HomeMy WebLinkAbout2006 Audit Report
CITY OF ST. JOSEPH
Stearns County, Minnesota
Audited Financial Statements
For the Fiscal Year Ended December 31,2006
CITY OF ST. JOSEPH
Stearns County, Minnesota
TABLE OF CONTENTS
ELECTED OFFICIALS AND ADMINISTRATION.. ..................... ........ ....... ................. 1
INDEPENDENT AUDITORS' REPORT....................... ... ... ............ ................................ 2
MANAGEMENT'S DISCUSSION AND ANALYSIS ..................................................... 4
BASIC FINANCIAL STATEMENTS:
Government- Wide Financial Statements:
Statement ofN et Assets........ .................................... ..... .................................................. 16
Statement of Activities................................... ..... .......... ....... .... ..... ... ... ............ .......... ....... 17
Fund Financial Statements:
Balance Sheet - Governmental Funds......................... ................ ........... .... ..................... 18
Reconciliation of the Balance Sheet to the Statement of Net Assets-
Governmental Funds............... ....................................... ............................................... 20
Reconciliation of the Statement of Net Assets - Business-Type Activities .................... 21
Statement of Revenues, Expenditures and Changes in Fund Balances-
Governmental Funds........ ....................................... ....... ............................................... 22
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances to the Statement of Activities - Governmental Funds ......................... 24
Reconciliation of the Revenues, Expenses and Changes in Net Assets -
Business-Type Activities........................................ ...................................................... 25
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - General Fund..... ................ ............. ......................... .............. ........ .......... 26
Statement of Net Assets - Proprietary Funds .................................................................. 27
Statement of Revenues, Expenses and Changes in Fund Net Assets-
Proprietary Funds....................................... ................................................................... 28
Statement of Cash Flows - Proprietary Funds ............ ......... ...... ....... ............................... 29
Notes to the Financial Statements.......................................................................................... 30
SUPPLEMENTARY INFORMATION:
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and
Actual - Governmental Funds...... ...................................................................................... 54
Combining Balance Sheet - Nonmajor Governmental Funds ............................................... 57
Combining Statement of Revenues, Expenditures and Changes in Fund Balances -
Nonmajor Governmental Funds... ....... ... .......... ..... ..... ............. ................. ........................... 64
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS......................... 71
REPORT ON LEGAL COMPLIANCE ............................................................................ 73
SCHEDULE OF FINDINGS ON LEGAL COMPLIANCE AND INTERNAL
CONTROLS...................................................................................................................... 74
Elected Officials
Richard Carlbom
Dale Wick
Ross Rieke
Al Rassier
Renee Symanietz
Administration
Judy Weyrens
CITY OF ST. JOSEPH
Stearns County, Minnesota
ELECTED OFFICIALS AND ADMINISTRATION
December 31,2006
Position
Mayor
Council Member
Council Member
Council Member
Council Member
City Clerk/Treasurer/Administrator
Term Expires
January 2007
January 2007
January 2007
January 2009
January 2009
Appointed
KDV
KERN. DEWENTER.VIERE
INDEPENDENT AUDITORS' REPORT
May 23, 2007
Honorable Mayor and Members
of the City Council
City of St. Joseph
St. Joseph, Minnesota
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund and the aggregate remaining fund information of the
City of St. Joseph, Minnesota, as of and for the year ended December 31, 2006, which
collectively comprise the City's basic financial statements as listed in the Table of Contents.
These financial statements are the responsibility of the City's management. Our responsibility is
to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with U.S. generally accepted auditing standards and the
standards applicable to financial audits contained in Government Auditing Standards, issued by
the Comptroller General of the United States. Those Standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities, each
major fund and the aggregate remaining fund information of the City ofSt. Joseph, Minnesota, as
of December 31,2006, and the respective changes in financial position and cash flows, where
applicable, thereof the and the budgetary comparison for the General Fund for the year then
ended in conformity with U.S. generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated May 23,
2007, on our consideration of the City's internal control over financial reporting and our tests of its
compliance with certain provisions of laws, regulations, contracts and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on
the internal control over financial reporting or on compliance. That report is an integral part of an
audit performed in accordance with Government Auditing Standards and should be considered in
assessing the results of our audit.
2
K-DV
KERN. DEWENTER.YIERE
The Management's Discussion and Analysis, which follows this report letter, is not a required part
ofthe basic financial statements but is supplementary information required by U.S. generally
accepted accounting principles. We have applied certain limited procedures, which consisted
primarily of management inquiries regarding the methods of measurement and presentation of the
supplementary information. However, we did not audit the information and express no opinion on
it.
Our audit was performed for the purpose of forming opinions on the financial statements that
collectively comprise the City's basic financial statements. The accompanying supplementary
information identified in the Table of Contents is presented for purposes of additional analysis
and is not a required part of the basic financial statements of the City. Such information has been
subjected to the auditing procedures applied to the basic financial statements and, in our opinion,
is fairly stated in all material respects in relation to the basic financial statements taken as a
whole.
K.b\-I-, '/)eM i1- 'LeA t 1/ UA..-e, f..,fcL.
KERN, DEWENTER, VIERE, LTD.
St. Cloud, Minnesota
3
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2006
As management of the City of St. Joseph, we offer readers of the City of St. Joseph's financial
statements this narrative overview and analysis of the financial acti~ities of the City of St. Joseph
for the fiscal year ended December 31,2006.
Financial Hi2:hli2:hts
. The assets of the City of St. Joseph exceeded its liabilities at the close of the most recent
fiscal year by $32,659,975 Of this amount, $7,659,875 may be used to meet government's
ongoing obligations to citizens and creditors. j
. The government's total net assets increased by $3,962,702.
. As of the close ofthe current fiscal year, the City ofSt. Joseph' . governmental funds
reported combined ending fund balances of$9,916,225, an incrdase of$579,892. Of this
total amount, $927,012 is available or designated for spending af the government's discretion
(unreserved fund balance). I
. At the end of the current fiscal year, unreserved, undesignated 1nd balance for the general
fund was $435,625 or 20% oftotal general fund expenditures.
. The City ofSt. Joseph's total debt increased by $4,321,983 dUrirg the current fiscal year.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City ofSt. Joseph's
basic financial statements. The City ofSt. Joseph's basic financial Jtatements comprise three
components: 1) government-wide financial statements, 2) fund finahcial statements, and 3) notes
to the financial statements. This report also contains other supplemJntary information in
addition to the basic financial statements themselves. I
Government-wide financial statements. The government-wide filfancial statements are
designed to provide readers with a broader overview of the City ofSt. Joseph's finances, in a
manner similar to a private-sector business. I
The statement of net assets presents information on all of the City of St. Joseph's assets and
liabilities, with the difference between the two reported as net assetsl. Over time, increases or
decreases in net assets may serve as a useful indicator of whether the financial position of the
City of St. Joseph's is improving or deteriorating.
The statement of activities presents information showing how the government's net assets
changed during the most recent fiscal year. All changes in net asset~ are reported as soon as the
underlying event giving rise to the change occurs, regardless of the ~iming of related cash flows.
Thus, revenues and expenses are reported in this statement for somel items that will only result in
cash flows in future fiscal periods (e.g., uncollected taxes and earne<!i but unused vacation leave).
I
4
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2006
Both of the government-wide financial statements distinguish functions of the City ofSt. Joseph
that are principally supported by taxes and intergovernmental revenues (governmental activities)
from other functions that are intended to recover all or a significant portion of their costs through
user fees and charges (business-type activities). The governmental activities of the City of
St. Joseph include general government, public safety, public works, economic development,
interest on long-term debt, and culture and recreation. The business-type activities of the City of
St. Joseph include the water, wastewater, and hydroelectric utilities, parking system, refuse
service, municipal athletic complex and civic center operations.
The government-wide financial statements include not only the City of St. Joseph itself (known
as the primary government), but also a legally separate Economic Development Authority of St.
Joseph. Financial information for this component unit is within the financial information.
The government-wide financial statements can be found on pages 16-17 ofthis report.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The City of
St. Joseph, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the City of
St. Joseph can be divided into three categories: governmental funds, proprietary funds, and
fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial statements.
However, unlike the government-wide financial statements, governmental fund financial
statements focus on near-term inflows and outflows of spendable resources, as well as on
balances of spendable resources available at the end of the fiscal year. Such information may be
useful in evaluating a government's near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements.
By doing so, readers may better understand the long-term impact of the government's near-term
financing decisions. Both the governmental fund balance sheet and the governmental fund
statement of revenues, expenditures, and changes in fund balances provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
The City ofSt. Joseph maintains over thirty individual governmental funds. Information is
presented separately in the governmental fund balance sheet and in the governmental fund
statement of revenues, expenditures, and changes in fund balances for the general fund, the tax
increment and improvement debt service funds, and the infrastructure management and
improvement construction capital projects funds, all of which are considered to be major funds.
Data from the other governmental funds are combined into a single, aggregated presentation.
Individual fund data for each of these non-major governmental funds is provided in the form of
combining statements elsewhere in this report.
5
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2006
The City of St. Joseph adopts an annual appropriated budget for its general fund. A budgetary
comparison statement has been provided for the general fund (page126) to demonstrate
compliance with this budget.
The basic governmental fund financial statements can be found on I ages 18-26 of this report.
Proprietary funds. The City ofSt. Joseph maintains proprietary ~nds. Enterprise funds are
used to report the same functions presented as business-type activi~~es in the government-wide
financial statements. The City of St. Joseph uses enterprise funds to account for its water,
wastewater, refuse and storm water. I
Proprietary funds provide the same type of information as the gove1fID1ent-wide financial
statements, only in more detail. The proprietary fund financial statements provide separate
information for the water, wastewater, refuse and storm water, all of which are considered to be
major funds ofthe City ofSt. Joseph.
The basic proprietary fund financial statements can be found on pages 27-29 of this report.
Notes to the financial statements. The notes provide additional in~ormation that is essential to
a full understanding of the data provided in the government-wide and fund financial statements.
The notes to the fmancial statements can be found on pages 3o-sz1fthiS report.
Other information. The combining statements referred to earlier ir connection with non-major
governmental funds and internal service funds can be found on pages 54-70 of this report.
Comparative data. While comparative data is not illustrated in th1 report, comments
throughout this narrative and overview will discuss significant chaJges from the prior year.
,Government-Wide Financial Analvsis I
As noted earlier, net assets may serve over time as a useful indicator of a government's financial
position. In the case of the City of St. Joseph, assets exceeded liabilities by $32,659,975 at the
close of the most recent fiscal year. I
By far the largest portion of the City of St. Joseph's net assets refleats its investment in capital
assets (e.g., land, buildings, machinery, and equipment), less any reiated debt used to acquire
those assets that is still outstanding. The City of St. Joseph uses th9se capital assets to provide
services to citizens; consequently, these assets are not available for future spending. Although
the City ofSt. Joseph's investment in its capital assets is reported nbt of related debt, it should be
noted that the resources needed to repay this debt must be provided I from other sources, since the
capital assets themselves cannot be used to liquidate these liabilities. .
()
l:lTY 0.11' ST. JUS~PH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2006
NET ASSETS
Governmental Business-Type
Activities Activities Total
2006 2005 2006 2005 2006 2005
Current and other assets 14,131,329 11,798,833 6,558,370 7,883,440 20,689,699 19,680,273
Capital assets 12,772,769 12,113,699 25,853,705 18,400,368 38,626,474 30,514,067
Total assets 26,904,098 23,9 I 2,532 32,412,075 26,283,808 59,316,173 50,194,340
Long-term liabilities 13,386,069 13,625,586 8,692,114 5,719,558 22,078,183 19,345,144
Other liabilities 3,324,837 2,011,059 1,253,178 140,864 4,578,015 2,151,923
Total liabilities 16,710,906 15,636,645 9,945,292 5,860,422 26,656,198 21,497,067
Net Assets
Invested in capital assets,
net of related debt (2,135,535) 343,388 16,903,705 12,690,368 14,768,170 13,033,756
Restricted 10,231,930 7,128,081 10,231,930 7,128,081
Unrestricted 2,096,797 802,418 5,563,078 7,733,018 7,659,875 8,535,436
Total net assets 10,193,192 8,273,887 22,466,783 20,423,386 32,659,975 28,697,273
At the end of the current fiscal year, the City of St. Joseph is able to report positive balances in
all three categories of net assets, both for the government as a whole, as well as for its separate
governmental and business-type activities.
Governmental activities. Governmental activities increased the City of St. Joseph's net assets
by $1,919,305 thereby accounting for 48% of the total growth in the net assets of the City of
St. Joseph. The most significant change in governmental net assets is due to the large increase in
capital assets under construction in progress. Under full accrual accounting, current year
infrastructure capital outlay, which was funded during the year, will be expended over its useful
life.
Business-type activities. Business-type activities increased the City of St. Joseph's net assets by
$2,043,397 accounting for 52% of the total growth in the government's net assets. The water
utility, wastewater utility and trunk sewer contributed in the increase in net assets in the
proprietary funds. The largest portion of the net asset increased in the water and wastewater
utilities results from the capital asset additions from utility projects.
7
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2006
CHANGE IN NET ASSETS
Governmental BUSineSS-Tyr
Activities Activities Total
2006 2005 2006 T 2006 2005
Revenues
Program Revenues
Charges for services 679,910 735,851 1,914,374 1,73r63 2,594,284 2,472,914
Operating Grants and contributions 254,166 96,486 254,166 96,486
Capital Grants and contributions 3,985,801 3,166,187 95,000 2,434,848 4,080,801 5,601 ,035
General Revenues:
Property taxes 1,157,354 887,383 1,157,354 887,383
Tax Increments 77,931 87,923 77 ,931 87,923
Sales Taxes 214,343 214,343
State Aids 903,642 788,881 903,642 788,881
Unrestricted Investment Earnings 399,995 219,884 377,434 T9~ 399,995 295,675
Gain on Sale of Capital Assets 79,133 143 79,133 143
Other General Revenue 1,742 1,742
7,754,017 5,982,738 2,386,808 I
Total Revenues 4,24',(,702 8,859,749 10,230,440
Expenses:
General Government 712,204 472,535 712,204 472,535
Public Safety 1,224,645 1,131,737 1,224,645 1,131,737
Public Works 1,597,242 1,309,210 1,597,242 1,309,210
Culture and Recreation 159,051 273,453 159,051 273,453
Economic Development 109,574 98,907 109,574 98,907
Capital Outlay 556,595 556,595
Interest on Long-Term Debt 691,170 691,170
Water 797,280 400,504 797,280 400,504
I
Sanitary Sewer 525,754 521,426 525,754 529,426
Refuse 82,435 6].967 82,435 67,967
Storm Sewer 278,768 17Q,865 278,768 170,865
Total Expenses 4,493,886 I
3,842,437 1,684,237 1,16~,762 6,178,123 5,011,199
Increase in assets before transfers 3,260,131 I
2,140,301 702,571 3,078,940 3,962,702 5,219,241
I
Transfers (l,340,826) (949,467) 1,340,826 94~,467
1,919,305 I
Change in net assets 1,190,834 2,043,397 4,028,407 3,962,702 5,219,241
I
Net assets - Beginning 8,273,887 7,O~~,053 20,423,386 16,394,979 28,697,273 23,478,Q}~____
I
Net assets - Ending 10,193,192 8,273,887
22,466,783 20,42~,386 32,659,975 28,697,273
8
CITY OF ST. JOSJ!:PH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2006
~XPENSES AND PROGRAM REVENUES - GOVERNMENTAL ACTIVITIES
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$- ,
-
I 0 Revenue l
III Expenditures I
I
I
I
IJ
General Public Safety Public Works Culture and Economic Interest on
Government Recreation Development Long-Term
Debt
REVENUES BY SOURCE - GOVERNMENT AL ACTIVITIES
Culture and
Recreation
0%
Public Works__________
85%
General
/ Government
3%
Public Safety
12%
9
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2006
~XPENSES AND PROGRAM REVENUES - BUSINESS-TYPE ACTIVITIES
$3,000,000 -j
$2,500,000
I
$2,000,000
$1,500,000 I
$1,000,000
II
$500,000
$- -~--
Water Sanitary Sewer
10 Revenue II Expenditures
Storm Water
REVENUES BY SOURCE - BUSINESS-TYPE ACTIVITIES
Refuse
Storm Water 4%
13% I
Sanitary Sewer _______________
48%
Water
35%
I
I
J
I
I
I
~
Refuse
10
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2006
Financial Analvsis of the Government's Funds
As noted earlier, the City ofSt. Joseph uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements.
Governmental funds. The focus ofthe City of St. Joseph's governmental funds is to provide
information on near-term inflows, outflows, and balances of spendable resources. Such
information is useful in assessing the City ofSt. Joseph's financing requirements. In particular,
unreserved fund balance may serve as a useful measure of a government's net resources
available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City ofSt. Joseph's governmental funds reported
combined ending fund balances of$9,9l6,225. Approximately 9% or $927,012 of this total
amount constitutes unreserved fund balance. While it is unreserved, $910,852 is designated to
assist with the purchase of capital projects, provide relief for debt service and to allow funds for
spending at the government's discretion. The remainder of fund balance is reserved to indicate
that it is not available for new spending because it has already been committed 1) for payments
for loans and capital leases and to pay debt service.
The general fund is the chief operating fund of the City of St. Joseph. At the end of the current
fiscal year, unreserved fund balance of the general fund was $922,186. As a measure of the
general fund's liquidity, it may be useful to compare both unreserved fund balance and total fund
balance to total fund expenditures. Unreserved fund balance represents 41 % of total general
fund expenditures.
The fund balance of the City ofSt. Joseph's general fund increased by $ 5,264 during the current
fiscal year. The City has been experiencing considerable growth both residentially and
commercially and in reviewing the general fund budget it would appear that the fund balance
should have been increased by a larger number. However, when looking at the approved budget,
for the public works, the budget was exceeded by $ 167,000. This large overage was primarily
due to engineering issues related to growth. To assist with the growth, the City Council agreed
to conduct a Transportation Study. This study was not budgeted, but necessary. The total cost of
the study was approximately $ 60,000. In reviewing the statements it can be noted that the City
had an excess of expenditures over revenues in the general fund in the amount of $111 ,447.
The excess is attributable to an increase in Intergovernmental Aid and the approved 2006 Budget
allowed for a potential excess of$ 59,747.
Proprietary funds. The City of St. Joseph's proprietary funds provide the same type of
information found in the government-wide financial statements, but in more detail.
The unrestricted assets in the respective proprietary funds are water utility - $2,282,441,
wastewater utility $1,193,607, Refuse - $302,783, Storm Sewer - $ 131,912. All of the
proprietary funds with the exception of the refuse fund had increases in total net assets for the
year.
11
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND AI AL YSIS
December 31, 2006
General Fund Bud2etarv Hi2hli2hts
The City approved the 2006 general fund budget increasing the tax capacity rate by
approximately 7%. Over the past five years St. Joseph has seen thel tax capacity rate vary by
only 2% (both increase and decrease). The rapid growth created a ~eed to add staff and
equipment thereby increasing the Tax Capacity Rate. Even though ~he tax rate increased 7%, the
Council limiting spending to keep the increase to only that which wjas needed. Over that same
period of time, St. Joseph has experienced and average growth rate of 18%.
Capital Assets and Debt Administration
Capital assets. The City ofSt. Joseph's investment in capital asset~ for its governmental and
business type activities as of December 31,2006, amounts to $38,6r6,478 (net of accumulated
depreciation). This investment in capital assets includes land, bui1d~ngs, improvements,
machinery and equipment, furniture and office equipment, infrastrupture, and construction in
progress. Most of the increase in the business-type activities is attributable to the construction of
a water filtration plant and the extension of water and sewer utilitie~ in the Orderly Annexation
Area.
Business
A t. 't.1
C IVI les
I
377,882
I
517,983
I
18,741,820
I
510,680
I
9,501,7~2
I
Total $ 19,908,458 $ 29,650,Q97 , $ 49,558,555
Additional information on the City ofs~osePh's capital assets cad be found in note 5 o~ pages
42-43 of this report. I
Long-term debt. At the end of the current fiscal year, the City of St. Joseph had total bonded
debt outstanding of $24,965,000. Of this amount, $14,095,000 com'prises debt backed by the full
faith and credit of the government. The remainder of the City ofSt.1 Joseph's debt represents
bonds secured solely by specified revenue sources (i.e., certificate OIfparticipation).
CAPITAL ASSETS
Governmental
Activities
Land
Buildings
Infrastructure
Plant and Lines
Improv Other than buildngs
Machinery and equipment
Construction in Progress
346,258
2,300,892
12,065,583
525,533
2,352,813
2,317,379
Total
724,140
2,818,875
12,065,583
18,741,820
525,533
2,863,493
11,819,111
1?
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2006
OUTSTANDING DEBT (General Oblieation and Revenue Bonds)
Governmental Business
Activities Activities Total
General Obligation $1,105,000 $1,105,000
G.O. Special Assessments 12,990,000 12,990,000
Revenue Bonds 1,920,000 8,950,000 10,870,000
Total $16,015,000 $8,950,000 $24,965,000
The City of St. Joseph issued new bonded debt by $6~000 or 25 % during the current fiscal
year. The increase is a result of the construction of~).5 ]rtillion gallon water treatment facility
and water mains. During 2006, the City issued the f01lOWing bonds:
. $250,000 of General Obligation. These bonds were issued to finance equipment for public
safety, public works and administration.
. $2,375,000 of Taxable General Obligation, Special Assessment Bonds. These bonds were
issued to the reconstruction and utility replacement in a section an old section of the City.
. $3,575,000 of Water Revenue Bonds. These bonds were issued to finance the Water
Treatment Facility, extension of water main and development of a well field.
The City ofSt. Joseph maintained a "BB+" rating from Moody's for general obligation debt.
According to Moody's Municipal credit report, the City's solid bond rating is due to a stable and
diverse local economy which continues to expand, and the City's conservatively managed
financial operations.
Additional information on the City of St. Joseph's long-term debt can be found in note 6 on
pages 44-47.
Economic Factors and Next Year's Budeets and Rates
. While the housing market in general is beginning to slow, St. Joseph anticipates continued
growth in both residential and commercial. The construction of a new school (K-8) will spur
development adjacent to the school site as it is open space and a developer has already
preliminary platted a tract for 500+ homes.
. The City also anticipates commercial industrial development as the City is working on the
development of new Industrial Park and have begun the planning process to revitalize the
downtown area. It is anticipated that the first downtown project will be constructed in 2007
consisting of a commercial and residential mixed use facility.
13
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2006
. Property tax reforms and budget deficits at the state level have ~ignificantly impacted
government aid payments made to the City. With declining aids and rapid growth, the
Council was forced to increase the tax rate. At that same time t*e Council acknowledged
that substantial increase and affirmed that this would not be a common practice. The Council
continues to budget conservatively while maintaining steady ta~ rates.
. The City consistently reviews the fee structures for all licenses Ld permits and services to
recover appropriate costs in lieu of raising property taxes.
. The City changed the rate structure for water and sewer to help cover not only the operating
costs but the depreciation as well. As can be seen from the statJments, the new structure has
had a significant positive impact. The City will continue to mOil itor the rates to eventually
cover depreciation fully.
Reauests for Information
The financial report is designed to provide a general overview of the City ofSt. Joseph's
finances for all those with an interest in the government's finances. I Questions concerning any of
the information provided in this report or requests for additional finflncial information should be
addressed to the City Administrator, 25 College Avenue North, St. Joseph, MN 56374.
14
$ 367,p6,o $ 863,215 $ 1,23,0,275
32,p38 13,438 45,476
5,0,997 29,962 8,0,959
I
345,,0,0,0
2,84,0'1,0,0,0 3,185,,0,0,0
13,175'1,0,0,0 8,6,05,,0,0,0 21,78,0,,0,0,0
28,1298 28,298
I
57,1719 57,719
I
1,563 8,,0,07
6,444
I
153,!35,o 87,114 24,0,464
16,71,0,:9,06 9,945,292 26,656,198
(2,135135) 16,9,03,7,05 14,768,17,0
1,0,193,188,0
10,193,88,0
I
38,05,0 38,,05,0
I
2,,o96,!797 5,563,,078 7,659,875
1,0,193,1192 22,466,783 32,659,975
I $ 32,412,,075 $ 59316,173
$ 26,9,04,,098
1 16
CITY OF ST. JOSEPH
Stearns County, Minnesota
STATEMENT OF NET ASSETS
December 31, 2006
ASSETS:
Cash and Investments
(Including Cash Equivalents)
Cash with Fiscal Agent
Property Tax Receivable
Accounts Receivable
Interest Receivable
Due From Other Governments
Special Assessments Receivable:
Delinquent
Deferred
Capital Assets:
Land
Construction In Progress
Infrastructure
Buildings
Improvements
Machinery and Equipment
Plant and Lines
Less Accumulated Depreciation
Capital Assets (Net of Accumulated Depreciation)
Governmental
A . ..1
CtlVltl~S
I
$ 7,865f21
619,p36
2,o,f59
51,p9,o
35'1142
1,03'199
6,of66
5'374f6
346,1258
I
2,317,B79
12,,o65,b83
I
2,3,o,o,~92
525,p33
2,352r~
(7,135,p89)
12,772,~69
I
$ 26,9,04,,098
Total Assets
LIABILITIES AND NET ASSETS:
Liabilities:
Accounts and Contracts Payable
Salaries and Benefits Payable
Interest Payable
Bond Principal Payable:
Payable Within One Year
Payable After One Year
Loan Payable:
Payable Within One Year
Payable After One Year
Compensated Absences Payable:
Payable Within One Year
Payable After One Year
Total Liabilities
Net Assets:
Investment in Capital Assets, Net of Related Debt
Restricted for:
Debt Service
Other Projects
U nrestri cted
Total Net Assets
Total Liabilities and Net Assets
The Notes to the Financial Statements are an integral part of this statement.
Business-Type
Activities
$ 6,,086,35,0
388,591
28,,06,0
761
1,,023
53,585
377,882
9,5,01,732
517,982
51,0,68,0
18,741,817
(3,796,388)
25,853,7,05
$ 32,412,,075
Total
$ 13,952,,071
619,536
2,0,459
44,0,281
63,2,02
104,16,0
61,789
5,428,2,0 1
724,14,0
11,819,111
12,,065,583
2,818,874
525,533
2,863,493
18,741,817
(1,0,932,,077)
38,626,474
$ 59316,173
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Z
CITY OF ST. JOSEPH
Stearns County, Minnesota
BALANCESHEET-GOVERNMENTALF NDS
December 31, 2006
Debt Service
G.O. I G.O. Northland
General Fund Improveme~t Improvement Heights/Trans
(101,105,106, Bonds of 2012 Bonds of Corridor
108) (325) 2005B (333) (335)
ASSETS: I
Cash and Investments
(Including Cash Equivalents) $ 947,445 $ 949,581~ $ 502,502 $ 836,876
Cash with a Fiscal Agent
Taxes Receivable - Delinquent 11,454 80r 239 598
Special Assessments Receivable:
Delinquent 9,0818 1,879
Deferred 2,317 1,091,38~ 865,366 1,847,775
Accounts Receivable 39,190
Interest Receivable 5,418 2,742 4,500 6,328
I
Due from Other Governments 27,337 10,12p 2,502 510
Total Assets $ 1,033,161 $ I $ $
2,063, 73~ 1,376,988 2,692,087
LIABILITIES AND FUND BALANCES:
Liabilities:
Cash Overdraft $ $ $ $
Accounts and Contracts Payable 65,166
Salaries and Benefits Payable 32,038
Deferred Revenue 13,771 1,101,27p 867,484 1,848,373
Total Liabilities 110,975 1,101,27p 867,484 1,848,373
Fund Balances:
Reserved for:
Debt Service 962,456 509,504 843,714
Capital Projects
Unreserved, Reported in:
General Fund - Designated 486,561
General Fund - Undesignated 435,625
Special Revenue - Undesignated
Debt Service - Undesignated
Capital Projects - Designated
Capital Projects - Undesignated
Total Fund Balances 922,186 962,45(5 509,504 843,714
Total Liabilities and I
Fund Balances $ 1,033,161 $ 2,063,73~ $ 1,376,988 $ 2,692,087
The Notes to the Financial Statements are an integral part of this statement. 18
Capital Projects
Utility 2006 Street Other Total
Northland Extension Improvements Governmental Governmental
Heights (435) (501) (438) Funds Funds
$ 869,331 $ 1,627,250 $ 689,268 $ 3,983,526 $ 10,405,786
619,536 619,536
7,364 20,459
49,799 60,766
1,567,774 5,374,616
16,500 12,500 68,190
8,585 16,154 43,727
62,924 103,399
$ 869,331 $ 1,652,335 $ 689,268 $ 6,319,577 $ 16,696,479
- -
$ $ $ $ 912,815 $ 912,815
83,175 111,555 107,164 367,060
32,038
1,637,437 5,468,341
83,175 111,555 2,657,416 6,780,254
3,102,133 5,417,807
786,156 1,652,335 577,713 555,202 3,571,406
486,561
435,625
453,908 453,908
(4,990) (4,990)
424,291 424,291
(868,383) (868,383)
786,156 1,652,335 577,713 3,662,161 9,916,225
$ 869,331 $ 1,652,335 $ 689,268 $ 6,319,577 $ 16,696,479
19
CITY OF ST. JOSEPH
Stearns County, Minnesota
RECONCILIATION OF THE BALANCE S EET TO
THE STATEMENT OF NET ASSETS - GOVERNMI NTAL FUNDS
December 31, 2006
Total Fund Balances - Governmental Funds
$ 9,916,225
Amounts reported for governmental activities in the Statement of Net Assets are different
because:
Capital assets used in governmental activities are not current financial resources and,
therefore, are not reported as assets in governmental funds.
Cost of Capital Assets
Less Accumulated Depreciation
19,908,458
(7,135,689)
Long-term liabilities, including bonds payable, are not due and payable in
the current period and, therefore, are not reported as liabilities in the fudds.
Long-term liabilities at year-end consist of:
Bond Principal Payable
Loan Payable
Compensated Absences Payable
(16,015,000)
(86,017)
(159,794)
Delinquent receivables will be collected in subsequent years, but are no i available
soon enough to pay for the current period's expenditures and, therefore,
are deferred in the funds.
Property Taxes
Special Assessments
20,459
60,766
Revenues in the Statement of Activities that do not provide current
financial resources are not reported as revenues in the funds.
Deferred Special Assessments
Notes Receivable
5,374,616
12,500
The Utility Extension Capital Projects Fund is proprietary in nature and, therefore,
included in the business-type activities in the Statement of Net Assets. I
(1,652,335)
Governmental funds do not report a liability for accrued interest
due and payable.
(50,997)
Total Net Assets - Governmental Activities
$ 10,193,192
The Notes to the Financial Statements are an integral part of this statement.
20
CITY OF ST. JOSEPH
Stearns County, Minnesota
RECONCILIATION OF THE STATEMENT
OF NET ASSETS - BUSINESS-TYPE ACTIVITIES
December 31, 2006
Total Net Assets - Proprietary Funds
$ 20,814,448
Amounts reported for governmental activities in the Statement of Net Assets
are different because:
The Utility Extension Capital Projects Fund is proprietary in nature and relates
to water and sewer improvements for the applicable funds. Therefore, it is
included as a business-type activity.
1,652,335
Total Net Assets - Business-Type Activities
$ 22,466,783
=
The Notes to the Financial Statements are an integral part ofthis statement.
21
CITY OF ST. JOSEPH
Stearns County, Minnesota
STATEMENT OF REVENUES, EXPENDITURES f'\ND
CHANGES IN FUND BALANCES - GOVERNMENT Ai FUNDS
For the Year Ended December 31,2006
Debt Service
dr.O. G.O.
General Fund I Improvement Northland
Improvement
(101, 105, BondJ of 2002 Bonds of Heights/Trans
I
106,108) ($25) 2005B (333) Corridor (335)
REVENUES:
Property Taxes $ 669,718 $ 42,305 $ 18,115 $ 45,287
Tax Increments
Sales Taxes 23,872
Special Assessments 1,067 264,308 169,414 442,425
Licenses and Permits 335,576
Intergovernmental 951,826 181,472 1,922 157,203
Charges for Services 205,792
Fines and Forfeitures 69,686
Miscellaneous:
Investment Income 58,886 33,105 45,369 67,866
Contributions and Donations 1,655
Other 23,457
Total Revenues 2,341,535 1521,190 234,820 712,781
EXPENDITURES:
Current:
General Government 455,850
Public Safety 1,136,871
Public Works 477,784
Culture and Recreation 122,642
Economic Development
Debt Service:
Principal 235,000 90,000
Interest and Other Charges 128,213 62,640 135,625
Capital Outlay:
General Government 2,593
Public Safety 34,348
Public Works
Culture and Recreation
Total Expenditures 2,230,088 1363,213 152,640 135,625
Excess of Revenues Over
(Under) Expenditures 111,447 157,977 82,180 577,156
OTHER FINANCING SOURCES (USES):
Sale of Property 80,875
Bonds Issued
Transfers In 14,000
Transfers Out (201,058)
Total Other Financing Sources (Uses) (106,183 )
Net Change in Fund Balances 5,264 157,977 82,180 577,156
FUND BALANCES:
Beginning of Year 916,922 804,479 427,324 266,558
End of Year $ 922,186 $ 1962,456 $ 509,504 $ 843,714
The Notes to the Financial Statements are an integral part of this statement. I 22
Capital Projects
Northland
Heights (435)
Utility Extension
(501)
2006 Street
Improvements
(438)
Other Total
Governmental Governmental
Funds Funds
$ 385,230 $ 1,160,655
77,931 77,931
190,471 214,343
830,617 1,707,831
335,576
40,670 1,333,093
44,934 890,406
69,686
194,769 474,686
11,000 12,655
29,077 52,534
1,804,699 6,329,396
$
$
$
639,680
74,691
714,371
20,289 476,139
1,136,871
477,784
2,987 125,629
109,574 109,574
1,218,017 1,543,017
61,384 321,878 709,740
220,024 222,617
34,348
1,116,194 1,633,018 488,617 3,237,829
120,781 120,781
1,116,194 1,694,402 2,502,167 8,194,329
(1,116,194) 714,371 (1,694,402) (697,468) (1,864,933)
80,875
2,272,115 352,885 2,625,000
372,958 386,958
(403,950) (43,000) (648,008)
(403,950) 2,272,115 682,843 2,444,825
(1,116,194) 310,421 577,713 ( 14,625) 579,892
1,902,350 1,341,914 3,676,786 9,336,333
$ 786,156 $ 1,652,335 $ 577,713 $ 3,662,161 $ 9,916,225
23
CITY OF ST. JOSEPH
Stearns County, Minnesota
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
I
AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
For the Year Ended December 31, 200~
Total Net Change in Fund Balances - Governmental Funds
$
579,892
Amounts reported for governmental activities in the Statement of Activities are different because:
Capital outlays are reported in governmental funds as expenditures. However, in the Statement of
Activities, the cost of those assets is allocated over the estimated useful lives as depreciation expense.
Capital Outlays
Depreciation Expense
Loss on Disposal
Capital Assets Transferred to Proprietary Fund
3,561,832
(1,026,841)
(392,195)
(1,483,726)
Principal payments on long-term debt are recognized as expenditures in the gOiVernmental funds but
as an increase in net assets in the Statement of Activities.
1,543,017
Interest on long-term debt in the Statement of Activities differs from the amount reported in the
governmental funds because interest is recognized as an expenditure in the fu~ds when it is due
and thus requires use of current financial resources. In the Statement of Activities, however,
I
interest expense is recognized as the interest accrues, regardless of when it is due.
Proceeds from long-term debt are recognized as another financing sou;ce in thl governmental funds
but as a decrease in net assets in the Statement of Activities.
18,570
(2,625,000)
Compensated absences are recognized as paid in the governmental funds but recognized as the
expense is incurred in the Statement of Activities.
(3,940)
Delinquent receivables will be collected in subsequent years, but are not available soon enough to
pay for the current period's expenditures and, therefore, are not revenues in thd funds.
Delinquent Special Assessments
Delinquent Property Taxes
(12,056)
(3,301)
Certain revenues in the Statement of Activities that do not provide current financial resources are
not reported as revenues in the funds.
Deferred Special Assessments
Notes Receivable
2,084,474
(11,000)
(310,421)
$ 1,919,305
The Notes to the Financial Statements are an integral part of this statement.
24
CITY OF ST. JOSEPH
Stearns County, Minnesota
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS - BUSINESS-TYPE ACTIVITIES
For the Year Ended December 31, 2006
Total Net Change in Fund Net Assets - Proprietary Funds
Amounts reported for governmental activities in the Statement of Activities
are different because:
Recognized current year activity from the Utility Extension Capital Projects Fund
with the business-type activities.
Change in Net Assets - Business-Type Activities
The Notes to the Financial Statements are an integral part of this statement.
$ 1,732,976
310,421
$ 2,043,397
25
CITY OF ST. JOSEPH
Stearns County, Minnesota
STATEMENT OF REVENUES, EXPENDITURE, AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL FU D
For the Year Ended December 31, 2006
Variance with
Final Budget -
Original and Positive
Final Budget Actual Amounts (Negative)
REVENUES:
Property Taxes $ 698,599 $ 669,718 $ (28,881 )
Sales Taxes 100 23,872 23,772
Special Assessments 2,000 1,067 (933)
Licenses and Permits 315,400 335,576 20,176
Intergovernmental 877,250 951,826 74,576
Charges for Services 291,500 205,792 (85,708)
Fines and Forfeitures 65,750 69,686 3,936
Miscellaneous Revenues:
Investment Income 39,000 58,886 19,886
Contributions and Donations 1,655 1,655
Other 1,500 23,457 21,957
Total Revenues 2,291,099 2,341,535 50,436
EXPENDITURES:
Current:
General Government 483,326 455,850 27,476
Public Safety 1,124,987 1,136,871 (11,884)
Public Works 310,755 477,784 (167,029)
Culture and Recreation 142,533 122,642 19,891
Capital Outlay:
General Government ' 16,000 2,593 13,407
Public Safety 54,750 34,348 20,402
Public Works 85,000 85,000
Culture and Recreation 14,001 14,001
Total Expenditures 2,231,352 2,230,088 1,264
Excess of Revenues
Over Expenditures 59,747 111,447 51,700
OTHER FINANCING SOURCES (USES):
Sale of Property 80,875 80,875
Transfers In 14,000 14,000
Transfers Out - I (201,058) (201,058)
Total Other Financing Sources (Uses) 14,000 (106,183) (120,183)
Net Change in Fund Balances $ 73,747 5,264 $ (68,483)
FUND BALANCES:
Beginning of Year 916,922
End of Year $ 922,186
The Notes to the Financial Statements are an integral part of this statement. 26
LIlY VJ:< :ST. JV:SM'li
Stearns County, Minnesota
STATEMENT OF NET ASSETS - PROPRIETARY FUNDS
December 31,2006
Sanitary Sewer Storm Water
Water (601) (602) Refuse (603) (651) Total
ASSETS:
Current Assets:
Cash and Investments
(Including Cash Equivalents) $ 3,060,487 $ 953,975 $ 328,102 $ 116,536 $ 4,459,100
Special Assessments Receivable:
Delinquent 1,023 1,023
Special Assessments Receivable - Deferred 9,000 44,585 53,585
Accounts Receivable 60,151 241,994 51,177 18,769 372,091
Interest Receivable 13,601 3,800 1,373 701 19,475
Due from Other Governments 761 761
Total Current Assets 3,143,239 1,245,115 380,652 137,029 4,906,035
Noncurrent Assets:
Capital Assets:
Land 372,941 4,941 377,882
Buildings 517,982 517,982
Plants and Lines 7,609,384 7,758,901 3,373,532 18,741,817
Equipment 105,594 405,086 510,680
Construction In Progress 7,705,554 1,126,946 669,232 9,501,732
Total Capital Assets 15,793,473 9,813,856 4,042,764 29,650,093
Less Accumulated Depreciation (1,308,344) (2,097,750) (390,294) (3,796,388)
Net Capital Assets 14,485,129 7,716,106 3,652,470 25,853,705
Total Assets $ 17,628,368 $ 8,961,221 $ 380,652 $ 3,789,499 $ 30,759,740
LIABILITIES AND NET ASSETS:
Current Liabilities:
Accounts and Contracts Payable $ 772,774 $ 16,652 $ 68,672 $ 5,117 $ 863,215
Salaries and Benefits Payable 7,054 4,949 1,435 13,438
Interest Payable 27,925 2,037 29,962
Long-Term Liabilities Due Within One Year 321,409 25,077 77 346,563
Total Current Liabilities 1,129,162 48,715 70,184 5,117 1,253,178
Noncurrent Liabilities:
Compensated Absences 53,045 27,870 7,762 88,677
Bonds Payable 8,435,000 515,000 8,950,000
Less Amounts Due Within One Year (321,409) (25,077) (77) (346,563)
Total Noncurrent Liabilities 8,166,636 517,793 7,685 8,692,114
Total Liabilities 9,295,798 566,508 77,869 5,117 9,945,292
Net Assets:
Unrestricted 2,282,441 1,193,607 302,783 131,912 3,910,743
Investment in Capital Assets, Net of Related Debt 6,050,129 7,201,106 3,652,470 16,903,705
Total Net Assets 8,332,570 8,394,713 302,783 3,784,382 20,814,448
Total Liabilities and Net Assets $ 17,628,368 $ 8,961,221 $ 380,652 $ 3,789,499 $ 30,759,740_
The Notes to the Financial Statements are an integral part of this statement.
27
CITY OF ST. JOSEPH 1
Stearns County, Minnesota
STATEMENT OF REVENUES, EXPENSES AND C ANGES
IN NET ASSETS - PROPRIETARY FUNDS
For the Year Ended December 31,2006
Sanitary Storm Water
Water (601) Sewer (602) R'ifuse (603) (651 ) Total
OPERATING REVENUES: $1 261,239
Charges for Services $ 418,788 $ 478,501 $ 95,979 $ 1,254,507
OPERATING EXPENSES:
Wages and Salaries 157,605 91,747 31,835 281,187
Sewer Use Rental 149,096 149,096
Materials and Supplies 28,793 5,382 584 34,759
Repairs and Maintenance 5,902 12,553 113 18,568
Professional Services 23,687 12,539 11,449 14,764 62,439
Insurance 5,450 9,887 15,337
Utilities 23,363 16,004 39,367
Depreciation 161,008 200,479 67,471 428,958
Refuse Disposal 792 229,837 230,629
Equipment 350 350
Miscellaneous 14,618 1,271 4,950 200 21,039
Total Operating Expenses 420,426 500,100 278,768 82,435 1,281,729
Operating Income (Loss) (1,638) (21,599) (17,529) 13,544 (27,222)
NONOPERATING REVENUES (EXPENSES):
Investment Income 247,009 37,023 12,672 6,039 302,743
Interest Expense (376,854) (25,654) (402,508)
Other Income 20,187 20,187
Total Nonoperating Revenues (Expenses) (109,658) 11,369 12,672 6,039 (79,578)
Income before Capital Contributions and Transfers (111,296) (10,230) (4,857) 19,583 (106,800)
Capital Contributions 485,243 584,524 508,959 1,578,726
Transfers In 267,050 47,200 314,250
Transfers Out (53,200) (53,200)
Change in Net Assets 640,997 621,494 (4,857) 475,342 1,732,976
NET ASSETS:
Beginning of Year 7,691,573 7,773,219 307,640 3,309,040 19,081,472
End of Year $ 8,332,570 $ 8,394,713 $1 302,783 $ 3,784,382 $ 20,814,448
The Notes to the Financial Statements are an integral part of this statement.
28
CITY OF ST. JOSEPH
Stearns County, Minnesota
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
For the Year Ended December 31,2006
Sanitary Sewer Stonn Water
Water (601) (602) Refuse (603) (651) Total
CASH FLOWS - OPERATING ACTIVITIES:
Receipts from Customers and Users $ 403,202 $ 480,576 $ 249,937 $ 91,632 $ 1,225,347
Payments to Suppliers 651,209 (207,683) (190,582) (9,847) 243,097
Payments to Employees (144,568) (89,061) (30,729) (264,358)
Net Cash Flows - Operating Activities 909,843 183,832 28,626 81,785 1,204,086
CASH FLOWS - NONCAPITAL
FINANCING ACTIVITIES:
Other Miscellaneous Receipts 20,187 20,187
Transfer from Other Funds 267,050 47,200 314,250
Transfer to Other Funds (53,200) (53,200)
Net Cash Flows - Noncapital
Financing Activities 287,237 47,200 (53,200) 281,237
CASH FLOWS - CAPITAL AND RELATED
FINANCING ACTIVITIES:
Principal Paid on Debt (310,000) (25,000) (335,000)
Interest Paid on Debt (359,911) (25,738) (385,649)
Bond Proceeds 3,575,000 3,575,000
Acquisition of Capital Assets (6,274,037) (29,535) (6,303,572)
Net Cash Flows - Capital and Related
Financing Activities (3,368,948) (80,273) (3,449,221)
CASH FLOWS - INVESTING ACTIVITIES:
Interest and Dividends Received 252,090 36,049 12,376 5,648 306,163
Net Change in Cash and Cash Equivalents (1,919,778) 186,808 41,002 34,233 (1,657,735)
Cash and Cash Equivalents, January 1 4,980,265 767,167 287,100 82,303 6,116,835
Cash and Cash Equivalents, December 31 $ 3,060,487 - $ 953,975 $ 328,102 $ 116,536 $ 4,459.100
RECONCILIATION OF OPERATING
INCOME (LOSS) TO NET CASH
FLOWS - OPERATING ACTIVITIES:
Operating Income (Loss) $ (1,638) $ (21,599) $ (17,529) $ 13,544 $ (27,222)
Adjustments to Reconcile Operating
Income (Loss) to Net Cash Flows -
Operating Activities:
Depreciation Expense 161,008 200,479 67,471 428,958
Accounts Receivable (6,586) (17,198) (I 1,302) (3,324) (38,410)
Special Assessments (9,000) 20,034 (1,023) 10,011
Due from Other Governments (761) (761)
Accounts Payable 753,022 191 56,351 5,117 814,681
Salaries Payable 1,334 1,200 433 2,967
Compensated Absences Payable 11,703 1,486 673 13,862
Total Adjustments 911,481 205,431 46,155 68,241 1,231,308
Net Cash Flows -
Operating Activities $ 909,843 $ 183,832 $ 28,626 $ 81,785 $ 1.204,086
NONCASH CAPITAL ACTIVITIES:
Capital Contributions $ 485.243 $ 584.524 $ $ 508,9~ $ 1,578,726
-
The Notes to the Financial Statements are an integral part of this statement.
29
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2006
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The City of St. Joseph is a statutory city governed by an elected mayor and four council
members. The accompanying financial statements present the govelmnent entities for which the
City is considered to be financially accountable. I
The financial statements present the City and its component units. fhe City includes all funds,
account groups, organizations, institutions, agencies, departments and offices that are not legally
separate from such. Component units are legally separate organizat~ons for which the elected
officials of the City are financially accountable and are included within the basic financial
statements of the City because of the significance of their operation~l 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 impolse its will on the organization
by significantly influencing the programs, projects, activities or lev~l 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 City ofSt. Joseph's
component unit is presented in this report as follows:
Blended Component Unit - Reported as if they were part of the City
For the category above, the specific entity is identified as follows:
1. Blended Component Unit
The St. Joseph Economic Development Authority (ED A) was organized for the purpose of
preserving and creating jobs, enhancing the tax base and promoting the general welfare of the
people of the City of St. Joseph. The St. Joseph EDA is govern~d by a five member board
appointed by the City Council. The St. Joseph EDA is included! as a blended component unit
of the City because the St. Joseph EDA is financially accountab~e to the City and the
St. Joseph EDA provides services almost entirely for the City. The St. Joseph EDA is
presented as the Economic Development Special Revenue Fundi, the EDA Public Project
Revenue Bonds of 200012005 Debt Service Fund and the Revedue Bonds of 2003 Debt
Service Fund. Separate financial statements are not prepared fOI the St. Joseph EDA.
in
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2006
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
B. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Assets and the Statement of
Activities) report information on all of the nonfiduciary activities of the City. For the most part,
the effect of interfund activity has been removed from these Statements. Governmental
activities, which normally are supported by taxes and intergovernmental revenues, are reported
separately from business-type activities, which rely to a significant extent on fees and charges for
support.
The Statement of Activities demonstrates the degree to which the direct expenses of a given
function or segment is offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Interest on general long-term debt is considered
an indirect expense and is reported separately in the Statement of Activities. Program revenues
include 1) charges to customers or applicants who purchase, use or directly benefit from goods,
services or privileges provided by a given function or segment and 2) grants and contributions
that are restricted to meeting the operational or capital requirements of a particular function or
segment. Taxes and other items not properly included among program revenues are reported
instead as general revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major
individual governmental funds and major individual enterprise funds are reported as separate
columns in the fund financial statements.
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund financial
statements. Revenues are recorded when earned and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues
in the year for which they are levied. Grants and similar items are recognized as revenue as soon
as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the City considers revenues to be available if they are collected
within 60 days of the end of the current fiscal period. Expenditures generally are recorded when
a liability is incurred, as under accrual accounting. However, debt service expenditures, as well
as expenditures related to compensated absences and claims and judgments, are recorded only
when payment is due.
31
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2006
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
C. Measurement Focus, Basis of Accounting and Financial StJement Presentation
(Continued)
Property taxes, franchise taxes, licenses and interest associated witH the current fiscal period are
all considered to be susceptible to accrual and so have been recogni~ed as revenues of the
current fiscal period. Only the portion of special assessments receiyable due within the current
fiscal period is considered to be susceptible to accrual as revenue of the current period. All
other revenue items are considered to be measurable and available ~nly when cash is received
by the City.
Description of Funds:
Major Governmental Funds:
General Fund - This Fund is the City's primary operating fund. It accounts for all financial
resources of the general City, except those required to be accounted for in another fund.
G.O. Improvement Bonds of2002 Debt Service Fund - This Fld accounts for the resources
accumulated and payments made for principal and interest on tHis bond issue.
G.O. Improvement Bonds of2005B Debt Service Fund - This Jund accounts for the
resources accumulated and payments made for principal and inrrest on this bond issue.
Northland Heights/Trans Corridor Debt Service Fund - This Furd accounts for the resources
accumulated and payments made for principal and interest on tHis bond issue.
Northland Heights Capital Projects Fund - This Fund accounts ~or the costs associated with
construction.
Utility Extension Capital Projects Fund - This Fund accounts for the costs associated with
the accumulation of water and sewer access fees that will be us~d for future water and sewer
capital extension.
2006 Street Improvements Capital Projects Fund - This Fund accounts for the proceeds of
the 2006 Street Improvements Bond and the costs associated w~th this specific capital project.
Proprietary Funds:
Water Fund - This Fund accounts for the operations of the CityrS water utility.
Sanitary Sewer Fund - This Fund accounts for the operations of the City's sanitary sewer
utility. I
I
17
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2006
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
(Continued)
Description of Funds: (Continued)
Proprietary Funds: (Continued)
Refuse Fund - This Fund accounts for the operations of the City's refuse utility.
Storm Water Fund - This Fund accounts for the operations of the City's storm water utility.
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989,
generally are followed in both the government-wide and proprietary fund financial statements to
the extent that those standards do not conflict with or contradict guidance of the Governmental
Accounting Standards Board (GASB). Governments also have the option of following
subsequent private-sector guidance for their business-type activities and enterprise funds, subject
to this same limitation. The City has elected not to follow subsequent private-sector guidance.
As a general rule, the effect of interfund activity has been eliminated from the government-
wide financial statements. Exceptions to this general rule are charges between the City's
sanitary sewer function and various other functions of the City. Elimination of these charges
would distort the direct costs and program revenues reported for the various functions
concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods,
services or privileges provided, 2) operating grants and contributions and 3) capital grants and
contributions, including special assessments. Internally dedicated resources are reported as
general revenues rather than as program revenues. Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund's principal ongoing operations. The
principal operating revenues of the Water Enterprise Fund, Sanitary Sewer Enterprise Fund,
Refuse Enterprise Fund and Storm Water Enterprise Fund are charges to customers for sales and
services. Operating expenses for enterprise funds include the cost of sales and services,
administrative expenses and depreciation on capital assets. All revenues and expenses not
meeting this definition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City's policy to use
restricted resources first, then unrestricted resources as they are needed.
33
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2006
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity
1. Deposits and Investments
The City's cash and cash equivalents are considered to be cash on hand, deposits and highly
liquid debt instruments purchased with original maturities ofthtee months or less from the
date of acquisition. Investments are stated at fair value.
Minnesota Statutes require all deposits made by cities with financial institutions are
collateralized in an amount equal to 110% of deposits in excess of Federal Deposit Insurance
Corporation (FDIC) insurance.
Minnesota Statutes authorizes the City to invest in obligations 9fthe U.S. Treasury, agencies
and instrumentalities, shares of investment companies whose only investments are in the
aforementioned securities, obligations of the State of MinnesotJ or its municipalities,
I
bankers' acceptances, future contracts, repurchase and reverse rfPurchase agreements and
commercial paper of the highest quality with a maturity of no longer then 270 days and in the
Minnesota Municipal Investment Pool.
Custodial Credit Risk - Deposits: In the case of deposits, this is the risk that in the event of a
bank failure, the City's deposits may not be returned to it. The rity has an investment policy
in place to address custodial credit risk for deposits, stating all deposits must be deposited
with depositories in good standing with FDIC or the National C~edit Union Administration
(NCVA). All deposits shall be covered by FDIC or NCVA or tllateralized at 110%
Concentration of Credit Risk: Investments should be diversifiea to avoid incurring
unreasonable risks inherent in over investing in specific instrurrtents, individual financial
institutions or maturities. The City's investment policy states t*e City will attempt to
diversify its investments according to type and maturity. The p<prtfolio, as much as possible,
will contain both short-term and long-term investments. The qty will attempt to match its
investments with anticipated cash flow requirements. Extendeq maturities may be utilized to
take advantage of higher yields. An attempt to keep the level 01 extended maturities near
35% of the total investments is desired; however, no more than 140% of the total investments
should extend beyond 5 years and in no circumstances should extend beyond 10 years.
Credit Risk: Credit risk is the risk that an issuer or other countJrparty to an investment will
not fulfill its obligations. Minnesota Statutes 118A.04 and 118..)\.05 limit investments that
are in the top two ratings issued by nationally recognized statistical rating organizations.
34
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2006
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity (Continued)
1. Deposits and Investments (Continued)
Interest Rate Risk: The City should try to minimize the risk that arises from over investing in
specific instruments, individual financial institutions or maturities.
Custodial Credit Risk - Investments: For an investment, this is the risk that in the event of
the failure of the counterparty, the City will not be able to recover the value of its investments
or collateral securities that are in the possession of an outside party.
The City's investment policy does not address interest rate risk, credit risk or custodial credit
risk for investments.
2. Receivables and Payables
All trade and property tax receivables are shown at a gross amount since both are assessable
to the property taxes and are collectible upon the sale of the property.
The City levies its property tax for the subsequent year during the month of December.
December 28 is the last day the City can certify a tax levy to the County Auditor for
collection the following year. Such taxes become a lien on January 1 and are recorded as
receivables by the City at that date. 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. The tax levy notice is mailed in March with the
first half of the payment due on May 15 and the second half of the payment due on
October 15. Taxes not collected as of December 31 each year are shown as delinquent taxes
receivable.
The County Auditor prepares 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 submits the list of taxes and special assessments to be collected on each
parcel of property to the County Treasurer in January of each year.
3. Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items in both government-wide and fund financial statements.
35
CITY UI1' ST. JUSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2006
NOTE 1 - SUMMARY OF SIIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity (Continued)
4. Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads,
sidewalks and similar items), are reported in the applicable gov~rnmental or business-type
activities columns in the government-wide financial statements. I Capital assets are defined by
the City as assets with an initial, individual cost of more than $ 1,000 and an estimated useful
life in excess of two years. Such assets are recorded at historidl cost or estimated historical
cost if purchased or constructed. Donated capital assets are rec~rded at estimated fair market
value at the date of donation. I
The costs of normal maintenance and repairs that do not add to he value of the asset or
materially extend assets lives are not capitalized.
Property, plant and equipment of the City are depreciated using the straight-line method over
the following estimated useful lives:
Assets
Years
Buildings
Park Buildings
Building Improvements
Street Construction
Street Overlay
Furniture
Light Vehicles
Machinery and Equipment
Fire Trucks
Utility Distribution System
40
30
15
15
10
5
5
5-7
20
50
5. Compensated Absences
The City compensates employees who leave City service in goo~ standing for all earned,
unused vacation. Employees can accrue up to 200 hours of vacation depending on years of
service. At the employees' anniversary date, the maximum amdunt of carryover is 80 hours.
In addition, employees are compensated for unused sick leave (ilip to a maximum of720
hours) at various rates depending on the employee type, providdd the City's notice of
termination policy has been complied with.
3<:
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2006
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity (Continued)
6. Long- Term Obligations
In the government-wide financial statements, and proprietary fund types in the fund financial
statements, long-term debt and other long-term obligations are reported as liabilities in the
applicable governmental activities, business-type activities or proprietary fund type Statement
of Net Assets.
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of debt
issued is reported as other financing sources. Issuance costs, whether or not withheld from
the actual debt proceeds received, are reported as debt service expenditures.
7. Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance for
amounts that are not available for appropriation or are legally restricted by outside parties for
use for a specific purpose. Designations of fund balance represent tentative management
plans that are subject to change.
8. Net Assets
Net assets represent the difference between assets and liabilities in the government-wide
financial statements. Net assets invested in capital assets, net of related debt consists of
capital assets, net of accumulated depreciation, reduced by the outstanding balance of any
long-term debt used to build or acquire the capital assets. Net assets are reported as restricted
in the government-wide financial statement when there are limitations on their use through
external restrictions imposed by creditors, grantors or laws or regulations of other
governments.
9. Use of Estimates
The preparation of the financial statements in conformity with U.S. generally accepted
accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenditures/expenses during the reporting period. Actual results could differ from those
estimates.
37
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATElENTS
December 31, 2006
NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Information
1. In August of each year, City staff submits to the City Council, a proposed operating
budget for the fiscal year commencing the following J anuarJ 1. The operating budget
includes proposed expenditures and the means of financing them for the upcoming year.
2. Public hearings are conducted to obtain taxpayer comments.
3. The budget is legally enacted through passage of a resolutioj after obtaining taxpayer
comments. I
4. Budgets for the General and Special Revenue Funds are adopted on a basis consistent
with U.S. generally accepted accounting principles. I
5. Expenditures may not legally exceed budgeted appropriations at the department level. No
fund's budget can be increased without City Council approv~l. The City Council may
authorize transfer of budgeted amounts between department~ within any fund.
6. Annual appropriated budgets are adopted during the year fO~ the Genem! and Special
Revenue Funds. Annual appropriated budgets are not adopted for Debt Service Funds
because effective budgetary control is alternatively achieve1 through bond indenture
provisions. Budgetary control for Capital Projects Funds is accomplished through the use
ofproject controls and formal appropriated budgets are not Jdopted.
7. Budgeted amounts are as originally adopted by the City CO+Cil. There were no
amendments for 2006. Budgeted expenditure appropriations lapse at year-end.
Encumbrances outstanding at year-end expire and outstanding purciase orders are canceled and
not reported in the financial statements.
38
CITY UF ST. JUSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2006
NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
B. Deficit Fund Balance
The following funds had deficit fund balances at December 31, 2006:
Nonmajor Governmental Funds:
Special Revenue:
Lake W obegon Trail
City Beautification
Debt Service:
2004 Equipment Certificates
Maintenance Facility G.O.
EDA Revenue Bonds of 2003
Capital Projects:
2002 Street Improvements
2003 Street Improvements
Maintenance Facility
Cloverdale Area
2006 Equipment Certificates
EDA Crossover 2005A
8th Street Improvements
$ 10,007
58,941
542
4,448
29,647
45,607
123,288
500,336
11,383
403
157,719
These deficits will be eliminated with future revenues or transfers from other funds.
NOTE 3 - DEPOSITS AND INVESTMENTS
A. Dep.osits
Custodial Credit Risk - Deposits: As of December 31,2006, the City's bank balance was not
exposed to custodial credit risk because it was fully insured through the FDIC and fully
::ollateralized with securities held by the pledging financial institutions trust department or agent
and in the City's name. At December 31,2006, the City's deposits had a carrying value as
shown below.
Certificates of Deposit
Checking
Savings
$ 11,332,689
323,697
270,597
Total
$ 11,926,983
39
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2006
NOTE 3 - DEPOSITS AND INVESTMENTS
B. Investments
As of December 31,2006, the City had the following investments:
'f eighted Standard &
Fair Average Poor's
Value Mat~rity (Years) Rating
Brokered Certificates of Deposit $ 719,947 3.27 N/A
Government Bonds/Notes 902,957 5.26 AAA
State and Local Government Securities 619,536 N/A N/A
Brokered Money Market 401,964 N/A N/A
Total $ 2,644,404
Interest Rate Risk: The City was not exposed to interest rate risks due to the fact their
investments were not exposed to highly sensitive changes in interet rates.
Credit Risk: As of December 31, 2006, the City's investments were rated as in the table above.
Concentration of Credit Risk: As of December 31,2006, the City,J investments in FHLB
(5.6%), FNMNA (11.1 %), FHLMC (17.4%) and State and Local Gbvernment Securities (23.4%)
exceeded 5% ofthe City's total investment portfolio.
Custodial Credit Risk - Investments: The City was not exposed to custodial credit risk; all
deposits and investments were insured or fully collateralized and wbre registered in the name of
the City.
C. Deposits and Investments
The following is a summary of deposits and investments as of December 31,2006:
Deposits (Note 3.A.)
Investments (Note 3.B.)
Petty Cash
$ 11,926,983
2,644,404
220
Total
$ 14,571,607
40
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2006
NOTE 3 - DEPOSITS AND INVESTMENTS
C. Deposits and Investments (Continued)
Deposits and investments are presented in the December 31, 2006 basic financial statements as
follows:
Statement of Net Assets:
Cash and Investments
Cash with Fiscal Agent
Total Deposits and Investments
NOTE 4 - INTERFUND BALANCES AND TRANSFERS
$ 13,952,071
619,536
$ 14,571.607
The composition of interfund transfers as of December 31, 2006, is as follows:
Transfer In
Other
Governmental
Funds Water
General
Transfer Out:
General
Utility Extension
Other Governmental Funds
Storm Water
$
$ 201,058
89,700
43,000
39,200
14,000
Total Transfers
$ 14,000
$ 372,958
$
267,050
$ 267,050
Sanitary
Sewer
$
47,200
$ 47,200
Total
$ 201,058
403,950
43,000
53,200
$ 701,208
41
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATE :ENTS
December 31,2006
NOTE 5 - CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2006 was as follows:
BegiIming Ending
Balance Increa~es Decreases Balance
Governmental Activities:
Capital Assets not being Depreciated:
Land $ 346,258 $ $ $ 346,258
Construction in Progress 1,119,723 1,589,S51 392,195 2,317,379
Total Capital Assets I
not being Depreciated 1,465,981 1,589,S51 392,195 2,663,637
Capital Assets being Depreciated:
Improvements 525,533 525,533
Buildings 2,300,892 2,300,892
Infrastructure 11,842,416 223,t67 12,065,583
Machinery and Equipment 2,105,571 265,088 17,846 2,352,813
Total Capital Assets being Depreciated 16,774,412 488J55 17,846 17,244,821
Less Accumulated Depreciation for: I
Improvements 269,759 28,V39 298,498
I
Buildings 443,413 65,049 508,462
I
Infrastructure 4,275,920 707,001 4,982,921
I
Machinery and Equipment 1,137,602 226,052 17,846 1,345,808
Total Accumulated I
Depreciation 6,126,694 1,026,S41 17,846 7,135,689
Total Capital Assets being I
Depreciated, Net 10,647,718 (538,~86) 10,109,132
Governmental Activities Capital I
Assets, Net $ 12,113,699 $1,051,265 $ 392,195 $12,772,769
42
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2006
NOTE 5 - CAPITAL ASSETS
Beginning
Balance
Increases
Decreases
Ending
Balance
Business-Type Activities:
Capital Assets not being Depreciated:
Land $ 282,882 $ 95,000 $ $ 377,882
Construction in Progress 2,048,385 7,766,234 312,887 9,501,732
Total Capital Assets not
being Depreciated 2,331,267 7,861,234 312,887 9,879,614
Capital Assets being Depreciated:
Buildings 517,983 517,983
Plant and Lines 18,428,931 312,889 18,741,820
Machinery and Equipment 489,617 21,063 510,680
Total Capital Assets
being Depreciated 19,436,531 333,952 19,770,483
Less Accumulated Depreciation for:
Buildings 479,134 25,899 505,033
Plant and Lines 2,701,735 377,150 3,078,885
Machinery and Equipment 186,561 25,909 212,470
Total Accumulated Depreciation 3,367,430 428,958 3,796,388
Total Capital Assets being
Depreciated, Net 16,069,101 (95,006) 15,974,095
Business-Type Activities
Capital Assets, Net $ 18,400,368 $7,766,228 $ 312,887 $25,853,709
Depreciation expense was charged to functions/programs of the City as follows:
Governmental Activities:
General Government
Public Safety
Public Works
Culture and Recreation
Total Depreciation Expense - Governmental Activities
$ 49,316
104,856
786,535
86,134
$ 1,026,841
Business-Type Activities:
Water
Sanitary Sewer
Storm Sewer
$ 161,008
200,479
67,471
Total Depreciation Expense - Business-Type Activities
$ 428,958
43
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2006
NOTE 6 - LONG-TERM DEBT
A. General Obligation Bonds
The City issues General Obligation (G.O.) Bonds to provide for financing improvement,
development and street improvement projects. Debt service is covered respectively by tax
increments and special assessments against benefited properties with any shortfalls being paid
from general taxes.
G.O. Bonds are direct obligations and pledge the full faith and credo t of the City. These Bonds
generally are issued as 15 year Serial Bonds with equal debt service payments each year.
B. Components of Long-Term Liabilities
Issue Interest Original Final Principal Due Within
Date Rate Issue Maturity Outstanding One Year
Governmental Activities: I
G.O. Debt:
Refunding Bonds of2003 07/28/03 1.50%-4.40% $ 815,000 12/0 1/17 $ 710,000 $ 50,000
Certificates of Indebtedness I
of2004 08/27/04 2.40%-3.25% 280,000 12/01/08 145,000 70,000
Certificates of Indebtedness I
of2006 02/22/06 3.40%-3.60% 250,000 12/01/10 250,000 60,000
Total G.O. Bonds 1,105,000 180,000
Special Assessment Bonds:
Improvement Bonds 00998 11101198 3.85%-5.00% 545,OqO 12/01113 300,000 35,000
Improvement Bonds of 1999 1 % 1199 4.875%-5.20% 1,330,OqO 12/01114 825,000 85,000
Improvement Bonds of 2002 08/01102 2.00%-4.30% 4,700,OqO 12/01/17 3,250,000 240,000
Improvement Bonds of2003 08/01103 1.25%-2.65% 2,135,000 12/01108 815,000 400,000
Improvement Crossover I
Refunding Bonds of2003 07/28/03 1.25%-3.15% 750,OqO 12/01111 400,000 120,000
Improvement Bonds of2004 07/29/04 2.15%-3.60% 590,OqO 12/01109 360,000 115,000
Improvement Bonds of2005B 03/01/05 2.50%-4.40% 1,655,OqO 12/01120 1,565,000 90,000
Improvement Bonds of2005C 09/01105 3.50% 3,100,OqO 12/01110 3,100,000 740,000
Improvement Bonds of2006 06/13/06 4.0%-4.25% 2,375,000 12/01121 2,375,000 120,000
Total G.O. Special
Assessment Bonds 12,990,000 1,945,000
Revenue Bonds:
EDA Public Revenue Bonds of2000 05/01100 5.60%-6.60% 960,OqO 12/01107 675,000 675,000
EDA Public Revenue Bonds of2003 04/01103 2.00%-4.90% 700,OqO 12/01118 600,000 40,000
EDA Revenue Refunding Bonds of2005 03/01105 2.75%-4.15% 645,000 12/01115 645,000
Total Revenue Bonds 1,920,000 715,000
Loan Payable 86,017 28,298
Compensated Absences 159,794 6,444
Governmental Activities,
Long-Term Liabilities 16,260,811 2,874,742
44
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2006
NOTE 6 - LONG-TERM DEBT
B. Components of Long-Term Liabilities (Continued)
Issue Interest Original Final Principal Due Within
Date Rate Issue Maturity Outstanding One Year
Business-Type Activities:
Revenue Bonds:
Sewer Revenue Bonds of2001 1010 lIO I 3.30%-5.15% $ 640,000 J2f0l!21 $ 515,000 $ 25,000
Water Revenue
Refunding Bonds of 2002 09101/02 1.75%-4.80% 810,000 12/0 ]/16 535,000 40,000
Water Revenue Bonds of 2005 12/01/05 4.00%-4.25% 4,595,000 12/0 ]/28 4,595,000
Water Revenue Bonds of2006 Olll2/06 3.50%-4.00% 3,575,000 02/01/16 3,305,000 280,000
-
Total Revenue Bonds 8,950,000 345,000
Compensated Absences 88,677 1,486 -
Total Business-Type Activities 9,038,677 346,486 -
Total all Long-Term Liabilities $ 25,299,488 $ 3,221,228 -
Long-term bonded indebtedness listed on the previous page and above were issued to finance
acquisition and construction of capital facilities or to refinance (refund) previous bond issues.
C. Changes in Long-Term Liabilities
Long-term liability activity for the year ended December 31, 2006 was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental Activities:
Bonds Payable:
General Obligation $ 1,045,000 $ 250,000 $ 190,000 $ 1,105,000 $ 180,000
G.O. Special Assessment 11,850,000 2,375,000 1,235,000 12,990,000 1,945,000
Revenue Bonds 2,010,000 90,000 1,920,000 715,000
Total Bonds Payable 14,905,000 2,625,000 1,515,000 16,015,000 2,840,000
Loan Payable 114,034 28,017 86,017 28,298
Compensated Absences 155,854 65,607 61,667 159,794 6,444
269,888 65,607 89,684 245,811 34,742
Governmental Activities,
Long-Term Liabilities 15,174,888 2,690,607 1,604,684 16,260,811 2,874,742
Business-Type Activities:
Bonds Payable:
G.O. Utility Revenue Bonds 5,710,000 3,575,000 335,000 8,950,000 345,000
Compensated Absences 74,815 32,939 19,077 88,677 1,486
Total Long-Term
Liabilities $ 20,959,703 $ 6,298,546 $ 1,958,761 $ 25,299,488 $ 3,221,228
The General Fund typically liquidates the liability related to compensated absences.
45
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMrNTS
December 31,2006
NOTE 6 - LONG-TERM DEBT
D. Minimum Debt Payments
Minimum annual principal and interest payments required to retire 101 ng-term liabilities:
Governmental Activities
G.O. Special Assessment Bonds Public Project IRevenue Bonds
Principal Interest Principal I Interest
Year Ending
December 31,
2007 $ 1,945,000 $ 473,030 $ 715,000 $ 68,000
2008 1,995,000 416,126 110,000 47,178
2009 1,590,000 354,003 115,000 43,912
2010 1,515,000 300,159 120,000 40,223
2011 730,000 247,874 125,000 36,098
2012-2016 3,380,000 803,581 610,000 102,313
2017-2021 1,835,000 198,255 125,000 9,250
Total $ 12,990.000 $ 2,793,028 $ 1,920,000 $ 346,974
Governmental Activ*ies
Year Ending G.O. Debt Loan fayable
December 31, Principal Interest Principal Interest Total
2007 $ 180,000 $ 38,300 $ 28,298 $ 857 $ 3,448,485
2008 190,000 33,130 28,581 574 2,820,589
2009 125,000 27,277 29,138 289 2,284,619
2010 120,000 23,198 2,118,580
2011 60,000 19,125 1,218,097
2012-2016 350,000 61,423 5,307,317
2017-2021 80,000 3,520 2,251,025
Total $ 1,105,000 $ 205,973 $ 86,017 $ 1,720 $ 19,448,712
46
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2006
NOTE 6 - LONG-TERM DEBT
D. Minimum Debt Payments (Continued)
Business- Type Activities
Year Ending Utility Revenue Bonds
December 31, Principal Interest Total
2007 $ 345,000 $ 363,532 $ 708,532
2008 355,000 351,347 706,347
2009 375,000 338,008 713,008
2010 390,000 323,833 713,833
2011 400,000 308,828 708,828
2012-2016 2,275,000 1,291,226 3,566,226
2017-2021 2,365,000 811,583 3,176,583
2022-2026 2,175,000 300,193 2,475,193
2027-2031 270,000 17,425 287,425
Total $ 8,950,000 $ 4,105,975 $ 13~055,975
E. Conduit Debt
Conduit debt obligations are certain limited obligation revenue bonds or similar debt instruments
issued for the express purpose of providing capital financing for a specific third party. The City
has issued various revenue bonds to provide funding to private sector entities for projects deemed
to be in the public interest. Although these bonds bear the name of the City, the City has no
obligation for such debt. Accordingly, the bonds are not reported as liabilities in the financial
statements of the City.
As of December 31, 2006, the City's conduit debt consisted of the following:
Commercial Development Revenue Note
(Independence Center), Series 2001
$
514,057
Industrial Revenue Bonds (St. Joseph
Development, LLC), Series 2002
2,335,000
Total
$ 2,849,057
47
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2006
NOTE 7 - RESERVED FUND BALANCES/NET ASSETS
Reservedmesignated Fund Equity
Fund equity balances are classified below to reflect the limitations and restrictions of the
respective funds.
A. Reserved Fund Balance
Reserved for
Debt Capital
Service Acquisition Total
G.O. Improvement
Bonds of 2002 $ 962,456 $ $ 962,456
G.O. Improvement
Bonds of 2005B 509,504 509,504
Northland Heights/
Trans Corridor 843,714 843,714
Northland Heights 786,156 786,156
Utility Extension 1,652,335 1,652,335
2006 Street Improvements 577,713 577,713
Nonmajor Governmental
Funds 3,102,133 555,202 3,657,335
Total $ 5,417,807 $ 3,571,406 1$ 8,989,213
B. Designated/Undesignated Fund Balance
Designated
Capital Debt Working
Proj ects Service Capital Undesignated Total
General Fund $ 61,815 $ 174,746 $ 250,000 J 435,625 $ 922,186
Other Governmental I
Funds 424,291 (419,465) 4,826
Total $ 486,106 $ 174,746 $ 250,000 J 16,160 $ 927,012
I
48
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2006
NOTE 8 - RISK MANAGEMENT
The City purchases commercial insurance coverage through the League of Minnesota Cities
Insurance Trust with other cities in the state, which is a public entity risk pool currently operating
as a common risk management and insurance program. The City pays an annual premium to the
League for its insurance coverage. The League is self-sustaining through commercial companies
for excess claims. The City is covered through the pool for any claims incurred but unreported, but
retains risk for the deductible portion of its insurance policies. The amount of these deductibles is
considered immaterial to the financial statements.
There were no significant reductions in insurance from the previous year or settlements in excess
of insurance coverage for any of the past three fiscal years.
The City's workers' compensation insurance policy is retrospectively rated. With this type of
policy, final premiums are determined after loss experience is known. The amount of premium
adjustment for 2006 is estimated to be immaterial based on workers' compensation rates and
salaries for the year.
At December 31, 2006, there were no other claims liabilities reported in the Fund based on the
requirements of GASB Statement No.1 0, which requires that a liability for claims be reported if
information prior to the issuance of the financial statements indicates that it is probable that a
liability has been incurred at the date of the financial statements and the amount of the loss can
be reasonably estimated.
NOTE 9 - DEFINED BENEFIT PENSION PLANS - STATE-WIDE
Public Employees' Retirement Association
A. Plan Description
All full-time and certain part-time employees of the City ofSt. Joseph are covered by defined
benefit plans administered by the Public Employees' Retirement Association of Minnesota
(PERA). PERA administers the Public Employees' Retirement Fund (PERF) and the Public
Employees' Police and Fire Funds (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 Basic Plan. Coordinated Plan members
are covered by social security and Basic Plan members are not. All new members must
participate in the Coordinated Plan. All police officers and firefighters who qualify for
membership by statute are covered by the PEPFF.
49
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATE ENTS
December 31, 2006
NOTE 9 - DEFINED BENEFIT PENSION PLANS - STATE-WIDE
Public Employees' Retirement Association (Continued)
A. Plan Description (Continued)
PERA provides retirement benefits as well as disability benefits to members, and benefits to
survivors upon death of eligible members. Benefits are established ~y 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, ag1e and years of credit at
termination of service. I
Two methods are used to compute benefits for PERA'S Coordinatetl and Basic Plan members.
The retiring member receives the higher of a step-rate benefit accru~l formula (Method 1) or a
level accrual formula (Method 2). Under Method 1, the annuity aC9rual rate for a Basic Plan
member is 2.2% of average salary for each of the first 10 years of service and 2.7% for each
remaining year. The annuity accrual rate for a Coordinated Plan mJmber is 1.2% of average
salary for each of the first 10 years and 1.7% for each remaining yeir. Under Method 2, the
annuity accrual rate is 2.7% of average salary for Basic Plan membJrs and 1.7% for Coordinated
Plan members for each year of service. For PEPFF members, the a[:1 uity accrual rate is 3.0% for
each year of service. For all PERF and PEPFF members hired prio to July 1, 1989, whose
annuity is calculated using Method 1, a full annuity is available wh . n age plus years of service
equal 90. Normal retirement age is 55 for PEPFF members and 65 ror Basic and Coordinated
Plan members hired prior to July 1, 1989. Normal retirement age for unreduced social security
benefits are is capped at 66 for Coordinated Plan members hired onlor after July 1, 1989. A
reduced retirement annuity is also available to eligible members Seiking early retirement.
There are different types of annuities available to members upon retirement. A single-life
annuity is a lifetime annuity that ceases upon the death of the retireJ--no survivor annuity is
payable. There are also various types of joint and survivor annuity pptions available which will
be 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 sec~ion 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 last terminated
their public service.
PERA issues a publicly available financial report that includes financial statements and required
supplementary information for PERF and PEPFF. That report maylbe obtained on the Internet at
www.mnpera.org.bYWritingtOPERAat60EmPireDrive.SUite2IO.St. Paul, Minnesota
55103-2088 or by calling (651) 296-7460 or (800) 652-9026.
.so
CiTY UJ" 1ST. JUISEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2006
NOTE 9 - DEFINED BENEFIT PENSION PLANS - STATE-WIDE
Public Employees' Retirement Association (Continued)
B. Funding Policy
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These
Statutes are established and amended by the state legislature. The City makes annual
contributions to the pension plans equal to the amount required by state statutes. PERF Basic
Plan members and Coordinated Plan members were required to contribute 9.1 % and 5.5%,
respectively, of their annual covered salary in 2006. Contribution rates in the Coordinated Plan
will increase in 2007 to 5.75%. PEPFF members were required to contribute 6.2% of their
annual covered salary in 2006. That rate will increase to 7.8% in 2006. The City ofSt. Joseph is
required to contribute the following percentages of annual covered payroll: 11.78% for Basic
Plan PERF members, 6.00% for Coordinated Plan PERF members and 10.5% for PEPFF
members. The City's contributions to the PERF for the years ending December 31, 2006, 2005
and 2004 were $ 29,879, $ 25,534 and $ 20,915, respectively. The City's contributions to the
PEPFF for the years ending December 31,2006,2005 and 2004 were $ 37,252, $ 33,854 and
$ 28,867, respectively. The City's contributions were equal to the contractually required
contributions for each year as set by state statute.
NOTE 10-COMMITMENTS
The City has entered into contracts for construction as follows:
Project
Cloverdale Area Improvements
Northland Heights
Well Treatment Plant
Trunk Water Main Improvements
2006 Street Improvements
8th Avenue NE Improvements
Centennial Park
Total
Contract
Amount
$ 429,240
1,682,619
5,847,349
482,117
1,554,692
155,644
108,016
Expended
through
12/31/06
Commitment
$ 400,708
1,640,076
5,240,601
473,209
1,419,393
144,332
100,374
$
28,532
42,543
606,748
8,908
135,299
11 ,312
7,642
$
840,984
51
CITY OJ;' ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2006
NOTE 11 - RELATED PARTY TRANSACTION
The St. Joseph EDA has issued Public Project Revenue Bonds of2~00, 2003 and 2005. These
Bonds are to finance the City Hall and maintenance facility project~. Rental payments are due
from the City to the St. Joseph EDA. The City will own the projects upon completion of the
rental payments. Since the St. Joseph EDA is reported as a blended component unit of the City,
the lease transactions are not reported. The debt and projects are retorded as though part of the
City.
NOTE 12 - CONTINGENCY
The City is currently involved in litigation that could result in a liabl'lity to the City. Although
the outcome is unknown, the City estimates the potential claims no~ covered by insurance
resulting from such litigation would not materially affect the financ' al statements of the City.
52
l.:tTY Utf :ST. JU:SEPH 1
Stearns County, Minnesota
SCHEDULE OF REVENUES, EXPENDITUR SAND
CHANGES IN FUND BALANCES - I
BUDGET AND ACTUAL - GENERAL F~ND
I
For the Year Ended December 31, 2006
Orignial and
Final Budget
\,\ctual Amounts
Variance with
Final Budget -
Positive
(Negative)
REVENUES:
Property Taxes
Sales Taxes
Special Assessments
Licenses and Permits
Intergovernmental Revenue:
Local Government Aid
Market Value Credit
PERA Aid
Fire Aid
Police Aid
Federal Grants
State Grants
Other Grants and Aids
Total Intergovernmental Revenue
$
698,599
100
2,000
3 15,400
$
669,718
23,872
1,067
335,576
$
(28,881)
23,772
(933)
20,176
773,509
1,541
65,000
30,000
773,509
71,706
1,541
48,262
39,889
5,045
5,070
6,804
951,826
71,706
7,200
877,250
(16,738)
9,889
5,045
5,070
(396)_
74,576
Charges for Services:
General Government
Public Safety
Park and Recreation
Total Charges for Services
43,300 7,452 (35,848)
243,200 194,250 (48,950)
5,000 4,090 (910)_
291,500 205,792 (85,708)
65,750 69,686 3,936
Fines and Forfeitures
Miscellaneous Revenues:
Investment Income
Contributions and Donations
Other
Total Miscellaneous
Total Revenues
39,000 58,886 19,886
1,655 1,655
1,500 23,457 21,957
40,500 83,998 43,498
2,291,099 2,341,535 50,436
54
CITY OF ST. JOSEPH
Stearns County, Minnesota
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL FUND
For the Year Ended December 31, 2006
Orignial and
Final Budget
Actual Amounts
Variance with
Final Budget -
Positive
(Negative)
EXPENDITURES:
General Government:
Mayor and Council
Administrative and Finance
Other General Government
Capital Outlay
Total General Government
$
62,140
258,245
162,941
16,000
499,326
$
89,399
266,037
100,414
2,593
458,443
$
(27,259)
(7,792)
62,527
13,407
40,883
Public Safety:
Police:
Current
Capital Outlay
Total Police
Fire:
Current
Capital Outlay
Total Fire
Other:
Current
Capital Outlay
Total Other
Total Public Safety
641,335 640,198 1,137
7,600 203 7,397
648,935 640,401 8,534
272,801 302,438 (29,637)
46,750 34,145 12,605
319,551 336,583 (17,032)
210,851 194,235 16,616
400 400
211,251 194,235 17,016
1,179,737 1 , 1 71 ,219 8,518
Public Works:
Streets and Highways:
Street Maintenance and Storm Sewers
Snow and Ice Removal
Street Engineering
Capital Outlay
Total Streets and Highways
186,140 163,206 22,934
64,115 28,977 35,138
60,500 285,601 (225,101)
85,000 85,000
-
395,755 477,784 (82,029)
55
CITY OF ST. JOSEPH
Stearns County, Minnesota
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL FUND
For the Year Ended December 31, 2006
Orignial and
Final Budget
Actual Amounts
Variance with
Final Budget -
Positive
(Negative)
EXPENDITURES:
Public Works: (Continued)
Culture and Recreation:
Current
Capital Outlay
Total Culture and Recreation
Total Expenditures
$ 142,533
14,001
156,534
2,231,352
$ 122,642
$
19,891
14,001
33,892
1,264
122,642
2,230,088
Excess of Revenues Over
(Under) Expenditures
59,747
III ,447
51,700
OTHER FINANCING SOURCES (USES):
Sale of Property
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
80,875 80,875
14,000 14,000
(201,058) (201,058)_
14,000 (106,183) (120,183)_
$ 73,747 5,264 $ (68,483)=
FUND BALANCES:
Beginning of Year
916,922
End of Year
$
922,186
'if)
CITY OF ST. JOSEPH
Stearns County, Minnesota
COMBINING BALANCE SHEET -
NONMAJOR GOVERNMENTAL FUNDS
December 31,2006
Special Revenue
EDA TIF 1-4
Economic St. Joseph Park
Development TIF 1-3 Borgert I Dedication Recreation
Devel9pment
(150) (155) (1 ~6) (205) Center (210)
ASSETS: I
Cash and Investments
(Including Cash Equivalents) $ 65,213 $ 4,256 $ 33,794 $ 149,262 $ 43,990
Cash with a Fiscal Agent
Taxes Receivable - Delinquent
Special Assessments Receivable:
Delinquent
Deferred
Accounts Receivable
Interest Receivable 198 789 190
Due from Other Governments
$ $ $ I
Total Assets 65,411 4,256 ~3,794 $ 150,051 $ 44,180
LIABILITIES AND FUND BALANCES:
Liabilities:
Cash Overdraft $ $ $ $ $
Accounts and Contracts Payable 2,070 14,533
Deferred Revenue
Total Liabilities 2,070 14,533
Fund Balances:
Reserved for:
Debt Service
Capital Projects
Unreserved, Reported in:
Special Revenue - Undesignated 63,341 4,256 33,794 135,518 44,180
Debt Service - Undesignated
Capital Projects - Designated
Capital Projects - Undesignated
Total Fund Balances 63,341 4,256 3;3,794 135,518 44,180
Total Liabilities and
Fund Balances $ 65,411 $ 4,256 $ 313,794 $ 150,051 $ 44,180
57
$
374
374
$
374
$ 10,007
10,007
(10,007)
(10,007)
$
$
58,941
12,500
71,441
(58,941)
(58,941)
$
12,500
$
48,225
48,225
$ 48,225
$
193,168
193,168
$ 193,168
$ 68,948 $
16,603
12,500
98,051 .
453,908
453,908
$ 551,959
1,344
1,193
2,537
(542)
(542)
$
1,995
$
99,068
99,068
216,824
216,824
$ 315,892
58
CITY OF ST. JOSEPH
Stearns County, Minnesota
COMBINING BALANCE SHEET -
NONMAJOR GOVERNMENTAL FUNDS
December 31,2006
Debt S~rvice
EDA Public
Project
Revenue G.O.
G.O. Bonds Bonds of 2004 Certificate of
of 1999 2000/2005 I G.O. Bonds Indebtedness
Improvements
(321 ) (322) (3~3) of 200 1 (324) of2002 (327)
ASSETS:
Cash and Investments
(Including Cash Equivalents) $ 291,460 $ $ 25 8,191 $ 122,120 $ 48,662
Cash with a Fiscal Agent 619,536
Taxes Receivable - Delinquent 523 1,720 245 1,172
Special Assessments Receivable:
Delinquent 9,871 2,841
Deferred 397,834 1~,819 10,175
Accounts Receivable
Interest Receivable 891 1,062 497
Due from Other Governments 2,182 1,027 164 728
$ 702,761 $ 622,283 $ I $ $
Total Assets 27f),322 132,792 50,562
LIABILITIES AND FUND BALANCES:
Liabilities:
Cash Overdraft $ $ 14,892 $ $ $
Accounts and Contracts Payable
Deferred Revenue 408,228 1,720 If),905 10,175 1,172
Total Liabilities 408,228 16,612 1~,905 10,175 1,172
Fund Balances:
Reserved for:
Debt Service 294,533 605,671 25, ,417 122,617 49,390
Capital Projects
Unreserved, Reported in:
Special Revenue - Undesignated
Debt Service - Undesignated
Capital Projects - Designated
Capital Projects - Undesignated
Total Fund Balances 294,533 605,671 25~,417 122,617 49,390
Total Liabilities and I
Fund Balances $ 702,761 $ 622,283 $ 279,322 $ 132,792 $ 50,562
59
Debt Service
East/W est MN
Maintenance Fire Hall G.O. Street G.O.
G.O. Facility G.O. Refunding Improvement 2006
Improvement EDA Revenue Bonds of Crossover Equipment 2006 Street 8th Street
Bonds of Bonds of 2003 1997/2003 Refunding of Certificates Improvements Improvements
2003 (328) (329) (317,331) 2003 (332) (337) (338) (340)
$ 657,740 $ $ 105,960 $ 251,940 $ 7,041 $ 473,358 $ 38,450
1,029 781 630
35,901 1,024
47,869 78,820 753,102 164,320
2,006 2,965 1,018 4,970
7,387 654 477 369
$ 750,903 $ 1,683 $ 110,183 $ 333,801 $ 7,041 $ 1,231,430 $ 202,770
$
$
5,102
$
$
$
$
$
83,770
83,770
1,029
6,131
781
781
80,474
80,474
753,102
753,102
164,320
164,320
667,133
109,402
253,327
7,041
478,328
38,450
(4,448)
667,133
(4,448)
109,402
253,327
7,041
478,328
38,450
$ 750,903
$
1,683
$ 110,183
$
333,801
$
7,041
$ 1,231,430
$ 202,770
60
CITY OF ST. JOSEPH
Stearns County, Minnesota
COMBINING BALANCE SHEET -
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2006
Debt Service
Capital Projects
2002 Street 200B Street Maintenance Northland
Total Debt Improvements Impr~vements Facility Phase Eight
Service (425) (~28) (429) (430)
ASSETS:
Cash and Investments
(Including Cash Equivalents) $ 2,470,872 $ $ $ $ 24,220
Cash with a Fiscal Agent 619,536
Taxes Receivable - Delinquent 7,364
Special Assessments Receivable:
Delinquent 49,799
Deferred 1,567,774
Accounts Receivable
Interest Receivable 14,244
Due from Other Governments 13,829
Total Assets $ 4,743,418 $ $ $ $ 24,220
LIABILITIES AND FUND BALANCES:
Liabilities:
Cash Overdraft $ 21,338 $ 24,106 $ 45,607 $ 123,288 $
Accounts and Contracts Payable 5,541
Deferred Revenue 1,624,937
Total Liabilities 1,646,275 29,647 145,607 123,288
Fund Balances:
Reserved for:
Debt Service 3,102,133
Capital Projects 24,220
Unreserved, Reported in:
Special Revenue - Undesignated
Debt Service - Undesignated (4,990)
Capital Projects - Designated
Capital Projects - Undesignated (29,647) (45,607) (123,288)
Total Fund Balances 3,097,143 (29,647) (45,607) (123,288) 24,220
Total Liabilities and
Fund Balances $ 4,743,418 $ $ $ $ 24,220
61
Cloverdale
Area (431)
$
$
$ 479,770
20,566
500,336
(500,336)
(500,336)
$
2004
Equipment
Certificate
(432)
$
5,079
$
5,079
$
Capital Projects
295th/103rd
Street
Improvements
(433)
$ 570,610
$ 570,610
$
44,707
44,707
5,079 525,903
5,079
$
5,079
525,903
$ 570,610
2006
Equipment
Certificates
(437)
$
$
$
11,383
11,383
(11,383)
(11,383)
$
EDA Crossover
2005A (439)
$
$
$
403
403
(403)
(403)
$
8th Street
Improvements
(440)
$
$
$ 137,972
19,747
157,719
(157,719)
(157,719)
$
62
CITY OF ST. JOSEPH
Stearns County, Minnesota
COMBINING BALANCE SHEET -
NONMAJOR GOVERNMENTAL FUNDS
December 31,2006
Capital Projects
General Capital Total
Improvements Total Capital Governmental
(490) Projects Funds
ASSETS:
Cash and Investments
(Including Cash Equivalents) $ 424,291 $ 1,024,200 $ 3,983,526
Cash with a Fiscal Agent 619,536
Taxes Receivable - Delinquent 7,364
Special Assessments Receivable:
Delinquent 49,799
Deferred 1,567,774
Accounts Receivable 12,500
Interest Receivable 16,154
Due from Other Governments 62,924
Total Assets $ 424,291 $ 1,024,200 $ 6,319,577
LIABILITIES AND FUND BALANCES:
Liabilities:
Cash Overdraft $ $ 822,529 $ 912,815
Accounts and Contracts Payable 90,561 107,164
Deferred Revenue 1,637,437
Total Liabilities 913,090 2,657,416
Fund Balances:
Reserved for:
Debt Service 3,102,133
Capital Projects 555,202 555,202
Unreserved, Reported in:
Special Revenue - Undesignated 453,908
Debt Service - Undesignated (4,990)
Capital Projects - Designated 424,291 424,291 424,291
Capital Projects - Undesignated (868,383) (868,383)
Total Fund Balances 424,291 Ill,IIO 3,662,161
Total Liabilities and
Fund Balances $ 424,291 $ 1,024,200 $ 6,319,577
63
CITY OF ST. JOSEPH
Stearns County, Minnesota
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2006
Speqial Revenue
EDA TIF 1-4
Economic St. Joseph Park
Development TIF 1-3 Dclvelopment Dedication Recreation
(I50) Borgert (155) I (156) (205) Center (210)
REVENUES:
Property Taxes $ $ $ $ $
Tax Increments 22,239 55,692
Sales Taxes
Special Assessments
Intergovernmental
Charges for Services
Miscellaneous:
Investment Income 1,752 7,744 1,789
Contributions and Donations
Other 25,000
Total Revenues 26,752 22,239 55,692 7,744 1,789
EXPENDITURES:
Current:
General Government
Culture and Recreation 2,987
Economic Development 37,674 21,452 50,448
Debt Service:
Principal
Interest and Other Charges
Capital Outlay:
General Government
Public Works
Culture and Recreation 120,781
Total Expenditures 37,674 21,452 50,448 123,768
Excess of Revenues Over
(Under) Expenditures (10,922) 787 5,244 (I 16,024) 1,789
OTHER FINANCING SOURCES (USES):
Bonds Issued
Transfers In 57,500 43,000
Transfers Out
Total Other Financing Sources (Uses) 57,500 43,000
Net Change in Fund Balances 46,578 787 5,244 (73,024) 1,789
FUND BALANCES:
Beginning of Year, As Previously Stated 16,763 3,469 28,550 208,542 42,391
Prior Period Adjustment
Beginning of Year, Restated 16,763 3,469 28,550 208,542 42,391
End of Year $ 63,341 $ 4,256 $ 33,794 $ 135,51L $ 44,180
64
$
Special Revenue
11,000
2,086
11,000
2,086
374
(10,007)
46,139
(69,941)
374
( 10,007)
46,139
$ (10,007) $ (58,94\) $ 48,22~ _ $ 193,168
(69,941)
374
193,168
193,168
2,987
109,574
120,781
233,342
87,128
100,500
100,500
187,628
266,280
266,280
$ 453,908
Debt Service
70,000 35,000
6,358 16,195
76,358
292
292
(834)
$
(834)
(542)
51,195
(13,623)
(13,623)
230,447
230,447
$ 216,824
65
CITY OF ST. JOSEPH
Stearns County, Minnesota
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHA GES IN FUND BALANCES -
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2006
Deb~ Service
EDA Public
Project Revenue
Bonds of ,004 G.O. Certificate
G.O. Bonds of 2000/2005 Imprfvements G.O. Bonds of Indebtedness
1999 (321) (322) (~23) of2001 (324) of2002 (327)
REVENUES:
Property Taxes $ 27,315 $ 89,648 $ 14,240 $ $ 63,458
Tax Increments
Sales Taxes
Special Assessments 182,172 1,900 29,350
Intergovernmental 2,869 9,512 1,537 6,726
Charges for Services
Miscellaneous:
Investment Income 10,193 23,078 14,013 9,777 1,057
Contributions and Donations
Other
Total Revenues 222,549 122,238 I 31,690 39,127 71,241
EXPENDITURES:
Current:
General Government
Culture and Recreation
Economic Development
Debt Service:
Principal 108,017 55,000 115,000 165,000 65,000
Interest and Other Charges 46,483 69,005 15,135 6,353 2,730
Capital Outlay:
General Government
Public Works
Culture and Recreation
Total Expenditures 154,500 124,005 1130,135 171,353 67,730
Excess of Revenues Over
(Under) Expenditures 68,049 (1,767) (98,445) (132,226) 3,511
OTHER FINANCING SOURCES (USES):
Bonds Issued
Transfers In 16,900 19,558
Transfers Out
Total Other Financing Sources (Uses) 16,900 19,558
Net Change in Fund Balances 84,949 (1,767) (98,445) (132,226) 23,069
FUND BALANCES:
Beginning of Year, As Previously Stated 209,584 (12,075) B57,862 254,843 26,321
Prior Period Adjustment 619,513 I -
I
Beginning of Year, Restated 209,584 607,438 B57,862 254,843 26,321
$ $ I
End of Year 294,533 605,671 T $ 122,617 $ 49,390
-
on
Debt Service
East/West MN
Maintenance Fire Hall G.O. Street G.O.
G.O. Facility G.O. Refunding Improvement 2006
Improvement EDA Revenue Bonds of Crossover Equipment 2006 Street 8th Street
Bonds of 2003 Bonds of 2003 1997/2003 Refunding of Certificates Improvements Improvements
(328) (329) (317,331) 2003 (332) (337) (338) (340)
$ $ 56,559 $ 41,564 $ 20,529 $ $ $
143,263 25,481 384,305 38,369
5,957 4,317 2,114
44,934
29,447 28,043 12,845 1,931 39,923 81
172,710 62,516 118,858 60,969 1,931 424,228 38,450
395,000
27,898
35,000
26,320
55,000
27,160
120,000
13,093
7,300
48,785
CITY OF ST. JOSEPH
Stearns County, Minnesota
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHA GES IN FUND BALANCES -
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2006
Debt Service Capital Projects
2002 Street 20031 S '''''I
Total Debt Improvements Impro hements Maintenance Northland Phase
Service (425) (4: 8) Facility (429) Eight (430)
REVENUES:
Property Taxes $ 385,230 $ $ $ $
Tax Increments
Sales Taxes
Special Assessments 830,617
Intergovernmental 40,670
Charges for Services 44,934
Miscellaneous:
Investment Income 179,278
Contributions and Donations
Other 3,500
Total Revenues 1,480,729 I 3,500
EXPENDITURES:
Current:
General Government
Culture and Recreation
Economic Development
Debt Service:
Principal 1,218,017
Interest and Other Charges 312,815
Capital Outlay:
General Government
Public Works 39,590 15,04~ 3,643
Culture and Recreation
Total Expenditures 1,530,832 39,590 ~5,047 3,643
Excess of Revenues Over L'47)
(Under) Expenditures (50,103) (39,590) (3,643)
OTHER FINANCING SOURCES (USES):
Bonds Issued 115,295
Transfers In 148,458
Transfers Out
Total Other Financing Sources (Uses) 263,753 I
(39,590) I
Net Change in Fund Balances 213,650 (61,547) (3,643)
I
FUND BALANCES:
Beginning of Year, As Previously Stated 2,883,493 9,943 15'94~ (123,288) 27,863
Prior Period Adjustment
I
Beginning of Year, Restated 2,883,493 9,943 \5,940 (123,288) 27,863
$ I
End of Year $ 3,097,143 (29,647) $ (45,6071- $ (123,288) $ 24,220
68
Capital Projects
Cloverdale
Area (431)
2004
Equipment
Certi fi cate
(432)
295th/ I 03rd
Street EDA 8th Street
Improvements 2006 Equipment Crossover Improvements
(433) Certificates (437) 2005A (439) (440)
$ $ $ $
$
$
20,289
8,660 403
220,024
37,302 99,665 157,719
37,302 99,665 248,973 403 157,719
(37,302) (99,665) (248,973) (403) (157,719)
237,590
237,590
(37,302) (99,665) (11,383) (403 ) (157,719)
(463,034) 5,079 625,568
(463,034)
5,079
625,568
$ (500,336) $
5,079
$
525,903
$
(11,383) $
(403) $ (157,719)
69
CITY OF ST. JOSEPH
Stearns County, Minnesota
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31,2006
Capital Projects
General Capital Total Other .
I
Improve~ents Governmental
(490), Total Funds
REVENUES:
Property Taxes $ $ $ 385,230
Tax Increments 77,931
Sales Taxes 190,471
Special Assessments 830,617
Intergovernmental 40,670
Charges for Services 44,934
Miscellaneous:
Investment Income 194,769
Contributions and Donations 11 ,000
Other 3,500 29,077
Total Revenues 3,500 1,804,699
EXPENDITURES:
Current:
General Government 20,289 20,289
Culture and Recreation 2,987
Economic Development 109,574
Debt Service:
Principal 1,218,017
Interest and Other Charges 9,063 321,878
Capital Outlay:
General Government 220,024 220,024
Public Works 81,65~ 488,617 488,617
Culture and Recreation 120,781
Total Expenditures 8~,651 737,993 2,502,167
Excess of Revenues Over (851'651)
(Under) Expenditures (734,493) (697,468)
OTHER FINANCING SOURCES (USES):
Bonds Issued 237,590 352,885
Transfers In 124,000 124,000 372,958
Transfers Out (431,000) (43,000) (43,000)
Total Other Financing Sources (Uses) 811,000 318,590 682,843
Net Change in Fund Balances (41,651) (415,903) (14,625)
FUND BALANCES: 4+42
Beginning of Year, As Previously Stated 527,013 3,676,786
Prior Period Adjustment
Beginning of Year, Restated 4281942 527,013 3,676,786
End of Year $ 4241291 $ 111,lllL $ 3,662,161
70
KDV
KERN. DEWENTER.VIERE
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
May 23, 2007
Honorable Mayor and Members
of the City Council
City of S1. Joseph
S1. Joseph, Minnesota
We have audited the financial statements of the governmental activities, the business-type
activities, each major fund and the aggregate remaining fund information of the City of
St. Joseph, Minnesota, as of and for the year ended December 31, 2006, and have issued our
report thereon dated May 23,2007. We conducted our audit in accordance with U.S. generally
accepted auditing standards and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States.
INTERNAL CONTROL OVER FINANCIAL REPORTING
In planning and performing our audit, we considered the City's internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing an
opinion on the financial statements but not for the purpose of expressing an opinion on the
effectiveness of the City's internal control over financial reporting. Accordingly, we do not
express an opinion on the effectiveness of the City's internal control over financial reporting.
Our consideration of internal control over financial reporting was for the limited purpose
described in the preceding paragraph and would not necessarily identify all deficiencies in
internal control over financial reporting that might be significant deficiencies or material
weaknesses. However, as discussed on the following page, we identified certain deficiencies in
internal control over financial reporting that we consider to be significant deficiencies.
71
~DV
KERN. DEWENTER.VIERE
A control deficiency exists when the design or operation of a control I does not allow management
or employees, in the normal course or performing their assigned fulctions, to prevent or detect
misstatements on a timely basis. A significant deficiency is a contr I I deficiency, or combination
of control deficiencies, that adversely affects the City's ability to in~tiate, authorize, record,
process or report financial data reliably in accordance with the regulatory basis of accounting
such that there is more than a remote likelihood that a misstatemen10f the City's financial
statements that is more than inconsequential will not be detected by the City's internal control.
We consider the deficiencies described in the accompanying Sched : Ie of Findings on Legal
Compliance and Internal Controls as Audit Findings 06-01 and 06-02 to be significant
deficiencies in internal control over financial reporting. I
A material weakness is a significant deficiency, or combination of s~gnificant deficiencies, that
results in more than a remote likelihood that a material misstatement of the financial statements
will not be prevented or detected by the entity's internal control.
Our consideration of the internal control over financial reporting fo~ the limited purpose
described in the first paragraph of this section and would not neces~arily identify all deficiencies
in the internal control that might be significant deficiencies and, aC90rdingly, would not
necessarily disclose all significant deficiencies that are also considered to be material
weaknesses. We consider the deficiency described in the accompadying Schedule of Findings on
Legal Compliance and Internal Controls as Audit Finding 06-03 to be a material weakness in
internal control over financial reporting.
COMPLIANCE AND OTHER MATTERS
As part of obtaining reasonable assurance about whether the City's financial statements are free
of material misstatement, we performed tests of its compliance witli certain provisions of laws,
regulations, contracts and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amountsJ However, providing an
opinion on compliance with those provisions was not an objective 9f our audit and, accordingly,
we do not express such an opinion. The results of our tests disclos~d no instances of
noncompliance that are required to be reported under Government Auditing Standards.
We noted certain additional matters that we reported to managemeJt of the City in a separate
letter dated May 23,2007.
This report is intended solely for the information and use of the City Council, management,
federal and state oversight awarding agencies and pass-through entitl' ies and is not intended to be
and should not be used by anyone other than these specified parties.
K.(.A.k I I)e. M-f/t-tL-U I {/ uu-, Lfd.
KERN, DEWENTER, VIERE, LTD.
St. Cloud, Minnesota
72
KDV
KERN. DEWENTER.VIERE
REPORT ON LEGAL COMPLIANCE
May 23,2007
Honorable Mayor and Members
of the City Council
City of St. Joseph
St. Joseph, Minnesota
We have audited the financial statements of the governmental activities, the business-type
activities, each major fund and the aggregate remaining fund information of the City of
St. Joseph, Minnesota, as of and for the year ended December 31, 2006, and have issued our
report thereon dated May 23,2007.
We conducted our audit in accordance with U.S. generally accepted auditing standards and the
provisions of the Minnesota Legal Compliance Audit Guide for Local Government, promulgated
by the State Auditor pursuant to Minnesota Statutes Sec. 6.65. Accordingly, the audit included
such tests of the accounting records and such other auditing procedures as we considered
necessary in the circumstances.
The Minnesota Legal Compliance Audit Guide for Local Government covers seven main
categories of compliance to be tested: contracting and bidding, deposits and investments,
conflicts of interest, public indebtedness, claims and disbursements, other provisions and tax
increment financing. Our study included all of the listed categories.
The results of our tests indicate that for the items tested, the City of St. Joseph, Minnesota,
complied with the material terms and conditions of applicable legal provisions, except as
described in the Schedule of Findings on Legal Compliance and Internal Controls.
This report is intended solely for the information and use of the City Council, City administration
and the Office of the State Auditor, and is not intended to be and should not be used by anyone
other than these specified parties.
rs.(A.~ I Ix /N.e.vr..-tVv I VU--l-l I L-+-d.
KERN, DEWENTER, VIERE, LTD.
St. Cloud, Minnesota
73
CITY OF ST. JOSEPH
Stearns County, Minnesota
SCHEDULE OF FINDINGS ON LEGAL CO PLIANCE
AND INTERNAL CONTROLS
Year Ended December 31,2006
CURRENT YEAR FINDINGS:
Open Meeting Law
During our audit, we noted an occurrence where a City Council meeting was closed to discuss
negotiation strategies for employee contracts. While City Council Jineetings may be closed to
discuss certain labor/management issues, the Minnesota Statutes I3D.03 requires these meetings
shall be tape recorded at the expense of the governing body.
We recommend the City Council tape record closed meetings that are related to labor
negotiations.
Public Purpose Expenditures
According to the Minnesota Office of the State Auditor's publication City Expenditures and the
Public Purpose Doctrine (dated February 2, 2003), "unless specific authority provides otherwise,
employee social events should not be paid for with public funds".
During our audit, we noted the fire department used City funds to pry for an employee picnic.
To be in compliance with the Minnesota Office of the State Auditor's publication, we
recommend the City Council and employees refrain from using pu~lic funds to pay for any
employee social events, unless provided under a wellness program approved by the City Council.
74
CITY OF ST. JOSEPH
Stearns County, Minnesota
SCHEDULE OF FINDINGS ON LEGAL COMPLIANCE
AND INTERNAL CONTROLS
Year Ended December 31, 2006
CURRENT YEAR INTERNAL CONTROL FINDINGS:
Significant Deficiencies:
Audit Finding 06-01 - Lack of Segregation of Accounting Duties
During the year ended December 31, 2006, the City had a lack of segregation of accounting
duties due to a limited number of office employees. This lack of segregation can be
demonstrated in the following areas, which is not intended to be an all inclusive list:
· Adjustments can be made to the utility billing by the Utility Clerk and they are not
reviewed by another individual.
· The accountant prepares the receipts and disbursements and also prepares the cash
reconciliation.
· The City Administrator and accountant have access to all areas of the accounting system.
· The accountant is in charge of payroll and is able to make adjustments to compensated
absences.
. The accountant prepares and posts the accounts payable.
Management and the City Council are aware of this condition and have taken certain steps to
compensate for the lack of segregation, but due to the small staff needed to handle all of the
accounting duties, the costs of obtaining desirable segregation of accounting duties can often
exceed benefits which could be derived. However, management and the City Council must
remain aware of this situation and should continually monitor the accounting system,
including changes that occur.
Audit Finding 06-02 - Preparation of Financial Statements
The City does not have a process and the related internal control established to provide for
the preparation of the financial statements being audited. This control deficiency could result
in a misstatement to the financial statements that would not be prevented or detected.
Therefore, City management has requested KDV, Ltd. Draft the financial statements and
accompanying Notes to the Financial Statements. While it is not unusual for a City of your
size to encounter this circumstance, it is the responsibility of management to receive and
review these financial statements and take responsibility for them. The management of the
City has taken such responsibility.
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CITY OF ST. JOSEPH
Stearns County, Minnesota
SCHEDULE OF FINDINGS ON LEGAL COMPLIANCE
AND INTERNAL CONTROLS
Year Ended December 31, 2006
CURRENT YEAR INTERNAL CONTROL FINDINGS:
Material Weakness:
Auditing Finding 06-03 - Material Audit Adjustments
During the course of our engagement, we proposed material audit adjustments that would not
have been identified as a result ofthe City's existing internal cohtrols, and therefore could
have resulted in a material misstatement of the City's financial dtatements.
In order to ensure financial statements were free from material lis statement, audit
adjustments were required in the following areas:
. Transfers between funds
. Contracts and accounts payable
. Bond proceeds in governmental funds
. Bonds payable in Enterprise Funds
. Recording capital assets and depreciation expense
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