursement (661,058 (661,058) (611,534) Capital outlay 2,126,026 2,707,295 4,833,321 5,814,123 Debt service: Principal retirement 1,135,000 1,135,000 5,125,000. Interest and fiscal charges 1,019,188 50,090 1,069,278 1,285,416 Total Expenditures 11,115,096 3,273,402 2,154,188 2,757,385 19,300,071 23,631,801.� Excess or Deficiency(-) of Revenues Over Expenditures 909,667 (238,309) (1,519,811) (944,526) (1,792,979) (5,100,281) Other Financina Sources or Uses(-1 Proceeds from sale of bonds 63,818 8,911,182 8,975,000 1,430,486� Operating transfers in 100,000 577,895 1,730,440 567,950 2,976,285 5,653,524 Operating transfers out (624,63� (2,077,895) (173,753) (2,876,285) (5,553,524;� Total Other Financing Sources or Uses(-) (524,63� (1,500,000) 1,794,258 9,305,379 9,075,000 1,530,486 Excess or Deficiency(-) of Revenues and Other Sources Over Expenditures and Other Uses 385,030 (1,738,309) 274,447 8,360,853 7,282,021 (3,569,795 Fund Balances January 1 6,522,498 4,892,037 2,260,484 8,230,275 21,905,294 25,475,089 Equity Transfers In (Out) (3Q5,748) 5,748 (297,382) 597,382 Fund Balances December 31 $6,601,780 $3,159,476 $2,237,549 $17,188,510 $29,187,315 $21,905,294 (See notes to financial statements) 21 EXHIBIT 3 City of Brooklyn Center General and Special Revenue Funds COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL For the Year Ended December 31, 1997 General Fund Special Revenue Funds Actual Over Actual Over Under(-) Under(-) Budget Actual Budget Budget Actual Budget Revenues Taxes and special assessments $6,764,878 $6,327,890 ($436,988) $1,989,326 $2,213,886 $224,560 Licenses and permits 300,160 485,232 185,072 Intergovernmental 3,762,484 3,811,900 49,416 493,108 530,922 37,814 Charges for services 905,944 757,640 (148,304) Court fines 192,000 183,270 (8,730) Investment earnings 270,000 354,597 84,597 105,000 255,551 150,551 Miscellaneous 62,600 104,234 41,634 30,322 34,734 4,412 Total Revenues 12,258,066 12,024,763 (233,303) 2,617,756 3,035,093 417,337 Exoenditures General government 2,116,120 1,992,251 (123,869) 10,000 255 (9,745) Public safety 5,297,175 5,089,072 (208,103) 106,847 29,461 (77,386) Publicworks 1,991,769 1,868,130 (123,639) Community services 80,000 79,800 (200) Parks and recreation 2,362,742 2,186,686 (176,056) 112,308 26,104 (86,204) Economic development 249,570 248,779 (791) 3,326,989 3,217,582 (109,407) Non-departmental 377,200 311,436 (65,764) Admin. Services Reimbursement (699,141) (661,058) 38,083 Total Expenditures 11,775,435 11,115,096 (660,339) 3,556,144 3,273,402 (282,742) Excess or Deficiency(-) of Revenues Over Expenditures 482,631 909,667 427,036 (938,388) (238,309) 700,079 Other Financina Sources or Usesf-1 Operating transfers in 100,000 100,000 398,454 577,895 179,441 Operating transfers out (624,637) (624,637) (1,898,454) (2,077,895) (179,441) Total Other Financing Sources or Uses(-) (524,637) (524,637) 0 (1,500,000) (1,500,000) 0 Excess or Deficiency(-) of Revenues and Other Sources Over Expenditures and Other Uses (42,006) 385,030 427,036 (2,438,388) (1,738,309) 700,079 Fund Balances January 1 6,522,498 6,522,498 4,892,037 4,892,037 Equity Transfer In (Out) (305,748) 5,748 5,748 Fund Balances December 31 $6,480,492 $6,601,780 $427,036 $2,453,649 $3,159,476 $705,827 (See notes to financial statements) 22 City of Brooklyn Center EXHIBIT 4 Proprietary Fund Types COMBINED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN RETAINED EARNINGS For the Year Ended December 31, 1997 Internal Totals Enterprise Service (Memorandum Only) Ooeratina Revenues Funds Funds 1997 1996 Sales and user fees $10,327,518 $1,182,530 $11,510,048 $11,704,274 Cost of sales 2,698,882 2,698,882 2,565,231 Net Operating Revenues 7,628,636 1,182,530 8,811,166 9,139,043 Oderatinq Expenses Personal services 2,438,518 425,558 2,864,076 2,697,802 Supplies 281,867 222,057 503,924 527,246 Other services 2,737,667 67,197 2,804,864 2,774,730 Insurance 60,252 28,084 88,336 102,680 Utilities 313,733 313,733 331,150 Rent 81,415 81,415 92,774 Depreciation 902,717 442,416 1,345,133 1,210,877 Total Operating Expenses 6,816,169 1,185,312 8,001,481 7,737,259 r Operating Income (Loss) 812,467 (2,782) 809,685 1,401,784 Nononeratino Revenues or Exnenses Investment earnings 368,582 290,003 658,585 777,001 Special assessments 48,822 48,822 (6,248) Other revenue 117,166 117,166 15,197 Interest and fiscal agent fees (180,841) (180,841) (190,342) Total Net Nonoperating 353,729 290,003 643,732 595,608 Income Before Operating Transfers 1,166,196 287,221 1,453,417 1,997,392 Operating Transfers Out (100,000) (100,000) (100,000) Net Income 1,066,196 287,221 1,353,417 1,897,392 Depreciation on contributed assets that reduces contributed capital 348,738 177,453 526,191 523,052 Retained Earnings January 1 17,444,438 2,419,746 19,864,184 17,443,740 Retained Earnings December 31 $18,859,372 $2,884,420 $21,743,792 $19,864,184 (See notes to financial statements) 23 City of Brooklyn Center EXHIBIT 5 Proprietary Fund Types COMBINED STATEMENT OF CASH FLOWS For the Year Ended December 31, 1997 Internal Totals Enterprise Service (Memorandum Only) Cash flows from ooeratina activities: Funds Funds 1997 1996 Operating income (loss) $812,467 ($2,782) $809,685 $1,401,784 Adjustments to reconcile operating income (loss) to net cash provided by operating actvities: Depreciation 902,717 442,416 1,345,133 1,210,877 Changes in assets and liabilities: Receivables 199,927 1,443 201,370 43,079 Inventories 38,678 7,070 45,748 (25,585) Prepaid expenses 17,529 17,529 (16,357) Payables 27,409 84,886 57,477 (791,446) Accrued expenses 7,988 301 8,289 30,110 Accrued interest payable (2,841) (2,841) (1,925) Accrued health insurance liability 170,309 170,309 60,839 Other nonoperating income 165,988 165,988 8,949 Net cash provided by operating activities 2,169,862 533,871 2,703,733 1,920,325 Cash flows from noncapital financino activities: Proceeds from borrowings on advance from other funds Proceeds from borrowings on due to other funds 0 177,005 Principal payments on advance from other funds (203,891) (203,891) (36,402) Principal payments on due from other funds (200,000) (200,000) (10,755) Interest paid on advance from other funds (64,436) (64,436) (67,673) Interest paid on due to other funds (27,148) (27,148) (35,979) Operating transfers out (100,000) (100,000) (100,000) Net cash used for noncapital financing activities (595,475) (595,475) (73,804) Cash flows from ca�ital and related financina activities: Capital contributions 156,784 156,784 354,085 Acquisition and construction of capital assets (3,351,103) (503,431) (3,854,534) (5,315,303) Principal paid on revenue bonds (155,000) (155,000) (110,000) Interest paid on revenue bonds (89,257) (89,257) (86,690) Net cash used for capital and related financing activities (3,438,576) (503,431) (3,942,007) (5,157,908) Cash flows from investinq activities: Investments purchased (2,364,424) (1,790,000) (4,154,424) (1,926,573) Investments sold or matured 3,905,211 1,877,654 5,782,865 5,933,523 Interest on investments 368,582 290,003 658,585 777,001 Net cash provided by investing activities 1,909,369 377,657 2,287,026 4,783,951 Net increase in cash and cash equivalents 45,180 408,097 453,277 1,472,564 Cash and cash equivalents at beginning of year 1,769,461 1,174,494 2,943,955 1,471,391 Cash and cash equivalents at end of year $1,814,641 $1,582,591 $3,397,232 $2,943,955 (See notes to financial statements) 24 City of Brooklyn Center NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1997 Note 1: Summarv of Sianificant Accountina Policies The City of Brooklyn Center, Minnesota (City) was formed and operated pursuant to applicable Minnesota laws and statutes. The governing body consists of a five- member City Council elected at large to serve four-year staggered terms. A. Re�ortina Entit� The City includes all funds, organizations, institutions, agencies, departments and offices that are not legally separate from such. Component units are legally separate organizations for which the elected officials of the City are financially accountable and are included within the general purpose financial statements of the City because of the significance of their operational or financial relationships with the City. BLENDED COMPONENT UNITS: Blended component units, although legally separate entities, are, in substance, part of the government's operations and so data from these units are combined with data of the primary government. Economic Develo ment Authorit EDA and Housin and Redevelo ment Authorit p Y( 9 p Y (HRA) in and for the City of Brooklyn Center: The governing boards are the City Council. The Council reviews and approves EDA and HRA tax levies, and the City provides major community development financing for EDA and HRA activities. Debts issued for EDA and HRA activities are City general obligations. A{though the EDA and HRA are legafly separate from the City, they are reported as if they were part of the City because the governing boards are the same. Complete financial statements for the EDA and HRA may be obtained at the City offices located at 6301 Shingle Creek Parkway, Brooklyn Center, Minnesota 55430. JOINT VENTURES AND JOINTLY GOVERNED ORGANIZATIONS: The City has several agreements with governmentat and other entities which provide reduced costs, better service, and additional benefits to the participants. These programs, which the City participates in, are listed below and amounts recorded within the current year financial statements are disclosed. 25 Note 1: Summarv of Sianificant Accountina Policies (cont'dl Local Government Information Systems Association (LOGiS): This consortium of approximately 20 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 the Board, and the Consortium is fiscally independent of the City. The total amount recorded within the 1997 financial statements of the City was $299,050 for services provided which is allocated to the various funds based on applications. Comptete financial statements may be obtained at the LOGIS offices located at 2700 Freeway Boulevard, Suite 300, Brooklyn Center, Minnesota 55430. LOGIS Insurance Group: This group provides cooperative purchasing of health and life insurance benefits for approximately 45 government entities. The total 1997 employee insurance benefits expense, including health and life insurance, recorded within the financial statements was $561,972. Complete financial statements may be obtained from DCA, Inc. located at 400 DCA Center, 13100 Wayzata Boulevard, Minnetonka, MN 55305-1840. OTHER: The Brooklyn Center Fire Department Relief Association (Association): The Association is organized as a nonprofit organization, legally separate from the City, by its members to provide pension and other benefits to such members in accordance with Minnesota Statutes. Its board of directors is appointed by the membership of the Association and not by the City Council and the Association issues their 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 and 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 statements of the Association have not been included within the City's reporting entity. (See Note 15 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. 26 Note 1: Summarv of Sianificant Accountina Policies (cont'dl B. Fund Accountinq The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the financial statements in this report, into six generic fund types and two broad fund categories as follows: GOVERNMENTAL FUNDS: General Fund The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds Special Revenue Funds are used to account for the proceeds of certain specific revenue sources that are legally restricted to expenditures for specified purposes. Debt Service Funds Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs. Capital Projects Funds Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities, other than those financed by proprietary funds. PROPRIETARY` FUNDS: Enterprise Funds Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises where the intent is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. Internal Service Funds Internal Service Funds are used to account for the financing of goods or services provided by one department to other departments of the City on a cost reimbursement basis. r 27 I Note 1: Summarv of Sianificant Accountina Policies (cont'dl C. Fixed Assets and Lon4-Term Liabilities The accounting and reporting of fixed assets and long-term liabilities associated with a fund are determined by its measurement focus. All governmental funds are accounted for on a spending or "financial flow" measurement, which means that only current assets and current liabilities are generally included on their balance sheets. Their reported fund balance is considered a measure of "available spendable resources." Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. Fixed assets used in governmental fund type operations are accounted for in the General Fixed Assets Account Group, rather than in the governmental funds. Public domain general fixed assets consisting of certain improvements other than buildings, including roads, curbs and gutters, streets and sidewalks, drainage systems, and lighting systems have been excluded from general fixed assets, as such items are immovable and of value only to the City. No depreciation has been provided on general fixed assets. All fixed asse a ts re valued at historical cost or estimated histoncal cost if histoncal cost is unavailable. Donated fixed assets are valued at their estimated market value as of the date donated. The fixed assets of the proprietary funds are depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows: Water Sewer Mains Lines 100 years Buildings and Structures 20-40 years Water Wells and Storage Tanks 15-50 years Sewer Lift Stations 15-40 years Machinery and Equipment 5-20 years Furniture and Fixtures 5-20 years Public Utility assets financed by special assessments are recorded as contributions. 28 Note 1: Summarv of Siqnificant Accountina Policies (cont'dl Long-term liabilities expected to be financed from governmental funds are accounted for in the General Long-Term Debt Account Group, not in the governmental funds. All ro rieta funds are accounted for on a flow of economic res�urces p P rY measurement focus. With this measurement focus, all assets and all liabilities associated with the operations of these funds are included on the balance sheet. Fund equity (e.g., net total assets) is segregated into contributed capital and retained earnings components. Proprietary fund-type operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets. D. Basis of Accountina Governmental funds are accounted for using the modified accrual basis of accounting. Their revenues are recognized when they become measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Major revenues that are susceptible to accrual include taxes, special assessments, intergovernmental revenues, charges for services, and investment earnings. Major revenues that are not susceptible to accrual include licenses and permits, fees and miscellaneous revenues; such revenues are recorded only as received because they are not measurable until collected. Interest on special assessments is recognized as revenue when due, net of delinquencies. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred, except for principal and interest on general long-term debt which is recognized when due. All proprietary funds are accounted for using the accrual basis of accounting. Their revenues are recognized when they are earned, and expenses are recognized when they are incurred. Unbilled Water and Sewer fund utility service receivables are recorded at year end. The City applies all applicable Financial Accounting Standards Board (FASB) pronouncements issued prior to November 30, 1989 in accounting for its proprietary operations. E. Budaets and Budaetarv Accountina The City follows these procedures establishing the budgetary data reflected in the financial statements: 29 Note 1: Summarv of Siqnificant Accountina Policies (cont'dl 1. In August, the City Manager submits to the City Council proposed operating budgets for the fiscal year commencing the following January. The operating budgets include expenditures and the means of financing them. 2. The Count mails individual ro ert t x noti y p p y a ces showing the taxes which would result from the proposed budgets of all taxing units to each property in November. 3. Public heanngs are conducted to obtain taxpayer comments. 4. The budgets are legally enacted through passage of a resolution by the City Council in the month of December. 5. The City Council must authorize any transfer of budgeted amounts between departments within the general fund. A transfer of budgeted amounts within individual departments must be authorized by the city manager. 6. Supplemental appropriations during the year may only be made by the City Council. These amounts must be financed by funds from the contingency reserve set up in the general fund or by additional revenues. 7. All budget amounts lapse at the end of the year to the extent they have not been expended. 8. Formal budgetary integration is employed as a management control device during the year for all governmental funds with the exception of Debt Service Funds and Capital Project Funds. Formal budgetary integration is not employed for Debt Service Funds because effective budgetary control is alternatively achieved through general obligation bond indenture provisions. Budgetary control for Capital Projects Funds is accomplished through the use of project controls and project-length budgets. 9. Budgets are adopted on a basis consistent with generally accepted accounting principles. Annual appropriated budgets are adopted for all governmental funds except for Debt Service Funds and the project-length Capital Project Funds. 10. Budgetary control is maintained at the department level for the General Fund and at the fund level for all other governmental funds that adopt annual budgets. 11. Budgeted amounts are as originally adopted, or as amended by the City Council. Individual and aggregate amendments were not materiat in relation to the original appropriations. 1 30 Note 1: Summarv of Sianificant Accountinq Policies (cont'dl F. Investments Cash balances from all funds are combined and invested to the extent available in authorized investments (see Note 2). Earnings from such investments are allocated to the respective funds on the basis of applicable cash balance participation by each fund. Cash and investments are stated at amortized cost. All highly liquid unrestricted investments with a maturity of three months or less when purchased are considered to be cash equivalents. G. Inventorv 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. The costs of governmental fund type supplies are recorded as expenditures when purchased. H. Accrued Vacation and Sick Pav The City pays employees severance pay upon termination of employment based on accumulated sick leave and accrued vacation. Such pay is accrued as an expenditure/expense as it is earned. I. Fund Epuitv ontributed ca ital i r orded i C p s ec n proprietary funds that have received capital grants or contributions from developers, customers or other funds. Reserves represent those portions of fund equity not appropriable for expenditure or legally segregated for a specific future use. Designated fund balance represents tentative plans for future use of financial resources. J. Propertv Tax Property tax levies are set by the City Council in December of each year, and are certified to Hennepin County for collection in the following year. In Minnesota, counties act as collection agents for all property taxes. The County spreads all levies over taxable property. Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. Revenues are accrued and recognized in the year col.fectible, net of delinquencies. 31 Note 1: Summarv of Sianificant Accountina Policies (cont'dl Real property taxes may be paid by taxpayers in two equal installments on May 15 and October 15. Personal property taxes may be paid on February 28 and June 30. The County provides tax settlements to cities and other taxing districts two times a year, in July and December. Taxes which remain unpaid at December 31 are classified as delinquent taxes receivable and are fully offset by deferred revenue because they are not known to be available to finance current expenditures. At December 31, 1997, the City has recorded $1,174,810 in deferred revenue for the General Fund for estimated property tax abatements that are anticipated to be repaid to the County in future years. K. Conduit Debt Obliaations From time to time, the City has issued Industrial Revenue Bonds to provide assistance to private sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private sector entity served by the bond issue. Neither the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. L. Accountina Chanae Deferred Comnensation GASB Statement No. 32, Accounting and Financia/ Reporting for /nterna/ Revenue Code 457 Deferred Compensation P/ans, establishes reporting requirements for IRC Section 457 plans. IRC Section 457 was revised in 1996 to require that qualifying plans hold the assets and income "...in trust for the exclusive benefit of participants and their beneficiaries..." Consequently, the City has no legal access to these assets. Therefore, in accordance with the requirements for GASB Statement No. 32, the City has restated total assets and liabilities of our Agency Fund by removing $3,593,460 of Section 457 Deferred Compensation assets and related liabilities originally reported at December 31, 1996. Adopting the change also eliminated the City's need for a trust and agency fund. M. Reclassification Certain account balances were reclassified for the year ended December 31, 1996. These reclassifications, which did not require a restatement of fund balance, were adjusted for comparability to the financial statements for the year ended December 31, 1997, and must be considered when comparing the financial statements of this 32 Note 1: Summarv of Sianificant Accountinq Policies (cont'dl report with those of prior reports. N. Total Columns on Combined Statements Total columns on the Combined Statements are ca tioned memorandum onl to P y indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or cash flows in conformity with generally accepted accounting principles. Intertund eliminations have not been made in the aggregation of this data. Note 2: Cash and Investments A. Deposits In accordance with Minnesota Statutes, the City maintains deposits at 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 collateraf. 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 furnishmg the collateral. At December 31, 1997 the carrying amount of the City's demand deposits was $214,936 and the bank balance was $286,814. Of the bank balance, $100,422 was covered by federal depository insurance (risk category A) and the remainder was covered by collateral held in the pledging bank's trust department in the City's name (risk category B). Risk Cateaorv (A) Insured or collateralized by securities held by the City or its agent in the City's name. (B) Collateralized with securities held by the pled in institution's trust 9 9 department in the City's name. 33 Note 2: Cash and Investments (cont'dl (C) Uncollateralized or collateralized with securities held by the pledging institution's trust department or agent, but not in the City's name. B. Investments The City may also invest idle funds as authorized by Minnesota Statutes, as follows: j (a) Direct obligations or obligations guaranteed by the United States or its agencies. (b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities described in (a) above. (c) General obligations of the State of Minnesota or any of� its municipalities. (d) Bankers acceptances of United States banks eligible for purchase by the Federal Reserve System. (e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. (f) Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker-dealers. (g) Future contracts sold under authority of Minnesota Statutes 471.56, subdivision 5. 1 34 Note 2: Cash and Investments (cont'dl The City has not purchased any collateralized mortgage obligations, derivatives, or interest only strip investments. Our practice is to hold investments to maturity. The only reason to sell prior to maturity is an unforeseen cash flow need. In the past five years, there has been only one occasion where an investment was sold prior to maturity. Of the City's portfolio as of December 31, 1997, 64% matures within 1 year, another 16% in the second year, 9% in the third year, 5°!a in the fourth year, and the last 6% in the fifth through the tenth years. The City's investments are categorized below to give an indication of the level of custodial credit risk assumed at year-end. Category 1 includes investments that are insured or registered or for which the securities are held by the City or its agent in the City's name. Category 2 includes uninsured and unregistered investments for which the securities are held by the counter party's trust department or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counter party, or by its trust department or agent, but not in the City's name. In accordance with GASB Statement No. 3, investments in a money market fund are not categorized as to custodial credit risk. Balances at December3l, 1997: Credit Risk Category Carrying Market Securities Type 1 Z 3 Amount Value Investments Categorized: U.S. Governments $10,829,574 $10,829,574 $10,925,313 Federal Agencies 6,554,117 6,554,117 6,547,352 Commercial Paper 13,173,261 13,173,261 13,173,261 $30,556,952 $0 $0 30,556,952 30,645,926 Investments Not categorized: Moneymarketfunds 9,426,194 9,426,194 Totallnvestments $39,983,146 340,072,120 35 Note 2: Cash and Investments (cont'dl SUMMARY OF CASH AND INVESTMENTS Balances at December 31, 1997 Cash: Carrying Amount Marquette Bank Brookdale, Brooklyn Center, Minnesota $203,309 Riverside Bank, Minneapolis, Minnesota 11,627 Change funds 9,450 Tota! Cash $224,386 I nvestments: Investment Tvoe interest Rate Maturity U.S. Treasury notes 5.1 7.8% 1998 2002 $10,829,574 Federal Home Loan Mortgage bonds 5.2% 1998 305,407 Federal National Mortgage Association bonds 5.3 7.7% 1998 2006 6,248,710 Commercial paper Floating Rate 1998 13,173,261 Minnesota Municipal Money Market Fund, Insight Investment Management, Minneapolis, Minnesota 3,687,609 Dreyfus General Money Market Fund, Marquette Trust, Minneapolis, Minnesota 91,089 Money Market Fund, First Trust, St. Paul, Minnesota 5,647,496 Tota I I nvestments $39, 983,146 Total Cash, Cash Equivalents and Investments $40,207,532 From Exhibit 1, COMBINED BALANCE SHEET Cash and cash equivalents $13,191,766 I nvestments 27, 015, 766 $40, 207, 532 36 Note 3: Fixed Assets Changes in the General Fixed Assets Account Group during 1997 were as follows: Balance Balance Jan. 1, 1997 Additions Disposals Dec. 31, 1997 Land $2,369,801 $737 $2,369,064 Buildings Improvements 6,226,511 $486,600 102,824 6,610,287 Park Improvements 3,279,047 8,112 36,600 3,250,559 Furniture Fixtures 1,490,138 95,610 223,781 1,361,967 Departmental Equipment 1,172,598 68,854 337,657 903,795 TOTAL GENERAL FIXED ASSETS $14,538,095 $659,176 $701,599 $14,495,672 The following is a summary of proprietary fund-type fixed assets at December 31, 1997: Internal Enterprise Service Funds Funds Land $2,737,605 Land Improvements 97,112 Buildings Improvements 17,451,182 Mains Lines 24,743,952 Departmental Equipment 1,124,718 $4,778,894 Total 46,154,569 4,778,894 Less accumulated depreciation (9,828,433) (2,286,861) Net $36,326,136 $2,492,033 Note 4: Contributed Caoital During 1997 contributed capital changed by the following amounts: Internal Enterprise Service Funds Funds Additions: Improvement construction $156,784 Deductions: Depreciation on contributed assets (348,738) ($177,453) Net Change (191,954) (177,453) Contributed Capital, January 1, 1997 21,042,114 3,645,126 Contributed Capital, December 31, 1997 $20,850,160 $3,467,673 37 Note 5: Ooeratina Leases During 1997, the City leased space for the operation of one of its three munici al P liquor stores under a noncancelable five-year lease. The lease provides for minimum rent payments, plus a pro-rata share of common area expenses. Total rental expense under the lease agreement for the years ended December 31, 1997 and 1996 was $38,133 and $35,936, respectively. Beginning in June 1998, the City will lease space for a new municipal liquor store under a noncancelable two year lease. The old liquor store site was shared with a fire station. In 1998, both the liquor store and fire station will be torn down and only a fire station will be built on the site. Future minimum rent payments under non-cancelable leases are as follows: Year Endinq Amount 1998 38, 953 1999 48,457 2000 15.991 $103.401 The Earle Brown Heritage Center Fund, which operates as an enterprise fund, leased space to four tenants in 1997. Three leases expired in 1997 and the fourth is currently being re-negotiated. The City plans to convert the remaining unoccupied office space into convention rental space in 1998. Rental revenues and expenditures under the lease agreements were as follows: 1997 1996 Rental Revenues 79,774 $110,505 Rental Expenditures 61,357 81,924 Future minimum rentals to be received in 1998 are $9,918. 38 Note 6: Lona-Term Deb# The Cit 's lo y ng term debt includes general obligation bonds, tax increment bonds, and special assessment improvement bonds; all of which are recorded in the General Long-Term Debt Account Group. In addition, the City issued storm sewer revenue bonds which are recorded as a liability in the Storm Drainage Fund. The following is a summary of bond transactions for the year ended December 31, 1997: General Tax Special Storm Sewer Obfigation Increment Assessment Revenue Bonds Bonds Bonds Bonds Total Bonds payable January 1 $2,295,000 $13,205,000 $3,030,000 $1,720,000 $20,250,000 Bonds issued 7,900,000 1,075,000 8,975,000 Bonds retired 170,000 780,000 185,000 155,000 1,290,000 Bonds payable December 31 $10,025,000 $12,425,000 $3,920,000 $1,565,000 $27,935,000 The annual requirements to amortize all outstanding debt as of December 31, 1997, including interest of $9,479,074, are as follows: General Tax Special Storm Sewer Obligation Increment Assessment Revenue Bonds Bonds Bonds Bonds Total 1998 $548,965 $1,555,040 $425,918 $240,390 $2,770,313 1999 986,588 1,827,232 567,076 237,557 3,618,453 2000 1,049,731 1,875,554 559,135 239,110 3,723,530 2001 1,049,646 1,969,409 540,529 239,950 3,799,534 2002 1,047,523 1,973,893 526,408 240,100 3,787,924 2003 on 9,370,726 7,392,716 2,236,878 714,000 19,714,320 $14,053,179 $16,593,844 $4,855,944 $1,911,107 $37,414,074 If special assessments are not adequate to retire the outstanding debt, the City's fufl faith and credit are pledged for their redemption. The general obligation, tax increment and storm sewer revenue bonds are backed by the full faith and credit of the City. There are a number of limitations contained in the various bond indentures. The City is in compliance with all requirements of the indentures. 39 Note 6: Lona Term Debt (cont'd) Long-term debt obligations outstanding at year-end are summarized as follows: Bond Payment Issue Maturity Authorized Rates °,6 Dates Date Date And Issued Retired Outstanding General Obligation Bonds State-Aid Street Bonds 4.7-6.7 4-01 10-01 09-01-91 04-01-06 $3,000,000 $875,000 $2,125,000 Police and Fire Building Bonds 4.1-4.9 2-01 8-01 12-01-97 02-01-13 7,900,000 7,900,000 Total $10,900,000 $875,000 $10,025,000 General Obligation Tax Increment Bonds 1991 Tax Increment Bonds 4.7-6.0 2-01 8-01 03-01-91 02-01-04 $6,050,000 $2,050,000 $4,000,000 1992 Refunding Tax Increment Bonds 4.5-5.6 2-01 8-01 02-01-92 02-01-03 4,270,000 405,000 3,865,000 1995 Taxable Tax Increment Bonds 6.0-6.75 2-01 8-01 11-01-95 02-01-11 4,560,000 4,560,000 Total $14,880,000 $2,455,000 $12,425,000 General Obligation Speciai Assessment 8onds 1987 Refunding Bonds 4.7-5.5 2-01 8-01 04-01-87 02-01-97 $1,200,000 $1,200,000 $0 1994 Street Improvement Bonds 4.1-5.5 2-01 8-01 OS-01-94 02-01-05 835,000 145,000 690,000 1995 Street Improvement Bonds 4.0-4.9 2-01 8-01 11-01-95 02-01-06 780,000 65,000 715,000 1996 Street Improvement Bonds 4.2-5.1 2-01 8-01 11-01-96 02-01-07 1,440,000 1,440,000 1997 Street Improvement Bonds 4.0-4.7 2-01 8-01 12-01-97 02-01-08 1,075,000 1,075,000 Total $5,330,000 $1,410,000 $3,920,000 General Obligation Revenue Bonds 1994 Storm Sewer Revenue Bonds 4.2-5.4 2-01 8-01 08-01-94 02-01-05 $1,830,000 $265,000 $1,565,000 Total $1,830,000 $265,000 $1,565,000 40 Note 7: Seament Information Segment information as of and for the year ended December 31, 1997 was as follows: E. Brown Enterprise Funds: Municipal Golf Heritage Recycling Water Sanitary Storm Liquor Course Center Refuse Utility Sewer Drainage Fund Fund Fund Fund Fund Fund Fund Total Operating Revenues $3,006,982 $354,380 $2,531,083 $210,070 $1,176,399 $2,251,684 $856,920 $10,327,518 Depreciation Expense 24,768 17,251 379,413 233,746 187,905 59,634 902,717 Operating Income (Loss) 176,015 69,181 (318,207) (9,389) 113,541 182,702 598,624 812,467 Operating Transfers (Out) (100,000) (100,000) Net Income (Loss) 84,633 13,410 (345,355) (4,606) 381,061 297,035 640,018 1,066,196 Current Capital Contributions 156,784 156,784 Property, Plant 8� Equipment: Additions 9,016 98,512 1,849,371 911,299 482,905 3,351,103 Deletions 14,757 12,239 139,394 350,991 44,244 561,625 Net Working Capital 319,932 (7,190) (180,990) 100,698 3,459,753 1,834,500 413,006 5,939,709 Total Assets 787,452 1,717,987 9,519,505 101,531 15,051,558 10,914,585 5,430,422 43,523,040 Bonds and OtherLong-Term Liabilities Payable from Operating Revenues 56,313 1,100,000 1,400,000 2,556,313 Total Equity $570,722 $563,996 $8,912,152 $100,698 $14,912,155 $10,884,695 $3,765,114 $39,709,532 Note 8: Reserved/Desic�nated Fund Equitv Fund balances and retained earnings in the various funds have been reserved or designated for the following purposes: Reserved Fund Equitv Retained Earnings: Enterprise Funds: Water Utility Fund Special Assessments $87,638 Sanitary Sewer Fund Special Assessments 5,008 Storm Drainage Fund Debt Service 240,390 Special Assessments 238,101 Total Reserved Retained Earnings 571,137 Fund Balances: General Fund Advances to other Funds 105,074 Special Revenue Funds: Economic Development Authority Fund Bond Proceeds 2,945,726 Debt Service Funds: General Obligation Bonds Debt Service 82,056 Tax Increment Bonds Debt Service 1,535,079 Special Assessment Bonds Debt Service 620,414 Total Debt Service Funds 2,237,549 Capital Projects Funds: Capital Improvements Fund Advances to other Funds 1,234,384 Bond Proceeds 7,564,900 Municipal State Aid for Construction Fund Advances to other Funds 593,069 Total Capital Projects Funds 9,392,353 Total Reserved Fund Balances 14,680,702 Total Reserved Fund Equity $15,251,839 Desianated Fund Eauitv General Fund Working Capital $5,513,492 Appopriated to next budget 2,712 Total General Fund $5,516,204 42 Note 9: Interfund Receivables and Payables Due from other funds and due to other funds are short-term receivables/payables which have interest rates of 0% to 7%. Advances to other funds and advances from other funds are considered long-term receivables/payables. Advances have interest rates of 0% to 7% with maturities extending through the year 2017. Advances between funds are offset by a fund balance reserve account and are not expendable available financial resources. Due from Due to Other Funds Other Funds General Fund 337,154 Special Revenue Funds: Economic Development Authority Fund 136,017 Debt Service Funds: Tax Increment Bonds 50,806 Capital Projects Fund: Capital Reserve Emergency Fund 41,656 Capital Improvements Fund 449,998 M.S.A. Construction Fund 84,946 Special Assessments Constr. Fund 715,577 Enterprise Funds Earle Brown Heritage Center Fund 385,000 Total 1,100,577 1,100,577 Advances to Advances from Other Funds Other Funds General Fund 105,074 Special Revenue Funds: E.B. Farm Tax Increment Fin. Fund 698,143 Capital Projects Funds: Capital Improvements Fund 1,234,384 M.S.A. Construction Fund 593,069 Enterprise Funds: Municipal Liquor Fund 84,384 Golf Course Fund 1,150,000 Total 1,932,527 1,932,527 43 Note 10: Individual Fund Disclosures Deficit fund balances exist at December 31. 1997 in the following funds: Special Revenue Funds: Earle Brown Tax Increment Financing District: Unreserved deficit fund balance $560,347 This deficit is being funded through internal borrowing and will be repaid from future surplus tax increments. Internal Service Funds: Public Employee Retirement Fund: Unreserved deficit retained earnings $33,615 This deficit is being funded through investment earnings of the fund. Excess of Exnenditures over Ap�ro�riations: For the year ended December 31, 1997, expenditures exceeded budget at the fund level (i.e., the legal level of budgetary control) as follows: Snecial Revenue Funds� Excess Earl Brown Farm Tax Increment District 269 Tax Increment District No. 3 54,987 The over expenditures in the tax increment district funds were due to unbudgeted legal and administrative costs. The over expenditures were funded by excess tax increment revenues. Note 11: Continaencies There are a few lawsuits pending in which the City is involved. City Management estimates that the potential claims against the City not covered by insurance resulting from such litigation would not materially affect the financial position of the City. Note 12: Risk Manaaement 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 for which the City carries commercial insurance policies. The City retains risk for the deductible portions of the insurance policies. The amount of these deductibles are considered immaterial to the financial statements. 44 Note 12: Risk Manaqement (cont'dl 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. However, the City did increase the deductible portion of the insurance policies and the amount of this increase is considered immaterial to the financial statements. Note 13: Post-Emplovment Health Care Benefits The City has provided post-retirement health care benefits, as per the requirements of a 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. To qualify under this program, the employee, on the date of his/her retirement, must meet eligibility requirements for a full retirement annuity under PERA (Note 14A) 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. Employees participate in this program on a voluntary basis. As of December 31, 1997, six employees currently participate in this program. The cost of City paid health care premiums for the years ended December 31, 1997 and 1996 was $13,204 and $17,294, respectively. In addition, the expenditures in 1997 and 1996 were increased by $170,309 and $60,839, respectively, to account for the change in the accrued health insurance liability. The $1,218,229 recorded as a liability reflects the City's best estimate of the vested obligation to be funded for this program as of December 31, 1997. Note 14: Defined Benefit Pension Plans Statewide A. Plan Description All full-time and certain part-time employees of the City of Brooklyn Center are covered by defined benefit pension 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 Statutes, Chapters 353 and 356. 45 Note 14: Defined Benefit Pension Plans Statewide (cont'dl PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic members are not. All new members must participate in the Coordinated Plan. All police officers, fire fighters 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 member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERF's Coordinated and Basic members. The retiring member receives the higher of step rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member who retires before July 1, 1997 is 2 percent of average salary for each of the first 10 years of service and 2.5 percent for each remaining year. The annuity accrual rate for Basic members who retire on or after July 1, 1997 is 2.2 percent of average salary for each of the first 10 years of service and 2.7 percent for each remaining year. For a Coordinated Plan member who retires before July 1, 1997, the annuity accrual rate is 1 percent of average salary for each of the first 10 years and 1.5 percent for each remaining year. For Coordinated members who retire on or after July 1, 1997, the annuity accrual rates increase by 0.2 percent (to 1.2 percent of average salary for each of the first 10 years and 1.7 percent for each remaining year). Under Method 2, the annuity accrual rate is 2.5 percent of average salary for Basic Plan members and 1.5 percent for Coordinated Plan members who retire before July 1, 1997. Annuity accrual rates increase 0.2 percent for members who retire on or after July 1, 1997. For PEPFF members, the annuity accrual rate is 2.65 percent for each year of service for members who retire before July 1, 1997. Effective Juiy 1, 1997, the accrual rate is increased to 3.0 percent. For all PEPFF members and PERF members whose annuity is calculated using Method 1, a full annuity is available when age plus years of service equal 90. A reduced annuity is also available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A normal annuity is a lifetime annuity that ceases upon the death of the retiree-- no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will reduce the monthly normal annuity amount, because the annuity is payable over joint lives. Members may also leave their contributions in the fund upon termination of public service in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. i 46 Note 14: Defined Benefit Pension Plans Statewide (cont'dl 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 benefits but are not receiving them yet, are bound by the provisions in effect at the time they last terminated their public service. r 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, 514 St. Peter Street, #200, St. Paul, Minnesota, 55102 or by calling (612) 296-7460 or 1-800-652-9026. B. Fundina Policv Minnesota Statutes Chapter 353 sets the rate 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 8.23% and 4.23%, respectively, of their annual covered salary. PEPFF members are required to contribute 7.60% of their annual covered salary. The City of Brooklyn Center is required to contribute the following percentages of annual covered payroll: 10.73% for Basic Plan PERF members, 4.48% for Coordinated Plan PERF members, and 11.40% for PEPFF members. The City's contributions to the Public Employees Retirement Fund for the years ending December 31, 1997, 1996, and 1995 were $218,414, $214,976, and $204,625, respectively. The City's contributions to the Public Employees Police Fire Fund for the years ending December 31, 1997, 1996, and 1995 were $268,181, $248,237, and $230,818, respectively. The City's contributions were equal to the contractually required contributions for each year as set by state statute. Note 15: Pension Plan Brooklvn Center Fire Denartment Relief Association A. Plan Descri�tion The City contributes to the Brooklyn Center Fire Department Relief Association (Association). In accordance with Government Accounting Standards Board Statement No. 25, it is classified as a defined benefit single employer public employee retirement system. Volunteer fire fighters of the City are members of the Association and its pension plan. An actuarial study was completed during 1997 which provided for benefit increases which will take effect on January 1, 1998. The plan's baseline benefit after 20 years of service and attaining the age 50 remains at $530 per month in 1997. There are additional benefits for service through 30 years. Vesting begins 47 Note 15: Pension Plan Brooklvn Center Fire De�artment Relief Association (cont'dl with 10 years of service and benefits are pro-rated for members who have between 10 and 20 years of service. Members may choose to take a lump sum settlement instead of the pension. The lump sum settlement increased from $4,000 in 1997, to $5,000 in 1998, times the number of years of service, with a maximum of 30 years. Spouse's, children's and funeral benefits are also provided. These benefit provisions and all other requirements are consistent with enabling state statutes. The it C y levies property taxes at the direction of and for the benefit of the association plan and passes through state aids allocated to the plan, all in accordance with enabling state statutes. B. Fundina Status and Proaress The amount shown below as the "pension benefit obligation" is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected benefit increases, estimated to be payable in the future as a result of service to date. The measure is the actuarial present value of credited projected benefits and is intended to help users assess the funding status of the association plans on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among plans. It is independent of the actuarial funding method used to determine contributions to the plan, discussed in "C" below. The pension benefit obligation was determined as part of an actuarial valuation at January 1, 1997 and updated as of January 1, 1998. Significant actuarial assumptions used include (a) a rate of return on the investment of present and future assets of 7.5 percent per year compounded annually, (b) no post-retirement benefit increases, and (c) entry age normal funding method. An actuarial update to the pension obligation is performed annually. On December 31, 1997, the over funded pension benefit obligation was as follows Pension benefit obligation: Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits 939,661 Active Members 1.E63.944 Total pension benefit obligation 2,603,605 Net assets held in trust for pension benefits (at carrying value, equals market) 2.882,439 Over funded pension benefit obligation 278.834 48 Note 15: Pension Plan Brooklvn Center Fire Department Relief Association (cont'dl The pension benefit obligation increased due to the additional year of service credited to plan members and a benefit increase per year of service. The pension benefit obligation had a net increase of $234,560 in 1997. In accordance with GASB Statement No. 25 chan es were g made to the actuarial assumptions. The rate of return on the investment of present and future assets was changed from 5.0 percent per year to 7.5 percent per year compounded annually. This change in assumption better reflects the historical and projected investment performance on plan assets. Other changes to the actuarial assumptions include the adoption of the entry age normal funding method. C. Contributions Reauired and Contributions Made Financial requirements of the association plan are determined on an actuarial basis using the entry age normal actuarial cost method. Normal cost is funded on a current basis. Contributions at the level specified by the last full actuarial study will continue to be made until a new study revises the contribution level. The minimum tax levy obligation is the financial requirement for the year lessanticipated state aids. The funding strategy for normal cost should provide sufficient resources to pay plan benefits on a timely basis. Total contributions to the plan in 1997 amounted to $123,070, of which $38,451 was levied by the City of Brooklyn Center and $84,619 was from the State of Minnesota. The contributed amounts were actuarially determined as described above and were based on an actuarial valuation as of January 1, 1993. The contributions represent funding for normal cost of $68,698, amortization of the unfunded actuarial accrued liability of $26,241, and administration costs of $13,512. Significant actuarial assumptions used to compute pension contribution requirements are substantially the same as those used to determine the standardized measure of the pension obligation. The computation of the pension contribution requirements for 1997 was based on the same actuarial assumptions, benefit provision, actuarial funding method, and other significant factors used to determine pension contribution requirements in previous years with the exception of the changes noted in Section B above. 49 i Note 15: Pension Plan Brookl�n Center Fire Department Relief Association (conYdl D. Trend Information Trend information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due. Ten year trend information may be found in the Association's annual financial report for the year ended December 31, 1997. Three year trend information for the Association is as follows: 1997 1996 1995 Available assets as a percentage of benefit obligation 111 112% 101 City's contribution'`* as a percentage of *not *not *not covered payroll applicable applicable applicable '�The Brooklyn Center Fire Department is a volunteer organization; thus, no covered payroll exists. **The City's contribution was made in accordance with actuarially determined requirements. E. Related Partv Investments As of December 31 1997 the Association held no securities issued b the Cit or Y Y other related parties. Note 16: Fund Chanaes The following funds were opened during 1997: Special Revenue: Police Drug Forfeiture Fund City Initiatives Grant Fund Capital Projects: Capital Reserve Emergency Fund The following fund was closed during 1997: Agency Fund: Employee Deferred Compensation Fund 50 Note 17: Residual Eauitv Transfers During 1997, the City established two new funds with residual equity transfers. The General Fund transferred $5,748 to the Police Drug Forteiture Special Revenue Fund. This transfer represented unspent funds from prior years' drug forteiture revenues. The Capital Improvements Capital Projects Fund transferred $1,000,000 to the Capital Reserve Emergency Capital Projects Fund. The Capital Reserve Emergency Fund monies will be held in reserve for catastrophic losses. The Cit closed the Refundin Bonds of 1987 Debt Service Fund durin 1997. The Y 9 g final fund equity of $297,382 was transferred to the Special Assessment Construction Capital Projects Fund for future capital improvements. Also, the General Fund transferred $100,000 to the Capital Improvements Capital Projects Fund and $200,000 to the Special Assessment Construction Capital Projects Fund. The transfers represent funds from the prior year's surplus of revenues over expenditures. The funds will be used for future park and street improvements. The amounts are not expected to be repaid and are reflected as residual equity transfers in the City's financial statements. 51 City of Brooklyn Center, Minnesota GENERALFUND The City of Brooklyn Center Home Rule Charter provides in Section 7.11 that "there shall be maintained in the City Treasury a classification of Funds which shall provide for a General Fund for the payment of such expenses of the City as the Council may deem proper, and such other funds as may be required by statute, ordinance or resolution." The General Fund was established to account for all revenues and expenditures which are not required to be accounted for in other funds. It has more diverse revenue sources than other funds. These revenue sources include property taxes, licenses, permits, fines and forfeits, intergovernmental, service charges, and investment earnings. The Fund's resources finance a wide range of functions, including the current operations of general government, public safety, public works, health and welfare, recreation, and non-departmental expenditures. This fund utilizes the modified accrual basis of accounting. Revenues are recognized in the accounting period in which they become available and measurable. Expenditures are recognized in the accounting period in which the related liability is incurred. S2 A-1 City of Brooklyn Center General Fund COMPARATIVE BALANCE SHEET December 31, 1997 1997 1996 ASSETS Cash and cash equivalents $2,576,390 $1,748,434 Investments 5,729,955 5,484,065 Accounts receivable 51,154 163,658 Delinquent taxes receivable 186,089 204,432 Due from other funds 337,154 873,932 Due from other governments 91,192 37,818 Advance to other funds 105,074 105,074 TOTAL ASSETS $9,077,008 $8,617,413 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable $290,040 $387,303 Accrued salaries payable 222,479 195,508 Accrued vacation and sick pay 601,810 594,728 Deferred revenue delinquent taxes 186,089 204,432 Deferred revenue tax abatements 1,174,810 712,944 Total Liabilities 2,475,228 2,094,915 Fund Balance: f Reserved for advances to other funds 105,074 105,074 Unreserved fund balance Designated: Working capital 5,513,492 5,620,352 Appropriated to next budget 2,712 44,718 Undesignated 980,502 752,354 Total Fund Balance 6,601,780 6,522,498 TOTAL LIABILITIES AND FUND BALANCE $9,077,008 $8,617,413 53 A-2 City of Brooklyn Center General Fund COMPARATIVE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Year Ended December 31, 1997 1997 Actual Over or Under(-) 1996 Budget Actual Budget Actual Revenues Property taxes $6,764,878 $6,789,756 $24,878 $6,326,012 Property tax abatements reserve (461,866) (461,866) (205,135) Licenses and permits 300,160 485,232 185,072 402,000 Intergovernmental 3,762,484 3,811,900 49,416 3,618,075 Charges for services 905,944 757,640 (148,304) 839,583 Court fines 192,000 183,270 (8,730) 186,761 Investment earnings 270,000 354,597 84,597 312,831 Miscellaneous 62,600 104,234 41,634 15,919 Total Revenues 12,258,066 12,024,763 (233,303) 11,496,046 Exoenditures General government 2,116,120 1,992,251 (123,869) 1,968,780 Public safety 5,297,175 5,089,072 (208,103) 5,022,324 Public works 1,991,769 1,868,130 (123,639) 1,649,526 Community services 80,000 79,800 (200) 78,442 Parks and recreation 2,362,742 2,186,686 (176,056) 2,282,054 Economic development 249,570 248,779 (791) 2D1,600 Non-departmental 377,200 311,436 (65,764) 317,148 Administrative Services Reimbursement (699,141) (661,058) 38,083 (611,534) Total Expenditures 11,775,435 11,115,096 (660,339) 10,908,340 Excess or Deficiency of Revenues Over Expenditures 482,631 909,667 427,036 587,706 Other Financina Sources or Uses f-1 Operating transfers in 100,000 100,000 0 100,000 Operating transfers out (624,637) (624,637) 0 Total Other Financing Sources or Uses (524,637) (524,637) 0 100,000 Excess or Deficiency of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses (42,006) 385,030 427,036 687,706 Fund Balance January 1 6,522,498 6,522,498 0 5,834,792 Equity Transfers Out (305,748) (305,748) Fund Balance December 31 $6,480,492 $6,601,780 $121,288 $6,522,498 S4 S-1 (Continued next page) City of Brooklyn Center General Fund SCHEDULE OF REVENUES AND OTHER FINANCING SOURCES BUDGET AND ACTUAL For the Year Ended December 31, 1997 1997 Actual Over or Under(-) 1996 Budget Actual Budget Actual Ad Valorem Taxes Gross property taxes $6,239,878 $6,273,163 $33,285 $5,917,715 Penalties and interest (8,283) (8,283) (17,357) Lodging tax 523,000 523,745 745 424,419 Special assessments 2,000 1,131 (869) 1,235 Total Taxes 6,764,878 6,789,756 24,878 6,326,012 Reserve for Propertv Tax Abatements Tax abatements under litigation (461,866) (461,866) (205,135) Total Property Tax Abatements (461,866) (461,866) (205,135) Licenses and Permits Liquor and beer 103,800 138,168 34,368 120,665 Building permits 120,000 211,042 91,042 181,706 Mechanical permits 25,000 51,601 26,601 29,275 Sewer and water permits 500 986 486 1,497 Plumbing permits 10,000 23,273 13,273 17,211 Garbage licenses 2,125 2,180 55 2,300 Taxicab licenses 650 475 (175) 800 Mechanicallicenses 4,000 4,395 395 4,010 Pawn shop licenses 8,000 8,000 Service station licenses 1,765 2,356 591 1,925 Vehicle dealer licenses 900 1,013 113 900 Bowling licenses 808 348 (460) 808 Cigarette licenses 1,150 2,017 867 1,125 Sign permits 2,000 2,453 453 2,790 Rental dwelling permits 12,000 7,430 (4,570) 21,107 Amusement licenses 8,320 6,550 (1,770) 7,990 Dog licenses 5,700 8,872 3,172 5,841 Miscellaneous business license 1,442 14,073 12,631 2,050 Total Licenses and Permits 300,160 485,232 185,072 402,000 Interaovernmental Federal grants: Miscellaneous grants 75,000 73,181 (1,819) 6,000 Total Federal Grants $75,000 $73,181 ($1,819) $6,000 55 S-1 (Continued from prior page) City of Brooklyn Center General Fund SCHEDULE OF REVENUES AND OTHER FINANCING SOURCES BUDGET AND ACTUAL For the Year Ended December 31, 1997 1997 Actual Over or Under(-) 1996 Budget Actual Budget Actual Interaovernmental (continuedl State grants: Local government aid $1,922,164 $1,922,164 $0 $1,865,664 Local performance aid 32,093 32,093 0 Homestead credit aid 1,308,130 1,308,130 0 1,272,972 Police pension aid 220,000 236,535 16,535 242,013 PERA aid 17,183 17,183 Fireperson pension aid 73,000 84,619 11,619 88,272 Police training 11,000 13,675 2,675 13,865 Street maintenance aid 90,000 90,000 0 90,000 Miscellaneous grants 31,097 34,320 3,223 39,289 Total State Grants 3,687,484 3,738,719 51,235 3,612,075 Total Intergovernmental 3,762,484 3,811,900 49,416 3,618,075 Charaes for Services General government charges 21,020 23,666 2,646 26,589 Public safety charges 19,900 25,568 5,668 23,399 Recreation fees 865,024 708,406 (156,618) 789,595 Total Charges for Services 905,944 757,640 (148,304) 839,583 Court Fines Fines 192,000 183,270 (8,730) 186,761 Total Court Fines 192,000 183,270 (8,730) 186,761 Miscellaneous Interest on investments 270,000 354,597 84,597 312,831 Other 62,600 104,234 41,634 15,919 Total Miscellaneous 332,600 458,831 126,231 328,750 Total Revenues 12,258,066 12,024,763 (233,303) 11,496,046 Other Financina Sources Operating transfers in: Liquor Fund 100,000 100,000 0 100,000 Total Other Financing Sources 100,000 100,000 0 100,000 Total Revenues and Other Financing Sources $12,358,066 $12,124,763 ($233,303) $11,596,046 1 56 S-2 City of Brooklyn Center (Continued next page) General Fund SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES BUDGET AND ACTUAL For the Year Ended December 31, 1997 1997 Actual Over or Under(-) 1996 Budget Actual Budget Actual General Government Mayor and Council: Personal services $35,239 $40,363 $5,124 $33,309 Supplies 400 777 377 1,756 Services and other charges 90,450 68,862 (21,588) 60,510 Total Mayor and Council 126,089 110,002 (16,087) 95,575 Administrative Office: Personal services 336,977 310,301 (26,676) 332,215 Supplies 5,000 3,411 (1,589) 1,787 Services and other charges 85,200 84,362 (838) 49,746 Capital outlay 3,000 2,761 (239) Total Administrative Office 430,177 400,835 (29,342) 383,748 Elections and Voter Registration: Personal services 39,997 36,990 (3,007) 47,162 Supplies 900 19 (881) 2,309 Services and other charges 7,500 4,267 (3,233) 6,208 Total Elections and Voter Registration 48,397 41,276 (7,121) 55,679 Assessor's Office: Personal services 209,912 207,761 (2,151) 189,202 Supplies 2,800 2,948 148 1,892 Services and other charges 28,551 27,554 (997) 8,663 Capital outlay 6,095 6,079 (16) Total Assessor's Office 247,358 244,342 (3,016) 199,757 Finance: Personal services 370,743 371,511 768 359,500 Supplies 4,900 3,863 (1,037) 1,320 Services and other charges 7,280 7,070 (210) 1,424 Capital outlay 8,640 8,346 (294) Total Finance 391,563 390,790 (773) 362,244 Legal: Services and other charges 201,400 163,849 (37,551) 185,273 Total Legal 201,400 163,849 (37,551) 185,273 Government Buildings: Personal services 183,118 161,406 (21,712) 154,105 Supplies 35,742 36,143 401 26,585 Services and other charges 196,355 197,037 682 183,826 Capital outlay 14,470 14,870 400 5,310 Total Government Buildings $429,685 $409,456 ($20,229) $369,826 57 S City of Brooklyn Center (Continued next page) General Fund SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES BUDGET AND ACTUAL For the Year Ended December 31, 1997 1997 Actual Over or Under(-) 1996 Budget Actual Budget Actual General Government (continuedl Data Processing: Personal services $63,053 $54,295 ($8,758) $32,454 Supplies 8,000 9,969 1,969 7,023 Services and other charges 130,398 127,839 (2,559) 212,296 Capital outlay 40,000 39,598 (402) 64,905 TotalData Processing 241,451 231,701 (9,750) 316,678 Total General Government 2,116,120 1,992,251 (123,869) 1,968,780 Public Safetv Police Protection: Personal services 3,456,417 3,391,434 (64,983) 3,238,629 Supplies 67,769 61,272 (6,497) 60,920 Services and other charges 640,407 555,519 (84,888) 593,265 Capital outlay 55,360 53,235 (2,125) 125,681 Total Police Protection 4,219,953 4,061,460 (158,493) 4,018,495 Fire Protection: Personal services 337,484 344,212 6,728 319,809 Supplies 34,285 32,875 (1,410) 31,258 Services and other charges 185,258 179,705 (5,553) 283,790 Capital outlay 49,793 48,187 (1,606) 28,557 Total Fire Protection 606,820 604,979 (1,841) 663,414 Protective Inspection: Personal services 297,120 287,202 (9,918) 263,185 Supplies 2,400 1,917 (483) 1,080 Services and other charges 86,311 5:,,982 (30,329) 37,876 Capital outlay 4,700 (4,700) Total Protective Inspection 390,531 345,101 (45,430) 302,141 Emergency Preparedness: Personal services 44,852 44,175 (677) 28,029 Supplies 13,300 12,814 (486) 688 Services and other charges 16,219 14,877 (1,342) 6,812 Capital outlay 5,500 5,666 166 2,745 Total Emergency Preparedness 79,871 77,532 (2,339) 38,274 Total Public Safety $5,297,175 $5,089,072 ($208,103) $5,022,324 58 S=2 City of Brooklyn Center (Continued next page) General Fund SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES BUDGET AND ACTUAL For the Year Ended December 31, 1997 1997 Actual Over or Under(-) 1996 Budget Actual Budget Actual Public Works Engineering Department: Personal services $525,498 $481,997 ($43,501) $375,390 Supplies 4,900 5,312 412 4,338 Services and other charges 19,633 20,465 832 24,010 Capital outlay 9,000 8,831 (169) 10,554 Total Engineering Department 559,031 516,605 (42,426) 414,292 Street Department: Personal services 527,088 541,236 14,148 456,169 Supplies 173,550 135,305 (38,245) 153,833 Services and other charges 730,200 667,790 (62,410) 606,785 Capital outlay 1,900 7,194 5,294 18,447 Total Street Department 1,432,738 1,351,525 (81,213) 1,235,234 Total Public Works 1,991,769 1,868,130 (123,639) 1,649,526 Communitv Services Social Services: Service and other charges 80,000 79,800 (200) 78,442 Total Community Services 80,000 79,800 (200) 78,442 Parks and Recreation Administration: Personal services 337,435 319,060 (18,375) Supplies 13,800 8,251 (5,549) Services and other charges 43,966 40,778 (3,188) Capital outlay 1,500 1,932 432 Total Administration 396,701 370,021 (26,680) 0 Adult Programs: Personal services 84,595 86,855 2,260 236,047 Supplies 39,695 27,150 (12,545) 36,070 Services and other charges 137,493 105,478 (32,015) 148,855 Capital outlay 4,495 4,495 Total Adult Programs 261,783 223,978 (37,805) 420,972 Teen Programs: Personal services 12,492 11,042 (1,450) 14,648 Supplies 500 1,424 924 1,346 Services and other charges 4,900 5,199 299 4,236 Total Teen Programs $17,892 $17,665 ($227) $20,230 59 S City of Brooklyn Center (Continued next page) General Fund SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES BUDGET AND ACTUAL For the Year Ended December 31, 1997 1997 Actual Over or Under(-) 1996 Budget Actual Budget Actual Parks and Recreation (continuedl Children's Programs: Personal services $92,420 $85,823 ($6,597) $130,709 Supplies 12,250 11,588 (662) 10,179 Services and other charges 4,974 3,601 (1,373) 14,727 Total Children's Programs 109,644 101,012 (8,632) 155,615 General Programs: Personal services 24,388 26,254 1,866 61,301 Supplies 150 52 (98) 96 Senrices and other charges 38,275 36,293 (1,982) 39,741 Total Generai Programs 62,813 62,599 (214) 101,138 Community Center: Personal services 353,004 375,662 22,658 515,080 Supplies 65,333 56,824 (8,509) 87,558 Services and other charges 180,733 152,741 (27,992) 214,344 Capital outlay 5,000 2,912 (2,088) 3,913 Total Community Center 604,070 588,139 (15,931) 820,895 Park Maintenance: Personal services 499,627 436,641 (62,986) 348,182 Supplies 71,150 56,281 (14,869) 46,246 Services and other charges 302,987 298,799 (4,188) 359,801 Capital outlay 36,075 31,551 (4,524) 8,975 Total Park Maintenance 909,839 823,272 (86,567) 763,204 Total Parks and Recreation 2,362,742 2,186,686 (176,056) 2,282,054 Economic Development Convention Bureau: Services and other charges 249,570 248,779 (791) 201,600 Total Economic Development 249,570 248,779 (791) 201,600 Nondepartmental Expenditures not Charged to Departments: Personal services 3,000 3,227 227 5upplies 27,000 26,443 (557) 31,614 Services and other charges 343,500 277,856 (65,644) 284,146 Capital outlay 3,700 3,910 210 1,388 Total Nondepartmental $377,20� $311,436 ($65,764) $317,148 60 S= City of Brooklyn Center (Continued from prior page) General Fund SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES BUDGET AND ACTUAL For the Year Ended December 31, 1997 1997 Actual Over or Under(-) 1996 Budget Actual Budget Actual Administrative Service Reimbursement Charged to otherfunds ($699,141) ($661,058) $38,083 ($611,534) Total Administrative Service Reimbursement (699,141) (661,058) 38,083 (611,534) Other Financina Uses Operating transfers out: Special Assessment Bonds Debt Service Fund 230,440 230,440 0 Special Assessment Construction Fund 394,197 394,197 0 Total Other Financing Uses 624,637 624,637 0 0 Total Expenditures and Other Financing Uses $12,400,072 $11,739,733 ($660,339) $10,908,340 1 61 City of Brooklyn Center, Minnesota SPECIAL REVENUE FUNDS The Special Revenue Funds are established to account for revenues derived from taxes and/or other specific revenue sources. These resources are usually restricted by statute, City Charter or ordinance to finance specific City functions or activities. This fund type utilizes the modified accrual basis of accounting. Revenues are recognized in the accounting period in which they become available and measurable. Expenditures are recognized in the accounting period in which the related liability is incurred. Housino and Redevelooment Authoritv Fund (H.R.A.I: This fund has authority to levy an ad valorem property tax for the purpose of conducting housing and redevelopment projects. These projects are now done in the E.D.A. Fund and all tax proceeds are transferred to that fund. Economic Develooment Authoritv Fund (E.D.A.I: This fund was established to account for the Economic Development Authority (E.D.A.) of Brooklyn Center. The E.D.A. carries out activities which previously were done by the H.R.A., plus it has authority to operate an enterprise. The Earle Brown Heritage Center operates under this authority and a statement of its operations can be found in the enterprise fund section of this report. The E.D.A. also does redevelopment and housing projects, funded by an ad valorem property tax levy, and transfers from the C.D.B.G. and H.R.A. funds. Earle Brown Farm Tax Increment Financina District Fund: 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 of bonds which also were issued for that purpose. Tax Increment District No. 3 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 also were issued for that purpose. Police Drua Forfeiture Fund: This fund was established to account for property and/or cash seized by police personnel. Communitv Develooment Block Grant Fund: The fund was established to account for funds received under Title I of the Housing and Community Development Act of 1974. Transfers are made from this fund to the Economic Development Authority Fund where accounting for project costs takes place. Citv Initiatives Grant Fund: Revenues and expenditures from grants received from other governmental entities are accounted for in this fund. Grant programs for 1997 include several public safety grants, an after school enrichment recreation grant and a local planning assistance grant. 62 City of Brooklyn Center Special Revenue Funds COMBINING BALANCE SHEET December 31, 1997 Economic Earle Brown Tax Development Tax Incr. Increment Authority Financing District Fund District No. 3 ASSETS Cash and cash equivalents $1,031,047 $29,924 $72,702 Investments 2,299,792 66,748 162,165 Accounts receivable 5,750 Delinquent taxes receivable 8,765 Due from other funds 136,017 Due from other governments 41,124 TOTAL ASSETS $3,481,371 $137,796 $234,867 LIABILITIES AND FUND BALANCES IDEFI CITS1 Liabilities: Accounts payable $3,499 $535 Accrued salaries payable 4,097 Accrued vacation and sick pay 22,757 Due to other funds Advances from other funds $698,143 Deferred revenue 8,765 Total Liabilities 39,118 698,143 535 Fund Balances (Deficits): Reserved: Bond proceeds 2,945,726 Unreserved 496,527 (560,347) 234,332 Total Fund Balances (Deficits) 3,442,253 (560,347) 234,332 TOTAL LIABILITIES AND FUND BALANCES (DEFICITS) $3,481,371 $137,796 $234,867 63 B-1 Police Drug City Forfeiture Initiatives Totals Fund Grant Fund 1997 1996 $3,112 $13,625 $1,150,410 $1,222,980 6,943 30,392 2,566,040 3,767,031 5,750 8,765 9,532 136,017 776,058 41,124 31,500 $10,055 $44,017 $3,908,106 $5,807,101 $10,774 $14,808 $11,865 60 4,157 3,979 22,757 21,420 0 170,125 698,143 698,143 8,765 9,532 10,834 748,630 915,064 2,945,726 2,896,472 $10,055 33,183 213,750 1,995,565 10,055 33,183 3,159,476 4,892,037 $10,055 $44,017 $3,908,106 $5,807,101 64 City of Brooklyn Center Special Revenue Funds COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE For the Year Ended December 31, 1997 Housing and Economic Earle Brown Redevelopment Development Tax Increment Authority Authority Financing Fund Fund District Revenues Propertytaxes $121,575 $174,279 $1,515,487 Intergovernmental 18,304 lnvestment earnings 236,661 9,657 Miscellaneous 17,938 Total Revenues 139,879 428,878 1,525,144 Expenditures Personal services 168,740 Supplies 1,462 Services and other charges 874,782 2,269 Capital outlay 2,115,342 lnterest Total Expenditures 3,160,326 2,269 Excess or Deficiency of Revenues Over Expenditures 139,879 (2,731,448) 1,522,875 Other Financina Sources or Uses(-1 Proceeeds from sale of bonds Operating transfers in 577,895 Operating transfers out (139,879) (1,240,000) Total Other Financing 8ources or Uses(-) (139,879) 577,895 (1,240,000) Excess or Deficiency of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses 0 (2,153,553) 282,875 Fund Balances (Deficits) January 1 0 5,595,806 (843,222) Equity Transfers In Fund Balances (Deficits) December 31 $0 $3,442,253 ($560,347) 65 B-2 Tax Police City Increment Drug Community Initiatives District Foreiture Development Grant Totals No. 3 Fund Block Grant Fund 1997 1996 $402,545 $2,213,886 $2,610,666 1 $438,016 $74,602 530,922 73,043 7,321 $415 1,497 255,551 340,957 6,127 10,669 34,734 30,681 409, 866 6, 542 438, 016 86, 768 3, 035, 093 3, 055, 347 15, 054 183, 794 163, 480 2, 235 90 3, 787 102 54, 987 27, 335 959, 373 335, 340 11,106 2,126, 448 608, 875 0 34,914 54,987 2,235 53,585 3,273,402 1,142,711 354,879 4,307 438,016 33,183 (238,309) 1,912,636 577, 895 193, 524 (260,000) (438,016) (2,077,895) (1,373,524) (260,000) (438,016) (1,500,000) (1,180,000) 94,879 4,307 0 33,183 (1,738,309) 732,636 139,453 0 0 4,892,037 4,159,401 S, 748 5, 748 $234,332 $10,055 $0 $33,183 $3,159,476 $4,892,037 66 B-3 City of Brooklyri Center Housing and Redevelopment Authority Fund STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES 1N FUND BALANCE BUDGET AND ACTUAL For the Year Ended December 31, 1997 1997 Actual Over or Under(-) 1996 Budget Actual Budget Actual Revenues Property taxes $121,179 $121,575 $396 $120,481 I ntergovernmental 18, 304 18, 304 0 17, 345 Total Revenues 139,483 139,879 396 137,826 Other Financina Uses Operating transfers out (139,483) (139,879) (396) (137,826) Excess or Deficiency of Revenues over Other Financing Uses 0 0 0 0 Fund Balance January 1 0 0 0 0 Fund Balance December 31 $0 $0 $0 $0 67 B 4 City of Brooklyn Center Economic Development Authority Fund STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Year Ended December 31, 1997 1997 Actual Over or Under(-) 1996 Budget Actual Budget Actual Revenues Property taxes $173,750 $174,279 $529 $172,334 Investment earnings 105,000 236,661 131,661 339,104 Miscellaneous 17,000 17,938 938 30,681 Total Revenues 295,750 428,878 133,128 542,119 Ex�enditures Personal services 165,974 168,740 2,766 163,480 Supplies 300 1,462 1,162 102 Services and other charges 1,432,715 874,782 (557,933) 333,801 Capital outlays 1,726,000 2,115,342 389,342 608,875 Total Expenditures 3,324,989 3,160,326 (164,663) 1,106,258 Excess or Deficiency of Revenues over Expenditures (3,029,239) (2,731,448) 297,791 (564,139) Other Financina Sources Operating transfers in 398,454 577,895 179,441 193,524 r Total Other Financing Sources 398,454 577,895 179,441 193,524 Excess or Deficiency of Revenues and Other Financing Sources Over Expenditures (2,630,785) (2,153,553) 477,232 (370,615) Fund Balance January 1 5,595,806 5,595,806 0 5,966,421 Fund Balance December 31 $2,965,021 $3,442,253 $477,232 $5,595,806 68 B-5 City of Brooklyn Center Earle Brown Farm Tax Increment District Fund STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Year Ended December 31, 1997 1997 Actual Over j or Under(-) 1996 Budget Actual Budget Actual Revenues Propertytaxes $1,412,981 $1,515,487 $102,506 $2,180,251 Investment earnings 9,657 9,657 Total Revenues 1,412,981 1,525,144 112,163 2,180,251 Exoenditures Services and other charges 2,000 2,269 269 1,539 Interest 0 34,914 Total Expenditures 2,000 2,269 269 36,453 Excess or Deficiency of Revenues over Expenditures 1,410,981 1,522,875 111,894 2,143,798 Other Financina Uses (-1 Operating transfers out (1,240,000) (1,240,000) 0 (1,180,000) Total Other Financing Uses (1,240,000) (1,240,000) 0 (1,180,000) Excess or Deficiency of Revenues over Expenditures and Other Financing Uses 170,981 282,875 111,894 963,798 Fund Balance (Deficit) January 1 (843,222) (843,222) 0 (1,807,020) Fund Balance (Deficit) December 31 ($672,241) ($560,347) $111,894 ($843,222) 69 B-6 City of Brooklyn Center Tax Increment District No. 3 Fund STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Year Ended December 31, 1997 1997 Actual Over or Under(-) 1996 Budget Actual Budget Actual Revenues Property taxes $281,416 $402,545 $121,129 $137,600 Investmentearnings 7,321 7,321 1,853 Total Revenues 281,416 409,866 128,450 139,453 Expenditures Services and other charges 54,987 54,987 Total Expenditures 54,987 54,987 Excess or Deficienc of Y�) Revenues over Expenditures 281,416 354,879 73,463 139,453 Other Financina Uses (-1 Operating transfers out (260,000) (260,000) 0 Total Other Financing Uses (260,000) (260,000) 0 Excess or Deficiency of Revenues over Expenditures and Other Financing Uses 21,416 94,879 73,463 139,453 Fund Balance January 1 139,453 139,453 0 0 Fund Balance December 31 $160,869 $234,332 $73,463 $139,453 B_7 City of Brooklyn Center Police Drug Forteiture Fund STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Year Ended December 31, 1997 1997 Actual Over or Under(-) Budget Actual Budget Revenues Forfeited drug money $2,638 $6,127 $3,489 Investment earnings 415 415 Total Revenues 2,638 6,542 3,904 Exoenditures Supplies 2,638 2,235 (403) Total Expenditures 2,638 2,235 (403) Excess or Deficiency of Revenues over Expenditures 0 4,307 4,307 Fund Balance January 1 0 0 0 Equity Transfer In 5,748 5,748 Fund Balance December 31 $0 $10,055 $10,055 1 71 B City of Brooklyn Center Community Development Block Grant Fund STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES fN FUND BALANCE BUDGET AND ACTUAL For the Year Ended December 31, 1997 1997 Actual Over or Under(-) 1996 Budget Actual Budget Actual Revenues Intergovernmental Federal Grants $258,971 $438,016 $179,045 $55,698 Total Revenues 258,971 438,016 179,045 55,698 Other Financina Uses Operating transfers out 258,971 438,016 179,045 55,698 Excess or Deficiency of Revenues over Other Financing Uses 0 0 0 0 Fund Balance January 1 0 0 0 0 Fund Balance December 31 $0 $0 $0 $0 r t i i i 1 1 1 72 B-9 City of Brooklyn Center City Initiatives Grant Fund STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Year Ended December 31, 1997 1997 Actual Over or Under(-) Budget Actual Budget Revenues Intergovernmental $215,833 $74,602 ($141,231) Investment earnings 1,497 1,497 Miscellaneous 10,684 10,669 (15) Total Revenues 226,517 86,768 (139,749) Exaenditures Personal services 65,469 15,054 (50,415) Supplies 2,164 90 (2,074) Services and other charges 123,796 27,335 (96,461) Capital outlays 35,088 11,106 (23,982) Total Expenditures 226,517 53,585 (172,932) Excess or Deficiency of Revenues over Expenditures 0 33,183 33,183 Fund Balance January 1 0 0 0 Fund Balance December 31 $0 $33,183 $33,183 73 City of Brooklyn Center, Minnesota I DEBT SERVICE FUNDS The Debt Service Funds were established to account for the payment (from taxes and other resources) of interest and principal on long- term general obligation debt. This fund type utilizes the modified accrual basis of accountin Revenues are reco nized 9 9 in the accounting period in which they become available and measurable. Expenditures are recognized in the accounting period in which the principal and interest are due. The City's Debt Service Funds included in this section are: General Oblipation 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 accumulation of resources for payment of tax increment general obligation bonds and interest thereon. These bonds were sold to finance the purchase and redevelopment of the historic Earle Brown Farm and other various redevelopment projects within the City. Snecial Assessment Bonds Fund: This fund is used to account for the accumulation of resources for the payment of special assessment 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. 74 C City of Brooklyn Center Debt Service Funds COMBINING BALANCE SHEET December 31, 1997 General Tax Special Obligation Increment Assessment TAtals Bonds Bonds Bonds 1997 1996 ASSETS Cash and cash equivalents $82,056 $459,532 $620,540 $1,162,128 $788,921 Investments 1,025,004 1,025,004 1,268,333 Delinquent taxes receivable 0 2,085 Special assessments receivable: Deferred 1,509,789 1,509,789 774,989 Delinquent 4,010 4,010 6,556 Due from other funds 50,806 50,806 203,619 TOTALASSETS $82,056 $1,535,342 $2,134,339 $3,751,737 $3,044,503 LIABILITIES AND FUND BALANCES Liabilities: Accounts Payable $263 $126 $389 $389 Deferred revenue 1,513,799 1,513,799 783,630 Total Liabilities 263 1,513,925 1,514,188 784,019 Fund Balances: ReseNed for debt service $82,056 1,535,079 620,414 2,237,549 2,260,484 Total Fund Balances 82,056 1,535,079 620,414 2,237,549 2,260,484 TOTAL LIABILITIES AND FUND BALANCES $82,056 $1,535,342 $2,134,339 $3,751,737 $3,044,503 75 C-2 City of Brooklyn Center Debt Service Funds COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES For the Year Ended December 31, 1997 General Tax Special Obligation Increment Assessment Totals Bonds Bonds Bonds 1997 1996 Revenues Property taxes $136,425 Special assessments $253,169 $253,169 230,523 Intergovernmental $308,988 308,988 308,273 Investment earnings 28,056 $26,521 17,643 72,220 181,250 Total Revenues 337,044 26,521 270,812 634,377 856,471 Ex�enditures Principal 170,000 780,000 185,000 1,135,000 5,125,000 Interest 138,588 755,893 122,647 1,017,128 1,106,661 Fiscal agent fees 400 525 1,135 2,060 3,199 Total Expenditures 308,988 1,536,418 308,782 2,154,188 6,234,860 Excess or Deficiency of Revenues Over Expenditures 28,056 (1,509,897) (37,970) (1,519,811) (5,378,389) Other Financina Sources or Uses (-1 Proceeds from sale of bonds 54,000 9,818 63,818 7,766 Operating transfers in 1,500,000 230,440 1,730,440 5,360,000 Operating transfers out 0 (4,180,000) Total Other Financing Sources or Uses 54,000 1,500,000 240,258 1,794,258 1,187,766 Excess or Deficiency of Revenues and Other Sources over Expenditures and Other Uses 82,056 (9,897) 202,288 274,447 (4,190,623) Fund Balances January 1 1,544,976 715,508 2,260,484 6,451,107 Equity Transfer Out (297,382) (297,382) Fund Balances December 31 $82,056 $1,535,079 $620,414 $2,237,549 $2,260,484 76 City of Brooklyn Center, Minnesota CAPITAL PROJECTS FUNDS r The Capital Projects Funds are established to account for all resources used for the construction or acquisition of capital facilities by the City except those financed by Enterprise Funds. This fund type utilizes the modified accrual basis of accounting. Revenues are recognized in the accounting period in which they become available and measurable. Expenditures are recognized in the accounting period in which the related liability is incurred. The City's Capital Projects Funds included in this section are: Canital Reserve Emeraencv Fund: This fund was established in 1997 to account for monies held in reserve for catastrophic losses. r Canital Imnrovements 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 be 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. Municinal State Aid for Construction Fund: This fund was established to account for the state allotment of gasoline tax collections used for transportation related construction projects. Snecial Assessment Construction Fund: This fund was established to account for the resources and expenditures required for the acquisition and construction of capital facilities or improvements financed wholly or in part by special assessments levied against benefitted properties. i 77 D=1 City of Brooklyn Center Capital Projects Funds COMBINING BALANCE SHEET December 31, 1997 Municipal Capital State Aid Special Reserve Capital for Assessment Totals Emergency Improvements Construction Construction Fund Fund Fund Fund 1997 1996 ASSETS Cash and cash equivalents $315,767 $3,424,594 $643,916 $521,329 $4,905,606 $1,930,095 Investments 704,332 7,638,693 1,436,280 1,162,845 10,942,150 5,945,090 Accounts receivable 16,426 16,426 30,867 Special assessments: Deferred 669,338 669,338 928,756 Delinquent 4g,24p qg,2qp �g 4� 2 Due from other funds 41,656 449,998 84,946 576,600 812,091 Due from other governments 135,564 135,564 132,977 Advance to other funds 1,234,384 593,069 1,827,453 1,854,339 TOTAL ASSETS $1,061,755 $12,747,669 $2,893,775 $2,416,178 $19,119,377 $11,712,627 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $85,379 $4,817 $2,768 $92,964 $62,851 Contracts payable 79,008 74,128 146,885 300,021 724,560 Due to other funds 715,577 715,577 1,552,809 Accrued salaries and wages 28 251 2,298 2,577 1,987 Deferred revenue 104,150 715,578 819,728 1,140,145 Total Liabilities 164,415 183,346 1,583,106 1,930,867 3,482,352 Fund Balances: Reserved: Advances to other funds 1,234,384 593,069 1,827,453 1,854,339 Bond proceeds 7,564,900 7,564,900 Unreserved $1,061,755 3,783,970 2,117,360 833,072 7,796,157 6,375,936 Total Fund Balances 1,061,755 12,583,254 2,710,429 833,072 17,188,510 8,230,275 TOTAL LIABILITIES AND FUND BALANCES $1,061,755 $12,747,669 $2,893,775 $2,416,178 $19,119,377 $11,712,627 �8 r o_2 City of Brooklyn Center Capital Projects Funds COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES For the Year Ended December 31, 1997 Municipal Capital State Aid Special Reserve Capital for Assessment Emergency Improvements Construction Construction Totals Fund Fund Fund Fund 1997 1996 Revenues Special assessments $765,532 $765,532 $607,887 Intergovernmental $470,605 470,605 1,970,028 Investment earnings $61,755 $291,640 158,127 60,273 571,795 545,741 Miscellaneous 4,g27 4,g27 Total Revenues 61,755 291,640 628,732 830,732 1,812,859 3,123,656 Ex�enditures Personal services 3,684 26,823 174,482 204,989 230,369 Supplies 2,897 304 5,613 8,814 10,795 Services and other charges 215,220 190,462 122,989 528,671 1,219,967 Accounts receivable write-off 30,684 30,684 Capital outlay 226,660 716,693 990,784 1,934,137 3,744,117 Interest 50,090 50,090 140,642 Total Expenditures 479,145 934,282 1,343,958 2,757,385 5,345,890 Excess or Deficiency of Revenues Over Expenditures 61,755 (187,505) (305,550) (513,226) (944,526) (2,222,234) Other Financina Sources or Uses(-1 Proceeeds from sale of bonds 7,846,000 1,065,182 8,911,182 1,422,720 Operating transfers in 567,950 567,950 Operating transfers out (173,753) (173,753) Total Other Financing Sources or Uses 7,672,247 1,633,132 9,305,379 1,422,720 Excess or Deficiency of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses 61,755 7,484,742 (305,550) 1,119,906 8,360,853 (799,514) Fund Balances (Deficits) January 1 0 5,998,512 3,015,979 (784,216) 8,230,275 9,029,789 Equity Transfers In (Out) 1,000,000 (900,000) 497,382 597,382 Fund Balances December 31 $1,061,755 $12,583,254 $2,710,429 $833,072 $17,188,510 $8,230,275 79 S-3 City of Brooklyn Center i Capital Improvements Fund PROJECT-LENGTH SCHEDULE OF CONSTRUCTION PROJECTS From Beginning to December 31, 1997 Project Over(-) Under 1997 to Date Expended Project Appropriations Expenditures Expenditures Appropriations Fire training facility $95,000 $25,000 $95,000 $0 Pool ozonation system 38,500 3,093 3,093 35,407 Central garage improvements 1,133,624 1,151 1,235, 321 (101,697) Civic center remodelling 7,472 7,472 (7,472) East fire station project 1,106,000 37,711 37,711 1,068,289 0o West fire station project 2,449,000 152,108 152,108 2,296,892 Police station project 4,345,000 91,282 91,281 4,253,719 �I, Underground tank replacement 166,834 122,532 125,000 41,834 Park lighting improvements 31,320 8,112 31,320 p Totals $9,365,278 $448,461 $1,778,306 $7,586,972 i I i i S-4 City of Brooklyn Center Municipal State Aid for Construction Fund PROJECT-LENGTH SCHEDULE OF CONSTRUCTION PROJECTS From Beginning to December 31, 1997 Project Over(-) Under 1997 to Date Expended Project Appropriation Expenditures Expenditures Appropriations Humboldt Avenue improvements $507,486 $15,467 $555,019 ($47,533) 69th Ave., Shingle Creek Pkwy to Dupont Ave. improvements 1,744,298 28,608 1,649,783 94,515 France Ave., 69th Ave to North City Limits improvements 398,217 168,557 173,403 224,814 Miscellaneous sidewalk repairs 24,184 24,184 (24,184) Orchard Lane West improvements 34,349 54,926 54,926 (20,577) Brooklyn Boulevard improvements 207,090 5,449 210,155 (3,065) Earle Brown Drive overlay 2,754 2,754 (2,754) Xerxes, 53rd Avenue improvements 118,604 109,055 118,843 (239) Logan, James and Knox Avenues Neighborhood improvements 740,569 525,282 1,274,944 (534,375) Totals $3,750,613 $934,282 $4,064,011 ($313,398) S-5 City of Brooklyn Center Special Assessment Construction Fund PROJECT-LENGTH SCHEDULE OF CONSTRUCTION PROJECTS From Beginning to December 31, 1997 Project Over(-) Under 1997 to Date Expended Project A ropriations Expenditures Expenditures Appropriations Logan, James and Knox Avenues improvements $746,847 ($531,601) $236,792 $510,055 Orchard Lane East improvements 1,086,354 (129,988) 1,159,128 (72,774) Xerxes, 53rd Avenue improvements 47,962 (29,504) 47,962 0 Orchard Lane West improvements 2,017,610 1,743,262 1,795,841 221,769 France Ave., 69th Ave to North City Limits improvements 158,360 160,900 160,900 (2,540) 1996 improvement projects reforestation 26,258 27,328 27,328 (1,070) Bellvue neighborhood street improvements 988,789 24,870 24,870 963,919 St. AI's neighborhood street improvements 8,559 8,559 (8,559) 68th Avenue and Lee street improvements 2,151 2,151 (2,151) Totals $5,072,180 $1,275,977 $3,463,531 $1,608,649 i City of Brooklyn Center, Minnesota ENTERPRISE FUNDS The Enterprise Funds were established to account for the financing of self supporting activities of the City which render services on a user charge basis to the general public. Revenues and expenses in these funds are recognized on the accrual basis of accounting. Revenues are recognized in the accounting period in which they are earned and become objectively measurable. Expenses are recognized in the period incurred, if objectively measurable. The City's Enterprise Funds included in this section are: Munici�al Liauor Fund: This fund accounts for the operations of the City's three municipal off-sale liquor stores. Golf Course Fund: This fund accounts for operations of Centerbrook Golf Course, a 9 hole, par 3 course owned by the City. Earle Brown Heritaae Center Fund: This fund accounts for the operation of a pioneer farmstead which has been historically preserved and restored as a modern multipurpose facility. Its convention center can host conferences, trade shows, and concerts seating 1,000 people in either banquet or theater style. The "Inn On The Farm" is a bed and breakfast with ten rooms available to complement convention activities or be rented individually. Earle's, a unique special occasion restaurant, is also located at the "Inn on the Farm". Several of the barns have been restored as unique office settings which have found a niche in the market. Recvclina and Refuse Fund: This fund accounts for the operation of a state mandated recycling program. Expansion into refuse collection will take place only when there is a clear advantage to be achieved by it. Water Utilitv Fund: This fund accounts for the provision of water to customers. Administration, wells, water storage, and distribution are included. Sanitarv Sewer Fund: This 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 75% of this fund's expenses. Storm Drainaae Fund: This fund accounts for the operations and improvements of the storm water drainage system. It incorporates not only the storm sewer system, but also water structures such as holding ponds and facilities to improve water quality. Fees are based upon the amount of water running off a property and vary with both size and absorption characteristics of the parcel. 83 City of Brooklyn Center Enterprise Funds COMBINING BALANCE SHEET December 31, 1997 E. Brown Municipal Golf Heritage Liquor Course Center ASSETS Fund Fund Fund Current Assets: Cash and cash equivalents $176,308 $40,922 $152,655 I nvestm ents Accounts receivable net 1,500 241,586 Accrued revenue Special assessments receivable: Deferred Delinquent Due from other governments Inventories 295,971 5,879 23,001 Prepaid expenses 6,570 9,121 Total Current Assets 480,349 46,801 426,363 Fixed Assets: Mains and lines Structures 327,668 307,974 9,635,098 Equipment 133,191 21,175 929,871 La nd 107, 255 1, 391, 711 925, 000 Land improvements 17,062 77,450 585,176 1, 798, 310 11, 489, 969 Less: Accumulated Depreciation 278,073 127,124 2,396,827 Total Net Fixed Assets 307,103 1,671,186 9,093,142 Total Assets $787,452 $1,717,987 $9,519,505 LIABILITIES AND FUND EQUITY Current Liabilities: Accounts payable $93,360 $478 $165,311 Contracts payable Accrued salaries payable 10,646 979 34,025 Accrued vacation and sick pay 28,340 2,534 23,017 Accrued interest payable Due to other funds 385,000 Current portion of long-term debt 28,071 50,000 Total Current Liabilities 160,417 53,991 607,353 Long-Term Liabilities: Bonds payable Advances from other funds 56,313 1,100,000 Total Long-term Liabilities 56,313 1,100,000 Fund Equity: Contributions 636,886 8,889,506 Retained earnings (Deficits) Reserved: Debt service Special assessments Unreserved 570,722 (72,890) 22,646 Total Fund Equity 570,722 563,996 8,912,152 Total Liabilities and Fund Equity $787,452 $1,717,987 $9,519,505 84 E-1 Recycling Water Sanitary Storm 8� Refuse Utility Sewer Drainage Totals Fund Fund Fund Fund 1997 1996 $18,678 $1,017,745 $361,539 $46,794 $1,814,641 $1,769,461 41, 663 2, 270,120 806, 427 104, 375 3, 222, 585 4, 763, 372 12, 486 67, 655 170,122 51,104 544, 453 943, 417 28,704 140,468 314,096 131,619 614,887 369,475 84,059 5,008 237,007 326,074 325,550 3, 579 1, 094 4, 673 4, 376 80, 850 106, 321 187,171 234, 367 15, 530 340, 381 379, 059 126, 348 142, 039 159, 568 101, 531 3, 599,156 1, 864, 390 678, 314 7,196, 904 8, 948,645 r 11,361,915 8,815,214 4,566,823 24,743,952 21,852,447 4, 423, 311 2, 757,131 17, 451,182 17, 399,614 21, 767 14,124 4, 590 1,124, 718 1, 281, 475 23, 093 3, 388 287,158 2, 737,605 2, 738,600 2, 600 97,112 92, 954 15, 832, 686 11, 589, 857 4, 858, 571 46,154, 569 43, 365, 090 4,380,284 2,539,662 106,463 9,828,433 9,487,340 11, 452, 402 9, 050,195 4, 752,108 36, 326,136 33, 877, 750 $101,531 $15,051,558 $10,914,585 $5,430,422 $43,523,040 $42,826,395 $833 $45,117 $16,698 $321,797 $305,382 80, 388 3, 655 $67, 013 151, 056 140, 062 6, 395 3, 966 301 56, 312 55, 630 7, 503 5, 571 66, 965 59, 659 32, 994 32, 994 35, 835 385, 000 762, 005 165,000 243,071 181,886 833 139,403 29,890 265,308 1,257,195 1,540,459 1, 400, 000 1, 400, 000 1, 565, 000 1,156, 313 1, 234, 384 1, 400, 000 2, 556, 313 2, 799, 384 4,997,510 5,668,426 657,832 20,850,160 21,042,114 240, 390 240, 390 237, 595 87,638 5,008 238,101 330,747 329,926 100,698 9,827,007 5,211,261 2,628,791 18,288,235 16,876,917 100,698 14,912,155 10,884,695 3,765,114 39,709,532 38,486,552 $101,531 $15,051,558 $10,914,585 $5,430,422 $43,523,040 $42,826,395 85 City of Brooklyn Center Enterprise Funds COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN RETAINED EARNINGS For the Year Ended December 31, 1997 E. Brown Municipal Golf Heritage Liquo� Course Center Fund Fund Fund Ooeratina Revenues Sales and user fees $3,006,982 $354,380 $2,531,083 Cost of sales 2,295,705 39,906 363,271 Gross Margin 711,277 314,474 2,167,812 Ooeratina Exoenses Personal services 376,810 137,761 1,275,391 Su ppl ies 11, 903 23, 573 148, 935 Other services 42,742 49,432 481,211 Insurance 14,348 5,624 25,142 Uti I iti es 26, 558 11, 652 132, 645 Rent 38,133 43, 282 Dep reciation 24, 768 17, 251 379, 413 Total Operating Expenses 535,262 245,293 2,486,019 Operating Income (Loss) 176,015 69,181 (318,207) Nono�eratina Revenues or Exoenses(-1 Investment earnings 6,910 1,729 Special assessments I ntergovernmental Other revenue 8,644 Interest and fiscal agent fees (6,936) (57,500) (27,148) Total Nonoperating 8,618 (55,771) (27,148) Income (Loss) Before Operating Transfers 184,633 13,410 (345,355) Operating Transfers Out (100,000) Net Income (Loss) 84,633 13,410 (345,355) Depreciation on contributed assets that reduces contributed capital 348,738 Retained Earnings (Deficits) Jan. 1 486,089 (86,300) 19,263 Retained Earnings (Deficits) Dec. 31 $570,722 ($72,890) $22,646 86 E_2 Recycling Water Sanitary Storm Refuse Utility Sewer Drainage Totals Fund Fund Fund Fund 1997 1996 $210,070 $1,116,399 $2,251,684 $856,920 $10,327,518 $10,204,257 2, 698, 882 2, 565, 231 210,070 1,116,399 2,251,684 856,920 7,628,636 7,639,026 353,186 189,167 106,203 2,438, 518 2, 387, 977 86, 813 10, 340 303 281, 867 288,153 219,354 2�1,094 1,652,855 90,979 2,737,667 2,709,862 105 9, 874 3, 982 1,177 60, 252 67, 989 118,145 24, 733 313, 733 331,150 81,415 92,774 233, 746 187, 905 59, 634 902, 717 772, 031 219, 459 1, 002, 858 2, 068, 982 258, 296 6, 816,169 6, 649, 936 1 (9,389) 113,541 182,702 598,624 812,467 989,090 4,783 243,860 107,888 3,412 368,582 503,586 23,114 389 25, 319 48, 822 (6, 248 101,920 101,920 546 6, 056 15, 246 15,197 (89,257) (180,841) (190,342) 4, 783 267, 520 114, 333 41, 394 353, 729 322,193 (4,606) 381,061 297,035 640,018 1,166,196 1,311,283 (100,000) (100,000) (4,606) 381,061 297,035 640,018 1,066,196 1,211,283 348, 738 309, 772 105,304 9,533,584 4,919,234 2,467,264 17,444,438 15,923,383 $100,698 $9,914,645 $5,216,269 $3,107,282 $18,859,372 $17,444,438 r 87 City of Brooklyn Center Enterprise Funds COMBINING STATEMENT OF CASH FLOWS For the Year Ended December 31, 1997 E. Brown Municipal Golf Heritage Liquor Course Center Cash flows from ooeratino activities: Fund Fund Fund Operating income(loss) $176,015 $69,181 ($318,207) Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities: Depreciation 24,768 17,251 379,413 Changes in assets and liabilities: Receivables 1,137 196, 358 Inventories 32,618 1,621 4,429 Prepaid expenses 10,063 2,000 6,772 Payables 52,801 (2,497) (7,342) Accrued expenses 6,040 720 2,443 Accrued interest payable Other nonoperating income 8,644 Net cash provided by (used for) operating activities 312,086 88,276 263,866 Cash flows from nonca�ital financina activities: Proceeds from borrowings on advance Proceeds from borrowings on due to other funds Principal repayments on advance (26,886) Principal repayments on due to other funds (2pp,ppp) Interest paid on advance from other funds (6,936) (57,500) Interest paid on due to other funds (27,148) Operating transfers out (100,000) Net cash used for noncapital financing activities (133,822) (57,500) (227,148) Cash flows from capital and related financina activities: Capital contributions Acquisition and construction of capital assets (9,016) (98,512) Principal paid on revenue bonds Interest paid on revenue bonds Net cash used for capital and related financing activities ($9,016) 0 (98,512) Cash flows from investina activities: Investments purchased Investments sold or matured Interest on investments 6,910 1,729 Net cash provided by (used for) investing activities 6,910 1,729 0 Net increase (decrease) in cash and cash equivalents 176,158 32,505 (61,794) Cash and cash equivalents at beginning of the year 150 8,417 214,449 Cash and cash equivalents at end of the year $176,308 $40,922 $152,655 r 88 E Recycling Water Sanitary Storm 8 Refuse Utility Sewer Drainage Totals Fund Fund Fund Fund 1997 1996 ($9,389) $113,541 $182,702 $598,624 $812,467 $989,090 N 233,746 187,905 59,634 902,717 772,031 4,953 (62,558) (49,109) 109,146 199,927 35,113 10 38,678 (22,470) (1,306) 17,529 (16,357) (1) 110,848 (129,691) 3,291 27,409 (784,648) (8,970) 7,708 47 7,988 25,067 (2,841) (2,841) (1,925) 23,660 6,445 127,239 165,988 8,949 (4,437) 410,277 204,654 895,140 2,169,862 1,004,850 r o ,».00s (177,005) (203,891) (36,402) (200,000) (10,755) (64,436) (67,673) (27,148) (35,979) (100,000) (100,000) 0 0 0 (177,005) (595,475) (73,804) 156,784 156,784 354,085 (1,849,371) (911,299) (482,905) (3,351,103) (4,430,187) (155,000) (155,000) (110,000) (89,257) (89,257) (86,690) 0 (1,849,371) (911,299) (570,378) (3,438,576) (4,272,792) (30,568) (1,665,597) (563,884) (104,375) (2,364,424) (1,094,967) 34,196 2,779,833 1,091,182 3,905,211 4,665,015 4,783 243,860 107,888 3,412 368,582 503,586 8,411 1,358,096 635,186 (100,963) 1,909,369 4,073,634 3,974 (80,998) (71,459) 46,794 45,180 731,888 14,704 1,098,743 432,998 0 1,769,461 1,037,573 $18,678 $1,017,745 $361,539 $46,794 $1,814,641 $1,769,461 89 E-4 City of Brooklyn Center Municipal Liquor Fund COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS For the Year Ended December 31, 1997 1997 1996 Sales Liquor $966,551 $905,644 Wine 317,450 295,757 Beer 1, 536,179 1,462,664 Soft drinks 57,410 58,390 Other merchandise 129,392 127,852 Total Sales 3,006,982 2,850,307 Less: Cost of Sales 2,295,705 2,157,659 Gross Margin 711,277 692,648 O�eratina Exnenses Personal services 376,810 369,060 Supplies 11,903 11,499 Other services 42,742 47,425 Insurance 14,348 13,520 Utilities 26,558 24,506 Rent 38,133 35,936 Depreciation 24,768 22,745 Total Operating Expenses 535,262 524,691 Operating Income 176,015 167,957 Nono�eratina Revenue or Exoense(-1 Investment earnings 6,910 1,668 Other revenue 8,644 9,813 Interest and fiscal agent fees (6,936) (9,598) Total Nonoperating 8,618 1,883 Operating Transfers to General Fund 100,000 100,000 Net Income 84,633 69,840 Retained Earnings January 1 486,089 416,249 Retained Earnings December 31 $570,722 $486,089 90 E City of Brooklyn Center Golf Course Fund COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS For the Year Ended December 31, 1997 1997 1996 Oqeratina Revenues Green fees $268,808 $250,514 Rentals 12,555 10,374 Leagues 12,647 6,918 Golf lessons 8,692 8,271 Concessions 29,821 25,647 Merchandise 19,324 23,309 Pop machine 1,678 2,470 Miscellaneous 855 139 Total Operating Revenues 354,380 327,642 Less: Cost of Sales 39,906 34,221 Gross Margin 314,474 293,421 Operatina Exoenses Personal services 137,761 127,364 Supplies 23,573 20,672 Other services 49,432 39,536 I nsurance 5,624 6,451 Utilities 11,652 12,880 Depreciation 17,251 16,322 Total Operating Expenses 245,293 223,225 Operating Income 69,181 70,196 Nononeratina Revenue or Expense(-) Investment earnings 1,729 788 Interest and fiscal agent fees (57,500) (58,075) Total Nonoperating (55,771) (57,287) Net Income 13,410 12,909 Retained Earnings (Deficit) January 1 (86,300) (99,209) Retained Earnings (Deficit) December 31 ($72,890) ($86,300) 91 E; City of Brooklyn Center Earle Brown Heritage Center Fund COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS For the Year Ended December 31, 1997 1997 1996 Operatino Revenues Conventions $672,223 $757,860 Catering 1,467,157 1,469,046 Inn on the Farm 311,929 327,265 Office Rents 79,774 110,505 Total Operating Revenues 2,531,083 2,664,676 Less: Cost of Sales 363,271 373,351 Gross Margin 2,167,812 2,291,325 Operatinq Ex �enses Personal services 1,275,391 1,228,081 Supplies 148,935 159,216 Other services 481,211 457,471 Insurance 25,142 31,072 Utilities 132,645 148,684 Rent 43,282 56,838 Depreciation 379,413 333,384 Tota1 Operating Expenses 2,486,019 2,414,746 Operating Loss (318,207) (123,421) Nonoperatina Revenue or Exnense(-) Interest and fiscal agent fees (27,148) (35,979) Total Nonoperating (27,148) (35,979) Net Loss (345,355) (159,400) Depreciation on contributed assets that reduces contributed capital 348,738 309,772 Retained Earnings (Deficit) January 1 19,263 (131,109) Retained Earnings December 31 $22,646 $19,263 92 E-7 City of Brooklyn Center Recycling and Refuse Fund COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS For the Year Ended December 31, 1997 1997 1996 Operatinq Revenues Recycling service fees $210,070 $211,468 Oqeratina Exoenses Other services 219,354 219,356 Insurance 105 216 Total Operating Expenses 219,459 219,572 Operating Loss (9,389) (8,104) Nonoperatinq Revenues Investment earnings 4,783 5,102 Total Nonoperating 4,783 5,102 Net Loss (4,606) (3,002) Retained Earnings January 1 105,304 108,306 Retained Earnings December 31 $100,698 $105,304 r 93 E-8 City of Brooklyn Center Water Utility Fund COMPARATIVE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS For the Year Ended December 31, 1997 1997 1996 Operatina Revenues Service to customers $1,018,908 $1,049,352 Sale of ineters 14,400 24,884 Penalties 83,091 70,804 Total Operating Revenues 1,116,399 1,145,040 Oqeratina Expenses Personal services 353,186 354,630 Supplies 86,813 87,393 Contractual services 201,094 182,632 I nsurance 9, 874 10, 511 Utilities 118,145 124,005 Depreciation 233, 746 230,236 Total Operating Expenses 1,002,858 989,407 Operating Income 113,541 155,633 Nonoqeratina Revenues or Expenses(-) Investment earnings 243,860 283,215 Special assessments (for hookups delinquencies) 23,114 (6,924) Other 546 5,073 Total Nonoperating 267,520 281,364 Net Income 381 061 436, 997 Retained Earnings January 1 9,533,584 9,096,587 Retained Earnings December 31 $9,914,645 $9,533,584 9 4 E-9 City of Brooklyn Center Sanitary Sewer Fund COMPARATIVE STATEMENT OF REVENUES AND CHANGES IN RETAINED EARNINGS For the Year Ended December 31, 1997 1997 1996 Oqeratina Revenues Service to customers $2,251,684 $2,182,144 Operatina Exqenses Personal services 189,167 182,608 Supplies 10,340 8,515 Contractual services 107,466 129,272 Metropolitan Council Environmental Services 1,545,389 1,557,774 Insurance 3,982 4,738 Utilities 24,733 21,075 Depreciation 187,905 127,159 Total Operating Expenses 2,068,982 2,031,141 Operating Income 182,702 151,003 Nonoaeratinq Revenues Investment earnings 107,888 165,450 Special assessments (for hookups delinquencies) 389 676 Other 6,056 311 Total Nonoperating 114,333 166,437 Net Income 297,035 317,440 Retained Earnings January 1 4,919,234 4,601,794 Retained Earnings December 31 $5,216,269 $4,919,234 95 E-10 City of Brooklyn Center Storm Drainage Fund COMPARATIVE STATEMENT OF REVENUES, EXPENSES r AND CHANGES IN RETAINED EARNINGS For the Year Ended December 31, 1997 1997 1996 Operatina Revenues Service to customers $856,920 $822,980 Operatina Expenses Personal services 106,203 126,234 Supplies 303 858 Contractual services 90,979 76,396 Insurance 1,177 1,481 Depreciation 59,634 42,185 Total Operating Expenses 258,296 247,154 O eratin Income p g 598,624 575,826 Nonoqeratina Revenues or Expensef-) Investment earnings 3,412 47,363 Special assessments interest 25,319 Intergovernmental 101,920 Interest and fiscal agent fees (89,257) (86,690) Total Nonoperating 41,394 (39,327) Net Income 640,018 536,499 Retained Earnings January 1 2,467,264 1,930,765 Retained Earnings December 31 $3,107,282 $2,467,264 96 City of Brooklyn Center, Minnesota INTERNAL SERVICE FUNDS Internal Service Funds are used to account, on a cost reimbursement basis, for the financing of goods or services provided by one department to other departments of the City. Revenues and expenses in these funds are recognized on the accrual basis of accounting. Revenues are recognized in the accounting period in which they are earned and become measurable. Expenditures are recognized in the accounting period in which they are incurred. Public Emnlovees Retirement Fund: This fund provides 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 Garaae Fund; This fund was established to account for the acquisition and maintenance of all City vehicles and rolling stock equipment. Vehicle and equipment maintenance, repair, and replacement will be provided from rental rates which the Central Garage charges City operating departments for use of the equipment. 97 F_1 City of Brooklyn Center Internal Service Funds COMBINING BALANCE SHEET December 31, 1997 Public Employees Central Retirement Garage Totals ASSETS Fund Fund 1997 1996 Current Assets: Cash and cash equivalents $365,950 $1,216,641 $1,582,591 $1,174,494 Investments 816,266 2,713,766 3,530,032 3,617,686 Accounts receivable 2,398 1,762 4,160 5,603 I nvento ries 6, 090 6, 090 13,160 Total CurrentAssets 1,184,614 3,938,259 5,122,873 4,810,943 Fixed Assets: Equipment 4,778,894 4,778,894 4,696,440 Less: Accumulated Depreciation 2,286,861 2,286,861 2,265,422 Total Net Fixed Assets 2,492,033 2,492,033 2,431,018 TOTALASSETS $1,184,614 $6,430,292 $7,614,906 $7,241,961 LIABILITIES AND FUND EQUITY Current Liabilities: Accounts payable $11,678 $11,678 $96,564 Accrued salaries payable 6,404 6,404 6,070 Accrued vacation and sick pay 26,502 26,502 26,535 Accrued heatth insurance liability $1,218,229 1,218,229 1,047,920 Total Current Liabilities 1,218,229 44,584 1,262,813 1,177,089 Fund Equity: Contributions: Transfers from: General Fund 950,000 950,000 950,000 Debt Service Funds 1,335,437 1,335,437 1,335,437 Capital Projects Funds 8,078 8,078 8,078 Enterprise Funds 588,304 588,304 588,304 General Fixed Asset Account Group 585,854 585,854 763,307 Total Contributions 3,467,673 3,467,673 3,645,126 Retained Earnings (Deficits): Unreserved (33,615) 2,918,035 2,884,420 2,419,746 Total Fund Equity (Deficits) (33,615) 6,385,708 6,352,093 6,064,872 TOTA� �IABIL{TIES AND FUND EQUITY $1,184,614 $6,430,292 $7,614,906 $7,241,961 98 F City of Brooklyn Center Internal Service Funds COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN RETAINED EARNINGS For the Year Ended December 31, 1997 Public Employees Central Retirement Garage Totais Fund Fund 1997 1996 Ooeratina Revenues Billingstodepartments $1,106,021 $1,106,021 $1,406,660 Sales 76,509 76,509 93,357 Total Operating Revenues 1,1$2,530 1,182,530 1,500,017 Ooeratina Exaenses Personal Services $183,514 242,044 425,558 309,825 Supplies 222,057 222,057 239,093 Other Services 67,197 67,197 64,868 Insurance 28,084 28,084 34,691 Depreciation 442,416 442,416 438,846 Total Operating Expenses 183,514 1,001,798 1,185,312 1,087,323 Operating Income (Loss) (183,514) 180,732 (2,782) 412,694 Nonooeratina Revenue or Ex�ense (-1 Investment Earnings 69,149 220,854 290,003 273,415 Total Nonoperating 69,149 220,854 290,003 273,415 Net Income (Loss) (114,365) 401,586 287,221 686,109 Depreciation on contributed assets that reduces contributed capital 177,453 177,453 213,280 Retained Earnings January 1 80,750 2,338,996 2,419,746 1,520,357 Retained Earnings (Deficit) December 31 ($33,615) $2,918,035 $2,884,420 $2,419,746 99 F= City of Brooklyn Center Internal Service Funds COMBINING STATEMENT OF CASH FLOWS For the Year Ended December 31, 1997 Employee Central Retirement Garage Totals Fund Fund 1997 1996 Cash flows from o�eratina activities: Operating income (loss) ($183,514) $180,732 ($2,782) $412,694 Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities: Depreciation 442,416 442,416 438,846 Changes in assets and liabilities: Accounts receivable 648 795 1,443 7,966 Inventories 7,070 7,070 (3,115) Accounts payable (84,886) (84,886) (6,798) Accrued salaries and leave 301 301 5,043 Accrued health insurance liability 170,309 170,309 60,839 Net cash provided by (used for) operating activities (12,557) 546,428 533,871 915,475 Cash flows from caoital and related financino activities: Acquisition of fixed assets (503,431) (503,431) (885,116) Net cash used for capital and related financing activities (503,431) (503,431) (885,116) Cash flows from investinq activities: Investments purchased (598,898) (1,191,102) (1,790,000) (831,606) Investments sold or matured 632,382 1,245,272 1,877,654 1,268,508 Interest on investments 69,149 220,854 290,003 273,415 Net cash provided by investing activities 102,633 275,024 377,657 710,317 Net increase in cash and cash equivalents 90,076 318,021 408,097 740,676 Cash and cash equivalents at beginning oftheyear 275,874 898,620 1,174,494 433,818 Cash and cash equivalents at end of the year $365,950 $1,216,641 $1,582,591 $1,174,494 r i 100 City of Brooklyn Center, Minnesota GENERAL FIXED ASSET ACCOUNT GROUP The General Fixed Asset Account Group was established to account for the City's fixed assets which are not accounted for in an enterprise fund, and which are tangible in nature, have a life longer than the current fiscal year, and have a significant value. Depreciation is not recorded on those assets. 101 S= City of Brooklyn Center SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS BY SOURCE For the Year Ended December 31, 1997 January 1, December 31, 1997 1997 Balance Acquisitions Disposa�s Balance Investments in General Fixed Assets Land $2,369,801 $737 $2,369,064 Buildings and improvements 6,226,511 $486,600 102,824 6,610,287 Park improvements 3,279,047 8,112 36,600 3,250,559 Furniture 1,490,138 95,610 223,781 1,361,967 Departmental equipment 1,172,598 68,854 337,657 903,795 Total Investments in General Fixed Assets $14,538,095 $659,176 $701,599 $14,495,672 Sources of Investments Generallndebtedness $1,072,819 $281,101 $51,774 $1,302,146 General Fund revenues 5,569,919 219,338 268,800 5,520,457 Liquor store income 162,620 7,848 154,772 Contributions 230,423 11,120 219,303 Capital projects funds 6,712,838 158,737 323,957 6,547,618 Federal grants 789,476 38,100 751,376 t Total Sources of Investments $14,538,095 $659,176 $701,599 $14,495,672 102 S City of Brooklyn Center SCHEDULE OF GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY December 31, 1997 Buildings and Park Furniture and Function Land Improvements Improvements Equipment Total General government $648,332 $648,332 Government buildings $303,770 $5,933,923 $301,340 409,711 6,948,744 Public safety 105,189 862,647 967,836 Public works 119,983 119,983 Recreation 176,917 176,917 Parks 2,065,294 571,175 2,949,219 48,172 5,633,860 Totals $2,369,064 $6,610,287 $3,250,559 $2,265,762 $14,495,672 103 S City of Brooklyn Center SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY For the Year Ended December 31, 1997 Generai Fixed Genera! Fixed Assets Assets January 1, December 31, Function 1997 Additions Deductions 1997 General government $482,977 $165,355 $648,332 Government buildings 6,604,464 384,379 $40,099 6,948,744 Public safety 1,315,893 65,108 413,165 967,836 Public works 187,089 23,685 90,791 119,983 1 Recreation 259,261 3,988 86,332 176,917 Parks 5,688,411 16,661 71,212 5,633,860 Totals $14,538,095 $659,176 $701,599 $14,495,672 r 104 City of Brooklyn Center, Minnesota GENERAL L..ONG-TERM DEBT ACCOUNT GROUP The General Long-Term Debt Account Group was established to account for the City's unmatured general obligation long-term debt that is secured by the full faith and credit of the City and is not the primary obligation of an Enterprise Fund of the City. r 105 G City of Brooklyn Center COMPARATIVE STATEMENT OF GENERAL LONG-TERM DEBT December 31, 1997 December 31, 1997 1996 Amounts Available and to be Provided Amounts Available in Debt Service Funds $2,237,549 $2,260,484 Amounts to be Provided: From future tax levies 11,117,530 2,314,492 From future tax increments 10,889,921 11,660,024 From future gas tax allocations 2,125,000 2,295,000 Total Amounts Available and to be Provided $26,370,000 $18,530,000 General Lona-Term Debt Pavable General obligation bonds $10,025,000 $2,295,000 Tax increment bonds 12,425,000 13,205,000 General obligation special assessment bonds with governmental commitment 3,920,000 3,030,000 Total General Long-Term Debt $26,370,000 $18,530,000 r r r� 106 H City of Brooklyn Center SUMMARY OF DEBT SERVICE REQUIREMENTS TO MATURITY December 31, 1997 Total Debt General Obligation Bonds Tax Increment Bonds Special Assessment Bonds Service Requirements Year Principal Interest Principal Interest Principal Interest Principal Interest 1998 $180,000 $368,965 $840,000 $715,040 $265,000 $160,918 $1,285,000 $1,244,923 1999 515,000 471,588 1,165,000 662,232 405,000 162,076 2,085,000 1,295,896 2000 605,000 444,731 1,280,000 595,554 415,000 144,135 2,300,000 1,184,420 2001 635,000 414,646 1,450,000 519,409 415,000 125,529 2,500,000 1,059,584 2002 665,000 382,523 1,540,000 433,892 420,000 106,407 2,625,000 922,822 2003 695,000 348,416 1,645,000 340,413 425,000 86,644 2,765,000 775,473 2004 735,000 311,964 1,775,000 237,302 430,000 66,215 2,940,000 615,481 2005 780,000 272,730 360,000 171,123 440,000 44,961 1,580,000 488,814 2006 820,000 230,654 360,000 147,362 345,000 25,729 1,525,000 403,745 2007 540,000 196,640 385,000 122,585 260,000 11,005 1,185,000 330,230 2008 565,000 171,219 385,000 96,694 100,000 2,325 1,050,000 270,238 2009 595,000 144,100 400,000 70,200 995,000 214,300 2010 625,000 115,274 415,000 42,694 1,040,000 157,968 2011 655,000 84,710 425,000 14,344 1,080,000 99,054 2012 690,000 52,257 690,000 52,257 2013 725,000 17,762 725,000 17,762 $10,025,000 $4,028,179 $12,425,000 $4,168,844 $3,920,000 $935,944 $26,370,000 $9,132,967 107 City of Brooklyn Center, Minnesota STATISTICAL SECTION The statistical section presents comparative statistical data for the past ten years, and other pertinent information involving taxes, revenues, expenditures, bonded debt, property valuations, insurance coverage and miscellaneous statistics. This information is intended to be useful and of interest to investors in City bonds, financial institutions, and others interested in municipal government financial statistics. i 1 108 TABLE 1 City of Brooklyn Center GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION Last Ten Fiscal Years Fiscal General Public Public Community Parks and Economic Non- Admin. Services Totai Year Government Safety Works Services Recreation Development Departmentai Reimbursement Expenditures 1988 $1,768,607 $2,716,205 $1,768,918 $69,117 $1,706,516 $162,271 $310,475 ($487,257) $8,014,852 1989 1,793,495 3,103,222 1,754,800 81,043 1,814,391 168,305 347,315 (389,596) 8,672,975 1990 1,823,298 3,474,108 1,929,950 114,633 1,842,294 169,942 396,550 (472,004) 9,278,771 1991 1,869,394 3,950,862 1,964,441 104,706 1,881,910 177,179 414,149 (427,200) 9,935,441 1992 2,086,494 3,938,920 1,908,437 114,579 1,783,811 187,606 273,273 (602,846) 9,690,274 1993 1,787,179 3,870,563 1,996,256 41,325 1,999,270 178,703 300,803 (466,574) 9,707,525 0 1994 1,925,003 4,409,490 1,526,514 41,495 2,055,479 199,982 312,779 (528,684) 9,942,058 1995 2,069,978 4,598,618 1,653,358 41,146 2,226,121 209,576 289,747 (529,047) 10,559,497 1996 1,968,780 5,022,324 1,649,526 78,442 2,282,054 201,600 317,148 (611,534) 10,908,340 1997 $1,992,251 $5,089,072 $1,868,130 $79,800 $2,186,686 $248,779 $311,436 ($661,058) $11,115,096 Note: Table includes General Fund only. Source: City Finance Department Records TABLE 2 City of Brooklyn Center GENERALGOVERNMENTAL REVENUES AND OTHER FINANCING SOURCES BY SOURCE Last Ten Fiscal Years General Other Fiscal Property Licenses Intergovern- Charges for Court Financing Total Year Taxes Permits mental Services Fines Misc. Sources Revenue 1988 $3,398,656 $329,783 $3,078,491 $728,378 $243,952 $363,918 $337,871 $8,401,049 1989 3,325,101 365,247 3,628,255 734,571 278,812 425,356 176,505 8,933,847 1990 3,854,798 297,495 3,201,888 763,791 215,804 443,623 174,925 8,952,324 1991 4,274,089 311,751 2,926,570 881,213 202,090 360,800 877,477 9,833,990 0 1992 4,291,322 332,186 3,133,495 794,876 148,701 301,771 620,000 9,622,351 1993 5,006,710 300,480 3,167,214 838,883 140,104 279,211 295,000 10,027,602 1994 5,703,773 317,620 3,443,247 825,959 113,573 241,570 100,000 10,745,742 1995 5,946,363 318,202 3,543,009 822,530 178,263 271,509 100,000 11,179,876 1996 6,120,877 402,000 3,618,075 839,583 186,761 328,750 100,000 11,596,046 1997 $6,327,890 $485,232 $3,811,900 $757,640 $183,270 $458,831 $100,000 $12,124,763 Note: Table includes General Fund only. Source: City Finance Department Records TABLE 3 City of Brooklyn Center TAX LEVIES AND TAX COLLECTIONS Last Ten Fiscal Years Collections Percentage Collections of Current of Levy of Prior Total Delinquent Year's Taxes Collected Year's Taxes Collections Delinquent Taxes as Year During Fiscal During Fiscal During Fiscal Total as a% of Taxes a% of Collected Tax Levy Period Period Period Collections Tax Levy Receivable Tax Levy 1988 $3,576,812 $3,488,174 97.52% $13,090 $3,501,264 97.89% $105,521 2.95% 1989 3,505,850 3,418,111 97.50% 55,502 3,473,613 99.08% 84,948 2.42% 1990 4,092,978 3,857,576 94.25% 12,241 3,869,817 94.55% 221,097 5.40% 1991 4,670,606 4,478,115 95.88% 79,443 4,557,558 97.58% 249,882 5.35% 1992 5,072,385 4,818,439 94.99% 6,898 4,825,337 95.13% 351,199 6.92% 1993 5,491,707 5,204,161 94.76% (121,158) 5,083,003 92.56% 189,400 3.45% 1994 5,857,342 5,634,255 96.19% (176,148) 5,458,107 93.18% 246,311 4.21% 1995 6,501,197 6,367,437 97.94% (75,645) 6,291,792 96.78% 288,717 4.44% 1996 6,495,206 6,358,392 97.89% (11,917) 6,346,475 97.71 208,862 3.22% 1997 $6,746,487 $6,626,336 98.22% ($57,329) $6,569,007 97.37% $186,089 2.76% Total tax levy is net of Homestead and Agricultural Credit Aid. II Source: City Finance Department Records �■�r a� r a r► TABLE 4 City of Brooklyn Center ASSESSED VALUE AND ESTIMATED MARKET VALUE OF ALL TAXABLE PROPERTY (1) i Last Ten Fiscal Years 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Population 29,420 28,578 28,810 28,887 28,558 28,533 28,484 28,463 28,502 28,515 Real Property Assessed value(1): Tax Tax(2) Tax Tax Tax Tax Tax Tax Tax City: Capacity Capacity Capacity Capacity Capacity Capacity Capacity Capacity Capacity Residential $90,162,927 $11,834,805 510,133,274 $9,730,898 $9,193,012 $9,077,238 $9,110,096 $9,045,048 $9,485,333 $9,182,859 Non-residential 154,031, 355 19, 707,624 16,185,832 16,305, 868 16,013, 701 14,654,123 13,665,143 13,567,573 12,837,157 11,082,436 Area-wide allocation (8,148,681) (977,841) (1,365,235) (1,384,936) (1,550,097) (1,533.76n (954,616) (687,2951 (586,003) 226.287 236,045,601 30,564,588 24,953,871 24,651,830 23,656,616 22,197,594 21,820,623 21,925,326 21,736,487 20,491,582 Less Tax Increment District 9,784,473 2,097,505 1,540,518 1,315,724 1,374,157 1,184,328 1,165,933 1,230,055 1,495.154 1,665,054 Totalassessedvalue 226,261,128 28,467,083 23,413,353 23.336,106 22,282,459 21,013.266 20,654,690 20,695,271 20,241,333 18,826,528 Estimated Market Value 910,336.300 950,463,900 1.000,269,000 1,016,754,000 1,000,829,400 978,404,100 959,668,700 961,811,400 976,115,400 1,010,170,000 'I Personal Property Assessedvalue 4,510,313 190,299 530.526 539,121 543.237 549.751 622.500 622,500 573.984 502,668 N Estimated marketvalue 10,489,100 3,627,500 10.610,520 10,564,700 11,349,900 11,951,100 13,532,600 13,532,600 12,477,900 12,566,700 Total Taxable Property Assessed value 5230,771,441 $28,657,382 $23,943,879 $23,875,227 $22,825,696 $21,563,017 $21,277,190 $21,317,771 $20,815,317 $19,329,196 Estimatedmarketvalue $920,825,400 $954,091,4� $1,010,879,520 $1,027,318,700 $1,012,179,300 $990,355,200 $973,201,300 $975,344,000 $988,593,300 $1,022,736,700 Assessed Value as a percent of Estimated Market Value 25.06% 3.0096 2.37% 2.32% 2.26% 2.18% 2.19% 2.19% 2.��95 �.ggq5 Per Capita Valuations Assessed Value $7,844 $1,003 $831 $827 5799 $756 $747 $749 $730 $678 Estimated Market Value $31,299 $33,386 $35,088 $35,563 $35,443 $34,709 $34,167 $34,267 $34,685 $35,867 Source: City Assessing Department Records and Hennepin County (1) The Minnesota Legislature changed the property tax system for taxes payable in 1989. The tax base of property was changed from assessed values to tax capacity values. (2) The redudion in residential values is due to a change in the sWte mandated formula from gross tax capacity to net tax capacity. TABLE 5 City of Brooklyn Center DIRECT AND OVERLAPPING TAX RATES AND TAX LEVIES Last Ten Fiscal Years TAX RATES IN MILLS (1) Hennepin School Districts County Total Citv. School_ and Countv Year Vo-Tech No.286 No.279 No.281 No.11 Speciai No.286 No.279 No.281 No.11 Collectible City (2) 5chool Earl Brown Osseo Robbinsdale Anoka Districts Earl Brown Osseo Robbinsdale Anoka 1988 19.237 1.493 59.372 61.859 58.433 62.181 38.405 118.507 120.994 117.568 119.823 TAX RATES IN TAX CAPACITY RATES(2) 1989 14.260 1.223 43.440 54.465 49.189 51.384 32.898 91.821 102.846 97.570 98.542 1990 17.479 1.103 42.099 57.847 54.516 47.893 33.547 94.228 109.976 106.645 98.919 1991 19.208 1.046 46.207 58.643 55.540 51.779 37.479 103.940 116.376 113.273 108.466 1992 20.922 0.513 54.696 65.766 58.723 56.525 40.888 117.019 128.089 121.046 118.335 1993 23.969 1.095 67.008 64.948 61.807 63.717 42.457 134.529 132.469 129.328 130.143 1994 27.603 0.809 56.614 66.786 64.401 57.161 44.248 128.701 138.873 136.488 128.439 1995 31.090 76.861 70.142 67.197 61.402 45.370 151.763 145.044 142.099 136.304 1996 30.344 58.682 67.155 64.762 64.387 44.170 133.196 141.669 139.276 138.901 1997 32.875 56.260 62.666 63.757 55.588 42.174 131.309 137.715 138.806 130.637 w TAX LEVIES IN DOLLARS School Districts Hennepin County 8 Total City, Year Vo-Tech No.286 No.279 No.281 No.11 Special Schools, Collectible City (2) School Earl Brown Osseo Robbinsdale Anoka Districts and County 1988 $3,576,812 $307,506 $4,602,806 $3,782,157 $3,875,906 $1,537,601 $8,862,771 $26,545,559 1989 3,505,850 293,205 4,059,518 3,770,603 3,791,546 2,179,665 8,776,213 26,376,600 1990 4,092,978 244,258 3,718,102 3,171,054 4,028,724 1,099,641 8,052,590 24,407,347 1991 4,670,606 234,927 4,169,240 3,266,615 4,365,729 1,207,395 8,992,605 26,907,117 1992 5,072,385 123,029 4,596,776 3,516,409 4,444,416 1,293,144 8,344,678 27,390,837 1993 5,491,707 218,460 5,173,925 3,289,896 4,842,750 1,354,534 8,877,060 29,248,332 1994 5,857,342 $166,681 4,175,027 3,472,013 4,526,288 1,287,264 9,384,582 28,869,197 1995 6,501,197 5,367,479 3,288,144 4,814,025 1,269,585 8,557,035 29,797,465 1996 6,495,206 4,850,400 3,863,698 4,397,705 1,441,657 9,403,100 30,451,766 1997 $6,746,487 $4,472,206 $3,708,238 $3,899,126 $1,361,059 $8,854,518 $29,041,634 I Source: City Community Development Department Records and Hennepin County (1) The tax base of property was changed from assessed values to tax capacity values by the Minnesota Legislature in 1989. (2) Tax levy includes Brooklyn Center E.D.A. and H.R.A.. a� a� rr s �r r a� �■■f s TABLE 6 City of Brooklyn Center SPECIAL ASSESSMENT BILLINGS AND COLLECTIONS Last Ten Fiscal Years Percent Current Collections Total Special Percent Coltection Collections Year Assessment of of Prior Total to Current Collected Billings Amount Billings Years Collections Levy 1988 $556,028 $526,594 94.71 $2,723 $529,317 95.20% 1989 562,484 545,242 96.93% 59,944 605,186 107.59% 1990 504,682 476,874 94.49% 14,327 491,201 97.33% 1991 612,744 595,362 97.16% 23,135 618,497 100.94% -P 1992 558,265 533,439 95.55% 13,801 547,240 98.03% 1993 488,163 469,814 96.24% 21,188 491,002 100.58% 1994 466,784 444,670 95.26% 7,592 452,262 96.89% 1995 476,852 458,439 96.14% 5,497 463,936 97.29% 1996 485,019 459,316 94.70% 4,617 463,933 95.65% 1997 $498,022 $475,080 95.39% $2,470 $477,550 95.89% Source: City Finance Department Records TABLE 7 City of Brooklyn Center RATIO OF NET BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA Last Ten Fiscal Years Less: Ratio ot Net Net Gross Amounts Net Bonded Debt Bonded Fiscal Estimated Assessed Bonded in Debt Bonded to Assessed Debt Per Year Population Value Debt (1) Service Fund Debt Values Capita 1988 29,420 $230,777,441 $1,440,000 $751,408 $688,592 0.30% $23.41 Less: Ratio of Net Net Tax Gross Amounts Net Bonded Debt to Bonded Fiscal Estimated Capacity Bonded in Debt Bonded Tax Capacity Debt Per Year Population Value Debt (1) Service Fund Debt Value Capita 1989 28,578 28,657,382 1,130,000 274,843 855,157 2.98% 29.92 1990 28,810 23,943,879 950,000 448,846 501,154 2.09% 17.40 1991 28,887 23,875,227 610,000 486,205 123,795 0.52% 4.29 1992 28,558 22,825,696 310,000 504,146 (194,146) -0.85% (6.79) 1993 28,533 21,563,017 0.00% 1994 28,484 21,277,190 0.00% 1995 28,463 21,317,771 0.00% 1996 28,502 20,815,317 0.00% 1997 28,515 $19,329,196 $7,900,000 $82,056 $7,817,944 40.45% $274.17 I Source: City Finance Department Records and Hennepin County (1) Amount does not include tax increment, state aid street, special assessment, or revenue bonds. i i r i Table 8 City of Brooklyn Center COMPUTATION OF LEGAL DEBT MARGIN December 31, 1997 Market Value $1,022,736,700 Debt limit, 2% of market value 20,454,734 Total bonded debt 27,935,000 Deductions (See Note 6): Bonds: 1. Special Assessment Bonds 3,920,000 2. State Aid Street Bonds 2,125,000 3. Tax Increment Bonds 12,425,000 4. Utility Revenue Bonds 1,565,000 Total Deductions 20,035,000 Total Debt Applicable to Debt Limit 7,900,000 Legal Debt Margin, December 31, 1997 $12,554,734 Source: City Finance and Community Development Records 116 TABLE 9 City of Brooklyn Center COMPUTATION OF DIRECT AND OVERLAPPING DEBT December 31, 1997 City's Share Governmental Unit Gross Debt Sinking Funds Net Debt Percent Amount Direct Debt: City of Brooklyn Center (1) $7,900,000 $82,056 $7,817,944 100.0% $7,817,944 Overlapping Debt: School Districts: No.281 Robbinsdale 0 0 0 7.25% 0 No.11 Anoka 135,987,792 37,368,367 98,619,425 5.90% 5,818,546 No. 279 Osseo 132, 710, 000 23, 847,417 108, 862, 583 5.64% 6,139, 850 No. 286 Earl Brown 4,125,000 500,000 3,625,000 100.00% 3,625,000 Metropolitan Council 118,555,000 35,399,127 83,155,873 0.90% 748,403 Hennepin County 106,385,000 5,608,602 100,776,398 1.66% 1,672,888 V Hennepin County Park Reserve Dlstrict 12,225,000 2,555,472 9,669,528 2.22% 214,664 Total Overlao�ina Debt 509,987,792 105,278,985 404,708,807 18,219,350 Total Direct and Overlapping Debt $517,887,792 $105,361,041 $412,526,751 $26,037,294 Source: City Finance Department Records, Hennepin County, and I.S.D. 11, Anoka (1) Includes only general obligation debt which is being repaid through property taxes. Direct Overlapping Comparative Net Debt Ratios Charpeable to Citv Total Debt Debt Debt to tax capacity value $19,329,196 134.70% 40.45% 94.26% Debt to market value $1,022,736,700 2.55% 0.76% 1.78% Per capita debt, population 28,515 $913.11 $274.17 $638.94 r i TABLE 10 City of Brooklyn Center RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT TO TOTAL GENERAL FUND EXPENDITURES Last Ten Fiscal Years Debt Service Total Total as a Percent Debt General Fund of General Year Principal Interest Service Expenditures Expenditures 1988 $640,000 $682,561 $1,322,561 $8,502,109 15.56% 1989 635,000 626,068 1,261,068 9,062,571 13.92% 1990 530,000 585,992 1,115,992 9,434,517 11.83% 1991 940,000 746,401 1,686,401 9,935,441 16.97% 1992 1,880,000 1,195,204 3,075,204 9,690,274 31.73% 1993 1,710,000 1,186,585 2,896,585 9,707,525 29.84% 1994 780,000 1,080,555 1,860,555 9,942,058 18.71% 1995 825,000 1,075,976 1,900,976 10,559,497 18.00% 1996(1) 5,125,000 1,106,661 6,231,661 10,908,340 57.13% S 1997 $1,135,000 $1,017,128 $2,152,128 $11,739,733 18.33% Source: City Finance Department Records (1) Amounts for 1996 are higher because of the defeasance of the Tax Increment Bonds of 1985. 118 TABLE 11 City of Brooklyn Center SCHEDULE OF REVENUE BOND COVERAGE Last Ten Fiscal Years Net Non- Net Revenue Operating Operating Gross Revenue to Debt Year Revenue Revenue Revenue Expenses(1) Available Principal Interest Total Service Water Utilitv Fund 1988 $694,654 $375,061 $1,069,715 $695,395 $374,320 $45,000 $8,889 $53,889 6.946 :1 1989 687,982 425,030 1,113,012 665,629 447,383 45,000 7,180 52,180 8.574 :1 1990 696,147 440,644 1,136,791 604,497 532,294 45,000 5,425 50,425 10.556 :1 1991 703,422 390,421 1,093,843 697,108 396,735 45,000 3,695 48,695 8.147 :1 1992 896,857 316,551 1,213,408 762,405 451,003 45,000 1,940 46,940 9.608 :1 1993 848,134 311,781 1,159,915 659,099 500,816 0 0 0 N/A 1994 1,053,689 284,169 1,337,858 720,973 616,885 0 0 0 N/A 1995 1,048,834 302,136 1,350,970 813,157 537,813 0 0 0 N/A 1996 1,145,040 281,364 1,426,404 759,171 667,233 0 0 0 N/A 1997 $1,116,399 $267,520 $1,383,919 $769,112 $614,807 $0 $0 $0 N/A Storm Drainaae Fund (21 1991 $374,040 $2,628 $376,668 $164,767 $211,901 $0 $0 $0 N/A 1992 494,456 14,030 508,486 207,427 301,059 0 0 0 N/A 1993 639,837 28,138 667,975 160,044 507,931 0 0 0 N/A 1994 685,011 39,930 724,941 211,425 513,516 0 30,208 30,208 17.00 :1 1995 788,897 72,881 861,778 184,990 676,788 0 90,925 90,925 7.44 :1 1996 822,980 47,363 870,343 204,969 665,374 110,000 86,690 196,690 3.38 :1 1997 $856,920 $130,651 $987,571 $198,662 $788,909 $155,000 $89,257 $244,257 3.23 :1 Source: City Finance Department Records (1) Excludes depreciation and interest on bonds. (2) The Storm Drainage Fund was established in 1991. �r s r i TABLE 12 City of Brooklyn Center PROPERTY VALUE, CONSTRUCTION AND BANK DEPOSITS Last Ten Fiscal Years Commercial New Residential Construction Construction Property Value Bank Year Value Units Value Commercial Residential Non-Taxable Deposits 1988 $5,084,601 66 $3,073,500 $286,096,300 $634,230,700 $89,745,168 N/A 1989 7,288,205 4 278,138 321,452,800 678,898,700 83,719,768 $219,077,986 1990 5,750,567 1 65,249 333,967,220 676,912,300 83,719,768 202,261,488 1991 4,719,147 7 450,745 339,358,500 677,299,800 87,479,168 201,944,156 1992 5,547,668 14 948,810 344,860,700 667,318,600 107,747,100 199,800,971 N O 1993 7,598,108 7 505,000 322,295,300 668,059,900 108,955,700 200,539,494 1994 5,504,477 9 587,000 301,702,300 671,499,000 109,600,200 197,886,000 1995 9,541,847 2 153,000 297,268,000 678,076,000 110,458,200 $255,238,839 1996 12,527,095 18 1,126,000 284,786,600 703,806,700 108,473,400 N/A 1997 $10,905,475 3 $225,000 $287,163,000 $722,917,000 $111,226,700 N/A Source: City Finance Department Records, Community Development Department Records, and Local Banks. TABLE 13 City of Brooklyn Center PRINCIPAL TAXPAYERS December 31, 1997 Percentage 1997 of Total Market City Market Taxpayers Type of Business Valuation Value Dayton-Hudson Corp. Retail/Office $25,396,300 2.48% Talisman Brookdale, LLC Shopping Center 21,865,200 2.14% Ryan Construction Co. Office/Retail 14,727,600 1.44% Prudential Insurance Co. Office/Hotel 12,677,100 1.24% Lang-Nelson Apartments 12,440,000 1.22% Bradley Real Estate Inc. Retail 8,850,000 0.87% Sears Roebeck and Co. Department Store 7,810,000 0.76% J.C. Penny's Department Store 6,505,000 0.64% AMB Property, LP Industrial 5,975,600 0.51% Lutheran Brotherhood Industrial 4,835,700 0.47% Total Market Value $120,282,500 11.76% TOTAL CITY MARKET VALUE $1,022,736,700 Source: City Community Development Records 121 City of Brooklyn Center Table 14 SCHEDULE OF INSURANCE COVERAGE (Continued next page) Effective January 1, 1998 Policy Period Tvne of Coveraoe and Details From To Liability Limits I. Statutorv Liabilitv to Emnlovees a. Workers' Compensation 01-01-98 01-01-99 Statutory (participant in the League of Minnesota Cities Insurance Trust Self- Insured Workers' Compensation Program) II. Liabilitv to the Public a. Comprehensive general liability include the following additional coverages: (a) All employees as additional insureds (b) Personal injury coverage to include false arrest, libel, slander, wrongful entry or eviction or invasion of right of privacy. (c) Broad contractual liability (d) Products liability (e) Public Officials' liabiliry (1) Bodily injury 01-01-98 01-01-99 $750,000 combined single limit (2) Property damage 01-01-98 01-01-99 $750,000 combined single limit (3) Personal injury 01-01-98 01-01-99 $750,000 combined single limit b. Automobile liability, comprehensive 01-01-98 01-01-99 (1) Bodily injury $750,000 occurrence (2) Property damage $750,000 occurrence (3) Uninsured motorist $750,000 occurrence c. Liquor stores' dram shop 01-01-98 01-01-99 $1,000,000 each common cause d. Golf Course and Central Park 04-01-98 10-31-99 $1,000,000 each common liquor liability cause e. Personal accident, Volunteers 01-01-98 01-01-99 $100,000 accidental death $400/week short term disability $1,000 Medical 122 City of Brooklyn Center Table 14 SCHEDULE OF INSURANCE COVERAGE (Continued from prior page) Effective January 1, 1998 Buildings and Policy Period Structures Content: (Replacement (Replacement Type of Coverage and Details From To Cost) Cost) III. Insurance on City Property 01-01-98 01-01-99 a. Public and institutional property, all risk, blanket $34,748,000; $1,000 deductible replacement value on buildings. (1) CivicCenter $8,389,000 $1,199,000 (2) East Fire Station $722,000 $157,000 (3) Municipal Service Garage $2,461,000 $564,000 (4) Elevated Water Towers 3 locations $3,872,000 $0 (5) Park Shelter Buildings 17 locations $1,619,000 $57,000 (6) Pump Houses 10 locations $1,�00,000 $110,000 (7) Lift Stations 10 locations $1,170,000 $72,000 (8) Meter Station $18,000 $0 (9) Storage Building $446,000 $25,000 (10) Outdoor lighting systems 7 locations $320,000 $0 (11) Liquor Store and Fire Station $598,000 $336,000 (12) Humboldt Liquor Store $264,000 $183,000 (13) Leased Liquor Store $53,000 $183,000 (15) Pedestrian Bridge-2locations $1,198,000 $0 (16) Picnic Shelter $60,000 $0 (17) Earle Brown Heritage Center $7,724,000 $1,488,000 (18) Centerbrook Golf Course Club House $348,000 $25,000 (19) Centerbrook Golf Course Garage $38,000 $8,000 (20) Lions Park Concession Stand $38,000 $3,000 Liability Limits b. Boiler and machinery 01-01-98 01-01-99 $5,000,000 per accident c. Automotive physical damage 01-01-98 01-01-99 (1) Comprehensive ACV -$1,000 deductible (2) Collision ACV $1,000 deductible IV. Criminal Acts a. Faithful pertormance blanket position ;500,000 per loss b. Money and securities {broad form) Various c. Depositor'sforgery $1Q0,000 123 TABLEI5 City of Brooklyn Center DEMOGRAPHIC STATISTICS Last Ten Fiscal Years School Enrollments (2) Mpls-St.Paul No. 286 Fiscal Unemployment C.P.I. No.11 No.279 No.281 Earle Year Population (3) Rate (1) %(1) Anoka Osseo Robbinsdale Brown 1988 29,420 3.5% 5.0% 989 1,674 563 1,456 1989 28,578 3.5% 4.1 671 1,674 563 1,652 1990 28,810 3.2% 4.1 642 1,616 540 1,747 1991 28,887 4.6% 2.3% 807 1,680 521 1,327 1992 28,558 4.4% 1.4% 671 1,178 526 1,709 1993 28,533 4.3% 2.7% 691 1,106 540 1,685 1994 28,484 2.6% 2.7% 661 1,071 577 1,681 1995 28,463 2.9% 2.8% 664 1,113 567 1,645 1996 28,502 4.0% 3.3% 670 1,109 549 1,672 1997 28,515 3.3% 2.3% 680 1,111 586 1,701 (1) Source: Minnesota Department of Jobs and Training, Research and Statistics Dept. Twin Cities metro area average for year. (2) School enrollment data was supplied by the schools. (3) Source: Metropolitan Council 124 TABLE 16 City of Brooklyn Center (Continued MISCELLANEOUS STATISTICAL FACTS next page) December 31, 1997 Date of Incorporation February 14, 1911 Date of Adoption of City Charter November 8, 1966 Date City Charter Effective December 8 1966 Form of Government Council-Manager Fiscal Year Begins January 1 Area of City 8 1/2 square miles Miles of Streets: City 105.69 County 6.49 State 10.79 Miles of Storm Sewers 41.13 Number of Street Lights: Owned by N.S.P gpg Owned by City 102 Building Permits: Number Estimated Issued Cost 1997 796 $18,274,806 1996 607 16,647,400 1995 603 11,948,205 1994 607 13,418,453 1993 520 11,437,250 1992 573 14,286,465 1991 466 8,800,980 1990 504 8,035,605 1989 526 19,217,696 1988 554 10,846,987 City Employees as of December 31, 1997 Regular full-time 154 Temporary or part-time 155 Total 309 Fire Protection: Number of Stations 2 Number of Full-time Employees 1 Number of Volunteer Firefighters 29 Police Protection: Number of Stations Number of Full-time Employees 57 Number of Part-time Employees 14 125 City of Brooklyn Center TABLE 16 MISCELLANEOUS STATISTICAL FACTS (Continued from December 31, 1997 prior page) Parks and Recreation: Park property totals 522 acres developed to serve a wide variety of recreational interests. Area include playlots, playgrounds, playfields, trails, nature areas and an arboretum. Playgrounds 7 Park shelters 7 Ice skating rinks 7 Hockey rinks 5 Softball diamonds 26 Baseball diamonds 6 Tennis courts 18 Basketball courts 15 Municipal Water Plant: Number of connections 8,894 Average daily consumption in gallons 3,443,887 Peak daily consumption in gallons 8,681,000 Plant capacity gallons per day 17,652,000 Miles of water mains 114.45 Number of fire hydrants 957 Number of wells 9 Number of elevated reservoirs 3 Storage capacity in gallons 3,000,000 Water rate per thousand gallons $0.89 Municipal Sewer Plant: Number of connections 8,770 Miles of sanitary sewer 104.98 Daily disposal capacity in gallons 10,938,240 Number of lift stations 10 Residential rate per quarter $43.75 Municipal Liquor Stores (Off-sale): Number of owned stores 2 Number of leased stores 1 1997 sales $3,006,982 Elections Last General Election November 5, 1996 Registered voters 18,333 Votes cast 13,185 Percentage of registered voters voting 72% Last Municipal Election 1997 Registered voters 15,551 Votes cast 4,341 Percentage of registered voters voting 28% 126