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Home My WebLink About2010 06-07 CCP Joint Work Session with Financial Commission AGENDA City Council and Financial Commission Joint Work Session Monday, June 7, 2010 — 6:30 PM City Council Chambers I. Call to Order II. Approval of Agenda III. Presentation of Audit Report and Management Letter IV. Council /Commission Questions V. Staff Overview of Comprehensive Annual Financial Report VI. Council /Commission Questions VII. Adjournment M KR M KR Auditor's Role }RIIFII❑ PI III I C F. R 71 FIE 11 PCaul: A C (: 11 l' .1 - I' A \ I I City of Brooklyn Center o Opinion on Financial Statements Audit Report — Financial Statements are Fairly Presented in Year Ended December 31, 2009 Accordance with U.S. GAAP O Testing of Internal Controls and Compliance Malloy, Montague, Ka1710WSk1, — Internal controls over financial reporting RadoseVlch, & Co., P.A. — Compliance with laws and regulations related to by k " financial reporting James H. Eichten, CPA — State laws and regulations MKR Management Report M KR Audit Opinions and Findings CERTIFIFD PUall(: OAudit Summary 0 Financial Report — Audit Opinions and Findings - Unqualified or Clean Opinion • Internal Control Findings - Preparation of Adjusting Journal Entry within Accounts Payable - Lack of Management Approval over Payroll Related Transactions • Legal Compliance Audit Findings None MKR Management Report ' r " R Management Report CFRTI FIED PUBLIC c N'F II 11111`1 IS I.I<: OAudit Opinions and Findings 0 Prior Year Findings QFollow -up on Prior Year Findings — Segregation of Duties over Payroll Transactions — Lack of Formal Written Accounting and Financial Reporting Procedures — Lack of Verification of Utility Meter Readings — Capital Assets and Land Held for Resale Prior Period Adjustments — Eligibility Determination Methods for Other Post - Employment Benefits — Timely Payment of Invoices i 1 M KR I Management Report M KR Tax Rates C ERTIFIFD PIi BLI( CERTIFIED PL BI IC A 1: COUM1TA \I+ AC Ctt I�\TANTS *Audit Opinions and Findings RYd carte, du.Pemmte4e °f ne,b a wehr *Follow -up on Prior Year Findings A ° '� ° ° ^ { ° ° °'3 004 Stile -Wide New Art. Bra4413e Ceo6er 2008 2009 2008 N09 2008 1009 •Formal Required Communications A�rvBe w tru • Legislation Cd 36J M9 316 33.7 11.9 4]S •Federal Recovery Act C0 °n, 38, 39.3 319 .7 38.6 40.4 • Property Taxes S°h°ol 11.1 220 21.3 221 26.6 29A1 Special bxn8 506 505 7.0 509 eb 8.8 T^ 101.0 1017 95.8 96.4 117.9 135.7 Taxable Market Value M KR Management Report S2,500,000,000 A C 0 � PL.Bliti s2,000,000,000 *Audit Opinions and Findings SI, 00,000,000 *Follow -up on Prior Year Findings $1,0"10"" *Formal Required Communications Ssoo,000,000 O Legislation S *Federal Recovery Act 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 *Property Taxes *Governmental Funds Overview OwenmeMil FIB R<tenue per (iplb (;oaermenbl Flmd, �Rtdtwea per C1plb KR M KR W.Ib SUteW cA.ervBex 6y P °pn non* e. caw s6.ltwae Avenges n PnPVletinn cln�a C ERI'IFIED I'1 n1 I1 CI R I'I I I F I3 PUBLIC ACC (1 U I' \ \ \ t. t \, 1' \ F A \ T S Steto-Wide C1N of Brm8lm c'er8er Sbto-wide 011 fBr9 k1,C'eNer Yeer Deoertber 31. 11108 200] 2008 2009 Year D..ber31. 2008 2007 2008 2009 P°yubti°v 2500 -10 000 IO.fI0tC20,nW 20,IIW- 1110,0110 27.901 27907 29.5011 P.,10i n 2,50 - 10,000 10000120000 20,000 - 100,000 27,901 27,907 29,500 N�nl P.P. lrylaxes S 355 $ 351 5 376 S 433 S 444 S 437 Oenmlgovcmmcnt $ 130 S 115 S 86 S 106 S 128 5 131 Public cafeN 217 234 237 271 288 28) Tex octettrnts 47 56 61 98 104 122 Btreel imvrcnmc< 114 113 88 83 77 7J Frenchise f sand vtherlalxs 22 3' 1 49 45 42 Pula and tmrtatun 65 86 86 83 86 BJ SpecW usas,rcnls 81 53 6] 49 46 46 AO other 81 94 300 192 219 70 licenses and Petntts 27 25 33 24 23 21 I,oa 1emnenblrev 217 742 147 114 79 95 S 607 S 662 5 597 1 ]J5 S�8 SOH Cb"B fm servves 82 78 79 25 27 38 Older 97 95 89 79 53 32 CGprtel°uthy and c°neWCtion S J79 S 33 5 327 S 162 1 162 S 96 Tvlal mevue S 958 5 934 S 883 5971 S821 S 833 Deblrrnice Prbcryd S 171 S 135 5 112 $ 100 5 103 S 111 Inlcrt.(md fiscd 71 48 41 1 N2 S 183 s 153 S 141 S 144 S 192 2 M K R General Fund Financial Position Management Report Year Ended December 3 1, CF. RTI1ItD rc81R SI8,000,000 ACI l IT5 $ 16,000,000 •Audit Opinions and Findings 514,000,0 oFollow -u on Prior Year Findings EI2,000.000 Follow-up g 510.000,000 Required Communications $6,000,000 •Formal Re 9 66,000.000 • Legislation $ 400 ° 00 $0,o •Federal Recovery Act $- .. J�t" •PropertyTaxes 2004 2005 —Fund Balance 2007 2ooa Zoos oGovernmental Funds Overview MCssh Balance (Not onmerrund Borrowing) v Financial Trends and Analysis E xpen d11 YfCs General Fund Revenue by Source General Fund Expenditures by Function Year Ended December 31, Year Ended December 31, $9,000,000 513,500,000 58,000,000 $12,000,000 $10,500,000 $7,000,000 59,000,000 56.000,000 $7300,000 S5,00o,0oo $6,000,000 S4, 000 , 000 54,500,000 $3,000,000 63,000,000 $1,500,000 52,000,000 i $1,000,000 2004 2005 2006 2007 2008 2009 $- NTaBes 01ater8overamemal ❑Other 2004 2005 2006 2007 2008 2009 ■General Govemmeat OPublwstety 0hblicWorks ■Perks and Recreation ■Other l I Sanitary Sewer Fund Water Fund Year Ended December 31, Year Ended December 31, 53.500.000 $2,500,000 $3.000.000 $2,000,000 $2,500,000 $2,000,000 $1,500,000 $1,500,000 $1.000.000 51.000,000 $500,000 $500,000 s- E- S(500,000) 8(500,000) 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009 —O tiv Revenue pore g OOpereting Revenue �O tiv E xpe pore g nros �Op ere[ing Etyenaea �prvjeot Coots �Projeot Corte — 0peretin8 Ineome (Loan) E =luding Project C.M. Operating Inaome (Lou) Exclding Project Corts 3 Storm Drainage Fund Liquor Fund Year Ended December 31, Year Ended December 31, $1,600,000 56.000.000 $1,400,000 55.300.000 51200,000 $5.000.000 SI,000,000 54,500,000 $800,000 54,000.000 $3,300'00 $600,000 $3.0°0,000 S400,000 $2,300,000 $200,000 $2,000,000 $1,500,000 $- 1 $1'00,000 2004 2005 2006 2007 2008 2009 $500,000 $- 2004 2005 2006 2007 2008 2009 =Operating Revenue O Salee � Operating Expenses =Coax of Sales — Operating M. .) Excluding Project Costs doper mg Expense. — Operaing Income (Lon) Eule Brovm Her¢age Cantor Fund Year Ended December 3 t. Golf Course Fund Year Ended December 3 t, s4,500,000 54,000,0oo 5350,000 $3,500.000 $300,000 53,000,000 $250,000 52,500,000 $200,000 sz,000,000 5150,000 51,5°°,000 Et,000,00o 3100,000 $50,0 $500,000 00 a- S S(5°0'oP) 5(50,000) 5(1.000,000) $(100,000) 2004 2005 2006 2007 2°08 2009 1 =a.lae .nd User Fece 2004 2005 2006 2007 2006 2009 :,mg Expenses =Operating Revenue Coe= of $.lea — oper.un Ineome ryes) �Opereting Expenses — Operating Income (Loea) M KR Entity -Wide Information M KR Management Report CI a'I IP 111 rr By, C1ItT I V.1I I't'8�.�( A <: ('. It 1 I A\ 'I' na( r. r o Audit Opinions and Findings o Follow -upon Prior Year Findings =mm. nfass«) o Formal Required Communications ,uu - maT o Legislation efeU=a ,Pkfxa PS=lfN) o Federal Recovery Act a.Pras.r.wr. Harr u,fta °aa) m>M o Property Taxes o Governmental Funds Overview o Financial Trends and Analysis o Accounting and Auditing Updates 4 MKR Summary CERTIFIF F) Pl.'NI.IC AC10U \TA \T) oClean Opinion on Financial Statement oReported Two Findings *Eliminated Prior Year Findings *Overall Improving Financial Condition in City's General Fund *Continued Ongoing Assessment of Financial Projections and Results including General, Other Operational and Enterprise Fund Activities I I 5 6/7/2010 Government -Wide $ 44,000,645 Cash & Investments $ 9,045,260 Other Current Assets Comprehensive Annual Financial $ 12,534,529 Assets Held for Resale $ 82,593,481 Capital Assets - Report $148,173,915 Total Assets $ 4,012,118 Current Liabilities for the year ended December 31, 2009 $ 982,398 Compensated Absences Payable $ 25,385,000 Debt Payable $ 30,379,516 Total Liabilities $104,031,472 Restricted Net Assets $ 13,762,927 Unrestricted Net Assets $117,794,399 Total Net Assets Government -Wide General Fund • $ 44,000,645 in cash and investments • Fund Balance Reserve Policy: — $ 8,199,441 TIF # 3 — 50.0% to 52.0% of the next ear's operations — 3 889 Y P $ ,008 OtherTlF — $ 4,243,158 Debt Payment Reserves (assessments) — End of year 2009 = 51.7% — $ 2,463,367 Employee Retirement Obligations —$ 130,478 Grant Funds — $ 4,561,923 Capital Project Fund reserves — $ 4,010,679 Vehicle Replacement (depreciation) — $ 5,380,972 Utility Fund Reserves — $ 1,424,765 Liquor Fund — $ 767,014 Earle Brown Heritage Center — $ 8,929,840 General Fund (54.3% of 2010 Budget) General Fund Special Revenue Funds Amuelized G—th 2004 -2007 Economic Development Authority - Amuarzed —$ 1,879,955 Fund Balance 2D04 .__ 2009 _. GroMh GrmAh General G -Mment _.2,585,597 3,146751 561,154 398 %'. • $ 1,792,835 Unrestricted Cash 'Pubic Safeh 6,642,254, 8,133,009 1,490,755 ... 4.26%' • $ 12,880 Bills Payable Pubic Wort¢ 1,679,440 1 _ 1 309,395 -- 3.29% Rermaton and_Paft t, N1 2,344,075 362,075 127% • $ 100,000 Due from Other Governments ottw 712 691 664,256 (48.435) 0.94% 13,601,980 16,276,924, 3.62 %'. • TIF Districts — $12,534,529 in land held for resale — $10,295,614 cash with various restrictions 1 6/7/2010 Debt Service Funds Capital Project Funds • Most complete survey of the City's debt • Infrastructure Construction Fund is a holding situation is found on pages 60 and 61 of the fund. It will be replenished with the bi- annual Notes to the Financial Statements. sale of assessment bonds. • Legal Debt Overlap and Limitations on pages • Street Reconstruction Fund, which is funded 148 and 149 of the Statistical Section. by the franchise fees from Xcel and CenterPoint, is going to be drawn down significantly in 2010 and 2011 which will reduce the cash balance rapidly. Capital Project Funds Enterprise Funds - Utilities $ 1,780,309 current cash balance • Utilities are in good cash flow condition at $ 680,000 2010 revenue competitive rates in covering operations. $ 1,503,000 2010 expenditures • Bond payments for Automated Meter Reading $ 680,000 2011 revenues system are lower than originally proposed. $ 1.034,000 2011 expenditures $ 603,309 cash at end of year 2011 • Projections show the fund going to a negative cash balance in 2014 and staying there for the rest of the Capital Improvements Plan. Enterprise Funds - Businesses Capital Improvement Plan • Liquor Fund is steadily increasing net income. The Capital Project Funds and Enterprise • EBHC Fund is was challenged for cash flow in Funds for Utilities are closely tied to the 2009 but shows signs of stabilization for 2010. Capital Improvement Plan. • Centerbrook Golf Course will continue to require monitoring and discussion. 2 CITY OF CENTER HENNEPIN COUNTY, MINNESOTA Special Purpose Audit Reports Year Ended December 31, 2009 1 CITY OF BROOKLYN CENTER HENNEPIN COUNTY, MINNESOTA Year Ended December 31, 2009 Table of Contents Page Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 1 -2 ' Independent Auditor's Report on Compliance With Minnesota State Laws and Regulations 3 Schedule of Findings and Responses 4 -5 PRINCIPALS Kenneth W. Malloy, CPA MMKR Thomas M. Montague, CPA Thomas A. Karnowski, CPA Paul A. Radosevich, CPA CERTIFIED PUBLIC William J. Lauer, CPA ACCOUNTANTS James H. Eichten, CPA Aaron J. Nielsen, CPA Victoria L. Holinka, CPA INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS City Council and Residents City of Brooklyn Center, Minnesota 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 City of Brooklyn Center (the City) as of and for the year ended December 31, 2009, which collectively comprise the City's basic financial statements, and have issued our report thereon dated May 27, 2010. 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 Government Auditing 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's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal ' control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over financial reporting. ' Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses and, therefore, there can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified. However, as described in the accompanying Schedule of Findings and Responses, we identified one deficiency in internal control over financial reporting that we consider to be a material weakness and one deficiency that we considered to be a significant deficiency. A deficiency in internal control 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 1 detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City's financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiency described in the accompanying Schedule of Findings and Responses as item 2009 -1 to be a material weakness. (continued) -1- 1 Malloy, Montague, Karnowski, Radosevich & Co., P.A. 5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Telephone: 952 -545 -0424 • Telefax: 952 -545 -0569 • www.mmkr.com A significant deficiency is a deficiency or a combination of deficiencies in internal control that is less severe than a material weakness yet important enough to merit attention by those charged with governance. We consider the deficiency described in the accompanying Schedule of Findings and Responses as item 2009 -2 to be a significant deficiency. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of 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 or other matters that are required to be reported under Government Auditing Standards. The City's responses to the findings identified in our audit are described in the accompanying Schedule of ' Findings and Responses. We did not audit the City's response and, accordingly, we express no opinion on them. This report is intended solely for the information and use of the City Council, management of the City, and others within the City and is not intended to be, and should not be, used by anyone other than these , specified parties. MA'IO4 6 n�a vQ. ka`MO uJ5 �G�� r` � 1 May 27, 2010 -2- PRINCIPALS Kenneth W. Malloy, CPA MMKR Thomas M. Montague, CPA Thomas A. Karnowski, CPA Paul A. Radosevich, CPA CERTIFIED PUBLIC William J. Lauer, CPA ACCOUNTANTS James H. Eichten, CPA ' Aaron J. Nielsen, CPA Victoria L. Holinka, CPA INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH MINNESOTA STATE LAWS AND REGULATIONS City Council and Residents City of Brooklyn Center, Minnesota We have - ve audited the financial statements of the governmental activities the business - activities each g h'� major fund, and the aggregate remaining fund information of the City of Brooklyn Center (the City) as of and for the year ended December 31, 2009, which collectively comprise the City's basic financial statements, and have issued our report thereon dated May 27, 2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of the Minnesota Legal Compliance Audit Guide for Local Governments, promulgated by the Office of the State Auditor pursuant to Minnesota Statute § 6.65. Accordingly, the audit included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The Minnesota Legal Compliance Audit Guide for Local Governments 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 complied with the material terms and conditions of applicable legal provisions. This report is intended solely for the information and use of the City Council, management of the City, and the state of Minnesota and is not intended to be, and should not be, used by anyone other than these specified parties. I n M a oH1 I — a 6% Qc L',A r)aws as �,t/i - a W C, ' May 27, 2010 -3- Malloy, Montague, Karnowski, Radosevich & Co., P.A. 5353 Wayzata Boulevard Suite 410 • Minneapolis, MN 55416 • Telephone: 952- 545 -0424 • Telefax: 952- 545 -0569 • www.mmkr.com CITY OF BROOKLYN CENTER ' Schedule of Findings and Responses Year Ended December 31, 2009 This schedule summarizes findings and responses relating to compliance with Minnesota Statutes, internal controls, and compliance findings. The auditor, Malloy, Montague, Karnowski, Radosevich & Co., P.A. (MMKR), is responsible for providing the information under the headings "Criteria," "Condition," "Cause," "Effect," and "Recommendation." The City of Brooklyn Center (the City) is responsible for providing the information under the heading "Management's Response." A. FINDINGS — INTERNAL CONTROL OVER FINANCIAL REPORTING MATERIAL WEAKNESS 2009 -1 PREPARATION OF ADJUSTING JOURNAL ENTRY Criteria — Preparation of the trial balance should be completely handled by the City, including adjusting all account balances to be fairly stated for completion of the annual financial audit. Condition - During our audit we noted a material adjusting journal entry that was made by the City to make the general ledger fairly stated. Auditing standards recently issued consider the identification by the auditor of a material misstatement that was not initially identified by the audit entity to be a material weakness in the related internal control. ' Cause — This was an oversight by city personnel. Effect — Because some account balances were not completely adjusted at the start of the financial 1 audit, an adjusting journal entry noted by the auditor was required to fairly state all account balances in the general ledger. Recommendation — We recommend that the City continue to review practices and make sure all account balances are fairly stated at the start of the annual financial audit. Management's Response — There is no disagreement with the audit finding. The City will review account balance adjustment procedures to fairly state the financial statements prior to the start of the annual audit to ensure proper financial statement presentation. SIGNIFICANT DEFICIENCY 2009 -2 LACK OF MANAGEMENT APPROVAL Criteria — Management is responsible for establishing and maintaining effective internal controls. These controls include the establishment of a review and approval process by an ' appropriate level of management. Condition — We noted one area within the accounting and reporting internal accounting control systems that lacked management approval: • There is no approval of payroll by management, nor are payroll registers reviewed throughout the year. The allocation of payroll costs should also be monitored and approved by department heads on a periodic basis. -4- CITY OF BROOKLYN CENTER Schedule of Findings and Responses (continued) ' Year Ended December 31, 2009 A. FINDINGS — INTERNAL CONTROL OVER FINANCIAL REPORTING (CONTINUED)' SIGNIFICANT DEFICIENCY (CONTINUED) ' 2009 -2 LACK OF MANAGEMENT APPROVAL (CONTINUED) Cause — Management is not requiring approval of certain transactions within the internal accounting control systems of the City. Effect — This lack of approval process subjects the City to a higher risk that errors or fraud could occur and not be detected in a timely manner. Recommendation — We recommend that the City establish procedures to incorporate ' management approval in the following areas: • We recommend that management periodically review the payroll registers. ' • We recommend a periodic review of the allocation of payroll costs to the general ledger ' to ensure that they are being coded to the appropriate accounts, funds, and programs. Management's Response — The City will add procedures to monitor the allocation of payroll costs throughout the year. These procedures will include periodic comparisons of actual to ' budget amounts for payroll, periodic reviews of the allocation of payroll costs to the appropriate function, and reconciliation of the payroll registers and general ledger accounts to the quarterly federal tax returns. In addition, periodic verification of payrollfbenefit files will be added to the existing control procedures for verification of additions, changes, and termination of employees. -5- Management Report for City of Brooklyn Center, Minnesota ' December 31, 2009 1 PRINCIPALS Kenneth W. Malloy, CPA MMKR Thomas M. Montague, CPA Thomas A. Karnowski, CPA Paul A. Radosevich, CPA C E R T I F I E D PUBLIC William J. Lauer, CPA ACCOUNTANTS James H. Eichten, CPA Aaron J. Nielsen, CPA Victoria L. Holinka, CPA 1 1 To the City Council City of Brooklyn Center, Minnesota We have prepared this management report in conjunction with our audit of the City of Brooklyn Center's (the City) financial statements for the year ending December 31, 2009. The purpose of this report is to communicate information relevant to city finances in Minnesota and to provide comments resulting from 1 our audit process. We have organized this report into the following sections: • Audit Summary 1 • Funding Cities in Minnesota • Governmental Funds Overview • Financial Trends and Analysis • Accounting and Auditing Updates We would be pleased to further discuss any of the information contained in this report or any other 1 concerns that you would like us to address. We would also like to express our thanks for the courtesy and assistance extended to us during the course of our audit. 1 This report is intended solely for the information and use of management, those charged with governance of the City, and those who have responsibility for oversight of the financial reporting process and is not intended to be, and should not be, used by anyone other than these specified parties. 1 M . o y ona qVC ka r✓Iow PAJ os 1 May 27, 2010 J i i i 1 Malloy, Montague, Karnowski, Radosevich & Co., P.A. 5353 Wayzata Boulevard Suite 410 • Minneapolis, MN 55416 • Telephone: 952- 545 -0424 • Telefax: 952 -545 -0569 www.mmkr.com AUDIT SUMMARY The following is a summary of our audit work, key conclusions, and other information that we consider important or that is required to be communicated to the City Council, administration, or those charged with governance of the City. 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 City as of and for the year ended December 31, 2009. Professional standards require that we provide you with information about our responsibilities under auditing standards generally accepted in the United States of America, Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information to you verbally and in our audit engagement letter. Professional standards also require that we communicate to you the following information related to our audit. AUDIT OPINION AND FINDINGS Based on our audit of the City's ty s financial statements for the year ended December 31, 2009: • We have issued an unqualified opinion on the City's annual financial statements. ■ • We noted two matters involving the City's internal control over financial reporting that we considered to be significant deficiencies, one of which was considered to be a material weakness. These include the following findings: — Preparation of an adjusting journal entry, and — Lack of management approval of payroll transactions. • The results of our testing disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. • We have reported n findings ' p o ndings based on our testing of the City's compliance with Minnesota laws and regulations. FOLLOW -UP ON PRIOR YEAR FINDINGS As a part of our audit of the City's financial statements for the year ended December 31, 2009, we performed procedures to follow -up on the findings that resulted from our prior year audit. The following is a summary of prior year findings along with the results of our follow -up procedures: We reported that the City did not have proper segregation of duties over the processing of payroll transactions. During the 2009 fiscal year, the City implemented procedures improving the controls over payroll processing. As a result of these improvements, we have eliminated this finding. As part of our 2008 audit, we reported that the City did not have adequate documentation of the components of internal controls. During the 2009 year, the City established formal written internal control accounting procedures and as a result has eliminated this finding. We reported that the City had not established procedures regarding the accuracy of meter readings or the periodic verification of residential meter readings. During the 2009 year, the City has replaced all water meters and installed an automated utility billing system and as a result has eliminated this finding. 4- As part of our calendar 2008 audit, we noted the City had not adequately designed the controls over the processing of capital assets and land held for resale resulting in a prior period adjustment. The City has improved the controls over capital assets and land held for resale in calendar 2009. As a result of these improvements we have eliminated this finding. f We noted that the City did not have adequate documentation of the eligibility of retirees for other post - employment benefits (OPEB) and certain eligibility requirements of city employees for retiree benefits were difficult to determine. During the 2009 year, the City has established procedures to obtain this documentation prior to retirees receiving OPEB. We reported that the City had not paid each vendor obligation according to the terms of each contract within 35 days after the receipt of the goods or services or the invoice for the goods or services, as required by Minnesota Statutes. The City reviewed their claims and disbursement payment procedures in place in the current year. No issues were noted in this area during our 2009 audit. SIGNIFICANT ACCOUNTING POLICIES Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 of the notes to basic financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. ACCOUNTING ESTIMATES AND MANAGEMENT JUDGMENTS 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 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 affecting the financial statements of the City include the following: • Depreciation — Management's estimates of depreciation expense are based on the estimated useful lives of the assets. • Net OPEB Liabilities — Actuarial estimates of the net OPEB obligation is based on eligible participants, estimated future health insurance premiums, and estimated retirement dates. I • Land Held for Resale — Management's estimates of this asset are based on net realizable value (lower of cost or estimated sales price). Management expects any differences between estimates and actual amounts of these estimates to be insignificant. We evaluated the key factors and assumptions used by management in the areas discussed above in determining that they are reasonable in relation to the financial statements taken as a whole. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosure affecting the financial statements was: • Net OPEB Disclosures -2- DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT We encountered no significant difficulties in dealing with management in performing and completing our audit. i CORRECTED AND UNCORRECTED MISSTATEMENTS Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. We proposed one uncorrected audit adjustment to the financial statements for the reporting of governmental activities unamortized discounts on bond proceeds totaling $191,337. Management has determined that the effects of this item are immaterial, both individually and in the aggregate, to each opinion unit's financial statements taken as a whole. DISAGREEMENTS WITH MANAGEMENT For purposes of this report, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, 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. MANAGEMENT REPRESENTATIONS ' We have requested certain representations from management that are included in the management representation letter dated May 27, 2010. MANAGEMENT CONSULTATIONS WITH OTHER INDEPENDENT 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 City'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. OTHER AUDIT FINDINGS OR ISSUES 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's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. i 1 1 -3- FUNDING CITIES IN MINNESOTA LEGISLATION The following is a summary of significant legislative activity passed in calendar 2009 affecting the finances of Minnesota cities: Unallotment — The 2009 legislative session ended without an agreement on how to erase the state budget deficit. The Legislature approved and sent a final package of budget - balancing tax items to the Governor, but the Governor vetoed the bill and balanced the budget on his own using his power of unallotment. The Governor's unallotment plan included delays in the payment of state revenues to school districts, and a reduction in appropriations to other state programs, including local government aid (LGA) and market value homestead credit (MVHC). 1 The unallotments included $193 million in reductions in calendar 2009 and 2010 to LGA and MVHC to cities, calculated at 3.31 percent and 7.64 percent, respectively, of the total calendar 2009 aggregated levy and LGA of the city. Cuts are first taken from LGA and then from MVHC, as necessary. A city's total reduction could not exceed $22 and $55 per capita, respectively. Cities with populations below 1,000 and below the state -wide average tax base per capita were exempted from these cuts. In May 2010, the Minnesota Supreme Court ruled on a lawsuit brought by a program that had its funding cut through unallotment. The court ruled that the Governor's "use of unallotment power to address the unresolved deficit exceeded the authority granted to the executive branch by statute." While the court ruled only on the cuts to this specific program, the decision called into question all of the Governor's reductions, which were subsequently revisited during the 2010 legislative session. Levy Limitations — The 2008 Legislature passed a law that limits general operating property tax levy increases for cities with populations over 2,500 to 3.9 percent annually for the next three calendar years. The 2009 legislative session ended with levy limits intact. Levy limits will remain in place for at least the 2010 budget year, with a couple of minor modifications that were contained in laws passed in 2009. For the calendar 2010 tax year, cities will be able to declare "special levies" for the calendar 2008 and 2009 unallotment losses described earlier. The calendar 2010 unallotment losses I can be declared for the 2011 tax year. Emergency Certificates of Indebtedness — The law authorizes a city to issue emergency debt certificates if the city's current year revenues are reasonably expected to be reduced below the amount provided in the city's budget approved when the property tax levy of the city was certified. This law only allows for the issuance of this debt if the revenues of the city will be insufficient to ' meet the expenses incurred or to be incurred during the current fiscal year. For example, emergency debt certificates could be issued as a result of mid -year reductions in state aid payments for LGA or MVHC, or when a city is experiencing a high level of property tax delinquencies. This law also requires the city to levy property taxes for the payment of principal and interest on the certificates issued. FEDERAL RECOVERY ACT The American Recovery and Reinvestment Act of 2009 is expected to provide approximately $300 billion in federal funds to state and local governments, and to institutions of higher education. These funds are intended to supplement existing federal programs, create new programs, or provide more broad fiscal relief. Many cities are hoping to receive some of these temporary funds for programs and projects. The American Recovery and Reinvestment Act of 2009 mandates that there be an unprecedented amount of oversight and transparency around the spending of these funds, including specific audit and internal control requirements. -4- The additional internal control requirements include the need for controls over the acceptance of recovery funds, appropriate controls over the segregation of these funds from other sources of revenue, compliance with the additional laws and regulations specific to each grant award, and additional financial reporting requirements back to the appropriate federal agency. These additional controls also include considerations into whether control procedures are in place over the federal grant expenditures to prevent unallowable expenditures, consideration into whether additional controls and systems will be needed to ensure funds are able to be separately tracked and identified, and consideration into if controls are sufficient for any funds that are passed along to subrecipients. PROPERTY TAXES Minnesota cities rely heavily on local property tax levies to support their governmental fund activities. In recent years this dependence has been heightened, as revenue from state aids and fees related to new development have dwindled due to the struggling economy. This has placed added pressure on local taxpayers already beset by higher unemployment, lower property values, and tighter credit markets. As a 1 result, municipalities in general are experiencing increases in tax delinquencies, abatements, and foreclosures. This instability has led to significant fiscal challenges for many local governments, and increased the investing public's concerns about the security of the municipal debt market. Property values within Minnesota cities experienced average increases of 7.0 percent for taxes payable in 2008 and 1.5 percent for those payable in 2009, reflecting the slowdown in growth of market values. In comparison, the City's market value increased by 2.7 percent in 2008 and decreased 4.7 percent in 2009. It is important to remember that the 2009 market value is based on estimated values as of January 1, 2008, and the housing market is still experiencing difficult times. The following graph shows the City's changes in taxable market value over the past 10 years: Taxable Market Value $ 2,500,000,000 $2,000,000,000 $1,500,000,000 $1,000,000,000 $500,000,000 $- 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 -5- Tax capacity is considered the actual base available for taxation. It is calculated by applying the state's property classification system to each property's market value. Each property classification, such as commercial or residential, has a different calculation and uses different rates. Consequently, a city's total tax capacity will change at a different rate than its total market value, as tax capacity is affected by the proportion of the city's tax base that is in each property classification from year -to -year, as well as legislative changes to tax rates. Your city's tax capacity increased 6.1 percent for 2008 and decreased 2.7 percent for 2009. The following graph shows the City's change in tax capacities over the past 10 years: Local Tax Capacity $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $ 5,000,000 $- ' 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Although it is impossible to consider every aspect and variable of local government spending, average tax rates are often used as a benchmark. Rates expressed as a percentage of net tax capacity All Cities Seven -County City of State -Wide Metro Area Brooklyn Center 2008 2009 2008 2009 2008 2009 ' Average tax rate City 36.3 36.9 33.6 33.7 43.9 47.5 ' County 38.0 39.3 34.9 34.7 38.6 40.4 School 21.1 22.0 21.3 22.1 26.6 29.0 Special taxing 5.6 5.5 7.0 5.9 8.8 8.8 Total 101.0 103.7 96.8 96.4 117.9 125.7 I Both the City's portion and the total tax capacity rates for Brooklyn Center residents are significantly ' higher than the state -wide and metro area averages the last two years. These rates are higher than average due to a combination of factors, including lower than average property values, makeup of residential properties, and the use of tax increments within the City. -6- GOVERNMENTAL FUNDS OVERVIEW This section of the report provides you with an overview of the financial trends and activities of the City's governmental funds. Governmental funds include the General Fund and the special revenue, debt service, and capital project funds. We have also included the most recent comparative state -wide averages available from the State Auditor. The reader needs to consider the effect of inflation and other known changes or differences when comparing this data. Also, certain data on these tables may be classified differently than how they appear on the City's financial statements in order to be more comparable to the state -wide information, particularly in separating capital expenditures from current expenditures. We have designed this section of our management report using per capita data in order to better identify unique or unusual trends and activities of your city. We intend for this type of comparative and trend 1 information to complement, rather than duplicate, information in the Management's Discussion and Analysis. An inherent difficulty in presenting per capita information is the accuracy of the population count, which for most years is based on estimates. Keep in mind that your city's per capita revenue and 1 expenditures maybe higher or lower than average due to your city's level of commercial development and activity for a city in your population class. Governmental Funds Revenue The amounts received from the typical major sources of revenue will naturally vary between cities based on their particular situation. This would include the City's stage of development; location, size, and density of its population; property values; services it provides; and other attributes. The following table presents the per capita revenue of the City's governmental funds for the past three years, together with comparative state -wide averages: Governmental Funds Revenue per Capita With State -Wide Averages by Population Class State -Wide City of Brooklyn Center Year December 31, 2008 2007 2008 2009 Population 2,500 - 10,000 10,000 - 20,000 20,000 - 100,000 27,901 27,907 29,500 Property taxes $ 355 $ 351 $ 376 $ 433 $ 444 $ 437 Tax increments 47 56 61 98 104 122 Franchise fees and other taxes 22 34 37 49 45 42 Special assessments 81 53 61 49 46 46 Licenses and permits 27 25 33 24 23 21 Intergovernmental revenues 247 242 147 114 79 95 Charges for services 82 78 79 25 27 38 Other 97 95 89 79 53 32 Total revenue $ 958 $ 934 $ 883 $ 871 $ 821 $ 833 The City relies more on property tax revenue for its governmental funds revenue compared to the average Minnesota city. The City continues to generate significantly more tax increment revenue per capita than average, as it has made extensive use of this tool to finance commercial development. However, because the City is a mature suburb, it generates less special assessment revenue (typically used for new development). The City's per capita governmental funds revenue for 2009 was $833, an increase of about 1.5 percent from the prior year. This was primarily the result of the increase in intergovernmental revenue and charges for services offset by the decrease in other revenue. The increase in intergovernmental revenue, which increased $16 per capita, was mainly due to the increase in LGA received. Charges for services increased about $11 per capita due to additional activities performed by public safety in the area of code enforcement and the registration of vacant properties within the City. With the decline in the market, investment earnings decreased compared to the prior year, causing other revenue to decrease $21 per capita. -7- r Governmental Funds Expenditures r The expenditures of governmental funds will also vary from state -wide averages and from year -to -year, based on the City's circumstances. Expenditures are classified into three types as follows: r • Current — These are typically the general operating type expenditures occurring on an annual basis, and are primarily funded by general sources such as taxes and intergovernmental revenues. • Capital Outlay and Construction — These expenditures do not occur on a consistent basis, more typically fluctuating significantly from year -to -year. Many of these expenditures are r project- oriented, which are often funded by specific sources that have benefited from the expenditure, such as special assessment improvement projects. • Debt Service — Although the expenditures for the debt service may be relatively consistent over the term of the respective debt, the funding source is the important factor. Some debt may be repaid through specific sources such as special assessments or redevelopment funding, while other debt may be repaid with general property taxes. The City's per capita governmental funds expenditures for the past three years, together with state -wide averages, are presented in the following table: Governmental Funds Expenditures per Capita P P P With State -Wide Averages by Population Class r State -Wide City of Brooklyn Center Year December 31, 2008 2007 2008 2009 Population 2,500- 10,000 10,000 - 20,000 20,000 - 100,000 27,901 27,907 29,500 Current General government $ 130 $ 115 $ 86 $ 106 $ 128 $ 131 Public safety 217 234 237 271 288 287 Street maintenance 114 113 88 83 77 73 Parks and recreation 65 86 86 83 86 83 All other 81 94 100 192 259 70 $ 607 $ 642 $ 597 $ 735 $ 838 $ 644 j Capital outlay and construction $ 379 $ 338 $ 327 $ 162 $ 162 $ 96 Debt service Principal $ 171 $ 135 $ 112 $ 100 $ 103 $ 151 Interest and fiscal 71 48 41 41 41 41 r $ 242 $ 183 $ 153 $ 141 $ 144 $ 192 The City's governmental funds current per capita expenditures are higher than state -wide averages for cities in the same population class. The City's current operating costs are higher than average mostly related to higher than average public safety costs. The City's per capita current expenditures decreased significantly in 2009 as a result of the City expending significant funds in Tax Increment District #3 for acquisition and development of properties within the City of about $187 per capita in the prior year. Capital outlay costs per capita decreased about $66 as a result of a decrease in construction projects in the current year. Debt service principal increased in fiscal 2009 as the City was using tax increment revenues to pay principal payments on tax increment bonds outstanding. -8- 1 FINANCIAL TRENDS AND ANALYSIS GENERAL FUND The City's General Fund accounts for the financial activity of the basic services provided to the community. The primary services included within this fund are the administration of the municipal operations, police and fire protection, building inspection, streets and highway maintenance, and parks and recreation. The graph below illustrates the change in the General Fund financial position over the last six years. We 1 have also included an expenditure line to reflect the change in the size of the General Fund operation over the same period. General Fund Financial Position Year Ended December 31, $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 1 $6,000,000 $4,000,000 $2,000,000 1 $ 2004 2005 2006 2007 2008 2009 ' Fund Balance Cash Balance (Net of Interfund Borrowing) 1 The City's General Fund cash and investments balance net of interfund borrowing) g) at December 31, 2009 was $9,017,840, which increased $731,459 from 2008. Total fund balance at December 31, 2009 ' was $8,530,005, up $786,567 from the prior year. Having an appropriate fund balance is an important factor in assessing the City's financial health because a government, like any organization, requires a certain amount of equity to operate. Generally, the amount of equity required typically increases as the size of the operation increases. A healthy financial position allows the City to avoid volatility in tax rates; helps minimize the impact of state funding changes; allows for the adequate and consistent funding of services, repairs, and unexpected costs; and can be a factor in determining the City's bond rating and resulting interest costs. The City currently has an operating fund reserve policy that states the General Fund will manage its cash flow by having a targeted unreserved General Fund balance at the end of the fiscal year of between 50 percent and 52 percent of next year's General Fund budgeted expenditures. At December 31, 2009, the City's General Fund had a fund balance of 52.4 percent of the City's annual General Fund expenditures, based on 2009 expenditure levels. -9- The following graph reflects the City's General Fund reliance on its revenue sources for 2009: General Fund Revenue Taxes Licenses /Permits Intergovernmental Charges for Services Other O O O O O O O O O O O O O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00, 0 00 0 00 0 00 0 00 0 00 tk ■ Budget ❑ Actual Total General Fund revenues for 2009 were $16,188,173, an increase of $1,161,029 or 7.7 percent from the previous year, and $261,152 (1.6 percent) over the final budget. Charges for services were over budget $389,578 due to additional activities performed by public safety in the area of code enforcement and the registration of vacant properties within the City which were more than anticipated in the budget. The following graph presents the City's General Fund revenue sources for the last six years. The graph reflects a common trend experienced by Minnesota cities over the past few years with decreased or 1 minimal increases in state aids. This trend forces a higher reliance on taxes and other sources to fund the natural increases in costs over time. General Fund Revenue by Source Year Ended December 31, $13,500,000 $12,000,000 $10,500,000 $9,000,000 $7,500,000 $6,000,000 $4,500,000 $3,000,000 $1,500,000 $— 2004 2005 2006 2007 2008 2009 ■ Taxes ■ Intergovernmental ❑ Other The above graph reflects an increase in revenue of $1,161,029 from the prior year. Tax revenue increased about $404,000 due to the increased tax levy in the current year. The increase in intergovernmental revenue of about $432,000 is related to the increase in LGA the City received. Other revenue increased about $326,000 mostly in the area of charges for services. As described above, charges for services increased due to additional activities performed by public safety in the area of code enforcement and the ' registration of vacant properties within the City. -10- I The following illustrations provide you with the components of the City's General Fund spending for 2009 and for the past six years: General Fund Expenditures General Government Public Safety Public Works Parks and Recreation Other 0 0 0 0 0 0 0 00 00 4 1 4 0 000 0 000 0 000 0 000 0 000 0 000 0 000 0 000 0 000 ■ Budget ❑ Actual Total General Fund expenditures for 2009 were $16,276,924, an increase of $253,029 (1.6 percent) from the prior year, and $593,811 (3.5 percent) less than budget. The largest areas that were under budgeted amounts were for personal costs within the protective inspection department totaling $218,128 and the ' non - departmental services and charges totaling $288,210. General Fund Expenditures by Function t Year Ended December 31, $9,000,000 $8,000,000 $7,000,000 $6,000,000 i $5,000,000 $4,000,000 t $3,000,000 $2,000,000 $1,000,000 $— 2004 2005 2006 2007 2008 2009 ■ General Government ❑ Public Safety ❑ Public Works General Fund expenditures increased about $253,000 from the prior year mainly due to the $370,000 increase in the public safety department. The increase was a result of personnel costs for police protection. The increase in public safety costs was offset by the decrease in the general government. General government expenditures decreased about $160,000 due to decreases in legal fees and building repairs. -11- UTILITY FUNDS 1 The utility funds comprise a considerable portion of the City's activities. These funds significantly help to defray overhead and administrative costs and provide additional support to general government operations by way of annual transfers. We understand the City is proactive in reviewing these activities on an ongoing basis and we want to reiterate the importance of continually monitoring these operations. Over the years we have emphasized to our city clients the importance of these utility operations being self - sustaining, preventing additional burdens on general governmental funds. This would include the accumulation of net assets for future capital improvements and to provide a cushion in the event of a negative trend in operations. Water Fund The following graph presents six years of operating results for the Water Fund: 1 Water Fund Year Ended December 31, t $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $— $(500,000) 2004 2005 2006 2007 2008 2009 =Operating Revenue � Operating Expenses Project Costs Operating Income (Loss) Excluding Project Costs The Water Fund ended 2009 with net assets of $10,636,865, a decrease of $1,109,707 from the prior year. Of this, $8,902,333 represents the investment in utility distribution system capital assets, leaving $1,734,532 of unrestricted net assets. ' Water Fund operating revenue was $1,974,100 for 2009, an increase of $6,566 over the prior year. Operating expenses were $1,662,518 more than last year. The significant increase in operating expenses is a result of the City having significant project costs in 2009 for replacing all water meters and installing an automated utility billing system which totaled about $1.6 million. 1 1 -12- Sanitary Sewer Fund The following graph presents six years of operating results for the Sanitary Sewer Fund: ' Sanitary Sewer Fund Year Ended December 31, $3,500,000 $3,000,000 ' $2,500,000 $ 2,000,000 $1,500,000 $1,000,000 $500,000 $(500,000) 2004 2005 2006 2007 2008 2009 O Operating Revenue � Operating Expenses � Project Costs Operating Income (Loss) Excluding Project Costs The Sanitary Sewer Fund ended 2009 with net assets of $12,379,420, a decrease of $384,061 from the prior year. Of this, $9,474,762 represents the investment in the sanitary sewer capital assets, leaving $2,904,658 of unrestricted net assets. Sanitary Sewer Fund operating revenues for 2009 were $3,315,597, about $51,482 higher than last year. The increase in revenue is due to a combination of increased consumption and an increase in rates in 2009. ' Operating expenses for 2009 were $3,725,703, an increase of $718,504 from the prior year. This increase is mostly related to the City having significant project costs in 2009 for replacing all meters and installing an automated utility billing system which totaled about $600,000. -13- Storm Drainage Fund The following graph presents six years of operating results for the Storm Drainage Fund: Storm Drainage Fund Year Ended December 31, $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 2004 2005 2006 2007 2008 2009 D Operating Revenue Operating Expenses ' Operating Income (Loss) Excluding Project Costs The Storm Drainage Fund ended 2009 with net assets of $18,340,592, an increase of $440,475 from the prior year. Of this, $15,875,928 represents the investment in capital assets, leaving $2,464,664 of unrestricted net assets. Storm Drainage Fund operating revenues for 2009 were $1,577,679, about $24,643 higher than last year. The increase is due to an increase in rates in 2009. Operating expenses for 2009 were $1,278,100, about $122,859 higher than the prior year. Much of this increase relates to the increase in depreciation expense of $94,914 in the current year. -14- i OTHER ENTERPRISE FUNDS ' Liquor Fund The following graph presents six years of operating results for the Liquor Fund: Liquor Fund Year Ended December 31, ' $6,000,000 $5,500,000 $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 ' $1,000,000 $500,000 $— ' 2004 2005 2006 2007 2008 2009 =Sales � Cost of Sales � Operating Expenses Operating Income (Loss) ' The Liquor Fund ended 2009 with n f 94 from the prior ear. q et assets of $1,975,152, an increase o $35, 8 p y ' Of the net asset balance, $21,848 represents the investment in liquor capital assets, leaving $1,953,304 of unrestricted net assets. Liquor sales for 2009 were $5,610,108, about $125,579 (2.3 percent) more than last year. Sales have ' steadily increased over the last several years, increasing by about 39 percent since 2004. The Liquor Fund generated operating income of $277,711 in 2009, or about 4.9 percent of gross sales compared to 6.7 percent of gross sales in fiscal 2008. This decline was the result in an increase in operating costs in fiscal 2009 of $123,277 or 11.0 percent. The Liquor Fund gross profit margin was 27.13 in fiscal 2009 compared to a similar amount of 27.11 in ' fiscal 2008. -15- Earle Brown Heritage Center Fund ' The following graph presents six years of operating results for the Earle Brown Heritage Center Fund: Earle Brown Heritage Center Fund Year Ended December 31, $4,500,000 r $4,000,000 $3,500,000 ' $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 ' $500,000 $— ' $(500,000) $(1,000,000) ' 2004 2005 2006 2007 2008 2009 O Sales and User Fees � Operating Expenses ' � Cost of Sales Operating Income (Loss) ' The Earle Brown Heritage Center Fund ended 2009 with net assets of $6,652,781, a decrease of $801,806 from the prior year. Of the net asset balance, $5,978,881 represents investments in Earle Brown Heritage Center capital assets, leaving $673,900 of unrestricted net assets. ' Earle Brown Heritage Center Fund sales and user fees for 2009 were $3,542,077, about $289,895 (7.6 percent) less than last year. The decrease is directly related to the slowing economy and a decrease in the number of events compared to prior year. Operating expenses for 2009 were $2,352,140, a ' decrease of $43,786 from the prior year. -16- Golf Course Fund ' The following graph presents six years of operating results for the Golf Course Fund: ' Golf Course Fund Year Ended December 31, $350,000 ' $300,000 $250,000 $200,000 $150,000 ' $100,000 $50,000 $(50,000) $(100,000) ' 2004 2005 2006 2007 2008 2009 D Operating Revenue Operating Expenses ' Operating Income (Loss) ' The Golf Course Fund ended 2009 with net assets of $805,312, a decrease of $69,364 from the prior year. Of this, $1,632,672 represents the investment in golf course land and capital assets, leaving a deficit of ($827,360) of unrestricted net assets. ' Golf Course Fund operating revenues for 2009 were $249,310, about $4,514 less than last year. Operating expenses for 2009 were $318,847, up $17,707 from the prior year. On an annual basis, this fund has had to borrow from other funds to fund cash flow needs. This interfund borrowing was a total of ' $825,910 at December 31, 2009. We recommend that the City continue to monitor the financial results in this fund. We also recommend ' that the City continue to update the long -range financial plan for this fund, including progress toward having adequate resources for the payback of interfund borrowing. -17- GOVERNMENT- I E F W D INANCIAL STATEMENTS 1 The City's financial statements include fund -based information that focuses on budgetary compliance, and the sufficiency of the City's current assets to finance its current liabilities. The Governmental Accounting Standards Board (GASB) Statement No. 34 reporting model also requires the inclusion of two government -wide financial statements designed to present a clear picture of the City as a single, unified entity. These government -wide statements provide information on the total cost of delivering services, including capital assets and long -term liabilities. Statement of Net Assets The Statement of Net Assets essentially tells you what your city owns and owes at a given point in time, ' the last day of the fiscal year. Theoretically, net assets represent the resources the City has leftover to use for providing services after its debts are settled. However, those resources are not always in spendable form, or there may be restrictions on how some of those resources can be used. Therefore, the Statement ' of Net Assets divides the net assets into three components: • Invested in Capital Assets, Net of Related Debt — The portion of net assets reflecting equity in capital assets (i.e. capital assets minus related debt). • Restricted Net Assets — The portion of net assets equal to resources whose use is legally restricted minus any non - capital- related liabilities payable from those same resources. • Unrestricted Net Assets — The residual balance of net assets after the elimination of invested in ' capital assets, net of related debt and restricted net assets. The following table presents the City's net assets as of December 31, 2009 for governmental activities and business -type activities: Governmental Business -Type ' Activities Activities Total Net assets ' Current and other assets $ 55,797,109 $ 9,783,325 $ 65,580,434 Net book value of capital assets 40,296,371 42,297,110 82,593,481 Current liabilities (7,119,011) (947,681) (8,066,692) Long -term liabilities (22,312,824) (22,312,824) ' Total net assets $ 66,661,645 $ 51,132,754 $ 117,794,399 ' Net assets Invested in capital assets, net of related debt $ 33,550,664 $ 42,297,110 $ 75,003,481 Restricted 29,027,991 — 29,027,991 Unrestricted 4,082,990 8,835,644 13,762,927 Total net assets $ 66,661,645 $ 51,132,754 $ 117,794,399 The City's total net assets at December 31, 2009 were $790,007 higher than at the beginning of the year. ' The amount invested in capital assets, net of related debt increased by $2,009,900 in fiscal 2009. Restricted and unrestricted net assets decreased $1,219,893. ' At the end of the current fiscal year, the City is able to present positive balances in all three categories of net assets, both for the City as a whole, as well as for its separate governmental and business -type activities. The same situation held true for the prior fiscal year. -18- ' Statement of Activities ' The Statement of Activities tracks the City's yearly revenues and expenses, as well as any other transactions that increase or reduce total net assets. These amounts represent the full cost of providing services. The Statement of Activities provides a more comprehensive measure than just the amount of ' cash that changed hands, as reflected in the fund -based financial statements. This statement includes the cost of supplies used, depreciation of long -lived capital assets, and other accrual -based expenses. The following table presents the change in net assets of the City for the year ended December 31, 2009: Expenses Program Revenue Net Difference Net (expense) revenue ' Governmental activities General government $ 3,653,956 $ 1,136,726 $ (2,517,230) Public safety 9,036,176 2,118,271 (6,917,905) Public works 2,687,980 1,682,251 (1,005,729) ' Parks 2,773,528 767,728 (2,005,800) Economic development 2,151,916 445 (2,151,471) Other 71,519 — (71,519) ' Interest on long -term debt 1,143,546 — (1,143,546) Business -type activities Utilities 8,688,333 7,166,684 (1,521,649) ' Liquor 1,249,946 1,530,175 280,229 Earle Brown Heritage Center 2,363,085 1,725,858 (637,227) Recycling and refuse 276,058 267,316 (8,742) ' Golf course 323,340 249,402 (73,938) $ 34,419,383 $ 16,644,856 (17,774,527) General revenues Property and tax increments 16,515,407 Lodging taxes 591,291 ' Unrestricted grants and contributions 1,019,990 Investment earnings 397,214 Other revenues 40,632 18,564,534 Increase in net assets $ 790,007 One of the goals of this statement is to provide a side -by -side comparison to illustrate the difference in the way the City's governmental and business -type operations are financed. The City's governmental ' operations tend to rely more heavily on general revenues, such as property taxes and unrestricted grants. In contrast, the City's business -type activities tend to rely more heavily on program revenues like charges for services (sales) and program specific grants to cover expenses. This is critical given the current external downward pressures on general revenue sources such as taxes and state aids. -19- ACCOUNTING AND AUDITING UPDATES U ITING U S ' GASB STATEMENT N0.51— ACCOUNTING AND FINANCIAL REPORTING FOR INTANGIBLE ASSETS Governments possess many different types of assets that may be considered intangible assets, including easements, water rights, timber rights, patents, trademarks, and computer software. This statement requires that all intangible assets not specifically excluded by its scope provisions be classified as capital assets. The requirements in this statement improve financial reporting by reducing inconsistencies that ' have developed in accounting and financial reporting for intangible assets. These inconsistencies will be reduced through the clarification that intangible assets subject to the provisions of this statement should be classified as capital assets, and through the establishment of new authoritative guidance that addresses issues specific to these intangible assets given their nature. The requirements of this statement are effective for financial statements for periods beginning after June 15, 2009. GASB STATEMENT N0.53 - ACCOUNTING AND FINANCIAL REPORTING FOR DERIVATIVE INSTRUMENTS ' The guidance in this statement improves financial reporting by requiring governments to measure derivative instruments at fair value in their economic resources measurement focus financial statements. These improvements should allow users of those financial statements to more fully understand a government's resources available to provide services. The disclosures provide a summary of the ' government's derivative instrument activity and the information necessary to assess the government's objectives for derivative instruments, their significant terms, and the risks associated with the derivative instruments. The requirements of this statement are effective for financial statements for periods beginning after June 15, 2009. GASB STATEMENT N0.54 — FUND BALANCE REPORTING AND GOVERNMENTAL FUND TYPE 1 DEFINITIONS The objective of this statement is to enhance the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions. This statement establishes fund balance classifications (nonspendable, restricted, committed, assigned, and unassigned) that comprise a hierarchy based ' primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. The definitions of the General Fund, special revenue, capital projects, debt service, and permanent fund types are clarified by the provisions in this statement. Elimination of the reserved component of fund balance in favor of a restricted classification will enhance the consistency between information reported in the government -wide statements and information in the governmental fund financial statements and avoid confusion about the relationship between reserved fund balance and restricted net assets. The requirements of this statement are effective for financial statements for periods beginning after June 15, 2010. -20- COMPREHENSIVE ANNUAL FINANCIAL REPORT 1 OF THE CITY OF BROOKLYN CENTER, MINNESOTA ' Cornelius L. Bo ane g Y City Manager Prepared By: ' FINANCE DIVISION DEPARTMENT OF FISCAL & SUPPORT SERVICES ' Daniel Jordet Director ' Clara Hilger Assistant Finance Director ' FOR THE YEAR ENDED DECEMBER 31, 2009 (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 Certificate of Achievement 8 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 Activities 33 Proprietary Funds Statement of Net Assets 34 Statement of Revenues, Expenses, and Changes in Fund Net Assets 36 Statement of Cash Flows 38 Notes to the Financial Statements 41 Required Supplementary Information: ' Budgetary Comparison Schedule- General Fund 75 Budgetary Comparison Schedule -Tax Increment District No. 3 80 Schedule of Funding Progress — Other Post Employment Benefits 81 Note to Required Supplementary Information 82 Combining and Individual Fund Statements and Schedules: ' Nonmajor Governmental Funds Combining Balance Sheet 84 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 85 Combining Balance Sheet - Nonmajor Special Revenue Funds 88 Combining Statement of Revenues, Expenditures and Changes in Fund Balances- Nonmajor Special Revenue Funds 90 1 FINANCIAL SECTION (Continued) , Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual: Special Revenue Fund - Housing and Redevelopment Authority 92 Special Revenue Fund- Economic Development Authority 93 Special Revenue Fund -Earle Brown Tax Increment District 94 Special Revenue Fund -Tax Increment District No. 4 95 , Special Revenue Fund - Community Development Block Grant 96 Special Revenue Fund -City Initiatives Grant 97 Combining Balance Sheet- Nonmajor Debt Service Funds 100 ' Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Debt Service Funds 101 , Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual: Debt Service Fund -G.O. Improvement Bonds 102 Debt Service Fund -Tax Increment Bonds 103 Debt Service Fund - General Obligation Bonds 104 Combining Balance Sheet - Nonmajor Capital Project Funds 106 ' Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Capital Project Funds 108 ' Schedule of Revenues, Expenditures, and Changes in Fund Balance- Budget and Actual: Capital Project Fund - Infrastructure Construction 110 Capital Project Fund - Capital Improvements . 111 I Capital Project_ Fund- Municipal State Aid for Construction 112 Capital Project Fund -Earle Brown Heritage Center Improvements 113 ' Capital Project Fund- Street Reconstruction 114 Capital Project Fund - Technology 115 Nonmajor Enterprise Funds Combining Statement of Net Assets 118 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets 119 Combining Statement of Cash Flows 120 , Internal Service Funds Combining Statement of Net Assets 122 , Combining Statement of Revenues, Expenses and Changes in Fund Net Assets 123 Combining Statement of Cash Flows 124 ii 1 STATISTICAL SECTION (unaudited) 1 Net Assets by Component 126 Changes in Net Assets 128 Governmental Activities Tax Revenue by Source 135 1 Fund Balances — Governmental Funds 136 Changes in Fund Balances — Governmental Funds 138 Assessed Tax Capacity and Estimated Actual Value of Taxable Property 140 Property Tax Rates — Direct and Overlapping Governments 142 Principal Property Taxpayers 144 Property Tax Levies and Collections 145 Ratios of Outstanding Debt by Type 146 ' Ratios of General Bonded Debt Outstanding 147 Computation of Direct and Overlapping Debt 148 Legal Debt Information 149 Pledged Revenue Coverage 150 Demographic and Economic Statistics 152 ' Principal Employers 153 Full Time City Government Positions by Function 154 Operating Indicators by Function 155 Capital Asset Statistics by Function 156 i 1 1 1 1 1 1 1 i i 1 This page has been left blank intentional /y. ' iv ' City of Brooklyn Center A Millennium Community June 1, 2010 Honorable Mayor and Members of the City Council City of Brooklyn Center Transmitted herewith is the Comprehensive Annual Financial Report of the City of Brooklyn Center for the fiscal year ended December 31, 2009. Management of the City of Brooklyn Center assumes full responsibility for the completeness and reliability of the information contained in this report based on the current system of internal control. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. Minnesota Statutes and City Charter Section 7.12 require that the financial statements of the City of Brooklyn Center be audited annually by the State Auditor or a certified public accountant selected by the City Council. These financial statements have been audited by Malloy, Montague, Karnowski, Radosevich, & Co., P.A. (MMKR). Their report is included in the financial section of this report. In addition, MMKR is required to issue an opinion on the City's management and accounting for grant funds from the federal government. This ""Single Audit" opinion, when included, is designed to meet the monitoring needs of federal grantor agencies. That report is not required for 2009 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. It 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. 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center, W 55430 -2199 (763) 569 -3400 City Hall and TDD Number (763) 569 -3300 FAX (763) 569 -3434 FAX (763) 569 -3494 www.cityojbrooklyncenter.org The City - ty as operated under the council-manager form of government since the adoption of the City Charter in 1966. The governing body is comprised of the Mayor and four Council Members elected at large. All members serve four -year terms with two of the Council Members standing for election during each national election year cycle. The Mayor and Council Members hire a City Manager who runs the daily operations of the City. The City provides a full range of municipal services to its citizens. These include police and fire rotection services zoning and code enforcement municipal P g planning, parks, 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 Boards of those two organizations are comprised of the Mayor and members of the City Council. The City also has internal departments providing human resources, engineering, financial management and information technology support to these various functions. The City operates a conference and meeting facility at the Earle Brown Heritage Center, two municipal liquor stores, and Centerbrook, a nine -hole executive golf course. Financial planning and control for the City of Brooklyn Center is based on the Annual Operating Budget and the multi -year Capital Improvement Program. Under Minnesota Statutes, a preliminary property tax levy must be adopted no later than September 15 of each year for the ensuing year's collection. This establishes a maximum levy that may subsequently be lowered but not raised. A ceiling is established from time to time on that levy by the Minnesota Legislature. The ceiling is normally exclusive of levies for debt service and referendum approved levies. Effective establishment of this levy requires that a preliminary budget be prepared. The City Manager prepares such a budget each summer and presents it to the City Council in August, prior to the consideration of the preliminary tax levy. In addition, the City Council reviews the recommended rates and charges for utility funds and other operations on an annual basis as part of the budget process. Citizens receive a notice of taxes proposed for their individual properties in November based on the preliminary levies established by all taxing districts. Following the receipt of this notice citizens are invited to public hearings 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 and the resulting operational budgets for the ensuing fiscal year are adopted at a subsequent meeting. In addition, a Capital Improvement Program is reviewed and revised during the budget process each year. This includes projects for which the City may 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 each year. 2 Local Economy Brooklyn Center is a mature, developed first ring suburb of Minneapolis 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. j 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. The State Demographer estimates the population for Brooklyn Center at 30,330 as of April, 2008. The number of housing units has decreased from 11,704 in 1990 to an estimated 11,250 units in 2008. 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 decreased 9.28% for 2009 valuations. Residential housing, which makes up 55.07% of the overall tax base, decreased 12.80% in value while the commercial and industrial portions of the tax base decreased 0.13% and 1.63% respectively. Values in all portions of the tax base are expected to drop in the foreseeable future. However, the proportionate makeup of the property tax base will remain relatively stable. Therefore, property tax burden is not expected to shift significantly between classifications of property. Residential foreclosures and vacant properties were another facet of the economic outlook for the City in 2009. 305 or 3.65% of non - apartment residential properties in the City went to Sheriff's Sale during 2009 with 52 of those properties still in the redemption period as of December 31, 2009. Vacant residential properties as of that same date numbered 183, 2.22% of the City's non - apartment residential housing. 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 these corridors. There are no large, undeveloped tracts of land in Brooklyn Center and no potential for annexation of additional undeveloped land. Therefore, 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 revitalization of neighborhoods. The hospitality industry contributes a significant amount to Brooklyn Center's economy. Lodging tax provided over $ 310,000 for 2009 fiscal year operations. A new 260 bed Embassy Suites hotel facility opened in 2009. It is immediately adjacent to the City's Earle Brown Heritage Center conference facility and will complement the conference facility operations. 3 The State of Minnesota has rovided significant funding to local governments through P 9 9 9 9 the Local Government Aid LGA and Market Value Homestead Credit MVHC programs over the past three decades. Deficit funding projections at the State level have affected the distribution of LGA and MVHC negatively. In 2009 the City lost 463 tY $ , 502 or about 31% of its certified LGA funding during the fiscal year through unallotment. Consequently, the City was forced to amend its operating budget in April of 2009 to j reflect the loss of LGA and to rebalance the operating budget. Long Term Financial Planning As part of a planned replacement of the aging infrastructure, the City continued the program for street and utility improvements by reconstructing the Aldrich Avenue neighborhood streets and Shingle Creek Drive in 2009. When streets are reconstructed in this program, 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, 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 an ongoing process. The Capital Improvements Plan projects completion of the reconstruction of the streets and utilities in the entire community by 2021. An additional benefit of these neighborhood projects has been the increased activity by residents in the maintaining and cleaning up of their properties following reconstruction projects. Development of utility rate models has improved the City's ability to plan and generate cash flow for the scheduled improvements to the water and sewer systems. Separate funds for street lighting and stormwater drainage have also helped control and rioritize 9 P P infrastructure improvements and operations in these areas. Major Initiatives Redevelopment continues to be the key to commercial and industrial tax base growth. The City has acquired three adjacent business ro erties at the intersection of Highway P P 9 Y 100 and Interstate 94. The buildings on the sites were demolished and. Phase I environmental assessments prepared. This created a 14 acre redevelopment site. Preparations for development of 140,000 square feet of Class A office space and an adjacent parking structure on 8 acres of the site are ongoing and construction is expected to begin in the summer of 2010. A 14 acre redevelopment site at the intersection of Logan and 57 Avenues has encountered delays because of environmental clean -up of contaminants from a dry cleaning establishment. The extent of the contamination has been established and remediation is underway. Grants have been obtained to implement the remediation on 4 the property and in the surrounding neighborhood. Redevelopment proposals are being solicited for the site. The City's 'Opportunity Site" continues to be a focus for redevelopment efforts. The City's acquisition and clearing of a former automobile dealership site presents an opportunity to combine parcels with adjacent properties to create redevelopment opportunities along County Road 10 and Highway 100. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Brooklyn Center for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended December 31, 2008. The City was first awarded this certificate in 1966. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized CAFR. The CAFR must satisfy both accounting principles generally accepted in the United States and applicable federal, state and local legal requirements. A Certificate of Achievement is valid for a period of one year. It is expected that the 2009 report conforms to Certificate of Achievement Program requirements. It will be submitted to the GFOA to determine its eligibility for another certificate. The preparation and publication of this report would not have been possible without the efficient work of the Finance staff, especially Clara Hilger, Assistant Finance Director. We would like to acknowledge all staff that contributed their efforts to the Finance operations in 2009. We would also like to thank the Mayor and City Council for their support in promoting and maintaining the highest standards of professionalism and management of the City of Brooklyn Center. Respectfully Submitted, Cornelius L. B ane 4n�ir t 9 Y City Manager Director of Fiscal & Support Services 5 CITY OF BROOKLYN CENTER, MINNESOTA PRINCIPAL OFFICIALS December 31, 2009 Name Position Term of Office Term Expires ELECTED OFFICIALS Tim Willson Mayor Four Years December 31, 2010 Kay Lasman Council Member Four Years December 31, 2012 Tim Roche Council Member Four Years December 31, 2012 Dan Ryan Council Member Four Years December 31, 2010 Mark Yelich Council Member Four Years December 31, 2010 APPOINTED OFFICIALS Cornelius L. Boganey City Manager Appointed Charles LeFevre City Attorney Contractual Appointee Sharon Knutson City Clerk Appointed Vickie Schleuning Assistant City Manager/Building and Community Standards Director Appointed Scott Bechthold Police Chief Appointed Steve Lillehaug Director of Public Works/City Engineer Appointed Lee Gatlin Fire Chief Appointed James Glasoe Community Activities, Recreation and Services Director Appointed Gary Eitel Business and Decvelopment Director Appointed Daniel Jordet Director of Fiscal and Support Services Appointed 6 City of Brooklyn Center Organization 2009 Electorate Cit C011nCll Advisory Commissions Administration Eity Attorney City Manager • Human Re sources/Payroll • Communications • Information Technology • Elections • Licenses • City Clerk Public Works Police Department Community Activities, Building and Community • Engineering • Patrol Recreation, and Services Standards • Street Maintenance • Investigation • Community Programs • Building Inspections • Sanitary Sewer • Crime Prevention • Recreation Programs • Code Enforcement • Central Garage • Community Programs • Community Center • Storm Sewer • Support Services • Government Buildings • Water Department • Golf Course • Park Maintenance • Earle Brown Heritage Center Fire Department Fiscal and Support Services Business and Development • Fire Prevention • Accounting • Economic Development • Fire Suppression • Audit • Housing & Redevelopment • Emergency Preparedness • Utility Billing Authority • Risk Management • Planning and Zoning • Liquor Stores • Assessing Certificate of Achievement for Excellence in Financial Reporting Presented to City of Brooklyn Center Minnesota For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 2008 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reposing. S. /4100� I 4 M S President *1� 4e-P AWX Executive Director ■ 8 1 PRINaPAIS Kenneth W. Hanby, CPA Thomas M. Montague, CPA 'nomas A. Karnomk -L CPA Paul A. Wosevich, CPA CERTIFIED PUBLIC Villiam J. Uum CPA A C C O U N T A N T S James H. Fichte[, CPA Aaron J. Nielsen, CPA , V iaoria I., 'Hofi4 -j, CPA INDEPENDENT AUDITOR'S REPORT ' To the City Council and Residents City of Brooklyn Center, Minnesota We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Brooklyn Center (the City) as of and for the year ended December 31, 2009, which collectively comprise the City's basic ' financial statements as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express opinions on these financial 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 applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles ' used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. ' In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City as of December 31, 2009, and the respective changes in financial position and cash flows, where applicable thereof, for the year then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated May 27, 2010 on ' our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, 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 or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. (continued) Malloy, Montague, Karnowski, Radosevich & Co., P.A. ' 5.153 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Telcpbone: 952- 545 -0424 • Tcicfaa::952 -545 -9569 - www.mmkr.com 9 The Management's Discussion and Analysis and required supplementary information, as listed in the table of contents, is not a required part of the basic financial statements, but is 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 measurement 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 fmancial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual fund statements and schedules, and statistical section, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund 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. May 27, 2010 i 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 ' Comprehensive Annual Financial Report (CAFR) this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2009. 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 CAFR. ' Financial Hiehliehts • The assets of the City exceeded liabilities by a 4.9 to 1 margin at the close of the most recent fiscal ' year. Current assets exceed current liabilities by an 8 to 1 margin. The $ 117,794,399 of net assets includes cash and investments, streets, buildings, equipment, land and other City assets. Of this amount, $ 13,762,927 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 $ 790,007 or 0.675% from 2008 to 2009. • As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $ 30,235,846. Of this total amount, $ 31,048,915, or 103% is designated or reserved through legal restrictions and City Council authorization. • At the end of the current fiscal year the general fund balance of $ 8,530,005 included $ 1,774 reserved for committed contracts, $ 25,719 reserved for inventories, $ 500 reserved for prepaid items, and ' $ 8,502,012 designated for cash flow purposes. • The City's total outstanding debt decreased by $ 4,140,000 during the current fiscal year, from $ 29,525,000 to $ 25,385,000. 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 include three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This CAFR 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 consolidated financial statement. The statement of net assets presents information on all of the City's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this ' statement for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused vacation leave). Both of the government -wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City include general government, public safety, public works, ' community services, recreation and economic development. The business -type activities of the City include water and sewer, street lighting, liquor operations, golf course, convention center, storm drainage and recycling. 11 Management's Discussion and Analysis The government -wide financial statements can be found on pages 21 through 23 of this CAFR- 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 ' spendable resource, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term financial requirements. Because the focus of governmental funds is narrower than that.of the government -wide financial statements, it ' is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statement. By doing so, readers may better understand the long -term impact of the City's near -term financial decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures, and changes in fund balances provide ' a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains nineteen individual governmental funds. Information is presented separately in the ' governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General fund, Tax Increment District No. 3 special revenue fund, the G.O. Improvement Bonds debt service fund, the Tax Increment Bonds debt service fund, and the Infrastructure Construction capital project fund, which are considered to be major funds. Data from the other governmental ' funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this CAFR. The basic governmental fund financial statements can be found on pages 26 through 33 of this CAFR. ' 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 similar information to the government -wide financial statements but in more detail. , The proprietary fund financial statements provide separate information for the municipal liquor, golf course, Earle Brown Heritage Center, water utility, sanitary sewer utility, and storm drainage utility 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 CAFR- 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 73 of this CAFR- Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information on budgetary compliance for its major funds. The City , 12 Management's Discussion and Analysis adopts an annual appropriated budget for its general, special revenue, debt service, and capital project funds. A budgetary comparison statement has been provided for the general and major special revenue fund to demonstrate compliance with this budget. These can be found on pages 75 through 80 of this CAFR. The combining statements referred to earlier in connection with nonmajor governmental funds, nonmajor enterprise funds, and internal service funds are presented immediately following the required supplementary information on budgetary comparisons. Combining and individual fund statements and schedules can be found on pages 84 through 124 of this CAFR. Government -wide Financial Analysis ' As noted earlier, net assets may serve over time as a useful indictor of a government's financial position. In the case of the City, assets exceeded liabilities by $ 117,794,399 at the close of the most recent fiscal year. ' The largest portion of the City's net assets ($ 75,003,481 or 64 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 2009 2008 2009 2008 2009 2008 ' Current and other assets $ 55,797,109 $ 57,191,433 $ 9,783,325 $ 11,315,279 $ 65,580,434 $ 68,506,712 Capital assets 40,296,371 39,386,221 42,297,110 42,572,362 82,593,481 81,958,583 Total assets 96,093,480 96,577,654 52,080,435 53,887,641 148,173,915 150,465,295 Long -term liabilities outstanding 22,312,824 26,500,403 - - 22,312,824 26,500,403 ' Other liabilities 7,119,011 6,112,138 947,681 848,362 8,066,692 6,960,500 Total liabilities 29,431,835 32,612,541 947,681 848,362 30,379,516 33,460,903 Net assets: Invested in capital assets, ' net of related debt 33,550,664 31,423,905 42,297,110 42,572,360 75,003,481 72,993,581 Restricted 29,027,991 31,850,784 29,027,991 31,850,784 Unrestricted 4,082,990 690,424 8,835,644 10,466,919 13,762,927 12,160,027 Total net assets $ 66,661,645 $ 63,965,113 $ 51,132,754 $ 53,039,279 $ 117,794,399 $ 117,004,392 ' As of the close of the current year, there is $ 844,293 in G.O. Improvement bond debt included in the Long- term liabilities outstanding reported in the Governmental Activities that was issued to finance capital assets ' reported in the Business -type Activities. This amount is not used to reduce Invested in capital assets net of related debt in the Governmental Activities. Neither does it reduce Invested in capital assets of the Business- type Activities. However, it does reduce the Invested in capital assets, net of related debt in the total column. 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 and taxes collected, and tax increments collected for qualified projects. The remaining balance of unrestricted net assets ($ 13,762,927) 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 was true for the prior fiscal year. Current assets decreased in the governmental activities primarily due to the additional costs to prepare redevelopment property for sale. In addition, the City postponed issuing debt to fund the 2009 construction ' projects. Funds on hand and interfund borrowing were used to pay for the projects until the debt is issued. 13 Management's Discussion and Analysis ' Capital assets increased due to new capitalized assets exceeding depreciation on existing assets for the year. , Total liabilities decreased due to the payment of principal and interest payments on bonded debt as scheduled. The decrease in restricted net assets can be attributed to costs associated with the acquisition of redevelopment property in excess of the estimated net realizable value of that property. Current assets in the business -type activities decreased due to the costs associated with the project to install auto -read meters in all properties on the City's water system. The cost of this project was approximately $ 2,300,000 in 2009. It is expected that these current assets will be replenished with the sale of utility revenue bonds early in the 2010 fiscal year. Total liabilities increased due to contracts payable for the relocation of a ' watermain. Unrestricted net assets decreased due to the cash payments for the auto -read meter project. Governmental Activities ' Governmental activities resulted in an increase of the City's net assets by $ 2,696,532, while the increase in total net assets was $ 790,007. Key elements of the changes are as follows: CITY'S CHANGES IN NET ASSETS , Governmental Activities Business -type Activities Total 2009 2008 2009 2008 2009 2008 Revenues:. t Program revenues: Charges for services $ 3,104,292 $ 2,801,121 $ 10,939,435 $ 11,037,648 $ 14,043,727 $ 13,838,769 Operating grants and contributions 1,034,905 1,003,884 - - 1,034,905 1,003,884 Capital grants and ' contributions 1,566,224 2,706,056 - 1,566,224 2,706,056 General revenues: Property taxes 12,899,250 12,458,724 - 12,899,250 12,458,724 Othertaxes 4,207,448 3,532,735 - 4,207,448 3,532,735 ' Grants and contributions not restricted to specific programs 1,019,990 607,073 - - 1,019,990 607,073 Unrestricted investment ' earnings 309,715 903,939 87,499 243,322 397,214 1,147,261 Gam on sale ofassets 40,632 73,036 - - 40,632 73,036 Total revenues 24,182,456 24,086,568 11,026,934 11,280,970 35,209,390 35,367,538 Expenses: ' General government 3,653,956 3,498,767 - - 3,653,956 3,498,767 Public safety 9,036,176 8,760,880 9,036,176 8,760,880 Public works 2,687,980 2,596,754 2,687,980 2,596,754 Community services 71,519 72,893 - 71,519 72,893 ' Parks and recreation 2,773,528 2,910,825 - - 2,773,528 2,910,825 Economic development 2,151,916 3,713,340 - 2,151,916 3,713,340 Interest on long -term debt 1,143,546 1,125,712 - - 1,143,546 1,125,712 Municipalliquor - - 1,249,946 1,125,517 1,249,946 1,125,517 Golfcourse 323,340 304,832 323,340 304,832 ' Earle Brown Heritage Center 2,363,085 2,403,676 2,363,085 2,403,676 Recycling and refuse 276,058 265,983 276,058 265,983 Street light utility - 220,020 182,402 220,020 182,402 Water utility - - 3,448,819 1,783,275 3,448,819 1,783,275 Sanitary sewer utility - - 3,736,989 3,018,418 3,736,989 3,018,418 Storm drainage utility - - 1,282,505 1,162,957 1,282,505 1,162,957 Totalexpenses 21,518,621 22,679,171 12,900,762 10,247,060 34,419,383 32,926,231 Increase in net assets , before transfers 2,663,835 1,407,397 (1,873,828) 1,033,910 790,007 2,441,307 Transfers 32,697 (1,693,225) (32,697) 1,693,225 Change in net assets 2,696,532 (285,828) (1,906,525) 2,727,135 790,007 2,441,307 Net assets - January 1 63,965,113 64,250,941 53,039,279 50,312,144 117,004,392 114,563,085 ' Net assets - December 31 $ 66,661,645 $ 63,965,113 $ 51,132,754 $ 53,039,279 $ 117,794,399 S 117,004,392 14 , i ' Management's Discussion and Analysis In the Governmental Activities, charges for services increased due to additional activities performed by public ' safety in the area of code enforcement and the registration of vacant properties within the City. Non-restricted grants and contributions increased due to an increase in the general aid received from the State. Unrestricted investment earnings decreased due to the sharp decline in rates earned on investments in 2009 in comparison to ' those earned in 2008 and in prior years. Public safety expenses increased due to the added activities performed in the area of code enforcement and the registration of vacant properties in the City. Economic development expenses decreased due to the purchase of a large parcel of property for redevelopment in 2008 compared to ' three smaller properties in 2009. Below are specific graphs which provide comparisons of the governmental activities revenues and expenses: Governmental Activities -2009 Revenues ' Other revenues ues 4 4.4% Unrestricted investment earnings Other taxes 1.3% 17.4% Charges for services 12.8% ' Operating grants and contribtutions 4.3% ' Capital grants and contributions Property taxes and tax 6.5% increments ' 53.3% ' Governmental Activities -2009 Expenses Economic development Interest on long-term ' 10.0% debt 5.3% Parks and recreatio 12.9% General government Community services 17.0% 0.3% Public works 12.5% ' Public safety 42.0% ' 15 i Management's Discussion and Analysis g Y it Business-type activities ' Business-type activities decreased net assets by $ 1,906,525. Below are graphs showing the business-type activities revenue and expense comparisons: Business-type Activities-2009 Revenues Unrestricted investment ' earnings 0.8% Net charges for services 99.2% Business-type Activities-2009 Expenses Storm drainage utility ' 9.9% on-major enterprise 3.9% unicipal liquor ' Sanitary sewerutility 9.7% 29.0% Golf course 2.5% ' arle Brown Heritage Center ' 18.3% Water utility 26.7% Water Utility and Sanitary Sewer Utility expenses increased due to the costs associated with the replacement of the water meters in 2009. ' 16 , Management's Discussion and Analysis ' Financial Analysis of the Government's Funds Governmental Funds. The focus of the City's governmental funds is to provide information on near -term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unreserved fund balance may serve as useful measure of a government's net resources available 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 $ 30,235,846. Approximately 29 % of this amount, $ 8,724,317, is reserved (restricted in its use) because it has already been committed to specific uses by outside influences or action of the City Council; 1) $ 4,258,770 to provide for debt service, 2) $ 792,488 for advances to other funds, 3) $ 734,675 for committed contracts, ' 4) $ 500 for prepaid items, 5) $ 25,719 for inventories, and 6) $ 2,912,165 for statutory housing obligation. The unreserved fund balance of $ 21,511,529 includes designations of 1) $ 8,502,012 for general fund working capital, 2) $ 9,237,685 for economic development, and 3) $ 4,584,901 for capital improvements. The remaining ' deficit balance of $ 813,069 is undesignated and unreserved. The general fund is the primary operating fund of the City. At the end of the current fiscal year, total fund balance reached $ 8,530,005, 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 55% of total general fund expenditures for 2009. The fund balance of the City's general fund increased by $ 786,567 in 2009. This increase was due to the ' budget amendment adopted by the City Council in April 2009 which reduced the budget in anticipation of reductions in intergovernmental aid provided by the State of Minnesota. The actual reductions in intergovernmental aid were smaller than anticipated. In addition, several positions were not filled in 2009 in ' anticipation of the reductions from the State. The Tax Increment District No. 3 fund had a total fund balance of $ 8,175,431 at the end of 2009. The net decrease in the fund balance was $ 2,706,701. This decrease was due to the expenditure of bond proceeds received in 2008 and expenditures for demolition and utility service relocation on properties purchased by the EDA and held for resale. The G.O. Improvement Bonds fund had a fund balance of $ 3,054,056 at the end of 2009, all of which was reserved for debt service. The net increase in fund balance for 2009 was $ 260,970, which was due to the collections of assessments exceeding the scheduled bond principal and interest payments. The Tax Increment Bonds Fund had a fund balance of $ 0 at the end of 2009. The net decrease in the fund balance for 2009 was $ 1,195,943. This decrease was due to principal and interest payments as programmed. The fund balance of the Infrastructure Construction fund at the end of 2009 had a deficit of $ 606,621. This ' represents a decrease from the 2008 deficit of $ 276,982. This reduction is due to the City postponing the issuance of improvement debt until 2010 to fund projects substantially complete in 2009. 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 - $ 1,953,304, ' golf course - $ (827,360), Earle Brown Heritage Center - $ 673,900, water utility - $ 1,734,532, sanitary sewer utility - $ 2,904,658 and storm drainage utility - $ 2,464,664. The increases (decreases) in net assets for the major enterprise funds were: municipal liquor $ 35,948, golf course $ (69,364), Earle Brown Heritage Center $ (801,806), water utility $ (1,109,707), sanitary sewer utility $ (384,06 1), and storm drainage utility $ 440,475. f General Fund Budeetary Hiehliehts During the year, the City Council reduced the appropriations in the General Fund budget by approximately $ 600,000. This amendment was made in anticipation of cuts in financial aids from the State in 2009. Actual 17 Management's Discussion and Analysis ' revenues and other financing sources exceeded the amended budget by $ 271,152. The major contributors to this were actual financial aids from the State exceeding the amended budget amount and an increase in charges for services in the area of code enforcement activities. Actual expenditures and other financing uses were lower than the amended budget for the year by $ 515,415. This resulted from several positions left unoccupied during 2009, lower than expected expenditures in the Fire Department, Street Maintenance department, and Protective ' Inspection, and a conscientious effort to reduce expenditures due to the cuts in state aid. It is anticipated that mid -term reductions of state financial aid that occurred in 2008 and 2009 will continue to occur during the foreseeable future. This will adversely affect the operations of the General Fund requiring ' reprioritization of General Fund programs and procedures. The City Council is, subsequent to the 2009 year end reports, preparing for further reductions in state financial aid for the 2010 fiscal year. Capital Asset and Debt Administration ' Capital assets. The City's investment in capital assets for governmental and business type activities as of December 31, 2009 totals $ 82,593,481 (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 from 2008 to 2009 was 0.8 percent (2.3 percent increase for governmental activities and a 0.1 percent decrease for business -type activities). Major capital asset events during the year included the following: 1 • Two major infrastructure reconstruction projects were completed during the year, with a final cost of , $ 5,312,659. • Two infrastructure reconstruction projects were begun and substantially completed during the 2009. These projects account for $ 6,990,169 in construction -in- progress at the end of the year. CITY'S CAPITAL ASSETS (net of depreciation) Governmental Activities Business -type Activities Total 2009 2008 2009 2008 2009 2008 Land $ 3,537,473 $ 3,537,473 $ 3,194,983 $ 3,194,983 $ 6,732,456 $ 6,732,456 Construction in progress 4,155,434 4,698,661 2,990,969 3,172,024 7,146,403 7,870,685 Land improvements - - 222,586 237,237 222,586 237,237 977 ' Other park improvements 874,595 ,549 - - 874,595 977,549 Buildings and structures 10,779,881 11,458,306 6,186,552 6,912,871 16,966,433 18,371,177 Departmental equipment 3,968,016 3,794,288 187,424 225,853 4,155,440 4,020,141 Streets 16,980,972 14,919,944 - - 16,980,972 14,919,944 Street light systems - - 77,974 83,540 77,974 83,540 Mains and lines - - 29,436,622 28,745,854 29,436,622 28,745,854 Total ' $ 40,296,371 $ 39,386,221 $ 42,297,110 $ 42,572,362 $ 82,593,481 $ 81,958,583 Additional information on the City's capital assets can be found in Note 4.C. on es 55 through 56 of this ' ty ap pages g CAFR Long -term debt. At the end of the current fiscal year, the City had long -term bonded debt outstanding of $ 25,385,000, all of which is backed by the full faith and credit of the government. Of the total outstanding debt, $ 2,665,000 is general obligation bonds payable from directly levied property tax, $ 17,795,000 is tax increment bonds payable with the collected proceeds of tax increment projects and $ 4,925,000 is improvement , bonds payable from special assessment levies against individual properties adjacent to the improvements. Additional long -term liabilities include $ 1,091,553 for compensated absences, the accumulated vacation and vested sick leave not used by employees at the end of 2009, and $ 290,426 for net OPEB obligation related to ' health insurance costs paid by and for retirees. 18 Management's Discussion and Analysis CITY'S OUTSTANDING DEBT General Obligation Bonds, General Obligation Tag Increment Bonds, General Obligation Improvement Bonds, Compensated Absences, and OPEB i Governmental Activities 2009 2008 General obligation bonds $ 2,665,000 $ 3,275,000 General obligation tax increment bonds 17,795,000 20,560,000 General obligation improvement bonds 4,925,000 5,690,000 Compensated absences 1,091,553 1,075,953 Net OPEB obligation 290,426 147,045 Total $ 26,766,979 $ 30,747,998 The City's total bonded debt decreased by $ 4,140,000 during the current fiscal year due to the net result of the scheduled payments of bond obligations. The City maintained an Al rating from Moody's on all issues throughout the 2009 fiscal year. State statutes limit the amount of general obligation debt a Minnesota city may issue to 3% of total Estimated ' Market Value. The current debt limitation for the City is $ 62,625,534. Only $ 1,460,286 of the City's net outstanding debt is counted within the statutory limitation representing about 2.3 percent 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 CAFR. Economic Factors and Next Year's Budget and Rates ' • The unemployment rate for the City is 8.6 percent at the end of the 2009 fiscal year, which is an increase from the rate of 7.6 percent a year ago. This compares to the State's average unemployment rate of 7.4 percent and the national average of 9.7 percent. • Redevelopment of the Opportunity Site /Central Business District and other commercial properties will yield net growth in tax base and stability in tax base through mixed use development goals. • Acquisition of strategic properties by the Economic Development Authority of the City will allow redevelopment of those properties to provide both tax base growth and job growth. • Utility rates have been projected into a rolling 15 year model to allow for funding of 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 2010 fiscal year. During the year, unreserved fund balance in the general fund increased by $ 786,567. 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 ensuing year's budgeted General Fund operations. Water, sanitary sewer, storm, and street light utility rates were increased for the 2009 budget year. Residential water rates were increased by 3.2 percent, sanitary sewer by 1.0 percent, storm drainage by 3.0 percent, recycling by 3.0 percent, and street lights by 2.2 percent. These increases were necessary to ensure that the municipal utilities be self - supporting through revenue, as required by the City charter. These rates along with ' future projected rate increases are reviewed annually to ensure compliance with the requirements of the charter. 19 Management's Discussion and Analysis Requests for information This financial report is designed to provide a general overview of the City's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Director of Fiscal and Support Services, ' City of Brooklyn Center, 6301 Shingle Creek Parkway, Brooklyn Center, Minnesota 55430. 20 CITY OF BROOKLYN CENTER, MINNESOTA STATEMENT OF NET ASSETS Statement 1 December 31, 2009 Governmental Business -Type ASSETS Activities Activities Total Cash and investments $ 36,427,894 $ 7,572,751 $ 44,000,645 Receivables: Accounts 297,714 1,929,987 2,227,701 Taxes 661,136 - 661,136 Special assessments 3,636,391 493,941 4,130,332 Internal balances 1,147,214 (1,147,214) - Due from other governments 951,025 2,607 953,632 Prepaid expenses 500 230,506 231,006 Inventories 52,706 700,747 753,453 Assets held for resale 12,534,529 - 12,534,529 Restricted assets: Cash and investments 88,000 - 88,000 Capital assets: Nondepreciable 7,692,907 6,185,952 13,878,859 Depreciable 32,603,464 36,111,158 68,714,622 Total assets 96,093,480 52,080,435 148,173,915 LIABILITIES Accounts payable 514,076 154,978 669,054 Accrued salaries and wages 437,003 74,872 511,875 Due to other governments 4,050 71,386 75,436 Contracts payable 1,151,809 273,056 1,424,865 Deposits payable 1,514 228,696 230,210 Accrued interest payable 460,810 - 460,810 Unearned revenue 7,594 144,693 152,287 Liabilities payable from restricted assets: Deposits payable 88,000 - 88,000 Compensated absences payable: Due within one year 109,155 = 109,155 Due in more than one year 982,398 982,398 Net OPEB obligation: Due in more than one year 290,426 - 290,426 Bonds payable: - Due within one year 4,345,000 4,345,000 Due in more than one year 21,040,000 - 21,040,000 Total liabilities 29,431,835 947,681 30,379,516 NET ASSETS Invested in capital assets, net of related debt 33,550,664 42,297,110 75,003,481 Restricted for: Debt service 6,971,845 - 6,971,845 Tax increment purposes 22,056,146 22,056,146 Unrestricted 4,082,990 8,835,644 13,762,927 Total net assets 66,661,645 51,132,754 117,794,399 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, 2009 Charges For FUNCTIONS/PROGRAMS Expenses Services Primary government: Government activities: General government $ 3,653,956 $ 1,102,360 Public safety 9,036,176 1,234,678 Public works 2,687,980 26,027 Community services 71,519 - Parks and recreation 2,773,528 740,782 Economic development 2,151,916 445 Interest on long -term debt 1,143,546 - Total government activities 21,518,621 3,104,292• Business -type activities: Municipal liquor 1,249,946 1,530,175 Golf course 323,340 249,402 Earle Brown Heritage Center 2,363,085 1,725,858 Recycling and refuse 276,058 267,316 Street light utility 220,020 253,754 Water utility 3,448,819 2,019,325 , Sanitary sewer utility 3,736,989 3,315,726 Storm drainage utility 1,282,505 1,577,879 Total business -type activities 12,900,762 10,939,435 Total primary government $ 34,419,383 $ 14,043,727 The accompanying notes are an integral part of these financial statements. 22 Statement 2 Program Revenues Net (Expense) Revenue and Changes in Net Assets Operating Capital Primary Government Grants and Grants and Governmental Business -Type Contributions Contributions Activities Activities Total $ 34,366 $ - $ (2,517,230) $ - $ (2,517,230) 883,593 - (6,917,905) - (6,917,905) 90,000 1,566,224 (1,005,729) - (1,005,729) - - (71,519) _ (71,519) 26,946 (2,005,800) (2,005,800) - - (2,151,471) - (2,151,471) (1,143,546) _ (1,143,546) 1,034,905 1,566,224 (15,813,200) (15,813,200) - - 280,229 280,229 (73,938) (73,938) - - - (637,227) (637,227) - - - (8,742) (8,742) - - - 33,734 33,734 (1,429,494) (1,429,494) - - - (421,263) (421,263) - - - 295,374 295,374 (1,961,327) (1,961,327) $ 1,034,905 $ 1,566,224 (15,813,200) (1,961,327) (17,774,527) General revenues: Property taxes 12,899,250 - 12,899,250 Tax increment - 3 616 157 s 3,616,157 , Lodging taxes 591,291 - 591,291 I Grants and contributions not restricted to specific programs 1,019,990 - 1,019,990 Unrestricted investment earnings 309,715 87,499 397,214 Gain on disposal of capital asset 40,632 40,632 Transfers 32,697 (32,697) - Total general revenues and transfers 18,509,732 54,802 18,564,534 Change in net assets 2,696,532 (1,906,525) 790,007 Net assets - beginning 63,965,113 53,039,279 117,004,392 Net assets - ending $ 66,661,645 $ 51,132,754 $ 117,794,399 The accompanying notes are an integral part of these financial statements. 23 i 1 i i I This page has been left blank intentionllV 24 ' FUND FINANCIAL STATEMENTS 25 CITY OF BROOKLYN CENTER, MINNESOTA BALANCE SBEET GOVERNMENTAL FUNDS December 31, 2009 Tax Increment General District No. 3 ASSETS Cash and investments $ 8,929,840 $ 8,199,441 ' Receivables: Accounts 74,045 - Current taxes 103,556 21,024 Delinquent taxes 409,492 41,730 Special assessments 3,884 - Due from other funds - _ Due from other governments 36,559 - Interfund receivable - Prepaid items 500 - Inventories 25,719 Advances to other funds _ _ Asset held for resale - 11,747,529 Restricted assets: Cash and investments- performance deposits 88,000 - ' Total assets 9,671,595 20,009,724 LIABILITIES AND FUND BALANCES ' Liabilities: Accounts payable 198,988 12,182 Accrued salaries and wages 412,086 - ' Due to other funds - _ Due to other governments 4,050 - Contracts payable 15,982 32,852 Deposits payable 1,514 - ' Interfund payable - _ Deferred revenue 420,970 11,789,259 Liabilities payable from restricted assets: , Deposits payable 88,000 - Total liabilities 1,141,590 11,834,293 Fund balances: ' Reserved: Advances to other funds - - Committed contracts 1,774 Debt service _ _ Inventories 25,719 - Prepaid items 500 - Statutory housing obligation - 2,912,165 ' Unreserved: Designated, reported in: General Fund 8,502,012 - Special Revenue Funds - 5,263,266 Capital Project Funds - - Undesignated, reported in: Special Revenue Funds - Capital Project Funds Total fund balances (deficit) 8,530,005 8,175,431 Total liabilities and fund balances $ 9,671,595 $ 20,009,724 The accompanying notes are an integral part of these financial statements. 26 Statement 3 Page 1 of 2 ' G.O. Improvement Infrastructure Other Nonmajor Total Bonds Construction Governmental Governmental $ 3,042,884 $ - $ 9,781,683 $ 29,953,848 ' - 3,561 166,072 243,678 58 10,198 134,836 14,264 - 60,814 526,300 3,128,515 503,992 - 3,636,391 ' _ 659,794 - 659,794 914,466 951,025 - - 331,615 331,615 - - - 500 25,719 - - 792,488 792,488 787,000 '12,534,529 _ _ - 88,000 6,185,721 1,167,347 12,844,336 49,878,723 ' - 83,023 51,860 346,053 12,553 424,639 - 8,674 595,685 604,359 - 4,050 ' = 949,526 153,449 1,151,809 1,514 - 231,615 100,000 331,615 ' 3,131,665 501,130 847,814 16,690,838 88,000 3,131,665 1,773,968 1,761,361 19,642,877 - - 792,488 792,488 - 342,512 390,389 734,675 3,054,056 1,204,714 4,258,770 _ - 25,719 ' - - = 500 2,912,165 - - - 8,502,012 3,974,419 9,237,685 - - 4,584,901 4,584,901 - - 161,871 161,871 (949,133) (25,807) (974,940) 3,054,056 (606,621) 11,082,975 30,235,846 $ 6,185,721 $ 1,167,347 $ 12,844,336 $ 49,878,723 27 CITY OF BROOKLYN CENTER, MINNESOTA BALANCE SHEET Statement 3 GOVERNMENTAL FUNDS Page 2 of 2 ' December 31, 2009 Fund balance - governmental funds is different from net assets - governmental activities because: Total fund balances (Statement 3) $ 30,235,846 Capital assets used in governmental activities are not financial resources, ' and therefore, are not reported in the funds. 36,339,892 Other long -term assets are not available to pay for current -period expenditures and, therefore, are deferred in the funds. 16,683,244 , Long -term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds. (25,845,810) ' Internal service funds are used by management to charge the cost of certain activities to individual funds. The assets and liabilities are included in the governmental statement of net assets. 9,248,473 Net assets of governmental activities (Statement 1) $ 66,661,645 The accompanying notes are an integral part of these financial statements. 28 r r r r r r r r r r r r r This page has been left blank mtentiona / / r r r r r r 29 CITY OF BROOKLYN CENTER, MINNESOTA r STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended December 31, 2009 Tax Increment r General District No. 3 REVENUES Property taxes $ 11,808,091 $ - Tax increments - 2,356,641 Franchise fees _ _ Lodging taxes 591,291 - Special assessments 4,762 - 1 Licenses and permits 616,135 - Intergovernmental 1,543,852 - Charges for services 1,109,171 - Fines and forfeits 340,536 - Investment earnings (net of market value adjustment) 55,864 79,097 Miscellaneous 118,471 250 Total revenues 16,188,173 2,435,988 , EXPENDITURES Current: ' General government 3,146,751 - Public safety 8,133,009 - Public works 1,988,835 - Community services 71,519 - Parks and recreation 2,344,073 - r Economic development 279,014 1,843,016 Nondepartmental 313,723 - Administrative services reimbursement (859,456) Capital outlay: General government _ _ Public works _ Parks and recreation _ _ Economic development - 806,619 Debt service: , Principal retirement _ _ Interest Fiscal agent fees Total expenditures 15,417,468 2,649,635 ' Revenues over (under) expenditures 770,705 (213,647) .OTHER FINANCING SOURCES (USES) ' Transfers in 100,000 - Transfers out (84,138) (2,493,054) Total other financing sources (uses) 15,862 (2,493,054) r Net increase (decrease) in fund balances 786,567 (2,706,701) Fund balances - January 1 7,743,438 10,882,132 ' Fund balances - December 31 $ 8,530,005 $ 8,175,431 r 1 The accompanying notes are an integral part of these financial statements. 30 r r r Statement 4 �r G.O. Improvement Tax Increment Infrastructure Other Nonmajor Total r Bonds Bonds - Construction - Governmental Governmental $ 299 $ $ $ 1,088,612 $ 12,897,002 1,245,106 3,601,747 r = = = 656,772 656,772 591,291 1,173,136 - 175,010 - 1,352,908 - _ _ - 616,135 1,245,155 2,789,007 11,170 1,120,341 _ _ _ - 340,536 23,234 401 - 88,664 247,260 r - - 48,504 203,283 370,508 1,196,669 401 223,514 4,538,762 24,583,507 r - 706,877 3,853,628 = = 319,339 8,452,348 43,966 122,731 2,155,532 71,519 118,202 2,462,275 409,032 2,531,062 313,723 - (859,456) ' = = - 113,516 113,516 509,187 1,356,689 1,865,876 _ _ 34,750 34,750 806,619 r 765,000 2,765,000 - 915,471 4,445,471 903 1,183,560 - 93 166,946 922,711 > r 10,102 1,687 - 3,381 15,170 942,048 3,689,398 553,153 4,193,891 27,445,593 254,621 (3,688,997) (329,639) 344,871 (2,862,086) r 6,349 2,493,054 - 1,032,610 3,632,013 _ _ = (504,619) (3,081,811) 6,349 2,493,054 527,991 550,202 260,970 (1,195,943) (329,639) 872,862 (2,311,884) r 2,793,086 1,195,943 (276,982) 10,210,113 32,547,730 $ 3,054,056 $ - $ (606,621) $ 11,082,975 $ 30,235,846 r r r 31 This page has been left blank intentionally. ' 32 , ' CITY OF BROOKLYN CENTER, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES Statement 5 IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2009 ' Amounts reported for governmental activities in the statement of activities are different because: Net changes in fund balances - total governmental funds (Statement 4) $ (2,311,884) 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. 708,856 Revenues in the statement of activities that do not provide current financial resources are not ' reported as revenues in the funds. 209,402 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 current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. This amount is the net effect of these differences in the treatment of long -term debt and related items. 4,140,000 Internal service funds are used by management to charge the cost of certain activities to individual funds. This amount is net revenue attributable to governmental activities. (105,026) 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. 55,184 Change in net assets of governmental activities (Statement 2) $ 2,696,532 ' 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, 2009 Major Municipal Golf Earle Brown , ASSETS Liquor Course Heritage Center Current assets: Cash and cash equivalents $ 1,424,765 $ - $ 767,014 Receivables: r Accounts - net 7,780 - 316,222 Special assessments _ _ - Due from other funds _ Due from other governments _ Interfund receivable _ Prepaid items 26,356 - 29,694 Inventories 635,115 1,773 29,879 Total current assets 2,094,016 1 773 1,142,809 Noncurrent assets: Capital assets: Land - 1,390,402 1,493,300 ' Land improvements - 65,637 327,830 Buildings and structures 192,771 487,946 11,380,717 Machinery and equipment 111,167 11,160 293,878 ' Street lights _ _ _ Mains and lines Construction in progress Less: Allowance for depreciation (282,090) (322,473) (7,516,844) Net capital assets 21,848 1,632,672 5,978,881 Total assets 2,115,864 1,634,445 7,121,690 LIABILITIES t Current liabilities: Accounts payable 60,429 882 40,321 ' Accrued salaries payable 21,151 2,341 27,448 Due to other funds _ _ - Due to other governments 53 - 16,123 Contracts payable 4,957 - 155,421 , Deposits payable - - 227,996 Interfund payable - 33,422 - Unearned revenue 837 - 1,600 Advances from other funds - 792,488 - Compensated absences payable - current _ _ _ Total current liabilities 140,712 829,133 468,909 Noncurrent liabilities: ' Compensated absences payable- long -term - - _ Net OPEB obligation Total noncurrent liabilities _ _ _ Total liabilities 140,712 829,133 468,909 ' NET ASSETS Invested in capital assets 21,848 1,632,672 5,978,881 Unrestricted 1,953,304 827,360 673,900 Total net assets ,975,152 805,312 6,652,781 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds ' Net assets of business -type activities The accompanying notes 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 Total Utility Utility Utility Enterprise Enterprise Service Proprietary ' $ 1,147,687 $ 1,972,466 $ 2,143,141 $ 117,678 $ 7,572,751 $ 6,474,046 $ 14,046,797 337,048 794,165 362,985 111,787 1,929,987 54,036 1,984,023 ' 492,148 1,562 231 - 493,941 - 493,941 8,674 8,674 8,674 2,607 - - 2,607 - 2,607 - - 14,337 - 14,337 33,422 47,759 ' 500 173,956 - - 230,506 - 230,506 - - - 00 747 26 987 727 33 980 7 , 734 2,022,644 2,942,149 2,520,694 229,465 10,953,550 6,588,491 17,542,041 20,734 3,389 287,158 - 3,194,983 - 3,194,983 ' - - _ = 393,467 166,108 559,575 2 3,033,212 ,705,423 17,800,069 17,800,069 128,668 179,130 724,003 7,773,250 8,497,253 - - - 83,540 83,540 - . 83,540 17,150,986 15,789,230 21,467,411 - 54,407,627 = 54,407,627 838,715 492,632 1,326,910 332,712 2,990,969 2,990,969 (12,269,982) (9,695,042) (7,205,551) (5,566) (37,297,548) (3,982,879) (41,280,427) 8,902,333 9,474,762 15,875,928 410,686 42,297,110 3,956,479 46,253,589 10,924,977 12,416,911 18,396,622 640,151 53,250,660 10,544,970 63,795,630 22,593 11,492 1,948 17,313 154,978 168,023 323,001 13,635 7,041 3,256 - 74,872 12,364 87,236 - 13,283 50,826 - 64,109 - 64,109 1,925 - _ - 71,386 - 71,386 107,003 5,675 273,056 273,056 700 - - - 228,696 - 228,696 - - - 14,337 47,759 - 47,759 142,256 = _ - 144,693 - 144,693 792,488 792,488 _ _ _ _ - 109,155 109,155 288,112 37,491 56,030 31,650 1,852,037 289,542 2,141,579 1 _ _ _ _ - 982,398 982,398 290,426 290,426 _ - - _ - 1,272,824 1,272,824 288,112 37,491 56,030 31,650 1,852,037 1,562,366 3,414,403 8,902,333 9,474,762 15,875,928 410,686 42,297,110 3,956,479 46,253,589 1,734,532 2,904,658 2,46404 197,815 9,101,513 5,026,125 14127,638 10,636,865 12,379,420 18,340,592 608,501 51,398,623 8,982,604 60,381,227 265,869 51,132,754 35 CITY OF BROOKLYN CENTER, MINNESOTA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS ' For the Year Ended December 31, 2009 r Major Municipal Golf Earle Brown ' Liquor Course Heritage Center OPERATING REVENUES Sales and user fees $ 5,610,108 $ 249,310 $ 3,542,077 Cost of sales 4,088,278 - 1,816,865 ' Total operating revenues 1,521,830 249,310 1,725,212 OPERATING EXPENSES Personal services 634,795 152,793 926,848 , Supplies 34,669 18,245 109,075 Other services 230,124 90,915 477,020 Insurance 10,336 7,045 47,949 Utilities 37,867 21,664 166,919 ' Rent 269,969 - - Depreciation 26,359 28,185 624,329 Total operating expenses 1,244,119 318,847 2,352,140 , Operating income (loss) 277,711 (69,537) (626,928) NONOPERATING REVENUES (EXPENSES) ' Intergovernmental - - - Investment earnings 15,382 81 10,960 Special assessments - - - Gain (loss) on sale of capital asset - - - Other revenue 8,345 92 646 Total nonoperating revenues (expenses) 23,727 173 11,606 Income (loss) before contributions and transfers 301,438 (69,364) (615,322) Capital contributions - - 113,516 Transfers in - - - Transfers out (265,490) - (300,000) Change in net assets 35,948 (69,364) (801,806) , Net assets - January 1 1,939,204 874,676 7,454,587 Net assets - December 31 $ 1,975,152 $ 805,312 $ 6,652,781 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Change in net assets of business -type activities (Statement 2) r 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 $ 1,974,100 $ 3,315,597 $ 1,577,679 $ 521,070 $ 16,789,941 $ 1,634,551 $ 18,424,492 5,905,143 5,905,143 1,974,100 3,315,597 1,577,679 521,070 10,884,798 1,634,551 12,519,349 421,975 161,746 66,003 - 2,364,160 752,222 3,116,382 161,552 8,606 10,351 900 343,398 363,153 706,551 2,091,891 2,967,463 341,103 314,905 6,513,421 131,942 6,645,363 17,908 4,674 2,193 2,467 92,572 44,679 137,251 149,040 33,106 - 172,240 580,836 1,394 582,230 - - 269,969 - 269,969 596,180 550,108 858,450 5,566 2,689,177 654,060 3,343,237 1 3,438,546 3,725,703 1,278,100 496,078 12,853,533 1,947,450 14,800,983 (1,464,446) (410,106) 299,579 24,992 (1,968,735) (312,899) (2,281,634) - - - - - 15,360 15,360 7,813 25,916 26,255 1,092 87,499 62,455 149,954 42,629 129 42,758 42,758 - - - - - 40,632 40,632 2,596 - 200 - 11,879 26,909 38,788 53,038 26 26,455 1,092 142,136 145,356 287,492 (1,411,408) (384,061) 326,034 26,084 (1,826,599) (167,543) (1,994,142) 301,701 - 114,441 3,135 532,793 - 532,793 - _ - - - 15,288 15,288 - - (565,490) - (565,490) (1,109,707) (384,061) 440,475 29,219 (1,859,296) (152,255) (2,011,551) 11,746,572 12,763,481 17,900,117 579,282 53,257,919 9,134,859 62,392,778 $ 10,636,865 $ 12,379,420 $ 18,340,592 $ 608,501 $ 8,982,604 $ 60,381,227 (47,229) $ (1,906,525) 37 CITY OF BROOKLYN CENTER, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2009 Major Municipal Golf Earle Brown CASH FLOWS FROM OPERATING ACTIVITIES Liquor Course Heritage Center Receipts from customers and users $ 5,610,431 $ 249,310 $ 3,487,966 Receipts from interfund services provided ' Payments to suppliers (4,764,896) (139,088) (2,660,963) Payments to employees (632,532) (152,462) (924,935) Miscellaneous revenue 8,345 92 646 Net cash flows provided (used) by operating activities 221,348 (42,148) (97,286) ' CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in _ Transfers out (265,490) - (300,000) Special assessments _ Interfund receivable 135,000 - - Interfund payable - 33,422 Net cash flows provided (used) by noncapital financing activities (130,490) 33,422 (300,000) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES 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 15,382 81 10,960 Net increase (decrease) in cash and cash equivalents 106,240 (8,645) (386,326) ' Cash and cash equivalents - January 1 1,318,525 8,645 1,153,340 Cash and cash equivalents - December 31 $ 1,424,765 $ - $ 767,014 ' Reconciliation of operating income to net cash provided (used) by operating activities: ' Operating income (loss) $ 277,711 $ (69,537) $ (626,928) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation 26,359 28,185 624,329 Changes in assets and liabilities: (Increase) decrease in receivables - - (54,111) (Increase) decrease in inventories (40,730) 224 1,352 (Increase) decrease in prepaid expenses (3,451) - (24,708) Increase (decrease) in payables (49,472) (1,443) (19,779) Increase (decrease) in accrued expenses 2,263 331 1,913 Increase (decrease) in deferred revenue 323 ' Other nonoperating income 8,345 92 646 Total adjustments (56,363) 27,389 529,642 Net cash flows provided (used) by operating activities $ 221,348 $ (42,148) $ (97,286) , Noncash financing activities: Capital contributions $ - $ - $ 113,516 ' Gain on sale of assets _ _ _ The accompanying notes are an integral part of these financial statements. 38 ' Statement 8 1 Business -Type Activities Governmental Enterprise Other Activities- ' Water Sanitary Sewer Storm Drainage Nonmajor Total Internal Total Utility Utility Utility Enterprise Enterprise Service Proprietary $ 2,160,704 $ 3,341,107 $ 1,579,528 $ 521,326 $ 16,950,372 $ - $ 16,950,372 1,596,923 1,596,923 (2,334,329) (3,011,707) (353,363) (487,719) (13,752,065) (405,560) (14,157,625) (421,914) (159,177) (64,796) - (2,355,816) (591,840) (2,947,656) ' 2,596 - 200 - 11,879 42,269 54,148 (592,943) 170,223 1,161,569 33,607 854,370 641,792 1,496,162 - - - - - 15,288 15,288 - - - (565,490) - (565,490) 110,659 390 - - 111,049 - 111,049 (8,674) - (9,983) - 116,343 (33,422) 82,921 13,283 50,826 9,983 107,514 107,514 101,985 13,673 40,843 9,983 (230,584) (18,134) (248,718) (437,423) (428,648) (1,015,061) - (1,881,132) (911,922) (2,793,054) - - - - - 97,200 97,200 (437,423) (428,648) (1,015,061) - (1,881,132) (814,722) (2,695,854) 7,813 25,916 26,255 1,092 87,499 62,455 149,954 (920,568) (218,836) 213,606 44,682 (1,169,847) (128,609) (1,298,456) 2,068,255 2,191,302 1,929,535 72,996 8,742,598 6,602,655 15,345,253 $ 1,147,687 $ 1,972,466 $ 2,143,141 $ 117,678 $ 7,572,751 $ 6,474,046 $ 14,046,797 $ (1,464,446) $ (410,106) $ 299,579 $ 24,992 $ (1,968,735) $ (312,899) $ (2,281,634) ' 596,180 550,108 858,450 5,566 2,689,177 654,060 3,343,237 153,716 25,510 1,849 256 127,220 (39,242) 87,978 (26,949) (66,103) (1,643) (67,746) - (10,229) - - (38,388) - (38,388) 113,011 12,371 284 2,793 57,765 137,251 195,016 61 2,569 1,207 - 8,344 161,996 170,340 32,888 33,211 33,211 2,596 - 200 - 11,879 42,269 54,148 871,503 580,329 861,990 8,615 2,823,105 954,691 3,777,796 $ (592,943) $ 170,223 $ 1,161,569 $ 33,607 $ 854,370 $ 641,792 $ 1,496,162 $ 301,701 $ - $ 114,441 $ 3,135 $ - - - - 40,632 39 1 i 1 1 1 1 This page has been left blank intentionally. , 40 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 The City of Brooklyn Center was incorporated in 1911 and has operated under a Council/Manager form of government since the adoption of the City charter in 1966. The governing body consists of a mayor and four City Council members elected at -large to serve four -year staggered terms. The City provides a full range of municipal services to its citizens, including public safety (police and fire protection), highways and streets, parks and recreation, public improvements, planning and inspections, economic development, sanitary and storm sewer, water, and general administrative services. Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the City have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), as applied to governmental units by the Governmental Accounting Standards Board (GASB). The City also applies Financial Accounting Standards Board (FASB) statements and interpretations issued prior to December 1, 1989 to its governmental and business -type activities at the government -wide financial reporting level and to its proprietary funds at the fund reporting level, provided they do not conflict with or contradict GASB pronouncements. The City's significant accounting policies are described below. A. REPORTING ENTITY The City includes all funds, organizations, institutions, agencies, departments, boards, and offices that are not legally separate from the City. Component units are legally separate organizations for which the elected officials of the City are financially accountable and are included within the basic financial statements of the City because of the significance of their operational or financial relationships with the City. The City is considered financially accountable for a component unit if it appoints a voting majority of the organization's governing body and is able to impose its will on the organization by significantly influencing the programs, projects, activities, or level of services performed or provided by the organization, or there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the City. Blended component units, although legally separate, are, in substance, part of the government's operations. A blended component unit is reported as if it were a fund of the City throughout the year. It is included at both the government -wide and fund financial reporting levels. A description of the City's blended component units follows: City of Brooklyn Center Housing and Redevelopment Authority (HRA) - The City Council serves as the Board of Directors for the HRA. The Council reviews and approves the tax levy and all expenditures for the HRA. The HRA is reported as a Special Revenue Fund. The HRA does not issue separate financial statements. Financial information may be obtained at the City's offices. City of Brooklyn Center Economic Development Authority (EDA) — The governing board for the EDA is the City Council. The council reviews and approves major community development improvement activities. City general obligation tax increment financing bonds are issued to finance EDA activities. The EDA is reported in the Economic Development Authority, Earle Brown TIF District, TIF District No. 3, TIF District No. 4, and the Community Development Block Grant Special Revenue Funds; the Tax Increment Bonds Debt Service Fund; the Earle Brown Heritage Center Improvements Capital Project Fund; and the Earle Brown Heritage Center Enterprise Fund. The EDA does not issue separate financial statements. Financial information may be obtained at the City's offices. 41 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS The government -wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report information on all activities of the primary government and its component units. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a ' specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or business -type activity and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or business -type activity. Taxes and other items not included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT , PRESENTATION The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of relaxed cash flows. Property taxes and special assessments are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers all revenues, except reimbursement grants, to be available if they are collected within 60 days of the end of the current fiscal period. Reimbursement grants are considered available if they are collected within one year of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to claims and judgments, are recorded only when payment is due. Property taxes, special assessments, intergovernmental revenues, charges for services and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government. 42 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION (Continued) The government reports the following major governmental funds: The General Fund is the government's primary operating fund. It accounts for all financial resources I of the g except eneral government, t those required to be accounted for in another fund. g q 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 Tax Increment Bonds Debt Service Fund is used to account for the payment of tax increment financing bonds. These bonds were sold to finance the purchase and redevelopment of various redevelopment projects within the City. The Infrastructure Construction Capital Project Fund was established to account for the resources and expenditures required for the acquisition and construction of capital facilities or improvements financed wholly or in part by special assessments levied against benefited properties. The government reports the following major 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 been 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 Iift stations. Sewage is treated by the Metropolitan Council Environmental Services whose fees represent about 52% of this fund's expenses. The Storm Drainage Utility Fund accounts for the collection and treatment of surface runoff water that does not require sanitary wastewater treatment. It incorporates not only the storm sewer collection system, but also structures such as holding ponds and facilities to improve water quality. Fees are based upon the quantity of water running off a property and vary with both size and absorption characteristics of the parcel. 43 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES , C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION (Continued) Additionally, the government reports the following fund type: Internal Service Funds account for compensated absences, health care insurance benefits and central garage services provided to other departments of the City on a cost reimbursement basis. As a general rule, the effect of interfund activity has been eliminated from the government -wide financial statements. Exceptions to this general rule are transactions that would be treated as revenues, expenditures or expenses if they involved external organizations, such as buying goods and services or payments in lieu of taxes. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the enterprise funds and internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. D. CASH AND INVESTMENTS The City considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. All of the cash and investments allocated to the proprietary funds have original maturities of 90 days or less. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 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 which 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 bonds, notes, bills, mortgages (excluding high -risk mortgage- backed securities), and other securities. b) State and local securities: 1) Any security which is a general obligation of any state or local government with taxing powers which is rated "A" or better by a national bond rating service. 2) Any security which is a revenue obligation of any state or local government with taxing powers which is rated "AA" or better by a national bond rating agency. 3) A general obligation of the Minnesota housing finance agency which is a moral obligation of the state of Minnesota and is rated "A" or better by a national bond rating agency. c) 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. d) Time deposits that are fully insured by the Federal Deposit Insurance Corporation or bankers acceptances of U.S. banks. e) Repurchase agreements and reverse repurchase agreements with financial institutions identified by Minnesota Statutes Chapter I I8A. f) Securities lending agreements may be entered into with financial institutions identified by Minnesota Statutes Chapter 118A. g) Minnesota joint powers investment trusts may be entered into with trusts identified by Minnesota Statutes Chapter 118A h) Money market mutual funds regulated by the Securities and Exchange Commission and whose portfolios consist only of short term securities permitted by Minnesota Statutes I I8A. i) Bonds of the City of Brooklyn Center issued in prior years, may be redeemed at current market price, which may include a premium, prior to maturing using surplus funds of the debt service fund set up for that issue. Investments are reported at fair value, based on quoted market prices as of the balance sheet date. Adjustments necessary to record investments at fair value are recorded in the operating statement as increases or decreases in investment earnings. Investment income on commingled funds is allocated monthly, based on month -end balances. E. RECEIVABLES AND PAYABLES During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. Short-term interfund loans are classified as " interfmd receivable /payable." All short- term interfund receivables and payables at December 31, 2009 are planned to be eliminated in 2010. Long- term interfund loans are classified as "advances to /from other funds." 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. 45 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES E. RECEIVABLES AND PAYABLES (Continued) All miscellaneous accounts receivable and trade receivables, other than utility, are presented net of an allowance for doubtful accounts. All utility trade receivables are reported at gross because it is the City's policy to certify delinquent account balances as special assessments. The City expects to make full collection of all property tax and special assessment receivables, so no allowance is considered necessary. Property tax levies are submitted to the County in December each year. The County allocates these levies across taxable properties in the City based on valuations certified in the prior year. The County collects these levies and distributes the City's proceeds in June and December of the fiscal year. These taxes are reported as general revenues in the government -wide financial statements in the year levied. Unpaid taxes at December 31 become liens on the respective property and are classified as delinquent receivables and are fully offset by deferred revenue in the fund financial statements. F. INVENTORIES AND PREPAID ITEMS Inventories in the governmental funds are reported using the consumption method and valued at cost, using the fast in/first out (FIFO) method. Inventories in the proprietary funds are valued at cost, using the weighted average method in the Municipal Liquor and Earle Brown Heritage Center Funds and the FIFO method in all other funds. 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 goverment as assets with an initial, individual cost in excess of the amounts in the table below and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Infrastructure $ 250,000 Buildings and Building Improvements 50,000 Land Improvements 25,000 Heavy Equipment 25,000 Furniture and furnishings 10,000 Motorized vehicles 10,000 Technology equipment 10,000 The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business -type activities is included as part of the capitalized value of the assets constructed. For the year ended December 31, 2009 no interest was capitalized in connection with construction in progress. 46 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES G. CAPITAL ASSETS (Continued) Capital assets of the City, as well as the component units, are depreciated using the straight line method over the following estimated useful lives: Land improvements 25 years Buildings and structures 25 years Water and sewer mains and lines, wells and storage tanks, sewer lift stations 25 years Infrastructure 25 years Street and traffic light systems 15 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 Employees Compensated Absences fund. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. In accordance with the provisions of Statement of Government Accounting Standards No. 16, Accounting for Compensated Absences, a liability is recognized for that portion of accumulating sick leave benefits that is vested, or expected to vest, as severance pay. I. LONG TERM OBLIGATIONS In the government -wide financial statements and proprietary fund types in the fund financial statements, long -term debt and other long -term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are immaterial and are expensed in the year of bond issuance. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. J. FUND EQUITY Fund equity in the fund financial statements is classified as fund balance for governmental funds and net assets for proprietary funds. Fund equity in the government -wide financial statements is classified as net assets for both governmental and business -type activities. Fund balance — Generally, fund balance represents the difference between current assets and current liabilities. The City reserves those portions of fund balance which are legally segregated for a specific future use or which do not represent available, spendable resources and are therefore not available for general appropriation or expenditure. Unreserved fund balance indicates that portion of fund balance that is available for appropriation in future periods. Designations are management's intent to set aside these resources for specific purposes. 47 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES J. FUND EQUITY (Continued) 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 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 Interfand services provided and used are accounted for as revenues and expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures /expenses in the reimbursing fund and as reductions of expenditures /expenses in the fund that is reimbursed. All other interfund transactions are reported as transfers. L. USE OF ESTIMATES The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from such estimates. M. NEW ACCOUNTING PRONOUNCEMENTS The Governmental Accounting Standards Board (GASB) recently approved the following statements which were not implemented in these financial statements. The effect of these standards may have on future financial statements has not been determined at this time. Statement No. 51, Accounts and Financial Reporting for Intangible Assets. This statement establishes accounting and financial reporting requirements for intangible assets including easements, water rights, timber rights, patents, trademarks and computer software. The provisions of this statement are effective for financial statements for periods beginning after June 15, 2009. Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. This statement establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds and clarifies the existing governmental fund type descriptions. The provisions of this statement are effective for periods beginning after June 20, 2010. 48 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 2 RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND BALANCE SHEET AND THE GOVERNMENT -WIDE STATEMENT OF NET ASSETS The governmental fund balance sheet includes a reconciliation between fund balance — total governmental funds and net assets — governmental activities as reported in the government -wide statement of net assets. One element of that reconciliation explains that "Long -term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds." The details of this $ 25,845,810 difference are as follows: Bonds payable $ 25,385,000 Accrued interest payable 460,810 Net adjustment to decrease fund balance - total governmental funds to arrive at net assets - governmental activities $ 25,845,810 Another element of that reconciliation explains that "Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and liabilities are included in the governmental statement of net assets." The details of this $ 9,248,473 difference are as follows: Net assets of internal service funds $ 8,982,604 Plus: Internal receivable representing charges in excess of cost to business -type activities -prior years 218,640 Plus: Internal reeivable representing charges in excess of cost to business -type activities - current year 47,229 Net adjustment to decrease fund balance -total governmental fund t arrive at net assets - governmental activities $ 9 248 473 s o ss s , g B. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES AND THE GOVERNMENT -WIDE STATEMENT OF ACTIVITIES The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances — total governmental funds and changes in net assets of governmental activities as reported in the government -wide statement of activities. One element of that reconciliation explains that "Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense." The details of this $ 708,856 difference are as follows: Capital outlay $ 2,820,761 Net transfers to proprietary funds (532,793) Depreciation expense (1,579,112) Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ 708,856 49 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 2 RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS B. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES AND THE GOVERNMENT -WIDE STATEMENT OF ACTIVITIES (Continued) Another element of that reconciliation states that "Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds." The details of this $ 209,402 difference are as follows: General property taxes deferred revenue: At December 31, 2008 $ (482,321) At December 31, 2009 484,569 Tax increment taxes deferred revenue: At December 31, 2008 (27,320) At December 31, 2009 41,730 Special assessments deferred revenue: At December 31, 2008 (4,158,572) At December 31, 2009 3,622,416 Other deferred revenues: At December 31, 2008 (11,805,629) At December 31, 2009 12,534,529 Net adjustments to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ 209,402 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 $ 4,140,000 difference are as follows: Principal repayments: General obligation bonds $ 610,000 General obligation improvement bonds 765,000 General obligation tax increment bonds 2,765,000 Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities $ 4,140,000 ' S 50 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 3 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY A. BUDGETARY INFORMATION Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States for all governmental funds, except for the Police Drug Forfeiture and Capital Reserve Emergency Funds. All annual appropriations lapse at fiscal year end. In August, the City Manager submits to the City Council proposed operating budgets for the fiscal year commencing the following January. The proposed general fund budget and preliminary tax levy must be certified to the County prior to September 15. The Council holds public hearings on the certified budget and levy and must submit a final levy to the County prior to the end of December. The appropriated budget is prepared by fund and department. The City Council must authorize any transfer of budgeted amounts between departments or funds. Transfers of budgeted amounts within departments in the General Fund must be authorized by the City Manager. The legal level of budgetary control is the department level for the General Fund and the fund level for all other governmental funds. There were no material supplemental budgetary appropriations during the year, however, reductions in appropriations were made by the City Council in April 2009 in anticipation of reductions in intergovernmental aids from the State of Minnesota. B. EXCESS OF EXPENDITURES OVER APPROPRIATIONS For the year ended December 31, 2009 expenditures exceeded appropriations in the following General Fund departments and special revenue funds: Final Over Budget Actual Budget Major Funds: General Fund: Administrative $ 689,302 $ 693,183 $ (3,881) Finance 405,138 409,973 (4,835) Legal 375,000 388,772 (13,772) Government buildings 765,071 826,719 (61,648) Police protection 6,425,868 6,508,142 (82,274) Engineering 570,916 628,581 (57,665) Social services 70,819 71,519 (700) Parks and recreation administration 186,293 193,260 (6,967) Recreation programs 691,161 705,671 (14,510) Special Revenue Funds: Tax Increment District No.3 235,000 2,649,635 (2,414,635) Debt Service Funds: G.O. Improvement Bonds 891,452 942,048 (50,596) t 51 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 3 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY B. EXCESS OF EXPENDITURES OVER APPROPRIATIONS Continued Final Over Budget Actual Budget Nonmajor Funds: Special Revenue Funds: Economic Development Authority 363,367 396,658 (33,291) ' Tax Increment District No.4 286,484 308,204 (21,720) Debt Service Funds: General Obligation Bonds 705,403 707,284 (1,881) Capital Project Funds: Capital Improvements 390,000 491,479 (101,479) Municipal State Aid for Construction 125,400 830,058 (704,658) C. DEFICIT FUND EQUITY r Deficit fund equity exists at December 31, 2009 in the following funds: Unreserved deficit fund balance Major Funds: Infrastructure Construction $ 949,133 Nonmajor Funds : Capital Improvements 25,807 Unrestricted deficit net assets Major Funds: Golf Course 827,360 The deficits are being funded through internal borrowing and will be repaid from construction transfers , from utility funds, future bond issuance, investment earnings, and internal transfers. Note 4 DETAILED NOTES ON ALL FUNDS A. DEPOSITS AND INVESTMENTS In accordance with Minnesota Statutes, the City maintains deposits at only those depository banks authorized by the City Council. All such depositories are members of the Federal Reserve System. Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds. Authorized collateral includes the legal investments described in Note 1.D., as well as certain first mortgage notes, and certain other state or local government obligations. Minnesota Statutes require that securities pledged as collateral be placed in safekeeping in a restricted account at the Federal Reserve bank, or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial institution furnishing the collateral. 52 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 4 DETAILED NOTES ON ALL FUNDS A. DEPOSITS AND INVESTMENTS (Continued) At year -end, the City's carrying value amount of deposits was $ (284,397) composed of bank balances of $ 0. As of December 31, 2009 the City had the following investments and maturities: Investment Maturities Less than No Investment Type Rating Fair Value 1 year 1 -5 maturity Federal Home Loan Bank Notes AAA $ 3,522,267 $ - $ 3,522,267 $ Negotiable Certificates of Deposit N/A 1,872,752 1,771,518 101,234 Bdemal investment pool -4M Fund N/A 29,152,042 - - 29,152,042 Money market AAA 9,812,446 - - 9,812,446 Total investments 44,359,507 $ 1,771,518 $ 3,623,501 $38,964,488 Deposits (284,397) Petty cash and change funds 13,535 Total cash and investments $44,088,645 Reconciliation to Statement of Net Assets (Statement 1): Cash, cash equivalents, and investments 44,000,645 Restricted cash and investments 88,000 Total cash and investments $44,088,645 N/A - not rated Interest rate risk — The City's investment policy requires interest earnings remain stable and predictable through at least the neat budget cycle and that at least 50% of the investment portfolio remain for two or more years with known interest rates. The policy also states that the portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably expected. Credit risk — The City's investment policy restricts investment instruments to those authorized by Minnesota Statutes § 118A. The policy also requires that any counterparty in investment transactions be pre - qualified and approved by the City Council and that the portfolio be diversified to limit potential losses on individual securities. As of December 31, 2009 the City's investment in FHLB notes were all rated AAA by Moody's Investor Service. The City's external investment pool is with 4M which is regulated by Minnesota Statutes and the Board of Directors of the League of 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. 53 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 4 DETAILED NOTES ON ALL FUNDS A. DEPOSITS AND INVESTMENTS (Continued) Concentration of credit risk - The City's investment policy requires that the investment portfolio be diversified to minimize potential losses on individual securities. Custodial credit risk - The City's investment 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. B. RECEIVABLES Significant receivable balances not expected to be collected within one year of December 31, 2009 are as follows: MaiorFunds Taxlncrement G.O. Sanitary Storm District Improvement Infrastructure Water Sewer Drainage Nonmajor General No.3 Bonds Construction Utility Utility Utility Funds Total Delinquent property taxes $ 102,375 S - $ 3,570 S $ $ $ $ 15,210 S 121,155 Delinquent tax increments - 10,435 - 10,435 Special assessments 221 2,628,647 428,681 140,760 1,302 231 3,199,842 $ 102 596 S 10,435 $ 2 632217 $ 428,681 S 140,760 $ 1,302 S 231 $ 15,210 $ 3,331,432 Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows: Unavailable Unearned Totals Delinquent property taxes receivable (General Fund) $ 409,492 $ - $ 409,492 Delinquent property taxes receivable (G. 0. Improvement Bonds) 14,264 - 14,264 Delinquent property taxes receivable (Nonmajor Funds) 60,814 - 60,814 Delinquent tax increment receivable (Tax Increment District No. 3) 41,730 - 41,730 Special assessments not yet due (General Fund) 3,884 - 3,884 Special assessments not yet due (G. 0. Improvement Bonds) 3,117,401 - 3,117,401 Special assessments not yet due (Infrastructure Construction) 501,130 - 501,130 .Fees received but unearned (General Fund) - 7,594 7,594 Assets held for resale (Tax Increment District No. 3) 11,747,529 - 11,747,529 Assets held for resale (Nonmajor Funds) 787,000 - 787,000 Total deferred /uneamed revenue for governmental funds 16,683,244 $ 7,594 $ 16,690 The City has leased a portion of the police second floor expansion area to the Local Government Information Systems Association (LOGIS) as a backup computer facility. The lease has a term of six years, commencing on August 1, 2005, and calls for monthly lease payments based on the square- footage. Lease revenue for the year ended December 31, 2009 was $ 9,071. Future minimum lease payments are as $ 9,091 annually for 2010 and $ 5,303 for 2011. 54 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 4 DETAILED NOTES ON ALL FUNDS (Continued) C. CAPITAL ASSETS Capital asset activity for the year ended December 31, 2009 was as follows: Beginning Ending Balance Increases Decreases Balance Governmental activities: Capital assets, not being depreciated: Land $ 3,537,473 $ $ - $ 3,537,473 Construction in progress 4,698,661 2,287,968 (2,831,195) 4,155,434 Total capital assets, not being depreciated 8,236,134 2,287,968 (2,831,195) 7,692,907 Capital assets, being depreciated: Buildings and improvements 19,410,596 - 19,410,596 Park improvements 4,498,492 (85,551) 4,412,941 Departmental equipment 7,811,865 935,168 (550,648) 8,196,385 Streets 25,187,639 2,831,195 - 28,018,834 Total capital ass ets,being depreciated 56,908,592 3,766,363 (636,199) 60,038,756 Less accumulated depreciation for: - Buildings and improvements 7,952,290 678,425 8,630,715 Park improvements 3,520,943 102,954 (85,551) 3,538,346 Departmental equipment 4,017,577 704,872 (494,080) 4,228,369 Streets 10,267,695 770,167 - 11,037,862 Total accumulated depreciation 25,758,505 2,256,418 (579,631) 27,435,292 Total capital assets being depreciated - net 31,150,087 1,509,945 (56,568) 32,603,464 Governmental activities capital assets -net $ 39,386,221 $ 3,797,913 $ (2,887,763) $ 40296,371 Beginning Ending Balance Increases Decreases Balance Business -type activities: Capital assets, not being depreciated: Land $ 3,194,983 $ - $ - $ 3,194,983 Construction in progress 3,172,024 2,300,409 (2,481,464) 2,990,969 Total capital assets, not being depreciated 6,367,007 2,300,409 (2,481,464) 6,185,952 Capital assets, being depreciated: Land improvements 393,467 - 393,467 Buildings and improvements 17,686,553 113,516 17,800,069 Department equipment 724,003 724,003 Street light systems 83,540 - - 83,540 Mains and lines 51,926,163 2,481,464 - 54,407,627 Total capital assets, being depreciated 70,813,726 2,594,980 - 73,408,706 Less accumulated depreciation for. Land improvements 156,230 14,651 - 170,881 Buildings and improvements 10,773,682 839,835 - 11,613,517 Department equipment 498,150 38,429 - 536,579 Street light systems 5,566 5,566 Mains and lines 23,180,309 1,790,696 - 24,971,005 Total accumulated depreciation 34,608,371 2,689,177 - 37,297,548 Total capital assets being depreciated -net 36,205,355 (94,197) 36,111,158 Business -type activities capital assets -net S 42 $ 2,206,212 $ (2,481,464) $ 42,297,110 55 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 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 $ 91,559 Public safety 386,350 Public works 864,357 Parks and recreation 260,092 Capital assets held by the governments internal service funds are charged to the various functions based on their usage of the assets 654,060 Total depreciation expense - governmental activities $ 2,256,418 Business -type activities: ' Municipal liquor $ 26,359 Go if course 28,185 Earle Brown Heritage Center 624,329 Water utility 596,180 Sanitary sewer utility 550,108 Storm drainage utility 858,450 Street light utility 5,566 Total depreciation expense - business -type activities $ 2,689,177 CONSTRUCTION COMMITMENTS At December 31, 2009 the City had construction project contracts in progress. The commitments related to remaining contract balances are summarized as follows: Contract Remaining Project Responsible Fund Amount Commitment Trail rehabilitation General Fund $ 24,566 $ 1,774 Xems Avenue and Northway Drive Infrastructure Construction 2,303,330 82,527 Aldrich Neighborhood Infrastructure Construction 2,491,467 36,862 Shingle Creek/69th Ave Improvements Infrastructure Construction 814,158 223,123 Central Park Trails Nonrnajor Capital Projects Fund 139,717 118,386 Capital building maintenance for 2009 Nonmajor Capital Projects Fund 202,900 150,694 Telephone and voicemail system Nonmajor Capital Projects Fund 223,200- 121,309 Total governmental funds 6,199,338 734,675 CenterbrookWatermain Water Utility Fund 109,036 2,033 Total all funds $ 6,308,374 $ 736,708 56 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 4 DETAILED NOTES ON ALL FUNDS (Continued) D. INTERFUND BALANCES AND TRANSFERS Individual fund interfund receivable and payable balances at December 31, 2009 are as follows: Due from Due to Fund. Other Funds Other Funds Major Funds: Infrastructure Construction $ 659,794 $ 8,674 Water Utility 8,674 Sanitary Sewer Utility - 13,283 Storm Drainage Utility - 50,826 Nonmajor Funds: Street Reconstruction - 595,685 Total $ 668,468 $ 668,468 The $ 668,468 between these funds is expected to be eliminated within one year of December 31, 2009. Advances to Advances From Fund Other Funds Other Funds Major Funds: Golf Course $ - $ 792,488 Nonmajor Funds: Capital Improvements 792,488 - $ 792,488 $ 792,488 The $792,488 advance between the Golf Course and Capital Improvements funds is not expected to be eliminated within one year of December 31, 2009. Interfund Interfund Fund Receivable Payable Major Funds: Infrastructure Construction $ $ 231,615 Golf Course 33,422 Storm Drainage Utility 14,337 - Nonmajor Funds: Economic Development Authority 100,000 - Community Development Block Grant - 100,000 Street Reconstruction 231,615 Recycling and Refuse 14,337 Central Garage 33,422 $ 379,374 $ 379,374 57 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 4 DETAILED NOTES ON ALL FUNDS D. INTERFUND BALANCES AND TRANSFERS (Continued) Interfund payables /receivables are representative of lending/borrowing arrangements to cover deficit cash balances at the end of the fiscal year. Balance will be paid with transfers from other funds, collections of outstanding receivables, and the issuance of bonds to finance completed infrastructure projects. Interfund transfers: Transfer In Transfer Out Governmental Funds: Major Funds: General $ 100,000 $ 84,138 Tax Increment District No. 3 - 2,493,054 GO Improvement Bonds 6,349 - TaxIncrement Bonds 2,493,054 - Nonmajor Funds: Housing and Redevelopment Authority - 382,325 Economic Development Authority 382,325 657 Earle Brown Tax Increment District 657 - Community Development Block Grant - 100,000 City Initiatives Grant 5,000 15,288 Capital Improvements 274,628 - Earle Brown Heritage Center Improvements 300,000 - Street Reconstruction - 6,349 Technology 70,000 - Total govenmental funds 3,632,013 3,081,811 Proprietary Funds: Major Funds: Municipal Liquor - 265,490 Earle Brown Heritage Center - 300,000 Nonmajor Funds: Central Garage 15,288 - Total proprietary funds 15,288 565,490 Total all funds $ 3,647,301 $ 3,647,301 , Governmental Business -Type Activities Activities I Reconciliation to Government -Wide Statement of Activities: Net Transfers - Fund Statements $ 550,202 $ (550,202) Internal Service Fund Transfer 15,288 (15,288) Capital Asset Transfers (532,793) 532,793 Total Transfers - Government -Wide Statement of Activities $ 32,697 $ (32,697) 58 ' CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 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 2009, the transfer from the General fund to the City Initiatives Grant fund is to provide the funding authorized by the City Council for the Centennial Celebration to be held in 2011. Transfers from the Tax Increment District No. 3 fund to the Tax Increment Bonds fund were made to pay the 2009 debt service requirements for the bonds. The transfer from the Community Development Block Grant fund to the General fund was made to transfer federal grant money received to pay for housing inspection and code enforcement costs. E. OPERATING LEASES The City leases space for its municipal liquor stores. The leases are ten -year leases and began in 2000 and 2003, and have options for a ten -year extension. In January 2009, the City amended the lease that began in ' 2000 to include additional space to be used for warehouse storage. 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 year ended December 31, 2009 was $ 269,969. Future minimum base rent payments under the current agreements are as follows: Total Year Minimum Ending Rents 2010 $ 144,041 2011 93,360 2012 93,360 2013 93,360 ' F. LONG -TERM DEBT $ 424,121 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. i 1 59 1 CITY OF BROOKLYN CENTER, MINNESOTA 1 NOTES TO FINANCIAL STATEMENTS December 31, 2009 1 Note 4 DETAILED NOTES ON ALL FUNDS F. LONG -TERM DEBT (Continued) As of December 31, 2009 the long -term debt of the financial reporting entity consisted of the following: 1 GOVERNMENTAL ACTIVITIES Final 1 Interest Maturity Original Payable Rates Date Date Issue 12/31/09 General Obligation Bonds: Police and Fire Budding Refunding Bonds 2.00%- 3.35% 12/01/2004 02/01/2013 $ 5,045,000 $ 2,665,000 Total General Obligation Bonds 5,045,000 2,665,000 1 G.O. Tax Increment Bonds: Taxable Tax Increment Refunding Bonds of 2004 2.25 % -4.40% 12101/2004 02/01/2011 2,470,000 820,000 Taxable Tax Increment Bondsof2004 4.75 % - 5.125% 12/01/2004 02/01/2020 17,245,000 14,310,000 Taxable Taxlncrement Bonds of2008 3.00% -5.30% 05/01/2008 02/01/2018 4,335,000 2,665,000 1 Total G.O. Tax Increment Bonds 24,050,000 17,795,000 G.O. Improvement Bonds: 1999 Improvement Bonds 4.10% -5.00% 12/01/1999 02/01/2010 1,585,000 150,000 1 2000 Improvement Bonds 4.30 % -4.95% 12101/2000 02/01 /2011 735,000 130,000 2001 Improvement Bonds 2.60 % - 4.40 12/01/2001 02/01/2012 730,000 195,000 2003 Improvement Bonds 1.45 % -4.00% 01/01/2003 02/01/2013 1,205,000 440,000 2004 Improvement Bonds 2.10 % -3.65% 12101/2004 02/01/2015 1,010,000 570,000 1 2006 Improvement Bonds 3.55 %- 3.80°%o 12101/2006 02/01/2017 1,460,000 1,050,000 2008 Improvement Bonds 3.25 %4.25% 12/15/2008 02/01/2019 2,390,000 2,390,000 Total G.O. Improvement Bonds 9,115,000 4,925,000 Total - bonded indebtedness $ 38,210,000 25,385,000 1 Other liabilities: Compensated absences payable 1,091,553 1 Net OPEB obligation 290,426 Total - other liabilities 1,381,979 Total City indebtedness - governmental activities $ 26,766,979 1 All long -term bonded indebtedness outstanding at December 31, 2009 is backed by the full faith and credit of the City, including improvement and tax increment bond issues. Bonds in the governmental activities will be retired by future property tax levies, tax increments or special assessments accumulated in the specific debt services funds. In the event that a deficiency exists because of unpaid or delinquent tax increments or special assessments at the time a debt service payment is due, the City must provide resources to cover the deficiency until other resources are available. Delinquent tax increments in the 1 governmental funds at December 31, 2009 were $ 41,730; delinquent special assessments in the governmental funds at December 31, 2009 were $ 62,180, which is included in the special assessments receivable balance of $ 3,636,391. i 1 60 CITY OF BROOKLYN CENTER, MINNESOTA ' NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 4 DETAILED NOTES ON ALL FUNDS F. LONG -TERM DEBT ' GOVERNMENTAL ACTIVITIES (Continued) The G.O. Improvement Bonds were issued to finance the construction and replacement of street and storm drainage capital assets. Of the $ 4,925,000 outstanding at December 31, 2009 the amounts applicable to street and storm capital assets is $ 4,080,707 and $ 844,293, respectively. ' Annual debt service requirements to maturity for long -term debt are as follows: Govern mental Activities Year Ending General Obligation Bonds G.O. TaxIncretnent Bonds GO. Improvement Bonds December 31 Principal Interest Principal Interest Principal Interest 2010 $ 640,000 $ 75,153 $ 2,785,000 $ 783,961 $ 920,000 $ 167,686 2011 640,000 55,632 1,290,000 702,530 745,000 136,890 ' 2012 685,000 34,581 925,000 651,744 670,000 111,460 2013 700,000 11,725 1,365,000 598,107 590,000 88,869 2014 - - 1,430,000 532,100 475,000 69,427 ' 2015 -2019 - - 8,200,000 1,520,920 1,525,000 124,432 2020 1,800,000 46,125 Total $ 2,665,000 $ 177,091 $ 17,795,000 $ 4,835,487 $ 4,925,000 $ 698,764 CHANGE IN LONG -TERM LIABILITIES Long -term liability activity for the year ended December 31, 2009 was as follows: ' Beginning Ending Due Within Balance Additions Reductions Balance One Year Governmental activities: ' Bonds payable: - General obligation bonds $ 3,275,000 $ $ (610,000) $ 2,665,000 $ 640,000 G.O. tax increment bonds 20,560,000 (2,765,000) 17,795,000 2,785,000 G.O. improvement bonds 5,690,000 - (765,000) 4,925,000 920,000 ' Total bonds payable 29,525,000 - (4,140,000) 25,385,000 4,345,000 Compensated absences 1,075,953 79,999 (64,399) 1,091,553 109,155 Net OPEB obligation 147,045 311,623 (168,242) 290,426 Total government activity ' long -term liabilities $ 30,747,998 $ 391,622 $ (4,372,641) $ 26,766,979 $ 4,454,155 Compensated absences are liquidated by the Public Employees Compensated Absences Fund. 61 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 4 DETAILED NOTES ON ALL FUNDS F. LONG -TERM DEBT (Continued) CONDUIT DEBT OBLIGATIONS ' From time to time, the City has issued Housing Revenue Bonds and Industrial Revenue Bonds or Notes to provide assistance to qualified private sector entities for the acquisition and construction of housing, industrial, or commercial facilities deemed to be in the public interest. The bonds or notes are secured by ' the property financed and are payable solely from payments received on the underlying mortgage loans. The City has no obligation of its assets or of its general tax base for the repayment of any of these bonds or notes. Accordingly, the bonds or notes are not reported as liabilities in the accompanying financial ' statements. Upon final redemption of the bonds or notes, ownership of the property transfers to the private sector entity served by the bond or note issue. As of December 31, 2009 there were two series of fixed rate Multifamily Housing Revenue Refunding ' bonds, one Housing Revenue Development Refinancing Note, one series of Variable Rate Demand Refunding Industrial Revenue Bonds, two Healthcare Revenue Notes, and four Senior Housing Development Revenue Notes outstanding. The aggregate amount of conduit debt obligations at December 31, 2009 is $ 29,636,665. ' G. FUND EQUITY Net assets reported in the government -wide statement of net assets at December 31, 2009 include the ' following: Governmental activities ' Invested in capital assets, net of related debt: Land $ 3,537,473 , Construction in progress 4,155,434 Other capital assets, net of depreciation 32,603,464 Less: related long -term debt outstanding (6,745,707) Total invested in capital assets, net of related debt 33,550,664 ' Restricted: Debt service 6,971,845 , Taxincrement purposes 22,056,146 Total restricted 29,027,991 Unrestricted 4,082,990 ' Total governmental activities net assets $ 66,661,645 Related debt for governmental activities capital assets includes $ 2,665,000 in General Obligation Bonds and $ 4,080,707 in G.O. Improvement Bonds, the amount issued to finance the street portion of construction projects. The remaining $ 844,293 of the G.O. Improvement Bonds outstanding was issued to ' finance the storm drainage portion of construction projects. 62 CITY OF BROOKLYN CENTER, MINNESOTA ' NOTES TO FINANCIAL STATEMENTS December 31, 2009 ' Note 4 DETAILED NOTES ON ALL FUNDS G. FUND EQUITY (Continued) r Business -type activities Invested in capital assets: Land $ 3,194,983 Construction in progress 2,990,969 Other capital assets, net of depreciation 36,111,158 ' Total invested in capital assets 42,297,110 Unrestricted 8,835,644 ' Total business -type activities net assets $ 51,132,754 ' Governmental fund balances reported on the fund financial statements as of December 31, 2009 include the following: Reserved Major Funds: General: Committed contracts $ 1,774 ' Inventories 25,719 Prepaid items 500 Tax Increment District No. 3: ' Statutory housing obligation 2,912,165 G. O. Improvement Bonds: Debt service 3,054,056 ' Infrastructue Construction: Committed contracts 342,512 Nonmajor Funds: Advances to other funds 792,488 ' Committed contracts 390,389 Debt service 1,204,714 ' Total $ 8,724,317 r 63 CITY OF BROOKLYN CENTER, MINNESOTA t NOTES TO FINANCIAL STATEMENTS December 31, 2009 ' Note 4 DETAILED NOTES ON ALL FUNDS , G. FUND EQUITY (Continued) Unreserved, designated Major Funds: General: Working capital $ 8,502,012 Taxlncrement District No. 3: Economic development 5,263,266 Nonmajor Funds: Economic development 3,974,419 ' Capital improvements 4,584,901 Total $ 22,324,598 ' Unreserved, Undes ignated (deficit) Major Funds: Capital Project $ (949,133) , Nonmajor Funds: Special Revenue 161,871 Capital Project (25,807) ' Total $ (813,069) Note 5 OTHER INFORMATION ' A. RISK MANAGEMENT ' The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions and natural disasters. Property and casualty insurance is provided through the League of Minnesota Cities Insurance Trust , (LMCIT), a public entity risk pool currently operating as a common risk management and insurance program for Minnesota cities: general liability, property, automobile, mobile property and marine, crime, employee dishonesty, boiler, and open meeting law. The City pays an annual insurance premium to the ' LMCIT for its insurance coverage. The City is subject to supplemental assessments if deemed necessary by the LMCIT. Currently, the LMCIT is self - sustaining through member premiums and reinsures through commercial companies for claims in excess of various amounts. The City retains risk for the deductible portions of the insurance policies. The amount of these deductibles is considered immaterial to the ' financial statements. Workers' compensation coverage is provided through a pooled self - insurance program through the LMCIT. ' The City pays an annual premium to the LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through Workers' Compensation Reinsurance Association (WRCA) as required by law. For workers' compensation, the City is not subject to a deductible. The City's workers' compensation is retroactively rated. With this type of coverage, final premiums are determined after loss experience is known. The amount of premium adjustment, if any, is considered immaterial and not recorded until received or P aid. 64 , CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 5 OTHER INFORMATION A. RISK MANAGEMENT (Continued) There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three years. B. EMPLOYEE RETIREMENT PLANS 1. DEFINED BENEFIT PENSION PLAN PLAN DESCRIPTION All full -time and certain part-time employees of the City are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) and the Public Employees Police and Fire Fund (PEPFF) which are cost - sharing, multiple - employer retirement plans. These plans are established and administered in accordance with Minnesota Statute, Chapters 353 and 356. ' PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership by statute are covered by the PEPFF. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by State Statute, and vest after three years of r 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. PERA issues a publicly available financial report that includes financial statements and required supplementary information for PERF and PEPFF. That report may be obtained by writing to PERA, 60 Empire Drive Suite 200, St. Paul, Minnesota, 55103 -2088 or by calling 651- 296 -7460 or 800-652 - 9026. FUNDING POLICY Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. PERF Coordinated Plan members are required to contribute 6.00% of their annual covered salary. PEPFF members are required to contribute 9.40% of their annual covered salary. The City is required to contribute the following percentages f annual covered payroll: 6 75% for Coordinated Plan PERF members and 14.10% for � es PEPFF members. The City's contributions to the Public Employees Retirement Fund for the years ending December 31, 2009, 2008, and 2007 were $ 460,816, $ 428,616, and $ 392,528, respectively. ' The City's contributions to the Public Employees Police and Fire Fund for the years ending December 31, 2009, 2008, and 2007 were $ 508,226 $ 444,527, and $ 374,495, respectively. The City's contributions were equal to the contractually required contributions for each year as set by state statute. 65 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 5 OTHER INFORMATION B. EMPLOYEE RETIREMENT PLANS (Continued) ' 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, public employee defined benefit retirement system to provide a retirement plan (the Plan) to volunteer firefighters of the City who are members of the Association. The Association is organized and operates under the provisions of Minnesota State Statutes 424A, and provides benefits in accordance with those statutes. The Association provides retirement benefits to members and survivors, upon death of eligible members. Benefits are established by the Association and approved by the City Council under the applicable statutes. The defined retirement benefits are based on a member's years of service. Vesting begins after the 10th year of service with a 60% benefit increasing to 100% after the 20th year of service. ' Full benefits are available after 20 years of service by the member and having attained the age of 50. The current benefit available is a lump sum distribution of $ 7,500 per year of service. Vested, terminated members who are entitled to benefits but are not yet receiving them are bound by the provisions in effect at the time of termination of membership. The Association issues a financial report that includes financial statements and required supplementary ' information for the Brooklyn Center Fire Department Relief Association. That report is available at the City of Brooklyn Center City offices. FUNDING POLICY ' The City levies property taxes at the direction of and for the benefit of the Plan and passes through state aids allocated to the Plan, all in accordance with enabling State statutes. The minimum tax levy ' obligation is the financial contribution requirement for the year less anticipated state aids. CONTRIBUTIONS Total contributions to the plan in 2008 were $ 117,983 of which all was from the State of Minnesota. The actuarially determined contribution based on an actuarial valuation performed at January 1, 2007 was $ 91,186, which represents funding for normal cost of $ 122,356 and amortization of the excess over the actuarial accrued liability of ($ 31,170). Actual contributions have continued at higher levels , to allow for a transition to a defined contribution plan in the future. These higher payments are irrevocable and do not affect the level of future City contributions, nor do they constitute an asset of the City. ' The City's $ 117,983 contribution to the Association in 2008 was recorded as intergovernmental revenue and fire department expenditure in the General Fund. 66 CITY OF BROOKLYN CENTER, MINNESOTA ' NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 5 OTHER INFORMATION B. EMPLOYEE RETIREMENT PLANS ' 2. PENSION PLAN — BROOKLYN CENTER FIRE DEPARTMENT RELIEF ASSOCIATION (Continued) ' The information below is the most recent data available. Actuarial valuation date 1/1/2007 ' Actuarial cost method Entry age normal cost method Amortization method Level dollar amount amortized on a closed basis Remaining amortization period 12 years Asset valuation method fair value Actuarial assumptions: Investment rate of return 6.0% compounded annually ' Discount rate for obligations 6.00% Projected salary increases Not applicable Post retirement benefits None Inflation rate Not applicable THREE YEAR TREND INFORMATION ' Three Year Trend Information Annual Percentage Net Year Pension ofAPC Pension Ending Cost (APC) Contributed Obligation 12/31/2006 $ 161,019 100 $ _ 12/31/2007 139,441 100 12/31/2008 117,983 100 - SCHEDULE OF FUNDING PROGRESS Assets in F-wess of Actuarial Actuarial Actuarial (Unfunded) Valuation Value of Accrued Accrued Funded Date Assets Liability Liability Ratio 01/01/2003 $ 2,540,231 $ 2,813,687 $ (273,456) 903% 01/01/2005 3,381,603 2,986,223 395,380 1132% 01/01/2007 4,024,987 3,713,292 311,695 108.4% 67 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 5 OTHER INFORMATION Continued I C. OTHER POST - EMPLOYMENT BENEFITS ' PLAN DESCRIPTION ' In addition to providing the pension benefits described in Note 5.13., the City provides postemployment health care benefits for retired employees and police disabled in the line of duty, through a single- employer defined benefit plan administered by the City. The authority to provide these benefits is established in Minnesota Statutes Sections 471.61 subd. 2a. and 299A.465. The benefits, benefit levels, employee contributions and employer contributions are governed by the City and can be amended by the City through its personnel manual and collective bargaining agreements with employee groups. The Plan is not ' accounted for as a trust fund, as an irrevocable trust has not been established to account for the Plan. The Plan does not issue a separate report. BENEFITS PROVIDED ' Retirees The City is required by State Statute to allow retirees to continue participation in the City's group health insurance plan if the individual terminates service with the City through service retirement or disability retirement. Former employees who are receiving, or who have met age and service requirements to receive, an annuity from a Minnesota public pension plan and those receiving a disability benefit from such a plan are immediately eligible to participate in this Plan. Retirees may obtain dependent coverage if the employee received dependent coverage immediately before leaving employment. Covered spouses may continue coverage after the death of a retiree. In addition, the surviving spouse of an active employee may continue coverage in the group health insurance plan after the employee's death. All health care coverage is provided through the City's group health insurance plans. The retiree is required to pay the premium as described below: Employees hired before January 1 1992 with continuous full -time employment Employees who, on the date of their retirement, meet eligibility requirement for a full retirement annuity under PERA or PERA Police without reduction of benefits because of age, disability, or any other reason for reduction shall be eligible for the City to pay 100% of the single- person premium until such time as the retiree is eligible for Medicare or at age 65, whichever is sooner. If the retiree desires to continue coverage in excess of single coverage, the additional cost for the coverage shall be paid to the City on a monthly basis. Employees hired after January 1. 1992 r The retiree is required to pay 100% of their premium cost for the City- sponsored group health insurance plan in which they participate. The premium is a blended rate determined on the entire active and retiree population. Since the projected claims costs for retirees exceed the blended premium paid by retirees, they are receiving an implicit rate subsidy (benefit). The coverage levels are the same as those afforded to active employees. , 68 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 5 OTHER INFORMATION C. OTHER POST - EMPLOYMENT BENEFITS BENEFITS PROVIDED (Continued) Disabled police and fireig The City is required to continue to pay the employer's contribution toward health coverage for police or firefighters disabled in the line of duty per Minnesota Statute 299A.465, until age 65. Dependent coverage is included, if the dependents were covered at the time of the disability. PARTICIPANTS As of the actuarial valuation dated January 1, 2008, participants consisted of Retirees for which the City is paying the single premium 12 Retirees and beneficiaries currently purchasing ' health insurance through the City 3 Disabled police officers 3 Active employees 147 Total 165 ' FUNDING POLICY The additional cost of using a blended rate for actives and retirees is currently funded on a pay -as- you -go basis. The City Council may change the funding policy at any time. ' ANNUAL OPEB COSTS AND NET OPEB OBLIGATION The City's annual other post employment benefit (OPEB) cost is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial obligation (or funding excess) over a period not to exceed 30 years. The net OPEB obligation as of December 31, 2009 was calculated as follows: Annual required contribution $ 314,184 Interest on net OPEB obligation 6,617 Adjustment to ARC (9,178) Annual OPEB cost 311,623 ' Employer Contributions Direct 102,650 Indirect Implicit Rate Subsidy 65,592 Increase (decrease) in net OPEB obligation 143,381 Net OPEB obligation, beginning of year 147,045 Net OPEB obligation, end of year $ 290,426 i r 69 CITY OF BROOKLYN CENTER, MINNESOTA ' NOTES TO FINANCIAL STATEMENTS December 31, 2009 ' Note 5 OTHER INFORMATION C. OTHER POST - EMPLOYMENT BENEFITS ANNUAL OPEB COSTS AND NET OPEB OBLIGATION (Continued) ' The City first had an actuarial valuation performed for the plan as of January 1, 2008 to determine the funded status of the plan as of that date as well as the employer's ARC for the fiscal year ended December 31, 2009. The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2009 were as follows: Percentage of ' Fiscal Year Annual OPEB Employer -Annual OPEB Cost Net OPEB Ended Cost Contributions Contributed Obligation December31,2008 $ 314,184 $ 167,139 53.20% $ 147,045 December 31, 2009 $ 311,623 $ 168,242 53.99% $ 290,426 FUNDED STATUS AND FUNDING PROGRESS The City currently has no assets that have been irrevocably deposited into a trust for future benefits; , therefore, the actuarial value of assets is zero. The funded status of the plan was as follows: Unfunded Actuarial Actuarial Actuarial Actuarial I UAALas a Valuation Value of Accrued Accrued Funded Covered Percentage of Date Assets Liability (AAL) * Liability (UAAL) Ratio Payroll Covered Payroll January 1, 2008 $ - $ 3,996,136 $ 3,996,136 0.00% $ 8,882,315 44.99% , * Using projected unit credit actuarial cost method Note - the first OPEB actuarial valuation was conducted as of January 1, 2008. There is no data available prior to the first valuation. ACTUARIAL ASSUMPTIONS Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the health care cost trend. Amounts determined regarding the funding status of the plan and the annual required contribution of the employer are subject to , continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information that shows whether the actuarial value of the plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for , benefits. i 70 ' CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 5 OTHER INFORMATION C. OTHER POST - EMPLOYMENT BENEFITS ACTUARIAL ASSUMPTIONS (Continued) ' Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effect of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long -term perspective of the calculations. In the January 1, 2008 actuarial valuation, the Projected Unit. Credit actuarial cost was used. The actuarial assumptions included a 4.5% investment rate of return (net of administrative expenses) and an initial annual health care cost trend rate of 10.0% reduced by 0.5% each year to arrive at an ultimate health care cost trend rate of 5.0 %. The actuarial value of assets as $0. The plans' unfunded actuarial accrued liability is being amortized using a 5.0% payroll growth rate method over 30 years on a closed basis. The remaining amortization period at December 31, 2009 was 28 years. D. 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 ssued eater than $5 million of bonds in 2004 and therefore is required to rebate excess tY �' q 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, an such liability would be immaterial. g Y ty E. 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. F. CONTINGENT LIABILITIES ' Tax Increment Notes In May 2002, the City entered into two limited tax increment notes with developers whereby the City will pay the developers a percentage of the available tax increment. Whether payments will occur and the ' amount of the payments is unpredictable since all payments are dependent on the City receiving tax increment revenues from the developer's project. As such, this liability has not been recorded in the financial statements. Any potential liability ends with the decertification of the tax increment district. r 71 CITY OF BROOKLYN CENTER, MINNESOTA , NOTES TO FINANCIAL STATEMENTS December 31, 2009 ' Note 5 OTHER INFORMATION F. CONTINGENT LIABILITIES (Continued) A schedule of the notes outstanding at December 31, 2009 is as follows: Amended Original 12/31/2009 Interest Maturity Note Principal Balance Rate Date Twin Lakes Business Park $ 2,424,199 $ 1,902,759 8.00% 1/31/2021 G. JOINT VENTURES AND JOINTLY GOVERNED ORGANIZATIONS The City has several agreements with other entities that provide reduced costs, better service, and additional benefits to the participants. The programs in which the City participates are listed below and amounts recorded within the current year's financial statements are disclosed. Local Government Information Systems Association ( LOGIS) This consortium of approximately 30 goverment 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 ' 2009 financial statements of the City is $ 369,094 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 GroW This group provides cooperative purchasing of health and life insurance benefits for approximately 45 ' governmental entities. The total of 2009 health and life insurance costs paid by the City was $ 1,304,651. Complete financial statements may be obtained from Gallagher Benefit services, Inc. located at 3600 American Blvd West, Bloomington, MN 55431. The Brooklyn Center Fire Department Relief Association (the Association) The Association is organized as a nonprofit organization, legally separate from the City, by its members to provide pension and other benefits to members in accordance with Minnesota Statutes. Its board of directors is elected by the membership of the Association and not by the City Council. The Association ' issues its own set of financial statements. All funding is conducted in accordance with applicable Minnesota Statutes, whereby state aids flow to the Association, tax levies are determined by the Association and are only reviewed by the City. The Association pays benefits directly to its members. The Association may certify tax levies to Hennepin County directly if the City does not carry out this function. Because the Association is fiscally independent of the City, the financial information of the Association has not been included within the City's financial statements. (See Note 5.B2. for disclosures relating to the pension plan operated by the Association.) Complete financial statements for the Association may be obtained at the City offices located at 6301 Shingle Creek Parkway, Brooklyn Center, Minnesota 55430. 72 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 5 OTHER INFORMATION (Continued) H. SUBSEQUENT EVENT, In March 2010, the City sold $ 2,350,000 in Taxable General Obligation Utility Revenue Bonds (Build America Bonds — Direct Pay), the proceeds of which will be used to reimburse the Water Utility and Sewer Utility Enterprise Funds for costs incurred for the Automatic Meter Read project. In March 2010, the City purchased the property at 4800 71st Avenue N from Edith Hernandez Franco for $206,700. The property will be added to the capital assets in 2010. r r 73 This page has been left blank intentionally. II 74 CITY OF BROOKLYN CENTER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 9 BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 1 of 5 For the Year Ended December 31, 2009 Variance with Final Budget - Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes: Property taxes $ 11,788,716 $ 11,788,716 $ 11,188,556 $ (600,160) Market value homestead credit - - 583,308 583,308 Penalties and interest 15,300 15,300 36,227 20,927 Lodging tax 720,000 720,000 591,291 (128,709) Total taxes 12,524,016 12,524,016 12,399,382 (124,634) Special assessments - - 4,762 4,762 Licenses and permits: Liquor and beer licenses 72,200 72,200 85,514 13,314 Building permits 330,000 330,000 222,045 (107,955) Mechanical permits 70,000 70,000 46,102 (23,898) Sewer and water permits 1,500 1,500 1,291 (209) Plumbing permits 40,000 40,000 28,094 (11,906) Garbage licenses 2,920 2,920 3,265 345 Mechanical licenses 5,000 5,000 7,509 2,509 Service station licenses 2,210 2,210 2,400 190 Vehicle dealer licenses 1,000 1,000 1,000 Bowling licenses 720 720 720 Cigarette licenses 2,850 2,850 2,850 - Sign permits 5,000 5,000 4,292 (708) Rental dwelling licenses 135,240 135,240 154,568 19,328 Amusement licenses 1,175 1,175 860 (315) Electrical Permits 50,000 50,000 43,552 (6,448) ROW permits 3,000 3,000 5,365 2,365 Miscellaneous licenses and permits 8,480 8,480 6,708 (1,772) Total licenses and permits 731,295 731,295 616,135 (115,160) Intergovernmental: Federal: Other federal grants - 110,000 1,317 (108,683) State: Local government aid 1,483,492 776,827 1,019,990 243,163 Police pension aid 300,000 300,000 302,677 2,677 PERA aid 34,365 34,365 34,365 - Fireperson pension aid 140,000 140,000 97,725 (42,275) Police training 17,839 17,839 Local: Miscellaneous grants 64,475 64,475 69,939 5,464 Total intergovernmental 2,022,332 1,425,667 1,543,852 118,185 Charges for services: General government charges 34,400 34,400 359,282 324,882 Public safety charges 19,000 19,000 74,952 55,952 Community development fees 3,000 3,000 12,851 9,851 Recreation fees 311,543 311,543 296,429 (15,114) Community Center fees 351,650 351,650 365,657 14,007 Total charges for services 719,593 719,593 1,109,171 389,578 75 CITY OF BROOKLYN CENTER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 9 BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 2 of 5 For the Year Ended December 31, 2009 Variance with , Final Budget - Budgeted Amounts Actual Positive Original Final Amounts (Negative) Revenues (continued): Fines and forfeits $ 296,000 $ 296,000 $ 340,536 $ 44,536 Miscellaneous: Investment earnings (net of market value change) 185,000 185,000 55,864 (129,136) Other 45,450 45,450 118,471 73,021 Total miscellaneous 230,450 230,450 174,335 (56,115) Total revenues 16,523,686 15,927,021 16,188,173 261,152 EXPENDITURES ' General government: Mayor and council: Current: Personal services 51,790 51,790 49,144 2,646 Supplies 500 100 699 (599) Services and other charges 81,501 78,501 77,242 1,259 Total mayor and council 133,791 130,391 127,085 3,306 Administrative (Manager, Clerk, HR) offices: Current: Personal services 648,661 646,127 652,055 (5,928) Supplies 8,800 4,800 5,629 (829) Services and other charges 48,625 38,375 35,499 2,876 Total administrative office 706,086 689,302 693,183 (3,881) Elections and voter registration: Current: Personal services 62,952 62,952 58,446 4,506 Supplies 1,000 1,000 - 1,000 Services and other charges 18,946 18,946 3,021 15,925 Total elections and voter registration 82,898 82,898 61,467 21,431 Assessor's office: Current: Personal services 267,277 266,191 262,560 3,631 Supplies 3,250 2,662 1,941 721 Services and other charges 42,688 41,630 42,388 (758) Total assessor's office 313,215 310,483 306,889 3,594 Finance: , Current: Personal services 469,096 387,383 392,926 (5,543) Supplies 4,125 2,525 1,521 1,004 Services and other charges 15,930 15,230 15,526 (296) Total finance 489,151 405,138 409,973 (4,835) Legal: Current: Services and other charges 375,000 375,000 388,772 (13,772) 76 CITY OF BROOKLYN CENTER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 9 BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 3 of 5 For the Year Ended December 31, 2009 1 Variance with Final Budget - Budgeted Amounts Actual Positive Original Final Amounts (Negative) Expenditures: ' General government (continued): Government buildings: Current: Personal services $ 291,824 $ 290,376 $ 294,720 $ (4,344) Supplies 59,400 79,650 89,927 (10,277) Services and other charges 416,415 395,045 442,072 (47,027) Total government buildings 767,639 765,071 826,719 (61,648) Information technology: Current: Personal services 202,165 200,461 200,452 9 Supplies 5,000 6,200 1,871 4,329 Services and other charges 158,633 147,367 130,340 17,027 Total information technology 365,798 354,028 332,663 21,365 Total general government 3,233,578 3,112,311 3,146,751 (34,440) Public safety: Police protection: Current: Personal services 5,527,023 5,424,363 5,521,946 (97,583) Supplies 123,994 107,779 105,979 1,800 Services and other charges 942,331 893,726 880,217 13,509 Total police protection 6,593,348 6,425,868 6,508,142 (82,274) Fire protection: Current: Personal services 548,959 548,597 511,340 37,257 Supplies 87,600 74,800 42,360 32,440 Services and other charges 327,444 278,668 231,612 47,056 Total fire protection 964,003 902,065 785,312 116,753 Protective inspection: Current: Personal services 863,883 838,721 620,593 218,128 Supplies 4,800 4,800 11,723 (6,923) Services and other charges 126,635 122,515 141,520 (19,005) Total protective inspection 995,318 966,036 773,836 192,200 Emergency preparedness: Current: Personal services 66,423 66,061 60,927 5,134 Supplies 21,700 11,700 - 11,700 Services and other charges 7,387 7,387 4,792 2,595 Total emergency preparedness 95,510 85,148 65,719 19,429 Total public safety 8,648,179 8,379,117 8,133,009 246,108 t 77 CITY OF BROOKLYN CENTER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 9 BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 4 of 5 For the Year Ended December 31, 2009 Variance with ' Final Budget - Budgeted Amounts Actual Positive Expenditures Final Amounts (Negative) nditures continued ) Pe (continued): Public works: Engineering department: ' Current: Personal services $ 530,004 $ 527,832 $ 591,820 $ (63,988) Supplies 16,255 7,140 4,901 2,239 Services and other charges 51,602 35,944 31,860 4,084 Total engineering department 597,861 570,916 628,581 (57,665) Street department: Current: Personal services 785,365 781,745 775,074 6,671 Supplies 148,800 113,320 104,398 8,922 Services and other charges 649,647 552,980 480,782 72,198 Total street department 1,583,812 1,448,045 1,360,254 87,791 Total public works 2,181,673 2,018,961 1,988,835 30,126 Community services: Social services: Current: Services and other charges 70,819 70,819 71,519 (700) Civic events: Current: Services and other charges 5,000 5,000 - 5,000 Total community services 75,819 75,819 71,519 4,300 Parks and recreation: Administration: Current: Personal services 180,607 179,883 185,733 (5,850) Supplies - - 97 (97) Services and other charges 6,410 6,410 7,430 (1,020) Total administration 187,017 186,293 193,260 (6,967) Recreation programs: Current: Personal services 454,454 446,707 467,967 (21,260) Supplies 34,280 34,280 32,925 1,355 Cost of good sold to public 8,614 8,614 7,285 1,329 Services and other charges 201,560 201,560 197,494 4,066 Total recreation programs 698,908 691,161 705,671 (14,510) Community center: Current: Personal services 450,581 449,495 441,219 8,276 Supplies 31,500 31,500 14,451 17,049 Services and other charges 82,200 82,200 84,121 (1,921) Total community center 564,281 563,195 539,791 23,404 78 t CITY OF BROOKLYN CENTER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 9 BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 5 of 5 For the Year Ended December 31, 2009 Variance with Final Budget - Budgeted Amounts Actual Positive Original Final Amounts (Negative) Expenditures: ' Parks and recreation (continued): Park maintenance: Current: Personal services $ 548,183 $ 545,649 $ 562,977 $ (17,328) Supplies 63,665 49,865 41,335 8,530 Services and other charges 339,058 310,913 301,039 9,874 Total park maintenance 950,906 906,427 905,351 1,076 Total parks and recreation 2,401,112 2,347,076 2,344,073 3,003 Economic development: Convention bureau: Current: Services and other charges 342,000 342,000 279,014 62,986 Nondepartmental: Expenditures not charged to departments: Current: Supplies 18,500 18,500 24,982 (6,482) Services and other charges 482,325 576,951 288,741 288,210 Total nondepartmental 500,825 595,451 313,723 281,728 Total expenditures 17,383,186 16,870,735 16,276,924 593,811 Revenues over (under) expenditures (859,500) (943,714) (88,751) 854,963 OTHER FINANCING SOURCES (USES) Transfers in - administrative services reimbursed 839,500 923,714 859,456 (64,258) Transfers from other funds 90,000 90,000 100,000 10,000 Transfers to other funds (70,000) (70,000) (84,138) (14,138) Total other financing sources (uses) 859,500 943,714 875,318 (68,396 Net increase (decrease) in fund balance $ - $ - 786,567 $ 786,567 Fund balance - January 1 7,743,438 Fund balance - December 31 $ 8,530,005 ' 79 CITY OF BROOKLYN CENTER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 10 BUDGETARY COMPARISON SCHEDULE - TAX INCREMENT DISTRICT NO.3 For the Year Ended December 31, 2009 Variance with Final Budget - Budgeted Amounts Positive Original Final Actual (Negative) REVENUES Taxes: Tax increments $ 2,097,465 $ 2,097,465 $ 2,350,053 $ 252,588 ' Market value homestead credit - - 6,588 6,588 Investment earnings (net of market value adjustment) 249,000 249,000 79,097 (169,903) Miscellaneous - - 250 250 Total revenues 2,346,465 2,346,465 2,435,988 89,523 EXPENDITURES Current: Economic development: Personal services - - 2,236 (2,236) Services and other charges 235,000 235,000 1,840,780 (1,605,780) Capital outlay: Economic development - - 806,619 (806,619) Total expenditures 235,000 235,000 2,649,635 (2,414,635) Revenues over (under) expenditures 2,111,465 2,111,465 (213,647) (2,325,112) OTHER FINANCING SOURCES (USES) ' Transfers out (3,592,894) (3,592,894) (2,493,054) 1,099,840 Net increase (decrease) in fund balance $ (1,481,429) $ (1,481,429) (2,706,701) $ (1,225,272) Fund balance - January 1 10,882,132 Fund balance - December 31 $ 8,175,431 r 80 ' CITY OF BROOKLYN CENTER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 11 SCHEDULE OF FUNDING PROGRESS - OTHER POSTEMPLOYMENT BENEFITS For the Year Ended December 31, 2009 Unfunded Actuarial Actuarial Actuarial Actuarial UAAL as a Valuation Value of Accrued Accrued Funded Covered Percentage of Date Assets Liability (AAL) Liability (UAAL Ratio Payroll Covered Payroll January 1, 2008 $ - $ 3,996,136 $ 3,996,136 0.00% $ 8,882,315 44.99% Percentage Annual of Annual Fiscal Year OPEB Employer OPEB Cost Net OPEB Ended Cost Contribution Contributed Obligation December 31, 2008 $ 314,184 $ 167,139 53.20% $ 147,045 December 31, 2009 311,623 168,242 53.99% 290,426 The City implemented GASB Statement No. 45 for the year ended December 31, 2008. Information for prior years is not available. 1 81 1 CITY OF BROOKLYN CENTER, MINNESOTA NOTE TO REQUIRED SUPPLEMENTARY INFORMATION December 31, 2009 ' Note A LEGAL COMPLIANCE — BUDGET The General Fund and Tax Increment District No. 3 Special Revenue Fund budgets are legally adopted on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control is the department level for the General Fund and the fund level for all other governmental funds. The following General Fund departments and major special revenue funds had expenditures in excess of , budgeted appropriations: Final Over ' Budget Actual Budget Major Funds: General Fund: Administrative $ 689,302 $ 693,183 $ (3,881) Finance 405,138 409,973 (4,835) Legal 375,000 388,772 (13,772) Government buildings 765,071 826,719 (61,648) Police protection 6,425,868 6,508,142 (82,274) Engineering 570,916 628,581 (57,665) Social services 70,819 71,519 (700) Parks and recreation administration 186,293 193,260 (6,967) Recreation programs 691,161 705,671 (14,510) Special Revenue Funds: Tax Increment District No. 3 235,000 2,649,635 (2,414,635) t 82 ' 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. 1 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 1 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). r i 83 CITY OF BROOKLYN CENTER, MINNESOTA ' COMBINING BALANCE SHEET Statement 12 NONMAJOR GOVERNMENTAL FUNDS December 31, 2009 Total Special Debt Capital Nonmajor Revenue Service Project Governmental ASSETS Cash and investments $ 4,019,486 $ 1,200,274 $ 4,561,923 $ 9,781,683 Receivables: , Accounts - net - - 166,072 166,072 Current taxes 3,008 7,190 - 10,198 Delinquent taxes 18,594 42,220 - 60,814 Due from other governments 143,274 - 771,192 914,466 ' Interfund receivable 100,000 - 231,615 331,615 Advances to other funds - - 792,488 792,488 Assets held for resale 787,000 - - 787,000 , Total assets 5,071,362 1,249,684 6,523,290 12,844,336 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 16,925 2,750 32,185 51,860 Accrued salaries and wages 12,553 - - 12,553 Due to other funds - - 595,685 595,685 ' Contracts payable - - 153,449 153,449 Interfund payable 100,000 - - 100,000 Deferred revenue 805,594 42,220 - 847,814 , Total liabilities 935,072 44,970 781,319 1,761,361 Fund balances: Reserved: Advances to other funds - - 792,488 792,488 Committed contracts - - 390,389 390,389 Debt service - 1,204,714 - 1,204,714 Unreserved: Designated: Capital improvements - - 4,584,901 4,584,901 Economic development 3,974,419 - - 3,974,419 , Undesignated 161,871 - (25,807) 136,064 Total fund balances 4,136,290 1,204,714 5,741,971 11,082,975 Total liabilities and fund balances $ 5,071,362 $ 1,249,684 $ 6,523,290 $ 12,844,336 r 84 ' CITY OF BROOKLYN CENTER, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND Statement 13 CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2009 Total Special Debt Capital Nonmajor Revenue Service Project Governmental REVENUES Property taxes $ 382,615 $ 705,997 $ _ $ 1,088,612 Tax increments 1,245,106 1,245,106 Franchise fees - - 656,772 656,772 Intergovernmental 405,683 - 839,472 1,245,155 Charges for services 11,170 - - 11,170 Investment earnings (net of market value adjustment) 32,076 7,767 48,821 88,664 Miscellaneous 93,463 - 109,820 203,283 ' Total revenues 2,170,113 713,764 1,654,885 4,538,762 EXPENDITURES Current: General government - _ 706,877 706,877 Public safety 319,339 319,339 Public works - - 122,731 122,731 Parks and recreation 59,293 - 58,909 118,202 ' Economic development 409,032 - - 409,032 Capital outlay: General government - - 113,516 113,516 Public works - - 1,356,689 1,356,689 Parks and recreation - - 34,750 34,750 Debt service: Principal retirement 305,471 610,000 - 915,471 Interest _ 93,903 _ 93,903 Fiscal agent fees 3,381 3,381 Total expenditures 1,093,135 707,284 2,393,472 4,193,891 Revenues over (under) expenditures 1,076,978 6,480 (738,587) 344,871 OTHER FINANCING SOURCES (USES) Transfers in 387,982 - 644,628 1,032,610 Transfers out (498,270) - (6,349) (504,619) Total other financing sources (uses) (110,288) - 638,279 527,991 Net increase (decrease) in fund balances 966,690 6,480 (100,308) 872,862 Fund balances - January 1 3,169,600 1,198,234 5,842,279 10,210,113 Fund balances - December 31 $ 4,136,290 $ 1204,714 $ 5,741,971 $ 11,082,975 S 85 This page has been left blank intentionally. I 86 ' NONMAJOR SPECIAL REVENUE FUNDS The City of Brooklyn Center had the following Special Revenue Funds during the year: Housing and Redevelopment Authority Fund (HRA) - This fund has authority to levy an ad valorem property tax for the purpose of conducting housing and redevelopment projects. These projects are accounted for in the EDA Fund; all tax proceeds are ' transferred to that fund. Economic Development Authors Fund (EDA) - This fund was established to account for the Economic Development Authority (EDA) of Brooklyn Center. The EDA carries out development activities; it has authority to operate an enterprise. The Earle Brown Heritage Center operates under this authority, as well as the tax increment financing activities. The EDA also does redevelopment and housing projects, funded by an ad valorem property tax levy and transfers from the CDBG and HRA funds. Earle Brown Tax Increment District — This fund has the authority to collect tax increments which are used for the historic restoration of the Earle Brown Farm and for debt service payments on bonds which were issued for the same purpose. Tax Increment District No. 4 Fund — This fund has the authority to collect tax increments which are used for various projects redevelopment ment 'ects within the City and for debt service payments of bonds which were issued for the same purpose. Police Drug Forfeiture Fund - This fund was established to account for property and/or ' cash seized by Police Department personnel. Community Development Block Grant Fund (CDBG) - This fund was established to account for funds received under Title I of the Housing and Community Development ' Act of 1974. City Initiatives Grant Fund — Revenues and expenditures from grants received from outside entities are accounted for in this fund. Programs include several federal, state, and local public safety grants, and state and local recreation grants. 87 CITY OF BROOKLYN CENTER, MINNESOTA COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS December 31, 2009 Housing and Economic Earle Brown Redevelopment Development Tax Increment Authority Authority District ASSETS Cash and investments $ - $ 1,792,835 $ 1,922,867 Receivables: Current taxes 3,008 - - Delinquent taxes 18,594 - - Due from other governments _ _ Interfund receivable - 100,000 - Asset held for resale - 787,000 - Total assets 21,602 2,679,835 1,922,867 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable - 5,532 3,010 Accrued salaries and wages - 7,348 - Interfund payable - _ _ Deferred revenue 18,594 787,000 - ' Total liabilities 18,594 799,880 3,010 Fund balances: Unreserved: Designated: Economic development 3,008 1,879,955 1,919,857 Undesignated _ _ _ Total fund balances 3,008 1,879,955 1,919,857 Total liabilities ies and fund balances $ 21,602 $ 2,679,835 $ 1,922,867 r 88 Statement 14 Total Tax Police Community City Nonmajor Increment Drug Development Initiatives Special District No. 4 Forfeiture Block Grant Grant Revenue $ 173,306 $ 37,113 $ - $ 93,365 $ 4,019,486 - - - - 3,008 - 18,594 - - 100,000 43,274 143,274 - - 100,000 - _ - - 787,000 173,306 37,113 100,000 136,639 5,071,362 S 1,707 4,493 - 2,183 16,925 - - - 5,205 12 , 553 ' - - 100,000 100,000 - 805,594 1,707 4,493 10 7,388 00,00 935,072 171,599 - - - 3,974,419 - 32,620 - 129,251 161,871 171,599 32,620 - 129,251 4,136,290 ' $ 173,306 $ 37,113 $ 100,000 $ 136,639 $ 5,071,362 i 1 1 r 89 CITY OF BROOKLYN CENTER, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS For the Year Ended December 31, 2009 Housing and Economic Earle Brown Redevelopment Development Tax Increment Authority Authority District 'REVENUES Property taxes $ 382,615 Tax increments - - 905,702 Intergovernmental _ _ _ Charges for services _ _ _ Investment earnings (net of market ' value adjustment) - 17,260 13,334 Miscellaneous - 195 - Total revenues 382,615 17,455 919,036 ' EXPENDITURES Current: Public safety: Personal services Supplies Services and other charges Total public safety Parks and recreation: Personal services Supplies Services and other charges Total parks and recreation Economic development: Personal services - 229,108 - Supplies _ 273 _ Services and other charges , 167,277 9,641 Total economic development - 396,658 9,641 Debt service: Principal _ _ _ Total expenditures - 396,658 9,641 Revenues over (under) expenditures 382,615 (379,203) 909,395 OTHER FINANCING SOURCES (USES) Transfers in - 382,325 657 ' Transfers out (382,325) (657) - Total other financing sources (uses) (382,325) 381,668 657 Net increase (decrease) in fund balances 290 2,465 910,052 ' Fund balances - January 1 2,718 1,877,490 1,009,805 Fund balances - December 31 $ 3,008 $ 1,879,955 $ 1,919,857 ' 90 Statement 15 Total Tax Police Community City Nonmajor Increment Drug Development Initiatives Special District No. 4 Forfeiture Block Grant Grant Revenue $ _ $ - $ 382,615 339,404 - - - 1,245,106 - 1,391 100,000 304,292 405,683 - - - 11,170 11,170 320 410 - 752 32,076 - 49,310 - 43,958 93,463 339,724 51,111 100,000 360,172 2,170,113 - - - 195,366 195,366 36,839 - 49,253 86,092 ' - 14,021 - 23,860 37,881 50,860 268,479 319,339 - - - 3,751 3,751 - - - 10,066 10,066 - 45,476 45,476 - 59,293 59,293 - - - - 229,108 273 2,733 - - - 179,651 2,733 - - - 409,032 305,471 - - - 305,471 308,204 50,860 - 327,772 1,093,135 31,520 251 100,000 32,400 1,076,978 - - - 5,000 387,982 (100,000) (15,288) (498,270) - (100,000) (10,288) (110,288) 31,520 251 - 22,112 966,690 140,079 32,369 - 107,139 3,169,600 $ 171,599 $ 32,620 $ - $ 129,251 $ 4,136,290 91 CITY OF BROOKLYN CENTER, MINNESOTA ' SPECIAL REVENUE FUND - HOUSING AND REDEVELOPMENT AUTHORITY Statement 16 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2009 Budgeted Amounts Actual r Original Final Amounts REVENUES Taxes: Property taxes $ 385,289 $ 385,289 $ 362,767 Market value homestead credit - - 19,848 , Total revenues 385,289 385,289 382,615 OTHER FINANCING SOURCES (USES) Transfers out (385,289) (385,289) (382,325) Net increase (decrease) in fund balance $ - $ - 290 Fund balance - January 1 2,718 , Fund balance - December 31 $ 3,008 92 r CITY OF BROOKLYN CENTER, MINNESOTA SPECIAL REVENUE FUND - ECONOMIC DEVELOPMENT AUTHORITY Statement 17 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2009 Budgeted Amounts Actual Original Final Amounts REVENUES Investment earnings (net of market value adjustment) $ 41,100 $ 41,100 $ 17,260 Miscellaneous - - 195 Total revenues 41,100 41,100 17,455 EXPENDITURES Current: Economic development: Personal services 210,226 225,678 229,108 Supplies 4,859 4,859 273 Services and other charges 132,830 132,830 167,277 Total expenditures 347,915 363,367 396,658 Revenues over (under) expenditures (306,815) (322,267) (379,203) OTHER FINANCING SOURCES (USES) Transfers in 385,289 385,289 382,325 Transfers out (657) Total other financing sources (uses) 385,289 385,289 381,668 Net increase (decrease) in fund balance $ 78,474 $ 63,022 2,465 Fund balance - January 1 1,877,490 Fund balance - December 31 $ 1,879,955 1 a 93 CITY OF BROOKLYN CENTER, MINNESOTA SPECIAL REVENUE FUND - EARLE BROWN TAX INCREMENT DISTRICT Statement 18 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2009 Budgeted Amounts Actual REVENUES Original Final Amounts Taxes: Tax increments $ 736,405 $ 736,405 $ 905,702 Investment earnings (net of market value adjustment) 16,200 16,200 13,334 Total revenue 752,605 752,605 919,036 EXPENDITURES Current: , Economic development: Services and other charges 16,000 16,000 9,641 Revenues over (under) expenditures 736,605 736,605 909,395 OTHER FINANCING SOURCES (USES) Transfers in - - 657 Net increase (decrease) in fund balance $ 736,605 $ 736,605 910,052 Fund balance - January 1 1,009,805 Fund balance - December 31 $ 1,919,857 r 1 94 1 CITY OF BROOKLYN CENTER, MINNESOTA SPECIAL REVENUE FUND - TAX INCREMENT DISTRICT NO.4 Statement 19 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2009 Budgeted Amounts Actual Original Final Amounts REVENUES Tax increments $ 301,562 $ 301,562 $ 339,404 Investment earnings (net of market value adjustment) - - 320 Total revenues 301,562 301,562 339,724 EXPENDITURES Current: Economic development: Services and other charges - 2,733 Debt service: Principal 286,484 286,484 305,471 Total expenditures 286,484 286,484 308 Net increase (decrease) in fund balance $ 15,078 $ 15,078 31,520 Fund balance - January 1 140,079 Fund balance - December 31 $ 171,599 95 CITY OF BROOKLYN CENTER, MINNESOTA SPECIAL REVENUE FUND - COMMUNITY DEVELOPMENT BLOCK GRANT Statement 20 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2009 Budgeted Amounts Actual Original Final Amounts REVENUES Intergovernmental $ 193,749 $ 193,749 $ 100,000 EXPENDITURES Current: Economic development: Services and other charges 193,749 193,749 - Revenues over (under) expenditures - - 100,000 OTHER FINANCING SOURCES (USES) Transfers out - - (100,000) Net increase (decrease) in fund balance Fund balance - January 1 - Fund balance - December 31 $ - r 96 CITY OF BROOKLYN CENTER, MINNESOTA SPECIAL REVENUE FUND - CITY INITIATIVES GRANT Statement 21 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2009 Budgeted Amounts Actual Original Final Amounts REVENUES Intergovernmental $ 190,250 $ 190,250 $ 304,292 Charges for services 12,821 12,821 11,170 Investment earnings (net of market value adjustment) 752 Miscellaneous 8,900 8,900 43,958 Total revenues 211,971 211,971 360,172 EXPENDITURES Current: Public safety: - Personal services 247,954 247,954 195,366 Supplies - 49,253 Services and other charges - - 23,860 Total public safety 247,954 247,954 268,479 Parks and recreation: Personal services 3 3,219 3,751 Supplies 9,992 9,992 10,066 Services and other charges 237,419 237,419 45,476 Total parks and recreation 250,630 250,630 59,293 Total expenditures 498,584 498,584 327,772 Revenues over (under) expenditures (286,613) (286,613) 32,400 OTHER FINANCING SOURCES (USES) Transfers in = = 5,000 Transfers out (15 Total other financing sources (uses) - - (10,288) Net increase (decrease) in fund balance $ (286,613) $ (286,613) 22,112 Fund balance - January 1 107,139 Fund balance - December 31 $ 129,251 t 1 1 97 This page has been left blank intentionally, 98 NONMAJOR DEBT SERVICE FUNDS The City's Debt Service Funds account for the following types of bonded indebtedness: General Obligation Bonds Fund — This fund is used to account for the accumulation of resources for payment of general obligation bonds and interest thereon. 99 CITY OF BROOKLYN CENTER, MINNESOTA BALANCE SHEET Statement 22 NONMAJOR DEBT SERVICE FUND December 31, 2009 General Obligation Bonds ASSETS Cash and investments $ 1,200,274 ' Receivables: Current taxes 7,190 Delinquent taxes 42,220 Total assets 1,249,684 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable 2,750 Deferred revenue 42,220 Total liabilities 44,970 Fund balance: Reserved: Debt service 1,204,714 Total liabilities and fund balance $ 1,249,684 r 100 CITY OF BROOKLYN CENTER, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES, AND Statement 23 CHANGES IN FUND BALANCE NONMAJOR DEBT SERVICE FUND For the Year Ended December 31, 2009 General Obligation Bonds REVENUES Property taxes $ 705,997 Investment earnings (net of market value adjustment) 7,767 Total revenues 713,764 EXPENDITURES Debt service: Principal 610,000 Interest 93,903 Fiscal agent fees 3,381 Total expenditures 707,284 Net increase decrease in fund balances 6,480 Fund balances - January 1 1,198,234 Fund balances - December 31 $ 1,204,714 101 I CITY OF BROOKLYN CENTER, MINNESOTA DEBT SERVICE FUND - G.O. RAPROVEMENT BONDS Statement 24 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2009 Budgeted Amounts Actual REVENUES Original Final Amounts Property taxes $ - $ $ 299 Special assessments 850,150 850,150 1,173,136 Investment earnings (net of market value adjustment) 20,200 20,200 23,234 Total revenues 870,350 870,350 1,196,669 EXPENDITURES Debt service: Principal 765,000 765,000 765,000 Interest 111,352 111,352 166,946 Fiscal agent fees 15,100 15,100 10,102 Total expenditures 891,452 891,452 942,048 Revenues over (under) expenditures (21,102) (21,102) 254,621 OTHER FINANCING SOURCES (USES) Transfers in - - 6,349 Net increase (decrease) in fund balance $ (21,102) $ (21,102) 260,970 Fund balance - January 1 2,793,086 Fund balance - December 31 $ 3,054,056 , 102 CITY OF BROOKLYN CENTER, MINNESOTA DEBT SERVICE FUND - TAX INCREMENT BONDS Statement 25 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2009 Budgeted Amounts Actual ' Original Final Amounts REVENUES Investment earnings (net of market value adjustment) $ 24,924 $ 24,924 $ 401 EXPENDITURES Debt service: Principal 2,765,000 2,765,000 2,765,000 Interest 1,016,613 1,016,613 922,711 Fiscal agent fees 4,500 4,500 1,687 Total expenditures 3,786,113 3,786,113 3,689,398 Revenues over (under) expenditures (3,761,189) (3,761,189) (3,688,997) OTHER FINANCING SOURCES (USES) Transfers in 3,799,722 3,799,722 2,493,054 Net increase (decrease) in fund balance $ 38,533 $ 38,533 (1,195,943) Fund balance - January 1 1,195,943 Fund balance - December 31 $ - 103 CITY OF BROOKLYN CENTER, MINNESOTA DEBT SERVICE FUND - GENERAL OBLIGATION BONDS Statement 26 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2009 Budgeted Amounts Actual REVENUES Original Final Amounts Property taxes $ 703,903 $ 703,903 $ 705,997 Investment earnings (net of market value adjustment) 5,000 5,000 7,767 Total revenues 708,903 708,903 713,764 EXPENDITURES Debt service: Principal 610,000 610,000 610,000 Interest 93,903 93,903 93,903 Fiscal agent fees 1,500 1,500 3,381 Total expenditures 705,403 705,403 707,284 Net increase (decrease) in fund balance $ 3,500 $ 3,500 6,480 Fund balance - January 1 1,198,234 ' Fund balance - December 31 $ 1,204,714 104 NONMAJOR CAPITAL PROJECT FUNDS t The City of Brooklyn Center had the following Capital Project Funds during the year: Ca ital Reserve Emergency Fund - This fund was established in 1997 to account for p g_ 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 nt facilities having a relatively or acquisition of major permanent q J P g Y long life; and/or to reduce debt incurred for capital outlays. The financing sources of the f fund include ad valorem taxation, transfers from other funds, issuance of bonds, federal and state grants, and investment earnings. Municipal State Aid Fund - This fund was established to account for the state allotment of gasoline tax collections used for transportation related construction and maintenance projects. Earle Brown Heritage Center Improvements Fund - This fund was established to provide a stable source of funds to pay for periodic capital improvements needed at the facility. Street Reconstruction Fund — This fund accounts for franchise fees collected, which have been dedicated to the reconstruction of the City's infrastructure. Technology Fund - This .fund, established in 2003, accounts for funds set aside for technology improvements or major technology renovations /replacements. 105 CITY OF BROOKLYN CENTER, MINNESOTA COMBINING BALANCE SHEET NONMAJOR CAPITAL PROJECT FUNDS December 31, 2009 Capital Reserve Capital Emergency Improvements ASSETS Cash and investments $ 1,441,458 $ 319,125 Receivables: Accounts - net _ _ Due from other governments Interfund receivable _ _ Advances to other funds - 792,488 Total assets 1,441,458 1,111,613 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable - 19,337 Due to other funds - _ Contracts payable - 56,515 Total liabilities - 75,852 Fund balances: Reserved: Advances to other funds 792,488 Committed contracts - 269,080 Unreserved: Designated for capital improvements 1,441,458 - Undesignated - (25,807) Total fund balances 1,441,458 1,035,761 Total liabilities and fund balances $ 1,441,458 $ 1,111,613 106 Statement 27 Municipal Earle Brown Total State Aid Heritage Nonmajor for Center Street Capital Construction Improvements Reconstruction Technology Projects $ 51,844 $ 670,479 $ 1,780,309 $ 298,708 $ 4,561,923 - - 166,072 - 166,072 771,192 - - - 771,192 231,615 231,615 - - - - 792,488 823,036 670,479 2,177,996 298,708 6,523,290 11,437 - - 1,411 32,185 - - 595,685 - 595,685 - 30,000 - 66,934 153,449 11,437 30,000 595,685 68,345 781,319 - - - - 792,488 121,309 390,389 811,599 640,479 1,582,311 109,054 4,584,901 (25,807) 811,599 640,479 1,582,311 230,363 5,741,971 $ 823,036 $ 670,479 $ 2,177,996 $ 298,708 $ 6,523,290 107 CITY OF BROOKLYN CENTER, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND, CHANGES IN FUND BALANCES NONMAJOR CAPITAL PROJECT FUNDS For the Year Ended December 31, 2009 Capital Reserve Capital Emergency Improvements REVENUES Franchise fees $ - $ - Intergovernmental - Investment earnings (net of market value adjustment) 13,768 2,955 Miscellaneous - 188 Total revenues 13,768 3,143 EXPENDITURES Current: General government: Supplies - 684 Services and other charges - 391,450 Total general government - 392,134 Public works: Supplies - - Services and other charges - 5,686 Total public works - 5,686 Parks and recreation: Services and other charges - 58,909 Capital outlay General government - - Public works - - Parks and recreation - 34,750 Total capital outlay - 34,750 Total expenditures - 491,479 Revenues over (under) expenditures 13,768 (488,336) OTHER FINANCING SOURCES (USES) Transfers in - 274,628 Transfers out - - Total other financing sources (uses) - 274,628 Net increase (decrease) in fund balances 13,768 (213,708) Fund balances - January 1 1,427,690 1,249,469 Fund balances - December 31 $ 1,441,458 $ 1,035,761 108 Statement 28 Municipal Earle Brown Total State Aid Heritage Nonmajor for Center Street Capital Construction Improvements Reconstruction Technology Projects $ - $ - $ 656,772 $ - $ 656,772 839,472 - - - 839,472 7,255 4,157 17,751 2,935 48,821 - 109,632 - - 109,820 846,727 113,789 674,523 2,935 1,654,885 - - - 177,015 177,699 72,629 = 65,099 529,178 72,629 242,114 706,877 33,380 = - = 33,380 83,069 596 89,351 116,449 596 122,731 - - - - 58,909 - 113,516 - - 113,516 713,609 - 643,080 - 1,356,689 - - - - 34,750 713,609 113,516 643,080 1,504,955 830,058 186,145 643,676 242,114 2,393,472 16,669 (72,356) 30,847 (239,179) (738,587) 300,000 - 70,000 644,628 (6,349) (6,349) - 300,000 (6,349) 70,000 638,279 16,669 227,644 24,498 (169,179) (100,308) 794,930 412,835 1,557,813 399,542 5,842,279 $ 811,599 $ 640,479 $ 1,582,311 $ 230,363 $ 5,741,971 i 109 CITY OF BROOKLYN CENTER, MINNESOTA CAPITAL PROJECT FUND - INFRASTRUCTURE CONSTRUCTION Statement 29 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2009 Budgeted Amounts Actual Original Final Amounts REVENUES Special assessments $ 476,000 $ 476,000 $ 175,010 Miscellaneous 60,000 60,000 48,504 Total revenues 536,000 536,000 223,514 EXPENDITURES Current: Public works: Services and other charges - - 43,966 Capital outlay: Public works 7,892,695 7,892,695 509,187 Total expenditures 7,892,695 7,892,695 553,153 Revenues over (under) expenditures (7,356,695) (7,356,695) (329,639) OTHER FINANCING SOURCES (USES) Transfers in 6,331,360 6,331,360 - Net increase (decrease) in fund balance $ (1,025,335) $ (1,025,335) (329,639) Fund balance - January 1 (276,982) Fund balance - December 31 $ (606,621) ' 110 ' CITY OF BROOKLYN CENTER, MINNESOTA CAPITAL PROJECT FUND - CAPITAL IMPROVEMENTS Statement 30 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2009 Budgeted Amounts Actual 1 Original Final Amounts REVENUES Investment earnings (net of market value adjustment) $ 10,300 $ 10,300 $ 2,955 Miscellaneous - - 188 Total revenues 10,300 10,300 3,143 EXPENDITURES Current: General government: Supplies - - 684 Services and other charges - - 391,450 Public works: Services and other charges 390,000 390,000 5,686 Parks and recreation: Services and other charges - - 58,909 Capital outlay: Parks and recreation - - 34,750 Total expenditures 390,000 390,000 491,479 Revenues over (under) expenditures (379,700) (379,700) (488,336) OTHER FINANCING SOURCES (USES) Transfers in 135,000 135,000 274,628 Net increase (decrease) in fund balance $ (244,700) $ (244,700) (213,708) Fund balance - January 1 1,249,469 Fund balance - December 31 $ 1,035,761 111 CITY OF BROOKLYN CENTER, MINNESOTA CAPITAL PROJECT FUND - MUNICIPAL STATE AID FOR CONSTRUCTION Statement 31 SCHEDULE OF REVENUES, EXPENDITURES, AND ' CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2009 Budgeted Amounts Actual REVENUES Original Final Amounts Intergovernmental $ 665,000 $ 665,000 $ 839,472 Investment earnings (net of market value adjustment) 20,000 20,000 7,255 Total revenues 685,000 685,000 846,727 EXPENDITURES Current: Public works: ' Supplies 33,500 33,500 33,380 Services and other charges 91,900 91,900 83,069 Total public works 125,400 125,400 116,449 Capital outlay: Public works - - 713,609 Total expenditures 125,400 125,400 830,058 Revenues over (under) expenditures 559,600 559,600 16,669 OTHER FINANCING SOURCES (USES) Transfers out (650,000) (650,000) - Net increase (decrease) in fund balance $ (90,400) $ (90,400) 16,669 Fund balance - January 1 794,930 f Fund balance - December 31 $ 811,599 112 CITY OF BROOKLYN CENTER, MINNESOTA CAPITAL PROJECT FUND - EARLE BROWN HERITAGE CENTER IMPROVEMENTS Statement 32 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2009 Budgeted Amounts Actual Original Final Amounts REVENUES Investment earnings (net of market value adjustment) $ 4,300 $ 4,300 $ 4,157 Miscellaneous - - 109,632 Total revenues 4,300 4,300 113,789 EXPENDITURES ' Current: General government: Services and other charges 287,300 287,300 72,629 Capital outlay: General government - - 113,516 Total expenditures 287,300 287,300 186,145 I ' Revenues over (under) expenditures (283,000) (283,000) (72,356) OTHER FINANCING SOURCES (USES) Transfers in 200,000 200,000 300,000 Net increase (decrease) in fund balance $ (83,000) $ (83,000) 227,644 Fund balance - January 1 412,835 Fund balance - December 31 $ 640,479 I 113 i CITY OF BROOKLYN CENTER, MINNESOTA CAPITAL PROJECT FUND - STREET RECONSTRUCTION Statement 33 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2009 Budgeted Amounts Actual Original Final Amounts REVENUES Franchise fees $ 680,000 $ 680,000 $ 656,772 Investment earnings (net of market value adjustment) 35,000 35,000 17,751 Total revenues 715,000 715,000 674,523 EXPENDITURES Current: Public works: Services and other charges - - 596 ' Capital outlay: Public works 850,000 850,000 643,080 Total expenditures 850,000 850,000 643,676 Revenues over (under) expenditures (135,000) (135,000) 30,847 OTHER FINANCING SOURCES (USES) Transfers out - - (6,349) Net increase (decrease) in fund balance $ (135,000) $ (135,000) 24,498 Fund balance - January 1 1,557,813 Fund balance - December 31 $ 1,582,311 ' 114 CITY OF BROOKLYN CENTER, MINNESOTA ' CAPITAL PROJECT FUND -TECHNOLOGY Statement 34 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL ' For the Year Ended December 31, 2009 Budgeted Amounts Actual Original Final Amounts REVENUES Investment earnings (net of market value adjustment) $ 7,700 $ 7,700 $ 2,935 EXPENDITURES Current: General government: Supplies 278,000 278,000 177,015 Services and other charges 67,000 67,000 65,099 Total expenditures 345,000 345,000 242,114 ' Revenues over (under) expenditures (337,300) (337,300) (239,179) OTHER FINANCING SOURCES (USES) ' Transfers in 70,000 70,000 70,000 Net increase (decrease) in fund balance $ (267,300) $ (267,300) (169,179) ' Fund balance - January 1 399,542 Fund balance - December 31 $ 230,363 115 This page has been left blank intentionally. ' 116 NONMAJOR ENTERPRISE FUNDS ' The City of Brooklyn Center had the following nonmajor Enterprise Funds during the year: i Recycling and Refuse Fund - This fund accounts for the operation of a state- mandated recycling program. ' Street Light Utility Fund - This fund was created to account for expenses related to streetlights within the City. Benefiting properties are billed for these expenses. 117 CITY OF BROOKLYN CENTER, MINNESOTA COMBINING STATEMENT OF NET ASSETS Statement 35 NONMA70R ENTERPRISE FUNDS ' December 31, 2009 Total Recycling and Street Light Nonmajor ASSETS Refuse Utility Enterprise Current assets: Cash and cash equivalents $ - $ 117,678 $ 117,678 Receivables: ' Accounts - net 55,026 56,761 111,787 Total current assets 55,026 174,439 229,465 Noncurrent assets: ' Capital assets: Street light systems - 83,540 83,540 Construction in progress - 332,712 332,712 ' Total capital assets - 416,252 416,252 Less: Allowance for depreciation - (5,566) (5,566) Net capital assets - 410,686 410,686 ' Total assets 55,026 585,125 640,151 LIABILITIES Current liabilities: ' Accounts payable 974 16,339 17,313 Interfund payable 14,337 - 14,337 Total liabilities 15,311 16,339 31,650 ' NET ASSETS Invested in capital assets - 410,686 410,686 Unrestricted 39,715 158,100 197,815 ' Total net assets 39,715 568,786 608,501 118 ' CITY OF BROOKLYN CENTER, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENSES, AND Statement 36 CHANGES IN FUND NET ASSETS NONMAJOR ENTERPRISE FUNDS For the Year Ended December 31, 2009 Total ' Recycling and Street Light Nonmajor Refuse Utility Enterprise OPERATING REVENUES Sales and user fees $ 267,316 $ 253,754 $ 521,070 OPERATING EXPENSES Supplies 61 839 900 ' Other services 274,592 40,313 314,905 Insurance 1,405 1,062 2,467 Utilities - 172,240 172,240 Depreciation - 5,566 5,566 Total operating expenses 276 058 220 020 496,078 P g P > > Operating income (loss) (8,742) 33,734 24,992 NONOPERATING REVENUES (EXPENSES) Investment earnings (net of market value adjustment) 25 1,067 1,092 Income (loss) before contributions (8,717) . 34,801 26,084 Capital contributions - 3,135 3,135 r Change in net assets (8,717) 37,936 29,219 Net assets - January 1 48,432 530,850 579,282 ' Net assets - December 31 $ 39,715 $ 568,786 $ 608,501 r 119 CITY OF BROOKLYN CENTER, MINNESOTA COMBINING STATEMENT OF CASH FLOWS Statement 37 NONMAJOR ENTERPRISE FUNDS For the Year Ended December 31, 2009 Total Recycling and Street Light Nonmajor ' Refuse Utility Enterprise CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 265,940 $ 255,386 $ 521,326 Payments to suppliers (275,948) (211,771) (487,719) , Net cash flows provided (used) by operating activities (10,008) 43,615 33,607 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Interfund payable 9,983 - 9,983 CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 25 1,067 1,092 Net increase (decrease) in cash and cash equivalents - 44,682 44,682 Cash and cash equivalents - January 1 - 72,996 72,996 i Cash and cash equivalents - December 31 $ - $ 117,678 $ 117,678 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) $ (8,742) $ 33,734 $ 24,992 Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation - 5,566 5,566 Changes in assets and liabilities: , (Increase) decrease in receivables (1,376) 1,632 256 Increase (decrease) in payables 110 2,683 2,793 Total adjustments (1,266) 9,881 8,615 Net cash flows provided (used) by operating activities $ (10,008) $ 43,615 $ 33,607 Noncash financing activities: Capital contributions $ - $ 3,135 a 120 ' 1 1 INTERNAL SERVICE FUNDS ' The City's Internal Service Funds included in this section are: Central Garage Fund - This fund was established to account for the acquisition and maintenance of all City vehicles and rolling stock equipment. Vehicle and equipment maintenance and repair costs are charged to the departments as incurred. Replacement costs are charged to the departments over the estimated useful life of the vehicles and 1 equipment. ' Public Employees Retirement Fund - This fund accounts for certain health care insurance benefits for City employees who retire before age 65. Substantially all of the City's full - time police and fire employees and all other full -time employees hired before July 1, 1989 may be eligible for those benefits from the time they qualify for an unreduced ! PERA pension until they reach age 65 or become eligible for Medicare. In the event that future costs would exceed earnings, other funds would be charged for the costs associated with their employees. Public Employees Compensated Absences Fund - This fund accounts for payment of unused vacation and sick leave time and the allocation of such costs to user departments. 1 1 1 121 CITY OF BROOKLYN CENTER, MINNESOTA COMBINING STATEMENT OF NET ASSETS Statement 38 INTERNAL SERVICE FUNDS December 31, 2009 Total Central EE Retirement EE Comp Internal ' Garage Benefit Absences Service ASSETS Current assets: Cash and cash equivalents $ 4,010,679 $ 1,371,814 $ 1,091,553 $ 6,474,046 Receivables: Accounts - net 51,777 2,259 - 54,036 Interfund receivable 33,422 - - 33,422 Inventories 26,987 - - 26,987 ' Total current assets 4,122,865 1,374,073 1,091,553 6,588,491 Noncurrent assets: Capital assets: Land improvements 166,108 - - 166,108 ' Machinery and equipment 7,773,250 - - 7,773,250 Total capital assets 7,939,358 - - 7,939,358 Less: Allowance for depreciation (3,982,879) - - (3,982,879) Net capital assets 3,956,479 - - 3,956,479 Total assets 8,079,344 1,374,073 1,091,553 10,544,970 LIABILITIES ' Current liabilities: Accounts payable 168,023 - - 168,023 Accrued salaries payable 12,364 - - 12,364 Compensated absences payable - current - - 109,155 109,155 Total current liabilities 180,387 - 109,155 289,542 Noncurrent liabilities: Compensated absences payable - long -term - - 982,398 982,398 Net OPEB obligation - 290,426 - 290,426 Total noncurrent liabilities - 290,426 982,398 1,272,824 Total liabilities 180,387 290,426 1,091,553 1,562,366 NET ASSETS Invested in capital assets 3,956,479 - - 3,956,479 Unrestricted 3,942,478 1,083,647 - 5,026,125 ' Total net assets 7,898,957 1,083,647 - 8,982,604 122 r CITY OF BROOKLYN CENTER, MINNESOTA ' COMBINING STATEMENT OF REVENUES, EXPENSES, AND Statement 39 CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS ' For the Year Ended December 31, 2009 Total ' Central EE Retirement EE Comp Internal Garage Benefit Absences Service OPERATING REVENUES Sales and user fees $ 1,371,844 $ 65,592 $ 197,115 $ 1,634,551 OPERATING EXPENSES Personal services 335,355 311,619 105,248 752,222 Supplies 363,153 - - 363,153 Other services 131,942 131,942 Insurance 44,679 - - 44,679 Utilities 1,394 - - 1,394 Depreciation 654,060 - - 654,060 Total operating expenses 1,530,583 311,619 105,248 1,947,450 Operating income (loss) (158,739) (246,027) 91,867 (312,899) NONOPERATING REVENUES (EXPENSES) Intergovernmental - 15,360 - 15,360 ' Investment earnings (net of market value adjustment) 39,896 13,328 9,231 62,455 Gain (loss) on sale of capital assets 40,632 40,632 Other revenue 26,909 - - 26,909 ' Total nonoperating revenues (expenses) 107,437 28,688 9,231 145,356 Income (loss) before transfers (51,302) (217,339) 101,098 (167,543) ' Transfers in 15,288 - - 15,288 Change in net assets (36,014) (217,339) 101,098 (152,255) Net assets - January 1 7,934,971 1,300,986 (101,098) 9,134,859 Net assets - December 31 $ 7,898,957 $ 1,083,647 $ - $ 8,982,604 123 CITY OF BROOKLYN CENTER, MINNESOTA COMBINING STATEMENT OF CASH FLOWS Statement 40 INTERNAL SERVICE FUNDS ' For the Year Ended December 31, 2009 Total Central EE Retirement EE Comp Internal CASH FLOWS FROM OPERATING ACTIVITIES Garage Benefit Absences Service Receipts from interfund services provided $ 1,334,216 $ 65,592 $ 197,115 $ 1,596,923 Payments to suppliers (405,560) - - (405,560) Payments to employees (332,340) (169,852) (89,648) (591,840) Miscellaneous revenue 26,909 15,360 - 42,269 Net cash flows provided (used) by operating activities 623,225 (88,900) 107,467 641,792 ' CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in 15,288 - - 15,288 Interfund receivable (33,422) - - (33,422) Net cash flows provided (used) by noncapital financing activities (18,134) - - (18,134) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets (911,922) - - (911,922) ' Proceeds from sale of capital assets 97,200 - - 97,200 Net cash flows provided (used) by capital and related financing activities (814,722) - - (814,722) , CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 39,896 13,328 9,231 62,455 Net increase (decrease) in cash and cash equivalents (169,735) (75,572) 116,698 (128,609) ' Cash and cash equivalents - January 1 4,180,414 1,447,386 974,855 6,602,655 Cash and cash equivalents - December 31 $ 4,010,679 $ 1,371,814 $ 1,091,553 $ 6,474,046 Reconciliation of operating income (loss) to net cash ' provided (used) by operating activities: Operating income (loss) $ (158,739) $ (246,027) $ 91,867 $ (312,899) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: ' Depreciation 654,060 - - 654,060 Changes in assets and liabilities: (Increase) decrease in receivables (37,628) (1,614) - (39,242) ' (Increase) decrease in inventories (1,643) - - (1,643) Increase (decrease) in payables 137,251 - - 137,251 Increase (decrease) in accrued expenses 3,015 143,381 15,600 161,996 Other nonoperating income 26,909 15,360 - 42,269 ' Total adjustments 781,964 157,127 15,600 954,691 Net cash provided (used) by operating activities $ 623,225 $ (88,900) $ 107,467 $ 641,792 Noncash fmancing activities: , Gain on sale of assets $ 40,632 $ - $ - 124 STATISTICAL SECTION This part of the City of Brooklyn Center's comprehensive annual financial report presents detailed information as a context for understanding the financial statements, note disclosures, and supplementary information. This section includes information for the primary government, including any blended component units. Contents Page Financial Trends 126 These tables contain trend information to help the reader understand the City's financial performance by placing it in historical perspective. Revenue Capacity 140 These tables contain information to help the reader assess the City's most significant "own- source " revenue, property taxes. Debt Capacity 146 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 152 These tables offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place. Operating Information 154 These tables contain service and infrastructure data to help the reader understand how the City's financial report relates to the services the City provides and the activities it performs. Sources: unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 125 CITY OF BROOKLYN CENTER, MINNESOTA NET ASSETS BY COMPONENT Last seven fiscal years (accrual basis of accounting) (Unaudited) 2003 2004 2005 Governmental activities Invested in capital assets, net of related debt $ 14,733,123 $ 12,648,271 $ 25,614,602 Restricted 14,853,260 39,412,423 29,326,928 Unrestricted 17,817,934 3,226,051 652,963 Total overnmental activities net assets $ 47 404 317 55 286 745 55 594 493 g > > > Business -type activities Invested in capital assets $ 37,898,615 $ 36,129,095 $ 38,417,467 Unrestricted 6,464,332 7,137,218 7,087,856 Total business -type activities net assets 44,362,947 43,266,313 45,505,323 Primary government Invested in capital assets, net of related debt $ 52,631,738 $ 48,777,366 $ 64,032,069 Restricted 14,853,260 39,412,423 29,326,928 Unrestricted 24,282,266 10,363,269 7,740,819 Total primary government net assets 91,767,264 98,553,058 101,099,816 Note: Data for 2000 -2002 is not available; the City did not prepare government -wide financial statements on an accrual basis for those years. L 1 126 Table 1 2006 2007 2008 2009 $ 25,675,447 $ 31,183,887 $ 31,423,905 $ 33,550,664 27,637,465 28,487,144 31,850,784 29,027,991 4,055,312 4 5 1 690 424 4 082 990 79,9 0 , $ 57,368,224 64,250,941 $ 63,965,113 $ 66,661,645 $ 40,647,644 $ 40,466,892 $ 42,572,360 $ 42,297,110 7,973,318 9,845,252 10,466,919 8,835,644 $ 48,620,962 50,312,144 $ 53,039,279 $ 51,132,754 $ 65,188,021 $ 70,722,191 $ 72,993,581 $ 75,003,481 27,637,465 28,487,144 31,850,784 29,027,991 13,163,700 15,353,750 12,160,027 13,762,927 105,989,186 114,563,085 117,004,392 117,794,399 S ' 127 CITY OF BROOKLYN CENTER, MINNESOTA CHANGES IN NET ASSETS - GOVERNMENTAL ACTIVITIES , Last seven fiscal years (accrual basis of accounting) (Unaudited) 2003 2004 2005 Expenses General government $ 2,649,846 $ 2,801,422 $ 2,970,364 Public safety 7,182,321 7,538,277 7,848,160 Public works 2,654,601 1,956,119 3,821,647 Community services 225,365 67,324 86,043 Parks and recreation 2,169,482 2,255,231 2,305,047 Economic development 1,759,585 1,683,025 3,559,027 Interest on long -term debt 922,253 1,268,649 1,349,852 Total'expenses 17,563,453 17,570,047 21,940,140 Program Revenues Charges for services: General government 227,350 927,199 960,125 Public safety 951,518 687,731 1,026,736 Parks and recreation 624,294 618,199 681,851 Other activities 24,554 23,533 9,234 Operating grants and contributions 1,627,020 933,104 855,633 Capital grants and contributions 1,079,134 2,423,411 2,398,345 Total program revenues 4,533,870 5,613,177 5,931,924 Net revenue/(expense) (13,029,583) (11,956,870) (16,008,216) ' General Revenues and Transfers Taxes: Property 10,407,613 10,788,145 11,288,883 Tax increments 3,527,881 4,285,166 3,980,518 Lodging taxes 661,267 656,859 710,619 Unrestricted grants and contributions 1,413,913 923,374 577,548 Investment earnings 426,329 491,524 1,272,409 Gain on disposal of capital asset 13,976 29,202 31,880 Miscellaneous 588,264 660,218 - Transfers 100,000 2,004,810 (1,545,893) ' Total general revenues and transfers 17,139,243 19,839,298 16,315,964 Change in Net Assets $ 4,109,660 $ 7,882,428 $ 307,748 i 1 128 1 Table 2 Page 1 of 3 2006 2007 2008 2009 $ 2,936,638 $ 2,953,328 $ 3 $ 3,653,956 8,039,356 8,051,836 8,760,880 9,036,176 2,057,018 2,704,435 2,596,754 2,687,980 123,172 74,389 72,893 71,519 2,565,364 2,624,897 2,910,825 2,773,528 2,567,377 3,966,908 3,713,340 2,151,916 1,184,017 1,127,276 1,125,712 1,143,546 19,472,942 21,503,069 22,679,171 21,518,621 947,613 902,734 1,115,038 1,102,360 800,408 847,307 780,080 1,234,678 665,332 692,781 754,079 740,782 423,804 290,533 151,924 26,472 748,888 818,989 1,003,884 1,034,905 2,208,751 2,646,320 2,706,056 1,566,224 5,794,796 6,198,664 6,511,061 5,705,421 ' (13,678,146) (15,304,405) (16,168,110) (15,813,200) 11,618,486 12,200,575 12,458,724 12,899,250 2,682,874 2,677,630 2,912,773 3,616,157 738,776 706,930 619,962 591,291 702,030 1,263,753 607,073 1,019,990 1,928,462 1,852,117 903,939 309,715 23,963 88,508 73,036 40,632 186,675 (273,070) (1,693,225) 32,697 17,881,266 18,516,443 15,882,282 18,509,732 $ 4,203,120 $ 3,212,038 $ (285,8281 $ 2,696,532 S ' 129 CITY OF BROOKLYN CENTER, MINNESOTA CHANGES IN NET ASSETS - BUSINESS -TYPE ACTIVITIES Last seven fiscal years (accrual basis of accounting) (Unaudited) 2003 2004 2005 Expenses Municipal liquor 724,897 939,244 978,743 ' Golf course 290,990 271,127 273,024 Earle Brown Heritage Center 2,109,166 2,180,229 2,262,359 Water utility 1,645,955 222,821 1,717,175 , Sanitary sewer 2,567,032 165,651 2,660,706 Storm drainage 838,421 1,533,923 899,988 Recycling and refuse 223,679 2,310,645 254,661 Street light utility 147,293 756,593 213,094 Total expenses 8,547,433 8,380,233 9,259,750 Program Revenues ' Charges for services: Municipal liquor 853,353 991,058 1,099,172 Earle Brown Heritage Center 1,749,202 1,675,267 1,857,461 ' Water utility 1,530,592 1,583,450 1,825,521 Sanitary sewer 2,870,109 2,833,836 2,966,222 Storm drainage 1,264,512 1,276,778 1,298,690 Other activities 706,644 707,460 706,105 ' Total program revenues 8,974,412 9,067,849 9,753,171 Net revenue /(expense) 426,979 687,616 493,421 ' General Revenues and Transfers Investment earnings 82,165 102,696 199,876 Other 241,308 117,864 - Transfers (100,000) (2,004,810) 1,545,893 Total general revenues and transfers 223,473 (1,784,250) 1,745,769 Change in Net Assets $ 650,452 $ (1,096,634) $ 2,239,190 i 1 1 130 ' Table 2 Page 2 of 3 S 2006 2007 2008 2009 ' 970,260 1,037,427 1,125,517 1,249,946 282,418 313,794 304,832 323,340 ' 2,439,709 2,431,719 2,403,676 2,363,085 1,635,847 1,716,497 1,783,275 3,448,819 3,176,426 2,930,016 3,018,418 3,736,989 1,097,277 1,123,636 1,162,957 1,282,505 245,853 257,300 265,983 276,058 161,219 191,659 182,402 220,020 10,009,009 10,002,048 10,247,060 12,900,762 1,244,738 1,362,093 1,492,644 1,530,175 2,168,861 2,168,033 1,959,628 1,725,858 1,906,375 2,063,930 2,003,633 2,019,325 3,186,569 3,274,678 3,264,649 3,315,726 1,323,607 1,412,548 1,553,236 1,577,879 714,373 732,224 763,858 770,472 10,544,523 11,013,506 11,037,648 10,939,435 535,514 1,011,458 790,588 (1,961,327) 337,231 406,654 243,322 87,499 (186,675) 273,070 1,693,225 (32,697) 150,556 679,724 1,936,547 54,802 $ 686,070 $ 1,691,182 $ 2,727,135 $ (1,906,525) f 1 131 CITY OF BROOKLYN CENTER, MINNESOTA CHANGES IN NET ASSETS - TOTAL Last seven fiscal years (accrual basis of accounting) (Unaudited) Expenses 2003 2004 2005 ' Governmental activities $ 17,563,453 $ 17,570,047 $ 21,940,140 Business -type activities 8,547,433 8,380,233 9,259,750 Total expenses 26,110,886 25,950,280 31,199,890 ' Program Revenues Governmental activities 4,533,870 5,613,177 5,931,924 Business -type activities 8,974,412 9,067,849 9,753,171 , Total program revenues 13,508,282 14,681,026 15,685,095 Net revenue /(expense) (12,602,604) (11,269,254) (15,514,795) General Revenues and Transfers Governmental activities 17,139,243 19,839,298 16,315,964 ' Business -type activities 223,473 (1,784,250) 1,745,769 Total general revenues and transfers 17,362,716 18,055,048 18,061,733 Change in Net Assets $ 4,760,112 $ 6,785,794 $ 2,546,938 Note: Data for 2000 -2002 is not available; the City did not prepare government -wide financial statements on an accrual basis for those years. ' 132 ' 1 Table 2 Page 3 of 3 1 2006 2007 2008 2009 1 $ 19,472,942 $ 21,503,069 $ 22,679,171 $ 21,518,621 10,009,009 10,002,048 10,247,060 12,900,762 1 29,481,951 31,505,117 32,926,231 34,419,383 1 5,794,796 6,198,664 6,511,061 5,705,421 10,544,523 11,013,506 11,037,648 10,939,435 16,339,319 17,212,170 17,548,709 16,644,856 1 (13,142,632) (14,292,947) (15,377,522) (17,774,527) 17,881,266 18,516,443 15,882,282 18,509,732 150,556 679,724 1,936,547 54,802 18,031,822 19,196,167 17,818,829 18,564,534 $ 4,889,190 $ 4,903,220 $ 2,441,307 $ 790,007 1 1 1 i 1 1 1 133 1 1 1 1 1 1 1 1 1 1 This a e has been left blank Intentionally P9 1 1 i 1 1 134 ' I ' CITY OF BROOKLYN CENTER, MINNESOTA GOVERNMENTAL ACTIVITIES TAX REVENUE BY SOURCE Table 3 Last seven fiscal years (accrual basis of accounting) (Unaudited) Property Tax Lodging ' Tax Increments Tax Total 2003 $ 10,407,613 $ 3,527,881 $ 661,267 $ 14,596,761 ' 2004 10,788,145 4,285,166 656,859 15,730,170 2005 11,288,883 3,980,518 710,619 15,980,020 2006 11,618,486 2,682,874 738,776 15,040,136 ' 2007 12,200,575 2,677,630 706,930 15,585,135 2008 12,458,724 2,912,773 619,962 15,991,459 2009 12,899,250 3,616,157 591,291 17,106,698 ' Note: Data for 2000 -2002 is not available; the City did not prepare government -wide financial statements on an accrual basis for those years r 135 CITY OF BROOKLYN CENTER, MINNESOTA FUND BALANCES - GOVERNMENTAL FUNDS Last ten fiscal years ' (modified accrual basis of accounting) (Unaudited) 2000 2001 2002 2003 General Fund t Reserved $ 105,074 $ 105,074 $ 173,353 $ 110,383 Unreserved 7,346,969 7,328,798 7,756,421 7,9 06,697 Total general fund 7,452,043 7,433,872 7,929,774 8,017,080 All other g overnmental funds Reserved $ 7,307,297 $ 7,015,583 $ 7,234,260 $ 7,509,315 Unreserved, reported in: ' Special revenue funds 1,816,806 3,864,347 4,453,879 6,211,019 Capital project funds 7,308,293 5,337,423 1,870,176 2,133',079 Total all other governmental funds $ 16,432,396 16,217,353 13,558,315 15,853 r 136 ' Table 4 2004 2005 2006 2007 2008 2009 $ 106,578 $ 11,080 $ 500 $ 700 $ 21,995 $ 27,993 ' 6,862,871 7,283 7,508,690 7,941,714 _ 7,721,443 8,502,012 6,969,449 7,294,951 7,509,190 7,942,414 7,743,438 8,530,005 ' $ 13,230,540 $ 5,150,818 $ 5,176,808 $ 11,288,685 $ 9,997,668 $ 8,696,324 25,750,179 24,853,267 22,862,211 11,738,460 10,523,743 9,399,556 ' 4,969,506 3,232,820 4,164,400 3,466,029 4,282,881 3,609,961 43,950,225 33,236,905 32,203,419 26,493,174 24,804,292 21,705,841 ' 137 CITY OF BROOKLYN CENTER, MINNESOTA CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS Last ten fiscal years ' (modified accrual basis of accounting) (Unaudited) 2000 2001 2002 2003 Revenues Property taxes $ 8,265,296 $ 7,932,469 $ 10,739,847 $ 10,268,278 Tax increments 3,196,108 3,967,398 3,022,252 3,466,114 Franchise fees _ _ - _ Lodging taxes 836,857 826,957 717,176 661,267 ,68 ' Special assessments 1,287,934 1,136,454 1,190,031 1,2322 Licenses and permits 632,549 788,629 823,996 827,685 Intergovernmental 7,899,522 5,824,513 7,039,895 3,479,082 Charges for services 779,060 688,453 575,748 709,623 ' Fines and forfeits 180,676 230,408 278,557 290,408 Investment earnings 798,229 2,082,680 648,423 317,749 Miscellaneous 125,012 150,369 2 17 9 67,7 607,582 Total revenues 24,001,243 23,628,330 25,303,642 21,860,470 ' Expenditures ' General government 2,429,196 2,504,392 2,553,426 2,475,323 Public safety 5,453,143 5,672,098 6,255,221 6,620,481 Public works 2,100,865 2,142,064 1,986,692 2,114,378 Community services 95,148 106,034 103,491 91,581 ' Parks and recreation 2,344,768 2,392,168 2,125,415 2,030,402 Economic development 2,763,028 2,365,732 2,095,545 1,758,257 Nondepartmental 419,789 372,056 366,282 331,223 ' Administrative services reimbursement (795,737) (767,504) (596,541) (607,221) Capital outlay 7,275,675 6,558,177 9,608,420 1,881,360 Debt service Principal 3,970,000 2,805,000 3,000,000 3,220,000 ' Interest 1,282,512 1,330,162 1,034,139 905,518 Other charges 13,426 8,931 28,712 26,079 Total expenditures 27,351,813 25,489,310 28,560,802 20,847,381 ' Revenues over (under) expenditures (3,350,570) (1,860,980) (3,257,160) 1,013,089 Other fmancing sources (uses) ' Issuance of debt 735,000 730,000 - 1,205,000 Discount on issuance of debt - - (8,860) Premium on issuance of debt ' Sale of capital assets 194,491 572,266 474,648 73,175 Transfers in 5,479,120 4,124,184 4,263,453 3,703,509 Transfers out (5,404,122) (3,798,684) (4,063,453) (3,603,509) Refunded bonds redeemed _ _ _ _ Total other financing sources (uses) 1,004,489 1,627,766 674,648 1,369,315 Net change in fund balances $ (2,346,081) $ (231,214) $ (2,582,512) $ 2,382,404 ' Debt service as a percentage of noncapital expenditures 23.05% 18.41% 16.81% 21.88% ' 138 Table 5 2004 2005 2006 2007 2008 2009 $ 10,598,478 $ 11,641,177 $ 11,525,040 $ 12,094,359 $ 12,403,914 $ 12,897,002 3,834,060 4,680,688 2,664,144 2,727,637 2,894,595 3,601,747 ' 612,079 662,614 658,410 658,620 643,934 656,772 656,858 710,619 738,776 706,930 619,962 591,291 1,313,782 1,226,655 1,214,571 1,364,413 1,289,148 1,352,908 678,077 675,530 722,633 673,156 643,736 616,135 ' 3,239,020 2,578,031 2,375,697 3,171,745 2,211,560 2,789,007 711,526 754,575 722,218 705,736 761,404 1,120,341 254,980 253,748 256,600 291,423 302,986 340,536 385,022 1,078,434 1,601,731 1,519,503 733,877 247,260 609,902 427,839 477,296 404,420 449,061 370,508 22,893,784 24,689,910 22,957,116 24,317,942 22,954,177 24,583,507 2,594,041 2,586,993 2,839,150 2,951,188 3,575,147 3,853,628 7,025,629 7,014,528 7,299,842 7,550,434 8,048,529 8,452,348 ' 1,814,107 2,197,127 1,817,120 2,310,846 2,139,864 2,155,532 67,324 86,043 123,172 74,389 72,893 71,519 1,981,998 2,121,130 2,212,142 2,314,099 2,409,291 2,462,275 ' 1,006,550 2,076,023 1,386,558 5,659,331 7,666,319 2,531,062 333,669 315,355 363,967 354,848 301,396 313,723 (784,084) (754,085) (529,362) (744,590) (802,775) (859,456) 4,724,289 8,335,916 5,918,472 4,524,524 4,531,003 2,820,761 3,751,513 2,772,189 3,127,146 2,786,076 2,884,953 4,445,471 881,016 1,214,751 1,197,392 1,134,412 1,060,165 1,183,560 126,858 23,758 53,226 12,896 73,631 15,170 23,522,910 27,989,728 25,808,825 28,928,453 31,960,416 27,445,593 ' (629,126) (3,299,818) (2,851,709) (4,610,511) (9,006,239) (2,862,086) 25,770,000 - 1,460,000 - 6,725,000 - ' (96,503) = (445) _ (28,178) _ 1,384 ' 5,103,613 2,811,793 2,784,116 5,881,257 1,969,533 3,632,013 (3,098,803) (2,619,793) (2,211,209) (6,018,629) (1,549,358) (3,081,811) - (7,280,000) - (529,138 ) - - 27,678,307 (7,088,000) 2,032,462 (666,510) 7,118,381 550,202 $ 27,049,181 $ (10,387,818) $ (819,247) $ (5,277,021) $ (1,887,858) $ (2,311,884) � 24.89% 18.37% 19.14% 15.90% 14.65% 22.92% , 139 CITY OF BROOKLYN CENTER, MINNESOTA ASSESSED TAX CAPACITY AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Last ten fiscal years ' (Unaudited) 2000 2001 2002 2003 Real Property: ' Residential $ 9,976,862 $ 8,928,738 $ 8,495,196 $ 9,362,788 Nonresidential 11,002,424 14,093,094 9,225,991 9,430,533 Area -wide allocation 1,504,330 746,438 635,875 875,145 Personal property 437,707 452,680 262,882 273,072 ' Less: Tax increment districts 2,533,878 3,296,624 2 450 218 2 538 > > 825 > Total Assessed Tax Capacity 20,387,445 20,924,326 16,169,726 17,402,713 Direct Tax Rate 34.645 35.996 58.901 52.792 ' Estimated Market Value 1,177,854,400 1,324,649,100 1,488,832,300 1,673,812,000 Total Assessed Tax Capacity as a percentage , of Estimated Market Value 1.73% 1.58% 1.09% 1.04% ` Beginning in 2002, the State of Minnesota significantly reduced state aids to the City and allowed these amounts to be included ' in the propery tax levy. Source: City Assessing Department 140 , Table 6 i ' 2004 2005 2006 2007 2008 2009 $ 10,532,558 $ 12,177,307 $ 13,942,981 $ 15,436,568 $ 16,033,78 4 $ 14,690,823 3 ' 9,775,352 9,903,157 9,475,576 9,573,405 9,864,552 10,467,618 1,097,596 1,023,618 1,161,174 1,624,108 2,155,636 2,539,817 281,963 294,377 298,953 283,198 291,815 283,070 ' 3,134,417 3,122,665 2,559,620 2,463,631 2,405,929 2,739,457 18,553,052 20,275,794 22,319,064 24,453,648 25,939,858 25,241,871 ' 53.693 51.723 48.069 45.366 45.081 49.138 1,840,115,300 1,959,999,100 2,035,666,100 2,140,133,600 2,197,067,700 2,094,106,200 1.01% 1.03% 1.10% 1.14% 1.18% 1.21% 141 CITY OF BROOKLYN CENTER, MINNESOTA PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last ten fiscal years (Unaudited) Overlapping Rates Metro City ` County Dist 11 Dist 279 Dist 281 Dist 286 Districts ' 2000 35.369 39.655 51.792 53.284 48.492 44.356 6.039 2001 36.740 37.679 52.224 56.784 46.678 47.139 5.830 ' 2002 58.901 50.789 29.082 30.092 30.213 26.338 3.537 2003 54.021 50.607 26.941 35.042 29.179 49.817 3.825 2004 53.693 47.324 21.050 23.709 34.258 39.892 3.502 2005 51.723 44.172 21.492 24.336 29.989 36.159 3.304 ' 2006 48.069 41.016 20.046 21.815 28.489 39.781 2.924 ' 2007 45.366 39.110 19.353 23.758 28.750 36.154 2.671 2008 45.081 38.571 16.983 19.710 27.243 37.519 2.562 ' 2009 49.138 40.413 18.263 21.033 27.214 43.163 2.579 Source: City Assessing Department and Hennepin County Property Tax Services 'The City's direct rate is an operating rate only. ' 2 Watershed levy was levied in 2006, 2008, and 2009 in schools districts 279 and 281, and parts of school districts 11 and 286. 1 142 ' 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 ' 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 - 132.214 142.763 148.397 - 4.078 - 124.769 - 127.613 133.266 139.436 - ' 4.074 0.073 116.129 116.202 117.971 124.645 135.864 135.937 ' 4.639 - 111.139 - 115.544 120.536 127.940 - 4.835 0.265 108.032 108.297 111.024 118.557 128.568 128.833 4.575 0.047 114.968 115.015 117.785 123.966 139.868 139.915 143 CITY OF BROOKLYN CENTER, MINNESOTA PRINCIPAL PROPERTY TAXPAYERS Table 8 Current Year and Nine Years Ago ' (Unaudited) 2009 2000 Percentage of Percentage of ' Net Tax Total Tax Net Tax Total Tax Taxpayer Capacity Rank Capacity Value Capacity Rank Capacity Value Luther Properties $ 484,774 1 1.92% Twin Lakes LLC 438,672 2 1.74% - - Brooks Mall Properties LLC 414,290 3 1.64% 768,800 1 3.77% , Lang- Nelson 280,951 4 1.11% 504,072 4 2.47% BCC Associates, LLC 267,250 5 1.06% - - ' Regal Cinemas, Inc. 245,758 6 0.97% - - CSM Corporation 234,270 7 0.93% 293,017 7 1.44% , Medtronic, Inc. 225,598 8 0.89% - - ' Brookdale Comer, LLC 216,250 9 0.86% 258,716 9 1.27% Target 165,450 10 0.66% 693,238 2 3.40% ' Prudential Insurance Co. - - 623,790 3 3.06% Ryan Construction Co. - - 485,780 5 2.38% ' Bradley Real Estate Inc. - - 294,331 6 1.44% Sears - - 270,500 8 1.33% ' AMB Property - - 187,982 10 0.92% Totals $ 2,973,263 11.78% $ 4,380,226 21.48% f Source: City Assessing Department 144 CITY OF BROOKLYN CENTER, MINNESOTA PROPERTY TAX LEVIES AND COLLECTIONS Table 9 Last ten fiscal years (Unaudited) Collected within the Certified Adjusted Fiscal Year of the Levy Collections in Total Collections to Date Property Property Percentage of Subsequent Precentage Tax Levy Adjustments * Tax Levy Amount Adjusted Levy Years Amount to Date 2000 $ 8,100,268 $ (15,259) $ 8,085,009 $ 8,044,802 99.5% $ 40,207 $ 8,085,009 100.0% 2001 8,420,720 (48,553) 8,372,167 8,132,527 97.1% 239,640 8,372,167 100.0% 2002 10,442,518 (925,619) 9,516,899 9,262,641 97.3% 254,258 9,516,899 100.0% 2003 10,355,103 (828,621) 9,526,482 9,280,043 97.4% 245,585 9,525,628 100.0% 2004 10,779,421 (806,306) 9,973,115 9,504,581 95.3% 455,728 9,960,309 99.9% 2005 11,319,404 (743,712) 10,575,692 10,403,359 98.4% 157,301 10,560,660 99.9% 2006 11,627,768 (674,470) 10,953,298 10,697,638 92.0% 231,011 10,928,649 94.0% 2007 11,958,743 (590,700) 11,368,043 11,070,387 92.6% 253,037 11,323,424 94.7% 2008 12,437,093 (577,797) 11,859,296 11,577,739 93.1% 190,386 11,768,125 94.6% 2009 12,893,208 (614,032) 12,279,176 11,983,738 92.9% - 11,983,738 92.9% Source: Hennepin County Property Tax Division * - Adjustments for subsequent abatements. Beginning in 2002, adjustments also include Market Value Homestead Credit. I I I I �I CITY OF BROOKLYN CENTER, MINNESOTA RATIOS OF OUTSTANDING DEBT BY TYPE Table 10 Last ten fiscal years (Unaudited) Business -Type Governmental Activities Activities General Tax Storm Sewer Less: Percentage Obligation Increment Improvement Revenue Total Debt Service Bonded of Personal Per Bonds Bonds Bonds Bonds Debt Fund Balance Debt Income' Capita' 2000 $ 8,760,000 $ 9,140,000 $ 6,120,000 $ 1,050,000 $ 25,070,000 $ 4,736,609 $ 20,333,391 1.62% $ 697 2001 8,105,000 7,690,000 6,150,000 860,000 22,805,000 5,472,514 17,332,486 1.37% 594 2002 7,425,000 6,150,000 5,370,000 660,000 19,605,000 5,741,191 13,863,809 1.09% 475 2003 6,720,000 4,505,000 5,705,000 450,000 17,380,000 5,321,277 12,058,723 0.92% 416 2004 11,025,000 22,445,000 5,710,000 230,000 39,410,000 13,230,540 26,179,460 1.88% 930 2005 5,340,000 19,305,000 4,720,000 - 29,365,000 4,158,607 25,206,393 1.78% 903 2006 4,465,000 18,305,000 5,180,000 - 27,950,000 4,202,976 23,747,024 1.61% 851 2007 3,875,000 17,255,000 4,280,000 - 25,410,000 6,724,500 18,685,500 1.19% 670 2008 3,275,000 20,560,000 5,690,000 - 29,525,000 5,187,263 24,337,737 ** 872 2009 2,665,000 17,795,000 4,925,000 - 25,385,000 4,258,770 21,126,230 ** 716 ' - See Table 15, Demographics and Economic Statistics for personal income and population data. ** - personal income data not available for these years CITY OF BROOKLYN 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 1 2000 $ 7,175,000 $ 775,911 $ 6,399,089 0.54% $ 219 2001 6,760,000 831,588 5,928,412 0.45% 203 1 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% 120 1 2007 3,875,000 1,163,306 2,711,694 0.13% 97 2008 3,275,000 1,198,234 2,076,766 0.09% 74 1 2009 2,665,000 1,204,714 1,460,286 0.07% 50 1 i 1 1 1 1 1 ' 147 CITY OF BROOKLYN CENTER, MINNESOTA COMPUTATION OF DIRECT AND OVERLAPPING DEBT Table 12 as of December 31, 2009 , (Unaudited) Estimated Estimated Share Debt Percentage of Overlapping , Governmental Unit Outstanding Applicable' Debt Overlapping debt: School Districts: , No. 11 Anoka $ 150,586,689 1.40% $ 2,108,214 No. 279 Osseo 168,560,000 5.10% 8,596,560 No. 281 Robbinsdale 181,370,000 5.20% 9,431,240 ' No. 286 Brooklyn Center 32,780,000 100.00% 32,780,000 Metropolitan Council 27,085,000 0.70% 189,595 Metropolitan Transit District 202,440,000 0.80 % 1,619,520 ' Hennepin County 633,545,000 1.60% 10,136,720 Hennepin Regional RR Authority 43,895,000 1.60% 702,320 Hennepin County Park Reserve District 80,895,000 2.10% 1,698,795 Total overlapping debt $ 1,202,010,000 67,262,964 ' City of Brooklyn Center direct debt 2 1,460,286 ' Total direct and overlapping debt $ 68,723,250 Source: City Finance Department, Hennepin County, and Springsted Financial Advisors. 1 The percentage of overlapping debt applicable is estimated using tax capacity values. Applicable percentages were estimated by determining the portion of each entity's tax capacity that is within the City's boundaries and dividing it by that entity's total tax capacity. 2 Includes only general obligation debt which is repaid through property taxes, net of amounts available. 148 , ' CITY OF BROOKLYN CENTER, MINNESOTA LEGAL DEBT INFORMATION Table 13 Last ten fiscal years (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 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% ' 2007 42,259,958 2,711,694 39,548,264 6.42% 2008 65,676,378 2,076,766 63,599,612 3.16% 2009 62,625,534 1,460,286 61,165,248 2.33% ' Legal Debt Margin Calculation for Fiscal Year 2009 Taxable Market Value $ 2,087,517,800 Debt limit (3% of Taxable Market Value) 62,625,534 Debt applicable to limit Net general obligation bonds 1,460,286 Legal debt margin $ 61,165,248 ' 149 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 2000 $ 1,074,619 $ 307,389 $ 767,230 $ 180,000 $ 59,110 3.21 2001 1,129,502 327,412 802,090 190,000 49,950 3.34 S 2002 1,377,638 662,747 714,891 200,000 40,100 2.98 2003 1,264,512 809,130 455,382 210,000 29,540 1.90 2004 1,276,778 756,593 520,185 220,000 18,250 2.18 2005 1,293,841 1,086,600 207,241 230,000 6,210 0.88 2006 - - _ - - - r 2007 - - _ 2008 - - _ 2009 - - _ r 150 Table 14 Special Assessment Bonds Tax Increment Bonds ' Special Tax Assessment Debt Service Increment Debt Service Collections Principal Interest Coverage Collections Princi al Interest Coverage $ 994,839 $ 535,000 $ 231,972 1.30 $ 3,186,573 $ 1,280,000 $ 595,554 1.70 1,029,378 700,000 252,563 1.08 3,713,349 1,450,000 519,409 1.89 ' 928,559 780,000 249,497 0.90 2,882,577 1,540,000 433,893 1.46 1 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 ' 884,261 900,000 162,486 0.83 1,707,470 1,050,000 847,236 0.90 816,798 980,000 145,121 0.73 1,906,053 1,030,000 804,491 1.04 r 1,173,435 765,000 166,946 1.26 2,356,641 2,765,000 922,711 0.64 S ' 151 CITY OF BROOKLYN CENTER, MINNESOTA DEMOGRAPHIC AND ECONOMIC STATISTICS Table 15 Last ten fiscal years (Unaudited) S School Enrollments Per Capita No. 286 , Personal Personal Unemployment No 11 No. 279 No. 281 Brooklyn Population Income Income Rate Anoka Osseo Robbinsdale Center 2000 29,172 $1,255,767,084 $ 43,047 3.0% 41,314 22,017 13,706 1,682 2001 29,180 1,267,929,360 43 452 4.2% 41 41 2 9 22,041 13 754 1 724 > > > 2002 29,185 1,276,318,420 43,732 5.2% 41,383 21,824 13,656 1,732 , 2003 29,174 1,316,943,534 45,141 5.9% 41,254 21,698 13,765 1,732 2004 29,005 1,393,429,205 48,041 5.6% 41,592 21,620 16,196 1,691 2005 28,137 1,418,442,444 50,412 4.8% 41,596 21,792 13,368 1,679 2006 27,901 1,476,102,405 52,905 4.6% 41,310 22,071 13,194 1,705 ' 2007 27,901 1,570,268,280 56,280 5.6% 40,656 21,859 12,891 1,763 2008 27,907 ** ** 7.6% 40,152 21,001 12,526 2,012 2009 29,500 ** ** 8.7% 39,822 20,903 11,947 2,250 ' Sources: Population - Metropolitan Council Personal income - Bureau of Economic Analysis Unemployment rate - Minnesota Department of Employment and Economic Development School Enrollments - Minnesota Department of Education i * * - personal income data not available for these years 152 ' CITY OF BROOKLYN CENTER, MINNESOTA PRINCIPAL EMPLOYERS Table 16 Current Year and Nine Years Ago (Unaudited) r 2009 2000 Percentage of Percentage of Total City Total City Employer Employees Rank Employment Employees Rank Employment ' Brookdale Center 1,900 1 13.89% 1,700 1 10.85% Promeon, Division of Medtronics 1,350 2 9.87% 300 3 1.91% Independent School District #286 300 3 2.19% ' Cub Foods 160 4 1.17% City of Brooklyn Center 156 5 1.14% 350 2 2.23% Target 140 6 1.02% TCR Corporation 140 7 1.02% 175 5 1.12% Best Buy 100 8 0.73% ' Kohl's 100 9 0.73% Nations Care Link 100 10 0.73% Hoffman Engineering 270 4 1.72% Ault, Inc. 160 6 1.02% Graco,Inc. 100 7 0.64% Cass Screw Machine Products 125 8 0.80% Precision, Inc. 100 9 0.64% Haiwatha Rubber Company 85 10 0.54% Totals 4,446 32.51% 3,365 21.48% Source: Minnesota Department of Employment and Economic Development 153 CITY OF BROOKLYN CENTER, MINNESOTA FULL TIME CITY GOVERNMENT POSITIONS BY FUNCTION Table 17 Last ten fiscal years (Unaudited) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 General government Administrative 6.4 6.5 6.5 6.5 6.0 6.0 6.0 6.0 7.0 7.0 , Elections 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Finance 7.0 7.0 7.0 6.0 6.0 6.0 6.0 6.0 5.0 5.0 Assessor 4.0 4.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 50 ' Government buildings 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 . Information technology 1.0 1.0 1.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 Total general government 24.4 24.5 23.5 23.5 23.0 23.0 23.0 23.0 23.0 23.0 Public safety , Police Officers 42.0 42.0 42.0 42.0 42.0 42.0 42.0 43.0 46.0 46.0 ' Civilians 17.0 16.0 16.0 15.0 15.0 15.0 15.0 12.0 12.0 120 . Fire 1.0 1.0 1.0 1.0 1.0 1.0 2.0 2.0 2.0 2.0 Building inspection 5.0 5.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 Code enforcement - - - 2.0 5.0 Total public safety 65.0 64.0 63.0 62.0 62.0 62.0 63.0 61.0 66.0 69.0 Public works Engineering 10.0 10.0 10.0 8.0 7.0 7.0 6.0 6.0 5.0 6.0 ' Streets 10.9 10.9 11.0 11.0 10.0 9.0 10.0 10.0 11.0 10.0 Total public works 20.9 20.9 21.0 19.0 17.0 16.0 16.0 16.0 16.0 16.0 Parks and recreation ' Administration 6.0 6.0 6.0 5.0 6.0 6.0 6.0 6.0 6.0 6.0 Community center 5.5 5.5 5.0 5.0 3.0 3.0 3.0 3.0 3.0 3.0 Park maintenance 10.0 10.0 10.0 10.0 8.0 8.0 7.0 7.0 7.0 7.0 Total park and recreation 21.5 21.5 21.0 20.0 17.0 17.0 16.0 16.0 16.0 16.0 Economic development 4.6 4.5 4.5 4.5 4.0 4.0 4.0 4.0 4.0 4.0 Municipal liquor 4.0 4.0 3.0 3.0 3.0 3.0 3.0 4.0 4.0 4.0 t Golf course 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 , Earle Brown Heritage Center 13.0 13.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 Water 5.0 5.0 5.0 5.0 5.0 5.0 5.3 5.3 5.3 5.3 ' Sanitary sewer 2.0 2.0 2.0 2.0 2.0 2.0 2.3 2.3 2.3 2.3 Storm sewer - - - - - 1.0 1.4 1.4 1.4 1.4 ' Central garage 5.1 5.1 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 Total 166.5 165.5 160.0 156.0 150.0 150.0 151.0 150.0 155.0 158.0 Source: City Annual Budget documents , 154 rr r r r rr r r r� � r ■� r rr r r r r r r CITY OF BROOKLYN CENTER, MINNESOTA OPERATING INDICATORS BY FUNCTION Table 18 Last ten fiscal years (Unaudited) Function 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Police Violent Crimes 137 133 136 134 165 174 191 210 192 166 Serious Crimes 2,150 2,057 1,915 2,150 1,893 1,951 2,054 1,992 2,049 1,696 Total Calls for Service 23,543 26,501 25,644 25,945 26,328 26,738 28,644 34,185 36,923 44,152 Fire Fires /All other calls 695 658 681 617 545 692 697 677 684 688 Medical calls 299 305 373 331 279 212 326 386 419 538 Fire inspections performed 214 216 133 100 98 45 0 0 106 105 Streets Total miles 105.53 105.53 105.53 105.53 105.53 105.53 105.78 105.78 105.78 105.78 Miles of streets reconstructed 4.20 3.40 7.80 1.90 2.80 4.60 2.50 4.20 4.15 2.64 Parks and recreaton Community Center Admissions 61,836 67,476 42,873 66,427 62,458 59,288 61,680 61,022 60,323 61,272 v Acres of park maintained 527 527 527 527 527 527 527 527 527 527 Municipal liquor Number of stores 3 2 1 1 2 2 2 2 2 2 Sales (in thousands) $3,585 $3,552 $3,436 $3,408 $4,027 $4,610 $5,159 $5,475 $5,485 $5,610 Golf course Rounds sold 34,426 29,448 21,072 27,010 22,847 20,780 21,100 15,680 15,802 14,040 Earle Brown Heritage Center Bookings 813 757 579 572 577 579 611 570 522 421 Functions 2,129 2,145 2,105 1,527 1,734 1,725 1,870 1,720 1,412 1,178 Inn occupancy (average)' 46.70% 23.46% 7.23% 9.53% 8.14% 8.58% 11.55% 8.16% 4.00% 0.00% Water Connections 8,943 8,905 8,934 8,949 8,963 8,938 8,904 8,997 8,986 8,990 Miles of water mains 114.40 114.40 114.62 114.82 114.82 118.25 120.50 121.80 121.80 121.80 . Average daily consumption 3,715,142 3,638,490 3,127,214 3,723,769 3,551,104 3,697,790 3,609,903 3,621,122 3,550,126 3,733,602 Sanitary sewer Connections 8,774 8,764 8,786 8,798 8,799 8,804 8,807 8,793 8,837 8,837 Miles of sanitary sewer 105.51 105.51 105.61 105.61 105.61 105.61 105.61 105.61 105.61 105.61 Source: Various City departments Police indicators for current year are preliminary ' - in 2002 the Heritage Center Inn ceased daily occupancy and moved to a retreat concept with an 8 room minimum. In 2009, the Heritage Center Inn ceased operations. CITY OF BROOKLYN CENTER, MINNESOTA CAPITAL ASSET STATISTICS BY FUNCTION Table 19 Last ten fiscal years (Unaudited) Function 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Public safety Police Stations 1 1 1 1 1 1 1 1 1 1 Patrol units Marked squads 10 10 10 7 7 8 8 8 9 9 Other vehicles 16 21 15 13 16 16 16 16 14 18 Fire Stations 1 2 2 2 2 2 2 2 2 2 Fire trucks 7 7 7 7 7 7 7 7 7 7 Public works Streets (miles) 112.35 112.35 112.35 112.35 112.35 112.35 112.60 112.60 112.60 112.60 Heavy duty trucks (snow plows) 10 11 11 12 13 12 13 13 13 13 Parks and recreation Parks acreage 527 527 527 527 527 527 527 527 527 527 Trails (miles) 11.2 11.2 11.2 11.2 11.2 21.6 21.6 21.6 21.6 21.6 Community centers 1 1 1 1 1 1 1 1 1 1 Ground maintenance equipment 18 18 13 13 13 13 13 13 15 15 Other vehicles /equipment 20 21 12 11 14 14 14 14 15 14 Water Water mains (miles) 114.40 114.40 114.62 114.82 114.82 118.25 120.50 121.80 121.80 121.80 Wells 9 9 9 9 9 9 9 9 9 9 Sewer Sanitary sewers (miles) 105.51 105.51 105.61 105.61 105.61 105.61 105.61 105.61 105.61 105.61 Lift Stations 10 10 10 10 10 10 10 10 10 10 Storm sewers (miles) 74.20 74.20 74.20 74.20 74.20 74.20 74.20 74.20 74.20 74.20 Source: City capital asset records