HomeMy WebLinkAbout2007 06-04 CCP Joint Work Session with Financial Commission AUENDA
CITY COUNCIL FINANCIAL COMMISSION JOINT WORK SESSION
June 4, 2007
6:30 P.M.
Citv Council Chambers
1. Call to Order
2. Comprehensive Annual Financial Report for 2006
a. Auditor's Opinion and Audit Committee Letter HLB Tautges Redpath
b. Summary of Financial Statements Information Staff
3. 2008 Budget Overview
4. Other Business
5. Adjourn
a
Cit o Broo n Center
v v
Comprehensive Annua Financia Report
for the year ended December 31 2006
Anatom o
f the CAFR
y
ntroductory Section
Transmitta Letter
List of �fficers
Organizationa Chart
Financia Section
Inde endent Auditor's Report (Opinion)
p
Management's Discussion and Ana ysis (MD&A)
Government Wide Financia Statements
z
Anatom o
ft
he CAFR
v
Fund Financia Statements
Major funds
Governmenta Funds
Proprietary Funds
Notes to the Financia Statements
Required Supp ementary nformation
Combining ndividua Fund Statements
A non-major funds i
3 I
Anatom o t
he CA
FR
v
Statistica Section
Su ementa Materia s
pp
Report on Lega Comp iance
Report on I nterna Contro
Audit Committee Letter
4
Gover
nment W
ide Statements
Two State m e nts
State m e nt of N et Assets
Statement of Activities
nterfund Activit Removed
v
Tota Assets 140,811,395
Tota Liabi ities 34,705,598
et Assets 106 105, 797
Tota N
5
N ote s to t
he Financia. Statements
Note 1- Summar of Accountin Po icies
v
(pages 41— 48)
descri tion of the significant accounting po icies
p
and procedures of the City
N ote 3— Stewa rd s h i Co m i a n ce a n d
p� p
Accountabi it a es 50 52
y �p g
Excess of Expenditure over Appropriation
Deficit Fund Equities
6
m e nts
N ote s to t
he
Fi na ncia State
Note 4— Ca ita Assets (page 55)
p
Streets Mains Lines growing with the
reconstruction projects every year
Note 4— Lon Term Debt a es 59 62)
�p g
Issued 1,460,000 (GO Improvement)
Paid 2,875,000
Genera
I Fun
Desi nated Fund Ba ance 508,690
is 51.62% of 2007 Genera Fund Budget
Revenues exceeded Ex enditures by 284 ,239
p
Detai s in Statement 9 of the Required
Su ementar nformation
pp v
8
General Fund Revenues 2006
10,000,000
8,000,000
6,000,000
L
Q .,..,.,...v. .w,.,.. �...r...,,... ....,,,..,........_W..,,,...
W Budget
�Actual
4,000,000
2,000,000
,_.,r�.�
Property Tax Lodging Tax Licenses Federal State Charges for Fines Investment Other
Permits Revenue Revenue Service Income
Sources
9
General Fund Expenses 2006
6,000,000
5,000,000
4,000,000
_m_..__w� u
L
a 3,000,000
0
�I Budget
2,000,000 Actual
1,000,000
4 f i Y t 1 f 1 r 1
4 t a J y �e �Q 5 x,� e et �e J�
o �e� �,e� 0� �a`�� Qo�� Q �e eet ���e c ��c. �Q.� C, 0�,'c
Q�� r� �c�� �,Q a
t �c,� a
a ao a O a``
�a �a (,o Q
C?'�'�
Department
1�
Tax Incre
ment D�st
rict 3
werthan Ex ected Revenues
Lo p
Rebate to Brookda e in Tax court case
about 400,000 taxes p us interest
Garden Cracker Barre Acquisitions
O ive
2, 949, 642
ionat57 an
Additiona re ocat
513,271
Be innin s of the Da s nn acquisition
y
7,966
Ut
il t Fu
nds
v
Sanitary Storm
Water Sewer Sewer
Customer Receipts 1,807,939 2,910,510 1,273,153
Interest Income 67,357 106,275 70,739
Other Revenues 3,419 93,811
Operating Expenses 1,058,505 2,117,685 420,323
Other Expenses 34,815 5,392 59,361
Capital Asset Construction 692,064 658,069 571,589
Net Cash Flow 93,331 329,450 292,619
Beginning Cash 1,718,178 1,597,283 1,060,877
Ending Cash 1,811,509 1,926,733 1,353,496
12
Enter r'se Fu n s
p
BC Earle Brown
Liquor Centerbrook Heritaqe Center
Customer Recei pts 5,159,152 250,339 4,203,921
Interest Income 37,095 2,252 46,479
Other Revenues 7,894 105 37,644
Operating Expenses 4,850,087 258,533 3,908,687
Other Expenses 7,512
Transfers Out/(In) 125,000 (49,000) 300,000
Net Cash Flow 229,054 35,651 79,357
Beginning Cash 720,417 46,249 1,061,898
Ending Cash 949,471 81,900 1,141,255
13
Ot
her Fun
ds
T F# 1& T F# 2= Ea r e Brown T F District
still calculated and reported to State as separate
districts
Closing of TIF 1 in 2008
Closing of TIF 2 in 2010
Capita mprovements Fund
Park maintenance and improvements
Golf Course Loan
Centra Ga rage
owns and maintains all vehicles of the City
holds reserves for vehicle replacements
14
i �y,�;
a��
2 6 Audit Review
u �F� o0
�a���
Cit of Brookl n Center, Minnesota
y v
���P,
E ,p�
8
��x
q.
�°�hY� n e 4 2 Q 0 7
��o� �u
�,h���
E fn
�F
E
E: I
I
Andy Hering
x
E�
��E
s
r.
Meinber of HLB� Interna�rorr�l
�""i''�r�..��tC�t�..a'» Fi+�C��r�
z V
Re orts Issued
y�
E �t
nts
n�on on f nanc a stateme
f, O
p
'ttee ietter
Aud t Comm
nt�o
Re ort on nterna Co
p
'h
♦R
e ort on Com ance w�t
p p
��Ea V n nesota Statutes
E
�����k�
I
j;�
�+�£i E
y
€g�
S .F
:3,�� J
�`v:, i:�;� .af���.
n; i,
F'„ RK
�r(
F:
3'�
d
��'M.�"R�.,�iF�� �`�lC��M�It'�'.�" �I.u:�!��w
Member of HL�B i,rtif��national
3
t3>��;;
An n ual F' nancial Re ort
p
�E�=�v
E T
The financia statements are the res onsibi it of
�E E�
p y
management
�t�. The ro e of the ndependent Aud itor is to report on
1
the fair presentation of the financia statements
Audit standards fo owed:
GAAS
F�,
srr�
.f;�
�E GAGAS
E
s E�
��♦"C ean o inion" on the 2006 financia statements
p
E
�E� i.
k I
7 y
ar
ra
y
.i t,� ;i�',f
IVlem6er of HLB In��rnatit5n�l 3 '7''z��^+���� E�C±���ar�aw�la,; �1e+r�
�°r-
�t i.
���1��,�
�fi�
�t E.�
di"�
Governmental Business-type
Activities Activities
Expenses $19,503,000 $9,862,000
�f`E Less charges for services (2,179,000) (10,544,000)
�4� Less operating grants and contributions (749,000)
Less ca ital rants and contributions (2,209,000)
P 9
Net expenses funded by property taxes and other sources (14,366,000) 682,000
,n��
11,618,000
Property taxes
Tax Increment taxes 2,683,000
Franchise fees 658,000
Lodging taxes 739,000
i
y Unrestricted grants 702,000
Ei
i�;�. Investment income 1,928,000 337,000
Other 24,000
Interfund transfers 303,000 (303,000)
Total general revenues 18,655,000 34,000
r`
Increase in net assets $4,289,000 $716,000
Ef
1�f
y
3 tY8
��Y���
j g
Ivlember of HLB Internatior�al
T�`+��IC+,�t�i� �s-�dpr�t�s;� �..,�,�if
�E
t Performance
n Bud e
��r _�,�1
f
Favorab e Genera Fund bud et variances:
3 g
2006
Favorable
Budget
Budget Actual Variance
9?
Revenues $13,842,000 $14,415,000 $573,000
Expenditures 14,602,000 14,660,000 (58,000)
,�r
Revenues over (under) expenditures (760,000) (245,000) 515,000
Transfers in 830,000 529,000 (301,000)
Transfer out (70,000) (70,000)
Ei
E
Net increase in fund balance 214,000 214,000
Fund balance January 1 7,295,000
Fund balance December 31 $7,509,000
E
�a�
E �'�.,�j
3'(
k�� t' 'a.,
x/ s
l p.r s
7
f '�"'��r:at"1C��� �#+�+���'�hi.. �iEa�
Me.mber of FiLB intern�tional
mmittee Letter
Aud�t Co
��E��� Audit firm res onsibilit under U.S. audit standards.
p Y
E;.
E
Significant accounting policies
GASB 44
s���
E� Accounting estimates
Depreciation expense
E�F�
Health insurance liability
E N�
MCES liability
�y f� Land held for resale (LHFR)
E s
y E
I a �3�
�""n.�,
�i
t'
�E1.
�5 S� :.,t
6.
�Nl�r�f�er of HLB Iniern�tio�r�at. ;�`�"�"r�� ����mr�!°�,,
3 r ;(;yr,
�rs Audit Cammittee Let�er
M E:. :.,Is
ry
p��
e
q
Audit Ad ustments
1
s.�
E �I�
1�
811
I receivable 93
Additiona
Adjustment to LHFR ($208,000)
Payable for unbilled MCES flows ($580,465)
r Grant receivable ($39,784)
f����
�E��� Disagreements with management
�s����
Consultations with other auditors
�'�„��N.E;
Issues discussed rior to retention of auditor
ff�� p
��s
x�
n ered in erformin the audit
4 Difficulties encou t p g
E�
x.''
V 3 a
Member pf'HLB In#ecriational
7
Re ort on
Internal Control
"1
The 2006 Re ort is based on new standard (SAS
��fi p
112
����y
SAS 112 owered the thresho d for reporting of
�����M� interna contro matters and estab ish new
definitions
SAS 60 SAS 112
4
��x
Material Weakness Material Weakness
2i
...f
Reportable Condition
Significant Deficiency
�€M�� :f
s�
Other Matter
Other Matter
3
�i�,
�k
�3.
;s
u.. y
z
,n
p `�'�1�"M�+���i �'+�+�•�M�t"�"-1'"7tyr �v'"I�t��^ c
O
Nlemb��' of HLB �nternatioh�l
E
s
sr
I Cantrol
Re ort on Interna
Significant Deficiency defined as control
deficiency that adversely affects the entify's ability to initiate,
authorize, record, process, or report financial data reliably in
���F
accordance with GAAP, such that there is more than a remote
likelihood that a misstatement of an entity's financial statements
that is more than inconsequential wil! not be prevented or
g���-�� detected"
v�
'�s�€ ;u�
E
��1,,: ��a
W� �q�?
E
E
[�E"�ev'xy; i
j;
�'f���� 'q?
1���
7:9'S
3
�iV
I
3.�
i�
I c
Member of'HLB�an���ennatioctai
n Internal Control
Re o rt o
�'pfA-
9
six deficiencies noted:
Approval of journal entries
A roval of utilit billin ad�ustments
pp Y g J
f Determination of water consumption
f�i'�
�a E�
Li uor inventor ad ustments
q Y J
Financial statement corrections
Y 1
Approval for use of paid time off
E:
�E 4
��C�E� I
x,�
d R'
�m
M�rrtt�er of WLB Intarnatiott"al-' O '�"�rr,.,���,�r� �Ca��.�ar;�ae�t�,.
k
r,xF
State Com I'ance Re ort
Req u i red by M i n n esota Statute �6 .65
OSA estab ished a task force to deve op audit
guide for ega comp iance
Audit uide covers seven cate ories
g g
1) contracting and bidding
2) deposits and investments
3) conflicts of interest
w�l.
.p „,�s
4) public indebtedness
y
E e a
E
5) claims and disbursement
E
:F�
6) other miscellaneous provisions
H��
E �b
7) Tax increment provisions
no findin s of noncom iance for 2006
g p
F��"�`�
r s�:,.�
!1
MemberofHLBlnt�mation�l
11
t
i�:�
F���
3 Recent Standards
E�����
Audit standards
E���
SAS 103 Audit Documentafion
�{�h
SAS 104 to 111 Risk Assessment
Es�
Q' SAS 112 Reporting on Internal Control
,,€a�
SAS 113 Omnibus 2006
SAS 114 Auditor Communication to those Charged with
Y� Governance
b�
���,u
3�
Acco u n t i n sta n d a rd s
d g
GASB 44 Statistical Section
E
4 GASB 45 Other Post Employment Benefits
N
j
`Y k
s_
p v a
X
Member��c�fi`FiL6lnternational T
Memorandum
Date: 31 Ma 2007
Y
To: Mayor Willson
City Council Members
Members of the Financial Commission
4
i
From: Daniel Jordet, Director of Fiscal Support Services
Re: Comprehensive Annual Financial Report for 2006
Attached herewith are copies of the Comprehensive Annual Financial Report
(CAFR) for the year ended December 31, 2006. The CAFR is the authoritative
financial statement for the end of the fiscal year 2006 and is used primarily by
outside agencies to review and make determinations on the financial condition of
the City of Brooklyn Center. These outside agencies include the State Auditor,
prospective bond buyers and bond rating agencies.
Included with this CAFR are copies of the Report on Internal Control, Report on
Legal Compliance and Audit Committee Letter prepared by our auditors, HLB
Tautges Redpath, as part of their review and examination of these statements.
All of these documents will be reviewed and discussed at the Joint Work Session
of the City Council and Financial Commission on Monday, June 4, 2007 beginning
at 6:30 PM.
Please bring this copy of the materials with you to the work session.
cc: Curt Boganey, City Manager
I
1
Tautges Redpath, Ltd.
Certified Public Accountants and Consultants
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED 1N ACCORDANCE WITH
GOVF_RNMENT AUDI77NG STANDARDS
To the Honorable Mayor and
Members of the City Council
City of Brooklyn Center, MinnesoC�
We have audited the financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the Cit,y of
Brooklyn Center, Minnesota as of and for the year ended December 31, 2006, which
collectively comprise the City of Brooklyn Center, Minnesota's basic financial statements
and have issued our report thereon dated May 14, 2007. We conducted our audit in
accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in UovernmentAuditing Standards,
issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City of Brooklyn Center,
Minnesota's internal control over financial reporting as a basis for designing our auditing
procedures for the purpose of expressing our opinions on the financial statements, but not for
the purpose of expressing an opinion on the effectiveness of the City of Brooklyn Center,
Minnesota's internal control over financial reporting. Accordingly, we do not express an
opinion of the effectiveness of the City of Brooklyn Center, Minnesota's internal control over
financial reporting.
Our consideration of internal control over financial reporting was for the iimited purpose
described in the preceding paragraph and would not necessarily identify all deficiencies in
internal control over financial reporting that might be significant deficiencies or material
weaknesses. However, as discussed below, we identified certain deficiencies in internal
control over financial reporting that we consider to be significant deficiencies.
A control deficiency exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent or detect misstatements on a timely basis. A significant deficiency is a control
deficiency, or combination of control deficiencies, that adversely affects the entity's ability to
initiate, authorize, record, process, or report financiai data reliably in accordance with
4810 White Bear Parkway White Bear Lake, Minnesota 55110 I 651 426 7000 651 426 5004 Fax I www.hlbtr.com
HLB Tautges Redpath, Ltd. is a mem6er of International, a world-wide organization of accounting firms and business advisors.
Report on Internal Control over Financial Reporting
and on Compliance and Other Matters
Page 2
generally accepted accounting principies such that there is rnore than a remote likelihood that
a misstatement of the entity's financiai statements that is more than inconsequential wiil not
be pcevented or detected by tt�e entity's internal control over financial reporting. We consider
the deficiencies described in the accorr�panying schedule of findings and responses as items
2006-i through 2006-6 to be significant deficiencies in internal control over finar�cial
reporting.
A material weakness is a significant deficiency, or combir�ation of significant deficiencies,
that results in more than a remote likelihood that a material misstatement of the financial
statements will not be prevented or detected by the entity's internal control_
Our consideration of the internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and would not necessarily identify all
deficiencies in the internal control that might be significant deficiencies and, accordingly,
would not necessarily disclose all significant deficiencies that are also considered to be
material weaknesses. However, we believe that none of the significant deficiencies described
abave are material weaknesses.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Brooklyn Center,
Minnesota's financial statements are free of material misstatement, we performed tests �f its
compliance with certain provisions of laws, regulations, contracts and grant agreements,
noncompliance with which could have a direct and material effect on the determination of
financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an
opinion. The results of our tests disclosed no instances of noncompliance that are required to
be reported under Government Auditing Standards.
We also noted certain additional matters that we reported to management of the City of
Brooklyn Center, Minnesota in a separate letter dated May 14, 2007.
The City of Brooklyn Center, Minnesota's response to the findings identified in our audit are
described in the accompanying schedule of findings and responses. We did not audit the City
of Brooklyn Center, Minnesota's response and, accordingly, we express no opinion on it.
Report on Internal Control over Fi�ancial Reporting
and on Compliance and Other Matters
Page 3
Tt�is report is intended solely fo� the information and use of the Ciry of Brooklyn Center,
Minr►esota's City Council and management and is not intencled to be, and should not be, used
by anyone other than these specified parties.
l-�tr�
HLB TAUTGES REDPATH, LTD.
White Bear Lake, Minnesota
May 14, 2007
CITY OF BROOKLYN CENTER, MINNESOTA
Schedule of Findings and Responses
For The Year Ended December 31, 2006
2006-1 Approval of Journal Entries
Criteria: The design af an entity's internal cantrol system should include appropriate
safeguards so that misstatements due to error or fraud are detected in a timely manner.
Condition: Journal entries are prepared and recorded to update the general ledger_ The
entries are made for items such as recording depreciation, interfund transfers and adjustments
that may result from bank reconciliations. The preparation and recording of journal entries is
not subject to a review and approval process_
Cause: The City has not established procedures regarding review and approval of journal
entries.
Effect: By not having such controls, there is an increased risk that errors may occur and not
be detected by City management.
I�ecommendation: VVe recommend the City strengthen intert�al controls by establishing a
review and approval process, such as review and approval of journal entries that exceed a
pre-determined dollar threshold.
Views of Responsible Officials: A partial solution to this situation has been implemented
with the monthly approval of electronic disbursements. However, review of entries reIated to
bank reconciliations, monthly reporting of enterprise funds, interfund transfers and exchanges
has not yet been implemented. Even though there is not currently concern about the level of
trust and confidence in those staff preparing and entering such transactions a protective
procedure will be implemented to improve the structure of internal controls in this area.
CITY OF BROOKLYN CENTER, MINNESOTA
Schedule of Findings and Responses
For The Year Ended December 31, 2006
2006-2 Approval of Utility Billing Adjustments
Critericr_ The design of an entity's internal control system should include appropriate
safeguards so that misstatements due to error or fraud are prevented or detected in a timely
manner.
Conditio�z: Each month adjustments to utility accounts are made. These adjustments are for
a variety of reasons sucl� as abating penalties, correcting usage a�d other items. The utility
clerk has authority to make these adjustments. A record of these adjustments is maintained in
an adjustment book_ However, the adjustments are not reviewed and approved.
Cause: The City has not established procedures regarding review and approval of utility
billing adjustments_
Effect: By not having such controls there is an inereased risk that errors may occur and not
be detected by City management.
Recommendation: We recommend the City strengthen controls by establishing procedures to
provide for periodic review and approval of adjustments to customer accounts, such as
requiring approval for adjustments that exceed a pre-determined doilar threshold.
Views of Responsible O�cials: While there are no concerns with the level of trust and
confidence in staff performing this function, management understands the internal eontrol
concern being raised by the auditors. Management will develop and implement a system of
approval for utility account adjustments with defined parameters for maYimum adjustment
ailowed without further approvai.
CITY OF BROOKLYN CENTER, MINNESOTA
Schedule of Findinbs and Responses
For The Year Ended December 31, 2006
2006-3 Determinatio� of Water Consumption
Criteria: The design of an entity's internal control system should include appropriate
safeguards so that misstatements due to error or fraud are prevented or detected in a timely
manner.
Condition: The quarterly water billing for residential customers is based on consumptione
The City's method of obtaining consumption is from meter readings by the customer. There
is no procedure requiring periodic verification of residential meter readings. Without
periodic verification, there is a potential of under reported usage to occur and not be detected
in a timely manner.
Cause: The City has not established procedures regarding periodic verification of residential
meter readings.
Effect: By not having such controls, there is an increased risk that errors may occur and not
be detected by City management.
Recommendation: We recommend the City strengthen controls by establishing procedures to
periodically verify residential meter readings.
Views of Responsible Officials: The City Council recently approved the solicitation of
engineering services for development of an automated meter reading system plan. While this
condition will overiap some additional future financial reporting periods the process of
remedying this condition is underway and will clearIy and conclusively address this concern.
CITY OF BROOKLYN CENTER, MINNESOTA
Schedule of Findings and Responses
For The Year Ended December 31, 2006
2006-4 Liquor Inventory Adjustments
Criteria: The design of an entity's internal control system should include appropriate
safeguards so that misstatements due to error or fraud are prevented or detected in a timely
manner.
Condition: The City maintains a perpetual inventory of its liquor store inventory.
Periodically, City staff perfarms test counts of the actual inventory on hand and compare
these counts to the perpetual inventory records. During 2006, these test counts resulted in a
negative adjustment to inventory of $21,356 for Store #l.
Cause: Unknown.
Effect: By not having such controls there is an increased risk that errors may occur and not
be detected by management_
Recommendation: We recommend strengthening procedures by considering the followinge
l. Have employees from Store #2 perform test counts at Store #1 and have employees
from Store #1 perform test counts at Store #2.
2. Not allowing vendors distributors to leave until a manager can verify all product
invoiced has been delivered. Have a manager do this procedure for everything
delivered instead of a part-time employee.
3. Consider requiring the stores to track breakage separately from other adjustments.
4. Perform counts more frequently, which could possibly reduce errors or large
adjustments_ Have a different employee double check any items that don't match the
inventory system. Be more attentive when splitting 12-packs into 6-packs or
transferring inventory from one store to another.
Views of Responsible Officials: The first step that must be taken is to remedy the "Unknown"
cause of this problem. There is a system in place to address concerns such as the one raised
here but it is clearly not operating correctly. Management will observe the operation of the
system and address the concerns during the 2007 fiscal year.
CITY OF BROOKLYN CENTER, MINNESOTA
Schedule of Findings and Responses
For The Year Ended December 31, 2006
2006-5 Financial Statement Corrections
Criteria: SAS 112 specifies that a correction of any magnitude that could occur and not be
detected by the City's controls be considered a significant deficiency in internal control.
Condition: During the course of our audit, audit staff detected that corrections re(ating to due
from other governments, land held for resale, and accounts payable.
Cause: In our viewpoi�t, the guadance �rovided by SAS 112 regarding financial statement
corrections combined with the complexity of governmental accounting will result in most
local governments receiving a finding in this regard.
Effect: There is an increased risk that financial statement misstatements may occur.
Recommendation: We recommend the following:
1. With regard to due from other governments, we recommend the finance department
coordinate with other departments to determine the status of grants_
2. With regard to accounts payable, we recommend the finance department inquire of
other departments regarding the existence of commitments and contingencies_
Views of Responsible Officials and Corrective Action Plan: It is clear that SAS 1 i2 ehanges
the nature of the relationship between auditor and client. While past relations have been of a
nature that allows for sharing information to assure correct presentation of financial
statements SAS 112 declares that oversights in draft statements reviewed by auditors will be
viewed as inadequate accounting process rather than checks and balances of a working
relationship_ With this new relationship now clearly defined it will be incumbent on City
staff to implement procedures such as those suggested above to eliminate oversights in draft
statements. Careful review of City Council minutes by staff in relation to the preparation of
the draft statements will also assist in discovery of potential miscommunications between
I
departments which must be corrected by staff prior to the preparation of draft financial
statements.
x.
CITY OF BROOKLYN CENTER, MINNESOTA
Schedule of Findings and Responses
For The Year Ended December 31, 2006
2006-6 Documenting Approval For Use of Paid Time Off for Department Heads
Criteria: The design of an entity's internal control system should include appropriate
safeguards so that misstatements due to error or fraud are prevented or detected in a timely
manner.
Condition_ The City's current practice requires employee time reports to be reviewed and
approved by certain designated staff. Time reports of Department Heads are not required to
be reviewed and approved. However, the City's current practice includes department head
request and City Manager approval of vacation via e-mail.
Cause: The City has not established procedures regarding review and approval of department
head's time reports.
Effect: The City's liability for severance pay is based on accumulated unused vacation and
sick leave hours. By noc having such controls, there is an increased risk that errors may occur
in the accrual of vacation and sick leave and not be detected by City management.
Recommendation: We recommend the internal controls relating to the documentation of the
use of vacation and sick leave be strengthened by having the City Manager "cc" the payroll
clerk when appraving requests for paid time off.
Views of Responsible O�cials: The informal process established by current procedure will
be formalized to assure submission of documentation of vacation time used. This does not,
however, address the possibility of time having been taken and not correctly reported. The
only remedy for such a situation is to develop an approval process for timesheets of
Department Heads similar to that of other employees with the Ciry Manager approving
timesheets as required. Staff will examine this concern during the 2007 fiscal year_
1
Tautges Redpath, Ltd.
Certified Public Accountants and Consultants
REPORT ON COMPLIANCE WITH MINNESOTA
LEGAL COMPLIANCE AUDIT GUIDE FOR LOCAL GOVERNMENT
To the Honorable Mayor and
Members of the City Council
City of Brooklyn Center, Minnesota
We have audited the financial statements of the City of Brooklyn Center, Minnesota, as of
and for the year ended December 31, 2006, and have issued our report thereon dated
May 14, 2007.
We conducted our audit in accordance with auditing standards generally accepted in the
United States of America and the provisions of the Minnesota Legal Compliance Audit Guide
for Local Government promulgated by the State Auditor pursuant to Minnesota Statutes
Section 6.65. Accordingly, the audit included such t�sts of the accounting records and such
other auditing procedures we considered necessary in the circumstances.
The Minnesota Legal Compliance Audit Guide for Local Government covers seven main
categories of compliance to be tested: contracting and bidding, deposits and investments,
conflicts of interest, public indebtedness, claims and disbursements, miscellaneous
provisions, and tax increment financing. Our study included all of the listed categories.
The results of our tests indicate that for the items tested, the City of Brooklyn Center,
Minnesota complied with the material terms and conditions of applicable legal provisions.
This report is intended solely for the information and use of the City of Brooklyn Center,
Minnesota's City council and management and is not intended to be and should not be used
by anyone other than these specified parties.
l�i�
HLB Tautges Redpath, Ltd.
White Bear Lake, Minnesota
May 14, 2007
4810 White Bear Parkway White Bear Lake, Minnesota 55110 I 651 426 7000 651 426 5004 Fax I www.hlbtr.com
HLB Tautges Redpath, Ltd. is a member of International, a world-wide organization of accounting firms and business advisors.
1
Tautges Redpath, Ltd.
Certified Public Accountants and Consultants
AUDIT COMMITTEE LETTER
To the Honorable Mayor and
Members of the City Council
City of Brooklyn Center, Minnesota
We have audited the financial statemen f t e 1 n inne r
ts o h City of Brook y Center, M sota, fo
the year ended December 31, 2006, and have issued our report thereon dated May 14, 2007.
Professional standards require that we provide you with the following information related to our
audit.
Our Responsibility under U,S. Generally Accepted Auditing Standards
As stated in our engagement letter dated July 27, 2006, our responsibility, as described by
professional standards, is to plan and perform our audit to obtain reasonable, but not absolute,
assurance that the financial statements are free of material misstatement and are fairiy presented
in accordance with U.S. generally accepted accounting principles_ Because an audit is designed
to provide reasonable, but not absolute assurance and because we did not perform a detailed
examination of all transactions, there is a risk that material misstatements may exist and not be
detected by us.
As part of our audit, we considered the internal control of the City of Brooklyn Center,
Minnesota. Such considerations were solely for the purpose of determining our audit procedures
and not to provide any assurance concerning such internal control.
Significant Accounting Policies
Management is responsible for the selection and use of appropriate accounting policies. In
accordance with the terms of our engagement letter, we will advise management about the
appropriateness of accounting policies and their application. The significant accounting policies
used by the City of Brooklyn Center, Minnesota are described in Note 1 to the financial
statements. Far 2006, the City of Brooklyn Center, Minnesota implemented GASB No. 44,
related to the statistical section of the financial statements. We noted no transactions entered into
by the City of Brooklyn Center, Minnesota during the year that were both significant and
unusual, and of which, under professional standards, we are required to inform you, or
transactions for which there is a lack of authoritative guidance or consensus.
Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by
management and are based on management's knowledge and experience about past and current
events and assumptions about future events. Certain accounting estimates are particularly
4810 White Bear Parkway White Bear Lake, Minnesota 55110 I 651 426 7000 651 426 5004 Fax I www.hlbtr.com
HLB Tautges Redpath, Ltd. is a member of Intemational, a world-wide organization of accounting firms and business advisors.
City of Brooklyn Center, Minnesota
Audit Committee Letter
Page 2
sensitive because of their significance to the financial statements and because of the possibility
that future events affecting them may differ significantly from those expected. The most
sensitive estimates affectir�g the financial statements were as follows:
Depreciation exnense. Management's estimate of depreciation expense is based on the
estimated useful lives of assets. We evaluated the key factors and assumptions used to
develop depreciation expense in determining that it is reasonable in reiation to the
financial statements taken as a whole.
Health insurance liabilitv. Managements estimate of health insurance liability is based
on eligible participants, estimated future health insurance premiums, and estimated
retirement dates. We evaluated the key factors and assumptions used to develop health
insurance liabilities in determining that it is reasonable in relation to the financial
statements taken as a whole.
MCES liabilitv. Management's estimate of the City's liability for a correction of City
allocated flow is based on a present value of unbilled flows during a six year period
from 2000 to 2005. We evaluated the key factors and assumptions used to develop the
liability in determining that it is reasonable in relation to the financial statements taken
as a whole.
Land held for resale. Management's estimate of this asset is based on net realizable
value {lower of cost or estimated sales price). We evaluated the key factors in
determining that it is reasonable in relation to the financial statements taken as a whole.
Audit Adjustmen#s
For purposes of this letter, professional standards define an audit adjustment as a proposed
correction of the financial statements that, in our judgment, may not have been detected except
through our auditing procedures. An audit adjustment may or may not indicate matters that
could have a significant effect on the City of Brooklyn Center, Minnesota's financial reporting
process (that is, cause future financial statements to be materially misstated). We proposed, and
management recorded the following adjustments:
Recorded a receivable in the amount of $93,811 for deposit with Hennepin County.
Recorded an adjustment to land held for resale in the amount of $208,000_
Recorded a payable in the amount of $580,465 for unbilled MCES flaws.
Recorded a receivable in the amount of $39,784 reiating to an environmental response
grant.
City of Brooklyn Center, Minnesota
Audit Committee Letter
Page 3
We also proposed, and management recorded, other adjustments that generally were for
routine year-end accruals and for isolated errors. In addition, management represented to us that
passed adjustments are immaterial, both individually and in the aggregate, to the financial
statements taken as a whole. Those passed adjustments are as follows:
a. Not reporting an estimate allowance for uncollectible property taxes in the amount of
$24,400.
b_ Not recording a deferred charge relating to bond discounts ($171,000).
c. Unrecorded receivables in the amount of $107,070.
d. The City maintains a perpetual inventory system related to liquor inventory_ Audit test
counts indicate inventory is overstated by approximately $12,000.
Disagreemen#s with Management
For purposes of this letter, professional standards define a disagreement with management
as a matter, whether or not resolved to our satisfaction, concerning a financial accounting,
reporting, or auditing matter that could be significant to the financial statements or the auditor's
report_ We are pleased to report that no such disagreements arose during the course of our audit.
Consultations with Other lndependent Accountants
In some cases, management may decide to consult with other accountants about auditing
and accounting matters, similar to obtaining a"second opinion" on certain situations. If a
consultation involves application of an accounting principle to the government unit's financial
statements or a determination of the type of auditor's opinion that may be expressed on those
statements, our professional standards require the consulting accountant to check with us to
determine that the consultant has all the relevant facts. To our knowledge, there were no such
consultations with other accountants.
Issues Discussed Prior to Retention of Independent Auditors
We generally discuss a variety of matters, including the application of accounting
principles and auditing standards, with management each year prior to retention as the City of
Brooklyn Center, Minnesota's auditors. However, these discussions occurred in the normal
course of our professional relationship and our responses were not a condition to our retention.
Difficul#ies Encountered in Performing the Audit
We encountered no difficulties in dealing with management in performing our audit.
City of Brooklyn Center, Minnesota
Audit Committee Letter
Page 4
Closinq
This information is intended solely for the information and use of those u�ho have
responsibility for oversight of financial reporting process and management of the City of
Brooklyn Center, Minnesota and is not intended to be and should not be used by anyane other
than these specified parties.
f{.K l�ufi�- �f7
HLB TAUTGES REDPATH, LTD.
White Bear Lake, Minnesota
May 14, 2007
�'Ri r 3 h 7 x 7 t 1 a z t iry `r s t
s a i �s �aa
7"' 4 r �i' r i x x 1 l S Y l. :r i e z d x Td p. u c"� r s 5„� :`�w tw:
��P n. G' w w� k i e� t 3 r" n �.y,� f.��
q t y �,x Q ��R-� r P s�� �`'t
+r 1 u s y x c �8 �,3` r, 9 Eb' a a ?1����..r
4 Y 4
u 3� A �K.(
r t 3 i
�y E s r i k e g v r t� rs? �r r' m=
1 y r x+t a k `a v e y �1°��y�
e fi
�c ti r ti T� �w f „sx� i
4� -�h r F t t ti 3 t �"'�.1 �t '�v"v 3: i� ro
x n a a H z r s f A r i L �4 a ,�,4
h L F t r G s5 -5 a b,v i 4 1
r I a t q z z t r a K q a3 r
x.g r g 1 s r�. r x� �,a� �.l��� �.r �`u
ro �1 a �r t a .r i G r ,4` 7 �a
�S. Q t t. L i� 4.f+ y fi 3 t nE p E� e �d t'R, )k s ��i
i a F w� g e ti k w Yk� 1 32 g a �.F' A
f
y ,r �r 4 r r ;i r 9S u t r '�'ti� v �'n� �F' E S x t �z
t t`. 1�.� a a S 4 k y
p t i 't a'a hW .r �r�'y, s Y �e w
s' c�'9 J ar ��,x t s �-rr� 14 e
r N k i. 8 n p t f r �4
a. a t Y t t �s t r Y �d i e� d
�a' r,�
x �x y d s 3 d. w v a� r ��c� f �A�r^{ �+w h
q r �i 7 y s k� a ��x x a y r �q; ,a{G y
n t d t G^ y rY 7�.. T bH ti x t
f a i rs a �a t A 3. q.:. w t x ti F y
4 t n C Yf. k� 5 r y .r F �'7 r k A
7� `.3 �e a s a�. F n r s�` �k tu A�
n r y a y t f y �x �a.x4 �`aF y��`�
t+ 4 s q# t 3`* a r 4 e 1
x d t s ws. a z� ,c 3 4= a a p a a.�,
p� n. x i a c r �,I n v'�'y r i ek t i :w y i�c
v; ,x. Y 3' i r� k' +1.. 8 f X t' x C r s
s i r 7 r.� i x r n y x z a `E f v.`�� 5't 'u fi
K x 4'w:bi t
5`s�-� t' 7 r t i t n i �t� �`i �t i
�u 7 3 c t .n
o f'. F s g k s ��"x.r� �tlt fr's v
K 7 r .1 `k� i k 'k
d s f e P n t 1,,� t -z� 't� �c
H�. I k B r a yr 4 k ,r t F S zt t a
n
x a L s 7 s s s f y a.?� s yy 3 i ,k;�
��y R C r d�. y ^i �f ,y ,P `�i 1 i �i,^ 5 9. g d �:54 Y f
tA;'� i
a t 1 ,a r 6� x z e r ,�S x x a�*'2 wi �x lr r �.y�` d
4 s v" a� i�(',.� x t �s y r �z s a �,.''`t ras
a z r S f �3 a �3 r +k 'r r 9 y
S t�. 3 y 4 rf! a t p t P S� U �r, a ti na
ti y 4 r i c .,R,F
R a� J t y' b l s 7+F "`2:� »F ..t 'n �p g 2
4 X� r c 3'�al 4�&'
c t� f�k a.i s. m h,: b f t q s f k� `4 3 3i t!- k �'k a J S 0
d '�v n 3 ti �d A r i p °�-1 z r ��p'.�� f�. ,.�'�'��At dr��
e e
F
q r r r K t s ti �s 4 x� 'Y "is F t
t Lr x 1 rr g n d� td,� k r
3�,Cr� �a e`� s. a s d F .,ys t 4 b` o-� i 3i iuw f� "F a"
�x y s r,� 4 2` :R y t E 1 ;h t N ik'� c
z r i �t r F� Y d c t f �7R t.;o- ei' 3`
i a s 't .k J �o i F,�
4 �Y d x S T i l T 3r 5 Y yy ='R
a r y, 3 z 5 s J y i sb 'd� Aw s vtr't
rx I;,a' d�" m ti �k�� �✓zp,
F v'�� 3 �F r�''� i v, y�,� i t� a �1 t i
5 r S j n t a k ti y. 3 �q sx �e 5
y t 'b h 6 y�
ii'� y 1 �tr� e 7. r R T
c. r y z i
�z j v s f ti E 6 w i
p J Y 'k 5 `Sf 3 k 4 {4 "4 Y 5
L y n C� b« u t ,td M M� 2 *A '.v'1
3„ t h t 3 h� .h .rx: '''t i a T�` u 8 i;d„ 4 g ei ..=c
Y s g w a s� p q C� f 4 2 sr �i�� L a s� 4 d e r �N b 9k+�
Xy F y a�, a '�r� ;,q. 1 x t r'" :s i t s.J x 1' a. '7, „�ie
x, t e ,r x er
s� r r S �r zT w*... t t x
h �k `J 5 '.n 3 i 4 ,.�a 7 L �`x 4 ,�I ..1��e 'k� Y1� 7 F
,�°s i� 'i �a .5 a�R�" p w i j p a �1 c rui f a w t a r i t s x' k5t4`'�tz
^m:s'�'a t.,� F �t r �'h as e
h s F a fr r �s sr X
f 7* a. n e d �t q L �n x y :q g ,k t �st t y '`t �ax�' 4r'.� ��'�,;f't 6`�',
a 1� 4 :�t 't t k P6" a �,��e n. �,r� a" aro� t .�'�'�c
7 t d ``'r t C 1 ry 4 R y r� xr �c a g y x �Y:. 3} 'fE, R„
Y 4 x s� y p r4 r N x e R z,.. r T'
Is 1+ t SS S�F� "�d Ir W f tc ^'�r
3'� r� t 3 y y r r s' s Y� a�.
,p., k 7 r h ti v t a s M r 3 h. Y ��e T 1.:
z i 6:n j i 't i a r 4� r 'l�' i�aw o tx:
x�
k y :M g
b n n a, s rC k r i �,y, �Q' ��c x Y a tf CJ
t x. Y f h p c ;c q f,'; e y �i ��'!'Sa' t k r y� r�;} ``�"v
Y" ���'�r �q� F- t e s� t` �i
l n F t r 9+� °`t �r�v c r Si
G 5
d 3 f "r.x n s y r� c y r�5 i
j +a.t S. k r^ 2. h t x y u Y tF r ..3". t �r.� p
R e a�{. °i t a S `.�Y d
�,�r� �x�� �C r x i �r.+ ir �!t u v? �h r��.
y k o i t y 1 3 x a i 4 r x x y3+,, .v�-" �'3.,� „u
f i r�� ,'�a����.����y��' X� v. N ^s" r F 'Sr ..�t �r
a i. e a t x t «i= 'Y `r�.+.r ^r r� �a f a A r t. ti. x :r a
a r r t t f C ...r' y. �s J a b x n �k h�s r ,+�r x
a t !I r x ;z a F M ti r. g *�^F.4t'� y
w� h s 4 y S *t �r�ts^*��t r .R.� `f q �s a Y�`� q i�.
i 4 .f' q Z. S 4' '.Kh-?
s A d P Fn e av ''t 2� *..5'
�h t 5 1 t' '��.�t
e r t g d r S`�` �.�r e. �-f f��'��
T 1 t�� F i�������.� �k s ��Y�M1'���� F W ;��F1`a' 7 '�ae�+�' s ��W t��J
�k 1 Y �'P H K �3 �h�., t� �`'Y'3 �F �C d X y s 'f�X 4 14 J'r k i'
i X l7 i t r �7,, �r 'Ar ��a
p ,y 1 �``t r r ,�1l�ts �:st y i� �s.+, .,�„m. 3 M f'�e+; z k i
b n N 1 r� Sa .r t r z*�'
w i z >n �r t k p x `�j� c., a ra x y 9' -a 5,
�i} d x'� a h�������� 'w `f �y �iro ,y'� h ,5 ,i t�
s t l r "s e. a n t u 5 a �r '"M �L ,�t yrc�" '4�,
r e y '�r t L ,�wr a� km .,t{ s �t��uf.e�+�
4 x�� t 'i #t c 3, �t d �9 0 r� ���..R �a r �t y ri v Ns rc t t
t {y �ki �i ,�.ti�
n r r x r w 4 7 �p t� x �'�r i „s,
'l J t "t v. w 1 t, l r a, j a p t A`^ 3 x r` 7 r `X ,:w t s
j q,t' K ar"� i x t l�x S k s �k h ��x �z1� 7 4 ,2.,�. 'M i t L L
t -s a� r r:�� ti w,,, S r:a +"r�' a, a� s� G r 1 y
r r e x �r�1, ;r :ti.. d
4
q 3, Mk F 1 �C� ��W��+ a a i��� r t q�, °R'. J y ���.'S�i
r' 'Y�.'� w r t i b s.. �y P t f t .:1� q .k o- A ��..0 d��r
1 4+;. 1 +A 1 1 f t r rt 4,'Y i. 'f r 5 i 8 s,
Y'� �l* .�.G.�
j ti� t S i t z d" w S r a y, ��,r, e y .�`t'�w x �'fi t A�?. '`'t x ct,'E
ry�� 4 a a 4 a r s�` �t Y ti q �'r i 3` t Z w 6 e at �k .•x3. j'�e" �s
h �u, rS -a. r f p u �Z,�+ *u- Y, r s K ....L e 1 4 T� a tr �5�� t t,
.�Y t x v�. k .s b `A Y ,,,4 e� 1: t� t�. e 1 L+ x $w� t�'�"? a t J_JQ^+t z�
5x 7�•3 f a h t �"7 c ."£r� s, }�r�"J :�n r G §u ,�.�c :�H.s��, "4,.
`a' 9 N; t d 1- i ..�r b r r �i a e A° t i. "y� �a `�o `i:
x�� 9 a t �r.�. �2 q wv.; a� MZ,?a�; `k R t .��n4�^�� r�
h s�' i tn Z i H F y t v d -q 3 r J c d� 3 a 9R K.
s b s r� f -t'� y d� a t^5' n w�
�y ��d N s tn h i 1 -u� w y v r �s §�T�J �b e S"t� rfi•+"L, ra� tr�'� ryrHw�z�;,
r� `4' i f r 4 1� v sS w fi, y ro� 'T _r �'�4 r a p k C f t n sa �t
e� y a '4 �.�.4 i a t i� '�1�,y 69�� �}y ra�r�;r� y�U�_�
't x .��4 a x e. p �r i t v� h r� ^t
r S f �3 x s a t +s �v�: r �r L i r� a i 3 r a -a�" '6�' F.k` u F�
'd i M T" r .�r t t 5 �r k a�, s; r P�., �u
s.,�*s �;a q q y �X' s* j% 1 r i 't 3'�;�r i�� x:`,� F�i^a 2� r
i ti x a q.x a�- i r i� y. t t f r� tw 6 rt� a
s t s e s y a x �r f ti a i t t 'G s 4 �i �i, �rLb �1
y t i� r t a +�.c. s M x 6 i� W J i h �n
t� 1 tfi '&a a' E` x'w�k� w k� FA itl� S k y *.t
r ti a +.l' i a n o x" f 5 fi4 r��'` d. 6 Y f �"K �`,�`5' ��M s T
a i 1 2 s m P :.1 a 3 K k a t �`'"c f {'a'
�P d i �t s� i o k „y 1 4 S�h 1 s f.. 7 '�e �a ,i�l a u
t c u .N'� �z 1 pr c� �`f 3
M� a r
ti'` i r� .W 3" :t�.' .w. t F" e. ,�y. �v .S1w 4 A�``� i?` n
d�aJf
COMPREHENSIVE ANNUAL FINANCIAL REPORT
OF THE
CITY OF BROOKLYN CENTER,
MINNESOTA
Cornelius L. Boganey
City Manager
Pre ared B
P Y
FINANCE DIVISION
DEPARTMENT OF FISCAL SUPPORT SERVICES
Daniel Jordet
Director
Clara Hil er
g
Assistant Finance Director
FOR THE YEAR ENDED
DECEMBER 31, 2006
(Member of Government Finance Officers
Association of the United States and Canada)
Table of Contents
INTRODUCTORY SECTION
Letter of Transmittal 1
Principal Officials 6
Organizational Chart 7
FINANCIAL SECTION
Independent Auditor's Report 9
Management's Discussion and Analysis 11
Basic Financial Statements:
Statement of Net Assets 21
Statement of Activities 22
Governmental Funds
Balance Sheet 26
Statement of Revenues, Expenditures, and Changes in Fund Balances 30
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of the Governmental Funds to the Statement of Net Activities 33
Proprietary Funds
Statement of Net Assets 34
Statement of Revenues, Expenses, and Changes in Fund Net Assets 36
Statement of Cash Flows 38
Notes to the Financial Statements 41
Reauired Supplementarv Information:
Budgetary Comparison Schedule-General Fund 71
Budgetary Comparison Schedule-Tax Increment District No. 3 77
Combinine and Individual Fund Statements:
Nonmajor Governmental Funds
Combining Balance Sheet 80
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 81
t Subcombining Balance Sheet-Nonmajor Special Revenue Funds 84
Subcombining Statement of Revenues, Expenditures and Changes in Fund
Balances-Nonmajor Special Revenue Funds 86
I
Statement of Revenues, Expenditures, and Changes in Fund Balances-Budget and Actual:
Special Revenue Fund-Housing and Redevelopment Authority 88
Special Revenue Fund-Economic Development Authority 89
Special Revenue Fund-Earle Brown Tax Increment District 90
Special Revenue Fund-Tax Increment District No. 4 91
Special Revenue Fund-Police Drug Forfeiture 92
Special Revenue Fund-Community Development Block Grant 93
Special Revenue Fund-City Initiatives Grant 94
Subcombining Balance Sheet-Nonmajor Debt Service Funds 96
Subcombining Statement of Revenues, Expenditures, and Changes in Fund
Balances-Nonmajor Debt Service Funds 97
Subcombinin Balance Sheet-Nonma'or Ca ital Project Funds 100
g J P
Subcombining Statement of Revenues, Expenditures, and Changes in Fund
Balances-Nonmajor Capital Project Funds 102
Nonmajor Enterprise Funds
Subcombining Statement of Net Assets 106
Subcombining Statement of Revenues, Expenses and Changes in Fund Net Assets 107
Subcombining Statement of Cash Flows 108
Internal Service Funds
Subcombining Statement of Net Assets 110
Subcombining Statement of Revenues, Expenses and Changes in Fund Net Assets 111
Subcombining Statement of Cash Flows 112
STATISTICAL SECTION (unaudited)
Net Assets by Component 114
Changes in Net Assets 115
Governmental Activities Tax Revenue by Source 119
Fund Balances Governmental Funds 120
Changes in Fund Balances Governmental Funds 122
Assessed Tax Capacity and Estimated Actual Value of Taxable Property 124
Property Tax Rates Direct and Overlapping Governments 126
Principal Taxpayers 128
Property Tax Levies and Collections 129
Ratios of Outstanding Debt by Type 130
Ratios of General Bonded Debt Outstanding 131
Computation of Direct and Overlapping Debt 132
Legal Debt Margin 133
Pledged Revenue Coverage 134
Demographic and Economic Statistics 136
Principal Employers 137
Full Time City Government Positions by Function 138
Operating Indicators by Function 139
Capital Asset Statistics by Function 140
Ii
City o f Brooklyn Center
A Millennium Community
May 14, 2007
Honorable Mayor and Members of the City Council
City of Brooklyn Center
Transmitted herewith is the Com rehensive Annual Financial Re ort of the Ci of
P p tY
Brooklyn Center for the fiscal year ended December 31, 2006.
Management of the C�ty of Brooklyn Center assumes full responsibility for the
completeness and reliability of the information contained in this report based on the
current system of internal control.
Minnesota Statutes and City Charter Section 7.12 require that the financial statements
of the City of Brooklyn Center be audited annually by the State Auditor or a certified
public accountant selected by the Ciry Council. These �nancial statements have been
audited by HLB Tautges Redpath, Ltd. Their report is included in the financial section
of this report. In addition, HLB Tautges Redpath is required to issue an opinion on the
City's management and accounting for grant funds from the federal government. This
��Single Audit" opinion, when included, is designed to meet the monitoring needs of
federal grantor agencies. That report was not required in 2006 as the City received less
than 500,000 in total federal grants.
Management's Discussion and Analysis (MD&A) immediately follows the independent
auditor's report and provides a narrative introduction, overview, and analysis of the
basic financial statements. Management's Discussion and Analysis complements this
letter of transmittal and should be read in conjunction with it.
Profile of the City of Brooklyn Center
The City of Brooklyn Center was incorporated in 1911 and is located in northern
Hennepin County. The City has operated under the council-manager form of
government since the adoption of the City Charter in 1966. The governing body is
comprised of the Mayor and four Council Members elected at large. All members serve
S four-year terms with two of the Council Members standing for election during each
national election year cycle. The Mayor and Council Members hire a City Manager who
runs the daily operations of the City.
The Ci of Brookl n Center rovides a full ran e of munici al services to its citizens.
tY Y P 9 P
These include police and fire protection services, zoning enforcement, municipal
6301 Shingle Creek Parkway Recreation and Community Center Phone TDD Number
Brooklyn Center, MN 55430-2199 (763) 569-3400
City Hall TDD Number (763) 569-3300 FAX (763) 569-3434
FAX (763) 569-3494
www.cityo fbrooklyncenter.org
planning, parks and recreation activities, construction and maintenance of streets,
provision of water, wastewater collection and treatment, stormwater collection and
treatment, and street lighting. Community and economic development are facilitated
through a Housing and Redevelopment Authority and an Economic Development
Authority. The City alsa 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
Herita e Center two munici al li uor stores and Centerbrook a 9 hole executive olf
9 P q 9
I course.
Financial planning and control for the City of Brooklyn Center is based on the Annual
Operating Budget and the multi-year Capital Improvement Program. Under Minnesota
Statutes, a preliminary property tax levy must be adopted no later than September 15
of each year for the ensuing year's collection. This establishes a maximum levy that
may subsequently be lowered but not raised. Effective establishment of this levy
requires a preliminary budget be prepared. The City Manager prepares such a budget
each summer and presents it to the City Council in August, prior to the consideration of
the preliminary tax levy. In addition, the City Council reviews the recommended rates
and charges for utility funds and other operations on an annual basis as part of the
budget process. Citizens receive a notice of taxes proposed for their individual
b taxin
properties in November based on the preliminary levies established y all g
districts. Following the receipt of this notice citizens are invited to public hearings
known as Truth in Taxation hearings in each jurisdiction. The City's hearing includes
information about the budget, the property tax levy and the priorities of the City Council
for the coming year as made evident by the budget allocations. Public comment is
heard and considered at this hearing. The final property tax levy is adopted at a
subsequent meeting. This forms the basis for the budget preparation and presentation
framework.
In addition, a Capital Improvement Program is reviewed and revised during the budget
process each year. This includes projects for which the City must issue debt and/or
assess portions of the cost to adjacent or benefited property owners. Because there
are limited funds available each year and the City does not wish to issue excessive
amounts of debt, these projects must be reviewed and reprioritized as the Capital
Improvement Program is developed each year.
Economic Condition and Outlook
The City of Brooklyn Center is a northern suburb of the Twin Cities metropolitan area,
adjacent to the City of Minneapolis and located 10 miles from its downtown area. The
City is wholly within Hennepin County and covers an area of about 8.5 square miles.
The Mississippi River forms the City's eastern boundary.
2
The City experienced its most rapid growth from 1950 to 1970 when the City's
population grew from 4,300 to its peak of 35,173. The 2000 Census data for the City
was 29,172, a slight increase from the 1990 Census data of 28,887. The number of
housing units has remained stable at 11,430 units; there were 11,704 housing units in
1990. As in most mature, first-ring suburbs there is a slight trend toward conversion of
single family homes to rental properties.
The total estimated market value of real and personal property within the City increased
6.39% in 2006 over 2005, 7.51% in 2005 over 2004, and 7.55% in 2004 over 2003.
Residential values posted the largest gains going up nearly 15% in totaL
Commercial/industrial values declined slightly for the 2005 to 2006 period. Demand for
starter homes has continued to drive up values of residential property in the City.
Major transportation routes in and through the City, including Interstates 94 and 694,
and State Highways 100 and 252, have provided a continued impetus for development
of a strong commercial tax base in the City along and adjacent to these corridors.
Commercial/industrial properties made 31% of the City's taxable net tax capacity in
2006, declining from the 35% in 2005. This reflects recent tax court decisions on the
Brookdale Center Mall properties lowering their values substantially. Brookdale Center,
a 1,093,931 square-foot regional shopping center, is the largest commercial property in
the City.
Factors Affectin Financial Condition
9
Maior Events of 2006 and Local Economv
Brooklyn Center is a mature, developed suburb that is working to revitalize itself. With
its affordable housing, excellent schools, beautiful parks, and convenient transportation
access it has the potential to continue to be a vibrant community for many years to
come. The revitalization of Brooklyn Center is proceeding on three tracks: replacement
and renewal of the commercial areas of the City; reconstruction and enhancement of its
streets, utilities, and parks; and the reinvigoration of neighborhoods.
Redevelopment continued to be the key to commercial and industrial tax base growth.
In 2006 the City acquired two adjacent business properties along Interstate 94. The
buildings on the sites were demolished. An additional adjacent site will be acquired in
2007, cleared of structures and combined with the first two to create a 14 acre
redevelopment site.
The former Hmong-American Shopping Center has encountered difficulties with
environmental clean-up of contaminants. Development of this project is being delayed
until clearance for the site can be obtained from the Minnesota Pollution Control
Agency.
3
The City's "Opportunity Site" continues to be a focus for redevelopment efforts. The
relocation of a Ford dealership presents an opportunity to combine its parcel with
adjacent properties to create a large redevelopment project site along Counry Road 10
and Highway 100.
The hospitality industry contributes a significant amount to Brooklyn Center's economy.
Lodging tax provided over 380,000 for 2006 fiscal year operations. Plans for a hotel
adjacent to the City-owned Earle Brown Heritage Center facility have been approved
and construction will begin in 2007. The hotel will be connected to the Heritage Center
by a covered walkway.
Infrastructure and Transportation
As part of a planned replacement of the aging infrastructure, the City continued the
program for street and utility improvements by reconstructing the Centerbrook Area
neighborhaod streets in 2006. While streets are replaced, aging water, sanitary and
storm sewer infrastructure is also repaired or replaced. These improvements are
funded by general obligation improvement bonds supported with special assessments
against benefited properties, an operating transfer from the general fund, and funds
from the capital projects funds and utility enterprise funds. About one twenty-fifth of
the City's streets and utilities are reconstructed each year. It is expected that this will
be a perpetual process, since at the end of twenty-�ve years it will be necessary to
begin anew with the streets that were done first. Another benefit of these
neighborhood projects has been the increased interest by residents in the maintenance
and cleanup of their individual properties through paint, landscaping and structural
repairs.
Development of utility rate models has improved the City's ability to generate cash flow
and schedule improvements to the water and sewer systems. Separate funds for street
lighting and stormwater drainage have also helped control and prioritize infrastructure
improvements and operations in these areas.
Cash Manaaement
The City of Brooklyn Center receives interest on all funds deposited by the City in its
bank and investment accounts. During 2006 daily funds were moved to a"sweep"
account paying interest on overnight deposits. The rate on this daily sweep rose during
2006 from 3.8% to a rate at the end of the year in excess of 4.50%. This result was
negotiated between the city and the bank in exchange for a slightly higher balance
being maintained in the operating account. The proceeds of this daily investment offset
the banking fees charged by the City's main bank, Wells Fargo. Other funds were
invested in various treasury securities and mortgage back securities considered
acceptable risks under the '�prudent person" investment limitations of Minnesota
Statutes. Longer term investments will have a slightly higher rate of interest compared
4
to the overnight '�sweep" rates of liquid cash. In addition, the City invests in the 4M
and 4MPIus funds sponsored by the League of Minnesota Cities. 2006 saw an increase
in the rate of interest paid by the 4M and 4MPIus funds, from 4.00% to 5.00% at the
end of the year. These accounts pay a return higher than liquid cash but lower than
treasuries and mortgage backed securities. The advantage of using these funds is
liquidity. Treasury management requires a balance between the avaiiabiiity of cash and
investment to obtain the highest return without undue risk of public assets.
Acknowledaements
i This report has been prepared following the guidelines recommended by the
i Government Finance Officers Association of the United States and Canada. These
guidelines assure that presentation of informatian on the city's financial condition
conforms substantially to the high standards of pubtic financial reporting, including
�generally accepted accounting principles promulgated by the Government Accounting
Standards Board.
The preparation and publication of this report would not have been possible without the
efficient work of the Finance staff, especially Clara Hitger, Assistant Finance Director.
We would like to acknowledge all staff that contributed their efforts to the Finance
operations in 2006. We would also like to thank the Mayor and City Council for their
suppor� in promoting and maintaining the highest standards of professionalism and
management of the City of Brooklyn Center.
RespectFully Submitted,
Cornelius L. Boganey Daniel Jordet
City Manager Director of Fiscal Support Services
5
i
CITY OF BROOKLYN CENTER, MINNESOTA
PRINCIPAL OFFICIALS
December 31, 2006
Term Ex ires
Name Posrtion Term of Offce p
ELECTED OFFICIALS
Myrna Iv�agness Mayor Four Years December 31, 2006
Kathleen Carmody Council Member Four Years December 31, 2006
Kay Lasman Council Member Four Years December 31, 2008
Diane Niesen Council Member Four Years December 31, 2006
Mary O'Connor Council Member Four Years December 31, 2008
APPOINTED OFFICIALS I
Cornelius L. Boganey 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 G(asoe Community Activities, Recreation and Services Director Appointed
Brad Hoffman Community Development Director Appointed
Daniel Jordet Director of Fiscal and Support Services Appointed
6
City of Brooklyn Center Organization
2006
Electorate
City Council Advisory Commissions I
Administration
City Attorney City Manager Human Resources
Communications
Information Technology
Elections
Licenses
City Clerk
I
I
Public Works Police Department Community Activities, Enterprise I
Engineering Patrol Recreation. and Services �iyuor stores I
Street Maintenance Investigation Earle Brown Heritage Center
Sanitary Sewer Crime Prevention Community Progrems
Central Garage Community Programs Recreation Programs
Storm Sewer Support Services Community Center
Water Department Government Buildings
Park Maintenance Golf Course
Fire Department Fiscal and Suaport Services Communitv Develoament
Fire Prevention Accounti�g Inspections
Fire Suppression Audit Economic Development
Emergency Preparedness Utility Billing Housing Redevelopment Authority
Risk Management Zoning
Assessing Planning
II
h /ank intentionall
This page as been left b y
s
Tautges Redpath, Ltd.
Certified Public Accountants and Consultants
INDEPENDEI�IT AUDITOR'S REPORT
To the Honorable Ma or and
Y
Members of the City Council
City of Brooklyn Center, Minnesota
We have audited the accom a�
p nying financial statements of the overnmental activities, the
g
business-t e activities, each ma�or fund and the a re ate remainin fund information of
YP gg g g
the City of Brooklyn Center, Minnesota, as of and for the year ended December 31, 2006
which collectively comprise t�ie City of Brookiyn Center, Minnesota's basic financial
statements as listed in the table of contents_ These financial statements are the responsibiliry
of the City of Brooklyn Center, Minr►esota's management. Our responsibiliry is to express
opinions on these financiai statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the
United States of America and the standards applicabie to financial audits contained in
Government Auditing Standards, issuec! by the Comptroller General of the United States.
Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether t�e 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 overatl financial statement
presentation_ We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above resent fairl in all material
P Y
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, 2006, and the respective changes in
financial position and, where applicable, cash flows thereof, for the year then ended in
conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report dated
i May 14, 2007 on our consideration of the City of Brooklyn Center, Minnesota's internal
control over financial reporting and on 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
compliance and the results of that testing, and not to provide an opinion on the internal
control over financial reporting ar on compliance. That report is an integral part of an audit
4810 White Bear Parkway White Bear Lake, Minnesota 55110 I 651 426 7000 651 426 5004 Fax I www.hlbtr.com
H�6 Tautges Redpath, Ltd. is a member of Intemational, a world-wide organization of accounting firm and business advisors.
i
t
1
performed in accordance with Government Auditing Standards and should be considered in
i
assessing the results of our audit.
The Mana ement's Discussion and Anal sis and the bud etar com arison information as
g Y g Y P
listed in the table of contents, are not a required part of the basic financial statements but are
supplementary information required by 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 ineasurement and
presentation of the required supplementary information. However, we did not audit the
information and express no opinion on it.
Our 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 and statistical section 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 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 section 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.
�r
r/� ����4� �-f�
HLB TAUTGES REDPATH, LTD.
White Bear Lake, Minnesota
May 14, 2007
10
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Brooklyn Center (the City), we offer readers of the City of Brooklyn Center's
financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year
ended December 31, 20o6. 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 hlg i�hts
The assets of the City exceeded its liabilities at the close of the most recent fiscal year. The
106,105,797 of net assets includes cash and investments, streets, buildings, equipment, land and
other City assets. Of this amo.unt, 13,163,700 is classified as unrestricted net assets which may be
used to meet the government's ongoing obligations to citizens and creditors in accordance with the
City's fund designations and fiscal policies.
The City's total net assets increased by 5,005,801 from 2005 to 2006.
As of the close of the current fiscal year, the City's governmental funds reported combined ending
fund balances of 39,712,609. Of this total amount, 30,986,679, or 7$% is designated or reserved
through legal restrictions and City Council authorization.
At the end of the current fiscal year the general fund balance of 7,509,190 included 500 reserved
and 7,508,690 designated.
The City's total outstanding debt decreased by 1,415,000 during the current fiscal year, from
29,365,000 to 27,950,000.
Overview of the Financial Statements
The discussion and analysis are intended to serve as an introduction to the City's basic financial statements.
The City's basic financial statements comprise three components: i) government-wide financial statements,
2) fund financial statements, and 3) notes to the financial statements. This report also contains other
supplementary information in addition to the basic financial statements themselves.
Government-wide financial statements. The government-wide financial statements are designed to provide
readers with a broad overview of the City's finances, in a manner similar to a private-sector business.
The statement of net assets presents information on all of the City's assets and liabilities, with the difference
between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful
indicator of whether the financial position of the City is improving or deteriorating.
The statement of activities presents information showing how the City's net assets changed during the most
recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the
change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this
statement for some items that will only result in cash flows in future fiscal periods (e.g. uncollected ta�ces and
earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City that are principally
supported by ta�ces and intergovernmental revenues (governmental activities) from other functions that are
intended to recover all or a significant portion of their costs through user fees and charges (business-type
activities). The governmental activities of the City include general government, public safety, public works,
community services, recreation and economic development. The business-type activities of the City include
water and sewer, street lighting, liquor operations, golf course, convention center, storm drainage and
recycling/refuse.
11
i
Management's Discussion and Analysis
The government-wide financial statements can be found on pages 21 through 23 of this report.
Fund Financial statements. A fund is a grouping of related accounts that is used to maintain control over
resources that have been segregated for specific activities or objectives. The City, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. All of the funds of the City can be divided into two categories: governmental funds and
proprietary funds.
Governmental funds. Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the government-wide
financial statements, governmental fund financial statements focus on near-term inflows and outflows of spend-
able resource, as well as on balances of spendable resources available at the end of the fiscal year. Such
information may be useful in evaluating a government's near-term financial requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it
is useful to compare the information presented for governmental funds with similar information presented for
govemmental 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 govemmentat fund statement of revenues, expenditures, and change in fund balances provide a
reconciliation to facilitate this comparison between governmentai funds and governmental activities.
The City maintains nineteen individual governmental funds. Information is presented separately in the
governmental fund ba(ance sheet and in the governmental fund statement of revenues, expenditures, and
changes in fund balances for the General fund, Tax Increment District No. 3 special revenue fund, and the G. O.
Improvement Bonds debt service fund, which are considered to be major funds. Data from the other
governmentai funds are combined into a single, aggregated presentation. Individual fund data for each of these
nonmajor governmental funds is provided in the form of combining statements elsewhere in this report.
The basic governmental fund financial statements can be found on pages 26 through 33 of this report.
Proprietary funds. The City maintains two different types of proprietary funds. Enterprise funds are used to
report the same functions presented as business-type activities in the governmental-wide financial statements.
The City uses enterprise funds to account for its municipal liquor, golf course, Earle Brown Heritage Center,
water, sanitary sewer, storm drainage, recycling/refuse, and street lighting operations. Internal service funds are
an accounting device to accumulate and allocate costs internally among the City's various functions. The City
uses internal service funds for its central garage, employee retirement, and compensated absences. Because all
of these services predominantly benefit governmental rather than business-type functions, they have been
included within the governmental activities in the government-wide financial statements.
Proprietary funds provide the same type of information as the govemment-wide financial statements, only in
more detail. The proprietary fund financial statements provide separate information for the municipal liquor,
golf course, Earle Brown Heritage Center, water, sanitary sewer, and storm drainage operations, each of which
are considered to be major funds of the City. Conversely, all internal service funds are combined into a single,
aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal
service funds is provided in the form of combining statements elsewhere in this report.
The basic proprietary fund financial statements can be found on pages 34 through 39 of this report.
Notes to the financial statements. The notes provide additional information that is essential to a full
understanding of the data provided in the government—wide and fund financial statements. The notes to the
financial statements can be found on pages 41 through 69 of this report.
Other information. In addition to the basic financial statements and accornpanying notes, this report also
presents certain required supplementary information on budgetary compliance for its major funds. The City
adopts an annual appropriated budget for its general and special revenue funds. A budgetary comparison
12
Mana ement's Discussion and Anal sis
g Y
sta;ement has been provided for major funds to demonstrate compliance with this budget. Reyuired
supplementary information can be found on pages 7l through 77 of this report.
The combining statements referred to earlier in connection with nonmajor governmental funds and internal
service funds are presented immediately following the required supplementary information on budgetary
comparisons. Combining and individual fund statements can be found on pages 80 through 112 of this report.
Government-wide Financial 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 106,105,797 at the close of the most recent fiscal year.
1 The largest portion of the City's net assets 65,304,632 or 62 percent) reflects its investment in capital assets
(e.g. land, infrastructure, buildings, machinery, and equipment) less any related debt used to acquire those assets
that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these
assets are not available for future spending. Although the City's investment in its capital assets is reported net
of related debt, it should be noted that the resources needed to repay this debt must be provided from other
sources, since the capital assets themselves cannot be used to liquidate these liabilities.
CITY'S NET ASSETS
Governmental Activities Business-type Activities Total
2006 20�5 2006 2005 2006 2005
Clurent and other assets 52,138,580 53,014,216 9,464,383 8,008,437 61,602,963 61,022,653
Capital assets 40,959,936 36,883,702 38,248,496 38,417,647 79,208,432 75,301,349
Total assets 93,098,516 89,897,918 47,712,879 46,426,084 140,811,395 136,324,002
Long-term liabilities
outstanding 28,745,459 29,502,420 28,745,459 29,502,420
Otherliabilities 4,469,074 4,800,905 1,491,065 920,581 5,960,139 5,721,486
Total liabilities 33,214,533 34,303,325 1,491,065 92Q581 34,705,598 35,223,906
Net assets:
Invested in capital assets,
netofrelateddebt 28,191,206 25,614,602 38,248,496 38,417,647 65,304,632 64,032,249
Resiricted 27,637,465 29,326,928 27,637,465 29,326,928
Unrestricted 4,055,312 652,963 7,973,318 7,087,856 13,163,700 7,74Q819
Total net assets 59,883,983 55,594,493 46,221,814 45,505,503 $106,105,797 $101,099,996
t All 2005 comparative balances are net of the adjustments described in Note 3.D. on pages 51 through 52.
A portion of the of the City's net assets represents resources that are subject to external restrictions on how they
may be used. These restrictions include debt payment from assessments collected, grants received from outside
sources and tax increments collected for qualified projects The remaining balance of unrestricted net assets
13,163,700) may be used to meet the City's ongoing obligations.
At the end of the current fiscal year, the City is able to report positive balances in all three categories of net
assets, both for the government as a whole, as well as for its separate governmental and business-type activities.
The same situation held true for the prior fiscal year.
Current assets decreased in the governmental activities primarily due to the purchase of redevelopment
praperty. Similarly, capital assets increased with the purchase of that redevelopment property, and the
capitalization of reconstructed infrastructure. Total liabilities decreased due to regularly scheduled payments on
outstanding bonds, both current (other) and long-term. Decreases in accounts payable and contracts payabie
also contributed to the decrease in other liabilities. The decrease in restricted net assets can be attributed to
costs associated with the acquisition of redevelopment property exceeding the estimated net realizable value of
those properties.
13
Management's Discussion and Analysis
Current assets in the business-type activities increased due to an increase in user fees charged in 2006 on utility
services and a conscious effort to rninimize direct costs to provide services in those activities. Other liabilities
increased due to the estimated amount due to the Metropolitan Council Environmental Services for sanitary
sewer charges.
Governmental Activities
Government activities resulted in an increase of the City's net assets by 4,289,490, while the overall increase
totaled 5,005,801. Key elements of the increase are as follows:
CITY'S CHANGES IN NET ASSETS
Governmental Activities Business-type Activities Total
2006 2005 2006 2005 2006 2005
Revenues:
Program revenues:
Charges for services 2,178,747 2,015,332 10,544,523 9,753,171 12,723,270 11,768,503
Operating grants and
contributions 748,888 855,633 748,888 855,633
Capital grants and
contributions 2,208,751 2,398,345 2,208,751 2,398,345
General revenues:
Property taxes 11,618,486 11,288,883 11,618,486 11,288,883
Other taues 4,080,060 5,353,751 4,080,060 5,353,751
Grants and contributions
not restricted to
specific progtac� 702,030 577,548 702,030 577,548
Unrestricted investrnent
eamings 1,928,462 1,272,409 337,231 199,876 2,265,693 1,472,285
Gain on sale of assets 23,963 31,880 23,963 31,880
Totalrevenues 23,489,387 23,793,781 10,881,754 9,953,047 34,371,141 33,746,828
Eacpenses:
General govem�nt 2,936,638 2,97Q364 2,936,638 2,470,364
Publicsafery 8,039,356 7,848,160 8,039,356 7,848,160
Public works 2,087,259 3,821,647 2,087,259 3,821,647
Community services 123,172 86,043 123,172 86,043
Pazks and Recreation 2,565,364 2,305,047 2,565,364 2,305,047
Economic development 2,567,377 3,559,027 2,567,377 3,559,027
Interest on long-term debt 1,184,017 1,349,852 1,184,0 l7 1,349,852
Municipalliquor 970,260 978,743 970,260 978,743
Golf course 282,418 273,024 282,418 273,024
Earle Brown Heritage Center 2,439,709 2,262,359 2,439,709 2,262,359
Recycling and refuse 245,853 254,661 245,853 254,661
Street light utility 161,219 213,094 161,219 213,094
Water utility 1,635,847 1,717,175 1,635,847 1,717,175
Sanitarysewer 3,176,426 2,660,706 3,176,426 2,660,706
Storm drainage 950,425 899,988 950,425 899,988
Total expenses 19,503,183 21,94Q140 9,862,157 9,259,750 29,365,340 31,199,890
Increase in net assets
before �ansfers 3,986,204 1,853,641 1,019,597 693,297 5,005,801 2,546,938
Transfers 303,286 (1,545,893) (303,286) 1,545,893
Change in net assets 4,289,490 307,748 716;311 2,239,190 5,005,801 2,546,93$
Net assets January 1 55,594,493 55,286,745 45,505,503 43,266,313 101,099,996 98,553,058
Net assets December 31 59,883,983 55,594,493 46,221,814 45,505,503 106,105,797 101,099,996
14
ManagemenYs Discussion and Analysis
In the Governmental Activities, total taxes decreased by 944,088 because of reductions in the value of
properties within one of the tax increment districts reducing the current tax increment tevy and refunds of prior
year taxes on those properties. Unrestricted investment earnings produced an additional 656,053 in revenue
due to an upward trend in interest rates, unspent bond proceeds on hand during the year, and gains in market
valuation of investments. Expenses in public works decreased for 2006. In 2005, a number of projects were
completed that did not meet the capitalization threshold in the City's policies. Additionally, 374,000 was paid
in 2005 for storm cleanup. Lower economic development expenses were due to preparation costs associated
with the redevelopment properties purchased in 2005. Transfers out in 2005 were for construction projects
contributed to the utility funds.
Below are specific graphs which provide comparisons of the governmental activities revenues and expenses:
Governmental Activities 2006 Revenues
Unrestricted investment
eamings
Other re�venues 8.2% Charges for services
3 1 /o 9.3%
Othertaxes
5.9% i
Operating grants and
�k�' contributions
t
3.2%
a�.��" �s
a t
Property taxes and tax �Capital grants and
increments contributions
60.9% 9.4%
Governmentai Activities 2Q06 Expenses
Economic development
13.2% Interest on long-term
debt
6.1%
Parks and recreation General ovemment
a �y� g
132/0 15.1%�
i
Community services
0.6%
Public works�
10.7% Public safety
41.2%
I$
Management's Discussion and Analysis
Business-tvoe activities
Business-type activities increased net assets by 716,311. Below are graphs showing the business-type
activities revenue and expense comparisons:
Business-Type Activities 2006 Revenues
Unrestricted investment
earnings
3.1%
g��
K+d I .�„Y
�L�'3 s'
3 Z
K'�.
„g°���� f
yas
.r�� k
Net Charges for services
96.9%
Business-Type Activities 2006 Expenses
Hecita e Center Sewer
g Municipal Liquor 31�/
25% 10%
s� �,�,�t
E a�
"t v
1���4 F��`$ '.t/,y��� "fj�� f.
-,.z�" f k§' �k. 3 g.;�
4
Storm Draina e �s'
10% g a`�''3�; ��s"��,„�'�
Non-MajorEnterprise� �Water
4%
17%
Golf Course
3%
Charges for services in the business-type activities were up due to an increase in user fees charged on utility
services and an increase in activity in the Municipal Liquor and Earle Brown Heritage Center activities.
Transfers in for 2005 were construction projects contributed to the utility services by governmental activities.
Expenses increased due to the estimated amount due to the Metropolitan Council Environmental Services for
sanitary sewer charges.
16
Management's Discussion and Analysis
Financial Analvsis of the Government's Funds
Governmental Funds. The focus of the City's governmental funds is to provide information on near-term
inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's
financing requirements. In particular, unreserved fund balance may serve as useful measure of a government's
net resources available at the end of the fiscal year.
At the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of
39,712,609. Approximately 13% of this amount, 5,177,308, is reserved because it has already been
committed 1) to provide for debt service 4,202,976), 2) for advances 792,488), 3) for committed contracts
($181,344) and 4) for prepaid items 500). The unreserved fund balance of 34,535,301 includes
designations for 1) general fund working capital 7,508,690), 2) housing development and bonding covenants
11,516,322), 3) economic development 1,922,502), and 4) capital improvements 4,861,857). The
balance is undesignated and unreserved 8,725,930).
The general fund is the primary operating fund of the City. At the end of the current fiscal year, total fund
balance reached 7,509,190, all of which was either reserved or designated. As a measure of the general fund's
liquidity, it may be useful to compare total fund balance to total fund expenditures. Total fund balance
represents 53% of total general fund expenditures for 2006.
The fund balance of the City's genera( fund increased by 214,239 in 2006. This increase was due to higher
than expected collections of current and delinquent property taxes and higher than predicted investment income
due to rising interest rates.
The Tax Increment District No. 3 fund had a total fund balance of $20,727;671 at the end of 2006. The net
decrease in the fund balance was 2,997,267. In 2004, the City issued 17,245,000 in tax increment bonds,
the proceeds of which will be spent in the Tax Increment District No. 3 fund. The decrease in 2006 represents
the second of three years expenditures for the acquisition and development of properties within the district. The
remaining bond proceeds are carried as of December 31, 2006 a designation of fund balance, 8,537,255.
1 The G.O. Improvement Bonds fund had a fund balance of $3,098,227 at the end of 2006, all of which was
reserved for debt service. The net decrease in fund balance for 2006 was 6,150, which was due to the use of
collections in previous years to pay current bond payments.
Proprietary funds. The City's proprietary funds provide the same type of information found in the
government-wide financial statements, but in more detaiL
The unrestricted net assets in the respective major proprietary funds are the municipal liquor fund 1,308,939,
golf course -$(7i0,697), Earle Brown Heritage Center 887,644, water utility 2,386,273, sanitary sewer
utility 2,371,246 and storm drainage utility 1,683,908. The increases (decreases) in net assets for the
major enterprise funds were: municipal liquor 193,772, golf course 15,632, Earle Brown Heritage Center
$(478,186), water utility 237,099, sanitary sewer utility 123,878, and storm drainage utility 587,225.
General Fund Bud�etarv Hi hlg IEhts
During the year, there were no amendments to the General Fund budget appropriations. Actual revenues and
other financing sources exceeded the budget by 272,241, the majority of which was due to higher than
expected collections of current and delinquent property taues and an increase in lodging tax collected. Actual
expenditures and other financing uses were higher than budgeted for the year by 58,002. This amount is the
net effect of under budget spending in pubtic works because a portion of the staff time was charged directly to
the capital project funds and over budget spending in public safety because of an unexpected boiler replacement
in the building.
r
17
ManagemenYs Discussion and Analysis i
Caaital Asset and Debt Administration
Capital assets. The City's investment in capital assets for its governmental and business type activities as of
December 31, 2006, amounts to 74,949,632 (net of accumulated depreciation). This investment in capital
assets includes land, buildings, infrastructure, machinery and equipment. The total increase in the City's_
investment in capital assets was 2.6 percent (6.0 percent increase for governmental activities and a 0.4 percent
decrease for business-type activities).
Major capital asset events during the year included the following:
Three major infrastructure reconstruction projects were completed during the year, with a final cost of
5,207,000.
Two infrastructure reconstruction projects were begun and substantially completed during the 2006.
These projects account for 4,116,652 in construction in progress at the end of the year.
Construction on a new central storage facility began in 2006, accounting for an additional 382,715 in
construction in progress at the end of the year.
CITY'S CAPITAL ASSETS
(net of depreciation)
Govemmental Activities Business-type Activities Total
2006 2005 2006 2005 2006 2005
Land 3,203,904 3,203,904 3,197,342 3,197,342 6,401,246 6,40t,246
Land improvements 239,168 272,937 239,168 272,937
Consttuction in progress 2,765,506 3,408,164 1,915,091 2,539,496 4,680,597 5,947,660
Buildings and shucwres 11,964,278 12,726,162 8,333,499 9,218,052 20,297,777 21,944,214
Departrnentat equipment 2,590,925 2,060,357 216,373 217,817 2,807,298 2,278,174
Othecpazkimprovements 1,281,332 1,115,450 1,281,332 1,115,450
Streets 14,895,191 12,122,165 14,895,191 12,122,165
Mau�s and lines 24,347,023 22,972,003 24,347,023 22,972,003
Total $36,701,136 $34,636,202 $38,248,496 $38,417,647 74,949,632 73,053,849
Additional information on the City's capital assets can be found in Note 4.C. on pages 55 through 56 of this
report.
Long-term debt. At the end of the current fiscal yeaz, the City had long-term bonded debt outstanding of
27,950,000, all of which is backed by the full faith and credit of the government. Of the total outstanding,
4,465,000 is general obligation bonds, 18,305,000 is tax increment bonds and 5,180,000 is improvement
bonds.
Additional long-term liabilities inciude 964,248 for compensated absences. This is the accumulated vacation
and vested sick leave not used by employees at the end of 2006.
CITY'S OUTSTANDING DEBT
General Obligation Bonds, General Obligation Tax Increment Bonds,
General Obtigation Improvement Bonds, and Compensated Absences
Govemmentai Activities
2006 2005
General obligation bonds 4,465,000 5,340,000
Generai obligation tax increment bonds 18,305,000 19,305,000
General obligation itnprovement bonds 5,180,000 4,720,000
Compensatedabsences 964,248 919,113
Total 28,914,248 30,284,113
18
Management's Discussion and Analysis
The City's total bonded debt decreased by 1,415 000 during the current fiscal year. This is the net effect of
scheduled debt retirement of 2;875,000 and the issuance of 1,460,000 in general obligation improvement
bonds in during the year.
The City maintains an A 1 rating from Moody's on all issues.
State statutes limit the amount of general obligation debt a Minnesota city may issue to 2% of total Estimated
Market Value. The current debt limitation for the City is 39,219,054. Only 4,465,000 of the City's
outstanding debt is counted within the statutory limitation amounting to about 11 of the total limit.
Additional information on the City's long-term debt can be found in Note 4.F. on pages 59 through 62 of this
report.
Economic Factors and Next Year's Bud�et and Rates
The unempioyment rate for the City is 4.6 percent at the end of the current fiscal year, which is a
decrease from the rate of 4.8 percent a year ago. This compares to the State's average unemployment
rate of 4.0 percent and the national average of 4.6 percent.
Redevelopment of the Central Business District continues and will yield net growth in tax base and
stability in ta�c base through mixed use development goals.
Utility rates have been subjected to rigorous study and projected into a 10 year model to allow for system
maintenance, technology changes and capital repair and replacements while moderating annual rate
adjustments.
All of these factors were considered in the preparation of the City's budget for the 2007 fiscal year.
During the year, unreserved fund balance in the general fund rose by 214,239. This amount will be added to
the fund balance level to stay within the City's policy of maintaining 50 to 52 percent of the next year's
budgeted General Fund operations.
Water, sanitary sewer, and recycling and refuse utility rates were increased for the 2006 budget year.
Residential water rates were increased by 3.7 percent, sanitary sewer by 4.0 percent, and recycting and refuse
by 4.25 percent. These increases were necessary to ensure that the municipal utilities be self-supporting
through revenue, as required by the City charter. These rates are reviewed annually to ensure compiiance with
the requirements of the charter.
Reauests for information
This financiat report is designed to provide a general overview of the City's finances for all those with an
interest in the government's finances. Questions concerning any of the information provided in this report or
requests for additional financial information should be addressed to the Director of Fiscal and Support Services,
City of Brooklyn Center, 6301 Shingle Creek Parkway, Brooklyn Center, Minnesota 55430.
19
,I
This a e has been left b/ank intentionall
P9 Y
20
1
CITY OF BROOKLYN CENTER, MINNESOTA
STATEMENT OF NET ASSETS Statement 1
December 31, 2006
Governmental Business-Type
Assets: Activities Activities Total
Cash and investments 46,841,797 7,372,031 54,213,828
Receivables:
Accounts 255,711 1,877,302 2,133,013
Taxes 483,211 483,211
Special assessments 3,186,932 353,430 3,540,362
Internal balances 968,218 (968,218)
Due from other govemments 138,030 93,811 231,841
Prepaid expenses 500 177,281 177,781
Inventories at cost 29,971 558,746 588,717
Assets held for resale 4,258,800 4,258,800
Restricted assets:
Cash and investments 234,210 234,210
Capital assets:
Nondepreciable 5,969,410 5,112,433 11,081,843
Depreciable 30,731,726 33,136,063 63,867,789
Total assets 93,098,516 47,712,879 140,811,395
Liabilities:
1 Accounts payable 470,898 256,035 726,933
Contracts payable 224,913 180,247 405,160
Due to other governments 8,649 646,836 655,485
Deposits payable 242,860 242,860
Accrued salaries and wages 281,676 40,183 321,859
Accrued interest payable 481,718 481,718
Unearned revenue 44,885 124,904 169,789
Liabilities payable from restricted assets:
Deposits payable 234,210 234,210
Compensated absences payable:
Due within one year 96,425 96,425
Due in.more than one year 867,823 867,823
Health insurance liability:
Due within one year 85,700 85,700
Due in more than one year 2,467,636 2,467,636
Bonds payable:
Due within one year 2,540,000 2,540,000
Due in more than one year 25,410,000 25,410,000
Totalliabilities 33,214,533 1,491,065 34,705,598
Net assets:
Invested in capital assets, net of related debt 28,191,206 38,248,496 65,304,632
Restricted for:
Debt service 6,789,753 6,789,753
Tax increment purposes 20,847,'712 20,847,712
Unrestricted 4,055,312 7,973,318 13,163,700
Total net assets 59,883,983 46,221,814 106,105,797
The accompanying notes are an integral part of these financial statements.
21
CITY OF BROOKLYN CENTER, MINNESOTA
STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2006
C
har es For
g
Functions/Proerams Expenses Services
Primary government:
Government activities:
General government 2,936,638 289,203
Public safety 8,039,356 80fl,408
Public works 2,087,259 259,273
Community services 123,172
Parks and recreation 2,565,364 665,332
Economic development 2,567,377 164,531
Interest on long-term debt 1,184,017
Total government activities 19,503,183 2,1'78,747
Business-type activities:
Municipal liquor 970,260 1,244,738
Golf course 282,418 250,444
Earle Brown Heritage Center 2,439,709 2,168,861
Recycling and refuse 245,853 242,588
Street light utility 161,219 221,341
Water utility 1,635,847 1,906,375
Sanitary sewer utility 3,176,426 3,186,569 I
Storm drainage utility 950,425 1,323,607
Total business-type activities 9,862,157 10,544,523
Total primary government 29,365,340 12,723,270
The accompanying notes are an integral part of these financial statements.
22
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
$5,000 (2,562,435) (2,562,435)
688,023 (6,550,925) (6,550,925)
2,117,851 289,865 289,865
(iz3,1�2) (123,i�z�
3,899 (1,896,133) �(1,896,133)
56,966 (2,345,880) (2,345,880)
5,900 (1,178,117) (1,178,117)
748,888 2,208,75 l (14,366,797) (14,366,797)
274,478 274,478
(31,974) (31,974)
(270,848) (270,848)
(3,265) (3,265)
60,122 60,122
270,528 270,528
10,143 10,143
i 373,182 373,182
682,366 682,366
748,888 2,208,751 (14,366,797) 682,366 (13,684,431)
Generalrevenues:
Property taxes 11,618,486 11,618,486
Taac increments 2,682,874 2,682,874
Franchise fees 658,410 658,410
Lodging taaces 738,776 738,776
Grants and contributions not
restricted to specific programs 702,030 702,030
Unrestricted investment earnings 1,928,462 337,231 2,265,693
Gain on disposal of capital asset 23,963 23,963
1 Transfers 303,286 (303,286)
Total general revenues"and transfers 18,656,287 33,945 18,690,232
Change in net assets 4,289,490 716,311 5,005,801
Net assets beginning 58,112,969 45,076,297 103,189,266
Prior period adjustment (2,518,476) 429,206 (2,089,270)
Net assets beginning, restated 55,594,493 45,505,503 101,099,99b
Net assets ending 59,883,983 46,221,814 106,105,797
23
i
1
1
1
I
I
1
1
1
1
This page has 6een /ett b/ank intentionally.
24
FUND FINANCIAL STATEMENTS
25
CITY OF BROOKLYN CENTER, MINNESOTA
BALANCESHEET
GOVERNMENTALFUNDS
December 31, 2006
Tax Increment
Assets General District No. 3
Cash and investments 7,857,239 20,306,745
Receivables:
Accounts 60,074
Current t�es �82,894 9,746
Delinquent taxes 256,242 57,432
Special assessments
Due from other funds 410,000
Due from other governments 18,126 39,784
Interfund receivable
Prepaid expenses 500
Advances to other funds
Asset held for resale 4,221,800
Restricted assets:
Cash and investments-performance deposits 234,210
Total assets 8,509,285 25,045,507
Liabilities and Fund Balances
Liabilities:
Accounts payable 230,885 37,723
Accrued salaries and wages 267,285 881
Due to other funds
Due to other governments 4,149
Contracts payabie
Interfund payable
Deferred revenue 2b3,566 4,279,232
Liabilities payable fromxestricted assets:
Deposits payable 234,210
Total liabilities 1,000,095 4,317;836
Fund balances:
Reserved:
Prepaid items 500
Advances from other funds
Debt service
Committed contracts
Unreserved:
Designated, reported in:
General Fund 7,508,690
Specia7 Revenue Funds 11,516,322
Capital Project Funds
Undesignated, reported in:
Special Revenue Funds 9,211,349
Capital Project Funds
Total fund balances 7,509,190 20,727,671
Total liabilities and fund balances 8,509,285 25,045,507
The accomparrying notes are an integra! part of these financial statements.
26
I
Statement 3
Page 1 of 2
Other
G.O. Improvement Nonmajor Total
Bonds Governmental Governmental
3,087,980 8,101,477 39,353,441
180,866 240,940
996 9,130 102,7b6
18,771 48,000 380,445
3,044,712 142,220 3,186,932
410,000
80,120 138,030
262,206 262,206
500
792,488 792,488
37,000 4,258,800
234,210
6,152,459 9,653,507 49,360,758
109,816 378,424
7,477 275,643
410,000 410,000
4,500 8,649
224,913 224,913
262,206 262,206
3,054,232 257,074 7,854,104
234,210
3,054,232 1,275,986 9,648,149
500
792,488 792,488
3,098,227 1,104,749 4,202,976
181,344 181,344
7,508,690
1,922,502 13,43 8, 824
4,861,857 4,861,857
212,038 9,423,387
(697,457) (697,457)
3,098,227 8,377,521 39,712,604
6,152,459 9,653,507 49,360,758
27
CITY OF BROOKLYN CENTER, MINNESOTA Statement 3
BALANCE SHEET Page 2 of 2
GOVERNMENTALFUNDS
December 31, 2006
Fund balance governmental funds is different from net assets governmental activities because:
Total fund balances (Statement 3) 39,712,609
Capital assets used in governmental activities are not financial resources,
and therefore, are pot reported in the funds. 34,141,021
Other long-term assets are not available to pay for current-period expenditures
and, therefore, are deferred in the funds. 7,809,219
Long-term liabilities, including bonds payable, are not due and payable in
the cunent period and therefore are not reported in the funds. (28,431,718)
Internai service funds are used by management to charge the cost of certain
activities to individual funds. The assets and liabilities
are included in the governmental statement of net assets. 6,652,852
Net assets of governmental activities (Statement 1) 59,883,983
t
t
28
This page has been /eft b/ank intentional/y.
29
CITY OF BROOKLYN CENTER, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
GOVERNMENTALFUNDS
For the Year Ended December 31, 2006
Tax Increment
General District No. 3
Revenues:
Property ta�ces 10,418,863
Tax increments 1,609,994
Franchise fees
Lodging taxes 738,776
Special assessments
Licenses and permits 722,633
Intergovernmental 1,269,005 39,784
Charges for services 683,968
Fines and forfeits 256,600
Investment earnings (net of ►narket value adjustment) 239,470 881,312
Misce(laneous 85,767
Total revenues 14,415,082 2,531,090
Expenditures
Current:
General government 2,737,213
Public safety 7,158,112
Public works 1,696,557
Community services 123,172
Parks and recreation 2,176,686
Economic development 350,919 726,574
Nondepartmental 363,967
Administrative services reimbursement (529,362)
Capital outlay:
General government 9,680
Public safety 18,707
Public works 13,084
Parks and recreation 12,108 t
Economic development 2,913,979
Debt service:
Principal retirement
Interest
Fiscal agent fees
Bond issuance costs
Total expenditures 14,13Q843 3,640,553
Revenues over (under) expenditures 284,239 (1,109,463)
Other financing sources (uses):
Bond proceeds
Discount on bond proceeds
Transfers in
Transfers out (70,000) 51,887,804)
Total other financing sources (uses) (7Q000) (1,887,804)
Net increase (decrease) in fund balances 214,239 (2,997,267)
Fund balances 7anuary 1, as previously stated 7,294,951 23,664,938
Prior period adjustment 6Q000
Fund balances January 1, restated 7,294,951 23,724,938
Fund balances December 31 7,509,190 20,727,671
The accompanying notes are an integral part of these financial statements.
30
Statement 4
Other
G.O. Improvement Nonmajor Total
Bonds Governmental Governmental
111,874 994,303 11,525,040
1,054,150 2,664,144
658,410 658,410
738,'776
924,087 29Q484 1,214,571
722,633
1,066,908 2,375,697
3&,250 722,218
256,600
106,850 374,099 1,601,731
391,529 477,296
1,142,811 4,868,133 22,957, I 16
101,937 2,839,150
141,730 7,299,842
120,563 1,817,120
123,172
35;456 2,212,142
309,065 1,386,558
363,967
(529,362)
40,903 50,583
3,003 21,710
2,907,008 2,920,092
12,108
2,913,979
1,000,000 2,127,146 3,127,146
t 67,284 1,030,108 1,197,392
21,287 1,448 22,735
30,491 30,491
t,188,571 6,848,858 25,808,825
(45,760) (1,980,725) (2,851,709)
39,610 1,420,390 1,460,000
(445) (445)
2,784,116 2,784,116
(253,405) �2,211,209)
39,610 3,950,656 2,032,462
(6,150) 1,969,931 (819,247)
3,104,377 6,407,590 40,471,856
6Q000
3,104,377 6,407,590 40,531,856
3,098,22'7 8,377,521 39,712,609
31
This a e has been /eft b/ank intentionall
P9 Y
32
CITY OF BROOKLYN CENTER, MINNESOTA
RECONCILIATION OF THE STAT'EMENT OF REVENUES, Statement 5
EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2006
Amounts reported for governmental activities in the statement of activities are different because:
Net changes in fund balances total governmental funds (Statement 4) (819,247)
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. 1,417,308
Revenues in the statement of activities that do not provide current financial resources are not
reported as revenues in the funds. 2,107,877
The issuance of long-term debt (e.g., bonds, leases) provides current financial resources
to governmental funds, while the repayment of the principal of long-term debt consumes
the cunent 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
of long-term debt and related items. 1,415,000
Internal service funds are used by management to charge the cost of certam achvmes to
individual funds. This amount is net revenue attributable to governmental activities. 132,443
Accrued interest reported in the statement of activities does not require the use of current financial
resources and, therefore, is not reported as expenditures in governmental funds. 36,109
Change in net assets of governmental activities (Statement 2) 4,289,490
The accompanying notes are an integral part of these financial statements.
33
CITY OF BROOKLYN CENTER, MINNESOTA
STATEMENT OF FUND NET ASSETS
PROPRIETARY FUNDS
December 31, 2006
Major
Municipal Golf Earle Brown
Liquor Course Heritage Center
Assets
Current assets:
Cash and cash equivalents 949,471 81,900 1,141,255
Accounts receivable net 7,780 223,561
Special assessments receivable
Due from other governments
Prepaid items 21,432 5,499
Inventories at cost 511,212 1,784 27,101
Total current assets 1,489,895 83,684 1,397,416
Noncurrent assets:
Capital assets:
Land 1,390,402 1,493,300
Land improvements 40,258 327,830
Buildings and structures 192,771 487,946 11,039,134
Machinery and equipment 111,167 11,160 195,529
Mains and lines
Construction in progress
Total capital assets 303,938 1,929,766 13,055,793
Less: Allowance for depreciation (202,942) (239,874) (5,735,862)
Net capital assets 100,996 1,689,892 7,319,931
Total assets 1,590,891 1,773,576 8,717,347
Liabilities
Current liabilities:
Accoants payable 123,777 560 49,712
Accrued salaries payable 9,778 1,170 16,745
Contracts payable 180,247
Due to other governments 46,916 163 18,658
Deposits payable 242,810
Deferred revenue 485 1,600
Advances from other funds 792,488
Compensated absences payable-current
Accrued health insurance liability-current
Total current liabilities 180,956 794,381 509,772
Noncurrent liabilities:
Compensated absences payable-long-term
Accrued health insurance liability-long-term
Total noncurrert liabilities
Totalliabilities 180,956 794,381 509,772
Net assets
Invested in capital assets, net of related debt 100,996 1,689,892 7,319,931
Unrestricted 1,308,939 (710,697) 887,644
Total net assets 1,409,935 979,195 8,207,575
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds
Net assets of business-type activities
The accompanying nodes are an integral part of these financial statements.
34
Statement 6
Business-Type Activities Governmental
Enterprise Other Activities-
Water Sanitary Sewer Storm Drainage Nonmajor Total Internal Totai
Utility Utility Utility Enterprise Enterprise Service Proprietary
7 372 031 7 488 356 14 860 387
1,811,509 1,926,733 1,353,496 107,667
380,020 816,289 333,141 116,Sll 1,877,302 14,771 1,892,073
350,856 2,343 231 353,430 353,430
93,811 93,811 93,811
500 149,850 177,281 177,281
18,649 558,746 29,971 588,717
2,561,534 2,989,026 1,686,868 224,178 10,432,601 7,533,098 17,965,699
3 197 342
23 093 3 389 287 158 3 197 342
368,088 166,108 534,196
3,033,212 2,710,146 17,463,209 17,463,209
128 668 179 130 625,654 6,179,996 6,805,650
15,268,189 13,657,909 13,598,030 42,524,128 42,524,128
677,964 658,069 579,058 1,915,091 1,915,091
19,131,126 17,208,643 14,464,246 66,093,512 6,346,104 72,439,616
(10,476,013) (8,065,730) (3,124,595) (27,845,016) (3,785,989) (31,631,005)
8,655,113 9,142,913 11,339,651 38,248,496 2,560,115 40,808,611
11,216,647 12,131,939 13,026,519 224,178 48,681,097 10,093,213 58,774,310
44,359 33,577 1,607 2,443 256,035 92,474 348,509
7,399 3,738 1,353 40,183 6,033 46,216
180,247 180,247
634 580,465 646,836 646,836
50 242,860 242,860
122,819 124,904 124,904
792,488 792,488
96,425 96,425
85,700 85,700
175,261 617,780 2,960 2,443 2,283,553 280,632 2,564,185
867,823 867,823
2,467,636 2,467,636
3,335,459 3,335,459
175 261 617 780 2 960 2 443 2 283,553 3,616,091 5,899,644
8,655,113 9,142,913 11,339,651 38,248,496 2,560,115 40,808,611
2,386,273 2,371,246 1,683,908 221,735 8,149,048 3,917,007 12,066,055
11,041,386 11,514,159 13,023,559 221,735 46,397,544 6,477,122 52,874,666
U5,730)
46,221,814
35
i
CITY OF BROOKLYN CENTER, MINNESOTA
STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
For the Year Ended December 31, 2006
Major
Municipal Golf Earle Brown
Liquor Course Heritage Center
Operating revenues:
Sales and user fees 5,15$,987 250,339 4,260,168
Cost of sales 3,922,143 2,128,951
Total operating revenues 1,236,844 250,339 2,131,217
Operating expenses:
Personal services 469,203 130,070 881,578
Supplies 25,291 14,895 156,069
Other services 151,072 87,623 404,076
Insurance 11,229 7,433 44,640
Utilities 37,106 18,873 221,342
Rent 242,801 148,323 t
Depreciation 26,359 27,170 578,401
Total operating expenses 963,061 286,064 2,434,429
Operating income (loss) 273,783 (35,725) (303,212)
Nonoperating revenues (expenses):
Investment earnings 37,095 2,252 46,479
Special assessments
Gain loss on sale of ca ital asset
P
Otherrevenue 7,894 105 37,644
Total nonoperating revenues (expenses) 44,989 2,357 84,123
Income (loss) before contributions and transfers 318,772 (33,368) (219,089)
Capital contributions 40,903
Transfers in 49,000
300 000
Transfers out 125 000
Change in net assets 193,772 15,632 (478,186)
Net assets Janua 1, as reviousl stated 1,216,163 963,563 8,685,761
rY P Y
Prior period adjustment
Net assets January 1, restated 1,216,163 963,563 8,685,761
Net assets December 31 1,409,935 979,195 8,207,575
Adjustment to reflect the consolidation of internai service fund activities related to enterprise funds
Change in net assets of business-type activities (Statement 2)
The accompanying notes are an integral part of these financial statements.
36
1
Statement 7
Business-Type Activities Governmental
Enterprise Other Activities-
Water Sanitary Sewer Storm Drainage Nonmajor Total Internal Total
Utility Utility Utility Enterprise Enterprise Service Proprietary
1,881,454 3,092,574 1,323,607 463,929 16,431,058 1,472,708 17,903,766
6,051,094 6,051,094
1,881,454 3,092,574 1,323,607 463,929 10,379,964 1,472,708 11,852,672
377,065 148,811 59,162 2,065,889 959,207 3,025,096
142,843 11,466 18,638 794 369,996 349,085 719,081
372,014 2,485,479 334,542 257,400 4,092,206 107,954 4,200,160
12,787 5,729 2,577 3,342 87,737 49,841 137,578
151,428 30,934 145,536 605,219 2,014 607,233
391,124 391,124
578,159 503,231 540,962 2,254,282 465,491 2,719,773
1,634,296 3,185,650 955,881 407,072 9,866,453 1,933,592 11,800,045
247,158 (93,076) 367,726 56,857 513,Sll (460,884) 52,627
67,357 106,275 70,739 7,034 337,231 326,731 663,962
21,502 184 21,686 21,686
30,651 30,651
3,419 93,811 142,873 35,383 178,256
92,278 200,270 70,739 7,034 501,790 392,765 894,555
339,436 107,194 438,465 63,891 1,015,301 (68,119) 947,182
(59,511) 324,771 306,163 168,316 474,479
29,755 78,755 36,542 115,297
(42,826) (13,071) (176,011) (31,296) (688,204) (688,204)
237,099 123,878 587,225 32,595 712,015 136,739 848,754
10,725,703 11,242,343 12,233,650 189,140 45,256,323 6,340,383 51,596,706
78,584 147,938 202,684 429,206 429,206
10,804,287 11,390,281 12,436,334 189,140 6,340,383 52,025,912
i I1,U41,386 11,514,159 13,023,559 221,735 6,477,122 52,874,666
4,296
716,311
3�
CITY OF BROOKLYN CENTER, MINNESOTA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For [he Year Ended December 31, 2006
Maior
Municipal Golf Eazle Brown
Liquor Course Heritage Center
Cash flows from operating activities
Receipts from customers and users 5,159,152 250,339 4,203,921
Receipts from interfund services provided
Payments to suppliers (4,381,1 ll) (128,239) (3,029,654)
Payments to employees (468,976) (130,294) (879,033)
Misce(laneous revenue 7,894 105 37,644
Net cash flows provided (used) by operating activities 316,959 (8,089) 332,878
Cash flows from noncapital financing activities
Principal repayments on advance (7,512)
Transfers in 49,000
Transfers out (125,000) (300,000)
Special assessments
Interfund payable
Net cash t7ows provided (used) by noncapital financing activities (125,000) 41,488 (300,000)
Cash flows from capital and re(ated financing activities:
Capital contributions
Acquisition and construction of capital assets
Proceeds from sale of assets
Net cash flows provided (used) by capital and related financing activities
Cash flows from investing activities:
Interest on investments 3'7,095 2,252 46,479
Net increase (decrease) in cash and cash equivalents 229,054 35,651 79,357
Cash and cash equivalents January 1 720,417 46,249 1,061,898
Cash and cash equivalents December 31 949,471 81,900 1,141,255
Reconciliation of operating income to net cash
provided (used) by operating activities:
Operating income (loss) 273,783 (35,725) (303,212)
Adjustments to reconcite operating income (loss)
to net cash flows from operating activities:
Depreciation 26,359 27,170 578,401
Changes in assets and liabilities
(Increase) decrease in receivables (3'1,g47)
(Increase) decrease in inventories 43,088 4 (2,703)
(Increase) decrease in prepaid expenses (837) (1,510)
Increase (decrease) in payables (33,720) 581 59,560
Increase (decrease)in accrued expenses 227 (224) 2,545
Increase{decrease) in deferred revenue 165
Other nonoperating income 7,894 105 37,644
Total adjustments 43,176 27,636 636,09Q
Net cash provided (used) by operating activities 316,959 (8,089) 332,878
Noncash financing activities:
Capital contributions
Capital asset transfers
Gain on sale of assets
The accompanying notes are an integral part of these f:nancia! statements.
38
Statement S
Business-Type Activities Governmental
Enterprise Other Activities-
Water Sanitary Sewer Storm Drainage Nonmajor Total [nternal Total
Utility Utility Utility Enterprise Enterprise Service Proprietary
1,807,939 2,910,510 1,273,153 455,209 16,060,223 16,06Q223
1,462,061 1,462,061
(681,291) (1,970,070) (361,275) (429,284) (10,980,924) (449,730) (11,430,654)
(377,214) (147,615) (59,048) (2,062,180) (448,980) (2,511,160)
3,419 93,811 142,873 35,383 178,256
752,853 886,636 852,830 25 3,159,992 598,734 3,758,726
(7,512) (7,512)
49,000 10,400 59,400
(59,400) (31,296) (515,696) (515,696)
(7,970) 445 39 (7,486) (7,486)
(26,845) (5,837) (32,682) (32,682)
(34,815) (5,392) (59,361) (31,296) (514,376) 10,400 (503,976)
80,000 80,000
(692,064) (658,064) (571,589) (1,921,722) (1,131,677) {3,053,399}
163,669 163,669
(692,064) (658,069) {571,589) (1,921,722) (888,008) (2,809,730)
67,357 106,275 70,739 7,034 337,231 326,731 663,962
93,331 329,450 292,619 1,663 1,061,125 47,857 1,108,982
1,718,178 1,597,283 1,060,877 106,004 6,310,906 7,440,499 13,751,405
1,811,509 1,926,733 1,353,496 107,667 7,372,031 7,488,356 14,860,387
247,158 (93,076) 367,726 56,857 513,511 (460,884) 52,627
578 159 503 231 540 962 2,254,282 465,491 2,719,773
(58,518) (182,064) (50,454) (8,720) (337,603) (5,780) (343,383)
(1,293) 39,096 1,464 40,560
(20,304) (22,651) (22,651)
(3,776) 583,842 (5,518) (22,212) 578,75'� 57,700 636,457
(149) 1,196 114 3,709 505,360 509,069
(12,147) (11,982) (11,982)
3,419 93,811 142,873 35,383 178,256
505,695 979,712 485,104 (3Q932) 2,646,481 1,059,618 3,706,099
752,853 886,636 852,830 25,925 3,159,992 598,734 3,758,726
5,000
(102,337) 16,684 109,458
30,651
39
This a e has been /eft blank intentionall
P9 Y
40
1
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
The City of Brooklyn Center was incorporated in 1911 and has operated under a Council/Manager form of
government since the adoption of the City charter in 1966. The governing body consists of a mayor and four
City Council members elected at-large to serve four-year staggered terms. The City provides a full range of
municipal services to its citizens, including public safety (police and fire protection), highways and streets,
parks and recreation, public improvements, planning and inspections, economic development, sanitary and
storm sewer, water, and general administrative services.
Note L SUMMARY OF SIGMFICANT ACCOUNTING POLICIES
The financial statements of the City have been prepared in accordance with accounting principies generally
accepted in the United States of America (GAAP), as applied to governmental units by the Governmental
Accounting Standards Board (GASB). The City also applies Financial Accounting Standards Board (FASB)
statements and interpretations issued prior to December l, 1989 to its governmental and business-type activities
at the government-wide financial reporting level and to its proprietary finds at the fund reporting level,
provided they do not conflict with or contradict GASB pronouncements.
The City's significant accounting policies are described below.
A. REPORTING ENTTTY
The City includes all funds, organizations, institutions, agencies, departments, boards, and offices that are
not legally separate from the City. Component units are legally separate organizations for which the
elected officials of the City are financially accountable and are included within the basic financial
statements of the City because of the significance of their operational or financial relationships with the
C 1
The City is considered financially accountable for a component unit if it appoints a votmg ma�ority of the
organization's governing body and is able to impose its will on the organization by significantty
influencing the programs, projects, activities, or level of services performed or provided by the
organization, or there is a potential for the organization to provide specific financial benefits to, or impose
specific financial burdens on, the City.
Blended component units, although legally sepa�ate, are, in substance, part of the governmenYs operations.
A blended component unit is reported as if it were a fund of the City throughout the year. It is included at
both the government-wide and fund financiat reporting levels.
A description of the City's blended component units follows:
City of Brooklyn Center Housing and Redevelopment Authority (HRA) The City Council serves as the
Board of Directors for the f�RA. The Council reviews and approves the tax levy and all expenditures for
the HRA. The HRA is reported as a Special Revenue Fund. The HRA does not issue separate financial
statements. Financial information may be obtained at the City's offices.
City ojBrook[yn Center Economic Development Authoriry (EDA) The governing board for the EDA is
the City Council. The council reviews and approves major community development improvement
activities. City general obligation tax increment financing bonds are issued to finance EDA activities. The
EDA is reported in the Economic Development Authoriry, Earle Brown TIF District, TIF District No. 3,
TIF District No. 4, and the Community Development Block Grant Special Revenue Funds; the Tax
Increment Bonds Debt Service Fund; the Earle Brown Heritage Center Improvements Capital Project
Fund; and the Earle Brown Heritage Center Enterprise Fund. The EDA does not issue separate financial
statements. Financial information may be obtained at the City's offices.
41
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL S1'ATEMENTS
December 31, 2006
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
The government-wide financiat statements (i.e., the statement of net assets and the statement of changes in
net assets) report information on all of the nonfsduciary activities of the primary government and its
component units. Governmental activities, which normally are supported by taxes and intergovernmental
revenues, are reported separately from business-rype activities, which rely to a significant extent on fees
and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or
segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a
specific function or segment. Program revenues include 1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function or
business-type activity and 2) grants and contributions that are restricted to meeting the operational or
capital requirements of a particular function or business-type activity. Ta�ces 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
overnmental funds and ma'or individual enter rise funds are re orted as se arate columns in the fund
g J P
P P
financial statements.
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT
PRESENTATION
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accourrting, as are the proprietary fund financial statements. Revenues are
recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of
related cash flows. Property taxes and special assessments are recognized as revenues in the year for
which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility
requirements imposed by the provider have been met.
Governmental fund financiat statements are reported using the current f:nancial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collectible within the
current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the
government considers all revenues, except reimbucsement grants, to be ava'slable if they are collected
within 60 days of the end of the current fiscal period. Reimbursement grants are considered available if
they are collected within one year of the end of the cunent fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accruai accounting. However, debt service expenditures, as
well as expenditures related to claims and judgments, are recorded only when payment is due.
Property taxes, special assessments, intergovernmental revenues, charges for services and interest
associated with the current fiscal period are all considered to be susceptible to accrual and so have been
recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due
within the current fiscal period is considered to be susceptible to accrual as revenue of the current period.
All other revenue items are considered to be measurable and available only when cash is received by the
government.
42
1
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 1 SUMMARY OF S[GNIFICANT ACCOUNTING POLICIES
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT
PRESENTATION (Continued)
The government reports the following major governmental funds:
The General Fund is the government's primary operating fund. It accounts for all financial resources
of the general government, except those required to be accounted for in another fund.
The Tax Increment District No. 3 Special Revenue Fund has the authority to collect tax increments
which are used for various redevelopment projects within the City and for debt service payments of
bonds which were issued for the same purpose.
The G. O. Improvement Bonds Debt Service Fund is used to account for the accumulation of resources
for the payment of improvement bonds. These bonds were sold to finance certain public
improvements such as residential streets and storm sewers or the provision of services which are to be
paid for wholly or in part from special assessments levied against benefited property.
The government reports the following major enterprise funds:
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 executive golf
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 6een historically preserved and restored as a
modern multipurpose facility. Its convention center can host conferences, trade shows, and concerts.
The Water Utility Fund accounts for the pumping, treatment and distribution of water to customers.
Administration, wells, water storage, and distribution are included.
The Sanitary Sewer Utility Fund accounts for the collection and pumping of sanitary sewage through a
system of sewer lines and lift stations. Sewage is treated by the Metropolitan Council Environmental
Services whose fees represent about 62% of this fund's expenses.
The Storm Drainage Utiliry Fund accounts for the coilection and treatment of surface runoff water that
does not require sanitary wastewater treatment. It incorporates not only the storm sewer collection
system, but also structures such as holding ponds and facilities to improve water quality. Fees are
based upon the quantity of water running off a property and vary with both size and absorption
characteristics of the parceL
43
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT
PRESENTATION (Continued)
Additionally, the government reports the following fund type:
fnternal Service Funds account for compensated absences, health care insurance benefits and central
garage services provided to other departments of the City on a cost reimbursement basis.
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial
statements. Exceptions to this general rule are transactions that would be treated as revenues, expenditures
or expenses if they �nvolved external organizations, such as buying goods and services or payments in lieu
of taxes. Elimination of these charges would distort the direct costs and program revenues reported for the
various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services,
or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions,
including special assessments. Internally dedicated resources are reported as general revenues rather than
as program revenues. Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the
enterprise funds and internal service funds are charges to customers for sales and services. Operating
expenses for enterprise funds and internal service funds include the cost of sales and services,
administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this
definition are reported as nonoperating revenues and expenses.
D. CASH AND INVESTMENTS
The City considers all highly liquid investments with a maturity of three months or less when purchased to
be cash equivalents. All of the cash and investments allocated to the proprietary funds have original
maturities of 90 days or less.
44
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. CASH AND INVESTMENTS (Continued)
The City's investment policy authorizes the City to invest in the following:
a) Securities that are direct obligations or are guaranteed or insured issues of the United States, its
agencies, its instrumentalities, or organizations created by an act of congress, including
governmental bills, notes, bonds and other securities.
b) Commercial paper issued by U.S. corporations or their Canadian subsidiaries that is rated in the
highest quality by at least two nationally recognized rating agencies and matures in 270 days or less.
c) Time deposits that are fully insured by the Federal Deposit Insurance Corporation or bankers
acceptances of U.S. banks.
d) Repurchase agreements and reverse repurchase agreements with financial institutions identified by
Minnesota Statutes Chapter 118A.
e) Securities lending agreements may be entered into with financial institutions identified by
Minnesota Statutes Chapter 118A.
fl Minnesota joint powers investment trusts may be entered into with trusts identified by Minnesota
Statutes Chapter 118A
g) Money market mutual funds regulated by the Securities and Exchange Commission and whose
portfolios consist only of short term securities permitted by Minnesota Statutes 118A.
h) Bonds of the City of Brooklyn Center issued in prior years, may be redeemed at current market
price, which may include a premium, prior to maturing using surplus funds of the debt service fund
set up for that issue.
Investments are reported at fair value, based on quoted market prices as of the balance sheet date.
Adjustments necessary to record investments at fair value are recorded in the operating statement as
increases or decreases in investment earnings. Investment income on commingled funds is allocated
monthly, based on month-end balances.
E. RECEIVABLES AND PAYABLES
During the course of operations, numerous transactions occur between individuat funds for goods provided
or services rendered. Short-term interfund loans are classified as "interfund receivable/payable." All
short-term interfund receivables and payables at December 31, 2006 are planned to be eliminated in 2007.
Long-term interfund loans are classified as "interfund loan receivable/payable." Any residual balances
outstanding between the governmental activities and business-type activities are reported in the
government-wide financial statements as "internal balances."
Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve
account in applicable governmental funds to indicate that they are not available for appropriation and are
not expendable financial resources.
The City expects to make full collection of all trade and property tax receivables, so no allowance is
considered necessary.
45
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
E. RECEIVABLES AND PAYABLES (Continued)
Property tax levies are submitted to the County in December each year. The County allocates these levies
across taxable properties in the City based on valuations certified in the prior year. The County collects
these levies and distributes the City's proceeds in June and December of the fiscal year. These tases are
reported as general revenues in the government-wide financial statements in the year levied. Unpaid taxes
at December 31 become liens on the respective property and are classified as delinquent receivabies and
are fully offset by deferred revenue in the fund financial statements.
F. INVENTORIES AND PREPAID ITEMS
Inventories in the proprietary funds are valued at cost, using the weighted average method in the Municipal
Liquor Fund and the first-in/first-out (FIFO) method in the other proprietary funds. Inventories of
governmental funds are recorded as expenditures when purchased rather than when consumed.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items in both government-wide and fund financial statements.
G. CAPITAL ASSETS
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges,
sidewalks, and similar items), are reported in the applicable governmental or business-type activities
columns in the government-wide financial statements. Capital assets are defined by the government as
assets with an initial, individual cost as shown below and an estimated useful life in excess of one year.
Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated
capital assets are recorded at estimated fair market value at the date of donation.
Infrastructure 250,000
Buildings and Building Improvements 50,000
Land Improvements 25,000
Heavy Equipment 25,000
Furniture and furnishings 10,000
Motorized vehictes 10,000
Technology equipment 10,000
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend
assets lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest
incuned during the construction phase of capital assets of business-type activities is included as part of the
capitalized value of the assets constructed. For the year ended December 31, 2006 no interest was
capitalized in connection with construction in progress.
t
46
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
G. CAPITAL ASSETS (Continued)
Capital assets of the City, as well as the component units, are depreciated using the straight line method
over the following estimated useful lives:
Land improvements 25 years
Buildings and structures 25 years
Water and sewer mains and lines, welis and storage
tanks, sewer lift stations 25 years
Infrastructure 25 years
Machinery and equipment 5-15 years
H. COMPENSATED ABSENCES
It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits.
All vacation and vested sick leave pay is accrued in the Public Employee Compensated Absences fund. A
liability for these amounts is reported in govemmental funds only if they have matured, for example, as a
result of employee resignations and retirements. In accordance with the provisions of Statement of
Government Accounting Standards No. 16, Accounting for Compensated Absences, a liability is
recognized for that portion of accumulating sick leave benefits that is vested, or expected to vest, as
severance pay.
I. LONG TERM OBLIGATIONS
In the government-wide financial statements and proprietary fund types in the fund financial statements,
long-term debt and other long-term obligations are reported as liabilities in the applicable governmental
activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and
discounts, as well as issuance costs, are immaterial and are expensed in the year of bond issuance.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well
as bond issuance costs, during the current period. The face amount of debt issued is reported as other
financing sources. Premiums received on debt issuances are reported as other financing sources while
discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld
from the actual debt proceeds received, are reported as debt service expenditures.
J. FUND EQUITY
Fund equity in the fund financial statements is classified as fund balance for governmental funds and net
assets for proprietary funds. Fund equity in the government-wide financial statements is classified as net
assets for both governmental and business-type activities.
47
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
J. FUND EQUITY (Continued)
Fund balance Generally, fund balance represents the difference between cunent assets and current
'f
liabilities. The Ci reserves those ortions of fund balance which are le all se re ated for a s eci
tY P g Y g g P
future use or which do not represent available, spendable resources and are therefore not available for
general appropriation or expenditure. Unreserved fund baiance indicates that portion of fund balance that
is available for appropriation in future periods. Designations are managemenYs intent to set aside these
resources for s ecific u oses.
P P
Net assets Net assets represent the difference between assets and liabilities. Net assets, invested in
capital assets net of related debt, consists of capital assets, net of accumulated depreciation, reduced by the
outstanding balances of any bonds, mortgages, notes or other borrowings used for the acquisition,
construction, or improvement of those assets. Net assets are reported as restricted when there are
limitations imposed on their use either through constitutional provisions or enabling legislation, or through
external restrictions imposed by creditors, grantors, or laws or regulations of other governments. All other
net assets are reported as unrestricted.
When both restricted and unrestricted resources are available for an allowable use, it is the government's
policy to use restricted resources first, then unrestricted resources as they are needed.
K. INTERFUND TRANSACTIONS
Interfund services provided and used are accounted for as revenues and expenditures or expenses.
Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that
are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and
as reductions of expenditures/expenses in the fund that is reimbursed. All other interfund transactions are
reported as transfers.
L. USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP requires management to make estimates
and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual
resuhs could differ from such estimates.
Note 2 RECONCIL[ATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
AND THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES
The governmental fund statement of revenues, expenditures, and changes in fund balances includes a
reconciliation between net changes in fund balances tota! governmental funds and changes in net assets
I of governmental activities as reported in the government-wide statement of activities. One element of that
reconciliation explains thaT "Governmental funds report capital outiays as expenditures. However, in the
statement of activities the cost of those assets is atlocated over their estimated useful lives and reported as
depreciation expense." The details of this 1,417,308 difference are as follows:
48
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 3 t, 2006
Note 2 RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
ANT THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES (Continued)
Capital outlay 2,931,588
Net transfers to proprietary funds (23,805)
Loss on disposal of assets (6,688}
Depreciation expense (1,483,787)
Net adjustment to increase net changes in fund
balances total governmental funds to arrive at
changes in net assets of governmental activities 1,417,308
Another element of that reconciliation states that "Revenues in the Statement of Activities that do not
provide current financial resources are not reported as revenues in the funds." The details of this
2,107,877 difference are as follows:
General property taxes deferred revenue:
At December 31, 2005 (227,849)
At December 31, 2006 321,295
Ta�c increment ta�ces deferred revenue:
At December 31, 2005 (restated) (40,420)
At December 31, 2006 59,150
Special assessments deferred revenue:
At December 31, 2005 (3,185,574)
At December 31, 2006 3,169,975
Other deferred revenues:
At December 31, 2005 (adjusted) (2,247,500)
At December 31, 2006 4,258,800
Net adjustments to decrease net changes in fund balances
total governmental funds to arrive at changes in net
assets of governmental activities 2,107,877
Another element of that reconciliation states that "The issuance of long-term debt (e.g., bonds, leases)
provides current financial resources to governmental funds, while the repayment of principal of the long-
term debt consumes the current financial resources of governmental funds. Neither transaction, however,
has any effect on net assets." The details of this 1,415,000 difference are as follows:
49
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 2 RECONC[LIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
ANT THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES (Continued)
Debt issued:
General obligation improvement bonds (1,460,000)
Principal repayments
General obligation debt 875,000
General obligation improvement bonds I,000,000
General obligation ta7c increment bonds 1,000,000
Net adjustment to increase net changes in fund balances
total overnmental funds to arrive at chan es in net assets
g g
of governmental activities 1,415,000
Note 3 STEWARDSHIP. COMPLIANCE. AND ACCOUNTABILITY
A. BUDGETARY INFORMATION
Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the
United States for ali governmental funds. All annua( appropriations lapse at fiscal year end.
In August, the City Manager submits to the City Council proposed operating budgets for the fiscai year
commencing the fol(owing January. The proposed general fund budget and preliminary tax levy must be
certified to the Coun rior to Se tember 15. The Council holds ubtic hearin s on the certified bud et
h' P P P g g
and levy and must submit a final levy to the County prior to the end of December.
The appropriated budget is prepared by fund and department. The City Council must authorize any
transfer of budgeted amounts between departments or funds. Transfers of budgeted amounts within
departments in the General Fund must be authorized by the City Manager. The legal levei of budgetary
control is the department level for the General Fund and the fund level for all other governmental funds.
There were no material supplemental budgetary appropriations during the year.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the
expenditure of monies are recorded in order to reserve that portion of the appropriation, is not employed by
the City.
B. EXCESS OF EXPENDITURES OVER APPROPRIATIONS
For the year ended December 31, 2006 expenditures exceeded appropriations in the General Fund by
58,002, the Tax Increment District No. 3 fund by 3,640,553, the Economic Development Authority
fund by 26,363, the Tax Increment District No. 4 fund by 253,001, and the City Initiatives Grant fund
by 110,546.
50
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
r Note 3 STEWARDSHIP, COMPLIANCE. AND ACCOUNTABILITY (Continued)
C. DEFICIT FUND EQUITY
Deficit fund equiry exists at December 31, 2006 in the following funds:
Unreserved deficit fund balance
Nonmajor Funds:
Infrastructure Construction 697,457
Unreserved deficit net assets
Nonmajor Funds
Employee Retirement Benefit 1,051,756
The deficits are being funded through internal borrowing and will be repaid from construction transfers
from utitity funds, future bond issuance, investment earnings, and internal transfers.
D. PRIOR PERIOD ADJUSTMENTS
FUND STATEMENTS
In 2005, the City was awarded an environmental cleanup grant from Hennepin County. Expenditures for
this grant were made in 2005, documented and forwarded to the grantor for reimbursement, and the
reimbursement was received in 2006. This reimbursement should have been recorded as a receivable at the
end of 2Q05. The beginning fund balance in the Tax Increment District No. 3 fund was increased by
60,000 to reflect this receivable.
The City reassessed its policy on capitalization of infrastructure assets during 2006. Adjustments were
made to include all components of a construction project if the project total exceeds the capitalization
threshold. In 2005, the Water Utility, Sanitary Sewer Utility, and Storm Drainage Utility funds transfened
cash to the Infrastructure Construction fund to pay for the respective utilities portions of reconstruction
projects. These amounts were not included in Construction in Progress in the Enterprise funds at
December 31, 2005. The beginning value of net assets in the Water Utility, Sanitary Sewer Utility, and
Storm Drainage Utility funds was increased by 78,584, 147,938, and 202,684, respectively, to reflect
the capitalization of the project costs.
GOVERNMENT-WIDE STATEMENTS
The City reassessed its policy on capitalization of infrastructure assets during 2006. Adjustments were
made to include all components of a construction project if the total exceeds the capitalization threshold.
In 2005, the Street Light Utility fund transferred cash to the Infrastructure Construction fund to provide
funding for a street reconstruction project. This amount was left off the cost of the project included in
Construction in Progress at December 31, 2005. The beginning value of net assets in the Governmental
Activities was increased by 35,345 to reflect the capitalization of this portion of the asset.
S1
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 3 STEWARDSHIP. COMPLIANCE. AND ACCOUNTABILITY
D. PRIOR PERIOD ADJUSTMENTS
GOVERNMENT-WIDE STATEMENTS (Continued)
The Economic Development Authority fund purchased two properties intended for redevelopment in prior
years. These properties have not been included in previous financia] statements. The beginning value of
net assets in the Governmental Activities has been increased by 37,000 and the properties have been
recorded as Assets Held for Resale on the balance sheet.
The Tax Increment District No. 3 fund purchased property intended for redevelopment in 2005. The costs
associated with this transaction had been recorded as Construction in Progress, in anticipation of
capitalizing the total cost when necessary improvements were complete and the property was made
available for redeve(opment. This property was reclassified as Assets Held for Resale and recorded at cost,
not to exceed net realizable value. The net effect on the beginning net assets for Governmental Activities
is a decrease of 2,378,733.
The delinquent tax increments receivable balance in the Tax Increment District No. 3 was overstated at the
December 31, 2005. Accurate balance information regarding the receivable balance was obtained for
December 31, 2006 and an adjustment was made to reflect the appropriate balance for the prior year end.
The beginning value of net assets in the Governmental Activities was decreased by 235,728, to reflect
this adjustment.
In prior years, deferred revenue reported in the Infrastructure Construction fund on the Fund Statements
was incorrectly reported as revenue on the Government-Wide Statements. This revenue should have been
reported as unearned revenue in the Governmental Activities. The beginning value of net assets in the
Governmental Activities was decreased by 36,360 to reflect this adjustment.
Note 4 DETAILED NOTES ON ALL FUNDS
A. DEPOSITS A1VD INVESTMENTS
In accordance with Minnesota Statutes, the City maintains deposits at only those depository banks
authorized by the City Council. All such depositories are members of the Federal Reserve System.
Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral. The
market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds.
Authorized collateral includes the legal investments described below, as well as certain first mortgage
notes, and certain other state or local government obligations. Minnesota Statutes require that securities
pledged as collateral be held in safekeeping by the City Treasurer or in a financial institution other than
that furnishing the collateral.
At year-end, the City's carrying value amount of deposits was 86,942 composed of bank balances of
402,112. All balances were covered by federal depository insurance or by perfected collateral held by
the Federal Reserve Bank.
52
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
A. DEPOSITS AND INVESTMENTS (Continued)
As of December 31, 2006 the City had the following investments and maturities:
Investment Maturities (in years)
Less
Investment Type Rating Fair Value than 1 1-5
Federal Home Loan Bank Notes AAA 833,161 833,161
Federal National Mortgage Ass'n Notes AAA 987,160 987,160
External investment pool 4M Fund N/A 26,102,178 26,102,178
Money market N/A 26,430,472 26,430,472
Total investments 54,352,971 52,532,650 1,820,321
Deposits 86,942
Petty cash and change funds 8,125
Total cash and investments 54,448,038
Reconciliation to Statement of Net Assets (Statement 1):
Cash, cash equivalents, and investments 54,213,828
Restricted cash and investments 234,210
Total cash and investments 54,448,038
Interest rate risk The City's investment policy requires interest earnings remain stable and predictable
through at least the next budget cycle and that at least 50% of the investment portfolio remain for two or
more years with known irrterest rates. The policy also states that the portfolio shall remain sufficiently
liquid to meet all operating requirements that may be reasonably expected.
Credit risk As of December 31, 2006 the City's investment in FNMA and FHLB notes were all rated
AAA by Moody's Investor Service. The City's external investment pooi is with 4M which is regulated by
Minnesota Statutes and the Board of Directors of the League if Minnesota Cities. The 4M fund is an
unrated 2a7-like pool and the fair value of the position in the pool is the same as the value of the pool
shares.
Custodial credit risk The City's policy requires that securities purchased from any bank or dealer be
placed with an independent third party for custodial safekeeping. All of the City's investments were held
in an institutional trust under contract with the City for safekeeping services.
53
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS (Continued)
B. RECEIVABLES
Significant receivable balances not expected to be collected within one year of December 31, 2006 are as
follows:
Maior Funds
Tax Increment Speciai Sanitary
District Assessment Water Sewer Nonmajor
General No.3 Bonds Utility Utility Funds Total
Delinquent property taxes 64,060 4,695 11,570 80,325
Delinquenttaxincrements 14,358 430 14,788
Special assessments 2,491,844 123,519 2,083 95,659 2,713,105
64,060 14,358 $2,496,539 123,514 2,083 107,659 $2,808,218 1
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 Uneamed Totals
Delinquent property taxes receivable (General Fund) 256,241 256,241
Delinquent property taxes receivable (G. 0. Improvement Bonds) 18,771 18,771
Delinquent property taxes receivable (Nonmajor Funds) 46,282 46,282
Delinquent tax increment collections (Tax Increment District No. 3) �7,432 57,432
Delinquent tax increment collections (Nonmajor Funds) 1,718 1,718
Special assessments not yet due (G. 0. Improvement Bonds) 3,035,461 3,035,461
Special assessments not yet due (Nonmajor Funds) 134,514 134,514
Fees received but uneamed (General Fund) 7,325 7,325
Fees received but uneamed (Nonmajor Funds) 36,360 36,360
Grants received but unspent (Nonmajor Funds) 1,200 1,200
Assets held for resale (Tax Increment District No. 3) 4,221,800 4,221,800
Assets held for resale (Nonmajor Funds) 37,040 37,000
Total deferred/unearned revenue forgovernmental funds $7,809,2t9 44,885 $7,854,104
The City has leased a portion of the police second floor expansion area to the Local Government 1
Information Systems Association (LOGIS) as a backup computer facility. The lease has a term of six
years, commencing on August 1, 2005, and calls for monthly lease payments based on the square-footage.
Lease revenue for the year ended December 31, 2006 was 8,694. Future minimum lease payments are as
8,694 annually through 2010 and 5,072 for 201 l.
S
54
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS (Continued)
C. CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2006 was as follows:
Beginning
Beginning Priorperiod Balance- Ending
Balance Adiushnent Restated Increases Decreases Balance
Govemmental activities:
Capital assets, not being depreciated:
Land S 3,203,904 S S 3,203,904 S S 3,203,904
Construction in progress 7,962,052 (4,553,888) 3,408,164 2,644,070 (3,286,7282 2,765,506
Total capital assets, not being depreciated 11,165,956 (4,553,888) 6,612,068 2,644,070 (3,286,728) 5,969,410
Capital asseu, being depreciated:
Buildings andimprovements 18,693,898 18,693,898 373,147 (314,071) 18,752,974
Park improvements 3,1 I 1,331 3,111,331 289,219 3,400,550
Departmentalequipment 6,320,094 6,320,094 1,162,488 (915,478) 6,567,104
Streets 22,023,479 22 3,450,755 25,474,234
Total capital assets, being depreciated 50,148,802 50,148,802 5,275,609 (1,229,549) 54,194,862
Less accumulated depreciation foc
Buildin�sandimprovements 5,967,736 5,967,736 860,177 (39,217) 6,788,696
Parkimprovemenu 1,995,881 1,995,881 123,337 2,119,218
Departmentalequipment 4,259,737 4,259,737 492,213 (775,771) 3,976,179
Streets 9,901,314 9,901,314 61'1,729 10,579,043
Totalaccumulated depreciation 22.124,668 22,124,668 2.153,456 (814,988) 23,463,136
Total capital assets being depreciated net 28,024,134 28,024,134 3,122,153 (414,561) 30,731,726
Governmental activities capital assets net S 39.190,090 S(4,553,888) S 34,636,202 5,766,223 $(3,701,289) S 36,701,136
Beginning
Beginning Prior penod Balance Ending
Balance Adjushnent Resiated Increases Decreases Balance
Business-type acdvities:
Capital assets, not being depreciated:
Land S 3,197,342 S 3,197,342 S S 3,197,342
Construction in progress 2,110,290 429,206 2,539,496 1,915,091 (2,539,496� 1,915,091
Total capital assets, not bemg depreciated 5,307,632 429,206 5,736,838 1,915,091 (2,539,496) 5, l 12,433
Capital assets, being depreciated:
Landimprovements 368,088 368,088 368,088
Buildings and'unprovements 17,761,355 17,761,355 108,243 (406,390) 17,463,208
Departmen[equipment 584,751 584,75t 40,903 625,654
Mains andlines 39,774,565 39,774,565 2,754,286 (4,723) 42,524,128
Total capital assets, being depreciated 58,488,759 58,488,759 2,903,43T (411,113) 60,981,078
Less accumulated depreciation for
Land improvements ll5,284 115,284 13,636 128,920
Buildingsandimprovements 8,523,170 8,523,170 897,520 (29Q981) 9,129,709
Departmentequipment 366,934 366,934 42,347 409,281
Mains andlines 16,802,562 16,802,562 1,374 18,177,105
Total accwnulated depreciation 25,807,950 25,807,950 2,328,046 (290,981) 27,845,015
Total capital assets being depreciated net 32,680,809 32,680,809 575,386 (120,132) 33,136,063
Business-type activities capital assets net S 37,988,441 E 429,206 S 38,417,64'I S 2,490,477 S(2,659,628) S 38,248,496
$5
CTTY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
C CAPITAL ASSETS (Continued)
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government 76,754
Public safety 390,035
Public works 757,097
Parks and recreation 259,901
Capital assets held by the governments intemal service funds are
charged to the various functions based on their usage of the assets 522,140
Total depreciation expense governmental activities 1,483,787
Business-type activities:
Municipalliquor 26,359
Golf course 27,170
Earle Brown Heritage Center 578,401
Water utility 578,158
Sanitary sewer utility 576,996
Storm drainage utility 540,962
Total depreciation expense business-type activities 2,328,046
CONSTRUCTION COMMITMENTS
At December 31, 2006 the City had construction project contraets in progress. The commitments related to
remaining contract balances are summarized as follows:
r
Contract Remaining
Project Amount Commihnent
Centerbrook Area Neighborhood 2,233,642 43,597
Humboldt Avenue and Earfe Brown Drive 1,636,352 134,560
Central Salt Storage Facility 341,342 3,186
4,211,336 181,343
56
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS (Continued)
D. INTERFUND BALANCES AND TRANSFERS
Individual fund interfund receivable and payable balances at December 31, 2006 are as follows:
Due from Due to
Fund Other Funds Other Funds
Major Funds:
Tax Increment District No. 3 410,000
Nonmajor Funds:
Economic Development Authority 60,000
Earle Brown Tax Increment District 350,000
Total 410,000 410,000
Advances to Advances From
Fund OtherFunds OtherFunds
Major Funds
Golf Course 792,488
Norunajor Funds:
CapitalImprovements 792,488
792,488 792,488
The $350,000 between the Tax Increment District No. 3 and Earle Brown Tax Increment District funds and
the $792,488 advance between the Golf Course and Capital Improvements funds are not expected to be
eliminated within one year of December 31, 2006.
Interfund Interfund
Fund Receivable Payable
Nonmajor Funds:
CapitalImprovements 262,206
Infrastructure Construction 262,206
262,206 262,206
Interfund payables/receivables are representative of lending/borrowing arrangements to cover deficit cash
balances at the end of the fiscal year. Balances will be paid with transfers from other funds and collections
of outstanding receivables.
57
CITY OF BROOKLYN CENTER, MINNESOTA
NQTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
D. INTERF'UND BALANCES AND TRANSFERS (Continued)
Interfund transfers:
Transfer In Transfer Out
Governmental Funds
Major Funds:
General 70,000
Tax Increment District No. 3 1,887,804
Nonmajor Funds:
Housing and Redevelopment Authority 253,405
Economic Development Authority 253,405
Tax Increment Bonds 1,887,804
Capital Improvements 125,000
Infrastructure Construction 147,907
Earle Brown Heritage Center Improvements 300,000
Technology 70,000
Total govenmental funds 2,784,116 2,211,209
Proprietary Funds:
Major Funds:
Municipal Liquor 125,000
Golf Course 49,000
Earle Brown Heritage Center 300,000
Water Utility 42,826
Sanitary Sewer Utility 29,755 13,071
Storm Drainage Utility 176,011
Nonma�or Funds:
Street Light Utility 31,296
Internal Service Funds:
Central Garage 36,542
Total proprietary funds 115,297 688,204
Total all funds 2,899,413 2,899,413
Reconciliation to Government-Wide Statement of Activities:
Transfers Fund Statements 2,899,413
Less: Government-wide eIiminations (2,289,964)
Add: Transfer of assets from business-type activities
to governmental activities 59,511
Less: Reclassification of capitai contributions from
governmental activities to business-type activities (365,674)
Total Transfers Government-W ide Statement of Activities 303,286
58
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
D. INTERFUND BALANCES AND TRANSFERS (Continued)
Interfund transfers allow the City to allocate financial resources to the funds that receive benefit from
services provided by another fund or to provide additional capital and infrastructure funding. In addition,
interfund transfers are occasionally authorized to allow redistribution of resources between funds for the
most efficient use of funds. In 2006, transfers from the General Fund to nonmajor governmental funds
such as the Technology Fund allowed excess fund General Fund balance to be put to use in ways that
would reduce the need for taxes or other sources of public funds in the nonmajor funds. Transfers from the
Storm Drainage Utility and Street Light Utility funds to the Infrastructure Construction Fund were used to
fund certain street construction projects. Included in the transfers in the Water Utility, Sanitary Sewer
Utility and Central Garage Funds is the book value of assets that were reallocated during the year.
E. OPERATING LEASES
The City leases space for its municipal liquor stores. The leases are both ten-year leases and began in 2000
and 2003. Both leases have options for a ten-year extension. The leases provide for a minimum monthly
base rent payment, plus a pro-rata share of common area expenses. Additional lease payments are required
if agreed-upon revenue thresholds are attained. These leases may be cancelled at the City's option if the
City ceases liquor operations. Total rental expense under the lease agreements for the years ended
December 31, 2006 and 2005 was 242,801 and 235,174, respectively. Future minimum rent payments
under the current agreements are as follows:
Total
Year Minimum
Ending Rents
2007 193,530
2008 193,530
2009 193,530
2010 136, t 58
2011 93,360
2012 93,360
2013 93,360
996,828
F. LONG-TERM DEBT
The City issues general obligation bonds to provide funds for the construction of major capital facilities,
construction of infrastructure, and economic development and redevelopment. General obligation bonds
have been issued for governmental activities. During the year, general obligation improvement bonds of
I i 1,460,000 were issued to finance several street and storm reconstruction projects.
I I
I
I
59
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FTNANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
F. LONGTERM DEBT (Continued)
As of December 31, 2006 the long-term debt of the financial reporting entity consisted of the following.
GOVERNMENTAL ACTIVITIES
F inal
[nterest Maturity Original Payable
Rates Date Date Issue 12/3 U06
General Obligation Bonds:
Police and Fire Building Refunding Bonds 2.00%-3.35% 12/Ol/2004 02/O1/2013 5,045,000 4,465,000
G.O. Tax Increment Bonds:
Taxable Tax lncrement Refunding Bonds of 2004 2.25%-4.40% 12/O 1/2004 02/O1/2011 2,470,000 2,060,000
Taxable Tax Increment Bonds of 2004 4.75°/a-5.125°/a 12/Ol/2004 02lO1/2020 17,245,000 16,245,000
Total G.O. Tax [ncrement Bonds 19,715,000 18,305,000
G.O. Improvement Bonds:
1996 Improvement Bonds 4.15%-5.10% 1 I/OU1996 02/01/2007 1,440,000 160,000
1997Improvement Bonds 4.00%-4.65% 12/O]/1997 02/O1/2008 1,075,000 200,000
1998 [mprovement Bonds 3.40%-4.20% 12/01/1998 02/Ol/2009 1,085,000 295,000
19991mprovemeni Bonds 4.10%-5.00% 12/01/1999 02/O1/2010 1,585,000 615,000
2000 [mprovement Bonds 4.30%-4.95% 12/01/2000 02/OU2011 735,000 345,000
2001 [mprovement Bonds 2.60%-4.40% l2/01/2001 02/01/2012 730,000 410,000
2003 Improvement Bonds 1.45%-4.00% O1/O1/2003 02/O1/2013 1,205,000 805,000
2004 Improvement Bonds 2.10%-3.65% 12/01/2004 02/O1/2015 1,010,000 890,000
20061mprovement Bonds 3.55%-3.80% 12/O1/2006 02/O1/2017 1,460,000 1,460,000
Total G.O. Improvement Bonds 10,325,000 5,180,000
Total -bonded indebtedness 35,085,000 27,950,000
Compensated absences payabie 964,248
Total City indebtedness govemmental activities 35,085,000 28,914,248
i All long-term bonded indebtedness outstanding at December 31, 2006 is backed by the full faith and credit
of the City, including improvement and tax increment bond issues. Bonds in the governmental activities
will be retired by future property tax levies, tax increments or special assessments accumulated in the
specific debt services funds. In the event that a deficiency exists because of unpaid or delinyuent taac
increments or special assessments at the time a debt service payment is due, the City must provide
resources to cover the deficiency until other resources are available. Delinquent tax increments in the
governmental funds at December 31, 2006 were 59,150; delinquent special assessments in the
g
overnmental funds at December 31, 2006 were 89,977, which is inciuded in the special assessments
receivable balance of 3,186,932.
60
1
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
F. LONG-TERM DEBT
GOVERNMENTAL ACTIVITIES (Continued)
Annual debt service requirements to maturity for long-term debt are as follows:
Govemmental Activities
Year Ending General Obligation Bonds G.O. Tax Increment Bonds G.O. Improvement Bonds
December 31 Principal Interest Principal Interest Principal Interest
2007 590,000 124,689 1,050,000 847,237 900,000 162,486
2008 600,000 110,552 1,030,000 804,491 980,000 145,121
2009 610,000 93,903 1,095,000 759,214 765,000 111,352
2010 640,000 '75,153 1,120,000 710,280 645,000 83,597
2011 640,000 55,632 1,165,000 658,155 485,000 61,495
2012-2016 1,385,000 46,306 6,175,000 2,491,183 1,340,000 1ll,173
2017-2020 6,670,000 702,500 65,000 1,235
Total 4,465,000 506,235 18 6,973,060 5,180,000 676,459
CHANGE IN LONG-TERM LIABILITIES
Long-term liability activity for the year ended December 31, 2006 was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Yeaz
Governmental activities:
Bonds payable:
General obiigation bonds 5,34Q000 (875,000) 4,465,000 590,000
G.O. tax increment bonds 19,305,000 (1,000,000) 18,305,000 1,050,000
G.O. improvementbonds 4,720,000 1,460,000 (1,000,000) 5,180,000 900,000
Total bonds payable 29,365,000 1,460,000 (2,875,000) 27,950,000 2,540,000
Compensated absences 919,113 104,898 (59,763) 964,248 96,425
Total government activity
long-term liabilities 3Q284,113 1,564,898 $(2,934,363) 28,914,248 2,636,425
Compensated absences are liquidated by the Public Employees Compensated Absences Fund.
CONDUIT DEBT OBLIGATIONS
From time to time, the City has issued Housing Revenue Bonds and Industrial Revenue Bonds or Notes to
provide assistance to qualified private sector entities for the acquisition and construction of housing,
industrial, or commerciat facilities deemed to be in the public interest. The bonds or notes are secured by
the property financed and are payable solely from payments received on the underlying mortgage loans.
The City has no obligation of its assets or of its general tax base for the repayment of any of these bonds or
notes. Accordingly, the bonds or notes are not reported as liabilities in the accompanying financial
statements. Upon final redemption of the bonds or notes, ownership of the property transfers to the private
sector entity served by the bond or note issue.
1 61
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
F. LONG-TERM DEBT
CONDUIT DEBT OBLIGATIONS (Continued)
As of December 31, 2006 there were three series of fixed rate Multifamily Housing Revenue Refunding
bonds outstanding, one Housing Revenue Development Refinancing Note outstanding, one series of
Variable Rate Demand Refunding Industrial Revenue Bonds outstanding, two Healthcare Revenue Notes
outstanding, and four Senior Housing I?evelopment Revenue Notes outstanding. The aggregate amount of
conduit debt obligations at December 31, 2006 is 33,137,709.
G. FUND EQUITY
Net assets reported in the government-wide statement of net assets at December 31, 2Q06 include the
following:
Governmental activities
Invested in capital assets, net of related debt:
Land 3,203,904
Construction in progress 2,765,506
Other capital assets, net of depreciation 30,731,726
Less: related long-term debt outstanding (8,509,930)
Total invested in capital assets, net of related debt 28,191,206
Restricted:
Debt service 6,789,753
Tax increment purposes 20,847,712
Total restricted 27,637,465
Unrestricted 4,055,312
Total governmentaJ activities net assets 59,883,983
Business-type activities
Invested in capital assets, net of related debt:
Land 3,197,342
Construction in progress 1,915,091
Other capital assets, net of depreciation 33,136,063
Less: related long-term debt outstanding
Total invested in capital assets, net of related debt 38,248,496
Unrestricted 7,973,318
Total business-type activities net assets 46,221,814
62
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 4 DETAILED NOTES ON ALL FUNDS
G. FUND EQUITY (Continued)
Governmental fund balances reported on the fund financial statements as of December 31, 2006 include the
following:
Reserved
Major Funds:
GeneraL•
Prepaid items 500
G. O. Improvement Bonds:
Debt service 3,098,227
Nonmajor Funds:
Advances to other funds 792,488
Debt service 1,104,749
Committed contracts 181,344
Total 5,177,308
Unreserved, designated
Major Funds:
GeneraL•
Working capital 7,508,690
Tax Increment District No. 3:
Bonding covenants 8,537,255
Statutory housing obligation 2,979,067
Total Tax Increment District No. 3 11,516,322
Nonmajor Funds
Economic development 1,922
Capital improvements 4,861,857
Total 25,809,371
Unreserved, Undesignated (deficit)
Major Funds:
Special revenue 9,211,349
Nonma�or Funds
Special revenue 212,038
Capital Projects (697,457)
Total 8,725,930
63
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 5 OTHER INFORMATION
A. RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets;
errors and omissions and natural disasters.
Property and casualty insurance is provided thtough the League of iUlinnesota Cities Insurance Trust
{LMCIT), a public entity risk pool cunently operating as a common risk management and insurance
program for Minnesota cities: general liability, property, automobile, mobile property and marine, crime,
employee dishonesty, boiler, and open meeting law. The City pays an annual insurance premium to the
LMCIT for its insurance coverage. The City is subject to supptemental assessments if deemed necessary
by the LMCIT. Currently, the LMCIT is self-sustaining through member premiums and reinsures through
commercial companies for claims in excess of various amounts. The City retains risk for the deductible
portions of the insurance policies. The amount of these deductibles is considered immaterial to the
financial statements.
Workers' compensation coverage is provided through a pooled self-insurance program through the
LMCIT. The City pays an annual premium to the LMCIT. The City is subject to supplemental
assessments if deemed necessary by the LMCIT. The LMCIT reinsures through Workers' Compensation
Reinsurance Association WRCA as re uired b law. For workers' com ensation the Ci is not sub'ect
9 Y
p tY J
to a deductible. The Ci s workers com ensation is retroactivel rated. With this type of coverage, final
h' Y
P
premiums are determined after loss experience is known. The amount of premium adjustment, if any, is
considered immaterial and not recorded until received or paid.
There were no significant reductions in insurance from the previous year or settlements in excess of
insurance coverage for any of the past three years.
B. EMPLOYEE RETIREMENT PLANS
1. DEFINED BENLFIT PENSION PLAN
PLAN DESCRIPTION
A1i futl-time and certain part-time employees of the City are covered by defined benefit plans
administered by the Public Employees Retirement Association of Minnesota (PERA). PERA
administers the Public Employees Retirement Fund (PERF) and the Public Employees Police and Fire
Fund (PEPFF) which are cost sharing, multiple employer retirement plans. These plans are
established and administered in accordance with Minnesota Statute, Chapters 353 and 356.
PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members
are covered by Social Security and Basic Plan members are not. All new members must participate in
the Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership
by statute are covered by the PEPFF.
PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors
upon death of eligible members. Benefits are established by State Statute, and vest after three years of
credited service. The defined retirement benefits are based on a member's highest average salary for
any five successive years of allowable service, age, and years of credit at termination of service.
64
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATENIENTS
December 31, 2006
Note 5 OTHER INFORMATION
B. EMPLOYEE RETIREMENT PLANS
1 1. DEFINED BENEFIT PENSION PLAN
PLAN DESCRIPTION (Continued)
The benefit provisions stated in the previous paragraphs of this section are current provisions and
apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not
receiving them yet are bound by the provisions in effect at the time they last terminated their public
service.
PERA issues a public(y available financial report that includes financial statements and required
supplementary information for PERF and PEPFF. That report may be obtained by writing to PERA,
60 Empire Drive Suite 200, St. Paul, Minnesota, 55103-2088 or by calling 651-296-7460 or 800-652-
9026.
FUNDING POLICY
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These
statutes are established and amerided by the state legislature. The City makes annual contributions to
the pension plans equal to the amount required by state statutes. PERF Basic Plan members and
Coordinated Plan members are required to contribute 9.10% and 5.50%, respectively, of their annual
covered salary. PEPFF members are required to contribute 7.10% of their annual covered salary. The
City is required to contribute the following percentages of annual covered payrolL• 11.78% for Basic
Ptan PERF members, 6.00% for Coordinated Plan PERF me�pbers, and 10.50% for PEPFF members.
The Ciry's contributions to the Public Employees Retirement Fund for the years ending December 31,
2006, 2005, and 2004 were 363,334, 326,886, and 327,384, respectively. The City's
contributions to the Public Employees Police and Fire Fund for the years ending December 31, 2006,
2005, and 2004 were 318,913, 274,868, and 289,468, respectively. The City's contributions
were equal to the contractually required contributions for each year as set by state statute.
2. PENSION PLAN BROOKLYN CENTER FIRE DEPARTMENT RELIEF
ASSOCIATION
PLAN DESCRIPTION
The City contributes to the Brooklyn Center Fire Department Relief Association (the Association)
which is the administrator of a single employer retirement system to provide a retirement plan (the
Pian) to volunteer firefighters of the City who are members of the Association. The Association issues
a financial report which is available at City offices.
FLINDING POLICY AND ANNiJAL PENSION COST
The City levies property ta�ces at the direction of and for the benefit of the Plan and passes through
state aids allocated to the Plan, all in accordance with enabling State statutes. The minimum tax levy
obligation is the financial contribution requirement for the year less anticipated state aids.
65
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 5 OTHER INFORMATION
B. EMPLOYEE RETIREMENT PLANS
2. PENSION PLAN BROOKLYN CENTER FIRE DEPARTMENT RELIEF
ASSOCIATION (Continued)
CONTRIBUTIONS
Total contributions to the plan in 2005 were 154,346, of which nothing was levied by the City of
Brooktyn Center and all 154,346 was from the State of Minnesota. The actuarially determined
contribution based on an actuarial valuation performed at January l, 2005 was 70,409, which
re resents fundin for normal cost of 70 409 and administration of zero. Actual contributions have
g
P
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 1/1/2005
Actuarial cost method Entry age nom�al cost method
Amortization method I.evel�dollar ari�ount aniortiz:ed
on a closed basis
Remaining amortization period 18 years
Actuarial assumptions:
Invesmlent rate of rehun 5.0% compounded annually
Discount rate for obligations 5.00%
Projected salary increases Not applicable
Post retirement benefits None
Inflation rate Not applicable
THREE YEAR TREND INFORMATION I
Three Year Trend Information
Annual Percentage Net
Year Pension of APC Pension
Ending Cost (APC) Contributed Obli�ation
17I31/2003 124,123 100%
1?J31/2004 158,991 100%
12/31/2005 154,346 100%
66
CITY OF BROOKLYN CEIYTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 5 OTHER INFORMATION
B. EMPLOYEE RETIREMENT PLANS
2. PENSION PLAN BROOKLYN CENTER FIRE DEPARTMENT RELIEF
ASSOCIATION (Continued)
SCHEDULE OF FUNDING PROGRESS
Assets in
Excess of
Actuarial Actuarial Actuarial (Unfwided)
Valuation Value of Accnted Accrued Funded
Date Assets Liability Liability Ratio
12J31/2003 3,092,905 2,372,802 720,103 13030%
12J31/2004 3,384,104 2,844,285 539,819 119.00%
12J31/2005 3,701,259 3,176,225 525,034 116.50%
C. ARBITRAGE REBATE
The Tax Reform Act of 1986 requires governmental entities to pay to the federal government income
earned on the proceeds from the issuance of debt in excess of interest costs, pending the expenditure of the
borrowed funds. This rebate of interest income (known as arbitrage) applies to governmental debt issued
after August 31, 1986.
The City issued greater than $5 million of bonds in the years 1997 and 2004 and therefore is required to
rebate excess investment income relating to these issues to the federal government. The extent of the
City's liability for arbitrage rebates on the remaining bond issues is not determinable at this time.
However, in the opinion of management, any such liability would be immaterial.
D. LITIGATION
The City is subject to certain legal claims in the normal course of business. Management does not expect
the resolution of these claims will have a material impact on the City's financial condition or results of
operations.
E. CONTINGENT LIABILITIES
Tax Increment Notes
In May 2002, the City entered into two limited ta�c increment notes with developers whereby the City will
pay the developers a percentage of the available tax increment. Whether payments will occur and the
amount of the payments is unpredictable since all payments are dependent on the City receiving tax
increment revenues from the developer's project. As such, this liability has not been recorded in the
financial statements. Any potential liability ends with the decertification of the tax increment district.
67
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 5 OTHER INFORMATION
E. CONTINGENT LIABILITIES (Continued)
A schedule of the notes outstanding at December 31, 2006 is as follows:
Amended
Original 12/31/2006 Interest Maturity
Note Principal Balance Rate Date
Twin Lakes Business Park 2,424,199 2,220,888 8.00% 1/31/2021
Sanitarv Sewer Charees
The Environmental Services Division of the Metropolitan Council (MCES) has determined that
contaminated groundwater pumped from a redevelopment project area into the sanitary sewer system was
not correctly included in its calcutations of non-metered flows from the City into the larger MCES sanitary
sewer c�llection system. While the accounting discrepancy goes back to 1989, a six year limitation is
imposed by state statutes on the amount that may be retroactively collected. The minimum estimated value
of the liability to the City is 580,465 and is recorded in the Sanitary Sewer Utility Fund. T'he maximum
liability to the City would be 653,867. The City expects this issue to be resolved in 2007.
F. POST-EMPLOYMENT HEALTH CARE BENEFITS
The City has provided post-employee health care benefits, as per the requirements of the City Councii
resolution, for certain retirees and their dependents since 1986. Full time employees have the option of
retaining membership in the City's health insurance plan for which the City will pay the single person
premium untit 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 fatnily coverage shalt be paid by
the retiree to the City. There are two methods whereby an employee can qualify under this program. First,
the employee, on the date of his/her retirement, must meet eligibility requirements for a full retirement
annuity under PERA without reduction of benefits because of age, disability, or any other reason for
reduction. In addition, the employee must have been employed full time by the Gity for the last ten
consecutive years prior to the effective date of retirement. Additionally, employees who are retiring after
twenty-five years of consecutive service with the City and are eligible to receive a pension from PERA
shall have the option of retaining membership in the City's health insurance plan for which the employee
will pay the premium until such time as the retiree is eligible to receive a-fuli-retirement annuity under
PERA or PEPFF. At that time, the City will pay the single-person premium until such time as the retiree is
eligibte for Medicare coverage or at age 65, whichever is sooner. Employees participate in this program on
a voluntary basis.
As of December 31, 2006, 13 employees currently participate in this program. The cost of City paid health
care premiums for the years ended December 31, 2006 and 2005 was 75,713 and 60,467, respectively.
Fund liabilities are paid on a pay-as-you-go basis with investment earnings of the Fund. The 2,553,336
recorded as a liability is not an actuarially determined amount, but the City's best estimate of the future
liability.
r
68
CITY OF BROOKLYN CENTER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Note 5 OTHER INFORMATION (Continued)
G. JOINT VENTURES AND JOINTLY GOVERNED ORGANIZATIONS
The City has several agreements with other entities that provide reduced costs, better service, and
additional benefits to the participants. The programs in which the City participates are listed below and
amounts recorded within the current year's financial statements are disclosed.
Local Government Information Svstems Association (LOG[S)
This consortium of approximately 30 government entities provides computerized data processing and
support services to its members. LOGIS is legally separate; the City does not appoint a voting majority of
its board, and the Consortium is fiscally independent of the City: The total amount recorded within the
2006 financial statements of the City is 332,134 for general services and application upgrades provided.
Costs were allocated to the various funds based on applications and/or use of services. Complete financial
statements for LOGIS may be obtained at the LOGIS offices located at 5750 Duluth Street, Golden Valley,
Minnesota 55422.
LOGIS Insurance Groun
This group provides cooperative purchasing of health and life insurance benefits for approximately 45
governmental entities. The total of 2006 health and life insurance costs paid by the City was 1,065,662.
Complete financial statements may be obtained from Stanton Group located at 3405 Annapolis Lane,
Plymouth, Minnesota 55447.
The Brooklvn Center Fire Denartment Relief Association (the Associationl
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 fisca(ly independent of the City, the financial information of the Association
has not been included within the City's financial statements. (See Note S.B.2. for disclosures relating to
the pension plan operated by the Association.) The City's portion of the costs of the Association's pension
benefits is included in the General Fund under public safety. Complete financial statements for the
Association may be obtained at the City offices located at 6301 Shingle Creek Parkway, Brooklyn Center,
Minnesota 55430.
H. SUBSEQUENT EVENT
In March 2007, the City of Brooklyn Center Economic Development Authority purchased the property at
1501 Freeway Boulevard for redevelopment for the purchase price of 3,804,306. This property will be
recorded in the Tax Increment District No. 3 fund as Assets Held for Resale at cost, not to exceed net
realizable value, until the property is sold.
69
This page has been left blank intentionally.
�o
CITY OF BROOKLYN CENTER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDiJLE GENERAL FUND Page 1 of 6
For the Year Ended December 31, 2006
Variance with
Final Budget
Budgeted Amount$ Actual Positive
Original Final Amounts (Negative)
Revenues:
Taxes:
Property taxes and market value homestead credit 10,179,301 10,179,301 10,400,037 220,736
Penalties and interest 18,826 18,826
Lodging ta�c 650,000 650,000 738,776 88,776
Total taxes 10,829,301 10,829,301 11,157,639 328,338
Licenses and permits:
Liquor and beer 109,300 109,300 86,638 (22,662)
Building permits 300,000 300,000 329,606 29,606
Mechanical permits 60,000 60,000 54,945 (5,055)
Sewer and water permits 1,000 1,000 2,021 1,021
Plumbing permits 35,000 35,000 25,395 (9,605)
Garbage licenses 3,100 3,100 2,945 (155)
Taxicab licenses 1,500 1,500 (1,500)
Mechanicallicenses 4,200 4,200 5,940 1,740
Service station licenses 2,600 2,600 3,029 429
Vehicle dealer licenses 1,500 1,500 1,750 250
Bowling licenses 720 720 1,440 720
Cigarette licenses 4,000 4,000 3,428 (572)
Sign permits 2,500 2,500 2,508 8
Rental dwelling licenses 125,434 125,434 149,474 24,040
Amusement licenses 1,500 1,500 1,210 (290)
Electrical Permits 25,000 25,000 34,388 9,388
ROW permits 13,603 13,603
Miscellaneous licenses and permits 6,400 6,400 4,313 (2,087)
Total licenses and permits 683,754 683,754 722,633 38,879
Intergovernmental:
Federal:
Other federal grants 3,623 3,623
State:
Local government aid 667,665 667,665 667,665
Police pension aid 255,000 255,000 272,377 17,377
PERA aid 34,365 34,365 34,365
1 Fireperson pension aid 125,000 125,000 161,019 36,019
Police training 15,194 15,194
E-911 phone service 20,000 20,000 24,637 4,637
Street maintenance aid 90,000 90,000 (90,000)
Miscellaneous grants 53,000 53,000 90,125 37,125
Total intergovernmental 1,245,030 1,245,030 1,269,005 23,975
Charges for services:
General government charges 29,440 29,440 40,950 11,510
Public safety charges 13,500 13,500 20,219 6,719
Recreation fees 288,563 28$,563 310,377 21,814
Community Center fees 323,250 323,250 312,422 (10,828)
Total charges for services 654,753 654,753 683,968 29,215
I
71
CITY OF BROOKLYN CENTER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDiJLE GENERAL FiJND Page 2 of 6
For the Year Ended December 31, 2006
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues (continued):
Fines and forfeits 220,000 220,000 256,600 36,600
Miscellaneous:
Investment earnings (net of market value change) 130,000 130,000 239,470 109,470
Other 79,000 79,000 85,767 6,767
Total miscellaneous 209,000 209,000 325,237 116,237
Totalrevenues 13,841,838 13,841,838 14,415,082 573,244
Bxpenditures: S
General government:
Mayor and counciL•
Current:
Personal services 49,685 49,685 46,866 2,819
Materials and supplies 100 100 378 (278)
Servicesand othercharges 82,450 82,450 91,141 (8,691)
Total mayor and council 132,235 132,235 138,385 (6,150)
Administrative (Manager, Clerk, HR) offices:
Current:
Personal services 483,130 483,130 420,472 62,658
Materials and supplies 5,200 5,200 3,956 1,244
Services and other charges 28,760 28,760 24,543 4,217
Total administrative office 517,090 517,090 448,971 68,ll9
Elections and voter registration:
Current:
Personal services 57,809 57,809 54,992 2,817
Materials and supplies 1,000 1,000 846 154
Services and other charges 36,450 36,450 25,334 11,116
Total elections and voter registration 95,259 95,259 $1,172 14,087
Assessor's office:
Current:
Personal services 238,496 238,496 231,076 7,420
Materials and supplies 3,600 3,600 3,884 (284)
Services and other charges 41,323 41,323 39,481 1,842
Total assessor's office 283,419 283,419 274,441 8,978
Finance:
Current:
Personal services 399,634 399,634 436,940 (37,306)
Materials and supplies 2,500 2,SOQ 2,094 406
Services and other charges I 3,110 13,110 4,932 8,178
Total finance 415,244 415,244 443,966 (28,722)
72
CITY OF BROOKLYN CEPITER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDIJLE GENERAL FtJND Page 3 of 6
For the Year Ended December 31, 2006
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Expenditures:
General government (continued):
Legal:
Current:
Services and other charges 290,000 290,000 321,332 (31,332)
Government buildings:
Current:
Personal services 255,389 255,389 262,935 (7,546)
Materials and supplies 51,700 51,700 62,455 (10,755)
Services and other charges 295,606 295,606 377,832 (82,226)
Total current 602,695 602,695 703,222 (100,527)
Capital outlay 11,250 11,250 9,680 1,570
Total government buildings 613,945 613,945 712,902 (98,957)
Information technology:
Current:
Personal services 176,456 176,456 178,605 (2,149)
Materials and supplies 10,500 10,500 9,131 1,369
Services and other charges 152,867 152,867 137,988 14,879
Total information technology 339,823 339,823 325,724 14,099
Total general government 2,687,015 2,687,01 S 2,746,893 (59,878)
Public safety:
Police protection:
Current:
Personal services 4,814,698 4,814,698 4,644,058 170,640
Materials and supplies 106,002 106,002 116,289 (10,287)
Services and other charges 898,722 898,722 994,745 (96,023)
Total current 5,819,422 5,819,422 5,755,092 64,330
Capital outlay 10,200 10,200 18,707 (8,507)
Total police protection 5,829,622 5,829,622 5,773,799 55,823
Fire protection:
Current:
Personal services 483,965 483,965 533,361 (49,396)
Materials and supplies 61,000 61,000 56,831 4,169
Services and other charges 211,897 211,897 269,385 (57,488)
Total fire protection 756,862 756,862 859,577 (102,715)
I
73
CITY OF BROOKLYN CENTER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDLJI,E GENERAL FLJND Page 4 ofb
For the Year Ended December 31, 2006
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Expenditures:
Public safety (continued):
Protective inspection:
Cunent:
Personal services 424,181 424,181 401,977 22,204
Materials and supplies 8,700 8,700 6,914 1,786
Services and other charges 72,759 72,759 79,154 (6,395)
Total protective inspection 505,640 505,640 488,045 17,595
Emergency preparedness:
Current:
Personal services 54,252 54,252 46,380 7,872
Materials and supplies 2,400 2,400 2,010 390
Services and other charges 7,415 7,415 7,008 407
Total emergency preparedness 64,067 64,067 55,398 8,669
Total public safety 7,156,191 7,156,191 7,176,819 (20,628)
Pubtic works:
Engineering department:
Current:
Persona( services 465,263 465,263 374,834 90,429
Materials and supplies 6,070 6,070 4,106 1,964
Services and other charges 42,730 42,730 35,610 7,120
Total current 514,063 514,063 414,550 99,513
Capital outlay 5,200 5,200 84 5,116
Total engineering department 519,263 519,263 414,634 104,629
Street department:
Current:
Personal services 702,035 702,035 651,800 50,235
Materials and supplies 121,550 121,550 106,659 14,891
Services and other charges 486,245 486,245 523,548 (37,303)
Total current 1,309,830 1,309,830 1,282,007 27,823
Capital outlay 13,000 13,000 13,000
Total street department 1,322,830 1,322,830 1,295,007 27,823
Total pubiic works 1,842,093 1,842,093 1,709,641 132,452
Community services:
Social services:
Current:
Services and other charges 83,525 83,525 123,172 (39,647)
74
CITY OF BROOKLYN CENTER, MINNESOTA
REQUIRED SUPPLEIviENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDULE GENERAL FUND Page 5 of 6
For the Year Ended December 31, 2006
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Expenditures (continued):
Parks and recreation:
Administration:
Current:
Personal services 473,946 473,946 486,413 (12,467)
Materials and supplies 10,900 10,900 9,701 1,199
Services and other charges 55,140 55,140 52,928 2,212
Total current 539,986 539,986 549,042 (9,056)
Capital outlay 1,200 1,200 1,200
Total administration 541,186 541,186 549,042 (7,856)
Adult programs:
Current:
Personal services 53,541 53,541 51,054 2,487
Materials and supplies 11,800 11,800 17,599 (5,799)
Cost of good sold to public 19,425 19,425 14,903 4,522
Services and othercharges 90,055 90,055 127,494 (37,439)
Totat adult programs 174,821 174,821 211,050 (36,229)
Teen programs:
Current:
Personal services 2,285 2,285 4,324 (2,039)
Materials and supplies 500 500 590 (90)
Tota! teen programs 2,785 2,785 4,914 (2,129)
Youth programs:
Current:
Personal services 39,897 39,897 35,865 4,032
Materials and supplies 9,503 9,503 9,273 230
Services and other charges 100 100 100
Total youth programs 49,500 49,500 45,138 4,362
General programs:
Current:
Personal services 5,701 5,701 4,375 1,326
Materials and supplies 100 100 65 35
Services and other charges 8,100 8,100 12,160 (4,060)
Total general programs 13,901 13,901 16,600 (2,699)
Community center:
Current:
Personal services 405,376 405,376 386,197 19,179
Materials and supplies 18,500 18,500 17,936 564
Services and other charges 58,000 58,000 75,142 (17,142)
Total current 481,876 481,876 479,275 2,601
Capital outlay 7,000 7,000 6,414 5$6
Total community center 488,876 488,876 485,6$9 3,187
I
I
75
I
CITY OF BROOKLYN CENTER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDULE GENERAL FUND Page 6 of 6
For the Year Ended December 31, 2006
Variance with
I I Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Ex enditures
p
Parks and recreation (continued):
Park maintenance:
i Current:
Personal services 503 010 503 O10 490 127 12,883
Materials and suppiies 54,475 54,475 40,651 13,824
Services and other charges 267,830 267,830 339,889 (72,059)
Total current 825,315 825,315 870,667 (45,352)
Capital outlay 6,600 6,600 5,694 906
Totai ark maintenance 831,915 831,915 876,361 (44,446)
P
Total parks anc! recreation 2,102,984 2,102,984 2,18&,794 (85,810)
Economic development:
Convention bureau:
Current:
Servicesand othercharges 308,750 308,750 350,919 (42,169)
NondepartmentaL•
Expenditures not charged to departments:
Current`.
Personal services 57,809 57,809 53,730 4,079
Materials and supplies 21,850 21,850 23,002 (1,152)
Services and other charges 341,986 341,986 287,235 54,751
Total nondepartmental 421,645 421,645 363,967 57,678
I Total expenditures 14,602,203 14,602,203 14,660,205 (58,002)
Revenues over(under)expenditures (760,365) (760,365) (245,123) 515,242
Other financing sources (uses):
Transfers in administrative services reimbursed 830,365 830,365 529,362 (301,003)
Transfers to other funds (70,000) (70,000) (70,000)
Total other financing sources (uses) 760,365 760,365 459,362 (301,003)
Net increase (decrease) in fund balance 214,239 214,239
Fund balance January 1 7,294,951
Fund balance December 31 7,509,190
i 76
CITY OF BROOKLYN CENTER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE TAX INCREMENT DISTRICT NO. 3
For the Year Ended December 31, 2006
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
Revenues:
Tax increments 3,484,000 3,484,000 1,609,994 $(1,874,006)
Intergovernmental revenue 39,784 39,784
Investment earnings (net of market value adjustment) 881,312 881,312
Total revenues 3,484,000 3,484,000 2,531,090 (952,910)
Expenditures:
Current:
Economic development:
Personal services 43,331 (43,331)
Supplies 433 (433)
Services and other charges 682,810 (682,810)
Capital outlay:
Economic development 2,913,979 (2,913,9'79)
Total expenditures 3,640,553 (3,640,553)
Revenues over (under) expenditures 3,484,000 3,484,000 (1,109,463) (4,593,463)
Other financing sources (uses):
Transfers out (1,887,080) (1,887,080) (1,887,$04) (724)
Total other financing sources (uses) (1,887,080) (1,887 (1,887,804) (724)
Net increase in fund balance 1,596,920 1,596,920 (2,997,267) $(4,594,187)
Fund balance January 1, as previously stated. 23,664,938
Prior period adjustment 60,000
Fund balance January 1, restated 23,724,938
Fund balance December 31 20,727,671
77
a
This a e has been /ett blank intentionall
P9 Y
78
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
A Special Revenue Fund is used to account for the proceeds of specific revenue sources
that are legally restricted to expenditures for specified purposes.
DEBT SERVICE FUNDS
The Debt Service Funds are used to account for the accumulation of resources for, and
payment of, interest, principal and related costs on general long-term debt.
CAPITAL PROJECT FUNDS
The Capital Project Funds account for financial resources to be used for the acquisition or
construction of major capital facilities (other than those financed by Proprietary Funds).
1
?9
CITY OF BROOKLYN CENTER, MINNESOTA
COMBINING BALANCE SHEET Statement 11
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2006
Total
Special Debt Capital Nonmajor
Revenue Service Project Governmental
Assets
Cash and investments 2,529,749 1,097,603 4,474,125 8,101,477
Receivables:
Accounts 180,866 180,866
Current taxes 1,984 7,146 9,130
Delinquent taxes 14,966 33,034 48,000
Special assessments 142,220 142,220
Due from other governments 24,064 56,056 80,120
"interfund receivable 262,206 262,206
Advances to other funds 792,488 792,488
Assets held for resale 37,000 37,000
Total assets 2,607,763 1,137,783 5,907,961 9,653,507
Liabilities and Fund Balances
Liabilities:
Accounts payable 379 109,437 109,816
Accrued salaries and wages 5,178 2,299 7,477
Due to other funds 410,000 410,000
Interfund payable 262,206 262,206
Due to other governments 4,500 4,500
Contracts payable 224,913 224,913
Deferred revenue 53,166 33,034 170,874 257,074
Totalliabilities 473,223 33,034 769,729 1,275,986
Fund balances:
Reserved 1,104,749 973,832 2,078,581
Unreserved:
Designated 1,922,502 4,861,857 6,784,359
Undesignated 212,038 (697,457) (485,419)
Total fund balances 2,134,540 1,104,749 5,138,232 8,377,521
Total liabilities and fund balances 2,607,763 1,137,783 5,907,961 9,653,507
80
CITY OF BROOKLYN CENTER, MINNESOTA
COMBIMNG STATEMENT OF REVENUES, EXPENDITURES, AND Statement 12
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2006
Total
Special Debt Capital Nonmajor
Revenue Service Pro.ject Govemmental
Revenues:
Property taxes 254,801 739,502 994,303
Tax increments 1,054,150 1,054,150
Franchise fees 658,410 658,410
Special assessments 290,484 290,484
Intergovernmental 142,128 300,900 623,880 1,066,908
Charges for services 11,562 26,688 38,250
Investment earnings (net of market value adjustment) 117,491 28,869 227,739 374,099
Miscellaneous 167,479 224,050 391,529
Total revenues 1,747,611 1,069,271 2,051,251 4,868,133
Expenditures:
Current:
General government 101,937 101,937
Public safety 141,730 141,730
Public works 120,563 120,563
Parks and recreation 35,456 35,456
Economic development 309,065 309,065
Capital outlay:
General government 40,903 40,903
Public safety 3,003 3,003
Public works 2,907,008 2,907,008
Debt service:
Principal retirement 252,146 1,875,000 2,127,146
Interest 1,030,108 1,030,108
Fiscal agent fees 1,448 1,448
Bond issuance costs 30,491 30,491
Total expenditures 741,400 2,906,556 3,200,902 6,848,858
Revenues over (under) expenditures 1,006,211 (1,837,285) (1,149,651) (1,980,725)
i Othec financing sources (uses):
Bond proceeds 1,420,390 1,420,390
Discounton bond proceeds (445) (445)
Transfers in• 253,405 1,887,804 642,907 2,784,116
Transfers out (253,405) (253,405)
Totai other financing sources (uses) 1,887,804 2,062,852 3,950,656
Net increase (decrease) in fund balances 1,006,211 50,519 913,201 1,969,931
Fund balances January 1 1,128,329 1,054,230 4,225,031 6,407,590
Fund balances December 31 2,134,540 1,104,749 5,138,232 8,377,521
81
This a e has been /eft blank intentionally.
P9
s2
NONMAJOR SPECIAL REVENUE FUNDS
The City of Brooklyn Center had the following Special Revenue Funds during the year.
Housin� and Redevelonment Authoritv Fund (HR.AI This fund has authority to levy an
ad valorem property tax f.or the purpose of conducting housing and redevelopment
projects. These pro�ects are accounted for in the EDA Fund; all tax proceeds are
transferred to that fund.
Economic Develonment Authoritv Fund (EDAI This fund was established to account
for the Economic Development Authority (EDA) of Brooklyn Center. The EDA canies
out development activities; it has authority to operate an enterprise. The Earle Brown
Heritage Center operates under this authority, as well as the tax increment financing
activities. The EDA also does redevelopment and housing projects, funded by an ad
valorem property tax levy and transfers from the CDBG and HRA funds.
Earle Brown Tax Increment District This fund has the authority to collect tax
increments which are used for the historic restoration of the Earle Brown Farm and for
debt service payments on bonds which were issued for the same purpose.
Tax Increment District No. 4 Fund This fund has the authority to collect tax increments
which are used for various redevelopment projects, within the City and for debt service
payments of bonds which were issued for the same purpose.
Police Drue Forfeiture Fund This fund was established to account for ro e and/ar
P P rtY
cash seized by Police Department personnel.
Communitv Develonment Block Grant Fund (CDBG) This fund was established to
account for funds received under Title I of the Housing and Community Development
Act of 1974.
Citv Initiatives Grant Fund Revenues and expenditures from grants received from
outside entities are accounted for in this fund. Programs include several federal, state,
and local public safety grants, and state and local recreation grants.
i
83
CITY OF BROOKLYN CENTER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMA70R SPECIAL REVENLTE FUNDS
December 31, 2006
r
Housing and Economic Earle Brown
Redevelopment Development Tax Increment
Authority Authority District
Assets
Cash and investments 1,824,739 415,487
Current ta�ces receivable 1,984
Delinquent taxes receivable 13,248 1,718
Due from other governments
Asset held for resale 37,000
Total assets 15,232 1,861,739 417,205
Liabilities and Fund Balances
Liabilities:
Accounts payable 189
Accrued salaries and wages 2,723 194
Due to other funds 60,000 350,000
Due to other governments
Deferred revenue 13,248 37,000 1,718
Total liabi(ities 13,248 99,912 351,912
Fund balances:
Unreserved:
Designated:
Econornic development 1,761,827 65,293
Undesignated 1,984
Total fund baiances 1,984 1,761,827 b5,293
Total liabilities and fund balances 15,232 1,861,739 417,205
84
Statement 13
Total
Tax Potice Community City Nonmajor
Increment Drug Development Initiatives Special
District No. 4 Forfeiture Block Grant Grant Revenue
95,382 48,909 4,301 140,731 2,529,749
1,984
14,966
24,064 24,064
37,000
95,3 82 48,909 4,501 164,795 2,607,763
190 379
2,261 5,178
410,000
4,500 4,500
1,200 53,166
4,500 3,65 i 473,223
95,382 1,922,502
48,909 1 161,144 212,038
95,3 82 48,909 1 161,144 2,134,540
95,382 48,909 4,501 164,795 2,607,763
SS
CITY OF BROOKLYN CENTER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND $ALANCES
I NONMAJOR SPECIAL REVENUE FUNDS
For the Year Ended December 31 2006
Housing and Economic Earie Brown
Redevelopment Devetopment Tax Increment
Authority Authority District
Revenues:
Property taxes 254,801
Tax increments 810,861
Intergovernmental 5,842
Charges for services
Investment earnings (net of market
value adjustment) 76,041 32,522
Miscellaneous 116,947
Total revenues 254,801 198,830 843,383
Expenditures:
Current:
Public safety:
Persona) services
Supplies
Services and other charges
Total public safety
Parks and recreation:
Personal services
Supplies
Services and other charges
Total parks and recreation
Economic development:
Personal services 142,022 6,332
Supplies 79
Services and other charges 145,581 2,856
Total economic development 28?,682 9,188
Capital outlay:
Pubiic safety
Debt service:
Principal
Total expenditures 287,682 9,I88
Revenues over (under) expenditures 254,801 (88,852) 834,195
Other financing sources (uses):
Transfers in 253,405
I I Transfers out (253,405)
Total other financing sources (uses) (253,405) 253,405
'I
Net increase in fund 6alances 1,396 164,553 834,195
Fund balances January 1 588 1,597,274 (768,902)
Fund balances December 31 1,984 1,761,827 65,293
I 86
Statement 14
r
Total
Tax Police Community City Nonmajor
Increment Drug Development Initiatives Special
District No. 4 Forfeiture Block Grant Grant Revenue
254,801
243,289 1,054,150
11,340 124,946 142,128
11,562 11,562
621 1,879 6,428 117,491
29,154 21,378 167,479
243,910 31,033 11,340 164,314 1,747,6ll
115,983 115,983
4,812 1,610 6,422
12,714 6,6ll 19,325
17,526 124,204 141,730
831 831
7,962 7,962
26,663 26,663
35,456 35,456
150 148,504
79
705 11,340 160,482
855 11,340 309,065
3,003 3,003
252,146 252,146
253,001 20,529 11,340 159,660 741,400
(9,091) 10,504 4,654 1,006,211
253,405
(253,405)
(9,091) 10,504 4,654 1,006,211
104,473 38,405 1 156,490 1,128,329
95,382 48,909 1 161,144 2,134,540
a 87
CITY OF BROOKLYN CENTER, MINNESOTA
SPECIAL REVENIJE FiJND HOUSING AND REDEVELOPMENT AUTHORITY Statement 15
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE BUDGET AND ACTUAL
For the Year Ended December 31, 2006
Budgeted Amounts Actual
Original Final Amounts
Revenues:
Property taaces 257,065 257,065 254,801
Revenues over (under) expenditures 257,065 257,065 254,801
Other financing sources (uses):
Transfers out (257,065) (257,065) (253,405)
Net increase in fund balance 1,396
Fund balance January 1 588
Fund balance December 31 1,984
a
88
CITY OF BROOKLYN CENTER, MINNESOTA
SPECIAL REVENiIE FLJND ECONOMIC DEVELOPMENT AUTHORITY Statement 16
SCI-IEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE BUDGET AND ACTUAL
For the Year Ended December 31, 2006
Budgeted Amounts Actual
Original Final Amounts
Revenues:
Intergovernmental 5,842
Investment earnings (net of market value adjustment) 76,041
Miscellaneous 116,947
Total revenues 198,830
Expenditures:
Current:
Economic development:
Personal services 193,627 193,627 142,022
Supplies 1,600 1,600 79
Services and other charges 66,092 66,092 t45,581
Total expenditures 261,319 261,319 287,682
Revenues over (under) expenditures (261,319) (261,319) (88,852)
Other financing sources (uses):
Transfers in 257,065 257,065 253,405
Net increase (decrease) in fund balance (4,254) (4,254) 164,553
Fund balance January 1 1,597,274
Fund balance December 31 1,761,827
t
89
CITY OF BROOIfLYN CENTER, MINNESOTA
SPECIAL REVENiJE FUND EARLE BROWN TAX INCREMENT DISTRICT Statement 17
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE BUDGET AND ACTUAL
For the Year Ended December 31, 2006
Bud�eted Amounts Actual
Original Final Amounts
Revenues:
Ta�c inc�ements 696,200 696,200 810,861
Investment earnings (net of market value adjustment) 32,522
Total revenue 696,200 696,200 843,383
Expenditures:
Current:
Economic development:
Personal services 6,332
Services and other charges 2,856
Capital outlay:
Economic development 696,200 696,200
Total expenditures 696,200 696,200 9,188
Net increase (decrease) in fund balance 834,195
1 nce J u 1 768 902)
Fund ba a an ary
Fund balance December 31 65,293
90
CiTY OF BROOKLYN CENTER, MINN�SOTA
SPECIAL REVENL7E FUND TAX INCREMENT DISTRICT NO. 4 Statement 18
SCI�DULE OF REVENUES, EXPEIVDITURES, AND
CHANGES IN FUND BALANCE BUDGET AND ACTUAL
For the Year Ended December 31, 2006
Budgeted Amounts Actual
Original Final Amounts
Revenues:
Tax increments 258,600 258,600 243,289
Investment earnings (net of market value adjustment) 621
Total revenues 258,600 258,600 243,910
Expenditures:
Current:
Economic development:
Personal services 150
Services and other charges 705
Total economic development 855
Debt service:
Principal 252,146
Totalexpenditures 253,001
Revenues over (under) expenditures 258,600 258,600 (9,091)
Fund balance January i 104,473
Fund balance December 31 95,382
91
CITY OF BROOKLYN CENTER, MINNESOTA
SPECIAL REVENUE FUND POLICE DRUG FORFEITURE Statement 19
SCHEDULE OF REUEN UES EXPENDITURES AND I
CHANGES IN FUND BALANCE BUDGET AND ACTUAL
0
For the Year Ended December 31 20 6
Budgeted Amounts Actual
Original Final Amounts
Revenues:
Investment earnings (net of market value adjustment) 1,000 1,000 1,879
Miscellaneous:
Forfeited drug money 27,000 27,000 29,154
Total revenues 28,000 28,000 31,033
Expenditures:
Current:
Public safery:
Supplies 7,000 7,000 4,812
Services and other charges 6,000 6,000 12,714
Total public safery 13,000 13,000 17,526
Capital outlay:
Public safety 15,000 15,000 3,003
Total expenditures 28,000 28,OOU 20,529
Revenues over (under) expenditures 10,504
Fund balance January 1 38,405
Fund balance December 31 48,909
I
I 92
CITY OF BROOKLYN CENTER, MINNESOTA
SPECIAL REVENiJE FUND COMMLTNITY DEVELOPMENT BLOCK GRANT Statement 20
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE BUDGET AND ACTUAL
For the Year Ended December 31, 2006
Budgeted Amounts Actual
Original Final Amounts
Revenues:
Intergovernmental:
Federal grants 199,764 199,764 11,340
Expenditures:
Current:
Economic development
Services and other charges 199,764 199,764 11,340
Revenues over (under) expenditures
Fund balance January 1 1
Fund balance December 31 1
r
93
CITY OF BROOKLYN CENTER, MINNESOTA
SPECIAL REVENUE FtJND CITY INIT'IATIVES GRANT Statement 21
SCHEDUI.;E OF REVENLTES, EXPENDITURES, AND
CHANGES IN FUND BALANCE BUUGET AND ACTUAL
For the Year Ended December 31, 2006
Budgeted Amounts Actual
Original Fina! Amounts
Revenues:
Intergovernmental 124,946
Charges for services 10,143 10,143 11,562
Investment earnings (net of market value adjustment) 6,428
Miscellaneous 39,166 39,166 21,378
Total revenues 49,309 49,309 164,314
Expenditures:
Current:
Public safety:
Personal services 115,983
Supplies 1,610
Services and other charges 6,611
Total public safety 124,204
Parks and recreation:
Personal services 8,406 8,406 831
Supplies 8,140 8,140 7,962
Services and other charges 32,568 32,568 26,663
Total parks and recreation 49,114 49,114 35,456
Total expenditures 49,114 49,114 159,660
Net increase (decrease) in fund balance 195 195 4,654
Fund balance January 1 156,490
Fund balance December 31 161,144
94
NONMAJOR DEBT SERVICE FUNDS
The City's Debt Service Funds account for the following types of bonded indebtedness:
General Obli�ation Bonds Fund This fund is used to account for the accumulation of
r resources for payment of general obligation bonds and interest thereon.
Tax Increment Bonds Fund This fund is used to account for the payment of tax
increment general obligation bonds and interest thereon. These bonds were sold to
finance the purchase and redevelopment of vartous redevelopment pro�ects within the
City. Financing for this debt is transferred from the Tax Increment District No. 3 Fund as
needed.
i
t
95
CITY OF BROOKLYN CENTER, MINNESOTA
SUBCOMBINING BALANCE SHEET Statement 22
NONMAJOR DEBT SERVICE FUNDS
December 31, 2006
General
Obligation
Bonds
Assets
Cash and investments 1,097
Current taxes receivable 7,146
Delinquent taxes receivable 33,034
Total assets 1,137,783
Liabilities and Fund Balance
Liabilities:
Deferred revenue 33,034
Fund balance: j'
Reserved:
Debt service 1,104,749
Total liabilities and fund balance 1,137,783
i
1
1
96
CITY OF BROOKLYN CENTER, MINNESOTA
SUBCOMBIMNG STATEMENT OF REVENLJES, EXPENDITURES, AND Statement 23
CHANGES IN FUND BALANCES
NONMAJOR DEBT SERVICE FUNDS
For the Year Ended December 31, 2006
Total
General Tax Nonmajor
Obligation Increment Debt
Bonds Bonds Service
Revenues
Properiy tax 739,502 739,502
Intergovernmental 300,900 300,900
Investment earnings (net of market value adjustment) 28,869 28,869
Total revenues 1,069,271 1,069,271
Expenditures:
Debt service:
Principal 875,000 1,000,000 1,875,000
Interest 143,028 887,080 1,030,108
Fiscal agent fees 724 724 1,448
Total expenditures 1,018,752 1,887,804 2,906,556
Revenuesover(under)expenditures 50,519 (1,887,804) (1,837,285)
Other financing sources (uses):
Transfers in 1,887,804 1,887,804
Net increase (decrease) in fund balances 50,519 50,519
Fund balances January 1 1,054,230 1,054,230
Fund balances December 31 1,104,749 1,104,749
97
I
I
This a has been lett blank intentiona/l
P 9e Y
I
98
NONMAJOR CAPITAL PROJECT FUNDS
The City of Brooklyn Center had the following Capital Project Funds during the year:
Capital Reserve Emersencv Fund This fund was established in 1997 to account for
monies held in reserve for catastrophic losses or unforeseen capital items.
Capital Improvements Fund This fund was established in 1968 to provide funds, and to
account for the expenditure of such funds, for major capital outlays including, but not
limited to, construction or acquisition of major permanent facilities having a relatively
long life; and/or to reduce debt incurred for capital outlays. The financing sources of the
fund include ad valorem taxation, transfers from other funds, issuance of bonds, federal
and state rants, and investment earnin s.
g g
Infrastructure Construction Fund This fund accounts for the recourses and expenditures
required for the construction of infrastructure projects financed wholly or in part by
special assessments levied against benefited properties. Other financing sources include
transfers from utility funds, municipal state aids, federal and state grants, and investment
earnings.
Municipal State Aid Fund This fund was established to account for the state allotment
of gasoline tax collections used for transportation related construction and maintenance
projects.
Earle Brown Heritase Center Imnrovements Fund This fund was established to provide
a stable source of funds to pay for periodic capital improvements needed at the facility.
Street Reconstruction Fund This fund accounts for franchise fees collected, which have
been dedicated to the reconstruction of the City's infrastructure.
Technoloev Fund This fund, established in 2003, accounts for funds set aside for
technology improvements or major technology renovations/replacements.
i i
99
CITY OF BROOKLYN CENTER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FiJNDS
December 31, 2006
Ca ital
P
Reserve Capital Infrastructure
Assets Emergency Improvements Construction
Cash and investments 1,326,630 322,092
Accounts receivable 16,330 i,
Special assessments receivable 142,220
Due from other governments
Interfund receivable 262,206
Advances to other funds 742,488
Total assets 1,326,630 1,376,786 158,550
Liabilities and Fund Balances
Liabilities:
Accounts payable 44,910
Accrued salaries and wages 2,299
Contracts payable 27,353 197,560
Interfund payable 262,206
Deferred revenue 1'7a,874
Total liabilities 27,353 677,849
Fund balances:
Reserved:
Advances to other funds 792,488
Committed contracts 3,186 178,158
Unreserved:
Designated for capital improvements 1,326,630 553,759
Undesignated (697,457)
Total fund balances 1,326,630 1,349,433 (519,299)
Total liabilities and fund balances 1,326,630 1,376,786 158,550
100
Statement 24
Municipal Earle Brown Total
State Aid Heritage Nonmajor
for Center Street Capital
Construction Improvements Reconstruction Technology Proiects
262,795 260,864 1,815,313 486,431 4,474,125
164,536 180,866
142,220
56,056 56,056
262,206
792,488
318 851 260 864 I 979 849 486 431 5 907 961
64,527 109,437
2,299
224,913
262,206
170,874
64,527 769,729
792,488
181,344
318,851 196,337 1,979,849 486,431 4,861,857
(697,457)
318,851 196,337 1,979,849 486,431 5,138,232
318,851 260,864 1,979,849 486,431 5,907,961
101
CITY OF BROOKLYN CENTER, MINNESOTA
SUBCOMBIMNG STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECT FUND5
For the Year Ended December 31, 2006
Capital
Reserve Ca ital Infrastructure
P
Emergency Improvements Construction
Revenues:
Franchise fees
Special assessments 290,484
Intergovernmental 74,133 3,915
Charges for services 26,688
Investment earnings (net of
market value adjustment) 51,205 34,929 881
Miscellaneous 194,921 23,369 1,240
Total revenues 320,259 58,298 323,208
Expenditures:
Current:
General government:
Services and other charges
Publ�c works:
Services and other charges 21,660 63,352
Capital outlay
General government
Public works 490,499 1,417,391
Total capital outlay 490,499 1,417,391
Debt service
Bond issuance costs 30,491
Total expenditures 512,159 1,511,234
Revenues over (under) expenditures 32Q,259 (453,861) (1,188,026)
Other financing sources (uses):
Issuance of debt 1,420,390
Discount on issuance of debt (445)
Transfers in 125,000 147,907
Total other financing sources (uses) 125,000 1,567,852
Net increase (decrease) in fund balances 320,259 (328,861) 379,826
Fund balances January 1 1,006,371 1,678,294 (899,125)
Fund balances December 31 1,326,630 1,349,433 (519,299)
102
Statement 25
Municipal Earle Brown Total
State Aid Heritage Nonmajor
for Center Street Capital
Construction Improvements Reconstruction Technology Projects
658,410 658,410
290,484
545,832 623,880
26,688
19,361 10,819 91,903 18,641 227,?39
3,500 1,020 224,050
565,193 14,319 750,313 19,661 2,051,251
79,362 22,575 101,937
35,551 120,563
40,903 40,903
3 8 t,445 617,673 2,907,008
381,445 40,903 617,673 2,947,911
30,491
416,996 120,265 617,673 22,575 3,200,902
148,197 (105,946) 132,640 (2,914) (1,149,651)
1,420,390
(445)
300,000 70,000 642,907
300,000 70,000 2,062,852
148,197 194,054 132,640 67,086 913,201
170,654 2,283 1,847,209 419,345 4,225,031
318,851 196,337 1,9'79,849 486,431 5,138,232
103
i
i
1
1
1:
1
This a e has been /ett blank intentionall
P9 Y
104
NONMAJOR ENTERPRISE FUNDS
The City of Brooklyn Center had the following nonmajor Enterprise Funds during the
year:
Recvclin� and Refuse Fund This fund accounts for the operation of a state-mandated
recycling program.
Street Lieht Utilitv Fund This fund was created to account for expenses related to
streetlights within the City. Benefiting properties are billed for these expenses.
105
CITY OF BROOKLYN CENTER, MINNESOTA
SUBCOMBINING STATEMENT OF NET ASSETS Statement 26
NONMAJOR ENTERPRISE FUNDS
December 31, 2006
Total
Recycling and Street Light Nonmajor
Refuse Utiliry Enterprise
Assets
Cash and cash equivalents 5,428 102,239 107,667
Accounts receivable net 60,849 55,662 116,5 ll
Total assets 66,277 157,901 224,178
Liabilities
Accounts payable 764 1,679 2,443
Net assets
Unreserved 65,513 156,222 221,735
S
106
CITY OF BROOKLYN CENTER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENSES, AND Statement 27
CHANGES IN FUND NET ASSETS
NONMAJOR ENTERPRISE FUNDS
For the Year Ended December 31, 2006
Total
Recycling and Street Light Nonmajor
Refuse Utility Enterprise
Operating revenues:
Sales and user fees 242,588 221,341 463,929
Operating expenses:
Supplies 794 794
Other services 243,8'78 13,522 257,400
Insurance 1,975 1,36'7 3,342
Utilities 145,536 145,536
Total operating expenses 245,853 161,219 407,072
Operating income (loss) (3,265) 60,122 56,857
Nonoperating revenues (expenses):
Investment earnings (net of market value adjustment) 1,409 5,625 7,034
Income (loss) before transfers (1,856) 65,747 63,891
Transfers out (31,296) (31,296)
Change in net assets (1,856) 34,451 32,595
Net assets January 1 67,369 121,771 189,140
Net assets December 31 65,513 156,222 221,735
107
CITY OF BROOKLYN CENTER, MINNESOTA
SUBCOMBINING STATEMENT OF CASH FLOWS Statement 28
NONMAJOR ENTERPRISE FUNDS
For the Year Ended December 31, 2006
Total
Recycling and Street Light Nonmajor
Refuse Utili Enterprise
ri
Cash flows from operating activities:
Receipts from customers 234,408 220,801 455,209
Payments to suppliers (245,457) (183,827) (429,284)
Net cash flows provided (used) by operating activities (11,049) 36,974 25,925
Cash flows from non capital financing activities
Transfers out (31,296) (31,296)
Cash flows from investing activities:
Interest on investments 1,409 5,625 7,034
Net increase in cash and cash equivalents (9,640) 11,303 1,663
Cash and cash equivalents January 1 15,068 90,936 106,004
Cash and cash equivalents December 31 5,428 102,239 107,667
Reconciliation of operating income (loss) to net cash provided
(used) by operating activities:
Operating income (loss) (3,265} 60,122 56,857
Adjustments to reconcile operat�ng income (loss) to net cash provided
used b o eratin activities:
Y P g
Changes in assets and liabilities:
(Increase) dscrease)in receivables (8,180) (540) (8,720)
Increase (decrease) in payabtes 396 (22,608) (22,212)
Total adjustments (7,784) (23,148) (30,932)
Net cash flows provided (used) by operating activities (11,049) 36,974 25,925
I
10$
INTERNAL SERVICE FUNDS
i The City's Internal Service Funds included in this section are:
Public Emplovees 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 Emolovees 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 fu11-
time police and fire employees and all other full-time employees hired before July l,
1989 may be eligible for those benefits from the time they qualify for an unreduced
PERA pension until they reach age 65 or become eligible for Medicare. In the event that
future costs would exceed earnings, other funds would be charged for the costs associated
with their employees.
Central Garaee Fund This fund was established to account for the acquisition and
maintenance of all City vehicles and rolling stock equipment. Vehicle and equipment
maintenance and repair costs are charged to the departments as incurred. Replacement
costs are charged to the departments over the estimated useful life of the vehicles and
equipment.
109
1'
CITY OF BROOKLYN CENTER, MINNESOTA
SUBCOMBIrIING STATEMENT OF NET ASSETS Statement 29
INTERNAL SERVICE FUNDS
December 31, 2006
Central EE Retirement EE Comp
Gara�e Benefit Absences Total
Assets
Current assets:
Cash and cash equivalents 5,022,951 1,501,157 964,248 7,488,356
Accounts receivable net 14,348 423 14,771
Inventories at cost 29,971 29,971
Total current assets 5,067,270 1,501,580 964,248 7,533,098
Noncurrent assets
Capital assets:
Land improvements 166,108 166,t08
Machinery and equipment 6,179,996 6,179,996
Less: Allowance for depreciation (3,785,989) (3,785,989)
Net capital assets 2,560,115 2,560,115
Total assets 7,627,385 1,501,580 964,248 10,093,213
Liabilities
Current liabilities:
Accounts payable 92,474 92,474
Accrued salaries payable 6,033 6,033
Compensated absences payable-current 96,425 96
Accrued health insurance liability-current 85,700 85,700
Total current liabilities 98,507 85,700 96,425 280,632
Noncurrent liabilities:
Compensated absences payable-long-term 867,823 867,823
Accrued health insurance liability-long-term 2,467,636 2,467,636
Total noncurrent liabilities 2,467,636 867,823 3,335,459
Totalliabilities 98,507 2,553,336 9b4,248 3,616,091
Net assets
Invested in capital assets, net of related debt 2,560,115 2,560,115
Unrestricted 4,968,763 (1,051,756) 3,917,007
Total net assets 7,528,878 $(1,051,756) 6,477,122
110
CITY OF BROOKLYN CENTER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENLJES, EXPENSES, AND Statement 30
CHANGES IN FUND NET ASSETS
INTERNAL SERVICE FUNDS
For the Year Ended December 31, 2006
Central EE Retirement EE Comp
Garage Benefit Absences Total
Operating revenues:
Sales and user fees 1,385,459 87,249 1,472,708
Operating expenses:
Personal services 296,689 535,742 126,776 959,207
Supplies 349,085 349,085
Other services 107,954 107,954
Insurance 49,841 49,841
Utilities 2,014 2,014
Depreciation 465,491 465,491
Total operating expenses 1,271,074 535,742 126,776 1,933,592
Operating income (loss) 114,385 (535,742) (39,527) (460,884)
Nonoperating revenues (expenses):
Investment earnings (net of market value adjustment) 220,780 66,424 39,527 326,731
Gain (loss) on sale of capital assets 30,651 30,651
Other revenue 35,383 35,383
Total nonoperating revenues (expenses) 286,814 66,424 39,527 392,765
Income (loss) before contributions and transfers 401,199 (469,318) (68,119)
Capitat contributions 168,316 168,316
Transfers in 36,542 36,542
Chan e in net assets 606,057 (469,318) 136,739
g
Net assets January 1 6,922,821 (582,438) 6,340,383
Net assets December 31 7,528,878 $(1,051,756) 6,477,122
il
111
CITY OF BROOKLYN CENTER, MINNESOTA
SUBCOMBINING STATEMENT OF CASH FLOWS Statement 31
INTERNAL SERVICE FUNDS
For the Year Ended December 31, 2006
Centrai EE Retirement EE Comp
Gara e Benefit Absences Total
Cash flows from operating activities:
Receipts from interfund services provided 1,3'74,812 87,249 1,462,061
Payments to suppliers (449,730) (449,730)
Payments to employees (296,493) (70,846) (81,641) (448,980)
Miscellaneous revenue 35,383 35,383
Net cash flows provided (used) by operating activities 663,972 (70,846) 5,608 598,734
Cash flows from noncapital financing activities:
Transfers in 10,400 10,400
Cash flows from capital and related financing activities:
Capital contributions 80;000 80,000
Acquisition and construction of capital assets (1,131,677) (1,131,677)
Proceeds from sale of capital assets 163,669 163,669
Net cash flows provided (used) by capital
and related financing activities (888,008) (888,008)
Cash flows from investing activities:
Interest on investments 220,780 66,424 39,527 326,731
Net increase in cash and cash equivalents 7,144 (4,422) 45,135 47,857
Cash and cash equivalents January 1 5,015,807 1,505,579 919,113 7,440,499
Cash and cash equivalents December 31 5,022,951 1,501,157 964,248 7,488,356
Reconciliation of operating income to net cash
provided (used) by operating activities:
Operating income (loss) 114,385 (535,742) (39,527) (460,884)
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation 465,491 465;491
Changes m assets and liabilities:
(Increase) decrease in receivables (10,647) 4,867 (5,780)
(Increase) decrease in inventories 1,464 1,464
Increase (decrease)in payables 57,700 57,700
Increase (decrease) in accrued expenses 196 460,029 45,135 505,360
Other nonoperating income 35,383 35,383
Total adjustments 549,587 464,896 45,135 1,059,618
Net cash provided (used) by operating activities 663,972 (70,846) 5,608 598,734
Noncash financing activities:
Capital contributions 5,000 5,000
Capital asset transfers 109,458 109,458
Gain on sale of assets 30,651 30,651
112
STATISTICAL SECTION
t This part of the City of Brooklyn Center's comprehensive annual financial report
presents detailed information as a context for understanding the financial statements, note
disclosures, and supplementary information. This section includes information for the
t primary government, including any blended component units.
Contents Page
Financial Trends 114
These tables contain trend information to help the reader understand
the Ciry's financial performance by placing it in historical perspective.
Revenue Capacity 124
These tables contain information to help the reader assess the Ciry's
most significant "own-source revenue, properry taxes.
Debt Capacity 130
These tables present information to help the reader assess the
affordability of the government's current levels of outstanding debt
and the City's ability to issue debt in the future.
Demographic and Economic Information 136
These tables offer demographic and economic indicators to help the
reader understand the environment within which the City's financial
activities take place.
atin Inf 138
Oper g ormation
These tables contain service and infrastructure data to help the reader
understand how the Ciry's financial report relates to the services the
City provides and the activities it performs.
1
Sources: unless otherwise noted, the information in these schedules is derived from the comprehensive
annual financial reports for the relevant year.
113
CITY OF BROOKLYN CENTER, MINNESOTA
NET ASSETS BY COMPONENT Table 1
Last four fiscal years
(accrual basis of accounting)
(Unaudited)
2003 2004 2005 2006
Governmental Activities
Invested in ca ital assets net of related debt 14 733 123 12 648 271 25 614 602 28 191 206
P
Restricted 14,853,260 39,412,423 29,326,928 27,637,465 �I
Unrestricted 17,817,934 3,226,051 652,963 4,055,312
Total governmental activities net assets 47,404,317 55,286,745 55,594,493 59,883,983
Business-type activities
Invested in capital assets, net of related debt 37,898,615 36,129,095 38,417,467 38,248,496
Unrestricted 6,464,332 7,137,218 7,087,856 7,973,318
Total business-type activities net assets 44,362,947 43,266,313 45,505,323 46,221,814
I
Primary government
Invested in capital assets, net of related debt 52,631,738 48,777,366 64,032,069 65,304,632
Restricted 14,853,260 39,412,423 29,326,428 27,637,465
Unrestricted 24,282,266 10,363,269 7,740,819 13,163,700
Total primary government net assets 91,767,264 98,553,058 101,099,816 106,105,797
Note: Data for 1997-2002 is not available; the City did not prepare government-wide financial statements on an accrual basis for those years.
I
114
CITY OF BROOKLYN CENTER, MINNESOTA
CHANGES IN NET ASSETS GOVERNMENTAL ACTIVITIES Table 2
Last four fiscal years Page 1 of 3
(accrual basis of accounting)
(Unaudited)
2003 2004 2005 2006
Expenses
General government 2,649,846 2,801,422 2,970,364 2,936,638
Public safety 7,182,321 7,538,277 7,848,160 8,039,356
Public works 2,654,601 1,956,119 3,821,647 2,087,259
Community services 225,365 67,324 86,043 123,172
Parks and recreation 2,169,482 2,255,231 2,305,047 2,565,364
Economic development 1,759,585 1,683,025 3,559,027 2,567,377
Interest on long-term debt 922,253 1,268,649 1,349,852 1,184,017
Total expenses 17,563,453 17,570,047 21,940,140 19,503,183
Program =Revenues
Charges for services:
General government 227,350 315,120 297,511 289,203
Public safety 951,518 687,731 1,026,736 800,408
Parks and recreation 624,294 618,199 681,851 665,332
Other activities 24,554 23,533 9,234 423,8U4
Operating grants and contributions 1,627,020 933,104 855,633 748,888
Capital grants and contributions 1,079,134 2,423,411 2,398,345 2,208,751
Total program revenues 4,533,870 5,001,098 5,269,310 5,136,386
Net revenue/(expense) (13,029,583) (12,568,949) (16,670,830) (14,366,797)
General Revenues and Transfers
Taxes:
Property 10,407,613 15,730,170 11,288,883 11,618,486
Taac increments 3,527,881 3,980,518 2,682,874
Franchise fees 612,079 662,614 658,410
Lodging taxes 661,267 710,619 738,776
Unrestricted grants and contributions 1,413,913 923,374 577,548 702,030
Investment earnings 426,329 491,524 1,272,409 1,928,462
Gain on disposal of capital asset 13,976 29,202 31,880 23,963
Miscellaneous 588,264 660,218
Transfers 100,000 2,004,810 (1,545,893) 303,286
Total general revenues and transfers 17,139,243 20,451,377 16,978,578 18,656,287
Change in Net Assets 4,109,b60 7,882,428 307,748 4,289,490
115
i
CITY OF BROOKLYN CENTER, MINNESOTA
CHANGES IN NET ASSETS BUSINESS-TYPE ACTIVITIES Table 2
ur r Pa e 2 of 3
L as t f o f i s c a l e a s g
Y
(accrual basis of accounting)
(Unaudited)
I 2003 2004 2005 2006
Expenses
Municipalliquor 724,897 939,244 978,743 970,260
Golfcourse 290,990 271,127 273,024 282,418
Earle Brown Heritage Center 2,109,166 2,180,229 2,262,359 2,439,709
Water utility 1,645,955 222,821 1,�17,175 1,635,847
I Sanita sewer 2,567,032 165,651 2,660,706 3,1�6,426
rY
Storm drainage 838,421 1,533,923 899,988 950,425
Recycling andrefuse 223,679 2,310,645 254,661 245,853
Street light utility 147,293 756,593 213,094 161,219
Tota( expenses 8,547,433 8,380,233 9,259,750 9,862,157
Program Revenues
Charges for services:
Municipai liquor 853,353 99t,058 1,099,172 1,244,738
4 2 1 8 861
Earle Brown Herita e Center 1 749 202 1 675 267 1 857 61 6
g
Water utility 1,530,592 l,5$3,450 1,825,521 1,906,375
Sanitary sewer 2,870,109 2,833,836 2,966,222 3,186,569
Storm drainage 1,264,512 1,276,778 1,298,690 1,323,60'7
Other activities 706,644 707,460 706,105 714,373
Total ro ram revenues 8 974 412 9 067 849 9,753,171 10,544,523
S
P g
Net revenue/(expense) 426,979 687,616 493,421 682,366
General Revenues and Transfers
Investment earnings 82,165 102,696 199,876 337,231
Other 241,308 117,864
Transfers (100,000) (2,004,810) 1,545,893 (303,286)
Total general revenues and transfers 223,473 (1,784,250) 1,745,769 33,945
Change in Net Assets 650,452 (1,096,634) 2,239,190 716,3ll
I
116
CITY OF BROOKLYN CENTER, MINNESOTA
CHANGES IN NET ASSETS TOTAL Table 2
Last four fiscal years Page 3 of 3
(accrual basis of accounting)
(Unaudited)
2003 2004 2005 2006
Expenses
Governmental activities 17,563,453 17,570,047 S 21,940,140 19,503,183
Business-type activities 8,547,433 8,380,233 9,259,750 9,862,157
Total expenses 26,110,886 25,950,280 31,199,890 29,365,340
Program Revenues
Governmental activities 4,533,870 5,001,098 5,269,310 5,136,386
Business-type activities 8,974,412 9,067,849 9,753,171 10,544,523
Total program revenues 13,508,282 14,068,94'7 15,022,481 15,680,909
Netrevenue/(expense) (12,602,604) (ll,881,333) (16,177,409) (13,684,431)
General Revenues and Transfers
Governmental activities 17,139,243 20,451,377 16,978,578 18,656,287
Business-type activities 223,473 (1,784,250) 1,745,769 33,945
Total general revenues and transfers 17,362,716 18,667,127 18,724,347 18,690,232
Change in Net Assets 4,760,112 6,785,794 2,546,938 5,005,801
Note: Data for 199'7-2002 is not available; the City did not prepare government-wide financial statements on an accrual basis for those years.
117
This a e has been lett b/ank intentionall
P9 Y
tig
CITY OF BROOKLYN CENTER, MINNESOTA
GOVEKNMENTAL ACTIVITIES TAX REVENUE BY SOURCE Table 3
Last four fiscal years
(accrual basis of accounting)
(Unaudited)
Property Tax Franchise Lodging
Tax Increments Fees Ta�c Total
2003 10,407,613 3,527,881 661,267 14,596,761
2004 10 788 145 4 285 166 612 079 656,859 16,342,249
s
2005 11,288,883 3,980,518 662,614 710,619 16,642,634
2006 11,618,4$6 2,682,874 658,410 738,776 15,698,546
Note: Data for 1997-2002 is not available; the City did not prepare government-wide financial statements on an accrual basis for those years.
119
CITY OF BROOKLYN CENTER, MINNESOTA
FUND BALANCES-GOVERNMENTAL FUNDS
Last ten fiscal years
(modified accrual basis of accounting)
(Unaudited)
1997 1998 1999 2000
General Fund
Reserved 105,074 105,074 105,074 105,074
Unreserved 6,496,706 7,232,926 7,203,633 7,346,969
Total general fund 6,601,780 7,338,000 7,308,707 7,452,043
All other governmental funds
Reserved 14,575,628 15,282,262 8,313,672 7,307,297
Unreserved, reported in:
Special revenue funds 213,750 470,944 1,723,559 1,816,806
Capital project funds 7,796,157 7,227,468 8,884,582 7,308,293
Total all other governmental funds 22,585,535 22,980,674 18,921,813 16,432,396
'I
120
Table 4
2001, 2002 2003 2004 2005 2006
105,074 173,353 110,383 106,578 11,080 500
7,328,798 7,756,421 7,906,697 6,862,871 7,283,871 7,508,690
7,433,872 7,929,774 8,017,080 6,969,449 7,294,951 7,509,190
7,015,583 7,234,260 7,509,315 13,230,540 5,150,818 5,176,808
3,864,347 4,453,879 6,211,019 25,750,179 24,853,267 22,862,211
5,337,423 1,870,176 2,133,079 4,969,506 3,232,820 4,164,400
16,217,353 13,558,315 15,853,413 43,950,225 33,236,905 32,203,419
a
a
121
CITY OF BROOKLYN CENTER, MINNESOTA
CHANGES IN FiJND BALANCES GOVERNMENTAL FUNDS
Last ten fiscal years
(modified accrual basis of accounting)
(Unaudited)
1997 1998 1999 2000
Revenues
Property taxes 6,098,868 7,562,822 7,740,375 8,265,296
Ta�c increments 1,918,032 1,962,289 2,902,590 3,196;108
Franchise fees
Lodging taxes 523,745 660,613 808,266 836,857
Special assessments 1,019,832 1,016,733 909,894 1,287,934
Licenses and permits 485,232 549,067 763,960 632,549
Intergovernmental 5,122,415 4,936,343 8,602,166 7,899,522
Charges for services 757,640 771,614 739,054 779,060
Fines and forfeits 183,270 193,688 205,460 180,676
Investment earnings 1,310,878 1,732,579 609,879 798,229
Miscellaneous 143,895 439,013 168,050 125,012
Total revenues 17,563,807 19,824,761 23,449,694 24,001,243
Expenditures
General government 1,992,506 2,134,001 2,260,415 2,429,196
Public safety 5,107,849 5,185,965 5,354,413 5,453,143
Public works 1,868,130 1,955,10� 1,904,205 2,100,865
Community services 79,800 73,066 83,295 95,148
Parks and recreation 2,212,790 2,148,201 2,233,465 2,344,768
Economic development 1,351,019 893,522 2,664,904 2,763,028
Nondepartmental 311,436 312,625 343,925 419,789
Administrative services reimbursement (661,058) (731,737) (670,390) (795,737)
Capital outlay 4,833,321 6,453,906 13,838,702 7,275,675
Debt service
Principal 1,135,000 1,285,000 2,085,000 3,970,000
Interest 1,017,128 1,244,923 1,373,614 1,282,512
Other charges 52,150 40,537 13,930 13,42b
Totai expenditures 19,300,071 20,995,117 31,485,478 27,351,813
Revenues over (under) expenditures (1,736,264) (1,170,356) (8,035,784) (3,350,570)
Other financing sources (uses)
Borid issuance 8,975,000 2,670,000 1,585,000 735,000
Discount on bond issuance
Sale of capital assets 2,411,987 194,491
Transfers in 2,976,285 3,646,198 3,655,433 5,479,120
Transfers out (2,876�285) (4,071,198) (3,704,790) (5,404,122)
Refunded bonds redeemed ,',I.
Total other financing sources (uses) 9,075,000 2,245,000 3,947,630 1,004,489
Net change in fund balances 7,338,736 1,074,644 (4,088,154) (2,346,081)
Debt service as a percentage of
noncapital expenditures 15.47% 17.94% 19.97% 27.43%
122
Table 5
2001 2002 2003 2004 2005 2006
7,932,469 10,739,847 10,268,278 10,598,478 11,641,U7 11,525,040
3,967,398 3,022,252 3,466,114 3,834,060 4,680,688 2,664,144
612,079 662,614 658,410
826,957 717,176 661,267 656,858 710,619 738,776
1,136,454 1,190,031 1,232,682 1,313,782 1,226,655 1,214,571
788,629 823,996 827,685 678,077 675,530 722,633
5,824,513 7,039,895 3,479,082 3,239,020 2,578,031 2,375,697
688,453 575,748 709,623 711,526 754,575 722,218
230,408 278,557 290,408 254,980 253,748 256,600
2,082,680 648,423 317,749 385,022 1,078,434 1,601,731
150,369 267,717 607,582 609,902 427,839 477,296
23,628,330 25,303,642 21,860,470 22,893,784 24,689,910 22,957,116
2,504,392 2,553,426 2,475,323 2,594,041 2,586,993 2,839,150
5,672,098 6,255,221 6,620,481 7,025,629 7,014,528 7,299,842
2,142,064 1,986,692 2,114,378 1,814,107 2,197,127 1,817,120
106,034 103,491 91,581 67,324 86,043 123,172
2,392,168 2,125,415 2,030,402 1,981,998 2,121,130 2,212,142
2,365,732 2,095,545 1,758,257 1,006,550 2,076,023 1,386,558
372,056 366,282 331,223 333,669 315,355 363,967
(767,504) (596,541) (607,221) (784,084) (754,Q85) (529,362)
6,558,177 9,608,420 1,881,360 4,724,289 8,335,916 5,918,472
2,805,000 3,000,000 3,220,000 3,751,513 2,772,189 3,127,Y46
1,330,162 1,034,139 905,518 881,016 1,214,751 1,197,392
8,931 28,712 26,079 126,858 23,758 53,226
25,489,310 28,560,802 20,847,381 23,522,910 27,989,728 25,808,825
(1,860,980) (3,257,160) 1,013,089 (629,126) (3,299,818) (2,851,709)
730,000 1,205,000 25,770,000 1,460,000
(8,860) (96,503) (445)
572,266 474,648 73,175
4,124,184 4,263,453 3,703,509 5,103,613 2,811,793 2,784,116
(3,798,684) (4,063,453) (3,603,509) (3,098,803) (2,619,793) (2,211,209)
(7,280,000)
1,627,766 674,648 1,369,315 27,678,307 (7,088,000) 2,032,462
(233,214) (2,582,512) 2,382,404 27,049,181 (10,3$7,818) (819,247)
23.89% 21.47% 21.91% 2532% 20.41% 22.01%
123
CITY OF BROOKLYN CENTER, MINNESOTA
ASSESSED TAX CAPACITY AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
Last ten fiscal years
(Unaudited)
1997 1998 1999 2000
Real Property:
Residential 9,485,333 9,182,859 9,309,893 9,976,862
Nonresidential 12,83'7,157 11,082,436 10,657,588 11,002,424
Area-wide allocation (586,003) 226,287 537,406 1,504,330
Personal property 573,984 502,668 452,849 437,707
Less:
Tax increment districts 1,495,154 1,665,054 2,054,659 2,533,878
Total Assessed Tax Capacity 20,815,317 19,329,196 18,903,077 20,387,445
Direct Tax Rate 32.875 35.214 36.269 34.645
Estimated Market Value 988,593,300 1,022,736,700 1,098,665,900 1,177,854,400
Total Assessed Tax Capacity as a percentage
of Estimated Market Value 2.11% 1.89% 1.72% 1.73%
Source: City Assessing Department
1
1
1
1
124
i
Table 6
2001 2002 2003 2004 2005 2006
8,928,738 8,495,196 9,362,788 10,532,55$ 12,177,307 13,942,981
14,093,094 9,225,991 9,430,533 9,775,352 9,903,157 9,475,576
746,438 635,875 875,145 1,097,596 1,023,618 1,161,174
452,680 262,882 273,072 281,963 294,377 298,953
3,296,624 2,450,218 2,538,825 3,134,417 3,122,665 2,559,620
20,924,326 16,169,726 17,402,713 18,553,052 20,275,794 22,319,064
35.996 58.901 52.792 53.693 51.723 48.069
1,324,649,100 1,488,832,300 1,673,812,000 1,840,115,300 1,959,999,100 2,035,666,100
1.5 8% 1.09% 1.04% 1.01 1.03% 1.10%
125
CITY OF BROOKLYN CENTER, MINNESOTA
PROPERTY TAX RATES DIRECT AND OVERLAPPING GOVERNMENTS
Last ten fiscal years
(Unaudited)
Overtapping Rates
Metro
City County Dist ll Dist 279 Dist 281 Dist 286 Districts
1997 2 32.875 42.174 55.588 62.666 63.757 56.260
1998 35.214 38.386 51.824 56386 65.350 51.567 5.646
1999 36.998 40.994 54.856 54.337 47.716 59.807 6.035
2000 35369 39.655 51.792 53.284 48.492 44.356 6.039
2001 36.740 37.679 52.224 56.784 46.678 47.139 5.830
2002 58.901 50.789 29.082 30.092 30.213 26338 3.537
2003 54.021 50.607 26.941 35.042 29.179 49.817 3.825
2004 53.693 47.324 21.050 23.709 34.258 39.892 3.502
2005 51.723 44.172 21.492 24336 29.989 36.159 3.304
2006 48.069 41.016 20.046 21.815 28.489 39.781 2.924
Source: City Assessing Department and Hennepin County Property Tax Services
Watershed levy was added in 2006 in schools districts 279 and 281, and par[s of school districts 11 and 286.
Z Metro and Other Districts are included with County for 1997. Allocation is not available.
I
�I
126
Table 7
Total Direct and Overlapping Rates
Other District 11 District 11 District District District 286 District 286
Districts Watershed' no watershed with watershed 279 281 no watershed with watershed
130.637 137.715 138.806 131.309
2.497 133.567 138.129 147.093 133.310
3.247 142130 141.611 134.990 14�.081
3.111 135.966 137.458 132.666 128.530
2.294 134.767 139.327 129.221 129.682
3.844 146.153 147.163 147.284 143.409
5.161 140.555 148.656 142.793 163.431
3:986 129.555 132.214 142.763 148397
4.078 124J69 127.613 133.266 139.436
4.074 0.073 116.129 116.202 117.971 124.645 135.864 135.937
127
CITY OF BROOKLYN CENTER, MINNESOTA
PRINCIPAL PROPERTY TAXPAYERS Table 8
Current Year and Nine Years A o
g
(Unaudited)
2006 1997 �'I
Percentage of Percentage of
Net Tax Total Taac Net Tax Totai Tax
V lue
Taac a er Ca acit Rank Ca aci Value Ca aci Rank Capacity a
P Y P Y P h'
P tY
Talisman Brookdale, LLC 1,044,060 1 4.68% 1,376,936 1 6.62% S.
Regal Cinemas, Ina 234,350 2 1.05%
Brookdale Carner, LLC 204,850 3 0.92%
BGC Associates, LLC 191,250 4 0.86%
Twin Lake North 184,613 5 0.83%
Medtronic, Inc. 175,650 6 0.79%
The May Department Stores Co. 166,450 7 0.75%
B.C. Leased Housmg 150,750 8 0.68%
Sears Roebuck and Co. 150,220 9 0.67% 359,260 7 1.73%
Wickes Furniture Company 146,110 10 0.65%
0
a ton-Hudson Co 1 iQ8 Q90 2 5.32/0
D
Y rP
Prudential Insurance Ca 774,738 3 3.72%
Ryan Construction Ca 6'74,230 4 3.24%
Lang-Nelson 422,960 5 2.03%
Bradle Real Estate Ina 405,500 6 1.95%
Y
JC Penney's 320,942 8 1.54%
First Indrustrial Raelty Trust 318,675 9 1.53%
Normandale Tennis Club 181,930 10 0.87%
Totals 2,648,303 11.87% 5,943,261 28.55%
Source: City Assessing Deparanent
128
I
i
CITY OF BROOKLYN CENTER, MINNESOTA
PROPERTY TAX LEVIES AND COLLECI'IONS Table 9
Last ten fiscal years
(Unaudited)
Certified Adjusted Coliected within the Collections in Total Collections to Date
Property Property Fiscal Year of the Levy Subsequent Precentage
Tax Levy Adjustments Tax Levy Amount Percentage of Levy Years Amount to Date
1997 6,746,834 (170,408) 6,576,426 6,623,035 100.7% (46,609) 6,576,426 100.0%
1998 7,686,885 (35,671) 7,651,214 7,539,492 99.8% 11,722 7,651,214 100.0%
1999 7,897,379 (34,310) 7,863,069 7,824,101 99.5% 38,968 7,863,069 100.0%
2000 8,100,268 (15,271) 8,084,997 8,044,802 99.5% 40,207 8,085,009 100.0%
2001 8,420,720 (44,833) 8,375,887 8,132,527 97.1% 239,640 8,372,167 100.0%
2002 10,442,518 (922,384) 9,520,134 9,262,641 973% 254,258 9,516,899 100.0%
2003 10,355,103 (828,309) 9,526,794 9,280,043 97.4% 243,077 9,523,120 100.0%
I
2004 10,779,421 (810,305) 9,969,116 9,504,581 953% 454,072 9,958,653 99.9%
2005 11,319,404 (745,352) 10,574,052 10,403,�59 98.4% 123,035 10,526,394 99.5%
200b I1,627,768 (677,573) 10,950,195 10,697,638 92.0% 10,697,638 92.0%
Adjustments for subsequent abatements. Beginning in 2002, adjustments also include Market Value Homestead Gedit.
CITY OF BROOKLYN CENTER, MINNESOTA
RATIOS OF OUTSTANDING DEBT BY TYPE Tabte 10
Last ten fiscal years
(Unaudited)
�JJ
Business-Type
Governmental Activities Activities
General Tax Storm Sewer Total Percentage
Obligation Increment Improvement Revenue Primary of Personai Per
Bonds Bonds Bonds Bonds Government Income Capita
1997 10,025,000 12,425,000 3,920,000 1,565,000 27,935,000 2J6% 980
1998 11,430,000 11,585,000 4,740,000 1,400,000 29,155,000 2.67% 1,022
1999 10,915,000 10,420,000 5,920,000 1,230,000 28,485,000 2.49% 998
2000 8,760,000 9,140,000 6,120,000 1,050,000 25,070,000 2.00% 859
2001 8,105,000 7,690,000 6,150,000 860,000 22,805,000 1.79% 782
2002 7,425,000 6,150,000 5,370,000 660,000 19,605,000 1.53% 672
2003 6,720,000 4,505,000 5,705,000 450,000 17,380,000 1.31% 596
2004 11,025,000 22,445,000 5,710,000 230,000 39,410,000 2.83°/a 1,359
2005 5,340,000 19,305,000 4,720,000 29,365,000 1,044
2006 4,465,000 18,305,000 5,180,000 27,950,000 993
Source`. Personal income Bureau of Economic Analysis
personal income data not available for these years
130
CITY OF BRUOKLYN CENTER, MINNESOTA
RATIOS OF GENERAL BONDED DEBT OUTSTANDING Table 11
Last ten fiscal years
(Unaudited)
Less: Amounts Percentage of
General Available in Net General Estimated
Obligation Debt Service Obligation Market Value Per
Bonds Fund Debt of Property Capita
1997 7,900,000 82,056 7,817,944 0.79% 274
1998 7,900,000 616,778 7,283,222 0.71% 255
1999 7,575,000 725,868 6,849,132 0.62% 240
2000 7,175,000 775,911 6,399,089 0.54% 219
2001 6,760,000 831,588 5,928,412 0.45% 203
2002 6,325,000 871,970 5,453,030 0.37% 187
2003 5,875,000 907,709 4,967,291 0.30% 170
2004 10,450,000 5,903,577 4,546,423 0.25% 157
2005 5,045,000 1,054,230 3,990,770 0.20% 142
2006 4,465,000 1,104,749 3,360,251 0.17°/a 119
131
I
CITY OF BROOKLYN CENTER, MINNESOTA
COMPUTATION OF DIRECT AND OVERLAPPING DEBT Table 12
as of December 31, 2006
(Unaudited)
Estimated Estimated Share
Debt Percentage of Overlapping
Governmenta! Unit Outstanding Applicable' Debt
Overlapping debt:
School Districts:
No. 11 Anoka 177,244,521 7.40% 13,116,095
No. 279 Osseo 247,445,000 S.OS% 12,495,973
No. 281 Robbinsdale 242,080,000 5.15% 12,4�7,120
No. 286 Earle Brown 30,520,000 100.00% 30,52Q,000
Metropolitan Council 169,100,000 0.67% 1,132,970
Hennepin County 512,170,000 1.49% 7,631,333
Hennepin Regional RR Authority 45,865,000 1.49% 683,389
Hennepin County Park Reserve District 69,975,000 1.97% 1,378,508
Tota! overlapping debt 1,069,710,000 79,425,386
City of Brooklyn Center direct debt 2 3,360,251
Total direct and overlapping debt 82,785,637
Source: City Finance Department, Hennepin County, and Springsted Financial Advisors.
The percentage of overlapping debt applicable is estimated using tax capacity values. Applicable percentages were estimated by determining
I the portion of each entity's taac capacity that is within the City's boundazies and dividing it by that entity's total tax capacity.
Z Includes only general obligation debt which is repaid through property ta�ces, net of amounts available.
I I�
132
I,
CITY OF BROOKLYN CENTER, MINNESOTA
LEGAL DEBT INFORMATION Table 13
Last ten fisca! ears
Y
(Unaudited)
Total net debt
applicable to the limit
Total net debt as a percentage of
Debt Limit applicable to limit Legal debt margin debt limit
1997 20,001,394 7,817,944 12,183,450 39.09%
1998 20,439,994 7,283,222 13,156,772 35.63%0
1999 21,911,836 6,849,132 15,062,704 31.26%
2000 23,370,274 6,399,089 16,971,185 27.38%
2001 25,381,400 5,928,412 19,452,988 23.36%
2002 27,354,868 5,453,030 21,901,838 19.93%
2003 29,594,688 4,967,291 24,627,397 16.78%
2004 32,503,096 4,546,423 27,956,673 13.99%
2005 36,003,536 3,990,770 32,012,766 11.08%
2006 39,219,054 3,360,251 35,858,803 8.57%
Le al Debt Mar in Calculation for Fiscal Year 2006
g g
Taxable Market Value
1,960,952,700
Debt limit (2% of Taxable Market Vatue) 39,219,054
Debt applicable to limit
Net general obligation bonds 3,36Q251
Legal debt margin 35,858,803
133
CITY OF BROOKLYN CENTER, MINNESOTA
PLEDGED-REVENUE COVERAGE
Last ten fiscal years
(Unaudited)
Storm Sewer Bonds
Storm Less: Net
Sewer Operating Available Debt Service
Charges Expenses Revenue Principal Interest Coverage
1997 856,920 258,296 598,624 155,000 82,595 2.52
1998 940,012 261,202 678,810 165,000 75,390 2.82
1999 999,867 232,405 767,462 170,000 67,558 3.23
2000 1,074,619 307,389 767,230 i80,000 59,110 3.21
2001 1,129,502 327,412 802,090 190,000 49,950 3.34
2002 1,377,638 662,747 714,891 200,000 40,100 2.98 t
2003 1,264,512 809,130 455,382 210,000 29,540 1.90
2004 1,276,778 756,593 520,185 22�,0 0 0 1 8, 2 5 0 2. 1 8
2005 1,293,841 1,086,600 207,241 230,000 6,210 0.88
2006
134
Table 14
Special Assessment Bonds Tax Increment Bonds
Special Tax
Assessment Debt Service Increment Debt Service
Collections Principal Interest Coverage Collections Principal Interest Coverage
253,169 185,000 122,647 0.82 1,918,032 780,000 755,893 1.25
S37,698 265,000 160,918 1.26 1,962,289 840,000 715,040 1.26
690,538 405,000 189,790 1.16 2,902,590 1,165,000 662,232 1.59
994,839 535,000 231,972 1.30 3,18b,573 1,280,000 595,554 1.70
1,029,378 700,000 252,563 1.08 3,713,349 1,450,000 519,409 1.89
928,559 780,000 249,497 0.90 2,882,577 1,540,000 433,893 1.46
1,153,044 870,000 242,749 1.04 3,142,158 1,645,000 340,413 1.58
1,410,344 1,005,000 218,457 1.15 3,606,130 1,775,000 286,867 1.75
1,058,557 990,000 197,760 0.89 3,576,209 770,000 729,740 2.38
1,035,961 1,000,000 167,284 0.89 1,609,994 1,000,000 887,080 0.85
I 135
CITY OF BROOKLYN CENTER, MINNESOTA
DEMOGRAPHIC AND ECONOMIC STATISTICS Table 15
Last ten fiscal years
(Unaudited)
School Enrollments
Per Capita No. 286
Personal Personal Unemployment No.11 No.279 No.281 Earle
Population Income Income Rate Anoka Osseo Robbinsdale Brown
1997 28,515 $1,011,883,290 35,4$6 2.3% 40,402 21,992 14,010 1,746
1998 28,535 1,090,978,655 38,233 2.1% 40,923 22,028 13,966 1,788
1999 28,535 1,143,625,730 40,078 2.4% 40,964 22,171 13,800 1,734
2000 29,172 1,256,583,900 43,075 3.0% 41,314 22,017 13,706 1,682
2001 29,180 1,270,876,540 43,553 4.2% 41,419 22,041 13,754 1,724
2002 29,185 1,281,425,795 43,907 5.2% 41,383 21,824 13,656 1,732
2003 29,174 1,322,865,856 45,344 5.9% 41,254 21,698 13,765 1,732
2004 29,005 1,393,545,225 48,045 5.6°/a 41,592 21,620 16,196 1,691
2005 28,137 4.8% 41,596 21,792 13,368 1,679
2006 28,137 4.6% 41,310 22,071 13,194 1,705
Sources: Population Metropolitan Council
Personal income Bureau of Economic Analysis
Unemployment rate Minnesota Department of Empioyment and Economic Development
School Enrollments Minnesota Department of Education
i
personal income data not available for these years
1
136
CITY OF BROOKLYN CENTER, MINNESOTA
PRINCIPAL EMPLOYERS Table 16
Cunent Year and Nine Years Ago
(Unaudited)
2006 1997
Percentage of Percentage of
Total City Total City
Bmpioyer Employees Rank Employment Employees Rank Employment
Brookdale Center 1,850 1 12.64% 1,700 1 1136%
Promeon, Division of Medtronics 1,000 2 6.83% 300 3 2.00%
Graco, Inc. 800 3 5.47% 100 7 0.67%
Independent School District #286 300 4 2.05%
Target 250 5 1.71%
Nations Care Link 233 b 1.59%
Cub Foods 233 7 1.59%
Best Buy 155 8 1.06%
City of Brooklyn Center 150 9 1.03% 307 2 2.05%
TCR Corporation 137 10 0.94% 175 5 1.17%
Hoffinan Engineering 265 4 1.77%
Ault, Inc. 160 6 1.07%
Cass Sccew Machine Products 100 8 0.67%
Precision, Ina 100 9 0.67%
Haiwatha Rubber Company 85 10 0.57%
Totals 5,108 34.91% 3,292 21.99%
Source: Minnesota Department of Employment and Economic Development
137
CITY OF BROOKLYN CENTER, MINNESOTA
FULL TIME CITY GOVERNMENT POSITIONS BY FLJNCTION Table 17
Last ten fiscal years
(Unaudited)
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
General government
Administrative 5.4 5.4 6.4 6.4 6.5 6.5 6.5 6.0 6.0 6A
Elections 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1 A 1 A 1 A
Finance 7.0 7.0 7.0 7.0 7.0 7.0 6.0 6A 6.0 6.0
Assessor 4.0 4A 4.0 4.0 4.0 3.0 3.0 3.0 3.0 3 A
Government buildings 4A 4A SA SA 5.0 5.0 5.0 5.0 5.0 SA
Information technology 1.0 1.0 1.0 1.0 1.0 1.0 2.0 2.0 2.0 2A
Total general government 22.4 22.4 24.4 24.4 24.5 23.5 23.5 23.0 23.0 23.0
Public safety
Police
Officers 43.0 42.0 42.0 42.0 42.0 42.0 42.0 42.0 42.0 42.0
Civilians 16.0 17.0 17.0 17.0 16.0 16.0 15.0 15A 15.0 15A
Fire 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 2.0
Building inspection 4.0 4.0 4.0 5.0 SA 4.0 4.0 4.0 4.0 4A
Total public safety 64.0 64.0 64A 65.0 64.0 63.0 62A 62.0 62.0 63A
Public works
Engineering 9.0 9A 10.0 l0A 10.0 10.0 8.0 7.0 7.0 6.0
Streets 109 10.9 109 10.9 10.9 11.0 11.0 10.0 9.0 10.0
Total public works 19.9 19.9 20.9 20.9 20.9 21 A 19.0 17.0 16.0 16.0
Parks and recreation
Administration 5.0 5.0 6.0 6.0 6.0 6.Q 5.0 6A 6.0 6.0
Community center 5.0 5.0 5.0 5.5 5.5 5.0 5.0 3.0 3.0 3A
Park maintenance 10.0 10.0 10.0 10.0 10.0 10.0 10.0 8.0 8A 7A
Total park and recreation 20A 20.0 21.0 21.5 21.5 21.0 20.0 17.0 17A 16.0
Economic devetopment 4.6 4.6 4.6 4.6 4.5 4.5 4.5 4.0 4.0 4.0
Municipal iiquor 3.0 3.0 3.0 4.0 4.0 3.0 3.0 3A 3.0 3.0
Golf course 1 A 1.0 1.0 1.0 1 A 1.0 1.0 1.0 1.0 1 A
Earle Brown Heritage Center 11.0 13.0 13.0 13.0 13.0 11 A 11.0 11.0 11.0 11.0
Water 4.0 4A 5.0 5.0 SA 5.0 5.0 SA S.0 53
Sanitary sewer 3.0 3.0 2.0 2A 2.0 2.0 2.0 2.0 2.0 2.3
Storm sewer 1.0 1.4
Central garage 5.1 5.1 5.1 5.1 5.1 5.0 SA 5.0 5.0 5.0
Totai 158.0 160.0 164A 166.5 165.5 160.0 156A I50.0 150.0 ISlA
Source: City Annual Budget documents
138
I
CITY OF BROOKLYN CENTER, MINNESOTA
OPERATING INDICATORS BY FtJNCTION Table 18
Last ten fiscal years
(Unaudited)
Function 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Police
ViolentCrimes 120 115 91 137 133 136 134 165 174 191
Serious Crimes 2,522 2,273 2,274 2,150 2,057 1,915 2,150 1,893 1,951 2,054
Total Calls for.Service 21,225 21,445 23,906 23,543 26,501 25,644 25,945 26,328 26,738 28,644
Fire
Fires/Allothercalls SSQ 518 642 695 658 681 617 545 692 697
Medical calls 231 223 311 299 305 373 331 279 212 326
Fire inspections performed 236 208 202 214 216 133 100 98 45 0
Streets
Total mi{es 112.18 11235 11235 112.35 112.35 11235 11235 112.35 112.35 112.60
Miles of streets reconstructed 530 4.10 4.70 4.20 3.40 7.80 1.90 2.80 4.60 2.50
Parks and recreaton
CommunityCenterAdmissions 69,134 62,531 59,299 61,836 67,476 42,873 66,427 62,458 59,288 61,680
o Acres of park maintained 522 527 527 527 527 527 527 �27 527 527
Municipal liquor
Number of stores 3 3 3 3 2 1 1 2 2 2
Sales (in thousands) $3,006 $3,201 $3,561 $3,585 $3,552 $3,436 $3,408 $4,027 $4,610 $5,159
Golf course
Rounds sold 36,455 29,882 31,428 34,426 29,448 21,072 27,010 22,847 20,780 21,100
Earle Brown Heritage Center
Bookings 954 813 757 579 572 577 579 611
Functions 1,355 2,129 2,145 2,105 1,527 1,734 1,725 1,870
Inn occupancy (average) 60.10% 50.45% 5334% 46.70% 23.46% 7.23% 9.53% 8.14% 8.58% 11.55%
Water
Connections 8,894 8,90'1 8,933 8,943 8,905 8,934 8,949 8,963 8,938 8,904
Miles of water mains 114.45 114.65 114.98 114.40 114.40 114.62 114.82 114.82 118.25 120.50
Average daily consumption 3,443,887 3,555,501 3,366,551 3,715,142 3,638,490 3,127,214 3,723,769 3,551,104 3,697,'790 3,609,903
Sanitary sewer
Connections 8,770 8,'784 8,796 8,774 8,764 8,786 8,798 8,799 8,804 8,807
Miles of sanitary sewer 104.98 105.18 105.51 1O5.5t 105.51 105.61 105.61 105.61 105.61 105.61
Source: Various City departments
Police indicators for cucrent yeaz are preliminary
data not available for these indicators for these yeazs
in 2002 the Heritage Center Inn ceased daily occupancy and moved to a retreat concept with an 8 room minimum
CITY OF BROOKLYN CENTER, MINNESOTA
CAPITAL ASSET STATISTICS BY FLJNCTION Tabie 19
Last ten fiscal years
(Unaudited)
Function 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Public safety
Police
Stations 1 1 1 1 1 1 1 1 1 1
Patrol units
Markedsquads 10 9 10 10 10 10 7 7 8 8
Othervehictes 18 15 16 16 21 15 13 16 16 16
Fire
Stations 1 1 1 1 2 2 2 2 2 2
Fire trucks 7 7 8 7 7 7 7 7 7 8
Public works
Streets (miles) 112.18 112.35 112.35 112.35 11235 11235 112.35 11235 112.35 112.60
Heavy duty trucks (snow plows) 9 9 11 10 11 11 12 13 12 13
o Parks and recreation
Parksacreage 522 527 527 527 527 527 527 527 527 527
Trails (miles) 112 11.2 11.2 11.2 112 21.6 21.6
Community centers 1 1 1 1 1 1 1 1 1 1
Ground maintenance equipment 18 17 17 18 18 13 13 13 13 13
Other vehicles/equipment 22 19 19 20 21 12 I 1 14 14 14 i
Water
Water mains (miles) 114.45 114.65 114.98 114.40 114.40 114.62 114.82 114.82 118.25 120.50
Wells 9 9 9 9 9 9 9 9 9 9
Sewer
Sanitary sewers (mi(es) 104.98 105. t 8 105.51 105.51 105.51 105.61 105.61 105.61 105.6 t 105.61
Lift Stations 10 10 10 10 10 10 10 10 10 10
Storm sewers (miles) 41.13 Z0.82 71.65 74.20 74.20 74.20 74.20 74.20 74.20 74.20
Source: City capital asset records
information not available for these yeazs