HomeMy WebLinkAbout1995 Audit Report
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CITY OF ST. JOSEPH, MINNESOTA
Stearns County
AUDITED FINANCIAL STATEMENTS
As of
December 31,1995
CITY OF ST. JOSEPH, MINNESOTA
TABLE OF CONTENTS
ELECTED OFFICIALS AND ADMINISTRATION .. . . . . . . . . . . . . . . . . . . . . . . . . 1
INDEPENDENT AUDITORS' REPORT ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
GENERAL PURPOSE FINANCIAL STATEMENTS -
Combined Balance Sheet - All Fund Types and Account Groups. . . . . . . . . . . . . . 3
Combined Statement of Revenues, Expenditures and Changes in Fund Balance -
All Governmental Fund Types. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Combined Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual - General and Special Revenue Fund Types . . . . . . . . . . . . . . 5
Combined Statement of Revenues, Expenses and Changes in Retained
Earnings - All Proprietary Fund Types ................................. 6
Combined Statement of Cash Flows - All Proprietary Fund Types ............ 7
Notes to the Financial Statements ...................................... 8
COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS -
General Fund -
Comparative Balance Sheets ....................................... 35
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual .............................................. 36
Special Revenue Fund -
Combining Balance Sheet ......................................... 42
Combining Statement of Revenues, Expenditures and Changes in
Fund Balance .., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Debt Service Funds -
Combining Balance Sheet ......................................... 44
Combining Statement of Revenues, Expenditures and Changes in Fund
Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Enterprise Funds -
Combining Balance Sheet ......................................... 46
Combining Statement of Revenues, Expenses and Changes in Retained
Earnings .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Combining Statement of Cash Flows ................................ 48
Statement of General Long-Term Debt '" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SUPPLEMENTARY SCHEDULE-
Schedule of Sources and Uses of Public Funds for Municipal Development
District No.1, A Tax Increment Financing District ....................... 50
CITY OF ST. JOSEPH, MINNESOTA
TABLE OF CONTENTS
(Continued)
REPORT ON THE INTERNAL CONTROL STRUCTURE BASED ON AN AUDIT
OF THE GENERAL PURPOSE FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITIl'fG STANDARDS .......... 51
REPORT ON COMPLIANCE BASED ON AN AUDIT OF THE GENERAL
PURPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS AND MINNESOTA
STATUTES .. . ....... . . . ....... . .. ... . .... ........ .,. . . .... . . . . . . . . 53
FINDINGS ON COMPLIANCE WITH MINNESOTA STATUTES ............. 55
CORRECTIVE ACTION PLANNED BY THE CITY IN ORDER TO RESOLVE
CURRENT YEAR AUDIT FINDINGS ................................... 56
CITY OF ST. JOSEPH, MINNESOTA
ELECTED OFFICIALS AND ADMINISTRATION
December 31, 1995
Term
City Council Position Expires
Donald Reber Mayor December 31, 1996
Cory Ehlert Councilmember December 31, 1998
Ken Hiemenz Councilmember December 31, 1996
Bob Loso Councilmember December 31, 1998
Ross Rieke Councilmember December 31, 1996
Administration
Rachel Stapleton City Clerk!
Treasurer/
Administrator Appointed
Judy Weyrens Deputy Clerk Appointed
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Alvin M. Kern
Duane N. DeWenter
Loren M. Viere
Gerald A. Stover
g:K/ Kern, DeWenter, Vi ere, Ltd. Keith W. Julson
Dwayne B. Dockendorf
Certified Public Accountants David H. Hinnenkamp
INDEPENDENT AUDITORS' REPORT
March 7, 1996
Honorable Mayor and City Council
City of St. Joseph
St. Joseph, Minnesota
We have audited the general purpose financial statements of the City of St. Joseph, Minnesota as
of and for the year ended December 31, 1995, as listed in the table of contents. These financial
statements are the responsibility of the City's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and
government auditing standards. 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
opinion.
In our opinion, the general purpose financial statements referred to above present fairly, in all
material respects, the financial position of the City of St. Joseph, Minnesota, as of December 31,
1995, and the results of its operations and cash flows of its proprietary fund type for the year then
ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the general purpose financial
statements taken as a whole. The combining and individual fund financial statements and
supplementary schedule listed in the table of contents are presented for purposes of additional
analysis and are not a required part of the general purpose financial statements of City of St.
Joseph, Minnesota. Such information has been subjected to the auditing procedures applied in
the audit of the general purpose financial statements and, in our opinion, is fairly presented in all
material respects in relation to the general purpose financial statements taken as a whole.
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KERN, DEWENTER, VIERE, L TO.
2
220 Park Avenue South PO. Box 1304 Sf. Cloud, MN 56302
320-251-7010 FAX 320-251-1784
CITY OF ST. JOSEPH, MINNESOTA
COMBINED BALANCE SHEET -
ALL FUND TYPES AND ACCOUNT GROUPS
December 3 1, 1995
Governmental Fund Types
Special Debt
ASSETS AND OTHER DEBiTS General Revenue Service
ASSETS:
Cash and Investments (Including Cash
Equivalents) $ 1,116,815 $ 28,619 $ 1,087,139
Investments 0 0 0
Taxes Receivable -
Delinquent 6,327 0 821
Special Assessments Receivable -
Deferred 41,274 0 500,849
Delinquent 146 0 814
Accounts Receivable 4,044 0 9,250
Interest Receivable 15,442 0 0
Due from Other Governmental Units 62,829 0 528
Loans Receivable 7,220 0 0
Fixed Assets - Net 0 0 0
OTHER DEBITS:
Amount Available in Debt Service Funds 0 0 0
Amount to be Provided from Special
Assessments 0 0 0
Amount to be Provided for Compensated
Absences Payable 0 0 0
Amount to be Provided for Retirement of
General Long-Term Debt 0 0 0
TOTAL ASSETS AND OTHER DEBITS $ 1 ,254,097 $ 28,619 $ 1 ,599,40 1
LIABILITIES, EQUITY AND OTHER CREDITS
LIABiLITIES:
Accrued Liabilities $ 50,820 $ 0 $ 250
Due to Other Governmental Units 1,785 0 0
Contracts Payable 0 0 0
Deferred Revenue 47,747 0 502,484
Compensated Absences Payable 38,198 0 0
Capital Lease Obligation 0 0 0
Bonds Payable 0 0 0
Total Liabilities 138,550 0 502,734
EQUITY AND OTHER CREDITS:
Investment in General Fixed Assets 0 0 0
Contributed Capital 0 0 0
Retained Earnings (Deficit) 0 0 0
Fund Balance -
Reserved 299,014 0 1,096,667
Unreserved -
Designated 561,121 0 0
Undesignated _~255,412 _~__ 28,6J~_
Total Equity and Other Credits ~Il5,547 28,619 1,096,667
----
TOTAL LIABILITIES, EQUITY
AND OTHER CREDITS $ __ 1,254,097 $ _:?8,619 $ 1,599,40 I
---- -----
The notes to the financial statements are an integral part of this statement.
Proprietary
Fund Types Account Groups
General General Totals
Fixed Long-Term (Memorandum Only)
Enterprise Assets Debt 1995 1994
$ 381,861 $ 0 $ 0 $ 2,614,434 $ 2,683,368
99,192 0 0 99,192 156,007
0 0 0 7,148 4,695
0 0 0 542,123 584,640
0 0 0 960 1,936
68,219 0 0 81,513 200,889
0 0 0 15,442 13,279
0 0 0 63,357 129,844
0 0 0 7,220 7,220
3,568,434 1,448,058 0 5,016,492 4,748,268
0 0 1,096,667 1,096,667 1,117,126
0 0 501,663 501,663 538,554
0 0 40,412 40,412 34,621
0 0 216,670 216,670 314,015
$ 4,117,706 $ 1,448,058 $ 1,855,412 $ 10,303,293 $ 10,534,462
$ 45,850 $ 0 $ 0 $ 96,920 $ 153,980
10,888 0 0 12,673 17,482
0 0 0 0 35,561
0 0 0 550,231 591,271
14,201 0 40,412 92,811 74,825
0 0 0 0 4,695
0 0 1,815,000 1,815,000 1,965,000
70,939 0 1,855,412 2,567,635 2,842,814
0 1,448,058 0 1,448,058 1,219,934
4,137,239 0 0 4,137,239 4,137,239
(90,472) 0 0 (90,472) (79,697)
0 0 0 1,395,681 1,503,881
0 0 0 561,121 606,016
0 0 0 284,031 304,275
4,046,767 1,448,058 0 7,735,658 7,691,648
$ 4,117,706 $ 1,448,058 $ 1,855,412 $ 10,303,293 $ 10,534,462
3
CITY OF ST. JOSEPH, MINNESOTA
COMBINED STATEMENT OF REVENUES, EXPENOITURES,
ANO CHANGES IN FUNO BALANCE - ALL GOVERNMENTAL FUND TYPES
Year Ended December 31, 1995
Governmental Fund Types
Special Debt
General Revenue Service
REVENUES:
General Property Taxes $ 190,672 $ 0 $ 26,335
Special Assessments 25,961 0 77,625
Licenses and Permits 46,684 0 0
Intergovernmental 530,764 0 0
Charges for Services 137,782 0 0
Fines 62,732 0 0
Miscellaneous 114,425 2,995 120,989
Total Revenues 1,109,020 2,995 224,949
EXPENDITURES:
Current -
General Government 221,659 0 0
Public Safety 646,644 1,240 0
Public Works 239,451 0 0
Culture and Recreation 135,034 0 0
Miscellaneous 56 0 0
Capital Outlay 0 0 0
Oebt Service 0 0 266,219
Total Expenditures 1,242,844 1,240 266,219
EXCESS OF REVENUES OVER (UNDER)
EXPENOITURES (133,824) 1,755 (41,270)
FUND BALANCE - January 1 1,171,371 104,864 1,137,937
RESIDUAL EQUITY TRANSFERS 78,000 (78,000) 0
FUND BALANCE - December 31 $ 1,115,547 $ 28,619 $ 1 ,096,667
The notes to the financial statements are an integral part of this statement.
Totals
(Memorandum Only)
1995 1994
$ 217,007 $ 174,370
103,586 128,123
46,684 56,920
530,764 570,772
137,782 109,689
62,732 54,239
238,409 256,262
1,336,964 1,350,375
221,659 302,619
647,884 410,969
239,451 311,791
135,034 112,150
56 4,151
0 100,144
266,219 271,088
1,510,303 1,512,912
(173,339) (162,537)
2,414,172 2,576,709
0 0
$ 2,240,833 $ 2,414,172
4
CITY OF ST. JOSEPH, MINNESOTA
COMBINEO STATEMENT OF REVENUES, EXPENDITURES ANO
CHANGES IN FUNO BALANCE - BUDGET AND ACTUAL -
GENERAL ANO SPECIAL REVENUE FUND TYPES
Year Ended December 31, 1995
General Fund
Over
(Under)
Budget Actual Budget
REVENUES:
General Property Taxes $ 196,772 $ 190,672 $ (6,100)
Special Assessments 20,262 25,961 5,699
Licenses and Permits 38,175 46,684 8,509
Intergovernmental 503,158 530,764 27,606
Charges for Services 129,393 137,782 8,389
Fines 43,300 62,732 19,432
Miscellaneous 36,200 114,425 78,225
Total Revenues 967,260 1,109,020 141,760
EXPENOITURES:
Current -
General Government 232,893 221,659 (11,234)
Public Safety 502,190 646,644 144,454
Public Works 299,069 239,451 (59,618)
Culture and Recreation 111,723 135,034 23,311
Miscellaneous 900 56 (844)
Total Expenditures 1,146,775 1,242,844 96,069
REVENUES OVER (UNDER) EXPENOITURES $ (179,515) (133,824) $ 45,691
FUNO BALANCE - January 1, 1995 1,171,371
RESIOUAL EQUITY TRANSFER 78,000
FUND BALANCE - December 31, 1995 $ 1,115,547
The notes to the financial statements are an integral part of this statement.
Totals
Special Revenue Funds (Memorandum Only)
Over Over
(Under) (Under)
Budget Actual Budget Budget Actual Budget
$ 0 $ 0 $ 0 $ 196,772 $ 190,672 $ (6,100)
0 0 0 20,262 25,961 5,699
0 0 0 38,175 46,684 8,509
0 0 0 503,158 530,764 27,606
0 0 0 129,393 137,782 8,389
0 0 0 43,300 62,732 19,432
2,200 2,995 795 38,400 117,420 79,020
2,200 2,995 795 969,460 1,112,015 142,555
0 0 0 232,893 221,659 (11,234)
1,558 1,240 (318) 503,748 647,884 144,136
0 0 0 299,069 239,451 (59,618)
0 0 0 111,723 135,034 23,311
0 0 0 900 56 (844)
1,558 1,240 (318) 1,148,333 1,244,084 95,751
$ 642 1,755 $ 1,113 $ (178,873) (132,069) $ 46,804
104,864 1,276,235
(78,000) 0
$ 28,619 $ 1,144,166
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CITY OF ST. JOSEPH, MINNESOTA
COMBINED STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN RETAINED EARNINGS - ALL PROPRIETARY FUND TYPES
Year Ended December 31, 1995
With Comparative Totals for the Year Ended December 31, 1994
Totals
1995 1994
OPERATING REVENUES:
Charges for Services $ 389,768 $ 371,801
OPERATING EXPENSES:
Salaries and Related Taxes and Benefits 83,410 78,378
Utilities 21,503 20,363
Supplies 15,421 13,958
Sewer Use Rental 61 , 124 63,236
Postage 845 1,367
Repairs and Maintenance 8,542 4,266
Professional Fees 35,180 13,040
Fees and Tests 8,700 9,246
Dues and Subscriptions 256 275
Refuse Disposal 69,649 70,614
Depreciation 106,767 85,936
Insurance 14,687 8,730
Miscellaneous 905 545
Total Operating Expenses 426,989 369,9~
OPERATING INCOME (LOSS) (37,221) 1,847
NON-OPERATING REVENUES:
Interest 26,246 13,032
Other Revenues 200 150
Total Non-Operating Revenues 26,446 13,182
NET INCOME (LOSS) (10,775) 15,029
RETAINED EARNINGS (DEFICIT) - January 1 (79,697) (94,726)
RETAINED EARNINGS (DEFICIT) - December 31 $ (90,472) $ (79,697)
The notes to the financial statements are an integral part of this statement.
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CITY OF ST. JOSEPH, MINNESOTA
COMBINED STATEMENT OF CASH FLOWS -
ALL PROPRIETARY FUND TYPES
Year Ended December 31, 1995
With Comparative Totals for the Year Ended December 31, 1994
Totals
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Operating Income (Loss) $ (37,221) $ 1,847
Adjustments to Reconcile Operating Income (Loss) to
Net Cash Provided by Operating Activities:
Depreciation 106,767 85,936
Other Nonoperating Revenues 200 150
Change in Assets and Liabilities:
Decrease (Increase) in Accounts Receivable 30,013 (33,688)
Increase in Accrued Liabilities 33,321 1,984
Increase in Due to Other Governmental Units 4,087 44
Increase (Decrease) in Compensated Absences
Payable 2,252 (182)
Total Adjustments 176,640 54,244
Net Cash Provided by Operating Activities 139,419 56,091
CASH FLOWS FROM CAPITAL AND RELATED FINANCING
ACTIVITIES:
Capital Expenditures (146,867) (5,001)
Repayment of Contributed Capital 0 (3,725)
Net Cash Used for Capital and Related Financing Activities (146,867) (8,726)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest on Investments 26,246 13,032
Net Sale (Purchase) of Investments 56,815 (156,007)
Net Cash Used for Investing Activities 83,061 (142,975)
Net Increase (Decrease) in Cash and Cash Equivalents 75,613 (95,610)
Cash and Cash Equivalents, January 1 306,248 401,858
Cash and Cash Equivalents, December 31 $ 381,861 $ 306,248
The notes to the financial statements are an integral part of this statement.
7
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of St. Joseph, Minnesota, has a mayor-council form of government. A mayor and four
council members are elected by the voters of the City for two-year and four-year terms,
respectively.
The accounting policies of the City of St. Joseph conform to generally accepted accounting
principles.
A. Financial Reporting Entity
In accordance with GASB Statement No. 14, The Financial Reporting Entity, the financial
statements present the City and its component units. The City includes all funds, account
groups, organizations, institution~, agencies, departments, and offices that are not legally
separate from such. Component units are legally separate organizations for which the elected
officials of the City are financially accountable and are included within the financial
statements of the City because of the significance of their operational or financial
relationships with the City.
The City is considered financially accountable for a component unit if it appoints a voting
majority of the organization's governing body and it is able to impose its will on the
organization by significantly influencing the programs, projects, activities, or level of
services performed or provided by the organization, or there is a potential for the organization
to provide specific financial benefits to, or impose specific financial burdens on, the City.
As a result of applying the component unit definition criteria above, the St. Joseph Fire Relief
Association has been defined in accordance with GASB Statement No. 14 and is presented in
this report as follows:
Related Organization - The St. Joseph Fire Relief Association is organized as a nonprofit
organization, legally separate from the City, by its members to provide pension and other
benefits to such members in accordance with Minnesota Statutes. Its Board of Trustees is
appointed by the membership of the Association and not by the City Council. All funding is
conducted in accordance with Minnesota Statutes, whereby state aid flows to the Association,
tax levies are determined by the Association and are only reviewed by the City, and the
Association pays benefits directly to its members. The Association may certify tax levies to
Stearns County directly if the City does not carry out this function. Because the Association
is fiscally independent of the City, the financial statements ofthe Association have not been
included within the City's reporting entity. (See Note 3 for disclosures relating to the pension
plan operated by the Association.)
8
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. Fund Accounting
The accounts of the City are organized on the basis of funds and account groups, each of
which is considered a separate accounting entity. The operations of each fund are accounted
for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund
equity, revenues and expenditures or expenses, as appropriate. Government resources are
allocated to and accounted for in individual funds based upon the purposes for which they are
to be spent and the means by which expending activities are controlled. The various funds
are grouped, in the financial statements in this report, into five generic fund types and two
broad fund categories, described below.
Governmental Funds
The General Fund is the general operating fund of the City. It is used to account for all
financial resources except those required to be accounted for in another fund.
Special Revenue Funds are used to account for the proceeds of specific revenue sources
(other than expendable trusts or major capital projects) that are legally restricted to
expenditures for specified purposes. The City has two Special Revenue Funds.
Debt Service Funds are used to account for the accumulation of resources for, and the
payment of, general long-term debt principal, interest, and related costs. The City has
five Debt Service Funds.
Proprietary Funds
Ente:cprise Funds are used to account for operations (a) that are financed and operated in a
manner similar to private business enterprises--where the intent of the governing body is
that the costs (expenses, including depreciation) of providing goods or services to the
general public on a continuing basis be financed or recovered through user charges; or (b)
where the governing body has decided that periodic determination of revenues earned,
expenses incurred, or net income is appropriate for capital maintenance, public policy,
management control, accountability, or other purposes. The City maintains Refuse,
Water and Sewer Enterprise Funds.
9
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Fixed Assets and Long-Term Liabilities
The accounting and reporting treatment applied to the fixed assets and long-term liabilities
associated with a fund are determined by its measurement focus. All governmental funds are
accounted for on a spending or "financial flow" measurement focus. This means that only
current assets and current liabilities are generally included on their balance sheets. Their
reported fund balance (net current assets) is considered a measure of "available spendable
resources." Governmental fund operating statements present increases (revenues and other
financing sources) and decreases (expenditures and other financing uses) in net current assets.
Accordingly, they are said to present a summary of sources and uses of available spendable
resources during a period.
Fixed assets used in governmental fund type operations (general fixed assets) are accounted
for in the General Fixed Assets Account Group, rather than in governmental funds. Public
domain ("infrastructure") general fixed assets consisting of certain improvements other than
buildings, including roads, curbs and gutters, streets and sidewalks, are not capitalized by the
City. No depreciation has been provided on general fixed assets.
All fixed assets are valued at their historical cost or estimated historical cost if actual
historical cost is not available. Donated fixed assets are valued at their estimated fair value
on the date donated.
Long-term liabilities expected to be financed from governmental funds are accounted for in
the General Long-Term Debt Account Group, not in the governmental funds.
The two account groups are not "funds". They are concerned only with the measurement of
financial position. They are not involved with measurement of results of operations.
Because of their spending measurement focus, expenditure recognition for governmental
fund types is limited to exclude amounts represented by noncurrent liabilities. Since they do
not affect net current assets, such long-term amounts are not recognized as governmental
fund type expenditures or fund liabilities. They are instead reported as liabilities in the
General Long-Term Debt Account Group.
All proprietary funds are accounted for on a flow of economic resources measurement focus.
This means that all assets and all liabilities (whether current or noncurrent) associated with
the funds' activity are included on their balance sheets. Proprietary fund type operating
statements present increases (revenues) and decreases (expenses) in net total assets.
10
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Fixed Assets and Long-Term Liabilities (Continued)
Depreciation of all exhaustible fixed assets used by proprietary funds is charged as an
expense against their operations. Accumulated depreciation is reported on proprietary fund
balance sheets. Depreciation has been provided over the assets' estimated useful lives, which
range from five to fifty years, using the straight-line method.
D. Basis of Accounting
Basis of accounting refers to when revenues and expenditures or expenses are recognized in
the accounts and reported in the financial statements. Basis of accounting relates to the
timing of the measurement made, regardless of the measurement focus applied.
All governmental funds are accounted for using the modified accrual basis of accounting, in
which revenues are recognized when they become measurable and available as net current
assets.
The more significant revenues which have been accrued are intergovernmental revenues and
interest earnings.
Expenditures are generally recognized in the modified accrual basis of accounting when the
related fund liability is incurred. Exceptions to this general rule include sick pay and
principal and interest on general long-term debt, which are recognized when due.
All proprietary funds are accounted for using the accrual basis of accounting; revenues are
recognized when they are earned and expenses are recognized when they are incurred.
E. Budgetary Data
The City Council adopts an annual budget. The amounts shown in the financial statements as
"budget" represent the original budgeted amount and all revisions made during the year. The
City follows these procedures in establishing the budgetary data reflected in the financial
statements.
1. In August of each year, the City Administrator submits to the City Council a proposed
operating budget for the fiscal year commencing the following January 1. The operating
budget includes proposed expenditures and the means of financing them for the upcoming
year.
11
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. Budgetary Data (Continued)
2. Public hearings are conducted to obtain taxpayer comment.
3. Prior to December 31, the budget is legally enacted through passage of a resolution.
4. Formal budgetary integration is employed as a management control device during the
year for the General and Special Revenue Funds. . Formal budgetary integration is not
employed for Debt Service Funds because effective budgetary control is alternatively
achieved through general obligation bond indenture provisions. Budgetary control for
Capital Projects Funds is accomplished through the use of project controls.
5. The Budgets for the General and Special Revenue Funds are adopted on a basis consistent
with generally accepted accounting principles (GAAP).
F. Encumbrances
Encumbrances represent outstanding purchase orders and unfulfilled commitments that are
issued to outside vendors and budgeted in the current year but do not include amounts that
are set up as liabilities, amounts for personal services to be performed by City employees and
purchase orders applicable to the subsequent year's budget.
As of December 31, 1995, no outstanding encumbrances existed.
G. Cash and Investments (Including Cash Equivalents) (See Note 3)
Cash balances from all funds are combined and invested to the extent available in authorized
investments. Earnings from such investments are allocated to the respective funds on the
basis of applicable cash balance participation by each fund.
Investments are carried at cost which approximates market. Any premiums or discounts are
amortized over the maturity of the investment.
F or purposes of the Statement of Cash Flows of proprietary fund types, cash equivalents are
defined as short-term, highly liquid investments that are both:
a. readily convertible to known amounts of cash, or
b. so near their maturity that they present insignificant risk of changes in value because
of changes in interest rates.
12
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
G. Cash and Investments (Including Cash Equivalents) (See Note 3) (Continued)
The City's policy considers cash equivalents to be those that meet the above criteria and have
original maturities of three months or less.
H. Taxes Receivable
Delinquent taxes receivable represent the past six years of uncollected tax levies.
1. Special Assessments Receivable
Delinquent special assessments represent the past six years of uncollected special
assessments.
Deferred special assessments represent the principal portion of those assessments to property
owners for improvements made by the City. These assessments are made at various times by
City resolution and are collectible over periods ranging from ten to thirty years and bear
annual interest of 8 percent to 11.5 percent and are to be received in 1996 and years
thereafter.
J. Deferred Revenue
Deferred revenue represents delinquent taxes and deferred and delinquent assessments
receivable. This revenue is deferred until it is measurable and available as net current assets.
K. Compensated Absences
The City compensates employees who leave City service in good standing for all earned,
unused vacation. In addition, employees are compensated for unused sick leave (up to a
maximum of90 days) at 50% of the current regular rate of pay, provided the City's notice of
termination policy has been complied with.
13
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
L. Fund Equity
Fund equity is divided into sections as follows:
- Contributed capital represents fixed assets purchased by other funds and contributed to
the enterprise funds.
- Investment in General Fixed Assets represents the City's equity in general fixed assets.
- Retained earnings of enterprise funds are subdivided as follows:
The reserved account represents the portion of retained earnings set aside for specific
purposes.
Unreserved retained earnings is available for expending in future periods.
- Fund balance accounts are subdivided as follows:
Reserved accounts indicate the portion of fund balance which has been reserved for a
specific purpose.
Unreserved, designated accounts indicate the portion of fund balance which has been
designated for a specific purpose.
The unreserved, undesignated account is the portion of fund balance which is
available for budgeting and expending in future periods.
M. Revenues. Expenditures and Expenses
1. Revenues
Property taxes and special assessment principal and interest are recognized as revenue
when measurable and available. Portions of taxes paid by the State in the form of HAC A
and other tax credits are included in intergovernmental revenue.
Intergovernmental revenues are reported under the legal and contractual requirements of
the individual programs.
14
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
M. Revenues. Expenditures and Expenses (Continued)
1. Revenues (Continued)
Licenses and permits, charges for services, fines and forfeits, and miscellaneous revenues
(except investment earnings) are recorded as revenues when received in cash because
they are generally not measurable until then. Investment earnings are recorded when
earned because they are measurable and available.
2. Property Tax Collection Calendar
The City levies its property tax for the subsequent year during the month of December.
The property tax is recorded as revenue when it becomes measurable and available.
Steams County is the collecting agency for the levy and remits the collections to the City
three times a year. Taxes not collected as of December 31 each year are shown as
delinquent taxes receivable.
December 28 is the last day the City can certify a tax levy to the County Auditor for
collection the following year.
The County Auditor makes up the tax list for all taxable property in the City, applying the
applicable tax rate to the tax capacity of individual properties, to arrive at the actual tax
for each property. The County Auditor also collects all special assessments, except for
certain prepayments paid directly to the City.
The County Auditor turns over a list oftaxes and special assessments to be collected on
each parcel of property to the County Treasurer in January of each year.
The County Treasurer collects all taxes, and all special assessments, except as noted
above. The County Treasurer is required to mail copies of all personal property tax
statements by April 15 , and copies of all real estate tax statements by April 15, of each
year.
15
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
M. Revenues. Expenditures and Expenses (Continued)
2. Property Tax Collection Calendar (Continued)
Property owners are required to pay one-half of their real estate taxes due by May 15 and
the balance by October 15.
If taxes due May 15 are not paid on time, a penalty of3% is assessed on homesteaded
property, and 7% on non-homesteaded property. An additional 1 % penalty is added each
month the taxes remain unpaid, until October 15. If the taxes due May 15 are not paid by
October 15, a 2% penalty per month is added to homesteaded property and 4% per month
to non-homesteaded property until January 1.
If the taxes are not paid by January 1, further penalties are added. Penalties and interest
apply to both taxes and special assessments. There are some exceptions to the above
penalties, but they are not material.
Within 30 days after the tax settlement date, the County Treasurer is required to pay 70%
of the estimated collections of taxes and special assessments to the City Treasurer. The
County Treasurer must pay the balance to the City Treasurer within 60 days after
settlement, provided that after 45 days interest accrues at the rate of 8% per annum.
3. Expenditures
Expenditure recognition for governmental fund types includes only amounts represented
by current liabilities. Since noncurrent liabilities do not affect net current assets, they are
not recognized as governmental fund expenditures or fund liabilities. They are reported
as liabilities in the General Long-Term Debt Account Group.
4. Expenses
Enterprise funds recognize expenses when they are incurred.
N. Interfund Transactions
Quasi-external transactions are accounted for as revenues, expenditures or expenses.
Transactions that constitute reimbursements to a fund for expenditures or expenses initially
made from it that are properly applicable to another fund are recorded as expenditures or
expenses in the fund that is reimbursed.
16
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
N. Interfund Transactions (Continued)
All other interfund transactions, except quasi-external and reimbursements, are reported as
transfers. Nonrecurring or nonroutine permanent transfers of equity are reported as residual
equity transfers. All other interfund transfers are reported as operating transfers.
O. Total Columns on General Purpose Statements
Total columns on the general purpose financial statements are captioned "memorandum
only" to indicate that they are presented only to facilitate financial analysis. Data in these
columns do not present financial position, results of operations, or cash flows in conformity
with generally accepted accounting principles. Interfund eliminations have not been made in
the aggregation of these data.
P. Comparative Data
Comparative total data for the prior year have been presented in the accompanying financial
statements in order to provide an understanding of changes in the City's financial position
and operations. However, prior year totals by fund type have not been presented in each of
the statements since their inclusion would make the statements unduly complex and difficult
to read.
NOTE 2 - STEWARDSHIP. COMPLIANCE AND ACCOUNTABILITY
A. Fund Deficits
The following fund has deficit retained earnings at December 31, 1995:
Enterprise Fund -
Sewer $ 292,448
This deficit will be eliminated by future user charges.
17
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 2 - STEWARDSHIP. COMPLIANCE AND ACCOUNTABILITY (Continued)
B. Expenditures in Excess of Appropriations
Expenditures exceeded appropriations in the following fund for the year ended December 31,
1995:
Expenditures Appropriations
General $ 1,242,844 $ 1,146,775
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS
A. Assets
1. Cash and Investments (Including Cash Equivalents)
Cash balances of the City's funds are combined (pooled) and invested to the extent
available in various investments authorized by Minnesota State Statutes. Each fund's
portion of this pool (or pools) is displayed on the financial statements as "cash and
investments (including cash equivalents)." For purposes ofidentifying risk of investing
public funds, the balances and related restrictions are summarized below:
a. Deposits - Minnesota Statutes require that all deposits with financial institutions must
be collateralized in an amount equal to 110% of deposits in excess of FDIC insurance
(140% if collateralized with notes secured by first mortgages).
Category 1 - Deposits covered by Federal Depository Insurance (FDIC) and those
deposits collateralized with securities held by the City or by its agent in
the City's name.
Category 3 - Deposits which are not insured or collateralized.
Category Bank Carrying
1 -.L 3 Balance Amount
Bank Accounts $ 312,100 $ 0 $ 0 $ 312,100 $ 285,630
Certificates of
Deposit 939,953 0 10,047 950,000 950,000
Repurchase Agreement 0 Jl 50.000 50.000 50.000
Total Deposits $ 1.252.053 $ 0 $ 60.047 $ 1.312.1 00 $ 1 ,285.630
18
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
A. Assets (Continued)
1. Cash and Investments (Including Cash Equivalents) (Continued)
b. Investments - Minnesota State Statutes authorize the City to invest in obligations of
the U.S. Treasury, agencies, and instrumentalities, shares of investment companies
whose only investments are in the forementioned securities, obligations of the State of
Minnesota or its municipalities, bankers' acceptances, future contracts, repurchase and
reverse repurchase agreements, and commercial paper of the highest quality with a
maturity of no longer than 270 days. Investments held by the City at year end
classified as to credit risk are as follows:
Category 1 - Insured or registered, or securities held by the City's agent in the City's
name.
Category 2 - Uninsured and unregistered, with securities held by the counterparty's
trust department or agent in the City's name.
Category 3 - Uninsured and unregistered, with securities held by the counterparty or
by its trust department or agent but not in the City's name.
Category Carrying Market
1 ...L -L Amount Value
U.S. Government and
Federal Agency Notes
and Bonds $ 714,839 $ 0 $ 0 $ 714,839 $ 714,839
Negotiable Certificates
of Deposit 706,824 0 0 706,824 706,824
Brokered Money Market 6.113 --º --º 6.113 6.113
Total Investments $ 1.427.776 $ 0 $ 0 1,427,776 1,427,776
Total Deposits (See
Note 3 A.1.a.) 1,285,630 1,285,630
Petty Cash 220 220
Total Cash and Investments
(Including Cash Equivalents) $ 2.713.626 $ 2.713.626
19
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
A. Assets (Continued)
1. Cash and Investments (Including Cash Equivalents) (Continued)
b. Investments - (Continued)
The carrying amount is classified on the combined balance sheet as follows:
Carrying
Amount
Cash and Investments (Including Cash
Equivalents) $ 2,614,434
Investments 99 .192
Total $ 2.713.626
2. Due from Other Governmental Units
The following is a summary of due from other governmental units at December 31, 1995:
State of Stearns St. Joseph
Minnesota County Township Total
General Fund -
Property Taxes $ 0 $ 49,471 $ 0 $ 49,471
Federal Grants 5,907 0 0 5,907
New Fire Hall Costs ~ 0 7.451 7.451
Total General Fund 5,907 49,471 7,451 62,829
Debt Service Funds -
G.O. Bonds of 1986-
Property Taxes ~ 528 ~ 528
Total $ 5.907 $ 49.999 $ 7.451 $ 63.357
20
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
A. Assets (Continued)
3. Fixed Assets
A summary of changes in general fixed assets follows:
Balance Balance
1-1-95 Additions Disposals 12-31-95
Land $ 167,426 $ 0 $ 0 $ 167,426 v
Buildings 253,185 5,519 0 258,704/
Improvements Other than
Buildings 119,165 36,719 0 155,884./
Machinery and Equipment 358,140 230,154 (61,950) 526,344 v
Office Furniture 56,887 2,646 0 59,533 v'
Motor Vehic1es 104,857 0 0 104,857 v
Other Equipment 160.274 15.036 0 175.310 /
Total $ 1.219.934 $ 290.074 $(61.950) $ 1.448.058
A summary of Enterprise Fund fixed assets at December 31, 1995, is as follows:
Water Sewer
Fund Fund Total
Land and Land Improvements $ 12,996 $ 4,940 $ 17,936
Treatment Plant and Lines 779,895 1,874,045 2,653,940
Buildings 0 517,983 517,983
Water Storage Facility 1,207,017 0 1,207,017
Machinery and Equipment 34.969 131.351 166.320
Total Cost 2,034,877 2,528,319 4,563,196
Less: Accumulated Depreciation (255.526) (739.236) (994.762)
Net Fixed Assets $ 1.779.351 $ 1.789.083 $ 3.568.434
21
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities
1. Defined Benefit Pension Plans - Statewide
a. Plan Description
All full-time and certain part-time employees of the City ofSt. Joseph are covered by
defined benefit pension plans administered by the Public Employees Retirement
Association of Minnesota (PERA). PERA administers the Public Employees
. Retirement Fund (PERF) and the Public Employees Police and Fire Fund (PEPFF)
which are cost-sharing multiple-employer retirement plans. These plans are
established and administered in accordance with Minnesota Statutes, Chapters 353
and 356. PERF members belong to either the Coordinated Plan or the Basic Plan.
Coordinated members are covered by Social Security and Basic 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. The payroll for employees covered by PERF and PEPFF for the year
ended December 31, 1995 was $ 195,695 and $ 178,381, respectively; the City's total
payroll was $ 439,151.
PERA provides retirement benefits as well as disability benefits to members, and
benefits to survivors upon death of eligible members. Benefits are established by
State Statute, and vest after three years of credited service. The defined retirement
benefits are based on a member's highest average salary for any five successive years
of allowable service, age, and years of credit at termination of service. Two methods
are used to compute benefits for Coordinated and Basic Plan members. The retiring
member receives the higher of step-rate benefit accrual formula (Method 1) or a level
accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic
Plan member is 2 percent of average salary for each of the first 10 years of service
and 2.5 percent for each remaining year. For a Coordinated Plan member, the annuity
accrual rate is 1 percent of average salary for each of the first 10 years and 1.5 percent
for each remaining year. Using Method 2, the annuity accrual rate is 2.5 percent of
average salary for Basic Plan members and 1.5 percent for Coordinated Plan
members. For PEPFF members, the annuity accrual rate is 2.65 percent for each year
of service. For PERF members whose annuity is calculated using Method 1, and for
all PEPFF members, 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.
22
CITY OF ST. JOSEPH, MINNESOTA
i NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
1. Defined Benefit Pension Plans - Statewide (Continued)
a. Plan Description (Continued)
There are different types of annuities available to members upon retirement. A
normal annuity is a lifetime annuity that ceases upon the death of the retiree. No
survivor annuity is payable. There are also various types of joint and survivor annuity
options available which will reduce the monthly normal annuity amount, because the
annuity is payable over joint lives. Members may also leave their contributions in the
fund upon termination of public service, in order to qualify for a deferred annuity at
retirement age. Refunds of contributions are available at any time to members who
leave public service, but before retirement benefits begin.
The benefit provisions stated in the previous paragraphs of this section are current
provisions and apply to active plan participants. Vested, terminated employees who
are entitled to benefits but are not yet receiving them are bound by the provisions in
effect at the time they terminated their public service.
b. Contributions Required and Contributions Made
Minnesota Statutes Chapter 353 sets the rates for employer and employee
contributions. The City makes annual contributions to the pension plans equal to the
amount required by State statutes. According to Minnesota Statutes Chapter 356.215,
Subd. 4(g), the date of full funding required for the PERF and PEPFF is the year
2020. As part of the annual actuarial valuation, PERA's actuary determines the
sufficiency of the statutory contribution rates towards meeting the required full
funding deadline. The actuary compares the actual contribution rate to a "required"
contribution rate. The required contribution rate consists of (a) normal costs based on
entry age normal cost methods, (b) a supplemental contribution for amortizing any
unfunded actuarial accrued liability by the date required for full funding, and (c) an
allowance for administrative expenses. Current combined statutory contribution rates
and actuarially required contribution rates for the plans are as follows:
Statutory Rates Required
Employees Employer Rates *
PERF (Basic and Coordinated) 4.31% 4.60% 9.76%
PEPFF 7.60% 11.40% 19.00%
* The recommended rates scheduled above represent the required rates for fiscal
year 1995 contributions as reported in the July 1, 1994, actuarial valuation reports.
23
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
1. Defined Benefit Pension Plans - Statewide (Continued)
b. Contributions Required and Contributions Made (Continued)
Total contributions made by the City during fiscal year 1995 were:
Percentage of
Amounts Covered Payroll
Employees Employer Employees Employer
PERF $ 9,906 $ 10,491 4.23% 4.48%
PEPFF 13.557 20.335 7.60% 11.40%
Totals $ 23.463 $ 30.826
The City's contribution for the year ended December 31, 1995 to the PERF
represented .008 percent of total contributions required of all participating entities.
For the PEPFF, contributions for the year ended December 31, 1995, represented .060
percent of total contributions required of all participating entities.
c. Funding Status and Progress
1. Pension Benefit Obligation
The "pension benefit obligation" is a standardized disclosure measure of the
present value of pension benefits, adjusted for the effects of projected salary
increases and step-rate benefits, estimated to be payable in the future as a result of
employee service to date. The measure is the actuarial present value of credited
projected benefits and is intended to help users assess PERA's funding status on a
going-concern basis, assess progress made in accumulating sufficient assets to pay
benefits when due, and make comparisons among Public Employees Retirement
Systems and participating employers. The measure is independent of the actuarial
funding method used to determine required contributions, which is discussed in
Note B.l.b. PERA does not make separate measurements of assets and pension
benefit obligation for individual employers.
24
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
1. Defined Benefit Pension Plans - Statewide (Continued)
c. Funding Status and Progress (Continued)
1. Pension Benefit Obligation (Continued)
The pension benefit obligations as of June 30, 1995, are shown below:
(In Thousands)
PERF PEPFF
Total Pension Benefit Obligation $ 5,994,492 $ 1,113,225
Net Assets Available for Benefits,
at Cost (Market Values for PERF =
$ 5,266,688; PEPFF = $ 1,445,345) 5.074.357 1.356.179
Unfunded (Assets in Excess of) Pension
Benefit Obligation $ 920.135 $ (242.954)
The pension benefit obligation was determined as part of an actuarial valuation at
July 1, 1995.
For the PERF, significant actuarial assumptions used in the calculation of the
pension benefit obligation include (a) a rate of return on the investment of present
and future assets of 8.5 percent per year, compounded annually, prior to
retirement, and 5 percent per year, compounded annually, following retirement;
(b) projected salary increases taken from an age-related table which incorporates a
5 percent base inflation on assumption; c) payroll growth at 6 percent per year,
consisting of 5 percent for inflation and 1 percent due to growth in group size; (d)
post-retirement benefit increases that are accounted for by the 5 percent rate of
return assumption following retirement; and (e) mortality rates based on the 1983
Group Annuity Mortality Table set forward one year for retired members and set
back five years for each active member.
25
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
1. Defined Benefit Pension Plans - Statewide (Continued)
c. Funding Status and Progress (Continued)
1. Pension Benefit Obligation (Continued)
Actuarial assumptions used in the calculation of the PEPFF include (a) a rate of
return on the investment of present and future assets of 8.5 percent per year,
compounded annually, prior to retirement, and 5 percent per year, compounded
annually, following retirement; (b) projected salary increases of 6.5 percent per
year, compounded annually, attributable to the.effects of inflation; (c) post-
retirement increases that are accounted for by the 5 percent rate of return
assumption following retirement; and (d) mortality rates based on the 1971 Group
Annuity Mortality Table projected to 1984 for males and females.
2. Changes in Actuarial Assumptions and Methods
Since the July 1, 1994 actuarial valuation, there were no changes in actuarial
assumptions of the PERF and the PEPFF which impacted funding costs.
Potential changes in the actuarial assumptions used for the PEPFF may be made
in the future. Results of an experience study for the fund during the four-year
period ending June 30, 1994, disclosed (a) retirees are living longer; (b) the
expected active member death rate is declining; (c) the trend toward earlier
retirement continues; and (d) the pattern of salary increases varies substantially by
ages, with a strong merit and seniority component evident at the younger ages.
Based on these results, PERA will soon consider revising the actuarial assump-
tions for retirement age, mortality, payroll growth, and individual salary increases.
These changes, if adopted within fiscal year 1996, will significantly impact the
July 1, 1996 actuarial valuation of the PEPFF.
3. Changes in Benefit Provisions
The 1995 legislative session did not include any benefit improvements which
would impact funding costs for the PERF and the PEPFF.
26
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
1. Defined Benefit Pension Plans - Statewide (Continued)
d. Ten-Year Historical Trend Information
Ten-year historical trend information is presented in PERA's Comprehensive Annual
Financial Report for the year ended June 30, 1995. This information is useful in
assessing the pension plan's accumulation of sufficient assets to pay pension benefits
as they become due.
e. Related Party Investments
As of June 30, 1995, and for the fiscal year then ended, PERA held no securities
issued by the City or other related parties.
2. Defined Contribution Lump Sum Service Pension Plan - Volunteer Fire Relief
Association
a. Plan Description
The City contributes to the St. Joseph Fire Department Relief Association
("Association"), a single-employer public employee retirement system that acts as a
common investment and administrator for the City's firefighters.
Volunteer firefighters of the City are members of the St. Joseph Fire Department
Relief Association. Members are eligible for service pensions and disability pensions
at a pro-rate amount after 20 years of service and after arriving at age 50. Pension
benefits are determined by multiplying the accrued liability, as set forth in Minnesota
Statute 69.772, Subdivision 2, by the ratio of the lump sum service pension amount
provided in the bylaws of the Association to a service pension of $ 100 per year of
service. As of December 31, 1994, the bylaws provided an amount of $ 950 per year
of service. The bylaws do not provide for early vesting.
These benefit provisions and all other requirements are consistent with enabling state
statutes.
27
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
2. Defined Contribution Lump Sum Service Pension Plan - Volunteer Fire Relief
Association (Continued)
a. Plan Description (Continued)
The City levies property taxes at the discretion of and for the benefit of the fire relief
association and passes through state aids allocated to the plan, all in accordance with
enabling state statutes.
b. Related Party Investments
During 1994 and as of December 31, 1994, the association held no securities issued
by the City or other related parties.
c. Funding Status and Progress
The amount shown below as the "pension benefit obligation" is computed in
accordance with Minnesota Statutes using the formula as explained above.
Pension Benefit Obligation $ 314,282
Net A~ts Available for Benefits at Market 380.244
(Assets in Excess of) Pension Benefit Obligation,
as of December 31, 1994 $ (65.962)
As of the issuance of this report, amounts for December 31, 1995, were not available.
d. Contributions Required and Contributions Made
Financial requirements of the relief association are determined in accordance with
Minnesota Statutes as follows:
Normal Cost for Next Year (Increase in Pension Benefit
Obligation)
Plus: Estimated Expenses for Next Year and
10% of Any Deficits
Less: Anticipated Income Next Year and
10% of Any Surplus
Total contributions to the association in 1995 were $ 14,120.
28
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
3. Defined Contribution - Statewide
The City provides pension benefits for its elected local government officials through a
defined contribution plan administered by the Public Employees Retirement Association
(PERA). The Public Employees Defined Contribution Plan (PEDCP) is a multi-employer
deferred compensation plan. Elected officials who are covered by a public or private
pension plan because of their employment are not eligible to participate in the PEDCP.
Plan benefits depend solely on amounts contributed to the plan plus investment earnings.
Minnesota Statutes, Chapter 353D.03 requires that both the elected local government
official and the City contribute an amount equal to 5% of the elected local government
official's salary. There is no vesting period required to receive benefits in the PEDCP.
The City's total payroll in the year 1995 was $ 439,151. The City's contributions were
calculated using the base salary amount of $ 10,800. Both the City and the elected local
government official made the required 5% contribution, amounting to $ 540 from each
source, or $ 1,080 in total.
As of June 30, 1995, and for the fiscal year then ended, PERA held no securities issued
by the City or other related parties.
4. Deferred Revenue
Deferred revenue at December 31, 1995, consisted of:
Debt
General Service Total
Taxes Receivable -
Delinquent $ 6,327 $ 821 $ 7,148
Assessments Receivable -
Deferred 41,274 500,849 542,123
Delinquent 146 814 960
Total $ 47.747 $ 502.484 $ 550.231
29
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
5. Bonds Payable
The following is a summary of bond transactions for the year ended December 31, 1995:
General
Obligation General
Special Obligation
Assessment Revenue Total
Bonds Payable -
January 1, 1995 $ 1,520,000 $ 445,000 $ 1,965,000
Bonds Retired (120.000) (30.000) (150.000)
Bonds Payable -
December 31, 1995 $ 1.400.000 $ 415.000 $ 1,815.000
Bonds outstanding at December 31, 1995, comprise the following issues:
General Obligation Special Assessment Bonds:
$ 1,400,000 General Obligation Improvement Bonds
of 1986 due in annual installments of$ 65,000 through
December 31, 2001, interest at 5.25 to 7.75 percent $ 390,000
$ 200,000 General Obligation Improvement Bonds of
1992 due in annual installments of$ 10,000 to $ 20,000
through December 1,2007, interest at 4.60 to 6.40 percent 180,000
$ 365,000 General Obligation Improvement Bonds of 1992 -
Series B due in annual installments of$ 15,000 to $ 35,000
through December 1,2008, interest at 4.50 to 6.60 percent 335,000
$ 550,000 General Obligation Improvement Bonds of 1993
due in annual installments of $ 25,000 to $ 50,000 through
December 1,2008, interest at 3.00 to 5.30 percent 495.000
Total General Obligation Special Assessment Bonds 1,400,000
30
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
B. Liabilities (Continued)
5. Bonds Payable (Continued)
General Obligation Revenue Bonds:
$ 475,000 General Obligation Water Revenue Bonds
of 1992 due in annual installments of$ 30,000 to $ 50,000
through December 1,2005, interest at 4.00 to 6.00 percent $ 415.000
Total Bonds Payable $ 1.815.000
The annual requirements to amortize all bonded debt outstanding as of December 31,
1995, including interest payments of$ 678,893 are:
General
Obligation General
Year Ending Special Obligation
December 31. Assessment Revenue Total
1996 $ 209,685 $ 52,717 $ 262,402
1997 202,195 56,397 258,592
1998 194,505 54,753 249,258
1999 196,630 58,003 254,633
2000 188,125 55,923 244,048
2001-2005 634,945 277,660 912,605
2006-2008 312.355 0 312.355
Totals $ 1.938.440 $ 555.453 $ 2.493.893
31
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
C. Fund Equity
Fund equity balances are c1assifiedas follows to reflect the limitations and restrictions of the
respective funds:
1. Fund Balance
a. Reserved Fund Balance -
Reserved fund balance is comprised of the following:
General Debt Service
Fund Fund Total
Reserved for Fire $ 246,978 $ 0 $ 246,978
Reserved for Street Maintenance 58,196 0 58,196
Reserved for Police (6,160) 0 (6,160)
Reserved for Debt Service 0 1.096.667 1.096.667
Total $ 299.014 $ 1.096.667 $ 1.395.681
b. Unreserved fund balance is comprised of the following:
Special
General Revenue Total
Designated for Capital Expenditures $ 136,376 $ 0 $ 136,376
Designated for Debt Service 174,745 0 174,745
Designated for Working Capital 250,000 0 250,000
Undesignated 255.412 28.619 284.031
Total Unreserved $ 816.533 $ 28.619 $845.152
Fund Balance
2. Contributed Capital
Contributed capital in the Enterprise Funds represents fixed assets which were purchased
by other funds and transferred to the Enterprise Funds. Contributed capital for the years
ended December 31, 1995 and 1994, are as follows:
32
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 3 - DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (Continued)
C. Fund Equity (Continued)
2. Contributed Capital (Continued)
Water Sewer
Fund Fund Total
$ 1.624.338 $ 2.512.901 $ 4.137.239
NOTE 4 - SEGMENT INFORMATION FOR ENTERPRISE FUNDS
The City maintains three Enterprise Funds which provide refuse, water and sewer services.
Segment information for the year ended December 31, 1995, is:
Refuse Water Sewer
Fund Fund Fund Total
Operating Revenues $ 91,542 $ 120,741 $ 177,485 $ 389,768
Depreciation 0 37,869 68,898 106,767
Operating Income (Loss) 17,805 (41,446) (13,580) (37,221 )
Net Income (Loss) 19,748 (37,092) 6,569 (10,775)
Contributed Capital 0 1,624,338 2,512,901 4,137,239
Fixed Assets -
Additions 0 131,750 15,117 146,867
Net Working Capital 51,373 (4,410) 431,370 478,333
Total Assets 57,125 1,820,891 2,239,690 4,117,706
Total Equity 51,373 1,774,941 2,220,453 4,046,767
33
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1995
(Continued)
NOTE 5 - TAX INCREMENT DISTRICT
The City of St. Joseph is the administering authority for the following tax increment financing
district:
1. Name of District: Tax Increment District No.1
Type of District: Economic Development
Authorizing Law: Minnesota Statutes Sections 469.124 to 469.179
Established: December 15, 1994
Duration of District: No later than November 14,2005
Original Tax Capacity $ 12,177
Current Net Tax Capacity 14.804
Captured Tax Capacity
Retained by the City $ 2.627
Tax increments will be used to finance a loan payable to DBL Labs, Inc., in the amount of
$ 81,270. The loan has an eleven year maximum term with a net interest cost rate of 8 percent.
Payments will be funded utilizing a "pay-as-you-go" concept in which payments to DBL Labs,
Inc., will be made only upon remittance of tax increments to the City of St. Joseph from Stearns
County.
NOTE 6 - COMMITMENTS
The City has entered into a contract for the construction of a new fire hall, as follows:
Oisbursed
Project Through
Proiect Authorization December 31. 1995 Commitment
Hagemeister and Mack,
Architects, Inc. $ 45,250 $ 1,500 $ 43,750
34
~
COMBINING AND INDIVIDUAL FUND
FINANCIAL STATEMENTS
CITY OF ST. JOSEPH, MINNESOTA
THE GENERAL FUND
The General Fund accounts for all revenues and expenditures of a governmental unit which are
not accounted for in other funds, and it is usually the largest and most important accounting
activity for state and local governments. It normally receives a greater variety and number of
taxes and other general revenues than any other fund. This fund has flowing into it such
revenues as general property taxes, licenses and permits, fines and penalties, rents, charges for
current services, state-shared taxes, and interest earnings. The fund's resources also fmance a
wider range of activities than any other fund. Most of the current operations of governmental
units will be financed from this fund.
CITY OF ST. JOSEPH, MINNESOTA
GENERAL FUND
COMPARATIVE BALANCE SHEETS
December 31
1995 1994
ASSETS
Cash and Investments $ 1,116,815 $ 1,250,883
Taxes Receivable -
Delinquent 6,327 4,527
Special Assessments Receivable -
Deferred 41,274 47,844
Delinquent 146 178
Accounts Receivable 4,044 32,657
Interest Receivable 15,442 13,279
Due from Other Governmental Units 62,829 47,418
Loans Receivable 7,220 7,220
TOTAL ASSETS $ 1,254,097 $ 1 ,404,006
LIABILITIES AND FUND BALANCE
Liabilities:
Accrued Liabilities $ 50,820 $ 141,150
Due to Other Governmental Units 1,785 10,681
Deferred Revenue 47,747 52,549
Compensated Absences Payable 38,198 28,255
Total Liabilities 138,550 232,635
Fund Balance:
Reserved 299,014 365,944
Unreserved -
Designated 561,121 606,016
Undesignated 255,412 199,411
Total Fund Balance 1,115,547 1,171,371
TOTAL LIABILITIES AND FUND BALANCE $ 1 ,254,097 $ 1 ,404,006
35
CITY OF ST. JOSEPH, MINNESOTA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 1995
Over
(Under)
Budget Actual Budget
REVENUES:
General Property Tax $ 196,772 $ 190,672 $ (6,100)
Special Assessments 20,262 25,961 5,699
Licenses and Permits 38,175 46,684 8,509
Intergovernmental -
Federal Grants 0 14,465 14,465
State -
Local Government Aid 393,510 393,510 0
HACA 64,948 65,914 966
Police Aid 27,000 30,153 3,153
Fire Aid 14,300 15,995 1,695
County Grants 3,400 10,727 7,327
Total Intergovernmental 503,158 530,764 27,606 .
Charges for Services -
General Government 9,950 9,168 (782)
Public Safety - Fire 116,243 119,143 2,900
Culture and Recreation 3,200 _~~,471 6,271
Total Charges for Services 129,393 137,782 8,389
Fines 43,300 62,732 19,432
Miscellaneous -
Sale of Surplus Property 0 18,800 18,800
Interest 28,200 57,767 29,567
Refunds and Reimbursements 3,000 7,033 4,033
Contributions 5,000 30,825 25,825
Total Miscellaneous 36,200 114,425 _78,22~
TOTAL REVENUES 967,260 1, I 09,020 141,760
36
CITY OF ST. JOSEPH, MINNESOTA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 1995
(Continued)
Over
(Under)
Budget Actual Budget
EXPENDITURES:
General Government:
Mayor and Council -
Salaries and Benefits $ 19,199 $ 21,201 $ 2,002
Supplies 500 113 (387)
Travel and Conferences 2,575 1,546 (1,029)
Advertising 1,750 770 (980)
Insurance 600 882 282
Dues and Subscriptions 10,000 14,490 4,490
Other 650 895 245
Legislative Committees -
Legislative Bodies 3,000 2,775 (225)
Other 500 1,225 725
Elections -
Salaries and Benefits 0 26 26
Supplies 100 0 (100)
Professional Services 200 0 (200)
Other 600 0 (600)
Assessing -
Salaries and Benefits 8,398 9,288 890
Supplies 150 73 (77)
Travel and Conferences 100 85 (15)
Other 175 23 (152)
Administration -
Salaries and Benefits 63,357 63,429 72
Supplies and Maintenance 7,600 4,222 (3,378)
Telephone 3,500 1,891 (1,609)
Travel and Conferences 800 481 (319)
Insurance 1,200 1,734 534
Capital Expenditures 9,980 2,370 (7,610)
Other 3,100 2,275 (825)
Accounting -
Salaries and Benefits 38,513 38,386 (127)
Supplies 1,300 1,414 114
Travel and Conferences 400 0 (400)
Other 275 598 323
Independent Auditing -
Services and Charges 6,800 7,085 285
37
CITY OF ST. JOSEPH, MINNESOTA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET ANO ACTUAL
Year Ended December 31, 1995
(Continued)
Over
(Under)
Budget Actual Budget
EXPENDITURES: (Continued)
General Government: (Continued)
Legal -
Services and Charges $ 15,000 $ 9,857 $ (5,143)
Planning and Zoning-
Annexation Fee 800 122 (678)
Consolidation Study 5,000 777 (4,223)
Star City Program 9,885 6,826 (3,059)
General Government Buildings -
Salaries and Benefits 1,701 510 (1,191)
Supplies and Maintenance 1,670 1,803 133
Professional Services 1,600 2,096 496
Insurance 1,865 2,743 878
Utilities 7, 1 00 6,485 (615)
Capital Expenditures 2,000 10,561 8,561
Other 950 2,602 _____..1ß52
Total General Government 232,893 221,659 (11,234)
Public Safety:
Police -
Salaries and Benefits 214,208 240,364 26,156
Supplies and Maintenance 3,800 8,012 4,212
Professional Services 27,400 33,057 5,657
Travel and Conferences 500 260 (240)
Insurance 3,500 5,534 2,034
Advertising 600 446 (154)
Capital Expenditures 10,800 356 (10,444)
Other 1,050 1,616 566
Fire Protection -
Salaries and Benefits 12,930 5,697 (7,233)
Supplies and Maintenance 18,362 4,960 (13,402)
Professional Services 2,109 64 (2,045)
Travel and Conferences 4,000 4,486 486
Fire Protection 67,425 67,167 (258)
Insurance 10,500 16,30 I 5,801
Utilities 6,094 3,352 (2,742)
State Aid Reimbursement 15,900 15,995 95
Pension Relief Fund 17,940 14,120 (3,820)
Capital Expenditures 47,936 199,298 151,362
Other 4,405 1,699 (2,706)
38
CITY OF ST. JOSEPH, MINNESOTA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES ANO CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 1995
(Continued)
Over
(Under)
Budget Actual Budget
EXPENDITURES: (Continued)
Public Safety: (Continued)
Building Inspection -
Supplies $ 200 $ 4 $ (196)
Professional Services 9,200 6,910 (2,290)
Other 2,400 2,163 (237)
Communication Service -
Supplies and Maintenance 500 182 (318)
Telephone 3,000 3,952 952
Capital Expenditures 561 0 (561)
Automotive Service -
Supplies and Maintenance 7,600 9,137 1,537
Motor Vehicles 6,020 720 (5,300)
Emergency Management Service -
Professional Services 400 335 (65)
Travel 200 0 (200)
Capital Expenditures 1,500 0 (1,500)
Other 100 0 (100)
Animal Control -
Supplies 100 50 (50)
Professional Services 500 407 (93)
Other 450 0 (450)
Total Public Safety 502,190 646,644 144,454
Public Works:
Ordinance and Enforcement -
Salaries and Benefits 290 0 (290)
Professional Services 300 4,132 3,832
Other 500 0 (500)
Street Maintenance -
Salaries and Benefits 63,335 70,725 7,390
Supplies and Maintenance 10,345 11,846 1,501
Travel and Conferences 210 35 (175)
Insurance 6,000 8,326 2,326
Utilities 4,170 2,894 (1,276)
Capital Expenditures 141,798 87,857 (53,941 )
Other 515 516 1
39
CITY OF ST. JOSEPH, MINNESOTA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 1995
(Continued)
Over
(Under)
Budget Actual Budget
EXPENDITURES: (Continued)
Public Works: (Continued)
Ice and Snow Removal -
Salaries and Benefits $ 9,643 $ 10,998 $ 1,355
Supplies and Maintenance 5,650 4,090 (1,560)
Capital Expenditures 3,433 0 (3,433)
Other 0 1,050 1,050
Engineering -
Professional Services 20,000 11,094 (8,906)
Street Lighting -
Supplies and Maintenance 425 0 (425)
Utilities 24,000 20,190 (3,810)
Capital Expenditures 3,000 0 (3,000)
Street Cleaning -
Salaries and Benefits 3,140 3,548 408
Supplies and Maintenance 2,050 1,949 (101)
Other 265 201 (64)
Total Public Works 299,069 239,451 (59,618)
Culture and Recreation:
Participant Recreation -
Salaries and Benefits 95 8,755 8,660
Supplies and Maintenance 1,075 1,016 (59)
Professional Services 5,500 4,040 (1,460)
Insurance 550 809 259
Advertising 200 11 (189)
Ball Park and Skating Rink -
Salaries and Benefits 2,520 2,478 (42)
Supplies and Maintenance 825 21 (804)
Utilities 1,320 762 (558)
Capital Expenditures 2,039 342 (1,697)
Maintenance Shop -
Supplies and Maintenance 2,675 1,964 (711 )
Utilities 1,665 1,644 (21)
Other 1,664 0 (1,664)
40
CITY OF ST. JOSEPH, MINNESOTA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
Year Ended December 31, 1995
(Continued)
Over
(Under)
Budget Actual Budget
EXPENDITURES: (Continued)
Culture and Recreation: (Continued)
Park Areas -
Salaries and Benefits $ 26,880 $ 28,753 $ 1,873
Supplies and Maintenance 9,275 6,787 (2,488)
Insurance 600 1,874 1,274
Utilities 2,025 2,740 715
Capital Expenditures 50,040 71,034 20,994
Other 375 130 (245)
Shade Tree Disease Control -
Supplies and Maintenance 50 11 (39)
Travel and Conferences 200 66 (134)
Other 100 0 (100)
Community Support -
Insurance 300 441 141
Other 1,750 -~~~ (394)
Total Culture and Recreation 111,723 135,034 23,311
Miscellaneous:
Other 900 56 (844)
~.
TOTAL EXPENDITURES 1,146,775 1,242,844 ,/ 96,069
REVENUES OVER (UNDER) EXPENDITURES $ (179,515) (133,824) $ 45,691
FUND BALANCE - January 1 1,171,371
RESIDUAL EQUITY TRANSFER 78,000
FUND BALANCE - December 31 $ 1,11~47
41
CITY OF ST. JOSEPH, MINNESOTA
SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for revenues derived from specific taxes or other
earmarked revenue sources. They are usually required by statute, charter provision, or local
ordinance to finance particular functions or activities of government.
CITY OF ST. JOSEPH, MINNESOTA
SPECIAL REVENUE FUNDS
COMBINING BALANCE SHEET
December 31, 1995
With Comparative Totals for December 31, 1994
Recreation DARE Totals
Center Program 1995 1994
ASSETS
Cash and Investments $ 26,692 $ 1,927 $ 28,619 $ 34,874
Accounts Receivable 0 0 0 70,000
TOTAL ASSETS $ 26,692 $ 1,927 $ 28,619 $ 104,874
LIABILITIES AND
FUND BALANCE
Liabilities:
Accrued Liabilities $ 0 $ 0 $ 0 $ 10
Fund Balance:
Unreserved -
Undesignated 26,692 1,927 28,619 104,864
TOTAL LIABILITIES
AND FUND
BALANCE $ 26,692 $ 1,927 $ 28,619 $ 104,874
42
CITY OF ST. JOSEPH, MINNESOTA
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
Year Ended December 31, 1995
With Comparative Totals for the Year Ended December 31, 1994
Recreation DARE Minnesota Totals
Center Program Beautification 1995 1994
REVENUES:
Miscellaneous -
Interest $ 1,457 $ 0 $ 0 $ 1,457 $ 728
Contributions 0 1,538 0 1,53ª- 1,536
Total Revenues 1,457 1,538 0 2,995 2,264
EXPENDITURES:
Public Safety -
Salaries and Benefits 0 303 0 303 1 I 1
Supplies 0 937 0 937 271
Other 0 0 0 0 25
.....-----
Total Expenditures 0 1,240 0 1,240 407
EXCESS OF REVENUES OVER
EXPENDITURES 1,457 298 0 1,755 1,857
FUND BALANCE - January 1 25,235 1,629 78,000 104,864 103,007
RESIDUAL EQUITY TRANSFER 0 0 (78,000) (78,000) 0
-----------
FUND BALANCE - December 31 $ 26,692 $ 1,927 $ 0 $ 28,619_ $ 104,864
--
43
CITY OF ST. JOSEPH, MINNESOTA
DEBT SERVICE FUNDS
Debt Service Funds are created to account for the payment of interest and principal on long-term,
general obligation debt other than debt issued for and serviced primarily by a governmental
enterprise.
CITY OF ST. JOSEPH, MINNESOTA
DEBT SERVICE FUNOS
COMBINING BALANCE SHEET
December 31, 1995
With Comparative Totals for December 31, 1994
General
General General Obligation
Obligation Obligation Water
Improvement Improvement Revenue
Bonds Bonds Bonds
of1986 ofl992 of 1992
ASSETS
Cash and Investments $ 705,907 $ 38,555 $ 38,254
Taxes Receivable -
Delinquent 0 243 0
Special Assessments Receivable -
Deferred 79,200 52,192 0
Delinquent 275 0 0
Accounts Receivable 0 0 0
Due from Other Governmental Units 528 0 0
TOTAL ASSETS $ 785,910 $ _ 90,990 $ 38,254
LIABILITIES AND FUND BALANCE
Liabilities:
Accrued Liabilities $ 250 $ 0 $ 0
Deferred Revenue 79,475 52,435 0
Total Liabilities 79,725 52,435 0
Fund Balance:
Reserved for Debt Service 706,185 38,555 38,254
TOTAL LIABILITIES AND
FUND BALANCE $ 785,910 $ 90,990 $ 38,254
General General
Obligation Obligation
Improvement Improvement
Bonds Bonds Totals
of 1992-B of 1993 1995 1994
$ 149,162 $ 155,261 $ 1,087,139 $ 1,055,781
0 578 821 168
228,112 141,345 500,849 536,796
0 539 814 1,758
0 9,250 9,250 0
0 0 528 82,426
$ 377,274 $ 306,973 $ 1,599,401 $ 1,676,929
$ 0 $ 0 $ 250 $ 270
228,112 142,462 502,484 538,722
228,112 142,462 502,734 538,992
149,162 164,511 1,096,667 1,137,937
$ 377,274 $ 306,973 $ 1,599,401 $ 1,676,929
44
CITY OF ST. JOSEPH, MINNESOTA
OEBT SERVICE FUNOS
COMBINING STATEMENT OF REVENUES, EXPENOITURES
ANO CHANGES IN FUNO BALANCE
Year Ended Oecember 31, 1995
With Comparative Totals for the Year Ended Oecember 31, 1994
General
General General Obligation
Obligation Obligation Water
Improvement Improvement Revenue
Bonds Bonds Bonds
of1986 of1992 of 1992
REVENUES:
General Property Taxes $ 0 $ 7,915 $ 0
Special Assessments 26,633 3,261 0
Miscellaneous -
Interest 42,396 2,495 2,344
Other 4,800 0 25,000
Total Revenues 73,829 13,671 27,344
EXPENDITURES:
Miscellaneous 0 0 0
Oebt Service -
Bond Principal 65,000 10,000 30,000
Bond Interest and Fiscal Charges 35,213 11,256 23,978
Total Expenditures 100,213 21,256 - 53,978
EXCESS OF REVENUES OVER (UNOER)
EXPENDITURES (26,384) (7,585) (26,634)
FUND BALANCE - January 1 732,569 46,140 64,888
RESIDUAL EQUITY TRANSFERS 0 0 0
FUNO BALANCE - December 31 $ 706,185 $ 38,555 $ 38,254
General General
Obligation Obligation
Improvement Improvement
Bonds Bonds Totals
of 1992-B of 1993 1995 1994
$ 0 $ 18,420 $ 26,335 $ 6,831
29,583 18,148 77,625 106,954
8,075 9,529 64,839 26,075
12,800 13,550 56,150 104,085
50,458 59,647 224,949 243,945
0 0 0 2,153
15,000 30,000 150,000 145,000
21,032 24,740 116,219 126,088
36,032 54,740 266,219 273,241
14,426 4,907 (41,270) (29,296)
134,736 159,604 1,137,937 953,754
0 0 0 213,479
$ 149,162 $ 164,511 $ 1,096,667 $ 1,137,937
45
CITY OF ST. JOSEPH, MINNESOTA
ENTERPRISE FUNDS
Enterprise Funds are established to account for the financing of self-supporting activities of
governmental units which render services on a user charge basis to the general public. The most
universal type of governmental enterprise is the public utility engaged in the provision of such
basic services as water, electricity, and natural gas. Sanitary sewer systems financed by user
charges have also assumed the status of public utility operations in many urban areas, and many
cities have combined water and sewer systems under the same management.
CITY OF ST. JOSEPH, MINNESOTA
ENTERPRISE FUNOS
COMBINING BALANCE SHEET
Oecember 31, 1995
With Comparative Totals for December 31, 1994
Refuse Water Sewer
Fund Fund Fund
ASSETS
Current Assets:
Cash and Cash Equivalents $ 41,948 $ 11 ,122 $ 328,791
Investments 0 12,236 86,956
Accounts Receivable 15,177 18,182 34,860
Total Current Assets 57,125 41,540 450,607
Fixed Assets:
Land and Land Improvements 0 12,996 4,940
Treatment Plant and Lines 0 779,895 1,874,045
Buildings 0 0 517,983
Water Storage Facility 0 1,207,017 0
Machinery and Equipment 0 34,969 131,351
0 2,034,877 2,528,319
Less: Accumulated Oepreciation 0 (255,526) (739,236)
Net Fixed Assets 0 1,779,351 1,789,083
TOTAL ASSETS $ 57,125 $ 1 ,820,891 $ 2,239,690
LIABILITIES AND FUNO EQUITY
Current Liabilities:
Accrued Liabilities $ 5,752 $ 36,872 $ 3,226
Due to Other Governmental Units 0 354 10,534
Compensated Absences Payable 0 8,724 5,477
Total Current Liabilities 5,752 45,950 19,237
Fund Equity:
Contributed Capital 0 1,624,338 2,512,901
Retained Earnings -
Unreserved (Deficit) 51,373 150,603 (292,448)
Total Fund Equity 51,373 1,774,941 2,220,453
TOTAL LIABILITIES ANO
FUNO EQUITY $ 57,125 $ 1,820,891 $ 2,239,690
Totals
1995 1994
$ 381,861 $ 306,248
99,192 156,007
68,219 98,232
549,272 560,487
17,936 17,936
2,653,940 2,522,190
517,983 517,983
1,207,017 1,207,017
166,320 151,203
4,563,196 4,416,329
(994,762) (887,995)
3,568,434 3,528,334
$ 4,117,706 $ 4,088,821
$ 45,850 $ 12,529
10,888 6,801
14,201 11,949
70,939 31,279
4,137,239 4,137,239
(90,472) (79,697)
4,046,767 4,057,542
$ 4,117,706 $ 4,088,821
46
CITY OF ST. JOSEPH, MINNESOTA
ENTERPRISE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN RETAINED EARNINGS
Year Ended December 31, 1995
With Comparative Totals for the Year Ended December 31, 1994
Refuse Water Sewer
Fund Fund Fund
OPERATING REVENUES:
Charges for Services $ 91,542 $ 120,741 $ 177,485
OPERATING EXPENSES:
Salaries and Related Taxes and
Benefits 1,735 46,581 35,094
Utilities 0 15,328 6,175
Supplies 413 10,403 4,605
Sewer Use Rental 0 0 61 , 124
Postage 272 301 272
Repairs and Maintenance 176 7,582 784
Professional Fees 240 32,038 2,902
Fees and Tests 260 5,592 2,848
Dues and Subscriptions 0 241 15
Refuse Disposal 68,623 0 1,026
Depreciation 0 37,869 68,898
Insurance 1,618 5,928 7,141
Miscellaneous 400 324 181
Total Operating Expenses 73,737 162,187 191,065
OPERATING INCOME (LOSS) 17,805 (41,446) (13,580)
NON-OPERATING REVENUES:
Interest 1,764 4,333 20,149
Other Revenues 179 21 0
Total Non-Operating Revenues 1,943 4,354 20,149
NET INCOME (LOSS) 19,748 (37,092) 6,569
RETAINED EARNINGS (DEFICIT) - January 1 31,625 187,695 (299,017)
RETAINED EARNINGS (DEFICIT) - December 31 $ 51 ,373 $ 150,603 $ (292,448)
Totals
1995 1994
$ 389,768 $ 371,801
83,410 78,378
21,503 20,363
15,421 13,958
61,124 63,236
845 1,367
8,542 4,266
35,180 13,040
8,700 9,246
256 275
69,649 70,614
106,767 85,936
14,687 8,730
905 545
426,989 369,954
(37,221) 1,847
26,246 13,032
200 150
26,446 13,182
(10,775) 15,029
(79,697) (94,726)
$ (90,472) $ (79,697)
47
CITY OF ST. JOSEPH, MINNESOTA
ENTERPRISE FUNOS
COMBINING STATEMENT OF CASH FLOWS
Year Ended Oecember 31, 1995
With Comparative Totals for the Year Ended Oecember 31, 1994
Refuse Water Sewer
Fund Fund Fund
CASH FLOWS FROM OPERATING ACTIVITIES:
Operating Income (Loss) $ 17,805 $ (41,446) $ (13,580)
Adjustments to Reconcile Operating Income
(Loss) to Net Cash Provided by Operating
Activities:
Oepreciation 0 37,869 68,898
Other Non-Operating Revenues 179 21 0
Change in Assets and Liabilities:
Decrease (Increase) in Accounts
Receivable 1,154 15,601 13,258
Increase (Oecrease) in Accrued
Liabilities (145) 32,346 1,120
Increase (Decrease) in Due to Other
Governmental Units (23) (325) 4,435
Increase (Oecrease) in Compensated
Absences Payable 0 1,826 426
Total Adjustments 1,165 87,338 88,137
Net Cash Provided by Operating Activities 18,970 45,892 74,557
CASH FLOWS FROM CAP IT AL ANO RELA TEO
FINANCING ACTIVITIES:
Capital Expenditures 0 (131,750) (15,117)
Repayment of Contributed Capital 0 0 0
Net Cash Used by Capital and Related Financing
Activities 0 (131,750) (15, 11 7)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest on Investments 1,764 4,333 20,149
Net Sale (Purchase) of Investments 7,339 22,984 26,492
Net Cash Provided (Used) by Investing Activities 9,103 27,317 46,641
Net Increase (Oecrease) in Cash and Cash
Equivalents 28,073 (58,541) 106,081
Cash and Cash Equivalents, January 1 13,875 69,663 222,710
Cash and Cash Equivalents, Oecember 31 $ 41 ,948 $ 11 , 122 $ 328,791
Totals
1995 1994
$ (37,221 ) $ 1,847
106,767 85,936
200 150
30,013 (33,688)
33,321 1,984
4,087 44
2,252 (182)
176,640 54,244
139,419 56,091
(146,867) (5,001)
0 (3,725)
(146,867) (8,726)
26,246 13,032
56,815 (156,007)
83,061 (142,975)
75,613 (95,610)
306,248 401,858
$ 381,861 $ 306,248
48
CITY OF ST. JOSEPH, MINNESOTA
STATEMENT OF GENERAL LONG-TERM DEBT
December 31, 1995
1995 1994
AMOUNT AVAILABLE AND TO BE PROVIDED FOR
THE PAYMENT OF GENERAL LONG-TERM DEBT:
Amount Available in Debt Service Funds $ 1,096,667 $ 1,117,126
Amount to be Provided fÌ'om Special Assessments 501,663 538,554
Amount to be Provided for Compensated Absences Payable 40,412 34,621
Amount to be Provided for Retirement of General Long-Term
Debt 216,670 314,015
TOTAL AVAILABLE AND TO BE PROVIDED $ 1,855,412 $ 2,004,316
GENERAL LONG-TERM DEBT:
Compensated Absences Payable $ 40,412 $ 34,621
Capital Lease Obligation 0 4,695
Bonds Payable 1,815,000 1,965,000
TOTAL GENERAL LONG-TERM DEBT $ 1,855,412 $ 2,004,316
49
SUPPLEMENTARY SCHEDULES
CITY OF ST. JOSEPH, MINNESOTA
SCHEDULE OF SOURCES AND USES OF PUBLIC FUNDS
FOR MUNICIPAL DEVELOPMENT DISTRICT NO. 1 -
TAX INCREMENT FINANCING DISTRICT NO. 1
December 31, 1995
Accounted
Original for in Current Amount
Budget Prior Years Year Remaining
SOURCES OF FUNDS:
Tax Increments $ 128,395 $ 0 $ 0 $ 128,395
Note Proceeds 81,270 0 0 81,270
Total Sources of Funds 209,665 0 0 209,665
USES OF FUNDS:
Site Excavation 20,000 0 0 20,000
Utility Improvements 20,000 0 0 20,000
Site Improvements 10,000 0 0 10,000
Professional Services -
City Engineer Consultant 10,000 0 0 10,000
Legal Expense 3,000 0 0 3,000
Planning Consultant -
Steams County HRA 3,500 0 0 3,500
Contingencies 1,000 0 0 1,000
Administrative Expenses-
General Administration 1,470 0 0 1,470
Miscellaneous 500 0 0 500
Debt Service -
Principal 81,270 0 0 81,270
Interest 34,286 0 0 34,286
Finance Costs-
Capitalized Interest 11,800 0 0 11,800
Other Construction 12,839 0 0 12,839
Total Uses of Funds 209,665 0 0 209,665
DISTRICT BALANCE $ 0 $ 0 $ 0 $ 0
50
CITY OF ST JOSEPH, MINNESOTA
REPORT ON THE INTERNAL CONTROL STRUCTURE
BASED ON AN AUDIT OF THE GENERAL PURPOSE FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
March 7, 1996
Honorable Mayor and
City Council
City of St. Joseph
St. Joseph, Minnesota
We have audited the general purpose [mancial statements of the City ofSt. Joseph, Minnesota, as
of and for the year ended December 31, 1995, and have issued our report thereon dated March 7,
1996.
We conducted our audit in accordance with generally accepted auditing standards and
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 general purpose financial statements are free of material misstatement.
In planning and performing our audit of the general purpose financial statements of the City of
St. Joseph, Minnesota, for the year ended December 31, 1995, we considered its internal control
structure in order to determine our auditing procedures for the purpose of expressing our opinion
on the financial statements and not to provide assurance on the internal control structure.
The management ofthe City of St. Joseph, Minnesota, is responsible for establishing and
maintaining an internal control structure. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related costs of
internal control structure policies and procedures. The objectives of an internal control structure
are to provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition, and that transactions are executed
in accordance with management's authorization and recorded properly to permit the preparation
of general purpose financial statements in accordance with generally accepted accounting
principles. Because of inherent limitations in any internal control structure, errors or
irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of
the structure to future periods is subject to the risk that procedures may become inadequate
because of changes in conditions or that the effectiveness of the design and operation of policies
and procedures may deteriorate.
51
For the purpose of this report, we have classified the significant internal control structure policies
and procedures in the following categories: cash receipts, cash disbursements, cash and
investment balances, receivables, payables, payrolls, other assets and liabilities and general
ledger.
For all of the internal control structure categories listed above, we obtained an understanding of
the design of relevant policies and procedures and whether they have been placed in operation,
and we assessed control risk.
We noted a certain matter involving the internal control structure and its operation that we
consider to be a reportable condition under standards established by the American Institute of
Certified Public Accountants. Reportable conditions involve matters coming to our attention
relating to significant deficiencies in the design or operation of the internal control structure that,
in our judgment, could adversely affect the City's ability to record, process, summarize, and
report financial data consistent with the assertions of management in the general purpose
financial statements.
1. The City does not have adequate segregation of accounting duties due to a limited number of
office employees. Management has determined that this weakness is not practical to correct.
2. See Findings on Compliance with Minnesota Statutes.
A material weakness is a reportable condition in which the design or operation of one or more of
the specific internal control structure elements does not reduce to a relatively low level the risk
that errors or irregularities in amounts that would be material in relation to the general purpose
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 structure would not necessarily disclose all matters in
the internal control structure that might be reportable conditions and, accordingly, would not
necessarily disclose all reportable conditions that are also considered to be material weaknesses
as defined above. However, we believe the reportable condition described above is not a
material weakness.
We also noted other matters involving the internal control structure and its operation that we
have reported to the management of the City of St. Joseph, Minnesota, in a separate letter dated
March 7, 1996.
This report is intended for the information of management and the City Council. However, this
report is a matter of public record and its distribution is not limited.
A:e;n,~ 1/~/.JId.
KERN, DEWENTER, VIERE, LTD.
52
CITY OF ST JOSEPH, MINNESOTA
REPORT ON COMPLIANCE BASED ON AN AUDIT OF
THE GENERAL PURPOSE FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT
AUDITING STANDARDS AND MINNESOTA STATUTES
March 7, 1996
Honorable Mayor and City Council
City ofSt. Joseph
St. Joseph, Minnesota
We have audited the general purpose financial statements of the City ofSt. Joseph, Minnesota,
for the year ended December 31, 1995, and have issued our report thereon dated March 7, 1996.
We conducted our audit in accordance with generally accepted auditing standards; Government
Auditing Standards, issued by the Comptroller General of the United States; and the provisions
of the Minnesota Legal Compliance Audit Guide for Local Government, promulgated by the
Legal Compliance Task Force pursuant to Minnesota Statutes Sec. 6.65. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.
General Purpose Financial Statements
Compliance with laws, regulations, contracts, and grants applicable to the City of St. Joseph,
Minnesota, is the responsibility of the City's management. As part of obtaining reasonable
assurance about whether the financial statements are free of material misstatement, we performed
tests of the City's compliance with certain provisions of laws, regulations, contracts, and grants.
However, the objective of our audit of the general purpose financial statements was not to
provide an opinion on overall compliance with such provisions. Accordingly, we do not express
such an opinion.
The results of our tests indicate that, with respect to the items tested, the City of St. Joseph,
Minnesota, complied, in all material respects, with the provisions referred to in the preceding
paragraph. With respect to items not tested, nothing came to our attention that caused us to
believe that the City had not complied, in all material respects, with those provisions.
53
Legal Compliance
The Minnesota Legal Compliance Audit Guide for Local Government covers five main
categories of compliance to be tested: contracting and bidding, deposits and investments,
conflicts of interest, public indebtedness, and claims and disbursements. Our study included all
of the listed categories and other statutes as we considered necessary under the circumstances.
The results of our tests indicate that for the items tested the City complied with the material
terms and conditions of applicable legal provisions, except as described in the accompanying
Schedule of Findings on Compliance with Minnesota Statutes. Further, for the items not tested,
based on our audit and the procedures referred to above, nothing came to our attention to indicate
that the City had not complied with such legal provisions.
This report is intended for the information of management and the City Council. However, this
report is a matter of public record and its distribution is not limited.
~o/M~/~~
KERN, DEWENTER, VI ERE, LTD.
54
CITY OF ST. JOSEPH, MINNESOTA
FINDINGS ON COMPLIANCE WITH MINNESOTA STATUTES
Year Ended December 31, 1995
CURRENT YEAR FINDINGS
Collateral
Minnesota Statutes Sec. 118.01 and 118.10, provide that all deposits with financial institutions
must be collateralized in an amount equal to 110% of deposits in excess of FDIC insurance. The
deposits of the City at December 31, 1995 were unsecured as follows:
110% of Deposits Market Value of
in Excess of FDIC Collateral at
at December 31. 1995 December 31. 1995 Unsecured
First State Bank of St. Joseph $ 1.278.310 $ 1.212.258 $ 66.052
To conform to state statutes, we recommend that the City negotiate current and future collateral
with the aforementioned depository, and that the City's collateral for deposits be reviewed on a
monthly basis.
PRIOR YEAR FINDINGS
None
55
CITY OF ST JOSEPH, MINNESOTA
CORRECTIVE ACTION PLANNED BY THE CITY IN
ORDER TO RESOLVE CURRENT YEAR AUDIT FINDINGS
CURRENT YEAR FINDING: The City was not properly collateralized at December 31, 1995,
in accordance with Minnesota Statutes Sec. 118.01 and 118.10.
CORRECTIVE ACTION PLANNED: The City will monitor collateral to ensure proper
collateralization.
56