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Council Agenda Item 6
MEETING DATE: May 7, 2009
AGENDA ITEM: 2008 Audit Presentation -Doug Host
SUBMITTED BY: Finance
STAFF RECOMMENDATION: Accept the 2008 Audit as presented
PREVIOUS PLANNING COMMISSION ACTION:
BACKGROUND INFORMATION: Annually the City is required to have an independent audit completed
and the final report is presented to the City Council and submitted to the State of Minnesota. Doug
Host from Larson Allen will make the presentation as he was the principal assigned to the St. Joseph
audit.
Doug will present on overview of fund activity and the financial status of the City as of December 31,
2008.
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ATTACHMENTS: 2008 Audited Financial Statement
REQUESTED PLANNING COMMISSION ACTION: Accept the 2008 Financial Statement
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CITY OF ST. JOSEPH, MINNESOTA
BASIC FINANCIAL STATEMENTS AND
SUPPLEMENTARY INFORMATION
YEAR ENDED DECEMBER 31, 2008
CITY OF ST. JOSEPH, MINNESOTA
TABLE OF CONTENTS
DECEMBER 31, 2008
INTRODUCTORY SECTION
ELECTED OFFICIALS AND ADMINISTRATION 1
FINANCIAL SECTION
INDEPENDENT AUDITORS' REPORT 2
REQUIRED SUPPLEMENTARY INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS 4
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS 17
STATEMENT OF ACTIVITIES 18
FUND FINANCIAL STATEMENTS
BALANCE SHEET-GOVERNMENTAL FUNDS 20
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE GOVERNMENT-WIDE STATEMENT OF NET ASSETS -
GOVERNMENTAL ACTIVITIES 22
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND
BALANCES -GOVERNMENTAL FUNDS 23
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO
THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES -
GOVERNMENTAL FUNDS 25
STATEMENT OF NET ASSETS -PROPRIETARY FUNDS 26
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
-PROPRIETARY FUNDS 27
STATEMENT OF CASH FLOWS -PROPRIETARY FUNDS 28
NOTES TO THE FINANCIAL STATEMENTS 30
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MD&A
BUDGETARY COMPARISON SCHEDULE -GENERAL FUND 58
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 59
SCHEDULING OF FUNDING PROGRESS 60
CITY OF ST. JOSEPH, MINNESOTA
TABLE OF CONTENTS (CONTINUED)
DECEP~BER 31, 2008
FINANCIAL SECTION (CONTINUED)
OTHER SUPPLEMENTARY INFORMATIC~d
COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS
COMBINING BALANCE SHEET- NONMAJOR GOVERNMENTAL FUNDS 61
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS 67
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCE -BUDGET TO ACTUAL -GENERAL FUND 73
COMBINING STATEMENT OF NET ASSETS - NONMAJOR PROPRIETARY
FUNDS 75
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN
NET ASSETS - NONMAJOR PROPRIETARY FUND 76
COMBINING STATEMENT OF CASH FLOWS - NONMAJOR PROPRIETARY
FUNDS 77
REPORT RELATED TO GOVERNMENT AUDITING STANDARDS
REPORTS ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING
STANDARDS 7g
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
80
REPORT ON MINNESOTA LEGAL COMPLIANCE 83
INTR®®UCT~RY SECTI®N
CITY OF ST. JOSEPH, MINNESOTA
ELECTED OFFICIALS AND ADMINISTRATION
DECEMBER 31, 2-J08
POSITION NAME TERM EXPIRES
ELECTED OFFICIALS
Mayor Alan Rassier January 2009
Council Member Dale Wick January 2011
Council Member Rick Schultz January 2009
Council Member Steve Frank January 2011
Council Member Renee Symanietz January 2009
ADMINISTRATION
City Administrator
Finance Director
Judy Weyrens
Lori Bartlett
Appointed
Appointed
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FINANCIAL SECTION
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CPAs, Consulcants & Advisois
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INDEPENDENT AUDITORS' REPORT
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, 2008, which collectively comprise the Citys
basic financial statements as listed in the table of contents. These financial statements are the
responsibility of the City of St. Joseph's management. Our responsibility is to express opinions on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller Genera! of the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the City of St. Joseph, Minnesota as of December 31,
2008, and the respective changes in financial position and cash flows, where applicable, thereof for the
year then ended in conformity with accounting principles generally accepted in the United States of
America.
In accordance with Government Auditing 5fandards, we have also issued our report dated March 13,
2009, 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 our testing of internal control aver 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.
~~ ~ ~I fed ~~ LaisonAlle~ LLP is a member o{Nexia InrcrnacionHt,~a worldwide network of independen[ accounting and consul[ing firms.
INTERNATIONAL
Honorable Mayor and
Members of the City Council
City Of St. Ingeph
The management's discussion and analysis, budgetary comparison information, and schedule of
funding progress on pages 4 to 16, 58 to 59, and 60 respectively, are not a required part of the basic
financial statements but are supplementary information required by U.S. generally accepted accounting
principles. We have applied certain limited procedures; which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the required supplementary
information. However, we did not audit the information and express no opinion on it.
Our audit was conducted far the purpose of forming opinions on the financial statements that collectively
comprise the City of St. Joseph's basic financial statements. The combining and individual financial
statements listed in the table of contents and included on pages 61 to 77 are presented for purposes of
additional analysis and are not a required part of the basic financial statements. The combining and
individual financial statements have been subjected to auditing procedures applied in the audit of the
basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
LarsonAllen LLP
St. Cloud, Minnesota
March 13, 2009
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REQUIRED SUPPLEMENTARY INF®RMATI®N
CITY OF ST. JOSEPH, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
YEAR ENDED ®ECEMBER 31, 2008
As management of the City of St. Joseph, Minnesota, we offer readers of the City of St. Joseph's (City)
financial statements this narrative overview and analysis of the financial activities of the City of St.
Joseph for the fiscal year ended December 31, 2008.
FINANCIAL HIGHLIGHTS
Key financial highlights for 2008 include the following:
• The assets of the City of St. Joseph exceeded its liabilities at the close of the most recent fiscal year
by $34,112,470. Of this amount, $10,565,440 may be used to meet government's ongoing
obligations to citizens and creditors (unrestricted net assets).
• The government's total net assets decreased by $1,421,088 from 2007 to 2008. The decrease is
due to reductions of local government aid, decreased development fees, contract payments made to
the City of St. Cloud for sewer treatment, and the converting water meters to radio read meters.
• As of the close of the current fiscal year, the City of St. Joseph's governmental funds reported
combined ending fund balances of $7,057,145, a decrease of $1,205,414. The total amount is
available or designated for spending at the government's discretion (unreserved fund balance).
• At the end of the current fiscal year, unreserved fund balance for the general fund was $1,061,756
or 43% of total general fund expenditures.
• The City of St. Joseph's total long-term debt decreased by $2,951,204 during the current fiscal year.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City of St. Joseph's financial
statements. The City of St. Joseph's basic financial statements comprise of three components:
1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial
statements. This report also contains other supplementary information in addition to the basic financial
statements themselves.
Government-Wide Financial Statements. The government-wide financial statements are designed to
provide readers with a broader overview of the City of St. Joseph's finances, in a manner similar to a
private-sector business.
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 assets. 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 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 assets are reported as soon as the underlying
event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues
and expenses are reported in this statement for some items that will only result in cash flows in future
fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City of St. 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 5t. Joseph include general
government, public safety, public works, economic development, and culture and recreation. The
business-type activities of the City of St. Joseph include the water, sanitary sewer, storm water, refuse,
water access and sewer access services.
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CITY OF ST, JOSEPH, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
YEAR ENDED DECEMBER 31, 2008
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Government-Wide Financial Statements (Continued)
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 blended in the financial information.
The government-wide financial statements can be found on pages 17-19 of this report.
Fund Financial Statements, A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The City of 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 two
categories: governmental funds and proprietary 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 government-wide governmental activities.
The City of St. Joseph maintains thirty-four 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 and G.O. improvement debt
service 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 nonmajor
governmental funds is provided in the form of combining statements elsewhere in this report.
The City of St. Joseph adopts an annual appropriated budget for its genera! fund. A budgetary
comparison statement has been provided for the general fund (page 58) to demonstrate compliance
with this budget.
The basic governmental fund financial statements can be found on pages 20-2b of this report.
Proprietary Funds, The City of St. Joseph maintains proprietary funds. Enterprise funds are used to
report the same functions presented as business-type activities in the government-wide financial
statements. The City of St. Joseph uses enterprise funds to account for its water, sanitary sewer, storm
water, refuse, water access and sewer access activities.
Proprietary funds provide the same type of information as the government-wide financial statements,
only in more detail. The proprietary fund financial statements provide separate information for the water,
sanitary sewer, and storm water, all of which are considered to be major funds of the City of St. Joseph.
Data from the other proprietary funds are combined into a single, aggregated presentation. Individual
fund data for each of these nonmajor enterprise funds is provided in the form of combining statements
elsewhere in this report.
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CITY OF ST. JOSEPH, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
YEAR ENDED DECEM~3ER 31, 2008
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Proprietary Funds (Continued)
The basic proprietary fund financial statements can be found on pages 26-30 of this report.
Notes to the Financial Statements. The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements. The notes to
the financial statements can be found on pages 30-57 of this report.
Other Information. The combining statements referred to earlier in connection with nonmajor
governmental and enterprise funds can be found on pages 61-72 and 75-77, respectively, of this report.
Comparative Data. While comparative data is not illustrated in this report, comments throughout this
narrative and overview will discuss significant changes from the prior year.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
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 $34,112,470 at the close of
the most recent fiscal year.
By far, the largest portion of the City of St. Joseph's net assets reflects its investment in capital assets
(e.g., land, buildings, machinery and equipment) net accumulated depreciation, less any related debt
used to acquire those assets that is still outstanding. The City of St. Joseph uses these capital assets to
provide services to citizens; consequently, these assets are not available for future spending. Although
the City of St. Joseph's investment in its capital assets is reported net of related debt, it should be noted
that the resources needed to repay this debt must be provided from other sources, since the capital
assets themselves cannot be used to liquidate these liabilities.
Net Assets
Current and Other Assets
Capital Assets
Total Assets
Current Liabilities
Long-Term Liabilities
Total Liabilities
Net Assets
Invested in Capital Assets
Ne[ of Related Debt
Restricted
Unrestricted
Tda! Net Pssets
Governmental Activities Business-Type Activities Total
2008 2007 2008 2007 2008 2007
$ 13,108.498 $ 15,167,051 5 3.564,798 5 4,977.161 $ 16,673,296 $ 20,144,212
12,902,154 13,408,363 27,218,250 27,786,984 40,120,404 41,195,347
26,010,652 28,575,414 30,783,048 32,764,145 56,793,700 61,339,559
409.021 3,350,393 509.021 638,178 918,042 3,988,571
13,721,896 13,416,384 8.041,292 8,401,046 21,763,188 21,817,430
14,130,917 16.766,777 8,550.313 9,039,224 22,681,230 25,806,001
5,850,722 5.367,809 18,824,249 19,049.984 19,149,771 24;417,793
4,397,259 11.016.026 - - 4,397,259 11,016,026
1,631,754 (4,575,198) 3,408.486 4.674,937 10,565,440 99,739
$ 11,879,735 $ 11,808,637 $ 22,232,735 $ 23,724,921 $ 34,112,470 8 35,533.558
An additional portion of the City of St. Joseph's net assets (13%) represents resources that are subject
to external restrictions on how they may be used. The remaining balance of unrestricted net assets,
$10,565,440, may be used to meet the City's ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City of St. Joseph is able to report positive balances in all three
categories of net assets for the government as a whole, as well as for its separate business-type
activities.
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CITY OF ST. JOSEPH, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
YEAR ENDED DECEMBER 31, 2008
GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)
Net Assets (Continued)
The government-type activities had a deficit in unrestricted net assets for the previous reporting year.
The net asset category restricted and unrestricted show positive balances in the government-type
activities for 2008. The City changed how they reported the net assets available for debt obligations
from restricted to unrestricted net assets based on current GASB standards causing an unrestricted net
assets deficit in the governmental activities for 2007.
There was a 6% decrease in the total net assets for the business-type activities due to the City of St.
Joseph converting to a radio read water meter system, and paying the City of St. Cloud for design costs
associated with the wastewater treatment plant construction and Sauk River lining repair costs.
Governmental Activities. Governmental activities increased the City of St. Joseph's net assets by
$71,098 thereby accounting for 5% of growth in the net assets of the City of St. Joseph. The most
significant change in governments! net assets is due to the large increase in capital assets under
infrastructure along with related deferred special assessments. Under full accrual accounting, current
year infrastructure capital outlay, which was funded during the year, will be expensed over its useful life.
Deferred special assessments will recognize revenue when measurable and available.
Business-type activities. Business-type activities decreased the City of St. Joseph's net assets by
$1,492,186 accounting for 105% of the decrease in the government's net assets. The water, sanitary
sewer and storm water utilities contributed in the decrease in net assets in the proprietary funds. The
largest portion of the net asset decrease in the water utility is a result of the City switching water meters
from a manual reading system to an electronic radio read system. Users were not charged for their new
radio-read meters. The conversion of meters was funded through a combination of past and present
user fees. The efforts will reduce future operational costs for the water utility and increase water use
accountability.
In addition, the sanitary sewer utility also significantly impacted the total net asset decrease. The
sanitary sewer utility partly contributes to the St. Cloud Wastewater Treatment Facility (SCWTF) through
contracted user fees. The SCWTF is in the design phase to rehabilitate, upgrade and expand the
current treatment facility. The City of St. Joseph is responsible for 10.44% of the cost to this project. In
2008, the City of St. Joseph paid for their portion of the engineering design fees.
(~)
CITY OF ST. JOSEPH, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
YEAR ENDED DECEMBER 31, 2008
GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)
Change in Net Assets
Governmental Business-Type
Activities Activities Total
2008 2007 2008 2007 2008 2007
Revenues
Program Revenues
Charges for Services S 482,728 $ 630,589 $ 1,383,766 $ 1.856.022 $ 7,866,494 $ 2.486,611
Operating Grants and Contributions 132,058 194,020 - - 132,058 194,020
Capital Grants and Contributions 515,541 3.063,898 708.704 281,685 624.245 3,345,583
General Revenues
Property Taxes 1,"030,928 1,383,287 - - 1,630,928 1,383,287
Tax Increment 84,975 83,403 - - 84,975 83,403
Sales Tax 251,015 238,149 912 16,359 251,927 254,508
Franchise Fees 72,903 105,371 - - 72,903 105.311
Unrestdcted Stale Aid 828,687 971,311 - - 828.687 971,311
Unrestricted Investment Earnings 331,322 484,595 156,622 241,876 487,944 726.471
Loss on Sale of Capital Assets 11,569 2,041 - - 11,569 2,041
Other General Revenues fi,101 - 55,819 12,823 61,920 12,823
Total Revenues 4,347,827 7,156,604 1,705,823 2.408,765 6,053,650 9,565,369
Expenses
General Government 669,190 fi31,795 - - 669,190 631,795
Public Safety 1,403,672 1,352,891 - - 1,403.672 1,352,891
Pu61ic Works 1,551:049 1,583,321 - - 1,551,049 1,563,321
Culture and Recreation 138,272 241,290 - - 138,272 241,290
Economic Development 301,347 120,852 - - 301,347 120.852
Interest on long-Term Debt 443,174 745,477 - - 443,174 745,477
Water - - 1,441,345 845,148 1,441,345 845,148
Sanitary Sewer - - 943,367 589,352 943,367 589,352
Storm Water - - 1"s4,612 78,091 134,612 78,091
Refuse - - 255,676 270,880 255.678 270.880
Sewer Access - - 193,032 - 193,032 -
Total Expenses 4.506,704 4,675,626 2.968.034 1,783.471 7,474.738 6,459,097
Increase (Decrease)in Net Assets Before Transfers (158,877) 2.48Q978 (1,262,211) 625,294 (1,427.088) 3,106.272
Transfers 229,975 (865,533) (229,975) 865,533 - -
Change in Net Assets 71,G98 1,615:445 (1,492,186) 1,490.827 (1,421,088) 3,106,272
Net Assets-Beginning of Year 11,808,637 10,793,192 23,724,921 22,234,094 35.533,558 32.427.286
Net Assets -End of Year $ 11,879,735 8 17,808,637 $ 22,232,735 $ 23,724,921 $ 34,112,47C $ 35,533,558
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CITY OF ST. JOSEPH, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
YEAR ENDED DECEMBER 31, 2008
GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)
Change in Net Assets (Continued)
1,800,000
1, 600, 000
1, 400, 000
1,200,000
1, 000, 000
800, 000
600, 000
400,000
200,000
REVENUES BY SOURCE -GOVERNMENTAL ACTIVITIES
General Government
EXPENSES AND PROGRAM REVENUES -GOVERNMENTAL
ACTIVITIES
~al Revem
74%
^ Revenues
^ Expenses
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General Public Safety Public Works Economic Culture and Interest or
Government Development Recreation Long-Term
Debt
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CITY OF ST. JOSEPH, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
YEAR ENDED DECEMBER 31, 2008
GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)
Change in Net Assets (Continued)
EXPENSES AND PROGRAM REVENUES -BUSINESS-TYPE
ACTIVITIES
1,600,000
1,400,000
1,200,000
1,000, 000
800,000
600,000
400,000
200, 000
^ Revenues
^ Expenses
~~ __Water
Sanitary Sewer
-- 37%
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V'later Sanitary Storm Refuse Water Sewer
Sewer Water Access Access
REVENUES BY SOURCE -BUSINESS-TYPE ACTIVITIES
Water Access
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CITY OF ST. JOSEPH, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 200$
FINANCIAL ANALYSIS OF THE CITY AT THE FUND LEVEL
The financial performance of the City of St. Joseph as a whole is reflected in its governmental funds as
well. As the City completed the year, its governmental funds reported a combined fund balance of
$7,057,145. Revenues for the City's governmental funds were $5,253,778, while total expenditures
were $6,992,367. The excess of expenditures over revenues is due to significant City investment in the
local infrastructures and the impact of the reduction of Local Government Aid and declining
development revenue which resulted in the City spending down the capital outlay reserved balance.
A summary of financial highlights for each major governmental fund follows.
GENERAL FUND
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 $1,061,756. As a measure of the general fund's
liquidity, it may be useful to compare both unreserved fund balance to total fund expenditures.
Unreserved fund balance represents 43% of total general fund expenditures. Fund balance in the
General Fund decreased by $87,796 in 2008. The decrease was largely due to the decrease in
development revenues and the Governor's unallotment of local government aid (LGA).
General fund expenditures were lower than budgeted by $346,397. To compensate the City for a loss of
state aid, the City Council approved removing the capital expenditure budget for 2008. Capital
expenditures made in 2008 were made against the general capital outlay reserve fund. Further, the
Council decided to not hire a quarter time police officer and community development director as was
budgeted in light of the current economic conditions of not only the local area, but the nation.
The following schedule presents a summary of General Fund Revenues:
Table A-4
General Fund Revenues
Year Ended Change
December3l, December 31, Increase
Fund 2008 2007 (Decrease) Percent
Taxes $ 1,046,124 $ 810,886 $ 235,238 29.0
Sales Tax - 222 (222) (100.0)
Special Assessment 2,802 966 1,836 190.1
Franchise Fees 104,768 105,311 (543) (0.5)
Licenses and Permits 113,911 267,3D5 (153,394) (57.4)
Intergovernmental 894,320 1,025.725 (131,405) (12.8)
Charges for Services 205,431 222,510 (17,079) (7.7)
Fines and Forfeits 68,125 79,837 (11,712) (14.7)
Gilts and Contributions 32,533 - 32,533 100.0
Interest 46,483 66,703 (20,220) (30.3)
Miscellaneous and Other 24,868 38,313 13,445 (35.1)
To±al Genera! Fund Revenue 2,539,365 2,617,778 (78,413) (3.0)
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CITY OF ST. JOSEPH, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2008
GENERAL FUND (CONTINUED)
The following schedule presents a summary of General Fund Expenditures:
Year Ended Change
December 31, December 3l, Increase
2008 2007 (Decrease) Percent
General Government $ 598,890 $ 579,533 $ 19,357 3.3
Public Safety 1,267,601 1,221,600 46,001 3.8
Public Works 391,712 343,321 48,391 14.1
Culture and Recreation 172,288 138,646 33,642 0.2
Capital Outlay 14,102 26,018 (11,916) (45.8)
Total Expenditures $ 2,444,593 $ 2,309,118 $ 135,475 5.9
General Fund Budgetary Highlights
Over the course of the year, the City revised the annual operating budget. Revisions included allocating
funds for new street light Christmas decorations, contracting for an Economic Development Director
versus hiring a full-time Community Development Director and reserving capital outlay budgets.
Historically, the City has minimal budget amendments during the budget year.
• Actual revenues were $236,695 less than expected due to decreases in development fee revenue
and LGA unallotment.
• Actual expenditures were $346,397 less than budget as a result of removing the 2008 capital budget
and not hiring two employees.
G.O. IMPROVEMENT BONDS OF 2002 DEBT SERVICE FUND
This debt service fund is used to pay the debt associated with the 2002 bond issue (2002 Street
Improvements). In 2008, the fund's fund balance decreased by $56,810. The revenue expected to be
received for the 2002 Improvement Bonds includes special assessments. Special assessments are
certified to Stearns County with collections to be received over a set number of years with property tax
payments. Property owners may prepay their special assessments at any time and typically do as
properties change owners. The 2002 bonds did receive several prepayments from property owners;
therefore, current year revenues will be lower than the current year debt payments.
G.O. IMPROVEMENT BONDS OF 2005C DEBT SERVICE FUND
This debt service fund is used to pay the debt relating to the 2005C bond issue (Northland Heights and
transportation studies). The 2008 fund balance of this debt service fund decreased by $26,104 due to
several special assessments being prepaid along with a significant amount of the expected federal
grant reimbursements paid in prior years.
G.O. IMPROVEMENT BONDS OF 2007A DEBT SERVICE FUND
This debt service fund is used to pay the debt payments from the 2007A bond issue (2007 street
improvements). In 2008, the fund balance of this fund decreased $269,658. This debt service fund is
partly funded by developer special assessments. The developer failed to pay the second half portion of
the special assessments due in 2008. The developer is working with the City to establish a finance
mechanism that will keep the assessment current in 2009 and the years to follow.
(12)
CITY OF ST. JOSEPH, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBEP. 31, 2008
PROPRIETARY FUNDS
The City of St. Joseph's proprietary fund statements provide the same type of information found in the
government-wide financial statements, but in more detail. The unrestricted assets of the proprietary
funds increased overall, even though some funds ended the year with lower net assets. The following
paragraphs provide a brief financial overview of each major proprietary fund.
WATER ENTERPRISE FUND
The water fund is used to account for the operations of the City's water utility. In 2008, the water fund's
net assets decreased $507,178 due to the City converting the meter reading system from manual read
water radio read. The meter conversion was funded through water revenue consisting of past and
current user fees.
SANITARY SEWER ENTERPRISE FUND
The sanitary sewer fund is used to account for the operations of the City's sanitary sewer utility. In 2008,
the sanitary sewer fund's net assets decreased $362,023 due to payments made to the City of St. Cloud
for design costs associated with the St. Cloud Wastewater Treatment Facility upgrade, rehabilitation
and expansion. St. Joseph also reimbursed the City of St. Cloud their portion of the repair costs to the
Sauk River interceptors. These costs were paid for with current utility user fees.
STORM WATER ENTERPRISE FUND
The storm water fund is used to account for the operations of the City's storm water utility. In 2008, the
storm water fund's net assets decreased $68,331 mainly due to transfers made to governmental funds
to reimburse the funds for costs relating to storm water.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets. The City of St. Joseph's investment in capital assets for its governmental and
business-type activities as of December 31, 2008, amounts to $19,149,771 (net of accumulated
depreciation). The investment in capital assets includes land, buildings, improvements, machinery and
equipment, furniture and office equipment, infrastructure, 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 utilities. The largest increase of capital assets in the governmental
activities is in the infrastructure and construction in progress for street reconstruction projects and
residential development areas.
Governmental Business-Type
Activities Activities Total
2008 2007 2008 2007 2008 2007
Land S 346,258 S 346,258 $ 2,164,358 $ 377,882 y 2,510,616 S 724,140
Construction in Progress 1,576,464 2,653,281 377,882 10.423,850 1,954,346 13,083,131
Infrastructure 14,280,864 12,883.928 - - 14,280,864 12,883,928
Plant and Lines - - 20,666.814 19,306,694 20,666,814 19,306,694
Buildings 2,466,309 2,402,545 8.149.A71 1,306,704 10 X15,320 3,709,249
Improvements 488,797 497,048 - - 488,797 497,048
Machinery and Equipment 2,609,338 2.352,398 615,147 513.676 3,224,485 2,866,074
Less: Accumulated Depreciation (8,865,876) (7,733,095} (4,754,962) (4,141,822) (13,620,838) (11,874,917)
Total $ 12,902,154 S 13,408,363 $ 27,218,250 $ 27,786,984 $ 40,120.404 5 41,195,347
Additional information on the City of St. Joseph's capital assets can be found in note 3 on pages 44-45
of this report. Total depreciati on expense for 2008 was $1,797,218 (including enterprise funds).
(13)
CITY OF ST. JOSEPH, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2008
CAPITAL ASSETS AND DEBT ADMINISTRATION
Long-Term Debt. At the end of the current fiscal year, the City of St. Joseph had total bonded debt
outstanding of $21,810,264. Of this amount, $12,420,000 comprises debt backed by the full faith and
credit of the government. The remainder of the City of St. Joseph's debt represents bonds secured by
specified revenue sources (i.e., utility revenue bonds). Other long-term debt includes loans, notes and
compensated absences payable.
An illustration of the City's long-term debt is included in the following table.
GOVERNMENTAL ACTIVITIES
General Obligation Bonds
G.O. Special Assessments
Revenue Bonds Payable
Loans Payable
Compensated Absences Payable
Total
BUSINESS-TYPE ACTIVITIES
Revenue Bonds Payable
Loans Payable
Compensated Absences Payable
Total
Percentage
2008 2007 Change
$ 1,025,000 $ 925,000 10.8
11,395,000 13,895,000 (18.0)
1,095,000 1,205,000 (9.1)
28,866 57,447 (49.8)
206,055 218,785 (5.8)
$ 13,749,921 $ 16,301,232 (15.7)
$ 8,294,423 $ 8,605,000 (3.6)%
44,000 132,000 (66.7)
89,157 90,473 (1.5)
$ 8,427,580 $ 8,827,473 (4.5)
The City of St. Joseph issued new bonded debt of $290,000 or 2% of the total debt during the current
fiscal year for general capital outlay expenditures. During 2008, the City issued the following debt:
• $290,000 General Obligation Equipment Certificates to purchase general capital outlay used for
general government, public safety and public works.
The City paid down the bonded debt by $3,155,000 to end the year decreasing the bonded debt by
$2,865,000.
The City of St. Joseph maintained a "BB+" rating from Moody's for general obligation debt in 2008.
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.
Minnesota State Statutes limit the amount of net general obligation debt a governmental entity may
issue to 3% of its taxable market value. Net general obligation debt is debt solely paid for, with limited
exceptions, by ad valorem taxes. The current debt limitation for the City of St. Joseph is $8,199,339
which is significantly in excess of the City of St. Joseph's outstanding pure general obligation debt.
Additional information on the City of St. Joseph's long-term debt can be found in note 3 on pages 46-50.
(14)
CITY OF ST. JOSEPH, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2008
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
In early 2009, the City completed the bond rating process and received an "A" bond rating. Prior to 2009
bond counsel indicated that the City was close to the "A" rating and encouraged the City to rate the
2009 Debt. The rating was completed by Standards and Poor and they cited the following rationale for
the "A" rating:
1. Proximity to St. Cloud which provides a diverse employment base.
2. Continuous property tax base growth.
3. Strong reserves.
The City will continue to monitor financial polices and management practices to not only retain the new
rating, but hopefully increase the rating.
While the housing market for newly constructed homes has significantly declined, the City of St. Joseph
anticipates continued growth in both residential and commercial. The construction of a new community
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 more than 500 homes. The new school opened for the 2008-2009
school year.
The City also anticipates commercial/industrial development with the expansion of the Industrial Park
and planning initiatives for downtown revitalization. The first downtown project began construction in
2006 with completion in 2008. The project consists of a commercial and residential mixed-use facility. In
2008 the City approved a development agreement for the first phase of a CentraCare medical clinic
located on one of the major commerce corridors. The clinic will provide primary care services for all
ages. The first phase will include space for up to seven physicians/primary care givers and is
anticipated to open in the spring of 2009. In early 2009, the Council approved a development agreement
for the Central Minnesota Federal Credit Union to construct a second branch in St. Joseph. The new
branch will be located on the same commerce corridor as the new medical clinic and is expected to be
completed late 2009.
The City is working with a major retailer to construct a large retail facility near the new medical clinic.
The City is hopeful that a development agreement will be executed late 2009 for construction in 2010.
The City Council has also identified an area near Interstate 94 for future commercial development and
will focus on planning the infrastructure expansion and land use during 2009. This area will be adjacent
to the Stearns County project realigning County Road 2 which should be under construction in 2010.
The commerce potential at Intersection and 194 and CR 2 is an opportunity for St. Joseph to diversify
the tax base.
Property tax reforms and budget deficits at the state level have significantly impacted government aid
payments made to the City. Further, the taxable market value increases have slowed down greatly. The
Council continues to budget conservatively to maintain a steady tax rate. As the Nation's recession
continues, the City is monitoring the federal and state legislation with the impacts on the local
government. The City Council has implemented a hiring freeze and for the year 2009 all employees
received a 0% pay increase. In addition, the City removed capital budget line items and restricted the
purchase of capital items.
The City consistently reviews the fee structures for all licenses and permits and services to recover
appropriate costs in lieu of raising property taxes.
(151
CITY OF ST. JOSEPH, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2008
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES (CONTINUED)
The City's rate structure for the utilities is established to help cover not only the operating costs but the
depreciation as well. Water and sanitary sewer is charged from the first gallon used with a separate line
charge to recover current and future capital replacements. This structure began in 2006 to promote
water conservation. The City monitors the rates annually and will eventually cover depreciation fully.
In 2008, the City switched from a manual water meter read system to a radio-read system. It is
anticipated the radio read system will record water consumption at a higher accuracy level resulting in a
higher pumping versus billing ratio. The radio read system will also reduce staff time to read and record
the usage readings. The new system measures the water consumption in gallons versus cubic feet.
The City of St. Joseph is part of the St. Cloud Wastewater System which provides sewer services to the
six area cities. The wastewater system is managed in part by the St. Cloud Area Wastewater Advisory
Committee (SCAWAC) of which each city has representation. SCAWAC has identified the need to
expand the treatment portion of the wastewater system and has been working on the expansion needs
for the past year. The improvements will consist of three phases -design, construction and
rehabilitation with an anticipated total cost of $51,000,000. In 2008, the design phase began. Based on
a joint agreement, St. Joseph's apportionment of the design phase was $296,972, which is
predominately engineering costs associated with the design. During 2008 the Cities began discussing
financing alternatives for the proposed improvement. In anticipation of the needed expansion, the City
has been charging a sewer access fee for all new connections to the wastewater system. These funds
will be used, in part, to fund the expansion. Based on cost estimates, St. Joseph will be responsible for
approximately $5,000,000 for phase two and three.
As part of the Wastewater Treatment System Use Agreement with the City of St. Cloud, each City is
responsible to pay operation, repair and replacement costs for their portion of the St. Cloud Sewer
Interceptor System (SIS). The SIS includes lift stations and sewer mains. In 2008, the City of St. Joseph
paid the City of 5t. Cloud $240,000 to line the sewer infrastructure in the Sauk River. St. Cloud
conducted a study of the SIS in 2008 to determine the condition of the system. Several interceptors
were found to be failing or collapsing. St. Cloud initiated needed emergency repairs. Further, St. Cloud
has been in the design phase to upgrade the Parkwood Lift Station. St. Joseph and Waite Park have
been involved in the planning process since they are both users to the lift station. Construction for the lift
station upgrade is expected to begin in 2009. St. Cloud will issue debt in 2009 to cover the repairs to the
SIS and Parkwood Lift Station. Each area city will be assigned a debt schedule to pay St. Cloud for their
portion of the costs.
All the factors were considered in preparing the City of St. Joseph's budget and fee schedule for the
2009 and future reporting years.
REQUESTS FOR INFORMATION
The financial report is designed to provide a general overview of the City of St. Joseph's finances for all
those with an interest in the City's finances. Questions concerning any of the information provided in this
report or requests for additional financial information should be addressed to the Finance Director, PO
Box 668, 25 College Avenue North, St. Joseph, MN 56374.
(16)
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
CITY OF ST. JOSEPH, MINNESOTA
STATEMENT OF NET ASSETS
DECEMBER 3'I, 2UOS
ASSETS
Cash and Investments (Including Cash Equivalents)
Property Tax Receivable
Accounts Receivable
Notes Receivable
Interest Receivable
Due from Other Governments
Special Assessments Receivable
Delinquent
Deferred
Internal Balances
Deferred Charges
Capital Assets
Land (Non-depreciable)
Construction in Progress (Non-depreciable)
Infrastructure
Buildings
Improvements
Machinery and Equipment
Plant and Lines
Less Accumulated Deprecation
Capital Assets (Net of Accumulated Depreciation)
Total Assets
LIABILITIES
Accounts Payable
Contracts Payable
Due to Other Governments
Salaries and Benefits Payable
Accrued Interest Payable
Bonds Payable -Due Within One Year
Notes Payable - Due W ithin One Year
Compensated Absences Payable -Due Within One Year
Loans Payable -Due Within One Year
Bonds Payable, Net Unamortized Discounts/Premiums -
Due in More Than One Year
Notes Payable -Due in More Than One Year
Compensated Absences Payable -Due in More Than One Year
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt
Restricted for
Debt Service
Other Purposes
Unrestricted
Total Net Assets
See accompanying Notes to Financial Staternents.
Primary Government
Governmental Business-Type
Activities Activities Total
$ 7:126,823 $
73,098
124,897
7,499
15,608
121,834
2,865,072 $ 9,991,895
- 73,098
507,319 632,216
- 7,499
7,381 22,989
- 121,834
293,187
5,194, 838
(26,000)
176,714
523 293,710
13,912 5.208,750
26,000 -
144,591 321,305
346,258 377,882 724,140
1,576,464 2,164,358 3,740,822
14,280,864 - 14,280,864
2.466,309 8,149,011 10,615,320
488,797 - 488,797
2,609,338 615,147 3,224,485
- 20,666,814 20,666,814
(8,865,876) (4,754,962) (13,620,838)
12,902,154 27,218,250 40,12D,404
26,010,652 30,783,048 56,793,700
180,947
92,916
6,215
26,939
42,728
2,390,000
30,410
28,866
29,181 210,128
- 92,916
14,004 20,219
5,090 32,029
30,458 73,186
375,000 2,765,000
44,000 44,000
11,288 41,698
- 28,866
11,125,841 7,919,423 19,045,264
- 44,000 44,000
206,055 77,869 283,924
14,130,917 8,550,313 22,681,230
5.850, 722 18,824,249 19,149, 771
4,358,844 - 4,358,844
38,415 - 38,415
1,631,754 3,408,486 10,565,440
S 11,879,735 $ 22,232,735 $ 34,112,470
(17)
CITY OF ST. JOSEPH, MINNESOTA
STATEMENT OF ACTIVITIES
YEAR ENDED DECEMBER 31, 2008
FunclionslProcrams
PRIMARY GOVERNMENT
GOVERNMENTAL ACTIVITIES
General Government
Public Safety
Public Works
Economic Development
Culture and Recreation
Interest on Long-Term Debt
Total Governmental Activities
BUSINESS-TYPE ACTIVITIES
Water
Sanitary Sewer
Storm Water
Refuse
Water Access
Sewer Access
Total Business-Type Activities
Total Primary Government
See accompanying Notes to Financial Statements.
Program Revenues
Operating Capital
Fees, Charges, Grants and Grants and
Expenses Fines, and Other Contributions Contributions
$ 669,190 $ 99,983 $ 19,825 $ -
1,403,672 359,412 112,233 6,522
1,551,049 15,318 - SD2,022
138,272 - - -
301,347 8,015 - 6,997
443,174 - - -
4,5D6,704 482,728 132,058 515,541
1,441,345 432,622 - 46,414
943,367 515,242 - 40,415
134,612 108,959 - 21,875
255,678 252,319 - -
- 50,232 - -
193,032 24,392 - -
2,968,034 1,383,766 - 108,704
$ 7,474,738 $ 1,866,494 $ 132,058 $ 624,245
GENERAL REVENUES
Property Taxes
Tax Increments
Sales Tax
Franchise Fees
State Aids
Unrestricted Investment Earnings
Other General Revenue
Gain on Sale of Capital Assets
TRANSFERS
Total General Revenues and Transfers
CHANGE IN NET ASSETS
Net Assets -Beginning of Year
NET ASSETS -END OF YEAP.
(18)
Net (Expense) Revenue and
Changes in Net Assets
Governmental Business-Type
Activities Activities Total
$ (549,382) $ - $ (549,382)
(925,505) - (925,505)
(1,033,709) - (1,033,709)
(138,272) - (138,272)
(286,335) - (286,335)
(443.174) - (443,174)
(3,376,377) - (3,376,377)
(962,309) (962,309)
(387,710) (387,710)
- (3,778) (3,778)
- (3,359) (3,359)
50,232 50.232
(168,640) (168.640)
- (1,475,564) (1,475,564)
(3,376,377) (1,475,564) (4,851,941)
1.63D,928 - 1,630,928
84,975 - 84,975
251,D15 912 251,927
72,903 - 72,903
828,687 - 828,687
331,322 156,622 487,944
6,1D1 55,819 61,920
11,569 - 11,569
229,975 (229,975) -
3,447,475 (16,622) 3,430,853
71,os8 (1,asz,las) (1,421,oss)
11,808,637 23,724,921 35,533,558
$ 11,879,735 $ 22,232,735 $ 34,112,470
(19)
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FIJN® FINANCIAL STATEMENTS
CITY OF ST. JOSEPH, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2008
ASSETS
Cash and Investments
Property Tax Receivable -Delinquent
Accounts Receivable
Notes Receivable
Accrued Interest Receivable
Due From Other Governments
Special Assessments Receivable
Deferred
Delinquent
Due from Other Funds
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable
Contracts Payable
Due to Other Governments
Salaries and Benefits Payable
Due to Other Funds
Deferred Revenue
Total Liabilities
FUND BALANCES
Unreserved, Reported in:
General Fund -Designated
General Fund -Undesignated
Special Revenue -Designated
Special Revenue -Undesignated
Debt Service -Designated
Debt Service -Undesignated
Capital Projects -Undesignated
Total Fund Balances
Total Liabilities and Fund Balances
GO Improvement
General Bonds of 2002
(101,105,108) (325)
$ 1,000,267 $ 623,882 $ 564,380
50,145 2,108 2,322
124,897 - -
2,000 - -
2,002 1,342 2,586
27,653 1,019 22,178
3,482 963,853 1,042,087
604 - -
$ 1,211,050 $ 1,592,204 $ 1,633,553
$ 59,909 $ - $ -
6,215 - -
26,939 - -
56,231 965,961 1,044,409
149,294 965,961 1,D44,409
GO
Improvement
Bonds of 2005C
(335)
981,411 - -
80,345 - -
- 626,243 589,144
1,061,756
$ 1,211,050
626,243
$ 1,592,204
589,144
$ 1,633,553
See accompanying Notes to Financial Statements.
(20)
GO Improvement
Bonds of 2007A
(341)
Other Total
Governmental Governmental
Funds Funds
$ 372,037 $ 4,566,257 8 7,126,823
491 18,032 73,098
- - 124,897
5,499 7,499
2,650 7,028 15,608
238 70,746 121,834
1,504,606 1,680,810 5,194,838
182,871 109,712 293,187
- 76,010 76,010
$ 2,062,893 $ 6,534,094 $ 13,033,794
$ - $ 121,038 $ 180,947
- 92,916 92,916
- - 6,215
- - 26.939
- 102,010 102,010
1,687,968 1,813,053 5,567,622
1,687,968 2,129,017 5;976,649
- - 981,411
- - 80,345
- 300 300
- 847,854 847,854
374,925 2;368,914 3,959.226
- (36,107) (36,107)
- 1,224,116 1,224,116
374,925 4,405,077 7,057,145
$ 2,062,893 $ 6,534,094 $ 13,033,794
(21)
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CITY OF ST. JOSEPH, MINNESOTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE
GOVERNMENT-WIDE STATEMEtJT OF NET ASSETS
GOVERNMENTAL ACTIVITIES
DECEMBER 31, 2008
FUND BALANCES -TOTAL GOVERNMENTAL FUNDS
Amounts reported for governmental activities in the statement of net assets are different because:
Capital assets, net of accumulated depreciation, used in governmental activities are
not financial resources and, therefore, are not reported in the governmental funds.
Other long-term assets are not available to pay for current-period expenditures and,
therefore, are deferred in the governmental funds.
Long-term liabilities, including bonds payable, are not due and payable in the current
period and; therefore, are not reported in the governmental funds.
General Obligation Bonds
General Obligation Special Assessment Bonds
General Obligation Revenue Bonds
Loans Payable
Deferred Debt Issue Costs
Compensated Absences Payable
Accrued Interest Payable
NET ASSETS OF GOVERNMENTAL ACTIVITIES
$ 7,057,145
12,902,154
5, 567; 622
$ 1,025,000
11,395,841
1,095,000
28, 866
(176,714)
236, 465
42;728 (13,647,186)
$ 11,879,735
See accompanying Notes to Financial Statements.
(22)
CITY OF ST. JOSEPH, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31, 2008
REVENUES
Property Taxes
Sales Tax
Franchise Fees
Tax Increments
Special Assessments
Licenses, Permits, and Fees
Intergovernmental
Charges for Services
Fines and Forfeits
Gifts and Contributions
Interest on Investments
Miscellaneous
Total Revenues
EXPENDITURES
CURRENT
General Govemment
Public Safety
Public Works
Culture and Recreation
Economic and Community Development
CAPITAL OUTLAY
General Govemment
Public Safety
Public Works
Culture and Recreation
Economic and Community Development
DEBT SERVICE
Principal
Interest and Fiscal Charges
Total Expenditures
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES
OTHER FINANCING SOURCES (USES)
Bonds Issued
Transfers In
Transfers Out
Proceeds from Sale of Capital Assets
Total Other Financing
Sources (Uses)
NET CHANGE IN FUND BALANCES
Fund Balance -Beginning of Year
FUND BALANCE -END OF YEAR
See accompanying Notes to Financial Statements.
GOlmprovement GOlmprovement
General Bonds of 2002 Bonds of 2005C
(101,105,108) (325) (335)
$ 1,046,124 $ 44,654 $ 50,990
104,768 - -
2,802 142,119 673,998
113,911 - -
894,320 3,553 41,620
205,431 - -
68,125 - -
32,533 - -
46,483 28,481 54,888
24,868 - -
2,539,365 218,807 821,496
598,890 - -
1,267,601 - -
391, 712 - -
172,288 - -
2,409 - -
11,693 - -
- 250,000 765,000
- 115,617 82,600
2,444,593 365,617 847,600
94,772 (146,810) (26,104)
24,364 90,000 -
(206,932) - -
(182,568) 90,000 -
(87,796) (56,810) (26,104)
1,149,552 683,053 615,248
$ 1,061,756 $ 626,243 $ 589,144
(23)
GO Improvement Other Total
Bonds of 2007A Governmental Governmental
(341) Funds Funds
$ 13,524 S 461,651 S 1,616,943
- 251,015 251:015
- - 104,768
- 84,975 84,975
212,747 330,123 1,361,789
- - 113,911
34,043 36,894 1,010,430
- 41,824 247,255
- - 68,125
- 20 32,553
56,222 150,072 336,146
- 1,000 25,868
316,536 1,357,574 5,253,778
598,890
- 374 1,267,975
- - 391,712
- 53,131 225,419
- 137,952 137,952
- 49,113 51,522
- 75,352 87,045
- 713,265 713,265
- 60,070 60,070
- 1,600 1.600
505,000 1,308,581 2,828,581
115,269 314,850 628,336
620,269 2,714,288 6,992,367
(303,733) (1,356,714) (1,738,589)
- 290,000 290,000
34,075 616,155 764,594
- (327,687) (534,619)
- 13,200 13,200
34,075 591,668 533,175
(269,658) (765,046) (1,2D5,414)
644,583 5,170,123 8,262,559
374,925 5 11'5 i ? i.GS?,145
(24)
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CITY OF ST. JOSEPH, MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
EUNC 3ALANCES OE GOVERNMENTAL t=UiJDS TO THE
GOVERNMENT-WIDE STATEMENT OF ACTIVITIES -GOVERNMENTAL ACTIVITIES
YEAR ENDED DECEMBER 31, 2008
NET CHANGE IN FUND BALANCES -TOTAL GOVERNMENTAL FUNDS $ (1,205,414)
Amounts reported for governmental activities in the statement of activities are different because:
Governmental funds report capital outlay as expenditures. However. in the statement of activities,
the cost of those assets is allocated over their estimated useful lives and reported as depreciation
expense. Contributions of capital assets (infrastructure) by developers are not shown as income in
the governmental funds because they do not provide current financial resources. Capital asset
transfers from the governmental activities to the business-type activities are not reflected as
expenditures in the governmental fund statements because they do not involve a transfer of current
financial resources.
Expenditures for General Capital Assets, Infrastructure, and
Other Related Capital Assets Adjustments $ 649,106
Capital Asset Disposals and Transfers (1,631)
Current Year Depreciation (1,153,684) (5D6,209)
Revenues in the statement of activities that do not provide current financial resources are not
reported as revenues in the governmental funds. (923,342)
Bond proceeds provide current financial resources to governmental funds, but issuing debt
increases long-term liabilities in the statement of net assets. The net proceeds for debt issuance
are: (29D,000)
Repayment of debt principal is an expenditure in the governmental funds, but the repayment
reduces long-term liabilities in the statement of net assets.
Principal Repayments
General Obligation Bonds 2,800,000
Loans Payable 28,581 2,828,581
Some expenses reported in the statement of activities do not require the use of current financial
resources and, therefore, are not reported as expenditures in governmental funds.
Change In Accrued Interest Payable 9,289
Amortization of Discounts, Premiums. and Deferred Issuance Charges (841)
Deferred Issuance Charges 176,714
Change In Compensated Absences (1?,680) 167,482
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 71,098
See accompanying IJoies to Financial Statements.
(25)
CITY OF ST. JOSEPH, MINNESOTA
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
DECEMBER 31, 2008
Sanitary Other
Water Sewer Storm Water Proprietary
(601) (602) (651) Funds Totals
ASSETS
CURRENT ASSETS
Cash and Investments (Including Cash Equivalents) $ 640,568 $ 564,840 $ 263,517 $ 1,396,147 $ 2,865,072
Receivables
Accounts 101,651 333,771 20,969 172 456,563
Interest 1,616 1,570 637 769 4,592
Special Assessments -Delinquent 163 59 129 50,928 51,279
Special Assessments -Deferred 12,106 383 654 3,558 16,701
Due From Other Funds - - 26,000 - 26,000
Total Current Assets 756,104 900,623 311,906 1,451,574 3,420,207
NONCURRENT ASSETS
Deferred Charges 144,591 - - - 144,591
Non-Depreciable Capital Assets
Land 372,941 4,941 - - 377,882
Construction in Progress 774,703 753,784 635,871 - 2,164,358
Depreciable Capital Assets
Plants and Lines 8,135,922 8,477,709 4,053,183 - 20,666,814
Buildings and Improvements 7,531,028 617,983 - - 8,149,011
Machinery, Vehicles, Furniture and Equipment 177,620 435,576 1,951 - 615,147
Total Capital Assets 16,992,214 10,289,993 4,691,005 - 31,973,212
Less: Accumulated Depreciation (t ,790,738) (2,418,002) (546,222) - (4,754,962}
Net Capital Assets 15,201,476 7,871,991 4,144,783 - 27,218,250
Total Noncurrent Assets 15,346,067 7,871,991 4,144,783 - 27,362,841
Total Assets 16,102,171 8,772,614 4,456,689 1,451,574 30,783,048
LIABILITIES
CURRENT LIABILITIES
Accounts Payable 4,635 6,201 687 17,658 29,181
Due To Other Governments 465 10,369 - 3,170 14,004
Salaries and Benefits Payable 2,314 1,808 418 550 5,090
Accrued Interest Payable 28,580 1,878 - - 30,458
Bonds Payable 350,000 25,000 - - 375,000
Notes Payable 44,000 - - - 44,000
Compensated Absences Payable 4,752 4,753 989 794 11,288
Total Current Liabilities 434,746 50,009 2,094 22,172 509,021
NONCURRENT LIABILITIES
Bonds Payable 7,479,423 - - - 7,479,423
Notes Payable, Net Unamortized Premiums 44,000 440,000 - - 484,000
Compensated Absences Payable 33,347 33,347 3,980 7,195 77,869
Total Noncurrent Liabilities 7,556,770 473,347 3,980 7,195 8,041,292
Total Liabilities 7,991,516 523,356 6,074 29,367 8,550,313
NET ASSETS
Invested in Capital Assets Net of Related Debt 7,272,475 7,406,991 4,144,783 - 18,824,249
Unrestricted 838,180 842,267 305,832 1,422,207 3,408,486
Total Net Assets $ 8,110,655 $ 8,249,258 $ 4,450,615 $ 1,422,207 $ 22,232,735
See accompanying Notes to Financial Statements.
(26)
CITY OF ST. JOSEPH, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
PROPRIETARY FUNDS
YEAR ENDED DECEMBER 31, 2008
OPERATING REVENUES
Charges For Services
OPERATING EXPENSES
Wages and Salaries
Sewer Use Rental
Materials and Supplies
Repairs and Maintenance
Professional Services
Insurance
Utilities
Contracted Services
Depreciation
Equlprnenf
Miscellaneous
Total Operating Expenses
OPERATING INCOME (LOSS)
NONOPERATING REVENUES (EXPENSES)
Sanitary Other
Water Sewer Storm Water Proprietary
(601) (602) (651) Funds
Totals
$ 433:017 $ 515,242 $ 108,959 $ 327,460 $ 1,384,678
180,911 135,221 25.551 40,568 382,251
- 145,854 - - 145,854
429,833 11,281 652 449 442,215
23,466 38,463 17.104 - 79,033
22,307 20,490 7,387 2,238 52,422
12,123 8,492 - - 20,615
69,216 20,747 - - 89,963
- 344,361 - 403,487 747,848
368,484 193,596 81,454 - 643,534
189 190 189 - 568
24,206 1,080 2,275 1,968 29,529
1,130,735 919,775 134,612 448,710 2,633,832
(697,718) (404,533) (25,653) (121,250) {1,249,154)
Investment Income 34,300 33,308 13,518 75,496 156,622
Loss on Disposal of Asset (5,364) - - - (5,364)
Other Income 56,095 379 - - 56,474
Interest Expense (305,246) (23,592] 4 - (328,834)
Total Nonoperating Revenues (Expenses)
NET INCOME (LOSS) BEFORE TRANSFERS
AND CAPITAL CONTRIBUTIONS
Capital Contributions
Transfers In
Transfers Out
CHANGE IN NET ASSETS
Net Assets -Beginning of Year
NET ASSETS - END OF YEAR
(220,215) 10,095 13,522 75,496 (121,102)
(917,933) (394:438) (12,131) (45.754) (1,370,256)
45,755 40,415 21,875 - 108,045
420,000 47,000 - - 467,000
(55,000) (55,000) (78,075) (508,900) (696,975)
(507,178) (362,023) (68,331) (554,654) (1,492;186)
8,617,833 8,611,281 4,518,946 1,976,861 23,724,921
$8,110,655 $8,249,258 $4,450,615 $1,422,207 $22,232,735
See accompanying Notes to Financial Statements.
(27)
CITY OF ST. JOSEPH, MINNESOTA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
YEAR ENDED DECEMBER 31, 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers and Users
Payments to Suppliers
Payments to Employees
Payments to Interfund Services Provided
Net Cash Provided (Used) by Operating Activities
CASH FLOWS FROM NONCAPITAL AND
RELATED FINANCING ACTIVITIES
Other Miscellaneous Receipts
Transfers from Other Funds
Transfers to Other Funds
Net Cash Provided (Used) by Noncapital
and Related Financing Activities
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Principal Paid on Debt
Interest Paid on Debt
Special Assessments
Acquisition of Capital Assets
Net Cash Provided (Used) by Capital
and Related Financing Activities
CASH FLOWS FROM INVESTING
ACTIVITIES
Interest and Dividends Received
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
Cash and Cash Equivalents -Beginning of Year
CASH AND CASH EQUIVALENTS -END OF YEAR
Sanitary Storm Other
Water Sewer Water Proprietary
(601) (602) (651) Funds Total
$ 392,165 S 320,665 $106,880 $ 328,876 $ 1,148,586
(582,271) (590,564) (26,920) (410,600) (1,610,355)
(189,269) (144,034) (20,164) (42,522) (395,989)
- - 26,000 - (26,000)
(379,375) (413,933} 33,796 (124,246) (883,758)
55,436 379 4 - 55,819
420,000 47,000 - - 467,000
(55,000) (55,000) 78,075 (508,900) (696,975)
420,436 (7,621) (78,071) (508,900) (174,156)
(329,577) (25,000) - - (354,577)
(452,092) (23,688) - - (475,780)
(659) - - - (659)
(82,644) (4,047) (706) - (87,397)
(864,972) (52,735) (706)
(918,413)
44,126 38,664 13,783 88,896 185,469
(779,785) (435,625) (31,198) (544,250) (1,790,858)
1,420,353 1,000,465 294,715 1,940,397 4,655,930
$ 640,568 $ 564,840 $263,517 $1,396,147 $ 2,865,072
See accompanying Notes to Financial Statements.
(28)
CITY OF ST. JOSEPH, MINNESOTA
STATEMENT OF CASH FLOWS (CONTINUED)
PROPRIETARY FUPdDS
YEAR ENDED DECEMBER 31, 2008
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
Operating Income (Loss)
Adjustments to Reconcile Operating Income (Loss) to
Net Cash Provided (Used) by Operating:
Activities
Depreciation Expense
(Increase) Decrease in Assets:
Accounts Receivable
Special Assessments Receivable
Due From Other Funds
Due from Other Governments
Increase (Decrease) in Liabilities:
Accounts Payable
Salaries and Benefits Payable
Due to Other Governments
Compensated Absences Payable
Total Adjustments
Net Cash Provided (Used) by Operating Activities
Sanitary Storm Other
Water Sewer Water Proprietary
(601) (602) (651) Funds
Total
NONCASH CAPITAL AND RELATED
FINANCING TRANSACTIONS
Capital Contributions from Developers
See accompanying Notes to Financial Statements.
$ (697,718) $(404,533) $ (25,653) $ (121,250) $(1,249,154)
368,484 193,596 81,454 - 643.534
(40,489) (217,639) (2,515) 724 (259;919)
(1,067) 23,062 436 692 23,123
- - (26,000) - (26,000)
704 - - - 704
976 2,888 687 1,030 5,581
(5,436) (5,892) 418 (1,512) (12,422)
(1,907) (2,494) - (3,488) (7,889)
(2,922) (2,921) 4,969 (442) (1,316)
318,343 (9,400) 59,449 (2,996) 365,396
$ (379,375) $(413,933) $ 33,796 $ (124,246) $ (883,758)
$ 45,755 $ 40,415 $ 21,875 $ - $ 108,045
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CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEh1BER 33, 2003
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of St. Joseph (City), Minnesota is a statutory city governed by an elected mayor and
four council members. The accompanying financial statements present the government
entities for which the City is considered to be financially accountable.
The City's financial statements are prepared in accordance with generally accepted
accounting principles (GAAP). The United States Governmental Accounting Standards
Board (GASB) is responsible for establishing GAAP for state and local governments through
its pronouncements (statements and interpretations). Governments are also required to
follow the pronouncements of the Financial Accounting Standards Board (FASB) issued
through November 30, 1989, (when applicable) that do not conflict with or contradict GASB
pronouncements. Although the City has the option to apply FASB pronouncements issued
after that date to its business-type activities and enterprise funds, the City has chosen not to
do so. The more significant accounting policies established in GAAP and used by the City
are discussed below.
A. Financial Reporting Entity
The financial reporting entity consists of the City (primary government) and the
component unit (legally separate organization) for which the Primary Government is
financially accountable. There is financial accountability if the Primary Government
appoints a voting majority of an organization's governing body and has the ability to
impose its will on that governing body; or there is the potential for the organization to
provide specific financial benefits or to impose specific financial burdens on the Primary
Government. In conformity with generally accepted accounting principles, the financial
statements of the City's component unit are included in the financial reporting entity as a
blended component unit.
Blended Component Unit
The St. Joseph Economic Development Authority (EDA) 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 governed by a five
member board appointed by the City Council. The St. Joseph EDA is included as
blended component unit of the City because the St. Joseph EDA is financially
accountable to the City and the St. Joseph EDA provides services almost entirely for the
City. The 5t. Joseph EDA is presented as the Economic Development Authority Special
Revenue Fund, the City Hall G.O. EDA Refunding Bonds of 2005A Debt Service Fund
and the Maintenance Facility G.O. EDA Refunding Bonds of 2003A. Separate financial
statements are not prepared for the St. Joseph Economic Development Authority.
(3U)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 200$
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. Basic Financial Statements
1. Government-Wide Statements
The government-wide financial statements (i.e., the statement of net assets and the
statement of activities} report information about the Primary Government and its
component unit. These statements include the financial activities of the overall City
government. Eliminations have been made to minimize the double-counting of
internal activities. 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 to external parties for support.
Likewise, the Primary Government is reported separately from certain legally
separate component units for which the Primary Government is financially
accountable.
In the government-wide statement of net assets, both the governmental and
business-type activities columns: (a) are presented on a consolidated basis by
column; and (b) are reported on a full accrual, economic resource basis, which
recognizes all long-term assets and receivables as well as long-term debt and
obligations. The City's net assets are reported in three parts: (1) invested in capital
assets, net of related debt; (2) restricted net assets; and (3) unrestricted net assets.
The City first utilizes restricted resources to finance qualifying activities.
The statement of activities demonstrates the degree to which the direct expenses of
each function of the City's governmental activities and different business-type activity
are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or activity. Interest on general long-term debt is
considered an indirect expense and is reported separately on the Statement of
Activities. Program revenues include: (1) fees, fines, and charges paid by the
recipients of goods, services, or privileges provided by a given function or activity;
and (2) grants and contributions that are restricted to meeting the operational or
capital requirements of a particular function or activity. Revenues that are not
classified as program revenues, including all taxes, are presented as general
revenues. Internally dedicated revenues are reported as general revenues rather
than program revenues.
2. Fund Financial Statements
The fund financial statements provide information about the City's funds. Separate
statements for each fund category-governmental and proprietary are presented.
The emphasis of governmental and proprietary fund financial statements is on major
individual governmental and enterprise funds, with each displayed as separate
columns in the fund financial statements. All remaining governmental and enterprise
funds are aggregated and reported as nonmajor funds.
(31)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
9ECE1'n1BER 31, 20tt°
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. Basic Financial Statements (Continued)
2. Fund Financial Statements (Continued)
Proprietary fund operating revenues, such as charges for services, result from
exchange transactions associated with the principal activity of the fund. Exchange
transactions are those in which each party receives and gives up essentially equal
values. Nonoperating revenues, such as subsidies and investment earnings, result
from nonexchange transactions or incidental activities.
The City reports the following major governmental funds:
General Fund -The general fund is the general operating fund of the City. It accounts
for all the financial resources of the general government, except those required to be
accounted for in another fund.
G.O. Improvement Bonds of 2002 Debt Service Fund -This Fund accounts for the
resources accumulated and payments made for principal and interest on this bond
issue.
G.O. Improvement Bonds of 2005C Debt Service Fund -This Fund accounts for the
resources accumulated and payments made for principal and interest on this bond
issue.
G.O. Improvement Bonds of 2007A -This Fund accounts for the resources
accumulated and payments made for principal and interest on this bond issue
The City reports the following major proprietary funds:
Water Fund -The water fund accounts for the activities of the City s water utility.
_Sanitarv Sewer Fund -The sewer fund accounts for the activities of the City's
sanitary sewer utility.
Storm Water Fund -The storm water fund accounts for the activities of the City's
storm water utility.
C. Measurement Focus and Basis of Accounting
The government-wide and proprietary fund financial statements are reported using the
economic resources measurement focus and the accrual basis of accounting. 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.
(32)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Measurement Focus and Basis of Accounting (Continued)
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. The City considers
all revenues to be available if they are collected within 90 days after the end of the
current period. 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
recognized as revenues in the current fiscal period. Only the portion of special
assessments receivable due within the current fiscal period is considered to be
susceptible to accrual as revenue of the current period. All other revenue items are
considered to be measurable and available only when cash is received by the
government.
Expenditures are recorded when the related fund liability is incurred, except for principal
and interest on general long-term debt, and compensated absences, which are
recognized as expenditures to the extent That they have matured. Proceeds of general
long-term debt and acquisitions under capital leases are reported as other financing
sources.
When both restricted and unrestricted resources are avaiiable for use, it is the City's
policy to use restricted resources first, then unrestricted resources as they are needed.
As a general rule, the effect of interfund activity has been eliminated from the
government-wide financial statements. Exceptions to this general rule are payments-in-
lieu of taxes other charges between the various functions of the City. Elimination of these
charges would distort the direct costs and program revenues reported for the various
functions concerned.
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 revenue of the City's enterprise funds are charges to
customers for sales of goods 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.
(33)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 20013
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Assets; Liabilities, and Net Assets or Equity
1. Cash and Investments (Including Cash Equivalents)
Cash balances are invested to the extent available in various securities as authorized
by Minnesota Statutes. Investment earnings are allocated to the respective funds on
the basis of applicable cash balance participation by each fund. Investments are
stated at fair value.
For the purposes of the statement of cash flows of the proprietary fund, cash
equivalents are considered to be cash on hand, deposits and highly liquid debt
investments purchased with original maturities of three months or less from the date
of acquisition.
The City considers all cash and investments under the classifications current assets
and restricted assets, if any, to be cash and cash equivalents, except those held with
fiscal agents. Cash and cash equivalents consist of checking and saving certificate
accounts, cash on hand, and money market savings accounts.
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 authorize the City to invest in obligations of the U.S. Treasury,
agencies and instrumentalities, shares of investment companies whose only
investments are in the aforementioned securities, obligations of the State of
Minnesota or its municipalities, bankers' acceptances future contracts, repurchase
and reverse repurchase agreements and commercial paper of the highest quality with
a maturity of no longer than 270 days 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 City has an
investment policy in place to address custodial credit risk for deposits, stating that
they will obtain collateral or bonds for all uninsured amounts on deposit. All deposits
shall be covered by FDIC, NCUA or collateralized at 110%.
Concentration of Credit Risk: Investments should be diversified to avoid incurring
unreasonable risks inherent in over investing in specific instruments, individual
financial institutions or maturities. The City's investment policy states the City will
attempt to diversify its investments according to type, issuer, and maturity. The
portfolio, as much as possible, will contain both short-term and long-term
investments. The City will attempt to match its investments with anticipated cash flow
requirements. Extended maturities may be utilized to take advantage of higher yields.
No more than 20% of the total investments should extend beyond five years and the
weighted average maturity of the portfolio shall never exceed five years.
(34)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Assets, Liabilities, and Net Assets or Equity
2. Cash and Investments (Including Cash Equivalents)
Credit Risk: Credit risk is the risk that an issuer or other counterparty to an
investment will not fulfill its obligations. Minnesota Statutes §§11 SA and 118A.05 limit
investments that are in the top two ratings issued by nationally recognized statistical
rating organizations. The City's investment policy limits the allowable investments in
accordance with these Statutes.
Interest Rate Risk -The City should try to minimize the risk that arises from over
investing in specific instruments, individual financial institutions or maturities. The
City's investment policy states the investment portfolio will be structured so that
securities mature to meet cash flow requirements and avoiding the need to sell
securities prior to maturity, investing in short-term securities, investing in long-term
securities if the market rate is favorable.
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 addresses this risk and states that the City will permit
investments only to the extent that there is SIPC and excess SIPC coverage
available.
3. Short-Term Interfund ReceivableslPayables
During the course of operations, numerous transactions occur between individual
funds for goods provided or services rendered. These receivables and payables are
classified as "due from other funds" or "due to other funds" on the fund financial
statements. Any residual balances outstanding between the governmental activities
and business-type activities are reported in the government-wide financial statements
as internal balances.
4. Accounts Receivable
No substantial losses are anticipated from present receivable balances. Therefore,
no allowance for uncollectible accounts is deemed necessary. Write-offs are done cn
a case-by-case basis.
(35)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECE!?nRER 31, 2f308
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Assets, Liabilities, and Net Assets or Equity (Continued)
5. Special Assessments
Special assessments are levied against the benefited properties for the assessable
costs of improvement projects in accordance with Minnesota Statutes. Assessments
are collectible over a term of years at an interest rate established by the City Council
upon adoption of each assessment roll. Any annual installments remaining unpaid as
of November 30th of each year are certified to the County for collection with property
taxes during the following year. Special assessments receivable -delinquent
represents the past six years of uncollected special assessments. Property owners
are allowed to prepay future installments without interest or prepayment penalties.
In the governmental fund financial statements, special assessment levies are
recorded as a receivable and as deferred revenue at the time of the levy. Deferred
revenue is recognized as current revenue as the annual assessment installments
become measurable and available. Interest on special assessments is also
recognized when it becomes measurable and available.
6. Prepaid Items
Payments made to vendors for services that will benefit future periods are recorded
as prepaid items. The portion of the relevant funds' fund balance equal to the prepaid
items is reserved if the amounts are considered to be material, and if sufficient fund
balance exists.
7. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets
(e.g., roads, bridges, sidewalks, and similar items), reported in the applicable
governmental or business-type activities columns in the government-wide financial
statements. Capital assets are defined by the government as assets with an initial,
individual cost of more than $1,000 and an estimated useful life in excess of three
years. Such assets are recorded at historical cost or estimated historical cost if
purchased or constructed. Donated capital assets are recorded at estimated fair
market value at the date of donation.
(36)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Assets, Liabilities, and Net Assets or Equity (Continued)
7. Capital Assets (Continued)
The costs of normal maintenance and repairs that do not add to the value of the
asset or materially extend assets lives are not capitalized. Major outlays for capital
assets and improvements are capitalized as projects are constructed. Interest
incurred during the construction phase of capital assets of business-type activities is
included as part of the capitalized value of the assets constructed.
Capital assets of the Primary Government, except land and construction in progress,
are depreciated using the straight line method over the following estimated useful
lives:
Assets
Land Improvements
Buildings
Park Buildings
Building Improvements
Street Construction
Street Overlay
Furniture and Fixtures
Light Vehicles
Machinery and Equipment
Fire Trucks
Utility Distribution System
Years
5-20
40
30
15
15
10
5-10
5
3-7
20
50
Land and construction in progress are not depreciable capital assets.
8. Compensated Absences
Compensated absences include accumulated vacation, vested sick leave,
accumulated holiday time and compensatory time. All full-time employees of the City
are entitled to annual vacation and sick leave with pay. Employees can accrue up to
200 hours of vacation depending on years of service. The maximum amount of
vacation carryover from year-to-year is 100 hours. in addition, employees are
compensated for unused sick leave (up to a maximum of 720 hours) at various rates
depending on the employee type, provided the City's notice of termination policy has
been complied with. Employees are allowed to accrue holiday hours that are paid out
in May and December each year. The maximum amount of compensatory time an
employee can accrue and carryover is 40 hours.
Sick leave payments are reported as expenditures for governmental fund types when
the payments are made to employees. Appropriations lapse at year-end and
accordingly, there are no available expendable financial resources. Because of this,
the estimated commitment for sick leave (compensated absences} for governmental
funds is reported in the statement of net assets.
(37)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
tOECEMI?ER 31, 2008
NOTE 1 SUMMARY OF 51GNIFICANT ACCOUNTING POLICIES (CONTINUE®)
D. Assets, Liabilities, and Net Assets or Equity (Continued)
8. Compensated Absences (Continued)
In the City s proprietary funds, amounts earned but unused for vacation leave and
that portion of earned but unused sick leave estimated to be payable upon retirement
are reflected under the accrual basis of accounting.
9. Long-Term Obligations
In the government-wide financial statements, and proprietary fund types in the fund
financial statements, long-term debt and other long-term obligations are reported as
liabilities in the applicable governmental activities, business-type activities, or
proprietary fund type statement of net assets. Bond premiums and discounts, as well
as issuance costs, are deferred and amortized over the life of the bonds using the
bond interest rate method. Bonds payable are reported net of the applicable bond
premium or discount. Bond issuance costs are reported as deferred charges and
amortized over the term of the related debt.
In the fund financial statements, governmental fund types recognize bond premiums
and discounts, as well as bond issuance costs, during the current period. The face
amount of debt issued is reported as other financing sources. Premiums received on
debt issuances are reported as other financing sources while discounts on debt
issuances are reported as other financing uses. Issuance costs, whether or not
withheld from the actual debt proceeds received, are reported as debt service
expenditures.
10. Fund Balance
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.
11. 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.
A reclassification of $5,525,200 was made between this net asset class and
unrestricted net assets in the total column on the Statement of Net Assets to
recognize the portion of debt attributable to capital assets donated from
governmental activities to business-type activities.
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. At December 31,
2008, $4,397,259 is restricted for debt service and other purposes as required by
creditors and iavds.
(38)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E. Revenues, Expenditures, and Expenses
Revenues
In the fund financial statements, property taxes are recognized to the extent they are
collected and received in the current period or within 60 days after year-end. Portions
paid by the State in the form of market value credit aid, and other state tax credits are
included in intergovernmental revenues. Delinquent property taxes receivable which
have not been recognized as revenue are equally offset in the financial statements by
deferred revenues.
Licenses and permits, charges for services, fines, forfeits, and miscellaneous
revenues are recorded as revenues measurable and available.
Special assessments principal and interest earnings are recorded as revenues in the
same manner as property taxes.
Property Tax Collection Calendar
The City levies its property taxes for the subsequent year during the monfh of
December. In Minnesota, the lien date and assessment date is January 2. The
property tax is recorded as revenue when it becomes available. Stearns County is the
collecting agency for the levy and then remits the collections to the City. All taxes not
collected as of December 31 are shown as delinquent taxes receivable.
The County Auditor prepares the tax list for all taxable property in the City, applying
the applicable tax capacity rate to the tax capacity value of individual properties, to
arrive at the actual tax for each property. The County Auditor also collects all special
assessments, except for certain payments paid directly to the City.
The County Auditor provides a list of taxes and special assessments to be collected
on each parcel of property to the County Treasurer in January of each year. Property
owners are required to pay one-half of their real estate taxes by May 15 and the
balances by October 15.
Within 30 days after the May settlement, the County Treasurer is required to pay 70
percent of the estimated collections of taxes and special assessments to the City
Treasurer. The County Treasurer must pay the balance to the City Treasurer within
60 days after the settlement, provided that after 45 days interest begins to accrue
(39)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 200°
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUE®)
E. Revenues, Expenditures, and Expenses (Continued)
1. Revenues (Continued)
Property Tax Collection Calendar (Continued)
Current year property tax revenue represent the tax levy certified to the County
Auditor in December of 2007 which was collected during the year ended December
31, 2008. Any adjustments or abatements to either the current, or any prior year, levy
are adjusted through the current year general property tax revenues. Property taxes
not collected by the County and remitted to the City within 60 days of year end are
classified as delinquent and not considered measurable and available and are fully
offset by deferred revenue in the governmental fund financial statements. Delinquent
taxes receivable represent the past six years of uncollected tax years. No allowance
for uncollectible taxes has been provided because such amounts are not expected to
be material.
Within ten business days after November 15, the County Treasurer shall pay to each
taxing district, except any school district, 100 percent of the estimated collections
arising from taxes levied by and belonging to each taxing district from May 20 to
November 20.
2. Expenditures
Expenditure recognition for governmental fund types includes only amounts
represented by current liabilities. Since noncurrent liabilities do not affect net current
assets, they are not recognized as governmental fund expenditures or liabilities. They
are reported as liabilities on the statement of net assets.
3. Expenses
Proprietary funds recognize expenses, including long-term debt and compensated
absences, when they are incurred.
F. 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.
(40)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008
NOTE 2
NOTE 3
STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Deficit Fund Balance
The following funds had deficit fund balances as of December 31, 2008:
These deficits will be eliminated with future revenues or transfers from other funds.
Nonmajor Governmental Funds:
Special Revenue Funds:
Lake Wobegon Trail $ (9,987)
City Beautification (48,941)
Debt Service Funds:
City Hall GO EDA Refunding Bonds of 2005A (10,976)
GO Improvement Bonds of 2003D (25,131)
DETAILED NOTES ON ALL FUNDS
A. Assets
1. Deposits and Investments
As of December 31, 2008, the City's deposits had a carrying value as shown below:
Deposit Type Balance
Certificates of Deposits $ 5,522,464
Checking 84,625
Savings 2,878,823
Total $ 8,485,912
As of December 31, 2008, the City's investment balances were as follows
Weighted Standard &
Average Poor's
Investment Type Balance Maturity (Years) Rating
Broker Certificate of Deposit $ 1,454,596 3.22 NJA
Brokered Money Market 51,112 N/A N!A
Total $ 1,505,708
Interest Rate Risk
As of December 31, 2008, the City held $197,552 in negotiable certificates of
deposits with maturities of less than one year and $399,117 with maturities between
one and two years, and $857,927 with maturities greater than two years.
(4t)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DcCE7rioEe"~ 3i, 200fi
NOTE 3 DETAILED NOTES ON ALL FUNDS (CONTINUED)
A. Assets (Continued)
1. Deposits and Investments (Continued)
Credit Risk
Minnesota Statutes restrict the types of investments in which the City may invest. The
City's investment policy identifies ten different acceptable investment types and the
minimum requirements of each one.
1. U.S. Treasury obligations which carry the full faith and credit guarantee of the
United States government and are considered to be the most secure instruments
available;
2. U.S. government agency and instrumentality obligations that have a liquid market
with a readily determinable market value (excluding high-risk mortgage-backed
securities;
3. Certificates of deposit and other evidences of deposit at financial institutions;
4. CDARS;
5. Bankers' acceptances:
6. Commercial paper, rated in the highest tier by a nationally recognized rating
agency;
7. Investment-grade obligations of state, provincial and local governments and
public authorities;
8. Repurchase agreements who underling purchased securities consist of the
aforementioned instruments;
9. Money market mutual funds regulated by the Securities and Exchanges
Commission and whose portfolios consist only of dollar-denominated securities;
10. Local government investment pools either state-administered or developed
through joint powers statutes and other intergovernmental agreement legislation.
City investments must he in compliance ~niith state and local law.
Concentration Credit Risk
As of December 31, 2008, the City's investments in brokered certificates of deposits
(97%) exceeded 5% of the City's total investment portfolio.
lag)
CITY OF ST, JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER ss"1, 2008
NOTE 3
DETAILED NOTES ON ALL FUNDS (CONTINUED)
A. Assets (Continued)
1. Deposits and Investments (Continued)
Minnesota Statutes require that all deposits be protected by insurance, surety bond,
or collateral. The market value of collateral pledge must equal 110% of the deposits
not covered by insurance or corporate surety bonds.
Authorized collateral includes: U.S. government treasury bills, notes, or bonds; issues
of a U.S. government agency; general obligations of a state or local government
rated "A" or better; revenue obligations of a state or iota! government rated "AA" or
better; irrevocable standby letters of credit issue by a Federal Home Loan Bank; and
time deposits insured by a federal agency. Minnesota Sfatufes require securities
pledged as collateral he held in safekeeping in a restricted account at the Federal
Reserve Bank or at an account at a trust department of a commercial bank or other
financial institution not owned or contrclled by the depository.
As of December 31, 2008, all City deposits were covered by insurance or collateral.
The following is a summary of deposits and investments as of December 31, 2008:
Type
Deposits
Investments
Petty Cash
Total
Balance
$ 8,485,912
1, 505, 708
275
$ 9,991,895
Deposits and investments are presented at fair value in the December 31, 2008
Basic Financial Statements as follows:
Statement of Net Assets:
Cash and Investments (including Cash Equivalents) $9,991,895
(43)
CITI( OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 3i, 2008
NOTE 3 DETAILED NOTES ON ALL FUNDS (CONTINUED)
A. Assets (Continued)
2. Capital Assets
Capital asset activity for the City for the year ended December 31, 2008, is as follows:
GOVERNMENTAL ACTIVITIES
Capital Assets not being Depreciated
Land
Construction in Progress
Total Capital Assets not being Depreciated
Capital Assets being Depreciated
Improvements
Buildings
Infrastructure
Machinery and Equipment
Total Capital Assets being Depreciated
Less: Accumulated Depreciation for
Beginning
Balance Additions Disposals Ending Balance
$ 346,258 $ - $ - $ 346,258
2,659,281 248,825 1,331,642 1,576,464
3,005,539 248,825 1,331,642 1,922,722
497,048 - 8,251 488,797
2,402,545 63,764 - 2,466,309
12,883,928 1,396,936 - 14,280,864
2,352,398 271,223 14,283 2,609,338
18,135,919 1,731,923 22,534 19,845,308
Improvements 225,966 28,703 8,251 246,418
Buildings 558,869 67,175 - 626,044
Infrastructure 5,503,067 841,947 - 6,345,014
Machinery and Equipment 1,445,193 215,859 12,652 1,648,400
Total Accumulated Depreciation 7,733,095 1,153,684 20,903 8,865,876
Total Capital Assets being Depreciated, Net 10,402,824 578,239 1,631 10,979,432
Governmental Activities Capital Assets, Net $ 13,408,363 $ 827,064 $ 1,333,273 $ 12,902,154
(44)
CITY OF ST. JOSEPH9 MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMEER 3.1, 2008.
NOTE 3 DETAILED NOTES ON ALL FUNDS (CONTINUED).
A. Assets (Continued)
2. Capital Assets (Continued)
The following is a summary of the proprietary fund capital assets at December 31, 2008:
Beginning
Balance Additions
Disposals Ending Balance
BUSINESS-TYPE ACTIVITIES
Capital Assets not being Depreciated
Land
Construction in Progress
Total Capital Assets not being Depreciated
Capital Assets being Depreciated
Buildings
Plant and Lines
Machinery and Equipment
Total Capital Assets being Depreciated
Less: Accumulated Depreciation for
Buildings
Plant and Lines
Machinery and Equipment
Total Accumulated Depreciation
Total Capital Assets being Depreciated, Net
$ 377,882 $ - $ - $ 377,882
10,423,850 62,942 8,322,434 2,164,358
10,801,732 62,942 8,322,434 2,542,240
1,306,704 6,842,307 - 8,149,011
19,306,694 1,395,878 35,758 20,666,814
513,676 101,471 - 615,147
21,127,074 8,339,656 35,758 29,430,972
778,321 186,261 - 964,582
3,147,265 412,501 30,394 3,529,372
216,236 44,772 - 261,008
4,141,822 643,534 30,394 4,754,962
16,985,252 7,696,122 5,364 24,676,010
Business-Type Activities Capital Assets, Nek
$ 27,786,984 $ 7,759,064 $ 8,327,798 $ 27,218,250
Depreciation expense was charged to functions/programs of the Primary Government as follows:
Governmental Activities
General Government $ 51,650
Public Safety 101,832
Public Works 932,219
Culture and Recreation 67,663
Economic Geveiopment 320
Total Depreciation Expense -Governmental Activities $ 1,153,684
Business-Type Activities
Water $ 368,484
Sanitary Sewer 193,596
Storm Sewer 81,454
Total Depreciation Expense -Business-Type Activities $ 643,534
(45)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 200
NOTE 3 DETAILED NOTES ON ALL FUNDS (CONTINUED)
B. Interfund Receivables, Payables, and Transfers
1. Due to/from Other Funds
Receivable Fund Payable Fund Amount Purpose
Other Governmental Funds Other Governmental Funds $ 76,010 Res olve Deficit Cash Balances
Storm Water Fund Other Governmental Funds 26,000 Resolve Deficit Cash Balances
Total $ 102,010
2. Interfund Transfers
Transfers In
G.O.
G.O. Improvement Other
Improvement Bonds of Governmental Sanitary
General Bonds of 2002 2007A Funds Water Sewer Total
Transfers Out:
Governmental Funds
General Fund $ - $ - $ - $ 206,932 $ - $ - $ 206,932
Other Governmental 10,364 - - 317,323 - - 327,687
Proprietary Funds
Water - 45,000 - 10,000 - - 55,000
Sewer - 45,000 - 10,000 - - 55,000
Storm Water 14,000 - 34,075 30,000 - - 78,075
Other Proprietary Funds - - - 41,900 420,000 47,000 508,900
Total Transfers $ 24,364 $ 90,000 $ 34,075 $ 616,155 $ 420,000 $ 47,000 $1,231,594
Transfers are used to move revenues from the fund with collection authorization to
the debt service fund as the debt service principal and interest payments become
due, move unrestricted general fund revenues to finance various programs that the
City must account for in other funds in accordance with regulatory and budgetary
authorizations, move residual equity to corresponding funds related to the funds
closed, and move unrestricted storm water funds to finance various programs that the
City accounts for in other funds in accordance with budgetary authorizations.
C. Liabilities
1. Long-Term Debt
General Obligation Bonds
The City issues genera{ obligation bonds to provide funds for the acquisition and
construction of major capital facilities including infrastructure. General obligation
bonds have been issued for both general government and proprietary activities.
Bonds issued to provide funds for proprietary activities are reported in proprietary
funds if they are expected to be °repaid from proprietary revenues.
(46)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 3~, 2013
NOTE 3 DETAILED NOTES ON ALL FUNDS (CONTINUED)
C. Liabilities (Continued)
1. Long-Term Debt (Continued)
General Obligation Bonds (Continued)
General obligation bonds are direct obligations and pledge the full faith and credit of
the City. Assets of the debt service fund, together with scheduled future ad valorem
tax levies, federal grants and special assessments, are dedicated for the retirement
of these bonds.
2. Components of Long-Term Debt
GOVERNMENTAL ACTIVITIES
General Obligation Bonds, Including Refunding Bonds:
General Obligation Refunding Bonds of 20036; 1.5 to
4.4%, Issued 07/28/03; Final Maturity 12/01/17.
General Obligation Certificates of Indebtedness of
20068; 3.4 to 3.6% Issued 02/22/06; Final Maturity
12/01/10.
General Obligation Certificates of indebtedness of
2008A; 3.1 to 3.5% Issued 04/03/08; Final Maturity
12/01 /13.
Total General Obligation Bonds
General Obligation Special Assessment Bonds:
General Obligation Improvement Bonds of 2002; 2.0 to
4.3%, Issued 08/01/02; Final Maturity 12/01/17.
General Obligation Improvement Crossover Refunding
Bonds of 2003C; 1.25 to 3.15%, Issued 07/28/03; Final
Maturity 12/01/11.
General Obligation Improvement Bonds of 2004A; 2,15 to
3.6%, Issued 07/29/04; Final Maturity 12/01/09.
General Obligation Improvement Bonds of 2005B; 2.5 to
4.4%, Issued 03101/05; Final Maturity 12/01/20.
General Obligation Improvement Bonds of 2005C; 3.5%,
Issued 09101/05; Final Maturity 12/01110.
General Obligation Improvement Bonds of 2006C; 4 to
4.25%, Issued 06/13/06; Final Maturity 12/01/13.
General Obligation Improvement Bonds of 2007A; 4 to
4.13%, Issued 06/01/07; Final Maturity 12/01/17.
General Obligation improvement Crossover Refunding
Bonds of 20076; 3.6 to 3.9%, Issued 11/14/07; Final
Maturity 12/01/14.
Total General Obligation Special Assessment Bonds
Add: Unamortized Premium
Less: Unamortized Discount
Total General Obligation Special Assessment Bonds, Net
Original Principal Due Within
Issue Outstanding One Year
$ 815,000 $ 605,000 $ 60,000
250,000 130,000 65,000
290,000 290,000 55,000
1,025,000 180,000
4,700,000 2,760,000 260,000
750,000 180,000 55,000
590, 000 125, 000 125, 000
1,655,000 1,380,000 95,000
3, i0u"",000 1,595,000 785,OOu
2,375,000 2,130,000 130,000
2,875,000 2,370,000 505,000
980,000 855,000 140,000
11,395,000 2,095,000
33,068 -
(32,227) -
11,395,841 2,095,000
(47)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, ~a~~
NOTE 3 ®ETAILE® NOTES ON ALL FUN®S (CONTINUE®)
C. Liabilities (Continued)
2. Components of Long-Term Debt (Continued)
GOVERNMENTAL ACTIVITIES (Continued)
Revenue Bonds:
General Obligation EDA Public Revenue Bonds of
2003A; 2.0 to 4.9%, Issued 04/01/03; Final Maturity
12/01118.
General Obligation EDA Public Revenue Bonds of
2005A; 2.75 to 4.15%, Issued 03/01/05; Final Maturity
12/01 / 15.
Total Revenue Bonds
Loan Payable
Compensated Absences
Total Governmental Activities Long-Term Liabilities
BUSINESS-TYPE ACTIVITIES
General Obligation Revenue Bonds
General Obligation Sewer Revenue Bonds of 2001; 3.3
to 5.15°l°, Issued 10/01101; Final Maturity 12/01/21.
General Obligation Water Revenue Refunding Bonds of
2002; 1.75 to 4.8%, Issued 09101/02; Final Maturity
12/01 /16.
General Obligation Water Revenue Bonds of 20056; 4.0
to 4.25%, Issued 12/01/05; Final Maturity 12101/28.
General Obligation Water Revenue Bonds of 2006A; 3.5
to 4.0°l0, Issued 01!12!06; Final Maturity 12/01116.
Total General Obligation Revenue Bonds
Add: Unamortized Premium
Total General Obligation Revenue Bonds, Net
Notes Payable
Compensated Absences
Total Business-Type Activities
Total Long-Term Liabilities
Original Principal Due Within
Issue Outstanding One Year
$ 700,000 $ 520,000 $ 40,000
645,000 575,000 75,000
1,095,000 115,000
28,866 28,866
236,465 30,410
13,781,172 2,449,276
$ 640,000 $ 465,000 $ 25,000
810,000 455,000 50,000
4,595,000 4,595,000 -
3,575,000 2,735,000 300,000
8,250,000 375,000
44,423
8,294,423 375,000
88,000 44,000
89,157 11,288
8,471,580 430,288
$ 22,252,752 $ 2,879,564
(48)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, ~00~
NOTE 3 DETAILED NOTES ON ALL FUNDS (CONTINUED)
C. Liabiiities (Continued)
3. Changes in Long-Term Debt
December 31, December 31, Due Within
2007 Additions Retirements 2008 One Year
GOVERNMENTAL ACTIVITIES
Bonds Payable:
General Obligation Bonds $ 925,000 $ 290,000 $ 190,000 $ 1,025,000 $ 180,000
General Obligation Special Assessment Bonds 13,895,000 - 2,500,000 11,395,000 2,095,000
General Obligation Revenue Bonds 1,205,000 - 110,000 1,095,000 115,000
Total Bonds Payable 16,025,000 290,000 2,800,000 13,515,000 2,390,000
Loan Payable 57,447 - 28,581 28,866 28,866
Compensated Absences 218,785 156,418 138,738 236,465 30,410
Governmental Activity Long-Term Liabilities $ 16,301,232 $ 446,418 $ 2,967,319 $ 13,780,331 $ 2,449,276
BUSINESS-TYPE ACTIVITIES
General Obligation Bonds $ 8,605,000 $ - $ 355,000 $ 8,250,000 $ 375,000
Note Payable 132,000 - 44,000 88,000 44,000
Compensated Absences 90,473 44,876 46,192 89,157 11,288
Business Activity Long-Term Liabilities $ 8,827,473 $ 44,876 $ 445,192 $ 8,427,157 $ 430,288
(49)
CITY OF ST. JOSEPH, MINNESOTA
N®TES TO FINANCIAL STATEMENTS
®ECEiVii3ER 3~, 2®08
NOTE 3 ®ETAILE® NOTES ON ALL FUNDS (CONTINUE®)
C. Liabilities (Continued)
4. Minimum Debt Payments
Debt requirements to maturity are as follows:
Governmental Activities
Year Ending G. O. Special Assessment Bonds Revenue Bonds
December 31, Principal Interest Principal Interest
2009 $ 2,095,000 $ 443,823 $ 115,000 $ 43,913
2010 2,025,000 367,928 120,000 40,223
2011 1,235,000 293,843 125,000 36,098
2012 1,195,000 246,808 135,000 31,498
2013 795,000 200,308 130,000 26,260
2014-2018 3,180,000 550,342 470,000 53,805
2019-2023 870,000 69,405 - -
Total $ 11,395,000 $ 2,172,457 $ 1,095,000 $ 231,797
Year Ending General Obli gation Loan Payable
December 31, Principal Interest Principal Interest
2009 $ 180,000 $ 36,988 $ 28,866 $ 289
2010 175,000 31,203 - -
2011 120,000 25,425 - -
2012 125,000 21,435 - -
2013 125,000 17,028 - -
2014-2018 300,000 32,780 - -
Total $ 1,025,000 $ 164,859 $ 28,866 $ 289
Business-Type Activities
Year Ending Utility Revenue Bonds Note Payable
December 31, Principal Interest Principal Interest
2009 $ 375,000 $ 338,006 $ 44,000 $ 3,520
2010 390,000 323,831 44,000 1,760
201 i 400,00"u 308,820 - -
2012 420,000 293,371 - -
2013 430,000 277,064 - -
2014-2018 2,325,000 1,103,061 - -
2019-2023 2,445,000 612,474 - -
2024-2028 1,465,000 134,456 - -
Total $ 8,250,000 $ 3,391,089 $ 88,000 $ 5,280
(50)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEti113E1~ 34, 21108
NOTE 3 DETAILED NOTES ON ALL FUNDS (CONTINUED)
C. Liabilities (Continued)
5. Leases
The City leases police vehicles and railroad right of way under cancelable operating
leases. Total costs for the leases for the year ended December 31, 2008 were
$50,074.
6. Risk Management
The City is exposed to various risks of loss related to: torts, theft of, damage to, or
destruction of assets; errors or omissions; injuries to employees; or natural disasters.
The City (primary government) has entered intoY a joint powers agreement with the
League of Minnesota Cities Insurance Trust (LMCIT). The LMCIT is a public entity
risk pool currently operating as common risk management and insurance program for
Minnesota cities. The City also carries commercial insurance for certain other risks of
loss, including employee health insurance.
The agreement for formation of the LMCIT provides that the pool will be self-
sustaining through member assessments and will reinsure through commercial
companies for claims in excess of reserved amounts for each insured event. The
pool can make additional assessments to make the pool self-sustaining. The City has
determined that it is not possible to estimate the amount of such additional
assessments; however, they are not expected to be material to the financial
statements. There were no significant reductions in insurance coverage from the
previous year or settlements in excess of insurance coverage for any of the past
three fiscal years.
NOTE 4 PENSION PLANS
A. Plan Description
All full-time and certain part-time employees of the City of St. 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 Fund (PEPFF}, which are cost-sharing,
multiple-employer retirement plans. I hese plans are established and administered in
accordance with Minnesota Statutes, Chapters 353 and 356.
PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated
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, fire-fighters and
peace officers who qualify for membership by statute are covered by the PEPFF.
PERA provides retirement benefits as well as disability benefits to members, and benefits
to survivors upon death of eligible members. Benefits are established by state statute,
and vest after three years of credited service. The defined retirement benefits are based
on a member's highest average salary for any five successive years of allowable service,
age, and years of credit at termination of service.
(51)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBEr'~ 31, 2x08
NOTE 4 PENSION PLANS (CONTINUED)
A. Plan Description (Continued)
Two methods are used to compute benefits for PERA's Coordinated and Basic Plan
members. The retiring member receives the higher of a step-rate benefit accrual formula
(Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual
rate for a Basic Plan member is 2.2 percent of average salary for each of the first 10
years of service and 2.7 percent for each remaining year. The annuity accrual rate for a
Coordinated Plan member is 1.2 percent of average salary for each of the first 10 years
and 1.7 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.7
percent of average salary for Basic Plan members and 1.7 percent for Coordinated Plan
members for each year of service. For PEPFF members, the annuity accrual rate is 3.0
percent for each year of service. For all PEPFF members and PERF members hired prior
to July 1, 1989 whose annuity is calculated using Method 1, a full annuity is available
when age plus years of service equal 90. Normal retirement age is 55 for PEPFF
members and 65 for Basic and Coordinated members hired prior to July 1, 1989. Normal
retirement age is the age for unreduced Social Security benefits capped at 66 for
Coordinated members hired on or after July 1, 1989. A reduced retirement annuity is also
available to eligible members seeking early retirement.
There are different types of annuities available to members upon retirement. Asingle-life
annuity is a lifetime annuity that ceases upon the death of the retiree--no survivor annuity
is payable. There are also various types of joint and survivor annuity options available
which will 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 section are current
provisions and apply to active plan participants. Vested, terminated employees who are
entitled to benefits but are not receiving them yet are bound by the provisions in effect at
the time they last terminated their public service.
PERA issues a publicly available financial report that includes financial statements and
required supplementary information for PERF and PEPFF. That report may be obtained
on the Internet at www.mn~era.orq, by writing to PERA at 60 Empire Drive #200,
St. Paul, Minnesota, 55103-2088 or b;~ calling (651) 296-746i0 or 1-800-652-9026.
(52)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 20€3®
NOTE 4 PENSION PLANS (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
9.10% and 6.0%, respectively, of their annual covered salary in 2008. PEPFF members
were required to contribute 8.6% of their annual covered salary in 2008. That rate will
increase to 9.4% in 2009. The City of St. Joseph is required to contribute the following
percentages of annual covered payroll: 6.50% for Coordinated Plan PERF members and
12.9% for PEPFF members. Employer contribution rates for the Coordinated Plan and
PEPFF will increase to 6.75% and 14.1 % respectively, effective January 1, 2009. The
City's contributions to the Public Employees Retirement Fund for the years ending
December 31, 2008, 2007 and 2006 were $47,466, $37,006, and $29,879, respectively.
The City's contributions to the Public Employees Police & Fire Fund for the years ending
December 31, 2008, 2007, and 2006 were $59,981, $49,371, and $37,252, respectively.
The City's contributions were equal to the contractually required contributions for each
year as set by state statute.
C. Defined Contribution Plan
!n 2008, all elected officials of the City are covered by the Public Employees Defined
Contribution Plan (PEDCP), a multiple-employer deferred compensation plan
administered by the Public Employees Retirement Association of Minnesota (PERA). The
PEDCP is a tax qualified plan under Section 401(a) of the Internal Revenue Code and all
contributions by or on behalf of employees are tax deferred until time of withdrawal.
Plan benefits depend solely on amounts contributed to the plan plus investment
earnings, less administrative expenses. Minnesota Statutes, Chapter 353D.03, specifies
the employee and employer contribution rates for those qualified personnel who elect to
participate. An eligible elected official who decides to participate contributes 5 percent of
salary which is matched by the elected official's employer. For ambulance service
personnel, employer contributions are determined by the employer, and for salaried
employees must be a fixed percentage of salary. Employer contributions for volunteer
personnel may be a unit value for each call or period of alert duty. Employees who are
paid for their services may elect to make member contributions in an amount not to
exceed the employer share. Employer and employee contributions are combined and
used to purchase shares in one or more of the seven accounts of the Minnesota
Supplemental Investment Fund. For administering the plan, PERA receives two percent
of employer contributions and twenty-five hundredths of one percent of the assets in
each member's account annually.
There is no vesting period required to receive benefits in the PEDCP.
The employer's contribution amounts for the years ending December 31, 2008, 2007,
and 2006 were $1,667, $1,711, and $1,629 respectively, equal to the contractually
required contributions for each year as set by state statute.
(53)
CITI' OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEI'~113ER 31, 2000
NOTE 4
PENSION PLANS (CONTINUED)
D. St. Joseph Fire Department Relief Association
Plan Description
The Public Employee Retirement System (PERS) Plan (Plan) is asingle-employer
defined benefit pension plan administered by the St. Joseph Fire Department Relief
Association. The Plan provides retirement, disability, and death benefits to plan members
and beneficiaries. Benefits are established by state statute. The St. Joseph Fire
Department issues a publicly available financial report that includes financial statements
and required supplementary information for the plan. That report may be obtained by
contacting the City's Fire Department.
Funding Policy
Minnesota Statutes specify minimum contributions that may be required from the City on
an annual basis. These minimum contributions are determined based on the amount
required to meet the normal cost plus amortizing any prior year's service cost over a ten
year period. A contribution was not required from the City for the year ended
December 31, 2008. The St. Joseph Fire Department Relief Association also receives
funding from the State of Minnesota as a two percent fire premium tax. The City receives
the contributions and is required by statute to pass this through as payment to the Fire
Relief Association. Investment earnings also add to the resources available for benefits.
Annu~1 Pension Cost and Net Pension Obligation
The City's annual pension cost and net pension obligation to PERS for the current year
were as follows:
Annual Required Contribution $ -
Interest on Net Pension Obligation -
Adjustment to Annual Required Contribution 35,454
Annual Pension Cost 35,454
Less Contribution Made 35,454
Increase (Decrease} in Net Pension Obligation -
Net Pension Obligation Beginning of Year -
Net Pension Obligation End of Year $ -
The annual required contribution for the current year was determined as part of
December 3i, 2008, actuarial valuation using the entry age actuarial cost method. The
actuarial assumptions included (a) 5% investment rate of return and (b) age and service
retirement was assumed to occur at age 50. Pension benefit obligations on an actuarial
basis are not calculated for individual volunteer fire relief associations since slate
statutes permit alternate calculation of required reserves based on overall actuarial
assumptions.
(54)
CITY OF ST. JOSEPhI, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
®ECEMEER 31, 20198
NOTE 4
PENSI®N PLANS (CONTINUE®)
D. St. Joseph Fire Department Relief Association (Continued)
Annual Pension Cost and Net Pension Obligation (Continued)
The City's net pension obligation for the Fire Reiief Association for the years ended
December 31, 2008, 2007, and 2006 are as follows:
December 31,
2008
2007
2006
Annual
Pension
Cost (APC)
$ 35,454
40,667
47,012
Percentage
of APC
Contributed
100.0
100.0
100.0
Net
Pension
Obligation
N/A
N/A
N/A
Contributions Reauired and Made
The City makes contributions to the Association annually in an amount equal to the fire
aid received from the State of Minnesota as required by state statutes. The City is
required to make additional contributions to the Fire Relief Association in the following
year if the following years anticipated administrative expenses plus the anticipated
increase in the required reserves plus amortization of the original unfunded accrued
liability exceeds the anticipated revenues. The City was not required to make any
contributions in excess of fire aid for 2008, 2007 and 2006.
Funding Proaress
As of December 31, 2007 (the most recent available information), the Plan was under
funded by $28,653. Additional information on the funding progress is included in the
required supplementary information section of this report.
Related-Party Investments
As of December 31, 2008, and for the year then ended, the Association held no
securities issued by the City or other related-parties.
(55)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
DECEMBER 3 ~, 2008
NOTE 5
SUMMARY OF SIGNIFICANT CONTINGENCIES AN® ®THER ITEMS
A. Contract Commitments
At year-end, the City had approximately $180,000 of outstanding contract commitments.
Expended
Contract through
Project Amount 12/31/2008 Commitment
Field Street Corridor Study $ 331,189 $ 246,819 $ 84,370
North Corridor and CSAH 2 Realignment 383,172 327,693 55,479
Southwest Beltway Study 54,375 10,890 43,485
$ 183,334
B. Contingencies
The City, in connection with the normal conduct of its affairs, is involved in various
claims, judgments, and litigation. The City Attorney estimates that the potential claims
against the City not covered by insurance resulting from such litigation would not
materially affect the financial statements of the City.
C. Related Organization
The S±. Joseph EDA has issued Public Project Revenue Bonds of 2003 and 2005. These
Bonds are to finance the City Hall and maintenance facility projects. Rental payments are
due from the City to the St. Joseph EDA. The City will awn the projects upon completion
of the rental payments. Since the St. Joseph EDA is reported as a blended component
unit of the City, the (ease transactions are not reported. The debt and projects are
recorded as though part of the City.
D. Joint Ventures
The St Cloud Area Planning Organization was created to keep governmental units and
the general public informed and advised on all matters relative to transportation planning,
programming, and funding. The council is an organized joint venture having the duties,
powers, and privileges granted joint powers by Minnesota Statute §471.59. During 2008
the City contributed $6,542 to the St Cloud Area Planning Organization. Complete
financial statements Can be obtained from: St. Civud Area Planning i)rganizatioii, 1043
County Road #4, St. Cloud, MN 56303.
Central Minnesota Major Crime Irnresfsgation Unit is a group of 6ocal !aw enforcement
officers within the four-county surrounding area that will be available to assist any of the
participating entities in the investigation and solution of major crimes. During 2008, the
City contributed $2,962 to the organization. It is reported as a special revenue fund of the
City of Sartell. Complete financial statements can be obtained from: City of Sartell, PO
Box 140, Sartell, MN 56377.
(56)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO FINANC®IA~yL S/TggA((~T®eEMENTS
DECEMBER J~, 2VV0
N®TE 5 SUMMARY OF SIGNIFICANT CONTINGENCIES AND OTHER ITEMS (CONTINUED)
D. Joint Ventures (Continued)
St. Cloud Area Economic Development Partnership is comprised of several area cities,
counties, colleges, universities, public utilities, and other organizations. The Partnership
focuses on marketing the region to selected manufacturing sectors and regional/national
service sectors. In 2008 the City contributed $8,000 to this organization. Complete
financial statements for the St. Cloud Area Economic Development Partnership can be
obtained from: St. Cloud Area Economic Development Partnership, 110 South
6th Avenue, St. Cloud, MN 56301.
NOTE 6 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, 2008, the City's conduit debt consisted of the following:
Commercial Development Revenue Note
(Independence Center), Series 2001 $ 469,594
Industrial Revenue Bonds (St. Joseph
Development, LLC), Series 2002 1.925,000
Total
X2,394,594
NOTE 7 SUBSEQUENT EVENTS
On February 19, 2009, the City issued $3,010,000 of General Obligation Crossover
Refunding Bonds tv refi.fiid the 2002 Genera^I Obligation iiiiprotiemcnt Bonds a^nd the 200
General Obligation Sewer Revenue Bonds. This refunding will result in interest savings of
approximately $130,000. The interest rates on this bond are between 1.25% and 3.85% and
will mature in December 2021.
NOTE 8 RECLASSIFICATION OF FUNDS
In the prior year financial statements the Water Access and Sewer Access funds were
presented as nonmajor governmental funds. These funds have been reclassified as
nonmajor proprietary funds in the current year as they are closely related to the water and
sewer proprietary funds. The understatement of the beginning fund balance for
governmental funds is offset by the overstatement of the beginning net assets for proprietary
funds.
(57)
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MD&A
CITY OF ST. JOSEPH, MINNESOTA
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
YEAR ENDED DECEMBER 31, 2008
VARIANCE
BUDGETED AMOUNTS ACTUAL WITH FINAL
ORIGINAL FINAL AMOUNTS BUDGET
REVENUES
Property Taxes $ 1,130,260 $ 1,130,260 $ 1,046,124 $ (84,136)
Sales Taxes 99,100 99,100 104,768 5,668
Special Assessments 1,200 1,200 .2,802 1,602
Business Licenses and Permits 240,000 240,000 113,911 (126,089}
Intergovernmental 904,850 904,850 894,320 (10,530)
Charges for Services 242,250 242,250 205,431 (36,819)
Fines and Forfeitures 74,500 74,500 68,125 (6,375)
Miscellaneous Revenues:
Investment Income 52,000 52,000 46,483 (5,517)
Contributions and Donations 30,700 30,700 32,533 1,833
Other 1,200 1,200 24,868 23,668
Total Revenues 2,776,060 2,776,060 2,539,365 (236,695)
EXPENDITURES
Current
General Government $ 712,710 $ 682,710 $ 598,890 $ 83,820
Public Safety 1,310,860 1,310,860 1,267,601 43,259
Public Works 395,355 397,355 391,712 5,643
Culture and Recreation 156,400 156,400 172,288 (15,888)
Capital Outlay
General Government 10,000 10,000 2,409 7,591
.Public Safety 88,165 88,165 11,693 76,472
Public Works 137,000 137,000 - 137,000
Culture and Recreation 8,500 8,500 - 8,500
Total Expenditures 2,818,990 2,790,990 2,444,593 346,397
Excess of Revenues Over
(Under) Expenditures (42,930) (14,930) 94,772 109,702
OTHER FINANCING SOURCES (USES)
Proceeds from Sale of Capital Assets 500 500 - (500)
Transfers In 30,000 30,000 24,364 (5,636)
Transfers Out - - (206,932) (206,932)
Total Other Financing Sources (Uses) 30,500 30,500 (182,568) (213,068)
NET CHANGE IN FUND BALANCE $ (12,430) $ 15,570 $ (87,796) $ (103,366)
Fund Balances -Beginning of Year 1,149,552
FUND BALANCES -END OF YEAR $ 1,061,756
See accompanying Notes to the Required Supplementary Information.
(58)
CITY OF ST. JOSEPH, MINNESOTA
NOTES TO THE REQUIRE® SUPPLEMENTARY INFORMATION
®ECEMBER 31, 2000
I. BU®GETARY INFORMATION
The City follows these procedures in establishing the budgetary data reflected in the financial
statements:
a. In August of each year, City staff submits to the City Council, a proposed operating budget
for the fiscal year commencing the following January 1. The operating budget includes
proposed expenditures and the means of financing them for the upcoming year.
b. Public hearings are conducted to obtain taxpayer comments.
c. The budget is legally enacted through passage of a resolution after obtaining taxpayer
comments.
d. Budgets for the General and Special Revenue funds are adopted on a basis consistent with
U.S. generally accepted accounting principles.
e. Expenditures may not legally exceed budgeted appropriations at the department level. No
fund's budget can be increased without City Council approval. The City Council may
authorize transfer of budget amounts between departments within any fund.
f. Annual appropriated budgets are adopted during the year for the General and Special
Revenues funds. Annual appropriated budgets are not adopted for Debt Service Funds
because effective budgetary control is alternatively achieved through bond indenture
provisions. Budgetary control for Capital Project Funds is accomplished through the use of
project controls and formal appropriated budgets are not adopted.
g. Budgeted amounts are as originally adopted by the City Council. There were amendments
for 2008 primarily relating to the reduction of the capital outlay budgets for each function.
Actual expenditures exceeded budget amounts in the following functions:
Final
Budget
General Fund
Current:
Culture and Recreation
Parks
Highways and Streets
Snow and Ice Removal
Actual Excess
$ 156,400 $ 172,288 $ 15,888
50,360 79,443 29,083
(59J
CITY OF ST. JOSEPH, MINNESOTA
ST. JOSEPH FIREMAN'S RELIEF ASSOCIATION
SC~IED4JLE OF FIJNDfNO PROGRESS
DECEMBER 31, 2008
Accrued Unfunded Funded
Fiscal Year Value of Assets Liability (AAL) AAL (UAAL) Ratio
Ending (a) (b) (b-a) a/b
12/31/2007 $ 799,361 $ 828,014 $ 28,653 97°{0
12/31/2006 797,357 884,547 87,190 90°{°
12/31/2005 716,588 759,070 42,482 94%
Additional information relating to the pension plan is provided in Note 4D.
The December 31, 2008 report is not yet available.
Benefit
per Year
of Service
$ 1,800
1,800
1,800
(60)
This Page Has Been Left Blank Intentionally.
OTHER. SUPPLEMENTARY INFORMATION
COMBINING AND INDIVIDUAL FINANCIAL STATEMENTS
CITY ®F ST. J®SEPH, MINNES®TA
C®MBINING BALANCE SHEET
I'JCNMAJGR G®0,'ERNMENTAL FDNDS
DECEMBER 31, 2008
Special Revenue
TIF 2-1
Economic TIF 1-4 Millstream
Development TiF 1-3 St Joseph Shops and
Authority Borgert Development Lofts
(150) (155) (156.) (157)
ASSETS
Cash and Investments
Property Tax Receivable -Delinquent
Notes Receivable
Interest Receivable
Due from Other Governments
Special Assessments Receivable
Deferred
Delinquent
Due from Other Funds
$ 21,975 $ 5,937 $ 26,638 $ 5,747
48 11 67 15
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable
Contracts Payable
Due to Other Funds
Deferred Revenue
Total Liabilities
FUND BALANCES
Unreserved, Reported in:
Special Revenue -Undesignated
Special Revenue -Designated for Capital Outlay
Debt Service -Designated
Debt Service -Undesignated
Capital Projects -Designated
T oral Fund Balances
Total Liabilities and Fund Balances
$ 22,023 $ 5,948 $ 26,705 $ 5,762
$ 2,310 $ - $ - $ -
2,310 - - -
19,413 5,948 26,705 5,762
300 - - -
19,713 5,948 26,705 5,762
$ 22,023 $ 5,948 $ 26,705 $ 5,762
(61)
Special Revenue
State Lake City
Collected Park Recreation Wobegon Street Revolving Total
Sales Tax Dedication Center Trail Beautification Loan Special
(200) (205) (210) (230) (232) (250) Revenue
$ 624,430 $ 59,425 $ 48,137 $ 23 $ 59 $ 52,548 $ 844,919
- 2,999 - - 2,500 - 5,499
1,012 114 92 - - 100 1,459
62,171 - - - - - 62,171
$ 687,613 $ 62,538 $ 48,229 $ 23 $ 2,559 $ 52,648 $ 914,048
$ - $ 75 $ - $ - $ - $ - $ 2,385
- - - 10,010 49,000 - 59,010
- 1,999 - - 2,500 - 4,499
- 2,074 - 10,010 51,500 - 65,894
687,613 60,464 48,229 (9,987) (48,941) 52,648 847,854
- - - - - - 300
687,613 60,464 48,229 (9,987} (48,941) 52,648 848,154
$ 687,613 $ 62,538 $ 48,229 $ 23 $ 2,559 $ 52,648 $ 914,048
(62)
CITY OF ST, JOSEPH, MINNESOTA
COMBINING BALANCE SHEET (CONTINUED)
NOivli~lAJOR GO~JERNMENTAL FUN.®S
®ECEMBER 37, 2008
Debt Service
GO Stearns City Hall GO
Improvement Electric EDA
Refunding Cooperative Refunding
Bonds of Loan Bonds of
20076(320) (321) 2005A(322)
ASSETS
Cash and Investments
Property Tax Receivable -Delinquent
Notes Receivable
Interest Receivable
Due from Other Governments
Special Assessments Receivable
Deferred
Delinquent
Due from Other Funds
$ 380,308 $ 33,433 $ 3,922
118 1,323 4,323
805 66 13
59 640 2,089
355,644 - -
14,457 - -
Total Assets
$ 751,391 $ 35,462 $ 10,347
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable
Contracts Payable
Due to Other Funds
Deferred Revenue
Total Liabilities
FUND BALANCES
Unreserved, Reported in:
Special Revenue -Undesignated
Speciai Revenue -Designated for Capital Outlay
Debt Service -Designated
Debt Service -Undesignated
Capital Projects -Designated
$ - $ - $ -
- - 17,000
370,219 1,323 4,323
370,219 1,323 21,323
381,172 34,139 -
- - (10,976)
Total Fund Balances
Total Liabilities and Fund Balances
381,172 34,139 (10,976)
$ 751,391 $ 35,462 $ 10,347
(63)
Debt Service
Fire Hall
GO GO Maintenance GO GOlmprovement GO GO
Improvement Improvement Facility GO EDA Refunding Crossover Improvement Certificates of
Bonds of Bonds of Revenue Bonds Bonds of Refunding Bonds Bonds of Indebtedness
2004A (323) 2003D (328) of 2003A (329) 20036 (331) of 2003C (332) 20058 (333) of 20068 (337)
$ 83,613 $ 303 $ 3 $ 137,739 $ 124,352 $ 602,729 $ 7,900
736 - 2,810 1,774 1,051 930 2,767
337 566 - 293 350 1,122 29
360 - 1,355 860 504 440 1,263
14,983 - - - 39,369 657,358 -
- 68,538 - - 2,605 23,055 -
$ 100,029 $ 69,407 $ 4,168 $ 140,666 $ 168,231 $ 1,285,634 $ 11,959
- 26,000 - - - - -
15,719 68,538 2,810 1,774 43,025 681,343 2,767
15,719 94,538 2,810 1,774 43,025 681,343 2,767
84,310 - 1,358 138,892 125,206 604,291 9,192
- (25,131) - - - - -
84,310 (25,131) 1,358 138,892 125,206 604,291 9,192
$ 100,029 $ 69,407 $ 4,168 $ .140,666 $ 168,231 $ 1,285,634 $ 11,959
(64)
CITY ®F ST. J®SEPH, IVIINNES®TA
C®MBINING BALANCE SHEET (CONTINUED)
NCNIi6'iAJCR GCi6ERNMENTAL FUNDS
DECEMBER 31, 2008
Debt Service
GO GO
Improvement Certificates of Debt Service
Bonds of Indebtedness Relief Fund Total
2006C (338) of 2008A (342) (390) Debt Service
ASSETS
Cash and Investments
Property Tax Receivable -Delinquent
Notes Receivable
Interest Receivable
Due from Other Governments
Special Assessments Receivable
Deferred
Delinquent
Due from Other Funds
Total Assets
$ 785,185 $ 9,523 $ 116,643 $ 2,285,653
2,200 - - 18,032
1,674 190 124 5,569
1,005 - - 8,575
604,806 - 8,650 1,680,810
1,057 - - 109,712
- - 76,010 76,010
$ 1,395,927 $ 9,713 $ 201,427 $ 4,184,361
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable
Contracts Payable
Due to Other Funds
Deferred Revenue
$ - $ - $ - $ -
- - - 43,000
608,063 - 8,650 1,808,554
Total Liabilities
FUND BALANCES
Unreserved, Reported in:
Specia! Revenue -Undesignated
Special Revenue -Designated for Capital Outlay
Debt Service -Designated
Debt Service -Undesignated
Capital Projects -Designated
Total Fund Balances
Total Liabilities and Fund Balances
608,063 - 8,650 1,851,554
787,864 9,713 192,777 2,368,914
- - - (36,107)
787,864 9,713 192,777 2,332,807
$ 1,395,927 $ 9,713 $ 201,427 $ 4,184,361
(65)
Capital Projects
Northland 2008 General Total
Heights/ 2007 Street Equipment Capital Total Nonmajor
Transportation Improvements Certificates Outlay Capital Governmental
Studies (435) (441) (442) (490) Projects Funds
$ 548,206 $ 504,479 $ 36,538 $ 346,462 $ 1,435,685 $ 4,566,257
_ _ _ _ - 18,032
_ _ _ _ - 5,499
_ _ _ _ - 7,028
_ _ _ _ - 70,746
_ _ _ _ - 1,680,810
_ _ _ _ - 109,712
_ _ _ _ - 76,010
$ 548,206 $ 504,479 $ 36,538 $ 346,462 $ 1,435,685 $ 6,534,094
$ - $ 208 $ 28,024
11,432 81,484 -
11,432 81,692 28,024
$ 90,421 $ 118,653 $ 121,038
- 92,916 92,916
- - 102,010
- - 1,813,053
90,421 211,569 2,129,017
_ _ _ _ - 847,854
_ _ _ _ _ 300
_ _ _ _ - 2,368,914
- - - - - (36,107)
536,774 422,787 8,514 256,041 1,224,116 1,224,116
536,774 422,787 8,514 256,041 1,224,116 4,405,077
$ 548,206 $ 504,479 $ 36,538 $ 346,462 $ 1,435,685 $ 6,534,094
(66)
CITY OF ST. JOSEPH, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31, 2008
Special Revenue
TIF 2-1
Economic TIF 1-4 Millstream
Development TIF 1-3 St. Joseph Shops and
Authority Borgert Development Lofts
(150) (155) (156) (157)
REVENUES
General Property Taxes $ - $ - $ - $ _
Sales Tax - - _ _
Tax Increments - 22,842 62,133 -
Special Assessments - - - _
Intergovernmental - - - _
Charges for Services - - - _
Gifts and Donations - - - _
Interest on Investments 1,028 239 1,415 307
MisceAaneous - - - _
Total Revenues 1,028 23,081 63,548 307
EXPENDITURES
CURRENT
Public Safety - - _
Culture and Recreation - _ _
Economic and Community Development 38,490 22,071 76,841 550
CAPITAL OUTLAY
General Government - - - _
Public Safety - - - _
Public Works - - _ _
Culture and Recreation - - _ _
Economic and Community Development - - - _
DEBT SERVICE
Principal - - - _
Interest and Fiscal Charges - - - _
Total Expenditures 38,490 22,071 76,841 550
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (37,462) 1,010 (13,293) (243)
OTHER FINANCING SOURCES (USES)
Bonds Issued - - - -
Transfers In 28,000 - - -
Transfers Out - - - _
Gain/(Loss) on Sale of Equipment - - - -
Total Other Financing
Sources (Uses) 28,000 - - -
NET CHANGE IN FUND BALANCES (9,462) 1,010 (13,293) (243)
Fund Balance -Beginning of Year 29,175 4,938 39,998 6,005
FUND BALANCE -END OF YEAR $ 19,713 $ 5,948 $ 26,705 $ 5,762
(67)
Special Revenue
State Lake City
Collected Park Recreation DARE Wobegon Street Revolving Total
Sales Tax Dedication Center Program Trail Beautification Loan Special
(200) (205) (210) (225) (230) (232) (250) Revenue
251,015 - - - - - - 251,015
_ _ _ _ - - - 84,975
- - - - 20 - - 20
21,469 2,417 1,942 - - - 2,120 30,937
- 1,000 - - - - - 1,000
272,484 3,417 1,942 - 20 - 2,120 367,947
- - - 374 - - - 374
52,051 1,080 - - - - - 53,131
_ _ _ _ _ - - 137,952
- 126 - - - - - 126
52,051 1,206 - 374 - - - 191,583
220,433 2,211 1,942 (374) 20 - 2,120 176,364
_ _ _ _ - - - 28,000
_ _ _ _ - - 28,000
220,433 2,211 1,942 (374) 20 - 2,120 204,364
467,180 58,253 46,287 374 (10,007) (48,941) 50,528 643,790
$ 687,613 $ 60,464 $ 48,229 $ - $ (9,987) $ (48,941) $ 52,648 $ 848,154
(68)
CITY OF ST. JOSEPH, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE gCONTINUEDj
NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31, 2008
Debt Service
GO Stearns City Hall GO
GO Improvement Electric EDA
Certificates of Refunding Cooperative Refunding
Indebtedness Bonds of Loan Bonds of
of 2004 (307) 20076 (320) (321) 2005A (322)
REVENUES
Generai Property Taxes $ 73,573 $ 2,341 $ 27,804 $ 90,382
Sales Tax - - - -
Tax Increments - - - -
Special Assessments - 91,541 - -
Intergovernmental 5,995 185 2,210 7,179
Charges for Services - - - -
Gifts and Donations - - - -
Intereston Investments 960 17,074 1,407 277
Miscellaneous - - - -
Total Revenues 80,528 111,141 31,421 97,838
EXPENDITURES
CURRENT
Public Safety - - - -
Culture and Recreation - - - -
Economic and Community Development - - - -
CAPITAL OUTLAY
General Government - - - -
Public Safety - - - -
Public Works - - - -
Culture and Recreation - - - -
Economic and Community Development - - -
DEBT SERVICE
Principal 75,000 125,000 28,581 70,000
Interest and Fiscal Charges 2,438 40,224 574 23,458
Total Expenditures 77,438 165,224 29,155 93,458
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 3,090 (54,083) 2,266 4,380
L`THER F!"JAl~:ClNG SOURCES (USES)
Bondslssued - - - -
Transfers In - 16,900 - -
Transfers Out (10,364) - - -
Gain/(Loss) on Sale of Equipment - - - -
Total Other Financing
Sources (Uses) (10,364) 16,900 - -
NET CHANGE IN FUND BALANCES (7,274) (37,183) 2,266 4,380
Fund Balance -Beginning of Year 7,274 418,355 31,873 (15,356)
FUND BALANCE -END OF YEAR $ - $ 381,172 $ 34,139 $ (10,976)
(69)
Debt Service
Fire Hall
GO GO Maintenance GO GOlmprovement GO GO
Improvement Improvement Facility GO EDA Refunding Crossover Improvement Certificates of
Bonds of Bonds of Revenue Bonds Bonds of Refunding Bonds Bonds of Indebtedness
2004A (323) 2003D (328) of 2003A (329) 20036 (331) of 2003C (332) 20056 (333) of 20068 (337)
$ 15,812 $ - $ 59,533 $ 36,502 $ 20,562 $ 20,401 $ 63,859
1,900 4,093 - - 20,497 142,493 -
1,258 - 4,737 2,895 1,629 1,628 5,107
- - - 41,824 - - -
7,144 12,010 - 6,221 7,420 23,805 614
26,114 16,103 64,270 87,442 50,108 188,327 69,580
120,000
8,580 415,000
10,998 40,000
24,123 55,000
23,973 100,000
7,932 95,000
57,915 60,000
6,720
128,580 425,998 64,123 78,973 107,932 152,915 66,720
(102,466) (409,895) 147 8,469 (57,824) 35,412 2,860
- 45,000 41,050 - - - -
- 45,000 41,050 - - - -
(102,466) (364,895) 41,197 8,469 (57,824) 35,412 2,860
186,776 339,764 (39,839) 130,423 183,030 568,879 6,332
$ 84,310 $ (25,131) $ 1,358 $ 138,892 $ 125,206 $ 604,291 $ 9,192
(70)
CITY OF ST. JOSEPH, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES iN FUND BALANCE (CONTINl1EDj
NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31, 2008
Debt Service
GO GO
Improvement Certificates of Debt Service
Bonds of Indebtedness Relief Fund Total
2006C (338) of 2008A (342) (390) Debt Service
REVENUES
General Property Taxes $ 50,882 $ - $ - $ 461,651
Sales Tax - - - -
Tax Increments - - - -
Special Assessments 68,150 - 1,449 330,123
Intergovernmental 4,071 - - 36,894
Charges for Services - - - 41,824
Gifts and Donations - - - -
Interest on Investments 35,527 4,049 2,627 119,135
Miscellaneous - - - -
Total Revenues 158,630 4,049 4,076 989,627
EXPENDITURES
CURRENT
Public Safety - - - -
Culture and Recreation - - - -
Economic and Community Development - - - -
CAPITAL OUTLAY
General Government - - - -
Public Safety - - - -
Public Works - - - -
Culture and Recreation - - - -
Economic and Community Development - - - -
DEBT SERVICE
Principal 125,000 - - 1,308,581
Interest and Fiscal Charges 92,769 10,026 - 309,730
Total Expenditures 217,769 10,026 - 1,618,311
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (59,139) (5,977) 4,076 (628,684)
OTHER FlNANC!NG SOURCES (USES)
Bonds Issued - 15,690 - 15,690
Transfers In 283,273 - - 386,223
Transfers Out - - - (10,364)
Gain/(Loss) on Saie of Equipment - - - -
Total Other Financing
Sources (Uses) 283,273 15,690 - 391,549
NET CHANGE IN FUND BALANCES 224,134 9,713 4,076 (237,135)
Fund Balance -Beginning of Year 563,730 - 188,701 2,569,942
FUND BALANCE -END OF YEAR $ 787,864 $ 9,713 $ 192,777 $ 2,332,807
(71)
Capital Projects
Northland 2008 General Total
Heights/ 2006 Street 2007 Street Equipment Capital Total Nonmajor
Transportation Improvements Improvements Certificates Outlay Capital Governmental
Studies (435) (438) (441) (442) (490) Projects Funds
$ _ $ _ $ _ $ _ $ _ $ - $ 461,651
_ _ _ _ _ - 251,015
_ _ _ _ - - 84,975
_ _ _ _ _ - 330,123
_ _ _ _ - - 36,894
_ _ _ _ _ - 41,824
_ _ _ _ - - 20
_ _ _ _ _ - 150,072
_ _ _ _ _ - 1,000
_ - _ _ _ - 1,357,574
_ _ _ _ _ _ 374
_ _ _ _ _ - 53,131
_ _ _ _ - - 137,952
- - - 46,857 2,256 49,113 49,113
- - - 74,384 968 75,352 75,352
77,140 86,642 304,941 138,994 105,548 713,265 713,265
- - - 21,841 38,103 59,944 60,070
- - - 1,600 - 1,600 1,600
_ _ _ _ _ - 1,308,581
- - - 5,120 - 5,120 314,850
77,140 86,642 304,941 288,796 146,875 904,394 2,714,288
(77,140) (86,642) (304,941) (288,796) (146,875) (904,394) (1,356,714)
- - - 274,310 - 274,310 290,000
- - - 23,000 178,932 201,932 616,155
- (253,273} - - (64,050) (317,323) (327,687)
- - - - 13,200 13,200 13,200
- (253,273) - 297,310 128,082 172,119 591,668
(77,140) (339,915) (304,941) 8,514 (18,793) (732,275) (765,046)
613,914 339,915 727,728 - 274,834 1,956,391 5,170,123
$ 536,774 $ - $ 422,787 $ 8,514 $ 256,041 $ 1,224,116 $ 4,405,077
(72)
REVENUES
GENERAL PROPERTY TAXES
SALES TAX
Sales Taxes
Franchise Fees
Total Sales Tax
SPECIAL ASSESSMENTS
LICENSES, PERMITS, AND FEES
Business Licenses and Permits
INTERGOVERNMENTAL
STATE AND LOCAL
Local Government Aid
PERA Increase Aid
Market Value Credit
Fire Aid
State Police Aid
Federal Grants
Other Grants and Aids
Total State and Local
FINES AND FORFEITS
CHARGES FOR SERVICES
General Government
Pubiic Safety
Park and Recreation
Total Charges for Services
MISCELLANEOUS
Contributions and Donations
Interest Earnings
Miscellaneous Revenues
Total Miscellaneous
Total Revenues
BUDGETED AMOUNTS
ORIGINAL
FINAL
VARIANCE
ACTUAL WITH FINAL
AMOUNTS BUDGET
$ 1,130,260 $ 1,130,260 $ 1,046,124 $ (84,136)
5,100 5,100 - (5,100)
94,000 94,000 104,768 10,768
99,100 99,100 104,768 5,668
1,200 1,200 2,802 1,602
240,000 240,000 113,911 (126,089)
801,839 801,839 697,856 (103,983)
1,541 1,541 1,541 -
- - 83,660 83,660
50,000 50,000 38,454 (11,546)
35,000 35,000 49,371 14,371
500 500 5,953 5,453
15,970 15,970 17,485 1,515
904,850 904,850 894,320 (10,530)
74,500 74,500 68,125 (6,375)
46,950 46,950 29,523 (17,427)
184,800 184,800 170,696 (14,104)
10,500 10,500 5,212 (5,288)
242,250 242,250 205,431 (36,819)
30,700 30,700 32,533 1,833
52,000 52,000 46,483 (5,517)
1,200 1,200 24,868 23,668
83,900 83,900 103,884 19,984
2,776,060 2,776,060 2,539,365 (236,695)
(73)
ORIGINAL
BUDGETED AMOUNTS
EXPENDITURES
CURRENT
GENERAL GOVERNMENT
Mayor and Council $ 86,290
Administrative and Finance 405,790
Other General Government 220,630
Total General Government 712,710
PUBLIC SAFETY
156,400 156,400
FINAL
$ 89,230
403,790
189,690
682,710
$ 3,834
25,465
54,521
83,820
Police 865,215 865,215 845,810 19,405
Fire Protection 307,945 307,945 301,083 6,862
Other 137,700 137,700 120,708 16,992
Total Public Safety 1,310,860 1,310,860 1,267,601 43,259
HIGHWAYS AND STREETS
Street Maintenance and Storm Sewers 304,995 306,995 276,503 30,492
Snow and Ice Removal 50,360 50,360 79,443 (29,083)
Street Engineering 40,000 40,000 35,766 4,234
Total Highways and Streets 395,355 397,355 391,712 5,643
CULTURE AND RECREATION
Parks
CAPITAL OUTLAY
General Government
Public Safety
Highways and Streets
Culture and Recreation
Total Capital Outlay
Total Expenditures
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES
OTHER FINANCING SOURCES (USES)
Proceeds from Sale of Capital Assets
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
NET CHANGE IN FUND BALANCE
Fund Balances -Beginning of Year
FUND BALANCES -END OF YEAR
10,000 10,000
88,165 88,165
137,000 137,000
8,500 8,500
243,665 243,665
2,818,990 2,790,990
(42,930) (14,930)
VARIANCE
ACTUAL WITH FINAL
AMOUNTS BUDGET
$ 85,396
378,325
135,169
598,890
172,288 (15,8$8)
2,409 7,591
11,693 76,472
- 137,000
- 8,500
14,102 229,563
2,444,593 371,246
94,772 134,551
500 500 - (500)
30,000 30,000 24,364 (5,636)
- - (206,932) (206,932)
30,500 30,500 (182,568) (213,068)_
$ (12,430) $ 15,570 (87,796) $ (103,366)
1,149,552
$ 1,061,756
(74)
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CITY OF ST. JOSEPH, MINNESOTA
COMBINING STATEMENT OF NET ASSETS
NONMAJOR PROPRIETARY FUNDS
®ECEMBER 31, 2008
Sewer
Refuse Water Access Access
(603) (501) (502) Total
ASSETS
CURRENT ASSETS
Cash and Investments (including Cash Equivalents)
Special Assessments Receivable:
Delinquent
Deferred
Accounts Receivable
Interest Receivable
Total Assets
LIABILITIES
CURRENT LIABILITIES
Accounts Payable
Due to Other Governments
Salaries and Wages Payable
Compensated Absences Payable
Total Current Liabilities
NONCURRENT LIABILITIES
Compensated Absen yes Payable
Total Liabilities
NET ASSETS
Unrestricted
$ 273,170 $ 514,426 $ 608,551 $ 1,396,147
172 - - 172
769 - - 769
50,928 - - 50,928
512 1,600 1,446 3,558
325,551 516,026 609,997 1,451,574
17,658 - - 17,658
3,170 - - 3,170
550 - - 550
794 - - 794
22,172 - - 22,172
7,195 - - 7,195
29,367 - - 29,367
296,184 516,026 609,997 1,422,207
Total Net Assets and Liabilities $ 325,551 $ 516,026 $ 609,997 $ 1,451,574
(75)
CITY OF ST. JOSEPH, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
NONP~IAJOR PROPRIETARY FUNDS
YEAR ENEDED DECEMBER 31, 2008
Refuse Water Access Sewer Access
(603) (501) (502) Total
OPERATING REVENUES
Charges For Services $ 252,836 $ 50,232 $ 24,392 $ 327,460
OPERATING EXPENSES
Wages and Salaries 40,568 - - 40,568
Materials and Supplies 449 - - 449
Professional Services 2,238 - - 2,238
Contracted Services 210,455 - 193,032 403,487
Miscellaneous 1,968 - - 1,968
Total Operating Expenses 255,678 - 193,032 448,710
OPERATING INCOME (LOSS) (2,842) 50,232 (168,640) (121,250)
NONOPERATING REVENUES (EXPENSES)
Investment Income 10,869 33,945 30,682 75,496
NET INCOME (LOSS) BEFORE TRANSFERS 8,027 84,177 (137,958) (45,754)
Transfers Out - (420,000) (88,900) (508,900)
CHANGE IN NET ASSETS 8,027 (335,823) (226,858) (554,654)
Net Assets -Beginning of Year 288,157 851,849 836,855 1,976,861
NET ASSETS -END OF YEAR $ 296,184 $ 516,026 $ 609,997 $ 1,422,207
. (76)
CITY OF ST. JOSEPH, MINNESOTA
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR PROPRIETARY FUNDS
YEAR ENDED DECEMBER 31, 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers and Users
Payments to Suppliers
Payments to Employees
Net Cash Provided (Used) by Operating Activities
CASH FLOWS FROM NONCAPITAL AND
RELATED FINANCING ACTIVITIES
Transfers to Other Funds
CASH FLOWS FROM INVESTING
ACTIVITIES
Interest and Dividends Received
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
Cash and Cash Equivalents -Beginning of Year
CASH AND CASH EQUIVALENTS -END OF YEAR
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
Operating Income (Loss)
Adjustments to Reconcile Operating Income (Loss) to
Net Cash Provided (Used) by Operating Activities:
(Increase) Decrease in Assets:
Accounts Receivable
Special Assessments Receivable
Increase (Decrease) in Liabilities:
Accounts Payable
Salaries and Wages Payable
Due to Other Governments
Compensated Absences Payable
Total Adjustments
Net Cash Provided (Used) by Operating Activities
Refuse Water Access Sewer Access
{603) (501) (502) Total
$ 254,252 $ 50,232 $ 24,392 $ 328,876
(217,568) - (193,032) (410,600)
(42,522) - - (42,522)
(5,838) 50,232 (168,640} (124,246)
- (420,000) (88,900) (508,900)
12,193 39,406 37,297 88,896
6,355 (330,362) (220,243) (544,250)
266,815 844,788 828,794 1,940,397
$ 273,170 $ 514,426 $ 608,551 $ 1,396,147
$ (2,842) $ 50,232 $ (168,640) $ (121,250)
724
692
- 724
- 692
1,030 - - 1,030
(1,512) - - (1,512)
(3,488) - - (3,488)
(442) - - (442)
(2,996) - - (2,996)
$ (5,838) $ 50,232 $ (168,640) $ (124,246)
(77)
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REPORT RELATED TO GOVEI7NMENT AUDITING STANDARDS
~ ~=,~`l
LLP
CPAs, Consultants & Advisors
uvww.larsonal len.com
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ®N COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITW G®VERNIVIENT AUDITING STANDARDS
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, business-type
activities, each major fund, and the aggregate remaining fund information of the City of St. Joseph,
Minnesota (City), as of and for the year ended December 31, 2008, which collectively comprise the City
of St. Joseph's basic financial statements and have issued our report thereon dated March 13, 2009.
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 in
order to determine our auditing procedures for the purpose of expressing our opinions 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 below,
we identified certain deficiencies in internal control over financial reporting that we consider to be
significant deficiencies.
A control deficiency exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent or detect
misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of
control deficiencies, that adversely affects the City's ability to initiate, authorize, record, process, or
report financial data reliably in accordance with generally accepted accounting principles such that there
is more than a remote likelihood that a misstatement of the City's financial statements that is more than
inconsequential will not be prevented or detected by the City's internal control. We consider deficiencies
06-01 and 06-03, described in the accompanying schedule of findings and recommendations, to be
significant deficiencies in internal control over financial reporting.
t , ,.~,..~ (~g)
f ',A+~ ~_ ~ ,~~ ~'~ LarsonAllen LLP is a member of Nexia International, a worldwide network of independent accounting and consulting firms.
INPERNATIONAL
Honorable Mayor and
Members of the City Council
City of St. Joseph
Internal Control Over Financial Reporting (Continued)
A material weakness is a significant deficiency, or combination of significant 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 was for the limited purpose described in
the first paragraph of this section and would not necessarily identify all deficiencies in the internal
control that might be significant deficiencies and, accordingly, would not necessarily disclose all
significant deficiencies that are also considered to be material weaknesses. However, of the significant
deficiencies described in the accompanying schedule of findings and recommendations, we consider
item 06-01 to be a material weakness.
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 with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on
the determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit and, accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to
be reported under Government Auditing Standards.
This report is intended solely for the information and use of management, the Council, and state and
federal grantor agencies and pass-through entities and is not intended to be and should not be used by
anyone other than these specified parties.
~~
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~~ ~-~~
LarsonAllen LLP
St. Cloud, Minnesota
March 13, 2009
(79)
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CITY OF ST. JOSEPH, MINNESOTA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
YEAR ENDED DECEMDER 3'l, 2C08
MATERIAL WEAKNESS -FINANCIAL REPORTING:
06-01 SEGREGATION OF DUTIES
Criteria: The City Council should constantly be aware of the need to have adequate segregation
of duties regarding the processing of transactions for the City. In addition, City management
should be aware that the concentration of duties and responsibilities in one or a very few
individuals is not desirable from an internal control perspective.
Condition: Adequate segregation of the accounting functions necessary to ensure adequate
internal accounting control, is not in place. Some of the areas where adequate segregation of
duties is not in place are: utility billings, general receipts, capital assets, payroll, and general
disbursements.
Cause: The City has a limited number of personnel within the business management office.
Effect: The lack of adequate segregation of duties can result in incorrect financial information,
failure to detect misstatements or misappropriations, and the City's procedures not being
adhered to.
Recommendation: We recommend the City Council be aware of the lack of segregation of
duties within the accounting functions and provide oversight to ensure the internal control
policies and procedures are being implemented by City staff and periodically review applicable
responsibilities and reassign them, as feasible.
PREVIOUSLY REPORTED {TEMS RESOLVED:
07-01 PRIOR PERIOD ADJUSTMENTS
Prior period adjustments were proposed by the client to correct previously issued financial
statements.
Resolution:
No similar issues noted during the current audit.
06-02 PREPARATION OF FINANCIAL STATEMENTS
The City did not have a complete process in place for the preparation of the financial
statements.
Resolution:
The City has undertaken additional procedures regarding the preparation of the financial
statements and related processes.
Aso)
CITY OF ST. JOSEPH, MINNESOTA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS (CONTINUED)
YEAR ENDED DECEMDER 3'I, 200II
SIGNIFICANT DEFICIENCY -FINANCIAL REPORTING:
06-03 .AUDIT ADJUSTMENTS
Criteria: The City Council is responsible for establishing and maintaining internal controls for the
proper recording of the Citys accounting transactions, including account coding and reporting of
accruals and net assets.
Condition: As part of the audit, we proposed audit adjustments for accruals and
reclassifications.
Cause: Not known.
Effect: The design of the internal controls over recording transactions and year-end accruals
limits the ability of the City to provide accurate accrual basis financial information.
Recommendation: We recommend City management and financial personnel continue to
increase their awareness and knowledge of all procedures and processes involved in recording
transactions, accruals, and reclassifications and develop internal control policies to ensure
proper recording of these items.
LEGAL COMPLIANCE FINDINGS:
PREVIOUSLY REPORTED ITEMS RESOLVED
07-02 OUT OF STATE TRAVEL POLICY
The City did not have a formally approved out of state travel policy that met statutory
requirements.
Resolution:
The City has adopted an out of state travel policy in accordance with state statutes.
07-03 COLLATERAL ASSIGNMENT AGREEMENT
The City's collateral assignment agreement did not require the release of collateral upon default.
Resolution:
No similar issues noted during the current audit.
07-04 DELEGATION OF AUTHORITY FOR PAYING CERTAIN CLAIMS
The City Council had not formally adopted a resolution delegating the authority to pay certain
claims to the Administrator and Finance Director.
Resolution:
A formal resolution has been passed by the City Council delegating the authority to pay certain
claims to the Administrator and Finance Director.
(81)
CITY OF ST. JOSEPH, MINNESOTA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS (CONTINUED)
YEAR ENDED DECEIVIDER J'I, 2008
LEGAL COMPLIANCE FINDINGS (CONTINUED):
PREVIOUSLY REPORTED ITEMS RESOLVED (CONTINUED)
07-05 POLICY FOR ELECTRONIC PAYMENT
The City did not have a formal electronic
§471.381.
payment policy as required by Minnesota Statute
Resolution:
The City has adopted an electronic payment transfer policy in accordance with state statutes.
(82)
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REPORT ON MINNESOTA LEGAL COMPLIANCE
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, 2008, and have issued our report thereon dated
March 13, 2009,
We conducted our audit in accordance with U.S. generally accepted auditing standards and the
provisions of the Audit Guide for Local Government, promulgated by the State Auditor pursuant to
Minnesota Statute §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, miscellaneous 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 complied with the material terms and
conditions of applicable legal provisions.
This report is intended solely for the information and use of management, City Council, and the Office of
the State A~!ditr,r of Minnesota and is not intended to be and should not be used by anyone other than
those specified parties.
_~ _ ~
LarsanAllen LLP
St. Cloud, Minnesota
March 13, 2009
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R~?~ _ ,~ ~ LarsonAllen LLP is a member of Nexia International, a worldwide network of independent accounting and consulting firms.
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