HomeMy WebLinkAbout2009 Audit ReportCITY OF ST. JOSEPH
Stearns County, Minnesota
Audited Financial Statements
For the Fiscal Year Ended December 31, 2009
CITY OF ST. JOSEPH
Stearns County, Minnesota
TABLE OF CONTENTS
ELECTED OFFICIALS AND ADMINISTRATION ............................ ............................... 1
INDEPENDENT AUDITOR'S REPORT .............................................. ............................... 2
MANAGEMENT'S DISCUSSION AND ANALYSIS .......................... ............................... 5
BASIC FINANCIAL STATEMENTS:
Government -Wide Financial Statements:
Statementof Net Assets ........................................................................ ...............................
24
Statementof Activities .......................................................................... ...............................
25
Fund Financial Statements:
Balance Sheet — Governmental Funds .................................................. ...............................
26
Reconciliation of the Balance Sheet to the Statement of Net Assets —
GovernmentalFunds ......................................................................... ...............................
28
Reconciliation of the Statement of Net Assets — Business -Type Activities .......................
29
Statement of Revenues, Expenditures and Changes in Fund Balances —
GovernmentalFunds ......................................................................... ...............................
30
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances to the Statement of Activities — Governmental Funds ............................
32
Reconciliation of the Statement of Revenues, Expenses and Changes in Net
Assets — Business -Type Activities .................................................... ...............................
33
Statement of Revenues, Expenditures and Changes in Fund Balances — Budget
andActual — General Fund ............................................................... ...............................
34
Statement of Net Assets — Proprietary Funds ...................................... ...............................
35
Statement of Revenues, Expenses and Changes in Fund Net Assets —
ProprietaryFunds .............................................................................. ...............................
36
Statement of Cash Flows — Proprietary Funds ..................................... ...............................
37
Notes to the Financial Statements .............................................................. ...............................
39
REQUIRED SUPPLEMENTARY INFORMATION:
Schedule of Funding Progress — Other Post Employment Benefits ........... ............................... 68
SUPPLEMENTARY INFORMATION:
Combining Balance Sheet — Nonmajor Governmental Funds ................... ............................... 70
Combining Statement of Revenues, Expenditures and Changes in Fund Balances —
Nonmajor Governmental Funds .............................................................. ............................... 76
Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and
Actual — Governmental Funds ................................................................ ............................... 82
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ............................ 85
CITY OF ST. JOSEPH
Stearns County, Minnesota
TABLE OF CONTENTS
REPORT ON LEGAL COMPLIANCE ................................................ ............................... 87
SCHEDULE OF FINDINGS AND RESPONSES ON LEGAL
COMPLIANCE AND INTERNAL CONTROL ................................ ............................... 88
CITY OF ST. JOSEPH
Stearns County, Minnesota
ELECTED OFFICIALS AND ADMINISTRATION
December 31, 2009
Elected Officials Position Term Expires
Alan Rassier Mayor January 2011
Steve Frank Council Member January 2011
Dale Wick Council Member January 2011
Robert Loso Council Member January 2013
Renee Symanietz Council Member January 2013
Administration
Judy Weyrens City Administrator Appointed
Lori Bartlett Finance Director Appointed
1
KDV
Expert advice. When you need it.s"
INDEPENDENT AUDITOR'S REPORT
April 23, 2010
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, 2009, which
collectively comprise the City's basic financial statements as listed in the Table of Contents.
These financial statements are the responsibility of the City's management. Our responsibility is
to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with U.S. generally accepted auditing standards and the
standards applicable to financial audits contained in Government Auditing Standards, issued by
the Comptroller General of the United States. Those Standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe 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, 2009, and the respective changes in financial position and cash flows, where
applicable, thereof, and the respective budgetary comparison for the General Fund for the year
then ended in conformity with U.S. generally accepted accounting principles.
As discussed in Note 10 to the financial statements, the City has implemented Governmental
Accounting Standards Board (GASB) Statement No. 45 Accounting and Financial Reporting by
Employers for Post Employment Benefits Other than Pensions.
2
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In accordance with Government Auditing Standards, we have also issued our report dated
April 23, 2010, on our consideration of the City's internal control over financial reporting and
our tests of its compliance with certain provisions of laws, regulations, contracts and grant
agreements and other matters. The purpose of that report is to describe the scope of our testing
of internal control over financial reporting and compliance and the results of that testing and not
to provide an opinion on the internal control over financial reporting or on compliance. That
report is an integral part of an audit performed in accordance with Government Auditing
Standards and should be considered in assessing the results of our audit.
The Management's Discussion and Analysis, which follows this report letter, and the Schedule of
Funding Progress — Other Post Employment Benefits on page 68, 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 performed for the purpose of forming opinions on the financial statements that
collectively comprise the City's basic financial statements. The accompanying supplementary
information identified in the Table of Contents is presented for purposes of additional analysis
and is not a required part of the basic financial statements of the City. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the basic financial statements
taken as a whole.
be Oea4, Vim-? CO.
KERN, DEWENTER, VIERE, LTD.
St. Cloud, Minnesota
3
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
As management of the City of St. Joseph (the "City "), we offer readers of the City's financial
statements this narrative overview and analysis of the financial activities of the City for the fiscal
year ended December 31, 2009.
FINANCIAL HIGHLIGHTS
Key financial highlights for 2009 include the following:
• The assets of the City exceeded its liabilities at the close of the most recent fiscal year by
$ 33,770,566. Of this amount, $ 11,075,492 may be used to meet government's ongoing
obligations to citizens and creditors (unrestricted net assets).
• The government's total net assets decreased by $ 341,904 from 2008 to 2009. The
decrease is due to reductions of Local Government Aid (LGA), decrease in investment rate
of return and increases in emergency repair costs to the City of St. Cloud for wastewater
distribution and treatment.
• As of the close of the current fiscal year, the City's governmental funds reported combined
ending fund balances of $ 9,019,849, an increase of $ 836,681. 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
$ 1,659,565, or 69% of total General Fund expenditures. The fire department is included
in this amount and calculation. The fire department's unreserved fund balance was
$ 549,852. Excluding the fire department expenditures and fund balance, the remaining
fund balance would cover 46% of the remaining expenditures.
• The City's total long -term debt decreased by $ 2,575,900 during the current fiscal year.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City's basic financial
statements. The City's basic financial statements are comprised of three components: 1)
government -wide financial statements, 2) fund financial statements and 3) Notes to the Financial
Statements. This report also contains other supplementary 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's finances, in a manner similar
to a private- sector business.
The Statement of Net Assets presents information on all of the City'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's is improving
or deteriorating.
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
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 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 include
general government, public safety, public works, economic development, culture and recreation
and interest on long -term debt. The business -type activities of the City include water, sanitary
sewer, storm water and refuse services.
The government -wide financial statements include not only the City itself (known as the primary
government), but also a legally separate St. Joseph Economic Development Authority (EDA).
Financial information for this component unit is blended in the financial information.
The government -wide financial statements can be found on pages 24 -25 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,
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 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.
11
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
The City maintains 36 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, Crossover Refunding Bond
Fund and 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 adopts an annual appropriated budget for its General Fund. A budgetary comparison
statement has been provided for the General Fund (page 34) to demonstrate compliance with this
budget.
The basic governmental fund financial statements can be found on pages 26 -33 of this report.
Proprietary Funds. The City maintains proprietary funds that are used to report the same
functions presented as business -type activities in the government -wide financial statements. The
City uses proprietary funds to account for its water, sanitary sewer, storm water and refuse
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, refuse and storm water, all of which are considered to
be major funds of the City.
The basic proprietary fund financial statements can be found on pages 35 -37 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 39 -65 of this report.
Other Information. The combining statements referred to earlier in connection with non -major
governmental funds can be found on pages 70 -81 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, assets exceeded liabilities by $ 33,770,566 at the close of the
most recent fiscal year.
7
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
By far the largest portion of the City'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 uses these capital assets to provide
services to citizens; consequently, these assets are not available for future spending. Although
the City'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
Governmental
Activities
2009 2008
Current and Other Assets $ 12,014,559 $ 13,108,498
Capital Assets 11,749,072 12,902,154
Total Assets 23,763,631 26,010,652
Business -Type
Activities
2009 2008
$ 3,412,777 $ 3,564,798
26,541,591 27,218,250
29,954,368 30,783,048
Total
2009
2008
$ 15,427,336
$ 16,673,296
38,290,663
40,120,404
53,717,999
56,793,700
Current Liabilities
2,547,123
2,799,021
560,187
509,021
3,107,310
3,308,042
Long -Term Liabilities
9,184,882
11,331,896
7,655,241
8,041,292
16,840,123
19,373,188
Total Liabilities
11,732,005
14,130,917
8,215,428
8,550,313
19,947,433
22,681,230
NET ASSETS:
Invested in Capital Assets,
Net of Related Debt
6,227,836
5,850,722
18,551,243
18,824,249
19,786,766
19,149,771
Restricted
2,908,308
4,397,259
-
-
2,908,308
4,397,259
Unrestricted
2,895,482
1,631,754
3,187,697
3,408,486
11,075,492
10,565,440
Total Net Assets
$ 12,031,626
$ 11,879,735
$ 21,738,940
$ 22,232,735
$ 33,770,566
$ 34,112,470
An additional portion of the City's net assets (9 %) represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net assets,
$ 11,075,492, may be used to meet the City's ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City 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 governmental
and business -type activities.
The governmental activities total net asset balance grew by I% due to reducing the capital
spending and not replacing two full -time employees that terminated their employment during the
year. The City's building permit activity increased in 2009 despite the economic recession in the
United States.
There was a 2% decrease in the total net assets for the business -type activities. The decrease is
due to the City paying the City of St. Cloud for emergency repair costs of the wastewater
interceptor system and paying down the water filtration plant debt with fewer connection fees
that anticipated for the debt payments.
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
Governmental Activities. Governmental activities increased the City's total net assets by
$ 151,891. The most significant change in governmental net assets is due to the City Council
making a decision to reduce the capital spending for infrastructure and equipment and to not
replace two full -time employees that terminated employment in 2009. The governmental long-
term liabilities decreased by $ 2,147,014 in 2009. The City also benefited from an increase in
building activity in 2009 despite significant downturns in building activity in the Country.
Business -Type Activities. Business -type activities decreased the City's net assets by $ 493,795
accounting for a I% decrease in the City's total net assets. While all the proprietary funds
contributed to the decrease in net assets, the largest port of the decrease is attributable to the
Water and Sanitary Sewer Funds.
The water utility (including the Water Access Charge [WAC] Fund) decreased by $ 229,567.
The City issued debt to construct a water filtration plant in 2005 with the main revenue source
new connections or WAC fees. The City collected more connection fees than was required for
the debt payments in 2004 -2006. The carryover balance of the earlier connection fees are
covering the slower building years in 2007 -2009. The building activity increased significantly in
2009, but not to the same levels as anticipated in 2005 when the water filtration plant debt was
approved.
The sanitary sewer utility decreased (including the Sewer Access Charge [SAC] Fund) decreased
by $ 217,988. The City sanitary sewer utility consists of two operational elements. The City
operates and maintains a collection system with approximately 25 miles of gravity sewer pipe, 5
pump stations and 6 miles of force main pipe. The City pumps its wastewater to the City of
St. Cloud for treatment and disposal and, thus, leases capacity in St. Cloud's interceptor system
and at the wastewater treatment facility, known as the St. Cloud Wastewater Treatment System
( SCWTS). The City is considered a contract user and pays a monthly fee for the services
provided from the SCWTS.
In 2008, the SCWTS experienced an interceptor collapse near Beaver Trail in St. Cloud. The
collapse resulted in an examination of the interceptor system used by the St. Cloud area cities.
Several interceptors were deemed unsafe, close to collapsing or already collapsing and required
immediate emergency repairs. The City is responsible for various portions of the emergency
repair costs depending on the location of the repairs and the allocation of use by the City as
indicated in the Sewer Use Agreement with the City of St. Cloud. In 2009, the City paid
$ 72,312 for emergency interceptor repairs. The City also increased the usage of chemicals to
reduce the strength of the hydrogen sulfide in the wastewater sent to St. Cloud for treatment.
Reducing the hydrogen sulfide strength reduces the wastewater odors and prevents rapid
deterioration of the interceptors. The interceptor repair costs and additional chemical treatment
were not anticipated expenses in 2009.
0
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
The graphs and charts below and on the following pages summarize and graphically depict the
changes in net assets for the governmental and business -type activities.
CHANGE IN NET ASSETS
10
Governmental
Business -Type
Activities
Activities
Total
2009
2008
2009
2008
2009
2008
REVENUES:
Program Revenues:
Charges for Services
$ 591,174
$ 482,728
$ 1,780,938
$ 1,383,766
$ 2,372,112
$ 1,866,494
Operating Grants and
Contributions
127,935
132,058
2,005
-
129,940
132,058
Capital Grants and
Contributions
383,679
515,541
68,771
108,704
452,450
624,245
General Revenues:
Property Taxes
1,681,454
1,630,928
-
-
1,681,454
1,630,928
Tax Increments
72,592
84,975
-
72,592
84,975
Sales Tax
242,422
251,015
912
242,422
251,927
Franchise Fees
107,120
72,903
-
-
107,120
72,903
State Aids
907,456
828,687
-
-
907,456
828,687
Unrestricted Investment Earnings
348,416
331,322
132,248
156,622
480,664
487,944
Other General Revenue
-
6,101
-
55,819
61,920
Gain (Loss) on Sale of
Capital Assets
6,626
11,569
-
-
6,626
11,569
Total Revenues
4,468,874
4,347,827
1,983,962
1,705,823
6,452,836
6,053,650
EXPENSES:
General Government
575,236
669,190
-
-
575,236
669,190
Public Safety
1,412,314
1,403,672
1,412,314
1,403,672
Public Works
1,480,739
1,551,049
-
1,480,739
1,551,049
Culture and Recreation
291,046
138,272
-
291,046
138,272
Economic Development
148,726
301,347
-
148,726
301,347
Interest on Long -Term Debt
610,212
443,174
-
-
610,212
443,174
Water
-
-
1,080,122
1,441,345
1,080,122
1,441,345
Sanitary Sewer
-
733,179
1,136,399
733,179
1,136,399
Storm Water
-
-
169,185
134,612
169,185
134,612
Refuse
-
-
293,981
255,678
293,981
255,678
Total Expenses
4,518,273
4,506,704
2,276,467
2,968,034
6,794,740
7,474,738
Decrease in Net Assets before
Transfers
(49,399)
(158,877)
(292,505)
(1,262,211)
(341,904)
(1,421,088)
Transfers
201,290
229,975
(201,290)
(229,975)
Change in Net Assets
151,891
71,098
(493,795)
(1,492,186)
(341,904)
(1,421,088)
NET ASSETS:
Beginning
11,879,735
11,808,637
22,232,735
23,724,921
34,112,470
35,533,558
Ending
$ 12,031,626
$ 11,879,735
$ 21,738,940
$ 22,232,735
$ 33,770,566
$ 34,112,470
10
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
EXPENSES AND PROGRAM REVENUES — GOVERNMENTAL ACTIVITIES
$1,600,000 -
$1,400,000 -- - -
$1,200,000 -
$1,000,000 - - - - -- -
$800,000 -
$600,000
$400,000 -
$200,000
$-
■ Revenue
■Expenses
General Public Safety Public Works Culture and Economic Interest on Long -
Government Recreation Development Term Debt
REVENUES BY SOURCE — GOVERNMENTAL ACTIVITIES
General Revenues
74%
General Government
�0, Public Safety
Works
Culture and
Recreation
1%
conomlc
relopment
1%
11
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
EXPENSES AND PROGRAM REVENUES — BUSINESS -TYPE ACTIVITIES
$1,200,000
$1,000,000
$800,000
j $600,000
$400,000
$200,0 00
■Revenue
Water Sanitary Sewer Storm Water Refuse
REVENUES BY SOURCE — BUSINESS -TYPE ACTIVITIES
General Revenues
7% a► .
Refuse
14%
Storm Water
9%
Sanitary Sewer
32%
Water
/ 38%
12
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
FINANCIAL ANALYSIS OF THE CITY'S FUNDS AT THE FUND LEVEL
The financial performance of the City 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
$ 9,019,849. Revenues for the City's governmental funds were $ 6,803,468, while total
expenditures were $ 5,782,267. The excess of revenues over expenditures is due to prudent and
fiscal management of the City. The Governor's unilateral unallotment and economic conditions
led the City Council to continuously monitor the financial reports and suspend capital
expenditures and impose a hiring freeze. In fact, the City Council decided not to replace two
full -time employees who quit during year reducing the salaries and benefits expenditures.
In addition, development revenue increased in 2009 and $ 242,012 of half -cent sales tax revenue
was collected with only $ 166 expended.
A summary of financial highlights for each major governmental fund follows
General Fund
The General Fund is the chief operating fund of the City. At the end of the current fiscal year,
unreserved fund balance of the General Fund was $ 1,659,565. 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 69% of total General Fund expenditures.
Fund balance in the General Fund increased by $ 597,809 in 2009. The City was fortunate to
have significant building activity in 2009 even though the U.S. economy is in a recession partly
due to reductions in the building market. License and permit revenue increased from $ 113,911
in 2008 to $ 186,058 in 2009. The City issued 13 new home permits and 3 new commercial
permits with total project valuations of $ 7,986,247. The General Fund also had an increase in
transfers from other governmental funds. Most of the transfers were one time transfers to
reimburse the General Fund for capital project costs.
General Fund expenditures were lower than budgeted by $ 384,342. To compensate the City for
a loss of state aid, the City Council approved removing the capital expenditure budget for 2009.
Capital expenditures made in 2009 were made against the general capital outlay reserve fund.
Further, the City Council decided to not hire a half -time Community Development Director as
was budgeted; nor replace two full -time staff that quit during the year in light of the current
economic conditions of not only the local area, but the nation. Staff also agreed to a 0% cost of
living increase as a result of LGA.
13
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
The following schedule on the following page presents a summary of General Fund revenues and
expenditures.
REVENUES:
Taxes
Special Assessments
Licenses and Permits
Intergovernmental
Charges for Services
Fines and Forfeitures
Miscellaneous
Total General Fund Revenue
EXPENDITURES:
General Government
Public Safety
Public Works
Culture and Recreation
Total General Fund Expenditures
December 31,
2009
$ 1,211,735
4,735
186,058
982,565
234,991
68,059
107,753
$ 2,795,896
December 31,
2009
December 31, Increase Percent
2008 (Decrease) Change
$ 1,150,892
2,802
113,911
894,320
205,431
68,125
103,884
$ 2,539,365
December 31,
2008
$ 60,843
1,933
72,147
88,245
29,560
(66)
3,869
$ 256,531
5%
69%
63%
10%
14%
0%
4%
10%
Increase Percent
(Decrease) Change
$ 498,113
$ 601,299
$ (103,186)
(17)%
1,272,755
1,279,294
(6,539)
(1)%
430,964
391,712
39,252
10%
195,602
172,288
23,314
14%
$ 2,397,434
$ 2,444,593
$ (47,159)
(2)%
General Fund Budgetary Highlights
Over the course of the year, the City did not amend the annual operating budget. However,
revisions were made to compensate for the loss of state aid including allocating funds from
capital project funds to reimburse the General Fund for past expenditures, contracting for an
Economic Development Director versus hiring a full -time Community Development Director
and eliminating the capital outlay budget for 2009. Historically, the City has minimal budget
amendments during the budget year.
• Actual revenues were $ 6,525 more than expected due to increases in development fee
revenue and reimbursements for services performed by staff. Intergovernmental
revenues were over budget due to the Market Value Credits given to residential
homestead taxpayers. Property taxes were reduced by the Market Value Credit.
• Actual expenditures were $ 384,342 less than budget as a result of removing the 2009
capital budget and imposition of a hiring freeze.
14
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
G.O. Crossover Refunding Bonds of 2009A Debt Service Fund
This Debt Service Fund is used to pay the debt associated with the 2002 bond issue (2002 Street
Improvements). The 2009A bond was issued in April 2009 to refund the 2002 General
Obligation (G.O.) Improvement Bonds for an interest savings of $ 102,600 over the remaining
eight years of bond life. The revenue expected to be received for the 2009A Crossover
Refunding Bonds includes special assessments, property tax levies and utility rates. The current
year 2009 activity represents bond issue activity and closing out the 2002 bonds.
G.O. Improvement Bonds of 2005B Debt Service Fund
This Debt Service Fund is used to pay the debt payments from the 2005B bond issue (2005 street
improvements for Hill Street and Cloverdale). In 2009, the fund balance of this Fund decreased
$ 47,458. This Debt Service Fund is funded by property tax levies and special assessments.
Several special assessments were prepaid in earlier years reducing the special assessment
collections in future years.
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 fund balance of this Debt Service Fund increased by
$ 373,915 due to the developer prepaying the remaining special assessment balance in October
2009. The bonds are payable in full in December 2010.
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 for Jade Road, 8th Avenue and the East Side overlays). In 2009, the fund balance
of this Fund increased $ 122,418. 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 paid the delinquent assessments, along with penalties and interest, in
May 2009 and kept current on the 2009 assessment payments. The 2007A bonds have eight
years of payments remaining.
Proprietary Funds. The City'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 decreased overall. The following paragraphs provide
a brief financial overview of each major proprietary fund.
15
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
Water Enterprise Fund
The Water Fund is used to account for the operations of the City's water utility. In 2009, the
Water Fund's net assets decreased $ 108,560 due to paying down debt relating to the
construction of the water filtration plant and old water tower. The bonds are paid for with water
user fees, connection fees and trunk fees. The slow down in development in recent years has
required the use of reserved connection and trunk fees from when development was at its height.
The 2002 water debt was refunded in 2009 to reduce the interest expense over the remaining life
of the bonds. The City will save $ 20,692 in interest expense over the next seven years.
Sanitary Sewer Enterprise Fund
The Sanitary Sewer Fund is used to account for the operations of the City's sanitary sewer
utility. In 2009, the Sanitary Sewer Fund's net assets decreased $ 289,251 due to payments
made to the City of St. Cloud for emergency interceptor repairs and additional operational costs.
The Sanitary Sewer Fund also transferred $ 100,000 to the Water Fund to cover a portion of the
costs for the 2008 water radio read meter conversion. These costs were paid for with current
sewer user fees. In addition, the 2001 Sewer Bonds were refunded in 2009 to reduce the interest
charges on the remaining life of the Bonds. The City will save $ 36,274 in interest expense over
the next 12 years.
Refuse Enterprise Fund
The Refuse Fund is used to account for the contract services to provide residential refuse service
and to operate a compost area. In 2009, the Refuse Fund's net assets decreased $ 3,663. The
charges for services in the Refuse Fund increased $ 31,395 while operational expenses increased
$ 38,303. After adding investment income to the Fund, the Refuse Fund realized a surplus in
operations. In determining refuse rates anticipated investment income is added and the volatility
of the market complicates the rate calculations.
Storm Water Enterprise Fund
The Storm Water Fund is used to account for the operations of the City's storm water utility. In
2009, the Storm Water Fund's net assets decreased $ 42,577. The Storm Water Fund had an
operating loss of $ 56,580, or $ 44,371 after adding in investment income. The deficit is due to
transfers to debt service funds to cover portion of bond payments relating to storm water. A
portion of the debt is to be recovered from development fees. The Storm Water Fund has not
collected any development fees for the past two years. Storm water reserve funds are used to
complete necessary infrastructure repairs and expansion.
16
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets. The City's investment in capital assets for its governmental and business -type
activities as of December 31, 2009 amounted to $ 38,290,663 (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.
Investment in capital assets, net related debt increased $ 636,995 to $ 19,786,766. The increase
is attributable to capital asset increases in infrastructure and construction in progress for street
reconstruction projects and residential development areas. The increase is also due to reducing
the overall debt relating to the capital assets by $ 2,692,600. The City did not have any new
construction projects in 2009.
The following table is a summary of the City's capital assets.
CAPITAL ASSETS
Long -Term Debt. At the end of the current fiscal year, the City had total net bonded debt
outstanding of $ 19,191,024. Of this amount, $ 10,695,000 comprises debt backed by the full
faith and credit of the government. The remainder of the City's debt represents bonds secured by
specified revenue sources (i.e. utility and lease revenue bonds). Other long -term debt includes
notes, compensated absences payable and other post employment benefits.
An illustration of the City's long -term debt is included in the table on the following page.
17
Governmental Activities
Business -Type Activities
Total
2009
2008
2009
2008
2009
2008
Land
$ 346,258
$ 346,258
$ 377,882
$ 377,882
$ 724,140
$ 724,140
Construction in
Progress
18,045
1,576,464
39,032
2,164,358
57,077
3,740,822
Infrastructure
15,755,428
14,280,864
-
-
15,755,428
14,280,864
Buildings
2,466,309
2,466,309
8,120,415
8,149,011
10,586,724
10,615,320
Improvements
605,275
488,797
-
-
605,275
488,797
Machinery and
Equipment
2,574,856
2,609,338
623,784
615,147
3,198,640
3,224,485
Plant and Lines
-
-
22,795,547
20,666,814
22,795,549
20,666,814
Less: Accumulated
Depreciation
(10,017,099)
(8,865,876)
(5,415,069)
(4,754,962)
(15,432,168)
(13 620 838)
'
Total
$11,749,072
$12,902,154
$26,541,591
$27,218,250
$38,290,663
$40,120,404
Additional information on the City's capital
assets can be found in Note 5 on pages 51 -52
of this
report.
Total depreciation expense for 2009
was $ 1,915,240.
Long -Term Debt. At the end of the current fiscal year, the City had total net bonded debt
outstanding of $ 19,191,024. Of this amount, $ 10,695,000 comprises debt backed by the full
faith and credit of the government. The remainder of the City's debt represents bonds secured by
specified revenue sources (i.e. utility and lease revenue bonds). Other long -term debt includes
notes, compensated absences payable and other post employment benefits.
An illustration of the City's long -term debt is included in the table on the following page.
17
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
OUTSTANDING LONG -TERM DEBT
Total Governmental Activities
Business -Type Activities
General Obligation Revenue Bonds
Loans Payable
Compensated Absences Payable
Other Post Employment Benefits
Total Business -Type Activities
$ 11,562,554
2009
2008
Percent
$ 8,294,423
(4 %)
44,000
Change
Governmental Activities
107,573
89,157
21%
General Obligation Bonds
$ 1,343,654
$ 1,025,000
31%
General Obligation Special Assessment Bonds
9,394,383
11,395,000
(18 %)
General Obligation Revenue Bonds
500,000
1,095,000
(54 %)
Loans Payable
-
28,866
°
(100 / °)
Compensated Absences Payable
288,146
206,055
40%
Other Post Employment Benefits
36,371
._._.._ _ .......... . ... ____�...._..._.. _..
- _ -
100%
Total Governmental Activities
Business -Type Activities
General Obligation Revenue Bonds
Loans Payable
Compensated Absences Payable
Other Post Employment Benefits
Total Business -Type Activities
$ 11,562,554
$ 13,749,921
(16 %)
$ 7,952,987
$ 8,294,423
(4 %)
44,000
88,000
(50 %)
107,573
89,157
21%
10,232
$ 8,114,792
$ 8,471,580
(4 %)
The City refunded four debts in 2009 to take advantage of lower interest costs. The total savings
from refunding the debts will be $ 185,009 over the life of the bonds. During 2009, the City
issued the following debt:
• $ 455,000 G.O. Sewer Revenue Crossover Refunding Bonds to refund the 2001 Sewer
Revenue Bonds. Interest savings will be $ 36,274 over the remaining 12 years of
payments.
• $ 2,555,000 G.O. Improvement Crossover Refunding Bonds to refund the 2002
Improvement Bonds. Interest savings will be $ 102,600 over the remaining eight years of
payments.
• $ 495,000 G.O. Capital Improvement Plan Refunding Bonds to refund the 2003 Public
Project Revenue Bonds. Interest savings will be $ 25,443 over the remaining nine years of
payments.
• $ 425,000 G.O. Water Revenue Refunding Bonds to refund the 2002 Water Revenue
Bonds. Interest savings will be $ 20,692 over the remaining seven years of payments.
The City paid down the net bonded debt by $ 2,619,240 to end the year. In 2009, four bonds
refunded and two debts were paid in full.
18
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
The City maintained an "A" rating from Standard & Poor's (S &P) for G.O. debt and "AAA" for
the G.O. water debt in 2009. According to S &P's municipal credit analysis, the City's solid
bond rating reflects the City's strong cash and reserve balances, proximity and access to
St. Cloud's diverse employment base, and strong wealth levels with continuous property tax base
growth. The "AAA" rating on the water debt was the result of the state's credit enhancement
program backing for water utilities in the unlikely event of the City defaulting on the water debt.
Minnesota Statutes limit the amount of net G.O. debt a governmental entity may issue to 3% of
its taxable market value. Net G.O. debt is debt solely paid for, with limited exceptions, by ad
valorem taxes. The current debt limitation for the City is $ 10,089,960 which significantly
exceeds of the City's outstanding pure G.O. debt.
Additional information on the City's long -term debt can be found in Note 6 on pages 53 -57
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The City experienced residential and commercial growth, one of the largest growth areas in the
St. Cloud Metro Area.
While the housing market for newly constructed homes has significantly declined, the City
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 500+ homes. The new school opened for
the 2008 -2009 school year. In 2009, the City issued 11 building permits for new homes and 1
building permit for a 60 unit apartment complex. In early 2010, the City already issued 3
building permits for new homes.
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 and is known as the Millstream Shops and Lofts.
19
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
In 2008, the Cobom's PUD was approved which contained three commercial development sites.
The PUD is located on CSAH 75, one of the major commerce corridors in the City. CentraCare
Medical Clinic completed construction in 2009 for the first phase of a primary care medical
clinic In 2009, the remaining two parcels were also developed, with one site developed into a
7,000 square foot financial institution (Central MN Federal Credit Union) and the other site a
35,000 square foot retail/grocerty /liquor store (Coborn's Superstore). A recent market study of
the St. Joseph area indicated that the trade area of St. Joseph would increase by 150% if a
grocery store was added to the landscape of the City. It is for this reason the St. Joseph EDA,
with the approval of the City Council, approved tax abatement in the amount of $ 300,000 for the
Coborn's Superstore. The new construction in 2009 is valued at $ 8 million, with a gross tax
revenue increase of approximately $ 75,000.
In addition to the new construction, the City experienced several commercial openings in 2009
some of which include: China One Restaurant, Anne's Occasional Sales, Russell Eye Care and
Associates, North Country Auto and Trailer Sales, Wes' Auto Sales. The College of St.
Benedict added a health services clinic to campus providing urgent care to students and faculty
while at the same time providing training to students in health related fields.
The City Council has also identified an area near Interstate 94 for future commercial
development and focused on planning the infrastructure expansion and land use during 2008-
2009. Development along with this corridor is contingent upon Stearns County completing the
realignment of County Road 2. It is anticipated that construction of the street improvement will
occur in 2011 or 2012. The commerce potential at the intersection of I -94 and CR 2 is an
opportunity for the City to diversify the tax base.
The St. Joseph EDA is an active group promoting business interests within the St. Joseph
Community. The EDA continues to work with property owners to develop industrial and
commercial sites. The EDA is also working with the St. Cloud Area Economic Partnership and
the Comprehensive Economic Development Strategy (CEDS) to attract businesses from around
the country to the area and to provide opportunity for possible federal grant funding.
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 City 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 (including not filling two vacant full -time positions) and all employees received a
0% pay increase for 2009. In addition, the City removed capital budget line items and restricted
the purchase of capital items. For 2010, the hiring freeze is still in effect with a 0% COLA
increase for exempt employees and 1 % COLA for the police union. The municipal employee
union is still negotiating their 2010 contract.
20
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
The City consistently reviews the fee structures for all licenses and permits and services to
recover appropriate costs in lieu of raising property taxes.
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. Residential sewer rates
are capped at the water used for the November/December billing. 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. The
radio read system records water consumption at a higher accuracy level resulting in a higher
pumping versus billing ratio. The radio read system reduces staff time to read and record the
usage readings. The new system measures the water consumption in gallons versus cubic feet.
As stated above, the City is part of the St. Cloud Wastewater System. 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 consist of three phases — design, construction and rehabilitation. The design
phase was completed in 2009 with each city paying cash for their portion of the design;
respectively, the City paid $ 296,972 in 2008.
Late in 2009, the area cities agreed to move forward to bid the project and in January 2010, the
project was awarded to the lowest responsible bidder. As expected, the bid results were less than
the engineer's estimate with a bid of $ 43.6 million. To reduce the overhead costs, the cities
applied to the Minnesota Public Finance Authority (PFA) to fund the construction and
rehabilitation costs. The PFA agreed to finance the project with a 20 year loan with an interest
rate of 1.771%. The payments will start in 2010. The City's apportionment of the construction
and rehabilitation phase is $ 5,832,526. The payment structure for the first years will be variable
as the payments will be based on the expenditure outlay. Once the project is completed, the
annual payments will be stable. The phase two and three costs include a 5% contingency (just
under $ 2 million). If the contingency is not needed, the additional draws will not be used for the
PFA funding; therefore, the area cities will have a reduced debt payment for the PFA loan.
As part of the Wastewater Treatment System User Agreement with the City of St. Cloud, each
city is responsible for operation, repair and replacement costs for their portion of the St. Cloud
Sewer Interceptor System (SIS). The SIS includes lift stations and sewer mains. 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
for the three interceptors used by the City. In 2009, the City paid the City of St. Cloud $ 72,312
to repair the Lower Pan, Halliday Road and Waite Park Avenue interceptors. The repair costs
are paid monthly and will be paid in full in August 2010.
21
CITY OF ST. JOSEPH
Stearns County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2009
Further, St. Cloud has been in the design phase to upgrade the Tri-City Lift Station since 2008.
The City and Waite Park have been involved in the planning process since both cities utilize the
lift station. Construction for the lift station upgrade finished at the end of 2009. St. Cloud also
identified scheduled repairs on various interceptors for 2009 and 2010. The repairs were placed
on a schedule for construction and SIS phase 1 and 2 began in 2009. SIS phase 3 will begin in
2010. St. Cloud issued debt in 2009 to cover the repairs to the SIS phase 1 and 2 and the Tri-
City Lift Station. The SIS phase 3 debt will be issued in 2010. Each area city is assigned a debt
schedule to pay St. Cloud for their portion of their costs on a monthly basis. The City is
responsible for $ 981,410 principal and interest costs for SIS phase 1 and 2 and the Tri-City Lift
Station through August 2019. The estimated construction and engineering costs for SIS phase 3
is $ 164,000 for the City. Payments will begin in 2010 and continue monthly for 10 years.
All the factors were considered in preparing the City's budget and fee schedule for the 2010 and
future reporting years.
REQUESTS FOR INFORMATION
The financial report is designed to provide a general overview of the City'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, P.O. Box 668, 25 College Avenue North, St. Joseph, Minnesota 56374.
22
CITY OF ST. JOSEPH
Stearns County, Minnesota
STATEMENT OF NET ASSETS
December 31, 2009
Governmental
Business -Type
Activities
Activities
Total
ASSETS:
Cash and Investments
(Including Cash Equivalents)
$ 7,776,104
$ 2,766,095
$ 10,542,199
Property Tax Receivable
66,361
-
66,361
Accounts Receivable
46,591
389,089
435,680
Interest Receivable
54,311
19,837
74,148
Due from Other Governments
202,104
583
202,687
Notes Receivable
32,499
-
32,499
Special Assessments Receivable:
Delinquent
31,635
68,847
100,482
Deferred
3,595,291
12,678
3,607,969
Deferred Issuance Costs
209,663
155,648
365,311
Capital Assets:
Land
346,258
377,882
724,140
Construction in Progress
18,045
39,032
57,077
Improvements
605,275
-
605,275
Infrastructure
15,755,428
-
15,755,428
Buildings
2,466,309
8,120,415
10,586,724
Plant and Lines
-
22,795,547
22,795,547
Machinery and Equipment
2,574,856
623,784
3,198,640
Less Accumulated Depreciation
(10,017,099)
(5,415,069)
(15,432,168)
Capital Assets (Net of Accumulated Depreciation)
11,749,072
26,541,591
38,290,663
Total Assets
$ 23,763,631
$ 29,954,368
$ 53,717,999
LIABILITIES AND NET ASSETS:
Liabilities:
Accounts Payable
$ 69,929
$ 33,843
$ 103,772
Contracts Payable
32,672
-
32,672
Due to Other Governments
10,960
32,128
43,088
Salaries and Benefits Payable
23,479
5,401
28,880
Interest Payable
32,905
29,264
62,169
Bond Principal Payable (Net):
Payable Within One Year
2,350,000
400,000
2,750,000
Payable After One Year
8,887,543
7,552,987
16,440,530
Notes Payable:
Payable Within One Year
-
44,000
44,000
Compensated Absences Payable:
Payable Within One Year
27,178
15,551
42,729
Payable After One Year
260,968
92,022
352,990
Net Other Post Employment Benefits Obligation
36,371
10,232
46,603
Total Liabilities
11,732,005
8,215,428
19,947,433
Net Assets:
Invested in Capital Assets, Net of Related Debt
6,227,836
18,551,243
19,786,766
Restricted for:
Debt Service
2,873,507
-
2,873,507
Other Purposes
34,801
-
34,801
Unrestricted
2,895,482
3,187,697
11,075,492
Total Net Assets
12,031,626
21,738,940
33,770,566
Total Liabilities and Net Assets
$ 23,763,631
$ 29,954,368
$ 53,717,999
The Notes to the Financial Statements are an integral part of this statement.
24
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25
CITY OF ST. JOSEPH
Stearns County, Minnesota
BALANCE SHEET - GOVERNMENTAL FUNDS
December 31, 2009
ASSETS:
Cash and Investments
Taxes Receivable - Delinquent
Special Assessments Receivable:
Delinquent
Deferred
Accounts Receivable
Interest Receivable
Due from Other Funds
Due from Other Governments
Notes Receivable
Total Assets
LIABILITIES AND FUND BALANCES:
Liabilities:
Accounts Payable
Contracts Payable
Due to Other Funds
Due to Other Governments
Salaries and Benefits Payable
Deferred Revenue
Total Liabilities
Fund Balances:
Unreserved, Reported in:
General Fund - Designated
General Fund - Undesignated
Special Revenue - Designated
Special Revenue - Undesignated
Debt Service - Designated
Capital Projects - Designated
Total Fund Balances
Debt Service
42
G.O.
23,461
33,522
Crossover
G.O.
General Fund
Refunding
Improvement
(101, 105,
Bonds of
Bonds of
108)
2009A (318)
2005B (333)
4,000
$ 1,661,192
$ 578,355
$ 551,249
43,805
2,319
630
42
5,111
23,461
33,522
879,158
629,411
46,591
-
_
9,937
4,595
4,336
40,507
1,667
1,248
4,000
$ 1,839,596
$ 1,471,205
$ 1,210,335
$ 64,223
10,960
23,479
81,369 886,588 653,502
180,031 886,588 653,502
1,376,592
282,973
584,617 556,833
1,659,565 584,617 556,833
Total Liabilities and
Fund Balances $ 1,839,596 $ 1,471,205 $ 1,210,335
The Notes to the Financial Statements are an integral part of this statement. 26
Debt Service
G.O.
G.O.
Improvement
Improvement
Other
Total
Bonds of
Bonds of
Governmental
Governmental
2005C (335)
2007A (341)
Funds
Funds
$ 943,001
$ 486,637
$ 4,623,592
$ 8,844,026
2,029
1,032
16,546
66,361
-
286
2,735
31,635
-
1,226,169
827,031
3,595,291
-
-
-
46,591
9,067
6,763
27,970
62,668
-
-
49,000
49,000
10,991
3,943
143,748
202,104
-
-
28,499
32,499
$ 965,088
$ 1,724,830
$ 5,719,121
$ 12,930,175
5,706 $ 69,929
32,672 32,672
49,000 49,000
- 10,960
- 23,479
2,029 1,227,487 873,311 3,724,286
2,029 1,227,487 960,689 3,910,326
1,376,592
- 282,973
9,127 9,127
- - 1,075,813 1,075,813
963,059 497,343 1,680,955 4,282,807
- - 1,992,537 1,992,537
963,059 497,343 4,758,432 9,019,849
$ 965,088 $ 1,724,830 $ 5,719,121 $ 12,930,175
27
CITY OF ST. JOSEPH
Stearns County, Minnesota
RECONCILIATION OF THE BALANCE SHEET TO
THE STATEMENT OF NET ASSETS - GOVERNMENTAL FUNDS
December 31, 2009
Total Fund Balances - Governmental Funds $ 9,019,849
Amounts reported for governmental activities in the Statement of Net Assets
are different because:
Capital assets used in governmental activities are not current financial resources
and, therefore, are not reported as assets in governmental funds.
Cost of Capital Assets 21,766 171
Less Accumulated Depreciation (10,017,099)
Long -term liabilities, including bonds payable, are not due and payable in
the current period and, therefore, are not reported as liabilities in the funds.
Long -term liabilities at year -end consist of:
Bond Principal Payable, Net of premiums and discounts (11,237,543)
Deferred Issuance Costs 209,663
Compensated Absences Payable (288,146)
Net Other Post Employment Benefits Obligation (36,371)
Delinquent receivables will be collected in subsequent years, but are not
available soon enough to pay for the current period's expenditures and,
therefore, are deferred in the funds.
Property Taxes 66,361
Special Assessments 31,635
Other long -term assets are not available to pay for current expenditures and,
therefore, are deferred in the funds.
Deferred Special Assessments 3,595,291
Notes Receivable 30,999
The Water Access Capital Project Fund is proprietary in nature and, therefore,
included in the business -type activities in the Statement of Net Assets. (395,019)
The Sewer Access Capital Project Fund is proprietary in nature and, therefore,
included in the business -type activities in the Statement of Net Assets. (681,260)
Governmental funds do not report a liability for accrued interest
due and payable. (32,905)
Total Net Assets - Governmental Activities $ 12,031,626
The Notes to the Financial Statements are an integral part of this statement. 28
CITY OF ST. JOSEPH
Stearns County, Minnesota
RECONCILIATION OF THE STATEMENT
OF NET ASSETS - BUSINESS -TYPE ACTIVITIES
December 31, 2009
Total Net Assets - Proprietary Funds $ 20,662,661
Amounts reported for business -type activities in the Statement of Net Assets
are different because:
The Water Access Capital Project Funds is proprietary in nature and relates to water
improvements for the applicable funds. Therefore, it is included as a business -type
activity. 395,019
The Sewer Access Capital Project Funds is proprietary in nature and relates to sewer
improvements for the applicable funds. Therefore, it is included as a business -type
activity. 681,260
Total Net Assets - Business -Type Activities $ 21,738,940
The Notes to the Financial Statements are an integral part of this statement. 29
CITY OF ST. JOSEPH
Stearns County, Minnesota
STATEMENT OF REVENUES,, EXPENDITURES AND
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
For the Year Ended December 31, 2009
REVENUES:
Property Taxes
Tax Increments
Sales Taxes
Special Assessments
Franchise Fees
Licenses and Permits
Intergovernmental
Charges for Services
Fines and Forfeitures
Miscellaneous:
Investment Income
Contributions and Donations
Other
Total Revenues
EXPENDITURES:
Current:
General Government
Public Safety
Public Works
Culture and Recreation
Economic Development
Debt Service:
Principal
Interest and Other Charges
Capital Outlay:
General Government
Public Safety
Public Works
Culture and Recreation
Total Expenditures
Excess of Revenues Over
(Under) Expenditures
OTHER FINANCING SOURCES (USES):
Refunding Bonds Issued
Bond Premium
Refunding Bond Payment
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
FUND BALANCES:
Beginning of Year
End of Year
The Notes to the Financial Statements are an integral part of this statement.
57,348 16,909 27,142 53,977
19,369 - _ -
31,036 - - -
2,795,896 18,553 102,827 1,214,960
497,099 - - _
1,266,332 - - -
365,649 - - -
195,602 - - -
- 95,000 785,000
46,593 55,285 56,045
1,014
6,423 _
65,315
2,397,434 46,593 150,285 841,045
398,462 (28,040) (47,458) 373,915
227,852 612,657
(28,505) - _
199,347 612,657
597,809 584,617 (47,458) 373,915
1,061,756 - 604,291 589,144
$ 1,659,565 $ 584,617 $ 556,833 $ 963,059
30
Debt Service
G.O. Crossover
G.O.
G.O.
General Fund
Refunding
Improvement
Improvement
(101, 105,
Bonds of
Bonds of
Bonds of
108)
2009A (318)
2005B (333)
2005C (335)
$ 1,104,205
$ 1,221
$ 14,233
$ 51,377
410
-
_
_
4,735
423
60,384
1,104,612
107,120
-
_
-
186,058
-
-
_
982,565
-
1,068
4,994
234,991
68,059
57,348 16,909 27,142 53,977
19,369 - _ -
31,036 - - -
2,795,896 18,553 102,827 1,214,960
497,099 - - _
1,266,332 - - -
365,649 - - -
195,602 - - -
- 95,000 785,000
46,593 55,285 56,045
1,014
6,423 _
65,315
2,397,434 46,593 150,285 841,045
398,462 (28,040) (47,458) 373,915
227,852 612,657
(28,505) - _
199,347 612,657
597,809 584,617 (47,458) 373,915
1,061,756 - 604,291 589,144
$ 1,659,565 $ 584,617 $ 556,833 $ 963,059
30
Debt Service
G.O.
400,548
- 14,253
Improvement
Other
Total
Bonds of
Governmental
Governmental
2007A (34 1)
Funds
Funds
$ 32,896
$ 484,259
$ 1,688,191
-
72,592
72,592
-
242,012
242,422
602,858
432,193
2,205,205
-
-
107,120
-
-
186,058
11,465
37,191
1,037,283
-
495,101
730,092
68,059
41,413 203,759
400,548
- 14,253
33,622
- 1,240
32,276
688,632 1,982,600
6,803,468
497,099
- - 1,266,332
46,987 412,636
11,065 206,667
148,406 148,406
505,000
1,033,866
2,418,866
95,289
402,053
655,265
-
14,010
15,024
-
1,329
7,752
-
82,636
147,951
-
6,269
6,269
600,289
1,746,621
5,782,267
88,343
235,979
1,021,201
3,050,000 3,050,000
43,983 43,983
- (2,980,000) (2,980,000)
34,075 218,699 1,093,283
- (1,363,281) (1,391,786)
34,075 (1,030,599) (184,520)
122,418 (794,620) 836,681
374,925 5,553,052 8,183,168
$ 497,343 $ 4,758,432 $ 9,019,849
31
CITY OF ST. JOSEPH
Stearns County, Minnesota
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES TO THE STATEMENT
OF ACTIVITIES - GOVERNMENTAL FUNDS
For the Year Ended December 31, 2009
Total Net Change in Fund Balances - Governmental Funds $ 836,681
Amounts reported for governmental activities in the Statement of Activities are different because:
Capital outlays are reported in governmental funds as expenditures. However, in the
Statement of Activities, the cost of those assets is allocated over the estimated useful lives
as depreciation expense.
Capital Outlays
63,295
Capital Contributions
2,559
Depreciation Expense
(1,222,155)
Gain on Disposal
6,626
Transferred to Proprietary Funds
(3,407)
Principal payments on long -term debt are recognized as expenditures in the governmental
funds but as an increase in net assets in the Statement of Activities.
2,418,866
Bonds were refunded during the year. The amount paid off with the new funding is reported in
the governmental funds as a use of financing. However, the payments are not expenditures
in the Statement of Activities, but rather a reduction in long -term liabilities in the Statement
of Net Assets.
2,980,000
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.
Accrued interest payable
9,823
Amortization of bond discounts, premiums and issuance charges
(51,421)
Proceeds from long -term debt are recognized as an other financing source in the governmental
funds but as a decrease in net assets in the Statement of Activities.
(3,050,000)
The governmental funds report the effect of issuance costs, premiums, discounts and
similar items when debt is first issued, whereas these amounts are deferred and amortized
in the Statement of Activities.
42,668
Compensated absences and other post employment benefit payments are recognized as paid in the
governmental funds but recognized as the expense is incurred in the Statement of Activities.
(88,052)
Delinquent receivables will be collected in subsequent years, but are not available soon enough
to pay for the current period's expenditures and, therefore, are not revenues in the funds.
Delinquent Special Assessments
(261,552)
Delinquent Property Taxes
(6,737)
Certain revenues in the Statement of Activities that do not provide current financial resources
are not reported as revenues in the funds.
Deferred Special Assessments
(1,599,547)
Notes Receivable
24,500
The Water Access Capital Project Fund is proprietary in nature and, therefore, is reported
121,007
with business -type activites.
The Sewer Access Capital Project Fund is proprietary in nature and, therefore, is reported (71,263)
with business -type activities.
Change in Net Assets - Governmental Activities $ 151,891
The Notes to the Financial Statements are an integral part of this statement. 32
CITY OF ST. JOSEPH
Stearns County, Minnesota
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS - BUSINESS -TYPE ACTIVITIES
For the Year Ended December 31, 2009
Total Net Change in Fund Net Assets - Proprietary Funds $ (444,051)
Amounts reported for business -type activities in the Statement of Activities
are different because:
Recognized current year activity from the Water Access Capital Project Fund
with the business -type activities. (121,007)
Recognized current year activity from the Sewer Access Capital Project Fund
with the business -type activities. 71,263
Change in Net Assets - Business -Type Activities $ (493,795)
The Notes to the Financial Statements are an integral part of this statement. 33
CITY OF ST. JOSEPH
Stearns County, Minnesota
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL FUND
For the Year Ended December 31, 2009
REVENUES:
Property Taxes
Sales Taxes
Special Assessments
Franchise Fees
Licenses and Permits
Intergovernmental
Charges for Services
Fines and Forfeitures
Miscellaneous Revenues:
Investment Income
Contributions and Donations
Other
Total Revenues
EXPENDITURES:
Current:
General Government
Public Safety
Public Works
Culture and Recreation
Capital Outlay:
General Government
Public Safety
Public Works
Culture and Recreation
Total Expenditures
Excess of Revenues
Over Expenditures
OTHER FINANCING SOURCES (USES):
Sale of Property
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
FUND BALANCES:
Beginning of Year
End of Year
Original and
Variance with
Final
Actual
Final Budget -
Budget
Amounts
Over (Under)
$ 1,179,551
$ 1,104,205
$ (75,346)
125
410
285
1,500
4,735
3,235
102,200
107,120
4,920
169,700
186,058
16,358
965,745
982,565
16,820
222,100
234,991
12,891
73,500
68,059
(5,441)
44,000
57,348
13,348
26,100
19,369
(6,731)
4,850
31,036
26,186
2,789,371
2,795,896
6,525
681,255
497,099
(184,156)
1,337,280
1,266,332
(70,948)
357,535
365,649
8,114
194,986
195,602
616
7,000
1,014
(5,986)
60,120
6,423
(53,697)
90,850
65,315
(25,535)
52,750
-
(52,750)
2,781,776
2,397,434
(384,342)
7,595
398,462
390,867
250
-
(250)
14,000
227,852
213,852
(42,010)
(28,505)
13,505
(27,760)
199,347
227,107
$ (20,165) 597,809 $ 617,974
1,061,756
$ 1,659,565
The Notes to the Financial Statements are an integral part of this statement. 34
CITY OF ST. JOSEPH
Stearns County, Minnesota
STATEMENT OF NET ASSETS - PROPRIETARY FUNDS
December 31, 2009
Sanitary Sewer
Storm Water
Water (60 1)
(602)
Refuse (603)
(651)
Total
ASSETS:
Current Assets:
Cash and Investments
$ 568,939
$ 592,582
$ 263,500
$ 273,152
$ 1,698,173
Special Assessments Receivable:
Delinquent
117
15
154
68,561
68,847
Deferred
11,324
509
249
596
12,678
Accounts Receivable
72,963
233,362
60,526
22,238
389,089
Interest Receivable
4,120
3,942
2,037
1,381
11,480
Due from Other Governments
-
-
-
583
583
Total Current Assets
657,463
830,410
326,466
366,511
2,180,850
Noncurrent Assets:
Deferred Issuance Costs
145,127
10,521
-
-
155,648
Capital Assets:
Land
372,941
4,941
-
-
377,882
Buildings
7,502,432
617,983
-
-
8,120,415
Plants and Lines
8,873,800
9,231,493
-
4,690,254
22,795,547
Machinery and Equipment
185,403
436,430
-
1,951
623,784
Construction in Progress
39,032
-
-
-
39,032
Total Capital Assets
16,973,608
10,290,847
-
4,692,205
31,956,660
Less Accumulated Depreciation
(2,145,367)
(2,625,685)
-
(644,017)
(5,415,069)
Net Capital Assets
14,828,241
7,665,162
4,048,188
26,541,591
Total Noncurrent Assets
14,973,368
7,675,683
-
4,048,188
26,697,239
Total Assets
$ 15,630,831
$ 8,506,093
$ 326,466
$ 4,414,699
$ 28,878,089
LIABILITIES AND NET ASSETS:
Current Liabilities:
Accounts Payable
$ 8,338
$ 4,313
$ 21,174
$ 18
$ 33,843
Salaries and Benefits Payable
2,494
2,121
443
343
5,401
Interest Payable
26,597
2,667
-
-
29,264
Due to Other Governments
1,843
27,546
2,739
-
32,128
Long -Term Liabilities Due Within One Year
415,887
41,887
1,114
663
459,551
Total Current Liabilities
455,159
78,534
25,470
1,024
560,187
Noncurrent Liabilities:
Compensated Absences
46,450
46,450
8,981
5,692
107,573
Notes Payable
44,000
-
-
-
44,000
Bonds Payable, Net
7,494,050
458,937
-
-
7,952,987
Net Other Post Employment Benefits Obligation
4,964
4,052
608
608
10,232
Less Amounts Due Within One Year
(415,887)
(41,887)
(1,114)
(663)
(459,551)
Total Noncurrent Liabilities
7,173,577
467,552
8,475
5,637
7,655,241
Total Liabilities
7,628,736
546,086
33,945
6,661
8,215,428
Net Assets:
Investment in Capital Assets, Net
Related Debt
7,296,830
7,206,225
-
4,048,188
18,551,243
Unrestricted
705,265
753,782
292,521
359,850
2,111,418
Total Net Assets
8,002,095
7,960,007
292,521
4,408,038
20,662,661
Total Liabilities and Net Assets
$ 15,630,831
$ 8,506,093
$ 326,466
$ 4,414,699
$ 28,878,089
The Notes to the Financial Statements are an integral part of this statement.
35
CITY OF ST. JOSEPH
Stearns County, Minnesota
STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN NET ASSETS - PROPRIETARY FUNDS
For the Year Ended December 31, 2009
OPERATING REVENUES:
Charges for Services
OPERATING EXPENSES:
Wages and Salaries
Sewer Use Rental
Materials and Supplies
Repairs and Maintenance
Professional Services
Insurance
Utilities
Depreciation
Contracted Services
Miscellaneous
Total Operating Expenses
Operating Loss
NONOPERATING REVENUES
(EXPENSES):
Investment Income
Special Assessments
Loss on Disposal of Asset
Interest Expense
Amortization of Bond Premium
Amortization of Bond Costs
Other Income
Total Nonoperating Revenues
(Expenses)
Income (Loss) before Capital
Contributions and Transfers
Capital Contributions
Transfers In
Transfers Out
Change in Net Assets
27,431
Sanitary
12,304
Storm Water
80,116
Water (60 1)
Sewer (602)
Refuse (603)
(651)
Total
(6,148)
-
-
$ 428,631
$ 473,356
$ 284,231
$ 112,605
$ 1,298,823
-
(351,991)
7,081
163,192
133,942
43,748
40,447
381,329
-
216,809
-
-
216,809
51,438
14,369
2,497
1,284
69,588
33,187
17,639
-
20,560
71,386
24,286
36,697
2,637
7,501
71,121
15,802
5,865
-
-
21,667
63,139
17,450
566
-
81,155
387,607
207,683
-
97,795
693,085
-
-
243,816
-
243,816
6,141
1,294
717
1,598
9,750
744,792
651,748
293,981
169,185
1,859,706
(316,161)
(178,392)
(9,750)
(56,580)
(560,883)
27,431
28,172
12,304
12,209
80,116
350
602
493
69,331
70,776
(6,148)
-
-
-
(6,148)
(318,262)
(33,729)
-
-
(351,991)
7,081
427
-
-
7,508
(18,001)
(1,142)
-
-
(19,143)
31,043
2,611
150
-
33,804
(276,506)
(3,059)
12,947
81,540
(185,078
(592,667)
(181,451)
3,197
24,960
(745,961)
2,207
-
-
1,200
3,407
536,900
47,200
-
97
584,197
(55,000)
(155,000)
(6,860)
(68,834)
(285,694)
(108,560)
(289,251)
(3,663)
(42,577)
(444,051)
NET ASSETS:
Beginning of Year 8,110,655 8,249,258 296,184 4,450,615 21,106,712
End of Year $ 8,002,095 $ 7,960,007 $ 292,521 $ 4,408,038 $ 20,662,661
The Notes to the Financial Statements are an integral part of this statement. 36
CITY OF ST. JOSEPH
Stearns County, Minnesota
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
24,927
25,800
10,779
For the Year Ended December 31, 2009
72,971
Net Change in Cash and Cash Equivalents
(71,629)
27,742
(9,670)
Sanitary Sewer
(43,922)
Storm Water
Water (60 1)
(602)
Refuse (603)
(651)
Total
CASH FLOWS - OPERATING ACTIVITIES:
273,170
263,517
1,742,095
End of Year
$ 568,939
Receipts from Customers and Users
$ 457,319
$ 573,765
$ 274,633
$ 136,753
$ 1,442,470
Payments to Suppliers
(188,912)
(294,834)
(247,148)
(31,612)
(762,506)
Payments to Employees
(149,697)
(121,227)
(42,255)
(39,191)
(352,370)
Net Cash Flows - Operating Activities
118,710
157,704
(14,770)
65,950
327,594
CASH FLOWS - NONCAPITAL FINANCING
$ (9,750)
$ (56,580)
$ (560,883)
Adjustments to Reconcile Operating Loss
ACTIVITIES:
to Net Cash Flows - Operating Activities:
Other Miscellaneous Receipts
32,618
3,131
1,181
957
37,887
Transfer from Other Funds
536,900
47,200
-
97
584,197
Transfer to Other Funds
(55,000)
(155,000)
(6,860)
(68,834)
(285,694)
Net Cash Flows - Noncapital Financing
514,518
(104,669)
(5,679)
(67,780)
336,390
Activities
-
(583)
(583)
Accounts Payable
3,703
CASH FLOWS - CAPITAL AND RELATED
3,516
(669)
4,662
Due to Other Governmental Units
1,378
FINANCING ACTIVITIES:
(431)
-
18,124
Salaries Payable
180
Principal Paid on Debt
(374,000)
( 10,000)
-
-
(384,000)
Interest Paid on Debt
(337,074)
(40,239)
-
-
(377,313)
Special Assessments
(397)
-
-
-
(397)
Acquisition of Capital Assets
(18,313)
(854)
-
-
(19,167)
Net Cash Flows - Capital and Related
(729,784)
(51,093)
-
-
(780,877)
Financing Activitis
$ (14,770)
$ 65,950
$ 327.594
Activitities
CASH FLOWS - INVESTING ACTIVITIES:
Interest and Dividends Received
24,927
25,800
10,779
11,465
72,971
Net Change in Cash and Cash Equivalents
(71,629)
27,742
(9,670)
9,635
(43,922)
CASH AND CASH EQUIVALENTS:
Beginning of Year
640,568
564,840
273,170
263,517
1,742,095
End of Year
$ 568,939
$ 592,582
$ 263,500
$ 273,152
$ 1,698,173
RECONCILIATION OF OPERATING
LOSS TO NET CASH FLOWS -
OPERATING ACTIVITIES:
Operating Loss
$ (316,161)
$ (178,392)
$ (9,750)
$ (56,580)
$ (560,883)
Adjustments to Reconcile Operating Loss
to Net Cash Flows - Operating Activities:
Depreciation Expense
387,607
207,683
-
97,795
693,085
Accounts Receivable
28,688
100,409
(9,598)
(1,269)
118,230
Due from Other Funds
-
-
-
26,000
26,000
Due from Other Governments
-
-
-
(583)
(583)
Accounts Payable
3,703
(1,888)
3,516
(669)
4,662
Due to Other Governmental Units
1,378
17,177
(431)
-
18,124
Salaries Payable
180
313
(107)
(75)
311
Compensated Absences Payable
8,351
8,350
992
723
18,416
Net Other Post Employment Benefits
4,964
4,052
608
608
10,232
Obligation
Total Adjustments
434,871
336,096
(5,020)
122,530
888,477
Net Cash Flows - Operating
$ 118,710
$ 157,704
$ (14,770)
$ 65,950
$ 327.594
Activitities
NONCASH CAPITAL ACTIVITIES:
Capital Contributions
_$ 2207 ,
$
$
$ 1,200
$ 3.407
The Notes to the Financial Statements are an integral
part of this statement.
37
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The City of St. Joseph is a statutory city governed by an elected mayor and four council
members. The accompanying financial statements present the government entities for which the
government is considered to be financially accountable.
The financial statements present the City and its component units. The City includes all funds,
account groups, organizations, institutions, agencies, departments and offices that are not legally
separate from such. Component units are legally separate organizations for which the elected
officials of the City are financially accountable and are included within the basic financial
statements of the City because of the significance of their operational or financial relationships
with the City.
The City is considered financially accountable for a component unit if it appoints a voting
majority of the organization's governing body and it is able to impose its will on the organization
by significantly influencing the programs, projects, activities or level of services performed or
provided by the organization, or there is a potential for the organization to provide specific
financial benefits to or impose specific financial burdens on, the City.
As a result of applying the component unit definition criteria above, certain organizations have
been defined and are presented in this report as follows:
Blended Component Unit — Reported as if they were part of the City.
Joint Ventures — The relationship of the City with the entity is disclosed.
For the categories above, the specific entities are identified as follows:
1. 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 a 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 St. Joseph EDA is
presented as the Economic Development Authority Special Revenue Fund, the City Hall
General Obligation (G.O.) EDA Refunding Bonds of 2005A Debt Service Fund and the
Maintenance Facility G.O. EDA Revenue Bonds of 2003A Debt Service Fund. Separate
financial statements are not prepared for the St. Joseph EDA.
39
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity (Continued)
2. Joint Venture
Central Minnesota Major Crime Investigation Unit is a group of local law 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 2009, the City
contributed $ 3,496 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.
B. Government -Wide and Fund Financial Statements
The government -wide financial statements (i.e., the Statement of Net Assets and the Statement of
Activities) report information on all of the nonfiduciary activities of the City. Governmental
activities, which normally are supported by taxes and intergovernmental revenues, are reported
separately from business -type activities, which rely to a significant extent on fees and charges for
support.
The Statement of Activities demonstrates the degree to which the direct expenses of a given
function or segment is offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Interest on general long -term debt is considered
an indirect expense and is reported separately in the Statement of Activities. Program revenues
include 1) charges to customers or applicants who purchase, use or directly benefit from goods,
services or privileges provided by a given function or segment and 2) grants and contributions
that are restricted to meeting the operational or capital requirements of a particular function or
segment. Taxes and other items not properly included among program revenues are reported
instead as general revenues. Internally dedicated revenues are reported as general revenues
rather than program revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major
individual governmental funds and major individual enterprise funds are reported as separate
columns in the fund financial statements.
40
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund financial
statements. Revenues are recorded when earned and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues
in the year for which they are levied. Grants and similar items are recognized as revenue as soon
as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the City considers revenues to be available if they are collected
within 60 days of the end of the current fiscal period. Expenditures generally are recorded when
a liability is incurred, as under accrual accounting. However, debt service expenditures, as well
as expenditures related to compensated absences and claims and judgments, are recorded only
when payment is due.
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 of 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 City.
Description of Funds:
Major Governmental Funds:
General Fund — This Fund is the City's primary operating fund. It accounts for all financial
resources of the general City, except those required to be accounted for in another fund.
G.O. Crossover Refunding Bonds of 2009A 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 2005B 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 Debt Service Fund — This Fund accounts for the
resources accumulated and payments made for principal and interest on this bond issue.
41
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
(Continued)
Description of Funds: (Continued)
Proprietary Funds:
Water Fund — This Fund accounts for the operations of the City's water utility.
Sanitary Sewer Fund — This Fund accounts for the operations of the City's sanitary sewer
utility.
Refuse Fund — This Fund accounts for the operations of the City's refuse utility.
Storm Water Fund — This Fund accounts for the operations of the City's storm water utility.
Private - sector standards of accounting and financial reporting issued prior to December 1, 1989,
generally are followed in both the government -wide and proprietary fund financial statements to
the extent that those standards do not conflict with or contradict guidance of the Governmental
Accounting Standards Board (GASB). Governments also have the option of following
subsequent private - sector guidance for their business -type activities and enterprise funds, subject
to this same limitation. The City has elected not to follow subsequent private - sector guidance.
As a general rule, the effect of interfund activity has been eliminated from the government -
wide financial statements. Exceptions to this general rule are charges between the City's
sanitary sewer function and various other functions of the City. Elimination of these charges
would distort the direct costs and program revenues reported for the various functions
concerned.
Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund's principal ongoing operations. The
principal operating revenues of the Water Enterprise, Sanitary Sewer Enterprise, Refuse
Enterprise and Storm Water Enterprise Funds are charges to customers for sales and services.
Operating expenses for enterprise funds include the cost of sales and services, administrative
expenses and depreciation on capital assets. All revenues and expenses not meeting this
definition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City's policy to use
restricted resources first, then unrestricted resources as they are needed.
42
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity
1. Cash and Investments
The City's cash and cash equivalents are considered to be cash on hand, deposits and highly
liquid debt instruments purchased with original maturities of three months or less from the
date of acquisition. Investments are stated at fair value.
Minnesota Statutes require all deposits made by cities with financial institutions are
collateralized in an amount equal to 110% of deposits in excess of Federal Deposit Insurance
Corporation (FDIC) insurance.
Minnesota Statutes authorizes the City to invest in obligations 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 then 270 days and in the
Minnesota Municipal Investment Pool.
Custodial Credit Risk — Deposits: In the case of deposits, this is the risk that in the event of a
bank failure, the City's deposits may not be returned to it. The City has an investment policy
in place to address custodial credit risk for deposits, stating they will obtain collateral or bond
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.
Credit Risk: Credit risk is the risk that an issuer or other counterparty to an investment will
not fulfill its obligations. Minnesota Statutes 118A.04 and I I8A.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.
43
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity (Continued)
1. Cash and Investments (Continued)
Interest Rate Risk: The City should try to minimize the risk that arises from over investing in
specific instruments, individual financial institutions or maturities. 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 the City will permit investments only to the extent that
there is SIPC and excess SIPC coverage available.
2. Receivables and Payables
All trade and property tax receivables are shown at a gross amount since both are assessable
to the property taxes and are collectible upon the sale of the property.
The City levies its property tax for the subsequent year during the month of December.
December 28 is the last day the City can certify a tax levy to the County Auditor for
collection the following year. Such taxes become a lien on January 1 and are recorded as
receivables by the City at that date. The property tax is recorded as revenue when it becomes
measurable and available. Stearns County is the collecting agency for the levy and remits the
collections to the City three times a year. The tax levy notice is mailed in March with the
first half of the payment due on May 15 and the second half due on October 15. Taxes not
collected as of December 31 each year are shown as delinquent taxes receivable.
The County Auditor prepares the tax list for all taxable property in the City, applying the
applicable tax rate to the tax capacity of individual properties, to arrive at the actual tax for
each property. The County Auditor also collects all special assessments, except for certain
prepayments paid directly to the City.
The County Auditor submits the list of taxes and special assessments to be collected on each
parcel of property to the County Treasurer in January of each year.
3. Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items in both government -wide and fund financial statements.
44
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity (Continued)
4. Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads,
sidewalks and similar items), are reported in the applicable governmental or business -type
activities columns in the government -wide financial statements. Capital assets are defined by
the City as assets with an initial, individual cost of more than $ 1,000 and an estimated useful
life in excess of 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.
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.
Property, plant and equipment of the City are depreciated using the straight -line method over
the following estimated useful lives:
Assets
Years
Land Improvements
5 -20
Buildings
30 -40
Building Improvements
15
Infrastructure
10 -50
Furniture and Fixtures
5 -10
Vehicles
5--20
Equipment
3 -7
Machinery
5 -7
5. Compensated Absences
The City compensates employees who leave City service in good standing for all earned,
unused vacation. Employees can accrue up to 200 hours of vacation depending on years of
service. The maximum amount of carryover from year -to -year is 100 hours or the amount of
the current vacation accrual rate. In addition, employees are compensated for unused sick
leave (up to a maximum of 720 hours) at various rates depending on the employee type and
years of service, provided the City's notice of termination policy has been complied with.
45
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity (Continued)
6. Long -Term Obligations
In the government -wide financial statements, and proprietary fund types in the fund financial
statements, long -term debt and other long -term obligations are reported as liabilities in the
applicable governmental activities, business -type activities or proprietary fund type Statement
of Net Assets.
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of debt
issued is reported as other financing sources. Issuance costs, whether or not withheld from
the actual debt proceeds received, are reported as debt service expenditures.
7. Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance for
amounts that are not available for appropriation or are legally restricted by outside parties for
use for a specific purpose. Designations of fund balance represent tentative management
plans that are subject to change.
8. Net Assets
Net assets represent the difference between assets and liabilities in the government -wide
financial statements. Net assets invested in capital assets, net of related debt consists of
capital assets, net of accumulated depreciation, reduced by the outstanding balance of any
long -term debt used to build or acquire the capital assets. A reclassification of $ 4,992,313
was made between this net asset class and unrestricted net assets on the total column in 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.
9. Use of Estimates
The preparation of the financial statements in conformity with U.S. generally accepted
accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenditures /expenses during the reporting period. Actual results could differ from those
estimates.
46
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 2 — STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Information
1. In August of each year, City staff submits to the City Council, a proposed operating
budget for the fiscal year commencing the following January 1. The operating budget
includes proposed expenditures and the means of financing them for the upcoming year.
2. Public hearings are conducted to obtain taxpayer comments.
3. The budget is legally enacted through passage of a resolution after obtaining taxpayer
comments.
4. Budgets for the General Fund, the Economic Development Authority Special Revenue
Fund and the Park Dedication Special Revenue Fund are adopted on a basis consistent
with U.S. generally accepted accounting principles.
5. 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 budgeted amounts between departments within any fund.
Management may amend budgets within a department level, so long as the total
department budget is not changed.
6. Annual appropriated budgets are adopted during the year for the General and two Special
Revenue 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 Projects Funds is accomplished through the use
of project controls and formal appropriated budgets are not adopted.
7. Budgeted amounts are as originally adopted by the City Council. Budgeted expenditure
appropriations lapse at year -end.
Encumbrances outstanding at year -end expire and outstanding purchase orders are canceled and
not reported in the financial statements.
B. Deficit Fund Balance
The following Fund had deficit fund balances at December 31, 2009:
Nonmajor Governmental Fund:
Special Revenue:
City Street Beautification
$ 48,441
These deficits will be eliminated with future revenues or transfers from other funds.
47
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 2 — STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
C. Expenditures in Excess of Appropriations
Actual expenditures exceeded budgeted amounts in the following Fund:
Final Budget
Special Revenue:
EDA $ 35,540
NOTE 3 — DEPOSITS AND INVESTMENTS
Actual
$ 53,126
Cash balances of the City's funds are combined (pooled) and invested to the extent available in
various investments authorized by Minnesota Statutes. Each fund's portion of this pool (or
pools) is displayed in the financial statements as "cash and cash equivalents" or "investments ".
For purposes of identifying risk of investing public funds, the balances and related restrictions
are summarized as follows.
A. Deposits
Custodial Credit Risk — Deposits: As of December 31, 2009, the City's bank balance was not
exposed to custodial credit risk because it was fully insured through the FDIC and fully
collateralized with securities held by the pledging financial institutions trust department or agent
and in the City's name. As of December 31, 2009, the City's deposits had a carrying value as
shown below.
Certificates of Deposit
Checking
Savings
Total
$ 2,443,608
5,455,953
1,099,160
$ 8,998,721
48
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 3 — DEPOSITS AND INVESTMENTS
B. Investments
As of December 31, 2009, the City had the following investments:
Weighted Standard &
Fair Average Poor's
Value Maturity (Years) Rating
Brokered Certificates of Deposit $ 1,296,301 2.60 N/A
Government Bonds/Notes 122,149 8.77 AAA
Brokered Money Market 124,753 N/A N/A
Total $ 1,543,203
Credit Risk: As of December 31, 2009, the City's investments were rated as in the table above.
Concentration of Credit Risk: As of December 31, 2009, the City's investments in FHLB
securities (7.9 %) and each of the 13 brokered certificates of deposit (6.3 % -6.7 %) exceeded 5% of
the City's total investment portfolio. Money market accounts are not subject to concentration of
credit risk.
C. Deposits and Investments
The following is a summary of deposits and investments as of December 31, 2009:
Deposits (Note 3.A.)
Investments (Note 3.B.)
Petty Cash
Total
$ 8,998,721
1,543,203
275
$ 10,542,199
Deposits and investments are presented in the December 31, 2009 basic financial statements as
follows:
Statement of Net Assets:
Cash and Investments
$ 10,542,199
49
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 4 — INTERFUND BALANCES AND TRANSFERS
The composition of interfund balances as of December 31, 2009 is as follows:
Receivable Fund
Other Governmental Funds
Payable Fund Amount
Other Governmental Funds $ 49,000
The due from/due to other funds balances represent borrowing to cover short fall of pledges for
the street beautification project.
The composition of interfund transfers as of December 31, 2009 is as follows:
Transfers were made to close funds and provide resources for debt payments and planning
projects.
50
Transfer In
G.O.
G.O.
Crossover
Improvement
Other
Refunding
Bonds of
Governmental
Sanitary
Storrs
General
Bonds of 2009A
2007A
Funds
Water
Sewer
Water Total
Transfer Out
General
$
$ -
$
$ 28,505
$
$
$ - $ 28,505
Other Governmental
Funds
220,992
612,657
45,435
436,900
47,200
97 1,363,281
Water
-
-
55,000
-
55,000
Sanitary Sewer
-
55,000
100,000
155,000
Refuse
6,860
6,860
Storm Water
-
34,075
34,759
68,834
Total Transfers
$ 227,852
$ 612,657
$ 34,075
$ 2(8.699
$ 536,900
$ 47.200
$ 97 $ 1,677.480
Transfers were made to close funds and provide resources for debt payments and planning
projects.
50
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 5 — CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2009 was 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:
Improvements
Buildings
Infrastructure
Machinery and Equipment
Total Accumulated
Depreciation
Total Capital Assets being
Depreciated, Net
Governmental Activities Capital
Assets, Net
Beginning
Ending
Balance
Increases
Decreases
Balance
$ 346,258
$ -
$ -
$ 346,258
1,576,464
36,029
1,594,448
18,045
1,922,722
36,029
1,594,448
364,303
2,466,309
-
-
2,466,309
14,280,864
1,474,564
-
15,755,428
488,797
116,478
-
605,275
2,609,338
37,324
71,806
2,574,856
19,845,308
1,628,366
71,806
21,401,868
626,044
67,175
-
693,219
6,345,014
935,405
-
7,280,419
246,418
34,918
-
281,336
1,648,400
184,657
70,932
1,762,125
8,865,876
1,222,155
70,932
10,017,099
10,979,432
406,211
874
11,384,769
$12,902,154
$ 442,240
$1,595,322
$11,749,072
51
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 5 — CAPITAL ASSETS
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
Business -Type Activities
Beginning Ending
Balance Increases Decreases Balance
$ 377,882 $ - $ - $ 377,882
2,164,358 - 2,125,326 39,032
2,542,240 - 2,125,326 416,914
8,149,011 - 28,596 8,120,415
20,666,814 2,128,733 - 22,795,547
615,147 19,167 10,530 623,784
29,430,972 2,147,900 39,126 31,539,746
964,582 186,260 22,448 1,128,394
3,529,372 461,840 - 3,991,212
261,008 44,985 10,530 295,463
4,754,962 693,085 32,978 5,415,069
24,676,010 1,454,815 6,148 26,124,677
Capital Assets, Net $27,218,250 $1,454,815 $2,131,474
$26,541,591
Depreciation expense was charged to functions /programs of the City as follows:
Governmental Activities:
General Government
$ 49,039
Public Safety
97,494
Public Works
1,000,231
Culture and Recreation
75,071
EDA
Total Depreciation Expense - Governmental Activities $ 1,222,155
Business -Type Activities:
Water $ 387,607
Sanitary Sewer 207,683
Storm Sewer 97,795
Total Depreciation Expense - Business -Type Activities $ 693,085
52
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 6 - LONG -TERM DEBT
A. General Obligation Bonds
The City issues G.O. bonds to provide for financing improvement, development and street
improvement projects. Debt service is covered respectively by contract revenue, special
assessments against benefited properties, federal grants and lease revenue with any shortfalls
being paid from general taxes.
G.O. bonds are direct obligations and pledge the full faith and credit of the City. These bonds
generally are issued as 5 or 15 year serial bonds with equal debt service payments each year.
Revenue bonds are issued by the City where the City pledges income derived from the acquired
or constructed assets to pay debt service including access and trunk charges and utility user fees.
B. Components of Long -Term Liabilities
Issue Interest Original Final Principal Due Within
Date Rate Issue Maturity Outstanding One Year
Governmental Activities:
G.O. Bonds, Including Refunding Bonds:
G.O. Refunding Bonds of200313 07/28/03 1.5 %-4.4% $ 815,000 12/01/17 $ 545,000 $
55,000
G.O. Certificates of Indebtedness
of 2006B 02/22/06 3.4 % -3.6% 250,000 12/01/10 65,000
65,000
G.O. Certificates of Indebtedness
of2008A 04/03/08 3.1 % -3.5% 290,000 12/01/13 235,000
55,000
G.O. CIP Refunding Bonds 2009B 09/03/09 1.10% -3.75% 495,000 12/01/18 495,000
50,000
Total G.O. Bonds 1,340,000
225,000
G.O. Special Assessment Bonds:
G.O. Improvement Crossover
Refunding Bonds of 2003C 07/28/03 1.25 % -3.15% 750,000 12/01/11 125,000
60,000
G.O. Improvement Bonds of2005B 03/24/05 2.5 % -4.4% 1,655,000 12/01/20 1,285,000
95,000
G.O. Improvement Bonds of 2005C 09/20/05 3.5% 3,100,000 12/01/10 810,000
810,000
G.O. Improvement Bonds of2006C 06/13/06 4.00 %4.25% 2,375,000 12/01/21 2,000,000
135,000
G.O. Improvement Bonds of 2007A 07/25/07 4.00 %4.13% 2,875,000 12/01/17 1,865,000
510,000
G.O. Improvement Refunding
Bondsof200713 11/14/07 3.6 % -3.9% 980,000 12/01/14 715,000
145,000
G.O. Improvement Refunding
Bonds of 2009A 03/19/09 1.25 % -2.90% 2,555,000 12/01/17 2,555,000
295,000
Total G.O. Special
Assessment Bonds 9,355,000 2,050,000
Public Project Revenue Bonds:
EDA Revenue Refunding Bonds of 2005A 03/15/05 2.75 % 4.15% 645,000 12/01/15 500,000
75,000
Unamortized Premiums/Discounts 42,543
-
Compensated Absences 288,146
27,178
Net Other Post Employment Benefits Obilgation 36,371
Total Long -Term Liabilities,
Governmental Activities $ 11.562,060 $ 2,377,178
53
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 6 — LONGTERM DEBT
B. Components of Long -Term Liabilities (Continued)
Long -term bonded indebtedness listed on the previous page and above were issued to finance
acquisition and construction of capital assets or to refinance (refund) previous bond issues.
The City issued the $ 3,010,000 of G.O. Improvement Crossover Refunding Bonds 2009A for a
current crossover refunding of $ 2,500,000 of the G.O. Improvement Bonds, Series 2002 and
$ 440,000 Sewer Revenue Bonds, Series 2001. Both issues were called on December 1, 2009.
The refunding was undertaken to reduce total future debt service payments. The refunding
resulted in a net present value cash flow savings of $ 120,848. The economic gain for the
transaction was $ 121,057.
The City issued the $ 495,000 of G.O. Capital Improvement Project Bonds 2009B for a current
refunding of $ 480,000 of the G.O. Revenue Bonds, Series 2003. The issue was called on
September 3, 2009. The refunding was undertaken to reduce total future debt service payments.
The refunding resulted in a net present value cash flow savings of $ 21,095. The economic gain
from the transaction was $ 21,903.
The City issued the $ 425,000 of G.O. Water Revenue Refunding Bonds 2009C for a current
refunding of $ 405,000 of the G.O. Water Revenue Refunding Bonds, Series 2002. The issue
was called on October 20, 2009. The refunding was undertaken to reduce total future debt
service payments. The refunding resulted in a net present value cash flow savings of $ 17,555.
The economic gain from the transaction was $ 21,264.
54
Issue
Interest
Original
Final
Principal
Due Within
Date
Rate
Issue
Maturity
Outstanding
One Year
Business -Type Activities:
G.O. Revenue Bonds:
G.O. Water Revenue Bonds of 2005D
12/15/05
4.00 % -4.25%
$ 4,595,000
12/01/28
$ 4,595,000
$
G.O. Water Revenue Bonds of 2006A
01/12/06
3.50 % -4.00%
3,575,000
12101/16
2,435,000
310,000
G.O. Sewer Revenue Refunding Bonds of 2009A
03/19/09
1.25 % -3.85%
455,000
12/01/21
455,000
35,000
G.O. Water Revenue Refunding Bonds of 2009C
10/20/09
1.0 % -2.6%
425,000
12/01/16
425,000
55,000
Total G.O. Revenue Bonds
7,910,000
400,000
Note Payable
05/01/06
4.0%
220,000
05110110
44,000
44,000
Unamortized Premium
42,987
-
Compensated Absences
107,573
15,551
Net Post Employment Benefit Obligation
10,232
Total Business -Type Activities
8,114,792
459,551
Total all Long -Term Liabilities
$ 19, 76,852
$ 2.836.729
Long -term bonded indebtedness listed on the previous page and above were issued to finance
acquisition and construction of capital assets or to refinance (refund) previous bond issues.
The City issued the $ 3,010,000 of G.O. Improvement Crossover Refunding Bonds 2009A for a
current crossover refunding of $ 2,500,000 of the G.O. Improvement Bonds, Series 2002 and
$ 440,000 Sewer Revenue Bonds, Series 2001. Both issues were called on December 1, 2009.
The refunding was undertaken to reduce total future debt service payments. The refunding
resulted in a net present value cash flow savings of $ 120,848. The economic gain for the
transaction was $ 121,057.
The City issued the $ 495,000 of G.O. Capital Improvement Project Bonds 2009B for a current
refunding of $ 480,000 of the G.O. Revenue Bonds, Series 2003. The issue was called on
September 3, 2009. The refunding was undertaken to reduce total future debt service payments.
The refunding resulted in a net present value cash flow savings of $ 21,095. The economic gain
from the transaction was $ 21,903.
The City issued the $ 425,000 of G.O. Water Revenue Refunding Bonds 2009C for a current
refunding of $ 405,000 of the G.O. Water Revenue Refunding Bonds, Series 2002. The issue
was called on October 20, 2009. The refunding was undertaken to reduce total future debt
service payments. The refunding resulted in a net present value cash flow savings of $ 17,555.
The economic gain from the transaction was $ 21,264.
54
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 6 - LONGTERM DEBT
C. Changes in Long -Term Liabilities
Long -term liability activity for the year ended December 31, 2009 was as follows:
55
Beginning
Ending
Due Within
Balance
Additions
Reductions
Balance
One Year
Governmental Activities:
Bonds Payable:
General Obligation
$ 1,025,000
$ 495,000
$ 180,000
$ 1,340,000
$ 225,000
G.O. Special Assessment Bonds
11,395,000
2,555,000
4,595,000
9,355,000
2,050,000
Public Project Revenue Bonds
1,095,000
-
595,000
500,000
75,000
Total Bonds Payable
13,515,000
3,050,000
5,370,000
11,195,000
2,350,000
Loan Payable
28,866
-
28,866
-
-
Unamortized Premiums/Discounts
841
43,983
2,281
42,543
-
Compensated Absences
236,465
205,125
153,444
288,146
27,178
Net Other Post Employment Benefits Obligation
-
44,608
8,237
36,371
-
Total Governmental
Activities
13,781,172
3,343,716
5,562,828
11,562,060
2,377,178
Business -Type Activities:
Bonds Payable:
G.O. Utility Revenue Bonds
8,250,000
880,000
1,220,000
7,910,000
400,000
Note Payable:
Water Filtration Plant Land
88,000
-
44,000
44,000
44,000
Unamortized Premiums/Discounts
44,423
6,072
7,508
42,987
-
Compensated Absences
89,157
63,944
45,528
107,573
15,551
Net Other Post Employment Benefits Obligation
-
12,550
2,318
10,232
-
Business -Type Activities
8,471,580
962,566
1,319,354
8,114,792
459,551
Total Long -Term Liabilities
$ 22,252,752
$ 4,306,282
$ 6,882,182
$ 19,676,852
$ 2,836,729
The General Fund typically liquidates the liability related
to compensated absences.
55
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 6 - LONGTERM DEBT
D. Minimum Debt Payments
Minimum annual principal and interest payments required to retire long -term liabilities:
wet
Governmental Activities
Year Ended
G.O. Special Assessment Bonds
Public Project Revenue Bonds
June 30,
Principal
Interest
Principal
Interest
2010
$ 2,050,000
$ 331,023 $
75,000 $
18,880
2011
1,255,000
262,700
80,000
16,443
2012
1,210,000
221,165
85,000
13,643
2013
800,000
180,303
80,000
10,455
2014
760,000
152,590
90,000
7,335
2015 -2019
2,735,000
391,166
90,000
3,735
2020 -2021
545,000
32,085
-
-
Total
$ 9,355,000
$ 1,571,032 $
500,000 $
70,491
Governmental Activities
Year Ended
G.O. Government Activities
June 30,
Principal
Interest
Total
2010
$ 225,000
$ 46,715 $
2,746,618
2011
170,000
37,285
1,821,428
2012
180,000
32,620
1,742,428
2013
180,000
27,278
1,278,036
2014
125,000
21,770
1,156,695
2015 -2019
460,000
39,960
3,719,861
2020 -2021
-
-
577,085
Total
$ 1,340,000
$ 205,628 $
13,042,151
Business -Type Activities
Year Ended
Utility Revenue Bonds
Note Payable
June 30,
Principal
Interest
Principal
Interest
Total
2010
$ 400,000
$ 306,904 $
44,000 $
1,760
$ 752,664
2011
410,000
289,954
-
-
699,954
2012
430,000
279,861
-
-
709,861
2013
440,000
265,696
-
-
705,696
2014
455,000
249,944
-
-
704,944
2015 -2019
2,345,000
986,199
-
-
3,331,199
2020 -2024
2,490,000
508,094
-
-
2,998,094
2025 -2028
940,000
73,400
-
-
1,013,400
Total
$ 7,910,000
$ 2,960,052 $
44,000 $
1,760
$ 10,915,812
wet
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 6 — LONG -TERM DEBT
E. Conduit Debt
Conduit debt obligations are certain limited obligation revenue bonds or similar debt instruments
issued for the express purpose of providing capital financing for a specific third party. The City
has issued various revenue bonds to provide funding to private sector entities for projects deemed
to be in the public interest. Although these bonds bear the name of the City, the City has no
obligation for such debt. Accordingly, the bonds are not reported as liabilities in the financial
statements of the City.
As of December 31, 2009, the City's conduit debt consisted of the following:
Commercial Development Revenue Note
(Independence Center), Series 2001 $ 445,178
Industrial Revenue Bonds (St. Joseph
Development, LLC), Series 2002 1,690,000
Total $ 2,135,178
NOTE 7 — RESERVED FUND BALANCES/NET ASSETS
Reserved /Designated Fund Equity
Fund equity balances are classified on the following page to reflect the limitations and
restrictions of the respective funds.
A. Design ated/Undesign ated Fund Balance
57
Designated
Capital
Debt
Working
Projects
Service
Capital
EDA Undesignated
Total
General Fund
$ 339,689
$ 150,000
$ 886,903
$ $ 282,973
$ 1,659,565
G.O. Crossover Refunding Bonds of 2009A
-
584,617
-
-
584,617
G.O. Improvement Bonds 2005B
-
556,833
- -
556,833
G.O. Improvement Bonds 2005C
-
963,059
-
- -
963,059
G.O. Improvement Bonds 2007A
-
497,343
-
- -
497,343
Other Governmental Funds
1,992,537
1,680,955
9,127 1,075,813
4,758,432
Total
$_2,332 ,226
$ 4,432,807
$ 886,903
$ 9,127 $ 1,358,786
$ 9,019,849
57
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 8 — RISK MANAGEMENT
The City purchases commercial insurance coverage through the League of Minnesota Cities
Insurance Trust ( LMCIT) with other cities in the state, which is a public entity risk pool currently
operating as a common risk management and insurance program. The City pays an annual
premium to the LMCIT for its insurance coverage. The LMCIT is self - sustaining through
commercial companies for excess claims. The City is covered through the pool for any claims
incurred but unreported, but retains risk for the deductible portion of its insurance policies. The
amount of these deductibles is considered immaterial to the financial statements.
There were no significant reductions in insurance from the previous year or settlements in excess
of insurance coverage for any of the past three fiscal years.
The City's workers' compensation insurance policy is retrospectively rated. With this type of
policy, final premiums are determined after loss experience is known. The amount of premium
adjustment for 2009 is estimated to be immaterial based on workers' compensation rates and
salaries for the year.
At December 31, 2009, there were no other claims liabilities reported in the fund based on the
requirements of GASB Statement No. 10, which requires a liability for claims be reported if
information prior to the issuance of the financial statements indicates it is probable a liability has
been incurred at the date of the financial statements and the amount of the loss can be reasonably
estimated.
NOTE 9 — DEFINED BENEFIT PENSION PLANS — STATE -WIDE
Public Employees' Retirement Association
A. Plan Description
All full -time and certain part-time employees of the City 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. These
Plans are established and administered in accordance with Minnesota Statutes Chapters 353 and
356.
PERF members belong to either the Coordinated or Basic Plan. Coordinated Plan members are
covered by Social Security and Basic Plan members are not. All new members must participate
in the Coordinated Plan. All police officers, firefighters and peace officers who qualify for
membership are covered by the PEPFF.
58
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 9 — DEFINED BENEFIT PENSION PLANS — STATE -WIDE
Public Employees' Retirement Association (Continued)
A. Plan Description (Continued)
PERA provides retirement benefits as well as disability benefits to members, and benefits to
survivors upon death of eligible members. Benefits are established by state statute and vest after
three years of credited service. The defined retirement benefits are based on a member's highest
average salary for any five successive years of allowable service, age and years of credit at
termination of service.
Two methods are used to compute benefits for 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% of average salary for each of the first 10 years of service and 2.7% for each
remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2% of average
salary for each of the first 10 years and 1.7% for each remaining year. Under Method 2, the
annuity accrual rate is 2.7% of average salary for Basic Plan members and 1.7% for Coordinated
Plan members for each year of service. For PEPFF members, the annuity accrual rate is 3.0% for
each year of service. For all PERF and PEPFF 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
Plan members hired prior to July 1, 1989. Normal retirement age is the age for unreduced Social
Security benefits capped at 66 for Coordinated Plan 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. A single -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 yet receiving them are bound by the provisions in effect at the time they last terminated
their public service.
PERA issues a publicly available financial report that includes financial statements and required
supplementary information for PERF and PEPFF. That report may be obtained on the Internet at
www.mnpera.org, by writing to PERA at 60 Empire Drive, #200, St. Paul, Minnesota 55103-
2088 or by calling (651) 296 -7460 or (800) 652 -9026.
96
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 9 — DEFINED BENEFIT PENSION PLANS — STATE -WIDE
Public Employees' Retirement Association (Continued)
B. Funding Policy
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These
Statutes are established and amended by the State Legislature. The City makes annual
contributions to the pension plans equal to the amount required by state statutes. PERF Basic
Plan members and Coordinated Plan members were required to contribute 9.1 % and 6.0 %,
respectively, of their annual covered salary in 2009. PEPFF members were required to contribute
9.4% of their annual covered salary in 2009. The City is required to contribute the following
percentages of annual covered payroll: 11.78% for Basic Plan PERF members, 6.75% for
Coordinated Plan PERF members and 14.1 % for PEPFF members. The City's contributions to
the PERF for the years ending December 31, 2009, 2008 and 2007 were $ 46,555, $ 47,466 and
$ 37,006, respectively. The City's contributions to the PEPFF for the years ending December 31,
2009, 2008 and 2007 were $ 62,604, $ 59,981 and $ 49,371, respectively. The City's
contributions were equal to the contractually required contributions for each year as set by state
statute.
C. Defined Contribution Plan
The City provides pension benefits for its elected local government officials through a defined
contribution plan administered by the PERA. The Public Employees' Defined Contribution Plan
(PEDCP) is a multi - employer 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 plan provisions,
including the employee and employer contribution rates for those qualified personnel who elect
to participate. An eligible elected official who decides to participate contributes 5% 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 2% of
employer contributions and twenty -five hundredths of I% of the assets in each member's account
annually.
•1
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 9 — DEFINED BENEFIT PENSION PLANS — STATE -WIDE
Public Employees' Retirement Association (Continued)
C. Defined Contribution Plan (Continued)
There is no vesting period required to receive benefits in the PEDCP. Both the City and the
elected local government officials made the required 5% contribution, amounting to $ 1,280 from
each source, or $ 2,560 in total. As of December 31, 2009 and for the fiscal year then ended,
PERA held no securities issued by the City or other related parties.
NOTE 10 — POST EMPLOYMENT HEALTH CARE PLAN
A. Plan Description
The City provides a single - employer defined benefit health care plan to eligible retirees. The
plan offers medical coverage. Medical coverage is administered by B1ueCross B1ueShield. It is
the City's policy to periodically review its medical coverage, and to obtain requests for proposals
in order to provide the most favorable benefits and premiums for City employees and retirees.
B. Funding Policy
Retirees contribute to the health care plan at the same rate as City employees. This results in the
retirees receiving an implicit rate subsidy. Contribution requirements are established by the City,
based on the contract terms with B1ueCross BlueShield. The required contributions are based on
projected pay -as- you -go financing requirements. For fiscal year 2009, the City contributed
$ 10,555 to the plan. As of December 31, 2009, there were two retirees receiving health benefits
from the City's health plan.
C. Annual Other Post Employment Benefits Cost and Net Other Post Employment
Beneftis Obligation
The City's annual other post employment benefit (OPEB) cost (expense) is calculated based on
the annual required contribution (ARC) of the City, an amount actuarially determined in
accordance with the parameters of GASB Statement No.45. The City prospectively implemented
this Statement during the 2009 fiscal year. The ARC represents a level of funding that, if paid on
an ongoing basis, is projected to cover normal cost each year and amortize any unfunded
actuarial liabilities (or funding excess) over a period not to exceed 30 years. The table on the
following page shows the components of the City's annual OPEB cost of the year, the amount
actually contributed to the plan, and changes in the City's net OPEB obligation to the plan.
61
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 10 — POST EMPLOYMENT HEALTH CARE PLAN
C. Annual Other Post Employment Benefits Cost and Net Other Post Employment
Beneftis Obligation (Continued)
ARC
$ 57,158
Interest on Net OPEB Obligation
_
Adjustment to ARC
_
Annual OPEB Cost
57,158
Contributions Made
10,555
Increase in Net OPEB Obligation
46,603
Net OPEB Obligation - Beginning of Year
-
Net OPEB Obligation - End of Year
$ 46,603
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and
the net OPEB obligation for 2009 was as follows:
Fiscal Year Annual OPEB
Ended Cost
Percentage of
Employer Annual OPEB Cost Net OPEB
Contribution Contributed Obigation
12/31/09 $ 57,158 $ 10,555 18% $ 46,603
D. Funded Status and Funding Progress
As of January 1, 2009, the most recent actuarial valuation date, the City had no assets deposited
to fund the plan. The actuarial accrued liability for benefits was $ 345,319 and the actuarial
value of assets was $ 0, resulting in an unfunded actuarial accrued liability (UAAL) of $ 345,319.
The covered payroll (annual payroll of active employees covered by the plan) was $ 1,070,515,
and the ratio of the UAAL to the covered payroll was 32.3 %.
Actuarial valuations involve estimates of the value of reported amounts and assumptions about
the probability of occurrence of events far into the future. Examples include assumptions about
future employment, mortality and the health care cost trend. Amounts determined regarding the
funded status of the plan and the ARC of the employer are subject to continual revision as actual
results are compared with past expectations and new estimates are made about the future.
The Schedule of Funding Progress — Other Post Employment Benefits, presented as required
supplementary information following the Notes to the Financial Statements, presents multi -year
trend information about whether the actuarial value of plan assets is increasing or decreasing over
time relative to the actuarial accrued liabilities for benefits.
62
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 10 — POST EMPLOYMENT HEALTH CARE PLAN
E. Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan (the
plan as understood by the employer and the plan members) and include the types of benefits
provided at the time of each valuation and the historical pattern of sharing of benefit costs
between the employer and plan members to that point. The actuarial methods and assumptions
used include techniques that are designed to reduce the effects of short-term volatility in actuarial
accrued liabilities, consistent with the long -term perspective of the calculations.
In the January 1, 2009, the actuarial valuation date, the projected unit credit with 30 year
amortization of the unfunded liability method was used. The actuarial assumptions included a
4.0% discount rate. The City currently does not plan to pref ind for this benefit. At the actuarial
valuation date, the annual health care cost trend rate was calculated to be 10% initially, reduced
incrementally to an ultimate rate of 5% after 10 years. The UAAL is being amortized as a level
percentage of projected payroll on an open basis. The remaining amortization period at
December 31, 2009 was 30 years.
NOTE 11 —COMMITMENTS
The City has entered into contracts for construction as follows:
Expended
Contract through
Project Amount 12/31/09 Commitment
North Corridor and CSAH 2 Realignment $ 383,172 $ 331,452 $ 51,720
Field Street Corridor Study 331,189 280,300 50,889
Southwest Beltway Study 54,375 10,890 43,485
Total $ 146,094
roil
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 11 —COMMITMENTS
On April 19, 2008, the City of St. Joseph entered into an agreement with the Cities of St. Cloud,
St. Augusta, Sartell, Sauk Rapids and Waite Park. As a part of this agreement, each party
became responsible for the repayment of its proportionate share of certain projects' funding
secured by St. Cloud. The share includes bond issuance costs, finance fees and expenses and net
interest costs. Debt service payments to the City of St. Cloud shall be made in monthly
installments over a 10 year period.
On November 15, 2009, the City of St. Cloud issued G.O. Sewer Revenue Bonds, Series 2009B
with payments commencing August 1, 2010. The City of St. Joseph's portion of the debt is
$ 859,977. The interest rate on the bonds is 2.0% - 4.0 %. The City is obligated to the City of St.
Cloud for certain construction projects related to this issuance and other City of St. Cloud
funding as follows:
Expended
Total Project St. Joseph Through
Project Cost Share 12/31/09 Commitment
Lower Pan Collapse Emergency Repairs
$ 617,908
$ 115,487
$ 38,496 $ 76,991
Halliday Road/Waite Avenue Emergency Repairs
437,175
101,337
33,816 67,521
Tri-City (Parkwood) Rehab Project
1,344,622
354,180
- 354,180
SIS Phase 1 (Lower Pan/Lincoln Avenue)
2,246,000
380,820
- 380,820
SIS Phase 2 (Metro Incerceptor)
1,500,000
331,045
- 331,045
NOTE 12 — RELATED PARTY TRANSACTION
The St. Joseph EDA has issued Public Project Revenue Bonds of 2003A and 2005A. 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 own the projects upon completion of the
rental payments. Since the St. Joseph EDA is reported as a blended component unit of the City
the lease transactions are not reported. The debt and projects are recorded as though part of the
City.
NOTE 13 — SUBSEQUENT EVENTS
As a part of the Sewer Use Agreement referenced above, each party also became responsible for
the repayment of its proportionate share of the Wastewater Treatment Facility expansion
project's construction phase funding secured by St. Cloud. The share includes bond issuance
costs, finance fees and expenses and net interest costs. Debt service payments to the City of St.
Cloud shall be made in monthly installments over a 20 year period.
64
CITY OF ST. JOSEPH
Stearns County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2009
NOTE 13 — SUBSEQUENT EVENTS
On February 26, 2010, the City of St. Cloud issued PFA debt for $ 43,559,900 with payments
commencing August 20, 2010. The City of St. Joseph's portion of the debt is $ 5,517,309. The
interest rate on the loan is 1.771 %.
Also, the City of St. Joseph issued G.O. Certificates of Indebtedness, Series 2010A, on April 1,
2010. The Certificates totaled $ 150,000 and carry an interest rate of 2.75 %. The Certificate
matures on December 31, 2015.
NOTE 14 — RECLASSIFICATION OF FUNDS
In the prior year financial statements the Water Access and Sewer Access Funds were presented
as nonmajor proprietary funds. These Funds have been reclassified as nonmajor governmental
funds in the current year. The understatement of the beginning fund balance for proprietary
funds is offset by the overstatement of the beginning net assets for governmental funds.
65
CITY OF ST. JOSEPH
Stearns County
SCHEDULE OF FUNDING PROGRESS - OTHER POST EMPLOYMENT BENEFITS
December 31, 2009
* This Schedule was implemented in 2009 and, therefore, contains only one year of data.
See Note 10 in the Notes to the Financial Statements for more details on this Schedule.
68
Actuarial
UAAL as a
Actuarial
Accrued Liability
Unfunded
Percentage of
Actuarial
Value of
(AAL) -
AAL
Funded
Covered
Covered
Valuation
Assets
Entry Age
(UAAL)
Ratio
Payroll
Payroll
Date
(a)
(b)
(b -a)
(a/b)
c
((b -a) /c)
12/31/09
$ -
$ 345,319
$ 345,319
0.0%
$ 1,070,515
32.3%
* This Schedule was implemented in 2009 and, therefore, contains only one year of data.
See Note 10 in the Notes to the Financial Statements for more details on this Schedule.
68
CITY OF ST. JOSEPH
Stearns County, Minnesota
COMBINING BALANCE SHEET -
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2009
ASSETS:
Cash and Investments
Taxes Receivable - Delinquent
Special Assessments Receivable:
Delinquent
Deferred
Interest Receivable
Due from Other Funds
Due from Other Governments
Notes Receivable
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 - Designated
Special Revenue - Undesignated
Debt Service - Designated
Capital Projects - Designated
Total Fund Balances
Total Liabilities and
Fund Balances
Special Revenue
Economic
TIF 1 -4 St.
TIF 2 -1
Development
Joseph
Millstream
Authority
Development
Shops and
(150)
(156)
Lofts (157)
$ 7,070
$ 34,057
$ 464
151
272
8
$ 7,221
$ 34,329
$ 472
$ 3,593
3,593
9,127 _ -
(5,499) 34,329 472
3,628 34,329 472
$ 7,221 $ 34,329 $ 472
70
Special Revenue
State
Collected Park Charitable City Street
Sales Tax Dedication Recreation Gambling Beautification Revolving
(200) (205) Center (210) (215) (232) Loan (250)
$ 909,582 $ 45,500 $ 50,072 $ 5,620 $ 59 $ 30,457
5,613 396 362 25 - 336
47,448 - - - - -
- 1,999 - - 2,500 24,000
$ 962,643 $ 47,895 $ 50,434 $ 5,645 $ 2,559 $ 54,793
$ - $ 75 $ - $ 750 $ - $ 634
- - - - 49,000 -
999 - - 2,000 24,000
- 1,074 - 750 51,000 24,634
962,643
46,821
50,434
4,895
(48,441)
30,159
962,643
46,821
50,434
4,895
(48,441)
30,159
$ 962,643
$ 47,895
$ 50,434
$ 5,645
$ 2,559
$ 54,793
71
CITY OF ST. JOSEPH
Stearns County, Minnestoa
COMBINING BALANCE SHEET -
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2009
ASSETS:
Cash and Investments
Taxes Receivable - Delinquent
Special Assessments Receivable:
Delinquent
Deferred
Interest Receivable
Due from Other Funds
Due from Other Governments
Notes Receivable
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 - Designated
Special Revenue - Undesignated
Debt Service - Designated
Capital Projects - Designated
Total Fund Balances
Total Liabilities and
Fund Balances
Special Revenue
Total
$ 1,082,881
7,163
47,448
28,499
Debt Service
$ 345,643
482
300
245,515
2,933
68,482
$ 509
4,112
33
2,233
$ 1,165,991 $ 663,355 $ 6,887
$ 5,052
49,000
26,999
81,051
9,127
1,075,813
1,084,940
246,297
246,297
417,058
417,058
4,112
4,112
2,775
2,775
$ 1,165,991 $ 663,355 $ 6,887
72
City Hall
G.O.
G.O. EDA
Improvement
Refunding
Refunding
Bonds of
Bonds of 2007B
2005A
(320)
(322)
$ 345,643
482
300
245,515
2,933
68,482
$ 509
4,112
33
2,233
$ 1,165,991 $ 663,355 $ 6,887
$ 5,052
49,000
26,999
81,051
9,127
1,075,813
1,084,940
246,297
246,297
417,058
417,058
4,112
4,112
2,775
2,775
$ 1,165,991 $ 663,355 $ 6,887
72
Debt Service
$ 136,404 $ 104,405 $ 7,888 $ 777,579 $ 8,177 $ 6,306
1,439 719 2,430 2,091 1,709 2,506
204 - 2,231 -
- 25,483 - 534,243 - -
1,069 902 110 5,855 196 42
734 478 1,410 19,754 1,214 1,349
$ 139,646 $ 132,191 $ 11,838 $ 1,341,753 $ 11,296 $ 10,203
1,439 26,406 2,430 538,565 1,709 2,506
1,439 26,406 2,430 538,565 1,709 2,506
138,207
G.O.
9,408
803,188
G.O.
7,697
138,207
Improvement
9,408
803,188
Certificates
7,697
Fire Hall G.O.
Crossover
G.O.
G.O.
of
G.O. Capital
Refunding
Refunding
Certificates of
Improvement
Indebtedness
Improvement
Bonds of
Bonds of 2003C
Indebtedness of
Bonds of
of 2008A
Plan Bonds of
2003B (331)
(332)
2006B (337)
2006C (338)
(342)
2009B (343)
$ 136,404 $ 104,405 $ 7,888 $ 777,579 $ 8,177 $ 6,306
1,439 719 2,430 2,091 1,709 2,506
204 - 2,231 -
- 25,483 - 534,243 - -
1,069 902 110 5,855 196 42
734 478 1,410 19,754 1,214 1,349
$ 139,646 $ 132,191 $ 11,838 $ 1,341,753 $ 11,296 $ 10,203
1,439 26,406 2,430 538,565 1,709 2,506
1,439 26,406 2,430 538,565 1,709 2,506
138,207
105,785
9,408
803,188
9,587
7,697
138,207
9,408
803,188
9,587
7,697
105,785
$ 139,646 $
132,191 $
11,838
$ 1,341,753
$ 11,296
$ 10,203
73
CITY OF ST. JOSEPH
Stearns County, Minnestoa
COMBINING BALANCE SHEET -
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2009
ASSETS:
Cash and Investments
Taxes Receivable - Delinquent
Special Assessments Receivable:
Delinquent
Deferred
Interest Receivable
Due from Other Funds
Due from Other Governments
Notes Receivable
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 - Designated
Special Revenue - Undesignated
Debt Service - Designated
Capital Projects - Designated
Total Fund Balances
Total Liabilities and
Fund Balances
Debt Service Capital Projects
Northland
Debt Service Heights/
Relief Fund Transportation
(390) Total Studies (435)
$ 136,294 $ 1,523,205 $ 344,077
1,058 16,546 -
- 2,735 -
21,790 827,031 -
1,310 12,450 -
49,000 49,000 -
646 96,300 -
$ 210,098 $ 2,527,267 $ 344,077
$ - $ - $ 401
32,672
22,848 846,312 -
22,848 846,312 33,073
187,250 1,680,955 -
- - 311,004
187,250 1,680,955 311,004
$ 210,098 $ 2,527,267 $ 344,077
74
Capital Projects
2007 Street Total
Improvements General Capital Water Access Sewer Access Governmental
(441) Outlay (490) Fund (501) Fund (502) Total Funds
$ 413,048 $ 192,459 $ 391,424 $ 676,498 $ 2,017,506 $ 4,623,592
- - - - - 16,546
2,735
- - - 827,031
3,595 4,762 8,357 27,970
- - - 49,000
143,748
- - - - - 28,499
$ 413,048 $ 192,459 $ 395,019 $ 681,260 $ 2,025,863 $ 5,719,121
$ 58 $ 195 $ - $ - $ 654 $ 5,706
- - - - 32,672 32,672
- 49,000
- - - - - 873,311
58 195 - - 33,326 960,689
9,127
1,075,813
- - - - - 1,680,955
412,990 192,264 395,019 681,260 1,992,537 1,992,537
412,990 192,264 395,019 681,260 1,992,537 4,758,432
$ 413,048 $ 192,459 $ 395,019 $ 681,260 $ 2,025,863 $ 5,719,121
75
CITY OF ST. JOSEPH
Stearns County, Minnesota
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2009
REVENUES:
Property Taxes
Tax Increments
Sales Taxes
Special Assessments
Intergovernmental
Charges for Services
Miscellaneous:
Investment Income
Contributions and Donations
Other
Total Revenues
EXPENDITURES:
Current:
Public Works
Culture and Recreation
Economic Development
Debt Service:
Principal
Interest and Other Charges
Capital Outlay:
General Government
Public Safety
Public Works
Culture and Recreation
Total Expenditures
Excess of Revenues Over
(Under) Expenditures
OTHER FINANCING SOURCES (USES):
Refunding Bonds Issued
Bond Premium
Refunding Bond Payment
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
FUND BALANCES:
Beginning of Year
End of Year
Special Revenue
Economic
TIF 1 -4
TIF 2 -1
Development TIF 1 -3
St. Joseph
Millstream
State Collected
Authority Borgert
Development
Shops and
Sales Tax
(150) (155)
(156)
Lofts (157)
(200)
- -
66,192
6,400
-
- -
-
-
242,012
7,500 -
-
-
-
720 -
1,385
135
33,184
8,220 -
67,577
6,535
275,196
- -
-
-
166
53,126 -
59,953
6,200
-
53,126 - 59,953 6,200 166
(44,906) - 7,624 335 275,030
28,821
- (5,948) - (5,625) -
28,821 (5,948) - (5,625) -
(16,085) (5,948) 7,624 (5,290) 275,030
19,713 5,948 26,705 5,762 687,613
$ 3,628 $ - $ 34,329 $ 472 $ 962,643
76
Special Revenue
Park
Charitable
City Street
Dedication
Recreation
Gambling
Lake Wobegon
Beautification
Revolving Loan
(205)
Center (210)
(215)
Trail (230)
(232)
(250)
Total
$ -
$ -
$ -
-
-
-
-
-
-
72,592
-
-
-
-
-
-
242,012
-
-
-
-
-
-
7,500
2,473
2,205
192
-
-
2,348
42,642
-
-
8,753
5,000
500
-
14,253
1,000
-
-
-
-
240
1,240
3,473
2,205
8,945
5,000
500
2,588
380,239
10,899
6,217
17,116
(13,643)
- - - - 11,065
4,050 - - 25,077 148,406
- - - - 6,217
4,050 - - 25,077 165,688
2,205 4,895 5,000 500 (22,489) 214,551
4,987 - - 33,808
_ - - - - - - (11,573)
- - 4,987 - - 22,235
(13,643) 2,205 4,895 9,987 500 (22,489) 236,786
60,464 48,229 - (9,987) (48,941) 52,648 848,154
$ 46,821 $ 50,434 $ 4,895 $ - $ (48,441) $ 30,159 $ 1,084,940
77
CITY OF ST. JOSEPH
Stearns County, Minnesota
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2009
REVENUES:
Property Taxes
Tax Increments
Sales Taxes
Special Assessments
Intergovernmental
Charges for Services
Miscellaneous:
Investment Income
Contributions and Donations
Other
Total Revenues
EXPENDITURES:
Current:
Public Works
Culture and Recreation
Economic Development
Debt Service:
Principal
Interest and Other Charges
Capital Outlay:
General Government
Public Safety
Public Works
Culture and Recreation
Total Expenditures
Excess of Revenues Over
(Under) Expenditures
OTHER FINANCING SOURCES (USES):
Refunding Bonds Issued
Bond Premium
Refunding Bond Payment
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
FUND BALANCES:
Beginning of Year
End of Year
Debt Service
G.O.
28,866
City Hall G.O.
125,000
260,000
Improvement
Stearns
EDA
G.O.
G.O.
Refunding
Electric
Refunding
Improvements
Improvement
Bonds of
Cooperative
Bonds of
Bonds of
Bonds of 2002
2007B (320)
Loan (321)
2005A (322)
2004A (323)
(325)
$ 2,373
$ 906
$ 102,378
$ 29,740
$ 59,869
162,345
-
-
1,900
138,397
178
-
7,833
2,350
4,699
17,865
1,037
315
3,142
27,633
182,761
1,943
110,526
37,132
230,598
140,000
28,866
75,000
125,000
260,000
32,903
288
21,775
4,720
169,438
172,903
29,154
96,775
129,720
429,438
9,858
(27,211)
13,751
(92,588)
(198,840)
2,555,000
40,254
- (2,500,000)
26,028 - - 8,278 90,000
- (6,928) - - (612,657)
26,028 (6,928) - 8,278 (427,403)
35,886 (34,139) 13,751 (84,310) (626,243)
381,172 34,139 (10,976) 84,310 626,243
$ 417,058 $ - $ 2,775 $ - $ _
78
Debt Service
G.O.
79
Maintenance
Improvement
G.O.
Facility G.O.
Crossover
G.O.
G.O.
Improvement
EDA Revenue
Fire Hall G.O.
Refunding
Certificates of
Improvement
G.O. Certificates
Bonds of 2003D
Bonds of 2003A
Refunding Bonds
Bonds of 2003C
Indebtedness of
Bonds of
of Indebtedness
(328)
(329)
of 2003B (33 1)
(332)
2006B (LZL
2006C (338)
of 2008A (342)
$ -
$ 60,360
$ 33,150
$ 13,335
$ 64,424
$ 56,765
$ 59,127
829
-
-
21,201
-
106,072
-
-
4,699
2,515
997
4,913
4,343
4,664
-
-
39,290
-
-
-
(237)
2,412
7,178
5,799
779
36,133
1,013
67,471
592
82,133
41,332
70,116
203,313
64,804
-
40,000
60,000
55,000
65,000
130,000
55,000
220
23,003
22,818
5,753
4,900
87,989
9,930
220
63,003
82,818
60,753
217,989
69,900
64,930
372
4,468
(685)
(19,421)
216
(14,676)
(126)
-
480,000
-
-
-
-
_
-
(480,000)
-
-
-
-
_
24,759
-
-
-
-
30,000
-
-
(5,826)
-
-
-
-
_
24,759
(5,826)
-
-
-
30,000
-
25,131
(1,358)
(685)
(19,421)
216
15,324
(126)
(25,131)
1,358
138,892
125,206
9,192
787,864
9,713
$ -
$ -
$ 138,207
$ 105,785
$ 9,408
$ 803,188
$ 9,587
79
CITY OF ST. JOSEPH
Stearns County, Minnesota
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2009
REVENUES:
Property Taxes
Tax Increments
Sales Taxes
Special Assessments
Intergovernmental
Charges for Services
Miscellaneous:
Investment Income
Contributions and Donations
Other
Total Revenues
EXPENDITURES:
Current:
Public Works
Culture and Recreation
Economic Development
Debt Service:
Principal
Interest and Other Charges
Capital Outlay:
General Government
Public Safety
Public Works
Culture and Recreation
Total Expenditures
Excess of Revenues Over
(Under) Expenditures
OTHER FINANCING SOURCES (USES):
Refunding Bonds Issued
Bond Premium
Refunding Bond Payment
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
FUND BALANCES:
Beginning of Year
End of Year
Debt Service
G.O. Capital
Improvement
Debt Service
Plan Bonds of
Relief Fund
2009B (343)
(390)
Total
$ 1,244
$ 588
$ 484,259
-
1,449
432,193
-
-
37,191
-
-
39,290
214
5,702
108,985
7,739
1,458
1,101,918
Capital Projects
Northland
Heights/ 2007 Street
Transportation Improvements
Studies (435) (441)
- 1,033,866
18,316 - 402,053
48,592 9,343
(16,858) 7,739 (334,001) (48,592) (9,343)
15,000 - 3,050,000 _ _
3,729 - 43,983 _ _
- - (2,980,000) _ _
5,826 - 184,891 _ _
- (13,266) (638,677) (177,178) (454)
24,555 (13,266) (339,803) (177,178) (454)
7,697 (5,527) (673,804) (225,770) (9,797)
192,777 2,354,759 536,774 422,787
$ 7,697 $ 187,250 $ 1,680,955 $ 311,004 $ 412,990
80
Capital Projects
2008 Equipment
Total Other
Certificates
General Capital
Water Access
Sewer Access
Governmental
(442)
Outlay (490)
Fund (501)
Fund (502)
Total
Funds
$ -
$ -
$ -
$ -
$ -
$ 484,259
-
-
-
-
-
72,592
-
-
-
-
-
242,012
-
-
-
-
-
432,193
-
-
-
-
37,191
-
-
292,339
155,972
448,311
495,101
-
-
23,554
28,578
52,132
203,759
-
-
-
-
-
14,253
-
-
-
-
-
1,240
-
-
315,893
184,550
500,443
1,982,600
-
-
-
46,987
46,987
46,987
-
-
-
-
-
11,065
-
-
-
-
-
148,406
-
-
-
-
-
1,033,866
-
-
-
-
-
402,053
8,514
5,496
-
-
14,010
14,010
-
1,329
-
-
1,329
1,329
-
24,701
-
-
82,636
82,636
-
52
-
-
52
6,269
8,514
31,578
-
46,987
145,014
1,746,621
(8,514)
(31,578)
315,893
137,563
355,429
235,979
- 3,050,000
- 43,983
- (2,980,000)
- 218,699
(32,199) (436,900) (66,300) (713,031) (1,363,281)
(32,199) (436,900) (66,300) (713,031) (1,030,599)
(8,514) (63,777) (121,007) 71,263 (357,602) (794,620)
8,514 256,041 516,026 609,997 2,350,139 5,553,052
$ - $ 192,264 $ 395,019 $ 681,260 $ 1,992,537 $ 4,758,432
81
CITY OF ST. JOSEPH
Stearns County, Minnesota
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL FUND
For the Year Ended December 31, 2009
REVENUES:
Property Taxes
Sales Taxes
Special Assessments
Franchise Fees
Licenses and Permits
Intergovernmental Revenue:
Local Government Aid
Market Value Credit
PERA Aid
Fire Aid
Police Aid
Federal Grants
State Grants
Other Grants and Aids
Total Intergovernmental Revenue
Charges for Services:
General Government
Public Safety
Public Works
Culture and Recreation
Total Charges for Services
Fines and Forfeitures
Miscellaneous Revenues:
Investment Income
Contributions and Donations
Other
Total Miscellaneous Revenues
Total Revenues
EXPENDITURES:
General Government:
Mayor and Council
Administrative and Finance
Other General Government
Capital Outlay
Total General Government
82
Variance with
Original and
Actual
Final Budget -
Final Budget
Amounts
Over (Under)
$ 1,179,551
$ 1,104,205
$ (75,346)
125
410
285
1,500
4,735
3,235
102,200
107,120
4,920
169,700
186,058
16,358
865,754
777,183
(88,571)
-
83,994
83,994
1,541
1,541
-
42,000
35,943
(6,057)
38,500
57,577
19,077
2,800
11,462
81662
6,200
6,180
(20)
8,950
8,685
(265)
965,745
982,565
16,820
28,350
37,581
9,231
186,150
184,511
(1,639)
1,100
3,276
2,176
6,500
9,623
3,123
222,100
234,991
12,891
73,500
68,059
(5,441)
44,000
57,348
I3,348
26,100
19,369
(6,731)
4,850
31,036
26,186
74,950
107,753
32,803
2,789,371
2,795,896
6,525
88,600
56,033
(32,567)
403,495
344,563
(58,932)
189,160
96,503
(92,657)
7,000
1,014
(5,986)
688,255
498,113
(190,142)
82
CITY OF ST. JOSEPH
Stearns County, Minnesota
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL FUND
For the Year Ended December 31, 2009
EXPENDITURES:
Public Safety:
Police:
Current
Capital Outlay
Fire:
Current
Capital Outlay
Other:
Current
Capital Outlay
Total Public Safety
Public Works:
Streets and Highways:
Street Maintenance and Storm Sewers
Snow and Ice Removal
Street Engineering
Street Lighting
Capital Outlay
Total Streets and Highways
Culture and Recreation:
Current
Capital Outlay
Total Culture and Recreation
Total Expenditures
Excess of Revenues Over
Expenditures
OTHER FINANCING SOURCES (USES):
Sale of Property
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
FUND BALANCES:
Beginning of Year
End of Year
Variance with
Original and Actual Final Budget -
Final Budget Amounts Over (Under)
$ 894,035 $ 865,283 $ (28,752)
23,120 - (23,120)
317,645 282,998 (34,647)
36,000 6,423 (29,577)
125,600 118,051 (7,549)
1,000 - (1,000)
1,397,400 1,272,755 (124,645)
208,750
200,280
(8,470)
63,785
72,411
8,626
40,000
42,637
2,637
45,000
50,321
5,321
90,850
65,315
(25,535)
448,385
430,964
(17,421)
194,986
195,602
616
52,750
-
(52,750)
247,736
195,602
(52,134)
2,781,776
2,397,434
(384,342)
7,595
398,462
390,867
250
-
(250)
14,000
227,852
213,852
(42,010)
(28,505)
13,505
(27,760)
199,347
227,107
$ (20,165)
597,809
$ 617,974
1,061,756
$ 1,659,565
83
KDV
Expert advice. When you need -it.'
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GO VERNMENT A UDITING STANDARDS
April 23, 2010
Honorable Mayor and Members
of the City Council
City of St. Joseph
St. Joseph, Minnesota
We have audited the financial statements of the governmental activities, the business -type
activities, each major fund and the aggregate remaining fund information of the City of
St. Joseph, Minnesota, as of and for the year ended December 31, 2009, and have issued our
report thereon dated April 23, 2010. We conducted our audit in accordance with U.S. generally
accepted auditing standards and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States.
INTERNAL CONTROL OVER FINANCIAL REPORTING
In planning and performing our audit, we considered the City's internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing an
opinion on the financial statements but not for the purpose of expressing an opinion on the
effectiveness of the City's internal control over financial reporting. Accordingly, we do not
express an opinion on the effectiveness of the City's internal control over financial reporting.
A deficiency in internal control 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 material weakness is a deficiency, or
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the financial statements will not be prevented or detected and corrected
on a timely basis.
Our consideration of the internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and was not designed to identify all deficiencies in
internal control that might be deficiencies, significant deficiencies or material weaknesses.
However, as described in the accompanying Schedule of Findings and Responses on Legal
Compliance and Internal Control, we identified certain deficiencies in internal control over
financial reporting that we consider to be a material weakness, Audit Finding 06 -01.
85
K
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 that are required to be reported under Government Auditing Standards.
We noted certain additional matters that we reported to management of the City in a separate
letter dated April 23, 2010.
The City's response to the findings identified in our audit is described in the accompanying
Schedule of Findings and Responses on Legal Compliance and Internal Control. We did not
audit the City's response and, accordingly, we express no opinion on it.
This report is intended solely for the information and use of the City Council, management,
federal and state oversight awarding agencies and pass - through entities and is not intended to be
and should not be used by anyone other than these specified parties.
4t4,,.1 be L tat Vu e, W.
KERN, DEWENTER, VIERE, LTD.
St. Cloud, Minnesota
:.
I�DV
Expert advice. When you need it.s"
REPORT ON LEGAL COMPLIANCE
April 23, 2010
Honorable Mayor and Members
of the City Council
City of St. Joseph
St. Joseph, Minnesota
We have audited the financial statements of the governmental activities, the business -type
activities, each major fund and the aggregate remaining fund information of the City of
St. Joseph, Minnesota, as of and for the year ended December 31, 2009, and have issued our
report thereon dated April 23, 2010.
We conducted our audit in accordance with U.S. generally accepted auditing standards and the
provisions of the Minnesota Legal Compliance Audit Guide for Local Government, promulgated
by the State Auditor pursuant to Minnesota Statutes Sec. 6.65. Accordingly, the audit included
such tests of the accounting records and such other auditing procedures as we considered
necessary in the circumstances.
The Minnesota Legal Compliance Audit Guide for Local Government covers seven main
categories of compliance to be tested: contracting and bidding, deposits and investments,
conflicts of interest, public indebtedness, claims and disbursements, 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, except as described in the Schedule of
Findings and Responses on Legal Compliance and Internal Control.
This report is intended solely for the information and use of the City Council, City administration
and the Office of the State Auditor, and is not intended to be and should not be used by anyone
other than these specified parties.
Z)c Wz -A VAe, W
KERN, DEWENTER, VIERE, LTD.
St. Cloud, Minnesota
87
CITY OF ST. JOSEPH
Stearns County, Minnesota
SCHEDULE OF FINDINGS AND RESPONSES ON
LEGAL COMPLIANCE AND INTERNAL CONTROL
December 31, 2009
CURRENT AND PRIOR YEAR INTERNAL CONTROL FINDING:
Material Weakness:
Audit Finding 06 -01— Improve Segregation of Accounting Duties
Adequate segregation of accounting duties is in place when the four areas of a transaction
have been separated: authorization, custody, recording and reconciliation.
As part of this year's audit, we reviewed the City's documentation of its internal control over
significant areas including: cash receipts, cash disbursements, capital assets, payroll and
utility billing. Some of the areas in which we noticed a lack of segregation or an overlap in
duties are as follows:
Cash Receipts
The Office Specialist enters cash and checks into the point of sale system, reconciles the
entries and prepares the deposit. It was also noted the Utility Billing Clerk creates
invoices for miscellaneous billings, but does not retain the information used to create
invoices. There was no evidence of the Finance Director's review of deposits. The
Finance Director takes deposits to the bank.
Cash Disbursements
The Finance Director enters invoices into the system, generates checks and a check
register. The Finance Director is an authorized signer and approves some invoices for
payment. The City Administrator also has access to generate checks and is an authorized
signer. At year -end, the Finance Director reconciles and records accounts and contracts
payable.
Capital Assets
The Finance Director records, processes, reconciles and posts journal entries related to
capital assets.
Payroll
The Finance Director enters employee's time, processes and posts payroll, generates a
payroll report, distributes pay stubs to employees and posts the journal entries related to
payroll. In addition, this same employee reconciles payroll accruals, time off balances
and compensated absences.
CITY OF ST. JOSEPH
Stearns County, Minnesota
SCHEDULE OF FINDINGS AND RESPONSES ON
LEGAL COMPLIANCE AND INTERNAL CONTROL
December 31, 2009
CURRENT AND PRIOR YEAR INTERNAL CONTROL FINDING:
Material Weakness: (Continued)
Audit Finding 06 -01— Improve Segregation of Accounting Duties (Continued)
Utility Billing
The Utility Billing Clerk enters new accounts into the utility billing system and uploads
meter readings via interfacing with electronic readers. The Utility Billing Clerk enters
any rate changes to the system. The Utility Billing Clerk can enter manual adjustments,
calculates and enters final bills, prints and mails utility bills, reconciles receipts to billed
amounts and enters receipts batches.
Cash Reconciliation and Access
The Finance Director performs the above noted responsibilities, while also reconciling
cash and generating manual journal entries. The Finance Director also has the ability to
wire money either for payments or for investment transactions.
City's Response:
The City Council and City staff are aware of the limited personnel handling the City's
financial matters. The processes and internal controls are reviewed frequently to look for
ways to improve internal controls. The Department Heads, City Administrator and City
Council each have active roles in monitoring the financial matters of the City to provided
additional oversight. It is unlikely complete segregation of accountings duties will be
achieved due to the cost of hiring several additional staff.
:•
CITY OF ST. JOSEPH
Stearns County, Minnesota
SCHEDULE OF FINDINGS AND RESPONSES ON
LEGAL COMPLIANCE AND INTERNAL CONTROL
December 31, 2009
CURRENT AND PRIOR YEAR LEGAL COMPLIANCE FINDINGS:
Audit Finding 07 -03 — Update Collateral Assignment Agreement
Minnesota Statutes 118A.03, subd. 4 requires that the written assignment shall recite that, upon
default, the financial institution shall release to the government entity on demand, free of
exchange or any other charges, the collateral pledged.
It was noted during our legal compliance audit, the City's collateral assignment agreement with
First State Bank did not require the release of collateral upon default.
City's Response:
City staff worked with the First State Bank of St. Joseph to update the collateral assignment
agreement in February 2010. Anew agreement was signed by all parties. The collateral
assignment agreement states collateral securities will be released upon default.
a