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HomeMy WebLinkAboutJuly 9, 2003 Audit Work SessionADMINISTRATION NOTICE OF CITY COUNCIL MEETING to be hem in the CITY OF COLUMBIA HEIGHTS as follows: Mayor Julienne Wyckoff Councilmembers Robert A. I/Filliams Bruce Nawrocki Tammera Ericson Bruce Kelzenberg City Manaqer Walt Fehst Meeting of: Date of Meeting: Time of Meeting: Location of Meeting: Purpose of Meeting: COLUMBIA HEIGHTS CITY COUNCIL WEDNESDAY, JULY 9, 2003 5:30 P.M. CONFERENCE ROOM 1 WORK SESSION AGENDA 1. Review of the Audit THIS WILL BE FOLLOWED BY A JOINT MEETING WITH THE SCHOOL DISTRICT 13 SCHOOL BOARD AT THE FAMILY CENTER IN FRIDLEY BEGINNING AT 7:00 P.M. The City of Columbia Heights does not discriminate on the basis of disability in the admission or access to, or treatment or employment in, its services, programs, or activities. Upon request, accommodation will be provided to allow individuals with disabilities to participate in all City of Columbia Heights' services, programs, and activities. Auxiliary aids for handicapped persons are available upon request when the request is made at least 96 hours in advance. Please call the City Council Secretary at 706-3611, to make arrangements. (TDD/706-3692 for deaf or hearing impaired only) City of Columbia Heights, Minnesota 2002 Audit Review July 9, 2003 Reports Issued Comprehensive Annual Financial Report City's financial statements Independent auditor reports on the fair presentation of the financial statements "Clean opinion" on the 2002 financial statements (page 19) The City was awarded GFOA's Certificate of Achievement for Excellence in Financial Reporting for the 2001 CAFR Implemented GASB 34 State Legal Compliance Report Required by Minnesota Statute §6.65 OSA established a task force to develop audit guide for legal compliance Audit guide covers five categories 1) contracting and bidding 2) deposits and investments 3) conflicts of interest 4) public indebtedness 5) claims and disbursement No compliance findings Report on Internal Control Required by audit standards Based on inquiries and observations Identifies reportable conditions Reportable condition defined as "significant deficiencies in the design or operation of the internal control over financial reporting that would adversely affect the City's ability to record, process, summarize, and report financial data" Two reportable conditions - Recreation revenue documentation - Police department receipts Federal Single Audit Required when City expends more than $300,000 of federal funds OMB developed audit guide for compliance testing Audit guide covers eight general categories 1) 2) 3) 4) 5) 6) 7) 8) political activity davis-bacon act civil rights cash management relocation assistance federal financial reports allowable costs drug-free workplace HLB Federal Single Audit 2002 federal expenditures: Federal Funding Source/ Pass Through Agency/ Pro,ram Title U.S. Department of Justice: Direct: Local Law Enforcement Block Grant Bulletproof Vest Partnership Program School Partnership Fund Passed -through State of MN Department of Economic Security: Juvenile Accountability Incentive Block Grant Federal Emergency Management Agency: Pa~ed-throngh Anoka County: Emergency Management Assistance Grant U.S. Department of Housing and Urban Development: Passed-through Anoka County: Community Development Block Grant - Entitlement Grant (CDBG) Direct: Operating Subsidy Capital Funds Program (CFP) Total Federal Expenditures Federal 2002 CFDA Federal Number Expenditures 16.592 $26,351 16.607 691 16.710 6,611 16.523 12,462 83.503 2,212 14.218 265,126 14.850 111,124 14.872 383~183 $807,760 One compliance finding - Timely submission of reimbursement requests Management Letter ~, GASB 34: The City finance department implemented this standard for the 2002 financial report. Management Letter GASB 34: - The most significant changes to the financial statements are as follows: · Government-wide financial statements tatements .~1 and #2 of the omprehens~ve Annual Financial Report) are prepared using full accrual accounting for all of the City's activities. · Fund Financial Statements,(Statements #3 t~-'~g--~ ~ ~ the Notes) focus on major funds rather than fund types. · Budgetary comparisons (Statements #10 and #11 ) include both. original and amended budgets. · All capital assets are depreciated on the government-wide financial statements. · A Management's Discussion and Analysis (MD&A) is included in the financial statements. This provides an overview and analysis of the basic financial statements. Management Letter General Fund: - Fund balance decreased $381,000 during 2002. Expenditures Increase (decrease) Ix=fmc other financin8 sourcm Other financing sources (uses): Operafins transfers from other funds Operafin/t~nsfers ~o other funds Increase (decrease)/n General Fund bahmce Budget Actual Variance $7,965,947 $8,123,645 $157,698 7~854~908 7t243r891 611 r017 111,039 879,754 768,715 532,032 670,769 138,737 (1,840,052) (1t932~293) (92~241) $815,211 Management Letter General Fund: - Fund balance at December 31, 2002 was not sufficient to fulfill all reserve requirements. The shortfall was $503,000. Fund balance at December 31, 2002 was not sufficient to fulfill all reserve requirements. The shortfall was $259,000. It should also be noted that $200,000 was transferred to a new fund- "Capital Equipment Replacement- Library" Management Letter Fixed Assets: Prior management letters disclosed the fixed asset system did not agree with amounts reported in the financial statements. During 2002, finance department staff, along with assistance from other departments, performed a comprehensive inventory and reconciliation of fixed assets. The fixed asset listing is now in agreement with the financial statements HLB Management Letter Fund Reclassifications: Several funds were reclassified from the "Special Revenue" category to the "Capital Project" category. The Capital Project fund type more closely fits with the type of activity accounted for in these funds. The funds reclassified were: · Municipal State Aid · Parking Ramp · Housing Mortgage HLB Management Letter - The City is required to make annual payments to PERA in the amount of $56,706 relating to the consolidation of the Police Pension Fund. PERA allows for the option of prepaying this future liability discounted at 8%. The City elected to prepay this liability. The prepayment amount was $268,969. Management Letter New Funds Established: - Effective December 31,2002, the following funds were established: 330,000 100000 Management Letter - The City's liquor operations compare favorably with State averages. New Audit Standards - New audit standards regarding fraud risk considerations will be effective for the 2003 audit (SAS 99). Other Matters - Billing of emergency water repairs - Establishing bank accounts COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AUDIT MANAGEMENT LETTER December 31,2002 Tautges Redpath, Ltd. Certified Public Accountants and Consultants To the Board of Commissioners Columbia Heights Economic Development Authority Columbia Heights, Minnesota 55421 In conjunction with our audit of the City's financial statements, we have prepared this report to assist the EDA board in analyzing the financial activity of the EDA. Economic Development Authority The EDA was established in January 1996. The EDA is a separate legal entity from the City, however, because the Mayor and City Councilmembers comprise the majority of the EDA's governing board, the EDA is reported in the City's financial statements using the blended method. Additionally, the EDA assumed oversight responsibility for the HRA. The EDA and HRA financial statements are included as Special Revenue Funds of the City's CAFR. 4810 White Bear Parkway, White Bear Lake, Minnesota 55110, USA Telephone: 651 426 7000 Fax: 651 426 5004 HLB Tautges Redpath, Ltd. is a member of [] International. A world-wide organization of accounting firms and business advisers. Columbia Heights Economic Development Authority Management Report The transition of the funds of the HRA to the EDA is illustrated below: Before HRA General Fund Anoka County CDBG Parkview Villa North Parkview Villa South Multi-Use Redevelopment Plan After EDA HRA General Fund Section 8 An°ck;BC°GUnty Rental Housing Parkview Villa North Parkview Villa South Closed to City TIF Debt Service Fund EDA Administration 2 Columbia Heights Economic Development Authority Management Report Condensed balance sheets for the HRA and EDA for 2002 and 2001 are as follows: Assets Cash and investments Other assets Total assets Liabilities and Fund Balance Liabilities - in total Fund balance: Reserved Unreserved Total liabilities and fund balance EDA FUNDS HRA FUNDS Business Anoka Parkview Parkview Revolving EDA County Villa Villa Rental 2002 2001 Loan Section 8 Admin. CDBG North South Housin~ Total Total $301,241 $ - $94,670 $ - $432,356 $135,404 $42,388 $1,006,059 $1,200,125 39,716 2,195 464,293 245,502 1,815 145,262 898,783 512,277 $340,957 $0 $96,865 $464,293 $677,858 $137,219 $187,650 $1,904,842 $1,712,402 $12,729 $ - $2,627 $489,610 $203,465 $34,629 $148,593 $891,653 $676,036 327,541 474,393 144,723 946,657 948,029 687 94,238 (25,317) 102,590 {105,666) 66,532 88,337 $340,957 $0 $96,865 $464,293 $677,858 $137,219 $187,650 $1,904,842 $1,712,402 Reserved fund balances generally indicate that these funds are either externally restricted as to their use, or are not available for current expenditure. Unreserved fund balances include amounts that may be designated internally by the EDA. 3 Columbia Heights Economic Development Authority Management Report Housing and Redevelopment Authori .ty (299) A comparison of the financial activity of the HRA fund for 2000, 2001 and 2002 is as follows: 2000 2001 2002 Revenues: Taxes $95,643 $94,499 $98,241 Intergovernmental revenue 12,903 12,903 12,944 Fees/program revenue 21,251 29,828 12,542 Investment income 41,167 27,278 30,799 Total revenues 170,964 164,508 154,526 Expenditures: Supplies 498 Other services and charges 462 4,223 12 Total expenditures 960 4,223 12 Revenues over expenditures 170,004 160,285 154,514 Other financing sources (uses): Operating transfer from EDA Anoka County CDBG Operating transfer to Sheffield Redevelopment Operating transfer to Community Development Operating transfer to Capital Improvement Development Operating transfer to Section 8 Total other financing sources (uses) Net increase in fund balance Fund balance - January 1 Fund balance - December 31 (93,618) (94,752) (12,o0o) 24,000 (77,000) (34,702) (185,000) (85,877) (93,618) (106,752) (358,579) 76,386 53,533 (204,065) 402,374 478,760 532,293 $478,760 $532,293 $328,228 The HRA fund accounts for the property tax levy for Sheffield Redevelopment and Business Revolving Loan Fund (BRLF). As shown above, this fund has a fund balance of $328,228. A portion of the fund balance ($306,428) relates to a loan to ACAAP. In prior years, the City received monies directly from CDBG and provided a loan to ACAAP for the 4 Columbia Heights Economic Development Authority Management Report purchase of property. The $306,428 is the money that was repaid. The City is not aware of any restrictions on these remaining balances. A history of the fund balance of the HRA is as follows: Increase Year Amount (Decrease) 1994 $268,307 $268,307 1995 53,521 (214,786) 1996 (15,447) (68,968) 1997 30,109 45,556 1998 37,907 7,798 1999 402,374 364,467 2000 478,760 76,386 2001 532,293 53,533 2002 328,228 (204,065) 5 Columbia Heights Economic Development Authority Management Report This fund also accounts for revolving loans. as follows: A summary of the loan activity for 2002 is Balance Payor 12/31/2001 Jonak (Indust Steel) Barnick (Metro Assembling) F.C. Celtic, LLC Totals Principal Balance 2002 Payments 12/31/2002 Interest $3,268 $3,098 $170 $94 11,956 2,647 9,309 545 6,880 5,926 954 231 $22,104 $11,671 $10,433 $870 6 Columbia Heights Economic Development Authority Management Report Anoka County CDBG Fund (202) Financial activity of this fund for 2001 and 2002 is as follows: Revenues: Federal grant: HOME Funds Housing rehab - project 055 Housing rehab - project 955 Public service agencies - 928 Commercial revitalization - 030 Commercial revitalization - 130 Commercial revitalization ~ 930 Livable communities - 929 Public service pool - 028 Sale of land Miscellaneous Total revenues Expenditures: Personal services Supplies Other services and charges Loans and grants Capital outlay Total expenditures Revenues over (under) expenditures Other financing sources (uses): Operating transfer to General Fund Net increase (decrease) in fund balance Fund balance - January 1 Fund balance - December 31 2001 $70,000 34,601 28,732 5,100 32,838 82,558 231,000 6,000 37,650 196 528,675 12,877 388 53,644 241,100 191,270 499,279 29,396 29,396 (16,089) $13,307 2002 $ 55,855 87,935 239,393 383,183 3,204 21 85,613 327,056 415,894 (32,711) (5,913) (38,624) 13,307 ($25,317) 7 Columbia Heights Economic Development Authority Management Report At December 31, 2002, available CDBG balances are as follows: Project Project Available Expiration Number Year Balance Date 030 2000 $117,326 12/31/01 055 2000 58,245 12/31/01 130 2001 175,000 12/31/02 Total $350,571 8 Columbia Heights Economic Development Authority Management Report Parkview Villa North (PVVN) (203) The financial activity of this fund for 2001 and 2002 is as follows: Revenues: Federal grant: Operating subsidy Capital grant Rents Investment income Other Total revenues Expenditures: Personal services Supplies Other services and charges: Management services Utilities Repair and maintenance PILOT Insurance All other Capital outlay Total expenditures Revenues over expenditures Other financing sources (uses): Operating transfers (out) Net increase in fund balance Fund balance - January 1 Fund balance - December 31 2001 2002 $92,081 $111,124 6,710 256,723 266,979 284,198 18,680 28,170 4,999 2,078 389,449 682,293 10,335 9,111 27,200 10,221 104,390 104,009 79,054 69,948 35,728 29,495 19,247 22,901 15,700 24,024 19,293 20,333 18,273 248,336 329,220 538,378 60,229 143,915 (7,335) {7,884) 52,894 136,031 285,468 338,362 $338,362 $474,393 As shown above the fund balance increased by $136,031 in 2002. 9 Columbia Heights Economic Development Authority Management Report EI)A Administration (204) This fund was established in 1996 to account for the financial activity associated with business development and community redevelopment projects in the City. A summary of the financial activity of this fund for 2001 and 2002 is as follows: 2001 2002 Revenues: Taxes $118,508 $119,834 Fees/program revenues 140 - Met Council - livable communities grant 335,350 209,650 Reimbursement 15,986 4,210 Investment income 8,365 Total revenues 469,984 342,059 Expenditures: Other: Personal services Supplies Other services and charges Loans and grants Capital outlay Total expenditures Revenues over expenditures Other financing sources (uses): Operating transfers in Operating transfers (out) Total other financing sources (uses) Net increase (decrease) in fund balance Fund balance - January 1 Fund balance - December 31 31,403 53,107 649 5,457 60,710 40,714 335,350 209,650 568 428,680 308,928 41,304 33,131 - 17,500 (22,281) (107,884) (22,281) (90,384) 19,023 (57,253) 132,468 151,491 $151,491 $94,238 10 Columbia Heights Economic Development Authority Management Report Section 8 (205) This fund accounts for the Section 8 Housing Certificate and Voucher programs. summary of the 2001 and 2002 financial activity is as follows: A Revenues: Intergovernmental revenue: HUD Other Investment income Administrative fees Total revenues Expenditures: Other: Personal services Other services and charges Total expenditures Revenues over (under) expenditures Operating transfers in from HRA Fund Net increase (decrease) in fund balance Fund balance (deficit) - January 1 Fund balance (deficit) - December 31 2001 2002 $1,397 $ 1,243 15,531 716 40 3,396 15,531 986 8,493 9,479 0 (6,083) 15,531 85,877 (6,083) 101,408 {95,325) {101,408) ($101,408) SO 11 Columbia Heights Economic Development Authority Management Report Parkview Villa South (213) The financial activity of this fund for 2001 and 2002 is as follows: 2001 2002 Revenues: Rents $191,640 $191,944 Investment income 43,660 7,102 Other 1,616 1,342 Total revenues 236,916 200,388 Expenditures: Personal services 2,768 6,263 Supplies 15,479 6,359 Other services and charges: Management services 52,102 51,913 Utilities 45,737 37,466 Repair and maintenance 16,438 19,229 PILOT 13,705 14,757 Insurance 7,850 11,833 All other 10,520 6,166 Capital outlay 4,894 9,089 Total expenditures 169,493 163,075 Revenues over expenditures 67,423 37,313 Other financing sources (uses): Operating transfers (out) - General Operating transfers (out) - PVVS capital Total other financing sources (uses) Net increase (decrease) in fund balance Fund balance - January 1 Fund balance - December 31 (3,670) (5,914) (700,000) - (703,670) (5,914) (636,247) 31,399 707,438 71,191 *71,191 *102,590 During 2001, the EDA approved the establishment of the PVVS Capital Improvement Fund. This fund transferred $700,000 to the new PVVS Capital Improvement Fund as noted above. 12 Columbia Heights Economic Development Authority Management Report Rental Housing (235) This fund was established in 1996 to account for rental properties. Currently, the properties consist of one four-plex. A summary of the 2001 and 2002 financial activity is as follows: 2001 2002 Revenues: Rents $17,734 $16,450 Investment income 1,839 3,170 Other 298 195 Total revenues 19,871 19,815 Expenditures: Other: Personal services 351 Supplies 347 Other services and charges: Management services 1,265 Utilities 3,636 Repair and maintenance 706 PILOT 1,460 Insurance 709 All other 2,988 Total expenditures 11,462 Revenues over expenditures 8,409 Fund balance - January 1 22,721 Fund balance - December 31 $31,130 58O 1,380 3,275 1,964 1,368 1,063 2,258 11,888 7,927 31,130 $39,057 June 18, 2003 HLB TAUTGES REDPATH, LTD. Certified Public Accountants 13 CITY OF COLUMBIA HEIGHTS, MINNESOTA AUDIT MANAGEMENT LETTER December 31, 2002 Tautges Redpath, Ltd. Certified Public Accountants and Consultants To the Honorable Mayor and Members of the City Council City of Columbia Heights, Minnesota We have completed the 2002 audit of the financial statements of the City of Columbia Heights and have issued our report thereon. Our Independent Auditor's Report is included in the City's Comprehensive Annual Financial Report (CAFR). Other reports included in the CAFR are: · Independent Auditors' Report on Compliance with Minnesota Legal Compliance Audit Guide for Local Government · Independent Auditor's Report on Internal Control and Compliance · Single Audit Reports. This Management Report provides the City an independent review and analysis of City finances. We also issue a separate Management Report for the Economic Development Authority. Page 3 contains an Executive Summary of our recommendations with page references to the areas discussed. June 18, 2003 HLB TAUTGES REDPATH, LTD. Certified Public Accountants 4810 White Bear Parkway, White Bear Lake, Minnesota 55110, USA Telephone: 651 426 7000 Fax: 651 426 5004 HLB Tautges Redpath, Ltd. is a member of ! International. A world-wide organization of accounting firms and business advisers. City of Columbia Heights, Minnesota Management Report Report Summary REPORT SUMMARY Several reports are issued in conjunction with the audit. follows: A very brief summary is as Report Name Elements of Report Discretionary Reports Overview Audit Management Letter Intended to be working tool for City Council · Comparisons and trend analysis · Systems · Outside factors influencing the City, such as changes in accounting standards · Policies and procedures · See page 3 of this report for Executive Summary Required Reports Comprehensive Annual Financial Report (CAFR) Report on Compliance and Internal Control State Legal Compliance Report Schedule of Expenditures of Federal Awards and Independent Auditor's Reports (Federal Single Audit) · Financial statements · Footnotes · Supplemental information Results of testing Internal controls over financial reporting Compliance with laws, regulations, contracts and grants Results of testing certain provisions of Minnesota Statutes Required because City's federal program expenditures exceed $300,000 · Compliance and internal control reports on federal programs · Schedule of federal expenditures and other required reports Unqualified ("clean") opinion on the General Purpose Financial Statements · No compliance findings · Two reportable conditions in internal control · No findings One finding was reported Descriptions and management responses are included in the report 2 City of Columbia Heights, Minnesota Management Report Executive Summary EXECUTIVE SUMMARY A summary of our recommendations contained in this report is as follows: The City continues to experience a good property tax collection rate - 99% for 2002. Page 10 The General Fund balance decreased $381,000 during 2002. The City budgeted a decrease of $1,196,000, however, revenues exceeded budget by $300,000 and expenditures were less than budget by $500,000. Page 22 The General Fund balance at December 31, 2002 was not sufficient to fulfill the reserve requirement for working capital. The shortfall was $503,000. Page 25 The Library Fund balance at December 31, 2002 was not sufficient to fulfill the reserve requirement for working capital. The shortfall was $259,000. Page 28 We have issued a separate management report addressed to the EDA/HRA. Page 30 The City's liquor operations compare favorably with State averages. Page 52 The federal single audit reports contain findings on EDA programs. Page 55 The City's Comprehensive Annual Financial Report received the Certificate of Achievement for Excellence in Financial Reporting. Page 56 We have a summary and recommendation of certain internal control matters. Page 57 New audit standards regarding fraud will be effective for the 2003 audit. Page 60 3 City of Columbia Heights, Minnesota Management Report GASB 34 - The Reporting Model GASB 34- THE REPORTING MODEL The City of Columbia Heights implemented for 2002 the Governmental Accounting Standards Board's Statement No. 34, Basic Financial Statements - and Management' s Discussion and Analysis -for State and Local Governments. This accounting standard significantly changes how state and local governments report their financial activity to the public. In general, the new standards make government financial reporting more like the private sector. The most significant effects of implementing GASB 34 are as follows: · Government-wide financial statements .(Statements #1 and #2 of the Annual Financial Report) are prepared using full accrual accounting for all of the City's activities. · Fund Financial Statements .(Statements #3 through #9 and the Notes) focus on major funds rather than fund types. · Budgetary comparisons (Statements #10 and #11) include both original and amended budgets. · All capital assets are depreciated on the government-wide financial statements. · A Management's Discussion and Analysis (MD&A) is included in the financial statements. This provides an overview and analysis of the basic financial statements. 4 City of Columbia Heights, Minnesota Management Report Govemment-Wide Financial Statements ACCOUNT BALANCE ANALYSIS OF THE GOVERNMENT-WIDE FINANCIAL STATEMENTS The basic financial statements of the City of Columbia Heights are presented in Statements 1 through Statement 9 of the 2002 Comprehensive Annual Financial Report. The following comments relate to these Financial Statements. Summary. of Financial Activity A summary of financial activity for 2002 is as follows: Fund Increase in Fund Balance/ Revenue Expenditures Fund Balance/ Retained and Other and Other Transfers Retained Earnings Sources Uses {Net) Enmint~s 12/31/02 General $8,123,645 $7,243,891 ($1,261,524) ($381,770) $3,515,606 Special Revenue: Flex Benefits 56,695 51,447 5,248 31,742 Cable Television 168,052 149,202 (408,549) (389,699) 2,439 Library 616,265 594,641 (209,292) (187,668) 50,871 D.A.R.E Program 526 4,851 9,000 4,675 20,573 Community Development Fund 1,547 297,632 272,876 (23,209) 13,247 Police/Fire Contingency 146,870 387,571 (238,057) (478,758) COPS More Grant 314 Juvenile Justice Grant 12,462 13,534 893 (179) 963 Local Law Enforcement Block Grant 27,932 34,606 1,916 (4,758) 6,511 Cops School Parmership Grant 6,611 6,611 Recreation Contributed Projects 29,145 11,441 17,704 70,925 Contributed Projects 14,279 20,021 (5,742) 28,340 Special Projects 108,043 72,300 (330,000) (294,257) 4,717 Confiscated Property 3,860 1,112 2,748 13,121 C.H.A.S.E 91,399 78,592 12,807 49,487 Housing and Redevelopment Authority: Business Revolving Loan Fund 154,526 12 (358,579) (204,065) 328,228 EDA: Anoka County CDBG 383,183 415,894 (5,913) (38,624) (25,317) Economic Development Authority Admin 342,059 308,928 (90,384) (57,253) 94,238 Section 8 15,531 85,877 101,408 Parkview Villa South 200,388 163,075 (5,914) 31,399 102,590 Rental Housing 19,815 11,888 7,927 39,057 Parkview Villa North 682,293 538,378 (7,884) 136,031 474,393 City of Columbia Heights, Minnesota Management Report Government-Wide Financial Statements Fuad Debt Service: Tax Increment Bonds Capital Appreciation Bonds of 1990 Tax Increment Refunding Bonds of 1991 Multi-Use Redevelopment Plan G.O. Improvement 1999A Capital Project: Municipal State Aid Capital Improvement Downtown Parking Maintenance TI~ District #2 Capital Sheffield Redevelopment Capital Improvement General Government Buildings Capital Improvement Parks Capital Improvement PWS Capital Improvement Projects Infrastructure Replacement Capital Equipment Replacement Capital Equipment Fire Capital Improvement Development Capital Equipment Cable TV Capital Building Library TIF Medtrouic TIF Scattered Site Sheffield TIF Development TIF Transition Block Enterprise: Wate~ Sewer Refuse Storm Sewe~ Liquor Internal Service: Central Garage Energy Management Data Processing Insurance Compensated Absences Total Revenue Expenditures and Other and Other Transfers Sources Uses (Net) $785,927 $17,926 ($1,112,130) 885,750 885,750 226,380 226,380 17,391 12,311 38,418 135,370 70,721 3,012,505 3,986,261 (56,835) 4,337 4,170 2,932 20,093 20,771 612,293 126,143 20,778 1,358,198 69,473 28,651 46,215 1,366,163 1,398,459 263,734 31,302 (144,380) 265,038 62,578 308,523 41,600 72,430 5,352 37,583 915,000 300,000 200,000 126,904 104,677 22,679 62 (76,105) 44,913 138 (535,293) 9 1,395,717 1,590,795 (119,366) 1,392,572 1,114,104 (109,364) 1,342,572 1,292,153 (177,552) 282,355 137,280 (10,000) 6,991,748 6,371,468 (217,954) 389,826 368,626 (90,500) (107,646) 1,660 234,444 310,000 524,296 451,533 (138,737) $29,550,334 $28,980,325 $12,135 Increase in Fund Balance/ Fund Balance/ Retained Retained Earnings Earnings 12/31/02 ($344,129) $535,871 5,080 (52,579) (26,231) 704,354 (1,030,591) (725,704) 3,099 529,499 (678) 732,292 (2,243) 612,293 483,133 1,463,563 2,991,025 40,822 753,551 46,215 749,933 231,438 (186,426) (113,078) 377,443 510,983 4,553,841 (30,830) 663,478 882,769 882,769 300,000 300,000 200,000 200,000 22,227 160,132 (53,488) (33,603) (490,518) (490,518) 9 9 (314,444) 3,160,809 169,104 5,758,913 (127,133) 778,388 135,075 309,283 402,326 2,926,661 (69,300) 290,705 (107,646) 77,216 495,844 72,763 585,445 (1387737) 16~658 $582,144 $32,271,008 6 City of Columbia Heights, Minnesota Management Report Government-Wide Financial Statements Cash, Investments and Interest Revenue Cash and investments of the City of Columbia Heights were as follows at December 31, 2001 and 2002: Description 2001 2002 Checking accounts: Operating ($25,324) ($110,246) Payroll 3,460 3,842 Lottery 22,871 13,601 Credit card 99,711 144,259 Flex benefit 25 25 Petty cash 4,950 6,200 Investments 24,697,020 26,428,285 Totals $24,802,713 $26,485,966 Investment Income Investment income for 2001 and 2002 consisted of the following: Interest Revenue 2001 2002 Increase (Decrease) Pooled investments $1,366,786 $1,292,651 ($74,135) Change in fair value 102,581 317,680 215,099 Total $1,469,367 $1,610,331 $140,964 City of Columbia Heights, Minnesota Management Report Government-Wide Financial Statements Included in investment income for 2002 is a change in fair value (adjustment to December 31 market value). The fair value adjustment for the last five years have been as follows: Year Amount 1998 $191,115 1999 (818,782) 2000 538,394 2001 102,581 2002 317,680 Governmental accounting standards require the reporting of most investments at fair value. Fair value is the amount at which a financial investment could be exchanged in a current transaction between willing parties (i.e., market value). The change in fair value is reflected in investment income. Reporting investments at fair value results in greater "swings" in investment income because of market changes. 8 City of Columbia Heights, Minnesota Management Report Govemment-Wide Financial Statements The City's current investment practice is to hold investments to their stated maturity. Interest income on such investments will not fluctuate, however, the period in which the income occurs will fluctuate if the fair value of the investment changes as of the end of each reporting year. An example of this concept is as follows: Interest Reported Cost Fair Received Investment Period Year Basis Value at 7% Results Yield 1 $100,000 $101,000 $7,000 $8,000 8% 2 98,000 7,000 4,000 4% 3 100,000 7~000 9~000 9% Total at maturity $21,000 $21,000 In the preceding illustration, a 7% fixed rate investment will report a different yield in each of the three periods presented. The total earnings on such an investment will, however, be 7% (the stated rate) over the three year period in which the investment was held to maturity. Users of financial statements require a greater understanding of the components of reported investment results. Reported results may reflect temporary market conditions, the effects of which will reverse in subsequent periods. City of Columbia Heights, Minnesota Management Report Government-Wide Financial Statements Property Taxes Receivable Delinquent taxes receivable related to the general property tax levy increased from $77,177 at December 31, 2001 to $74,840 at December 31, 2002. Tax collections were 99% of the 2002 levy. The City is experiencing an excellent property tax collection rate. A history of tax collections is presented in Table 5 of the Comprehensive Annual Financial Report. Tax Levies, Tax Rates and Tax Capacity A comparison of values for taxes payable 2001 through 2003 is as follows: 2001 2002 2003 Market value $749,621,700 $775,336,500 $982,517,600 Tax capacity values: Real estate $10,304,905 $8,756,307 $8,661,656 Personal property 157,970 91,466 99,322 Subtotal 10,462,875 8,847,773 8,760,978 Fiscal disparity contribution (573,922) (385,323) (409,330) Fiscal disparity distribution 3,085,984 1,976,846 2,111,495 Total $12,974,937 $10,439,296 $10,463,143 Tax capacity rates 30.563 49.114 45.272 Tax levy $3,625,552 $4,935,832 $4,929,632 10 City of Columbia Heights, Minnesota Management Report Government-Wide Financial Statements The Minnesota Property Tax System is complex with a number of different classes of property defined in State Statutes. However, the formulas are based on a simple equation, which is as follows: Market Value [ x Class Rate = Tax Capacity Market value is the starting point in the property tax equation and in theory is consistently applied to all properties. Class rate is the mechanism used to allocate property taxes on a basis other than market value. An illustration of the above concept is as follows: Percent Decrease Property Classification Market Value Class Rate Tax Capacity in Tax Capacity ~esidenti~l Homestead $150,0~)(~ 1st $76,000- 1.00% $1,981 --~_~ J Remainder- 1.65% ~ Residential Homestead $500,000 1st $76,000 - 1.00% $7,756 ~ Remainder- 1.65% Commercial $500,000 1st $150,000 - 2.40% $11,900 Remainder- 3.40% Commercial $1,500,000 1st $150,000 - 2.40% $49,500 ]~~__~ Remainder- 3.40% .[ .. 2002 a~d 3003 ........ ~.~.... ........... Residential' Homestead $150,000 1 st $500,000 - 1.00% $1,500 24% Remainder- 1.25% Residential Homestead $500,000 1st $500,000 - 1.00% $5,000 35% Remainder- 1.25% Commercial $500,000 1st $150,000 - 1.50% $9,250 22% Remainder - 2.00% Commercial $1,500,000 1st $150,000- 1.50% $29,250 40% Remainder - 2.00% 11 City of Columbia Heights, Minnesota Management Report Govemment-Wide Financial Statements As shown on the previous page, all properties experienced a decrease in tax capacity. However, higher value commercial property have the largest percentage decrease in tax capacity. In this example, the changes in class rates have the impact of shifting the property tax burden from higher value commercial property to other classes of property. The principal taxpayers for the past three years are as follows: Percent of Total City Tax Capacity Taxpayer 2000 2001 2002 Medtronics Bradley Operating LP Maylan Construction (K-Mart) Lake State Properties Columbia Park Properties 2.40% 2.25% 1.67% 1.84% 1.83% 1.36% 1.10% 1.04% 0.83% 1.10% 1.00% 0.73% 1.03% 0.99% 0.73% 12 City of Columbia Heights, Minnesota Management Report Govemment-Wide Financial Statements Special Assessments Receivable Special assessments receivable consisted of the following amounts at December 31, 2001 and 2002: December 31, Increase Description 2001 2002 (Decrease) Delinquent $80,906 $110,567 $29,661 Deferred 737,536 1,073,860 336,324 Unrcmitted 2,720 1,776 (944~ Totals $821,162 $1,186,203 $365,041 Delinquent special assessments receivable consist of amounts which have been spread for collection in 2002 and prior years but have not been collected at December 31, 2002. The City collected approximately 60% of the current assessments due in 2002. Total collections (current and delinqueno were 93% of the current assessments due. Deferred assessments receivable consist of the remaining balance of council adopted assessment rolls. These assessments are collectible at various terms and interest rates. Balance at January 1, 2002 Less 2002 principal levy Plus new assessment rolls Less prepayments Plus adjustments $737,536 (139,342) 896,172 (421,259) 753 Balance at December 31, 2002 $1,073,860 13 City of Columbia Heights, Minnesota Management Report Government-Wide Financial Statements Interfund Receivables The City has several interfund loans. Balances at December 31, 2002 are as follows: Fund With Fund With Payable Receivable Amount Purpose Sheffield TIF (377) Sewer Fund (652) $492,000 Scattered Site T1F (379) Sewer Fund (652) 35,000 Rental Housing (235) General (101) 144,800 Subtotal 671,800 Multi Use Redevelopment Plan (385) Tax Increment Bonds (376) 52,572 Cable TV (225) General Fund (101) 29,070 Anoka County CDBG (202) General Fund (101) 263,710 TIF #2 (407) Infrastructure (430) 2,243 PIR (415) Infrastructure (430) 155,321 Water Construction (651) Capital Equipment Replacement (431 ) 321,943 Water Construction (651) Water Fund Debt Service (631) 293,056 Water Construction (651) Water Utility (601) 63,676 Storm Sewer Debt Service (634) Sewer Utility (602) 96,404 Total $1,949,795 To finance redevelopment costs To finance redevelopment costs To finance land acquisition To fund cash deficit To fund cash deficit To fund cash deficit To fund cash deficit To fund cash deficit To fund cash deficit To fund cash deficit To fund cash deficit To fund cash deficit As shown above, the City has two types of interfund loans: 1) temporary interfund loans to finance cash deficits; and, 2) long term interfund loans. A schedule of activity of long term interfund loans is as follows: Balance New Payments Balance Fund with Payable at 12/31/01 Loans Principal Interest at 12/31/02 Sheffield Redevelopment - 609 $169,000 Sheffield Redevelopment - 652 520,720 Tax Increment Bonds - 290 408,027 Tax Increment Bonds - 390 446,352 Rental Housing - 101 Sheffield TIF - 652 Scattered Site TIF - 652 $ $169,000 $ $ 520,720 408,027 446,352 144,800 144,800 492,000 492,000 35,000 35,000 Tomls $1,544,099 $671,800 $1,544,099 $0 $671,800 The Sheffield TIF loan is authorized by Resolution 2003-5. The Scattered Site TIF loan is authorized by Resolution 2003-4. 14 City of Columbia Heights, Minnesota Management Report Government- Wide Financial Statements Fixed Assets Prior management letters declared the fixed asset system did not agree with amounts reported in the financial statements. During 2002, finance department staff, along with assistance from other departments, performed a comprehensive inventory and reconciliation of fixed assets. As of December 31, 2002, the fixed asset listing now is in agreement with the financial statements. 15 City of Columbia Heights, Minnesota Management Report General Fund GENERAL FUND The General Fund of the City is maintained to account for the current operating and capital outlay expenditures common to all cities. These basic services include (but are not limited to) public safety, public works, parks and recreation, and general government. State aids and property taxes account for approximately 85% of the total revenue of the General Fund. A history of General Fund revenue is as follows: General Fund - Sources of Revenue State Aid Property Taxes All Other Total Year Amount Percent Amount Percent Amount Percent Amount Percent 1996 $3,153,299 49% $2,403,017 37% $924,756 14% $6,481,072 100% 1997 3,333,615 49% 2,505,456 37% 1,006,133 15% 6,845,204 100% 1998 3,382,187 47% 2,662,288 37% 1,123,767 16% 7,168,242 100% 1999 3,448,758 48% 2,658,598 37% 1,026,541 14% 7,133,897 100% 2000 3,509,577 47% 2,737,854 37% 1,167,656 16% 7,415,087 100% 2001 3,577,318 47% 2,954,511 38% 1,148,842 15% 7,680,671 100% 2002 3,362,902 41% 3,534,854 44% 1,225,889 15% 8,123,645 100% 16 City of Columbia Heights, Minnesota Management Report General Fund State aids for the General Fund have consisted of the following amounts for the last two years: Increase Description 2001 2002 (Decrease) Local government aid $2,385,618 $2,588,641 $203,023 HACA 1,004,368 (1,004,368) MVHC 570,152 570,152 Police aid 151,312 171,292 19,980 All other 36,020 32,817 (3,203) Totals $3,577,318 $3,362,902 ($214,416) A graph of General Fund revenue by source is as follows: $9,000,0 $8,000,0 $7,000,0 $6,000,0 $5,000,0 $4,000,0 $3,000,0 $2,000,0 $1,000,0 [..%...~..?.~ 2000 1998 1999 2002 General Fund Revenue by Source I~ Ail Other [] Property Taxes ~ State Aids 17 City of Columbia Heights, Minnesota Management Report General Fund Revenue and other financing sources of the General Fund for the past two years has been as follows: Increase Description Amount Percent Amount Percent {Decrease) $2,954,511 36.4% $3,534,854 40.2% $580,343 292,744 3.6% 277,924 3.2% (14,820) 3,577,318 44.1% 3,362,902 38.2% (214,416) 4,772 0.1% 2,902 0.0% (1,870) 77,929 1.0% 80,279 0.9% 2,350 390,492 4.8% 414,739 4.7% 24,247 87,760 1.1% 84,346 1.0% (3,414) 273,773 3.4% 347,342 3.9% 73,569 21,372 0.3% 18,357 0.2% (3,015) 429,968 5.3% 670,769 7.6% 240,801 General property taxes Licenses and permits Intergovernmental revenue: State Federal Other Charges for services Fines and forfeitures Investment income Other Operating transfers Total revenue and other sources 2001 2002 $8,110,639 100.0% $8,794,414 100.0% $683,775 18 City of Columbia Heights, Minnesota Management Report General Fund A chart of 2002 revenue by source is as follows: General Fund 2002 Revenue by Source Intergovernmental 39.2% ProperS' T~xes 40.2% All Other 20.6% 19 City of Columbia Heights, Minnesota Management Report General Fund Expenditures and other financing uses of the General Fund for the past two years were as follows: 2001 2002 Amount Percent Amount Percent Increase {Decrease) Expenditures: General government $1,497,575 16.6% $1,575,505 17.2% $77,930 Public safety 3,156,057 35.0% 3,380,893 36.8% 224,836 Public works 1,222,190 13.6% 1,074,477 11.7% (147,713) Parks and recreation 1,194,800 13.3% 1,213,016 13.2% 18,216 Contingencies 3,922 0.0% 0.0% (3,922) Transfers out: Data processing 50,000 0.6% 50,000 0.5% Infrastructure 15,000 0.2% 0.0% (15,000) Capital improvement - general 0.0% 2,933 0.0% 2,933 Capital improvement - PIR 0.0% 86,499 0.9% 86,499 Capital improvement - development 0.0% 300,000 3.3% 300,000 Capital improvement - general governmental building 1,567,757 17.4% 1,190,052 13.0% (377,705) Community development 250,000 2.8% 250,000 2.7% - Capital equipment replacement 50,000 0.6% 50,000 0.5% - Local law enforcement block grant 2,522 0.0% 1,916 0.0% (606) Juvenile justice grant 1,071 0.0% 893 0.0% (178) COPS more 96 3,787 0.0% 0.0% {3,787) Total expenditures and other uses $9,014,681 100.0% $9,176,184 100.0% $161,503 20 City of Columbia Heights, Minnesota Management Report General Fund A chart of 2002 expenditures by function is as follows: General Fund 2002 Expenditures By Function Public Works 11.7% Public Safety 36.8% Parks & Recreation 13.2% 21.1% General Government 17.2% 21 City of Columbia Heights, Minnesota Management Report General Fund The fund balance of the General Fund at December 31, 2002 was $3,515,606. During 2002, the fund balance of the General Fund decreased by $381,770 as follows: Budget Actual Favorable (Unfavorable) Variance Revenues and transfers in: Property taxes $3,525,375 $3,534,854 $9,479 Licenses and permits 304,100 277,924 (26,176) Intergovernmental 3,404,972 3,446,083 41,111 Charges for services 419,400 414,739 (4,661) Fines and forfeitures 100,000 84,346 (15,654) Investment income 200,000 347,342 147,342 Other 12,100 18,357 6,257 Operating transfers in 532,032 670,769 138,737 Total 8,497,979 8,794,414 296,435 Expenditures and transfers out: General government 1,735,749 Public safety 3,424,723 Public works 1,314,488 Parks and recreation 1,352,448 Contingencies 27,500 Operating transfers out 1,840,052 Total 9,694,960 ($1,196,981) 1,575,505 3,380,893 1,074,477 1,213,016 1,932,293 9,176,184 ($381,770) Net increase (decrease) in fund balance 160,244 43,830 240,011 139,432 27,500 (92,241) 518,776 $815,211 22 City of Columbia Heights, Minnesota Management Report General Fund The City's General Fund balance has been as follows for the past several years: Year Ended Increase December 31, Fund Balance (Decrease) 1993 $3,181,939 $256,073 1994 3,444,408 262,469 1995 3,591,224 146,816 1996 3,839,350 248,126 1997 4,060,594 221,244 1998 4,744,231 683,637 1999 5,015,965 271,734 2000 4,801,418 (214,547) 2001 3,897,376 (904,042) 2002 3,515,606 (381,770) $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 Fund Balance 1994 1995 1996 1997 1998 1999 2000 2001 2002 23 City of Columbia Heights, Minnesota Management Report General Fund A summary of the purposes and benefits of General Fund balances is as follows: NEED FOR RESERVE BALANCES CCash Flow T,'n n,~:~'~ .~l~.~Rr .q.lC~ IhOlaCts BENEFITS OF RESERVES ~'n{:'l',~,-' r(~ · 'n r'or plo ecfls or I ~ ,~ .,~ o,,'(~fdrafl~ pr,,,," ~o rnalO~ j 24 City of Columbia Minnesota Management Report Heights, General Fund Property taxes and state aids account for approximately 85% of the revenue of the General Fund. Property taxes and state aids are not received until July and December of each year (i.e., the second half of the year). As a result, the City is required to have sufficient reserves at the beginning of the year to fund operations of the first half of the year. As such, the City adopted resolution 95-40 establishing a General Fund cash flow reserve. This reserve is an amount equal to forty-five percent of the ensuing year's budgeted expenditures. A summary of General Fund designations is as follows: Reserved for prepayments Designated for working capital Designated for capital improvement Undesignated Total fund balance - December 31 2002 2001 $14,657 $7,003 3,500,949 3,700,506 - 140,052 49,815 $3,515,606 $3,897,376 The amount of General Fund balance at December 31, 2002 was not sufficient to fulfill the City's reserve goal. The amount of fund balance under the reserve requirement is calculated as follows: 2003 budgeted expenditures Reserve requirement percentage Reserve requirement Balance available Amount of fired balance under reserve requirement $8,899,512 x 45% 4,004,780 3,500,949 $503,831 25 City of Columbia Heights, Minnesota Management Report Special Revenue Funds SPECIAL REVENUE FUNDS Thc financial statements of the Special Revenue Funds are presented in Statements 14 through 40 of the 2002 Comprehensive Annual Financial Report. Special Revenue Funds are a classification of funds to account for revenues (and expenditures related thereto) segregated by City policy or Federal or State statutes for specific purposes. As a result of recent reports regarding the fund balances of General and Special Revenue Funds of Minnesota Cities, the City of Columbia Heights reclassified several funds to the Capital Project Fund type. This fund type more closely fits with the type of activity accounted for in these funds. The funds reclassified are as follows: Municipal State Aid Parking Ramp Housing Mortgage 26 City of Columbia Heights, Minnesota Management Report Special Revenue Funds The City maintained the following Special Revenue Funds during 2001 and 2002: Fund Balance (Deficit) December 31, Fund 2001 2002 Flex Benefits Cable Television DARE Program Library Community Development Police/Fire Contingency Cops More 96 Juvenile Justice Grant Local Law Enforcement Block Grant Recreation Contributed Projects Contributed Projects Special Projects Confiscated Property C.H.A.S.E. Housing & Redevelopment Authority: Parkview Villa North Parkview Villa South Rental Housing Economic Development Authority: Business Revolving Loan Fund Anoka County CDBG E.D.A. Administration Section 8 Totals $26,494 $31,742 392,138 2,439 15,898 20,573 238,539 50,871 36,456 13,247 478,758 314 314 1,142 963 11,269 6,511 53,221 70,925 34,082 28,340 298,974 4,717 10,373 13,121 36,680 49,487 Increase (Decrease) $5,248 (389,699) 4,675 (187,668) (23,209) (478,758) (179) (4,758) 17,704 (5,742) (294,257) 2,748 12,807 338,362 474,393 136,031 71,191 102,590 31,399 31,130 39,057 7,927 532,293 328,228 (204,065) 13,307 (25,317) (38,624) 151,491 94,238 (57,253) (101,408) 101,408 $2,670,704 $1,306,439 ($1,364,265) 27 City of Columbia Heights, Minnesota Management Report Special Revenue Funds Libra~ Fund (240) This fund was established in 1993 to account for the library operations. Prior to 1993, this activity had been accounted for in the General Fund. The primary revenue source of this fund is property taxes which are not received until the second-half of the year (July and December). Resolution. 95-40 established a reserve for cash flow in an amount equal to forty-five percent of the ensuing year's budgeted expenditures. A summary of fund balance is as follows: Designated for working capital Reserved for prepayments December 31, 2001 2002 $235,447 $46,715 3,092 4,156 Total $238,539 $50,871 The fund balance at December 31, 2002 was not sufficient to fulfill the established reserve. A comparison of the required reserve and the fund balance available is as follows: $679,700 x 45% 305,865 46,715 $259,150 2003 budgeted expenditures Reserve requirement percentage Reserve requirement Balance available Amount of fund balance under reserve requirement Effective December 31, 2002, the City transferred $200,000 out of this fund to a newly established Capital Equipment Replacement - Library Fund. 28 City of Columbia Heights, Minnesota Management Report Special Revenue Funds Community Development (201) This fund was established in 1996 to account for the financial activity related to building inspections and community development administration. A summary of the financial activity of this fund is as follows: Revenues and transfers in: Miscellaneous Met Council livable communities grant Investment income Transfer from General Fund Transfer from HRA Transfer from EDA Total Expenditures and transfers out: Expenditures Transfer out to General Fund (administrative charge) Total Increase (decrease) in fund balance Fund balance (deficit) - January 1 Fund balance - December 31 2000 2001 2002 $10 30,000 142 418,772 $ $ 9,998 1,547 250,000 250,000 12,000 34,702 13,112 448,924 285,110 286,249 267,356 258,387 297,632 8,518 16,505 11,826 275,874 274,892 309,458 173,050 10,218 (23,209) (146,812) 26,238 36,456 $26,238 $36,456 $13,247 29 City of Columbia Heights, Minnesota Management Report Special Revenue Funds HRA and EDA Comments and analysis of the HRA and EDA Funds are presented in a separate report addressed to the EDA. MIF Medtronics (227) This fund accounts for the use of Minnesota Investment Fund grant. A summary of the financial activity is as follows: Revenues: State grant Investment income Total revenues Expenditures and transfers out: Grants Transfer to sewer construction Total expenditures and transfers out Fund balance - December 31, 2002 Prior Years 2002 Total $500,000 $500,000 19,128 19,128 $519,128 $ 519,128 $250,000 250,000 269,128 269,128 $519,128 $ 519,128 $0 30 City of Columbia Heights, Minnesota Management Report Special Revenue Funds The MIF Grant was a $500,000 grant consisting of two parts as follows: $250,000 250,000 Grant to City for costs related to Medtronic sewer work Loan to Medtronic for equipment purchases $500,000 Total The City costs related to this grant were reported in the sewer utility construction account. The City transferred grant monies to the Sewer Utility Construction Fund. Finance staff have disclosed that the documentation supporting the grant expenditures is not available. We recommend the Community Development Department, 1) locate/reconstruct and maintain the documentation supporting the grant expenditures; 2) review the grant requirements; and 3) demonstrate compliance with grant requirements. 31 Cityr of Columbia Heights, Minnesota Management Report Special Revenue Funds Police/Fire Contingency (888) This fund accounts for activities related to police and fire pensions. A summary of financial activity for 2001 and 2002 is as follows: 2001 2002 Revenues: State aid - police $56,706 $56,706 State aid - fire 54,543 61,896 Investment income 54,196 28,268 Total revenues 165,445 146,870 Expenditures: Pension contribution - fire Pension contribution - police Pension contribution - police Transfer to Capital Equipment Replacement Fund Total expenditures Net increase (decrease) in fund balance Fund balance - January 1 Fund balance - December 31 54,543 61,896 56,706 56,706 268,969 500,000 238,057 611,249 625,628 (445,804) (478,758) 924,562 478,758 $478,758 $0 The City is required to make annual payments to PERA in the amount of $56,706 relating to the consolidation of the Police Pension Fund. PERA allows for the option of prepaying this future liability discounted at 8%. The City elected to prepay this liability. The prepayment amount was $268,969. 32 City of Columbia Heights, Minnesota Management Report Debt Service Funds DEBT SERVICE FUNDS Debt Service Funds are a type of governmental fund to account for the accumulation of resources for the payment of interest and principal on debt (other than Proprietary Fund debt). A summary of bonded debt at December 31, 2002 is as follows: Balance At Final Original December 31, Maturity Bond Issue Issue 2002 Date G.O. Tax Increment Capital Appreciation Bonds of 1990 G.O. Improvement Bonds of 1999A $2,399,721 $2,008,206 9/1/2009 860,000 705,000 2/1/2010 Total $2,713,206 All tax increments are receipted into the Tax Increment Bonds Fund (376) and subsequently transferred out to the Debt Service Funds as debt payments are made. 33 City of Columbia Heights, Minnesota Management Report Debt Service Funds A schedule of debt payments (principal and interest) to maturity of the Tax Increment Bonds is as follows: Bonds of Year 1990 2003 920,000 2004 920,000 2005 920,000 2006 920,000 2007 920,000 2008 920,000 2009 425,000 $5,945,000 Additional commitments on tax increment include the following: District N7- District K2- District K2- Medtronic pay-as-you-go tax increment note. Miske pay-as-you-go tax increment note. Barnick pay-as-you-go tax increment note. 34 City of Columbia Heights, Minnesota Management Report Capital Project Funds CAPITAL PROJECT FUNDS The fund balances (deficits) of the Capital Project Funds were as follows at December 31, 2001 and 2002: Fund Balance (Deficit) December 31, Fund 2001 2002 Municipal State Aid 212/402' Sheffield TIF Redevelopment* Capital Improvement Development 420 Capital Improvement 401/390 Downtown Parking Maintenance 405/290 TIF District #2 407 TIF Medtronic 378 TIF Scattered Site 379/386 Sheffield Redevelopment 410 Capital Improvement General Government Buildings 411' Capital Improvement Parks 412 EDA Capital Improvement PVVS 414 Capital Improvement Projects 415' Infrastructure Replacement 430 Capital Equipment Replacement 431' Capital Equipment Fire 439 Capital Equipment Cable TV 440 Capital Building Library 450 *Denotes major funds Totals $304,887 ($725,704) (490,518) 882,769 526,400 529,499 732,970 732,292 (2,243) (2,243) 137,905 160,132 19,885 (33,603) (129,160) 483,133 1,527,462 2,991,025 712,729 753,551 703,718 749,933 (417,864) (186,426) 490,521 377,443 4,042,858 4,553,841 694,308 663,478 300,000 200,000 Increase (Decrease) ($1,030,591) (490,518) 882,769 3,099 (678) 22,227 (53,488) 612,293 1,463,563 40,822 46,215 231,438 (113,078) 510,983 (30,830) 300,000 200,000 $9,344,376 $11,938,602 $2,594,226 35 City of Columbia Heights, Minnesota Management Report Capital Project Funds Municipal State Aid (212/402) This fund was established to account for MSA maintenance and construction allotments. For 2002, the City's total allotment was $563,611, of which 25% is allocated for maintenance purposes. For the past three years, the fund balance of this fund consisted of the following: Account 2000 December 31, 2001 2002 $74,522 $71,094 230,365 (796,798) $304,887 ($725,704) Maintenance $59,752 Construction {619,360) Total ($559,608) 36 City of Columbia Heights, Minnesota Management Report Capital Project Funds A summary of 2002 activity is as follows: Revenue: MSA Transfer from 212 Transfer from 402 Reimbursements Total revenue Expenditures: Personal services Supplies Other services and charges Capital outlay Transfers out: Fund 415 - Project 0102 Total expenditures Increase in fund balance Fund balance - January 1 Fund balance - December 31 Maintenance $140,904 352 (35,889) 105,367 20,393 2,450 29,117 56,835 108,795 (3,428) 74,522 $71,094 Construction $2,815,603 (352) 35,889 55,998 2,907,138 34,007 16,661 773,948 3,109,685 3,934,301 (1,027,163) 230,365 ($796,798) Total $2,956,507 55,998 3,012,505 54,400 19,111 803,065 3,109,685 56,835 4,043,096 (1,030,591) 304,887 ($725,704) 37 City of Columbia Heights, Minnesota Management Report Capital Project Funds A summary of active projects in this fund is as follows: Proiect Costs Prior Pro)ect 2002 Years Total 9308 $ $22,259 $22,259 9505 699,153 699,153 9602 1,612 1,612 9818 (1,523) 177,002 175,479 9912 3,931,866 438,598 4,370,464 9920 1,235 9,820 11,055 0010 1,769 1,769 0011 716 716 0012 2,473 5,911 8,384 0105 250 22,760 23,010 Prior Project Funding To Date State Capital Aid Improvement MSA Other Project Total Balance $ $ $ $ 634,285 65,220 (352) 148,470 27,009 3,526,707 49,005 2,175 8,880 $ ($22,259) 699,153 175,479 3,575,712 11,055 (1,612) (794,752) (1,769) (716) (8,384) (23,010) 55,704 Total $3,934,301 $1,379,600 $5,313,901 $4,311,637 $65,220 $35,537 $49,005 $4,461,399 ($796,798) 38 City of Columbia Heights, Minnesota Management Report Capital Project Funds Sheffield Redevelopment (410) A summary of activity for this fund is as follows: Financial sources: Transfer from Parking Ramp Fund Transfer from General Fund Transfer from Community Development Fund (CDBG Funds) Transfer from Tax Increment Bonds (Sheffield) Received from HRA: Tax levy Value of property donated Intergovernmental Sale of property Rental of property Miscellaneous Total financial sources Prior Years 2002 Total $300,000 $ $300,000 18,295 18,295 50,293 50,293 180,743 535,293 716,036 626,113 77,000 703,113 120,000 120,000 69,715 69,715 401,486 401,486 44,634 44,634 18,762 18,762 1,830,041 612,293 2,442,334 Financial uses: Interfund loan interest 199,001 199,001 Project costs (net of real estate valued at $119,600) 1,760,200 1,760,200 Total financial uses 1,959,201 0 1,959,201 Net increase (decrease) in fund balance Fund balance - January 1, 1993 Fund balance (deficit) - December 31, 2002 ($129,160) $612,293 483,133 $483,133 The Office of the State Auditor requires detailed reporting of TIF activity. This fund includes TIF and non-TIF activity. The commingling of TIF and non-TIF monies complicates the TIF reporting process. We recommend the City split this fund into two funds, one fund which would account for TIF activity and another fund which accounts for all other activity. 39 City of Columbia Heights, Minnesota Management Report Capital Project Funds Capital Improvement General Government Buildings (411) A summary of financial activity is as follows: Revenue: Investment income State grant Miscellaneous Transfer fi.om General Fund Transfer fi.om MSA Transfer from Sewer Fund Transfer fi.om Water Fund Transfer fi.om Garage Fund Transfer fi'om Energy Management Fund Total revenue 2001 2002 $13,152 $104,138 10,000 12,005 1,567,757 1,190,052 664 - 3,010 - 3,549 - 60,000 60,500 107,646 1,648,132 1,484,341 Expenditures: Project costs 151,929 20,778 Net increase in fund balance Fund balance - January 1 Fund balance - December 31 1,496,203 1,463,563 31,259 1,527,462 $1,527,462 $2,991,025 During 2001, the City adopted Resolution 2001-84 which authorized the transfer of $1,400,000 from the General Fund to this fund. Pursuant to the resolution, these funds are "dedicated to future improvements to general government buildings." Also, the resolution requires a four-fifths vote to expend any unbudgeted, undesignated fund balance. 4O City of Columbia Heights, Minnesota Management Report Capital Project Funds EDA Capital Improvement PWS (414) This fund was established in 2001 by Resolution 2001-84 to account for monies dedicated for future improvement or replacement of the building. A summary of financed activity is as follows: Revenues; Investment income Transfer from General Fund Total revenues Expenditures Net increase in fund balance Fund balance - January 1 Fund balance - December 31 2001 2002 $3,718 $46,215 700,000 703,718 46,215 703,718 46,215 703,718 $703,718 $749,933 The resolution establishing this fund requires a four-fifths vote to expend any unbudgeted, undesignated fund balance. 41 City of Columbia Minnesota Management Report Heights, Capital Project Funds Capital Improvements PIR (415) A summary of the activity of this fund is as follows: Financial sources: Special assessments Intergovernmental - MSA Contributions from other funds Other Reclassification of prior year costs Total financial sources Financial uses: Transfer to PIR Transfer to Debt Service Fund Project expenditures Total financial uses Increase (decrease) in fund balance Fund balance (deficit) - January 1 Fund balance (deficit) - December 31 2000 2001 2~2 $448,199 $628,222 $597,380 181,000 254,890 953,347 1,161,694 322,320 34,111 237,673 80,774 445,254 1,435,657 2,208,589 1,700,618 23,816 254,029 102,589 70,721 1,729,851 1,814,273 1,398,459 1,983,880 1,940,678 1,469,180 (548,223) 267, 911 231,438 (137,552) (685,775) (417,864) ($685,775) ($417,864) ($186,426) The projects accounted for in this fund are financed by the following sources: · Capital Equipment Replacement Fund · Water Capital Construction Fund · Sewer Capital Construction Fund · General Fund · Special assessments 42 City of Columbia Heights, Minnesota Management Report Capital Project Funds The financing provided by other City funds is basically a cash transfer from those funds. The financing provided by special assessments is not an immediate repayment. Special assessments are extended out over a period of up to fifteen years. The Capital Improvement Projects Fund is therefore required to finance the special assessment receivables until they are collected. The amount of special assessments receivable at December 31, 2002 was $1,186,193. This policy of financing special assessments had created a fund deficit of $186,426 at December 31, 2002. A summary of the active projects in this fund is as follows: proi¢ct 2002 Total 0102 $86,165 $1,369,291 $t,455,456 0201 65 65 0202 1,251,553 31,309 1,282,862 0206 12,135 12,135 0210 7,172 7,172 0250 8,200 8,200 0251 445 445 0302 (319) 319 040l 5,035 319 5,354 0402 18,870 18,870 xxxx 9t138 91431 18t569 Total $1,398,45~ S],410,669 $2,809,128 Project Fundi~ to Date Proioct Costs Water Sewer Stom~ Sewer Prior Infrastmctu~ Capita] Capital Capital General Years AssessmentsOther Replacement Constta~ion Construction Constmctio~Fund $506,273 $273,049 433,823 245,890 12,135 $940,096 $144,380 $188,340 $154,075 $102,840 $86,499 I'roject Funding Exes:ss/ Total {Deficiency) $1,455,456$ (65) 679,713 (603,149) t2,135 (7,172) (8,2OO) (,~5) (5,354) (18,870) $531,074 $144,380 $188,340 $154,075 $102,840 $86,499 ~ t$661,824) 43 City of Columbia Heights, Minnesota Management Report Capital Project Funds The City's finance department currently does not receive project budgets or project financing allocations until a project is closed out. We recommend the City council approve project budgets at the time the projects are approved. We also recommend the City's public works department coordinate with the finance department to facilitate management of improvement projects. Capital Equipment Replacement Fund (431) This fund was established in 1990 by transfers from the General Fund and the Liquor Fund. A summary of financial activity of this fund is as follows: Financial sources: Transfer from General Fund Transfer from Liquor Fund Transfer from Insurance Fund Transfer from Contributed Projects Fund Transfer from State Aid Maintenance Fund Transfer from Police/Fire Contingency Fund Investment income Other Total Financial uses: Capital outlay Fund balance - December 31, 2002 Prior Years 2002 Total $2,306,499 $50,000 $2,356,499 2,070,000 100,000 2,170,000 10,587 10,587 6,500 6,500 4,100 4,100 500,000 238,057 738,057 2,079,346 258,948 2,338,294 44,657 6,090 50,747 $7,021,689 $653,095 $2,978,831 $142,112 7,674,784 3,120,943 $4,553,841 44 City of Columbia Heights, Minnesota Management Report Capital Project Funds The City has prepared long term projections for this fund as a part of the annual budget process. Additionally, the City has established Capital Equipment Replacement Accounts for water, sewer and central garage. We understand the City's current replacement funding method is based on historical cost, which is generally significantly lower than replacement cost. We recommend the City consider changing its funding method to be based on replacement cost. New Funds Effective December 31, 2002, the following funds were established: Capital Equipment - Cable TV (440) Transfer from Cable TV Fund (225) Capital Building - Library (450) Transfer form Library Fund (240) Capital Improvement Development (420) Transfer from General Fund (101) Transfer from Special Projects (226) Transfer from EDA Administration (204) Transfer from HRA (299) $300,000 $200,000 $300,000 330,000 100,000 185,000 $915,000 These funds were established pursuant to Resolution 2003-16 and require a four-fifths vote to expend or transfer any unbudgeted, undesignated funds. 45 City of Columbia Heights, Minnesota Management Report Enterprise Funds ENTERPRISE FUNDS Water Fund Operating Account 601 A graph of the water operations is presented below: 1998 2000 2001 1999 2002 r- $1,600,000 $1,500,000 $1,400,000 $1,300,000 $1,200,000 $1,100,000 $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 , ,gO Water Utility Fund Revenue And Expenses ~aOther Operating Expenses Water Purchases Operating g~venue The City of Columbia Heights purchases its water supply from the City of Minneapolis. However, the City does not have a current contract with the City of Minneapolis. As the above chart demonstrates, expenses of the water utility exceeded the revenue generated by water. Water purchases increased in 2001 as a result of meter problems and the resulting estimates made by the City of Minneapolis. We recommend the City review its rates and make changes as appropriate. 46 City of Columbia Heights, Minnesota Management Report Enterprise Funds Sewer Fund Operating Account 602 A graph of sewer operations is presented below. $1,300,000 $1,200,000 $1,100,000 $1,000,000 $900,000 $800,000 $700,000 $500,000 Szi00,000 $300,000 $200,000 $100,000 $0 998 1999 2000 2001 2002 $1,300,000 $1,200,000 $1,100,000 $] ,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 ,$0 Sewer Utility Fund Revenue and Expenses Other Operating ~ Operating Revenue 47 City of Columbia Heights, Minnesota Management Report Enterprise Funds Refuse Fund 603 A graph of refuse operations is presented below: $1,600,000 $1,500,000 $1,400,000 $t,300,000 $1,200,000 $1,100,000 $1,000,000 $900,000 $800,000 $700,000 $6OO,000 $500,000 $400,000 $300,000 $200,000 $1 00,000 $0 , 1998 1999 20OO ,~j~...~,:...:., ,i 2001 t$1,600,000 $1,500,000 $1,200,000 $1,100,000 $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 , $0 2002 Refuse Utility Operating Expenses Operating Revenue 48 City of Columbia Heights, Minnesota Management Report Enterprise Funds Municipal Liquor Fund 609 An analysis of 2002 activity is as follows: Top Valu Top Valu II Heights Liquor Total Amount Percent Amount Percent Amount Percent Amount Percent Operating revenues $3,034,570 100.00% $2,351,252 100.00% $1,471,485 100.00% $6,857,307 100.00% Cost of goods sold 2,336,230 76.99% 1,810,383 77.00% 1,107,985 75.30% 5,254,598 76.63% Gross margin 698,340 23.01% 540,869 23.00% 363,500 24.70% 1,602,709 23.37% Other operating expenses 539,098 17.77% 379,511 16.14% 187,701 12.76% 1,106,310 16.13% Net income from operations $159,242 5.25% $161,358 6.86% $175,799 l 1.95% $496,399 7.24% Income from operations as a percent of total sales for the past twelve years are scheduled below: Net Income From Operations % of Top Top Heights Total Year Valu Valu II Liquor Total Sales 1989 ............... Site Information ................ $228,857 6.2% 1990 ................ Not Available ................. 261,509 6.2% 1991 $297,378 $ - $97,341 394,719 8.2% 1992 246,739 100,907 347,646 7.2% 1993 148,150 (62,608) 103,476 189,018 3.6% 1994 146,350 5,902 101,483 253,735 4.6% 1995 141,235 37,749 115,595 294,579 5.2% 1996 124,471 80,885 150,649 356,005 5.9% 1997 68,002 92,250 151,023 311,275 5.1% 1998 151,974 123,436 181,752 457,162 7.2% 1999 146,576 130,763 226,116 503,455 7.5% 2000 152,630 105,749 128,389 386,768 6.0% 2001 183,202 108,788 167,587 459,577 6.7% 2002 159,242 161,358 175,799 496,399 7.2% As shown above, liquor operations have been an important revenue source for the City. 49 City of Columbia Heights, Minnesota Management Report Enterprise Funds Comparison With Other Municipal Liquor Stores The Office of the State Auditor (OSA) annually publishes "An Analysis of Minnesota Municipal Liquor Store Operations." The most recent report available is for 2001. The following analysis compares Columbia Heights' liquor operations with those reported in the OSA report. There are seventeen metro area cities that operate off-sale only operations. The City of Columbia Heights ranks fifth in sales among metro area cities behind Richfield, Edina, Lakeville and Eden Prairie. It should be noted that the following comparisons are strictly a comparison of amounts reported. There are a number of factors that affect operating results that are not included in this comparison. These factors include the mix of product sold and philosophy regarding sales techniques such as high volume/lower margin. 50 City of Columbia Heights, Minnesota Management Report Enterprise Funds Gross Margin Analysis Gross margin measures the sales less the direct cost of products sold. A comparison to state averages for Minnesota municipal off-sale operations is as follows: Cost Gross Mar~in State Sales of Sales Amount Percent Average(~) 1996 $6,011,907 $4,774,908 $1,236,999 20.6% 23.1% 1997 6,135,166 4,878,712 1,256,454 20.5% 22.7% 1998 6,367,689 5,009,923 1,357,766 21.3% 23.2% 1999 6,669,376 5,238,023 1,431,353 21.5% 23.6% 2000 6,425,021 5,051,575 1,373,446 21.4% 23.8% 2001 6,796,384 5,267,398 1,528,986 22.4% 24.0% 2002 6,857,307 5,254,598 1,602,709 23.3% Not Available (])Source: Minnesota Office of the State Auditor - Metropolitan Area Off-Sale Operations Operating Expenses Operating expenses for the past several years have been as follows: Percent of Sales Year Amount Cit7 State Av~. 1994 $788,424 14.3% 16.0% 1995 830,817 14.6% 16.8% 1996 880,994 14.7% 16.3% 1997 945,179 15.4% 16.5% 1998 900,604 14.1% 16.1% 1999 927,898 13.9% 16.2% 2000 986,678 15.4% 16.5% 2001 1,069,409 15.7% 16.6% 2002 1,106,310 16.l% N/A 51 City of Columbia Minnesota Management Report Heights, Enterprise Funds The City of Columbia Heights compares favorably with State averages for operating expenses. Net Income from Operations Net income for the past several years is as follows: Amount Percent of Sales State State Year City Average City Average 1994 $253,735 $208,199 1995 294,579 214,942 1996 356,005 257,715 1997 311,275 245,176 1998 457,162 288,945 1999 503,455 320,309 2000 386,768 329,837 2001 459,577 346,884 2002 496,399 Not Available 4.6% 7.2% 5.2% 6.8% 5.9% 7.5% 5.1% 6.9% 7.2% 7.5% 7.5% 7.5% 6.0% 7.2% 6.7% 7.3% 7.2% Not Available 52 City of Columbia Heights, Minnesota Management Report Intemal Service Funds INTERNAL SERVICE FUNDS Internal Service Funds are used to account for the financing on a cost reimbursement basis of goods or services provided by one department to another department within the City. During 2002, the City maintained the following Internal Service Funds: Cash Balance December 31, Fund 2001 2002 Central Garage $122,603 $98,327 Energy Management 106,296 Data Processing 374,905 509,043 Insurance 420,825 567,543 Compensated Absences 657,716 564,153 Total $1,682,345 $1,739,066 53 City of Columbia Heights, Minnesota Management Report Internal Service Funds Compensated Absences Fund 890 This fund accounts for the City's liability for compensated absences payable. Compensated absences consist of accrued vacation leave and unused sick leave payable as severance. A summary of this fund's balance sheet at December 31, 2002 is as follows: Cash and cash equivalents Compensated absences payable $564,153 ~547,495) Net assets $16,658 54 City of Columbia Heights, Minnesota Management Report Federal Single Audit and State Legal Compliance Audit FEDERAL SINGLE AUDIT AND STATE LEGAL COMPLIANCE AUDIT We performed a federal single audit covering federal programs and a State Legal Compliance Audit of the City (including the EDA) and have issued our reports thereon. The Single Audit Report includes findings on EDA programs and can be located in the City's 2002 Comprehensive Annual Financial Report. 55 City of Columbia Heights, Minnesota Management Report Certificate of Achievement CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING The City submits the Comprehensive Annual Financial Report to the Government Finance Officers Association of the United States and Canada (GFOA) for a review. The program is a review of all facets of financial reporting for disclosure, clarity and consistency with national reporting standards. The City received the award for each year since 1990. We commend the City for this achievement. 56 City of Columbia Heights, Minnesota Management Report Internal Control Matters INTERNAL CONTROL MATTERS During our audit for the year ended December 31, 2002, we noted the following internal control matters: Opening Financial Accounts In 2002, the EDA opened a bank account without obtaining approval from the City council. We recommend that the EDA obtains proper documentation and authorization before opening financial accounts. Billing Emergency Water Repairs During our audit, we noted two instances in which the City did not bill the customer who received emergency water repairs. As a result, the City was not reimbursed for the expenses incurred. We recommend that the City establishes a process to communicate when expenses are incurred and then bill the customer accordingly. The following is the status of internal control comments identified during the 2001 audit. Prior Year Comment Status Approval of Wage Increases. The City council approves wage increases by adopting resolutions pertaining to said wage increases. These resolutions refer to a percent increase in wage rather than a specific wage amount. This method does not provide as clear of an audit trail as the specific approved wage. We recommend the resolution also include the authorized wage amount in addition to a percent increase. Approval of wage changes in 2002 included the authorized wage amount. 57 City of Columbia Heights, Minnesota Management Report Intemal Control Matters Bill Payment Process. At times various departments Minimum improvement. Problem area is in recreation. will submit bills for payment and request the check be returned to the department rather than be mailed directly to the vendor. As a result, there is a risk of loss fi.om misappropriation. We recommend the f'mance department mail checks directly to the vendor. NSF Checks. During our audit we noted several instances of multiple NSF checks fi.om the same individual. NSF checks written off during 2001 totaled $10,334. Pa~oll Cycle. Salaried employees are paid on Friday for time accrued through that day. The cut-off for time entry is the Wednesday preceding the pay date. As such, estimates are made for Thursday and Friday. This payroll cycle results in employees receiving a paycheck prior to earning the entire amount and often times require subsequent adjustment to the payroll records for use of vacation and or sick leave. New reporting requirements issued by PERA will further complicate the payroll process. Employee Provided Deferred Compensation In Excess of Council Approved Amounts. Per the "Employee Change of Status Form" dated 12/21/01, the recreation director is receiving an employer contribution to deferred compensation of $1,000 per year. The council approved amount for non-union City positions per Resolution 83-02 is $300 per year on a dollar-for- dollar matching basis. Council Approval of Bills. The City council approves all disbursements. However, the minutes do not include check numbers for the disbursements approved. This results in difficulty in determining if specific approval has been made. We recommend the motion include the series of check numbers approved and a total dollar amount of the approved disbursements with reference to an attached list. No change. No change. In 2002 there was a new resolution to approve $1,000. Council approval of bills now includes check numbers. 58 City of Columbia Heights, Minnesota Management Report Intemal Control Matters ... ':"::".Prior Year Comment Status Improve Recreation Revenue Documentation. We noted the City does not maintain an audit trail regarding recreation revenue. Currently, documentation is not maintained that provides for verifying the completeness of recreation revenue. We suggest the Recreation Department improve cash receipting procedures which would include use of the cash register, require the issuance of a receipt to the customer and require reconciliation of class rosters to receipts. Project Budgets. The Capital Improvements Project Fund (415) accounts for the City's infi'astructure projects (water, sewer, streets). The City's finance department does not receive project budgets or project financing allocations until a project is closed out. We recommend the City council approve projects budgets at the time the projects are approved. We also recommend the City's public works department coordinate with the finance department to facilitate fmancial management of improvement projects. EDA Component Unit. The City's component units are reported using the blended presentation. However, the resolution creating the EDA is worded such that it is possible for the EDA to be treated differently each year depending on the composition of the Board. As long as the Board is composed of City council members, the EDA is treated as a blended component unit. If the composition of the Board consists of members other than the City council, the EDA would be required to be reported using the discrete presentation. This potential for changes in financial statement presentation will increase finance department efforts and audit costs. We recommend the City review the wording of the enabling resolution. If it is the City's intent that the EDA board must be comprised of City council members, the alternative wording that clearly states this would be required. Remains a fmding for 2002. In 2003 the City began to make changes. Same. Sanle. 59 City of Columbia Heights, Minnesota Audit Management Letter New Fraud Standard- SAS 99 NEW FRAUD STANDARD -- SAS 99 Statement on Auditing Standards (SAS) 99, Consideration of Fraud in a Financial Statement Audit, has been issued and will be required for audits of periods beginning on or after December 15, 2002. SAS 99 does not change the auditor's responsibility to obtain reasonable assurance that the financial statements are free of material misstatement, including material misstatement due to fraud. The reason the new SAS was issued was to increase the likelihood that the auditor will detect material misstatement in the financial statements due to fraud by increasing the amount and nature of required procedures. SAS 99 is a comprehensive, far-reaching audit standard which is expected to significantly change the way auditor's approach and perform audits. The bottom line is that SAS 99 expects auditors to perform more work in every audit in both identifying and responding to the risk of material misstatement due to fraud. Implementation of SAS 99 will require additional time to complete an audit. For the City of Columbia Heights, SAS 99 will be required for the audit of the year ending December 31, 2003. 60 City of Columbia Heights, Minnesota Audit Management Letter New Fraud Standard- SAS 99 An overview of SAS 99 is as follows: Information Gathering Phase: A required brainstorming session among the audit team members to discuss the potential for material misstatement due to fraud. An increased emphasis on inquiry as an audit procedure that increases the likelihood of fraud detection. o Required management inquiries, many of which are new. o Required inquiries of"others" within the entity (i.e., non-accounting personnel). · Expanded use of analytical procedures to gather information used to identify risks of the material misstatement due to fraud. The consideration of other information, such as client acceptance and continuance procedures, during the information-gathering phase. Identifying and Assessing Fraud Risks · Required to presume that improper revenue recognition is a fraud risk. · Required tests in response to the risk of management override of controls. o Examining journal entries and other adjustments. o Retrospective review of accounting estimates. o Business rationale for significant unusual transactions. Responding to Assessed Risks: · Assignment of personnel and supervision should be commensurate with the auditor's assessment of the risks of material misstatement due to fraud. · The auditor should consider management's selection and application of significant accounting principles. 61 City of Columbia Heights, Minnesota Audit Management Letter New Fraud Standard- SAS 99 · Auditors are required to incorporate an element of unpredictability in audit procedures from year to year. Evaluating Audit Evidence · Assessing risks of material misstatement due to fraud throughout the audit. · Evaluating whether analytical procedures performed as substantive tests or in the overall review stage of the audit indicate a previously unrecognized risk of material misstatement due to fraud. * Evaluating the risks of material misstatement due to fraud at or near the completion of fieldwork. · Responding to misstatements that may be the result of fraud. Required Auditor Documentation · The discussion among engagement personnel in planning the audit regarding the susceptibility of the entity's financial statements to material misstatement due to fraud, including how and when the discussion occurred, the audit team members who participated, and the subject matter discussed. · The procedures performed to obtain information necessary to identify and assess the risks of material misstatement due to fraud. · Specific risks of material misstatement due to fraud that were identified, and a description of the auditor's response to those risks. · If the auditor has not identified in a particular circumstance, improper revenue recognition as a risk of material misstatement due to fraud, the reasons supporting the auditor's conclusion. · The results of the procedures performed to further address the risk of management override of controls. 62 City of Columbia Heights, Minnesota Audit Management Letter New Fraud Standard - SAS 99 · Other conditions and analytical relationships that caused the auditor to believe that additional auditing procedures or other responses were required and any further responses the auditor concluded were appropriate, to address such risks or other conditions. · The nature of the communications about fraud made to management, the audit committee, and others. Reporting Model - GASB 34 ~ The Governmental Accounting Standards Board (GASB) recently gave approval to issue the "Governmental Financial Reporting Model" which will be the most comprehensive governmental accounting rule ever developed. The new standard will significantly impact internal accounting and external financial reporting of the City. A summary of the key provisions of the exposure draft document is presented below: · Fund Perspective Financial Statements. These financial statements would be similar to current financial statements with modified accrual basis of accounting for governmental funds, accrual basis of accounting for business type activities (formerly Enterprise and Internal Service Funds). However, the GASB introduces a new definition for Fiduciary Funds and the elimination of the account groups. Entity-wide Perspective Financial Statements. These financial statements include full accrual accounting for all activities. The income statement will be replaced by a statement of activities using the net program cost format. Additionally, capital use charges (depreciation) on general fixed assets and infrastructure assets will be required to be reported in the financial statements. 63 City of Columbia Heights, Minnesota Audit Management Letter New Fraud Standard- SAS 99 · Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A). The MD&A letter will be similar to (although will not replace) the current letter of transmittal. Currently, Securities and Exchange Commission (SEC) regulations require private sector registrants to provide a MD&A letter discussing financial conditions, results of operations, etc. The City will be required to implement this new accounting standard for 2003. 64 COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF COLUMBIA HEIGHTS STATE OF MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2002 Prepared By: Finance Department CITY OF COLUMBIA HEIGHTS, MINNESOTA TABLE OF CONTENTS Page No. I. INTRODUCTORY SECTION Principal City Officials Organizational Chart Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting 3 5 7 15 II. FINANCIAL SECTION Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Assets Statement of Activities Fund Financial Statements: Balance Sheet - Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Net Assets - Proprietary Funds Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds Statement of Cash Flows - Proprietary Funds Statement of Fiduciary Net Assets - Fiduciary Funds Notes to Financial Statements Required Supplementary Information: Budgetary Comparison Schedule - General Fund Budgetary Comparison Schedule - Anoka County CDBG Budgetary Comparison Schedule - Note to RSI Statement 1 Statement 2 Statement 3 Statement 4 Statement 5 Statement 6 Statement 7 Statement 8 Statement 9 Statement 10 Statement 11 19 23 39 40 42 44 47 48 5O 52 54 55 90 92 93 CITY OF COLUMBIA HEIGHTS, MINNESOTA TABLE OF CONTENTS Reference Page No. Combining and Individual Fund Statements and Schedules: Combining Balance Sheet - Nonmajor Governmental Funds Combining Schedule of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Governmental Funds Subcombining Balance Sheet - Nonmajor Special Revenue Funds Subcombining Schedule of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue Funds Special Revenue Funds: Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual: Community Development Cable Television Fund Library Fund D.A.R.E. Program Special Projects C.H.A.S.E. Confiscated Property Local Law Enforcement Block Grant COPS MORE 96 Juvenile Justice Grant COPS School Partnership Grant Recreation Contributed Projects Contributed Projects Flex Benefit Fund Police/Fire Contingency Housing and Redevelopment Authority (Component Unit): Combining Balance Sheet Combining Schedule of Revenues, Expenditures and Changes in Fund Balance Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual: Parkview Villa North Parkview Villa South Rental Housing Statement 12 Statement 13 Statement 14 Statement 15 Statement i6 Statement 17 Statement 18 Statement 19 Statement 20 Statement 21 Statement 22 Statement 23 Statement 24 Statement 25 Statement 26 Statement 27 Statement 28 Statement 29 Statement 30 Statement 31 Statement 32 Statement 33 Statement 34 Statement 35 104 105 106 110 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 CITY OF COLUMBIA HEIGHTS, MINNESOTA TABLE OF CONTENTS Reference Page No. Economic Development Authority (Component Unit): Combining Balance Sheet Combining Schedule of Revenues, Expenditures and Changes in Fund Balance Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual: Economic Development Authority Administration Business Revolving Loan Fund Section 8 Subcombining Balance Sheet - Nonmajor Debt Service Funds Subcombining Schedule of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Debt Service Funds Subcombining Balance Sheet - Nonmajor Capital Project Funds Subcombining Schedule of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Capital Project Funds Enterprise Funds: Water Utility Fund: Subcombining Schedule of Net Assets Subcombining Schedule of Revenues, Expenditures and Changes in Fund Net Assets Subcombining Schedule of Cash Flows Sewer Utility Fund: Subcombining Schedule of Net Assets Subcombining Schedule of Revenues, Expenditures and Changes in Fund Net Assets Subcombining Schedule of Cash Flows Refuse Utility Fund: Subcombining Schedule of Net Assets Subcombining Schedule of Revenues, Expenditures and Changes in Fund Net Assets Subcombining Schedule of Cash Flows Storm Sewer Utility Fund: Subcombining Schedule of Net Assets Subcombining Schedule of Revenues, Expenditures and Changes in Fund Net Assets Subcombining Schedule of Cash Flows Statement 36 Statement 37 Statement 38 Statement 39 Statement 40 Statement 41 Statement 42 Statement 43 Statement 44 Statement 45 Statement 46 Statement 47 Statement 48 Statement 49 Statement 50 Statement 51 Statement 52 Statement 53 Statement 54 Statement 55 Statement 56 134 135 136 137 138 141 142 147 1551 156 157 158 159 160 161 162 163 164 165 166 167 CITY OF COLUMBIA HEIGHTS, MINNESOTA TABLE OF CONTENTS Liquor Fund: Subcombining Schedule of Net Assets Subcombining Schedule of Revenues, Expenditures and Changes in Fund Net Assets Subcombining Schedule of Cash Flows Internal Service Funds: Combining Schedule of Net Assets Combining Schedule of Revenues, Expenditures and Changes in Fund Net Assets Combining Schedule of Cash Flows Central Garage Fund: Subcombining Schedule of Net Assets Subcombining Schedule of Revenues, Expenditures and Changes in Fund Net Assets Subcombining Schedule of Cash Flows Energy Management Fund: Subcombining Schedule of Net Assets Subcombining Schedule of Revenues, Expenditures and Changes in Fund Net Assets Subcombining Schedule of Cash Flows Data Processing Fund: Subcombining Schedule of Net Assets Subcombining Schedule of Revenues, Expenditures and Changes in Fund Net Assets Subcombining Schedule of Cash Flows Insurance Fund: Subcombining Schedule of Net Assets Subcombining Schedule of Revenues, Expenditures and Changes in Fund Net Assets Subcombining Schedule of Cash Flows Compensated Absences Fund: Subcombining Schedule of Net Assets Subcombining Schedule of Revenues, Expenditures and Changes in Fund Net Assets Subcombining Schedule of Cash Flows Combining Statement of Fiduciary Net Assets Reference Statement 57 Statement 58 Statement 59 Statement 60 Statement 61 Statement 62 Statement 63 Statement 64 Statement 65 Statement 66 Statement 67 Statement 68 Statement 69 Statement 70 Statement 71 Statement 72 Statement 73 Statement 74 Statement 75 Statement 76 Statement 77 Statement 78 Page No. 168 169 170 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 192 CITY OF COLUMBIA HEIGHTS, MINNESOTA TABLE OF CONTENTS Reference Page No. Capital Assets Used in the Operation of Governmental Funds: Schedule By Source Schedule By Function and Activity Schedule of Changes By Function and Activity SupPlementary Financial Information: Combined Schedule of Bonds Payable IH. STATISTICAL SECTION (UNAUDITED) Government-Wide Information: Government-Wide Expenses By Function Government-Wide Revenues Fund Information: General Governmental Expenditures by Function General Governmental Revenues by Source Tax Levies and Tax Collections Assessed Value, Tax Capacity, and Estimated Actual Value of all Taxable Property Tax Rates City Tax Levy Principal Taxpayers Special Assessment Levies and Collections Computation of Legal Debt Margin Ratio of Net General Obligation Bonded Debt to Assessed Value and Net General Obligation Bonded Debt Per Capita Ratio of Annual Debt Service Expenditures For General Obligation Bonded Debt to Total General Governmental Expenditures Computation of Direct and Overlapping Debt Revenue Bond Coverage: Water, Sewer, and Storm Sewer Funds Property Value and Construction Miscellaneous Statistics Demographic Statistics Statement 79 Statement 80 Statement 81 Exhibit 1 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11 Table 12 Table 13 Table 14 Table 15 Table 16 Table 17 Table 18 194 I95 196 198 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 220 CITY OF COLUMBIA HEIGHTS, MINNESOTA TABLE OF CONTENTS Reference Page IV. SINGLE AUDIT AND OTHER REQUIRED REPORTS SECTION Independent Auditor's Report on Compliance with Minnesota Legal Compliance Audit Guide for Local Governments Independent Auditor's Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditor's Report on Compliance with Requirements Applicable to each Major Program and Internal Control over Compliance in Accordance with OMB Circular A-133 Schedule of Findings and Questioned Costs Schedule of Expenditures of Federal Awards Independent Auditor's Report on Supplementary Information - Financial Data Schedule Financial Data Schedule 223 225 229 235 243 245 247 I. INTRODUCTORY SECTION CITY OF COLUMBIA HEIGHTS, MINNESOTA PRINCIPAL CITY OFFICIALS Year Ended December 31, 2002 Name Mayor and Council Gary L. Peterson Marlaine Szurek Julienne Wyckoff Bruce Nawrocki Robert A. Williams Administration Walter Fehst Linda Magee William EIrite Roxane Smith Larry Scott Jim Hoefl Kevin Hansen Thomas Johnson Charles Thompson Lauren McClanahan Keith Windschitl M. Rebecca Loader Official Title Mayor Councilmember Councilmember Councilmember Councilmember City Manager Assistant to City Manager City Clerk-Treasurer, Finance Director Assistant Finance Director Liquor Operations Manager City Attorney Public Works Director, City Engineer Chief of Police Chief of Fire Superintendent of Public Works Recreation Services Director Librarian City of Columbia Heights Organizational Chart Mayor: Gary L. Peterson tuC°uncilmembers: Bruce Nawrocki Marlaine Szurek Robert Williams lienne Wyckoff l City Manager: Walter Fehst POLICE (Administered by Mayor) Police Chief: Thomas Johnson Secretary II Clerk-Typist II Police Captain Sergeants (3) Corporals (3) Patrol Officers (18) Community Service Officers (4) Support Services Supervisor Secretary II-A (2) FIRE L,. Fire Chief: Charles Thompson · Secretary II (PT) · FT Clerk Typist · Assistant Fire Chief · Firefighters (6) · LIBRARY Library Director: M Rebecca Loader Adult Services Specialist Children's Librarian Clerk-Typist II (2) Library Supervisor (4 PT) Page (8 PT) Library Aide (PT) Library Clerk (PT) PUBLIC WORKS Public Works Director/City Engineer: Kevin Hansen Secretary II-A Assistant City Engineer Engineering Technician IV Engineering Technician 111 Engineering Technician Il (2) Public Works Superintendent Foreman (3) Maintenance III (1) Maintenance II (6) Maintenance I (11 ) Foreman-Vehicle Maintenance Maintenance III - Mechanic Maintenance III - Bodyman/Painter Administrative Assistant-Public Works ADMINISTRATION L Assistant to the City Manager · . Special Projects Coordinator · Administrative Secretary · Accounting Clerk II-Assessing · Clerk Typist II-Administration (PT) · Commissions & Boards: Char[er EDA Police & Fire Civil Service Traffic Telecommunications Planning & Zoning Human Services Park & Recreation Library RECREATION L Recreation Director: Keith Windschitl · Senior Citizen Coordinator · Program Coordinator (2) · Head Custodian · Recreation Clerk/Typist II · Recreation Clerk/Typist II (PT) · Custod!an II (5 PT) · FINANCE Finance Director/City Clerk/Treasurer: William E/rite Secretary II (PT) Assistant Finance Director Accounting Coordinator Payroll/Accounting Clerk Utilities Accounting Clerk II Utilities Accounting Clerk I Accounting Clerk II (2 PT) Switchboard OperatodReceptionist Meter Reader (PT) Liquor Operations Manager Assistant Liquor Operations Manager (6) Retail Clerk Relail Clerk (20 PT) IS Director IS Technician COMMUNITY DEVELOPMENT Acting Community Development Director: Randy Schumacher Community Development Assistant Building Official Planner Community Development Secretary Secretary II-Permits/License Secretary II-Permits/License (PT) *Aisc serves in the capacity of Deputy City Clerk under the City Manager. 5 CITY OF COLUMBIA HEIGHTS Finance Denartment Information Systems Financial Reporting Accounts Payable Utility Billing Payroll 590 40th Avenue N.E., Columbia Heights, MN 55421-3878 Office (763) 706-3600 TDD (763) 706-3692 Fax: (763) 706-3637 June 17, 2003 To the Citizens of the City of Columbia Heights, Mayor, Councilmembers, and City Manager The Comprehensive Annual Financial Report of the City of Columbia Heights for the fiscal year ended December 31, 2002 is hereby submitted. The responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the various funds of the City. All disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. The Comprehensive Annual Financial Report is presented in four sections: Introductory, Financial, Statistical, and Other Required Reports. The Introductory Section includes this transmittal letter, the City's organizational chart, a list of principal officials, and a reproduction of the Certificate of Achievement for the prior year. The Financial Section includes: 1) independent auditor's opinion; 2) management's discussion and analysis; 3) government wide and fund financial statements; 4) notes to the financial statements; 5) required supplemental information; 6) combining and individual fund statements and schedules; and, 7) the supplemental financial information. The Statistical Section includes tables and reports of various economic, social, financial and fiscal data designed to reflect trends and ratios. The City is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act of 1984 and the United States Office of Management and Budget Circular A-133 and a Minnesota Legal Compliance Audit, Information related to this single audit and compliance audit, including the Schedule of Expenditures of Federal Awards, is included in the Single Audit and Other Required Reports Section. Generally accepted accounting principals require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of Columbia Heights' MD&A can be found immediately following the report of the independent auditors. All City funds, departments, commissions and other organizations for which the City of Columbia Heights is financially accountable are presented within the Comprehensive Annual Financial Report. The City provides a full range of services to its citizens. These services include, but are not limited to, police and fire protection; sanitation services; the construction and maintenance of highways, streets, and infrastructure; library; recreational facilities; cultural events; and general administrative services. The Housing and Redevelopment Authority (HRA) Service Is Our Business THE CITY OF COLUMBIA HEIGHTS DOES NOT DISCRIMINATE ON THE BASIS OF DISABILITY IN EMPLOYMENT OR THE PROVISION OF SERVICES EQUAL OPPORT[,~qlTY EMPLOYER and the Economic Development Authority (EDA) are included in the reporting entity as component units of the City of Columbia Heights due to the fact that the governing boards are substantively the same and the City is in a relationship of financial benefit or burden with the authorities. In June, 1999, the Governmental Accounting Standards Board (GASB) issued Statement 34. This standard is the most comprehensive governmental accounting rule ever developed. This standard substantially changes the way state and local governments report their financial activity. The City of Columbia Heights has implemented these changes for 2002. A summary of the most significant changes are as follows: 1. Government-wide financial statements are prepared using full accrual accounting. 2. Basic fund financial statements present major funds instead of fund types. 3. Budgetary comparisons include original and amended budgets. 4. All infrastructure has been capitalized and all capital assets are depreciated. 5. A management discussion and analysis is included as required supplemental information. ECONOMIC CONDITION AND OUTLOOK The City of Columbia Heights, which is a suburb located north of the City of Minneapolis in Anoka County in east-central Minnesota, was originally incorporated as a village in 1898. In 1921, pursuant to the adoption of a home rule City Charter by the qualified voters of the City, a council-manager form of government, was instituted. The City covers an area of 3.52 square miles and has a population of 18,520. As an older, fully developed suburb of the City of Minneapolis, the management and the residents of the City of Columbia Heights are faced with the problems of an aging infrastructure and with increased crime statistics. The City Council and City Management are taking a proactive approach in dealing with these concerns. The City Council has approved several projects related to the redevelopment of the downtown area of Columbia Heights. The projects include the Central Avenue Street, Utility and Streetscape Improvement Project; the Transit Hub; the Master Redevelopment Plan with the "Town Square Concept"; and the Transition Block Redevelopment Project consisting of 22 townhomes and 50 units of senior living facilities. These projects are greatly improving the downtown area of Columbia Heights and will be completed within the next year. The City has a planned Street Rehabilitation Program including water mains and storm sewer improvements. Zone 5 was completed in 2001, Zone 6A completed in 2002, Zone 6B will continue throughout 2003 and Zone 7 will start in 2004. The second phase of Storm Water Management Improvements continued during 2002. The Police Department continued to apply for, and receive, federal and state grants to assist in their community policing efforts. 9 The completion of Medtronic Corporation's expansion has resulted in continuing additional job opportunities in the City. Overall, unemployment in the City has increased slightly due to the economic downturn, but is still well below the national unemployment rate average. The City is actively promoting the expansion and creation of new businesses in the City by providing loans to qualified businesses through the HRA Business Revolving Loan Fund. MAJOR INITIATIVES For the Year The City had many major accomplishments during 2002. The following list is a summary of some of the major initiatives competed throughout the year. 1) The installation of CityView software. This software is a interdepartmental database system. CityView provides automation of important business processes, including special assessments, building permits and inspections, human resources, business licenses, and fire protection. It also allows the updating of property information by using the County database and integrates property data with GIS. 2) The implementation of Governmental Accounting Standards Board Statements 33, 34, 36, 37, 38, 39, and 40. 3) Community policing continued to be a very important part of the police department's mission. Programs such as neighborhood picnics, rental property owners meeting, McGruff House program, graffiti cleanup programs, and sector community policing continue to be important to our residents. 4) The completion of bidding, construction, and contract administration of the Central Avenue Street, Utility and Streetscape Improvement Project. 5) The completion of Zone 6A Street Rehabilitation Project including major watermain improvements and storm sewer improvements along Washington and Madison streets. 6) Additional storm water management improvements continued with the authorization of the acquisition of two single-family homes tbr demolition and site grading in a flood prone area along the 3900 block of Van Buren. This work was made possible by securing a grant through a DNR grant matching 50% of the total acquistion and construction costs. 7) All other flood mitigation projects were finalized in 2002 with over $425,000 of DNR grant funds disbursed to the City. 8) The utility department completed a major cleaning and televising program to analyze problem areas within the sanitary sewer system in preparation for Zone 6A and Zone 6B street rehabiliation areas. 9) The installation of a client-server ptatlbrm for the librm'y's automated circulation system. 10) Contracted with a planning firm to develop the master plan for the redevelopment of the industrial park. 10 11) Purchased property for the redevelopment of 40~ and University. This results in an approximate site of over one acre available for development. 12) Purchased property for the redevelopment of 37'h and Central. Combined, these purchases result in a highly visable, large commercial property along the City's central business route. For the Future The Public Works Department will complete the Central Avenue Street, Utility and Streetscape Improvement Project in 2003. This project will provide a 4.7 million dollar investment along Central Avenue from 37* to 43*~, including the core downtown area. The Master Redevelopment Plan for the downtown of Columbia Heights established a "Town Square Concept". The intent of the town square concept is to create a new mixed-use district on 40~ Avenue west of Central Avenue. This, along with the Central Avenue Street, Utility and Streetscape Improvement Project, will continue to improve the downtown area of Columbia Heights. These plans combine new centralized civic uses, new public open space, commercial development, and a new downtown multi-family residential development into a revitalized center. These projects will be completed in 2003. In addition, Zone 6B Street Rehabilitation is scheduled to start in 2003. This project will include water main and storm sewer improvements as well as the street rehabilitation. CityView software installation will continue throughout 2003, with the anticipated date of completion for the special assessments, building permits, building maintence work orders, and fire module component in 2003. During 2003, the purchase order module will be developed for a 2004 implementation. The redevelopment of the industral park will continue throughout 2003. The planning firm of Hoisington Koegler and developer United Properties are currently creating a redevelopment plan for the park. This plan will be presented to the Council during 2003 and will commence with the redevelopment shortly after. In August of 2002, the City of Columbia Heights approved the site plan, and preliminary and final plats for Parkside Village, a 2.5 acre, 25-unit market-rate townhome project on 51~ Avenue adjacent to Sullivan Lake and park. These units have an initial sale price of $260,000. Financial Information Management of the City of Columbia Heights is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft or misuse and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: 1) the cost of a 11 conu'ol should not exceed the benefits likely to be derived; and 2) the valuation of costs and benefits requires estimates and judgments by management. In addition, the government maintains extensive budgetary conu-ols. The objective of these controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the general fund and certain special revenue funds are included in the annual appropriated budget. The level of budgetary control and the level at which expenditures cannot legally exceed the appropriated amount is at the fund level. As demonstrated by the statements and schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management. Cash Management Cash temporarily idle during the year was invested in demand deposits, certificates of deposit, obligations of the U.S. Treasury, repurchase agreements, and commercial paper. The average yield on investments for the year was 6.77%, which includes both interest revenue of 5.44% and the change in fair market value of 1.34%. The City's investment policy is to minimize credit and market risks while maintaining a competitive yield on its portfolio. Accordingly, deposits were either insured by federal depository insurance or collateralized. Risk Management The City maintains commercial insurance coverage for liability, property, liquor liability, and workers' compensation. The City maintains an internal service fund for insurance. The insurance fund maintains a reserved balance to provide funds for catastrophic losses. This fund charges individual departments for allocation of premiums and for claims incurred. There were no significant claims pending at year-end for the City. OTHER INFORMATION Independent Audit State Statutes require an annual audit by independent certified public accountants. The accounting firm of HLB Tautges Redpath, Ltd. was selected by the City. In addition to meeting the requirements set forth in State Statutes, the audit was also designed to meet the requirements of the Federal Single Audit Act of 1984 and related OMB Circular A-133. The auditor's report on the basic financial statements and combining and individual fund statements and schedules is included in the Financial Section of this report. 12 Awards The Government Finance Officers' Association (GFOA) of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Columbia Heights, Minnesota for its Comprehensive Annual Financial Report for the year ended December 31,2001. The Certificate of Achievement is a prestigious national award that recognizes conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report whose contents conform to program standards. The CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to the GFOA. Acknowledgments The preparation of the Comprehensive Annual Financial Report on a timely basis was made possible by the dedicated service of the entire staff of the Finance Department. Each member of the department has our sincere appreciation for the contributions made in the preparation of this report. In closing, without the leadership and support of the City Manager and City Council, preparation of this report would not have been possible. Sincerely, William J. Elrite Finance Director Roxane M. Smith Assistant Finance Director 13 Certificate of Achievement for Excellence in Financial Reporting Presented to City of Columbia Heights, Minnesota For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 2001 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest star~dards in government accounting and financial reporting. President ~~e~'~ Director 11. FINANCIAL SECTION 17 Tautges Redpath, Ltd. Certified Public Accountants and Consultants INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of the City Council City of Columbia Heights, Minnesota We have audited the accompanying financial statements of the governmental activities, the business type activities, each major fund, and the aggregate remaining fund information of the City of Columbia Heights, Minnesota, as of and for the year ended December 31, 2002 which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City of Columbia Heights, Minnesota's management. Our responsibility is to express an opinion on these basic financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Columbia Heights, Minnesota, as of December 31, 2002, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. As described in note 14, the City of Columbia Heights, Minnesota has implemented a new financial reporting model, as required by the provisions of GASB Statement No. 34, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments, as of December 31, 2002. 4810 White Bear Parkway, White Bear Lake, Minnesota 55110, USA Telephone: 651 426 7000 Fax: 651 426 5004 HLB Tautges Redpath, Ltd. is a member of [] International. A world-wide organization of accounting firms and business advisers. 19 20 In accordance with Government Auditing Standards, we have also issued a report dated April 9, 2003 on our consideration of the City of Columbia Heights, Minnesota's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. The Management's Discussion and Analysis and the budgetary information on pages 23 through 35 and 90 through 93, respectively, are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the information and express no opinion on it. Our audit was made for the purpose of forming opinions on the financial statements that collectively comprise the City of Columbia Heights, Minnesota's basic financial statements. The accompanying schedule of expenditures of federal awards as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non- Profit Organizations, along with the introductory section, combining and individual fund statements and schedules, supplementary financial information and statistical information as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements of the City of Columbia Heights, Minnesota. Such information, except for that portion marked "unaudited," on which we express no opinion, has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects, in relation to the basic financial statements taken as a whole. April 9, 2003 HLB TAUTGES REDPATH, LTD. Certified Public Accountants 21 MANAGEMENT'S DISCUSSION AND ANALYSIS As management of the City of Columbia Heights, we offer readers of the City of Columbia Heights' financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2002. 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 7 through 13 of this report. Prior period comparatives are not included in this analysis as 2002 is the first year for reporting under GASB Statement Number 34. Financial Highlights The assets of the City of Columbia Heights exceeded its liabilities at the close of the most recent fiscal year by $48,770,743 (net assets). Of this amount, $24,563,347 (unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors in accordance with the City's fund designations and fiscal policies. The City's total net assets increased by $6,452,078. As of the close of the current fiscal year, the City of Columbia Heights' governmental funds reported combined ending fund balances of $17,948,302. At the end of the current fiscal year the general fund balance of $3,515,606, included $14,657 reserved and $3,500,949 designated for working capital. The City's total debt decreased by $891,515 during the current fiscal year, from $5,254,721 to $4,363,206. Overview of the Financial Statements The discussion and analysis are intended to serve as an introduction to the City of Columbia Heights' basic financial statements. The City's basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City of Columbia Heights' finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of the City of Columbia Heights' assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City of Columbia Heights is improving or deteriorating. 23 Management's Discussion and Analysis The statement of activities presents information showing how the City's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City of Columbia Heights that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City of Columbia Heights include general government, public safety, public works, culture and recreation and community development. The business-type activities of the City of Columbia Heights include water, sanitary sewer, refuse, storm sewer and liquor operations. The government-wide financial statements can be found on pages 39 through 41 of this report. Fund Financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Columbia Heights, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of Columbia Heights can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spend-able resource, as well as on balances of spend-able 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 change in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. 24 Management's Discussion and Analysis For the current fiscal year ended December 31, 2002, the City of Columbia Heights has seven individual major governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, Anoka County community development block grant fund, municipal state aid street fund, Sheffield tax increment financing fund, capital improvements-general government buildings fund, capital equipment replacement-general government fund, and capital improvements-PIR fund all of which are required to be presented as major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The City of Columbia Heights adopts an annual appropriated budget for its general and some special revenue funds. A budgetary comparison statement has been provided for those funds to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 42 through 47 of this report. Proprietary funds. The City of Columbia Heights maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the governmental-wide financial statements. The City of Columbia Heights uses enterprise funds to account for its water, sanitary sewer, refuse, storm sewer, and liquor operations, lnternal service funds are an accounting device used to accumulate and allocate costs internally among the Cityof Columbia Heights' various functions. The City of Columbia Heights uses internal service funds to account for it's central garage, energy management, data processing, insurance, and compensated absences services. Because the central garage, energy management, insurance and compensated absences services predominately benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. And also, because the data processing services predominately benefit the business-type functions, it has been included within the business-type activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water, sanitary sewer, refuse, storm sewer and liquor operations, all of which are considered to be major funds of the City of Columbia Heights. Conversely, the internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. Management's Discussion and Analysis The basic proprietary fund financial statements can be found on pages 48 through 53 of this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City of Columbia Heights' own program. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statement can be found on page 54 of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 55 through 87 of this report. Other information. The combining statements referred to earlier in connection with non- major governmental funds are presented immediately following the required supplementary information on budgetary comparisons. Combining and individual fund statements and schedules can be found on pages 104 through 192 of this report. Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indictor of a government's financial position. In the case of the City of Columbia Heights, assets exceeded liabilities by $48,770,743 at the close of the most recent fiscal year. The largest portion of the City of Columbia Heights' net assets ($22,828,090 or 48.1 percent) reflects its investment in capital assets (e.g. land, buildings, improvements, furniture and fixtures, machinery and equipment and infrastructure) less any related debt used to acquire those assets that is still outstanding. The City of Columbia Heights uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Columbia Heights' 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. With the first year implementation of Governmental Accounting Standards Board Statement 34, the City is not presenting comparable columns in the various comparisons and analyses for the previous year. Comparative information will be provided in future years. 26 Management's Discussion and Analysis CITY OF COLUMBIA HEIGHTS' NET ASSETS Current and other assets Capital assets Total assets Long-term liabilities outstanding Other liabilities Total liabilities Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets Governmental Business-Type Activities Activities $22,960,131 $8,788,412 18,059,465 7,161,531 41,019,596 15,949,943 2,806,854 1,530,064 2,850,030 1,011,848 5,656,884 2,541,912 Tot~ $31,748,543 25,220,996 56,969,539 4,336,918 3,861,878 8,198,796 17,354,465 5,473,625 22,828,090 1,203,523 175,783 1,379,306 16,804,724 7,758,623 24,563,347 $35,362,712 $13,408,031 $48,770,743 A portion of the of the City of Columbia Heights' net assets represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets ($24,563,347) may be used to meet the City's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City of Columbia Heights is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business-type activities. 27 Management's Discussion and Analysis Governmental activities Governmental activities increased the City of Columbia Heights' net assets by $6,006,494, accounting for 93% of the total growth in net assets. Key elements of this increase are as follows: City of Columbia Heights' Changes in Net Assets Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Property taxes Other taxes Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain on disposal of capital assets Total revenues Governmental Business-Type Acti vi ti es Acti vi ti es Total $1,788,842 $10,917,906 $12,706,748 1,218,659 53,978 1,272,637 4,510,229 130,339 4,640,568 4,341,972 798,446 3,275,417 1,201,447 6,454 375,624 I 1,477,847 17,141,466 4,341,972 798,446 3,275,417 1,577,071 6,454 28,619,313 Expenses: General government Public safety Public works Culture and recreation Community development Interest on long-term debt Water Sewer Refuse Storm sewer Liquor Total expenses 1,915,920 3,920,746 1,659,152 2,018,571 1,679,107 575,712 11,769,208 5,372,258 634,236 6,006,494 29,356,218 $35,362,712 1,561,071 1,058,721 1,271,961 162,499 6,343,775 10,398,027 1,079,820 (634,236) 445,584 12,962,447 $13,408,031 1,915,920 3,920,746 1,659,152 2,018,571 1,679,107 575,712 1,561,071 1,058,721 1,271,961 162,499 6,343,775 22,167,235 6,452,O78 6,452,078 42,318,665 $48,770,743 Increase in net assets before transfers Transfers Increase in net assets Net assets - beginning Net assets - ending 28 Management's Discussion and Analysis Below are specific graphs providing comparisons of the governmental activities revenues and expenditures: Governmental Activities - Revenues Unrestricted Charges for services Grants and investment earnings 10% Operating grants and contributions not 7% restricted to specific contributions ~ 7% programs 19% Other taxes 5% ~ , >~ Capital grants and contributions 27% Property taxes 25% Governmental Activities - Expenses Community development 14% L Interest on long-term debt 5% General government 16% _ - .... i~,i~.. -~:~ Culture and recreation 17% Public works 14% Public safety 34% 29 Management's Discussion and Analysis Business-Type Activities Business-type activities increased net assets by $445,584 accounting for 7% of the City of Columbia Heights' growth in net assets. Below are graphs showing the business-type activities revenue and expense comparisons: Business-Type Activities - Revenues Unrestricted Capital grants and contributions investment earnings 3% 1% Charges for services 96% Liquor 61% Business-Type Activities - Expenses Water 15% Sanitary sewer 10% Refuse 12% Storm sewer 2% 30 Management's Discussion and Analysis Financial Analysis of the Government's Funds As noted earlier, the City of Columbia Heights uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds. The focus of the City of Columbia Heights' governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Columbia Heights' financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. At the end of the current fiscal year, the City of Columbia Heights' governmental funds reported combined ending fund balances of $17,948,302. Approximately 94 percent of this total amount ($16,982,832) constitutes unreserved fund balance. The remainder of the fund balance ($965,470) is reserved because it has already been committed 1) to provide for prepaid items ($18,813), 2) to provide for real estate held for resale ($165,836), 3) for grant restricted program expenditures ($780,821). The general fund is the chief operating fund of the City of Columbia Heights. At the end of the current year, the fund balance decreased in total by $381,770 in 2002. The revenues exceeded the expenditures at year-end by $879,754. The City Council authorized a transfer of funds to the capital improvements - general government buildings fund, thus reducing the fund balance. The Anoka County CDBG fund decreased in total by $38,624 due to the purchase of several development properties during 2002. The municipal state aid street fund decreased by $1,030,591 due to the Central Avenue streetscape project. The Sheffield tax increment financing redevelopment fund decreased by $490,518 due to the separation of the Sheffield capital fund and the Sheffield tax increment financing redevelopment fund. The capital improvements general government buildings fund increased by $1,463,563 due predominately to the transfers from the general fund for future capital expenditures. The capital equipment replacement general government fund increased by $510,983 due partially to investment income and to transfers from the police/tire contingency funds. The capital improvements PIR fund increased by $231,438 due to the funding of closed city projects. The non major special revenue funds decreased by $1,325,641 for 2002 due in part to the transfers to the capital improvements development fund for redevelopment. 31 Management's Discussion and Analysis The debt service funds decreased by $365,280 due to the debt service payments exceeding the tax increment revenues. The capital project funds increased overall by $1,909,360 due to the funding of future capital improvements by transfers from the general and special revenue funds. Proprietary funds. The City of Columbia Heights' proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The unrestricted net assets in the respective proprietary funds are water ($241,345), sanitary sewer $3,771,350, refuse $704,659, storm sewer $198,206 and liquor $2,859,178. The sanitary sewer, storm sewer and liquor funds had increases in net assets in 2002 of $202,455, $139,462 and $412,886 respectively. The water and refuse funds had decreases in net assets of $275,477 and $125,611 respectively. Bud~,etar¥ Hiehlights General Fund Differences between the original budget and the final amended budget are relatively minor ($31,562) and can be briefly summarized as increases allocated to the police department for police protection services provided to entities outside of the City. This increased budget amount was funded out of increases in police charges for services. Capital Asset and Debt Administration Capital assets. The City of Columbia Heights' investment in capital assets for its governmental and business type activities as of December 31, 2002, amounts to $25,220,996 (net of accumulated depreciation). This investment in capital assets includes land, buildings, improvements other than buildings, office furniture and fixtures, machinery and equipment, infrastructure and construction in progress. Major capital asset events during the current fiscal year included the following: Construction continued on the Central Avenue project, construction in progress as of the close of the year had reached $4,370,464. · Zone 5, street rehabilitation was completed and closed in 2002, the total cost was $1,455,456. · Construction on Zone 6, street rehabilitation continued throughout 2002, the construction in progress as of the close of the year had reached $1,282,862. 32 Management's Discussion and Analysis City of Columbia Heights' Capital Assets (Net of Depreciation) Go~mmatal A~ivifies: La~ $3,856,053 $ $ Buildings and m 8,741,782 371,383 Imffo~ts 3,594,858 119,847 Machinery and cq~pmmt 7,158,117 77,044 Infiastxucture 8,182,009 Construction in txcgre~ 2,927,422 Total capital assets 23,350,810 11,109,431 568,274 To~l calmtal asses Business4ype adfivitics Total capital assets - net $ $ 259,358 371,593 24,674 831,730 6,000 1,021254 5,303,029 2,531,231 7,811,638 2,537231 ($773,367) $3,082,686 781,114 10,153,637 (1,108,902) 2,977,396 228,778 253,452 (3,615,878) 4,445,013 9203263 5,699220 {4,488255) 35,814,667 0 17,755,202 16,512,127 0 408,455 834,620 0 6,838,683 11,109,431 159,819 6,977,018 2,537231 (4,488255} 18,059,465 86,169 707,861 10,151,184 135,778 1,242,.562 293,7~ 26,140 254,724 523,522 527,049 782,893 (47,116) 003,94O) (54,764) (230,703) 340,893 660,745 10,570,766 81,014 1,037,999 37,906 12,617,304 0 26,140 5,198,727 0 18,737 7,418,577 0 7,403 $14,257,260 $11,109,431 $167,222 1,305295 782,893 (436.523) 12,729,323 350,328 0 0 5,567,792 954,967 782,893 (436,523) 7,161,531 $7,931,985 $3,320,124 ($4,924,778} $25,220,996 Additional information on the City of Columbia Heights' capital assets can be found in Note 4. 33 Management's Discussion and Analysis Long-term debt. At the end of the current fiscal year, the City of Columbia Heights had total long-term debt outstanding of $4,363,206, a decrease of $891,515 from 2002. $705,000 is for general obligation improvement debt supported in part by special assessments. An additional $2,008,206 of general obligation tax increment debt financed the City's economic development program, and $1,650,000 of general obligation utility revenue bonds financed utility improvements. In addition, there is long-term debt in the amount of $631,574 for compensated absences. City of Columbia Heights' Outstanding Debt General Obligation Improvement Bonds, General Obligation Tax Increment Bonds, Long- Term Notes and Compensated Absences General Obligation Improvement Bonds General Obligation Tax Increment Bonds Revenue Bonds Compensated absences Total Govemmental Business-Type Activities Activities Total $705,000 $ - $705,000 2,008,206 - 2,008,206 1,650,000 1,650,000 571,566 60,008 631,574 $3,284,772 $1,710,008 $4,994,780 The City of Columbia Heights maintains an A1 rating from Moody's. State statute limits the amount of general obligation debt a Minnesota city may issue to 2% of total Estimated Market Value. The current debt limitation for the City of Columbia Heights is $15,506,730. Only $2,355,000 of the City's outstanding debt is counted within the statutory limitation. Additional information on the City of Columbia Heights' long-term debt can be found in note 7 on pages 75-79 of this report. Economic Factors and Next Year's Budgets and Rates The unemployment rate for the City of Columbia Heights is currently 4.4 percent, which is an increase from a rate of 3.4 percent a year ago. This compares to the state's average unemployment rate of 4.4 percent and the national average rate of 5.8 percent. Inflationary trends in the region compare favorably to national trends. All of these factors were considered in preparing the City of Columbia Heights' budget for the 2003 fiscal year. 34 Management's Discussion and Analysis Requests for information. This financial report is designed to provide a general overview of the City of Columbia Heights' 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 City of Columbia Heights- Finance Department, 590 40th Avenue NE, Columbia Heights, Minnesota 55421-3878. 35 BASIC FINANCIAL STATEMENTS 37 CITY OF COLUMBIA HEIGHTS, MINNESOTA STATEMENT OF NET ASSETS December 31, 2002 Statement I Assets Current assets: Cash and cash equivalents Receivables: Accounts (net of allowance for uncollectables) Special assessments Taxes Interest Loans Due from other governmental units lnternal balances Prepayments Inventory, at cost Real estate held for resale Total current assets Noncurrent assets: Due from other governmental units Capital assets: Land Buildings Improvements other than buildings Office furniture and fixtures Machinery and equipment Infrastructure Construction in process Total capital assets Less: accumulated depreciation Total capital assets (net o£ accumulated depreciation) Total noncurrent assets Total assets Liabilities Current liabilities: Accounts payable Accrued salaries and withholdings payable Contracts payable - retained percentage Due to other governmental units Unearned revenue Accrued interest payable Deposits Compensated absences payable - current Bonds payable - current Total current liabilities Noncurrent liabilities: Compensated absences payable - noncurrent Bonds payable - noncurrent Total noncurrent liabilities Total liabilities Net Assets Invested in capital assets, net of related debt Restricted for: Debt service Public safety Culture and recreation Community development Unrestricted Total net assets Primary Government Governmental Business-Type Activities Activities $20,524,203 $5,924,909 111,361 864,343 1,186,193 122,776 210,032 63,896 10,433 811,881 38,521 (505,133) 505,133 31,290 66,359 1,191,527 390,736 Total $26,449,112 975,704 1,186,193 122,776 273,928 10,433 850,402 31,290 1,257,886 390,736 22,960,131 8,588,329 31,548,460 200,083 200,083 2,850,030 1,011,904 3,861,934 571,566 60,008 631,574 2,235,288 1,470,000 3,705,288 2,806,854 1,530,008 4,336,862 5,656,884 2,541,912 8,198,796 17,354,465 6,480,071 23,834,536 175,783 175,783 704,960 704,960 49,487 49,487 449,076 449,076 16,804,724 6,752,177 23,556,901 $35,362,712 $13,408,031 $48,770,743 The notes to the financial statements are an integral part of this statement. 39 1,667,119 464,755 2,131,874 104,673 18,386 123,059 209,887 209,887 142,298 315,611 457,909 28,017 28,017 193,614 27,602 221,216 25,780 3,744 29,524 724 1,806 2,530 477,918 180,000 657,918 35,814,667 12,729,323 48,543,990 gl 7,755,202) (5,567,792) (23,322,994) 18,059,465 7,161,531 25,220,996 18,059,465 7,361,614 25,421,079 41,019,596 15,949,943 56,969,539 3,082,686 340,893 3,423,579 10,153,637 660,745 10,814,382 2,977,396 10,570,766 13,548,162 253,452 81,014 334,466 4,445,013 1,037,999 5,483,012 9,203,263 9,203,263 5,699,220 37,906 5,737,126 CITY OF COLUMBIA HEIGHTS, MINNESOTA STATEMENT OF ACTIVITIES For The Year Ended December 31, 2002 I I Functions/Programs Primary government: Government activities: General government Public safety Public works Culture and recreation Community development Interest on long-term debt Total government activities Business-type activities: Water Sewer Refuse Storm sewer Liquor Total business-type activities Total primary government Expenses $1,915,920 3,920,746 1,659,152 2,018,57l 1,679,107 575,712 11,769,208 1,561,071 1,058,721 1,271,961 162,499 6,343,775 10,398,027 $22,167,235 Charges For Services $594,983 290,465 168,608 233,498 501,288 1,788,842 1,391,669 1,220,936 1,248,982 172,975 6,883,344 10,917,906 $12,706,748 The notes to the financial statements are an integral part of this statement. Statement 2 Program Revenues Net (Expense) Revenue and Changes in Net Assets I1 Operating Capital Primary Government Grants and Grants and Governmental Business-Type Contributions Contributions Activities Activities Total $2,688 $ - 387,828 - 161,384 4,043,856 140,938 525,821 466,373 1,218,659 4,510,229 ($1,318,249) (3,242,453) 2,714,696 (1,644,135) (185,625) (575,712) (4,251,478) 0 ($1,318,249) (3,242,453) 2,714,696 (1,644,135) (185,625) (575,712) (4,251,478) 198 53,780 130,339 (169,402) 162,413 30,801 140,815 539,569 (169,402) 162,413 30,801 140,815 539,569 53,978 130,339 0 704,196 704,196 $1,272,637 $4,640,568 ($4,251,478) $704,196 ($3,547,282) General revenues: Property taxes Tax increment collections Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain (loss) on disposal of capital asset Transfers Total general revenues and transfers Change in net assets Net assets - beginning Net assets - ending $4,341,972 $ 798,446 $4,341,972 798,446 3,275,417 3,275,417 1,201,447 375,624 1,577,071 6,454 6,454 634,236 (634,236) 10,257,972 (258,612) 9,999,360 6,006,494 445,584 6,452,078 29,356,218 12,962,447 42,318,665 $35,362,712 $13,408,031 $48,770,743 The notes to the financial statements are an integral part of this statement. 41 CITY OF COLUMBIA HEIGHTS, MINNESOTA BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2002 ~.~ets Cash and investments Receivables: Accounts Special assessments Taxes Interest Loans Due from other governmental units lnterfund receivable Prepayments Real estate held for resale Total assets Liabilities and Fund Balances Liabilities: Accounts payable Accrued salaries and withholdings payable Contracts payable - retained percentage Due to other governmental units lnterfitnd payable Deferred revenue Deposits . Total liabilities Fund balances: Reserved: Reserved for prepayments Reserved for real estate held Ibr resale Reserved for program expenditures Unreserved, reported in: General fund Special revenue funds Debt service funds Capital projects fund Total fund balances Total liabilities and fimd balance General Fund Anoka County CDBG Municipal State Aid Street Fund $3,167,454 $ - $193,991 11,817 - 49,004 105,368 - 59,086 - 64,111 239,393 226,919 437,580 14,657 224,900 $3,860,073 $464,293 $469,914 $79,980 $ 89,619 97,227 263,710 74,841 224,900 2,800 1,000 $1,038,128 206 155,253 2,031 344,467 489,610 1,195,618 (25,317) 14,657 3,500,949 3,515,606 (25,317) $3,860,073 $464,293 (725,704) (725,704) $469,914 The notes to the financial statements are an integral part of this statement. 42 Statement 3 Capital Capital Sheffield Improvements Equipment Capital Other Total TIF General Govt Replacement Improvements Governmental Governmental Redevelopment Buildings General Govt PIR Fund Funds Funds $585 $2,973,323 $4,510,277 $ - $8,448,550 $19,294, ! 80 - !,186,193 897 - 17,715 44,049 23,177 48,087 16,511 83,525 10,433 258,281 210,136 4,156 165,836 108,908 1,186,193 122,776 204,375 10,433 811,881 647,716 18,813 390,736 $1,482 $2,991,038 $4,554,326 $1,209,370 $9,245,515 $22,796,011 $ $ $485 $ $538,230 2,427 11,027 13 - 53,621 1,000 - 43,040 492,000 - - 155,321 263,685 - - 1,184,427 50,758 - - 21,980 492,000 13 485 1,395,796 929,720 $1,656,823 103,279 209,887 142,298 1,174,716 1,534,926 25,780 4,847,709 4,156 165,836 780,821 (490,518) 2,991,025 4,553,841 (186,426) (490,518) 2,991,025 4,553,841 (186,426) $1,482 $2,991,038 $4,554,326 $1,209,370 380,943 1,187,646 5,796,393 8,315,795 $9,245,515 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds. Internal service funds are used by management to charge the costs of garage, energy management data processing, insurance and compensated absences to individual funds. With the exception of the data processing fund which is a business-type fund, the assets and liabilities of the internal service funds are included in the governmental activities in the statement of net assets. Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore, are not reported in the funds. The notes to the financial statements are an integral part of this statement. 18,813 165,836 780,821 3,500,949 355,626 1,187,646 11,938,611 17,948,302 18,059,465 1,506,909 754,856 (2,906,820) $35,362,712 CITY OF COLUMBIA HEIGHTS, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For The Year Ended December 31, 2002 II General Anoka County Fund CDBG Revenues: Taxes $3,534,854 $ Tax increment collections Special assessments Licenses and permits 277,924 Intergovernmental 3,446,083 383,183 Charges for services 4 ! 4,739 Fines and forfeitures 84,346 Inveslment income: Interest and dividends 278,819 Change in fair value 68,523 Other revenues 18,357 Total revenues 8,123,645 383,183 Expenditures: Current: General government 1,575,505 Public safety 3,380,893 Public works 1,074,477 Culture and recreation 1,213,016 Community development 415,894 Capital outlay: General government Public safety Public works Culture and recreation Community development Debt service: Principal retirement Interest and fiscal charges Miscellaneous Developer incentives Contractual scrviccs _ Total expenditures 7,243,891 415,894 Revenues over (under) expenditures 879,754 (32,711 ) Other financing sources (uses): Transfers in 670,769 Transfers out { 1,932,293 ) (5,913 ) Reclassification of prior years costs - Total other financing sources (uses) ( i ,261,524) (5,913 ) Net change in fund balance (381,770) (38,624) Fund balance - beginning 3,897,376 13,307 Fund balance - ending $3,515,606 ($25,317) Municipal State Aid Street Fund $ 2,956,507 55,998 3,012,505 46,648 3,939,613 3,986,261 (973,756) 36,241 (93,076) (56,835) ( 1,030,59 ! ) 304,887 (5;725,704) The notes to the financial statements are an intregral part of this statement. Statement 4 Sheffield TIF Redevelopment $ 38,692 6,221 Capital Improvements General Govt Buildings Capital Equipment Replacement Genelal Govt $ $ 10,000 Capital Improvements PIR Fund Other Governmental Funds Total Govemmental F~mc[q $ $809,663 $4,344,517 760,524 799,216 597,380 597,380 277,924 254,890 940,108 7,996,992 752,137 1,166,876 84,346 '83,594 207,863 - 394,153 964,429 20,544 51,085 - 96,866 237,018 12,005 6,090 80,774 154,547 327,771 44,913 126,143 265,038 933,044 3,907,998 16,796,469 138 20,778 8,521 54,057 41,871 1,356,588 292,970 448,285 684,674 1,062,488 70,591 26,610 257,425 716,515 530,985 30,237 104,258 66,885 i,876,996 3,829,178 1,162,996 i,897,690 !,478,520 20,778 124,648 5,296,201 26,610 257,425 716,515 530,985 30,237 104,258 66,885 138 20,778 62,578 1,398,459 4,291,923 17,419,922 44,775 105,365 202,460 (465,415) (383,925) (623,453) 1,358,198 388,057 322,320 3,636,964 6,412,549 (535,293) (79,534) (70,721) (3,034,600) (5,751,430) 445,254 445,254 ,-'-- (535,293) 1,358,198 308,523 696,853 602,364 1,106,373 (490,518) 1,463,563 510,983 231,438 218,439 482,920 1,527,462 4,042,858 (417,864) 8,097,356 17,465,382 ~- ($490,518) $2,991,025 $4,553,841 ($186,426) $8,315,795 $17,948,302 The notes to the financial statements are an intregral part of this statement. 45 CITY OF COLUMBIA HEIGHTS, 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, 2002 Statement 5 Amounts reported for governmental activities in the statement of activities (Statement 4) are different because: Net changes in fund balances - total governmental funds (Statement 4) Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. The effect of sales involving capital assets are to decrease net assets Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. This amount is the net effect of these differences in the treatment of long-term debt and related items. Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Internal service funds are used by management to charge the costs of central garage, data processing, insurance, and compensated absences to individual funds. The net revenue of certain activities of internal service funds are reported with governmental activities Change in net assets of governmental activities (Statement 2) $482,920 4,445,788 (6,000) 306,358 716,515 (14,490) 75,403 $6,006,494 The notes to the financial statements are an intregral part of this statement. 47 CITY OF COLUMBIA HEIGHTS, MINNESOTA STATEMENT OF FUND NET ASSETS PROPRIETARY FUNDS December 31, 2002 Assets Current assets: Cash and cash equivalents Receivables: Accounts (net of allowance for uncollectables) Interest Due from other governmental units Interfund receivable Prepayments Inventory, at cost Total current assets Noncurrent assets: Due from other governmental units Capital assets: Land Buildings Improvements other than buildings Office furniture and fixtures Machinery and equipment Construction in process Total capital assets Less: accumulated depreciation Total capital assets (net of accumulated depreciation) Total noncurrent assets Total assets Liabilities Current liabilities: Accounts payable Accrued salaries and withholdings payable Due to other governmental units Due to other funds Accrued interest payable Deposits Compensated absences payable - current Bonds payable - current Total current liabilities Noncurrent liabilities: Compensated absences payable - noncurrent Bonds payable - noncurrent Total noncurrent liabilities Total liabilities Net Assets Invested in capital assets, net of related debt Restricted for debt service Unrestricted Total net assets Water $39,923 283,783 6,668 1,160 678,675 2,864 1,013,073 45,223 447,305 5,550,711 25,259 206,972 6,275,470 (2,291,954) 3,983,516 3,983,516 4,996,589 3,702 3,044 256,999 678,675 14,420 3,744 385 94,032 1,055,001 12,791 767,988 780,779 1,835,780 3,121,496 280,658 (241,345) $3,160,809 Scwcr $2,679,905 263,948 29,389 623,404 3,596,646 200,083 36,586 45,201 4,153,263 40,964 418,383 5 4,694,402 (2,678,294) 2,016,108 2,216,191 5,812,837 4,763 2,734 547 385 3,568 11,997 12,791 29,136 41,927 53,924 1,983,399 4,164 3,771,350 $5,758,913 The notes to the financial statements are an intregral part of this statement. 48 Statement 6 Business-Type Activities - Enterprise Funds Refuse Storm Sewer Liquor Total Enterprise Funds $605,231 $107,676 $1,983,131 $5,415,866 280,375 36,237 864,343 6,772 1,675 19,110 63,614 20,382 14,955 2,024 38,521 1,302,079 912,760 160,543 1,188,663 3,192,928 1,191,527 8,875,950 200,083 Internal Service Funds $1,739,066 2,453 5,939 12,477 66,359 1,826,294 254,724 4,360 340,893 6,000 162,239 660,745 371,383 11,566 774,028 81,198 10,570,766 119,847 14,791 81,014 97,124 289,381 1,011,860 103,183 37,901 37,906 114,690 1,066,653 551,969 12,703,184 594,413 (40,961 ) (53,360) (484,486) (5,549,055) (427,192) 73,729 i,013,293 67,483 7,154,129 167,221 73,729 i,013,293 67,483 7,354,212 167,221 986,489 !,173,836 3,260,411 16,230,162 1,993,515 Total Proprietary Funds $7,154,932 866,796 69,553 38,521 1,302,079 12,477 1,257,886 10,702,244 200,083 340,893 !,032,128 10,690,613 81,014 1,115,043 37,906 13,297,597 (5,976,247) 7,321,350 7,521,433 18,223,677 208,101 169 234,286 69 10,617 58,612 96,404 - 12,635 - - 883 82,400 208,101 191,677 304,398 - - 29,352 - 672,876 0 672,876 29,352 208,101 864,553 333,750 451,021 24,030 475,051 16,464 3,316 19,780 315,611 - 315,611 775,079 775,079 27,602 27,602 3,744 3,744 i,653 877 2,530 180,000 180,000 !,771,174 28,223 1,799,397 54,934 576,640 631,574 1,470,000 1,470,000 1,524,934 576,640 2,101,574 3,296,108 604,863 3,900,971 5,466,223 167,221 5,633,444 175,783 175,783 7,292,048 1,221,431 8,513,479 12,934,054 $1,388,652 $14,322,706 73,729 220,116 67,483 - (109,039) 704,659 198,206 2,859,178 $778,388 $309,283 $2,926,661 Some amounts reported for business-type activities in the statement of net assets are different because certain internal service fund assets and liabilities are included with business-type activities. Net assets of business-type activities 473,977 $13,408,031 The notes to the financial statements are an intregral part of this statement. 49 CITY OF COLUMBIA HEIGHTS, MINNESOTA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS For The Year Ended December 31, 2002 III II II Operating r~venue~.- Charges for services Charges for sales Total operating revenues Operating expenses: Costs of sales, services and goods sold Operating expense Depreciation Total operating expenses Net income (loss) from operations Nonoperating revenues (expenses): Investment income: Interest and dividends Change in fair value Intergovernmental Miscellaneous revenues Interest and fiscal charges Miscellaneous expenses Total nonoperating revenues (expenses) Net income (loss} before transfers Transfers in Transfers out Total transfers Change in net assets Total net assets - beginning, as previously stated Change in accounting principle Total net assets -beginning, as restated Total net assets - ending Water $64,89! 1,326,721 1,391,612 1389,858 ! 61,970 1,55 !,828 (160,216) 31,467 7,733 57 (35,152) 4,105 (156,111) 309,358 (428,724) (1 ! 9,366) (275,477) 3,475,253 (38,967) 3,436,286 $3,160,809 Sewer $1,204,112 1,204,112 950,680 130,073 1,080,753 123,359 138,688 34,083 198 16,824 (I,333) 188,460 311,819 250,965 (360,329) (109,364) 202,455 5,589,809 (33,351) 5,556,458 $5,758,913 The notes to the financial statements are an intregral part of this statement. 50 Statement 7 Business-Type Activities - Enterprise Funds Refuse Storm Sewer $1,247,692 S!72,975 1,247,692 172,975 1,279,462 98,905 11,169 33,988 1,290,631 132,893 (42,939) 40,082 Liquor 6,85~307 6,857,307 5,254,598 !,093,381 12,929 6,360,908 496,399 Total Enterprise Funds $2,689,670 8,184,028 10,873,698 8,973,503 1,093,381 350,129 10,417,013 456,685 Internal Service Funds $820,297 '57,543 877,840 919,142 33,002 46,224 998,368 020,528) 1 Total Proprietary Funds $3,509,967 8,241,571 11,751,538 9,892,645 1,126,383 396,353 11,415,381 336,157 31,956 7,899 90,180 300,190 28,032 ~ 7,854 1,941 22,163 '73,774 6,888 53,780 130,339 184,317 - 1,290 26,037 44,208 3,022 ,-- (30,799) (67,284) (3,939) (3,939) 94,880 109,380 134,441 531,266 37,942 · -, 51,941 149,462 630,840 987,951 (82,586) - 447,410 1,007,733 314,000 (177,552) (457,410) (217,954) (!,641,969) (340,883) ~ (177,552) (10,000) (217,954) (634,236) (26,883) (125,611) [39,462 412,886 353,715 (109,469) 905,521 174,208 2,524,335 12,669,126 1,554,356 (1,522) (4,387) (10,560) (88,787) (56,235) 903,999 169,821 2,513,775 12,580,339 1,498,121 $778,388 $309,283 $2,926,661 12,934,054 $1,388,652 Some amounts reported for business-type activities in the statement of activities are different because the net revenue (expense) of certain internal service funds is reported with business-type activities Net assets of business-type activities 473,977 $13,408,031 328,222 80,662 184,317 47,230 (67,284) (3,939) 569,208 905,365 1,321,733 (1,982,852) (661,119) 244,246 14,223,482 (145,022) 14,078,460 $14,322,706 The notes to the financial statements are an intregral part of this statement. 51 CITY OF COLUMBIA HEIGHTS, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For The Year Ended December 3 l, 2002 I I II I II I I I I II I I Water Cash flows from operating activities: Cash received from customers $1,203,867 Cash received from interfund services provided Cash paid to suppliers for goods and services (847,327) Cash payments to employees for services (248,047) Miscellaneous revenues 57 Miscellaneous expenses Net cash flows from operating activities 108,550 Cash flo~vs from noncapital financing activities: Transfers in 309,358 Transfers out (428,724) Net cash flows from noncapital financing activities (119,366) Cash flows from capital and related financing activities: Acquisition of capital assets (209, 717) Disposition of capital assets 21,376 Principal payments - bonds (91,426) Proceeds of capital grants and contributions Interest and fiscal charges (36,473) Net cash flows from capital and related financing activities (316,240) Cash flows from investing activities: Investment income: Interest and dividends 36,456 Change in fair value 7,733 Net cash flows from investing activities 44,189 Net increase (decrease) in cash and cash equivalents (282,867) Cash and cash equivalents - January I 322,790 Cash and cash equivalents - December 31 $39,923 Reconciliation o f operating income (loss) to net cash flows from operating activities Operating income (loss) ($160,216) Adjustments to reconcilc operating income (loss) to net cash flows from operating activities: Miscellaneous revenues 57 Miscellaneous expenses Depreciation expense 161,970 Changes in assets and liabilities: (Increase) decrease in accounts receivable 1,755 (Increase) decrease in due fi'om other governmental units (1,160) (£ncrease) decrease in intcrfund receivables (188,340) (Increase) decrease in prepayments (Increase) decrease in inventory, at cost 1,844 Increase (decrease) in accounts payable 1,053 Increase {decrease) in accrued salaries and withholdings payable (11,209) Increase (decrease) in contracts payable-retained percentage Increase (decrease) in due to other governmental units 101,280 Increase (decrease) in interfund payables 188,340 Increase (decrease) in compensated absences payable 13,176 Total adjustments 268,766 Net cash flows from operating activities The notes to the financial statements arc an intrebwal part of this statement. $I08,550 52 $1,169,406 (785,058) (158,940) 17,022 242,430 250,965 (360,329) (109,3~4) (209,516) (3,469) (1,383) (214,368) 138,398 34,083 172,481 91,179 2,588,726 $2,679,905 $123,359 17,022 130,073 8,257 28,878 (71,841) 3,986 (10,480) 13,176 119,071 $242,430 Statement 8 Business-Type Enterprise Funds Refuse $1,248,343 (1,172,974) (581) 55,070 Storm Sewer $158,000 20,009 (54,452) Liquor Total Enterprise Funds $7,025,895 $10,805,511 (8,650,541) (1,133,399) 98,186 (3,939) (5,865,191) (671,379) 26,037 (3,939) Total Internal Service Funds $ 915,570 (610,471) (276,006) 3,022 Total Proprietary Funds $10,805,511 915,570 (9,261,012} (1,409,405} 101,208 (3,939} 129,858 123,557 511,423 1,115,818 32,115 1,147,933 - 447,410 1,007,733 314,000 1,321,733 (177,552) (457,410) (217,954) (1,641,969) (340,883) (1,982,852) (177,552) (10,000) (217,954) (634,236) (26,883) (661,119) (124,548) {543,781) (543,781) . 21,376 21,376 (80,105) (175,000) (175,000) 130,339 130,339 130,339 (31,956) (69,812) (69,812) 0 (106,270) 0 (636,878) (636,878) 34,946 12,765 92,306 314,8~1 44,601 359,472 7,854 1,941 22,163 73,774 6,888 80,662 42,800 14,706 114,469 388,645 51,489 440,134 (4,894) 21,993 407,938 233,349 56,721 290,070 610,125 85,683 1,575,193 5,182,517 1,682,345 6,864,862 $605,231 $107,676 $1,983,131 $5,415,866 $1,739,066 57,154,932 ($42,939) ' $40,082 $496,399 $456,685 ($120,528) $336,157 55,070 11,169 3,271 (2,620) 105,907 172,797 $129,858 33,988 26,037 98,186 (3,939) (3,939) 12,929 350,129 (20) 13,263 (14,955) (412) 9,731 169,000 (91,181) (286,346) (284,502) (I,156) 106,708 216,498 3,022 101,208 (3,939) 46,224 396,353 178 13,441 9,731 (91,181) 71,799 71,799 (10,249) (294,751) 1,675 218,173 57 (30,013) (51,645) 37,696 (13,949) (9,175) 92,105 65,561 253,901 30,235 56,587 83,475 15,024 659,133 $123,557 $511,423 $1,115,818 The notes m thc financialstatemcntsam anintr¢gralpartofthisstatcment. 53 2,298 92,105 253,901 58,885 152,643 811,776 $32,115 $1,147,933 CITY OF COLUMBIA HEIGHTS, MINNESOTA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS December 31, 2002 Statement 9 II Assets Cash and investments Total assets Liabilities Liabilities: Accounts payable Due to other governmental units Deposits Other liabilities Total liabilities Total Agency $36,854 36,854 21,136 9,777 4,350 1,591 $36,854 The notes to the financial statements are an intregral part of this statement. 54 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Columbia Heights was incorporated in 1898. The City is governed by a Council composed of an elected mayor and four council members. The Council exercises legislative authority and determines all matters of policy. The Manager, who is appointed by the Council, is responsible for the proper administration of all affairs relating to the City. The financial statements of the City of Columbia Heights have been prepared in conformity with generally accepted accounting principles as applied to governmental units by the Governmental Accounting Standards Board (GASB). The following is a summary of the significant policies. A. FINANCIAL REPORTING ENTITY The component units discussed below are included in the City's reporting entity because of the significance of their operational or financial relationships with the City. The City of Columbia Heights has two component units - the Housing and Redevelopment Authority (HRA) and the Economic Development Authority (EDA). The HRA and the EDA are considered component units because the governing boards are substantively the same as that of the City and because the City is in a relationship of financial benefit or burden with each of the entities. The financial position and results of operations of the HRA and the EDA component units are presented using the blended method. Blended component units, although legally separate entities, are, in substance, part of the City's operations and as such are reported as Special Revenue Funds and Capital Project Funds. The component units include Governmental Funds using the modified accrual basis of accounting. Separate financial statements for the HRA and EDA are not prepared. B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS The government-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-O,pe activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported instead as general revenues. 55 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2002 Ce Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers all revenues, except reimbursement grants, to be available if they are collected within 60 days of the end of the current fiscal period. Reimbursement grants are considered available if they are collected within one year of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, special assessments, intergovernmental revenues, charges for services and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. Ail other revenue items are considered to be measurable and available only when cash is received by the government. The government reports the following major governmental funds: The general.fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Anoka Count. CDBG fund was established to account for the revenues and expenditures associated with federal community development block grants and HOME funds. The municipal state aid street fund is maintained according to State Statue to account for maintenance and construction of streets of municipal state aid systems. 56 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 The Sheffield tax increment financing redevelopment fund was established to separate tax increment collections funding the redevelopment of the area of the City identified as Sheffield neighborhood. The capital improvements - general government buildings fund was established to account for improvements to municipal buildings including the library, municipal garage and city hall. The capital equipment replacement - general government fimd was established to account for the replacement of capital assets as needed. The capital improvement - PIRfund was established to account for projects that will be fully assessed to the affected properties. The govemment reports the following major proprietary funds: The water fund accounts for revenue and expenses associated with water services to area residents. The sewerfitnd accounts for revenues and expenses associated with sewer disposal within the City. The refuse fund accounts for revenues and expenses associated with organized collection of refuse and recycling within the City. The storm sewer fund accounts for revenues and expenses associated with storm water disposal. The liquorfitnd accounts for revenues and expenses associated with the operation of three off-sale liquor stores. Additionally, the government reports the following fund types: Internal service funds account for central garage, energy management, data processing, insurance, and compensated absences services provided to other departments of the government on a cost reimbursement basis. Agency - The pernfft surcharge agency fund is used to account for SAC charges and surcharges collected for and remitted to the State of Minnesota. The escrow agency fund accounts for payroll related fees collected for other government agencies. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary-fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private- 57 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private-sector guidance. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are transactions that would be treated as revenues, expenditures or expenses if they involved external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City of Columbia Heights. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the water, sewer, refuse, storm sewer and liquor operations enterprise funds and of the 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. Ali revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestricted resources as they are needed. The City does not use encumbrance accounting. D. BUDGETARY DATA The City Manager submits to the City Council a proposed operating budget for the fiscal year commencing on January I of the following year. At least one special Council meeting is conducted to obtain public comments as required by the State Truth in Taxation Law. The City Council annually adopts budgets prior to January 1 for the General and certain Special Revenue Funds. The budgets are prepared by fund, function, and activity. The budgets are adopted on a basis consistent with generally accepted accounting principles and all appropriations lapse at the end of the budget year to the extent that they have not been expended. Total expenditures appropriated in the budget resolution may not legally exceed the estimated revenues available from various sources. Formal budgetary integration is employed as a management control device during the year. Budget revisions between functions or activities may be made by the City Manager. Budget revisions at the fund level are authorized by the City Council in accordance with the City Charter 58 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2002 at the request of the City Manager. The legal level of budgetary control is therefore at the fund level. The City does not use encumbrance accounting. E. CASH AND INVESTMENTS Cash balances from all funds of the City are pooled and invested to the extent available in authorized investments. Investments are stated at fair value, based upon quoted market prices. Investment income is allocated to the individual funds on the basis of applicable cash balance participation by each fund using an average of monthly beginning cash and investment balances. The City provides temporary advances to funds that have insufficient cash balances by means of an advance from another fund shown as interfund receivables in the advancing fund, and an interfund payable in the fund with the deficit, until adequate resources are received. The interfund balances are eliminated on the government-wide financial statements. F. RECEIVABLES AND PAYABLES During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. Short-term interfund loans are classified as "interfund receivables/payables." All short-term interfund receivables and payables at December 31,2002 are planned to be eliminated in 2003. Long-term interfund loans are classified as "interfund loan receivable/payable." Any residual balances outstanding between the governmental activities and business4ype activities are reported in the government-wide financial statements as "internal balances." Property taxes and special assessments have been reported net of estimated uncollectible accounts. (See Note 1G and H) Because utility bills are considered liens on property, no estimated uncollectible amounts are established. Uncollectible amounts are not material for other receivables and have not been reported. G. PROPERTY TAX REVENUE RECOGNITION The City Council annually adopts a tax levy and certifies it to the County in December (levy/assessment date) of each year for collection in the following year. The County is responsible for billing and collecting all property taxes for itself, the City, the local School District and other taxing authorities. Such taxes become a lien on January I and are recorded as receivables by the City at that date. Real property taxes are payable (by property owners) on May 15 and October 15 of each calendar year. Personal property taxes are payable by taxpayers on February 28 and June 30 of each year. These taxes are collected by the County and remitted to the City on or before July 7 and December 2 of the same year. Delinquent collections for November and December are received the following January. The City has no ability to enforce payment of property taxes by property owners. The County possesses this authority. 59 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 GOVERNMENT-WIDE FINANCIAL STATEMENTS The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible property taxes are not material and have not been reported. GOVERNMENTAL FUND FINANCIAL STATEMENTS The City recognizes property tax revenue when it becomes both measurable and available to finance expenditures of the current period. In practice, current and delinquent taxes and State credits received by the City in July, December and January are recognized as revenue for the current year. Taxes collected by the County by December 31 (remitted to the City the following January) and taxes and credits not received at the year end are classified as delinquent and due from County taxes receivable. The portion of delinquent taxes not collected by the City in January are fully offset by deferred revenue because they are not available to finance current expenditures. H. SPECIAL ASSESSMENT REVENUE RECOGNITION Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement projects in accordance with state statutes. These assessments are collectible by the City over a term of years usually consistent with the term of the related bond issue. Property owners are allowed to (and often do) prepay future installments without interest or prepayment penalties. Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale. Proceeds of sales from tax forfeit properties are allocated first to the County's costs of administering all tax forfeit properties. Pursuant to state statutes, a property shall be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or seasonal recreational land, in which event the property is subject to such sale after five years. GOVERNMENT-WIDE FINANCIAL STATEMENTS The City recognizes special assessment revenue in the period that the assessment roll was adopted by the City Council. Uncollectible special assessments are not material and have not been reported. GOVERNMENTAL FUND FINANCIAL STATEMENTS Revenue from special assessments is recognized by the City when it becomes measurable and available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by the City are recognized as revenue for the current year. Special assessments that are collected by the County by December 31 (remitted to the City the following January) are also recognized as revenue for the current year. All remaining delinquent, deferred 60 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 and special deferred assessments receivable in govemmental funding are completely offset by deferred revenues. INVENTORIES GOVERNMENTAL FUNDS The original cost of materials and supplies has been recorded as expenditures at the time of purchase. These funds do not maintain material amounts of inventories. Real estate held for resale is valued at the lower of cost or market. PROPRIETARY FUNDS Inventories of the Proprietary Funds are stated at cost, which approximates market, using the first- in, first-out (FIFO) method. Jo PREPAID ITEMS Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. K. CAPITAL ASSETS Capital assets, which include land, buildings, improvements, office furniture and fixtures, machinery and equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. For the year ended December 31, 2002, no interest was capitalized in connection with construction in progress. 61 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 Property, plant, and equipment of the primary government, as well as the component units, is depreciated using the straight line method over the following estimated useful lives: Capital Assets Buildings and structures Machinery and equipment Furniture and fixtures Other park improvements Streets Distribution and collection systems 20 - 50 years 3 - 10 years 5 - 10 years 20 - 50 years 20 - 50 years 20 - 60 years L. COMPENSATED ABSENCES It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All vacation pay and one-third of sick pay is accrued when incurred in the government- wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. In accordance with the provisions of Statement of Government Accounting Standards No. 16, Accounting for Compensated Absences, no liability is recorded for nonvesting accumulating rights to receive sick pay benefits. However, a liability is recognized for that portion of accumulating sick leave benefits that is vested as severance pay. M. LONG-TERM OBLIGATIONS In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, am immaterial and are expen~d 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. 62 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 N. FUND EQUITY In the fund financial statements, governmental funds report reservations of fund balance for amounts not available for appropriation or legally segregated for a specific future use. Designated fund balances represent tentative plans for future use of financial resources. O. INTERFUND TRANSACTIONS Interfund services provided and used are accounted for as revenues, 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. Interfund loans are reported as an interfund loan receivable or payable which offsets the movement of cash between funds. All other interfund transactions are reported as transfers. P. USE OF ESTIMATES The preparation of financial statements in accordance with generally accepted accounting Principles (GAAP) requires management to make estimates that affect amounts reported in the financial statements during the reporting period. Actual results could differ from such estimates. Qo RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS 1. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND BALANCE SHEET AND THE GOVERNMENT-WIDE STATEMENT OF NET ASSETS The governmental fund balance sheet includes a reconciliation betweenfimd balance - total governmental fitnds and net assets - governmental activities as reported in the government- wide statement of net assets. One element of that reconciliation explains that "long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds." The details of this ($2,906,820) difference are as follows: Bonds payable Accrued interest payable ($2,713,206) (193,614) Net adjustment to reduce fund balance - total governmental funds to arrive at net assets -governmental activities. ($2,906,820) 63 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 2. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES AND THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances - total governmental funds and changes in net assets of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that "Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense." The details of this $4,445,788 difference are as follows: Capital outlay Depreciation expense $5,280,407 (834,619) Net adjustment to increase net changes in fund balance - total governmental funds to arrive at changes in net assets of governmental activities. $4,445,788 Another element of that reconciliation states, "Revenues on the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds." The details of this $306,358 difference are as follows: General property taxes deferred revenue: At December 31,2001 ($79,683) At December 31,2002 77,137 Tax increment taxes deferred revenue: At December 31,2001 (10,781 ) At December 31,2002 10,012 Special assessments deferred revenue: At December 31,2001 (818,444) At December 31,2002 1,184,427 Loans receivable - deferred revenue: At December 31,2001 (22,104) At December 31, 2002 10,433 Real estate held for resale - deferred revenue: At December 3 I, 2001 (269,539) At December 31,2002 224,900 Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities. $306,358 64 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 Another element of that reconciliation states that "the issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the long-term debt consumes the current financial resources of governmental funds." Neither transaction, however, has any effect on net assets. The details of this $716,515 difference are as follows: Principal repayments: General obligation debt - tax increment General obligation debt - improvement Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities. $611,515 105,000 $716,515 R. STATEMENT OF CASH FLOWS For purposes of the Statement of Cash Flows, the City considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents. All of the Proprietary Funds' equity in the City-wide cash and investment management pool is considered to be cash equivalents. 65 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2002 Note 2 DEPOSITS AND INVESTMENTS The City maintains a cash and investment pool that is available for use by all funds of the City. Each fund type's portion of this pool is displayed on the combined balance sheet as "Total Cash and Investments." An indication of the level of risk assumed by the City at year-end is categorized as follows for the City's cash and investments. DEPOSITS In accordance with Minnesota Statutes, the City maintains deposits at depository banks authorized by the City Council. Minnesota Statutes require that all 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 (140% in the case of mortgage-backed collateral). Authorized collateral includes the legal investments described below, as well as certain first mortgage notes, and certain other state or local government obligations. Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City or in a financial institution other than that furnishing the collateral. Deposits include checking accounts, savings accounts, and certificates of deposit. At December 31,2002, the book balance of the City's deposits was $1,977,240 and the bank balance was $2,441,509. The entire bank balance was insured or collateralized by securities held by the City's agent in the City's name. INVESTMENTS The City may also invest idle funds as authorized by Minnesota Statutes as follows: direct obligations or obligations guaranteed by the United States or its agencies, its instrumentalities, or organizations created by an act of congress, excluding mortgage-backed securities defined as high risk; shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities described above, general obligation tax-exempt securities, or repurchase or reverse repurchase agreements; general obligations of the State of Minnesota or any of its municipalities; bankers' acceptances of United States' banks eligible for purchase by the Federal Reserve System; commercial paper issued by United States' corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less; repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker-dealers; and future contracts sold under authority of Minnesota Statutes Section 471.56, Subdivision 5. As allowed by authorized investment laws, a portion of the City's investment portfolio is invested in collateralized mortgage obligations which are a form of "derivative" investments. Essentially, these investments can be described as having a variable rate with a guaranteed return of principal. The City invests in these investments for purposes of portfolio diversification. CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 The City's investments are categorized to give an indication of the level of custodial credit risk assumed at year-end. Category 1 includes investments that are insured or registered or for which the securities are held by the City or its agent in the City's name. Category 2 includes uninsured and unregistered investments for which the securities are held by the counterparty's trust department or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counterparty or by its trust department or agent but not in the City's name. Investment balances at December 31, 2002 are as follows: U.S. Government Securities (including securities insured by the U. S. Government) Money Market Fund Total investments Deposits Cash on hand Total cash and investments Custodial Credit Risk Category I 2 3 $19,123,525 $ - $ Carrying Amount At Fair Value 19,123,525 5,379,001 24,502,526 1,977,240 6,200 $26,485,966 67 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 Note 3 RECEIVABLES Significant receivables balances not expected to be collected within one year of December 31,2002 are as Major Funds Capital Improvement Nonmajor General PIR Fund Sewer Funds Total $ $916,673 $ $ $916,673 49,863 1,530 51,393 6,671 6,67 ! 200,083 200,083 follows: Special assessments receivable Delinquent property taxes Delinquent tax increment Due from other governmental units Total $49,863 $916,673 $200,083 $8,201 $1,174.820 INTERCEPTOR ACQUISITION CONTRACT RECEIVABLE As of January 1, 1996, the Metropolitan Council (MCES) assumed ownership of an existing interceptor pursuant to an agreement with the City of Hilltop regarding usage of interceptors owned and maintained by the City of Columbia Heights. The MCES acquired the interceptor at a cost of $330,413.72. This amount is being amortized through current value payments from MCES over a 15-year period with interest at 4%. As of December 31, 2002, a balance of $200,083 remained to be collected over the next eight years. This receivable is presented as due from other governmental units in the Sewer Utility Fund. Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows: Delinquent property taxes receivable (general fund) Delinquent property taxes receivable (nonmajor funds) Delinquent tax increment (nonmajor funds) Delinquent special assessments (capital improvements - PIR fund) Special assessments not yet due (capital improvements - PIR fund) Loans receivable (nonmajor funds) Grant drawdowns prior to meeting all eligibility requirements (nonmajor funds) Rental fees received but unearned (nonmajor funds) Real estate held fi.om resale - unearned (Anoka County CDBG fund) Total deferred/unearned revenue for governmental funds $74,841 2,296 10,012 110,567 1,073,860 10,433 Unearned 17,048 10,969 224,900 $1,506,909 $28,017 68 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 Note 4 CAPITAL ASSETS Capital asset activity for the year ended December 31,2002, as previously reported is as follows: Governmental Activities: Restated * January 1. 2002 Internal Beginning Infrastructure/ As Service Used Ending Primary Government Balance CIP Restated Primarily Additions Deletions Adjuslments Balance Governmental Activities: ~2~ipital assets - not dc'pre~iated Land $3.856.053 $ $3.856.053 $ $ $ ($773.367) $3.082.686 Eonsu'uction in progress 2,927,422 2.927.422 5.303,029 2,531,231 5,699.220 Total capital assets not being depreciated 3.856.053 2.927.422 6.783.475 5.303.029 2.531.231 (773.367) 8.781.906 Capital assets - being depreciated Buildings and su'uctmes 8.741.782 8,741,782 371.383 259.358 781,114 10.153,637 Improvements 3.594.858 3,594.858 119,847 371,593 (1.108.902) 2.977,396 Office furniture and fixtures 24.674 228.778 253.452 Machinery and equipmem 7.158.117 7.158.117 77.044 831.730 6,000 (3.615.878) 4.445.013 lnfraslrncture 8,182.069 8.182.009 1.021.254 9.203.263 Total capilal asse~s being deprecialed 19.494,757 8.182.009 27,676.766 568.274 2.508,609 6.000 (3.714,888) 27.032.761 Less accumulated depreciation for: iluildings and strncmres 7,935.005 7.935,005 296.888 86.391 8.318,284 Improvemants 1,762~977 1,762,977 56,767 40.831 1.860,575 Office furniture and fixtures 151.327 151 327 14,920 28,044 194.291 Machinery and equipmen! 1,949,091 1.949,091 39,880 305.405 2,294,376 Infraslrncture 4.713.727 4.713.727 373.949 5.087.676 Accumulated depreciation 16.512.127 0 44.188.893 408.455 834.620 0 0 17.755.202 Govenunental acitivities capikal asse~s -net 6.838.683 I 1.109.431 (9.728.652) 159.819 6.977.018 2.537~231 (4.488,255) 18,059.465 Depreciation expense charged to functions/programs of the primary government - governmental activities are as follows: Governmental activities: General government Public safety Public works Culture and recreation Community development Total governmental deprecation expense $ 66,9O8 124,039 519,132 90,433 34,107 $834,619 69 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 Business-type activities: Beginning Business-Type Actix]lies: Balance Capital assets - not depreciated Land $86.169 Constnlction in progress 293.750 Restated * January 1, 2002 Internal Infrastructure/ As Service Used Ending CIP Restated Primarily Additions Deletions Ad)tmtments Balance $0 $86,169 $0 $254324 $0 $0 $340,893 293.750 527,049 782,893 37.906 Total capital assets not being depreciated 379,919 Capital assets - being depreciated Buildings and structures 707,86! Improvements 10.15 I. 184 Office furniture and £t~mres 135.778 Machinery and equipment 1,242,562 379,919 781.773 782.893 378,799 707.861 (47,116) 660,745 10,151,184 523,522 (103,940) 10,570,766 135,778 (54.764) 81,014 1.242,562 26.140 (230,703) 1,037.999 12,237,385 0 12,237.385 26,140 523.522 0 (436.523) 12.350,524 Total capital assets being depreciated l~ss accumulated depreciation for: Buildings 'and structures 396,660 396.660 26,656 423.316 Improven~.nts 4.052,041 4,052,041 269,771 4,321,812 Office furniture and fiXlures 81.015 81,015 81,015 Machinery and equipment 669,011 669,011 18,737 53,901 74 i,649 Accundated depreciation 5.198.727 0 5.198.727 18.737 350,328 0 0 5.567,792 Business-type acitivities capital assels -net 7,418,577 0 7,418.577 7.403 954,967 782,893 (436.523) 7.161,531 Total capital assecq - net $14,257,260 $11,109,431 ($2,310,075) $167,222 $7.931,985 $3.320,124 ($4,924,778) $25,220,996 Depreciation expense was charged to functions/programs of the primary government - business-type activities are as follows: · Business-type activities: Water $161,970 Sewer 130,073 Refuse 11,169 Storm sewer 33,988 Liquor 12,929 Total business-type depreciation expense $350,129 7O CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 Note 5 INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS Individual fund interfund receivable and payable balances at December 31, 2002 are as follows: Fund Receivable Payable "" General Fund $437,580 EDA: Anoka County CDBG Sheffield TIF ,...- PIR Fund Water 678,675 Sewer 623,404 Storm Sewer ~ Nonmajor Funds 232,003 Total $1,971,662 $ 263,710 492,000 155,321 678,675 96,404 285,552 $1,971,662 Interfund Transfers: Cv_neval $ Atr~ Ctx~ty CDBG 5,913 Mmidgal .n,~e aid s~et fund S~effidd T[F n~de~e~ Ca~m e~ip~wt re0~enent gert gt ~,534 Vv~er 74,.~6 Se~r 74,364 Refilse 132~552 N~najor g~nm~tal ~ 101349 Internal sa'vice funds 138,737 Total ,~670,769 Stn~ Irrgr Reixlacem lrrlx~e Fund Gen Coy Gen PIR Ttral $ $1,1~,062 $50,000 3(x241 ~x835 168,146 .~9358 $ $ $555,741 $50,000 240,96,5 10, fl00 447,410 ~5.293 70,721 $1,93Z293 5,913 93,076 .535,293 428.724 360329 1T/552 457A10 217.954 340,883 $36,241 $1,3~1,198 $388,057 $322,_330 ~09~358 $250,965 $447,410 $3,636,96~ $314,000 $7,734,282 71 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2002 Major Funds: General Fund Special Revenue Funds: EDA: Anoka County CDBG Capital Projects Funds: Sheffield TIF PIR Fund Enterprise Funds: Water Utility Water Construction Capital Equipment Replacement-Ware Water Debt Service Fund Sewer Utility Sewer Construction Storm Sewer Debt Service Nonmajor Funds: Special Revenue Funds: HRA: Rental Housing Cable TV Debt Service Funds: Tax Increment Bonds Scatter Site Housing TIF MURP Capital Projects Funds: TIF Dislxict #2 Capital Improvement Projects Infrastucture Replacement Internal Service Funds Governmental internal service funds Business-type internal service funds lnterfund Receivables $437,580 63,676 321,943 293,056 96,404 527,000 52,572 157,564 21,867 $1,971,662 Interfund Payables $ 263,710 492,000 155,321 678,675 96,404 144,800 29,070 35,000 52.572 2,243 21,867 $1,971,662 72 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 lnterfund transfers: General Local Law Entbreement Block General Juvenile Justice Grant ,.... General Capital Improvements -PIR General Capital Improvements-General General Capital Improvement Der General Capital Eq Replacement-General General Data Processing ~ General Community Development Community Development General Fund State Aid State Aid State Aid Capital Improvements -PIR ~ Cable Television General Fund Cable Television Capital Eq Replacement -Cable Cable Television Data Processing Special Projects Capital Improvement Der Library General Fund "" Library Capital Building - Libravj Tax Increment Bonds Tax Increment Refunding 1991 Tax Increment Bonds Tax Increment Capital 1990 Sheffield Debt Service Sheffield Redevelopment m-- Housing TIF Scatter Capital Improvement PIR Housing TIF Scatter HRA Housing TIF Scatter EDA-Administration State Aid State Aid PIR GO Improvement Bond t999A '"-' Infrastructure Fund Capital Improvements -PIR Capital Eq Replacement General Fund Water Utility General Fund Water Utility Capital Eq Replacement-Water ,-.-. Water Utility Data Processing Water Utility Water Debt Service . Sewer Utility Capital Eq Replacement-Sewer Sewer Utility General Fund Sewer Utility Data Processing Sewer Utility Sewer Debt Service Refuse Utility General Fund Refuse Utility Data Processing Refuse Utility General Fund ,.-- Storm Sewer Utihty Storm Sewer Debt Sen,ice Storm Sewer Utility Sewer Utility ~ Storm Sewer Utility Capital Eq Replacement-sewer Storm Sewer Utility Storm Sewer Construction Fund Liquor General Fund Liquor Capital Eq Replacement-General [ Liquor DARE Program Liquor Data Processing Water Construction Water Utility r-'- Sewer Construction Sewer Utility ]~ Storm Sewer Const Storm Sewer Utility I Central Garage Capital Improvements-General Central Garage Capital Eq Replacement-Garage Central Garage Data Processing ~ Energy Management Capital Improvements-General Police/F'tre Contingency Capita] Eq Replacement-General Compensated Absences General Fund Anoka County: CDBG General Fund Parkview Villa North General Fund EDA-Administralion General Fund ! EDA-Admmistratkm Capital Improvement Dev Parkview Villa South General Fund lIRA Sheffield Redevelopment I-IRA Community Development HRA Capital Improvement Der HRA Section 8 Total Transfers 73 $1,916 893 86500 1,199.2,984 300,000 50,000 50.000 250,000 I 1.826 35,889 56,835 58,549 300,000 50.000 330,000 9.292 2(10,000 226.380 885.750 535.293 34.605 24,000 17,500 352 70.721 144,380 79,534 74.366 25,00(} 45,000 74.641 25.000 74,364 45.000 5,000 66.276 45,0{10 66.276 46,500 10.000 5.800 32.900 63.954 100.{100 9,000 45,000 209,717 210.965 362,210 60500 4,000 30,000 107,646 238,057 138,737 5,913 7.884 7.884 100,000 5,914 77,000 34,702 185,000 85.877 7.734.282 Local match: grants Local match: grants Closure of projects Fund projects Council action: development Replacement fixed assets Fund data processing services Fund commurdty development Administrative labor allocation Closure of projects Closure of projects Administrative labor allocation Council action: building fund Fund data processing services Council action: development Administrative labor allocation Council action: building fired Debt service Debt service TIF allocation The allocation TIF allocation TIF allocation Closure of projects Debt service Closure of projects Capital equipn'ent replacement Administrative labor allocation Replacement of fixed assets Fund data pmcossing services Debt service Replacement fixed assets Ad ministrati ve labor allocation Fund data processing services Debt service Administrative labor allocation Fund data processing services Administrative labor allocation Debt service Administrative a~location Replacement fixed assets Fund construction fund Administrative labor allocation Replacement fixed assets Fund DARE pmgram Fund data processing services Closure of pm jeers Closure of projects Closure of projects Replacement fixed assets Replacement fixed assets Fund data processing services Replacement of fixed assets Council action: building fund Intemal service allocation Administrative latmr allocation Administrative labor allocation Administrative labor allocation Council action: development Administrative labor allocation Guaranteed funding Fund community development Council action: development Council action: fund Section 8 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 No~ 6 OPERATING LEASES A. LEASE EXPENSE The City has leased premises for a liquor store (Top Valu) under a five-year lease agreement that originally expired in 1989. This lease has been renewed through December 31, 2004. This lease is considered for accounting purposes to be an operating lease. Lease expenditures for the year ended December 31, 2002 amounted to $133,233. The City also has leased premises for its Top Valu II liquor store under a five-year lease that originally expired February 28, 1998, with a five-year renewal option in 1998 and 2003. The City exercised the 1998 renewal option increasing minimum payments to $3,552 per month. The City is also required to pay all utilities and a pro-rata share of real estate taxes. This lease is considered for accounting purposes to be an operating lease. Lease expenditures for the year ended December 31, 2002 amounted to $61,882. Future minimum rental payments are as follows: Year Top Value Top V~ueII 2003 $88,785 $7,104 2004 88,785 Total $177,570 $7,104 B. LEASE REVENUE The City receives revenue from agreements for the lease of space in Parkview Villa North and for antennas placed on the water towers and Parkview Villa. For accounting purposes, the leases are considered operating leases. Lease revenue for the year ended December 31,2002, totaled $27,192. Terms of each lease are as follows: Location Lessee 2002 Adjustment Expiration Ivanhoe Place Sprint Spectrum $12,008 Greater of CPI or 5% 08/19/06 40th Ave NE American Portable Telecom 15,184 Greater of CPI or 4% 12/04/06 Total $27,192 74 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2002 Note 7 LONG-TERM DEBT General Obligation Bonds - The City issues General Obligation Bonds to provide funds for the acquisition and construction of major capital facility additions. General Obligation Bonds have been issued to refund General Obligation Tax Increment Bonds. General Obligation Bonds are direct obligations and are backed by the full faith and credit of the City. General Obligation Bonds currently outstanding are segregated between the amounts to be repaid from governmental activities and amount to be repaid from business-type activities and are as follows: General Obligation: Governmental activities: Tax increment bonds: Capital Appreciation Bonds of 1990 Refunding Bonds of 1991 Improvement bonds: Improvement Bonds 1999A Original Interest Issue Final Balance Issue Rate Date Maturity End of Year $2,399,721 6.90-7.15% 8/23/90 9/1/09 $2,008,206 6,670,000 5.30-5.80% 12/1/91 3/1/02 860,000 3.45-4.30% 5/1/99 2/1/10 705,000 Business~type activities: Revenue bonds: Utility revenue bonds 1999B 1,935,000 3.45-4.30% 5/I/99 2/1/10 1,650,000 Total General Obligation Bonds Outstanding $4,363,206 ANNUAL DEBT SERVICE REQUIREMENTS As of December 31,2002, the annual requirements to maturity for general obligation bonds are as follows: Fiscal Year Ending Governmental Activities Business-type Activities December 31 Principal Interest Principal Interest 2003 $477,918 $568,447 $180,000 $63,105 2004 445,584 592,151 185,000 56,305 2005 422,272 611,805 195,000 48,987 2006 390,822 634,603 200,000 41,185 2007 370,545 651,235 210,000 32,880 2008-2010 606,065 988,105 680,000 43,948 Total $2,713,206 $4,046,346 $1,650,000 $286,410 75 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 At December 31, 2002, a total of $1,187,646 is available in Debt Service Funds to service the General Obligation Tax Increment Bonds and the General Obligation Improvement Bonds. There are a number of limitations and restrictions contained in the various bond indentures. The City is in compliance with all significant limitations and restrictions. Delinquent assessments receivable related to the 1999A bond issue at December 31, 2002 totals $23,854. The Tax Increment Bonds are payable from the amount of increase in the property taxes on the property in the Tax Increment District. Any deficiencies in revenues from these sources will be provided by general property taxes. Long-Term Debt - Other - The City is the administering authority for the following Tax Increment Finance Districts: A. 1977 Downtown CBD Revitalization Plan A3 Type of District Authorizing Law Duration of District Original Tax Capacity Current Tax Capacity (for taxes collectible in 2002) Captured Tax Capacity Retained Bonds Issued Principal Payments Bonds Outstanding at December 31, 2002 Redevelopment HRA (Minnesota Statutes Sections 462.545 and 462.585) August l, 2009 $169,960 $598,666 $428,706 $28A34,721 $26,426,515 $2,008,206 B. 1984 Modification to the Downtown CBD Revitalization Plan C7 Type of District Authorizing Law Duration of District Original Tax Capacity Current Tax Capacity (for taxes collectible in 2002) Captured Tax Capacity Retained Bonds Issued Principal Payments Bonds Outstanding at December 31, 2002 Redevelopment HRA (Minnesota Statutes Sections 462.545 and 462.585) August 1,2009 $17,768 $33,432 $15,664 76 : CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2002 C. 1984 University Avenue Redevelopment C8 Type of District Authorizing Law Duration of District Original Tax Capacity Current Tax Capacity (for taxes collectible in 2002) Captured Tax Capacity Retained Bonds Issued Principal Payments Bonds Outstanding at December 3 I, 2002 D. 1989 Multi-Use Redevelopment Plan K2 Type of District Authorizing Law Duration of District Original Tax Capacity Current Tax Capacity (for taxes collectible in 2002) Prior Year Tax Capacity Adjustment Captured Tax Capacity Retained Bonds Issued Principal Payments Bonds Outstanding at December 31, 2002 Redevelopment HRA (Minnesota Statutes Sections 462.545 and 462.585) August 1, 2009 $25,176 $134,417 $109,241 $ i ,070,000 $1,070,000 Redevelopment HRA (Minnesota Statutes Sections 462.545 and 462.585) October 4, 2014 $4,955 $22,886 $17,931 1995 Sheffield Tax Increment Financing District M8 Type of District Authorizing Law Duration of District Original Tax Capacity Current Tax Capacity (for taxes collectible in 2002') Captured Tax Capacity Retained Prior Year Tax Capacity Adjustment Bonds Issued Principal Payments Bonds Outstanding at December 3 l, 2002 Redevelopment HRA (Minnesota Statutes Sections 469.174 to 469.179 inclusion as amended) December 31,2022 $17,773 $52,336 $34,563 77 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2002 Fo 53rd Avenue Tax Increment Financial District N7 Type of District Authorizing Law Duration of District Original Tax Capacity Current Tax Capacity (for taxes collectible in 2002) Captured Tax Capacity Retained Bonds Issued Principal Payments Bonds Outstanding at December 31, 2002 G. Housing and Redevelopment District No. 1 P3 Type of District Authorizing Law Duration of District Original Tax Capacity Current Tax Capacity (for taxes collectible in 2002) Captured Tax Capacity Retained Bonds Issued Principal Payments Bonds Outstanding at December 31, 2002 H. Housing and Redevelopment District No. 1 P4 Type of District Authorizing Law Duration of District Original Tax Capacity Current Tax Capacity (for taxes collectible in 2002) Captured Tax Capacity Retained Bonds Issued Principal Payments Bonds Outstanding at December 31, 2002 78 Economic Development Minnesota Statutes Section 469.174 December 11,2006 $ 66,238 $174,502 $108,264 Redevelopment Minnesota Statutes Section 469.174 September8,2002 $32,520 $48,957 $16,437 Redevelopment Minnesota Statutes Section 469.174 Sep~mber 8,2002 $1,117 $1,623 $ 506 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 Housing and Redevelopment District R8 Type of District Authorizing Law Duration of Dislrict Original Tax Capacity Current Tax Capacity (for taxes collectible in 2002) Captured Tax Capacity Retained Bonds Issued Principal Payments Bonds Outstanding at December 3 I. 2002 Redevelopment Minnesota Statutes Section 469.174 December 15, 2022 $4,343 $4,35 I $ 8 CHANGES IN LONG-TERM LIABILITIES Long-term liability activity for the year ended December 31,2002, is as follows: Governmental activities: Bonds payable Capital appreciation bonds 199{) Refunding bonds of 199l hnprovement bonds: Improvement bonds 1999A Total bonds payable Compensated absences Total governmental activity long-term liabilities Business-type activities: Revenue bonds: Utility revenue bonds 1999B Compensated absences Total business-type activity long-term liabilities Beginning Ending Due Within Balance Additions Reductions Balance One Year $2,399,721 $ $391,515 $2,008,206 $377,918 220,000 220,(100 810,0(10 105,000 705,000 100,000 3,429,721 0 716,515 2,713,206 477,918 509,943 62,347 572.290 724 $3,939,664 $62.347 $716,515 $3.285,496 $478,642 1,825,000 175,000 1.650,000 180,0{X) 88,299 26,485 61,814 1,8{k6 $1,913,299 $0 $201,485 $1.711,814 $181,806 With the exception of the 1990 Tax Increment Bonds, all General Obligation Bonds are serial bonds which require semiannual payments of principal and/or interest from the date the bonds are issued. The 1990 Tax Increment Bonds are Capital Appreciation Bonds which require no payments of principal or interest until September 2002. During the year ended December 31,2002, accreted interest of $3,078,678 was included in governmental activity long-term debt for the 1990 Tax Increment Capital Appreciation Bonds. 79 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 Note 8 CONDUIT DEBT From time to time, the City of Columbia Heights has issued Revenue Bonds to provide financial assistance to private-sector entities for the acquisition and construction of facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from private-sector entity revenues. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private-sector entity served by the bond issuance. Neither the City of Columbia Heights, the State of Minnesota, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2002 there were five series of Revenue Bonds outstanding, with an aggregate principal amount payable of $18,844,000. Note 9 FUND EQUITY The following funds had a fund deficit as of December 31,2002: Special Revenue Funds: Anoka County CDBG Fund Deficit ($25,317) Debt Service Funds: Multi-Use Redevelopment Plan (52,579) Capital Project Funds: Muncipal State Aid Street Fund Sheffield TIF Redevelopment Capital Improvements PIR TIF District #2 TIF Scattered Site (725,704) (490,518) (186,426) (2,243) (33,603) Total fund deficits ($1,516,390) The City will finance these deficits through external or internal sources in future years. 80 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 At December 31, 2002 the City has reserved and designated portions of its various fund equities through legal restrictions and City Council authorizations. A summary of such reservations and designations are as follows: General fund: Reserved for prepayments Designated for working capital Special Revenue Funds: Reserved for prepayments Reserved for real estate held for resale Reserved for program expenditures Designated for working capital Designated for maintenance Debt Service Funds: Designated for debt service Capital Projects Funds: Designated for capital improvements December 31, 2002 $14,657 3,500,949 4,156 165,836 780,821 46,715 102,590 1,240,225 12,693,268 $18,549,217 81 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 Note 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE A. PLAN DESCRIPTION All full-time and certain part-time employees of the City of Columbia Heights are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) and the Public Employees Police and Fire Fund (PEPFF) which are cost-sharing, multiple-employer retirement plans. These plans are established and administered in accordance with Minnesota Statute, Chapters 353 and 356. PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership by statute are covered by the PEPFF. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by state statute, and vest after three years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERF'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 2.2% of average salary for each of the first 10 years of service and 2.7% for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first 10 years and 1.7% for each remaining year. Under Method 2, the annuity accrual rate is 2.7% of average salary for Basic Plan members and 1.7% for Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate is 3.0% for each year of service. For all PEPFF and PERF members whose annuity is calculated using Method 1, a full annuity is available when age plus years of service equal 90. A reduced retirement annuity is also available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A normal annuity is a lifetime annuity that ceases upon the death of the retiree - no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will reduce the monthly normal annuity amount, because the annuity is payable over joint lives. Members may also leave their contributions in the fund upon termination of public service in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. 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 82 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2002 are not receiving them yet are bound by the provisions in effect at the time they last terminated their public service. PERA issues a publicly available financial report that includes financial statements and required supplementary information for PERF and PEPFF. That report may be obtained by writing to PERA, 60 Empire Drive #200, St. Paul, Minnesota, 55103-1855 or by calling (651) 296-7460 or 1-800-652-9026. B. FUNDING POLICY Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. PERF Basic Plan members and Coordinated Plan members are required to contribute 9.10% and 5.10%, respectively, of their annual covered salary. The PEPFF members are required to contribute 6.20% of their annual covered salary. The City of Columbia Heights is required to contribute the following percentages of annual covered payroll: 11.78% for Basic Plan PERF members, 5.53% for Coordinated Plan PERF members, and 9.30% for PEPFF members. The City's contributions for the last three years which were equal to the contractually required contributions for each year as set by state statute are as follows: Year Ended December 31 PERF PEPFF 2000 $173,674 $160,999 2001 175,714 172,261 2002 210,066 185,404 In addition to the above amount, the City contributed $325,675 to PEPFF as required under a 1999 consolidation plan. Note 11 DEFINED BENEFIT PENSION PLAN - POLICE AND FIRE CONSOLIDATION FUND TERMINATED PLAN - PFCF Until July 1, 1999, the City of Columbia Heights was a participant in the PERA Police and Fire Consolidation Fund (PFCF), an agent, multiple-employer defined benefit plan. Effective July 1, 1999 this plan was terminated and all assets and liabilities were transferred to the Police and Fire Fund (PEPFF), a cost sharing multiple-employer plan. Upon termination, a final actuarial valuation determined the unfunded actuarial accrued liability (UAAL) for each participant. The City of Columbia Heights' remaining obligation to the PFCF is repayment of the UAAL, which is payable in 10 equal annual installments from 1999 - 2009. Annual payments for the City of Columbia Heights are $56,706 for the fire and police accounts. During 2002, it was decided that the entire outstanding amount of $325,675 was to be paid off. 83 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL ~TATEMENTS December 31, 2002 Note 12 DEFINED CONTRIBUTION PLAN - FIRE RELIEF ASSOCIATION, VOLUNTEER DIVISION PLAN DESCRIPTION The Columbia Heights Fire Department Relief Association is the administrator of a single-employer pension plan for the volunteer members of the City of Columbia Heights Fire Department. Through October 26, 1997, the association operated as a defined benefit plan. Effective October 27, 1997, the association amended its by-laws and converted to a defined contribution plan. The pension plan was fully funded at the time of conversion. Benefits and contribution requirements are established by the association's by-laws and can be amended by the association's board of directors with approval from the City of Columbia Heights. All provisions are within limitations established by Minnesota statutes. Type of Benefit. The exclusive pension provided by the association is a "Defined Contribution Lump Sum Service Pension" as defined in Minnesota Statutes §424A.02, Subdivision 4. Contributions Required and Contributions Made. No contributions are required from the plan members or the City of Columbia Heights. The plan is funded through state aid, investment income and discretionary contributions from the City of Columbia Heights. For 2002 state aid was contributed to the plan. Note 13 COMMITMENTS AND CONTINGENCIES 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; injuries to employees; and natural disasters. Workers compensation coverage is provided through a pooled self-insurance program through the League of Minnesota Cities Insurance Trust (LMCIT). The City pays an annual premium to 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 coverage is retrospectively 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. Property, casualty, and automobile insurance coverage are 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 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2002 reinsures through commercial companies for claims in excess of various amounts. The City retains risk for the deductible portions. These deductibles are considered immaterial to the financial statements. The City continues to carry commercial insurance for all other risks of loss, including employee health and disability insurance. There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years. B. LITIGATION The City attorney has indicated that any existing and pending lawsuits, claims and other actions in which the City is a defendant are either covered by insurance; of an immaterial amount; or, in the judgment of the City attorney, remotely recoverable by plaintiffs. C. FEDERAL AND STATE FUNDS Amounts received or receivable from federal and state agencies are subject to agency audit and adjustment. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of funds which may be disallowed by the agencies cannot be determined at this time although the City expects such amounts, if any, to be immaterial. D. TAX INCREMENT DISTRICTS The City's tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they are not aware of any instances of noncompliance which would have a material effect on the financial statements. E. CONTRACTUAL COMMITMENTS The .City has entered into several contractual commitments that are in process at year end. At December 31,2002, the City's committed obligation for such projects were approximately $878,184. In addition to these contractual commitments, the City has a contract with the City of Minneapolis for the purchase of the City's water supply. This water supply flows through one master meter located at the City of Minneapolis reservoir. During the years 2000, 2001 and 2002 there were periods of time where the meter was dysfunctional and it was necessary for Minneapolis to estimate the water flowage. Due to the age of the meter, there are also some concerns as to its 85 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2002 overall accuracy, a result of which could be that the City was billed for less water than was actually consumed which could result in an outstanding liability to the City of Minneapolis. At the present time there is not adequate information to determine the full extent of any potential contingent liability. Note 14 CHANGE IN ACCOUNTING PRINCIPLE In June 1999, the Governmental Accounting Standards Board (GASB) approved Statement No. 34, Basic' Financial Statements - and Management's Discussion and Analysis -for State and Local Governments. The City is required to implement GASB 34 no later than the year ended December 31, 2003. The City elected to implement GASB 34, including the infrastructure-related portion, during 2002. The most significant effects of implementing GASB 34 during 2002 are as follows: · Government-wide financial statements are prepared using full accrual accounting for all the City's activities. · Infrastructure and construction in progress for governmental activities has been capitalized and all capital assets are depreciated on the government-wide financial statements. See Note 4 for restatement of previously reported amounts. · The basic fund financial statements focus on major funds rather than fund types. · A Management Discussion and Analysis (MD&A) is included as required supplementary information. These and other changes are reflected in the accompanying financial statements (including notes to the financial statements). The City also implemented the following pronouncements during 2002, which did not have a material effect on the accompanying financial statements: · GASB Statement 33, Accounting and Financial Reporting for Nonexchange Transactions · GASB Statement 36, Recipient Reporting.for Certain Shared Nonexchange Revenues - an Amendment to GASB Statement 33 · GASB Statement 37, Basic Financial Statements - and Management's Discussion and A~,alysis - .for State and Local Governments: Omnibus - an Amendment of GASB Statements No. 21 and No. 34. · GASB Statement 38, Certain Financial Statement Note Disclosures · GASB Statement 39, Determining Whether Certain Organizations are Component Units · GASB Statement 41, Budgetary Comparison Schedules - Perspective D~[ferences 86 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2002 Note 15 FUND RECLASSII~ICATIONS The following funds have been reclassified from Special Revenue funds to Capital Project Funds: Municipal State Aid Street Fund Parking Ramp Fund · Housing Mortgage Fund Note 16 SUBSEQUENT EVENTS In 2003, $2,600,000 in General Obligation Improvement Bonds were issued. 87 REQUIRED SUPPLEMENTARY INFORMATION Ah* 89 CITY OF COLUMBIA HEIGHTS, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31,2001 Statement 10 Page 1 of 2 2002 Budgeted Amounts Original Final Actual Amounts Variance with Final Budget Positive (Negative) 2001 Actual Amounts Revenues: Taxes $4,095,527 $3,525,375 $3,534,854 $9,479 $2,954,511 Licenses and permits 304,100 304,100 277,924 (26,176) 292,744 lntergovemmental 2,834,820 3,404,972 3,446,083 41,111 3,660,019 Charges for services 419,400 4 ! 9,400 414,739 (4,661 ) 390,492 Fines and forfeitures 100,000 100,000 84,346 (15,654) 87,760 Investment income: Interest and dividends 200,000 200,000 278,819 78,819 254,660 Change in fair value 68,523 68,523 19,113 Other revenues: Miscellaneous 6,600 6,600 5,903 (697) 5,942 Proceeds from sale of assets 5,500 5,500 12,454 6,954 15,430 Total revenues 7,965,947 7,965,947 8,123,645 157,698 7,680,671 Expenditures: General government: Council 207,242 207,242 198,755 8,487 189,810 Manager 403,841 403,84 ! 363,241 40,600 348,264 Legal 194,010 194,010 169,498 24,512 183,899 Finance and elections 646,820 646,820 619,584 27,236 532,814 Assessing 141,620 141,620 110,272 31,348 125,027 General government buildings 142,216 142,216 114,155 28,06 i 117,761 Total general government 1,735,749 1,735,749 1,575,505 160,244 i,497,575 Public safety: Police/animal/civil defense 2,549,938 2,581,500 2,500,331 81,169 2,291,754 Fire 843,223 843,223 880,562 (37,339) 864,303 Total public safety 3,393,161 3,424,723 3,380,893 43,830 3,156,057 Public works: Engineering 314,440 314,440 231,479 82,961 419,446 Maintenance 878,359 878,359 721,077 157,282 707,652 Sanitation 121,689 i 21,689 12 ! ,921 ,, (232) 95,092 Total public works 1,314,488 1,314,488 1,074,477 240,011 1,222,190 Other departments: Parks and recreation 1,352,448 1,352,448 1,213,016 139,432 1,194,800 Contingencies 27,500 27,500 27,500 3,922 Total other departments ! ,379,948 1,379,948 1,213,016 166,932 1,198,722 Total expenditures 7,823,346 7,854,908 7,243,89 ! 611,017 7,074,544 Revenues over (under) expenditures 142,601 11 ! ,039 879,754 768,715 606,127 90 CITY OF COLUMBIA HEIGHTS, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 31, 2001 2002 Budgeted Amounts Original Final Actual Amounts Variance with Final Budget Positive (Negative) Other financing sources (uses): Transfers in 532,032 Transfers out (400,000) Total other financing sources and (uses) 132,032 532,032 (1,840,052) (1,308,020) 670,769 (1,932,293) (1,261,524) (381,770) 3,897,376 , $3,515,606 138,737 (92,241) 46,496 $815,211 Net change in fund balances $274,633 ($1,196,981) Fund balance - beginning Fund balance - ending Statement 10 Page 2 of 2 2001 Actual Amounts 429,968 ( 1,94O, 137) (1,510,169) (904,042) 4,801,418 $3,897,376 91 CITY OF COLUMBIA ItEIGItTS, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - ANOKA COUNTY CDBG For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31,2001 Budgeted Amounts Original Final Revenues: Intergovernmental revenue $377,787 $377,787 Other revenues: Miscellaneous Proceeds from sale of assets Total revenues 377,787 377,787 Expenditures: Personal services 13,437 13,437 Supplies 25 25 Other services and charges ! 7,301 17,30 I Loans and grants Capital outlay 341,111 341,111 Total expenditures 371,874 371,874 Revenues over (under) expenditures Other financing sources (uses): Transfers (out) Total other financing sources (uses) Net change in fund balance Fund balance (deficit) - beginning 2002 Fund balance (deficit) - ending Actual Amounts $383,183 383,183 3,204 146 7,097 405,447 415,894 5,913 5,913 (32,711) (5,913) (5,913) (5,913) (5,913) (5,913) (5,913) $0 $0 (38,624) 13,307 ($25,3 ! 7) Variance with Final Budget- Positive (Negative) $5,396 5,396 10,233 (121) 10,204 (405,447) 341,1Il (44,020) (38,624) 0 ($38,624) Statement 11 2001 Actual Amounts $490,829 196 37,650 528,675 12,877 388 53,644 241,100 191,270 499,279 29,396 0 29,396 (16,089) $13,307 92 CITY OF COLUMBIA HEIGHTS, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - NOTE TO RSI December 31, 2002 II Note A: LEGAL COMPLIANCE - BUDGETS The City of Columbia Heights' budget is legally adopted on a basis consistent with generally accepted accounting principals. The legal level of budgetary control is at the fund level. The following is a listing of funds whose actual expenditures exceeded budgeted expenditures (appropriations) in the following funds for 2002: Final Budget Actual Over Budget Major Fund: Anoka County CDBG $371,874 $415,894 $44,020 Expenditures in the Anoka County CDBG Fund are over budget by $44,020 due to the purchase of properties. This was not included in the 2002 budget. 93 0 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 95 96 NONMAJOR GOVERNMENTAL FUNDS 97 SPECIAL REVENUE FUNDS A Special Revenue Fund is used to account for the proceeds of special revenue sources that are legally restricted to expenditures for specified purposes. DEBT SERVICE FUNDS The Debt Service Funds are used to account for the accumulation of resources for, and payment of, interest, principal, and related costs on general long-term debt. CAPITAL PROJECT FUNDS The Capital Projects Funds account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds. 99 NONMAJOR SPECIAL REVENUE FUNDS The City of Columbia Heights had the following Special Revenue Funds during the year: Community Development Fund - established to account for revenues and expenditures associated with planning, building inspections, and community development projects within the City. Cable Television Fund - established to account for revenues and expenditures associated with cable television franchise. Library Fund - established in 1993 to account for revenues and expenditures of the library. DARE Program Fund - established to account for revenues and expenditures of DARE (Drug Awareness) Program. Special Projects Fund - established to monitor revenues from special projects and related expenditures. CHASE Fund - established to account for revenues and expenditures associated with a State grant received for community participation in youth enrichment programs. Confiscated Property Fund - established to account for funds from property confiscated by the Police Department. Local Law Enforcement Block Grant Fund - established to account for revenues and expenditures associated with a federal grant received for the purchase of equipment to aid in crime prevention. COPS MORE 96 Grant - established to account for revenues and expenditures associated with a federal grant received for technical service equipment and personnel. Juvenile Justice Grant - established to account for revenues and expenditures associated with the removal of graffiti in the City. COPS School Partnership Grant - established to account for revenues and expenditures associated with a federal grant received to address identified crime problems within the schools. 101 Recreation Contributed Proiects Fund - established to recreational activities and related expenditures. Contributed Projects Fund - established expenditures. Flex Benefit - established to account for expenditures for flexible benefits. Police/Fire Contingency Fund - established related to police and fire. monitor contributions for to monitor contributions and related contributions by employees and related to account for future years expenditures Housing and Redevelopment Authority- a separate legal entity from the City. The mayor and City Council comprise the majority membership of this component unit. Its purpose is to provide housing in the City. Parkview Villa North Fund - established to account for revenues and expenditures associated with low-income federally subsidized senior housing. Parkview Villa South Fund - established to account for revenues and expenditures associated with an EDA owned senior housing complex. Rental Housing Fund - established to account for revenues and expenditures of City-owned rental properties. Economic Development Authority - a separate legal entity from the City. The mayor and City Council comprise the majority membership of this .component unit. Its purpose is economic development in the City. Economic Development Authority Administration Fund - established to account for revenues and expenditures associated with business development and community redevelopment projects in the City. Business Revolving Loan Fund - established to account for revenues and expenditures associated with business development through a business revolving loan fund. Section 8 Fund - established to account for revenues and expenditures associated with the administration of Section 8 rental assistance programs within the City. 103 CITY OF COLUMBIA HEIGHTS, MINNESOTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2002 Statement 12 Assets Cash and investments Receivables: Accounts Taxes Interest Loans Due from other governmental units lnterfund receivable Prepayments Real estate held for resale Total assets Liabilities and Fund Balance Liabilities: Accounts payable Accrued salaries and withholdings payable Contracts payable - retained percentage Due to other governmental units Interfund payable Deferred revenue Deposits Total liabilities Fund balance: Reserved: Reserved for prepayments Reserved for real estate held for resale Reserved for program expenditures Unreserved: Designated for working capital Designated for maintenance Designated for debt service Designated for capital improvements Undesignated Total fund balance Total liabilities and fund balance Special Revenue $1,583,722 48,087 3,703 27,092 10,433 255,242 4,156 165,836 $2,098,271 $475,859 !1,027 43,033 173,870 40,746 21,980 766,515 4,156 165,836 780,821 46,715 102,590 231,638 1,331,756 $2,098,271 Debt Service $1,162,995 12,603 22,067 52,572 $1,250,237 7 52,572 10,012 ~ 62,591 1,240,225 (52,579) 1,187,646 $1,250,237 Capital Project $5,701,833 205 34,366 3,039 157,564 $5,897,007 $62,371 1,000 37,243 100,614 5,148,402 647,991 5,796,393 $5,897,007 Total Nonmajor Government Funds $8,448,550 48,087 16,511 83,525 10,433 258,281 210,136 4,156 165,836 $9,245,515 $538,230 11,027 1,000 43,040 263,685 50,758 21,980 929,720 4,156 165,836 780,821 46,715 102,590 1,240,225 5,148,402 827,050 8,315,795 $9,245,515 104 CITY OF COLUMBIA HEIGHTS, MINNESOTA COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS For The Year Ended December 31, 2002 Statement 13 Special Debt Revenues: Revenue Service Taxes $809,663 $ Tax increment collections - 627,090 Intergovernmental 848,254 84,919 Charges for services 752,137 Investment income: Interest and dividends 127,842 104,135 Change in fair value 31,418 25,592 Other revenues 128,984 Total revenues 2,698,298 841,736 Expenditures: Current: General government Public safety Culture and recreation Community development Capital outlay: Public safety Culture and recreation Community development Debt service: Principal retirement Interest and fiscal charges Miscellaneous Developer incentives Contractual services Total expenditures Revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Fund balance - beginning Fund balance - ending 292,970 448,285 684,674 1,062,488 257,425 2,745,842 (47,544) 423,888 (1,701,985) (1,278,097) (1,325,641) 2,657,397 $1,331,756 716,515 530,985 30,237 i,277,737 (436,001) 1,182,851 (1,112,130) 70,721 (365,280) 1,552,926 $1,187,646 Capital Project $ 133,434 6,935 162,176 39,856 25,563 367,964 70,591 26,610 104,258 66,885 268,344 99,620 2,030,225 (220,485) 1,809,740 1,909,360 3,887,033 $5,796,393 Total Nonmajor Government Funds $809,663 760,524 940,108 752,137 394,153 96,866 154,547 3,907,998 292,970 448,285 684,674 1,062,488 70,591 26,610 257,425 716,515 530,985 30,237 104,258 66,885 4,291,923 (383,925) 3,636,964 (3,034,600) 602,364 218,439 8,097,356 $8,315,795 105 CITY OF COLUMBIA HEIGHTS, MINNESOTA SUBCOMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS December 31, 2002 Assets Cash and investments Receivables: Accounts Taxes Interest Loans Due from other governmental units Prepayments Real estate held for resale Total assets Liabilities and Fund Balance Liabilities: Accotmts payable Accrued salaries and withholdings payable Due to other governmental units lnterfund payable Deferred revenue Deposits Total liabilities Fund balance: Reserved for prepayments Reserved for real estate held for resale Reserved for program expenditures Unreserved: Designated for working capital Designated for maintenance Undesignated Total fund balance Total liabilities and fund balance Community Development Fund $22,057 263 $22,320 $3,137 3,956 1,980 9,073 13,247 13,247 $22,320 106 Cable Television $ 32,215 3,375 $35,590 $4,081 29,070 33,151 2,439 2,439 $35,590 Library $56,048 1,217 4,156 $61,421 $1,559 6,273 2,718 10,550 4,156 46,715 50,871 $61,421 D.A.R.E. Program $20,573 $20,573 20,573 20,573 $20,573 Special Projects $1,976 15,184 3,288 $20,448 $4,762 10,969 15,731 4,717 4,717 $20,448 C.H.A.S.E. $35,641 300 13,990 $49,931 $ 444 444 49,487 49,487 $49,931 107 Confiscated Propert~ $13,121 $13,121 13,121 13,121 $13,121 Statement 14 Page l of 2 Local Law Enforcement Block Grant $23,290 269 $23,559 17,048 17,048 6,511 6,511 $23,559 CITY OF COLUMBIA HEIGHTS, MINNESOTA SUBCOMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS December 31,2002 Assets Cash and investments Receivables: Accounts Taxes Interest Loans Due £rom other governmental units Prepayments Real estate held for resale Total assets Liabilities and Fund Balance Liabilities: Accounts payable Accrued salaries and withholdings payable Due to other governmental units Interfund payable Deferred revenue Deposits Total liabilities Fund balance: Reserved for prepayments Reserved for real estate held for resale Reserved for program expenditures Unreserved: Designated for working capital Designated for maintenance Undesignated Total fund balance Total liabilities and fund balance COPS More 96 Grant $314 $314 314 314 $314 Juvenile Justice Grant $340 623 $963 963 963 $963 Recreation Contributed Projects $71,050 $71,050 $125 125 70,925 70,925 $71,050 108 : Statement 14 Page 2 of 2 Contributed Projects Flex Benefit Police/Fire Contingency Total Housing and Redevelopment Authority Total Economic Development Authority Total $29,772 $29,772 $39,321 370 $39,691 $264,160 4,809 $268,969 $610,148 688 6,539 240,629 1'44,723 $1,002,727 $395,911 3,703 6,662 10,433 21,113 $437,822 $1,583,722 48,087 3,703 27,092 10,433 255,242 4,156 165,836 $2,098,271 $1,432 1,432 $7,949 7,949 $268,969 268,969 $181,468 104 38,335 144,800 21,980 386,687 $2,377 25O 12,729 15,356 $475,859 11,027 43,033 173,870 40,746 21,980 766,5 ! 5 28,340 28,340 $29,772 31,742 31,742 $39,691 0 $268,969 144,723 474,393 102,590 (105,666) 616,040 $1,002,727 21,113 306,428 94,925 422,466 $437,822 4,156 165,836 780,821 46,715 102,590 231,638 1,331,756 $2,098,271 109 CITY OF COLUMBIA HEIGHTS, MINNESOTA SUBCOMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31, 2002 Revenues: Taxes Intergovernmental Fees/program revenues Rents Investment income: Interest and dividends Change in fair value Other revenues: Miscellaneous Contributions Total revenues Expenditures: Parks and recreation: Personal services Supplies Other services and charges Other: Personal services Supplies Other services and charges Capital outlay Total expenditures Revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers (out) Total other financing sources (uses) Net change in fund balance Fund balance - beginning Fund balance - ending Community Development Fund 1,242 305 1,547 245,345 8,635 43,652 297,632 (296,085) 284,702 (11,826) 272,876 (23,209) 36,456 $13,247 Cable Television $ 129,386 15,925 3,914 18,827 168,052 1,973 2,302 144,927 149,202 18,850 (408,549) (408,549) (389,699) 392,138 $2,439 Library D.A.R.E. Pro~ram $591,588 17,522 5,744 1,411 616,265 526 526 415,421 104,984 74,236 594,641 21,624 (209,292) (209,292) (187,668) 238,539 $50,871 2,38 I 2,470 4,851 (4,325) 9,000 9,000 4,675 15,898 $20,573 110 Special Projects $ 88,714 15,516 3,813 108,043 72,300 72,300 35,743 (330,000) (330,000) (294,257) 298,974 $4,717 C.H.A.S.E. $ 78,256 11,381 1,414 348 91,399 48,681 7,741 22,170 78,592 12,807 0 12,807 36,680 $49,487 Confiscated Property 3,860 3,860 797 315 !,112 2~748 0 2,748 10,373 $13,121 111 Local Law Enforcement Block Grant $ 26,351 i,269 312 27,932 30,695 3,911 34,606 (6,674) 1,916 1,916 (4,758) 11,269 $6,511 Statement 15 Page l of 2 COPS More 96 Grant 0 0 0 0 314 $314 CITY OF COLUMBIA HEIGHTS, MINNESOTA SUBCOMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31, 2002 Revenues: Taxes Intergovernmental Fees/program revenues Rents Investment income: Interest and dividends Change in fair value Other revenues: Miscellaneous Contributions Total revenues Expenditures: Parks and recreation: Personal services Supplies Other services and charges Other: Personal services Supplies Other services and charges Capital outlay Total expenditures Revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers (out) Total other financing sources (uses) Net change in fund balance Fund balance - beginning Fund balance - ending Juvenile Justice Grant 12,462 12,462 4,372 107 9,055 13,534 (1,072) 893 893 (179) 1,142 $963 Cops School Parmership Grant 6,611 6,611 1,124 5,487 6,611 0 0 $0 Recreation Contributed Projects 29,145 29,145 8,O03 3,438 11,441 17,704 0 17,704 53,221 $70,925 Contributed Proiects 14,279 14,279 9,654 10,367 20,021 (5,742) 0 (5,742) 34,082 $28,340 112 Flex Benefit 1,744 429 54,522 56,695 51,447 51,447 5,248 0 5,248 26,494 $31,742 Police/Fire Contingency $ 118,602 22,691 5,577 146,870 387,571 387,571 (240,70 ! ) (238,057) (238,057) (478,758) 478,758 $0 Total Housing and Redevelopment Authority , 367,847 492,592 30,859 7,583 3,615 902,496 15,374 17,160 423,382 257,425 713,341 189,155 (i 3,798) (13,798) 175,357 · 440,683 $616,040 113 Total Economic Development Authority $218,075 238,125 12,542 31,438 7,726 4,210 512,116 53,107 5,457 250,376 308,940 203,176 127,377 (490,463) (363,086) (159,910) 582,376 $422,466 Statement 15 Page 2 of 2 Total $809,663 848,254 259,545 492,592 127,842 31,418 85,034 43,950 2,698,298 48,681 15,744 25,608 735,592 183,296 1,479,496 257,425 2,745,842 (47,544) 423,888 (!,701,985) (1,278,097) (1,325,641) 2,657,397 $1,331,756 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - COMMUNITY DEVELOPMENT SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 3 l, 2001 II Revenues: Investment income: Interest and dividends Change in fair value Total revenues 2002 Budgeted Amounts Original Final Actual Amounts Variance with Final Budget- Positive (Negative) $ $ 0 $1,242 305 1,547 $1,242 305 ! ,547 Expenditures: Personal services Supplies Other services and charges Capital outlay Total expenditures Revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers (out) Total other financing so~ces (uses) Net change in fund balance 253,414 13,715 38,008 5OO 305,637 (3O5,637) 253,414 13,715 38,008 5OO 305,637 (305,637) 284,702 ( 11,826) 284,702 (11,826) 272,876 ($32,761) 272,876 ($32,761) 245,345 8,635 43,652 297,632 (296,085) 284,702 (11,826) 272,876 (23,209) 36,456 $13,247 8,069 5,080 (5,644) 500 8,005 9,552 0 $9,552 Fund balance - beginning Fund balance - ending Statement 16 2001 Actual Amounts $9,300 698 9,998 231,152 3,851 20,998 2,386 258,387 (248,389) 275,112 (16,505) 258,607 10,218 26,238 $36,456 114 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - CABLE TELEVISION FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31,2002 With Comparative Totals For the Year Ended December 31,2001 Budgeted Amounts Original Final 2002 Revenues: Franchise fees $128,000 Investment income: Interest and dividends 10,000 Change in fair value Other revenues: Miscellaneous Total revenues 138,000 Actual Amounts Variance with Final Budget- Positive (Negative) $128,000 10,000 138,000 $129,386 15,925 3,914 18,827 168,052 $1,386 5,925 3,914 18,827 30,052 Statement 17 2001 Actual Amounts $134,502 20,977 1,574 29,827 186,880 Expenditures: Personal services 6,431 6,43 i' 1,973 4,458 1,828 Supplies 55,550 55,550 2,302 53,248 1,267 Other services and charges 42,366 42,366 144,927 (102,561 ) 23,185 Total expenditures 104,347 104,347 149,202 (44,855) 26,280 18,850 (14,803) Revenues over (under) expenditures 33,653 33,653 (408,549) (389,699) Other financing sources (uses): Transfers (out) ($14,803) Net change in fund balance 392,138 $2,439 Fund balance - beginning Fund balance - ending (108,549) ($74,896) (408,549) ($374,896) 160,600 (104,333) 56,267 335,871 $392,138 115 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - LIBRARY FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 31,2001 2OO2 Budgeted Amounts Original Final Actual Amounts Revenues: Taxes $591,588 $591,588 $591,588 Charges for services 21,700 21,700 17,522 Investment income: Interest and dividends 5,000 5,000 5,744 Change in fair value 1,41 i Other revenues: Miscellaneous 250 250 Total revenues 618,538 618,538 616,265 Variance with Final Budget- Positive (Negative) (4,178) 744 1,41 ! (250) (2,273) Statement 18 2001 Actual Amounts $547,767 17,725 6,922 519 230 573,163 Expenditures: Personal services 412,645 412,645 415,42 ! (2,776) 383,086 Supplies 91,650 91,650 104,984 (I 3,334) 90,197 Other services and charges 72,015 72,015 74,236 (2,221 ) 71,728 Capital outlay 23,800 23,800 23,800 7,761 Total expenditures 600,110 600,110 594,641 5,469 552,772 18,428 18,428 21,624 3,196 20,391 $3,196 Revenues over expenditures (9,292) (209,292) (209,292) Other financing sources (uses): Transfers (out) $9,136 ($190,864) (187,668) Net change in fund balance Fund balance - beginning 238,539 $50,871 Fund balance - ending (8,727) 11,664 226,875 $238,539 116 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - D.A.R.E. PROGRAM SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 31,2001 2002 Budgeted Amounts Original Final Actual Amounts Variance with Final Budget- Positive (Negative) Revenues: Contributions $0 $0 $526 $526 5,850 5,850 2,381 3,469 2,975 2,975 2,470 505 8,825 8,825 4,851 3,974 Expenditures: Supplies Other services and charges Total expenditures Revenues over (under) expenditures Statement 19 Other financing sources: Transfers in 2001 Actual Amounts $63 3,288 2,844 6,132 Net change in fund balance (8,825) (8,825) (4,325) 4,500 (6,069) Fund balance - beginning 9,000 9,000 9,000 $175 $175 4,675 Fund balance - ending 15,898 $20,573 $4,500 6,000 (69) 15,967 $15,898 117 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - SPECIAL PROJECTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 31,2001 Revenues: Fees/program revenue Investment income: Interest and dividends Change in fair value Total revenues Expenditures: Other services and charges Total expenditures Revenues over expenditures Other financing sources: Transfers (out) Net change in fund balance Fund balance - beginning Fund balance - ending 2002 $88,714 15,516 3,813 108,043 72,300 72,300 35,743 (330,000) (294,257) 298,974 $4,717 Statement 20 2001 $127,215 12,887 967 141,069 25,000 25,000 116,069 116,069 182,905 $298,974 118 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - C .H .A .S .E . SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES lN FUND BALANCE For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 31, 2001 Revenues~ Intergovernmental: State grant Fees/program revenue Investment income: Interest and dividends Change in fair value Total revenues Expenditures: Personal services Supplies Other services and charges Capital outlay Total expenditures Net change in fund balance Fund balance - beginning Fund balance - ending 119 2002 $78,256 11,381 1,414 348 91,399 48,681 7,741 22,170 78,592 12,807 36,680 $49,487 Statement 21 2001 $105,782 14,910 1,142 86 121,920 47,298 13,779 42,528 2,177 105,782 16,138 20,542 $36,680 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - CONFISCATED PROPERTY SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 31,2001 Revenues: Other revenue: Confiscated property Expenditures: Supplies Other services and charges Total expenditures Net change in fund balance Fund balance - beginning Fund balance - ending 120 2002 $3,860 797 315 1,112 2,748 10,373 $13,121 Statement 22 2001 $9,902 801 1,983 2,784 7,118 3,255 $10,373 CITY OF COLUMBIA ltEIGHTS, MINNESOTA SPECIAL REVENUE FUND - LOCAL LAW ENFORCEMENT BLOCK GRANT SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 31,2001 Statement 23 Revenues: Intergovernmental: Federal grant Investment income: Interest and dividends Change in fair value Total revenues Expenditures: Supplies Other services and charges Capital outlay Total expenditures Revenues over (under) expenditures Other financing sources: Transfers in Net change in fund balance Fund balance - beginning Fund balance - ending 2002 $26,351 1,269 312 27,932 30,695 3,911 34,606 (6,674) 1,916 (4,758) 11,269 $6,511 2001 $32,933 1,520 114 34,567 3,548 713 28,316 32,577 1,990 2,522 4,512 6,757 $11,269 121 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - COPS MORE 96 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 31,2001 Revenues: Intergovernmental: Federal grant Investment income: Interest and dividends Change in fair value Total revenues Expenditures: Supplies Other services and charges Capital outlay Total expenditures Revenues over (under) expenditures Other financing sources: Transfers in Net change in fund balance Fund balance - beginning Fund balance - ending 122 2002 0 314 $314 Statement 24 2001 $11,330 23 2 $11,355 4,550 922 9,720 15,192 (3,837) 3,787 (50) 364 $314 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - JUVENILE JUSTICE GRANT SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 3 l, 2001 Revenues: Intergovemmental: State grant Expenditures: Personal services Supplies Other services and charges Total expenditures Revenues over (under) expenditures Other financing sources: Transfers in Net change in fund balance Fund balance - beginning Fund balance - ending 123 2002 $12,462 4,372 107 9,055 13,534 (1,072) 893 (179) 1,142 $963 Statement 25 2001 $8,481 3,210 368 6,001 9,579 (I ,098) 1,071 (27) 1,169 $1,142 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - COPS SCHOOL PARTNERSHIP GRANT SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 3 l, 2001 Revenues: Intergovernmental: Federal grant Expenditures: Personal services Supplies Other services and charges Capital outlay Total expenditures Net change in fund balance Fund balance - beginning Fund balance - ending 124 2002 $6,611 1,124 5,487 6,611 $0 Statement 26 2001 $50,956 23,172 1,026 10,778 15,980 50,956 $0 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - RECREATION CONTRIBUTED PROJECTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31,2002 With Coml~arative Totals For the Year Ended December 31,2001 Statement 27 Revenues: Contributions Miscellaneous Total revenues Expenditures: Supplies Other services and charges Capital outlay Total expenditures Net change in fund balance Fund balance - beginning Fund balance - ending 2002 $29,145 29,145 8,003 3,438 11,441 17,704 53,221 $70,925 2001 $35,420 555 35,975 21,108 2,738 6,018 29,864 6,111 47,110 $53,221 125 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - CONTRIBUTED PROJECTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 31, 2001 Revenues: Contributions Expenditures: Supplies Other services and charges Capital outlay Total expenditures Net change in fund balance Fund balance - beginning Fund balance - ending 126 2002 $14,279 9,654 10,367 20,021 (5,742) 34,082 $28,340 Statement 28 2001 $19,600 78 9,207 10,708 19,993 (393) 34,475 $34,082 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - FLEX BENEFIT FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 31,2001 Revenues: Other revenue: Flex withholding Investment Income: Interest and dividends Change in fair value Expenditures: Other services and charges Total expenditures Net change in fund balance Fund balance - beginning Fund balance - ending 127 2002 $54,522 1,744 429 56,695 51,447 51,447 5,248 26,494 $31,742 Statement 29 2001 $49,143 1,651 124 50,918 48,400 48,400 2,518 23,976 $26,494 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - POLICE/FIRE CONTINGENCY SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 3 I, 2002 With Comparative Totals For the Year Ended December 31,2001 Revenues: Intergovernmental Investment income: Interest and dividends Change in fair value Total revenues Expenditures: Other services and charges Revenues over expenditures Other financing sources (uses): Transfers out Net change in fund balance Fund balance - beginning Fund balance - ending 2002 $118,602 22,691 5,577 146,870 387,571 (240,701) (238,057) (478,758) 478,758 $0 Statement 30 2001 $111,249 50,412 3,784 165,445 111,249 54,196 (5OO,OOO) (445,804) 924,562 $478,758 128 ' CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUNDS - HOUSING AND REDEVELOPMENT AUTHORITY (COMPONENT UNIT) COMBINING BALANCE SHEET December 3 l, 2002 Statement 31 Assets Cash and investments Receivables: Accounts Interest Due from other governmental units Real estate held for resale Total assets Liabilities and Fund Balance Parkview Parkview Villa Villa Rental North South Housing $432,356 $135,404 $42,388 81 607 - 4,792 1,208 539 240,629 - - - 144,723 Total $610,148 688 6,539 240,629 144,723 $677,858 $137,219 $187,650 $1,002,727 Liabilities: Accounts payable $167,962 $12,512 $994 Accrued salaries and withholdings payable 52 52 - Due to other governmental units 22,171 14,797 1,367 Interfund payable - ~ i 44,800 Deposits 13,280 7,268 !,432 Total liabilities 203,465 34,629 148,593 474,393 102,590 144,723 (105,666) $181,468 104 38,335 144,800 21,980 386,687 Fund balance: Reserved for real estate held for resale Reserved for program expenditures Unreserved: Designated for maintenance Undesignated Total fund balance Total liabilities and fund balance 144,723 474,393 102,590 (105,666) 474,393 102,590 39,057 616,040 $677,858 $137,219 $187,650 $1,002,727 129 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUNDS - HOUSING AND REDEVELOPMENT AUTHORITY COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 2002 (COMPONENT UNIT) Statement 32 Revenues: Intergovernmental revenue Rents Investment income: Interest and dividends Change in fair value Other revenues: Miscellaneous Total revenues Expenditures: Personal services Supplies Other services and charges Capital outlay Total expenditures Revenues over expenditures Other financing sources (uses): Transfers (out) Total other financing sources (uses) Net change in fund balance Fund balance - beginning Fund balance - ending Parkview Parkview Villa Villa Rental North South Housing $367,847 $ 284,198 191,944 22,613 5,701 5,557 1,401 2,078 1,342 682,293 200,388 $ 16,450 2,545 625 195 19,815 Total $367,847 492,592 30,859 7,583 3,615 902,496 9,111 6,263 15,374 10,221 6,359 580 17,160 270,710 141,364 11,308 423,382 248,336 9,089 257,425 538,378 163,075 11,888 713,341 143,915 37,313 7,927 189,155 (7,884) (5,914) (7,884) (5,914) 0 136,031 31,399 7,927 338,362 71,191 31,130 $474,393 $102,590 $39,057 (13,798) (13,798) 175,357 440,683 $616,040 130 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - HOUSING & REDEVELOPMENT AUTHORITY- PARKVIEW VILLA NORTH - SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 31,2001 2002 Budget Amounts Actual Original Final Amounts Variance with Final Budget- Positive (Negative) Statement 33 2001 Actual Amounts Revenues: Intergovernmental revenue $50,000 $50,000 $367,847 $317,847 $98,791 Rents 270,000 270,000 284,198 14,198 266,979 Investment income: Interest and dividends 9,000 9,000 22,613 13,613 17,376 Change in fair value 5,557 5,557 1,304 Other 4,000 4,000 2,078 (1,922) 4,999 Total revenues 333,000 333,000 682,293 349,293 389,449 Expenditures: Personal services 19,239 i 9,239 9,111 10,128 10,335 Supplies 30,012 30,012 10,221 19,791 27,200 Other services and charges 293,267 293,267 270,710 22,557 273,412 Capital outlay 32,670 32,670 248,336 (215,666) 18,273 Total expenditures 375,188 375,188 538,378 (163,190) 329,220 Revenues over (under) expenditures (42,188) (42,188) 143,915 i 86,103 60,229 (7,884) (7,884) - ($50,072) 136,031 $186,103 Other financing sources (uses): Transfers (out) (7,884) Net change in fund balance 338,362 $474,393 Fund balance - beginning Fund balance - ending ($50,072) (7,335) 52,894 285,468 $338,362 131 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - HOUSING & REDEVELOPMENT AUTHORITY - PARKVIEW VILLA SOUTH - SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 3 I, 2001 Revenues: Rents Investment income: Interest and dividends Change in fair value Other Total revenues 2002 Budgeted Amounts Original Final Actual Amounts Variance with Final Budget- Positive (Negative) Statement 34 Expenditures: Personal services Supplies Other services and charges Capital outlay Total expenditures 2001 Actual Amounts Revenues over expenditures $186,800 $186,800 $191,944 $5,144 $191,640 26,000 26,000 5,701 (20,299) 40,612 1,401 1,401 3,048 4,500 4,500 1,342 (3,158) 1,616 217,300 217,300 200,388 (16,912) 236,916 Other financing sources (uses): Transfers (out) 9,410 9,410 6,263 3,147 2,768 9,497 9,497' 6,359 3,138 15,479 156,436 156,436 141,364 15,072 146,352 37,330 37,330 9,089 28,241 4,894 212,673 212,673 163,075 49,598 169,493 4,627 4,627 37,313 32,686 67,423 (5,914) 31,399 Net change in fund balance (,5,914) $32,686 Fund balance - beginning 71,191 $102,590 Fund balance - ending ($ ! ,287) (5,914) ($1,287) (703,670) (636,247) 707,438 $71,191 132 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - HOUSING & REDEVELOPMENT AUTHORITY - RENTAL HOUSING - SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 31,2001 Revenues: Rents Investment income: Interest and dividends Change in fair value Other revenue: Miscellaneous Total revenues 2002 Budgeted Amounts Original Final $16,800 $16,800 Actual Amounts $16,450 Variance with Final Budget- Positive (Negative) ($350) 450 450 2,545 2,095 - 625 625 17,250 ! 7,250 195 19,815 195 2,565 Expenditures: Personal services Supplies Other services and charges Capital outlay Total expenditures 2,795 2,795 580 2,215 13,686 13,686 11,308 2,378 2,000 2,000 - 2,000 18,481 18,481 ($1,231) ($1,231) 11,888 7,927 31,130 $39,057 6,593 $9,158 Net change in fund balance Fund balance - beginning Fund balance - ending Statement 35 2001 Actual Amounts $17,734 1,711 128 298 19,871 351 347 10,764 11,462 8,409 22,721 $31,130 133 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUNDS - ECONOMIC DEVELOPMENT AUTHORITY (COMPONENT UNIT) COMBINING BALANCE SHEET December 31, 2002 Assets Cash and investments Receivables: Taxes Interest Loans Real estate held for resale Total assets Liabilities and Fund Balance Liabilities: Accounts payable Accrued salaries and withholdings payable Deferred revenue Total liabilities Fund balance: Reserved for real estate held for resale Reserved for program expenditures Unreserved: Undesignated Total fund balance Total liabilities and fund balance Economic Business Development Revolving Authority Loan Administration Fund Statement 36 Total $94,670 $301,241 $395,911 772 2,931 3,703 1,423 5,239 6,662 - 10,433 10,433 - 21,113 21,113 $96,865 $340,957 $ 12,729 12,729 21,113 306,428 687 328,228 $340,957 $2,377 250 2,627 94,238 94,238 $96,865 $437,822 $2,377 250 12,729 15,356 21,113 306,428 94,925 422,466 $437,822 134 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUNDS - ECONOMIC DEVELOPMENT AUTHORITY COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES lN FUND BALANCE For The Year Ended December 31, 2002 (COMPONENT UNIT) I Economic Development Authority Administration Business Revolving Loan Fund Section 8 Revenues: Taxes Intergovernmental revenue Fees/program revenues Investment income: Interest and dividends Change in fair value Other revenues: Miscellaneous Total revenues $119,834 209,650 6,715 1,650 4,210 342,059 $98,241 12,944 12,542 24,723 6,076 154,526 $ 15,531 15,531 Expenditures: Personal services Supplies Other services and charges Loans and grants Total expenditures .53,107 5,457 40,714 209,650 308,928 12 12 0 Revenues over expenditures 33,131 154,514 15,531 Other financing sources (uses): Transfers in Transfers (out) Total other financing sources (uses) 17,500 (107,884) (90,384) 24,000 (382,579) (358,579) (204,065) 532,293 $328,228 85,877 85,877 101,408 (101,408) $0 Net change in fund balance (57,253) Fund balance (deficit) - beginning 151,491 $94,238 Fund balance - ending Statement 37 Total $218,075 238,125 12,542 31,438 7,726 4,210 512,116 53,107 5,457 40,726 209,650 308,940 203,176 127,377 (490,463) (363,086) (159,910) 582,376 $422,466 135 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - ECONOMIC DEVELOPMENT AUTHORITY - EDA ADMINISTRATION - SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 31, 2001 Budgeted Amounts Original Final 2002 Revenues: Taxes $137,015 Intergovernmental revenue Fees/program revenues - Investment income: Interest and dividends - Change in fair value - Other revenues: Miscellaneous - Total revenues 137,015 $137,015 137,015 Actual Amounts $119,834 209,650 6,715 1,650 4,210 342,059 Variance with Final Budget- Positive (Negative) ($17,181) 209,650 6,715 1,650 4,210 205,044 Statement 38 2001 Actual Amounts $118,508 335,350 140 15,986 469,984 Expenditures: Personal services 75,828 75,828 53,107 22,721 31,403 Supplies 3,570 3,570 5,457 (1,887) 1,217 Other services and charges 49,733 49,733 40,714 9,019 60,710 Loans and grants - 209,650 (209,650) 335,350 Total expenditures 129,13 ! 129,131 308,928 (i 79,797) 428,680 33,131 25,247 Revenues over expenditures 7,884 7,884 17,500 (107,884) (90,384) (57,253) 151,491 $94,238 17,500 17,500 $42,747 Other financing sources (uses): Transfers in Transfers (out) Total other financing sources (uses) (7,884) (7,884) Net change in fund balance Fund balance - beginning Fund balance - ending (107,884) (107,884) $0 ($100,000) 41,304 (22,281) (22,281) 19,023 132,468 $151,491 136 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - ECONOMIC DEVELOPMENT AUTHORITY BUSINESS REVOLVING LOAN FUND: SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 31,2001 Revenues: Taxes Intergovernmental Fees/program revenues Investment income: Interest and dividends Change in fair value Total revenues 2002 Budgeted Amounts Actual Original Final Amounts Variance with Final Budget- Positive (Negative) $111,702 $111,702 $98,241 12,944 12,542 ($13,461) 12,944 12,542 24,723 6,076 24,723 6,076 Statement 39 Expenditures: Other services and charges Total expenditures Revenues over expenditures 2001 Actual Amounts Other financing sources (uses): Transfers in Transfers (out) Total other financing sources (uses) $94,499 12,903 29,828 25,374 1,904 111,702 111,702 154,526 42,824 164,508 - '- 12 (12) 4,223 0 0 12 (12~. 4,223 Net change in fund balance 111,702 111,702 154,514 42,812 160,285 Fund balance - beginning - 24,000 (111,702) (382,579) (382,579) (111,702) (382,579) (358,579) Fund balance - ending $0 ($270,877) (204,065) 24,000 24,000 $66,812 532,293 $328,228 (106,752) (106,752) 53,533 478,760 $532,293 137 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - ECONOMIC DEVELOPMENT AUTHORITY - SECTION 8 HOUSING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 2002 With Comparative Totals For the Year Ended December 31,2001 Statement 40 Revenues: Intergovernmental revenue Investment income: Interest Other Total revenues Expenditures: Personal services Other services and charges Total expenditures Revenues over expenditures Other financing sources (uses): Transfers in Net change in fund balance Fund balance (deficit) - beginning Fund balance - ending 2002 $15,531 15,531 0 15,531 85,877 101,408. (101,408) $0 2001 $2,640 716 40 3,396 986 8,493 9,479 (6,083) (6,083) (95,325) ($101,408) 138 ~ NONMAJOR DEBT SERVICE FUNDS The City of Columbia Heights had the following Debt Service Funds during the year: Tax Increment Bond Funds - are separate funds used to account for each separate Tax Increment Bond Issue revenues and expenditures. These bonds are repaid primarily from tax increments. Special Assessment Improvement Bonds - are repaid primarily from special assessments. 139 CITY OF COLUMBIA HEIGHTS, MINNESOTA SUBCOMBINING BALANCE SHEET NONMAJOR DEBT SERVICE FUNDS December 31, 2002 Statement 41 Assets Cash and investments Receivables: Taxes: Unremitted Delinquent Interest Inter fund receivable Total assets Liabilities and Fund Balance Liabilities: Due to other governmental units Interfund payable Deferred revenue: Property taxes - delinquent Total liabilities Fund balance (deficit): Unreserved: Designated for debt service Undesignated Total fund balance (deficit) Total liabilities and fund balance Tax Increment Bonds $465,176 2,591 10,012 15,532 52,572 $545,883 10,012 10,012 535,871 535,871 $545,883 Multi-Use Redevelopment Plan $0 $7 52,572 52,579 (52,579) (52,579) $0 G.O. Improvement 1999A $697,819 6,535 $704,354 704,354 704,354 $704,354 Totals $1,162,995 2,591 10,012 22,067 52,572 $1,250,237 $7 52,572 10,012 62,591 1,240,225 (52,579) 1,187,646 $1,250,237 141 CITY OF COLUMBIA HEIGHTS, MINNESOTA SUBCOMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND NET ASSETS NONMAJOR DEBT SERVICE FUNDS For The Year Ended December 3 I, 2002 Revenues: Tax increments Intergovernmental Investment income: Interest and dividends Change in fair value Total revenues Expenditures: Debt service: Principal retirement Interest and fiscal charges Miscellaneous Total expenditures Revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers (out) Total other financing sources (uses) Net change in fund balance Fund balance (deficit) - beginning Fund balance (deficit) - ending Tax Increment Bonds $610,109 84,509 73,296 18,013 785,927 17,926 17,926 768,001 (I,112,130) (1,112,130) (344,129) 880,000 $535,871 Capital Appreciation Bonds of 1990 391,515 494,235 885,750 (885,750) 885,750 885,750 $o 142 Statement 42 T~x Increment Refunding Bonds of 1991 0 Multi-Use Redevelopment Plan $16,981 410 17,391 G.Oo Improvement 1999A 30,839 7,579 38,418 Total $627,090 84,919 104,135 25,592 841,736 220,000 6,380 226,380 (226,380) 226,380 226,380 $0 12,311 12,311 5,080 0 5,080 (57,659) ($52,579) 105,000 30,370 135,370 (96,952) 70,721 70,721 (26,231) 730,585 $704,354 716,515 530,985 30,237 1,277,737 (436,001) 1,182,851 (I,112,130) 70,721 (365,280) 1,552,926 $1,187,646 143 NONMAJOR CAPITAL PROJECT FUNDS The City of Columbia Heights had the following Capital Project Funds during the year: Capi,tal Improvement Fund 401 - used to account for Capital Project Funds whereby funding is provided by a number of internal and external sources. Downtown Parking Maintenance Fund 405 - used for maintenance of the West Side Parking. Sheffield Redevelopment Fund 410 - used to fund redevelopment of the area of the City identified as Sheffield Neighborhood. Capital Improvement Parks Fund 412 - used to account for improvements in City parks. Capital Improvement PWS Fund 414 - used to account for improvements to Parkview Villa South building. Capital Improvement Development Fund 420 - used to account for improvements to various development areas within the City. Infrastructure Replacement Fund 430 - used to fund replacement of City infrastructure. Capital Equipment Fire Fund 439 - used to fund replacement of fire capital assets. Capital Equipment Cable TV - used to fund replacement of cable capital assets. Capital Building Library- used to fund replacement of the library building. TIF District #2 Fund 407 - used to account for revenues and expenditures located within the Tax Increment Financing District #2. TIF Medtronics Fund 378 - used to account for revenues and expenditures located within the Medtronics Tax Increment Financing District. TIF Scattered Site Fund 379 - used to account for revenues and expenditures located within the Scatter Site Tax Increment Financing District. TIF Transition Block Fund 389 - used to account for revenues and expenditures located within the Transition Block Tax Increment Financing District. 145 CITY OF COLUMBIA HEIGHTS, MINNESOTA SUBCOMBIN1NG BALANCE SHEET NONMAJOR CAPITAL PROJECT FUNDS December 3 !, 2002 Statement 43 Page 1 of 2 Assets Cash and investments Receivables: Special assessments: Unremitted Interest Due from other governmental units Interfund receivable Total assets Liabilities and Fund Balance Liabilities: Accounts payable Contracts payable - retained percentage Interfund payable Total liabilities Fund balance (deficit): Unreserved: Designated for capital improvement Undesignated Total fund balance (deficit) Total liabilities and fired balance Capital Improvement $530,036 463 $530,499 $ 1,000 1,000 529,499 529,499 $530,499 Downtown Parking Maintenance $730,200 3,418 $733,618 $1,326 1,326 732,292 732,292 $733,618 Capital Sheffield Redevelopment Fund 410 $483,133 $483,133 483,133 483,133 $483,133 Capital Improvement Parks Fund 412 $745,807 7,744 $753,551 229,855 523,696 753,551 $753,551 147 CITY OF COLUMBIA HEIGHTS, MINNESOTA SUBCOMB1NING BALANCE SHEET NONMAJOR CAPITAL PROJECT FUNDS December 31, 2002 Assets Cash and investments Receivables: Special assessments: Unremitted Interest Due fi.om other governmental units Interfund receivable Total assets Liabilities and Fund Balance Liabilities: Accounts payable Contracts payable - retained percentage lnterfund payable Total liabilities Fund balance (deficit): Unreserved: Designated for capital improvement Undesignated Total fund balance (deficit) Total liabilities and fund balance Capital Improvement PVVS Fund 414 $742,071 7,862 $749,933 749,933 749,933 $749,933 Capital Improvement Development Fund 420 $888,253 393 3,039 $891,685 $8,916 8,916 882,769 882,769 $891,685 Replacement Fund 430 $214,554 5,325 157,564 $377,443 377,443 377,443 $377,443 Capital Equipment Fire Fund 439 $656,402 7,076 $663,478 663,478 663,478 $663,478 148 Statement 43 Page 2 of 2 Capital Equipment Cable TV Fund 440 $300,000 $300,000 Capital Building Library Fmad 450 $200,000 $200,000 TIF District #2 Fund 407 TIF Medtronics Fund 378 $210,452 1,809 $212,261 TIF Scattered Site Fund 379 $916 205 276 $1,397 TIF Transition Block Fund 389 $9 $9 Totals $5,701,833 205 34,366 3,039 157,564 $5,897,007 $ 2,243 2,243 $52,129 52,129 35,000 35,000 $62,371 1,000 37,243 100,614 300,000 300,000 $300,000 200,000 200,000 $200,000 (2,243) (2,243) $0 160,132 160,132 $212,261 (33,603) (33,603) $1,397 9 5,148,402 647,991 5,796,393 $5,897,007 149 CITY OF COLUMBIA ltEIGlt'rs, MINNESOTA SUBCOMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR CAPITAL PROJECT FUNDS For The Year Ended December 31, 2002 Revenues: Tax increment Intergovernmental Investment income: Interest and dividends Change in fair value Other revenues: Miscellaneous Project reimbursement Total revenues Expenditures: Developer incentives Contractual services Repair and maintenance Capital outlay Total expenditures Revenue over (under) expenditures Other financing sources (uses): Transfers in Transfers (out) Total other financing sources (uses) Net change in fund balance Fund balance (deficit) - beginning Fund balance (deficit) - ending Capital Improvement 2,187 537 1,613 4,337 4,170 4,170 167 2,932 2,932 3,099 526,400 $529,499 Downtown Parking Maintenance 16,129 3,964 20,093 20,771 20,771 (678) 0 (678) 732,970 $732,292 Capital Sheffield Redevelopment Fund 410 0 0 612,293 612,293 612,293 (129,160) $483,133 Statement 44 Page I of 2 Capital Improvement Parks Fund 412 36,542 8,981 18,750 5,200 69,473 2,041 26,610 28,651 40,822 0 40,822 712,729 $753,551 151 CITY OF COLUMBIA HEIGHTS, MINNESOTA SUBCOMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR CAPITAL PROJECT FUNDS For The Year Ended December 3 l, 2002 Revenues: Tax increment Intergovernmental Investment income: Interest and dividends Change in fair value Other revenues: Miscellaneous Project reimbursement Total revenues Expenditures: Developer incentives Contractual services Repair and maintenance Capital outlay Total expenditures Revenue over (under) expenditures Other financing sources (uses): Transfers in Transfers (out) Total other financing sources (uses) Net change in fund balance Fund balance (deficit) - beginning Fund balance (deficit) - ending Capital Improvement PWS Fund 414 37,098 9,117 46,215 0 46,215 0 46,215 703,718 $749,933 152 Capital Improvement Development Fund 420 $ 3,039 1,857 456 5,352 37,583 37,583 (32,231) 915,000 915,000 882,769 $882,769 Infrastructure Replacement Fund 430 25,127 6,175 31,302 0 31,302 (144,380) (144,380) (113,078) 490,521 $377,443 Capital Equipment Fire Fund 439 33,393 8,207 41,600 1,839 70,591 72,430 (30,830) 0 (30,830) 694,308 $663,478 Statement 44 Page 2 of 2 Capital Equipment Cable TV Fund 440 Capital Building Library Fund450 TIF District #2 Fund 407 TIF Medtronic Fund 378 $116,269 8,537 2,098 126,904 TIF Sca~eredSi~ Fund 379 $17,156 3,896 1,306 321 22,679 TIF Transition Block Fund 389 $9 Totals $133,434 6,935 162,176 39,856 18,750 6,813 367,964 0 0 300,000 300,000 300,000 $300,000 0 0 200,000 200,000 200,000 $200,000 0 0 0 0 (2,243) {$2,243) 104,258 419 104,677 22,227 0 22,227 137,905 $160,132 62 62 22,617 (76,105) (76,105) (53,488) 19,885 ($33,603) 104,258 38,064 28,821 97,201 268,344 99,620 2,030,225 (220,485) $9 0 1,809,740 9 1,909,360 3,887,033 $5,796,393 153 ENTERPRISE FUNDS The authority for these types of funds is derived from Section 69(b) of the City Charter which allows for Utility or other Public Service Enterprise Funds. The Enterprise Funds are members of the Proprietary Fund Type category, and, as such, are accounted for on the accrual basis of accounting. Revenues in the Enterprise Funds are recognized when they are earned and expenses are recognized when they are incurred. The Enterprise Funds are used to account for operations that are either financed and operated in a manner similar to private business enterprises or where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. Water Utili _ty Fund - used to account for revenues and expenses associated with services to area residents. Sewer Utility Fund - used to account for revenues and expenses associated with sewer disposal within the City. Refuse Utility Fund - used to account for revenues and expenses associated with organized collection of refuse and recycling in the City. Storm Sewer Utility Fund - used to account for revenues and expenses associated with storm water disposal. Liquor Fund - used to account for revenues and expenses associated with the operation of three off-sale liquor stores. 155 CITY OF COLUMBIA HEIGHTS, MINNESOTA WATER UTILITY FUND SUBCOMBINING SCHEDULE OF NET ASSETS December 3 !, 2002 With Comparative Totals For December 31,2001 Statement 45 Operating Account Current assets: Cash and cash equivalents $39,923 Receivables: Accounts (net of allowance for uncollectables) 283,783 Interest 1,457 Due from other governmental units 1,160 Interfund receivable 63,676 Inventory, at cost 2,864 Total current assets 392,863 Noncurrent assets: Capital assets: Land 45,223 Buildings 447,305 Improvements other than buildings 5,550,711 Office furniture and fixtures 25,259 Machinery and equipment 206,972 Cons~-uction in process - Total capital assets Less: accumulated depreciation Total capital assets (net of accumulated depreciation) 3,983,516 Total noncurrent assets 3,983,516 Total assets 4,376,379 Liabilities Current liabilities: Accounts payable 3,702 Accrued salaries and withholdings payable 3,044 Duc to other governmental units 256,999 Interfund payable Accrued interest payable Deposits 3,744 Compensated absences payable - current 385 Bonds payable - current Total current liabilities 267,874 Noncurrent liablilities: Compensated absences payable-non current 12,79 ! Bonds payable - noncurrent Total noncurrent liabilities 12,791 Total liabilities 280,665 Net Assets Invested in capital assets, net of related debt Restricted for debt service Unrestricted Total net assets Capital Equipment Replacement Account Capital Construction Account Debt Totals Service 2002 2001 $ - $39,923 $322,790 3,189 321,943 283,783 285,538 2,022 6,668 11,656 1,160 293,056 678,675 490,335 2,864 4,708 325,132 0 295,078 1,013,073 1,115,027 45,223 45,223 447,305 462,288 5,550,711 5,381,373 25,259 - 206,972 330,376 21,377 6,275,470 (2,291,954) 325,132 295,078 6,275,470 6,240,637 (2,291,954) (2,244,524) 3,983,516 3,996,113 3,983,516 3,996,113 4,996,589 5,111,140 678,675 14,420 94,032 3,702 2,649 3,044 14,253 256,999 155,719 678,675 490,335 14,420 15,741 3,744 3,744 385 94,032 91,426 0 ~78,675 108,452 1,055,001 773,867 12,791 767,988 767,988 862,020 0 767,988 780,779 862,020 0 678,675 876,440 1,835,780 1,635,887 3,983,516 i12,198 $4,095,714 325,132 (678,675) (862,020) 3,121,496 3,134,093 280,658 280,658 252,433 (241,245) 88,727 $325,132 ($678,675) ($581,362) $3,160,809 $3,475,253 156 CITY OF COLUMBIA HEIGHTS, MINNESOTA WATER UTILITY FUND SUBCOMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31, 2001 Statement 46 Capital Equipment Capital Operating Replacement Conslruction Debt Totals Account Account Account Service 2002 2001 Operating revenues: Charges for services: Customer services $32,117 Penalties 32,774 Charges for sales: Water 1,252,015 Meter 6,432 Total operating revenues 1,323,338 $32,117 $25,913 32,774 31,118 1,252,015 1,311,179 68,274 74,706 80,273 0 0 68,274 1,391,612 1,448,483 Operating expenses: Cost of sales and services Distribution Adminisl~ation Depreciation Total operating expenses 910,316 910,316 983,112 471,116 471,116 424,114 8,426 8,426 7,779 161,970 161,970 163,622 1,551,828 0 0 0 1,551,828 1,578,627 (228,490) 0 0 68,274 (160,216) (130,144) Net income from operations Nonoperating revenues (expenses): Inveslment income: Interest and dividends Change in fair value Miscellaneous revenues Interest and fiscal charges Miscellaneous expenses Total nonoperating revenues (expenses) 6,877 15,047 - 9,543 31,467 51,701 1,690 3,698 2,345 7,733 3,880 57 57 31 (35,152) (35,152) (38,203) (1,987) 8,624 18,745 0 (23,264) 4,105 15,422 Net income (loss) before transfers (219,866) 18,745 0 45,010 (156,111) (!14,722) Transfers in Transfers out Total transfers 209,717 25,000 74,641 309,358 1,765,241 (219,007) (209,717) (428,724) (1,881,925) (9,290) 25,000 (209,717) 74,641 (119,366) (116,684) Change in net assets (229,156) 43,745 (209,717) 119,651 (275,477) (23 ! ,406) Total net assets - beginning, as previously stated Change in accounting principle Total net assets - beginning, as restated 4,363,837 281,387 (468,958) (701,013) 3,475,253 3,706,659 (38,967) (38,967) 4,324,870 281,387 (468,958) (701,013) 3,436,286 3,706,659 $4,095,714 $325,132 ($678,675) ($581,362) $3,160,809 $3,475,253 Total net assets - ending 157 CITY OF COLUMBIA HEIGHTS, MINNESOTA WATER UTILITY FUND SUBCOMBINING SCHEDULE OF CASH FLOWS For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31,2001 Cash flows from operating activities: Cash received from customers Cash paid to suppliers for goods and services Cash payments to employees for services Miscellaneous revenues Miscellaneous expenses Net cash flows fi.om operating activities Cash flows fi.om noncapital financing activities: Transfers in Transfers out Net cash flows from noncapital financing activities Cash flows from capital and related financing activities: Acquisition of capital assets Disposition of capital assets Principal payments - bonds Interest and fiscal charges Net cash flows fi.om capital and related financing activities Cash flows fi.om investing activities: Investment income: Interest and dividends Change in fair value Net cash flows from investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents - January 1 Cash and cash equivalents - December 31 Reconcihation of operating income to net cash flows from operating activities Operating income (loss) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Miscellaneous revenues Miscellaneous expenses Depreciation expense Changes in assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in interfimd receivables {Increase) decrease in due fi.om other governmental units (Increase) decrease in inventory, at cost Increase (decrease) in accounts payable Increase (decrease) in accrued salaries and withholdings payable Increase (decrease) in contracts payable-retained percentage Increase (decrease) in due to other governmental units Increase (decrease) in interfund payables Increase (decrease) in compensated absences payable Total adjustments Net cash flows fi.om operating activities 2002 $1,203,867 (847,327) (248,047) 57 108,550 309,358 (428,724) (119,366) (209,717) 21,376 (91,426) (36,473) (316,240) 36,456 7,733 44,189 (282,867) 322,790 $39,923 ($160,216) 57 161,970 1,755 (188,340) (1,160) 1,844 1,053 (11,209) 101,280 188,340 13,176 268,766 $108,550 Statement 47 2001 $1,068,813 (818,775) (242,235) 31 (1,987) 5,847 1,765,241 (1,881,925) (116,684) (285,600) (57,468) (39,057) (382,125) 49,333 3,880 53,213 (439,749) 762,539 $322,790 ($130,144) 31 (1,987) 163,622 9,060 (388,730) 1,728 (1,413) (8,850) (131,341) 104,660 389,211 135,991 $5,847 158 . CITY OF COLUMBIA HEIGHTS, MINNESOTA SEWER UTILITY FUND SUBCOMBINING SCHEDULE OF NET ASSETS December 31, 2002 With Comparative Totals For December 31,2001 Statement 48 Assets Current assets: Cash and cash equivalents Receivables: Accounts (net of allowance for uncollectables) lntcrest Due from other governmental units Interfund receivables Total current assets Noncurrent assets: Due from other governmental units Capital Assets: Land Buildings Improvements other than buildings Office furniture and fixtures Machincry and equipment Consa'uction in process Total capital assets Less: accumulated depreciation Total capital assets (net of accummulated depreciation) Total noncurrent assets Total assets Liabilities Current liabilities: Accounts payable Accrued salaries and withholdings payable Accrued interest payable Compensated absences payable - current Bonds payable - current Total current liabilities Noncurrent liabilities: Compensated absences payable - noncurrent Bonds payable - noncurrent Total noncurrent liabilities Total liabilities Net Assets Invested in capital assets, net of related debt Restricted for debt service Unrestricted Total net assets Capital Equipment Capital Operating Replacement Construction Debt Totals Account Account Account Service 2002 2001 $1,294,614 $427,008 $953,572 $4,711 $2,679,905 $2,588,726 263,948 263,948 272,205 13,266 4,271 11,852 29,389 29,099 - 7,999 96,404 527,000 623,404 551,563 !,668,232 431,279 1,492,424 4,711 3,596,646 3,449,592 200,083 200,083 220,962 36,586 36,586 36,586 45,201 45,201 57,942 4,153,263 4,153,263 3,976,079 40,964 40,964 418,383 418,383 570,097 - 5 5 1,456 4,694,397 0 5 0 4,694,402 4,642,160 (2,678,294) (2,678,294) (2,672,143) 2,016,103 0 5 0 2,016,108 !,970,017 2,216,186 0 5 0 2,216,191 2,190,979 3,884,418 431,279 1,492,429 4,711 5,812,837 5,640,571 4,763 - 4,763 778 2,734 2,734 13,214 - 547 547 597 385 385 3,568 3,568 3,469 7,882 0 0 4,115 11,997 18,058 12,791 12,791 29,136 29,136 32,704 12,791 0 0 29,136 41,927 32,704 20,673 0 0 33,251 53,924 50,762 2,016,103 (32,704) !,983,399 1,937,313 - 4,164 4,164 3,964 1,847,642 431,279 1,492,429 3,771,350 3,648,532 $3,863,745 $431,279 $1,492,429 ($28,540) $5,758,913 $5,589,809 159 CITY OF COLUMBIA HEIGHTS, MINNESOTA SEWER UTILITY FUND SUBCOMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31, 2001 Ill Statement 49 Operating revenues: Charges for sales and services: Sewer service charges Capital Equipment Capital Operating Replacement Construction Debt Account Account Account Service Totals 2002 2001 $1,204,112 $ $ $ $1,204,112 $1,215,330 Operating expenses: Cost of sales and services Distribution Adminis~afion Depreciation Total operating expenses 669,354 669,354 660,588 271,038 271,038 271,009 10,288 10,288 11,479 130,073 130,073 132,444 1,080,753 0 0 0 1,080,753 1,075,520 123,359 0 0 0 123,359 139,810 Net income from operations Nonoperating revenues (expenses) Investment income: Interest and dividends Change in fair value Intergovernmental Miscellaneous revenues Interest and fiscal charges Miscellaneous expenses Total nonoperating revenues (expenses) Net income (loss) before transfers Transfers in Transfers out Total transfers Change in net assets Total net assets - beginning, as previously stated Change in accounting principle Total net assets - beginning, as restated Total net assets - ending 62,600 20,156 55,930 2 138,688 131,525 15,385 4,953 13,745 34,083 9,686 198 198 3,327 16,824 16,824 38,041 (!,333) (1,333) (1,450) (9,132) 95,007 25,109 69,675 (1,331) 188,460 171,997 218,366 25,109 69,675 (1,331) 311,819 311,807 220,965 25,000 5,000 250,965 352,074 (149,364) (210,965) (360,329) (199,090) 71,601 25,000 (210,965) 5,000 (109,364) 152,984 289,967 50,109 (141,290) 3,669 202,455 464,791 3,607,129 381,170 i,633,719 (32,209) 5,589,809 5,125,018 (33,351) - (33,351) 3,573,778 381,170 1,633,719 (32,209) 5,556,458 5,125,018 $3,863,745 $431,279 $1,492,429 ($28,540) $5,758,913 $5,589,809 160 CITY OF COLUMBIA HEIGHTS, MINNESOTA SEWER UTILITY FUND SUBCOMBINING SCHEDULE OF CASH FLOWS For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31,2001 Statement 50 Cash flows from operating activities: Cash received from customers Cash paid to suppliers for goods and services Cash payments to employees for services Miscellaneous revenues Miscellaneous expenses Net cash flows fi.om operating activities Cash flows fi.om noncapital financing activities: Transfers in Transfers out Net cash flows from noncapital financing activities Cash flows from capital and related financing activities: Acquisition of capital assets Disposition of capital assets Principal payments - bonds Interest and fiscal charges Net cash flows fi.om capital and related financing activities Cash flows from investing activities: Investment income: Interest and dividends Change in fair value Net cash flows fi.om investing activities Net increase in cash and cash equivalents Cash and cash equivalents - January 1 Cash and cash equivalents - December 31 Reconciliation of operating income to net cash flows from operating activities Operating income Adjustments to reconcile operating income to net cash flows from operating activities: Miscellaneous revenues Miscellaneous expenses Depreciation expense Changes in assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in due from other governmental units (Increase) decrease in interfund receivables Increase (decrease) in accounts payable Increase (decrease) in accrued salaries and withholdings payable Increase (decrease) compensated absences payable Total adjustments Net cash flows from operating activities 2002 $1,169,406 (785,058) (158,940) 17,022 242,430 250,965 (360,329) (I 09,364) (2O9,516) (3,469) (1,383) (214,368) 138,398 34,083 172,481 91,179 2,588,726 $2,679,905 $123,359 17,022 130,073 8,257 28,878 (71,841) 3,986 (10,480) 13,176 119,071 $242,430 2001 $1,278,835 (779,478) (172,319) 41,368 (9,132) 359,274 352,074 (199,090) 152,984 (58,O54) 204,117 (2,180) (1,482) 142,401 119,614 9,686 129,300 783,959 1,804,767 $2,588,726 $139,810 41,368 (9,132) 132,444 8,686 17,079 37,740 (1,633) (7,088) 219,464 $359,274 161 CITY OF COLUMBIA HEIGHTS, MINNESOTA REFUSE UTILITY FUND SUBCOMBINING SCHEDULE OF NET ASSETS December 31, 2002 With Comparative Totals For December 31,2001 Assets Current assets: Cash and cash equivalents Receivables: Accounts (net of allowance for uncollectables) Interest Due from other governmental units Total current assets Noncurrent assets: Capital assets: Buildings Improvements other than buildings Machinery and equipment Total capital assets Less: accumulated depreciation Total capital assets (net of accumulated depreciation) Total noncurrent assets Total assets Liabilities Current liabilities: Accounts payable Total liabilities Net assets Invested in capital assets, net of related debt Unrestricted Total net assets 162 2002 $605,231 280,375 6,772 20,382 912,760 6,000 11,566 97,124 114,690 (40,961) 73,729 73,729 986,489 208,101 208,101 73,729 704,659 $778,388 Statement 51 2001 $610,125 283,646 9,762 17,762 921,295 6,000 14,456 107,681 128,137 (41,717) 86,420 86,420 1,007,715 102,194 102,194 86,420 819,101 $905,521 CITY OF COLUMBIA HEIGHTS, MINNESOTA REFUSE UTILITY FUND SUBCOMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31, 2001 Statement 52 Operating revenues: Refuse service charges Operating expenses: Cost of sales and services Administration Recycling Hazardous waste Depreciation Total operating expenses Net income (loss) from operations Nonoperating revenues (expenses): Investment income: Interest and dividends Change in fair value Intergovernmental Miscellaneous revenues Total nonoperating revenues (expenses) Net income before transfers Transfers out Change in net assets Total net assets - beginning, as previously stated Change in accounting principle Total net assets - beginning, as restated Total net assets - ending 2002 $1,247,692 1,251,827 12,964 12,712 1,959 11,169 1,290,631 (42,939) 31,956 7,854 53,780 1,290 94,880 51,941 (177,552) (125,611) 905,521 (1,522) 903,999 $778,388 2001 $1,237,355 1,229,432 11,391 16,115 2,670 12,238 1,271,846 (34,491) 43,300 3,250 54,963 1,843 103,356 68,865 (166,960) (98,095) 1,003,616 1,003,616 $905,521 163 CITY OF COLUMBIA HEIGHTS, MINNESOTA REFUSE UTILITY FUND SUBCOMBIN1NG SCHEDULE OF CASH FLOWS For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31,2001 Cash flows from operating activities: Cash received from customers Cash paid to suppliers for goods and services Cash payments to employees for services Miscellaneous revenues Net cash flows from operating activities Cash flows from noncapital financing activities: Transfers out Cash flows from investing activities: Investment income: Interest and dividends Change in fair value Net cash flows from investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents - January 1 Cash and cash equivalents - December 31 Reconciliation of operating income to net cash flows from operating activities Operating income (loss) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Miscellaneous revenues Depreciation expense Changes in assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in due from other governmental units Increase (decrease) in accounts payable Total adjustments Net cash flows from operating activities 2002 $1,248,343 (1,172,974) (581) 55,070 129,858 (177,552) 34,946 7,854 42,800 (4,894) 610,125 $605,231 ($42,939) 55,070 11,169 3,271 (2,620) 105,907 172,797 $129,858 Statement 53 2001 $1,222,836 (1,257,581) (627) 56,806 21,434 (166,960) 43,003 3,250 46,253 (99,273) 709,398 $610,125 ($34,491) 56,806 12,238 3,243 (17,762) 1,400 55,925 $21,434 164 CITY OF COLUMBIA HEIGHTS, MINNESOTA STORM SEWER UTILITY FUND SUBCOMB1NING SCHEDULE OF NET ASSETS December 31, 2002 With Comparative Totals For December 31, 2001 Assets Current assets: Cash and cash equivalents Receivables: Accounts (net of allowance for uncollectables) Interest Due from other governmental units Total current assets Noncurrent assets: Capital assets: Land Improvements other than buildings Construction in process Total capital assets Less: accumulated depreciation Total capital assets (net of accummulated depreciation) Total noncurrent assets Total assets Liabilities Current liabilities: Accounts payable Accrued salaries and withholdings payable Interfund payable Accrued interest payable Bonds payable - current Total current liabilities Noncurrent liabilities: Bonds payable - noncurrent Total liabilities Net Assets Invested in capital assets, net of related debt Restricted for debt service Unrestricted Total net assets Statement 54 Capital Equipment Capital Operating Replacement Construction Debt Totals Account Account Account Service 2002 2001 $5,754 $12,255 $89,667 $ - $107,676 $85,683 36,237 - - 36,237 36,217 263 97 1,315 - 1,675 6,541 - 14,955 - 14,955 42,254 12,352 105,937 0 160,543 128,441 254,724 - 254,724 - 774,028 - 774,028 675,867 37,901 37,901 270,917 !,028,752 0 37,901 0 1,066,653 946,784 (53,360) - (53,360) (19,664) 975,392 0 37,901 0 1,013,293 927,120 975,392 0 37,901 0 1,013,293 927,120 1,017,646 12,352 143,838 0 1,173,836 1,055,561 169 169 1,325 69 69 12 - 96,404 96,404 30,843 12,635 12,635 13,792 - 82,400 82,400 80,105 238 0 0 191,439 191,677 126,077 - 672,876 672,876 755,276 238 0 0 864,315 864,553 881,353 975,392 - (755,276) 220,116 171,844 - (109,039) (109,039) (44,635) 42,016 12,352 143,838 198,206 46,999 $1,017,408 $12,352 $143,838 ($864,315) $309,283 $174,208 165 CITY OF COLUMBIA HEIGHTS, MINNESOTA STORM SEWER UTILITY FUND SUBCOMBIN1NG SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS For The Year Ended December 3 l, 2002 With Comparative Totals For The Year Ended December 31,2001 Statement 55 Operating revenues: Charges for sales and services: Storm sewer service charges Capital Equipment Capital Operating Replacement Construction Account Account Account Debt Totals Service 2002 2001 $172,975 $ $ - $ $172,975$172,654 Operating expenses: Distribution Administration Depreciation Total operating expenses 97,672 - 97,672 73,139 1,233 - 1,233 33,988 - 33,988 13,989 132,893 0 0 0 132,893 87,128 Net income from operations 40,082 0 0 0 40,082 85,526 Nonoperating revenues (expenses): Investment income: Interest and dividends Change in fair value Intergovernmental Interest and fiscal charges Total nonoperating revenues (expenses) 1,239 455 6,205 7,899 29,009 304 ll2 1,525 1,941 2,178 130,339 130,339 - (30,799) (30,799) (33,473) 1,543 567 138,069 (30,799) 109,380 (2,286) Net income (loss) before transfers 41,625 567 138,069 (30,799) 149,462 83,240 Transfers in Transfers out Total transfers 362,210 5,800 32,900 46,500 447,410 517,291 (95,200) (362,210) (457,410) (517,291) 267,010 5,800 (,329,310,) 46,500 (I0,000) 0 Change in net assets 308,635 6,367 (191,241) 15,701 139,462 83,240 Total net assets - beginning, as previously stated Change in accounting principle Total net assets - beginning, as restated 713,160 5,985 335,079 (880,016) 174,208 90,968 (4,387) - (4,387) 708,773 5,985 335,079 (880,016) 169,821 90,968 Total net assets - ending $1,017,408 $12,352 $143,838 ($864,315) $309,283 $174,208 166 CITY OF COLUMBIA HEIGHTS, MINNESOTA STORM SEWER UTILITY FUND SUBCOMBINING SCHEDULE OF CASH FLOWS For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31,2001 Statement 56 Cash flows from operating activities: Cash received from customers Cash paid to suppliers for goods and services Cash payments to employees for services Net cash flows from operating activities Cash flows from noncapital financing activities: Transfers in Transfers out Net cash flows from noncapital financing activities Cash flows from capital and related financing activities: Acquisition of capital assets Principal payments - bonds Proceeds of capital grants and contributions Interest and fiscal charges Net cash flows from capital and related financing activities Cash flows from investing activities: Investment income: lnterest and dividends Change in fair value Net cash flows from investing activities Net increase in cash and cash equivalents Cash and cash equivalents- January 1 Cash and cash equivalents - December 31 Reconciliation of operating income to net cash flows from operating activities Operating income Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation expense Changes in assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in due from other governmental units Increase (decrease) in accounts payable Increase (decrease) in accrued salaries and withholdings payable Increase (decrease) in inteffund payable Total adjustments Net cash flows from operating activities 2002 $158,000 20,009 (54,452) 123,557 447,410 (457,410) (10,000) (124,548) (80,105) 130,339 (31,956) (106,270) 12,765 1,941 14,706 21,993 85,683 $107,676 $40,082 33,988 (20) (14,955) (1,156) 57 65,561 83,475 $123,557 2001 $175,935 2,313 (51,533) 126,715 517,291 (517,291) 0 (572,622) (50,352) (34,220) (657,194) 32,006 2,178 34,184 (496,295) 581,978 $85,683 $85,526 13,989 3,281 (6,936) 12 30,843 41,189 $126,715 167 CITY OF COLUMBIA HEIGHTS, MINNESOTA LIQUOR FUND SUBCOMBINING SCHEDULE OF NET ASSETS December 31, 2002 With Comparative Totals For December 31,2001 Assets Current assets: Cash and cash equivalents Receivables: Interest Due from other governmental units Interfund receivables Inventory, at cost Total current assets Noncurrent assets: Capital assets: Land Buildings Improvements other than buildings Office furniture and fixtures Machinery and equipment Total capital assets Less: accumulated depreciation Net capital assets (net of accumulated depreciation) Total noncurrent assets Total assets Liabilities Current liabilities: Accounts payable Accrued salaries and withholdings payable Due to other governmental units Compensated absences payable - current Total current liabilities Noncurrent liabilities: Compensated absences payable - noncurrent Total liabilities Net Assets Invested in capital assets, net of related debt' Unrestricted Total net assets Operating Account $1,956,292 18,834 2,024 1,188,663 3,165,813 4,360 162,239 81,198 14,791 289,381 551,969 (484,486) 67,483 67,483 3,233,296 234,286 10,617 58,612 883 304,398 29,352 333,750 67,483 2,832,063 $2,899,546 168 Statement 57 Capital Equipment Replacement Account Totals 2002 2001 $26,839 276 27,115 $1,983,131 19,110 2,024 1,188,663 3,192,928 $1,575,193 21,236 1,612 169,000 902,315 2,669,356 0 0 0 27,115 4,360 162,239 81,198 14,791 289,381 551,969 (484,486) 67,483 67,483 3,260,411 4,360 181,631 103,409 370,187 659,587 (568,613) 90,974 90,974 2,760,330 0 0 27,115 $27,115 234,286 10,617 58,612 883 304,398 29,352 333,750 67,483 2,859,178 $2,926,661 127,578 40,630 67,787 235,995 235,995 90,974 2,433,361 $2,524,335 CITY OF COLUMBIA HEIGHTS, MINNESOTA LIQUOR FUND SUBCOMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31,2001 Statement 58 Top Valu Operating Accounts Total Top Heights Operating Valu II Liquor Accounts Operating revenues: Charges for sales: Liquor $975,992 $672,080 $456,694 $2,104,766 Beer 1,490,330 1,215,554 810,063 3,515,947 Wine 322,695 297,150 66,199 686,044 Other 245,553 166,468 138,529 550,550 Total operating revenues 3,034,570 2,351,252 1,471,485 6,857,307 Capital Equipment Replacement Account Totals 2002 2001 $2,104,766 $2,023,135 3,515,947 3,504,000 686,044 645,396 550,550 623,853 0 6,857,307 6,796,384 Operating expenses: Cost of goods sold 2,336,230 Operating expense 537,723 Depreciation 1,375 Total operating expenses 2,875,328 1,810,383 1,107,985 5,254,598 369,309 186,349 1,093,381 10,202 1,352 12,929 2,189,894 1,295,686 6,360,908 5,254,598 5,267,398 1,093,381 1,048,677 12,929 20,732 0 6,360,908 6,336,807 Net income from operations $159,242 $161,358 $175,799 496,399 0 496,399 459,577 Nonoperating revenues (expenses): Investment income: Interest and dividends Change in fair value Miscellaneous revenues Miscellaneous expenses Total nonoperating revenues (expenses) 88,875 !,305 90,180 94,196 21,842 321 22,163 7,069 26,037 26,037 8,014 (3,939) (3,939) (10,000) 132,815 1,626 134,441 99,279 629,214 1,626 630,840 558,856 (217,954) (217,954) (213,000) 411,260 1,626 412,886 345,856 2,498,846 25,489 2,524,335 2,178,479 (10,560) (10,560) 2,488,286 25,489 2,513,775 2,178,479 $2,899,546 $27,115 $2,926,661 $2,524,335 Net income before transfers Transfer out Change in net assets Total net assets - beginning, as previously stated Change in accounting principle Total net assets ~ beginning, as restated Total net assets - ending 169 CITY OF COLUMBIA HEIGHTS, MINNESOTA LIQUOR FUND SUBCOMBINING SCHEDULE OF CASH FLOWS For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31,2001 Cash flows from operating activities: Cash received from customers Cash paid to suppliers for goods and services Cash payments to employees for services Miscellaneous revenues Miscellaneous expenses Net cash flows from operating activities Cash flows from noncapital financing activities: Transfers out Net cash flows from noncapitai financing activities Cash flows from investing activities: Investment income: Interest and dividends Change in fair value Net cash flows from investing activities Net increase in cash and cash equivalents Cash and cash equivalents - January I Cash and cash equivalents - December 31 Reconciliation of operating income to net cash flows from operating activities Operating income Adjustments to reconcile operating income to net cash flows from operating activities: Miscellaneous revenues Miscellaneous expenses Depreciation expense Changes in assets and liabilities; (Increase) decrease in accounts receivable (Increase) decrease (Increase) decrease (Increase) decrease (Increase) decrease Increase (decrease) Increase (decrease) Increase (decrease) in due from other governmental units in interfund receivables in prepayments in inventory, at cost in accounts payable in accrued salaries and withholdings payable in due to other governmental units Increase (decrease) in compensated absences payable Total adjustments Net cash flows from operating activities 170 2002 $7,025,895 (5,865,191) (671,379) 26,037 (3,939) 511,423 (217,954) (217,954) 92,306 22,163 114,469 407,938 1,575,193 $1,983,131 $496,399 26,037 (3,939) 12,929 (412) 169,000 (286,346) 106,708 (30,013) (9,175) 30,235 15,024 $511,423 Statement 59 2001 $6,802,303 (5,981,613) (641,038) 8,014 (10,000) 177,666 (213,000) (213,000) 87,885 7,069 94,954 59,620 1,515,573 $1,575,193 $459,577 8,014 (10,000) 20,732 6,221 (302) 15,865 (245,600) (72,826) (10,677) 6,662 (281,911) $177,666 INTERNAL SERVICE FUNDS Internal Service Funds are used to account for the financing on a cost reimbursement basis of goods or services provided by one department or agency to other departments or agencies within the City. Central Garage Fund - used to account for the costs of operating a maintenance facility for automotive equipment used by other City departments. Such costs are billed to other departments at actual cost plus a fixed overhead factor. The automotive equipment itself is acquired by the various user departments which are responsible for financing replacement vehicles as necessary. Energy Management Fund - used to account management and maintenance within the City. allocated to user departments. for the costs associated with energy All costs are recorded in the fund and Insurance Fund - used to account for certain costs of the City's risk management services and to build a reserve for catastrophic losses. All costs for claims and claims administration are recorded in the fund and allocated to user funds based on a percentage risk factor. Insurance premiums are recorded directly in the user funds. Compensated Absences Fund - used to account for funds that have been set aside by the City Council for compensated absences. 171 CITY OF COLUMBIA HEIGHTS, MINNESOTA INTERNAL SERVICE FUNDS COMBINING SCHEDULE OF NET ASSETS December 3 i, 2002 With Comparative Totals For December 31,2001 Statement 60 Assets Current assets: Cash and cash equivalents Receivables: Accounts (net of allowance for uncollectables) Interest Prepayments Inventory, at cost Total current assets Noncurrent assets: Capital assets: Buildings Improvements other than buildings Machinery and equipment Total capital assets Less: accumulated depreciation Total capital assets (net of accumulated depreciation) Total noncurrent assets Total assets Liabilities Current liabilities: Accounts payable Accrued salaries and withholdings payable Compensated absences payable - current Total current liabilities Noncurrcnt liabilitcs: Compensated absences payable - noncurrent Total noncurrent liabilities Total liabilities Central Data Compensated Garage Processin~ Insurance Absences Totals 2002 2001 $98,327 $509,043 $567,543 $564,153 $1,739,066 $1,682,345 2,453 2,453 2,631 232 282 5,425 5,939 22,508 12,477 12,477 84,276 66,359 66,359 56,110 167,371 509,325 585,445 564,153 1,826,294 1,847,870 371,383 371,383 800,859 119,847 119,847 439,128 77,044 26,139 103,183 278,453 568,274 26,139 0 0 594,413 1,518,440 (408,455) (18,737) (427,192) (1,248,760) 159,819 7,402 0 0 167,221 269,680 159,819 7,402 0 0 167,221 269,680 327,190 516,727 585,445 564,153 1,993,515 2,117,550 10,296 13,734 24,030 22,355 1,394 1,922 3,316 2,373 724 153 877 12,414 15,809 0 0 28,223 24,728 24,071 5,074 547,495 576,640 538,466 24,071 5,074 0 547,495 576,640 538,466 36,485 20,883 0 547,495 604,863 563,194 Net Assets Invested in capital assets, net of related debt 159,819 7,402 ! 67,221 269,680 Unrestricted 130,886 488,442 585,445 16,658 1,221,431 1,284,676 Total net assets $290,705 $495,844 $585,445 $16,658 $1,388,652 $1,554,356 172 CITY OF COLUMBIA HEIGHTS, MINNESOTA INTERNAL SERVICE FUNDS COMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31, 2001 Statement 61 Operating revenues: Charges for services: Services to departments Use of space Insurance allocation Recovery of damages Charges for sales: Sales of gasoline Total operating revenues Operating expenses: Cost of services and space Claims administration Claims Depreciation Total operating expenses Net income (loss) from operations Nonoperating revenues: Investment income: Interest and dividends Change in fair value Miscellaneous revenues Total nonoperating revenues Net income (loss) before transfers Transfers in Transfers out Total transfers Central Energy Data Compensated Garage Manasement Processin~ Insurance Absences Totals 2002 2001 $143,133 $ $ $ $ $143,133$114,082 184,762 184,762 163,573 478,373 478,373 363,641 14,029 14,029 52,830 57,543 57,543 66,508 385,438 0 0 492,402 0 877,840 760,634 311,400 189,211 418,531 - 919,142 896,531 - 837 - 837 5,476 32,165 - 32,165 328,716 37,511 8,713 - 46,224 65,003 348,911 0 197,924 451,533 0 998,368 1,295,726 36,527 0 (197,924) 40,869 0 (120,528) (535,092) 1,097 1,333 25,602 28,032 99,835 269 327 6,292 6,888 7,493 3,022 3,022 3,177 4,388 0 1,660 31,894 0 37,942 110,505 40,915 0 (196,264) 72,763 0 (82,586) (424,587) 4,000 310,000 314,000 319,000 (94,500) (107,646) (138,737) (340,883) (94,000) (90,500) (107,646) 310,000 0 (138,737) (26,883) 225,000 Change in net assets (49,585) (107,646) 113,736 72,763 (138,737) (109,469) (199,587) Total net assets - beginning, as previously stated Change in accounting principle Total net assets - beginning, as restated Total net assets -ending 360,005 107,646 418,628 512,682 155,395 1,554,356 1,753,943 (19,715) (36,520) (56,235) 340,290 107,646 382,108 512,682 155,395 1,498,121 1,753,943 $290,705 $0 $495,844 $585,445 $16,658 $1,388,652 $1,554,356 173 CITY OF COLUMBIA HEIGHTS, MINNESOTA INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 3 l, 2001 Statement 62 Cash flows from operating activities: Cash received from interfund services provided Cash paid to suppliers for goods and services Cash payments to employees for services Miscellaneous revenues Net cash flows from operating activities Cash flows from noncapital financing activities: Transfers in Transfers out Net cash flows from noncapital financing activities Cash flows from capital and related financing activities: Acquisition of fixed assets Net cash flows from capital and related financing activities Cash flows from investing activities: Investraent income: Interest and dividends Change in fair value Net cash flows from investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents - January I Cash and cash equivalents - December 31 Reconciliation of operating income (loss) to net cash flows from operating activities Operating income (loss) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Miscellaneous revenues Depreciation expense Changes in assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in prepayments (Increase) decrease in inventory, at cost Increase (decrease) in accounts payable Increase (decrease) in claims payable Increase (decrease) in accrued salaries and withholdings payable Increase (decrease) in compensated absences payable Total adjustments Net cash flows from operating activities Central Ener~m] Data Compensated Totals Garase Manal~ement Processin[g Insurance Absences 2002 2001 $385,616 $ - $ $492,402 $37,552 $915,570 $797,543 (182,767) (47,970) (379,734) (610,471) (1,037,710) (142,590) (133,416) (276,006) (274,883) 3,022 3,022 5,798 63,281 0 (181,386) 112,668 37,552 32,115 (509,252) 4.000 310.000 314,000 319.000 (94,500,) (107,646) 038,737) (340,883),, (94.000,) (90.500) (107,646) 310.000 0 038,737) (26,883) 225,000 - (36,236) 0 0 0 0 0 0 (36,236) 2,674 1,350 5,197 27,758 7,622 44,601 97,978 269 327 6,292 6,888 7,493 2,943 1,350 5,524 34,050 7,622 51,489 105,471 (24,27~ (106,296) 134,138 146,718 (93,563) 56,721 (215,017) 122,603 106,296 374,905 420,825 657,716 1,682,345 1,897,362 $98,327 $0 $509,043 $567,54.3. $564,153 $1,739,066 $1,682,345 $36,527 $ ($197,924) $40,869 $ ($120,528) ($535,092) 3,022 3,022 3,177 37.511 8,713 46,224 65,003 178 178 3,646 71,799 71,799 7,464 {10,249) (10,249) (8,136) (5,580) 7,255 1,675 (25,328) (61,495) (435) 579 37,552 37,696 41,509 2,307 (9) 2,298 26,754 0 16,538 71,799 37,552 152,643 25,840 $63,281 $0 ($181,386) $112,668 $37,552 $32,115 ($509,252) 174 CITY OF COLUMBIA HEIGHTS, MINNESOTA CENTRAL GARAGE FUND SUBCOMBINING SCHEDULE OF NET ASSETS December 31, 2002 With Comparative Totals For December 31, 2001 Assets Current assets: Cash and cash equivalents Receivables: Accounts (net of allowance for uncollectables) Interest Invento~d, at cost Total current assets Noncurrent assets: Capital assets: Buildings Improvements other than buildings Machine~ and equipment Total capital assets Less: accumulated depreciation Total capital assets (net of accumulated depreciation Total noncurrent assets Total assets Liabilities Current liabilities: Accounts payable Accrued salaries and withholdings payable Compensated absences payable - current Total current liabilities Noncurrent liabilites: Compensated absences payable - noncurrent Total noncurrent liabilities Total liabilities Net Assets Invested in capital assets, net of related debt Unrestricted Total net assets Operating Account $73,776 2,453 66,359 142,588 371,383 119,847 77,044 568,274 (408,455) 159,819 159,819 302,407 10,296 1,394 724 12,414 24,071 24,071 36,485 159,819 106,103 $265,922 Capital Equipment Replacement Account $24,551 232 24,783 0 0 0 24,783 0 0 24,783 $24,783 Statement63 Totals 2002 2001 $98,327 2,453 232 66,359 167,371 $122,603 2,631 1,809 56,110 183,153 371,383 119,847 77,044 568,274 (408,455) 159,819 159,819 327,190 404,988 124,218 120,177 649,383 (432,338) 217,045 217,045 400,198 10,296 1,394 724 12,414 24,071 24,071 36,485 159,819 130,886 $290,705 15,876 1,829 17,705 22,488 22,488 40,193 217,045 142,960 $360,005 175 CITY OF COLUMBIA HEIGHTS, MINNESOTA CENTRAL GARAGE FUND SUBCOMBIN1NG SCHEDULE OF REVENUES, EXPENSES AND CHANGES 1N FUND NET ASSETS For The Year Ended December 31,2002 With Comparative Totals For The Year Ended December 31,2001 Operating revenues: Charges for services: Services to departments Use of space Charges for sales: Sales of gasoline Total operating revenues Operating expenses: Cost of services and space Depreciation Total operating expenses Net income (loss) from operations Nonoperating revenues: Investment income: Interest and dividends Change in fair value Miscellaneous revenues Total nonoperating revenues Net income (loss) before transfers Transfers in Transfers out Total transfers Change in net assets Total net assets - beginning, as previously stated Change in accounting principle Total net assets - beginning, as restated Total net assets - ending Operating Account $143,133 184,762 57,543 385,438 311,400 37,511 348,911 36,527 3,022 3,022 39,549 (94,500) (94,500) (54,951) 340,588 (19,715) 320,873 $265,922 Capital Equipment Replacement Account 1,097 269 1,366 1,366 4,000 4,000 5,366 19,417 19,417 $24,783 Statement 64 Totals 2002 2001 $143,133 184,762 57,543 385,438 311,400 37,511 348,911 36,527 $114,082 163,573 66,508 344,163 328,722 42,951 371,673 (27,510) 1,097 269 3,022 4,388 40,915 4,000 (94,500), (90,500) (49,585) 360,005 (19,715) 340,290 $29O,705 8,022 602 3,177 11,801 (15,709) 19,000 (94,000) (75,000) (90,709) 450,714 450,714 $36O,O05 176 CITY OF COLUMBIA HEIGHTS, MINNESOTA CENTRAL GARAGE FUND SUBCOMBINING SCHEDULE OF CASH FLOWS For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31,2001 Statement 65 Cash flows from operating activities: Cash received from interfimd services provided Cash paid to suppliers for goods and services Cash payments to employees for services Miscellaneous revenues Net cash flows from operating activities Cash flows from noncapital financing activities: Transfers in Transfers out Net cash flows from noncapital financing activities Cash flows from capital and related financing activities: Acquisition of fixed assets Net cash flows from capital and related financing activities Cash flows from investing activities: Investment income: Interest and dividends Change in fair value Net cash flows from investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents - January I Cash and cash equivalents - December 31 Reconciliation of operating income (loss) to net cash flows from operating activities Operating income (loss) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Miscellaneous revenues Depreciation expense Changes in assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in inventory, at cost Increase (decrease) in accounts payable Increase (decrease) in accrued salaries and withholdings payable Increase (decrease) in compensated absences payable Total adjustments Net cash flows from operating activities 2002 $385,616 (182,767) (142,590) 3,022 63,281 4,000 (94,500) (90,500) 0 2,674 269 2,943 (24,276) 122,603 $98,327 $36,527 3,022 37,511 178 (10,249) (5,580) (435) 2,307 26,754 $63,281 2001 $345,188 (182,940) (147,866) 3,177 17,559 19,000 (94,000) (75,000) (2,668) (2,668) 8,376 602 8,978 (51,131) 173,734 $122,603 ($27,510) 3,177 42,951 1,025 (8,136) 2,668 3,384 45,069 $17,559 177 CITY OF COLUMBIA HEIGHTS, MINNESOTA ENERGY MANAGEMENT FUND SUBCOMBIN1NG SCHEDULE OF NET ASSETS December 3 I, 2002 With Comparative Totals For December 31,2001 Assets Current assets: Cash and cash equivalents Receivables: Interest Total current assets Noncurrent assets: Capital assets: Buildings Improvements other than buildings Total capital assets Less: accumulated depreciation Total capital assets (net of accumulated depreciation) Total assets Liabilities Current liabilities: Total liabilities Net Assets Unrestricted Total net assets 2002 0 0 $0 Statement 66 2001 $106,296 1,350 107,646 395,871 314,910 710,781 (710,781) 0 107,646 0 107,646 $107,646 178 CITY OF COLUMBIA HEIGHTS, MINNESOTA ENERGY MANAGEMENT FUND SUBCOMBIN1NG SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31,2001 Statement 67 Operating revenues: Operating expenses: Net income from operations Nonoperating revenues: Investment income: Interest and dividends Change in fair value Total nonoperating revenues Net income before operating transfers Operating transfers: Transfer out Change in net assets Total net assets - beginning Total net assets - ending 2002 0 0 0 (107,646) (107,646) 107,646 $0 2001 0 5,988 449 6,437 6,437 6,437 101,209 $107,646 179 CITY OF COLUMBIA HEIGHTS, MINNESOTA ENERGY MANAGEMENT FUND SUBCOMBINING SCHEDULE OF CASH FLOWS For The Year Ended December 3 l, 2002 With Comparative Totals For The Year Ended December 31,2001 Cash flows from operating activities: Miscellaneous revenues Net cash flows from operating activities Cash flows from noncapital financing activities: Transfers out Cash flows from investing activities: Investment income: Interest and dividends Change in fair value Net cash flows from investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents - January 1 Cash and cash equivalents - December 31 Reconciliation of operating income to net cash flows from operating activities Operating income Adjustments to reconcile operating income to net cash flows from operating activities: Miscellaneous revenues Total adjustments Net cash flows from operating activities 180 2002 $ 0 (107,646) 1,350 1,350 (106,296) 106,296 $0 0 $0 Statement 68 2001 $2,621 2,621 5,134 449 5,583 8,204 98,092 $106,296 2,621 2,621 $2,621 CITY OF COLUMBIA HEIGHTS, MINNESOTA DATA PROCESSING FUND SUBCOMBINING SCHEDULE OF NET ASSETS December 31, 2002 With Comparative Totals For December 31,2001 Assets Current assets: Cash and cash equivalents Interest receivable Total current assets Noncurrent assets: Capital assets: Machinery and equipment Total capital assets Less: accumulated depreciation Net capital assets (net of accumulated depreciation) Total noncurrent assets Total assets Liabilities Current liabilities: Accounts payable Accrued salaries and withholdings payable Compensated absences payable - current Total liabilities Noncurrent liabilites: Compensated absences payable - noncurrent Total noncurrent liabilities Total liabilities Net Assets Invested in capital assets, net of related debt Unrestricted Total net assets Operating Account $481,634 481,634 26,139 26,139 (l 8,737) 7,402 7,402 489,036 13,734 1,922 153 15,809 5,074 5,074 20,883 7,402 460,751 $468,153 Capital Equipment Replacement Account $27,409 282 27,691 0 0 0 27,691 0 0 0 27,691 $27,691 Statement 69 Totals 2002 $509,043 282 509,325 26,139 26,139 (18,737) 7,402 7,402 516,727 2001 $374,905 4,146 379,051 158,276 158,276 (105,641) 52,635 52,635 431,686 13,734 1,922 153 15,809 5,074 5,074 20,883 7,402 488,442 $495,844 6,479 1,343 7,822 5,236 5,236 13,058 52,635 365,993 $418,628 181 CITY OF COLUMBIA HEIGHTS, MINNESOTA DATA PROCESSING FUND SUBCOMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31,2001 Operating Account Operating revenues: $ Operating expenses: Cost of services 189,211 Depreciation 8,713 Total operating expenses 197,924 Net income (loss) from operations (197,924) Nonoperating revenues: Investment income: Interest and dividends Change in fair value Total nonoperating revenues Net income (loss) before transfers Transfers in Change in net assets Total net assets - beginning, as previously stated Change in accounting principle Total net assets - beginning, as restated Total net assets - ending 0 (197,924) 310,000 I 12,076 392,597 (36,520) 356,077 $468,153 Capita~ Equipment Replacement Account 1,333 327 1,660 ! ,660 1,660 26,031 26,03 ! $27,691 Statement 70 Totals 2002 $ 189,211 8,713 197,924 (197,924) 2001 $ 172,471 22,052 194,523 (194,523) 1,333 327 1,660 (196,264) 310,000 113,736 418,628 (36,520) 382,108 $495,844 18,391 1,380 19,771 (174,752) 300,000 125,248 293,380 293,380 $418,628 182 CITY OF COLUMBIA HEIGHTS, MINNESOTA DATA PROCESSING FUND SUBCOMBINING SCHEDULE OF CASH FLOWS For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31,2001 Statement 71 Cash flows from operating activities: Cash paid to suppliers for goods and services Cash payments to employees for services 'Net cash flows from operating activities Cash flows from noncapital financing activities: Transfers in Net cash flows from noncapital financing activities Cash flows from capital and related financing activities: Acquisition of fixed assets Net cash flows fi.om capital and related financing activities Cash flows from investing activities: Investment income: Interest and dividends Change in fair value Net cash flows fi.om investing activities Net increase in cash and cash equivalents Cash and cash equivalents - January 1 Cash and cash equivalents - December 31 Reconciliation of operating income (loss) to net cash flows from operating activities Operating income (loss) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation expense Changes in assets and liabilities: Increase (decrease) in accounts payable Increase (decrease) in accrued salaries and withholdings payable Increase (decrease) in compensated absences payable Total adjustments Net cash flows from operating activities 2002 ($47,970) {133,416) (181,386) 310,000 310,000 0 5,197 327 5,524 134,138 374,905 $509,043 ($197,924) 8,713 7,255 579 (9) 16,538 ($181,386) 2001 ($71,199) (127,017) (198,216) 300,000 300,000 (33,568) (33,568) 16,489 1,380 17,869 86,085 288,820 $374,905 ($194,523) 22,052 (27,986) 2,241 (3,693) ($198,216) 183 CITY OF COLUMBIA HEIGHTS, MINNESOTA INSURANCE FUND SUBCOMBINING SCHEDULE OF NET ASSETS December 3 l, 2002 With Comparative Totals For December 31, 2001 Assets Current assets: Cash and cash equivalents Receivables: Interest Prepayments Total assets Liabilities Current liabilities: Total liabilities Net Assets Unrestricted Total net assets 184 2002 $567,543 5,425 12,477 585,445 0 585,445 $585,445 Statement 72 2001 $420,825 7,581 84,276 512,682 0 512,682 $512,682 CITY OF COLUMBIA HEIGHTS, MINNESOTA INSURANCE FUND SUBCOMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31,2001 Statement 73 Operating revenues: Insurance allocation Recovery of damages Total operating revenues Operating expenses: Insurance premiums Claims administration Claims Total operating expenses Net income from operations Nonoperating revenues: Investment income: Interest and dividends Change in fair value Total nonoperafing revenues Change in net assets Net assets - beginning Net assets - ending 2002 $478,373 14,029 492,402 418,531 837 32,165 451,533 40,869 25,602 6,292 31,894 72,763 512,682 $585,445 2001 $363,641 52,830 416,471 395,338 5,476 328,716 729,530 (313,059) 33,626 2,524 36,150 (276,909) 789,591 $512,682 185 CITY OF COLUMBIA HEIGHTS, MINNESOTA INSURANCE FUND SUBCOMBIN1NG SCHEDULE OF CASH FLOWS For The Year Ended December 3 i, 2002 With Comparative Totals For The Year Ended December 31,2001 Cash flows from operating activities: Cash received from damages Cash paid to suppliers for goods and services Net cash flows from operating activities Cash flows from investing activities: Investment income: Interest and dividends Change in fair value Net cash flows from investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents - January I Cash and cash equivalents - December 31 Reconciliation of operating income (loss) to net cash flows from operating activities Operating income (loss) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Changes in assets and liabilities: (Increase) decrease in prepayments Increase (decrease) in accounts payable Increase (decrease) in claims payable Total adjustments Net cash flows from operating activities 186 2002 $492,402 (379,734) 112,668 27,758 6,292 34,050 146,718 420,825 $567,543 $40,869 71,799 71,799 $112,668 Statement 74 2001 $416,471 (783,571) (367,100) 35,800 2,524 38,324 (328,776) 749,601 $420,825 ($3 ! 3,059) 7,464 (10) (61,495) (54,041 ) ($367,100) CITY OF COLUMBIA HEIGHTS, MINNESOTA COMPENSATED ABSENCES FUND SUBCOMBINING SCHEDULE OF NET ASSETS December 31, 2002 With Comparative Totals For December 31,2001 Statement 75 Assets Current assets: Cash and cash equivalents Interest receivable Total assets Liabilities Noncurrent liabilities: Compensated absences payable Total liabilities Net Assets Unrestricted Total net assets 2002 $564,153 564,153 547,495 547,495 16,658 $16,658 2001 $657,716 7,622 665,338 509,943 509,943 155,395 $155,395 187 CITY OF COLUMBIA HEIGHTS, MINNESOTA COMPENSATED ABSENCES FUND SUBCOMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31,2001 Operating revenues: Charges for services Operating expenses: Cost of services Net income from operations Nonoperating revenues: Investment income: Interest and dividends Change in fair value Total nonoperating revenues Net income before transfers Transfers out Change in net assets Total net assets - beginning Total net assets ~ ending 188 2002 $ 0 (138,737) (138,737) 155,395 $16,658 Statement 76 2001 $ - 0 33,808 2,538 36,346 36,346 36,346 119,049 $155,395 CITY OF COLUMBIA HEIGHTS, MINNESOTA COMPENSATED ABSENCES FUND SUBCOMBINING SCHEDULE OF CASH FLOWS For The Year Ended December 31, 2002 With Comparative Totals For The Year Ended December 31,2001 Cash flows from operating activities: Cash received from interftmd services provided Cash flows from investing activities: Investment income: Interest and dividends Change in fair value Net cash flows from investing activities Cash flows from noncapital financing activities: Transfers out Net cash flows from noncapital financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents - January 1 Cash and cash equivalents - December 31 Reconciliation of operating income to net cash flows from operating activities Operating income Adjustments to reconcile operating income to net cash flows from operating activities: Changes in assets and liabilities: Increase (decrease) in accrued salaries and withholdings payable Total adjustments Net cash flows from operating activities 189 2002 $37,552 7,622 7,622 (138,737) (138,737) (93,563) 657,716 $564,153 37,552 37,552 $37,552 Statement 77 2001 $35,884 32,179 2,538 34,717 0 70,601 587,115 $657,716 35,884 35,884 $35,884 TRUST AND AGENCY FUNDS Trust and Agency Funds are used to account for assets held by a government in a trustee or agent capacity for individuals, private organizations, other governments and the like. The City of Columbia Heights had the following Trust and Agency Funds during the year: Agency Funds: Permit Surcharge Fund - used to account for SAC charges and surcharges collected for and remitted to the State of Minnesota. Escrow Agency Fund - used to account for payroll-related assets and liabilities. 191 CITY OF COLUMBIA HEIGHTS, MINNESOTA COMBINING STATEMENT OF FIDUCIARY NET ASSETS December 31, 2002 Assets Cash and investments Total assets Liabilities Liabilities: Accounts payable Due to other governmental units Deposits Other liabilities Total liabilities Permit Surcharge Agency Fund $8,971 8,971 8,971 $8,971 192 Escrow Agency Fund $27,883 27,883 21,136 806 4,350 1,591 $27,883 Statement 78 Totals $36,854 36,854 21,136 9,777 4,350 1,591 $36,854 CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS 193 194 0 0 195 196 SUPPLEMENTARY FINANCIAL INFORMATION 197 CITY OF COLUMBIA HEIGHTS, MINNESOTA COMBINING SCHEDULE OF BONDS PAYABLE December 31, 2002 GENERAL LONG-TERM DEBT ACCOUNT GROUP; G.O. Tax Increment Bonds Capital Appreciation Bonds of 1990: Refunding Bonds of 1991: All bonds maturing on or after March 1, 2000 shall be subject to redemption and prior payment in whole or in part at the option of the issuer on March 1, 1999 and on any day thereafter at a price of par and accrued interest. G.O. Improvement Bonds Series 1999A: Bonds due on or after February 1, 2008 are callable commencing February 1, 2007 and on any date thereafter at a price of par plus accrued interest. Total Bonds - General Long Term Debt Account Group PROPRIETARY FUNDS G.O. Utility Revenue Bonds Series 1999B: Bonds due on or after February 1, 2008 are callable commencing February 1, 2007 and on any date thereafter at a price of par plus accrued interest. Total Bonds - Proprietary Funds Total General Obligation Bonds Interest Issue Maturity Rate Date Date 8/23/90 9/01 6.90% 6.95% 7.00% 7,00% 7.10% 7.10% 7.15% 7.15% 12/1/91 3/01 - 9/01 5.30% 5.50% 5.60% 5.70% 5.80% 2/01-8/01 5/!/99 3.45% 3.55% 3.65% 3.80% 3.90% 4.00% 4.10% 4.15% 4.25% 4.30% 2/01-8/01 5/1/99 3.45% 3.55% 3.65% 3.80% 3.90% 4.00% 4.10% 4.15% 4.25% 4.30% 9/1/09 3/1/02 2/1/10 2/1/10 198 Exhibit I Original Issue Balance 1/1/02 Sold Retired Balance 12/31/02 Interest Paid in Current Year $2,399,721 $2,399,721 $391,515 $2,008,206 $493,485 6,670,000 220,000 6,380 860,000 810,000 105,000 705,000 30,054 9,929,721 3,429,721 716,515 2,713,206 529,919 1,935,000 1,935,000 $11,864,721 1,825,0 1,825,0 $5,254,7: )0 0 175,000 175,000 $891,515 1,650,000 1,650,000 $4,363,206 69,496 69,496 $599,415 199 III. STATISTICAL SECTION (UNAUDITED) 201 Z rom ~Z ,I 202 ~0 ~r,D 203 Z ©m 204 205 206 207 ~0 ~.~ 0',, 0 0 0 0 208 CITY OF COLUMBIA HEIGHTS, MINNESOTA CITY TAX LEVY Years 1993 Through 2002 (Unaudited) Table 8 Fisc~ Ci~Levy General Year Tot~ Fund Library 1993 $3,463,645 $3,084,666 $378,979 1994 3,548,960 3,158,342 390,348 1995 3,587,209 3,196,861 390,348 1996 2,754,161 2,340,393 413,768 1997 3,038,144 2,517,101 422,043 1998 3,201,434 2,659,289 443,145 1999 3,238,625 2,660,059 467,518 2000 3,295,956 2,676,416 500,244 2001 3,625,552 2,958,490 547,767 2002 4,824,130 4,083,494 591,588 EDA 99,000 99,000 111,048 119,296 119,295 137,015 Source: Certification of Truth in Taxation document filed with Anoka County by the City of Columbia Heights. Special PERA 12,033 209 CITY OF COLUMBIA HEIGHTS, MINNESOTA PRINCIPAL TAXPAYERS December 31,2002 (Unaudited) Table 9 Taxpayer Medtronics, Inc. Bradley Operating LP Consolidated Reality of Minneapolis Maylan Construction Company Columbia Heights Center Columbia Park Properties Lake State Properties Crestview Lutheran Home Lynde Investment Co Jeff's Bobby &Steves Auto World Northern States Power Total Principal Taxpayers Type of Business Medical Manufacturing Commercial Apartments Retail (K-mart) Mall Medical Building Commercial Apartments Apartments Commercial Utility Tax Capacity Value $174,502 141,728 98,923 86,848 80,930 76,552 76,278 65,187 57,466 49,366 49,072 $956,852 % of Total City Tax Capacity Value 1.67% 1.36% 0.95% 0.83% 0.78% 0.73% 0.73% 0.62% 0.55% 0.47% 0.47% 9.17% Source: Anoka County: Taxes & Taxable Property in the City of Columbia Heights 210 211 CITY OF COLUMBIA HEIGHTS, MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN December 31, 2002 (Unaudited) Table 11 Market Value Debt Limit Percentage (Note A) Statutory Debt limit Amount of Debt applicable to debt limit: Total bonded debt Less: Tax increment bonds (Note B) Special assessment bonds Total amount of debt applicable to debt limit Legal debt margin Note A Note B 2001/2002 2000/2001 $775,336,500 $719,348,700 2% 2% 15,506,730 14,386,974 4,363,206 5,254,721 2,008,206 2,619,721 2,355,000 2,635,000 $13,151,730 $11,751,974 M.S.A. Section 475.53 (Limit on Debt) Subdivision 1. Generally, except as otherwise provided in Sections 475.51 to 475.75, "no municipality, except a school district or a city of the first class, shall incur or be subject to a net debt in excess of 2% of the taxable market value." M.S.A. Section 475.51 (definitions) Subdivision 4. "Net debt" means the amount remaining after deducting from its gross debt the amount of current revenues which are applicable within the current fiscal year to the payment of any debt and the aggregate of the principal of the following: 1. Obligations issued for improvements which are payable wholly or partly from the proceeds of special assessments levied upon property specially benefited thereby, including those which are general obligations of the municipality issuing them, if the municipality is entitled to reimbursement in whole or in part from the proceeds of the special assessments. 2. Warrants or orders having no definite or fixed maturity. 3. Obligations payable wholly from the income from revenue producing conveniences. 4. Obligations issued to create or maintain a Permanent Improvement Revolving Fund. 5. Obligations issued for the acquisition and betterment of public water works systems and public lighting, heating or power systems, and of any combination thereof or for any other public convenience from which a revenue is or may be derived. 6. Not applicable. 7. Amount of all money and face value of all securities held as a Debt Service Fund for the extinguishment of obligations other than those deductible under this subdivision. 8. All other obligations which under the provisions of law authorizing their issuance are not to be included in computing the net debt of the municipality. 212 213 214 CITY OF COLUMBIA HEIGHTS, MINNESOTA COMPUTATION OF DIRECT AND OVERLAPPING DEBT December 31, 2002 (Unaudited) Table 14 Direct debt: City of Columbia Heights Overlapping debt: Anoka County Metropolitan Council ISD 13 (Columbia Heights) Total overlapping debt Totals Net General Obligation Debt $4,363,206 93,445,000 221,700,000 31,140,000 346,285,000 $350,648,206 Percentage Applicable to City 100.0% 5.06% 5.06% 69.76% Amount Applicable to City of Columbia Heights Share of Debt $4,363,206 4,725,142 11,210,488 21,723,921 37,659,551 $42,022,757 Source: Anoka County Auditor Certificate 215 Z < z<~ 216 CITY OF COLUMBIA HEIGHTS, MINNESOTA PROPERTY VALUE AND CONSTRUCTION Years 1993 Through 2002 (Unaudited) Table 16 Property Value (A) Fiscal Year Real Personal Total 1993 $9,503,314 $207,255 $9,710,569 t994 9,226,574 207,309 9,433,883 1995 9,021,129 207,658 9,228,787 1996 8,884,233 220,961 9,105,194 1997 9,185,608 224,356 9,409,964 1998 8,840,736 193,445 9,034,181 1999 8,557,027 168,578 8,725,605 2000 9,219,621 161,709 9,381,330 2001 10,304,905 157,970 10,462,875 2002 8,756,307 91,466 8,847,773 (A) Tax capacity (1993-2002) values from Table 6. Construction Number of Units 5O5 565 596 6O2 678 869 1,254 794 671 625 Value $3,292,353 4,522,438 4,927,970 11,910,040 5,904,308 16,991,747 24,018,811 6,767,183 12,547,885 8,283,941 217 CITY OF COLUMBIA HEIGHTS, MINNESOTA MISCELLANEOUS STATISTICS December 31, 2002 (Unaudited) Date of Incorporation Date of Adoption of City Charter Form of Government Fiscal Year Begins Area of City Miles of Streets and Alleys: Trunk Highways County City Streets Alleys Miles of Sewers: Storm Sewers Sanitary Sewers Watermain Miles Building Permitslssued: 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Estimated Construction Cost forlssuedPermits: 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 218 Table 17 Page 1 of 2 March 14, 1898 July 21, 1921 Council-Manager January 1 3.52 Square Miles 3.0 6.2 61.8 18.9 33.6 59.0 66.1 505 565 596 6O2 678 869 1,254 794 671 625 3,292,353 4,522,438 4,927,970 11,910,040 5,904,308 16,991,747 24,018,811 6,767,183 12,547,885 8,283,941 CITY OF COLUMBIA HEIGHTS, MINNESOTA MISCELLANEOUS STATISTICS December 31, 2002 (Unaudited) Table 17 Page 2 of 2 Fire Protection: Number of Stations Number of Employees: Full-time Part-time Volunteer Police Protection: Number of Stations Number of Employees Parks: City Parks Playgrounds County Park Schools: Senior High Junior High Elementary Parochial Elementary Employees (as of December 31, 2002): Regular Part-time and Temporary 1 8 1 25 1 13 11 1 112 111 223 Elections: Registered voters - Last City General Election (11/05/02) Number of Votes Cast - Last City General Election Percentage of Registered Voters Voting Population: 1900 1920 1930 1940 1950 1960 1970 1975 1980 1985 1990 2000 (Mid-Decade Census) (Census) (Census) 10,261 8,405 81.91% 123 2,968 5,613 6,053 8,175 17,533 23,997 23,316 20,029 19,540 18,910 18,520 219 CITY OF COLUMBIA HEIGHTS, MINNESOTA DEMOGRAPHIC STATISTICS (Unaudited) Table 18 POPULATION, HOUSEHOLDS, AND HOUSEHOLD SIZE PROJECTIONS 2000 * Households Household Size (People/Household) Population POPULATION DEMOGRAPHICS 8,039 2.30 18,520 Number of Persons by Age: *** 4 and under 5-9 10- 14 15 - 19 20 - 24 25 - 34 35 - 44 45 - 54 55 - 59 60 - 64 65 - 74 75 - 84 85 and over Total population Total female population Total male population OCCUPATION INFORMATION Management, professional, and related occupations Service occupations Sales and office occupations Farming, fishing and forestry occupations Construction, maintenance, transportation and manufacturing occupations Persons 995 1,097 1,105 1,078 1,170 2,663 2,897 2,340 878 842 1,670 1,325 460 18,520 9,629 8,891 Median income per capita Median income per household Median income per family INCOME INFORMATION $21,368 $40,562 $50,610 Percent 5.37 5.92 5.97 5.82 6.32 14.38 15.64 12.63 4.74 4.55 9.02 7.15 2.48 100.00 51.99 48.01 28.00% 16.10 31.30 0.20 24.40 Source: 2000 Census Source: US Census Bureau, Profile of Occupation, Industry and Class of Worker: 2000 Source: US Census Bureau, Profile of General Demographic Characteristics: 2000 Source: US Census Bureau, Income and Poverty Status in 1999:2000 220 IV. SINGLE AUDIT AND OTHER REQUIRED REPORTS 221 Tautges Redpath, Ltd. Certified Public Accountants and Consultants Independent Auditor's Report on Compliance With Minnesota Legal Compliance Audit Guide for Local Govemments To The Honorable Mayor and Members of the City Council Columbia Heights, Minnesota We have audited the basic financial statements of the City of Columbia Heights, Minnesota, as of and for the year ended December 31, 2002, and have issued our report thereon dated April 9, 2003. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, and the provisions of the Minnesota Legal Compliance Audit Guide for Local Government promulgated by the Legal Compliance Task Force pursuant to Minnesota Statutes Section 6.65. Accordingly, the audit included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The Minnesota Legal Compliance Audit Guide for Local Government covers five main categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, and claims and disbursements. Our study included all of the listed categories. The results of our tests indicate that for the items tested, the City of Columbia Heights, Minnesota complied with the material terms and conditions of applicable legal provisions. This report is intended solely for the information and use of the City Council, management and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than those specified parties. April 9, 2003 HLB TAUTGES REDPATH, LTD. Certified Public Accountants 4810 White Bear Parkway, White Bear Lake, Minnesota 55110, USA Telephone: 651 426 7000 HLB 1-autges Redpath, ltd. is a member ofl International. A world-wide organization of accounting firms and business advisers. 223 Fax: 651 426 5004 Tautges Redpath, Ltd. Certified Public Accountants and Consultants Independent Auditor's Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards To the Honorable Mayor and Members of the City Council Columbia Heights, Minnesota We have audited the basic financial statements of the City of Columbia Heights, Minnesota as of and for the year ended December 31, 2002, and have issued our report thereon, dated April 9, 2003. We conducted our audit in accordance with auditing standards generally accepted in the United Stat~s of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the City of Columbia Heights, Minnesota's basic financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of basic financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City of Columbia Heights, Minnesota's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the basic financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgment, could adversely affect the City of Columbia Heights, Minnesota's ability to record, process, summarize, and report 4810 White Bear Parkway, White Bear Lake, Minnesota 55110, USA Telephone: 651 426 7000 Fax: 651 426 5004 HLB Tautges Redpath, Ltd. is a member of [] International. A world-wide organization of accounting firms and business advisers. 225 financial data consistent with the assertions of management in the basic financial statements. Reportable conditions are described in the accompanying schedule of findings and questioned costs as item 2002-1 and 2002-2. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the basic financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe that none of the reportable conditions described above is not a material weakness. We also noted other matters involving the internal control over financial reporting, which we have reported to management of the City of Columbia Heights, Minnesota in a separate letter dated April 9, 2003. This report is intended solely for the information and use of the City Council, management and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than those specified parties. April 9, 2003 HLB TAUTGES REDPATH, LTD. Certified Public Accountants 227 Tautges Redpath, Ltd. Certified Public Accountants and Consultants Independent Auditor's Report on Compliance with Requirements Applicable to each Major Program and Internal Control over Compliance in Accordance with OMB Circular A-133 To the Honorable Mayor and Members of the City Council Columbia Heights, Minnesota Compliance We have audited the compliance of the City of Columbia Heights, Minnesota with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended December 31, 2002. The City of Columbia Heights, Minnesota's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the City of Columbia Heights, Minnesota's management. Our responsibility is to express an opinion on the City of Columbia Heights, Minnesota's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non- Profit Organizations. Those standards and OMB Circular A~133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City of Columbia Heights, Minnesota's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the City of Columbia Heights, Minnesota's compliance with those requirements. 4810 White Bear Parkway, White Bear Lake, Minnesota 55110, USA Telephone: 651 426 7000 HLB Iautges Redpath, Ltd. is a member of [] International. A world-wide organization of accounting firms and business advisers. 229 Fax:651 426 5004 In our opinion, the City of Columbia Heights, Minnesota complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended December 31, 2002. Internal Control Over Compliance The management of the City of Columbia Heights, Minnesota is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the City of Columbia Heights, Minnesota's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. We noted certain matters involving the internal control over compliance and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over compliance that, in our judgment, could adversely affect the City of Columbia Heights, Minnesota's ability to administer a major federal program in accordance with applicable requirements of laws, regulations, contracts and grants. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items described in item 2002-3. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts, and grants that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. We also noted other matters involving the internal controls and its operation that we have reported to the management of the City of Columbia Heights, Minnesota, and the Columbia Heights Economic Development Authority, in separate reports dated April 9, 2003. 231 This report is intended solely for the information and use of the City Council, management and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than those specified parties. April 9, 2003 HLB TAUTGES REDPATH, LTD. Certified Public Accountants 233 CITY OF COLUMBIA HEIGHTS, MINNESOTA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended December 31, 2001 SECTION I - SUMMARY OF AUDIT RESULTS o o o The Independent Auditor's Report expresses an unqualified opinion on the basic financial statements of the City of Columbia Heights, Minnesota. There were two reportable conditions disclosed during the audit of the financial statements as reported in the Independent Auditor's Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in accordance with Government Auditing Standards. The above conditions were not determined to be material weaknesses. No instances of noncompliance material to the financial statements of the City of Columbia Heights, Minnesota were disclosed during the audit. One reportable condition relating to the audit of the major federal award programs is reported in the Independent Auditor's Report on Compliance with Requirements Applicable to each Major Program and Internal Control over Compliance in Accordance with OMB Circular A-133. The above condition was not determined to be a material weakness. The auditor's report on compliance for the major federal award programs for the City of Columbia Heights, Minnesota expresses an unqualified opinion. Audit findings, if any, relative to the major federal award programs for the City of Columbia Heights, Minnesota are reported in Section III of this Schedule. The Capital Funds Program - CFDA #14.872 was tested as a major program. The threshold for distinguishing Types A and B programs was $300,000. The City of Columbia Heights, Minnesota was determined to be a low-risk auditee for 2002. 235 CITY OF COLUMBIA HEIGHTS, MINNESOTA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended December 31,2001 SECTION H - FINANCIAL STATEMENT FINDINGS 2002 - 1: Recreational Revenue Documentation Condition: Certain documentation needs to be maintained in the City's files to substantiate that proper procedures have been followed when recording recreational revenue. Currently, documentation is not maintained that provides for verifying the completeness of recreation revenue. We noted the City does not maintain an audit trail regarding recreational revenue. Also, checks received by the Recreation Department are endorsed at the end of the day rather than upon receipt. Recommendation: As noted in 2001, we suggest the City improve cash receipting procedures which would include use of the cash register, endorsements of checks upon receipt with a stamp, and independent verification of class rosters. Corrective Action Plan: In 2003, the Recreation Department began implementing the use of the cash register system, and intends to conduct an independent verification of class rosters. 2002 - 2: Police Department Receipts Condition: The City should maintain documentation reconciling police department receipts with the "administrative tags" (City parking tickets) issued. Currently, not all of the "tags" issued are accounted for during the reconciliation process, Also checks received are not endorsed upon receipt, and all receipts are stored in an unlocked box. Recommendation: We recommend that the City improve the reconciliation process for "administrative tags" by accounting for all tags issued. Also receipts should be endorsed upon receipt and stored in a secured area. Corrective Action Plan: The City will take corrective action to reconcile and account for all tags issued and payments received. 237 CITY OF COLUMBIA HEIGHTS, MINNESOTA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended December 31,2001 SECTION IH - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: 2002 - 3: Capital Funds Program, CFDA #14.872 Criteria: Requests for expenditure reimbursements should be submitted to HUD in a timely manner in order to properly match expenditures and revenues in the appropriate periods. Also, HUD requires submission of the following annual statement for each CFP grant in which all funds have not been fully obligated and/or expended. HUD-50075, PHA Plans (OMB No. 2577-0226). Condition: For the 2002 expenditures tested, the City complied with submitting timely requests for reimbursements and the annual report. However, several of the CFP 2002 revenues included reimbursements for 2000 and 2001 expenditures, and the 2000 and 2001 required annual reports were not submitted until 2002. Revenue recognized in 2002 of $9,268 should have been recognized in prior years. Questioned Cost: There were no questioned costs as a result of this finding. Recommendation: The City should develop internal control procedures to ensure that all requests for reimbursements and federal reports are submitted in a timely manner in order to match revenues and expenditures and fulfill the reporting requirements set forth by HUD. Corrective Action Plan: The HRA has complied with reporting and reimbursement requirements for the fiscal year ended December 31, 2002. In the future, the City will continue to ensure that required reports and reimbursement requests are filed in a timely manner. 239 CITY OF COLUMBIA HEIGHTS, MINNESOTA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended December 31, 2001 SECTION IV - PRIOR YEAR FINDINGS DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: 2001-2: CDBG Program, CFDA #14.218~ passed-through Anoka County. Condition and Criteria: Certain documentation needs to be maintained in the City's files to substantiate that proper procedures have been followed when disbursing federal funds. During 2001 testing, two of the three housing rehabilitation grant files tested were missing the loan repayment agreements. Questioned Cost: No costs have been questioned as a result of this finding. Corrective Action Plan: The City has obtained copies of the loan repayment agreements from Anoka County and will maintain a copy in the recipient file. In the future, the City will ensure that appropriate information is maintained on file. Current Status: For 2002, the City maintained appropriate information on file. 2001-3: ClAP Program, CFDA #14.852 Condition and Criteria: The Davis-Bacon Act requires that all laborers who work on construction contracts in excess of $2,000 be paid not less than the prevailing wage rates. During 2000, the City entered into one contract that required compliance with the provision of the Davis-Bacon Act. The City was unable to provide information to verify compliance with Davis-Bacon in 2000 and 2001. Questioned Cost: The amount of questioned costs has not been determined. Current Status: For 2002, the City maintained on file the appropriate information. 241 CITY OF COLUMBIA HEIGHTS, MINNESOTA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended December 31, 2001 Federal Funding Source/ Pass Through Agency/ Program Title U.S. Department of Justice: Direct: Local Law Enforcement Block Grant Bulletproof Vest Partnership Program School Parlnership Fund Passed -through State of MN Depar'anent of Economic Security: Juvenile Accountability Incentive Block Grant Federal Emergency Management Agency: Passed-through Anoka County: Emergency Management Assistance Grant U.S. Department of Housing and Urban Development: Passed-through Anoka County: Community Development Block Grant - Entitlement Grant (CDBG) Direct: Operating Subsidy Capital Funds Program (CFP) Total Federal Expenditures Federal 2002 CFDA Federal Number Expenditures 16.592 $26,351 16.607 691 16.710 6,611 16.523 12,462 83.503 2,212 14.218 265,126 14.850 111,124 14.872 383,183 $807,760 Notes to the schedule of expenditures of federal awards Note 1. Basis of Presentation The above schedule of expenditures of federal awards includes the federal grant activity of the City of Columbia Heights, Minnesota (including its component units) and is presented on the accrual basis ofaecoanting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Note 2. Subrecipients During 2002, the City of Columbia Heights did not pass federal money to subrecipients. Note 3. Reporting Entity The City of Columbia Heights, Minnesota, for purposes of this schedule includes all funds of the primary government as defined by GASB Statement No. 14, The Financial Reporting Entity. This schedule also includes the Housing and Redevelopment Authority (HRA), and the Economic Development Authority (EDA) which are the sole component units of the City. 243 Tautges Redpath, Ltd. Certified Public Accountants and Consultants Independent Auditor's Report on Supplementary Information - Financial Data Schedule To the Honorable Mayor and Members of the City Council City of Columbia Heights, Minnesota We have audited the basic financial statements of the City of Columbia Heights, Minnesota, as of and for the year ended December 31, 2002, and have issued our report thereon dated April 9, 2003. Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying Financial Data Schedule is presented for purposes of additional analysis as required by the U.S. Department of Housing and Urban Development and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. This report is intended solely for the information and use of the City Council, management and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than those specified parties. April 9, 2003 HLB TAUTGES REDPATH, LTD. Certified Public Accountants 4810 White Bear Parkway, White Bear Lake, Minnesota 551~[~JSA Telephone: 651 426 7000 Fax: 651 426 5004 HLB Tautges Redpath, Ltd. is a member of llnternational. A world-wide organization of accounting firms and business advisers. CITY OF COLUMBIA HEIGHTS, MINNESOTA U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FINANCIAL DATA SCHEDULE As of and For The Year Ended December 31, 2002 Public Housing Operating Line Subsidy Item Account Description 14.850 Assets: Current assets: 111 Cash - unrestricted $432,356 100 Total cash 432,356 Accounts and notes receivable: 122 Accounts receivable - HUD other projects 125 Accounts receivable - miscellaneous 81 129 Accrued interest receivable 4,792 120 Total receivables, net of allowance 4,873 144 Interprogram - due from 90,361 150 Total current assets 527,590 Noncurrent assets: Capital assets: 161 Land 162 Buildings 163 Furniture, equipment and machinery - dwellings 164 Furniture, equipment and machinery - administration Total capital assets 0 166 Less: accumulated depreciation 160 Net capital assets, net of accumulated depreciation 0 180 Total noncurrent assets 0 190 Total assets $527,590 Liabilities and Equity: Liabilities: Current liabilities: 312 Accounts payable <= 90days $17,694 321 Accrued wages/payroll taxes payable 52 333 Accounts payable - other governments 22,17 ! 341 Tenant security deposits ! 3,280 347 Interprogram- due to 310 Total current liabilities 53,197 350 Total noncurrent liabilities 0 300 Total liabilities 53,197 Equity: 501 Investment in general fixed assets 512 Undesignated fund balance 474,393 5 i 3 Total equity 474,393 600 Total liabilities and equity $527,590 Public Housing Capital Fund Program 14.872 0 240,629 240,629 240,629 0 0 0 $240,629 $150,268 90,361 240,629 0 240,629 0 $240,629 Page 1 of 2 Capital Assets $ 0 0 0 128,700 4,127,632 431,280 5,144 4,692,756 (3,786,239) 906,517 906,517 $906,517 $ 0 0 0 906,517 906,517 $906,517 247 CITY OF COLUMBIA HEIGHTS, MINNESOTA U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FINANCIAL DATA SCHEDULE As of' and For The Year Ended December 31, 2002 Public Housing Operating Line Subsidy Item Account Description 14.850 Revenue: 703 Net tenant rental revenue $278,733 704 Tenant revenue - other 7,543 706 HUD PHA grants 111,124 711 Investment income - unrestricted 28, i 70 7 i 5 Other revenue 700 Total revenue 425,570 Expenses: 911 Administrative salaries 912 Auditing fees 1,154 913 Outside management fees 104,009 916 Other operating - administrative 5,987 924 Tenant services - other 184 931 Water 7,177 932 Electricity 29,854 933 Gas 24,72 I 938 Other utilities expense 8,196 942 Ordinary maintenance and operations 32,436 96 ! Insurance premiums 24,024 962 Other general expenses 11,500 963 Payments in lieu of taxes 22,091 969 Total operating expenses 271,333 976 Capital outlay 18,206 900 Total expenses 289,539 1000 Excess (deficiency) of total revenue over (under) total expenses Memo account information: 1103 Beginning equity I 113 Maximum annual conlributions commitment (per ACC) ! i 15 Contingency reserve, ACC program reserve 1116 Total annual contributions available 1120 Unit months available 1121 Number of unit months leased Equity roll forward test: Calculation fi.om RYE statement B/S line 513 Difference 136,031 338,362 N/A N/A N/A 1,200 1,197 474,393 474,393 $0 Page 2 of 2 Public Housing Capital Fund Program 14.872 $ 256,723 256,723 9,111 10,382 7,100 26,593 230,130 256,723 N/A N/A N/A N/A N/A $0 249