HomeMy WebLinkAboutJune 27, 2006 Work Session
590 40th Avenue N.E., Columbia Heights, MN 55421-3878 (763) 706-3600 TOO (763) 706-3692
Visit Our Website at: www.ci.columbia-heights.mn.us
Mavor
Gary L. Peterson
Councilmembers
Robert A. U'illiams
Bruce Nawrocki
Tammera Ericson Diehm
Bruce Kelzenberg
City Manaqer
Walt Fellst
CITY OF COLUMBIA HEIGHTS
ADMINISTRA TlON
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
JUNE 27, 2006
7:00 P.M.
CONFERENCE ROOM 1
WORK SESSION
AGENDA
]. Review of comprehensive annual report and audit finding
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 Secretary at
706-3611, to make arrangements. (TDD/706-3692 for deaf or hearing impaired only)
THE CITY OF COLUMBIA HEIGHTS DOES NOT DISCRIMINATE ON THE BASIS OF DISABILITY IN EMPLOYMENT OR THE PROVISION OF SERVICES
EQUAL OPPORTUNITY EMPLOYER
it f lu i i hts,
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Presentation to City Council
June 27, 2006
David J. Mol, CPA
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The financial statements are the
responsibility of the City's
management
The role of the Independent
auditor is to report on the fair
presentation of the financial
statements
. "Clean opinion" on the 2005
financial statements
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Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented ~n
City of
Columbia Heights,
Minnesota
Fut: i~~ C Ilrrrp~;ne:mi'ttC ......'ll1uaJ
t'inlllld<il Ri,;lIoct
fur th: Fi::;':J.l Yeat. Bt!do:l
Dec<m:1ber J L 2>!W14
A. (,rmrl'.',:m .]( .....im.mJw:!I:lr E:ii:-ellttiC: it. Fin.."..1
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")"'hm1<~' "'mt;f"hmSff( uill>lll fd<i.OC..l
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+ Required by audit standards
+ Based on inquiries and observations
+ Identifies reportable conditions
+ Reportable condition defined as
"significant deficiencies in the design
or operation of the internal control
over financial reporting that would
adversely affect the Entity's ability to
record, process, summarize, and
report financial data"
+ One reportable condition noted
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. Required by Minnesota Statute
~6.65
. OSA established a task force to
develop audit guide for legal
compliance
. Audit guide covers seven
categories
1 ) contracting and bidding
2) deposits and investments
3) conflicts of interest
4) public indebtedness
5) claims and disbursement
6) other miscellaneous provisions
7) Tax increment provisions
. One finding of noncompliance
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+ Required if expenditure of federal
monies exceed $500,000
+ Expenditure of federal monies totaled
$716,439 for 2005
+ City qualified as a low-risk auditee
+ Major program:
- 97.004 Homeland Security grant
+ Testing based on OMS Compliance
Supplement
+ No findings of noncompliance
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+ Schedule of federal expenditures:
Federal Funding Source/
Pass Through Agency/
Program Title
U.S. Department of Housing and Urban Development:
Direct:
Operating Subsidy
Capital Funds Program (CFP)
Passed-through Anoka County:
Community Development Block Grant - Entitlement Grant (CDBG)
U.S. Department of Transportation
Passed-through State of MN Department of Public Safety:
ACE Nitecap
Passed-through Anoka County, Minnesota:
Safe and Sober
Federal
CFDA
Number
14.850
14.872
14.218
20.600
20.600
U.S. Department of Homeland Security - Federal Emergency Management Agency:
Passed-through Anoka County:
Emergency Management Assistance Grant
Passed-through State of MN Department of Public Safety:
Homeland Security
U.S. Department of Health and Human Services:
Passed-through State of MN Department of Health:
Armed and Alert Grant
Total Federal Expenditures
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97.042
97.004
93.136
2005
Federal
Expenditures
121,270
104,237
279,894
2,848
5,616
2,363
199,211
1,000
$716,439
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- Required Communication
· Audit firm responsibility under U.S.
audit standards.
· Significant accounting policies
· Accounting estimates
· Audit Adjustments
· Disagreements with management
· Consultations with other auditors
· Issues discussed prior to retention
of auditor
· Difficulties encountered in
performing the audit
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- Other Matters
· Fixed asset additions/deletions
· Approval of PVVN and PVVS
. .
Invoices
· Time reporting - salaried
employees
· Administrative tags
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II
Revenue Expenditures Interfund Increase in Fund BalanceJ Cash
and Other and Other Transfers Fund BalanceJ Net Assets Balance CAFR
Fund Sources Uses INell Net Assets 12/31/05 12/31/05 DO no.
1 General $7 944 440 $7 859 854 IS874 568 IS789 982 t3350128 S1 868335 92
2 Saeclal Revenue:
3 Community Develonment Fund 2891 471 589 494,080 25 382 136.736 I 155892 114
4 Cable Television 142325 8421 94 448 39 456 51 752 17 059 115
5 Librarv 612389 611,465 110814 19,890 5955 46 788 116
6 DAR.E Pronram 4800 9000 4,200 31 385 31385 117
7 Soecial Proiects 55031 7822 47 209 84 204 101398 118
6 C.H.A.S.E 1106 - 1106 54 685 54 275 119
9 Twenlv-First Centurv Grant 69291 64,987 - 4304 18652 13548 120
10 Confiscated Pronertv 3,424 11285 - 17,861 6476 6767 121
11 Local Law Enforcement Block Grant 56 3464 - 13408 56 36 122
12 Police Grants - Other 199211 199211 - - 123
13 Recreation Contributed Proiects 8365 23 699 14345 119679 104451 104 704 124
14 Contributed Proiects 27 978 15803 12175 35 797 36 076 125
15 Flex Benefit 11224 974 10250 51 493 58 090 126
16 Housinn and Redevelonment Authorilv:
17 Park view Villa North 538 285 I 532,001 - 6284 I 514,114 514 720 1 129
18 Park view Villa South 238,621 I 221 356 I - 17,2651 142887 163500 I 130
19 Rental Housinn 9881 15000 I - 114012\1 39 278 38927 I 131
20 EDA:
21 Economic Develooment Authorilv Admin 232 694 1 4120131 1223,791 II 140311011 1325 061 II 87 059 I 46
22 Buisness Revolvinn Loan Fund 10,7691 1 - I 10769 I 380 768 I 356965 I 132
23 Anoka Counlv CDBG 281,0311 294 294 - 11326311 -142899\1 89031 I 46
30 Debt Service:
31 Sheffield TIF Redevelonment 64,630 23,184 41,446 1393 027 32 402 128
32 Tax Increment Bonds 827137 14,415 920 750 1108028 10215 5474 138
33 Caoital Aooreciation Bonds of 1990 54 200 3,644 986 914427 12,676359 7,638 4660 46
34 Multi-Use Redevelonment Plan 23 608 7031 16577 119519 - 128
35 Tax Increment Refundino Bonds of 2004A 79 32,562 6323 126160 9275 9247 128
36 G.O.lmorovement1999A 10313 114,451 35241 168,897 516047 512385 128
37 G.O. ImnrovemenURevenue 2003A 5621 112342 255 221 148500 490 621 488 625 128
38 CaDltal Proiect:
39 MSA State Aid Street 625 020 299 263 1285 000 40 757 196,064 - 46
40 Canitallmnrovements General Government Buildi 72641 476871 72 500 331 730 3041804 3386 171 47
41 CaDital EouiDment ReDlacement General Govern 120,962 119810 72,199 73351 4 832 465 4796312 47
42 CaDitallmnrovements PIR Fund 591 384 1 ,293 090 63314 1638 392 550 627 370 966 47
43 Canitallmnrovement 2452 417 735 2770 732 801 169264 147
44 Downtown Parkino Maintenance 5032 41623 - 136591 191 592 236 377 147
45 Canital Sheffield Redevelonment - 641 700 000 699 359 912 492 913133 147
46 CaDitallrnDrovement Parks 46771 47 382 - 1611 1012567 1,007 978 147
47 CaoitallrnDrovement PWS 551 - 551 26 095 25,899 148
48 Canitallmnrovement Develonment 3 833,076 3 936 669 185 624 82031 1 588041 148014 47
49 Infrastructure ReDlacement 3658 600 50 000 53 058 197656 196 357 148
50 CaDital Enuinment Fire 6359 82163 - 75 804 275 820 273 562 148
51 CaDital Enuinment Cable TV 6,852 - - 6852 324331 321 898 148
52 CaDital Buildino Librarv - - - - 200 000 200 000 148
53 Police Comnuter Enuinment 494 17761 27801 10,534 10534 11400 149
54 TIF District #2 1,109 286 823 11473 - 149
55 TIF Medtronic 124150 141,329 17179 260 057 338 488 149
56 TIF Scattered Site 39 464 746 38718 48 850 48 682 149
57 TIF Transition Block 66519 110070 - 143551 13774 54 495 149
58 TIF Central Avenue 48 750 - - 48 750 48 750 48 642 149
59 Enterarlse:
180 Water 1 900 081 1 705 556 1109713 84812 2 803 832 293 839 153
1 214266 1 309 798 112,909 1208441 5301,908 658 259 156
62 Refuse 1 308310 1110657 1177915 19738 456518 395 549 159
Sewer 278 339 172542 1035 106832 670 617 154,088 162
164 liQuor 6742417 6,513,885 210747 17785 3 339 407 1 934 603 165
165 Internal Service:
66 Central Garaoe 522 903 359 727 197 500 65 676 466 983 397 640 169
67 Data Processinn 632 224,300 235 000 11332 676 970 666110 169
66 Insurance 472363 357 660 114703 1 228 046 1 185047 169
69 Compensated Absences 13,055 - 13,055 29,713 668,665 169
70 Total $29,413,317 $33029,855 $0 1$3,616538 $33 305,566 t23 698 786
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Favorable
(Unfavorable)
Budget Actual Variance
Revenues and transfers in:
Property taxes $5,005,995 $4,960,668 ($45,327)
Licenses and permits 318,800 344,372 25,572
Intergovernmental 1,914,954 1,890,697 (24,257)
Charges for services 451,566 478,488 26,922
Fines and forfeitures 120,000 127,555 7,555
Investment income 75,000 101,441 26,441
Other 40,526 41,219 693
Transfers in 461,938 467,929 5,991
Total 8,388,779 8,412,369 23,590
Expenditures and transfers out:
General government 1,652,256 1,567,486 84,770
Public safety 3,675,148 3,674,600 548
Public works 1,270,620 1,337,652 (67,032)
Parks and recreation 1,374,702 1,277,934 96,768
Contingencies 28,870 2,182 26,688
Transfers out 1,258,630 1,342,497 (83,867)
Total 9,260,226 9,202,351 57,875
Net increase (decrease) in fund balance ($871,447) ($789,982) $81,465
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+ Fund balance generally peaks at
December 31
+ Working capital reserve is needed for
the 1 st half of the year until July tax
settlement
+ City policy is to maintain 450/0 of
ensuing years budget
Fund Balance Component 2004 2005
Reserved for prepayments $23,302 $10,484
Designated for working capital 3,743,344 3,339,644
Undesignated 373,464
Total fund balance - December 31 $4,140,110 $3,350,128
2006 budgeted expenditures
Reserve requirement percentage
Reserve requirement
Balance available
Amount of fund balance under
reserve requirement
$8,410,751
x 45%
3,784,838
3,339,644
$445,194
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+ City policy is to maintain 450/0 of
ensuing years budget
December 31,
2004 2005
Designated for working capital
Reserved for prepayments
$12,585
3,260
$2,972
2,983
Total
$15,845
$5,955
$656,631
x 45%
295,484
200,000
2,972
$92,512
2006 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
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$2,000,000
$1,900,000
$1,800,000
$1. 700,000
$1,600,000
$1,500,000
$1,400,000
$1,300,000
$1,200,000
$1,100,000
$1,000,000
$900,000
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
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$2,000,000
$1,900,000
$1,800,000
$1,700,000
- $1,600,000
$1,500,000
$1,400,000
$1,300,000
$1,200,000
$1,100,000
$1,000,000
$900,000
,- $800,000
; $700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
Water Utility Fund
Revenue And Expenses
IIIIIIIIIIII Other Operating Expenses
c:::::l Water Purchases
- Operating Revenue
2001
2002
2003
2004
2005
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$1,400,000
$1,300,000
$1,200,000
$1,100,000
$1,000,000
$900,000
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
2001
$1,400,000
$1,300,000
$1,200,000
$1,100,000
$1,000,000
. $900,000
'. $800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
I
l $0
2005
2002
2003
2004
Sewer Utility Fund
Revenue and
Expenses
!Z::l Other Operating
.. ~~Sses
-- Operating Revenue
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$1,500,000
$1,400,000
$1,300,000
$1,200,000
$1,100,000
$1,000,000
$900,000
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
f
$0
2001
2002
2003
2004
2005
$1,500,000
$1,400,000
Refuse Utility
$1,300,000
$1,200,000
$1,100,000
$1,000,000
$900,000
IIIIIIIIIIII Operating Expenses
-- Operating Revenue
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
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$500,000
$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
2001
$500,000
Storm Sewer
$450,000
$400,000
$350,000
$300,000 11IIIIIIII Transfers to Debt Service
c:::::l Operating Expenses
$250,000 -- Operating Revenue
$200,000
$150,000
$100,000
$50,000
$0
2005
2003
2004
2002
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Top Valu Top Valu II Heights Liquor 2005 Total 2004 Total
Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent
Operating revenues $3,022,625 100.00% $2,400,413 100.00% $1,290,894 100.00% $6,713,932 100.00% $6,974,992 100.00%
Cost of goods sold 2,384,810 78.90% 1,861,753 77 .56% 964,298 74.70% 5,210,861 77.61% 5,318,331 76.25%
Gross margin 637,815 21.10% 538,660 22.44% 326,596 25.30"10 1,503,071 22.39% 1,656,661 23.75%
Other operating expenses 623,289 20.62% 440,326 18.34% 239,385 18.54% 1,303,000 19.41% 1,256,934 18.02%
Net income from operations $14,526 0.48% $98,334 4.10% $87,211 6.76% $200,071 2.98% $399,727 5.73%
The following comments relate to the
above table:
Sales decreased by $261 ,000
Operating expenses increased $46,606,
primarily related to labor costs
Gross margin percent decreased from
23.75% to 22.390/0 which resulted in reducing
gross margin by $91 ,000
The above three factors contributed to the
reduction in net income of $199,000
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Statement No. 44 Economic Condition Reporting: The Statistical Section - an amendment to
NCGA Statement 1. The City's Comprehensive Annual Financial Report (CAFR) includes a
statistical section. This section presents multi-year trend information on financial and non-
financial data. GASB 44 modifies the information that is required to be presented in a
statistical section. The provisions of this Statement are effective for the City's 2006 CAFR.
Statement No. 45 Accounting and Financial Reporting by Employers for Post Employment
Benefits Other Than Pension Plans. The components of employee compensation not only
include wages, healthcare benefits and pension benefits, but also include other
postemployment benefits (OPEB). OPEBs include postemployment healthcare benefits and
other postemployment benefits such as life insurance and long-term disability. Under current
practice, the common method of accounting for the cost of OPEBs is on a pay-as-you-go
basis. With the implementation of GASB No. 45, OPEB costs are recognized on financial
statements when they are earned, not when they are paid. The provisions of this statement
are effective for the City's 2007 CAFR.
Statement No. 46 Net Assets Restricted by Enabling Legislation - an amendment of GASB
Statement 34. Implementation requires that limitations on the use of net assets imposed by
enabling legislation be reported as restricted net assets. In the process of applying this
provision, some governments have had difficulty interpreting the requirement that those
restrictions be "legally enforceable." The confusion over this phrase has resulted in a
diversity of practice that has diminished comparability.
This Statement clarifies that a legally enforceable enabling legislation restriction is one that a
party external to a government - such as citizens, public interest groups, or the judiciary -
can compel a government to honor. The provisions of this Statement are effective for the
City's 2006 CAFR.
Statement No. 47 Accountingfor Termination Benefits. The provisions ofthis Statement are
effective for the City's 2006 CAFR.
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