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HomeMy WebLinkAboutCAFR-2014 Comprehensive Annual Financial Report For the year ended December 31, 2014 City of Brooklyn Center, Minnesota Member of the Government Finance Officers Association of the United States COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF BROOKLYN CENTER, MINNESOTA Cornelius L. Boganey City Manager Prepared By: FINANCE DIVISION DEPARTMENT OF FISCAL & SUPPORT SERVICES Nathan Reinhardt Finance Director Adam Flaherty Assistant Finance Director FOR THE YEAR ENDED DECEMBER 31, 2014 Member of Government Finance Officers Association of the United States and Canada CITY OF BROOKLYN CENTER, MINNESOT A TABLE OF CONTENTS Page No. INTRODUCTORY SECTIO N Letter of Transmittal1 Principal Officials8 Organizational Chart9 Certificate of Achievemen10 t FINANCIAL SECTIO N Independent Auditor's Repor11 t Management's Discussion and Analysis15 Basic Financial Statements Government-wide Financial Statements Statement of Net Positio27 n Statement of Activities28 Fund Financial Statements Governmental Fund s Balance Shee30 t Reconciliation of the Balance Sheet of the Governmental Fund s to the Statement of Net Positio33 n Statement of Revenues, Expenditures and Changes in Fund Balance34 s Reconciliation of the Statement of Revenues, Expenditures and Changes i n Fund Balances of the Governmental Funds to the Statement of Activitie36 s Statement of Revenues, Expenditures and Changes in Fund Balances: Budget-to-Actua l General Fun37 d Tax Increment District No. 3 Special Revenue Fun38 d Proprietary Funds Statement of Net Positio40 n Statement of Revenues, Expenses and Changes in Net Positio42 n Statement of Cash Flows44 Notes to the Financial Statements47 Required Supplementary Informatio n Schedule of Funding Progress - Other Postemployment Benefit81 s Combining and Individual Fund Statements and Schedules Governmental Fund s Nonmajor Governmental Fund s Combining Balance Shee86 t Combining Statement of Revenues, Expenditures and Changes in Fund Balance87 s Nonmajor Special Revenue Fund s Combining Balance Shee88 t Combining Statement of Revenues, Expenditures and Changes in Fund Balance90 s Nonmajor Capital Projects Funds Combining Balance Shee92 t Combining Statement of Revenues, Expenditures and Changes in Fund Balance93 s Schedule of Revenues, Expenditures and Changes in Fund Balances: Budget-to-Actua l General Fun94 d Special Revenue Fund s Housing and Redevelopment Authorit99 y CITY OF BROOKLYN CENTER, MINNESOT A TABLE OF CONTENTS 100 Economic Development Authorit y Community Development Block Gran 101 t Tax Increment District No. 3102 Tax Increment District No. 4103 City Initiatives Grant104 Debt Service Fun105 d Capital Projects Funds Capital Improvements106 Municipal State-Aid for Construction107 Infrastructure Construction108 Street Reconstructio109 n Technolog110 y Debt Service Fund by Accoun t Combining Balance Shee112 t Combining Schedule of Revenues, Expenditures and Changes in Fund Balance114 s Schedule of Revenues, Expenditures and Changes in Fund Balances: Budget-to-Actua l G.O. Improvement Bonds, 2004116 C G.O. Improvement Bonds, 2006117 A G.O. Improvement Bonds, 2008B118 G.O. Improvement Bonds, 2013B119 G.O. Tax Increment Bonds, 2013A120 G.O. Tax Increment Bonds, 2008A121 G.O. Tax Increment Bonds, 2004D122 Proprietary Funds Internal Service Funds Combining Statement of Net Positio124 n Combining Statement of Revenues, Expenses and Changes in Net Positio125 n Combining Statement of Cash Flow126 s STATISTICAL SECTION (UNAUDITED ) Financial Trends Net Position by Componen128 t Changes in Net Positio130 n Governmental Activities Tax Revenue by Sourc136 e Fund Balances of Governmental Fund138 s Changes in Fund Balances of Governmental Fund140 s Revenue Capacit y Assessed Tax Capacity and Estimated Actual Values of Taxable Property142 Property Tax Rates - Direct and Overlapping Government144 s Principal Property Taxpayers146 Property Tax Levies and Collections147 Debt Capacity Ratios of Outstanding Debt by Typ148 e Ratios of General Bonded Debt Outstandin149 g Computation of Direct and Overlapping Deb150 t Legal Debt Margin Informatio152 n Pledged Revenue Coverag154 e Demographic and Economic Informatio n Demographic and Economic Statistics155 Principal Employers156 Operating Informatio n Full-Time City Government Positions by Functio157 n Operating Indicators by Function158 Capital Asset Statistics by Function159 LƓƷƩƚķǒĭƷƚƩǤ {ĻĭƷźƚƓ City of Brooklyn Center A Millennium Community May 18, 2015 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, 2014. 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 opinion 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, often called the “Single Audit” report. That Single Audit report is required for 2014 because the City received more than $500,000 in total federal grants. It has been issued under separate cover. 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. The City has operated under the council-manager form of government since the adoption of the City Charter in 1966. The governing body is comprised of the Mayor and four Council Members elected at large. All members serve four-year terms with two of the Council Members standing for election during each national election year cycle. The Mayor and Council Members hire a City Manager who is responsible for the daily operations of the City. 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center, MN 55430-2199 (763) 569-3400 City Hall and TDD Number (763) 569-3300 FAX (763) 569-3434 FAX (763) 569-3494 www.cityofbrooklyncenter.org The City provides a full range of municipal services to its citizens. These include police and fire protection and services, zoning and code enforcement, municipal 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, an executive nine-hole 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 30 of each year for the ensuing year’s collection. This establishes a maximum levy that may subsequently be lowered but not raised. Effective establishment of this levy requires that a preliminary budget be prepared. The City Manager, with the assistance of staff, prepares such a budget each year 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 meetings in each taxing jurisdiction. The City’s meeting includes information about the budget, the property tax levy and the priorities of the City Council for the coming year as reflected by the budget allocations proposed. Public comment is received and considered at this meeting. 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 are reviewed and reprioritized each year. For the last several years the City Council has remained focused on the achievement of strategic goals. City financial planning, policies, spending and initiatives reflect these goals. The City Council adopted the five strategic priorities of Civic Engagement, Focused Redevelopment, Community Image, Financial Stability and Vibrant Neighborhoods defined as follows: Civic Engagement In order to clearly understand and effectively respond to community needs, the City will consistently seek the input from a broad range of stakeholders from the general public, non-profit and for profit sectors. Efforts to engage the community will be transparent and responsive. Our engagement efforts will be deliberately inclusive and culturally sensitive. Focused Redevelopment Redevelopment and renewal of commercial, industrial and residential property is essential to the health and vitality of the City. The City will lead efforts to maintain and increase the value of private properties and will make the necessary supporting infrastructure investments. We will encourage entrepreneurial investment and make strategic public investments to create jobs and grow the City’s tax base. Community Image Our ability to attract and retain citizens and businesses is directly influenced by the perception of the City. We will take specific actions to assure that Brooklyn Center is recognized as a high quality, attractive and safe community. We will accomplish this by providing exceptional customer experience, vibrant neighborhoods and a sense of community thereby attracting private investment. Financial Stability We will maintain a positive financial position with a long term perspective by diversifying revenue sources, aligning fees to adequately reflect service costs, stabilizing property taxes while reducing the City’s reliance on State shared revenues, and ensuring that revenues are adequate to fund services and infrastructure needs. Vibrant Neighborhoods Neighborhoods will be attractive, safe, inclusive of a diverse housing stock with owner occupied and quality rental properties. Citizens will feel connected to each other and the natural environment will be protected and preserved for the enjoyment of future generations. Local Economy Brooklyn Center is a mature, fully developed first ring suburb of Minneapolis. With its affordable housing, excellent schools, beautiful parks, and convenient transportation access it has the attributes to continue as a vibrant community for many years to come. 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 2010 Census estimates the population for Brooklyn Center at 30,104. The number of housing units has decreased from 11,704 in 1990 to an estimated 10,756 units in the 2010 Census. As in many mature, first-ring suburbs there is a trend toward conversion of single family homes to rental properties. The City’s taxable market value is $1,489,548,076 for taxes payable 2015, which is an increase of $160,279,648 or 12.1 percent from last year. The taxable market value increase is driven by large increase in residential (19.9%) and apartment (12.0%). The total tax capacity of the City is estimated at $20,720,321 compared to $19,665,833 in 2014, which is an increase of $1,054,488 (5.4%). The increase in tax capacity has resulted in the first decrease in the City property tax rate since 2008. Residential housing makes up 45.7% of the 2015 tax capacity base which is an increase of 3.2% from the 2014 tax capacity base, while the industrial portion of the tax base decreased by 2.8%. According to the Hennepin County Assessor’s Office, for the valuation used to calculate the 2015 property tax payments, the median value home in Brooklyn Center is $131,400 compared to $114,200 in the previous valuation. 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: redevelopment and renewal of the commercial and industrial 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 receipts for fiscal year 2014 totaled $914,651. City issued building permits in 2014 had a total permit value of $76,355,183, which is an increase from $42,052,442 in 2013. Thirty-two large projects (over $200,000) occurred in 2014, compared to 22 in 2013. Long Term Financial Planning The State of Minnesota has provided significant funding to local governments through the Local Government Aid (LGA) program over the past three decades. Funding shortfalls at the State budgetary level have affected the allocation and distribution of LGA negatively. However in 2013, the State’s tax bill included an increase and a new formula for the distribution of LGA beginning in 2014. For the City of Brooklyn Center the certified LGA under the new formula for 2014 is $1,352,440, which is an increase of $941,062 from 2013. The City maintains a comprehensive Capital Improvement Plan to facilitate the replacement of its aging infrastructure. When streets are reconstructed in this program, aging water, sanitary and storm sewer infrastructure is also repaired or replaced. These improvements are funded by a combination of general obligation improvement bonds supported with special assessments against benefited properties and cash 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 and the Plan is reviewed and amended as a part of each budget cycle. In addition, cash flows for all funds providing financing for the Plan are updated for cash flow projections during the 15 year timeframe of the Plan. The Capital Improvements Plan projects completion of the first citywide round of reconstruction of the streets and utilities throughout the entire community by 2021. An additional benefit of these neighborhood projects has been the increased investment by residents in their properties following reconstruction projects. The development of utility rate models and of non-utility cash flow projection models has improved the City’s ability to plan and generate cash for operations, scheduled maintenance and capital improvements. A plan for the maintenance and upgrading of the City’s buildings and facilities is being incorporated into spending plans for both operational repairs and for large capital expenditure type improvements. Major Initiatives A new water treatment plant is under construction and is expected to be up and running by the end of 2015. The (estimated) total cost of the water treatment plant is $19.98 million. Financing will be achieved through a low interest loan under the Drinking Water Revolving Loan Fund through the Minnesota Public Facility Authority (PFA) loan program. The loan will be repaid over twenty years at an interest rate of one percent. Water rates will be adjusted over the next three years to provide sufficient revenue for the annual loan repayments. Successful redevelopment continues to be the key to commercial and industrial tax base growth including: Shingle Creek Crossing, an 80-acre P.U.D. that includes the redevelopment of the former Brookdale Mall. In 2011, a significant portion of Brookdale Mall was removed and planned for redevelopment of a shopping center that included the existing Sears and Kohl’s department stores and the Applebee’s restaurant. The initial phase included the partial daylighting of Shingle Creek and the infrastructure improvements for an 183,000 square-foot Walmart store, 15 new building pads, and the renovation of 169,000 square-feet of the former Brookdale Mall. In 2012, the Walmart store was opened and construction began on a 38,000 square-foot building for LA Fitness and three retail buildings providing 29,134 square-feet of new commercial tenant space. nd In 2013, the 2 phase of the site improvements was completed. LA Fitness was opened and several tenant improvements within the three retail buildings were completed and the buildings occupied. Site plans were approved for the Discount Tire Store, a fourth multi-tenant retail building, and replacement of the food court portion of the former mall with ten retail buildings to facilitate several junior box retailers. Development activity scheduled for 2014 include the demolition of the 169,000 square-foot food court building with the immediate construction of 92,000 square-feet of retail buildings, the construction of an 11,200 square-foot multi-tenant building, the construction of a 6,673 square- foot multi-tenant retail/restaurant building and site plan approvals for the remaining four lots within the former Food Court lot. Major tenants scheduled to occupy these new retail spaces in the spring of 2015, include Michaels, TJ Maxx, Jimmy John Restaurant and Aspen Dental. Development planned for 2015 construction includes Discount Tire Store, an 11,200 square-foot multi-tenant retail building, an 11,200 square foot building for two restaurants, and the renovation of a 75,000 square-foot two story retail building (Kohl’s Department Store). The southern portion of the 80 acre Opportunity Site, comprises 46 acres planned for a mixed use commercial, office and residential P.U.D. A housing market study was completed by the McCombs Group and the architectural firm of ESG was retained to prepare a mixed use concept plan for this 46 acre site. On December 20, 2013, the EDA acquired the 23.2 acre Brookdale Square shopping center site which adjoins the EDA’s 8.4 acre former Brookdale Ford dealership property. In 2014, the EDA acquired an additional 1.6 acre site and has discussed future redevelopment plans with the four remaining businesses and/or property owner along John Martin Drive (the northern portion of this redevelopment area). In 2015, the EDA adopted the necessary findings of blighted building conditions that would qualify this area as a future Tax Increment Redevelopment District or a Renewal and Renovation District. Demolition of the building is scheduled to commence in spring of 2015. The EDA continues to pursue redevelopment opportunities for market rate apartments that include the type of units and amenities associated with move up housing options. Luther Auto Group has completed a major portion of their redevelopment plans for the 39 acres located on the north side of the I-694 and Brooklyn Boulevard interchange. The 2010 major renovations to the Chevrolet and Buick & GMC dealerships. The 2012 completion of a 52,228 square-foot Honda dealership and a 53,830 square-foot Toyota dealership. The 2013 approvals for the construction of a 42,360 square-foot Volkswagen dealership and a th 2.8 acre expansion of the Honda Dealership’s sales lot which will open up space for a 6 dealership along 694. In 2014, Luther demolished the old Honda dealership buildings and began construction of the new Volkswagen dealership and completed expansion of Honda sales lot. The Volkswagen dealership is scheduled to open in 2015. Additionally, Luther’s master plans for this area include the acquisition, demolition, and incorporation of two adjacent commercial buildings into the dealership lots. Redevelopment of industrial properties include: The completion of France Avenue IV Business Park, a 90,000 square-foot multi-tenant building in December of 2012 with the leasing completed in early 2015. In 2014, the Minnesota Department of Agriculture and the Minnesota Pollution Control Agency approved a Soils Investigation and Remediation Action Plan for the former Howe Fertilizer Site and adjoin railroad property which enabled the processing of applications for environmental cleanup funds from Hennepin County, DEED and the Met Council. The three grant applications totaling $1.45 million were approved and cleanup plans have begun that will enable the developer to proceed with the approved development of a 60,000 square foot multi-tenant building on this five acre industrial site. In 2014, Sign Zone completed the acquisition and renovation of the 140,000 square-feet of office/industrial space at the former Palmer Lake Plaza office industrial buildings which enabled Sign Zone plans to consolidate their business operations and have their corporate headquarters in Brooklyn Center. Additional development activities in 2014 include: The EDA acquired the former Chrysler Auto Dealership, also known as Cars with Heart, a 5 acre commercial site at 6121 Brooklyn Boulevard. The buildings have been demolished and the EDA has entered into a letter of intent for the redevelopment of this area for an assisted senior housing project consistent with the Brooklyn Boulevard Corridor Planning Study. The Northport Elementary School completed the expansion of their parking lot with a parent drop off zone, additional of a separate bus unloading area that also provides 38 parking stalls for park use during non-school hours, and new playfields which complement the Northport Community Park. The Three River Park District provided funding for a realignment of Twin Lakes Regional Trail Corridor within the eastern portion of planned renovation of the Lake Pointe Apartments. Additionally, planning for the 2016-17 construction of an extension of this regional trail along th 57 Avenue, east of State Highway 100, to connect to the Mississippi Regional Corridor has begun. The Brooklyn Boulevard bridge and trail improvements over State Highway 100 were completed and a cooperative grant application with Hennepin County has received favorable scoring for the funding of the reconstruction of the southern portion of the Brooklyn Boulevard Corridor Study (southern border of the City to Co. Rd. 10/Bass Lake Road). CITY OF BROOKLYN CENTER, MINNESOTA PRINCIPAL OFFICIALS December 31, 2014 NamePositionTerm of OfficeTerm Expires ELECTED OFFICIALS Tim WillsonMayorFour YearsDecember 31, 2014 Carol KlevenCouncil MemberFour YearsDecember 31, 2014 Kris Lawrence-AndersonCouncil MemberFour YearsDecember 31, 2016 Dan RyanCouncil MemberFour YearsDecember 31, 2014 Lin MyszkowskiCouncil MemberFour YearsDecember 31, 2016 APPOINTED OFFICIALS Cornelius L. BoganeyCity ManagerAppointed Charles LeFevreCity AttorneyContractual Appointee Sharon KnutsonCity ClerkAppointed Vickie SchleuningAssistant City Manager/Building and Community Standards DirectorAppointed Kevin BennerPolice ChiefAppointed Gary EitelBusiness and Development DirectorAppointed Lee GatlinFire ChiefAppointed James GlasoeCommunity Activities, Recreation and Services DirectorAppointed Steve LillehaugDirector of Public Works/City EngineerAppointed Nathan ReinhardtFinance DirectorAppointed 8 9 10 CźƓğƓĭźğƌ {ĻĭƷźƚƓ INDEPENDENT AUDITOR’S REPORT To the City Council and Management City of Brooklyn Center, Minnesota RFS EPORT ON THE INANCIAL TATEMENTS 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, Minnesota (the City) as of and for the year ended December 31, 2014, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. M’RFS ANAGEMENTSESPONSIBILITY FOR THE INANCIALTATEMENTS Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. A’R UDITORSESPONSIBILITY 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 from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design 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. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. (continued) 11 O PINIONS In our opinion, the financial statements referred to on the previous page 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, 2014, and the respective changes in financial position and, where applicable, cash flows thereof, and the budgetary comparison for the General Fund and budgeted major special revenue funds for the year then ended, in accordance with accounting principles generally accepted in the United States of America. OM THERATTERS Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis and the Schedule of Funding Progress, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial 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 required parts of the basic financial statements. The combining and individual fund statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. (continued) 12 ORRGAS THEREPORTINGEQUIRED BY OVERNMENT UDITING TANDARDS In accordance with Government Auditing Standards, we have also issued our report dated May 18, 2015 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. Minneapolis, Minnesota May 18, 2015 13 THIS PAGE INTENTIONALLY LEFT BLANK CITY OF BROOKLYN CENTER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2014 As management of the City of Brooklyn Center (the City), we offer readers of the City'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, 2014. 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 1-7 of this CAFR. Financial Highlights •The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $138,723,647 (net position). Of this amount, $19,176,961 (unrestricted net position) may be used to meet the City's ongoing obligations to citizens and creditors. •The City’s total net position increased by $3,343,455 (2.47%) from the previous year. A portion of this increase is attributed to General Fund revenues exceeding budget expectations by $549,372 and General Fund expenditures under budget by $862,576. The City received $646,175 in tax increment revenues more than the previous year, as a result of tax capacity increases within the tax increment financing districts. Additionally, the Debt Service fund had a net change in fund balance of $718,469 as a result of property tax and special assessment revenue collected in advance of the February debt payment on the 2013B General Obligation Bonds. •As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $46,205,188, which is an increase of $1,324,960 (2.95%) from the previous year. Of the total fund balance, $8,325,476 (18.02%) is unassigned, which is free from any internal or external constraints of its use. •The General fund has a fund balance of $11,020,081 at the close of the current fiscal year. During 2014, the fund balance decreased $1,362,632 (11.00%) from the previous year. The unassigned fund balance at year end is $10,089,353, which represents 52% of the following years budget. The remaining portion of the fund balance is nonspendable or assigned (for the capital improvement funding plan). •The City’s total outstanding bonded debt decreased by $2,045,000 during the current fiscal year, from $26,330,000 to $24,285,000. The City had no new debt issuances during 2014. 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 private-sector business. The statement of net position presents information on all of the City’s assets and liabilities, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. CITY OF BROOKLYN CENTER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2014 The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the 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, parks & recreation, economic development, and interest on long-term debt. The business- type activities of the City include: municipal liquor, golf course, earle brown heritage center, water utility, sanitary sewer utility, storm drainage utility, street light utility, and the recycling utility. The government-wide financial statements include not only the City itself (known as the primary government), but also a legally separate Housing and Redevelopment Authority and Economic Development Authority, for which the City is financially accountable. Although legally separate, these component units, function for all practical purposes as a department of the City, and therefore have been included as an integral part of the primary government. The government-wide financial statements can be found on pages 27 through 29 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 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 resources, 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 statements. 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 18 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 following: General fund, Tax Increment District No. 3, Tax Increment District No. 5, Debt Service, Capital Improvements, Municipal State Aid for Construction, and the Infrastructure Construction fund, which are considered to be major funds. Data from the other 11 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 comibing statements or schedules, elsewhere in this CAFR. CITY OF BROOKLYN CENTER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2014 The City adopts an annual appropriated budget for nearly all funds presented in this CAFR. A budgetary comparison statement has been provided in the basic financial statements for the General fund and the Tax Increment District No. 3 fund. The budgetary comparison statements for any nonmajor funds are provided elsewhere in this CAFR. The basic governmental fund financial statements can be found on pages 30 through 38 of this CAFR. Proprietary Funds: Proprietary funds provide similar information to the government-wide financial statements, but in more detail. 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 government-wide financial statements. The City uses enterprise funds to account for its: municipal liquor, golf course, Earle Brown Heritage Center, water utility, sanitary sewer utility, storm drainage utility, street light utility, and recycling utility. All of the City's enterprise funds are considered to be major funds, and separate information is provided for each of them in the basic financial statements. 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 to account for its: central garage, employee retirement, and compensated absences accumulations. All internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual data for the internal service funds is provided in the form of combining statements elsewhere in this CAFR. Because all of these services predominately benefit governmental rather than business-type functions, they have been included as governmental activities in the government-wide financial statements. The basic proprietary fund financial statements can be found on pages 40 through 45 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 47 through 80 of this CAFR. Other Information: In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information, which is a schedule of funding progress for other post-employment benefits (OPEB). The schedule of funding progress can be found on page 81 of this CAFR. The combining and budgetary comparison statements referred to earlier in connection with nonmajor governmental funds and internal service funds are presented immediately following the required supplementary information. Combining and budgetary comparison statements can be found on pages 86 through 126 of this CAFR. CITY OF BROOKLYN CENTER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2014 Government-wide Financial Analysis As noted earlier, net position may serve over time as a useful indictor of a government's financial position. In the case of the City, assets exceeded liabilities by $138,723,647 at the close of the most recent fiscal year. The largest portion of the City's net position ($91,484,709 or 65.95%) reflects its investment in capital assets, which includes: land infrastructure, buildings, and machinery & 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 OF BROOKLYN CENTER - SUMMARY OF NET POSITION Governmental ActivitiesBusiness-Type ActivitiesTotal 201420132014201320142013 Current and other assets $ 65,182,08960,464,701$ 11,047,209$ 15,413,732$ 71,511,910$ 80,595,821$ Capital Assets 49,201,20349,392,577 48,537,132 42,466,488 97,929,709 91,667,691 Total assets 114,383,292109,857,278 59,584,341 57,880,220 169,441,619 172,263,512 Long-term liabilities outstanding 24,180,32221,243,878 1,660,000 1,800,000 22,903,878 25,980,322 Other liabilities 9,497,3935,246,650 2,567,444 1,405,606 7,814,094 10,902,999 Total liabilities 33,677,71526,490,528 4,227,444 3,205,606 30,717,972 36,883,321 Net investment in capital assets 42,281,20342,947,577 48,537,132 42,466,488 91,484,709 84,747,691 Restricted 27,219,08628,061,977 - - 28,061,977 27,219,086 Unrestricte d 11,205,28912,357,196 6,819,765 12,208,126 19,176,961 23,413,415 Total Net Position $ 80,705,57883,366,750$ 55,356,897$ 54,674,614$ 138,723,647$ 135,380,192$ At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. A portion of the City’s net position (20.23%) represents resources that are subject to external restrictions on how they may be used. The remaining portion (13.82%) may be used to meet the City's ongoing obligations. The governmental activities have a significant decrease in current assets from the previous year. The largest factor in this decrease is with the cash & investments balances. Some of this decrease however, was due to an error by the County, who significantly over-settled the last property tax settlement of 2013. This amount was recorded as a liability to the County in 2013, which can be noted in the decrease of other liabilities. The business-type activities also have a large decrease in current assets from the previous year. This decrease is due to the City constructing a water treatment plant, which is also the reason for the large increase in capital assets over the previous year. The City has to front the cash for the project expenses, but then is reimbursed with debt proceeds from the Minnesota Public Facilities Authority (PFA) loan program. The governmental activities, also had a significant decrease in the amount of long-term liabilities from the previous year. The City retired $1,905,000 in governmental bonds outstanding during 2014. CITY OF BROOKLYN CENTER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2014 Governmental Activities Governmental activities resulted in an increase of the City's net position by $2,661,172 (79.59%), accounting for the majority of the City's increase in net position. Key elements of the changes are as follows: CITY OF BROOKLYN CENTER - CHANGES IN NET POSITION Governmental ActivitiesBusiness-Type ActivitiesTotal Revenues: 201420132014201320142013 Program revenues Charges for services $ 2,331,9732,607,035$ 19,383,056$ 18,866,176$ 21,990,091$ 21,198,149$ Operating grants and contributions 3,089,2201,746,637 63,547 52,775 1,810,184 3,141,995 Capital grants and contributions 4,427,5861,671,830 - - 1,671,830 4,427,586 General revenues Property taxes 14,943,00814,988,007 - - 14,988,007 14,943,008 Other taxes 3,979,8724,705,014 - - 4,705,014 3,979,872 Grants and contributions not restricted to specific programs 590,9161,499,015 - - 1,499,015 590,916 Unrestricted investment earnings (81,438)236,936 108,650 (27,223) 345,586 (108,661) Gain on disposal of assets 54,21127,100 - - 27,100 54,211 Total revenues 29,335,34827,481,574 19,555,253 18,891,728 47,036,827 48,227,076 Expenses: General government 3,165,4013,736,487 - - 3,736,487 3,165,401 Public safety 9,618,90610,186,645 - - 10,186,645 9,618,906 Public works 4,215,8553,688,238 - - 3,688,238 4,215,855 Community services 149,203145,503 - - 145,503 149,203 Parks and recreation 2,752,5392,977,707 - - 2,977,707 2,752,539 Economic development 3,833,9153,234,623 - - 3,234,623 3,833,915 Interest on long-term debt 490,162887,190 - - 887,190 490,162 Municipal liquor -- 5,690,792 5,674,937 5,690,792 5,674,937 Golf course -- 271,698 263,425 271,698 263,425 Earle Brown Heritage Center -- 5,137,712 4,835,131 5,137,712 4,835,131 Water utility -- 1,900,518 2,025,496 1,900,518 2,025,496 Sanitary sewer utility -- 3,514,687 3,382,810 3,514,687 3,382,810 Storm drainage utility -- 1,784,907 1,552,327 1,784,907 1,552,327 Street light utility -- 245,426 257,079 245,426 257,079 Recycling utility -- 291,239 289,043 291,239 289,043 Total expenses 24,225,98124,856,393 18,836,979 18,280,248 43,693,372 42,506,229 Change in net position before transfers 5,109,3672,625,181 718,274 611,480 3,343,455 5,720,847 Transfers 200,000675,257 (675,257) (200,000) - - Transfers - capital assets -(639,266) 639,266 - - - Change in net position 5,309,3672,661,172 682,283 411,480 3,343,455 5,720,847 et Position - January 1 N 75,396,21180,705,578 54,674,614 54,263,134 135,380,192 129,659,345 et Position - December 31 N$ 80,705,57883,366,750$ 55,356,897$ 54,674,614$ 138,723,647$ 135,380,192$ Governmental activities accounted for 79.59% of the increase in the City's net position. The change in net position from the previous year can be attributed to favorable budget variances in General Fund revenues and expenditures, additional local government aid received, and tax increment revenues. Additionally, the Debt Service fund collected property tax and special assessment revenue in advance of the debt payment due in February for the 2013B General Obligation Bonds. CITY OF BROOKLYN CENTER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2014 A significant change from the previous year is show in capital grants, mostly due to a municipal state aid receivable recognized as revenue in the government-wide statements. The City had completed a significant street infrastructure improvement project in 2013, which was funded from special assessments to the respective property owners and municipal state-aid construction grant funds. Governmental activities also has a large change in operating grants from the previous year. During 2013, the City was awarded Community Block Grant and Neighborhood Stablization Program Grant funds. The funding available from these grant funds were reduced in 2014. Below are specific graphs which provide comparisons of the governmental activities revenues and expenses: Function Expenses vs. Program Revenues 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 - GeneralPublic safetyPublic worksCommunityParks andEconomicInterest on governmentservicesrecreationdevelopmentlong-term debt ExpenseProgram Revenue Revenues by Source Other general revenues Investment earnings 5.6% Other taxes 0.9% 17.1% Charges for services 9.5% Operating grants 6.4% Capital grants 6.1% Property taxes 54.4% CITY OF BROOKLYN CENTER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2014 Business-type Activities Business-type activities increased net position by $682,283, which accounts for only 20.41% of the total growth in the City's net position. The factors contributing to this change are illustrated below: Function Expenses vs. Program Revenues 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 - MunicipalGolf courseEarle BrownWater utilitySanitaryStormStreet lightRecycling liquorHeritagesewer utilitydrainageutilityutility Centerutility ExpenseProgram Revenue Business-type Activities -Function Expenses Street Light Utility Storm drainage utility 1.3% Sanitary sewer utility 9.5% 18.7% Recycling utility 1.5% Water utility Municipal liquor 10.1% 30.2% Earle Brown Heritage Center Golf course 27.3% 1.4% The net position of the business-type activities increased, but operations of the Liquor Fund and Earle Brown Heritage Center provided for decreases in net position individually. The Liquor Fund transferred $362,190 of fund balance to provide funding to City capital projects. The Earle Brown Heritage Center had a positive cash flow in 2014, but a decrease in net position as a result of a large depreciation expense. CITY OF BROOKLYN CENTER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2014 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, unassigned 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 $46,205,188, which is an increase of $1,324,960 (2.95%) from the previous year. The unassigned fund balance, which is not subject to internal or external constraints upon its use, is $8,325,476, or 18.02% of total fund balance. A small portion of the fund balance, $21,967 (0.05%) is in nonspendable form. The remaining fund balance has either internal or external constraints upon its use, and can be broken down into the following components: $26,434,113 (57.21%) of restricted fund balance; $10,514,871 (22.76%) of committed fund balance; and $908,761 (1.96%) of assigned fund balance. A more detailed breakdown of fund balance components can be found in the basic financial statements. The General fund is the primary operating fund of the City. At the end of the current fiscal year, total fund balance is $11,020,081. As a measure of the General fund's liquidity, it may be useful to compare both unassigned and total fund balance, to total fund expenditures. Unassigned balance, which is $10,089,353, represents 57.64% of the current year General fund expenditures. Total General fund balance represents 62.96% of those same expenditures. The fund balance of the City’s general fund decreased by $1,362,632 (11.00%) from the previous year. The City had budgeted for a break-even year in 2014, however the City Council approved a transfer to the Capital Improvements Fund of $2,754,124 of available fund balance. Prior to the transfer the City had an increase in fund balance, which was attributed to positive variances for both revenues and expenditures. Revenues were in excess of budget due to building permit revenue exceeding expectations and additional intergovernmental revenue, mainly as a result of additional police and fire state pension aid. The most significant expenditure budget variance was in the police department, due to the patrol division being short handed in the personnel area for a majority of 2014 and lower fuel costs. The Tax Increment District No. 3 fund has a total fund balance of $17,898,749 at the end of the year. The increase in fund balance was $70,758 (0.40%) from the previous year. The fund received $3,038,983 in tax increment revenues, which exceeded the budget amount by $100,333. As of December 31, 2014 the fund has total assets held for resale of $15,623,075, which was an increase of $1,847,900. The Tax Increment District No. 5 fund has a total fund balance deficit of $1,299,859 at the end of the year. The increase in fund balance was $132,636 (9.26%) from the previous year. The fund received tax increment revenues of $292,064 and a pay as you go payment on a tax increment note of $114,405. As of December 31, 2014 the fund had notes oustanding of $1,210,000 and an advance from Tax Increment District No. 2 outstanding of $2,442,676. The Debt Service fund has a total fund balance of $1,909,441 at the end of the year. The increase in fund balance was $718,469 (60.33%) from the previous year. The increase in fund balance is primarily the result of property tax and special assessment revenue collected in advance of the February 2015 debt payment on the 2013B General Obligation Bonds. 509,230, an increase of $3,436,472 (111.84%) from the previous The Capital Improvements fund has a total fund balance of $6, year. The increase in fund balances is the result of the City Council implementing a Capital Projects Funding Policy during 2014. The results of that policy were $3,116,314 of transfers in, which was the primary result for the increased fund balance. The Municpal State Aid Construction fund has a total fund balance of $1,830,100 at the end of the year. The decrease in fund balance was $493,622 (21.24%) from the previous year. As of December 31, 2014 the fund had a receivable balance in the amount of $1,077,504 in Municipal State Aid Construction funds. CITY OF BROOKLYN CENTER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2014 The Infrastructure Construction fund has an ending deficit fund balance of $463,193 a decrease of $1,433,335 (147.74%) from the previous year. The fund incurred $1,542,554 of capital expenditures during the year for the Wangstad neighborhood re-construction project. The Infrastructure Construction fund transferred $2,785,269 to the Streets Reconstruction fund to allocate the proceeds of the 2013B G.O. Improvement bonds, as total project costs were not known at the time of the bond issuance. As part of the completion of the Kylawn Area Infrastructure Improvements project, there was a total of $1,922,693 of transfers between the following funds: Municipal State-Aid for Construction, Infrastructure Construction, Streets Reconstruction, Water Utility, Sanitary Sewer Utility, Storm Drainage Utility and Street Light Utility. Proprietary Funds: The City's proprietary funds provide the same type of information presented as business-type activities found in the government-wide financial statements, but in more detail. The enterprise funds have a combined ending net position of $55,702,048, of which $7,164,916 (12.86%) is unrestricted and can be used to meet the operations. As a measure of the liquidity of the enterprise funds, it may be useful to compare the unrestricted net position to the operating expenses. For the current year, unrestricted net position is 58.10% of the current year operating expenses. Other factors concerning the finances of these funds have already been addressed in the discussion of the City's business-type activities. General Fund Budgetary Highlights During the year, there were no amendments to the General Fund budget. Actual revenues and other financing sources exceeded the adopted budget by $528,916. The major contributors to this were increases in licenses and permits for redevelopment activities, additional revenues related to rental dwelling conversions and inspections, and the receipt of additional police and fire state pension aid. Actual expenditures and other financing uses were higher than the final budget for the year by $1,891,548. This was the result of a transfer of $2,754,124 to the Capital Improvement Fund in accordance with City policy to transfer unassigned fund balance of the General Fund that exceeds 52% of General Fund budgeted expenditures following the completion of the annual audit. The reduction in fund balance from the transfer was partially offset in savings from several staff positions being left unfilled during a portion of 2014, in the Police Department and General Government Buildings. CITY OF BROOKLYN CENTER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2014 Capital Asset and Debt Administration Capital Assets: The City's investment in capital assets for its governmental and business-type activities at the end of the current year, amounts to $97,929,709 (net of accumulated depreciation). This investment in capital assets includes: land, buildings, infrastructure, machinery and equipment and construction in progress. The City's investment in capital assets increased $6,262,018 (6.83%) from the previous year. Major capital asset events during the current year included the following: •The Wangstad Neighborhood infrastructure reconstruction project is near completion, with $3,697,737 of additions to construction in progress. This amount includes work on streets, as well as water, sewer and storm utilities. •The City started construction of a water treatment plant. At the end of 2014, the City had completed $4,727,774 of the $19,662,352 project. The project is being funded through a low interest loan with the Minnesota Public Facilities Authority. •The Central Garage replaced 15 pieces of machinery & equipment during the year. The total outlay for machinery and equipment during the year was $645,689. The additions include, but are not limited to: a trackless sidewalk snow plow, mower, police vehicles and multipurpose public works trucks. CITY OF BROOKLYN CENTER - CAPITAL ASSETS (net of depreciation) Governmental ActivitiesBusiness-type ActivitiesTotal 201420132014201320142013 Land $ 3,537,4733,537,473$ 3,194,983$ 3,194,983$ 6,732,456$ 6,732,456$ Easements 99,67095,132 16,039 20,102 111,171 119,772 Construction in progress 3,375,9553,276,213 8,425,511 2,793,558 11,701,724 6,169,513 Land improvements -- 196,571 213,198 196,571 213,198 Other park improvements 6,087,6965,955,889 - - 5,955,889 6,087,696 Buildings and structures 8,375,0537,718,930 3,441,378 4,010,475 11,160,308 12,385,528 Machinery and equipment 3,931,8503,763,003 297,976 349,008 4,060,979 4,280,858 Streets 23,793,50625,045,937 - - 25,045,937 23,793,506 Street light systems -- 630,342 575,610 630,342 575,610 Mains and lines -- 32,334,332 31,309,554 32,334,332 31,309,554 Total $ 49,201,20349,392,577$ 48,537,132$ 42,466,488$ 97,929,709$ 91,667,691$ Additional information on the City’s capital assets can be found in Note 3 (C) on pages 62 through 63 of this CAFR. CITY OF BROOKLYN CENTER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2014 Long-Term Debt: At the end of the current year, the City had outstanding long-term bonded debt of $24,285,000. CITY OF BROOKLYN CENTER - OUTSTANDING DEBT Governmental ActivitiesBusiness-type ActivitiesTotal 201420132014201320142013 General obligation tax increment bonds16,040,000$$17,470,000$ -$ 16,040,000-$$ 17,470,000 General obligation improvement bonds6,445,0006,920,000- 6,445,000-6,920,000 General obligation revenue bonds- 1,800,000-1,940,0001,800,0001,940,000 Compensated absences1,282,0931,232,551- 1,282,093-1,232,551 Net OPEB obligation629,994586,026- 629,994-586,026 Total$24,397,087$26,208,577$1,800,000$1,940,000$26,197,087$ 28,148,577 The City’s total bonded debt decreased $2,045,000 (7.77%) from the previous year. The City reduced its bonded debt during the year by paying off $2,045,000 of principal on previously issued bonds. The City’s bond rating is AA from Standard & Poor’s Ratings Services. 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 $39,878,053. The City does not currently have any debt outstanding that is applicable to the limit. Additional information on the City’s long-term debt can be found in Note 3 (F) on pages 67 through 69 of this CAFR. Economic Factors and Next Year's Budget and Rates All of these factors were considered in the preparation of the City’s budget for the 2015 fiscal year. •The unemployment rate for the City is 3.60% at the end of the 2014 fiscal year, which is a decrease from the rate of 5.10% a year ago. This compares to the State’s average unemployment rate of 3.60% and the national average of 5.40%. •An increase in estimated taxable market value of 12.1 percent from taxes payable 2014 to 2015. The taxable market value increase is driven by significant increases in residential (19.9%) and apartment (12.08%). •Continuing redevelopment throughout the City will yield net growth in tax base and stability in tax base along with providing job growth in the City. •Development activity in 2014 of the Shingle Creek Crossing site, included the demolition of the 169,000 square-foot food court building with the immediate construction of 92,000 square-feet of retail buildings, the construction of an 11,200 square-foot multi-tenant building, the construction of a 6,673 square-foot muti-tenant retail/restaurant building and site plan approvals for the remaining four lots within the former food court lot. Major tenants scheduled to occupy these new retail spaces in the spring of 2015, include Michaels, TJ Maxx, Jimmy John's Restaurant and Aspen Dental. •Development planned for 2015 construction includes a Discount Tire Store, an 11,200 square foot multi-tenant retail building, an 11,200 square foot multi-tenant building, an 11,200 square foot building for two restaurants and the renovation of a 75,000 square foot two story retail building. CITY OF BROOKLYN CENTER, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2014 •In December 2013 the EDA purchased a 23.2 acre property formerly known as the Brookdale Square shopping center which adjoins the EDA's 8.4 acre former Brookdale Ford dealership site. The EDA continues to pursue redevelopment opportunities for market rate apartments that include the type of units and amenities associated with move up housing options. •Luther Auto Group has completed a major portion of their redevelopment plans for the 39 acres located on the north side of the I-694 and Brooklyn Boulevard interchange. In 2014, Luther began the construction of the new Volkswagen dealership and completed the expansion of the Honda sales lot. The Volkswagen dealership is scheduled to open in 2015. •Hennepin County, Minnesota Department of Employment and Economic Development (DEED), and the Metropolitan Council approved three grant applications totalling $1.45 million to complete a soils investigation and remediation action plan for the former Howe Fertilizer Site. This enables development of an approved 60,000 square-foot multi-tenant building on the five acre industrial site. •In 2014 the EDA acquired the former Chrysler Auto Dealership, a five acre commercial site at 6121 Brooklyn Boulevard. The buildings have been demolished and the EDA has entered into a letter of intent for the redevelopment of this area for an assisted senior housing project. •Construction is underway of a water treatment plant, which will reduce the level of manganese from our water supply. The water treatment plant is currently under construction and is expected to be up and running by the end of 2015. The estimated total cost for the water treatment plant is $19.98 million. Financing will be achieved through a low interest loan under the Drinking Water Revolving Fund through the Minnesota Public Facilities (PFA) loan program. The loan will be repaid over twenty years at an interest rate of one percent. As of December 31, 2014 the City had not drawn down any of these funds, however the City incurred expenses for the construction of the water treatment plant. The City received its first reimbursement on January 30, 2015 in the amount of $4,468,266. •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. On January 1, 2015 the sanitary sewer utility quarterly base charge increased from $74.70 to $78.45 and the recycling quarterly charge increased from $8.94 to $9.21. •Beginning on April 1, 2015 the water utility rates increased for both base and consumption charges. The quarterly base charge of $8.20 per residential and commercial irrigation meter increased to $10.00 per meter. The consumption charge of $1.36 per 1,000 gallons (up to 30,000 gallons per quarter), increased by $0.30 per 1,000 gallons. Multi-family, commercial and industrial properties pay a quarterly base charge depending on the size of the meters and a consumption rate per 1,000 gallons. The consumption rate increased $0.37 to $2.07 per 1,000 gallons. The City’s policy is to maintain a General fund unassigned fund balance of 50% - 52% of the ensuing year’s budgeted General fund operations. In January 2014, the City Council adopted a capital project funding policy that transfers the amount of fund balance exceeding 52% to the Capital Improvements fund following the completed audit of the City's CAFR. The City transferred $2,754,124 for Capital Improvements from the General Fund. The City has assigned $908,761 (the amount exceeding 52%) for capital improvements within the General Fund. Total unassigned and assigned fund balance at the end of 2014 was $10,998,114 (56.68%) of the adopted 2015 budgeted expenditures. Requests for Information This financial report is designed to provide a general overview of the City of Brooklyn Center's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Director of Finance, 6301 Shingle Creek Parkway, Brooklyn Center, MN 55430. .ğƭźĭCźƓğƓĭźğƌ {ƷğƷĻƒĻƓƷƭ CITY OF BROOKLYN CENTER, MINNESOTA STATEMENT OF NET POSITION December 31, 2014 GovernmentalBusiness-Type ActivitiesActivitiesTotal ASSETS Cash and investments32,282,209$ 12,249,705$ 44,531,914$ Receivables: Accounts - ne316,6302,185,3852,502,015 t Taxes229,288 - 229,288 Special assessments4,170,019 485,805 4,655,824 Internal balances4,834,218 (4,834,218) - Due from other government1,216,7585,5601,222,318 s Prepaid items- 211,781 211,781 Inventories45,504 743,191 788,695 otes receivable1,210,000-1,210,000 N Assets held for resale16,160,075 16,160,075- Capital assets: ondepreciable6,902,39011,630,77918,533,169 N Depreciable42,490,18736,906,35379,396,540 Total assets109,857,27859,584,341169,441,619 LIABILITIES Accounts payable864,7061,632,4772,497,183 Accrued salaries and wages565,744108,984674,728 Accrued interest payable368,87931,631400,510 Due to other government 72,02179,891 151,912 s Deposits payable213,121 354,275 567,396 Unearned revenue1,100 228,056 229,156 Compensated absences payable: Due within one yea128,209-128,209 r Due in more than one yea1,153,884-1,153,884 r et OPEB obligation: N Due in more than one yea629,994-629,994 r Bonds payable: Due within one yea3,025,000140,0003,165,000 r Due in more than one yea 1,660,00019,460,000 21,120,000 r Total liabilities26,490,528 4,227,444 30,717,972 NET POSITION Net investment in capital assets42,947,577 48,537,132 91,484,709 Restricted for: Statutory housing obligations772,843 - 772,843 Tax increment financing20,030,161 - 20,030,161 Economic development1,542,349 - 1,542,349 Law enforcement enhancements98,321 - 98,321 Community amphitheater309,548 - 309,548 Debt service3,478,655 - 3,478,655 State-aid street systems1,830,100 - 1,830,100 Unrestricted12,357,196 6,819,765 19,176,961 Total net positio$83,366,750$55,356,897$138,723,647 n The notes to the financial statements are an integral part of this statement. CITY OF BROOKLYN CENTER, MINNESOTA STATEMENT OF ACTIVITIES For the Year Ended December 31, 2014 Charges For FUNCTIONS/PROGRAMS ExpensesServices Government activities: General governmen$3,736,487$ 651,188 t Public safety10,186,645 722,697 Public works3,688,238 157,889 Community services145,503 - Parks and recreation2,977,707 598,173 Economic development3,234,623 477,088 Interest on long-term debt887,190 - Total government activities24,856,393 2,607,035 Business-type activities: Municipal liquor5,690,792 5,861,066 Golf course271,698 365,497 Earle Brown Heritage Center5,137,712 4,578,433 Water utilit1,900,518 2,235,332 y Sanitary sewer utilit3,514,687 3,942,534 y Storm drainage utilit1,784,907 1,638,575 y Street light utilit 454,958245,426 y Recycling utilit 306,661291,239 y Total business-type activities18,836,979 19,383,056 Total43,693,372$ 21,990,091$ The notes to the financial statements are an integral part of this statement. Program RevenuesNet (Expense) Revenue and Changes in Net Position OperatingCapital Grants andGrants andGovernmentalBusiness-Type ContributionsContributionsActivitiesActivitiesTotal $ -$ (3,085,299)-$$-$ (3,085,299) 1,146,485 (8,317,463)-- (8,317,463) 110,000 1,661,044(1,759,305)- (1,759,305) - -(145,503)- (145,503) 68,287 10,786(2,300,461)- (2,300,461) 421,865 (2,335,670)-- (2,335,670) - -(887,190)- (887,190) 1,746,637 1,671,830 (18,830,891) (18,830,891)- - --170,274 170,274 - --93,799 93,799 - --(559,279) (559,279) 47,660 --382,474 382,474 15,887 --443,734 443,734 - --(146,332) (146,332) - --209,532 209,532 - --15,422 15,422 63,547--609,624 609,624 $ 1,810,184$ 1,671,830(18,830,891)609,624 (18,221,267) General revenues: Property taxes14,988,007- 14,988,007 Tax increments3,790,363- 3,790,363 Lodging taxes914,651- 914,651 Grants and contributions not restricted to specific programs1,499,015- 1,499,015 Unrestricted investment earnings236,936108,650 345,586 Gain on disposal of capital asset27,100- 27,100 Transfers 675,257 (675,257) - Transfers - capital assets (639,266) 639,266 - Total general revenues and transfers 21,492,063 72,659 21,564,722 Change in net position2,661,172682,283 3,343,455 Net position - January 1 80,705,578 54,674,614 135,380,192 et position - December 31$83,366,750$55,356,897$ 138,723,647 N CITY OF BROOKLYN CENTER, MINNESOTA BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2014 TaxTax IncrementIncrement GeneralDistrict No. 3District No. 5 ASSETS Cash and investments$ 11,600,967$ 2,336,256$ 258,681 Receivables: Accounts - net 88,900 - - Current taxes 81,372 - - Delinquent taxes 58,298 54,347 9,784 Special assessments 171,140 - - Due from other funds 153,810 - - Due from other governments 22,677 - - Notes receivable - 1,210,000- Inventories 21,967 - - Advances to other funds - - - Assets held for resale 15,623,075- - Total assets12,199,13118,013,6781,478,465 LIABILITIES Accounts payable 222,294 8,151 114,405 Accrued salaries and wages 534,292 - - Due to other funds - - - Due to other governments 24,383 52,431 1,459 Deposits payable 177,546 - - Unearned revenue 1,100 - - Advances from other funds - 2,442,676- Total liabilities 959,615 60,582 2,558,540 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - property taxes 58,298 - - Unavailable revenue - tax increments - 54,347 9,784 Unavailable revenue - special assessments 161,137 - - Unavailable revenue - notes receivable- 210,000- Unavailable revenue - intergovernmental - - - Total deferred inflows of resources 219,435 54,347 219,784 FUND BALANCES (DEFICITS) Nonspendable 21,967 - - Restricted 17,898,749- - Committed - - - Assigned 908,761 - - Unassigned 10,089,353 (1,299,859)- Total fund balances (deficits) 11,020,081 17,898,749 (1,299,859) Total liabilities, deferred inflows of resources and fund balances (deficits)$12,199,131$18,013,678$1,478,465 The notes to the financial statements are an integral part of this statement. Municipal State AidOther DebtCapitalforInfrastructureNonmajorTotal ServiceImprovementsConstructionConstructionGovernmentalGovernmental $ 1,991,1621,893,032$ 1,830,100$ -$ 5,724,549$ 25,634,747$ -- - 47,797 161,615 298,312 2223,220 - - 1,478 86,292 9,8935,546 - - 5,128 142,996 2,5931,946,836 - 2,049,450 - 4,170,019 3,724,957- - - - 3,878,767 -- 1,077,504 - 116,577 1,216,758 -- - - - 1,210,000 -- - - - 21,967 792,488- - - 2,442,676 3,235,164 -- - - 537,000 16,160,075 6,521,3153,848,634 2,907,604 2,097,247 8,989,023 56,055,097 -1,925 - 335,135 128,412 810,322 -- - - 17,699 551,991 - - 182,188- 182,188- - - - - 1,570 79,843 - - - - 35,575 213,121 - - - - - 1,100 - - - - 2,442,676- 1,925 - 517,323- 183,256 4,281,241 5,546 9,893 - - 5,128 78,865 - - - - - 64,131 1,931,722 2,192 2,043,117- 4,138,168- - - - - 210,000- - 1,077,504- - 1,077,504- 1,937,268 12,085 1,077,504 2,043,117 5,128 5,568,668 - - - - - 21,967 1,910,266 1,830,100- 4,794,998- 26,434,113 4,005,641- 10,514,871 6,509,230- - - - - - 908,761- (825) - (463,193)- 8,325,476- 1,909,441 6,509,230 1,830,100 (463,193) 8,800,639 46,205,188 $ 3,848,634$ 6,521,315$ 2,907,604$2,097,247$8,989,023$ 56,055,097 32 CITY OF BROOKLYN CENTER, MINNESOTA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION December 31, 2014 Fund balances - governmental funds$ 46,205,188 Amounts reported for the governmental activities within the statement of net position are different because: Capital assets used in governmental activities are not financial resources, and therefore, are not reported as assets in governmental funds. Cost of capital assets 79,344,461 Accumulated depreciation (33,644,735) Long-term liabilities, including bonds payable, are not due and payable in the current period, and therefore, are not reported as liabilities in governmental funds. Bonds payable (22,485,000) Accrued interest payable (368,879) Some receivables are not available soon enough to pay for the current period's expenditures, and therefore, are unavailable in governmental funds. Delinquent property taxes receivable 78,865 Delinquent tax increments receivable 64,131 Special assessments receivable 4,138,168 Interest on notes receivable 210,000 Intergovernmental receivable 1,077,504 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 position.8,747,047 Total net position - governmental activities83,366,750$ The notes to the financial statements are an integral part of this statement. 33 CITY OF BROOKLYN CENTER, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended December 31, 2014 TaxTax IncrementIncrement GeneralDistrict No. 3District No. 5 S REVENUE Property taxes$ 14,077,130$ -$ - Tax increments 3,038,983- 292,064 Franchise fees - - - Lodging taxes 914,651 - - Licenses and permits 1,021,410 - - Intergovernmental 1,401,447 - - Charges for services 810,597 363,788 - Special assessments 128,138 - - Fines and forfeits 312,130 - - Investment earnings (net of market value adjustment) 61,770 23,123 880 Miscellaneous 138,349 32,843 - Total revenues 18,865,622 3,458,737 292,944 S EXPENDITURE Current: General government2,736,593 - - Public safety9,444,438 - - Public works1,963,110 - - Community services145,503 - - Parks and recreation2,402,766 - - Economic development434,459 936,949 160,308 Nondepartmental364,501 - - Capital outlay: General government8,453 - - Public works- - - Parks and recreation3,851 - - Economic development- 377,685 - Debt service: Principal- - - Interest- - - Fiscal agent fees- - - Total expenditures17,503,674 1,314,634 160,308 Excess (deficiency) of revenues over (under) expenditures 1,361,948 2,144,103 132,636 OTHER FINANCING SOURCES (USES) Transfers in 129,544 - - Transfers out (2,854,124) (2,073,345) - Total other financing sources (uses) (2,724,580) (2,073,345) - Net change in fund balance (1,362,632) 70,758 132,636 Fund balances (deficits) - January 1 - Restated 12,382,713 17,827,991 (1,432,495) Fund balances (deficits) - December 31$11,020,081$17,898,749$ (1,299,859) The notes to the financial statements are an integral part of this statement. Municipal State AidOther DebtCapitalforInfrastructureNonmajorTotal ServiceImprovementsConstructionConstructionGovernmentalGovernmental $ 2,156678,966$ -$ -$ 278,350$ 15,036,602$ -- - - 464,661 3,795,708 -- - - 647,071 647,071 -- - - - 914,651 -- - - - 1,021,410 580,133- 110,000 - 614,719 2,706,299 38- - 45,405 9,685 1,229,513 1,938674,253 - 989,797 - 1,794,126 -- - - 52,797 364,927 34,0828,836 17,922 1,536 40,764 188,913 81,217- - 31,229 61,052 344,690 699,5641,362,055 127,922 1,067,967 2,169,099 28,043,910 -- - - 436,689 3,173,282 -- - - 177,801 9,622,239 - - 89,544 55,305 2,107,959- - - - - 145,503- - - - - 54,856 2,457,622 - - - 1,324,267- 2,855,983 - - - - 364,501- - - - - 76,333 84,786 - 250,000- 1,542,554 1,311,905 3,104,459 379,406- - - 383,257- - - - - 377,685- 1,905,000 - - - 1,905,000- 802,892 - - - 802,892- 9,039 - - - - 9,039 2,716,931 379,406 339,544 1,597,859 3,381,851 27,394,207 (1,354,876) 320,158 (211,622) (529,892) (1,212,752) 649,703 1,902,259 3,164,033 10,463,495 2,073,345 3,116,31478,000 - (360,000)- (2,805,702) (1,695,067) (9,788,238) 2,073,345 3,116,314 (282,000) (903,443) 1,468,966 675,257 718,469 3,436,472 (493,622) (1,433,335) 256,214 1,324,960 1,190,972 3,072,758 2,323,722 970,142 8,544,425 44,880,228 $ 1,909,441$ 6,509,230$ 1,830,100$(463,193)$8,800,639$46,205,188 CITY OF BROOKLYN CENTER, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2014 Total net change in fund balances - governmental funds1,324,960$ Amounts reported for governmental activities in the statement of activities are different because: 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 as depreciation. Capital outlays3,353,244 Depreciation expense(2,392,916) Contributions of capital assets to the proprietary funds decrease net position in the statement of activities, but do not appear in the governmental funds because they are not financial resources.(639,266) The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Principal repayments1,905,000 Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due.(75,259) Certain revenues are recognized as soon as they are earned. Under the modified accrual basis of accounting, certain revenues cannot be recognized until they are available to liquidate liabilities of the current period. Property taxes(48,595) Tax increments(5,345) Special assessments173,999 Interest on notes receivable60,000 Intergovernmental(826,014) 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.(168,636) Change in net position - governmental activitie$2,661,172 s The notes to the financial statements are an integral part of this statement. CITY OF BROOKLYN CENTER, MINNESOTA GENERAL FUND - STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Variance with Final Budget - Budgeted AmountsActualPositive OriginalFinalAmounts(Negative) REVENUES Property taxes$ 14,032,326$ 14,032,326$ 14,077,130$ 44,804 Lodging taxes 860,000 860,000 914,651 54,651 Licenses and permits 743,668 743,668 1,021,410 277,742 Intergovernmental 1,253,800 1,253,800 1,401,447 147,647 Charges for services 883,081 883,081 810,597 (72,484) Special assessments 75,000 75,000 128,138 53,138 Fines and forfeits 349,500 349,500 312,130 (37,370) Investment earnings (net of market value adjustment) 32,000 32,000 61,770 29,770 Miscellaneous 86,875 86,875 138,349 51,474 Total revenues 18,316,250 18,316,250 18,865,622 549,372 EXPENDITURES Current: General government2,960,209 2,960,209 2,736,593 223,616 Public safety9,976,226 9,976,226 9,444,438 531,788 Public works2,046,634 2,046,634 1,963,110 83,524 Community services161,000 161,000 145,503 15,497 Parks and recreation2,502,811 2,502,811 2,402,766 100,045 Economic development408,500 408,500 434,459 (25,959) Nondepartmental249,370 249,370 364,501 (115,131) Capital outlay: General government22,500 22,500 8,453 14,047 Public safety16,400 16,400 - 16,400 Parks and recreation22,600 22,600 3,851 18,749 Total expenditures18,366,250 18,366,250 17,503,674 862,576 Excess (deficiency) of revenues over (under) expenditures(50,000) (50,000) 1,361,948 1,411,948 OTHER FINANCING SOURCES (USES) Transfers in 150,000 150,000 129,544 (20,456) Transfers out (100,000) (100,000) (2,854,124) (2,754,124) Total other financing sources (uses) 50,000 50,000 (2,724,580) (2,774,580) Net change in fund balance - (1,362,632)- (1,362,632) Fund balance - January 1 12,382,713 12,382,713 12,382,713 - Fund balance - December 31$12,382,713$12,382,713$ 11,020,081$(1,362,632) The notes to the financial statements are an integral part of this statement. CITY OF BROOKLYN CENTER, MINNESOTA TAX INCREMENT DISTRICT NO. 3 - STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Variance with Final Budget - Budgeted AmountsActualPositive OriginalFinalAmounts(Negative) REVENUES Tax increments2,938,650$ 2,938,650$ 3,038,983$ 100,333$ Charges for services- - 363,788 363,788 Investment earnings (net of market value adjustment)- - 23,123 23,123 Miscellaneous- - 32,843 32,843 Total revenues2,938,650 2,938,650 3,458,737 520,087 EXPENDITURES Current: Economic development973,550 973,550 936,949 36,601 Capital outlay: Economic development- - 377,685 (377,685) Total expenditures973,550 973,550 1,314,634 (341,084) Excess of revenues over expenditures1,965,100 1,965,100 2,144,103 179,003 OTHER FINANCING SOURCES (USES) Transfers out(1,965,100) (1,965,100) (2,073,345) (108,245) Net change in fund balance- - 70,758 70,758 Fund balance - January 1 - Restated17,827,991 17,827,991 17,827,991 - Fund balance - December 3117,827,991$ 17,827,991$ 17,898,749$ 70,758$ The notes to the financial statements are an integral part of this statement. 39 CITY OF BROOKLYN CENTER, MINNESOTA STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2014 Business-Type Activities MunicipalGolfEarle BrownWater LiquorCourseHeritage CenterUtility ASSETS Current assets: Cash and cash equivalents$ 1,858,031$ 1,951,676-$ $ 2,505,727 Receivables: Accounts - net 7,780 218,686- 527,512 Special assessments - - 485,805- Due from other governments - 5,560 - - Prepaid items 27,657 - 8,817 - Inventories 675,067 1,589 31,193 35,342 Total current assets 2,568,535 7,149 2,210,372 3,554,386 Noncurrent assets: Capital assets: Land 1,390,402- 1,493,300 20,734 Easements - - - - Land improvements - 65,637 377,254 - Buildings and improvements 192,771 664,322 12,401,132 3,033,212 Machinery and equipment 251,735 11,160 376,258 128,668 Street light systems - - - - Mains and lines - - 21,030,496- Construction in progress - - 6,055,116- Total capital assets 444,506 2,131,521 14,647,944 30,268,226 Less: accumulated depreciation (307,923) (436,628) (10,720,580) (15,325,797) Net capital assets 136,583 1,694,893 3,927,364 14,942,429 Total assets 2,705,118 1,702,042 6,137,73618,496,815 LIABILITIES Current liabilities: Accounts payable107,796843 210,582 1,205,237 Accrued salaries and wages 28,527 3,565 42,575 21,633 Accrued interest payable - - - 23,723 Due to other funds 153,810- 3,542,769- Due to other governments 53,582 - 15,950 2,489 Deposits payable - 347,450- 6,825 Unearned revenue 2,782 - 1,600 223,674 Bonds payable - - 105,000- Compensated absences payable - - - - Total current liabilities 192,687 158,218 618,157 5,131,350 Noncurrent liabilities: Bonds payable - - 1,245,000- Advances from other funds 792,488- - - Compensated absences payable - - - - Net OPEB obligation - - - - Total noncurrent liabilities 792,488- 1,245,000- Total liabilities 192,687 950,706 618,157 6,376,350 NET POSITION Investment in capital assets 136,583 1,694,893 3,927,364 14,942,429 Unrestricted 2,375,848 (943,557) 1,592,215 (2,821,964) Total net position$2,512,431$751,336$5,519,579$ 12,120,465 Net position from this Statement Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Net position of business-type activities The notes to the financial statements are an integral part of this statement. Governmental Business-Type ActivitiesActivities- Sanitary SewerStorm DrainageStreet LightRecyclingTotalInternal UtilityUtilityUtilityUtilityEnterpriseService $ 1,755,459$ 3,987,403$ 176,221$ 15,188$ 12,249,705$ 6,647,462 913,028 351,916 101,768 64,695 2,185,385 18,318 - - - 485,805- - - - - - 5,560 - 175,307 - - 211,781- - - - - 743,191- 23,537 2,843,794 4,339,319 277,989 79,883 15,881,427 6,689,317 3,389 287,158 - 3,194,983- - 20,335 10,285 - - 30,620 - - - - 442,891- 166,108 2,705,424 - - 18,996,861- - 179,130 12,718 - 959,669- 8,738,312 - 774,886- 774,886- - 20,236,112 26,463,773 - 67,730,381- - 1,176,0671,136,42557,903 8,425,511- - 24,320,457 27,910,359 832,789 100,555,802- 8,904,420 (12,978,432) (12,104,765) (144,545) (52,018,670)- (5,211,569) 11,342,025 15,805,594 688,244 48,537,132- 3,692,851 14,185,819 20,144,913 966,233 79,883 64,418,559 10,382,168 55,691 49,485 2,239 604 1,632,477 54,384 4,044 8,640 - 108,984- 13,753 7,908 - - - 31,631 - - - - 3,696,579- - - - - - 72,021 48 - - - 354,275- - - - - 228,056- - 35,000 - - 140,000- - - - - - 128,209- 196,394 102,643 58,1252,2396046,264,023 415,000 - - 1,660,000- - - - - 792,488- - - - - - 1,153,884- - - - - 629,994- 415,000 - - 2,452,488- 1,783,878 517,643 58,125 2,239 604 8,716,511 1,980,272 11,342,025 15,805,594 688,244 48,537,132- 3,692,851 2,326,151 4,281,194 275,750 79,279 7,164,916 4,709,045 $ 13,668,176$ 20,086,788$ 963,994$79,279$55,702,048$8,401,896 $ 55,702,048 (345,151) $55,356,897 CITY OF BROOKLYN CENTER, MINNESOTA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31, 2014 Business-Type Activities MunicipalGolfEarle BrownWater LiquorCourseHeritage CenterUtility OPERATING REVENUES Sales and user fees5,852,465$ 183,311$ 4,518,231$ 2,206,311$ Cost of sales4,293,383 - 2,089,293 - Total operating revenues1,559,082 183,311 2,428,938 2,206,311 OPERATING EXPENSES Personal services642,642 128,453 1,032,898 460,950 Supplies79,719 25,980 235,620 132,669 Other services241,801 75,758 849,747 407,157 Insurance16,677 3,736 40,052 22,533 Utilities45,848 18,564 206,821 157,369 Rent303,108 - - - Depreciation24,328 18,738 683,625 658,163 Total operating expenses1,354,123 271,229 3,048,763 1,838,841 Operating income (loss)204,959 (87,918) (619,825) 367,470 NONOPERATING REVENUES (EXPENSES) Intergovernmental- - - 47,660 Insurance recoveries- 176,377 - - Investment earnings (net of market value adjustment)13,209 - 13,564 24,487 Special assessments- - - 29,500 Gain (loss) on sale of capital assets(37,560) - - - Other revenue (expense)8,601 5,809 60,202 (479) Interest and fiscal agent fees- - - (57,789) Total nonoperating revenues (expenses)(15,750)182,18673,76643,379 Income (loss) before transfers189,20994,268(546,059)410,849 Capital contributions from other funds---95,974 Transfers in---- Transfers out(362,190)--(95,974) Change in net position(172,981)94,268(546,059)410,849 Net position - January 12,685,412657,0686,065,63811,709,616 et position - December 31$2,512,431$751,336$5,519,579$12,120,465 N Change in net position from this Statement Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Change in net position of business-type activities The notes to the financial statements are an integral part of this statement. Governmental Business-Type Activities Activities- Sanitary SewerStorm DrainageStreet LightRecyclingTotalInternal UtilityUtilityUtilityUtilityEnterpriseService $ 1,638,4753,945,115$ 455,216$ 307,277$ 19,106,401$ 1,905,353$ -- - - 6,382,676 - 1,638,4753,945,115 455,216 307,277 12,723,725 1,905,353 197,356204,257 - - 2,666,556 794,303 23,44727,513 323 165 525,436 513,684 507,4712,459,898 34,726 289,609 4,866,167 169,982 3,01631,262 1,077 1,465 119,818 54,525 -37,539 161,079 - 627,220 364 -- - - 303,108 - 1,055,774735,595 48,221 - 3,224,444 720,199 1,787,0643,496,064 245,426 291,239 12,332,749 2,253,057 (148,589)449,051 209,790 16,038 390,976 (347,704) -15,887 - - 63,547 8,496 -- - - 176,377 - 20,24335,0561,985106108,65048,023 ----29,500- ----(37,560)27,100 (2,581)100(258)(616)70,77888,357 (19,113)---(76,902)- 14,43635,1561,727(510)334,390171,976 463,487(113,433)211,51715,528725,366(175,728) 134,574305,766102,952 639,266-- -20,433--20,433- (134,574) (102,952)- (695,690)-- 463,487212,766211,51715,528689,375(175,728) 13,204,68919,874,022752,47763,75155,012,6738,577,624 $13,668,176$20,086,788$963,994$79,279$55,702,048$8,401,896 $689,375 (7,092) $682,283 CITY OF BROOKLYN CENTER, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2014 Business-Type Activities MunicipalGolfEarle BrownWater LiquorCourseHeritage CenterUtility CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users5,853,228$ 183,311$ 4,554,948$ 2,212,560$ Receipts from interfund services provided- - - - Other operating receipts8,601 249 60,202 - Payments to suppliers(5,084,529) (132,251) (3,405,248) (693,866) Payments to employees(644,171) (128,706) (1,032,496) (459,783) Other operating payments- - - (479) Net cash flows provided (used) by operating activities133,129 (77,397) 177,406 1,058,432 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in- - - - Intergovernmental- - - 87,241 Special assessments- - - 10,279 Interfund payable- 76,997 - 3,542,769 Principal paid on revenue bonds- - - (105,000) Interest paid on revenue bonds- - - (58,774) Transfers out(362,190) - - (95,974) Net cash flows provided (used) by noncapital financing activities(362,190) 76,997 - 3,380,541 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets- (176,377) (111,636) (4,868,791) Proceeds from insurance recoveries- 176,377 - - Proceeds from sale of assets- - - - Net cash flows provided (used) by capital and related financing activities- - (111,636) (4,868,791) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments13,209 - 13,564 24,487 Net increase (decrease) in cash and cash equivalents (215,852) (400) 79,334 (405,331) Cash and cash equivalents - January 1 2,073,883 400 1,872,342 2,911,058 Cash and cash equivalents - December 31$1,858,031$ 1,951,676-$ $2,505,727 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES Operating income (loss) $ 204,959$ (87,918)$ (619,825)$ 367,470 Adjustments to reconcile operating income (loss) to net cash flows provided (used) by operating activities: Depreciation 24,328 18,738 683,625 658,163 Other income (expense) related to operations 8,601 5,809 60,202 (479) (Increase) decrease in assets: Accounts receivable - - 36,717 (4,103) Due from other governments - (5,560) - - Prepaid items (412) - (4,026) - Inventories 17,680 1,349 2,861 (547) Increase (decrease) in liabilities Accounts payable (121,261) (9,562) 17,450 26,409 Accrued salaries and wages (1,529) (253) 402 1,167 Unearned revenue 763 - - 10,352 Net cash flows provided (used) by operating activitie$133,129$(77,397)$ 177,406$1,058,432 s NONCASH FINANCING ACTIVITIES Acquisitions of capital assets on account$ -$ -$ 1,170,313-$ Capital assets contributed from other funds-$ -$ -$ 95,974$ Gain (loss) on sale of capital assets(37,560)$ -$ -$ -$ The notes to the financial statements are an integral part of this statement. Governmental Business-Type ActivitiesActivities- Sanitary SewerStorm DrainageStreet LightRecyclingTotalInternal UtilityUtilityUtilityUtilityEnterpriseService $ 1,635,4483,892,531$ 449,863$ 306,548$ 19,088,437$ -$ -- - - - 1,908,069 100- - - 69,152 88,357 (486,623)(2,532,646) (196,909) (291,178) (12,823,250) (758,997) (197,490)(208,938) - - (2,671,584) (705,170) -(2,581) (258) (616) (3,934) - 951,4351,148,366 252,696 14,754 3,658,821 532,259 20,433- - - 20,433 - -29,081 - - 116,322 8,496 -- - - 10,279 - -- - - 3,619,766 - -(35,000) - - (140,000) - -(19,441) - - (78,215) - -(134,574) (102,952) - (695,690) - (159,934)20,433 (102,952) 2,852,895- 8,496 (1,176,067) (1,136,424) (57,903) (7,527,198)- (695,571) - - - 176,377- - - - - - - 33,978 (1,176,067) (1,136,424) (57,903) (7,350,821)- (661,593) 20,243 35,056 1,985 106 108,650 48,023 (167,392) (129,500) 93,826 14,860 (730,455) (72,815) 1,922,851 4,116,903 82,395 12,980,160328 6,720,277 $ 1,755,459$ 3,987,403$ 176,221$15,188$12,249,705$6,647,462 $ 449,051$ (148,589)$ 209,790$ 16,038$ 390,976$ (347,704) 735,595 1,055,774 48,221 3,224,444- 720,199 (2,581) 100 (258) (616) 70,778 88,357 (52,584) (3,027) (5,353) (729) (29,079) 2,716 - - - - (5,560) (11,048) - (6,610) - -- - - - - 21,343 (1,923) 30,176 47,311 296 61 (9,120) (18,519) (4,681) (134) - - (5,028) 89,133 - - - - 11,115 - $ 1,148,366$ 951,435$ 252,696$14,754$3,658,821$532,259 $ -$ -$ -$ 1,170,313-$ $ 38,670 $ 134,574$ 305,766$ 102,952$ 639,266-$ $ - $ -$ -$ -$ -$ (37,560)$ (6,878) 46 bƚƷĻƭƷƚ CźƓğƓĭźğƌ{ƷğƷĻƒĻƓƷƭ CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 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’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)y – The governing board for the EDA is the Cit 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 as a Special Revenue fund. The EDA does not issue separate financial statements. Financial information may be obtained at the City’s offices. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS The government-wide financial statements (i.e., the statement of net position and the statement of activities) report Governmental activities,h information on all activities of the primary government and its component units. whic business-type activities normally are supported by taxes and intergovernmental revenues, are reported separately from , 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 Direct expenses offset by program revenues. are those that are clearly identifiable with a specific function or segment. rogram revenues P 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 general revenues and other items not included among program revenues are reported instead as . 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 economic resources measurement focus The government-wide financial statements are reported using the and the accrual basis of accounting , as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes and special assessments are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. current financial resources measurement focus Governmental fund financial statements are reported using the 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 City considers all revenues, except reimbursement grants, to be available if they are collected within 60 days of the end of the current fiscal year. Reimbursement grants are considered available if they are collected within one year of the end of the current fiscal year. 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 year are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal year. Only the portion of special assessments receivable due within the current fiscal year 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. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 The City reports the following major governmental funds: General Fund This is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Most of the current day-to-day operations of the governmental units are financed from this fund. Tax Increment District No. 3 Special Revenue Fund This fund was established to account for the collection of tax increment generated revenues for parcels within the District. These funds are used to finance the various redevelopment activities throughout the City. This fund also provides the resources to repay the debt service on bonds issued to finance these redevelopment activities. Tax Increment District No. 5 Special Revenue Fund This fund was established to account for the collection of tax increment generated revenues for parcels within the District. These funds are used to finance the various redevelopment activities within the District, which consisted of the redevelopment of the former Brookdale mall site, which is now called Shingle Creek Crossing. Debt Service Fund This fund is used to account for the collection of property taxes, special assessments and other resources which are used to repay the principal and interest on debt issued for various improvements in the City. Capital Improvements Capital Project Fund This fund was established to provide funds and to account for the expenditure of such funds, for major capital outlays. The accumulation of funds to provide for such outlays is an attempt to reduce future debt issuance. The financing sources of the fund primarily consist of transfers from other funds. Municipal State-Aid for Construction Capital Project Fund This fund was established to account for the state allotment of construction and maintenance aid. The source of the State funding is provided for through the collection of gasoline taxes. The funds accumulated must be used on transportation related construction and maintenance projects. Infrastructure Construction Capital Project Fund This fund was established to account for the resources and expenditures required for the acquisition and construction of capital facilities or improvements financed wholly or in part by special assessments levied against benefited properties. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 The government reports the following major enterprise funds: Municipal Liquor Fund The fund accounts for the operations of the City’s municipal off-sale liquor stores. Golf Course Fund The fund accounts for operations of Centerbrook Golf Course, a 9 hole executive golf course owned by the City. Earle Brown Heritage Center Fund 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. Water Utility Fund The fund accounts for pumping, treatment and distribution of water to customers. Administration, wells, water storage, and distribution are included. Sanitary Sewer Utility Fund The fund accounts for the collection and pumping of sanitary sewage through a system of sewer lines and lift stations. Sewage is treated by the Metropolitan Council Environmental Services whose fees represent about 58% of this fund’s operating expenses. Storm Drainage Utility Fund The 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. Street Light Utility Fund The fund accounts for the electrical service, maintenance, repair and replacement of lights owned by the City as well as those lights owned by Xcel Energy. Recycling Utility Fund The fund accounts for the contracted services to provide a City wide recycling program. Additionally, the City reports the following fund type: Internal Service Funds Account for compensated absences, health care insurance benefits for retired employees, 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. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 operatingnon-operatingd Proprietary funds distinguish revenues and expenses from items. Operating revenues an 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. Cash balances from all funds are pooled and invested, to the extent available, in certificates of deposit and other authorized investments. Earnings from such investments are allocated on the basis of applicable participation by each of the funds. 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)Commercial paper issued by U.S. corporations or their Canadian subsidiaries that is rated in the highest quality by at least two nationally recognized rating agencies and matures in 270 days or less. c)Time deposits that are fully insured by the Federal Deposit Insurance Corporation or bankers acceptances of U.S. banks. d)Repurchase agreements and reverse repurchase agreements with financial institutions identified by Minnesota Statutes Chapter 118A. e)Securities lending agreements may be entered into with financial institutions identified by Minnesota Statutes Chapter 118A. f)Minnesota joint powers investment trusts may be entered into with trusts identified by Minnesota Statutes Chapter 118A. g)Money market mutual funds regulated by the Securities and Exchange Commission and whose portfolios consist only of short term securities permitted by Minnesota Statutes 118A. h)Bonds of the City of Brooklyn Center issued in prior years, may be redeemed at current market price, which may include a premium, prior to maturing using surplus funds of the debt service fund set up for that issue. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 Investments are reported at fair value, based on quoted market prices as of the balance sheet date, except for investments in 2a7-like external investment pools, which are stated at amortized cost. 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 “due to/from other funds.” All short-term interfund receivables and payables at December 31, 2014 are planned to be eliminated in 2015. 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 restricted or committed fund balance in applicable governmental funds. This classification is based on the restraint that will be placed on the advanced funds when they are returned to the lending fund. All miscellaneous accounts receivable and trade receivables, other than utilities, 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 a deferred inflow of resources in the fund financial statements. Delinquent taxes receivable includes the past six years of uncollected taxes. Special assessments represent the financing for public improvements paid for by benefiting property owners. These assessments are recorded as receivables upon certification to the County. Governmental special assessments have been offset by a deferred inflow of resources for collections not received within 60 days after year end in the fund financial statements. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 F. INVENTORIES AND PREPAID ITEMS Inventories in the governmental funds are reported using the consumption method and valued at cost, using the first 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. Prepaid items are reported using the consumption method and recorded as expenditures/expenses at the time of consumption. G. ASSETS HELD FOR RESALE Assets held for resale represent various property purchases made by the City with the intent to sell in order to increase tax base or to attract new businesses. These assets are stated at the lower of cost or net realizable value. During the year ended December 31, 2014 management has reviewed the cost value reported for these assets and has indicated the properties are fairly presented for financial reporting purposes. H. CAPITAL ASSETS Capital assets, which include property, plant, equipment, infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), and intangible assets such as easements and computer software, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City 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 Improvements25,000 Heavy Equipment25,000 Furniture and furnishings 10,000 Motorized vehicles10,000 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. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 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, 2014 no interest was capitalized in connection with construction in progress. Capital assets of the City, as well as the component units, are depreciated using the straight line method over the following estimated useful lives: Easements - temporary5years Land improvements25years Buildings and structures25years Water and sewer mains and lines, wells and storage tanks, sewer lift stations25years Infrastructure25years Street light systems15years Machinery and equipment5 - 15years I. DEFERRED INFLOWS OF RESOURCES In addition to liabilities, statements of financial position or balance sheets will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to future periods and so will not be recognized as an inflow of resources (revenue) until that time. The City has only one type of item, which arises under a modified accrual basis of accounting, which qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds Balance Sheet. The governmental funds report unavailable revenue from sources such as: property taxes, tax increments, special assessments and other receivables not collected within 60 days of year-end. These amounts are deferred and recognized as an inflow of resources in the period the amounts become available. J. 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 internal service fund. 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. K. POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS Under Minnesota Statute 471.61, subdivision 2(b), public employers must allow retirees and their dependents to continue coverage indefinitely in an employer-sponsored health care plan, under the following conditions: 1) retirees must be receiving (or eligible to receive) an annuity from a Minnesota public pension plan; 2) coverage must continue in group plan until age 65 and pay no more than the group premium; and 3) retirees may obtain dependent coverage immediately before retirement. All premiums are funded on a pay-as-you-go basis. The liability was actuarially determined, in accordance with GASB Statement 45, at January 1, 2014. The liability is accrued in the Public Employees Retirement internal service fund. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 L. 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 position. 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. M. FUND EQUITY Fund equity in the fund financial statements is classified as fund balance for governmental funds and net position for proprietary funds. Fund equity in the government-wide financial statements is classified as net position for both governmental and business-type activities. Fund Balance – In the fund financial statements, governmental funds report fund balance in classifications that disclose restraints for which amounts in those funds can be spent. These classifications are as follows: Nonspendable – consists of amounts that are not in spendable form or are required to be maintained intact. Restricted – consists of amounts related to externally imposed constraints established by creditors, grantors or contributors; or constraints imposed by state statutory provisions. Committed – consists of internally imposed constraints. These constraints are imposed by formal action (resolution) of the City Council, which is the highest level of decision making authority. Assigned – consists of internally imposed constraints. These constraints reflect the specific purpose for which it is the City’s intended use. These constraints are established by the City Council or, pursuant to council resolution, the City Manager or the Director of Finance. Unassigned – is the residual classification for the general fund and also reflects negative residual amounts in other funds. When both restricted and unrestricted fund balances are available for an allowable use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed. When committed, assigned, or unassigned resources are available for an allowable use, it is the City’s policy to use resources in the following order; 1) committed, 2) assigned, and 3) unassigned. The City has formally adopted a fund balance policy for the General Fund. The policy establishes a year-end target unassigned fund balance amount of 50-52% of the next year’s operating budget for cash flow needs (working capital). At December 31, 2014 the unassigned fund balance of the General fund was 52% of the subsequent year’s budgeted expenditures. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 Net Position – Net position represents the difference between assets and liabilities. Net position, net investmen t in capital assets, 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 position is 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 remaining net position is reported as unrestricted. When both restricted and unrestricted net position are available for an allowable use, it is the government’s policy to use restricted resources first, then unrestricted resources as they are needed. N. INTERFUND TRANSACTIONS Interfund services provided and used are accounted for as revenues and expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. All other interfund transactions are reported as transfers. O. 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. P. NEW ACCOUNTING PRONOUNCEMENTS The Governmental Accounting Standards Board recently approved the following statements which were not implemented in these financial statements. The effect these standards may have on future financial statements has not been determined at this time. Accounting and Financial Reporting for Pensionso Statement No. 68, . The primary objective of this statement is t improve accounting and financial reporting by state and local governments for pensions. It revises existing standards of financial reporting for most pension plans. The provisions of this statement are effective for periods beginning after June 15, 2014. Pension Contributions Subsequent to Measurement Date Statement No. 71, . The primary objective of this statement is to address an issue regarding the application of the transition provisions of GASB Statement No. 68. The issue relates to amounts contributed by an employer to a defined benefit pension plan after the measurement date of the government's net pension liability. The provisions of this statement are effective for periods beginning after June 15, 2014. air Value Measurement and Application . FThe primary objective of this statement is to enhance Statement No. 72, the comparability of financial statements among governments by requiring measurement of certain assets and liabilities at fair value using a more detailed definition of fair value and accepted valuation techniques. The provisions of this statement are effective for periods beginning after June 15, 2015. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 Q. CHANGE IN ACCOUNTING PRINCIPLES Items Previously During the year ended December 31, 2013, the City implemented GASB Statement No. 65, eported as Assets and Liabilities. R Statement No. 65 identified specific items previously reported as assets that will now be classified as either deferred outflows of resources or outflows (expenditures/expenses), and items previously reported as liabilities that will now be reported as either deferred inflows of resources or inflows (revenues). For the year ended December 31, 2013, the City had reported balances of assets held for resale as a deferred inflow of resources, similar to reporting prior to GASB 65, as deferred revenue. However, under GASB 65, the reporting of the balances should be included in equity. Therefore, the City determined it was necessary to restate the beginning fund balances for the Economic Development Authority and the Tax Increment District No. 3 special revenue funds. The details and respective amounts of the restatements are below: As Reported in 2013 2014 EndingRestated FundDeferredBeginning BalanceInflowsFund Balance Economic Development Authority1,050,239$ 537,000$ 1,587,239$ Tax Increment District No. 34,051,816 13,776,175 17,827,991 Note 2 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 Tax Increment District No. 2, Tax Increment District No. 5, Police Drug Forfeiture, Centennial Amphitheater, 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 30. 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. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 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 supplemental budgetary appropriations or amendments during the year. For the year ended December 31, 2014 expenditures exceeded appropriations in the following General Fund departments and other governmental funds: FinalExcess of BudgetActualAppropriations Major Funds: General Fund: Administrative786,682$ 808,664$ (21,982)$ Legal393,750 403,021 (9,271) Information technology460,720 465,200 (4,480) n 1,089,1701,049,682 (39,488) Fire protectio Park and recreation administration 208,809205,464 (3,345) u 434,459408,500 (25,959) Convention burea Nondepartmental249,370 364,501 (115,131) Transfers out100,000 2,854,124 (2,754,124) Special Revenue Funds: Tax Increment District No. 32,938,650 3,387,979 (449,329) Debt Service Fun 2,716,9312,624,072 (92,859) d Capital Project Funds: Municipal State Aid for Constructio 699,544340,000 (359,544) n 4,403,5611,430,000 (2,973,561) Infrastructure constructio n Nonmajor Funds: Special Revenue Funds: Economic Development Authorit 513,406438,231 (75,175) y 251,471200,000 (51,471) Community Development Block Gran t Tax Increment District No. 4384,310 422,028 (37,718) 213,20040,947 (172,253) City Initiatives Gran t Capital Project Funds: 2,598,6641,560,000 (1,038,664) Street Reconstructio n CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 B. DEFICIT FUND EQUITY Deficit fund equity exists at December 31, 2014 in the following funds: Unassigned deficit fund balance Major Funds: Tax Increment District No. 51,299,859$ Debt Service825 Infrastructure Construction463,193 Unrestricted deficit net position Major Funds: Golf Course943,557 Water Utility2,821,964 The deficits are being funded through internal borrowing and will be repaid from future collections of tax increment, future collections of special assessments, internal transfers, and future bond issuance. Note 3 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. At year-end, the City’s carrying value amount of deposits was $101,538 composed of bank balances of $0. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 As of December 31, 2014 the City had the following investments and maturities: Investment Maturities (in years) Investment TypeFair ValueNo maturity< 11 - 33 - 5 Negotiable certificates of deposit$12,129,571$ 5,636,691-$$4,542,759$1,950,121 Federal agency notes15,730,435 1,100,342-13,108,5431,521,550 External investment pool - 4M Fund14,114,70814,114,708--- Money market2,441,8772,441,877--- Total Investments$44,416,591$16,556,585$6,737,033$17,651,302$3,471,671 As of December 31, 2014, the City had the following summary of investments related to the credit risk, par values and fair values of securities: % of total Investment TypeCredit Risk (*)ParFair ValuePortfolio Negotiable certificates of depositn/a12,150,000$ 12,129,571$ 27.30% Federal agency notesAA15,700,000 15,730,435 35.42% External investment pool - 4M Fundn/a14,057,174 14,114,708 31.78% Money marketAAA2,441,867 2,441,877 5.50% Total Investments44,349,041$ 44,416,591$ 100.00% (*) The credit risk for the Federal Agency Notes and Money Market ratings are provided by S&P. The deposits and investments of the City are presented in the financial statements as follows: Investments44,416,591$ Deposits101,538 Petty cash and change funds13,785 Total cash, cash equivalents, and investments44,531,914$ Interest rate risk – The City’s investment policy requires interest earnings remain stable and predictable through at least the next budget cycle and that at least 50% of the investment portfolio remain for two or more years with known interest rates. The policy also states that the portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably expected. k – The City’s investment policy restricts investment instruments to those authorized by Minnesota Statutes Credit ris §118A as listed in Note 1.D. 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, 2014 the City’s investment in FHLMC, FNMA, FHLB and FFCB federal agency notes were rated AA by Standard & Poors (S&P). The City’s external investment pool is with the Minnesota Municipal Money Market Fund which is regulated by Minnesota Statutes and the Board of Directors of the League of Minnesota Cities. The 4M fund is a 2a7-like pool and is based on an amortized cost method that approximates fair value. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 k – The City’s investment policy requires that the investment portfolio be diversified to Concentration of credit ris minimize potential losses on individual securities. As of year end, the City had portfolio concentrations in excess of five percent (excluding external investment pools) in the following federal agencies: Federal Home Loan Mortgage Corporation (10.09%), Federal National Mortgage Association (13.44%) Federal Farm Credit Bank (5.97%) and Federal Home Loan Bank (5.90%). – The City’s investment policy requires that securities purchased from any bank or dealer be placed Custodial credit risk with an independent third party for custodial safekeeping. Investments in investment pools and money markets are not evidenced by securities that exist in physical or book entry form, and therefore are not subject to custodial credit risk disclosures. All of the City’s remaining 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, 2014 are as follows: DelinquentDelinquent PropertyTaxSpecialMunicipalNotes TaxesIncrementsAssessmentsState-AidReceivable Major Funds: General58,298$ -$ 161,137$ -$ -$ Tax Increment District No. 3- 54,347 - - - Tax Increment District No. 5- 9,784 - - 210,000 Debt Service5,546 - 1,931,722 - - Capital Improvement9,893 2,192--- s Municipal State Aid for Construction-- 1,077,504-- n -- 2,043,117 - - Infrastructure Constructio Nonmajor Funds Housing and Redevelopment Authority5,128 - - - - Total78,865$ 64,131$ 4,138,168$ 1,077,504$ 210,000$ The Economic Development Authority (EDA) offers a down payment and closing cost assistance program to home buyers purchasing foreclosed or vacant properties as their principal residence. The program offers up to a $10,000, no-interest deferred loan that is forgivable if the borrower resides in the property for five consecutive years. As of December 31, 2014, the balance of these loans is $669,750. There has been an allowance for doubtful accounts recorded for the same amount, as it is fully expected that these loans will be forgiven. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 C. CAPITAL ASSETS Capital asset activity for the year ended December 31, 2014 was as follows: BeginningEnding BalanceIncreasesDecreasesBalance Governmental activities: Capital assets, not being depreciated: Land3,537,473$ -$ -$ 3,537,473$ Easements - perpetual88,704 - - 88,704 Construction in progress3,375,955 3,353,244 (3,452,986) 3,276,213 Total capital assets, not being depreciated7,002,132 3,353,244 (3,452,986) 6,902,390 Capital assets, being depreciated: Easements - temporary22,715 - - 22,715 Buildings and improvements19,566,900 - - 19,566,900 Park improvements10,341,934 158,310 - 10,500,244 Machinery and equipment9,071,355 645,689 (470,230) 9,246,814 Street infrastructure39,354,407 2,655,411 - 42,009,818 Total capital assets, being depreciated78,357,3113,459,410(470,230)81,346,491 Less accumulated depreciation for: Easements - temporary11,7494,538 16,287- Buildings and improvements11,191,847656,123 11,847,970- Park improvements4,254,238290,117 4,544,355- Machinery and equipment5,139,505759,357(415,051)5,483,811 Street infrastructure15,560,9011,402,980 16,963,881- Total accumulated depreciation36,158,2403,113,115(415,051)38,856,304 Total capital assets being depreciated - net42,199,071346,295 42,490,187(55,179) Governmental activities capital assets - ne$ 3,699,53949,201,203$ (3,508,165)$ 49,392,577$ t Depreciation expense was charged to functions/programs of the City as follows: Governmental activities: General government85,636$ Public safety396,871 Public works1,674,836 Parks and recreation235,573 Capital assets held by the City's internal service funds are charged to the various functions based on their usage of the assets720,199 $3,113,115 Total depreciation expense - governmental activitie s CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 BeginningEnding BalanceIncreasesDecreasesBalance Business-type activities: Capital assets, not being depreciated: $ -3,194,983$ -$ 3,194,983$ Lan d Easements - perpetual10,285 - - 10,285 Construction in progress2,793,558 9,044,636 (3,412,683) 8,425,511 Total capital assets, not being depreciated5,998,826 9,044,636 (3,412,683) 11,630,779 Capital assets, being depreciated: Easements - temporar -20,335 - 20,335 y Land improvement -442,891 - 442,891 s 239,26118,757,600 - 18,996,861 Buildings and improvement s Machinery and equipmen 48,7511,008,176 (97,258) 959,669 t Street light systems671,933 102,953 - 774,886 Mains and lines64,420,651 3,309,730 - 67,730,381 Total capital assets, being depreciated85,321,586 88,925,023(97,258) 3,700,695 Less accumulated depreciation for: Easements - temporar 4,06310,518 - 14,581 y Land improvements229,693 16,627 - 246,320 Buildings and improvements14,747,125 808,358 - 15,555,483 Machinery and equipment659,168 62,223 (59,698) 661,693 Street light systems96,32348,221 144,544- Mains and lines33,111,0972,284,952 35,396,049- Total accumulated depreciation48,853,9243,224,444 52,018,670(59,698) Total capital assets being depreciated - net36,467,662476,251 36,906,353(37,560) Business-type activities capital assets - net$ 9,520,88742,466,488$$(3,450,243)$48,537,132 Depreciation expense was charged to functions/programs of the City as follows: Business-type activities: Municipal liquor$24,328 Golf course18,738 Earle Brown Heritage Center683,625 Water utility658,163 Sanitary sewer utility735,595 Storm drainage utility1,055,774 48,221 Street light utilit y Total depreciation expense - business-type activities3,224,444$ CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 CONSTRUCTION COMMITMENTS At December 31, 2014 the City had construction project contracts in progress. The commitments related to remaining contract balances are summarized as follows: ContractRemaining ProjectAmountCommitment Wangstad Park Area Infrastructure Improvements6,351,444$ 140,015$ Water Treatment Plant18,066,121 14,255,122 Total$ 14,395,13724,417,565$ D. INTERFUND BALANCES AND TRANSFERS The composition of due to/from other fund balances at December 31, 2014 are as follows: Due fromDue to Fund Other FundsOther Funds Major Funds: General153,810$ -$ -3,724,957 Capital Improvement s Infrastructure Constructio 182,188- n Golf Course- 153,810 Water Utilit 3,542,769- y Total3,878,767$ 3,878,767$ Interfund due to/from balances are representative of lending/borrowing arrangements to cover deficit cash balances at the end of the fiscal year. Balances will be paid with future operating revenues and/or interfund transfers, collections of special assessments on benefiting property owners, and with the issuance of bonds to finance the water treatment plant. Individual fund advances to and advances from other funds at December 31, 2014 are as follows: Advances to Advances From Fund Other FundsOther Funds Major Funds: Tax Increment District No. 5-$ 2,442,676$ -792,488 Capital Improvement s Golf Course- 792,488 onmajor Funds: N Tax Increment District No. 22,442,676 - $ 3,235,1643,235,164$ CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 The $ 2,442,676 advance between the Tax Increment District No. 2 and the Tax Increment District No. 5 funds was made to provide funding for a specific development project within the City. The financing plan adopted for the Tax Increment District No. 5 has the repayment of principal scheduled to begin in 2024, however current cash flow projections imply a more immediate repayment plan, beginning in 2022. The $792,488 advance between the Golf Course and Capital Improvements fund was made for improvements to the golf course. A repayment schedule for this advance has not yet been adopted. The composition of interfund transfers as of December 31, 2014 are as follows: Transfer InTransfer Out Governmental Funds: Major Funds: General129,544$ 2,854,124$ Tax Increment District No. 3- 2,073,345 Debt Service2,073,345 - s -3,116,314 Capital Improvement Municipal State-Aid for Construction78,000 360,000 Infrastructure Construction1,902,259 2,805,702 Nonmajor Funds: Housing and Redevelopment Authority- 278,764 Economic Development Authority -278,764 Community Development Block Grant- 129,544 Street Reconstruction 1,286,7592,785,269 Technolog -100,000 y Total governmental funds10,463,495 9,788,238 Proprietary Funds: Major Funds: Municipal Liquor- 362,190 y 95,974- Water Utilit Sanitary Sewer Utility 134,574- Storm Drainage Utility20,433 - 102,952- Street Light Utilit y Total proprietary fund 695,69020,433 s Total all funds10,483,928$ 10,483,928$ 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 2014, the following non-routine transfers were made between funds: •The General fund transferred $2,754,124, and the Municipal Liquor fund transferred $362,190 to the Capital Improvements fund in accordance with a project funding policy that was adopted by the City Council in early 2014. •The Street Reconstruction fund transferred $78,000 to the Municipal State-Aid for Construction fund. This was a reimbursement of previous years expenditures in relation to liquidated damages for an older infrastructure project. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 •The Infrastructure Construction fund transferred $2,785,269 to the Streets Reconstruction fund to allocate the proceeds of the 2013B G.O. Improvement bonds, as total project costs were not known at the time of the bond issuance. •As part of the completion of the Kylawn Area Infrastructure Improvements project, there was a total of $1,922,693 of transfers between the following funds: Municipal State-Aid for Construction, Infrastructure Construction, Streets Reconstruction, Water Utility, Sanitary Sewer Utility, Storm Drainage Utility and Street Light Utility. Once the project was completed, it was necessary to make sure all funds contributed their appropriate share of the project costs. E. OPERATING LEASES 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 five years, commencing on August 1, 2011 and calls for monthly lease payments based on square-footage. Lease revenue for the year ended December 31, 2014 was $ 13,200. Future minimum lease revenues under the current agreement is as follows: YearTotal EndingMinimum Rents 201513,200$ 20167,700 $20,900 The City leases space for its municipal liquor stores. The leases are ten-year leases and began in 2010 and 2013. 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, 2014 was $ 303,108. Future minimum base rent payments under the current agreements are as follows: YearTotal EndingMinimum Rents 2015229,914$ 2016234,888 2017234,888 2018234,888 2019234,888 2020 - 2023444,204 $1,613,670 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 The City is the lessor in an operating lease for building and office facilities. The leased space includes multiple tenants, all of which have different lease terms, but include: short and long term lease expiration dates. Two of the tenants do have the option to extend their lease terms by five years, however, the City acquired the respective property in 2013 as part of a redevelopment plan, so the likelihood of the leases being extended are minimal. For the year ended 2014, the City received $363,788 in rental revenue. Future minimum base rent revenues under the current agreements are as follows: YearTotal EndingMinimum Rents 2015238,361$ 2016237,899 2017254,439 2018262,877 2019102,942 2020 - 2021208,238 $1,304,756 F. LONG-TERM DEBT GOVERNMENTAL ACTIVITIES The City issued general obligation improvement bonds to provide funds for the construction of major capital facilities and construction of infrastructure. These bonds are reported in the governmental activities of the City. The City issued general obligation tax increment bonds to finance various redevelopment projects and redevelopment property acquisitions within the City. These bonds are reported in the governmental activities of the City. Final InterestMaturityOriginalPayable RatesDateDateIssue12/31/14 G.O. Tax Increment Bonds: Taxable Tax Increment Bonds of 20044.75 - 5.13%12/01/200402/01/202017,245,000$ 9,500,000$ Taxable Tax Increment Bonds of 20083.00 - 5.30%05/01/200802/01/20184,335,000 500,000 Taxable Tax Increment Bonds of 20132.00 - 3.25%12/19/201302/01/20226,040,000 6,040,000 Total G.O. Tax Increment Bonds27,620,000 16,040,000 G.O. Improvement Bonds: Improvement Bonds, 2004C2.10 - 3.65%12/01/200402/01/20151,010,000 90,000 Improvement Bonds, 2006A3.55 - 3.80%12/15/200602/01/20171,460,000 330,000 Improvement Bonds, 2008B3.25 - 4.25%12/15/200802/01/20192,390,000 1,105,000 Improvement Bonds, 2013B3.00%12/19/201302/01/20244,920,000 4,920,000 Total G.O. Improvement Bonds9,780,000 6,445,000 Total - bonded indebtedness37,400,000$ 22,485,000 Other Liabilities: Compensated absences payable1,282,093 et OPEB obligatio629,994 Nn Total governmental activitie$24,397,087 s CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 All long-term bonded indebtedness outstanding at December 31, 2014 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 taxes 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. At the end of the current year, there are $3,848,634 of assets accumulated in the debt service funds for future debt service. Included within those accumulated assets, there are a combined $36,326 of delinquent property taxes and special assessments receivable. Annual debt service requirements to maturity for governmental activities long-term debt are as follows: Governmental Activities Year Ending G.O. Tax Increment BondsG.O. Improvement Bonds December 31PrincipalInterestPrincipalInterest 2015$ 638,8311,755,000$ 1,270,000$ 187,220$ 2016 560,2381,835,000 885,000 151,210 2017 475,4251,930,000 820,000 122,480 2018 383,3502,005,000 750,000 96,173 2019 286,7882,045,000 690,000 72,250 2020 - 2024 325,7946,470,000 2,030,000 123,600 Total$ 2,670,42616,040,000$ 6,445,000$ 752,933$ BUSINESS-TYPE ACTIVITIES The City issued general obligation revenue bonds to finance the metering of all City connected water and sewer utility services. These bonds are reported in the business-type activities of the City. Final InterestMaturityOriginalPayable RatesDateDateIssue12/31/14 General Obligation Taxable Utility Revenue Bonds (Build America Bonds - Direct Pay)0.70 - 5.10%03/08/201002/01/20252,350,000$ 1,800,000$ Annual debt service requirements to maturity for business-type activities long-term debt are as follows: Business-Type Activities Year EndingG.O. Revenue Bonds December 31PrincipalInterest 2015140,000$$74,095 2016145,00070,100 2017150,00065,375 2018155,00059,880 2019155,00053,796 2020 - 2024865,000156,474 2025190,0004,845 Total1,800,000$$484,565 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 The utility revenue bonds are backed by the full faith and credit of the City. Bonds in the business-type activities will be retired with the net revenues of the Water Utility and Sanitary Sewer Utility systems. (Net revenues of each system are defined as the excess of gross revenues and earnings over the normal, reasonable, and current costs of operating and maintaining the system.) In the event that a deficiency exists because of inadequate net revenues at the time a debt service payment is due, the City must provide resources to cover the deficiency until other resources are available. For the year ended December 31, 2014, the water and sewer utility funds provided net revenues of $816,521, which accounts for a debt-service coverage ratio of 376.45%. CHANGE IN LONG-TERM LIABILITIES Long-term liability activity for the year ended December 31, 2014 was as follows: BeginningEndingDue Within BalanceAdditionsReductionsBalanceOne Year Governmental activities: Bonds payable: G.O. tax increment bonds$ -17,470,000$ (1,430,000)$$16,040,000$1,755,000 G.O. improvement bond -6,920,000 (475,000) 6,445,000 1,270,000 s -24,390,000 (1,905,000) 22,485,000 3,025,000 Total bonds payabl e Compensated absences1,232,551 153,693 (104,151) 1,282,093 128,209 et OPEB obligatio 226,724586,026 (182,756) 629,994 - Nn Total government activity long-term liabilities$ 380,41726,208,577$$(2,191,907)$24,397,087$3,153,209 Business-type activities: Bonds payable: G.O. revenue bonds$1,940,000$ (140,000)-$$1,800,000$140,000 Compensated absences are liquidated by the Public Employees Compensated Absences internal service fund and the net OPEB obligation by the Public Employees Retirement internal service fund. CONDUIT DEBT OBLIGATIONS From time to time, the City has issued Housing Revenue Bonds and Industrial Revenue Bonds or Notes to provide assistance to qualified private sector entities for the acquisition and construction of housing, industrial, or commercial facilities deemed to be in the public interest. The bonds or notes are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. The City has no obligation of its assets or of its general tax base for the repayment of any of these bonds or notes. Accordingly, the bonds or notes are not reported as liabilities in the accompanying financial statements. Upon final redemption of the bonds or notes, ownership of the property transfers to the private sector entity served by the bond or note issue. As of December 31, 2014 there were two series of fixed rate Multifamily Housing Revenue Refunding bonds, one Housing Revenue Development Refinancing Note, two Healthcare Revenue Notes, four Senior Housing Development Revenue Notes, and two Charter School Lease Revenue bonds outstanding. The aggregate amount of conduit debt as of December 31, 2014 is $23,806,721. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 G. FUND EQUITY Net position reported in the government-wide statement of net position at December 31, 2014 include the following: Governmental activities et investment in capital assets: N Cost of capital assets88,248,881$ Less: accumulated depreciation(38,856,304) (6,445,000) Less: related long-term debt outstandin g Total net investment in capital assets42,947,577 Restricted: Statutory housing obligations772,843 Tax increment financing20,030,161 Economic development1,542,349 Law enforcement enhancements98,321 Community amphitheater309,548 Debt service3,478,655 State-Aid street systems1,830,100 Total restricte28,061,977 d Unrestricted12,357,196 Total governmental activities net positio$83,366,750 n Related debt for governmental activities capital assets includes $6,445,000 in G.O. Improvement Bonds which was the amount issued to finance the street portion of construction projects. Business-type activities et investment in capital assets: N Cost of capital assets $100,555,802 Less: accumulated depreciation(52,018,670) - Less: related long-term debt outstandin g Total net investment in capital assets48,537,132 Unrestricted6,819,765 Total business-type activities net positio$55,356,897 n The long-term debt reported in the Water and Sewer utility funds was used to finance capital improvements, however those items individually were small in scope and not capitalized in the financial statements. Therefore there is no long-term debt applied against the calculation above. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 Aggregated funds balances reported in the governmental funds balance sheet at December 31, 2014 include the following: Governmental funds NonspendableRestrictedCommittedAssigned General Inventories$21,967$-$-$- -- - 908,761 Capital Improvement s Tax Increment District No. 3 772,843- - - Statutory Housing Obligatio n Tax Increment Financing- 17,125,906 - - Debt Service Debt Service- 1,910,266 - - Capital Improvements s -- 6,509,230 - Capital Improvement Municipal State-Aid for Construction State-Aid Street Systems- 1,830,100 - - Nonmajor Funds Tax Increment Financing- 2,849,908 - - Economic Development- 1,537,221 - - s 98,321- - - Law Enforcement Enhancement Community Amphitheater- 309,548 - - Public Safety- - 77,772 - Cable Communications- - 256,297 - Community Recreation- - 40,350 - Emergency Capital Improvements -- 1,066,216 - s -- 2,541,388 - Street Improvement Technology Improvements- - 23,618 - Total fund balances21,967$ 26,434,113$ 10,514,871$ 908,761$ CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 Note 4 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 (WCRA) as required by law. For workers’ compensation, the City is not subject to a deductible. The City’s workers’ compensation is retroactively rated. With this type of coverage, final premiums are determined after loss experience is known. The amount of premium adjustment, if any, is considered immaterial and not recorded until received or paid. There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three years. B. EMPLOYEE RETIREMENT PLANS 1. DEFINED BENEFIT PENSION PLAN PLAN DESCRIPTION All full-time and certain part-time employees of the City are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the General Employees Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF) which are cost-sharing, multiple-employer retirement plans. These plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. GERF 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 and fire-fighters who qualify for membership by statute are covered by the PEPFF. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 BENEFITS PROVIDED 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 five years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring member receives the higher of a step-rate benefit accrual formula (method 1) or a level accrual formula (method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.20 percent of average salary for each of the first 10 years of service and 2.70 percent for each remaining year. The annuity accrual for a Coordinated Plan member is 1.20 percent of average salary for each of the first 10 years, and 1.70 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.70 percent of average salary for Basic Plan members and 1.70 percent for Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate is 3.00 percent for each year of service. For all members hired prior to July 1, 1989 whose annuity is calculated using Method 1, a full annuity is available when age plus years of service equal 90. Normal retirement age is 55 for PEPFF members, and 65 for Basic and Coordinated members hired prior to July 1, 1989. Normal retirement age is the age for unreduced Social Security benefits capped at 66 for Coordinated members hired on or after July 1, 1989. A reduced retirement annuity is also available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A single-life annuity is a lifetime annuity that ceases upon the death of the retiree, of which no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will be payable of joint lives. Members may also leave their contributions in the fund upon termination of public service in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last terminated public service. PERA issues a publicly available financial report that includes financial statements and required supplementary information for GERF 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 1-800-652-9026. CONTRIBUTIONS 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. GERF Coordinated Plan members are required to contribute 6.25% of their annual covered salary. PEPFF members are required to contribute 10.20% of their annual covered salary. The City is required to contribute the following percentages of annual covered payroll: 7.25% for Coordinated Plan GERF members and 15.30% for PEPFF members. The City’s contributions to the General Employees Retirement Fund for the years ending December 31, 2014, 2013, and 2012 were $531,385, $521,512, and $498,832, respectively. The City’s contributions to the Public Employees Police and Fire Fund for the years ending December 31, 2014, 2013, and 2012 were $600,402, $560,053, and $544,497, respectively. The City’s contributions were equal to the contractually required contributions for each year as set by state statute CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 Effective January 1, 2015, GERF members will be required to contribute 6.50% and the City will be required to contribute 7.50% of the respective employees annual covered salary. Also, effective on the same date, PEPFF members will be required to contribute 10.80% and the City will be required to contribute 16.20% of the respective employees annual covered salary. 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 2014 were $140,216, of which the City contributed $6,471, and the remaining, $133,745 was contributed by the State of Minnesota. The actual contribution was in excess of the contribution determined by an actuarial valuation, which was $101,453. That actuarial valuation was performed at January 1, 2013, and represents funding for normal cost. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 The information below is the most recent data available. Actuarial valuation date1/1/2013 Actuarial cost methodEntry age normal cost method Amortization methodLevel dollar amount amortized on a closed basis Remaining amortization period8 years Asset valuation methodfair value Actuarial assumptions: Investment rate of return6.0% compounded annually Discount rate for obligations6.00% Projected salary increasesNot applicable Post retirement benefitsNone Inflation rateNot applicable THREE YEAR TREND INFORMATION AnnualPercentageNet Contributions YearPensionof APCPension EndingCost (APC)State-AidCityTotalContributedObligation 12/31/2012$95,982$55,521$151,503144%$- $ 105,363 12/31/2013134,34013,329147,669147%- 100,728 12/31/2014133,7456,471140,216129%- 108,883 SCHEDULE OF FUNDING PROGRESS Assets in Excess of ActuarialActuarialActuarial(Unfunded) ValuationValue ofAccruedAccruedFunded DateAssetsLiabilityLiabilityRatio 01/01/20092,654,832$ 3,240,590$ (585,758)$ 81.9% 01/01/20113,303,5953,253,68649,909101.5% 01/01/20133,282,3173,279,2313,086100.1% C. OTHER POST-EMPLOYMENT BENEFITS PLAN DESCRIPTION In addition to providing the pension benefits described in Note 4.B., 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. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 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 by the retiree on a monthly basis. Employees hired after January 1, 1992 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. Disabled police and firefighter 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, 2014, participants consisted of: Retirees for which the City is paying the single premium14 Retirees and beneficiaries currently purchasing health insurance through the City1 Disabled police officers2 Active employees151 Total168 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 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, 2014 was calculated as follows: Annual required contribution$222,477 Interest on net OPEB obligation26,371 Adjustment to ARC(22,124) Annual OPEB cost226,724 Employer Contributions Direct137,445 Indirect Implicit Rate Subsidy45,311 Increase (decrease) in net OPEB obligation43,968 et OPEB obligation, beginning of yea586,026 Nr et OPEB obligation, end of yea$629,994 Nr The City had an actuarial valuation performed for the plan as of January 1, 2014 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, 2014. The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the past three years were as follows: Percentage of FiscalAnnualAnnual Net YearOPEBEmployerOPEB CostOPEB EndedCostContributionsContributedObligation 12/31/2012235,918$$159,37567.56%487,353$ 12/31/2013238,744140,07158.67%586,026 12/31/2014226,724182,75680.61%629,994 CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 FUNDED STATUS AND FUNDING PROGRESS The City currently has no assets that have been irrevocably deposited into a trust for future benefits; therefore, the actuarial value of assets is zero. Instead of depositing funds into an irrevocable trust, the City has chosen to accumulate funding into an internal service fund. The cash and investment balance of the internal service fund is $675,036 for the year ended December 31, 2014. The funded status of the plan was as follows: Unfunded ActuarialActuarialUAAL as a Actuarial ActuarialAccruedAccruedPercentage ValuationValue ofLiabilityLiability FundedCoveredof Covered Date Assets (AAL)(UAAL)RatioPayroll Payroll 1/1/2010 $$ 0.00%9,143,2763,012,383$ 32.95% $ -3,012,383 1/1/20122,620,3670.00%9,472,23727.66% -2,620,367 1/1/2014 2,574,5290.00%9,934,96025.91% -2,574,529 ACTUARIAL METHODS AND 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. 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, 2014 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 9.0% reduced by 0.33% each year to arrive at an ultimate health care cost trend rate of 5.0%. Both rates include a 3.0% inflation assumption. The actuarial value of assets is $0, however the City does have $675,036 of funds accumulated in an internal service fund. The plans' unfunded actuarial accrued liability is being amortized as of the valuation date with a payroll growth rate of 3.75% over 30 years on an open basis. 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 issued greater than $5 million of bonds in 2004 and therefore is required to rebate excess investment income relating to these issues to the federal government. The extent of the City’s liability for arbitrage rebates on the remaining bond issues is not determinable at this time. However, in the opinion of management, any such liability would be immaterial. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 E. LITIGATION The City is subject to certain legal claims in the normal course of business. Management does not expect the resolution of these claims will have a material impact on the City’s financial condition or results of operations. F. CONTINGENT LIABILITIES Tax Increment Notes In May 2002, the City entered into two limited tax increment notes with developers whereby the City will pay the developers a percentage of the available tax increment. Whether payments will occur and the amount of the payments is unpredictable since all payments are dependent on the City receiving tax increment revenues from the developer’s project. As such, this liability has not been recorded in the financial statements. Any potential liability ends with the decertification of the tax increment district. In December 2012, the City entered into a tax increment revenue note with a developer whereby the City will pay the developer the available tax increments as defined in the Tax Increment Development Agreement. Whether payments will occur and the amount of the payments is unpredictable since all payments are dependent on the City receiving tax increment revenues from the developer’s project. As such, this liability has not been recorded in the financial statements. Any potential liability ends with the decertification of the tax increment district. A schedule of the notes outstanding at December 31, 2014 is as follows: Amended or Original12/31/2014InterestMaturity Note PrincipalBalanceRateDate Twin Lakes Business Park2,424,199$ 731,460$ 8.00%01/31/2021 Shingle Creek Crossing Project2,300,000 2,300,000 6.00%02/01/2028 G. JOINT VENTURES AND JOINTLY GOVERNED ORGANIZATIONS The City has several agreements with other entities that provide reduced costs, better service, and additional benefits to the participants. The programs in which the City participates are listed below and amounts recorded within the current year’s financial statements are disclosed. Local Government Information Systems Association (LOGIS) This consortium of approximately 30 government entities provides computerized data processing and support services to its members. LOGIS is legally separate; the City does not appoint a voting majority of its board, and the Consortium is fiscally independent of the City. The total amount recorded within the 2014 financial statements of the City is $598,764 for general services and application upgrades provided. Costs were allocated to the various funds based on applications and/or use of services. Complete financial statements for LOGIS may be obtained at the LOGIS offices located at 5750 Duluth Street, Golden Valley, Minnesota 55422. LOGIS Insurance Group This group provides cooperative purchasing of health and life insurance benefits for approximately 45 governmental entities. The total of 2014 health and life insurance costs paid by the City was $1,368,949. Complete financial statements may be obtained from Gallagher Benefit services, Inc. located at 3600 American Blvd West, Bloomington, MN 55431. CITY OF BROOKLYN CENTER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS December 31, 2014 ) 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 4.B.2. 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. H. SUBSEQUENT EVENTS On January 21, 2015, the City issued a Taxable General Obligation Water Revenue Note. The note was issued by the Minnesota Public Facilities Authority to finance the construction of water treatment plant. Total funding available from this note is $19,662,352, and bears an interest rate of 1.00%. Repayment of the note will be made semi-annually in February and August annually, with the first interest payment due in August 2015, and the first principal payment due in August 2016. The final maturity of the note will be in August 2034. The note will be repaid with increases on user rates within the Water Utility fund, with those rate increases becoming effective April 1, 2015. The note is backed by the full faith and credit of the City. As of December 31, 2014, the City had not drawn down any of these funds, however the City had incurred expenses for the construction of the water treatment plant. The City received its first reimbursement, on January 30, 2015, in the amount of $4,468,266. wĻƨǒźƩĻķ {ǒƦƦƌĻƒĻƓƷğƩǤLƓŅƚƩƒğƷźƚƓ CITY OF BROOKLYN CENTER, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF FUNDING PROGRESS - OTHER POSTEMPLOYMENT BENEFITS For the Year Ended December 31, 2014 Unfunded ActuarialActuarialActuarialActuarialUAAL as a ValuationValue ofAccruedAccruedFundedCoveredPercentage of DateAssetsLiability (AAL)Liability (UAAL)RatioPayrollCovered Payroll January 1, 2010- 3,012,383$ 3,012,383$ 0.00%9,143,276$ 32.95% January 1, 2012- 2,620,367 2,620,367 0.00%9,472,237 27.66% January 1, 2014- 2,574,529 2,574,529 0.00%9,934,960 25.91% 81 82 /ƚƒĬźƓźƓŭεLƓķźǝźķǒğƌ CǒƓķ{ƷğƷĻƒĻƓƷƭε{ĭŷĻķǒƌĻƭ CITY OF BROOKLYN CENTER, MINNESOTA NONMAJOR SPECIAL REVENUE FUNDS A special revenue fund is used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. Housing and Redevelopment Authority (HRA ) This fund was established to account for housing and redevelopment projects within the City of Brooklyn Center. The HRA has the authority to levy an ad-valorem property tax levy, which is the primary funding source for th e expenditures from this fund. Annually, the cash balance at the end of the year is transferred into the EDA fund. Economic Development Authority (EDA ) This fund was established to account for the development related activities in the City of Brooklyn Center. The EDA generates the funding to accomplish the development projects from grants, excess funding from the HR A roperty tax levy, or from transfers from other funds of the City. p Community Development Block Gran t This fund was established to account for the collection of grant funding for related projects within the City. Durin g the year, the City received grant funding through the Neighborhood Stabilization Program, which is for th e acquisition of run-down properties, the improvement of said properties, and then marketing them to the public. Police Forfeitures This fund was established to account for the proceeds from property seized by Police Department personnel. Tax Increment District No. 2 This fund was established to account for the collection of tax increment generated revenues for parcels withi n the District. These funds are used to finance the various redevelopment activities within the District, whic h consisted of the redevelopment of the properties historically referred to as the Earle Brown Farm. Tax Increment District No. 4 This fund was established to account for the collection of tax increment generated revenues for parcels withi n the District. These funds are used to finance the various redevelopment activities within the District, whic h consisted of soil remediation projects within the France Avenue Business Park. City Initiative Grants Revenues and expenditures from grants received from outside entities are accounted for in the fund. The Police Department receive several federal, state and other local grants, which are accounted for here. Other activities include grant funding for local recreation programs and cable television. Centennial Ampitheate r This fund was established to account for the accumulation of donations and other funding sources that will b e used to build the Centennial Civic & Veterans Memorial Ampitheater. 83 CITY OF BROOKLYN CENTER, MINNESOTA DEBT SERVICE FUND Debt service funds are used to account for and report financial resources that are restricted, committed or assigned to expenditure for principal, interest and other charges related to long-term debt. General Obligation Improvement Bonds, 2004C This fund was established to accumulate collections of special assessments which were levied on the propert y owners who benefited from the improvements that were constructed with the proceeds of this bond. This bon d has a final maturity date of February 1, 2015. General Obligation Improvement Bonds, 2006A This fund was established to accumulate collections of special assessments which were levied on the propert y owners who benefited from the improvements that were constructed with the proceeds of this bond. This bon d has a final maturity date of February 1, 2017. General Obligation Improvement Bonds, 2008B This fund was established to accumulate collections of special assessments which were levied on the propert y owners who benefited from the improvements that were constructed with the proceeds of this bond. This bon d has a final maturity date of February 1, 2019. General Obligation Improvement Bonds, 2013B This fund was established to accumulate collections of special assessments which were levied on the propert y owners who benefited from the improvements that were constructed with the proceeds of this bond. This bon d has a final maturity date of February 1, 2024. Tax Increment Bonds, 2013A This fund was established to account for the collection of tax-increment generated revenues, which are annuall y transferred from Tax Increment District No. 3 fund. This bond was issued to finance various redevelopment projects within the City. This bond has a final maturity date of February 1, 2022. Tax Increment Bonds, 2008A This fund was established to account for the collection of tax-increment generated revenues, which are annuall y transferred from Tax Increment District No. 3 fund. This bond was issued to finance various redevelopment projects within the City. This bond has a final maturity date of February 1, 2018. Tax Increment Bonds, 2004D This fund was established to account for the collection of tax-increment generated revenues, which are annuall y transferred from Tax Increment District No. 3 fund. This bond was issued to finance various redevelopment projects within the City. This bond has a final maturity date of February 1, 2020. CITY OF BROOKLYN CENTER, MINNESOTA NONMAJOR CAPITAL PROJECTS FUNDS Capital projects funds are used to account for and report financial resources that are restricted, committed, o r assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and othe r capital assets. Capital Reserve Emergenc y This fund was established to account for monies held in reserve for catastrophic losses or unforeseen capital items. Street Reconstruction This fund was established to provide funds and to account for the expenditure of such funds, for major street infrastructure improvements. The accumulation of funds to provide for such improvements is an attempt to reduc e future debt issuance. The primary financing source for such improvements are franchise fees . Technolog y This fund was established to provide funds and to account for the expenditure of such funds, for technological improvements/renovations. CITY OF BROOKLYN CENTER, MINNESOTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2014 Total SpecialCapitalNonmajor RevenueProjectGovernmental ASSETS Cash and investments2,200,955$ 3,523,594$ 5,724,549$ Receivables: Accounts - net- 161,615 161,615 Current taxes1,478 - 1,478 Delinquent taxes5,128 - 5,128 Due from other governments116,577 - 116,577 Advances to other funds2,442,676 - 2,442,676 Assets held for resale537,000 - 537,000 Total assets5,303,814 3,685,209 8,989,023 LIABILITIES Accounts payable 74,425 53,987 128,412 Accrued salaries and wages 17,699 - 17,699 Due to other governments 1,570 - 1,570 Deposits payable 35,575 - 35,575 Total liabilities 129,269 53,987 183,256 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - property taxes 5,128 - 5,128 FUND BALANCES Restricted Tax increment financing 2,849,908 2,849,908- Economic development 1,537,221 1,537,221- Law enforcement enhancements 98,321 - 98,321 Community amphitheater 309,548 309,548- Committed Public safety 77,772 - 77,772 Cable communications 256,297 256,297- Community recreation 40,350 - 40,350 Emergency capital improvements 1,066,216- 1,066,216 Street improvements 2,541,388- 2,541,388 Technology improvements - 23,618 23,618 Total fund balances 5,169,417 3,631,222 8,800,639 Total liabilities, deferred inflows of resources and fund balances$5,303,814$ 8,989,0233,685,209$ CITY OF BROOKLYN CENTER, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2014 Total SpecialCapitalNonmajor RevenueProjectGovernmental REVENUES Property taxes278,350$ -$ 278,350$ Tax increments464,661 - 464,661 Franchise fees- 647,071 647,071 Intergovernmental614,719 - 614,719 Charges for services9,685 - 9,685 Fines and forfeits52,797 - 52,797 Investment earnings (net of market value adjustment)14,180 26,584 40,764 Miscellaneous61,052 - 61,052 Total revenues1,495,444 673,655 2,169,099 EXPENDITURES Current: General government- 436,689 436,689 Public safety177,801 - 177,801 Parks and recreation54,856 - 54,856 Economic development1,324,267 - 1,324,267 Capital outlay: General government- 76,333 76,333 Public Works- 1,311,905 1,311,905 Total expenditures1,556,924 1,824,927 3,381,851 Excess (deficiency) of revenues over (under) expenditures(61,480) (1,151,272) (1,212,752) OTHER FINANCING SOURCES (USES) Transfers in278,764 2,885,269 3,164,033 Transfers out(408,308) (1,286,759) (1,695,067) Total other financing sources (uses)(129,544) 1,598,510 1,468,966 Net change in fund balance(191,024) 447,238 256,214 Fund balances - January 1 - Restated5,360,441 3,183,984 8,544,425 Fund balances - December 315,169,417$ 3,631,222$$8,800,639 CITY OF BROOKLYN CENTER, MINNESOTA COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS December 31, 2014 Housing andEconomicCommunity RedevelopmentDevelopmentDevelopmentPolice AuthorityAuthorityBlock GrantForfeitures ASSETS Cash and investments-$ 1,027,659$ -$ 118,896$ Receivables: Current taxes1,478 - - - Delinquent taxes5,128 - - - Due from other governments- - 72,383 - Advances to other funds- - - - Assets held for resale- 537,000 - - Total assets6,606 1,564,659 72,383 118,896 LIABILITIES Accounts payable - 891 72,383 - Accrued salaries and wages - 13,025 - - Due to other governments - - - - Deposits payable - 15,000 - 20,575 Total liabilities - 28,916 72,383 20,575 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - property taxes 5,128 - - - FUND BALANCES Restricted Tax increment financing - -- - Economic development1,478 1,535,743 - - Law enforcement enhancements- - - 98,321 Community amphitheater- - - - Committed Public safety -- - - Cable communications- - - - Community recreation- - - - Total fund balances1,478 1,535,743 - 98,321 Total liabilities, deferred inflows of resources and fund balances6,606$ 1,564,659$ 72,383$ 118,896$ Total TaxTaxCityNonmajor IncrementIncrementInitiativeCentennialSpecial District No. 2District No. 4GrantsAmphitheaterRevenue $ 266,629142,254$ 335,969$ 309,548$ 2,200,955$ -- - - 1,478 -- - - 5,128 -- 44,194 - 116,577 -2,442,676 - - 2,442,676 -- - - 537,000 266,6292,584,930 380,163 309,548 5,303,814 -441 710 - 74,425 -- 4,674 - 17,699 1,210- 360 - 1,570 -- - - 35,575 1,210441 5,744 - 129,269 -- - - 5,128 265,4192,584,489 - - 2,849,908 -- - - 1,537,221 -- - - 98,321 --- 309,548 309,548 - - 77,772 - 77,772 - 256,297- 256,297- - - 40,350 - 40,350 2,584,489 265,419 374,419 309,548 5,169,417 $ 2,584,930$ 266,629$ 380,163$309,548$5,303,814 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, 2014 Housing andEconomicCommunity RedevelopmentDevelopmentDevelopmentPolice AuthorityAuthorityBlock GrantForfeitures REVENUES Property taxes278,350$ -$ -$ -$ Tax increments- - - - Intergovernmental- 170,394 251,471 - Charges for services- - - - Fines and forfeits- - - 52,797 Investment earnings (net of market value adjustment)- 7,250 - 721 Miscellaneous- 5,502 - - Total revenues278,350 183,146 251,471 53,518 EXPENDITURES Current: Public safety- - - 12,378 Parks and recreation- - - - Economic development- 513,406 121,927 - Total expenditures- 513,406 121,927 12,378 Excess (deficiency) of revenues over (under) expenditures278,350 (330,260) 129,544 41,140 OTHER FINANCING SOURCES (USES) Transfers in- 278,764 - - Transfers out(278,764) - (129,544) - Total other financing sources (uses)(278,764) 278,764 (129,544) - Net change in fund balance(414) (51,496) - 41,140 Fund balances - January 1 - Restated1,892 1,587,239 - 57,181 Fund balances - December 311,478$$1,535,743$-$98,321 Total TaxTaxCityNonmajor IncrementIncrementInitiativeCentennialSpecial District No. 2District No. 4GrantsAmphitheaterRevenue $ --$ -$ -$ 278,350$ 464,661- - - 464,661 -- 192,854 - 614,719 -- 9,685 - 9,685 -- - - 52,797 7791,524 2,467 1,439 14,180 -14,955 29,809 10,786 61,052 465,44016,479 234,815 12,225 1,495,444 - 165,423--177,801 --47,7777,07954,856 422,028266,906 - - 1,324,267 422,028266,906 213,200 7,079 1,556,924 43,412(250,427) 21,615 5,146 (61,480) -- - - 278,764 -- - - (408,308) -- - - (129,544) (250,427)43,41221,6155,146(191,024) 2,834,916222,007352,804304,4025,360,441 $2,584,489$265,419$374,419$309,548$5,169,417 CITY OF BROOKLYN CENTER, MINNESOTA COMBINING BALANCE SHEET NONMAJOR CAPITAL PROJECT FUNDS December 31, 2014 Total CapitalNonmajor ReserveStreetCapital EmergencyReconstructionTechnologyProjects ASSETS Cash and investments1,066,216$ 2,379,773$ 77,605$ 3,523,594$ Receivables: Accounts - net- 161,615 - 161,615 Total assets1,066,216 2,541,388 77,605 3,685,209 LIABILITIES Accounts payable- - 53,987 53,987 FUND BALANCES Committed Emergency capital improvements1,066,216 - - 1,066,216 Street improvements- 2,541,388 - 2,541,388 Technology improvements- - 23,618 23,618 Total fund balances1,066,216 2,541,388 23,618 3,631,222 Total liabilities, deferred inflows of resources and fund balances1,066,216$ 2,541,388$ 77,605$ 3,685,209$ 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, 2014 Total CapitalNonmajor ReserveStreetCapital EmergencyReconstructionTechnologyProjects REVENUES Franchise fees-$ 647,071$ -$ 647,071$ Investment earnings (net of market value adjustment)8,445 17,975 164 26,584 Total revenues8,445 665,046 164 673,655 EXPENDITURES Current: General government398,688 - 38,001 436,689 Capital outlay: General government- - 76,333 76,333 Public works- 1,311,905 - 1,311,905 Total expenditures398,688 1,311,905 114,334 1,824,927 Excess (deficiency) of revenues over (under) expenditures(390,243) (646,859) (114,170) (1,151,272) OTHER FINANCING SOURCES (USES) Transfers in- 2,785,269 100,000 2,885,269 Transfers out- (1,286,759) - (1,286,759) Total other financing sources (uses)- 1,498,510 100,000 1,598,510 Net change in fund balance(390,243) 851,651 (14,170) 447,238 Fund balances - January 11,456,459 1,689,737 37,788 3,183,984 Fund balances - December 311,066,216$ 2,541,388$ 23,618$ 3,631,222$ CITY OF BROOKLYN CENTER, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND Page 1 of 5 CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Variance with Final Budget - Budgeted AmountsActualPositive OriginalFinalAmounts(Negative) REVENUES Taxes: Property taxes14,032,326$ 14,032,326$ 14,068,286$ 35,960$ Penalties and interest- - 8,844 8,844 Lodging tax860,000 860,000 914,651 54,651 Total taxes14,892,326 14,892,326 14,991,781 99,455 Special assessments75,000 75,000 128,138 53,138 Licenses and permits: Liquor and beer licenses92,750 92,750 56,318 (36,432) Building permits275,000 275,000 501,016 226,016 Mechanical permits40,000 40,000 74,768 34,768 Sewer and water permits1,500 1,500 3,325 1,825 Plumbing permits30,000 30,000 63,830 33,830 Garbage licenses3,150 3,150 3,435 285 Mechanical licenses7,500 7,500 9,292 1,792 Service station licenses2,500 2,500 3,090 590 Vehicle dealer licenses1,750 1,750 1,250 (500) Bowling licenses720 720 720 - Cigarette licenses3,300 3,300 3,513 213 Sign permits5,000 5,000 4,545 (455) Rental dwelling licenses226,628 226,628 229,724 3,096 Amusement licenses785785710 (75) Electrical Permits 45,000 45,000 59,476 14,476 ROW permits 3,000 3,000 1,814 (1,186) Miscellaneous licenses and permits 5,085 5,085 4,584 (501) Total licenses and permits 743,668 743,668 1,021,410 277,742 Intergovernmental: State: Local government aid 772,307 772,307 772,307 - Police pension aid 265,500 265,500 340,815 75,315 PERA aid 34,365 34,365 34,365 - Fireperson pension aid 98,828 98,828 133,745 34,917 Police training - - 14,803 14,803 Other state grants - - 24,947 24,947 Local: Miscellaneous grants 82,800 82,800 80,465 (2,335) Total intergovernmental 1,253,800 1,253,800 1,401,447 147,647 Charges for services: General government charges 156,150 156,150 208,175 52,025 Public safety charges 58,100 58,100 13,239 (44,861) Community development fees 10,000 10,000 2,653 (7,347) Recreation fees 254,731 254,731 256,340 1,609 Community Center fees 404,100 404,100 330,190 (73,910) Total charges for services 883,081 883,081 810,597 (72,484) CITY OF BROOKLYN CENTER, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND Page 2 of 5 CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Variance with Final Budget - Budgeted AmountsActualPositive OriginalFinalAmounts(Negative) Revenues (continued): Fines and forfeits349,500$ 349,500$ 312,130$ (37,370)$ Miscellaneous: Investment earnings (net of market value change)32,000 32,000 61,770 29,770 Other86,875 86,875 138,349 51,474 Total miscellaneous118,875 118,875 200,119 81,244 Total revenues18,316,250 18,316,250 18,865,622 549,372 EXPENDITURES General government: Mayor and council: Current: Personal services52,797 52,797 51,747 1,050 Supplies400 400 530 (130) Services and other charges91,400 91,400 72,269 19,131 Total mayor and council144,597 144,597 124,546 20,051 Administrative (Manager, Clerk, HR) offices: Current: Personal services717,322 717,322 771,037 (53,715) Supplies6,200 6,200 5,568 632 Services and other charges63,160 63,160 32,059 31,101 Total administrative office786,682 786,682 808,664 (21,982) Elections and voter registration: Current: Personal services70,563 70,563 70,076 487 Supplies1,200 1,200 810 390 Services and other charges44,904 44,904 36,440 8,464 Total elections and voter registration116,667 116,667 107,326 9,341 Finance: Current: Personal services493,386493,386 467,450 25,936 Supplies 7,600 7,600 4,269 3,331 Services and other charges 28,875 28,875 29,616 (741) Total finance 529,861 529,861 501,335 28,526 Assessing Current: Personal services 306,896 306,896 114,855 192,041 Supplies 5,625 5,625 598 5,027 Services and other charges 62,274 62,274 144,138 (81,864) Total assessing 374,795 374,795 259,591 115,204 Legal: Current: Services and other charges 393,750 393,750 403,021 (9,271) CITY OF BROOKLYN CENTER, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND Page 3 of 5 CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Variance with Final Budget - Budgeted AmountsActualPositive OriginalFinalAmounts(Negative) Expenditures (continued): General government (continued): Government buildings: Current: Personal services272,547$ 272,547$ 179,944$ 92,603$ Supplies73,200 73,200 54,402 18,798 Services and other charges441,420 441,420 431,264 10,156 Total current787,167 787,167 665,610 121,557 Capital outlay22,500 22,500 8,453 14,047 Total government buildings809,667 809,667 674,063 135,604 Information technology: Current: Personal services225,447 225,447 225,964 (517) Supplies4,600 4,600 2,072 2,528 Services and other charges230,673 230,673 237,164 (6,491) Total information technology460,720 460,720 465,200 (4,480) Total general government3,616,739 3,616,739 3,343,746 272,993 Public safety: Police protection: Current: Personal services6,376,376 6,376,376 5,953,875 422,501 Supplies141,865 141,865 155,180 (13,315) Services and other charges1,160,889 1,160,889 1,038,951 121,938 Total current7,679,130 7,679,130 7,148,006 531,124 Capital outlay16,000 16,000 - 16,000 Total police protection7,695,130 7,695,130 7,148,006 547,124 Fire protection: Current: 620,136620,136 Personal services 662,405 (42,269) Supplies 98,000 98,000 90,024 7,976 Services and other charges 331,546 331,546 336,741 (5,195) Total fire protection 1,049,682 1,049,682 1,089,170 (39,488) Protective inspection: Current: Personal services 944,206 944,206 897,115 47,091 Supplies 21,000 21,000 14,425 6,575 Services and other charges 196,883 196,883 225,041 (28,158) Total current 1,162,089 1,162,089 1,136,581 25,508 Capital outlay 400 400 - 400 Total protective inspection 1,162,489 1,162,489 1,136,581 25,908 Emergency preparedness: Current: Personal services 72,025 72,025 66,842 5,183 Supplies 7,050 7,050 - 7,050 Services and other charges 6,250 6,250 3,839 2,411 Total emergency preparedness 85,325 85,325 70,681 14,644 Total public safety 9,992,626 9,992,626 9,444,438 548,188 CITY OF BROOKLYN CENTER, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND Page 4 of 5 CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Variance with Final Budget - Budgeted AmountsActualPositive OriginalFinalAmounts(Negative) Expenditures (continued): Public works: Engineering department: Current: Personal services767,450$ 767,450$ 739,236$ 28,214$ Supplies1,815 1,815 1,569 246 Services and other charges59,395 59,395 65,151 (5,756) Total engineering department828,660 828,660 805,956 22,704 Street department: Current: Personal services781,602 781,602 793,927 (12,325) Supplies128,550 128,550 131,817 (3,267) Services and other charges722,822 722,822 697,012 25,810 Total street department1,632,974 1,632,974 1,622,756 10,218 Total public works2,461,634 2,461,634 2,428,712 32,922 Community services: Social services: Current: Services and other charges161,000 161,000 145,503 15,497 Parks and recreation: Administration: Current: Personal services200,614 200,614 206,397 (5,783) Supplies- - 249 (249) Services and other charges4,850 4,850 2,163 2,687 Total administration205,464 205,464 208,809 (3,345) Recreation programs: Current: Personal services492,791 492,791 502,067 (9,276) Supplies42,880 42,880 39,658 3,222 Services and other charges178,580178,580 146,176 32,404 Total recreation programs714,251 714,251 687,901 26,350 Community center: Current: Personal services303,114 303,114 302,361 753 Supplies24,350 24,350 40,250 (15,900) Services and other charges193,250 193,250 175,634 17,616 Total current520,714 520,714 518,245 2,469 Capital outlay22,600 22,600 3,851 18,749 Total community center543,314 543,314 522,096 21,218 CITY OF BROOKLYN CENTER, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND Page 5 of 5 CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Variance with Final Budget - Budgeted AmountsActualPositive OriginalFinalAmounts(Negative) Expenditures (continued): Parks and recreation (continued): Park maintenance: Current: Personal services612,795$ 612,795$ 586,441$ 26,354$ Supplies53,275 53,275 38,438 14,837 Services and other charges396,312 396,312 362,932 33,380 Total park maintenance1,062,382 1,062,382 987,811 74,571 Total parks and recreation2,525,411 2,525,411 2,406,617 118,794 Economic development: Convention bureau: Current: Services and other charges408,500 408,500 434,459 (25,959) Nondepartmental: Expenditures not charged to departments: Current: Personal services(125,000) (125,000) - (125,000) Supplies26,500 26,500 15,030 11,470 Services and other charges347,870 347,870 349,471 (1,601) Total nondepartmental249,370 249,370 364,501 (115,131) Total expenditures19,415,280 19,415,280 18,567,976 847,304 Excess (deficiency) of revenues over (under) expenditures(1,099,030) (1,099,030) 297,646 1,396,676 OTHER FINANCING SOURCES (USES) Transfers in150,000 150,000 129,544 (20,456) Transfers in - administrative services reimbursed1,049,030 1,049,030 1,064,302 15,272 Transfers out(100,000) (100,000) (2,854,124) (2,754,124) Total other financing sources (uses)1,099,030 1,099,030 (1,660,278) (2,759,308) (1,362,632) (1,362,632) Net change in fund balance- - Fund balance - January 1 12,382,713 12,382,713 12,382,713 - Fund balance - December 31$12,382,713$12,382,713$11,020,081$(1,362,632) CITY OF BROOKLYN CENTER, MINNESOTA SPECIAL REVENUE FUND - HOUSING AND REDEVELOPMENT AUTHORITY SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts REVENUES Taxes: Property taxes282,110$ 282,110$ 278,350$ OTHER FINANCING SOURCES (USES) Transfers out(282,110) (282,110) (278,764) Net change in fund balance- - (414) Fund balance - January 11,892 1,892 1,892 Fund balance - December 311,892$ 1,892$ 1,478$ CITY OF BROOKLYN CENTER, MINNESOTA SPECIAL REVENUE FUND - ECONOMIC DEVELOPMENT AUTHORITY SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts REVENUES Intergovernmental-$ -$ 170,394$ Investment earnings (net of market value adjustment)- - 7,250 Miscellaneous- - 5,502 Total revenues- - 183,146 EXPENDITURES Current: Economic development: Personal services262,516 262,516 276,375 Supplies500 500 36 Services and other charges175,215 175,215 236,995 Total expenditures438,231 438,231 513,406 Excess (deficiency) of revenues over (under) expenditures(438,231) (438,231) (330,260) OTHER FINANCING SOURCES Transfers in282,110 282,110 278,764 Net change in fund balance(156,121) (156,121) (51,496) Fund balance - January 1 - Restated1,587,239 1,587,239 1,587,239 Fund balance - December 311,431,118$ 1,431,118$ 1,535,743$ CITY OF BROOKLYN CENTER, MINNESOTA SPECIAL REVENUE FUND - COMMUNITY DEVELOPMENT BLOCK GRANT SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts REVENUES Intergovernmental200,000$ 200,000$ 251,471$ EXPENDITURES Current: Economic development: Services and other charges50,000 50,000 121,927 Excess of revenues over expenditures150,000 150,000 129,544 OTHER FINANCING SOURCES (USES) Transfers out(150,000) (150,000) (129,544) Net change in fund balance- - - Fund balance - January 1- - - Fund balance - December 31-$ -$ -$ CITY OF BROOKLYN CENTER, MINNESOTA SPECIAL REVENUE FUND - TAX INCREMENT DISTRICT NO. 3 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts REVENUES Tax increments2,938,650$ 2,938,650$ 3,038,983$ Charges for services- - 363,788 Investment earnings (net of market value adjustment)- - 23,123 Miscellaneous- - 32,843 Total revenues2,938,650 2,938,650 3,458,737 EXPENDITURES Current: Economic development: Services and other charges973,550 973,550 936,949 Capital outlay: Economic development- - 377,685 Total expenditures973,550 973,550 1,314,634 Excess of revenues over expenditures1,965,100 1,965,100 2,144,103 OTHER FINANCING SOURCES (USES) Transfers out(1,965,100) (1,965,100) (2,073,345) Net change in fund balance- - 70,758 Fund balance - January 1 - Restated17,827,991 17,827,991 17,827,991 Fund balance - December 3117,827,991$ 17,827,991$ 17,898,749$ CITY OF BROOKLYN CENTER, MINNESOTA SPECIAL REVENUE FUND - TAX INCREMENT DISTRICT NO. 4 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts REVENUES Tax increments384,310$ 384,310$ 464,661$ Investment earnings (net of market value adjustment)- - 779 Total revenues384,310 384,310 465,440 EXPENDITURES Current: Economic development: Services and other charges384,310 384,310 422,028 Net change in fund balance- - 43,412 Fund balance - January 1222,007 222,007 222,007 Fund balance - December 31222,007$ 222,007$ 265,419$ CITY OF BROOKLYN CENTER, MINNESOTA SPECIAL REVENUE FUND - CITY INITIATIVES GRANT SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts REVENUES Intergovernmental17,500$ 17,500$ 192,854$ Charges for services9,825 9,825 9,685 Investment earnings (net of market value adjustment)- - 2,467 Miscellaneous11,725 11,725 29,809 Total revenues39,050 39,050 234,815 EXPENDITURES Current: Public safety: Personal services5,772 5,772 150,440 Supplies- - 11,834 Services and other charges- - 3,149 Parks and recreation: Personal services13,150 13,150 11,814 Supplies8,250 8,250 16,239 Services and other charges13,775 13,775 19,724 Total expenditures40,947 40,947 213,200 Net change in fund balance(1,897) (1,897) 21,615 Fund balance - January 1352,804 352,804 352,804 Fund balance - December 31350,907$ 350,907$ 374,419$ CITY OF BROOKLYN CENTER, MINNESOTA DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts REVENUES Property taxes687,000$ 687,000$ 678,966$ Special assessments603,046 603,046 674,253 Investment earnings (net of market value adjustment)1,350 1,350 8,836 Total revenues1,291,396 1,291,396 1,362,055 EXPENDITURES Debt service: Principal1,905,000 1,905,000 1,905,000 Interest711,872 711,872 802,892 Fiscal agent fees7,200 7,200 9,039 Total expenditures2,624,072 2,624,072 2,716,931 Excess (defiency) of revenues over (under) expenditures(1,332,676) (1,332,676) (1,354,876) OTHER FINANCING SOURCES Transfers in 2,075,445 2,075,445 2,073,345 Net change in fund balance742,769 742,769 718,469 Fund balance - January 11,190,972 1,190,972 1,190,972 Fund balance - December 311,933,741$ 1,933,741$ 1,909,441$ CITY OF BROOKLYN CENTER, MINNESOTA CAPITAL PROJECT FUND - CAPITAL IMPROVEMENTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts REVENUES Property taxes-$ -$ 2,156$ Intergovernmental- - 580,133 Charges for services- - 38 Special assessments- - 1,938 Investment earnings (net of market value adjustment)- - 34,082 Miscellaneous- - 81,217 Total revenues- - 699,564 EXPENDITURES Capital outlay: Parks and recreation5,082,000 5,082,000 379,406 Excess (deficiency) of revenues over (under) expenditures(5,082,000) (5,082,000) 320,158 OTHER FINANCING SOURCES Transfers in200,000 200,000 3,116,314 Net change in fund balance(4,882,000) (4,882,000) 3,436,472 Fund balance - January 13,072,758 3,072,758 3,072,758 Fund balance - December 31(1,809,242)$ (1,809,242)$ 6,509,230$ 106 CITY OF BROOKLYN CENTER, MINNESOTA CAPITAL PROJECT FUND - MUNICIPAL STATE AID FOR CONSTRUCTION SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts REVENUES Intergovernmental1,025,000$ 1,025,000$ 110,000$ Investment earnings (net of market value adjustment)- - 17,922 Total revenues1,025,000 1,025,000 127,922 EXPENDITURES Current: Public works: Supplies42,800 42,800 42,345 Services and other charges47,200 47,200 47,199 Capital outlay: Public works250,000 250,000 250,000 Total expenditures340,000 340,000 339,544 Excess (deficiency) of revenues over (under) expenditures685,000 685,000 (211,622) OTHER FINANCING SOURCES (USES) Transfers in- - 78,000 Transfers out- - (360,000) Total other financing sources (uses)- - (282,000) Net change in fund balance685,000 685,000 (493,622) Fund balance - January 12,323,722 2,323,722 2,323,722 Fund balance - December 313,008,722$ 3,008,722$ 1,830,100$ 107 CITY OF BROOKLYN CENTER, MINNESOTA CAPITAL PROJECT FUND - INFRASTRUCTURE CONSTRUCTION SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts REVENUES Special assessments-$ -$ 989,797$ Charges for services- - 45,405 Investment earnings (net of market value adjustment)- - 1,536 Miscellaneous- - 31,229 Total revenues- - 1,067,967 EXPENDITURES Current: Public works Supplies- - 29 Services and other charges- - 55,276 Capital outlay: Public works1,430,000 1,430,000 1,542,554 Total expenditures1,430,000 1,430,000 1,597,859 Excess (deficiency) of revenues over (under) expenditures(1,430,000) (1,430,000) (529,892) OTHER FINANCING SOURCES (USES) Transfers in1,430,000 1,430,000 1,902,259 Transfers out- - (2,805,702) Total other financing sources (uses)1,430,000 1,430,000 (903,443) Net change in fund balance- - (1,433,335) Fund balance - January 1970,142 970,142 970,142 Fund balance (deficit) - December 31970,142$ 970,142$ (463,193)$ 108 CITY OF BROOKLYN CENTER, MINNESOTA CAPITAL PROJECT FUND - STREET RECONSTRUCTION SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts REVENUES Franchise fees680,000$ 680,000$ 647,071$ Investment earnings (net of market value adjustment)- - 17,975 Total revenues680,000 680,000 665,046 EXPENDITURES Capital outlay: Public works1,560,000 1,560,000 1,311,905 Excess (deficiency) of revenues over (under) expenditures(880,000) (880,000) (646,859) OTHER FINANCING SOURCES (USES) Transfers in- - 2,785,269 Transfers out- - (1,286,759) Total other financing sources (uses)- - 1,498,510 Net change in fund balance(880,000) (880,000) 851,651 Fund balance - January 11,689,737 1,689,737 1,689,737 Fund balance - December 31809,737$ 809,737$ 2,541,388$ 109 CITY OF BROOKLYN CENTER, MINNESOTA CAPITAL PROJECT FUND - TECHNOLOGY SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts REVENUES Investment earnings (net of market value adjustment)-$ -$ 164$ EXPENDITURES Current: General government: Supplies64,125 64,125 38,001 Capital outlay: General government132,000 132,000 76,333 Total expenditures196,125 196,125 114,334 Excess (deficiency) of revenues over (under) expenditures(196,125) (196,125) (114,170) OTHER FINANCING SOURCES Transfers in100,000 100,000 100,000 Net change in fund balance(96,125) (96,125) (14,170) Fund balance - January 137,788 37,788 37,788 Fund balance - December 31(58,337)$ (58,337)$ 23,618$ 110 111 CITY OF BROOKLYN CENTER, MINNESOTA COMBINING BALANCE SHEET DEBT SERVICE FUND BY ACCOUNT December 31, 2014 GeneralGeneralGeneral ObligationObligationObligation ImprovementImprovementImprovement BondsBondsBonds 2004C2006A2008B ASSETS Cash and investments$ 86,892$ 291,852$ 640,956 Receivables: Current taxes - -- Delinquent taxes- - - Special assessments5,874 144,166 637,751 Total assets92,766 436,018 1,278,707 LIABILITIES Accounts payable275 275 275 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - property taxes- - - Unavailable revenue - special assessments4,235 143,405 625,942 Total deferred inflows of resources4,235 143,405 625,942 FUND BALANCES (DEFICITS) Restricted for debt service88,256 292,338 652,490 Unassigned- - - Total fund balances (deficits)88,256 292,338 652,490 Total liabilities, deferred inflows of resources and fund balances (deficits)92,766$ 436,018$ 1,278,707$ General ObligationTaxTaxTax ImprovementIncrementIncrementIncrementTotal BondsBondsBondsBondsDebt 2013B2013A2008A2004DService $ 873,332$ -$ -$ 1,893,032-$ 3,220 - - - 3,220 5,546 - - - 5,546 1,159,045 - - 1,946,836- 2,041,143 -- 3,848,634- 275 275 275 275 1,925 5,546 - - - 5,546 1,158,140 - - 1,931,722- 1,163,686 - - 1,937,268- 877,182 - - 1,910,266- - (275) (275) (275) (825) 877,182 (275) (275) (275) 1,909,441 $ 2,041,143$ -$-$ 3,848,634-$ CITY OF BROOKLYN CENTER, MINNESOTA COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES DEBT SERVICE FUND BY ACCOUNT For the Year Ended December 31, 2014 GeneralGeneralGeneral ObligationObligationObligation ImprovementImprovementImprovement BondsBondsBonds 2004C2006A2008B REVENUES Property taxes$ --$ -$ Special assessments30,286 114,016 242,043 Investment earnings (net of market value adjustment)523 1,697 3,828 Total revenues30,809 115,713 245,871 EXPENDITURES Debt service: Principal90,000 140,000 245,000 Interest4,928 14,960 49,539 Fiscal agent fees956 1,187 3,711 Total expenditures95,884 156,147 298,250 Excess (deficiency) of revenues over (under) expenditures(65,075) (40,434) (52,379) OTHER FINANCING SOURCES Transfers in- - - Net change in fund balances(65,075) (40,434) (52,379) Fund balances - January 1153,331 332,772 704,869 Fund balances (deficits) - December 3188,256$ 292,338$ 652,490$ General ObligationTaxTaxTax ImprovementIncrementIncrementIncrementTotal BondsBondsBondsBondsDebt 2013B2013A2008A2004DService $ 678,966$ -$ -$ 678,966-$ 287,908 - - 674,253- 2,788 - - - 8,836 969,662 - - 1,362,055- - 125,000- 1,305,000 1,905,000 91,020 110,345 28,781 503,319 802,892 1,460 275 725 725 9,039 92,480 110,620 154,506 1,809,044 2,716,931 877,182 (110,620) (154,506) (1,809,044) (1,354,876) 110,345- 154,231 1,808,769 2,073,345 877,182 (275) (275) (275) 718,469 - - - 1,190,972- $ 877,182$ (275)$ (275)$(275)$1,909,441 CITY OF BROOKLYN CENTER, MINNESOTA DEBT SERVICE FUND - G.O. IMPROVEMENT BONDS, 2004C SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts REVENUES Special assessments110,342$ 110,342$ 30,286$ Investment earnings (net of market value adjustment)200 200 523 Total revenues110,542 110,542 30,809 EXPENDITURES Debt service: Principal90,000 90,000 90,000 Interest4,928 4,928 4,928 Fiscal agent fees1,200 1,200 956 Total expenditures96,128 96,128 95,884 Net change in fund balance14,414 14,414 (65,075) Fund balance - January 1153,331 153,331 153,331 Fund balance - December 31167,745$ 167,745$ 88,256$ CITY OF BROOKLYN CENTER, MINNESOTA DEBT SERVICE FUND - G.O. IMPROVEMENT BONDS, 2006A SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts REVENUES Special assessments169,459$ 169,459$ 114,016$ Investment earnings (net of market value adjustment)400 400 1,697 Total revenues169,859 169,859 115,713 EXPENDITURES Debt service: Principal140,000 140,000 140,000 Interest14,960 14,960 14,960 Fiscal agent fees1,500 1,500 1,187 Total expenditures156,460 156,460 156,147 Net change in fund balance13,399 13,399 (40,434) Fund balance - January 1332,772 332,772 332,772 Fund balance - December 31346,171$ 346,171$ 292,338$ CITY OF BROOKLYN CENTER, MINNESOTA DEBT SERVICE FUND - G.O. IMPROVEMENT BONDS, 2008B SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts REVENUES Special assessments323,245$ 323,245$ 242,043$ Investment earnings (net of market value adjustment)750 750 3,828 Total revenues323,995 323,995 245,871 EXPENDITURES Debt service: Principal245,000 245,000 245,000 Interest49,539 49,539 49,539 Fiscal agent fees1,500 1,500 3,711 Total expenditures296,039 296,039 298,250 Net change in fund balance27,956 27,956 (52,379) Fund balance - January 1704,869 704,869 704,869 Fund balance - December 31732,825$ 732,825$ 652,490$ CITY OF BROOKLYN CENTER, MINNESOTA DEBT SERVICE FUND - G.O. IMPROVEMENT BONDS, 2013B SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts REVENUES Property taxes687,000$ 687,000$ 678,966$ Special assessments- - 287,908 Investment earnings (net of market value adjustment)- - 2,788 Total revenues687,000 687,000 969,662 EXPENDITURES Debt service: Interest- - 91,020 Fiscal agent fees- - 1,460 Total expenditures- - 92,480 Net change in fund balance687,000 687,000 877,182 Fund balance - January 1- - - Fund balance - December 31687,000$ 687,000$ 877,182$ CITY OF BROOKLYN CENTER, MINNESOTA DEBT SERVICE FUND - G.O. TAX INCREMENT BONDS, 2013A SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts EXPENDITURES Debt service: Interest110,345$ 110,345$ 110,345$ Fiscal agent fees- - 275 Total expenditures110,345 110,345 110,620 OTHER FINANCING SOURCES Transfers in110,345 110,345 110,345 Net change in fund balance- - (275) Fund balance - January 1- - - Fund balance (deficit) - December 31-$ -$ (275)$ CITY OF BROOKLYN CENTER, MINNESOTA DEBT SERVICE FUND - G.O. TAX INCREMENT BONDS, 2008A SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts EXPENDITURES Debt service: Principal125,000$ 125,000$ 125,000$ Interest28,781 28,781 28,781 Fiscal agent fees1,500 1,500 725 Total expenditures155,281 155,281 154,506 OTHER FINANCING SOURCES Transfers in155,281 155,281 154,231 Net change in fund balance- - (275) Fund balance - January 1- - - Fund balance (deficit) - December 31-$ -$ (275)$ CITY OF BROOKLYN CENTER, MINNESOTA DEBT SERVICE FUND - G.O. TAX INCREMENT BONDS, 2004D SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Budgeted AmountsActual OriginalFinalAmounts EXPENDITURES Debt service: Principal1,305,000$ 1,305,000$ 1,305,000$ Interest503,319 503,319 503,319 Fiscal agent fees1,500 1,500 725 Total expenditures1,809,819 1,809,819 1,809,044 OTHER FINANCING SOURCES Transfers in1,809,819 1,809,819 1,808,769 Net change in fund balance- - (275) Fund balance - January 1- - - Fund balance (deficit) - December 31-$ -$ (275)$ CITY OF BROOKLYN CENTER, MINNESOTA INTERNAL SERVICE FUNDS Internal service funds are used to account for and report financial resources for the purchase of goods or services rovided by one department to other departments of the City on a cost reimbursement basis. p Central Garage This fund was established to account for the acquisition and maintenance of all City vehicles and rolling stock equipment. Vehicle and equipment maintenance and repair costs are charged to the departments as incurred. Replacement costs are charged to the departments over the estimated useful life of the vehicles and equipment. Employees (EE) Retirement Benefits 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 employeers hired befor e 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. Employees (EE) Compensated Absences This fund accounts for payment of unused vacation and vested sick leave benefits, and the allocation of such costs to the respective departments and funds of the City. 123 CITY OF BROOKLYN CENTER, MINNESOTA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS December 31, 2014 Total CentralEE RetirementEE CompInternal GarageBenefitAbsencesService ASSETS Current assets: Cash and cash equivalents4,690,333$ 675,036$ 1,282,093$ 6,647,462$ Receivables: Accounts - net18,318 - - 18,318 Inventories23,537 - - 23,537 Total current assets4,732,188 675,036 1,282,093 6,689,317 Noncurrent assets: Capital assets: Land improvements166,108 - - 166,108 Machinery and equipment8,738,312 - - 8,738,312 Total capital assets8,904,420 - - 8,904,420 Less: accumulated depreciation(5,211,569) - - (5,211,569) Net capital assets3,692,851 - - 3,692,851 Total assets8,425,039 675,036 1,282,093 10,382,168 LIABILITIES Current liabilities: Accounts payable54,384 - - 54,384 Accrued salaries and wages14,496 (743) - 13,753 Due to other governments48 - - 48 Compensated absences payable- - 128,209 128,209 Total current liabilities68,928 (743) 128,209 196,394 Noncurrent liabilities: Compensated absences payable- - 1,153,884 1,153,884 Net OPEB obligation- 629,994 - 629,994 Total noncurrent liabilities- 629,994 1,153,884 1,783,878 Total liabilities68,928629,2511,282,0931,980,272 NET POSITION Investment in capital assets3,692,851- 3,692,851- Unrestricted4,663,26045,785-4,709,045 Total net positio$ 45,7858,356,111$ -$ 8,401,896$ n 124 CITY OF BROOKLYN CENTER, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS For the Year Ended December 31, 2014 Total CentralEE RetirementEE CompInternal GarageBenefitAbsencesService OPERATING REVENUES Sales and user fees1,760,636$ -$ 144,717$ 1,905,353$ OPERATING EXPENSES Personal services352,313 288,297 153,693 794,303 Supplies513,684 - - 513,684 Other services169,982 - - 169,982 Insurance54,525 - - 54,525 Utilities364 - - 364 Depreciation720,199 - - 720,199 Total operating expenses1,811,067 288,297 153,693 2,253,057 Operating income (loss)(50,431) (288,297) (8,976) (347,704) NONOPERATING REVENUES Intergovernmental- 8,496 - 8,496 Investment earnings (net of market value adjustment)33,299 5,748 8,976 48,023 Gain on sale of capital assets27,100 - - 27,100 Other revenue88,357 - - 88,357 Total nonoperating revenues148,756 14,244 8,976 171,976 Change in net position98,325 (274,053) - (175,728) Net position - January 18,257,786 319,838 - 8,577,624 et position - December 31$8,356,111$45,785$ 8,401,896-$ N 125 CITY OF BROOKLYN CENTER, MINNESOTA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2014 Total CentralEE RetirementEE CompInternal GarageBenefitAbsencesService CASH FLOWS FROM OPERATING ACTIVITIES Receipts from interfund services provided$ 1,763,352$ 144,717-$ $ 1,908,069 Other operating receipts 88,357 - - 88,357 Payments to suppliers (758,997) - (758,997)- Payments to employees (354,785) (246,234) (104,151) (705,170) Net cash flows provided (used) by operating activities 737,927 (246,234) 40,566 532,259 CASH FLOWS FROM NONCAPITAL S FINANCING ACTIVITIE Intergovernmental-8,496-8,496 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets (695,571) - (695,571)- Proceeds from sale of assets 33,978 - - 33,978 Net cash flows provided (used) by capital and related financing activities (661,593) - (661,593)- S CASH FLOWS FROM INVESTING ACTIVITIE Interest on investments 33,299 5,748 8,976 48,023 Net increase (decrease) in cash and cash equivalents 109,633 (231,990) 49,542 (72,815) Cash and cash equivalents - January 1 4,580,700 907,026 1,232,551 6,720,277 Cash and cash equivalents - December 31$4,690,333$675,036$ 1,282,093$6,647,462 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES Operating income (loss) $ (50,431)$ (288,297)$ (8,976)$ (347,704) Adjustments to reconcile operating income (loss) to net cash flows provided (used) by operating activities: Other income related to operations 88,357 - - 88,357 Depreciation 720,199 - 720,199- (Increase) decrease in assets: Accounts receivable 2,716 - - 2,716 Inventories (1,923) - - (1,923) Increase (decrease) in liabilities: Accounts payable (18,519) - (18,519)- Accrued salaries and wages (2,472) 42,063 49,542 89,133 Net cash provided (used) by operating activities$737,927$(246,234)$ 40,566$532,259 NONCASH FINANCING ACTIVITIES Acquisitions of capital assets on account$ 38,670$ -$ -$ 38,670 Gain (loss) on sale of capital assets$ (6,878)$ -$ -$ (6,878) 126 {ƷğƷźƭƷźĭğƌ{ĻĭƷźƚƓ 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 128 These tables contain trend information to help the reader understand the City’s financial performance by placing it in historical perspective. Revenue Capacity 142 These tables contain information to help the reader assess the City’s most significant “own-source” revenue, property taxes. Debt Capacity 148 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 155 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 157 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. CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) NET POSITION BY COMPONENT Last ten fiscal years (accrual basis of accounting) 2005200620072008 Governmental activities Net investment in capital assets21,992,263$ 28,191,206$ 30,780,590$ 31,423,905$ Restricted29,326,928 27,637,465 21,738,515 31,850,784 Unrestricted6,793,778 4,055,312 8,061,157 690,424 Total governmental activities net position58,112,969$ 59,883,983$ 60,580,262$ 63,965,113$ Business-type activities Investment in capital assets37,988,441$ 38,248,496$ 40,466,892$ 42,572,360$ Unrestricted7,087,856 7,973,318 9,845,252 10,466,919 Total business-type activities net position45,076,297$ 46,221,814$ 50,312,144$ 53,039,279$ Primary government Net investment in capital assets59,980,704$ 66,439,702$ 71,247,482$ 73,996,265$ Restricted29,326,928 27,637,465 21,738,515 31,850,784 Unrestricted13,881,634 12,028,630 17,906,409 11,157,343 Total primary government net position103,189,266$ 106,105,797$ 110,892,406$ 117,004,392$ Sources: The data for this table has been extracted from the respective years CAFR document. Fund Balance and Governmental Fund Type Note: During 2011, the City implemented GASB Statement No. 54, Definitions. As part of this implementation, certain reclassifications occurred for funds that were reported as Governmental activities prior to 2011, that are now reported as business-type activities. Those balances prior to 2011 have not been restated in this statistical schedule. Table 1 200920102011201220132014 $ 40,978,16533,550,664$ 45,761,042$ 45,261,629$ 42,281,203$ 42,947,577$ 22,067,72629,027,991 24,847,507 24,259,292 27,219,086 28,061,977 6,985,9724,082,990 4,376,334 5,875,289 11,205,289 12,357,196 $ 70,031,86366,661,645$ 74,984,883$ 75,396,210$ 80,705,578$ 83,366,750$ $ 42,800,62442,297,110$ 45,051,128$ 42,406,210$ 42,466,488$ 48,537,132$ 8,673,1688,835,644 8,300,659 11,856,924 12,208,126 6,819,765 $ 51,473,79251,132,754$ 53,351,787$ 54,263,134$ 54,674,614$ 55,356,897$ $ 83,778,78975,847,774$ 90,812,170$ 87,667,839$ 84,747,691$ 91,484,709$ 22,067,72629,027,991 24,847,507 24,259,292 27,219,086 28,061,977 15,659,14012,918,634 12,676,993 17,732,213 23,413,415 19,176,961 $ 121,505,655117,794,399$ 128,336,670$ 129,659,344$ 135,380,192$ 138,723,647$ CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN NET POSITION - CONTINUED ON THE FOLLOWING PAGES Last ten fiscal years (accrual basis of accounting) 2005200620072008 GOVERNMENTAL ACTIVITIES Expenses General government2,970,364$ 2,936,638$ 2,953,328$ 3,498,767$ Public safety7,848,160 8,039,356 8,051,836 8,760,880 Public works3,856,992 2,087,259 2,704,435 2,596,754 Community services86,043 123,172 74,389 72,893 Parks and recreation2,305,047 2,565,364 2,624,897 2,910,825 Economic development1,217,294 2,567,377 3,966,908 3,713,340 Interest on long-term debt1,349,852 1,184,017 1,127,276 1,125,712 Total expenses 19,633,75219,503,183 21,503,06922,679,171 Program Revenues Charges for services: General government297,511 289,203 902,734 1,115,038 Public safety1,026,736 800,408 847,307 780,080 Public works9,661 259,273 241,035 127,489 Parks and recreation681,851 665,332 692,781 754,079 Economic development35,933 164,531 49,498 24,435 Operating grants and contributions795,633 748,888 818,989 1,003,884 Capital grants and contributions2,398,345 2,208,751 2,646,320 2,706,056 Total program revenues 5,136,3865,245,670 6,198,664 6,511,061 Net (expense) / revenue (14,366,797)(14,388,082) (15,304,405) (16,168,110) General Revenues and Transfers Taxes: Property11,951,497 12,276,896 12,200,575 12,458,724 Tax increments4,216,2462,682,874 2,677,630 2,912,773 Lodging taxes 710,619 738,776 706,930 619,962 Unrestricted grants and contributions 577,548 702,030 1,263,753 607,073 Investment earnings (net) 1,272,409 1,928,462 1,852,117 903,939 Gain on disposal of capital asset 31,880 23,963 88,508 73,036 Transfers (1,545,893) 303,286 (273,070) (1,693,225) Transfers - capital assets - - - - Total general revenues and transfers 17,214,30618,656,287 18,516,44315,882,282 Restatements for: prior period adjustments or change in accounting principle (2,518,476)- (2,515,759)3,670,679 Change in Net Position $2,826,224$1,771,014$ 696,279$3,384,851 Table 2 Page 1 of 3 200920102011201220132014 $ 3,553,7373,653,956$ 3,216,321$ 3,246,015$ 3,165,400$ 3,736,487$ 9,125,5479,036,176 9,268,897 9,604,521 9,618,906 10,186,645 2,747,6412,687,980 2,771,602 3,561,914 4,215,855 3,688,238 82,64571,519 100,849 141,505 149,203 145,503 2,732,4012,773,528 2,895,769 2,796,561 2,752,539 2,977,707 6,504,0342,151,916 2,542,520 5,438,372 3,833,915 3,234,623 974,9501,143,546 865,799 768,241 490,162 887,190 21,518,621 25,720,955 21,661,75725,557,12924,225,98024,856,393 1,102,360 1,081,998 1,078,109 1,082,741 798,088 651,188 1,234,678 1,501,513 1,547,446 1,402,204 786,828 722,697 26,027 43,194 16,191 270,680 5,879 157,889 740,782 725,891 721,663 897,592 650,522 598,173 445 5,525 88,737 19,734 90,656 477,088 2,013,0991,034,905 1,637,743 3,165,588 3,089,220 1,746,637 1,566,2246,627,7775,299,705 491,404 4,427,586 1,671,830 5,705,421 11,998,997 10,389,5947,329,9439,848,7796,025,502 (15,813,200) (13,721,958) (11,272,163)(18,227,186)(14,377,201)(18,830,891) 12,899,250 12,949,069 13,336,056 14,307,993 14,943,008 14,988,007 3,616,157 3,127,373 2,525,057 2,751,249 3,098,620 3,790,363 591,291 696,746 852,302 882,620 881,252 914,651 1,019,990 411,378 549,649 496,679 590,916 1,499,015 309,715 33,885 191,510 85,560 (81,438) 236,936 40,632 - 111,530 113,976 54,211 27,100 32,697 (126,275) (749,308) 436 200,000 675,257 - - - - - (639,266) 18,509,732 17,092,176 16,816,79618,638,51319,686,56921,492,063 - --- -- $ 2,696,532$ 3,370,218$5,544,633$411,327$5,309,368$2,661,172 CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN NET POSITION - CONTINUED Last ten fiscal years (accrual basis of accounting) 2005200620072008 BUSINESS-TYPE ACTIVITIES Expenses Municipal liquor978,743$ 970,260$ 1,037,427$ 1,125,517$ Golf course273,024 282,418 313,794 304,832 Earle Brown Heritage Center2,262,359 2,439,709 2,431,719 2,403,676 Water utility1,795,759 1,635,847 1,716,497 1,783,275 Sanitary sewer utility2,808,644 3,176,426 2,930,016 3,018,418 Storm drainage utility1,102,672 950,425 1,123,636 1,162,957 Recycling utility254,661 245,853 257,300 265,983 Street light utility213,094 161,219 191,659 182,402 Total expenses 9,688,9569,862,157 10,002,04810,247,060 Program Revenues Charges for services: Municipal liquor1,099,172 1,244,738 1,362,093 1,492,644 Earle Brown Heritage Center1,857,461 2,168,861 2,168,033 1,959,628 Water utility1,825,521 1,906,375 2,063,930 2,003,633 Sanitary sewer utility2,966,222 3,186,569 3,274,678 3,264,649 Storm drainage utility1,298,690 1,323,607 1,412,548 1,553,236 Other activities706,105 714,373 732,224 763,858 Operating grants and contributions- - - - Capital grants and contributions- - - - Total program revenues 10,544,5239,753,171 11,013,506 11,037,648 Net (expense) / revenue 64,215682,3661,011,458790,588 General Revenues and Transfers Investment earnings (net) 199,876 337,231 406,654 243,322 Transfers 1,545,893 (303,286) 273,070 1,693,225 Transfers - capital assets - - - - Total general revenues and transfers 1,745,76933,945 679,7241,936,547 Restatements for: prior period adjustments or change in accounting principle -429,206 2,399,148- Change in Net Position $1,809,984$1,145,517$ 4,090,330$2,727,135 Table 2 Page 2 of 3 200920102011201220132014 $ 1,262,0761,249,946$ 1,218,399$ 1,274,375$ 5,674,937$ 5,690,792$ 317,539323,340 284,673 273,023 263,425 271,698 2,345,9202,363,085 2,602,074 2,768,719 4,835,131 5,137,712 1,792,6283,448,819 1,825,558 1,855,345 2,025,496 1,900,518 3,282,4723,736,989 3,277,874 3,317,427 3,382,810 3,514,687 1,348,9741,282,505 1,407,712 1,501,652 1,552,327 1,784,907 278,381276,058 284,440 285,853 257,079 245,426 213,752220,020 232,716 222,835 289,043 291,239 12,900,762 10,841,742 11,133,44611,499,22918,280,24818,836,979 1,530,175 1,538,403 1,620,315 1,656,125 6,072,334 5,861,066 1,725,858 1,879,902 2,026,063 2,293,386 4,294,723 4,578,433 2,019,325 1,959,684 1,990,664 2,321,539 2,318,176 2,235,332 3,315,726 3,321,373 3,474,588 3,592,530 3,675,936 3,942,534 1,575,6791,577,879 1,621,104 1,660,849 1,622,012 1,638,575 770,472760,757778,584 853,585 882,995 1,127,116 - - - - 52,775 63,547 - - 80,186 - - - 10,939,435 11,035,798 11,591,50412,378,01418,918,95119,446,603 (1,961,327) 194,056 458,058 878,785 638,703 609,624 87,499 20,707 79,016 32,998 (27,223) 108,650 (32,697) 126,275 749,308 (436) (200,000) (675,257) - - - - - 639,266 54,802 146,982828,32432,562(227,223)72,659 - --- -- $ (1,906,525)$ 341,038$1,286,382$911,347$411,480$682,283 CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN NET POSITION - CONTINUED Last ten fiscal years (accrual basis of accounting) 2005200620072008 TOTAL PRIMARY GOVERNMENT Expenses Governmental activities19,633,752$ 19,503,183$ 21,503,069$ 22,679,171$ Business-type activities9,688,956 9,862,157 10,002,048 10,247,060 Total expenses 29,322,70829,365,340 31,505,11732,926,231 Program Revenues Governmental activities5,245,670 5,136,386 6,198,664 6,511,061 Business-type activities9,753,171 10,544,523 11,013,506 11,037,648 Total program revenues 15,680,90914,998,841 17,212,170 17,548,709 Net (expense) / revenue (13,684,431)(14,323,867) (14,292,947) (15,377,522) General Revenues and Transfers Governmental activities17,214,306 18,656,287 18,516,443 15,882,282 Business-type activities1,745,769 33,945 679,724 1,936,547 Total general revenues and transfers 18,690,23218,960,075 19,196,167 17,818,829 Restatements for: prior period adjustments or change in accounting principle Governmental activities- (2,518,476) (2,515,759) 3,670,679 Business-type activities- 429,206 2,399,148 - Total restatements (2,089,270)- (116,611) 3,670,679 Change in Net Position $ 2,916,5314,636,208$ 4,786,609$ 6,111,986$ Sources: The data for this table has been extracted from the respective years CAFR document. Fund Balance and Governmental Fund Type Note: During 2011, the City implemented GASB Statement No. 54, Definitions. As part of this implementation, certain reclassifications occurred for funds that were reported as Governmental activities prior to 2011, that are now reported as business-type activities. Those balances prior to 2011 have not been restated in this statistical schedule. Table 2 Page 3 of 3 200920102011201220132014 $ 25,720,95521,518,621$ 21,661,757$ 25,557,129$ 24,225,980$ 24,856,393$ 10,841,74212,900,762 11,133,446 11,499,229 18,280,248 18,836,979 36,562,69734,419,383 32,795,203 37,056,358 42,506,228 43,693,372 11,998,9975,705,421 10,389,594 7,329,943 9,848,779 6,025,502 11,035,79810,939,435 11,591,504 12,378,014 18,918,951 19,446,603 23,034,79516,644,856 21,981,098 19,707,957 28,767,730 25,472,105 (13,527,902)(17,774,527) (10,814,105) (17,348,401) (13,738,498) (18,221,267) 18,509,732 17,092,176 16,816,796 18,638,513 19,686,569 21,492,063 54,802 146,982 828,324 32,562 (227,223) 72,659 18,564,534 17,239,158 17,645,12018,671,07519,459,34621,564,722 - - - - - - - - - - - - - --- -- $ 790,007$ 3,711,256$6,831,015$1,322,674$5,720,848$3,343,455 CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) Table 3 GOVERNMENTAL ACTIVITIES TAX REVENUE BY SOURCE Last ten fiscal years (accrual basis of accounting) PropertyTaxLodging TaxesIncrementsTaxesTotal 200511,951,497$ 4,216,246$ 710,619$ 16,878,362$ 200612,276,896 2,682,874 738,776 15,698,546 200712,200,575 2,677,630 706,930 15,585,135 200812,458,724 2,912,773 619,962 15,991,459 200912,899,250 3,616,157 591,291 17,106,698 201012,949,069 3,127,373 696,746 16,773,188 201113,336,056 2,525,057 852,302 16,713,415 201214,307,993 2,751,249 882,620 17,941,862 201314,943,008 3,098,620 881,252 18,922,880 201414,988,007 3,790,363 914,651 19,693,021 Sources: The data for this table has been extracted from the respective years CAFR document. CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) FUND BALANCES - GOVERNMENTAL FUNDS Last ten fiscal years (modified accrual basis of accounting) 2005200620072008 General Fund Reserved11,080$ 500$ 700$ 21,995$ Unreserved7,283,871 7,508,690 7,941,714 7,721,443 Nonspendable- - - - Assigned- - - - Unassigned- - - - Total general fund7,294,951$ 7,509,190$ 7,942,414$ 7,743,438$ All other governmental funds Reserved5,150,818$ 5,176,808$ 11,288,685$ 9,997,668$ Unreserved, reported in: Special revenue funds24,853,267 22,862,211 11,738,460 10,523,743 Capital project funds3,232,820 4,164,400 3,466,029 4,282,881 Restricted- - - - Committed- - - - Unassigned- - - - Total all other governmental funds33,236,905$ 32,203,419$ 26,493,174$ 24,804,292$ Sources: The data for this table has been extracted from the respective years CAFR document. Fund Balance and Governmental Fund Type Note: During 2011, the City implemented GASB Statement No. 54, Definitions. As part of this implementation, certain reclassifications occurred for funds that were reported as Governmental activities prior to 2011, that are now reported as business-type activities. Those balances prior to 2011 have not been restated in this statistical schedule. Note: The 2013 fund balances have been restated to align the City's reporting with GASB No. 65. See note 1Q for more information on this restatement. Table 4 200920102011201220132014 $ 26,40527,993$ -$ -$ -$ -$ 8,803,9428,502,012 - - - - -- 32,308 88,952 26,139 21,967 -- 2,614 - 2,754,124 908,761 -- 9,695,913 10,597,944 9,602,450 10,089,353 $ 8,830,3478,530,005$ 9,730,835$ 10,686,896$ 12,382,713$ 11,020,081$ $ 7,388,4888,696,324$ -$ -$ -$ -$ 7,095,6459,399,556 - - - - 2,203,8233,609,961 - - - - -- 13,331,705 12,912,357 26,350,322 26,434,113 -- 3,021,318 3,651,995 7,579,688 10,514,871 -- (2,515,053) (3,425,001) (1,432,495) (1,763,877) $ 16,687,95621,705,841$ 13,837,970$ 13,139,351$ 32,497,515$ 35,185,107$ CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS Last ten fiscal years (modified accrual basis of accounting) 20052006200720082009 Revenues Property taxes11,641,177$ 11,525,040$ 12,094,359$ 12,403,914$ 12,897,002$ Tax increments4,680,688 2,664,144 2,727,637 2,894,595 3,601,747 Franchise fees662,614 658,410 658,620 643,934 656,772 Lodging taxes710,619 738,776 706,930 619,962 591,291 Special assessments1,226,655 1,214,571 1,364,413 1,289,148 1,352,908 Licenses and permits675,530 722,633 673,156 643,736 616,135 Intergovernmental2,578,031 2,375,697 3,171,745 2,211,560 2,789,007 Charges for services754,575 722,218 705,736 761,404 1,120,341 Fines and forfeits253,748 256,600 291,423 302,986 340,536 Investment earnings (net)1,078,434 1,601,731 1,519,503 733,877 247,260 Miscellaneous427,839 477,296 404,420 449,061 370,508 22,957,11624,689,910 24,317,942 22,954,177 24,583,507 Total revenue s Expenditures General government2,232,908 2,409,788 2,508,945 3,127,917 3,427,024 Public safety7,014,528 7,299,842 7,550,434 8,048,529 8,452,348 Public works1,797,127 1,717,120 2,008,499 1,784,319 1,722,680 Community services86,043 123,172 74,389 72,893 71,519 Parks and recreation2,121,130 2,212,142 2,314,099 2,409,291 2,462,275 Economic development2,076,023 1,386,558 5,659,331 7,666,319 2,531,062 Nondepartmental315,355 363,967 354,848 301,396 313,723 Capital outlay8,335,916 5,918,472 4,524,524 4,531,003 2,820,761 Debt service Principal2,772,189 3,127,146 2,786,076 2,884,953 4,445,471 Interest1,214,751 1,197,392 1,134,412 1,060,165 1,183,560 Other charges23,758 53,671 12,896 101,809 15,170 25,809,27027,989,728 28,928,453 31,988,594 27,445,593 Total expenditure s Excess (deficiency) of revenue s over (under) expenditure (3,299,818)(2,852,154)(4,610,511) (2,862,086)(9,034,417) s Other financing sources (uses) Transfers in2,811,793 2,784,116 5,881,257 1,969,533 3,632,013 Issuance of debt- 1,460,000 - 6,725,000 - Premium on issuance of debt- - - 1,384 - Sale of capital assets- - - - - Refunded bonds redeemed(7,280,000) - (529,138) - - Transfers out(2,619,793) (2,211,209) (6,018,629) (1,549,358) (3,081,811) Total other financing sources (uses (7,088,000) (666,510)2,032,907 7,146,559 550,202 ) Restatements for: prior period adjustments or change in accounting principle- - - - - $ (819,247)(10,387,818)$ (5,277,021)$ (1,887,858)$ (2,311,884)$ Net change in fund balance s Debt service as a percentage of noncapital expenditure18.26%18.90%15.85%14.38%22.86% s Sources: The data for this table has been extracted from the respective years CAFR document. und Balance and Governmental Fund Type Note: During 2011, the City implemented GASB Statement No. 54,F efinitions. D As part of this implementation, certain reclassifications occurred for funds that were reported as Governmenta activities prior to 2011, that are now reported as business-type activities. Those balances prior to 2011 have not been restated in this statistical schedule. Note: The 2013 fund balances have been restated to align the City's reporting with GASB No. 65. See note 1Q for more information on this restatement. Table 5 20102011201220132014 $ 13,396,61113,012,317$ 14,389,842$ 15,094,464$ 15,036,602$ 2,527,3163,111,882 2,685,822 3,149,533 3,795,708 659,066647,796 647,346 651,832 647,071 852,302696,746 882,620 881,252 914,651 1,975,4701,491,194 1,294,521 1,877,116 1,794,126 961,9471,063,945 858,593 1,084,003 1,021,410 4,929,9026,859,817 3,607,218 3,159,571 2,706,299 1,122,3501,001,019 1,056,241 1,073,917 1,229,513 340,356359,937 336,740 315,982 364,927 143,66124,212 48,322 (71,059) 188,913 296,427285,425 742,269 423,822 344,690 27,205,40828,554,290 26,549,534 27,640,433 28,043,910 2,930,5163,280,340 2,978,738 3,045,365 3,173,282 8,674,1958,524,140 9,090,324 9,117,541 9,622,239 2,030,9301,662,343 1,982,540 1,982,311 2,107,959 100,84982,645 141,505 149,203 145,503 2,412,9522,442,938 2,532,827 2,481,7632,457,622 3,105,007 2,337,253 5,215,619 3,076,454 2,855,983 300,549 316,376 287,692 400,835 364,501 8,549,489 5,558,718 699,563 4,319,756 3,950,187 4,676,066 2,965,613 2,666,790 2,655,000 1,905,000 1,026,800 895,053 797,785 698,702 802,892 14,104 14,581 7,677 179,044 9,039 33,664,421 28,237,036 26,401,06028,105,97427,394,207 (5,110,131) (1,031,628) 148,474(465,541)649,703 4,888,536 3,083,093 2,320,883 4,860,459 10,463,495 - - 10,960,000- - - - - 367,405 - - - 108,532 - - - - - - - (4,495,948) (3,409,350) (2,320,447) (4,660,459) (9,788,238) 392,588 (326,257) 108,96811,527,405675,257 - - - 9,992,117 - $ (4,717,543)$ (1,357,885)$257,442$21,053,981$1,324,960 22.71%17.02%13.48%11.52%11.26% CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) ASSESSED TAX CAPACITY AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Last ten fiscal years 2005200620072008 Estimated actual value: Real estate$ 2,182,205,700 Personal property 14,862,000 Total estimated actual value1,959,999,100$ 2,035,666,100$ 2,140,133,600$ 2,197,067,700$ Tax Capacity Real estate22,080,464$ 23,418,557$ 25,009,973$ 25,898,336$ Personal property294,377 298,953 283,198 291,815 Contribution to fiscal disparities(2,208,046) (2,341,856) (2,500,997) (2,470,328) Receipt from fiscal disparities3,231,664 3,503,030 4,125,105 4,625,964 Tax increments(3,122,665) (2,559,620) (2,463,631) (2,405,929) et tax capacity for direct rate$20,275,794$22,319,064$ 24,453,648$25,939,858 N Net Tax Capacity as a Percentage of Estimated Actual Market Value1.03%1.10%1.14%1.18% Property Tax Levies General revenues$ 10,308,649$ 10,612,956$ 10,939,788$ 11,404,750 Debt service 759,074 757,394 753,955 730,152 Housing and Redevelopment Authority 251,295 257,065 265,000 302,191 Total property taxes levie$11,319,018$ 11,958,74311,627,415$ 12,437,093$ d Tax Rates General revenues46.740 43.524 41.199 41.081 Debt service3.744 3.393 3.083 2.815 Housing and Redevelopment Authority1.239 1.152 1.084 1.185 Total Direct Tax Rate51.723 48.069 45.366 45.081 Sources: The data for this table has been provided by Hennepin County. Note: The breakdown of real estate vs. personal property for estimated actual value, was not available prior to 2008. This information will be updated on a go-forward basis. Table 6 200920102011201220132014 $ 1,882,823,9002,079,719,700$ 1,682,317,900$ 1,633,327,900$ 1,506,661,400$ 1,497,679,200$ 14,219,70014,386,500 15,487,000 16,139,200 18,257,700 18,319,800 $ 1,897,043,6002,094,106,200$ 1,697,804,900$ 1,649,467,100$ 1,524,919,100$ 1,515,999,000$ $ 23,099,33325,158,441$ 20,759,133$ 18,351,627$ 17,129,016$ 17,358,722$ 278,984283,070 304,150 316,491 358,867 360,506 (2,998,145)(2,719,868) (2,774,593) (2,619,012) (2,335,813) (2,495,133) 7,002,2135,259,685 7,123,008 7,194,133 6,844,540 7,117,154 (2,420,044)(2,739,457) (2,093,764) (1,922,253) (2,169,035) (2,675,416) $ 24,962,34125,241,871$ 23,317,934$ 21,320,986$ 19,827,575$ 19,665,833$ 1.21%1.32%1.37%1.29%1.30%1.30% $ 12,504,04411,804,016$ 12,905,340$ 13,207,954$ 13,632,326$ 13,673,970$ 715,183703,903 695,632 708,581 711,725 687,000 349,745385,289 310,831 302,288 246,160 282,110 $ 13,568,97212,893,208$ 13,911,803$ 14,218,823$ 14,590,211$ 14,643,080$ 48.23044.732 54.234 61.036 67.485 70.587 2.8652.983 3.323 3.590 3.547 2.789 1.617 1.317 1.341 1.457 1.128 1.609 49.138 52.41258.55865.816 72.20275.742 CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS Last ten fiscal years Overlapping Rates SchoolSchoolSchoolSchoolMetro CityCountyDistrict 11District 279District 281District 286Districts (1) 200551.723 44.172 21.492 24.336 29.989 36.159 3.304 200648.069 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 2010 52.412 42.640 19.939 22.381 28.621 51.173 2.620 2011 58.558 45.840 23.999 24.217 34.387 47.697 2.949 2012 65.816 48.231 23.325 24.930 32.810 48.020 3.084 2013 72.202 49.461 26.801 27.973 32.347 56.031 3.242 2014 75.742 49.959 28.265 29.819 34.777 54.422 3.335 Sources: The data for this table has been provided by Hennepin County. Note (1) - Metro Districts include: Mosquito Control, Metropolitan Council, and Metro Transit Note (2) - Other Districts include: Hennepin Parks, Park Museum, Regional Railroad Authority, and Hennepin HRA. Note (3) - The Watershed levy is applicable to all of School Districts 279 & 281, and portions of School Districts 11 & 286. Table 7 Total Direct and Overlapping Rates OtherWatershedISD 11 &ISD 286 & Districts (2)Districts (3)ISD 11WatershedISD 279ISD 281ISD 286Watershed 4.078 - 1 24.769 1 24.769 1 27.613 1 33.266 1 39.436 1 39.436 4.074 0 .073 1 16.129 1 16.202 1 17.971 1 24.645 1 35.864 1 35.937 4.639 - 1 11.139 1 11.139 1 15.544 1 20.536 1 27.940 1 27.940 4.835 0 .265 1 08.032 1 08.297 1 11.024 1 18.557 1 28.568 1 28.833 4.575 0 .047 1 14.968 1 15.015 1 17.785 1 23.966 1 39.868 1 39.915 5.518 0 .081 1 23.129 1 23.210 1 25.652 1 31.892 1 54.363 1 54.444 6.223 0 .568 1 37.569 1 38.137 1 38.355 1 48.525 1 61.267 1 61.835 6.439 0 .001 1 46.895 1 46.896 1 48.501 1 56.381 1 71.590 1 71.591 6.847 0 .101 1 58.553 1 58.654 1 59.826 1 64.200 1 87.783 1 87.884 7.226 - 1 64.527 1 64.527 1 66.081 1 71.039 1 90.684 1 90.684 CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) Table 8 PRINCIPAL PROPERTY TAXPAYERS Current Year and Nine Years Ago 20142005 Percentage ofPercentage of Net TaxTotal TaxNet TaxTotal Tax TaxpayerClassificationCapacityRankCapacity ValueCapacityRankCapacity Value The Luther Company, LLPCommercial604,350$ 13.07% The Molasky GroupCommercial461,250 22.35% Wal-Mart Stores Inc.Commercial333,600 31.70% Ax Rer, LPIndustrial192,850 40.98% Medtronic, Inc.Industrial192,250 50.98%173,238$ 80.85% Brookdale Corner, LLCCommercial188,250 60.96%195,250 40.96% TLN Lanel, LTDApartment187,638 70.95% Lake Point, LLCApartment177,500 80.90% GB Homes, LLCApartment159,313 90.81% Brooklyn Hotel Partners, LLCCommercial150,190 100.76% Talisman Brookdale, LLCCommercial952,960 14.70% Target StoresCommercial412,350 22.03% Regal Cinemas, Inc.Commercial229,250 31.13% BCC Associates LLCCommercial191,250 50.94% Hennepin County Hotel Assoc.Commercial183,250 60.90% Twin Lakes NorthApartment182,900 70.90% B.C. Leased HousingApartment150,738 90.74% Sears Roebuck and Co.Commercial150,220 100.74% Totals2,647,191$ 13.46%2,821,406$ 13.89% Sources: The data for this table has been provided by Hennepin County. CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) PROPERTY TAX LEVIES AND COLLECTIONSTable 9 Last ten fiscal years Collected within the CertifiedFiscal Year of the LevyCollections inTotal Collections to Date PropertyPercentageSubsequentPercentage Tax LevyAmountof LevyYearsAmountto Date 200511,319,018$ 10,403,359$ 91.9%915,659$ 11,319,018$ 100.0% 200611,627,415 10,697,638 92.0%929,777 11,627,415 100.0% 200711,958,743 11,070,387 92.6%888,356 11,958,743 100.0% 200812,437,093 11,577,739 93.1%859,354 12,437,093 100.0% 200912,893,208 11,983,738 92.9%909,470 12,893,208 100.0% 201013,568,972 12,633,425 93.1%935,547 13,568,972 100.0% 201113,911,803 12,947,358 93.1%964,445 13,911,803 100.0% 201214,218,823 13,942,766 98.1%241,625 14,184,391 99.8% 201314,590,211 14,472,075 99.2%90,131 14,562,206 99.8% 201414,643,080 14,470,227 98.8%- 14,470,227 98.8% Sources: The data for this table has been provided by Hennepin County and from City financial maintenance documents. Note: The components of the Certified Property Tax Levy can be viewed in table 6 of the statistical section. CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) RATIOS OF OUTSTANDING DEBT BY TYPETable 10 Last ten fiscal years Business-Type Governmental ActivitiesActivities GeneralTaxG.O.UtilityPercentage ObligationIncrementImprovementRevenueTotalof PersonalPer BondsBondsBondsBonds (BAB)DebtIncomeCapita 20055,340,000$ $ 19,305,000$ 4,720,000$ 29,365,000-$ 2.08%$ 1,044 20064,465,000 18,305,000 5,180,000 27,950,000- 1.88% 1,002 20073,875,000 17,255,000 4,280,000 25,410,000- 1.63% 911 20083,275,000 20,560,000 5,690,000 29,525,000- 1.71% 973 20092,665,000 17,795,000 4,925,000 25,385,000- 1.61% 852 20102,025,000 15,010,000 4,005,000 2,350,000 23,390,0001.42% 777 20111,385,000 13,720,000 3,260,000 2,210,000 20,575,0001.19% 681 2012700,000 12,795,000 2,590,000 2,075,000 18,160,0001.01% 594 2013 17,470,000- 6,920,000 1,940,000 26,330,0001.43% 865 2014 16,040,000- 6,445,0001,800,00024,285,0001.32%798 Sources: The data for this table has been provided from City financial maintenance documents. Note: More detailed information for Population and Personal Income can be viewed in table 15 of the statistical section. CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) Table 11 RATIOS OF GENERAL BONDED DEBT OUTSTANDING Last ten fiscal years Percentage of GeneralLess: AmountsNet GeneralEstimated ObligationRestricted toObligationMarket ValuePer BondsDebt ServiceDebtof PropertyCapita 20055,340,000$ 1,012,791$ 4,327,209$ 0.22%154$ 20064,465,000 1,083,063 3,381,937 0.17%121 20073,875,000 1,159,331 2,715,669 0.13%97 20083,275,000 1,202,802 2,072,198 0.09%68 20092,665,000 1,211,620 1,453,380 0.07%49 20102,025,000 1,201,263 823,737 0.04%27 20111,385,000 1,203,611 181,389 0.01%6 2012700,000 1,186,758 - 0.00%- 2013- - - 0.00%- 2014- - - 0.00%- Sources: The data for this table has been provided from City financial maintenance documents. Note: More detailed information for Population can be viewed in table 15 of the statistical section. Note: More detailed information for Estimated Property Values can be viewed in table 6 of the statistical section. CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) Table 12 COMPUTATION OF DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT December 31, 2014 EstimatedEstimated Share DebtPercentageof Overlapping 1 Debt Governmental UnitOutstandingApplicable Overlapping debt: School Districts: No. 11 Anoka71,216,896$ 1.33%947,185$ No. 279 Osseo76,943,127 3.21%2,469,874 No. 281 Robbinsdale167,683,181 4.21%7,059,462 No. 286 Brooklyn Center27,803,566 100.00%27,803,566 Metropolitan Council93,953,739 0.53%497,955 Hennepin County753,266,880 1.02%7,683,322 Hennepin Regional RR Authority35,200,157 1.40%492,802 Hennepin County Park Reserve District52,209,049 1.40%730,927 Total overlapping debt1,278,276,595$ 47,685,093 City of Brooklyn Center direct debt 22,485,000 Total direct and overlapping debt$70,170,093 Sources: The majority of the data for this table has been provided by Hennepin County. Sources: The remaining data for this table was provided by Anoka County and School District No. 11. Note: More detailed information for the City's outstanding debt can be viewed in table 10 of the statistical section. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. The schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. Note: The percentage of overlapping debt applicable is estimated using tax capacity values. Applicable percentages were estimated by determining the the portion of each entity's tax capacity that is within the City's boundaries, and dividing it by the entity's total tax capacity. CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) LEGAL DEBT MARGIN INFORMATION Last ten fiscal years 2005200620072008 Taxable Market Value1,800,176,800$ 1,960,952,700$ 2,112,997,900$ 2,189,212,600$ Debt Limit Percentage2.00%2.00%2.00%3.00% Debt Limit36,003,536 39,219,054 42,259,958 65,676,378 Total net debt applicable to limit4,327,209 3,381,937 2,715,669 2,072,198 Legal debt margi$ 35,837,11731,676,327$ 39,544,289$ 63,604,180$ n Total net debt applicable to the limit as a percentage of debt limit12.02%8.62%6.43%3.16% Sources: The data for this table has been provided by Hennepin County and from City financial maintenance documents. Table 13 200920102011201220132014 $ 1,891,591,4002,087,517,800$ 1,692,594,600$ 1,468,159,885$ 1,338,405,415$ 1,329,268,428$ 3.00%3.00%3.00%3.00%3.00%3.00% 56,747,74262,625,534 50,777,838 44,044,797 40,152,162 39,878,053 823,7371,453,380 181,389 - - - $ 55,924,00561,172,154$ 50,596,449$ 44,044,797$ 40,152,162$ 39,878,053$ 2.32%1.45%0.36%0.00%0.00%0.00% CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) Table 14 PLEDGED-REVENUE COVERAGE Last ten fiscal years Special Assessment Bonds Special AssessmentDebt Service CollectionsPrincipalInterestCoverage 2005$ 1,058,557$ 990,000$ 197,76089.12% 2006 1,035,961 1,000,000 167,28488.75% 2007 884,261 900,000 162,48683.23% 2008 816,798 980,000 145,12172.60% 2009 1,173,435 765,000 166,946125.91% 2010 750,168 920,000 167,68668.97% 2011 747,145 745,000 136,89084.72% 2012 561,618 670,000 111,46071.87% 2013 485,034 590,000 88,87071.45% 2014 674,253 475,000 160,447106.11% Tax Increment Bonds Tax IncrementDebt Service CollectionsPrincipalInterestCoverage 2005$ 3,576,209$ 770,000$ 729,740238.46% 2006 1,609,994 1,000,000 887,08085.32% 2007 1,707,470 1,050,000 847,23690.00% 2008 1,906,053 1,030,000 804,491103.90% 2009 2,356,641 2,765,000 922,71163.91% 2010 1,794,442 2,785,000 783,96150.28% 2011 1,321,205 1,290,000 702,53066.31% 2012 2,388,702 925,000 651,744151.50% 2013 2,766,160 1,365,000 598,107140.91% 2014 3,038,983 1,430,000 642,445146.64% Storm Sewer Revenue Bonds Storm DrainageLess:Net UtilityOperatingAvailableDebt Service ChargesExpensesRevenuePrincipalInterestCoverage 2005$ 1,293,841$ 1,086,600$ 207,241$ 230,000$ 6,21087.74% Utility Revenue Bonds (BAB) Water and Sanitary SewerLess:Net UtilityOperatingAvailableDebt Service ChargesExpensesRevenuePrincipalInterestCoverage 2010$5,249,263$ 4,934,032$ 315,231$ -$ 68,081463.02% 2011 5,421,679 5,011,775 409,904 140,000 83,438183.45% 2012 5,889,769 5,084,012 805,757 135,000 81,562372.07% 2013 5,951,703 5,335,477 616,226 135,000 80,188286.37% 2014 6,151,426 5,334,905 816,521 140,000 76,902376.45% Sources: The data for this table has been provided from City financial maintenance documents. Note: The Storm Sewer Revenue bonds were retired in 2005. Determined it was not necessary to show data beyond that year. Note: The Utility Revenue bonds were issued in 2010. Determined it was not necessary to show data prior to that year. CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) Table 15 DEMOGRAPHIC AND ECONOMIC STATISTICS Last ten fiscal years School Enrollments Per CapitaNo. 286 No. ofPersonalPersonalUnemploymentMedianNo. 11No. 279No. 281Brooklyn PopulationHouseholdsIncomeIncomeRateAgeAnokaOsseoRobbinsdaleCenter 11,186$1,408,819,5904.6% 2005 28,137$ 50,070 41,596 21,792 13,368 1,679 11,1421,484,751,7154.9% 2006 27,901 53,215 41,310 22,071 13,194 1,705 11,2071,554,866,4125.6% 2007 27,907 55,716 34.3 40,656 21,859 12,891 1,763 11,2501,723,775,2207.0% 2008 30,330 56,834 34.4 40,152 21,001 12,526 2,012 11,1751,572,835,2208.9% 2009 29,810 52,762 33.6 39,822 20,903 11,947 2,250 10,7561,649,036,9128.0% 2010 30,104 54,778 31.3 39,106 20,835 12,036 2,311 10,7911,734,223,0687.2% 2011 30,204 57,417 32.8 38,686 20,686 12,062 2,109 10,8121,800,452,9626.4% 2012 30,569 58,898 33.1 38,403 20,623 12,181 2,177 10,8621,843,846,0265.1% 2013 30,426 60,601 33.3 38,183 20,689 12,266 2,182 10,8621,843,846,0263.6%20,398 2014 30,426 60,601 33.3 37,853 12,385 2,399 Sources: Population & Households - Metropolitan Council Personal Income - Calculated by the City Per Capita Personal Income - US Department of Commerce; Bureau of Economic Analysis Unemployment Rate - Minnesota Department of Employment and Economic Development Median Age - US Department of Commerce, Bureau of the Census School Enrollment - Minnesota Department of Education Note: Median age was added in 2013. Information prior to 2007 was not available. This will be updated on a go-forward basis. Note: Some data was not yet available for 2014. In those instances, 2013 data was shown for the current year. CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) Table 16 PRINCIPAL EMPLOYERS Current Year and Nine Years Ago 20132004 Percentage ofPercentage of Total CityTotal City EmployerEmployeesRankEmploymentEmployeesRankEmployment Promeon Inc., A Division of Medtronic1,100 17.06%300 32.09% Independent School District #286380 22.44% Luther Auto Group303 31.95% Wal-Mart300 41.93% Presbyterian Homes, Marantha Care Center205 51.32% Caribou Coffee Headquarters200 61.28% University of Minnesota Physicians200 71.28% City of Brooklyn Center151 80.97% TCR Corporation150 90.96%135 70.94% Target131 100.84%200 41.39% Brookdale Center 111.82%1,700 Graco, Inc. 25.79%832 Cub Foods 51.25%180 Ault, Inc. 61.04%150 Cass Screw Machine Products123 80.86% Best Buy 90.76%110 Kohl's 100.70%100 Totals3,120 20.04%3,830 26.63% Sources: The data for this table has been extracted from Official Statements for bonds issued in 2004 and 2013. Note: Due to data privacy within the State, this data is not available from the Department of Employment and Economic Development. As the City did not issue bonds in 2014 or 2005, we have determined it reasonable to use the data available from the years above, as they are the closest in time to those years where data is not available. CITY OF BROOKLYN CENTER, MINNESOTA STATISTICAL SECTION (UNAUDITED) Table 17 FULL TIME CITY GOVERNMENT POSITIONS BY FUNCTION Last ten fiscal years 2005200620072008200920102011201220132014 General government Administrative 3 .0 3 .0 3 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 Elections 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 City Clerk 1 .0 1 .0 1 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 Finance 6 .0 6 .0 6 .0 5 .0 5 .0 5 .0 5 .0 5 .0 5 .0 5 .0 Assessor 3 .0 3 .0 3 .0 3 .0 3 .0 3 .0 3 .0 3 .0 3 .5 3 .5 Human Resources 2 .0 2 .0 2 .0 2 .0 3 .0 3 .0 3 .0 3 .0 3 .0 3 .0 Information technology 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 Building Maintenance 4 .0 4 .0 4 .0 4 .0 4 .0 4 .0 4 .0 3 .0 3 .0 3 .0 Total general government 2 2.0 2 2.0 2 2.0 2 1.0 2 2.0 2 2.0 2 2.0 2 1.0 2 1.5 2 1.5 Public safety Police Administration 3 .0 3 .0 3 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 Investigation 8 .0 7 .0 8 .0 7 .0 7 .0 7 .0 7 .0 7 .0 7 .0 7 .0 Patrol 3 4.0 3 5.0 3 5.0 4 1.0 4 0.0 4 2.0 4 2.0 4 2.0 4 2.0 4 1.0 Support Services 1 2.0 1 2.0 9 .0 9 .0 9 .0 9 .0 9 .0 9 .0 9 .0 9 .0 Facility Maintenance 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 Fire 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 Emergency Preparedness - 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 Planning & Zoning 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 1 .5 1 .5 1 .5 1 .5 Inspections 4 .0 4 .0 4 .0 4 .0 4 .0 4 .0 4 .0 4 .0 4 .0 5 .0 Code Enforcement - - - 2 .0 5 .0 5 .0 5 .0 4 .0 5 .0 5 .0 Total public safety 6 5.0 6 6.0 6 4.0 7 0.0 7 2.0 7 4.0 7 3.5 7 2.5 7 3.5 7 3.5 Public works Engineering & Admin 6 .0 6 .0 6 .0 6 .0 6 .0 6 .0 6 .0 6 .0 7 .0 7 .0 Street Maintenance 7 .0 8 .0 8 .0 8 .0 8 .0 8 .0 8 .0 7 .0 7 .0 7 .0 Traffic Control 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 Total public works 1 5.0 1 6.0 1 6.0 1 6.0 1 6.0 1 6.0 1 6.0 1 5.0 1 6.0 1 6.0 Parks and recreation Administration 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 Recreation Programs 4 .0 4 .0 4 .0 4 .0 4 .0 4 .0 4 .0 4 .0 4 .0 4 .0 Community Center 3 .0 3 .0 3 .0 3 .0 3 .0 3 .0 3 .0 - - - Parks Maintenance 7 .0 6 .0 6 .0 6 .0 6 .0 6 .0 6 .0 6 .0 6 .0 6 .0 Forestry 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 Total park and recreation 1 7.0 1 6.0 1 6.0 1 6.0 1 6.0 1 6.0 1 6.0 1 3.0 1 3.0 1 3.0 Economic Development 2 .0 2 .0 2 .0 2 .0 2 .0 2 .0 2 .5 2 .5 2 .5 2 .5 Municipal Liquor 3 .0 3 .0 4 .0 4 .0 4 .0 5 .0 4 .0 4 .0 5 .0 5 .0 Golf Course 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 1 .0 Earle Brown Heritage Center 1 1.0 1 1.0 1 1.0 1 1.0 1 1.0 1 1.0 1 1.0 1 1.0 1 1.0 1 2.0 Water 5 .3 5 .3 5 .3 5 .3 5 .3 5 .3 5 .3 5 .3 5 .3 5 .3 Sanitary Sewer 2 .3 2 .3 2 .3 2 .3 2 .3 2 .3 2 .3 2 .3 2 .3 2 .3 Storm Drainage 1 .4 1 .4 1 .4 1 .4 1 .4 1 .4 1 .4 2 .4 2 .4 2 .4 Central Garage 5 .0 5 .0 5 .0 5 .0 5 .0 5 .0 5 .0 5 .0 5 .0 5 .0 Total 150.0151.0150.0155.0158.0161.0160.0155.0158.5159.5 Sources: The data for this table has been extracted from the respective years budget document. Table 18 Violent Crimes17419121019216613813511312997Property Crimes1,9512,0541,9922,0491,6961,3581,5291,5611,7121,195Total Calls for Service26,73828,64434,18536,92344,15243,06941,34739,73637,37035,914Fires/Al l other calls692697677684688772774781634844Medical calls2123263864195389801,1351,2091,2091,263Fire inspections performed4500106105245141295270197Total miles105.53105.78105.78105.78105.78105.73105.731 05.73105.73105.73Miles of streets reconstructed4.602.504.204.152.645.175.620.702.903.01Community Center Admissions59,28861,68061,02260,32361,27259,31057,87459,55062,43456,142Acres of park maintained5275275275275275275275275275272222222222Sales (in thousands)$4,610$5,159$5,475$5,485$5,610$5,543$5,789$5,964$6,063$5,852Rounds sold20,78021,10015,68015,80214,04013,52412,16912,87511,72 411,023Bookings579611570522421433548460397409Functions1,7251,8701,7201,4121,1781,1191,0551,0531,0821,014Connections8,9388,9048,9978,9868,9908,9608,8878,8948,8968,909Miles of water mains118.25120.5012 1.80121.80121.80121.80121.80121.80119.70119.87Average daily consumption3,697,7903,609,9033,621,1223,550,1263,733,6023,190,0002,939,0003,196,0723,000,3782,819,874Connections8,8048,8078,7938,8378,8378, 8298,8208,8138,7838,789Miles of sanitary sewer105.61105.61105.61105.61105.61105.61105.61105.61105.61105.61 Function2005200620072008200920102011201220132014 Sources: The data for this table has been provided by each respective City department. CITY OF BROOKLYN CENTER, MINNESOTA OPERATING INDICATORS BY FUNCTION STATISTICAL SECTION (UNAUDITED) Earle Brown Heritage Center Parks and recreation Last ten fiscal years Number of stores Municipal liquor Sanitary sewer Golf course Streets Water Police Fire Table 19 Streets (miles)105.53105.78105.78105.78105.78105.73105.73105.73105.73105.73 13131315151515151412 11111199991010Other vehicles16161614181818161818222222888888333333Mobile equipment13141414141414141314Heavy duty trucks1213131313131313121366667652752752752752752752752721.621.621.621.621.621.621.621 .621.614.21111118888889999991010101010101010101074.2074.2083.0184.55 118.25120.50121.80121.80121.80121.80121.80121.80119.70119.87 Function2005200620072008200920102011201220132014 1 6 . 5 0 1 1 6 . 5 0 1 1 6 . 5 0 1 1 6 . 5 0 1 0 1 62 .. 4 5 07 1 0 1 62 .. 4 5 07 1 Marked squads8889Other vehicles77661111 Stations1111Stations2222Fire trucks7788Other vehicles122288899999 10 62 .. 54 07 1 Sources: The data for this table has been provided by each respective City department. 10 62 .. 54 07 1 710 2 62 .. 5 54 07 1 70 1 262 .. 5 CITY OF BROOKLYN CENTER, MINNESOTA 4 5 07 CAPITAL ASSET STATISTICS BY FUNCTION 1 STATISTICAL SECTION (UNAUDITED) Ground maintenance equipment Sanitary sewers (miles) Storm sewers (miles) Water mains (miles) Community centers Parks and recreation Last ten fiscal years Other vehicles Trails (miles) Patrol units Lift Stations Public works Public safetye g a e r Police Wells c Sewer aWater Fire s k r a P