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HomeMy WebLinkAboutCAFR-2004COMPREHENSNE ANNUAL FINANCIAL REPORT OF THE CITY OF BROOKLYN CENTER, MINNESOTA Michael J. McCauley City Manager Prepared By: DEPARTMENT OF FISCAL & SUPPORT SERVICES Daniel Jordet Director FOR THE YEAR ENDED DECEMBER 31, 2004 (Member of Government Finance Officers Associarion of the United States and Canada) . ~ Table of Contents INTRoDUCT4RY SECTIUN Letter of Transmittal 1 Table of Principal officials 6 Organizational Chart 7 FINANCIAL SECTIQN Independent Auditor's Report 9 Management's Discussion and Analysis 11 Basic Financial Statements: Statement of Net Assets 19 Statement of Activities 20 Governmental Funds Balance Sheet 24 Statement of Revenues, Expenditures and Changes in Fund Balance 26 Reconciliation of Statement 28 Proprietary Funds Statement of Net Assets 30 Statement of Revenues, Expenses and Changes in Fund Net Assets 32 Statement of Cash Flows 34 Notes to the Financial Statements 37 Required Supplementary Information: Budgetary Comparison Schedule-General Fund 71 Budgetary Comparison Schedule-Earle Brown Tax Increment District 77 Budgetary Comparison Schedule-Tax Increment District No. 3 78 Note A on Budgetary Compliance 79 Combining and Individual Fund Statements and Schedules: Nonmajor Governmental Funds Combining Balance Sheet 82 Combining Statement of Revenues, Expenditures and Changes 83 Subcombining Balance Sheet-Special Revenue Funds 87 Subcombining Statement ofRevenues-Special Revenue Funds 88 Special Revenue Funds-Housing and Redevelopment Authority 90 Special Revenue Funds-Economic Development Authority 91 Special Revenue Funds-Tax Increment District No. 4 92 i Special Revenue Funds-Police Drug Forfeiture Fund 93 Special Revenue Funds-Community Development Block Grant 94 Special Revenue Funds-City Initiatives Grant Fund 95 Subcombining Balance Sheet-Debt Service Funds 98 Subcombining Statement ofRevenue-Debt Service Funds 99 Subcombining Balance Sheet-Capital Project Funds 102 Subcombining Statement of Revenues-Capital Project Funds 104 Nanmajor Enterprise Funds Subcombining Statement of Net Assets 108 SL~bcombining Statement of Revenues, Expenses and Changes 109 Subcombining Statement of Cash Flows 110 Internal Service Funds Subcombining Statement of Net Assets 112 Subcombining Statement of Revenues, Expenses and Changes 113 Subcombining Statement of Cash Flows 114 STATISTICAL SECTION (unaudited} Government-wide Expenses by Function 116 Government-wide Revenues 118 General Governmental Expenditures by Function 120 General Governmental Revenues and Other Financing Sources by Source 121 Special Assessment Billings and Collections 122 Computation of Legal Debt Maxgin 123 Ratio of Annual Debt Service Expenditures for General Bonded Debt 124 Miscellaneous Statistical Data 125 Tax Levies and Tax Collections 127 Assessed Value and Estimated Market Value of All Taxable Property 128 Direct and Overlapping Debt Rates (per $1,440) and Tax Levies 130 Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt per Capita 132 Computation of Direct and Overlapping Debt 133 Principal Taxpayers 134 Property Value and Construction 13 5 Demographic Statistics 136 Schedule of Revenue Bond Coverage 137 Schedule of Insurance Coverage 138 ii A3E7 City of Brooklyn Center A Millennium Community June 23, 2005 Honorable Mayor and Members of the City Council City of Brooklyn Center Transmitted herewith is the Comprehensive Annual Financial Report of the City of Brooklyn Center for the fiscal year ended December 31, 2004. 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. These financial statements have been audited by HLB Tautges Redpath, Ltd. Their report is included in the financial section of this report. In addition, HLB Tautges Redpath is required to issue an opinion on the City's management and accounting for grant funds from the federal government. This "Single Audit" opinion, when included, is designed to meet the monitoring needs of federal grantor agencies. That report is issued in a separate letter. Profile of the City of Brooklyn Center The City of Brooklyn Center was incorporated in 1911 and is located in northern Hennepin County. The City has operated under the council- manager form of government since the adoption of the City Charter in 1966. The governing body is comprised of the Mayor and four Council Members elected at large. All members serve four -year terms with two of the Council Members standing for election during each national election year cycle. The Mayor and Council Members hire the City Manager who runs the daily operations of the City. The City of Brooklyn Center provides a full range of municipal services to its citizens. These include police and fire protection services, zoning enforcement, municipal planning, parks and recreation activities, construction and maintenance of streets, provision of water, sanitary sewer, stormwater and street lighting utilities. Community and economic development are facilitated through a Housing and Redevelopment Authority and an Economic Development Authority. - f he City also has internal departments providing human resources, engineering, financial management and information technology support to these various functions. The City operates a conference and meeting facility at the Earle Brown Heritage Center, municipal liquor, and a 9 hole golf course. 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center MN 55430 -2199 (763) 569 -3400 City Hall & TDD Number (763) 569 -3300 FAX (763) 569 -3434 FAX (763) 569-3494 www.cityofbrooklyncenter.org 1 Financia panning and contro for the City of Brookyn Center is based on the Annua Budget and the five-year Capita Improvement Program. Under Minnesota Statutes, a pre iminary property tax evy must be adopted no ater than September 15 of each year for the ensuing year's co ection. This estab fishes a maximum evy that may be subsequent y owered but not raised. Effective estab ishment of this evy requires a pre iminary budget be prepared. The City Manager prepares such a budget each summer and presents it to the City Counci in August, prior to the consideration of the pre iminary tax evy. In addition, the City Counci reviews the recommended rates and charges for enterprise funds and other operations on an annua basis as part of the budget process. Citizens receive a notice of proposed taxes in November based on the pre iminary evies estab fished by a taxing districts. Fo owing the receipt of this notice citizens are invited to pubic hearings known as Truth in Taxation hearings in each jurisdiction. The City's hearing inc udes information about the budget, the property tax evy and the priorities of the City Counci for the coming year as made evident by the budget a ocations. Pubic comment is heard at this hearing and the fina property tax evy is adopted at a subsequent meeting. This forms the basis for the budget preparation and presentation framework. In addition, a Capita Improvement Program is reviewed and revised during the budget process each year. This inc udes projects for which the City must issue debt and/or assess portions of the cost to adjacent or benefited property owners. Because there are invited funds avai ab e each year and the City does not wish to issue excessive amounts of debt, these projects must be reviewed and sometimes reprioritized as the Capita Improvement Program is deve oped each year. Economic Condition and Out ook The City of Brook yn Center is a northern suburb of the Minneapo is/St. Pau metropo itan area, adjacent to the City of Minneapo is and ocated 10 mi es from downtown Minneapo is. The City is who y within Hennepin County and encompasses an area of approximate y 8.5 square m es. The Mississippi River forms the City's eastern boundary. The City experienced its most rapid growth from 1950 to 1970 when the City's popu ation grew from 4,300 to its peak of 35,173. The 2000 Census data for the City was 29,172, a s fight increase from the 1990 Census data of 28,887. The number of housing units has remained stab e at 11,430 units, there were 11,704 housing units in 1990. The tots estimated market va ue of rea and persona properly within the City increased 7.55 in 2004 over 2003, 9.2% in 2003 over 2002 and 12.42% in 2002 z over 2001. Residentia va ues posted the argest gains going up over 10°/° in tots . Commercia /industria va ues are stab a for the 2003 to 2004 period refecting growth in industria va ues and dec fines in commercia va ues. Demand for starter homes has continued to drive up va ues of residentia property in the City. Major transportation routes in and through the City, inc uding tnterstates 94 and 694, and State Highway 100 and 252, have provided a continued impetus for deve opment of a strong commercia tax base in the City a ong and adjacent to these corridors. Commercia and industria properties comprised 35°/0 of the City's taxab a net tax capacity in 2004, down from 38°/o in 2003. This demonstrates the shift of tax burden from commercia industria to residentia with the phasing out of the invited market va ue aw. The argest commercia property in the City is Brookda a Ma , a 1,093,931 square-foot regions shopping center. Factors Affecting Financial Condition Major Events of 2004 and Loca Economy Brook yn Center is a mature,, deve oped suburb that is working to revita ize itse f. With its affordab a housing, exce ent schoo s, beautifu parks, and convenient .access, it has the potentia to continue to be a vibrant community for many years to come. The revita ization of Brook yn Center is proceeding on three tracks: re acement and renews of the commeraa areas of the Ci ~ re acement and p tY► p enhancement of its aging streets, uti ities, and parks; and the reinvigoration of nei hborhoods. 9 th The City continued its redeye opment effort ~n the Brook yn Bou evard and 69 Avenue area. This approximately 5.2 acre site contained some of the oiler commercia property a ong Brook yn Bou evard. A Super America convenience store gas station was constructed and opened to further enhance this commeraa area. A arge new d~sp ay and service fac qty for G oba office Furnishings was competed and opened at Shing a Creek Parkway and Freewa y Bou evard. ^rhe word head uarters of Car bou Coffee was com eted in the q p f ■ ■ . ■ Jos yn soy s d~str~ct .The tots of the three phases in the Jos yn project have added approximate y 400 jobs. As part of a p anned rep acement of the aging infrastructure, the City continued the program for street and uti ity improvements by reconstructing the Northport neighborhood streets. Whi a streets are rep aced, aging water, sanitary and storm sewer infrastructure is a so repaired or rep aced. These improvements are funded by genera ob igation improvement bonds supported with specia assessments against benefited properties, an operating transfer from the genera fund, and funds from the capita projects funds and uti ity enterprise funds. 3 About one twenty-fifth of the City's streets and uti ities are reconstructed each year, It is expected that this wi be a perpetua process, since at the end of twenty-five years, it wi be necessary to begin the process anew with the streets that were done first. An additiona benefit of these neighborhood projects has been the increased interest by residents and their efforts to paint, repair, andscape and further enhance their properties. The hos ita ity industry contributes a significant amount to Brook yn Center's p economy. Lodging tax again provided a most $ 345,000 for 2004 fisca year operations. Pans for a new hote to augment the success of the City-owned Ear a Brown Heritage Center conference and convention faci ity are under consideration. Infrastructure and Transportation Interstate 94 and Highway 100 improvements were substantia y comp eted and opened in 2004. Access to and from the retai and industria areas of Brook yn Center has been great y improved. In adc ition, improved traffic f ow has made routes throw h Brook yn Center much more p easant for the commuter. 9 Shing a Creek Parkway, a major intra-city corridor for commercia and industria traffic, wi be reconstructed from Northway Drive to Interstate 94 during 2005. Park fighting and sidewa ks wi a so be on the schedu a to improve the community infrastruct~.ire. Deve opment of uti ity rate mode s has improved the City's abi ity to generate cash f ow and schedu a improvements to the water and sewer systems. Separate funds for street fighting and stormwater drainage have a so he ped contro and prioritize infrastructure improvements and operations in these areas, Cash Management The City of Brook yn Center receives interest on a funds deposited by the City in its bank and investment accounts. During 2004 da y funds were moved to a "sweep" account paying interest on overnight deposits. The rate on this dai y sweep rose during 2004 from just under 0.90°/o per year to a rate at the end of the year in excess of 1.70°/o per year, This resu t was negotiated between the city and the bank in exchange far a s fight y higher ba ante being maintained in the operating account, Other funds were invested in various treasury securities and mortgage back securities considered acceptab a risks under the "prudent person" investment imitations of Minnesota Statutes. Longer term investments wi have a s fight y higher rate of interest compared to the overnight "sweep" rates of iquid cash. In addition, the City invests in the 4M and 4MP us funds sponsored by the League of Minnesota Cities. These accounts pay a return 4 higher than iquid cash but ower than treasuries and mortgage backed securities. The advantage of using these funds is iquidity. Treasury management requires a ba ance between the ava ab ity of cash and investment to obtain 'the highest return without undue risk of pubic assets. Acknow edQements This report has been prepared fo owing the guide Ines recommended by the Government Finance Officers Association of the United States and Canada. These guide fines assure that presentation of information on the city's financia condition conforms substantia y to the high standards of pub is financia reporting, inc uc ing genera y accepted accounting princip es promu gated by the Government Accounting Standards Board. The preparation and pub ication of this report wou d not have been possib e without the efficient work of the Finance staff of the City. We wou d ike to acknow edge a staff that contributed their efforts to the Finance operations in 2004 and thank them for their dedicated service. We wou d a so ke to thank the Mayor and City Counci for their support in promoting and maintaining the highest standards of professiona ism and management of the City of Brookyn Center's finances. .~i _ •u ub fitted, / ~ Michae J ey ~ Danie Jordet City Ma Director of Fisca & Support Services 5 CITY OF BROOKLYN CENTER, MINNESOTA PRINCIPAL QFFICIALS December 31, 2004 . Name Position Term of Office Term Expires ELECTED OFFICIALS Myrna Kragness Mayor Four Years December 31, 2006 Kathleen Carmody Council Member Four Years December 31, 2006 Kay Lasman Council Member Four Years December 3 1, 2004 Diane Niesen Council Member Four Years December 3 1, 2006 Robert Peppe Council Member Four Years December 31, 2004 APPOINTED OFFICIALS Michael J, McCauley City Manager Appointed Curt Boganey Assistant City Manager Appointed Charles LeFevre City Attorney Contractual Appointee Sharon Knutson City Clerk Appointed Scott Bechthold Police Chief Appointed Todd Blomstrom Director of Public Works/City Engineer Appointed Ronald Boman Fire Chief Appointed James Glasoe Community Activities, Recreation & Services Director Appointed Brad Hoffinan Community Development Director Appointed Daniel Jordet Director of Fiscal & Support Services Appointed 6 ~ n Center Organization City of BrpOk Y 200 Electorate . ~SS~onS pdvisorY COmm City Coun~~~ A~ ~nistration_ _ • Numan Resources ~num~agons C'~I Manager t , Information Techn°Io9Y • Elections City p~o~ey _ .Lice Clerk . .City i Enterer+Se • Liquor Kerita9e Center _ _ - ~ - Comrr►unity Acti$e~~~~~ and . • Earle Brown ent ecreation~ ~ pol ~ ~epa~'m ~R Pro9~ams - ~ ~ . Commun►tY rams .patrol . Recreat►°n P~ter J Pub. WQ~ . ►nvest'9ation .Community . ~,~me Prevention t guildin95 . En9~neerin9 _ unity PrOg~`ms ~ . Govemmen _ t Maintenance .Comm .Golf Course _ San ~~`1 Sewer . SuPP°~ $eN~~s ~ mend ~ Garo9e .Dispatch ' Com~►un►tYDe~ela~ . Cents er • Sto~'►r Se~► ~ lees .Mater Dega~ment _ ~U o ff, geN . . inspection peveloP►rent • Park N►ain~na~Ce . E~nom~ & RBdeVeloPment Authority ~ Fiscal and _ _ t . Housing - .Accounting . zon~n9 Fire ~e~a~'men ' . Audit . plann►n9 • Fire P~~ent~on .Utility B~11in ement _ ' • Fire ress~on ~Sk Nlana9 . Eme 9en y p~paredness ~ Assessing _ This page has been lets blank intentional/y. 8 i s i 1 I 1 ' Taut~es Redpath, Ltd. 0 ~erti~ied Pub is Accountants and ~onsu tarts . INDEPENDENT AUD~`OR'S REPORT s To the Honorable Mayor and Members of the City Council City of Brooklyn Center, Minnesota We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Brooklyn Center, Minnesota, as of and for the year ended December 31, 2004 g' which collectively comprise the City of Brooklyn Center, Minnesota's basic financial statements as listed in the table of contents. These financial statements are the responsibility i of the City of Brooklyn Center, Minnesota's management. Our responsibility is to express opinions on these financial statements based on our audit. u d au ' i ~ cc nce wit a d~ co t au dlt a rda u itin tan d ne a i th We nd c e r n o h g s dar 5 ge rally ccepted n e United States of America and the standards applicable to financial audits contained in ~overnrnent 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the 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 opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Brooklyn Center, Minnesota, as of December 31, 2004, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. 4810 White Bear Parkway White Bear Lake, Minnesota 55110 651 4~6 7000 65146 5004 Fax www.hlbtr.com 1303 South Frontage Road Suite 13 Hastings, Minnesota 55033 651480 4990 651 4~6 5004 Fax HLB Tautges Redpath, Ltd, is a member of ~ loteroational, a world-wide organizatioo of accounting firms and business advisors. 9 r In accordance with GovernmentAut~iting Stanc~ards~, we have also issued our report dated April X 5, 2005 on our consideration of the City of Brooklyn Center, Minnesota's internal control over financial reporting and an our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other-matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and 3 compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in conjunction with this report in considering the results of our audit. r The Management's Discussion and Analysis and the budgetary comparison information as listed in the table of contents, are not a required part of the basic financial statements but are supplementary information required accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. however, we did not audit the information and express no opinion on it. fur audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Brooklyn Center, Minnesota's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and schedules, supplementary financial information and statistical tables are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules and supplementary financial information have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and statistical tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. ~ C r HLB TAUTGES REDPATH, LTD. White Bear Lake, Minnesota April 15, 2U05 10 MANAGEMENT'S DISCUSSION AND ANALYSIS As management of the City of Brooklyn Center, we offer readers of the City of Brooklyn Center's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2004. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 1 through 5 of this report, Financial Hi~hli~hts • The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $ 98,553,058 {Net assets). Of this amount, $ 3,224,051 {unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors in accordance with the City's fund designations and fiscal policies. • The City's total net assets increased by $ 6,785,794. • As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $ 50,919,474, Of this total amount, $ 41,844,901, or 82°lo is designated or reserved through legal restrictions and City Council authorization. • At the end of the current fiscal year the general fund balance of $ 4,969,449 included $ 106,578 reserved and $ d, 862, 871 designated, ~ The City's total outstanding debt increased by $ 22,030,000 during the current fiscal year, from $17,380,000 to $ 39,410,000. Overview of the Financial Statements The discussion and analysis are intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements comprise three components: 1}government-wide financial statements, 2} fund financial statements, ar~d 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves, Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to aprivate-sector business, The statement of net assets presents information on all of the City's assets and liabilities, with the difference between the two reported as net assets, Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash slows, Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods {e.g. uncollected taxes and earned but unused vacation leave}. Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues {governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges {business-type activities), The governmental activities of the City of Brooklyn Center include general government, public safety, public works, community services, recreation and economic development. The business-type activities 11 Management's Discussion and Analysis of the City include water and sewer, street lighting, liquor operations, golf course, convention center, storm drainage and recyclinglrefuse. The government-wide financial statements can be found on pages 19 through 21 of this report. Fund Financial statements. A fund is a ,grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spend- able resource, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financial requirements. Because the focus of governmental funds is narrower than that of the government-wide f nancial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statement. By doing so, readers may better understand the long-term impact of the City"s near term financial decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures, and change in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains 5 individual major governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General fund, the Earle Brown TIF District special revenue fund, TIF District No. 3 special revenue fund, the Special Assessment Bonds debt service fund and the Infrastructure Construction capital projects fund, which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The City adopts an annual appropriated budget for its general and special revenue funds. A budgetary comparison statement has been provided for those funds to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 24 through 28 of this report. Proprietary funds. The City maintains six enterprise funds as its one type of proprietary fund. Enterprise funds are used to report the same functions presented as business-type activities in the governmental-wide financial statements. The City uses enterprise funds to account for its municipal liquor, golf course, Earle Brown Heritage Center, water, sanitary sewer, and storm drainage operations. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail, The proprietary fund financial statements provide separate information for the municipal liquor, golf course, Earle Brown Heritage Center, water, sanitary sewer, storm drainage operations, street lighting, and recyclinglrefuse. The basic proprietary fund financial statements can be found on pages 30 through 35 of this report. 12 Management's Discussion and Analysis Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government wide and fund financial statements. The notes to the financial statements can be found on pages 37 through 70 of this report. Uther information. The combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds are presented immediately following the required supplementary information on budgetary comparisons. Combining and individual fund statements and schedules can be found on pages 71 through 114 of this report. Government-wide Financial Analvsis As noted earlier, net assets may serve over time as a useful indictor of a government's financial position. In the case of the City, assets exceeded liabilities by $ 98,553,058 at the close of the most recent fiscal year. The largest portion of the City's net assets 48,777,3dG or 49 percent} reflects its investment in capital assets (e.g. land, buildings, machinery, and equipment} less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. CITY'S NET ASSETS Governmental Activities Business-type Activities Total 2004 2403 2004 2003 2004 2003 Current and other assets $ 63,573,375 $ 36,422,171 $ 7,948,797 $ 8,334,766 $ 71,522,172 $44,756,937 Capital assets 34,583,271 31,739,661 36,359,095 38,348,615 70,942,366 70,088,276 Total assets 98,156,646 68,161,832 44,307,892 46,683,381 142,464,538 114,845,213 Long-term liabilities outstanding 31,770,886 14,193,227 - 230,000 31,770,886 14,423,227 Other liabilities 11,099,015 6,564,288 1,041,579 2,090,434 12,140,594 8,654,722 Total liabilities 42,869,901 20,757,515 1,041,579 2,320,434 43,911,480 23,077,949 Net assets; lnvested in capital assets, net of related debt 12,648,271 14,733,123 36,129,095 37,898,615 48,777,366 52,631,738 Restricted 39,412,423 14,853,260 - - 39,412,423 14,853,260 Unrestricted 3,226,051 17,817,934 7,137,218 6,464,332 10,363,269 24,282,266 Total net assets $ 55,286,745 $ 47,404,317 $ 43,266,313 $44,362,947 $ 98,553,058 $ 91,767,264 A portion of the of the City of Brooklyn Center's net assets represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets 3,226,051) may be used to meet the City's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City of Brooklyn Center is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business-type activities. Current assets increased significantly in the Governmental Funds due to the sale of Tax Increment Bonds in the amount of $ 17,245,000 and the sale of refunding bonds in the amount of $ 7,515,000. The Tax Increment Bonds will be used in the acquisition and redevelopment of properties in Tax Increment District No, 3. The refunding bonds will be used to lower the interest cost on the 1994 Police and Fire Bonds and the 1995 Tax Increment Bonds. By issuing new bonds at a lower rate of interest and using those proceeds to pay off the higher rate callable bonds the City will be able to lower its expected property tax levy for bond payments. 13 Management's Discussion and Analysis Similarly, long-term liabilities rose with the sale of the tax increment and refunding bonds. Those amounts will self correct when the refunding issues pay off the outstanding debt of the callable refunded issues in February of 2005. This carries through also to the restricted assets increase in the Governmental Funds. Other liabilities in the Business-type activities decreased with the final transfer of amounts due for payment of contracted infrastructure construction projects. Governmental Activities Government activities resulted in an increase of the City's net assets by $ 7,882,428, while the overall increase totaled $ 6,185,194. Key elements of the increase are as follows: CITY'S CHANGES IN NET ASSETS Governmental Activities Business-type Activities Total 2004 2003 2004 2003 2004 2003 Revenues: Program revenues: Charges for services $ 1,644,583 $ 1,827,?16 $ 9,06?,849 $ 8,974,412 $10,712,432 $10,802,128 Operating grants and contributions 933,104 1,627,020 - - 933,104 1,627,020 Capital grants and contributions 2,423,411 1,0?9,134 - - 2,423,411 1,079,134 General revenues: Property taxes 12,124,040 10,407,613 - - 12,124,040 10,407,613 Other taxes 4,218,209 4,189,148 - - 4,218,209 4,189,148 Grants and contributions not restricted to specific programs 923,3?4 1,413,913 - - 923,374 1,413,913 Gain on sale of assets 29,202 13,9?6 - - 29,202 13,976 Unrestricted investment earnings 491,524 426,329 102,696 82,165 594,220 508,494 Other 660,218 588,264 11?,864 241,308 778,082 829,572 Total revenues 23,447,665 21,573,113 9,288,409 9,297,885 32,736,074 30,870,998 Expenses: General government 2,?25,137 2,565,088 - - 2,725,137 2,565,088 Public safety 7,538,2?7 7,184,536 - - 7,538,277 7,184,536 Public wanks 2,482,819 3,002,223 - - 2,482,819 3,002,223 Community services 47,324 225,365 - ~ d?,324 225,365 Parks and Recreation 2,255,231 2,169,482 - - 2,255,231 2,169,482 Economic development 1,483,025 1,759,585 - - 1,483,025 1,759,585 Nondepartrnerrtal 818,234 657,174 - - 818,234 657,174 Municipal liquor - - 939,244 724,897 939,244 724,89? Golfcourse - - 2? 1,127 294,990 271,127 290,990 E. Brawn HeritageCenter - - 2,184,229 2,109,166 2,184,229 2,109,166 Recycling and refi~se - - 222,821 223,679 222,821 223,679 Water utility - - 1,533,923 1,645,955 1,533,923 1,645,955 Sanitarysewer - - 2,310,645 2,56?,032 2,310,645 2,567,032 Storm drainage - - 756,593 838,421 756,593 838,421 Street light utility - - 165,651 147,293 165,451 147,293 Total expenses 17,570,047 17,563,453 8,384,233 8,547,433 25,954,280 26,114,886 Increase in net assets before transfers 5,877,618 4,009,660 908,176 754,452 6,785,794 4,?64,112 Transfers 2,404,814 100,400 {2,004,810) (100,004) - Increase in net assets ?,882,428 4,109,660 (1,096,634) 654,452 6,785,794 4,760,112 Net assets -January 1 47,404,317 43,294,65? 44,362,947 43,712,495 91,767,264 87,047,152 Net assets -December 31 $ 55,286,745 $ 47,444,31? $ 43,266,313 $44,362,947 $ 98,553,458 $ 91,767,264 14 Management's Discussion and Analysis In the Governmental Activities, property taxes produced an additional $1,714,427. when combined with the transfer of funds from the Business-type Activities for repayment of infrastructure construction expenditures, net assets increased by $ 7,882,428 in Governmental Funds in 2004. The total increase in the rate of net asset accumulation is primarily the result of the property tax increase. Below are specific graphs which provide comparisons of the governmental activities revenues and expenditures: Governmental Activities - 2004 Revenues Unrestricted investment earnings 1.5% Other revenues Charges for services Court fines 2'8% 7.0% 1.3% Operating grants and °i contributions 15.9% '~v, F Property taxes and Special Assessments J 71.5% Governmental Activities - 2044 Expenses Interest onlong-term Nondepartmental debt 8.6% General government 5.1% 14.7% K Community service and recreation -f r 12.3% Public safety 37.7% Public works 21,7% 15 Management's Discussion and Analysis Business-tvpe activities Business-type activities decreased net assets by $ 1,096,434, Below are graphs showing the business-type activities revenue and expense comparisons: Business-Type Activities - 2004 Revenues Unrestricted investment earnings Qther Revenues 0.9% 2.6% . . s ~ . ' ' ~ ~ ~ ,n x 1f ~ ~ ¢ z~ ~ ~ Net Chazges for services 96, 5% Business-Type Activities - 2004 Expenses Heritage Center Sewer 26.9% ~ ~ ` ~°h' ` 32.8% ,i/ t it nZr pp Q n , , Storm Drainage 10.7% Minor Enterprise Water 4.8% Golf Course 210% 3,7% The Business-type activities transferred $ 2,004,810 in net assets to the Governmental activities to reimburse Capital Project Funds for utility portions of infrastructure construction costs. Financial Analvsis of the Government's Funds Governmental Funds. The focus of the City's governmental funds is to provide information on nearwterm inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's 16 Management's Discussion and Analysis financing requirements. In particular, unreserved fund balance may serve as useful measure of a government's net resources available for spending at the end of the fiscal year. At the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $ 50,919,674. Approximately 26% of this amount 13,337,118} is reserved because it has already been committed 1) to provide for debt service 13,230,540), 2) loans receivable 105,074), and 3) for prepaid items 1,504). The unreserved fund balance of $ 37,582,556, includes designations for 1) general fund working capital 6,862,871), 2) Special Revenue Funds for housing development ($17,173,101), and 3}capital improvements 4,491,811). The balance is undesignated and unreserved 9,054,?73). The general fund decreased by $ 1,047,631 in 2004 due to transfers of fund balance to capital projects and technology reserves. The Earle Brown TIF District fund decreased by $ 173,124. This decrease was lower than the budgeted decrease of $ 413,733 in 2004 because tax increments were higher than expected. The TIF District No. 3 fund increased by $19,752,382 in 2004 primarily because of the sale of $17,245,000 in bonds for TIF eligible development expenses. Those funds are carried in their entirety as of December 31, 2004 but will be spent for acquisition and development of properties within the district over the next three years. The Special Assessment Bonds fund increased by $ 209,774 in 2004 because some required assessments were paid in advance. The Infrastructure Construction fund increased by $ 248,51 d in 2004 largely because of reimbursements accumulated over time in capital improvement projects and the net proceeds of an improvement bond issue. Proprietary funds, The City's proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The unrestricted net assets in the respective major proprietary funds are the municipal liquor fund - $ 996,648, golf course - $ {777,406), Earle Brown Heritage Center - $ 669,593, water utility - $ 2,274,717, sanitary sewer - $ 2,231,992 and storm drainage - $ 1,334,440. The municipal liquor, golf course, Earle Brown Heritage Center, water utility, sanitary sewer and storm drainage funds had increases (decreases) in net assets in 2004 of $ (60,329), $18,233, $ (646,594), $ (549,278), $ 64,797, and $ 90,588, respectively. Capital Asset and Debt Administration Capital assets, The City's investment in capital assets for its governmental and business type activities as of December 31, 2004, amounts to $ 70,942,346 (net of accumulated depreciation}. This investment in capital assets includes land, buildings, infrastructure, machinery and equipment, CITY'S CAPITAL ASSETS {net of depreciation Governmental Activities Business type Activities Total 2004 2003 2004 2003 2004 2003 .Land (not depreciated) $ 3,203,904 $ 3,203,904 $ 3,19?,342 $ 3,197,342 $ 6,401,246 $ 6,401,246 Land improvements - 287,292 368,088 287,292 368,088 Construction in progress 3,?31,004 927,629 - - 3,731,004 927,629 Buildings and structures 13,381,007 14,040,653 10,060,390 12,120,833 23,441,397 26,161,486 Departmental equipment 2,204,854 2,435,047 147,259 327,863 2,352,113 2,762,910 Other park improvements 1,058,974 1,145,575 - - 1,058,974 1,145,575 Streets 11,003,528 9,986,853 - - 11,003,528 9,986,853 Mains and lines - - 22,666,812 22,334,489 22,666,812 22,334,489 Total $ 34,583,271 $ 31,739,661 $ 36,359,095 $ 38,348,615 $ 70,942,366 $ 70,088,276 17 Management's Discussion and Analysis Long-term debt. At the end of the current fiscal year, the City had long-term bonded debt outstanding of $ 39,410,000, an increase of $ 22,030,000 from 2003. Of the total outstanding, $ 11,025,000 is for general obligation bonds, $ 22,445,000 for tax increment bonds and $ 5,710,000 for special assessment bonds. An additional $ 230,000 of storm sewer revenue bonds is outstanding at year end in the business-type activities Additional long-term liabilities include $ 857,805 for compensated absences. This is the accumulated vacation and sick leave available but not used by employees at the end of 2004, City's Outstanding Debt General Obligation Improvement Bonds, General Obligation Tax Increment Bonds, Long-Term Notes and Compensated Absences Governmental Activities Business-type Activities Total 2004 2003 2004 2003 2004 2003 General obligation bonds $11,025,000 $ b,720,000 $ - $ - $ 11,025,000 $ b,720,000 General obligation tax increment increment bonds 22,445,000 4,505,000 - - 22,445,000 4,505,000 General obligation special assessment bonds 5,710,000 5,705,000 - - 5,710,000 5,705,000 General obligation revenue bonds - - 230,000 450,000 230,000 450,000 Compensated absences SS7,305 783,227 - - 857,305 783,227 Total $ 40,037,305 $17,713,227 $ 230,000 $ 450,000 $ 40,2b7,305 $ 18,1b3,227 The City maintains an Al rating from Moody's. State statutes limit the amount of general obligation debt a Minnesota city may issue to 2% of total Estimated Market Value. The current debt limitation for the City is $ 39,199,982. Only $ 10,450,000 of the City's outstanding debt is counted within the statutory limitation amounting to about 27% of the total limit. Requests for information, This financial report is designed to provide a general overview of the City's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Director of Fiscal and Support Services, City of Brooklyn Center, b301 Shingle Creek Parkway, Brooklyn Center, Minnesota S 543 0. 18 CITY OF BROOKLYN CENTER, MINNESOTA STATEMENT 4F NET ASSETS ~ Statement 1 December 31, 2004 Primary Government Governmental Business-Type Assets: ~ Activities Activities Total Cash and investments $ 49,439,170 $ 6,130,747 $ 55,569,917 Receivables: Interest 95,779 - 95,779 Accounts 273,201 1,640,086 1,913,287 Taxes 1,436,870 - 1,436,870 Special assessments 3,220,417 276,455 3,496,872 Internal balances 875,998 (875,998) - Due from other governments 741,569 - 741,569 Prepaid expenses 1,504 160,466 161,970 Inventories - at cost 28,120 617,041 645,161 Restricted assets: Cash and investments 7,460,747 - 7,460,747 Capital assets: Nondepreciable 6,934,908 3,197,342 10,132,250 Depreciable 27,648,363 33,161,753 60,810,116 Total assets ~ 98,156,646 44,307,892 142,464,538 Liabilities: Accounts payable 662,073 437,794 1,099,867 Deposits payable - 209,740 209,740 Accrued salaries and wages 200,892 28,184 229,076 Accrued interest payable 406,484 - 406,484 Unearned revenue 14,566 135,861 150,427 Health insurance liability: Due in more than one year 1,548,581 w 1,548,581 Compensated absences payable; Due within one year 857,305 - 857,305 Bonds payable: Due within one year 9,815,000 230,000 10,045,000 Due in more than one year 29,365,000 - 29,365,000 Total liabilities 42,869,90,1 1,041,579 43,911,480 Net assets: Invested in capital assets, net of related debt 12,648,271 36,129,095 48,777,366 Restricted for; Debt service 14,570,477 - 14,570,477 Tax increment purposes 24,841,946 - 24,841,946 Unrestricted 3,224,051 7,137,218 10,363,269 Total net assets $ 55,284,745 $ 43,266,313 $ 98,553,058 The accompanying notes are an integral part of these financial statements. 19 CITY OF BROOKLYN CENTER, MINNESOTA STATEMENT OF ACTIVITIES For The Year Ended December 31, 2004 Charges For Expenses Services Functions/Pro~rams Primary government: Government activities: General government $ 2,725,137 $ 315,120 Public safety 7,538,277 487,731 Public works 2,482,819 23,533 Community services 47,3 24 - Parks and recreation 2,255,231 d 18,199 Economic development 1,b83,025 - Nondepartmental 333,669 - Administrative services reimbursement (784,084} - Interest onlong-term debt 1,268,649 - Total government activities 17,570,047 1,444,583 Business-type activities: Municipal liquor 939,244 991,058 Golf course 271,127 284,992 E, Brown Heritage Center 2,180,229 1,b75,267 Recycling and refuse 222,821 214,347 Street light utility 165,651 208,121 Water utility 1,533,923 1,583,450 Sanitary sewer 2,310,b45 2,833,836 Storm drainage 754,593 1,276,778 Total business-type activities 8,3 80,233 9,067,849 Total primary government $ 25,950,280 $ 10,712,432 The accompanying notes are an integral part of these financial statements. 20 Statement 2 Net (Expense) Revenue and Program Revenues Changes in Net Assets Operating Capital Primary Government Grants and Grants and Governmental Business-Type Contributions Contributions Activities Activities Total $ - $ - $ (2,410,017} $ - $ (2,410,017) 788,831 - (6,061,715) - (6,061,715) 90,000 2,423,411 54,125 - 54,125 54,273 - (13,051 } - (13,051) - - (1,637,032) - (1,637,032) - - (1,683,025) - (1,683,025) - - (333,669) - (333,669) - - 784,084 - 784,084 - - (1,268,649} - (1,268,649} 933,104 2,423,411 (12,568,949) - (12,568,949) - - - 51,814 51,814 - - - 13,865 13,865 - - - (504,962} (504,962) - - - (8,474) (8,474) - - - 42,470 42,470 - - - 49,527 49,527 - - - 523,191 523,191 - - - 520,185 520,185 - - - 687,616 687,616 $ 933,104 $ 2,423,411 (12,568,949) 687,616 (11,881,333} General revenues: Property taxes 15,730,170 - 15,730,170 Franchise fees 612,079 - 612,079 Grants and contributions not restricted to specific programs 923,374 - 923,374 Unrestricted investment earnings 491,524 102,696 594,220 Gain on disposal of fixed asset 29,202 - 29,202 Other 660,218 117,864 778,082 Transfers 2,004,810 (2,004,810) - Total general revenues and transfers 20,451,377 (1,784,250) 18,667,127 Change in net assets 7,882,428 (1,096,634} 6,785,794 Net assets -beginning 47,404,317 44,362,947 91,767,264 ` Net assets -ending $ 55,286,745 $ 43,266,313 $ 98,553,058 The accompanying notes are an integral part of these financial statements. 21 This page has been left blank intentionally. 22 FUND FINANCIAL STATEMENTS 23 CITY OF BROOKLYN CENTER, MINNESOTA BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2004 Earle Brown TIF Assets: General District Cash and investments $ 7,060,259 $ 20,374 Receivables: Interest 95,779 - Accaunts 22,720 19,365 Current taxes 95,904 - Delinquent taxes 467,754 97,499 Special assessments - - Due from other funds w - Due from other governments 19,111 - Prepaid expenses 1,504 - Advances to other funds 105,074 - Restricted assets: Cash and investments 119,153 - Total assets 7,987,258 137,238 Liabilities and Fund Balances Liabilities: Accounts payable 353,040 - Due to other funds - 1,200,000 Due to athergovernments - - Accrued salaries and wages 190,883 90 Advances from atherfunds - 698,143 Deferred revenue 473,886 97,499 Total liabilities 1,017,809 1,995,732 Fund balances: Reserved for; - Prepaid items 1,504 - Loan receivable 105,074 - Debt service - - Unreserved: Designated reported in: General Fund 6,862,871 - Special Revenue Funds - - Capital Project Funds - - Undesignatedreported in; Special Revenue Funds - (1,858,494) Capital Project Funds - - Total fund balances 6,969,449 (1,858,494) Total liabilities and fund balances $ 7,987,258 $ 137,238 The accompanying notes are an integral part of these financial statements. 24 Statement 3 TIF Special Other Intro District Assessment Infirastructure Nanmajor Activity Total Na, 3 Bands Construction Governmental Eliminations Governmental $ 24,648,976 $ 3,172,719 $ (10,999) $ 7,357,185 $ - $ 42,248,514 - - - - - 95,779 35,346 - 9,146 174,737 - 261,314 - 13,929 - 6,310 - 116,143 643,088 34,814 - 77,572 - 1,320,727 - 3,108,539 111,878 - - 3,220,417 1,200,000 - - - {1,200,000) - - - 664,066 58,392 - 741,569 - - _ - - 1,504 - - - 1,443,069 (698,143) 850,000 - - - 7,341,594 - 7,460,747 26,527,410 6,330,001 774,091 16,458,859 (1,898,143) 56,316,714 12,017 - 147,651 96,41$ - 609,12b - - - - (1,200,000) - 633 - 2,185 3,731 - 197,522 - - - - (698,143) - 643,088 3,143,353 146,560 86,OOb - 4,590,392 655,738 3,143,353 296,396 186,155 (1,898,143) 5,397,040 - - - - - 1,504 - - - - - 105,074 - 3,186,b48 - 10,043,892 - 13,230,540 - - - - - 6,862,871 17,173,101 - - - - 17,173,101 - - - 4,491,811 - 4,491,811 8,698,571 - - 1,737,001 - 8,577,078 - - 477,b95 - - 477,695 25,871,672 3,186,648 477,b95 16,272,704 - 50,919,674 $ 26,527,410 $ 6,330,001 $ 774,091 $ 16,458,859 $ (1,898,143) Amounts reported far governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources, and therefore, are not reported in the funds 32,539,964 Other long-term assets are not available to pay far current- periodexpenditures and, therefore, are deferred in the funds. 4,575,826 Lang-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds, (39,584,484) Internal service funds are used by management to charge the cast of certain activities to individual funds. The assets and liabilities are included in the governmental statement of net assets 6,837,765 Net assets of governmental activities $ 55,286,745 The accompanying notes are an integral part of these financial statements. 25 CITY OF BROOKLYN CENTER, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For The Year Ended December 3 1, 2004 Earle Brown TIF General District Revenues: Taxes and special assessments $ 10,025,495 $ 725,544 Franchise fees - - Licensesand permits 678,077 - Intergovernmental 1,419,210 - Charges for services 678,057 - Courtfines 254,980 - Investmentearnings (net of market value adjustment) 86,208 7,982 Miscellaneous 93,702 - Totalrevenues 13,235,729 733,526 Expenditures: Current: General government 2,585,597 - Public safety 4,642,254 - Public works 1,679,440 - Communityservices 67,324 - Parks and recreation 1,981,998 - Economic development 311,698 30,452 Nondepartmental 333,649 - Administrative services reimbursement (784,084) - Capital outlay: General government - - Public safety - - Publicworks - - Economic development - - Debt service: Principal retirement - - Interest - - Fiscal agent fees - - Bond issuance costs - - Totalexpenditures 12,817,896 30,452 Revenues over (under) expenditures 417,833 702,874 Other f nancing sources (uses): Bond proceeds - - Discount on bond proceeds - - Transfers in - - Transfers out { 1,465,464) (874,000) Total other financing sources (uses) { 1,465,464) (874,000) Net increase (decrease) in fund balance { 1,047,631) (173,124) Fund balance - ]anuary 1 8,017,080 (1,485,368) Fund balance -December 31 $ 6,949,449 $ {1,858,494) The accompanying notes are an integral part of these financial statements. 26 Statement 4 TIF Special Other Intra District Assessment Infrastructure Nonmajor Activity Total No. 3 Bonds Construction Governmental Eliminations Governmental $ 2,880,586 $ 1,410,344 $ 140,982 $ 1,220,227 $ - $ 16,403,178 - - - 612,079 - 612,079 - - - - - 678,077 - - 378,147 1,441,663 - 3,239,020 - - 22,041 11,428 - 711,526 - - - - - 254,980 127,140 31,121 98 132,473 - 385,022 - - 10,528 505,672 - 609,902 3,007,726 1,441,465 551,796 3,923,542 - 22,893,784 - - - 8,444 - 2,594,041 - - - 383,375 w 7,025,629 - - 127,739 6,92$ - 1,814,107 - - - - - 67,324 - ~ - - - 1,981,998 386,074 - - 278,126 - 1,006,550 - - - - - 333,669 - - - - (784,084) - - - 137,456 - 137,456 - - - 40,470 - 40,470 - - 3,765,453 487,765 - 4,253,218 - ~ - 293,145 - 293,145 - 1,005,000 - 2,746,513 - 3,751,513 - 218,457 - 662,559 - ~ 881,016 - 8,234 1,000 48,453 - 57,687 42,371 - - 26,800 - 69,171 428,445 1,231,691 3,894,192 5,120,034 - 23,522,910 2,579,281 209,774 {3,342,396) {1,196,492) - (629,126} 17,245,000 - 1,010,000 7,515,000 - 25,770,000 (71,899) - {7,714} {16,890) - (96,503) - - 2,588,626 2,514,987 (3,098,803) 2,004,810 - - - (757,339) 3,098,803 - 17,173,101 - 3,590,912 9,255,758 - 27,678,307 19,752,382 209,774 248,516 $,059,266 - 27,049,181 6,119,290 2,976,874 229,179 8,213,438 - 23,870,493 $ 25,871,672 $ 3,186,648 $ 477,695 $ 16,272,704 $ - $ 50,919,674 The accompanying notes are an integral part of these financial statements. 27 CITI' 4F BROUKLI'N CENTER, MINNESQTA RECONCILIATION OF THE STATEMENT OF REVENUES, Statement 5 EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS For The Year Ended December 3 1, 2004 Amounts reported for governmental activities in the statement of activities are different because: Net changes in fund balances -total governmental funds (Statement 4} $ 27,049,181 Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. 3,038,433 In the statement of activities, only the gain on the sale of capital assets is reported. However, in the governmental funds, the proceeds from the sale increase financial resources. Thus, the change in net assets differs from the change in fund balance by the cost of the capital assets sold. - Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 347,861 The issuance oflong-term debt {e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal oflong-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. This amount is the net effect of these differences in the treatment oflong-term debt and related items. (22,2SO,000) Internal service funds are used by management to charge the cost of certain activities to individual funds. This amount is net revenue attributable to governmental activities. 4,499 Accrued interest reported in the statement of activities does not require the use of current financial resources and, therefore, is not reported as expenditures in governmental funds. (329,944) Change in net assets of governmental activities (Statement 2) $ 7,882,428 The accompanying notes are an integral part of these financial statements. 28 This page has been left blank intentionally. 29 CITY 4F BR4UKLYN CENTER, MINNESOTA STATEMENT 4F NET ASSETS PROPRIETARY FUNDS December 31, 2004 Business~Type Activities Major Enterprise Funds Municipal Golf Earle Brown Liquor Course Heritage Center Assets: Current assets; Cash and cash equivalents $ 578,021 $ 72,770 $ 796,733 Accounts receivable -net 7,990 - 275,315 Special assessments receivable - - - Prepaiditems 20,799 - 11,958 Inventories - at cost 552,689 1,715 34,789 Total current assets 1,159,499 74,485 1, l 18,795 Noncurrent assets: Capital assets: Land - 1,390,402 1,493,300 Land improvements - 40,258 327,830 Buildings and structures 192,771 487,946 11,091,389 Machinery and equipment 111,166 11,160 45,544 Mains and lines - - - Total capital assets 303,937 1,929,766 12,958,063 Less: Allowance for depreciation (142,362} (184,815) (4,641,453} Net capital assets 161,575 1,744,951 8,316,610 Total assets 1,321,074 1,819,436 9,435,405 Liabilities: Current liabilities: Accounts payable 154,952 959 226,239 Deposits payable - - 209,740 Accrued salaries payable 7,754 932 11,623 Deferred revenue 145 - 1,600 Current portion oflong-term debt - - - Advances from other funds - 850,000 - Compensatedabsences payable - - - Totalcurrent liabilities 162,851 851,891 449,202 Noncurrent liabilities: Accrued health insurance liability - - - Totalnoncurrent liabilities - - - Total liabilities ~ 162,851 851,891 449,202 Net assets: Invested in capital assets, net of related debt 161,575 1,744,951 8,316,610 Unrestricted 996,648 (777,406} 669,593 Total net assets $ 1,158,223 $ 967,545 $ 8,986,203 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Net assets ofbusiness-type activities The accompanying notes are an integral part of these financial statements. 30 Statement 6 Business-Type Activities Governmental Major Enterprise Funds Other Activities- Water Sanitary Storm Nonmajor Total Internal Total Utility Sewer Drainage Enterprise Enterprise Service Proprietary $ 1,788,154 $ 1,468,766 $ 1,308,346 $ 117,957 $ 6,130,747 $ 7,190,656 $ 13,321,403 345,723 651,272 261,776 98,010 1,640,086 11,887 1,651,973 269,573 2,864 4,018 - 276,455 - 276,455 500 127,209 - - 160,466 - 160,466 27,848 - - - 617,041 28,120 645,161 2,431,798 2,250,111 1,574,140 215,967 8,824,795 7,230,663 16,055,458 23,093 3,389 287,158 - 3,197,342 - 3,197,342 - - - - 368,088 - 368,088 3,365,558 2,623,691 - - 17,761,355 - 17,761,355 128,668 179,130 - - 475,668 5,807,809 6,283,477 13,715,708 12,450,492 11,979,555 - 38,145,755 - 38,145,755 17,233,027 15,256,702 12,266,713 - 59,948,208 5,807,809 65,756,017 (9,539,361) (7,023,632} {2,057,490) - {23,589,113) (3,764,502) (27,353,615) 7,693,666 8,233,070 10,209,223 - 36,359,095 2,043,307 38,402,402 10,125,464 10,483,181 11,783,363 215,967 45,183,890 9,273,970 54,457,860 17,023 16,186 9,700 12,735 437,794 52,947 490,741 - - - - 209,740 - 209,740 5,942 1,933 - - 28,184 3,370 31,554 134,116 - - - 135,861 - 135,861 - - 230,000 - 230,000 - 230,000 - - - - 850,000 - 850,000 - - - - - 857,305 857,305 157,081 18,119 239,700 12,735 1,891,579 913,422 2,805,201 - - - - - 1,548,581 1,548,581 - - - - - 1,548,581 1,548,581 157,081 18,119 239,700 12,735 1,891,579 2,462,203 4,353,782 7,693,666 8,233,070 10,209,223 - 36,359,095 2,043,307 38,402,402 2,274,717 2,231,992 1,334,440 203,232 6,933,216 4,768,460 11,701,676 $ 9,968,383 $ 10,465,062 $ 11,543,663 $ 203,232 43,292,311 $ 4,811,767 $ 50,104,078 (25,998) $ 43,266,313 The accompanying notes are an integral part of these financial statements. 31 CITY OF BROOKLYN CENTER, MINNESOTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS For The Year Ended December 31, 2004 Business-Type Activities Major Enterprise Funds Municipal Golf Earle Brown Li9uor Course Heritage Center Operating revenues: Sales and user fees $ 4,026,679 $ 284,992 $ 3,565,197 Cost of sales 3,035,621 - 1,889,930 Total operating revenues 991,058 284,992 1,675,267 Operating expenses: Personal services 457,919 131,383 819,068 Supplies 39,100 15,616 129,728 Other services 139,727 73,313 366,421 Insurance 11,176 7,721 32,649 Utilities 27,066 15,123 170,658 Rent 22$,632 - 93,062 Depreciation 35,624 27,971 568,643 Total operating expenses 939,244 271,127 2,180,229 Operating income (loss) S 1,814 13,865 (504,962) Nonoperating revenues (expenses): Investment earnings 9,209 1,379 13,485 Special assessments - - - Gain {loss) on sale of capital asset - - - Otherrevenue 3,648 2,989 44,881 Interest and fiscal agent fees - - - Total nonoperating revenues {expenses} 12,857 4,368 58,366 Income (loss) before contributions and transfers 64,671 18,233 (446,596) Transfers: Transfer to Capital Project Funds (125,000) - (200,000) Change in net assets (60,329) 18,233 {646,596) Net assets -January 1 1,218,882 949,312 9,632,799 Net assets -December 31 $ 1,1 S 8,223 $ 967,545 $ 8,986,203 The accompanying notes are an integral part of these financial statements, 32 Statement 7 Business-Type Activities Governmental Major Enterprise Funds Other Activities- '~Vater Sanitary Storm Nonmajor Total Internal Total Utility Sewer Drainage Enterprise Enterprise Service Proprietary $ 1,583,450 $ 2,833,834 $ 1,274,778 $ 422,448 $ 13,993,400 $ 1,121,288 $ 15,114,688 - - - - 4,925,551 - 4,925,551 1,583,450 2,833,834 1,274,778 422,448 9,067,849 1,121,288 10,189,137 341,918 135,907 - - 1,904,195 404,384 2,310,579 148,368 12,572 1,917 77 347,378 237,261 584,439 302,750 1,663,580 225,729 233,061 3,004,581 89,566 3,094,147 9,930 4,773 1,328 2,457 70,234 43,497 113,731 122,190 24,389 - 152,477 512,103 2,555 514,458 - - - ~ 321,494 - 321,494 588,747 469,424 527,619 - 2,218,048 523,344 2,741,394 1,533,923 2,310,645 756,593 388,472 8,380,233 1,300,609 9,480,842 49,527 523,191 520,185 33,996 687,616 (179,321) 508,295 24,020 28,990 20,658 2,955 102,696 104,502 209,198 13,242 220 554 - 14,036 - 14,036 - - - - - 29,202 29,202 (6,446) 48,410 - - 112,882 50,316 163,198 - - (9,054} - (9,054) - (9,054) 32,436 97,220 12,158 2,955 220,560 186,020 404,580 82,1 d3 420,411 532,343 36,951 908,174 6,699 914,875 (631,441} (555,414} (441,755) (51,000) (2,004,810) - (2,004,810} (549,278) 64,797 90,588 (14,049) (1,094,634) 4,499 (1,089,935) 10,517,461 10,400,265 11,453,075 217,281 44,388,945 6,805,068 51,194,013 $ 9,948,383 $ 10,445,042 $ 11,543,443 $ 203,232 $ 43,292,311 $ 6,811,767 $ 50,104,078 The accompanying notes are an integral part of these financial statements, 33 CITY OF BROOKLYN CENTER, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For The Year Ended December 31, 2004 Business-Type Activities Major Enterprise Funds Municipal Golf Earle Brown Liquor Course Heritage Center Cash flows from operating activities; Receipts from customers and users $ 3,751,751 $ 284,992 $ 3,532,400 Receipts from interfiind services provided - - - Payments to suppliers (3,537,465) (110,445) (2,606,682) Payments to employees (469,745) (132,767) (842,781) Miscellaneous revenue 3,447 2,990 44,882 Net cash flows from operating activities (251,812) 44,770 127,819 Cash flows from noncapital financing activities: Principal repayments on advance - (3 5,000) - Transfersout (125,000) - (200,000) Net cash flows from noncapital financing activities (125,000) (35,000) (200,000) Cash flows from capital and related financing activities: Acquisition and construction of capital assets (50,932) - - Principalpaid on revenue bonds - - - Interestpaid onrevenue bonds - - - Netcash flows from capital and related financial activities (50,932) - - Cashflows from investing activities: Interest on investments 9,209 1,379 13,485 Net cash flows from investing activities 9,209 1,379 13,485 Net increase (decrease) in cash and cash equivalents (418,535) 11,149 (58,696) Cash and cash equivalents -January 1 996,556 61,621 855,429 Cash and cash equivalents -December 31 $ 578,021 $ 72,774 $ 796,733 Reconciliation of operating income to net cash provided (used) by operating activities: Operating income (loss) $ 51,814 $ 13,865 $ (504,962) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation 35,624 27,971 568,643 Changes in assets and liabilities: Decrease (increase) in receivables 2,347 (10,523) Decrease (increase) in inventories (277,444) 1,865 (371) Decrease (increase) in prepaid expenses 4 - (3,594) Increase (decrease) in payables (56,143) (537) 75,768 Increase (decrease) in accrued expenses (11,826) (1,384) (23,714) Increase (decrease) in accrued deferred revenue 145 - (18,310) Other nonoperating income 3,647 2,990 44,882 Total adjustments (303,626) 30,905 632,781 Net cash provided by operating activities $ (251,812) $ 44,774 $ 127,819 The accompanying notes are an integral part of these financial statements. 34 Statement 8 Business-Type Activities Governmental Major Enterprise Funds Other Activities- Water Sanitary Storm Nonmajor Total Internal Total Utility Sewer Drainage Enterprise Enterprise Service Proprietary $ 1,529,230 $ 2,842,750 $ 1,286,228 $ 416,147 $ 13,643,498 $ - $ 13,643,498 - - - - - 1,114,745 1,114,745 (627,517) (1,773,293) {232,326) (376,808} {9,264,536) (345,016) {9,609,552) {370,759} (139,557} (10,033} - (1,965,642} (337,958} {2,303,600) 6,616 68,230 553 - 126,917 79,519 206,436 537,570 998,130 1,044,422 39,339 2,540,237 511,290 3,051,527 - - ~ - {3 5,000) - (3 5,000} (631,440) (555,614) (441,755) {51,000) {2,004,809) - (2,004,809) {631,440) (555,614) (441,755) (51,000} (2,039,809) - (2,039,809) {34,751} {142,840) - - (228,523) {328,324} (556,847) - - {220,000) - {220,000) - (220,000) - - {9,055) - (9,055) - {9,055} (34,751) (142,840) {229,055) - (457,578) {328,324) (785,902) 26,020 28,990 20,658 2,955 102,696 106,502 209,198 26,020 28,990 20,658 2,955 102,696 106,502 209,198 (102,601) 328,666 394,270 {8,706) 145,546 289,468 435,014 1,890,755 1,140,100 914,076 126,663 5,985,200 6,901,188 12,886,388 $ 1,788,154 $ 1,468,764 $ 1,308,346 $ 117,957 $ 6,130,746 $ 7,190,65b $ 13,321,402 $ 49,526 $ 523,191 $ 520,185 $ 33,996 $ 687,615 $ (179,321) $ 508,294 588,767 469,424 527,619 - 2,218,048 523,346 2,741,394 (59,720) 8,914 9,450 (6,321) {55,833} {8,392) (64,225) {258) - - - {276,208} {13,268) (289,476} (3 62) (8,4 89) - - (12,441) - (12,441 } (44,278} (59,490} {3,352} 11,664 (76,368) 41,131 (35,237) (8,841) (3,650} (10,033} - (59,448) 68,275 8,827 6,120 - - - {12,045) - {12,045} 6,616 68,230 553 - 126,917 79,519 206,436 488,044 474,939 524,237 5,343 1,852,622 690,611 2,543,233 $ 537,570 $ 998,130 $ 1,044,422 $ 39,339 $ 2,540,237 $ 511,290 $ 3,051,527 The accompanying notes are an integral part of these financial statements. 35 This page has been left blank intentionally. 36 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 1, 2004 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Brooklyn Center, Minnesota (the City) was formed and operates pursuant to applicable Minnesota laws and statutes. The governing body consists of a mayor and four City Council members elected at-large to serve four-year staggered terms. A. FINANCIAL REPORTING ENTITY As required by accounting principles generally accepted in the United States of America, the City's financial statements include all funds and departments of the City and the City's component units. The component units discussed below are included in the City's reporting entity because of the significance of their operational or financial relationship with the City. BLENDED COMPONENT UNITS Blended component units, although legally separate, are in substance, part of the government's operations; data from these units are combined with data of the primary government. These additional units are the Economic Development Authority (EDA) and the Housing and Redevelopment Authority (HRA) in and for the City of Brooklyn Center, The governing board for each Authority is the City Council. The Council reviews and approves the HRA tax levy and the City provides major community development financing for EDA and HRA activities. Debts issued for EDA and HRA activities are City general obligations, Although the EDA and HRA are legally separate from the City, they are reported as 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 other entities that provide reduced costs, better service, and additional benefits to the participants. The programs in which the City participates are listed below and amounts recorded within the current year's financial statements are disclosed. Local Government Information Systems Association ~LOGISl This consortium of approximately 30 government entities provides computerized data processing and support services to its members. LOGIS~ is legally separate; the City does not appoint a voting majority of its board, and the Consortium is fiscally independent of the City. The total amount recorded within the 2004 financial statements of the City is $439,834 for general services and application upgrades provided. Costs were allocated to the various funds based on applications and/or use of services. Complete financial statements may be obtained at the LOGIS offices located at 5750 Duluth Street, Golden Valley, Minnesota 55422. 37 CITY 4F BR©©KLYN CENTER, MINNESQTA NOTES T4 FINANCIAL STATEMENTS December 31, 2004 Lois Insurance Group This group provides cooperative purchasing of health and life insurance benefits for approximately 45 governmental entities. The total of 2004 health and life insurance costs paid by the City was $942,3 $0. Complete financial statements may be obtained from Stanton Group located at 3405 Annapolis Lane, Plymouth, Minnesota 55447. ETHER The Brooklyn Center Fire Department Relief Association (the Association), The Association is organized as a nonprofit organization, legally separate from the City, by its members to provide pension and other benefits to members in accordance with Minnesota Statutes. Its board of directors is elected by the membership of the Association and not by the City Council. The Association issues its own set of financial statements. All funding is conducted in accordance with applicable Minnesota Statutes, whereby state aids flow to the Association, tax levies are determined by the Association and are only reviewed by the City. The Association pays benefits directly to its members. The Association may certify tax levies to Hennepin County directly if the City does not carry out this function. Because the Association is f scally independent of the City, the financial information of the Association has not been included within the City's financial statements. (See Note 15b 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 maybe obtained at the City offices located at b301 Shingle Creek Parkway, Brooklyn Center, Minnesota 55430. B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS The government-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets} report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a signif cant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function orbusiness-type activity are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function orbusiness-type activity. Program revenues include 1 } charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function orbusiness-type activity and 2} grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or business type activity. Taxes and other items not included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. 38 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the Proprietary Fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requvrements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modi red accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers all revenues, except reimbursement grants, to be available if they are collected within d0 days of the end of the current fiscal period. Reimbursement grants are considered available if they are collected within one year of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, special assessments, intergovernmental revenues, charges for services and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government. The government reports the following major governmental funds: The General Fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted far in another fund. The Earle Brown TIF District Special Revenue Fund has the authority to collect tax increments which are used far the historic restoration of the Earle Brown Farm and for debt service payments of bonds which were issued for the same purpose. The TIF District No. 3 Special Revenue Fund has the authority to collect tax increments which are used for various redevelopment projects within the City and for debt service payments of bonds which were issued for the same purpose. The Special Assessment Bonds Debt Service 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. 39 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TQ FINANCIAL STATEMENTS December 31, 2004 The Infrastructure Construction Capital Projects 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 benefited properties. The government reports the following major proprietary funds: The Municipal Liquor Fund accounts for the operations of the City's municipal off sale liquor stores. The Golf Course Fund accounts for operations of Centerbrook Golf Course, a 9 hole par 3 course owned by the City. The Earle Brown Heritage Center Fund accounts for the operation of a convention center. The Earle Brown Heritage Center is a pioneer farmstead that has been historically preserved and restored as a modern multipurpose facility, Its convention center can host conferences, trade shows, and concerts seating 1,000 people in either banquet or theater style. The facility hosts many meetings, parties, weddings and receptions. The Water Utility Fund accounts for the provision of water to customers. Administration, wells, water storage, and distribution are included. The Sanitary Sewer 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 b6 % of this fund's expenses, The Storm Drainage 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 ofthe parcel, Private-sector standards of accounting and financial reporting issued prior to December 1,1989, generally are followed in both the government-wide and proprietary-fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board, Governments also have the option of following subsequent private- sectorguidance far their business-type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private-sector guidance. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements, Exceptions to this general rule are transactions that would be treated as revenues, expenditures or expenses if they involved external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City of Brooklyn Center. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned, 40 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 Additionally, the government reports the following fund type: Internal Service p'unds account for compensated absences, health care insurance benefits and central garage services provided to other departments of the City on a cost reimbursement basis. Amounts reported as program revenues include 1 } charges to customers or applicants for goods, services, or privileges provided, 2} operating grants and contributions, and 3}capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the municipal liquor, golf course, Earl Brown Heritage Center, water utility, sanitary sewer, storm drainage and street light enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for an allowable use, it is the government's policy to use restricted resources first, then unrestricted resources as they are needed. D. BUDGETS The City Charter grants the City Council full authority over the financial affairs of the City. The City Manager is charged with the responsibility of preparing the estimates of the annual budget and the enforcement of the provisions of the budget as specified in the City Charter. Upon adoption of the annual budget resolution by the Council, it becomes the formal appropriation budget for City operations. All budget adjustments must be approved by the Council. Budgets for the General and Special Revenue Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Budgeted expenditure appropriations lapse at year end. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the appropriation, is not employed by the City because it is, at present, not considered necessary to assure effective budgetary control or to facilitate effective cash management, 41 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 LEGAL COMPLIANCE BLTDGETS The City follows these procedures establishing the budgetary data reflected in the financial statements: 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 County mails individual property tax notices showing the taxes that would result from the proposed budgets of all taxing units to each property owner in November. 3. Public hearings are conducted to obtain taxpayer comments. 4. The budgets are legally enacted with the passage of resolutions 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. d. Supplemental appropriations during the year may only be made by the City Council, These amounts must be financed by funds from a contingency reserve setup 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 or re~encumbered by City Council directive in the following fiscal year. 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 accounting principles generally accepted in the United States of America, Annual appropriated budgets are adopted for all governmental funds except for the project-length Capital Projects Funds and Debt Service 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 material in relation to the original appropriations. BUDGET VARIANCES For the year ended December 31, 2004, expenditures exceeded appropriations in the Economic Development Authority, Police Drug Forfeiture and City Initiatives Grant Special Revenue Funds by $25,572, $51,952 and $143,789 respectively. 42 CITY OF BROOKLYN CENTER, MINNESOTA NOTES T4 FINANCIAL STATEMENTS December 31, 2004 E. CASH AND INVESTMENTS Cash balances from all funds are combined and invested to the extent available in certificates of deposit, U.S, government securities and other securities authorized by State Statute, investment income is allocated to the respective funds on the basis of applicable cash balance participation by each fund. Investments are stated at fair value, based upon quoted market prices as of the balance sheet date. Investment income is accrued at the balance sheet date. The City provides temporary advances to funds that have insufficient cash balances by means of an advance from another fund shown as interfund receivables in the advancing fund, and an interfund payable in the fund with the deficit, until adequate resources are received. These interfund balances are eliminated on the government-wide financial statements. For purposes of the statement of cash flows the City considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. All of the cash and investments allocated to the proprietary funds have original maturities of 90 days or less. Therefore the entire balance in the Proprietary Funds are considered cash equivalents. F. RECEIVABLES AND PAYABLES During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. Short-term interfund loans are classified as "interfund receivableslpayables." All short-term interfund receivables and payables at December 31, 2004 are planned to be eliminated in 2005. Long-term interfund loans are classified as "interfund loan receivable/payable." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances." Property taxes and special assessments have been reported net of estimated uncollectible accounts. (See Note 1 G and I) Because utility bills are considered lien`s on property, no estimated uncollectible amounts are established. Uncollectible amounts are not material for other receivables and have not been reported, G. PROPERTY TAB REVENUE RECOGNITION The City Council annually adopts a tax levy and certif es it to the County in December (levy/assessment date} of each year for collection in the following year. The County is responsible for billing and collecting all property taxes for itself, the City, the local School District and other taxing authorities. Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. Real property taxes are payable (by property owners} on May 15 and October 15 of each calendar year. Personal property taxes are payable by taxpayers on February 2$ and June 30 of each year. These taxes are collected by the County and remitted to the City on or before July 7 and December 2 of the same year. Delinquent collections for November and December are received the following January. The City has no ability to enforce payment of property taxes by property owners. The County possesses this authority. 43 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 GOVERNMENT-WIDE FINANCIAL STATEMENTS The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible property taxes are not material and have not been reported. GOVERNMENTAL FUND FINANCIAL STATEMENTS The City recognizes property tax revenue when it becomes both measurable and available to finance expenditures of the current period. In practice, current and delinquent taxes and State credits received by the City in July, December and January are recognized as revenue for the current year. Taxes collected by the County by December 31(remitted to the City the following January) and taxes and credits not received at the year end are classified as delinquent and due from County taxes receivable, The portions of delinquent taxes not collected by the City in January are fully offset by deferred revenue because they are not available to finance current expenditures. H. MARKET VALUE HOMESTEAD CREDIT Property taxes on residential agricultural homestead property (as defined by State Statutes) are partially reduced by market value homestead credit (MVHC). This credit is paid to the City by the State in lieu of taxes levied against homestead property. The State remits this credit through installments each year. The credit is recognized as revenue by the City at the time of collection. The City has recorded this with property tax revenue. I. SPECIAL ASSESSMENT REVENUE RECOGNITION Special assessments are levied against benefted properties for the cost or a portion of the cost of special assessment improvement projects in accordance with State Statutes. These assessments are collectible by the City over a term of years usually consistent with the term of the related bond issue. Collection of annual installments (including interest} is handled by the County Auditor in the same manner as property taxes. Property owners arE allowed to (and often do) prepay assessments in full without interest or prepayment penalties. Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale. Proceeds of sales from tax forfeit properties are allocated first to the County's costs of administering all tax forfeit properties. Pursuant to State Statutes, a property shall be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or seasonal recreational land in which event the property is subject to such sale after five years. GOVERNMENT-WIDE FINANCIAL STATEMENTS The City recognizes special assessment revenue in the period that the assessment roll was adopted by the City Council. Uncollectible special assessments are not material and have not been reported. 44 I . CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 GOVERNMENTAL FUND FINANCIAL STATEMENTS Revenue from special assessments is recognized by the City when it becomes measurable and available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by the City are recognized as revenue for the current year. Special assessments that are collected by the County by December 31(remitted to the City the following January) are also recognized as revenue for the current year, All remaining delinquent, deferred and special deferred assessments receivable in governmental funding are completely offset by deferred revenues. J. INVENTORIES GOVERNMENTAL FUNDS The primary government does not maintain material amounts of inventory within the other governmental funds. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. PROPRIETARY FUNDS Inventories in the proprietary funds are valued at cost, using the weighted average method in the Municipal Liquor Fund and the fixst-inlfirst-out (FIFO) method in the other proprietary funds. The costs of supplies are recorded as expenditures when purchased, K. PREPAID ITEMS Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. L. CAPITAL ASSETS Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items}, are reported in the applicable governmental or business- typeactivities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 (amount not rounded and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed, Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed, For the year ended December 31, 2004, no interest was capitalized in connection with construction in progress. 45 CITY OF BROOKLYN CENTER, MINNESOTA NOTES T4 FINANCIAL STATEMENTS December 31, 2004 Property, plant and equipment of the primary government, as well as the component units, is depreciated using the straight line method over the following estimated useful lives: Paved streets 25 years Water and sewer mains and lines 25 years Buildings and structuu~res 25 years water wells and storage tanks 25 years Sewer lift stations 25 years Street lights and traffic lights 15 years Machinery and equipment S -15 years Departmental equipment 5 years M. COMPENSATED ABSENCES It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All vacation pay is accrued in the internal service fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. In accordance with the provisions of Statement of Government Accounting Standards No.1 d, ~Iccounting for Compensated Absences, no liability is recorded for nonvesting accumulating rights to receive sick pay benefits. However, a liability is recognized for that portion of accumulating sick leave benefits that is vested as severance pay. N. LONG-TERM OBLIGATIONS In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are immaterial and are expensed in the year of bond issuance. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 0. FUND EQUITY In the fund financial statements, governmental funds report reservations of fund balance for amounts not appropriable for expenditure or legally segregated for a specific future use. Designated fund balances represent tentative plans for future use of financial resources, 46 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 P. INTERFUND TRANSACTIONS Interfund services provided and used are accounted for as revenues, expenditures or expenses, Transactions that constitute reimbursements to a fund for expenditureslexpenses initially made from it that are properly applicable to another fund, are recorded as expenditureslexpenses inthe reimbursing fund and as reductions of expenditureslexpenses in the fund that is reimbursed. Interfund loans are reported as an interfund loan receivable or payable which offsets the movement of cash between funds, All other interfund transactions are reported as transfers. Q. USE OF ESTIMATES The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires management to make estimates that affect amounts reported in the financial statements during the reporting period. Actual results could differ from such estimates. R. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS 1. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND BALANCE SHEET AND THE GOVERNMENT-WIDE STATEMENT OF NET ASSETS The governmental fund balance sheet includes a reconciliation between fund balance -total governmental funds and net assets -governmental activities as reported in the government- wide statement of net assets. One element of that reconciliation explains that "long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds." The details of this $39,586,484 difference are as follows: Bonds payable $ 39,180,000 Accrued interest payable 406,484 Net adjustment to reduce fundbalance -total governmental funds to arrive at net assets - governmental activities $ 39,586,484 47 CITY OF BRQOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 2. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES AND THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances -total governmental funds and changes in net assets of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that "Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense." The details of this $3,038,633 difference are as follows: Capital outlay $ 4,403,382 Depreciation expense (1,364,749) Net adjustment to increase net changes in fund balances -total governmental funds to arrive at changes in net assets of governmental activities $ 3,038,633 Another element of that reconciliation states that "Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds." The details of this $367,861 difference are as follows: General property taxes deferred revenue: At December 31, 2003 $ (391,585) At December 31, 2004 580,140 Tax increment taxes deferred revenue: . At December 31, 2003 (288,475) At December 31, 2004 740,587 Special assessments deferred revenue: At December 31, 2003 (3,491,474) At December 31, 2004 3,218,739 Other deferred revenues: At December 31, 2003 (36,431) At December 31, 2004 36,360 Net adjustments to decrease net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ 367,861 48 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 Another element of that reconciliation states that "the issuance of longterm debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of principal of the long-term debt consumes the current financial resources of governmental funds." Neither transaction, however, has any effect on net assets. The details of this ($22,250,000} difference are as follows: Debt issued or incurred; Issuance of general obligation bonds $ (5,045,000) Issuance of general improvement bonds (1,010,000} Issuance of tax increment bonds (19,715,000) Principal repayments: General obligation debt 740,000 General improvement bonds 1,005,000 Tax increment bonds 1,775,000 Net adjustment to increase net changes infundbalances - total governmental funds to arrive at changes in net assets of governmental activities $ (22,250,000) Note 2 DEPOSITS AND INVESTMENTS 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 collateral, The market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds. Authorized collateral includes the legal investments described below, as well as certain first mortgage notes, and certain other state or local government obligations, Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City Treasurer or in a financial institution other than that furnishing the collateral. At year-end, the City's carrying value amount of deposits was $4,122,475 composed of bank balances of $4,318,473. All balances were covered by federal depository insurance or by perfected collateral held by the City's agent in the City's name. 49 CITY OF BROOKLYN CENTER, MINNESOTA NOTES T4 FINANCIAL STATEMENTS December 31, 2004 INVESTMENTS Minnesota Statutes authorize the City to invest in the following: a} Direct obligations or obligations guaranteed by the United States or its agencies, its instrumentalities or organizations created by an act of congress, excluding mortgage-backed securities defined as high risk. b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are insecurities described in (a) above, general obligation tax-exempt securities, or repurchase or reverse repurchase agreements. c} General obligations of the State of Minnesota or any of its municipalities. d} Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System, e} Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. f) Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000; a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York; certain Minnesota securities broker-dealers; or, a bank qualified as a depositor. 50 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 Balances at December 31, 2004: CarryingJFair Custodial Credit Risk Cate~or~ Value Securities Type 1 2 3 .Amount Federal agencies $ 4,444,903 $ - $ - $ 4,444,903 Totals $ 4,444,903 $ - $ - 4,444,903 Investment pools 47,114,515 Deposits 4,122,477 Cash with escrow agent ~ 7,341,594 Total deposits and investments 63,023,489 Petty cash and change 7,175 Totals $ 63,030,664 Reconciliation to Statement of Net Assets (Statement 1): Cash, cash equivalents, and investments $ 55,569,917 Restricted cash and investments 7,460,747 Total cash and investments $ 63,030,664 The City's investments are categorized above to give an indication of the level of custodial credit risk assumed at year end. Category 1 includes investments that are insured or registered or for which the securities are held by the City or its agent in the City's name. Category 2 includes uninsured and unregistered investments for which the securities are held by the counterparty's trust department or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counterparty or by its trust department or agent but not in the City's name. Note 3 RECEIVABLES Significant receivables balances not expected to be collected within one year of December 31, 2004 are as follows: Major Funds Earle Special Brown TIF Assessment Infrastructure Water Sanitary Storm Nonmajor General District Bonds Construction Utility Sewer Draina,~e Funds Total Special assessments receivable $ - $ - $2,173,016 $298,020 $242,615 $2,577 $3,616 $ - $2,719,844 Delinquent property taxes - - - - - - 10,491 10,491 Delinquent tax increment - 97,499 - - - - - - 97,499 Loan receivable 105,074 - - - - - - 1,443,069 1,548,143 $105,0?4 $9?,499 $2,173,016 $298,020 $242,615 $2,57? $3,616 $1,453,560 $4,375,977 51 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows; Unavailable Unearned Delinquent property taxes receivable (General Fund) $ 467,754 $ - Delinquent property taxes receivable (Special Assessment Bonds) 34,814 - Delinquent property taxes receivable {Nonmajor Funds) 77,572 - Delinquenttaxincrement collections (Earl Brown TIF District) 97,499 - Delinquent tax increment collections (TIF' District #3} 643,088 - Specialassessments not yet due (Special Assessment Bonds) 3,108,539 - Special assessments not yet due (Infrastructure Construction} 110,200 - Grant drawdowns prior to meeting all eligibility requirements (NonmajorFunds) - 8,434 ' Fees received but unearned {General Fund} - 6,132 Fees received but unearned (Special Assessment Construction) 36,360 - Total deferredlunearned revenue for governmental funds $ 4,575,826 $ 14,566 Note 4 CAPITAL ASSETS Capital asset activity for the year ended December 31, 2004 as previously reported was as follows: 52 CITY OF BROOKLYN CENTER, MINNESOTA NOTES T4 FINANCIAL STATEMENTS December 31, 2004 Beginning Ending Primary Government Balance Increases Decrease Balance Governmental activities; Capital assets, not being depreciated: Land ~ $ 3,203,904 $ - $ - $ 3,203,904 Construction in progress 927,629 3,731,004 (927,629) 3,731,004 Total capital assets, not being depreciated 4,131,533 3,731,004 (927,629} 6,934,908 Capital assets, being depreciated; Buildings and improvements 18,693,898 - - 18,693,898 Park improvements 2,909,461 28,980 - 2,938,441 Departmental equipment 6,212,011 338,b23 (347,387) 6,203,247 Streets 18,716,998 1,571,027 - 20,288,025 Total capital assets, being depreciated 46,532,368 ~ 1,938,630 (347,387) 48,123,611 Less accumulated depreciation for: Buildings and improvements 4,653,245 659,646 - 5,312,891 Park improvements 1,763,886 115,581 - 1,879,4b7 Departmental equipment 3,776,965 SS8,S16 (337,088} 3,998,393 Streets 8,730,145 554,352 - 9,284,497 Total accumulated depreciation 18,924,241 1,888,095 (337,088) 20,475,248 Total capital assets being depreciated -net 27,608,127 SO,S3S (10,299) 27,648,363 Governmental activities capital assets -net $ 31,739,b60 $ 3,781,539 $ (937,928} $ 34,583,271 Beginning Ending Primary Government Balance Increases Decrease Balance Business-type activities: Capital assets, not being depreciated: Land $ 3,197,342 $ - $ - $ 3,197,342 Total capital assets, not being depreciated 3,197,342 - - 3,197,342 Capital assets, being depreciated: Land improvements 368,088 - - 368,088 Buildings and improvements 17,588,449 172,90b - 17,761,3SS Department equipment 424,734 50,934 - 475,668 Mains and lines 38,141,067 4,687 - 38,145,754 Total capital assets, being depreciated 56,522,338 228,527 - S6,7S0,86S Less accumulated depreciation for; Land improvements 68,417 12,379 - 80,796 Buildings and improvements 6,861,200 839,765 - 7,700,965 Department equipment 289,641 38,768 - 328,409 Mains and lines 14,151,806 1,327,136 - 15,478,942 Total accumulated depreciation 21,371,064 2,218,048 ~ - 23,589,112 Total capital assets being depreciated -net 3S,1S1,274 (1,989,521) - 33,161,753 Business-type activities capital assets -net ~ $ 38,348,616 $ (1,989,521) $ - $ 36,359,095 53 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 Depreciation expense was charged to functionslprograms ofthe primary government as follows: Governmental activities: General government $ 83,102 Public safety 398,684 Public works 628,330 Parks and recreation 254,634 Capital assets held by the governments internal service funds are charged to the various functions based on their usage of the assets ~ 523,346 Total depreciation expense - governmental. activities $ 1,888,096 Business-type activities: Municipal liquor fund $ 35,624 Golf course fund 27,971 Earle Brown Heritage Center Fund 568,643 Water utility fund 588,767 Sanitary sewer fund 469,424 Storm drainage fund 527,619 Total depreciation expense -business-type activities $ 2,218,048 CQNSTRUCTI4N COMMITMENTS At December 31, 2004, the City had construction project contracts in progress. The commitments related to remaining contract balances are summarized as follows: Contract Remaining Project # Project Amount Commitment 2004-01 Northport Streets $ 2,673,332 $ 83,847 2004- ld Grandview Park 183,884 ~ . 9,615 $ 2,857,216 $ 93,462 Note 5 OPERATING LEASES The City leases space for its municipal liquor stores. The leases are both ten-year leases and began in 2000 and 2003. Both leases have options for aten-yeax extension. The leases provide for a minimum monthly base rent payment, plus apro-rata share of common axea expenses. In addition, they requires additional lease payments if agreed-upon revenue thresholds are attained, These leases maybe cancelled at the City's option if the City ceases liquor operations. Total rental expense under the lease agreements for the years ended December 31, 2004 and 2003 was $288,444 and $142,730, respectively. Future minimum rent payments under the current agreements are as follows: 54 CITY OF BR~aKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATENIENTS December 31, 20D4 Total Year NIuiimum Fndin~ Rents 2005 $ 188,897 2006 193,530 2007 193,530 2008 193,530 2009 193,530 2010 136,158 2D11 93,360 2012 93,360 2013 93,360 $1,379,255 Note 6 LONG-TERM DEBT The City issues general obligation bonds and equipment certificates to provide funds for the acquisition and construction of major capital facilities. The reporting entity's long-term debt is segregated between the amounts to be repaid from governmental activities and amounts to be repaid from business-type activities. GOVERNMENTAL ACTIVITIES As of December 31, 2D04, the long-term debt of the financial reporting entity consisted of the following: Final Interest Maturity Original Payable Rates Date Date Issue 12/31/04 General Obligation Bonds: Refunding State-Aid Street Bonds 3.55%-4,00% 12/1/1998 411/2006 $ 1,585,000 $ 575,000 Police and Fire Building Bonds 4,10%-4.90% 12/1/1997 211/2013 7,900,000 5,405,000 Police and Fire Building Refunding Bonds 2.00%-3,35% 111/2004 2/1/2013 5,045,000 5,045,000 Total General Obligation Bonds 14,530,000 11,025,000 G.O. Tax Increment Bands: Taxable Tax Increment Bonds of 1995 6.00%-6.15% 11/111995 21112011 4,560,000 2,730,000 Taxable Tax Increment Refunding Bonds of 2004 2.25%-4.40% 1/1/2004 21112011 2,470,000 2,470,000 Taxable Tax Increment Bonds of 2004 4,75%-5,125% 12/112004 21112020 17,245,000 17,245,000 Total Tax Increment Bands 24,275,000 22,445,000 55 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 Final Interest Maturity Original Payable Rates Date Date Issue 12131/04 G.O. Improvement Bonds; 1994 Street lmpravement Bonds 4.1 a%-5.50% 8/1/1994 211/2aa5 835,aa0 95,a0a 1995 Street lmpravement Bonds 4.x0%-4.9x% 11/1/1995 21112x06 78a,a0a 175,000 1996 Street Improvement Bonds 4.20%-S.l a% 11/1/1995 21112x07 1,44a,a0a 470,OOa 1997 Street Improvement Bonds 4.00%-4.70% 1211/1997 211120x8 1,a75,0aa 405,aa0 1998 Street Improvement Bonds 3.40%-4.20% 12/1/1998 2/1/2009 1,085,000 SOS,OOa 1999 Street Improvement Bonds 4.1 a%-5.00% 12/1/1999 2/1/2010 1,585,x00 93a,a0a 2000 Street Improvement Bonds 4.30%-4,90% 121112aa0 211/2011 735,OOa 495,Oa0 2ax1 Street Improvement Bonds 2.60%-4.40% 1211/2aa1 21112x12 73a,00x 565,Oa0 2x03 Street Improvement Bonds 1.45%-4.00% 1/1/2003 2/112013 1,205,000 1,x6a,x00 2004 Street Improvement Bonds 2.10%-3.65% 12/1/2004 2/1/2015 l,al a,a00 l,al a,a0x Total G.O. Improvement Bands 1 x,48a,a00 5,71 a,00x Total -banded indebtedness 49,285,OOa 39,180,000 Compensated absences payable 857,305 Total City indebtedness -governmental activities $ 49,285,Oaa $ 40,037,305 BUSINESS-TYPE ACTIVITIES Final Interest Maturity Original Payable Rates Date Date Issue 12131/04 G.4. Revenue Bands; 1994 Storm Sewer Revenue Bonds 4.20%-5.40% 8/1/1994 21112005 $ 1,830,000 $ 230,{}00 Total business-type activities $ 1,830,000 $ 230,000 56 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 Annual debt service requirements to maturity for long-term debt are as follows: General Obligation Bonds Tax Increment Bands G.O. Improvement Bonds Year Ending Governmental Activities Governmental Activities Governmental Activities December 31 Principal Interest Principal Interest Principal Interest 2005 $ 5,685,000 $ 403,302 $ 3,140,OOx $ 806,494 $ 990,000 $ 198,661 2006 815,000 143,028 l,Ox0,00x 887,080 1,000,000 167,286 2007 590,000 124,689 1,x50,Ox0 847,237 900,000 129,316 20x8 600,Oxx 110,552 1,x30,000 804,491 720,000 96,198 2xx9 610,000 93,903 1,x95,000 759,214 61 S,axO 70,407 2x10 640,000 75,153 1,120,000 71x,280 495,a0x 47,977 2011 64x,000 55,632 1,165,000 658,155 340,a0x 31,111 2012 685,000 34,581 8x0,000 b12,213 27a,axx 19,234 2x13 7xx,xOx 11,725 1,240,000 563,763 200,Oxx 10,309 2014 - - 1,305,x00 503,319 90,000 4,928 2015 - - 1,38x,xxx 439,550 90,000 1,643 2016 - - 1,450,Oxx 372,338 - - 2x17 - - 1,540,000 299,400 - - 2018 - - 1,610,000 220,650 - - 2019 - - 1,720,000 136,325 - - 202x - - 1,800,000 46,125 - - Total $ 11,025,000 $ 1,x52,565 $ 22,445,000 , $ 8,666,634 $ 5,710,000 $ 717,67x Storm Sewer Revenue Bonds Year Ending Business-Type Activities December 31 Principal Interest 2005 23x,xOx 6,210 Total $230,000 $6,21 x On January 1, 2004, the City issued $5,045,000 in General Obligation Police and Fire Building Refunding Bonds, Series 2004A with an average interest rate of 3.00918% to advance refund $4,910,000 of outstanding General Obligation Police and Fixe Building Bonds, Series 1997B with an average interest rate of 4.7352%. The net proceeds of $4,994,021 were used to purchase U.S. Treasury Securities State and Local Government Series ("BEGS"). Those securities were deposited in an irrevocable trust with an escrow agent to provide for the interest on the refunding bonds before the crossover date and called principal on the refunded bonds on February 1, 2005. The City advance refunded the 1997B General Obligation Police and Fire Building Bonds to reduce future debt service payments by $268,698 and to obtain an economic gain (difference between the present value of the debt service payments on the old and new debt} of $229,947. The City is responsible for the debt service of the 1997B bonds through the crossover date and the debt service on the 2004A bonds after the crossover date. The debt service of the 2004A bonds before the crossover date is payable from the escrow account. Assets held with the escrow agent total $4,948,936 at December 31, 2004. 57 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 1, 2004 On February 1, 2004, the City issued $2,470,000 in Taxable General Obligation Tax Increment Refunding Bonds, Series 2004B with an average interest rate of 3.6999% to advance refund $2,370,000 of outstanding Taxable General Obligation Tax Increment Bonds, Series 1995A with an average interest rate of 6.7905%. The net proceeds of $2,431,894 were used to purchase U.S. Treasury Securities -State and Local Government Series ("BEGS"}. Those securities were deposited in an irrevocable trust with an escrow agent to provide for the interest on the refunding bonds before the crossover date and called principal on the refunded bonds on February 1, 2005. The City advance refunded the 1995A Taxable General Obligation Tax Increment Bands to reduce future debt service payments by $147,248 and to obtain an economic gain (difference between the present value of the debt service payments on the old and new debt) of $126,651. The City is responsible for the debt service of the 1995A bonds through the crossover date and the debt service on the 2004B bonds after the crossover date. The debt service of the 2004B bonds before the crossover date is payable from the escrow account. Assets held with the escrow agent total $2,392,658 at December 31, 2004. CHANGE INLONG-TERM LIABILITIES Long-term liability activity for the year ended December 31, 2004, was as follows: Beginning Ending Due Within Balance Additions Reductions Balance One Year Governmental activities; Bonds payable; General obligation bonds $ 6,720,000 $ 5,045,000 $ (740,000} $11,025,000 $ 5,685,000 Tax increment bonds 4,505,000 19,715,000 (1,775,000} 22,445,000 3,140,000 G,0. special assessment bonds 5,705,000 1,010,000 (1,005,000} 5,710,000 990,000 Total bonds payable 16,930,000 25,770,000 (3,520,000} 39,180,000 9,815,000 Compensated absences 783,227 637,734 (563,156) 857,805 857,805 Total government activity long-term liabilities $17,713,227 $ 2b,407,734 $ (4,083,156) $ 40,037,805 $10,672,805 Business-type activities; Storm sewer revenue bonds $ 450,000 $ - $ (220,000) $ 230,000 $ 230,000 For the governmental activities, loans payable are generally liquidated by the general fund. Compensated absences are liquidated by the Internal Service Fund. All long-term bonded indebtedness outstanding at December 3 1, 2004 is backed by the full faith and credit of the City, including improvement and revenue bond issues. Delinquent assessments receivable at December 3 1, 2004 totaled $87,633. Note 7 CONDUIT DEBT OBLIGATIONS From time to time, the City has issued Housing Revenue Bonds and Industrial Revenue Bonds to provide assistance to private sector entities for the acquisition and construction of housing, industrial, and 58 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 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 far the repayment of the bonds. Accordingly, the bonds are not reported as liabilities in 'the accompanying financial statements. As of December 31, 2004, there were six series of Housing Revenue or Industrial Revenue Bonds outstanding, with an aggregate principal amount payable $28,450,000. Several variable debt issues are also outstanding. 59 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 Note 8 RESERVED/DESIGNATED FUND EQUITY Fund balances and retained earnings in the various funds have been reserved or designated for the following purposes: Reserved Fund Equity Major funds: General fund: Prepaid items $ 1,504 Advances to other funds 105,074 Total general find 106,578 Special Assessment Bonds: Debt service 3,186,648 Nonmajor Funds; Loan receivable 1,443,069 Advances to other fiuads 8,600,823 Total nonmajar funds 10,043,892 Total governmental funds $13,337,118 Designated Fund Equity Major funds; General fund: Working capital $ 6,862,871 TIF District #3: Bonding covenants 14,976,420 Statutory housing obligation 2,19b,681 Total TIF District #3 17,173,101 Nonmajor Fuds; Capital improvements 4,491,811 Total governmental funds $ 28,527,783 60 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 Note 9 INTERFLIND RECENABLES/PAYABLES, LOANS AND TRANSFERS Individual fund interfund receivable and payable balances at December 31, 2004 are as follows: Due from Due to Fund Other Funds Other Funds Major Funds: TIF District #3 $ 1,200,000 $ - Ear1 Broom TIF District - 1,200,000 Total $ 1,200,000 $ 1,200,000 Advances to Advances From Fund Other Funds Other Funds Major Funds: General Fund $ 105,074 $ - Earl Broom TIFDistrict - 498,143 GolfCourse - 850,000 Non Major Funds: Capital Improvements Fund 850,000 - Municipal State Aid for Construction Fund 593,049 - $ 1,548,143 $ 1,548,143 The above balances are not expected to be eliminated within one year of December 3 1, 2004. 61 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 Interfund transfers: Transfer In Transfer Qut Govemrnental Funds: Major Funds: General Fund $ - $ 1,465,464 Earle Brown TIFDistrict - 876,000 Infrastructure Const~.iction 2,588,626 - NonmajorFunds 2,514,987 757,339 Total govenmental funds 5,103,613 3,098,803 Proprietary Funds: Major Funds: WaterUtility - 631,441 SanitarySewer - 555,614 StormDrainage - 441,755 Earle Brown Heritage Center Capital - 200,000 Municipal Liquor - 125,000 Nonrrrajor Funds - 51,000 Total proprietaryfunds - 2,004,810 Total $ 5,103,613 $ 5,103,613 Interfund transfers allow the City to allocate financial resources to the funds that receive benefit from services provided by another fund or to provide additional capital and infrastructure funding. In addition, interfund transfers are occasionally authorized to allow redistribution of resources between funds for the most efrcient use of funds, In 2004, transfers from the General Fund to nonmajor governmental funds such as the Street Reconstruction and Technology Funds allowed excess fund General Fund balance to be put to use in ways that would reduce the need for taxes or other sources of public funds in the nonmajor funds. 62 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 1, 2004 Note 10 LEGAL DEBT MARGIN The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable principally from property taxes. The City of Brooklyn Center's legal debt margin for 2004 and 2003 is computed as follows: December 31 2004 2003 Market value (after fiscal disparities) $1,959,999,100 $1,840,115,300 Debt limit {2% of Market Value) $39,199,982 $36,802,306 Amount of debt applicable to debt limit: Total bonded debt $39,410,000 $17,380,000 Less; Improveme~at bonds (5,710,000) (5,705,000) State Aid Street Bonds (575,000} (845,000) Tax Increment Bonds (22,445,000} (4,505,000) Utility Revenue Bonds (230,000) (450,000) Total debt applicable to debt limit $10,450,000 $5,875,000 Legal debt margin $28,749,982 $30,927,306 Note 11 DEFICIT FUND BALANCES A deficit fund balance exists at December 31, 2004 in the following fund: Unreserved deficit fund balance Maj or Funds: Earle Brown Tax Increment Financing District; $1,858 494 } Nonmaj or Funds: Employee Retirement Benefit Fund 17,b79 The deficits are being funded through internal borrowing and will be repaid from future surplus tax increments and construction transfers form utility funds. 63 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 Note 12 CONTINGENCIES, SUBSEQUENT EVENTS AND COMMITMENTS A. ARBITRAGE REBATE The Tax Reform Act of 1986 requires governmental entities to pay to the federal government income earned on the proceeds from the issuance of debt in excess of interest costs, pending the expenditure of the borrowed funds. This rebate of interest income {known as arbitrage) applies to governmental debt issued aver August 31,1986. The City issued greater than $5 million of bonds in the years 1991,1992,1997 and 2004 and therefore is required to rebate excess investment income relating to these issues to the federal government. The extent of the City's liability for arbitrage rebates on the remaining bond issues is not determinable at this time. However, in the opinion of management, any such liability would be immaterial. B. LITIGATION The City is subject to certain legal claims in the normal course of business. Management does not expect the resolution of these claims will have a material impact on the City's financial condition or results of operations. C. FEDERAL AND STATE FUNDS Amounts received or receivable from federal and state agencies are subject to agency audit and adjustment. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of funds which maybe disallowed by the agencies cannot be determined at this time although the City expects such amounts, if any, to be immaterial. D. TAX INCREMENT DISTRICTS The City's tax increment districts are subject to review by the State of Minnesota Office of the State Auditor {OSA). Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they are not aware of any instances of noncompliance which would have a material effect on the financial statements, E. PROGRAM COMPLIANCE Federal program activities are subject to financial and compliance regulation. To the extent that any expenditures are disallowed or other compliance features are not met, a liability to the respective grantor agency could result. 64 CITY OF BROOKLYN CENTER, MINNESOTA NOTES T4 FINANCIAL STATEMENTS December 31, 2004 F. GRANTS The City approved grants in the amount of $500,000 to Boca Limited Partnership. The grant requires repayment if certain requirements are not met. In turn, the City would be required to return the funds to Hennepin County. G. SUBSEQUENT EVENTS On February 1, 2005 the City paid off the principal amounts outstanding for the 199? General Obligation Police and Fire Building Bonds and closed the obligation. Funding for this transaction was provided by the sale of the 2004 General Obligation Police and Fire Building Refunding bonds and sinking fund monies. On February 1, 2005 the City paid off the outstanding principal for the 1995 G.O. Tax Increment Bonds and closed the obligation. Funding for this transaction was provided by the 2004 G.O. Tax Increment Refunding Bonds. H. CONTINGENT LIABILITY The City entered into two limited tax increment notes with developers whereby the City shall pay the developers the lesser of the scheduled payment or available tax increment. whether a payment will occur and if so, the amount of the payment(s) are uncertain since all payments are dependent on the City receiving tax increment from the developer's project. As such, this liability has not been recorded in the financial statements. A schedule of the notes outstanding at December 3 1, 2004 is as follows: Amended Original 12/30/2000 Interest Maturity Note Principal Balance Rate Date Twin Lakes Business Park $ 2,414,199 $ 2,350,?26 8.00% ~ ~No maturity daze is set. Payments will continue until the principal is paid, or for 10 years, whichever comes furrst. Note 13 RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions and natural disasters 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 is considered immaterial to the financial statements. 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. 65 CITY OF BROOKLYN CENTER, MINNESOTA NOTES T4 FINANCIAL STATEMENTS December 31, 2004 Note 14 POST-EMPLOYMENT HEALTH CARE BENEFITS The City has provided post-employee health care benefits, as per the requirements of the City Council resolution, for certain retirees and their dependents since 1984. Full time employees have the option of retaining membership in the City's health insurance plan for which the City will pay the single person premium until such time as the retiree is eligible for Medicare coverage or at age 65, whichever is sooner. If the retiree desires to continue family coverage, the additional cost for family coverage shall be paid by the retiree to the City. There are two methods whereby an employee can qualify under this program. First, the employee, on the date of his~her retirement, must meet eligibility requirements for a full retirement annuity under PERA (Note 15A}without reduction of benefits because of age, disability, or any other reason for reduction. In addition, the employee must have been employed full time by the City for the last ten consecutive years prior to the effective date of retirement. Additionally, employees who are retiring aftertwenty-five years of consecutive service with the City and are eligible to receive a pension from PERA shall have the option of retaining membership in the City's health insurance plan for which the employee will pay the premium until such time as the retiree iseligible toreceive afull-retirement annuity under PERA or PERA police. At that time, the City will pay the single-person premium until such time as the retiree is eligible for Medicare coverage or at age 65, whichever is sooner. Employees participate in this program on a voluntary basis. As of December 31, 2004,12 employees currently participate in this program. The cost of City paid health care premiums for the years ended December 31, 2004 and 2003 was $58,445 and $38,615, respectively. Fund liabilities are paid on apay-as-you-go basis with investment earnings of the Fund. The $1,548,581 recorded as a liability is not an actuarially determined amount, but the City's best estimate of the future liability. The liability will remain unchanged until a thorough analysis of future liabilities is performed. Note 15 DEFINED BENEFIT PENSION PLANS -STATEWIDE A. STATEWIDE- PERA PLAN DESCRIPTION All full-time and certain part-time employees of the City are covered by defuaed benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA}. PERA administers the Public Employees Retirement Fund (PEKE} and the Public Employees Police and Fire Fund (PEPFF}which are cost-sharing, multiple-employer retirement plans. These plans are established and administered in accordance with Minnesota Statute, Chapters 353 and 354. PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership by statute are covered by the PEPFF, PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by State Statute, and vest after three years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. 66 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 1, 2004 The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last terminated their public service. PERA issues a publicly available financial report that includes financial statements and required supplementary information for PERF and PEPFF. That report may be obtained by writing to PERA, 60 Empire Drive #200, St. Paul, Minnesota, 55103-2088 or by calling (651)296-7460 or 1-800-652-9026. FUNDING POLICY Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. PERF Basic Plan members and Coordinated Plan members are required to contribute 9.10% and 5.10%, respectively, of their annual covered salary. PEPFF members are required to contribute 6.20% of their annual covered salary. The City is required to contribute the following percentages of annual covered payroll: 11.78% for Basic Plan PERF members, 5.53% for Coordinated Plan PERF members, and 9.30% for PEPFF mernbers, The City's contributions to the Public Employees Retirement Fund for the years ending December 31, 2004, 2003 and 2002 were $223,220, $309,237 and $299,954, respectively. The City's contributions to the Public Employees Police and Fire Fund for the years ending December 31, 2004, 2003 and 2002 were $ 272,860, $257,234 and $255,923, respectively, The City's contributions were equal to the contractually required contributions for each year as set by state statute. B. PENSION PLAN -BROOKLYN CENTER FIRE DEPARTMENT RELIEF ASSOCIATION PLAN DESCRIPTION The City contributes to the Brooklyn Center Fire Department Relief Association (the Association) which is the administrator of a single employer retirement system to provide a retirement plan (the Plan) to volunteer firefighters of the City who are members of the Association. The Association issues a financial report which is available at City offices. FUNDING POLICY AND ANNUAL PENSION COST The City levies property taxes at the direction of and for the benefit of the Plan and passes through state aids allocated to the Plan, all in accordance with enabling State statutes. The minimum tax levy obligation is the financial contribution requirement for the year less anticipated state aids., 67 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 CONTRIBUTIONS Total contributions to the plan in 2003 were $124,123, of which $0 was levied by the City of Brooklyn Center and $124,123 was from the State of Minnesota. The actuarially determined contribution based on an actuarial valuation performed at January 1, 2004 was $70,401, which represents funding far normal cost of $70,401 and administration of $0. Actual contributions have continued at higher levels to allow for a transition to a defined contribution plan in the future. These higher payments are irrevocable and do not affect the level of future City contributions. They do not constitute an asset of the City. The information below is the most recent data available. Actuarial valuation date 12/3112003 Actuarial cost method Entry age normal cost method Amortization method Level dollar amount amortized on a closed basis Remaining amortization period 18 years Actuarial assumptions: Investment rate of return 7.5% compounded annually Discount rate for obligations 7.50% Proj ected salary increases Not applicable Post retirement benefits None Inflation rate Not applicable THREE-YEAR TREND INFORMATION Three Year Trend Information Annual Percentage Net Year Pension of APC Pension Ending Cost (APC) Contributed Obligation 12/31/2001 $ 118,508 100% $0 12/31/2002 118,508 100% 0 1211312003 124,123 100% 0 68 CITY OF BROOKLYN CENTER, MINNESOTA NOTES T4 FINANCIAL STATEMENTS December 31, 2004 SCHEDULE OF FUNDING PROGRESS Assets in Excess of Actuarial Actuarial Actuarial (Unfunded) Valuation Value of Accrued Accrued Funded Date Assets Liability Liability Ratio 1213112001 $ 2,925,352 $ 2,608,543 $ 316,809 112.10% 1213112002 ~ 2,540,231 2,478,786 61,445 102.50% 12130/2003 3,090,185 2,781,175 309,010 111.00% RELATED PARTY INVESTMENTS As of December 31, 2004, the Association bell no securities issued by the City or other related parties. 69 This page has been left blank intentionally. 70 CITY OF BROOKLYN CENTER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION ~ Statement 9 BUDGETARY COMPARISON SCHEDULE -GENERAL FUND Page 1 of b For The Year Ended December 31, 2004 Variance with Final Budget - Budgeted ,Amounts Actual Positive Revenues: Original Final Amounts {Negative} Taxes: Property taxes and market value homestead credit $ 9,212,152 $ 9,212,152 $ 9,344,727 $ 152,575 Penaltiesandinterest - - 3,909 3,909 Lodging tax 660,000 660,000 656,859 (3,141 } Total taxes 9,872,152 9,872,152 10,025,495 153,343 Licenses and permits: Liquor and beer 107,700 107,700 118,910 11,210 Building permits 350,000 350,000 280,270 {69,730) Mechanical permits 55,000 55,000 49,137 14,137 Sewer and water permits 1,000 1,000 2,187 1,187 Plumbing permits 35,000 35,000 33,569 {1,431} Garbage licenses 3,100 3,100 3,080 {20) Taxicab licenses - - 1,300 1,300 Mechanical licenses 4,000 4,000 5,984 {16) Pawn shop licenses 12,000 12,000 3,000 {9,000) Service station licenses 2,800 2,800 2,545 {255) Vehicle dealer licenses 1,750 1,750 1,750 Bowling licenses 720 720 720 - Cigarettelicenses 3,000 3,000 3,938 938 Sign permits 3,000 3,000 2,572 {428} Rental dwelling permits 71,000 71,000 93,042 22,042 Amusement licenses 2,000 2,000 1,450 {550} Electrical Permits 40,000 40,000 40,107 107 ROW permits - - 7,481 7,481 Miscellaneous business license 4,000 4,000 7,035 3,035 Total licenses and permits 698,070 698,070 678,077 {19,993} Intergovernmental: State: Local government aid 877,555 877,555 877,555 - Policepension aid 250,000 250,000 254,525 4,525 PERA aid 34,365 34,365 34,365 - Firepersonpension aid 92,500 92,500 158,991 66,491 Police training 16,400 16,400 15,040 {1,360) E-911 phone service 15,000 15,000 20,618 5,618 Miscellaneous grants 49,396 49,396 58,116 8,720 Total intergovernmental 1,335,216 1,335,214 1,419,210 83,994 Charges for services: General government charges 30,670 30,670 36,324 5,654 Public safety charges 18,450 18,450 23,534 5,084 Recreation fees 273,150 273,1 SO 314,415 41,265 Community Center fees 304,550 304,550 303,784 {766} Total charges far services 626,820 626,820 678,057 51,237 71 CITY OF BROOKLYN CENTER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 9 BUDGETARY COMPARISON SCHEDULE -GENERAL FUND Page 2 of 6 For The Year Ended December 31, 2004 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts {Negative) Revenues: (continued) Fines and forfeits $ ZZ5,000 $ 225,000 $ 254,980 $ 29,980 Miscellaneous: Investment earnings 150,000 150,000 97,825 (52,175) Change in faix value of investments - - (11,617) (11,617) Other 75,000 75,000 93,702 18,702 Total miscellaneous 225,000 225,000 179,910 (45,090) Total revenues 12,982,258 12,982,258 13,235,729 253,471 Expenditures: General government: Mayor and council: Current: Personal services 50,989 50,989 46,633 4,356 Materials and supplies 100 100 20 80 Contractual services 77,319 77,319 80,900 (3,581) Total mayor and council 128,408 128,408 127,553 855 Administrative (Manager, Clerk, HR) offices: Current: Personal services 439,131 439,131 446,335 (7,204) Materials and supplies 4,850 4,850 2,908 1,942 Contractual services 47,700 47,700 31,947 15,753 Total administrative office 491,681 491,681 481,190 10,491 Elections and voter registration: Current: Personal services 53,580 53,580 55,930 {2,350) Materials and supplies 1,000 1,000 1,331 (331) Contractual services 31,075 31,075 35,506 {4,431) Total elections and voter registration 85,655 85,655 92,767 {7,112) Assessor's office: Current: Personal services 221,275 221,275 211,409 9,866 Materials and supplies 2,550 2,550 1,324 1,226 Contractual services 38,486 38,486 34,889 3,597 Total assessor's off ce 262,311 262,311 247,b22 14,689 Finance: Current: Personal services 429,382 429,382 403,530 25,852 Materials and supplies 1,550 1,550 1,540 10 Contractual services 10,950 10,950 22,220 {11,270) Total finance 441,882 441,882 427,290 14,592 72 CITY OF BROOKLYN CENTER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement g BUDGETARY COMPARISON SCHEDULE -GENERAL FUND Page 3 of 6 For The. Year Ended December 31, 2004 Variance with Final Budget - BudgetedAmounts Actual Positive Original Final Amounts (Negative} Expenditures: General government (continued}: Legal: Current: Personal services $ 250,000 $ 250,000 $ 251,222 $ (1,222) Government buildings: Current; Personal services 246,868 246,868 243,714 3,154 Materials and supplies 55,600 55,600, 48,603 6,997 Contractual services 253,013 253,013 326,391 (73,378) Total government buildings 555,481 555,481 618,708 (63,227) Information Technology: Current: Personal services 155,478 155,478 156,112 (634) Materials and supplies 16,000 16,000 16,039 (39) Contractual services 163,013 163,013 167,094 (4,081 } Total information technology 334,491 334,491 339,245 (4,754} Total general government 2,549,909 2,549,909 2,585,597 (35,688) Public safety: Police protection; Current: Personal services 4,426,172 4,426,172 4,538,475 (112,303) Materials and supplies 92,372 92,372 86,927 5,445 Contractual services 812,046 812,046 785,021 27,025 Total current 5,330,590 5,330,590 5,410,423 (79,833} Capital outlay 800 800 - 800 Total police protection 5,331,390 5,331,390 5,410,423 (79,033) Fire protection; Current: Personal services 428,350 428,350 453,377 (25,027) Materials and supplies 48,000 48,000 56,660 (8,660) Contractual services 195,867 195,867 209,094 (13,227) Total current 672,217 672,217 719,131 (46,914} Capital outlay 20,700 20,700 - 20,700 Total fire protection 692,917 692,917 719,131 (26,214) 73 CITY OF BROQKLYN CENTER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION ~ Statement 9 BUDGETARY COMPARISON SCHEDULE -GENERAL FUND Page 4 0~ 6 For The Year Ended December 31, 2004 Variance with Final Budget - BudgetedAmounts Actual Positive Original Final Amounts (Negative) Expenditures: Public safety (continued): Protective inspection: Current; Personal services $ 389,797 $ 389,797 $ 379,524 $ 10,273 Materials and supplies 4,050 4,050 2,560 1,490 Contractual services 66,441 66,441 75,642 (9,201) Total protective inspection 460,288 460,288 457,726 2,562 Emergency preparedness: Current: Personal services 50,903 50,903 46,810 4,093 Materials and supplies 2,400 2,400 931 1,469 Contractual services 9,760 9,760 7,233 2,527 Total emergency preparedness 63,063 63,063 54,974 8,089 Total public safety 6,547,658 6,547,658 6,642,254 {94,596) Public works: Engineering department: Current: Personal services 4D8,187 408,187 433,932 (25,745) Materials and supplies 3,720 3,720 4,506 {786) Contractual services 38,857 38,857 33,702 5,155 Total current 450,764 450,764 472,140 {21,376) Capital outlay 6,000 6,000 - 6,000 Total engineering department 456,764 456,764 472,140 {15,376) Street department: Current: Personal services 646,561 646,561 633,756 12,805 Materials and supplies 144,400 144,400 97,376 47,024 Contractual services 534,189 534,189 476,168 58,021 Total street department 1,325,150 1,325,150 1,207,30D 117,850 Total public works 1,781,914 1,781,914 1,679,440 102,474 Community services: Social services: Current: Contractual services 73,024 73,024 67,324 5,700 74 CITY OF BROOKLYN CENTER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 9 BUDGETARY COMPARISON SCHEDULE -GENERAL FUND Page 5 0~ 6 For The Year Ended December 31, 2004 Variance with Final Budget - BudgetedAmounts Actual Positive 4ri~inal Final Amounts {Negative} Expenditures {continued): Parks and recreation: Administration: Current: Personal services $ 438,905 $ 438,905 $ 429,357 $ 9,548 Materials and supplies 11,000 11,000 5,991 5,009 Contractual services 51,450 S 1,450 53,451 (1,801) Total administration 501,555 501,555 488,799 12,756 Adult programs: Current: Personal services 111,163 111,163 53,329 57,834 Materials and supplies 10,300 10,300 14,459 {4,359) Cost of good sold to public 20,333 20,333 21,953 (1,420) Contractual services 20,623 20,623 89,201 {68,578} Total adult programs 162,419 162,419 179,142 (14,723) Teen programs Current: Personal services 3,434 3,434 1,795 1,439 Materials and supplies 700 700 571 129 Total teen programs 4,134 4,134 2,344 1,748 Youth programs: Current: Personal services 30,139 30,139 32,184 (2,447} Materials and supplies 7,570 7,570 7,173 397 Contractual services 9,100 9,100 460 8,440 Total youth programs 46,809 46,809 40,019 4,790 General programs: Current; Personal services 12,248 12,268 10,201 2,047 Materials and supplies 75 75 d5 10 Contractual services 4,500 4,500 8,484 (4,184) Total general programs 16,843 14,843 18,950 (2,107) Community center; Current: Personal services 378,169 378,169 374,234 3,933 Materials and supplies 17,750 17,750 12,853 4,897 Contractual services 51,800 51,800 66,644 {14,844} Total community center 447,719 447,719 453,733 (4,014) 75 CITY OF BROOKLYN CENTER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 9 BUDGETARY COMPARISON SCHEDULE -GENERAL FUND Page b of b For The Year Ended December 3 1, 2004 Variance with Final Budget - BudgetedAmounts Actual Positive Original Final Amounts {Negative) Expenditures; Parks and recreation (continued): Park maintenance: Current: Personal services $ 508,223 $ 508,223 $ 493,796 $ 14,427 Materials and supplies 56,100 56,100 42,079 14,021 Contractual services 301,221 301,221 263,114 38,107 Total park maintenance 865,544 865,544 798,989 66,555 Total parks and recreation 2,045,023 2,045,023 1,981,998 63,025 Economic development: Convention bureau: Current: Contractual services 330,000 330,000 311,698 18,302 Nondepar~mental: Expenditures not charged to departments: Current: Personal services 51,427 51,427 49,367 2,060 Materials and supplies 23,500 23,500 17,122 6,378 Contractual services 338,887 338,887 267,180 71,707 Total nondepartmental 413,814 413,814 333,669 80,145 Total expenditures 13,741,342 13,741,342 13,601,980 139,362 Revenues over (under) expenditures (759,084} (759,084) (366,251} 392,833 Other financing sources (uses): Transfers in -administrative services reimbursed 784,084 784,084 784,084 - Transfers to other funds (25,000) (25,000) (25,000) - Transfers of General Fund Equity - - (1,440,464) (1,440,464) Total other financing sources {uses) 759,084 759,084 {681,380} (1,440,464) Net increase (decrease) in fund balance $ - $ - (1,047,631) $ (1,047,631) Fund balance -January 1 8,017,080 Fund balance -December 31 $ 6,969,449 76 CITY OF BROOKLYN CENTER, MINNESOTA REQUIRED SLrPPLEMENTARY INFORMATION Statement 10 BUDGETARY COMPARISON SCHEDULE - EARLS BROwN TAX INCREMENT DISTRICT For the Year Ended December 3 1, 2004 Variance with Final Budget - Bud~eted Amounts Positive Original Final Actual (Negative) Revenues: Proper~r taxes $ 1,104,017 $ 1,104,017 $ 725,544 $ (378,473) Investment earnings (net of market value adjustment} - - 7;982 7,982 Total revenue 1,104,017 1,104,017 733,526 {370,491 } Expenditures: Services and other charges 25,000 25,000 30,652 {5,652} Revenues over {under) expenditures 1,079,017 1,079,017 702,874 (376,143} Other financing sources (uses): Transfers out (1,492,750) (1,492,750) {876,000) 616,750 Net increase (decrease) in fund balance $ {413,733) $ (413,733} (173,126) $ 240,607 Fund balance -January 1 ~ (1,685,368) Fund balance -December 31 $ (1,858,494} 77 CITY OF BROOKLYN CENTER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 11 BUDGETARY COMPARISON SCHEDULE -TAX INCREMENT DISTRICT N0.3 For the Year Ended December 31, 2004 Variance with Final Budget - BudgetedAmounts Positive Original Final Actual (Negative) Revenues: Properly taxes $ 3,472,780 $ 3,472,780 $ 2,880,586 $ (592,194) Investment earnings (net of market value adjustment) - - 127,140 127,140 Total revenues 3,472,780 3,472,780 3,007,726 (465,054) Expenditures: Current: Services and other charges - - 386,074 (386,074) Debt service: Bond issuance costs - - 42,371 (42,371) ~ Total expenditures - - 428,445 (428,445) 1 Revenues over expenditures 3,472,780 3,472,780 2,579,281 (893,499) Other financing sources (uses): Band proceeds - - 17,173,101 17,173,101 Transfers out (550,000) (550,000) - 550,000 Total other financing sources (uses) (550,000) (550,000) ~ 17,173,101 17,723,101 Net increase in fund balance $ 2,922,780 $ 2,922,780 19,752,382 $ 16,829,602 Fund balance -January 1 6,119,290 Fund balance -December 31 $ 25,871,672 78 CITY OF BROOKLYN CENTER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE NOTE TO RSI December 31, 2004 Note A LEGAL COMPLIANCE -BUDGETS The General Fund budget is legally adopted on a basis consistent with accounting principals generally accepted in the United States of America. The legal level of budgetary control is at the department level of the General Fund. The fallowing is a listing of General Fund departments whose expenditures exceed budgeted appropriations. Final Over Budget Actual Budget Major Funds: General Fund: Elections and voter registration 85,655 92,767 (7,112} Legal 250,000 251,222 (1,222) Government buildings 555,481 618,708 {63,227) Information technology 334,491 339,245 (4,754} Police protection 5,331,390 5,410,423 {79,033) Fire protection 692,917 ~ 719,131 {26,214) Engineering department 456,764 472,140 { 15,376} Adult recreation programs 162,419 179,142 (16,723} General recreation programs 16,$43 18,950 {2,107) Community center 447,719 453,733 (b,014) Special Revenue Funds: Earle Brown T.LF. District 25,000 30,652 (5,652} T.I.F. District # 3 ~ 428,445 (428,445} 79 This page has been Jeff blank intentionally, 80 NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS A Special Revenue Fund is used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. DEBT SERVICE FUNDS The Debt Service Funds are used to account for the accumulation of resources for, and payment of, interest, principal and related costs on general long-term debt. CAPITAL PROJECT FUNDS The Capital Project Funds account for fina~~cial resources to be used for the acquisition or construction of major capital facilities (other than those financed by Proprietary Funds). 81 CITY OF BROOKLYN CENTER, MINNESOTA COMBINING BALANCE SHEET Statement ~2 N~NMAJOR GOVERNMENTAL FUNDS December 3 1, 2004 Total Nonmajor Special Debt Capital Governmental Assets: Revenue Service Project Funds Cash and investments $ 1,711,655 $ 1,254,035 $ 4,391,495 $ 7,357,1$5 Receivables: Accounts 8,470 ~ - 166,267 174,737 Current taxes 1,116 5,194 - 6,310 Delinquent taxes 31,435 46,137 - 77,572 Due from other governments 58,392 - - 58,392 Advances to other funds - - 1,443,069 1,443,069 Restricted assets: Cash and investments - 7,341,594 - 7,341,594 Total assets 1,811,068 8,646,960 6,000,831 16,458,859 Liabilities and Fund Balance Liabilities: Accounts payable 30,467 - 65,951 96,418 Accrued salaries and wages 3,731 - - 3,731 Deferred revenue 39,869 46,137 - 86,006 Total liabilities 74,067 46,13 7 65,951 186,1 SS Fund balance: Reserved - 8,600,823 1,443,069 10,043,892 Unreserved: Designated - - 4,491,811 4,491,811 Undesignated 1,737,001 - - 1,737,001 Total fund balance 1,737,001 8,600,823 5,934,880 16,272,704 Total liabilities and fund balance $ 1,811,068 $ 8,646,960 $ 6,000,831 $ 16,458,859 82 CITY OF BROOKLYN CENTER, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement I3 CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For The Year Ended December 31, 2004 Total Nonmaj or Special - Debt Capital Governmental Revenues: Revenue Service Project Funds Taxes and special assessments $ 451,453 $ 768,774 $ - $ 1,220,227 Franchise fees - - 612,079 412,079 Intergovernmental 343,103 297,850 800,710 1,441,663 Charges for services ~ 11,428 - - 11,428 Investment earnings (net of market value adjustment) 24,342 68,498 39,433 132,473 Miscellaneous 356,207 - 149,465 505,672 Total revenues 1,186,533 1,135,122 1,601,887 3,923,542 Expenditures: Current: General government - - 8,444 8,444 Public safety 383,375 - - 383,375 Public works - - 4,928 6,928 Economic development 278,124 - - 278,126 Capital outlay: General government - - 137,456 137,456 Public safety 40,470 - - 40,470 Public works - - 487,765 487,765 Economic development 293,145 - - 293,145 Debt service: Principal retirement 231,513 2,515,000 - 2,746,513 Interest - 642,559 - 662,559 Fiscal agent fees - 48,453 - 48,453 Bond issuance costs - 26,800 26,800 Total expenditures 1,226,629 3,252,812 640,593 5,120,034 Revenues over (under) expenditures (40,096) {2,117,690) 961,294 {1,196,492) Other financing sources (uses): Bond proceeds - 7,515,000 - 7,515,000 Discount on bond proceeds - (16,890) - {16,890) Transfers in 223,523 876,000 1,415,464 2,514,987 Transfers out (223,523) - (533,816) (757,339} Total other financing sources {uses) - 8,374,110 881,648 9,255,758 Net increase {decrease) in fund balance (40,096) 6,256,420 1,842,942 8,059,266 Fund balance -January 1 1,777,097 2,344,403 4,091,938 8,213,438 Fund balance -December 31 $ 1,737,001 $ 8,600,823 $ 5,934,880 $ 16,272,704 83 This page has been left blank intentionally. 84 N~NMAJ~R SPECIAL REVENUE FUNDS The City of Brooklyn Center had the following Special Revenue Funds during the year: Housing and Redevelopment Authority Fund (HRA -This fund has authority to levy an ad valorem property tax for the purpose of conducting housing and redevelopment projects. These projects axe accounted for in the EDA Fund; all tax proceeds are transferred to that fund. Economic Development Authority Fund (EDA), -This fund was established to account for the Economic Development Authority (EDA} of Brooklyn Center. The EDA carries out development activities; it has authority to operate ail enterprise. The Earle Brawn Heritage Center operates under this authority and a statement of its operations can be found in the enterprise fund section of this report. The EDA also does redevelopment and housing projects, funded by an ad valorem property tax levy and transfers from the CDBG and HRA funds. Tax Increment District Na. 4Fund -This fund has the authority to collect tax increments which are used for various redevelo ment ro' ects within the Ci and for debt service p p J tY payments of bonds which were issued far the same purpose. Police Drug Forfeiture Fund -This fund was established to account for property and/or cash seized by Police Department personnel. Community Development Block Grant Fund (CDBG~, -This fund was established to account far 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; projects are accounted for in the Economic Development Authority Fund. City Initiatives Grant Fund -Revenues and expenditures from grants received from outside entities are accounted for in this fund. Grant programs for 2002 include several public safety grants, an after school enrichment recreation grant and a local planning assistance grant. 85 This page has been left blank intentionally. 86 CITY OF BROOKLYN CENTER SUBCOMBINING BALANCE SHEET Statement 14 N~NMAJOR SPECIAL REVENUE FUNDS December 31, 2004 Total Economic Tax Police City Nonmajor Development Increment Drug Initiatives Special Authority District Forfeiture Grant Revenue Fund No. 4 Fund Fund Funds Assets Cash and investments $ 1,462,846 $ 80,123 $ 45,465 $ 123,201 $ 1,711,655 Accounts receivable - 8,098 - 372 8,470 Current taxes receivable 1,116 1,116 Delinquent taxes receivable 31,435 - - - 31,435 Due from other governments 26,855 - 473 31,064 58,392 Total assets $ 1,522,272 $ 88,221 $ 45,938 $ 154,637 $ 1,811,068 Liabilities and Fund Balance Liabilities: Accounts payable $ 215 $ 40 $ 21,230 $ 8,982 $ 30,467 Accrued salaries and wages 2,494 - - 1,237 3,731 Deferred revenue 31,435 - - 8,434 39,869 Total liabilities 34,144 40 21,230 18,653 74,067 Fund balance: Unreserved 1,4$8,128 88,181 24,708 135,984 1,737,001 Total liabilities and fund balance $ 1,522,272 $ 88,221 $ 45,938 $ 154,637 $ 1,811,068 87 CITY OF BROOKLYN CENTER SUBC4MBTNING STATEMENT QF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJaR SPECIAL REVENUE FUNDS For The Year Ended December 31, 2004 Housing and Economic Redevelopment Development Authority Authority Fund Fund Revenues: Property taxes $ 223,523 $ - Intergovernmental - 54,273 Charges for services - - Investmentearnings (net of market value adjustment) - 19,721 Miscellaneous - 257,984 Total revenues 223,523 331,980 Expenditures: Current: Personal services - 118,432 Supplies - 475 Services and other charges - 143,888 Capital outlay - 293,145 Debt service - - Total expenditures - 556,140 Revenues over (under) expenditures 223,523 (224,160) Other financing sources (uses): Transfers in ~ 223,523 Transfers out (223,523) - Total other financing sources (uses) (223,523) 223,523 Net increase in fund balance - (637) Fund balance -January 1 - 1,488,764 Fund balance -December 31 $ - $ 1,48$,129 88 Statement 15 Tax Total Increment Police City Nonmajor District Drug Initiatives Special No, 4 Forfeiture Grant Revenue Fund Fund Fund Funds $ 227,930 $ - $ - $ 451,453 - - 288,830 343,103 - - 11,428 11,428 130 1,022 3,449 24,342 - 24,470 71,751 356,207 228,040 27,492 375,478 1,184,533 387 - 108,268 227,287 - 21,578 190,849 212,902 14,744 14,904 47,774 221,312 - 40,470 - 333,b15 231,513 - - 231,513 24b,d44 76,952 34b,893 1,226,629 (18,584} (49,440) 28,585 (40,094) - - - 223,523 - - - (223,523) (18,584) (49,4b0) 28,585 (40,09b} 10b,7b5 74,1 d8 107,398 1,777,097 $ 88,181 $ 24,708 $ 135,983 $ 1,737,001 89 CITY OF BROOKLYN CENTER, MINNESOTA SPECIAL REVENUE FUND -HOUSING AND REDEVELOPMENT AUTHORITY FUND Statement I6 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL For The Year Ended December 3 1, 2004 Budgeted Amounts Actual Original Final Amounts Revenues: Property taxes $ 225,423 $ 225,423 $ 223,523 Expenditures - - - Revenues over expenditures 225,423 225,423 223,523 Other financing sources (uses): Transfers out (225,423) (225,423) (223,523) Net increase in fund balance $ - $ - - Fund balance -January 1 - Fund balance -December 31 $ - 90 CITY OF BROOKLYN CENTER, MINNESOTA SPECIAL REVENUE FUND -ECONOMIC DEVELOPMENT AUTHORITY FUND Statement 17 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL For The Year Ended December 31, 2004 Budgeted Amounts Actual Original Final Amounts Revenues: Intergovernmental $ - $ - $ 54,273 Investment earnings (net of market value adjustment) - - 19,721 Miscellaneous 12,000 12,000 257,986 Total revenues 12,000 12,000 331,980 Expenditures: Current: Personal services 166,817 166,817 118,432 Supplies 1,550 1,550 475 Services and other charges 69,056 69,056 143,888 Capital outlay - - 293,145 Total expenditures 237,423 237,423 556,140 Revenues over (under) expenditures (225,423} (225,423} (224,160) Other financing sources (uses): Transfers in 225,423 225,423 223,523 Total other financing sources (uses) 225,423 225,423 223,523 Net increase (decrease) in fund balance $ - $ - (637) Fund balance -January 1 1,488,766 Fund balance -December 31 $ 1,488,129 91 CITY OF BRQOKLYN CENTER, MINNESOTA SPECIAL REVENLrE FUND -TAX INCREMENT DISTRICT N0.4 FUND Statement 18 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL For The Year Ended December 3 1, 2004 Budgeted Amounts Actual Original Final Amounts Revenues: Property taxes $ 344,503 $ 344,503 $ 227,930 Investment earnings (net of market value adjustment) - - 130 Total revenues 344,503 344,503 228,060 Expenditures: Current: Personal services - - ~ 387 Services and other charges 10,000 10,000 14,744 Debt service: Principal 335,890 335,$90 231,513 Total expenditures 345,890 345,890 246,444 Revenues over expenditures $ (1,387) $ (1,387) (18,584) Fund balance -January 1 ~ 106,765 Fund balance -December 31 $ 88,181 92 CITY OF BROOKLYN CENTER, M~NNESQTA SPECIAL REVENUE FUND -POLICE DRUG FQRFEITURE FUND Statement 1.9 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL For The Year Ended December 31, 2004 Budgeted Amounts Actual Qriginal Final Amounts Revenues: Forfeited drug money $ 25,000 $ 25,000 $ 24,470 Investment earnings (net of market value adjustment) - - 1,022 Total revenues 25,000 25,000 27,492 Expenditures: Current: Supplies 25,000 25,000 21,575 Services and other charges - - 14,904 Capital outlay - - 40,470 Total expenditures 25,000 25,000 74,952 Revenues over expenditures $ - $ - (49,460) Fund balance -January 1 74,1 dS Fund balance -December 31 $ 24,70$ 93 CITY OF BROOKLYN CENTER, MINNESOTA SPECIAL REVENUE FUND -COMMUNITY DEVELOPMENT BLOCK GRANT FUND Statement 24 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -BUDGET AND ACT[JAL For The Year Ended December 31, 2004 Budgeted Amounts Actual Original Final Amounts Revenues: Intergovernmental: ' Federal grants $ 244,811 $ 244,811 $ - Expenditwres: Current. Services and other charges 244,811 244,811 - Revenues over expenditures $ - $ - - Fund balance -January 1 - Fund balance -December 31 $ - 94 CITY OF BROOKLYN CENTER, MINNESOTA SPECIAL REVENUE FUND -CITY INITIATIVES GRANT FUND Statement 21 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE ~ BUDGET AND ACTUAL For The Year Ended December 31, 2004 Budgeted Amounts Actual Original Final Amounts Revenues: Intergovernmental $ 209,000 $ 209,000 $ 288,830 Charges for services 9,825 9,825 11,428 Investment earnings (net of market value adjustment) - - ~ 3,449 Miscellaneous 29,028 29,028 71,751 Total revenues 247,853 247,853 375,478 Expenditures: Current: Personal services 28,484 28,686 108,268 Supplies 134,370 134,370 190,849 Services and other charges 20,048 20,048 47,774 Total expenditures 183,104 183,104 346,893 Net increase (decrease} in fund balance $ G4,749 $ 64,749 28,585 Fund balance -January 1 107,398 Fund balance -December 31 $ 135,983 95 i I I II I' This page has been left blank intentionally. 96 NONMAJOR DEBT SERVICE FUNDS The City's Debt Service Funds account for three types of bonded indebtedness: * General Obligation Bonds • Tax Increment Bonds General Obligation Bonds Fund -This fund is used to account for the accumulation of resources for payment of general obligation bonds and interest thereon. Tax Increment Bonds Fund - This fund is used to account for the 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. ,I 97 CITY OF BROOKLYN CENTER, MINNESOTA SUBCOI~IBINING BALANCE SHEET Statement 2Z NONMAJOR DEBT SERVICE FUNDS December 31, 2004 Total Nonmaj or General Tax Debt Obligation Increment Service Bonds Bonds Funds Assets Cash and investments $ 949,447 $ 304,588 $ 1,254,035 Current taxes receivable 5,194 - 5,194 Delinquent taxes receivable 46,137 - 46,137 Restricted assets: Cash and investments 4,948,936 2,392,658 7,341,594 Total assets 5,949,714 2,697,246 8,646,960 Liabilities and Fund Balance Liabilities: Deferred revenue $ 46,137 $ - $ 46,137 Total liabilities 46,137 - 46,137 Fund balance: Reserved: Reserved for debt service 5,903,577 2,697,246 8,600,823 Total liabilities and fund balance $ 5,949,714 $ 2,697,246 $ 8,646,960 98 CITY OF BROOKLYN CENTER, MINNESOTA SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 23 CHANGES IN FUND BALANCE NONMAJOR DEBT SERVICE FUNDS For The Year Ended December 31, 2004 Total Nonmajor General Tax Debt Obligation Increment Service Bonds Bonds Funds Revenues: Property Tax $ 768,774 $ - $ 768,774 Intergovernmental 297,850 - 297,850 Investment earnings (net of market value adjustment) 52,145 16,353 68,498 Total revenues 1,118,769 16,353 1,135,122 Expenditures; Principal 740,000 1,775,000 2,515,000 Interest 375,692 286,867 662,559 Fiscal agent fees 45,770 2,683 48,453 Bond issuance costs - 26,800 26,800 Total expenditures 1,161,462 2,091,350 3,252,812 Revenues over (under) expenditures (42,693) (2,074,997} (2,117,690) Other financing sources (uses): Bond proceeds 5,045,000 2,470,000 7,515,000 Discount on bond proceeds (6,439) (10,451} (16,890} Transfers in - 876,000 876,000 Total other financing sources (uses) 5,038,561 3,335,549 8,374,110 Net increase (decrease) in fund balance 4,995,868 1,260,552 6,256,420 Fund balance -January 1 907,709 1,436,694 2,344,403 Fund balance -December 31 $ 5,903,577 $ 2,697,246 $ 8,600,823 99 This page has been left blank intentionally. 100 NONMAJOR CAPITAL PROJECT FUNDS The City of Brooklyn Center had the following Capital Project Funds during the year: Capital Reserve Emer~encv Fund -This fund was established in 1997 to account for monies held in reserve for catastrophic losses or unforeseen capital items. Capital Improvements Fund -This fund was established in 1968 to provide funds, and to account for the expenditure of such funds, for major capital outlays including, but not limited to, construction or acquisition of maj or permanent facilities having a relatively long life; andlor 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. Municipal State Aid Construction Fund -This fund was established to account for the state allotment of gasoline tax collections used for transportation related construction projects. Earl Brown Heritage Center Improvements Fund -This fund was established to provide a stable source of funds to pay for periodic capital improvements needed at the facility. Technolo~v Fund -This fund was established in 2043 to account for funds set aside for technology improvements or major technology renovations and replacements. 101 CITY OF BROOKLYN CENTER, MINNESOTA SUBCOMBINING BALANCE SHEET NONMAJOR CAPITAL PROJECT FUNDS December 31, 2004 Capital Reserve Capital Emergency Improvements Assets Fund Fund Cash and investments $ 1,344,261 $ 951,483 Accounts receivable - - Advance to other funds - 850,000 Total assets 1,344,24 1 1,801,483 Liabilities and Fund Balance Liabilities: Accounts payable - - Total liabilities - - Fundbalance: Reserved: Advances to other funds - 850,000 Unreserved: Designated 1,346,241 951,483 Total fund balance 1,346,241 1,801,483 Total liabilities and fund balance $ 1,346,241 $ 1,801,483 102 Statement Z4 Municipal Earle Brown Total State Aid Heritage Nonmajor for Center Street Capital Construction Improvements Reconstruction Technology Projects Fund Fund Fund Fund Funds $ 5,304 $ 187,399 $ 1,360,763 $ 540,285 $ 4,391,495 - - 165,128 1,139 166,267 593,069 - - - 1,443,069 598,373 187,399 1,525,891 541,424 6,000,831 - 65,951 - - 65,951 - 65,951 - - 65,951 593,069 - - - 1,443,069 5,304 121,448 1,525,891 541,424 4,491,811 598,373 121,448 1,525,891 541,424 5,934,880 $ 598,373 $ 187,399 $ 1,525,891 $ 541,424 $ 6,000,831 103 CITY 4F BROOKLYN CENTER, MINNESOTA SLIBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR CAPITAL PROJECT FUNDS For The Year Ended December 3 1, 2004 Capital Reserve Capital Emergency Improvements Fund Fund Revenues: Franchise fees $ - $ - Intergovernmental - 106,200 Investment earnings (net of market value adjustment) 9,488 9,336 Miscellaneous - 122,910 Total revenues 9,688 238,444 Expenditures: Services and other charges - 6,928 Capital outlay - 487,765 Total expenditures - 494,693 Revenues over (under} expenditures 9,688 (254,247} Other financing sources (uses}: Transfers in - 300,000 Transfers out - Totalother financing sources (uses} - 300,000 Net increase (decrease) in fund balance 9,688 43,753 Fund balance -January 1 1,336,573 1,757,730 Fund balance -December 31 $ 1,346,261 $ 1,801,483 104 Statement Z5 Municipal Earle Brown Total State Aid Heritage Nonmajor for Center Street Capital Construction Improvements Reconstruction Technology Projects Fund Fund Fund Fund Funds $ - $ - $ b 12,079 $ - $ d 12,079 694,510 - - - 800,710 3,543 2,741 9,457 4,868 39,633 3,555 - - 23,000 149,465 701,608 2,741 621,534 27,848 1,601,887 - - - 8,444 15,372 - 89,456 - 48,000 625,221 - 89,454 - 54,444 640,593 701,608 (86,715) 621,536 (28,576) 961,294 - 200,000 620,444 295,000 1,415,464 (533,814} - - - (533,816) (533,814} 200,000 420,464 295,000 881,648 167,792 113,285 1,242,000 264,424 1,842,942 430,581 8,163 283,891 275,040 4,091,938 $ 598,373 $ 121,448 $ 1,525,891 $ 541,424 $ 5,934,880 105 This page has been left blank intentionally. 106 NONMAJOR ENTERPRXSE FUNDS The City of Brooklyn Center had the following Enterprise Funds during the year: Recycling and Refuse Fund -This fund accounts for the operation of astate- mandatedrecycling program. Expansion into refuse collection will take place only when there is a clear advantage to be achieved by it. Street Light Utility Fund -This fund was created to account for expenses related to streetlights within the City. Benefiting properties axe billed for these expenses. 107 CITY OF BROOKLYN CENTER, MINNESOTA SUBC4MBINING STATEMENT QF NET ASSETS Statement 26 NONMAJQR ENTERPRISE FUNDS December 31, 2004 Total Nonmajor Recycling and Street Light Enterprise Refuse Fund Utility Fund Funds Assets: Cash and cash equivalents $ 36,427 $ 81,530 $ 117,957 Accounts receivable -net 50,747 47,243 98,010 Total assets 87,194 128,773 215,967 Liabilities: Accounts payable 750 11,985 12,735 Net assets: Unreserved 84,444 114,788 203,232 Total net assets $ 86,444 $ 116,788 $ 203,232 108 CITY OF BROOKLYN CENTER, MINNESOTA SUBCOMBINING STATEMENT OF REVENUES, EXPENSES, Statement 27 AND CI~IANGES IN FUND NET ASSETS NONMAJOR ENTERPRISE FUNDS For The Year Ended December 3 1, 2004 Total Nonrnaj or Recycling and Street Light Enterprise . Refuse Fund Utility Fund Funds Operating revenues: Sales and user fees $ 214,347 $ 208,121 $ 422,468 Operating expenses: Supplies - 77 77 Other services 221,443 11,618 233,061 Insurance 1,378 1,279 2,657 Utilities - 152,677 152,677 Total operating expenses 222,821 165,651 388,472 Operating income (loss} {8,474) 42,470 33,996 Nonoperating revenues (expenses}: Investment earnings (net of market value adjustment) 981 1,974 2,955 Transfer to capital project funds - (51,000} {51,000) Total nonoperating revenues (expenses} 981 {49,026) (48,045) Change in net assets {7,493) {6,556} {14,049) Net assets - ranuary 1 93,937 123,344 217,281 Net assets -December 31 $ 56,444 $ 116,788 $ 203,232 109 CITY OF BRUUKLYN CENTER, MINNESOTA SUBCOMBINING STATEMENT OF CASH FLOwS Statement 28 NONMAJOR ENTERPRISE FUNDS For The Year Ended December 3 1, 2004 Total Nonmaj or Recycling and Street Light Enterprise Refuse Fund Utility Fund Funds Cash flows from operating activities: Receipts from customers $ 211,111 $ 205,036 $ 416,147 Payments to suppliers (222,985} (153,823) (376,808) Net cash flows from operating activities (11,874} 51,213 39,339 Cash flows from non capital financing activities Transfers out - (51,000) (51,000) Cash flows from investing activities: Interest on investments 981 1,974 2,955 Net increase in cash and cash equivalents {10,893} 2,187 (8,706} Cash and cash equivalents -January 1 47,320 79,343 126,663 Cash and cash equivalents -December 31 $ 36,427 $ 81,530 $ 117,957 Reconciliation of operating income to net cash provided (used) by operating activities: Operating income {loss} $ {8,474) $ 42,470 $ 33,996 Adjustments to reconcile operating income (loss) to net cash provided by {used for} operating activities: Changes in assets and liabilities: Decrease (increase} in receivables (3,23d} (3,085} (6,321) Increase {decrease) in payables (164) 11,828 11,664 Net cash flows from operating activities $ {11,874) $ 51,213 $ 39,339 110 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. The City's Internal Service Funds included in this section are: Public Employees Compensated Absences Fund -This fund accounts for payment of unused vacation and sick leave time and the allocation of such costs to user departments. Public Employees Retirement Fund -This fund accounts for certain health care insurance benefits for City employees who retire before age 65. Substantially all of the City's full-time police and fire employees and all other full-time employees hired before July 1,1989 may be eligible for those benefits from the time they quality for an unreduced PERA pension until they reach age 65 or become eligible for Medicare. In the event that future costs would exceed earnings, other funds would be charged for the costs associated with their employees. Central Garage Fund -This fund was established to account for the acquisition and maintenance of all City vehicles and rolling stock equipment. Vehicle and equipment maintenance, repair, and replacement will be provided from rental rates which the Central Garage charges City operating departments for use of the equipment. ill CITY OF BRO©KLYN CENTER, MINNES©TA SLIBCQNIBINING STATEMENT OF NET ASSETS Statement Z9 INTERNAL SERVICE FUNDS December 31, 2004 Central EE Retirement EE Comp Garage Benefit Absences Total Assets: Current assets: Cash and cash equivalents $ 4,779,713 $ 1,529,053 $ 881,890 $ 7,190,656 Accounts receivable -net 10,038 1,849 - 11,887 Inventories - at cost 28,120 - - 28,120 Total current assets 4,817,871 1,530,902 881,890 7,230,663 Noncurrent assets: Capital assets: Machinery and equipment 5,807,809 - - 5,807,809 Less: Allowance for depreciation (3,764,502) - - (3,764,502} Net capital assets 2,043,307 - - 2,043,307 Total assets 6,861,178 1,530,902 881,890 9,273,970 Liabilities: Current liabilities: Accounts payable 52,947 - - 52,947 Accrued salaries payable 3,370 - - 3,370 Compensated absences payable - - 857,305 857,305 Total current liabilities 56,317 - 857,305 913,622 Noncurrent liabilities: Accrued health insurance liability - 1,548,581 - 1,548,581 Total liabilities 56,317 1,548,581 857,305 2,462,203 Net assets: Invested in capital assets, net of related debt 2,043,307 - - 2,043,307 Unrestricted 4,761,554 (17,679} 24,585 4,768,460 Total net assets $ 6,804,861 $ (17,679} $ 24,585 $ 6,811,767 112 CITY OF BROOKLYN CENTER, MINNESOTA SUBCOMBINING STATEMENT OF REVENUES, EXPENSES AND Sta~emen~ 30 CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS For The Year Ended December 31, 2004 Central EE Retirement EE Comp Garage Benefit Absences Total Operating revenues: Charges for services $ 1,047,210 $ - $ 74,078 $ 1,121,288 Operating expenses: Personal services 271,841 58,465 74,078 404,384 Supplies 237,261 - - 237,261 Other services 89,566 - - 89,566 Insurance 43,497 - - 43,497 Utilities 2,555 - - 2,555 Depreciation 523,346 - - 523,346 Total operating expenses 1,168,066 58,465 74,078 1,300,609 Operating income (loss} {120,856) (58,465} - (179,321) Nonoperating revenues (expenses); Investment earnings {net of market value adjustment} 70,462 23,646 12,394 106,502 Gain {loss) on sale of capital asset 29,202 - - 29,202 Other revenue 50,316 - - 50,31 d Total nonoperating revenues {expenses) 149,980 23,646 12,394 186,020 Change in net assets 29,124 {34,819) 12,394 6,699 Net assets -January 1 6,775,737 17,140 12,191 6,805,068 Net assets -December 31 $ 6,804,861 $ {17,679) $ 24,585 $ 6,811,767 113 CITY OF BRUUKLYN CENTER, MINNESOTA SUBCONIBINING STATEMENT OF CASH FLOWS Statement 31 INTERNAL SERVICE FUNDS For The Year Ended December 31, 2004 Central EE Retirement EE Comp Garage Benefit Absences Total Cash flows from operating activities: Receipts from interfund services provided $ 1,040,667 $ - $ 74,078 $ 1,114,745 Payments to suppliers (345,016} - - (345,016} Payments to employees (275,990) (55,968) - (337,958) Miscellaneous revenue 79,519 . - - 79,519 Net cash flows from operating activities 494,180 (S 5,968) 74,078 S 11,290 Cash flows from capital and related financing activities: Acquisition and construction of capital assets (325,324) - - (328,324) Cash flows from investing activities; Interest on investments 70,462 23,646 12,394 106,502 Net increase in cash and cash equivalents 238,318 (35,322) 84,472 289,468 Cash and cash equivalents -January 1 4,541,395 1,564,375 795,418 4,901,188 Cash and cash equivalents -December 31 $ 4,779,713 $ 1,529,053 $ 881,890 $ 7,190,656 Reconciliation of operating income to net cash provided {used) by operating activities: Operating income (loss} $ {120,856) $ {58,465) $ - $ (179,321) Adjustments to reconcile operating income (loss} to net cash flows from operating activities: Depreciation 523,346 - - 523,344 Changes in assets and liabilities: Decrease (increase) in receivables (4,543) (1,849) - (8,392) Decrease (increase) in inventories (13,248) - - (13,268) Increase (decrease) in payables 41,131 - - 41,131 Increase (decrease) in accrued expenses {7,149) 1,346 74,078 68,275 Other nonoperating income 79,519 - - 79,519 Total adjustments 617,036 (503) 74,078 690,611 Net cash provided by operating activities $ 496,1 SO $ (58,968) $ 74,075 $ S 11,290 114 STATISTICAL SECTION 115 CITY 4F BR~~KLYN CENTER, MINNESQTA GOVERNMENT-WIDE EXPENSES BY FUNCTION Last two f scal years (Unaudited) Fiscal General Public Public Community Parks and Economic Non- Year~ Government Safety Works Services Recreation Development Departmental 2003 $ 2,565,088 $ 7,184,536 $ 3,002,223 $ 225,365 $ 2,169,482 $ 1,759,585 $ 342,142 2004 2,725,137 7,538,277 2,482,819 67,324 2,255,231 1,683,025 333,669 Government-wide expenses are not available for years prior to 2003 116 Table 1 interest on E, Brown other Long-Term Municipal Golf Heritage Water Sanitary Storm Enterprise Debt Liquor Course Center Utility Sewer Drainage Funds Total $ 922,253 $ 724,897 $ 290,990 $ 2,109,1 d6 $1,445,955 $ 2,567,032 $ 838,421 $ 370,972 $ 24,718,107 1,268,449 939,244 271,127 2,180,229 1,533,923 2,310,645 756,593 38$,472 24,734,364 117 CITY OF BROOKLYN CENTER, MINNESOTA GOVERNME]VT-WIDE REVENUES Last twa fiscal years (Unaudited) Program Revenues Charges Operating Capital Fiscal Far Grants and Grants and Property Years Services Contributions Contributions Taxes 2003 $ 10,802,128 $ 1,627,020 $ 1,079,134 $ 10,407,613 2004 10,712,432 933,104 2,423,411 11,239,251 Government-wide expenses are not available for years prior to 2003 118 Table 2 General Revenues Grants and Contributions Not Restricted Unrestricted Gain on Tax Lodging Franchise to Specific Investment Sale of Increments Taxes Fees Program Earnings Fixed Assets Other Total $ 3,527,881 $ 641,267 $ - $ 1,413,913 $ 508,494 $ 13,976 $ 829,572 $ 30,870,998 3,834,060 656,859 612,079 923,374 491,524 29,202 640,218 32,515,514 119 CITY OF BROOKLYN CENTER, MINNESOTA GEIVERAL GOVERNMENTAL EXPENDITURES BY FUNCTION Table 3 Last Ten Fiscal Years (Unaudited) Admin. Other Fiscal General Public Public Community Parks and Economic Non- Services Financial Year Government Safety Works Services Recreation Development Departmental Reimb. Uses Total 1995 $2,069,978 $4,59&,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 (411,534) - 10,908,340 1997 1,992,251 5,089,072 1,868,130 79,800 2,186,686 248,779 311,436 (b61,058) 624,637 11,739,733 1998 2,133,829 5,137,108 1,955,108 73,066 2,075,180 313,792 312,625 (731,737) 1,427,001 12,695,972 1999 2,257,957 5,336,622 1,904,205 83,295 2,132,511 383,927 343,925 (670,390) 1,591,039 13,363,091 2000 2,421,762 5,437,360 2,100,865 95,148 2,216,098 397,507 419,789 {?95,737) 1,532,238 13,825,030 2001 2,504,392 5,660,600 2,142,064 106,034 2,205,018 392,805 372,056 {767,504} 1,661,877 14,277,342 2002 2,553,426 6,184,663 1,986,692 103,491 2,026,409 340,659 366,282 (596,541} 1,863,910 14,828,991 2003 2,497,608 6,272,875 1,649,405 91,581 2,068,034 316,059 332,608 {607,221) 2,194,655 14,815,604 2004 2,585,597 6,642,254 1,679,440 67,324 1,981,998 311,698 333,669 (784,084) - 12,$17,896 (a} Table includes General Fund only. Source: City Finance Department records 120 CITY OF BROOKLYN CENTER, MINNESOTA GENERAL GOVERNMENTAL REVENUES AND OTHER FINANCING SOURCES BY SOURCE Table 4 Last Ten Fiscal Years (Unaudited) General Other Fiscal Property Licenses Inter- Charges for Court Financing Year Taxes and Permits governmental Services Fines Miscellaneous Sources Total 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 1998 7,949,744 549,067 3,875,392 771,614 193,688 425,319 - 13,764,824 1999 8,219,491 763,960 3,911,480 739,054 205,460 194,353 - 14,033,798 2000 8,745,172 632,549 4,076,169 779,060 180,676 234,740 - 14,648,366 2001 8,411,513 ~788,d29 4,135,282 688,453 230,408 697,886 - 14,952,171 2002 11,257,003 823,996 2,843,629 575,748 278,557 312,303 - 16,091,236 2003 10,799,074 827,685 1,948,457 678,875 290,408 358,411 - 14,902,910 2404 10,025,495 678,077 1,419,210 678,057 254,984 179,910 1,465,464 14,701,193 State aids were reduced for cities in 2002. Cities were permitted to levy back the aid reductions within specific limitations. Note: Table includes General Fund only. Source: City Finance Department records. 121 CITY OF BROOKLYN CENTER, MINNESOTA SPECIAL ASSESSMENT BILLINGS AND COLLECTIONS Table 5 Last Ten Fiscal Years (Unaudited) Percent Current Collections Total Special Percent Collection Collections Fiscal Assessment of of Prior Total to Current Year Billings Amount Billings Years Collections Levy 1995 $4?4,852 $458,439 96.14% $5,497 $443,936 97.29% 1994 485,019 459,316 94.70% 4,617 443,933 95.45% 1997 49$,022 475,0$0 95.39% 2,470 477,550 95.89% 1998 541,477 524,609 94,88% 24,870 549,479 101.48% 1999 688,691 65?,537 95,48% 34,532 692,069 100.49% 2000 900,481 861,$$8 95.71% 20,620 $$2,508 9$.00% 2001 $6$,414 787,769 90.71% 20,620 $0$,389 93.09% 2002 927,799 863,460 93.07% 65,678 929,13 $ 100.14% 2003 ~ 1,064,631 1,018,908 95.?1% 75,045 1,093,953 102.75% 2004 966,412 920,604 95.26% 44,563 945,167 99.87% 122 CITY OF BR44KLYN CENTER, MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN Table 6 December 31, 2004 (Unaudited} December 31, 2004 Market Value $ 1,959,999,100 Applicable Debt Limit (Percentage) 2% Debt Limit $ 39,199,982 Amount of Debt Applicable to Debt Limit: Total Bonded Debt $ 39,410,000 Less: Special Assessment Bonds (5,710,000) State Aid Street Bonds (575,000} Tax Increment Bonds (22,445,000} Utility Revenue Bonds (230,000} Total Debt Applicable to Debt Limit $ 10,450,000 Legal Debt Margin $ 28,749,982 Source: City Finance and Assessing Department records 123 CITY OF BR4UKLYN CENTER, MINNESOTA RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR Table 7 GENERAL BONDED DEBT TO TOTAL GENERAL EXPENDITURES Last Ten Fiscal Years (Unaudited} Total Debt Service Total General as a Percent Fiscal Debt Fund of General Year Principal Interest Service Expenditures Expenditures 1995 $825,000 $1,075,976 $1,900,976 $10,559,497 18.00% 1996 5,125,000 1,106,661 6,231,661 10,908,340 57.13% 1997 1,135,000 1,017,128 2,152,128 11,739,733 18.33% 1998 1,285,000 1,244,923 2,529,923 12,695,972 19.93% 1999 2,085,000 1,323,609 3,408,609 13,363,091 25.51 % 2000 3,970,000 1,282,512 5,252,512 13,825,030 37.99% 2001 2,805,000 1,149,623 3,954,423 14,277,342 27.70% 2002 3,000,000 1,034,139 4,034,139 14,828,991 27.20% 2003 3,220,000 905,518 4,125,518 14,815,604 27.85% 2004 3,520,000 881,016 4,401,016 12,$17,896 34.33% Source: City Finance Department records (1) Amounts for 1996 are higher because of the defeasance of the Tax Increment Bonds of 1985. 124 CITY QF BROOKLYN CENTER, MINNESOTA MISCELLANEOUS STATISTICAL DATA Table 8 December 31, 2004 Page 1 of 2 (Unaudited} Date of incorporation February 14,1911 Date of adoption of City Charter November 8,1966 Date City Charter effective December 8,1966 Form of government Council-Manager Fiscal year begins January 1 Area of City ~ 8112 square miles Miles of streets: City 105.856 County 6.49 State ~ 10.79 Miles of sidewalks 34.8 Miles of trails 11,2 Miles of storm sewers 84,02 4 Number of street lights: Owned by NSP ~ 1,039 Owned by City 182 City employees as of Decenr~ber 31, 2004: Authorized regular full-time 150 Temporary or part-time 287 Total 437 Fire protection: Number of stations 2 Number of fill-time employees 1 Number of volunteer firefighters 40 Police protection: Number of stations 1 Number of sworn police officers 42 Number of other full-time employees 15 Number ofpart-time employees 7,~ 125 CITY OF BROOKLYN CENTER, MINNESOTA Table S MISCELLANEOUS STATISTICAL DATA Pa e 1 of 2 December 31, 2003 g (Unaudited) Parks and Recreation: Park roperty totals 527 acres developed to serve a wide variety of recreational interests. The P areas include playlots, playgrounds, playfields, trails, nature areas and an arboretum. Arche ran e 1 rY g 20 Playgrounds Park shelters 8 Picnic shelters 10 Ice skating rinks 6 Hocke rinks 5 y ~ 18 Softball diamonds Baseball diamonds 5 Tennis courts 14 Basketball courts ~ 19 Footballlsoccer fields 4 Municipal water plant: Number of connections 8,963 Average daily consumption in gallons 3,346,46$ Peak daily consumption in gallons 7,012,000 Plant capacity -gallons per day 17,652,040 Miles of water mains 115 Number of fire hydrants 974 Number of wells ~ Number of elevated reservoirs 3 Storage capacity in gallons 3,000,400 V~ater rate per thousand gallons $1.03 8 Municipal sewer plant: Number of connections 8,799 Miles of sanitary sewer 145.61 Daily disposal capacity in gallons 10,938,244 Number of lift stations ~ 10 Residential rate per quarter $55.61 Municipal liquor stores (off sale): Number of leased stores 2 2044 sales $4,026,679 Elections: Last general election -November 5, 2002 Registered voters 16,476 Votes cast 10,678 Percentage of registered voters voting 64.03% Last municipal election -November 2, 2004 Registered voters 17,776 Notes cast 13,843 Percentage of registered voters voting 77.64% 126 CITY OF BROOKLYN CENTER, MINNESOTA TAX LEVIES AND TAX COLLECTIONS Table 9 Last Ten Fiscal Years {Unaudited) Collections Percentage Collections of Current of Levy of Prior Total Delinquent Year's Taxes Collected Year's Taxes Collections Delinquent Taxes as Year Tax During Fiscal During During Total as Percent of Taxes Percent of Collected Levy Period Fiscal Period Fiscal Period Collections Tax Levy Receivable Tax Levy 1995 $6,501,197 $6,347,437 97.94% ($75,445) $6,291,792 94.78% $2$8,717 4.44°/a 1994 6,495,206 6,358,392 97.89% (11,917) 6,346,475 97.71°/a 208,862 3.22% 1997 6,746,487 4,424,336 98.22% {57,329} 6,569,007 97.37% 184,089 2.76% 1998 7,684,521 7,643,080 99.43% {51,327) 7,591,753 98,77% 146,907 1,91% 1999 7,896,858 7,824,214 99.08% 30,110 7,854,324 99.44% 165,924 2.10% 2000 $,099,965 $,044,715 99.32% 178,306 8,223,021 101.52% 75,070 0.93% 2001 $,420,298 8,119,854 96.43% (36,320) 8,083,534 96.00% 414,408 4.92% 2002 10,442,170 10,232,645 ~1~ 97.99% 219,067 10,451,712 100.09% 329,237 3.15% 2003 10,355,287 10,048,17$ {1~ 97.03% 214,252 10,262,430 99.10% 391,585 3.78% 2004 10,778,957 10,300,458 95.56% 273,794 10,574,252 98.10% 1,320,727 12.25% Source. City Finance Department Records {1~ Current tax collections include the market value homestead credit 127 CITY OF BROOKLYN CENTER, MINNESOTA ASSESSED VALUE AND ESTIMATED MARKET VALUE OF ALL TAXABLE PROPERTY Last Ten Fiscal Years (Unaudited) 1995 1996 1997 1998 Population (1) 28,463 28,502 28,515 28,535 Real property: Tax capacity: City: Residential $9,045,048 $9,485,333 $9,182,859 $9,309,893 Nonresidential 13,567,573 12,837,157 11,082,436 10,657,588 Area-wide allocation (687,295) (586,003) 226,287 537,406 21,925,326 21,736,487 20,491,582 20,504,887 Less tax increment district 1,230,055 1,495,154 1,665,054 2,054,659 Total assessed value 20,695,271 20,241,333 18,826,528 18,450,228 Estimated market value 961,811,400 976,115,400 1,010,170,000 1,085,605,600 Personal property: Assessed value 622,500 573,984 502,668 452,849 Estimated market value 13,532,600 12,477,900 12,566,700 13,006,300 Assessed value as a percent of estimated market value 2.19% 2,11% 1.89% 1.72% Per capita valuations: Assessed value $749 $730 $678 $662 Estimated market value $34,267 $34,685 $35,867 $38,501 Source: City Assessing Department and Hennepin County records (1) The Metropolitan Council is the source of population estimates, 128 Table 10 1999 2000 2001 2002 2003 2004 28,535 29,172 29,172 29,172 29,185 29,185 $9,976,862 $8,928,738 $8,495,196 $9,362,788 $10,532,558 $12,177,307 11,002,424 14,093,094 9,225,991 9,430,533 9,821,308 9,903,157 1,504,330 746,438 635,875 875,145 1,097,596 1,023,618 22,483,616 23,768,270 18,357,062 19,668,466 21,451,462 23,104,082 2,533,878 3,296,624 2,450,218 2,538,825 3,134,417 3,122,665 19,949,738 20,471,646 15,906,844 17,129,641 18,317,045 19,981,417 1,164,801,300 1,311,055,600 1,475,520,200 1,659,884,400 1,840,115,300 1,944,996,000 437,707 452,680 262,882 273,072 280,568 294,377 13,053,100 13,593,500 13,312,100 13,927,600 13,927,600 15,003,100 1.73°/a 1.5$% 1.21% 1.03% 1.00% 1,03% $714 $717 $618 $597 $697 $695 $41,278 $45,408 $51,036 $57,377 $63,078 $67,188 129 CITY OF BROOKLYN CENTER, MINNESOTA DIRECT AND OVERLAPPING TAX RATES (PER $1,000) AND TAX LEVIES Last Ten Fiscal Years (Unaudited} Tax Rates in Tax Capacity Rates (1 } School Districts (2) Year Vo-Tech No. 286 No. 279 Collectible ~ City (2} School Earle Brown Osseo 1995 31.090 0.000 76.861 7a.142 1996 3x.344 0.000 58.682 67.155 1997 32.875 0.000 56.260 62.666 1998 35.214 0.000 51.567 56.386 1999 36.269 ~ 0.000 59.807 54.337 2000 34.645 0.000 44.356 53.284 2x01 35.996 a.aaa 47.139 56.764 2aa2 58.901 a.aaa 26.338 30.213 2aa3 54.021 0.000 49.817 35.042 2004 52.437 a.aaa 39.892 23.709 Tax Levies in Dollars School Districts (2} Year Vo-Tech No. 286 No. 279 Collectible City (1) School Earle Brown Osseo 1995 $ 6,Sa 1,197 $ - $ 5,367,479 $ 3,288,144 1996 6,495,2x6 - 4,850,400 3,863,698 1997 6,746,487 - 4,472,204 3,708,238 1998 7,686,521 - 4,322,965 4,042,283 1999 7,896,858 ~ 4,293,610 3,800,203 20x0 8,099,965 - 4,218,907 3,670,533 2001 8,420,298 - 4,238,284 4,073,436 2002 10,442,170 - 2,032,254 2,064,398 2003 10,354,806 - 2,483,847 4,342,594 2004 11,319,018 - 2,966,885 4,239,545 Source: City Assessing Department and Hennepin County Records. (1) Tax levy includes Brooklyn Center EDA and HRA. (2) Beginning in 1998, a portion o~the school levy shown was paid by the state as an education homestead credit. The state-paid portion totaled $2,333,306 in 2401. 130 Table 11 Hennepin . School Districts (2} County & Total City, School, and County No. 281 No. l l Special No. 28d No. 279 No. 281 No. 11 Robbinsdale Anoka Districts Earle Brown Osseo Robbinsdale Anoka 67.197 61.402 45.370 151.763 145.044 142.099 136.304 64.762 64.387 44.170 133.196 141.669 139.276 138.901 63.757 55.588 42.174 131.309 137.715 138.806 130.637 65.350 51.824 45.869 132.650 137.469 146.433 132.907 47.716 54.856 50.276 146.352 140.882 134.261 141.401 48.492 51.792 37.679 127.806 136.743 131.942 135.242 46.678 52.224 45.803 128.938 138.583 128.477 134.023 30.092 29.082 57.795 143.034 146.788 146.909 145.778 29.179 26.941 58.364 162.202 147.427 141.564 139.326 34.258 21.050 51.310 148.397 132.214 142.763 129.555 Hennepin Total County & City, No. 281 No. l 1 Special Schools and Robbinsdale Anoka Districts County $ 4,814,025 $ 1,269,585 $ $,557,035 $ 29,797,465 4,397,705 1,441,657 9,403,100 30,451,766 3,899,126 1,361,059 8,854,518 29,041,634 3,750,650 1,420,3 O 1 8,964,681 3 0,187,401 3,150,416 1,276,178 9,471,114 29,888,379 3,116,096 1,316,096 9,916,918 30,338,515 3,076,541 1,407,502 9,677,991 30,894,052 2,015,705 685,458 9,001,798 26,241,783 2,808,387 1,402,903 10,152,265 31,544,802 3,119,986 1,456,125 10,573,789 33,675,348 131 CITY OF BROOKLYN CENTER, MINNESOTA RATIO OF NET BONDED DEBT TO ASSESSED VALUE AND Table I2 NET BONDED DEBT PER CAPITA Last Ten Fiscal Years (Unaudited) Less Ratio of Amounts Net Bonded Net Tax Gross in Debt Net Debt to Bonded Fiscal Estimated Capacity Bonded Service Bonded Tax Capacity Debt Per Year Population Value Debt (1 } Fund Debt Value Capita 1995 2$,463 $ 21,317,771 $ - $ - $ - $ - $ - 1996 2$,502 20,$15,317 - - - 0.00% - 1997 28,515 19,329,196 7,900,000 82,056 7,$17,944 40.45% 274.17 1998 28,535 1$,903,047 7,900,000 616,77$ 7,283,222 38.53% 255.24 1999 28,535 20,387,445 7,575,000 725,868 6,$49,132 33.59% 240.03 2000 29,172 20,924,324 7,175,000 725,930 6,449,070 30.$2% 221.07 2001 29,172 1$,357,062 6,760,000 831,651 5,928,349 32.29% 203.22 2002 29,172 1$,793,321 6,325,000 871,970 5,453,030 29.02% 1$6.93 2003 29,185 19,066,393 5,$75,000 958,509 4,916,491 25.79% 16$.46 2004 29,185 20,634,434 10,450,000 5,$9$,383 4,551,617 22.06% 155.96 Source: City Finance Department and Hennepin County records (1 } Amount does not include tax increment, state aid street, special assessment, or revenue bonds. 132 CITY OF BROOKLYN CENTER, MINNESOTA COMPUTATION OF DIRECT AND OVERLAPPING DEBT Table 13 December 3 1, 2004 {Unaudited} Governmental Unit City's Share Gross Debt Percent Amount Direct Debt - City of Brooklyn Center {1) $5,540,000 100.00% $5,544,000 Overlapping debt: School Districts. No. 281 Robbinsdale 160,400,000 5.40% 8,661,600 No. l l Anoka 186,506,003 1.60% 2,984,096 No. 279 Osseo 205,480,000 5.90% 12,123,320 No. 286 Earl Brown 31,050,000 100.00% 31,050,000 Mettopolitan Council 23,700,000 0.80% 189,600 Metropolitan Transit 176,310,000 0.90% 1,586,790 Hennepin County 382,605,000 1.70% 6,504,285 Hennepin Regional RR Authority 48,555,000 1.70% 825,435 Hennepin County Park Reserve District 40,010,000 2.30% 920,230 Total overlapping debt 1,254,616,003 44,845,356 Total direct and overlapping debt $1,260,156,003 $70,385,356 . Direct Overlapping Total Debt Debt Comuarative Net Debt Ratios Chargeable to City Debt to tax capacity value $20,634,434 341.11% 26.85% 314.26% Debt to market value $1,854,042,900 3.80% 0.30% 3.50% Per capita debt, population 29,185 $2,4~ 11.70 $189.82 $2,221.88 Source: City Finance Department, Hennepin County, and I.S.D, #11 records. { 1) Includes only general obligation debt which is repaid through property taxes, net of refunded bonds. 133 CITY OF BROOKLYN CENTER, MINNESOTA PRINCIPAL TAXPAYERS Table 14 2004 (Unaudited) Of Total City 2004 Net Tax Capacity Taxpayer Type of Business Tax Capacity Value Talisman Brookdale, LLC Shopping Center $1,044,060 5.06% Regal Cinemas, Inc, Theater 234,350 1.14% Brookdale Cornier, LLC Retail 204,850 0.99% BCC Associates, LLC Office 191,250 0.93% Twin Lake North Apartement 184,613 0.89% Medtronic Industrial 175,650 0.85% Marshall Fields Retail 164,450 0.81 % Center Point Apartment 150,750 0.73% Sears Roebuck and Co. Department Store 150,220 0.73% Wickes Furniture Company Industrial 146,110 0.71 Total Market Value $2,648,303 12.$4% Total City Tax Capacity $20,634,434 Source: City Assessing Department records 134 CITY OF BROOKLYN CENTER, MINNESOTA PROPERTY VALUE AND CONSTRUCTION Table 15 Last Ten Fiscal Years (Unaudited) Commercial New Residential Building Permits Issued Construction Construction Property Value Estimated Year Number Cost Value Units Value Commercial Residential ~ Non-Taxable 1995 603 $ 11,948,205 $ 9,541,847 2 $ 153,000 $ 297,268,000 $ 678,076,000 $110,458,200 1996 607 16,647,400 12,527,095 18 1,126,000 284,786,600 703,806,700 108,473,400 1997 796 18,274,806 10,905,475 3 225,000 287,163,000 722,917,000 111,226,700 1998 1,482 23,216,525 14,261,800 4 612,900 314,457,700 770,883,400 152,964,200 1999 1,745 44,188,569 10,528,100 7 679,600 333,929,200 832,334,600 155,999,500 2000 1,299 20,450,844 13,254,213 3 311,800 358,293,500 837,022,400 164,002,100 2001 956 63,947,218 10,750,000 4 464,000 367,026,000 970,653,400 165,437,000 2002 976 58,089,510 18,680,014 10 1,335,000 529,390,100 1,130,494,300 163,517,000 2003 886 53,918,257 25,423,800 9 1,370,100 557,643,000 1,251,467,299 169,892,900 2004 792 21,613,050 15,653,457 15 1,616,000 567,637,200 1,377,358,800 225,988,400 Source: City Finance, Assessing and Community Development Department records. 135 CITY OF BRQOKLYN CENTER, MINNESfJTA DEMOGRAPHIC STATISTICS Table 16 Last Ten Fiscal Years (Unaudited) School Enrollments (4) City Minneapolis No.28b Fiscal ,Unemployment St. Paul No. l 1 No. 279 No. 281 Earle Year Population (1} Rate (2} C.P.I. (3) Anoka Osseo Robbinsdale Brown 1995 2$,463 3.1 % 2.9% 39,152 21,479 13,595 1,658 1996 28,502 3.0% 3.1% 39,874 21,664 14,099 1,664 1997 28,515 2.3% 2.5% 40,402 21,992 14,010 1,746 1998 28,535 1.9% 2.Q°/a 40,923 22,028 13,966 1,788 1999 28,535 2.4% 2.2% 40,964 22,171 13,800 1,734 2000 29,172 3.0% 2.6% 41,314 22,017 13,706 1,682 2001 29,172 3.9% 3.3% 41,419 22,041 13,754 1,724 2002 29,172 4.8% 4.2% 41,383 21,$24 13,656 1,732 2003 29,185 5.9% 1.7°/a 41,254 21,69$ 13,765 1,732 2004 29,185 5.7% 4.4% 41,592 21,620 16,196 1,691 (1 } Source: Metropolitan Council (2) Source: Minnesota Deparment of Economic Security; average rate for the past year (3) Source: U.S. Bureau of Labor (4) Source: Minnesota Department of Children, Families & Learning (Brooklyn Center has parts of these four Districts within the City) 136 CITY OF BROOKLYN CENTER, MINNESOTA SCHEDULE OF REVENUE BOND COVERAGE Table 17 Last Ten Fiscal Years {Unaudited} Net Non- Net Revenue Operating Operating Gross Revenue to Debt Year Revenue Revenue Revenue Expenses{ 1 } Available Principal Interest Total Service Storm Drainage Fund 1995 $788,897 $72,881 $861,778 $184,990 $676,788 $ - $90,625 $90,625 7.47:1 1996 822,980 47,363 870,343 204,969 665,374 110,000 86,390 196,390 3.39:1 1997 856,920 130,651 987,571 198,662 788,909 155,000 79,754 234,754 3.36:1 1998 940,012 916,860 1,856,872 199,694 1,657,178 165,000 72,227 237,227 6.99:1 . 1999 999,867 1,257,928 2,257,795 156,562 2,101,233 170,000 64,193 234,193 8.97 :1 2000 1,074,619 313,068 1,387,687 154,183 1,233,504 180,000 59,144 239,144 5.16:1 2001 1,129,502 280,740 1,410,242 .157,110 1,253,132 190,000 53,166 243,166 5.15 :1 2002 1,377,638 435,548 1,813,186 231,741 1,581,445 200,000 36,701 236,701 6.68 :1 2003 1,264,512 148,854 1,413,366 295,522 1,117,844 210,000 24,990 234,990 4.76:1 2004 1,276,778 21,212 1,297,990 228,974 1,069,016 220,000 25,835 245,835 4.35:1 Source: City Finance Department records, { 1) Excludes depreciation and interest on bonds. 137 CITY QF BR~4KLYN CENTER, MINNESOTA SCHEDULE OF INSURANCE COVERAGE Table 18 Effective December 31, 2004 Page 1 of 2 (Unaudited} Policy Period Type of Coverage and Details From To Liability Limits I. Statutory Liability to Employees a. Worker's Compensation (participant in the 04/01/04 04/01/05 Statutory Limits League of Minnesota Cities Insurance Trust Self Insured Workers' Compensation Program} II. Liability to the Public a. Comprehensive general liability includes 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' liability (1 } Bodily injury 04/01/04 04/01/OS $1,000,000 occurrence (2) Property damage 04/01/04 04101lOS $1,000,000 occurrence (3} Personal injury 04/01/04 04/01/OS $1,000,000 occurrence b. Automobile liability, comprehensive 04/01/04 04/01/05 (1) Bodily injury $1,000,000 occurrence (2) Property damage $1,000,000 occurrence (3) Uninsured motorist $1,000,000 occurrence c. Liquor stores' dram shop ~ 01/01/04 01/01/05 $1,000,000 occurrence $1,000,000 annual aggregate d, Golf Course and Central Park liquor liability 01/01/04 01/01/05 $1,000,000 occurrence $1,000,000 annual aggregate e. Personal accident, Volunteers O 1/01104 01/01/05 $100,000 accidental death $100,000 permanent impairment $400/week short-term disability $1,000 medical $500,000 per accident 138 CITY OF BRQUKLYN CENTER, MINNESOTA SCHEDULE OF INSURANCE COVERAGE Table IS Effective December 31, 2003 Page 2 of 2 (Unaudited) Buildings, Structures, Policy Period and Contents Type of Coverage and Details From To (Replacement Cost} III, Insurance on City Property 04/01/04 04/01/05 a. Public and institutional property, all risk, blanket $57,995,249; $2,500 deductible replacement value on buildings. Annual aggregate limit of $1,000,000 on terrorism (1) Civic CenterlCity Hall $14,65 $,040 (2) East Fire Station $1,604,350 (3) West Fire Station $3,433,760 (4) Municipal Service Garage $3,529,552 (5) Municipal Garage -Property in the Open $75,461 (6) Elevated Water Towers - 3 locations $4,312,000 (7) Park Shelter Buildings - 9 locations $$38,844 (8) Pump Houses - 8 locations $1,167,122 (9) Lift Stations - 9 locations $1,646,621 (10) Meter Station $21,327 (11) Salt Storage Building $533,190 (12) Outdoor lighting systems - 7 locations $351,882 (13) Leased Liquor Store - BC Liquor # 1 ~ $494,100 (14) Leased Liquor Store - BC Liquor #2 $500,000 (14) Pedestrian Bridge -12 locations $2,117,297 (15) Picnic Shelters - to locations $366,670 (16}Earle Brown Heritage Center $12,392,304 (17) Centerbrook Golf Course Club House $431,774 (18) Centerbrook~Golf Course -Garage $51,353 (19) Lions Park Concession Stand $48,500 (20) Police Station $5,784,$00 (21}Centerbrook Golf Course Maintenance Building $220,600 (22) Centerbrook Golf Course -Storage Building $103,000 (23) Centerbrook Golf Course -Property in the Open $207,802 (24) Parks -Property in the Open $656,782 Liability Limits b. Boiler and machinery 04/01/04 04/01/05 $40,559,353 Boiler Limit $2,500 deductible c, Automotive physical damage 04/01/04 04/01/05 (1 } Comprehensive ACV - $2,500 deductible (2} Collision ACV - $2,500 deductible IV Criminal Acts a. Faithful performance blanket position $500,000 per occurrence b, Money and securities (broad form) Various c. Depositor's forgery $100,000 139 This page has been left blank intentionally. 140