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HomeMy WebLinkAboutAugust 1, 2005 Work Session CITY OF COLUMBIA HEIGHTS Mavor Gary 1. Peterson Councilmembers Robert A. Williams Bruce Nawrocki Tammera Ericson Diehm Bruce Kelzenberg City Manaqer Walt Fehst 5?~ 40th Aven~e N.E., Columbia Heights. MN 55421-3878 (763) 706-3600 TDD (763) 706-3692 VISII Dllr Webslle al: ll'lI'lI'.ci.co/IIl1lbia-heighls./Il1l.lIs ADMINISTRA nON NOTICE OF CITY COUNCIL MEETING ************ to be held in the CITY OF COLUMBIA HEIGHTS as follows: Meeting of: Date of Meeting: Time of Meeting: Location of Meeting: Purpose of Meeting: COLUMBIA HEIGHTS CITY COUNCIL AUGUST 1,2005 7:00 P.M. CONFERENCE ROOM 1 WORK SESSION AGENDA 1. Auditor - Review 2004 CAFR Please bring information distributed on July 11, 2005 2. Bonded Debt and Debt Limit - Charter Commission 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 handcapped persons are available upon request when the request is made at least 96 hours in advance. Please call the City Council Secntary at 706-3611, to make arrangements. (TDD/706-3692 for deaf or hearing impaired only) City of Columbia Heights, Minnesota Audit Review August 1, 2005 1. CAFR components: a. Introductory section (pages 3 - 13) i. Certificate of Achievement for Excellence in Financial Reporting (page 13) b. Financial section: 1. Independent Auditors Report (page 17) ii. MD&A (page 21) Ill. Basic Financial Statements (pages 38 - 56) iv. RSI v. COlnbining and Individual Fund statements (pages 98 - 178) c. Statistical section (pages 186 - 206) d. Single Audit Section: i. Legal Compliance Report (page 209) 1. Finding 2004-1 - acceptance of grants, donations (page 211) 2. Finding 2004-2 - designation of depositories (page 213) 3. Finding 2004-3 - prompt payment of bills (page 215) 4. Finding, 2004-4 - payroll declaration (page 219) ii. Internal Control Report (page 223) 1. Finding 2004-1 - recreation revenue (page 235) Ill. Federal Program Compliance report (page 227) 1. Finding 2004-5 - contractors paid with CDBG funds (page 235) 2. Management Letter: a. Summary of financial activity (see attached) b. General Fund - components of fund balance (page 17) c. Library Fund - components of fund balance (page 19) d. Liquor operations - comparison to state averages (pages 35 - 37) e. Other nlatters (pages 41 - 43) City of Columbia Heights, Minnesota Summary Financial Activity For the Year Ended December 31, 2004 Revenue Expenditures Interfund Increase in Fund Balancel Cash and Other and Other Transfers Fund Balancel Net Assets Balance CAFR Fund Sources Uses (Net) Net Assets 12/31/04 12/31/04 pg no. 1 General $8,147,812 $7,536,202 $105,268 $716,878 $4,140,110 $3,895,759 88 2 Special Revenue: 3 Community Development Fund 3,725 419,722 444,807 28,810 111,354 123,825 110 4 Cable Television 135,347 9,035 (109,330) 16,982 12,296 - 111 5 Library 609,613 595,438 (10,863) 3,312 15,845 44,606 112 6 D.A.R.E Program 50 4,834 9,000 4,216 27,185 27,475 113 7 Special Projects 26,819 - - 26,819 36,995 61,164 114 8 C.H.A.S.E 2,299 - (7,808) (5,509) 53,579 53,076 115 9 Twenty-First Century Grant 67,532 58,056 7,808 17,284 14,348 12,317 116 0 Confiscated Property 6,875 7,637 - (762) 14,337 14,337 117 1 Local Law Enforcement Block Grant 13,067 14,269 - (1,202) 3,464 3,365 118 2 Juvenile Justice Grant 10,068 10,793 - (725) - - 120 3 Police Grants - Other 1,043 1,043 - - - - 121 4 Recreation Contributed Projects 39,247 7,835 (6,000) 25,412 124,130 124,130 122 5 Contributed Projects 1,938 2,890 - (952) 23,622 23,622 123 6 Flex Benefit 10,334 6,746 - 3,588 41,243 46,953 124 7 Housing and Redevelopment Authority: 8 Parkview Villa North 539,460 444,555 - 94,905 507,830 590,467 128 9 Parkview Villa South 214,497 201,179 - 13,318 125,622 168,377 129 0 Rental Housing 2,472 2,606 - (134) 53,290 52,874 130 1 EDA: 2 Economic Development Authority Admin 210,768 750 (222,648) (12,630) 78,049 118,581 91 3 Buisness Revolving Loan Fund 16,744 - - 16,744 369,999 306,217 132 4 Anoka County CDBG 525,544 567 (525,544) (567) (29,636) - 90 1 Debt Service: 2 Sheffield TIF Redevelopment $53,550 $23,605 $ - $29,945 ($434,473) $34,358 45 3 Tax Increment Bonds 794,227 13,647 (920,889) (140,309) 118,243 81,260 135 4 Capital Appreciation Bonds of 1990 1,953,872 956,089 1,686,214 2,683,997 2,683,997 2,666,721 44 5 Multi-Use Redevelopment Plan 21,792 11 ,466 - 10,326 (36,096) - 135 6 Tax Increment Refunding Bonds of 2004A 35,979 544 - 35,435 35,435 35,435 135 7 G.O. Improvement 1999A 19,115 118,109 50,342 (48,652) 584,944 580,737 135 8 G.O. Improvement/Revenue 2003A - 114,154 460,335 346,181 342,121 342,121 135 9 Capital Project: 0 MSA State Aid Street 463,321 150,438 (304,806) 8,077 (136,821 ) - 44 1 Capital Improvements General Government Buildin 117,456 - 60,500 177,956 3,373,534 3,347,694 45 2 Capital Equipment Replacement General Governm 419,189 303,052 100,000 216,137 4,759,114 4,722,490 45 3 Capital Improvements PIR Fund 786,633 1,446,726 (267,508) (927,601 ) 87,765 193,509 45 4 Capital Improvement 5,068 373 65,050 69,745 730,031 129,915 141 5 Downtown Parking Maintenance 25,258 7,383 (530,000) (512,125) 228,183 227,572 141 6 Capital Sheffield Redevelopment - - (270,000) (270,000) 213,133 213,133 141 7 Capital Improvement Parks 88,541 7,293 6,125 87,373 1,013,178 955,595 141 B Capital Improvement PVVS 25,544 - (765,325) (739,781 ) 25,544 19,922 142 9 Capital Improvement Development 675,936 1,156,048 1,361,544 881,432 1,506,010 198,745 45 0 Infrastructure Replacement 6,940 87,224 52,176 (28,108) 144,598 51 ,463 142 1 Capital Equipment Fire 19,284 323,142 - (303,858) 351,624 347,379 142 2 Capital Equipment Cable TV 11,153 - - 11,153 317,479 292,702 142 3 Capital Building Library - - - - 200,000 198,397 143 4 TIF District #2 - 53 - (53) (2,296) - 143 5 TIF Medtronic 123,615 46,756 - 76,859 277,236 275,562 143 6 TIF Scattered Site 26,295 1,045 - 25,250 10,132 17,033 143 7 TIF Transition Block 65,051 11 ,740 - 53,311 57,325 57,227 143 g Enterprise: :l Water 1,792,025 1,635,364 (134,434) 22,227 2,719,020 471,732 147 J Sewer 1,132,580 1,207,227 (131,914) (206,561 ) 5,510,349 862,436 150 1 Refuse 1,313,945 1,285,725 (189,912) (161,692) 436,780 187,101 153 2 Storm Sewer 400,860 171,124 (8,769) 220,967 563,785 119,466 156 3 Liquor 7,048,928 6,578,437 (212,062) 258,429 3,321,622 2,081,518 159 4 Internal Service: 5 Central Garage 516,766 350,295 (90,500) 75,971 401,307 306,065 166 6 Data Processing 1,076 243,936 299,143 56,283 665,638 751,635 169 7 Insurance 605,883 293,566 - 312,317 1,113,343 1,026,082 172 3 Compensated Absences - - - - 16,658 599,624 175 :l Total $29,135,136 $25,868,718 $0 $3,266,418 $36,922,104 $27,061,774 COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF COLUMBIA HEIGHTS STATE OF MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2004 Finance Department William J. Elrite, Finance Director - This page intentionally left blank - CITY O.F COLUMBIA HEIGHTS, MINNESOTA TABLE OF CONTENTS Page Reference No. 1. INTRODUCTORY SECTION Principal City Officials 3 Organizational Chali 5 Letter of Transmittal 7 Certificate of Achievement for Excellence in Financial Reporting 13 n. FI!~ANClAL SECTION Independent Auditor's Report 17 Management's Discussion and Analysis 21 Basic Financial Statements: Government- Wide Financial Statements: Statement of Net Assets Statement of Activities Statement 1 Statement 2 38 40 Fund Financial Statcments: Balance Sheet - Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balance - 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 Nct Asscts - Fiduciary Funds Statement 3 42 Statement 4 44 Statement 5 47 Statement 6 48 Statement 7 50 Statement 8 52 Statement 9 56 57 Notes to Financial Statements Required Supplementary Information: Budgetary Comparison Schcdulc - Gcneral Fund Budgetmy Comparison Schedule - Anoka County CDBG Budgctary Comparison Schedule - Economic Developmcnt Authority Administration Statcmcnt 10 Statement II Statement 12 88 90 91 Budget31Y Comparison Schedule - Note to RSI 92 CITY 0.1<' COLUMBIA HEIGHTS, MlNNESOTA TABLE OF CONTENTS Page Reference 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 Statement 13 98 Statement ] 4 99 Subcombining Balance Sheet - Nonmajor Special Revenue Funds Subcombining Schedule of Revenucs, Expenditurcs and Changcs in Fund Balance - Nonmajor Special Revenue Funds Statement 15 103 Statement 16 107 Special Revenue Funds: Schedules of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual: Community Development Cable Television Fund Library Fund D.A.R.E. Program Fund Balance - Actual: Special Projects C.H.A.S.E. Twenty-First Cenhlry Grant Confiscated Property Local Law Enforcement Block Grant COPS MORE 96 Juvenile Justice Grant Police Grants - Other Recreation Contributed Projects Contributed Projects Flex Benefit Fund Police/Fire Contingency Statement 17 110 Statement 18 ] 11 Statement 19 112 Statement 20 113 Statement 21 114 Statement 22 115 Statement 23 116 Statement 24 117 Statement 25 1I8 Statement 26 119 Statement 27 ]20 Statement 28 121 Statement 29 122 Statement 30 123 Statement 3 1 124 Statement 32 125 Housing and Redevelopment Authority (Component Unit): Combining Balance Sheet Combining Schedule of Revenues, Expendihlres and Changes in Fund Balance Schedules of Revcnucs, Expcndihlres and Changcs in Fund Balance - Budget and Actual: Parkview Villa North Parkview Villa South Fund Balance - Achml: Rental Housing Statement 33 126 Statement 34 127 Statement 35 Statcment 36 128 129 Statement 37 130 CITY 01<' COLUMBIA HEIGHTS, MINNESOTA TABLE OF CONTENTS Page Reference No. Statement 38 131 Statement 39 132 Statement 40 134 Statement 41 135 Statement 42 138 Statement 43 141 Economic Development Autholity (Component Unit): Business Revolving Loan Fund: Balance Sheet Schedule of Revenues, Expenditures and Changes in Fund Balance Subcombining Balance Sheet - Nonmajor Debt Service Funds Subcombining Schedule of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Debt Service Funds Subcombining Balance Sheet - Nonmajor Capital Project Funds Subcombining Schedule of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Capital Project Funds Enterplise Funds: Water Utility Fund: Subcombining Schedule of Net Assets Subcombining Schedule of Revenues, Expenses and Changes in Fund Net Assets Subcombining Schedule of Cash Flows Statement 44 Statement 45 Statement 46 Sewer Utility Fund: Subcombining Schedule of Net Assets Subcombining Schedule of Revenues, Expenses and Changes in Fund Net Assets Subcombining Schedule of Cash Flows Statement 47 Statement 48 Statement 49 Refuse Utility Fund: Subcombining Schedule of Net Assets Subcombining Schedule of Revenues, Expenses and Changes in Fund Net Assets Subcombining Schedule of Cash Flows Statement 50 Statement 51 Statement 52 Storm Sewer Utility Fund: Subcombining Schedule of Net Assets Subcombining Schedule of Revenues, Expenses and Changes in Fund Net Assets Sub combining Schedule of Cash Flows Statement 53 Statement 54 Statement 55 146 147 148 149 150 151 152 153 154 155 156 157 CITY OF COLUMBIA HEIGHTS, MlNNESOTA TABLE OF CONTENTS Page Reference No. Liquor Fund: Subcombining Schedule of Net Assets Subcombining Schedule of Revenues, Expenses and Changes in Fund Net Assets Subcombining Schedule of Cash Flows Statement 56 Statement 57 Statement 58 Internal Service Funds: Combining Schedule of Net Assets Combining Schedule of Revenues, Expenses and Changes in Fund Net Assets Combining Schedule of Cash Flows Statement 59 Statement 60 Statement 61 Central Garage Fund: Subcombining Schedule of Net Assets Subcombining Schedule of Revenues, Expenses and Changes in Fund Net Assets Sub combining Schedule of Cash Flows 158 159 160 162 163 164 Statement 62 165 Statement 63 166 Statement 64 167 Statement 65 168 Statement 66 169 Statement 67 170 Data Processing Fund: Subcombining Schedule of Net Assets Sub combining Schedule of Revenues, Expenses and Changes in Fund Net Assets Subcombining Schedule of Cash Flows Insurance Fund: Subcombining Schedule of Net Assets Subcombining Schedule of Revenues, Expenses and Changes in Fund Net Assets Subcombining Schedule of Cash Flows Statement 68 Statement 69 Statement 70 Compensated Absences Fund: Subcombining Schedule of Net Assets Subcombining Schedule of Revenues, Expenses and Changes in Fund Net Assets Subcombining Schedule of Cash Flows Statement 71 Statement 72 Statement 73 Combining Statement of Changes in Assets and Liabilities - Agency Funds Statement 74 171 172 173 174 175 176 178 CITY o.F COLUMBIA HEIGHTS, MINNESOTA TABLE OF CONTENTS Page Reference No. Supplementary .Financial Infol"mation: Combined Schedule of Bonds Payable Exhibit 1 180 ill. STATISTICAL SECTION (UNAUDITED) Government- Wide Information: Government - Wide Expenses By Function Government -Wide Revenues Table 1 Table 2 186 188 fund Infonnation: General Governmental Expenditures by Function General Governmental Revenues by Source Tax Levies and Tax Collections Assessed Value, Tax Capacity, and Estimated Achml Value of all Taxable Property Tax Rates - Per $100 of Tax Capacity City Tax Levy Plincipal 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 Expendihlres For General Obligation Bonded Debt to Total General Governmental Expenditures Computation of Direct and Overlapping Debt Revenue Bond Coverage: Water, Sewer, and Stonn Sewer Funds Property Value and Construction Miscellaneous Statistics Demographic Statistics Table 3 190 Table 4 191 Table 5 192 Table 6 193 Table 7 194 Table 8 195 Table 9 196 Table 10 197 Table 11 198 Table 12 199 Table 13 200 Table 14 201 Table 15 202 Table 16 203 Table 17 204 Table 18 206 CITY O.F COLUMBIA HEIGHTS, MlNNESOTA TABLE OF CONTENTS Page Reference No. IV. SINGLE AUDIT AND OTHER REQUIRED REPORTS SECTION Report on Compliance with Minnesota Legal Compliance Audit Guide for Local Government 209 RepOlt on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Perfonned in Accordancc with Government Auditing Standards 223 Rcport on Compliance with Requirements Applicable to each Major Program and Internal Control over Compliance in Accordance with OMB Circular A-133 227 Schedule of Findings and Questioned Costs 233 Schedule of Expendihlres of Federal Awards 239 Report on Supplementary lnfomlation - Financial Data Schedule 243 Financial Data Schedule 245 I. INTRODUCTORY SECTION 1 - This page intentionally left blank - 2 CITY OF COLUMBIA HEIGHTS, MINNESOTA PRINCIPAL CITY OFFICIALS Year Ended December 31, 2004 Name Official Title Mayor and Council Gary L. Peterson Tatmnera Ericson Diehm Bruce Kelzenberg Bruce Nawrocki Robert A. Williams Mayor Councilmember Councilmember Councilmember Councilmcmber Administr"ation Walter F ehst Linda Magee William Elrite Jim Hoeft Kevin Hansen Thomas Johnson Charles Thompson Lauren McClanahan Keith Windschitl Larry Scott M. Rebecca Loader Robert Streetar City Manager Assistant to City Manager City Clerk-Treasurer, Finance Director City Attorney Public Works Director, City Engineer Chief of Police Chief of Fire Superintendent of Public Works Recreation Services Director Liquor Operations Manager Librarian Community Development Director 3 - This page intentionally left blank - 4 City of Colum bia Heights Organizational Chart Mayor: Gary L Peterson Councilmembers: Tammera Ericson Bruce Ke/zenberg Bruce Nawrocki Robert Williams City Manager: Walter Fehst ADMINISTRATION Assistant to the City Manager J Human Resources Director Special Projects Coordinator Administrative Secretary Deputy City Clerk/Council Secretary* Commissions & Boards: Charter EDA HRA Police & Fire Civil Service Traffic Telecommunications Planning & Zoning Human Services Park & Recreation Library POLICE (Administered by Mayor) Police Chief: momas Johnson Secreta ry II Police Captain Clerk-Typist II Sergeants (3) Corporals (3) Patrol Officers (15) Community Service Officers (2) Support Ser/ices Supervisor Secretary II-A (2) RECREATION Recreation Director: Keith Windschit/ Senior Citizen Coordinator Program Coordinator (1) Head Custodian Recreation Clerk/Typist II Recreation Clerk/Typist II (PT) Custodian II (6 PT) Custodian I (1 PT) :g~~F~ ~2~~:~~ J p; ~l; :~!! ,f:'!2~~ r!!::~!::;H U !~~:~;!'l'~j~ ~\!:' ~ J~;.. FIRE Fire Chief: Charles Thompson Secretary II (PT) Assistant Fire Chief FT Clerk Typist Firefighters (5) Volunteer Firefighters (30) Reserve Division (4) 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) FINANCE Finance Director/City Clerk/Treasurer: William E/rite Secretary II (FT) ASSistant Finance Director Accounls Payable Clerk Payroll/Accounting Clerl< III Ulilities Accounting Clerk II Ulilities Accounting Clerk I Accounting Clerk II (PT) Switchboard Operator/Receptionist Meter Reader (PTj Liquor Operations Manager Assistant Liquor Operations Manager (6) Store Supervisor (1) Retail Clerk (29 PT) IS Director IS Technician J;~~:1;~Q~~ ~r~ir~'~1~:~~d~lnf::r:i~i~fl~~I:~11~~ ih li?l:' il~i ,i l ~;l:':: ~ig-r'113;1*~icii:: ~ ~ -~,t:I I ~ ~I~f ~ PUBLIC WORKS Public Works Director/City Engineer: Kevin Hansen Secretary II-A Assistant City Engineer Engineering Technician IV (2) Engineering Technician III Public WorKs Superintendent Foreman (3) Maintenance Worker (16) Supervisor-Vehicle Maintenance Maintenance 111- Mechanic Maintenance 111- Bodyman/Painter Administrative Assistant Assessing Clerk COMMUNITY DEVELOPMENT Community Development Director: Bob Streetar Community Development Assistant Building Official Planner Community Development Secretary Secretary II-Permits/License (1 PT) ~f;~e~;':~j~~ ;;;"~;~~! !'i~I;Jiti;~~~El;~!{~:ff~1:~ql;!;:I;: ,;'~i:!1i~ ti? ;:;m~Fl~~ ~l:i~I~:~li::~!::~~l;l'~l~ , """ r "'" , " ,," '" " *Aiso serves In the capacity of Deputy City Clerl{ under the City Manager. 5 - This page intentionally left blank - 6 City of Columbia Heights Finance Department 590 40 Avenue N .E. Columbia Heights, MN 55421.3878 Office (763) 706-3600 Information Systems F/nMCisl Repotting Aecovnts Payable Utilily BiHIn(J Payroll TOO (763) 706-3692 May 31,2005 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, 2004 is hereby submitted. The City's management assumes responsibility for both the completeness and reliability of the information contained in this report, based on a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed its anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. HLB Tautges Redpath, Ltd., Certified Public Accountants, have issued an unqualified ("clean") opinion on the City of Columbia Heights financial statements for the year ended December 31, 2004. Their independent auditors' report is located at the front of the financial section of this report. State law requires every city to issue by June 30th of each year a complete set of audited financial statements for the preceding fiscal year ended December 31st. In addition, state law requires each City have an annual Minnesota Legal Compliance Audit performed. During the year ended December 31,2004, the City expended more than $500,000 in federal grant awards. The City is therefore also required to undergo an audit in conformity with the provisions of the Single Audit Act of 1984 and the United States Office of Management and Budget Circular A-I33. Information related to the Single (A-l33) Audit and the Minnesota Legal Compliance Audit, including the Schedule of Expenditures of Federal Awards, is included in the Single Audit and Other Required Reports Section at the back of this report. 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 oftransmittal 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. PROFILE OF THE GOVERNMENT 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 Council consists of a Mayor and SnWu Is Onr IIf1!J~ TtiE CITY OF COlUUBlo' HEIGiTS DOES NOT OlSCRt.mATE ON TIE BASIS OF OISA8UTY t.I Et.tPI..O'It.IENT OR THE PROIilSION OF SSR\llCES EQUAL OPPO,TUNITY EMPLOYER '" :.. .' '.... :.:;.' ..;' .~~" . .._~.~-c-. :-......':-..~.._;--..-::-- .-. M', ..-;'l"~.' . ----~-.--._..:"..;..~. -.,-. ...-';:-.,....,... .-.. - This page intentionally left blank - 8 . '. : ~ ";.;: four Councilmembers. All are elected at-large, on a non-partisan basis. The Mayor serves a two- year term and the Council members serve four-year terms. The City Manager is appointed by the City Council. The City covers an area of3.52 square miles and currently has a population of 18,520. The City is empowered to levy a tax on both real and personal property within its boundaries. All City funds, departments, commissions and other organizations for which the City of Columbia Heights is financially accountable, including all component units, are presented within the Comprehensive Annual Financial Report. The Housing and Redevelopment Authority (HRA) and the Economic Development Authority (EDA) are included in the reporting entity as blended 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. The City provides a full range of services to its citizens. These services include, but are not limited to, police and fire protection; water and sanitation services; the construction and maintenance of highways, streets, and infrastructure; library; recreational facilities; cultural events; and general administrative services. LOCAL ECONOMY The City is located within the varied and stable economic base of the Minneapolis-Saint Paul greater metropolitan area, which is a major center for both the state and the Upper-Midwest. As such, there has been a relatively stable level of employment for City residents and this is expected to continue. The unemployment rate in the City did increase slightly due to the most recent recession, but it remained well below the national average. The largest employers located within the boundaries of the City itself include Medtronic Inc, a medical device manufacturer; Independent School District 13; and Crestview Corporation, a provider of elder care. The greater metropolitan region has seen a dramatic increase in commuter traffic over the last several years. The pace at which capacity has been added to the metro area's freeway and transit systems has not kept up with this increase in traffic. The state government is the primary provider of funding for these systems. The state government has been in significant budget crisis for at least the last three years. These conditions, combined with the recent national surge in gasoline prices, are expected to create a strong demand for housing located more centrally within the metropolitan area. With its close proximity to the Minneapolis downtown area, including its skyline views, the City of Columbia Heights offers many people excellent opportunities to live relatively close to where they work. However, as an older, fully developed suburb of the City of Minneapolis, the management and residents of the City of Columbia Heights are faced with the problems of an aging infrastructure and increased crime statistics. The City Council and City Management are taking a proactive approach in dealing with these concerns. In recent years, the City has completed several redevelopment projects that have greatly improved the downtown area of Columbia Heights. 9 The City currently has a number of related projects in-progress. Some ofthese are described further below. LONG- TERM FINANCIAL PLANNING By Council resolution, a portion ofthe unreserved fund balance in general fund is designated for working capital purposes. This portion is equal to 45% of budgeted general fund expenditures for the following year. At December 31, 2004, there was sufficient unreserved fund balance in the general fund to meet this target. The City has a planned Street Rehabilitation Program including, as needed, water mains, sanitary sewer and storm sewer improvements. The plan divides the City into seven street rehabilitation zones and calls for approximately one zone to be rehabilitated every one to two years, beginning in 1997. Currently this plan extends through 2007. Most of the cost of street rehabilitation is charged to the benefiting properties in the form of special assessments. In some cases, the City issues bonds to initially finance the project, repaying the bonds with special assessments as the assessments are collected over a number of years. The City is exploring options for moving its largest municipal1iquor operation from a leased space to a city-owned building, in order to reduce occupancy costs over the long-tenn. During 2004, the City obtained an analysis by an outside consultant indicating sufficient demand for community center facilities located within the City to support two to four gymnasiums beyond those currently available in the area. MAJOR INITIATIVES Currently, the largest and most active ofthe City's redevelopment projects include: 1) Facilitating the redevelopment by a private developer of the former K-Mart site on Central A venue into housing. When completed, the project will consist of 231 units of housing. Building pennits were issued in 2004 for the first 67 units. Some of the pre- development costs incurred by the City for this project have been/will be reimbursed by the developer. Qualified costs incurred by the developer will be reimbursed from future tax increment collections for the property. 2) Facilitating the redevelopment by a private developer of the former industrial park site, located south and west of the City's largest park, into housing. When completed, this project will cover approximately 30 acres with approximately 500 units of housing and a re-design ofthe road along the adjacent City Park into a parkway. Property acquisition and building demolition began in 2004 for this project. To date, approximately $2 million in state and other grants have been received for pollution remediation within the site. Some of the pre-development costs incurred by the City for this project have been/will be reimbursed by the developer. Qualified costs incurred by the developer will be reimbursed from future tax increment collections for the property. Other initiatives beginning in 2005 include the recruitment and training of a COlmnunity Emergency Response Team (CERT) and the installation ofa reverse 911 system. The CERT members are volunteers trained to assist the City's public safety officials in various emergency situations such as disaster recovery, thereby providing a greater amount of service to residents 10 with the same level of paid public safety staffing. Federal grants were received for the initial training of the CERT and the instal1ation of the reverse 911 system. A WARD AND AKNOWLEDGEMENTS The Government Finance Officers' Association (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 31,2003. The Certificate of Achievement is a prestigious national award that recognizes conformity 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 confonn 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 confonn to the Certificate of Achievement program requirements, and we are submitting it to the GFOA. The preparation of the Comprehensive Annual Financial Report on a timely basis was made possible by the dedicated service of the entire staff ofthe 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 11 - This page intentionally left blank - 12 Certificate of Achievernent for Excellence in Financial Reporting Presented to City of Columbia Heights, Minnesota For its Comprehensive AllllUal Financial Report for the Fiscal Year Ended December 31, 2003 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. ~~;e:~ President ~/~ Executive Director 13 - This page intentionally left blank - 14 II. FINANCIAL SECTION 15 - This page intentionally left blank - 16 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 31,2004 which collectively comprise the City's basic financial statements as listed in the table of contents. These fmancial statements are the responsibility of the City of Columbia Heights, Minnesota's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes 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 r.md information ofthe City of Columbia Heights, Minnesota, as of December 31, 2004, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated April 21, 2005 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. 4810 White Bear Parkway White Bear Lake, Minnesota 55110 651 4267000 651 4265004 Fax 1303 South Frontage Road Suite 13 Hastings, Minnesota 55033 651 4804990 651 4265004 Fax www.hlptLcom HLB T autges Redpath, Ltd. is a member of !nIlnternational, a world.wide organization of accounting firms and business advisors. 17 - This page intentionally left blank - 18 The Management's Discussion and Analysis and the budgetary comparison information as listed in the table of contents, are not a required part of the basic financial statements but are supplementary information required by accounting principles accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the 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 offederal 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 fmancial statements of the City of Columbia Heights, Minnesota. The combining and individual fund statements and schedules, supplementary financial information and schedule of expenditures of federal awards 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. The introductory section and statistical information have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. l(z It ~ I~/ Ci;l. HLB TAUTGES REDPATH, LTD. White Bear Lake, Minnesota April 21, 2005 19 - This page intentionally left blank - 20 -~ 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 31,2004. We encourage readers to consider the infonnation presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in the introductory section of this report. Financial Hi2hli2hts The assets of the City of Columbia Heights exceeded its liabilities at the close ofthe most recent fiscal year by $50,501,883 (net assets). Of this amount, $27,374,726 or approximately 54% (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 $3,634,100. The majority ofthis was due to a combined 60% increase in the total of, grants for specific programs, special assessments and charges for services compared to the prior year. As of the close of the cunent fiscal year, the City of Columbia Heights' governmental funds reported combined ending fund balances of$22,173,602. This is an increase of$2,688,477 from the prior year. As of the close of the current fiscal year, the portion of combined ending govermnental fund balances that is both unreserved and undesignated is $1,328,118 or 6%. At the end of the cunent fiscal year, the general fund balance of $4, 140, 11 0, included $23,302 reserved for prepayments, $3,743,344 designated for working capital and $373,464 unreserved undesignated. During 2004, the City's total bonded debt increased by $1,219,417 to a total of $7,524,704. This was primarily due to the issuance in 2004 of$I,985,000 in general obligation tax increment refunding bonds. The proceeds from these 2004 bonds will be used in 2005 to refund a 1990 bond issue of general obligation tax increment bonds, in order to take advantage of more favorable interest rates. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of Columbia Heights' basic financial statements. The City's basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary infonnation in addition to the basic financial statements themselves. 21 Management's Discussion and Analysis Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City of Columbia Heights' fmances, 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 ofthe City of Columbia Heights is improving or deteriorating. The statement of activities presents infonnation 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 fmancial 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 pOliion oftheir costs through user fees and charges (business-type activities). The governmental activities of the City of Columbia Heights include general govermnent, public safety, public works, culture and recreation and community development. The business-type activities of the City of Cohunbia Heights include water, sanitary sewer, refuse, storm sewer and liquor operations. The govermnent-wide financial statements are presented as statements 1 and 2 of this report. Fund Financial statements. A nmd 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 nmds of the City of Columbia Heights can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Govermnental funds are used to account for essentially the same functions reported as govermnental activities in the government-wide financial statements. However, unlike the govermnent-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be usen11 in evaluating a government's near-term financial requirements. Because the focus of govermnental funds is narrower than that of the government-wide financial statements, it is useful to compare the infonnation 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 govenllnental fund statement 22 Management's Discussion and Analysis of revenues, expenditures, and change in fund balances provide a reconciliation to facilitate this comparison between governmental funds and govermnental activities. F or the current fiscal year ended December 31, 2004, the City of Columbia Heights has ten individual major governmental funds. Infonnation 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, Economic Development Authority administration fund, capital appreciation bonds of 1990 fund, municipal state aid street fund, Sheffield tax increment financing redevelopment fund, capital improvements-development fund, capital improvements-general govermnent buildings fund, capital equipment replacement-general govermnent fund, and capital improvements-PIR fund, all of which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major govermnental funds is provided in the fonn 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 budgetmy comparison statement has been provided for those funds to demonstrate compliance with this budget. The basic governmental fund financial statements are presented as statements 3 through 5 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 [unctions presented as business-type activities in the government-wide financial statements. The City of Columbia Heights uses enterprise funds to account for its water, sewer, refuse, stonn sewer, and liquor operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City- of Columbia Heights' various functions. The City of Columbia Heights uses internal service funds to account for its central garage, data processing, insurance, and compensated absences services. Because the central garage, insurance and compensated absences services predominately benefit governmental rather than business-type functions, they have been included within govermnental activities in the govermnent-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 govermnent-wide financial statements. Proprietary funds provide the same type of infonnation as the government-wide financial statements, only in more detaiL The proprietary fund financial statements provide separate information for the water, 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 23 Management's Discussion and Analysis statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements are presented as statements 6 through 8 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 programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statement is presented as statement 9 ofthis report. Notes to the financial statements. The notes provide additional infonnation that is essential to a full understanding ofthe data provided in the government-wide and fund financial statements. Other information. The combining statements referred to earlier in connection with non-major governmental funds and internal service funds are presented immediately following the required supplementary information on budgetary comparisons. Combining and individual fund statements and schedules are presented as statements 12 through 74 of this report. Government-wide Financial Analvsis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City of Columbia Heights, assets exceeded liabilities by $50,501,883 at the close of the most recent fiscal year. A portion of the City of Columbia Heights' net assets ($20,504,463 or 41 %) 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. 24 Management's Discussion and Analysis CITY OF COLUMBIA HEIGHTS' NET ASSETS Governmental Activities Business-Type Activities Totals 2004 2003 2004 2003 2004 2003 Current and other assets $27,469,158 $23,783,849 $8,240,656 $8,357,248 $35,709,814 $32,141,097 Capital asscts 19,214,012 18,103,705 8,661,924 8,293,539 27,875,936 26,397,244 Total assets $46,683,170 $41,887,554 $16,902,580 $16,650,787 $63,585,750 $58,538,341 Long tenn lia bilities outstanding $5,650,222 $3,568,116 $2,568,343 $2,556,261 $8,218,565 $6,124,377 Othcr liabilities 4,051,889 4,599,846 813,413 946,335 4,865,302 5,546,181 Total liabilities $9,702,111 $8,167,962 $3,381,756 $3,502,596 $13,083,867 $11 ,670,558 Net assets In vested in capital assets net of related dcbt $14,328,916 $14,535,589 $6,175,547 $5,432,788 $20,504,463 $19,968,377 Rcstrictcd 2,285,305 1,114,870 337,389 290,175 2,622,694 1,405,045 Unrestricted 20,366,838 18,069,133 7,007,888 7,425,228 27,374,726 25,494,361 Total net assets $36,981,059 $33,719,592 $13,520,824 $13,148,191 $50,501,883 $46,867,783 A portion 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 ($27,374,726 or 54%) may be used to meet the City's ongoing obligations to citizens and creditors. At the end ofthe 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 govemmental and business-type activities. 25 Management's Discussion and Analysis Governmental activities Governmental activities increased the City of Columbia Heights' net assets by $3,261,467. Key elements of this increase are as follows: Charges for services, plus grants and contributions for specific governmental activities increased by 60% or $2,143,130 for 2004 compared to 2003. Major components of this increase included: · $771,478 more in grants for cOlmnunity development, mostly related to redevelopment projects. . $440,703 more in special assessments due to the timing of various street projects. . $313,847 more in charges for services, including a $187,358 building pennit fee for a new water treatment plant owned by the City of Minneapolis that is located within the City of Columbia Heights. 2004 general governmental activities revenues not restricted to specific programs increased by 9% or $716,640. This included unrestricted investment earnings for governmental activities at an increase of $321,248 over the prior year. The prior year included a significant temporary decline in market value (as the City invests in fixed-income investments and usually holds them to maturity) that was not repeated in the current year. Total govemmental activities expenditures for 2004 increased by only 2% or $286,564 from the prior year. A significant cause ofthis was a hiring freeze in place during 2004. The hiring freeze was in response to reductions in the annual amount of state aid to local govermnent received by the City. At one point during the year, a total of 15 positions of employment with the City were unfilled. 26 Management's Discussion and Analysis City of Columbia Heights' Changes in Net Assets Governmental Acti vities Business-Type Activities Totals 2004 2003 2004 2003 2004 2003 Revenues: Program revenues: Charges for scrvices 52,293,077 $1,979,230 $11,305,675 $11,183,361 $13,598,752 $13,162,591 Operating grants and contributions 1,677,743 946,246 46,635 107,775 1,724,378 1,054,021 Capital grants and contributions 1,767,994 670,208 113,407 1,881,401 670,208 General revenues: Property taxes 4,989,205 4,306,036 4,989,205 4,306,036 Tax increment collections 972,208 781,439 972,208 781,439 GranL~ and contributions not rcstrictcd to specific programs 2,337,386 2,712,408 2,337,386 2,712,408 Unrestricted investment earnings 729,456 408,208 215,062 126,671 944,518 534,879 Gain (loss) on disposal of capital assets 103,524 103,524 Total revenues 14,767,069 11,907,299 11,680,779 11,417,807 26,447,848 23,325,106 Expenses: General governmcnt 1,669,721 1,756,434 1,669,721 1,756,434 Public safety 3,640,970 3,630,535 3,640,970 3,630,535 Public works 2,109,060 2,646,859 2,109,060 2,646,859 Culture and recreation 1,904,848 1,909,831 1,904,848 1,909,831 Community development 2,171,407 1,239,030 2,171,407 1,239,030 Interest onlong-ternl debt 387,544 414,297 387,544 414,297 Water 1,637,316 1,903,331 1,637,316 1,903,331 Sewer 1,219,200 1,231,594 1,219,200 1,231,594 Refuse 1,321,730 1,330,272 1,321,730 1,330,272 Stonn sewer 158,374 204,895 158,374 204,895 Liquor 6,593,578 6,619,942 6,593,578 6,619,942 Total expenses 11,883,550 11,596,986 10,930,198 11,290,034 22,813,748 22,887,020 Increase (decrease) in net assets before transfers 2,883,519 310,313 750,581 127,773 3,634,100 438,086 Transfers 377,948 387,613 (377,948) (387,613 ) Increase in net assets 3,261,467 697,926 372,633 (259,840) 3,634, I 00 438,086 Net assets - January 1 33,719,592 33,021,666 13,148,191 13,408,031 46,867,783 46,429,697 Net assets - December 31 $36,981,059 $33,719,592 $13,520,824 $13,148,191 550,501,883 $46,867,783 27 Management's Discussion and Analysis Below are graphs providing breakdowns of the governmental activities revenues by source and governmental activities expenditures by function: GoyernmentalAeth'ities - 2004 Reyenues Unrestricted Transfcrs 3% Churges for services 15% Operating gr.ml5 and contribmions 11% Grants nnd contributions not restricted to specific progmms 15% Property faxes 33% Tax increment collections 6% Goyernmental Activities - 2004 Expenses Interest on long~ term debt 3% Genernl government 14% Public works 1 H% Puhlicsafuty 31% 28 Management's Discussion and Analysis Business- Tvpe Activities Business-type activities increased net assets by $372,633. A key element ofthis increase was as follows: . The City of Columbia Heights purchases water for distribution to its residents from the City of Minneapolis. In conjunction with bringing a new water plant on line in 2004, the City of Minneapolis revised its pricing fonnula for its water sales. This resulted in an average cost savings for the City of Columbia Heights of approximately 28% per unit. Total water department expenses for 2004 decreased by $266,015 compared to the prior year, yet charges for services increased $222,648 compared to the prior year. Below are graphs providing breakdowns of business-type activities revenues by source and business-type activities expenditures by function: Business-Type Activities - 2004 Revenues Unrestricted investment Capitalgranlsund eurnings2% contributions Charges for services 97% 29 Management's Discussion and Analysis Business-Type Activities - 2004 Expenses Sewer 11%, Refuse 12% SC\'lCr 2%. 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 infonllation on near-tenll inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Columbia Heights' financing requirements. In ~l'l.rf~E'"I"11O':J.1" un,"a.cC/I,r1.TOd funrl h~la"'l"'j:3 may CAr1:Tt::1 aQ '" UCt::1-hll '1"'nt:laCllrA nf' a crr\'tTArnt'YlAnt' C'I nt3t pu.J....1\,..1uJ.u..l, J..L1......~""J..y\,..l .L J.J.UVU.1 1..1\..1\,.'1..1.1. .;IVJ.",,", ~u. ~V.1.u.J..1.J..J.'-' 1.3L,J.J.VV.L E;v"'.....J...LJ.J..U..'VLLL UJ..1......L 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$22,173,602. Ofthis total, $19,560,592 or 88% is unreserved fund balance. The remaining $2,613,010 of fund balance is reserved because it has already been committed as follows: A. $26,912 to provide for prepaid items. B. $1,744,041 to provide for real estate held for resale. C. $842,057 for grant-restricted program expenditures. The general fund is the chief operating fund of the City of Columbia Heights. Fund balance in the general fund increased by a total of$716,278 in 2004. Key elements ofthis increase were: . Compared to the prior year, license and permit fees increased by $224,839. This included a $187,358 building permit fee for the aforementioned water treatment plant. 30 Management's Discussion and Analysis . The general fund's share of the increase in annual investment income explained above in the discussion for govermnental activities was $119,965. · $105,268 of the increase to the general fund was net result ofa number of transfers to and from other funds as authorized by the City Council. These transfers are detailed in the notes to the financial statements. . Cost-of-living and other increases in wages and benefits under collective bargaining agreements were offset by the aforementioned hiring freeze, so that total actual personnel costs for the general fund in 2004 were approximately the same as for 2003. This also put 2004 actual costs well below the 2004 general fund budget. See the discussion below on budgetary highlights. The Anoka County CDBG fund decreased by $567. The Economic Development Authority administration fund decreased by $12,630. This was primarily due to a transfer out to the nonmajor funds in excess oftax revenues collected. The capital appreciation bonds of 1990 fund increased by $2,683,997. This was due to proceeds from a new bond issue (refelTed to above) and a certain transfer in from the nonmajor funds, both of which will be used in 2005 to refund the 1990 bonds. The municipal state aid street fund increased by $8,077 due to expenditures and transfers to other fund for maintenance and constmction on state aid streets in 2004 being slightly less than intergovernmental revenue received in 2004. F or the Sheffield tax increment financing redevelopment fund, tax increment collections and expenditures each increased by roughly the same amount, compared to 2003. By the tenns of the financing agreement, expenditures generally bear a relationship to collections over time. The fund increased by $29,945 for 2004. The capital improvement - development fund increased by $881,432 due primarily due to an $800,000 transfer in from the nonmajor funds for redevelopment projects. The capital improvements - general government buildings fund increased by $177,956 from investment income and transfers in from the internal service funds. This increase was in anticipation ofnear-tenn capital improvements to the City's Municipal Service Center, which includes the City's central garage. The capital equipment replacement general government fund increased by $216,137. This resulted from investment income and transfers in from the general fund and the liquor fund being greater than the City's share of capital equipment charged to this fund. In 2004, this fund also recognized $225,000 of both revenue and expense, for the second-half of a two-year $450,000 federal grant that subsidized the majority ofthe cost of quint (ladder) fire truck. 31 Management's Discussion and Analysis The capital improvements PIR fund decreased by $927,601 primarily due to the expenditure in 2004 of street improvement project financing (bonds) received in 2003. The nonmajor governmental funds decreased by $1,085,147 for 2004. This was mainly the result of the $800,000 transfer to the capital improvement - development fund mentioned above. 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 (deficit) in the respective proprietary funds are water ($562,137), sewer $3,064,516, refuse $385,389, stonn sewer ($55,807) and liquor $3,219,011. The water, stann sewer and liquor funds had increases in net assets in 2004 of $22,227 and $220,967 $258,429 respectively. The sewer and refuse funds had decreases in net assets of$206,561 and $161,692 respectively. Other factors concerning the finances of the proprietary funds have already been addressed above in the discussion ofthe City's business-type activities. Bud2etarv Hi2hli2hts General Fund The changes between the original adopted 2004 budget and the final amended 2004 budget consisted of: .. A reclassification of $587,319 from tax revenue to intergovernmental revenue - market value homestead credit. In the State of Minnesota, a pOliion of what a city adopts for its annual tax levy is paid to the city in the form of a market value homestead credit. At the time the levy is required under state law to be initially adopted, however, the portion that will ultimately take the fonn of a market value homestead credit is not estimable. I!l An increase of $97,679 to both budgeted revenue and expenditures to incorporate into the general fund certain state aid contributed to a retirement plan for the City's paid on-call firefighters. This previously was accounted for in a separate fund. . An increase of $21 ,647 to budgeted police overtime expenditures. This increase was funded by additional grants and charges for services specifically for this overtime. . A decrease of $20,482 to transfers in from other funds, to reflect that certain administrative services previously provided by the general fund to the Housing and Redevelopment Authority were discontinued in 2004. 32 Management's Discussion and Analysis For 2004, actual general fund revenues exceeded budget by $294,631. This was primarily due to actual license and pennit revenue exceeding budget by $183,219. This variance relates to the building pennit for the Minneapolis water treatment plant mentioned above. Actual personnel expendihlres for the general fund in 2004 were $331,406 less than budgeted, due to the hiring freeze mentioned above in the discussion on governmental activities. Nonpersonnel expenditures, plus transfers out, were $132,969 less than budgeted. This was attributable in part to other cost containment practices during 2004, such as a freeze on out-of- town travel. Additional budgetary compm1son for the general fund is provided in Statement lO of this financial report. 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 31,2004, amounts to $27,875,936 (net of accumulated depreciation). This investment in capital assets includes land, buildings, improvements other than buildings, office fumihlre and fixtures, machinery and equipment, infrastructure and constmction in progress. Major capital asset events during the current fiscal year included the following: . The additions to construction in progress for the year included $1,903,337 for Zone 7 street rehabilitation. This brought the total construction in progress at December 31, 2004 for this project to $1,962,623. This project began in 2002. . The City fire department's first ever quint (ladder) truck was completed and placed in service at a total cost, including loose equipment, of$596,700. 33 Management's Discussion and Analysis City of Columbia Heights' Capital Assets (Net of Depreciation) Beginning Balance Additions Governmental activities: Capital assets - not depreciated: Land Construction in progress Total capital assets not being depreciated Capital assets - being depreciated: Buildings and structures Improvements Office furniture and fixtures Machinery and equipment Infrastructure Total capital assets being depreciated Less accumulated depreciation for: Buildings and structures Improvements Office furniture and fixtures Machinery and equipment Infrastructure Total accumulated depreciation Total capital assets being depreciated Governmental activities capital assets - net $3,103,061 $73 297,624 2,195,977 3,400,685 2,196,050 8,400,600 108,621 2,991,821 307,506 4,549,945 720,883 15,389,447 59,408 31,639,319 888,9] 2 6,467,641 170,294 1,948,627 73,580 212,050 24,484 2,530,689 364,039 5,777,292 612,718 16,936,299 1,245,115 14,703,020 (356,203) 18,103,705 1,839,847 Business-type activities: Capital assets - not depreciated: Land Constmction in progress Total capital assets not being depreciated Capital assets - being depreciated: Buildings and structures Improvements o [fice fi.rrniture and fixtures Machinery and equipment Total capital asscts bcing depreciated Less accumulated depreciation for: Buildings and stmctures Improvements Office fi.rrniture and fixtures Machinery and equipment Total accumulated dcprcciation Total capital assets being depreciated Business-type activities capital a~sets - net $340,893 $ 123,579 649,987 464,472 649,987 660,745 12,014,999 227,194 81,014 ] ,037,999 268,591 13,794,757 495,785 449,489 26,170 4,630,567 313,360 81,015 (1) 804,619 59,540 5,965,690 399,069 7,829,067 96,716 8,293,539 746,703 $26,397,244 $2,586,550 Total capital assets - net Deletions $ (729,540) (729,540) o o (729,540) $ (378,318) (378,3 I 8) o o (378,318) ($1,107,858) Ending Balance $3,103,134 1,764,061 4,867,195 o 8,509,221 2,991,821 307,506 5,270,828 15,448,855 32,528,23 I 6,637,935 2,022,207 236,534 2,894,728 6,390,010 18,181,414 ] 4,346,817 19,214,012 $340,893 395,248 736,141 o 660,745 12,242,193 81,014 ] ,306,590 14,290,542 475,659 4,943,927 81,014 864,159 6,364,759 7,925,783 8,661,924 $27,875,936 Additional information on the City of Columbia Heights' capital assets can be found in Note 4 to the [mancial statements. 34 Management's Discussion and Analysis Long-term debt. At the end of the current fiscal year, the City of Columbia Heights had total bonded debt outstanding of $7,524,704. This entire amount was general obligation debt backed by the full faith and credit of the City of Columbia Heights. In addition, there are specific revenue sources pledged to repay each of the various components of this debt. General obligation tax increment debt of $1,279,704 used to finance economic development within the City will be repaid primarily with the proceeds from new general obligation tax increment bonds issued in 2004 to take advantage of favorable interest rates. Tax increment collections are pledged for the repayment ofthe new bonds. These new bonds amount to $1,985,000. Special assessments are pledged for the repayment of general obligation improvement debt of$1,773,623. Utility revenues are pledged for the repayment of general obligation revenue debt used to finance utility improvements. General obligation revenue debt was $2,486,377 at year end. In addition to bonded debt, at year end there was long-term debt in the amount of$693,861 for compensated absences. City of Columbia Heights' Outstanding Debt Governmental Activities Business-Type Activities Totals 2004 2003 $3,264,704 $1,630,288 1,773,623 1,937,828 611,895 604.749 $5,650,222 $4,172,865 2004 2003 2004 2003 General obligation tax incrcmcnt bonds General obligation improvement bonds Gcncral obligation rcvenuc bonds Compt:llsaleu ubsences 2,486,377 81,966 2.737,171 71,627 $3,264,704 1,773,623 2,486,377 693,861 $1,630,288 1,937,828 2,737,171 676,376 $2,568,343 $2,808,798 $8,218,565 $6,981,663 The City of Columbia Heights maintains an Al rating from Moody's, based on the City's healthy .c:.........._c~n 1 lln,..,...rt"~-s n.vo........."rt-o rlahi- le'V.a.1C'1 "....,,.1 r-.""''I''1+~"MU.o.r1 fr:l'V l""r},C"Cl n-rr'\'uV+h .LllJUl1 1a1 1J. alt:;ll.1 , a \0.1100\..1 U\..IUL 1 \"..oIl:) auu \..IVJ.ILlH. \.1\..1 l.U.A UUu...... 5J.V V UJ.. State statute limits the net amount of certain general obligation debt a Minnesota city may issue to 2% of total estimated market value of the property within the city's taxing jurisdiction. The current debt limitation under this statute for the City of Columbia Heights is $19,133,440. However, none ofthe City's debt outstanding at the end of the current fiscal year is ofthe type counted within the statutory limitation. Additional infonTIation on the City of Columbia Heights' long- tenTI debt can be found in Note 7 to the [mancial statements. 35 Management's Discussion and Analysis Economic Factors and Next Year's Budgets and Rates The unemployment rate for Anoka County, which includes the City of Columbia Heights, is currently 3.9 percent, which is a decrease from a rate of 4.4 percent a year ago. This compares to the state's current average unemployment rate of 4.1 percent and the current national average rate of 5.2 percent. Inflationary trends in the region compare favorably to national trends. State aid to local government that will be received by the City of Columbia Heights in 2005 is expected to be $544,730 less than was received in 2004. All of these factors were considered in preparing the City of Columbia Heights' budget for the 2005 fiscal year. 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 infonnation 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. 36 BASIC FINANCIAL STATEMENTS 37 CITY o.F COLUMBIA HEIGHTS, MINNESOTA STATEMENT OF NET ASSETS December 31, 2004 Statement 1 Page 1 of2 Primary Government Governmental Business- Type Totals Assets Activities Activities 2004 2003 Current assets: Cash and investments $22,587,883 $4,473,888 $27,061,771 $26,753,555 Receivables: Accounts (net of allowance for uncollectibles) 286,530 960,140 1,246,670 1,166,983 Special assessments - current 358,447 358,447 ]43,665 Taxcs 177,177 177,177 242,917 Interest ] 76,750 4],946 2 18,696 223,]58 Loans 3,620 3,620 6,545 Due from other governmental units 739,522 114,419 853,941 308,447 Due from other agencies 6],334 61,334 25,150 Internal balances (779,887) 779,887 Prepayments 67,144 69,732 136,876 91,665 Inventory - at cost 49,402 ] ,644,859 ] ,694,261 1,435,282 Real estate held for resale 2,494,485 2,494,485 478,313 Tota] current assets 26,222,407 8,084,87 ] 34,307,278 30,875,680 Noncurrcnt asscts: Special assessments receivable - noncurrent 1,246,751 1,246,751 1,087,049 Duc from other govcrnmcntal units 155,785 155,785 178,368 Capital assets (net of accumulated depreciation): Land 3,103,134 340,893 3,444,027 3,443,954 Buildings 1,871,286 185,086 2,056,372 2,144,217 Improvements other than buildings 969,614 7,298,266 8,267,880 8,427,625 Office fumihlre and fixtures 70,972 70,972 95,456 Machincry and equipment 2,376,100 442,431 2,818,531 2,252,634 ]nfrastmcture 9,058,845 9,058,845 9,612,]55 Construction in process ],764,061 395,248 2, ]59,309 42] ,203 Total noncurrent assets 20,460,763 8,817,709 29,278,472 27,662,661 Total assets 46,683,] 70 ] 6,902,580 63,585,750 58,538,341 The accompanying notes are an integral pa11 of these financial statements. 38 CITY o.F COLUMBIA HEIGHTS, MINNESOTA STATEMENT OF NET ASSETS December 31, 2004 Statement 1 Page 2 of2 Primary Govcrnmcnt Governmental Business- Type Totals Liabilities Activitics Activities 2004 2003 Current liabilities: Accounts payable $359,920 $580,677 $940,597 $725,959 Accnlcd salaries and withho1dings payable 241,986 59,714 301,700 238,983 Contracts payable - retained percentage 368,967 368,967 181,123 Due to other governmental units 47,063 135,859 ] 82,922 662,960 Unearned revenue 774,879 774,879 248,487 Accnled interest payable 2,227,552 37,163 2,264,715 2,574,869 Deposits 31,522 31,522 56,514 Compensated absences payable - cuuent 18,296 2,452 20,748 16,443 Bonds payable - current 1,449,035 265,668 1,714,703 765,584 Total current liabilities 5,519,220 1,081,533 6,600,753 5,470,922 Noncunent liabilities: Compensated absences payable - noncurrent 593,599 79,514 673,113 659,933 Bonds payable - noncurrent 3,589,292 2,220,709 5,810,001 5,539,703 Total nonCUlTent liabilities 4,182,891 2,300,223 6,483,114 6,199,636 Totalliabilitics 9,702,111 3,381,756 13,083,867 11,670,558 Nct assets Invested in capital assets - net of related debt 14,328,916 6,175,547 20,504,463 19,968,377 Restricted for: Debt service 927,065 337,389 1,264,454 923,771 Other expenditures required under debt covenant 27,801 27,801 Tax increment purposes 498,371 498,371 476,608 Grant programs 832,068 832,068 4,666 Unrestricted 20,366,838 7,007,888 27,374,726 25,494,361 Total net assets $36,981,059 $13,520,824 $50,501,883 $46,867,783 The accompanying notes are an integral part of these financial statements. 39 CITY o.F COLUMBIA HEIGHTS, MINNESOTA STATEMENT OF ACTIVITIES For The Year Ended December 31,2004 Charges For Expenses Services Functions/Programs Primary government: Government activities: General government $1,669,721 $203,344 Public safety 3,640,970 488,216 Public works 2,109,060 48,253 Culture and recreation 1,904,848 239,352 Community development 2,]71,407 ],313,9]2 Interest on long-tenn debt 387,544 Total government activities 11,883,550 2,293,077 Business-type activities: Water 1,637,316 1,771,153 Sewer 1,2 ]9,200 1,0]9,532 Refuse 1,32],730 1,255,011 Stonn sewer 158,374 284,223 Liquor 6,593,578 6,975,756 Total business-type activities 10,930,] 98 ] 1,305,675 Total primary government $22,813,748 $13,598,752 The accompanying notes are an integral part of these financial statements. 40 Statement 2 Program Revenues Operating Grants and Contributions Capital Grants and Contributions Governmental Activities Net (Expense) Revenue and Changes in Net Assets Primary Government Business- Type Activities 2004 Totals 2003 $ $ ($1,466,377) $ ($1,466,377) ($1,032,103) 436,460 225,000 (2,491,294 ) (2,491,294) (2,669,669) 213,801 1,315,007 (531,999) (531,999) (1,532,375) 72,269 50,250 (1,542,977) (1,542,977) (1,761,021) 955,213 177,737 275,455 275,455 (591,837) (387,544) (387,544) (414,297) 1,677,743 1,767,994 (6,144,736) 0 (6,144,736) (8,001,302) 133,837 133,837 (354,826) (199,668) (199,668) 11,153 46,635 (20,084) (20,084) (28,515) 113 ,407 239,256 239,256 32,316 382,178 382,178 340,974 46,635 113,407 0 535,519 535,519 1,102 $1,724,378 $1,881,401 ($6,144,736) $535,519 ($5,609,217) ($8,000,200) General revenues: Property taxes $4,989,205 $ $4,989,205 $4,306,036 Tax increment collections 972,208 972,208 781,439 Grants and contributions not restricted to specific programs 2,337,386 2,337,386 2,712,408 Unrestricted investment earnings 729,456 215,062 944,518 534,879 Gain on disposal of capital assets 103,524 Transfers 377,948 (377,948) Total general revenues and transfers 9,406,203 (162,886) 9,243,317 8,438,286 Change in net assets 3,261,467 372,633 3,634,100 438,086 Net assets - beginning, as restated (Note 15) 33,719,592 13,148,191 46,867,783 46,429,697 Net assets - ending $36,981,059 $13,520,824 $50,501,883 $46,867,783 The accompanying notes are an integral part of these financial statements. 41 CITY OF COLUMBIA HEIGHTS, MINNESOTA BALANCE SHEET GOVERNMENTAL FUNDS December 31,2004 Economic Anoka Development Capital Connty AuthOlity Admin Appreciation General CDBG (Component Unit) Bonds of 1990 Assets Cash and investments $3,895,759 $ - $118,581 $4,346 Cash and investments with fiscal agent 2,662,375 Receivables: Aeeotll1ts 25,628 Special assessments Taxes 149,962 6,506 Interest 37,679 101 17,276 Loans Due fi'om other govemmental units 255,541 159,961 Due from other agencies 61,334 Interfund receivable 189,640 Prepayments 23,302 Real estate held for resale 750,444 1,397,022 Total assets $4,638,845 $910,405 $1,522,210 $2,683,997 Liabilities and Fund Balances Liabilities: Accounts payable $190,771 $ $ $ Accmed salaries and withholdings payable 205,324 Contracts payable - retained percentage Due to other goveInmentalunits 1,254 Interfund payable 188,597 1,439,686 DefeITed revenue 101,386 750,444 4,475 Deposits 1,000 Total liabilities 498,735 940,041 1,444,161 0 Fund balances: Reserved for: Prepayments 23,302 Real estate held for resale 1,397,022 Program expenditures Debt service 2,683,997 Unreserved: Designated repOlted in: General fimd 3,743,344 Special revenue fimds Debt service funds Capital projects ftmds Undesignated repOlted in: Geneml fund 373,464 Special revenue funds (29,636) (1,318,973) Debt service ftmds Capital projects ftmds Total ftmd balances 4,140,110 (29,636) 78,049 2,683,997 Total liabilities and ftllld balances $4,638,845 $910,405 $1,522,210 $2,683,997 The accompanying notes arc an integral paIt of these fmancial statements. 42 Statement 3 $1,587 1,237 47,339 $ $69, J09 $ $ 156,300 420 13 169,168 469,293 219,331 469,293 225,829 13 o 254,406 27,801 1,251,604 3,373,534 4,731,313 (136,821 ) (136,821) $82,510 (434,473) (434,473) $34,820 1,506,010 $1,731,839 3,373,534 $3,373,547 4,759,114 $4,759,114 Flmd balance repOlied above AlIlOlmts repOlied for govelUmental activities in the statement of net assets are different because: Capital assets used in govelUmental activities are not financial resources, and therefore, are not reported in the funds Other 10ng-tetID assets are not available to pay for Clllrent- petiod expenditures and, therefore, are detimed in the funds. Internal service ftmds arc used by management to charge the costs of garage, energy management, data processing, insm-ance and compensated absences to individual ftmds. With the exception of the data processing ft1l1d which is a business-type ftmd, the assets and liabilities of the internal service ftmds are included in the govemmental activities in the statement of net assets. Long-term liabilities, including bonds payable, are not due and payable in the CUlTent period and therefore arc not reported in the ftmds. Net assets of governmental activities $12,704 1,555 164,315 1,598,031 9,439 1,786,044 71,500 16,265 87,765 $1,873,809 $71,315 28,514 1,000 45,389 116,577 44,301 21,083 328,179 3,610 21,113 814,256 138,207 1,080,743 3,223,770 557,953 (36,096) 342,397 6,145,953 $6,4 74,132 43 The accompanying notes arc an integral pmt of these fmancial statements. $ (1,865,112) (1,865,112) o ($1,865,112) $345,486 236,630 368,967 47,063 518,209 2,498,637 31,522 4,046,514 26,912 1,744,041 842,057 2,683,997 3,743,344 138,207 1,080,743 12,596,486 373,464 (790,656) (36,096) (228,897) 22,173,602 $26,220,116 $22,173,602 19,121,900 1,723,758 1,227,678 (7,265,879) $36,981,059 CITY OF COLUMBIA HEIGHTS, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For The Year Ended December 31, 2004 Economic Anoka Development Capital Municipal County Authority Admin Appreciation State Aid Revenues: General CDBG (Component Unit) Bonds of 1990 Street Fund Taxes $4,336,802 $ - $197,418 $ - $ - Tax increment collections Special assessments Licenses and permits 506,319 Intergovernmental 2,517,347 525,544 12,889 463,321 Charges for services 444,856 Fines and forfeitures 140,282 Investment income: Interest and dividends 178,937 482 7,982 Change in fair value (7,756) (21) (3,033) Other revenues 31,025 Total revenues 8,147,812 525,544 210,768 4,949 463,321 Expenditures: Cun-ent: General government 1,557,562 Public safety 3,462,092 Public works 1,125,984 73,399 Culture and recreation 1,210,627 Community development 567 750 Capital outlay: Public safety Public works 123,720 77,039 Culture and recreation 56,217 Community development Debt service: Principal retirement 350,584 Interest and fiscal charges 570,166 Issuance costs 29,374 Miscellaneous 138 Developer incentives Contractual services Total expenditures 7,536,202 567 750 950,262 150,438 Revenues over (under) expenditures 611,610 524,977 210,018 (945,313) 312,883 Other tinancing sources (uses): Bond proceeds 1,948,923 Bond discount (5,827) Transfers in 456,634 1,686,214 Transfers out (351,366) (525,544) (222,648) (304,806) Total other financing sources (uses) 105,268 (525,544 ) (222,648) 3,629,3 to (304,806) Net change in fund balance 716,878 (567) (12,630) 2,683,997 8,077 Fund balance (deficit) - January 1 3,423,232 (29,069) 90,679 (144,898) Fund balance (deficit) - December 31 $4,140,110 ($29,636) $78,049 $2,683,997 ($136,821) The accompanying notes are an integral pad of these financial statements. 44 Statement 4 Capital Capital Sheftield Capital Improvements Equipment Capital Other Intra Total TIF Improvement General Gov't Replacement Improvements Governmental Activity Govenunental Redevelopment Development Buildings General Gov't PIR Fund Funds Eliminations Funds $ - $ - $ - $ - $ - $433,585 $ - $4,967,805 46,386 923,240 969,626 671,357 671,357 80,638 586,957 6,763 376,341 225,000 560,661 4,687,866 286,948 18,061 692,573 1,442,438 140,282 419 12,070 122,778 173,927 17,107 215,884 729,586 (18) (523) (5,322) (7,539) (742) (9,357) (34,311) 1,100 27,801 212 116,437 176,575 53,550 675,936 117,456 419,189 786,633 2,933,023 0 14,338,181 18,671 1,576,233 1,711 151,397 3,615,200 14,484 97,523 1,311,390 1,295 660,256 1,872,178 23,605 972,674 997,596 266,190 210,321 476,511 1,349,203 87,597 1,637,559 19,372 8,366 83,955 580,] 68 102,771 682,939 164,205 514,789 68,058 638,224 544 29,918 14,156 14,294 67,866 67,866 575,880 2,685 578,565 23,605 1,156,048 0 303,052 1,446,726 2,529,567 0 14,097,217 29,945 (480,112) 117,456 116,137 (660,093) 403,456 0 240,964 36,077 1,985,000 (108) (5,935) 1,361,544 60,500 100,000 275,345 1,123,066 (4,224,366) 838,937 (542,853) (2,647,638) 4,224,366 (370,489) 0 1,361,544 60,500 100,000 (267,508) (1,488,603) 0 2,447,513 29,945 881,432 177,956 216,137 (927,601) (1,085,147) 0 2,688,477 (464,418) 624,578 3,195,578 4,542,977 1,015,366 7,231,100 19,485,125 ($434,473) $1,506,010 $3,373,534 $4,759,114 $87,765 $6,145,953 $0 $22,173,602 The accompanying notes are an integral pmi of these financial statements. 45 - This page intentionally left blank - 46 CITY O]1~ COLUMBIA HEIGHTS, MINNESOTA RECONClLIATION 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 , 2004 Statement 5 2004 Amounts rep0l1ed for governmental activities in the statcmcnt of activitics (Statement 2) are diffcrent because: Net changes in fund balances - total governmental funds (Statement 4) $2,688,477 Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated uscfullives and reported as depreciation cxpense. This is thc amount by which capital outlays exceeded depreciation in the cun-ent period. 1,142,356 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 394,707 The issuance oflong-telID 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 diffcrcnces in thc treatment of long-tenn debt and related items. (1,470,211) Some expenses reported in the statement of activities do not require the use of eunent financial resources and, therefore, are not reported as expenditmes in governmental funds. 300,828 The net revenue of ce11ain activities of internal service funds are repOlted with governmental activities. 205,310 Change in net assets of governmental activities (Statement 2) $3,261,467 The accompanying notes are an integral palt of these financial statements. 47 CITY OF COLUMBIA HEIGHTS, MINNESOTA STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 3 I, 2004 Assets: Current assets: Cash and cash equivalents Receivables: Accounts (net of allowance for uncollectibles) Interest Due from other govemmental units Interfund receivable Prepayments InventOlY - at cost Total cun-ent assets NonculTent assets: Due from other govemmental units Capital assets: Land Buildings Improvements other than buildings Office fumiture and fixtures Machinery and equipment Construction in process Total capital assets Less: accumulated depreciation Net capital assets Total noncurrent assets Total assets Liabilities: Current liabilities: Accounts payable Accrued salaries and withholdings payable Due to other govemmental units Interfund payable Accrued interest payable Deposits Compensated absences payable - CUlTent Bonds payable - CUlTent Total cun-ent liabilities Noncurrent liabilities: Compensated absences payable - noncurrent Bonds payable - noncun-ent Total noncurrent liabilities Total liabilities Net assets: Invested in capital assets, net of related debt Restricted for debt service Unrestricted Total net assets 7,544 6,975 3,189 19,572 73,228 1,425,672 23,592 436 430 430 158,258 3,865 1,691,913 31,278 13,943 13,943 1,471,587 2 1,605 1,485,530 35,548 3,177,443 66,826 3,052,136 2,441,010 229,021 4,823 (562,137) 3,064,516 $2,719,020 $5,510,349 Adjustments to reflect the consolidation of intemal service fund activities related to enterprise funds Net assets of business-type activities The accompanying notes are an integral part of these financial statements. 48 90,471 90,471 o 90,471 51,391 385,389 $436,780 Statement 6 Business-Type Activities - Enterplise Funds Total Intra Activity Total Internal Proprietary Stornl Sewer Liquor Eliminations Enterprise Funds Service Funds Funds $119,466 $2,081,518 $ - $3,722,253 $2,683,406 $6,405,659 61,678 1,678 960,140. 960,140 681 15,408 41,719 7,751 49,470 113,407 1,012 114,419 114,419 24,273 (1,681,447) 476,257 41,952 518,209 5,534 69,732 40,232 109,964 1,640,919 1,644,859 49,402 1,694,261 319,505 3,746,069 (1,681,447) 7,029,379 2,822,743 9,852,122 155,785 155,785 254,724 4,360 340,893 340,893 162,239 660,745 371,383 1,032,128 1,148,708 81,198 12,242,191 119,846 12,362,037 14,791 81,014 81,014 349,632 1,267,745 115,888 1,383,633 100,538 395,248 395,248 1,503,970 612,220 0 14,987,836 607,117 15,594,953 (156,861) (509,609) (6,338,264) (502,653) (6,840,917) 1,347,109 102,611 0 8,649,572 104,464 8,754,036 1,347,109 102,611 0 8,805,357 104,464 8,909,821 1,666,614 3,848,680 (1,681,447) 15,834,736 2,927,207 18,761,943 2,191 388,738 495,919 99,192 595, III rr-^ 31 ,468 54,879 10,191 65,070 OJ\) 16 62,615 135,859 135,859 255,775 (1,681,447) 13,135 37,163 37,163 1,323 2,183 18,565 20,748 103,545 265,668 265,668 375,312 484,144 (1,681,447) 991,671 127,948 1,119,619 42,914 70,800 602,313 673,113 727,517 2,220,709 2,220,709 727,517 42,914 0 2,291,509 602,313 2,893,822 1 ,102,829 527 ,058 (1,681,447) 3,283,180 730,261 4,013,441 516,047 102,611 6,163,195 104,464 6,267,659 103,545 337,389 337,389 (55,807) 3,219,011 6,050,972 2,092,482 8,143,454 $563,785 $3,321,622 $0 12,551,556 $2,196,946 $14,748,502 969,268 $13,520,824 The accompanying notes are an integral part ofthese iinancial statements. 49 CITY OF COLUMBIA HEIGHTS, MINNESOTA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS For The Year Ended December 31, 2004 Business- Type Activities - Enterprise Funds Water Sewer Refuse $74,554 $1,011,419 $1,255,011 1,686,299 1,760,853 1,011,419 1,255,011 1,396,514 1,059,031 1,274,023 180,558 142,041 11,169 1,577,072 1,201,072 1,285,192 183,781 (189,653) (30,181) Operating revenues: Charges for services Charges for sales Total operating revenucs Operating expenses: Cost of sales, services and goods sold Operating expense Depreciation Total operating expenscs 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) 20,872 113,048 (905) (3,839) 10,300 8,113 (57,387) (1,067) (1,249) (27,120) 115,006 156,661 (74,647) 212,050 272,505 (346,484) (404,419) (134,434) (131,914) 22,227 (206,561 ) 2,696,793 5,716,910 $2,719,020 $5,510,349 12,299 (533) 46,635 58,401 Net incomc (loss) before h"ansfers 28,220 Transfers in Transfers out Total h"ansfers (189,912) (189,912) Change in net assets (161,692) Net assets - beginning 598,472 Net assets - ending $436,780 Change in net assets as reported above Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Change in net assets of business-type activities The notes to the financial statements are an integral part of this statement. 50 Statement 7 Busincss- Type Activitics - Entcrprise Funds Total Intra Activity Total Internal Proprietary Storm Sewer Liquor Eliminations Enterprise Funds Service Funds Funds $284,223 $ $ $2,625,207 $1,010,497 $3,635,704 6,946,058 8,632,357 75,939 8,708,296 284,223 6,946,058 0 11 ,257,564 1,086,436 12,344,000 86,938 5,318,331 9,134,837 831,349 9,966,186 1,243,987 1,243,987 22,452 1,266,439 51,998 12,947 398,713 32,402 431,115 138,936 6,575,265 0 10,777,537 886,203 11,663,740 145,287 370,793 0 480,027 200,233 680,260 3,230 73,172 222,621 36,804 259,425 (140) (3,172) (8,589) (1,594) (10,183) 113,407 160,042 160,042 29,698 48,111 485 48,596 (32,048) (90,502) (90,502) (1,249) (1,249) 84,449 99,698 0 330,434 35,695 366,129 229,736 470,491 0 810,461 235,928 1,046,389 465,493 (894,249) 55,799 303,143 358,942 (474,262) (212,062) 894,249 (732,890) (94,500) (827,390) (8,769) (212,062) 0 (677,091) 208,643 (468,448) 220,967 258,429 0 133,370 444,571 577,941 342,818 3,063,193 12,418,186 1,752,375 14,170,561 $563,785 $3,321,622 $0 $12,551,556 $2,196,946 $14,748,502 $133,370 239,263 $372,633 The notes to the financial statements are an integral part of this statement. 51 CITY OF COLUMBIA HEIGHTS, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For The Year Ended December 31, 2004 Business- Type Activities - Enterprise Funds Water Sewer $1,733,909 $1,048,199 (1,164,907) (841,864) (254,243) (211,250) 10,300 8,113 (1,249) 325,059 1,949 212,050 272,505 (346,484) ( 404,419) (814,977) 307,986 451,787 625,339 (946,891 ) (292,057) (306,433) (149,145) (3,666) (64,037) (1,124) (505,239) (311,223) Cash flows from operating activities: Cash received from customers Cash received from interfund goods and services provided Cash paid to suppliers for goods and services Cash paymcnts to employees for services Miscellaneous revenues Miscellaneous expenses Net cash flows from operating activities Cash flows from noncapital fInancing activities: Transfers in Transfers out 1nterfund receivable advanced to other funds Interfund receivable repaid by other funds Interfund payable advanced from other funds Net cash flows from noncapital fInancing activities Cash flows from capital and related fInancing activities: Acquisition of capital assets Proceeds of capital grants and contributions Principal payments - bonds Interest and fIscal charges 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 21,671 118,728 (905) (3,839) 20,766 114,889 465,925 (1,141,276) 5,807 2,003,712 $471,732 $862,436 Nct increase (dccrease) in cash and cash equivalents Cash and cash equivalents - January 1 Cash and cash equivalents - December 31 The notes to the financial statements are an integral pmt of this statement. 52 Statement 8 Page 1 of2 Business-Type Activities - Enterprise Funds Total Total Internal Proprictary Refuse Stornl Sewer Liquor Enterprise Funds Service Funds Funds $] ,247,253 $271,581 $6,944,957 $] ],245,899 $ $1 ] ,245,899 1,109,501 1,109,501 (1,287,348) (76,889) (5,941,065) (9,312,073) (509,512) (9,821,585) (658) (7,346) (798,087) (1,271,584) (281,155) (1,552,739) 46,635 29,698 94,746 485 95,231 (1,249) (1,249) 5,882 187,346 235,503 755,739 3] 9,319 1,075,058 465,493 950,048 303,143 1,253,191 (189,912) (474,262) (212,062) (1,627,139) (94,500) (1,721,639) (24,273) (839,250) (41,952) (881,202) 307,986 307,986 93,082 544,869 544,869 (189,912) 60,040 (212,062) (663,486) 166,691 (496,795) (96,003) (60,25]) (754,744) (12,705) (767,449) (97,983) (250,794) (250,794) (34,668) (99,829) (99,829) 0 (228,654) (60,251) (1,105,367) (12,705) (1,118,072) 13,770 4,635 74,901 233,705 35,667 269,372 (533) (140) (3,172) (8,589) (1,594) (10,183) 13,237 4,495 71,729 225,116 34,073 259,189 (170,793) 23,227 34,919 (787,998) 507,378 (280,620) 357,894 96,239 2,046,599 4,510,251 2,176,028 6,686,279 $187,101 $119,466 $2,081,518 $3,722,253 $2,683,406 $6,405,659 The notes to the financial statements are an integral part of this statement. 53 CITY OF COLUMBIA HEIGHTS, MINNESOTA STATEMENT OF CASH FLOWS PROPRlETARY FUNDS For The Year Ended Deccmbcr 31,2004 Business-Type Activities - Entcrprisc Funds Water Sewer $183,781 ($189,653) 10,300 8,113 (1,249) 180,558 142,041 (23,200) 9,028 27,752 (6,929) (641) 1,082 (5,523) (1,480) 17,393 (22,573) (3,744) 976 976 141,278 191,602 $325,059 $1,949 Reconciliation of operating income (loss) to net cash tlows from operating activities Operating income (loss) Adjustmcnts to reconcilc operating incomc (loss) to net cash flows from operating activities: Misccllancous revenues Miscellaneous expenses Depreciation expense Changes in assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in due from other govemmentalllnits (Increase) decrease in prepaymcnts (Incrcase) decrease in inventory, at cost Increase (decrease) in accounts payable Increase (decrease) in accmed salaries and withholdings payable Increase (decrease) in duc to other govemmentalllnits Increase (decrease) in deposits Increase (decrease) in compensated absences payable Total adjustments Net cash flows from operating activities The notes to the financial statements are an integral part of this statement. 54 Business- Type Activities - Enterprise Funds Total Total Internal Proprietary Refuse Storm Sewer Liquor Enterprise Funds Service Funds Funds ($30,181) $145,287 $370,793 $480,027 $200,233 $680,260 46,635 29,698 94,746 $485 95,231 (1,249) (1,249) 11,169 51,998 12,947 398,713 32,402 431,115 (7,758) (12,644) (1,101) (35,675) 2,281 (33,394) 853 28,605 15,789 44,394 (93) (7,022) (29,379) (36,401) (259,318) (259,959) 980 (258,979) (13,983) 2,189 76,114 59,879 83,328 143,207 500 7,977 24,390 4,144 28,534 16 (8,844) (31,401) (31,401) (3,744) (3,744) 6,477 8,429 9,056 17,485 36,063 42,059 (135,290) 275,712 119,086 394,798 $5,882 $187,346 $235,503 $755,739 $319,319 $1,075,058 The notes to the financial statements are an integral part of this statement. 55 CITY OF COLUMBIA HEIGHTS, MINNESOTA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS December 31,2004 Statement 9 2004 Assets: Cash and investments Receivables: Accounts Due from other governmental units Prepayments Total assets $127,037 216 19,081 23,884 170,218 Liabilities: Accounts payable Due to other governmental units Other liabilities Total liabilities 8,430 160,197 1,591 170,218 Net assets $ The notes to the financial statements are an integral pmt of this statement. 56 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 I, 2004 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 detennines 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 confonnity 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 (BRA) and the Economic Development Authority (EDA). The BRA 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 rclationship 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 accmal basis of accounting. Separate financial statements for the HRA and EDA arc not prepared. B. GOVERNMENT-WIDE AND .FUND };'INANCIAL 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 primmy government and its component units. For the most part, the effect ofinterfund activity has been removed from these statements. Governmental activities, which normally are suppOlted by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is 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 dircetly 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 palticular function or segment. Taxes and other items not included among program revenues are repOlted instead as general revenues. Separate financial statements arc provided for governmental funds, proprietary funds, and fiduciary funds, evcn though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual entcrprise funds are reported as separate columns in the fund financial statements. 57 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2004 C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION The government-wide financial statements are reported using the economic resources measurementfocus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when eamed and expenses are recorded when a liability is incUlTed, 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 thc providcr have bcen met. Govemmental fund financial statements are repOlied using the currentfinancial 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 thcreaftcr to pay liabilities of the current period. For this purposc, the govcrmnent considers all revenues, except rcimburscment grants, to be available ifthcy arc collected within 60 days of the end of the current fiscal period. Reimbursement grants are considered available if they are collected within one year oftlle end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accmal accounting. However, debt service expenditures, as well as expendihu'es related to compensated absences and claims and judgments, are recorded only when payment is duc. Property taxes, spccial asscssments, intergovernmental revcnues, chargcs for services and interest associated with the current fiscal period are all considered to be susceptible to accmal and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the cutTent fiscal period is considered to be susceptible to accmal as revenue of the current period. All other revenue items are considered to bc measurable and available only when cash is received by the govermnent. The govemment reports the following major governmental funds: The General Fund is the govermnent'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 County CDBG Fund was established to account for the revenues and expendihu'es associated with federal community development block grants and HOME funds. The Economic Development Authority Administration Hmd is a fund of the component unit, Economic Development Authority. It was established to account for revenues and expenditures associated with business development and community rcdevelopment projects in the City. The Capital Improvement Development Fund is used to account for improvements to various development areas within the City. 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. The ShefJield 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. 58 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2004 The Capital Appreciation Bonds of 1990 Fund was established to account for the accumulation of resources for the payment of principal and interest costs. 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 Fund was established to account for the replacement of capital assets as needed. The Capital Improvement - PIR Fund was established to account for projects that will be fully assessed to the affected propeliies. The government reports the following major proplietary funds: The Water Fund accounts for revenue and expenses associated with water services to area residents. The Sewer Fund accounts for revenues and expenses associated with sewer disposal within the City. Thc Refuse Fund accounts for rcvcnues and expenses associated with organizcd collection of refuse and rccycling within thc City. The Storm Se.lIer Fund accounts for revenues and expenses associated with stonn water disposal. The Liquor Fund accounts for revenues and expenses associated with the operation of three off-sale liquor stores. Additionally, the govcrnmcnt rcports thc following fund types: Internal Service Funds account for central garage, data processing, insurance, and compensated absences services provided to other departments of the goverml1ent on a cost reimbursement basis. Agency - The permit surcharge agency fimd is used to account for SAC charges and surcharges collected for and remittcd to thc State of Minncsota. The escrow agency fimd accounts for payroll relatcd 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. Govcrml1ents also havc the option of following subscquent private-sector guidance for their business-type activities and cnterprise funds, subject to this same limitation. The government has elected not to follow subsequent private-sector guidance. As a general mle the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general mle 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 distOli the direct costs and program revenues reported for the various functions concerned. 59 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 I, 2004 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 repOlted as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proplietary 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, ston11 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. All 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 1 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. Thc City Council annually adopts budgets prior to January I for the Gencral and ccrtain 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 intcgration 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 rund level are authorized by the City Council in accordance with the City Charter 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 fi"0111 alI 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 allocatcd to the individual funds on the basis of applicable cash balancc palticipation by cach fund using an averagc of monthly beginning cash and investment balances. 60 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 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 opcrations, numcrous 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 are planned to be eliminated in the subsequent year. Long-term interfund loans are classified as "interfund loan receivable/payable." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances." Property taxes and special assessments havc been reported net of estimated uncollectible accounts. (See Note I G and II) 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/assessmcnt date) of each year for collection in the following year. The County is responsible for billing and collecting all property taxes for itself, the City, the local School District and other taxing authorities. Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. Real property taxes are payable (by propcrty owners) on May 15 and October 15 of each calendar year. Personal property taxes are payable by taxpayers on Febmary 28 and June 30 of each year. These taxes are collected by thc 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 authOlity. 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 expendihlres of the current period. In practice, cun-ent and delinquent taxes and State credits received by the City in July, December and January are recognized as revenue for the CUlTent year. Taxes collected by the County by December 31 (remitted to the City the following January) and taxes and credits not received at year end are classified as delinquent and due from County taxes receivable. The portion of delinquent taxes not collected by the City in January is fully offset by deferred revenue because they are not available to finance current expenditures. 61 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2004 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 tenn of years usually consistent with the ten11 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 paymcnt is made or the amount is dctennincd to be excessive by the City Councilor court action. If special assessments are allowed to go delinquent, the property is subject to tax fOlfeit sale. Proceeds of sales from tax forfeit properties are allocated first to the County's costs of administeling all tax forfeit propelties. Pursuant to state statutes, a property shall be subject to a tax forfeit sale after three years unless it is homesteaded, aglicultural or seasonal recreational land, in which event the property is subject to such salc aftcr 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 asscssmcnts are not matcrial and havc not bcen rcportcd. 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, cunent 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 (rcmitted to the City the following January) are also recognized as rcvcnuc for the current year. All remaining delinqucnt, dcfcrred and special defelTed asscssments rcceivablc in governmental funds arc complctely offsct by dcfcn'cd rcvcnues. I. INVENTORIES GOVERNMENTAL FUNDS The original cost of materials and supplies has been recorded as expendihlres at the time of purchase. These funds do not maintain material amounts of inventOlies. 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. J. PREPAID ITEMS Ccrtain paymcnts to vcndors rcflcct costs applicable to fuhlrc accounting pcriods and arc rccorded as prcpaid items in both government-wide and fund financial statemcnts. 62 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3],2004 K. CAPITAL ASSETS Capital assets, which include land, buildings, improvements, office furniture and fixtures, machinery and equipment, and infrastruchlre 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 govemment as assets with an estimated useful life in excess of one year and an initial individual cost of more than the following: Capitalization Threshold Land Buildings and structures Improvemcnts other than buildings Machinery and equipment Fumiture and fixhlres lnfrastru cture $1 25,000 25,000 5,000 5,000 250,000 Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Infrastructure assets acquired prior to June 30, 1980 are not recorded. 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. In the case of initial capitalization of general infrastruchlre assets (i.e., those reported by govemmental activities) the City chose to include only those assets constructed since 1980. The City was able to estimate the historical cost from project files. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. For the year ended December 31, 2004, no interest was capitalized in connection with construction in progress. Property, plant, and equipment of the primary govemment, as well as the component units, arc depreciated using the straight line method over the following estimated useful lives: Capital Assets Buildings and structures Machinery and equipment Furnihlre and fixhlres 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 63 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 I, 2004 L. COMPENSA TED ABSENCES It is the City's policy to pennit employees to accumulate eamed but unused vacation and sick pay benefits. All vacation pay and one-third of sick pay is accmed when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in govemmental funds only if they have matured, for example, as a result of employee resignations and retirements. In accordance with the provisions of Statement of Government Accounting Standards No. 16, Accountingfor 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. Typically, resources from the compensated absences fund are used to liquidate the liability for compensated absences. 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, are immaterial and are expensed in the year of bond issuance. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the cun-ent 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 expendihlres. 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 fuhlre 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, expendihlres or expenses. Transactions that constihlte reimbursements to a fund for expendihlres/expenses initially made from it that are properly applicable to another fund, arc recorded as expenditures/expenses in the reimbursing fund and as reductions of expendihlres/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. 64 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2004 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. Q. COMPARATIVE DATA/RECLASSIFICATIONS Comparative total data for the prior year have been presented in the accompanying financial statements in order to provide an understanding of the changes in the City's financial position and operations. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the CUlTent year's presentation. R. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS 1. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND BALANCE SHEET AND THE GOVERNMENT-WIDE STATEMENT OF NET ASSETS The governmental fund balance sheet includes a reconciliation betweenjll11d balance - total governmentaljimds and net assets - governmental activities as reported in the government-wide statement of net assets. One element of that reconciliation explains that "long-tenn liabilities, including bonds payable, are not due and payable in the CLllTent period and therefore are not reported in the funds." The details oftms ($7,265,879) difference are as follows: Bonds payable Accrued interest payable ($5,038,327) (2,227,552) Net adjustment to reduce fund balance - total governmental funds to arrive at net assets of governmental activities ($7,265,879) 65 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2004 2. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES AND THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES The governmental nmd statement of revenues, expenditures, and changes in nmd balances includes a reconciliation between net changes infimd balances - total governmentalfimds 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 nmds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated usenlllives and reported as depreciation expense." The details of this $1,142,356 difference are as follows: Capital outlay Depreciation expense $2,355,420 (1,213,064) Net adjustment to increase net changes in fund balance - total governmental nmds to arrive at changes in net assets of governmental activities. $1,142,356 Another element of that reconciliation states, "Revenues on the Statement of Activities that do not provide current financial resources are not repOlied as revenues in the nmds." The details ofthis $394,707 difference are as follows: General property taxes deferred revenue: At December 31, 2003 At December 31, 2004 Tax increment taxes deferred revenue: At December 3 1 , 2003 At December 3 1 , 2004 Special assessments deferred revenue: At December 31; 2003 At December 31, 2004 Loans receivable - deferred revenue: At December 31, 2003 At December 31, 2004 Net adjustment to increase net changes in fund balances - total governmental nmds to arrive at changes in net assets of governmental activities. ($84,462) 105,861 (13,666) 16,248 (1,224,380) 1,598,031 (6,545) 3,620 $394,707 66 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 I, 2004 Another element of that reconciliation states that "the issuance of long-tenn debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the rcpaymcnt of the 10ng-tcIID debt consumes the current financial resources of governmental funds." Neither transaction, however, has any effect on net assets. The details of this ($1,470,211) difference are as follows: Debt issued Principal repayments: General obligation debt - tax increment General obligation debt - improvement Net adjustment to increase net changes in fund balanccs - total governmental funds to arrive at changes in nct asscts of govcrnmental activities. ($1,985,000) 350,584 164,205 ($1,470,211) S. STATEMENT OF CASH FLOWS For purposes of the Statcment of Cash Flows, the City considers all highly liquid debt instmmcnts with an Oliginalmaturity 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. 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 pOliion 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. A. DEPOSITS In accordance with Minnesota Statutcs, the City maintains deposits at those depository banks authorized by the City Council, all of which are members of the Federal Rescrve System. Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds. Minnesota Statutes rcquire that sccuritics pledged as collateral be held in safekeeping by the City Clerk/Treasurer or in a financial instihltion other than that furnishing the collateral. Authorized collateral includes the following: (I) United States government treasury bills, treasury notes, treasury bonds; (2) Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service available to the government entity; (3) General obligation securities of any state or local government with taxing powers which is rates "A" or better by a national bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated "AN' or better by a national bond rating service; (4) Unrated general obligation securities of a local government with taxing powers may be pledged as collateral against funds deposited by that same local government entity; 67 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 1, 2004 (5) IlTevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence that the bank's public debt is rated "AA" or better by Moody's Investors Service, Inc., or Standard & Poor's Corporation; and (6) Time deposits that are fully insured by the Federal Deposit Insurance Corporation. Balances at December 31, 2004 are as follows: Bank Balances Canying Amount 1) Insured or collaterized by securities held by the City or its agent in the City's name. $ 1,512,663 $ 1,203,676 2) Collaterlized with securities held by pledging the institution trust department in the City's name 3) Uncollateralized or collateralized with securities not in the City's name. $ 1,512,663 $ 1,203,676 Total B. INVESTMENTS Minnesota Statutes authorize the City to invest in the following: a) Direct obligations or obligations guaranteed by the United States or its agencies, its instnllnentalities, or organizations created by an act of congress, excluding mortgage-backed securities defined as high risk. b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities described in (a) above, general obligation tax-exempt securities, or repurchase or reverse repurchase agreements. c) Obligations of the State of Minnesota or any of its municipalities as follows: (1) any security which is a general obligation of any state or local government with taxing powers which is rated "A" or better by a national bond rating service. (2) any security which is a revenue obligation of any state or local government with taxing powers which is rated "AA" or better by a national bond rating service; and (3) a general obligation of the Minnesota housing finance agency which is a moral obligation of the State of Minnesota and is rated "A" or better by a national bond rating agency. d) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System. e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. f) Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000; a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York; certain Minnesota securities broker-dealers; or, a bank qualified as a depositor. g) General obligation temporary bonds of the same governmental entity issued under section 429.091, subdivision 7, 469.178, subdivision 5 or 475.61, subdivision 6. 68 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2004 Investment balances at December 31, 2004 are as follows: Custodial Credit Risk Category 123 Carrying Amount At Fair Value U.S. government securities (including securities insured by the U. S. Government) $23,988,55 I $ $ $23,988,551 Money market funds 1,990,395 Total investmcnts 25,978,946 Deposits Cash on hand Less fidicuimy fund cash 1,203,676 6,186 (127,037) Total cash and investments $27,061,771 Note 3 RECEIVABLES Significant receivables balances not expected to be collected within one year of December 31, 2004 are as follows: Special assessments receivable Due fi'ol11 other governmental units Major Funds Capital Improvement PIR Fund $1,246,751 Sewer Total $1,246,751 155,785 $ 155,785 Total $] ,246,751 $155,785 $1,402,536 As of January 1, 1996, thc Metropolitan Council (MCES) assumcd ownership of an cxisting intcrceptor 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$330,4I4. This amount is being amortized through CUlTent value payments from MCES over a IS-year period with interest at 4%. As of December 31, 2004, a balance of $155,785 remained to be collected over the next six years. This receivable is presented as due from other governmental units in the Sewer Utility Fund. 69 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 1,2004 Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities ofthe current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows: Unavailable Unearned Delinquent properly taxes receivable (general fund) Delinquent property taxes receivable (Economic Development Authority Administration fund) Delinquent tax incremenl (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 butuneamed (nonmajor funds) Real estate held lorresale - unearned gran I revenue (Anoka County CDBG fund) Total deferred/unearned revenue for governmental funds $101,386 4,475 16,248 20,265 1,577,766 3,620 $ $1,723,760 24,433 750,444 $774,877 70 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 I, 2004 Note 4 CAPITAL ASSETS Capital asset activity for the year endcd Deccmbcr 31, 2004, is as follows: Beginning Ending Balance Additions Deletions Balance Governmental activities: Capital assets - not depreciated: Land $3,103,061 $73 $ $3,103,134 Construction in progress 297,624 2,195,977 (729,540) 1,764,061 Total capital assets not being depreciated 3,400,685 2,196,050 (729,540) 4,867,195 Capital assets - being depreciated: Buildings and structures 8,400,600 108,621 8,509,221 Improvements 2,991,821 2,991,821 Office furniture and fixtures 307,506 307,506 Machinery and cquiplllent 4,549,945 720,883 5,270,828 Infrastructure 15,389,447 59,408 15,448,855 Total capital assets being depreciated 31,639,319 888,912 0 32,528,231 Less accumulated depreciation for: Buildings and structures 6,467,641 170,294 6,637,935 Improvements 1,948,627 73,580 2,022,207 Office furniture and fixtures 212,050 24,484 236,534 Machinery and equipment 2,530,689 364,039 2,894,728 Infrastructure 5,777,292 612,718 6,390,010 Total accumulated depreciation 16,936,299 ] ,245,115 0 ]8,181,414 Total capital assets being depreciated 14,703,020 (356,203) 0 14,346,817 Governmental activities capital assets - net 18,103,705 1,839,847 (729,540) 19,214,012 Business-type activities: Capital assets - not depreciated: Land $340,893 $ $ $340,893 Construction in progress 123,579 649,987 (378,318) 395,248 Total capital assets not being depreciated 464,4 72 649,987 (378,318) 736,141 Capital assets - being depreciated: Buildings and struetures 1160,745 660,745 Improvements 12,014,999 227,194 12,242,193 Office furniture and fixtures 81,014 81,014 Machinery and equipment 1.037,999 268,591 1,306,590 Total capital assets being depreciated 13,794,757 495,785 0 14,290,542 Less acculllulated depreciation for: Buildings and structures 449,489 26,170 475,659 Improvements 4,630,567 313,360 4,943,927 Office furniture and fixtures 81,015 (I) 81,014 Machinery and equipment 804,6]9 59,540 864,]59 Total aceumulated depreeiation 5,965,690 399,069 0 6,364,759 Total capital assets being depreciated 7,829,067 96,716 0 7,925,783 Business-type activities capital assets - net 8,293,539 746,703 (378,318) 8,66] ,924 Total capital assets - net $26,397,244 $2,586,550 ($1,107,858) $27,875,936 71 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2004 Depreciation expense was charged to functions/programs of the primary government - governmental activities as follows: Governmental activities: General government Public safety Public works Culture and recreation Community development Capital assets held by the City's internal service fund (Central Garage) is charged to various functions based on their usage of the assets Total governmental depreciation expense $58,605 148,054 824,525 82,558 99,324 32,049 $1,245,115 Depreciation expense was charged to functions/programs of the primary government - business-type activities as follows: Business-type activities: Water Sewer Refuse Stonn sewer Liquor Data processing Total business-type depreciation expense $180,558 142,041 11,169 51,998 12,947 356 $399.069 Note 5 INTERFUND RECEIVABLES, P A YABLES , AND TRANSFERS Individual fund intelfund receivable and payable balances at December 31, 2004 are as follows: Fund Receivable Payable Gcneral fund $189,640 S Anoka County CDBG 188,597 Economic Dev. Authority Admin. 1,439,686 Municipal state aid street fund 82,510 169,168 Sheffield TIF 469,293 Capital improvements development 800,000 Water 360,040 1,425,672 Sewer 1,773,391 Storm Sewer 24,273 255,775 Nonmajor funds 792,962 116,577 Insurance internal service fund 41,952 Total $4,064,768 $4,064,768 72 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2004 $48,473 of the interfund balanccs bctwcen nonmajor funds at December 31,2004 reflect intcrfund services provided in 2004 and reimbursed in 2005, All other interfund balances at December 31,2004 reflect noncapital lendinglborrowing arrangements to cover deficit cash balances at year end, including some to finance the acquisition of celia in real estate held for resale, All amounts are expected to be repaid within one year, Interfund transfers: l'mnslcrsln Maior Funds NOllmajor Busincs!i- Type Governmental Cupilul Capital Capital Capittil Eq. Capital Appreciation ImpraVCmCtlL'i Improvements Rcplm:cmcm Improvements ~Bulldsur19g0Dcvclur}[JIL:nt Dell. Guv. Gen. pm NUlIlfiujur Storm Clav't lmcnml ~~~~~~ Transfers out: Major fund'>: Govcmmcntal funds: GCllcml Analm COUllty CDBa ECl1llOmic Development Authorit Municipal State Aiel Street Fund ClIpitnllmprovcmcl1ts PIR $262t223 S39,143 S351,366 525,544 222,ti4-R 222,64R 275,345 29,461 304,R06 512,R53 542,R53 212,050 1l,..J.12 45,UOO 34l.,4H4 272,505 R,892 45,000 404,419 45,UOO 1 H9,9 12 465,493 8,769 474,262 59,000 45,000 212,062 $ 525,544- $5U,UOO 30,000 Business-type funds: Wnter Sewer Refuse Storm sewer Liquor 78,022 78,022 1++,912 50,000 5R,062 7,808 50,000 2,647,038 ____~ 94,500 Noumnjor govemmcnml fund" Iutcmal scrviL:c fuuJs 97,610 1,080,214 800,000 60,500 $275,345 S212,050 $272.505 S465,493 $1,123,066 S303,143 S6,310,494 $60,500 $100,000 $450,034 SI,680,214 $1,361,544 Totn.l Purpose Fund Community Development Allocnte project costs Allocate project costs Fund equipment rcplaccmentUcncral Fund data prUl.:cssing scr....;ces Labur allucutiuu Fund Capital Improvements Development ;Fund Community Development Allocate project costs Allocate project cost.:; Ln.bor allocation Fund data processing scrviees Labor allocution Prior year revenue to owning fund Fund redevelopment cosL'i Dcbt scrvice Fund redevelopment eosts Debl service Deblscrvice Debt service Fund Capital Improvements Development Allocate project costs Capital ussels placed in.service Capital assets placed in-service Labor allucation Fund t..'l}uipment replacement:Water Debt sen'icc Allucate project costs fund data processing sen;ce:-. Labor allocation Fund equipment replacement:Sewer Debl ~ervice Allocate project cosL'i Fund dala processing services Labor allocntion Labur allocation Fund data processing services Fund equipment replacement:Sewer Debt service Allocate project cosls To Amount $249,5R2 6.516 6,125 50,000 39,143 27,423 525.544 222,648 29,461 275,345 59,330 50,OUO lU,K03 7,808 530,000 920,KK9 270,OOU 765,325 50,342 460,335 30,000 2.176 20,733 20,733 78,022 25.000 74,641 1R,R51 45,000 7fl,022 25,000 5,000 40,396 45,000 7.2,456 72.456 45,000 5,ROO 332,159 8,8'l2 From Conmmruty Developmcnt Cnpitnl Improvement Capital Improvements Parks Capital Equipment Replacement General GOV'( Duta Processing Open.lting Account Gener..!1 Fund Capilallmprovements Development Community Development Capital1mprove.l11cnt CapitallmprovemenL'i PIR Fund General Fund Data Processing Operating Account Geneml Fund 21st Century Graut CapitallmprovemenL.. Development Capital Appreciation Bonds of 1990 Capital Improvemenl.. Development Capital Appreciation Donds of 1990 GO lmprovcmcnt Bonds 1999A GO Improvement/Revenue Dunds 2003A Capital Improvements Development Infr'..lstructurc Sewer Utility Operating Account Water Utility Opemtmg Account General Fund Wuter Utility Cl.Ipital Equipment Replacement Accuunt Waler Utility Debt Service Account Water Utility Constructiun Account Duta Processing Opemting Account General Fund Sewer Utility Capital E4uipment Replacement Account Sewer Utility Debt Service Account Sewer Utility Construction Account Data Processing Operating Account General Fund General fund Data Processing Opemting Account Storm Sewer Capillil Equipment Replacement Account Slonn Sewer Utility Debt Sel"\i;ce Account Storm Sewer Utility Construction Account Genernl Fund Geneml Fund Gcncml Fund Gencrnl Fund Geneml Fund Conulluniry Devclopmem Anoka County CDBU Economic Development AuUJOrily Municipal State Aid Street Fund Municipal State Aid Street Fund Cablc Television Cubit: Tdcvisioll Libmry crL~SE Parking Ramp As~cssmenls Tax lncrcl11cnt Bonds Shcme Id Redevelupment Capitallmprovement PVVS Capital Improvement PiR Fund Capitallrnprovement PIR Fund Capital Improvement PIRFund Capital Improvement PIR. Fund \Valer Utility Capital Equipment Replacement Accuunt Capital E4uipmenl Replacement-Sewer Water Utility Opcmtmg Account Water Utility Opcmting: Account \Vater Utility Opcmting: Account \Vuter Utility Opemting Account Wllter Utility Opemting Account Sewer Utility Opentting Account Sewer Utility Opemting Accuunt Sewer Utility Opemling Account Sewer Utility Operating Account Sewer Utility Opemting Account Refu<;c Utility Fund Refuse Utility Fund Refuse Utility Fund Storm Sewer Utility Opemting Account Stonn Sewer Utility Opernting Account Slorm Sewer Utility Gpemting Account 73 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 I, 2004 Liquor Liqunr Liquor Liquor Liquor \Valer Utility Construction Account \Valer Utility Construction Account Sewer Ulility ConMruclion Account Sewer Utility Conqlruclion Account Storm Sewer Utility Con:Struclion Account SlollTl Sewer Utility Construction Account Centrol Gocnge Operaling Account Central Gnrnge Operating Account Centrnl Garage Gpeenling Account Contributed Projecl<;-Recrenlion Generul Fund DARE Project Infrastructure Capital Equipment Replacement OeDem! GOy'j Data Processing Opemting Account Capitol Improvement Water Utility Opemling Account Capitol Improvement Sewer lIliIily Operating Account Capitnl Improvement Storm Sewer Utility Gremling Account Cnpilal Improvements General Gov't Buildings Centrol Guroge Capital Equipment Replacement Account Data Processing Operating Account Capital Improvements Developnrent Note 6 OPERATING LEASES A. LEASE EXPENSE 58,062 Lubur allucution 9,000 Fund DARE progmm 50,000 Fund infm"tructure replacement 50,000 Fund equipment replacemcnt:Gcnerul 45,000 Fund datn procei'5ing .ser\rices 11,412 Allo~te project CO:;l'l 72,825 Capital 0:;5el:; placed in-:;ervice 8,892 Allocate project co:;l'l 181,376 Capitol assets placed in-service 8,769 Allocate project co:;ls 118,642 Capital o...sets placed in-service 60,500 Genernl improvements: buildings -l,OOO Fund equipment replncement:Cenlrol Gamge 30,000 Fund dntn processing services 6,000 Fund Capital Improvements Development $6,3 16,494 The City has leased premises for a liquor store (Top Valu 1) under a lease agreement that expired on December 31,2004. This lease has been renewed through Febmary 29, 2008. This lease is considered for accounting purposes to be an operating lease. Lease expenditures for the year ended December 3] , 2004 amounted to $126,238. The City also leased premises for its Top Valu II liquor store under a five-year lease that originally expired Febmary 28,1998, with a five-yearrenewal option in 1998 and 2003. The City exercised the 2003 renewal option increasing minimum payments to $4,597 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 expendihlres for the year ended December 31, 2004 amounted to $78,817. The City also leased equipment for its public works activities during 2004 on a month-to-month basis with no fuhlre minimum payments required, This lease is considered for accounting purposes to be an operating lease. Lease expendihlres for the year ended December 31,2004 amounted to $12,674. Fuhlre minimum rental payments are as follows: Year 2005 2006 2007 2008 Total Top Value 1 92,928 92,928 92,928 15,488 $294,272 74 Top Value II 55,165 55,165 55,165 9,194 $174,689 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 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 31,2004, totaled $10,969. The terms of each lease are as follows: Location Lessee 2004 Adjustment Expiration Ivanhoe Place Sprint Spectrum $21,320 Greater of CPI or 5% 08/19/06 40th Ave NE T-Mobile USA 15,791 Greater of CPI or 4% 12/04/06 Total $37, III 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 for both governmental and business-type activities. General Obligation Bonds are direct obligations and are backed by the full faith and credit ofthe City. Advance Crossover Refunding On December 16, 2004, the City issued the General Obligation Tax Increment Refunding Bonds Series 2004A in anticipation of refunding the General Obligation Tax Increment Capital Appreciation Bonds of 1990 on the 1990 bonds' early redemption date of September 1,2005. The proceeds from the 2004A bonds were used to purchase U.S. government securities placed in an irrevocable tmst. Amounts in the tmst will be used for debt service on the 2004A bonds until the crossover date of September I, 2005, when the remaining amount in the tmst be used to refund the 1990 bonds. The tenDS oftbis refunding do not defease the City's debt from the 1990 bonds until September 1, 2005, and therefore both obligations are reported in the governmental activities as of December 31, 2004. 75 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 ] , 2004 General Obligation Bonds cunently outstanding are segregated between the amounts to be repaid from govemmental activities and amount to be repaid from business-type activities and are as follows: Original Issue Interest Rate Issue Date Final Maturity Balance End of Year General Obligation: Governmental activities: Tax increment bonds: Capital Appreciation Bonds of 1990 Tax Increment Refunding Bonds 1004A Improvement bonds: Improvement Bonds 1999A Improvement Bonds 1003A $2,399,721 6.90-7.15% 8/13/1990 9/l/1009 $1,179,704 $1,985,000 1.00-1.75% 11/16/1004 9/1/1009 1,985,000 860,000 3.45-4.30% 511/1999 111/1lJIO 510,000 1,331,819 1.10-4.00% 61111003 1/111018 1,163,613 Business-type activities: Revenue bonds: Utility revenue bonds 1999B Utility revenue bonds 1003A 1,935,000 1,167,171 3.45-4.30% 1.10-4.00% 5/1/1999 6/112003 2/1/2010 1/1/1018 1,185,000 1,101,377 Total general obligation bond, outstanding $7,514,704 ANNUAL DEBT SERVICE REQUIREMENTS As of December 3], 2004, 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 2005 1,449,035 2,453,625 265,668 84,930 2006 782,273 97,484 287,727 75,967 2007 792,273 80,132 297,727 66,039 2008 804,836 60,692 310,164 55,221 2009 329,836 39,054 315,164 43,664 2010 159,836 28,999 325,164 31,295 2011 94,836 24,637 90,164 23,424 2012 97,399 21,440 92,601 20,384 2013 97,399 ]8,080 92,601 ]7,189 2014 84,583 14,853 80,417 14,121 2015 84,583 11,766 80,417 11,186 2016 84,583 8,594 80,4] 7 8,170 2017 87,146 5,287 82,854 5,027 2018 89,709 1, 794 85,292 1,706 Total $5,038,327 $2,866,437 $2,486,377 $458,323 76 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 ], 2004 At December 3 I, 2004, a total of $ I ,044,647 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. 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. CHANGES IN LONG-TERM LIABILITIES Long-term liability activity for the year ended December 3], 2004, is as follows: Governmental activities: Tax Increment Bonds Capital appreciation bonds 1990 Rcfunding bonds 2004A Improvement bonds: Improvement bonds 1999A Improvement bonds 2003A Total bonds payable Compensated absences Total govemmentaJ activity long-term liabilities Business-type activities: Revcnue bonds: Utility revenue bonds 1999B Utility revenue bonds 20m A Compensated absences Total business-type activity long-tcnn liabilities BcgiIming Balance Due WiUlin One Year Additions Reductions Ending Balance $1,630,288 $ ($350,584) $1,279,704 $1,279,704 $1,985,000 1,985,000 605,000 (95,000) 510,000 95,000 1,332,828 (69,205) 1,263,623 74,331 3,568,116 1,985,000 (514,789) 5,038,327 1,449,035 604,749 447,970 (440,824) 611,895 18,296 $4,172,865 $2,432,970 (S955,613 ) $5,650,222 $1,467,331 $1,470,000 $ ($! 85,000) $1,285,000 $195,000 1,267,172 (65,795) 1,201,377 70,668 71,627 94,604 (86,717) 79,514 2,452 $2,808,799 $94,604 ($337,512) $2,565,891 $268,120 For governmental activities compensated absences are generally liquidated by the Internal Service Fund. 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 began payments of principal and interest in September 2002. At December 31,2004, accreted interest of$2,I 19,289 was included as accrued interest payable in the statement of net assets. 77 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 1 , 2004 Note 8 CONDUIT DEBT From timc 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 propelty 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, 2004, there were Revenue Bonds of this type outstanding with an estimated aggregate principal amount payable of approximately $18,355,000. Note 9 }'UND EQUITY The following funds had a fund deficit as of December 31,2004: Major Special Revenue Funds: Anoka County CDBG ($29,636) Major Capital Project Funds: Muncipal State Aid Street Fund Sheffield TlF Redevelopment (136,821) (434,473) Nonmajor Debt Service Funds: Multi-Use Redevelopment Plan (36,096) Nonmajor Capital Project Funds: TlF District #2 (2,296) ($639,322) Total fund deficits The City will finance these deficits through external or internal sources in future years. 78 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31 , 2004 At December 3 I, 2004 the City has reserved and designated portions of its v31ious fund equities through legal rcstrictions and City Council authorizations. A summary of such reservations and designations are as follows: General Fund: Rescrvcd for prcpaymcnts Designated for working capital $23,302 3,743,344 Special Revenue Funds: Reserved for prepayments Reserved for real estate held for resale Reserved for program expenditures Designated for working capital Designated for maintenance 3,610 1,418,135 814,256 12,585 125,622 Dcbt Scrvice Funds: Reserved for debt service Designated for debt service 2,683,997 1,080,743 Capital Projects Funds: Reserved for real estate held for resale Reserved for program expenditures Designated for capital improvcmcnts 325,906 27,801 12,596,486 $22,855,787 Note 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE A. PLAN DESCRIPTION All full-time and certain part-time cmployces of the City of Columbia Heights are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administcrs thc 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 Coordinatcd 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 arc established by state statute, and vest after three years of credited service. The defined retircment benefits are based on a mcmber's highest average salary for any five succcssive years of allowable service, age, and years of credit at tennination of serviee. 79 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31 , 2004 Two methods are used to compute benefits for PERF's Coordinated and Basic Plan members. The retiring mcmbcr rcccives the higher of a step-rate benefit accmal fonnula (Method 1) or a level accmal fonnula (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 accmal 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 accmal 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 accmal rate is 3.0% for each year of service. For all PEPFF and PERF members whose annuity is calculated using Method I, 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. Thcre are different types of annuities available to members upon retirement. A nonnal 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 nonnal 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. Rcfunds 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 paJiicipants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last tenninated their public service. PERA isslles a publicly available financial report that includes financial statements and required supplcmcntary infonnation for PERF and PEPFF. That rcport 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 Minncsota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislahlre. The City makes annual contributions to the pension plans equal to the amount required by state stahltes. 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 mcmbers, 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 contrachlally required contributions for each year as set by state stahlte are as follows: Year Ended December 31 PERF PEPFF 2002 2003 2004 $210,066 216,465 215,137 $185,404 179,290 182,157 80 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2004 Note 11 DEFINED BENEFIT PENSION PLAN - POLICE AND FIRE CONSOLIDATION FUND TE~VllNATEDPLAN-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 I, 1999 this plan was tenninated and all assets and liabilities were transfelTed to the Police and Fire Fund (PEPFF), a cost sharing multiple-employer plan. Upon tcnnination, a final actuarial valuation detennined 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 2003, it was decided that the entire outstanding amount of$325,675 was to be paid off. Note 12 DEFINED CONTRIBUTION PLAN A. FIRE RELIEF ASSOCIA nON, VOLUNTEER DIVISION 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 g424A.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 2004 state aid was contributed to the plan. B. COUNCIL MEMBERS Certain council members of the City of Columbia Heights are covered by the Public Employees Defined Contribution Plan (PEDCP), a multiple-employer deferred compensation plan administered by the Public Employees Retirement Association of Minnesota (PERA). The PEDCP is a tax qualified plan under Section 401 (a) of the Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal. Plan benefits depend solely on amounts contributed to the plan plus investment eamings, less administrative expenses. Minnesota Stahltes, Chapter 353D.03, specifics the employee and employer contribution rates for those qualified personnel who elect to participate. An eligible elected official who 81 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 J, 2004 decides to participate contributes 5% ofsaJary which is matched by the elected official's employer. For ambulancc service personnel, employer contributions arc detennined by the employer, and for salaried employees must be a fixed percentage of salary. Employer contributions for volunteer personnel may be a unit value for each call or peliod of alert duty. Employees who are paid for their services may elect to make member contributions in an amount not-to-exceed the employer share. Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts of the Minnesota Supplemental Investment Fund. For administering the plan, PERA receives 2% of employer contributions and f our-tenths of 1 % of the assets in each member's account annually. 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 Tmst (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 Compcnsation 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 arc detennined 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 LMClT. The City is subject to supplemental assessments if deemed necessary by the LMClT. The LMClT reinsures through commercial companies for claims in excess of various amounts. The City retains risk for the deductible portions. These deduetibles are considered immaterial to the financial statements. The City continues to carry eOlllinercial 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. 82 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2004 C. FEDERAL AND STATE FUNDS Amounts received or receivable from federal and state agencies are subject to agency audit and adjustment. Any disalIowed claims, including amounts already colIected, may constitute a liability of the applicable funds. The amount, if any, offunds 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 havc a material effect on thc financial statcmcnts. E. CONTRACTUAL COMMITMENTS The City has entered into several contractual commitments that are in process at year end. At December 31,2004, the City's committed obligation for such projects was approximately $2,518,000. In addition to thcsc contractual commitments, the City has a contract with the City of Minncapolis for the purchase ofthc City's water supply. This water supply flows through one mastcr meter locatcd at the City of Minneapolis reservoir. During the years 2001 through 2004, 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 overall accuracy, a result of which could be that the City was billcd for lcss water than was actually consumed which could result in an outstanding liability to thc City of Minneapolis. At the prescnt time thcre is not adequatc infornlation to dctcnnine the full extent of any potential contingent liability. Note 14 SUBSEQUENT EVENTS In 2005, the City was award cd grants of approximately $872,000 from thc Minncsota Dcpartmcnt of Employmcnt and Economic Development (DEED) and other sources as a continuation of a multi-year project for the environmental cleanup of properties located within the City. 83 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 I , 2004 Note 15 PRIOR PERIOD ADJUSTMENT The following amounts were misstated in the statement of net assets and the statement of activities for the governmental activities at December 31,2003. As a result of these adjustments, net assets and change in net assets were restated as follows: Total net assets - December 31, 2003, as previously reported $48,804,104 Prior pcriod adjustment- governmental activities: Capital assets: Land Buildings Accumulated depreciation of buildings Constmction in progress Unearned revenue Accrued interest - CAB's of 1990 Net prior period adjustment 177,375 (1,797,935) 2,368,003 (153,23 I) (224,901) (2,305,632) (1,936,321 ) Total net assets - January1, 2004, as restated $46,867,783 Change in net assets - 2003, as previously reported $429,231 Prior period adjustment - governmental activities: Interest on long-tenn debt Capital contribution revenue 233,756 (224,901) Change in net assets - 2003, as restated $438,086 84 CITY OF COLUMBIA HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 I, 2004 Note 16 RECENTLY ISSUED ACCOUNTING STANDARDS The Governmental Accounting Standards Boards (GASB) recently approved the following statements which were not implemented for these financial statements: Statement No. 40 Deposit and investment Risk Disclosures-an amendment ofGASB Statement No.3 The provisions of this Statement are effective for financial statements for periods beginning after June 15,2004. Statement No. 42 Accounting and Financial Reportingjor impairment of Cap ital Assets andjor insurance Recoveries. The provisions of this Statement are effective for fiscal periods beginning aftcr Dccember 15,2004. Statement No. 43 Financial Reportingjor Post employment Benejit Plans Other Than Pension Plans. The requirements of this Statement for OPEB plan reporting are effective one year prior to the effective date of the related Statement # 45 for the employer (single-employer plan) or for the largest participating employer in the plan (multiple-employer plan). Statement No. 44 Economic Condition Reporting: The Statistical Section - an amendment to NCGA Statement 1. The provisions of this Statement arc effective for statistical sections prepared for periods beginning after June 15, 2005. Statement No. 45 Accounting and Financial Reporting by Employers jor Post employment Benf';jits Other Than Pension. Implementation is required in three phases based on a government's total annual revenues in the first fiscal year ending after June 15, 1999. This Statement is effective for periods beginning after December 15, 2006, for phase 1 governments (those with total annual revenues of$100 million or more); after December 15,2007, for phase 2 governments (those with total annual revenues of $10 million or more but less than $100 million); and after December 15, 2008, for phase 3 governments (those with total annual revenues ofless than $10 million). Earlier implementation is encouraged. The effect these standards may have on future financial statements is not detenninable at this time. 85 - This page intentionally left blank - 86 REQUIRED SUPPLEMENTARY INFORMATION 87 CITY OF COLUMBIA HEIGHTS, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARYCONWARISONSCHEDULE -GENERALFUND For The Year Ended December 31, 2004 With Comparative Totals For The Year Ended December 31, 2003 Statement 10 Page 1 of 2 2004 Variance with Budgeted Amounts Final Budget 2003 Actual Positive Actual Oliginal Final Amounts (Negative) Amounts Revenues: Taxes $4,928,710 $4,341,391 $4,336,802 ($4,589) $3,646,155 Licenses and permits 323,100 323,100 506,319 183,219 281,480 Intergovernmental: Market value homestead credit 587,319 587,319 607,324 All othcr 1,740,721 1,838,400 1,930,028 91,628 2,257,023 Charges for services 497,250 497,250 444,856 (52,394) 407,914 Fines and forfeitures 85,000 85,000 140,282 55,282 140,378 Investment income: Interest and dividends 164,321 164,321 178,937 14,616 135,976 Change in fair value (7,756) (7,756) (84,760) Other revenues: Miscellaneous 4,400 4,400 29,399 24,999 6,265 Proceeds from sale of assets 12,000 12,000 1,626 (10,374) 27,652 Total revenues 7,755,502 7,853,181 8,147,812 294,631 7,425,407 Expenditures: General government: Council 201,122 201,122 166,990 34,132 198,725 Manager 392,787 392,787 397,741 (4,954) 359,692 Legal 187,690 187,690 176,417 11,273 168,003 Finance and elections 652,777 652,777 603,493 49,284 611,744 Assessing 101,000 101,000 90,400 10,600 92,113 General government buildings 151,393 151,393 120,341 31,052 102,697 Total general government 1,686,769 1,686,769 1,555,382 131,387 1,532,974 Public safety: Police/animal/civil defense 2,580,347 2,601,994 2,443,256 158,738 2,467,085 Fire 878,907 976,586 1,018,836 ( 42,250) 1,024,854 Total public safety 3,459,254 3,578,580 3,462,092 116,488 3,491,939 Public works: Engineering 307,483 307,483 305,239 2,244 226,385 Maintenance 847,958 847,958 822,014 25,944 755,067 Sanitation 110,314 110,314 122,451 (12,137) 109,243 Total public works ] ,265,755 ] ,265,755 ] ,249,704 16,051 1,090,695 Other departments: Parks and recreation ],382,]14 1,382,1 ]4 1 ,266,844 115,270 1,203,211 Contingencies 100,000 100,000 2,180 97,820 4,883 Total other departments 1,482,114 1,482,114 1,269,024 213,090 1,208,094 Total expenditures 7,893,892 8,013,218 7,536,202 477,016 7,323,702 Revenues over (under) expenditures (138,390) (160,037) 611,610 771,647 101,705 88 CITY OF COLUMBIA HEIGHTS, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND For The Year Ended December 31, 2004 With Comparative Totals For The Year Ended December 31,2003 Statement 10 Page 2 of2 2004 Original Final Actual Amounts Variance with Final Budget Positive (Negativc) 2003 Achlal Amounts Budgeted Amounts Other financing sources (uses): Transfers in Transfcrs out Total other financing sources (uses) $477,116 (338,725) $456,634 $456,634 $ $480,052 (338,725) (351,366) (12,641) (674,131) 117,909 105,268 (12,641) (194,079) ($42,128) 716,878 $759,006 (92,374) 3,423,232 3,515,606 $4,140,110 $3,423,232 138,391 Net change in fund balance $1 Fund balance - beginning Fund balance - cnding 89 CITY OF COLUMBIA HEIGHTS, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - ANOKA COUNTY CDBG For The Year Ended December 31,2004 With Comparative Totals For The Year Ended December 31,2003 Statement 11 2004 Variance with Budgeted Amounts Final Budget- 2003 Actual Positive Aehml Original Final Amounts (Negative) Amounts Revenues: Intergovernmental $ $ $525,544 $525,544 $50,000 Expendihlres: Other services and charges 1,016 1,016 567 449 Loans and grants 3,752 Total expendihlres 1,016 1,016 567 449 3,752 Revenues over (under) expendihlres (1,016) (1,016) 524,977 525,993 46,248 Other financing sources (uses): Transfers out (525,544) 525,544 (50,000) Net change in fund balance ($1,016) ($1,016) (567) $1,051,537 (3,752) Fund balance (deficit) - beginning (29,069) (25,317) Fund balance (deficit) - ending ($29,636) ($29,069) 90 CITY OF COLUMBIA HEIGHTS, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION Statement 12 BUDGETARY COMPARISON SCHEDULE - ECONOMIC DEVELOPMENT AUTHORlTYADMINISTRATION For The Year Ended December 31,2004 With Comparative Totals For The Year Ended December 31,2003 2004 Variance with Budgeted Amounts Final Budget- 2003 Actual Positive Achlal Original Final Amounts (Negative) Amounts Revenues: Taxes $222,648 $222,648 $197,418 ($25,230) $121,895 Intergovernmental 12,889 12,889 Investment income Interest and dividends 482 482 2,999 Change in fair value (21) (21) (1,437) Total revenues 222,648 222,648 210,768 (11,880) 123,457 Expendihlres: Personal services 77,659 Supplies 1,030 Other services and charges 750 (750) 36,873 Total expenditures 0 0 750 (750) 115,562 Revenues over (under) expendihlres 222,648 222,648 210,018 (12,630) 7,895 Other financing sources (uses): Transfers out (222,648) (222,648) (222,648) (11,454) Net changc in fund balance $0 $0 (12,630) ($12,630) (3,559) Fund balance - beginning 90,679 94,238 Fund balance - ending $78,049 $90,679 91 CITY OF COLUMBIA HEIGHTS, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE-NOTE TO RSI December 31, 2004 Note A LEGAL COMPLIANCE - BUDGETS The City of Columbia Hcights' budgct 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 expendihlres and other financing uses exceeded budgeted expendihlres and other financing uses (appropriations) for 2004: Final Over Budget Achlal Budget Major fund: Anoka County CDBG $1,016 $526,111 $525,095 Economic Development Authority Administration 222,648 223,398 750 For 2004, expendihlres and other financing uses in the Anoka County CDBG Fund are over budget by $525,095 due to grant funding transferred out from the Anoka County CDBG Fund to the Capital Improvements Development Fund for certain redevelopment projects. Neither the grant revenue nor the transfers-out were included in the 2004 budget, as the grants are approved by Anoka County on a competitive project-by-project basis and cannot be reasonably estimated at the time the budget is adopted. For 2004, expendihlres and other financing uses in the Economic Development Authority Administration Fund are over budget by $750 due to administrative costs of a loan program that ended in 2004. These costs were not were included in the 2004 budget. 92 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 93 - This page intentionally left blank - 94 NONMAJOR GOVERNMENTAL FUNDS 95 - This page intentionally left blank - 96 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 generallong-tenn 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). 97 CITY OF COLUMBIA HEIGHTS, MINNESOTA COMBINING BALANCE SHEET NONNUUORGOVERNMENTALFUNDS December 31, 2004 Statement 13 Total Nonmajor Special Debt Capital Governmental Assets Revenue Service Project Funds Cash and investments $1,652,805 $1,007,339 $2,785,900 $5,446,044 Cash and investments with fiscal agent 32,211 32,211 Receivables: Accounts 37,098 50,250 87,348 Taxes 20,319 17 20,336 Interest 9,785 4,301 31,374 45,460 Loans 3,620 3,620 Due from other governmental units 21,428 21,428 Interfund receivable 46,207 32,825 713,930 792,962 Prepayments 3,610 3,610 Real estate held for resale 2],] 13 21,] 13 Total assets $1,795,666 $1,096,995 $3,581,471 $6,474,132 Liabilities and Fund Balance Liabilities: Accounts payable $65,651 $5,571 $93 $71,315 Accrued salaries and withholdings payable 28,514 28,514 Contracts payable - retained percentage 1,000 1,000 Due to other governmental units 45,389 45,389 Interfund payable 71,837 30,529 14,211 1] 6,577 Deferred revenue 28,053 16,248 44,301 Deposits 21,083 21,083 Total liabilities 260,527 52,348 15,304 328,179 Fund balance: Reserved: Reserved for prepayments 3,610 3,610 Rcservcd for rcal cstate held for resale 21,113 21,113 Reserved for program expenditures 814,256 814,256 Unreserved: Designated for working capital 12,585 12,585 Designated for maintenance l25,622 125,622 Designated for debt service 1,080,743 1,080,743 Designated for capital improvements 3,223,770 3,223,770 Undesignated 557,953 (36,096) 342,397 864,254 Total fund balance 1,535,139 1,044,647 3,566,167 6,145,953 Total liabilities and fund balance $1,795,666 $1,096,995 $3,581,471 $6,474,132 98 CITY OJ<' COLUMBIA HEIGHTS, MINNESOTA COMBiNING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONNUUOR GOVERNMENTAL FUNDS For The Year Ended December 31, 2004 Statement 14 Total Nonmajor Special Debt Capital Governmental Revenue Service Proj ect Funds Revenues: Taxes $433,585 $ - $ - $433.585 Tax increment collections 721 ,494 201,746 923,240 Intergovernnlental 462,286 94,109 4,266 560,661 Charges for services 692,573 692,573 Investment income: Interest and dividends 54,081 20,426 141,377 215,884 Change in fair value (2,343) (885) (6,] 29) (9,357) Other revenues 60,948 55,489 116,437 Total revenues 1,701,130 835,144 396,749 2,933,023 Expendihlres: Current: General government 18,671 18,671 Public safety 38,576 112,821 151,397 Culhlrc and recreation 652,963 7,293 660,256 Community development 965,291 7,383 972,674 Capital outlay: Public safety 210,321 210,321 Public works 87,597 87,597 Cu]hlre and recreation 8,366 8,366 Community developmcnt 102,771 102,771 Debt service: Principal retirernent 1':;/1 '1r1<: 164,205 JV.,kV.... Interest and fiscal charges 68,058 68,058 Issuance costs 544 544 Miscellaneous 14,156 14,156 Developer incentives 10,957 56,909 67,866 Contrach131 services 2,685 2,685 Total expenditures 1,786,638 257,920 485,009 2,529,567 Revenues over (under) expendihlres (85,508) 577,224 (88,260) 403,456 Other financing sources (uses): Bond procecds 36,077 36,077 Bond discount (108) (108) Transfers in 489,038 510,677 123,351 1,123,066 Transfers out (161,424) (920,889) (1,565,325) (2,647,638) Total other tinancing sources (uses) 327,6]4 (374,243) (1,44] ,974) (] ,488,603) Net change in fund balance 242,106 202,981 (1,530,234) (1,085,147) Fund balancc - beginning 1,293,033 841,666 5,096,401 7,231,100 Fund balance - ending $1,535,139 $1,044,647 $3,566,167 $6,145,953 99 - This page intentionally left blank - 100 NONMAJOR SPECIAL REVENUE FUNDS The City of Columbia Heights had the following Special Revenue Funds during the year: COlmnunity Development Fund - established to account for revenues and expenditures associated with planning, building inspections, and cOlmnunity 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. D.A.R.E. Program Fund - established to account for revenues and expenditures of DARE (Drug Awareness) Program. Special Proiects Fund - established to monitor revenues from special projects and related expenditures. C.RA.S.E. Fund - established to account for revenues and expenditures associated with a State grant received for community participation in youth enrichment programs. T\\Tent' -First Centu.r Grant ~ established to aCCOllnt for revenues and expenditures associated with a grant received through the school district. 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. Police Grants - Other - established to account for police related grants. 101 Recreation Contributed Proiects Fund - established to monitor contributions for recreational activities and related expenditures. Contributed Proiects Fund - established to monitor contributions and related expenditures. Flex Benefit - established to account for contributions by employees and related expenditures for flexible benefits. Police/Fire Contingency Fund - established to account for future years expenditures related to police and fire. 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. Business Revolving Loan Fund - established to account for revenues and expenditures associated with business development through a business revolving loan fund. 102 CITY OJ:<' COLUMBIA HEIGHTS, MINNESOTA SUBCOMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS December 31,2004 Statement 15 Page 1 of2 COlmnunity Cable DAR.E. Special Development Television Library Program Projects Fund 201 Fund 225 Fund 240 Fund 270 Fund 226 Assets Cash and investments $123,825 $ - $44,606 $27,475 $61,164 Receivables: Accounts 34,618 Interest 820 264 Loans Due from other governmental units lnterfund receivable 4,762 Prepayments 350 3,260 Real estate held for resale Total assets $129,757 $34,618 $47,866 $27,475 $61,428 Liabilities and Fund Balance Liabilities: Accounts payable $5,132 $ - $7,706 $290 $ - Accrued salaries and withholdings payable 11,975 15,143 Due to other governmental units 1,296 9,172 Interfund payable 22,322 Deferred revenue 24;433 Deposits Total liabilities 18,403 22,322 32,021 290 24,433 Fund balancc: Reserved for prepayments 350 3,260 Reserved for real estate held for resale Rcscrved for program expenditures Unreserved: Designated for working capital 12,585 Designated for maintenance Undesignated 111 ,004 12,296 27,185 36,995 Total fund balance 111,354 12,296 15,845 27,185 36,995 Total liabilities and fund balance $129,757 $34,618 $47,866 $27,475 $61,428 103 CITY O.F COLUMBIA HEIGHTS, MINNESOTA SUBCOMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS December 31, 2004 Twenty-First Local Law Juvenile Century Confiscated Enforcement Justice C.H.A.S.E. Grant Property Block Grant Grant Fund 250 Fund 261 Fund 265 Fund 276 Fund 278 Assets Cash and investments $53,076 $12,317 $14,337 $3,365 $ - Recei vab les: Accounts Interest 503 99 Loans Due from other governmental units 6,551 Interfund receivable Prepayments Real estate held for resale Total assets $53,579 $18,868 $14,337 $3,464 $0 Liabilities and Fund Balance Liabilities: Accounts payable $ - $3,124 $ - $ - $ - Accmed salaries and withholdings payable 1,396 Due to other governmental units Interfund payable Deferred revenue Deposits Total liabilities 0 4,520 0 0 0 Fund balance: Reserved for prepayments Reserved for real estate held for resale Reserved for program cxpendihlres Unreserved: Designated for working capital Designated for maintenance Undesignated 53,579 14,348 14,337 3,464 Total fund balance 53,579 14,348 14,337 3,464 0 Total liabilities and fund balance $53,579 $18,868 $14,337 $3,464 $0 104 Statement 15 Page 2 of2 - Total Police Recreation Housing and Economic Nonmajor Grants - Contributed Contributed Flex Police/Fire Redevelopment Development Special Other Projects Projects Benefit Contingency Authority Authority Revenue Fund 272 Fund 881 Fund 883 Fund 887 Fund 888 Funds Fund 299 Funds $ - $]24,]30 $23,622 $46,953 $ - $811 ,7] 8 $306,217 $] ,652,805 2,480 37,098 344 4,772 2,983 9,785 3,620 3,620 1,043 ] 3,834 21,428 1,759 39,686 46,207 3,6]0 21,] 13 2],] 13 $1,043 $124,130 $23,622 $47,297 $0 $834,563 $373,619 $1,795,666 $ - $ - $ - $6,054 $ - $43,345 $ - $65,65 ] 28,514 34,92] 45,389 1,043 48,472 7],837 3,620 28,053 2],083 21,083 1,043 0 0 6,054 0 147,821 3,620 260,527 3,610 21,113 21,] 13 507,830 306,426 814,256 12,585 125,622 125,622 ]24,130 23,622 41,243 53,290 42,460 557,953 0 124,130 23,622 41,243 0 686,742 369,999 1,535,139 $1,043 $124,130 $23,622 $47,297 $0 $834,563 $373,619 $1,795,666 105 - This page intentionally left blank - 106 CITY 01<' COLUMBIA HEIGHTS, MINNESOTA SUBCOMBlNING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31, 2004 Statement 16 Page 1 of2 Community Development Cable DAR.E. Special Fund Television Li brary Program Projects Fund 20 I Fund 225 Fund 240 Fund 270 Fund 226 Revcnucs: Taxes $ - $ - $433,585 $ - $ - Intergovernmental 150,062 Fees/program revenues 135,347 18,684 25,619 Rents Investment income: Interest and dividends 3,894 7,612 1,254 Change in fair value (169) (330) (54) Other reVCllues: Miscellaneous Contributions 50 Total revenues 3,725 135,347 609,613 50 26,819 Expcnditures: Personal services 279,360 1,842 424,814 Supplies 8,325 351 90,322 3,203 Other services and charges 132,037 6,842 71,936 1,631 Capital outlay 8,366 Total expenditures 419,722 9,035 595,438 4,834 0 Revenues over (under) expenditures (4 15,997) 126,312 14,175 (4,784) 26,819 Other financing sources (uses): Transfers in 472,230 9,000 Transfers out (27,423) (109,330) (10,863) Total other financing sources (uses) 444,807 (109,330) (10,863) 9,000 0 Net increase (decrease) fund balance 28,810 16,982 3,312 4,216 26,819 Fund balance (deficit) - beginning 82,544 (4,686) 12,533 22,969 10,176 Fund balance (deficit) - ending $l11,354 $12,296 $15,845 $27,185 $36,995 107 CITY O-F COLUMBIA HEIGHTS, MINNESOTA SUBCOMBlNING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31,2004 Twenty-First Local Law Juvenile Century Confiscated Enforcement Justice C.H.A.S.E. Grant Property Block Grant Grant Fund 250 Fund 261 Fund 265 Fund 276 Fund 278 Revenues: Taxes $ - $ - $ - $ - $ - Intergovernmental 57,432 ]2,6]6 ]0,068 Fees/program revenues 12 10,100 Rents Investment income: Interest and dividends 2,390 471 Change in fair value ( 103) (20) Other revenues: Miscellaneous 6,875 Contributions Total revenues 2,299 67,532 6,875 13,067 10,068 Expendihlres: Personal services 35,546 10,793 Supplies 4,010 6,455 13,729 Other services and charges 18,500 1,182 540 Capital outlay Total expendihlres 0 58,056 7,637 14,269 10,793 Revenues over (under) expendihlres 2,299 9,476 (762) (1,202) (725) Other financing sources (uses): Transfers in 7,808 Transfers out (7,808) Total other financing sources (uses) (7,808) 7,808 0 0 0 Net change in fund balance (5,509) 17,284 (762) (1,202) (725) Fund balance (deficit) - beginning 59,088 (2,936) 15,099 4,666 725 Fund balance (deficit) - ending $53,579 $14,348 $]4,337 $3,464 $0 108 Statement 16 Page 2 of2 Total Police Recreation Housing and Economic Nonmajor Grants - Contributed Contributcd Flex Police/Fire Redevelopmcnt Devclopment Special Other Projects Projects Benefit Contingency Authority Authority Revenue Fund 272 Fund 881 Fund 883 Fund 887 Fund 888 Funds Fund 299 Funds $ - $ - $ - $ - $ - $ - $ - $433,585 ],043 231,065 462,286 3,192 192,954 499,6]9 499,619 1,634 22,660 14,166 54,081 (71) (982) (614) (2,343) 8,771 4,067 19,713 39,247 ],938 4],235 1,043 39,247 1,938 10,334 0 756,429 16,744 1,701,130 30,899 783,254 980 7,816 1,805 34,651 171,647 63 19 1,085 6,746 480,019 720,600 102,771 111,137 1,043 7,835 2,890 6,746 0 648,340 0 1,786,638 0 31,412 (952) 3,588 0 108,089 16,744 (85,508) 489,038 (6,000) (161,424) {I {C. {I{I{I \ {I {I {I {I {I 327,614 v \ u,vvv J v v v v v 0 25,412 (952) 3,588 0 108,089 16,744 242,106 98,718 24,574 37,655 578,653 353,255 1,293,033 $0 $124,130 $23,622 $41,243 $0 $686,742 $369,999 $1,535,139 109 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - COMMUNITY DEVELOPMENT FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2004 With Comparative Totals For thc Year Endcd December 31, 2003 Statement 17 2004 Variance with Budgctcd Amounts Final Budget- 2003 Actual Positive Actual Original Final Amounts (Negative) Amounts Rcvcnues: Investment income: Interest and dividends $ - $ - $3,894 $3,894 $ I ,965 Change in fair value (169) (169) (941) Other 11 Total revenues 0 0 3,725 3,725 1,035 Expenditures: Personal services 294,045 294,045 279,360 14,685 196,772 Supplies 15,141 15,141 8,325 6,816 6,291 Other services and charges 135,146 135,146 132,037 3,109 74,097 Capital outlay 475 475 475 Total expendihlres 444,807 444,807 419,722 25,085 277,160 Revenues over (under) expendihlres (444,807) ( 444,807) (415,997) 28,810 (276,125) Other financing sources (uses): Transfers in 472,230 472,230 472,230 361,648 Transfers out (27,423) (27,423) (27,423) (16,226) Total other financing sources (uses) 444,807 444,807 444,807 0 345,422 Net change in fund balance $0 $0 28,810 $28,810 69,297 Fund balance - beginning 82,544 13,247 Fund balance - ending $1 I 1,354 $82,544 110 CITY o.F 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, 2004 With Comparative Actual Amounts For the Y car Endcd Dcccmber 31, 2003 Statement 18 2004 Variance with Budgeted Amounts Final Budget- 2003 Actual Positive Actual Original Final Amounts (Negative) Amounts Revenucs: Franchise fees $133,000 $133,000 $135,347 $2,347 $135,659 Investment income: Interest and dividcnds 1,000 1,000 (1,000) Other revenues: Miscellaneous 20 Total revenues 134,000 134,000 135,347 1,347 135,679 Expenditures: Personal services 6,383 6,383 1,842 4,541 2,303 Supplies ] 4, ] 60 14,160 35] 13,809 15,133 Other services and charges 97,554 97,554 6,842 90,712 16,038 Capital outlay 6,000 6,000 6,000 Total expenditllfcs 124,097 124,097 9,035 115,062 33,474 Rcvenues over expcndihlres 9,903 9,903 126,312 116,409 102,205 Other financing .sources (uses): Transfers out (109,330) (109,330) (109,330) (109,330) Net change in fund balance ($99,427) ($99,427) 16,982 $116,409 (7,125) Fund balance (deficit) - beginning ( 4,686) 2,439 Fund balance - ending $12.296 ($4,686) 111 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, 2004 With Comparative Actual Amounts For the Year Ended December 31, 2003 Statement 19 2004 Variance with Budgeted Amounts Final Budget- 2003 Actual Positive Actual Original Final Amounts (Negative) Amounts Revenues: Taxes $433,585 $433,585 $433,585 $ - $433,585 Intergovernmental 150,062 150,062 150,062 141,850 Charges for services 22,100 22,100 18,684 (3,416) 18,781 Investment income: Interest and dividends 4,500 4,500 7,612 3,112 8,096 Change in fair value 1,400 1,400 (330) (1,730) (3,879) Other revenues: Miscellaneous 250 250 (250) Total revenues 611,897 611,897 609,613 (2,284) 598,433 Expendihlres: Personal services 434,073 434,073 424,814 9,259 436,410 Supplies 91,625 91,625 90,322 1,303 102,093 Other services and charges 81,710 81,710 71,936 9,774 78,212 Capital outlay 10,000 10,000 8,366 1,634 5,985 Total expendihlres 617,408 617,408 595,438 21,970 622,700 Revenues over (under) expendihlres (5,511) (5,511) 14,175 19,686 (24,267) Other financing sources (uses): Transfers out (13,863) (13,863) (10,863) 3,000 (14,071) Net change in fund balance ($19,374) ($19,374) 3,312 $22,686 (38,338) Fund balance - beginning 12,533 50,871 Fund balance - ending $15,845 $12,533 112 CITY o.F COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - DAR.E. PROGRAM SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2004 With Comparative Actual Amounts For the Year Ended December 31,2003 Statement 20 2004 Variance with Budgeted Amounts Final Budget- 2003 Actual Positive Actual Original Final Amounts (Negative) Amounts Revenues: Contributions $ $ $50 $50 $550 Expenditures: Supplies 3,200 3,200 3,203 (3) 5,151 Other services and charges 2,175 2,175 1,631 544 2,003 Total expenditures 5,375 5,375 4,834 541 7,154 Revenues over (under) expenditures (5,375) (5,375) (4,784) 591 (6,604) Other financing sources (uses): Transfers in 9,000 9,000 9,000 9,000 Net change in fund balance $3,625 $3,625 4,216 $591 2,396 Fund balance - beginning 22,969 20,573 Fund balance - ending $27,185 $22,969 113 CITY OJ<' COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - SPECIAL PROJECTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 2004 With Comparative Amounts For the Year Ended December 31, 2003 Statement 21 2004 2003 Revenues: Intergovemmental $ - $25,000 Fees/program revenue 25,619 40,077 Investment income: Interest and dividends 1,254 348 Change in fair value (54) ( 167) Total revenues 26,819 65,258 Expenditures: Other services and charges 36,963 Capital outlay 22,836 Total expenditures 0 59,799 Revenues over expenditures 26,819 5,459 Fund balance - beginning 10,176 4,717 Fund balance - ending $36,995 $]0,176 114 CITY o.F COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - C .H .A .S .E . SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE F or The Year Ended December 31, 2004 With Comparative Amounts For the Year Ended December 31, 2003 Statement 22 2004 2003 Revenues: Intergovernmental: State grant $ - $6,319 Fees/program revenue 12 8,492 Investment income: Interest and dividends 2,390 2,124 Change in fair value (103) (1,018) Total revenues 2,299 15,917 Expenditures: Personal services 2,431 Supplies 131 Other services and charges 3,754 Total expenditures 0 6,316 Revenues over expenditures 2,299 9,601 Other financing sources (uses): Transfers out (7,808) Net change in fund balance (5,509) 9,601 Fund balance - beginning 59,088 49,487 Fund balance - ending $53,579 $59,088 115 CITY O.F COLUMBIA HEIGHTS, MINNESOTA SPEClAL REVENUE FUND - TWENTY-FIRST CENTURY GRANT SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31,2004 With Comparative Amounts For the Year Ended Dcccmber 31,2003 Statement 23 2004 2003 Revenues: Intergovcrnmcntal: Federal grant $57,432 $35,174 Fees/program revenues 10,100 Total revenues 67,532 35,174 Expendihlres: Personal services 35,546 23,955 Supplies 4,010 1,730 Other services and charges 18,500 12,425 Total expenditures 58,056 38,110 Revenues over (under) expenditures 9,476 (2,936) Other financing sources (uses): Transfers in 7,808 Nct change in fund balance 17 ,2 84 (2,936) Fund balance (deficit) - beginning (2,936) Fund balance (deficit) - ending $14,348 ($2,936) 116 CITY O}1' COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - CONFISCATED PROPERTY SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 3], 2004 With Comparative Amounts For the Year Ended December 31, 2003 Statement 24 2004 2003 Revenues: Other revenue: Confiscated propeliy $6,875 $4,430 Expenditures: Supplies 6,455 1,126 Other services and charges ],]82 ],326 Total expenditures 7,637 2,452 Revenues over (under) expenditures (762) 1,978 Fund balance - beginning 15,099 13,12] Fund balance - ending $14,337 $15,099 117 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - LOCAL LAW ENFORCEMENT BLOCK GRANT SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31,2004 With Comparative Amounts For the Year Ended December 31, 2003 Statement 25 2004 2003 Revenues: 1ntergovermnental Federal grant $12,616 $17,048 Investment income: Interest and dividends 471 490 Change in fair value (20) (235) Total revenues 13,067 17,303 Expenditures: Personal services 1,243 Supplies 13,729 3,666 Other services and charges 540 15,641 Total expenditures 14,269 20,550 Revenues over (under) expenditures (1,202) (3,247) Other financing sources (uses): Transfers in 1,402 Net change in fund balance (1,202) (1,845) Fund balance - beginning 4,666 6,511 Fund balance - ending $3,464 $4,666 118 CITY OJ<' COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - COPS MORE 96 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE F or The Year Ended December 31, 2004 With Comparative Amounts For the Year Ended December 31, 2003 Statement 26 2004 Revcnucs $ Expenditures Revenues over expenditures Other financing sourccs (uses): Transfers out Net change in fund balance Fund balance - beginning Fund balance - ending $0 119 2003 $ o o (314) o (314) 314 $0 CITY o.F COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - JUVENILE JUSTICE GRANT SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31,2004 With Comparative Amounts For the Year Ended December 31,2003 Statement 27 2004 2003 Revenues: Intergovernmental Federal grant $10,068 $6,436 Expendi tures: Personal services 10,793 5,805 Supplies 213 Other services and charges 1,311 Total expenditures 10,793 7,329 Revenues over (under) expenditures (725) (893) Other financing sources (uses): Transfers in 655 Net change in fund balance (725) (238) Fund balance - beginning 725 963 Fund balance - ending $0 $725 120 CITY o.F COLUMBIA HEIGHTS, MlNNESOTA SPECIAL REVENUE FUND - POLlCE GRANTS-OTHER SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31,2004 With Comparative Amounts For the Year Ended December 31,2003 Statement 28 2004 2003 Revenues: Intergovernmental Federal grant $1,043 $ - Expendihlres: Supplies 980 Other services and charges 63 Total expcndihlres 1,043 0 Revenues over expendihlres 0 0 Fund balance - beginning Fund balance - ending $0 $0 121 CITY o.F COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - RECREATION CONTRiBUTED PROJECTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 2004 With Comparative Amounts For the Year Ended December 31,2003 Statement 29 2004 2003 Revenues: Contributions $39,247 $29,568 Expenditures: Supplies 7,816 Other services and charges 19 1,775 Total expenditures 7,835 1,775 Revenues over expenditures 31,412 27,793 Other financing sources (uses): Transfers out (6,000) Net change in fund balance 25,412 27,793 Fund balance - beginning 98,718 70,925 Fund balance - ending $124,130 $98,718 122 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - CONTRlBUTED PROJECTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 2004 With Comparative Amounts For the Year Ended December 31, 2003 Statement 30 2004 2003 Revenues: Contributions $1,938 $38,770 Expenditures: Supplies 1,805 20,182 Other services and charges 1,085 1,063 Capital outlay 21,291 Total expenditures 2,890 42,536 Revenues over (under) expenditures (952) (3,766) Fund balance - beginning 24,574 28,340 Fund balance - ending $23,622 $24,574 123 CITY OI<' COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - FLEX BENEFIT FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 2004 With Comparative Amounts For the Year Ended December 31, 2003 Statement 31 2004 2003 Revenues: Investment Income: Interest and dividends $1,634 $1,662 Change in fair value (71) (796) Other revenue: Miscellaneous 8,771 59,740 Total revenues 10,334 60,606 Expenditures: Other services and charges 6,746 54,693 Revenues over expenditures 3,588 5,913 Fund balance - beginning 37,655 31,742 Fund balance - ending $41,243 $37,655 124 CITY OJ:;' COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - POLlCE/FiRE CONTINGENCY SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 2004 With Comparative Amounts For the Year Ended December 31, 2003 Statement 32 2004 Revenues $ Expendihlres: Other services and charges Revenues over (under) expendihlres Other financing sources (uses): Transfers in Net change in fund balance Fund balance - beginning Fund balance - ending $0 125 2003 $ 56,706 o (56,706) 56,706 o o $0 CITY OI<' COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUNDS - HOUSING AND REDEVELOPMENT AUTHORITY (COMPONENT UNIT) COMBINING BALANCE SHEET December 31, 2004 Statement 33 Parkview Parkview Total Villa Villa Rental Housing and North South Housing Redevelopment Fund 203 Fund 213 Fund 235 Authority Assets Cash and investments $590,467 $168,377 $52,874 $811,718 Receivables: Accounts 1,887 593 2,480 Interest 3,498 858 416 4,772 Due from other governmental units 13,834 13,834 Interfund receivable 1,759 1,759 Total assets $609,686 $171,587 $53,290 $834,563 Liabilities and Fund Balance Liabilities: Accounts payable $35,767 $7,578 $ - $43,345 Due to other governmental units 19,054 15,867 34,921 lnterfund payable 33,705 14,767 48,472 Deposits 13,330 7,753 21,083 Total liabilities 101,856 45,965 0 147,821 Fund balance: Reserved for program expenditures 507,830 507,830 Unreserved: Designated for maintenance 125,622 125,622 Undesignated 53,290 53,290 Total fund balance 507,830 125,622 53,290 686,742 Total liabilities and fund balance $609,686 $171,587 $53,290 $834,563 126 CITY o.F COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUNDS - HOUSING AND REDEVELOPMENT AUTHORITY (COMPONENT UNIT) COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 2004 Statement 34 Parkvicw Parkview Total Villa Villa Rental Housing and North South Housing Redevelopment Fund 203 Fund 213 Fund 235 Authority Revenues: Intergovernmental $231,065 $ - $ - $231,065 Rents 291,657 207,562 400 499,619 Investment income: Interest and dividends 16,607 4,074 1,979 22,660 Change in fair value (7]9) ( 177) (86) (982) Other revenues: Miscellaneous 850 3,038 179 4,067 Total revenues 539,460 2]4,497 2,472 756,429 Expenditures: Personal services ]7,064 13,835 30,899 Supplies 27,077 7,574 34,651 Other services and charges 297,643 179,770 2,606 480,019 Capital outlay 102,771 102,771 Total expenditures 444,555 201,179 2,606 648,340 Net change in fund balance 94,905 13,318 ( 134) 108,089 Fund balance - beginning 412,925 112,304 53,424 578,653 Fund balance - ending $507,830 $]25,622 $53,290 $686,742 127 CITY 01<' COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - HOUSING & REDEVELOPMENT AUTHORlTY- PARl<VlEW VILLA NORTH - SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 3], 2004 With Comparative Actual Amounts For the Year Ended December 31,2003 Statement 35 2004 Variance with Budget Amounts Final Budget- 2003 Actual Positive Actual Original Final Amounts (N egative) Amounts Revenues: Intergovernmental revenue $90,000 $90,000 $231,065 $141,065 $141,473 Rents 285,000 285,000 29] ,657 6,657 284,080 Investmcnt income: Interest and dividends 5,000 5,000 16,607 11,607 21,142 Change in fair value (719) (719) 6,343 Recaptured HUD grant revenue (104,471) Other revenues 3,500 3,500 850 (2,650) 3,]71 Total revenues 383,500 383,500 539,460 155,960 351,738 Expenditures: Personal services 23,526 23,526 17,064 6,462 32,055 Supplies 21,738 2],738 27,077 (5,339) ]0,]79 Other services and charges 315,118 315,118 297,643 17,475 303,694 Capital outlay 102,771 (102,771) 55,824 Total expendihlres 360,382 360,382 444,555 (84,173) 401,752 Revenues over (under) expendihlres 23,II8 23,118 94,905 71,787 (50,014) Other financing sources (uses): Transfers out 13,518 (11,454) Net change in fund balance $36,636 $23,II8 94,905 $71,787 (61,468) Fund balance - beginning 412,925 474,393 Fund balance - ending $507,830 $412,925 128 CITY o.F 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 31,2004 With Comparative Actual Amounts For the Year Ended December 31, 2003 Statement 36 2004 Variance with Budgeted Amounts Final Budget- 2003 Actual Positive Actual Original Final Amounts (Negative) Amounts Revenues: Rents $190,600 $190,600 $207,562 $16,962 $191,338 Investment income: Interest and dividends 6,000 6,000 4,074 (1,926) 5,259 Change in fair value (177) (177) 1,578 Other 1,500 1,500 3,038 1,538 3,912 Total revenues 198,100 198,100 214,497 16,397 202,087 Expenditures: Personal services 10,083 10,083 13,835 (3,752) 18,345 Supplies 10,822 10,822 7,574 3,248 3,418 Other services and charges 169,608 169,608 179,770 (10,162) 162,020 Total expenditures 190,513 190,513 201,179 (l0,666) 183,783 Revenues over expenditures 7,587 7,587 13,318 5,731 18,304 Other financing sources (uses): Transfers out 6,964 (8,590) Net change in fund balance $14,551 $7,587 13,318 $5,731 9,714 Fund balance - beginning 112,304 102,590 Fund balance - ending $125,622 $112,304 129 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - HOUSING & REDEVELOPMENT AUTHORITY RENTAL HOUSING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31, 2004 With Comparative Actual Amounts For the Year Ended December 31,2003 Statement 37 2004 2003 Revenues: Rents $400 $18,309 Investment income: Interest and dividends 1,979 1,888 Change in fair value (86) (905) Other revenue: Miscellaneous 179 1,2 ]8 Total revenues 2,472 20,510 Expenditures: Supplies 189 Other services and charges 2,606 164,698 Total expenditures 2,606 164,887 Revenues over (under) expenditures (134) (144,377) Other financing sources (uses): Sale ofland 150,421 Transfers in 8,323 Total other fmancing sources (uses) 0 158,744 Net change in fund balance (134) 14,367 Fund balance - beginning 53,424 39,057 Fund balance - ending $53,290 $53,424 130 CITY 0.11' COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUNDS - ECONOMIC DEVELOPMENT AUTHORITY (COMPONENT UNIT) BUSINESS REVOLVING LOAN FUND - BALANCE SHEET December 31,2004 With Comparative Totals For December 31,2003 Statement 38 2004 2003 Assets Cash and investments $306,217 $327,260 Receivables: Taxes 4,163 Interest 2,983 2,662 Loans 3,620 6,545 Interfund receivable 39,686 Real estate held for resale 21,113 21,113 Total assets $373,619 $361,743 Liabilities and Fund Balance Liabilities: Deferred revenue $3,620 $8,488 Fund balance: Reserved for real estate held for resale 21,113 21,113 Reserved for program expenditures 306,426 306,426 Unreserved: Undesignated 42,460 25,716 Total fund balance 369,999 353,255 Total liabilities and fund balance $373,619 $361,743 131 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL REVENUE FUND - ECONOMIC DEVELOPMENT AUTHORiTY BUSINESS REVOLVING LOAN FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For The Year Ended December 31,2004 With Comparative Totals For the Year Ended December 31,2003 Statement 39 2004 2003 Revenues: Taxes $ $97,076 Intergovemmental 12,460 Fees/program revenues 3,192 20,781 Investment income: Interest and dividends 14,166 12,205 Change in fair value (6] 4) (5,847) Total revenucs 16,744 136,675 Expenditurcs Revenues over expenditures ] 6,744 136,675 Other financing sources (uses): Transfers out (1l1,648) Net change in fund balance 16,744 25,027 Fund balance - beginning 353,255 328,228 Fund balance - ending $369,999 $353,255 132 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. 133 CITY 0.1<' COLUMBIA HEIGHTS, MINNESOTA SUBCOMBINLNG BALANCE SHEET NONMAJOR DEBT SERVICE FUNDS December 31, 2004 Statement 40 G.O. Tax 0.0. Total Tax Multi-Use Increment G.O. Improvement/ Nonmajor 1ncremcnt Rcdevclopment Rcfunding Improvcmcnt Rcvenue Debt Bonds Plan Bonds 2004A 1999A 2003A Service Fund 376 Fund 385 Fund 350 Fund 387 Fund 388 Funds Assets Cash and investments $81,260 $ $3,221 $580,737 $342,121 $1,007,339 Cash and investmcnts with fiscal agent 32,211 32,211 Receivables: Taxcs: Unremitted 4,067 4 4,071 Delinquent 16,248 16,248 Interest 91 3 4,207 4,301 Interfund receivable 32,825 32,825 Total asscts $134,491 $4 $35,435 $584,944 $342,121 $1,096,995 Liabilitics and Fund Balancc Liabilities: Accounts payable $ $5,571 $ $ $ $5,571 Interfund payable 30,529 30,529 Deferred revenue: Property taxes - delinquent 16,248 16,248 Total liabilities 16,248 36,100 0 0 0 52,348 Fund balance: Unreserved: Dcsignated for debt servicc 118,243 35,435 584,944 342,121 1,080,743 Undcsignated (36,096) (36,096) Total fund balance 118,243 (36,096) 35,435 584,944 342,121 1,044,647 Total liabilities and fund balance $134,491 $4 $35,435 $584,944 $342,121 $1,096,995 134 CITY OF COLUMBIA HEIGHTS, MINNESOTA SUBCOMBlNlNG SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR DEBT SERVICE FUNDS For The Year Ended December 31,2004 Statement 41 G.O. Tax G.O. Total Tax Multi-Use Increment G.O. Improvcment/ Nonmajor Increment Redevelopment Refunding Improvement Revenue Debt Bonds Plan Bonds 2004A 1999A 2003A Service Fund 376 Fund 385 Fund 350 Fund 387 Fund 388 Funds Revenues: Tax incrcmcnt collections $700,059 $21,435 $ $ $ $721,494 Intergovellllnental 93,752 357 94,109 Investment income: Interest and dividends 435 10 19,981 20,426 Change in fair value (19) (866) (885) Total revenues 794,227 21,792 10 19,115 0 835,144 Expenditures: Debt service: Principal retirement 95,000 69,205 164,205 Interest and fiscal charges 23,109 44,949 68,058 Issuance costs 544 544 Miscellaneous 13,647 509 14,156 Developer incentives 10,957 10,957 Total expenditures 13,647 11 ,466 544 118,109 114,154 257,920 Revenues over (under) expenditures 780,580 10,326 (534) (98,994) (114,154) 577,224 Other financing sources (uses): Bond proceeds 36,077 36,077 Bond discount (108) (108) Transfers in 50,342 460,335 510,677 Transfers out (920,889) (920,889) Total other financing sources (uses) (920,889) 0 35,969 50,342 460,335 (374,243) Net change in fund balance (140,309) 10,326 35,435 (48,652) 346,181 202,981 Fund balance (deficit) - beginning 258,552 ( 46,422) 633,596 (4,060) 841,666 Fund balance (deficit) - ending $118,243 ($36,096) $35,435 $584,944 $342,121 $1,044,647 135 - This page intentionally left blank - 136 NONMAJOR CAPITAL PROJECT FUNDS The City of Columbia Heights had the following Capital Project Funds during the year: Capital Improvements Funds 390 & 401 - used to account for Capital Project Funds whereby funding is provided by a number of internal and external sources. Downtown Parking Maintenance Funds 290 & 405 - used for maintenance of the West Side Parking. Capital Sheffield Redevelopment Fund 410 - used to fund redevelopment ofthe area of the City identified as Sheffield Neighborhood. Capital Improvement Parks Fund 412 - used to account for improvements in City parks. Capital Improvement PVVS Fund 414 - used to account for improvements to Parkview Villa South building. Infrastmcture Replacement Fund 430 - used to fund replacement of City infrastructure. Capltal Equipment Fire Fund 439 - used to fund replacement of fire capital assets. Capital Equipment Cable TV Fund 440 - used to fund replacement of cable capital assets. Capital Building Library Fund 450 - used to fund replacement of the library building. TIF District #2 Funds 386 & 407 - used to account for revenues and expenditures located within the Tax Increment Financing District #2. TIP Medtronics Fund 378 - used to account for revenues and expenditures located within the Medtronics Tax Increment Financing District. TIF Scattered Site Funds 370 & 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. 137 CITY OF COLUMBIA HEIGHTS, MINNESOTA SUB COMBINING BALANCE SHEET NONMAJOR CAPITAL PROJECT FUNDS December 31, 2004 Downtown Parking Capital Capital Capital Capital Maintenance Sheffield Improvement Improvement Improvement Funds 290 Redevelopment Parks PYVS Funds 390 & 401 &405 Fund 410 Fund 412 Fund 414 Assets Cash and investments $129,915 $227,572 $213,133 $955,595 $19,922 Receivables: Accounts 50,250 Taxes Interest 1,116 5,560 7,333 5,622 Due from other govelllmental units Interfund receivable 600,000 Total assets $731,031 $233,132 $213,133 $1,013,178 $25,544 Liabilities and Fund Balance Liabilities: Accounts payable $ $ $ $ $ Contracts payable - retained percentage 1,000 Interfund payable 4,949 Total liabilities 1,000 4,949 0 0 0 Fund balance: Unreserved: Designated for capital improvement 730,031 228,183 213,133 1,013,178 25,544 U ndesignated Total fund balance 730,031 228,183 213,133 1,013,178 25,544 Total liabilities and fund balance $731,031 $233,132 $213,133 $1,013,178 $25,544 138 Statement 42 TTF Total Capital Capital Capital TIT Scattered TIT Nonmajor Infrastructure Equipment Equipment Building District #2 TIF Site Transition Capital Replacement Fire Cable TV Library Funds 386 Medtronics Funds 370 Block Project Fund 430 Fund 439 Fund 440 Fund 450 &407 Fund 378 &379 Fund 389 Funds $51,463 $347,379 $292,702 $198,397 $ $275,562 $17,033 $57,227 $2,785,900 50,250 17 17 1,527 4,245 2,455 1,603 1,721 48 144 31,374 91 ,608 22,322 713,930 $144,598 $351,624 $317,479 $200,000 $0 $277 ,283 $17,098 $57,371 $3,581,471 $ $ $ $ $ $47 $ $46 $93 1,000 14,211 15,304 6,966 6,966 2,296 2,296 o o o o 47 46 3,223,770 (2,296) 277,236 10,132 57,325 342,397 (2,296) 277,236 10,132 57,325 3,566,167 $0 $277,283 $17,098 $57,371 $3,581,471 144,598 351,624 317,479 200,000 144,598 351,624 317,479 200,000 $144,598 $351,624 $317,479 $200,000 139 - This page intentionally left blank - 140 CITY OF COLUMBIA HEIGHTS, MINNESOTA SUBCOMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR CAPITAL PROJECT FUNDS For The Year Ended December 31, 2004 Statement 43 Page 1 of2 Downtown Capital Capital Capital Parking Sheffield Improvement Improvement Maintenance Redevelopment Parks Funds 390 & 401 Funds 290 & 405 Fund 410 Fund 412 Revenues: Tax increment collections $ $ $ $ Intergovernll1ental Investment income: Interest and dividends 5,298 26,403 34,826 Change in fair value (230) (1,145) (1,510) Other revenues: Park dedication fees 50,250 Miscellaneous 4,975 Total revenues 5,068 25,258 0 88,541 Expenditures: Repair and maintenance 7,383 7,293 Capital outlay 373 Developer incentives Contractual services Total expenditures 373 7,383 0 7,293 Revenue over (under) expenditures 4,695 17,875 0 81,248 Other financing sources (uses): Transfers in 65,050 6,125 Transfers out (530,000) (270,000) Total other financing sources (uses) 65,050 (530,000) (270,000) 6,125 Net change in fund balance 69,745 (512,125) (270,000) 87,373 Fund balance (deficit) - beginning 660,286 740,308 483,133 925,805 Fund balance (deficit) - ending $730,031 $228,183 $213,133 $1,013,178 141 CITY OF COLUMBIA HEIGHTS, MINNESOTA SUBCOMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR CAPITAL PROJECT FUNDS For The Year Ended December 31, 2004 Capital Capital Capital Improvement Infi:astructure Equipment Equipment PVVS Rcplacement Fire Cable TV Fund 414 Fund 430 Fund 439 Fund 440 Revenues: Tax incremcnt collections $ $ $ $ Intergovernmental Investment income: Interest and dividends 26,701 7,255 20,158 11,658 Change in fair value (1,157) (315) (874) (505) Other revenues: Park dedication fees Miscellaneous Total revenues 25,544 6,940 19,284 11,153 Expenditures: Repair and maintenance 112,821 Capital outlay 87,224 210,321 Developer inecntives Contractual services Total expcnditures 0 87,224 323,142 0 Revenue over (under) expenditures 25,544 (80,284) (303,858) 11,153 Other financing sources (uses): Transfers in 52,176 Transfers out (765,325) Total other financing sources (uses) (765,325) 52,176 0 0 Net change in fund balance (739,781) (28,108) (303,858) 11,153 Fund balance (deficit) - beginning 765,325 172,706 655,482 306,326 Fund balance (deficit) - ending $25,544 $144,598 $351,624 $317,479 142 Statement 43 Page 2 of2 Capital Building TlF TlF TlF TIF Total Nonmajor Library District #2 Medtronic Scattered Site Transition Block Capital Fund 450 Funds 386 & 407 Fund 378 Funds 370 & 379 Fund 389 Project Funds $ $ $115,798 $21,815 $64,133 $201,746 4,266 4,266 8,171 224 683 141,377 (354) (10) (29) (6,129) 50,250 264 5,239 0 0 123,615 26,295 65,051 396,749 127,497 297,9] 8 46,319 10,590 56,909 53 437 1,045 1,150 2,685 0 53 46,756 1,045 11 ,740 485,009 0 (53) 76,859 25,250 53,311 (88,260) 123,351 (1,565,325) 0 0 0 0 0 (1,441,974) 0 (53) 76,859 25,250 53,311 (1,530,234) 200,000 (2,243) 200,377 (15,118) 4,014 5,096,401 $200,000 ($2,296) $277,236 $10,132 $57,325 $3,566,167 143 - This page intentionally left blank - 144 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 detenllination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. Water Utility 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. 145 CITY OF COLUMBIA HEIGHTS, MINNESOTA WATER UTILITY FUND Statement 44 SUBCOMBINING SCHEDULE OF NET ASSETS December 31, 2004 With Comparative Totals For December 31,2003 Capital Equipment Capital Opcrating Replacement Construction Debt Totals Account Account Account Service 2004 2003 Assets Currcnt asscts: Cash and cash equivalents $210,526 $10,129 $ - $251,077 $471,732 $5,807 Receivables: Accounts (net of allowance for uncollectiblcs) 374,376 374,376 351,176 Interest 2,858 1,536 4,394 5,193 Interfund receivable 360,040 360,040 668,026 Inventory - at cost 3,940 3,940 3,299 Total current assets 588,842 373,027 0 252,613 1,214,482 1,033,501 Noncurrent assets: Capital assets: Land 45,223 45,223 45,223 Buildings 447,305 447,305 447,305 Improvements other than buildings 6,315,282 6,315,282 6,315,282 Office furniture and fixtures 25,259 25,259 25,259 MachinelY and equipment 300,529 300,529 206,972 Construction in process 198,500 198,500 Total capital assets 7,133,598 0 198,500 0 7,332,098 7,040,041 Less: Accumulated depreciation (2,650,117) (2,650,117) (2,469,559) Total capital assets (net of accumulated depreciation) 4,483,481 0 198,500 0 4,681,981 4,570,482 Total noncurrent assets 4,483,481 0 198,500 0 4,681,981 4,570,482 Total assets 5,072,323 373,027 198,500 252,613 5,896,463 5,603,983 Liabilitics Currcnt liabilities: Accounts payable 7,544 7,544 6,462 Accrued salaries and witWlOldings payable 3,189 3,189 4,669 Due to other govemmcntal units 73,228 73,228 95,801 Interfund payable 706,582 719,090 1,425,672 973,885 Accrued interest payable 23,592 23,592 30,242 Deposits 3,744 Compensated absences payable - current 430 430 326 Bonds payable - current 158,258 158,258 149,145 Total current liabilities 790,973 0 719,090 181,850 1,691,913 1,264,274 Noncurrent liabilities: Compensated absences payable - noncurrent 13,943 13,943 13,071 Bonds payablc - noncurrcnt 1,471,587 1,471,587 1,629,845 Total noncurrent liabilities 13,943 0 0 1,471,587 1,485,530 1,642,916 TotalliabiJities 804,916 0 719,090 1,653,437 3,177,443 2,907,190 Net Assets Invcstcd in capital assets, net of related dcbt 4,483,481 198,500 (1,629,845) 3,052,136 2,791,492 Restricted for debt service 229,021 229,021 285,725 Unrestricted (216,074) 373,027 (719,090) (562,137) (380,424) Total net assets $4,267,407 $373,027 ($520,590) ($1,400,824) $2,719,020 $2,696,793 146 CITY OF COLUl\-ffiIA HEIGHTS, MINNESOTA WATER UTILITY FUND Statement 45 SUBCOMBlNING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS For The Year Ended December 31,2004 With Comparative Totals For Thc Year Ended December 31, 2003 Capital Equipment Capital Operating Replaccmcnt Construction Debt Totals Account Account Account Service 2004 2003 Operating revenues: Charges for services: Customer services $40,884 $ - $ - $ - $40,884 $38,923 Penalties 33,670 33,670 32,663 Charges for sales: Water 1,614,143 1,614,143 1,398,233 Meter 3,949 68,207 72,156 78,092 Total operating revenues 1,692,646 0 0 68,207 1,760,853 1,547,911 Operating expenses: Cost of sales and services 862,514 862,514 1,180,726 Distribution 501,210 1 ,4 79 10,905 513,594 472,396 Administration 20,406 20,406 10,265 Depreciation 180,558 180,558 177 ,604 Total operating expenses 1,564,688 1,479 10,905 0 1,577 ,072 1,840,991 Net income (loss) from operations 127,958 (1,479) (10,905) 68,207 183,781 (293,080) Nonoperating revenues (expenses): Investment income: Interest and dividends 13,576 7,296 20,872 23,805 Change in fair value (589) (316) (905) (11,405) Miscellaneous revenues 10,300 10,300 594 Interest and fiscal charges (57,387) (57,387) (48,625) Miscellaneous expenses (12,391) Total nonoperating revenues (expenses) 10,300 12,987 0 (50,407) (27,120) (48,022) Net income (loss) before transfers 138,258 11,508 (10,905) 17,800 156,661 (341,102) Transfers in 93,558 25,000 18,851 74,641 212,050 1,863,159 Transfers out (241,514) (20,733) (84,237) (346,484) (1,986,073) Total transfers (147,956) 4,267 (65,386) 74,641 (134,434) (122,914) Change in net assets (9,698) 15,775 (76,291) 92,441 22,227 (464,016) Total net assets - beginning 4,277,105 357,252 ( 444,299) (1,493,265) 2,696,793 3,160,809 Total net assets - ending $4,267,407 $373,027 ($520,590) ($1,400,824) $2,719,020 $2,696,793 147 CITY OF COLUMBIA HEIGHTS, MINNESOTA WATER UTILITY FUND SUBCOMBINING SCHEDULE OF CASH FLOWS For The Year Ended December 3 ] , 2004 With Comparative Totals For The Year Ended December 31,2003 Statement 46 "If\f\A "If\f\':! ":'VV"'T ~VV..J $1,733,909 $1,48],678 (1,164,907) (1,593,129) (254,243) (227,285) 10,300 594 (12,39]) 325,059 (350,533) 2] 2,050 1,863,159 (346,484) (1,986,073) 307,986 10,649 45],787 295,210 625,339 182,945 (292,057) (764,570) 1,011,008 (149,145) (94,038) (64,037) (32,803) (505,239) 119,597 $183,78] ($293,080) 10,300 594 (12,391) 180,558 177,604 (23,200) (67,393) 1,160 (64]) ( 435) ],082 2,760 (1,480) 1,625 (22,573) (161,198) (3,744) 976 221 141,278 (57,453) $325,059 ($350,533) Cash flows from operating activities: Cash received fi-om 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 noncapita] financing activities: Transfers in Transfers out Interfund receivable repaid by other funds Interfimd payable advanced from other funds Net cash flows fi-om noncapital financing activities Cash flows from capital and related financing activities: Acquisition of capital assets Proceeds from sale of bonds Principal payments - bonds Interest and fiscal charges Net cash flows fi'om capita] 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 21,671 (905) 20,766 465,925 5,807 $471,732 Cash and cash equivalents - Decelnber 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 fi-om operating activities: Miscellaneous revenues Miscellaneous expenses Depreciation expense Changes in assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in due fi-om other governrnenta] units (Increase) decrease in inventory, at cost Increase (decrease) in accounts payable Increase (decrease) in accmcd salaries and withholdings payable Increase (decrease) in due to other governmental units Increase (decrease) in deposits Increase (decrease) in compensated absences payable Total adjustments Net cash flows from operating activities 148 25,280 (11,405) 13,875 (34,116) 39,923 $5,807 CITY OF COLUMBIA HEIGHTS, MINNESOTA SEWER UTILITY FUND Statement 47 SUBCOMBINlNG SCHEDULE OF NET ASSETS December 31, 2004 With Comparative Totals For December 31, 2003 Capital Equipment Capital Operating Replacement Construction Debt Totals Account Account Account Service 2004 2003 Assets Current assets: Cash and cash equivalents $229,439 $487,060 $140,701 $5,236 $862,436 $2,003,712 Receivables: Accounts (net ofal1owance for uncollectibles) 236,238 236,238 245,266 Interest 11,029 3,768 3,827 23 18,647 24,327 Due from other govemmental units 5,169 Interfund receivables 1,065,632 707,759 1,773,391 958,414 Prepayments 64,]98 64,198 57,269 Total CUlTent assets ],606,536 490,828 852,287 5,259 2,954,910 3,294,157 Noncurrent assets: Due from other govenUllenta] units 155,785 155,785 178,368 Capita] assets: Land 36,586 36,586 36,586 Buildings 45,20] 45,201 45,201 Improvements other than buildings 4,685,437 4,685,437 4,576,886 Office fumiture and fixtures 40,964 40,964 40,964 MachinelY and equipment 520,460 520,460 418,383 Construction in process 96,2]0 96,2]0 405 Total capital assets 5,328,648 0 96,210 0 5,424,858 5,118,425 Less; Accumulated depreciation (2,958,378) (2,958,378) (2,816,337) Total capital assets (net of accumulated depreciation) 2,370,270 96,210 2,466,480 2,302,088 Total noncurrent assets 2,526,055 0 96,210 0 2,622,265 2,480,456 Total assets 4,132,591 490,828 948,497 5,259 5,577,175 5,774,613 Liabilities Current liabilities; Accounts payable 3,999 2,976 6,975 ]2,498 Accrued salaries and withholdings payable 16,645 2,927 19,572 2,179 Accrued interest payable 436 436 493 Compensated absences payable - current 430 430 326 Bonds payable - current 3,865 3,865 3,667 Total current liabilities 21,074 0 5,903 4,301 31,278 19,163 Noncurrent liabilities: Compensated absences payable - noncurrent 13,943 13,943 13,071 Bonds payable - noncurrent 2],605 21,605 25,469 Total noncurrent liabilities 13,943 0 0 21,605 35,548 38,540 T otalliabilities 35,017 5,903 25,906 66,826 57,703 Net Assets Invested in capital assets, net of related debt 2,370,270 96,2]0 (25,470) 2,44],010 2,272,546 Restricted for debt service 4,823 4,823 4,450 Unrestricted 1,727,304 490,828 846,384 3,064,516 3,439,914 Total net assets $4,097,574 $490,828 $942,594 ($20,647) $5,510,349 $5,716,910 149 CITY O}<' COLUMBIA HEIGHTS, MINNESOTA SEWER UTILITY FUND Statement 48 SUB COMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS For The Year Ended December 3], 2004 With Comparative Totals For The Year Ended December 31, 2003 Capita] Equipment Capital Operating Replacement Construction Debt Totals Account Account Account Service 2004 2003 Operating revenues: Charges for sales and services: Scwer service charges $1,011,419 $ - $ - $ - $1,011,419 $1,201,655 Operating expenses: Cost of sales and services 704,853 704,853 723,970 Collection 305,352 3],504 336,856 345,899 Administration 17,322 17,322 10,813 Depreciation 142,041 142,041 138,043 Total operating expenses ],] 69,568 0 31,504 0 I ,20] ,072 ],2] 8,725 Net income (loss) from operations (158,149) 0 (31,504) 0 (189,653) (17,070) Nonoperating revenues (expenses) Investment income: Interest and dividends 52,374 17,897 42,666 III 113,048 111,527 Change in fair value (2,270) (776) (788) (5) (3,839) (53,435) Intergovernmental 1,865 Miscellaneous revenues 8,113 8,113 39,227 Interest and fiscal charges (1,067) (1,067) (1,203) Miscellaneous expenses (1,249) (1,249) Total nonoperating revenues (expenses) 58,2]7 ]5,872 4],878 (96] ) 115,006 97,981 Net income (loss) before transfers (99,932) 15,872 ] 0,374 (961 ) (74,647) 80,911 Transfers in 202,109 25,000 40,396 5,000 272,505 460,629 Transfers out (]93,4]8) (20,733) ( 190,268) (404,4 ] 9) (583,543) Total transfers 8,691 4,267 (149,872) 5,000 (131,914) (122,914) Change in net assets (9],241) 20,139 (139,498) 4,039 (206,561) (42,003) Net assets - beginning 4,188,815 470,689 1,082,092 (24,686) 5,716,910 5,758,913 Net assets - ending $4,097,574 $490,828 $942,594 ($20,647) $5,510,349 $5,716,910 150 CITY OF COLUMBIA HEIGHTS, MINNESOTA SEWER UTILITY FUND SUBCOMBINING SCHEDULE OF CASH FLOWS For The Year Ended December 31, 2004 With Comparative Totals For The Year Ended December 31, 2003 Statement 49 2004 2003 $ I ,048, I 99 $1,236,883 (841,864) (938,999) (211,250) (191,551) 8,113 41,092 (1,249) 1,949 147,425 272,505 460,629 (404,419) (583,543) (8 14,977) (335,010) (946,891 ) (457,924) (306,433 ) (424,023) (3,666) (3,568) (1,124) (1,257) (311,223) (428,848) 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 in Transfers out Interfund receivable advanced to other funds Net cash flows from noncapital financing activities Cash flows from capital and related financing activities: Acquisition of capital assets Principal payments - bonds Interest and fiscal charges 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 - Janumy 1 Cash and cash equivalents - December 31 118,728 (3,839) 114,889 (1,141,276) 2,003,712 $862,436 116,589 (53,435) 63,154 (676,193) 2,679,905 $2,003,712 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 Miscellaneous expenses Depreciation expense Changes in assets and liabilities: (Increase) decrease in accounts receivable (Incrcasc) decrease in due from other governmental units (Increase) decrease in prepayments Increase (decrease) in accounts payable Increase (decrease) in accmed salarics and withholdings payable Increase (decrease) compensated absences payable Total adjustments Net cash flows from operating activities ($189,653) ($17,070) 8,113 41,092 (1,249) 142,041 138,043 9,028 18,682 27,752 16,546 (6,929) (57,269) (5,523) 7,735 17,393 (555) 976 221 191,602 164,495 $1,949 $147,425 151 CITY OI<' COLUMBIA HEIGHTS, MINNESOTA REFUSE UTILITY FUND SUBCOMBINING SCHEDULE OF NET ASSETS December 31, 2004 With Comparative Totals For December 31,2003 Statement 50 Assets Current assets: Cash and cash equivalents Receivables: Accounts (net of allowance for uncollcctibles) Interest Total Clm-ent assets NonculTent 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 Net assets Invested in capital assets, net of related debt Unrestricted Total net assets 2004 2003 $187,101 $357,894 286,170 2,589 475,860 278,412 4,060 640,366 6,000 6,000 11,566 11,566 97,124 97,124 114,690 114,690 (63,299) (52,130) 51,391 62,560 51,39] 62,560 527,251 702,926 90,471 104,454 51,391 385,389 62,560 535,9] 2 $436,780 $598,472 152 CITY OF COLUMBIA HEIGHTS, MINNESOTA REFUSE UTILITY fUND SUBCOMBINlNG SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS For The Year Ended December 31,2004 With Comparative Totals For The Year Ended December 31, 2003 Statement 51 2004 2003 Operating revenues: Refuse service charges $1,255,011 $1,246,660 Operating expenses: Cost of sales and services 1,244,428 1,256,930 Administration 14,081 15,842 Recycling 15,514 13,504 Hazardous waste 4,119 Depreciation 1],169 ] 1,169 Total operating expenses 1,285,192 1,301,564 Net income (loss) from operations (30,18]) (54,904) Nonoperating revenues (expenses): Investment income: Interest and dividends 12,299 18,613 Change in fair value (533) (8,918) Intergovernmental 46,635 53,411 Miscellaneous revenues 1,686 Total nonoperating revenues (expenses) 58,401 64,792 Net income before transfers 28,220 9,888 Transfers out ( 189,912) (189,804) Change in net assets (161,692) (179,916) Net assets - beginning 598,472 778,388 Net assets - ending $436,780 $598,472 153 CITY O.F COLUMBIA HEIGHTS, MINNESOTA REFUSE UTILITY FUND SUBCOMBlNlNG SCHEDULE OF CASH FLOWS For The Year Ended December 31,2004 With Comparative Totals For The Year Ended December 31,2003 Statement 52 2004 2003 $1,247,253 $1,269,005 (1,287,348) (1,393,273) (658) (769) 46,635 55,097 5,882 (69,940) (189,9]2) (189,804) Cash flows from operating activities: Cash receivcd 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 13,770 21,325 (533) (8,918) 13,237 ] 2,407 (170,793) (247,337) 357,894 605,231 $]87,10] $357,894 Net increase (decrease) 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: Miscellaneous revenues Depreciation expense Changes in assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in due fi:om other governmental units Increase (decrease) in accounts payable Total adjustmcnts ($30,181} ($54,904) 46,635 11,169 55,097 11,169 (7,758) 1,963 20,382 (103,647) (15,036) (13,983) 36,063 Net cash flows from operating activities $5,882 ($69,940) 154 CITY OF COLUMBIA HEIGHTS, MINNESOTA STORM SEWER UTILITY FUND Statement 53 SUBCOMBINING SCHEDULE OF NET ASSETS December 31, 2004 With Comparative Totals For December 31,2003 Capital Equipment Capital Debt Operating Replacement Construction Service Totals Account Account Account Account 2004 2003 Assets Cun-ent assets: Cash and cash equivalents $376 $607 $1,803 $116,680 $119,466 $96,239 Receivables: Accounts (net ofallowance for uncollectibles) 61,678 61,678 49,036 Interest 171 510 681 2,086 Due from other governmental units 113,407 113,407 Interfund receivable 24,273 24,273 Total current assets 62,054 25,051 115,720 116,680 319,505 147,361 Noncun-ent assets: Capital assets: Land 254,724 254,724 254,724 Improvements other than buildings 1,148,708 1,148,708 1,030,067 Construction in process 100,538 100,538 123,174 Total capital assets 1,403,432 0 100,538 0 1,503,970 1,407,965 Less: Accumulated depreciation (156,861) (156,861) (104,863) Total capital assets (net of accumulated depreciation) 1,246,571 100,538 1,347,109 1,303,102 Total noncun-ent assets 1,246,571 0 100,538 0 1,347,109 1,303,102 Total assets 1,308,625 25,051 216,258 116,680 1,666,614 1,450,463 Liabilities Current liabilities: i:l~ccounts payable 691 1,500 ? lQl 2 -,....- ~ Accrued salaries and withholdings payable 650 650 150 Due to other governmental units 16 16 Interfund payable 220,737 35,038 255,775 162,693 Accrued interest payable 13,135 13,135 15,755 Bonds payable - current 103,545 103,545 97,983 Total cun-ent liabilities 222,094 0 36,538 116,680 375,312 276,583 Noncurrent liabilities: Bonds payable - noncurrent 727,517 727,517 831,062 Total liabilities 222,094 0 36,538 844,197 1,102,829 1,107,645 Net Assets Invested in capital assets, net ofrelated debt 1,246,571 100,538 (831,062) 516,047 250,882 Restricted for debt service 103,545 103,545 Unrestricted (160,040) 25,051 79,182 (55,807) 91,936 Total net assets $1,086,531 $25,051 $179,720 ($727,517) $563,785 $342,818 155 CITY o.F COLUMBIA HEIGHTS, MINNESOTA STORM SEWER UTILITY FUND SUBCOMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS For The Year Ended Decem bel' 31, 2004 With Comparative Totals For The Year Ended December 31,2003 Statement 54 Capital Equipment Capital Operating Replacement Constmction Debt Totals Account Account Account Service 2004 2003 Operating revenues: Charges for sales and services: Storm sewer service charges $284,223 $ - $ - $ - $284,223 $184,712 Operating expenses: Collection 62,013 15,033 77,046 120,618 Administration 9,892 9,892 1,330 Depreciation 51,998 51,998 51,503 Total operating expenses 123,903 0 ]5,033 0 138,936 173,451 Net income from operations 160,320 0 (15,033) 0 145,287 11 ,261 Nonoperating revenues (expenses): Investment income: Interest and dividends 813 2,417 3,230 9,564 Change in fair value (35) (105) (140) (4,583) Intergovernmental 113,407 113,407 52,499 Interest and fiscal charges (32,048) (32,048) (32,066) Miscellaneous expenses (3,140) Total nonoperating revenues (expenses) 0 778 115,719 (32,048) 84,449 22,274 Net income (loss) before transfers 160,320 778 100,686 (32,048) 229,736 33,535 Transfers in 118,642 5,800 8,892 332,159 465,493 637,939 Transfers out (346,851) (127,411) (474,262) (637,939) Total transfers (228,209) 5,800 (118,519) 332,159 (8,769) 0 Change in net assets (67,889) 6,578 (17,833) 300,111 220,967 33,535 Net assets - beginning 1,154,420 18,473 197,553 (1,027,628) 342,818 309,283 Net assets - ending $1,086,53 ] $25,051 $179,720 ($727,517) $563,785 $342,818 156 CITY OF COLUMBIA HEIGHTS, MINNESOTA STORM SEWER UTILITY FUND SUBCOMBINING SCHEDULE OF CASH FLOWS For The Year Ended December 31, 2004 With Comparative Totals For The Year Ended December 31,2003 Statement 55 2004 2003 $27] ,58] $] 86,868 (76,889) (73,790) (7,344 ) (48,244) (3,140) 187,348 61,694 465,493 637,939 (474,262) (637,939) 93,082 66,289 (24,273) 60,040 66,289 (96,005) (341,312) 52,499 256,163 (97,983) (82,394) (34,668) (28,946) (228,656) (143,990) Cash flows from operating activities: Cash received from customers Cash paid to suppliers for goods and services Cash payments to employees for services Miscellaneous expenses Net cash flows from operating activities Cash flows from noncapitaL financing activities: Transfers in Transfers out Interfund payable advanced from other funds Interfund receivable advanced to other funds Net cash flows from noncapital financing activities Cash flows from capital and related financing activities: Acquisition of capital assets Proceeds of capitaL grants and contributions Proceeds from sale of bonds Principal payments - bonds Interest and fiscal charges Net cash flows from capital and related financing activities Cash flows from investing activities: Investment income: Interest and di vidends Change in fair value Net cash flows from investing activities 4,635 9,153 (140) (4,583) 4,495 4,570 23,227 (11,437) 96,239 107,676 $119,466 $96,239 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 Adjustments to reconcile operating income to net cash flows from operating activities: 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 accounts payable Increase (decrease) in accrued salaries and withholdings payable Increase (decrease) in due to other governmental units Total adjustments Net cash flows from operating activities $145,285 $11,261 51,998 (3,140) 51,5 03 (12,642) (12,799) 14,955 (167) 81 2,189 500 16 42,061 $187,346 50,433 $61 ,694 157 CITY Ol<~ COLUMBIA HEIGHTS, MINNESOTA LIQUOR fUND SUBCOMBlNING SCHEDULE OF NET ASSETS December 31, 2004 With Comparative Totals For December 3 1, 2003 Statement 56 Capital Equipment Operating Replacement Totals Account Account 2004 2003 Assets Current assets: Cash and cash equivalents $2,053,045 $28,473 $2,081,518 $2,046,599 Receivables: Accounts (net of allowance for uncollectibles) 1,678 1,678 577 Interest 15,186 222 15,408 17,137 Due from other governmental units 1,012 1,012 1,865 Prepayments 5,534 5,534 5,441 Inventory - at cost 1,640,919 1,640,919 1,381,601 Total cunent assets 3,717,374 28,695 3,746,069 3,453,220 NonculTent assets: Capital assets: Land 4,360 4,360 4,360 Buildings 162,239 162,239 162,239 Improvements other than buildings 81,198 81,198 81,198 Office furniturc and fixtures 14,791 14,791 14,791 Machinery and equipment 349,632 349,632 289,38 I Total capital asscts 612,220 0 612,220 551,969 Less: Accumulated depreciation (509,609) (509,609) ( 496,662) Net capital assets (net of accumulated depreciation) 102,61 I 0 102,611 55,307 Total noncunent assets 102,611 0 102,611 55,307 Total assets 3,819,985 28,695 ""10,,10 ron 3,508,527 .J,o'to,oov Liabilities Cllnent liabilities: Accounts payable 388,738 388,738 312,624 Accnled salaries and withho1dings payable 31,468 31,468 23,491 Due to other governmental units 62,615 62,615 71,459 Compensated absences payable - Cllnent 1,323 1,323 918 Total euncnt liabilities 484,144 0 484,144 408,492 Noncunent liabilitics: Compensated absences payable - noncunent 42,914 42,914 36,842 Total liabilities 527,058 0 527,058 445,334 Net Assets Invested in capital assets, net of related debt 102,611 102,6] ] 55,308 Unrestrictcd 3,190,316 28,695 3,219,011 3,007,885 Total net assets $3,292,927 $28,695 $3,321,622 $3,063,193 158 CITY OJ<" COLUMBIA HEIGHTS, MlNNESOTA LIQUOR FUND SUBCOMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS For The Year Ended December 31, 2004 With Comparative Totals For The Year Ended December 31, 2003 Statement 57 Capital Operating Accounts Total Equipment Top Heights Operating Replacement Totals Top Valu Valu II Liquor Accounts Account 2004 2003 Operating revenues: Charges for sales: Liquor $1,032,130 $834,232 $467,205 $2,333,567 $ - $2,333,567 $2,277,612 Beer 1,420,526 1,284,601 688,710 $3,393,837 3,393,837 3,445,331 Wine 328,678 366,652 55,512 $750,842 750,842 701,999 Other 202,384 148,118 11 7,310 $467,812 467,812 509,630 Total operating revenues 2,983,718 2,633,603 1,328,737 6,946,058 0 6,946,058 6,934,572 Operating expenses: Cost of goods sold 2,277,454 2,053,434 987,443 5,318,331 5,318,331 5,366,137 Operating expense 564,695 425,514 253,778 1,243,987 1,243,987 1,223,988 Depreciation 2,028 9,843 1,076 12,947 12,947 12,175 Total operating expenses 2,844,177 2,488,791 1,242,297 6,575,265 0 6,575,265 6,602,300 Net income (loss) from operations $139,541 $144,812 $86,440 370,793 0 370,793 332,272 Nonoperating revenues (expenses): Investment income: ,interest and dividends 72,118 1,054 73,172 78,557 Change in fair value (3,126) (46) (3,172) (37,638) Miscellaneous revenues 29,698 29,698 26,344 Miscellaneous expenses (1,022) Total nonoperating revenues (expenses) 98,690 1,008 99,698 66,241 Net income before transfers 469,483 1,008 470,491 398,513 Transfer out (212,062) (212,062) (261,981) Change in net assets 257,421 1,008 258,429 136,532 Net assets - beginning 3,035,506 27,687 3,063,193 2,926,661 Net assets - ending $3,292,927 $28,695 $3,321,622 $3,063,193 159 CITY OF COLUMBIA HEIGHTS, MINNESOTA LIQUOR FUND SUBCOMBINING SCHEDULE OF CASH FLOWS For The Year Ended December 31,2004 With Comparative Totals For The Year Ended December 31, 2003 Statement 58 2004 2003 $6,944,957 $6,934,154 (5,941,065) (5,924,334) (798,087) (752,585) 29,698 26,344 (1,022) 235,503 282,557 (212,062) (261,981) (60,251) Cash tlows 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 Cash flows from capital and related financing activities: Acquisition of capital assets 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 74,901 80,530 (3,172) (37,638) 71,729 42,892 34,919 63,468 2,046,599 1,983,131 $2,081,518 $2,046,599 Cash and cash cquivalents - January 1 Cash and cash equivalents - December 31 Reconciliation of operating income (loss) to net cash flows from operating activities Opcrating incomc (loss) $370,793 $332.272 Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Miscellaneous revenues Miscellancous expenses Depreciation expense Changes in assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in due from other governmental units (Increase) decrease in prepayments (Increase) decrease in inventory, at cost Increase (decrease) in accounts payable Increase (decrease) in aecmed salaries and withholdings payable Increase (decrease) in due to other governmental units Increase (decrease) in compensated absences payable Total adjustmcnts 'lO t.OQ 26,344 ..:../,v/u (1,022) 12,947 12,175 (1,101) (577) 853 159 (93) (5,441) (259,318) (192,938) 76,1 ]4 78,338 7,977 12,875 (8,844) 12,847 6,477 7,525 (135,290) (49,715) $235,503 $282,557 Net cash flows from operating activities 160 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. Data Processing Fund - used to account for the costs associated with data processing within the City. All costs are recorded in the fund and allocated to user departments. 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. 161 CITY OF COLUMBIA HEIGHTS, MINJ\TESOT A INTERNAL SERVICE FUNDS COMBINING SCHEDULE OF NET ASSETS December 31, 2004 With Comparative Totals For December 31,2003 Statement 59 Central Data Compensated Totals Garage Processing Insurance Absences 2004 2003 Assets Current assets: Cash and cash equivalents $306,065 $751,635 $1,026,082 $599,624 $2,683,406 $2,176,028 Receivables: Accounts (net of allowance for uncollectibles) 2,281 Interest 252 227 7,272 7,751 6,614 Due from other govemmental units 15,789 Interfund receivable 41,952 41,952 Prepayments 40,232 40,232 10,853 Inventory - at cost 49,402 49,402 50,382 Total current assets 355,719 751,862 1,115,538 599,624 2,822,743 2,261,947 Noncurrent assets: Capital assets: Buildings 371,383 371,383 371,383 Improvements other than buildings 119,846 119,846 119,846 Machinery and equipment 77 ,044 38,844 115,888 103,183 Total capital assets 568,273 38,844 0 0 607,117 594,412 Less: Accumulated depreciation (476,161) (26,492) (502,653) (470,251) Total capital assets (net of accumulated depreciation) 92,112 12,352 104,464 124,161 Total noncurrent assets 92,112 12,352 0 0 104,464 124,161 Total assets 447,831 764,214 1,115,538 599,624 2,927,207 2,386,108 Liabilities Current liabilities: Accounts payable 12,239 84,758 2,195 99,192 15,864 Accrued salaries and withholdings payable 5,356 4,835 10,191 6,047 Compensated absences payable - CUITent 865 269 17,431 18,565 14,873 Total CUlTent liabilities 18,460 89,862 2,195 17,431 127,948 36,784 NonculTent liabilities: Compensated absences payable - nonCUlTent 28,064 8,714 565,535 602,313 596,949 Total noncurrent liabilities 28,064 8,714 0 565,535 602,313 596,949 Total liabilities 46,524 98,576 2,195 582,966 730,261 633,733 Net Assets Invested in capital assets, net of related debt 92,112 12,352 104,464 124,162 Unrestricted 309,195 653,286 1,113,343 16,658 2,092,482 1,628,213 T otalnet assets $401,307 $665,638 $1,113,343 $16,658 $2,196,946 $1,752,375 162 CITY OF COLUMBIA HEIGHTS, MlNNESOTA INTERNAL SERVICE FUNDS COMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS For The Year Ended December 31, 2004 With Comparative Totals For The Year Ended December 31,2003 Statement 60 Central Data Compensated Totals Garage Processing Insurance Absences 2004 2003 Operating revenues: Charges for services: Services to depmiments $198,020 $ - $ - $ - $198,020 $200,013 Use of space 241,129 241,129 219,207 Insurance allocation 559,680 559,680 572,401 Recovery of damages 11,668 11,668 41,059 Charges for sales: Sales of gasoline 75,939 75,939 61,298 Total operating revenues 515,088 0 571,348 0 1,086,436 1,093,978 Operating expenses: Cost of services and space 318,195 243,537 269,617 831,349 909,492 Claims administration 7,895 7,895 4,406 Claims 14,557 14,557 11 , 184 Depreciation 32,049 353 32,402 43,059 Total operating expenses 350,244 243,890 292,069 0 886,203 968,141 Net income (loss) from operations 164,844 (243,890) 279,279 0 200,233 125,837 Nonoperating revenues (expenses): Investment income: Interest and dividends 1,193 1,076 34,535 36,804 30,326 Change in fair value (51) (46) (1,497) (1,594) (14,529) Miscellaneous revenues 485 485 2,589 Total nonoperating revenues (expenses) 1,627 1,030 33,038 0 35,695 18,386 Net income (loss) before transfers 166,471 (242,860) 312,317 0 235,928 144,223 Transfers in 4,000 299,143 303,143 314,000 Transfers out (94,500) (94,500) (94,500) Total transfers (90,500) 299,143 0 0 208,643 219,500 Change in net assets 75,971 56,283 312,317 0 444,571 363,723 Net assets - beginning 325,336 609,355 801,026 16,658 1,752,375 1,388,652 Net assets - ending $401,307 $665,638 $1,113,343 $16,658 $2,196,946 $1,752,375 163 CITY OF COLUMBIA HEIGHTS, MINNESOTA lNTERNAL SERVICE FUNDS COMBINING SCHEDULE OF CASH FLOWS For The Year Ended December 31, 2004 With Comparative Totals For The Year Ended December 31,2003 Statement 61 Central Data Compensated Totals Garage Processing 1 nsuranee Absences 2004 2003 Cash flows from operating activities: Cash received from interfund goods and selvices provided $517,369 $ - $559,680 $4,995 $1,082,044 $1,083,567 Cash received for damages 27,457 27,457 25,270 Cash paid to suppliers for goods and services (165,285) (23,405) (320,822) (509,512) (624,247) Cash payments to employees for services (142,751) (138,404) (281,155) (284,839) Miscellaneous revenues 485 485 2,589 Net cash flows from operating activities 209,818 (161,809) 266,315 4,995 319,319 202,340 Cash flows from noncapital financing activities: Transfers in 4,000 299,143 303,143 314,000 Transfers out (94,500) (94,500) (94,500) Interfund receivable advanced to other funds (41,952) (41,952) Net cash flows ti'Om noneapital financing activities (90,500) 299,143 (41,952) 0 166,691 219,500 Cash flows from capilal and related financing activities: Acquisition of capital assets (12,705) (12,705) Cash flows from investing activities: Investment income: Interest and dividends 1,178 1,093 33,397 35,668 29,651 Change in fair value (52) (46) (1,497) (l,595) (14,529) Net cash flows from investing activities 1,126 1,047 31,900 0 34,073 15,122 Net increase (decrease) in cash and cash equivalents 120,444 125,676 256,263 4,995 507,378 436,962 Cash and cash equivalents - January I 185,621 625,959 769,819 594,629 2,176,028 ],739,066 Cash and cash cquivah:nts - December 31 $306,065 $751,635 $1,026,082 $599,624 $2,683,406 $2,176,028 Reconciliation of operating income (loss) to net cash flows from operating activities Operating income (loss) $164,844 ($243,890) $279,279 $ $200,233 $125,837 Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Miscellaneous revenues 485 485 2,589 Depreciation expense 32,049 353 32,402 43,059 Changes in assets and liabilities: (Increase) decrease in accounts receivable 2,281 2,281 172 (Increase) decrease in due from other governmental units 15,789 15,789 (15,789) (Increase) decrease in prepayments (29,379) (29,379) 1,624 (Increase) decrease in inventory, at cost 980 980 15,977 Increase (decrease) in accounts payable 3,899 78,803 626 83,328 (8,166) Increase (decrease) in aeelUed salaries and withholdings payable 3,129 1,015 4,144 2,732 Increase (decrease) in compensated absences payable 2,151 1,910 4,995 9,056 34,305 Total adjustments 44,974 82,081 (12,964) 4,995 119,086 76,503 Net cash flows fr'om operating activities $209,818 ($161,809) $266,315 $4,995 $319,319 S202,340 164 CITY O}' COLUMBIA HEIGHTS, MINNESOTA CENTRAL GARAGE FUND SUBCOMBINING SCHEDULE OF NET ASSETS December 31,2004 With Comparative Totals For December 31, 2003 Statement 62 Capital Equipment Operating Replacement Totals Account Account 2004 2003 Assets Current assets: Cash and cash equivalents $271.827 $34,238 $306,065 $185,621 Receivables: Accounts (net of allowance for uncollectibles) 2,281 Interest 252 252 236 Inventory - at cost 49,402 49,402 50,382 Total ellrrent assets 321,229 34,490 355,719 238,520 Noncurrent assets: Capital assets: Buildings 371,383 371,383 371,383 Improvements other than buildings 119,846 119,846 119,846 Machinery and equipment 77 ,044 77 ,044 77 ,044 Total capital assets 568,273 0 568,273 568,273 Less: Accumulated depreciation (476,161) 0 (476,161) (444,112) Total capital assets (net of accumulated depreciation 92,112 92,112 124,161 Total noncun'ent assets 92,112 0 92,112 124,161 Total assets 413,341 34,490 447,831 362,681 Liabilities Current liabilities: Accounts payable 12,239 12,239 8,340 Accrued salaries and withholdings payable 5,356 5,356 2,227 Compensated absences payable - current 865 865 651 Total current liabilities 18,460 0 18,460 11 ,218 Noncurrent liabilities: Compensated absences payable - noncurrent 28,064 28,064 26,127 Total liabilities 46,524 0 46,524 37,345 Net Assets Invested in capital assets, net of related debt 92,112 92,112 124,162 Unresnicted 274,705 34,490 309,195 201,174 Total net assets $366,817 $34,490 $401,307 $325,336 165 CITY OI<' COLUMBIA HEIGHTS, MINNESOTA CENTRAL GARAGE FUND SUBCOMBlNlNG SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS For The Year Ended December 31, 2004 With Comparative Totals For The Year Ended December 31, 2003 Statement 63 Operating Account Capital Equipment Replacement Account Totals 2004 2003 Operating revenues: Charges for services: Services to departments Use of space Charges for sales: Sales of gasoline Total operating revenues $198,020 $ - $198,020 $200,013 241,129 241,129 219,207 75,939 75,939 61,298 515,088 0 5] 5,088 480,518 318,195 318,195 322,884 32,049 32,049 35,657 350,244 0 350,244 358,541 164,844 0 164,844 121,977 Operating expenses: Cost of services and space Depreciation Total operating expenses Net income from operations Nonoperating revenues (expenses): Investment income: Interest and dividends Change in fair value Miscellaneous revenues Total nonoperating revenues (expenses) 1,193 1,193 1,084 (51) (51) (519) 485 485 2,589 485 1,142 1,627 3,154 ] 65,329 1,]42 166,471 ]25,131 4,000 4,000 4,000 (94,500) (94,500) (94,500) (94,500) 4,000 (90,500) (90,500) 70,829 5,142 75,971 34,631 295,988 29,348 325,336 290,705 $366,817 $34,490 $401,307 $325,336 Net income before transfers Transfers in Transfers out Total transfers Change in net assets Net assets - beginning Net assets - ending 166 CITY OI<' COLUMBIA HEIGHTS, MINNESOTA CENTRAL GARAGE FUND SUBCOMBINlNG SCHEDULE OF CASH FLOWS for The Year Ended December 31,2004 With Comparative Totals For The Year Ended December 31, 2003 Statement 64 2004 2003 $517,369 $480,690 (165,285) (156,820) (142,751) (149,226) 485 2,589 209,818 177 ,233 4,000 4,000 (94,500) (94,500) (90,500) (90,500) Cash flows from operating activities: Cash received from interfund goods & services provided Cash paid to suppliers for goods and services Cash payments to employees for services Miscellaneous revenues Net cash t10ws fi'om operating activities Cash flows from noneapital financing activities: Transfers in Transfers out Net cash flows fi'om noncapital financing activities Cash flows from investing activities: Investment income: Interest and dividends Change in fair value Net cash flows from investing activities 1,178 1,080 (52) ( 519) 1,126 561 120,444 87,294 185,621 98,327 $306,065 $185,621 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 $164,844 $121,977 Adjustmcnts to reconcile operating income 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 aecmed salaries and withholdings payable Increase (decrease) in compensated absences payable Total adjustments 485 2,589 32,049 35,657 2,281 172 980 15,977 3,899 (1,956) 3,129 834 2,151 1,983 44,974 55,256 $209,818 $177,233 Net cash flows from operating activities 167 CITY o.F COLUMBIA HEIGHTS, MlNNESOTA DATA PROCESSING FUND SUBCOMBINING SCHEDULE OF NET ASSETS December 31, 2004 With Comparative Totals For December 31, 2003 Statement 65 Capital Equipment Operating Replacement Totals Account Account 2004 2003 Assets Current assets: Cash and cash cquivalents $722,557 $29,078 $751,635 $625,959 Interest receivable 227 227 244 Total current assets 722,557 29,305 751,862 626,203 NoncuITent assets: Capital assets: Machinery and equipment 38,844 38,844 26,139 Total capital assets 38,844 0 38,844 26,139 Less: Accumulated depreciation (26,492) (26,492) (26,139) Net capital assets (net of accumulated depreciation) ] 2,352 ] 2,352 Total noncurrent assets 12,352 0 12,352 0 Total assets 734,909 29,305 764,214 626,203 Liabilities Current liabilities: Accounts payable 84,758 84,758 5,955 Accrued salaries and withholdings payable 4,835 4,835 3,820 Compensated absences payable - current 269 269 172 Total liabilities 89,862 0 89,862 9,947 Noncurrent liabilities: Compensated absences payable - noncurrent 8,714 8,714 6,901 Total liabilities 98,576 0 98,576 16,848 Net Assets Invested in capital assets, net of related debt 12,352 12,352 Umestricted 623,981 29,305 653,286 609,355 Total net assets $636,333 $29,305 $665,638 $609,355 168 CITY OF COLUMBIA HEIGHTS, MINNESOTA DATA PROCESSING FUND SUBCOMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS For The Year Ended December 31,2004 With Comparative Totals For The Year Ended December 31, 2003 Statement 66 Capital Equipment Operating Replacement Totals Account Account 2004 2003 Operating revenues $ $ $ $ Operating expenses: Cost of services 243,537 243,537 189,671 Depreciation 353 353 7,402 Total operating expenses 243,890 0 243,890 197 ,073 Net income (loss) from operations (243,890) 0 (243,890) (197,073) Nonoperating revenues (expenses): Investment income: Interest and dividends 1,076 1,076 1,121 Change in fair value (46) (46) (537) Total nonoperating revenues (expenses) 0 1,030 1,030 584 Net income (loss) before transfers (243,890) 1,030 (242,860) (196,489) Transfers in 299,143 299,143 310,000 Change in net assets 55,253 1,030 56,283 113 ,511 Net assets - beginning 581,080 28,275 609,355 495,844 Net assets - ending $636,333 $29.305 $665,638 $609,355 169 CITY O.F COLUMBIA HEIGHTS, MlNNESOTA DATA PROCESSING FUND SUBCOMBINING SCHEDULE OF CASH FLOWS For The Year Ended December 31,2004 With Comparative Totals For The Year Ended December 3], 2003 Statement 67 2004 2003 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 ($23,405) (138,404) (16],809) ($58,093) (135,613) (193,706) Cash flows from noncapital financing activities: Transfers in 299,143 310,000 Cash flows from capital and related financing activities: Acquisition of capital assets (12,705) Cash flows from investing activities: Investment income: Interest and dividends Change in fair value Net cash tlows from investing activities 1,093 1,159 (46) (537) 1,047 622 125,676 116,916 625,959 509,043 $751,635 $625,959 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 accmed salaries and withholdings payable Increase (decrease) in compensated absences payable Total adjustments ($243,890) ($197,073) 353 7,402 78,803 (7,779) 1,015 1,898 1,910 1,846 82,081 3,367 ($161,809) ($193,706) Net cash flows from operating activities 170 CITY OF COLUMBIA HEIGHTS, MINNESOTA INSURANCE FUND SUBCOMBINlNG SCHEDULE OF NET ASSETS December 31, 2004 With Comparative Totals For December 31,2003 Statement 68 2004 2003 Assets Current assets: Cash and cash equivalents $1,026,082 $769,819 Rcceivables: Interest 7,272 6,134 Due from other governmental units 15,789 Intcrfund receivable 41,952 Prepayments 40,232 10,853 Total assets 1,115,538 802,595 Liabilities Liabilities Accounts payable 2,195 1,569 Net Assets Unrestricted 1,113,343 801,026 Total net assets $1, I 13,343 $80 I ,026 171 CITY OF COLUMBIA HEIGHTS, MINNESOTA INSURANCE FUND SUBCOMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS For The Year Ended December 3], 2004 With Comparative Totals For The Year Ended December 31, 2003 Statement 69 2004 2003 Operating revenues: Insurance allocation $559,680 $572,40] Recovery of damages 1] ,668 41,059 Total operating revenues 571,348 613,460 Operating expenses: Cost of services and space 269,617 396,937 Claims administration 7,895 4,406 Claims ]4,557 ] ],184 Total operating expenses 292,069 412,527 Net income from operations 279,279 200,933 Nonoperating revenues (expenses): Investment income: Interest and dividends 34,535 28,121 Change in fair value (1,497) (13,473) Total nonoperating revenues (expenses) 33,038 14,648 Change in net assets 312,317 2]5,581 Net assets - beginning 801,026 585,445 Net assets - ending $1,113,343 $801,026 172 CITY O:F COLUMBIA HEIGHTS, MlNNESOTA INSURANCE FUND SUBCOMBINlNG SCHEDULE OF CASH FLOWS F or The Year Ended December 31, 2004 With Comparative Totals For The Year Ended December 31, 2003 Statement 70 2004 2003 Cash flows from operating activities: Cash rcceivcd from intcrfund serviqes providcd Cash received for damages Cash paid to suppliers for goods and services Nct cash flows from operating activitics $559,680 27,457 (320,822) 266,315 $572,401 25,270 (409,334) 188,337 Cash flows fi.om noncapital financing activities: Intcrfund rcceivable advanced to other funds (41,952) Cash flows from investing activitics: Investment income: Interest and dividends Change in fair value Net cash flows fi.om investing activities 33,397 27,412 (1,497) (13,473) 31,900 13,939 256,263 202,276 769,819 567,543 $1,026,082 $769,819 Net increase (decrease) 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) $279,279 $200,933 Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Changes in assets and liabilities: (Increase) decrcasc in duc from othcr govcmmentalunits (Increase) decrease in prepayments Increase (decrease) in accounts payable Total adjustmcnts 15,789 (15,789) (29,379) 1,624 626 1,569 (12,964) (12,596) $266,315 $188,337 Net cash flows from operating activities 173 CITY OF COLUMBIA HEIGHTS, MlNNESOTA COMPENSATED ABSENCES FUND SUBCOMBLNLNG SCHEDULE OF NET ASSETS December 31, 2004 With Comparative Totals For December 31, 2003 Statement 71 2004 2003 Assets Current assets: Cash and cash equivalents $599,624 $594,629 Liabilities Current liabilities: Compensated absences payable - current ]7,431 14,050 NoneulTent liabilities: Compensated absences payable - noncurrent 565,535 563,921 Total liabilities 582,966 577,971 Net Assets Unrestricted 16,658 16,658 Total net assets $16,658 $16,658 174 CITY o.F COLUMBIA HEIGHTS, MINNESOTA COMPENSATED ABSENCES FUND SUBCOMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS For The Year Ended December 3],2004 With Comparative Totals For The Year Ended December 31,2003 Statement 72 2004 Operating revenues: Charges for services $ Operating expenses: Cost of services Change in net assets Net assets - beginning 16,658 Net assets - ending $16,658 175 2003 $ o o 16,658 $16,658 CITY O}' COLUMBIA HEIGHTS, MINNESOTA COMPENSATED ABSENCES FUND SUBCOMBINING SCHEDULE OF CASH FLOWS For The Year Ended December 31, 2004 With Comparative Totals For The Year Ended December 31,2003 Statement 73 2004 Cash flows from operating activities: Cash received from interfund services provided $4,995 Net increase in cash and cash equivalents 4,995 Cash and cash equivalents - January I 594,629 Cash and cash equivalents - December 31 $599,624 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: Changes in assets and liabilities: Increase (decrease) in compensated absences payable Total adjustments $ 4,995 4,995 Net cash flows from operating activities $4,995 176 2003 $30,476 30,476 564,153 $594,629 $ 30,476 30,476 $30,476 AGENCY FUNDS Agency Funds are used to account for assets held by a govermnent in a tmstee or agent capacity for individuals, private organizations, other governments and the like. The City of Columbia Heights had the following Agency Funds during the year: Permit Surcharge Fund - used to account for SAC charges and surcharges collected for and remitted to the State ofIvlinnesota. Escrow Fund - used to account for payroll-related assets and liabilities. 177 CITY OF COLUMBIA HEIGHTS, MINNESOTA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS Dcccmbcr 31,2004 Statement 74 Balancc Balancc January 1, Decembcr 31, 2004 Additions Deletions 2004 Pennit Surcharge Fund Assets Cash and investments $94 $9] ,069 $ $9],163 Liabilitics Due to other governmental units $94 $91,069 $ $91,163 Escrow Fund Assets Cash and invcstmcnts $4,068 $31,806 $ $35,874 Rcccivablcs: Accounts 822 606 216 Due from other governmental units 19,081 19,08] Loans 3],680 3],680 Prepayments 23,884 23,884 Total assets $36,570 $74,771 $32,286 $79,055 Liabilitics Accounts payable $4,579 $3,851 $ $8,430 Duc to other govcmmcntalunits 26,050 42,984 69,034 Deposits 4,350 4,350 Other liabilities 1,591 1,59] Total liabilities $36,570 $46,835 $4,350 $79,055 Total Assets Cash and investments $4,162 $]22,875 $ $J27,037 Receivables: Accounts 822 606 216 Due from other govemmcntal units 19,081 19,081 Loans 31,680 31,680 Prepayments 23,884 23,884 Total assets $36,664 $165,840 $32,286 $170,218 Liabilities Accounts payable $4,579 $3,851 $ $8,430 Due to other governmental units 26,144 134,053 160,197 Deposits 4,350 4,350 Othcr liabilitics 1,591 1,591 Total liabilities $36,664 $137,904 $4,350 $170,218 178 SUPPLEMENTARY FINANCIAL INFORMATION 179 CITY OF COLUMBIA HEIGHTS, MINNESOTA COMBINED SCHEDULE OF BONDS PAYABLE December 31,2004 GENERAL LONG-TERM DEBT ACCOUNT GROUP: G.O. Tax Increment Bonds Capital Appreciation Bonds of 1990: Bonds due on or after September 1, 2006 are caIlable commencing September 1, 2005 and on any March 1 or September 1 thereafter at a price equal to the accreted amount on the date of redemption. Series 2004A Tax Increment Refunding Bonds: Bonds due on or after September 1,2008 are callable commencing March 1, 2008 and on any date thereafter at a price of par plus 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. Series 2003A: Bonds due on or after February 1,2011 are callable commencing February 1, 2010 and on any date thereafter at a price of par plus accrued interest. Total Bonds - General Long Term Debt Account Group 180 Interest Issue Maturity Rate Date Date 9/01 8/23/1990 9/1/2009 6.90% 6.95% 7.00% 7.00% 7.10% 7.10% 7.15% 7.15% 9/01 12/2612004 9/1/2009 2.00% 2.25% 2.50% 2.75% 2/01-8/01 3.45% 3.55% 3.65% 3.80% 3.90% 4.00% 4.10% 4.15% 4.25% 4.30% 5/1/1999 2/1/2010 2/01-8/01 1.1 0% 1.30% 1.60% 2.10% 2.40% 2.75% 3.00% 3.25% 3.40% 3.50% 3.60% 3.70% 3.80% 3.90% 4.00% 2/1/2018 6/1/2003 Exhibit 1 Page 1 of 2 Original Issue $2,399,721 1,985,000 860,000 1,332,828 6,577,549 Balance 1/1/2004 $1,630,288 605,000 1,332,828 3,568,116 Sold $ - 1,985,000 1,985,000 Retired $350,584 95,000 69,205 514,789 181 Balance 12/31/2004 $1,279,704 1,985,000 510,000 1,263,623 5,038,327 Interest Paid in Current Year $569,416 22,735 45,177 637,328 CITY OF COLUMBIA HEIGHTS, MINNESOTA COMBrNED SCHEDULE OF BONDS PAYABLE December 31,2003 PROPRIETARY FUNDS G.O. Utility Revenue Bonds Series 1999B: Bonds due on or after FeblUary 1,2008 are callable commencing February I, 2007 and on any date thereafter at a price of par plus acclUed interest. Series 2003A: Bonds due on or after February 1,2011 are callable commencing February 1,2010 and on any date thereafter at a price of par plus acclUed interest. Total Bonds - Proprietary Funds Total General Obligation Bonds 182 Interest Issue Maturity Rate Date Date 2/01-8/01 5/1/1999 2/1/2010 3.45% 3.55% 3.65% 3.80% 3.90% 4.00% 4.10% 4.15% 4.25% 4.30% 2/01-8/01 6/1/2003 2/1/2018 1.1 0% 1.30% 1.60% 2.10% 2.40% 2.75% 3.00% 3.25% 3.40% 3.50% 3.60% 3.70% 3.80% 3.90% 4.00% Exhibit 1 Page 2 of2 Original Issue $1,935,000 1,267,172 3,202,172 $9,779,721 Balance 1/1/2004 $1,470,000 1,267,172 2,737,172 $6,305,288 Sold $ o $1,985,000 Retired $185,000 o 65,795 250,795 $765,584 183 Balance 12/31/2004 $1,285,000 1,201,377 2,486,377 $7,524,704 Interest Paid in Current Year $56,305 42,951 99,256 $736,584 - This page intentionally left blank - 184 III. STATISTICAL SECTION (UNAUDITED) 185 CITY o.F COLUMBIA HEIGHTS, MINNESOTA GOVERNMENT-WIDE EXPENSES BY FUNCTlON Years 2002 Through 2004 (Unaudited) Culture Fiscal General Public Public and Community Year Government Safety Works Recreation Development 2002 $1,915,920 $3,920,746 $1,659,152 $2,018,571 $1,679,107 2003 1,756,434 3,630,535 2,646,859 1,909,831 1,239,030 2004 1,669,721 3,640,970 2,109,060 1,904,848 2,171,407 Note: Government-wide expenses are not available for years plior to 2002. 186 Table 1 Interest on Long-tenn Stann Debt Water Sewer Refuse Sewer Liquor Total $575,712 $1,561,071 $1,058,721 $1,271,961 $162,499 $6,343,775 $22,167,235 414,297 1,903,331 1,231,594 1,330,272 204,895 6,619,942 22,887,020 387,544 1,637,316 1,219,200 1,321,730 158,374 6,593,578 22,813,748 187 CITY o.F COLUMBIA HEIGHTS, MINNESOTA GOVERNMENT-WIDE REVENUES Years 2002 Through 2004 (Unaudited) Program Revenues Charges Operating Capital Fiscal For Grants and Grants and Year* Services Contributions Contributions 2002 $12,706,748 $] ,272,637 $4,640,568 2003 13,]62,591 1,054,021 895,109 2004 13,598,752 1,724,378 1,881,401 Notes: * Government-wide revenues are not available for years prior to 2002. 188 Table 2 General Revenues Grants and Contributions Not Restricted Unrestricted Gain (loss) Propeliy Tax to Specific Investment on disposal of Taxes Increments Program Earnings Capital Assets Total $4,341,972 $798,446 $3,275,417 $1,577,071 $6,454 $28,619,313 4,306,036 781,439 2,712,408 534,879 103,524 23,550,007 4,989,205 972,208 2,337,386 729,456 26,232,786 189 CITY o.F COLUMBIA HEIGHTS, MINNESOTA GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION (A, C) Years 1995 Through 2004 (Unaudited) Table 3 Culture Fiscal General Public Public and Community Debt Other Year Government Safety Works Recreation Development Service (B) Total 1995 $1,395,395 $2,550,980 $1,012,634 $1,383,686 $ $1,424,633 $833,417 $8,600,745 1996 1,354,292 2,597,866 1,090,257 1,464,130 1,475,888 1,608,033 9,590,466 1997 1,397,129 2,542,3] 0 1,159,933 1,629,154 1,477,]32 1,752,565 9,958,223 1998 1,449,476 2,675,544 1,034,362 1,694,361 ] ,4]4,259 2,975,]43 11,243,145 1999 1,548,597 2,838,483 1,128,793 1,703,320 1,270,994 2,506,097 10,996,284 2000 1,530,423 2,950,642 1,037,534 1,811,671 1,233,723 2,846,566 1l,410,559 2001 ] ,485,904 3,]40,]80 1,013,303 ] ,856,672 ] ,181,193 2,756,581 11,433,833 2002 1,868,475 3,829,178 1,074,477 1,897,690 713,526 1,277,737 1,022,281 11,683,364 2003 1,679,349 3,613,737 1,113,531 1,865,796 285,795 1,080,510 865,984 10,504,702 2004 1,576,233 3,500,668 1,249,704 1,928,173 420,289 1,208,182 649,090 10,532,339 Notes: (A) Includes General, Special Revenue, and Debt Service Fund Types. (B) This column includes the Housing and Redevelopment Authority and the Economic Development Authority. In the basic financial statements, these entities are included under the Community Development fimction as a blended component units of the City, except for 1995 when the Housing and Redevelopment Authority was a discretely presented component unit. (C) Beginning in 2002, the Municipal State Aid Construction, the Downtown Parking Ramp, and the Housing Mortgage Funds were reclassified as Capital Project Funds. 190 CITY O.F COLUMBIA HEIGHTS, MINNESOTA GENERAL GOVERNMENTAL REVENUES BY SOURCE (A,B,C) Years 1995 through 2004 (Unaudited) Table 4 Fiscal Licenses Inter- Charges for Fines and Investment Mise- Year Taxes and Permits governmental Services Forfeitures Income ellaneous Total 1995 $4,167,428 $176,290 $3,755,162 $383,646 $89,138 $321,971 $83,954 $8,977,589 1996 3,840,481 223,758 4,139,604 879,601 125,543 361,401 167,606 9,737,994 1997 4,489,572 202,533 4,302,631 923,485 127,074 443,034 127,862 10,616,191 1998 4,449,833 289,411 5,286,058 1,167,676 121,858 454,776 287,937 12,057,549 1999 4,413,680 401,158 5,282,867 1,029,899 100,161 135,144 242,852 11,605,761 2000 4,809,958 268,014 5,204,427 1,106,613 90,218 754,535 193,270 12,427,035 2001 4,878,197 292,744 6,215,883 1,191,165 87,760 622,688 177,754 13,466,191 2002 4,971,607 277 ,924 4,762,439 1,166,876 84,346 636,329 147,341 12,046,862 2003 4,882,672 281,480 3,569,993 1,125,431 140,378 122,667 175,307 10,297,928 2004 5,689,299 506,319 3,612,175 1,137,429 140,282 247,870 91,973 11,425,347 Notes: (A) Includes General, Special Revenue, and Debt Service Fund Types. (B) This schedule includes the Housing and Redevelopment Authority and the Economic Development Authority as a blended component units of the City, except for 1995 when the Housing and Redevelopment Authority was a discretely presented component unit. (C) Beginning in 2002, the Municipal State Aid Constmction, the Downtown Parking Ramp, and the Housing MOligage Funds were reclassified as Capital Project Funds. 191 CITY OF COLUMBIA HEIGHTS, MINNESOTA TAX LEVIES AND TAX COLLECTIONS Years 1995 Through 2004 (Unaudited) Table 5 Ratio of Collections Percentage Accum. Adjusted of Current of Levy Collections Ratio Delinquent By Market Years Taxes Collected of Prior of Total Taxes to Value During During Years Taxes Collections Accum. Current Year Total Homestead Net Fiscal Fiscal During Fiscal Total to Tax Delinquent Year Collected Tax Levy Credit* Tax Levy Period Period Period Collections Levy Taxes Tax Levy 1995 $2,608,699 $ $2,608,699 $2,571,649 98.6% $12,843 $2,584,492 0.9907:1 $40,418 0.01549: 1 1996 2,754,161 2,754,161 2,726,715 99.0% 78,666 2,805,381 1.0186: 1 33,408 0.01213:1 1997 3,038,144 3,038,144 3,001,061 98.8% 23,818 3,024,879 0.9956:1 48,239 0.01588:1 1998 3,201,434 3,201,434 3,163,132 98.8% 26,314 3,1 R9,446 0.9963:1 77,078 0.02408: 1 1999 3,238,625 3,238,625 3,182,088 98.3% 35,374 3,217,463 0.9935: 1 103,465 0.03195:1 2000 3,295,956 3,295,956 3,267,728 99.1% 73,658 3,341,386 1.0138:1 67,692 0.02054: 1 2001 3,625,552 3,625,552 3,584,080 98.9% 28,580 3,612,660 0.9964:1 77,177 0.02129: 1 2002 4,824,130 570,152 4,253,978 4,194,432 98.6% 34,504 4,228,936 0.9941: 1 74,841 0.01759: 1 2003 4,817,984 607,323 4,210,661 4,135,156 98.2% 44,380 4,179,536 0.9926: 1 82,519 0.01960:1 2004 5,447,260 588,271 4,858,989 4,760,788 98.0% 57,527 4,818,315 0.9916:1 105,861 0.02179: 1 Source: Certification of Truth in Taxation document filed with Anoka County by the City of Columbia Heights and Anoka County Tax Collections Note: Beginning in 2002, the Final Tax Levy includes the Market Value Homestead Credit. 192 CITY OF COLUMBIA HEIGHTS, MINNESOTA ASSESSED VALUE, TAX CAPACITY, AND ESTIMATED ACTUAL VALUE OF ALL TAXABLE PROPERTY (Al Years 1995 Through 2004 (Unaudited) Table 6 Ratio of Total Assessed!Tax Real Property Personal Property Area Wide Allocation (A) Totals Capacity Value Assessed! Estimated Assessed! Estimated Assessed! Estimated to Total Fiscal Tax Capacity Actual Tax Capacity Actual Tax Capacity Actual Estimated Year Value Value Value Value Contribution Distribution Value Value Actual Value 1995 $9,021,129 $541,715,800 $207,658 $4,549,100 ($608,080) $2,759,929 $11,380,636 $546,264,900 2.08% 1996 8,884,233 546,047,800 220,961 4,803,500 (552,406) 2,603,671 11,156,459 550,851,300 2.03% 1997 9,185,608 564,682,300 224,356 4,912,100 (449,141) 2,873,097 11,833,920 569,594,400 2.08% 1998 8,840,736 586,529,700 193,445 4,891,100 (512,532) 2,540,064 11,061,713 591,420,800 1.87% 1999 8,557,027 608,453,400 168,578 4,871,900 (505,598) 2,527,183 10,747,190 613,325,300 1.75% 2000 9,219,621 657,162,700 161,709 4,839,300 (503,719) 2,777,292 11,654,903 662,002,000 1.76% 2001 10,304,905 744,888,200 157,970 4,733,500 (573,922) 3,085,984 12,974,937 749,621,700 1.73% 2002 8,756,307 839,022,200 91,466 4,647,500 (385,323) 1,976,846 10,439,296 843,669,700 1.24% 2003 8,665,656 977,677,300 95,322 4,840,300 (409,330) 2,111,495 10,463,143 982,517,600 1.06% 2004 9,511,823 1,072,678,600 99,232 5,035,800 (379,508) 2,267,401 11,498,948 1,077,714,400 1.07% (A) The Metropolitan Fiscal Disparities Act was tirst implemented tor taxes payable in 1975 tor the seven Metropolitan counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. Forty percent of the increase in cOlmnercial-industrial (including public utility) valuation in each assessment district since 1971 is contributed to an area-wide tax base. Using the factors of population and real property market value, a per capita distribution index is calculated. This index is employed in detennining what proportion ofthe valuation shall be distributed back to each assessment district. Source: Anoka County: Taxes & Taxable Property in the City of Columbia Heights 193 CITY o.F COLUMBIA HEIGHTS, MINNESOTA TAX RATES - PER $100 OF TAX CAPAClTY (A) Years 1995 Through 2004 (Unaudited) Table 7 Year City School County Metro Other (A) Total 1995 0.25686 0.69161 0.29899 0.04370 0.01570 1.30686 1996 0.26460 0.77730 0.29946 0.05280 0.01488 1.40904 1997 0.29018 0.84748 0.28000 0.04605 0.01381 1.47752 1998 0.30991 0.68491 0.27845 0.05183 0.02287 1.34797 1999 0.31925 0.68837 0.29426 0.05685 0.02442 1.38315 2000 0.30147 0.66465 0.28125 0.05326 0.03212 1.33275 2001 0.30564 0.47452 0.26432 0.05354 0.03073 1.12875 2002 0.49114 0.38614 0.34761 0.0287 0.04158 1.29517 2003 0.45272 0.20303 0.34617 0.03158 0.04192 1.07542 2004 0.47888 0.22833 0.32722 0.02866 0.04196 1.1 0505 (A) Foryears 1995-1997: Rice Creek Watershed, Mosquito Control, and Housing and Redevelopment Authority. For years 1998-2004 Rice Creek Watershed, Mosquito Control, Housing and Redevelopment Authority, and County Regional Rail Authority Source: Anoka County: Taxes & Taxable Property in the City of Columbia Heights 194 CITY o.F COLUMBIA HEIGHTS, MINNESOTA CITY TAX LEVY Years 1995 Through 2004 (Unaudited) Table 8 Fiscal City Levy General Year Total Fund Library EDA Special PERA ]995 $3,587,209 $3,] 96,86] $390,348 $ $ 1996 2,754,]6] 2,340,393 413,768 1997 3,038,144 2,517,101 422,043 99,000 1998 3,201,434 2,659,289 443,145 99,000 1999 3,238,625 2,660,059 467,518 111,048 2000 3,295,956 2,676,416 500,244 119,296 2001 3,625,552 2,958,490 547,767 119,295 2002 4,824,130 4,083,494 591,588 137,015 12,033 2003 4,817,984 4,243,830 433,585 140,569 2004 5,447,260 4,928,710 433,585 84,965 Source: Certification of Tmth in Taxation document filed with Anoka County by the City of Columbia Heights. 195 CITY OF COLUMBIA HEIGHTS, MINNESOTA PRINCIPAL TAXPAYERS Table 9 December 31, 2004 (Unaudited) Taxpayer Type of Business %of Total City Tax Capacity Tax Capacity Value Value $171,960 1.50% 127,658 1.11% 91,724 0.80% 83,842 0.73% 77 ,140 0.67% 67,250 0.58% 61,188 0.53% 53,698 0.47% 53,548 0.47% 53,209 0.46% $841,217 7.32% Medtronie, Inc. Medical Manufacturing Bradley Operating LP Commercial Consolidated Reality of Minneapolis Apartments Columbia Park Properties Medical Building Equity Palmers LLC Conllnercialllnd ustrial Columbia Heights Center Mall Crestview Corporation Apartments Xcel Energy Utility Jeffs Bobby & Steves Auto World Commercial Lynde Investment Co Apartments Total Plineipal Taxpayers City Total $11,498,948 Source: Anoka County and Taxable Property in the City of Columbia Heights 196 CITY OF COLUMBIA HEIGHTS, MINNESOTA SPECIAL ASSESSMENT LEVIES AND COLLECTIONS (A) Years 1995 Through 2004 (Unaudited) Table 10 DcfclTcd Spccial Assessmcnts Current Cun'ent Collections Special Collected (A) Balance Fiscal Assessments %of Delinquent Assessments During at End of Year Due Amount Levy Collections Delinquent Fiscal Period Fiscal Period 1995 $159,282 $86,587 54.4% $53,447 $79,057 $25,130 $186,323 1996 64,767 38,470 59.4% 58,495 34,147 70,506 158,269 1997 76,405 32,286 42.3% 21,532 54,706 259,263 558,078 1998 141,739 96,100 67.8% 36,320 63,342 413,629 626,176 1999 136,207 86,221 63.3% 58,414 83,475 279,890 604,210 2000 154,355 100,790 65.3% 73,583 84,483 293,080 636,992 2001 166,451 114,766 68.9% 76,680 80,906 453,679 737,537 2002 199,905 120,665 60.4% 65,149 110,567 421,259 1,073,860 2003 198,497 186,337 93.9% 91,725 28,642 278,606 1,195,738 2004 216,411 200,724 92.8% 24,047 20,265 446,100 1,577,767 (A) The City offers the property owner thc option to prepay defelTcd spccial asscssmcnts dircctly to the City until they become due. Installments that become due (are not prepaid), are celtitled to the County for inclusion on the following year's property tax statement. 197 CITY o.F COLUMBIA HEIGHTS, MINNESOTA COMPUTATION OF LEGAL DEBT MARGIN December 31,2004 (Unaudited) Table 11 Taxable Market Value $956,672,000 Debt Limit Percentage (Note A) Statutory Debt limit Amount of Debt applicable to debt limit: Total bonded debt 2% 19,133,440 Less (Note B): Tax increment bonds Special assessment bonds Revenue bonds 7,524,704 3,264,704 1,773,623 2,486,377 o $19,133,440 Total amount of debt applicable to debt limit Legal debt margin Note A: M.S.A. Section 475.53 (Limit on Debt) Subdivision 1. Generally, except as otherwise provided in Sections 475.5] to 475.75, "no municipality, except a school district or a city of the first class, shall incur or be subjcct to a net debt in excess of 2% of the taxable market value." Note B: M.S.A. Section 475.51 (definitions) Subdivision 4. "Net debt" means the amount remaining after deducting fi'om 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: I. Obligations issued for improvements whieh are payable wholly or pmily from the proceeds of special assessments Icvied 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 Pennanent Improvement Revolving Fund. 5. Obligations issued for the acquisition and bettennent of public water works systems and public lighting, heating or power systems, and of any combination thereof or for any other public convenience from whieh 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. 198 CITY O}<' COLUMBIA HEIGHTS, MINNESOTA RATIO OF NET GENERAL OBLIGATION BONDED DEBT TO ASSESSED VALUE AND NET GENERAL OBLIGATION BONDED DEBT PER CAPITA Years 1995 Through 2004 (Unaudited) Table 12 Ratio of Net Gross Bonded Debt to Net Bonded Fiscal Assessed Bonded Less Debt Net Bondcd Assessed Dcbt Pcr Year Population Value Debt Service Fund Debt Value Capita 1995 18,910 $11,380,636 $8,624,721 $1,422,979 $7,201,742 63.28% 450 1996 18,910 11,]56,459 7,469,721 843,287 6,626,434 59.40% 350 1997 18,910 1] ,833,920 6,314,72] 822,740 5,49],981 46.4]% 290 1998 18,910 11,061,713 5,324,721 644,112 4,680,609 42.31 % 248 1999 18,910 10,747,190 7,174,721 809,379 6,365,342 59.23% 337 2000 18,520 11 ,654,903 6,274,721 1,546,331 4,728,390 40.57% 255 200] 18,520 ] 2,974,937 5,254,721 ] ,71 0,716 3,544,005 27.31% 191 2002 18,520 10,439,296 4,363,206 1,187,646 3,175,560 30.42% 171 2003 18,520 10,463,143 6,305,288 841,666 5,463,622 52.22% 295 2004 18,520 11,498,948 7,524,704 3,728,644 3,796,060 33.01% 205 199 CITY o.F COLUMBIA HEIGHTS, MINNESOTA RATIO OF ANNUAL DEBT SERVICE EXPENDITURES Table 13 FOR GENERAL OBLIGATION BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES Years ] 995 Through 2004 (Unaudited) Ratio of Total Dcbt Servicc to Total General General Fiscal Dcbt Governmental Governmcntal Year Principal Interest Service Expenditures Expenditures 1995 $1,055,000 $357,961 $1,412,961 $8,600,745 16.4% ]996 ],] 55,000 304,268 1,459,268 9,590,466 ]5.2% ]997 1,155,000 246,] 28 1 ,401 , 128 9,958,223 ]4.]% 1998 990,000 190,390 1,180,390 11,243,145 10.5% 1999 945,000 138,167 1,083,167 10,996,284 9.9% 2000 900,000 224,530 1,124,530 11 ,41 0,559 9.9% 200] 1,020,000 144,550 ],164,550 11,433,833 ]0.2% 2002 891,515 599,415 1,490,930 11,683,364 12.8% 2003 657,918 631,552 1,289,470 10,504,702 12.3% 2004 765,584 736,584 1,502,168 10,441,939 14.4% 200 CITY OF COLUMBIA HEIGHTS, MlNNESOTA COMPUTATION OF DIRECT AND OVERLAPPING DEBT December 31,2004 (Unaudited) Table 14 Amount Applicable to Nct Percentage City of General Applicable Columbia Heights Obligation Debt to City Share of Debt Direct debt: City of Columbia Heights $7,524,704 100.0000% $7,524,704 Overlapping debt: Anoka County 84,340,000 4.9404% 4,166,733 Metropolitan Council 200,015,000 0.4830% 966,072 l.S.D. 13 (Columbia Heights) 29,690,000 70.4194% 20,907,520 NE Metro Intemlediate Dist. No. 916 1,715,000 2.5168% 43,163 Total overlapping debt 315,760,000 26,083,489 Totals $323,284,704 $33,608,193 Source: Anoka County Auditor Certificate 201 CITY OF COLUMBIA HEIGHTS, MINNESOTA REVENUE BOND COVERAGE: WATER, SEWER AND STORM SEWER FUNDS Last Ten Years As Applicable (Unaudited) Table 15 Net Revenue Fiscal Gross Operating Available for Debt Service Requirements Year Revenues (1) Expenses (2) Debt Service Principal (3) Interest (3) Total (3) Coverage 1999 $2,733,079 $2,120,759 $612,320 $ $ $ 0.00 2000 3,216,084 2,201,375 1,014,709 95,497 95,497 10.63 2001 3,105,845 2,442,339 663,506 110,000 74,500 184,500 3.60 2002 3,137,928 2,439,443 698,485 175,000 69,496 244,496 2.86 2003 3,103,936 2,866,017 237,919 180,000 63,105 243,105 0.98 2004 3,320,581 2,543,732 776,849 250,795 99,256 350,051 2.22 Notes: The revenue bonds were issued in 1999, thus statistical information is shown from that year on. 1. Total revenues including investment income. 2. Total expenses excluding depreciation and interest expense 3. Includes principal and interest of revenue bonds presented on a cash basis. 202 CITY D.F COLUMBIA HEIGHTS, MINNESOTA PROPERTY VALUE AND CONSTRUCTION (A, B, C) Years 1995 Through 2004 (Unaudited) Table 16 Property Value (A) Constmction (B) Fiscal No. of Building Year Real Personal Total Pennits Issued Value 1995 $541,715,800 $4,549,100 $546,264,900 596 $4,927,970 1996 546,047,800 4,803,500 550,851,300 602 11,910,040 1997 564,682,300 4,912,100 569,594,400 678 5,904,308 1998 586,529,700 4,891,100 591,420,800 869 16,991,747 ]999 608,453,400 4,87] ,900 6] 3,325,300 1,254 24,0] 8,811 2000 657,162,700 4,839,300 662,002,000 794 6,767,183 2001 744,888,200 4,733,500 749,621,700 671 12,547,885 2002 839,022,200 4,647,500 843,669,700 625 8,283,941 2003 977,677,300 4,840,300 982,517,600 577 11,056,530 2004 1,072,678,600 5,035,800 1,077,714,400 493 (C) 49,576,455 (A) Estimated actual values from Table 6. (B) Source: City Lieense/Pennit Clerk (C) 2004 Constmction value includes $30,573,000 for a new water filtration plant that lies within the City of Columbia Heights, but is owned and operated by the City of Minneapolis. 203 CITY OF COLUMBIA HEIGHTS, MINNESOTA MlSCELLANEOUS STATISTICS December 31, 2004 (Unaudited) Table 17 Page 1 of2 Date of Incorporation March 14, 1898 Date of Adoption of City Charter July 21, 1921 Form of Government Fiscal Year Begins Area of City Council-Manager January 1 3.52 Square Miles Miles of Streets and Alleys: Trunk Highways County City Streets Alleys 3.0 6.2 61.8 18.9 Miles of Sewers: Stonn Sewers Sanitary Sewers 33.6 59.0 Waternlain Miles 66.1 Fire Protection: N umber of Stations Number of Employees: Full-time Part-time Paid on-call 1 9 1 30 Police Protection: Number of Stations Number of Employees 1 32 City Employees, including Police and Fire Full-time Part-time Paid on-call Total 102 60 30 192 204 CITY o.F COLUMBIA HEIGHTS, MlNNESOTA MISCELLANEOUS STATISTICS December 31,2004 (Unaudited) Table 17 Page 2 of2 Parks: City Parks Playgrounds County Parle 13 11 I Schools: Senior High Junior High E1emcntary Parochial Elementary 1 1 3 1 Elections (source: City Clerk): 11/02/ 04 City General Election (most recent election): Registered voters Number of Votes Cast Percentage of Registered Voters Voting 12,510 10,039 80.25% 11/05/ 02 City General Election Registered voters Number of Votes Cast Percentage of Registered Voters Voting 10,261 8,405 81.91% Population: 1900 1920 1930 1940 1950 1960 1970 1975 (Mid-Decade Census) 1980 1985 1990 (Census) 2000 (Census) 123 2,968 5,613 6,053 8,175 17,533 23,997 23,316 20,029 19,540 18,910 18,520 205 CITY o.F COLUMBIA HEIGHTS, MINNESOTA DEMOGRAPHIC STATISTICS (Unaudited) Table 18 POPULA TION, HOUSEHOLDS, AND HOUSEHOLD SIZE PROJECTIONS* Source: 2000 Census Source: US Census Bureau, Profile of General Demographic Characteristics: 2000 Source: US Census Bureau, Profile of Occupation, Industry and Class of Worker: 2000 Source: US Census Bureau, Income and Poverty Status in 1999: 2000 Households Household Size (People/Household) Population POPULA TION DEMOGRAPHICS** Num ber 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 INFORMATlON*** Management, professional, and related occupations Service occupations Sales and office occupations Fanning, fishing and forestry occupations Construction, maintenance, transportation and manufacturing occupations INCOME INl<'ORMATlON**** Median income per capita Median income per household Median income per family * ** *** **** 206 8,039 2.30 18,520 Persons 995 1,097 1,105 1,078 J,170 2,663 2,897 2,340 878 842 1,670 1,325 460 18,520 9,629 8,891 $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 IV. SINGLE AUDIT AND OTHER REQIDRED REPORTS SECTION 207 - This page intentionally left blank - 208 IItB Tautges Redpath, Ltd. Certified Public Accountants and Consultants REPORT ON COMPLIANCE WITH MINNESOTA LEGAL COMPLIANCE AUDIT GUIDE FOR LOCAL GOVERNMENTS To the Honorable Mayor and Members of the City Council Columbia Heights, Minnesota We have audited the basic fmancial statements of the City of Columbia Heights, Minnesota, as of and for the year ended December 31, 2004, and bave issued our report thereon dated Apri121,2005. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, and the provisions of the Minnesota Legal Compliance Audit Guide for Local Government promulgated by the State Auditor pursuant to Minnesota Statutes Section 6.65. Accordingly, the audit included such 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 six categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, and miscellaneous provisions. 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, except as described in this report. 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. ttl1 -r~ ~/ '-Il HLB TAUTGES REDPATH, LTD. White Bear Lake, Minnesota April 21, 2005 4810 White Bear Parkway White Bear Lake, Minnesota 55110 1303 South Frontage Road Suite 13 Hastings, Minn~sota 55033 651 426 7000 651 426 5004 Fax 651 4804990 651 426 5004 Fax www.hlbtr.com HlB Tautges Redpath, ltd. is a member of _International. a world-wide organization of accounting firms and business advisors. 209 - This page intentionally left blank - 210 FINDING 2004-1 Criteria: Minnesota Statutes require the City to accept grants, donations and gifts by passing a Council resolution. Minnesota Statute reads as follows: 465.03 Gifts to municipalities. Any city, county, school disnict or town may accept a grant or devise of real or personal property and maintain such property for the benefit of its citizens in accordance with the terms prescribed by the donor. Nothing herein shall authorize such acceptance or usc for religious or sectarian purposes. Every such acceptance shall be by resolution of the governing body adopted by a two-thirds majority of its members, expressing such tenus in full. Condition: The City accepts gifts without a formal Council resolution. Calise: Unknown to the cause ofthe compliance issue. Effect: The city is in noncompliance with this issue and is not meeting the requirements of Minnesota Statute 465.03. Recommendation: We recOlmnend the City accepts grants, donations and gifts by passing a Council resolution. City Management Response: At present, the City is considering what options it has for complying with M.S. 465.03 in a cost effective manner, given the variation in the timing, materiality and nature ofthe various contributions it accepts. 211 - This page intentionally left blank - 212 FINDING 2004-2 Criteria: Minnesota Statutes require the HRA's governing body to designate depositories. Minnesota Statute 118A.02, subdivision 1 reads as follows: 118A.02 Depositories; investing: sales, proceeds, immunity. Subdivision 1. Designation; delegation. (a) The governing body of each government entity shall designate, as a depository of its funds, one or more financial institutions. (b) The governing body may authorize the treasurer or chief financial officer to: (1) designate depositories of the funds; (2) make investments offunds under sections lI8A.OI to II8A.06 or other applicable law; or (3) both designate depositories and make investments as provided in this subdivision. Condition: Depositories were not designated by the governing body. Calise: Unknown to the cause ofthe compliance issue. Effect: The HRA is in noncompliance with this issue and is not meeting the requirements of Minnesota Statute 118A.02, subdivision 1. Recommendation: We recOlmnend the HRA ensure that they are following state statutes by addressing new depositories. City Management Response: The depository designation required under M.S. 118A.02 will be placed on the agenda of an upcoming meeting of the Housing and Redevelopment Authority. 213 - This page intentionally left blank - 214 FINDING 2004-3 Criteria: Minnesota Statutes require that a governmental entity show prompt payment of all bills, either by payment within the time period set by the tenns of the contract or within the standard payment period which is 35 days from receipt of goods or invoice (whichever is later) for governing boards who meet at least once a month. For bills paid after this time period, the City must calculate and pay interest as requested by law. Minnesota Statute 471.425, subdivisions 2 and 4 read as follows: 471.425 Prompt payment of local government bills. Subd. 2. Payment required. A municipality must pay each vendor obligation according to the tenns of the contract or, ifno contract tenns apply, within the standard payment period unless the municipality in good faith disputes the obligation. Standard payment period is defined as follows: (a) For municipalities who have governing boards which have regularly scheduled meetings at least once a month, the standard payment period is defined as within 35 days of the date of receipt. (b) For municipalities whose governing boards do not regularly meet at least once a month, the standard payment period is defmed as 45 days after receipt of the goods or services or the invoice for the goods or services, whichever is later. (c) For joint powers organizations organized under section 471.59, the standard payment period is within 45 days of the date of receipt. Subd. 4. Payment of interest on late payments required. (a) Except otherwise provided in this section, a municipality shall calculate and pay interest to a vendor if the municipality has not paid the obligation according to the terms of the contract or, ifno contract terms apply, within the standard payment period as defined in subdivision 2. The standard payment period for a negotiated contract or agreement between a vendor and a municipality which requires an audit by the municipality before acceptance and paymcnt of the vendor's invoice shall not be begun until the completion of the audit by the municipality. (b) The rate of interest calculated and paid by the municipality on the outstanding balance of the obligation not paid according to the terms of the contract or during the standard payment period shall be 1- 1/2 percent per month or part of a month. (c) No interest penalties may accrue against a purchaser who delays payment of a vendor obligation due to a good faith dispute with the vendor regarding the fitness of the product or service, contract compliance, or any defect, error or omission related thereto. Ifsuch delay undertaken by the municipality is not in good faith, the vendor may recover costs and attorney's fees. (d) The minimum monthly interest penalty payment that a municipality shall calculate and pay a vendor for the unpaid balance for anyone overdue bill of $100 or more is $10. For unpaid balances of less than $100, the municipality shall calculate and pay the actual interest penalty due the vendor. Condition: The City did not pay certain invoices related to a development project. Calise: City policy requires a signed contract to be received before payment of invoices. For this development project, a signed contract was not received. 215 - This page intentionally left blank - 216 Effect: The city is in noncompliance with Minnesota Statute 471.425, subdivisions 2 and 4. Recommendation: We recommend the City implement procedures to conununicate required statutes. City Management Response: The vendor obligation was paid within 30 days ofthe City obtaining the signed contract required under City policy. 217 - This page intentionally left blank - 218 FINDING 2004-4 Criteria: Minnesota Statutes require that a governmental entity not using an electronic time recording system have the timekeeper, supervisor, or other officers or employees having knowledge of the facts, signed a declaration indicating the facts recited on the payroll are conect to the best ofthe declarant's infonnation and belief. Minnesota Statute 412.271, subdivision 2 reads as follows: 412.271 Disbursements. Subd.2. Claims, payment; electronic time recording. (a) Exccpt for wages paid on an hourly or daily basis, whcre a claim for money due on goods or scrvices furnished can be itemized in the ordinal}' course of business the person claiming paymcnt, or the claimant's agent, shall prepare the claim in written items and sign a declaration that the claim is just and COlTect and that no part of it has been paid; but the council may in its discretion allow a claim prepared by the clerk prior to such declaration by the claimant, if the declaration is made by an endorsement on the order-check by which the claim is paid as provided below. (b) Whenever work for which wagcs are to be paid on an hourly or daily basis is done by employees of the city, the clerk shall keep a payroll giving the namc of each employee and the number of hours or days worked by each and the timekeeper, supervisor, or other officers or employee having knowledge of the facts shall sign a declaration that the facts recited on the payroll are correct to the best of the declarant's infolmation and belief; and when any claim for wages listed on a payroll is paid, the employee shall sign a declaration, which may be a part of the payroll, to the effect that the employee has received the wages and donc the work for which wagcs have been paid. The declarations relating to claims or payrolls shall bc in substantially the following fonn: "1 declare under the penalties ofpeljury (here insert, if claimant: that this claim is just and correct and no part of it has been paid; if timekeeper, supervisor, officer or employee having knowledge of the facts; that to the best of my information and belief the items of this payroll are correct; if employee who has been paid: that 1 have received the wages stated on this payroll opposite my name and have done the work for which the wages were paid.) Date Signed The effect of this declaration shall be the same as if subscribed and swom to under oath. (c) Notwithstanding the procedural rcquirements of paragraph (b), a city may use electronic time recording systems if the governing body of the city adopts policies to ensure that the timekeeping and payroll methods used are accurate and reliable. Condition: The City did not have the payroll declaration signed for each pay period. Calise: City staff was unaware of the Minnesota Statute requiring a signed declaration. Effect: The City is in noncompliance with statutes of the State of Minnesota. 219 - This page intentionally left blank - 220 Recommendation: We recommend the City implement procedures to fulfill required statutes. City Management Response: The City prospectively incorporated the timekeeper/supervisor declaration from M.S. 412.271 subdivision 2(b) into its payroll documentation for hourly wages in 2005. 221 - This page intentionally left blank - 222 If liB Tautges Redpath. Ltd. Certified Public Accountants and Consultants REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and Members of the City Council Columbia Heights, Minnesota We have audited the financial statements of the governmental activities, the business type activities, each major fund, and the aggregate remaining fund information of the City of Columbia Heights, Minnesota as of and for the year ended December 31,2004, which collectively comprise the City of Columbia Heights, Minnesota's basic financial statements and have issued our report thereon dated April 21, 2005. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to [mancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City of Columbia Heights, Minnesota's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the [mancial statements and not to provide an opinion on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial rep0l1ing 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 financial data consistent with the assertions of management in the financial statements. Reportable conditions are described in the accompanying schedule of findings and questioned costs as item 2004-1. 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 caused by error or fraud in amounts that would be material in relation to the 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. 4810 White Bear Parkway White Bear Lake, Minnesota 55110 651 4267000 651 4265004 Fax 1303 South Frontage Road Suite 13 Hastings, Minnl;Jsota 55033 651 4804990 651 4265004 Fax www.hlbtr.com HLB Tautges Redpath, Ltd. is a member of n International. a world-wide organization of accounting firms and business advisors. 223 - This page intentionally left blank - 224 However. we believe that none of the reportable conditions described above is 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 ColumbiaJIeights, Minnesota ill a separate letter dated April 21. 2005. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Columbia Heights, Minnesota's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However. providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or .other matters that are required to be reported under Government Auditing Standards. 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. tn.1I ~ ~r t /:J HLB TAUTGES REDPATH. LTD. White Bear Lake. Minnesota April 21, 2005 ? ?__'l - This page intentionally left blank - 226 IIRB Tautges Redpath, Ltd. Certified Public Accountants and Consultants 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 (OM B) Circular A-I33 Compliance Supplement that are applicable to each of its major federal programs for the year ended December 31, 2004. 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; ~nd OMB Circular A-I33, 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 651 4267000 651 4265004 Fax 1303 South Frontage Road Suite 13 Hastings, Minnesota 55033 6514804990 6514265004 Fax www.hlbtr.com HLB Tautges Redpath, Ltd. is a member of InIlnternational, a world-wide organization of accounting firms and business advisors. 227 - This page intentionally left blank - 228 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, 2004. However, the results of our auditing procedures disclosed instances of noncompliance with those requirements, which are required to be reported in accordance with OMB Circular A-133 and which are described in the accompanying schedule of findings and questioned costs as item 2004-5. 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 perforn1ing 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 detennine 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. 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 oflaws, 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 nonnal course of perfonning 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 repOlied to the management of the City of Columbia Heights, Minnesota, and the Columbia Heights Economic Development Authority, in separate reports dated April 21, 2005. Schedule of Expenditures of Federal Awards We have audited the financial statements ofthe governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information ofthe City of Columbia Heights, Minnesota as of and for the year ended December 31, 2004, and have issued our report thereon dated April 21, 2005. Our audit was perforn1ed for the purpose of forming opinions on the financial statements that collectively comprise the City of Columbia Heights, Minnesota's basic financial statements taken as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part ofthe basic financial statements. Such infonnation has been subjected to the auditing procedures applied in the audit ofthe 229 - This page intentionally left blank - 230 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. !/z.a r~~, t~ HLB TAUTGES REDPATH, LTD. White Bear Lake, Minnesota April 21, 2005 231 - This page intentionally left blank - 232 CITY OF COLUMBIA HEIGHTS, MINNESOTA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended December 31, 2004 SECTION I - SUMMARY OF AUDIT RESULTS 1. The Independent Auditor's Report expresses an unqualified opinion on the basic financial statements of the City of Columbia Heights, Minnesota. 2. There was one reportable condition disclosed during the audit ofthe financial statements as reported in the Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Perfonned in Accordance with Government Auditing Standards. The above condition was not determined to be a material weakness. 3. No instances of noncompliance material to the [mancial statements ofthe City of Columbia Heights, Minnesota were disclosed during the audit. 4. One reportable condition relating to the audit of the major federal award programs is reported in the Report on Compliance with Requirements Applicable to each Maior Program and Internal Control over Compliance in Accordance with OMB Circular A- 133. The above condition was not determined to be a material weakness. 5. The auditor's repOli on compliance for the major federal award programs for the City of Columbia Heights, Minnesota expresses an unqualified opinion. 6. 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. 7. COlmnunity Development Block Grant - Entitlement Grant - CFDA #14.218 was tested as a major program. 8. The threshold for distinguishing Types A and B programs was $300,000. 9. The City of Columbia Heights, Minnesota was determined to be a low-risk auditee for 2004. 233 - This page intentionally left blank - 234 CITY OF COLUMBIA HEIGHTS, MINNESOTA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended December 31, 2004 SECTION II - FINANCIAL STATEMENT FINDINGS 2004-1: 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 and 2002, 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. In 2005, the City needs to implement a system of independent verification of class rosters. SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 2004-5: Communitv Development Block Grant Criteria: The Community Development Block Grant requires that the local government entity check for debarred/suspended contractors by use of the government website. Condition: Per inquiry and analysis, this procedure has not been performed by the EDA. Calise: Per the Director of Community Development, a check for a valid state license is made, but EDA staff were unaware of the website. The threshold for this requirement was recently reduced from $100,000 to $25,000. Effect: They could possibly be working with a debarred/suspended contractor and could be out of compliance with rules to those CDBG federal funds. 235 - This page intentionally left blank - 236 CITY OF COLUMBIA HEIGHTS, MINNESOTA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended December 31, 2003 Recommendation: The EDA needs to have procedures in place to check for these debalTed/suspended contractors and show support for those procedures. EDA Management Response: A procedure to document a search ofthe federal debalTed/suspended contactors list has been added to the Economic Development Authority's contracting process beginning in 2005. 237 - This page intentionally left blank - 238 CITY OF COLUMBIA HEIGHTS, MINNESOTA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended December 31, 2004 Fcderal Funding Sourccl Pass Through Agencyl Program Title u.s. Department of Justice: Direct: Local Law Enforcement I3lock Grant Bulletproof V est Partnership Program Passed-through State of MN Department of Economic Security: Juvenile Accountability Incentive Block Grant u.s. Department of Rousing and Urban Development: Direct: Operating Subsidy Capital Funds Program (CFP) Passed-through Anoka County: Community Development Block Grant - EntiUement Grant (CDBG) u.s. Department of Transportation Passed-through State ofMN Depmiment of Public Safety: ACE Nitecap Passed-through City of Coon Rapids, Minnesota: Safe and Sober u.s. Department of Homeland Seeul"ity - Federal Emergency Management Agency: Direct: Assistance to Firefighters Grant Program Passed-through Anoka County: Emergency Management Assistance Grant Passed-through State of MN Department of Public Safety: Citizen Corps Grant Program u.s. Department of Edllcation: Passed-through Columbia Heights Independent School District #13: Children Families and Learning - 21 st Century Grant u.s. Depa..tment of Health and Human Services: Passed-through State ofMN Department ofHeallh: Anned and Alert Grant Total Federal Expenditures 239 Federal CFDA Number 16.592 16.607 16.523 14.850 14.872 14.218 20.600 20.600 97.044 97.042 97.004 84.287 93.136 2004 Federal Expenditures $12,166 2,100 10,068 103,328 127,737 525,544 3,550 6,946 225,000 5,226 1,043 57,432 5,000 $1,085,140 - This page intentionally left blank - 240 CITY OF COLUMBIA HEIGHTS, MINNESOTA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended December 31, 2004 Notes to the schedule of expenditures of federal awards lVole 1. Basis of Presentation The above schedule of e"l'eaditures offederal awards includes the fedcral grant activity of the City of Columbia Heights, Mi1111esota (including its component nnits) and is presented on the accrnal basis of accounting. The information in tlus schedule is presented in accordance with the reqnirements 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 tile preparation of, tile basic financial statcmcnts. Note 1. Suhrecipients Dnring 2004, thc City of Columbia Height' did not pass lederal money to subrecipients. Note 3. Reporting Entity The City of Columbia Heights, Minnesota, for purposes of this schedule includes all funds ofthc primary govemmcnt ns defined by GASB Statement No. 14, l1/e Finallcial Rep0l1illg Entity. This schedule also includes the Housing and Redevelopment Authority (llRA), and the Economic Development AutllOrity (EDA) which are tile sole component units of the City. Nole 4. Schedule of Stale men I and Cerllficalion a/Actual J.\lodernclIlion Costs: AlUmal Contribntions FY 2002 FY 2003 FY 2004 MN 46P10550102 JIlL'\! 46P10550103 ]I,ll'\! 46P105501OJ Amendment # 16 .'lll1endment # 17 Amendment # 17 $124,349 $102,313 $118,489 124,349 $0 $102,313 $118.489 $124,349 $50,695 $ 61,141 63.208 64.529 $0 ($13,834 ) $0 1. The actualmodemization costs are as follows: Funds approved Fund expended Excess of funds advanced ( expended) Funds advanced - HUD GrUllts Funds expended: In prior years In current year Excess nf funds advanced (expended) 2. The distribution of costs hy project as shown on tile Final Statement ofDevelopmeut Cost budget, accompUllying the Actual Development cust Certificate submill~d to IIUD for approval, is in agrt:~ment with the City's records. 3. Allmodemization costs have been paid and all related liabilities have been discharged throngh payment. 241 - This page intentionally left blank - 242 Tautges Redpath, Ltd. Certified Public Accountants and Consultants REPORT ON SUPPLEMENTARY INFORMATION - FINANCIAL DATA SCHEDULE 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 31,2004, and have issued our report thereon dated April 21, 2005. Our audit was performed for the purpose offorming 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. ~4 ~ ~/(h HLB TAUTGES REDPATH, LTD. White Bear Lake, Minnesota April 21, 2005 4810 White Bear Parkway White Bear Lake. Minnesota 55110 6514267000 6514265004 Fax 1303 South Frontage Road Suite 13 Hastings, Minnesota 55033 6514804990 651 4265004 Fax www.hlbtr.com HlB Tautges Redpath. ltd. is a member of !I International, a world-wide organization of accounting firms and business advisors. 243 - This page intentionally left blank - 244 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, 2004 Public Housing Public Housing Operating Capital FWld Linc Subsidy Program Itcm Account Description 14.850 14.872 Revcnue: 703 Net tenant rental revenue $283.1 73 $ - 704 Tenant revenue - other 9,335 706 HUD PHA grants 103,328 127,737 711 Investment income - unrestricted 15,887 700 Total revenue 411,723 127,737 Expenses: 911 Administmti ve salaries 17,064 912 Auditing fees 1,438 913 Outsidc managemcnt fees 112,873 916 Othcr operating - administrativc 6,627 924 Tenant services - other 46 931 Watcr 10,795 932 Electricity 34,584 933 Gas 4l,088 938 Other utilities expense 13,170 942 Ordinary maintenance and operations 5l,186 961 Insurance premiums 29,022 962 Other general expenses 4,837 963 Paymcnts in licu oftaxes 19,054 969 Total operating expeuses 341,784 0 974 Dcprcciation 96,818 900 Total expenscs 438,602 0 1001 Operating trans rers in 127,737 1002 Operating transfers out (127,737) 1010 Total other financing sources (uses) 127,737 (127,737) 1000 Excess (deficiency) oflotal revenne over (under) total expenses 100,858 0 Memo accowJt infimnation: 1103 Bcginning cquity 1,339,725 1104 Prior period adjustments. equity transfers and correction of errors 289,972 N/A 1113 Maximum annual contributions commitmcnt (pcr ACC) N/A N/A 1115 Contingency reserve, ACC program reserve N/A N/A 1116 Total annual contributions available N/A N/A 1120 Unit months available 1,212 N/A 1121 Number ofWlit months leased 1,204 N/A Note 1: Prior Period Acgustmentto U.S. Department of Housing and Urban Development Financial Data Schedule: Land Buildings Fumiture, equipment and machinery - dwellings Accumulated depreciation Financial Data Schedule line 1104, Prior period adjustment - correction of an elTor $48,675 (1,795,568) (158,522) 2,195,387 $289,972 245 - This page intentionally left blank - 246 CITY OF COLUMBIA HEIGHTS, MINNESOTA AUDIT MANAGEMENT LETTER December 31 , 2004 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 2004 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 e 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 2 contains an Executive Summary of our recommendations with page references to the areas discussed. June 10,2005 Iftlt ~~ ~I ~f;J . HLB TAUTGES REDPATH, LTD. Certified Public Accountants 4810 White Bear Parkway White Bear Lake, Minnesota 55110 1303 South Frontage Road Suite 13 Hastings, Minnesota 55033 651 426 7000 651 426 5004 Fax 651 480 4990 651 426 5004 Fax www.hlbtr.com HLB Tautges Redpath, Ltd. is a member of _International, a world-wide organization of accounting firms and business advisors. City of Columbia Heights, Minnesota ^ ..rli+ I\JI"'n....nr\t'..nnn+ I 1"\++1"\"- r\UUIL 'VICl"Cl~v'llvllL L-vLLv' Report Summary REPORT SUMMARY Several rep0l1s are issued in conjunction with the audit. A very brief summary is as follows: Report Name Elements of Report Overview Required Reports Comprehensive Annual Financial . Financial statements . Unqualified ("clean") opinion Report (CAFR) . Footnotes on the Basic Financial . Supplemental information Statements Report OIl Compliance and Internal Results of testing . No compliance findings Control . Internal controls over financial . One reportable condition in reporting internal control . Compliance with laws, regulations, contracts and !!rants State Legal Compliance Report . Results of testing certain . Four compliance findings provisions of Minnesota Statutes Schedule of Expenditures of Required because City's federal It One compliance finding Federal A wards and Independent program expenditures exceed Auditor's Reports $500,000 (Federal Single Audit) . Compliance and internal control reports on federal programs . Schedule of federal expenditures and other required reports - City of Columbia Heights, Minnesota Audit Management Letter 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 - 98% for 2004. Page 6 The General Fund balance increased $717,000 during 2004. The City budgeted a decrease of $42,000, however, revenues were greater than budget by $295,000 and expenditures were less than budget by $477,000. Page 15 The Library Fund balance at December 31,2004 was not sufficient to fulfill the reserve requirement for working capital. The shortfall was $74,000. Page 19 We have issued a separate management report addressed to the EDA/HRA. Page 20 The City's Comprehensive Annual Financial Report received the Certificate of Achievement for Excellence in Financial Reporting. Page 40 We have a summary and recommendation of certain internal control matters. Page 41 - City of Columbia Heights, Minnesota ^..,...Ii+ "An~I"'toI""tn...........I""\t'"'\+ 1"'++1""\'" /""'\UUIL iVIOllO\::lvlllvl1L L..vLlvl Government-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 2004 Comprehensive Annual Financial Report. The following comments relate to these Financial Statements. Summary of Financial Activity A summary of financial activity for 2004 is as follows: Revenue Expcmlitures I ncrease in Fund Balancel Cash ilnd Other ami Other TrunsfcP.i Fund Balance! Net Assets Balance CAFR Fund Sources Uses (Net) Net Assets 12/31/04 12/31/04 ~ General $8.147.812 $7.536,202 $ 11I5 ,268 $716,87K $4,140,110 $3,895,759 88 Special Revenue: Communily Development Fund 3,725 419,722 444.807 28,810 111.154 123,825 110 Cable Television 135,347 9,1135 (11I9,330) 16.982 12,296 III Library 6119,613 595,438 (10.863) 3,312 15,845 44,606 112 D.A.R.E Program 50 4,834 9,000 4.216 27.185 27,475 113 Special Projects 26,819 26,819 36.995 61,164 114 C.H.A.S.E 2.299 (7,808) (5.509) 53,579 53,076 115 Twenty-First Century Grant 67,532 58,1156 7.808 17.284 14,348 12.317 116 Confiscated Property 6,875 7,637 (762) 14.337 14.337 117 Local Law Enforcement Block Grant 13,1167 14.269 (1.202) 3,464 3.365 118 Juvenile Justice Grant 1II.0ti8 1ll.7'H (725) 120 Police GranLs - Other 1,043 1.1143 121 Recreation Contributed PrqjecLs 39,247 7.835 (6,1100) 25,412 124.130 124,1311 122 Contrihutcd Projecl~ 1,938 2.890 (952) 23,622 23,622 123 Hex Benefit 10,334 6.746 3,588 41,243 46.953 124 Housing and Redevelopment Authority: Parkvicw Villa Nmth 539,4611 444.555 94,905 507,830 590,467 128 Parkvicw Villa South 214,497 201,179 13,318 125.622 168.377 129 Renlal Housing 2.472 2,606 (134) 53,290 52.874 130 EDA: Economic Developmenl Aulhority Admin 21l1,768 750 (222.648) (12.630) 78,049 118,581 91 Buisness Revolving Luan Fund 16,744 16.744 369,999 306,217 132 Anoka County CDBG 525,544 567 (525.544) (567) (29,636) 90 - City of Columbia Heights, Minnesota Audit Management Letter Government-Wide Financial Statements Revenue ExpemJitures Increase in Fund Balance! Cash and Other and Other Tr:.mslcrs Fund Balance! Net Assets Balance CAFR Fund Sources Uses (Net) Net Assets 12131/04 12131/04 ~ Debt Service: Shcflickl TIF Redevelopment $53.550 $23,605 $ $29,945 ($434.473) $34,35K 45 Tax Im:rcmcnl Bnnlls 794,227 13,647 (920,K89) ( 140.3(9) 118,243 81.260 135 Capital Appredatinn Bonus of 199tl 1.953,872 956,089 1,686,214 2,683.997 2,683.997 2,666,721 44 Multi-Use Rcdl.!vclopmCnl Plan 21.792 11.466 10,326 (36,096) 135 Tax lncrcmenl Refunding Bomls of 2004A 35,979 544 35.435 35.435 35.435 135 G.O. Improvement 1999A 19,115 118,109 50,342 (48,652) 584,944 5S0,737 135 G.O. ImprovcmcntIRcvcnuc 2003A 114,154 460,335 346,ISI 342,121 342,121 135 Capital Project: MSA Stutc Aid Street 463,32 I 150.438 (304,806) 8,077 (l36,K21) 44 Capital Improvements General Government Buildings 117.456 60,500 177,956 3,373,534 3,347,694 45 Capital Equipment Rcpluccmcnl General GtlVCrnmcnt 419,lK9 3113,052 100,000 216,137 4,759,114 4,722.490 45 Capital Improvements PIR Funt..! n6,633 1.446,726 (267,5IlS) (927,601) 87,765 193,509 45 Capital Improvement 5,06K 373 65,O51l 69,745 730,1l31 129,915 141 Downtown Parking Maintcnum;e 25,25K 7.3S3 (530,000) (512,125) 22K,1 S3 227,572 141 Capital Sheffield Redevelopment (270,000) (270,000) 213,133 213,133 141 Capitallmpmvement Parks H8,541 7.293 6,125 K7,373 I,OJ3,ln 955,595 141 Capitallmpmvement PVVS 25,544 (765,325) (739,nl) 25,544 19,922 142 Capital Improvement Development 675,936 1,J56,04K 1,361,544 KSI,432 1,506,010 19K,745 45 Infrastructure Replacement 6,940 H7,224 52,176 (28,108) 144,598 51,463 142 Capital Equipment Fire 19,2K4 323,142 (303,K5K) 35 I ,624 347,379 142 Capital Equipment Cable TV 11,153 11,153 317,479 292.702 142 CUpilU1lluilding Library 200,000 198,397 143 TIF Dislriel #2 53 (53) (2,296) 143 TIF Medtronic 123,615 46,756 76,K59 277,236 275,562 143 TIF Scaucred Site 26,295 1,045 25,250 10,132 17 ,(m 143 TIF Tmnsition Block 65,051 11.740 53,31 I 57,325 57,227 143 Enterprise: Water 1,792,025 1,635.364 (134,434) 22,227 2,719,020 471,732 147 Sewer 1.132,5KO 1,207,227 (131,914) (206.561) 5,510.349 K62,436 150 Refuse 1,313,945 1,2K5.725 (IK9,912) (161.692) 436,780 IK7,IOI 153 Storm Sewer 400,S60 171.124 (K,769) 220,967 563,n5 119,466 156 Liquor 7,04K,928 6,5n,437 (212,062) 258,429 3,321,622 2,OKI,51K 159 Internal Service: Central Garage 516,766 350,295 (90.500) 75,971 401,307 306,065 166 Data Processing 1,076 243,936 299,143 56,283 665,638 751,635 169 Insunmce 605,8K3 293.566 312,317 1,113,343 1,026,082 172 Compensated Absences 16,658 599,624 175 Total $29,135,136 $25,K68,71K $0 $3,266,4IH $36,922,104 $27,061,774 - City of Columbia Heights, Minnesota ^ 1.r1it rlll.......an"......"....t I "tt"v I\UUIL IVla11 ~vlIICIIL L-'tJLLCiI Government-Wide Financial Statements Property Taxes Receivable Delinquent taxes receivable related to the general property tax levy increased from $84,462 at December 31, 2003 to $105,861 at December 31, 2004. Tax collections were 98% of the 2004 levy. 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 2003 and 2004 is as follows: 2003 2004 Market value $977,677,300 $1,072,678,600 Tax capacity values: Real estate $8,665,656 $9,511,823 Personal property 95,322 99,232 Subtotal 8,760,978 9,611,055 Fiscal disparity contribution (409,330) (379,508) Fiscal disparity distribution 2,111,495 2,267,401 Total $10,463,143 $11,498,948 Tax capacity rates 45.272 47.888 Tax levy $4,817,984 $5,447,260 - City of Columbia Heights, Minnesota Audit ivianagement Letter Government-Wide Financial Statements Special Assessments Receivable Special assessments receivable consisted of the following amounts at December 31, 2003 and 2004: Description De]inquent Deferred Unremitted December 31, 2003 2004 $28,642 $20,265 1,]95,738 1,577,765 6,334 7,168 Increase (Decrease) ($8,377) 382,027 834 Tota]s $1,230,714 $1,605,198 $374,484 Delinquent special assessments receivable consist of amounts which have been spread for collection in 2004 and prior years but have not been collected at December 31, 2004. The City collected approximately 93% of the current assessments due in 2004. Deferred assessments receivable consist of the remaining balance of council adopted assessment rolls. These assessments are collectible at various terms and interest rates. Ba]ance at January 1,2004 Less 2004 principal levy Plus new assessment rolls Less prepayments $1,195,738 (138,338) 966,457 (466,100) Ba]ance at December 31, 2004 $1,557,757 - City of Columbia Heights, Minnesota ~1Ir1it l\J1anartomont I ...,ttl""\I'" I\UUIL IVI I I ~\:illlvllL L..ClLC. Government-Wide Financial Statements Interfund Receivables A schedule of activity of long term interfund loans is as follows: Balance New Payments Balance Fund with Payable at 12/31/03 Loans Principal Interest at ]2/3]/04 Sheffield TIF - 652 $471,061 $ $1,768 $23,553 $469,293 Scattered Site TIF - 652 18,801 11,835 940 6,966 EDA - 390 600,000 600,000 EDA - 420 800,000 800,000 Totals $489,862 $1,400,000 $13,603 $24,493 $],876,259 The Sheffield TIP loan is authorized by Resolution 2003-5. The Scattered Site TIP loan is authorized by Resolution 2003-4. The EDA loan is authorized by Resolution 2004-60. - City of Columbia Heights, Minnesota Audii ivianagemeni LeUer 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 83% 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% 2003 2,811,870 38% 3,646,155 49% 967,382 13% 7,425,407 100% 2004 2,413,850 30% 4,336,802 53% 1,398,786 17% 8,149,438 100% - City of Columbia Heights, Minnesota ~llrlit I\A!:ln!:lrtarrlant I atta.. t \""'\"AIL IVI""'-I '\.A.~'-'III'-'IIL L...VLI.VI General Fund State aids for the General Fund have consisted of the following amounts for the last two years: Increase Description 2003 2004 (Decrease) Local government aid $1,812,717 $1,453,141 ($359,576) MVHC 607,324 587,319 (20,005) Police aid 184,318 189,318 5,000 Fire aid 75,788 97,679 21,891 All other 131,723 86,393 (45,330) Totals $2,811,870 $2,413,850 ($398,020) A graph of General Fund revenue by source is as follows: $9,OOO,(){)O $8,000,000 General Fund Revenue by Source $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2000 200! 2002 2003 2004 - City of Columbia Heights, Minnesota Audit Management Letter General Fund Revenue and other financing sources of the General Fund for the past two years has been as follows: 2003 2004 Increase Description Amount Percent Amount Percent (Decrease) General property taxes $3,646,155 46.1% $4,336,802 50.4% $690,647 Licenses and permits 281,480 3.6% 506,319 5.9% 224,839 Intergovernmental revenue: State 2,811,870 35.6% 2,413,850 28.1% (398,020) Federal 9,478 0.1% 17,956 0.2% 8,478 Other 42,999 0.5% 85,541 1.0% 42,542 Charges for services 407,914 5.2% 444,856 5.2% 36,942 Fines and forfeitures 140,378 1.8% 140,282 1.6% (96) Investment income 51,216 0.6% 171,181 2.0% 119,965 Other 33,917 0.4% 31,025 0.4% (2,892) Transfers 480,052 6.1% 456,634 5.3% (23,418) Total revenue and other financing sources $7,905,459 100.0% $8,604,446 100.0% $698,987 - City of Columbia Heights, Minnesota allrlit I\II!:1n!:1namant I attar I ''''''''-''IlL IVI\A.I 1t.A.:::tIVIIIVIIL L-VLL....... General Fund A chart of 2004 revenue by source is as follows: General Fund 2004 Revenue by Source Inlcrgovcmmental 293fYtl Property Taxes 50.4(Yr; - City of Columbia Heights, Mi nnesota Audit Management Letter General Fund Expenditures and other financing uses of the General Fund for the past two years were as follows: 2003 2004 Increase Amount Percent Amount Percent (Decrease) Expenditures: General government $1,532,974 19.2% $1,555,382 19.7% $22,408 Public safety 3,491,939 43.7% 3,462,092 43.9% (29,847) Public works 1,090,695 13.6% 1,247,704 15.8% 157,009 Parks and recreation 1,203,211 15.0% 1,266,844 16.1% 63,633 Contingencies 4,883 0.1% 2,180 0.0% (2,703) Transfers out: Data processing 50,000 0.6% 39,143 0.5% (10,857) Capital improvement - general 0.0% 6,516 0.1% 6,516 Capital improvement - parks 50,000 0.6% 6,125 0.1% (43,875) Capital improvement - PIR 192,074 2.4% 0.0% (192,074) Capital improvement - general governmental building 80,000 1.0% 50,000 0.6% (30,000) Community development 250,000 3.1% 249,582 3.2% (418) Capital equipment replacement 50,000 0.6% 0.0% (50,000) Local law enforcemenl block granl 1 ,402 0.0% 0.0% (1,402) Juvenile justice grant 655 0.0% 0.0% (655) Total expenditures and olher financing uses $7,997,833 100.0% $7,885,568 100.0% ($112,265) - City of Columbia Heights, Minnesota Allrlit I\A~n~n,::>rn,::>nt I ,::>tt,::>r ,___'" ...-._ I"",,"~_" '_'1'" __...._. General Fund A chait of 2004 expenditures by function is as follows: General Fund 2004 Expenditures By Function Public Works 15.8% Parks & Recreation 16.1% Transfers nul 4.5% - City of Columbia Heights, Minnesota Audit ivianagement Letter General Fund The fund balance of the General Fund at December 31, 2004 was $4,140,110. During 2004, the fund balance of the General Fund increased by $716,878 as follows: Favorab]e (U nfavorab]e) Budget Actua] Variance Revenues and transfers in: Property taxes $4,341,39] $4,336,802 ($4,589) Licenses and permits 323,100 506,319 ]83,219 Intergovernmenta] 2,425,719 2,517 ,347 91,628 Charges for services 497,250 444,856 (52,394) Fines and forfeitures 85,000 140,282 55,282 Investment income 164,321 171,181 6,860 Other 16,400 31 ,025 14,625 Transfers in 456,634 456,634 Tota] 8,309,815 8,604,446 294,631 Expenditures and transfers out: Genera] government 1,686,769 1,555,382 131,387 Public safety 3,578,580 3,462,092 116,488 Public works 1,265,755 1,249,704 16,051 Parks and recreation 1,382,114 1,266,844 115,270 Contingencies 100,000 2,180 97,820 Transfers out 338,725 351,366 (12,641) Total 8,351,943 7,887,568 464,375 Net increase in fund balance ($42,128) $716,878 $759,006 - City of Columbia Heights, Minnesota /);.llrlit 1\J1<:>n<:>namant I attal" I \\..4I'.....IL IVH..... U..t~'-'III\".r111. '-'-'LLvl 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) 2003 3,423,232 (92,374) 2004 4,140,110 716,878 $6,000,000 Fund Balance $5,000,000 $4,000,000 $3,000,000 $2,000,000 $],000,000 $0 ]995 ]996 ]997 ]998 ]999 2000 200] 2002 2003 2004 - City of Columbia Heights, Minnesota Audit Management Letter General Fund Property taxes and state aids account for approximately 80% 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: Fund Balance Component 2004 2003 Reserved for prepayments $23,302 $14,727 Designated for working capital 3,743,344 3,408,505 Undesignated 373,464 Total fund balance - December 31 $4,140,110 $3,423,232 The amount of General Fund balance at December 31, 2004 was sufficient to fulfill the City's reserve goal. The reserve requirement is calculated as follows: 2005 budgeted expenditures Reserve requirement percentage Reserve requirement $8,318,543 x 45% $3,743,343 - City of Columbia Heights, Mi nnesota Arrrlit 1\A::m:::!nAmAnt I AttAr . .--.. ...-. '_;:1_00 .-... -----. Special Revenue Funds SPECIAL REVENUE FUNDS The financial statements of the Special Revenue Funds are presented in Statements 13 through 39 of the 2004 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. The City maintained the following Special Revenue Funds during 2003 and 2004: Fund Balance (Deficit) December 31, Increase Fund 2003 2004 (Decrease) Flex Benefits $37,655 $41,243 $3,588 Cable Television (4,686) 12,296 16,982 D.A.R.E. Program 22,969 27,185 4,216 Library 12,533 15,845 3,312 Community Development 82,544 111,354 28,810 PoliceIFire Contingency Twenty-First Century Grant (2,936) 14,348 17,284 Juvenile Justice Grant 725 (725) Local Law Enforcement Block Grant 4,666 3,464 (1,202) Police Grants - Other Recreation Contributed Projects 98,718 124,130 25,412 Contributed Projects 24,574 23,622 (952) Special Projects 10,176 36,995 26,819 Confiscated Property 15,099 14,337 (762) C.H.A.S.E. 59,088 53,579 (5,509) Housing & Redevelopment Authority: Parkview Villa North 412,925 507,830 94,905 Parkview Villa South 112,304 125,622 13,318 Rental Housing 53,424 53,290 (134) Economic Development Authority: Business Revolving Loan Fund 353,255 369,999 16,744 Anoka County CDBG (29,069) (29,636) (567) E.D.A. Administration 90,679 78,049 (12,630) Totals $1,354,643 $1,583,552 $228,909 - City of Columbia Heights, Minnesota Audit Management Letter Special Revenue Funds Librarv 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: December 31, 2003 2004 Designated for working capital Reserved for prepayments $9,671 2,862 $12,585 3,260 Total $12,533 $15,845 The fund balance at December 31, 2004 was not sufficient to fuJfill the established reserve. A comparison of the required reserve and the fund balance available is as follows: $636,521 x 45% 286,434 (200,000) (12,585) $73,849 2005 budgeted expenditures Reserve requirement percentage Reserve requirement Balance available in Capital Equipment Replacement Fund Balance available in Library Fund 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. - City of Columbia Heights, Minnesota a..r1it I\II~n~nornont I ottor , ,......""". L . V 1'"""'1 .""":::f........1 ............ .....'" LL"-" 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: 2002 2003 2004 Revenues and transfers in: Investment income $1 ,547 $1,035 $3,725 Transfer from General Fund 250,000 250,000 249,582 Transfer from HRA 34,702 I 11 ,648 Transfer from EDA 222,648 Total 286,249 362,683 475,955 Expenditures and transfers out: Expenditures 297,632 277,160 419,722 Transfer out to General Fund (administrative charge) 11,826 16,226 27,423 Total 309,458 293,386 447,145 Net change in fund balance (23,209) 69,297 28,810 Fund balance - January 1 36,456 13,247 82,544 Fund balance - December 31 $13,247 $82,544 $111,354 HRA and EDA Comments and analysis of the HRA and EDA Funds are presented in a separate report addressed to the EDA. - City of Columbia Heights, Minnesota Audit Management Letter 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, 2004 is as follows: Bond Issue Balance At Final Original December 31 , Maturity Issue 2004 Date $1,985,000 $1,985,000 9/1/2009 2,399,721 (A) 9/1 /2005 860,000 510,000 2/1 /201 0 1,332,828 ] ,263,623 2/1/2018 $3,758,623 G.O. Tax Increment Refunding Bonds of 2004A G.O. Tax Increment Capital Appreciation Bonds of ]990 G.O. Improvement Bonds of ]999A G.O. Improvement Bonds of 2003A Total (AlTo be paid on 9/1/05 with proceeds of2004A Bonds. 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. - City of Columbia Heights, Minnesota .611r1it I\A<:>n<:>namant I attay I \\.A'-AIL IVIl.A1 1......~:::p.....I.I'-'1 I&. L-VLLVI Capftal Project Funds CAPITAL PROJECT FUNDS The fund balances (deficits) of the Capital Project Funds were as follows at December 31, 2003 and 2004: Fund Balance (Deficit) December 3 I, Increase Fund 2003 2004 (Decrease) Municipal State Aid 212/402 ($144,898) ($136,82 I) $8,077 Sheffield TIF Redevelopment 4 10 (464,418) (434,473) 29,945 Capital Improvement Development 420 624,578 1,506,010 881,432 Capital Improvement 401/390 660,286 730,031 69,745 Downtown Parking Maintenance 405/290 740,308 228,183 (512,125) TIF District #2 407 (2,243) (2,296) (53) TIF Medtronic 378 200,377 277 ,236 76,859 TIF Scattered Site 379/386 (15,118) 10,132 25,250 TIF Transition Block 389 4,014 57,325 53,311 Capital Sheffield Redevelopment 410 483,133 213,133 (270,000) Capital Improvement General Government Buildings 411 3,195,578 3,373,534 177 ,956 Capital Improvement Parks 412 925,805 1,013,178 87,373 EDA Capital Improvement PVVS 414 765,325 25,544 (739,781) Capital Improvement Projects 415 1,015,366 87,765 (927,601 ) Infrastructure Replacement 430 172,706 144,598 (28,108) Capital Equipment Replacement 431 4,542,977 4,759,114 216,137 Capital Equipment Fire 439 655,482 351,624 (303,858) Capital Equipment Cable TV 440 306,326 317,479 I 1,153 Capital Building Library 450 200,000 200,000 Totals $13,865,584 $12,721,296 ($1,144,288) - City of Columbia Heights, Minnesota Audit Management Letter Capital Project Funds Municipal State Aid (212/402) This fund was established to account for MSA maintenance and construction allotments. For the past three years, the fund balance of this fund consisted of the following: December 3 1 , Account 2002 2003 2004 Maintenance $71,094 $1,626 $79,807 Construction (796,798) (146,524) (216,628) Total ($725,704) ($ 1 44,898) ($136,821) - City of Columbia Heights, Minnesota .llllrlit fl.A<:>n<:>/"'tarYlant I attar I \U""'L 'VI'-4.III...A.~'-'III'-'IIL .....'-'1.1.'-'1 CapftalProjectFunds A summary of 2004 activity is as follows: Maintenance Construction Total Revenue: MSA $193,321 $270,000 $463,321 Expenditures: Personal services 40,718 2,900 43,618 Supplies 8,428 8,428 Other services and charges 24,288 24,288 Capital outlay 6,900 67,204 74,104 Transfers out: Fund 401 29,461 29,461 Fund 415 5,345 270,000 275,345 Total expenditures 115,140 340,104 455,244 Net change in fund balance 78,181 (70,104) 8,077 Fund balance - January 1 1,626 (146,524) (144,898) Fund balance - December 31 $79,807 ($216,628) ($136,821) - City of Columbia Heights, Minnesota Audit Management Letter Capiml Project Funds Capital Improvement General Government Buildings (411) A summary of financial activity is as follows: 2002 2003 2004 Revenue: Investment income $104,138 $64,542 $117,456 State grant 10,000 Miscellaneous 12,005 Transfer from General Fund 1,190,052 80,000 Transfer from Garage Fund 60,500 60,500 60,500 Transfer from Energy Management Fund 107,646 Total revenue ],484,34] 205,042 ] 77 ,956 Expenditures: Project costs 20,778 489 Net change in fund balance ],463,563 204,553 177,956 Fund balance - January] ] ,527,462 2,991,025 3,]95,578 Fund balance - December 3] $2,99],025 $3,]95,578 $3,373,534 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. - City of Columbia Heights, Minnesota allrlit IIA!:ln!:lnarnant I attar I "......'-'111. 1\11\...4.1 U""':::J'-' 1 1 1""'1 I" L-VL"VI Capiml Project Funds EDA Capital Improvement PVVS (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: 2002 2003 2004 Revenues: Investment income $46,215 $15,392 $25,544 Expenditures: Transfer to CAB's of 1990 765,325 Net change in fund balance 46,215 15,392 (739,781 ) Fund balance - January] 703,718 749,933 765,325 Fund balance - December 31 $749,933 $765,325 $25,544 The resolution establishing this fund requires a four-fifths vote to expend any unbudgeted, undesignated fund balance. The transfer was approved through Resolution 2004-82. - City of Columbia Heights, Minnesota - Audit Management Letter Capiml Project Funds Capital Improvements PIR (415) A summary of the activity of this fund is as follows: 2002 2003 2004 Financial sources: Special assessments $597,380 $564,351 $671,357 Intergovernmental - MSA 254,890 Contributions from other funds 322,320 Investment income 4,658 16,365 Bond proceeds ] ,332,828 Transfers from General Fund ]92,074 Transfers from Municipal State Aid Fund 98,498 275,345 Transfers from Infrastructure Fund 26],59] Other 80,774 48,523 98,9] ] Reclassification of prior year costs 445,254 333,950 Total financial sources ],700,6]8 2,836,473 ],06],978 Financial uses: Transfer to Capital Improvements Development 30,000 Transfer to Debt Service Fund 70,72] 43,613 510,677 Transfer to State Aid Construction Fund 458,293 Transfer to Infrastructure Replacement Fund 2,176 Issuance costs 10,330 Bond discount 5,998 Other 13,382 7,688 Project expenditures ],398,459 ],103,065 ] ,439,038 Total financial uses 1,469,180 1,634,681 1,989,579 Net change in fund balance 231,438 ] ,201 ,792 (927,601) Fund balance (deficit) - January] (417,864) (]86,426) 1,0]5,366 Fund balance (deficit) - December 3] ($] 86,426) $1,0]5,366 $87,765 - City of Columbia Heights, Minnesota ^ ..rli+ 1\./1,.... n,..",....t""\ V'V"\ 1"'\""'+ I 1"'\.++""'" J""'\UUIl iVtOIIOl::jIJtltlJlll L..IJ UIJ I Capiml Project Funds 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 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, 2004 was $1,609,198. - City of Columbia Heights, Minnesota Audit Management Letter Capftal Project Funds A summary of the active projects in this fund is as follows: Proiect FunuinJ!. to Dille PrlljCr.:1 Proiect ensls Wntcr Sewer Sturm Sewer Funding Prim Bllnd MSA Infrastructure Slale Aid Capilal Capilal Capital General ExcessJ Prnit.'\:l ~ ~ ~ Assessments Prm:ccl!s ~ Cnnstnll:tillll Replacement MainlcllulIL:C Construction Cllmanll:linll CUlIslnlctillll ~ ~ (J)clkicncy) 0202 0210 0250 0251 0301 0302 0305 0306 0310 0311 0350 0401 5.345 5.345 5.345 5.345 0402 1,241,042 59,286 1,300,328 H23,71)2 M23,792 (476.536) 0404 17,896 I7,R9fi 1I7,SiJ6) 0450 7,443 7,443 (7.443) 0502 ~ --=--- ~ --=--- ----=-- ----=--- ----=--- ----=-- -----=-- ----=--- ----=--- --=--- --=-- ---=--- ~ $5lJ.735 $1.297,116 $1,356,851 543;1,813 $30.243 $212,713 $141,126 $J{S,OOO $198,545 S33,H05 $101,600 $109,91)6 $1.356,851 3,539 H.006 11,545 1,:;00 2.500 (9,045) N.ll? M,227 N.200 8,200 (27) 445 445 1445) 75,539 5R,045 ]33.584 I 33.5Ht.J 133,5R4 1,181,572 ],]HI.572 769,756 270,000 118,289 13,498 10,029 1,181,572 12,67H 4,013 16,691 (l6,@1) 4.399 1.512 5,911 (5,911) 117 23,493 23,610 123.610) 76H 7M (76H) Total $1,439,037 $2,647.828 $4,086.865 $1,391.199 $769,756 $40.943 $-l98.0S8 $259.415 $98.498 $]98.,.545 $33.8115 $101.61"' $120.025 $3,511,844 ($575.021) The City Council does not adopt 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. - City of Columbia Heights, Minnesota Allrlit I\A~n~nAmAnt I AttAr 6 "__I" ..........11......::;1_...-.... __..,,'-'_ Enterprise Funds ENTERPRISE FUNDS Water Fund Operating Account 601 A graph of the water operations is presented below: $1,9llll,llllll $!.SlJll,lllJll $1,70lJ,llllll $1,601J,OOIJ $1,5llll,lJlllJ $l,4llll,lllllJ $1,301J,lJlllJ $1,2lllJ,lllllJ $J,]()ll,IJOIJ $1,llllll,lllJll $9llll,llllll $SOll,OOll $700,OllO $6llll,Ollll $5ll0,llllO $4llll,llllO $3IJO,OOO $20ll,OOll $1Il0,llOll $0 21JIlIJ 2IJOl 21102 211113 20114 $!.9lllJ,llOIJ - $1,Sllll,lllllJ $1,7ll0,llllO $1,6llll,llllll $1,5llll,llllll $J,4ll0,llllll $!.3llll,llllll $1,2ll0,llllll $!.1II0,lllJll $!'Ollll,llllO $9ll0,lJllO $Sllll,llllll $7llll,llllll $601J,OlllJ $500J)lJ1J $4llll,llOll $3llll,OOll $200,llllll $JOll,lJllll $ll Water Utility Fund Revenue And Expenses ~ Other Operating Expenses c::::::I Water Purchases --..- Operating Revenue The City of Columbia Heights purchases its water supply from the City of Minneapolis. Ho\vever, the City does not have a current contract ""'lith the City of I\1inneapolis~ i\S the above chart demonstrates, expenses of the water utility exceeded the revenue generated by water. We recommend the City continue to review rates and make changes as appropriate. - City of Columbia Heights, Minnesota ^___I~.1. 1\"_____________.1. 1_.1..1.___ J-\UUll IVIClIIClyerllelll LeLler Enterprise Funds Sewer Fund Operatin2 Account 602 A graph of sewer operations is presented below. $1,31111,11011 $ 1,2110,OlHl $1,1 00,000 $J,lHIO,OOIl $900,0011 $8011,01111 $71111,01111 $61111,11011 $5110,11011 $400,1100 $300,11011 $201J,1J1J0 $101l,01l1l $IJ 21l1l1l 201J3 $1,3110,1I1I1J $1,200,1J01J $1,]01l,1I01l $1,01l1l,001l $91111,11011 $801l,01l0 $71l1J.01J1l $61l1l,1l1l1l $51l1l,1l1l1l $41l1l,1l1l1l $31l1l,lHIII $2011,0011 $101l,1l1l1l $Il 21l1l4 201l] 21l1l2 Sewer Utility Fund Revenue and Expenses c::::::I Other Operating ~~CES\jes -t- Operating Revenue - City of Columbia Heights, Minnesota ^ 1.,..Ii... f\JI________+ I _.f."'_... /""'\UUIL IVIa.IIa.~l;;IIIl;;11L Ll;; lll;; I Enterprise Funds Refuse Fund 603 A graph of refuse operations is presented below: $J,4111J.1J1J1J $IJIJIJ,IJIIII $1.21J1J,1I111J $1,11J1I,1J1I1J $J,IJIJIJ,IJIJIJ $91J1J,1J1I1J $80IJ,1J1I1J $71J1J.1I1I1J $61J1I,1J1I1J $51J1J,1I111J $4111J,1J1I1J $31J1J.1J1J1J $21J1J,1J1J1J $101J,1J1I1J $IJ 21J1J1J 2111J1 21J1J2 2111J3 21J1J4 $JAIIIJ,IIIJIJ $J,31J1J,1J1J1J $1,21J1J,1J1J1J $l,JOIJ,1I1J1J $J,IJIJIJ,1I1111 $9111J,1J1J1I $81J1J,1I1J1I $71111,111111 $6110,IJOIJ $51111,1I1J1I $41J1J.1J1J1J $31111,11110 $200,1J1J1J $100,11011 $11 Refuse Utility IEEEJ Operating Expenses ~ Operating Revenue - City of Columbia Heights, Minnesota Audit Management Letter Enterprise Funds Municipal LiQuor Fund 609 An analysis of 2004 activity is as follows: Top Valu Top Valu II HcighL"i Liquor 2004 Total 2003 Tolal Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Operating revenues $2.983.718 100.Q()% $2.633.603 100.00% $1.328.737 100.00% $6.946.058 100.00% $6.934.572 J OO.OorYrI Cost or goods sold 2.277 .454 76.33% 2.053.434 77.97% 987.443 74.31% 5.318.331 76.57% 5.366.137 77.38% Gross margin 706.264 23.67% 580.169 22.03% 341.294 25.69% 1.627.727 23.43% 1.568.435 22.62% Other opcfming expenses 566.723 18.99% 435.357 16.53% 254.854 19. 18ffrJ 1.256.934 18.10% 1.236.163 17.83% Net income from operations $139.541 4.68% $144.812 5.50% $86.440 6.51% $370.793 5.34% $332.272 4.79% Income from operations as a percent of total sales for the past sixteen years are scheduled below: Net Income From Operations % of Top Top Heights Total Year Valu Valu II Liquor Total Sales 1989 ---------------S i te Informa ti 0 n____mmm___ $228,857 6.2% 1990 ---------------- N ot A vailable--------mmm 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% ]994 146,350 5,902 101,483 253,735 4.6% 1995 ]4],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,] 62 7.2% 1999 146,576 130,763 226,116 503,455 7.5% 2000 152,630 105,749 ]28,389 386,768 6.0% 2001 183,202 108,788 167,587 459,577 6.7% 2002 159,242 ]61,358 175,799 496,399 7.2% 2003 30,672 165,891 135,709 332,272 4.8% 2004 139,541 144,812 86,440 370,793 7.0% As shown above, liquor operations have been an important revenue source for the City. - - - City of Columbia Heights, Minnesota Audit Management Letter 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 2003. The following analysis compares Columbia Heights' liquor operations with those reported in the OSA report. There are nineteen cities in the metropolitan area that operate off-sale only operations. The City of Columbia Heights ranks fifth in sales among metro area cities behind Richfield, Lakeville, Eden Prairie and Edina. 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. - City of Columbia Heights, Minnesota Audit Management Letter 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 Margin State Sales of Sales Amount Percent Averaae(l) '" 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% 24.4% 2003 6,934,572 5,366,137 1,568,435 22.6% 23.9% 2004 6,946,058 5,318,331 1,627,727 23.4% Not Available (l)Source: Minnesota Office of the State Auditor - Metropolitan Area Off-Sale Operations - - City of Columbia Heights, Minnesota Audit Management Letter Enterprise Funds Operating Expenses Operating expenses for the past several years have been as follows: Percent of Sales Year Amount City State Avg. 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 16.1% 16.2% 2003 1,236,163 17.8% 17.8% 2004 1,256,934 18.1% N/A - City of Columbia Heights, Minnesota Audit Management Letter Enterprise Funds Operating expenses for 2003 and 2004 were as follows: Increase 2004 2003 (Decrease) Personnel costs $812,588 $760,612 $51,976 Rent 207,085 209,742 (2,657) Utilities 41,731 42,622 (891) Credit card fees 59,648 53,829 5,819 Insurance 29,772 24,081 5,691 Advertising 15,373 14,504 869 All other 90,737 130,773 (40,036) Total $1,256,934 $1,236,163 $20,771 Net Income from Operations Net income for the past several years is as follows: Percent of Sales City State Year Amount City Average 1994 $253,735 4.6% 7.2% 1995 294,579 5.2% 6.8% 1996 356,005 5.9% 7.5% 1997 311,275 5.1% 6.9% 1998 457,162 7.2% 7.5% 1999 503,455 7.5% 7.5% 2000 386,768 6.0% 7.2% 2001 459,577 6.7% 7.3% 2002 496,399 7.2% 8.1% 2003 332,272 4.8% 6.1% 2004 370,793 5.3% Not Available - City of Columbia Heights, Minnesota Allrlit I\A::.n::.nt:>mt:>nt I t:>ttt:>r 11 ___... ..,........,.......~_,.,_.'.. __...._. Internal 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 2004, the City maintained the following Internal Service Funds: Fund Cash Balance December 31, 2003 2004 Central Garage Data Processing Insurance Compensated Absences $185,621 625,959 769,819 594,629 $306,065 751,635 1,026,082 599,624 $2,176,028 $2,683,406 Total - City of Columbia Heights, Minnesota Audit Management Letter 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 2004 Comprehensive Annual Financial Report. - City of Columbia Heights, Minnesota ^. .,..J:.. f\JI_________........ I _..&...._.... /"'\UUll IVlalla~t:::IIIt:::11l Lt::: llt::: I 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. - City of Columbia Heights, Minnesota Audit Management Letter Internal Control Matters INTERNAL CONTROL MATTERS During our audit for the year ended December 31, 2004, we noted the following internal control matters: Special Assessments In 2004, the City adopted Resolution 2004-63, adopting assessments for project 0402. The resolution did not include an amount of the assessment roll adopted. Additionally, the actual amount of the assessment roll did not agree with the amount included in the council packet letter. We recommend future resolutions adopting assessment rolls include the amount of the assessment roll by PIN number. Monthlv Review of Parkview Villa Bank Reconciliations In 2004, the City began contracting for the management of PVVN and PVVS. New checking accounts were established for PVVN and PVVS. These accounts are HRA accounts but are maintained by the management company. Although these accounts were opened in March 2004, the City finance department did not request copies of the bank statements and bank reconciliations until the end of 2004. Therefore City staff were not able to review and provide oversight of this activity. Federal Grant Expenditure Reimbursements In 2004, the City received funds for administrative expenditures under the Capital Funds Program (CFP) from the Federal Depmiment of Housing and Urban Development. However, the supporting documentation for certain expenditures is unclear and does not directly tie to the CFP requests for reimbursement. This occurred during the assistant finance director transition period. We recommend the City maintain specific documentation that ties directly to Federal reimbursement requests. - City of Columbia Heights, Minnesota ^. .,..,1:.. 1\ JlI""\"",,I""\"''''O,,\V'V'\__+ I _++_y f'"'\UUIl IVlalla~OIIIOIIl L..OllOI Internal Control Matters The following is the status of internal control comments identified during the 2003 audit. PriorYearCOIllI1lent Special Assessments. In 2003, the amount of special assessments certified to the county differed from the amount approved by the City council by approximately $900. When presenting the special assessments to the council, the City does not specify the individual amount due by pin number. We recommend the City lists the special assessments presented before the council by amount per pin number in order to prevent a variance between amount authorized by council and amount certified to the county. Public Purpose Expenditures. In 2003, the City paid for catering and door prizes for an employee holiday party. It is the Minnesota attorney general's opinion that the city should "refrain from paying for holiday parties or other employee social events." We recommend the City consider creating a public purpose expenditure policy to determine allowable City expenditures. Rental Revenue. In 2002, the City received overpayments for a tower rental revenue lease from Sprint PCS. As of December 31,2003, the City has not credited the overpayments to be recognized as rental revenue to City. We recommend the City recognize the revenue accordingly. 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. Status Remains a finding for 2004. City adopted by resolution a policy in 2005. (2005- 21) This was resolved in 2004. Remains a finding for 2004. In 2003 the City began to track receipts through the use of a cash register. However receipts are not reconciled to class rosters. We recommend that receipts be reconciled with class rosters. - City of Columbia Heights, Minnesota A..-I:L ft.1f_._______.L I _.L.L_~ f-\UUll IVIClIIClyt:rJ Il:llll Ltmel Internal Control Matters Prior Year Comment Status Federal Grant Expenditure Reimbursements. Remains a finding for 2004. In 2003, the City received funds for administrative expenditures under the Capital Funds Program (CFP) from the Federal Department of Housing and Urban Development. However, the supporting documentation for the administrative expenditures is unclear and does not directly tie to the CFP requests for reimbursement. There is no documentation to support allocation of payroll to PVVS and PVVN. We recommend the City maintain specific documentation that ties directly to Federal reimbursement requests. TIF Bond Arbitrage. To be resolved July/August 2005 In 2003, the City received notice that the TIF 1990 Bonds, Series A may not have been fully expended within the designated time restrictions. We recommend the City consider the impact of the potential bond arbitrage. - 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 Authoritv 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 1303 South Frontage Road Suite 13 Hastings, Minnesota 55033 651 4267000 651 426 5004 Fax 651 4804990 651 4265004 Fax www.hlbtr.com HLB Tautges Redpath, Ltd. is a member of . International, a world-wide organization of accounting firms and business advisors. Columbia Heights Economic Development Authority Audit Management Letter The transition of the funds of the HRA to the EDA is illustrated below: Before After HRA EDA HRA General Fund General Section 8 Fund Rental Housing Anoka County ~ Anoka County CDBG CDBG Parkview Parkview Villa ~ Villa North North Parkview Parkview Villa ~ Villa South South Multi-Use Closed to Redevelopment ~ City TIF Debt ... Plan Service Fund EDA Administration - Columbia Heights Economic Development Authority Audit Management Letter Condensed balance sheets for the HRA and EDA for 2004 and 2003 are as follows: EDA FUNDS HRA FUNDS Business Anaka Parkview Parkview Revolving EDA County Villa Villa Rental 2004 2003 Loan Admin. CDBG North South Housing Total Total Assets Cash and investments $306,2]7 $] 18,58] $ - $590,467 $168,377 $52,874 $1,236,516 $],141,620 Other assets 67,402 1,403,629 910,405 19,2]9 3,210 4]6 2,404,281 474,293 Total assets $373.619 $1,52?,210 $910,405 $609,686 $]71,587 $53,290 $3,640,797 $],6]5,913 Liabilities and Fund Balance Liabilities - in total $3,620 $1,444,161 $940,041 $]01,856 $45,965 $ - $2,535,643 $622,395 Fund balance: Reserved 327,539 1,397,022 507,830 2,232,39] 740,464 Unreserved 42,460 (l,3] 8,973) (29,636) ] 25,622 53,290 (l,]27,?37) 253,054 Total liabilities and fund balance $373,619 $1,522,?1O $910,405 $609,686 $171,587 $53,290 $3,640,797 $1,615,913 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. - Columbia Heights Economic Development Authority AlJrlit M~mRnAmAnt I AttAr . . -. --. - - - - --. - --.;;;J - - - - - - - - - - - - - - Business Loan Revolving Fund (299) A comparison of the financial activity of this fund for 2002, 2003 and 2004 is as follows: 2002 2003 2004 Revenues: Taxes $98,241 $97,076 $ Intergovernmental revenue 12,944 12,460 Fees/program revenue 12,542 20,781 3,192 Investment income 30,799 6,358 13,552 Total revenues 154,526 136,675 16,744 Expenditures: Other services and charges 12 Revenues over expenditures 154,514 136,675 16,744 Other financing sources (uses): Transfer from EDA Anoka County CDBG 24,000 Transfer to Sheffield Redevelopment (77,000) Transfer to Community Development (34,702) (111,648) Transfer to Capital Improvement Development (185,000) Transfer to Section 8 (85,877) Total other financing sources (uses) (358,579) (111,648) 0 Net change in fund balance (204,065) 25,027 16,744 Fund balance - January 1 532,293 328,228 353,255 Fund balance - December 31 $328,228 $353,255 $369,999 This fund accounts for the Business Revolving Loan Fund (BRLF). Also, prior to 2004 this fund accounted for property tax levy for Sheffield Redevelopment. Beginning in 2004, the tax levy is accounted for in Fund 204 - EDA Administrative Fund. As shown above, this fund has a fund balance of $369,999. A pOliion of the fund balance ($306,426) relates to a loan to ACAAP. In prior years, the City received monies directly from CDBG and provided - Columbia Heights Economic Development Authority Audit Management Letter a loan to ACAAP for the purchase of property. The $306,426 is the money that was repaid. The City is not aware of any restrictions on these remaining balances. A history of the fund balance 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) 2003 353,255 25,027 2004 369,999 16,744 This fund also accounts for revolving loans. A summary of the loan activity for 2004 is as follows: Balance Principal Balance 2004 Payor 12/31/2003 Payments 12/31/2004 Interest Barnick (Metro Assembling) $6,526 $2,925 $3,601 $267 F.C. Celtic, LLC 19 19 Totals $6,545 $2,925 $3,620 $267 - Columbia Heights Economic Development Authority Allrlit 1\A;:In::!nAml=>nt I Attpr . ---... ..........._~_..._.I.. __....__ Anoka County CDBG Fund (202) Financial activity of this fund for 2002, 2003 and 2004 is as follows: 2002 2003 2004 Revenues: Federal grant: Housing rehab - project 055 $55,855 $ $ Commercial revitalization - 030 87,935 Commercial revitalization - 130 239,393 Industrial redevelopment - 223 50,000 40th A venue improvements - 326 ]59,96] NEI demolition - 327 365,583 Total revenues 383,]83 50,000 525,544 Expenditures: Personal services 3,204 Supplies 21 Other services and charges 85,613 3,752 567 Capital outlay 327,056 Total expenditures 4]5,894 3,752 567 Revenues over (under) expenditures (32,7] 1) 46,248 524,977 Other financing sources (uses): Transfer to General Fund (5,913) Transfer to Capital Improvement Fund (50,000) (525,544) Total other financing sources (uses) (5,913) (50,000) (525,544) Net change in fund balance (38,624) (3,752) (567) Fund balance (deficit) - January] 13,307 (25,3] 7) (29,069) Fund balance (deficit) - December 3] ($25,3] 7) ($29,069) ($29,636) - Columbia Heights Economic Development Authority AI Jrlit M;m::lOAmAnt I AttAr - ------ "-------;:1--"---- ------ At December 31,2004, available CDBG balances are as follows: Project Number Project Year Available Balance $31,985 327 2004 - Columbia Heights Economic Development Authority Audit Management Letter Parkview Villa North (PVVN) (203) The financial activity of this fund for 2002, 2003 and 2004 is as follows: 2002 2003 2004 Revenues: Federal grant: Operating subsidy $111 ,124 $84,667 $103,328 Capital grant 256,723 56,806 127,737 Rents 284,198 284,080 291,657 Investment income 28,170 27,485 15,888 Other 2,078 3,171 850 Total revenues 682,293 456,209 539,460 Expenditures: Personal services 9,111 32,055 17 ,064 Supplies 10,221 10,179 27,077 Other services and charges: Management services 104,009 113,654 112,873 Utilities 69,948 86,016 97,754 Repair and maintenance 29,495 38,112 29,489 PILOT 22,901 19,526 19,053 Insurance 24,024 31,076 29,022 All other 20,333 15,310 9,452 Capital outlay 248,336 55,824 102,771 Repayment of de-obligated funds 104,471 Total expenditures 538,378 506,223 444,555 Revenues over (under) expenditures 143,915 (50,014) 94,905 Other financing sources (uses): Transfers out (7,884) (11,454) Net change in fund balance 136,031 (61,468) 94,905 Fund balance - January 1 338,362 474,393 412,925 Fund balance - December 31 $474,393 $412,925 $507,830 - Columbia Heights Economic Development Authority Audit Management Letter EDA 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 2002, 2003 and 2004 is as follows: 2002 2003 2004 Revenues: Taxes $119,834 $121,895 $197,418 Met Council - livable communities grant 209,650 Market value homestead credit 12,889 Reimbursement 4,210 Investment income 8,365 1,562 461 Total revenues 342,059 123,457 210,768 Expenditures: Other: Personal services 53,107 77,659 Supplies 5,457 1,030 Other services and charges 40,714 36,873 750 Loans and grants 209,650 Total expenditures 308,928 115,562 750 Revenues over expenditures 33,131 7,895 210,018 Other financing sources (uses): Transfers in 17,500 Transfers out: General fund (101) (7,884) (11,454) Community Development (201) (222,648) Capital Improvement Development (420) (100,000) Total other financing sources (uses) (90,384) (11 ,454) (222,648) Net change in fund balance (57,253) (3,559) (12,630) Fund balance - January 1 151,491 94,238 90,679 Fund balance - December 31 $94,238 $90,679 $78,049 - Columbia Heights Economic Development Authority Allrlit I\A:=m::!rtpmpnt I pttpr . ---.. '.I_'"_~_I"_'". __...._. Parkview Villa South (213) The financial activity of this fund for 2002, 2003 and 2004 is as follows: 2002 2003 2004 Revenues: Rents $191,944 $191,338 $207,562 Investment income 7,102 6,837 3,897 Other 1,342 3,912 3,038 Total revenues 200,388 202,087 214,497 Expenditures: Personal services 6,263 18,345 13,835 Supplies 6,359 3,418 7,574 Other services and charges: Management services 51,913 56,507 57,300 Utili ties 37,466 43,761 44,391 Repair and maintenance 19,229 25,612 40,477 PILOT 14,757 14,165 15,867 Insurance 11,833 15,537 12,930 All other 6,166 6,438 8,805 Capital outlay 9,089 Total expenditures 163,075 183,783 201,179 Revenues over expenditures 37,313 18,304 13,318 Other financing sources (uses): Transfers out - General (5,914) (8,590) Net change in fund balance 31,399 9,714 13,318 Fund balance - January 1 71,191 102,590 112,304 Fund balance - December 31 $102,590 $112,304 $125,622 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. - Columbia Heights Economic Development Authority Audit Management Letter Rental Housilll:! (235) This fund was established in 1996 to account for rental properties. Currently, the properties consist of one four-plex. A summary of the 2002, 2003 and 2004 financial activity is as follows: 2002 2003 2004 Revenues: Rents $16,450 $18,309 $400 Investment income 3,170 983 1,893 Other 195 1,218 179 Total revenues 19,815 20,510 2,472 Expenditures: Other: Supplies 580 189 Other services and charges: Management services 1,380 1,380 Utilities 3,275 3,949 162 Repair and maintenance 1,964 2,062 1,701 PILOT 1,368 1,483 Insurance 1,063 1,380 All other 2,258 1,736 743 Capital outlay 152,708 Total expenditures 11,888 164,887 2,606 Revenues over (under) expenditures 7,927 (144,377) (134) Other financing sources (uses): Sale of land 150,421 Transfers in 8,323 Total other financing sources (uses) 0 158,744 0 Net change in fund balance 7,927 14,367 (134) Fund balance - January 1 31,130 39,057 53,424 Fund balance - December 31 $39,057 $53,424 $53,290 -- Columbia Heights Economic Development Authority I111rHt fl.A~n~namant I attar , ''''''''''II. IV I""". Ill......~'-'.. .........." ....\J....'-'. (#/$ ~ ~ t/J HLB TAUTGES REDPATH, LTD. White Bear Lake, Minnesota June 10,2005 -- CITY COUNCIL LETTER Meeting of: August 1, 2005 AGENDA SECTION: PUBLIC HEARING NO: ITEM: FIRST READING OF ORDINANCE NO. 1492, A PROPOSED CHANGE TO THE CITY CHARTER, CHAPTER 7, SECTION 72, BONDED DEBT AND DEBT LIMIT ORIGINATING DEPARTMENT: CHARTER COMMISSION BY: CHARTER COMMISSION DATE: 7-27-05 NO: Near the end of2004, the city refinanced some Parkview Villa bonds. Mark Ruff, from Ehlers and Associates, who handles all our bonding issues, advised the Finance Director that the Charter Commission may want to consider revising charter language to allow refinancing of bonds in a more timely fashion and allowing the city to realize financial savings due to a shorter wait period. Currently, refinancing and financing of bonds is done by ordinance, taking effect 30 days after passage. Therefore, this issue has been brought to the Charter Commission for discussion. The Charter Commission has studied the charter language of other cities in this area. They have also had Mark Ruff from Ehlers and Associates attend their commission meeting in July for further discussion. After consideration of all the above, the Charter Commission recommends a change to the city charter. This change only affects the refinancine of bonds. The Charter Commission recommends the addition of the underlined sentence in the last paragraph of Chapter 7, Section 72, Bonded Debt and Debt Limit: Before any bonds are sold, there shall be a four-fifths vote of the council authorizing the issuance of the bonds by ordinance. However. bonds to be sold for the refinancing of any existing bonds shall be authorized by four-fifths vote of the council by resolution. Following its passage, the ordinance shall be published at least once by publication in a legal newspaper having general circulation in the city. The registered voters of the city shall have thirty days from the date of publication to initiate a referendum on the ordinance authorizing the issuance. Subsequent to the passage of the authorizing ordinance, its publication, and the thirty-day period, the bond sale shall occur within sixty days. During said sixty-day period, the City Manager shall have the authority to establish a special meeting upon at least seventy-two (72) hours advance notice to each member ofthe council. At that special meeting, the City Manager is authorized to receive the actual bides) or sale of the bonds to be negotiated. The actual award or sale of the bonds shall be approved by a resolution passed by a four-fifths vote of the council. RECOMMENDED MOTION: Move to waive the reading ofthe ordinance, there being ample copies available to the public. RECOMMENDED MOTION: Move to schedule the second reading of Ordinance No. 1492 for August 22, 2005, at approximately 7 p.m. in the Council Chambers. COUNCIL ACTION: ORDINANCE NO. BEING AN ORDINANCE AMENDING CHAPTER 7, SECTION 72 OF THE CHARTER OF THE CITY OF COLUMBIA HEIGHTS PERTAINING TO BONDED DEBT AND DEBT LIMIT The City of Columbia Heights does ordain: Section 1: Chapter 7, Section 72 of the Charter of the City of Columbia Heights which currently reads as follows, to wit: BONDED DEBT AND DEBT LIMIT. Bonds may be issued by four-fifths vote of the council without the previous approval ofthe voters ofthe said city, but subject to the referendum powers of the people, for the purchase of real estate; for new construction; for new equipment; for all improvements of a lasting character; for the purchase or construction of public waterworks or for the enlargement of the same and for the protection and distribution of the water supply; for the establishment of public lighting, heating, or power plants, and for their acquisition and equipment by purchase or otherwise; for the acquisition or construction of street railways, telegraph or telephone lines, or any other public convenience from which a revenue is or may be derived; for the creation or maintenance of a pennanent improvement fund; for the purchase or erection of needful public buildings; for establishing and maintaining garbage crematories, or other means of garbage disposal; for the establishment and maintenance of hospitals, schools, libraries, museums, art galleries and cemeteries; for the construction of sewers, subways, streets, sidewalks, pavements, culverts, and parks and parkways and play grounds; for changing, controlling or bridging streams and other waterways within the corporate limits and constructing and repairing roads and bridges within two miles of the corporate limits thereof; for the purpose of refunding outstanding bonds; for the purpose of funding floating indebtedness; and for all purposes which may be authorized by the laws of the State of Minnesota; the right of the city to issue bonds under the authority of any law heretofore and this section of the city's charter shall not be construed to limit the passed and adopted by the State of Minnesota, but no bonds shall ever be issued to pay current expenses or to refund emergency debt certificates. The total bonded indebtedness of the city shall never exceed ten percent of the last assessed valuation of the taxable property therein, including monies and credits, but in computing the total bonded indebtedness, emergency debt certificates and certificates of indebtedness shall not be included in or counted as part of the such bonded indebtedness, if (1) held in a sinking fund maintained by the city, (2) issued for the acquisition of equipment; purchase, construction, maintenance, extension, enlargements or improvement of street railways, telegraph or telephone lines, water, lighting, heating and power plants, or either of them, or any other public convenience, from which revenue is or may be derived, owned and operated by the city, or the acquisition of property needed in connection therewith; or for the construction of sewers, public drainage ditches, or the acquisition of lands, or for improvements of streets, parks, or other public improvements, to the extent that they are payable from the proceeds of assessments levied upon the property specially benefitted by such ditches or improvements, or (3) for the purpose of anticipating the collection of general taxes for the year in which issued. h1 no case shall bonds be issued to run for more than thirty years. The purpose for which bonds are issued shall be set forth in the ordinance authorizing them and the proceeds from such bonds shall not be diverted to any other purpose. Before any bonds are sold, there shall be a four-fifths vote of the council authorizing the issuance of the bonds by ordinance. Following its passage, the ordinance shall be published at least once by publication in a legal newspaper having general circulation in the city. The registered voters ofthe city shall have thirty days from the date of publication to initiate a referendum on the ordinance authorizing the issuance. Subsequent to the passage ofthe authorizing ordinance, its publication, and the thirty-day period, the bond sale shall occur within sixty days. During said sixty day period, the City Manager shall have the authority to establish a special meeting upon at least seventy-two (72) hours advance notice to each member of the council. At that special meeting, the City Manager is authorized to receive the actual bides) or sale of the bonds to be negotiated. The actual award or sale of the bonds shall be approved by a resolution passed by a four-fifths vote of the council. IS HEREWITH AMENDED TO READ AS FOLLOWS: BONDED DEBT AND DEBT LIMIT. Bonds may be issued by four-fifths vote of the council without the previous approval ofthe voters ofthe said city, but subject to the referendum powers of the people, for the purchase of real estate; for new construction; for new equipment; for all improvements of a lasting character; for the purchase or construction of public waterworks or for the enlargement of the same and for the protection and distribution of the water supply; for the establishment of public lighting, heating, or power plants, and for their acquisition and equipment by purchase or otherwise; for the acquisition or construction of street railways, telegraph or telephone lines, or any other public convenience from which a revenue is or may be derived; for the creation or maintenance of a permanent improvement fund; for the purchase or erection of needful public buildings; for establishing and maintaining garbage crematories, or other means of garbage disposal; for the establishment and maintenance of hospitals, schools, libraries, museums, art galleries and cemeteries; for the construction of sewers, subways, streets, sidewalks, pavements, culverts, and parks and parkways and play grounds; for changing, controlling or bridging streams and other waterways within the corporate limits and constructing and repairing roads and bridges within two miles of the corporate limits thereof; for the purpose of refunding outstanding bonds; for the purpose of funding floating indebtedness; and for all purposes which may be authorized by the laws of the State of Minnesota; the right of the city to issue bonds under the authority of any law heretofore and this section of the city's charter shall not be construed to limit the passed and adopted by the State of Minnesota, but no bonds shall ever be issued to pay current expenses or to refund emergency debt certificates. The total bonded indebtedness of the city shall never exceed ten percent of the last assessed valuation of the taxable property therein, including monies and credits, but in computing the total bonded indebtedness, emergency debt certificates and certificates of indebtedness shall not be included in or counted as part of the such bonded indebtedness, if (1) held in a sinking fund maintained by the city, (2) issued for the acquisition of equipment; purchase, construction, maintenance, extension, enlargements or improvement of street railways, telegraph or telephone lines, water, lighting, heating and power plants, or either ofthem, or any other public convenience, from which revenue is or may be derived, owned and operated by the city, or the acquisition of property needed in connection therewith; or for the construction of sewers, public drainage ditches, or the acquisition of lands, or for improvements of streets, parks, or other public improvements, to the extent that they are payable from the proceeds of assessments levied upon the property specially benefitted by such ditches or improvements, or (3) for the purpose of anticipating the collection of general taxes for the year in which issued. In no case shall bonds be issued to run for more than thirty years. The purpose for which bonds are issued shall be set forth in the ordinance authorizing them and the proceeds from such bonds shall not be diverted to any other purpose. Before any bonds are sold, there shall be a four-fifths vote of the council authorizing the issuance of the bonds by ordinance. However, bonds to be sold for the refinancing of any existing bonds shall be authorized by four fifths vote of the council by resolution. Following its passage, the ordinance shall be published at least once by publication in a legal newspaper having general circulation in the city. The registered voters of the city shall have thirty days from the date of publication to initiate a referendum on the ordinance authorizing the issuance. Subsequent to the passage of the authorizing ordinance, its publication, and the thirty-day period, the bond sale shall occur within sixty days. During said sixty day period, the City Manager shall have the authority to establish a special meeting upon at least seventy-two (72) hours advance notice to each member of the council. At that special meeting, the City Manager is authorized to receive the actual bides) or sale of the bonds to be negotiated. The actual award or sale of the bonds shall be approved by a resolution passed by a four- fifths vote of the council. First Reading: Second Reading: Date of Passage: Offered by: Seconded by: Roll Call: Gmy L. Peterson, Mayor Patricia Muscovitz, Deputy City Clerk